Today’s News 2nd March 2021

• Stefan Halper’s Role In Crossfire Hurricane More Significant Than Previously Known
  Stefan Halper’s Role In Crossfire Hurricane More Significant Than Previously Known

  Authored by Jeff Carlson via The Epoch Times (emphasis ours),

  Newly released FBI documents shed light on two meetings between FBI Agent Stephen Somma and FBI source Stefan Halper, providing further insight into the wide scope of the FBI’s investigation into the Trump 2016 presidential campaign—and the active role played by Halper, who acted as a confidential human source (CHS) for the FBI.

  

  Although Halper was not considered an official CHS for the FBI’s Crossfire Hurricane investigation prior to these meetings, Somma had known Halper since 2011, according to the Department of Justice Inspector General’s report on FISA Abuse. Additionally, Somma had served as Halper’s handler from “2011 through 2016” as part of Somma’s “regular investigative activities.”

  

  The FBI’s meetings with Halper on Aug. 11 and 12, 2016, were done at the proposal of Somma, who said he “lacked a basic understanding” of political campaigns. Somma said that he selected Halper because he knew that Halper had been “affiliated with national political campaigns since the early 1970s” and “might have information about, and potentially may have met, one or more of the Crossfire Hurricane subjects”—Trump campaign advisers Carter Page and George Papadopoulos and Trump campaign chairman Paul Manafort.

  Somma said that he did not initially tell Halper that there was already an open FBI investigation or who the subjects were, nor, he told the IG, did he tell Halper of the conversation between Papadopoulos and Australian diplomat Alexander Downer, which was the FBI’s claimed reason for opening Crossfire Hurricane.

  Somma was proven to be prophetic, as Halper already had direct knowledge of two of the three people considered subjects of Crossfire Hurricane. And Halper would later fashion a meeting in London with Papadopoulos, the one person he didn’t already know. Halper also managed a meeting with Sam Clovis from the Trump campaign.

  Additionally, based on the FBI documents obtained by Just The News, it appears that Halper was responsible for pushing Lt. Gen. Michael Flynn as a “person of interest” to the FBI with what appears to have been a false story that the FBI failed to immediately verify—and then later failed to correct as the story gained traction in the media during a crucial period of the Trump presidency.

  The IG Report notes that the FBI opened Crossfire Hurricane “without identifying any specific subjects or targets” because, as they told the IG, “it was unclear from the FFG [Friendly Foreign Government/Downer] information who within the Trump campaign may have received the reported offer of assistance and might be coordinating, wittingly or unwittingly, with the Russian government.”

  According to the IG Report, by Aug. 10, 2016, the FBI had assembled a team of “special agents, analysts, and supervisory special agents” and had “conducted an initial analysis of links between Trump campaign members and Russia.” Based upon this analysis, the FBI made the decision to open counterintelligence Foreign Agent Registration Act (FARA) cases “under the Crossfire Hurricane umbrella” on three individuals—Papadopoulos, Page, and Manafort. Flynn was not considered to be part of the Crossfire Hurricane investigation at this time.

  The opening of the FARA cases against the three members of the Trump campaign took place on the day prior to the FBI’s meetings with Halper. Notably, it was not until after the FBI’s meetings with Halper, where he provided the FBI with what now appears to be a false story on Flynn, that the FBI decided to open a fourth FARA case on Flynn on Aug. 16, 2016.

  Halper’s Fortuitous Meetings with Carter Page

  Somma told Halper during their meeting, according to the IG report, that the FBI team was “assigned to a project” concerning Russian interference in the presidential campaign and asked Halper if he knew of Papadopoulos. Although Halper had no direct knowledge of Papadopoulos, he agreed to work with the FBI “to collect assessment information on Papadopoulos and potentially conduct an operation.”

  Halper then volunteered unsolicited information on three other affiliated members of the Trump campaign.

  According to the FBI documents, Halper asked Somma if the FBI had an interest in Page—whose name had not been mentioned in the documents up to this point. Halper’s seemingly innocuous query turned out to be serendipitous and timely for both parties. Halper had recently met Page during two separate meetings—one in the UK and the other at Halper’s office. Meanwhile, the FBI had opened a counterintelligence investigation into Page months earlier, in April 2016, out of their New York Field Office (NYFO).

  

  Page had been invited to a July 2016 symposium held at the University of Cambridge regarding the upcoming election by Stephen Schrage, a former State Department official who advised Mitt Romney’s 2008 presidential campaign. Notably, Schrage had also “studied for a Ph.D. under Halper,” according to the Daily Caller. Schrage has denied knowing of Halper’s role as an FBI source and told the publication that Halper “used his position of power to keep me silent and stretch out my research as well as having me research things to support his activities.”

  The speaker list of the symposium was impressive, including Madeleine Albright, the former U.S. secretary of state, Vin Weber, a Republican Party strategist and former congressman, and Sir Richard Dearlove, the former head of Britain’s MI6 as well as the former boss of former agent Christopher Steel who would author the controversial ‘Steele dossier’ on Donald Trump and his campaign.

  Dearlove was described as an important figure to Halper by Schrage, who said “Halper seemed to put Dearlove on a pedestal, and he seemed to be the most important person to him at Cambridge.”

  In addition to his affiliation with Halper and his participation as a speaker at the July 2016 Cambridge symposium that Page and Halper attended, Dearlove also met with Steele and his business partner, Chris Burrows, and, according to The Washington Post, advised them to work with a top British government official to pass along information from Steele’s dossier to the FBI in the fall of 2016.

  Page attended the event just days after completing a speaking engagement in Moscow, and it was during this time in the UK that he first encountered Halper. Page’s Moscow trip would later figure prominently in the Steele dossier.

  According to the Daily Caller, “Page has said he spoke to most of the attendees and had conversations with Halper. Nobody from Hillary Clinton’s campaign appeared at the event.” Halper would stay in contact with Page for the next 14 months, severing ties exactly as the final FISA warrant on Page expired.

  Halper had a second meeting with Page on July 18, 2016, this time at Halper’s office, where Page asked Halper if he would be interested in becoming a foreign policy adviser for the Trump campaign. Given Halper’s extensive background and lengthy involvement with various administrations dating back to the 1970s, this request does not appear particularly unexpected, particularly in light of their recent Cambridge meeting.

  This second meeting between Halper and Page took place one day prior to a July 19, 2016, memo in the Steele dossier that claimed Page had held “secret meetings in Moscow” with Igor Sechin, the head of oil giant Rosneft, and senior Russian official Igor Divyekin. Page would be contacted one week later, on July 26, 2016, by a Wall Street Journal reporter who inquired whether Page had met with Sechin and Divyekin.

  Halper was non-committal with Page but informed the FBI he had no intention of joining the campaign. Following a short discussion with the FBI, Halper said he “was willing to assist with the ongoing investigation and to not notify the Trump campaign about [his] decision not to join.” Somma later told the IG that “using [Halper] outside of the campaign, the Crossfire Hurricane team could find ‘smart ways, and quiet ways to get information that we can corroborate.’” Halper maintained his non-committal stance with Page in future meetings after agreeing to continue a dialogue with Page on the matter “for the benefit of the FBI” according to the FBI documents.

  FBI’s NYFO Opens an Early Investigation into Page

  Meanwhile, according to the IG report, “Page had been on NYFO’s radar since 2009, when he had contact with a known Russian intelligence officer.” Page had also been interviewed by the FBI on March 2, 2016, in relation to an ongoing case against this same Russian officer—a case in which Page was providing assistance.

  When the FBI concluded its March 2, 2016, interview of Page, the interviewing agent “discussed with her supervisor opening a counterintelligence case on Page based on his statement to Russian officials that he believed he was Male-1 in the indictment and his continued contact with Russian intelligence officers.”

  On April 6, 2016, The FBI’s NYFO “opened a counterintelligence [“redacted – likely ‘espionage’”] investigation on Carter Page.” Despite Page’s role within the Trump campaign, the investigation was not designated as a sensitive investigative matter.

  According to the IG report, “there was limited investigative activity” into Page by the NYFO until the “Crossfire Hurricane team’s opening of its own investigation of Page on August 10.” At this point, Page’s investigation was transferred from the NYFO and folded into the one just opened by the Crossfire Hurricane team which was now investigating the Trump campaign.

  Meanwhile, in the week or so prior to the meeting with Halper—and the opening of the FARA investigations into Page, Papadopoulos, and Manafort—the Crossfire Hurricane team began to ask for information on Page from the NYFO. On Aug. 10, 2016, the day before his meeting with Halper, Somma received “an attachment titled ‘Carter Page-Profile,’ which had been prepared by a Crossfire Hurricane Staff Operations Specialist.”

  

  The profile, which was dated Aug. 1, 2016, quoted the 2009 electronic communication regarding Page’s “statements to the FBI about his contact with the other U.S. government agency.” This information regarding Page’s work with another federal agency, likely the CIA, might have exonerated Page immediately.

  The IG stated in his report, “We did not find any electronic communications indicating that the FBI provided OI [Office of Intelligence] with this Carter Page profile.” Nor was it provided to the FISA court in the FBI’s FISA requests on Page.

  On Aug.15, 2016, three days after the FBI’s second meeting with Halper, Somma emailed a “written summary on Carter Page to the OGC Unit Chief,” believing that the information in his email was sufficient to obtain a FISA warrant to spy on Page. The IG Report notes that the FBI looked at obtaining FISAs on Papadopoulos and Page, but were initially turned down on both fronts:

  “The Crossfire Hurricane team initially considered seeking FISA surveillance of Papadopoulos as a result of his statement to the FFG and of Page based upon information the FBI had collected about his prior and more recent contacts with known and suspected Russian intelligence officers, as well as Page’s financial, political, and business ties to the Russian government. Officials determined there was an insufficient basis to proceed with a FISA application concerning Papadopoulos, and the Crossfire Hurricane team never submitted a FISA application for Papadopoulos.

  With regard to Page, on August 15, 2016, the Crossfire Hurricane team requested assistance from the FBI’s Office of the General Counsel (OGC) to prepare a FISA application for submission to the FISC [Foreign Intelligence Surveillance Court]. However, after consultation between FBI OGC and attorneys in the Office of Intelligence (OI) in the Department’s National Security Division (NSD), which is responsible for preparing FISA applications and appearing before the FISC, the Crossfire Hurricane team was told in late August 2016 that more information was needed to establish probable cause for a FISA on Page.”

  In addition to the profile containing the information on Page, the IG report notes that on or about Aug. 17, 2016, the Crossfire Hurricane team received a memorandum from “the other U.S. government agency detailing its prior relationship with Carter Page, including that Page had been approved as an operational contact for the other agency from 2008 to 2013 and information that Page had provided to the other agency concerning Page’s prior contacts with certain Russian intelligence officers.”

  The IG Report also notes that neither the Aug. 17, 2016, notification, nor the Aug. 10, 2016, profile was included in the FISA application on Page or subsequent renewals of the spy warrant. Nor does it appear to have been included in the original FISA request that Somma made on Aug. 15 that was denied on Aug. 22, 2016, for insufficient information.

  In addition to Page, Halper told the FBI during their August meetings that he had known Manafort for “over 30 years and had worked with him on several political campaigns. Halper offered to reach out to Manafort but noted that Manafort would almost be too busy to meet at this time in the campaign. Manafort, already facing troubles for his activities in Ukraine, would resign from the Trump campaign a week later on Aug. 19, 2016.

  Halper ‘Pushes’ Flynn into the FBI’s Crossfire Hurricane Investigation

  According to the newly released FBI documents, Halper told the FBI on Aug. 11, 2016, of an incident that he claimed took place between Flynn and Svetlana Lokhova, a Russian-born British citizen, at an event at the Cambridge Intelligence Seminar in 2014. According to the document, Halper claimed that Flynn left the university dinner with Lokhova and that she “joined [Flynn] on the train ride to London. Halper told the FBI that he was ‘somewhat suspicious of Lokhova as she has been affiliated with several prominent members of [redacted]’ and that he believed her father “may be a Russian oligarch living in London.”

  The FBI would later discover this story was almost certainly false and Special Agent William Barnett, the lead agent in the Flynn investigation, later noted in an investigative memo that he “found the idea FLYNN could leave an event, either by himself or [redacted] without the matter being noted as not plausible.” The matter was investigated but “with nothing to corroborate the story, BARNETT thought the information was not accurate.

  Halper had taught at Cambridge and he co-founded the Cambridge Intelligence Seminar with Dearlove, whom Halper has reportedly known since 2004, along with Christopher Andrews, the official MI5 historian. All three men contributed in various ways to breathing false life into the Flynn-Lokhova story. Halper did so through his tales to the FBI, while Dearlove, according to The Washington Post, was “disconcerted by the attention the then-DIA chief showed to a Russian-born graduate student.” Andrews, a one-time mentor to Lokhova, wrote of Flynn’s firing in Feb. 2017 and suggested involvement with a Russian student.

  In March 2017, a month after Andrews’s op-ed, versions of this story were published by The Wall Street Journal and the Guardian. The entirety of Halper’s tale to the FBI has been vigorously contested by both Flynn and Lokhova and their denials have been backed by witness accounts. According to the Daily Caller, “Dan O’Brien, a Defense Intelligence Agency official who accompanied Flynn to the Cambridge event, told The WSJ he saw nothing untoward involving Lokhova. Lokhova’s partner, David North, has told TheDCNF he picked Lokhova up after the event.”

  Additionally, Halper’s presence at the Cambridge dinner has been disputed. Lokhova has repeatedly stated that Halper was not at the dinner where the incident supposedly took place. Schrage, the former State Department official who “studied for a Ph.D. under Halper” has also stated that Halper was not present at that particular function.

  Although the story seems to be one that could quickly be disproven, the FBI appeared to initially accept Halper’s story at face value. Following their meeting with Halper, the FBI began a formal investigation into General Flynn, opening a FARA investigation on Aug. 16. Just one day later, the Trump campaign received a briefing by the Office of the Director of National Intelligence on foreign threats. The FBI also participated in the meeting. The IG report notes that the meeting was attended by FBI Agent Joe Pientka—primarily because Flynn was also in attendance. The meeting was seen by the FBI as an opportunity to gain information for its investigations.

  It seems that Halper’s fortuitous familiarity with individuals the FBI was concurrently looking into made an impression on Somma, who later told IG Horowitz that “quite honestly … we kind of stumbled upon [Halper] knowing these folks.” Somma said that “it was ‘serendipitous’ and that the Crossfire Hurricane team ‘couldn’t believe [their] luck’ that Source 2 had contacts with three of their four subjects, including Carter Page.”

  Somma’s comments regarding the FBI’s “four subjects” are particularly worth noting as it does not appear that Flynn was a subject of Crossfire Hurricane—or perhaps even directly on the FBI’s radar—until after the FBI had their meeting with Halper.

  Tyler Durden
  Tue, 03/02/2021 – 00:00

• "Did You Agree To This? Everybody's Locked Up": Ed Snowden On Power Of Silicon Valley Amid COVID Lockdowns
  “Did You Agree To This? Everybody’s Locked Up”: Ed Snowden On Power Of Silicon Valley Amid COVID Lockdowns

  A new video montage of recent interviews with former NSA contractor and whistleblower Edward Snowden exposes how the global COVID-19 pandemic lockdowns – which have been particularly severe and far-reaching in Western countries like the UK, Canada, and in a number of major US cities – coupled with the already immense power of Silicon Valley and its allies in the national security state, has served to keep individuals and entire populations ‘gated off’ from one another. “This is just the beginning,” Snowden warns of these unprecedented times. “All of these things today have consequences which we are not informed about.”

  “I would say this is sort of unusual… we’re all spread all over the world in different rooms, everybody’s locked up… but for me this is how I’ve always lived.” He narrates that so much of our life is “intermediated by the screens.” Increasingly our lives are “intermediated by these screens. We spend less time outside and more and more time staring into glass or through glass to connect with that larger world – something beyond ourselves.”

  Ultimately he poses the following questions as a warning in the video entitled, “Edward Snowden 2021: The Most VICIOUS HONEST 10 Minutes of your LIFE!”… “Increasingly it feels something distinct from us, something apart from us – something that we are witnessing rather than participating in. Ask yourself: Is this your will? Is this what you want? Did you agree to this? Is this consistent with the vision of the future you want to see?

  Snowden continues, “The institutional powers of our day… which have assumed for themselves some mandate – whether to conduct business, whether its to govern the lives of others, whether it’s to make war, .. these institutional powers don’t seem to particularly care about your answer to that question: is this what you wanted? Is this OK? Did you agree to it?“

  The answer is frequently “you don’t have a choice” as to whether you agree or not… “because they have the gun, they have the baton. And Facebook would say ‘Click OK to continue’ – and if you don’t you can’t do anything…”

  “Because they [Facebook and big tech] control the policy and through the policy they control the platform, and through the platform they control the public… they exercise some great level of influence over it by gating us off, separating us from the things that we need to do to connect and engage in just what is considered today a ‘normal life’.

  “Is time that we recognize these are forced choices,” he urges while warning it threatens to become a permanent state of things if the public doesn’t become aware and act.

  “Edward Snowden says COVID-19 could give governments invasive new data-collection powers that could last long after the pandemic.”

  “Could”? More like for certain. https://t.co/lFa6RPGzTx

  — Paul Huang (@PaulHuangReport) April 9, 2020

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

  These are themes and ‘warnings’ Snowden began to get vocal about from the moment the pandemic hit the West and North America last March, which in many places resulted in the imposition of emergency ‘stay at home orders’ from state and local governments:

  “Five years later the coronavirus is gone, this data’s still available to them — they start looking for new things,” Snowden said. “They already know what you’re looking at on the internet, they already know where your phone is moving, now they know what your heart rate is. What happens when they start to intermix these and apply artificial intelligence to them?” he said last Spring.

  Underscoring in these latest statements that this is a key source for the “growing tide of anger” we’re now witnessing globally, Snowden continues: “People recognize that it is not consent, not in an way that really matters… People don’t feel a sense of agency… and they don’t agree with it.”

  “What we’re seeing is a divorce between the individual and the institutional in terms of power and accountability.”

  Speaking of world leaders and global ruling elites, he urges awareness of the immensely alarming reality we’ve blindly crept into as a society: “We need to recognize that there seems to be nothing they can do that results in them facing a serious consequence, whereas the smallest infractions of our lives that can even be civil rather than criminal are instantly crystalized and memorialized at the moment of mistake, and captured into a permanent record that’s held and controlled by these groups… whether they are commercial or governmental.”

  Tyler Durden
  Mon, 03/01/2021 – 23:40

• The Idea Of Secession Isn't Going Away
  The Idea Of Secession Isn’t Going Away

  Authored by José Niño via The Mises Institute,

  Secession is a four-letter word for the millions of Americans who have gone through the conventional educational pipeline that teaches them that the American state is indivisible and sacrosanct.

  

  However, intellectually honest historians whose minds haven’t been warped by educational institutions know better than to dismiss secessionism as some nefarious activity that only treasonous Southerners of the Confederacy are capable of engaging in.

  For all intents and purposes, the founding generation was secessionist. When they signed on to the Declaration of Independence, those who fomented the American Revolution were committed to liberating themselves from the grasp of the British Empire. Quite arguably the most important act of secession in human history, the revolutionaries’ successful efforts to secede from British rule had the whole world awestruck.

  More importantly, it cemented the idea of political separation in the American political consciousness. Before becoming a state, Vermont went the extra mile after the thirteen colonies declared their independence, breaking free from New York and Great Britain and establishing itself as an independent republic in 1777. It would remain that way until 1791, when it ratified the US Constitution and joined the union.

  Even during the ratification of the Constitution, many states feared the idea of a government that would become excessively centralized. So they had secessionist backup plans in case things got out of hand. In the Politically Incorrect Guide to American History, Tom Woods touched on how the New York, Rhode Island, and Virginia “explicitly reserved during the ratification of the Constitution the right to withdraw from the Union should it become oppressive.”

  Secession Attempts in the Early Days of the American Republic

  Americans’ secessionist streak did not go away so easily after they extricated themselves from the dominion of their British overlords.

  Secessionist talks grew stronger during the presidency of Thomas Jefferson. The Federalist Party, based in New England, was dismayed with having Jefferson as president and even more concerned about the ascendant Democratic-Republican Party. They viewed Jeffersonian Democrats as a political force that could potentially displace them thanks to the electoral advantages the Democratic-Republicans enjoyed in the South and the newly incorporated Western states.

  Federalist apprehensions became even more palpable during James Madison’s presidency, when the US locked horns with the British Empire in the War of 1812. Many Northerners wanted to maintain peaceful relations with their British cousins and were not keen on bellicosity. As a consequence, New England members of the Federalist Party gathered during the Hartford Convention in 1814 to discuss the New England states’ relationship with the federal government, which sparked nationwide fears of secessionism in New England.

  Although it did not materialize into a coherent separatist movement, the Hartford Convention did lead to the downfall of the Federalist Party due to their perception as engaging in treasonous behavior in the eyes of the Americans who were eager to resist the British invasion. Nevertheless, the Hartford Convention sowed the seeds for future secessionist movements.

  How Secession Led to the Creation of Republic of Texas

  Following its independence from Spain in 1821, Mexico was left with the task of building an independent nation. In contrast to Mexico proper, Mexican Texas was frontier territory and not particularly attractive to Mexicans, who found better opportunities in Mexico’s central regions. Settlements in San Antonio and Nacogdoches served as forward posts for the Spanish Empire, but there was no concerted effort to settle the region, which remained sparsely populated until the 1820s.

  To populate the area, Mexican authorities came up with a land grant system to attract settlers (empresarios) to Mexican Texas. Many enterprising frontiersmen in the United States were in search of adventure and the prospect of land grants in Texas was tantalizing. For many of these explorers, settling down in Texas represented a fresh start.

  The catch to the land grant program was that American migrants had to become Mexican citizens, follow Mexican laws, nominally accept the Catholic faith, and learn Spanish. American settlers started pouring into Mexican Texas, and by the mid-1830s, they significantly outnumbered the Mexican citizens there. The American settlers forged a distinct identity that did not align with the political desires of Mexican authorities, who had other plans in mind for Texas.

  Tensions came to a head after General Antonio López de Santa Anna became president of Mexico and committed himself to centralizing the Mexican state. Mexico fell down the path of dictatorship after Santa Anna suspended the Mexican Constitution and declared himself dictator in 1834. Shortly thereafter, Santa Anna used the Mexican army to clamp down on Texas, which had enjoyed a quasi-autonomous status, to see through his centralist vision for Mexico. The Mexican strongman’s actions generated significant backlash from the Anglos and even some Mexicans (Tejanos) residing in Texas.

  Texas had its Lexington moment on October 2, 1835, when Texans took up arms against a Mexican military detachment in the settlement of Gonzales, Texas. The Battle of Gonzales immortalized the Come and Take It flag that was flown before the battle, where Texans dared Mexican forces under the command of Colonel Domingo de Ugartechea to seize a cannon in the settlement’s possession. The Texans compelled the Mexican forces to retreat, marking the beginning of the Texas Revolution.

  With the adoption of the Texas Declaration of Independence on March 2, 1836, the Texans explicitly laid out their decision to break free from Mexico. They cited Santa Anna’s actions to transform Mexico’s federal republic into a centralized military dictatorship and the reneging on guarantees to protect a number of their constitutional liberties (the right to bear arms, trial by jury, and freedom of religion) as some of the principal reasons for their decision to revolt. Moreover, separatist Anglo Texans enjoyed support from Americans in Congress who were more than happy to encourage the partition of Mexico into smaller pieces. 

  The Texas Revolution came to a decisive conclusion at the Battle of San Jacinto on April 21, 1836, after the Texan army captured Santa Anna and compelled him to sue for peace. Although Santa Anna returned to Mexico unharmed, the Mexican Congress did not ratify a treaty to recognize the new Republic of Texas, but several countries such as Britain, France, and the United States recognized the independent republic. Texas would later be annexed by the United States, in 1845.

  Does Secession Have a Place in Contemporary American Politics?

  After protesters stormed the US Capitol on January 6, 2021, the ruling class was worried about a number of bugaboos such as insurrection, sedition, and treason. The commentariat’s utter disdain for Trump supporters and those who don’t bend the knee to the managerial regime can no longer be concealed. The fact that more than 70 million Americans could be categorized as “domestic terrorists” suggests America is ruled by an occupational class who wants to browbeat its subjects into submission and modify their behavior so it comports with regime standards.

  At this juncture, sober minds would stop pretending this country can remain united. Americans would be wise to not dismiss separatism just because their history textbooks said it’s illegal, racist, or treasonous. Instead, they should recognize it as a tool that could save a lot of headaches and even lives. The hyperpolarized state of American politics is not going anywhere, and can only become more heated as America’s social fabric deteriorates and politics become more divisive. Whatever civic glue held Americans together in the twentieth century has been rapidly withering away in recent decades.

  Regardless of the prudence of such mob action, the aftermath of the Capitol rush stood out as a masks-off moment of the highest order. Those who may share disagreements on a number of political issues are no longer treated as fellow Americans, but rather as enemies with malicious intentions whose behavior must be corrected through a combination of state and corporate power. For the haughtiest mouthpieces of the current therapeutic regime, Trump supporters are the perfect test subjects for the experiments to deprogram Middle Americans of their recalcitrant behavior, better known as rejecting the corporate media’s narrative.

  The battle lines have been clearly drawn, and sober minds would recognize that any return to previous eras of normalcy in America is a fleeting fantasy. Talk of secession from the likes of Texas Republican Party chairman Allen West and longtime conservative shock jock Rush Limbaugh may come off as partisan chest pounding, but more fundamentally it personifies a vestigial desire for self-governance. As I wrote in 2019, even standard conservative commentators are entertaining the idea of a national divorce.

  Ignoring this new paradigm of hyperpolarization could prove deadly for Americans who view their political rivals as existential threats and for the numerous bystanders who want nothing to do with this political squabble. How about we don’t take any chances by preserving this flawed political order and choose the road of radical decentralization instead?

  Tyler Durden
  Mon, 03/01/2021 – 23:20

• Controversial Bonus Change At Bank Of America Pulls Forward $400 Million In Costs
  Controversial Bonus Change At Bank Of America Pulls Forward $400 Million In Costs

  A controversial change in how bonuses were to be issued for 2020 has wound up pulling forward $400 million in expenses, which will be booked in Q1. The costs otherwise would have been spread out over the next four years, according to Bloomberg. 

  The bank’s CFO said on Friday: “In January, we made a change in one element of a portion of our incentive comp paid in 2020. The alteration will shift into this quarter costs that would have been incurred anyway over the next four years, so it’s just an acceleration in Q1.”

  Recall, we had reported earlier this month that the change in bonuses was causing “internal drama” at the bank. 

  The bonuses in question are shares that are granted to executives who earn $1 million or more. Instead of shares vesting in equal parts over a timeframe, they now all vest only at the end of four years. The new rules were supposed to be applied broadly, but it has been revealed that many top investment banking and trading veterans spoke out against having to wait 4 years for their bonuses. As a result, management agreed to exempt them. CEO Brian Moynihan said on January 27 that the new policy “didn’t work the way some people wanted it to, so we fixed it.”

  

  Chief Financial Officer Paul Donofrio also said on Friday that the bank is expecting declining loan levels to be a headwind for net interest income, comprised of revenue from customer loan incomes minus what the bank pays depositors. 

  He said: “It puts more pressure on the near-term NII, but not as much on the full year, assuming we see some loan growth turn around in the second half. Still we expect the second half of ’21 should be demonstrably better than both the first half of ’21 and the second half of 2020.”

  Tyler Durden
  Mon, 03/01/2021 – 23:00

• Cities Have Themselves To Blame, Not COVID-19, For Sinkhole Status
  Cities Have Themselves To Blame, Not COVID-19, For Sinkhole Status

  Authored by Fergus Hodgson via The Epoch Times,

  The receding economic tide this past year has revealed many city officials to be naked.

  Oft-forgotten amid the COVID-19 chaos is that their fiscal crises predated the virus’s spread. According to Truth in Accounting (TIA), a nonprofit fiscal watchdog, 62 of the 75 largest U.S. cities were already in the red in 2019.

  That statistic comes from the latest TIA “Financial State of the Cities” report (pdf), which came out in the last week of January. The authors’ objective is to provide citizens with easy-to-understand information and peer comparisons regarding their local governments’ finances.

  The total liabilities of the 75 most-populated U.S. cities amounted to $333.5 billion at the end of the 2019 fiscal year. Defined pension and medical commitments make up the lion’s share of the unfunded debt.

  Sunshine Cities vs. Sinkhole Cities

  The TIA report delivered not a single “A” grade. In other words, no major U.S. city had a taxpayer surplus—available funds to pay bills divided by residents—of $10,000 or more.

  However, one Californian city, Irvine, set an example and at least stayed above water. Retaining the title of the fiscally healthiest city for the second consecutive year, Irvine registered a taxpayer surplus of $4,100 per resident.

  Even if Irvine posts a lower surplus in the following fiscal year, hit by the pandemic, it has enough resources to weather the storm. “Irvine’s elected officials have truly balanced their budgets,” the TIA team claims.

  Washington, D.C., Lincoln, Stockton, and Charlotte follow Irvine. Together, they make up the top five “sunshine cities”—those with enough money to pay all their accumulated debt to date.

  

  Surprise, surprise: New York City and Chicago rank at the other end of the spectrum with the highest taxpayer deficits: $68,200 and $41,100 per person, respectively.

  New York City’s deficit has soared since 2014, and the COVID-19 emergency has placed the Big Apple in a dire situation. In December 2020, the city asked the federal government for a second bailout.

  Chicago, the third most populous U.S. city, has been tightening its fiscal belt in recent years. For Kristen Cabanban, the city’s budget and management spokesman, the Windy City has addressed financial liabilities and deficits without significant tax increases. Nevertheless, top ratings agencies do not concur and have sounded the alarm over Chicago’s 2021 budget.

  Honolulu, Philadelphia, and Nashville round out the bottom five “sinkhole cities.” They lack the funds to pay their bills and are passing the severest financial liabilities on to future generations.

  For them, there’s no light at the end of the tunnel unless officials undertake drastic measures. Cities are facing revenue cutbacks and rising medical costs amid the pandemic; budgetary constraints have forced significant cuts in public services, even postponing maintenance. Higher interest rates, already ominous, are also set to divert precious funds and rub salt into the wound for taxpayers.

  Why Balance Budgets?

  Some local governments disagree with the report’s inclusion of financial liabilities outside the operating budget. Sheila Weinberg, TIA founder and CEO, responds that all debts are relevant for policymaking.

  She’s right. There’s no free lunch, and that includes promises of future benefits: someone has to pay the bills when they arrive. Further, if officials meet immediate needs with funds intended for future needs, future taxpayers will pay more and receive less.

  Further, getting out of a ditch is more difficult for city governments—since their powers are more limited—than for state governments and the federal government. Municipalities, for example, have limited authority over pension reforms. Their revenue sources are mainly property and sales taxes, and their cost of borrowing is often greater due to higher interest rates.

  When city debts balloon, the options are (1) allocating a larger portion of public spending to debt servicing or (2) postponing payments and passing debt on to future generations. Both alternatives hinder economic development and push municipalities into a downward spiral of loose fiscal policy.

  Residents can more easily vote with their feet; so too can companies. Firms and individuals are fleeing New York City, for instance. Goldman Sachs Assets Management may relocate to Florida and take high-paying jobs (and taxes) with it. In fact, more than 300,000 households who were living in the Big Apple changed their postal addresses to out-of-state destinations in 2020.

  Last September, the Manhattan Chamber of Commerce urged authorities to retain New York City’s position as “a thriving global center of commerce, innovation, and opportunity.”

  The Takeaway From the Pandemic

  TIA is far from alone in its warnings and assessments. In August 2020, the National League of Cities (NLC) released a similar report, warning local governments’ fiscal capacity was as low as during the Great Recession.

  According to the NLC report, U.S. cities will have to make do with 13 percent lower revenues in the 2021 fiscal year. As a result, 90 percent of them will see their finances deteriorate compared with the 2020 fiscal year.

  The COVID-19 crisis has unleashed unprecedented helicopter money and emergency-relief subsidies. It has also shown how bumpy the road of living beyond one’s means can be. Expecting local authorities to use this crisis as an opportunity to put their houses in order may be too much.

  Only residents can turn the situation around by resisting the siren call of demagogues. They can vote with their feet or vote for candidates with credible plans to balance the books. An austere budget may be a bitter pill to swallow now, but it will pay off as residents, workers, and retirees get more than empty promises. It will also not unfairly saddle future generations with debts for which they bear no moral responsibility.

  Tyler Durden
  Mon, 03/01/2021 – 22:40

• LA Schools To Launch Microsoft COVID-Tracking App So Children Can Attend Classes
  LA Schools To Launch Microsoft COVID-Tracking App So Children Can Attend Classes

  The Los Angeles school district is launching a Microsoft-developed a COVID-tracking app for children, which allows students to schedule and view the results of COVID tests, post the results of off-campus COVID tests, and schedule vaccinations.

  

  According to a promotional video, however, “the real magic is your daily health check,” where students answer a questionnaire about whether they have any symptoms – after which the “Daily Pass” app will issue the child a scannable QR code to be scanned by a staff member, who will also take the child’s temperature.

  “Your entrance ticket appears!” exclaims the narrator.

  It’s Microsoft Magik! Thanks Bill for our daily pass! pic.twitter.com/z0rku5SY95

  — Jeff Berwick (@BerwickJeff) February 28, 2021

  Given the incredibly low transmission rate of COVID transmission at schools – just 0.08% among more than 90,000 students in North Carolina school districts according to the University of Minnesota’s Center for Infectious Disease Research and Policy – one can’t help but question whether Microsoft’s app will actually improve the COVID situation, or simply collect data and habituate children to being tracked. Of note, all data will be reported as required to health authorities, according to the LA Times. 

  The app, first announced in August, will be ‘instrumental in coordinating student and employee health checks, coronavirus tests and vaccinations.’

  The software associated with the app is already being used to schedule and track district-managed coronavirus tests and vaccinations — the district began a pilot vaccination effort last week.

  In Monday’s announcement, Beutner touted the app’s ability to generate a unique QR code for each student and staff member authorizing entry to a specific L.A. Unified location for that day.

  A person will receive that code based on a negative coronavirus test or by self-reporting that they are free of symptoms. When those individuals arrive at a campus, their QR code, a type of barcode, is scanned by a staff member, who also takes the individual’s temperature. Besides helping to keep people safe, the goal is to prevent logjams at the entrance to school at the beginning of the day. –LA Times

  “Sort of like the golden ticket in ‘Willy Wonka,’ everyone with this pass can easily get into a school building,” said Superintendent Austin Beutner in a Monday statement.

  The Times notes that this process “will not catch people who are asymptomatic carriers of the infection” (16% of children who contract COVID), but the school district hopes to “address that shortcoming through the weekly coronavirus testing of students and staff.”

  “We’ll know the status of everyone on the building,” said Buetner, who added that it’s unclear when elementary schools will return to in-person instruction, but that day-care and small-group in-person learning will begin this week for a limited number of children.

  United Teachers Los Angeles, meanwhile, says their district’s teachers, counselors, nurses and librarians should not return to work until they are fully immunized.

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  Tyler Durden
  Mon, 03/01/2021 – 22:20

• How Does The J&J Vaccine Compare To Other COVID Vaccines? 4 Questions Answered
  How Does The J&J Vaccine Compare To Other COVID Vaccines? 4 Questions Answered

  Authored by Yves Smith via NakedCapitalism.com,

  We are running this post for one reason: as this article stresses, the testing of the Pfizer and Moderna vaccines was conducted much earlier, when fewer variants were out and about. Therefore the Johnson & Johnson vaccine efficacy gives a much more realistic of what you could expect in terms of protection now.

  

  So far, with Pfizer and Moderna, all we have are airy assurances and largely in vitro studies against the new variants.

  Both companies have discussed the notion of a third “booster” shot to contend with known new variants, which looks an awful lot like an admission that they suspect or even know the efficacy of their current offerings is meaningfully lower against some of the new variants.

  Another way the efficacy data may not be comparable is in how they screened for Covid infections.

  Astra Zeneca tested all its clinical trial participants every week.

  By contrast, Pfizer used the dodgy approach of testing ONLY participants who developed “severe respiratory symptoms”. That means they ignored cases with loss of smell, the most reliable indicator of Covid, ones with digestive symptoms, and other symptom combinations that the CDC (and people I know) have found to be signals of Covid onset: fever, chills, headache, fatigue.

  And the “severe respiratory infection” only screen also means Pfizer did not catch mild or asymptomatic cases, even though we know they can do serious damage. From CBS News:

  A Texas trauma surgeon says it’s rare that X-rays from any of her COVID-19 patients come back without dense scarring. Dr. Brittany Bankhead-Kendall tweeted, “Post-COVID lungs look worse than any type of terrible smoker’s lung we’ve ever seen. And they collapse. And they clot off. And the shortness of breath lingers on… & on… & on.”

  “Everyone’s just so worried about the mortality thing and that’s terrible and it’s awful,” she told CBS Dallas-Fort Worth. “But man, for all the survivors and the people who have tested positive this is – it’s going to be a problem.”

  Bankhead-Kendall, an assistant professor of surgery with Texas Tech University, in Lubbock, has treated thousands of patients since the pandemic began in March.

  She says patients who’ve had COVID-19 symptoms show a severe chest X-ray every time, and those who were asymptomatic show a severe chest X-ray 70% to 80% of the time.

  In other words, I’m sufficiently suspicious of the Pfizer efficacy numbers as to be willing to give Johnson & Johnson a go, particularly with its one-shot drill.

  *  *  *

  By Maureen Ferran, Associate Professor of Biology, Rochester Institute of Technology. Originally published at The Conversation

  The U.S. Food and Drug Administration has authorized the use of the Johnson & Johnson coronavirus vaccine in adults. Maureen Ferran, a virologist at the Rochester Institute of Technology, explains how this third authorized vaccine works and explores the differences between it and the Moderna and Pfizer–BioNTech vaccines that are already in use.

  1. How Does the Johnson & Johnson Vaccine Work?

  The Johnson & Johnson vaccine is what’s called a viral vector vaccine.

  To create this vaccine, the Johnson & Johnson team took a harmless adenovirus – the viral vector – and replaced a small piece of its genetic instructions with coronavirus genes for the SARS-CoV-2 spike protein.

  After this modified adenovirus is injected into someone’s arm, it enters the person’s cells. The cells then read the genetic instructions needed to make the spike protein and the vaccinated cells make and present the spike protein on their own surface. The person’s immune system then notices these foreign proteins and makes antibodies against them that will protect the person if they are ever exposed to SARS-CoV-2 in the future.Our daily newsletter

  The adenovirus vector vaccine is safe because the adenovirus can’t replicate in human cells or cause disease, and the SARS-CoV-2 spike protein can’t cause COVID–19 without the rest of the coronavirus.

  This approach is not new. Johnson & Johnson used a similar method to make its Ebola vaccine, and the AstraZeneca-Oxford COVID-19 vaccine is also an adenovirus viral vector vaccine.

  2. How Effective Is It?

  The FDA’s analysis found that, in the U.S., the Johnson & Johnson COVID-19 vaccine was 72% effective at preventing all COVID-19 and 86% effective at preventing severe cases of the disease. While there is still a chance a vaccinated person could get sick, this suggests they would be much less likely to need hospitalization or to die from COVID-19.

  A similar trial in South Africa, where a new, more contagious variant is dominant, produced similar results. Researchers found the Johnson & Johnson vaccine to be slightly less effective at preventing all illness there – 64% overall – but was still 82% effective at preventing severe disease. The FDA report also indicates that the vaccine protects against other variants from Britain and Brazil too.

  3. How Is It Different from Other Vaccines?

  The most basic difference is that the Johnson & Johnson vaccine is an adenovirus vector vaccine, while the Moderna and Pfizer vaccines are both mRNA vaccines. Messenger RNA vaccines use genetic instructions from the coronavirus to tell a person’s cells to make the spike protein, but these don’t use another virus as a vector. There are many practical differences, too.

  Both of the mRNA-based vaccines require two shots. The Johnson & Johnson vaccine requires only a single dose. This is key when vaccines are in short supply.

  The Johnson & Johnson vaccine can also be stored at much warmer temperatures than the mRNA vaccines. The mRNA vaccines must be shipped and stored at below–freezing or subzero temperatures and require a complicated cold chain to safely distribute them. The Johnson & Johnson vaccine can be stored for at least three months in a regular refrigerator, making it much easier to use and distribute.

  As for efficacy, it is difficult to directly compare the Johnson & Johnson vaccine with the mRNA vaccines due to differences in how the clinical trials were designed. While the Moderna and Pfizer vaccines are reported to be approximately 95% effective at preventing illness from COVID–19, the trials were done over the summer and fall of 2020, before newer more contagious variants were circulating widely. The Moderna and Pfizer vaccines might not be as effective against the new variants, and Johnson & Johnson trials were done more recently and take into account the vaccine’s efficacy against these new variants.

  4. Should I Choose One Vaccine Over Another?

  Although the overall efficacy of the Moderna and Pfizer vaccines is higher than the Johnson & Johnson vaccine, you should not wait until you have your choice of vaccine – which is likely a long way off anyway. The Johnson & Johnson vaccine is nearly as good as the mRNA-based vaccines at preventing serious disease, and that’s what really matters.

  The Johnson & Johnson vaccine and other viral-vector vaccines like the one from AstraZeneca are particularly important for the global vaccination effort. From a public health perspective, it’s important to have multiple COVID-19 vaccines, and the Johnson & Johnson vaccine is a very welcome addition to the vaccine arsenal. It doesn’t require a freezer, making it much easier to ship and store. It’s a one-shot vaccine, making logistics much easier compared with organizing two doses per person.

  As many people as possible need to be vaccinated as quickly as possible to limit the development of new coronavirus variants. Johnson & Johnson is expected to ship out nearly four million doses as soon as the FDA grants emergency use authorization. Having a third authorized vaccine in the U.S. will be a big step towards meeting vaccination demand and stopping this pandemic.

  Tyler Durden
  Mon, 03/01/2021 – 22:00

• 'Unwelcoming' Food Inflation Outpaces Incomes With Destabilization Risks For Emerging Markets
  ‘Unwelcoming’ Food Inflation Outpaces Incomes With Destabilization Risks For Emerging Markets

  Food prices are undeniably soaring faster than inflation and incomes around the world. As everyone’s favorite permabear, SocGen’s Albert Edwards, who, unlike Goldman, has already sounded the alarm on rising food inflation. 

  As a reminder, the Food and Agriculture Organization’s Food Price Index surged to a seventh consecutive month in December. 

  

  With the FAO food index rapidly rising, Edwards noted that “annual inflation in cereals reached 20%, the highest annual rise since mid-2011 when the Arab Spring was in full flow!.”

  

  With this in mind, tofu prices in Indonesia are 30% higher than it was in December. Brazilian prices of turtle beans are up 54% over the last year. Russians are paying 61% more for sugar than one year ago, according to Bloomberg. 

  Emerging markets are far less insulated from soaring raw commodity prices than developed economies. An unprecedented amount of fiscal and monetary policy by governments and respective central banks has flooded the world with liquidity. Edwards makes the point that expansive monetary policies by central banks, more importantly, the Federal Reserve, was to blame for the global tidal wave in food inflation back in 2011: “Despite Ben Bernanke’s denials that the Fed’s QE policies caused rampant food price inflation in 2011 (link), many economists such as myself believe that was absolutely the case.”

  Consumers in developed countries such as U.S., Canada, and Europe aren’t immune to rising food prices from pandemic-related disruptions (but increases aren’t as bad as EM countries at the moment). Kraft Heinz Co and Conagra Brand recently warned customers that surging prices of wheat, sugar, and other commodities would be passed onto customers. 

  Kraft Heinz CEO Miguel Patricio said inflation is everywhere in the agri complex.

  Patricio said inflation in “everything related to grains” is being observed, and it may result in price increases of some categories, including mac and cheese and mayonnaise, later this year. 

  

  “People will have to get used to paying more for food,” said Sylvain Charlebois, director of the Agri-Food Analytics Lab at Dalhousie University in Canada. “It’s only going to get worse.”

  Food inflation is never welcomed in economies because it can generate socio-instabilities. Prices of staples like grains, sunflower seeds, soybeans, and sugar show no signs of letting up. With global supply chain disruptions, volatile weather, and China increasing demand, food prices will likely remain elevated through 2021. 

  

  Food insecurity has become a significant issue for the US. The latest figures from Feeding America show 13.2 million Americans face missing meals due to mass layoffs and depleted savings as they struggle to survive. 

  Food Prices Are Soaring Faster Than Inflation and Incomes: BBG

  According to the Fed, this is only a problem for the 340 million people without access to the Fed charge card right @neelkashkari

  — zerohedge (@zerohedge) March 1, 2021

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  But more importantly, food price increases should be closely watched in emerging markets. 

  “I got a smaller piece of tempeh and tofu now, with the same price as last week,” said Rahayu, who goes by one name as many in Indonesia do, a 64-year-old grandmother in West Java province, noting that in recent weeks, the price of chili had more than doubled to 70,000 rupiah ($4.97) per kilogram. “I’m going to need to use less.”

  Countries like Russia and Argentina have put price curbs on certain staples and slapped tariffs on exports in their attempt to battle domestic food inflation. 

  For more color on what could be around the corner if food prices continue to rise – here’s what we said in early 2011, just as Arab Spring was unfolding… 

  The last time food prices hit ridiculous levels, the immediate outcome was global food riots in places such as Haiti and Bangladesh. Which is why distributors of riot equipment in the world’s poorest countries may be in for a bumper crop as the Food and Agriculture Organization has just announced that world food prices have just surpassed the previous record last seen in 2007-2008. But it’s ok: according to the centrally planning Chairman it’s all good, and the inflation is really just in our heads. After all, courtesy of the recent spike in mortgage rates, home prices now have about 10% to drop, meaning even less equity will be extracted from already substantially depressed food prices.

  This leads to the conclusion that rising food inflation could be enough to trigger social-instabilities in some emerging market economies – though which ones have yet to be determined. 

  Another lesson to be learned is that rising food inflation in modern markets and economies could be one of the best predictors of bond yields. 

  Tyler Durden
  Mon, 03/01/2021 – 21:40

• Japan Asks China To Stop Performing Anal Swabs On Its Citizens
  Japan Asks China To Stop Performing Anal Swabs On Its Citizens

  Authored by Paul Joseph Watson via Summit News,

  Tokyo has asked Beijing to stop performing COVID-19 anal swabs on its citizens after complaints that the procedure causes “psychological pain.”

  

  “Some Japanese reported to our embassy in China that they received anal swab tests, which caused a great psychological pain,” said Chief Cabinet Secretary Katsunobu Kato.

  China introduced the anal swab tests is several cities back in January, claiming that they are a more efficient and accurate way of detecting COVID-19.

  Last week, China denied that it had forced U.S. diplomats to undergo the anal swab procedure, with China’s foreign ministry spokesperson Zhao Lijian telling a press conference that “China has never required US diplomatic staff stationed in China to conduct anal swab tests.”

  However, workers told the U.S. State Department that they had been given the test, which involves inserting a cotton swab 3-5cm into the anus and gently rotating it to collect a sample.

  Much of China’s draconian response to the coronavirus pandemic, which included at one point welding people inside their own homes, has been praised by western media outlets.

  *  *  *

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

  Tyler Durden
  Mon, 03/01/2021 – 21:20

• Mortgage Market Turmoil Sparks Housing Boom Concerns
  Mortgage Market Turmoil Sparks Housing Boom Concerns

  The housing boom unleashed by the Federal Reserve during the pandemic was built on historically low mortgage rates (thanks Powell), low inventory, city-dwellers moving to rural areas, and remote-work phenomenon. In all, housing prices in 20 U.S. cities surged in December at the fastest pace since 2014 as mortgage rates fell to record lows. But a new rate regime is in town, one where bond traders are pricing in inflation as they believe the vaccine rollout and stimulus will lead to a sizzling economic recovery, one that could force the Fed to hike rates earlier (and more aggressively) than expected…

  

  …all of which has resulted in the latest treasury and mortgage bond rout. 

  If you called up your mortgage lender last week for a 30-year fixed loan, the rate was around 2.81% – this week, the rate jumped to 3.06% on Friday, the highest since August. Rates have been increasing since hitting a record low of 2.65% in early January. 

  

  Lewis Sogge, a senior loan officer at Freedom Mortgage, said the sudden jump in mortgage rates caught him “off-guard.” He anticipated the 30-year fixed loan rate to hover at January levels (2.65%) through the first half of 2021. 

  Since that’s not the case anymore, Sogge said his refinancing pipeline is already “drying up.” He warned the longer the 30-year fixed loan rate hovered above 3% – there was potential for more “upside in rates.” 

  Considering the latest housing rally mechanics, where people rushed into suburban homes using historically low mortgage rates in a low inventory environment, forced home prices sky-high. Rising borrowing costs could jeopardize the rally.

  Greg McBride, the chief financial analyst at Bankrate.com, said a rising rate environment could “downshift” the market from “red hot to merely sizzling.” He points out inventory remains how. 

  Rising rates are bad news for lenders who have been making hand over fist during the pandemic in a low rate environment. The latest mortgage applications collapsed to a nine-month low last week while pending home sales slumped to six-month lows. 

  

  “When combined with demand-fueled rising home prices and low inventory, these rising rates limit how competitive a potential homebuyer can be and how much house they can purchase,” Sam Khater, chief economist at Freddie Mac, said in a statement.

  The route in treasury and mortgage-backed bonds (MBS) has become more pronounced this week. Bloomberg explains: 

  “…Treasury yields — which strongly influence home-loan rates — suddenly rise sharply, many Americans lose interest in refinancing their old mortgages. A reduced stream of refinancings means mortgage-bond investors are left waiting for longer to collect payments on their investments. The longer the wait, the more financial pain they feel as they watch market rates climb higher without being able to take advantage of them.” 

  A rising rate environment means investors who hold MBS must reduce the risk of loans on their books to counter the damaging effects of slower loan prepayments, also known as “convexity hedging.”

  The spread for Fannie Mae’s 30-year current-coupon spread to the 5/10-year has blown out in the last couple of weeks – now around .8635 as the UST10Y surges above 1.50%. The reason for the blowout is that higher uncertainty surrounds the housing market when rates rise. 

  

  The Fed’s bubble-blowing in residential real estate during the pandemic was to create a wealth effect to offset the devastating blow the pandemic caused to the economy. In the process, these monetary magicians created soaring wealth inequality and housing affordability issues. 

  So in the meantime, inflation fears and Fed bluff-calling send sovereign rates higher, which in turn drives convexity hedging forcing mortgage rates to rise, jeopardizing the housing recovery (amid a collapse in affordability).

  Where is Powell??? 

  Tyler Durden
  Mon, 03/01/2021 – 21:00

• China Recovery Stalls – Global Recovery Doubts Emerge
  China Recovery Stalls – Global Recovery Doubts Emerge

  Authored by Daniel Lacalle,

  One of the key pillars of the consensus bullish view about 2021 is the Chinese recovery, supported by very optimistic estimates of growth in services and exports.

  The details in the official February Purchasing Managers’ Index (PMI) show a different picture. It seems that the data of the Chinese economy, especially in services and exports, is inconsistent with a 6% GDP growth as most analysts expect for 2021.

  February figures were surprisingly weak, especially because the majority of economists already expected a slowdown due to the holidays. The consensus message is that we should not worry about this, because the PMIs reflect an expected seasonal weakness and effects of the virus case increase before the Lunar New Year. However, those two factors were already embedded in consensus estimates.

  The official manufacturing PMI fell in February to 50.6 from 51.3 in January. A figure above 50 means expansion, and below, contraction. To see the manufacturing sector, key driver of the recovery in 2020, close to contraction even in the official figure, is a concern. This is a very large drop, significantly worse than the consensus average forecast of 51.0, at the lower end of economists’ forecasts.

  The non-manufacturing PMI, which includes construction and services, dropped to 51.4, below the consensus forecast of 52.0 and the lowest since March 2020 after the economy re-opened from the lockdown.

  

  What caused this slump?

  A drop in construction and a very poor reading of export new orders. The weak manufacturing and construction figures show that the “virtual” celebration of this year’s Lunar New Year holiday had a more negative effect than estimated.

  Something is wrong when an export-led economy shows a massive slump in orders in the middle of a global recovery. The new export orders index fell into contraction territory for the first time since September 2020.

  

  Two factors have affected the export orders’ weakness.

  The relative strength of the Yuan, which has reduced orders for the lower added-value products, and the rise in the input and output price PMIs, which shows that inflationary pressures remained elevated. We could also conclude that the European economy double-dip recession risk has affected orders.

  Even if we assume that some of these factors are temporary, one data point should cause alarm. Both the manufacturing and non-manufacturing employment components are in contraction, indicating job losses. An economy that sees a temporary and allegedly irrelevant slump in PMIs should not reflect employment destruction.

  The jobless recovery is an important risk all over the world. We are seeing a significant bounce in Gross Domestic Product (GDP) in many economies, but the figures of job creation and real wage growth are not just disappointing but concerning. Why? Because if jobs and disposable income do not recover faster, it will be difficult to see the big boom in consumption that so many economists rely on to justify the solid rise in economic growth for 2021.

  China’s weakness is much more than a Lunar Year celebration slump. It is evident that the 2020 recovery was more fragile than what most commentators suggested.

  Tyler Durden
  Mon, 03/01/2021 – 20:40

• Blinken Condemns China's Single Largest Mass Arrest Of Hong Kong Democracy Activists Yet
  Blinken Condemns China’s Single Largest Mass Arrest Of Hong Kong Democracy Activists Yet

  Over the weekend Chinese authorities launched a spate of arrests of Hong Kong pro-democracy activists over “conspiracy to commit subversion” related to initiatives to hold an unofficial primary election during the summer of last year. 

  Given that a whopping 47 mostly young activists were charged, it caught the attention of Washington. Secretary of State Antony Blinkin condemned the crackdown and urged their immediate release. “We condemn the detention of and charges filed against pan-democratic candidates in Hong Kong’s elections and call for their immediate release. Political participation and freedom of expression should not be crimes. The U.S. stands with the people of Hong Kong,” Blinken Sunday evening.

  It marks the single largest mass charge related to the sweeping national security law against Hong Kong’s opposition movement yet.

  

  Some of the details of the allegations were reviewed by the Associated Press as follows:

  The pro-democracy camp had held the primaries to determine the best candidates to field to win a majority in the legislature and had plans to vote down major bills that would eventually force Hong Kong leader Carrie Lam to resign.

  In January, 55 activists and former lawmakers were arrested for their roles in the primaries.

  Authorities said that the activists’ participation was part of a plan to paralyze the city’s legislature and subvert state power.

  In a separate interview Sunday with the Canadian Broadcasting Corporation Blinken described various options the administration has for punishing China over the rights violations, linking the Hong Kong controversy also with the plight of Uyghurs in Xinjiang province. 

  “First of all, it is really important to speak up, to speak out, and to do so with other countries who share our abhorrence at what is – what’s happening to Uyghurs in Xinjiang or, for that matter, what’s happening to democracy in Hong Kong,” Blinken said.

  We condemn the detention of and charges filed against pan-democratic candidates in Hong Kong’s elections and call for their immediate release. Political participation and freedom of expression should not be crimes. The U.S. stands with the people of Hong Kong.

  — Secretary Antony Blinken (@SecBlinken) March 1, 2021

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  “But in terms of practical measures, I think there are a number of things that can be done.  For example, countries should not be supplying any products or technology that can be used for the repression of people in China; for example, the Uyghurs,” Biden’s Secretary of State continued. 

  “Similarly, countries should look at making sure they’re not importing products that are made with forced labor.  Those are very practical things that countries can do and focus on to make sure that not only is our voice loud but our actions are too.”

  Meanwhile in a move seen as finally and fully cementing the mainland’s control over Hong Kong, China’s Communist Party is currently initiating reforms of the city’s electoral system. Early last week Xia Baolong, the director of China’s cabinet-level Hong Kong and Macau Affairs Office, said ‘election reform’ will “ensure that Hong Kong’s governance is firmly controlled by patriots.” 

  Just as it sounds, this is expected to be the final nail in the coffin in terms of the death of any level of true Hong Kong autonomy, ending what the national security law that was implemented in June 2020.

  Tyler Durden
  Mon, 03/01/2021 – 20:20

• "An Eye-Popping Decline" – US Mall Values Crash By A Record 60% In 2020
  “An Eye-Popping Decline” – US Mall Values Crash By A Record 60% In 2020

  The last time we saw some of the post-covid wasteland gripping the nation’s malls was back in November when we got a vivid reminder of what Bloomberg dubbed “carnage” among mall tenants as two major mall landlords filed for bankruptcy in one weekend, following their constantly growing list of bankrupt clients into Chapter 11 protection. The two mall REITs, Pennsylvania Real Estate Investment Trust and CBL & Associates Properties filed for Chapter 11 protection at the start of November, citing pandemic-induced pressures on their tenants and, by implication, themselves. Together the two REITs accounted for 87 million square feet of real estate across the U.S., according to court filings.

  However, despite occasional minor blowups, since late 2020, the mall sector had been relatively stable on the back of mandatory forebearance as well as Universal Basic Income courtesy of the government, which has seen Americans unleash record retail sales in recent months as the latest government stimulus checks were deposited, keeping malls alive in a state of suspended animation at least as long as the government’s generous payments keep coming in.

  Unfortunately, while there have been few “liquidity events” in a world where central planning by the government increasingly determines who lives another day and who have to file for bankruptcy today, the fundamentals of the mall sector have continued to collapse, and according to an analysis by Bloomberg, mall values in the US plunged an average 60% after appraisals in 2020, a sign of not only more pain to come for retail properties – even as the economy is reportedly recovering from pandemic-enforced lockdowns, and according to Goldman is even growing at the fastest pace on record…

  

  … but the clearest indication yet that a world of pain awaits the moment the government’s countless attempts to kick the can expire, and the sad reality of the US economy re-emerges front and center.

  About $4 billion in value was erased from 118 retail-anchored properties with commercial mortgage-backed securities debt after bad debt and payment delinquencies, defaults and foreclosures triggered property reappraisals.

  It gets worse: that average drop – which reflects the change in value since the debt was originated years ago, in many cases near all time high valuations – may in fact underestimate losses when the properties come up for sale, because so much retail real estate is in distress. And even worse: few buyers are willing to take risks on aging shopping centers as e-commerce continues to grab market share.

  “It’s an eye-popping decline,” Gwen Roush, an analyst with DBRS Morningstar rating service who tracks commercial real estate, said in an interview. “When we’re forecasting a loss on these malls, we’re even further haircutting that value.”

  And so, in anticipation of what will soon be the biggest market-clearing shock in mall history, the biggest owners, such as Simon Property Group, Brookfield Asset Management and Starwood Capital Group, have started to triage properties, walking away from money-losers while reinvesting in viable locations. Of course, the nightmare for US malls has long been coming with Amazon destroying brick and mortar outlets across the nation – covid only served as the last nail in the coffin: 

  Hard-hit centers were already decimated by department store bankruptcies and high vacancy rates, before Covid-19 accelerated Americans’ taste for online shopping. Vaccines and herd immunity are unlikely to lure visitors back to deserted gallerias perfumed with Cinnabon bakery treats.

  The hammer blow, when it comes, will be catastrophic: according to Floris van Dijkum, a real estate analyst with Compass Point Research & Trading, only about half of the 1,100 U.S. indoor malls have a good chance of survival. The strong will get stronger while the weakest face abandonment or worse, he said.

  “There’s a huge bifurcation between good and bad quality,” van Dijkum said. “By value, 80% is in the top 300 malls.”

  In anticipation of this D-Day when debts will finally have to be settled, Simon, the country’s largest mall owner, is working with loan managers to restructure debt on underperforming centers or hand back the keys. 

  “Hope to make deals in some,” Chief Executive Officer David Simon said on the company’s latest earnings call. “If not, then they will no longer be part of our portfolio and we wish that new owner the best of luck.”

  Simon’s Town Center at Cobb, outside Atlanta, which once appraised at $322 million received no bids at a courthouse foreclosure auction in February, according to a local news report. The company’s Montgomery Mall, near Philadelphia, was appraised at $61 million last year, a 69% drop from its 2014 value.

  For the few malls that sold, prices were down just 1.8% in January from a year earlier, data from Real Capital Analytics Inc. show. That’s because most of what traded was high-quality, according to Jim Costello, senior vice president at the research firm. It’s the bad ones that end up no bid.

  Some more optimistic mall sellers are waiting for the economy to recover before trying to unload properties, hoping for higher prices.
  Unibail-Rodamco-Westfield, owner of 37 U.S. shopping centers, said in its fourth-quarter earnings statement that it’s looking to 2022 to “significantly reduce our financial exposure to the U.S. when the investment market reopens.”

  Translation: we now know who the biggest bagholder is.

  Meanwhile, for many lower-end centers, the value is simply the cost of the land minus the cost of demolition, according to Costello.

  “The orange tile and brown carpeting is just going to be torn down and plowed under and eventually trade at a price someone can build something else there,” he said.

  Amid the growing desperation, several mall operators have sought to escape their debt burdens while vacancies rise and tenants withhold rents. It’s not working out too well: Washington Prime Group skipped a February interest payment and hired restructuring advisers. And, as noted above, Pennsylvania Real Estate Investment Trust and CBL & Associates Properties filed for bankruptcy last year.

  Meanwhile, the pent up defaults are piling up: debt management on about 17% of retail properties with CMBS loans has been transferred to workout specialists because of delinquencies or other financial issues, second only to hospitality properties, with 24.5% in special servicing, data from Trepp show. This means that sooner or later, there will be a burst of defaults once the dam doors open.

  Rating services have downgraded hundreds of bond tranches, many of them on mall debt, as concern rises that investors won’t get repaid, according to Roy Chun, senior managing director at Kroll Bond Rating Agency. It’s only a matter of time before the money stops flowing, he said.

  “It’s the sixth or seventh inning of a game,” Chun said. “But you already know the winner and the loser.”

  Tyler Durden
  Mon, 03/01/2021 – 20:00

• Third Woman Accuses Cuomo Of Sexual Harassment — And There's A Picture
  Third Woman Accuses Cuomo Of Sexual Harassment — And There’s A Picture

  Update (2005ET):  A third woman, former Obama administration and Biden 2020 campaign member Anna Ruch, has come forward to accuse New York Gov. Andrew Cuomo (D) of sexual harassment at a Sept. 2019 wedding reception, according to the New York Times.

  The governor was working the room after toasting the newlyweds, and when he came upon Ms. Ruch, now 33, she thanked him for his kind words about her friends. But what happened next instantly unsettled her: Mr. Cuomo put his hand on Ms. Ruch’s bare lower back, she said in an interview on Monday.

  When she removed his hand with her own, Ms. Ruch recalled, the governor remarked that she seemed “aggressive” and placed his hands on her cheeks. He asked if he could kiss her, loudly enough for a friend standing nearby to hear. Ms. Ruch was bewildered by the entreaty, she said, and pulled away as the governor drew closer.

  “I was so confused and shocked and embarrassed,” said Ms. Ruch, whose recollection was corroborated by the friend, contemporaneous text messages and photographs from the event. “I turned my head away and didn’t have words in that moment.”

  And there’s a picture… 

  Manhttps://t.co/ix3kHnDiMa pic.twitter.com/lFwCF1eQzm

  — Comfortably Smug (@ComfortablySmug) March 2, 2021

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  Ruch said Cuomo’s touch on her bare skin was uncomfortable, and “I promptly removed his hand with my hand, which I would have thought was a clear enough indicator that I was not wanting him to touch me.”

  Cuomo instead called her “aggressive” and placed his hands on her cheeks.

  “He said, ‘Can I kiss you?” claims Ruch. “I felt so uncomfortable and embarrassed when really he is the one who should have been embarrassed.”

  Shaken, Ms. Ruch said, she later had to ask a friend if Mr. Cuomo’s lips had made contact with her face as she pulled away. The governor had kissed her cheek, she was told.

  “It’s the act of impunity that strikes me,” Ms. Ruch said. “I didn’t have a choice in that matter. I didn’t have a choice in his physical dominance over me at that moment. And that’s what infuriates me. And even with what I could do, removing his hand from my lower back, even doing that was not clear enough.” -NYT

  Several days after the example, Ruch discussed the incident with a friend – texting the friend “I’m so pissed,” referring to Cuomo as “this guy,” with an un-reported epithet.

  As the Times notes, “Ms. Ruch’s example is distinct from those of the former aides: A former member of the Obama administration and the 2020 Biden campaign, Ms. Ruch has never been employed by the governor or the state. But her experience reinforces the escalating concerns and accusations about Mr. Cuomo’s personal conduct — a pattern of words and actions that have, at minimum, made three women who are decades his junior feel deeply uncomfortable, in their collective telling.”

  Has anyone heard from Women’s March of late?

  And will this young hotdog swallowing reporter come forward with her #MeToo moment before this is over?

  Creep https://t.co/cwTF8DEjIF

  — Sebastian Gorka DrG (@SebGorka) March 1, 2021

  Same energy. pic.twitter.com/AduXtUdK5u

  — Ian Miles Cheong (@stillgray) March 2, 2021

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  Cuomo’s numbers falling off a cliff pic.twitter.com/I2OiyUl3Vs

  — Will Chamberlain (@willchamberlain) March 2, 2021

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  Update (1755ET): New York Democrats are calling for Gov. Andrew Cuomo (D) to resign following two sexual misconduct allegations which followed a bombshell COVID-19 nursing home scandal, according to The Hill. A growing number of legislators and journalists, meanwhile, have come forward to accuse Cuomo of various bullying tactics.

  

  “There’s an ongoing pattern here of abuse of power. It’s making the working relationship with the governor a real distraction from the work we have to do for the people,” said state Assemblyman Angelo Santabarbara (D). “I firmly believe that the governor’s resignation is for the good of the state at this point.“

  

  Most legislators say Cuomo is almost certain to draw a strong primary challenger in 2022, if he decides to seek reelection to an unprecedented fourth term in office. But most also said they did not believe Cuomo would run for another term — and that if more allegations of improper behavior emerged, even finishing his current term may be a stretch.

  “The governor has had his time. Three terms is long enough,” said Assemblyman Thomas Abinanti (D), who represents Westchester County. “I believe that the governor should not be seeking a fourth term, and if any more complaints arise, he may not be able to finish this term.” –The Hill

  New York City Mayor Bill de Blasio said on Monday that the allegations against Cuomo are “Just disgusting, creepy,” adding later in the day “If someone purposefully tried to use their power to force a woman to have sex with them, of course that’s someone who should no longer be in public service.”

  Accuser Charlotte Bennett said in a Monday statement that Cuomo has yet to take responsibility for his actions.

  “It took the governor 24 hours and significant backlash to allow for a truly independent investigation. These are not the actions of someone who simply feels misunderstood; they are the actions of an individual who wields his power to avoid justice,” said Bennett.

  *  *  *

  Update (1525ET): The WSJ was incorrect in claiming Abramowitz was representing Cuomo’s office for his sexual harassment scandal, telling Bloomberg that he’s only representing the nursing home scandal.

  “My firm and I are representing the Executive Chamber on the Nursing Home matter. We have not been retained on the sexual harassment matter,” he said in an email.

  *  *  *

  New York Governor Andrew Cuomo’s administration has retained a prominent white-collar defense attorney following allegations of sexual harassment and Justice Department inquiries over COVID-19 nursing home deaths, according to the Wall Street Journal.

  

  Attorney Elkan Abramowitz – a former federal prosecutor – confirmed with the Journal that he is now representing Cuomo’s ‘executive chamber’, which includes the governor and his closes aides. Abramowitz is dealing with both scandals as New York Attorney General Letitia James joins the DOJ in investigating the embattled New York bigwig.

  

  The Democratic governor faces an investigation overseen by State Attorney General Letitia James into whether he sexually harassed women who previously worked in his administration. Mr. Cuomo acknowledged he had sometimes been overly personal while interacting with staff and said he was sorry if anyone mistook it for unwanted flirtation.

  Cuomo’s apology strategy is going well…. pic.twitter.com/lJ8OY3ORee

  — Jim Roberts (@nycjim) March 1, 2021

  Two women have accused Cuomo of sexual harassment ranging from inappropriate questions, to touching, to forcibly kissing. One accuser says Cuomo clearly wanted to sleep with her.

  Over the weekend, Cuomo denied forcibly kissing former aide Lindsey Boylan, who said the governor would also go out of his way to touch her “on my lower back, arms and legs.” He did, however, seemingly admit to using inappropriate language.

  Cuomo also said last week that the state is cooperating with three inquiries from the US Attorney’s Office in the Eastern District of New York located in Brooklyn, as well as the DOJ’s Civil Rights and Civil divisions based in Washington. Brooklyn prosecutors have requested data on the number of people who died in New York nursing homes during the pandemic.

  Meanwhile, the governor has stepped out of the public spotlight – last making a televised pandemic briefing on Feb. 19, while his public schedule remains empty according to Bloomberg.

  Cuomo’s uncharacteristic silence comes a day after he agreed to an independent probe by a special investigator after a second former aide accused him of sexual harassment. Cuomo stopped short of having New York Attorney General Letitia James lead the probe, a move championed by dozens of other lawmakers.

  …

  On Monday, state Senator Todd Kaminsky introduced a bill that would allow the attorney general to conduct a criminal investigation without a referral from the governor, a move he said would strengthen independent oversight of the governor and other state officials.

  “Clearly where the governor is involved there is a conflict,” said Kaminsky.

  Veteran Democratic consultant Hank Sheinkopf told Bloomberg: “The problem is he’s being squeezed on the left and the right, and if there are more accusations of sexual harassment or governmental incompetence or corruption, he’s going to have a very difficult time surviving,” adding “He has very few friends.“

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  Tyler Durden
  Mon, 03/01/2021 – 19:59

• 'Ultra-Millionaire' Tax Proposed By Warren And Other Progressives
  ‘Ultra-Millionaire’ Tax Proposed By Warren And Other Progressives

  In a move that surely won’t send hundreds of billions of US dollars offshore, Senator Elizabeth Warren and Reps. Pramila Jaypal (D-WA) and Brendan Boyle (PA) have proposed an “Ultra Millionaire” tax, which would siphon 2% of the annual value of households and trusts valued at between $50 million and $1 billion. Wealth over $1 billion would be taxed at 3%.

  

  This would mean House Speaker Nancy Pelosi (D-CA) would cough up roughly $2.25 million per year on her estimated $114 million net worth. Congress’s wealthiest person, Sen. Mark Warner (D-VA) would owe $4.3 million per year. Jeff Bezos, the world’s richest man (again), would owe $5.5 billion per year, while many others on the world’s wealthiest list also reside in the United States and would cumulatively owe tens of billions more.

  According to Americans for Tax Fairness, the plan would have raised $114 billion in 2020 from the country’s 650 billionaires.

  

  On Monday, the lawmakers said the act would create a “fairer” economy.

  “The ultra-rich and powerful have rigged the rules in their favor so much that the top 0.1% pay a lower effective tax rate than the bottom 99%, and billionaire wealth is 40% higher than before the COVID crisis began,” said Warren. “A wealth tax is popular among voters on both sides for good reason: because they understand the system is rigged to benefit the wealthy and large corporations.”

  That said, this may be nothing more than more virtue signaling from Warren and her comrades, given the slim majority Democrats hold in the Senate.

  A wealth tax would be difficult to pass in the current U.S. Senate, which is evenly divided between Democrats and Republicans. Democrats control the agenda, since Vice President Kamala Harris can break ties, but most bills require support from 60 senators to advance.

  And Democrats have been unable to muster even 50 votes from some administration proposals, including a $15 hourly minimum wage. A wealth tax likely would be even more divisive. -Bloomberg

  That said, Dems are planning to use the ‘reconciliation’ budget procedure to pass a massive infrastructure package which will require only a simple majority. Bloomberg suggests that once the infrastructure package is on the table, taxes to pay for it would come into focus – “And under Senate rules, tax increases generally are allowed in budget bills.”

  Co-sponsors of the bill include Budget Chairman Bernie Sanders (I-VT), Sheldon Whitehouse (D-RI), Jeff Merkley (D-OR), Brian Schatz (D-HI), Ed Markey (D-MA) and Mazie Hirono (D-HI).

  Once wealth taxes are normalized, we can only imagine how low Democrats will go with income brackets.

  Tyler Durden
  Mon, 03/01/2021 – 19:40

• Taibbi: In Defense Of Substack
  Taibbi: In Defense Of Substack

  Authored by Matt Taibbi via TK News,

  UCLA professor Sarah Roberts, co-leader of something called the UCLA Center for Critical Internet Inquiry – media critics whose stated goal is “strengthening democracy through culture-making” – went on a lengthy Twitter tirade against Substack last night, one that gained a lot of attention.

  

  I should probably respond since, as one prominent reporter put it to Glenn Greenwald and me this morning, “Shit, it’s like she wrote this for the two of you.”

  The main thread:

  “Great!” you say! Journalism needs to be disrupted!”

  But here’s the problem. Journalists make their name doing reporting. This is governed by norms and practices and by ethics. Flawed and not always achieved, true. But present and guiding what newsrooms do in every way? Yes.

  — Dr. Sarah T. Roberts (@ubiquity75) February 28, 2021

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  What is much less obvious to them is what it means when there is a reporter who makes her name in a newsroom — traditional paper or fully online outlet — and then leaves for Substack (or any analog). Taking that name, reputation earned from work done in the context I just stated.

  — Dr. Sarah T. Roberts (@ubiquity75) February 28, 2021

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  In this way, an investigative reporter who has earned her bona fides in a newsroom and under both strict editorial AND journalistic principles, has just cashed out and turned herself into an opinion writer. She likes it because she’s finally got her independence from an editor.

  — Dr. Sarah T. Roberts (@ubiquity75) February 28, 2021

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  Please, do not write for or pay for Substack. I have to say it. I believe it’s dangerous. Take heed. You read it here first.

  — Dr. Sarah T. Roberts (@ubiquity75) February 28, 2021

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  A few thoughts in response to what one Tweeter humorously described as “the Tipper Gore of 2021,” who incidentally went on to make sure everyone understood she wasn’t talking “about Substack for basket weaving or 30 Rock fandom or whatever.” No, Dr. Roberts was “talking about stuff purporting to be serious. Opinion can be serious but I believe lines are being intentionally blurred BY SUBSTACK.”

  Roberts is making a “stolen valor” argument. As it’s abundantly clear she’s talking about people like myself and Greenwald in particular, she’s arguing that we made our names as reporters in the structure of traditional newsrooms, taking advantage of “norms and practices” like fact-checking and editing that, in her mind, is what first induced readers to trust us. Then we took that trust, that precious thing nurtured in the cradle of mainstream media oversight, absconded with it, and fled to Substack, to hoard unearned profits.

  Roberts has things reversed. Greenwald and I (as well as many other prominent Substack writers) got our start as independents. He was a blogger and I edited my own print newspapers. We both built substantial readerships on our own before being scooped up by “traditional” news organizations, in a process identical to the one Roberts denounces when done by Substack.

  The experience of independent media — where I did feature reporting that ranged from participatory gigs like laying bricks in Siberia to wiretapping Vladimir Putin’s chief of staff — was where I first learned that audiences will read you or not based upon how careful and accurate you are. To imply that trust is a thing that can only be conferred by a mainstream newsroom is beyond insulting, especially since mainstream news organizations already long ago started to become infamous for betraying exactly those hallowed “norms” to which Roberts refers.

  Why did a source like former NSA contractor Edward Snowden choose to come forward to Glenn Greenwald in particular? He surely wasn’t bothered by the fact that Glenn didn’t come up through the ranks of a paper like the New York Times or Washington Post.

  The answer connects to one of the primary reasons audiences are moving to places like Substack: the perception that traditional news outlets have become tools of the very corporate and political interests they’re supposed to be overseeing. Roberts complains about lines between opinion and reporting being blurred at Substack (an absurd comment on its own, but that’s a separate issue), but the “blurring” problem at those other organizations is far more severe. Are newspapers like the New York Times checks on power, or agents of it?

  Why didn’t Snowden go to one of the big names at the Times? Could it be because one of the senior Times editors back then, Dean Baquet — now the chief — reportedly once killed a whistleblower’s story about a surveillance arrangement between AT&T and the NSA? Or because the Times had a history of sitting on damaging intelligence stories, including one about an analyst who doubted the existence of Iraqi WMDs that the paper held until after the 2003 invasion?

  It was bad enough when the traditional newsrooms Roberts so esteems near-universally swallowed the WMD lie, but the real kicker was when the worst offenders in that episode were promoted, and given the helm at major magazines and journalistic supertankers like the Times. What signal does that send to audiences?

  Because this is not a bug but a feature, these same types of errors have been repeated over and over, to the point where papers like the Times and the Washington Post eventually became little more than conduits for anonymous intelligence sources spouting unconfirmable fairy tales like the pee tape. The major “traditional” cable networks, as well as many of the bigger daily newspapers, have for years now been engaged in mad hiring sprees of ex-spooks, putting whole nests of known perjurers and Langley goons on their payrolls as contributors, where they regularly provide “commentary” on news stories in which they themselves have involvement. And Roberts wants to lecture us about “disclosure of compromise”?

  In the last four years especially, a rift has formed in the news business, an argument primarily about method and approach. Some of us were raised to think the reporter’s job is confined to gathering information and giving it to readers, who should then be free to do with it what they will. A lot of journalists raised in this school were trained to be terrified in the days (and, especially, the nights) after publication, in case a mistake surfaces, but to stop worrying after that.

  A new approach, symbolized by a Times column four years ago called “Trump Is Testing the Norms of Objectivity in Journalism,” stresses choosing and presenting information in such a way as to ensure that audiences make the “correct” political decision with the news they’re given. The fear there is more about impact: are people taking the news the right way?

  This argument over method put many journalists in a bind. Some either had to get on board with what they considered a perversion of the job, or they had to find some other place to go. I didn’t have this problem to the degree that many of the other Substack writers did, but avoiding arguments on this score was certainly a factor in my decision to move here last year. The situation was a lot more overt with some of the other Substack writers, especially with Greenwald.

  When Glenn wanted to do a story about censorship of the New York Post expose on Hunter Biden suppressed by Facebook and Twitter — like me, he didn’t think the story itself was necessarily that important, but the suppression of it was — he was told by editor Betsy Reed that “even if [the story] did represent something untoward about Biden,” that would “represent a tiny fraction of the sleaze and lies Trump and his cronies are oozing in every day.” In other words, in order for the story about Biden to be newsworthy, it had to meet a bizarre worseness standard vis-à-vis Donald Trump.

  Another editor more or less openly demanded that any story Greenwald did on the subject address the issue of “Russia’s hand.” This was a spook-driven conspiracy theory, for which no evidence has ever existed, that the Post expose was Russian propaganda. Virtually every “reputable” outlet ran with the story of intelligence officials saying the piece had “all the earmarks of a Russian disinformation campaign.” Asserting without evidence that even a mildly damaging article about a presidential candidate is foreign misinformation is an ethically dubious endeavor in the best of cases, especially just before an election. But these are the “norms” whose valor Roberts believes we are stealing.

  Worse, as I’ve repeatedly pointed out in reported pieces on this site, the new “norms” in the business have disincentivized traditional outlets to care about accuracy, leading to huge quantities of mistakes. When news agencies see their jobs as being primarily about politics, they become more concerned with being directionally right than technically accurate, knowing among other things that their audiences will forgive them for being wrong, so long as they’re wrong about the “right” targets.

  As a result, many reporters by last summer found themselves navigating newsrooms where they were being discouraged, sometimes openly, from pursuing true stories with the “wrong” message — the health impacts of the BLM protests, speech controversies in science and media, follow-up news about once-bombshells like the Cambridge Analytica scandal or “Bountygate.” Many of those people weren’t politically conservative at all (in fact, often quite the opposite). They’d just been trained to do the job in a more dispassionate way, and were being pushed by an increasingly monolithic newsroom culture to run with simplistic, hot-taking versions of the news (as one reporter put it, describing the BLM protests, “I’m sympathetic, but every story had to be Viva la revolución”). The choice for many of these people was to go along, or get out, and where a lot of them got out was to Substack.

  Lastly, as to the charge that those of us who’ve moved to Substack have cashed out on reputations as reporters to become mere opinion writers:

  Even when I was given generous deadlines at Rolling Stone to investigate arcane financial topics, I was doing opinion writing for them online at the same time, presumably to help them pay the bills. The National Magazine Award I won there was for commentary, not reporting. Personally, I think opinion writing is a form of journalism, but even if it were not, it’s simply not accurate to say people like me are pulling a bait-and-switch by moving from the Ivory Tower of Legacy Media reporting to “dirtier” commentary on Substack. You want “dirty” commentary? How about Rachel Maddow speculating that Russia might turn off the heat in the Dakotas?

  5/ Who could forget that time this past winter when you seized on life-threatening cold temperatures to fear-monger that Russia could kill Americans by knocking out their heat?pic.twitter.com/deo2H4SBBQ

  — Aaron Maté (@aaronjmate) April 28, 2019

  Substack is not all op-ed writing. I wrote two heavily-researched books on Substack, one (Hate Inc.) about the media business, and the other (The Business Secrets of Drug-Dealing) a collaboration with a never-caught dealer. I also published multiple lengthy reported features about the CARES Act bailout, later wrote up an account from a whistleblower in the Russiagate story, and collaborated with a stringer in Ukraine to check facts and do on-the-ground interviews about the Hunter Biden story (which, again, I concluded was less important than its suppression). I’ve been experimenting with regular reported features about criminal courts, student loans, finance, and a topic Roberts professes to care about, Internet censorship — where I may be the only journalist in the country with an ongoing beat interviewing people removed or suspended from tech platforms. I’m bringing in videographers to make short and long features.

  In short, I’m trying hard to prove that the subscriber concept can work as a viable alternative to the corporate press, which has become increasingly, arrogantly dysfunctional as traditional competition in the form of local newspapers and urban alt-weeklies has died out. None of us has the formula nailed yet, but the notion that the handful of us who are trying comprise a “threat to journalism” is elitist insanity of the highest order.

  This is a small island of pushback in a vast sea of hackery, and I’d laugh about it, if I didn’t know for certain that sooner or later, these petty Twitter outbursts and snarky features in places like the New Yorker will eventually turn into full-on boycott campaigns, to protect the poor artisans at shops like NBC, CNN, and the New York Times. It’s coming, and we should all prepare for it.

   

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  Tyler Durden
  Mon, 03/01/2021 – 19:20

• Team Biden Starts Its First Talks With Taliban By Sending Trump-Appointed Envoy
  Team Biden Starts Its First Talks With Taliban By Sending Trump-Appointed Envoy

  In a hugely significant example of Biden saying with his actions that essentially ‘Trump had it right’ on Afghanistan – the White House has confirmed it’s sending top negotiators to the Middle East to continue peace negotiations with the Taliban which had controversially started as part of Trump’s Afghan withdrawal plan.

  For the first time in the Biden administration it will send US Special Representative for Afghanistan Reconciliation Zalmay Khalilzad to the region, who crucially had been Trump’s longtime special representative that secured a breakthrough on peace talks with the Taliban.

  

  “Khalilizad will resume discussions on the way ahead with the Islamic Republic and Afghan leaders, Taliban representatives, and regional countries whose interests are best served by the achievement of a just and durable political settlement and permanent and comprehensive ceasefire,” a White House statement said Sunday. 

  Based on a deal signed under Trump in February 2020, US troops were to be fully withdrawn from America’s longest running war in history in May 2021; however, in the first month of the Biden White House the Pentagon said this would not happen based on the Taliban failing to uphold key terms it agreed to.

  “The Taliban have not met their commitments,” Pentagon spokesperson John Kirby told a Jan.28 press briefing.

  

  “Without them meeting their commitments to renounce terrorism and to stop the violent attacks on the Afghan national security forces, and by dint of that the Afghan people, it’s very hard to see a specific way forward for the negotiated settlement,” Kirby had said.

  It was during that briefing that the Biden administration first signaled it planned to carry on with Trump’s policy of dealing directly with the Taliban. The two sides mostly met in Qatar.

  Discussions with #Taliban and others about #Afghanistan involving @US4AfghanPeace to resume, announces @StateDept. pic.twitter.com/C54pS1QWQC

  — Steve Herman (@W7VOA) March 1, 2021

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  Kirby said at the time that while the “goal” remained a full and timely US troops exit from Afghanistan, he underscored “we’re going to be making our decisions in a sober, rational manner that is driven by what’s in our best interests and the interests of our partner in Afghanistan, as well as our NATO partners and allies.”

  Tyler Durden
  Mon, 03/01/2021 – 19:00

• Deutsche Bank: Central Banks Simply Can't Afford Higher Rates With Global Debt So High
  Deutsche Bank: Central Banks Simply Can’t Afford Higher Rates With Global Debt So High

  By Jim Reid, chief credit strategist at Deutsche Bank

  My theme this year has been that it’s going to be very complicated for financial markets with volatility high. The forces working in both directions (high growth and stimulus versus inflation and higher yields) are huge and both sides will dominate for periods causing us to move between extremes. There is little doubt that US growth is going to be very strong with our economists upgrading Q4/Q4 2021 growth to 7.5% last week.

  With inflation this could mean nominal GDP getting close to 10%. The last time we were in double digits was the early 1980s. With these sort of numbers it has always seemed unlikely that bonds would have a calm low yield, low vol year. Even if growth and inflation eventually roll over in 2022 and 2023 we are not going to know for a few quarters yet. In addition without knowing who is going to win the mid-terms we can’t be sure that the Democrats aren’t going to dip into the fiscal well a few times more before the next Presidential election. When I talked about the inflation picture slowly turning before the pandemic, the major reason was that I thought we were moving more towards a helicopter money / MMT world and away from fiscal austerity. The pandemic has accelerated this and a Blue Wave has picked up the baton in its crest.

  In risk, while many sectors and areas will benefit more from strong growth than lose out from higher yields, there is no doubt that some areas (eg US equities) are more exposed to secular growth (eg tech) than before and these have massively benefited from ultra low yields. This is a sizeable and influential part of the market.

  Having said all this, there is little doubt in my mind that central banks will eventually lean quite hard against a sustained rise in yields. They simply can’t afford to see it happen with debt so high.

  

  So far though, Fed officials have been largely relaxed over the recent moves, suggesting that it reflects more positive economic growth. But as it all happened so fast last week they will have had a chance to regroup and align their message for this week.

  I’ll end this yield discussion by quoting my colleague Francis Yared (head of rates strategy) who said that the recent move had probably “happened too fast, but did not go too far”. He thinks that the (mildly so far) dysfunctional nature of the repricing should lead to some level of central bank intervention. It would make sense for the Fed to push back against front-end (up to Dec-22) pricing and the ECB to lean against the rise in longer-term real rates. However, from a medium-term perspective, the absolute level of yields is not too high given reflation proxies, the prospects for reopening and US fiscal policy

  Tyler Durden
  Mon, 03/01/2021 – 18:40

• Biden To Impose Navalny & SolarWinds Related Sanctions On Russia This Week
  Biden To Impose Navalny & SolarWinds Related Sanctions On Russia This Week

  Biden is expected to roll out with sanctions this week penalizing Putin’s government for the alleged poisoning of Kremlin opposition leader Alexey Navalny. CNN cited two admin officials to say it will “happen in coordination with the European Union” but is still being “fleshed out by US and EU officials in the coming days.”

  The officials said it’s part of Biden seeking to send a “strong message” to Russia as well as China and others that they can’t violate human rights with impunity.

  

  Last month cities across Russia were hit by large, well organized and closely reported mass demonstrations in support of the jailed Kremlin critic, recently sentenced to 2.5 years in prison on a prior probation violation.

  Currently all “options” for sanctioning Russia are said to still be under review ahead of the impending announcement, which can include the following:

  The package proposed three types of sanctions: Magnitsky Act sanctions on the individuals who detained Navalny; sanctions under the Chemical and Biological Weapons Control and Warfare Elimination Act of 1991 (CBW Act); and sanctions under Executive Order 13382 — which is “aimed at freezing the assets of proliferators of weapons of mass destruction and their supporters,” according to the State Department.

  And further according to the latest CNN reporting, “One option being discussed is an executive order focused on Russia which would trigger sanctions on the country for multiple assaults on US democracy and American personnel — including the SolarWinds hack and the bounties put on US soldiers in Afghanistan — in one package, one official explained.”

  

  White House press secretary Jen Psaki previously said that Biden’s “intention was also to make clear that the United States will act firmly in defense of our national interests in response to malign actions by Russia.”

  Both the administration and the media are also now hyping that Biden’s “tough” stance on Russia stands in contrast to Trump’s handling of Moscow – despite the fact that Trump controversially ended cooperation on things like landmark arms control agreements, and further opened up Washington’s ability and that of US companies to send arms to Ukraine. 

  Tyler Durden
  Mon, 03/01/2021 – 18:20

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