Today’s News 3rd May 2021

• "Monster-Size Lava Fountain" Erupts In Iceland 
  “Monster-Size Lava Fountain” Erupts In Iceland 

  An Icelandic resident uploaded a stunning video on YouTube of a new volcanic eruption early Sunday morning. 

  YouTube “Sigfús Steindórsson“ has been following a new fissure vent that opened a couple of weeks ago and is visible from Reykjavík, the capital of Iceland. 

  The latest development from the fissure was a “monster-size lava fountain, the biggest since the eruption started,” said Steindórsson. They said the eruption occurred around midnight local time and was filmed around 0200 Sunday. 

  Twitter handle “the 3D Podcast” caught a similar view of the eruption early Sunday morning. 

  

  We’ve noted the Reykjanes Peninsula has been dormant for a number of years, and volcanic activity sprung back to life in March after tens of thousands of earthquakes were recorded. 

  Here’s the current map of active volcanoes around the world. 

  

  There’s no telling when volcanic activity in Iceland will simmer down. 

  Tyler Durden
  Mon, 05/03/2021 – 02:45

• Turkey: How Erdogan's Pledge For Reform Collapsed In Five Months
  Turkey: How Erdogan’s Pledge For Reform Collapsed In Five Months

  Authored by Burak Bekdil via The Gatestone Institute,

  His critics often joke that when President Recep Tayyip Erdoğan pledges democratic reforms, one should run away immediately. His latest charm offensive in November, aimed at repairing Turkey’s badly-strained ties with the West and Western institutions, has proven that the joke still holds value.

  “We don’t see ourselves elsewhere but in Europe,” Erdoğan said on November 21.

  “We envisage building our future together with Europe.”

  Two days later, Defense Minister Hulusi Akar described NATO as the “cornerstone of our defense and security policy” and said that Turkey was looking forward to cooperating with the incoming administration under Joe Biden in the United States. Erdoğan also promised a bold package of democratic reforms.

  

  Less than five months later, Italy’s Prime Minister Mario Draghi had to call Erdoğan a “dictator.”

  That was not because an experienced European politician wanted to insult a Muslim head of state.

  According to Turkish news site Gazete Duvar, a total of 128,872 people have been indicted in the past six years for insulting Erdoğan. Of those, 27,824 had to stand trial and 9,556 were convicted. By comparison, only 11 Turks had been convicted for insulting Ahmet Necdet Sezer, president between 2000 and 2007.

  After Erdoğan’s latest reform pledge, on March 21, Turkish authorities arrested a pro-Kurdish opposition MP who had refused to leave parliament for several days after his seat was revoked. Ömer Faruk Gergerlioğlu “was brought out by force while he was in pyjamas and slippers” by “nearly 100 police officers,” the leftist Peoples’ Democratic Party (HDP) said in a statement.

  On March 17, the Supreme Court Chief Public Prosecutor’s Office filed a lawsuit against HDP for its closure on the grounds that it has links with “terror acts.” On April 14, state prosecutors asked for the removal of the parliamentary immunity of main opposition leader Kemal Kılıçdaroğlu and nine MPs from his Republican People’s Party (CHP). Apparently, Erdoğan wants a democratic system without opposition.

  This month, Europe’s top human rights court ruled that the right to liberty and freedom of expression of Turkish journalist and author Ahmet Altan had been violated due to his detention and imprisonment on charges related to a 2016 coup attempt. Altan, 71, has been in prison since September 2016, when he was detained over allegations that, during a TV program, he disseminated “subliminal messages” related to the coup attempt, as well as for articles he had written criticizing the government. Shortly after that ruling, the Turkish Court of Appeals released Altan. In other words, Altan had been unlawfully imprisoned for 55 months, nearly five years.

  That was “normal” in a country where an army of pro-government judges has the habit of announcing rulings in defiance of rulings from superior Turkish courts, including the Constitutional Court, and from the European Court of Human Rights. Those judges who dare make “undesirable verdicts” are probed and often get disciplinary punishments. Erdoğan’s coalition partner and staunchest political ally, ultra-nationalist leader Devlet Bahçeli, has called for the closure of the country’s top judicial institution, the Constitutional Court.

  On April 5, Turkish prosecutors detained 10 retired admirals over their public criticism of Erdoğan’s multi billion-dollar Istanbul canal project, which will create a new artificial waterway from the Black Sea to the Marmara Sea, to complement the Bosporus Strait. The arrest warrants came a day after a group of 104 former senior navy officials signed an open letter warning that the proposed canal could harm Turkish security by invalidating an 85-year-old international treaty (the Montreux Convention) designed to prevent militarization of the Black Sea. Pro-Erdoğan officials and prosecutors interpreted the statement as a direct challenge from the military to the civilian government, “echoing coup times.”

  The prosecutors’ move is in direct breach of the Article 26 of the Turkish Constitution:

  “Everyone has the right to express and disseminate his/her thoughts and opinions by speech, in writing or in pictures or through other media, individually or collectively. This freedom includes the liberty of receiving or imparting information or ideas without interference by official authorities. This provision shall not preclude subjecting transmission by radio, television, cinema, or similar means to a system of licensing.”

  But who cares about the Constitution in a country where the governing bloc is proposing to close down even the Constitutional Court, in addition to banning opposition parties?

  All these autocratic measures occurred in the less than half-year since Erdoğan pledged democratic reforms. But no story would be completely Turkish without an element of black humor: Where is the $128 billion?

  That sum refers to the US dollars sold by state banks to support the Turkish lira in foreign exchange markets. The policy began around the time of the March 2019 municipal elections and was ramped up in 2020, when the pandemic laid bare the lira’s vulnerability and Turkey’s reliance on external funding. Bankers have calculated that the sales totaled $128.3 billion in 2019-20.

  As government officials remain mute on the question, the main opposition CHP recently launched a campaign to embarrass Erdoğan’s ruling Justice and Development Party (AKP) by hanging huge posters on CHP party buildings across the country with the simple question: Where is the $128 billion? Not one more word. Not one single comment or insult. Just a question, though annoying especially at a time of economic crisis.

  Turkish police started to rip down those posters without court orders. As one prosecutor confessed in a letter to a governor, “We cannot find a legal pretext to declare the posters illegal. You must rip them down citing administrative reasons.”

  In protest, a CHP MP hung the same poster outside his office office window in the parliament building. Parliament’s administrative directors had to send a fire truck to rip down the poster. The MP said he would hang it again.

  Erdoğan’s effort to hang onto power is taking uglier shapes every new day. A few years ago, then Prime Minister Ahmet Davutoğlu had vehemently denied claims that Turkey was a second-class democracy. He was right. Turkey has since remained a third-class democracy.

  Tyler Durden
  Mon, 05/03/2021 – 02:00

• The Fourth Turning: Why America's "Crisis" May Last Until 2030
  The Fourth Turning: Why America’s “Crisis” May Last Until 2030

  Authored by ‘FreeSpeechFan’ via TheDuran.com,

  It is comforting that the Fourth turning is part of a natural cycle but also very disturbing that it is a period of crisis. As we know from previous cycles, many people suffer and die during a fourth turning.  However, I think we all know that a crisis is upon us as the corruption, collusion, scheming, propaganda, and self interest reaches its peak. 

  The worst of the baby boomers, Biden, Kerry, Pelosi, Bill Gates, are at their worst.  We don’t yet know what will take their place, but their chaos and selfishness will be swept aside as order, rules, truth, and structure takes its place. 

  The movement will be from Yin to Yang, Chaos to Order, Freedom to Self Control, Self Interest to the Collective, Corruption to Honor, Secular to Faith. 

  There will be a “New World Order” but not the one chosen for us by the Bush Cabal or the CCP Cabal or the Globalist Cabal.  They are the cause of the crisis but not the solution.  Gen X will help smooth the path of the crisis, but only the millennials hold the answer to the question of what will the New World Order look like. 

  I hope they choose well, as it does not have to be communism, fascism, or socialism. It won’t be!  These are tired old doctrines that don’t work, they are being used as facades for the corrupt to hide their true motives behind.  They will be swept away, too!

  

  *  *  *

  The Fourth Turning: Why American ‘Crisis’ May Last Until 2030

  Editor’s Note: Below is a 14-minute video narrated by Hedgeye Demography Sector Head Neil Howe describing the generational theory put forth in his 1997 classic “The Fourth Turning,” co-authored with William Strauss.

  Also below is a brief essay originally published on 3/11/19 by Neil discussing the typical progression of each “Turning”. It remains more relevant than ever amidst our current zeitgeist. Neil’s work has influenced politicians from Newt Gingrich to Al Gore and all of it culminates in a grand theory advanced in The Fourth Turning which he elaborates on in the video and text below.

  NH: We live in a tumultuous time in American history.

  The 2008 financial crisis and all its hardships, was the catalyst that tipped us into this age of uncertainty. It marked the start of a generation-long era of secular upheaval that will continue to run its course over the next decade or so. This is the generational theory I laid out in “The Fourth Turning,” a book I co-authored with William Strauss in 1997.

  The Fourth Turning explains the rise of a figure like President Trump. In Trump’s Inauguration Day speech, he painted a bleak picture of “American carnage,” of “rusted-out factories scattered like tombstones across the landscape of our nation” with “mothers and children trapped in poverty in our inner cities.”

  Looking abroad, it’s unclear whether America will turn inward and fall prey to nativism or maintain it’s nearly seventy year role as leader of the Free World. Other countries are becoming similarly insular. Britain voted to exit the European Union and we’ve heard anti-E.U. rumblings echoed throughout Europe from France to the Netherlands.

  Other nations and peoples around the world are looking to either fill the vacuum in global leadership or exploit it to advance their own ambitions. We’ve seen the thunderous rise of Chinese economic clout, the calculating geopolitical maneuvering of a resurgent Russia, and the barbarous chaos wrought by the so-called Islamic State.

  In many ways, this era of uncertainty follows the natural order of things. Like Nature’s four seasons, the cycles of history follow a natural rhythm or pattern. Over the past five centuries, Anglo-American society has entered a new era – a new turning – every two decades or so.

  At the start of each turning, people change how they feel about themselves, the culture, the nation, and the future. Turnings come in cycles of four. Each cycle spans the length of a long human life, roughly eighty to one hundred years, or a unit of time the ancients called the saeculum.

  THE FIRST TURNING IS CALLED A HIGH.

  This is an era when institutions are strong and individualism is weak. Society is confident about where it wants to go collectively, even if those outside the majoritarian center feel stifled by the conformity.

  America’s most recent First Turning was the post-World War II American High, beginning in 1946 and ending with the assassination of John Kennedy in 1963, a key lifecycle marker for today’s older Americans.

  THE SECOND TURNING IS AN AWAKENING.

  This is an era when institutions are attacked in the name of personal and spiritual autonomy. Just when society is reaching its high tide of public progress, people suddenly tire of social discipline and want to recapture a sense of personal authenticity. Young activists and spiritualists look back at the previous High as an era of cultural poverty.

  America’s most recent Awakening was the “Consciousness Revolution,” which spanned from the campus and inner-city revolts of the mid 1960s to the tax revolts of the early ‘80s.

  THE THIRD TURNING IS AN UNRAVELLING.

  The mood of this era is in many ways the opposite of a High. Institutions are weak and distrusted, while individualism is strong and flourishing. Highs follow Crises, which teach the lesson that society must coalesce and build. Unravelings follow Awakenings, which teach the lesson that society must atomize and enjoy.

  America’s most recent Unraveling was the Long Boom and Culture Wars, beginning in the early 1980s and probably ending in 2008. The era opened with triumphant “Morning in America” individualism and drifted toward a pervasive distrust of institutions and leaders, an edgy popular culture, and the splitting of national consensus into competing “values” camps.

  AND FINALLY WE ENTER THE FOURTH TURNING, WHICH IS A CRISIS.

  This is an era in which America’s institutional life is torn down and rebuilt from the ground up—always in response to a perceived threat to the nation’s very survival. Civic authority revives, cultural expression finds a community purpose, and people begin to locate themselves as members of a larger group.

  In every instance, Fourth Turnings have eventually become new “founding moments” in America’s history, refreshing and redefining the national identity. Currently, this period began in 2008, with the Global Financial Crisis and the deepening of the War on Terror, and will extend to around 2030. If the past is any prelude to what is to come, as we contend, consider the prior Fourth Turning which was kicked off by the stock market crash of 1929 and climaxed with World War II.

  Just as a Second Turning reshapes our inner world (of values, culture and religion), a Fourth Turning reshapes our outer world (of politics, economy and empire).

  To be clear, the road ahead for America will be rough. But I take comfort in the idea that history cycles back and that the past offers us a guide to what we can expect in the future. Like Nature’s four seasons, the cycles of history follow a natural rhythm or pattern.

  Make no mistake. Winter is coming. How mild or harsh it will be is anyone’s guess but the basic progression is as natural as counting down the days, weeks and months until Spring. 

  Tyler Durden
  Sun, 05/02/2021 – 23:40

• Something Fishy Happening In Miami As Thousands Of Koi Suddenly Die 
  Something Fishy Happening In Miami As Thousands Of Koi Suddenly Die 

  Something fishy is happening in Miami as thousands of pricy koi fish have turned up dead at several homes and a city park. It’s more than fish, birds, plants, and wild raccoons are mysterious dying, according to local news WPLG Local 10. 

  The epicenter of the thousands of dead koi is happening in Coconut Grove, a shoreline neighborhood in Miami bordering Biscayne Bay. Homeowners in the community report thousands of their fish have “all of a sudden died.” 

  “We’re not talking about a couple of fish or even hundreds of fish. We’re talking about thousands of fish that, all of a sudden, have turned up dead,” said WPLG. 

  

  No one seems to know why the koi are suddenly dying. What’s troubling is the sudden death of the fish is happening across the neighborhood. 

  Resident Lee Marks woke up Saturday morning to koi and other exotic fish dead in his pond. 

  “All these beautiful coy fish and other fish just dead,” he said. “It’s just awful. It’s horrible.”

  Marks and other residents are demanding answers as to why their fish in backyard ponds are dying. 

  “They just all don’t die at once like that,” he said.

  Pond Doctors, a Miami-based company focused on maintaining private ponds, told WPLG their crews have responded to “devastating fish kills” at four homes in the Coconut Grove neighborhood in the last two weeks. 

  

  “Thousands of fish have turned up dead from one day to the next, all in the same area,” said Jen Wheeler, the owner of Pond Doctors.

  “To have them suddenly pass away for some unknown reason is really scary because you also start to think what else is this affecting,” Wheeler said. “Other than the fish that we are in love with.”

  WPLG adds it’s more than fish. Local wildfire is also mysterious dying, including birds, plants, and mammals. 

  Marks said a raccoon convulsed and died in his yard. 

  “It came up right up the driveway and turned on its side,” Marks said. “It looked like it might be playful, but it was convulsing and just died.”

  

  Wheeler said the oxygen levels in all the neighborhood ponds were normal and serviced regularly. 

  “To have so many animals affected by this, something is going on,” she said.

  Wheeler called Miami-Dade County to see if mosquito companies had recently sprayed in the area. The answer local government officials gave her was that spraying last occurred in 2017. 

  Dead fish have also turned up in Miami’s Simpson Park. The common theme with all these ponds is the source of water is connected to a local aquifer. 

  “We’re still trying to figure out what’s in the groundwater and what is causing it,” Wheeler said.

  The “canary in the coal mine” is the sudden death of koi and other animals and how something toxic could be lurking in the area’s aquifer.

  Tyler Durden
  Sun, 05/02/2021 – 23:15

• Biden Admin Cancels Military-Funded Border Wall Projects
  Biden Admin Cancels Military-Funded Border Wall Projects

  Authored by Jack Phillips via The Epoch Times,

  The Department of Defense (DOD) announced it is canceling U.S.-Mexico border wall construction efforts that were paid with funds that were initially allocated for the military.

  

  Work is done on a new border wall being constructed in Jacumba, Calif., on Jan. 22, 2021. (Sandy Huffaker/Getty Images)

  Former President Donald Trump ordered the diversion of billions of dollars in military and defense funds toward building the wall, using his emergency executive powers.

  “The Department of Defense is proceeding with canceling all border barrier construction projects paid for with funds originally intended for other military missions and functions such as schools for military children, overseas military construction projects in partner nations, and the National Guard and Reserve equipment account,” said Jamal Brown, a spokesperson for the Pentagon, in a statement.

  Brown said the returned funds will now be used for deferred military construction projects.

  “DOD has begun taking all necessary actions to cancel border barrier projects and to coordinate with interagency partners. Today’s action reflects this Administration’s continued commitment to defending our nation and supporting our service members and their families,” he said.

  The Department of Homeland Security also announced on Friday that it would take steps to address “physical dangers resulting from the previous administration’s approach to border wall construction.”

  The decision is expected to draw criticism from Republicans.

  GOP Congress members have previously accused President Joe Biden of illegally halting congressionally approved border wall construction projects, while the Government Accountability Office is investigating whether the administration acted illegally.

  Sen. Jim Risch (R-Idaho) described Friday’s move as a national security threat.

  “Having a secure, defined border is important to our national security & public health efforts. This is an ill-advised decision at best,” he wrote on Twitter.

  Illegal immigration has become an issue for Biden as his administration has dealt with a surge of illegal immigrants and unaccompanied minors along the southern border. Several weeks after taking office in January, Biden signed executive orders rescinding several of Trump’s policies, including the “remain in Mexico” initiative.

  Even some Democrats have faulted the president for his messaging, including Sen. Mark Kelly (D-Ariz.), who said the president has not laid out a comprehensive immigration plan so far.

  “While I share President Biden’s urgency in fixing our broken immigration system, what I didn’t hear tonight was a plan to address the immediate crisis at the border,” he stated, referring to Biden’s speech to Congress on Wednesday. “And I will continue holding this administration accountable to deliver the resources and staffing necessary for a humane, orderly process.”

  Tyler Durden
  Sun, 05/02/2021 – 22:50

• Ethereum Surges Above $3,000; Now Bigger Than BofA & Disney
  Ethereum Surges Above $3,000; Now Bigger Than BofA & Disney

  In the immortal words of Ron Burgundy, “that escalated quickly.”

  In 15 calendar days, Ethereum has gone from sub-$2000 puke to being over $3000 ($3028 highs)…

  

  Source: Bloomberg

  Ether has quadrupled year-to-date (dramatically outperforming bitcoin, which itself has put in a none-too-shabby double YTD)…

  

  Source: Bloomberg

  ETH is now at its strongest relative to BTC since Aug 2018…

  

  Source: Bloomberg

  As CoinTelegraph notes, the remarkable run has even prompted renewed speculation that Ethereum could “flippen” Bitcoin, overtaking BTC as the largest digital currency in the world.

  The first time we detailed Ethereum’s potential was in February 2017 (when ETH was at around $13)…

  “Because of its capacity for smart contracts — and other complicated computing capacities — Ethereum is viewed as more agile and adaptable than Bitcoin.”

  

  Ethereum is now bigger than Bank of America, Disney, and Home Depot:

  

  Source

  There are multiple catalysts behind Ethereum’s rise, as CoinTelegraph details:

  The first is an ongoing surge in activity on the chain, including from institutional entities: earlier in the week the European Investment Bank announced it would be issuing a two-year digital bond worth $121 million in collaboration with banking entities such as Goldman Sachs.

  Retail interest in DeFi has also been rising as of late, with total value locked numbers reaching astonishing highs above $100 billion.

  

  However, the “London” hardfork, which includes the EIP-1559 overhaul of Ethereum’s fee structure, as well as the subsequent looming ETH 2.0 transition to a proof-of-stake consensus model, may be the prime events investors are anticipating. These upgrades to the network are expected to significantly decrease fees, as well as reduce the amount of ETH rewarded to miners – which in turn is expected to decrease sell-side pressure on the asset.

  Billionaire Mark Cuban offered an interesting thread on the entire crypto-space this evening:

  Crypto succeeds when it’s a more productive implementation of it’s competition.

  BTC/Gold are both financial religions.

  BTC is easy to trade/store/create with no delivery issues. BTC also enables transfer of value locally and globally . Gold is a hassle.

  Just look at Ft Knox 

  Eth Smart Contracts are better, cheaper, faster at authenticating/buying/selling/delivering digital items than alternatives available. This makes it a viable currency and trading mechanism for all things digital. That’s powerful and will grow as applications are added 

  Eth Smart Contracts for De-Fi are better at enabling depositing/saving/trading of financial instruments than banks. One is automated and trustless and near immediate. The other is dependent on buildings full of people who add cost and friction to the same transactions 

  Where alt coins can offer rewards to their holders because they gain revenue for the more productive service they offer, they can succeed with enough users. It is VERY COMPETITIVE. Barriers to entry are minimal. Which is the risk to all participants. But rewards better solutions 

  Meme coins like Doge only work if they gain utility and users use them for that utility. As long as you can spend Doge , because we know it’s annual inflation rate is set at 5b coins, it can gain SOME value as the utility grows. It becomes like any other currency… 

  As long as more companies take doge for products/services, then Doge can be a usable currency because it MAY hold its purchasing value better than a $ in your bank. If interest rates skyrocket or the amount spent falls or stagnates, so will Doge. Yes, a joke is now legit 

  Crypto not just about being more productive and effective, but also no longer dependent on “trusted institutions” Ask PPP applicants how much they trust their big banks? Do you trust your health insurer?. Crypto is trustless and a better way to handle many transactions. 

  So when someone says they don’t get why crypto assets have value. Show them this.

  Between the enormous amount of activity on Ethereum, the economic improvements to Ether, and the promise of increased scalability with Ethereum 2.0, there is a lot for the Ethereum community to be excited about.

  Finally, we note that FundStrat’s Tom Lee maintains his $10,500 target for Ethereum as we detailed here (and suggests the possibility of a $35k target).

  Tyler Durden
  Sun, 05/02/2021 – 22:25

• FISA And The Still Too Secret Police
  FISA And The Still Too Secret Police

  Authored by James Bovard,

  The FBI continues to lawlessly use counterintelligence powers against American citizens…

  

  The Deep State Referee just admitted that the FBI continues to commit uncounted violations of the Foreign Intelligence Surveillance Act of 1978 (FISA).

  If you sought to report a crime to the FBI, an FBI agent may have illegally surveilled your email. Even if you merely volunteered for the  FBI “Citizens Academy” program, the FBI may have illegally tracked all your online activity.

  But the latest FBI offenses, like almost all prior FBI violations, are not a real problem, according to James Boasberg, presiding judge of the U.S. Foreign Intelligence Surveillance Court. That court, among other purposes, is supposed to safeguard Americans’ constitutional right to privacy under FISA. FISA was originally enacted to create a narrow niche for foreign intelligence investigations that could be conducted without a warrant from a regular federal court. But as time passed, FISA morphed into an uncontrolled yet officially sanctioned privacy-trampling monster. FISA judges unleash the nuclear bomb of searches, authorizing the FBI “to conduct, simultaneous telephone, microphone, cell phone, e-mail and computer surveillance of the U.S. person target’s home, workplace and vehicles,” as well as “physical searches of the target’s residence, office, vehicles, computer, safe deposit box and U.S. mails.”

  In 2008, after the George W. Bush administration’s pervasive illegal warrantless wiretaps were exposed, Congress responded by enacting FISA amendments that formally entitled the National Security Agency to vacuum up mass amounts of emails and other communication, a swath of which is provided to the FBI. In 2018, the FISA court slammed the FBI for abusing that database with warrantless searches that violated Americans’ rights. In lieu of obeying FISA, the FBI created a new Office of Internal Audit. Deja vu! Back in 2007, FBI agents were caught massively violating the Patriot Act by using National Security Letters to conduct thousands of illegal searches on Americans’ personal data. Sen. Richard Durbin (D-Ill.) declared that an Inspector General report on the abusive searches “confirms the American people’s worst fears about the Patriot Act.” FBI chief Robert Mueller responded by creating a new Office of Integrity and Compliance as “another important step toward ensuring we fulfill our mission with an unswerving commitment to the rule of law.” Be still my beating heart!

  The FBI’s promise to repent after the 2018 report sufficed for the FISA court to permit the FBI to continue plowing through the personal data it received from NSA. Monday’s disclosure—a delayed release of a report by the court last November—revealed that the FBI has conducted warrantless searches of the data trove for “domestic terrorism,” “public corruption and bribery,” “health care fraud,” and other targets—including people who notified the FBI of crimes and even repairmen entering FBI offices. As Spencer Ackerman wrote in the Daily Beast, “The FBI continues to perform warrantless searches through the NSA’s most sensitive databases for routine criminal investigations.” That type of search “potentially jeopardizes an accused person’s ability to have a fair trial since warrantlessly acquired information is supposed to be inadmissible. The FBI claimed to the court that none of the warrantlessly queried material ‘was used in a criminal or civil proceeding,’ but such usage at trial has happened before,” Ackerman noted. Some illicit FBI searches involve vast dragnets. As the New York Times reported, an FBI agent in 2019 conducted a database search “using the identifiers of about 16,000 people, even though only seven of them had connections to an investigation.”

  In the report released Monday, Judge Boasberg lamented “apparent widespread violations” of the legal restrictions for FBI searches. Regardless, Boasberg kept the illicit search party going: “The Court is willing to again conclude that the . . . [FBI’s] procedures meet statutory and Fourth Amendment requirements.” “Willing to again conclude” sounds better than “close enough for constitutional.”

  At this point, Americans know only the abuses that the FBI chose to disclose to FISA judges. We have no idea how many other perhaps worse abuses may have occurred. For a hundred years, the FBI has buttressed its power by keeping a lid on its crimes. Unfortunately, the FISA Court has become nothing but Deep State window dressing—a facade giving the illusion that government is under the law. Consider Boasberg’s recent ruling in the most brazen FISA abuse yet exposed. In December 2019, the Justice Department Inspector General reported that the FBI made “fundamental errors” and persistently deceived the FISA court to authorize surveilling a 2016 Trump presidential campaign official. The I.G. report said the FBI “drew almost entirely” from the Steele dossier to prove a “well-developed conspiracy” between Russians and the Trump campaign even though it was “unable to corroborate any of the specific substantive allegations against Carter Page” in that dossier, which was later debunked.

  A former FBI assistant general counsel, Kevin Clinesmith, admitted to falsifying key evidence to secure the FISA warrant to spy on the Trump campaign. As a Wall Street Journal editorial noted, Clinesmith “changed an email confirming Mr. Page had been a CIA source to one that said the exact opposite, explicitly adding the words ‘not a source’ before he forwarded it.” A federal prosecutor declared that the “resulting harm is immeasurable” from Clinesmith’s action. But at the sentencing hearing, Boasberg gushed with sympathy, noting that Clinesmith “went from being an obscure government lawyer to standing in the eye of a media hurricane… Mr. Clinesmith has lost his job in government service—what has given his life much of its meaning.” Scorning the federal prosecutor’s recommendation for jail time, Boasberg gave Clinesmith a wrist slap—400 hours of community service and 12 months of probation.

  The FBI FISA frauds profoundly disrupted American politics for years and the din of belatedly debunked accusations of Trump colluding with Russia swayed plenty of votes in the 2018 midterms and the 2020 presidential election. But for the chief FISA judge, nothing matters except the plight of an FBI employee who lost his job after gross misconduct. This is the stark baseline Americans should remember when politicians, political appointees, and judges promise to protect them from future FBI abuses. The FISA court has been craven, almost beyond ridicule, perennially. Perhaps Boasberg was simply codifying a prerogative the FISA court previously awarded upon FBI officials. In 2005, after a deluge of false FBI claims in FISA warrants, FISA Presiding Judge Colleen Kollar-Kotelly proposed requiring FBI agents to swear to the accuracy of the information they presented. That never happened because it could have “slowed such investigations drastically,” the Washington Post reported. So, FBI agents continue to lie with impunity to the judges.

  The FISA court has gone from pretending that FBI violations don’t occur to pretending that violations don’t matter. Practically the only remaining task is for the FISA court to cease pretending Americans have any constitutional right to privacy. But if a sweeping new domestic terrorism law is passed, perhaps even that formal acknowledgement will be unnecessary. Beginning in 2006, the court rubber-stamped FBI requests that bizarrely claimed that the telephone records of all Americans were “relevant” to a terrorism investigation under the Patriot Act, thereby enabling NSA data seizures later denounced by a federal judge as “almost Orwellian.” FISA could become a peril to far more Americans if Congress formally creates a new domestic terrorism offense and a new category for expanding FISA searches.

  The backlash from Democrats after the January 6 clash at the Capitol showcased the demand for federal crackdowns on extremists who doubted Biden’s election, disparaged federal prerogatives, or otherwise earned congressional ire. If a domestic terrorism law is passed, the FBI will feel as little constrained by the details of the statute as it does about FISA’s technicalities. Will FBI agents conducting warrantless searches rely on the same harebrained standard the NSA used to target Americans: “someone searching the web for suspicious stuff”?  Unfortunately, unless an FBI whistleblower with the same courage as former NSA analyst Edward Snowden steps forward, we may never know the extent of FBI abuses.

  Tyler Durden
  Sun, 05/02/2021 – 22:00

• "Enough Looting My People": Peru's Marxist Presidential Frontrunner Pledges To Seize Offshore Company Profits
  “Enough Looting My People”: Peru’s Marxist Presidential Frontrunner Pledges To Seize Offshore Company Profits

  US corporations are facing an increasingly tough run over the next few years: on one hand all their domestic profits are about to be taxed at much higher rates thanks to Bidenomics, on the other, they are facing an increasingly hostile socialist regime internationally, that seeks to confiscate most if not all of their offshore profits.

  Case in point, Peru, whose presidential front-runner, Marxist Pedro Castillo who favorably quotes Lenin and Castro, said he’ll do what leftists everywhere do, and intends to redistribute wealth – because socialism – by reviewing contracts with transnational companies in a move to increase onshore wealth.

  In a debate with Keiko Fujimori ahead of the June 6 runoff, Castillo said multinationals should expect to leave 70% of their profits in Peru. Which is just a little bit more than what leftist president Joe Biden proposes they leave in the US.

  “Enough of looting my people,” the 51-year-old school teacher said in his hometown region, Cajamarca.

  As part of his populist package, Bloomberg reports that Castillo will also seek to raise investment in education to 10% of gross domestic product. He also proposed lowering the pension age to 60 and cutting lawmakers’ wages by half, although it was unclear where he would find the money to fund the early retirement – probably just more wealth confiscation (he said he would decline compensation as president).

  Meanwhile, as Peru braces for the joys of socialism, Peruvian assets have fallen as the presidential election approaches with the sol touching record lows this week.

  Despite a modest drop in Castillo’s lead – he has of 44% the vote versus 34% for Fujimori, daughter of jailed former President Alberto Fujimori according to a poll released Friday by Datum – he will almost certainly be the next president especially since Fujimori had been confined to campaigning in Lima because she is the subject of a criminal investigation. A full 11% of voters remain undecided, and 11% plan to cast blank or invalidated ballots, the survey found.

  As the WSJ notes, Castillo’s thinking is frighteningly similar to that of the late Hugo Chávez, who ruled Venezuela from 1999 until his death in 2013. Chavismo strangled Venezuela’s democratic institutions, sent human capital fleeing, destroyed the economy, and generated widespread poverty. Venezuela was once one of the most advanced countries in the region. Today Venezuelans live primitively, often without running water, electricity or basic medical supplies.

  And in a few weeks, the miracle of socialism will strike its next target.

   

  Tyler Durden
  Sun, 05/02/2021 – 21:35

• Bitcoin & A Lesson In Electricity Markets
  Bitcoin & A Lesson In Electricity Markets

  Authored by Joakim Book via The American Institute for Economic Research,

  In their desperation to find a reason for why bitcoin is terrible-bad-destructive-awful and morally reprehensible, the crypto-obsessed authors of the Financial Times blog Alphaville – Jemima Kelly, Jamie Powell, Izabella Kaminska – are quickly running out of good choices.

  

  Their latest one is the “environmental FUD” – a classic in our world of environmentally obsessed elites, where anything remotely associated with The Climate ensures moral supremacy. If all else fails, guilt-by-association will not. So, complain away about the environmental impact from the energy used by the Bitcoin network’s nodes and miners. 

  What’s so strange about this objection is that first, that impact is globally small, and second – who cares? Somebody, somewhere, is using energy in ways that you disapprove of (shocking, I know), to which the only reasonable response must be “Yes, and?” 

  Few free(ish) societies run around policing the use of energy, letting woke Establishment journalists decide on what’s permissible use, what’s harmful, and what needs to go. People drive cars, sometimes just because they want to, and sometimes just to compete to see who’s fastest; people go on vacation, mostly because they want to; people buy stuff, ride stuff, build stuff, enjoy stuff, almost all of which use energy and almost never require permission slips from their morally superior overlords. Not yet at least. 

  Throwing bitcoin into the mix somehow changes everything. Somebody, somewhere, is running their specialized hardware to validate the network, when they could have used those components (microprocesses, flash memories, fans, storage facilities) to, I don’t know, run a server hall to host all your incredible Instagram pictures. What is it about Bitcoin’s energy requirement that really triggers these people? If you think Bitcoin is a terrible payment mechanism, a subpar currency, a destabilizing base money, or a grand financial fad, those are arguments on their own merits – what’s energy got to do with it?

  On a first-pass observation it’s a perfect “gotcha” argument: if you think Bitcoin’s value-add is zero, or negative – Kelly happily calls it “a destructive asset class” – any amount of energy would be a waste, a climate nightmare, an environmental catastrophe. After all, we often hear that this monetary scam consumes electricity on par with small– or medium-sized countries. When the New York Times uses words like “enormous farms” and “endless racks of computers” we know it must be bad. 

  As usual when journalists talk about Big Terrible Things, we must dig a little deeper and probe a little more: ask those annoying questions – how much? Is that a lot? Compared to what? 

  Estimates for electricity use by the full Bitcoin network are all over the place, partly because nobody really knows how many miners there are and what exact equipment they’re using (and for environmental concerns, what electricity source powers their facilities). Low estimates hover around 40 TWh per year – a little less than Massachusetts used in 2019 – while high estimates report as much as 100 TWh per year – roughly the electricity generation of South Carolina or Louisiana. Let’s take the worst case and conveniently round number of 100 TWh. 

  That’s 2.5% of the 4,000 TWh of electricity that was used in America’s record year of 2018, or less than 0.4% of world electricity generation in 2019. Besides, if global electricity use fell by 1% last year because of the pandemic measures, the “savings” could power the entire Bitcoin network’s current use until 2024 (or 2028 at the lower estimate). If Bitcoin had not existed, it’s safe to say that our Alphaville electricity police would have found some other miniscule electricity user to complain about – maybe Christmas lighting (7 TWh), ski resorts (2-5 TWh), or online gaming (75 TWh). Perhaps the global banking system’s ATM networks (at something like 25 TWh)?

  Remember that we’re still only on electricity use; the sleight-of-hand involved in the Alphavillers’ magical trick is to equate use with “really bad for the environment.” By this same metric, the electricity generation used to power said writers’ computers qualifies – as does definitely the heating of their apartments (fossil fuels?) and the electricity that brightens their dark homes and runs their home appliances. While minuscule in proportion to thousands and thousands of miners upholding a decentralized monetary network, the Alphaville value add is clearly less than zero and so definitely a horrible waste of electricity. 

  If you live in a world of averages and aggregates – like Kelly, when she writes that since most mining is in China where “two-thirds of all electricity is generated by coal power” – Bitcoin mining must indeed be dirty. 

  Bitcoin mining is a cutthroat business, almost entirely determined by local electricity prices (though funding costs and legal risks matter). Thus, bitcoin miners are superbly positioned to seek out and find stranded energy, energy that cannot find its way to market, energy that has no opportunity cost: natural gas that otherwise would have been flared; hydro capacity that would have been flushed; wind turbines that otherwise would have turned off or detached from the grid.

  When ARK Invest and Square recently released a report on the renewable energy prospects for bitcoin miners, they offered mining facilities next to stranded energy as a supplement to overcome the intermittency problem. “Intermittency,” snarked Kelly, ridiculing the authors for not understanding that bitcoin consumes electricity without later bringing it back: it’s not the storage mechanism that solves renewable energy’s unsolvable problem.  

  A brief reminder of the three basic problems of renewables:

  1. they don’t produce much electricity when we need it: nights, evenings, and in the Northern Hemisphere, winter;

  2. they produce a lot of electricity when we don’t need it very much: days and summer;

  3. they produce this electricity geographically far from where we need it: rural plains, offshore, islands.  

  For each of these problems, what we end up doing in electrical grids with plenty of solar and wind is to:

  1. Have expensive backup power – mostly natural gas or coal plants – at the ready to start producing electricity when the wind or sun won’t suffice. This is the reason that electricity costs go up – not down – when more renewables are added to the grid.

  2. When sun and wind power are about to blow out their grids from overproduction, one of two things usually happen: small countries like Denmark can export its electricity to larger neighbors like Germany and Sweden (offloading the problem to someone else) or the renewables just shut off. Last year, wholesale electricity prices even dipped below zero to desperately induce industrial consumers to take the surplus electricity from the producers. 

  3. Our transmission lines are filled to capacity: in the short term, we go back to turning off intermittent sources, and in the long term we crisscross our countryside with more aluminum lines to accommodate trans-Continental sharing of excess electricity. 

  Institutional Bitcoin proponents like Cathy Wood of ARK Invest or Jack Dorsey, against whom the Alphavillers direct their current environmental FUD, did not imagine these problems. Producers of stranded energy, like the oversized hydro plants in the four Chinese provinces where most mining apparently takes place, cannot bring their goods to market – but they can offset some of their fixed costs by selling it to reliable bitcoin miners. Did Wood, Dorsey, and Brett Winton (research director at ARK) argue the case in a clumsy fashion, implying that bitcoin could help solar energy power the entire electricity grid? Yes. Are they therefore wrong to say that shedding excess electricity to willing miners helps financing renewable (or nonrenewable) electricity generation? Not at all.  

  On the contrary: Nic Carter, the master of environmental FUD-busting, writes

  “[c]ompletely off-grid natural gas is entirely nonrival with household or commercial energy consumption. It was never going to be monetized, captured, consumed, or delivered to households. Its fate was simply to be combusted or vented.”

  If some of that excess electricity – of the wrong kind, in the wrong place, at the wrong time – can be used to mine bitcoin and finance the electricity provider’s operations, isn’t that an efficiency improvement? The global crew of bitcoin miners vacuum the unused, stranded, and wasted energy of the world, providing extra dough for the marginal electricity generator whether renewable or not. Sounds good to me.  

  We should indeed be skeptical of financial fads, of everything in the Everything Bubble. And we should argue over bitcoin’s many monetary attributes – mostly because we therefore highlight how other monetary regimes work. But the environmental accusations of Bitcoin’s mining operations is like hitting your head against brick walls – not a very useful thing to do.

  Like the great JP Koning concluded this week, “It’s not the energy needs of these products that is the problem.”

  Tyler Durden
  Sun, 05/02/2021 – 21:10

• Biden Prepares For Stealth Food Stamp Increase Of Up To 20% Without Congressional Approval
  Biden Prepares For Stealth Food Stamp Increase Of Up To 20% Without Congressional Approval

  The Biden administration is planning to use an obscure US Department of Agriculture instrument to lay the groundwork for a long-term increase in food aid for tens of millions of Americans.

  

  The instrument, known as the ‘market basket,’ is a shopping list used to determine food stamp benefits, and which can be adjusted without risking an impasse in Congress from Republican lawmakers, according to Bloomberg.

  A review of the so-called Thrifty Food Plan, ordered by Biden two days after he took office, could trigger an automatic increase in benefits as soon as Oct. 1, a day after expiration of a temporary 15% boost in food stamp payments that Biden included in his $1.9 trillion Covid-relief package.

  James Ziliak, director of the Center for Poverty Research at the University of Kentucky, said the re-evaluation “could result in an upward adjustment of 20% or more in the benefits.” That would amount to roughly a $136-a-month increase in the maximum benefit for a family of four, which was $680 before the temporary pandemic-related increase. -Bloomberg

  “This is really meaningful,” according to Harvard professor Jason Furman, who was chairman of former President Obama’s Council of Economic Advisers. “It’s one of the bigger things government can do for poverty without Congress.“

  According to Furman, the Obama administration didn’t adjust the market basket because Republicans then controlled both houses of Congress.

  “We made a pragmatic decision that it not only could be overridden by a Republican Congress, but they could put something worse in its place. So we decided not to poke the bear,” he said.

  The decision follows a years-long campaign by anti-hunger advocates, after the basket hasn’t been adjusted for six decades aside from inflation. According to the report, “The move is emblematic of a broad commitment to anti-poverty programs across the Biden administration … In April, the Agriculture Department extended a universal free school lunch program tied to pandemic relief through the entire 2021-22 school year.”

  President Biden has been telegraphing the move for months – frequently reading his speechwriters’ descriptions of cars lined up for miles outside food banks for boxes of groceries. Most recently Biden invoked the imagery last week during his first address to Congress.

  “I didn’t ever think I’d see that in America,” he said.

  Advocates argue that the $22-a-day food budget USDA currently sets for a family of four is woefully inadequate and relies on outdated, unrealistic assumptions. The market basket assumes a family eats more than five pounds of beans a week, for example. And outside studies have found that the food plan requires spending about two hours a day preparing meals, largely from scratch, at a time the average American family spends just a half hour on daily food preparation.

  SNAP benefits are calculated on a sliding scale based on income and the number and age of people in a household. Recipients are expected to spend 30% of their net income on food, with food stamps making up the deficit from the USDA food budget. Benefits can only be used to purchase groceries. -Bloomberg

  According to a 2011 study, over 25% of SNAP recipients exhaust their monthly benefit within one week of issuance, while over half exhaust it by the second week.

  We can’t imagine why.

  While historical reviews of the market basket – the most recent being in 2006 – aimed to keep costs constant, this time the USDA won’t require it to be cost-neutral according to official Stacy Dean, who’s leading the review on behalf of Agriculture Secretary Tom VIlsack.

  “A core goal of the secretary is to assure nutrition security, not just food security,” said Dean. “We want to make sure the benefits we are providing really and truly can support a nutritious and healthy diet.”

  And according to March comments from Vilsack, “It’s fair to say that the SNAP benefit is in many cases not adequate enough to provide the help and assistance that is needed,” adding “I suspect that we’re going to find that the foundation of that program doesn’t meet the activities of normal American families today, and that may result in some adjustment in terms of the benefit.”

  Tyler Durden
  Sun, 05/02/2021 – 20:45

• How This Inflation Plays Out Will Be Different From Anything That Has Come Before It
  How This Inflation Plays Out Will Be Different From Anything That Has Come Before It

  By Eric Peters, CIO of One River Asset Management

  For nearly a century, gold had been pegged at roughly $20.67/oz. Then in 1934, FDR banned private holdings, confiscated people’s gold, and set the value at $35/oz for use in international trade/settlement. It remained anchored at that price for decades. But fiscal pressures of the Vietnam war and Johnson’s Great Society project stressed the pegged system. Johnson’s war on poverty, Medicare, Medicaid, urban renewal programs and so many others were costly. As they stressed America’s finances, the system’s circuit breakers were overwhelmed.

  On August 15, 1971, Nixon abandoned the gold standard, froze wages and prices for 90-days, and imposed a 10% import surcharge. Unemployment was a painful 6.1%, inflation was 4.6% and 10yr yields were 6.58%. All sorts of unique things were happening in the world economy. They always are. Which is why no time is the same. Back then, the Bretton Woods system that had served the post-war economy so well had come under intense pressure. Aided by the Marshall Plan, the rest of the world had been rebuilt, and was starting to catch up in earnest.

  Joe Biden was sworn in as a 30-year-old freshman Senator in Jan 1973. Seems like half a century ago, because it was. In the 1.5yrs between Nixon leaving the gold standard and Biden’s inauguration, the gold price jumped from $35/oz to $65/oz (in that same period, the S&P 500 rose 20%, while CPI fell from 4.6% to 3.7%). No doubt that jump in gold seemed like a big move to people. Having traded between $20/oz and $35/oz over the previous 150yrs, people were mentally tethered to historical prices. Humans struggle to process rapid change.

  As fate had it, the S&P 500 peaked the month of Biden’s 1973 inauguration with 10yr bond yields at 6.46%. The price of gold and the value of stocks, which had both risen in the 1.5yrs following Nixon’s exit from the gold standard, diverged radically as inflation started to rise in earnest. CPI had started rising before the oil embargo of October 1973. It was lifted in March 1974, with oil prices having jumped from $3/barrel to nearly $12/barrel. By the end of 1974, gold hit $181/oz, the S&P 500 fell 48%, 10yr bond yields rose to 7.48%. CPI had jumped to 12.3%.

  Inflation remained volatile for another decade after that. Oil prices too. Commodities in general. Gold hit $850/oz in January 1980. Bond holders got destroyed. Equity holders too. Generally speaking, agricultural commodities did reasonably well on an inflation-adjusted basis in the 1970s. But the really big winners were gold and oil, each for unique reasons, both of which were amplified by that monetary debasement. To this day, most people are mentally anchored to that experience, so that when they worry about inflation they buy gold.

  There are more differences between the 1970s and the 2020s than there are similarities. Demographics, technology, global trade, union membership, consumption patterns, environmental stresses, geopolitics, and domestic politics are all different. There are substantial similarities too. But one thing is identical – this planet remains inhabited by humans. And we never change. We despise iniquity. When Biden entered politics in 1973, the rich/poor divide in America had halved since the late 1920s high. It has since doubled. Returning to those highs.
   
  Anecdote:

  How this inflation plays out will be different from anything that has come before it. It is always so. Naturally, some aspects will resemble the past. This inflation will inevitably be volatile, such periods of price changes typically are. And in the early stages, nearly everyone will persuade themselves that it is transitory.

  In the late stages, those same people will conclude that it is permanent. Throughout the process, each of us, individually, will see what we want to see, hear what we want to hear, and believe what we want to believe. Those things are always true, perhaps now more than ever. We will also find the period ahead deeply unsettling. Change is hard to process. And more things are changing now than at any time in our lives – such is today’s utterly unprecedented pace of innovation and disruption.

  In such a state, it is natural to cling to our anchors:

  • Our policymakers will point to the inflation metrics that they themselves have engineered in such a way to ensure stability, even if they long ago diverged from reality.
  • Bond investors will look to the spreads between overnight rates and two-year bonds, five-year, ten, thirty. And despite the reality that the government has run 15% deficits for two years, funded by the Fed which simply creates the money, they will cling to the anchors that have governed the well-behaved yield curve for the course of their careers.
  • Equity investors will hold tight to the relationships that anchor their value relative to bonds.
  • Not a solitary investor in the mainstream will be prepared to deviate from the benchmarks to which they have anchored their careers.

  And yet, all of us will begin to increasingly wonder, whether digital assets, which have no real history, no anchors, are the first to provide a glimpse of what lays beyond the horizon. 

  Tyler Durden
  Sun, 05/02/2021 – 20:20

• 1 In 5 EV Owners In California Are Switching Back To Gas Because Charging Is A "Hassle"
  1 In 5 EV Owners In California Are Switching Back To Gas Because Charging Is A “Hassle”

  When people are inconvenienced for just the slightest bit of time, the virtue signaling flies right out the window as though it never existed. It’s almost as if the “green” energy cult exists in a world of their own cognitive dissonance, surviving off of recruiting new entrants to their “ideology”, rather than actually practicing its tenets. 

  For example, about 20% of all “planet saving EV owning visionaries” in California are defecting from their EVs back to gas-powered vehicles, according to a new report by Business Insider. The switch back to gas comes as a result of charging being a “hassle”, the report found. 

  The report cites a new study published in the journal Nature Energy by University of California Davis researchers Scott Hardman and Gil Tal. They surveyed people in California who purchased EVs between 2012 and 2018.

  1 in 5 switched back to avoid dealing with the lengthy time it took for their vehicles to charge. (Wait until they find out how the electricity was being generated to charge their cars in the first place!)”

  

  70% of those who switched lacked access to Level 2 charging at home, which can charge vehicles in about twice the time as a normal Level 1 plug. Level 1 charging from a standard home outlet puts out about 120 volts of power. Level 2 is twice that, whereas Tesla’s SuperChargers can offer 480 volts. 

  “If you don’t have a Level 2, it’s almost impossible,” said Bloomberg automotive analyst Kevin Tynan. It took him six hours to charge his Chevy Volt back to 300 miles of range using a Level 2 charger. 

  Two thirds of those surveyed also said they didn’t use public charging stations. Good thing Joe Biden is rolling out trillions in EV “infrastructure” for more of these. 

  Hardman and Tal wrote: “It should not be assumed that once a consumer purchases a PEV they will continue owning one. What is clear is that this could slow PEV market growth and make reaching 100% PEV sales more difficult.”

  Tynan concluded: “For all those legacy automakers, that profit and loss piece does matter. And that’s why you’re getting this half effort on electrification.” 

  Tyler Durden
  Sun, 05/02/2021 – 19:55

• 'Follow The Science' Fallacy Exposed – Teachers Union Exerted Influence Over CDC School Reopening Guidelines
  ‘Follow The Science’ Fallacy Exposed – Teachers Union Exerted Influence Over CDC School Reopening Guidelines

  Authored by Rick Moran via PJMedia.com,

  In the Biden administration, “follow the science” takes second place to “follow the campaign donations from teachers unions”…

  

  The Centers for Disease Control (CDC) was heavily lobbied by the nation’s second-largest teachers union on when to reopen America’s schools, emails obtained by the New York Post show. There was extensive communication between the American Federation of Teachers, the CDC, and the White House in the lead up to the release of school reopening guidelines in February.

  The documents were obtained through a Freedom of Information Act request by the group Americans for Public Trust and provided to The Post.

  Anyone in the United States, any group, has a perfect right to lobby any federal agency they wish. But don’t you think it would have been nice to know that the CDC was being influenced by teachers in coming to the conclusion that schools should remain closed to in-person learning?

  The documents show a flurry of activity between CDC Director Dr. Rochelle Walensky, her top advisors and union officials — with Biden brass being looped in at the White House — in the days before the highly-anticipated Feb. 12 announcement on school-reopening guidelines.

  “Thank you again for Friday’s rich discussion about forthcoming CDC guidance and for your openness to the suggestions made by our president, Randi Weingarten, and the AFT,” wrote AFT senior director for health issues Kelly Trautner in a Feb 1 email — which described the union as the CDC’s “thought partner.”

  You can’t really say the teachers union was driving the discussion on when to open schools. Or can you?

  “We were able to review a copy of the draft guidance document over the weekend and were able to provide some initial feedback to several staff this morning about possible ways to strengthen the document,” Trautner continued. “… We believe our experiences on the ground can inform and enrich thinking around what is practicable and prudent in future guidance documents.”

  Emails show a call between Walensky and Weingarten — the former boss of New York City’s United Federation of Teachers — was arranged for Feb 7.

  The lobbying paid off.

  In at least two instances, language “suggestions” offered by the union were adopted nearly verbatim into the final text of the CDC document.

  And in case anyone is confused about whose interests the teachers union was looking out for, they made it plain when pushing for “special remote work concessions” from the CDC.

  The AFT also demanded special remote work concessions for teachers “who have documented high-risk conditions or who are at increased risk for … COVID-19,” and that similar arrangements should extend to “staff who have a household member” with similar risks. A lengthy provision for that made it into the text of the final guidance.

  There was apparently some pushback from people who wondered why CDC was ignoring the science and giving in to teachers’ demands when there was plenty of evidence that schools were not a primary source of infections as long as they followed common-sense rules.

  I know folks have a lot of questions about COVID-19 mutations, our vaccination progress, and much more. @CDCDirector Dr. Walensky sat down to provide answers. pic.twitter.com/K0Rlkc4Ti2

  — President Biden (@POTUS) February 22, 2021

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

  The answer is plain and simple: politics.

  Dr. Monica Gandhi, a professor of medicine at the University of California, San Francisco who has written extensively on coronavirus, called the CDC-AFT emails “very, very troubling,”

  “What seems strange to me here is there would be this very intimate back and forth including phone calls where this political group gets to help formulate scientific guidance for our major public health organization in the United State,” Gandhi told The Post. “This is not how science-based guidelines should work or be put together.”

  This should be a major scandal. Outside of The Post and Fox News, however, no other major news outlet has bothered to report that government policy that should have been based on science, was in fact, based on recommendations from a bunch of political hacks.

  *  *  *
  ZH: Randi Weingarten has already tweeted her response to these ‘facts’ being exposed by FOIA-obtained emails… by gaslighting as aggressively as we’ve ever seen…

  We wanted kids in school.. I have been arguing for that since April 2020..

  — Randi Weingarten (@rweingarten) May 2, 2021

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

  Social media were not about to let her get away with that bullshit…

  What a disgraceful, horrific lie…befitting the historical embarrassment of your conduct and your union’s conduct over the past year.

  — IM (@ianmSC) May 2, 2021

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

  It’s inappropriate to copy and paste verbatim ‘guidance’ from a political organization; rather than CDC using science and their own methods to form guidance. It’s clear the AFT was leveraging their power to keep kids out of school, regardless of science.

  — Kyle DeMarino (@KyleDeMarino) May 2, 2021

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

  Let’s be honest, no one believes that you or UFT have been trying to open schools since April 2020. No one.

  — Pam Schmidt (@Schmidt18Pam) May 2, 2021

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

  There was always a huge “,BUT” after that support followed by a laundry list of stupid, unscientific demands from you and other union leadership.

  You’re trying to rewrite history so that you’re not the villian.
  Good job @nypost

  — Contrarian Teach (@ContrarianTeach) May 2, 2021

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

  Liar liar pants on fire Randi

  — ErieCountyMom Tired of Hybrid School (@DanaMarie262) May 2, 2021

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

  Tyler Durden
  Sun, 05/02/2021 – 19:30

• Boeing Fires 65 Employees, Disciplines 53 More For 'Racist And Hateful Conduct' Following George Floyd Death
  Boeing Fires 65 Employees, Disciplines 53 More For ‘Racist And Hateful Conduct’ Following George Floyd Death

  In the last 12 months, Boeing has fired 65 employees and disciplined 53 others over ‘racist, discriminatory and hateful behavior,’ according to the Daily Mail, citing a Friday ‘Equity, Diversity & Inclusion’ report from the Chicag-based company’s CEO, David Calhoun.

  

  “As we have witnessed horrific images in the news and heard heartbreaking stories from our people, our determination to advance equity, diversity and inclusion has only become stronger,” reads the statement – which follows the company’s June 2020 ‘zero-tolerance’ policy implemented in June 2020 following the murder of George Floyd at the hands of a white police officer in Minneapolis.

  “There is no place for hate within our company, and we will keep expecting the best from everyone in their interactions with one another,” Calhoun continued.

  Meanwhile, the company outlined its diversity plans in its August 2020 “Racial Equity Action Plan.”

  Notably, of the company’s 140,000 employees, 66.8% are white, 6.4% are black, 14.2% are Asian, 7% are hispanic, and 3.6% are listed as ‘more.’

  According to Calhoun, the company will increase black representation to 20% by 2025, just 3.5 years from now. This means Boeing will hire over 19,000 black workers in either a massive expansion of headcount, or at the expense of workers of other races.

  

  “This work is a business imperative for us, because diversity and inclusion make us better in every way; when everyone has a voice, everyone is inspired to succeed together,” reads the report. “As we resolve to do better, the gaps we see in our representation show us where we must focus our efforts to address disparities.“

  Meanwhile, Boeing is currently being sued by a black employee claiming a hostile environment at a South Carolina plant because a supervisor assigned black employees to work in ‘undesirable’ and hazardous areas of a plant, while white employees were sent to more ‘desirable’ locations, according to Forbes.

  Tyler Durden
  Sun, 05/02/2021 – 19:05

• Tesla, Revisiting The Issue Of What It's Worth
  Tesla, Revisiting The Issue Of What It’s Worth

  Authored by Bruce Wilds via Advancing Time blog,

  Now that Tesla’s most recent numbers are out it may be time to revisit what the company is worth. While the numbers came in solid and better than some analysts expected they did not blow the doors off the hinges and leave investors in awe. Lurking in the shadows are concerns at just how honest Tesla’s numbers really are. History has shown time and time again that markets can hide from reality for only so long. Tesla’s stock price continues to hang on but continuing signs of the company’s challenging path forward continue to leak out. 

  

  With over 100 different electric cars expected to hit the market by 2025, it is difficult for a realist to envision Tesla being able to remain in the position it is today. The rapid approach of real competition into the rather small Electric Vehicle market is occurring at a time when auto sales may be on the wane. This could translate into tight profit margins and a situation similar to what we witnessed in 2008 when the automobile industry fell off a cliff resulting in a government bailout of GM and Chrysler.  

  Needless to say, a great number of factors influence how a stock is valued. A huge part of the sugar high allowing Tesla’s valuation continues to be that climate change exists and the idea electric vehicles are a big part of the answer to halting it. It could be said that Elon Musk is the “Pied Piper” of  EVs leading society down a path that may eventually disappoint even his most loyal followers. Musk appears to have a great deal riding on government  favors paving Tesla’s way forward with generous subsidies. Whether EVs live up to their reputation of being environmentally friendly is a matter still being debated and many people have come to the conclusion that EVs do not live up to their promise. 

  Several other issues haunt Tesla, one has to do with China. A few days ago the video of a protestor at the Shanghai Auto Show “went viral” after he stood on top of a Tesla vehicle and decrying the car’s brakes. Shortly after the incident, a CCTV broadcaster has called for an investigation into Tesla’s brake failures, some people are taking this as a sign China’s love affair with Elon musk is coming to an end.

  

  Tesla Has Made China A Key Part Of Its Future

  This could have huge ramifications for the future of  both Musk and Tesla because of the huge investment the company has made in China. The notion that Chinese state media has turned negative and is looking for answers underscores the idea China may have initially embraced Tesla in order to steal its technology. 

  Also, issues concerning the overall quality of Tesla’s cars, or lack of it, have garnered a great deal of attention. While this has been brushed aside by the majority of Tesla lovers, Tesla’s US made vehicles are scoring in the cellar when it comes to quality. As Electrec reported earlier this year, Tesla ranked lowest on J.D. Power 2020 quality study, with 250 problems per 100 cars. The quality survey was based on roughly 1,250 Tesla owners with most of the respondents being the proud owners of a Model 3.

  Needless to say, much of the “aura” surrounding Tesla continues to flow from Musk himself. It appears many people view this man as almost god-like, a genius with superman qualities. Somehow they are able to overlook the fact the words coming out of his mouth often conflict with reality. Musk skeptics such as myself, are appalled at how so much of his empire has been grown from a foundation of government subsidies.  

  Government support is a major theme of all Elon Musk’s companies, and without it, none of them would exist. Woven into this is the issue of “corporate incest” and Tesla’s acquisition of ailing SolarCity in an all-stock $2.6 billion merger. At the time Musk owned 22% of SolarCity which was founded by his cousins. The merger was promoted on the idea that Tesla’s mission since its inception was part of Elon Musk’s overall “Secret Tesla Motors Master Plan” to expedite the world’s transition to sustainable energy and away from a fossil fuel economy.

  Tesla’s valuation remains a bit over the moon considering on Friday it closed with the stock at a whopping P/E ratio of 710 times earnings and a market cap of over 649.8 billion dollars. Those of us without a great love for Tesla or Elon Musk see this as the poster child of absurdity. By comparison, Volkswagen, which sold over 10 million vehicles last year has a market cap of $79 billion and auto giant Toyota around $246 billion.

  While valued as the most valuable car company in the world, recent earning for Tesla indicates its profits were based on $518 mm of regulatory credit sales and a $101 positive gain from its Bitcoin position and sales. Strip these out and it seems that Tesla lost $181mm selling cars. Still, it is difficult to deny another major factor keeping Tesla aloft is the promise of a shit load of government money flowing from Biden’s new $2 trillion infrastructure package. Many Tesla enthusiasts are counting on this transfer of wealth to move the company forward. 

  While Tesla sported a valuable advantage by being the first big player in the electric vehicle (EV) category it is not protected by a great number of patents. The big advantage Tesla has enjoyed with other manufacturers being slow to release EV cars is not expected to last. Much of Tesla’s technology is easy to replicate and most auto manufacturers have lines of EVs finally rolling off their production lines this year and next. Many of these cars will come at far cheaper prices and Tesla’s competitors will also be offering their customers service shops and trade-ins.

  

  Ford’s New F-150 Will Challenge Tesla

  This means Tesla’s first mover advantage may vanish overnight. A great deal will depend on how Tesla’s new pickup truck fairs against such rivals as Ford’s new electric F-150. Any sign of failure on the part of Tesla could result in a major fall from grace and bring into question Tesla’s staying power in the industry.

  Ironically up until now, Musk’s greatest strength may have been that so many investors doubt his ability to perform. This means that a slew of impatient clowns have shorted Tesla stock in search of quick profits. These bearish investors have continually shot themselves in the foot by constantly finding reasons to rush to the exits in short-covering panics. This not only invariably brings the share price back up but has created a self-feeding loop accounting for much of the companies success and oversized profile in the automobile sector.   

  When all is said and done, the 64,000 dollar question remains, what is Tesla worth? Still more important is, what will it be worth in the future. Sadly, this article is not about to predict a number considering Elon Musk has proved he has more lives than a cat. Time and time again reports of his demise have proven to be premature. It seems every week creates a slew of new articles about Tesla and what is occurring in the highly speculated electric vehicle sector. Like many people that are predisposed to discount hype from the media, you should color me skeptical about how well Tesla will deal with the coming onslaught of competition. 

  Tyler Durden
  Sun, 05/02/2021 – 18:40

• You Know It's Bad When… CNN Calls Out Biden Over Anti-Science Mask Use
  You Know It’s Bad When… CNN Calls Out Biden Over Anti-Science Mask Use

  President Biden is coming under fire from both sides of the aisle for constantly wearing a mask despite announcing that vaccinated people no longer require face coverings when outdoors. In other words, it’s simply virtue signaling at this point.

  

  As The Hill (!?) notes, days later after announcing the loosened guidelines from the CDC, “Biden was spotted with a mask while walking outside to Marine One with first lady Jill Biden, even though both have been vaccinated and no others were around.”

  The president again donned a mask at a Georgia drive-in rally while his wife spoke a few feet away, despite nobody else being on stage.

  Biden has strived to set an example for Americans by wearing a mask in public frequently during his first months in office, pleading with the public that it was a key tool to end the pandemic. But health experts say the country is reaching a tipping point where Biden now must alter his behavior to reflect how vaccines can lead to a return to normal. –The Hill

  “I actually think it would do so much good for the president to be modeling at this point the really critical times when people should be wearing a mask, and letting people know here is the benefit of the vaccine: You don’t need to be wearing a mask during these other times,” said ER physician and former Baltimore health commissioner, Leana Wen.

  Biden, however, can’t seem to quit masks.

  Biden made a point to walk away from the podium without a mask after outlining the new guidance, and White House press secretary Jen Psaki said the president and senior staff would abide by the CDC recommendations that no longer required masks outdoors for vaccinated individuals.

  But the president has been slow to put the updated recommendations into practice, as reflected by his trip to Georgia.

  Biden also wore a mask into and out of the House chamber for his speech to a joint session of Congress, despite most of those in attendance being distanced and vaccinated. -The Hill

  Now, even CNN‘s Jake Tapper is calling out the president for sending mixed signals over mask use while vaccinated.

  “Should the president start following these guidelines and stop wearing a mask outdoors, stop wearing a mask indoors when with small groups of other vaccinated Americans, to show the American people there is a benefit to getting the vaccine?” Tapper asked guest Anita Dunn – to which Dunn replied that Biden “has always taken his role as sending a signal to follow the science very seriously,” but that people should instead follow CDC guidelines.

  >> @JakeTapper to Anita Dunn: “Should the president start following these guidelines and stop wearing a mask outdoors, stop wearing a mask indoors when with small groups of other vaccinated Americans, to show the American people there is a benefit to getting the vaccine?” pic.twitter.com/3YiAs3nJlq

  — Brian Stelter (@brianstelter) May 2, 2021

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  Tyler Durden
  Sun, 05/02/2021 – 18:15

• "This Time Is Indeed Different" – Why Morgan Stanley Sees No Housing Bubble
  “This Time Is Indeed Different” – Why Morgan Stanley Sees No Housing Bubble

  By Vishwanath Tirupattur, Managing Director in Credit Securitized Products Research and Strategy at Morgan Stanley

  US housing is on a hot streak. Home prices as measured by the S&P Case-Shiller Index rose 12.2%Y, with prices surging across all 20 of the metropolitan areas tracked by the Index. That amounts to an increase of $35,000 in the median selling price for homes from just a year ago and marks the fastest pace of increase since 2006.

  Unsurprisingly, any comparison to the 2006 boom in home prices brings unhappy memories, considering the bust that followed, which culminated in the global financial crisis (GFC) in 2008. However, we argue that this time is indeed different. Unlike 15 years ago, the euphoria in today’s home prices comes down to the logic of demand and supply, and we conclude that the sector is on a sustainably sturdy foundation. We are not at all suggesting that home price appreciation will maintain its current torrid pace. Home prices will continue to rise, but more gradually. We have strong conviction that we are not experiencing a bubble in US housing.

  Much has been written about the run-up to the pre-GFC housing bubble. We would boil it down to layers upon layers of leverage in the housing sector that led to a spectacularly painful bust. But contrary to the narrative that loose lending to people with lower credit scores – the ‘sub-prime’ borrowers – was central to the excesses, we think it was more about the type of credit they had access to. Mortgage credit risk consists of (1) borrower risk and (2) mortgage product risk. Borrower risk captures the metrics we typically use to assess the likelihood of default on a mortgage, such as credit score, loan-to-value, and debt-to-income. Product risk lies in giving a borrower a type of mortgage that has a higher risk of default, even controlling for those borrower characteristics. These so-called ‘affordability products’ included mortgages where the payment could vary significantly throughout the life of the loan. As James Egan, our US housing strategist has explained, product risk increased significantly more than borrower risk during the pre-GFC housing boom. The affordability products were inherently risky because they effectively required home prices to keep rising and lending standards to remain accommodative so that homeowners could refinance before their monthly payment became unaffordable. When home prices stopped climbing, these mortgages reset to payments that borrowers could not make, leading to delinquency and foreclosure. As foreclosures and the subsequent distressed sales piled up, home prices fell further, creating a vicious cycle.

  Affordability products made up almost 40% of all first lien mortgages from 2004 to 2006. Today their share is down to 2%. Furthermore, the Mortgage Bankers Association’s index of credit standards, which peaked at nearly 900 in 2006, has stayed well below 200 for almost a decade and fell further to the low 100s post-COVID-19. Not only are lending standards much tighter this time around, but the leverage in the system has also been reduced dramatically. Prior to the GFC, the total value of the US housing market peaked at $25.6 trillion in 2006, with total mortgage debt outstanding of $10.5 trillion for an estimated loan-to-value (LTV) of 41.2% for the entire housing market. Today, the value of the housing market has jumped to $33.3 trillion, while total mortgage debt has only increased to $11.5 trillion with an estimated aggregate LTV of just 34.5%. These changes give us confidence that the current system of housing finance is healthy and on a sustainable footing.

  Demand and supply factors remain a tailwind for home prices. Thanks to the demographic dividend, millennials continue to drive household formation at a rate 30-50% above the long-run rate of new household formation. Thus, demand for shelter is likely to remain robust for some time to come. As James points out in his latest Housing Tracker, affordability remains good despite sustained increases in home prices and mortgage rates inching higher. Monthly mortgage payments as a percentage of income remain near the most affordable levels in the last five years. Against this backdrop, there is a nationwide shortage of supply. The number of existing homes available for sale has plummeted to historical lows while the supply of new homes remains muted, hence the overall supply of homes sits near record lows.

  

  Robust demand and highly challenged supply along with tight mortgage lending standards augur well for home prices. Higher interest rates and post-pandemic moves will likely slow the pace of appreciation, but their upward trajectory remains on course.

  Tyler Durden
  Sun, 05/02/2021 – 17:50

• "The Costs Are Up, Up, Up. We're Seeing Substantial Inflation" Admits A Surprised Warren Buffett As Powell, Yellen See Nothing
  “The Costs Are Up, Up, Up. We’re Seeing Substantial Inflation” Admits A Surprised Warren Buffett As Powell, Yellen See Nothing

  We already touched on two of the more colorful exchanges from Saturday’s Berkshire annual videoconference, both of which incidentally starred the traditionally far more outspoken Charlie Munger, who first crushed a generation’s monetary dreams saying that today’s Millennials will have “a hell of a time getting rich compared to our generation”, and then infuriated tens of millions of cryptofans and diamond hands (such as Dan Loeb) when he said that “the whole damn development” of crytpocurrencies “is disgusting and contrary to the interests of civilization.”

  Yet while those two incidents may prompt the most Monday morning watercooler talk, what was most relevant from a macro and markets standpoint was Buffett’s observation of something the Fed and Treasury are terrified to admit: that a tidal wave of inflation has been unleashed upon the US and it’s only getting worse.

  Speaking to Berkshire’s millions of shareholders on Saturday, Buffett said that he was surprised by the “red hot” US economic rebound and warned the company was being hit by inflationary pressures.

  “We’re seeing very substantial inflation,” the 90-year-old billionaire who apparently does not have a Fed charge card, said in his nearly 6 hour long address to investors. But it’s what he said that was especially ominous:  “It’s very interesting. We’re raising prices. People are raising prices to us and it’s being accepted.”

  Why does this matter? Because the ability to pass on price increases and have them stick, means the surge in prices will not be transitory, no matter how many times the Biden admin, the Fed or the Treasury lie and vow the opposite.

  Buffett’s comments came one day after the US revealed that household incomes rose by the most in recorded history in March as the latest round of Biden stimmies hit bank accounts.

  

  This has also pushed the total amount of government transfer payments to a record 34%. That’s right: a third of all US household income is now from the state. Marx would be proud.

  

  The surge in income which for now has resulted in record excess savings of roughly $2 trillion, has sent reverberations throughout financial markets, with investors’ inflation expectations over the next decade rising to an eight-year high.

  “It just won’t stop,” Buffett added. “People have money in their pocket and they’ll pay the higher prices…. There’s more inflation going on that people would have anticipated six months ago or thereabouts” he added.

  We urge readers to go over the full exchange because the world Buffett lives in and the one populated by the clueless career economists of the Fed are apparently totally different:

  BECKY QUICK: I will ask this question from Chris Freed from Philadelphia. And whoever wants to take this on stage, “From raw material purchases by Berkshire subsidiaries, are you seeing signs of inflation beginning to increase?”

  WARREN BUFFETT: Let me answer that, then Greg can get more into that. We’re seeing very substantial inflation – it’s very interesting. I mean, we’re raising prices. People are raising prices to us. And it’s being accepted. Take home-building. I mean, you know, the cost of– we’ve got nine home builders in addition to our manufactured housing operation, which is the largest in the country.

  So we really do a lot of housing. The costs are just up, up, up. Steel costs, you know, just every day, they’re going up. And there hasn’t yet been because the wage– the wage stuff follows. I mean, the– the UAW writes a three-year contract, we got a three-year contract.

  But if you’re buying steel at General Motors or someplace, you’re paying more every day. So it’s an economy, really– it’s red hot. I mean, and we weren’t expecting it. I mean, all our companies, when they thought when they were allowed to go back to work at, well, various operations, we closed the furniture stores, I mentioned.

  You know, they were closed for six weeks or so on average. And they didn’t know what was going to happen when they opened. And they can’t stop people from buying things. And we can’t deliver them. They say, well, that’s OK because nobody else can deliver them either, and we’ll wait for three months or something of the sort.

  The backlog grows, and then we thought it would end when the $600– the payments ended, and I think around August of last year, it just kept going. And it keeps going and it keeps going and it keeps going. And I get the figures. Every week, we go over, day by day, what happened at the three different stores in Chicago and Kansas City and Dallas.

  And it just won’t stop. People have money in their pocket, and they pay the higher prices. And when corporate prices go up in a month or two– and that was the price increase for April 1– our costs are going up, supply chain’s all screwed up for all kinds of people. But it’s a buy– it’s almost a buying frenzy, except certain areas, you can’t buy at.

  You know, you really can’t buy international air travel. And so the money is being diverted from a little– some piece of the economy into the rest. And everybody’s got more cash in their pocket than– except for, meanwhile, it’s a terrible situation for a percentage of the people.

  I haven’t worn a suit for a year, practically. And that means that the dry cleaners just went out of business. I mean, nobody’s bringing in suits to get dry cleaned, and nobody’s bringing in white shirts the place where my wife goes.

  The small business person, if you didn’t have takeout and delivery services for restaurants, you got killed. On the other hand, if you’ve got takeout facilities, then, same-store sales at Dairy Queen are up a whole lot, and they adapted. But it is not a price-sensitive economy right now in the least. And I don’t know exactly how– what shows up in different price indices. But there’s more inflation going on than– quite a bit more inflation going on than people would have anticipated just six months ago or thereabouts.

  CHARLIE MUNGER: Yeah, and there’s one very intelligent man who thinks it’s dangerous. And that’s just the start.

  WARREN BUFFETT: Greg, you probably are in a good position to comment.

  GREG ABEL: Yeah, well, Warren, I think you touched on it. When we look at steel prices, timber prices, any petroleum input, you know, fundamentally there’s pressure on those raw materials. I do think something you’ve touched someone, Warren, and it goes really back to the raw materials.

  There’s a scarcity of product right now, of certain raw materials. It’s impacting price and the ability to deliver the end product but, you know, that scarcity factor is also real out there right now, as our businesses address that challenge. And it may be the sum of that’s contribute– or arisen from the storm we previously discussed in Texas. When you take down that many petrochemical plants in one state that the rest of the country is very dependent upon it, we’re seeing it flow through both on price, but overall in scarcity of product, which obviously go together. But there’s challenges, that’s for sure.

  Buffett’s admission was also remarkable because it was in opposition to all the official manure spoon fed to the gullible peasants by the President and his economic henchmen (or is that sexist: perhaps henchpeople is more apt?). Case in point, today former Fed chair and current Treasury Secretary Janet Yellen said that Biden’s multi-trillion economic plan is unlikely to create inflation pressure in the U.S. because the boost to demand will be spread over a decade.

  “I don’t believe that inflation will be an issue. But if it becomes an issue, we have tools to address it,” Yellen said Sunday on NBC’s leftist Meet the Press show. “It’s spread out quite evenly over eight to 10 years. So, the boost to demand is moderate,” she said of the proposed spending.

  Yellen also said the U.S. has the “fiscal space” to make investments in its economy, with interest rates low and likely to remain so, but over the long haul, budget deficits need to be “contained.”

  In other words, all those soaring prices, including the Costco shrinkflation seeking to mask a 14% price increase with small offerings… well, just ignore that for a few more years until the “transitory” period ends. Assuming it ends, of course. It didn’t quite end in the 1970s when inflation was also supposed to be transitory.

  Yellen said on that while the administration needs “fiscal space to be able to address” emergencies like the pandemic, it needs to do so with a long-term plan in mind. “We don’t want to use up all of that fiscal space, and over the long run deficits need to be contained to keep our federal finances on a sustainable basis,” she said.

  Asked about the proposed tax increases that would come with Biden’s spending plan, Yellen focused on the U.S. proposal for a global minimum corporate tax, and efforts to clamp down on tax loopholes in the U.S. “An important way of paying for this is increasing tax compliance,” she said. “It’s estimated that underpayment of taxes that are really due is costing us, the federal government, about $7 trillion over a decade.”

  While Yellen touched on rising taxes, there were several other items she refused to touch upon:

  How about the increased
  – deficits
  – national debt
  – resulting #QuantitativeEasing
  – resulting reliance on China to buy our debt
  – increased taxes resulting in 1.1MM lost jobs
  – stagnant econ growth

  Do any of those worry #Yellen https://t.co/slL66279lm

  — Peter J. Dawson (@PeterDawsonUSA) May 2, 2021

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  It wasn’t just Yellen lying to the people: another top Biden administration economic adviser said inflation now apparent in certain pockets of the economy is “transitory” as the nation exits the pandemic. Cecilia Rouse, chair of the White House Council of Economic Advisers, said supply chain issues and labor market shortages are “bumps along the way” to recovery.

  There’s no sense for now that these price increases are becoming “de-anchored,” she said on “Fox News Sunday,” while promising to remain vigilant on inflation pressures.

  “For the time being we expect at most transitory inflation, that is what we expect coming out of a big recession,” she said. It wasn’t clear what would happen when her expectation was proven to be wrong.

  Yellen and Rouse spoke following last week’s unveiling of the latest economic plan from the Biden administration, which is proposing a combination of $1.8 trillion in spending and tax credits for areas such as education, child care and paid family and medical leave. This comes on top of almost $2.25 trillion in infrastructure, home health care and other outlays that the administration proposed at the end of March, not to mention the $5 trillion that the government has injected into the economy through the three pandemic relief packages passed by Congress during the past 14 months.

  In short, we are looking at $10 trillion in new government handouts in the coming years, give or take a few trillions.

  None of this matters to the “big man” himself – and no, not the nearly 80-year-old Biden, of course, who is merely a puppet for whoever writes the lines into his teleprompter – but Fed Chair Jerome Powell, who shrugged off such concerns last week, telling reporters that the reopening of the economy may lead to a single episode of price increases, but not a long-running bout of inflation.

  Which, of course, is a lie and for what is really coming please re-read “We Are At The Early Stage Of The Biggest Cobra Effect In The History Of Economics.“

  * * *

  Finally, for those who missed it, here are the main highlights from Berkshire’s nearly 6 hour Saturday tour de force annual meeting, (courtesy of Bloomberg):

  • SPACs, Robinhood and day trading. We got plenty of opinions from Buffett and Munger on these trends that have gripped the markets over the past year. Buffett called the SPAC boom a “killer” when it comes to creating more competition for Berkshire’s dealmaking desires. But he acknowledged that the stock market has become more of a casino with all the day trading and it creates its own reality for a while until it all blows up. On Robinhood, Buffett acknowledged that gambling isn’t bad but taking advantage of that instinct isn’t the most admirable part of society.
  • Buffett made some big moves last year, dumping airline stocks and paring back bank bets. He acknowledged today that airlines could have had a different outcome on federal relief if they had a super rich company as a top shareholder, but even then, he wouldn’t buy airlines given the slump in international travel.
  • Buffett admitted to a few missteps over the past year. Haven, the health care venture, failed eventually and Buffett said that they couldn’t really tackle the “tape worm” of health care. He added that last year, amid the airline sales, wasn’t Berkshire’s greatest moment. Plus, it was a mistake to sell some Apple stock last year, he added.
  • We only got a potential new clue about succession. At one point, Charlie Munger mentioned that Greg Abel would maintain the culture at Berkshire. Abel has been seen as the most likely successor — he’s younger and controls a lot of Berkshire businesses. But no successor has been publicly announced, so that little comment might be picked up by a few investors eager to know who will take over.
  • Two shareholder proposals — one on climate change and one on diversity — got a lot of attention ahead of the meeting with proxy advisers Glass Lewis and ISS pushing back against some of Berkshire’s views. But both of those ended up being voted down at the end of the meeting.

  And here is a detailed breakdown courtesy of @TheRationalWalk

  Starting a thread for the Berkshire Hathaway 2021 annual meeting which has just started. $BRKA $BRKB

  Abel and Jain are present on stage, although off to the side from Buffett and Munger.

  Buffett is spending a few minutes talking about Jain and Abel to introduce them to the shareholders.

  Very good to have all of them available for Q&A on the same stage.

  Buffett is pointing out how the accounting rule change a few years ago distorted quarterly (and annual) earnings by including unrealized gains and losses from investments in net income.

  This makes periodic earnings swing dramatically and misleads many investors.

  Buffett has a slide of the top 20 companies in the world by market cap, 5 of the top 6 U.S. based which led into a pep talk on the United States, which he does so well.

  “The system has worked unbelievably well.”

  Now Buffett puts up a slide of the top 20 companies in the world from 1989. None of the 20 from 30 years ago are on the present list. Zero. And 13 of the 20 were from Japan!

  The top company in 1989 had a market cap of $104 billion – Industrial Bank of Japan.

  Buffett is directing this very good history lesson at new investors, but most will just see an old man talking about Henry Ford and disregard his statements. Too bad for them.

  Buffett has a list of auto companies from the early 20th century that eventually went bust. Dozens of auto companies just starting with the letters “Ma”. Thousands of entrants. Incredible future. Most failed.

  “It’s not as easy at it sounds.”

  Referring to entering new and exciting markets that will change the world.

  First question asks why Buffett was defensive early in the pandemic. A lot of hindsight bias in that question. Of course it wasn’t the right call … given the history that played out.

  Buffett talks about his role controlling risk at Berkshire.

  Buffett implies that if Berkshire was still in the airlines, they might not have received the aid that they did. That’s very interesting. He’s implying that Berkshire’s exit from the airlines in some way facilitated the fact that government bailed them out.

  Next question is why Berkshire didn’t deploy more cash at the lows in March 2020. More hindsight bias in that question …

  Interestingly, Buffett notes that the $20 billion minimum cash balance is going to be increased given Berkshire’s current size.

  The day before the Fed acted, Buffett thinks that even Berkshire could not have issued debt. Markets were closed. He’s praising Powell for acting, praising Congress for acting. “It did the job.”

  Buffett did not think that it was a “sure thing” that government would act as they did. He was unwilling to COUNT on government acting as they did in March 2020. He won’t rely on the kindness of anyone. And that’s how I like it, and I suspect most shareholders agree.

  Munger says that the questioner is “out of their mind” to think that Berkshire could bottom tick the market in March 2020.

  Q: Should long term Berkshire shareholders diversify into an index fund?

  A: Munger prefers holding Berkshire to holding an index fund. Buffett recommends the S&P 500 index fund, has never recommended Berkshire to anyone.

  Buffett “likes Berkshire” but suggests that people who don’t know anything about stocks or no “special feelings” about Berkshire should buy the S&P 500 index.

  Buffett is going out of his way to not talk up Berkshire, which is fine, but I question the idea of suggesting the S&P 500 index at current valuations. I don’t think that does anyone any favors.

  In the context of dollar cost averaging into index over a long lifetime, S&P 500 is OK, but the question was from a longtime shareholder asking if he should diversify into an index. It would seem nuts to sell BRK to buy the S&P 500, in my opinion. Munger seems to agree.

  BREAKING: Munger would prefer to have a son-in-law who works at Chevron rather than as an English professor at Swarthmore.

  Buffett doesn’t use the word “asinine” often, but tears into the ESG proposals which I assume will be discussed more fully during the formal shareholder meeting when the matter comes up for a vote.

  “We don’t do things just because we have a department of this or a department of that … what’s important is what we are doing at BHE and the railroad…”

  Buffett is really fired up talking about renewables and how you can’t turn off the coal plant until you have transmission from wind power to where it is actually used.

  I can tell he’s pissed about Berkshire getting a bum rap on the environment.

  Buffett turns over the question to Abel who has slides prepared regarding Berkshire’s environmental record at the energy group. Goes back to a 2007 conference where he discussed climate change, policy, innovation, etc… These guys are prepared for the ESG proposals…

  Buffett asks “How many other energy companies were there” when Abel talks about a group of companies that made commitments regarding the Paris climate agreement. Abel says “none”.

  Buffett: “We’d spend $100 billion on infrastructure” referencing Biden’s speech on Wednesday stating that we need more infrastructure spending.

  If we get a 10% return, I’m all for it as well.

  Good question on prospects for insurance when Buffett and Jain are no longer involved. Should Berkshire then focus on short-tail lines?

  Jain talks about pricing for the unknowns unknowns – a good answer, but not really addressing succession.

  Buffett: “We are willing to lose $10 billion in a single event” if paid appropriately for taking on a risk.

  Sounds like a big number but not relative to Berkshire’s current size.

  “Warren and I don’t have to agree on every damn thing we do.”

  Charlie’s answer when asked about differences of opinion between him and Buffett on Costco and Wells Fargo.

  Having Jain and Abel on stage interacting with each other is quite valuable for shareholders.

  “In three more years, Charlie will be aging at 1% per year. No one is aging less than Charlie.”

  Very funny, Warren …

  Jain talking about GEICO and Progressive – very candid about Progressive as a formidable competitor and the relative advantages of GEICO and Progressive.

  I can tell Jain doesn’t engage in BS. At all.

  Buffett talking about $AAPL. Munger thought that Buffett selling a little was a mistake.

  Charlie: “Yes”

  Buffett is talking about how Apple products are indispensable to customers.

  He’s right about some people picking their phone over a car if they had to choose between the two.

  People are addicted to their damn phones.

  Buffett talking about how interest rates are like financial gravity when asked about stock valuations.

  Buffett looking for a clipping from a … paper WSJ … noting that the government sold 4 week t-bills at an average price of 100.000000. Free money for Uncle Sam.

  Buffett notes that there has been an incredible change in anything that produces money because the risk free rate is now zero.

  And of course he’s right. But for how long will this last? Is it “safe” to price stocks as if the risk free rate will be zero forever?

  “The most interesting movie we have ever seen.”

  Buffett characterizing the current economic environment.

  Buffett: Low interest rates reduce the value of float substantially but Berkshire has options for investing that others don’t have.

  As noted earlier today, Buffett shuns fixed income securities for this very reason.

  Buffett notes that most SPACs have a two year limit for deploying cash. If you have a gun to your head, then you’ll buy something.

  The meeting is half over and no Bitcoin, Dogecoin, Elon, or Crypto questions yet, unless I missed it.

  Buffett says that he has roughly $70-80 billion that he would love to put to work.

  $20 billion is not the minimum cash level anymore, as he alluded to earlier. It is probably double of that or more, but he has not specified.

  Charlie: “Bernie Sanders has won.” Referring to the millennials having trouble rising as far as earlier generations. Um….

  Buffett defends the logic of repurchases vs. dividends as a way of cashing out shareholders who want cash, leaving the rest of us alone to continue compounding.

  Tax efficiently, I might add.

  Munger: Critics are bonkers.

  Amen.

  I feel very good about not receiving a surprise dividend from Berkshire anytime soon.

  Which I suspect will remain the case as long as Buffett and Munger are around since they don’t want to pay the taxes any more than I do.

  Buffett stresses that he doesn’t speak for Berkshire when providing his personal views on taxes.

  He punts on tax questions. Although he certainly has spoken in the past on taxes at prior meetings.

  I like the new policy.

  Munger: “I wouldn’t move across the street to save my children $500 million in taxes.”

  But … “Who in the hell would drive out the rich people?”

  The government owns “Berkshire Class AA stock”. They can take a percentage of earnings without owning any of the company. Indeed.

  Buffett thinks that his wealth will accomplish more utility in private philanthropy run by smart people. It won’t make a “damn bit of difference” if it goes to the Federal government. I agree.

  I suspect (or at least hope) that Buffett has spoken to the President about tax policy, especially the folly of even thinking about thinking about taxing *unrealized* gains annually, one of the more bonkers ideas to ever be proposed in Washington. Truly nuts.

  Buffett: Valuation for Kansas City Southern deal would not be happening without interest rates at current levels. A combination would have a small impact on BNSF and Union Pacific.

  Buffett: Biggest single “risk factor” never appearing in a company filing is a CEO who is personable and everyone likes but doesn’t know what he or she is doing.

  CRYPTO/BITCOIN QUESTION!!!

  Buffett dodges the question. He doesn’t want 400,000 people mad at him and 2 people happy.

  Charlie: “You’re waving a red flag at a bull.” Rant follows on bitcoin and other things invented out of thin air … Disgusting, contrary to the interests of civilization…

  Q: Why is BRK’s proposal for TX grid better than Musk’s proposal?

  Abel: BRK’s proposal is the best they could come up with. If Elon’s proposal is better, then Texas should pursue it. Notes that battery solution isn’t as robust in terms of duration of power supplied.

  Buffett: We know what we can do for TX grid. If someone can provide a solution cheaper and faster, they should do it.

  Notes that Berkshire is backing proposal with $4 billion penalty if they fail to deliver.

  Q for Ajit: Would you underwrite an insurance policy for Elon Musk’s mission to Mars?

  “No thank you, I will pass.”

  Buffett: Depends on the premium. And on whether Elon is on the mission or not. Skin in the game.

  Ajit: “I would be very concerned about writing an insurance policy with Elon Musk on the other side.”

  Q: Why aren’t Ted and Todd available to answer questions?

  Buffett: Why would we make Ted and Todd available to talk stocks and share ideas with competitors?

  Munger is convinced that China will allow companies to flourish. They “changed communism” because they didn’t want to stay poor. A remarkable change coming from such a place. And it has worked like gangbusters. Munger very complimentary.

  This will trigger many people.

  Q:What happened to the joint health care initiative with Amazon and J.P. Morgan?

  Buffett: We learned more about health care in decentralized Berkshire subsidiaries and is one place where centralization could save some real money.

  Very hard to change the overall system.

  Buffett notes that when companies pay healthcare costs for employees, its an abstraction to employees. They don’t realize that they are really paying in the form of lower wages. And they like that.

  Munger: “No kidding”

  Buffett notes that U.S. pays 17% of GDP for healthcare while no other major country pays more than 11% yet we get poorer results.

  Rational Walk: “No kidding”

  Buffett on the failure of the joint healthcare initiative with J.P. Morgan and Amazon:

  “We were fighting a tapeworm, and the tapeworm won.”

  Question: What do Jain and Abel read on a daily basis?

  90% of Ajit’s reading is related to insurance. Abel focuses on the operating businesses he’s in charge of.

  Blocking and tackling.

  Buffett: Nothing illegal or immoral about gambling on Robinhood but you can’t build a society around it. Not admirable. Will read prospectus.

  Munger: “Waving a red flag at a bull.” Godawful. Deeply wrong. State lotteries: States pushed aside mafia in numbers game.

  Q: Signs of inflation in subsidiaries?

  Buffett: Very substantial. We are raising prices. People are raising prices to us. It’s being accepted. Take homebuilding. Cost up up up. Every day. cc @federalreserve

  Buffett is clearly seeing inflation pressure. Doesn’t sound like he thinks it is “transitory”.

  Who do you believe? Warren Buffett or Jay Powell and his army of phd economists?

  I am paraphrasing, but the transcript will be posted soon, the video will be available, and I’d encourage everyone to read his statements on cost pressures verbatim.

  “There’s more inflation going on that people would have anticipated six months ago or thereabouts.”

  Listening to that exchange just now makes me want to take out a large thirty year fixed rate mortgage as soon as possible even if I might be paying a high price for a property.

  Buffett notes that while rich people can change states relatively easily, a business with plants cannot change so quickly and must be very careful about the pension deficits in various jurisdictions.

  Q: Biggest lesson over the past year?

  Buffett: “Listen more to Charlie.”

  Munger: “We are in uncharted territory.”

  Buffett talks about the long term prospects for Berkshire over the next many decades, etc.

  No break between the 3 1/2 hour Q&A session and formal meeting. Buffett is 90. Munger is 97.

  The formal meeting is a foregone conclusion in terms of the outcome of the two shareholder proposals so I’ll conclude this thread here.

  The full annual meeting is here.

  Tyler Durden
  Sun, 05/02/2021 – 17:25

• $70,000 For A Part-Time Driver
  $70,000 For A Part-Time Driver

  By John Kingston of Freightwaves,

  David Parker is the CEO of Covenant Logistics and he was blunt with analysts who follow the company on its earnings call Tuesday.

  “How do we get enough drivers?” he said in response to a question from Stephens analyst Jack Atkins. “I don’t know.”

  

  Parker then gave an overview of the situation facing Covenant, and by extension other companies, in trying to recruit drivers. One problem: With rates so high, companies are encountering the fact that a driver doesn’t need to work a full schedule to pull in a decent salary.

  “We’re finding out that just to get a driver, let’s say the numbers are $85,000 (per year),” Parker said, according to a transcript of the earnings call supplied by SeekingAlpha. “But a lot of these drivers are happy at $70,000. Now they’re not coming to work for me, unless it’s in the ($80,000s), because they’re happy making $70,000.”

  

  What’s happening, he said, is that drivers are looking at the fact that they can make $70,000 “and stay home a little more.”

  The result is a tightening of capacity. Parker said utilization in the first quarter at Covenant was three or four percentage points less than it would have as a result of that development. “It’s an interesting dynamic that none of us have calculated,” he said.

  To put the numbers in perspective, Todd Amen, the president of ATBS, which prepares taxes for mostly independent owner-operators, said in a recent interview with the FreightWaves Drilling Deep podcast that the average tax return his company prepared for drivers’ 2020 pay was $67,500. He also said his company prepared numerous 2020 returns with pay in excess of $100,000.

  Parker was firm that this was not a situation likely to change soon. “There’s nothing out there that tells me that drivers are going to readily be available over the medium [term in] one to two years,” he said. “And that’s where I’m at.”

  Paul Bunn, the company’s COO and senior executive vice president, echoed what other executives have said recently: Additional stimulus benefits are making the situation tighter. He said that while offering some hope that as the benefits roll off, “that might help a bit.”

  But what the government giveth the government can sometimes taketh away. Bunn expressed another familiar sentiment in the industry today, that an infrastructure bill adding to demand for workers would create more difficulty to put drivers behind the wheel. Construction, Bunn said, is “a monster competitor of our industry” and if the bill is approved, “that’s going to be a big pull.” 

  Labor is going to be a “capacity constraint” through the economy, Bunn said, while conceding that trucking is not unique in that.  And because of that labor squeeze, capacity in many fields is going to be limited. “The OEMs, the manufacturers are limited capacity,” Bunn said. “They’re not ramping up in a major, major way because of labor, because of commodity pricing, because of the costs.”

  All that means is that capacity growth is going to be “reasonable,” Bunn said. “It’s not going to be crazy, people growing fleets [by] significant amounts.”

  “It’s all you can do just to hold serve,” he added. 

  While the driver situation is tough, it didn’t notably hurt the first-quarter performance of Covenant. To open the call, Joey Hogan, Covenant’s co-president, highlighted some of the company’s first-quarter numbers: a 6% growth in operating revenue on a strategic reduction in the number of company tractors and the best first-quarter net income figure in its history. 

  Beyond the market for drivers, Parker said the freight market is “hot” and likely to stay that way.

  “We are at 7%, 8% GDP growth, that goes to 5%, well, probably, or it could stay 7% or 8%,” he said. “But it’s still going to be numbers that you and I have never sensed or felt from a freight standpoint. And so I don’t see that letting up, I see that a solid couple of years of being in that kind of environment.”

  Given that, Parker and other Covenant managers used the occasion of the earnings call to drive home with more detail a point the company made in its earnings statement a day earlier: It intends to get higher rates out of some of its Dedicated customers. While the company’s Expedited division saw its operating ratio improve to 91% from 102.3% a year earlier, the Dedicated division saw its OR remain above 100%. 

  The Dedicated division, Bunn said, has two types of customers. One is a group with high returns, “and we want more of those,” he said. “We’re going to go to the customers [where] we have that and say, ‘Can we have more of your business?’”

  The other are customers that Bunn referred to as “commoditized.” Those customers are going to need to “value” the Dedicated service provides “or we’re going to give those trucks to somebody who’s in the first bucket.”

  Trucks won’t just get “yanked” out, Bunn said. But “we’re not going to run Dedicated with a 98, 99 or 100 OR,” he added.

  But even though Covenant, like other carriers, has leverage in negotiations given the tight market for capacity, it does need to be handled with a certain degree of aplomb, Hogan said. Hogan was talking about the company’s Expedited division when he said that in price negotiations, a company needs to be “respectful” as prices get up to “that line where they say, ‘Well, I’m going to grow my own [transportation].’”

  Another possibility: rail. “When does the price push them to the rail?” he asked.

  However, the Expedited division is “in a good spot for at least a couple of years,” Hogan said. That’s aided by the fact that inventories are “stupid low” across the supply chain, he added. 

  Tyler Durden
  Sun, 05/02/2021 – 17:00

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