- The Great 'Trifurcation'
The Great ‘Trifurcation’
Authored by Andrew Korybko via The Automatic Earth blog,
Tri-Multipolarity
The global systemic transition’s impending evolution towards tri-multipolarity could see the US-led West’s Golden Billion, the Sino-Russo Entente, and the de facto Indian-led Global South becoming the most prominent poles in International Relations, below which would be rising powers and regional groups. All actors would balance one another by multi-aligning within and between their respective levels, which might result in stabilizing global affairs much more than the prior unipolar and bi-multipolar orders did.
International Relations are hurtling towards tripolarity at an astounding pace as a result of the dramatic events that unfolded over the past year and especially the last month. Those readers who haven’t closely been following this megatrend might be taken aback by this assessment, hence the need for them to review the following analyses that’ll place everything into its appropriate context. After listing them, they’ll then be summarized for convenience before explaining what might soon come next:
The “New Détente”
To oversimplify the confluence of these complex trends, the US prioritized containing Russia in order to facilitate its containment of China, ergo the latest phase of the Ukrainian Conflict that it provoked via Moscow’s ongoing special operation there. Throughout the course of the NATO-Russian proxy war that followed, the US successfully reasserted its unipolar hegemony over the EU while destabilizing the globalized system upon which China’s grand strategy depends, thus giving it an edge over Beijing.
This in turn prompted President Xi to initiate an attempted “New Détente” during mid-November’s G20 Summit in Bali, during which time he hoped that China and the US could eventually reach a series of mutual compromises aimed at establishing a “new normal” in their ties. The purpose behind doing so was to delay the end of the bi-multipolar world order within which these two superpowers exerted the most influence over International Relations, which was challenged by India’s rise over the past year.
India’s Game-Changing Influence
That South Asian state became a globally significant Great Power during this time as a result of its masterful balancing act between the US-led West’s Golden Billion and the jointly BRICS– & SCO-led Global South of which it’s a part. Its kingmaker role in the New Cold War between them over the direction of the global systemic transition enabled the rest of the Global South to rise in India’s wake, thus revolutionizing International Relations by accelerating the emergence of tri-multipolarity.
The aforementioned sequence of events imbued the Sino-American “New Détente” with a sense of urgency since both superpowers had self-interested reasons for regaining joint control of these processes, though their attempted rapprochement was unexpectedly derailed by the balloon incident. The resultantly renewed influence of hardline factions over policymaking that occurred in the aftermath of that incident abruptly ended their incipient talks and placed them on the trajectory of intense rivalry.
China’s Grand Strategic Recalculations
In parallel with the abovementioned development, NATO declared that it’s in a so-called “race of logistics”/“war of attrition” with Russia, which implied that it’ll redouble its military support to Kiev even at the expense of meeting its own members’ minimum national security needs. Should that bloc succeed in making a breakthrough along the Line of Control (LOC), then it could catalyze the worst-case scenario of Russia’s “Balkanization” if those disadvantageous military-strategic dynamics spiral out of control.
Both President Putin and his predecessor Medvedev recently warned about that possibility, which remains unlikely for now but still can’t be discounted, thus contributing to China’s gradual recalibration of its approach to the NATO-Russian proxy war when coupled with the end of the “New Détente”. This directly led to the People’s Republic seriously considering the dispatch of lethal aid to its strategic partner in order to offset that worst-case scenario, thus prompting sanctions threats from the West.
“The Great Trifurcation”
In the event that China feels forced by NATO to aid Russia in such a way and the Golden Billion imposes sanctions against it in response, then it’s expected that a US-initiated Chinese-European “decoupling” along the lines of the prior US-initiated Russian-European one could potentially follow. Reuters’ exclusive report on Wednesday citing four unnamed US officials and other sources extended credence to the preceding scenario by revealing that the Golden Billion is indeed discussing multilateral sanctions.
Should those two developments take place – China arming Russia and then being sanctioned by the Golden Billion in a way that provokes their “decoupling” (whether gradual or instantaneous) – then International Relations would enter a period of tri-multipolarity characterized by the prominence of three poles that exert the most influence over global affairs, but whose influence nevertheless wouldn’t be absolute since it’ll be kept in check to an extent by rising powers and regional groups.
The Tri-Multipolar World Order
The three expected poles are the US-led West’s Golden Billion, the Sino-Russo Entente, and the de facto Indian-led Global South that’ll likely continue informally assembling into a new Non-Aligned Movement (“Neo-NAM”). Within the last-mentioned will reside rising powers like Brazil, Iran, South Africa, and Turkiye, among others, alongside regional groups like the African Union (AU), ASEAN, and the Community of Latin American and Caribbean States (CELAC).
Each of these three categories of actors – the three poles as well as the rising powers and regional groups that sit below the former in this informal international hierarchy – are expected to balance one another by multi-aligning within and between their respective levels. India’s role will be the most important of them all since it’s poised to facilitate trade between the Golden Billion and the Sino-Russo Entente in the event that their potential “decoupling” is taken to an extreme, which can’t be ruled out.
India’s Kingmaker Role
Furthermore, India’s earlier virtual hosting of the Voice Of Global South Summit positioned this civilization-state as the center of gravity for its fellow developing peers, which bolsters the likelihood that the Neo-NAM will continue informally assembling around it. From there, India can promote its own financial, technological, and other platforms in order to provide Global South states with a neutral third choice between the Golden Billion and the Sino-Russo Entente’s respective ones in the New Cold War.
Those rising powers and regional groups that participate within the unofficially Indian-led Neo-NAM could also develop their own platforms too, but India’s might become the standard for facilitating engagement between them at their early stages. In parallel, global fora like the UN and G20 will no longer have much significance other than functioning as talking clubs, while interests-driven and regional groups will replace their prior role in promoting tangible cooperation between countries.
Concluding Thoughts
The global systemic transition’s impending evolution towards tri-multipolarity could see the US-led West’s Golden Billion, the Sino-Russo Entente, and the de facto Indian-led Global South becoming the most prominent poles in International Relations, below which would be rising powers and regional groups. All actors would balance one another by multi-aligning within and between their respective levels, which might result in stabilizing global affairs much more than the prior unipolar and bi-multipolar orders did.
* * *
Background Briefings
* 7 October 2021: “Towards Bi-Multipolarity”
* 16 December 2021: “The Neo-NAM: From Vision To Reality”
* 15 March 2022: “Why Did The U.S. Prioritize Containing Russia Over China?”
* 26 March 2022: “Russia Is Waging an Existential Struggle in Defense of Its Independence & Sovereignty”
* 22 May 2022: “Russia, Iran, And India Are Creating A Third Pole Of Influence In International Relations”
* 6 June 2022: “India Is The Irreplaceable Balancing Force In The Global Systemic Transition”
* 20 June 2022: “Towards Dual-Tripolarity: An Indian Grand Strategy For The Age Of Complexity”
* 5 August 2022: “The Russian Foreign Ministry Comprehensively Explained The Global Systemic Transition”
* 1 October 2022: “The Ukrainian Conflict Might Have Already Derailed China’s Superpower Trajectory”
* 29 October 2022: “The Importance Of Properly Framing The New Cold War”
* 19 November 2022: “Analyzing The US-Chinese-Russian-Indian Interplay In The Global Systemic Transition”
* 29 November 2022: “The Evolution Of Key Players’ Perceptions Across The Course Of The Ukrainian Conflict”
* 14 December 2022: “India’s Principled Neutrality Reaps Grand Strategic Dividends”
* 28 December 2022: “The Five Ways That The US Successfully Reasserted Its Hegemony Over Europe In 2022”
* 1 January 2023: “The New York Times Tried To Throw Shade On India’s Global Rise”
* 7 January 2023: “India’s Global South Summit Is The Most Important Multilateral Event In Decades”
* 11 January 2023: “Exposing Western Media’s Narrative Agenda In Spinning The Sino-American New Détente”
* 4 February 2023: “The Chinese Balloon Incident Could Decisively Shift China’s & The US’ ‘Deep State’ Dynamics”
* 14 February 2023: “NATO’s Self-Declared ‘Race Of Logistics’ Confirms The Bloc’s Military-Industrial Crisis”
* 26 February 2023: “China Compellingly Appears To Be Recalibrating Its Approach To The NATO-Russian Proxy War”
* 28 February 2023: “Just How Drastically Would The World Change If China Armed Russia?”
* 1 March 2023: “Global Fora Like The UN & G20 Are Gradually Losing Their Importance”
* 1 March 2023: “Germany Is Lying: Chinese Arms Shipments To Russia Wouldn’t Violate International Law”
* * *
Tyler Durden
Sun, 03/05/2023 – 23:30 - Deporting Fentanyl Dealers Violates Sanctuary City Policies, Says SF Supervisor
Deporting Fentanyl Dealers Violates Sanctuary City Policies, Says SF Supervisor
Authored by Brad Jones via The Epoch Times (emphasis ours),
San Francisco County Supervisor Shamann Walton told San Franciscans this week the U.S. shouldn’t deport illegal immigrant drug dealers for selling fentanyl, the deadly synthetic opioid that was largely responsible for nearly 2,000 drug overdose deaths in the city since 2020.
“There’s been a drug issue in this country for a very long time. But there’s no way we’re going to stand by and allow people to say that one race or immigrants are responsible for these fentanyl deaths,” Walton said at a rally on the steps of City Hall on Feb. 28.
San Francisco County Supervisor Shamann Walton speaks at a rally at city hall in San Francisco on Feb. 28. (Video screenshot courtesy of JJ Smith) Walton defended the city’s sanctuary policies that prohibit city authorities from assisting U.S. Immigration and Customs Enforcement (ICE) in response to a proposal by Supervisor Matt Dorsey to add fentanyl crimes to a list of violent crimes the city uses for cooperating with ICE. Dorsey’s proposal aligns with a recent push for a crackdown on fentanyl dealers initiated by District Attorney Brooke Jenkins.
Homeless people gather near drug dealers in the Tenderloin District of San Francisco, Calif., on Feb. 22, 2023. (John Fredricks/The Epoch Times) “You cannot violate sanctuary policy for any reason. It goes against the morals of our fabric here in San Francisco, and it also allows people who don’t share our values to persecute people that need us the most,” Walton said at the rally. “People are going crazy over fentanyl because we’re starting to see more white people die from this drug. Where the hell were these people when my mothers and my grandmothers were on crack?”
J.J. Smith lives in the city’s infamous Tenderloin district, a hotspot for drug use, and he lost his brother to a fentanyl overdose in October. He told The Epoch Times on March 2 that Walton’s remarks came as “a shock” and “didn’t set well with a lot of people, even the black community.”
Smith said it’s no secret that drug dealers with connections to Honduras largely control the illicit fentanyl trade in the Tenderloin, which is not directly affecting Walton’s district.
Honduran dealers “are the only people in San Francisco that have large quantities of fentanyl,” he claimed. “We should care because it’s killing everybody, not only white people. And, even if it does kill only white people, who is to say that’s fair?”
Smith questioned the logic behind lesser punishments for fentanyl dealers when crack dealers in the 1980s and 1990s, including African Americans, were handed long prison sentences for their crimes.
“But now Walton is speaking about a deadly drug that’s killing more people than any drug that’s ever been on the market,” he said.
A homeless man sits passed out next to an empty syringe in San Francisco, Calif., on Feb. 23, 2023. (John Fredricks/The Epoch Times) Jacqui Berlinn, co-founder of Mothers Against Drug Addiction and Deaths, told The Epoch Times she was offended by Walton’s comments.
Berlinn said she was a child during the crack cocaine epidemic of the 1980s, but that she is now fighting for her son Corey, who is addicted to fentanyl, and “for all citizens of all races” affected by the “poison flooding our cities.”
“We have members fighting with us who are black,” she told The Epoch Times in a text message. “Fentanyl is killing U.S. citizens of all races—disproportionately persons of color. It’s also poisoning U.S. children that had no idea what they were getting. There has never been a drug market so deadly as the one we are experiencing now.”
San Francisco was among the first 12 U.S. cities to declared itself a sanctuary city, prohibiting local police from stopping or arresting people based on their immigration status.
Walton was speaking at a noon rally in support of Supervisor Hillary Ronen’s proposed resolution denouncing criticism of sanctuary city policies at City Hall ahead of the Feb. 28 Board of Supervisors meeting. Supervisors Myrna Melgar and Dean Preston also attended the rally.
After nearly two hours of public comments, the board voted unanimously to continue debate on the issue at its next meeting on March 7.
San Francisco Public Defender Mano Raju said at the rally that city police unfairly target black and brown dealers and that the “war on drugs” was designed to target black and brown people for arrest and incarceration, while white dealers are rarely arrested.
“We also know that Latin X community members who are targeted are young and often survivors of labor, trafficking, and exploitation. Using our local resources to funnel these individuals to ICE detention facilities will subject them to horrific conditions that can lead to a death sentence for deportation,” he said. “And, all this cruelty is going to do nothing to stem the overdoses.”
Dorsey did not respond to requests for comment.
Tyler Durden
Sun, 03/05/2023 – 23:00 - Tulsi Gabbard: Democrats Are The Party Of Division, Authoritarianism, & War
Tulsi Gabbard: Democrats Are The Party Of Division, Authoritarianism, & War
Authored by Liam Cosgrove via The Epoch Times,
Democrats are funding a dangerous war in Ukraine, stifling ideological dissent, and polarizing this country.
That was the message from former Democratic presidential candidate Tulsi Gabbard, speaking on the final day of CPAC.
The former congresswoman took shots at radical gender ideology and accused President Joe Biden of stoking racial tensions by embracing identity politics.
She accused Biden of “fanning the flames of divisiveness.”
“They reduce each of us to the color of our skin,” Gabbard said in her speech, saying the Democrats “have become the racists they claim to hate.”
Gabbard, now a registered independent, denounced her former political party for its reckless armament of Ukraine and warned that the policy of providing lethal aid is bringing the United States to the “brink of nuclear war.”
“They’ve sent now over $100 billion to fuel this proxy war,” she said.
On Friday, Secretary of State Anthony Blinken promised an additional $400 million in weaponry and utility gear to Ukraine, with tensions rising as Ukrainian President Zelenskyy has vowed to use Western arms to retake Russian-occupied Crimea.
Gabbard, a combat veteran who served two tours of duty in Iraq, has long espoused a message of ending “regime change wars” and advocating for a more restrained foreign policy. Many within the Republican Party align with Gabbard’s anti-war sentiments.
After watching Gabbard’s speech, Rep. Matt Gaetz (R-Fla.) told The Epoch Times that he supports her advocacy to end U.S. financial support for the Ukrainian military.
The congressman talked about working closely with Gabbard in the House Armed Services Committee and butting heads with the pro-war “so-called national security experts,” as he called them.
“I think we need a focused foreign policy based in realism, not fantastical dreams of turning countries like Syria into Jeffersonian democracies,” he said.
“I want a strong, well-funded, highly capable military that we rarely use.”
On the topic of gender, Gabbard called out progressives for rejecting “the fact that there is such a thing as a woman.”
“All the ladies can attest here that we are in fact real,” she said, adding that Democrats are confusing fiction with reality.
“Truth becomes whatever those in power say it is at any given time.”
After dropping out of the presidential race, Gabbard declined to seek reelection to Congress and has since focused on activism and public speaking.
Her political future remains uncertain, but Gabbard’s unique blend of progressive and non-interventionist views continues to make her a fascinating figure in American politics.
Tyler Durden
Sun, 03/05/2023 – 22:30 - Bump Stocks Return To Store Shelves In These Three States
Bump Stocks Return To Store Shelves In These Three States
Following the Fifth Circuit Court of Appeals’ decision to invalidate the Bureau of Alcohol, Tobacco, Firearms and Explosives’ administrative ban on bump stocks, the Department of Justice was given until last Monday to challenge the ruling before the Supreme Court. However, since the DOJ did not take any action, the Fifth Circuit’s order became effective, which allowed three states, Texas, Louisiana, and Mississippi, to begin selling bump stocks once again.
Michael Cargill, the owner of Austin’s Central Texas Gun Works, sued to challenge the ban in 2019 with New Civil Liberties Alliance, a litigation group that says it protects constitutional freedoms, including Second Amendment rights.
They lost in federal court in Austin, and before a three-judge panel of the 5th Circuit, one of the country’s most conservative courts.
Victory came after another hearing, this time before the full 5th Circuit. —The Dallas Morning News
The DOJ had until Monday to appeal the decision to the Supreme Court but let the deadline pass.
“Bump Stocks are now legal in TEXAS, LOUISIANA & MISSISSIPPI,” Cargill tweeted last week.
Hey @ATFHQ thanks to Michael Cargill v Garland, bump stocks are being sold at https://t.co/CwO5T4XnFV #2a #2AShallNotBeInfringed #Texas #Louisiana #Mississippi https://t.co/SNd5G6iRFo
— Michael Cargill (@michaeldcargill) March 4, 2023
https://platform.twitter.com/widgets.js
Cargill said his store plans to sell bump stocks soon. He said the retail price would be around $249, about 15% higher than pre-ban prices, primarily due to higher commodity, labor, and transportation costs.
The ATF can still enforce the bump stock ban outside Texas, Louisiana, and Mississippi.
“Essentially, the ATF is prevented from enforcing the rule for the time being in these three states,” South Texas College of Law professor Dru Stevenson said.
As to why the DOJ didn’t ask the Supreme Court to consider the issue… Keeping the case in the Fifth Circuit’s jurisdiction would prevent the Supreme Court from agreeing with Cargill and overturning the ban nationwide.
Tyler Durden
Sun, 03/05/2023 – 22:00 - Capitol Police, FBI Failed To Share "Credible Threats" Before Jan. 6 Breach: Watchdog
Capitol Police, FBI Failed To Share “Credible Threats” Before Jan. 6 Breach: Watchdog
Authored by Zachary Stieber via The Epoch Times,
FBI agents and U.S. Capitol Police officers identified “credible threats” ahead of the Jan. 6, 2021, electoral vote certification but did not properly disseminate the intelligence, a watchdog says in a new report.
The FBI obtained information from human informants, social media, and other agencies and tracked suspected domestic terrorists traveling to Washington, according to the U.S. Government Accountability Office (GAO) report (pdf).
Capitol Police officials examined information developed from arrests and investigations, as well as open sources, and distributed a document three days before Jan. 6 that conveyed a subject of an investigation had said militia members planned to attend a Jan. 6 demonstration while armed, which would violate Washington law.
Both agencies assessed threats for credibility and reported that some of the threats were deemed credible.
But both failed to properly adhere to policies for processing or sharing information, the watchdog found.
FBI agents in San Antonio, Texas, for instance, received tips from the social media company Parler but did not develop reports based on the tips, as required.
“FBI officials noted that the FBI San Antonio Field Office did not develop any related reports on January 6 events as required by policy, such as Guardians, situational information reports, or intelligence information reports but did not indicate why not,” GAO said.
Such reports are distributed to state, local, and tribal law enforcement partners.
A U.S. Capitol Police officer monitors the crowd atop the east Rotunda steps on Jan. 6, 2021. (Bobby Powell/Special to The Epoch Times)
Rep. Ralph Norman (R-S.C.) said on “Just the News, No Noise” that the FBI “had a blueprint for what was going to happen, and they didn’t think about it and look at the consequences.”
The FBI did develop some reports, which it shared with partners, the GAO report noted.
‘Relevant Threat Information’ Omitted
Capitol Police officials, meanwhile, left out “relevant threat information” it received from other agencies in documents developed for Jan. 6, according to GAO.
“Capitol Police identified potential violence that could occur on January 6 in Washington, D.C. in advance of planned events. However, it did not consistently incorporate complete information into assessments of threats in its threat products, such as information obtained from other agencies regarding an individual traveling to Washington, D.C. to engage in violence at January 6 events,” the report said.
One example of information left out was a suspicious activity report from Washington Homeland Security officials that indicated an individual planned to travel to the nation’s capitol to engage in violence during Jan. 6 protests.
Capitol Police officials also failed to update a threat product to include important information, including information indicating violence might occur during the demonstrations, and did not consistently share relevant details across its agency, “resulting in some officers, agents and intelligence staff not having complete information,” the report stated.
Eight other agencies, including the National Park Service and the Secret Service, examined by GAO received information, but they either did not assess threats for credibility or did not identify any of the threats as credible.
The Department of Homeland Security Office of Intelligence & Analysis (DHS I&A) did not assess any reports or identify any credible threats before the department’s team charged with collecting information from open sources “did not share reports on January 6 open source threats with other DHS I&A divisions until after the Capitol attack occurred,” according to the watchdog.
Police officers set up barricades outside of the U.S. Capitol in Washington on Jan. 6, 2021. (Andrew Caballero-Reynolds/AFP via Getty Images)
DHS I&A also failed to share information with the Capitol Police “in a timely manner,” GAO said.
GAO made 10 recommendations, including advising FBI Director Christopher Wray, a Trump appointee, to assess why personnel did not adhere to policy in processing information related to Jan. 6 and, after an assessment, implement a plan for fixing what went wrong.
FBI Takes Note
Many of the agencies, including the FBI, agreed with the recommendations.
“We appreciate the GAO’s extensive fact gathering and thorough analysis in the report,” adding that “we will incorporate GAO’s conclusion that, despite collecting and sharing significant pieces of threat reporting, the FBI did not process all relevant information related to potential violence on January 6,” Larissa Knapp, an FBI official, said in a response to GAO.
“Our goal is always to disrupt and stay ahead of the threat, and we are constantly trying to learn and evaluate what we could have done better or differently, this is especially true of the attack on the Capitol,” Knapp also said.
The FBI declined to comment beyond Knapp’s letter. The Capitol Police and DHS did not respond to requests for comment.
U.S. Capitol Police Chief Thomas Manger told GAO that it is taking steps to implement the watchdog’s recommendation that the Capitol Police Board should establish policies for sharing information on possible threats across the agency.
Manger said the department is drafting policy that “will provide guidance for sharing threat-related information agency-wide.”
GAO previously concluded that DHS should have designated the Jan. 6 demonstrations as special, which would have triggered heightened security.
Another previous report found that many agencies were aware of open source, or publicly available, information on potential violence planned for Jan. 6.
Tyler Durden
Sun, 03/05/2023 – 21:30 - Japan's Population In Freefall As Twice As Many People Die As Are Born
Japan’s Population In Freefall As Twice As Many People Die As Are Born
Japan’s population is in freefall.
In 2022, the number of births registered in Japan plummeted to another record low last year according to statistics released by the Ministry of Health – the latest worrying statistic in a decades-long decline that the country’s authorities have failed to reverse despite their extensive efforts.
The country saw just 799,728 births in 2022 – the lowest number on record and the first ever dip below 800,000 – and about half of the number of deaths, which at more than 1.58 million, was a record high. The number of births in Japan has nearly halved in the past 40 years: in 1982, Japan recorded more than 1.5 million births, a number which was then more than double the number of deaths. This ratio has since reversed.
As shown in the chart above, deaths have outpaced births in Japan for the past 15 years – a trend which is unlikely to reverse ever again – posing an existential problem for the (aged) leaders of the world’s third-largest economy. They now face a ballooning elderly population, along with a shrinking workforce to fund pensions and health care as demand from the aging population surges.
Japan’s population has been in steady decline since its economic boom of the 1980s and stood at 125.5 million in 2021, according to the most recent government figures.
According to CNN, Japan’s fertility rate of 1.3 is far below the rate of 2.1 required to maintain a stable population, in the absence of immigration.
The country also has one of the highest life expectancies in the world; in 2020, nearly one in 1,500 people in Japan were age 100 or older, according to government data.
These concerning trends prompted a warning in January from Prime Minister Fumio Kishida that Japan is “on the brink of not being able to maintain social functions.”
“In thinking of the sustainability and inclusiveness of our nation’s economy and society, we place child-rearing support as our most important policy,” he said, adding that Japan “simply cannot wait any longer” in solving the problem of its low birth rate.
A new government agency will be set up in April to focus on the issue, with PM Kishida saying in January that he wants the government to double its spending on child-related programs. But money alone might not be able to solve the multi-pronged problem, with various social factors contributing to the low birth rate.
Japan’s high cost of living, limited space and lack of child care support in cities make it difficult to raise children, meaning fewer couples are having kids. Urban couples are also often far from extended family in other regions, who could help provide support.
In 2022, Japan was ranked one of the world’s most expensive places to raise a child, according to research from financial institution Jefferies. And yet, the country’s economy has stalled since the early 1990s, meaning frustratingly low wages and little upward mobility: the average real annual household income declined from 6.59 million yen ($50,600) in 1995 to 5.64 million yen ($43,300) in 2020, according to 2021 data from the Ministry of Health, Labor and Welfare.
Attitudes toward marriage and starting families have also shifted in recent years, with more couples putting off both during the pandemic — and young people feeling increasingly pessimistic about the future.
In 2022, Japan was ranked one of the world’s most expensive places to raise a child, according to research from financial institution Jefferies. And yet, the country’s economy has stalled since the early 1990s, meaning frustratingly low wages and little upward mobility.
The average real annual household income declined from 6.59 million yen ($50,600) in 1995 to 5.64 million yen ($43,300) in 2020, according to 2021 data from the Ministry of Health, Labor and Welfare.
Attitudes toward marriage and starting families have also shifted in recent years, with more couples putting off both during the pandemic — and young people feeling increasingly pessimistic about the future. Who can blame them for not feeling frisky.
It’s a familiar story throughout East Asia, where South Korea’s fertility rate — already the world’s lowest — dropped yet again last year in the latest setback to the country’s efforts to boost its declining population.
Meanwhile, in January China just lost its title as the world’s most populous country to India after its population shrank in 2022 for the first time since the 1960s.
Tyler Durden
Sun, 03/05/2023 – 21:00 - A Long Idea From One Of Wall Street's Biggest Bears
A Long Idea From One Of Wall Street’s Biggest Bears
By Russell Clark, author of the Capital Flows and Asset Markets substack, and former CIO of the (very bearish) Horseman Global hedge fund.
In previous posts, I have tried to talk about how I used to manage money using a 3M process – Macro, Micro and Market. In essence I was looking for a macro change, that was supported by underlying industry data (micro) and confirmed by market trends, particularly technicals. The biggest macro trend I paid attention to was currency, which I had seen be the least understood factor in investing in my career. This stopped working in 2016, with Brexit, China and Trump, making politics far more important than macro. It took me a long time to accept that politics is more important than macro, but now that it has, my investing process is improving. I have had to rename it 4M – with the additional M is motivation, which is another way of saying politics. Paid subscribers will be aware of the ideas I have already pitched.
On the long side, I like Occidental for its commodity exposure and long term option on Direct Air Capture technology. I also like Japanese banks as an aggressive inflation trade. On the short side, I still like TLT, McDonalds, and residential REITS. All of this ideas are driven by the view that inflation is political, and the politics is now towards raising real wages. This means you have inflation, AND, tight financial conditions to protect those wage increase.
One of the ideas I have been toying with has been driven by politics, or the Motivation (the first M). One of the key ideas is that rising wages tends to push up the price of food. In a world of rising wages, food prices should rise.
This surge in food inflation is driven by China getting wealthy, more than anything else. The success of China in driving wages higher relative to other Asian nations that industrialized earlier is truly staggering. In a pro-capital world, China would have been expected to devalue to regain competitiveness, but China has obviously chosen to promote higher wages. When economist talk about China exporting inflation, what they mean is that Chinese policy has successfully raised wages – and in stark contrast to the experience of other Asian nations.
The combination of rising food prices makes me like food related companies, particularly companies that own or control farm land. Russia’s invasion of Ukraine also made me like the look of agricultural commodities that Ukraine has a large market share of exports – namely sunflower oil. In the traded vegetable oil market, palm oil dominates, with sunflower oil and soybean oil following.
Vegetable oil imports is one commodity that India imports more than China, making its demand outlook more robust than industrial commodities.
As it happens, supply of sunflower oil was better than expected, and inventory of crude palm oil has been larger than expected. This had lead palm oil to trade at a discount to soy.
Crude palm oil production and exports are dominated by two countries, Indonesia and Malaysia. The largest plantation owner is Singapore listed Wilmar International.
There are two things that attract me to Wilmar. Firstly, when they export palm oil to both China and India, they have built a local brand of vegetable oil as a consumer business. This has a much higher value than the plantation business, which they have attempted to monetize by listing a 10% stake in their Chinese consumer business in Shanghai. The value of their stake in Kerry Arwana has consistently been higher than Wilmar’s market cap.
The other thing that gets me very excited about Wilmar is that they have begun to expand into Africa. Still small, but this is much large than any other listed crude palm operators in Arica. Nigeria is now a a larger consumer of palm oil than the US, and has been growing rapidly. Palm oil originated in West Africa, before being introduced to Malaysia and Indonesia, so offers an attractive way to play growing African consumption.
Wilmar has a track record of building good consumer businesses, even in notoriously difficult markets like China and India.
Wilmar trades below book value with a 4% dividend yield. Why so cheap? I can give a lot of reasons, ranging from claims that palm oil cultivation destroys the environment, to the fact that other Singaporean commodity trading stocks, Noble and Olam ended up in financial trouble, and delisted. Against that, US listed trader, Archer Daniels Midland owns 25% of Wilmar. Wilmar faces the same headwinds of rising interest rates, but a cheap valuation with a long dated call option on African consumption sounds pretty good to me. Full discloser – I have a long position.
Tyler Durden
Sun, 03/05/2023 – 20:30 - With Tuesday Pot Legalization Vote, OK Poised To Rake In Texans' Money
With Tuesday Pot Legalization Vote, OK Poised To Rake In Texans’ Money
Tuesday may bring a major milestone in America’s relentless march toward marijuana legalization, as Oklahoma will likely become the most conservative state so far to approve recreational use of the plant. Trump carried the state by a 33% margin in 2020.
Oklahomans will consider State Question 820, which offers a chance to legalize consumption by adults 21 and older — along with their possession of up to an ounce — and grant Okies the freedom to grow six mature plants and six seedlings for their own use.
A 15% tax would be imposed on sales, with proceeds flowing to student services, drug addiction programs, courts, local government and the state’s general fund.
Backers of State Question 820 deliver petition signatures to Oklahoma’s Secretary of State in July (Yes on 820 Campaign) With approval, Oklahoma stands to rake in tax revenue from Texans expected to cross the border to take a break from the Lone Star State’s stubborn nanny-state tyranny. Ryan Kiesel, a former Oklahoma state legislator and current legalization advocate told AP:
“There are thousands and thousands of Texans who are increasingly coming to Oklahoma as a tourist destination. I want to be able to sell legal, regulated and taxed marijuana to those Texans over the age of 21, and take their tax dollars and invest them in Oklahoma schools and Oklahoma health care.”
Nearly 8 million people live in Dallas-Fort Worth, which is almost twice as many as live in all of Oklahoma.
Oklahoma is a standout with one of the country’s most relaxed medical marijuana regimes. About one in ten adults in the state holds a medical license. In contrast to most states that allow medical use, Oklahoma has no list of qualifying conditions and patients can receive a doctor’s recommendation over the internet.
Okie cannabis growers are desperate to expand their market: The state’s medical marijuana market is so relatively free that low barriers to entry have sent prices into a nose-dive, with one retailer telling AP the price of a 1-gram cartridge of concentrate has collapsed from $60 to $70 in 2019 to just $20 today.
The last public poll on the proposal — taken way back in October — had voters approving recreational legalization, 49% to 38%. The question was originally slated to appear on the November 2022 midterm ballot, but a delay in verifying petition signatures led to it being moved to March 7.
In 2018, the ballot measure to allow medical use was approved 56% to 43%. The wild card in Tuesday’s election is turnout, as SQ820 is the only statewide measure on the ballot.
Yes on 820‘s Michelle Tilley told NonDoc that her team is feeling “pretty good” about their chances:
“I think what resonates with people is compassion for other human beings with the criminal justice reform, and I think the revenue piece is also something people have been excited about.”
The Oklahoma Sheriff’s Association opposes the measure, but plenty of cops are ready to stop wasting time and resources punishing adults who choose to intoxicate themselves with a plant nobody’s ever overdosed from.
Tyler Durden
Sun, 03/05/2023 – 20:00 - Russia's Oil Revenues Plunged By 48% In February
Russia’s Oil Revenues Plunged By 48% In February
By Charles Kennedy of OilPrice.com,
Russian tax revenue from crude oil and petroleum products plummeted by 48% in February from a year earlier due to the much lower price of Russia’s flagship crude grade after the EU banned imports of Russian oil, according to Bloomberg estimates based on official Russian data.
Total tax revenues from oil and natural gas dipped by 46% year over year to $6.9 billion (521 billion Russian rubles) in February, per data from the Russian Finance Ministry published on Friday.
Russia’s revenues from crude oil and oil products alone crumbled by 48% annually to $4.8 billion (361 billion rubles), according to Bloomberg’s calculations. Oil accounted for more than two-thirds of Russia’s energy tax revenue in February.
Russian natural gas revenues also plummeted last month compared to February 2022, when Russia invaded Ukraine. Natural gas revenues slumped by 42% as Russia cut off gas supplies to a number of EU customers after the invasion.
The plunge in the price of the flagship Russian crude grade, Urals, was the key reason for the lower revenues for the country for both January and February this year.
Russia’s budget was $23.3 billion (1.76 trillion rubles) into deficit in January, compared to a surplus for January 2022, as state revenues from oil and gas plunged by 46.4% due to the low price of Urals and lower natural gas exports, the Russian Finance Ministry said last month. Russia’s budget revenues from oil and gas plunged in January by 46% compared to the same month last year due to the sanctions on Russian oil exports, which led to a slump in the price of Russia’s flagship crude grade.
The average price of the Urals blend stood at $49.52 per barrel in January and February 2023, compared to $88.89 per barrel for the same months last year, the Russian Finance Ministry said earlier this week. The price of Urals averaged $49.56 a barrel in February 2023, or 1.86 times lower than the average price in February 2022 – $92.15 per barrel.
Tyler Durden
Sun, 03/05/2023 – 19:30 - Communities Block, Ban Dollar Stores Amid Nationwide Invasion
Communities Block, Ban Dollar Stores Amid Nationwide Invasion
Recall Dollar General, Dollar Tree, and Family Dollar stores are invading low-income communities nationwide. At the start of 2022, all three discount retailers operated 34,000 US stores, more than Mcdonald’s, Starbucks, Target, and Walmart combined. Now there’s a wave of grassroots opposition in cities and towns blocking these chains from opening new stores.
According to a new report published by the Institute for Local Self-Reliance, a nonprofit organization and advocacy group focused on sustainable local economies, at least 75 communities blocked proposed dollar stores, with more than 50 of those denials occurring between January 2021 and the end of 2022.
ISLR continued:
At least 54 cities and towns — including Birmingham, Ala.; Fort Worth, Texas; Kansas City, Kan.; and Plainview, Neb. — have gone further. They’ve enacted laws that sharply restrict new dollar stores, typically by barring them from opening within one to two miles of an existing dollar store.
At least one town, Stonecrest, Ga., has imposed a total ban on new dollar stores. These laws are often adopted in conjunction with measures designed to support the retention and development of grocery stores.
These discounted retailers are rapidly expanding their presence across the country, targeting low-income communities with cheap Chinese-made products and unhealthy food.
A town in eastern Kentucky, with a population of 1,600, was recently overrun by a ‘dollar store mania.’ Given the low incomes and inexpensive land around Olive Hill, it makes sense why dollar stores are flooding the small town to take advantage of poor residents.
An Olive Hill resident told Daily Mail last month:
Source: Daily Mail The proliferation of new dollar stores shows no signs of slowing down. “Communities need reinforcements to stop the encroachment of dollar stores. They need action at the federal level, where a negligent approach to antitrust has allowed Dollar General and Dollar Tree to flex their market power unfairly and overrun their less powerful competitors, especially independent grocery stores,” the report said.
Make local grocery stores and farms thrive again as small towns need an economic revival.
Tyler Durden
Sun, 03/05/2023 – 19:00 - Flynn Sues DOJ, FBI For Malicious Prosecution, Wants $50 Million
Flynn Sues DOJ, FBI For Malicious Prosecution, Wants $50 Million
Authored by Petr Svab via The Epoch Times (emphasis ours),
Retired Lt. Gen. Michael Flynn, former national security adviser to President Donald Trump, has filed a lawsuit against the Department of Justice (DOJ), FBI, and others, alleging he was maliciously prosecuted. He is demanding at least $50 million in compensation.
“Defendant maliciously investigated and prosecuted General Flynn by initiating and continuing a baseless counterintelligence investigation and by filing a criminal information lacking probable cause,” says the suit, filed on March 3 with the U.S. District Court for the Middle District of Florida (pdf).
Retired Lt. Gen. Michael Flynn in Huntington Beach, Calif., on Sept. 18, 2022. (John Fredricks/The Epoch Times) The former head of the Defense Intelligence Agency (DIA) under the Obama administration was investigated by the FBI starting in August 2016 for supposed ties to Russia. In 2017, he was charged with lying to the FBI during an interview earlier that year.
The suit alleges that the FBI, and later prosecutors from the office of special counsel Robert Mueller, investigated and prosecuted him for political reasons, considering him a threat.
“General Flynn—who already had a reputation as a hands-on disruptor at DIA, who had publicly excoriated the politicization of the intelligence community, and who had made clear his desire to overhaul the national security structure and the ‘interagency process’—was a direct threat, not only to the self-interest of entrenched intelligence bureaucracies and the federal officials involved, but to exposing their prior and ongoing efforts to derail and discredit President Trump,” the suit says.
The case against Flynn was riddled with contradictions and inconsistencies. FBI agents had already decided to close his case by early January 2017, but higher-ups intervened to keep it open on the justification that Flynn may have violated an obscure and antiquated law called the Logan Act by discussing with a Russian ambassador the priorities of the incoming administration during the transition period. DOJ officials at the time rejected the legal theory. The 1799 Logan Act, which prohibits certain kinds of unauthorized diplomacy, may in fact be unconstitutional, several lawyers previously told The Epoch Times. It has never been successfully prosecuted, much less aimed at an incoming national security adviser.
The Flynn investigation, codenamed Crossfire Razor, continued “only because of Defendant’s agents and agencies’ malicious, partisan, and unethical intent to investigate their political opponents generally and to destroy General Flynn specifically,” the suit says.
Subsequent leaks to the media claimed that he may have violated the Logan Act by talking with the Russian ambassador, Sergei Kislyak, about sanctions imposed at the time on Russia by the outgoing Obama administration.
FBI top brass then meticulously prepared and arranged the interview to appear as “an informal meeting, just to put the Kislyak calls being discussed in the press to bed,” the suit says.
On Jan. 24, 2017, when two FBI agents interviewed Flynn, they asked him whether he talked with Kislyak about expulsions of Russian diplomats. He said no, which was not the truth. When asked again, he said he didn’t remember.
This exchange then formed the core of the charge brought against Flynn by Mueller, who took over his case in May 2017.
Read more here…
Tyler Durden
Sun, 03/05/2023 – 18:30 - US Begins 'Training Assessment' For Ukrainian Pilots On F-16s
US Begins ‘Training Assessment’ For Ukrainian Pilots On F-16s
The White House has so far ruled out calls to provide the Ukrainian government with F-16 fighter jets, but clearly the idea is still on the table and Biden may be close to pulling the trigger amid intense administration discussions.
“Two Ukrainian pilots are currently in the United States undergoing an assessment to determine how long it could take to train them to fly attack aircraft, including F-16 fighter jets, according to two congressional officials and a senior U.S. official,” a weekend NBC report indicates.
“The Ukrainians’ skills are being evaluated on simulators at a U.S. military base in Tucson, Arizona, the officials said, and they may be joined by more of their fellow pilots soon,” the report continues.
Source: Shutterstock The officials additionally said 10 more Ukrainian pilots are expected to join the program soon, and they may arrive in the US this month.
The officials emphasized that this does not yet constitute a fighter jet training program for Ukrainian pilots, and that actual aircraft will not be flown – only the advanced flight simulators. But clearly if F-16s are approved, this will form the basis of formal training on the jets.
One of the main reasons for the hold-up in approving jets for Ukraine, apart from the fact that Russia is vowing severe and unpredictable escalation, is the significant time investment of the training, which could take at least a year or years.
Colin Kahl, defense undersecretary for policy, recently told the House Armed Services Committee that the US has “not started training on F-16s” and that the delivery timeline is about 18 months. The training program for F-16s also happens to be about 18 months.
“So you don’t actually save yourself time by starting the training early in our assessment,” said Kahl. “And since we haven’t made the decision to provide F-16’s and neither have our allies and partners, it doesn’t make sense to start to train them on a system they may never get.”
So by all accounts, even if the Biden administration were to approve jets for Ukraine tomorrow, it could take years before they are piloted by Ukrainians in the skies of the conflict.
Tyler Durden
Sun, 03/05/2023 – 18:00 - "Most Important Discovery In 21st Century": Archeologists Find Hidden Corridor In Great Pyramid Of Giza
“Most Important Discovery In 21st Century”: Archeologists Find Hidden Corridor In Great Pyramid Of Giza
Humans have spent centuries, if not longer, attempting to unlock the secrets of the 4,500-year-old Great Pyramids at Giza, located just outside of Cairo. But with modern cosmic ray scanning technology, archaeologists have discovered a hidden passageway, Reuters reported.
Mostafa Waziri, head of Egypt’s Supreme Council of Antiquities, announced the discovery of the 30 feet in length and 6 feet wide corridor near the main entrance of the Pyramid of Khufu after a tiny snake camera was inserted through a crack. Speculation about the cavity behind the opening was first revealed via cosmic ray mapping in 2016.
Want to see that endoscope glimpse into that “new” #GreatPyramid corridor? Of course you want to see that endoscope glimpse into the Great Pyramid chamber. 😉
(Full @HIP_i_ #ScanPyramids 2023 Report video here: https://t.co/AmKNqZ8iJX) pic.twitter.com/1bhOiyQbbB
— Jens Notroff (@jens2go) March 2, 2023
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Waziri told reporters that the unfinished corridor was constructed to distribute the pyramid’s weight around the main entrance, which is now being used by tourists about 21 feet away. There’s the belief another chamber could lie beneath it.
“We’re going to continue our scanning so we will see what we can do … to figure out what we can find out beneath it, or just by the end of this corridor,” he said.
Former Egyptian Antiquities Minister Zahi Hawass commented on the discovery of the secret passage:
“This discovery, in my opinion, is the most important discovery in the 21st century.”
Dr.#Zahi_Hawass to Announce More Groundbreaking Discoveries Soon
Egypt’s Great Pyramid of #Giza #Europe..Let’s go😍
welcome to #Egypt#France #Germany #Greece #Luxembourg #Maldives #Russia #Romania #Switzerland #United_Kingdom #United_States #Poland#Amsterdam #Japan #Argentina pic.twitter.com/bPPVy1deUz— 🇪🇬 KMK.EED 🇪🇬 (@kmkeed) March 4, 2023
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As part of the Scan Pyramids project initiated in 2015, cosmic-ray mapping was utilized to uncover the mysteries within the seventh wonder of the ancient world.
Tyler Durden
Sun, 03/05/2023 – 17:00 - Thank Goodness For Friday
Thank Goodness For Friday
By Peter Tchir of Academy Securities
TGFF
Thank goodness for Friday. Or maybe I should just thank Bostic because his comments on Thursday seemed to turn the markets around.
The view (presented in last week’s Surprise, Surprise and Acceptance Stage of Rate Hike Grief) that the market was getting tired of pricing in higher yields and dragging stocks down got off to an okay start, but it became pretty shaky in the middle of the week.
The 10-year Treasury ended last week at 3.95% (it got as low as 3.89% before grinding steadily higher to 4.09% on Thursday). But TGFF because it recovered and closed basically unchanged on the week. Not a win as a bond bull, but I’ll take it.
The S&P 500 followed a rate dependent path and things got a little hairy on Thursday when the S&P dipped below the 200 DMA (around 3,940). Ultimately Bostic seemed to help (along with too much bearishness). I believe that too many people were betting on more rate hikes and that caused yields to go higher (which in turn dragged stocks lower).
As we head into this week:
- I need to do a summary of Academy’s Second Annual Geopolitical Summit West. It was very well attended and the main conversation was driven by a combination of 4 Generals and an Admiral from our Geopolitical Intelligence Group. These individuals brought a wide variety of experience and expertise to the table. Russia, China, chips, commodities, and AI all took center stage. World War v3.1 is a good piece if you haven’t read it already and the February Around the World is also germane to these discussions.
- It is “Jobs Week”. Not as entertaining as “Shark Week”, but at least we get to do it 12 times a year. Even some Fed speakers seem to be questioning whether the jobs data has been overstated. So, I’m looking for some weaker data, which should help bonds and stocks.
- Rate hikes. The terminal rate is up to 5.44%. There is chatter that the Fed could raise rates 50 bps at the next meeting. The market is pricing in 1.25 hikes at the meeting, so I am leaning towards 25 bps, but I am giving 50 bps a chance. That seems like a reasonable assessment to me. Fed fund futures are pricing in only a small chance of any cuts this year. The year-end rate is 5.3% versus a terminal rate of 5.44%. That seems fair because our view has been that the Fed was serious about staying “higher for longer” all along. We’ve disagreed on the pace of hikes, but have not been looking for cuts as early as the market expects. From here, a lot seems to have been priced into the bond market (and theoretically the equity market), which should help bonds and stocks this week.
- Stocks versus bonds. The 10-year finished unchanged, but stocks finished up 2%-3% (S&P vs Nasdaq). That is decent outperformance. From a technical standpoint, not only did the S&P 500 recover to the 200 DMA, but it is also back above the 50 DMA. I suspect that a lot of shorts got added because the market was sliding and exhibiting some technical weakness and that probably leaves us with a decent short base (which is susceptible to further squeezes). Stock performance last week should help stocks into this week.
- Credit is looking strong! CDX IG (investment grade CDS index) tightened from 77 to 71 and never went much above 77, even with stocks swooning. CDX IG tends to be more correlated with stocks than other measures of credit quality. It’s a “macro fan favorite” to trade SPX vs CDX and many of the CDX market making algos are linked to the S&P 500. All that “jargon” just means that as we dig deeper, it is even more impressive how well CDX did compared to how it seemed on the surface. Even the Bloomberg Corporate Bonds spread went from 123 to 120 (peaking at 125). That occurred even with decent new issue activity. LQD, a longer-dated IG ETF which tracks bond markets in real-time better than the indices, went from a spread of 159 to 152 (though it did get to 166 at Wednesday’s close). It is important, at least to me, that it is trading at a premium to NAV because that typically indicates that there is more strength to come. Corporate credit was very strong and is poised to do very well on any slowing of the calendar! You could argue that this is part of a trend of re-allocating money out of stocks and into bonds, but I’m going with the “credit markets often lead the way” story and they are pointing to more potential strength for equities.
- Temperance is good. This clearly has nothing to do with our Summit. It is, however, a reflection that any sign of cost controls out of tech is being rewarded with higher stock prices. This will hurt the economy and ultimately stocks (I don’t think the lows are in), but for now I expect more announcements since they are relatively easy to make (especially given how well the stocks respond).
- 0DTE. Some people are addicted to the MOSO function on Bloomberg. Others laughed (or questioned my sanity) for writing A Day in the Life of a 0DTE Option. Many people followed our more serious writing on the topic in Is 4,000 More than a Number and Zero Dark Thirty. That being said, I’m convinced that 0DTE is changing our market structure in ways that are difficult to assess and it can dramatically amplify moves.
Bottom Line
I see no reason to change last week’s bottom line (accept for adding more on credit).
Bonds can do well with the 10-year having a 3.7% target.
Risk assets can do well with a 4,200 target for the S&P 500 and CDX IG heading towards 60 (the semi-annual roll should be another factor that helps push spreads tighter). If the new issue calendar remains robust, credit could lag for a bit. However, if there are any signs of issuance slowing, the rally should be strong.
Despite the Summit starting on a day where San Diego was having worse weather than Chicago (the hail/30 mph winds made it an “experience”), the San Diego weather came through in the end!
Good luck this week and jobs are going to be interesting. I’m more worried that the jobs data could be bad (downward revisions, etc.) than I am that the data will be too strong, though both of those extremes would hurt my position on risk assets.
Maybe this Friday will give another reason to proclaim “Thank Goodness for Friday (TGFF)”!
Tyler Durden
Sun, 03/05/2023 – 16:30 - Fauci 'Prompted' Scientists To Fabricate 'Proximal Origins' Paper Ruling Out Lab-Leak: House GOP
Fauci ‘Prompted’ Scientists To Fabricate ‘Proximal Origins’ Paper Ruling Out Lab-Leak: House GOP
Dr. Anthony Fauci – who offshored banned gain-of-function research to make bat coronaviruses more transmissible to humans – has been accused by Congressional investigators of having ‘prompted’ the fabrication of a paper by a cadre of scientists aimed at disproving the Covid-19 lab-leak theory.
On February 1, 2020, Fauci and his boss, NIH Director Dr. Francis Collins, and at least eleven other scientists participated in a conference call during which several of them warned that COVID-19 may have leaked from a lab in Wuhan, China – may have been intentionally genetically manipulated.
Three days after the call, four participants from the call (Scripps Research virologist Kristian Andersen, University of Sydney virologist Edward Holmes, Tulane School of Medicine virologist Robert Garry, University of Edinburgh virologist Andrew Rambaut and Columbia University virologist Ian Lipkin) seemingly discarded their concerns over a lab-leak, and drafted “The Proximal Origin of SARS-CoV-2,” which they sent to Fauci and Collins.
Also heavily involved (yet not credited) was Dr. Jeremy Farrar, the current Chief Scientist at the World Health Organization.
As a related aside – the Washington Examiner revealed last week that two authors of “Proximal Origin” who initially expressed concerns over a lab-leak and then changed their tune (Anderson and Garry), received millions in NIH grants under Fauci.
Now, according to the House Select Subcommittee on the Coronavirus Pandemic, Fauci ‘prompted’ the creation of the paper;
“New evidence released by the Select Subcommittee today suggests that Dr. Fauci “prompted” the drafting of a publication that would “disprove” the lab leak theory, the authors of this paper skewed available evidence to achieve that goal, and Dr. Jeremy Farrar went uncredited despite significant involvement.”
More:
So, for those following the bouncing ball…
The US was doing risky gain-of-function research on US soil until 2014, when the Obama administration banned it. Four months before the ban, Dr. Fauci offshored it to Wuhan, China through New York nonprofit, EcoHealth Alliance.
After Sars-CoV-2 broke out down the street from the Wuhan Institute of Virology, Fauci engaged in a massive campaign to deny the possibility of a lab-leak from the lab he funded, and instead pin the blame on a yet-to-be discovered zoonotic intermediary species.
And if you’d like to dig even deeper, this is perhaps the best, most comprehensive summary of the “proximal origin” timeline.
Read the entire letter below:
Further reading:
Tyler Durden
Sun, 03/05/2023 – 16:00 - Goldman: The Big Near-Term Risk Here Is If The Fed Opens Up 50s
Goldman: The Big Near-Term Risk Here Is If The Fed Opens Up 50s
By Tony Pasquariello,Goldman head of hedge fund coverage
Coming out of a week that brought a somewhat uninspiring data set, yet interesting price action … and, headed into a very important week (payrolls, Powell and the BOJ) … What follows from here reflects the themes that come up in client conversations.
My view in one line: rates should keep chopping higher, volatility is to be owned, and don’t get carried away on non-dollar trades.
1. While not breaking news, and at the risk of serious over-reduction, I’d describe the core macro backdrop in 2023 as follows: US inflation has been stickier-than-expected; US growth has been stronger-than-expected. To be clear, I’d stop short of describing the domestic economy as “running hot,” but the broad trend of the hard data would argue the US is generally chugging along (here I’d point you towards the recent jump in our US economic surprise index). Taken together, this invites an obvious question on whether peak rates are, once again, still in front of us — it’s not a reach to say it, but my bet is they still are, particularly in the belly and back end.
2. The macro ecosystem I just described is NOT necessarily what many people expected as we came into the new year. Remember, the consensus view centered around a messy first half, and there was plenty of recession talk as recently as early January. On one hand, it feels like that tactical opportunity set of higher front end rates, a stronger dollar and a rip in NDX wasn’t broadly captured (and, if one made money in January, they likely gave it back in February, or vice-versa). On the other hand, there are plenty of folks still seemingly content in adding to lower-risk carry strategies … 6-month T-bills are kicking off 5% yields right now (which now exceeds the carry on a 60/40 portfolio) and US 2-year notes are trading at levels not seen since 2007. For further reading: link.
3. I received a lot of pushback last week on my comment that I think the back end of the US rates curve is vulnerable. Here’s what I was trying to articulate (I should have just quoted Dominic Wilson directly): higher US rates along the curve is the direction of travel for now. Why? The longer we live with a 5-handle on the terminal rate … and the US economy maintains broad momentum … the more evidence we have that the equilibrium rate is higher … so, the more likely it is the market contemplates seriously a 6-handle on the terminal rate … and therefore the harder it is to believe the Fed’s ~ 2.50% assumption for the neutral rate (which, one could argue, has anchored much of the curve). related reading: link.
4. Following from there, here’s one exceedingly simple way to frame things,. starting from the perspective that I have seen a Fed Funds rate north of 6% in my (Gen-X) career:
- headline CPI, May 2000 :: 3.2%
- target Fed Funds rate, May 2000 :: 6.5%
- headline CPI, Feb 2023 :: 6.4%
- target Fed Funds rate, Feb 2023 :: 4.5%
5. Now, are there 444,000 distinctions between the global economy of today versus back then? Yes. So, one should only go so far with these compare-and-contrasts. Nonetheless, from the cheap seats, it simply feels to me like parts of the market — and this Fed — are still too anchored to the post-GFC world. Perhaps that’s not surprising, given that anyone who lived through the aftermath of 2008 has the experience hardwired into their DNA, but my point is this: shouldn’t we be increasingly open-minded to the argument that the post-GFC years were more an exception than a lasting new normal?
6. In that spirit, again I find the Jason Furman content on Twitter to be, if nothing else, cause for contemplation: “the economy is very overheated … we have made little if any progress on inflation … there is little if any reason to expect a large slowdown going forward … a wide range of measures of ‘underlying’ inflation are telling the same story … supply chains unfreezing were supposed to bring down inflation, they didn’t … 6% inflation is much more likely than 2%.” I come out somewhere in-between his angle (link) our forecasts (link), with the ongoing intuition that inflation won’t magically disappear when the labor market is this tight. Related, I also admit that I’m surprised that breakevens took so long to get going again.
7. A few additional takes on things from an informal exchange I had with Dominic Wilson in GIR:
- i. I think Furman is overdoing it.
- ii. I think the big near-term risk here is if the Fed opens up 50s. If they don’t, I suspect markets can manage it. If they do, we aren’t priced for it. That’s overly reductive, but I think that’s the basic risk here.
- iii. Near-term volatility pricing in lots of places looks too low given the event risk. In under 3 weeks we get payrolls, US CPI, Powell, BOJ, ECB, Fed, BoE, China activity data and their Two Sessions policy meetings. That data set could set us on potentially very different paths, but vol overall isn’t particularly high given this event risk in many places (Chinese equities; EUR; major DM indices) and there are pockets of vol (Topix with an 11-handle) that are low even on a long history. Options look cheap.
8. A few additional takes on the week from an informal exchange I had with Mike Cahill in GIR:
- i. The market pricing of 31 bps for the March FOMC (that will settle at 25 or 50 bps) is not a stable equilibrium. Rather than quiet markets in a quiet week, it’s been jumpy markets clinging to every little piece of news (e.g. I haven’t seen Fed Funds respond to a durable goods report in a while).
- ii. The global coordination is a clear difference between now and most of 2022, when US exceptionalism ruled the day and Europe and China were mired down with wars of their own. That makes things a lot trickier in FX land, but it probably all pushes in the same direction for rates.
- iii. Markets spent February mostly reversing the trends and narratives in January, so we’re close to unchanged since mid-Dec / early-Jan on a number of major asset classes. But, one key thing hasn’t changed — as of now, the Fed is still locked into the 2-3 x 25 bps hikes pace that it established at the start of February. Maybe they will say that things are still broadly on track, but that deserves a mention if you’re making a list of things that haven’t yet corrected for January’s exuberance.
- iv. As it relates to point #3 up top on the neutral Fed Funds rate: so we’ve had (potentially) two distinct cycles: a too-low reading from 2012-2019 (the funds rate is low but the economy is weak — the neutral must be low) and a much higher reading now (we’ve hiked a lot but the economy hasn’t slowed — neutral must be high). Maybe the real answer though is that the economy, especially post-2008 housing crash, isn’t all that responsive to the funds rate.
9. I still believe this is our most important, if distinct house view: “there appears to be some confusion about the phrase ‘long and variable lags,’ which actually referred to the time until the peak impact on the level of GDP, not the peak impact on the growth rate of GDP. all prominent macroeconomic models that we are aware of agree with our FCI growth impulse model that the peak drag on GDP growth is frontloaded. these points explain why our estimate of the drag on GDP growth from the tightening in financial conditions last year peaked in 2022H2 and fades fairly quickly in 2023.” see exhibit 3, link.
10. Switching gears a bit: I’m normally of the view that geopolitics are exceptionally difficult variables to consistently trade, and after the initial shock and shakeout, markets usually surprise in their ability to find coping mechanisms and become inured to the nightly news. That said, it feels to me like geopolitical tension is rising significantly right now — with growing risk of miscalculation — to an extent that seems greater than what I encounter in client dialogue. I further admit I’m not totally sure what to do with this, particularly given my bias on interest rates, but it underscores Dominic’s take on the attractiveness of vol.
11. Perhaps relevant to that last point: Europe has been the fastest horse in the global equity race this year, and it really hasn’t been close. Alongside ongoing structural issues, the formal start of ECB QT and higher-than-expected inflation that’s lengthening the string of 50 bps rate hikes (we added another this week) I can easily see a scenario where a return of geopolitical worries knocks the momentum off course. so, even as someone who respects the local draw of cheap relative valuation and a cyclical-heavy index, count me as skeptical that SX5E can hold this pace for the rest of the year.
12. As noted previously, the month of January saw record hedge fund buying of Chinese equities (this via GS PB data, link). Price action since then — across the entire China complex, including credit and commodities — was disappointing (until this week’s PMI boom, anyway). Looking forward, the big flow-of-funds question is this: What will strategic real money do with the Chinese equity market? I’m inclined to believe they will be reticent to commit until the shareholder challenges of 2021 are long past us, which makes me worry about lasting and significant sponsorship (this may explain poor price action following decent earnings).
13. A non-sequitur: our industry devotes too much ink to the activity of the CTA community. While admitting that I’m guilty of referencing this crowd, remember this level set: CTAs comprise about 8% of total hedge fund assets … in S&P futures, about 6% of total open interest … and — at peak activity — around 4% of daily volume (thanks to Paul Leyzerovich for the data). I’m not saying that CTAs don’t matter — they do, and their footprint can be epically important at occasional market inflection points — I’m simply saying they get outsized attention relative to other market actors and fundamental forces.
14. In the context of higher interest rates, this note is a high quality check-down of some clear trends that are taking shape beneath the equity hood – for example, cyclical industrials and inflation winners/losers are doing what they should: link.
15. Finally, the annual Berkshire Hathaway letter is worth the quick read: link. I reckon there’s a bit of wisdom in here:
thus began our journey to 2023, a bumpy road involving a combination of continuous savings by our owners (that is, by their retaining earnings), the power of compounding, our avoidance of major mistakes and — most important of all — the American Tailwind … our satisfactory results have been the product of about a dozen truly good decisions — that would be about one every five years — and a sometimes-forgotten advantage that favors long-term investors.
More in the full note available to pro subs.
Tyler Durden
Sun, 03/05/2023 – 15:30 - Court Strikes Down Biden's 'Ghost Gun Rule'
Court Strikes Down Biden’s ‘Ghost Gun Rule’
Defense Distributed’s Case in US District Court, VanDerStrok v. Garland was just granted a preliminary injunction. The lawsuit is challenging the scope of ATF’s ability to change the definition of firearms.
According to court documents, ATF did not analyze their “Frame or Receiver Rule,” also known as Biden’s Ghost Gun Rule, under the Supreme Court’s NYSRPA v. Bruen decision.
For those unaware, the Bruen decision completely changed the legal landscape of firearms law in the US by requiring statutes regulating firearms to be rooted in the text, history, and tradition of the Second Amendment.
The Judge in the case concurred with the statement and granted Defense Distributed a preliminary injunction. The case now heads to the 5th Circuit, where ATF will have to defend its position.
The 5th Circuit has recently ruled against the ATF in similar cases, including Cargill v. Garland. In that case, a panel of judges decided that ATF did not have the power to determine bump stocks were in fact machine guns contrary to ATF’s 2019 Bump Stock rule. That rule effectively banned bump stock devices by classifying them as machine guns.
The decision in VanDerStok v. Garland could have major effects on the self-manufacturing of firearms and the ATF’s rulemaking and regulatory abilities as ATF has rewritten the federal statute to enforce their rulemaking. According to the court filings, the plaintiffs argue that only congress can rewrite federal statue to make law, not regulatory agencies like ATF.
Defense Distributed had this to say:
“This is not just a blow to ATF, who pushed a new definition of ‘firearm’ at their peril. It is also a defeat for Giffords, who were the agents of this illegal attempt to expand the Gun Control Act through the APA process. Their lobbying and regulatory laundry has now spectacularly backfired.”
Defense Distributed has a history of victory against the Federal Government. In 2018, they won their case Defense Distributed v. US Dept. of State, effectively creating the current legal landscape with 3D-printed firearms and their respective CAD files shared online.
Gun rights activists should watch this case as it goes through the courts.
Tyler Durden
Sun, 03/05/2023 – 15:00 - Doctors, Scientists Call On Mississippi Officials To Take COVID Vaccines Off The Market
Doctors, Scientists Call On Mississippi Officials To Take COVID Vaccines Off The Market
Authored by Matt McGregor via The Epoch Times (emphasis ours),
Dr. Peter McCullough (L) and Dr. John Witcher speak in the Mississippi state Capitol on COVID-19 vaccine adverse events in Jackson, Miss., on Feb. 27, 2023. (Courtesy of Charlotte Stringer Photography) JACKSON, Miss.—The group of physicians, vaccine-injured people, and whistleblowers speaking at the Mississippi Capitol building on Monday and Tuesday weren’t asking state officials to cease all COVID-19 vaccinations and to convene a grand jury to investigate its rollout in the state.
They were demanding it.
“Stop the shots” was the refrain of those who had treated COVID patients over the last three years and those injured by the vaccine.
On Monday and Tuesday, the medical freedom organization MS Against Mandates (MAM) held the Mississippi Medical Freedom Conference in Jackson, Mississippi, which included over a dozen physicians, several whistleblowers, six physician-confirmed vaccine-injured patients, and two parents whose sons died after receiving the vaccines.
Dr. John Witcher is the co-founder and former president of MAM. He stepped back from the leadership position to focus on his run for Mississippi governor in the 2023 gubernatorial election.
MAM orchestrated the event that gave a voice to many who are being silenced in media and the medical community, such as Dr. Peter McCullough, a practicing internist and cardiologist in Dallas who is also the national medical adviser for MAM.
McCullough told The Epoch Times that the purpose of the three-and-a-half-hour roundtable—chaired by Republican state Rep. Randy Boyd—was primarily to educate Mississippi officials about safety concerns regarding the vaccine.
“The state must pull these products off the market,” McCullough said. “There can be no more administration of the COVID-19 vaccines in the state of Mississippi.”
McCullough, author of “The Courage to Face COVID-19: Preventing Hospitalization and Death While Battling the Bio-Pharmaceutical Complex,” said the essential problem with the vaccines is the safety concern for the large number of people who have taken them without informed consent about adverse events.
“The CDC now says 92 percent of Americans have taken at least one shot and that 79 percent have taken two shots,” McCullough said. “If there are safety concerns, that’s a problem because the denominator is so big.”
Because of those large numbers, any rare side effect isn’t rare from a safety perspective and, as was heard in the testimonies, there are concerns that the state officials haven’t kept track of the full number of the injuries and has even undercounted them, McCullough said.
In Mississippi, which represents under 1 percent of the U.S. population, McCullough estimated that there are several hundred people who have been injured by the vaccines and that some have died from the vaccines.
“That’s several hundred too many, and it didn’t need to happen,” McCullough said. “None of this needed to happen.”
Community Standard of Care
Physicians like Witcher and others on the panel have reported that their state health officials have only recited federal talking points instead of allowing them to cultivate what McCullough called their own “community standard-of-care,” which McCullough said is intended to evolve over time.
“The community standard of care always comes from the doctors who are treating the patients,” McCullough said. “Under no circumstances does it come from federal or state agencies, pharmaceutical companies, or even from hospitals or hospital systems. It comes from the doctors in the field who are learning how to treat their patients based on the medical literature, clinical judgment, and the differences in the community.”
This is why McCullough said each state needs its own doctor-in-charge, like in Florida, where Surgeon General Joseph Ladapo has refuted federal guidelines handed down by the Centers for Disease Control and Prevention (CDC) and Dr. Anthony Fauci when he was director of the National Institute of Allergy and Infectious Diseases.
“We’re seeing how valuable it is for a state to have its own independent thinker who is not biased, influenced by the pharmaceutical industry, or influenced by any state or federal public health agency,” McCullough said.
A doctor-in-charge in Mississippi would have acted as the representative for state officials to hear the testimonies given in the state Capitol on Monday, McCullough said.
“The state of Mississippi needs an independent thinker who can attend medical panels like this, take them under consideration, and provide advising to the attorney general,” McCullough said. “In this case, it would be to get the vaccines off the market.”
If Witcher were to become governor, he said he would create a position for a state surgeon general, and McCullough said he would “entertain the appointment as a doctor and a public figure.”
Noticeably, the Capitol chamber where the roundtable convened was absent of lawmakers—aside from Boyd—which McCullough said wasn’t surprising, as he’s seen it “over and over again.”
“The fear among legislators on both the state and federal levels is extraordinary,” McCullough said. “This is the biggest thing that’s happened to our country over the last three years in modern history and you’d think they’d be interested to hear from doctors who traveled from far distances and who have vast experience in this. It’s not for my benefit. It’s for their benefit, and it’s extremely disappointing that they found something else that they thought was a higher priority.”
Read more here…
Tyler Durden
Sun, 03/05/2023 – 14:30 - Employers Frequently Overlook Resumes Which Include "They/Them" Pronouns
Employers Frequently Overlook Resumes Which Include “They/Them” Pronouns
One of the apocryphal conspiracy theories floated in recent years is that the establishment’s – and corporate America’s – fascination with pushing an LGBTQ agenda while minimizing (and in some cases openly ridiculing) traditional family-focused Judeo-Christian values, is that this is a core spoke of the World Economic Forum’s great reset. After all, what easier way to “depopulate” the world (as World Economic Forum participant Jane Goodall famously suggested in 2020 when she said “we can solve all the world’s problems if we reduce the world population to where it was 500 years ago”, at the 27 minute mark of the linked video) than to convince hundreds of millions to pair with a member of the same sex and thus avoid having children. One certainly wouldn’t need World War 3 or even a global viral pandemic to achieve a depopulation outcome if enough people are L, G, B, T, Q, “they/them” and so on (at last check, over 7% of the US population now identifies as LGBTQ). One just has to wait a generation.
There now appears to be another potential twist to this: it appears that workers who identify as the cool du jour pronoun pair of “they/them” are being systematically ignored by potential employers, and face far fewer job offers compared to their less pronoun-sensitive peers.
According to a new report from Business.com, a business resource platform, over 80% of nonbinary people believe that identifying as nonbinary would hurt their job search. Similarly, 51% believe their gender identity has affected their workplace experience “very or somewhat negatively.” Why? Well, for those confused, a quick reminder: the Biden admin’s “non-binary” hero is – or rather was – none other than Sam Britton, who worked as a nuclear engineer, or technically “deputy assistant secretary for spent fuel and waste disposition in the Office of Nuclear Energy”, at least until it was revealed that he is a pathological liar and kleptomaniac with a penchant for stealing other people’s suitcases (and then wearing stolen female clothing). Clearly a person with zero mental issues and pristine decision-making skills. In any case, Britton lost his job recently after his crimes were exposed, prompting a cascade a question about the mental stability of the “they/them” cohort.
Which is why even though Ryan McGonagill, director of industry research at Business.com and author of the report, said that the latest statistics show just how much “inclusive” work there is to do…
“We clearly have more work to do on several fronts. Over the past 10 years, DEIB efforts have been prioritized by many companies; however, the results of this study and past research show that teams in most industries aren’t proportionately representative of the U.S. population,” McGonagill tells CNBC Make It. “And worse, many people (like the nonbinary individuals we spoke with in our research) feel like they don’t belong.”
… perhaps employers have it right?
Rhetorical questions aside, CNBC notes that Business.com also went a step further by sending two identical phantom resumes to “180 unique job postings that were explicitly open to entry-level candidates” in an effort to test “whether or not the inclusion of gender-neutral pronouns impacts how employers perceive resumes.”
“Both featured a gender-ambiguous name, ‘Taylor Williams.’ The only difference between the test and control resumes was the presence of gender pronouns on the test version,” McGonagill said in the report. “The test resume included “they/them” pronouns under the name in the header.” She/her and he/him pronouns were not tested.
The phantom resume including pronouns received 8% less interest than the one without, and fewer interview and phone screening invitations.
According to the report, over 64% of the companies that received these resumes were Equal Opportunity Employers, something that made the results even more “worrisome.”
“The law makes it clear that you cannot base any employment decision (hiring, terminating, or otherwise) based on their gender identity,” McGonagill says. “It’s incredibly disappointing and unethical that many of the hiring managers in our study would disqualify a candidate for being authentic.”
What is probably funnier, although it wasn’t analyzed, is that most of those hiring managers who overlooked the “they/them” stack also happen to be the most vocal virtue-signaling supporters of LGBTQ rights…. just not when it comes to their own company. In other words, a classic case of employment NIMBY: please hire all these wonderful folks… just don’t make me hire them.
“It’s incredibly disappointing and unethical that many of the hiring managers in our study would disqualify a candidate for being authentic” said McGonagill. Oh, if only Ryan knew just how unethical some of the most vocal virtue-signalers are, he would be in a state of permanent shock. As for being “authentic”… well, there is this thing called Darwinian selection. If enough people realize that identifying as a “they/them” is not all that cool, perhaps we will finally have some return to normalcy after progressive identify politics have pushed society to the verge of collapse. Just like what better way to solve society’s overpopulation problem than by encouraging the young and easily impressionable to join the growing LGBTQ cohort and avoid having any children. End result: widespread depopulation, just next generation not this one.
Tyler Durden
Sun, 03/05/2023 – 14:25
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