Sep 02

Today’s News 2nd September 2022

  • Victor Davis Hanson: The Mysteries Of Long-COVID
    Victor Davis Hanson: The Mysteries Of Long-COVID

    Authored by Victor Davis Hanson,

    When the original strain of COVID-19 arrived in spring 2020, a pandemic soon swept the country.

    By far most survived COVID. But hundreds of thousands did not. American deaths now number well over 1 million.

    Amid the tragedy, there initially was some hope that the pernicious effects of the disease would all disappear upon recovery among the nearly 99% who survived the initial infection.

    Vaccinations by late 2020 were promised to end the pandemic for good. But they did not. New mutant strains, while more infectious, were said to be less lethal, thus supposedly resulting in spreading natural immunity while causing fewer deaths from infection.

    But that too was not quite so.

    Instead, sometimes the original symptoms, sometimes frightening new ones, not only lingered after the acute phase, but were of increased morbidity.

    Now two-and-a-half years after the onset of the pandemic, there may be more than 20 million Americans who are still suffering from what is currently known as “long COVID” – a less acute version but one ultimately as debilitating.

    Some pessimistic analyses suggest well over 4 million once-active Americans are now disabled from this often-ignored pandemic and out of the workforce.

    Perhaps 10-30% of those originally infected with COVID-19 have some lingering symptoms six months to a year after the initial infection. And they are quite physically sick, desperate to get well, and certainly not crazy.

    So far, no government Marshall plan exists to cure long COVID.

    While we know the nature of the virus well by now, no one fathoms what causes long COVID’s overwhelming fatigue, flu-like symptoms, neuralgic impairment, cardiac and pulmonary damage, and an array of eerie problems from extended loss of taste and smell to vertigo, neuropathy, and “brain fog.”

    “Post-viral fatigue” has long been known to doctors. Many who get the flu or other viruses like mononucleosis sometimes take weeks or even months to recover after the initial acute symptoms retire.

    But no one knows why long COVID often seems to last far longer and with more disability.

    Is its persistence due to one theory that SARS-CoV-2 is a uniquely insidious, engineered virus? Or do vaccines and antivirals only help to curb infection, while possibly encouraging more unpredictable mutations?

    Who gets long COVID, and why and how is, to paraphrase Winston Churchill, “a riddle, wrapped in a mystery, inside an enigma.”

    Those who nearly die from acute COVID-19 can descend into long COVID. But then again so can those with minimal or few initial acute symptoms.

    The obese with comorbidities are prone to long COVID, but triathletes and marathon runners are, too.

    The elderly, the mature, the middle-aged, adolescents and children can all get long COVID. Those with down-regulated and impaired immune systems fight long COVID. But then again so do those with up-regulated and prior robust immunity, as well as people with severe allergies.

    Since early 2020, no one has deciphered the cause, although numerous Nobel Prizes await anyone who unlocks its mysteries.

    Does a weakened but not vanquished SARS-CoV-2 virus hide out and linger, causing an unending immune response that sickens patients?

    Or does COVID-19 so weaken some long-haulers to the degree that old viruses, long in remission, suddenly flare up again, sickening the host with an unending case, of say, mononucleosis?

    Or is the problem autoimmunity?

    Is there something unique to the nature of COVID-19 that damages the vital on-and-off buttons of the immune system, causing the body to become stuck in overdrive, as it needlessly sends out its own poisons against itself?

    Without knowledge of what explains long COVID, it is hard for researchers to find a cure.

    After all, is the answer to slow down the immune system to dampen the immune storm, or to enhance it to root out lingering viruses?

    Do more vaccines help or worsen long COVID?

    Is the solution some magical new drug, or discovering off-label uses of old, reliable medicines?

    Can a good diet, moderate exercise and patience finally wear out long COVID? Or is its course too unpredictable or near permanent and chronic?

    Is long COVID a single phenomenon, or a cluster of maladies, each manifesting according to one’s own genetic makeup, particular history of past illness, and unique reaction to the initial infection?

    If we have few answers, we do have an idea about the costs.

    Long COVID may be one of many reasons why in a recession, labor paradoxically still remains scarce. Millions likely stay home in utter disbelief that they are still battling long COVID. Others isolate in deadly fear of getting either the acute or chronic form of the illness.

    The social costs to America of this hidden pandemic in lost wages and productivity, family and work disruption, and expensive medical care are unknown.

    But they are likely enormous, still growing – and mostly ignored.

    Tyler Durden
    Fri, 09/02/2022 – 00:00

  • New Video Of Titanic Wreckage Reveals "Dramatic Evidence Of Decay"
    New Video Of Titanic Wreckage Reveals “Dramatic Evidence Of Decay”

    OceanGate Expeditions released a new, high-resolution video of the RMS Titanic wreckage in 8K resolution, revealing an astonishing level of detail and colors of the vessel that sunk more than a century ago. 

    “The amazing detail in the 8k footage will help our team of scientists and maritime archaeologists characterize the decay of the Titanic more precisely as we capture new footage in 2023 and beyond,” Stockton Rush, Presiden of OceanGate Expeditions. 

    “Capturing this 8K footage will allow us to zoom in and still have 4K quality which is key for large screen and immersive video projects. Even more remarkable are the phenomenal colors in this footage,” said Rush. 

    “In comparing footage and images from 2021, we do see slight changes in certain areas of the wreck. Our science team will be reviewing the 8k, 4k, and other footage captured during the 2022 Titanic Expedition for any changes,” he said. 

    “We are seeing new details in this footage. For example, I had never seen the name of the anchor maker, Noah Hingley & Sons Ltd., on the portside anchor. I’ve been studying the wreck for decades and have completed multiple dives, and I can’t recall seeing any other image showing this level of detail,” Rush continued. 

    This first-of-its-kind footage provides “dramatic evidence of decay” observed on and around the Titanic. 

    In 1912, the Titanic was considered not only the largest passenger ship in the world, but it was the largest ship ever built. On its maiden voyage across the Atlantic Ocean towards New York City on April 14, the vessel struck an iceberg. 

    Watch the full video here: 

    After more than 110 years, sitting 12,000 feet below sea level, some scientists have suggested the wreckage could all but disappear by 2030 due to “hungry” bacteria in the ocean.

    Tyler Durden
    Thu, 09/01/2022 – 23:40

  • America's Secret Government By Proxy
    America’s Secret Government By Proxy

    Authored by Kelly Offield via The Mises Institute,

    Security state agencies must justify their existence.

    There are 1,271 counterterrorist, homeland security, and intelligence organizations; 1,931 private sector analogues; 10,000 locations of these organizations; and ~854,000 people with top-secret security clearances as of 2010. To make matters worse, the line between private and public is obscure in this industry.

    This massive effort requires massive tax collection. Since government endeavors do not compete and do not participate in reciprocal exchanges, then they have no profit-and-loss test to determine if their efforts are worth the money taken from citizens. Additionally, since only the free market can determine prices, government endeavors must continually disseminate propaganda to convince citizens that the endeavor is useful.

    Interestingly, officials in this industry have explicitly admitted that reports from government agencies are not trusted by the public, so the tactful solution is to hire someone to produce those reports that would have otherwise been produced by the government agency itself. Since security state agencies cannot produce evidence that their services are needed, they hire private businesses and nonprofits to disseminate their propaganda for them.

    Naturally, the need to justify the existence of government—propaganda—evolves into techniques to disseminate that propaganda in addition to censoring opposition to it. Therefore, a proxy government is established—a front for the actual government to do what it wants to do but otherwise cannot. This also sets the stage for information control:

    How to control Information:

    1. Stop ideas (censorship)

    2. Force other ideas (redirection)

    3. Justify this control (propaganda)

    The US government has incentivized a group of organizations to do just that. “Big tech censorship” and other control measures were not the result of free-market phenomena.

    The think tanks that refer to themselves as “counter-violent extremists” (CVEs) are America’s proxy government responsible for censoring, shadow banning, ad feed tampering, search result manipulation, and “racism/extremism” deception.

    Our Proxy Government

    The suppression of dissent is not new for American regimes, but in the modern era it is referred to as “content moderation.” The dissemination of propaganda is not new either, but modern techniques have adapted and are referred to as “redirection” or “CounterSpeech initiatives.”

    Both are defended by the intelligence agency conglomerate USAID (United States Agency for International Development) and the Department of Homeland Security (DHS):

    The School of Communication at American University will define and describe the growing threat of violent white supremacist extremist disinformation, evaluate attitudinal inoculation as a strategy for communication to combat the threat, and develop a suite of operational tools for use by practitioners and stakeholders. With commitment and support from Google Jigsaw, American University will develop evidence-based methods for undermining the persuasive appeal of disinformation-based messaging and facilitate on- and offline inoculation campaigns. (DHS)

    American University partnered with the pioneer of modern censorship software—Google’s Jigsaw—to tamper with ad feeds so that American University content was placed in front of targeted users. The intention was for the content to appear organic (a paid advertisement or legitimate search result). The state-funded American University cites the Center for Strategic and International Studies to support its claims, despite the fact that the center has a record of making claims without datasets or transparent methodologies. The justifications for much of it, the arbitrarily defined “white supremacy” has a statistically zero threat level.

    In further defense of redirection, USAID argues that “CVE programs are most effective when they are tailored and focused, often at a hyper-local level.” (Translation: propaganda works best when we can pinpoint individual users online via surveillance campaigns and CVE software.)

    The DHS uses the appeal to authority fallacy when using phrases like “credible voices” instead of presenting or citing real evidence. Of course, the authoritative figures are Facebook and Twitter representatives.

    Meanwhile, the Council on Foreign Affairs (CFA) states that the top terrorist threat “is domestic rather than foreign,” yet Far Right extremism in North America causes less deaths than lightning strikes. Despite the insignificance of North American Far Right extremism, the White House insists on these CVE lies:

    Biden directed his national security team to lead a 100-day comprehensive review of U.S. Government efforts to address domestic terrorism, which has evolved into the most urgent terrorism threat the United States faces today … the Biden Administration is releasing the first-ever National Strategy for Countering Domestic Terrorism to address this challenge to America’s national security (White House)

    Again, phrases like “expert assessment” are frequently used by the White House report rather than citations containing evidence. The White House also claims that the

    two most lethal elements of today’s domestic terrorism threat are (1) racially or ethnically motivated violent extremists who advocate for the superiority of the white race and (2) anti-government or anti-authority violent extremists, such as militia violent extremists. (White House)

    Jigsaw was only able to find thirty-five former white supremacists globally. Jigsaw has access to data on billions of users via Google and YouTube’s data advantages. These meager findings did not deter the administration’s appeals to emotional arguments with anecdotes of extremism. Merely four instances of domestic terrorist attacks are used across a twenty-six-year period (in a country of 340 million), and the Capitol Hill instance was one of the four.

    That is four instances across twenty-six years in a country of 340 million.

    The White House article argues that LGBTQI+ communities are targets of violence, yet any “crime data” I have found that supports this narrative is selective polling from left-leaning sources, like ConnectFutures, NPR, and Media Diversity Institute. Opinion polling is not crime data.

    Even the “rise” in Asian hate crime was a fabricated myth by a state-funded CVE out of California and staunch advocate of Marxism.

    If Government Grants You a Part of Its Tax Revenue to Perform Its Tasks, Are You a Government Official?

    The Department of Homeland Security granted $10 million to the private sector CVE community in 2017 in which $568,000 was granted to American University. Recall that AU content is built into Google’s search function, meaning it has become a feature of Google Search products. The intelligence and CVE communities label nonparticipating competitors (like Parlor or Brave) as extremist-infested for not having services; albeit manipulative services.

    In other words, this funding resulted in a feature on Google’s platform—a feature that Google did not have to fund itself. Google’s competitors, who are not afforded this privilege from the state, are then slandered by the state for not having it. Similar situations have occurred on Facebook, Twitter, and other platforms.

    As another example, the DHS granted $750,000 to the Life After Hate group who partnered with Moonshot and Facebook, to manipulate users into far leftism online. The collaboration resulted in a redirection service to Facebook’s search function and ad “service.”

    The DHS granted $121,000 to Prevention Through Education, a social policy–based group with a critical theory (Marxist) foundation.

    There was a total of $77 million in the overarching CVE grant program:

    The Department of Homeland Security (DHS) has designated “Domestic Violent Extremism” as a National Priority Area within the Department’s Homeland Security Grant Program, which means that over $77 million will be allocated to state, local, tribal, and territorial partners to prevent, protect against, and respond to domestic violent extremism…. The Department of Defense (DOD) is incorporating training for service members separating or retiring from the military on potential targeting of those with military training by violent extremist actors. (White House)

    The CVE community is the proxy government in charge of what ideas are acceptable, what ideas are not, and how to enforce those judgments with software and techniques. This community does what the security apparatus wishes to do but cannot do directly.

    Tyler Durden
    Thu, 09/01/2022 – 23:20

  • China's Top Developer Warns Property Crisis Has "Slid Rapidly Into Severe Depression"
    China’s Top Developer Warns Property Crisis Has “Slid Rapidly Into Severe Depression”

    China hit an ominous milestone this week as one of the largest property developers reported a 96% profit drop, blaming a “severe depression” in the real estate market where “only the fittest can survive,” reported WSJ. 

    Garden Holdings Co.’s first-half earnings crashed the most since its 2007 listing in Hong Kong as the housing market crisis worsened. It said preliminary net profit collapsed from $2 billion to just $88 million in the first six months. 

    Alarm is spreading in China as the once robust property market is at risk of collapse. The Guangdong-based company warned demand is slipping and property values are sliding: 

    “All these exert mounting pressure on all participants in the property market, which has slid rapidly into severe depression. The harsh business environment in which only the fittest can survive means even higher requirements for businesses’ competitive strength.”

    On Aug. 15, Fitch Ratings and Moody’s Investors Service slashed Country Garden’s outstanding debt rating from investment grade to junk. What’s different about this developer is that it focuses on low-income housing, where buyers have been more susceptible to financial troubles amid the economic slowdown. 

    Shares of Country Garden are down more than 66% this year, while most of its offshore bonds are trading south of 50 cents on the dollar. 

    China’s housing market has been a major driver of growth over the last quarter century and is one of the biggest asset classes in the world, with a notional value of between $55 trillion and $60 trillion. Its size outpaces the capitalization of the US stock market. 

    Warning signs emerged last year when the second biggest developer, Evergrande, couldn’t repay its offshore, dollar-denominated debt. It appears debt contagion has spread from Evergrande to not just Country Garden but dozens of other developers: 

    “More than 30 Chinese real-estate companies, including China Evergrande Group and Sunac China Holdings Ltd., have already defaulted on their international debt,” WSJ said. 

    The bleak outlook for property markets came as zero-Covid lockdowns and snarled supply chains had strangled economic activity across the world’s second-largest economy. 

     “The real estate market is undergoing a cruel and drastic reshuffling process,” Midea Real Estate Holding Ltd., another Chinese developer, said, adding it would “forge ahead in a tough way.” 

    China’s deflating property bubble has also sparked discontent among households. There have been reports this summer that some homeowners have stopped paying mortgage payments on at least 100 projects in more than 50 cities because many who bought new construction units at the highs have seen values plunge, setting up for what appears to be a debt jubilee as non-payment could spread to the broader financial system as countless mortgages default. 

    There’s reason to believe China’s real estate crisis is far from over, as noted by Country Garden Chief Financial Officer Wu Bijun:

    “The home market hasn’t entirely bottomed out, and the sector’s consolidation isn’t over. Property sales nationwide still haven’t stabilized.”

    A weakening economy could exacerbate things for property developers, and perhaps the reports of a national bailout fund to finance stalled real-estate projects is Beijing’s attempt to keep the music going. 

    So what happens if China can’t stop the economic hemorrhaging? 

    Taiwan’s Foreign Minister Joseph Wu warned back in 2019 that if a slowdown in China gets too “serious,” then “We need to prepare ourselves for the worst situation to come … military conflict.”

    Tyler Durden
    Thu, 09/01/2022 – 23:00

  • California Billboards Don't Tell The Whole Story
    California Billboards Don’t Tell The Whole Story

    Authored by John R. Lott Jr. via RealClear Politics,

    A lot of people are moving out of California. Over the last two years, California has lost about 300,000 people. Major companies, including Telsa, Oracle Corp, and HP have abandoned California for Texas. With high taxes, lots of regulations, high crime, poor schools, mishandling of the pandemic, and “woke” policies, it isn’t surprising that many people have been willing to give up the beautiful state and fantastic weather.

    Understandably, some are upset with that turn of events, but the billboards put up in Los Angeles and San Francisco are a cheap shot. They warn Californians about mass public shootings in Texas, specifically pointing to the recent Uvalde school shooting. The billboards warn, “The Texas Miracle died in Uvalde.” They replace Texas’ slogan, “Don’t Mess With Texas,” with “Don’t Move to Texas.” 

    The billboards have received extensive national and international news coverage. But California, despite all its gun control laws, has more mass public shootings than Texas.

    A mass public shooting is an attack where four or more people are murdered. It must occur in a public place and cannot involve some other crime such as a robbery or a gang fight over drug turf. Since 2000, when California enacted its major assault weapons ban, the state has experienced 10 such attacks. In Texas, over that time, there were six.  Since 2010, California has had eight attacks and Texas, five.

    Even when you adjust for California’s larger population, California has more mass public shootings per capita than Texas does. On a per capita basis, California has had 18% more since 2010.

    By the way, Texas’ violent crime rate has also been lower than California’s in five of the last six years. The Houston Chronicle speculates that the billboards may be paid for by “right-leaning Texans eager to keep liberal Californians away from their voting booths.”

    That’s ridiculous. More likely, liberal Californians are trying to stem the flow of California ex-pats, or are simply playing partisan politics. This summer, Gov. Gavin Newsom has already launched attacks on Texas gun control laws. On July 22, 2022, Newsom took out full-page ads in three Texas newspapers, attacking Texas Gov. Greg Abbott on guns and abortion. Newsom claimed that, unlike Texas, “California can ban deadly weapons for war and save lives.”

    Just nine days before Newsom’s ads, the Associated Press’ highly influential Stylebook opposed the use of the term “assault weapon.” It acknowledges that semi-automatic guns aren’t actually weapons of war.

    “The preferred term for a rifle that fires one bullet each time the trigger is pulled, and automatically reloads for a subsequent shot, is a semi-automatic rifle,” the AP accurately summarizes. “An automatic rifle continuously fires rounds if the trigger is depressed and until its ammunition is exhausted. Avoid assault rifle and assault weapon, which are highly politicized terms that generally refer to AR- or AK-style rifles designed for the civilian market, but convey little meaning about the actual functions of the weapon.”

    Eighty-four handguns and a similar number of rifles are semi-automatics for a reason. Semi-automatic weapons are needed to protect people and save lives. Single-shot rifles that require manual reloading after every round may not do people a lot of good. The first shot may miss, or there may be multiple attackers.

    At a May press conference addressing the Uvalde murders, Gov. Abbott said that stricter gun control laws, such as those in California, are “not a real solution” to ending mass shootings. Assault weapons bans do nothing to prohibit the vast majority of semi-automatic guns, so it is little wonder that banning “assault” rifles does nothing to stop crime.

    Under the 1994-2004 federal assault weapons ban, there was no drop in the number of attacks with “assault weapons,” and virtually no change in total mass shootings. The misinformation persists. First lady Jill Biden still called AR-15s “machine guns” at a Democratic National Committee fundraiser in Massachusetts after the AP’s statement.

    Texans aren’t running around with machine guns. Many Californians who want safety would be well advised to leave their state.

    John R. Lott Jr. is the president of the Crime Prevention Research Center and the author of “More Guns, Less Crime.”

    Tyler Durden
    Thu, 09/01/2022 – 22:40

  • August Payrolls Preview: "Sweet Spot Is 0-100K… Negative Print And Stocks Will Soar"
    August Payrolls Preview: “Sweet Spot Is 0-100K… Negative Print And Stocks Will Soar”

    While there is a wide range of forecasts for tomorrow’s payrolls print (see below), the median Street consensus expects the rate of payrolls growth to resume cooling in August, following a blowout month in July. The jobless rate is expected to hold steady, and there will be focus on the rate of participation after a decline last month. Average hourly earnings metrics will be a key focus to help gauge how surging consumer prices are translating into second-round effects and the wage-price spiral; some gauges suggest that the rate of pay rises is now exceeding the Fed’s preferred measures or inflation.

    As Newsquawk notes, the Fed is yet to show signs that it is relenting in its fight against inflation, and is expected to keep tightening policy to put a lid on prices, even if that means stunting economic growth, although a big jobs drop will promptly force Powell to reverse once the Karen Liz Warrens of Congress start calling him every 5 minutes. Markets currently expect a 75bps rate hike at the September 21st FOMC, but officials have been suggesting that the CPI data due on September 13th could provide a more influential steer.

    Here are the key median forecasts summarized:

    • +298K headline print (Goldman at +350k) vs +528k prior, even though the Household Survey has shown far weaker numbers and there is a non trivial chance we may get a 100k or lower print if the Establishment Survey catches down (as we explained here)
    • Unemployment rate of 3.5% (GIR 3.4%, prior 3.5%),
    • Average Hourly Earnings 0.4% vs 0.5% prior and 5.3% Y/Y.
    • Goldman writes, that August seasonal factors have evolved favorably in recent years, and the bank’s forecast assumes positive residual seasonality worth roughly +150k (mom sa).

    In terms of market reaction, as Goldman trader John Flood writes, “we are still in a bad is good and vice versa set up for US stocks as Fed has made it clear that they want to see some froth exit the labor market in tandem with cooling inflation: i) Strong print here will clearly make 75bps much more likely on 9/21; ii) Inline print of 300k(ish) will keep pressure on this tape…anything close to last month’s shocking print of 528k would lead to real risk unwind into the wknd (I think at least a 200bp sell off). iii) Sweet spot for stocks tomorrow is a 0 – 100k headline reading…should get a 100+bp rally for S&P in this scenario after this recent drawdown. If we happen to get a negative number an even sharper rally”, and the pivot will be right back on the Q1 calendar.

    What do others think? Here is a snapshot of tomorrow’s payrolls forecast by bank (higher to lower):

    • Pantheon 400k
    • BNPP 375k
    • Wells 375k
    • TD 370k
    • GS 350k
    • MS 350k
    • BofA 325k
    • Citi 305k
    • Credit Suisse 300k
    • DB 300k
    • HSBC 300k
    • JPM 300k
    • SocGen 300k
    • UBS 300k
    • Nomura 290k
    • StanChart 275k
    • Jefferies 270k
    • Evercore 250k
    • ING 250k
    • Mizuho 250k
    • Natwest 200k
    • Pictet 160k

    Some more observations on what to expect tomorrow, courtesy of Newsquawk:

    Headline to resume cooling: After a blowout jobs report in July, where almost all measures surprised to the upside, analysts are expecting the cooling in payroll growth to resume in August, with the consensus view looking for 300k nonfarm payrolls to be added; this would be lower than the prior 528k, the 3-month average of 437k, the 6-month average of 465k, and the 12-month average of 512k. This week, the White House said it was expecting the rate of payroll additions to “cool off a bit” into a “more stable and steady” growth rate as the economy “transitions”. Fed officials have also been talking about how some cooling of the labor market would be welcomed, as alluded to in its recent meeting minutes. The ADP’s new gauge of its National Employment also alludes to this theme, and reported that 132k private payrolls were added to the economy in August, against expectations for 288k (July’s reading was stated as 270k), although analysts have still expressed some scepticism around the data series.

    Unemployment Rate Seen Steady: The jobless rate is expected to remain at the post-pandemic low of 3.5% (which was also the level of unemployment seen in February 2020, before the impact of the pandemic began hitting the labour market). The decline in the participation rate in July may have contributed to the fall in unemployment (this was perhaps the only ‘blip’ in last months’ data), but other gauges of the labour market (the July JOLTs figures, for instance) continue to allude to extremely tight conditions. NOTE: the Fed’s June forecasts (which will be updated at the September 21st FOMC) projected that the jobless rate will tick up to 3.7% by the end of this year, rising to 3.9% in 2023, before again rising to 4.1% in 2024, above the Fed’s longer-run estimate of 4.0%.

    Policy Implications: Money markets are currently suggesting that there is a greater chance that the FOMC will raise interest rates by 75bps at the September 21st meeting rather than a smaller 50bps increment. The Fed has said that its policy on rate changes is data-dependent. This will be the final jobs report before the September confab, but there is still the US CPI report, due September 13th, that could influence officials’ view; indeed, Fed’s Mester, who votes on policy this year, said she’d be basing her decision on the inflation data, not the jobs report. That could mean that any market reaction to the data would be subject to revision based on the incoming CPI metrics. That said, the average hourly earnings measures will still provide some insight on how inflation dynamics are feeding through into second-round effects.

    Wage Inflation: The wages metrics will be looked at by traders to gauge how surging (and broadening) consumer prices are translating into second-round effects; the consensus looks for average hourly earnings of +0.4% M/M in August, easing from the +0.5% pace in July, but the annual rate is still expected to climb by one-tenth of a percentage point to 5.3% Y/Y, while average workweek hours are seen unchanged at 34.6hrs. The ADP’s revamped National Employment Report said that the median change in annual pay was running at a rate of +7.6% Y/Y for job-stayers, and +16.1% Y/Y for those who had switched jobs – those rates are higher than the current level of average hourly earnings in July, as well as both the rate of headline and core PCE prices, the Fed’s preferred gauges of inflation (which were respectively 6.3% Y/Y and 4.6% Y/Y in the latest data for July). Fed officials have been emphasizing that the fight against inflation is not complete, refusing to overread into some nascent signs that the surge in consumer prices is peaking; many believe that the central bank will be comfortable in firing another large rate rise, particularly if other growth dynamics continue to hold up in Q3.

    Arguing for a better-than-expected report (from Goldman):

    • Seasonal Factors: According to Goldman, the August seasonal factors have evolved favorably in recent years, with an August month-over-month hurdle for private payrolls of -315k in 2021 and -326k in 2020 compared to -54k in 2019 and -126k in 2017 (which unlike 2019 was also a 4-week August payroll). The BLS seasonal factors appear to be overfitting to the reopening-related job surges in June and July of both 2020 and 2021. Goldman’s forecast assumes positive residual seasonality worth roughly +150k (mom sa). This compares to a seasonality headwind of around 100k in the previous report.

    • Big Data. High-frequency data on the labor market were generally strong in August, with increases across all four measures  tracked.

    • Job availability. The Conference Board labor differential—the difference between the percent of respondents saying jobs are plentiful and those saying jobs are hard to get—remained elevated, edging down by 0.2pt to +36.6. JOLTS job openings surprised to the upside, increasing by 199k in July to 11.2mn to a very elevated level.

    Arguing for a worse-than-expected report:

    • August slowdown effect. Payrolls have exhibited a tendency toward weak August first prints, which may reflect a recurring seasonal bias in the first vintages of the data. August job growth has decelerated in 8 of the last 10 years relative to the first-print July reading, with an average slowdown of 167k (and by 40k during the pre-pandemic decade, 2010-2019). Softness in the first vintage also tends to manifest in many of the same industries—including manufacturing, professional services, retail, and information. However, consensus may already reflect this tendency with its 230k forecasted deceleration.
    • ADP. Private sector employment in the ADP report increased by 132k in August, below expectations for 325k. The ADP data adopted a new methodology in August, and while the updated series shows a strong correlation with BLS private payrolls over the full sample (+0.90 since 2010, mom sa), the relationship has broken down over the last year (correlation = -0.04), as shown in Exhibit 3. The ADP measure has also understated private payroll growth by 97k on average over the last year, including by 203k in July (+268k vs. +471k in the official measure).
    • Employer surveys. The employment components of business surveys generally decreased in August. Our services survey employment tracker decreased by 0.3pt to 53.2 and our manufacturing survey employment tracker decreased by 0.6pt to 54.6.
    • Job cuts. Announced layoffs reported by Challenger, Gray & Christmas rebounded 8.1% month-over-month in August, after decreasing 15.1% in July (SA by GS).

    Last but certainly not least, after touting for months the strong employment numbers as a way to deflect criticism of soaring inflation, the White House on Tuesday warned that the numbers released later this week by the Labor Department will likely show a job markets that is “cooling off.” White House press secretary Karine Jean-Pierre said the slower hiring pace is a sign that the economy is “in transition.”

    “It is going through a transition from the historic economic growth that we saw last year to a more stable and steady growth and that is kind of important to note,” she told reporters aboard Air Force One.

    “We are expecting job numbers to cool off a bit as we are going into transition. We are expecting job numbers to not be at the high growth rate,” she Pierre continued. But will they be low enough to turn negative and send futures limit up…

    Tyler Durden
    Thu, 09/01/2022 – 22:21

  • The "Experts" Still Aren't Giving Up On Vaccine Mandates
    The “Experts” Still Aren’t Giving Up On Vaccine Mandates

    Via The Mises Institute,

    [Dr. Gilbert Berdine of the Texas Tech University Health Sciences Center and Ryan McMaken discuss the policy makers’ justifications for vaccine mandates over the past two years. Will any of these policy makers admit to any mistakes?]

    Ryan McMaken: The Centers for Disease Control and Prevention (CDC) earlier this month greatly scaled back its recommendations for quarantine and social distancing. It also now makes the same recommendations “regardless of vaccination status.” In other words, the CDC now apparently does not regard vaccinated people as any less a public health risk than the unvaccinated. What does this tell us about where we are right now with the value of vaccination mandates as public policy at this point?

    Dr. Gilbert Berdine: The vaccine mandates were based on assumptions. It was assumed that the vaccine prevented infection and transmission of virus. The mandates were justified as protection of vaccinated people from the unvaccinated. The new CDC policy recognizes that this assumption was incorrect. The CDC concedes that natural immunity from prior exposure to the virus is at least as effective as vaccination in preventing subsequent infection. The CDC concedes that vaccinated people are at least as likely to spread disease as unvaccinated people. The new policy also recognizes that at this point in time the vast majority of people have been exposed to viral antigen either by natural exposure or vaccination. Given our current knowledge about covid-19, the CDC can no longer justify a vaccine mandate at present based on protecting the public from unvaccinated people.

    RM: Yet, the US government is still imposing vaccine mandates. The US military bureaucracy is still threatening to force out service members who refuse vaccination, and tennis player Novak Djokovik apparently can’t enter the country without proof of vaccination. What is the scientific basis for this?

    GB: There is no scientific basis for a vaccine mandate. Unvaccinated people pose no risk to vaccinated people. The CDC admits this to be the case. The only possible justification for a vaccine mandate is a paternalistic argument that people need to be protected from their own decisions. Free people should not be treated as pets. This leads into the next question as to whether there is scientific evidence that the vaccine saves lives.

    RM: In the past, you have noted that the public health benefit of the mandates has always been very limited, and an enormous number of vaccine doses has been necessary to prevent a small number of deaths. Is this still the case?

    GB: I have previously noted that a very high number of vaccinations were required to prevent a single death when the vaccines were first made available based on the original Pfizer trials. The efficacy of the vaccine in preventing hospitalization from covid, ICU care for covid, and deaths attributed to covid has declined over time, so the number to vaccinate to prevent a death are higher than when I reported on this issue. At the time the vaccines were introduced, the risks were unknown given the small number of people in the trials. We now have data on adverse events from the vaccine. The VAERS database was created to detect adverse events from new vaccines that were missed during initial trials. Yet, the overwhelming signal coming from the VAERS database has been ignored. The life insurance industry has made public that deaths in 2021 were far above expectations from actuarial data. The CDC reports large numbers of excess deaths in 2021 that have persisted during 2022. These excess deaths cannot be explained by covid infection. Respiratory deaths have been average ever since approximately July 2020. It is cardiovascular deaths that are unexpectedly and unexplainably high. These cardiovascular deaths include strokes, heart attacks, sudden deaths attributed to arrhythmias, and congestive heart failure including unexpected cases of myocarditis. There have been numerous claims that the vaccines are responsible based on regression of mortality rates vs. vaccination rates. The CDC has the data to either confirm or reject the vaccine as a cause of the excess deaths, but the CDC refuses to release the data to the public.

    RM: Now that the Pfizer and Moderna vaccines have been around for nearly two years, has the federal government shown any interest in evaluating the efficacy of these vaccines or the problem of side effects? Surely, we know much more now, but do you think the federal government give a fair hearing to negative information about the effects of the mandates?

    GB: The control group in the original vaccine trials were eliminated after 90 days. Everyone in the trial received the vaccine. There is no control group to monitor for long term adverse events. The excess deaths in 2021 that have persisted into 2022 are probably the biggest medical story at the current time, yet the CDC seems uninterested in finding an explanation. The CDC has the data that would either confirm or exclude the vaccine as the cause of these excess deaths, yet the CDC refuses to release this data. In my opinion, both the CDC and the Food and Drug Administration have failed to be scientific organizations that protect the public from medical harm. Both organizations have become political in nature. This was a criticism of public funding of scientific research made by John Galt in the novel, Atlas Shrugged, and the prediction has become reality.

    RM: Within the medical community, is it possible to criticize the mandates? One heard very little dissent on this in 2020. Is it possible to dissent more now?

    GB: It is very risky for anyone in the medical community to criticize any aspect of covid policy. This includes mask policy, alternative therapies, vaccine mandates, or quarantines. Licensing boards, including the American Board of Internal Medicine, have threatened physicians with the loss of licensure for spreading “disinformation” about covid-19. Of course, disinformation has nothing to do with correct or incorrect information, but rather means anything that contradicts a political narrative. The practice of medicine is gradually being transformed from a scientific inquiry seeking fact into a religious cult accepting dogma under the threat of excommunication.

    Tyler Durden
    Thu, 09/01/2022 – 22:00

  • Russian 'De-Dollarization' Escalates: Begins "Strategic" Plan To Buy Billions In "Friendly" Currencies
    Russian ‘De-Dollarization’ Escalates: Begins “Strategic” Plan To Buy Billions In “Friendly” Currencies

    Ever since March 2018, when Moscow dumped practically all of its US Treasury holdings, Russia has been at the forefront of a global process of ‘de-dollarization’. Practically speaking, reducing the nation’s dependence on the global hegemon’s control of payments and thus everything else.

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    China joined the fight more recently but has been increasing its gold reserves while reducing its US Treasury reserves quite consistently for over two years.

    Of course, all of that ‘normal’ process has been thrown into chaos since Putin invaded Ukraine with sanctions, bans, and virtue-signaling by Washington curb-stomping the freedoms of many so-called ‘friendly’ nations to Russia (and some un-friendly who simply prefer to feed/heat/cool their citizenry than fall in line).

    Since the invasion, the ‘Ruble is rubble’ narrative has been crushed after initial weakness in the Russian currency reversed to massive strength amid soaring energy prices (and energy-for-Rubles agreements)…

    All of which brings us to a stunning new report from Bloomberg that Russia is considering a plan to buy as much as $70 billion in yuan and other “friendly” currencies this year to slow the ruble’s surge.

    “In the new situation, accumulating liquid foreign exchange reserves for future crises is extremely difficult and not expedient,” a presentation on the proposal prepared for the meeting said.

    For years, the Kremlin contained spending and saved hundreds of billions in dollars, euros and other foreign currencies as a cushion to insulate the economy from the ups and downs of oil prices.

    “The frozen $300 billion were of no help to Russia; on the contrary, they became a vulnerability and a symbol of missed opportunities,” the presentation said, in a rare official admission of the true impact of sanctions.

    Bloomberg saw a copy of the document, which isn’t public, and the people familiar with the meeting confirmed its authenticity. The government and central bank didn’t immediately respond to requests for comment on the plan.

    According to people familiar with the deliberations who spoke on condition of anonymity to discuss matters that aren’t public, the plan won initial support at a special “strategic” planning meeting of top government and central bank officials including Governor Elvira Nabiullina on Aug. 30.

    With earnings from exports of oil and gas flooding in and driving the current account surplus to a record this year and pushing the ruble higher, the proposal calls for spending 4.4 trillion rubles ($70 billion) to buy the currencies of “friendly” countries, mostly yuan…which it has been gathering for a couple of years…

    Alexander Isakov, Bloomberg’s Russia economist noted that “the purchases will help Russia cap unprecedented real-exchange-rate strength, which is hurting exporters and the budget’s commodity revenues. For neutral countries, these purchases will bring some support for local currencies, help fix their current account issues and help fund commodity imports.”

    So, as CFR senior fellow Brad Setser notes, the Russian Central Bank could become the first big central bank to hold the bulk of its reserves in emerging market currencies.

    Currencies of ‘friendly’ currencies like offshore Yuan, Turkish Lira, and India’s Rupee all caught a bid on the report earlier in the day.

    As Ruchir Sharma recently noted, reflecting on the false security many are getting from seeing a strong dollar, the impact of US sanctions on Russia is demonstrating how much influence the US wields over a dollar-driven world, inspiring many countries to speed up their search for options. It’s possible that the next step is not towards a single reserve currency, but to currency blocs.

    Setser adds that “the real lesson of Russia isn’t about the dollar (or euro).  It is that excess reserve holdings of all G-7 currencies may not be as strategically valuable as thought.“

    As Banque de France noted in a July article, recent geopolitical tensions have put the hegemonic role of the dollar, and its potential demise, back into the spotlight. Looking at a new long run measure of global currency competition over two centuries, no global currency leader has been able to sustain such a large lead over its competitors for such a prolonged period.

    Remember, nothing lasts forever…

    Since the 15th century, the last five global empires have issued the world’s reserve currency – the one most often used by other countries – for 94 years on average. The dollar has held reserve status for more than 100 years, so its reign is already older than most.

    Tyler Durden
    Thu, 09/01/2022 – 21:40

  • Biden Goes All Out, Warns Of Grave Threat Posed By "MAGA Forces"
    Biden Goes All Out, Warns Of Grave Threat Posed By “MAGA Forces”

    Update (2127ET): President Biden gave an angry speech Thursday night in which he framed Republicans as election-denying ‘extremists’ who pose a threat to democracy and need to be fought tooth and nail.

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    Tucker sums it up perfectly:

    Meanwhile, who thought this was a good aesthetic for the ‘uniter in chief’? 

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    With midterms right around the corner, President Biden is now warning of the threat posed by “MAGA forces,” according to excerpts published earlier on Thursday.

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    Biden’s overall message, just days after he described Trump supporters as “ultra-MAGA Republicans” and “semi-fascists,” will be that democracy is at risk from Trumpism.

    “It’s not just Trump, it’s the entire philosophy that underpins the — I’m going to say something — it’s like semi-fascism,” Biden said during a speech last week in Rockville, MD. “Trump and the extreme MAGA Republicans have made their choice: to go backward, full of anger, violence, hate and division. But we’ve chosen a different path: forward, the future, unity, hope and optimism.”

    So, that’s the Democrats’ messaging going into midterms – while they finalize a deal with Iran and the IRGC (officially a terrorist organization) – that Republicans who aren’t Liz Cheney or Adam Kinzinger are a threat to democracy.

    Watch:

    Nevermind the ‘mostly peaceful’ riots staged every summer by Democrats and their Antifa foot-soldiers during every summer of Trump’s presidency.

    Tyler Durden
    Thu, 09/01/2022 – 21:27

  • Quantum Computing As Important As The Atomic Bomb: Expert
    Quantum Computing As Important As The Atomic Bomb: Expert

    Authored by Andrew Thornebrooke and Tiffany Meier via The Epoch Times (emphasis ours),

    Chinese tech giant Baidu is developing its own quantum computer to compete with the United States in the race toward next-generation information processing. The computer does not outperform rivals currently being developed in America but, according to one expert, signals dire competition over the future of data security.

    A 3D Illustration of a futuristic computer processor. (James Thew/Adobe Stock)

    Arthur Herman, a senior fellow at the conservative think tank Hudson Institute, said that Baidu’s recently announced quantum effort fell short of similar efforts being made by companies like Google and IBM.

    “This quantum computer that they’re touting has only 10 qubits, and that’s a pretty small number,” Herman said during an Aug. 29 interview on the “China in Focus” program on NTD, a sister media outlet of The Epoch Times.

    “Google’s Sycamore quantum computer has 60 Plus qubits. IBM’s is upwards of 70 qubits.”

    A quantum bit, or qubit, is a basic unit of quantum information used by quantum computers. Whereas traditional processors use regular bits, which can be turned on or off to create binary code, qubits can be turned on, off, or both on and off simultaneously in a phenomenon known as superposition.

    The existence of this third state will allow quantum processors, theoretically, to achieve much quicker processing speeds than their traditional counterparts.

    Governments and companies alike are thus rushing to develop quantum computing in order to be the first to achieve data dominance, as such quick processing speeds could allow for the mass decryption of current security measures. However, the real-world applications of the technology are still only very limited.

    Herman, who directs the Hudson Institute’s Quantum Alliance Initiative, said that that limited usefulness now belied the world-changing implications of quantum technology. Moreover, he said, the race toward revolutionary quantum capabilities could hit a breakthrough at any time.

    “There’s too many indications that with one or two major breakthroughs, at the conceptual level [or] at an engineering level, that suddenly the process will take [a] much shorter time than even the experts have wanted to predict,” Herman said.

    “It will be easy for such a device to decrypt all of the existing public encryption systems. In other words, such a device will be able to wipe out any kind of encryption that currently exists today in order to extract whatever kind of data, classified or otherwise, that it wants to get its access to.”

    That possible capability is what makes the technology so prized among the nations of the world, and why the United States and China are competing to deploy it before the other.

    “Right now, it’s nothing that we really have to worry about,” Herman said. “It’s an indication that the United States … [is] still very much ahead in the race towards developing a large-scale quantum computer.”

    “The fact that we have a lead doesn’t necessarily mean we’re going to win,” Herman added. “It’s like the hare and the tortoise. We’re like the hare, we’ve sprinted ahead … but the Chinese are moving ahead toward us, slowly but surely.”

    A seven-cubit quantum device is seen at the IBM Thomas J. Watson Research Center in Yorktown Heights, N.Y., on Feb. 27, 2018. (Seth Wenig/AP Photo)

    ‘As Important as the Manhattan Project’

    While Baidu’s recently announced quantum computer is only 10 qubits, the company claims to have also developed a 36 qubit chip. IBM, meanwhile, has said that it hopes to develop a 4,000-cubit quantum computer by 2025.

    For his part, Herman said that the 10,000 or more qubits needed for codebreaking efforts to really begin would likely not happen until sometime in the 2030s.

    “People are beginning to realize that what seemed to be a threat far off [on] the horizon is actually a lot closer than we had thought,” Herman said.

    “What you’re talking about is the ultimate weapon in cyber warfare that could come as a result of the race that we’re engaged in with China towards a quantum computer.”

    Herman said that the unstable timeline to develop next-generation quantum technologies was one problem. Another, he said, was developing adequate security protocols for when that technology arrives. Predicting what quantum cyberwarfare will look like is difficult, he said.

    Read more here…

    Tyler Durden
    Thu, 09/01/2022 – 21:20

  • US Base Tasked With Confronting China Ordered To Stop Using Gender Pronouns
    US Base Tasked With Confronting China Ordered To Stop Using Gender Pronouns

    The already increasingly woke US military is going even woker, moving closer to adopting “preferred pronouns” – a trend which has become dogma a fixture of progressive university campuses, according to an internal memo from US Pacific Air Forces (PACAF).

    The Washington Free Beacon this week published a screenshot of a PACAF memo circulated among commanders which advises a shift to more neutral language, especially when writing reports, directives, and in daily on-the-job speech. While this order applies to a specific Air Force major command, the instance strongly suggests this is the path all armed forces branches could soon take in the coming months or years.

    The partial copy of the internal memo, which was circulated in the form of an email this past May, says: “In accordance with the Diverse PACAF priority, ‘We must embrace, promote and unleash the potential of diversity and inclusion.’“

    The Beacon writes that it was sent senior leaders and commanders at the Andersen Air Force Base in Guam under the Pacific Air Forces, which it must be noted is among branches tasked with confronting China.

    Absurdly, the more ‘pronoun sensitive’ environment on the remote island base will help enhance the American fighting force’s “lethality” – the memo explains.

    Across the waters, in Beijing, Chinese officers must be laughing… The email further lays out the following: 

    Leaders at the base are instructed, “Do not use pronouns, age, race, etc.” when writing performance reviews or other materials, such as recommendations for awards. “Competition against near-peer adversaries requires a united focus from the command, the joint team, and our international partners. Welcoming and employing varied perspectives from a foundation of mutual respect will improve our interoperability, efficiency, creativity, and lethality.”

    Below – screenshot of the directive revealed by The Washington Free Beacon:

    The Department of Defense has already for years mandated that classes be given to all enlisted and officer personnel regarding LGBTQ++ sensitivity training – and more recently there’s been a move to provide greater accessibility to “gender-transition surgery” – all at the US taxpayer’s expense of course.

    Just how the gender neutral language directive pushed by US Pacific Air Forces leadership could possibly improve “lethality” is unclear and left unexplained in the content published by the Beacon.

    * * *

    Real military recruitment ads: China vs. Russia vs. USA

    Tyler Durden
    Thu, 09/01/2022 – 21:00

  • Congress Just Admitted That UFOs Are Not "Man-Made", Says "Threats" Increasing "Exponentially"
    Congress Just Admitted That UFOs Are Not “Man-Made”, Says “Threats” Increasing “Exponentially”

    Authored by Katie Hutton via TheMindUnleashed.com,

    The new spending plan for the United States’ intelligence agencies includes a directive to the Pentagon to concentrate its examination of unidentified flying objects (UFOs) on the types of objects that the military is unable to classify.

    After years of discoveries of weird lights in the sky, first-hand testimonies from Navy pilots regarding UFOs, and investigations by the government, Congress seems to have conceded something unexpected in print: it does not think that all UFOs are “man-made.”

    Two shocking assertions were just made by Congress, but they were buried deep inside a report that was an addition to the Intelligence Authorization Act for Fiscal Year 2023. This act is the budget that oversees the United States’ clandestine operations.

    Number one is that:

    “cross-domain transmedium threats to the United States national security are expanding exponentially.” 

    The second reason is that it wishes to differentiate between extraterrestrial craft that originated from humans and those that did not: 

    “Temporary nonattributed objects, or those that are positively identified as man-made after analysis, will be passed to appropriate offices and should not be considered under the definition as unidentified aerospace-undersea phenomena,” the document reads.

    According to VICE, the admission is particularly shocking for a number of reasons, the most important of which is that, as more details concerning the investigation of UFOs by the United States government have been made available to the public, a number of politicians have avoided claiming that the unidentified objects originated from another planet or another dimension.

    The acceptable speech surrounding UFO’s up until now is that sophisticated, man-made vehicles are the most plausible explanation for the existence of unidentified flying objects (UFOs). Politicians most times refuse to publicly entertain the idea.

    As VICE points out, when pressed explicitly about the possibility of aliens on The Late Show with James Corden, for example, Obama declined to affirm the existence of extraterrestrial life but did add that people had seen a lot of unusual things in the sky recently. On the other hand, it seems that the Congress wants to now make a clear distinction between things that are “man-made” and those that are.. you know.. not so “man made”.

    According to the description provided by the Pentagon, a “cross-domain transmedium” danger is one that may migrate from water to air to space in ways that we are unable to predict or control. In July, the Pentagon made the announcement that it was going to examine these dangers by establishing the All-domain Anomaly Resolution Office, or AARO.

    This may have something to do with a topic we covered last year titled “US Navy Detects Crafts That Travel ‘Hundreds Of MPH’ Underwater Ahead of Pentagon UFO Report,” which you can read at that link.

    Unidentified Aerial Phenomena, which is the term used by the government to refer to UFOs, would be renamed Unidentified Aerospace-Undersea Phenomena under this bill, and the office inside the Pentagon would also be renamed to reflect the new title.

    A video that had been leaked and then authenticated by the Pentagon seemed to show an unidentified flying object (UFO) gliding over and below the water without making a sound last year.

    Senator Marco Rubio, who serves as the vice head of the Senate Select Committee that oversees intelligence and was responsible for releasing the report, has said publicly that he hopes the UFOs are extraterrestrial beings rather than hostile military craft.

    Why Congress would seem to be acknowledging this in public at this late date is, of course, a significant question. After all, legislators have access to confidential information that the broader public does not.

    An opinion piece in The Hill on the budget that was written by Marik von Rennenkampff, who served as a Department of Defense official under the Obama administration, include a quote saying: 

    “It strains credulity to believe that lawmakers would include such extraordinary language in public legislation without compelling evidence.”

    According to the opinion piece, UFO researcher Douglas Johnson was the one who reportedly became aware of the remarks initially.

    “This implies that members of the Senate Intelligence Committee believe (on a unanimous, bipartisan basis) that some UFOs have non-human origins,” Mark von Rennenkampff continued. “After all, why would Congress establish and task a powerful new office with investigating non-‘man-made’ UFOs if such objects did not exist?”

    “Make no mistake: One branch of the American government implying that UFOs have non-human origins is an explosive development.”

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    Like this article? Get the latest from The Mind Unleashed in your inbox. Sign up right here.

    Tyler Durden
    Thu, 09/01/2022 – 20:40

  • Wall Street's Biggest Bear Expects Stocks To Do Something They've Never Done Before As They Tumble To New Lows
    Wall Street’s Biggest Bear Expects Stocks To Do Something They’ve Never Done Before As They Tumble To New Lows

    After several weeks of unease, as stocks rampaged higher despite his bearish prognostications, on Monday Morgan Stanley’s permabear strategist, Michael Wilson, returned to his prime, forecasting doom and gloom and predicting that the current market swoon was just the start of the next leg lower. 

    To be fair, it is hardly a surprise that one of Wall Street’s biggest bears would forecast that the June to August ramp was nothing but a bear market rally; the question is where (and how) does Wilson see the current slump ending.

    To answer that question, Wilson spoke to “Bloomberg Markets” on Wednesday warning investors to brace for more pain as “US stock indexes haven’t yet hit bottom for the year.”

    “The index usually is the last thing to fall,” Wilson, who correctly predicted this year’s equity selloff even as almost all of his peers expected the S&P to easily rise and hold above 5,000. “June probably was the low for the average stock, but the index, we think, still has to take out of those June lows.”

    That is very notable, because as we explained several weeks ago, when the S&P retraced more than 50% of the drop from the Jan record high to the Jun bear-market lows, there has never been a “bear market rally” that bounce back above the 50% fib and then went on to make lower lows (although as Michael Burry noted last month, he clearly disagreed that this is anything more than a bear market rally. He was right). Indeed, as the table below from CFRA’s Sam Stovall shows, the S&P has never set a lower low in any of the 13 post-World War II bear markets after recovering 50% of its peak-to-trough decline.

    In other words, by predicting fresh lows this year, Wilson expects the S&P to do something it has never done before.

    “We view 3,400 for the growth recession or soft landing” scenario, Wilson noted, which ironically is even more bullish than Goldman, whose chief equity strategist David Kostin recently predicted the S&P would drop as low as 3,150 in case of a recession. And while Goldman has yet to make a recession its base case for the US economy, it is only a matter of time before the vampire squid is “forced” into admitting that its 5,100 year end target as recently as February was really just one big joke and “because markets”, said target is really 2000 points lower.

    Going back to Wilson, the MS strategist echoes what he said earlier this week, namely that trends in operating margins were worse than forecast, while expecting this negative direction to continue.

    “P/E multiple is wrong not because the Fed is going to be hawkish, but because the equity market is being too optimistic about the earnings outlook,” Wilson, said adding that “multiples will start to come down as earnings get cut and then somewhere in the middle of that earnings cut process the market will bottom and we think that’s probably between September and December.”

    At the low in June, the S&P 500 was trading at 18 times earnings, a multiple that exceeded trough valuations seen in all previous 11 bear cycles since the 1950s. The current P/E for the index sits above 19.

    Meanwhile, as the Fed remains laser-focused on economic data, Wilson thinks the central bank is “always going to be late by design” since it relies on two of the most backward looking data points: labor market data and inflation.

    “By the time the labor market falls apart, it’s too late,” he said, since by then it will be evident that the US economy is in a recession. “The Fed is relevant but I think we priced most of the Fed pain after the first of the year,” he added.

    Finally, while Wilson is rather doom and gloomish on most stock – he, like Zerohedge – has a soft spot for energy, and is why Wilson, whose firm is neutral on the sector, suggested looking at the S&P 500 excluding that industry.

    “When energy is doing well it’s usually bad for everything else,” he said, adding the divergence will continue. “Energy is really the antithesis for everything else.”

    Are we going to see XOM 200 before it’s all said and done?

    Tyler Durden
    Thu, 09/01/2022 – 20:33

  • Germany Responds After Poland Demands $1.3 Trillion In WWII Reparations
    Germany Responds After Poland Demands $1.3 Trillion In WWII Reparations

    Germany has responded after Poland demanded $1.32 trillion in reparations over losses suffered during WWII.

    On Thursday, Poland’s Deputy Prime Minister Jaroslaw Kaczynski said that Warsaw would officially demand reparations from its largest trade partner and a fellow member of both the EU and NATO.

    Poland’s Deputy Prime Minister and Law and Justice (PiS) party leader Jaroslaw Kaczynski

    Poland’s new estimate tops the $850 billion estimate by a ruling party lawmaker from 2019. The ruling Law and Justice (PiS) party has repeated calls for compensation several times since it took power in 2015, but Poland hasn’t officially demanded reparations. –Reuters

    “The sum that was presented was adopted using the most limited, conservative method, it would be possible to increase it,” said Kaczynski, leader of Poland’s Law and Justice (PiS) party during a news conference. “Germany has never really accounted for its crimes against Poland,” he added.

    Kaczynski – who is Poland’s chief policy maker, and Prime Minister Mateusz Morawiecki, attended a ceremonial release of a long-awaited reparations report held at the Royal Castle in Warsaw, which was rebuilt from wartime ruins.

    The release of the three-volume report was the focus of national observances of the anniversary of the war that began Sep. 1, 1939, with Nazi Germany’s bombing and invasion of Poland that was followed by more than five years of brutal occupation.

    The head of the report team, lawmaker Arkadiusz Mularczyk, said it was impossible to place a financial value on the loss of some 5.2 million lives he blamed on the German occupation.

    He listed losses to the infrastructure, industry, farming, culture, deportations to Germany for forced labor and efforts to turn Polish children into Germans.

    A team of more than 30 economists, historians and other experts worked on the report since 2017. The issue has created bilateral tensions.

    The war was “one of the most terrible tragedies in our history,” President Andrzej Duda said during early morning observances at the Westerplatte peninsula near Gdansk, one of the first places to be attacked in the Nazi invasion. –ABC News

    Germany hit back in a statement from its foreign ministry, which said that the question of reparations was ‘concluded’ long ago with Poland renouncing further claims, and that the German position that compensation was paid to East Bloc nations in the years after the war, has not changed.

    Poland’s combative stance towards Germany has intensified after Russia’s invasion of Ukraine.

    In 1953, Poland’s then-communist rulers relinquished all claims to reparations amid pressure from the USSR, which wanted to free the soviet satellite of East Germany from any liabilities. According to Poland, the agreement is invalid because Poland was unable to negotiate fair compensation, according to Reuters.

    Donald Tusk, leader of Poland’s biggest opposition party Civic Platform, said on Thursday that Kaczynski’s announcement was “not about reparations”.

    “It’s about an internal political campaign to rebuild support for the ruling party,” he said.

    Germany’s top official for German-Polish cooperation, Dietmar Nietan, said in a statement that Sept. 1 “remains a day of guilt and shame for Germany that reminds us time and again not to forget the crimes carried out by Germany” that are the “darkest chapter in our history.”

    Tyler Durden
    Thu, 09/01/2022 – 20:20

  • Evacuations Ordered, Highway Closed, As Wildfire Rages North Of Los Angeles
    Evacuations Ordered, Highway Closed, As Wildfire Rages North Of Los Angeles

    A wildfire in northern Los Angeles County exploded in size overnight and led to a mandatory evacuation.

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    According to the Los Angeles Fire Department, the Route Fire near Interstate 5 at Castaic had burned 5,208 acres with 12% containment (as of Thursday morning). 

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    Officials said evacuations had been ordered for the Paradise Mobile Estates and all homes or businesses south of Templin Highway along Upper Ridge Route Road.

    Evacuations were ordered in these areas:

    • Paradise Ranch Mobile Estates
    • All homes and businesses south of Templin Highway along Upper Ridge Route Road
    • Structures north of Lake Hughes Road, east of the Golden Station (5) Freeway
    • West of Castaic Lagoon
    • North of Northlake Elementary School

    The blaze was sparked in a region of Southern California gripped by a dangerous heatwave. Power grid officials have warned residents across the state to turn up their thermostats and stop charging EVs due to the fragility of the grid. 

    A portion of Interstate 5, a major highway that runs from the Mexico border to the Canada-US border in Washington State, was closed on Wednesday because of the fire. 

    Social media reports show the highway is partially reopened Thursday morning but with lane closures, causing significant travel delays. 

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    The good news is some contaiment of the fire has been seen. Now for the bad: hot and dry conditions are expect to persist through Labor Day weekend. 

    Tyler Durden
    Thu, 09/01/2022 – 19:40

  • Super Typhoon Barrels Towards China, Major Shipping Lanes In Path
    Super Typhoon Barrels Towards China, Major Shipping Lanes In Path

    Super Typhoon Hinnamnor is barreling towards China’s coastal provinces, Japan, and South Korea as it traverses the South China Sea in the western Pacific Ocean. 

    The United States Naval Meteorology and Oceanography Command has labeled Hinnamnor a “super typhoon” — since it has surpassed winds of at least 150 mph. For US readers, the storm is equivalent to a Category 4/5 in the Atlantic basin. 

    As of Thursday, Hinnamnor was located 143 miles east of Japan’s Okinawa, as per the Hong Kong Observatory, with wind speeds above 159 mph, gusting to 195 mph, according to The Weather Channel. 

    According to Taiwan News, the rapid intensification of Hinnamnor is because it absorbed a tropical system, Tropical Depression TD14. Also, warm tropical waters and mild winds allowed the system to develop into a super typhoon. 

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    In response to the system’s path, China activated the lowest tier of its four-level emergency response system in eight provinces and municipalities, including Shanghai and Zhejiang. The system is expected to move into the East China Sea over the weekend. 

    Even though Hinnamnor could lose strength in the coming days, its forecasted path could be very disruptive to international supply chains — already under pressure as zero-Covid policies shutter a major manufacturing hub on Thursday. Ports, such as the ones in Shanghai, could be in the storm’s path by the late weekend or early Monday. The storm could impact parts of South Korea and Japan by late Monday or early Tuesday. These are are known for some of the largest containerized shipping ports in the world. 

    All eyes this weekend are on Hinnamnor’s path as it is expected to threaten countries such as Japan, China, and South Korea. 

    Tyler Durden
    Thu, 09/01/2022 – 19:00

  • Iran Delivers Ukraine War 'Peace Initiative' From Europe To Moscow
    Iran Delivers Ukraine War ‘Peace Initiative’ From Europe To Moscow

    Authored by Connor Freeman via The Libertarian Institute,

    Tehran presented Moscow with an unnamed European leader’s proposal for a “peace initiative” to end the war in Ukraine, Iran’s Foreign Minister Hossein Amirabdollahian confirmed on Wednesday, according to a report in Al Jazeera. 

    During a news conference in Moscow with his Russian counterpart Sergey Lavrov, Amirabdollahian announced he has provided the Russians with a European leader’s proposal that had been given to Iranian President Ebrahim Raisi. “There are ideas to help establish peace and stop the fighting in Ukraine, and I shared these ideas with Mr. Lavrov,” Amirabdollahian added.

    Russian President Vladimir Putin and Iran’s President Ebrahim Raisi, back to a camera, on the sideline of the summit of Caspian Sea littoral states in Ashgabat, Turkmenistan, June 29, 2022. Kremlin Pool Photo via AP

    While further details about the proposal are unknown, Iran’s top diplomat said that it deals with prisoners of war and southeastern Ukraine’s Zaporizhzhia Nuclear Power Plant (ZNPP). The Russian controlled plant, Europe’s largest, has been the site of constant shelling during recent weeks. Moscow blames Ukraine for the attacks and Russian President Vladimir Putin recently told his French counterpart Emmanuel Macron the shelling could cause a “large-scale catastrophe.” Putin and Macron agreed that the UN nuclear watchdog, the International Atomic Energy Agency (IAEA), should visit the plant as soon as possible. 

    While Ukraine accuses Russia of being behind the shelling, it makes little sense for Moscow to attack the plant and tempt nuclear disaster when the Russians have controlled the ZNPP and the surrounding areas since March. This week, the IAEA mission arrived in Zaporizhzhia and the inspections should begin soon. The Russian side is confident the mission will find evidence proving Ukraine is the responsible party.

    Though Amirabdollahian would not name the European leader behind the proposal, Iran’s semi-official INSA news site reported it was Macron. Mohammad Jamshidi, one of Raisi’s political deputies, tweeted Amirabdollahian had a “a peace initiative and an important message” from a “top western European leader.” 

    After the August 19 call between Putin and Macron regarding the ZNPP, their first in three months, the two agreed to “speak about this subject again in the next few days following discussions between the technical teams and before the deployment of the mission.” 

    The Al Jazeera report added that, since the war began, Tehran has repeatedly passed along messages between Moscow and Kiev. However, this is the first publicly known instance of the Iranians delivering a message from Europe. Tehran blames NATO’s aggressions for provoking the war with Russia and maintains that the conflict must end through dialogue.

    In June, a French presidency official told Reuters Paris would like to see the US return to the Joint Comprehensive Plan of Action (JCPOA), the Iran nuclear deal, saying “there is a knot that needs to be untied if applicable … to get Iranian oil back on the market.” 

    Signatories to the 2015 deal included the P5+1:  Washington, Moscow, Beijing, London, Paris, plus Berlin. In 2018, the Donald Trump administration illegally withdrew Washington from the deal and reimposed sanctions. A US return to the deal would  see sanctions lifted on Iran as well as enable Europe to again purchase Iranian oil. The continent is facing soaring energy prices as a result of the Washington-led sanctions against Russia. This is one of the main motivations behind EU foreign policy chief Josep Borrell’s campaign to save the deal. 

    Amirabdollahian and Lavrov further discussed expanding trade between the two countries as well as the ongoing, EU brokered, indirect Iran nuclear deal negotiations. Tehran is currently conducting a “careful review” of the US response to Borrell’s “final” proposal before giving its reply. For Moscow’s part, Lavrov said “Russia supports reviving the nuclear deal and lifting the sanctions imposed against Iran.” Additionally, the two top diplomats’ meeting also covered issues regarding Iraq, Yemen, Syria, and Afghanistan.

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    A recent article in Foreign Affairs written by Fiona Hill and Angela Stent, which cites “multiple former senior US officials,” confirms Lavrov’s earlier claims that Moscow and Kiev had tentatively agreed on workable peace deal during bilateral talks in March. Negotiations between the two sides were being held in Istanbul at the end of March. 

    According to Hill and Stent, the outlined terms were “Russia would withdraw to its position on February 23, when it controlled part of the Donbas region and all of Crimea, and in exchange, Ukraine would promise not to seek NATO membership and instead receive security guarantees from a number of countries.” 

    Talks have collapsed since then largely due to Western pressure on the Ukrainians epitomized by UK Prime Minister’s April 9 visit to Kiev. Speaking for the “collective West,” Johnson reportedly told Ukrainian President Volodymyr Zelensky that “even if Ukraine is ready to sign some agreements on guarantees with Putin,” Kiev’s NATO benefactors were not. Johnson is said to have told Zelensky now is the time to pressure Putin and Moscow. The British readout of a subsequent call Johnson held with Macron said that, while in Kiev, the UK leader had “urged against any negotiations with Russia.”

    Thus far, the sole diplomatic success to come out of the entire conflict has been the deal to export grain from Ukraine’s heavily mined ports. The agreement came out of negotiations between Kiev and Moscow which were brokered by the UN and Turkey. The US played no role in the talks and has abandoned diplomacy with Russia. 

    Secretary of State Antony Blinken cut off talks with Lavrov more than a week before the war even began and has spoken to him, only on the phone, for a grand total of 25 minutes since then. Their one conversation was related to a bilateral prisoner exchange, the war was not discussed apart from some vague threats Blinken issued. On April 5, the Washington Post reported that for “some in NATO, it’s better for the Ukrainians to keep fighting, and dying, than to achieve a peace that comes too early.”

    Tyler Durden
    Thu, 09/01/2022 – 18:40

  • US Life Expectancy Continues To Plunge Below China's
    US Life Expectancy Continues To Plunge Below China’s

    Life expectancy in the US has fallen for the second consecutive year as Covid-19 and overdoses increased mortality rates. An empire’s death may start with its people, and as the world shifts, China, an emerging power, has a life expectancy that is above the US and widening. 

    According to new data from the Centers for Disease Control and Prevention, Americans’ life expectancy fell .9 years to 76.1 years in 2021 – the lowest since 1996.

    The year prior, life expectancy dropped by 1.8 years.

    The combined figures were the largest two-year decline since the 1920s. 

    Not every demographic group saw the same changes, the researchers found. Asian-Americans have the highest life expectancy of any group – 83.5 years – and only saw a 0.1 year decline from 2020. Meanwhile, Black Americans lost 0.7 years between 2020 to 2021.

    But American Indian and Native Americans saw the largest loss of life expectancy of all – 1.9 years less than 2020’s life expectancy, and 6.6 years less than 2019’s. They also had the lowest life expectancy among the groups studied.

    While COVID is the leading cause (accounting for 50%) of shortened US life expectancy, the opioid crisis worsened last year and claimed the lives of 108,000.

    Although deaths from heart disease were the third biggest contributor to the decline in life expectancy, the number of people dying from this condition actually decreased.

    “With heart disease, we did see increases in mortality at younger ages — from ages 35 to 64 in particular,” Robert Anderson, the chief of the mortality statistics branch of the National Center for Health Statistics said.

    America appears to have a crisis of early deaths, but on the opposite side of the world, China’s life expectancy seems to be improving. 

    “It also means that the gap in longevity at birth between people in the US and China has now widened to a full year,” Quartz reported. Data from the CDC and OECD of life expectancies between both countries provides a visualization of the widening gap.

    Source: Quartz 

    Quartz noted that Chinese data on 2021 life expectancy has yet to be published, though it pointed out there was a .2-year improvement in 2020 versus the prior year. It said China averted a mortality crisis because of the zero-Covid strategy. However, if this is true, this comes at the expense of the economy, which is sliding into turmoil.

    What comes to mind is that no one should take Chinese data for face value and there has yet to be 2021 data released. As for the US, early mortality for the world’s largest superpower is an essential indicator of the population’s health status. Increasing early deaths will have socioeconomic consequences as the economy is structured mainly for consumerism. 

    Tyler Durden
    Thu, 09/01/2022 – 18:20

  • FEMA To Cover El Paso Costs Of Busing Illegal Immigrants To New York, Official Says
    FEMA To Cover El Paso Costs Of Busing Illegal Immigrants To New York, Official Says

    Authored by Caden Pearsen via The Epoch Times,

    The Biden administration will reimburse El Paso city, which is following the lead of other border cities in Texas and Arizona to transport illegal immigrants to New York on buses, according to a city official.

    El Paso officials this week sent 35 Venezuelans to New York City on chartered buses as they moved to address the growing number of illegal immigrants arriving via the U.S. southern border from South America, local media reported.

    The Federal Emergency Management Agency (FEMA) has said it will reimburse local governments and NGOs for the cost of aiding and transporting the illegal aliens, according to Mario D’Agostino, the deputy city manager of El Paso.

    “OEM has sponsored and provided transportation services for migrants out of El Paso, which is reimbursable through FEMA,” D’Agostino said in a statement obtained by El Paso Matters, referring to the city’s Office of Emergency Management.

    “OEM has sponsored charter buses to include a recent transport to New York City, this was the preferred destination for those without any means to travel.”

    FEMA did not immediately respond to a request for comment.

    D’Agostino said that the last time El Paso officials arranged a charter bus to transport illegal immigrants elsewhere was on June 21, when 50 individuals were sent to Dallas to be aided by a group of area faith leaders, El Paso Matters reported.

    The mayors of New York City and Washington, Eric Adams and Muriel Bowser, both Democrats, have criticized the busing program as politically motivated.

    However, Gov. Greg Abbott (R-Texas) has said that individuals apprehended along the U.S. southern border voluntarily chose to go to their cities.

    More than 8,900 illegal aliens have been bused out of Texas border cities to New York City and Washington, according to Abbott’s office. Both New York City and Washington are sanctuary cities.

    DC, New York ‘Ideal Destinations’ for Illegal Immigrants

    Around 4.9 million people have illegally entered the United States from Mexico since President Joe Biden took office in January 2021, according to a report released by the Federation for American Immigration Reform on Aug. 16.

    Abbott has previously said that Biden’s “open border policies” and “refusal to acknowledge the crisis” they are causing forced him to take “unprecedented action,” which includes sending illegal immigrants to New York City and Washington.

    “In addition to Washington, D.C., New York City is the ideal destination for these migrants, who can receive the abundance of city services and housing that Mayor Eric Adams has boasted about within the sanctuary city,” Abbott said earlier in August.

    The Pentagon has denied requests from both Adams and Bowser for federal support, including National Guard deployments, to help their cities cope with the influx of illegal immigrants.

    Abbott’s office has said that the busing mission, called “Operation Lone Star,” provides “much-needed relief to our overwhelmed border communities” in Texas.

    “Operation Lone Star continues to fill the dangerous gaps left by the Biden Administration’s refusal to secure the border,” Abbott’s office said in a statement.

    In addition to the constant stream of illegal immigrants, U.S. authorities along the border with Mexico have stopped the “smuggling of drugs, weapons, and people” into the United States, as well as “transnational criminal behavior between ports of entry,” according to the statement. This includes over 335.5 million “lethal fentanyl doses,” Abbott said on Twitter.

    Tyler Durden
    Thu, 09/01/2022 – 18:00

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