Today’s News 7th May 2021

• Social Unrest Fears Mount As World Food Prices Soar In April
  Social Unrest Fears Mount As World Food Prices Soar In April

  Global inflation is headed into overdrive as the leading food price indicator that is the United Nations’ Food and Agriculture Organization’s food price index increased for an 11th consecutive month in April, hitting levels not seen since May 2014, with sugar prices leading the rise in the main index. 

  The Rome-based FAO released data Thursday showing the food price index, which measures monthly changes for a basket of cereals, oilseeds, dairy products, meat, and sugar, surged 2 points from 118.9 points in March to 120.9 in April. 

  

  That is a 30.7% YoY jump – the fastest rise since 2011…

  

  The April surge was primarily led by price increases of sugar, oils, meat, dairy, and cereals. 

  

  FAO’s cereal price index moved up 1.2% in April M/M and 26% Y/Y. Drought conditions in Argentina, Brazil, and the US increased corn prices by 5.7% last month, while wheat prices were flat. Global rice prices slipped last month. 

  

  FAO’s vegetable oil price index rose 1.8% last month because of increasing soy, rapeseed, and palm oil prices, which offset lower sunflower oil prices.

  Milk prices increased 1.2%, with surging demand from Asia, while the meat index rose 1.7%. FAO said there was “solid demand” for bovine and ovine meat in East Asia. 

  

  The idiots at the Marriner Eccles building seemingly have no interest in reading the extensive literature in connecting higher food prices to periods of social unrest.  Indeed, you’ll notice from the chart below that the last big surge from the middle of 2010 to early 2011 coincided with the start of the Arab Spring, for which food inflation is regarded as a contributing factor.

  

  While this is hardly new – we discussed it in “Why Albert Edwards Is Starting To Panic About Soaring Food Prices” and in “We Are Edging Closer To A Biblical Commodity Price Increase Scenario.”

  DB’s Jim Reid reminds us that emerging markets are more vulnerable to this trend since their consumers spend a far greater share of their income on food than those in the developed world.

  Inflation is always a monetary phenomenon, and this time is no different. Central bankers call transitory effects, but we beg to differ.  

   

  Tyler Durden
  Fri, 05/07/2021 – 02:45

• NATO's Southeastern Spearhead: Turkey's Military Aggression In Iraq, Syria, Yemen, & Caucasus Signals Proxy Conflict With Iran
  NATO’s Southeastern Spearhead: Turkey’s Military Aggression In Iraq, Syria, Yemen, & Caucasus Signals Proxy Conflict With Iran

  Authored by Rick Rozoff via Anti-Bellum,

  The past week has witnessed reports of increased Turkish military activity in Iraq and Syria as well as its intruding itself deeper into the war in Yemen. In all three cases Ankara has pitted itself against forces that are or can be seen to be pro-Iranian: Shiite parties in northern Iraq, the government of Syria and the Houthi-led government in Yemen.

  

  Direct tensions between Turkey and Iran have been increasing since last year over the above three nations as well as the Turkish-directed attack on Nagorno-Karabakh by Azerbaijan (Turkey and Azerbaijan identify themselves as “one nation, two states’) and its aftermath.

  Each time the North Atlantic Treaty Organization has rushed to Turkey’s defense over the past eighteen years – holding Article Four consultations four times (one time to “protect” it against Iraq, three times against Syria), maintaining three Patriot anti-ballistic missile batteries since 2013 – it has referred to the nation as NATO’s southeastern border. In addition to Turkey having the largest population and the largest military of any NATO member state except for the U.S., it is also the only member of the military bloc to border countries in the Middle East and the Caucasus: Iraq, Iran, Syria, Armenia, Azerbaijan and Georgia. Turkey has invaded the first and third and participated in a near-invasion against the fourth. (Last September a Turkish F-16 shot down an Armenian SU-25, killing its pilot.)

  The U.S. maintains B61 nuclear bombs in Turkey under a NATO nuclear sharing/burden sharing arrangement which mandates that the host country provide aircraft to deliver the bombs. NATO also has its Joint Command Southeast and Allied Air Component Command headquarters in Turkey. It moved its Allied Land Command to Turkey in 2012. In the same year it installed a Forward-Based X-Band Transportable anti-missile radar facility with a range of 2,900 miles. This year it handed over the command of its Very High Readiness Joint Task Force to Turkey.

  Nothing Turkey does in the Middle East, the Caucasus, North Africa and the Eastern Mediterranean can be seen aside from its status as a NATO member. Nothing it has done and is doing in those locations has ever been criticized by NATO.

  On April 23 Turkey’s military launched Operations Claw-Lightning and Claw-Thunderbolt in northern Iraq, claiming to have destroyed over 500 targets in attacks that included strikes from warplanes, drones and artillery and airdropping paratroopers and commandos from Chinook and Black Hawk helicopters.

  On May 1 Turkey’s Interior Minister Suleyman Soylu announced that Turkey will construct a military base in Iraq, ostensibly to combat the Kurdistan Workers’ Party (PKK), stating, “Just like we did in Syria, we will establish bases and control the area.”

  The leader of the al-Nahj al-Watani party in the Iraqi parliament, Ammar Ta’meh, denounced Turkey’s “expansionist plans,” stating they would further vitiate already strained relations between the two countries and “bring harm and loss to everyone.”

  In addition to the PKK, Turkish military forces in northern Iraq have increasingly come into conflict with pro-Iranian Shiite groups, leading to direct engagements as well as to worsening the antagonism between Ankara and Tehran.

  In February the Iranian Foreign Ministry summoned the Turkish ambassador to Iran, Derya Örs, to express grave concerns over the Turkish interior minister accusing Iran of harboring PKK fighters. Iran condemned the remark as being “unacceptable” and a violation of protocols befitting cooperation and good relations between nations.

  The Foreign Ministry also communicated objections to comments by Turkey’s ambassador to Iraq (see below), with the government news agency adding, “the territorial integrity and national sovereignty of countries were stressed as the fortifying base of international relations.”

  Later the same month Turkey summoned the Iranian ambassador to condemn remarks by Tehran’s ambassador to Iraq, Iraj Masjedi, accusing Turkey of violating Iraq’s sovereignty and territorial integrity – which is the simple truth – with ongoing cross-border military operations. His words were: “We reject military intervention in Iraq and Turkish forces should not pose a threat to violate Iraqi soil.”

  Turkey’s ambassador to Iraq, Fatih Yildiz, responded in a tweet with: “Ambassador of Iran would be the last person to lecture Turkey about respecting borders of Iraq.”

  The Turkish accusations against Iran center in part on claims that Iranian units of the Popular Mobilization Forces (PNF) were in some – truly convoluted – manner affiliated with PKK fighters in northern Iraq. And on the contention of Turkish Foreign Minister Soylu, as seen above, that Iran was harboring “525 terrorists.” He didn’t indicate how he had determined the exact figure.

  Almost two months before the current Turkish offensive in Iraq, Iraqi news reports stated that Popular Mobilization Forces militias were deploying three brigades in the Sinjar district of the Nineveh Governorate in northern Iraq to confront Turkish incursions. It was also reported that “the PMF has deployed 15,000 fighters and built new bases in Sinjar to counter any Turkish military threat.”

  Another proxy conflict between Turkey and Iran is in Yemen. Recently Abdul Wahab Al-Mahbashi, member of the Supreme Political Council in Yemen, the executive body of the Houthi-led government based in Sanaa, warned Turkey against further military involvement in his nation. He predicted that Turkey, like its new ally Saudi Arabia, would be defeated in any attempt to do so, stating, “If Turkish soldiers enter Yemen they will have a fate worse than that of the aggressors who preceded them.”

  Recent reports claim that Turkey has unloaded twenty armored vehicles and equipment at Somali ports to be shipped to the Yemeni port of Qena for Saudi-backed Islah militias.

  From the beginning of the horrific catastrophe inflicted on the Yemeni people by Saudi Arabia, the U.S. and their allies, the perception has existed that at root the crisis there was in part a Saudi-Iranian proxy war. Turkey has now entered that conflict on behalf of Saudi Arabia and against Iran.

  In a recent report by the Middle East Monitor based on regional press accounts it was suggested that Turkey will replicate in Yemen what has proven effective for it in Libya and Nagorno-Karabakh. A two-pronged strategy of drone warfare and importing Islamist mercenaries. The Shaam Times reported that 300 Syrian fighters have joined the ranks of the Islah militia in Marib, the last stronghold of Saudi-backed forces in the north of Yemen.

  Turkish drones were used extensively in Libya and against Nagorno-Karabakh and Armenia, and Turkey has now provided Bayraktar TB2 drones to Ukraine for the war in the Donbass. The Middle East Monitor feature indicates that Turkish drones have already been used in Yemen.

  Abdul Wahab Al-Mahbashi, the above-cited Yemeni official, warned that Turkey could deploy troops to his country, in which case “Invading Yemen will not have a happy ending for Erdogan himself as well as the country’s government and military,” or could repeat what it did in Libya and Nagorno-Karabakh by deploying mercenaries.

  During last year’s war by Azerbaijan and Turkey against Nagorno-Karabakh, Armenian, Syrian and Russian officials and other sources warned of Turkey deploying thousands of Syrian and other mercenaries, as many as 4,000, to Nagorno-Karabakh.

  Since the collapse of the Soviet Union and the emergence of Armenia as an independent nation in 1991, Iran has had no closer or more reliable ally in the world. The Azerbaijani-Turkish war against Nagorno-Karabakh and Armenia last year was then also a message to Iran. In two ways. First, its closest ally was attacked and humiliated. Second, a war to “liberate” ethnic Azeris was a warning to Iran itself, where as many as 18 million ethnic Azeris reside.

  Turkish President Recep Tayyip Erdoğan was the guest of honor at the postwar victory parade in the capital of Azerbaijan on December 10, where among other matters he praised Enver Pasha, one of the key architects of the Armenian genocide of the last century, and read a poem condemning the “division of Azerbaijani territory” between Iran and Russia in the 1800s.

  As a result of Erdoğan’s incitement in Baku, the Iranian Foreign Ministry summoned Turkey’s ambassador to Tehran. “The Turkish ambassador was informed that the era of territorial claims and expansionist empires is over,” Iran’s Foreign Ministry said on its website.

  “Iran does not allow anyone to meddle in its territorial integrity.”

  In addition to Turkey’s proxy wars with Iran in Iraq, Yemen and the Caucasus, there is also that in Syria. As the Turkish interior minister acknowledged above, Turkey has troops and bases in the north of the country. Its military incursions have displaced tens if not hundreds of thousands of Syrian civilians. In the past week Syrian news sources have reported that:

  The governor of Raqqa, Abdul Razzaq Khalifa, accused Turkey of reducing the water supply from the Euphrates River to Syria from 500 to 200 cubic meters per second, contrary to a 1987 agreement not to reduce the rate to under the first level, “which prevented the operation of the turbines from generating electricity produced in the Euphrates Dam, in addition to reducing irrigation and drinking water.”

  Syrian Arab News Agency places the event in the context of continued military attacks by Turkey and mercenaries under Turkish control.

  An explosive device was triggered in the city of Ras al-Ayn “where Turkish occupation forces and their terrorist mercenaries” operate.

  The Turkish military and its mercenary allies fired a barrage of rocket and artillery shells against several villages in the northern Aleppo countryside and near the Meng Military Airport.

  Two pro-Turkish fighters were killed in internecine fighting in the city of Jarablus.

  By expanding military attacks against Iran’s few allies in the world – in Iraq, in Yemen, in Armenia, in Syria – Turkey is spearheading the West’s campaign to isolate, contain and confront Iran.

  Tyler Durden
  Fri, 05/07/2021 – 02:00

• Are Americans Becoming Sovietized?
  Are Americans Becoming Sovietized?

  Authored by Victor Davis Hanson, op-ed via The Epoch Times,

  What ultimately ended the nihilist Soviet system?

  Was it not that Russians finally tired of the Kremlin’s lies and hypocrisies that permeated every facet of their falsified lives?

  

  Here are 10 symptoms of Sovietism.

  Ask yourself whether we are headed down this same road to perdition.

  1. There was no escape from ideological indoctrination—anywhere. A job in the bureaucracy or a military assignment hinged not so much on merit, expertise, or past achievement. What mattered was loud enthusiasm for the Soviet system.

  Wokeness is becoming our new Soviet-like state religion. Careerists assert that America was always and still is a systemically racist country, without ever producing proof or a sustained argument.

  2. The Soviets fused their press with the government. Pravda, or “Truth,” was the official megaphone of state-sanctioned lies. Journalists simply regurgitated the talking points of their Communist Party partners.

  In 2017, a Harvard study found that over 90 percent of the major TV news networks’ coverage of the Trump administration’s first 100 days was negative.

  3. The Soviet surveillance state enlisted apparatchiks and lackeys to ferret out ideological dissidents.

  Recently, we learned that the Department of Defense is reviewing its rosters to spot extremist sentiments. The U.S. Postal Service recently admitted it uses tracking programs to monitor the social media postings of Americans.

  CNN recently alleged that the Biden administration’s Department of Homeland Security is considering partnering with private surveillance firms to get around government prohibitions on scrutinizing Americans’ online activity.

  4. The Soviet educational system sought not to enlighten but to indoctrinate young minds in proper government-approved thought.

  Currently, cash-strapped universities nationwide are hiring thousands of diversity, equity, and inclusion staffers and administrators. Their chief task is to scan the admissions, hiring, curriculum, and administration at universities. Like good commissars, our diversity czars oversee compliance with the official narrative that a flawed America must confess, apologize for, and renounce its evil foundations.

  5. The Soviet Union was run by a pampered elite, exempt from the ramifications of their own radical ideologies.

  Now, woke Silicon Valley billionaires talk socialistically but live royally. Coke and Delta Airlines CEOs who hector Americans about their illiberality make millions of dollars a year.

  What unites current woke activists such as Oprah Winfrey, LeBron James, Mark Zuckerberg, and the Obamas are their huge estates and their multimillion-dollar wealth. Just as the select few of the old Soviet nomenklatura had their Black Sea dachas, America’s loudest top-down revolutionaries prefer living in Martha’s Vineyard, Beverly Hills, Montecito, and Malibu.

  6. The Soviets mastered Trotskyization, or the rewriting and airbrushing away of history to fabricate present reality.

  Are Americans any different when they indulge in a frenzy of name-changing, statue-toppling, monument-defacing, book-banning, and cancel-culturing?

  7. The Soviets created a climate of fear and rewarded stool pigeons for rooting out all potential enemies of the people.

  Since when did Americans encourage co-workers to turn in others for an ill-considered word in a private conversation? Why do thousands now scour the internet to find any past incorrect expression of a rival? Why are there now new thought criminals supposedly guilty of climate racism, immigration racism, or vaccination racism?

  8. Soviet prosecutors and courts were weaponized according to ideology.

  In America, where and for what reason you riot determines whether you face any legal consequences. Politically correct sanctuary cities defy the law with impunity. Jury members are terrified of being doxxed and hunted down for an incorrect verdict. The CIA and FBI are becoming as ideological as the old KGB.

  9. The Soviets doled out prizes on the basis of correct Soviet thought.

  In modern America, the Pulitzer Prizes and the Emmys, Grammys, Tonys, and Oscars don’t necessarily reflect the year’s best work, but often the most politically correct work from the most woke.

  10. The Soviets offered no apologies for extinguishing freedom. Instead, they boasted that they were advocates for equity, champions of the underclass, enemies of privilege—and therefore could terminate anyone or anything they pleased.

  Our wokists are similarly defending their thought-control efforts, forced re-education sessions, scripted confessionals, mandatory apologies, and cancel culture on the pretense that we need long-overdue “fundamental transformation.”

  So if they destroy people in the name of equity, their nihilism is justified.

  Tyler Durden
  Fri, 05/07/2021 – 00:10

• Super Rich Gobble Up "Trophy Trees" For Their Mansions 
  Super Rich Gobble Up “Trophy Trees” For Their Mansions 

  The “trophy wife” “trophy tree” has become a new status symbol for America’s super-rich during the virus pandemic, according to WSJ. In a culture where things are “on-demand,” the rich aren’t waiting around for seedlings to transform into large trees with lush canopies – they’re calling tree brokers to find the perfect tree. 

  Walter Acree, owner of landscaping business Green Integrity’s in South Florida, is part of a lucrative business: helping the super-rich find a trophy tree for their multi-million dollar estates. 

  “I’m kind of unique,” said Acree. “Not a lot of people do what I do.”

  Acree, 61, an exotic tree broker, hunts for the perfect trees for residential and commercial clients. A client of his recently was quoted at $250,000 to purchase a tree from a private owner and move it to a new site. 

  Trees On The Move

  

  Acree’s business has been steadily growing over the last five years, but with everyone fleeing Northeast cities for warm South Florida markets. He said his business had been absolutely on fire since the pandemic. 

  

  “It’s the busiest the business has ever been, and we’re doing things at a scale that is just remarkable,” Tim Johnson, a partner at Fernando Wong Outdoor Living Design in Miami. He said the wealthy are demanding nondisclosure agreements to keep their horticultural endeavors super secret. 

  

  Johnson said several wealthy clients bought properties next store to demolish the home and extend their gardens.  

  A few years back, he said one of his clients was in a bidding war with basketball star Michael Jordan over a 45-foot canopied oak tree. 

  Cash-strapped elites don’t want to wait two decades to see a tree grow, and this is primarily why many of them are purchasing trees with a price range of thousands to hundreds of thousands of dollars, depending on the species of the tree and, of course, appearance. 

  Michael Chen, a Los Angeles real estate developer, told WSJ he spent 18 months searching for the perfect tree to install in the middle of his $65 million Beverly Hills mansion. The 150-year-old, 15-foot olive tree that was imported from Tuscany, which he calls the “tree of life.” 

  

  For the super-rich, it’s not just about the trophy wife and owning a 1960s Ferrari – but also owning a piece of nature as they push their horticultural ambitions towards trophy trees. At least these virtue-signaling elites can point to their tree and the good things they’re doing in life to solve climate change right as they step into their private jet.  

  Tyler Durden
  Thu, 05/06/2021 – 23:50

• Space Force Chief Scientist Says Developing Augmented 'Super Soldiers' Is "Imperative" 
  Space Force Chief Scientist Says Developing Augmented ‘Super Soldiers’ Is “Imperative” 

  Authored by Dave DeCamp via AntiWar.com,

  The top scientist in the US Space Force said last week that human augmentation should be embraced and that it is “imperative” for the US military to start working on such technology that could create a type of super-soldier.

  “In our business of national defense, it’s imperative that we embrace this new age, lest we fall behind our strategic competitors,” Dr. Joel Mozer said at an event at the Air Force Research Laboratory. Mozer said augmentation technology could produce a “superhuman workforce” that uses technologies like “augmented reality, virtual reality, and nerve stimulation.”

  

  “You could put [an] individual into a state of flow, where learning is optimized, and retention is maximized,” he said. “This individual could be shaped into somebody with very high-performing potential.”

  Mozer said that there will be “unimaginable” advances in this type of technology, as well as artificial intelligence (AI). He said AI could create “autonomous” programs that commanders can use to devise military strategies that “no human could.”

  “This will extend to the battlefield, where commanders and decision-makers will have at their disposal multiple autonomous agents, each able to control the execution of things like reconnaissance, or fire control, or attack,” he said.

  US military leaders have called for increased investments in hi-tech weapons to compete with countries like Russia and China. While there’s no evidence Russia or China are working on super-soldiers, a baseless claim about China and such technology was made last December by former Director of National intelligence John Ratcliffe.

  CAPTAIN CHINA: Regime doing human testing to create ‘super soldiers’: US official — via @inkonthepad & @nypost https://t.co/Dseecnk2de

  — Tom Durante (@TomDurante) December 4, 2020

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

  In an op-ed for The Wall Street Journal, Ratcliffe said, “US intelligence shows that China has even conducted human testing on members of the People’s Liberation Army in hope of developing soldiers with biologically enhanced capabilities.”

  That one sentence from Ratcliffe spread like wildfire through Western media. Even though Ratcliffe never provided evidence for the claim, it was repeated as fact by many outlets. A few days after Ratcliffe’s op-ed was published, the French military was given the green light to begin research on “enhanced soldiers,” which was met with much less fanfare.

  Tyler Durden
  Thu, 05/06/2021 – 23:30

• April Payrolls Preview: It Will Be A Blowout Number But Will It Be "Too Blowout"
  April Payrolls Preview: It Will Be A Blowout Number But Will It Be “Too Blowout”

  What follows is our traditional payrolls preview post which looks at how Wall Street has established its latest consensus for the April print, but ahead of tomorrow’s jobs report – which could indeed be rather consequential if it is a significant outlier – the only question is what number would scare investors, one which we answered yesterday when we quoted Std Chartered’s Steven Englander who said that 2 million+ April job additions are needed for investors to see risk that the Fed changes its stance; Meanwhile, the widely expected whisper range of 1.0-1.5 million jobs “may not be enough for the Fed to shift, even if jobs exceed the 1mn consensus.”

  Of course there is also the risk of a downside surprise: only 2 of 79 forecasts are below 800,000, so the consensus of 1 million could generate a modest bond rally and 650,000 or lower, quite a move down. Given the volatility of labor-market data, such a print might not extinguish optimism, but it would raise the possibility that the market is wrong in its hawkishness and the Fed is right in its dovish stance.

  With that in mind, here is what Wall Street expects tomorrow, courtesy of Newsquawk:

  Summary: Fed officials want to see a “string” of strong jobs reports before they begin the conversation on when to taper asset purchases. While the exact meaning of “string” is yet to be explicitly defined, one would assume that this entails a consecutive run of quite a few solid jobs reports since there are, after all, almost 8.5 mln Americans that remain out of work compared to the pre-pandemic period, as officials remind us frequently. Accordingly, analysts say that in the months ahead, insight on how the economy is eroding slack may be better evidenced in the participation rate, employment/population ratio, and underemployment rate metrics, rather than the headline unemployment rate. On price pressures, the Fed has warned us that inflation is expected to run above target in the near-term, due to pandemic base effects, crude prices, and some pent-up demand; however, this is not expected to be seen in the average hourly earnings metrics in April, which may in fact tilt negative; recall, this time last year, the wages measures actually rose as lower-paid employees fell out of the survey sample – this dynamic is expected to reverse as lower-paid Americans return. Labor market proxies have generally had a constructive tilt: initial jobless claims and continuing claims data fell in the survey window; business surveys were mixed, but noted tightening labor market conditions and challenges in attracting staff; ADP payrolls fell short of expectations, but still showed healthy gains, and has tended to underreport the NFP data in recent months; announced job cuts have declined significantly.

  Consensus Expectations:

  • Non-farm Payrolls (exp. 998k, prev. 916k);
  • Private Payrolls (exp. 925k, prev. 780k);
  • Manufacturing Payrolls (prev. 55k, prev. 53k);
  • Government Payrolls (prev. 136k);
  • Unemployment Rate (exp. 5.8%, prev. 6.0%);
  • Participation Rate (prev. 61.5%);
  • U6 Underemployment (prev. 10.7%);
  • EPOP (prev. 57.8%);
  • Average Earnings M /M (exp. 0.0%, prev. -0.1%);
  • Average Earnings Y/Y (exp. -0.4%, prev. 4.2%);
  • Average Workweek Hours (exp. 34.9 hrs, prev. 34.9hrs).

  Payrolls: While consensus expects a 1 million print (with a handful of forecasts as high as 2 million or just above), Goldman believes that tomorrow’s number will be 1.3 million as mass vaccinations and the easing of business restrictions supported rapid job growth in virus-sensitive industries, including leisure and hospitality, retail, and education (public and private). Additionally, Big Data signals generally indicate job gains of 1mn or more in the month.

  Unemployment Rate: The Fed has signaled that it will continue purchases of Treasuries and mortgage bonds at a rate of $120bln/month until “substantial further progress” has been made toward its maximum-employment and price stability goals. Officials have also been cautious in using the unemployment rate as a proxy for the level of slack in the economy, with many suggesting that the ‘real’ rate of joblessness is closer to the 10.0% mark, rather than the 6.0% headline unemployment rate. Accordingly, the focus will likely be on the U6 measure of “underemployment” (which stood at 10.7% in March), and the participation metrics; the latter is becoming increasingly important to judge the progress of slack erosion, and may offer better insight than the headline unemployment rate. In the March report, participation rose by one-tenth of a percent point to 61.5%, still off the 63.2% pre-pandemic level seen in February 2020. It is also worth paying attention to the little-reported Employment/Population ratio, which some Fed officials have recently referenced; that ratio stood at 57.8% in March, still 3.3ppts beneath the pre-pandemic level of 61.1%.

  Average Hourly Earnings: Some warn that the Y/Y metrics may be dragged into negative territory in April. Recall, a year ago, as the pandemic began to bite and economies were shuttered, lower-wage workers were the first to be benched, and fell out of the data sample; this artificially buoyed the earnings metrics (pushing them higher), and the unwinding of this effect is expected to exert influence this month. The consensus therefore expects the Y/Y average hourly earnings measure to be negative for the first time on record. However, some desks are hopeful that not only will this return to positive territory quickly, but also that wages could begin rising as many surveys have alluded to: the Fed’s April Beige book noted that wages increased further over the reporting period, with employers in sectors that reported difficulties in attracting and retaining workers also highlighting tight wage competition, especially for hourly workers; the report also cited some employers lifting salaries in order to attract more workers (it points out that the ability to attract and hire employees varied considerably among contacts, depending on the industry).

  ADP Payrolls: ADP payrolls disappointed expectations, printing 742k against an expected 800k; some made the point that this was better than was implied by the Homebase employment data, which tends to focus on smaller businesses, and suggests that big companies have been proactive in reopening e-forts. As always, caveat that ADP’s data has understated that of the official BLS numbers in recent months, so desks were not revising down their NFP forecasts in wake of the release.

  Initial Jobless Claims: In the BLS survey period that coincides with the weekly unemployment claims data, initial jobless claims fell from 678.75k to 655.75k, while continuing claims declined from 3.71mln to 3.68mln, boding well for the April BLS data.

  Business Surveys: The ISM surveys gave a mixed assessment of the labor market, with the Employment subindex falling 4.5 points in the manufacturing report, to 55.1, remaining in expansion for the fifth consecutive month; however, panelists continued to note significant difficulties in attracting and retaining labor at their companies’ and suppliers’ facilities. The employment sub-index in the services report saw a rise of 1.6 points to 58.8, the fourth straight month in expansion, and the highest level since September 2018. The services report also noted the competition for labor as more restaurants began easing restrictions and returning to normal levels of activity, and all levels of the business were increasing personnel.

  Challenger Job Cuts: Challenger reported that job cut announcements fell from 30,603 in March to 22,913 in April, the lowest monthly figure since June 2000, and -96.6% Y/Y. Challenger said that, so far this year, employers have announced plans to cut 167,599 jobs from their payrolls, down 84% from the 1,017,812 jobs eliminated through the same period last year. The report said that employers were no longer undergoing massive cuts, and consumers were beginning to feel safe traveling and spending, and the number of job openings is edging higher. However, the report also noted a labor shortage despite the millions of Americans remaining out of work. Challenger added that the ongoing impact of increased vaccinations and the American Rescue Plan will be reflected in the April job numbers, with a likely decline in both the unemployment rate and weekly initial jobless claims and an increase in job openings.

  Arguing for a better-than-expected report:

  • Reopening. Despite flattish case counts, US fatalities continued to trend down in the spring. And more importantly from the perspective of tomorrow’s report, the severity of business restrictions eased further between the March and April survey period. Reflecting this, restaurant seatings on OpenTable rebounded to -24% in April from -32% in March, albeit with a lull in the week following the payroll survey period.

  

  • Big Data. High-frequency data on the labor market generally indicate accelerating employment in April, with four of the six measures Goldman tracks indicating job gains of 1 mn or higher, and generally stronger gains among the more reliable datasets.

  

  • Employer surveys. The employment components of both our services (+3.8pt to 55.9) and manufacturing (+1.7pt to 59.9) survey trackers increased to the highest level since 2018.
  • Job availability. The Conference Board labor differential—the difference between nthe percent of respondents saying jobs are plentiful and those saying jobs are hard to get — surged to +24.7 in April (from +8.0 in March) and is now at 2018 levels.
  • Job cuts. Announced layoffs reported by Challenger, Gray & Christmas fell by 22% in April after declining by 25% in March (mom, SA by GS). Layoffs were at the lowest level since 2000.
  • Jobless claims. Initial jobless claims declined during the April payroll month, averaging 656k per week vs. 752k in March. Across all employee programs including emergency benefits, continuing claims fell by 1.3mn between the payroll survey weeks.

  Neutral/mixed factors:

  • ADP. Private sector employment in the ADP report increased by 742k in April, below consensus expectations but above the pace in March. As usual, the ADP panel methodology likely undercounted workers returning to their previous employers, and this would argue for a larger gain in tomorrow’s report.

  Market Reaction: Observing the handful of data releases seen in the month of May, Rabobank’s analysts note that yields rose in wake of a weak ADP report, which might indicate a shift in the market reaction function that we have been accustomed to in recent months; now, weak data is providing a negative impulse for bonds, which Rabo says is a function of the market interpreting that the bad data implies centrist Democrat lawmakers would be less likely to try and water down President Biden’s stimulus plans (while resistance is more likely to rise if the data tone improves, which would reduce the need for any bumper fiscal spending). Rabo also notes that Eurodollar futures’ reaction supported the ‘bad news is bad news’ playbook, with the rationale being that, as the market assigns a greater probability to fiscal stimulus, it must therefore give a greater chance that the Fed will scale back its support too.

  Tyler Durden
  Thu, 05/06/2021 – 23:10

• Chinese Flights Through Taiwan's Air Defense Zone Have Doubled
  Chinese Flights Through Taiwan’s Air Defense Zone Have Doubled

  Authored by Dave DeCamp via AntiWar.com,

  According to numbers released by Taiwan’s Ministry of National Defense, Chinese military flights through Taiwan’s air defense identification zone (ADIZ) doubled in April compared to the previous two months, which coincides with increased US military activity in the region.

  While there is much hype surrounding these flights, the ADIZ is not Taiwanese air space, and the Chinese planes usually pass through the southwest corner of the ADIZ, far from the island of Taiwan. An ADIZ is an airspace where a country requires foreign aircraft to identify themselves. The ADIZ concept is not covered under any international treaties and has no international regulations.

  

  The US created the first ADIZs in the 1950s and established Taiwan’s ADIZ, as well as ones for Japan, South Korea, and the Philippines. Taiwan now claims an ADIZ that covers parts of mainland China, although the Defense Ministry does not publicize flights from China’s People’s Liberation Army on the Chinese sign of the median line, which separates the Taiwan Strait. China created an ADIZ in 2013 over the East China Sea, which the US has challenged with B-52 bombers.

  Taiwan’s Defense Ministry said there were 117 incidents of Chinese warplanes flying through Taiwan’s ADIZ in April, which more than doubled the totals from February and March. The previous high was in January, which saw 81 ADIZ sorties, which fell to 40 in February and 54 in March.

  Because the Chinese planes almost always fly through the southwest of the ADIZ, it’s likely they are going to or returning from drills in the South China Sea, where the US has significantly stepped its military presence in recent years. President Biden has stepped up provocations in the region even more. China said that since Biden came into office, operations had increased by more than 20 percent for US warships and 40 percent for military aircraft in waters claimed by Beijing.

  

  The US is also boosting diplomatic ties with Taiwan as part of its strategy to counter China. In April, the Biden administration announced a new policy to “encourage” contacts between US and Taiwanese officials.

  Last Friday, the top US and Taiwanese diplomats in France held a public lunch meeting, drawing sharp condemnation from Beijing.

  Tyler Durden
  Thu, 05/06/2021 – 22:50

• Iran Releases Video Threatening Strike On Israel's Dimona Nuclear Reactor
  Iran Releases Video Threatening Strike On Israel’s Dimona Nuclear Reactor

  Iranian state media has again put out a hugely provocative clip depicting an imagined attack on its foreign enemies, which is clearly intended as a threat and “warning”. On Wednesday we detailed that just days earlier a propaganda video set to Iranian patriotic music featured Iran’s military launching a missile on Washington D.C., which resulted in an imagined direct hit on the Capitol Building. The clip briefly showed shocking footage of the Capitol bursting into flames as the lyrics praised the “avengers” who will “liberate Jerusalem” and defeat the Islamic Republic’s enemies.

  And now on Thursday state-controlled Islamic Republic of Iran Broadcasting (or IRIB) has issued another similar video, this time depicting an aerial missile strike on Dimona nuclear reactor in southern Israel.

  New video from #Iran‘s IRIB threatening a strike on #Dimona nuclear reactor in #Israel ahead of #QudsDay. pic.twitter.com/QBooLSQwgx

  — Jason Brodsky (@JasonMBrodsky) May 6, 2021

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

  The brief clip simulates the vantage point of a fighter jet or a drone hovering over what clearly appears to be the large Dimona facility, after which a missile is fired down upon it, but then the footage cuts to an hour glass, suggesting time is “running out” for Israel. 

  Interestingly, just weeks ago on April 22 (in the overnight hours) what was widely described as an “errant” Syrian missile (as Damascus defenses had been responding to an Israeli raid) had fallen close to the Dimona nuclear reactor facility. 

  “A Syrian missile exploded in southern Israel on Thursday, the Israeli military said, in an incident that triggered warning sirens near the secretive Dimona nuclear reactor and an Israeli strike in Syria,” Reuters had reported at the time. 

  The Shimon Peres Negev Nuclear Research Center, commonly referred to as the Dimona complex:

  

  The whole incident had been somewhat mysterious, given the length the missile traveled to within the general vicinity of one of Israel’s most secure and sensitive sites, leaving many to speculate that the “errant” surface missile fired from Syria was actually an intentional “message” to the Israelis. 

  Below is the IRGC propaganda clip which had been released this past weekend…

  In Broadcast Leading to Khamenei’s Speech, Iran TV Airs Nationalist Song Depicting Capitol Hill Being Destroyed by a Missile #Iran #JCPOA pic.twitter.com/1Z9onUPMPM

  — MEMRI (@MEMRIReports) May 5, 2021

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

  Perhaps seizing on this capability of Iran or its regional allies to potentially hit an Israeli nuclear rector, which would cause untold severe damage to the whole surrounding area in southern Israel, Tehran appears to be putting Israel “on notice” over the latest string of Israeli covert sabotage incidents, most notably the April 11 Natanz attack which damaged Iranian centrifuges. 

  This latest clip was issued on the occasion of Quds Day, which is an Iranian Islamic holiday that specifically commemorates the expected “liberation of Jerusalem” and which falls every year on the last Friday of Ramadan.

  Tyler Durden
  Thu, 05/06/2021 – 22:30

• Slap On The Wrist: Honeywell Fined For Sharing F-35, Other Secrets To China
  Slap On The Wrist: Honeywell Fined For Sharing F-35, Other Secrets To China

  Via South Front,

  On May 5th, the US State Department announced that it had reached a $13 million settlement with defense contractor Honeywell.

  

  The settlement is over allegations it exported technical drawings of parts for the F-35 fighters and other weapons platforms to China, Taiwan, Canada and Ireland, according to the Bureau of Political-Military Affairs’ charging document.

  “Honeywell voluntarily disclosed to the Department the alleged violations that are resolved under this settlement.  Honeywell also acknowledged the serious nature of the alleged violations, cooperated with the Department’s review, and instituted a number of compliance program improvements during the course of the Department’s review.  For these reasons, the Department has determined that it is not appropriate to administratively debar Honeywell at this time.”

  The State Department alleged some of the transmissions harmed national security, which Honeywell acknowledges with the caveat that the technology involved “is commercially available throughout the world. No detailed manufacturing or engineering expertise was shared.”

  Overall, the materials pertained to the F-35 Joint Strike Fighter, the B-1B Lancer long-range strategic bomber, the F-22 fighter, the C-130 transport aircraft, the A-7H Corsair aircraft, the A-10 Warthog aircraft, the Apache Longbow helicopter, the M1A1 Abrams tank, the tactical Tomahawk missile; the F/A-18 Hornet fighter, and the F135, F414, T55 and CTS800 turboshaft engines.

  Honeywell would only pay its fine, essentially, and keep working for the US government, because it voluntarily admitted to violating national security.

  Between 2011 and 2015, Honeywell allegedly used a file-sharing platform to inappropriately transmit engineering prints showing layouts, dimensions and geometries for manufacturing castings and finished parts for multiple aircraft, military electronics and gas turbine engines. Its first disclosure of violations to the government came in 2015.

  “The U.S. Government reviewed copies of the 71 drawings and determined that exports to and retransfers in the PRC [People’s Republic of China] of drawings for certain parts and components for the engine platforms for the F-35 Joint Strike Fighter, B-1B Lancer Long-Range Strategic Bomber, and the F-22 Fighter Aircraft harmed U.S. national security,” the charging document read.

  In a statement, Honeywell said it has since taken steps to ensure there are no repeat incidents.

  “Under an agreement reached with the State Department to resolve these issues, Honeywell will pay a fine, engage an external compliance officer to oversee the Consent Agreement for a minimum of 18 months, and will conduct an external audit of our compliance program,” Honeywell’s statement on the matter reads in part.

  “Since Honeywell voluntarily self-reported these disclosures, we have taken several actions to ensure there are no repeat incidents. These actions included enhancing export security, investing in additional compliance personnel, and increasing compliance training.”

  Interesting enough, the US was concerned that the F-35 flying disaster’s secrets would be shared through Turkey’s purchase of an S-400 missile defense system.

  Turns out, a US corporation simply sold the secrets to China and others, simply for profit.

  But it is all well, since it apologized after the fact, reinforcing the notion that it is much simpler to ask for forgiveness than it is to ask for permission.

  Tyler Durden
  Thu, 05/06/2021 – 22:10

• South Carolina Follows Montana In Ending All Supplemental Unemployment Benefit Programs
  South Carolina Follows Montana In Ending All Supplemental Unemployment Benefit Programs

  It appears we were overly cynical when we said just an hour ago that we won’t be holding our breath to find out if any other state will join Montana in ending many unemployment benefits in response to the unprecedented worker shortage.

  Just moments after we published that post, perhaps emboldened by the daring example set by his republicans peers in Montana, South Carolina Governor Henry McMaster today became the second state to end the people’s addition to government handouts, and directed the S.C. Department of Employment and Workforce to terminate South Carolina’s participation in all federal, pandemic-related unemployment benefit programs, effective June 30, 2021.

  Governor McMaster directed the agency to take the action in a letter to DEW Executive Director Dan Ellzey.

  “South Carolina’s businesses have borne the brunt of the financial impact of the COVID-19 pandemic. Those businesses that have survived – both large and small, and including those in the hospitality, tourism, manufacturing, and healthcare sectors – now face an unprecedented labor shortage,” governor McMaster wrote.

  “This labor shortage is being created in large part by the supplemental unemployment payments that the federal government provides claimants on top of their state unemployment benefits. In many instances, these payments are greater than the worker’s previous pay checks. What was intended to be a short-term financial assistance for the vulnerable and displaced during the height of the pandemic has turned into a dangerous federal entitlement, incentivizing and paying workers to stay at home rather than encouraging them to return to the workplace.”

  In a memo to Governor McMaster, Executive Director Ellzey outlined existing federal unemployment programs and what will change when the governor’s directive goes into effect on June 30.

  Those programs include the following:

  • Pandemic Unemployment Assistance (PUA)
  • Pandemic Emergency Unemployment Compensation (PEUC)
  • Federal Pandemic Unemployment Compensation (EPUC)
  • Mixed Earners Unemployment Compensation (MEUC)
  • Emergency Unemployment Relief for Governmental Entities and Nonprofit Organizations
  • Temporary Federal Funding of the First Week of Compensable Regular Unemployment for States with No Waiting Week

  In conclusion, McMaster says that following termination of participation in these federal programs, DEW shall return to normal operation of the State’s unemployment insurance program, including enforcing the requirement that claimants demonstrate active efforts to seek employment in order to remain eligible for benefits.

  In response, Dan Ellzey wrote that “at the current time, there are 81,684 open positions in the state of South Carolina. The hotel and food service industries have employee shortages that threaten their sustainability. However, no area of the economy has been spared from the pain of a labor shortage.”

  The Director of the S.C. Department of Employment and Workforce Director continued: “While the federal funds supported our unemployed workers during the peak of COVID-19, we fully agree that reemployment is the best recovery plan for South Carolinians and the economic health of the state. Last week’s initial claims numbers were the lowest since the pandemic began, and employers around the state are eager to hire and anxious to get South Carolina back to business.”

  With 2 states down and 48 to go, or 49 – we are not sure if Washington D.C. is now officially part of the USSA – one can only hope that more states will follow in this example, although as with all things, we expect that the final breakdown will be by party lines with people in red states working and while people in blue state are paid to smoke pot and do nothing.

  McMaster’s full note below (pdf link):

  Tyler Durden
  Thu, 05/06/2021 – 21:50

• CNN Host Says People Who Don't Take The Vaccine Should Be Socially Ostracized By Friends & Family
  CNN Host Says People Who Don’t Take The Vaccine Should Be Socially Ostracized By Friends & Family

  Authored by Paul Joseph Watson via Summit News,

  CNN’s Michael Smerconish says that people who don’t take the vaccine should be socially ostracized and shunned by their friends and family.

  

  During a segment on his show, Smerconish discussed a suggestion made by prosecutor Michael Stern in a USA Today opinion piece about vaccination uptake.

  “We’ve gotta shun folks, we’ve gotta shun people into getting vaccinated,” said Smerconish, agreeing that businesses should make getting the vaccine mandatory as a condition of employment.

  However, he also asserted that family members and friends should socially ostracize those who choose not to take the vaccine.

  CNN’s ⁦@smerconish⁩ says it’s time for people to “shun” friends and family who aren’t vaxxed pic.twitter.com/OfzuDhTbTq

  — Jack Posobiec (@JackPosobiec) May 5, 2021

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

  Continuing to quote Stern’s article, Smerconish stated, “People should require friends to be vaccinated to attend the barbeques and birthday parties they host – friends don’t let friends spread COVID.”

  Smerconish then proudly revealed the results of a poll on his website which found that 73% of respondents thought it was “time to shun.”

  “Doesn’t @Smerconish realise we absolutely want to be shunned by people like him and his viewers,” remarked Raheem Kassam.

  “That’s literally the dream.”

  “This isn’t going to end well,” commented Donald Trump Jr.

  Smerconish and his ilk are not encouraging others to shun “anti-vaxxers” because they care that much about incentivizing more people to take the vaccine (take up rates are already very high), they’re shaming them so as to legitimize the brutal discrimination that will be metered out later on down the line to those who don’t take it.

  Meanwhile, the ‘sane’ people who insist everyone must take the vaccine are walking around behaving like this…

  History will look back in awe. pic.twitter.com/jxx02xqe4l

  — Paul Joseph Watson (@PrisonPlanet) May 5, 2021

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

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  Tyler Durden
  Thu, 05/06/2021 – 21:30

• Air Force Aborts ICBM Test Flight Just Before Launch For Unknown Reasons
  Air Force Aborts ICBM Test Flight Just Before Launch For Unknown Reasons

  On Wednesday the US Air Force was moments away from a planned test of an unarmed nuclear Minuteman III intercontinental ballistic missile but aborted prior to launch, according to an official statement. 

  It was supposed to happen in the early morning hours at Vandenberg Air Force Base in California, but “experienced a ground abort prior to launch,” the Air Force Global Strike Command said. No further explanation was given as to why the test launch was shut down, other than the service indicating that the “cause of the ground abort is currently under investigation.”

  

  The news release did however note that ballistic missiles are only launched when “all safety parameters with the test range and missile are met,” according to the news release. The launch is expected to be rescheduled pending the results of the investigation. 

  As a report in The Hill highlights, a debate is currently raging on Capitol Hill and in the halls of the Pentagon over the near-future viability of the program. “The failed test comes as lawmakers debate whether to proceed with the program to replace the aging Minuteman III missiles or try to extend the life of the missiles,” The Hill writes.

  Currently some 400 three-state Minuteman III missiles form the critical land-based ‘last defense’ element in the US nuclear triad, and were first deployed in 1970 with an initial expected 10-year service life. But after undergoing multiple life extensions the Air Force has long argued for their complete replacement, but this would come at a hefty $1.2 trillion or more price tag.

  

  US Strategic Command chief Adm. Charles Richard, who oversees America’s nuclear arsenal, has been pushing for the Ground-based Strategic Deterrent (GBSD) program to immediately replace the ageing systems.

  “We simply cannot continue to indefinitely life-extend Cold War leftover systems,” Richard told Congress last month. “I do not see an operational reason to even attempt to do that.”

  Tyler Durden
  Thu, 05/06/2021 – 21:10

• Atlas Is Shrugging: Forget 'The Great Reset', Here Comes 'The Great Reject'
  Atlas Is Shrugging: Forget ‘The Great Reset’, Here Comes ‘The Great Reject’

  Authored by Mark Jeftovic via BombThrower.com,

  The Jackpot Chronicles Scenario #4: Atlas Shrugged

  

  Never mind The Great Reset. Here comes The Great Reject.

  It occurred to me that I never did finish the final instalment of last summer’s Jackpot Chronicles, wherein I posited four possible post-Covid scenarios.

  For a quick refresher, The Jackpot is concept I cribbed from William Gibson. It’s a term he uses across a few of his near-future cyberpunk novels that describes a series of rolling global catastrophes that set in sometime around 2016 (his stories span multiverses, and timelines, but the common theme is that somewhere around 2016, some kind of irrevocable glitch in the matrix occurred that put a permanent end to normalcy as it has been understood up until that point).

  If there was a Jackpot, whatever it was, it could arguably have happened at many points throughout the 20th century, or if we wanted to confine our speculation to the 21st century then, 9/11 or the GFC would do. Everything after that being symptomatic as opposed to causal.

  And then… 2020 and COVID hit. That’s when the fabric of time cleaves us into the before times and The Jackpot.

  

  The other post-pandemic scenarios from the rest of my Jackpot series were:

  1. Force Majeure: The wheels come off completely and the system comes unglued. Mad Max.

  2. Tin Foil Hat: It really is one Big Conspiracy and we’re into a New World Order.

  3. The Great Bifurcation: The middle class gets wiped out and we get a two-tier society

  I had thought the fourth scenario would be the one themed Deglobalization, and to a certain extent it still is. In the original outline I described that Deglobalization:

  “Is where multi-national corporations, so shaken from this Near Death Experience, realizing their error of betting the farm on just-in-time supply chains, labour cost arbitrage and having zero buffers, begin pulling manufacturing back home.

  The smart ones start building cushions and shock absorbers into their business logic, and they begin to eschew leverage after being on the wrong side of a series of cascading liquidity implosions. In other words, businesses begin to transition themselves into what I called “Transition Companies” as posited in the inaugural posting for [this blog]”.

  I also went on to say that I considered this one most desirable yet least likely. My view on this scenario has changed somewhat, and I also think that the staggering government ineptitude and duplicity at all levels in all jurisdictions (with few notable exceptions) has made our regeared “4th scenario” more likely given that it’s in progress. Mass demonstrations, mass exoduses, crypto-currencies are symptoms of a Great Reject, or as I’ve renamed this scenario “Atlas Shrugged“.

  The TL,DR of the novel, Atlas Shrugged is that once the institutional sclerosis of the ruling class was understood to be both incorrigible and irreversible, the only other option was a global opt-out. There was no Great Reset in Atlas Shrugged. They got The Great Reject instead.

  Under the Atlas Shrugged scenario, deglobalization is just one of numerous motivating factors, but it’s mainly an outcome of a larger dynamic where all non-ruling factions in society lose faith in the prevailing structure of Neoliberal Globalism (a.k.a “Mr. Global”). With Mr. Global’s viability in question, people begin to look for the exits.

  This begins to occur on two fronts. What Vilfredo Pareto called “the non-governing elites” begin to realize that the system which used to accommodate them, even rely on their tacit support, is now becoming hostile toward them. At the very least, the ruling elites are undermining their interests. This is part of the dynamic of Peter Turchin’s “elite overpopulation” that we looked at recently.

  The other front is the comparatively powerless underclass, which, in pace with Pareto’s Theory of Elite Cycles, lose their moorings and standing within the system they are expected to adhere to. The social contract no longer seems to be a matter of middle-class protections and living standards but instead becomes starkly authoritarian and one-sided. What is clear is that the existing institutions are now functioning to defend the position of the overclass, not to uphold the rights and liberties of the underclass.

  The culmination of multiple super-cycles (Pareto’s Elite Cycles, Turchin’s long term dynamics of sociopolitical instability, debt, a Fourth Turning, and a Maunder Minimum for good measure) combined with an accelerated onslaught of technological innovation: Internet, crypto-currencies …biotech? Nanotech? Micro nuke? Fusion? Quantum computing? We have all the necessary components for a complete breakdown of existing institutions and the total loss of legitimacy of the current governing elite class.

  So it goes in our Atlas Shrugged scenario. Various interests of many forms and myriad factions, from dissident states (like Florida), to decentralized and virtual companies, emergent DAO’s, all the way to individuals and cultural tribes all begin to experience these moments of clarity in their own way. From there they will act in their own rational self-interests and cooperate with others doing the same in order to navigate the breakdown of Mr. Global.

  In spite of this, Mr. Global’s prevailing policymakers and governance structures will frantically maneuver and spin narratives of fear and fantasy in order to keep the existing system on the rails.

  

  They walked back the second one, but not the first one.

  That is what The Great Reset really is: it’s an attempt at a zeitgeist-level rationalization that doubles-down on institutional failure on the part of the entire governance structure of Mr. Global, and gives them a new lease on life to remain in charge. Reimagined by the Davos crew, amplified by the mainstream media, lubricated by Big Tech.

  The antidote to all of this are crypto-currencies, smart contracts and decentralization.

  That antidote also brings significant upside regardless of which one of our four possible scenarios plays out.

  When I listen to people who are complete denial about crypto, I realize that there is a common thread in their objections (what made me think about all this today was listening to Michael Pento’s criticisms of Bitcoin on George Gammon’s Rebel Capitalist. Pento’s 2012 book on the inevitable bursting of the bond bubble is a must read. That book helped be form the basis on what I think is the funds flow that is actually putting a floor under crypto. I don’t begrudge Pento for not seeing it, because as I’ll explain, he’s looking at it through the wrong lens)

  

  We could go on for hours about how most of these people haven’t really delved into the technology or what it means, how their criticisms at the defects around Bitcoin apply even more accurately to US dollars (“backed by nothing”, “infinite supply”, “uses too much energy”, et al). But what they all have in common is that they all posit that whether Bitcoin and cryptos succeed or fail is premised on whether the existing establishment will permit it.

  What will the Fed do? What if the government bans it? Won’t the World Bank just create their own CBDC?

  This is completely inverted. They have it backwards. It’s not up to the existing system, because the existing system is over. That’s the part they don’t get.

  The existing system should be looking for its place in the new reality of network states, not pontificating how it will run the new landscape. The coming system will be multipolar in not just the geopolitical dimension, but across cyberspace and the network dimensions as well.

  Instead, the incumbent system is busy banning menthol cigarettes, imposing negative interest rates and undergoing mass conversion to a peculiar new religion called Wokeness.

  

  It won’t work, and it brings to mind a particularly vivid example I once heard about a balloon disaster that still makes me cringe when I think of it:

  A group of people were embarking on a balloon ride and as they were just a foot or two off the ground, the burner erupted into flames. The balloon pilot realized immediately what this meant and he leapt from the gondola which was still only a few feet off the ground.

  One or two of the passengers were quick witted enough to realize what this meant and followed him. This set off a feedback loop: as the fire expanded, its hot air forcing the balloon higher, combined with the weight reductions as the first few people bailed out, the situation very quickly escalated past a point of no return.

  The balloon had accelerated very rapidly to heights from which it was no longer possible to leap safely. The unfortunates who had hesitated and were trapped in a gondola being propelled higher by a fireball, to their inevitable doom.

  That’s what our entire situation feels like today. The balloon is still hanging a foot or so above the ground, the canopy is on fire, and the people who have figured out what this means are bailing out while they can and in doing so they are accelerating the ultimate burn-then-crash of the entire system.

  

  In Rand’s book they went to a hidden valley called “Galt’s Gulch” and used their skills and their resources to restore new communities while the old systems imploded. If this scenario plays out we’d be looking for people creating a decentralized, network of gulches. Seeking each other out who are pursuing this same goals, creating open protocols to to rebuild civil societies and autonomous communities built on the ageless principles of free markets, liberty and prosperity.

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  Tyler Durden
  Thu, 05/06/2021 – 20:50

• China Pollutes More Than US And All Developed Countries Combined: Report
  China Pollutes More Than US And All Developed Countries Combined: Report

  

  China’s 2019 greenhouse gas emissions exceeded those of the United States and the rest of the developed world combined, according to CNBC, citing a Thursday report by the Rhodium Group – a New York-based advisory group founded in 2003 by China expert Daniel H. Rosen.

  

  According to the study co-authored by a former Obama admin climate policy official, energy modelers and emissions experts (just go with it), China is now responsible for 27% of total global emissions – more than the combined total produced by the United States (11%), India (6.6%) and the 27 EU member nations together (6.4%).

  

  In 2019, China’s emissions not only eclipsed that of the US—the world’s second-largest emitter at 11% of the global total—but also, for the first time, surpassed the emissions of all developed countries combined (Figure 2). When added together, GHG emissions from all members of the Organization for Economic Cooperation and Development (OECD), as well as all 27 EU member states, reached 14,057 MMt CO₂e in 2019, about 36 MMt CO₂e short of China’s total. -Rhodium Group

  In short, Chinese President Xi Jinping stole Greta Thunberg’s childhood.

  

  That said, the Rhodium Group also gives China somewhat of a pass for their climate sins – noting that since it’s home to over 1.4 billion people, they’re not quite so evil per capita.

  To date, China’s size has meant that its per capita emissions have remained considerably lower than those in the developed world. In 2019, China’s per capita emissions reached 10.1 tons, nearly tripling over the past two decades (Figure 3). This comes in just below average levels across the OECD bloc (10.5 tons/capita) in 2019, but still significantly lower than the US, which has the highest per capita emissions in the world at 17.6 tons/capita. While final global data for 2020 is not yet available, we expect China’s per capita emissions exceeded the OECD average in 2020, as China’s net GHG emissions grew around 1.7% while emissions from almost all other nations declined sharply in the wake of the COVID-19 pandemic.

  …

  While China exceeded all developed countries combined in terms of annual emissions and came very close to matching per capita emissions in 2019, China’s history as a major emitter is relatively short compared to developed countries, many of which had more than a century head start. A large share of the CO₂ emitted into the atmosphere each year hangs around for hundreds of years. As a result, current global warming is the result of emissions from both the recent and more distant past. Since 1750, members of the OECD bloc have emitted four times more CO₂ on a cumulative basis than China (Figure 4). This overstates the relative role of OECD emissions in the more than 1 degree Celsius increase in global temperatures that has occurred since before the industrial revolution because a large share of annual CO₂ emissions is absorbed in the earth’s carbon cycle in the decades after release. But China still has a way to go before surpassing the OECD on a cumulative contribution basis.

  

  So of course, historically speaking, China has polluted far less – a point we’re still trying to understand.

  

  As CNBC notes, “The findings come after a climate summit President Joe Biden hosted last month, during which Chinese President Xi Jinping reiterated his pledge to make sure the nation’s emissions peak by 2030. He also repeated China’s commitment to reach net-zero emissions by midcentury and urged countries to work together to combat the climate crisis.”

  “We must be committed to multilateralism,” said Xi during brief remarks at the summit. “China looks forward to working with the international community, including the United States, to jointly advance global environmental governance.”

  Xi also said that it would ‘control its coal-fired generation projects and limit increases in coal consumption over the next five years.’

  As we noted on Tuesday, this means China needs to shutter 600 coal plants to meet its emissions goals of net zero greenhouse emissions by 2060. If they don’t meet that goal, we’re sure the virtuous masters of the universe will surely refuse to conduct further business with Beijing.

  Is China aware that Blackrock, Bridgewater and Goldman will never, ever invest in it unless it shuts 600 coal-fired plants to hit its climate target?

  Oh wait…

  — zerohedge (@zerohedge) May 3, 2021

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  Tyler Durden
  Thu, 05/06/2021 – 20:30

• Why Masks Are Still Mandatory
  Why Masks Are Still Mandatory

  Authored by Alex Hamilton via AmericanThinker.com,

  Joe Biden is in a pickle.  

  

  He wants to continue to convince Americans they should get the experimental biological agent (AKA “the vaccine”), but, as Tucker Carlson pointed out last week, the administration and the CDC have offered no explanation as to why you need to continue to wear a mask after you have taken “the vaccine.” 

  

   Why would they want us to doubt the efficacy of the vaccine?  Why would any sane person who is not in a high-risk group contemplate becoming a lab experiment subject if you are not allowed (yes, our rights are now derived from government and will be doled out based on compliance) to burn your mask and return to a pre-pandemic way of life?  

  That’s just bad salesmanship…until you think about the alternative.

  Think about what would happen if they allowed (there’s that word again) people not to wear masks after being vaccinated.  

  Here’s a typical scenario.  

  The vaccinated test subject enters the supermarket.  

  The vigilante mob of leftists can’t wait to accost and demand compliance to their edict, using physical violence if necessary.  

  The test subject then proclaims that he has put his mask in his pocket.  

  A short time later, the test subject hears the man claim the same immunity.

  In this fictional example, you can begin to see what the ramifications of this policy would be.  

  Within weeks, the majority of Americans would stop wearing masks.  

  (Along with social distancing, and lockdowns, and getting the vaccine).  

  People would actually begin to associate non-masking people with safety, while mask-wearing people would signal danger.  The danger of the unvaccinated.

  The government has just lost all control.  

  Do you really think these people will give up their newfound power so easily?  I’m afraid not.  

  I imagine that their Big Tech partners are working furiously building a mandatory vaccine passport system as you read this.  

  Until that is up and running, you can expect the regime to continue requiring all people to wear masks, especially those who have been “vaccinated.”

  Tyler Durden
  Thu, 05/06/2021 – 20:10

• Why Have Bond Yields Gone Nowhere In The Past Month Despite Blowout Macro Data: Here Is Goldman's Answer
  Why Have Bond Yields Gone Nowhere In The Past Month Despite Blowout Macro Data: Here Is Goldman’s Answer

  After a turbulent start to the year for the treasury market, which posted its worst quarterly total return since 1980 as 10y Treasury yields rose more than 80bp, leaving markets to consider just how much further yields might move once the expected economic acceleration went from forecast to fact, Treasuries have found themselves stuck in a very narrow range, gripped by an eerie calm even as the US economy continues to power ahead and is on pace for the strongest expansion in GDP since the record Q3 of last year.

  However, hile one can analyze CTA flows, extrapolate Japanese pension positioning and even speculate about stealth central bank intervention in seeking an answer for the recent bond market calm, there may be a far simpler reason why bond moves have fizzled out even as economic surprises continue coming hot and heavy: as Goldman’s William Marshall writes, yield sensitivity to data surprises tends to decline at higher levels of forecast uncertainty – a key feature of the macro environment since the onset of the pandemic. As a result, until there is some convergence in projections, “yield responses to data releases may remain muted by historical standards.”

  Let’s back up.

  As Marshall notes, after a torrid first three months of 2021, and despite a continuation of positive surprises across a range of significant releases last month – including payrolls, CPI, and retail sales – US yields finished the month lower on net, with yield responses to the data surprises ranging from muted to puzzling. A feature of data releases since the COVID shock has been and remains the high degree of forecast dispersion, which at this point likely reflects the range of views on both timing and magnitude of the acceleration.

  

  This week brings the first look at April data, with economists projecting even stronger job gains (consensus is now just around 1 million new jobs) Goldman takes a look at the likely responsiveness of US rates to data surprises in this environment.

  In tracking the evolution of data surprises, the standard approach is to normalize individual releases by some measure of historical forecast error. This approach helps in providing historical grounding for the magnitude of a given surprise. However, in periods where data is somewhat more volatile than normal — such as at present —using realized forecast errors may significantly under-represent the degree of uncertainty around individual releases. For markets, identifying the level of perceived noise around economic data is useful in gauging how much of a signal a given data point can provide. To this end, using forecast dispersion to normalize data surprises(rather than historical forecast errors) may provide a better picture of the information content in a particular release for markets by directly capturing the level of uncertainty surrounding the print. In general, both approaches (the more standard normalization by historical errors or normalizing each surprise by Bloomberg forecast standard deviation) produce highly correlated results until 2020; however, the last year or so and to a lesser extent the period around the GFC stand out as notable exceptions as shown in the chart below.

  

  Intuitively this makes sense: if the underlying data volatility is orders of magnitude higher than some “calm” baseline, the information value of every outlier print is reduced exponentially as the very next month we may see a sharp reversal.

  To gauge how markets respond to data surprises in different forecast uncertainty regimes, Goldman regressed daily yield changes on daily surprise scores, splitting the sample into regimes of forecast dispersion using the series shown in Chart 1. Pre-COVID (2000-2019) evidence suggests that when forecast dispersion is relatively high, the beta of yields to data surprises normalized by historical forecast errors is somewhat lower than in periods where forecast dispersion is low.

  

  Meanwhile, the relationship between yield sensitivity to surprises and the level of forecast uncertainty is less apparent when scaling surprises by forecast dispersion. An interpretation of this initial observation is that periods of higher forecast uncertainty tend to be associated with lower sensitivity of yields to data by historical standards. Expanding the sample to include the last year firmly reinforces this pattern.

  

  So what does this mean? Here is some more analysis from Goldman guaranteed to make your brian bleed as it tries to put in scientific terms what is ultimately a very simple concept:

  There is a clearer negative relationship between forecast uncertainty yield sensitivity to data surprises normalized by historical standard errors, particularly when forecast dispersion is in the top decile. Normalizing by forecast standard deviation, meanwhile, generates somewhat more stable sensitivities across forecast dispersion regimes, suggesting that the impact of a given data surprise on yields is more reliably informed by the level of uncertainty around any given release — what may be a market-movingsurprise in the context of low levels of dispersion among forecasters is little more than noise when said dispersion is high.

  Got all that – it certainly is a smarter way to say that data no longer matters…

  Anyway, the simple implication of all this is that for now – until the data volatility returns to normal –  it’s likely that yield sensitivity to data will be muted by historical standards, owing to the wide range of expectations (e.g., the standard deviations of forecasts for April non-farm payrolls is more than 3x its historical average).

  That is not to say that data won’t matter — US rates rallied on the back of the softer than expected ISM manufacturing earlier this week, and in the accumulation of better than consensus data will take yields higher into mid-year (and vice versa). However, it likely means that more historically “normal” yield responses to data will require some amount of convergence among forecasters, instead of the prevailing “throw a dart at the wall” chaos.

  It’s reasonable to expect that convergence to occur later this year, though that may take place in the context of less volatility in the data itself. In other words, don’t be surprised if we get an absolute blowout beat (or miss) tomorrow, and the 10Y does… nothing.

  Tyler Durden
  Thu, 05/06/2021 – 19:50

• Gen Z Is Anything But Politically Ill-Informed
  Gen Z Is Anything But Politically Ill-Informed

  Authored by Samuel J. Abrams via RealClearPublicAffairs,

  I have had the privilege of teaching politics and history to college students for well over a decade, and I noticed a significant change among my students in the past few years: their interest in politics and political engagement is far greater than when I began. My first group of students were Millennials, and while some were deeply interested in politics and the socio-historical world, this was the exception, not the norm. Today, my Gen Z students are deeply passionate about political change and not politically dogmatic. The 2020 election revealed their significant level of turnout, potentially setting the stage for a more vibrant polity going forward.

  

  Despite high voter turnout, countless reports bemoan political ignorance and a lack of historical understanding among younger generations. Many observers lament the loss of civics education in schools and the rise of social media and celebrity politics, leading to questions about the civic capacity of younger Americans. Thanks to a national survey commissioned in 2019 by the American Council of Trustees and Alumni (ACTA) and NORC at the University of Chicago, we now know better. Gen Zers are not far out of line with older generations in terms of their political and civic literacy. In fact, the data shows that my impressions are correct: Gen Zers possess greater levels of civic knowledge than Millennials, who are the least politically literate generation today.

  The survey presented 15 questions on political history and civics, asking the identity of the current the Chief Justice of the U.S. Supreme Court to noting the historical fact that the 13th Amendment ended slavery, not Lincoln’s Emancipation Proclamation. Overall, 75 percent of the respondents correctly answered 10 of 15 items, although the average number of correct responses was 8, a bit over half.

  When the data is broken down by generation, Gen Z is not an outlier. Members of the Silent Generation are the most knowledgeable, with an average of 8.8 correct answers, while Millennials are the least knowledgeable at only 6.7 correct answers on average. Gen Z is comparable to Gen X at around 7.5 correct answers, marginally lower than the national average.

  Digging deeper, there were cases where Gen Z was notably better compared to their grandparents. Consider the question of what Harriet Tubman was best known for. Respondents were given a selection of choices, including serving as a Civil War medic, organizing marches on Washington and various boycotts, and guiding slaves through the Underground Railroad, the correct answer. Tubman undertook at least 13 missions that rescued over 70 enslaved people via the Underground Railroad. In aggregate, 78 percent of the population knew this fact; 77 percent of Gen Zers knew this, compared to 65 percent of Silents.

  When asked about what government action guaranteed women the right to vote, Gen Zers were not off the average. Fourty-five percent of the overall sample selected the correct answer of the 19th Amendment, though a sizable portion of Americans – 30 percent – believed this right was guaranteed by the Equal Rights Amendment, an idea that has been around for almost a century but has never been adopted by Congress. Nevertheless, 47 percent of those in the Silent Generation and 49 percent of Boomers answered this question correctly. Fifty-four percent of Gen Zers answered this correctly, compared to just 41 percent of Millennials. Clearly, the youngest cohort is more aware of voting rights than both their grandparents and their immediately preceding cohort.

  Of course, there are examples where Gen Z could benefit from a deeper understanding of history. For instance, one question covered who the architect of the New Deal was; overall responses were split. Fifty-five percent of the total sample replied Franklin D. Roosevelt – the correct choice – but the next greatest percentage picked Alexandria Ocasio-Cortez at 18 percent. Seventy percent of the Silent Generation knew the answer was FDR, and just 11 percent answered AOC. In contrast, only 43 percent of Millennials answered FDR with 22 percent thinking that the correct answer was AOC. Gen Z was notably better, with 60 percent correctly answering FDR and just 12 percent choosing AOC. While AOC has been talking about a Green New Deal, younger Americans should certainly know that her ideas were cribbed from the FDR-initiated New Deal.

  In short, the data supports what I saw in my classroom and seminars: Gen Zers are indeed more politically knowledgeable than older Millennials. While the overall level of political and historical knowledge in the nation should be better, Gen Z does not lag far behind older cohorts. Our various institutions – schools, families, and community organizations – should do more to improve civic literacy. It would be a mistake to assume that Gen Z is simply ignorant of politics and history; Millennials are far more disconnected. Politicos and parties would be wise to cultivate this youngest generational cohort and not speak past them, as they are already aware of American history and how our republic functions.  

  Samuel J. Abrams is professor of politics at Sarah Lawrence College and a visiting scholar at the American Enterprise Institute.

  Tyler Durden
  Thu, 05/06/2021 – 19:30

• Montana Is First State To Cancel Unemployment Benefits In Response To Unprecedented Worker Shortage
  Montana Is First State To Cancel Unemployment Benefits In Response To Unprecedented Worker Shortage

  Three weeks ago, when looking at the unprecedented labor shortage that is crippling the US economy (even with some 100 million Americans not in the labor force)…

  

  …we said that there is a simple reason for this paradoxical phenomenon: trillions in Biden stimulus are now incentivizing potential workers not to seek gainful employment, but to sit back and collect the next stimmy check for doing absolutely nothing in what is becoming the world’s greatest “under the radar” experiment in Universal Basic Income.

  Consider the following striking anecdotes from Bloomberg:

  • Early in the Covid-19 pandemic, Melissa Anderson laid off all three full-time employees of her jewelry-making company, Silver Chest Creations in Burkesville, Ky. She tried to rehire one of them in September and another in January as business recovered, but they refused to come back, she says. “They’re not looking for work.”
  • Sierra Pacific Industries, which manufactures doors, windows, and millwork, is so desperate to fill openings that it’s offering hiring bonuses of up to $1,500 at its factories in California, Washington, and Wisconsin. In rural Northern California, the Red Bluff Job Training Center is trying to lure young people with extra-large pizzas in the hope that some who stop by can be persuaded to fill out a job application. “We’re trying to get inside their head and help them find employment. Businesses would be so eager to train them,” says Kathy Garcia, the business services and marketing manager. “There are absolutely no job seekers.”

  Even more amazing: a stunning 91% of small businesses surveyed by the NFIB said they had few or no qualified applicants for job openings in the past three months, tied for the third highest since that question was added to the NFIB survey in 1993.

  But what is most striking is the context on these figures: recall that just one year ago, the unemployment rate was a depression-era 14.8%. And while it has since dropped to 6%, it remains well above the 3.5% rate of February 2020, before the pandemic. So judging from the jobless rate – which the Federal Reserve tracks closely – there’s still plenty of slack in the labor market.

  Only… if one goes by the complete lack of workers, there isn’t.

  This was confirmed by the results of the latest, April, NFIB Small Business survey, which found that a record 42% of companies reported job openings that could not be filled.

  

  The key quote from NFIB Chief Economist Bill Dunkelberg was “Main Street is doing better as state and local restrictions are eased, but finding qualified labour is a critical issue for small businesses nationwide.” And the explicit admission that BIden’s “trillions” in stimulus are behind this predicament:

  “Small business owners are competing with the pandemic and increased unemployment benefits that are keeping some workers out of the labor force.”

  As if it wasn’t clear, the NFIB added that “finding eligible workers to fill open positions will become increasingly difficult for small business owners.”

  Seven percent of owners cited labor costs as their top business problem and 24% said that labor quality was their top business problem. Finding eligible workers to fill open positions will become increasingly difficult for small business owners.

  Illinois-based Portillo’s Hot Dogs LLC boosted hourly wages in markets including Arizona, Michigan and Florida, and is offering $250 hiring bonuses. The chain has hired social-media influencers and built a van called the “beef bus” to help recruit. Still, many of the chain’s 63 restaurants remain understaffed, said Jodi Roeske, Portillo’s vice president of talent.

  “We are absolutely struggling to get people to even show up for interviews,” Ms. Roeske said.

  To be sure, it’s not just entry level places that can’t find workers: full-service and high-end restaurants like Wolfgang Puck’s Spago Beverly Hills, where servers can earn $100,000 a year with tips, also are struggling to recruit workers. Puck said in an interview with the WSJ that expanded unemployment benefits and new options like personal chef gigs are contributing to staffing shortages at Spago and his other restaurants.

  “I don’t think we should pay people to stay home and not work if there are jobs available,” he said.

  Summarizing the data, Rabobank’s Michael Every wrote that Biden’s generous unemployment benefits are “ironically helping to push up wages, at least temporarily – which I am sure nobody intended, but underlines just how radical policy has to get in the US to make it happen.” His conclusion: ”the problem is that small businesses trying to get past Covid are least well placed to lead this socio-economic charge; and if this points to a wage-price spiral –which is still unlikely– then the bond market will soon be pointing its finger at the Fed.”

  Well if it is unemployment benefits that is causing the labor shortage why not do away with said benefits?

  Of course, that is far easier said than done: once Americans are used to collecting money for doing nothing, they would be extremely displeased – to put it mildly – once the money is gone. This is not lost on politicians who know that they would be the immediate target of popular ire.

  And yet, one state is taking the much needed, if extremely unpopular step, of breaking this addition to stimmy handouts which has also led to this historic labor shortage.

  According to Yahoo, Montana plans to stop some of its federally-funded unemployment benefits to address “the state’s severe workforce shortage,” according to its labor department, which will leave many out-of-work residents without any support at all.

  “Nearly every sector in our economy faces a labor shortage,” Governor Greg Gianforte, a Republican, said in a statement on Tuesday, echoing what we said last month, namely that “The vast expansion of federal unemployment benefits is now doing more harm than good.”

  Instead, the state will do the correct thing and begin offering return-to-work bonuses to help employers looking to hire.

  Starting June 27, Montanans will lose access to the extra $300 in weekly unemployment benefits, but maintain their regular benefits. Contractors, gig workers, and others will also lose access to the Pandemic Unemployment Assistance (PUA) program, meaning those workers won’t get any benefits.

  

  Those relying on the DOL’s Pandemic Emergency Unemployment Compensation (PEUC) program, which gives additional weeks of unemployment benefits to workers, will stop receiving benefits. The state also plans to reinstate the requirement that stipulates workers must be actively searching for a job to qualify for unemployment benefits.

  Predictably, the decision sparked howls of outrage from those already habituated to Biden’s Universal Basic Income regime:

  “Montana’s move to end these fully federally-funded UI programs, along with their COVID-19 exceptions, is cruel, ill-informed, and disproportionately harms Black and Indigenous People of Color and women,” Alexa Tapia, unemployment insurance campaign coordinator at the National Employment Law Project, told Yahoo Money, basically slamming the decision as both racist and sexist. “Ending these programs would leave 22,459 people unable to support their families and hurt thousands more.”

  Alternatively, those 22,459 people can find a job.

  Montana’s unemployment rate was 3.8% in March, down from its 11.9% pandemic peak in April 2020, according to data by the Labor Department.

  The federally-funded unemployment programs run through September 6 nationwide. Montana’s cancellation would cost workers at least $3,000 per worker in supplement benefits if they couldn’t find work through the program expiration. Workers on PUA and PEUC would lose at least $4,500 in benefits because they no longer will be eligible for the base unemployment benefit.

  Liberal economists were also outrage, claiming that Universal Basic Income is a wonderful creation (it hasn’t worked out that great in any socialist nation where it has become a staple of social welfare, but whatever), with studies from such liberal bastions as the National Bureau of Economic Research all the way to Yale University claiming that the extra $600 in benefits distributed earlier in the pandemic had limited labor supply effects and likely didn’t disincentivize work. (narrator: they disincentivize work, just see Wolfgang Puck’s quote above).

  “The 100% federally-paid unemployment benefits have boosted spending and contributed to the strong economic recovery,” Andrew Stettner, an unemployment insurance expert and senior fellow at the Century Foundation, told Yahoo Money. “It’s shortsighted for the state to sacrifice that economic stimulus based on the anecdotal labor shortages concerns of a few employers, especially given the limited evidence of work disincentives from unemployment pay during the pandemic.”

  What he forgot to mention is that the artificial spending created by stimulus has led to soaring prices and out of control “transitory” inflation, which will lower the standard of living for everyone, not just those on the government’s dole, but again anything that goes contrary to the liberal mantra of “bigger government is always better” is anathema and must be crushed immediately.

  So far, Montana is the first and only state to fully opt out of the federal unemployment benefit programs enacted in the pandemic and currently extended by the American Rescue Plan signed into law in March. As a way to incentivize workers to return to work, the state is offering a one-time return-to-work payment of $1,200, using money from the American Rescue Plan to fund the program. Only those who complete four weeks of work would receive the payment.

  “Incentives matter,” Gianforte said. “Our return-to-work bonus and the return to pre-pandemic unemployment programs will help get more Montanans back to work.”

  One can only hope that more states follow Gianforte’s extremely unpopular, if extremely prudent decision, before the US is mired in 1970s style hyperinflation.

  

  We won’t be holding our breath.

  Tyler Durden
  Thu, 05/06/2021 – 19:10

• Voting With Your Feet
  Voting With Your Feet

  Authored by Walter Block via InternationalMan.com,

  Voting with your feet is a crucially important indicator of what is really going on, regarding the political economy. No, this does not refer to taking off your shoes and socks, entering the polling booth, pressing a button with your big toe instead of your thumb or index finger.

  Rather, it denotes migration patterns as the best way to determine human welfare.

  

  The island government 90 miles off the Florida shore can brag all it wants about its health care and educational systems that have “made Cuba great.” But massive numbers of people have rejected that sorry system as demonstrated by their migration away from it, often at great bodily risk, to enter our country. Yes, there might have been a Bernie fan or two who moved in the opposite direction (Senator Sanders spent his honeymoon not in Russia, but in the USSR), but these are the exceptions that prove the rule.

  Were there any Jews attempting to enter Nazi Germany? Who knows; again, maybe one or two. But the virtual one-way traffic was in the very opposite direct. Ditto for the Berlin wall. In which way was the immense movement there? To ask this question is to answer it.

  The U.S is a racist country that grinds down blacks? Then we ought to see large numbers of African Americans attempting to leave for greener pastures elsewhere, and observe very few people from sub Saharan Africa headed in the U.S. direction. But this does not occur. Indeed, the very opposite takes place. There is no better refutation to the claims of the Black Lives Matter Marxist movement. All the statistics about African American unemployment rates falling and a poverty rate of intact black families falling to single digits (before Covid) pales into insignificance compared to the primordial fact of migration patterns. Or, rather, lack of same.

  What is the reaction of the governments from which migrants are fleeing? Some act responsibly, morally, justly: they do not try to shoot or incarcerate emigrants as they depart. Mexico is certainly an example of this, and ought to be congratulated for such civilized behavior. Similar accolades must be awarded to Namibia, Botswana, Zimbabwe (formally Rhodesia) and Mozambique. They did not violently prevent their residents from entering even apartheid South Africa.

  But others act in the opposite direction, and reveal themselves to be in effect, gigantic jail cells. The cases in point are too numerous to mention, but the following are certainly examples:

  • All too many Cubans have resorted to making the passage to Florida on rafts supported by inner tube tires and were shot at or arrested by authorities of that nation.

  • East and West Germany and the infamous Berlin Wall; in which direction were the feet voters headed!!!

  • The traffic in the Korean peninsula eight decades ago, and even in the modern era, was from North to South, not in the opposite direction

  • Recent headlines blare: “Hong Kong Residents Formally Arrested.” Their “crime?” They were caught attempting to escape to Taiwan. So much for the “One Country, Two Systems” agreed upon in a treaty signed by both countries when Brittain in 1997 turned this island community over to the tender mercies of the People’s Republic of China. So far, no Uighurs have been imprisoned for fleeing, but it does not take too much imagination to suppose that if they had a prayer of succeeding in such a venture, they would also dearly love to do so.

  Let us close with a U.S. example. In the 1930s, there was a strong pattern of African Americans leaving Alabama, Mississippi, and other Jim Crow southern states for Detroit, Philadelphia, Chicago, and other more receptive environs. Did the donor states attempt to in any way prevent this migration pattern? No. So they also garner honor roll mention in the litany of political jurisdictions that have eschewed the title of vast penitentiaries.

  *  *  *

  The political and economic climate is constantly changing… and not always for the better. Obtaining the political diversification benefits of a second passport is crucial to ensuring you won’t fall victim to a desperate government. That’s why Doug Casey and his team just released a new complementary report, “The Easiest Way to a Second Passport.” It contains all the details about one of the easiest countries to obtain a second passport from. Click here to download it now.

  Tyler Durden
  Thu, 05/06/2021 – 18:50

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