Aug 05

Today’s News 5th August 2022

  • Escobar: How A Missile In Kabul Connects To A Speaker In Taipei
    Escobar: How A Missile In Kabul Connects To A Speaker In Taipei

    Authored by Pepe Escobar via The Cradle,

    Washington’s hard power display of taking out Al-Qaeda’s Al-Zawahiri will not be reciprocated by Beijing over Pelosi’s provocative visit to Taiwan. It does however, definitively bury the decades-long era of cooperative US-Chinese relations.

    This is the way the “Global War on Terror” (GWOT) ends, over and over again: not with a bang, but a whimper.

    Two Hellfire R9-X missiles launched from a MQ9 Reaper drone on the balcony of a house in Kabul. The target was Ayman Al-Zawahiri with a $25 million bounty on his head. The once invisible leader of ‘historic’ Al-Qaeda since 2011, is finally terminated.

    All of us who spent years of our lives, especially throughout the 2000s, writing about and tracking Al-Zawahiri know how US ‘intel’ played every trick in the book – and outside the book – to find him. Well, he never exposed himself on the balcony of a house, much less in Kabul.

    Another disposable asset

    Why now? Simple. Not useful anymore – and way past his expiration date. His fate was sealed as a tawdry foreign policy ‘victory’ – the remixed Obama ‘Osama bin Laden moment’ that won’t even register across most of the Global South. After all, a perception reigns that George W. Bush’s GWOT has long metastasized into the “rules-based,” actually “economic sanctions-based” international order.

    Cue to 48 hours later, when hundreds of thousands across the west were glued to the screen of flighradar24.com (until the website was hacked), tracking “SPAR19” – the US Air Force jet carrying House Speaker Nancy Pelosi – as it slowly crossed Kalimantan from east to west, the Celebes Sea, went northward parallel to the eastern Philippines, and then made a sharp swing westwards towards Taiwan, in a spectacular waste of jet fuel to evade the South China Sea.

    No “Pearl Harbor moment”

    Now compare it with hundreds of millions of Chinese who are not on Twitter but on Weibo, and a leadership in Beijing that is impervious to western-manufactured pre-war, post-modern hysteria.

    Anyone who understands Chinese culture knew there would never be a “missile on a Kabul balcony” moment over Taiwanese airspace. There would never be a replay of the perennial neocon wet dream: a “Pearl Harbor moment.” That’s simply not the Chinese way.

    The day after, as the narcissist Speaker, so proud of accomplishing her stunt, was awarded the Order of Auspicious Clouds for her promotion of bilateral US-Taiwan relations, the Chinese Foreign Minister issued a sobering comment: the reunification of Taiwan with the mainland is a historical inevitability.

    That’s how you focus, strategically, in the long game.

    What happens next had already been telegraphed, somewhat hidden in a Global Times report. Here are the two key points:

    Point 1: “China will see it as a provocative action permitted by the Biden administration rather than a personal decision made by Pelosi.”

    That’s exactly what President Xi Jinping had personally told the teleprompt-reading White House tenant during a tense phone call last week. And that concerns the ultimate red line.

    Xi is now reaching the exact same conclusion reached by Russian President Vladimir Putin earlier this year: the United States is “non-agreement capable,” and there’s no point in expecting it to respect diplomacy and/or rule of law in international relations.

    Point 2 concerns the consequences, reflecting a consensus among top Chinese analysts that mirrors the consensus at the Politburo: “The Russia-Ukraine crisis has just let the world see the consequence of pushing a major power into a corner… China will steadily speed up its process of reunification and declare the end of US domination of the world order.”

    Chess, not checkers

    The Sinophobic matrix predictably dismissed Xi’s reaction to the fact on the ground – and in the skies – in Taiwan, complete with rhetoric exposing the “provocation by American reactionaries” and the “uncivilized campaign of the imperialists.”

    This may be seen as Xi playing Chairman Mao. He may have a point, but the rhetoric is pro forma. The crucial fact is that Xi was personally humiliated by Washington and so was the Communist Party of China (CPC), a major loss of face – something that in Chinese culture is unforgivable. And all that compounded with a US tactical victory.

    So the response will be inevitable, and it will be classic Sun Tzu: calculated, precise, tough, long-term and strategic – not tactical. That takes time because Beijing is not ready yet in an array of mostly technological domains. Putin had to wait years for Russia to act decisively. China’s time will come.

    For now, what’s clear is that as much as with Russia-US relations last February, the Rubicon has been crossed in the US-China sphere.

    The price of collateral damage

    The Central Bank of Afghanistan bagged a paltry $40 million in cash as ‘humanitarian aid’ soon after that missile on a balcony in Kabul.

    So that was the price of the Al-Zawahiri operation, intermediated by the currently US-aligned Pakistani intelligence agency, the Inter-Services Intelligence (ISI). So cheap.

    The MQ-9 Reaper drone carrying the two Hellfire R9X that killed Al-Zawahiri had to fly over Pakistani airspace – taking off from a US base in the Persian Gulf, traversing the Arabian Sea, and flying over Balochistan to enter Afghanistan from the south. The Americans may have also got human intelligence as a bonus.

    A 2003 deal, according to which Islamabad facilitates air corridors for US military flights, may have expired with the American withdrawal debacle last August, but could always be revived.

    No one should expect a deep dive investigation on what exactly the ISI – historically very close to the Taliban – gave to Washington on a silver platter.

    Dodgy dealings

    Cue to an intriguing phone call last week between the all-powerful Chief of Staff of the Pakistani Army, Gen Qamar Javed Bajwa, and US deputy Secretary of State Wendy Sherman. Bajwa was lobbying for the International Monetary Fund (IMF) to release a crucial loan at the soonest, otherwise Pakistan will default on its foreign debt.

    Were deposed former Prime Minister Imran Khan still in power, he would never have allowed that phone call.

    The plot thickens, as Al-Zawahiri’s Kabul digs in a posh neighborhood is owned by a close advisor to Sirajuddin Haqqani, head of the “terrorist” (US-defined) Haqqani network and currently Taliban Interior Minister. The Haqqani network, needless to add, was always very cozy with the ISI.

    And then, three months ago, we had the head of ISI, Lieutenant General Nadeem Anjum, meeting with Biden’s National Security Advisor  Jake Sullivan in Washington – allegedly to get their former, joint, covert, counter-terrorism machinery back on track.

    Once again, the only question revolves around the terms of the “offer you can’t refuse” – and that may be connected to IMF relief. Under these circumstances, Al-Zawahiri was just paltry collateral damage.

    Sun Tzu deploys his six blades

    Following Speaker Pelosi’s caper in Taiwan, collateral damage is bound to multiply like the blades of a R9-X missile.

    The first stage is the People’s Liberation Army (PLA) already having engaged in live fire drills, with massive shelling in the direction of the Taiwan Strait out of Fujian province.

    The first sanctions are on too, against two Taiwanese funds. Export of sable to Taiwan is forbidden; sable is an essential commodity for the electronics industry – so that will ratchet up the pain dial in high-tech sectors of the global economy.

    Chinese CATL, the world’s largest fuel cell and lithium-ion battery maker, is indefinitely postponing the building of a massive $5 billion, 10,000-employee factory that would manufacture batteries for electric vehicles across North America, supplying Tesla and Ford among others.

    So the Sun Tzu maneuvering ahead will essentially concentrate on a progressive economic blockade of Taiwan, the imposition of a partial no-fly zone, severe restrictions of maritime traffic, cyber warfare, and the Big Prize: inflicting pain on the US economy.

    The War on Eurasia

    For Beijing, playing the long game means the acceleration of the process involving an array of nations across Eurasia and beyond, trading in commodities and manufactured products in their own currencies. They will be progressively testing a new system that will see the advent of a BRICS+/SCO/Eurasia Economic Union (EAEU) basket of currencies, and in the near future, a new reserve currency.

    The Speaker’s escapade was concomitant to the definitive burial of the “war on terror” cycle and its metastasis into the “war on Eurasia” era.

    It may have unwittingly provided the last missing cog to turbo-charge the complex machinery of the Russia-China strategic partnership. That’s all there is to know about the ‘strategic’ capability of the US political ruling class. And this time no missile on a balcony will be able to erase the new era.

    Tyler Durden
    Thu, 08/04/2022 – 23:40

  • Watch: Gun Hobbyist Makes "100% Working 3D-Printed Gun" That Fires Plastic Ammo
    Watch: Gun Hobbyist Makes “100% Working 3D-Printed Gun” That Fires Plastic Ammo

    War journalist Jake Hanrahan, the founder of independent media platform “Popular Front,” tweeted a video that shows a gun hobbyist firing plastic ammunition from a “100% 3D-printed gun.” 

    Hanrahan said gun hobbyist @SuckBoyTony1, who designs and builds 3D-printed firearms that are electronically ignited, created a “working 100% 3D-printed gun.” He continued: “The barrel and even the ammunition is plastic.”

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    Some of our questions about the homemade firearm’s plastic barrel and ammunition were answered by one Twitter commenter:

    “The barrel actually is rifled…and so is the round. He based it off the whitworth rifle. IIRC the bullet is a metal projectile but the whole cartridge leaves the barrel effectively making it caseless ammunition.” 

    SuckBoyTony1 responded to another commenter by saying the plastic caseless ammunition was packed with black powder and electronically ignited. 

    Plastic-cased ammunition is a technology the Army is working on to reduce firing and weight for next-generation squad weapons. 

    “Whilst this obviously isn’t a practical weapon, the potential implications of the concept are fascinating,” Hanrahan concluded. 

    As we’ve pointed out, printing guns at home costs as much as $350 but involves metal pieces for the barrel that must be bought. Plus, ammunition must be purchased. Now it appears a gun hobbyist has entirely printed a gun (barrel included) and ammunition, all at home, which renders gun control useless. 

    Tyler Durden
    Thu, 08/04/2022 – 23:20

  • US Risks Provoking North Korea's Kim By Holding Drills Simulating His Assassination
    US Risks Provoking North Korea’s Kim By Holding Drills Simulating His Assassination

    Authored by Dave DeCamp via AntiWar.com,

    The US and South Korea are planning new war games where they will simulate taking out North Korea’s military leadership, including the country’s leader, Kim Jong-un, The Daily Beast reported on Wednesday.

    The drills will simulate targeting Pyongyang’s missile and nuclear sites plus bases needed to supply them. Sources familiar told The Daily Beast that the war games will end with a “decapitation” exercise where they attack North Korea’s command structure and take out Kim.

    Via AP/Stillframe of state media footage

    According to the report, the US will not publicly acknowledge that they are practicing killing Kim in the war games. Washington and Seoul haven’t held such exercises since President Trump canceled them in 2018 after meeting with Kim.

    The last time the war games were held was in 2017, and Kim responded by ordering an underground nuclear weapons test. The North hasn’t launched a nuclear test since, but the US is risking provoking one by simulating Kim’s assassination.

    Secretary of Defense Lloyd Austin and his South Korean counterpart, Lee Jong-sup, agreed to restart the drills last weekend. When they were held last about 50,000 South Korean troops, and 20,000 US troops participated.

    The renewed war games come after South Korea’s new President Yoon Suk-yeol said he would strengthen military ties with the US. His predecessor, Moon Jae-in, was a proponent of peaceful reunification with the North, and Yoon has said he will take a tougher stance on Pyongyang.

    Yoon seeks the return of US nuclear bombers and submarines to South Korean territory. The US removed all of its nuclear weapons from the Korean peninsula in 1991.

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    The Biden administration has maintained that it’s open to talks with Pyongyang but hasn’t offered any incentives to bring them to the table, such as sanctions relief. The North restarted launching missile tests last year, and the US has been warning that they may be preparing for a nuclear test.

    Tyler Durden
    Thu, 08/04/2022 – 23:00

  • July Payrolls Preview: What's Better For Markets 400K Or A Negative Print?
    July Payrolls Preview: What’s Better For Markets 400K Or A Negative Print?

    Heading into tomorrow’s main event – the nonfarm payrolls print (which is the appetizer for CPI next Wednesday), JPMorgan’s trading desk asked a rhetorical question: what’s better for markets: 50K or 400K jobs for NFP?

    It answered as follows: “50K NFP gets the Fed closer to “Mission Accomplished” as they are nearly there with housing markets (lower prices pending). I think a 400k print would have bond yields reprice higher, potentially taking the 10Y yield above 3% which has acted as a resistance point for Equities, recently.”

    In other words, good news is bad, and bad news is great news, precisely as we said would be the norm moments after last week’s Powell presser in which he said that forward guidance is now dead and instead the Fed is data dependent.

    Goldman agrees, and flow trader John Flood writes in his EOD wrap that “we are firmly in a BAD is GOOD and vice versa tape right now.” He adds that whereas Goldman estimates a +225k headline print (vs +372 prior and +250k consensus). In this context:

    • The market “will get hit hard (-200bps) on a print north of 372k (>prior reading) as sooner than expected “fed pivot” convos will quickly be shelved.”
    • On the other hand, “a relatively inline print (150k – 300k) mkt wont react to as traders will sit on hands and wait for CPI.”
    • Finally, “if jobs are lost and we get a negative print, tape will rally 100+bps as FOMO/COVER chase will (remain) on w/ early 2023 rate cut discussions gaining more momentum.”

    Taking a step back, let’s take a look at what Wall Street expects tomorrow courtesy of Newsquawk:

    • In July, the US economy is expected to add 250k nonfarm payrolls in July, with the pace of payroll additions cooling again amid tight labor market conditions. However, as we first observed one month ago, the slowdown in the Establishment survey has already been apparent in the Household Survey where there has been no jobs growth since March.
    • The unemployment rate is expected to be unchanged at 3.6%.
    • Average hourly earnings are expected to rise 0.3% from June and 4.9% from a year ago, down from the 5.1% increase a month earlier.

    • The July jobs report will also give us a glimpse of how the key initial data prints from Q3 are shaping up, and whether there was anything more to the ‘technical’ weakness seen in Q2. If the headline were to significantly top the consensus estimate, it would add fuel to the argument that the labor market remains strong, and provide the Fed with scope to lift rates by a larger increment if it deemed necessary.
    • Conversely, a downside surprise would add to arguments highlighting slowing growth momentum in the US, and embolden those who have suggested that the central bank will need to lower rates next year to support an economy that is falling into a recession.

    Wage inflation:

    • Average hourly earnings are expected to rise by 0.3% M/M in July, matching the rate of the prior month, while the annual measure is seen easing by 0.2ppts to 4.9% Y/Y.
    • Analysts have recently noted that various measures of wage growth are sending conflicting signals: the component within the jobs report has been easing in the first half of the year, but the Atlanta Fed’s Wage Growth Tracker has been rising, for instance.
    • In terms of the Fed’s own focus, at his post-meeting press conference in July, Chair Powell flagged the Employment Cost Index series as a key metric that officials would consider when setting policy. And within the Q2 ECI report, the wages and salaries component, which analysts use as a gauge of labor market tightness, rose by 1.6% on a three-month seasonally adjusted basis, picking-up from the previous 1.3%; at an annualized rate, this equates to around 6.5% Y/Y, according to Pantheon Macroeconomics.
      • “Wage gains at this pace are far too high for the Fed, because they would require implausible rapid productivity growth in order to be consistent with the inflation target in the medium-term,” it said, “a lot more data will be released before the September Fed meeting, but this is not a great start for investors looking for the Fed to slow the pace of tightening.”
    • Going forward, Goldman Sachs (which projects nonfarm payrolls rose by 225k in July, 25k below consensus and a slowdown from the +372k pace in June) expects wage growth to begin slowing, and offers three reasons to support this argument:
      • the firmness in wage growth last year and early 2022 was likely a reflection of one-off factors related to the pandemic that are no longer relevant,
      • the breadth of wage gains has fallen in recent months,
      • forward-looking wage growth expectations have started to moderate.

    Policy Significance:

    • Fed officials have been looking through recent growth data that showed the US economy contract for two consecutive quarters, which some define as a ‘technical’ recession. Policymakers have argued that US economic performance is not consistent with recessionary conditions, with their case heavily premised on job gains being robust in recent months, and the unemployment rate remaining low.
    • July’s data will perhaps carry more weight than in recent months since it could be more influential in determining the outcome of the September FOMC meeting. The Fed has indicated that it is now setting policy on a meeting-by-meeting basis, where incoming data will be the basis of its policy decisions; that said, the central bank has also suggested that inflation remains its primary policy focus, and it is prepared to take monetary policy into restrictive territory to cap the upside surge in prices, and accordingly, the central bank is still expected to aggressively tighten rates, with many officials noting that there is much work to be done to bring inflation back down.
    • Currently, money market pricing for the September FOMC meeting is split between a rate hike of 50bps or 75bps from the current 2.25-2.50% neutral level; beyond September, markets are betting that rates will rise to 3.25-3.50% by year-end, before easing to 2.75-3.00% over the course of 2023.

    Market reaction:

    • Traders will use the data to shape expectations of how the Fed will set policy at its September meeting: the central bank is in a data-dependent, meeting-by-meeting mode, as it focuses on bringing inflation back to target.
    • Accordingly, any upside surprise for the headline and wages will give the central bank scope to move rates higher by a larger increment in September, whereas any downside surprise to the headline may indicate that the slowing growth momentum has crept into Q3, and any downside surprise in the wages component may allow the central bank to revert to a smaller increment of rate hikes.

    Arguing for a weaker-than-expected report:

    • Seasonal factors. The July seasonal factors have evolved unfavorably in recent years, with a month-over-month hurdle for private payrolls of +240k in July 2021 and +209k in July 2020 compared to negative hurdles throughout the 2010s (including -54k in July 2015, which was also a 5-week July payroll months; see Exhibit 1). There is a possibility that the July seasonal factors are overfitting to the reopening-related job surges in the summer of 2020 and 2021. This higher seasonal hurdle represents a headwind of roughly 250k, in our view, other things equal. Goldman also believes a difficult seasonal factor weighed on the June report (by roughly 200k).

    • Big Data. High-frequency data on the labor market generally were mixed in July, with a solid rise in the Homebase data but outright declines in the Google and Census Pulse measures. However, Big Data measures generally understated BLS payroll growth in Q2 (which may suggest that BLS payroll data is overstated).

    • Jobless claims. Initial jobless claims increased from very low levels during the July payroll month, averaging 243k per week vs. 225k in June. Continuing claims in regular state programs increased 44k from survey week to survey week. Employer surveys. The employment components of business surveys generally decreased in July. Our services survey employment tracker decreased by 0.4pt to 54.0 and our manufacturing survey employment tracker decreased by 0.6pt to 55.2.

    Arguing for a stronger-than-expected report:

    • Education seasonality. We assume +75k for the education sector in tomorrow’s report (mom sa, public and private). Education payrolls remain 200k below pre-crisis (public and private), and we expect fewer-than-normal janitors and support staff leaving for the summer.
    • Job cuts. Announced layoffs reported by Challenger, Gray & Christmas decreased 15.0% month-over-month in July, after increasing 79.0% in June (SA by GS). Job availability. The Conference Board labor differential—the difference between the percent of respondents saying jobs are plentiful and those saying jobs are hard to get—declined by 2.1pt to +37.8 but remained high. JOLTS job openings decreased by 605k in June to 10.7mn but remain very elevated.

    Neutral/mixed factors:

    • Labor supply constraints. When the labor market is tight, job growth tends to slow but remain strong in July, as shown in Exhibit 3. This may reflect the arrival of the summer youth labor force and an associated easing in hiring difficulty.

    • ADP. The ADP report was not published this month as the company revamps their model. ADP is targeting August 31 for their next update.

    Tyler Durden
    Thu, 08/04/2022 – 22:40

  • Infuriated China Cancels Bilateral Meeting With Japan Over G-7 Statement On Taiwan
    Infuriated China Cancels Bilateral Meeting With Japan Over G-7 Statement On Taiwan

    In the latest significant sign of fast deteriorating Japan-China relations, China’s foreign ministry announced Thursday that its top diplomat will no longer meet with his Japanese counterpart, which was expected in a scheduled meeting today on the sidelines of the ASEAN summit in Cambodia.

    Beijing’s last-minute cancelation and diplomatic rebuke is in retaliation for Japan participating in a G-7 joint statement released the day prior condemning China’s response to Nancy Pelosi’s visit to Taiwan Tuesday into Wednesday. Foreign Minister Wang Yi’s expected meeting with Japan FM Yoshimasa Hayashi was called off during a foreign ministry press conference. Crucially, Wang is also now refusing to meet with Antony Blinken.

    Japanese Foreign Minister Yoshimasa Hayashi, left, and Chinese counterpart Wang Yi. Image: Kyodo via Nikkei 

    “We are concerned by recent and announced threatening actions by the People’s Republic of China (PRC), particularly live-fire exercises and economic coercion, which risk unnecessary escalation,” the G-7 communique stated.

    Beijing reacted angrily, underscoring that it was Pelosi’s trip that violated China’s “sovereignty” and the status quote One China principle.

    Making matters worse on Thursday, missiles launched over and toward Taiwan as part of the PLA’s show of force and muscle flexing landed inside Japanese exclusive economic zone (EEZ) for the first time, according to Japan’s defense ministry.

    According to details of the incident, “all five of the missiles that landed within Japan’s EEZ — which extends 200 nautical miles (370 kilometers) from Japan’s coast — had fallen into waters southwest of Hateruma Island in Okinawa Prefecture,” Japan Times writes.

    And further, “In Okinawa Prefecture, Yonaguni Island — located just 110 kilometers from Taiwan — as well and Miyako Island, are home to Ground Self-Defense Force bases, while construction is currently underway on another base for surface-to-air and surface-to-ship missile units on Ishigaki Island.

    Defense Minister Nobuo Kishi told a news briefing, “This is a grave issue that concerns our country’s national security and people’s safety.”

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    Tokyo’s leadership, like much of the West, has long been worried that any mainland China move on self-ruled Taiwan would set off an emergency across Japanese industries, given Taiwan is a prime semi-conductor maker and supplier, also as crucial shipping lanes off Japan would be blocked in such a scenario.

    Tyler Durden
    Thu, 08/04/2022 – 22:40

  • Scaling Ethereum: The Role Of Rollups
    Scaling Ethereum: The Role Of Rollups

    Authored by Conor Ryder via Kaiko.com,

    The growth of Decentralized Finance and more recently NFTs exposed Ethereum’s lack of scaling solutions for all to see. During the Bored Ape Yacht Club land sale only a few months ago, buyers paid over $10,000 in transaction fees per NFT, which surpassed the $6,000 or so price tag of the NFT itself. These transaction costs rear their ugly head every time the Ethereum network becomes congested – think times of extreme volatility like the Terra collapse or the Celsius crisis recently. Whatever your thoughts on Ether as an investment, the fact that the cost of using the network can exceed the price of the item being bought is a clear sign that the Ethereum blockchain isn’t fit for purpose in its current state.

    This Deep Dive will take a look at the data behind Layer 2 rollups, Ethereum’s quickest solution for scaling the network in the short term.

    There are two main ways to scale Ethereum:

    1. Improve the transaction capacity of the blockchain itself. The most effective way to upgrade the blockchain but also the most complicated. Sharding and other upgrades may not be seen for another year or more.

    2. Move to Layer 2. Instead of doing all the computational work on Layer 1 (Ethereum blockchain), a solution is to move the bulk of the work to Layer 2 – an off-chain network that reduces the computational strain on the Ethereum mainchain. The Layer 2 protocols responsible for achieving this scalability solution are called rollups. Layer 2 rollups are the fastest way to help Ethereum scale in the short term.

    Blockchain Improvements

    Improvements are being planned to the Ethereum network, most notably the Merge in September, which should see the energy consumption of the Ethereum blockchain reduced by about 99%. However, contrary to what some may think, the Merge itself won’t be a big factor in helping Ethereum solve its scalability issues. These fixes are due to come later in 2023 when the network begins the process of sharding. Sharding is beyond the scope of this deep dive but it essentially entails splitting the network into shards or seperate pieces in order to reduce congestion and improve transaction throughput. Transaction throughput is where Ethereum struggles compared to its ambitions to be the backbone of a new financial system. Currently, Ethereum can only handle about 15 transactions per second, compared to Visa’s 24,000 and Solana’s 50,000.

    Only when Ethereum completes its roadmap of sharding and other updates to the blockchain will it reach the elusive 100,000 transactions per second. We can see that optimistic and zK rollups offer respectable throughput improvements and when we factor in that there are, and will be, multiple protocols offering capacity for transactions, that throughput number starts to approach Visa’s level. In the absence of widespread upgrades to the blockchain, rollups definitely serve a purpose for the Ethereum network in the near term – with lower fees comes more adoption.

    Ethereum Fees

    Transaction fees on the Ethereum network are currently at their lowest levels since December 2020.

    A falling transaction fee is exactly what Ethereum needs, however in this instance it’s related to a lack of demand. TVL of DeFi projects has plummeted while NFTs are in their first ever bear market, all combining to bring blockspace demand to recent lows. However, the low fees do offer us a glimpse into how Ethereum users might interact with protocols in the future if the fees weren’t so prohibitive. As decentralized exchange volume decreases year to date, one would assume that this paints a sufficient picture of the activity on these platforms. However, an interesting trend to examine is trade count, which arguably shows the actual usage on an exchange. Trade size is also a useful barometer for whale vs. retail activity and for the purposes of this article, a smaller trade size is indicative of more retail usage.

    Take Uniswap and Curve for example, Ethereum’s two largest decentralized exchanges by volume. Have users adjusted their behaviors in light of the lower fees?

    The answer is yes. The lowest transaction fees in nearly two years have seen trade sizes on the decentralized exchanges, such as Uniswap above, plummet while trade count actually rises. More trades are being placed by Uniswap users as transaction costs are low. Lower fees make DeFi more accessible to the average user and less geared towards whales, a nuance that is most definitely pivotal for the adoption of DeFi. 

    One decentralized exchange that is geared towards whales is Curve, an exchange specializing in stablecoin trading. We’ve observed a similar trend there where average trade size has fallen by over 80% while trade count rises.

    In contrast, Coinbase volumes are hovering around yearly lows as average trade size and trade count are both moving lower.

    In bear markets, volumes plummet on centralized exchanges as general interest among the public wanes. DeFi, however, still has plenty of use cases during a bear market (look at Curve’s role in the Terra collapse) and we can see that one factor of on-chain activity is Ethereum transaction fees, rather than general interest. 

    Reducing fees is priority number one for the Ethereum community in order to drive underlying adoption of the network. The quickest way to do that is via rollups.

    State of Rollups

    There are two main types of rollups, Optimistic and zK rollups, and their cost saving benefits have been clear to see already. Below are the fee comparisons between various Layer 2’s and Ethereum, according to l2fees.info.

    Optimistic and zK rollups mainly differ on their treatment of transaction veracity – how do we know the block being sent back to the Ethereum network does not contain fake transactions?

    Optimistic Rollups

    Optimistic rollups (ORs) presume transactions are valid when sending rolled up transactions back to the Ethereum blockchain, hence the name Optimistic. This assumption can be tested with a process called fraud proofs, where an onlooker can claim a transaction is fraudulent. The period for this usually spans 7 days, which is widely accepted as the biggest drawback of optimistic rollups. An exchange might logistically struggle to support immediate withdrawals if it was subject to a 7 day waiting period on transactions. 

    The two largest ORs are Arbitrum, which has yet to release a token, and Optimism, which launched a token on June 1st this year. There are other Layer 2 protocols with tokens that investors can get exposure to, such as Boba, a governance token for the Boba network, another optimistic rollup. Dydx is also a governance token, this time for the operation of the Layer 2 version of the decentralized exchange, which depends on zK rollups. IMX is a Layer 2 scaling solution for NFTs on Ethereum and differs slightly from the other governance tokens as it also can be used to pay transaction fees on the platform.

    The market seemed to start arriving at the conclusion that optimistic rollups were just a band aid over a bigger issue as since the Optimism (OP) token launch, it underperformed not only ETH but also other Layer 2 protocols. 

    However, with the announcement of a final date for the Merge, the market became more bullish on the Ethereum blockchain as a whole and Optimism started to outperform. This bullish sentiment is also evident in the futures market for OP which has seen a large buildup of open interest while the funding rate has moved positive in the last week.

    zK Rollups

    While Optimistic rollups presume all transactions are valid and allow onlookers to submit fraud proofs, “Zero knowledge” (zK) rollups do the work of validating each transaction themselves by submitting a validity proof along with each bundle of transactions. This is why they are more computationally intensive and up until recently, not EVM compatible, but it is also why they are far faster at settlements and withdrawals – there is no need for a window for fraud proof. This near-instant settlement is extremely appealing to exchanges who need to be able to satisfy user withdrawals in a timely manner; exactly why dydx has already adopted a zK rollup on Layer 2.

    Due to the computational intensity of zK rollups, OR’s were initially rolled out quickest while developers worked on what was deemed the ‘holy grail’ of rollups, a zK rollup that was EVM compatible. In the last couple of weeks we may have witnessed the beginning of the zK rollup era, as three teams, Polygon, Matter Labs and Scroll, all announced breakthroughs with EVM compatible zK rollups. 

    Layer 2s and DEXs

    Looking specifically at Uniswap and Curve’s breakdown of TVL, we can see that only a small portion of their value sit on Layer 2 optimistic rollups (Optimism and Arbitrum): 1.9% on Uniswap and 1.8% on Curve. Uniswap currently has 97% of TVL sitting on the Ethereum mainchain, while Curve has 92%. It’s reasonable to expect that once a zK EVM compatible rollup is rolled out that this number will decrease and move towards Layer 2, allowing more DEX users to avail of the cheaper fees on offer.

    Conclusion

    Layer 2 rollups are an essential part of Ethereum’s short/mid-term scaling strategy and possibly even in the long term as the rollups will sit on top of the improved Ethereum network. 

    It looks as if zK rollups are beginning to arbitrage away the competitive advantages of optimistic rollups, and if the teams working on an EVM compatible zK rollup can successfully launch their products, I expect them to gain a large amount of market share, potentially with traffic directed from decentralized exchanges.  

    Vitalik Buterin: “my advice to teams like Optimism and Arbitrum is that I think they should start zK-ifying themselves fairly soon.”

    Tyler Durden
    Thu, 08/04/2022 – 22:20

  • White House Orders US Carrier Strike Group To Stay Near Taiwan Longer Than Planned, Says China 'Overreacting'
    White House Orders US Carrier Strike Group To Stay Near Taiwan Longer Than Planned, Says China ‘Overreacting’

    Update(1718ET): The United States says it’s watching ongoing Chinese military drills around Taiwan very closely, while condemning the latest series of ballistic missiles fired over the island as a severe provocation and escalation. The White House has ordered the Ronald Reagan carrier strike group to stay in the area.

    US National Security Council (NSC) spokesman John Kirby said in statements to MSNBC Thursday: “We’ve been watching this very, very closely. It’s concerning. It’s not just concerning to us, but it’s concerning, of course, to the people of Taiwan. It’s concerning to to our allies in the region, especially Japan.”

    “The provocateur here is Beijing. They didn’t have to react this way to what is completely normal travel by congressional members to Taiwan…The Chinese are the ones who are escalating this,” Kirby added. He warned further, “One of the things that’s troublesome about exercises like this or missile launches like this is the risk of calculation, the risk of a mistake that could actually lead to some sort of conflict,” he said.

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    Kirby in a press briefing at the White House also said it’s Beijing that “chose to overreact” to Nancy Pelosi’s visit:

    “We condemn these actions, which are irresponsible and at odds with our long-standing goal of maintaining peace and stability across the Taiwan Strait and in the region,” Kirby told reporters at the White House. “China has chosen to overreact and use the speaker’s visit as a pretext to increase provocative military activity in and around the Taiwan Strait.”

    Both Taiwan officials, but more importantly Chinese officials and state media have acknowledged that effectively a blockade of the self-ruled island is in progress.

    And somewhat alarming for the prospect of ‘inadvertent’ aggression between the PLA and US navies, Kirmy affirmed that the USS Ronald Reagan carrier strike group plans to continue ‘freedom of navigation’ maneuvers through the Taiwan Strait.

    According to more details on the US strike group,

    On Thursday, Defense Secretary Lloyd Austin ordered the USS Ronald Reagan aircraft carrier and its strike group “to remain in the general area to monitor the situation,” Kirby said.

    “They’ll be there for a little bit longer than they were originally planned,” said Kirby. “I won’t get ahead of the ship’s schedule but the president believed it was a prudent thing to do, to leave her and her escort ships there just a little bit longer.”

    The U.S. will also conduct “standard air and maritime transits through the Taiwan Strait in the next few weeks, consistent with our long-standing approach to defending the freedom of the seas and international law,” he added.

    File image of USS Ronald Reagan pictured during an exercise with South Korean warships, via AP.

    So the strike group will linger longer as the PLA conducts unprecedented in size live fire drills, which will only increase the chances of an ‘incident’ between the two rival superpowers as Taiwan’s population continues to be on edge. 

    * * *

    Update(11:17ET): In another ominous sign signaling China intends to escalate its threatening and retaliatory military drills now encircling Taiwan, state-run Global Times has cited a source saying that a PLA aircraft carrier group with a nuclear-powered submarine has now joined the ongoing exercises off Taiwan.

    Additionally, the English-language government mouthpiece GT is now calling the five-day drill that have commenced a rehearsal for a “reunification operation” – and says that after Pelosi’s provocative and damaging visit, “exercises blockading” Taiwan are to “become routine”. 

    This as Japan’s Foreign Ministry has said Thursday evening (local time) that five missiles fired by China have landed within Japan’s exclusive economic zone (EEZ). Taiwan’s defense ministry, has meanwhile said 22 more Chinese air force jets have buzzed its airspace.

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    Further, videos of the PLA firing missiles over Taiwan are now circulating on social media, appearing to show local citizens in some locales filming and watching as if it’s a patriotic spectacle… 

    The PRC government has also released official footage of some of its latest ballistic missile launches which landed in waters off the self-ruled island…

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    Beijing is also threatening tougher sanctions to come against Taipei, in order to squeeze the pro-independence movement in Taipei. GT frames the latest economic punishment measures as follows:

    Following the Chinese mainland’s suspension of imports of several agricultural products from the island of Taiwan, which is viewed as a sort of punishing fallout from US House Speaker Nancy Pelosi’s visit, residents from the island’s agricultural and business sectors, as well as some local netizens, have expressed dissatisfaction with the secessionist Democratic Progressive Party (DPP), given the close connection between the island and the huge mainland market. 

    Starting on Wednesday, Chinese mainland customs authorities suspended the entry of citrus fruits including grapefruits, lemons and oranges, as well as two types of fish (chilled large head hairtail and frozen horse mackerel) from the island, in accordance with regulations and food safety requirements.

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    China is saying this is only the beginning of the 5-day military exercises, identifying major military assets that have joined, including the following:

    • J-20 stealth fighter jets
    • H-6K bombers, J-11 fighter jets
    • Type 052D destroyer
    • Type 056A corvette
    • DF-11 short-range ballistic missiles
    • Early warning aircraft
    • DF-17 hypersonic missiles.

    Meanwhile, the US also has serious military assets near Taiwan, including the USS Ronald Reagan carrier group…

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    * * *

    China has kicked off its latest round of war drills Thursday aimed at encircling and pressuring Taiwan in the wake of this week’s House Speaker Nancy Pelosi visit to the self-ruled island, the day after she departed and continued on her Asia tour to South Korea.

    According to China’s People’s Daily, this has included PLA command dispatching “hundreds” of fighter jets to enter airspace off the northern, southwestern and southeastern airspaces of the island, at a moment Taiwan’s defense forces are on a heightened state of alert. On Wednesday some half a dozen jets were reported as having breached the ‘median line’ separating the Taiwan Strait. Beijing is promising in essence this is only the beginning. 

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    And more alarming, China launched a series of ballistic missiles into waters off Taiwan, with some having flown over the island. “Taiwan has confirmed that mainland China launched 11 Dongfeng series missiles into waters north, south and east of the island on Thursday afternoon, a day after US House Speaker Nancy Pelosi left Taipei,” South China Morning Post reports.

    “The island’s defence ministry said the 11 DF series missiles were fired between 1.56pm and 4pm. It is the first time mainland missiles have flown over the island.” 

    Taipei’s defense ministry immediately condemned the severe provocation: “The defence ministry condemned the irrational actions to undermine regional peace,” a statement said. Taiwan further called on Beijing to be “self-restrained”.

    Via The Telegraph/@Military_News4

    Taiwanese media outlets are reporting of the unprecedented missile flyover of the island:

    People’s Liberation Army (PLA) Eastern Theater Command Spokesman Shi Yi that afternoon announced that the PLA’s Eastern Theater Command Rocket Force launched a “multi-regional and multi-model exercise” in the waters off the coast of eastern Taiwan, according to China’s state-run TV broadcaster CCTV. Shi claimed that the guided missiles all “hit their targets accurately.”

    Map source: The Telegraph

    Already there has been a ‘close call’ incident between the two militaries:

    Earlier, it [Taiwan’s military] revealed suspected Chinese drones had flown above the Kinmen Islands, Taiwanese territory off China’s southeastern coast, and it had fired flares to drive them away.

    Major General Chang Zone-sung of the military’s Kinmen Defense Command told the Reuters news agency that the Chinese drones came in a pair and flew into the Kinmen area twice on Wednesday night, at about 9pm (13:00 GMT) and 10pm (14:00 GMT).

    Warning flared were then fired: “We immediately fired flares to issue warnings and to drive them away. After that, they turned around. They came into our restricted area and that’s why we dispersed them,” the Taiwanese general said.

    While China had quickly started snap drills as Pelosi’s Air Force plane – reportedly with US fighter jet escort – landed in Taipei earlier this week, Thursday marks the start of more expansive live-fire drills around the whole island, slated to last five days.

    The next five days will include live-fire drills and missile tests surrounding the island in these reported locations, as detailed in Chinese state media publications…

    Meanwhile, China is furious over a prior day Group of Seven (G7) statement condemning its military drills. The G7 warned Beijing not to use Pelosi’s visit as “pretext for aggressive military activity in the Taiwan Strait”.

    In protest, China’s Foreign Minister Wang Yi has within the last hours canceled what was to be a face-to-face summit with his Japanese counterpart. At the same time increased cyberattacks are being reported against Taiwan government websites in local media.

    Tyler Durden
    Thu, 08/04/2022 – 21:55

  • Sinema Signs Off On Reconciliation Bill After Dems Agree To Protect Private Equity Billionaires
    Sinema Signs Off On Reconciliation Bill After Dems Agree To Protect Private Equity Billionaires

    Arizona Senator Kyrsten Sinema – the lone Democrat holdout on the Biden administration’s revamped reconciliation bill – has finally signed off on it, after Democrats agreed to preserve the so-called carried interest loophole that allows investment managers (like her former bosses) to shield the majority of their income from higher taxes.

    In fact, Sinema told donors at a Wednesday night fundraiser that it makes ‘no sense’ to squeeze the private-equity industry that will finance various projects for the roughly $1 trillion infrastructure and $280 billion semiconductor bills that were signed into law earlier, according to the Wall Street Journal, citing a lobbyist who attended.

    “We have agreed to remove the carried interest tax provision, protect advanced manufacturing, and boost our clean energy economy in the Senate’s budget reconciliation legislation,” Sinema said in a statement, adding that she would move forward with the legislation following a review by the Senate’s parliamentarian – who will rule on whether elements such as domestic content requirements for cars eligible for EV tax credits, caps on insulin, and other provisions, meet strict budget rules.

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    That said, she promises to someday crack down on the carried interest loophole she so vehemently fought for.

    “Following this effort, I look forward to working with Senator Warner to enact carried interest tax reforms, protecting investments in America’s economy and encouraging continued growth while closing the most egregious loopholes that some abuse to avoid paying taxes,” she said, the Journal reports.

    Centrist Sen. Joe Manchin (D., W.Va.) and Senate Majority Leader Chuck Schumer (D., N.Y.) announced a deal last week to raise $739 billion in new revenue and spend $433 billion on climate, energy and healthcare programs over 10 years, reviving a package they thought was dead. Now, Democrats are trying to keep the bill on its narrow track to passage this month through the 50-50 Senate.

    Ms. Sinema had previously opposed raising taxes on the carried-interest income of private-equity managers, though she also helped craft many other elements of the bill during talks last year. A spokeswoman for Ms. Sinema had previously said the senator was studying the bill. -WSJ

    And while the Biden administration has promised that the “Inflation Protection Act” won’t increase taxes on those making under $400,000, BofA (and many, many others) say fat chance.

    The deal with Sinema also includes a new excise tax on stock buybacks that’s expected to raise more than the $14 billion that would have been raised if the carried-interest loophole had been eliminated.

    The deal struck by Sinema, a pivotal Democratic vote in the Senate, would pare back a proposed 15% corporate minimum tax by creating an exemption for depreciation tax deductions. This change was urged by manufacturers.

    The estimated $100 billion revenue hole created by this new exemption would be made up for with a new 1% excise tax on stock buybacks according to people familiar with the talks. 

    The excise tax on companies when they buy back their own stock would raise roughly enough to cover the tax revenue that is forgone by nixing the carried interest provision and narrowing the corporate minimum tax. –Bloomberg

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    Sinema’s change of heart came after a lengthy discussion with Sen. Joe Manchin (D-WV), who along with Sinema had been holding up previous iterations of the Democrats’ massive reconciliation packages.

    Below: Sinema’s statement, and one from Senate Majority Leader Chuck Schumer (D-NY).

    The parliamentarian’s review has reportedly been underway and could drag into the weekend – after which Democrats will face an amendment process called a vote-a-rama, in which lawmakers can “offer and force votes on as many amendments as they can physically sustain in one sitting,” reads the Journal, which adds that these can last all night.

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    Tyler Durden
    Thu, 08/04/2022 – 21:54

  • Tulsi Gabbard Says Biden Admin "Promoting Child Abuse" By Pushing "Gender-Affirming Care"
    Tulsi Gabbard Says Biden Admin “Promoting Child Abuse” By Pushing “Gender-Affirming Care”

    Authored by Lorenz Duchamps via The Epoch Times (emphasis ours),

    Tulsi Gabbard, a former Democratic presidential candidate who also served as a Hawaiian congresswoman, criticized the Biden/Harris administration for “promoting child abuse,” accusing the White House of harm by releasing statements that endorse the use of puberty blockers and irreversible surgeries for children.

    Democratic presidential candidate U.S. Representative Tulsi Gabbard (D-HI) holds a Town Hall meeting on Super Tuesday Primary night in Detroit, Mich. on March 3, 2020. (Bill Pugliano/Getty Images)

    In a video posted on social media, Gabbard said despite the Food and Drug Administration’s (FDA) warning that gonadotropin-releasing hormone (GnRH) agonists—also referred to by many as puberty blockers—can cause serious health risks for children, the Biden/Harris administration continues the advocacy of what it describes as “gender-affirming health care,” which gives children easy access to sex change treatments.

    “The FDA made a disturbing, but not at all surprising announcement just a few days ago about children’s health,” Gabbard declared. “Now, if you haven’t heard about it, or if you’ve missed it, it is because the mainstream media and the Biden/Harris administration have been completely silent on it.”

    Gabbard further explained that the FDA’s warning announced that the blockers potentially cause a series of symptoms in children—which include headaches, pressure buildup around the brain, and vision loss.

    “Unfortunately, at almost the exact same time the FDA issued this warning, Biden/Harris administration officials were making public statements actively promoting the use of puberty blockers and irreversible surgeries for kids,” Gabbard said.

    “Now let’s be clear: this administration is dangerously promoting child abuse,” she concluded.

    In early July, the FDA announced that puberty blockers have a risk of pseudotumor cerebri developing in children who take GnRH agonists.

    Pseudotumor cerebri, or idiopathic intracranial hypertension, is when the fluid around the brain and spinal cord builds up in the skull for no obvious reason, causing high pressure that affects the brain and the nerve in the back of the eye, the optic nerve.

    Gabbard’s remark came several weeks after Rachel Levine, the Biden administration’s assistant secretary for health and the first transgender federal official to be confirmed by the Senate, called for laws to “support and empower” youths “to get gender affirmation treatment.”

    Rachel Levine, nominee for assistant secretary of Health and Human Services, testifies before her confirmation hearing of the Senate Health, Education, Labor, and Pensions committee in Washington on Feb. 25, 2021. (Caroline Brehman/POOL/AFP via Getty Images)

    Levine, who appeared on MSNBC’s “Andrea Mitchell Reports,” said transgender youth suffer “significant harassment and bullying” and have “more mental health issues” than regular children, claiming puberty blockers are “life-saving, medically necessary, age-appropriate and a critical tool for health care providers.”

    Read more here…

    Tyler Durden
    Thu, 08/04/2022 – 21:40

  • Argentina Vows Not To Go Full Weimar, Will Stop Printing Money Amid 60% Inflation
    Argentina Vows Not To Go Full Weimar, Will Stop Printing Money Amid 60% Inflation

    Hours after Argentina’s new Minister of Economy Sergio Massa was sworn into office, he pledged to stop printing money in an attempt to halt a spiraling currency crisis which has seen inflation hit 60% – and has been projected to reach 90% by the end of this year.

    According to the Buenos Aires Times, Massa’s economic roadmap also focuses on boosting exports, reducing the country’s fiscal deficit, and refilling the central bank’s severely depleted reserves.

    Protests have erupted across the country over the last several months, as citizens are demanding that their center-left government reinstate various subsidies, and reconsider cutting more – such as the country’s notorious welfare program, which has grown to 22 million Argentinians receiving assistance amid a 43% unemployment rate.

    The country’s deteriorating economic picture has left it cut off from international capital markets as the Fernández administration has relied on printing money to cover its chronic fiscal debt.

    As the Epoch Times noted earlier in the week, the country’s state funded programs extend to nearly every aspect of the economy, from wages to utilities, education, and health care.

    Argentina already spends an estimated 800 million pesos per day—a sum of more than US$6 million—on state benefit programs.

    Concurrently, inflation in the South American nation hit 58 percent in May and soared above 60 percent in July. By comparison, national inflation was just over 14 percent in 2015.

    Harry Lorenzo, chief finance officer of Income Based Research, told The Epoch Times the spending habits of Argentina’s government are at the root of the escalating problem.

    “The Argentine government has been grappling with a collapsing economy for some time now. The main reason for this is the government’s unsustainable spending, which has been funded in part by generous welfare programs,” Lorenzo explained.

    While the Peso’s official spot price has weakened to over 130/USD…

    The grey market ‘blue dollar’ for US dollars is trading dramatically weaker at around 300/USD…

    via bluedollar.net

    “Magic doesn’t exist,” Massa exclaimed to reporters in Buenos Aires. “We have to confront inflation with determination.”

    The government will finance its budget by reducing its deficit or via private lending. The country is considering four loan offers by three international banks and a sovereign wealth fund, he said, without providing a figure of the potential deal.

    Although light on specifics, Massa committed to meeting the government’s primary deficit target this year, a key pillar of its US$44 billion program with the International Monetary Fund. Massa said he spoke to IMF staff Wednesday to discuss the program’s future. An IMF spokesperson said in a statement that its staff spoke to Massa about implementing the program. -Buenos Aires Times

    Meanwhile, and perhaps related to Massa’s swearing-in, crypto exchange Binance has partnered with Mastercard to launch a ‘cryptocurrency power card’ for customers in Argentina. It will be used to spend digital currency on everyday items, according to a press release.

    The Latin American country will be the first to see this product available on its territory. At the time of writing, Binance claims the product is currently in beta; it will become “widely available” for all users in Argentina over the coming weeks.

    The Binance Card is issued by Credencial Payment, the press release revealed. Every user in the country will be available for the product as long as they have completed the exchange Know Your Customer (KYC) process and presented a valid national ID. –Bitcoinist

    According to Mastercard Latin America EVP Walter Pimenta, “Our work with digital currencies builds on our strong foundation to enable choice and peace of mind when people shop and pay. Together with our partners, Mastercard has been leading the payments industry in enabling entry to this exciting new world, helping bring millions of additional users into crypto and other digital assets in a safe and trusted manner.”

    Tyler Durden
    Thu, 08/04/2022 – 21:20

  • DOJ Sues Ex-Trump Adviser Peter Navarro Over White House Emails
    DOJ Sues Ex-Trump Adviser Peter Navarro Over White House Emails

    Authored by Rita Li via The Epoch Times (emphasis ours),

    The Justice Department has sued former White House trade adviser Peter Navarro for allegedly violating a record-keeping law, asking the latter to turn over private emails for while he was working for former President Donald Trump.

    Then-White House National Trade Council Director Peter Navarro is seen outside the White House in Washington on Oct. 8, 2019. (Chip Somodevilla/Getty Images)

    “Mr. Navarro has refused to return any Presidential records that he retained absent a grant of immunity for the act of returning such documents,” the lawsuit (pdf) says, adding that the ex-Trump aide “is wrongfully retaining Presidential records that are the property of the United States, and which constitute part of the permanent historical record of the prior administration.”

    Filed on Aug. 3 in a federal court in Washington, the document alleged that Navarro used “at least one non-official email account” while working in the White House but failed to copy those emails or messages constituting Presidential records to his government email account within 20 days as required by the Presidential Records Act.

    The National Archives and Records Administration (NARA) was also supposed to receive them before or shortly after Trump left office but is yet to, according to prosecutors, who said between 200 and 250 of the emails on Navarro’s private account should have been collected.

    The department further accused Navarro of declining to turn in the retained records without a grant of immunity. Navarro’s lawyers refuted such claims, arguing that their client “has never refused to provide records to the government.”

    “As detailed in our recent letter to the Archives, Mr. Navarro instructed his lawyers to preserve all such records, and he expects the government to follow standard processes in good faith to allow him to produce records. Instead, the government chose to file its lawsuit today,” his attorneys told The Hill in a statement.

    Reaching for Trump

    The latest case comes two months after a grand jury indicted Navarro on June 3 for refusing to give documents and testimony early this year to the House select committee investigating the Jan. 6 Capitol breach in 2021.

    The former White House trade adviser had pleaded not guilty on June 17 to two misdemeanor counts of contempt of Congress, citing executive privilege due to his former position at the White House under the Trump administration, before rejecting a plea offer to a single count in July.

    Bennie Thompson (D-Miss.), chairman of the Jan. 6 committee, rejected Navarro’s claims, claiming that privilege belongs to the president but not a White House official, despite the emails involving the former president.

    Navarro’s trial is set for Nov. 17.

    Trump’s attorneys have previously argued that former White House officials shouldn’t comply with congressional subpoenas because the requested information is protected by Trump’s executive privilege.

    However since January, NARA has handed documents and records from the Trump administration’s time in office to the Jan. 6 House Committee, despite Trump’s attempts to ask the Supreme Court to block the release.

    Tyler Durden
    Thu, 08/04/2022 – 21:00

  • "Friendshoring" Trend Sees Companies Moving Ops To Dodge Tensions And Trade Wars
    “Friendshoring” Trend Sees Companies Moving Ops To Dodge Tensions And Trade Wars

    Wary of mounting tensions surrounding out-of-favor countries like China and Russia, multinational corporations are shifting operations to places that present less geopolitical risk.  

    The trend has been labelled “friendshoring.” While that’s a play on “offshoring,” this isn’t about companies moving operations back to the United States or Europe, but rather seeking foreign alternatives that retain the benefit of low labor costs but with less international controversy.  

    For now, the conversation is principally about China. “Every company that I speak to at the moment is engaged in rethinking their [China-focused] supply chains,” Tony Danker, head of the Confederation of British Industry, told the Financial Times, “because they anticipate that our politicians will inevitably accelerate towards a decoupled world from China.”

    Vietnamese workers on a Nike production line near Ho Chi Minh City (AP/Richard Vogel)

    Congress is actively working to accelerate the friendshoring trend: The $433 billion climate and tax bill that’s grinding toward Senate approval includes a tax credit for electric vehicles assembled in North America — not just the United States. That’s sparked some grumbling from the omitted EU.

    China and the United States already had an increasingly adversarial relationship before this week’s saber-rattling over House speaker Nancy Pelosi’s visit to Taiwan. A long-simmering trade war heated up on on June 21, when the Uyghur Forced Labor Prevention Act (UFLPA) started imposing a guilty-til-proven-innocent regime that bars all imports from China’s Xinjiang province unless businesses prove their products are not made with forced labor.

    Geopolitical and trade-war tensions aren’t the only factor pushing multinationals away from China. The country’s over-the-top zero-Covid policies have disrupted supply chains, and China has been known to target foreign companies in a variety of ways, to include encouraging Chinese consumer boycotts of businesses that have somehow managed to earn the Chinese government’s ire. 

    Demographics are a factor too. The youngest generation is the country’s most-educated ever, and there’s a growing stigma attached to vocational schooling and factory work — a dynamic that puts upward pressure on labor costs. Gen Z Chinese are also increasingly gravitating toward working for the government or state-run companies.  

    None of this is to suggest multinationals will abandon China altogether. For many, this is an exercise in diversifying risks. Those calculations are made more difficult by uncertainty over who may fall out of favor with reckless, sanction-happy Western governments in the future. 

    There could be a downside for consumers: To the extent friendshoring moves some operations to places more expensive than China, the trend could nudge prices higher.   

    A Rabobank analysis of friendsharing projects that chief beneficiaries will include countries like Vietnam, India, Brazil, Bangladesh, Indonesia, Mexico, Turkey, Egypt and South Africa. However, expect both Eastern and Western European countries will be in on the action too — with the latter most likely to see new high-tech presences.

    Foreign Policy provides examples of some recent corporate moves:  

    Apple has begun moving manufacturing from China to Vietnam, where its AirPods Pro 2 are now likely to be produced. Two years ago, Samsung moved its Chinese manufacturing to Vietnam. Hasbro has moved its Chinese production to India and Vietnam. In July, Volvo announced that it would open its first European factory in 60 years, in Slovakia. (The Swedish carmaker is owned by Geely of China.) Apparel and footwear companies such as Adidas, meanwhile, have shifted production to Vietnam, though this was primarily motivated by cost.

    Friendshoring beneficiaries have to perform their own careful calculations. As Alan Beattie notes at the Financial Times, “Few countries will want to be an immutable part of a U.S. friendshoring gang if it opens them up to strategic and commercial retribution from Beijing.” 

    Tyler Durden
    Thu, 08/04/2022 – 20:40

  • California Announces Fifth Case Of Pediatric Monkeypox In US
    California Announces Fifth Case Of Pediatric Monkeypox In US

    Authored by Caden Pearson via The Epoch Times (emphasis ours),

    A fifth child is presumed to have monkeypox in the United States since the country’s first two pediatric cases were reported in July.

    Test tubes labeled “Monkeypox virus positive and negative” are seen in this illustration taken on May 23, 2022. (Dado Ruvic/Reuters)

    California health officials announced the latest presumptive pediatric monkeypox case in a Long Beach child on Tuesday, four days after Indiana health officials confirmed that two children in that state also tested positive.

    Last month, another California toddler tested positive for monkeypox as well as an infant resident of a foreign country who was passing through Washington D.C., bringing the total U.S. pediatric cases to five.

    The Long Beach Department of Health and Human Services (DHHS) is carrying out a contact tracing investigation and told The Epoch Times it had no further information about those efforts since Tuesday.

    “Preliminary test results indicate that the child has tested positive for orthopoxvirus,” the Long Beach DHHS said in a statement. “Additional testing will be performed at the Centers for Disease Control (CDC) to confirm monkeypox.”

    The child was symptomatic and is now recovered, according to the Californian department, which said, in light of the pediatric diagnosis, that monkeypox can also be spread by “holding and feeding.”

    “This is a reminder that everyone, regardless of age or sexual orientation, can get monkeypox if they come into contact with the virus,” Long Beach DHHS said.

    [ZH: CDC Director Rochelle Walensky was a little more specific last week – the children were reportedly “gay community adjacent.”]:

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    Pediatric Cases in Indiana

    The new pediatric case in California comes days after the Indiana Department of Health (IDOH) reported two pediatric cases among its total of 45 new cases confirmed between June 18 and July 28.

    IDOH said it won’t release additional information about the cases due to patient privacy.

    “Like many other states, Indiana has seen an increase in monkeypox cases over the past month,” State Health Commissioner Dr. Kris Box said in a statement.

    “Monkeypox does not easily spread through brief casual contact, but it’s important to remember that anyone can be affected if they are a close contact of a positive case.”

    She encouraged residents who think they’ve been exposed or who develop symptoms to contact a healthcare provider.

    A section of skin tissue, harvested from a lesion on the skin of a monkey, that had been infected with monkeypox virus, is seen at 50X magnification on day four of rash development in 1968. (CDC/Handout via Reuters)

    In guidance, the CDC has said that children with exposure to people with monkeypox may be eligible for post-exposure prophylaxis (PEP) with vaccination, immune globulin, or antiviral medication.

    PEP is commonly known for its use as an emergency antiviral medication to prevent HIV infection and is taken largely by gay and bisexual men. However, the first-line treatment for children is the antiviral Tecovirimat, commonly used for smallpox.

    Household Spread

    In the 2022 outbreak, monkeypox has primarily been spreading through the sexual activity of gay and bisexual men but it is not typically considered by health officials to be a sexually transmitted disease.

    The CDC and World Health Organization (WHO) have said the virus can also spread through contaminated bedding and clothing.

    With the fifth child now contracting monkeypox, presumably within a household, Long Beach DHHS has named other household items that could spread the virus, such as cups, towels, and utensils.

    For this reason, the department has said that people with monkeypox should avoid contact with household members and follow the CDC’s guidance for limiting transmission in the home.

    “With children, people are advised to minimize the number of caregivers and limit interaction between siblings, including sharing toys, clothing, linens and bedding. It is also important for the infected person to limit interactions with pets in the home,” Long Beach DHHS said.

    The CDC has provided extensive guidance on household infection control to inform people with monkeypox around how to isolate, including not engaging in “sexual activity that involves direct physical contact.”

    Much like with COVID-19, people with monkeypox should isolate away from other household members, and clean shared spaces appropriately until such as time when any “rash has fully resolved, the scabs have fallen off, and a fresh layer of intact skin has formed.”

    Spread Beyond LGBT Community

    The rise to five pediatric cases comes after a senior WHO official warned that monkeypox would likely spread beyond the LGBT population.

    Dr. Catherine Smallwood, a senior emergency officer at the WHO, told CNBC in July that “we should not expect” monkeypox to remain only within the demographic of “men who have sex with men.”

    Experts and health officials are still coming to grips with monkeypox’s evolution from an endemic disease limited mostly to Africa, where it is spread by animals, to the current vector of the 2022 outbreak, which is spread primarily via the sexual activity of gay and bisexual men, according to a major peer-reviewed study.

    Dr. Anthony Fauci, the White House’s medical adviser and director of the National Institute of Allergy and Infectious Diseases, said health officials needed to come to a better scientific understanding of the current monkeypox outbreak.

    He also said swift interventions and outreach to the LGBT community, which is most at risk from the virus, was “absolutely” needed to combat the virus.

    Monkeypox case numbers in the United States are currently over 5,800 since the first case emerged in May. Last month, the WHO declared the monkeypox outbreak a public health “emergency.”

    DeSantis Criticizes ‘Emergency’ Declarations

    California, Illinois, and New York have declared states of emergency in response to the outbreak.

    Florida Gov. Ron DeSantis, whose state has the fifth highest number of monkeypox cases as of Aug. 4, has said he will not follow suit.

    The Republican governor accused other elected officials of driving a scare campaign.

    “Do not listen to their nonsense … I’m so sick of politicians, and we saw this with COVID, trying to sew fear into the population,” he told reporters on Wednesday.

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    He added: “We’re not going to go back to like Fauci in the 80s where he was trying to tell families they were all going to catch AIDs watching TV together.”

    DeSantis said that Florida’s response to monkeypox won’t include a “fear” campaign to “rile people up and try to act like people can’t live their lives as they’ve been normally doing.”

    “You see some of these states declaring states of emergency. They’re gong to abuse those emergency powers to try to restrict your freedom. I guarantee you that’s what will happen. We saw it with COVID,” he added.

    Tyler Durden
    Thu, 08/04/2022 – 20:20

  • US NatGas Rebounds As Major Texas LNG Terminal Set For Fast Reopening
    US NatGas Rebounds As Major Texas LNG Terminal Set For Fast Reopening

    US natural gas prices surged Wednesday and continued increasing Thursday morning after the Freeport LNG Terminal in Quintana, Texas, received regulatory approval to reopen in October.

    The Freeport plant, which closed in June due to an explosion, received regulatory approval from the Pipeline and Hazardous Materials Safety Administration to ensure the plant can “safely and confidently” resume operations of its liquefaction plant, reported Bloomberg. 

    “Those initial operations are expected to consist of three liquefaction trains, two LNG storage tanks and one LNG loading dock, which the company believes will enable delivery of approximately 2 BCF per day of LNG, enough to support its existing long-term customer agreements,” the company said.

    The shuttering of the facility in late June reduced total liquefied natural gas export capacity by 2B cf/day, or 17% of total US LNG capacity, much of which was sent to Europe. 

    “Freeport LNG is one of seven LNG export facilities operating in the United States,” the EIA said.

    “The facility shipped its first LNG cargo in September 2019, and it was the fifth US LNG export terminal to come online in the Lower 48 states.”

    The news surprised traders as the front-month NatGas contract for September delivery has risen nearly 11% to $8.37/mmBtu since 1100 ET Wednesday (but wqas dragged a little lower today as recession fears appeared to drag down the entire energy complex)…

    “This is likely a little faster, and a little stronger [in terms of exports] than the natural-gas markets were expecting,” NatGasWeather wrote in a note to clients. 

    Brayton Tom, a senior risk manager for energy at StoneX Group, said the “partial restart is bigger than previously expected.”  

    The prospects of reopening the terminal should keep a bid underneath NatGas prices as LNG shipments to Europe will restart in the next few months. This will pressure US inventories and generate concerns about tight domestic supplies ahead of winter. 

    Inversely, EU NatGas should move lower, though that doesn’t appear to be the case, probably because the Russians slashed Nord Stream 1 pipeline capacity to 20%. 

     

    Tyler Durden
    Thu, 08/04/2022 – 20:00

  • Inversion, Inventory, & Incongruity
    Inversion, Inventory, & Incongruity

    Authored by Peter Tchir via AcademySecurities.com,

    Today we will focus on yield curve “inversion” (which doesn’t seem to be getting that much attention), “inventories” (which I think pose a threat to any ongoing growth for the economy), and finally we explore that it might be “incongruous” to wish for lower oil prices in the near-term. Incongruous might not be the right word, but it was difficult coming up with three “I” words.

    Inversion

    Curves have been flattening/inverting to levels (that are historically important) with less fanfare than I would have expected. Sure, the doomers have latched on to it, but it doesn’t seem to be at the forefront of conversations and has garnered minimal media attention relative to where we are.

    The 2-year versus 10-year spread is inverted and while the 3-month versus 10-year spread isn’t inverted, it has moved dramatically in the past few weeks and has the potential to get there.

    The inversion in early 2000 coincided with the bursting of the internet “bubble”. There was a prolonged decline in markets, which to be honest, were also hurt by the attacks on 9/11 and frauds at Enron and WorldCom.

    Curves were inverted ahead of the peak in financial markets, but that peak occurred right as some large institutions had to cut dividends and guidance due to their mortgage portfolios. Lots of other factors contributed to the GFC and it didn’t really play out for almost another year (stocks rallied back into the fall, then again when Bear Stearns was “saved” in early 2008, only to finally succumb later that year and in the first part of 2009).

    The 2019 to 2020 period is tricky. The inversion in the summer of 2019 did precede a sell-off, but there is no way the market was anticipating a COVID shutdown. April 2020 saw inversion, but I think the Fed, the Treasury, and even D.C. realized that they had to act quickly and aggressively. We saw strong initial “emergency” measures followed up by more and more stimulus. Maybe the fact that we avoided prolonged equity market issues in 2020 is why this recent inversion isn’t getting much attention (the boy who cried wolf, etc.), but I am not sure that D.C. is prepared to act like they did during COVID or that the Fed can be as accommodative (as they are dealing with inflation, at least some of which can be tied to the aggressive responses to the threat of COVID).

    I’m not alarmed, but it seems strange that equities have been able to ignore the recent inversion and a 20 bps rise in 10-year yields in less than 48 hours (albeit the 30-year “only” moved 11 bps in that time).

    Certainly, inversion occurred before problems really hit markets back in the early 2000’s/pre-GFC and 2020 amounted to a great buying opportunity, but things don’t “feel” quite right to me here.

    Inventories

    I continue to fixate on inventories.

    Inventories, in an ideal world, follow a nice pattern. Companies see demand, they build/acquire products, and they then sell those products. Since last summer, inventories have been building month after month. Some of that inventory build can be attributed to getting ahead of supply chain issues (including Just in Case inventories from Just in Time inventories), but some certainly can be blamed on less consumption.

    Even with companies wanting more robust inventories, we seem to have moved to a very high cushion.

    On the ISM side of things, we’ve had inventory builds contribute to the data for extended periods in the past (like 2018 until early 2019). The peak then was 55 (as opposed to 57.3 recently) and many months were barely above 50 (as opposed to a recent low of almost 52).

    Additional concerns about inventory:

    • Are we done with back orders getting filled? Or, will we see inventories continue to build as orders that were made when lack of inventory due to supply chains seemed like a bigger risk than consumer demand slowing?

    • How many products are “99%” completed, just waiting for a missing component? That missing piece could be a ball bearing, or a semiconductor, or some piece of customized plastic, it doesn’t really matter. What matters is if there are a lot of “almost finished” goods that will get converted into finished goods as those missing components arrive, will we have another surge in inventories? Or has that already happened?

    I am not only concerned about current levels of inventories, but that we are still on a path (due to prior orders and missing components) that will increase inventories further before they can correct.

    The Incongruity of Wishing for Low Oil Prices

    For the past few months markets, politicians, and the media have been desperate for lower oil prices. All that I can think is, be careful what you wish for.

    I use the 6-month forward WTI contract to smooth things out, but typically, as oil goes up, stocks do well (and vice versa). That was the case from 2016 until just recently.

    The same pattern holds true for the 2003 to 2011 period, with a couple of short exceptions.

    Even from 1999 until 2002 the pattern held up pretty well. This period included 9/11, which many of us lived through and lost friends, and when the U.S. military conducted operations across the globe. Many of my teammates at Academy served in those conflicts and embracing post 9/11 veterans is a huge part of Academy’s Mission (as we pass 100 employees in total, ~49% of them are veterans, many of whom have been wounded in service). In any case, I’m not sure we should cheer low oil prices.

    Bottom Line

    As discussed in this weekend’s I Don’t Care, I Love It! T-report, there is a bull case out there. It is also difficult to fight TINA and FOMO in an illiquid and volatile market, but as Fed speaker after Fed speaker seems intent on hammering home the inflation fight, there is increasingly more to worry about.

    Jobs are also a concern, but we will know more after Friday’s NFP.

    Tyler Durden
    Thu, 08/04/2022 – 19:40

  • Riot Blockchain Made $9.5 Million In Credits By Shutting Down Bitcoin Mining Amidst Texas Heat Wave
    Riot Blockchain Made $9.5 Million In Credits By Shutting Down Bitcoin Mining Amidst Texas Heat Wave

    Riot Blockchain earned a stunning $9.5 million in credits in the month of July – all for just shutting down its mining rigs at its Texas facility while the region faced a historic heat wave and energy was at a premium.

    The value of the credit they are going to receive is about that of 439 bitcoin, Bloomberg reported this week. Riot also mined 318 coins during the month, the report says. The credits can be used against the company’s power usage in the future.

    Riot sports a 750 megawatt facility in Texas and is currently in the midst of building another 1 gigawatt site in the same state. In Texas, almost all bitcoin miners were forced to shut down their rigs as crushing heat hit the state in early July. 

    The heat wave caused electricity prices to spike and made most bitcoin mining operations unprofitable. 

    Recall, we wrote in early summer about how some public oil companies were joining forces with bitcoin miners to help re-shape the industry. 

    One of the world’s largest industries – oil and gas – is converging with magic internet money infrastructure, we noted – but bitcoin’s prolonged market selloff has taken some of the shine off of these monumental partnerships. Some cryptocurrency traders are even facetiously asking if energy will be a new bullish narrative for Bitcoin, bringing wind to fill its metaphorical sails as the leading cryptocurrency sits over 50% below its record price highs from late 2021.

    Jokes aside, the “energy narrative” for bitcoin mining is real and gaining momentum as a growing list of mining companies and energy producers join forces. Assessing the short-term price implications of these partnerships are well outside the scope of this article, but the long-term benefits for bitcoin mining as an industry and the broader bitcoin economy are enormous.

    Our article from May overviews the partnerships that are leading the merge between bitcoin mining and oil companies, and it offers some summary analysis into the specifics of why these corporate unions matter.

    Tyler Durden
    Thu, 08/04/2022 – 19:20

  • Facebook To Shut Down Live Shopping Feature For Retailers
    Facebook To Shut Down Live Shopping Feature For Retailers

    By ChainStoreAge

    Live shopping events on Facebook are going to do a disappearing act.

    The social media network said it is shutting down its live shopping feature and shifting its focus to Reels. The company announced the news in a blog post in which it said that, starting on October 1, “you will no longer be able to host any new or scheduled Live Shopping events on Facebook.” 

    The company noted that Facebook Live will still be available to broadcast live events, but “you won’t be able to create product playlists or tag products in your Facebook Live videos.”

    Facebook launched livestream video shopping some two years ago. The feature was designed to give creators and brands an interactive way to sell items, connect with viewers and reach new customers.

    The company has since expanded the feature with new options. Last summer, for example, it launched a new promotion called Live Shopping Fridays,” which featured beauty and fashion brands such as Abercrombie & Fitch, Clinique and Sephora.

    In announcing its decision to scale back live shopping, Facebook cited consumers changing habits.

    “As consumers’ viewing behaviors are shifting to short-form video, we are shifting our focus to Reels on Facebook and Instagram, Meta’s short-form video product,” the company stated.

    Tyler Durden
    Thu, 08/04/2022 – 19:00

  • Watch: Radical Shia Group Storms, Briefly Takes Over, Azerbaijan Embassy In London
    Watch: Radical Shia Group Storms, Briefly Takes Over, Azerbaijan Embassy In London

    A London-based Shia Muslim organization has stormed and briefly taken over the embassy of Azerbaijan in the UK capital, the government of Azerbaijan has confirmed, with local police announcing that eight men have been arrested. 

    The group, called the Mahdi Servants Union, was seen on the embassy balcony waiving their distinctive flag at the embassy located in Kensington neighborhood. The men have reportedly been charged with trespassing and “criminal damage”. Social media videos showed the group scrawling protest messages written in Arabic on the external embassy walls in the rare incident, with a crowd of onlookers beholding the mayhem from the street…

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    The Daily Mail describes of the scene, “Some were using head dresses, or a keffiyeh, to cover their faces as they chanted messages to the crowds who had gathered below, before replacing the Azerbaijani flag with their own.”

    Apparently the standoff and brief embassy siege ended when UK police stormed the compound. “One video showed the building on Kensington Court cordoned off as several police officers with helmets and shields prepared to storm inside,” the report continues. A Met Police statement said:

    “Police were called at approximately 16:30hrs on Thursday, 4 August to the Azerbaijan Embassy in Kensington to reports of protestors who had entered the premises.”

    “Officers attended and engaged with those present. Eight men were arrested on suspicion of trespass and criminal damage.”

    There appeared to be clashes with police before the embassy was taken back, and the official Azerbaijan flag subsequently raised…

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    The Mahdi Servants Union as a hardline religious group focused on Shia affairs has long condemned Azerbaijan government authorities for “oppression” against Muslims. Though the country remains majority Shia, it is largely secular in its polices and orientation when compared to places like Iran or Saudi Arabia. The group is led by Shia cleric Yasser Al Habib.

    Some commentators have dubbed the group a “cult” and say that they don’t have Iranian backing:

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    While it’s unclear whether the protest and embassy takeover was connected to broader geopolitical events, there’s been longtime border tensions and military build-up between Iran and Azerbaijan along their shared border.

     

    Tyler Durden
    Thu, 08/04/2022 – 18:40

  • Suicide Rates Among US Army Soldiers Highest In More Than 80 Years
    Suicide Rates Among US Army Soldiers Highest In More Than 80 Years

    Authored by Autumn Spredemann via The Epoch Times (emphasis ours),

    The U.S. Army lost 176 active duty soldiers to suicide in 2021, figures show.

    A member of the U.S. Army places American flags on a grave at Arlington National Cemetery on May 25, 2017. (Brendan Smialowski/AFP via Getty Images)

    According to combined data from the Defense Suicide Prevention Office and a study published in the Journal of the American Medical Association, that’s the highest number of active duty Army member suicides on record since 1938.

    Suicide rates within all military branches have continued to rise since 2015.

    Compounding this trend is the number of U.S. soldiers and veterans who have taken their own life in post-9/11 wars.

    Members of the 182d Infantry Regiment load their weapons with live ammunition before heading into the field to train at US Fort Dix in New Jersey on May 16, 2022. (Joseph Prezioso /AFP via Getty Images)

    Brown University published a study indicating that 30,177 active duty members and veterans have committed suicide. By comparison, the number of soldiers actually killed in post-9/11 war operations is 7,052.

    Some experts say physically and mentally demanding industries like the military put people at an elevated risk for developing Post Traumatic Stress Disorder (PTSD). It’s one of the few mental health disorders that can be linked to a specific event.

    “PTSD can also occur when you experience constant high-stress situations,” Dr Danielle McGraw told The Epoch Times.

    McGraw is a licensed clinical psychologist and the owner of Flourish Mental Wellness in Scottsdale, Arizona. She has also worked with both active and veteran military members struggling with PTSD.

    She says when people are feeling stressed, it can lead to feelings of hopelessness about their situation, which can spiral into thoughts of self-harm.

    Another contributing factor is feelings of shame, which often factor into someone’s decision to take their own life.

    Feeling Like A Pawn

    U.S. Army veteran Jonah Nelson told The Epoch Times that discussion of military suicides is often a shunned topic.

    A former Army engineer, Nelson was deployed to Iraq and Saudi Arabia during the U.S. Gulf War operations Desert Shield and Desert Storm in the early 1990s.

    He wasn’t surprised to learn that his service branch’s active duty member suicide rates are at a historic high.

    “As of now, they don’t have any reliable method of fixing us,” he said.

    Further, Nelson noted that soldiers are often put in situations that can take a harsh toll on mental health.

    He remembers how members of his platoon had to extract human remains from bombed-out vehicles. Nelson says the soldiers involved returned to the base at the end of the day looking “different.”

    “I guess you just don’t talk about that kind of stuff,” he said.

    Mental health experts have heard concerning commentary from other military veterans in recent years.

    Dr Tracy Latz is an integrative psychiatrist and author with 35 years of experience dealing with suicide risk and PTSD suffering patients. She told The Epoch Times feelings of a lack of purpose also contribute to the problem.

    “Veterans I have seen over the past few years report feeling like they and their comrades were used primarily as pawns for governmental political power rather than feeling [a] sense of real purpose in their duties.”

    Red Flags

    Compounding this, service members’ isolation and loneliness while stationed overseas or deployed to combat zones can be crushing.

    A Blue Star Families Military Lifestyles survey from 2021 shows eight out of 10 active duty respondents have been separated from their families in the past 18 months. Moreover, 31 percent have been away for six months or longer.

    The Department of Defence (DOD) began releasing an Annual Suicide Report in January 2019 as a means to track the escalating problem.

    “The department is fully committed to preventing suicides in our military community. Every death by suicide is a tragedy,” the DOD posted on its website for the office of suicide prevention.

    Combined with the United States Department of Veterans Affairs (VA) and United Service Organizations (USO), free tools like crisis hotlines for military members struggling with mental health are available 24 hours a day.

    The USO also offers services to deployed military members like Super Bowl parties, shared meals, and movie nights to help increase social connectivity and reduce feelings of isolation while overseas.

    Latz noted that people suffering from PTSD could be dealing with an array of symptoms like poor sleep, flashbacks, and intrusive memories of the trauma they experienced.

    Read more here…

    Tyler Durden
    Thu, 08/04/2022 – 18:20

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