Today’s News 29th November 2021

• Luongo: Being Thankful Is The Path To Victory Over Davos
  Luongo: Being Thankful Is The Path To Victory Over Davos

  Authored by Tom Luongo via Gold, Goats, ‘n Guns blog,

  Thanksgiving is my favorite holiday of the year. It is the one day where we celebrate putting aside our differences and doing the most basic thing humans can do together, share a meal.

  It is also the one holiday that does nothing to aggrandize The State in all its rotten guises. For that alone it would be my personal favorite. Ultimately this is just a story about two very different people coming together to share the fruits of the harvest and the hunt to begin the long and difficult process of building trust.

  Trust, by the way, is the basis for civilization itself. Without trust there is nothing, just The Hunger Games.

  It doesn’t matter whether the stories of the first Thanksgiving are true or not. Only those with an obsession with demystifying the world to salve their own inner emptiness care about such historical ‘truths.’

  It is the story itself that has power, like all great stories.

  It’s a story that is deeply embedded in the Myth of America as the great experiment in governance and rebellion against the colonial powers of Europe.

  In the end, that Myth is just that, of course, a myth.

  America’s history is much more nuanced and complex, darker and lighter than the foundations of that Myth care to admit. I’m not here to white, brown or even greenwash America’s history any more than an honest British, Italian, Russian, or Chinese person would do to their own.

  I’m here to discuss why it is we should be thankful for even having a world where such Myths can even exist.

  Of course history is messy. It’s violent and, at times, horrific. Yes, some people suck. Wars happened and will happen. Genocides committed and are yet to be committed.

  The big stories we all thrill to on our screens today big and small try to help us navigate what happens when people go mad in groups, lose their sense of propriety and humility, and become obsessed with their own fears at the expense of their empathy.

  This is what a breakdown of trust leads to, a loss of civilization.

  We live in a time where those in power show their bottomless disdain for humanity by only focusing on those bad parts of it. It’s now grown to even dissing this one American tradition that is one of the last honest lessons for a world spiraling out of control.

  Because that is what Thanksgiving is all about. Taking a time out from the harsh reality of existence and being thankful for what you have, not envious of or wistful for what you don’t.

  To listen to the race-baiting, soulless apparatchiks screeching about how we should turn Thanksgiving into yet another opportunity to distrust each other before eating a meal devoid of nutrition, i.e. the turkey, desperately imploring us to keep up barriers between family members over COVID is revealing more of their sickness than anyone else’s.

  These are people without hope or faith in anything. They are fallen, power-hungry zombies consumed with self-importance painting on a face of empathy while extolling medical apartheid and scapegoating the unvaxxed to fuel their hatred.

  These are humanity’s enemies, not a virus with a 0.1% mortality rate or those brave enough to face it without the help of Big Brother.

  And yet, we should even be thankful for them.

  Because without them as a counter-example, we have no way to gauge our own behavior. We have no mirror to look into and see our own tendencies towards ugliness. Because without that ability to see first hand what it is we do not want to be, we become as lost in our own fugue of self-importance which justifies any amount of violence as they are.

  I don’t hate the Joy Ann Reids and the Jenn Psakis of this world. I celebrate their depravity because without them there can be no opportunity to point out just how insane the world they advocate is.

  Peaking Duck

  Last week I speculated that we had reached Peak Davos. I’m surprised to report that I got a lot less push back from that article than I was expecting.

  Right on cue, the morning after our annual celebration of common decency and reconnection with our deracinated families, we are bombarded with a new variant of COVID to bludgeon us with.

  On the thinnest trading day of the year in the U.S., when most of us are nursing epic carb hangovers while doomscrolling through our Twitter feeds and trolling Amazon for the best deals on a bunch of shit we know in our hearts we don’t need, they trot out the fear porn nuclear barrage.

  The Dow? Down 1119.00 points.

  Oil? Down $9.31 per barrel.

  Bitcoin? Down $5200, nearly 10%

  If you thought you could escape Davos‘ Great Reset, think again. Everything you have will be theirs. Everything you desire — family, home, stability, hope — is subject to their approval. Pay no attention to the timing, the virology, or the logic. Just ab-react in real time to a wholly manufactured farce which if you watched it as a movie after Thanksgiving dinner, you’d shut off for being too contrived.

  Honestly, at this point they really should hire some better writers because this movie sucks worse than Captain Marvel did.

  The ‘Nu’ variant, or NuVID for short, is evolving so fast even its name had to be quickly changed to Omicron to keep us confused. Is it the Nu variant? or Omicron? People will now spend hours of their lives being corrected about what the name of this thing is so midwits can make themselves feel more informed than their mouth-breathing, unvaxxed brethren they still hate.

  We don’t know anything about NuVID than it has evolved multiple new spike proteins and whatever else the gods of virology deign to tell us about it.

  Even though we know next to nothing of either the virulence or transmissibility of NuVID, the first response from the usual suspects is to ramp up talk of further locking down populations all over Europe. The world was beginning to get back to some semblance of normal but now everyone is flapping their wings in panic like my ducks do when the dogs hear a noise in the woods and start barking.

  We’d faced down our worst fears and were beginning to work through the supply chain issues, the backlogs of paperwork, and had adjusted to new workflows and schedules. Those that stood in opposition to the vaccine mandates wouldn’t be budged from their positions anymore and their protests not televised.

  Vaccine distribution centers were shutting down, people were assuming the risk of living, finding sources of ivermectin and HCQ to treat themselves while the Medical Industrial Complex kept trying to get in their way.

  And so our reward for being thankful for mostly feeling like we’d gotten through this terrible ordeal — the hysteria over the virus, not the virus itself — was to be threatened again with more of the same.

  And, again, I am thankful for this. Because this latest round of fear porn is the most obvious, the most over-the-top, the crudest attempt at psychological warfare Davos has engaged in yet.

  That makes it easy to look at and laugh.

  But this doesn’t matter to those in charge. If we laugh at them and their seriousness become even more incensed.

  They could see their bonds slipping and people getting back to normal. They could see the same massive protests around the world outside their seats of power that I’ve seen and knew it was time to play their next, even more desperate card.

  The only thing that I’m even remotely afraid of at this point are the people who still need to believe in all of this.

  And yet, we should still be thankful for the confirmation of our knowing they have been lying to us about all of this the entire time.

  This will be my last attempt to try to get through to the fearful again. Cases aren’t hospitalizations. And hospitalizations aren’t a death sentence. With the mountain of evidence out there that none of the numbers we’ve been given about COVID were ever accurate why do you think we should believe anything about NuVID?

  Trust Should be a Four-Letter Word

  It gets back to that basic building block of civilization itself. Trust.

  Without it the Pilgrims and the Native Americans couldn’t have sat down around the table together. Without it the Pilgrims wouldn’t have even been able to cross the Atlantic in the first place, or hired the boat that brought them there. Without trust that boat would still have been a glint in the eye of the person dreaming of building it, since it was a project far grander than his meager allotment of time on this planet would have been able to complete.

  Davos says it is motivated by a desire to save humanity from itself. It has deemed our civilization unworthy of them and their grand ideas and like angry gods are in the process of wiping it clean from the earth to Build it Back Better, in their image, not ours.

  But that idea cannot become real unless we lend it credence, unless we, like them become consumed with the things we’ve lost and will never have rather than embrace that which is in front of us. Civilization isn’t some esoteric thing that can be conjured up by speaking magic words from a mass communications device.

  Civilization comes from looking another person in the eye, shaking their hand and making an agreement which both sides honor to the best of their ability.

  For a critical mass of people in the West, their trust in the institutions that governed them is gone. It is never coming back.

  And without that trust there can be no going back to the old system where Davos moved pieces on the board and we reacted to them within the rules of the game because we thought the rules reinforced civilization.

  But we know now that too, is a lie. And for that I am eternally thankful to Davos. Because without their Quixotic and, unfortunately, deadly quest to remake humanity so many people would have never woken up to the reality of their existence.

  That’s the reason why I’m more convinced today than before that we’ve reached Peak Davos because today I’m thankful for knowing the community of people ready to take that next first step across the divide and form new bonds of trust which will power the next myths capable of sustaining a better civilization.

  *  *  *

  Join My Patreon if you are still capable of trust

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  Tyler Durden
  Mon, 11/29/2021 – 02:00

• Jim Quinn: Fear Of Our Escalating Power Is Leading Elites To Increasingly Reckless Directives
  Jim Quinn: Fear Of Our Escalating Power Is Leading Elites To Increasingly Reckless Directives

  Authored by Jim Quinn via The Burning Platform blog,

  The Wall Was Too High, As You Can See

  Hey you, out there in the cold
  Getting lonely, getting old
  Can you feel me?
  Hey you, standing in the aisles
  With itchy feet and fading smiles
  Can you feel me?
  Hey you, don’t help them to bury the light
  Don’t give in without a fight

  Pink Floyd – Hey You

  

  I wrote an article in December 2012, a week after the Newtown school shooting, called Hey You. My interpretation of this classic Pink Floyd song was related to how our culture has created generations of alienated and isolated people, allowing Big Pharma to peddle their pharmaceutical concoctions to the masses as the “easy” solution to living “normally” in a profoundly abnormal society. My contention was these mass shootings by young men (Newtown, Columbine, Aurora, Virginia Tech, Tucson) were caused by the Big Pharma psychotropic drugs prescribed to all these young killers by sick industry peddlers (aka physicians).

  The hugely profitable Big Pharma solution to alienation, isolation and depression is drugs that turn a percentage of those afflicted into psychotic killers. The article’s premise was how our techno-narcissistic society, encouraged and enabled by our totalitarian overlords through mind manipulation, drugs, public education indoctrination, and propaganda, has purposely created the alienation, isolation, and hopelessness to further their goals of power, control, and wealth.

  When it comes to dystopian literature, there is always a clash between Huxley’s softer totalitarianism versus Orwell’s boot on your face tyranny when assessing how our governments enforce their dictates upon their subjects. The Wall certainly has an Orwellian bent, as it explores the issues of abandonment, isolation, alienation, authoritarianism, the brutality of war, a tyrannical conformist educational system, and the walls individuals and society build to protect themselves from having to confront reality and deal with the consequences of their actions.

  Once alienated from society, having built a wall between yourself and the outside world, attempting to reengage with society can be almost impossible, as the wall becomes too high, and no one can hear your pleas. Sometimes, there is no escape.

  

  The opening lyrics are haunting to me. I have felt like I’ve been out in the cold since the outset of this pandemic of herd madness in March 2020. I’ve gotten older and feel older. While family, friends, and coworkers have been drawn into this vortex of falsity, I feel like I am standing alone behind walls constructed by the government, the media, and society in general. It’s lonely when you chose to make a stand against the lies being peddled 24/7 by corrupt politicians, fake news pundits, faux medical “experts” bought off by Big Pharma, mega-corporations, and Hollywood propagandists playing their parts. These demonic forces have tried to bury the light of truth under an avalanche of lies.

  I’m unsure of their true purpose, but I am sure it will not be beneficial to me, my family or the honest hard-working people trying to survive this dystopian nightmare. Most days it feels like the evil forces arrayed against me and other lovers of liberty and freedom have the upper hand and cannot be defeated. I do feel isolated and alienated from the majority, as they have been psychologically manipulated to obey their masters, as their double vaccine dose, now requires a booster after six months, and will require annual boosters for eternity. They will unquestioningly submit, without ever using their critical thinking skills to grasp these are not real vaccines and do not work. I will not give in to their mass psychosis.

  

  Since I was relating the song to the Big Pharma drug induced mass shootings, my 2012 article gravitated towards Huxley’s view of totalitarianism, as he believed our overlords would use pharmaceuticals, conditioning, and mind control to achieve their evil means.

  “A really efficient totalitarian state would be one in which the all-powerful executive of political bosses and their army of managers control a population of slaves who do not have to be coerced, because they love their servitude.” – Aldous Huxley – Brave New World

  

  “And always, everywhere, there would be the yelling or quietly authoritative hypnotists; and in the train of the ruling suggestion givers, always everywhere, the tribes of buffoons and hucksters, the professional liars, the purveyors of entertaining irrelevances. Conditioned from the cradle, unceasingly distracted, mesmerized systematically, their uniformed victims would go on obediently marching and countermarching, go on, always and everywhere, killing and dying with the perfect docility of trained poodles.” –  Aldous Huxley

  My dire view of our future was just as grim nine years ago as it is today. My belief was the alienation and isolation created by our sprawling, automobile dependent, technology obsessed, government controlled, debt financed society had spread like a cancerous tumor, slowly killing our country. As with most of my early articles I gravitated towards our dire fiscal situation and how it was surely unsustainable. My example was:

  Since 1979, Total Credit Market Debt in the United States has risen from $4.3 trillion to $55.3 trillion, a 1,286% increase in 33 years.

  It had gone up $51 trillion in 33 years. Well guess what? It now stands at $85 trillion, up another $30 trillion in 9 years, with no deceleration in sight. Since I wrote that 2012 article, the national debt went from $16 trillion to $29 trillion (up 81%), GDP went from $16 trillion to $23 trillion (up 44%), the Dow went from 13,000 to 36,000 (up 177%), and consumer debt went from $2.9 trillion to $4.4 trillion (up 52%).

  As usual, the plebs went further into debt, while their overlords saw their trillions in stock holdings almost triple in nine years. I thought the debt growth was unsustainable, but the Fed said hold my beer. Their debt creation orgy accelerates by the minute, with real inflation (as opposed to the fake BLS bullshit) running in excess of 10% hitting average Americans, while the Wall Street oligarchs get richer by the second. Even using the BLS bullshit inflation figures, the USD has lost 17% of its purchasing power since 2012, again screwing the little guy.

  

  The USD has lost 96.4% of its purchasing power since the creation of the Federal Reserve in 1913. So much for meeting their “mandate” of stable prices. Do you get it yet? The Fed’s job is to enrich their owners (bankers & billionaire oligarchs) while enslaving you in debt and making sure your meager wages buy less and less each year. This is where the “You Will Own Nothing and Be Happy” slogan begins to make sense.

  The Build Back Better slogan, created by Schwab and his Davos co-conspirators, really refers to building a better wall around the plebs so they remain isolated, alienated and under control. Roger Waters has explained the song Hey You was also an exhortation to make connections with people, help each other, and overcome the alienation and isolation created by those pulling the strings of our societal dystopia.

  

  When I heard the song on the radio the other day, my take on the lyrics is now colored by the last two years of this engineered, weaponized, marketed Covid pandemic. The alienation and isolation have not been a choice of individuals, but a mandate from our authoritarian overlords. The wall is being built by those who want to destroy our existing structural paradigm and replace it with something they consider better, but which will be far worse for liberty and freedom minded individuals.

  A more Orwellian dystopia is being ushered in by Soros, Gates, Schwab and their chief lieutenants Biden, Pelosi, Fauci, Powell, along with the other highly paid apparatchiks in government, media, medical industrial complex, and military industrial complex.

  We were already in the death throes of the most dysfunctional, decadent, delusional, debt engendered era in the long history of mankind. Their debt saturated “solutions” from 2008 through 2019 reflected an air of desperation. Those in power realized their stranglehold on the narrative was slipping away and were in danger of seeing a sudden decline in their wealth and control over the masses.

  Rather than accept their slightly less profitable fate like normal human beings, these psychopaths have doubled down by using a relatively non-serious flu for anyone under 85 years old and not morbidly obese, to try and implement a new world order, where they continue to reap all the benefits and the masses incur the pain, suffering and death. The diabolical aspects of this evil undertaking are almost too outrageous to believe. They have redoubled their propaganda endeavors in order to convince the ignorant masses to willingly love their servitude.

  

  But it was only fantasy
  The wall was too high
  As you can see
  No matter how he tried
  He could not break free
  And the worms ate into his brain

  Pink Floyd – Hey You

  In today’s circumstances those lyrics reflect this fantasy/nightmare of Covid being used as the justification to destroy our economic system, drive hundreds of thousands of small businesses into bankruptcy, locking people in their homes for months, mandating useless masks as a dehumanization and fear tactic, mandating the injection of an experimental gene therapy into our bodies as a requirement to make a living, and using a bottomless supply of lies and media propaganda to convince an already dumbed down populace to beg for increased levels of servitude to those who haven’t been right about one thing since this scamdemic was launched.

  As others have noted, this hasn’t been a pandemic, it’s been an IQ test. And as a society we’ve scored low enough to be put on the short bus to the school for the slow-witted. The global oligarchs began constructing our wall, but millions of willing collaborator Karens and Todds are gleefully adding bricks to that wall.

  

  I’ve been flabbergasted since the outset of this propagandized and highly marketed fearfest, over a strain of the annual flu, by the lack of critical thinking skills exhibited by average Americans and their inability to understand simple mathematical risk calculations when they are told blatant lies by the likes of Fauci, Walensky and a plethora of Big Pharma bribed “medical experts” paraded on the boob tube every day. They have let feelings, emotions, and false narratives guide their actions, rather than facts, data, and scientific proof.

  Everyone has the freedom to verify what they are being told and calculate for themselves the 99.7% overall survival rate and 99.999995% survival rate for those under 25 years old. But they have been psychologically compelled to not question the State or embrace their Constitutional freedom to dissent and not comply. They unquestioningly inject their children with these drugs when unequivocal evidence shows a much higher risk from the jab than from Covid. Huxley realized decades ago a weak-minded populace could be easily manipulated. We have now reached peak complicity, compliance and cowering to the national State and those pulling the strings of our government.

  

  “This concern with the basic condition of freedom — the absence of physical constraint — is unquestionably necessary but is not all that is necessary. It is perfectly possible for a man to be out of prison and yet not free — to be under no physical constraint and yet to be a psychological captive, compelled to think, feel and act as the representatives of the national State, or of some private interest within the nation, want him to think, feel and act.” –  Aldous Huxley

  

  Huxley was not a big fan of technological “progress” as he just saw it as a more efficient means of going backwards. Those who believe technology is the answer to all of our problems are either insanely myopic or profiting from this fallacy. Technology has certainly contributed to allowing corporations to generate profits through efficiencies, marketing, logistics, and replacing human beings with computers and robots.

  Technology has also made it very efficient for the State to utilize propaganda, fear, and social indoctrination through electronic media to control the population and manipulate the narrative to suit their diabolic purposes. For the few who dissent from their commands, technology is used to sensor, de-platform, restrain, monitor, and destroy their lives, if necessary.

  

  Modern technology has a dual purpose, as an entertainment aphrodisiac, and an electronic boot stomping on your face forever. They want you distracted, amused, and consumed by trivialities, while they execute their wealth pillaging scheme and slowly build a technological wall which grows ever higher and impossible to escape. Consumption, diversion, and obedience is all they asked.

  Societal stability, in the eyes of the sociopath unseen rulers behind the curtain, is based upon state designed happiness, social indoctrination disguised as public education, endless war, fear-based propaganda, and the use of pharmaceuticals to alleviate dissent and wrong thinking. Normalcy, traditional families, community standards, hard work, thrift, self-responsibility, neighborly connections, faith, and self-governing are all antithetical to the societal breakdown required to implement the Great Reset. Therefore, these values are banned in the world we inhabit today.

  

  The best laid plans of the ruling class began to go awry in late 2019, as the gears of the financial system began to grind and fracture. The never-ending Trump coup was floundering under the weight of lies. Their wealth, power, and control were going to take a major hit. So, they decided to pull it. They had laid the groundwork for decades, creating generations trained to value material possessions, require instant gratification, shun critical thinking, let feelings guide their actions, believe debt acquired possessions constituted wealth, trust politicians are working in their best interests, and do whatever those deemed “experts” by the corporate media tell them to do.

  They have created tens of millions of mentally ill sheep who only appear normal because they fit in to this profoundly abnormal society, where they forfeited the thinking and decision making for their lives to people like Gates, Soros, Biden, Fauci and Zuckerberg, who despise them. Because of their government created neurosis and cowardly compliance, we are all victims, and the wall we must scale to escape gets higher by the day.

  

  “The real hopeless victims of mental illness are to be found among those who appear to be most normal. Many of them are normal because they are so well adjusted to our mode of existence, because their human voice has been silenced so early in their lives that they do not even struggle or suffer or develop symptoms as the neurotic does. They are normal not in what may be called the absolute sense of the word; they are normal only in relation to a profoundly abnormal society. Their perfect adjustment to that abnormal society is a measure of their mental sickness. These millions of abnormally normal people, living without fuss in a society to which, if they were fully human beings, they ought not to be adjusted.” –  Aldous Huxley

  

  The walls erected within Roger Waters’ lyrics were figurative, referring to the isolation and alienation from society chosen by an individual (himself). My interpretation, based on what myself and many others are experiencing today, is more literal, with the isolation and alienation being created by government and their mentally ill, willfully ignorant advocates of lockdowns, masking, jabs, mandates, passports, quarantine camps, and coercion to command compliance.

  This entire pandemic scheme has been designed as a divide and conquer undertaking, with the purpose of implementing their Great Reset plan to own everything while the plebs own nothing and happily do as they are told. For those of us not willing to go along with their plan, they have alternate arrangements in store. We are in the midst of this struggle for the future of our country and the world.

  

  The Party has told you to reject unequivocal facts during this entire engineered psychological operation. They convinced the vast majority of the population to be terrorized by a virus with a 99.7% survival rate that only kills the very old and the very obese. They said it didn’t come from the Wuhan lab and wasn’t funded by Fauci. They convinced the masses masks worked when they knew they didn’t.

  They said a fifteen-day lockdown would slow the spread and end the pandemic. They said their vaccines would immunize you from catching Covid before they changed the definition of vaccines and told you it was always supposed to just reduce the symptoms. They have convinced a couple hundred million people to participate in an experiment as guinea pigs for an unproven untested gene therapy.

  

  They continue to proclaim vaccines work, even though they don’t, and of course get your booster, also because they don’t work. They refuse to acknowledge natural immunity to be far more effective and long-lasting than their jabs. No money to be made from natural immunity. They have censored and de-platformed anyone who showed proof ivermectin and hydroxychloroquine worked better than the vaccines.

  No money in subscribing either safe and effective treatment. They deny the vaccines have caused millions of adverse reactions and tens of thousands of deaths. They have instructed you to reject all of this evidence of their deceit and demonic designs to abscond with your wealth, freedoms, and liberties.

  

  As we enter Biden’s dark winter, you can sense the desperation of the Party/Deep State/Oligarchy as they employ more coercive and destructive tactics to force the non-compliant to obey and do as they are told. They are attempting to isolate and alienate those who refuse to submit to their clearly unlawful vaccine mandates by excluding them from society and threatening their livelihoods.

  The threats and intimidation have succeeded with a significant portion of the holdouts, but tens of millions are refusing to bend the knee. Many feel alone in their resistance to these totalitarian measures, as those in control of the narrative have painted a picture of only a small minority of conspiracy theorists rejecting their Great Reset authoritarian blueprint. The wall seems too high for many.

  

  The truth be told, their blueprint is growing stale, as they desperately attempt to strike fear into the masses with their latest variant of the month. The truth is they fear our opposition. They fear we will inspire more people to resist. They fear we will band together. They fear the truth, which is the backbone for our resistance. They fear we are heavily armed. They fear us realizing we are actually the majority. They fear they are starting to lose.

  Their fear of our escalating power is leading them to make increasingly reckless and drastic pronouncements and demands. The push back to their directives is gaining in intensity. They believe they can make the wall high enough to deter those who could foil their Great Reset scheme. The odds are in their favor because they control the politicians, media, corporations, and the minds of the indoctrinated sheep, but don’t tell me there’s no hope at all. We have truth, the Constitution, the 2nd Amendment, and millions of liberty-minded truculent partisans who will not bend to their will. We have no choice but to fight, using any means at our disposal. We realize we must stand together, because divided we will fall.

  

  Hey you, out there on the road

  Always doing what you’re told

  Can you help me?

  Hey you, out there beyond the wall

  Breaking bottles in the hall

  Can you help me?

  Hey you, don’t tell me there’s no hope at all

  Together we stand, divided we fall

  Pink Floyd – Hey You

  *  *  *

  The corrupt establishment will do anything to suppress sites like the Burning Platform from revealing the truth. The corporate media does this by demonetizing sites like mine by blackballing the site from advertising revenue. If you get value from this site, please keep it running with a donation.

  Tyler Durden
  Sun, 11/28/2021 – 23:30

• Chinese Spy Ship Stayed 3 Weeks Off Australia's Coast, Observing Military Bases
  Chinese Spy Ship Stayed 3 Weeks Off Australia’s Coast, Observing Military Bases

  On Friday Australia’s Defense Minister Peter Dutton called out China for its disconnect between presenting itself as committed to peace versus the reality. “We’re all familiar with the frequent claims of the Chinese government that it is committed to peace, cooperation and development,” Dutton began in a speech in Canberra.

  “And yet we bear witness to a significant disconnect between the words and the actions. We’ve watched very closely as the Chinese government has engaged in increasingly alarming activities,” he added. Just prior to his remarks the Aussie government revealed this weekend that a Chinese spy ship was recently observed spying along the Australian coast line, where it stayed for three weeks.

  

  “The Yuhengxing spy ship is understood to have entered Australia’s 200km exclusive economic zone near Darwin in August and September,” Seven News Australia reported. “It then sailed south as far as Sydney, passing a number of important military areas, before heading across the Tasman Sea to New Zealand.”

  The federal government said that the Ministry of Home Affairs “closely monitored” the ship, with a top official saying, “I can certainly confirm that there was a Chinese military vessel operating off the east coast of Australia that had transited through the Torres Strait.”

  While it past the aforementioned notably military bases, the spy vessel was not reported to have breached Australia’s territorial waters, defined as within 12 nautical miles of the coast. Regardless amid tit-for-tat warnings between the two large Pacific power in the wake of the AUKUS nuclear submarine deal with the United States, the spy ship incident has only added to already soaring tensions.

  In response to Dutton’s aggressive Friday remarks directed toward leaders in Beijing, the Chinese embassy in Canberra issued a statement denouncing his remarks, saying his distorted view of China’s intentions and policies “fanning conflict and division between peoples and nations” – especially by misleading his own people. 

  Chinese spy ships, and powerful warships & submarines, are going to be a regular presence off Australia’s coast as #China’s navy rapidly grows and matures. Yet @ScottMorrison is happy to wait until 2040 before Australia gets any new subs! #snafu #auspol https://t.co/9fxB9IzX3J

  — Rex Patrick (@Senator_Patrick) November 25, 2021

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

  “It is inconceivable that China-Australia relationship will take on a good momentum … if the Australian government bases its national strategy on such visionless analysis and outdated mentality,” the embassy added said in the statement.

  Meanwhile it’s expected that China will only send more vessels to regularly observe Australia’s defenses, particularly after Beijing officials have interpreted the AUKUS deal as signaling the country is effectively abandoning its status as a nuclear-free zone. 

  Tyler Durden
  Sun, 11/28/2021 – 23:00

• US Refuses To Engage With Marshall Islands On Nuke Damage
  US Refuses To Engage With Marshall Islands On Nuke Damage

  Authored by Dave DeCamp via AntiWar.com,

  The US is refusing to engage with the Marshall Islands on compensation for environmental and health damage caused by the dozens of US nuclear weapons tests carried out in the 1940s and 50s, The Associated Press reported Thursday.

  The Marshall Islands are home to a major US military base and are essentially treated as a US territory under an agreement known as the Compact of Free Association. But the agreement is due to expire soon, and the dispute over the nuclear weapons test has some members of Congress concerned.

  

  The US lawmakers are not worried that the people of the Marshall Islands haven’t been properly compensated. Instead, they fear China could move in. “China is all too ready to step in and provide the desperately needed infrastructure and climate resiliency investment that is sought by these long-time partners,” 10 Democratic and Republican House members wrote in a letter to National Security Advisor Jake Sullivan.

  In the 1980s, the US agreed to give the Marshall Islands a $150 million settlement, but this amount fell well short of what is needed to clean up all of the radioactive debris. “Everyone knows the negotiations at that time were not fair or equitable,” Marshallese Senator David Paul told AP. “When you look at the total cost of property damage and the ongoing health issues to date, it’s a drop in the bucket. It’s an insult.”

  A US officials admitted to AP that Washington had “stonewalled” talks on the US’s nuclear legacy. “We know that’s important, but there is a full and final settlement, and both sides agreed to it. So, that issue is just not subject to being reopened,” the official said.

  AP also spoke with James Matayoshi, the mayor of Rongelap Atoll on the Marshall Islands. Like hundreds of other Marshallese, Matayoshi had been displaced from his native atoll by the nuclear weapons tests and hasn’t returned. His late mother was pregnant at the time of one of the blasts and gave birth to a stillborn baby due to radiation exposure.

  

  Concerning China, Matayoshi said officials are seeking Asian investments, and any such deals wouldn’t be about Chinese influence.

  “It would be a business transaction. We don’t advocate for war or any superpower influence. But we want to be able to live in our backyard, and enjoy life here,” he said.

  Tyler Durden
  Sun, 11/28/2021 – 22:30

• Canada's Indigenous Health Expert Fired After Pulling Liz Warren Pocahontas Act
  Canada’s Indigenous Health Expert Fired After Pulling Liz Warren Pocahontas Act

  Canada’s top expert on indigenous health issues has been fired from her job and lost her professorship after suspicious colleagues revealed that her claims of Native American heritage were complete bullshit.

  

  Public health expert Carrie Bourassa, a total fraud, was the scientific director of the Canadian Institutes of Health Research’s Institute of Indigenous Peoples’ Health, She was suspended on Nov. 1, just five days after the CBC revealed the truth.

  With a feather in her hand and a bright blue shawl and Métis sash draped over her shoulders, Carrie Bourassa made her entrance to deliver a TEDx Talk at the University of Saskatchewan in Saskatoon in September 2019, where she detailed her personal rags-to-riches story.

  “My name is Morning Star Bear,” she said, choking up. “I’m just going to say it — I’m emotional.”

  The crowd applauded and cheered.

  “I’m Bear Clan. I’m Anishinaabe Métis from Treaty Four Territory,” Bourassa said, explaining that she grew up in Regina’s inner city in a dysfunctional family surrounded by addiction, violence and racism. -CBC

  It was all a lie.

  After a lengthy trace of Bourassa’s family tree, it was uncovered that her ancestors were in fact Polish, Russian and Czech immigrant farmers, not Métis nation natives.

  “It makes you feel a bit sick,” said Métis expert Janet Smylie at the University of Toronto, who worked with Bourassa on a book covering indigenous parenting. “To have an impostor who is speaking on behalf of Métis and indigenous people to the country about literally what it means to be Métis … that’s very disturbing and upsetting and harmful.”

  Colleagues grew suspicious after Bourassa began claiming she had Anishinaabe and Tlingit blood, and began dressing up like a stereotypical Native American – starting with a 2019 appearance in full tribal regalia to give a TEDx Talk at the University of Saskatchewan in Saskatoon.

  “When I saw that TEDx, to be quite honest, I was repulsed by how hard she was working to pass herself off as indigenous,” said associate professor of Indigenous studies, Winona Wheeler, a documented member of Manitoba’s Fisher River Cree Nation – who started digging into Bourassa’s heritage before taking her findings to the media.

  After she was confronted with the evidence, Bourassa changed her story – now claiming she had been adopted into the Métis community by an unnamed friend of her deceased grandfather.

  “Even though Clifford passed, those bonds are even deeper than death because the family has taken me as if I was their blood family” she said, adding “In turn, I serve the Métis community to the best of my ability.”

  If only she was a sitting US Democratic Senator!

  

   

  Tyler Durden
  Sun, 11/28/2021 – 22:00

• Why Crime Is Out Of Control In San Francisco
  Why Crime Is Out Of Control In San Francisco

  Authored by Michael Shellenberger via Substack,

  San Franciscans get what they voted for with Chesa Boudin…

  

  When Chesa Boudin ran for San Francisco district attorney in 2019, he said crime was caused by poverty, wealth inequality and inadequate government spending on social programs. He called prostitution, open drug use and drug dealing “victimless crimes” and promised not to prosecute them. The result has been an increase in crime so sharp that San Francisco’s liberal residents are now paying for private security guards, taking self-defense classes, and supporting a recall of Mr. Boudin, with a vote set for June 2022. Retailers like Walgreens and Target are closing stores in the city, citing rampant shoplifting. Last week, a shockingly organized mob of looters ransacked a downtown Louis Vuitton store.

  Mr. Boudin and his defenders say crime in San Francisco has actually declined under his watch. The store closings had little to do with shoplifting, they insist; Walgreens announced in 2019 it would close stores as a cost-saving measure. And after the Louis Vuitton looting, Mr. Boudin talked tough on Twitter : “Standby for felony charges. Indeed, some crimes did decline, but for Covid-related reasons, while many other offenses increased. The pandemic crimped tourism, which meant fewer car break-ins and less shoplifting, but both are now on the rise. Car break-ins were 75% higher in May 2021 than in 2019, before the pandemic.

  While it’s true that official incidents of shoplifting haven’t increased under Mr. Boudin, the punishment has changed—and the bad guys appear to have gotten the message. In 2019, 40% of all shoplifting reports resulted in arrest; in 2021, under Mr. Boudin, only 19% did. Walgreens says shoplifting is five times as high, and security costs 50 times as high, in its San Francisco stores as the chainwide average.

  Why Crime Is Rising in San Francisco: A Video Explainerpic.twitter.com/Tc6TW4Eq9j

  — Michael Shellenberger (@ShellenbergerMD) November 28, 2021

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

  Meantime, the charging rate for theft by Mr. Boudin’s office declined from 62% in 2019 to 46% in 2021; for petty theft it fell from 58% to 35%. San Francisco’s jail population has plummeted to 766 in 2021 from 2,850 in 2019. More than half of all offenders, and three-quarters of the most violent ones, who are released from jail before trial commit new crimes.

  Like other progressive prosecutors around the country, Mr. Boudin has expressed great antipathy toward the police. At his election-night party, a supporter led the crowd in a chant against the Police Officers’ Association: “F— the POA! F— the POA!” The San Francisco Police Department is short 400 officers and demoralized. A security video obtained by the San Francisco Chronicle last week appeared to show officers allowing a robbery of a marijuana dispensary. Total narcotics arrests declined by half from 2019 to 2021.

  Mr. Boudin has increased charges for some crimes. The charging rate for rape rose from 43% to 53%, and for narcotics dealing from 47% to 60%, even as it declined for theft, illegal weapons and assault. He appears to be following through on his promise to ignore quality-of-life crimes, but it’s also the case that the state has ordered local prosecutors to reduce prosecution of such crimes because of Covid.

  The solution to San Francisco’s problems is relatively straightforward. The city needs to shut down the drug scene by working with the federal government to deport dealers who are here illegally, most of whom are from Honduras; arrest addicts who camp and use drugs publicly and offer them rehab as an alternative to jail; and redevelop the squalid Tenderloin neighborhood, which, because of the influx of out-of-town addicts, fosters depravity and criminality affecting the entire city.

  The situation has degenerated to the point that an opportunity exists for moderates to wrest power away from progressives like Mr. Boudin and implement a sweeping, common-sense political agenda. What’s not clear is whether most San Franciscans want to do this, or could do it alone, without the involvement of California’s state government, which is sitting on a $31 billion budget surplus.

  San Francisco is an uberliberal place, and Mr. Boudin is only the latest in a long line of progressive prosecutors. In the mid-1990s voters elected Terence Hallinan, who had a history of illegal drug use and promised to stop arrests of street addicts and prostitutes. When Mr. Boudin blamed crime on inequality in 2019, his message landed on sympathetic ears. When he said he wouldn’t prosecute victimless crimes, he was singing a familiar hymn.

  It may be that Mr. Boudin went too far, even for San Francisco’s progressive voters, with his statements justifying crime and demonizing the police. But if history is any guide, they won’t have learned anything more from the experiment in lawlessness than they did from the one in the mid-1990s, and will almost certainly repeat it.

  *  *  *

  Michael Shellenberger is a Time Magazine “Hero of the Environment,”Green Book Award winner, and the founder and president of Environmental Progress. He is author of just launched book San Fransicko (Harper Collins) and the best-selling book, Apocalypse Never (Harper Collins June 30, 2020). Subscribe To Michael’s substack here

  Tyler Durden
  Sun, 11/28/2021 – 21:30

• Jussie Smollett Criminal Trial Begins Monday For Alleged Hate-Crime Hoax
  Jussie Smollett Criminal Trial Begins Monday For Alleged Hate-Crime Hoax

  The criminal trial of former actor Jussie Smollett on charges that he staged a hate crime against himself is set to begin in Monday, after three years of delays into how the Chicago District Attorney handled the case.

  

  He has been charged with six counts of disorderly conduct for making false reports to the police.

  Smollett claimed that he was attacked on January 29, 2019 around 2 a.m. by two white men who shouted racist and homophobic slurs, doused him in a bleach-like liquid, hung a rope around his neck, and yelled “This is MAGA country,” before he was able to beat them off. He was seen on security footage entering his upscale apartment with an intact Subway sandwich and a noose around his neck (which he was still wearing when police arrived).

  While there was no footage of the “attack” despite Chicago’s thousands of surveillance cameras, two “persons of interest” were captured on camera who turned out to be Nigerian-born brothers Abimbola “Abel” and Olabinjo “Ola” Osundairo, one of whom was Jussie’s personal trainer and was an extra on Empire. 

  

  After Chicago police arrested the brothers as “potential suspects,” they were later released without charges – and investigators say their interview “shifted the trajectory of the investigation.”

  Dave Chappelle provides a recap of what went down:

  At the time, then-Senator Kamala Harris called it a “modern day lynching” (just one month after she coincidentally supported an anti-lynching bill):

  .@JussieSmollett is one of the kindest, most gentle human beings I know. I’m praying for his quick recovery.

  This was an attempted modern day lynching. No one should have to fear for their life because of their sexuality or color of their skin. We must confront this hate.

  — Kamala Harris (@KamalaHarris) January 29, 2019

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

  Rep. Alexandria Ocasio-Cortez called it a “racist and homophobic attack.”

  There is no such thing as “racially charged.”

  This attack was not “possibly” homophobic. It was a racist and homophobic attack.

  If you don’t like what is happening to our country, then work to change it. It is no one’s job to water down or sugar-coat the rise of hate crimes. https://t.co/QAi0IYtSeR

  — Alexandria Ocasio-Cortez (@AOC) January 30, 2019

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

  More:

  

  As the Wall Street Journal notes, the trial has been delayed several times due to events “including having the charges dropped and refiled and an investigation into how Cook County State’s Attorney Kim Foxx handled the investigation. The Covid-19 pandemic added to the delays. A court official said the trial will begin with jury selection and could be completed within days.”

  Tyler Durden
  Sun, 11/28/2021 – 21:00

• He "Should Pay For His Crimes": ASU Students Demand Expulsion Of Kyle Rittenhouse
  He “Should Pay For His Crimes”: ASU Students Demand Expulsion Of Kyle Rittenhouse

  Authored by Jonathan Turley,

  President Joe Biden and media figures are not the only persons who are “angry” after a jury acquitted Kyle Rittenhouse on all charges. Despite a jury with the same racial makeup convicting the defendants in Georgia in the Arbery case, many have denounced the entire legal system as racist.

  It does that matter that there was evidence supporting Rittenhouse’s claim of self-defense that was largely missing from prior coverage of the case. Now students and groups at Arizona State University are planning a rally and demanding that Rittenhouse be expelled. With leaders like President Biden calling Rittenhouse a “white supremacist” before any investigation was completed and legal analysts calling the entire trial “white supremacy on steroids,” there is a sense of legitimacy in demanding such extrajudicial punishments.

  

  Students groups like MEChA (Movimiento Estudiantil Chicanx de Aztlán), Students for Socialism, Students for Justice in Palestine and the Multicultural Solidarity Coalition are organizing a rally this week to “get murderer Kyle Rittenhouse off [the] campus.” 

  He is not on campus since he is enrolled as an online student.

  However, Rittenhouse has expressed interest in in-person attendance at ASU. Students and faculty are being called to the rally to “protect students from a violent, blood-thirsty murderer.”

  

  In addition, ASU student Taskina Bhuiya started a Change.org petition to denounce the verdict and to call for Rittenhouse to be “held accountable for the crimes he has committed.” Without a sense of irony, the petition declares “ASU should be a safe and inclusive place for all students, which will be disrupted if Kyle Rittenhouse is allowed to attend this school.” Inclusive unless you are an acquitted individual who must be “held accountable.” Hundreds have signed the petition insisting that “Rittenhouse should pay for his crimes.”

  The campaign reflects a growing sense that the legal system is only worthy of respect (or even protection) if it rules in the way that we demand. It is the same mentality that has led members of Congress, law professors, and others to demand the expansion or restriction of the Supreme Court because it now has a conservative majority. Liberal justices like the late Justice Ruth Bader Ginsburg and Justice Stephen Breyer has opposed such efforts as inimical to the rule of law.

  We saw a similar campaign to block Nick Sandmann from attending Transylvania University. Various media outfits correctly false coverage of Sandmann, who was wrongly accused of racist attacks on a Native American activist. Various media companies settled with him and he is still in litigation with others. Yet, figures from an ACLU officer to a professor raised the alarm over his attending college and appearing on campus.

  The fact is that Rittenhouse cannot be expelled or kept off campus due to such mob measures. He would quickly prevail in court. However, the rally and the rhetoric magnify the risk to his safety by those who demand “accountability” regardless of any verdict.

  It will be interesting to see how many faculty step forward to defend his right to attend the college despite any misgivings over his case. Conversely, we have seen faculty members join such mob efforts, even attacking others on campus, blocking speakers, destroying political signs, or encouraging attacks on student journalists.  University of Rhode Island professor Erik Loomis defended the murder of a conservative protester and said that he saw “nothing wrong” with such acts of violence. Other faculty members have made similarly disturbing comments “detonating white people,” denouncing police, calling for Republicans to suffer,  strangling police officers, celebrating the death of conservatives, calling for the killing of Trump supporters, supporting the murder of conservative protesters and other outrageous statements. It is less common to hear professors today speak out for the rights of conservatives or others who are being targeted by campaigns on campus. The risk is simply too great that they will be “tagged” as intolerant, racist, or reactionary.

  Rittenhouse has every right to attend ASU in person and has every right to expect that he can do so safely. If ASU cannot muster the integrity and courage to reaffirm those rights publicly, it has abandoned a core defining element for higher education. Colleges often sit in cringing silence as individual students are targeted and harassed. Students have every right to protest, but ASU must be clear and public in supporting Rittenhouse’s right to access to an education on its campuses.

  Tyler Durden
  Sun, 11/28/2021 – 20:30

• Beijing Capitulates: Urges Local Govts To Unleash Debt Flood As Cities Begin Backstopping Property Developers
  Beijing Capitulates: Urges Local Govts To Unleash Debt Flood As Cities Begin Backstopping Property Developers

  Despite the best efforts by South African doctors to temper the panic sparked by the emergence of the Omicron strain, it appears that western politicians and their media and “science” lackeys won’t let go so fast, and one of the potential casualties is China, which will either be forced to engage in more lockdowns, depressing the economy, or find itself engaged in far less trade with a world that is about to undergo another wave of restrictions.

  All this, of course, is happening as the recent deep freeze of China’s property market – the largest asses in the world according to Goldman Sachs…

  

  … and sparked by the repeated near-death experiences of Evergrande – has unleashed a bone-crushing shockwave across China’s economy, which takes place as Beijing continues to maintain its deleveraging stance amid Xi’s “shared prosperity” drive, which has meant far less nearly created credit is available to mask the current weakness in the economy.

  And yet, cracks are finally starting to show in Beijing’s deleveraging resolve and last week China’s State Council called on local governments to sell more special bonds this year in order to boost investment amid a slowdown in the economy.

  According to Bloomberg, Premier Li Keqiang chaired a meeting of the State Council (i.e., China’s cabinet) on Wednesday, urging local governments to have more ongoing construction of projects at the beginning of next year, the official Xinhua News Agency reported. And since they need money to fund these projects, the meeting also called on them to make better use of proceeds from special bonds to expand domestic demand.

  Said otherwise, China is once again quietly restarting the re-leveraging process, only this time instead of consumer loans, corporate bonds, or shadow debt (in the form of trusts), Beijing is targeting local government special debt issuance as the focal point of the next debt bubble.

  

  Xinhua confirmed as much, reporting that “regional governments should step up project preparation, facilitate the launch of projects that are mature, and make reasonable requests for special bond quotas next year.” And to assist this upcoming debt burst, “the authorities will study the possibility of granting some bond quotas in advance of next year, according to the report, as they did in the recent two years.”

  Meanwhile, echoing what he said at the start of the month, premier Li reiterated the economy is facing “new downward pressure” and cross-cyclical policy needs to be strengthened. This comes as economists have pared back their growth forecasts for the fourth quarter to a median of just 3.1%, while some say the economy’s pace next year could be slowest since 1990 (excluding last year’s pandemic impact), as low as 5% or even less according to some skeptics.

  Alas, there is an unexpected problem with Beijing’s plan: lack of demand for the debt. As Bloomberg notes, sales of local government special bonds have been particularly slow in the first ten months of this year, partly due to a lack of quality projects. Previously, the Ministry of Finance urged local authorities to finish issuing all the bonds within this year’s quota by November. Alas, the collapse in Evergrande, and the broader property market has taken all the wind out of China’s construction sails in 2021.

  Needless to say Beijing had to spin this unpleasant outcome, and instead the State Council meeting said that the Local governments have achieved positive results in managing debt and reducing so-called hidden debt in recent years, with the government’s overall debt-to-gross domestic product ratio trending lower.

  And while the meeting added that authorities need to step up auditing and monitoring of proceeds raised from the bond sales, China Securities Journal reported on Thursday that fiscal policy will play a bigger role in ensuring the economy has a stable start in 2022. And where will funding for said “fiscal policy” stimulus come from? Well, as Citic Securities economist Zhu Jianfeng said, while local governments’ income from land sales might fall, they should issue more special bonds to help fund investment projects.

  Then on Wednesday, the Securities Times reported that according to another Citi analyst, Cheng Qiang, regional government may issue more than 4 trillion yuan ($630 billion) worth of special bonds next year, up from the 3.65 trillion yuan budgeted for this year. Expect the final number to be much higher, especially if Omicron is indeed as dangerous as Fauci & Co. are trying to make it seem.

  Finally, a look at the latest Chinese property regulatory actions compiled by Goldman shows that over the past few weeks there have been incrementally more marginal loosening efforts at different city levels, especially in terms of mortgage rate easing and presales permit requirement/deposit withdrawal relaxation. Said otherwise, while China is not yet panicking it realizes that the deleveraging campaign is now effectively finished, and so expect much more debt creation in China next year.

  

  In short, China is about to restart its debt machine, and while all Chinese debt is of course fungible – since the state owns and controls all – this time around it will be the “local government” silo that will serve the the global growth dynamo for the coming year.

  Meanwhile, as China targets property stabilization at the macro level via local government bond sales, it is also expanding its “micro” focus and also last week, a Chinese city rolled out a series of easing measures to boost liquidity at property developers, becoming the first major local government to address a cash crunch engulfing the real estate industry.

  Chengdu, the capital of the southwestern province of Sichuan with a population of about 21 million, will accelerate approvals for home sales and property loans as well as ease restrictions on using proceeds from pre-sales, according to a statement posted by the local housing authority last week, Bloomberg reported.

  “Chengdu is the first city authority to call for faster property-related loans in a clear official statement,” said Yan Yuejin, research director at Shanghai-based E-house China Research and Development Institute. “We may see other initiatives to press banks on faster mortgages soon.”

  The capitulation by Chengdu comes as new-home values in the city dropped 0.6% in October from a month earlier, the biggest slump in four and a half years.

  

  Here are some of Chengdu’s key measures allowing developers to boost cash:

  • The housing authority vowed to shorten the time for compulsory pre-sales procedures by at least a third
  • Developers will be able to use proceeds from pre-sales if they meet certain construction progress
  • Chengdu will work with financial institutions to increase credit quotas for developers and accelerate loan approvals
  • The city said it will coordinate with banks to extend property development loans for key developers

  The move to boost liquidity in the beleaguered building sector comes as China’s home slump deepens, adding pressure on authorities to stabilize an industry that’s estimated to account for almost a quarter of economic output.

  Separately, last week some cities relaxed rules for land sales – a key revenue source for municipalities – after cash-strapped developers became reluctant to bid, prompting the abovementioned appeal on local governments by China’s State Council to sell more special bonds to boost investment amid a slowdown in the economy.

  The bottom line is that as many had expected, regulators are finally fine-tuning their long-running crackdown on the property sector after the near implosion at Evergrande and other junk-rated developers began spreading to higher-rated peers. In late September, the central bank urged financial institutions to help local governments stabilize the rapidly cooling housing market and ease mortgages for some homebuyers. Official media reported in recent weeks that faster mortgages are already on the way.

  “It shows how the city government cares about developers’ liquidity risks,” said Pan Hao, a property analyst at KE Holdings, adding that Chengdu is looking at different measures to prevent developers’ cash risk from blowing up. And now that one city has adopted a proprety bailout strategy, expect every single other Chinese city to follow suit, the result of which will be another major can-kicking for China’s property sector at the expense of trillions in new debt, this time at the local government level.

  Tyler Durden
  Sun, 11/28/2021 – 20:00

• Hedge Funds Suffered The Worst Week In Six Months… And That Was Before Friday
  Hedge Funds Suffered The Worst Week In Six Months… And That Was Before Friday

  While last week’s Black (or rather red) Friday’s illiquid market meltdown was one for the post-Thanksgiving ages, and the collapse for oil bulls was one of the worst daily drops in history, we expect much of the selloff to reverse in the coming hours as the narrative that (C)omicron is the second coming of the bubonic plague, is quickly played down even by the biggest propaganda agents after even the doctors that discovered the Moronic Omicron strain said it was “extremely mild” and is likely destabilized by the dozens of spike protein mutations.

  Unfortunately, the reversal of Friday’s selloff will be of little comfort to hedge funds who were already getting hammered going into the post-Thanksgiving turmoil, because according to Goldman prime, the GS Equity Fundamental L/S Performance Estimate fell -1.57% between 11/19 and 11/25, driven by alpha of -1.12% which was “the worst alpha drawdown in nearly six months” and beta of -0.45% (from market exposure and market sensitivity combined).

  

  Some more positioning details:

  • Overall book Gross leverage rose +1.0 pts to 237.6% (29th percentile one-year) while Net leverage fell -1.5 pts to 84.5% (7th percentile one-year).
  • Overall book L/S ratio fell -1.7% to 2.104 (20th percentile one-year). Fundamental L/S Gross leverage rose +0.8 pts to 178.8% (57th percentile one-year) while
  • Fundamental L/S Net leverage fell -0.5 pts to 64.5% (31st percentile one-year).

  

  In retrospect, someone may have had a correct “feeling” what was coming, because heading into the Friday puke, the GS Prime book saw the largest net selling in more than 3 months (-1.5 SDs), driven by short sales and to a much lesser extent long sales (10 to 1). As the Goldman prime desk retails, single names and macro products were both net sold and made up 54%/46% of the $ net selling.

  • On a geographic basis, managers reversed recent trends and rotated out of North America – which saw the largest net selling in 7 months – while moving into EM Asia (largest net buying since March driven by Chinese stocks) and Europe.
  • 8 of 11 sectors were net sold led in $ terms by Info Tech, Financials, and Industrials, while Staples, Materials, and Real Estate were net bought.

  

  More importantly, hedge funds bought re-opening stocks and sold stay-at-home names despite reports of a new Covid-19 variant. Constituents of Goldman’s GSXUPAND basket were collectively net bought in 3 of 4 days (11/19-11/24), while constituents of GSXUSTAY were net sold for 4 straight days amid risk-off activity.

  

  At the same time, hedge funds sold global financials stocks at the fastest pace in more than six months (perhaps as a result of the collapse in yields where yet another massive short squeeze in Treasurys has led to a plunge in rates).

  

  Still, despite the recent net selling, Financials’ weighting vs. MSCI World ended the week at the highest level in more than 8 years, driven by O/W in Capital Markets vs. U/W in Banks and Insurance.

  As usual, the full weekly note from Goldman Prime is available for our Professional subs.

  Tyler Durden
  Sun, 11/28/2021 – 19:30

• Inflation Never Mattered Much For Crypto… Until About A Year Ago
  Inflation Never Mattered Much For Crypto… Until About A Year Ago

  Inflation never mattered much for crypto… until about a year ago.

  

  As UBS notes in its latest Crypto Keys note last week, forward-looking measures of US consumer prices today rank among the most prominent correlations for digital assets…

  

  …. something we first pointed out a month ago.

  

  Sensitivity to actual data prints is also mounting accordingly…

  

  … and as UBS notes, BTC, ETH and a range of more established tokens screen statistically on par with traditional instruments that are considered classic inflation winners or losers.

  

  Co-movement is weaker for newer coins like BNB as well as ADA, SOL, DOT and AVAX, which have strongly outperformed in 2021, along with meme plays like DOGE. But to UBS that seems encouraging rather than surprising when idiosyncratic factors have clearly been driving their price action.

  But while inflation clearly has be driving the top cryptocurrencies in the past year, the risk now according to UBS is that more powerful drivers will emerge to dislodge the status quo. Potential candidates could be things like stablecoin regulation, tighter exchange and account registration requirements reducing activity in CeFi and DeFi, and new restrictions on bank participation, all of which could be near-term negatives affecting market liquidity and activity but longer-term positives paving the way for institutional participation. While such things may sound crypto-specific, they mirror conditions that govern how conventional inflation hedging instruments behave. 

  Tyler Durden
  Sun, 11/28/2021 – 19:00

• Futures, Oil, Cryptos Soar As Omicron Panic Fades
  Futures, Oil, Cryptos Soar As Omicron Panic Fades

  It appears that Goldman was right again.

  As we reported yesterday, the bank’s traders (not the worthless research analysts whose output is evaluated by the pound not P&L) blasted a report to their best clients, claiming that “we can have reasonable degree of confidence that this mutation is unlikely to be more malicious and that the existing vaccines will most likely continue to be effective in preventing hospitalizations and deaths. As such, while we would monitor the situation in Gauteng closely over the next month, we do not think that the new variant is sufficient reason to make major portfolio changes.” That position was bolstered overnight by two of South Africa’s top doctors (not worthless propaganda quacks like Anthony Fauci) including the one who first discovered the so-called “Omicron”, said that the latest strain was “Extremely mild” and speculated that the numerous mutations in the spike protein “destabilize” the virus.

  And at least in early Sunday night trading, after suffering their worst post-Thanksgiving plunge since 1941, futures are euphorically ramping higher, unwinding a substantial portion of the Friday puke, with Eminis trading as high as 4630 after trading as low as 4577 on Friday…

  

  … oil surging, with WTI spiking as much as 5.7% even if it clearly still has a ways to go recover its Friday losses when WTI plunged $10 as international travel restrictions were reimposed by many countries and airline stocks plummeted. And yet, as Goldman explained on Friday, even with a worst Omicron case scenario, Brent below $80 is a steal here:

  

  Meanwhile, in FX we are seeing safe havens such as the Yen and Swiss Franc slide more than 0.2%, with epicenter pairs like the ZAR surging.

  Peter Tchir, head of macro at Academy Securities Inc., said he’s watching emerging-market currency and bond markets, and Bitcoin, “as leading indicators of potentially more risky asset unwinds to come.” Well, in that case Peter should be happy because in in crypto both bitcoin…

  

  … and ethereum…

  

  … are storming higher, maybe because they are finally realizing that they live in the best of all worlds, one where new Omicron lockdowns would lead to much more money printing (bullish for cryptos which are a hedge to central bank idiocy) while the quick elimination of negative Omicron consequences would just lead to more inflation (also bullish for cryptos which have emerged as inflation hedges).

  Still, confusion remained. “We really need some more answers to figure out the impact on growth,” said Priya Misra, global head of rates strategy at TD Securities. “Risk assets are pricing in uncertainty.”

  Naturally, Moderna’s chief medical officer – sniffing out an opportunity to buy an even bigger yacht – said a reformulated shot to combat the new strain could be available early in the new year. In other words, everything that has been done so far has been for nothing, because science, and because let’s do more of what hasn’t worked to fight what is coming.

  Tyler Durden
  Sun, 11/28/2021 – 18:51

• Biden Admin Pushes Higher Fees For Offshore, Onshore Oil & Gas Companies
  Biden Admin Pushes Higher Fees For Offshore, Onshore Oil & Gas Companies

  Authored by Nathan Worcester via The Epoch Times,

  A new Department of the Interior (DOI) report on oil and gas leasing in federal lands and waters advises the DOI’s Bureau of Land Management (BLM) to raise royalties, rental rates, and other fees on oil and gas companies but has not moved to halt new leasing entirely.

  

  During his 2020 presidential run, President Joe Biden’s campaign website claimed that his climate plan would include “banning new oil and gas permitting on public lands and waters.”

  The DOI report (pdf), issued in response to Biden’s Jan. 27 executive order, was quietly published on Black Friday after months of delays. DOI Secretary Deb Haaland claimed in March that the report would be released in “early summer.”

  Oil prices and gasoline prices have become a hot-button issue, with many blaming the Biden administration’s freeze on oil and gas leasing, shutdown of the Keystone XL pipeline, and other policies for helping to drive up those costs in recent months.

  “So, begging OPEC+ for more supply, raiding our strategic reserve to try to lower prices at the pump, and now increasing leasing fees on U.S. producers. Yep, makes perfect sense—if you’re a Democrat,” wrote Dan K. Eberhardt, CEO of Canary, on Twitter in response to the DOI report.

  In the days and weeks since the COP26 summit ended, the Biden administration has held the largest ever U.S. offshore drilling auction and released 50 million barrels of crude oil from the United States’ emergency oil stockpile, the Strategic Petroleum Reserve (SPR).

  The offshore auction came months after U.S. District Judge Terry Doughty ruled against the Biden administration’s pause on new oil and gas leases on public lands and waters, finding that such auctions are mandatory under federal law.

  Specifically, Doughty determined that the DOI is required to hold quarterly lease sales under both the Mineral Leasing Act (MLA) and the Outer Continental Shelf Lands Act (OCLSA).

  Although the Biden administration claimed its 50 million gallon SPR release was motivated by a desire to “lower prices,” some analysts have argued that the release would not significantly impact oil prices.

  Oil prices dropped following the late November emergence of the COVID-19 variant B.1.1.529, which the World Health Organization (WHO) dubbed “Omicron” on Nov. 26.

  The DOI report claimed the U.S. oil and gas leasing program “fails to provide a fair return to taxpayers, even before factoring in the resulting climate-related costs that must be borne by taxpayers.”

  In addition to recommending higher onshore and offshore drilling fees, new screening procedures for bidders, and a “Fitness to Operate” standard for prospective offshore operators, the report states that the DOI’s Bureau of Ocean Energy Management (BOEM) and Bureau of Safety and Environmental Enforcement (BSEE) would “study the most appropriate method” to develop and apply pricing for methane, carbon dioxide, and nitrous oxide for offshore operators.

  The new report has already met with criticism from the oil and gas industry.

  “During one of the busiest travel weeks of the year when rising costs of energy are even more apparent to Americans, the Biden administration is sending mixed signals. Days after a public speech in which the White House said the president ‘is using every tool available to him to work to lower prices and address the lack of supply,’ his Interior Department proposed to increase costs on American energy development with no clear roadmap for the future,” said Frank Macchiarola of the American Petroleum Institute (API), a key oil and gas trade association, in a statement.

  The report prompted a mixed response from the Sierra Club, which endorsed Biden during his 2020 presidential campaign.

  “We applaud the Biden administration for recognizing the serious flaws in the current oil and gas leasing program and making long-overdue reforms. But to truly tackle the climate crisis, we need to phase out all new leasing for fossil fuels on public lands and offshore—activities that contribute to nearly a quarter of this country’s greenhouse gas emissions,” said Sierra Club Lands Protection Program Director Athan Manuel.

  Colin Rees, U.S. program manager for Oil Change International, went further in a statement from that group.

  “President Biden promised to end the leasing program entirely due to its deadly threat to the climate. Interior’s recommendations fall far short of that goal and ring particularly hollow days after the largest lease sale in U.S. history,” he said.

  “Secretary Haaland and President Biden must end all federal leasing and permits for oil and gas extraction. Anything less is unacceptable and a damning failure of their climate promises and responsibility to future generations,” he added.

  Rep. Bruce Westerman (R-Ark.), ranking member on the House Natural Resources Committee, also denounced the report.

  “After keeping the entire energy industry in limbo for months, DOI’s report shows they have only just begun their war on safe, reliable, domestic energy,” said Westerman in a statement.

  “They will bog small energy companies down in years of regulatory gridlock, place millions of acres of resources-rich land under lock and key, ignore local input, and sell out to overseas suppliers. Ultimately, the American consumer will pay the price,” he added.

  Westerman’s remarks were echoed by Sen. John Barrasso (R-Wyo.), ranking member of the Senate Committee on Energy and Natural Resources.

  “Shutting down energy production on federal lands will not fix climate change. It will just push production off federal lands, including to countries that have lower environmental standards than the United States,” Barrasso said in a statement.

  “Now we know why the Biden Administration quietly dropped their ‘Bleak Friday’ Oil and Gas Leasing Report the day after Thanksgiving. It spells higher gas prices for hardworking families—while Biden bows to OPEC instead of producing cleaner, lower-cost American energy right here,” wrote House Republican Whip Steve Scalise (R-La.) on Twitter.

  Tyler Durden
  Sun, 11/28/2021 – 18:30

• Security Guard For TV News Crew Killed While Covering Organized Looting In Oakland
  Security Guard For TV News Crew Killed While Covering Organized Looting In Oakland

  A security guard protecting a San Francisco Bay Area news crew has died after being shot in the abdomen during an attempted robbery near downtown Oakland on Wednesday, according to the Associated Press.

  

  Former police officer-turned armed guard Kevin Nishita was protecting the KRON-TV news crew while they reported on a smash-and-grab theft related to a spate of organized retail crime in the area, when a group of thugs attempted to steal their equipment.

  The KRON-TV crew was covering the late Monday night burglary of Prime 356, where about 30 people wearing black clothing and latex gloves broke in and snatched clothing from the shelves. –AP

  A reward of $32,500 has been offered for information leading to the arrest of Nishita’s killer.

  “This senseless loss of life is due to yet another violent criminal act in the Bay Area. We hope that offering a reward will help lead to the arrest of those responsible so they can face justice for this terrible tragedy,” said KRON-TV’s vice president and general manager, Jim Rose in a Saturday statement. “Our deepest sympathy goes to Kevin’s wife, his children, his family, and to all his friends and colleagues.”

  We mourn the loss of retired police officer Kevin Nishita who honorably served our Bay Area Community. He was protecting/guarding a local news crew when he was senselessly murdered. Today, we escorted his body from the hospital with full law enforcement honors. 🙏 pic.twitter.com/ZbKRn7J732

  — Alameda County Sheriff (@ACSOSheriffs) November 27, 2021

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

  There have been several organized lootings across California and other states, as two Nordstrom stores were looted for more than $25,000 in high-end goods just days after a Louis Vuitton store in San Francisco was hit.

  #Breaking About 25 cars just blocked the street and rushed into the Walnut Creek Nordstrom making off with goods before getting in cars snd speeding away. At least two people arrested at gunpoint. pic.twitter.com/AG3R94M9L3

  — Jodi Hernandez (@JodiHernandezTV) November 21, 2021

  The thefts are believed to be part of ‘sophisticated criminal networks’ that recruit looters and then sell the merchandise they make off with, according to AP.

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

  Tyler Durden
  Sun, 11/28/2021 – 18:00

• Hillary: "Americans Just Don't Appreciate What Joe Has Done For Them"
  Hillary: “Americans Just Don’t Appreciate What Joe Has Done For Them”

  Via 21stCenturyWire.com,

  This might be the longest-ever Thanksgiving weekend for Joe Biden. While he’s been enjoying a warm blanket and a hot cup of Ovaltine with his family in Nantucket, the President’s poll numbers have been in virtual free-fall. It seems that the nation is fast losing confidence in his ability to handle important issues like the economy, the border, foreign policy and crime running wild on America’s streets. In short, the majority of Americans, both Democrat and Republican, do not believe Joe is capable of fulfilling his duties as the chief executive of the world’s premier superpower.

  At present, Biden’s average job approval rating stands at around 40%, a steep drop from the 55% percent average approval rating he enjoyed last May.

  

  No one really knows just how low Joe will go.

  Still, this hasn’t stopped his ardent allies from rushing to his defense, and blaming his flagging numbers on social media trolls (see deplorables).

  Carlos Garcia from The Blaze writes…

  Former presidential candidate Hillary Clinton tried to explain away President Joe Biden’s poor polling by accusing Americans of not appreciating what Biden has done for them, and blamed social media.

  Clinton made the comments while a guest on Rachel Maddow’s MSNBC show Tuesday evening.

  “You know, democracy is messy. You know, a lot of people got, oh I think, kind of frustrated looking at the messy process of legislation,” said Clinton.

  “And they didn’t really appreciate that, within a year, the Biden administration has passed two major pieces of legislation through both the House and the Senate, they passed another major piece through the House that will be soon be in the Senate,” she continued.

  

  “By any measure those are extraordinary accomplishments and they really will help many millions of Americans with healthcare and prescription drug prices, as well as climate change and so much else,” said Clinton.

  “But because of the way we are getting our information today,” she concluded, “and because of the lack of gatekeepers and people who have a historic perspective who can help us understand what we are seeing, there is a real vulnerability in the electorate to the kind of demagoguery and disinformation that, unfortunately, the other side is really good at exploiting.”

  Both Maddow and Clinton accused Republicans of undermining the results of fair elections and calling for violence as a political solution in the interview.

  Biden’s poll numbers have suffered greatly after a cascade of damaging incidents plaguing his administration. Among the worst were the disastrous retreat from Afghanistan, the painful cost of high inflation, and the crisis of illegal immigration at the border.

  One poll from October found that only 38% of Americans thought Biden deserved a positive job rating.

  Watch Hillary’s clip here: 

  Tyler Durden
  Sun, 11/28/2021 – 17:30

• Suspect Arrested In Philadelphia's Record 500th Homicide This Year
  Suspect Arrested In Philadelphia’s Record 500th Homicide This Year

  Just hours ago we wrote about how Philadelphia had tied its all time homicide record after a shooting that occurred in broad daylight in South Philadelphia.

  A person of interest has now been arrested over what was the city’s 500th homicide of the year.

  The victim’s estranged husband is believed to be behind the attack, Philly Voice reported this weekend. We noted days ago that the shooter had been caught casually walking away from the crime scene on surveillance video. 

  The couple broke up about two weeks ago and the victim, 55 year old Eloise Harmon, was known as “an engaged community member and activist who worked to keep her block free of drugs and violence as far back as the nineties”.

  

  The suspect was taken into custody on Friday, the report says, after he barricaded himself into a home on the 500 block of North Gross Street in West Philadelphia. 

  The murder occurred at 7th and Jackson streets in South Philadelphia at 4:30pm on Wednesday. With more than a month to go in the year, Philadelphia’s homicide total is now even with the record it set in 1990 amidst a massive crack cocaine epidemic in the city, Philly Voice reported.

  Mayor Jim Kenney spoke out about gun violence the day before the murder, stating: “We continue to act with urgency to reduce violence and save lives.” 

  Kenney has been pushing for state lawmakers to pass more gun laws and allow him more power to introduce new gun laws in Philadelphia. 

  Philadelphia Police Department Commissioner Danielle Outlaw commented: “We remain committed to proactively patrolling neighborhoods and encourage community members to continue to work alongside the police.”

  Tyler Durden
  Sun, 11/28/2021 – 17:05

• Free Trades – A World Without Payment-For-Order-Flow
  Free Trades – A World Without Payment-For-Order-Flow

  Authored by Marc Rubinstein via ‘Net Interest’,

  Anyone who’s seen the Apple TV show Ted Lasso will be well versed in the differences between American and British behaviours. Tea and biscuits, football draws, the underhand nature of the British press – it’s all in there.

  One thing that’s not in there, though, is financial services. Which is a shame because there are lots of differences between financial practices in the US and the UK. One of them is the role of payment for order flow in retail stock trading. Payment for order flow underpins the business model of Robinhood, an American company named after a British legend. Yet in the UK, it is banned. If Ted were to pull out his phone to buy some UK-listed shares, the way his order is routed to the market would be very different to anything he may be used to back home. 

  

  It’s a topic worth exploring because European regulators are in the process of banning payment for order flow too and US regulators may very well follow. Against this backdrop, new business models are emerging.

  What is Payment for Order Flow?

  Payment for Order Flow (PFOF) is a fee that a broker receives in return for routing trades to specific exchanges or dealers for execution. Hit confirm on the purchase of a few shares of Citigroup in your trading app [this is not investment advice] and rather than sending it to the stock exchange to be executed, your broker will typically send it to a wholesale market maker.

  There are about eight of these market makers active in the US. The largest is Citadel Securities, then there’s Virtu, G1 Execution, Goldman Sachs, Jane Street, Two Sigma Securities, UBS Securities and Wolverine. Their pitch is that they can deliver a better price for the end customer than if the trade was routed direct to an exchange. That’s because as well as trafficking between exchanges, these market makers tap into so-called dark pools of liquidity. And increasingly, that’s where the action is. These days, more shares can be executed in private, dark venues than on public exchanges. In the case of some stocks, where retail participation is high, 60-70% of trading can occur in the dark.

  One such dark venue is the market maker’s own balance sheet. Given their scale, market makers are often able to match up trades from within their flow. There are around 200 retail brokers in the US but once their orders are aggregated among the eight wholesalers, there is ample opportunity for matching. Retail orders tend to be small, dispersed and uninformed, so the chances that a Citigroup sell order comes in on the same day as a Citigroup buy order are quite high. Virtu, one of the largest market makers, reckons that around 60% of the retail volume it handles is dealt with internally. 

  The advantage for the customer is a better price. Brokers are required to offer the best available price, but only with reference to what’s posted on public exchanges. For Citigroup, that price may be $67.20 to sell or $67.40 to buy. Scour these dark pools and better prices emerge. If the market maker itself can execute the trade at $67.25 for the seller and $67.35 for the buyer, both are better off and there’s still something left in the middle for the market maker.

  In aggregate, market makers reckon they delivered $3.6 billion of price improvement to retail investors last year. Virtu argues that if you adjust for order size, price improvement is even higher and on that metric they alone delivered $3 billion of improvement. 

  In order to attract flow, market makers offer payments. This is where the payment for order flow comes in. Some brokers – Fidelity, for example – don’t take it, but many do. In particular, several have crafted a business model around it, using payment for order flow to subsidise the cost of trades. Over the full year 2020, Robinhood earned $691 million in payments for order flow, representing 72% of its total revenue. 

  Payment for order flow allows the broker to share in any value captured by channeling orders through wholesalers, along with the wholesaler and the end customer (through price improvement). Bloomberg estimates that for every $100 of value captured, around $49 stays with the wholesaler, $13 goes to the broker and $38 ends up with the customer.

  

  Neat as all this sounds, it is highly controversial. There’s a reason they don’t allow it in the UK (or Canada). The issue is the potential conflict of interest it presents. The European Securities and Markets Authority sounds the alarm: “PFOF causes a clear conflict of interest between the firm and its clients, because it incentivises the firm to choose the third party offering the highest payment, rather than the best possible outcome for its clients when executing their orders.”

  Such conflicts were exposed at Robinhood last December, leading to the firm being fined $65 million. The Securities and Exchange Commission (SEC) discovered that Robinhood had locked in unusually high payment for order flow rates but wasn’t getting much price improvement on customer orders. According to the SEC, inferior trade prices deprived customers of $34.1 million in the 30 months up to June 2019, even after taking into account the savings from not paying a commission.    

  The controversy around payment for order flow is nothing new, it’s just that entire business models have been built while it’s been simmering. Twenty years ago, Bernie Madoff defended the practice – not someone you really want fighting your corner.

  “No one tells a firm how they can advertise. If I want to hire salesmen to generate order flow, no one is going to object. I don’t have them. So if I want to use Fidelity’s salesmen and pay part of my trading profits in the form of a rebate, why shouldn’t I be allowed to do it? It was characterized as this bribe and kickback and something sinister, which was very easy to do. But if your girlfriend goes to buy stockings at a supermarket, the racks that display those stockings are usually paid for by the company that manufactured the stockings. Order flow is an issue that attracted a lot of attention but is grossly overrated.”

  In the UK, financial regulators classified payment for order flow as an inducement at odds with best execution back in 2012 and banned it just as it was beginning to take off. A study has since shown that the ban did not have a detrimental effect on pricing, with customers benefiting from a more competitive market for retail orders. 

  This week, Europe has followed suit. The European Commission updated a broad set of rules around capital markets, including amendments “to stop the controversial practice of trading operators offering incentives to brokers for directing client orders to them, regardless of whether or not doing so is in their clients’ best interests (‘payment for order flows’).”

  For new brokers like Trade Republic in Germany – valued in a recent funding round at $5 billion – this is potentially very damaging. Payment for order flow accounts for around half their revenue. Another broker, flatexDEGIRO has disclosed that payment for order flow makes up only 3% of its revenues, leaving it better placed. 

  Nowhere is payment for order flow more embedded though than in the US. Yet here, too, there are rumblings that it may be banned. The newly appointed Chairman of the Securities and Exchange Commission has put a full ban “on the table.” Interviewed by my close namesake David Rubenstein recently, he added:

  “You’re supposed to get best execution out of your broker and is that happening when…a few wholesalers are buying the order flow and a lot of that’s getting concentrated around a few wholesalers?”

  A World Without Payment for Order Flow

  A ban on payment for order flow would leave brokers with two choices:

  They could reverse into the market making business themselves. Historically, retail brokers including E*Trade, Charles Schwab and Interactive Brokers did operate such businesses. But the rise of electronic and high frequency trading narrowed bid/offer spreads, convincing them to sell to scale providers. Charles Schwab sold its execution services business to UBS in 2004, E*Trade sold to Susquehanna in early 2014, and Interactive Brokers sold to Two Sigma in 2017.

  When it sold to Susquehanna, E*Trade argued it wouldn’t suffer a decline in profit because new sources of payment for order flow would offset lost trading profits. Payment for order flow is a higher margin activity than market making, so E*Trade may have been right at the profit level. But on the revenue line, the firm did lose out. In the three years prior to the sale, E*Trade earned an average of $90 million a year from trading, of which around 60% was internal flows; payment for order flow increased by only around $30 million a year subsequent to the sale.

  

  Source: E*Trade financial reports

  If payment for order flow disappears, a reverse back into trading could make sense for E*Trade, especially now it has access to a better trading platform as part of Morgan Stanley (which bought it in 2020). More broadly, larger brokers have a particular advantage at being able to internalise trades. Robinhood alone does more retail equity trading than any market maker outside the big two (Citadel Securities and Virtu). 

  A second option is to seek out alternative revenue sources. This is where the UK experience comes in. In 2016, a new broker was founded in the UK, Freetrade. The firm set out to offer Robinhood-style trading without recourse to payment for order flow: “We do not receive financial or non-financial benefit from any trade execution venues or counterparties in return for sending our customers’ orders to them (sometimes known as ‘payment for order flow’).”

  Freetrade now has around 600,000 funded accounts in the UK, of which 475,000 have been active in the last thirty days. In the third quarter of this year, it processed 2.6 million trades. Like Robinhood, it has an engaged user base with a similar average age (34). Unlike Robinhood, it has used that customer base to fund its growth. Following an original crowdfunding raise in 2016 (for £170,000), the company has launched seven further rounds. This week, Freetrade launched its latest round, valuing the company at £650 million. Within a few hours, the company raised £3.7 million from existing investors and a further £1.3 million from others who signed up for early access. After four hours, the company had raised £8 million from over 6,000 investors.

  Unusually, Freetrade sometimes offers investors secondary trading opportunities, allowing them to lock in profits. How much of that gets recycled back into the platform though is unknown. The company has over £1 billion in assets on its platform, the two largest cohorts being the pre-Dec 2019 cohort and the first quarter 2021 cohort. 

  

  Freetrade funding rounds

  So how does Freetrade make money? 

  Here’s how the company puts it:

  

  I’m not too sure how optimising costs enables free investing, but looking beyond that, Freetrade makes money from subscriptions with upside from FX and interest income. 

  In 2020, the company made £3 million revenue. For 2021, they are forecasting £15 million, less than original projections because of a slower rollout into Europe. Leaving 2021, they are doing £2 million in revenue a month, so that’s around £40 per funded account on an annualised basis. The projection for 2022 is £50 million of revenue. Gross margins are around 90% but staff and overhead costs are expected to continue to consume revenues until 2023. 

  The core subscription model creates an alignment with customers – Freetrade isn’t incentivised to get them to trade more. Which is a good thing! Its customers trade an average 17x per year compared with Robinhood’s 25x (in equities) as at the third quarter. It’s also a more resilient model – revenues won’t collapse with trading velocity, although they are subject to churn. With higher interest rates, Freetrade will be able to secure a larger stream of interest income on uninvested cash.

  Freetrade remains very small next to the giants in the industry like Robinhood. But it’s an interesting model to watch, particularly as payment for order flow comes under pressure. The model may be foreign to Ted Lasso but, as Rebecca tells him, “every disadvantage has its advantage.”

  *  *  *

  This is a free version of Net Interest, my newsletter on financial sector themes. For additional content and supplementary features, please consider signing up as a paid subscriber.

  Tyler Durden
  Sun, 11/28/2021 – 16:40

• Black Friday Shopping Down 28% Over 2019 Levels Despite Improvement Over Last Year
  Black Friday Shopping Down 28% Over 2019 Levels Despite Improvement Over Last Year

  The good news: Black Friday retail traffic was up 47.5% over last year. The bad news: It was still 28.3% lower vs. 2019 levels, according to CNBC, citing preliminary data from Sensormatic Solutions.

  

  “It’s clear shoppers are shopping earlier this season, just as they did last season,” according to Sensormatic senior director of global retail consulting, Brian Field, who added that two primary reasons shoppers are concerned about the supply chain and Covid.

  The peak time for Black Friday shopping in stores was 1 p.m. to 3 p.m., similar to trends in past years, Sensormatic said. Black Friday is still predicted to be the busiest in-store shopping day of the season, according to Sensormatic.

  On Thanksgiving day, visits to brick-and-mortar stores cratered 90.4% from 2019 levels, Sensormatic found. Retailers including Target, Walmart and Best Buy opted to keep their doors closed to customers on the holiday. Target has said it will be a permanent shift. -CNBC

  According to Field, shopping picked up the most in the Southern US, followed by the Midwest, West and Northeast.

  “If you start seeing outbreaks in the U.S., the thing that I think would drive [traffic down] would be if governments and communities start locking down again,” he said. “Otherwise, I think the trends will be very similar to what we expect them to be.”

  Online spending fell from 2020 levels, meanwhile, with e-retailers ringing up $8.9 billion in Black Friday sales – down from $9 billion last year, according to Adobe Analytics, which noted that this is the first year that growth reversed from the prior year as long as records have been kept. The company analyzes over 100 million items in 18 product categories spanning 1 trillion visits to US retail sites.

  Thanksgiving day online sales were flat from one year ago at $5.1billion, according to Adobe.

  The numbers provide even greater evidence that the holiday season has been stretched out as more Americans began their shopping as early as October. Retailers have been spreading out their promotional offers, too. According to a survey from the National Retail Federation, the retail industry’s leading trade group, 61% of consumers had already started purchasing holiday gifts before Thanksgiving. -CNBC

  “Shoppers are being strategic in their gift shopping, buying much earlier in the season and being flexible about when they shop to make sure they get the best deals,” said Adobe lead analyst, Vivek Pandya.

  The company forecasts Cyber Monday sales to be between $10.2 billion and $11.3 billion.

  Tyler Durden
  Sun, 11/28/2021 – 16:15

• LAPD Targets "Follow-Home" Robbery Crime Wave
  LAPD Targets “Follow-Home” Robbery Crime Wave

  Authored by Jill McLaughlin via The Epoch Times,

  Police are ramping up efforts to crush an escalating wave of violent crime in the Los Angeles area targeting popular shopping districts, wealthy residents, and celebrities.

  

  A spate of “follow-home” robbers turned deadly this week, resulting in the murder of a 23-year-old man outside of a restaurant on Sunset Boulevard Nov. 23.

  The Los Angeles Police Department (LAPD) responded to the homicide by announcing the formation of a “Follow Home Task Force.” The county sheriff also declared his intention to do what it took to stop the growing trend.

  Violent crimes are on the rise in Los Angeles. Area law enforcement reported an increase of nearly 4 percent since 2019, according to the latest law enforcement numbers released in October.

  Police Chief Michel Moore said gang violence was an underlying influence.

  The department had identified 133 robberies connected to the trend of suspects following victims home from Melrose Avenue, the Jewelry District, and high-end restaurants and nightclubs, Moore said this week.

  “The victims were being targeted based on the high-end jewelry they were wearing or the high-end car they were driving,” the LAPD said in a Nov. 24 release.

  Last week, the LAPD reported that six gangs were involved in the violent “follow-home robberies” spree.

  “When we look at the underlying influences of that street violence … Those involved with gangs continue to be the highest area of concentration,” Moore told NBC Los Angeles in June.

  Los Angeles, nicknamed the “Gang Capital of America,” has about 450 active gangs operating in the county, the LAPD reported in September.

  Street gangs were involved in a 37 percent increase in murders by June, Moore told reporters, adding that he believed the overall spikes in killings and shootings were related to the effects of the coronavirus pandemic.

  The city has seen a 49 percent increase in homicides, recording 325 in the first 10 months this year, and a 16 percent jump in aggravated assaults.

  The number of people shot climbed to 1,203 by Oct. 23—a 50 percent jump since 2019—according to the report. The number of shooting victims was about 122 a month from August through October.

  Criminals have also targeted vehicles, resulting in a dramatic rise of 50 percent in auto thefts this year.

  During that same time, law enforcement recorded a 28 percent decrease in arrests, with arrests for violent crimes dropping nearly 9 percent in the Los Angeles area.

  The LAPD reported making 16 percent fewer traffic stops and almost 2 percent, or 770, fewer arrests this year, compared to last year. Officers made 34 percent fewer stops this year and 31 percent fewer arrests than five years ago.

  The apparent gang-related robberies follow a trend—dubbed as “burglary tourism” by the police—involving Chilean gangs identified last year.

  In 2020, law enforcement alerted the public about gangs of Chilean nationals using visa waivers to come to the U.S. for the purpose of burglarizing homes, businesses, and vehicles.

  In February, five Chilean men were arrested in connection to a burglary spree that targeted trailheads and dog parks throughout Thousand Oaks.

  ‘Follow-Home’ Robberies in US and UK

  Similar “follow-home” robberies and crimes targeting celebrities or wealthy residents have also occurred in San Francisco, New York, Houston, and the United Kingdom.

  In July, a couple was followed to their San Francisco home and robbed by a man with a semi-automatic rifle. The suspect rear-ended the couple’s car while they drove home from a mall.

  In April, a San Francisco woman also reported being followed home from Richmond to Sunset and attacked for her handbag and jewelry, and a father was held at gunpoint outside his Concord home after being followed home from lunch in Walnut Creek, according to news reports.

  County, State to Join Efforts Targeting Criminals

  Los Angeles County and state officials said this week they intended to increase efforts to curtail the crime wave.

  The county sheriff Alex Villanueva also said his department would take steps to stop the recent rash of violence.

  “This is completely unacceptable,” Villanueva wrote in a social media post Nov. 23.

  “As long as I am your Sheriff, we will do what it takes to stop this growing trend of lawlessness. This is what happens when you defund the police.”

  Gov. Gavin Newsom said Monday he planned to send a budget proposal to lawmakers in January that contained “an exponential increase of support” to help cities and counties fight organized retail theft and “other quality of life issues.”

  Decrease in Police Presence

  Law enforcement responded quickly at first to the uptick in shootings and robberies in the Melrose Avenue area this year by increasing foot and horse patrols, but that has diminished.

  The lack of police presence this week concerned some residents and businesses on the avenue after recent robberies.

  One longtime resident said police presence in the area was needed to keep crime under control.

  “I think it’s very vital to have a constant police presence,” said Ron Ashford, 73, a 30-year resident of the adjacent Fairfax District.

  He said he was concerned when the patrols slowed down recently, reflecting on the situation Wednesday as he sat at a table on the sidewalk on Melrose Avenue.

  He has seen crime increase in the area, and “It wasn’t this bad years ago,” he said.

  Ashford said he is concerned crime will escalate if police retreat from the area.

  “I said, watch, when it dies down, [the criminals] will come back,” Ashford said.

  On July 19, three suspects attempted to rob victims at gunpoint in the parking lot of Media Wine and Spirits.

  One of the victims used his own firearm to shoot at the suspects, apparently hitting two of them, according to the LAPD. Two of the suspects were arrested.

  The incident was just one of several violent crimes along Melrose Avenue this year.

  In September, outdoor diners were held at gunpoint at La Crème Café and robbed of property. The next day, an employee at the Oldboy Barbershop was also robbed. And in August, a Shoe Palace employee was shot and killed during a shoe raffle.

  On Nov. 13, victims were returning home to a short-term rental on North Gardner Street, about a block from Melrose Avenue. They were followed home and robbed at gunpoint by eight suspects after returning from a nightclub.

  Media Wine and Spirits owner Askkar said the shooting at his store parking lot was an isolated event.

  His customers were doing well and life has returned to “normal” along the avenue after an increase in police presence, he said.

  “There is no threat,” Askar told the Epoch Times. “Everything is cool. We’re good and everything is safe.”

  Some shops are taking precautions, posting private security outside, or changing the way they operate.

  The Spitfire Girl clothing store has stopped allowing female employees to close by themselves after the crimes, a store clerk told the Epoch Times.

  “Oftentimes, people are making us feel uncomfortable,” associate Sean Ghedi said.

  A store employee who watches the open door to Cookies & Kicks, a shoe store on Melrose Avenue, said he was working when shots were fired during the robbery at Media Wine and Spirits.

  Their store hasn’t had any problems, the employee who asked to remain anonymous told the Epoch Times.

  “This is the nicer part of LA, but it’s still LA at the end of the day,” the employee said.

  Celebrities, Wealthy Residents Targeted

  Celebrity Dorit Kemsley of “Real Housewives of Beverly Hills” reported Oct. 27 she was followed to her Encino home by two men wearing masks. A home video showed the men smashing sliding glass doors to gain entry before taking as much as $1 million in valuables.

  Former BET host “Terrence J” Jenkins was followed to his Sherman Oaks home at about 3 a.m. Nov. 10 by four masked men in a silver Jeep Cherokee, police reported. One of them ordered him out of his car, but he and a passenger drove away, instead, and were followed by the suspects. Shots were fired, but no one was injured, according to reports.

  Actor and comedian Jeremy Piven reported a burglary at his home in the Hollywood Hills in October when $20,000 worth of clothing was stolen, he said.

  Singer Rihanna’s Los Angeles home was also targeted in July when a man reportedly jumped one of her walls in an attempt to break into her house, police reported.

  Residents Increase Private Security

  Onguard Inc., a security guard service that serves southern California, has received several requests for service from businesses and residents after the recent “follow-home robberies.”

  “There has been an increase in calls and an increase in clients reaching out to us,” Onguard Inc. CEO Ray Nomair told the Epoch Times.

  One couple requested 24-hour security guards posted in their driveway at their Beverly Hills home until February. Another client asked for private protection while her husband was traveling, he said.

  The clients are afraid of trespassers breaking in and stealing property, he said.

  The Ring cameras that residents install themselves to monitor their properties are not enough in these cases, Nomair said.

  Police: Residents Not Wear Expensive Jewelry, Clothing

  The LAPD issued a list of recommendations for area residents to help avoid the “follow home robberies.”

  Police suggested residents should not wear expensive jewelry or other “high-value” property and to be aware of their surroundings when walking out of a restaurant or other place of business.

  “There’s no item of jewelry or piece of property that they have that is worth their life, and so if they find themselves in such a perilous situation, to cooperate, be a good witness. … Do not chase people, do not try to pursue people, and do not try to take actions yourself other than to minimize the chance that you become a victim of the type of violence we saw this morning,” Moore told reporters.

  The LAPD recommended that if drivers noticed they were being followed, they should not drive home and instead go to a police station and call 911.

  Tyler Durden
  Sun, 11/28/2021 – 15:50

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