May 05

Today’s News 5th May 2022

  • EU Takes Aim At Russia's Ability To Insure Oil Transport In 'Iran-Style' Sanctions Escalation
    EU Takes Aim At Russia’s Ability To Insure Oil Transport In ‘Iran-Style’ Sanctions Escalation

    As part of the new ‘imminent’ sanctions on Russia – to include a phased ban on all Russian oil by the end of the year – it seems the European Union is ready to escalate even further, taking action to and beyond all-encompassing Iran-style sanctions. 

    Now it’s mulling going after Russia’s ability to even ship oil on the high seas with a proposed ban on European vessels and companies’ ability to provide services to Russian shipping entities. As Bloomberg is reporting Wednesday, the action would constitute “a move that could dramatically impair Moscow’s ability to ship its oil anywhere in the world.”

    Image: Greenpeace protesters have literally tried to attack tankers believed carrying Russian oil

    If such a ban on Russia’s access to European insurers were enacted, this would leave Russian companies exposed to the tune of multiple billions of dollars every time a single tanker leaves port, given risks like accidents and oil spills can bring with it such a price tag in terms of claims and legal action.

    Russian energy companies would then be left with few or no alternatives, writes Bloomberg: “While member states are still wrangling over the terms, it’s a potentially powerful tool because 95% of the world’s tanker liability cover is arranged through a London-based insurance organization called the International Group of P&I Clubs that has to heed European law.”

    The report makes direct comparison of such a course of action to a key way that Washington has for years been able to severely limit Iran’s ability to transport of crude, forcing the Islamic Republic to cover its risks directly.

    But huge hurdles still remain in terms of inter-EU unity on a Russian oil embargo, given the rise in countries demanding exemptions – led most notably by Hungary and Slovakia. And further erecting major hurdles for European companies is expected to be even more controversial given the ripple effect at home.

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    The ban would prevent any European entity or individuals from transporting Russian oil anywhere in the world, which will be particularly painful to the economies of smaller Mediterranean countries like Greece, Cyprus and Malta  – which play an outsized role in the European shipping and transport industry.

    These countries have reportedly already registered their opposition to such a drastic punitive plan, which they say will only blowback on European companies and their ability to do business.

    Tyler Durden
    Thu, 05/05/2022 – 02:45

  • The Long, Lucrative & Bloody Road To World War 3
    The Long, Lucrative & Bloody Road To World War 3

    Authored by Connor Freeman via The Libertarian Institute, 

    Well, this war in Ukraine will last “months and years.” At least, that is what the leaders of the D.C. foreign policy blob, the media, President Joe Biden’s men, Pentagon and NATO leadership have decided. Their plan is to pour oil on the flames and keep the fire raging. Also, Americans are going to have to cough up the dough for another massive aid package, with $20 billion worth of weapons to keep the blood flowing. In total, this next package will cost the taxpayer $33 billion. With Biden’s proposed $813 billion “defense” budget for 2023, the U.S. is spending more on the military and war now than ever before in the country’s history.

    Now that we have our very own Ministry of Truth, it would appear any national debate over these polices, indeed if such a debate is ever allowed to take place, will likely have to be moderated by cockroaches and Keith Richards.

    NATO is set to expand again, bringing in Finland and Sweden. This will extend the alliance’s border with Russia by greater than 800 miles and further stoke nuclear tensions, bringing the current brinksmanship to a whole new level. Moscow plans to respond including by increasing air and naval forces in the Baltic Sea and reinforcing its Kaliningrad exclave, which lies between NATO members Poland and Lithuania, with additional nuclear weapons and hypersonic missiles. Until 2004, it was unthinkable that NATO would ever expand to Russia’s borders until that actually happened. Like most of our issues with Russia, this is all Bill Clinton and George W. Bush’s fault.

    Even as Russia’s Foreign Minister Sergei Lavrov and other leaders in Moscow repeatedly warn of nuclear conflict and World War III, even directly comparing the current situation to the Cuban Missile Crisis, senior Pentagon officials say they are not concerned.

    Images: AP

    Nor do our all-knowing rulers appear concerned with the fact that they have “almost zero” ability to keep track of the myriad sophisticated weapons systems they are sending to Ukraine. CNN quoted briefed sources saying intelligence shows American arms are falling into a “big black hole.” They say it’s worth it.

    Nor do they seem to be concerned with the Russians’ warnings regarding how the West’s weapons flood in Ukraine threatens to expand the war into NATO territory and destabilize Europe. UK Foreign Secretary Liz Truss demands the West must “double down” on arms shipments, insisting particularly on “heavy weapons, tanks, airplanes—digging deep into our inventories, ramping up production. We need to do all of this.”

    Our top diplomat Antony Blinken says the plan is regime change in Moscow, much like his boss did in March with his Polish “gaffe.” Ironically, the $47 billion in weapons and other U.S. aid pledged to Ukraine these last two months will soon surpass the State Department’s entire budget. Eat your heart out, Netanyahu!

    Secretary of Defense Lloyd Austin, former Raytheon board member, says the goal is to see Russia “weakened” to the point where it lacks even the capability to defend itself just outside its borders. As Pat Buchanan notes, this policy, whether its intended to or not, pressures the Kremlin to more seriously consider pulling its nuclear trigger.

    “We want to see Russia weakened to the degree that it can’t do the kinds of things that it has done in invading Ukraine,” Austin said with a clear eye toward increasing Russian casualties and the long term destruction of Moscow’s conventional power.

    Perhaps, Austin wants to cripple Russia so severely that his Pentagon can fight a war with China, the “most consequential strategic competitor and the pacing challenge for the Department,” without having to worry so much about Moscow—deemed a second tier “acute” threat, albeit one armed with roughly 6,000 nukes—getting involved.

    Austin’s Raytheon pals are making a killing on this proxy war as well as the ancillary effects such as European NATO states, at long last, increasing their military spending.

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    As Ron Paul has written,

    One group of special interests profiting massively on the war is the US military-industrial complex. Raytheon CEO Greg Hayes recently told a meeting of shareholders that, “Everything that’s being shipped into Ukraine today, of course, is coming out of stockpiles, either at DOD or from our NATO allies, and that’s all great news. Eventually we’ll have to replenish it and we will see a benefit to the business.”

    He wasn’t lying. Raytheon, along with Lockheed Martin and countless other weapons manufacturers are enjoying a windfall they have not seen in years. The U.S. has committed more than three billion dollars in military aid to Ukraine. They call it aid, but it is actually corporate welfare: Washington sending billions to arms manufacturers for weapons sent overseas.

    By many accounts these shipments of weapons like the Javelin anti-tank missile (jointly manufactured by Raytheon and Lockheed Martin) are getting blown up as soon as they arrive in Ukraine. This doesn’t bother Raytheon at all. The more weapons blown up by Russia in Ukraine, the more new orders come from the Pentagon.

    Former Warsaw Pact countries now members of NATO are in on the scam as well. They’ve discovered how to dispose of their 30-year-old Soviet-made weapons and receive modern replacements from the U.S. and other western NATO countries.

    There is scarcely a status quo to oppose. For weeks, escalations have continued apace. London has deployed SAS troops in Kiev to train Ukrainian troops on English anti-tank weapons. The U.S. is training Kiev’s troops in Germany and two other secret locations in Europe on heavy artillery, radar systems, and armored vehicles. Washington is expanding intelligence sharing with Kiev for its war with Russia in the Donbas, providing howitzers, vehicles to carry them, and an additional 144,000 artillery rounds. Poland is sending tanks to Ukraine, Slovenia has a plan to send large numbers of T-72 battle tanks as well. The Germans will be supplying anti-aircraft tanks to Kiev and the Pentagon says an unidentified European ally is providing Ukraine with warplanes.

    London’s armed forces minister declared his government’s support for Kiev’s “completely legitimate” attacks inside Russia using British arms. This comes amid an uptick in reports of Ukrainian cross border drone and helicopter assaults including on Russian oil depots, residential areas, and villages. The U.S. and its European allies are implementing a long term policy that looks to exile Russia, looking toward a new world order where they no longer seek to “coexist” with Moscow.

    London wants Europe to cut off all Russian energy “once and for all,” which would make war more likely, impoverish innocent people, and cause massive recessions.

    The U.S., NATO, and Russian presence in the Mediterranean Sea has reached Cold War levels, as NATO builds new Eastern European battlegroups.

    In March, NATO Secretary General Jens Stoltenberg warned that any “use of chemical weapons would totally change the nature of the conflict, it would be a blatant violation of international law and would have far-reaching consequences.” This weekend, legislation for a new Authorization for the Use of Military Force (AUMF) has been introduced by Congressman Adam Kinzinger (R-IL). Kinzinger’s announcement calls the would be AUMF a “clear red line,” which would authorize Biden to deploy troops to Ukraine to fight Russians if Moscow should “use chemical, biological, and/or nuclear weapons.”

    With the almost complete bipartisan Congressional support for the renewal of Lend-Lease and other anti-Russia, pro-war legislation, it is not outside the realm of possibility that this bill and its cynical redline trap becomes law.

    For nearly two decades, Washington has funded “biological research” and other laboratories inside Ukraine. According to the head of the DoD’s Cooperative Threat Reduction Program, some of these labs may contain Soviet-era bioweapons.

    As Dave DeCamp, news editor at Antiwar.com, has reported,

    The Pentagon funds labs in Ukraine through its Defense Threat Reduction Agency (DTRA). According to a Pentagon fact sheet released last month, since 2005, the U.S. has “invested” $200 million in “supporting 46 Ukrainian laboratories, health facilities, and diagnostic sites.”

    Moscow has accused Ukraine of conducting an emergency clean-up of a secret Pentagon-funded biological weapons program when Russia invaded. The World Health Organization said it advised Ukraine to destroy “high-threat pathogens” around the time of the invasion.

    For their part, the U.S. maintains that the program in Ukraine and other former Soviet states is meant to reduce the threat of biological weapons left over from the Soviet Union. While downplaying the threat of the labs, Pentagon officials have also warned that they could still contain Soviet-era bioweapons.

    Robert Pope, the director of the DTRA’s Cooperative Threat Reduction Program, told the Bulletin of the Atomic Scientists in February that the labs might contain Soviet bioweapons and warned that the fighting in Ukraine could lead to the release of a dangerous pathogen.

    Much like previous Syrian redlines, this is practically the hawks’ invitation to bad actors seeking U.S. intervention to go ahead and launch an attack that could be plausibly blamed on our Hitler du jour to manufacture their desired casus belli.

    It seems there may be ample sites somebody could hit that would cross Kinzinger’s cleverly drawn line in the sand. And much like the CIA, Turkey, and Saudi Arabia’s al Qaeda allies in Syria, the Azov Battalion and other Nazi groups, who have taken a humiliating beating thus far in the war, are prime candidates to launch a false flag.

    If the American people do not wake up and demand an end to our government’s intervention in Ukraine, the U.S. may be directly entering this war soon.

    If Russia was doing what the U.S. and its allies are doing in Ukraine, in Mexico or Canada, in addition to the unprecedented economic war being waged, these hawks in D.C. would have pulled the aforementioned nuclear trigger months ago.

    Tyler Durden
    Thu, 05/05/2022 – 02:00

  • When The Government Plays God: The Slippery Slope From Abortions To Executions
    When The Government Plays God: The Slippery Slope From Abortions To Executions

    Authored by John W. Whitehead & Nisha Whitehead via The Rutherford Institute,

    “Abortion on demand is the ultimate State tyranny; the State simply declares that certain classes of human beings are not persons, and therefore not entitled to the protection of the law. The State protects the ‘right’ of some people to kill others, just as the courts protected the ‘property rights’ of slave masters in their slaves.”

    – Ron Paul

    The government wants to play god.

    It wants the power to decide who lives or dies and whose rights are worthy of protection.

    Delve beneath the rhetoric and spin that have turned abortion into a politicized, polarized and propagandized frontline in the culture wars, and you will find a greater menace at work.

    Abortion may be front and center in the power struggle between the Left and the Right over who has the right to decide—the government or the individual—when it comes to bodily autonomy, the right to privacy, sexual freedom, the rights of the unborn, and property interests in one’s body, but there’s so much more going on here.

    The Left would suggest that unborn babies do not have constitutional rights and the only right that matters is a woman’s right to privacy in choosing whether or not to abort a pregnancy. The Right, while fixated on saving the lives of unborn babies, seems less concerned about what happens to those lives from birth to death.

    What few seem willing to address is that in the 30 years since the U.S. Supreme Court issued its landmark ruling in Roe v. Wade, the government has come to believe that it not only has the power to determine who is deserving of constitutional rights in the eyes of the law but it also has the authority to deny those rights to an American citizen.

    This is how the abortion debate—a politicized tug-of-war over when an unborn child is considered a human being with rights—plays into the police state’s hands by laying the groundwork for discussions about who else may or may not be deserving of rights.

    Even if (as a leaked draft opinion in the case of Dobbs v. Jackson Women’s Health Organization suggests) the Supreme Court overturns its earlier rulings recognizing abortion as a constitutional right under the Fourteenth Amendment, that will not resolve the larger problem that plagues us today: namely, that all along the spectrum of life—from the unborn child to the aged—the government continues to play fast and loose with the lives of the citizenry.

    Take a good, hard look at the many ways in which Americans are being denied their rights under the Constitution.

    So, what is the common denominator here?

    These are all American citizens—endowed by their Creator with certain unalienable rights, rights that no person or government can take away from them, among these the right to life, liberty and the pursuit of happiness—and they are all being oppressed in one way or another by a government that has grown drunk on power, money and its own authority.

    If the government—be it the President, Congress, the courts or any federal, state or local agent or agency—can decide that any person has no rights, then that person becomes less than a citizen, less than human, less than deserving of respect, dignity, civility and bodily integrity. He or she becomes an “it,” a faceless number that can be tallied and tracked, a quantifiable mass of cells that can be discarded without conscience, an expendable cost that can be written off without a second thought, or an animal that can be bought, sold, branded, chained, caged, bred, neutered and euthanized at will.

    It’s a slippery slope that justifies all manner of violations in the name of national security, the interest of the state and the so-called greater good.

    Yet those who founded this country believed that what we conceive of as our rights were given to us by God—we are created equal, according to the nation’s founding document, the Declaration of Independence—and that government cannot create, nor can it extinguish our God-given rights. To do so would be to anoint the government with god-like powers and elevate it above the citizenry.

    Unfortunately, we have been dancing with this particular devil for quite some time now.

    If we continue to wait for the government to restore our freedoms, respect our rights, rein in its abuses and restrain its agents from riding roughshod over our lives, our liberty and our happiness, then we will be waiting forever.

    Already, the politicos are beating the war drums to herald the next phase of the abortion wars.

    President Biden wants voters to elect more pro-abortion rights officials to ensure that “a woman’s right to choose is fundamental.” The Senate plans to vote to codify the right to an abortion into federal law. Chief Justice John G. Roberts is opening an investigation into how the Supreme Court’s draft abortion ruling was leaked. And polling indicates that the majority of the American people want abortion to remain legal.

    Like clockwork, we find ourselves smack dab in the middle of yet another political circus that could get scary, ugly and overwhelming really fast.

    Before you get too distracted by this conveniently timed diversion that has everyone forgetting about spiking gas prices, inflation, housing shortages, and warring empires, remind yourself that no matter how the Supreme Court rules in Dobbs, it will not resolve the problem of a culture that values life based on a sliding scale.  Nor will it help us navigate the moral, ethical and scientific minefields that await us as technology and humanity move ever closer to a point of singularity.

    Humanity is being propelled at warp speed into a whole new frontier when it comes to privacy, bodily autonomy, and what it means to be a human being. As such, we haven’t even begun to wrap our heads around how present-day legal debates over bodily autonomy, privacy, vaccine mandates, the death penalty, and abortion play into future discussions about singularity, artificial intelligence, cloning, and the privacy rights of the individual in the face of increasingly invasive, intrusive and unavoidable government technologies.

    Yet here is what I know.

    Life is an inalienable right.

    By allowing the government to decide who or what is deserving of rights, it shifts the entire discussion from one in which we are “endowed by our Creator with certain inalienable rights” (that of life, liberty property and the pursuit of happiness) to one in which only those favored by the government get to enjoy such rights.

    If all people are created equal, then all lives should be equally worthy of protection.

    There’s an idea embraced by both the Right and the Left according to their biases that there is a hierarchy to life, with some lives worthier of protection than others, but there is no hierarchy of freedoms.

    All freedoms hang together.

    As I make clear in my book Battlefield America: The War on the American People and in its fictional counterpart The Erik Blair Diaries, we must never stop working to protect life, preserve our freedoms and maintain some semblance of our humanity.

    Freedom cannot be a piece-meal venture.

    Tyler Durden
    Wed, 05/04/2022 – 23:40

  • Russia's Largest Shipper Races To Sell Third Of Fleet To Satisfy Western Loans
    Russia’s Largest Shipper Races To Sell Third Of Fleet To Satisfy Western Loans

    Russia’s largest shipping firm is unloading a third of its fleet, in a move to repay loans to western banks and financiers before sanctions come into effect on May 15, according to Lloyd’s List, citing industry sources. 

    One industry insider said Sovcomflot is attempting to offload 40 of the 121 vessels it currently owns with buyers in Dubai and China. 

    The European Union and the UK have slapped Russia with a series of sanctions — one specifies that all banks must terminate Russian agreements by May 15. This means that Sovcomflot must satisfy all outstanding loans before that date, which has prompted the shipper to sell a third of its fleet. 

    “Basically, all banks and charterers have until May 15 to actually terminate the contracts, which means Sovcomflot has a very short window to pay back the loans and realistically, there is only one way it can do that and that is to sell the ships,” said one senior banker currently negotiating terms with Sovcomflot.

    Others with direct discussions of the deals said only eight vessels had been sold, with four of them finding buyers in Dubai. There are active conversations with Chinese buyers. 

    Lloyd’s List couldn’t figure out how much Sovcomflot owed western banks but said, “the last available consolidated accounts detail $2.1bn of debt, made up of short- and long-term bank loans.” 

    Here’s a breakdown of Sovcomflot’s tanker fleet as per Lloyd’s List. 

    On top of the May 15 deadline, the EU announced a proposed total ban on Russian oil imports on Wednesday, including the phase-out of Russian crude oil within six months and refined products by the end of the year. European Commission President Ursula von der Leyen said the bloc would wean off Russian oil in “an orderly fashion” (orderly, probably not …). 

    Tyler Durden
    Wed, 05/04/2022 – 23:20

  • Illegal Aliens Sue Texas Officials After Arrests For Trespassing
    Illegal Aliens Sue Texas Officials After Arrests For Trespassing

    Authored by Charlotte Cuthertson via The Epoch Times,

    A group of illegal aliens has filed a lawsuit against Texas officials for alleged constitutional violations within the governor’s Operation Lone Star criminal trespass program.

    The lawyers for the 15 plaintiffs hope to turn the case into a class action lawsuit on behalf of more than 2,000 illegal immigrants whom they say have been over-incarcerated; arrested based on race, immigration status, or national origin; as well as denied due process.

    “In particular, the Plaintiffs and the Class Members have suffered a common cause of injury, namely the violation of their Fourth Amendment and Fourteenth Amendment rights,” the lawsuit states.

    “Using state criminal law, the state of Texas and participating counties have created, and are carrying out what is, in reality, a system of state immigration enforcement that targets Black and Brown—primarily Latino—individuals for prosecution and enhanced punishment.”

    The lawyers are seeking ​​$18,000 per day for each inmate that is found to have been unlawfully incarcerated or unlawfully reincarcerated. They also seek an injunction to discontinue the Operation Lone Star program.

    The lawsuit was filed in the U.S. District Court for the Western District of Texas, Austin division.

    Texas Department of Public Safety state troopers meet up at shift-change in Brackettville, Texas, on April 18, 2022. (Charlotte Cuthbertson/The Epoch Times)

    Operation Lone Star (OLS) was launched in March 2021, and Gov. Greg Abbott beefed up the number of Texas state troopers on border roads to intercept smuggling operations and Texas National Guardsmen to augment security and observation along the border.

    The program was expanded in June last year to allow for illegal immigrants trespassing on private or state land to be arrested and prosecuted. The OLS budget funded jail space for alleged illegal immigrant trespassers, defense counsel, and prosecution resources.

    Kinney County and neighboring Val Verde County in south Texas were the first to begin the trespass prosecutions under OLS, and since then, seven more counties have joined, including Edwards, Frio, Jim Hogg, Kimble, Maverick, Uvalde, and Zavala.

    Kinney County and its sheriff, Brad Coe, are listed as defendants in the lawsuit, along with Abbott, Texas Department of Public Safety (DPS) Director Steve McCraw, and DPS Executive Director Bryan Collier.

    “Under the guise of state criminal trespass law but with the explicit, stated goal of punishing migrants based on their immigration status, Texas officials are targeting migrants,” the lawsuit alleges. “OLS targets only migrants, and only men of brown or black skin.

    “Hundreds of those arrested have waited in jail for weeks or months without a lawyer, or without charges, or without bond, or without a legitimate detention hold or without a court date.”

    A group of illegal aliens is apprehended by law enforcement on a ranch in Kinney County, Texas, on Jan. 15, 2022. (Courtesy of Kinney County Sheriff’s Office)

    County Attorney Brent Smith said his small county has struggled to keep up with the volume of prosecutions—he went from about six cases per month to more than 30 per day.

    But, he said, the law has safeguards in place to protect alleged criminals.

    “For instance, a writ of habeas corpus hearing is triggered when more than 30 days elapses before there’s a complaint filed. And when that occurs, they’re eligible to get a reduced bond or a PR bond,” Smith said in an earlier interview.

    Regarding the lawsuit, Smith told The Epoch Times on May 2 that “it reads more like the liberal media propaganda than something based in actual law and fact.”

    He spurned the racial profiling allegation. “Nowhere in the entire complaint can they point out where we didn’t arrest someone because they were white or non-Hispanic or non-Latino. If you’re breaking the law, you get arrested,” he said.

    Coe said he’s heard about the lawsuit but hasn’t been served or seen it yet.

    “It’s kind of hard to profile when a) you can’t see inside the vehicles, everybody has tinted windows. And b) it’s hard to profile when you’re sitting there waiting for somebody to show up and a group of 10 shows up and they’re all Mexicans. So how is that profiling?” Coe told The Epoch Times on April 29.

    “We’re protecting citizens, we’re protecting landowners, so I don’t really see it going anywhere, but we’ll see what happens.”

    Lt. Christopher Olivarez, DPS spokesman for the south Texas region, told The Epoch Times via email that “the department does not discuss pending litigation.”

    Kinney County Sheriff Brad Coe in Brackettville, Texas, on Jan. 18, 2022. (Charlotte Cuthbertson/The Epoch Times)

    Border Security

    The Texas legislature has approved nearly $3.5 billion for OLS since September last year.

    Since its inception, the program has been condemned by state Democrats, organizations such as the American Civil Liberties Union (ACLU), and lawyer groups for illegal immigrants.

    A group of 50 Democrats in the Texas House of Representatives wrote a letter in January urging the departments of Justice and Homeland Security to investigate the program. The ACLU filed its own 50-page complaint to the Department of Justice in December 2021.

    “Operation Lone Star uses state criminal law to target Black and Latino migrants for punishment,” the Democrats’ Jan. 26 letter to the federal agencies alleges.

    “Anti-immigrant hate is on the rise in Texas, and state and local officials are fanning the flames,” the ACLU stated in its complaint.

    Abbott has defended the program, saying it “continues to fill the dangerous gaps left by the Biden administration’s refusal to secure the border.”

    “Every individual who is apprehended or arrested and every ounce of drugs seized would have otherwise made their way into communities across Texas and the nation due to President Biden’s open border policies,” Abbott said in a statement on April 29.

    Abbott, a Republican, declared a state of disaster on May 31, 2021, as the crisis escalated. This meant most misdemeanor charges of trespassing were elevated from a Class B to a Class A misdemeanor, which carries a higher penalty. The charge is also elevated if the individual has a deadly weapon or is found more than 100 feet past the property line on agricultural land.

    The illegal aliens arrested on ranches in Kinney County aren’t turning themselves over to Border Patrol and seeking asylum, Smith said.

    “They’re being smuggled across. And then whenever law enforcement locates them, they’re running. They’re not trying to surrender at all,” Smith told The Epoch Times in an earlier interview.

    “If they were trying to claim asylum, they’d be doing that at the port of entry, or the first law enforcement they come to. But instead, they’re evading law enforcement—and they’re destroying property while they do it.”

    A group of illegal aliens is apprehended by law enforcement on a ranch in Kinney County, Texas, on Jan. 14, 2022. (Courtesy of Kinney County Sheriff’s Office)

    Kinney County has prosecuted more than 2,885 illegal aliens for trespassing and evading arrest since August last year, as well as several U.S. citizens.

    The county only has 14 male-only jail spaces, which are perpetually full. So the aliens are booked and appear before a magistrate at a tent facility in neighboring Val Verde County.

    From Val Verde, troopers transport them 100 miles away to the Briscoe Unit in Dilley, Texas, which has been repurposed to detain almost 1,000 illegal aliens who are waiting for their court cases and serving out their sentences. The Segovia Unit in Edinburg, Texas, has also been repurposed for OLS detainees.

    Kinney County’s first jury trial is scheduled for May 9, after several aliens pleaded not guilty to their trespass charges.

    Border Patrol agents made more than 1.3 million apprehensions of illegal aliens in Texas in 2021. An additional half million are estimated to have evaded capture.

    Tyler Durden
    Wed, 05/04/2022 – 23:00

  • White House Pressures Israel To Expand Military Aid To Ukraine
    White House Pressures Israel To Expand Military Aid To Ukraine

    Axios has revealed in a Wednesday report that the Biden administration last week urged Israel to begin giving Ukraine direct military aid. Israel has sought thus far during the Russian invasion to portray itself as neutral, up to this point refusing requests from Ukrainian leadership for Israeli weapons.

    However, it was only last month that Israel agreed to send what were perhaps merely symbolic shipments of helmets and bulletproof vests, which were described as for use by first responders, and not Ukraine’s armed forces.

    Pro-Ukraine demonstrators at Habima Square in Tel Aviv, via AFP

    At the moment Ukraine is reportedly seeking Israeli military communications gear and anti-drone systems, according to Axios. Tel Aviv has long sought to be careful about not angering Russia, given the two countries’ interests butt up against each other inside Syria, and relatedly Israel needs Russia’s help on the issue of Iranian influence and expansion in the region.

    So far the Israelis are said to be mulling the possibility of only providing nonlethal military aid – as they come under pressure from Washington.

    According to details offered in the Axios report, “Israel last week sent Dror Shalom, the head of the political-military bureau at the Ministry of Defense, to Ramstein Air Base in Germany for a U.S.-led meeting on sending weapons to Ukraine.”

    US officials communicated understanding of Israel’s delicate position vis-a-vis its Russian relations:

    • The Biden administration made it clear to the Israelis that the U.S. understands its complicated situation with Russia and appreciates what it has done so far in terms of aid to Ukraine, but hopes it could do more in providing military equipment, U.S. and Israeli officials said.
    • This message was delivered during a meeting between White House national security adviser Jake Sullivan and his Israeli counterpart, Eyal Hulata, at the White House last week and in conversations between the Pentagon and the Israeli Ministry of Defense.

    Meanwhile, there’s the possibility that Baltic countries in possession of Israeli weapons systems could be given the greenlight to transfer them to Kiev.

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    The timing of the above revelations could prove further awkward given the report comes amidst a worsening Israel-Russia diplomatic spat, following Russia’s foreign minister Sergey Lavrov speculating that Adolf Hitler may have had “Jewish Blood”.

    This has led to Israel demanding an official apology and retraction of the statement, which appeared intended by Lavrov to deflect when pressed on why President Putin has repeatedly said Ukraine is in the grip of neo-Nazis when its president Volodymyr Zelensky is himself Jewish. Moscow has so far refused to apologize or have Lavrov walk back the comments which came during an interview with an Italian newspaper.

    Tyler Durden
    Wed, 05/04/2022 – 22:40

  • China Bets The House On New Houses
    China Bets The House On New Houses

    Submitted by Benn Steil and Benjamin Della Rocca

    Last September, after China’s second-largest property developer, Evergrande Group, missed $131 million in interest payments, Beijing promised to rein in risky real-estate speculation. We didn’t buy it. As we wrote in November, Chinese leaders rely on frothy housing markets and lending growth to meet their politically determined annual GDP growth targets. Serious housing reform was not in the cards.

    Sure enough, Beijing soon revealed that the promise was a head-fake. In January, the government moved to make it easier for developers to pay creditors using pre-construction homebuyer funds held in escrow. In March, the National People’s Congress killed plans to introduce a national property tax and other structural reforms to reduce property speculation. Municipal authorities have subsidized young buyers’ home purchases, directed state-owned banks to slash mortgage rates, and eased home down-payment requirements.

    The state-controlled press says it is all working perfectly—speculation is being stamped out, and the housing market is “stable.” Yet home sales are plunging.

    So how does the government square this circle? It points to data showing steady prices for new homes. Our left-hand graphic above confirms this fact. But it also shows a steep decline—the steepest on record—in prices for existing homes.

    What is happening? The government cares less about prices of existing homes than new-home prices, since over-leveraged developers make their money selling new units. So, not surprisingly, it is betting the house on keeping new homes popular and profitable.

    Chinese cities have been imposing price floors and prohibiting “malicious price cuts” on new construction. They have been offering generous consumer-goods vouchers and tax cuts to buyers of new properties. All of this costly window-dressing is keeping new-home prices up and overleveraged developers afloat, even as the market for existing homes tanks. Still, real-estate analysts and Chinese developers alike widely expect new-home prices to head south soon enough.

    Falling house prices affect GDP through the so-called wealth effect—that is, consumers’ tendency to cut spending when their assets fall in value. A $100 decline in housing-market net worth, according to one U.S.-based study, lowers consumption by $2.50-5.00. In China, the housing wealth effect is likely at least this large. As the right-hand chart above shows, homes represent roughly 45 percent of Chinese household net worth. (In some cities, it is more like 70 percent.) That compares with just 27 percent in the United States.

    What does all this mean for China’s economy? If existing-home price declines bring a wealth effect at the upper end of the range above, then we would expect recent changes alone to shave roughly half a percent off China’s 2022 GDP growth. Last month, owing to omicron’s spread, the IMF revised China’s 2022 growth forecast down to 4.4 percent, 1.1 percentage points below the government’s target, although home-price effects do not seem to be part of their equation. All else equal, something below 4 percent is more likely. Of course, President Xi may be unwilling to accept 4 percent growth—in which case we can expect yet further measures to juice borrowing and home prices.

    Eventually, unsustainable debt becomes—well, unsustainable. At that point, there is a financial crisis or productivity collapse that crushes growth. Defining “eventually,” of course, is the big challenge.

    Tyler Durden
    Wed, 05/04/2022 – 22:20

  • The Legal Status Of Abortion Worldwide
    The Legal Status Of Abortion Worldwide

    According to a leaked draft opinion reported on by Politico, the U.S. supreme court has provisionally voted to overturn Roe v Wade – the landmark 1973 ruling that legalized abortion nationwide in the United States. Reproductive rights have been put under a lot of pressure in some parts of the country recently, and an analysis by the Guttmacher Institute predicts that around half of U.S. states will take advantage of Roe v Wade being overturned by banning abortions completely.

    Infographic: Which States Would End Abortion if Roe v. Wade Was Overturned? | Statista

    You will find more infographics at Statista

    However, as Statista’s Martin Armstrong notes, the story is very different elsewhere in the world.

    Infographic: The Legal Status Of Abortion Worldwide | Statista

    You will find more infographics at Statista

    In February this year, Colombia decriminalized abortion during the first 24 weeks of pregnancy. This was the latest step forward for reproductive rights in Latin America after a more conservative but nevertheless significant decriminalization in Mexico in September 2021. In January 2021, Argentina had become the largest Latin American country to legalize abortion. This occurred despite opposition from the Catholic church and represented a considerable milestone in a highly conservative region.

    Asia has also seen moves in favor of reproductive rights. Effective from the start of 2021, South Korea decriminalized abortion until the 14th week of pregnancy. In Thailand, parliament voted in January 2021 to make abortion legal within the 12 weeks, although penalties are still in place for those who terminate later in their pregnancies.

    This world map uses data from The Center for Reproductive Rights to show the state of global abortion laws at the start of 2021.

    Tyler Durden
    Wed, 05/04/2022 – 22:00

  • To Spy On A Trump Aide, The FBI Pursued A Dossier Rumor The Press Shot Down As 'Bulls**t'
    To Spy On A Trump Aide, The FBI Pursued A Dossier Rumor The Press Shot Down As ‘Bulls**t’

    Authored by Paul Sperry via RealClear Investigations,

    The FBI decision to spy on a former Trump campaign adviser hinged on an unsubstantiated rumor from a Clinton campaign-paid dossier that the Washington Post’s Moscow sources had quickly shot down as “bullshit” and “impossible,” according to emails disclosed last week to a D.C. court hearing the criminal case of a Clinton lawyer accused of lying to the FBI.

    AP

    Though the FBI presumably had access to better sources than the newspaper, agents did little to verify the rumor that Trump foreign policy adviser Carter Page had secretly met with sanctioned Kremlin officials in Moscow. Instead, the bureau pounced on the dossier report the day it received it, immediately plugging the rumor into an application under the Foreign Intelligence Surveillance Act to wiretap Page as a suspected Russian agent.

    The allegation, peddled to both the press and FBI in the summer of 2016 by Fusion GPS, an opposition research firm hired by Hillary Clinton’s campaign to dig up dirt on Trump during the presidential race, proved to be the linchpin in winning approval for the 2016 warrant, which was renewed three times in 2017 – even though the FBI learned there were serious holes in the story and had failed to independently corroborate it.

    The revelations of early media skepticism about the Trump-Russia narrative before journalists embraced it are included in a 62-page batch of emails between Fusion and prominent Beltway reporters released by Special Counsel John Durham, who is scouring the FBI’s investigation of the Trump campaign for evidence of abuse and criminal wrongdoing.

    The documents suggest that some journalists, as keen as they were to report dirt on Trump, were nevertheless more cautious than FBI investigators about embracing hearsay information served up by Clinton agents. (The FBI declined comment.) The new material also offers a look at the lengths to which those working on Clinton’s behalf went in order to seed the government with unverified rumors about Trump and Russia that amounted to a disinformation campaign. Among those targeted were powerful Democratic members of Congress, including House Intelligence Committee Chairman Adam Schiff, who proved to be a willing collaborator.

    Trump as ‘Manchurian Candidate’

    The story of high-level Kremlin meetings didn’t ring true with some in the press, who checked with sources in Moscow and pushed back on Fusion GPS. But journalists’ interest in the story remained high during the campaign.

    In an interview, Page said he was flooded with calls during the summer of 2016 from Washington journalists, including veteran reporters from the Washington Post, the New York Times and the Wall Street Journal. He said Fusion had misled them into believing they were working on the story of their lifetimes – that a real-life “Manchurian candidate,” or Russian sleeper agent, was running for president.

    “Each news outlet kept calling me,” he said. “One by one.”

    Page said he strenuously denied the accusations.

    “It was B.S.,” he said. “I tried to warn them.”

    Peter Fritsch and Glenn Simpson of Fusion GPS: Journalists were skeptical, at least for a time. YouTube/NBC News

    As eager as journalists may have been to make Trump appear to be a Kremlin operative, some were skeptical about what Fusion was telling them about Page. Among those were now former Wall Street Journal foreign affairs correspondent Jay Solomon, who used “Manchurian candidate” in a July 2016 email exchange with Fusion, expressing his doubt.

    “Everyone wants shit on this,” insisted Fusion co-founder Peter Fritsch, a former Journal reporter himself, in an attempt to coax his old colleague Solomon into covering the story.

    Fritsch then outlined the rumors Fusion had just received from Christopher Steele, a former British intelligence officer his firm had hired to help tie Trump to Russia as part of its contract with the Clinton campaign. Those rumors, contained in a series of memos known as the Steele dossier, were shared with the FBI, including “Intelligence Report 94” dated July 19, 2016. It claimed that during a July 2016 trip to Moscow, Page attended a “secret meeting” with Putin crony Igor Sechin to discuss lifting Ukraine-related sanctions against Russia. The dossier also alleged that Page met with Kremlin official Igor Divyekin to share compromising information about Clinton with the Trump campaign.

    An ‘Easy Scoop,’ Said GPS

    “The easy scoop waiting for confirmation: that dude carter page met with igor sechin when he went to moscow earlier this month,” Fritsch stated in a July 26, 2016, email pitching the story to Solomon. “sechin discussed energy deals and possible lifting of sanctions on himself et al. he also met with a senior kremlin official called divyekin, who told page they have good kompromat on hillary and offered to help. he also warned page they have good kompromat on the donald.” (“Kompromat” is compromising information typically used in blackmail.)

    Added Fritsch, referring in part to the mass leak of Democratic emails by WikiLeaks before the 2016 Democratic National Convention in late July: “needless to say, a senior trump advisor meeting with a former kgb official close to putin, who is on a treasury sanctions list, days before the republican convention and a big russian-backed wikileak would be huge news.”

    Indeed it would be – if it were true. “Thanks for this,” Solomon said. “Will run down.”

    But later that day, Solomon reported back that “Page is neither confirming nor denying,” so Fritsch suggested he “call adam schiff or difi,” referring to the then-ranking Democrat on the House Intelligence Committee and Sen. Dianne Feinstein, a top Democrat on the Senate Intelligence Committee. It is not clear what information Fritsch expected the two Democrats to provide. (Schiff would later read the same raw dossier rumors about Page into the congressional record during a public hearing about Trump’s alleged Russian ties.)

    Three days later, Fusion’s attempts to plant their rumor in influential media outlets hit more resistance. Another Journal alumnus, Tom Hamburger, said he was “getting kick back” while trying to confirm the rumor for the Washington Post, where he worked on the paper’s national desk.

    “That Page met with Sechin or Ivanov. ‘Its [sic] bullshit. Impossible,’ said one of our Moscow sources,” Hamburger reported back to Fusion co-founder Glenn Simpson, who also previously worked for the Journal. (The rumor included Sergei Ivanov, a top Putin aide.) The Post’s Moscow bureau chief at the time was David Filipov. Hamburger added that another reporter he knew “doesn’t like this story” and was passing on it.

    “No worries, I don’t expect lots of people to believe it,” Simpson replied. “It is, indeed, hard to believe.”

    As Fusion was pushing the rumors to reporters that July, its subcontractor Steele was pushing them to FBI agents, who received copies of his dossier earlier in the month. Steele also briefed a top Justice Department official, Bruce Ohr, on the Carter Page rumors on July 30 during a breakfast at the Mayflower Hotel in D.C., and asked Ohr to relay them to FBI brass. The next day, the FBI officially opened its Crossfire Hurricane investigation targeting Trump advisers – though the bureau says this decision was based on a tip it had received from an Australian diplomat.

    For his part, Hamburger still pursued the story, asking for documents on Page later that month; and Fusion recycled the false rumor in an internal report, separate from the Steele dossier, which it emailed to Hamburger and another Post reporter in September. 

    The report, which Fritsch claimed that “one of our [research] associates wrote,” went beyond even the dossier. It asserted that Page’s July 8 speech at the New Economic School in Moscow (where President Obama had also once spoken) was “concocted to give Page a public explanation for his trip to Moscow, which sources say included secret meetings with top Kremlin officials, where the American presidential campaign and U.S. sanctions against Russia were both discussed.”

    Fritsch did not say who the Fusion “sources” were. But around the same time, he and Simpson brought Steele to Washington to brief journalists from the Post, the New York Times, CNN, and Yahoo News on Page in a private room at the Tabard Inn, a hotel-bar long a favorite of Washington scribes.

    Fusion had finally found a media outlet to take the bait it had been chumming out to reporters for months. After meeting with Steele for about an hour, Yahoo News’ Michael Isikoff ran with the rumors in a September 23 online article, which the FBI then used to corroborate the dossier in its initial October 2016 FISA application, even though the supposed corroboration was redundant: Steele and his dossier were Isikoff’s source for the story. (Isikoff, who did not respond to requests for comment, would later write in a 2018 book he co-authored, “Russian Roulette,” that the rumors about Page were just “pillow talk.”)

    The Clinton campaign jumped on what it called Isikoff’s “bombshell report” and heavily promoted it on social media. Clinton campaign official Glen Caplin issued a statement republishing the Yahoo piece in full and proclaiming: “It’s chilling to learn that U.S. intelligence officials are conducting a probe into suspected meetings between Trump’s foreign policy adviser Carter Page and members of Putin’s inner circle while in Moscow … [T]his report suggests Page met with a sanctioned top Russian official to discuss the possibility of ending U.S. sanctions against Russia under a Trump presidency – an action that could directly enrich both Trump and Page while undermining American interests.”

    Added Caplin: “This is serious business and voters deserve the facts before election day.”

    But the media never reported the real facts behind the story – that it was all based on Clinton campaign opposition research – which allowed the rumors to survive without any real scrutiny for years.

    The Washington Post eventually stopped paying attention to the red flags surrounding the dossier. The newspaper seized on other rumors Fusion fed reporters from the Clinton-paid document.

    Hamburger, for one, later bit on a tip that the source for the most explosive allegations in the dossier was a Trump supporter with Kremlin ties. He reported in 2017 that Sergei Millian was behind the claim that Russian President Vladimir Putin had compromising sex tapes of Trump and that he and Trump were engaged in a “well-developed conspiracy” to steal the 2016 election.

    However, the Post had to retract his stories after Special Counsel John Durham last year disclosed that Millian was fabricated as a source. The prosecutor indicted Steele’s “primary subsource,” Igor Danchenko, for lying to the FBI when he told agents that Millian was a source for the dossier. Millian had nothing to do with the dossier, as RCI reported. Danchenko, who awaits trial, apparently made it all up.

    Hamburger did not respond to repeated requests for comment.

    ‘Pushed It Over’ the Line

    Carter Page, who is suing the former corporate parent of Yahoo News for defamation, suggested anti-Trump bias blinded the media to glaring problems with the dossier. But even more alarming, he said, is how FBI leaders, whose text messages reveal that they shared the media’s hatred for Trump, were even more reckless in gunning for him. Page said it’s outrageous that, at least initially, the press seemed to have “higher ethical standards” than FBI headquarters.

    On Sept. 19, 2016, the FBI’s Crossfire Hurricane team formally received Steele’s dossier Report 94 alleging Page’s secret Kremlin meetings, according to Justice Department Inspector General Michael Horowitz, who detailed the FBI’s handling of the rumors in a 2019 report. That same day, the team began discussions with department lawyers “to consider Steele’s reporting as part of a FISA application targeting Carter Page.”

    In an email to attorneys, FBI Supervisory Intelligence Analyst Brian Auten forwarded an excerpt from Steele’s report and asked, “Does this put us at least *that* much closer to a full FISA on [Carter Page]?” The FBI agent handling the case said the rumors from Steele “supplied missing information in terms of what Page may have been doing during his July 2016 visit to Moscow.”

    The attorneys thought it was a “close call” when they first discussed a FISA targeting Page in early August, Horowitz relayed in his report, but the Steele reporting in September “pushed it over” the line in terms of establishing probable cause. 

    In the run-up to the FBI securing approval for the FISA request in late October 2016, the bureau tasked an undercover informant, Stefan Halper, to question Page about the alleged meetings with Kremlin officials. Halper struck out. In a conversation Halper recorded surreptitiously, Page not only denied huddling with Sechin and Divyekin but said he had never even heard of Divyekin. The FBI decided not to include these inconvenient facts in its FISA warrant application, an omission the Justice Department’s inspector general found striking.

    “The application did not contain these denials even though the application relied upon the allegations in Report 94 that Page had secret meetings with both Sechin and Divyekin,” the Horowitz report noted.

    It wasn’t the only exculpatory evidence the FBI left out of its FISA applications. It also omitted information it possessed showing that Page, who had once worked in Moscow as a Merrill Lynch investment banker, had earlier assisted the FBI in catching a Russian spy, as RealClearInvestigations first reported. The former Navy lieutenant also previously helped the CIA monitor Russia, something an FBI attorney deliberately hid from the FISA court. (The lawyer, Kevin Clinesmith, was recently convicted of charges related to his doctoring of a government email documenting Page’s role as a CIA source.)

    In early 2017, as the FBI was preparing to reapply for wiretaps on Page, Steele’s primary subsource Danchenko told Auten and other FBI officials that he had made it clear to Steele that he had only heard a rumor that such clandestine meetings might take place but not that they actually occurred as Steele wrote in his dossier. The FBI nonetheless omitted from subsequent FISA renewal applications the revelation of Danchenko backing away from the critical piece of information supporting probable cause and admitting it was merely hearsay.

    In the end, “The FBI was unable to determine whether a meeting between Sechin and Page took place,” Horowitz wrote in his report.

    Page said it’s “chilling” that the nation’s most powerful police force could act so cavalierly, disregarding basic investigative procedures like verifying tips and rumors before obtaining wiretaps on a U.S. citizen.

    Worse, he said, is how the FBI misled the secret FISA court. In a 2020 review of the applications, the powerful court determined that at least two of the surveillance warrants were invalid and therefore illegal. Page is now suing both the FBI and Justice Department for $75 million for violating his constitutional rights.

    Tyler Durden
    Wed, 05/04/2022 – 21:40

  • CIA Director Traveled For Secret Meeting With Saudi Crown Prince To Heal Souring Ties
    CIA Director Traveled For Secret Meeting With Saudi Crown Prince To Heal Souring Ties

    It was revealed this week in The Wall Street Journal that CIA director William Burns recently traveled to Jeddah, Saudi Arabia where he held a secretive meeting with Crown Prince Mohammed bin Salman.

    The purpose of the publicly unannounced visit, held in mid-April, appears to have been another attempt to try and heal souring relations with the Biden administration after the White House has been pressuring the kingdom to rapidly boost oil output as a vital backstop amid fears over unpredictable supply due to Russia’s war in Ukraine, and as Europe readies a controversial embargo on Russian oil.

    Saudi tensions have grown with Washington also over the Iran nuclear deal, which though on the ropes has been declared ‘not dead yet’ by the US administration. Both Israel and Saudi Arabia have in unison sought to torpedo progress in Vienna. US pressure to wind down the war in Yemen has also frustrated the Saudis, which have perhaps grown used to the blank check they were given to execute large-scale airstrikes on Yemenis for years prior going back to 2015.

    President Biden had also in the recent past (while on the campaign trail) referred to crown prince MbS as a “pariah” in relation to the murder of journalist Jamal Khashoggi. 

    “It was a good conversation, better tone than prior U.S. government engagements,” one US official was cited in WSJ as saying of the CIA chief’s meeting with MbS.

    This appears a far better result than when national security adviser Jake Sullivan was dispatched to Riyadh last year:

    According to a previous WSJ report, in September 2021 MbS shouted at US National Security Adviser Jake Sullivan after being pressed on the murder of Saudi journalist Jamal Khashoggi.

    At the time, MbS reportedly told Sullivan that the US can forget about asking OPEC to increase oil supplies to lower prices.

    Since then, OPEC has maintained its quotas despite pressures from the west to increase output following fuel shortages due to the sanctions against Russian energy exports. OPEC member states have opted to maintain ties with Moscow.

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

    In late March, as the Ukraine war raged and Yemen’s Houthis began to mount more daring missile and drone attacks on Saudi territory, the kingdom’s energy ministry stressed that Saudi Arabia will “not be held responsible” for any shortage of oil supplies to global markets. 

    Meanwhile the Saudis have been enjoying a windfall amid steadily rising oil prices, leaving little incentive to bow to the immediate urgings of Washington, which is on the one hand trying to severely punish Moscow for its Ukraine war, but on the other attempting to mitigate blowback on global energy supply and prices, and Western consumers.

    Tyler Durden
    Wed, 05/04/2022 – 21:20

  • Tamny: The Dollar Is 'Mighty' In the Way That Kim Jong Un Is 'Tall'
    Tamny: The Dollar Is ‘Mighty’ In the Way That Kim Jong Un Is ‘Tall’

    Authored by John Tamny via RealClearMarkets.com,

    Were he around, Adam Smith would marvel. All this talk of a “strong,” “weak,” or as is often said lately, a “mighty” dollar. Wait, what? Money just is, yet pundits of the moment quite literally act as though money grows on trees such that it grows “stronger” today, but perhaps not tomorrow. No, the money discussion isn’t serious. Again, Smith would be aghast.

    He would be given his common sense understanding that money’s sole purpose is as a measure to facilitate the exchange of goods and services. Producers of actual goods and services quickly happened on the blinding glimpse of the obvious that barter was inefficient, thus necessitating money. A common agreement among producers about a measuring stick of value would enable producers of varied goods and even more varied wants to trade with each other.

    At which point stability of the unit of value (money) was of utmost importance. Since money flows logically signaled the exchange of products and services for products and services, stability of the unit mattered. A vintner providing his wine for “dollars” logically wanted the money taken in for the wine to command equal value in the marketplace.

    All of which explains the eventual migration to gold. The appeal of the yellow metal wasn’t its shininess, or religious factors, or something else unrelated to exchange. Gold came to define money because the producers who comprise the market realized that it was the commodity least affected by everything else. Put another way, gold was remarkably stable. Which meant it was and is the ultimate money. Producers want equal value for their production, period.

    That gold still is the ultimate definer of money will logically trigger some in our midst, and without regard to political persuasion. Supposedly gold is “yesterday,” supposedly it’s the stuff of monetary cranks, or conspiracy theorists. In a sense it is. There are a lot of oddballs out there who are for what they imagine is a “gold standard,” and they’re for it without a clue of what gold’s historical purpose as a definer of money was. Oh well, no big deal. Fringe attaches itself to all ideas in some shape or form. That it does in no way vitiates the simple and modern truth that gold remains the ultimate money precisely because it remains the commodity least affected by everything else.

    Evidence supporting the above claim is $7 trillion in daily currency trading. Before President Nixon severed the dollar’s link to gold in 1971 (and by extension, the world’s currency link to gold), currency markets were largely non-existent. With good reason. With the dollar defined as 1/35th of a gold ounce, and the world’s currencies either explicitly or implicitly defined in terms of the dollar, currencies were very stable. Nothing to trade. That there’s so much trading today is powerful evidence that producers the world over still require stable money to exchange, which explains the frenzied “currency markets.” Something must mitigate the tautology that is currency instability wrought by money lacking a standard, hence the trillions in daily trading. When money had a commodity definition, it just was. Like a foot, inch, or minute, money was the quiet aspect of commerce that facilitated actual commerce. Again, pre-1971 “currency trader” wasn’t a profession. Money was as Smith defined it in The Wealth of Nations.

    Which is why he would once again marvel at the discussion of money today? The dollar is “strong”? How? Why would money be anything but a constant measure of value? Exactly.

    Still, the dollar is said to be strong today. It’s well up against the yen, the euro, the pound, etc. Okay, but what does that mean? There has to be context. Think about it. North Korean leader for life is Kim Jong Un is said to be 5’7”, or 5’4” without lifts in his shoes. In that case, Kim would be tall around 5-year old kids, but rather short around 35-year olds.

    The Wall Street Journal’s Joseph Sternberg claims the dollar is “mighty,” but he bases the claim on it rising versus other paper currencies that lack definition. In that case, is the dollar “mighty,” or is it just “less weak” than other currencies Sternberg is measuring it against. Market signals indicate that the dollar is just “less weak.”

    Indeed, while currencies no longer have a gold definition, gold still speaks through the markets. At present the “mighty” dollar is worth 1/1900th of a gold ounce. When the 21st century began a dollar purchased roughly 1/300th of a gold ounce, when Joe Biden entered office the price of gold was around 1/1853rd of a gold ounce. What the gold signal tells us is that the dollar has long been weak, but not notably weaker in recent years. In other words, it hasn’t been “mighty” as much as the pound, euro and yen have been in decline.

    The shame, as always, is that this is even being discussed. No one talks about a “strong” inch, foot, or minute. All three are quiet. As constant measures of length and time, they just facilitate the understanding of reality. Money is no different, or should be no different. Not wealth on its own, money that’s credible as a measure facilitates enormous wealth creation precisely because it fosters simple exchange among producers that makes possible immense specialization among the individuals who comprise what we call an economy. The more labor is divided among producers, the more productivity. It’s really quite simple.

    Sadly, money’s lack of quietude such that it’s “mighty,” “weak,” or somewhere in between means that a growing number of wildly talented people are sidelined from production in order to trade the chaos brought on by the pretense that what solely exists to enable trade should itself be traded. Economists will plan money and its “supply,” don’t you know?

    Yes, we all do. Prosperity is being sacrificed on the obnoxious conceit of economists and pundits who haven’t a clue about what money is. Yes, Smith would most certainly marvel.

    Tyler Durden
    Wed, 05/04/2022 – 21:00

  • Russia Indefinitely Bans Entry Of Japan's Prime Minister Among 63 Top Officials
    Russia Indefinitely Bans Entry Of Japan’s Prime Minister Among 63 Top Officials

    Russia announced Wednesday it has “indefinitely” banned 63 Japanese citizens including Prime Minister Fumio Kishida from ever entering the country over joining Washington’s anti-Russia campaign in response to the Ukraine war.

    Also on the banned entry list is Foreign Minister Yoshimasa Hayashi, Defense Minister Nobuo Kishi, and Finance Minister Shunichi Suzuki, as well as a number of members of parliament and top military officers, according to CNN citing state RIA.

    Diplomatic tensions have also risen of late due to Japan early last month removing Ukraine’s Azov battalion from its designated list of recognized terror and neo-Nazi groups. 

    Additionally Tokyo has jumped on the bandwagon of the West’s sanctions campaign, which has included introducing measures to freeze the assets of President Putin and some of his family members.

    Russian Ambassador to Japan Mikhail Galuzin had said at the time that Japan initiated the official change in status regarding Azov…

    “I think that the actions the corresponding Japanese structures undertook to exclude the Azov nationalist battalion from the category of neo-Nazi organizations stem from the fact that Japan, like other Group of Seven nations, supports the Kiev regime in all its actions, including those against the population of the Donetsk and Lugansk People’s Republics,” according to TASS.

    This fresh move to bar Japanese top officials is said to be in response to an “unprecedented anti-Russian campaign.”

    Russia’s Foreign Ministry said: “The administration of Fumio Kishida launched an unprecedented anti-Russian campaign, allows unacceptable rhetoric against the Russian Federation, including slander and direct threats,” as cited in RIA.

    “It is echoed by public figures, experts and media representatives of Japan, who are completely engaged in the attitudes of the West towards our country,” the statement continued.

    Tensions have also ratcheted in regional waters where Russia has been angered over planned US-Japan naval exercises in waters close to contested areas and disputed islands.

    Tyler Durden
    Wed, 05/04/2022 – 20:40

  • Greenwald: Homeland Security's "Disinformation Board" Is Even More Pernicious Than It Seems
    Greenwald: Homeland Security’s “Disinformation Board” Is Even More Pernicious Than It Seems

    Authored by Glenn Greenwald via greenwald.substack.com,

    The most egregious and blatant official disinformation campaign in the U.S. took place three weeks before the 2020 presidential election. That was when dozens of former intelligence officials purported to believe that authentic emails regarding Joe Biden’s activities in China and Ukraine, reported by The New York Post, were “Russian disinformation.” That quasi-official proclamation enabled liberal corporate media outlets to uncritically mock and then ignore those emails as “Russian disinformation,” and pressured Big Tech platforms such as Facebook and Twitter to censor the reporting at exactly the time Americans were preparing to decide who would be the next U.S. president.

    Official government portrait of Nina Jankowicz, appointed to serve as Executive Director of the new “Disinformation Board” to be housed within the U.S. Department of Homeland Security (posted by Jankowicz to Twitter)

    The letter from these former intelligence officials was orchestrated by trained career liars — disinformation agents — such as former CIA Director John Brennan and former Director of National Intelligence James Clapper. Yet that letter was nonetheless crucial to discredit and ultimately suppress the New York Post‘s incriminating reporting on Biden. It provided a quasi-official imprimatur — something that could be depicted as an authoritative decree — that these authentic emails were, in fact, fraudulent.

    After all, if all of these noble and heroic intelligence operatives who spent their lives studying Russian disinformation were insisting that the Biden emails had all of the “hallmarks” of Kremlin treachery, who possessed the credibility to dispute their expert assessment? This clip from the media leader in spreading this CIA pre-election lie — CNN — features their national security analyst James Clapper, and it illustrates how vital this pretense of officialdom was in their deceitful disinformation campaign:

    This same strategic motive — to vest accusations of “disinformation” with the veneer of expertise — is what has fostered a new, very well-financed industry heralding itself as composed of “anti-disinformation” scholars. Knowing that Americans are inculcated from childhood to believe that censorship is nefarious — that it is the hallmark of tyranny — those who wish to censor need to find some ennobling rationale to justify it and disguise what it is.

    They have thus created a litany of neutral-sounding groups with benign names — The Atlantic Council, the Institute for Strategic Dialogue, various “fact-checking” outfits controlled by corporate media outlets — that claim to employ “anti-disinformation experts” to identify and combat fake news. Just as media corporations re-branded their partisan pundits as “fact-checkers” — to masquerade their opinions as elevated, apolitical authoritative, decrees of expertise — the term “disinformation expert” is designed to disguise ideological views on behalf of state and corporate power centers as Official Truth.

    Yet when one subjects these groups to even minimal investigative scrutiny, one finds that they are anything but apolitical and neutral. They are often funded by the same small handful of liberal billionaires (such as George Soros and Pierre Omidyar), actual security state agencies of the U.S., the UK or the EU, and/or Big Tech monopolies such as Google and Facebook.

    Indeed, the concept of “anti-disinformation expert” is itself completely fraudulent. This is not a real expertise but rather a concocted title bestowed on propagandists to make them appear more scholarly and apolitical than they are. But the function of this well-funded industry is the same as the one served by the pre-election letter from “dozens of former intelligence officials”: to discredit dissent and justify its censorship by infusing its condemnation with the pretense of institutional authority. The targeted views are not merely wrong; they have been adjudged by official, credentialed experts to constitute “disinformation.”

    This scam is the critical context for understanding why the Biden Administration casually announced last week the creation of what it is calling a “Disinformation Board” inside the Department of Homeland Security (DHS). There is no conceivable circumstance in which a domestic law enforcement agency like DHS should be claiming the power to decree truth and falsity. Operatives in the U.S. Security State are not devoted to combatting disinformation. The opposite is true: they are trained, career liars tasked with concocting and spreading disinformation. As Politico’s Jack Schafer wrote:

    Who among us thinks the government should add to its work list the job of determining what is true and what is disinformation? And who thinks the government is capable of telling the truth? Our government produces lies and disinformation at industrial scale and always has. It overclassifies vital information to block its own citizens from becoming any the wiser. It pays thousands of press aides to play hide the salami with facts….Making the federal government the official custodian of truth would be like Brink’s giving a safe-cracker a job driving an armored car.

    The purpose of Homeland Security agents is to propagandize and deceive, not enlighten and inform. The level of historical ignorance and stupidity required to believe that U.S. Security State operatives are earnestly devoted to exposing and decreeing truth — as CNN’s Brian Stelter evidently believes, given that he praised this new government program as “common sense” — is off the charts. As Jameel Jaffer, formerly of the ACLU and now with the Columbia’s Knight First Amendment Institute put it, most troubling is “the fact that the board is housed at DHS, an especially opaque agency that has run roughshod over civil liberties in the past.”

    Typically, any attempt to apply George Orwell’s warning novel 1984 to U.S. politics is reflexively dismissed as hyperbolic: a free and democratic country like the United States could not possibly fall prey to the dystopian repression Orwell depicts. Yet it is quite difficult to distinguish this “Disinformation Board” from Ingsoc’s Ministry of Truth. The protagonist of Orwell’s novel, Winston Smith, worked in the Ministry of Truth and described at length how its primary function was to create official versions of truth and falsity, which always adhered to the government’s needs of the moment and were subject to radical change as those interests evolved.

    That the Board will be run by such a preposterous and laughable figure as Nina Jankowicz — a liberal cartoon, a caricature of a #Resistance Twitter fanatic who spent 2016 posting adolescent partisan tripe such as: “Maybe @HillaryClinton‘s most important point so far: ‘A @realDonaldTrump presidency would embolden ISIS.’ #ImWithHer” — has, in some sense, made this board seem more benign and harmless. After all,

    Subscribers can read the rest here.

    Tyler Durden
    Wed, 05/04/2022 – 20:20

  • Apple Poaches 31 Year Industry Veteran From Ford For Help Advancing Its Car Project
    Apple Poaches 31 Year Industry Veteran From Ford For Help Advancing Its Car Project

    It appears that Apple and Ford are engaging in some type of poaching war for employees. The latest example came this week, when it was reported that Apple has poached a 31 year veteran of the auto industry, formerly with Ford, to help ramp up development of its forthcoming electric vehicle.

    The tech giant has hired Desi Ujkashevic, who has worked at Ford since 1991 and has most recently been the company’s global director of automotive safety engineering, Bloomberg reported on Tuesday.

    She helped “oversee engineering of interiors, exteriors, chassis and electrical components for many Ford models,” the report says. 

    From Ford’s website:

    In her previous role, she was the Engineering Director for North American Vehicle Programs where she was responsible for Engineering for Car and Utility Programs managing engineering design deliverables including achievement of cost, profit, quality, and timing objectives. Prior to this, Desi was the Global Director, Interiors Engineering where she led the Strategy, Program execution, Quality and launch for Interiors on all Global Programs. Previous to this, Desi completed a 3-year international assignment in Germany, serving as Ford’s Director of Engineering for Body Systems and Design Operations.

    In addition to working on EVs, she helped develope the Ford Escape, Explorer, Fiesta and Focus, according to Mac Rumors. The outlet also noted that Bloomberg has reported “that Apple wants the ‌Apple Car‌ to be safer than cars from Tesla and Waymo, with backup systems to avoid driving system failures.”

    Recall, back in September 2021, Ford poached iconic auto engineer Doug Field from Apple. 

    Field, who previously worked as a vice president of Mac hardware engineering at Apple, returned to the Cupertino tech giant after a nearly five-year stint at Tesla to work on Apple’s secretive automotive initiative.

    Three years later, Field jumped ship again and the former Tesla and Apple exec was poached by Ford as its chief advanced technology and embedded systems officer. The latest transition marked a full circle for Field, who started his career as an engineer at Ford.

    Field, who led development of Tesla’s Model 3, most recently served as vice president of special projects at Apple, which also included the tech giant’s Titan car project. 

    Ford said Field will lead its vehicle controls, enterprise connectivity, features, integration and validation, architecture and platform, driver assistance technology and digital engineering tools.

    Tyler Durden
    Wed, 05/04/2022 – 20:00

  • Japan's Role In Global Financial (In)Stability, Part 2: Trapped Ahead Of Unavoidable Inflation
    Japan’s Role In Global Financial (In)Stability, Part 2: Trapped Ahead Of Unavoidable Inflation

    Authored by Michael Lebowitz via RealInvestmentAdvice.com,

    We ended “Japan’s Role In Global Financial (In)Stability, Part 1: Liquidity Crisis In The Making”  with the following quote regarding inflation from BOJ Governor Haruhiko Kuroda:  “The BoJ should persistently continue with the current aggressive money easing toward achieving the price stability target of 2% in a stable manner.”

    While many central bankers are anxiously waging war against inflation, the Japanese are egging it on. Over the last few weeks, the BOJ has offered to buy as many 10-year notes at 0.25% as the market will offer them. In central bank parlance, we call that unlimited QE. While the BOJ caps bond yields with “aggressive” QE, they are doing so at the expense of the yen.

    Carry Trade

    In Part 1, we discussed how Japanese citizens and pension plans invested abroad to earn higher yields. They were not the only ones taking advantage of the difference in interest rates between Japan and many other countries.

    Hedge funds and institutional investors worldwide were also making the most of the situation by borrowing yen cheaply in Japan, converting the yen to another currency, and investing the funds at much higher rates. Such a trade is called a carry trade.  

    To understand the allure of the carry trade, let’s consider a popular carry trade that many of you are actively engaged in.

    Buying a house with a mortgage is a type of carry trade. If you purchase a home for $500,000 with a $400,000 mortgage and $100,000 in cash/equity, you are leveraged at a rate of 5:1. Any change in the home price affects your return on the investment by a factor of five. For instance, a 10% increase in the price ($50k) results in a 50% gain on your equity ($50k/$100k).

    Leverage can be much greater than 5:1 in financial market carry trades, thus resulting in more significant gains and losses than in our example.

    Yen Carry Trades

    Unlike mortgage payments and house values denominated in dollars, the yen carry trade introduces currency risk. If you borrow in yen and it appreciates, you pay back the loan with more expensive yen. Therefore, appreciation of the yen eats into profits and discourages the yen carry trade.

    For example, you go to a Japanese bank and put down $100,000 in assets to borrow 1,000,000 yen for one year at 0%. You convert the yen to dollars and buy a one-year U.S. Treasury note at 3%. Assuming the yen’s value doesn’t change versus the dollar, the return will be 30% (3% * 10x leverage). If the yen appreciates by 1% over the year, and you did not hedge the currency risk, the return falls to 20%. 5% appreciation of the yen results in a 20% loss.  

    As you might surmise, yen carry trades are very sensitive to yen price movement. Understanding this, the BOJ has acted numerous times to arrest the yen’s appreciation. We share the following from the book The Rise of Carry:

    “Over a period of just seven months up to March 2004, the BOJ/MOF accumulated well over US$250 billion in foreign reserves in the attempt to prevent the yen from appreciating. At the end of this period, the yen dollar exchange rate was basically flatlining as the BOJ stood in the market and absorbed all the dollars that yen purchasers wished to sell.”

    At that time and many other times, the BOJ bought dollars and sold yen to keep the exchange rate stable. By minimizing currency risk, the yen carry trade retained its attractiveness to foreign investors. The size of the yen carry trade has declined in recent years, as shown below. Even at 100 trillion yen, carry trade investors control approximately $80 billion worth of assets worldwide.

    Japan’s Achilles Heel

    Currently, the yen is rapidly depreciating. It is the direct consequence of the BOJ’s aggressive actions to halt yields from rising. As we share in Part 1, Japan can ill afford higher interest rates with its massive debt levels.

    However, as the BOJ tries to stop rates from rising, they weaken the yen. Japan is in a trap. They can protect interest rates or the yen but not both. Further, its actions are circular. As the yen depreciates, inflation increases and the Japanese central bank must do even more QE to keep interest rates capped.

    The graph below shows the recent depreciation of the yen in blue. The graph charts the amount of yen needed to buy a dollar; ergo, the rising amount represents depreciation. With interest rates capped in Japan and in rising in America, you can see the widening difference in yields in orange. Essentially the graph highlights the stark contrast between the Fed’s hawkish policy and the BOJ’s dovish policy.  

    The BOJ, with full government support, appears willing and able to do everything in its power to keep monetary policy extremely aggressive regardless of what other central banks do. Such a stance by the Japanese central bank might be possible if inflation remains tame.

    Japanese CPI and PPI

    Japanese inflation is much lower than in most other major economic nations. However, there are signs that prices may catch up. For instance, the prices of input goods (PPI) have begun to rise rapidly. While CPI is still low at .9%, we must consider that PPI and inflation expectations, shown below, often lead CPI.  

    Japan may be already experiencing a jump in CPI that the government is minimizing, or the data is simply lagging. Either way, this inflationary impulse is far different from minor impulses in the past.

    Further, given the surging price of global commodities and Japan’s lack of natural resources, it will be near impossible to avoid inflation.

    Inflation and Demographics

    Many politicians say inflation is good because of Japan’s massive debt levels. It can essentially reduce the amount of debt as a percentage of the economy.

    It appears that for this reason, the BOJ wants more inflation. However, with more inflation, the BOJ must expend even greater efforts to ensure interest rates do not follow inflation higher.

    Let’s review Japan’s demographic situation. As we wrote in Part 1- “A poor demographic profile also hamstrings Japan’s economy. The working-age population is almost 15% below its peak of 1995. To make matters worse, over a third of their population is 65 or older and quickly becoming dependent on the remaining population.”

    A large percentage of Japan’s elderly population relies on fixed income portfolios. High inflation will be devastating to them. It will severely crush their purchasing power if interest rates do not rise in line with higher prices.  

    Regardless of whether the Japanese government accurately measures inflation, the citizens already feel it. In an admission that inflation is becoming problematic, the Japanese government is trying to ease citizens’ pain. Per Nikkei Asia- “Japan plans to spend 6.2 trillion yen ($48.2 billion) on additional gasoline subsidies, low-interest loans and cash assistance to alleviate the pain of consumers and small businesses facing rising prices, Nikkei has learned.”

    The Stage Is Set

    So, what happens if CPI data starts rising rapidly? More importantly, might high inflation and the limited means of many of Japan’s citizens force the BOJ to take a more hawkish stance to limit inflation? Doing so would involve fighting yen depreciation at the expense of interest rates. This hawkish scenario, which hasn’t been seen in Japan in thirty years, is deeply troubling.

    A strong yen and higher rates will entice liquidity to flow back to Japan. Yen carry trades will be reversed as their borrowing costs rise alongside an appreciating yen. Such is a recipe for a global drain of liquidity and possibly a financial crisis. Japanese citizens and pension funds will start to bring their money home to take advantage of higher yields without the currency risk.  

    Such a reversal of liquidity is not a Japan-centric problem as the tentacles of the yen carry trade spread through global financial markets. The loss of liquidity will be felt worldwide. 

    Summary

    The BOJ is trapped. They are conducting unlimited QE to keep rates low and but at the same time, weaken the yen, which promotes inflation. Unlike many other economic pundits, it is not the collapse of the yen that is our chief concern. It is the opposite. The BOJ has avoided inflation for thirty years. The onset of inflation might be too much for them to evade.

    Wayne Gretzky claims he was such a good hockey player because he went to where the puck would be. As investors, we should consider what Japan is doing today but focus on what they may have to do tomorrow.

    Tyler Durden
    Wed, 05/04/2022 – 19:40

  • Musk Reportedly Secures $10 Billion For Twitter Deal From 'Old Friends'
    Musk Reportedly Secures $10 Billion For Twitter Deal From ‘Old Friends’

    Private-equity giant Thoma Bravo (one of the first firms to become associated with Elon Musk’s campaign to buy Twitter) may have backed out of the deal, but that hasn’t stopped Musk from finding the money elsewhere. 

    According to a report published Wednesday night by the New York Post, Musk is reportedly closing in on securing $10 billion (out of the total $44 billion valuation for the deal) for his bid to buy Twitter from a group of “deep-pocketed” venture firms and family offices – although the Post report didn’t name the specific firms (although it did claim that the firms had experience backing other Musk ventures, including SpaceX. 

    Musk has said he’s trying to limit his own exposure to Twitter to just $15 billion (a pittance for the world’s richest man). He has also said he hopes to turn the company around and take it public again within three years. 

    One of the Post’s sources claimed that Musk has “[h]e has more than $10 billion of committed equity”.

    A source said that Musk had spent “hours” talking to Thoma Bravo founder Orlando Bravo, but in the end, one of Bravo’s deputies (or perhaps several of them) ended up torpedoing the deal.

    “My sense is Orlando Bravo wanted to do it but one or two of his top partners don’t want to,” a second source said.

    Most of the biggest buyout firms on the street have already turned Musk down, or said they would prefer to limit their exposure to debt finance (like Apollo).

    Other major buyout firms including Stephen Schwarzman’s Blackstone and billionaire Robert F. Smith’s Vista Equity Partners also have turned Musk down altogether, a source said. Apollo Global Management, meanwhile, is only interested in providing debt financing, according to sources close to the talks.

    On top of lining up the equity financing from other backers, Musk is also reportedly working on securing more than $5 billion in existing equity from previous Twitter shareholders (including Jack Dorsey and Fidelity), who – according to Musk’s plan – would be allowed to roll over their shares into the new privately-owned venture.

    Several banks have already said that they would rather not become directly exposed to Twitter. Citigroup, Credit Suisse and RBC have signaled that they’re open to providing loans against Musk’s Tesla stock (otherwise known as a margin loan), but they have balked at providing loans against Twitter’s equity because of the fact that this debt burden would eat up too much of Twitter’s cash flow. One of the Post’s sources said that the amount of leveraged financing in the Twitter deal was “crazy”. 

    Tyler Durden
    Wed, 05/04/2022 – 19:20

  • All Eyes On Florida's New Education Commissioner
    All Eyes On Florida’s New Education Commissioner

    Authored by Robert Pondiscio via RealClear Policy (emphasis ours),

    Last Friday, Florida’s State Board of Education voted to approve Republican Senator Manny Diaz, Jr. the state’s new education commissioner. Diaz makes history as Florida’s first Hispanic education commissioner.

    (AP Photo/Wilfredo Lee)

    He is also, on Day One, the most important and closely watched state education chief in the country. His new boss, Florida governor Ron DeSantis, has his eye on the White House in 2024; the Governor’s political appeal and personal brand rests heavily on education, particularly a series of controversial measures exerting the state’s authority over controversial curriculum content. It will fall to Diaz to communicate, execute, and enforce these polarizing initiatives. His success or failure may therefore exert an outsize effect of DeSantis’ national reputation and political fortunes.

    Diaz brings a strong education background to the job. He’s a former high school social studies teacher who began his teaching career at the same high school from which he graduated, before moving to another local school where he rose to become an assistant principal. To this day, he is still certified to teach in Florida. At the same time, he’s a staunch champion of school choice and worked as a legislator representing the Miami-Dade area to expand access to Florida’s many public scholarship programs and to grow the state’s charter school sector. First elected to the Florida House of Representatives in 2012, he served three terms before winning his Senate seat in 2018. Most recently he was the Senate sponsor of House Bill 7, aimed at curbing “corporate wokeness” and eliminating critical race theory from Florida schools. Diaz stood alongside DeSantis at a signing ceremony for the bill two weeks ago. “I’m clearly straight in line with his ideology and we have been that way since he took office,” Diaz told me in an interview shortly before the state board accepted DeSantis’s recommendation last week.

    As a senator, Diaz supported Florida’s Parental Rights in Education law, famously derided by critics as the “Don’t Say Gay” bill, which forbids schools from teaching lessons on sexual orientation or gender identity in grade K-3 classes, or at any grade level if not deemed age-appropriate. “We have to let kids be kids,” Diaz argued on the Senate floor in favor of the measure he will now be responsible for implementing. “There are topics that our kids are not mature enough to grasp.” Similar parental rights bills have been introduced in dozens of states, ensuring further scrutiny of the effects of the Florida law on which most of those measures have been modeled.

    Overlooked entirely in national coverage of these “culture war” measures is Florida’s decision to eliminate its multi-day state tests and replace them with a “progress monitoring system” that will assess students three times a year through tests that take a few hours instead of a few days. The intention is to reduce time spent on testing although critics, including the state’s teachers’ unions, insist the new system will have the opposite effect and increase time spent on testing. It will fall to Diaz to make good on DeSantis’ promise that the new system will be less burdensome and provide more timely and individualized feedback to students, teachers, and parents.

    Florida ranks among the most school choice-friendly state in the nation. Nearly half the state’s children attend schools other than an assigned local public school. When I met first met Diaz two years ago, he was one of several Florida Republicans predicting the state would be the first universal choice state in the country — a prediction he tempered when we spoke last week. “There are legislative leaders that have that vision,” he said. “That’s an ongoing conversation, I’d like to have with the governor to see what his vision is going forward on choice programs.”

    But without question, the national spotlight will shine the brightest on Florida as Diaz oversees implementation of the spate of new laws exerting the state’s authority on classroom content, which has implications far beyond the state’s classroom: those measures are central to DeSantis’s brand. Diaz sounded unphased by the high stakes when we spoke last week. “My goal is to have conversations with superintendents, school board members, with parents, teachers, and stakeholders about what it means, and to make sure that we are teaching our standards and that we’re not having material in there that violates the law,” he said. “Despite all of the noise around it, the aim and the goal of these pieces of legislation are pretty clear.”

    Tyler Durden
    Wed, 05/04/2022 – 19:00

  • This Is What Sparked Today's Euphoric Post-Fed Meltup
    This Is What Sparked Today’s Euphoric Post-Fed Meltup

    A historic Fed decision is in the books and Fed Chair Powell did not disappoint. As Oanda’s Edward Moya writes, the Fed delivered the first-rate hike in 22 years and signaled more rate increases are appropriate and that the balance sheet runoff will begin in June, all of which was as expected. What was somewhat surprising is Powell’s vow (for now) that larger rate hikes are not on the table. ​Risky assets got a boost after Fed Chair Powell said, “So a 75 basis point increase is not something that the committee is actively considering.” Surprisingly, Powell’s confidence that large hikes aren’t coming takes place as inflation is not slowing down anytime soon, but that is not scaring Powell as his confidence grows that he can slow inflation without triggering a recession.

    And yet, the truth is that virtually nobody actually expected 75bps of rate hikes which emerged as an extra hawkish bogeyman in the last minute, allowing Wall Street to give itself a dovish release is this unlikely outcome did not take place. Sure enough, in his Fed post-mortem, Standard Chartered’s Steve Englander asks rhetorically “why the optimistic market reaction?” and answers:

    We expected investors to approach this FOMC worried about whether the FOMC would explicitly or implicitly endorse shifting to a hiking pace of 75bps down the road, or raise the possibility of tightening well above neutral. Such fears were evident in asset price moves as the FOMC approached. We consequently saw a risk that an “as expected” outcome would be viewed as dovish as this added risk premium dissolved. While today’s price moves were dramatic, 5Y UST yields and BBDXY are still well above the levels that prevailed for almost the entire month of April. So it is fair to say that positioning and excess pessimism reflect a big part of the market reaction.

    There is more: as we wrote repeatedly over the past week, the Fed is set to hike aggressively right into a recession, and it appears that even Powell is becoming concerned about this eventuality. To wit, Englander writes in his post-Fed note that “we also saw a few tentative indications that the Fed sees a little more risk of a slowdown (or at least a moderation in activity), and that it did not want to endorse the most hawkish views under discussion at this point.”

    Some more thoughts from Englander:

    Fed Chair Powell went out of his way to point to 50bps hikes as the norm, provided inflation and activity evolved according to plan, but didn’t endorse 75bps. He mentioned a possibility that jobs growth would slow, one of the first Fed characterizations of the jobs market as anything other than ‘red hot’. He pointed to some slowing of inflation in monthly data (while indicating that the Fed wanted to see concrete indications that inflation was coming off). Overall, the tone was much more balanced than at the January and March FOMC meetings.

    Today’s tone shift is in line with our expectation that activity and, eventually, inflation will slow as 2022 progresses, and ultimately be reflected in a significantly lower fed funds path and USD level once we slide into a recession some time in the second half of 2022 at which point the Fed will not only cut rates but resume QE. However, until the slower growth trend is well established, the ups and downs of data could produce big swings in expectations and in the tone of Fed commentary.

    Finally, how did this “strategic” easing of Fed tensions translate into the actual tactical buying euphoria? Simple: as we first explained in “Buyback Blackout Period Is Over, And 10 More Reasons Why Goldman Calls The End Of The Market Carnage“, positioning was almost universally bearish, not only with AAII net bullish sentiment tied for the lowest ever…

    … but hedge funds were almost uniformly positioned for much more losses, with a huge imbalance in put/call ratios as well as an extremely negative dealer gamma. Recall what Goldman said over the weekend:

    S&P Index Gamma (no longer long) given institutional “forced hedging” of May puts – do we see monetization of puts after the big FOMC event next week? Dealer long gamma has been unwound, and works in both directions. This will exacerbate, not buffer moves in the same direction as the market.

    Indeed, today’s “unclenching” which was catalyzed by Powell “taking 75bps off the table”, sparked precisely the epic short squeeze , both in cash and gamma, that Goldman expected as puts were aggressively monetized, sending the VIX tumbling.

    Another take on this phenomenon comes from our friends at Spot Gamma, who have shared the following video explaining how vol sellers drove today’s 3% market rally (if only practically speaking, it was of course Powell who started it).

    That said, there is some disagreement about what happens next is: according to SpotGamma, 4,300 still remains a line of resistance on the S&P, while Oanda is more bullish and concludes that “risky assets can rally now that Wall Street has fully priced in the rest of the year’s rate hikes by the Fed.” While it is easy to turn optimistic here, a warning: the last thing the Fed wants is for its 50bps rate hike – the biggest in 22 years – to be viewed as a green light to more risk on. In fact, if we indeed see stocks surging in the next few days, we fully expect the next crew of Fed talking heads which will hit the mic as soon as Friday…

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

    … to warn that not only is a 75bps – and even as 100bps – rate hike on the table, but that an emergency, inter-meeting announcement is distinctly positive if algos ignore the Fed call at their own peril.

    Tyler Durden
    Wed, 05/04/2022 – 18:40

  • Stocks Soar To Best Fed-Hike-Day Performance In 44 Years
    Stocks Soar To Best Fed-Hike-Day Performance In 44 Years

    Tl:dr: This was the biggest gain on a Fed day since Dec 2008 (a rate-cut day), but this was the greatest upside-day for the S&P 500 on a Fed Rate-Hike day since Nov 1978!!

    And here’s what happened last time the S&P rallied this much on a Fed rate-hike day… (we made new lows)

    *  *  *

    “Inflation is much too high,” warned Fed Chair Powell in his opening words, in an effort to assure the American people – and the markets – that they are really really serious this time, pinky-swear, about hiking even if the market pukes its guts out… (or not).

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

    The market did not like that news (stocks fell, yields rose, rate-hike-odds rose)

    But then Powell tried to assuage fears of a 75bps hike:

    “A 75 basis point increases is not something the committee is actively considering,” but noted that the “next couple of meetings” will be 50bps hikes.

    The market loved that news (stocks surged, USD dumped, yield curve steepened with short-end yields plunging)… monkeyhammering all the risk away (VIX crashed to a 24 handle)…

    STIRs immediately priced-out the odds of a 75bps hike in June…

    Source: Bloomberg

    And the rate-hike-trajectory also dropped on Powell’s more dovish tilt…

    Source: Bloomberg

    The short-end of the yield curve collapsed (2Y -13bps, 30Y -2bps)…

    Source: Bloomberg

    …and the yield curve steepened drastically…

    Source: Bloomberg

    Notably Bloomberg’s Ira Jersey warned that “The market may be interpreting the lack of a 75-bp move incorrectly as ‘dovish’ given the strong rally in the front end of the yield curve. A string of 50-bp hikes, without a 75-bp move, could actually mean a higher terminal rate and over time may not mean much for the short end of the yield curve. There could be an opportunity building in the curve.”

    Additionally, Powell warned The Fed could act “expeditiously” – which could easily mean more than three 50bps-hikes are in order if inflation remains high.

    10Y Yields reversed once again at 3.00% (exactly where they did in Dec 2018 before Powell folded)…

    Source: Bloomberg

    Stocks went utterly vertical on the ‘lack of 75bps move’ (as the dramatically oversold/over-hedged positioning unwound again)…Yes, the Nasdaq exploded 3.5% higher on the day (from down 1.5% this morning)….

    ‘That escalated quickly…”

    All the sectors shot higher, led by tech and discretionary (but energy was best on the day)…

    Source: Bloomberg

    …apparently ignoring the fact that they are not at all priced for a series of 50bps hikes…

    Source: Bloomberg

    The chart above shows what happened after the last FOMC meeting – will we see another melt-up squeeze? This afternoon saw a serious short-squeeze begin…

    Source: Bloomberg

    So that’s it then… The Fed has the problem in hand and a soft landing is now priced in (and a hard landing, in case we dip again).

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

    The dollar tumbled during the press conference…

    Source: Bloomberg

    The Ruble soared to its strongest relative to the USD since Feb 2020…

    Source: Bloomberg

    Oil prices soared on the day on the heels of EU embargo headlines – erasing all of Biden’s ‘improvements’ in price…

    Finally, Powell admitted that The Fed is useless:

    “Our tools don’t really work on supply shocks, our tools work on demand.”

    Which could be why Bitcoin quickly ripped up to $40k…

    Source: Bloomberg

    Gold was also bid on his comments…

    As hard as Powell tried to rescue his credibility, crypto and gold exposed the lie.

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

    As one veteran trader noted: “it seemed like Powell reverted back to his ‘inflation is transitory’ perspective… good fucking luck with that!”

    Tyler Durden
    Wed, 05/04/2022 – 18:24

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