- Five Lessons That Russia Can Learn From The Latest Israeli-Lebanese War
Five Lessons That Russia Can Learn From The Latest Israeli-Lebanese War
Authored by Andrew Korybko via substack.com,
The latest Israeli-Lebanese War and the Ukrainian Conflict are so different from one another as to be practically incomparable, but Russia can still learn some general lessons from Israel if it has the will.
The first is that prioritizing military goals increases the chances of achieving political ones. Russia’s special operation continues to be characterized by self-restraint, which is influenced by Putin’s magnum opus “On the historical unity of Russians and Ukrainians”, unlike Israel’s conduct in its war with Lebanon.
The expectation was that the lightning-fast on-the-ground advances during the opening stage of the conflict would coerce Zelensky into agreeing to the military demands that were made of him. The only miniscule collateral damage that would have occurred could have then facilitated the process of Russian-Ukrainian reconciliation. This plan was predicated on Zelensky’s capitulation, which didn’t happen. Instead, he was convinced by former British Prime Minister Boris Johnson to keep fighting.
Israel never thought that a lasting deal is possible with Hezbollah, unlike what Russia thought and arguably still thinks is possible with Ukraine’s post-“Maidan” authorities, which is why Tel Aviv would never take a page from Moscow’s playbook by carrying out “goodwill gestures” in pursuit of that. From Israel’s perspective, political goals can only be achieved after a military victory, not the inverse like Russia believes with regard to the notion that a political victory can lead to the attainment of military goals.
The second lesson is the importance of superior intelligence. Russia was reportedly under the impression cultivated by its Ukrainian assets in the run-up to the special operation that the locals would greet its troops with flowers and then Zelensky’s government would collapse. Intelligence collection focused mostly on the socio-political situation in Ukraine, which turned out to be incredibly inaccurate, and not on military details. That’s why Russian troops were surprised by Ukraine’s Javelin and Stinger arsenals.
It also seems to be the case in retrospect that Russia’s Ukrainian assets told their handlers what they thought they wanted to hear, whether to deceive them or because they thought that telling tough truths could risk them being taken off the payroll. Russia either didn’t verify the socio-political intelligence that it received or the other sources that it relied on were driven by the same motives. In any case, an alternative reality was created, which reinforced the prioritization of political goals over military ones.
Israel is no doubt interested in Lebanon’s socio-political situation, but it cares much more about tangible military intelligence that can be verified with images than intangible impressions of public opinion that could be shaded by their source’s biases and aren’t as easy to verify. These different intelligence collection priorities are the natural result of the different conflicts that they planned to wage as explained in the preceding lesson that Russia can learn from Israel.
The third is that Russia remains sensitive to global public opinion, which is another outcome of prioritizing political goals over military ones, while Israel is impervious to public opinion at home, in Lebanon, and across the world. Russia will therefore put its troops in harm’s way capturing locations block-by-block as opposed to practicing “shock and awe” like Israel is doing in Lebanon. Even though Russia’s approach led to a lot fewer civilian deaths, it’s still criticized much as Israel is, if not more.
Israel believes that fear inspires respect, while Russia doesn’t want to be feared since it thinks that this impression would assist the West’s efforts to isolate it in the Global South. Respect, Russia believes, comes from restraining itself in order to protect civilians even at the cost of its own troops. Russia has also criticized the US for the way in which it waged the Afghan, Iraqi, and Libyan Wars, et al., and thus doesn’t want to appear hypocritical by prioritizing military goals even at the expense of civilians’ lives.
Israel lacks the natural resources that Russia has so its opponents should have had a much easier time isolating it by at least getting others to impose symbolic sanctions, yet nobody has sanctioned Israel even though it’s responsible for many more civilian deaths than Russia. Even Russia itself won’t sanction Israel despite criticizing it. To be fair, the Global South hasn’t sanctioned Russia either, but it needs Russian resources so it likely wouldn’t sanction it even if it becomes responsible for many more civilian deaths.
Moreover, the Global South’s partnership with Russia accelerates multipolar processes to their collective benefit, while the EU’s anti-Russian sanctions were meant to decelerate them. It should therefore have been predictable that the first wouldn’t submit to American pressure while the second would. Neither’s calculations have anything to do with Russia’s responsibility for civilian deaths and everything to do with their own grand strategy. Russia’s sensitivity to global public opinion might thus be misplaced.
The fourth lesson is that Israel’s permanent military, intelligence, and diplomatic bureaucracies (“deep state”) are more convinced of their conflict’s existential nature than Russia’s appear to be. That’s not to say that say that the Ukrainian Conflict isn’t existential to Russia, which was explained here and here, but just that Russia would have prioritized military goals over political ones by now if its “deep state” fully shared this assessment. Israel’s certainly does regardless of whether one agrees with their conclusion.
Russia is still restraining itself by continuing to fight an improvised “war of attrition” with the West in Ukraine after it couldn’t successfully coerce Zelensky into agreeing to the military demands that were made of him during the special operation’s initial stage instead of escalating to “shock and awe”. It still won’t destroy any bridges across the Dnieper due to its prioritization of political goals over military ones and sensitivity to global public opinion and has even let several red lines be crossed already.
To be sure, the West won’t cross Russia’s ultimate red lines of directly attacking it or Belarus or relying on Ukraine to launch large-scale strikes against them by proxy since it doesn’t want World War III, but some hawks are now talking about the latter scenario, hence why Russia just updated its nuclear doctrine. By contrast, Hamas’ sneak attack on 7 October 2023 crossed one of Israel’s red lines but didn’t ipso facto represent an existential threat since it was beaten back, yet Israel’s “deep state” still saw it differently.
Although some differences of vision exist between various members thereof, this group as a whole is still convinced of the existential nature of the conflict that followed, ergo the prioritization of military goals over political ones that’s the opposite of Russia’s approach. To this day, despite compelling arguments from Russian officials about the existential nature of their country’s conflict, its “deep state” as a whole still doesn’t seem to be as convinced of this as their Israeli counterparts are of their own conflict.
A change in perceptions would lead to a change in how this conflict is fought, but that hasn’t yet happened despite drone attacks against the Kremlin, strategic airbases, and even early warning systems, among many other provocations including Ukraine’s invasion of Kursk Region. Time and again, despite reminding everyone about how existential this conflict is, Russia continues exercising self-restraint. Political goals are still prioritized over military ones and Russia is still sensitive to global public opinion.
That could change if it learns the last lesson from Israel about “radical decisiveness”. Philosopher Alexander Dugin wrote that “Those who act with decisiveness and boldness win. We, on the other hand, are cautious and constantly hesitate. By the way, Iran is also following this path, which leads nowhere. Gaza is gone. Hamas’ leadership is gone. Now Hezbollah’s leadership is gone. And President Raisi of Iran is gone. Even his pager is gone. Yet Zelensky is still here. And Kiev stands as if nothing has happened.
He ended on the ominous note that “We must either join the game for real or… The second option is something I don’t even want to consider. But in modern warfare, timing, speed, and ‘dromocracy’ decide everything. The Zionists act swiftly, proactively. Boldly. And they win. We should follow their example.” Dugin was the first to foresee the latent existential threat to Russia posed by 2014’s “EuroMaidan” and has thus been pressing since the start of the special operation for it to stop exercising self-restraint.
“Goodwill gestures” and self-restraint aren’t appreciated by Ukraine, which perceives them as proof of weakness that have only served to embolden it to cross more of Russia’s red lines. For as much as these policies have reduced civilian deaths, they haven’t yet advanced their envisaged political goals over two and a half years since the latest phase of this already decade-old conflict began. It might therefore be time to finally change them in light of how different the conflict has since become.
Putin’s noble plan of a grand Russian-Ukrainian reconciliation after the special operation ends appears to be more distant than ever, yet he still believes that it’s supposedly viable enough to justify staying the course by continuing to prioritize political goals over military ones. He’s the Supreme Commander-in-Chief with more information available to him than anyone else so he has solid reasons for this, but maybe Israel’s example in Lebanon will inspire him to see things differently and act accordingly.
Tyler Durden
Mon, 09/30/2024 – 02:00 - What Are World Leaders Getting Paid?
What Are World Leaders Getting Paid?
World leaders frequently rub shoulders with the rich and famous, but does that mean they themselves can be counted among this category of people?
As Statista’s Katharina Buchholz details below, based on data taken from the website PoliticalSalaries.com, the answer is ‘it depends’.
Among current world leaders is one income millionaire: Lawrence Wong, the prime minister of Singapore. He brings in an annual salary of the equivalent of almost $1.69 million, which makes him the best-earning world leader. His remuneration places him far ahead of second-ranked Viola Amherd, president of Switzerland, who earns upwards of a converted $570,000 per year.
Year is indeed singular for Amherd, who started her term on January 1 and will end it on December 31. Swiss presidents are members of the country’s government cabinet voted in by the Swiss parliament for one year at a time. The cabinet consists of seven council members who can be re-elected, so it is possible that Amherd will serve another well-paid term as Swiss president in the future.
Many of the remainder of the world’s best-paid political leaders hail from Anglophone countries, including the American president, who earns $400,000 annually. As of August 29 currency conversion rates, this was less that what Australian Prime Minister Anthony Albanese is making, but more than what the Prime Ministers of New Zealand and Canada, Christopher Luxon and Justin Trudeau, are bringing in per year. German-speaking countries also pay their leaders well, with Austrian Chancellor Karl Nehammer making slightly more than his German equivalent, Olaf Scholz.
Including leaders of non-sovereign entities, Hong Kong is applying a similar approach to Singapore’s, paying its current Chief Executive John Lee Ka-chiu the equivalent of almost $700,000 annually. While Singapore’s founding father Lee Kuan Yew was a proponent of competitive public sector pay, Hong Kong’s high remuneration has been tied to its history of high pay for colonial governors. Another leader that doesn’t helm a country, but is still handsomely rewarded is Ursula van der Leyen, the president of the European Commission. She is bringing in one of the European Union’s highest salary of approximately $358,000 per year.
Taking a different approach to determining the highest-paid world leaders on a level relative to their countries’ economic prowess, Kenyan President William Rutto is the biggest earner, bringing in the equivalent of almost 2,000% of his country’s per-capita GDP in 2023.
You will find more infographics at Statista
On the basis of 2023 average exchange rates, Rutto made the equivalent of $126,000 last year. This is in stark contrast to Kenya’s GDP per capita of just $6,300 annually. The Presidents of Tanzania and South Africa, Samia Suluhu Hassan and Cyril Ramaphosa, also crack the 1,000% mark, while aforementioned Singaporian Prime Minister Lawrence Wong and his $1.7 million salary stand at 1,158% of the per-capita GDP of the city state of $141,500.
Viola Amherd of Switzerland, Anthony Albanese of Australia and Christopher Luxon of New Zealand also reappear among the world leaders with the highest relative salaries, while U.S. President Joe Biden comes in rank 9 at a salary standing at 490% of per-capita GDP in 2023.
Tyler Durden
Sun, 09/29/2024 – 22:45 - Lebowitz Calls For Biden-Harris To "Dissolve The Supreme Court": Turley
Lebowitz Calls For Biden-Harris To “Dissolve The Supreme Court”: Turley
Authored by Jonathan Turley via jonathanturley.org,
Author and cultural critic Fran Lebowitz added voice to the unhinged calls on the left for trashing the Supreme Court. As I discussed recently in the Wall Street Journal (and in my book), there is a growing counter-constitutional movement in the United States led by law professors, pundits, and celebrities. Lebowitz amplified those calls in a radical demand to simply get rid of the Court.
Lebowitz called for President Joe Biden to “dissolve the Supreme Court” despite the fact that it would violate the Constitution and remove one of the most critical protections against executive and legislative abuse.
Lebowitz insisted that the Supreme Court is a “disgrace” because, in a reference to Donald Trump, it is “completely his.” To the wild applause of the New York audience, she added: “It’s so disgraceful, this court, that it shouldn’t even be allowed to be called the Supreme Court. It’s an insult to Motown. Basically, it’s a harem. It’s Trump’s harem.”
Her views aligned with others on the left who have attacked the Constitution, the Court, and even rights like free speech as now threats to our democracy.
Senate Majority Leader Chuck Schumer previously declared in front of the Supreme Court, “I want to tell you, [Neil] Gorsuch, I want to tell you, [Brett] Kavanaugh, you have released the whirlwind, and you will pay the price.”
Rep. Alexandria Ocasio-Cortez (D-NY) announced that she wants the impeachment of all six of the conservative justices. She was immediately joined by other Democratic members.
Previously, Ocasio-Cortez admitted that she does not understand why we even have a Supreme Court. She asked “How much does the current structure benefit us? And I don’t think it does.”
Other members, such as Sen. Elizabeth Warren (D-Mass.), have called for packing the Court with additional members to immediately secure a liberal majority to rule as she desires.
UNHINGED: Fran Lebowitz to Bill Maher: “Biden should dissolve the Supreme Court.” pic.twitter.com/z6oe0VURIo
— Steve Guest (@SteveGuest) September 28, 2024
https://platform.twitter.com/widgets.js
Sen. Sheldon Whitehouse (D., RI), has assured voters that Vice President Kamala Harris will support the packing of the Court with a liberal majority.
Despite supporting censorship to combat “disinformation,” many on the left now eagerly spread disinformation about the Court and its rulings. Lebowitz repeated false claims about the Court’s ruling on presidential immunity, stating that the decision makes the president a “king” who “can do whatever you want.”
In reality, the Court followed the same approach that it has taken in prior conflicts between the branches.
As it has in the past, the Court adopted a three-tiered approach to presidential powers based on the source of a presidential action. Chief Justice John Roberts cited Youngstown Sheet and Tube Co. v. Sawyer, in which the court ruled against President Harry Truman’s takeover of steel mills.
In his famous concurrence to Youngstown, Justice Robert Jackson broke down the balance of executive and legislative authority between three types of actions. In the first, a president acts with express or implied authority from Congress. In the second, he acts where Congress is silent (“the zone of twilight” area). In the third, the president acts in defiance of Congress.
In this decision, the court adopted a similar sliding scale. It held that presidents enjoy absolute immunity for actions that fall within their “exclusive sphere of constitutional authority” while they enjoy presumptive immunity for other official acts. They do not enjoy immunity for unofficial or private actions.
None of this matters. Facts do not matter. Many on the left are calling for the trashing of the Constitution based on wildly inaccurate claims.
Erwin Chemerinsky, dean of the UC Berkeley law school, is author of “No Democracy Lasts Forever: How the Constitution Threatens the United States,” published last month. In a 2021 Los Angeles Times op-ed, he described conservative justices as “partisan hacks.”
In the New York Times, book critic Jennifer Szalai scoffs at what she calls “Constitution worship.” She writes: “Americans have long assumed that the Constitution could save us; a growing chorus now wonders whether we need to be saved from it.” She frets that by limiting the power of the majority, the Constitution “can end up fostering the widespread cynicism that helps authoritarianism grow.”
In a 2022 New York Times op-ed, “The Constitution Is Broken and Should Not Be Reclaimed,” law professors Ryan D. Doerfler of Harvard and Samuel Moyn of Yale called for liberals to “reclaim America from constitutionalism.”
Lebowitz is also wrong about the voting record of the justices. In reality, the Court continues to rule largely by unanimous, or nearly unanimous decisions. After April, unanimity stood at 46 percent of cases.
Of the 22 6-3 decisions, only half broke along ideological lines. That is the same as the 11 such cases last term.
The average for unanimous decisions has been roughly 43 percent. The rate is back up to 48 percent for the last term. When you add the nearly unanimous opinions, it is the vast majority of cases. Moreover, Sotomayor agreed with Roberts in 71% of cases Kavanaugh and Barrett agreed with Sotomayor roughly 70% of the time.
In critical decisions, conservative justices like Gorsuch and Barrett have joined their liberal colleagues and the Court has repeatedly voted against positions supported by Donald Trump.
Again, none of this matters. Lebowitz and others are falsely telling the public that the Court is dysfunctionally and ideologically divided. Of course, even if you accept the false premise, the problem is not with the liberal justices always voting as a block but the conservatives doing so. The liberals are not robotic, they are simply right.
Jonathan Turley is the Shapiro Professor of Public Interest Law at George Washington University and the author of “The Indispensable Right: Free Speech in an Age of Rage.”
Tyler Durden
Sun, 09/29/2024 – 22:10 - "We Have Her Underwater": Michigan Lawmaker Admits Dire Internal Polling For Kamala Harris
“We Have Her Underwater”: Michigan Lawmaker Admits Dire Internal Polling For Kamala Harris
In a Sunday bombshell, Axios reports that Rep. Elissa Slotkin (D-MI) has privately warned donors that Vice President Kamala Harris is “underwater” in Michigan – a critical battleground state for Democrats – according to a video clip obtained by the outlet. Slotkin’s revelation comes at a time when the Dems are fighting tooth and nail to hold onto the Senate, and Michigan could be a deciding factor.
FILE – Rep. Elissa Slotkin, D-Mich. (Chip Somodevilla/Pool via AP, File) During a virtual fundraiser last Wednesday with Sen. Cory Booker (D-NJ), Slotkin didn’t mince words. “I’m not feeling my best right now about where we are on Kamala Harris in a place like Michigan,” she admitted, further stating that their internal polling shows Harris sinking in the Wolverine State. The news comes as a blow Democrats as they eye a tough Senate race where Slotkin herself is vying for a seat against GOP contender, former Rep. Mike Rogers (R-MI).
Why It Matters
Michigan is a critical state for Democrats. If Trump sweeps the Sun Belt, taking Michigan – or any state in the so-called “Blue Wall” that includes Wisconsin and Pennsylvania, it could pave his way back to the White House. Recent polling averages from FiveThirtyEight have Harris ahead by just 2.4 points, while a New York Times/Siena College poll puts her lead at a razor-thin 1 point.
Meanwhile, Senate Republicans smell blood in the water. Slotkin’s Senate race has seen millions of dollars pour in, with GOP operatives sensing a prime opportunity to flip the seat. Republican internal polling suggests the race may be neck-and-neck, despite some public polls showing Slotkin with a narrow lead.
Money Talks, But Polls Walk
While Slotkin’s public polling paints a more optimistic picture, with RealClearPolitics giving her a 48% to 43% edge, Republicans are raising alarms. GOP strategists believe the Michigan Senate race is tightening, especially as Slotkin’s campaign fights off the GOP war chest. With Slotkin admitting Harris is struggling in Michigan, it’s clear Democrats have a lot to worry about in 2024.
The Senate map isn’t doing Democrats any favors either. While ruby-red Ohio and Montana have been getting attention, a surprise Republican win in Michigan could virtually guarantee a GOP majority come next November.
Tyler Durden
Sun, 09/29/2024 – 21:35 - What Will Happen Tomorrow – JPM Collar Trade?
What Will Happen Tomorrow – JPM Collar Trade?
Equities this past week have been very quiet, with the SPX having a range of only 0.75% over the last 6 sessions.
In fact, the 0DTE SPX at-the-money straddle on Friday, in front of a key Core PCE data print, was a paltry $25.5 (45bps).
That pricing is as low as it gets, reflecting that traders think that markets will continue to do… nothing.
But here at SpotGamma, we think that is all about to change…
… AND we have a brand new way for you to watch it change AS IT HAPPENS.
Why this change?
Enter, the infamous JPM Collar Trade.
In what might be the most well-known option trade in existence, each quarter a large JPM Hedge Fund (JHEQX), sells ~40k contracts of an out-of-the-money call to fund a long put spread.
In this case, the call they are currently (heavily) short is:
40k contracts at the 5,750 strike, expiring tomorrow, Monday, 9/30.
That 40k short call position means dealers are long a literal ton of Gamma, which you can see on our brand new TRACE heatmap and strike plot, below.
TRACE is powered by SpotGamma’s new proprietary open interest models, allowing us to show you the latest in dealer hedging flows – flows that update throughout the day.
You see the changes as they happen.
This means that on Monday, when the existing JPM position(s) are closed, and rolled to new December strikes, you’ll be able to see it happen.
Further, you’ll see how it changes the dealer hedging position.
What does this matter?
We believe these trades will lead to a pickup in S&P 500 volatility.
Here’s why.
If one believes that positive Gamma is linked to low volatility (which we do), then the removal of a giant blanket of positive Gamma (AKA JPM’s short call) should open the door for volatility.
This is exactly what is set to happen on Monday, as the current JPM call is going to be closed and “rolled up and out.”
The implication is then, that the new call is going to be changed to a ~5% higher strike, out in Dec ’24. That is far less positive Gamma in the new position vs. the current position, expiring tomorrow.
Therefore, this expiration should allow for volatility (i.e. market movement) to expand, suggesting that starting Monday, the SPX will start moving and we’ll be relying on TRACE to show us the way.
Tyler Durden
Sun, 09/29/2024 – 21:00 - Inside The Biden Admin's Plot To Destroy Silvergate And Debank Crypto For Good
Inside The Biden Admin’s Plot To Destroy Silvergate And Debank Crypto For Good
Submitted by Nic Carter
- New bankruptcy filings and exclusive interviews with confidential sources suggest Silvergate could have survived if not for pressure from regulators, which allegedly included an informal mandate to cap its crypto deposits at 15 percent
- Sen. Elizabeth Warren all but accused Silvergate of aiding and abetting FTX’s crimes, creating an “atmosphere of concern” around Silvergate that possibly contributed to a run on the bank
- Sources told us the FHLB (Federal Home Loan Banks) refused to renew their monthly loan agreement with Silvergate due to political pressure from Warren, accelerating the bank’s losses
- Claims of criminal wrongdoing related to Silvergate’s association with FTX have never been proven, and no criminal charges have ever been filed against the bank
- Silvergate’s downfall may have been a primary cause of the 2023 regional banking crisis, which ultimately took down Signature, Silicon Valley Bank, and First Republic
In late 2022, Silvergate Bank was on top of the crypto world. Once a small California savings and loan association, Silvergate had transformed itself into the most important bank in the crypto sector, allowing it to stage an IPO and claim a majority of the sector’s institutional deposits. The bank’s Silvergate Exchange Network (SEN) had grown to become a crucial piece of infrastructure for crypto’s institutional players, and shares in the company had surged from $35 at the end of 2020, to $220 at the end of 2021.
Today, Silvergate no longer exists. Although its depositors were made whole, common shareholders were completely wiped out, and preferred shareholders are getting back pennies on the dollar. The bank paid out large fines to its regulators: $43 million to the Federal Reserve, $20 million to California’s Department of Financial Protection, and $50 million¹ to the Securities and Exchange Commission. After having announced their intent to voluntarily liquidate in March 2023, they finally filed for Chapter 11 bankruptcy last week.
Those who still remember Silvergate see the bank as emblematic of crypto’s worst elements and the most reckless behavior exhibited by regional banks during the crisis of 2023. A perfect storm of risk-seeking, turning a blind eye to crypto criminals, and compliance failures. Or at least — that’s how the story goes.
This story — today presented as established fact in the financial press and by the government² — goes like this:
Silvergate was a sleepy, small regional bank until it discovered crypto. When the space experienced surges of interest in 2017 and again in 2020, balance sheet expansion caused Silvergate’s deposits to swell. The bank then turbocharged its usefulness to the crypto space when it created SEN, allowing its clients — which now included many of the world’s largest crypto exchanges and trading firms — to settle between each other 24/7/365. (Because crypto settles 24/7, and bank wires only clear during banking hours, firms linking fiat and crypto often experience serious friction. SEN helped alleviate these issues.) Most crypto firms that mattered were clients of Silvergate, lending SEN powerful network effects.
In 2017, Silvergate onboarded Alameda Research, a secretive trading firm run by Jane Street alum Sam Bankman-Fried. Alameda quickly grew to become one of the most active trading shops in crypto, deepening its dependence on Silvergate. When Bankman-Fried launched FTX, a flashy offshore exchange in the vein of Bitmex or Binance, Silvergate started processing wires for them, too.
Silvergate grew to occupy a critical position in the domestic crypto industry. In the two years following Q4 2019, deposits ballooned from $1.8 billion to $14.3 billion. By year-end 2021, digital asset customers at Silvergate maintained $11.7 billion on deposit with the bank, equivalent to 82 percent of total deposits.
Not long after, things began to go south in crypto. In May, the ponzi-esque “stablecoin” UST, issued by Do Kwon’s Terra, went belly up. Then, over the summer and fall, lenders Voyager, Celsius, and BlockFi blew up in quick succession as a credit crunch hit the industry. In June, “proprietary” trading firm Three Arrows Capital collapsed due to its remarkably stupid long bets on Terra/Luna, causing further reverberations as the firm absconded with investor cash. The coup de grâce came in November 2022, with the messy and extremely public collapse of Sam Bankman-Fried’s empire in the Bahamas.
Throughout this period, balance sheets at crypto banks shrank as firms tried their best to satisfy their obligations and pay down their debt — or went out of business. Consequently, Silvergate suffered dramatic outflows, with non interest-bearing deposits (a large portion of which were attributed to crypto firms) falling from a peak of $14 billion in December 2021 to $7.4 billion in December 2022.
Silvergate faced significant problems on both the asset and liability sides. The liabilities were deposits owed to crypto firms in the process of shrinking their balance sheets or outright failing. The assets were treasury bonds, agency securities, and municipal bonds cratering in value due to dramatic federal interest rate hikes aimed at stemming advanced inflation. As the bank’s crypto depositors withdrew, Silvergate was forced to sell its newly depreciated long-dated bonds for a fraction of their original value, resulting in a net loss in calendar year 2022 of $948 million.
Simultaneously, questions began to emerge about Silvergate’s role in the FTX fiasco. Was it just a bank with a settlement network, or something more sinister? When Sam Bankman-Fried was processing funds in and out of FTX via Alameda, had Silvergate deliberately looked the other way? Had Silvergate been aware of the holes in Alameda’s and FTX’s balance sheets? Had the bank been party to the litany of ancillary crimes committed by SBF et al., which included campaign finance violations and bribing Chinese officials? As one of the most important banks for the Alameda/FTX apparatus, it was certainly plausible Silvergate was a co-conspirator.
These were the questions posed by an unlikely confederation of short sellers and high-level members of Congress. First, the bombastic short seller Marc Cohodes implied Silvergate was not only doomed, but actually implicated in SBF’s crime syndicate. Then, Cohodes’ claims found surprising support from one of the most important political voices in finance: Massachusetts Senator and member of the Senate Banking Committee, Elizabeth Warren. Warren wrote two letters to Silvergate CEO Alan Lane in December 2022 and January 2023, lambasting the bank and lending credence to claims that it might have criminal liability stemming from its relationship with FTX.
Reacting to these concerns, the Federal Reserve, FDIC (Federal Deposit Insurance Corporation), and OCC (Office of the Comptroller of Currency) issued a joint statement warning banks they faced significant risks if they served the crypto space. Two days later, Silvergate slashed costs and downsized to adapt to their shrinking depositor base. Another joint statement from federal bank regulators, again on the risk crypto posed to banks, soon followed. Meanwhile, shares in Silvergate were collapsing, falling to $16 by the end of 2022.
For the plucky Silvergate, this all proved too much to bear. On March 8, 2023, Silvergate leadership announced its intention to voluntarily liquidate the bank. This was an unusual move — normally failed or failing banks are sent into receivership (placed under the control of a government-appointed entity, typically the FDIC), then sold off to larger, sounder banks. But given the risks of criminal liability from the FTX fiasco hanging over the bank, perhaps it made sense to just shut it down completely.
To the average pundit, there’s nothing wrong with this story. Silvergate bet big on a risky industry and faced the consequences when a credit crunch led to a depository flight. It had onboarded the odious Sam Bankman-Fried, and possibly become party to his crimes. Meanwhile, the bank had greedily backed its short term liabilities (customer deposits) with long term, higher yielding instruments, and were forced to realize huge losses as they honored withdrawals. As a relatively small bank, Silvergate didn’t have the capital buffer to absorb these losses, so it chose to wind down.
The warnings from Senator Elizabeth Warren had proved prescient. By 2024, Silvergate had settled with the Fed, California’s financial regulator, and the SEC, with individual executives paying fines and being barred from the business. This was all the confirmation anyone needed that Silvergate had lied about its compliance program and had experienced significant surveillance failures in their engagement with FTX/Alameda. Silvergate took on inadvisable risks by serving the generally fraudulent crypto space, got greedy by betting on long-duration, higher-yielding bonds, and paid the ultimate price.
But what if that’s not the whole story?
What if there’s another version of events, in which Silvergate was a victim of FTX, not an accomplice to their crimes?
What if Senator Warren’s warnings about Silvergate served as a self-fulfilling prophecy, hastening the run on the bank?
What if the Biden administration deliberately killed off Silvergate — and some of its peers — in an attempt to decapitate the domestic crypto industry? What if this was the spark that lit the flame of a gigantic regional banking crisis?
And what if the settlements Silvergate made with its regulators effectively covered the government’s tracks, allowing it to continue to deny the existence of Operation Choke Point 2.0?
This is the version of events no one is talking about, and one that official government accounts rebuke, but it’s what I’ve come to believe. Aside from a relative few on Crypto Twitter, it’s a story no one seems interested in — the mainstream financial press most of all. But in my mind, the official narrative is historical fiction at best, and recent events have only further convinced me of the fact.
Until now, Silvergate executives have been muzzled by regulatory actions and litigation, unable to tell their side of the story. Based on conversations with confidential sources, and new revelations in Silvergate’s recently public bankruptcy filings, I believe Silvergate could have survived its drawdown — and was on a path to do so — before being hamstrung by regulators continuing to advance the covert Biden admin scheme to destroy the US crypto industry we now know as Operation Choke Point 2.0. In so doing, government officials eliminated Silvergate’s ability to operate as a bank focused on the crypto industry, and forced their “voluntary” liquidation.
I further believe the targeted harassment of Silvergate which led to its downfall was a primary cause of the 2023 banking crisis, which ultimately took down Signature, Silicon Valley Bank, and First Republic, and threw the broader banking system into disarray.
In short: the government’s desire to decapitate the domestic crypto industry through covert rulemaking aimed at crypto-focused banks both initiated and worsened the banking crisis of 2023, the largest since the great financial crisis in 2008.
I first started hearing from individuals at Silvergate, Signature, Silicon Valley Bank, and First Republic that they were under inordinate pressure from regulators in early 2023. At the same time, multiple regulatory agencies were firing warning shots across the bow of crypto-adjacent banks. There was Elizabeth Warren’s hostile letter to Silvergate, the January 2023 joint statement from three regulatory bodies regarding crypto risk to banks, the Fed’s denial of crypto-focused Custodia’s application to become a Federal Reserve member bank, and the National Economic Council (NEC) cautionary statement on banks and crypto.
In response, several banks that provided services to crypto firms began to curtail or eliminate their digital lines of business entirely. This retreat was reminiscent of Operation Choke Point, an Obama-era program aimed at marginalizing politically disfavored industries like firearm manufacturers not by passing legislation, but by using financial regulators to threaten banks providing services to those industries. In my first piece of reporting for Pirate Wires on the topic, I coined “Operation Choke Point 2.0” to describe how these same tactics were being used against the crypto space. At the time, Silvergate was under significant pressure, but still operational.
Thirty days after I published Choke Point 2.0, Silvergate would announce its voluntary liquidation. The following day, Silicon Valley Bank’s collapse began in earnest, and on Sunday night, New York regulators sent Signature Bank following into receivership, despite protests from board member Barney Frank that the bank was still solvent, and that the move was politically motivated.
Based on discussions with individuals with knowledge of the affected banks, I wrote a follow-up piece for Pirate Wires, alleging that Silvergate had been forced to close due to a secretly imposed 15 percent cap on crypto deposits, and that Signature had been wrongly put out of business. Additional provocations included the FDIC’s unwillingness to allow Signature to sell off its crypto-focused deposits or its SigNet product, a 24/7 settlement layer similar to Silvergate’s SEN. Instead of maximizing value for taxpayers by securing a price for the assets, the FDIC instead allowed these crypto-related lines of business to wither on the vine. Signature’s crypto deposits were forcibly returned to clients rather than being inherited by its acquirer, Flagstar Bank. By threatening the banks themselves, these actions not only looked like a covert attack on the crypto space, but they also potentially hastened, or even caused the demise of, the two most pro-crypto banks in the US.
The Silvergate story was particularly vexing because, unlike at Signature, no one was able to speak out and tell their side of the story. I later learned that key elements of the regulatory crackdown, in particular the 15 percent threshold on crypto deposits (conveyed to Silvergate by the SF Fed, with apparent assent from other regulatory bodies) were considered “confidential supervisory information” (CSI)³, and hence ineligible to be shared publicly. Perversely, CSI is intended to protect banks themselves from leaks of information surfaced in examinations — routine procedures where regulators evaluate bank management, safety and soundness, and regulatory compliance — that could hurt their standing, but in this case, it was weaponized against the banks to protect the regulators’ reputation in the eyes of the public.
So far, we have seen no acknowledgment from the Fed, its regional branches, or the FDIC regarding the 15 percent deposit caps, which government authorities primarily messaged verbally to a number of crypto banks, rather than in writing. Why did Silvergate and others feel compelled to comply with these informal deposit caps? An insider explained it to me this way: “They have eight million ways to shut us down, any way they want. When they say you gotta do something, you do it.” The caps were never publicly discussed or formally opposed as a rule, but when your primary regulator threatens you, you comply. “The regulators can pick anything and say, ‘Your compliance program is broken’ as a pretext for shutting you down,” the source told me.
According to people briefed on the situation, though the 15 percent threshold on crypto deposits was issued to Silvergate by the SF Fed, it originated in DC. It is now widely suspected that the architect of this policy was Bharat Ramamurti, then-deputy chair of Biden’s National Economic Council, a powerful advisory body that coordinates economic policy across many executive agencies. Ramamurti was senior counsel for banking and economic policy in Senator Elizabeth Warren’s office from 2013 to 2019 and economic policy director on her 2020 campaign. Now, he’s an advisor to the Harris/ Walz presidential campaign.
Bharat Ramamurti When I reported on Choke Point 2.0, there was little on the record to corroborate my findings, as Silvergate leadership and other insiders were ensnared in regulatory settlements and litigation, prohibiting them from speaking publicly. But Silvergate’s recent bankruptcy filings allowed them to tell their side of the story for the first time.
The first-day bankruptcy filing from Silvergate Chief Administrative Officer Elaine Hetrick lays out the company’s side of the story, to the extent legally permissible. She starts by noting the difficulties Silvergate faced due to the crypto market downturn and the significant interest rate hikes, but maintains the bank had sufficient assets to operate as a going concern in early 2023. The bank’s challenges, however, “reached an inflection point in early 2023 following further regulatory scrutiny regarding its business model.”
Hetrick states that in early 2023, Silvergate “had stabilized, was able to meet regulatory capital requirements, and had the capability to continue to serve its customers,” but maintains that “the increased supervisory pressure on Silvergate Bank and other banks focused on servicing crypto-asset businesses forced Silvergate Bank to a point where it would have needed to remake its business model away from its focus on crypto-asset businesses.”
After the phrase “the increased supervisory pressure on Silvergate Bank,” Hetrick adds a footnote: “Silvergate is prohibited by law from disclosing confidential supervisory information, which broadly includes correspondence and communications with the Federal Banking Regulatory Agencies as well as reports of supervisory examination.” This means there’s more to be said about the nature of the pressure — which in my view would include the verbally-messaged 15 percent cap on crypto deposits — but Hetrick is prohibited from going into detail here, due to the supervisory pressure being considered CSI.
Hetrick is adamant that sudden regulatory shifts, not the financial difficulties it had faced from the drawdown in deposits, forced Silvergate to shutter. In initial filings, she explains: “This public signaling and sudden regulatory shift made clear that, at least as of the first quarter of 2023, the Federal Bank Regulatory Agencies would not tolerate banks with significant concentrations of digital asset customers, ultimately preventing Silvergate Bank from continuing its digital asset focused business model.”
She also points to the failure of Signature Bank as indicative of an anti-crypto stance on the part of regulators, referring to Chair Barney Frank’s comments that its closure was at least partially due to a desire to “send an anti-crypto message.” Hetrick notes that, tellingly, the FDIC refused to include $4 billion in crypto-related deposits in the sale of Signature to Flagstar Bank. As one confidential source told me regarding the FDIC’s refusal to sell crypto-related deposits or Signature’s SigNet, “The government is setting policy not based on law, but through selective sales.⁴”
For now, Hetrick is unable to share the full extent of regulatory pressure the Fed applied to Silvergate, but her testimony, given under oath, is still extremely revealing. Notably, it’s a stark departure from the official government account as written by the GAO (Government Accountability Office), which makes no mention whatsoever of the novel regulatory pressures that ultimately doomed the bank.
One of the first clues something with Silvergate’s downfall was suspicious was that it chose to voluntarily liquidate in March 2023, rather than entering FDIC receivership. This is so uncommon that I had to dig deep to find similar examples, and even then, I could only identify a tiny handful in the last 30 years. The most notable was West Virginia’s First National Bank of Keystone, a small bank with $1.1 billion in assets which voluntary liquidated in 1999 before eventually being taken over by the FDIC. Aside from First National, I couldn’t find any voluntary liquidations of banks with over $100 million in assets. It’s truly a rare thing. In fact, a source told me that when Silvergate leadership expressed its intention to voluntarily liquidate the bank, their California regulator, having no experience with the procedure, was completely unsure of how to proceed.
Why is this notable? In my view, how rarely banks choose voluntary liquidation is further evidence Silvergate was ultimately killed by regulatory mandate, not the bank run it suffered. After all, in March 2023 — when the bank voluntarily liquidated — it had already survived the run. In fact, deposits had ticked up quarter over quarter from Q3 to Q4 2022.
Instead, I learned the economics of the business simply didn’t make sense after regulators imposed the new 15 percent crypto deposit limit. SEN would be rendered useless, as the bank wouldn’t be able to maintain accounts with all the relevant firms that would be transacting. And the drastically reduced revenue streams would no longer justify the high fixed costs of supporting crypto firms (especially from a compliance perspective). Sources told me leadership even considered charging large clients high fixed fees for banking access — believing they would be willing to pay, since so few other banks served crypto at that time — but they couldn’t make the numbers work. So they chose to wind the bank down in an orderly manner and make all depositors whole, which they were able to do.
We don’t know what would have happened had Silvergate been given the opportunity to rebuild its business after it right-sized following the bank run, rather than being permanently hamstrung by the 15 percent crypto deposit cap. We do know that the balance sheets of crypto firms recovered strongly in the US in 2023 and 2024, as the credit crunch ended and large caps like Bitcoin rallied once again.
“If the [15 percent] limit hadn’t been imposed, Silvergate would be thriving right now,” someone familiar with the matter told me. I tend to believe this. There has been a gaping hole in domestic crypto banking since the imposition of Choke Point 2.0, and any firm brave enough to offer banking to crypto firms would have done tremendously well — had any been allowed to survive. Anecdotally, connections to domestic banks willing to onboard crypto clients is the number one request from portfolio companies at my blockchain-focused venture capital firm Castle Island. Unfortunately, regulators haven’t allowed the market for crypto-friendly banks to recover. As a result, crypto startups are moving offshore, where more banks are willing to support digital asset firms.
On the first day of 2023, there were three major banks commonly known to serve crypto firms: Silvergate, a smallish bank almost exclusively focused on crypto; Signature, a relatively large bank with a significant but not exclusive concentration of deposits from crypto firms; and Metropolitan Commercial Bank, another boutique with a crypto arm. Silicon Valley Bank also had a single large crypto client in stablecoin network Circle. Four months later, they were all gone, reminiscent of the Henry VIII nursery rhyme about his doomed wives — “divorced, beheaded, died.” In this case, it was “liquidated/ collapsed/ acquired, exited the crypto business, and collapsed/ acquired.” At the two most notable crypto boutiques — Silvergate and Signature — there is strong evidence they were actively destroyed by regulators, rather than dying of natural causes.
Any bank looking to fill the hole left by these three institutions would have faced a frigid regulatory environment and the presumed informal 15 percent cap on crypto deposits that rendered the economics infeasible. Previously, a bank could orient itself toward the crypto space and justify the investment in a tech stack and compliance overhead if they could expand their depository base, as Silvergate and Signature did. They could also create valuable intra-bank settlement networks like SEN and SigNet if they were able to get a meaningful share of the crypto industry under one roof.
With hundreds of crypto firms in the US suddenly without banking access after Signature et al. went down, many chose to move over to fintech firms like Mercury, but things were still extremely tenuous. Even today, few banks are willing to onboard crypto firms, especially if they need more bespoke services beyond simple cash management. Those that serve the crypto industry do so quietly, cognizant of the fact that if they become known as a “crypto bank,” they’ll be maimed by regulators.
This is exactly what happened to the two banks that tried to fill Silvergate’s and Signature’s shoes. After they ceased operations, Customers and Cross River were the two firms known to still bank crypto firms. And both were punished by their regulators.
In May 2023, the FDIC hit Cross River with a consent order, which kneecapped the bank’s crypto efforts. Although the order didn’t mention Cross River’s crypto business, and it covered the bank’s fintech partnerships, it’s still plausible that it came on the FDICs radar due to its prominence as one of the few remaining pro-crypto banks.
More directly, in August 2024, the Federal Reserve Bank of Philadelphia issued an enforcement action against Customers Bank, citing deficiencies with the bank’s “risk management practices and compliance with the applicable laws, rules, and regulations relating to anti-money laundering” in connection with its digital assets business. Just like Silvergate’s SEN and Signature’s SigNet, Customers operated an instant settlement business for clients called Customers Bank Instant Token (CBIT).
Such intra-bank settlement networks appear to be utterly toxic to regulators. Sources with knowledge of the Cross River and Customers matters to whom I spoke surmised that the Fed’s July 2023 release of FedNow — an instant payment service that allows banks and credit unions to settle transactions in real time, 24/7 — could explain the Fed’s particular hostility toward banks that had created their own instant settlement networks. Certainly many view the timing as suspicious. I’m not entirely persuaded by the theory, but the fact that SEN, SigNet, and CBIT were all eliminated or defanged around the time FedNow launched did raise eyebrows.
Since the imposition of Choke Point 2.0 in early 2023, other banks have tentatively sought to fill the gap left by Silvergate and Signature, and later by Customers after it curtailed its crypto efforts. It’s become a running joke at this point — I periodically hear about certain banks launching a crypto practice, then invariably, months later, they will abruptly reverse course. I can personally attest that this has been the case at MVB Bank and Axos Bank, but there are undoubtedly more.
These days, if a bank does serve crypto clients, it keeps the service to a deliberately small portion of its depository base, and tends to downplay it in public. As a result, crypto startups find it difficult to even identify banks willing to serve them, and the few banks who still support institutional crypto clients are slow-moving, expensive, and unwilling to offer services beyond mere cash management.
As an aside, it’s worth noting that in 2023 and 2024, the FDIC extended its Choke Point 2.0 playbook from banks serving crypto to banks serving non-crypto fintech startups as well. In April 2024, the American Fintech Council (AFC) wrote a letter to the FDIC accusing it of using its enforcement powers to quietly curb fintech activity in the US by bringing selective enforcement against banks serving fintech firms. As the AFC said in their letter: “While your agency has not issued public guidance or other statements explicitly admonishing or limiting banks from engaging in partnerships with fintech companies we have identified a distinct ‘regulation by enforcement’ approach from the FDIC.” The AFC noted that banks not partnered with fintechs had a 1.8 percent chance of facing an enforcement action from the FDIC, whereas fintech-partnered banks had a 15 percent chance of a regulatory rebuke.
Just as with Choke Point 2.0 efforts against crypto, the government’s mode of engagement with fintech has been unusually antagonistic and ideological in nature. Instead of proposing new legislation and hosting a public debate, or even engaging in notice-and-comment rulemaking where affected parties would have the right to provide feedback, these agencies make arbitrary new rules and impose them by enforcement — and whispered “advice” which banks have no choice but to follow.
Critics reading this article could point out that Silvergate did end up facing a consent order from the California Department of Financial Protection and Innovation (CA DFPI), which carried a $20 million fine. They also paid a $43 million fine to the Federal Reserve, and settled with the SEC for $50 million (though the bank was able to ‘apply’ the $63 million it had already paid to the latter, so they never actually paid the SEC anything). It’s worth noting that Silvergate has well over $100 million remaining on the balance sheet and has already paid out the $63 million in fines, so these fines would not have put them out of business had they still been operational.
So what if regulatory pressure doomed Silvergate? They clearly made mistakes, and so the short sellers and Senator Warren were right… right? If you dig into the settlements, the actual charges against the bank fall short of the critics’ worst claims — and none are criminal. (In February 2023, the Justice Department initiated a fraud probe to investigate the bank’s dealings with Alameda/ FTX, but nothing has since materialized.)
As for the SEC and California Fed settlements, Silvergate neither admitted nor denied any of the allegations made.
The SEC case against Silvergate hinges on the fact that the bank and its CEO Alan Lane made “misleading statements to the investing public that the bank’s BSA [Bank Secrecy Act]/ AML [Anti-Money Laundering] compliance program was adequate,” a far cry from the most hysterical charges levied by Warren and the bevy of critics. As one source briefed on the situation explained to me, the core of the SEC’s allegation was that Silvergate’s regulatory examinations showed “matters requiring attention” in their BSA program, so it was misleading to represent to the public that they had a “robust AML program.” However, virtually every bank examination includes some nominal “matters requiring attention,” as there are always areas for improvement.
Regarding Silvergate’s failure to detect FTX’s various schemes, banks are not expected to catch every single instance of suspicious activity among their clients, although leaders at the bank did tell me they regretted not detecting FTX’s sketchy behavior. The SEC did initially attempt to claim that Silvergate was aiding and abetting the fraud at FTX, but they were unable to prove anything to that effect.
“Where we were not as buttoned up as we should have been was in regards to the FTX/Alameda clients. That was a function of the bank growing incredibly quickly,” a Silvergate executive told me. “Probably we could have figured out FTX was brokering deposits via Alameda. In retrospect I think we could have pieced this together and figured it out. But this is not a legal failure and we’re not required to catch everything. Our program passed legal muster. That’s something we could have done a better job of. But there was no intentional wrongdoing or cooperation with the bad guys.”
In the FTX investigation, Silvergate was listed as a victim, not a co-conspirator.
Of the three settlements, executives at Silvergate felt the SEC’s case was the least warranted. “The SEC was crazy. They wanted headlines. They were hitting us unnecessarily,” one told me. As I mentioned above, the SEC’s case didn’t concern Silvergate’s compliance failures, but instead perceived falsehoods in what their leadership said about its BSA/ AML program. According to a Silvergate executive that I spoke with for this story, “The SEC was stretching mild conclusions from the Fed and exaggerating them.” One wonders why the SEC would invest energy in suing a defunct bank that did not lose money for depositors — especially if the agency didn’t actually collect any fines for the trouble.
The Federal Reserve settlement hinges on “deficiencies in Silvergate’s monitoring of internal transactions through the SEN.” As one source described it: “When you read the language, it’s pretty milquetoast” — the settlement contains no allegations of affirmative wrongdoing. The actual issue, I discovered, was that Silvergate’s transaction monitoring system for SEN had gone through an upgrade and experienced an outage. Because SEN was a settlement network for Silvergate’s own clients, every transaction on SEN was between clients known to the bank that had gone through rigorous KYC (Know Your Customer) and onboarding processes. So even during the monitoring outage, it’s not like the transactions were between unknown firms. One source told me that SEN volumes were around $2 trillion in the aggregate; massive transfers were common, so FTX/Alameda transfers would not necessarily have stood out as suspicious.
Why would three regulators sue a bank that had already agreed to voluntarily liquidate, and ensured that depositors were made whole? The fines came out of investors’ pockets, mainly hurting common shareholders — ordinary members of the public. Deterrence, perhaps. But there’s a darker interpretation: regulators wanted to publicly establish unlawfulness to stand in for the real reason Silvergate was doomed — the secretly-imposed crypto deposit limit. “The Fed changed their policy based on OCP 2.0, but they don’t want to admit that,” a source told me. “So they looked around and tried to find wrongdoing. The settlement is a big number — but they didn’t find anything.” It makes sense: if the Fed could extract a settlement from a defunct bank, they could point to it as evidence the bank failed through mismanagement, rather than due to regulation-by-bullying.
Another source told me, of the settlements: “For people in Congress, the fact that Silvergate got fined ‘proves wrongdoing’ and vindicates their anti-crypto stance. They wanted to be able to show people they had gotten justice for FTX.”
The settlement with the California Department of Financial Protection and Innovation is almost identical to the Fed complaint, citing “deficiencies with respect to Silvergate’s monitoring of internal transactions.” Initially, sources told me, California wanted a $200 million fine, even though they couldn’t prove negligence or any wrongdoing beyond “deficiencies.” The governor’s office was directly involved, and the first set of proposed charges included “elder abuse” and “elder fraud” — despite the fact that Silvergate had no retail customers.
In all the settlements Silvergate ultimately assented to, there was no accusation of a criminal violation nor any claim that Silvergate had knowingly facilitated money laundering.
One particularly bizarre subplot in this entire affair is the intersection of short seller Marc Cohodes and Senator Elizabeth Warren. As we now know, Senator Warren wrote a letter in December 2022 to Silvergate accusing the bank of breaking the law. From the letter (superscript removed):
The arrangement between FTX and Alameda, which depended on your bank’s depository services, is just one example of the “lax record-keeping and poor centralized controls at the heart of the [FTX] empire’s unraveling” – and may have been illegal. Alameda’s depository account with your bank appears to be at the center of the improper transmission of FTX customer funds. Silvergate’s failure to take adequate notice of this scheme suggests that it may have failed to implement or maintain an effective anti-money laundering program, as required under the Bank Secrecy Act (BSA). What’s more, your bank’s failure to report these suspicious transactions to the Financial Crimes Enforcement Network (FinCEN) may constitute yet another violation of the law.
On January 30, 2023, Warren wrote a second letter, complaining about Silvergate’s responses to her first one, this time appearing to pressure the Federal Home Loan Banks (FHLB), which Silvergate was using for last-resort liquidity. It seems her objective was to get the FHLB to pull the rug on Silvergate, forcing them to close. The FHLB eventually declined to renew their monthly facility with Silvergate, which may have been the straw that broke the camel’s back.
“Someone was putting pressure on the FHLB,” one person familiar with the situation told me. “If Silvergate had been allowed to hold to maturity the government-backed securities, they would have been able to stem their losses. They were trying to liquidate them slowly to minimize losses. But the FHLB started getting pressure, so they pressured them to pay back the loans.” To me, it certainly appears like the FHLB responded to Warren’s pressure campaign and cut Silvergate loose. (At the time, FHLB claimed it “did not request or compel” the bank “to prepay its outstanding advances.”)
At the same time, Cohodes was also waging a public campaign against Silvergate, writing numerous memos and tweets, and making video appearances containing all sorts of allegations about the bank.
Cohodes went far further than simply claiming Silvergate (and Signature, his next target) would collapse. He had a habit of calling the two banks “publicly traded crime scenes.” “You have terrorists, you have drug dealers, you have human traffickers,” he said in one interview, referring to SEN. In another interview with The Block, Cohodes repeated the “publicly traded crime scene” aphorism and argued that Silvergate CEO “Alan Lane belongs in prison.”
These extraordinary claims, of course, have never been proven. Silvergate has not faced any criminal liability for either FTX/ Alameda (the DoJ came up empty after its highly touted investigation), nor has any liability regarding human trafficking or terrorism since materialized. Obviously this could change, but as of yet nothing has validated Cohodes’ most extreme claims.
We also know that Cohodes reached out to Warren’s office directly. In January 2023, he emailed her staffer a link to a DoJ complaint (which does not mention Silvergate). “Have you seen this?” he wrote. “Would not be all that surprising if money from ISIS moved through Silvergate, and that would be attention getting.”
Sources with firsthand knowledge told me that Cohodes emailed a slide deck entitled “Silvergate-101” with his allegations against the bank to various members of Congress around the same time. The deck, which I have reviewed, cites anonymous Twitter accounts like @bitfinexed, an account known primarily for spreading conspiracies about the stablecoin Tether.
One individual told me about the Warren-Cohodes relationship: “For sure Warren’s letters intensified the run [on Silvergate]. What makes me sick is that Cohodes put together a deck and was shopping it to members of Congress including Warren. Much of his information was crowdsourced from Twitter.” Regarding Cohodes’ claims that Silvergate had done business with terrorists or human traffickers, the individual told me “there’s no basis for that whatsoever.”
Cohodes doesn’t appear to be particularly shy about his role in Warren’s December 2022 letter. “Who do you think inspired that letter?” he wrote in a quote tweet of the letter in June 2024. Whether or not he actually spoke with Warren’s office, he appears happy to take credit for her work harassing the bank. Cohodes is also a Warren supporter, having told the New York Times during her 2020 presidential run, “She would be great, I think she would be a breath of fresh air.”
Cohodes certainly has a habit of trying to enlist regulators in his short selling campaigns. In January 2023, he sent the Federal Reserve a memo with accusations against Silvergate, and one to the OCC in March 2023 regarding Signature. He also admits to having sent memos to the SEC and FDIC. Many of these celebrity short sellers try to make their predictions into self-fulfilling prophecies by looking for allies in their campaigns; Cohodes appears to have played the game very well.
We don’t know if Warren reciprocated Cohodes’ entreaties. But we do know that she either wittingly or unwittingly helped short sellers by launching a campaign against Silvergate with two blistering letters in which she effectively accused them of aiding and abetting FTX’s crimes. Arguably, she also precipitated the ultimate collapse of Silvergate by pressuring the FHLB to cut off its line of credit, which was the thrust of her second letter. Her standing as member of the Senate Banking Committee gave her words huge weight. If she actually did coordinate with Cohodes to destroy a bank — causing losses to shareholders and creditors, and orphaning depositors — it would be extremely troubling.
After Silvergate filed for voluntary liquidation, Senator Warren pounded her chest, tweeting, “As the bank of choice for crypto, Silvergate Bank’s failure is disappointing, but predictable. I warned of Silvergate’s risky, if not illegal, activity — and identified severe due diligence failures. Now, customers must be made whole & regulators should step up against crypto risk.” Far from being “disappointed” by Silvergate’s failure, she seemed practically thrilled by it. To her, the bank’s failure was evidence that crypto was an unacceptable risk to the banking sector, and so should be ringfenced from the financial system. Of course, she wasn’t a mere impartial observer — her own allegations against Silvergate helped create the atmosphere of concern around the bank that led to the run, especially her claims that they were engaged in illegal activity. It’s easy to take credit for predicting a bank’s collapse when you may be, in fact, one of the reasons the collapse occurred.
This isn’t the first time a Senator has been accused of fomenting a bank run. In June 2008, Senator Chuck Schumer wrote a letter to federal regulators expressing concerns over IndyMac, which likely hastened that bank’s collapse. Consequently, he faced a serious backlash for his role in the failure. But Warren hasn’t been dealt any such recriminations. A Senator can question the solvency of a bank, but it’s self-evident such statements risk becoming self-fulfilling prophecies, especially when made so bombastically, as Warren did.
Sen. Elizabeth Warren The collateral damage wrought by the Silvergate wind down was catastrophic. The immediate effect was the destruction of shareholder capital in the business. Additionally, depositors were left scrambling to find new banking partners. The loss of SEN also hurt stablecoin liquidity and likely intensified the liquidity issues faced by USDC as it temporarily de-pegged during the SVB crisis. More damagingly, Silvergate’s collapse was the first trigger in a grave banking crisis that would ultimately take down SVB, Signature, and First Republic, banks which had $538 billion in deposits at the time of the collapse.
Would these banks have collapsed, anyway? It’s possible, but the fact remains: Silvergate was the first bank to suffer a run in that volatile spring of 2023. Banking panics are contagious. It’s not far-fetched to imagine that Warren’s fear mongering caused more than a few depositors to pull their funds from Silvergate. Whether or not she actually colluded with Cohodes — and the public deserves to know the extent of their relationship — a powerful Senator effectively encouraging a bank run which escalated into a serious banking crisis is a complete betrayal of duty.
Sticking up for a bank that did business with FTX, suffered a bank run, was voluntarily liquidated by management, then settled with three different regulators is not an enviable task. But an injustice visited upon a flawed subject is no less of an injustice. Silvergate could perhaps have tightened up its money laundering controls or detected SBF’s improper transfers earlier. But that doesn’t mean it deserved to be harrassed out of existence. One Silvergate insider told me: “We were a group of people that were trying to do the right thing and we understood risk management. It really was a pretty conservative place. And that stems from Alan Lane, and his 40 years of banking expertise.”
Even when I was initially investigating Silvergate and Signature, a number of bankers, sympathetic to my cause, told me it wasn’t worth publicly supporting Silvergate, muttering ominously that the bank may have indeed done some reprehensible things. But this ended up not to be the case. Silvergate was the victim of a scathing and unconstitutional regulatory crackdown — an imperfect victim, but a victim nonetheless. What’s more, Washington’s desire to take down the crypto banks — which they accomplished deftly in March 2023 — was the spark that lit the fire of a massive regional banking crisis, which spread far beyond crypto. Yet today, no one levels criticism at President Biden, Senator Warren, or the Fed for starting a banking crisis in their attempts to stymie the crypto sector.
At the end of the day, if policymakers in Washington want to ringfence the crypto industry and withhold its access to traditional banking, there’s a valid way to do that: through public debate and legislation. If they had passed a law through Congress limiting crypto firms’ access to banks, it would have been devastating to the sector, but it would have at least been valid under the rules of our democracy. But that’s not how the Biden administration officials went about doing things. They effectuated their crackdown through covert backroom dealings, by deputizing the bank sector, and using threats and intimidation rather than public rulemaking. Some portion of the crackdown was disseminated through various agency statements, but much of it was simply handed down verbally with no paper trail, like the presumed 15 percent cap on crypto-related deposits. Other measures were simply taken in the ordinary course of business, such as the refusal to sell on any of Signature’s crypto business.
Ultimately, it’s precisely these marginal cases — the ones that no one wants to stick up for — where we have to draw the line. What happened to Silvergate was a travesty, and the public deserves to know the truth. Sympathetic members of Congress should hold a hearing and give executives at affected banks the chance to testify, with a waiver on criminal liability for sharing confidential supervisory information.
¹ The SEC fines did not involve the transfer of value, as Silvergate was able to ‘apply’ credit for the fines already paid.
² The GAO’s post-mortem on Silvergate blamed rising rates alongside idiosyncratic crypto risks and flighty depositors for the Silvergate collapse. They did not mention regulatory changes which adversely affected the bank’s business model.
³ Note that criminal liability for sharing CSI can be waived if, for instance, the House or Senate calls a hearing on the topic of the banking crisis and offers immunity to individuals invited to testify.
⁴ It’s also worth noting Silvergate purchased the Diem (stablecoin) IP from Facebook based on recommendations made by Biden’s Presidents Working Group, seemingly giving the green light to bank-issued stablecoins. This stance shifted dramatically in 2023 as the Fed ended up effectively banning banks from engaging with stablecoins. This caused the Diem assets to become effectively worthless.
Tyler Durden
Sun, 09/29/2024 – 19:50 - Musk Warns "If Trump Is Not Elected, This Will Be The Last Election"
Musk Warns “If Trump Is Not Elected, This Will Be The Last Election”
Elon Musk has argued that the influx of illegal immigrants into the United States, “something that the Democrats are expediting as fast as humanly possible,” will effectively establish a ‘one-party state and Democracy is over.‘
Responding to a thread on X in which Sen. Mike Lee (R-UT) pointed out that the DOJ is suing Alabama for trying to remove noncitizens from its voting lists, and blocked the SAVE Act – Musk noted that “Everywhere in America will be like the nightmare that is downtown San Francisco.:
Read Musk’s entire post below (emphasis ours),
Very few Americans realize that, if Trump is NOT elected, this will be the last election. Far from being a threat to democracy, he is the only way to save it!
Let me explain: if even 1 in 20 illegals become citizens per year, something that the Democrats are expediting as fast as humanly possible, that would be about 2 million new legal voters in 4 years.
The voting margin in the swing states is often less than 20 thousand votes. That means if the “Democratic” Party succeeds, there will be no more swing states!!
Moreover, the Biden/Harris administration has been flying “asylum seekers”, who are fast-tracked to citizenship, directly into swing states like Pennsylvania, Ohio, Wisconsin and Arizona. It is a surefire way to win every election.
America then becomes a one-party state and Democracy is over. The only “elections” will be the Democratic Party primaries. This already happened in California many years ago, following the 1986 amnesty.
The only thing holding California back from extreme socialism and suffocating government policies is that people can leave California and still remain in America. Once the whole country is controlled by one party, there will be no escape.
Everywhere in America will be like the nightmare that is downtown San Francisco.
Yet the media gaslights and continues to say this is a conspiracy theory.
Here is the Democrat nominee saying she wants to give millions of illegals citizenship. pic.twitter.com/orWoqsFzp0
— Collin Rugg (@CollinRugg) September 29, 2024
Tyler Durden
Sun, 09/29/2024 – 19:15 - Will China's "Whatever It Takes" Moment" Work
Will China’s “Whatever It Takes” Moment” Work
By Marcel Kasumovioch, Deputy CIO of Coinbase Asset Management
“We need to establish a strong benchmark for selecting and employing people, conscientiously implement the ‘three exemptions,’ and support those who take responsibility and get things done.” This statement from the extraordinary Politburo meeting left no doubt about the leadership’s intentions.
Those who demonstrate “the courage to take responsibility and innovate,” in Xi’s words, will be rewarded, with exemptions, a “responsibility and punishment” waiver for those acting on policy guidance. The thousands of financial executives who exited their positions and the Party since August serve as a reminder to those who resist.
The Politburo followed sweeping actions taken by the central bank, in solidarity with PBOC governor joining the heads of the NAFR and the CSRC in announcing the measures. These included rate cuts, property loans for unsold homes, and equity buyback facilities – policies that underscore China’s desire for firm control over its economy, directing the capital of savers like the strings of a puppet rather than relying on the invisible hand of the market.
China’s economy is cluttered with unsold homes, unfinished projects, and unused land, totaling an astonishing $4.1 trillion at mid-year. This isn’t China’s first financial hurdle: restructuring the FX market in 1994, bank overhauls in 1998 and 2004, asset management crackdowns in 2015, and the COVID response all showcased the country’s approach to handling economic strains.
Financial repression and the central bank’s balance sheet softened these shocks before – and once again, this playbook of control is in motion. But as China’s economy grows more complex, maintaining this control becomes increasingly difficult. The global economy is infinitely more complex and managing it through sheer willpower alone is impossible.
Reform, not stimulus, requires real courage. And it’s a global issue. A good economy is one that works for the many, not the few. Markets have a way of identifying and enforcing necessary reforms for that outcome, and nations that heed this call will strengthen their standing – near-term pain for long-term gain. After all, no country can simply inflate its way to prosperity.
Courage:
“The vast majority of party members and cadres must have the courage to take responsibility and dare to innovate,” Xi conveyed with urgency at this week’s Politburo meeting. The timing of the meeting itself reflected the gravity of the situation, being held earlier than usual. The Politburo introduced a rare “responsibility and punishment” waiver, offering protection to officials willing to embrace Xi’s challenge. This marks China’s “whatever-it-takes” moment, where pragmatic policies take precedence: a good economy is one that works.
The foundation of Xi’s “courage economy” was laid the day before:
- PBOC rate cuts will inject 1 trillion RMB in liquidity, while loans for unsold homes can now cover the entire purchase price.
- The downpayment requirement for second-home buyers was reduced to 15%, in line with first-time buyers.
- Meanwhile, bank regulators committed to a more gradual increase in capital requirements, and specialized refinancing facilities were established to encourage equity buybacks.
These coordinated actions signal a unified directive to stabilize the economy.
Deng Xiaoping famously quipped, “It doesn’t matter whether a cat is black or white, as long as it catches mice,” as China began its economic reforms in 1979. Desperate for an effective economy, China sought to balance traditional goals with pragmatic policies. Unlike many emerging markets with lofty objectives, China has managed to execute with its share of world GDP rising from 2% in 1980 to nearly 20% today. How did it avoid the pitfalls of past crises? Through a strong emphasis on domestic control — a policy that does not scale well.
Mousetrap:
Take China’s navigation of the 1990s Asia crisis. While its neighbors experienced fierce capital outflows, currency devaluations, and bank failures, China maintained its FX peg at around 8.33 to the US dollar. Stability masked material internal strain, with non-performing loans for Chinese state banks surging to 24% in 1998. But it was a domestic issue—by 1997, FX reserves were eight times greater than short-term external debt. Banks were restructured, imposing losses on domestic savers through reduced returns and financial repression.
The repression strategy was repeated in 2004 and 2016 and now underpins the latest policy measures. China’s gross national saving rate is 43% of GDP, a captive audience given limited options for allocating their funds. As a result, these savers endure abysmal rates of return—the dark side of financial repression. It’s far from a free lunch. From bonds to stocks to real estate, this captive audience pays the price for policy through depressed returns. Market economies must do more with less, competing for global capital in freer environments.
Will the “courage economy” work? In the near term, almost certainly yes. But its limitations are equally clear. China’s gross national saving rate is falling, shrinking the pool of capital available to plug financial holes in an increasingly complex economy. Leaders cannot strengthen an economy by willpower alone—incentives do the heavy lifting. Financial repression merely defers problems to the next generation, a global issue with more immediate consequences for China’s shrinking population. The time for a new trap to catch the mice may soon come.
Anecdote:
“It’s not the mindset of an emerging market. It’s the mindset of an emerging superpower,” said one of the greatest macro investors of all time to me, his eager protege. This time, it was China’s FX revaluation making the headlines – not the investor’s famous predictions of devaluations in the past.
“The world mistakes China as ideological. 1979 marked the shift to pragmatism,” he continued, referencing the pivotal moment when Deng Xiaoping opened China’s doors to the world. “It doesn’t matter whether a cat is black or white, as long as it catches mice,” the protege eagerly recalled from Deng, encapsulating the shift to a results-driven economic policy.
China’s appearance at the 1979 World Economic Forum marked the beginning of its new economic era. Controlling inflation became a priority, achieved after 15 years of effort. The two-tiered foreign exchange system was replaced in 1994, laying the groundwork for a modern, integrated economy – though not without one last devaluation to prepare for the transition.
China managed banking crises internally, with bank recapitalizations in 1998 and again in 2004. These were not the actions of a typical emerging market. “Deng’s approach seems almost ruthless in its pragmatism,” I ventured. And only a decade after the last devaluation, the US Senate demanded an upward revaluation of the currency or else China would face a hefty 27.5% import tariff.
Learning from Japan’s painful experience after Plaza Accord, China adjusted on its own terms. “China is rewriting the rules,” the investor remarked, his eyes narrowing as if seeing the threads of history weaving into the present. “Markets must read them carefully…and politicians will need a heavy pen when editing.”
The revaluation proved a very profitable day. There were no celebrations, no false glory – just a relentless focus on what comes next, recognizing the shift in the global power dynamic. For China, it wasn’t about winning a battle. It was about redefining the entire game. And I realized the true lesson. This was not just about currency or trade, but about a nation’s unwavering commitment to its vision of the future, one strategic step at a time.
Tyler Durden
Sun, 09/29/2024 – 18:40 - Iran Confirms Top IRGC Officer Killed Alongside Nasrallah, Vows Revenge
Iran Confirms Top IRGC Officer Killed Alongside Nasrallah, Vows Revenge
On Sunday Iran vowed severe revenge against Israel not only for the killing of Hezbollah chief Hassan Nasrallah during massive bombings on Friday in Beirut’s southern suburbs, but for the death of a top Revolutionary Guard official in the same airstrikes.
Iran’s Foreign Minister Abbas Araghchi gave high level confirmation for the first time that IRGC Deputy Commander, Gen. Abbas Nilforoushan – who apparently was meeting with Nasrallah at the time – was killed.
Iranian Revolutionary Guard Gen. Abbas Nilforoushan Araghchi warned that this “horrible crime of the aggressor Zionist regime” will “not go unanswered.” However, he stopped short of specifying whether it would be a military response.
“The diplomatic apparatus will also use all its political, diplomatic, legal and international capacities to pursue the criminals and their supporters,” he said. But he also stipulated that Iran has a legal right to respond militarily under international law if it wished. Nilforoushan was a top commander within the IRGC’s foreign intelligence and operations arm, the Quds force.
Simultaneous to the warning from the Islamic Republic’s foreign ministry, Iran’s vice president for strategic affairs, Javad Zarif, said a response “will occur at the appropriate time and at Iran’s choice, and decisions will definitely be made at the leadership level, at the highest level of the state,” according to state IRNA.
Iran’s Guardian Council meanwhile said that Israel will “receive a forceful answer” and ultimately threatened “the destruction of the Zionist regime” – as cited in Fars news agency.
Meanwhile, more Israeli reservists and tanks have appeared along the Israel-Lebanon border in a sign that the IDF could be preparing to start a ground offensive, Al Jazeera has observed. Inbound rocket alarms have continued sounding in parts of northern Israel, particularly the Safed area, on Sunday.
Israel’s Haaretz has also said the following: “U.S. officials say ‘small-scale border movements’ into Lebanon may have begun.”
Israeli strikes on Beirut, the south, and Bekaa Valley area have continued for seven days straight…
⚡️Baalbak pic.twitter.com/JEWY6AqZiY
— War Monitor (@WarMonitors) September 29, 2024
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On Sunday, US National Security Council spokesman John Kirby said it’s as yet unclear what Hezbollah or Iran might do next. “The rhetoric certainly suggests they’re going to try to do something, coming out of Tehran,” adding that it’s “too soon to know how Iran’s going to react to this,” he said.
Kirby called for restraint, also saying that Israel “will not be able to safely get people back into their homes in the north of the country by waging an all-out war with Hezbollah or Iran.”
On Sunday Israel conducted fresh airstrikes on Yemen, in response to Houthis firing ballistic missiles targeting Tel Aviv:
Israel targets the port of Hodeidah following ballistic missile attacks on Tel Aviv.
This is Yemen’s fourth largest city. Serious implications for the civilian population. The port is a lifetime for aid, food and power. pic.twitter.com/S5m7rjemBe
— Trey Yingst (@TreyYingst) September 29, 2024
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The Pentagon has in the last days sent additional troops and assets to the region, with some going to Cyprus, ready to assist in Israel’s defense or also help evacuate American citizens from Lebanon if things continue to spiral. The war could spread to also engulf Yemen, Syria, and Iraq in the scenario that Iran and Israel enter a direct war.
Below are some further weekend developments via Al Monitor correspondent Joyce Karem:
- Nasrallah’s body recovered
- Ali Karaki confirmed dead
- Nabil Qawook killed
- Iran to avenge killing of IRGC officer
- Israeli strikes continue
- Hezbollah fires barrage of rockets
- Israeli strikes in Syria
- French FM visits Lebanon
Tyler Durden
Sun, 09/29/2024 – 18:05 - You Don't Need A Weatherman To Know Which Way The Wind Blows
You Don’t Need A Weatherman To Know Which Way The Wind Blows
Authored by Jim Quinn via The Burning Platform blog,
Keep a clean nose
Watch the plain clothes
You don’t need a weatherman
To know which way the wind blowsBob Dylan – Subterranean Homesick Blues
Twenty years of schoolin’
And they put you on the day shift
Look out kid
They keep it all hidBob Dylan – Subterranean Homesick Blues
As we accelerate towards whatever disastrous outcome awaits our debt-ridden, delusional, decadent, despairing society, I seem to be drawn to the anti-establishment lyrics of Bob Dylan, written during the turbulent 1960s. Maybe it’s the assassinations and unpopular war in the 60s that have triggered my focus. You certainly don’t need a weatherman to know which way the wind is blowing today. A gale force wind is blowing the nation towards civil and global war, simultaneously. And it is not a naturally occurring wind, but an artificial storm created by the ruling plutocracy in a last-ditch traitorous effort to retain their wealth, power and control over our lives.
They have kept their evil machinations and malevolent schemes hidden from the view of the masses through their control of mass media, politicians, the financial system, and corporate entities, all doing their bidding in our corporate fascist totalitarian state, disguised as a democratic republic.
After twenty years of schoolin, they have propagandized and indoctrinated generations into believing whatever they are told to believe by their overlords. They have been taught to feel, emote and embrace delusionary falsehoods, rather than think critically, analyze and embrace truthful reality. The question of our time is whether enough people can be awoken from their government induced mass formation stupor to reverse our downward spiral into the abyss.
I believe I’ve known which way the winds have been blowing for the entirety of this Fourth Turning, but my expectations regarding the timing of major events have been inaccurate. My impatience is a result of not having lived through a Fourth Turning and accepting the crisis will last twenty to twenty-five years.
I should be happy the violent, bloody phase of this Fourth Turning has been delayed, as it has given me more time to prepare by acquiring more firearms, ammo, supplies, and precious metals. But a feeling of melancholy engulfs me on a daily basis, knowing there is no exit strategy for avoiding what lies ahead. If anything, the delay in any significant level of violence thus far probably ratchets up the intensity and explosiveness when it does commence, like a pressure cooker ready to explode.
If you don’t sense the impending volatility of our current state of affairs, you are either willfully ignorant, too dumbed down and distracted by your techno-gadgets to notice, or a participant in the machinations to undermine our civilized society and replace it with an authoritarian new world order of CBDCs, social credit scores, censorship, fifteen minute cities, techno-gulags, pervasive surveillance, and eating zee bugs.
The plutocrats have been utilizing their vast wealth and control over politicians, bankers, and media moguls to impose their demented psychopathic vision upon the masses, blatantly trampling upon their rights, liberties and freedoms, with no fear of retribution or consequences for their treasonous acts. They believe they are invincible, as their hubris grows to colossal levels, portending their eventual downfall. We are hurdling towards our rendezvous with destiny, for good or for ill.
The last two books I’ve read have further contributed to my sense of foreboding, as they confirm the historical fact of man’s inhumanity to man, insatiable greed driving those in power, and the willingness of the ruling elite to use violence as a means to achieve whatever outcomes they desire. The two books are Dune, by Frank Herbert, and End Times, by Peter Turchin. Dune is a science fiction novel published in 1965, capturing the corruption and duplicities practiced by the ruling classes as they fight for control over land, resources and wealth, during the waning days of a formerly great empire.
The tone of the novel is dark, ominous and gloomy. The characters seemed resigned to their tragic fate, as melancholy pervades their world, and they are powerless to change the catastrophic events which are unfolding according to an immutable destiny. I have a similar feeling regarding the events unfolding on a daily basis, as we head towards a cataclysmic climax to our empire of debt, domination, delusion, and destruction. As Frank Herbert noted, there is no escape from the choices we have made over time.
“There is no escape—we pay for the violence of our ancestors.” ― Frank Herbert, Dune
“Once men turned their thinking over to machines in the hope that this would set them free. But that only permitted other men with machines to enslave them.” ― Frank Herbert, Dune
The non-fiction – End Times – was published in 2023 by Peter Turchin, a complexity scientist studying the dynamics of historical societies, further painting a very bleak picture of our current historical paradigm, with little opportunity to alter the violent upheaval about to engulf our decaying society. Him and his team created a quantitative model that analyzed complex societies across thousands of years and discovered predictable waves of political instability brought about by the same forces in a predictable pattern. Based upon this model, in 2010 Peter went on record predicting major instability in the U.S. in the early 2020s. The basis for his prediction was as follows:
“When a state, such as the United States, has stagnating or declining real wages, a growing gap between rich and poor, overproduction of young graduates with advanced degrees, declining public trust, and exploding public debt, these seemingly disparate social indicators are actually related to each other dynamically. Historically, such developments have served as leading indicators of looming political instability. In the United States, all of these factors started to turn in an ominous direction in the 1970s. The data pointed to the years around 2020 when the confluence of these trends was expected to trigger a spike in political instability.” – End Times – Peter Turchin
I know many people don’t trust academic created models, especially when they attempt to predict future history and sociological trends. Many dismiss Strauss & Howe’s Fourth Turning generational theory as voodoo and making history fit into their model. I’ve been convinced since reading the book in 2004 of its validity, and nothing that has occurred since the start of this Fourth Turning in 2008 has convinced me otherwise. Turchin’s model, based on entirely different criteria, essentially predicts violent upheaval, war and societal collapse on the same timeline as the Fourth Turning theory.
In addition, I have been following the daily writings of Martin Armstrong, a non-academic investment manager, for a decade, and his Socrates model also predicts civil war, global war, economic collapse and a turbulent outcome by 2032. In fact, all three models are in alignment regarding the degree of violence, bloodshed and turmoil, with clear winners and losers by the time this crisis period resolves itself. This is a naturally occurring phenomenon as described by Turchin.
“All complex societies go through cycles of alternative stretches of internal peace and harmony periodically interrupted by outbreaks of internal warfare and discord.” – End Times – Peter Turchin
The level of gaslighting, propaganda, misinformation, censorship of the truth, and blatant mistruths being peddled to the masses by the plutocrats pulling the levers of this shitshow has reached epic proportions. This is being perpetrated as a last-ditch desperate effort to maintain the control they have been exercising since the 21st Century commenced. The upcoming election in five weeks has accelerated their efforts to derail Trump’s election at all costs.
Two attempted assassinations by Deep State patsies, after a half dozen failed efforts to imprison Trump, and the ascension of Saint Kackler by the Deep State and controlled regime media using fake polls and trying to duplicate the Biden basement dummy strategy has failed. The vote margin in the swing states appears to be too large for the Democrat cheating schemes of illegal immigrants and dead people voting, mail-in ballot fraud, and Dominion vote switching to overcome. The plutocrats thought they had covered all their bases but are in danger of seeing their best laid plans self-destruct.
“The plutocrats can use their wealth to buy mass media, to fund think tanks, and to handsomely reward those social influencers who promote their messages. In other words, they wield enormous power to sway the electorate toward the opinions that promote their interests. The plutocrats can afford to plan, and implement their plans, for the long term.” – End Times – Peter Turchin
I believe the tapestry of history will be stained by the traitorous machinations of the nefarious Deep State forces controlling Biden, Harris, Congress, and every governmental department in the next five weeks. Spineless Jerome Powell has done as he was told by producing a crisis level interest rate cut when stock and housing markets are at all-time highs and unemployment is near all-time lows. They will stop at nothing to retain rule over our nation, even risking nuclear annihilation in their game of chicken with Putin.
They believe their 3rd assassination attempt will be a charm. We should be vigilant for whatever false flag or new “deadly” pandemic they can activate in the coming weeks. Will it be another FBI created “white supremacist” Trump supporter terrorist attack on people of color? Or will they initiate a false flag in the Middle East with their Israeli co-conspirators to launch the neo-con dream war with Iran? They launched the Covid scamdemic in a matter of weeks, so a new terrifying super virus isn’t out of the question. Anything they can do to interfere with a smooth election will be attempted.
They believe they can’t allow Trump to take office in January 2025. We all know the uni-party does as they are told by the monied interests. The plutocrats don’t spend $4 billion per year “lobbying” politicians for nothing. The election of Trump would not materially change the course of this titanic ship of debt. We’ve already struck the iceberg and are taking on water. Economic catastrophe is a certainty.
Trump may only delay the inevitable. Turchin’s book explains what is really happening out of sight of the masses. Super-elites (Trump, Musk, Carlson versus Obama, Soros, Gates) are battling for supremacy, while the little people are nothing more than pawns in the chess game of world domination as our nation rots from within.
“The social pyramid has grown top-heavy. We now have too many ‘elite aspirants’ competing for a fixed number of positions in the upper echelons of politics and business. In our model, such conditions have a name: elite overproduction. Together with popular immiseration, elite overproduction, and the intra-elite conflicts that it has engendered, has gradually undermined our civic cohesiveness, the sense of national cooperation without which states quickly rot from within.” – End Times – Peter Turchin
Turchin’s model revolves around what he terms an oversupply of super-elites who are created when a country/empire devolves into a plutocracy, where the rich get richer by rigging the system in their favor, while the rest of society sinks into immiseration (impoverishment). Every empire goes through the same cyclical process, which eventually leads to its decline.
Turchin marked the 1970s as when the tide turned heavily in favor of the elites, with the middle and lower classes slowly and steadily sinking into despair, as their standard of living has degraded year after year, while being lured deeper and deeper into debt by the ruling elite who have profited mightily from their indebtedness. The Establishment/Deep State/Plutocracy/Ruling Elite or whatever other term you want to use for the evil psychopaths running the show and telling their Biden and Harris puppets what to say and do, are all part of George Carlin’s Big Club – and you ain’t in it.
“The business and political elites knew each other, went to the same schools, belonged to the same clubs, married into the same families, shared the same values – in reality, formed the phenomenon which has lately been dubbed The Establishment.”– The Triumph of Conservatism – Gabriel Kolko
As the younger generations are enslaved in student loan debt to obtain degrees from left wing universities, controlled by communist academics, older generations are mired in debt from McMansions, $60,000 SUVs, outrageous medical expenses, and plain old grocery bills. For the past forty years, the relative wages of the average American have been in decline, while the wealth of the elites, controlling the mega-corps, too big to fail banks, media conglomerates, and political system, have risen to obscene heights on the backs of the working-class peasants. Life expectancy has been in decline, depression and suicides on the rise, discontent and anger reaching acute levels, and an oversupply of elite aspirants, created by all that newly printed fiat, have created a combustible mixture on the verge of erupting like Mount Saint Helens.
Those who currently benefit from our utterly corrupt plutocracy of psychopaths and deviants, pretend everything is normal and anyone questioning their provably false narratives are dangerous conspiracy theorists who must be censored, silenced and prosecuted for thought-crime. Their arrogance towards the common man and hubris in believing their own bullshit has left them susceptible to the vengeance of those they have scorned, ridiculed, and belittled, while pillaging the wealth of an empire in its death throes.
A feeling of despair leading to a revolutionary vibe is in the air, as sides have been drawn, no compromise is possible, and those 300 million firearms are poised to be put to use. The debased establishment doesn’t think enough people have the gumption and courage to step up and call their bluff. If they are able to steal this election again and install another actual moron in the White House, the country will begin to implode, with chaos, violence and much bloodshed likely.
“Americans today grossly underestimate the fragility of the complex society in which we live. But an important lesson from history is that people living in previous eras similarly didn’t imagine that their societies could suddenly crumble around them. States die in a great variety of ways. Some go out in a bang of violence; others unravel quietly and die with a whimper.” – End Times – Peter Turchin
I tend to lean towards the American empire going out with a bang, rather than a whimper. I’ve referenced this level of normalcy bias and cognitive dissonance among the masses previously with regards to the last two Fourth Turnings. In late 1859 there was virtually no one who foresaw the devastation and death that would engulf the nation in the next five years, with over 600,000 killed and 500,000 wounded. Over 8% of the white male population between the ages of 13 and 43 died in the space of those five years.
In early 1938 very few people expected a global conflagration involving virtually every country on earth to result in the deaths of 65 million people (3% of the global population). We are now at another turning point in human history. When enough critical thinking citizens become convinced there is no hope of fixing their problems through conventional means, like the ballot box, because the system is unfixable and corrupt, violent upheaval will consume the nation, with an unknowable outcome. As Turchin has documented, this societal implosion has occurred on a regular basis across the centuries. The only difference is previous regimes didn’t have the means to destroy the planet with the push of a button.
These periodic societal implosions are entirely the result of plutocratic greed, where the ruling elites feel impelled to rig the financial and political institutions in a way that pumps immense wealth into their pockets, creating a chosen few who see their mega-yachts rising on a tide of Fed created fiat, while the dinghies of the impoverished many sink to the bottom of the sea. This predictable devolution of every empire is what destabilizes their society and leads to discord, violence, and the overthrow of the existing social order.
The “Haves” have so much wealth, so much control over our media, so much unwarranted influence over our political system, so much dominion over our intel agencies and military, and complete domination over central banking, while the “Have Nots” have little chance to succeed or even maintain their standard of living, as their anger towards the “Haves” reaches the boiling point. You can feel it. It will only take one spark to ignite this powder-keg of engineered wealth imbalance to initiate Civil War 2.0.
Turchin’s model predicts a grim future, with an outbreak of serious violence during the 2020s. Based on the current trajectory of our societal disintegration, his model paints a dark, bleak future for the United States, and probably the entire world when the USA does everything in its power to maintain world domination through military means. Based on hundreds of previous empire collapses, Turchin provides this assessment:
“The probability of ruler assassination was 40%. Bad news for the elites. Even more bad news for everybody was that 75% of the crises ended in revolutions or civil wars (or both), and in one-fifth of cases, recurrent civil wars dragged on for a century or longer. 60% of exits led to the death of the state – it was conquered by another or simply disintegrated into fragments. The overall conclusion is grim. In most cases, several disasters combined, and some societies experienced really severe outcomes – End Times – Peter Turchin
Strauss and Howe’s Fourth Turning theory predicts war and bloodshed on a grand scale in the second half of this crisis period (2024 – 2032). Turchin’s model predicts the same. Martin Armstrong’s Socrates model also predicts the same. I find it interesting that Neil Howe and Peter Turchin, both academics, choose to disregard the unequivocal outcome of their models and pretend a positive outcome is a possibility. Hope is not a strategy, and denying the reality before our very eyes, benefits no one except those in power.
Armstrong, an investment manager, shows no inclination to not trust his model. He expects civil and global war, while predicting this will be the last presidential election in U.S. history. What will happen between now and November 5, to ignite the next bloody phase of this crisis? Will they shoot Trump’s plane out of the sky? Will they blatantly cheat on election day through fake mail-in ballots and Dominion vote switching, installing kackling Kamala as their puppet? Will they provoke Russia and/or Iran into launching World War 3? We know for sure these societal storms will only intensify until a climax is attained, with distinct winners and losers.
It has been a slow train coming, but it is picking up speed as we enter the final stages of this journey. The Deep State has had control for too long and their time has come. They have disregarded and torn the U.S. Constitution to shreds. We are no longer bound by their illegal laws, regulations and rules. They don’t apply no more. We’ve been standing around and waiting for someone else to do the dirty work.
The Founders, like Jefferson, risked their very lives to give us this country. It is time to make a brave and courageous stand against the forces of evil and take this country back from the super-elite fools glorifying their traitorous deeds in the name of Satan. The slow train of justice is coming around the bend, and anyone who cares about the future of this Republic needs to hop on. The times that try men’s souls have arrived. The choices we make will matter.
Man’s ego is inflated, his laws are outdated, they don’t apply no more
You can’t rely no more to be standin’ around waitin’
In the home of the brave, Jefferson turnin’ over in his grave
Fools glorifying themselves, trying to manipulate Satan
And there’s a slow, slow train comin’ up around the bendTyler Durden
Sun, 09/29/2024 – 17:30 - China Launches Massive Military Drills In Disputed South Sea Hours After Blinken Tries To "Reduce Regional Tensions"
China Launches Massive Military Drills In Disputed South Sea Hours After Blinken Tries To “Reduce Regional Tensions”
China didn’t just fire the proverbial stimulus bazooka targeting its markets and economy last week: it also fired a literal bazooka in preparation for the inevitable showdown with the US, which is not a matter of if just when.
On Saturday, China’s military said that the country’s air and naval forces are conducting manoeuvres in a disputed area of the South China Sea, just hours after the country’s top diplomat discussed ways of reducing regional tension with his U.S. counterpart, confirming yet again that the world literally can not wait to make fun of Anthony Blinken.
The news, first reported by Reuters, comes after Australia and the Philippines said their militaries would hold a joint maritime activity with Japan, New Zealand and the United States in the exclusive economic zone of the Philippines.
The announcement of the manoeuvres came shortly after China’s Foreign Minister Wang Yi met U.S. Secretary of State Antony Blinken in New York for talks that covered ways to avoid conflict in the South China Sea.
In March, Blinken had assured the Philippines its defence partnership with the United States was “ironclad,” after Manila accused Beijing of aggressive deployments in the South China Sea of its coast guard and fishing vessels suspected of being a maritime militia.
On Friday Wang “emphasized that China insists on resolving differences with countries directly concerned through dialogue and consultation,” during the meeting, his ministry said in a statement.
While Blinken said he raised China’s “dangerous and destabilizing actions” in the South China Sea and discussed improving communication between the two nations’ militaries, Wang responded that “the U.S. should not always stir up trouble in the South China Sea and should not undermine the efforts of regional countries to maintain peace and stability,” and launched the drill just to confirm how little it thinks of US attempts at deterrence.
The Chinese drills will include “routine” early warning and reconnaissance exercises as well as patrols around Scarborough Shoal, the Southern Theatre Command of the People’s Liberation Army said in a statement, but gave no details.
“The theatre troops maintain a high degree of vigilance, resolutely defending national sovereignty, security and maritime rights and interests, (and) are firm in maintaining peace and stability in the South China Sea,” it said.
One of Asia’s most contested features, the Scarborough Shoal is 200 km (124 miles) off the Philippines, within its exclusive economic zone. At the same time, China also claims almost the entire South China Sea, including the atoll, coveted for its bountiful fish stocks and stunning turquoise lagoon, despite overlapping claims in the busy waterway by Brunei, Malaysia, the Philippines and Vietnam. While in 2016 the Permanent Court of Arbitration in the Hague ruled that China’s sweeping claims were not supported by international law, Beijing refuses to recognise the decision. The tribunal did not determine sovereignty over the Scarborough Shoal, which it said was a traditional fishing ground for several countries.
In a report on Friday, a thinktank based in Beijing estimated that warships of various nations spent more than 20,000 days annually in the South China Sea, while more than 30,000 military aircraft traverse it. U.S. navy ships spent about 1,600 days at sea in the region, said the thinktank, the South China Sea Strategic Situation Probing Initiative, as well as an undisclosed number of submarines.
Tyler Durden
Sun, 09/29/2024 – 16:55 - Why Another Chinese Gold Mania May Be Starting
Why Another Chinese Gold Mania May Be Starting
Authored by Jesse Colombo,
A few weeks ago, I published an article where I explored the potential for another China-driven rally in gold, one that could quickly push prices to $3,000. My thesis was rooted in the observation that China’s futures traders were the driving force behind gold’s explosive $400 surge this past spring. However, these traders had been dormant for the past five months as the yuan price of gold stagnated. I proposed that a technical breakout in the yuan price of gold could trigger a resurgence similar to the powerful rally we saw in the spring. Since sharing that idea, I’ve been watching for a breakout in the yuan price of gold—and it appears that moment has arrived.
Let’s start by examining the chart of Shanghai Futures Exchange gold futures, the primary driver behind the gold frenzy in March and April. Since the April peak, prices have been oscillating within a well-defined trading range. However, in a promising turn of events, the contract has recently experienced a technical breakout as Chinese traders returned from the Mid-Autumn Festival, which had closed the country’s financial markets for three days. Although the breakout has been tame so far, with tepid trading volume, there’s significant potential for it to gain momentum—especially as volume continues to pick up after a lull earlier this month.
The international spot price of gold in yuan (which is distinct from the mainland China gold price) had also been trading within a well-defined range since April. Its recent breakout lends further credibility to the breakout seen in Shanghai Futures Exchange gold futures.
The U.S. dollar price of gold has also been on a strong upward trend, breaking through two key resistance levels in the past month and a half:
An April Financial Times article titled “Chinese Speculators Super-Charge Gold Rally” provided a compelling explanation of the gold price surge this past spring. The article highlighted how trading volume in Shanghai gold futures had surged by 400%, propelling gold prices to record highs:
Additional evidence of the Chinese gold trading frenzy earlier this year is visible in the chart of open interest in Shanghai gold futures:
As the World Gold Council’s chief market strategist John Reade remarked in the Financial Times:
“Chinese speculators have really grabbed gold by the throat.”
“Emerging markets have been the biggest end consumers for decades but they haven’t been able to exert pricing power because of fast money in the west. Now, we are getting to the stage where speculative money in emerging markets can exert pricing power.”
Now that Shanghai gold futures broke out of its trading range, it is likely to follow what technical analysts call a “measured move,” which is when a rally after a consolidation pattern is projected to rise the same number of points as the rally that preceded the consolidation pattern. According to that principle, gold is likely to reach approximately $3,000 in just a couple months after breaking out! In case that sounds preposterous, that is only a 12.8% move from here.
To summarize, all signs point to the potential for another China-driven gold mania similar to the one that propelled prices earlier this year. The breakout of Shanghai Futures Exchange gold futures from their trading range, coupled with the rising price of gold in most major currencies, suggest that speculative fervor could soon return with full force. The strong likelihood of a measured move indicates that gold could quickly reach the $3,000 mark, fueled by renewed interest from Chinese traders. As the market dynamics shift, the influence of emerging market speculators on global gold prices is becoming increasingly apparent, setting the stage for what could be a dramatic surge in the months ahead.
If you enjoyed this article, please visit Jesse’s Substack for more content like this…
Tyler Durden
Sun, 09/29/2024 – 16:20 - Massive Fire Engulfs Atlanta-Area Chemical Plant, Evacuations Underway
Massive Fire Engulfs Atlanta-Area Chemical Plant, Evacuations Underway
A massive fire broke out at a chemical plant in Conyers, Georgia, prompting local area evacuations and road closures. Footage of the blaze shared on X might remind some of the train derailment fire in East Palestine, Ohio, early last year.
The Rockdale County Sheriff’s Office said the fire occurred at BioLab, a chemical plant that makes specialty pool and spa care products. They told residents near the plant to stay indoors and keep windows closed to minimize exposure to harmful chemicals, adding, “Safety measures are in place to protect the public.”
Earlier, officials said the sprinkler system malfunctioned, and water came in contact with a reactive chemical, sparking the fire. Shortly after, officials called for evacuations of residential homes around the facility.
However, officials did not mention what chemicals were burning. EPA staff have been sent to the town for air sampling.
Given BioLab’s product line, as shown on its website, there’s reason to suspect the plumes of dark smoke are toxic.
Local media outlet Channel 2′s Michele Newell reported that white smoke was visible from the plant, turning black and then orange.
Here’s the dramatic footage uploaded to X:
Fire at Rockdale County biolab happening now 😳 pic.twitter.com/mG4mHJz1lD
— ATL Uncensored (@ATLUncensored) September 29, 2024
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🔥🚨BREAKING NEWS: A massive fire at BioLab in Conyers, Georgia is covering sky with smoke. I-20 is being blocked off as residents told to evacuate. pic.twitter.com/3S27RKl22q
— Dom Lucre | Breaker of Narratives (@dom_lucre) September 29, 2024
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Thanks for the cancer Bio Lab pic.twitter.com/bQJY1jydY7
— Burnt Toast (@Jacob_Andrew_88) September 29, 2024
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This if from the fire at BioLab in Conyers GA. They have us sheltering in place with our doors, windows closed and air conditioning units turned off. We need more information about what kind of chemicals we are being exposed too. @wsbtv pic.twitter.com/KKC8ia6CZe
— Imtroby (@imtroby) September 29, 2024
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The view of the Bio Lab fire in Conyers from our back porch in North Rockdale County. pic.twitter.com/qoczQfB3Th
— Jay Jones (@dockjones) September 29, 2024
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Bio Lab explosion in Conyers 🤦🏽♂️🤦🏽♂️
UPDATE: Police jus said we have to leave the area/house.
Quarantine 2024 #news #biolab #conyers #viral pic.twitter.com/clSAZ58Yob— NATELIVN (@NATELIVNFAVRD) September 29, 2024
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Another?
Yet ANOTHER fire at the Bio Lab chemical plant in Conyers GA pic.twitter.com/fe8l30AwQ1
— ChuckD (@ChuckD_MSB) September 29, 2024
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Wow.
The fire at Bio Lab outside Atlanta showed up on radar pic.twitter.com/B7C8UDo18g
— Your Favorite Arkie (@YourFavArkie) September 29, 2024
Tyler Durden
Sun, 09/29/2024 – 15:45 - The Emperor's New Clothes
The Emperor’s New Clothes
Authored by Peter Tchir via Academy Securities,
The “big” news on the week, at least the news that seemed to move markets the most, was China’s stimulus plans. It started with some monetary policy, which didn’t do much, but China followed up with fiscal stimulus, and the perception that there is more to come permeated the market thinking. We highlighted in Thursday’s The “Other” Chinese Bazooka that this time, the benefits would accrue much more to China and its companies, than to the U.S. and its companies.
Before delving into our take on how things will play out, let’s highlight just a couple of things from Academy’s Geopolitical Intelligence Group:
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From Saturday, Israel Kills Hezbollah Leader.
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And from Tuesday, September’s Around the World where we analyze the:
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The Middle East and ceasefire discussions.
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Iran sending ballistic missiles to Russia.
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The U.S. potentially lifting restrictions on Ukraine’s use of some weapons in Russia.
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The friction between China and the Philippines (which seems to take a back seat to Taiwan in our meetings, but we aren’t sure that it should).
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Also, this seems like a good place to remind people about Academy’s Credit Focused Geopolitical Roundtable on October 10th, from 5:30 pm to 7:30 pm at Bobby Van’s near Grand Central, led by General (Ret.) Spider Marks. Please register here as space is limited.
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Finally, while not as geopolitical-focused as the prior Thursday’s discussion on Bloomberg TV (from the 5 to 15 minute mark, with even more focus on geopolitics than usual), we had a lively discussion with Rick Santelli on CNBC live from the floor of the CBOT – which is always a treat. We focused on “bumpy landings” and China.
Maybe I Was Mean
But I really don’t think so.
After an overnight session that initially had U.S. indices rising with Chinese stocks (the Shanghai 300 did even better than the Hang Seng – 16% versus 13%), the performance sagged. Yes, U.S. shares eked out gains of less than 1%. That was nothing like we saw in Asia or even Europe (where the Stoxx 50 rose 4% on the week).
Also, following up on last weekend’s Starting a New Cycle? report, it was noticeable how much of the strength in the U.S. appears to occur overnight, or at the open.
Given that we should have seen some performance chasing on Friday, that seems concerning. September, which started out weak, just like August, managed to fight the “seasonals,” and the major U.S. indices are up around 2% with one trading day remaining. However, there is this lingering concern, for me, that the post-FOMC surge was “strange” and isn’t getting any material follow through.
It seems highly unlikely to occur 3 times in a row, but let’s not forget First Friday’s which have not been kind to markets. While it seems unlikely to occur again, there is nothing about recent trading that makes me believe that we aren’t susceptible to another bout of weakness at the start of October.
You Asked if I’m Scared
And I said so.
We had some great meetings last week in Minneapolis and Chicago. Somehow, with anything geopolitical, it seems that many people want to know “what scares you the most?”
In a world where:
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Russia is threatening to use nuclear weapons.
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China fired an ICBM into the Pacific, and there are ongoing risks with the Philippines and with Taiwan.
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There is escalation in the Middle East (at least Isreal is increasing their attacks, and as discussed in The “Other” Bazooka, I’m in the camp that Iran just doesn’t have the firepower to retaliate effectively).
I answered that my biggest fear, right now, is that the U.S. will grab at a “carrot” offered by China, reducing the pressure on China’s economy and giving them the opportunity to buy a couple of more years to “properly” prepare for the competition with us.
While Sinead O’Connor sang “Through their own words, they will be exposed,” I think General Spider Marks puts it more eloquently – China has a history of “marching in plain sight.” Basically China tells us what they want to do (in this case, to become the economic powerhouse of the world) and we ignore that at our own risk.
Nothing about the new stimulus plan does anything to derail my view that The Threat of Made By China is one of the biggest threats facing American (and European) companies. The threat to sales in China has already occurred. The threat to sales in Emerging Markets is occurring and we are seeing increasing amounts of competition from Chinese brands in Europe and even the U.S.
You Asked for the Truth and I Told You
I keep trying to come up with a “positive” spin for the global economy on China’s stimulus efforts. But here is what I keep coming up with:
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Chinese stocks should continue to rally as many investors have been caught underweight the stocks.
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Chinese stocks will continue to rally because when you look at some of their big names, they trade at a fraction of the multiples of our big names. They probably should, but in a market where many people have spent the last two years trying to catch rotations (including myself, with some modicum of success), the narrative behind “Chinese Stocks are Cheap” seems pretty powerful.
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You should see Chinese spending increase and it will be heavily allocated to their own brands.
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This influx of spending and capital will buy the Chinese companies time (and money and scale) to make further inroads regarding their foreign aspirations – which again, should help Chinese stocks.
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Will their phones get better and cheaper? Will more and more people, including foreigners, fly on Chinese airplanes? Will their chip industry continue to grow and improve?
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What is the risk that China is able to shift to using more and more Chinese made chips for items requiring mid-to-high level (but not state-of-the-art) tech?
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All of this is occurring while the U.S. is:
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Starting another round of theater on the debt ceiling (highly unlikely that we don’t pay anything on time, but highly likely that both sides get to spend a bunch of $$$ on their priorities as part of the “kick the can” negotiations).
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Political leaders on all sides are more focused on the election than on governing (at least it seems that way to me).
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About to enter, what many other political systems seem to find awkward, a period of time where we will have a new president, who won’t assume control for almost 3 months after the election. An election that could be mired in controversy – even if it shouldn’t be (there is some small tail risk, I don’t think it is big, but it is there).
At some level, even I’m forced to acknowledge that much of this “doesn’t sound like tomorrow’s problem,” but I fear it is and the markets will continue to price it in, like I think we saw most of Thursday and Friday.
A Big Week on the Economic Data Front
Lots of information coming out, and I’m continuing to lean towards the potential that the jobs data comes in “better” than expected. One thing that would really rattle markets (I think) would be an upward revision in Non-Farm Payrolls. Even writing that seems weird, but since consensus is now so fully on board the “jobs data has been inflated” boat, it is getting very crowded. If I’m correct on the problems with seasonals (too many additions to start the year, too many subtractions in the summer) and if the BLS has “corrected” some of their modelling assumptions around the birth/death model, it wouldn’t surprise me to see a beat on the headline number AND upward revisions. Not sure I want to bet on that, but…
Finally, the discussion is clearly headed towards the “Neutral Rate.” The good thing about that is we all know it is a number somewhere between 0% and 5%.
Seriously, I think we will find that the market is pricing in a terminal rate of sub 3% by the end of the July 2025 meeting and this number is “too low, too quick” (thinking more like 3.5% being the terminal rate and not getting there until the end of the year, unless we go from “bumpy” to “clunky” landing).
Bottom Line
If you want to play the China stimulus (and I do), do it direct via Chinese stocks (I use FXI and KWEB) and don’t assume U.S. “proxies” will do well.
I think oil is the biggest beneficiary of geopolitical risk, but I’m leaning towards “escalation to deescalate” in the Middle East and even, though more hesitantly, between Russia and Ukraine.
On the rates side of the equation, I think 10s and 30s are susceptible to moves higher on steepening, deficit concerns, debt ceiling negotiations, and auctions – call it 4% on 10s.
I continue to like credit as I think that investors should be heavily overweight credit, especially at the front end (2-years and in) and think that the competition from private credit funds and even some big banks to get money out to customers will help support credit spreads from the bottom (lower rated entities) on up.
Now that I’ve actually listened to (I cannot get the song out of my head) and read the lyrics to “Emperor’s New Clothes,” I cannot tell if the song is uplifting, or really depressing. And while I think China might be exposed as “being naked,” I think they are in the process of buying themselves (and their companies) time and that we will aid and abet them in their efforts to spur their economy forward, and we are not seeing the danger to ourselves.
Maybe too heavy, maybe too melodramatic, but it is the path that keeps jumping out at me.
In any case, let’s hope the first week of October starts better than the first weeks of August and September, but I’m starting to believe that we may see a three-peat!
Tyler Durden
Sun, 09/29/2024 – 15:10 -
- Democrats Suddenly Care About Illegal Immigration After Years Of Gaslighting Americans
Democrats Suddenly Care About Illegal Immigration After Years Of Gaslighting Americans
All the surveys show that the immigration crisis is the dominant social concern for Americans in how they will vote in the 2024 presidential election. It only falls to second place behind the economic crisis in terms of overall importance. Abortion, healthcare, racial inequality, climate change? Nobody cares – At least not enough people to shift enough votes one way or the other.
Any candidate that wants to be taken seriously during this election cycle will have to address the open border problems created by the Biden Administration, and Democrats just decided they care about a month before the public goes to the ballot box. The same people that created the problem now want you to believe they can be trusted to fix it.
As your president, I will protect our nation’s sovereignty, secure our border, and work to fix our broken system of immigration.
And I will partner with Democrats, Republicans, and Independents to do it.
— Kamala Harris (@KamalaHarris) September 28, 2024
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Kamala Harris and many Democrat candidates have suddenly pulled a 180 degree spin on their open border cheerleading. Not long ago they were gaslighting the American public on the crisis, denying that the danger existed and calling anyone who mentioned it a “racist.” In September of 2021 Harris argued:
“The border is secure, but we also have a broken immigration system, in particular over the last four years before we came in, and it needs to be fixed.”
This was a lie. Border crossings surged in 2021. It has also now been reported that ICE was forced to release over 435,000 illegal immigrants with prior criminal convictions into the US due to Biden and Harris policies. Over 13,000 of those convicts are murderers.
To clarify any confusion created by media denials, Kamala Harris was in fact placed in charge of the immigration and border problems by Joe Biden. This is not debatable. Harris then went on to do nothing, and even refused for many months to visit the border. She preferred to take vacations in various Central American countries, offering them cash in exchange for discouraging people from migrating during the pandemic.
When confronted on the surge in illegal immigration, Democrats conjured up a blackmail bill – They would cap illegal migrant entry at around 1.5 million people per year (or 5000 per day), with most of these people allowed to continue staying in the US after passing an “asylum review.” Their cases would then be in stasis for months. The bill did not address the fact that the immigration courts already had a backlog of over 3 million asylum cases.
In exchange for this gracious offer, Republicans would have to accept an “easy path to citizenship” for millions of migrants already in the country. No mention of deportation of illegals already in the US. No mention of building a wall. No mention of ending welfare subsidies that are enticing illegals to come to the US in the first place. It’s the complete opposite of border security, but Democrats desperately want those third-world voters familiar with life under socialism.
When Trump and Republicans opposed this ridiculous bill, Democrats accused them of refusing to fix the border problem because they “wanted to use it as an election issue.” In other words, Democrats tried to deflect the crisis they created back onto conservatives. But Donald Trump showed that no new bills were necessary.
It’s a simple enough problem to deal with and Trump deserves credit for proving that. Trump created the lowest rate of border crossings the US has seen in decades and he didn’t even need to “build the wall”, all he had to do was take away the incentives for migrants to show up.
Title 42 was a federal health order based on concerns over the covid pandemic, but the fundamentals of it could be applied without the threat of a health emergency. In tandem with Trump’s ‘Remain in Mexico’ policy, the order called for the immediate expulsion of migrants trying to cross the border without regard for amnesty, asylum or refugee claims.
The progressive model of immigration allows any illegal alien to declare that they come from an oppressive or dangerous nation without evidence, and they can stay in the US for years while their cases are reviewed by immigration courts. During this time illegals have access to a multitude of welfare programs and handouts. Some states are even offering home loans to non-citizens. The vast majority of illegals take advantage of these programs while also working under the table. Even if they are eventually removed from the US, they have already squeezed US taxpayers for thousands of dollars in goodies.
Democrats have widely supported this model and their motives are obvious, they intend to eventually offer these people mass citizenship in the hopes of buying off tens-of-millions of future voters. Fact checkers continue to lie about the number of illegals entering the US; they claim that border encounters and apprehensions are not the same as border entries. However, current Biden policies allow for the majority of these immigrants to enter the US under unconfirmed amnesty claims – They are not shipping the migrants back.
Biden has also been offering backdoor legal status for migrants from third world countries like Venezuela and Haiti, which explains the sudden surge of such nationals in towns across America. Harris now claims she wants to stem illegal immigration, but her policy sounds a lot like the fraudulent immigration bill that conservatives and the majority of Americans have already rejected.
The new Democrat immigration strategy is to copy Donald Trump’s immigration strategy (at least in rhetoric if not in action), while at the same time still trying to turn the millions of illegal migrants already in the US into votes so they can dominate American government for decades.
The bottom line? There’s absolutely no reason to trust that Harris will do anything about the border. Beyond that, political parties should not be allowed to import foreigners and use citizenship as a carrot to buy them off as voters. And every foreigner in the US illegally should be deported. This is not rocket science.
Tyler Durden
Sun, 09/29/2024 – 14:35 - Port Poker And The East Coast Dock Strike
Port Poker And The East Coast Dock Strike
By Stuart Chris of FreightWaves
“The sweetest words are, ‘Here is your end’ (of the bargain),” so a time-honored saying goes.
That’s never more true than in union negotiations where just about every player has a piece of the action, and particularly in the current bargaining between port employers and union dockworkers at three dozen ports on the U.S. East and Gulf coasts, a public-private kerfuffle that’s already gone all the way to the White House.
Unlike contract talks between, say, baseball team owners and the players union, which take place under a glare of 24-hour media, bargaining on longshore contracts is notoriously confidential, shrouded in secrecy save for occasional dueling news releases that only succeed in flattening the actual drama that threatens to hold hostage a good chunk of a U.S. (and global) goods economy that’s bigger in value than all the professional sports leagues put together. The rare leak of actual contract details is promptly disavowed as stakeholders wait anxiously for the next announcement.
That’s about how it’s gone during the current round of bargaining between port employers represented by the United States Maritime Alliance and the International Longshoremen’s Association, which count 25,000 workers in container and ro-ro services at ports from Maine to Texas. Whatever talks were taking place came to an abrupt halt in June when the union refused to buy what the employers were selling. The ILA, led by President Harold Daggett and his son, Executive Vice President Dennis Daggett, has since refused to return to negotiations, ratcheting up the rhetoric by calling for “war” against employers and insisting that “the docks belong to us.”
Now, it’s traditional for unions to “get paid” when times are good, and most indicators are on an upward trend. GDP grew at an annual rate of 3% in the third quarter of this year, up from 1.6% the previous two quarters while lower energy, food and transportation costs helped inflation cool to 2.5% in August, the smallest one-year increase since pandemic-influenced March 2021.
Throw in a tight jobs market, and that’s why a number of high-profile companies from UPS to railroads, airlines and automakers settled with their unions. Yes, machinists are on strike at beleaguered Boeing and thousands of hotel workers have walked off the job seeking higher wages and better working conditions, but mostly there is labor peace.
Containerized imports through U.S. gateways continue to surge to near-record levels, an indication that however people feel about the price of eggs, consumer sentiment to buy stuff remains resilient, a good sign leading up to the retail holiday season. Which brings us back to the East Coast longshore labor dispute.
As everyone discovered during the COVID-19 pandemic, container ports are a choke point in a supply chain as essential to daily life in the United States as water, electricity and telecommunications. Disruptions have a ripple effect throughout the economy and are exponentially compounded as goods pile up at ports, terminals, warehouses and other distribution points. So it takes longer to restart the flow of goods than it does to stop it. Considerably longer.
The domestic intermodal supply chain begins at the nation’s ports, and with some exceptions, it’s union employees who see to the efficient handling of incoming containers through these ports. Here’s where we see the players sitting in on a game where there’s more than one winning hand and a pot that only grows larger. But union contract negotiations aren’t like a winner-takes-all game of Texas Hold ’em. The optimal outcome of any negotiation is that all sides are rewarded as part of a compromise outcome.
But wait, it’s an election year. That’s like a doubling down for each container move! President Joe Biden courted union support in his abortive reelection campaign, going so far as to walk with auto plant employees on their picket line. The United Auto Workers, flush with new contracts, rewarded Biden with its endorsement (since inherited by Vice President Kamala Harris, the Democratic nominee since Biden dropped out in June).
So it was probably with more than a little trepidation that a cabal of importers, manufacturers, trade groups and House Republicans tried to pressure Biden to block an Oct. 1 strike by the ILA, for the good of the country, they said.
There’s a remedy for just such a move. The Taft-Hartley Act gives the president powers to intervene in a labor dispute if it might compromise the country’s essential services, and orders a cooling-off period while the sides resume contract negotiations under federal facilitation. Taft-Hartley was last invoked in 2002 by President George W. Bush to resolve a West Coast dock strike that threatened to imperil his first-term agenda.
So how to thread the needle? Biden told businesses he would not block a strike, but he might be playing semantics and still come back later and intervene, like Bush. Or, Biden can give the union some rope and let the work stoppage drag on just long enough to bake in 65,000 union votes ahead of an election where swing state polling is razor-thin, get employers to cave on a new longshore contract and — ta-da! — save Christmas!
That’s the view from on high. But there are other state and federal bodies waiting for their turns.
A container comes in from abroad, right away U.S. Customs and Border Protection claims its share of duties, taxes and tariffs. Ports are mostly public entities and extensions of local governments that rent space to private terminal operators, so the port is going to take its cut in order to continue to operate, and the local and state governments are going to collect taxes on goods as well as on port employees’ paychecks.
The past 20 years have seen an infrastructure arms race as port authorities of all sizes vie to outspend one another in a breathtaking bid to expand their container handling capacity while ocean carriers build ever-larger ships. And if a port can pave another hundred acres to expand ro-ro, well, vehicles are lucrative sources of import duties — up to 25% for a truck based on value.
So it’s always been in the interest of public entities not only to have thousands of union members on the ground, but to have that number actually increase, if at all possible. And while we’re at it, don’t forget the thousands more truck drivers who provide drayage services hauling containers in and out of the ports. The states and federal government collect taxes on their wages, too.
But a union isn’t a union without dues-paying members, so preserving jobs by keeping automation technology out of U.S. ports is always a high priority for ILA leadership even as, observers say, it compromises the efficiency of operations. Ports in Asia and Europe deploy advanced automation to make operations as efficient as possible, and U.S. ports struggle to keep pace. In 2023 the Port of Los Angeles-Long Beach complex, largest in the U.S., only ranked ninth for volume among the world’s container ports, and New York-New Jersey didn’t crack the top 20.
But who cares?!
The U.S. is the largest market for everything from cellphones to furniture to model trains made in China, the world’s largest exporter. China rightly has to worry about moving its stuff out as quickly as possible. While some automation has found its way into U.S. ports — always under the auspices of union contracts — governments and ports and, yes, unions are caught in the aforementioned Möbius strip of wants and needs that isn’t likely to substantially change the structure of U.S. port operations in the near term. And it doesn’t matter if getting containers through those ports is like trying to push an elephant through a keyhole. Let us worry about that!
Or more accurately, let consumers worry about it. They’re the ones buying all that imported merchandise, and they’ll be the ones paying for disruptions, delays and other assorted supply-chain snarls that will be baked into the price of whatever shiny object hits store shelves.
Eventually, the ILA will get its contract, containers will flow again and there will be labor peace — for six years at least.
Tyler Durden
Sun, 09/29/2024 – 14:00 - SpaceX Launches Rescue Mission For Two Stranded Boeing Starliner Astronauts On ISS
SpaceX Launches Rescue Mission For Two Stranded Boeing Starliner Astronauts On ISS
Just two weeks after SpaceX completed the historic Polaris Dawn mission, which included the first private spacewalk and the highest orbit since the Apollo era…
Views from Dragon in flight 🐉🌎
During its five day mission, Dragon and the Polaris Dawn crew completed 75 orbits around Earth pic.twitter.com/NzIFElzXAm
— SpaceX (@SpaceX) September 27, 2024
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… Elon Musk’s space company launched a Falcon rocket from Cape Canaveral, Florida, on Saturday to rescue the stranded Boeing Starliner astronauts on the International Space Station.
Falcon 9 launches Crew-9, the first human spaceflight mission to launch from pad 40 in Florida pic.twitter.com/BYpPPtaKqm
— SpaceX (@SpaceX) September 28, 2024
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NASA astronaut Nick Hague and Russian cosmonaut Alexander Gorbunov are aboard the Dragon capsule and will reach the ISS on Sunday afternoon.
Since NASA rotates ISS crews every six months, the stranded astronauts, Suni Williams and Butch Wilmore, won’t return to Earth until late February.
Boeing’s first astronaut flight with the Starliner launched in June was only supposed to last a week, but multiple failures, including thruster troubles and helium leaks, led NASA officials to deem the spacecraft too dangerous for Williams and Wilmore. The crewless Starliner returned to Earth earlier this month, landing without a problem in New Mexico.
After Saturday’s launch, NASA Deputy Administrator Pam Melroy said “human spaceflight” is very “complicated and dynamic.”
SpaceX noted after launch.
After today’s successful launch of Crew-9, Falcon 9’s second stage was disposed in the ocean as planned, but experienced an off-nominal deorbit burn. As a result, the second stage safely landed in the ocean, but outside of the targeted area.
We will resume launching after we…
— SpaceX (@SpaceX) September 29, 2024
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If the rest of the year goes well, SpaceX will launch close to 90% of all mass to orbit. China will be ~6% and rest of world ~4%.
— Elon Musk (@elonmusk) September 24, 2024
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Where is Jeff Bezos’ Blue Origin?
Tyler Durden
Sun, 09/29/2024 – 13:25 - John Kerry Says The Quiet Part Out Loud: "First Amendment Stands As Major Block" To "Govern"
John Kerry Says The Quiet Part Out Loud: “First Amendment Stands As Major Block” To “Govern”
The World Economic Forum held its ‘Sustainable Development Impact Meetings’ during last week’s United Nations General Assembly in New York City. Speaking at the meeting, far-left elitist and former presidential climate envoy John Kerry expressed frustration to fellow globalists, stating that the First Amendment frequently obstructs their agenda.
“Our First Amendment stands as a major block to the ability to be able to hammer [disinformation] out of existence. What we need is to win…the right to govern by hopefully winning enough votes that you’re free to be able to implement change,” Kerry said.
Kerry noted, “It’s very hard to govern today.”
“Our First Amendment stands as a major block to the ability to be able to hammer [disinformation] out of existence. What we need is to win…the right to govern by hopefully winning enough votes that you’re free to be able to implement change.”
No thanks.pic.twitter.com/SLGHOLVjCr
— Colin Wright (@SwipeWright) September 29, 2024
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We’ll translate “govern” for readers as it essentially means narration control (or official government-approved propaganda)—that is, through the censorship blob at federal government agencies in Washington, DC, the intel community, Silicon Valley’s big tech, fact-checkers, think tanks and legacy corporate media.
Kerry’s choice of words and tone shows that far-left radicals in the Obama-Biden-Harris team are frightened that their own misinformation and disinformation propaganda jammed through far-left corporate media outlets is no longer sticking as the citizens gravitate to the ‘free speech’ X platform run by Elon Musk for their news in the pursuit of truth after being lied to for decades by their corrupt government and corporate overlords.
Here’s the Conservative Treehouse’s Sundance take on Kerry:
Within the recent WEF discussion, Secretary Kerry outlines how freedom of speech is a ‘threat to the global democracy ‘because the governing officials have a difficult time controlling information. Kerry goes on to posit how the next administration, presumably in his hope Kamala Harris, will forcefully structure all the tools of government to stop Americans from using the first amendment to freely speak about issues.
Governing is too challenging, according to Kerry, when the government cannot stop people from seeking and discovering information that is against their interests. Effective governing required compliant adherence to a singular ideology. Against the backdrop of COVID-19 and a host of similarly related government narratives, if people are free to find alternative information and think for themselves, they become increasingly more difficult to control. Yes, this is said quite openly. This is the mindset of those in power.
At a separate WEF meeting earlier this year, Emma Tucker, WSJ Chief Editor, said the days of corporate media “owning the news” and “being the gatekeepers of the facts” are over as she complained people are going to ‘other sources’ and questioning the official government-approved narrative.
This is why the fake news media is attacking Elon and the X platform. They have lost control of the narrative they once had.
“We owned the news. We were the gatekeepers, and we very much owned the facts as well”.
🔊 … Emma Tucker, WSJ Chief Editor
— Wall Street Silver (@WallStreetSilv) January 20, 2024
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The masters of deception, that being the globalists, who are hellbent on dividing and conquering, have seen their power and control begin to wither away, because how dare the people actually be informed with truth and pick their own news sources!
It’s our time.
We must unite. It’s time to RESCUE THE REPUBLIC.
Join us in Washington D.C on 9/29/24 #RescueTheRepublic #JoinTheResistance #Unite pic.twitter.com/lbkZXMmpk0
— RescueTheRepublic (@RescueRepublic) September 18, 2024
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Hence why, these globalists are waging war against Musk’s X on a global stage.
- X Warns Of Brazil Shutdown ‘Soon’ For Defying Judge’s “Illegal Orders To Censor Political Opponents”
Here’s what others are saying about far-left Kerry:
That pesky 1st Amendment always gets in their way. They hate the 2nd even more.
— Courage Is A Habit (@CourageHabit) September 29, 2024
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John Kerry says “It’s very hard to govern today”.
Govern = Control
They’re frightened of losing control of truth being exposed.
— Patrick Bet-David (@patrickbetdavid) September 29, 2024
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The vision of democracy held by John Kerry involves a small cabal of haughty people designating truths and falsehoods, and suppressing disfavored speech.
Whether the truths are true or the falsehoods false does not matter as long as the high get to decide which is which. https://t.co/h5oX5joGcd
— Jay Bhattacharya (@DrJBhattacharya) September 29, 2024
The quiet part is being said out loud: Globalists want to rip up the Constitution.
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Thomas Jefferson said “In questions of power, let no more be heard of confidence in man, but bind him down from mischief by the chains of the constitution.” Of course, power hungry politicians don’t like the chains that bind them. But those chains are there to protect the people.
— Peter Schiff (@PeterSchiff) September 29, 2024
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Correct.
⬇️The fact that they are willing to say this in the open shows just how bad things are behind the scenes.
It’s not just some isolated comment. The censorship enterprise is massive and wants to silence YOU. https://t.co/hmpwqcXfZM
— America First Legal (@America1stLegal) September 29, 2024
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* * *
Tyler Durden
Sun, 09/29/2024 – 12:15 - 'Complete Obliteration': DeSantis Says Hurricane Helene Damage Worse Than Idalia
‘Complete Obliteration’: DeSantis Says Hurricane Helene Damage Worse Than Idalia
Authored by T.J. Muscaro via The Epoch Times (emphasis ours),
Florida’s Gov. Ron DeSantis said Hurricane Helene’s “monumental storm surge” caused far greater damage than last year’s Idalia.
“Clearly you saw storm surge in excess of 15 feet,” DeSantis said to reporters in Taylor County’s Dekle Beach on the morning of Sept. 28.
Officer Nate Martir, a law enforcement officer from the Florida Fish Wildlife and Conservation Commission, holds an American flag that was lying on the ground amid debris, while patrolling from a high water capable swamp buggy, in the aftermath of Hurricane Helene, in Cedar Key, Fla., Friday, Sept. 27, 2024. AP Photo/Gerald Herbert “So that is much, much more significant than what we’ve seen in recent storms like Idalia that hit and certainly Debbie, and that is really, really destructive. So, as you look around here, you see some homes that are now just rubble.”
He said some of the damage he saw while flying over the affected coastline on Sept. 27 en route to Cedar Key was “complete obliteration.”
As recovery and emergency response efforts continue across the southeast United States in the aftermath of Hurricane Helene, more than 50 storm-related deaths have been confirmed, and early estimates expect to see more than $15 billion in damages.
DeSantis confirmed that at least 11 of those storm-related fatalities occurred in the state. However, none of these fatalities occurred in Taylor County, where Helene made landfall as a Category 4 hurricane.
The governor was joined by the executive director of Florida’s Department of Emergency Management, Kevin Guthrie, and FEMA Director Deanne Criswell. They expressed their shared desire to put everyone affected into a safe, dry living space, whether that is providing assistance through the state housing repair program, or provide full temporary housing in the form of trailer either through the state housing program or FEMA’s federal direct housing program.
Guthrie said that trailers were already on their way to Taylor County and portions of Levy County, but he emphasized that they were a temporary solution. Florida building code does not allow permanent travel trailer construction in these areas, especially on the beach in Taylor County.
“We want to help you get through that temporary [housing] onto what your permanent housing is going to be,” he said.
Thousands of emergency response missions have been undertaken since Sept. 26, and power has been restored to nearly 2 million customers across the state. On Sept. 27, The Epoch Times reported more than 1.3 million customers were simultaneously out of power. As of 12:30 p.m. on Sept. 28, that number is down to a little more than 425,000.
The governor also confirmed that more than 12,000 miles of roadways have been cleared by more than 800 cut-and-toss crews, and 1,400 bridges have been inspected by 129 inspectors. Major bridges have already reopened, including the Sunshine Skyway and Howard Franklin bridges in Tampa Bay.
However, several roads and areas across the state remain inaccessible, including barrier islands in Pinellas County. Search and rescue missions from Florida’s National Guard, Florida’s State Guard, and local law enforcement are still ongoing.
Other states also received devastating effects from Hurricane Helene. The list of fatalities includes people in Georgia, South Carolina, North Carolina, and Virginia.
More than 1 million customers are still without power in South Carolina. Significant power outages had been recorded in the other aforementioned states as well as West Virginia, Tennessee, Kentucky, Indiana, and Ohio.
Historic rainfall of more than 11 inches in less than 48 hours was recorded in Atlanta.
Multiple tornadoes were confirmed in North Carolina, and immense rain and landslides have all but cut off the western portions of the state.
“All roads in Western North Carolina should be considered closed,” the North Carolina Department of Transportation stated on its website. ”I-40 and I-26 are impassable in multiple locations. Travel in this area for non-emergency purposes is hindering needed emergency response.”
Departing flights out of Asheville Regional Airport in North Carolina have been canceled through 4:50 p.m. local time on Saturday.
North Carolina’s Gov. Roy Cooper issued a major disaster declaration request for 39 counties and the Eastern Band of Cherokee Indians on Sept. 28, specifically requesting federal public assistance and individual assistance in the storm’s aftermath.
“Helene brought pain and destruction to our state and we’re working to get help to people quickly,” Cooper said in a press release. “As waters recede and winds die down, families and communities will need assistance to clean up and recover and this request can help speed up the process.”
The remnants of now-post tropical cyclone Helene are expected to hover over the Tennessee Valley for the remainder of the weekend.
Moody’s Analytics said it expects $15 billion to $26 billion in property damage.
Tyler Durden
Sun, 09/29/2024 – 11:40
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