Jun 06

Today’s News 6th June 2022

  • Visualizing The World's 50 Biggest Data Breaches From 2004–2021
    Visualizing The World’s 50 Biggest Data Breaches From 2004–2021

    As our world has become increasingly reliant on technology and data stored online, data breaches have become an omnipresent threat to users, businesses, and government agencies; and as Visual Capitalist’s Paul Sykes details below, in 2021, a new record was set with more than 5.9 billion user records stolen.

    This graphic by Chimdi Nwosu visualizes the 50 largest data breaches since 2004, along with the sectors most impacted. Data was aggregated from company statements and news reports.

    Understanding the Basics of Data Breaches

    A data breach is an incident in which sensitive or confidential information is copied, transmitted or stolen by an unauthorized entity. This can occur as a result of malware attacks, payment card fraud, insider leaks, or unintended disclosure.

    The targeted data is often customer PII (personally identifiable information), employee PII, intellectual property, corporate data or government agency data.

    Date breaches can be perpetrated by lone hackers, organized cybercrime groups, or even national governments. Stolen information can then be used in other criminal enterprises such as identity theft, credit card fraud, or held for ransom payment.

    Notable Data Breaches Since 2004

    The largest data breach recorded occurred in 2013 when all three billion Yahoo accounts had their information compromised. In that cyberattack, the hackers were able to gather the personal information and passwords of users. While the full extent of the Yahoo data breach is still not fully realized, subsequent cybercrimes across the globe have been linked to the stolen information.

    Here are the 10 largest data breaches by amount of user records stolen from 2004–2021.

    The massive Yahoo hack accounted for roughly 30% of the 9.9 billion user records stolen from the Web sector—by far the most impacted sector. The next most-impacted sectors were Tech and Finance, with 2 billion and 1.6 billion records stolen, respectively.

    Although these three sectors had the highest totals of user data lost, that doesn’t necessarily imply they have weaker security measures. Instead, it can probably be attributed to the sheer number of user records they compile.

    Not all infamous data breaches are of a large scale. A smaller data breach in 2014 made headlines when Apple’s iCloud was hacked and the personal pictures of roughly 200 celebrities were disseminated across the internet. Although this highly targeted hack only affected a few hundred people, it highlighted how invasive and damaging data breaches can be to users.

    The Cost of Data Breaches to Businesses

    Every year data breaches cost businesses billions of dollars to prevent and contain, while also eroding consumer trust and potentially having an adverse effect on customer retention.

    A 2021 IBM security report estimated that the average cost per data breach for companies in 2020 was $4.2 million, which represents a 10% increase from 2019. That increase is mainly attributed to the added security risk associated with having more people working remotely due to the COVID-19 pandemic.

    Measures to Improve Data Security

    Completely preventing data breaches is essentially impossible, as cybercrime enterprises are often persistent, dynamic, and sophisticated. Nevertheless, businesses can seek out innovative methods to prevent exposure of data and mitigate potential damages.

    For example, after the iCloud attack in 2014, Apple began avidly encouraging users to adopt two-factor authentication in an effort to strengthen data security.

    Regardless of the measures businesses take, the unfortunate reality is that data breaches are a cost of doing business in the modern world and will continue to be a concern to both companies and users.

     

    Tyler Durden
    Mon, 06/06/2022 – 02:45

  • Russia Sees Extra $6.4 Billion Oil Revenue In June As Prices Rally
    Russia Sees Extra $6.4 Billion Oil Revenue In June As Prices Rally

    Authored by Tsvetana Paraskova via OilPrice.com,

    • Russia’s Finance Ministry expects $6.37 billion in additional oil revenue in June.

    • Russian oil exports haven’t fallen off a cliff, while it continues to sell natural gas to most of the EU.

    • Russian crude exports could drop if the EU’s sixth’ sanctions package is fully implemented.

    Russia expects to receive as much as $6.37 billion in additional oil and gas revenues in June, its finance ministry said on Friday, as energy commodity prices have rallied since the Russian invasion of Ukraine.

    According to estimates released on Friday by the Finance Ministry, Russia expects its additional revenue from oil and gas sales to be 393 billion rubles, or $6.37 billion, this month. Additional budget revenues are expected at $10.66 billion (656.6 billion rubles) for the months of May and June because of the higher-than-expected oil prices, Russia said.

    Russia has been benefiting from the energy commodities rally, which intensified after the invasion of Ukraine. Despite Western sanctions designed to hurt Russia’s oil revenues and war chest, Moscow is still getting a lot of additional billions of U.S. dollars in oil and gas revenues.

    So far, Russian oil exports haven’t fallen off a cliff, while it continues to sell natural gas to most of the EU, including to some of the biggest consumers and economies such as Germany and Italy.

    However, under the sixth sanctions package from the EU, Russian oil exports could drop further as the EU is currently endorsing a ban on Russian oil imports via sea that also aims to cut Russia off the tanker insurance market and limit its ability to redirect seaborne oil exports to third countries.  

    Russia said this week its oil production would rebound in June and expressed confidence it would be able to find new markets for its oil.

    Russia is boosting exports to India and China, but analysts doubt the Asian market would be able to absorb all the 4 million bpd of oil Russia was sending to Europe before the war. 

    Russia could see between 2 million bpd and 3 million bpd of its oil exports—or about a quarter of the country’s oil production—disappear from the global market by end-2022, Fitch Ratings said on Wednesday.

    “We believe that redirecting of all Russian oil and products volumes may not be possible due to infrastructural limitations, buyers’ self-restrictions and logistical complications, such as potential restrictions on providing insurance for cargos carrying Russian oil,” Fitch added. 

    Tyler Durden
    Mon, 06/06/2022 – 02:00

  • Onshoring Semiconductor Capacity Is Crucial To National Security
    Onshoring Semiconductor Capacity Is Crucial To National Security

    Authored by Zachary A. Collier via RealClear Politics (emphasis ours),

    When you think about national security, you probably don’t immediately think about semiconductors. These tiny chips are the “brains” enabling all the computational capabilities and data storage that we take for granted today. Chips power virtually every sector of the economy – including data centers, automotive, healthcare, banking, and agriculture. As a consequence of their widespread use, semiconductors have grown to become a $555 billion global industry, and are the world’s fourth most traded product. Semiconductor manufacturing and advanced packaging have been cited frequently as one of the main critical supply chain priorities for the nation.

    A steady source of uninterrupted, trusted chips is necessary for the security of the nation – supporting the readiness of the U.S. military and protecting critical infrastructure like the electric grid. The problem is that most chips are fabricated outside of the U.S., in the vulnerable region of Southeast Asia – hence the security issues. Around three quarters of global chip production capacity comes from Southeast Asia. The U.S., on the other hand, represents only 12% of global manufacturing supply, while accounting for around 25% of global demand. This supply-demand imbalance leaves the U.S. in a precarious position, dependent upon foreign sources of supply such as South Korea and Taiwan. Amidst geopolitical tensions in that region, there are compelling reasons to consider strengthening the supply of semiconductor production at home.

    The first consideration is cybersecurity. The security of the chips, embedded within everything from your smart phone to your laptop, plays a critical role in cybersecurity. In fact, databases such as the Common Weakness Enumeration list a number of known hardware weaknesses. Furthermore, given the complex global supply chain, there are ample opportunities for foreign adversaries to maliciously tamper with chips and other electronic assemblies.

    Beyond the security implications, semiconductors play an important role within the economy. The U.S. semiconductor industry employs roughly 277,000 people and generates $55.8 billion in national GDP. The jobs in this industry pay higher than average wages. For every one worker in the semiconductor industry, an additional 5.7 jobs are supported indirectly through the supply chain or related economic activity. However, the current global chip shortage has reduced U.S. GDP by around $240 billion. Because of the chip shortage, semiconductor inventories for auto makers have dropped 43%, and 70% of auto manufacturers have announced production stoppages. The result is that the global auto industry produced 7.7 million fewer cars in 2021. Without chips, many industries simply cannot support demand.

    Of course, building domestic capacity, especially leading-edge capacity, will require commitment, effort, and buy-in by multiple parties. According to a BCG report, building a semiconductor fabrication facility can cost $5-20 billion in upfront capital expenditures, with a ten-year total cost of ownership ranging from $11-40 billion. The report finds that U.S. costs are 25%-50% higher than in other locations such as South Korea and Taiwan, with 40%-70% of this gap accounted for by government incentives. Despite this, trends such as remote work, the increased use of artificial intelligence, and growing demand for electric vehicles will result in continued increases in semiconductor demand.

    This is why legislation is an important first step to ensure domestic production. The CHIPS for America Act, which was passed as part of the FY 2021 National Defense Authorization Act, authorizes provisions such as grants for strengthening domestic semiconductor manufacturing and research capabilities. The Senate passed the U.S. Innovation and Competition Act which includes $52 billion in investments supporting the CHIPS Act, while the House passed its own version of competitiveness legislation called the America COMPETES Act that also includes $52 billion in CHIPS Act funding. The Senate and the House are now negotiating the details of the two separate bills to be combined into the Bipartisan Innovation Act. A complementary bill called the FABS Act provides an investment tax credit for construction of domestic semiconductor manufacturing facilities. According to the Semiconductor Industry Association, the CHIPS Act incentives will produce 66,000 research and development jobs, as well as thousands of additional jobs in construction and manufacturing. Together, the grants in the CHIPS Act and the tax incentives of the FABS Act are intended to kick-start the construction and expansion of domestic semiconductor manufacturing facilities and allow for investment in the technology and operations for sustained growth over time.

    As we have learned through the pandemic, the global supply chain is surprisingly brittle, and dependence on foreign sources for critical components like semiconductors leaves the nation vulnerable. Cultivating a domestic manufacturing ecosystem can be done by onshoring semiconductor fabrication capabilities and providing market incentives – strengthening national security and promoting economic prosperity.

    Zachary A. Collier, Ph.D., is an assistant professor of management at Radford University. He is a visiting scholar at the Center for Hardware and Embedded Systems Security and Trust (CHEST).

    Tyler Durden
    Sun, 06/05/2022 – 23:30

  • Central China's State Bailout Good News For Similar Developers
    Central China’s State Bailout Good News For Similar Developers

    By Shen Hong, Bloomberg Markets Live commentator and reporter

    The de facto partial state bailout of Central China Real Estate is certainly a sign of things to come, and bodes well for small- to mid-sized Chinese developers of strategic importance to local authorities.

    The chairman of the Henan-based developer, China’s 37th-largest, will sell a 29% stake in the firm to a real estate company owned by the provincial government. The proposal followed a December move by China South City Holdings to also sell an identical stake to a state firm. The moves strongly hint at local coordination based on instructions from the very top, as Beijing steps up efforts to prevent the property sector’s liquidity crisis from deteriorating into a major systemic risk.

    To be sure, not all distressed developers will be as lucky as the above-mentioned two. Henan is not a rich province but Central China happens to be a major local employer and taxpayer. As one of the nation’s most populous provinces, Henan also can’t afford to see angry homebuyers stage street protests if the developer collapses and leaves behind unfinished apartments.

    One last thing: the two episodes need not rekindle concerns about aggressive nationalization of private enterprises. Beijing is proactively helping these struggling developers, with likely no intention to fully own them in the long run.

    Real estate is becoming a sunset industry in China, as the population ages fast and economic growth slows further. It’s not where state firms want to be, unless called upon to do the national service of building cheap public housing.

    Tyler Durden
    Sun, 06/05/2022 – 22:30

  • Three Chinese Astronauts Dock At New Space Station For Six Month Stay
    Three Chinese Astronauts Dock At New Space Station For Six Month Stay

    Three Chinese astronauts, or taikonauts, have docked at the under-construction Tiangong space station Sunday evening after launching from the Jiuquan Satellite Launch Center in the Gobi Desert earlier in the day, according to Space.com. 

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    The three Shenzhou 14 taikonauts — commander Chen Dong, Liu Yang, and Cai Xuzhe — will spend six months on the Tiangong, overseeing the addition of two laboratory modules (with the Wentian module set to launch next month and the Mengtian in October). When the modules are connected, Tiangong will be a T-shaped station smaller than the aging International Space Station (ISS).

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    The trio of taikonauts will welcome Shenzhou 15 crew aboard the station at the end of the year, making the first time six people will be living aboard.

    Here’s a docking video of the spacecraft with the station.

    Last month, China released a never-before-seen image of Tiangong, orbiting above the Earth at 250 miles. 

    The station’s completion will mark President Xi Jinping’s ambitions to be a leader in space as NASA is set to retire the aging ISS by 2031. This could mean China might have the only space station orbiting the Earth unless the US and its partners announce plans for a new station. 

    Tyler Durden
    Sun, 06/05/2022 – 22:00

  • House Judiciary Democrts Vote To Advance Expansive Gun Control Bill
    House Judiciary Democrts Vote To Advance Expansive Gun Control Bill

    Authored by Joseph Lord via The Epoch Times (emphasis ours),

    The House Judiciary Committee voted this week to advance a gun control bill in the wake of a deadly shooting in Uvalde, Texas.

    Chairman Jerrold Nadler (D-N.Y.) speaks during a House Judiciary Committee mark up hearing in the Rayburn House Office Building in Washington on June 2, 2022. (Anna Moneymaker/Getty Images)

    The final vote fell along party lines, with every committee Republican voting against the legislation and every committee Democrat voting to advance it.

    Splits between Democrats and Republicans were on full display during the hearing, which focused on the “Protecting Our Kids” Act, H.R. 7910.

    That bill, among other provisions, would ban the sale of “any semiautomatic centerfire rifle or semi-automatic centerfire shotgun that has, or has the capacity to accept, an ammunition feeding device with a capacity exceeding 5 rounds” to citizens below the age of 21; currently one only needs to be 18 to buy such a weapon.

    It would also codify the Department of Justice’s controversial ban on bump stocks, a weapon modification that increases the fire rate of a semiautomatic firearm.

    In addition, it would also make it a federal crime to possess weapons that critics have pejoratively labeled “ghost guns,” usually describing homemade or 3D-printed weapons without a serial number.

    Democrats pushed strongly for the passage of the bill, saying that stricter gun control laws are needed in response to the shooting in Uvalde that left 19 children and two adults dead.

    The legislation “might have saved those children in Uvalde,” Judiciary Chairman Jerry Nadler (D-N.Y.) said, adding “whoever saves one life, it’s as if he saved the whole world.”

    Rep. David Cicilline (D-R.I.) argued at one point in the hearing that arguments against the bill hinging on the Second Amendment are faulty.

    “The Supreme Court has ruled time and time again that the Second Amendment is not absolute,” he said.

    Others pushed for the bill as a matter of urgency, and called for various changes to Senate rules and the Supreme Court’s composition if necessary to pass the legislation.

    “This epidemic of gun violence is not unstoppable,” said Rep. Mondaire Jones (D-N.Y.). “It is a choice—a choice you could make differently at any time, a choice between our lives and your guns.”

    “Time and time again you have chosen to put your right to kill over our right to live,” Jones added. “But your selfishness and your indifference have not killed our hope.”

    “If the filibuster stops us, we will abolish it,” Jones said. “If the Supreme Court objects, we will expand it. And we will not rest until we have taken weapons of war out of circulation in our communities.”

    “Each and every day, we will do whatever it takes to end gun violence,” Jones said. “Whatever it takes,” he emphasized.

    Republicans, by contrast, have pushed for legislation to address mental illness and to increase school security, but have rejected efforts to limit gun rights.

    While what happened in Uvalde was “a tragedy,” Judiciary Ranking Member Jim Jordan (R-Ohio) said, “protecting children is not a Democrat or Republican issue.”

    Jordan called instead for legislation based on making schools safer rather than restricting gun rights, a sentiment shared by many other Republicans.

    “We’re all for that,” Jordan said. “But we’re not for taking away Second Amendment liberties.”

    Rather, Jordan said, we should focus on discovering “the why” of mass shootings: “Until we discover the ‘why,’ we’re never going to solve the problem.”

    “The left and the Democrats’ response to practically every problem is to take more power and control into the national government, or take away individuals’ rights, or throw taxpayer money at the problem—sometimes both,” said Rep. Andy Biggs (R-Ariz.).

    “That’s why they tend to exacerbate practically every problem without resolution,” Biggs said. “They misidentify the cause of virtually every effect.

    “The misuse of guns for evil or even criminal purposes is another example. Millions of Americans safely and responsibly own and use guns.”

    Rep. Dan Bishop (R-N.C.) echoed the sentiment.

    “You are not going to bully your way into stripping Americans of fundamental rights,” Bishop said.

    In a statement, Speaker of the House Nancy Pelosi (D-Calif.) said that the House would vote on the legislation next week.

    Though the legislation is likely to pass the lower chamber, it has little to no chance of passing in the Senate, where it would need the support of at least 10 Republicans to overcome the 60-vote filibuster threshold.

    Tyler Durden
    Sun, 06/05/2022 – 21:30

  • Ukraine Foreign Minister Furious After Macron Says Russia Must Not Be Humiliated
    Ukraine Foreign Minister Furious After Macron Says Russia Must Not Be Humiliated

    French President Emmanuel Macron sparked a cascade of virtue outsignaling and social media outrage after he said that “it is vital that Russia is not humiliated so that when the fighting stops in Ukraine a diplomatic solution can be found,” adding that he believed Paris would play a mediating role to end the conflict.

    While Macron has sought to maintain a dialogue with Vladimir Putin since Moscow’s invasion of Ukraine in February, his stance has been repeatedly criticized by some staunch anti-Russia eastern European and Baltic states as they see it as undermining efforts to pressure Putin to the negotiating table.

    “We must not humiliate Russia so that the day when the fighting stops we can build an exit ramp through diplomatic means,” Macron said in an interview to regional newspapers published on Saturday. “I am convinced that it is France’s role to be a mediating power.”

    Predictably, Ukraine’s foreign minister, Dmytro Kuleba, who spends most of his time on twitter, slammed Macron’s comments, responding on Twitter on Saturday that “calls to avoid humiliation of Russia can only humiliate France and every other country that would call for it. Because it is Russia that humiliates itself. We all better focus on how to put Russia in its place. This will bring peace and save lives.”

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    All this comes as western media drops much of the propaganda facade over the past three months and admits that the Ukraine war has actually been a disaster for, well, Ukraine (NYT: “Ukraine War’s Geographic Reality: Russia Has Seized Much of the East“, WaPo: “Ukrainian volunteer fighters in the east feel abandoned“).

    Meanwhile, while all some do is tweet, Macron has actually spoken with Putin repeatedly since the invasion as part of efforts to achieve a ceasefire and begin a credible negotiation between Kyiv and Moscow. “I think, and I told him, that he is making a historic and fundamental mistake for his people, for himself and for history,” Macron said.

    France has supported Ukraine militarily and financially, but until now Macron has not been to Kyiv to offer symbolic political support like other EU leaders, something Ukraine has wanted him to do. Macron said he had not ruled out going. Paris sends offensive weapons including Caesar howitzer canon taken from French army stocks. Macron said he had asked weapons manufacturers to accelerate production.

    Tyler Durden
    Sun, 06/05/2022 – 21:00

  • Asylum Seekers Overwhelm Shelters In Portland, Maine
    Asylum Seekers Overwhelm Shelters In Portland, Maine

    Authored by Steven Kovac via The Epoch Times (emphasis ours),

    Facing an impending humanitarian crisis, Portland Family Shelters Director Mike Guthrie has a simple message to anyone who will listen, “We need help!”

    Families of asylum seekers warehoused outside of an overcrowded family shelter in Portland, Maine, on May 25, 2022. (Steven Kovac/Epoch Times)

    Guthrie, a hands-on, frontline worker in the effort to feed, clothe, and house a continuous flow of foreign nationals arriving in Portland by airplane or bus from the U.S. southern border, told The Epoch Times, “Our family shelter facilities, our warming room, and even area hotel space is at capacity. We have maxed out our community resources.

    “The time is coming when I’m going to have to look a dad in the face and tell him and his family that I don’t know where they’re going to sleep tonight.”

    The Portland Family Shelter is a complex of four rented buildings in various states of renovation located in the heart of downtown.

    Some of the structures are gradually being converted into small apartments where up to four families will share a single kitchen and bathroom.

    All four buildings are overflowing their present capacity.

    “The intake is greater and faster than we can process,” Guthrie said.

    Mike Guthrie, director of the family shelter in Portland, Maine, on May 25, 2022. (Steven Kovac/Epoch Times)

    To accommodate the stream of new arrivals, the family shelter program has in recent months placed 309 families (1,091 people) in eight hotels located in five neighboring municipalities spread over three counties of southeastern Maine’s prime tourist and vacation region.

    Those moves, with their attendant complications and problems, have resulted in some pushback from the local Mainers who fear their prized relaxed lifestyle may never be the same.

    And they resent not having a voice in any of it.

    “It’s just part of the state government’s plan to bring the slums to the suburbs,” said a Mainer from the resort and tourist community of Kennebunkport, a small town about 28 miles down the Atlantic coast from Portland.

    “The United States cannot rescue Africa.”

    Coming out of the Kennebunkport post office, long-time Mainers Virginia and Robert shared their opinions on what the locals see as the “invasion” of Maine by immigrants.

    Virginia commented, “We have sympathy for the asylum seekers, but resources are over-extended and now it’s going beyond Portland.”

    “Eventually, it’s going to impact our quality of life,” Robert said.

    A view of Dock Square in Kennebunkport, Maine, on May 25, 2022. (Steven Kovac/Epoch Times

    Pressures on Portland’s homeless shelter capacity last year inspired a York County community action group to obtain a federal grant to help house the city’s regular homeless population.

    The plan included renting half a dozen large motels in a three-mile corridor in the heart of southeastern Maine’s Atlantic-shore tourist region.

    Motels within walking distance of shopping opportunities were selected.

    The motels close in the off-season, so it appeared to some people to be a win-win arrangement.

    Included in the plan was the small, quiet, resort town of Wells, located about six miles from Kennebunkport.

    Though the program sheltered hundreds of individuals from the brutal Maine winter, the resulting wave of never-before-seen vandalism, burglaries, and other property crimes in the commercial district forced the city of Wells to evict every tenant for violations of several municipal ordinances.

    It is unclear where the evicted people were relocated.

    Homeless Victimized and Intimidated

    A motel in Wells, Maine, that was used to shelter the homeless of Portland on May 26, 2022. (Steven Kovac/Epoch Times)

    According to Captain Gerald Congdon of the Wells Police Department, the crimes were not committed by foreign asylum seekers, Wells residents, or by the many legitimate, disadvantaged, and debilitated people housed in the motel.

    “The perpetrators arrested were mostly ‘couch-surfers’ spending time with homeless friends staying legally at the motel. However, the bulk of grant-qualified motel dwellers had drug problems,” Congdon said.

    One small business operator, whose sweetshop was burglarized, told The Epoch Times, “The thieves were druggies in need of a fix. They came in through a window, stole the cash from the register, and took our digital scales.

    “These people were brought in around Christmastime. It was like an invasion. We never had a crime at our store before they came in and ruined things.

    “It’s not fair. We now think differently. They changed the whole landscape of how we do business. We don’t want to see them come back.”

    Congdon told The Epoch Times, “There was shoplifting at the bigger chain stores and car break-ins going after loose change in the strip mall parking lot.

    “A small bike shop was burglarized twice, losing thousands of dollars-worth of high-end bicycles—never happened to them in 42 years of business.

    “Our officers spent a lot of time on disturbance calls and enforcing warrants. We made quite a few arrests and recovered some stolen property.

    “The management of the area’s motels got tired of seeing us there. They were tired of their legitimate businesses being associated with crime.

    “The nice tenants, many of whom are truly deserving of help, were being victimized and intimidated. They were afraid to call us.”

    Congdon said his department was not consulted and was given no advance notice on the plan to bring hundreds of homeless people—including many known drug-addicts—into their city.

    The City of Wells was not compensated for the additional hours of policing.

    A broad, sandy, beach in the tourist region of southeastern Maine, on May 26, 2022. (Steven Kovac/Epoch Times)

    ‘Feeder Sources’

    On May 1, a hotel in the resort town of Old Orchard Beach, located about halfway between Portland and Kennebunkport, evicted all of its residents for a different reason.

    This time, they were asylum seekers evicted in order to make room for the arrival of legally permitted temporary seasonal workers to lodge there.

    These special visa-holders make up the majority of the workforce needed by the region’s thriving hospitality industry.

    The asylum seekers were relocated to motels in three other southern Maine communities, according to Portland city officials.

    In Portland, 500 single asylum seekers are housed in a municipal shelter separate from the family shelter, according to a spokesperson for the city. It too is at capacity.

    Guthrie told The Epoch Times that city authorities have publicly notified what he calls “the feeder sources” at the southern border and in Washington D.C. about the immigration crisis unfolding in Portland.

    The city administration asked Border Patrol, Health and Human Services, and participating non-profits to stop sending asylum seekers to Portland until sufficient resources become available to adequately care for them.

    But the force of the city’s request was blunted when it announced immediately after the notification that it would not turn anybody away, acknowledged Guthrie.

    Maine Gov. Janet Mills in 2019. (Rebecca Hammel/U.S. Senate/Public Domain)

    Guthrie stated that the city asked Maine Gov. Janet Mills, a Democrat, to call out the National Guard to set up emergency shelters and feeding stations but has not yet received an answer.

    On June 2, in remarks before the Portland Regional Chamber of Commerce, Mills committed the state to building a new emergency shelter in the city and said she was working to create additional housing for asylum seekers in the area.

    She also spoke of the desirability of the in-migration as a source of labor to fill many existing job openings.

    Speaking of the migrants, Mills said, “We need the workforce here. We want them to be available for work. Some of them come with incredible skills and experiences that we can employ.”

    One long-time Maine resident, who visited the Portland Family Shelter to see the situation for himself, told The Epoch Times, “Mike Guthrie is like a man frantically trying to bail out a sinking rowboat, while his superiors continue to drill holes in it.”

    During the month of May, the family shelter took in 79 families consisting of 262 individuals with no slowdown in sight, Guthrie said.

    “220 people turned up in just 20 days. We’re trying to help anybody that comes to the door. Thus far, nobody coming to us has had to sleep outside but we can no longer guarantee shelter upon arrival,” he said.

    “We need the state of Maine to step in and create safe places for these people. We need a facility to be created and run like a FEMA camp.

    “Our legislators are talking about buying and renovating older apartments throughout the region that could house 140 families. That’s great in the long-term, but the problem is now!

    “At the rate things are going, we’d have those places filled in two months. Then what?” Guthrie asked.

    Portland’s pastors, church members, and its citizens have been stepping forward to do what they can.

    “Local churches and those in Cumberland are offering space for people to sleep and some Portland residents have even opened up their homes,” Guthrie said.

    A surge in asylum seekers crossing the border in the Rio Grande Valley has put a strain on the immigration system. Here, migrants are on the move, in Mission, Texas, on March 17, 2021. (Los Angeles Times via TCA)

    Where Are the Asylum Seekers Coming From?

    The vast majority of the new arrivals at the family shelter in Portland have come from Angola and the Congo in Africa, with some coming from Haiti in the Caribbean.

    They make the arduous and often dangerous journey any way they can—largely on foot.

    Guthrie told of a father and child who recently showed up at the shelter.

    “The man said that his wife, the young child’s mother, died on the way. She was swept away while crossing a river.”

    Guthrie explained that the route to Portland for most of the asylum seekers begins in chaos-torn western equatorial Africa.

    “They cross the Atlantic to South America. They go up through South America and then north through Central America, ending up in northern Mexico, from which they cross the southern border into the United States.

    “At that point, they present themselves to Border Patrol.

    “A new arrival tells Border Patrol ‘I am here to seek asylum. If I go back home, I will be killed. I fear for my life.’ That’s the difference between an asylum seeker and an immigrant,” he said.

    Those three short sentences guarantee a person’s admission for a lengthy stay in the United States as his or her claim is adjudicated.

    Guthrie went on to explain, “After some additional questioning, the individual is issued minimal paperwork by immigration authorities and told they will be contacted about a formal hearing on their asylum plea. They are then turned over to the U.S. Department of Health and Human Services.”

    Most are given cell phones.

    Public servants with the Department of Health and Human Services (DHHS), and representatives of various American non-profit, philanthropic organizations, ask the asylum seekers where they want to go in the interior of the United States to await their asylum hearing.

    For many, their answer is “Portland.”

    “They are then put on buses or airplanes and sent on their way,” Guthrie said.

    Lobsterman Tucker Soule unloads a trap at Cape Porpoise near Kennebunkport, Maine, on May 23, 2022. (Steven Kovac/Epoch Times)

    Why Portland?

    Guthrie said that Portland is often recommended to people enroute to the United States by relatives who are already living in the city.

    “Once they get here, the majority of the new arrivals want to stay in Portland. They tell their relatives and friends about us,” he said.

    Jessica Grondin, the city’s director of communications and media, told The Epoch Times in a phone interview, “Portland is happy about and proud of our good reputation as a ‘Welcoming City.’ We presently have a large Somali population, as well as many Iraqis and Afghans who arrived here previously.”

    Grondin said that several busloads of asylum seekers recently shipped off to Washington D.C. by Texas Gov. Greg Abbott, a Republican, ultimately made their way to Portland.

    She stated that, along with the lack of housing, one of the biggest problems facing the city is a shortage of staff to care for the volume of new arrivals.

    Guthrie said that the influx asylum seekers has exceeded the city’s ability to offer basic services.

    “As we outgrow our past limits, we are being forced to prioritize what we are doing for these people. We are no longer able to help them connect with local immigration attorneys, nor help them learn English,” he said.

    Effective May 7, a policy change took effect forbidding the shelter’s staff from assisting asylum seekers in finding an apartment.

    “Instead, these folks, who are complete strangers to this community and speak no English, are being qualified for a state General Assistance housing voucher.

    “They are given a sample lease, a rental form, and an explanation of the GA process, and are then sent out on their own to find a place to live,” Guthrie said.

    While most of the new arrivals speak Portuguese, some speak French, Lingala, or another tribal language. Many are bilingual, but none speak English.

    Weary of waiting around, some of the French-speakers asked to be sent to Quebec, but the strict Canadian rules concerning COVID-19 prevented them from entering, Guthrie stated.

    Condition and Needs of Asylum Seekers

    Guthrie described the migrants’ situation, saying, “Understand, the majority of these people arrive here with no money. They spent their life savings during their trip and have to start over. They need everything.

    “They come from hot climates wearing summer clothes. We have given away about 97 percent of our clothing stock to help them cope with the colder weather here in Maine.

    “We have to keep many people outside during the day and then pack them into our warming room for the chilly Maine nights, or on rainy days,” he said.

    Fathers, mothers, and their numerous small children are kept outside all day long. They stand on the sidewalk across the street from the shelter or sit in an alley between two old houses passing the time until the next meal.

    The grimy concrete and stony gravel of the alley serve as furniture. There are no chairs or tables. They sit or recline on whatever is at hand, or on the bare dirt.

    The shade formed by the receding shadow of the walls of the surrounding old buildings is their only comfort.

    Antsy and bored small children have no toys with which to amuse themselves, except for one little boy who rides a plastic big-wheel tricycle around the alley.

    A small bathroom is available to people upon request in one of the shelter’s buildings, or at a nearby city-owned singles’ shelter around the block.

    “For showers, we team up with a local church that comes by with a bus and offers showers to any of them that want to go,” Guthrie said.

    When asked if the asylum seekers are Christians, Guthrie answered that many ride a bus to church services on Sunday morning.

    The shelter provides families with three meals a day, prepared off-site by “community partners.”

    “We pick up the meals and bring them here and serve them indoors. The food is decent. A typical lunch is a sandwich, salad, soup, granola bars, snacks, milk and water,” Guthrie said.

    Guthrie told The Epoch Times that the family shelter is providing standard baby formula for the young children, but one baby is intolerant to it.

    This infant requires a specialty brand that is hard to get—a fact that is upsetting to the mother and her child.

    The Maine Immigrant Rights Coalition (MIRC) is providing asylum seekers residing in hotels and motels with some culturally appropriate foods such as fufu (an African staple), goat meat, greens, chicken, and rice, he said.

    A lot of the accommodations do not have kitchens.

    According to Guthrie, the cost per motel room is between $250 and $350 dollars per night and rising as the tourist season begins.

    MIRC is part of a network of 85 statewide organizations involved in the care of the thousands of asylum seekers already here and those that are arriving daily.

    Guthrie said the state is footing 70 percent of the family shelter’s expenses, with the city making up the remaining 30 percent.

    But Guthrie says that getting the children into school is among the best assistance that can be provided.

    “The schools offer all kinds of different programs. They have community resource officers. They keep the kids busy while giving them two meals a day,” he said.

    More than 60 different foreign languages are spoken by students at Portland area schools, further complicating every task associated with education.

    When asked about the overall health condition of the asylum seekers, Guthrie replied, “They are exhausted and scared. They haven’t travelled a safe route. Though clearly traumatized, very few will talk about the details of their experience. Counselling is available if requested.”

    Teams of health care workers are performing what Guthrie calls “health outreach.” They have set up clinics at some of the motels to perform triage and make any necessary medical referrals.

    The city of Portland has a busy public health clinic helping to provide treatment, but some people with more serious conditions end up in emergency rooms.

    To overcome the language barrier, the city provides interpreters, and health care workers make use of cell phone translation apps.

    On the whole, Guthrie said most of the people under his supervision are physically “very healthy.”

    “Pregnancy is the families’ most urgent medical concern, and their most pressing medical need is OBGYN (obstetrics and gynecology) care,” he said.

    He also said there is some sickle cell disease among them.

    A young Angolan mother and child outside the family shelter in Portland, Maine, on May 25, 2022. (Steven Kovac/Epoch Times)

    City Hall allowed The Epoch Times access to several families being warehoused outdoors and a number of parents were eager to talk about their current plight.

    Speaking through an interpreter provided by the shelter, and in the presence of shelter director Guthrie, Samantha, a young Angolan woman with a 10-month-old baby on her hip and a toddler in tow, was not shy about sharing her dissatisfaction.

    When asked if her family’s basic needs were being met, Samantha replied, “We just need a place to sleep. We stay outside in the sun and the elements because there is not enough space for us indoors. There are not enough clothes for my family.

    “Being outside all day is not good for my baby. Some of us have caught colds. Some had fevers. Some were so sick they went to the hospital.

    “My son eats a special baby formula. I have to ration his feeding.

    “What we are fed is very different than what we are used to. We are receiving no culturally appropriate food. There was no way for us to take a shower for five days.

    “We endured a seven-month journey to come to this! We are not happy. Conditions are not good! We really need help.”

    When asked if she felt welcome, Samantha said with a look of disbelief, “No! I do not feel welcome. Look at us. We are outside.”

    A Congolese family seeking asylum in Portland, Maine, on May 25, 2022. (Steven Kovac/Epoch Times)

    Landry, a housepainter and electrician’s helper, brought his wife Sylvie, two-year-old daughter, and 12-month-old son to Portland from the Congo.

    When asked why he risked the journey, Landry answered, “I left my country because of political issues and insecurity. There we could be sure of nothing. Here, it’s different.”

    Sylvie said, “We came from Texas unprepared for this Maine weather. I am not happy for how I am living here. I don’t feel welcome!”

    Tyler Durden
    Sun, 06/05/2022 – 20:30

  • Whoopi Goldberg Thinks The AR15 Should Be Banned Because It 'Turns People To Dust'
    Whoopi Goldberg Thinks The AR15 Should Be Banned Because It ‘Turns People To Dust’

    If you want to find some of the dumbest political hot takes of the past five years, you only need to have a strong stomach and the patience to sit through the numerous uneducated discussions of the clucking flock on The View.

    Whoopi Goldberg continues this winning tradition (The View’s audience numbers tanked this year and it remains 10th among women 18-49 in daytime television) with her recent comments on gun control, arguing in favor of criminal arrest for Americans that own AR15s that refuse to give them up. When pressed on the fact that gun crimes could just as easily be committed with pistols during a largely one sided debate against her co-host, Goldberg argued that handguns “don’t turn people to dust.”

    Neither do AR15s, but lets not bring reality into a debate that was broadcast on The View. Injury and death is just as likely from a handgun as it is from an AR15. You are also more likely to find expanding hollow point ammo used in a pistol. The primary difference is that a pistol’s range is limited, usually to 50 yards or less. This makes little difference though, as most shooting events and crimes occur within 50 yards anyway, and this includes shootings where rifles are involved.

    Whether or not this was hyperbole, the insane misconceptions put out into the mainstream by anti-2nd Amendment activists falls in line with a long series of lies and gaffes uttered by Joe Biden and other Democrats. If you don’t know anything about the weapons you are trying to ban, then maybe you shouldn’t be trying to ban them?

    The fact is, the vast majority of gun crimes and gun related homicides are committed with handguns according to FBI stats; only 2%-3% of crimes and homicides are committed using rifles or “assault rifles” on average. The claim that the 1994 Assault Weapons Ban had any bearing on the overall decline in gun crime in the 1990s is false – The largest decline was in handgun homicides, and handguns were not subject to the 1994 ban.

    Goldberg’s assertion that gun rights advocates should compromise and allow the banning of this “one gun” is naive; gun grabbers will never be satisfied with limited gun control, only total gun confiscation (at least among the poor and the people that oppose them politically). Say what you want about Beto O’Rourke, but his big mouth is valuable in that he often lets slip what the real agenda on gun control is.

    Goldberg then goes on to suggest that people can “report” AR15 owners and have them arrested, saying the solution is “simple” and compared this to reporting and arresting women who abort their babies in states where abortion is banned. Interesting how the political left is rabidly in favor of killing people in the womb despite numerous other birth control options, but wants to strip all law abiding citizens of their rights whenever people die from gun related homicides.

    The question for Goldberg and any other anti-gun rights mouthpiece is this: Are YOU going to go collect the guns you deem criminal? Are you operating on the assumption that Americans are going to willingly give up those guns? The authoritarian solution might not be as “easy” as you think it is.

     

     

    Tyler Durden
    Sun, 06/05/2022 – 20:00

  • New York Attorneys Accused Of Firebombing Police Car Given Generous Plea Deal
    New York Attorneys Accused Of Firebombing Police Car Given Generous Plea Deal

    Authored by Jonathan Turley,

    We previously discussed the cases of attorneys Colinford Mattis and Urooj Rahman, who were accused of throwing a Molotov cocktail into an occupied police vehicle in New York.

    They were facing domestic terrorism charges and the possibility of 30 years in jail.

    This week, the Biden Administration agreed to a massive reduction of the charges in a plea agreement that will likely result only in a couple years of jail time. What is particularly bizarre is that the plea agreement reduces an earlier plea agreement for a more serious offense.

    The plea deal by the Justice Department is a breathtaking reduction in the charges and expected sentencing of the two lawyers.

    Earlier, some of us were surprised that U.S. District Judge Margo Brodie upheld the $250,000 bail determination of U.S. Magistrate Judge Steven Gold.  Prosecutors presented evidence that the two attorneys were trying to distribute Molotov cocktails and suggested that Mattis did not appear rational.  The United States Court of Appeals for the Second Circuit reversed Judge Brodie and the two attorneys were sent back to jail. (Rahman’s bail was paid for by friend and fellow attorney Salmah Rizvi, who served in the Defense Department and State Department during the Obama administration).

    Notably, Rahman and Mattis pleaded guilty last year to one count of possessing and making an explosive device, which carries a maximum sentence of 10 years in prison. Now, however, they will be allowed to withdraw the earlier plea and instead plead guilty to conspiring to assemble the Molotov cocktail and damage the New York Police Department patrol car. That is a nosebleed of a drop in the severity and punishment for this violent attack.

    It is a sharp contrast to the harsh position taken by the Biden Justice Department on many of those accused of rioting on January 6th. 

    Attorney General Merrick Garland cited the threat to police officers in pledging an unprecedented effort to charge and convict those involved “on any level” in the riot.

    Conspiring to assemble the Molotov cocktail and damage the New York Police Department patrol car does not quite capture what these two attorneys did during the violent riot in New York. Rahman was caught on video throwing the firebomb and then fleeing the scene. 

    Colinford Mattis was accused of having a store of firebombs in his vehicle and was videotaped as he attempted to hand them out to other rioters to fuel further violence.

    Rahman later was unapologetic and declared to reporters that “the only way they hear us is through violence.”

    That does not seem the type of the suspects who would ordinarily garner deep sympathy from prosecutors. Yet, the Biden Administration walked back the charges, unraveled the earlier plea to a lesser offense, and told that court that the earlier charges would have resulted in “excessive sentencing” for the attorneys. Instead, they are supporting a maximum sentence of five years with a recommendation of between 18 to 24 months imprisonment.

    Attorney General Garland just last month honored law enforcement killed in the line of duty. This plea agreement is likely to infuriate many of those families given strength of the case and the severity of the conduct. These two attorneys were participating in an effort that could have burned officers alive as a form of protest. They will now be given sentences closer to tax fraud than terrorism.

    As previously discussed, Mattis was a member of the Corporate Group at Pryor Cashman when he was arrested. Mattis graduated from New York University School of Law in 2016 and received his bachelor’s degree from Princeton University. He was also previously employed as an associate at Holland & Knight.  Rahman was just admitted to the New York bar in June 2019 after graduating from Fordham University School of Law.

    Both lawyers will be permanently disbarred and will have to pay restitution to the city of New York.

    Tyler Durden
    Sun, 06/05/2022 – 19:30

  • 23 Pounds Of Cocaine Stashed In Wheelchair By Man Posing As "Handicapped" At Charlotte Airport
    23 Pounds Of Cocaine Stashed In Wheelchair By Man Posing As “Handicapped” At Charlotte Airport

    US Customs and Border Protection (CBP) officers discovered a wheelchair stuffed with pounds of cocaine after a US citizen returned from the Dominican Republic and landed at Charlotte Douglas International Airport. 

    According to a CBP press release, a 22yo US male operating an electric wheelchair underwent a full inspection by officers on Tuesday. After examining the wheelchair, officers found four packages containing over 23 pounds of cocaine, hidden within the seat cushion, with an estimated street value of $378k.

    Mike Prado, deputy special agent in charge of Homeland Security Investigations in Charlotte, told local news WBTV on Friday that his team had prior intelligence the man was smuggling drugs into the country through a wheelchair. 

    “What we did was identify the individual. Agents and inspectors were able to pull him out of line when he was laid over for a connecting flight to Newark, New Jersey,” said Prado.

    When CBP questioned the man during an interview, his story didn’t match up. 

    “It was readily apparent that there was something suspicious going on so we had probable cause to conduct further investigation and ultimately we were able to determine that he was sitting on 11 kilos of cocaine,” said Prado.

    The special agent said it’s not often people smuggle drugs in a wheelchair through an airport. 

    “It’s unusual for an airport environment generally to have somebody pose as a handicapped person and have a wheelchair stuffed with cocaine. That is definitely something we’re more accustomed to seeing at land borders, the southwest border,” said Prado.

    He also said the attempt to smuggle drugs in a wheelchair shows how desperate some people are to get drugs into the US. 

    There have been other absurd drug smuggling attempts in the past, including a Brazilian man who tried to hide a kilo of cocaine in his fake butt implants and was intercepted at an airport in Portugal. 

    Tyler Durden
    Sun, 06/05/2022 – 19:00

  • Inflation Will Price Many Americans Out Of Housing And Into Homelessness
    Inflation Will Price Many Americans Out Of Housing And Into Homelessness

    Authored by Brandon Smith via Alt-Market.us,

    One of the most detrimental aspects of an inflationary or stagflationary crisis is that, in most cases, housing costs tend to rise while home sales fall.

    It might seem counterintuitive; one would assume that as sales fall so should prices, but this is the upside-down world of inflation. Certain commodities and products, usually necessities, almost always skyrocket in price, ultimately driving most American families out of the market completely.

    One of the only exceptions to this rule is when the government institutes rent or price controls. In Weimar Germany, for example, the government enforced strict regulatory controls on landlords, fixing rent at a rate that made profits impossible.

    Biden’s housing crisis

    Now, this might sound familiar – during the height of the Covid pandemic the Biden administration established a lengthy moratorium on evictions, which made it impossible for many property owners to collect rent payments they were owed. Owners couldn’t replace delinquent tenants with those willing to pay on time, leading to massive financial burden on property owners across America.

    The effects of this were detrimental to both the U.S. economy and especially the rental market.

    How? The moratorium awakened property owners to the reality that they could be unilaterally restricted from their own business. They could be stopped from collecting rent payments owed by tenants under contract while still being forced to pay taxes and maintenance expenses on those same properties.

    The entire rental market became a zero-sum game. In response, landlords began selling their extra properties in droves instead of renting them out.

    As you might expect, this has led to a shortage of rentals in many parts of the country. When supply is constrained, what does basic economics tell us must happen? The eviction moratorium led directly to much higher prices on the limited rentals that still remain.

    But it wasn’t just a reduction in supply that caused prices to rise.

    Those owners still willing to rent properties under the eviction moratorium had to increase their prices to compensate them for the additional risks they were taking in a market where the rules suddenly changed. By placing the moratorium on rent, Biden made an existing housing crisis far worse.

    Who benefits from this manufactured crisis?

    Another factor to consider is this: who were the buyers for many of these suddenly-for-sale properties?

    Massive conglomerates like Blackstone and Blackrock have been increasingly involved in the housing market since the crash of 2008.

    While Blackrock claims it has no involvement with the single-family housing market, it works closely with companies that are involved, buying up multiple houses and bundles of distressed mortgages.

    Blackstone has continued to buy houses in bulk for the past decade, removing properties from the market for a time. These mass purchases give the public the impression that local sales are “hot” and that the market is thriving. As you might expect, these actions force prices up even further to meet this artificial demand.

    Currently, median sale prices of homes have spiked dramatically to all-time highs in the span of a couple years – a 30% price surge coinciding with the beginning of the Covid panic.

    Now, part of the price inflation can be attributed to the large migration of Americans out of blue states to escape draconian Covid lockdowns and high taxes, but this migration has now died off. Housing sales are plummeting back to Earth. Yet, prices remain higher than the average family can afford.

    Housing Inflation Is far Outpacing Wages

    In 2022, the median cost of a home in the US is now $428,000. The average American makes around $50,000 a year or less, placing them far outside the current market.

    In terms of rentals, the average cost in the US has exploded to $1300 per month for people that stay anchored to a location, and $1900 per month for people that relocate. This average is of course partially pushed up by the ridiculously high prices in major coastal cities like San Francisco (up 22% year over year), Los Angeles (up 297% since January 2000) and New York (up 159% house price inflation since January 2000).

    An individual today must make at least $20 an hour to afford a single bedroom apartment. Consider that over 30% of Americans are paid less than $15 an hour (before taxes).

    Nearly half of the American population doesn’t make enough money to maintain a one bedroom rental. The vast majority of Americans will find it impossible to buy a home at today’s prices.

    On average, an annual salary of $105,000 is recommended before taking on a mortgage for a $350,000 house. And keep in mind, as the inflation crisis accelerates the Federal Reserve will raise interest rates – which pushes up mortgage costs. So where does this leave us? It only gets worse from here.

    What comes next?

    Home buyers waiting for prices to track lower along with sales may find they are waiting around for a while. This could change IF the government enforces price controls on home costs. Granted, that is highly unlikely.

    I think it’s more likely that, as inflation rises, the government would freeze monthly rents, but not home prices themselves.

    That said, if there was another moratorium on evictions, or a freeze on rents, then landlords would probably sell off their properties en masse once again to avoid taxes and expenses on investments that are making them no money. That could lead to a larger drop in prices, but again, I wouldn’t hold my breath.

    One solution to the housing problem would be a moratorium on corporate purchases of homes. That would limit hedge funds and investment banks to speculating on industrial and retail properties.

    Personally, I’m not a fan of the government insinuating itself into business, but maybe it is better to stop conglomerates from buying up American homes and driving up prices than it is to stop landlords from collecting rent? We also have to consider the very real possibility that global corporations devouring the U.S. housing market is part of a calculated agenda to make housing expensive.

    Price explosions caused by inflation like we are seeing today often last for many years, sometimes a decade or more. When housing finally does deflate, it will only be under drastic economic instability. By that time, people will have much bigger concerns beyond whether they can take on a mortgage. (Note: Birch Gold has reported extensively on the latest housing bubble, and the forces behind it.)

    Property rights and ownership are a primary pillar supporting a free society. When ownership is relegated to the upper-middle class and the wealthy the result is an inevitable social decline into various forms of feudalism or socialism.

    For those with authoritarian ambitions, housing inflation is a boon. Homelessness feeds the kind of desperation that drives the public to support totalitarian actions. They might provide you with housing eventually, but it will be at a terrible cost.

    The last thing anyone with common sense would want is for the government to become their landlord by default. It’s very hard to defy the trespasses of government overreach when that government controls the roof over your head.

    *  *  *

    After 14 long years of ultra-loose monetary policy from the Federal Reserve, it’s no secret that inflation is primed to soar. If your IRA or 401(k) is exposed to this threat, it’s critical to act now! That’s why thousands of Americans are moving their retirement into a Gold IRA. Learn how you can too with a free info kit on gold from Birch Gold Group. It reveals the little-known IRS Tax Law to move your IRA or 401(k) into gold. Click here to get your free Info Kit on Gold.

    Tyler Durden
    Sun, 06/05/2022 – 18:30

  • Oregon Bungles New Addiction Recovery Program Tied To Decriminalization
    Oregon Bungles New Addiction Recovery Program Tied To Decriminalization

    Thanks to mismanagement and naive assumptions about the propensities of drug abusers, a new public health program associated with Oregon’s decriminalization of drugs is falling flat on its face. 

    The state has only managed to spend a small fraction of a $305 million budget meant to expand substance abuse and recovery services. The money, which comes from cannabis tax revenue, was diverted from schools, mental health services and state police but now much of it sits idle. 

    As OregonLive reports: 

    So far not a single new treatment bed has been funded since Measure 110′s passage to decriminalize the possession of small amounts of heroin and other street drugs and set up a system to refer and treat those suffering from addiction.

    Ballot Measure 110 was approved by Oregonians in 2020, making it the first state to decriminalize possession of personal amounts of heroin, cocaine, meth, LSD, ecstasy, oxycodone and other drugs. Under decriminalization, which took effect on Feb. 1, 2021, people found in possession receive a citation—akin to a traffic ticket—rather than jail time. 

    Consistent with viewing addiction as a health problem and not a criminal justice issue, Measure 110 aspired to create a robust statewide network of resources for those with substance abuse problems. It isn’t even close to materializing.  

    Responsibility for selecting service providers and distributing hundreds of millions of dollars falls to a citizen-led council. The law requires that, among others, the council must include a social worker, a physician, “an evidence-based substance abuse disorder provider,” an academic researcher and “at least two people who suffered or suffer from a substance abuse disorder.”

    That’s not exactly stacking the deck for success in overseeing a multifaceted, $300 million government program serving towns, cities and counties all over the state.  

    The council has been overwhelmed by applications from some 330 organizations eager for state money, and grant timelines have been revised multiple times. Council member Caroline Cruz described a recent meeting as “total chaos.”

    Another council member, Morgan Godvin, told state officials, “I don’t know grant-making. That was [the Oregon Health Authority’s] duty, but you did not fulfill it and the goalposts just keep moving. I have whiplash trying to keep up with this, but at no point do I hear an acceptance of responsibility from OHA saying ‘we dropped the ball’.”

    Buried under the deluge of grant requests, the council opted to start by awarding grants to sparsely populated eastern Oregon counties, rather than to Portland, Salem and other major population centers. That doesn’t strike anyone as sound triage for a health emergency.  

    So far, just $40 million of the $305 million have been allocated for the 2021-23 biennium. At this pace, the council won’t be even halfway finished making allocations for this biennium before the next one starts.  

    Distancing itself from the fiasco, the office of Governor Kate Brown told The Oregonian that the governor doesn’t appoint the council or oversee its work, directing questions to the OHA. 

    Finger-pointing abounded in Salem this week. Mike Mike Marshall, executive director of Oregon Recovers, a statewide coalition focused on addiction, characterized the rollout as a “debacle” and blamed both OHA and the governor. 

    The shoveling of money at addiction treatment isn’t the only aspect of the program that’s faltering. So too is a feature meant to encourage cited possessors to avail themselves of help.

    In Oregon, the maximum penalty under a drug possession citation is $100, but that’s waived if the individual calls a health assessment hotline to complete a substance abuse disorder screening. So far, police across Oregon have issued roughly 2,000 citations and only 91 people—something like 4.5%—have called the hotline. 

    Though reporting doesn’t make it clear, it’s not hard to imagine that most of the others didn’t bother paying the citation either. 

    Meanwhile, in a Thursday hearing of Oregon’s House behavioral health committee that focused on the botched rollout, Republican representative Lily Morgan, of the southern Oregon town of Grants Pass, pointed to rising overdoses as she expressed skepticism about Oregon’s new approach.

    “Director, you’ve mentioned a couple of times that you’re waiting to see, and yet we have overdoses increasing at drastic rates, in my community a 700% increase in overdoses and a 120% increase in deaths,” said Morgan, addressing Oregon Behavioral Health Director Steve Allen. “How long do we wait before we have an impact that we’re saving lives?”

    It may seem counterintuitive, but much of that spike springs from the fact that, while possession of drugs has been decriminalized, the sale of drugs in Oregon is still illegal. That leaves users vulnerable to the particular perils of black market drugs. 

    Consistent with that reality, Allen attributed much of the increase in overdoses and overdose deaths to a recent wave of both methamphetamine and illegal pills laced with fentanyl, an opioid that can be deadly in small doses.

    Allen may not have made this point, but we will: In a competitive, fully legal drug market where users (and their estates) could use courts to hold professional producers accountable for failing to provide products with clearly delineated dosages and uniform ingredients, overdoses would plummet.  

     

    Tyler Durden
    Sun, 06/05/2022 – 18:00

  • Gun Laws Will Not Fix A Problem Of Culture And Spirit
    Gun Laws Will Not Fix A Problem Of Culture And Spirit

    Authored by Star Parker via The Epoch Times (emphasis ours),

    Once again, the nation has witnessed a horrible, pointless act of violence, with innocent children the victims.

    And, once again, we hear from liberals that the answer is gun control.

    Flowers, toys, and other objects to remember the victims of the deadliest U.S. school shooting in nearly a decade resulting in the death of 19 children and two teachers, are seen at a memorial at Robb Elementary School in Uvalde, Texas, on May 30, 2022. (Veronica G. Cardenas/Reuters)

    If we look at what generally characterizes the mindset of those—generally young men—who commit these acts, we see what generally characterizes the mindset that has taken hold of our whole culture.

    Victimhood, blame, and denial of personal responsibility.

    Can this be an accident?

    Kudos to The Wall Street Journal for having the courage to point to these incidents as signs of a “social and spiritual” problem in the country.

    “The rise of family dysfunction and the decline of mediating institutions such as churches and social clubs have consequences,” the Journal’s Editorial Board wrote on May 25.

    The signs of a society that is sick are all around us: the collapse of family, the collapse of interest in marriage and having children.

    In 2021, 107,000 Americans died from drug overdoses, an all-time high and a 15 percent increase over the previous year.

    According to the National Institute of Mental Health, the suicide rate in the United States increased 35.2 percent from 1999 to 2018.

    Suicide was the second-leading cause of death among young people ages 10 to 34, and the fourth-leading cause of death among individuals ages 34 to 44.

    A characteristic common to suicides and mass killings is that the perpetrators are disproportionately men.

    Men—generally young men—commit indiscriminate mass murder, and men take their own lives at a rate almost four times higher than women.

    So men demonstrate in a most unpleasant way another truth that our liberal friends want to deny. Men are different from women—not just in physical makeup, but also in spiritual and psychological makeup.

    For whatever reason, our increasingly Godless, materialistic, morally empty culture seems to take a particularly heavy toll on men.

    American Enterprise Institute scholar Nick Eberstadt has looked into the recent phenomenon of prime-age men—ages 25 to 54—who have bailed out of the labor market. These are men who have stopped working and seeking work. The official label is NILF—not in the labor force.

    According to Eberstadt, the total number of NILF men held steady in the 1940s and 1950s at around 1 million. Then, in the late 1960s, it exploded. There are now 7 million prime-age men who have withdrawn from the workforce.

    According to the Federal Reserve Bank of St. Louis, the labor force participation rate of men—the percent of working-age men in the workforce—was 86.2 percent in January 1950. In April 2022, it was 68 percent.

    The labor force participation rate for women has almost doubled over the same period—33.4 percent in January of 1950 to 56.7 percent in April 2022.

    We’ve gone from a culture centered on church to a culture centered on government.

    According to Gallup, in 1950, more than 70 percent of Americans belonged to a church. In 2020, it was 47 percent. Among those born between 1981 and 1996, it’s 36 percent.

    Over the same period, the take of all levels of government from our GDP went from 22.6 percent to 43.4 percent.

    Sanctity of life was devalued with Roe v. Wade. Military conscription was abolished around the same time, erasing any personal responsibility, beyond paying taxes, that men have to serve.

    In this vacuous culture of entitlement and meaninglessness, lost young men periodically make their presence known through violent expressions, sometimes directed at others, sometimes toward themselves.

    I do not pretend that this is simple. I certainly agree that security measures should be taken, particularly in schools.

    George Washington warned the nation in his farewell address that there is no freedom without faith, tradition, and personal responsibility.

    The same liberals that have helped wipe this out now want more government in the way of new gun laws to solve what is a cultural and spiritual crisis.

    Views expressed in this article are the opinions of the author and do not necessarily reflect the views of The Epoch Times or Zero Hedge.

    Tyler Durden
    Sun, 06/05/2022 – 17:30

  • New York Times Op-Ed Applauds Inflation As Means To Enforce Green Diet
    New York Times Op-Ed Applauds Inflation As Means To Enforce Green Diet

    Following a general trend of excitement among extreme leftists in media, The New York Times has recently posted an Op-Ed which argues in favor of the inflationary crisis facing the US and much of the world because it forces the public to go vegan and give up meat “for the greater good.”

    Just as late night propagandist Stephen Colbert cheered for higher gas prices and suggested people buy a Tesla (a vehicle far outside the affordability of the majority of Americans) if they want to avoid paying $15 a gallon for gas, the NYT Op-Ed has a familiar stench of elitism.

    The UN and many globalist foundations have been engaged in a war on the average person’s diet for many years now. A main pillar of the UN’s climate change agenda calls for the end of large scale farming and meat production in the name of reducing our “carbon footprint.”

    Keep in mind that even the NOAA admits in their own data that worldwide temperatures have only risen 1 Degree C in the past century (with a margin of error of 0.23C). That’s right, 1 degree, and this is after climate scientists have made numerous “adjustments” to how temperatures are recorded for the official record.

    Also note that the temperature record started in the 1880s. Whenever NASA or the NOAA says that a particular day was the “hottest day on record,” they are referring to a tiny sliver of the history of the Earth in which data has been “officially” collected. In reality, the history of the planet is replete with long term global warming events (far hotter than we are witnessing today), and long before man-made carbon was ever a thing.

    Today’s temperatures are low to moderate in comparison, but if you only look at the records that climate groups want you to see rather than the bigger picture then it might seem like the world is getting hotter than it should. The Earth’s weather history is vast, and changes occur without the input of human activity.

    There is zero concrete evidence to support the claim that man-made carbon has any significant bearing on the current and historically minor temperature increase of today; only assumptions, once again based on correlation rather than proof of causation.

    This fact won’t stop the climate cult from singing the praises of economic decline, though. If they can’t force Green New Deal-type legislation on the masses, then perhaps an inflationary collapse will do the job for them?

    Even more disturbing is the insinuation by the Times that a reintroduction of the Lever Act might be in order. For those unfamiliar with this starkly unconstitutional legislation, the Lever Act, also known as the Food And Fuel Act, was passed in 1917 and used wartime conditions and price inflation as an excuse for the government to take control of agricultural production, specifically reducing meat availability. It also gave the government the power to confiscate agricultural resources and “prevent hoarding.”

    As the Op-Ed notes in a quote:

    “There was huge cultural buy-in to the idea that collectively, we could make small sacrifices — which is how people saw giving up meat — and we’d make the sacrifices in the name of a greater good and get something done…”

    In other words, the argument is that climate ideologues and militant vegans should support government actions that violate private property and business rights because this has already been done before. A precedent was set in 1917, and they think this makes it okay to do it again.

    It’s also funny how the “greater good” always seems to coincide with whatever establishment elites want to happen rather than what public freedom demands. The globalist organization known as the Club Of Rome openly admitted the agenda in 1992 in their treatise titled ‘The First Global Revolution’:

    “In searching for a common enemy against whom we can unite, we came up with the idea that pollution, the threat of global warming, water shortages, famine and the like, would fit the bill. In their totality and their interactions these phenomena do constitute a common threat which must be confronted by everyone together. But in designating these dangers as the enemy, we fall into the trap, which we have already warned readers about, namely mistaking symptoms for causes. All these dangers are caused by human intervention in natural processes, and it is only through changed attitudes and behaviour that they can be overcome. The real enemy then is humanity itself.”

    The statement comes from Chapter 5 – The Vacuum, which covers their position on how to convince the public on the need for global government.

    Why does the UN and other globalist institutions want to remove meat in particular from our diet? It’s hard to say, but it’s certainly not climate related. There is some scientific evidence including multiple studies which suggest that a plant based diet can lead to stunted brain development and cognitive decline, especially in children and adolescents. Is removing meat availability from our society a bid to make the peasants dumber and less dangerous?

    There are also multiple studies which link veganism to higher rates of depression and a higher chance of irritability and anger. This would help explain the bizarre zealotry we see among some vegans these days, but the overall problem is one of cultism.

    Connecting dietary habits with moral responsibility is nothing new – Many religions have done this in the past. However, the NEW global religion is one of environmental faith and climate doomsday fears that never seem to materialize. At the very least, the anti-meat campaign serves to provide a sense of moral superiority that adherents desperately need in order to feel justified in their militancy. It is also something that any individual can do to feel as though they are making a difference on the planet, even if they are really achieving nothing at all.

    Tyler Durden
    Sun, 06/05/2022 – 17:00

  • Hedge Fund CIO: Biden Is Already As Unpopular As Trump And The Fed Is Only Just Starting QT
    Hedge Fund CIO: Biden Is Already As Unpopular As Trump And The Fed Is Only Just Starting QT

    By Eric Peters, CIO of One River Asset Management

    “Today the enemy counts on popular demonstrations to strike the Islamic system,” declared Iran’s Supreme Leader, 83-years-old, in power since 1989, the year of the Tiananmen Square student slaughter and the fall of the Berlin Wall. Unrest tends to cluster.

    “The enemy hopes to turn the people against the Islamic Republic by psychological means, through the internet, money, and the mobilization of mercenaries,” continued Khamenei, seeking to quell Iranian protests over rising food prices, corruption, incompetence. Not all revolutions are sparked by food price inflation, but most are. Mass migrations too.

    “If, God forbid, these weapons are used against Russian territory then our armed forces will have no other choice but to strike decision-making centers,” warned Russia’s former President Medvedev, responding to Biden’s decision to supply Zelensky with M142 high-mobility rocket systems. Going to be a hot summer.

    “My job as President is not to nominate highly – not only nominate highly – highly qualified individuals for that institution, but to give them the space they need to do their job,” announced America’s chief executive, ahead of a private meeting with Chairman Powell and Secretary Yellen.

    “I’m not going to interfere with their critically important work,” pledged the President, consumed by a desire to draw the clearest possible distinction between his own management style and that of his predecessor.

    [ZH: President Biden has a significantly lower approval rating than former President Trump did at this point in his term.]

    Powell first hiked rates by 25bps to 1.75% in March of 2018. CPI was 2.36% that month, unemployment was 4.0%. Jerome’s final hike of that cycle came nine-months later, in December 2018, with CPI at 1.91% and unemployment at 3.9%.

    But Powell was also quantitatively tightening in late-2018, at a $50bln monthly pace, draining a pool of liquidity built up during a decade of bond buying. Trump was as unhappy as he was vocal. But those were simpler times. The secular stagnation years. Back when economists still thought every developed nation was turning Japanese. Robots were going to render blue color jobs redundant, white collar too, suppressing wages forever.

    Silicon Valley billionaires, haunted by visions of idle truckers, displaced by ubiquitous self-driving semis, raced to pen universal-basic-income whitepapers. In those years, the real reason our central bankers raised rates was so that they might have something to slash in the next economic downturn. It was certainly not to suppress CPI; inflation was barely an ember.

    Covid changed all that. Our politicians acquired the taste for extraordinary deficit spending, funded by the Federal Reserve. And where our central bankers once wondered what it would take to generate inflation, they now question what is required to contain it.

    “My plan is to address inflation and it starts with a simple proposition: Respect the Fed and respect the Fed’s independence, which I have done and will continue to do,” declared Biden, not yet halfway through his presidency, as deeply unpopular as was his predecessor, with inflation at 8.25%, unemployment 3.5%, overnight rates 0.75%, and a Fed Chairman only just now starting to quantitatively tighten. 

    [ZH: President Biden’s approval rating is now below that of former President Trump, having been 15 pts higher than Trump’s in March 2021… and The Fed hasn’t even really started QT yet.]

    Tyler Durden
    Sun, 06/05/2022 – 16:30

  • The Great Robo-placement? Workplace Robot Orders Jump 40% In First Quarter
    The Great Robo-placement? Workplace Robot Orders Jump 40% In First Quarter

    As we come out of the Covid-19 pandemic – which was more like a controlled demolition of small businesses, followed by a mismanaged, taxpayer-funded cocaine binge that dropped vicious inflation on our laps – more and more industries are turning to robots as they struggle to hire enough workers to fill mounting orders.

    According to the Wall Street Journal, orders for workplace robots increased by 40% during the first quarter of 2022 vs the same period in 2021, a according to the Association for Advancing Automation – the robotics industry’s trade groups.

    The explosive growth follows a 22% increase y/y in 2021 after years of stagnant growth, according to the group.

    “Before, you could throw people at a problem instead of finding a more elegant solution,” said Joe Montano, chief executive officer of Delphon Industries LLC, a maker of packaging for semiconductors, medical devices and aerospace components.

    Montano told the Journal that Hayward, CA-based Delphon lost 40% of its production days in January after Covid-19 worked its way through their workforce. So, they bought three additional robots to fill the gap. The company began leasing robots around four years ago, which has since grown to 10 robots – four of which work side-by-side with employees.

    Athena purchased seven robots in the past 18 months. (via the Wall Street Journal)

    According to Montano, two robots reduced a three-person printing crew to one, saving $16,000 per month in expenses.

    Two other Delphon cobots assemble packaging for shipping semiconductors and other fragile cargo, which are shipped in plastic boxes. Robots are now being used to clean the 2-inch-by-2-inch boxes with jets of air, dispense a bead of glue inside them and then install layers of mesh and the company’s silicone film padding.

    Mr. Montano said Delphon is scaling up robots to work on larger-size boxes. The robots have improved the company’s productivity, he said, resulting in shipments increasing about 15% in 2021 and 2020, respectively, without increasing the company’s workforce of 200 people. -WSJ

    “We haven’t reduced any head count, but we reassigned them to where we needed people,” Montano claims.

    The United States has been slower to embrace robotics vs. other industrialized countries such as South Korea, Japan and Germany, according to the International Federation of Robotics. In North America, they have primarily been used in the automotive industry performing repetitive tasks such as welding.

    Now, companies such as Austin, TX-based Athena Manufacturing, a fabricating and machining company in the semiconductor, energy and aerospace industries is turning to robots, after CFO John Newman said the company has struggled to find enough workers to staff a second weekday shift and a weekend shift.

    The company has bought seven robots over the last 18 months, including one that grinds steel frame-welds on equipment that holds semiconductors. According to Newman, Athena has spent over $800,00 on robots, including $225,000 on the grinding unit. He says that the investments have improved Athena’s ability to fulfill orders more than lowering costs. What’s more, the grinding robot takes just 30 minutes to do what a human took around three hours to compete. It also doesn’t have a union, a 401(k) to match, or catch Covid-19.

    Robot purchased by Athena (via Wall Street Journal)

    “The robot doesn’t stop to rest, and that’s understandable for a human because it’s a hard job,” said Newman, who added that the grinding robot can apply more force with a grinding tool than a human can.

    Acquiring the grinding robot took Athena about four years of research and engineering, Mr. Newman said, including help from 3M Co., which supplies the abrasive materials used in the grinding tool wielded by the robot. Athena has deployed six other robots, four of which weld the racks and two that load metal into machines. Most of these off-the-shelf robots were delivered in a few weeks and can be programmed remotely from a phone app, he said. -WSJ

    “The robots are becoming easier to use,” according to Michael Cicco, chief executive officer of Fanuc America, a subsidiary of Japan’s Fanuc Corp, a major supplier of industrial robots. “Companies used to think that automation was too hard or too expensive to implement.”

    So what’s likely to happen? MIT economics professor Daron Acemoglu thinks the shift to automation will lead to an oversupply of human labor that will drive wages lower, unless other industries can absorb the displaced workers.

    “Automation, if it goes very fast, can destroy a lot of jobs,” he said. “The labor shortage is not going to last. This is temporary.”

    Tyler Durden
    Sun, 06/05/2022 – 16:00

  • Diesel Once Again Racing Higher Than Prices For Crude Oil, Gasoline
    Diesel Once Again Racing Higher Than Prices For Crude Oil, Gasoline

    By John Kingston of FreightWaves

    Diesel prices have wrapped up four days of trading in which they are finishing far higher than they were at the start of the business week and have moved up faster than crude and gasoline prices.

    It’s a worrisome trend for consumers because it signals that once again, diesel is moving at a pace more bullish than that of the petroleum market as a whole. That it already has done so in recent months is evident in the gasoline-diesel spread seen on price signs outside of retail outlets, and it has a complex set of causes.

    Ultra low sulfur diesel for July delivery settled on the CME commodity exchange Friday at $4.2803 a gallon. That marked a gain of 7.19 cents per gallon on the day for an increase of 1.71%. It traded as high as $4.3250. 

    For the week — which was just four trading days, given the Memorial Day holiday — July ULSD rose 9.6%, posting a gain of 37.5 cents per gallon. 

    By contrast, the gain in WTI over the four days (from the May 27 settlement through the settlement at the end of this week) was 3.3% for West Texas Intermediate crude, barely any overall movement for global crude benchmark Brent, and 8.6% for RBOB, an unfinished gasoline blendstock that is a trading proxy for gasoline.

    Those sorts of numbers suggest that increasingly, the issue in the market is not just the loss of Russian crude supplies but a loss of refining capacity worldwide that is coming home to roost, aggravated by the effective loss of some Russian refining capacity and its output as a result of formal and informal sanctions.

    It is most evident in one of the most basic numbers traders watch: the 3:2:1. It’s a rough estimate of refining margins, arrived at by taking the price of either Brent or WTI and multiplying it by 3, and then subtracting that number from the sum of taking two barrels of gasoline and one barrel of ULSD.  

    The 3:2:1 for both Brent and WTI spent most of the week in the range of $55 to $60 per barrel, depending on how it was calculated. (Even a simple number like this can be the focus of differences in methodology.) At the start of 2021, it was closer to $20 a barrel, a figure that was far more in line with historic norms. A 3:2:1 in the upper $50s is leaving traders searching for new words to describe how unprecedented that is.

    That sort of blowout can be expected in a world in which the International Energy Agency estimated earlier this year that global refining capacity had a net decline of 730,000 barrels per day in 2021. While that is less than 1% of the global oil market, in a tight supply/demand balance, the impact of such a decline can be enormous. 

    A $55, 3:2:1 will lead refiners to process as much as they can. And that is evident in the weekly Energy Information Administration data on U.S. refining operations — mostly.

    U.S. refineries operated at 92.6% of capacity in the week ended May 27. While that is a healthy number, it actually was down slightly from the 93.6% from the prior week. And it isn’t that much higher than the average for the final full week of May, which is 91.8% over the last five years of data points, excluding pandemic-impacted 2020. 

    But the numbers on ULSD production nationwide are disappointing. Total output the last two weeks through May 27 was 4.875 and 4.818 million barrels per day, respectively. Those are the highest in a year, but the bad news for diesel consumers is that it’s still less than the output for the final week of May for the three years before the pandemic. Even with enormous margins, U.S. refiners are making less diesel than they were for this time of the year between 2017 and 2019. 

    On the U.S. East Coast, refiners have rushed to take advantage of the strong margins in that region. Refiners there over the last two weeks have operated at 97% and 98.2%, respectively, in an industry in which it is virtually impossible to run at 100% for any sustained period of time. Something inevitably breaks down. But the East Coast operating rates are against a base of refining capacity that has lost several hundred thousand barrels per day in the past several years. 

    The East Coast has been of particular interest to the diesel market given its soaring value relative to the Gulf Coast, which is the major refining center and a key export point for the U.S. and the world. 

    Weekly inventory figures dropped once again for the week ended May 27. They were at 18.8 million barrels, down from 20.4 million barrels just two weeks ago. And when it was at 20.4 million, it was already well below the roughly 38 million barrels at the start of the year in the East Coast area known as PADD 1, an EIA-designated area. 

    Despite those tight inventories, the spot market spread between the East Coast price and that in the Gulf Coast reacted counterintuitively. 

    Through much of May, as East Coast diesel inventories declined steadily during the year, that spread blew out to as much as 70 cents per gallon, according to data provided to FreightWaves by benchmark gateway General Index.

    But on Friday, General Index estimated the spread at 7 cts/g, after it declined steadily through the week. It closed last week at 11.5 cents, went to 10.8 cents for Monday and Tuesday and then dropped to 5 cents Thursday before the slight widening Friday. 

    That odd movement may be a signal that the squeeze seen in the East is no longer the outlier and tight inventories through the country mean the East Coast just got there first. For example, the spread between the Gulf Coast and Chicago ULSD markets stood at roughly 20 cents by Thursday, with Chicago running that much of a premium to the Gulf Coast. That spread also tends to be a few cents during normal periods, much like the East Coast/Gulf Coast spread.  

    Tyler Durden
    Sun, 06/05/2022 – 15:30

  • Anti-Green Blowback: ESG Funds Suffer Biggest Monthly Outflows On Record
    Anti-Green Blowback: ESG Funds Suffer Biggest Monthly Outflows On Record

    Has the ESG fraud bubble finally burst? More than two years ago, long before Elon Musk joined the growing anti-ESG bandwagon, we were the first to slam ESG as nothing but the latest Wall Street scam meant to fast-track gains for all those hypocrites who pretended to care about the environment but really had found a quick and efficient way of parting fools from their money (see from Feb 2020 “Behold The “Green” Scam” and from April 2020 “The Fraud That Is ESG Strikes Again: Six Of Top 10 ESG Funds Underperform The S&P500“).

    Well, it appears that after years of forced capital allocations, the party is over and the bubble has burst. As Bloomberg writes, this year’s weak performance by US stocks has forced many investors to recalibrate their portfolios. And they’re fleeing “do-good” scams strategies.

    After more than three years of inflows, investors are now pulling cash out of US equity exchange-traded funds with higher environmental, social and governance standards. May saw $2 billion of outflows from ESG equity funds, according to data from Bloomberg Intelligence — the biggest monthly cash pullback ever.

    “There’s no way to know for certain why the outflows were so extreme,” said Bloomberg Intelligence analyst James Seyffart, who noted that the funds had started from a high-asset base after years of inflows. “But also ESG ETFs may be finding that people care a lot more about them in bull markets.”

    Do-good investing boomed during the pandemic, with more than $68 billion flowing into ESG equity funds in the past two years. Many believed that this momentum would continue into 2022. But the spike in oil prices since Russia invaded Ukraine has lifted fossil-fuel shares, driving the S&P 500 Energy Index to gain 59% this year even as the benchmark overall has dropped 14%.

    This has made do-good investing more of a sacrifice. RBC Wealth Management recently surveyed over 900 of its US-based clients and 49% said that performance and returns were a higher priority than ESG impact, up from 42% last year.

    “The story has been told that you don’t have to give up returns in order to do ESG, but everyone assumed that you would get the same exact return profile as a traditional benchmark, which is absolutely not true because traditional benchmarks are not looking at ESG factors,” said Kent McClanahan, vice president of responsible investing at RBC Wealth Management.

    He added that social and environmental policy can take time to implement, so investors should focus more on longer-term payoffs.
    “You would think that now more than ever, people will be looking to ESG investing given what we are seeing in the energy markets and the need not to be so dependent on certain countries such as Russia and their energy and their oil and gas,” said Fiona Cincotta, senior market analyst at City Index.

    That might be one reason that at least 20 ESG-focused funds have launched in the US this year, netting almost $3.2 billion of inflows in 2022, according to data compiled by Bloomberg.

    Yet RBC clients also expressed skepticism about the ESG label. Though nearly two-thirds said that socially responsible investing is the way of the future, 74% of those surveyed said many companies provide misleading information about their ESG initiatives. This is an issue that could eventually be addressed through a Securities and Exchange Commission’s proposal for new restrictions to ensure ESG funds accurately describe their investments.

    Ivy Jack, head of equities at Northstar Asset Management, said that this year’s performance has exposed the fact that some investors were caught up in ESG as a fad and misinformed.

    “If you really want to understand if someone is serious about ESG, I would first ask them to look at their portfolio and ask them to explain why all the companies are in there and how those companies relate to their values,” Jack said. “To the extent that someone can’t do that for you, well that’s a red flag.”

    See John Authers latest “ESG Is Alive and Well. Just Call It Protectionism” for another take on ESG.

    Tyler Durden
    Sun, 06/05/2022 – 15:00

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