- EU Bureaucrats Finally Agree On Something: All Tech Devices To Use USB-C Connector, Apple Scrambles
EU Bureaucrats Finally Agree On Something: All Tech Devices To Use USB-C Connector, Apple Scrambles
Apple recently began testing future iPhone models with USB-C charging ports instead of the current Lightning charging port and now is scrambling (amid supply chain disruptions) as new European regulations mandate all smartphones and other electronic devices to use the USB-C charger.
In an unusual twist, the European Parliament actually agreed on something Tuesday, decreeing that all mobile phones, tablets, and cameras use the same charging port to make consumers’ lives easier and save them money. What’s more impressive is lawmakers in the EU actually agreed on something…
“Under the new rules, consumers will no longer need a different charging device and cable every time they purchase a new device, and can use one single charger for all of their small and medium-sized portable electronic devices. Mobile phones, tablets, e-readers, earbuds, digital cameras, headphones and headsets, handheld videogame consoles and portable speakers that are rechargeable via a wired cable will have to be equipped with a USB Type-C port, regardless of their manufacturer. Laptops will also have to be adapted to the requirements by 40 months after the entry into force,” European Parliament said in a statement.
Apple and other companies will have to comply with the new rule by 2024.
“A common charger is common sense for the many electronic devices on our daily lives.
“European consumers will be able to use a single charger for all their portable electronics — an important step to increase convenience and reduce waste,” Internal Market Commissioner Thierry Breton said in a statement to Bloomberg.
The plan was unveiled last year and is estimated to save consumers 250 million euros ($267 million) each year. Bloomberg noted that “the proposal originally angered Apple, which said it would reduce innovation.”
At the Apple Worldwide Developers Conference on Monday, there was no mention of a future iPhone model using a USB-C charger.
However, in April, a dual-USB-C port 35-watt charger was leaked.
What’s more astonishing is that EU lawmakers actually agreed on something sensible:
“We have a deal on the #CommonCharger!” EU commissioner Thierry Breton said via Twitter.
Tyler Durden
Wed, 06/08/2022 – 02:45 - Beware Of Hidden Messages From War-Games
Beware Of Hidden Messages From War-Games
Authored by Guermantes Lailari via The Epoch Times,
An NBC Meet the Press special on May 14 presented a war game conducted by the Center for a New American Security (CNAS), a Washington-based think tank. On the surface, the game appeared to “educate” its audience. However, looking deeper into the messages delivered, “education” was not its purpose.
These are the “conclusions” as quoted from the NBC news article about the war game:
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The “U.S. should prepare for drawn-out conflict if China invades Taiwan.”
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“An attack would plunge the region into a broad, drawn-out war that could include direct attacks on the U.S.”
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The Chinese Communist Party (CCP) will conduct a decapitation strategy against Taiwan prior to its invasion. The CCP is “not going to let the president of Taiwan survive the first day.”
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Part of the “swift decapitation of Taiwan’s government” involves the CCP “pre-emptively attacking American bases in Japan and Guam.”
This NBC report notes that “it may sound like a purely academic exercise but, in fact, it’s deadly serious.” Even the monthly Air Force Magazine picked up the story and repeated some of the CNAS’s talking points. Luckily, one senior retired U.S. Air Force officer recognized that the scenario was far-fetched.
NBC assumed the CNAS game is consistent with what we know about CCP assumptions about what the United States will or will not do to stymie an invasion.
The CNAS war game’s most important problematic assumption is that the CCP would order the People’s Liberation Army (PLA) to conduct a preemptive strike against U.S. bases in Japan and Guam. First, attacking the U.S. military bases and killing American soldiers, airmen, sailors, Marines, and the U.S. and Japanese civilians will bring a hellfire on the CCP—and the CCP is fully aware of such a response.
An attack on the U.S. territory of Guam would remind the U.S. public of the last time an Asian country attacked the United States and what transpired; Japan attacked Pearl Harbor and, after four years of hard fighting, was the recipient of two atomic bombs in August 1945.
The CNAS assumption about attacking U.S. Pacific bases is analogous to asserting that Vladimir Putin would preemptively attack NATO bases in Europe as a prelude to Russia’s invasion of Ukraine. The CNAS’s assumption is fantastical and unrealistic.
CNAS Connections
Having argued that the CNAS made a strategic blunder, I investigated the background of one of the key participants, Michèle A. Flournoy. Flournoy and Kurt M. Campbell co-founded the CNAS in 2007 as a 501(c)3 tax-exempt nonprofit organization. The CNAS touts its research as independent and non-partisan. This article argues that this war game was partisan and supports indirectly or directly the CCP propaganda and media warfare campaigns conducted against Taiwan and the United States.
According to the CNAS website, “Michèle Flournoy is Co-Founder and Managing Partner of WestExec Advisors, and former Co-Founder and Chief Executive Officer of the Center for a New American Security (CNAS), where she currently serves as Chair of the Board of Directors.”
Prior to her selection as the under secretary of defense for policy from February 2009 to February 2012, Flournoy “co-led President Obama’s transition team at the Defense Department.” In other words, she has close ties to the Obama administration and the Biden administration.
U.S. Under Secretary of Defence for Policy Michele Flournoy arrives for a bilateral meeting with Ma Xiaotian, deputy chief of general staff of the Chinese People’s Liberation Army, at the Bayi Building in Beijing, China, on Dec. 7, 2011. (Andy Wong/Getty Images)
Campbell was the Obama administration’s assistant secretary of state for East Asian and Pacific affairs. Currently, Campbell is the Biden administration’s first designated National Security Council coordinator for the Indo-Pacific.
WestExec Advisors
Secretary of State Antony Blinken was WestExec’s co-founder and managing director; Avril D. Haines, the current director of National Intelligence, was a WestExec principal; Jen Psaki, former Biden White House press secretary, and Eli Ratner, current assistant secretary of defense for Indo-Pacific security affairs, were WestExec senior advisers. Ben Weingarten’s Newsweek exposé provides more details on the current administration’s connections to the CCP.
In early March 2022, a group of former administration officials visited Taiwan to deliver a message endorsing the Biden administration’s “asymmetric warfare strategy” or “little porcupine strategy” to President Tsai Ing-wen’s administration, including Flournoy and former National Security Council senior directors for Asia Mike Green and Evan Medeiros.
Why did Washington send people who are not part of the current administration to deliver an important message to Taiwan? President Joe Biden could have sent a current assistant secretary of defense or state. Consider how Tsai felt when she had to swallow her pride and pretend she was grateful for this after-thought hodge-podge crew thrown at her because the Biden administration was embarrassed by former Secretary of State Michael Pompeo’s visit to Taiwan later that same week.
‘Asymmetric’ Weapons for Taiwan
In 2020, Mike Green and Evan Medeiros co-wrote an article in Foreign Affairs arguing that Taiwan should not buy expensive weapon systems. They argued:
“These [weapons] do little to deter a combined naval, air, and missile campaign from China—and the PLA will always be bigger and better equipped than Taiwan’s army in a ground battle. Rather, the United States should work with Taiwan to develop asymmetric military capabilities that would actually stand a chance of deterring a Chinese invasion or attacks on critical infrastructure.”
The weaknesses of the asymmetric weapons strategy was well documented by this author’s recent two articles in Taiwan News. Absent a guarantee that the U.S. military would intervene in an invasion of Taiwan by the PLA, the U.S. government is asking the Taiwanese to commit national suicide. The asymmetric military capabilities proposed by these “advisers” do not “deter” a Chinese invasion or attacks on critical infrastructure.
By allowing Taiwan to only purchase these asymmetric weapons at the exclusion of others needed to address at least four other attack scenarios makes Taiwan more vulnerable. All five attack scenarios are decapitation (missile and air strikes), naval and air blockade/embargo, invasion, border operations (quickly taking Taiwan’s small islands), and all-out regional war.
What Is the War Game’s Message to the US Population?
The CNAS war game had several subtle messages that corrupt the U.S. popular support for Taiwan, such as the following:
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The United States should not be involved in a long and bloody war against the CCP/PLA (remember Afghanistan, Iraq, and Vietnam).
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The United States will not send troops and promotes the idea that the Taiwanese can defend themselves using asymmetric weapons (same as Ukraine).
What Is the Message to the Taiwanese Population?
The war game’s message to the Taiwanese population is the following:
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The PLA will destroy Taiwan’s expensive weapons during an invasion. Taiwan should purchase only “asymmetric weapons” (no weapons that can reach China).
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The United States will sell Taiwan weapons to defend itself against an invasion. These weapons will support a guerrilla operation against the PLA. These asymmetric weapons will not prevent the PLA from other attack scenarios such as an air and naval embargo or air and missile strikes.
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Taiwan is not a state, and Taiwan does not deserve weapons that other countries have, such as Israel. Taiwan “only” deserves weapons that non-state actors have (guerrillas or terrorists).
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If the people of Taiwan are brave enough to fight against annexation by a genocidal and totalitarian regime, they will lose. The PLA has more people and more weapons.
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The United States is not serious about helping Taiwan defend itself and will refuse to commit to assisting in a war. So just give up now.
What Is the Message to the CCP and the PLA?
The war game’s scenario hid the following messages:
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Diminish American popular support to fight against the PLA.
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“Asymmetric warfare” policy would not threaten the Chinese landmass. Deterrence is not only defensive (attacking forces invading the island); deterrence is also offensive (striking targets inside China). Conceding the option of putting marauding invaders at risk on their home soil before they set foot on the soil of a democracy is a prescription for failure, as demonstrated by Russia’s invasion of Ukraine.
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Taiwan should surrender rather than fight because the PLA is destined to win.
The CCP’s Goal Regarding Taiwan
A CCP “core interest” (核心利益), the equivalent of U.S. vital interest, is to absorb Taiwan into China. The CCP views Taiwan’s political independence as an issue of “state sovereignty, national security, territorial integrity and national reunification,” which is more important to the CCP than economic stability. Helping Xi Jinping accomplish this goal would make any person or country a friend.
The CNAS war game conducts psychological warfare in support of the CCP and against Americans and Taiwanese by positing that American military support for Taiwan is destined to fail.
Psychological warfare “seeks to influence and/or disrupt an opponent’s decision-making capability, to create doubts, foment anti-leadership sentiments, to deceive opponents and to attempt to diminish the will to fight among opponents,” according to a report by the Office of the Secretary of Defense.
Media warfare is “a constant, ongoing activity aimed at long-term influence of perceptions and attitudes,” according to The Heritage Foundation.
Taiwan represents a new democracy that opposes the despotic rule of the CCP and demonstrates that Chinese people can successfully (economically and politically) have a self-ruled democratic society with Chinese characteristics.
Worst Case Scenario: If the CCP Takes Taiwan
If the PLA took Taiwan, the CCP would threaten U.S. alliance partners Japan and South Korea militarily, politically, and economically. A declassified CIA report addresses the economic threat; the Senkaku Islands are near a large oil reservoir discovered in 1968. Japan’s Senkaku Islands, claimed by the CCP (since 1970), are easily within reach (about 100 hundred miles north of Taiwan—see map here).
A P-3C maritime patrol aircraft of the Japanese Maritime Self-Defense Force flying over the disputed Senkaku Islands in the East China Sea on Oct. 13, 2011. (Japan Pool/AFP/Getty Images)
The PLA would conduct a military buildup throughout Taiwan to project force from the first island chain to the second and beyond. For example, the east side of Taiwan, with its very deep-water access, is the perfect location for the PLA to build nuclear submarine bases for its nuclear attack and its nuclear-armed submarines. These submarine ports would make it difficult for the United States and its allies to track the location of these submarines, providing China with a greater deterrence capability against the United States.
In other words, the CCP conquest of Taiwan would place China in a dominating position in the Pacific Ocean and embolden the CCP to consider other expansionist actions to “rectify” other claims it has in the Pacific, such as the “nine-dash line” in the South China Sea, Senkaku/Diaoyu Islands, and Okinawa.
The loss of Taiwan would be a worse situation for the United States and its allies than the embarrassing withdrawal from Afghanistan. Taiwan’s loss to the CCP would be another example of America’s retreat from seeking to support and maintain global norms and rules. The CCP would force these Asian countries into making dangerous compromises that could place them behind a new “bamboo curtain” with Chinese communist characteristics.
US Responsibility
The 1979 Taiwan Relations Act (TRA) states:
“That any effort to determine the future of Taiwan by other than peaceful means, including by boycotts or embargoes, is considered a threat to the peace and security of the Western Pacific area and of grave concern to the United States.
“That the United States shall provide Taiwan with arms of a defensive character and shall maintain the capacity of the United States to resist any resort to force or other forms of coercion that would jeopardize the security, or social or economic system, of the people of Taiwan.”
The TRA asserts a U.S. responsibility to defend Taiwan from PLA attacks. The Biden administration should stand up to the CCP and re-assert the U.S. support for Taiwan’s defense, and conduct a massive arming of Taiwan along with training that enables the full power of joint and combined military operations (air, ground, sea, subsurface, space, cyber, and special operations)—with the assurance that the United States will fight to ensure democracy for the people of Taiwan.
The training should not focus solely on tactical training of ground forces using “asymmetric weapons” as the United States did in Ukraine. Instead, the United States should train the Taiwan military so that it can participate in the type of combined and joint operations used to free Kuwait from Iraqi forces in the 1991 Persian Gulf War.
Flournoy and the CNAS are furthering the CCP’s political warfare against Taiwan by sending messages through the war game while also reinforcing the Biden administration’s desire to weaken Taiwan through its “asymmetric weapons” strategy. These manipulations of the American and Taiwanese populations must stop.
If the U.S. government protected a non-democratic nation (Kuwait) against Saddam Hussein’s authoritarian regime (Iraq) in 1991, then why wouldn’t the United States protect a democratic nation (Taiwan) against another authoritarian regime (the CCP)? If the United States pretends to intervene but fails to stop the PLA, the result would be disastrous for Asia and the entire world.
Tyler Durden
Tue, 06/07/2022 – 23:25 -
- New Video Shows "Holy Grail" Of Shipwrecks Off Colombia
New Video Shows “Holy Grail” Of Shipwrecks Off Colombia
The Colombian government released a new video of a Spanish ship that sunk three centuries ago off the South American country’s coast. Maritime experts describe it as the “holy grail” of Spanish colonial shipwrecks.
President Ivan Duque and naval officials released a video on Monday showing the long-sunken San José galleon, resting 900 meters below the ocean’s surface, with treasure that could be worth billions of dollars, according to Reuters.
No humans have been able to reach the shipwreck found in 2015 near Colombia’s Caribbean port of Cartagena.
A remotely operated underwater vehicle with a camera and powerful light recently examined the wreckage, finding gold bars and coins and cannons.
“The idea is to recover it and to have sustainable financing mechanisms for future extractions.
“In this way we protect the treasure, the patrimony of the San Jose galleon,” President Ivan Duque said.
Colombian Navy commander Admiral Gabriel Perez said the underwater vehicle found two other shipwrecks in the area, believed to be from two centuries ago.
“We now have two other discoveries in the same area, that show other options for archaeological exploration,” Perez said.
The story behind why San José has been considered the “holy grail” of shipwrecks is that it was loaded up with precious metals from South America and headed to Europe when the British Navy sank it in 1708. CBS News said experts estimate the treasure to be “200 tons of gold, silver, and emeralds.”
Here’s the video of the wreckage.
Now comes the hard part: How to retrieve the billions of dollars in treasure 900 meters under the surface?
Tyler Durden
Tue, 06/07/2022 – 23:05 - Comedians Can't Quit Trump
Comedians Can’t Quit Trump
Authored by Christian Toto via RealClear Politics (emphasis ours),
Yes, the real estate mogul no longer calls the White House home, but chances are you’ll hear Donald Trump jokes in any given late-night monologue. And they’ll draw satirical blood. That’s all well and good, but Trump no longer lives at 1600 Pennsylvania Ave., and he can’t even steer all his favorite GOP candidates to victory these days.
There’s a ready Trump replacement for Colbert and Co., a politician who might be commander in chief should the current occupant’s health falter. So far, mainstream comics won’t lay a glove on her despite enough material to fill a year’s worth of monologues.
Maybe two. Meet Vice President Kamala Harris.
The 57-year-old Californian has only been in office a little more than a year, and already she’s amassed a treasure trove of mockable moments. Cackles. Gaffes. Empty results. Calamitous polling numbers. Emotionally distressed ex-staffers. And a new gold standard for political word salad.
So where are the jokes? Of course, these same satirists should be tweaking President Biden, who also suffers from horrific polling numbers and his own gaffe-tastic spells. Harris still represents a unique satirical target, a chance to make the vice presidency part of the comic fabric. Again.
Veeps aren’t prime fodder for political comics, at least on paper. They’re second in command and serve in a ceremonial capacity, for the most part, meaning comics would rather target the boss instead. But they can still draw comedic attention when they step out of line.
Just ask Dan Quayle. George H.W. Bush’s sidekick got punished by comedians for his perceived lack of intelligence. Quayle didn’t help himself, uttering absurd lines like, “The Holocaust was an obscene period in our nation’s history. I mean in this century’s history. But we all lived in this century. I didn’t live in this century.”
These things aren’t always fair – and wouldn’t be for Kamala Harris if anyone dared tease her. Quayle’s infamous misspelling of “potato” at a 1992 school appearance, for instance, was prompted by an erroneous cue card given to him by a teacher. Nonetheless, it became his comedy anchor. You can’t blame comedians for teeing off on that gaffe.
Comedians got an early start on Quayle quips. David Letterman devoted six “Top Ten” lists to him during the 1988 election cycle on his NBC showcase. Quayle, he noted, “would not seem like a brainy egghead when visiting the nation’s injured professional wrestlers.”
Jay Leno, filling in for Johnny Carson on “The Tonight Show,” compared Quayle to his VP competition, Lloyd Bentsen, saying the former had two pluses over the older man – “a blow dryer and a pulse.”
Late night hosts also targeted the vice president mercilessly during the Trump years. Vice President Mike Pence made headlines for revealing he doesn’t spend time alone with any woman other than his wife. Comedians pounced, and seized, turning him into the ultimate square.
Comedians even channeled Pence’s COVID-19 vaccine injection for a skit mocking both him and President Trump. We can’t forget the fly that invaded Pence’s follicular airspace in the 2020 vice presidential debate. Earlier this year, the host of “Jimmy Kimmel Live” mocked Pence by bringing up notes Trump took during his time in office. “I know it wasn’t intentional,” Kimmel said. “But a blank space between two parentheses is the most perfect description of Mike Pence I’ve ever seen. It should be on his Christmas cards.”
Even The Onion poked serial fun at Biden when he served under President Barack Obama. They wrote the book on the subject – “The President of Vice: The Autobiography of Joe Biden.”
Why poke fun at Harris, the first female vice president and a person of color? The real question is, “Why not?” – especially since her public persona all but demands a satirical scorching. Her scattershot speeches routinely go viral on social media, with “amateur” comics doing the work Team Late Night won’t do. Here’s her TED talk touting high-speed Internet:
So, when you think about it, there is great significance to the passage of time in terms of what we need to do to lay these wires, what we need to do to create these jobs … And there is such great significance to the passage of time when we think about a day in the life of our children and what that means to the future of our nation, depending on whether or not they have the resources they need to achieve their God-given talent.
Just an awkward moment? It happens to the smoothest politicians, right? There’s more. Here’s Harris addressing Jamaica’s Prime Minister Andrew Holness earlier this year:
We also recognized, just as it has been in the United States, for Jamaica, one of the issues that has been presented as an issue that is economic in the way its impact has been the pandemic … So to that end, we are announcing today also that we will assist Jamaica in COVID recovery by assisting in terms of the recovery efforts in Jamaica that have been essential to I believe what is necessary to strengthen not only the issue of public health, but also the economy.
Harris also stumbles during softball interviews, be it with MSNBC’s Joy Reid or NBC’s Lester Holt. She gaffed her way through one Holt Q&A by insisting (three times) that she had been to the southern border only to have that position gently corrected. Her response was to lash out at Holt and conjure up a bizarre non sequitur. “And I haven’t been to Europe,” she said. “And I mean, I don’t understand the point that you’re making … I’m not discounting the importance of the border.”
Last year, she offered this oddball homily during an appearance in France: “We must together. Work together. To see where we are. Where we are headed, where we are going and our vision for where we should be. But also see it as a moment to, yes. Together, address the challenges and to work on the opportunities that are presented by this moment.”
“Every time she speaks, it’s like watching Wile E. Coyote’s feet keep spinning madly even after he’s run off the cliff,” NY Post columnist Kyle Smith quipped. And he’s not a professional comedian.
Her most recent word salad entrée? A plea to work together on the environment’s behalf.
Our world is more interconnected and interdependent. That is especially true when it comes to the climate crisis, which is why we will work together, and continue to work together, to address these issues, to tackle these challenges, and to work together as we continue to work operating from the new norms, rules, and agreements, that we will convene to work together on to galvanize global action. With that I thank you all. This is a matter of urgent priority for all of us and I know we will work on this together.
Writing word salad sketches could be a snap for random YouTube creators, let alone seasoned late-night scribes.
Need more Harris fodder? Her staff defections are so common it’s yet another comic through-line to throw on the already massive pile. One unnamed ex-staffer said Harris underlings endure a “constant amount of soul-destroying criticism.”
And then there’s that cackle. Harris laughs at inappropriate times, a troubling tic for any politician. She even chuckled over a question regarding Ukrainian refugees fleeing the Russian invasion. It makes imitating her a snap, but has Maya Rudolph even attempted Harris’ signature quirk? Rudolph has played Harris sparingly on NBC’s left-leaning “Saturday Night Live” over the years, but those appearances have mostly disappeared since Harris became vice president.
They also avoid her flaws. A March 2021 SNL skit found Rudolph, as Harris, hosting a unity Seder dinner. The jokes landed against her guests, including SNL players as Sen. Ted Cruz and Rep. Marjorie Taylor Green.
Trump made political humor so much easier. Some could argue too easy, given the lazy jabs at his “orange” skin and curious ‘do. Harris isn’t Trump, but she’s tailor-made for comic vivisections.
Harris jokes might help late-night comics bolster their ratings. A Rasmussen Reports survey shows “54% do not believe the former California senator is qualified to be president.” Her overall polling numbers remain weak, meaning comedians risk little for targeting her with their barbs. It’s one reason Greg Gutfeld shocked late night last year by rising to the top of the ratings heap. The Fox News star regularly mocks Harris from his popular perch, eclipsing iconic shows like “The Tonight Show” in the ratings race.
“She is truly a national treasure, if by treasure, you mean, embarrassment,” Gutfeld said recently.
What does Harris have to do to get Comedy, Inc.’s attention? Then again, maybe their relative silence is based in fear, not punchlines. A silly Twitter jab at the vice president cost one conservative talker her gig. So is it any wonder that Jimmy Kimmel has defended, not mocked, Harris’ poor poll numbers by playing two cards – racism and sexism? Kimmel quipped, “I think I know why Kamala’s ratings are low, besides sexism and racism, which are the obvious ones. It’s because whenever she’s next to Joe Biden, standing near or behind him, she looks like an assassin.”
Does he want to break his own rules by giving her a good-natured ribbing? Does he fear the consequences? Comedians may be more worried about their next paycheck than about stepping on comedy’s vice presidential third rail.
Tyler Durden
Tue, 06/07/2022 – 22:45 - Hedge Funds Had A Horrible May… And Then They Missed The Month-End Ramp
Hedge Funds Had A Horrible May… And Then They Missed The Month-End Ramp
May was a volatile month for equity markets, starting off ugly and closing strong, but while most equity indices were able to finish slightly green for the month given the large rally in the final full week of May, the same cannot be said for hedge funds.
According to the latest weekly report from Morgan Stanley Prime Brokerage (available to pro subscribers), Hedge Funds had felt (and were hammered by) a large portion of the market downside in the first part of May but then hung in well mid-month given most strategies were running lighter net levels at the time. That was as good as it gets however, and HFs then struggled to make back their losses in the final full week of May, capturing only a portion of the rally. This left the average global fund down ~1% for the month.
Digging deeper we find that while the performance of equity markets was quite volatile throughout the month, we did not see nearly the same levels of volatility in HF returns, perhaps due to most strategies running at much lighter net leverage levels (more on HF leverage and positioning below).
According to MS, most of the performance ‘pain’ was felt in the week ending May 6, with HFs posting losses in-line with the MSCI – this also coincided with L/S funds beginning to de-gross. HFs then performed in line with the market for two weeks (weeks ending May 13 & May 20) as HF de-grossing took a pause after May 9, and then HFs returned to adding to gross exposure while keeping nets light.
However, the moderate levels of net leverage then caused HFs to miss out on a large portion of the rally in the week ending May 27 – this lack of upside capture amidst this rally is what ultimately led HFs to lag the index for the month
Goldman’s Prime Desk makes a similar conclusion in its May performance post-mortem.
Another notable observation: while performance across all strategies tracked indices relatively well (except for the late month ramp), there is a lot of dispersion both across strategies and intra-strategy through May – the spread between the 90th %-tile and 10th %-tile performers is currently the 2nd widest Morgan Stanley Prime has seen since 2010, trailing only 2020 by a small margin. Among the top performers this year based on investor letters received through April are Systematic Macro (+14.3%), Disc. Macro (+8.3%) and Energy-focused (+4.2%), and while there has been only a small sample of funds who’ve reported for May, these strategies all outperformed the avg. global fund last month. The weaker performers this year have been traditional L/S strategies (-8.4% through May based on our prop estimate), particularly TMT-and HC-focused funds (both down ~14% through Apr based on letters).
Drilling down into L/S fund performance, global Equity L/S total alpha was negative this past month, all of which was driven by the long side given shorts generated positive alpha of ~1%. Longs held globally by L/S funds fell ~2.4% last month vs. the MSCI ending up +0.2%, representing a negative spread of -2.6%.
Even more embarrassing for the billionaires who make up the 2 and 20 crowd – like Gabe Plotkin – this was the 8th consecutive month where long alpha has been negative, the longest stretch we have seen since we began tracking the data in 2010.
Meanwhile, the spread of -2.6% represented the 6th time in the past 8 months where the spread was lower than -2%. To put this into perspective, for the period from the start of 2010 through the end of 3Q 2021, the spread between longs and the MSCI was worse than -2% only nine times.
Looking at global HF positioning and leverage, MS Prime finds two main themes:
- THEME #1: HFs Continue to Sell Global Equities, Led by US and China
HFs sold global equities for the 6th consecutive month, with the magnitude of the selling in May larger than what we saw in
April, but smaller than March’s flow. The selling can be attributed to Equity L/S (long selling) and Stat Arb/Quant (short adds)
funds, and by region, split between N. America, Asia ex-Japan, and LatAm – HFs were, however, net buyers of both Europe
and Japan.The Global L/S ratio (ex. Quants) ended just above 2.0x at the end of May, right around where it ended in Apr. At its low, the ratio fell all the way to 2.01x but has yet to break below the 2.0x barrier – the last time it did so was in April of 2020.
- THEME #2: L/S Funds Trim Gross Exp; Gross Lev Now Light Across Most Major Strategies
More important even than dismal performance, May ended up being one the largest month in terms of active gross reductions Morgan Stanley Prime has seen YTD by L/S funds, with most of the gross exposure trimmed specifically within the US and China. While this month was far from the most extreme seen in recent years (Jan ’21 was ~4x larger), it is still a notable break in trend from the gross adds that occurred in April. US L/S gross leverage reached a ~2-year low of ~175% intra-month before recovering to 182% by month-end – in addition to US L/S gross lev, gross across many of the major strategies also hit a 12M low in May and remains in the <10th %-tile both over the last 12M and the last 5 years as of last week.
Goldman’s Prime Desk makes another interesting observation, which is apropos in light of today’s 2nd consecutive guidance cut by Target. According to GS, following challenging earnings results from various companies, Consumer Staples is one of the most net sold sectors in the US, driven entirely by short sales, with short sales outpacing long buys by nearly 5:1. Selling was consistent over the past week as the sector experienced net selling (and short selling) every day over the past week. All industry groups were net sold for the week, with the exception of Food & Staples Retailing, which was marginally net bought. Food Products and Beverages accounted for a large proportion of the net selling flow for the overall sector. Amid this shorting frenzy it is not surprising that relatively within the US, Consumer Staples was one of the worst performing sectors on a five-day basis.
There is much more in the full Morgan Stanley and Goldman Sachs notes, including much more granular detail and in depth analysis of nascent hedge fund themes, with both available to professional subs in the usual place.
One final observation: courtesy of the latest HSBC hedge fund weekly report (also available to pro subs) here are the best and worst performing hedge funds of 2022:
Tyler Durden
Tue, 06/07/2022 – 22:25 - Revisiting The Flynn/Kislyak Leak
Revisiting The Flynn/Kislyak Leak
Authored by Techno Fog via The Reactionary,
How I found out the Flynn/Kislyak leak took place on January 5, 2017.
Before I get to that, some brief words on the “unmasking” report commissioned by Attorney General Bill Barr and prepared by US Attorney John Bash – with a focus on the call between Lt. Gen. Michael Flynn and Russian Ambassador Kislyak.
With respect to that call transcript, Flynn’s name was never “masked.” As Bash noted, “the FBI shared transcripts of the relevant [Flynn/Kislyak] communications with officials outside of the Bureau without masking General Flynn’s name.”
The FBI shared these transcripts with top-level FBI/DOJ officials – and perhaps members of the Obama White House. Who could have seen the transcripts? The list includes President Obama, Vice President Biden, FBI Director James Comey, National Security Adviser Susan Rice, and Deputy Attorney General Sally Yates, all who were present at a meeting at the Obama White House to discuss General Flynn’s calls with the Russian Ambassador.
The Washington Post explains:
On Jan. 5, 2017, President Barack Obama received a briefing from intelligence officials in the Oval Office about the investigation into Russian efforts to influence the outcome of the 2016 election in favor of Donald Trump. When the briefing was over, he asked Vice President Joe Biden, FBI Director James B. Comey, Deputy Attorney General Sally Yates and national security adviser Susan E. Rice to stay behind for an additional discussion about incoming national security adviser Michael Flynn.
On that same day – January 5, 2017 – the Flynn/Kislyak call was leaked to Adam Entous of The Washington Post.
This leak was done by source(s) who “saw a transcript and described it to” Entous.
How do I know that?
Because Entous told me.
Entous’s discussions with his sources would lead him and Greg Miller to write this January 5, 2017 Washington Post article discussing intelligence reports that Russian intelligence was involved in the DNC hack and that Moscow tried to help “Trump win the White House.”
To his credit, Entous didn’t include discussions of the Flynn/Kislyak call because he didn’t think they were newsworthy. In Entous’s own words, there was no reason that Flynn “shouldn’t be having that conversation.”
You can read the Flynn/Kislyak transcripts here.
This gets us to the identity of the leaker. Much of the focus had been on who spoke with The Washington Post’s David Ignatius, who was the first to report on the Flynn/Kislyak call on January 12, 2017. For example, during Congressional testimony on the Trump/Russia matter, witnesses were asked about whether they spoke with Ignatius.
The real focus should have been on who spoke with Entous. And we have a couple guesses on that front.
The primary suspect: Sally Yates. Or someone close to Sally Yates (such as Tashina Guahar). Entous told us that his source(s) had seen the Flynn/Kislyak transcripts. With that in mind, take a close look at Entous’s February 13, 2017 appearance on the Rachel Maddow Show, where he divulges that Yates saw the transcripts in “late December, early January” and was concerned about potential Logan Act violations. He didn’t just know when Yates saw the transcripts – he also knew what she thought about the transcripts:
MADDOW: So, obviously, the headline here and the lead graph are arresting, jarring. Why exactly did the acting attorney general, Sally Yates, conclude or surmise that the Russian government might be able to blackmail Mike Flynn, the national security adviser?
ENTOUS: Right. So what happened was when this intelligence first came in, which would be in late December, early January, you know, Yates saw the intelligence and was concerned that Flynn was potentially in violation of what is known as the Logan Act, which is a very obscure statute which would bar a nongovernment official from trying to influence another government`s policies. And so, that really was — she knew that that was not something that would be pursued in court. There wouldn`t be a prosecution based on the Logan Act.
The other suspects. This includes Susan Rice. Remember that it was Susan Rice who prepared the infamous January 20, 2017 memo – the same day Trump was sworn-in as President – to cover for President Obama, who supposedly told Comey he expected the Trump/Russia investigation to be handled “by the book.” In that same memo, Rice discussed how Comey relayed the frequency of the Flynn/Kislyak talks to that small group.
Or, perhaps it was Obama’s Chief of Staff Denis McDonough. He would have been updated on the January 5, 2017 meeting with Obama, Comey, et al. And McDonough unmasked General Flynn on an unknown matter that same day.
Those close to James Clapper at DNI had their suspicions the leak came from the Obama White House or Senate Democrats. We obtained this January 6, 2017 e-mail distributed to James Clapper (then-Director of National Intelligence) relating to the leak:
With respect to a Senate Democrat “leaker”, look no further than James Wolfe, the former democrat director of security for the Senate Intelligence Community who leaked the Carter Page FISA to Ali Watkins, his mistress at The New York Times. We don’t have an answer to whether Senate Democrats would have had access to the Flynn/Kislyak calls in late December 2016 – January 5, 2017.
I’m not sure we’ll ever have an answer. Bash didn’t look into the Flynn/Kislyak leak. And The New York Times reported the leak investigation – code name Operation Echo – closed without charges.
With the Operation Echo investigation being closed, there is a silver lining via FOIA. We’re making the request and will provide updates as they come.
Speaking of FOIA requests, we are looking into Jake Sullivan’s wife Margaret Goodlander. She serves as counsel to Attorney General Merrick Garland. We understand she has not recused herself from Special Counsel John Durham’s investigation, despite her husband being a witness to Clinton Campaign misconduct. We have a very strong reason to believe that Goodlander is keeping a close eye on the Durham investigation – as she has hundreds, if not thousands, of e-mails discussing Durham and what he is looking into.
We’ll be providing an update on Goodlander as the documents start rolling in.
Tyler Durden
Tue, 06/07/2022 – 22:05 - These Are The Biggest US Importers And Exporters
These Are The Biggest US Importers And Exporters
Which companies are the biggest importers and exporters in the U.S.?
The majority of people will know the names of the businesses that ship the most goods into the country (measured by volume transported on container ships), but, as Statista’s Katharina Buchholz notes, most of the biggest exporters hardly ring a bell.
You will find more infographics at Statista
While large retailers like Walmart, Target or Home Depot dominate the imports list, the biggest U.S. exporters deal with products that don’t inspire the imagination, like paper, or that Americans would rather forget about, like their trash.
Out of the top eight U.S. exporters, four deal with paper, packaging or recyclables.
Other products exported in large volumes are animal feed and cars/automotive parts, according to industry publication JOC.
Largest importer Walmart has a substantial lead on runner-up Target and is also way ahead of the biggest U.S. exporter, Koch Industries.
While Walmart has 2.2 million employees, the top 5 U.S. exporter, America Chung Nam, only has 120. The paper and plastics recycling company is headquartered in City of Industry, Calif., according to Zoominfo. Their containers full of old cardboard and plastic recyclables are mainly headed for Asia. In 2018, the company was still the biggest exporter in the U.S. but a ban on plastic recyclables imports into China likely contributed to a decline in the company’s and its competitors’ export volumes.
The coronavirus pandemic did little to change the export and import volumes of America’s biggest players.
The only company that fell out of the top eight in 2020 was Exxon Mobil. The fifth biggest exporter in 2019, it did not even appear in the top 100 in 2020 as oil prices crashed as a result of COVID-19. In 2021, it was back in rank 19 of America’s biggest exporters.
Tyler Durden
Tue, 06/07/2022 – 21:45 - YouTuber 3D Prints "World's First" Rocket Launcher And Fires At Target
YouTuber 3D Prints “World’s First” Rocket Launcher And Fires At Target
3D printing has revolutionized gun-making and has come a long way since the single-shot “The Liberator” pistol was available for download in 2013. Now entire semiautomatic pistol carbines can be entirely printed at home, and weapon-making appears to have graduated to rocket launchers.
Youtuber “Ordnance Lab“ (also known as Ordnance Lab LLC and holds a Type 10 FFL) published a video showing what they say is the “world’s first 3D printed rocket launcher.”
“In this video we team up with D&S Creations, who have developed 3D printed rockets and rocket launchers. We test both a smaller caliber rocket and a larger one, along with a prototype for a shaped charge warhead. This is just the start of our working on 3D printed rockets. We have the launch and detonation figured out, now we need to work on getting the accuracy figured out,” Ordnance Lab said in the video’s description.
One firing test shows a 3D-printed rocket with a shaped charge denoting on a target. The narrator in the video said the “flash powder charge produced a very bright and loud report.”
This is the first time we’ve seen 3D-printed rocket launchers demonstrated in a video. Earlier this year, Deterrence Dispensed, an online group that promotes and distributes open-source 3D-printed firearm blueprints, released a video showing the use of a “66mm recoilless launcher.”
Deterrence Dispensed, the controversial 3D-printed weapons syndicate (co-founded by JStark), has recently released a new project.
This is a 66mm recoilless launcher with shoulder rest attachments, allowing it to convert to a mortar on the go. pic.twitter.com/esdUxNJD7g
— Jake Hanrahan (@Jake_Hanrahan) March 23, 2022
https://platform.twitter.com/widgets.js
Within a decade, 3D printing weapons have evolved from single-shot pistols to semiautomatic pistol carbines to rocket launchers. How is President Biden’s ATF going to counter people printing weapons at home? The simple answer is they can’t unless they ban printers and polylactic acid (PLA) filament, which we believe will be impossible…
Tyler Durden
Tue, 06/07/2022 – 21:05 - Big Oil Set To Win Stakes In Qatar's Huge LNG Expansion Projects
Big Oil Set To Win Stakes In Qatar’s Huge LNG Expansion Projects
By Tsvetana Paraskova of OilPrice.com
Some of the biggest international oil and gas majors, including ExxonMobil, Shell, and TotalEnergies, are expected to be awarded stakes in the major expansion projects of one of the world’s top LNG exporters, Qatar, sources familiar with the matter told Bloomberg on Tuesday.
Qatar announced last year the world’s largest LNG project, which is set to raise Qatar’s LNG production capacity from 77 million tons per annum (mmtpa) to 110 mmtpa. The project, expected to start production in the fourth quarter of 2025, will cost US$28.75 billion. Qatar also plans another expansion phase at the North Field, the world’s largest natural gas field, which it shares with Iran. The second expansion phase will be the North Field South Project (NFS), set to further increase Qatar’s LNG production capacity from 110 mmtpa to 126 mmtpa, with an expected production start date in 2027.
International oil and gas majors Exxon, Chevron, Shell, TotalEnergies, ConocoPhillips, and Eni, bid last year for a stake in Qatar’s LNG expansion projects.
Qatar has delayed the awarding of the stakes, but its state firm QatarEnergy has now called a press conference in Doha this coming Sunday, without saying what the event will be about, Bloomberg’s sources said. Executives from U.S. supermajor Exxon and TotalEnergies’ CEO Patrick Pouyanne may attend the event, the sources added.
Qatar announced its huge expansion plans just months before the energy crisis sent natural gas and LNG prices sky-high in the autumn of 2021 and a year before the Russian invasion of Ukraine, which prompted the EU to race to procure alternative supply.
The EU is looking at the U.S. and Qatar—the top exporters of LNG—to replace as much Russian pipeline gas as possible.
Last month, Qatar signed an agreement on an energy partnership with Germany, which, QatarEnergy says, “will further strengthen Germany’s energy supply diversification through LNG imports from Qatar.”
Tyler Durden
Tue, 06/07/2022 – 20:45 - Family Of Latest Clinton-Linked Suicide Blocks Release Of Shotgun Death Details
Family Of Latest Clinton-Linked Suicide Blocks Release Of Shotgun Death Details
The family of yet another dead Clinton pal has petitioned a judge to prevent pictures of Mark Middleton from being released under a Freedom of Information Act. And while there’s been no response from the court, a local Arkansas sheriff is interpreting the request itself as a full-stop on information requests, according to the Daily Mail.
All we know thus far is that the 59-year-old Middleton – who admitted Jeffrey Epstein to the White House seven out of at least 17 times – was discovered on May 7 hanging from a tree at the Heifer Ranch in Perryville by an electrical cord, with a shotgun blast to his chest. The ranch, located 30 miles from Middleton’s home, is owned by an anti-poverty nonprofit called Heifer International.
The seemingly redundant ‘suicide’ methods used by the married father of two, or whoever killed him, will remain a mystery, for now.
“The investigation is still open. I can’t say anything more,” Perry County Sheriff Scott Montgomery told the Mail, adding that the family said he was “depressed.”
“‘I don’t know the man, and I don’t [know] why he picked our county or picked that location to commit suicide. To our knowledge, he had never been there before, and we have no record of him being there before, Montgomery told Radar Online before he clammed up.
“He died from a self-inflicted shotgun wound to the chest. He found a tree and he pulled a table over there, and he got on that table, and he took an extension cord and put it around a limb, put it around his neck and he shot himself in the chest with a shotgun … It was very evident that the shotgun worked because there was not a lot of blood or anything on the scene. You can tell the shotgun blast was on his chest, you can tell that because there is a hole in the chest and pellets came out the back of his back. It was definitely self-inflicted in our opinion.“
As the Mail notes, Middleton’s mysterious death adds to the list of Clinton associates who have died unexpectedly – many in small plane crashes.
Middleton’s family did not disclose the cause of death at the time but authorities later confirmed the former White House official took his own life with a self-inflicted gunshot at an urban farm in Perryville, Arkansas.
In a lawsuit filed on May 23, the family admits Middleton committed suicide, and says they have ‘a privacy interest’ in preventing any ‘photographs, videos, sketches (or) other illustrative content’ from the death scene being released.
They claim it would lead to ‘outlandish, hurtful, unsupported and offensive articles’ being published online.
They argued that keeping the footage and files sealed would halt a proliferation of ‘unsubstantiated conspiracy theories’.
A judge is due to hear the case on June 14. -Daily Mail
Middleton was an associate of the late Jeffrey Epstein – who made at least 17 trips to the White House between 1993 and 1995. Bill Clinton, meanwhile, was one of dozens of passengers to fly on Epstein’s “Lolita Express” – where witnesses have placed the former president on Epstein’s private island.
According to the Heifer International spokesman Chris Cox Heifer, Middleton’s car was found in the parking lot by ranch employees who then notified the sheriff. His body was found shortly thereafter.
“He wasn’t invited to the property and staff became aware that he was there without authorization,” said Heifer, adding “We have not found any connection to Heifer.”
“The ranch is well known in the area and it’s possible that he could have attended something here but we couldn’t’ find any major links,” he continued. “The ranch hosts school groups for things like lambing so he could have attended one of those. It’s a very unfortunate incident.”
According to the Mail, Middleton left the White House in February 1995 – and allegedly held himself out as an international dealmaker, something Epstein might have been attracted to. In 1996, an investigation found that Middleton had abused his access to the White House to impress business clients, and was barred from the executive mansion without senior approval – claims he’s denied.
Meanwhile, the Mail has provided a list of the ‘Clinton body count.’
Judi Gibbs, 32, January 3, 1986: The one-time Penthouse Pet died alongside her lover Bill Puterburgh, 57, in an unexplained house fire in Fordyce, Arkansas. She was a high-class prostitute who used hotels and racetracks to pick up rich and powerful men and was known to have had an affair with then-Arkansas governor Bill Clinton who would fly her from her home town to Little Rock. Rumors of a compromising picture of the two of them were rife, but if it ever existed, it was probably destroyed in the fire. The families of both Gibbs and Puterburgh told DailyMail.com in 2016 they believe the fire was set deliberately.
Kevin Ives, 17, and Don Henry, 16, August 23, 1987: The two teens were crushed by a train, in Alexander, Arkansas. Their deaths were ruled accidental, with the medical examiner saying they had fallen asleep on a railroad line after smoking marijuana, but a grand jury found they had been murdered before being placed on the tracks. They had allegedly stumbled on a plot to smuggle drugs and guns from an airport in Mena, Arkansas, that Gov. Bill Clinton was said to be involved in.
Victor Raiser, 53, July 30, 1992: The second finance co-chair of Bill Clinton’s presidential campaign was killed along with his son in a plane crash during a fishing vacation in Alaska. Conspiracy theorists believe the crash was deliberately caused. Campaign press secretary Dee Dee Myers called Raiser a major player in the organization.
Paul Tully, 48, September 25, 1992: The Democratic strategist died of an apparent heart attack. A chain-smoking, heavy-drinking political consultant who weighed in at more than 320 lb. Tully died seven weeks before Clinton’s first presidential election win. He had been political director of the DNC during Clinton’s rise. Tully was on the left of the Democratic Party and usually worked for those who shared his views, however he agreed to work for Clinton because he was impressed with his oratory and thought he was the only Democrat who could beat President George Bush.
Paula Gober, 36, December 7, 1992: Clinton’s interpreter for the deaf for several years died in a single car accident. Gober had traveled with him while he was governor of Arkansas. Her vehicle overturned on a bend, throwing her 30 feet. There were no witnesses.
Vince Foster, 48, July 20, 1993: The Arkansas lawyer committed suicide. President Clinton appointed Foster to deputy White House counsel when he became president in 1993. It didn’t take long for Foster, 48, to realize he had made a terrible mistake by accepting the post. He hated the work and fell into a deep depression. Just six months into the job, his body was found in his car in Fort Marcy Park, Virginia, a gun in his hand and a suicide note torn into 27 pieces in the trunk. Conspiracy theorists believe he was murdered by the Clintons for knowing too much.
Stanley Heard, 47, September 10, 1993: The Arkansas chiropractor died in a small plane crash. According to 1998 book ‘A Profession of One’s Own,’ the doctor treated the Clinton family. Heard was asked by Bill Clinton to represent the practice as plans for ‘Hillarycare’ were being finalized. His attorney Steve Dickson, was flying him home from a healthcare meeting in Washington DC just eight months into the Clinton presidency. On the way to the capital from his home in Kansas, Dickson’s small plane developed problems so he landed in St. Louis and rented another plane. That rented plane was the one that crashed in rural Virginia, killing both men.
Jerry Parks, 47, September 23, 1993: The head of security for Bill Clinton’s headquarters in Arkansas, was shot to death. As he drove home in West Little Rock, two men in a white Chevrolet pulled alongside his car and sprayed it with semi-automatic gunfire. As Parks’s car stopped a man stepped out of the Chevy and shot him twice with a 9mm pistol and sped off. Despite there being several witnesses, no-one was ever arrested. The killing came two months after Parks had watched news of Vince Foster’s death and allegedly told his son Gary ‘I’m a dead man.’ His wife Lois remarried and her second husband, Dr. David Millstein was stabbed to death in 2006.
Edward Willey Jr, 60, November 29, 1993: The Clinton fundraiser was found dead in the Virginia woods. He was having serious money problems and his wife, a volunteer aide in the White House, agreed to ask Bill Clinton for a paid job. Their meeting ended when Clinton allegedly forced himself on her in the Oval Office, kissing her, fondling her breast and pushing her hand on to his genitals. Four years later Kathleen Willey wrote a book in which she put forward a theory that the Clintons may have had her husband murdered. She said after his death, a friend had told her that Ed had confided that he took briefcases full of cash to the Clintons’ base in Little Rock, Arkansas during Bill’s first presidential campaign.
Herschel Friday, 70, March 1, 1994: The Arkansas lawyer died in a small plane crash when he lost control as he came in to land at his Arkansas ranch. President Richard Nixon had once considered Friday for the Supreme Court. He was known as a benefactor of Bill Clinton, serving on his campaign finance committee after his law firm had persuaded the then-governor to support a tax package that helped the state’s horse racing industry.
Kathy Ferguson, 37, May 11, 1994: The ex-wife of Arkansas State Trooper Danny Ferguson, who was named in a sexual harassment suit brought by Paula Jones against Bill Clinton. Ferguson died by gun suicide. She left a note blaming problems with her fiancé, Bill Shelton. A month later Shelton, upset about the suicide verdict, killed himself.
Ron Brown, 54, April 3, 1996: The chair of the Democratic National Committee died in a plane crash in Croatia. He became head of the DNC during Bill Clinton’s rise to the presidential nomination and was rewarded with the cabinet position. He was under a corruption investigation when his plane slammed into a mountainside. Doctors who examined his body found a circular wound on the top of his head which led to suspicions that he had died before the plane crashed, but that theory was later discounted. The crash was attributed to pilot error.
Charles Meissner, 56, April 3, 1996: The assistant secretary for international trade died in the same plane crash as Brown. Meissner had been criticized for allegedly giving special security clearance to John Huang, who later pleaded guilty to federal conspiracy charges for violating campaign finance laws, in a case that enmeshed the Clinton administration.
Seth Rich, 27, July 10, 2016: The Operations Director for Voter Expansion for the DNC, was found murdered on in Washington, DC. He was shot in the back a block from his apartment at 4:20am. His killers have not been identified. Conspiracy theorists believe Rich may have been involved in the DNC email leak in 2016. His death initially appeared like a robbery gone wrong but his mother Mary Rich claims that nothing was taken from her son, who was found with two shots in his back. The mystery surrounding his death sparked a flurry of theories, including claims that he was on his way to speak to the FBI when he was shot.
To see the rest of the list, click here.
Tyler Durden
Tue, 06/07/2022 – 20:25 - "Somebody's On Path To Destruct America," Warns US Oil Billionaire
“Somebody’s On Path To Destruct America,” Warns US Oil Billionaire
New York billionaire and refiner John Catsimatidis is out with a new warning that soaring fuel prices and rising interest rates could produce a hard landing for the US economy. Catsimatidis warned last month about the diesel shortage on the East Coast, even suggesting the fuel could “be rationed this summer.”
Catsimatidis told Fox Business’ Dagen McDowell that the fuel crisis “will get worse” and said the Biden administration is steering the economy on a path towards recession, indicating this downturn doesn’t need to happen.
Biden’s “obsession” against “turning on North American oil spigots” has skyrocketed energy costs and inflation, he said, adding that the president has been begging Saudi Arabia and other countries for more crude production instead of increasing domestic production.
“We have 100 years’ worth of oil [in the US]. Let them [the government] open up the spigots and the price of crude oil will come back down to $55, $60, maybe $65 – half”, Catsimatidis said.
He explained it makes absolutely “no sense” to beg Saudi Arabia for crude at $120/bbl. He called on the president to increase domestic drilling.
“[Biden] wants to fly to Saudi Arabia and beg the Saudi Arabians to give us another half a million barrels at $120 a barrel… It makes no sense,” he added.
Catsimatidis spoke with McDowell on Monday as the national gasoline average at the pump inched closer to $5 a gallon.
Tightness in fuel supplies is worsening and has forced multiple banks, including Goldman Sachs (full note available only to pro subs), to revise the peak summer oil price target from $125/bbl to $140/bbl.
Goldman outlined demand destruction would be around $160/bbl.
Besides soaring energy costs (as well as rapid food inflation), Catsimatidis said he disagrees that the Federal Reserve’s aggressive monetary tightening is the right thing to do and could trigger a recession.
Catsimatidis left Fox listeners with this ominous warning:
“Somebody’s on the path to destruct America, and somebody’s got to say ‘guys, enough is enough’. You know what the cost has been to the American people because of the rising gas prices – the cost of the rising food prices – it’s going to go even higher with $120 oil”, Catsimatidis said.
Maybe history doesn’t repeat, but it certainly rhymes. Perhaps Catsimatidis is right. Soaring energy costs and rising interest rates are a perfect storm that could shock the economy into the next recession.
Watch the full interview here (it’s short, about 5 minutes long).
… maybe Bloomberg’s Javier Blas is on to something here.
CHART OF THE DAY: Play long enough with a left-and-right y-axis double scale, and one can fit two charts and show a strong correlation. In this case, however, there’s a single scale (right), and the correlation is scary: Brent market in 2007-to-2009, and in 2021-to-date | #OOTT pic.twitter.com/IgjEe3Exy8
— Javier Blas (@JavierBlas) June 7, 2022
Tyler Durden
Tue, 06/07/2022 – 19:45 - US Import Demand Is Dropping Off A Cliff
US Import Demand Is Dropping Off A Cliff
By Henry Byers of FreightWaves
The latest ocean container bookings data reveals that despite the strong levels of inbound cargo during the first five months of 2022, import demand is not just softening — it’s dropping off a cliff. Because capacity on the trans-Pacific has remained relatively stable, Drewry’s container spot rates from China to the West Coast have plunged 41% month-over-month to $9,630.
Freight forwarders will enjoy expanding margins on ocean freight, while U.S. trucking carriers and intermodal volume providers may start to see volume risks.
Consumer buying patterns are rapidly normalizing to pre-COVID levels, and U.S. retailers are stuck with too much inventory. Target shares dropped Tuesday morning after executives said the company would mark down unwanted items, cancel purchase orders and move quickly to get rid of excess inventory.
Container imports bound for the U.S. have dropped over 36% since May 24. (This index measures departing container volumes at the port of origin). This is a troubling sign for domestic U.S. freight markets that have been benefiting from an unprecedented surge of containerized import volumes over the last 18 months. Since ocean transit times for these inbound container volumes have recently been averaging between 30 and 35 days, we will begin seeing the softer volumes show up at U.S. ports in the first couple of weeks of July.
This also puts U.S. containerized imports from all countries of origin down 36% year-over-year, which is a reversion back to the volume levels of the summer of 2020. But what is the cause of the sudden drop in containerized import volumes? Well, there are a few simultaneous factors converging that serve as likely explanations for why volumes are suddenly dropping.
The inventory glut
At the forefront of these reasons is the buildup of inventory here in the U.S. resulting from companies attempting to both replenish inventories that were largely depleted in 2021, but also from these companies wanting to keep enough inventory on hand in case of any further disruptions that may occur. Consecutive rounds of COVID lockdowns in China only exacerbated those fears, but after the war between Russia and Ukraine broke out more than 100 days ago, the geopolitical risks seem to only be escalating, and for better or for worse, companies decided that they would rather have the inventory safely here in the U.S. than risk having it abroad should there be a sudden surge in consumer demand.
So, if consumers are now shifting buying trends from goods to services, those goods-producing companies may get stuck with too much inventory or the wrong inventory in order to try to capture sales. This buildup of inventory will inevitably lead to a slowdown in new import orders abroad and thus will only add to the demand destruction we are seeing for containerized imports into the U.S. Just Tuesday Target announced an “aggressive” inventory reduction plan led by canceling orders and marking down even more inventory.
The chart above, displaying rising inventories, and the chart below, displaying falling imports, reveal that retailers are upside down after the last surge of freight to hit the United States’ shores and are throttling down freight velocity in their networks.
The consumer is getting crushed
Conditions for the consumer seem to be getting worse and worse as inflation takes hold and prices get more and more expensive. Just this week, AAA reported a new record high for gasoline prices at $4.51 per gallon on its national index.
Some economists speculate that with the Fed beginning to raise rates and draw down its balance sheet, we may be experiencing “peak inflation.” However, even if inflationary pressures begin to ease, consumers may still be overexposed to rising interest rates through the use of credit in a way that could further deteriorate demand and discretionary spending.
Credit card spending has been accelerating at a time when personal savings rates have continued to decrease and move toward some of their lowest rates (last reading 4.4) since the Great Financial Crisis (4.5 in August 2009). There are two ways to read very low savings rates: either consumers are exceptionally confident and exuberantly spending their money or consumers are spending every last dollar they have in an attempt to keep their heads above water in a high-inflation environment. Either way, there isn’t any slack left in consumer wallets — it’s hard to imagine consumer spending growing from here.
Unfortunately, inflationary pressures in energy and food don’t know or care that American consumers are out of money — inflation in those sectors was caused by supply shocks, not artificially stimulated demand. It is also important to keep in mind that the rate of growth for the Producer Price Index has been outpacing the Consumer Price Index, so some producers may still be taking some hits from rising costs that have not yet been passed on to the consumer.
So even though total revolving credit outstanding is just at pre-pandemic levels, it is nonetheless accelerating, and if prices continue to rise, it is reasonable to expect that revolving credit outstanding will rise as well.
At first glance, one may look at retail sales (charted below) and conclude that they are growing, but keep in mind that the report is measured in nominal dollars unadjusted for inflation and represents increases in the prices of goods being sold — not so much the strength or resilience of consumers. Goods-producing companies will not be alone. Services and tech companies will also be under pressure in the coming months, and sell-offs could lead to layoffs.
As we see a growing number of signs pointing toward further demand destruction from U.S. consumers, and thus a further reversion of import container volumes back to levels closer to 2019, it is worth examining the trade lane that handles a majority of that volume: China to the U.S.
When looking at aggregated volumes from China to all U.S. ports, we are able to see that volumes have been declining from the “peak of peak season” in September 2021 through Tuesday (currently down 51% from that peak). While late March through the beginning of May is historically (pre-trade war/pre-pandemic) a softer period for volumes on this trade lane, it is important to realize that this decline in volumes has also been amplified by the COVID restrictions and lockdowns implemented by the Chinese government in Shanghai as well as other important manufacturing regions in China (most notably around Beijing and its major nearby port of Tianjin).
Despite the lockdowns, a decline in volumes on this major trade lane was seemingly inevitable in 2022 as the massive volumes moved between these two countries in 2021 were at unprecedented and unsustainable levels. Now some industry observers are calling for a “container surge” as China reopens, but it seems that the demand destruction has already spilled over into this trade lane in a big way.
The ‘container surge’ that never was
The “container surge” that many have been expecting from Shanghai (thought to be building during the lockdowns) appears to have mostly already been rerouted through the Port of Ningbo (yellow). With access to the Port of Shanghai being largely blocked due to landside restrictions (i.e., road closures), shippers were quick to reroute volumes through the closest alternate major port to the Port of Shanghai (red). Since the lockdowns began in Shanghai in late March, the decline in Shanghai new bookings (and thus load volumes) has been more than offset by a surge of volumes through Ningbo from rerouted containers. This led to booking lead times hitting their lowest levels on record as shippers scrambled to get their volumes moving.
Despite the reopening of Shanghai, total container volumes from China to the U.S. have continued their downward trajectory, and that trend is not likely to be reversed by an easing of COVID restrictions alone. As of the latest data points, if this is the “container surge” from Shanghai to U.S. ports upon its reopening last Wednesday, then right now, it is barely a “blip on the radar” compared to the volumes from Shanghai to the U.S. that what we have seen over the last 18 to 22 months. This could easily change within our bookings data for the weeks ahead, and if there is pent-up demand, it will undoubtedly show up in the bookings data, but as of Tuesday, it has not yet materialized in any significant way.
This steady decline in volumes from China to the U.S. has also put significant downward pressure on spot rates from the demand side. As capacity remained relatively consistent in the first few weeks post-lockdown (March 28 onward), the drop in volumes caused a decline in both the Freightos Baltic Daily Index and the Drewry World Container Index spot rates from China/East Asia to the U.S. West Coast (down 41% per FEU month-over-month [m/m] – $9,630), as well as from China/East Asia to the U.S. East Coast (down 36% per FEU m/m – $11,907). While this has been a welcome downturn in spot rates for shippers that battled the record-setting spot rates of 2021, we should also keep in mind that these spot rates remain elevated on a y/y basis (73% to the West Coast and 59% to the East Coast).
If bookings continue to soften through June, we expect to see spot rates on this trade lane decline further, but ocean carriers may go to greater lengths than ever before to try and protect their record-setting earnings. They have already been cutting capacity on major trade routes through measures such as blank sailings and reassigning vessels to other services, but if the decline in volumes accelerates in the weeks ahead, we may see the alliances test their strength and discipline like never before.
If rates start dropping quickly, it is reasonable to suspect that the ocean carriers that have not locked in a majority of their allocations in longer-term contracts may begin aggressively undercutting one another as they compete in the spot market.
Interestingly enough, the last port labor negotiations at LAX/LGB that caused disruptions to supply chains (and thus led to a buildup of inventory in the U.S.) in 2014-15 created a similar situation. Coming off of a record year, that may sound like an unlikely scenario, but there is a distinct possibility that sharply softening spot rates could cause a shakeup and/or reorganization of the current alliances.
Tyler Durden
Tue, 06/07/2022 – 19:25 - Leading Dems Issue Letter Urging Biden To Distance US From 'Unreformed' Saudi Crown Prince
Leading Dems Issue Letter Urging Biden To Distance US From ‘Unreformed’ Saudi Crown Prince
A group of Democratic lawmakers are urging Joe Biden take greater caution with Saudi Arabia amid reports that he plans to travel there this summer, specifically that the US president take steps to distance the United States from Crown Prince Mohammed bin Salman, in almost unheard of Congressional dissent over historically close US-Saudi ties.
The New York Times on Tuesday was the first to report on a letter delivered to President Biden, drafted by California Democrat Rep. Adam B. Schiff and signed by a handful of other influential Dems, which calls on the president to “recalibrate” the US-Saudi relationship – coming years after the 2018 murder of journalist Jamal Khashoggi at the hands of a Saudi hit team at the Istanbul consulate.
While stopping short of calling on the president to cancel the trip altogether, the letter makes the case that any near-future engagement with the kingdom must be strive at “recalibrating that relationship to serve America’s national interests.”
Via AP Importantly, the letter lashes out at MbS himself, expressly refuting claims that he’s a “reformer” – and demanding accountability for Khashoggi’s killing, stressing this should be a top US priority.
It’s in the following that the letter takes the crown prince and current de facto ruler of the country to task over persistent human rights abuses. The Congressional Democratic critique appears to emphasize that the Khashoggi affair wasn’t an isolated event, but that bin Salman has remained unrepentant as well as gone unpunished, leading to further human rights crackdowns with impunity:
Finally, recent mass executions and Saudi pressure on Turkey to cease the trial for Jamal Khashoggi’s brutal murder bely claims that Saudi Crown Prince Mohammed bin Salman is pursuing genuine reforms.
Until Saudi Arabia shows signs of charting a different course, and in light of deliberations regarding a potential visit to the Kingdom during which you may have an opportunity to meet with King Salman and other regional heads of state, we encourage you to redouble your efforts to recalibrate the U.S.-Saudi relationship.
The letter’s additional signatories, as Axios lists, include “Gregory Meeks, who chairs the House Foreign Affairs Committee; Adam Smith, who chairs the House Armed Services Committee, Carolyn Maloney, who chairs the House Committee on Oversight and Reform; Bennie Thompson, who chairs the Homeland Security Committee; and Stephen Lynch, who chairs the Subcommittee on National Security on the House Committee on Oversight and Reform.”
The other more interesting and unprecedented criticism the letter presents (unprecedented, that is, for high-ranking Congressional Democrats to publicly express) is that it calls out the Saudis for working with China to build ballistic missiles.
On this point, the letter says, “Public reports indicate that Saudi Arabia is pursuing greater strategic cooperation with China, including further ballistic missile acquisitions. We urge you to make clear that partnership with China in ways that undermine U.S. national security interests will have a lasting negative impact on the U.S.-Saudi relationship.”
The letter offers critiques of recent Saudi actions on a variety of issues, including related to the war in Ukraine…
Senior House Democrats urge Biden to overhaul the US relationship with Saudi Arabia ahead of his trip there. “Saudi Arabia’s refusal to stabilize global energy markets is helping bankroll Vladimir Putin’s war crimes in Ukraine”: pic.twitter.com/E58X4hQ3tf
— Jared Malsin (@jmalsin) June 7, 2022
https://platform.twitter.com/widgets.js
According to background in the NY Times, “Saudi Arabia has bought short-range ballistic missiles from China for years. But in the last two years, that relationship has intensified, even as the United States and China have grown more adversarial.”
Further, as the Times points out, “The Saudis are now buying more capable missiles that can travel farther, and they are acquiring the technology to create their own components, set up production facilities and conduct test launches, U.S. officials say, with the apparent goal of being able to produce their own missiles in the future.”
Tyler Durden
Tue, 06/07/2022 – 19:05 - ANZ Bank Gives Transgender Staff 6 Weeks Of Paid Leave
ANZ Bank Gives Transgender Staff 6 Weeks Of Paid Leave
Authored by Nina Nguyen via The Epoch Times (emphasis ours),
The ANZ bank will allow transgender and gender-diverse staff in Australia and New Zealand to take six weeks of paid leave and up to 12 months of unpaid leave so that they could affirm their gender.
A woman walks past an ANZ Bank in Melbourne on October 28, 2021. (William West/AFP via Getty Images) The bank, which is Australia’s second-largest by assets with more than 40,000 staff globally, announced on Monday that the leave will benefit employees who are undergoing “any aspect of gender affirmation including social, medical, and legal gender affirmation.”
ANZ’s Diversity and Inclusion Lead, Fiona MacDonald, said the scheme was part of the bank’s ongoing commitment to the LGBTIQ+ movement and a step towards creating a more “inclusive culture.”
She said the move as “especially important,” while claiming that trans and gender diverse people “are more likely to experience lower incomes and employment rates.”
“The six weeks of paid leave means people who are affirming their gender do not need to exhaust their annual or sick leave entitlements, while also easing some of the financial pressures,” MacDonald said.
The big four banks said in a statement on Monday that an individual can affirm their gender identity in “many ways,” and the extended leave was meant to “recognise the process needs time and is not the same for everyone.”
According to ANZ’s press release, examples of social affirmation are changing of pronouns and/or names and adopting the clothing style that “better aligns with their gender identity”; medical affirmation includes surgery, hormone therapy, medical appointments, and recovery from medical procedures; and legal affirmation includes legally changing the name and/or gender marker on personal identification documents.
On its website, ANZ declares itself as “a leading employer for LGBTQ+ inclusion” which has claimed several titles by the Australian Workplace Equality Index, a framework that measures Australian businesses’ level of LGBTQ+ “workplace inclusion.”
The bank is a member of the Welcome Here Project by the government-funded LGBTIQ+ group the AIDS Council of NSW (ACON). Businesses participating in the project would need to display a rainbow sticker in a prominent place to demonstrate their support for the LGBTIQ+ cause.
ANZ, a signatory to the UN Standards of Conduct for Business Tackling Discrimination against LGBTIQ+ people, is a close partner with Sydney Gay and Lesbian Mardi Gras, Transgender Victoria and Intersex Human Rights Australia.
The move comes three weeks after Australian supermarket giant Coles announced it will allow trans and gender-diverse staff to take up to 10 days of paid gender affirmative leave.
David Brewster, Coles Chief Legal and Safety Officer and chair of the company’s Pride Steering Committee said in a statement released on May 19: “We know that we have at least 900 team members who identify as transgender or gender diverse.”
“We need to have proper policy and education in this area so there is clear guidance around taking leave for this important transition in their life.”
Tyler Durden
Tue, 06/07/2022 – 18:45 - "We're Closely Monitoring" – Did Yellen Just Signal Gold-Grab Over Russian Sanctions Loophole?
“We’re Closely Monitoring” – Did Yellen Just Signal Gold-Grab Over Russian Sanctions Loophole?
According to The IMF, Russia has around $132.26 billion of gold in its reserves, having cranked up its holdings dramatically as it de-dollarized from the USD (dumping all but a few of its US Treasury holdings in 2018)…
As with most central bank’s reserves, the actual amount and location of those gold reserves is generally unknown or expressly hidden from public purview. As Ronan Many previously noted, Putin’s tour of a gold vault in 2011 (11 years ago) and Russian reporters visiting a gold vault in 2018 (4 years ago) are great for optics and marketing – and the Bank of Russia has been very successful in this regard – but without some hard facts about bar numbers and locational details from the Russian government and Bank of Russia, we still don’t know the true state, size and location of the Russian Federation’s gold reserves.
Which is not surprising, since as Chris Powell of GATA has said in the past and will say again:
“the amounts, location, and disposition of government gold reserves are secrets more sensitive than the amounts, location, and disposition of nuclear weapons.
Indeed, under nuclear weapons control treaties, governments with nuclear weapons have often shared that sort of information, even with hostile powers. But gold reserve information is far more tightly held and most gold information provided officially is actually disinformation.
Why is it this way? It’s because gold is an even more powerful weapon than nukes — an alternative currency that is not necessarily under any government’s power; a determinant of the value of other currencies, interest rates, government bonds, and equities.“
Bringing us up to date, as we detailed previously, since the ruble collapsed under the strain of economic sanctions after Russia invaded Ukraine, the Russian people turned to gold to protect their wealth.
Sberbank ranks as Russia’s largest financial institution. It reported the demand for gold quadrupled during the first two weeks of March. Demand from the Russian citizenry was so strong, the Central Bank of Russia suspended its gold purchases from local banks so they could leave inventory for their customers.
Demand for silver, platinum and platinum were also strong.
On March 9, President Putin suspended the 20% VAT tax on precious metals. The move was designed to encourage people to buy gold instead of foreign currencies as the ruble collapsed.
“Currently, households’ demand for buying physical gold in bars has increased, driven, in particular, by the abolition of value-added tax on these operations,” the Central Bank of Russia said in a statement earlier this month.
According to Russian media, Sberbank Borrow and Save Division Director Sergei Shirokov said the bank’s clients are trying to protect their savings.
“Precious metals are a traditional defensive asset that helps to feel confident in any economic situation.
At the moment, our clients want to receive a physical guarantee of the safety of their savings, and bullion is an excellent tool for this.”
The Russian Ministry of Finance called gold an “ideal alternative” to the US dollar.
The sanctions (threats and actual) from the West have sparked a cottage-industry in creative methods for other nations to circumvent them in order to still receive critical energy and agriculture goods from Russia.
In late March, the chairman of Russia’s Congressional energy committee, Pavel Zavalny, said in a press conference that Russia was open to accepting bitcoin for its natural resources exports.
“When it comes to our ‘friendly’ countries, like China or Turkey, which don’t pressure us, then we have been offering them for a while to switch payments to national currencies, like rubles and yuan,” Zavalny said during the press conference.
“With Turkey, it can be lira and rubles. So there can be a variety of currencies, and that’s a standard practice. If they want bitcoin, we will trade in bitcoin.”
Much attention has been focused on Putin’s “Rubles-for-Gas” demands sending the Ruble soaring to multi-year highs relative to its fiat peers.
But in late May, the Interfax news agency quoted a government official saying that Russia is considering allowing cryptocurrency to be used for international payments
“The idea of using digital currencies in transactions for international settlements is being actively discussed,” Ivan Chebeskov, head of the finance ministry’s financial policy department, was quoted as saying.
Allowing crypto as a means of settlement for international trade would help counter the impact of Western sanctions, which has seen Russia’s access to traditional cross-border payment mechanisms “limited,” Chebeskov said.
All of which prompted Treasury Secretary Yellen to note in March that:
“I often hear cryptocurrency mentioned and that is a channel to be watched.”
Ms. Yellen added that many participants in cryptocurrency networks are subject to anti-money laundering and sanction rules.
“It’s not that that sector is completely one where things can be evaded,” she said.
“We will continue to look at how the sanctions work and evaluate whether or not there are leakages, and we have the possibility to address them,” Ms. Yellen said at an event at the University of Illinois Chicago.
But now things have escalated from ‘monitoring’ digital gold transaction to real gold.
As Reuters reports, the US Treasury Department has made clear that gold-related transactions involving Russia may be sanctioned, and is closely monitoring any efforts to circumvent U.S. sanctions through the use of gold, Treasury Secretary Janet Yellen said on Tuesday.
“This is an important matter,” Yellen told a Senate Finance Committee hearing on Treasury’s budget.
“We’re closely monitoring any efforts we can see to circumvent our Russia-related sanctions through the use of gold.”
Such transactions may be sanctionable under an executive order issued by President Biden to punish Russia for its invasion of Ukraine.
Notably, sanctions on gold reserves were proposed in March in an effort block Russia from selling any of its gold on international markets, in another step to “tightening the financial noose around Russia.”
One wonders, given the fungible nature (and relatively anonymous nature of transcations), how exactly Yellen and the US Treasury will contain any “leaks” around the sanctions due to gold (and somewhat similarly crypto – though that is more traceable).
Is Yellen inching closer to the threat of ‘confiscation’ of gold? They have already hinted at ‘freezing’ gold holdings.
It happened before…
Can it really happen again?
Tyler Durden
Tue, 06/07/2022 – 18:25 - 10 Under-Reported Revelations From Trial Of Former Clinton Lawyer
10 Under-Reported Revelations From Trial Of Former Clinton Lawyer
Authored by Zachary Stieber via The Epoch Times,
While former Hillary Clinton campaign lawyer Michael Sussmann was acquitted of lying to the FBI, a number of new details came to light during his trial. Some haven’t been made known or been widely reported.
1. FBI Lawyer Sussmann Met With Sought Perkins Coie Job
Sussmann passed along claims about Clinton presidential rival Donald Trump to FBI lawyer James Baker on Sept. 19, 2016, as well as data that supposedly supported the claims.
Baker gave the information to others in the bureau, triggering an investigation. The FBI and CIA both determined the claims were unsupported.
Baker, while testifying during the trial, described Sussmann as a friend whom he met when both worked for the Department of Justice (DOJ), the FBI’s parent agency. Baker, who left the bureau in May 2018, revealed that he was seeking to work for Perkins Coie, the firm that employed Sussmann, soon after.
“To the best of my recollection, I think it was Michael’s idea,” Baker said. “I mean, Michael knew that I had left the bureau, and I was looking around for a job—I had a job at the time, so I was working—I was working at the time, but I was looking around at other jobs, including [at] law firms. And so somehow he became aware of that and inquired about whether I would be interested in working at Perkins Coie.”
In one of many text messages the men exchanged before and after the meeting, Sussmann told Baker on Sept. 29, 2018, that it was “great seeing you this week.” That was a reference to a meeting that involved discussing a job at Perkins Coie, according to Baker.
While Sussmann arranged interviews for Baker, Perkins Coie never made a job offer.
Baker described “a miscommunication” in which a headhunter he was working with told him that the firm had essentially rejected him. But when Baker conveyed the message to Sussmann, Sussmann “went and got it sorted out,” Baker said, adding that the firm was actually considering offering him a job. Baker, however, ended up taking jobs at the think tank R Street Institute and CNN. He left those positions to work at Twitter, where he’s currently employed.
2. Joffe Was an FBI Source, and Was Fired
The information that Sussmann took to the FBI was obtained by Rodney Joffe, among others. Joffe was a technology executive at Neustar who was one of Sussmann’s clients.
Joffe was a confidential human source (CHS) for the bureau for years, it was revealed during the trial. He had regularly helped the bureau on cybersecurity matters and was even recommended for an FBI award in 2013.
But Joffe was terminated, apparently because of his actions in 2016. He was “closed for cause as a source,” prosecutor Deborah Brittain Shaw said.
“Our understanding is that Mr. Joffe was terminated as a source for cause in 2021 as an outgrowth of this investigation,” Michael Bosworth, a defense lawyer, added later.
The defense successfully got U.S. District Judge Christopher Cooper, an Obama appointee, to order prosecutors not to reference Joffe’s status again, after they claimed it was “prejudicial to explore or elicit further testimony about his termination, given that it happened so late and was connected to this case.”
Bosworth called Joffe “one of the world’s leading cyber experts” during opening arguments.
Joffe “exploited his access” to non-public data from Trump Tower, Trump’s apartment in New York, and the White House to compile the data Sussmann eventually took to the FBI, according to prosecutors. Joffe could still be charged with crimes, prosecutors have indicated. He wasn’t called as a witness because he was going to refuse to answer questions, since he’s still under investigation.
3. ‘Tea Leaves’ Was April Lorenzen
The group that gathered the data that Sussmann presented to the FBI also included April Lorenzen, a data analyst at a firm called ZETAlytics.
It was known that a person in the group went online and posted some of the information under the moniker “Tea Leaves.” The posts were made in October 2016, shortly after Sussmann met with Baker.
But the identity of the person wasn’t confirmed until the trial, during which Bosworth said it was Lorenzen.
Bosworth was questioning FBI agent Ryan Gaynor, who monitored the investigation into the Trump–Russia claims from Washington on behalf of FBI leadership.
Gaynor acknowledged that, as far as he knew, nobody had tried to contact the person who posted the information online pseudonymously.
“And are you aware that, if they had done so, they would have discovered that the person posting was another cyber expert named April Lorenzen?” Bosworth asked.
“I am not,” Gaynor said.
Slate magazine, which was one of the first outlets to publish an article about the Trump–Alfa Bank claims, described “Tea Leaves” as a male, as did The Intercept.
“Tea Leaves” was mentioned in Sussmann’s indictment, which also described the person “Originator-1.” According to the indictment, “Tea Leaves” was a business associate of “Tech Executive-1,” who has long been known as Joffe.
Jared Novick, who conducted research for Joffe on Trump associates such as Carter Page, said on the stand that Joffe “had involvement in” a number of companies, including ZETAlytics. Joffe previously refused to answer questions about the businesses he owned or was otherwise affiliated with during a deposition for a lawsuit filed by Alfa Bank.
Rodney Joffe, left, launching Littoral Ventures with others, including April Lorenzen, second from right, the CEO of ZETAlytics. (DOJ via The Epoch Times)
4. Multi-Pronged Effort to Seed Allegations
Lorenzen posted the data on a WordPress blog. One or more members of the group also reportedly took to Reddit to share the data, and Joffe directed Sussmann to go to the FBI with the claims, Sussmann indicated in previous testimony before Congress.
Separately, Joffe approached an FBI agent named Tom Grasso with several IP addresses that were purportedly linked to Alfa Bank, the Russian bank that Joffe’s group claimed had a secret backchannel with Trump’s business.
Grasso said on the stand that he’d been working with Joffe for years, even though he wasn’t Joffe’s handler. He also said the situation was “unusual” because “it concerned a matter that I normally did not work on with Mr. Joffe.”
“Most of the stuff I worked on Mr. Joffe with was cyber crime matters, and this was in the area of Russia and foreign influence and counterintelligence and things like that, which is why I quickly passed it off to who I thought were the people working that matter,” Grasso testified.
Grasso didn’t reveal Joffe was a CHS in passing along the information to others in the bureau. Instead, he described Joffe as an “anonymous reporter.”
During closing arguments, prosecutor Andrew DeFilippis said: “This is Mr. Joffe trying to put these politically charged allegations into another part of the FBI in order to create the appearance of two different streams of information. And that makes sense with the broader plan that was at work here. They were trying to hide origins, hide the involvement of clients in order to get the FBI to investigate.”
Another aspect of the effort involved promoting the allegations to the media. Sussmann, operatives with Fusion GPS, and at least one Clinton campaign staffer shared the data with reporters to try to get stories written. That plan was approved by Clinton herself, campaign manager Robby Mook said on the stand. Among the reporters was Mark Hosenball of Reuters, who emails show was in contact with Fusion operatives. Hosenball went to the FBI to ask about the “Tea Leaves” post.
5. Clinton Lawyers Met Regularly With Fusion
Marc Elias, another lawyer with Perkins Coie, served as the Clinton campaign’s counsel after Clinton won the Democratic primary. He hired Fusion to perform opposition research and to help him with legal services. Fusion is the firm that compiled the infamous anti-Trump dossier with the help of former British spy Christopher Steele.
Elias was known to have met multiple times with Fusion co-founders Peter Fritsch and Glenn Simpson ahead of the election. But during the trial, documents entered by the prosecution show the trio convened regularly, and that Debbie Fine, a top lawyer with the campaign, was part of the meetings.
One document, titled “Daily Check in,” shows that meetings were scheduled every weekday for 30 minutes from June 6 until Oct. 31, 2016. Another shows a meeting of the quartet on Aug. 12 for its daily check-in. A third shows a meeting on Aug. 17.
Fine said on the stand that she communicated with Fusion operatives on average several times a week.
Fine didn’t recall daily check-ins. She said that as far as she knew, only she and Elias were aware of Fusion doing research, but she didn’t know why others weren’t aware.
“I operated on the assumption that, like most of the work that I did for clients, it’s on a need-to-know basis, so I just—I didn’t share it, and I wasn’t told not to share it. And I don’t know whether or not Marc Elias shared it with anyone,” she said.
Fine also said she didn’t recall discussions about Alfa Bank. Presented with an email she asked Elias to print in October 2016, she said the email was about the Trump–Alfa Bank allegations, as laid out in the Slate article.
Elias previously told a congressional panel that Fusion was “acting as my agents” and that he met with the operatives on a weekly basis.
Other documents entered during the trial showed that Elias met with Joffe in his office and spoke with him by phone, and that Elias sent an article related to Alfa Bank to top campaign officials, including campaign chair John Podesta, four days before Sussmann went to the FBI.
6. FBI Leaders Were Excited About Probe
Then-FBI Director James Comey was “fired up” about the Trump–Alfa Bank allegations, according to internal messages entered into evidence.
Comey was interested in the case, another agent wrote.
The decision to open an investigation was made by senior officials.
Joseph Pientka, an FBI official, wrote in a message that the Chicago team “must” open a case because Bill Priestap, another official, “says its [sic] not an option—we must do it.”
The case was opened later that day.
FBI leadership kept tabs on the probe, mainly through Gaynor, who volunteered to monitor it from Washington.
Senior FBI leaders imposed a “close hold” on the material, “which meant that the specific information about who had provided the allegation could not be provided to the field,” Gaynor testified during the trial. Leaders were also said to be behind efforts to stonewall agents who asked to interview the source.
“When we said that we were interested in interviewing the—when I say ‘the source,’ I mean the author of the white paper or the source of the data—I don’t know if that’s different people or not—but wherever it came from,” said Allison Sands, the FBI agent who was in charge of investigating the claims.
But leadership communicated that “we should, at the division level, focus on the technical analysis,” she added.
Headquarters “was not giving us the ability to go interview these people,” Curtis Heide, another agent working the case, recounted. He said he was frustrated.
Agents said that it’s important to know about sources’ political biases, such as Sussmann representing the Democratic National Committee and the Clinton campaign.
Gaynor acknowledged he had been under investigation for violating the hold during an interview with employees of the DOJ inspector general’s office during a 2020 meeting. He said he was “woefully ill prepared” for the meeting. He believes he’s no longer under investigation.
Former FBI Director James Comey speaks via a TV monitor during a hearing on Capitol Hill in Washington on Sept. 30, 2020. (Stefani Reynolds/Pool/Getty Images)
7. Multiple Offices Worked on Investigation
Baker was based in Washington at the FBI’s headquarters. Gaynor monitored the investigation into the claims from Washington. Cyber experts in Chantilly, Virginia, initially analyzed the data, then passed the probe to a hybrid cyber-counterintelligence team in Chicago.
At least one agent based in Miami worked on the case, interviewing Central Dynamics, the company to which the Trump email domain was registered, while another agent or agents in Philadelphia handled interviews at Listrak, another company.
Grasso was based in Pittsburgh.
“It looks like the clearing house in London” received the same white paper as the one given to Baker, or a similar one, Sands wrote in a message on Oct. 4, 2016.
8. FBI Took Months to Close Investigation
A full investigation into the Trump–Russia claims was opened on Sept. 23, 2016. The probe wasn’t officially closed until Jan. 18, 2017.
FBI experts deemed the allegations likely false within a day. The team that did additional work in looking into the claims, which included contacting entities like Central Dynamics had come to a similar conclusion by Oct. 5, 2016.
The delay in closing the probe stemmed from not being able to figure out who handed over the thumb drives that contained the data, according to Sands.
The drives were serialized as 1b, which is digital evidence. When the bureau closes cases, it has to return items taken in the course of an investigation to their rightful owner.
“Well, in this case, we didn’t know who the owner of the thumb drives was, because James Baker wasn’t the owner,” Sands said. “He was like a middleman or something. He had given them to us, but we didn’t know who the thumb drives belonged to.”
The team moved to initiate an “abandonment hearing,” which would enable them to destroy the drives. However, because that involved layers of bureaucracy, Sands’s supervisor recommended reserializing the drives as 1a, which refers to anything an agent wants to have in a case file but isn’t necessarily evidence. She cited notes taken in an interview as an example.
The reclassification allowed the FBI to close the investigation. That means it was closed when CNN reported, citing anonymous sources, in March 2017 that it was still being investigated.
9. Paperwork Had ‘Mistakes’
The document memorializing the opening of the investigation said the DOJ referred the allegations to the FBI. So did the closing document.
Heide referred to both as “mistakes,” or “typos.” He said the team had apparently conflated the FBI’s office of general counsel with the DOJ.
That wasn’t the only problem with files related to the probe.
The closing document said that the was a “preliminary” inquiry as opposed to a “full” investigation.
“That’s a typo as well,” Heide said.
Heide said he was alerted to the issues for the first time in 2018 by the DOJ’s Office of the Inspector General.
“I believe they brought it to my attention and asked me if it was accurate, and my response was the same, that I don’t believe it was accurate,” he said.
10. Investigation Into Crossfire Hurricane Continues
Special counsel John Durham’s team, which prosecuted Sussmann, is investigating the origins of the government’s counterintelligence probes into alleged Trump and Russia links. Many of the probes utilized information paid for by the Clinton campaign.
The FBI is also conducting its own inquiry into the probes, collectively known as Crossfire Hurricane, Heide said on the stand.
“And are you being investigated individually as part of that investigation?” a prosecutor asked.
“Yes. Myself and, I believe, others as well,” Heide said.
Heide is being investigated for “not identifying exculpatory information as it pertained to one of the Crossfire Hurricane investigations,” he added later. “There were various consensual recordings that were obtained from one of the subjects, and there were statements, I believe, used in a FISA application that were—the exculpatory information was not divulged to the FISA court”—the secretive court authorized by the Foreign Intelligence Surveillance Act.
A previous watchdog probe found the FBI committed “significant” errors and omissions in all four of the applications made to the court to spy on Page. The most significant may have been how an FBI lawyer, Kevin Clinesmith, doctored an email to state that Page wasn’t a CIA asset when, in fact, he was. Clinesmith pleaded guilty to a charge stemming from Durham’s probe and received probation.
Heide, during testimony, denied that he withheld exculpatory information from the court.
Heide, who is still with the FBI operating out of Des Moines, Iowa, worked on both Crossfire Hurricane and the Mid-Year Exam, or the bureau’s investigation into Clinton’s use while secretary of state of a private email server to send classified emails.
Tyler Durden
Tue, 06/07/2022 – 18:05 - As White House Continues To Push Jabs For Kids, FL Surgeon General Questions Safety
As White House Continues To Push Jabs For Kids, FL Surgeon General Questions Safety
As we’ve noted for some time, Covid-19 vaccines have limited efficacy vs. the dominant (and thankfully more mild) strain, Omicron – with CDC researchers finding in one study that Pfizer’s jab was just 20% effective against symptomatic illness after 60 days for those aged 12-15 years old, and 0% effective after five months.
One Danish study from the University of Copenhagen found that Omicron actually spreads faster in vaccinated individuals vs Delta, the previous dominant strain.
When it comes to who Omicron is killing (or ‘involved’ in killing), one UK study that looked at 814,011 cases found just 128 deaths (0.00057%), of which 42 were aged 18-59 years-old, and zero deaths under the age of 18.
Yet, despite clear and convincing evidence that Omicron is mild compared to its predecessor strains, the Biden administration continues to peddle fear.
As Stanford health policy professor
In a May 30 tweet, Dr. Jha asserted that Covid is “a far greater threat to kids than the flu is.” He linked to an article by Harvard Medical School instructor Jeremy Faust, which claims that Covid killed more than 600 children in 2021, whereas the flu kills “an average” of only 120 children annually.
Great figure by @jeremyfaust says it all
COVID is a far greater threat to kids than flu is
And you know what dramatically lowers risk and keeps kids out of the hospital?
Vaccines
If your kid 5 or older isn’t vaccinated, its time
Full article: https://t.co/r2gNeXkNx0 pic.twitter.com/7goa03DYVE
— Ashish K. Jha, MD, MPH (@AshishKJha46) May 31, 2022
Bhattacharya demolishes Faust’s argument – noting: “Faust’s data are severely skewed, for three reasons.”
First, while flu is seldom tested, everyone admitted to a hospital for any reason gets a Covid test. Between October 2018 and September 2019, 1.4 million flu tests were reported to public-health and clinical labs. As of May 31, 2022, there had been 897 million PCR tests for Covid.
Second, evidence from audits of death certificates found that 35% of all pediatric deaths in 2020 “had co-occurring diagnosis codes that could not be plausibly categorized as either a chain-of-event or significant contributing condition,” according to a study published by the Centers for Disease Control and Prevention. Put another way, in at least 35% of pediatric “Covid deaths,” Covid couldn’t have been the cause.
Third, Dr. Faust relies on a figure for confirmed flu deaths that is well-known to underestimate actual flu deaths by an order of magnitude. Correcting for the lack of flu testing, the National Center for Immunization and Respiratory Diseases estimated 1,161 pediatric flu deaths in the 2012-13 season rather than the 142 that Dr. Faust reported. -WSJ
He then slams the Biden administration for “eroding public confidence” and undermining public health by lying about the Covid risk for children, and points out that “There are far greater risks to children than Covid. Since March 2020, more than 1,000 kids have died with Covid (an average of around 38 a month), according to the CDC. In the same period more than 1,400 children died from drug- and alcohol-related causes.”
Then there’s Florida
On Friday, state Surgeon General Joseph Ladapo openly questioned the safety of Covid-19 vaccines. During a press conference to announce an agreement with the Special Olympics to lift a vaccine mandate, the Florida Department of Health boss said: “People will say oh, you know, millions of people have taken these vaccines, they must be safe,” adding “Well, you can’t know the answer to that when it is taboo to talk about having a reaction after vaccines.“
He also suggested that the vaccine has produced more side effects than others, such as flu shots, according to Florida Politics.
“There’s another vaccine that over 100 million Americans take every year, and it’s the influenza vaccine, he said, adding “And the stream of adverse events that I’ve heard from people all over this country after these vaccines is nothing like the years of my life when I’ve been in medicine and have been administering the influenza vaccines. There is a difference, and you can’t say that millions of people getting it excuses you from that.”
Regarding vaccine mandates, he said those make no sense based on what science now shows about this coronavirus and about vaccines in use now.
“Scientifically, it makes zero sense,” Ladapo said. “How can you force people to take a vaccine in order to stop transmission when that vaccine is not effective at stopping transmission?” -Florida Politics
The CDC, of course, insists that the vaccine is still better than nothing, saying in a statement that “Data show fully vaccinated persons are less likely than unvaccinated persons to acquire SARS-CoV-2, and infections with the delta variant in fully vaccinated persons are associated with less severe clinical outcomes.”
Of course, they aren’t exactly breaking it down by age and comorbidity, are they?
Tyler Durden
Tue, 06/07/2022 – 17:45 - How Brazil Is Saving The World From A Catastrophic Food Crisis
How Brazil Is Saving The World From A Catastrophic Food Crisis
Authored by Augusto Zimmermann via The Epoch Times,
Brazil is the fourth-largest producer of food in the world. The country is entirely self-sufficient in basic foodstuffs, and it ranks as the world’s number one producer of banana, cacao, cassava, coffee, corn, maize, rice, soybean, and sugar. Although the bulk of these products are consumed domestically, a considerable part is also exported, including oranges, palm oils, garlic, peanuts, tea, etc.
But Brazil needs a steady supply of fertilizers to power its mighty agricultural industry. The country’s largest international supplier of fertilizers is Russia, which accounts for 44 percent of the total Brazil consumes each year.
Since the war in Ukraine began, Brazil’s President Jair Bolsonaro said his country would remain neutral. He met with Russia’s President Vladimir Putin in Moscow on Feb. 16, and on the occasion, President Bolsonaro stated: “We are eager to cooperate [with Russia] in various fields. Defence, oil and gas, agriculture. Brazil stands in solidarity with Russia.”
As one may expect, this visit to Russia was heavily criticized by the U.S. government because it took place in the midst of Western tensions with Russia over Ukraine. However, Bolsonaro did not back down.
Brazil’s President Jair Bolsonaro speaks during a ceremony at the Planalto Palace in Brasilia, Brazil, on May 25, 2022. (Sergio Lima/AFP via Getty Images)
The Amazon is a huge bank of endless natural resources for Brazilians. It has the most significant percentage of sweet water, valuable minerals, and petroleum globally. It is no wonder the global elites are appealing to environmental issues in an attempt to undermine Brazil’s sovereignty over the region. In reality, environmentally protected areas in Brazil amount to an impressive 25 percent of its entire territory—50 percent in the Amazon alone. However, we are constantly witnessing a misinformation campaign about the deforestation of the Amazon.
On the other hand, it is also true that Brazil still needs to import 97 percent of the roughly 10 million tonnes of potassium it uses for crop production each year, making it the world’s largest importer. So, the fundamental question is: Where could Brazil find more fertilizers from?
The potassium reserves in Brazil are mainly on its Indigenous lands in the Amazon region. According to Márcio Remédio, director of the Geological Survey of Brazil, a state-owned company under the Ministry of Mines and Energy, “These reserves are world-class. They have the potential, if not more, than those in the Ural Mountains produced by Russia and Belarus, and also of Saskatchewan in Canada.”
In Brazilian Indigenous lands, only 3 percent of all these lands are deforested, a rate lower than on government and private lands. The Brazilian Constitution defines as Indigenous lands those traditionally occupied by Brazilian Indians, as well as “those used for their productive activities, those indispensable to the preservation of the environmental resources necessary for their well-being and for their physical and cultural reproduction, according to their uses, customs and traditions.” This description is so broad that an eminent constitutional law professor, Manoel G. Ferreira Filho, quipped that it would be easier if the Constitution had defined which land non-Indians could occupy.
Federal law in Brazil authorizes the exploration of mineral riches in the Indigenous lands. A share of the profit must be transferred to the relevant Indigenous community occupying the region, which cannot be removed from the land except in the extraordinary cases of catastrophe or epidemic. Even so, these Indians preserve the right to return to the land as soon as the risks cease.
A tractor sprays stone dust in a field next to a pile of stone dust at the Vargem Dourada farm in Padre Bernardo, Goias State, Brazil, on May 19, 2022. (Evaristo Sa/AFP via Getty Images)
By making an agreement with Russia, Brazil has prevented potassium mining that could harm the Amazon and infringe on Indigenous rights and potentially saved the world from a catastrophic food crisis.
“If Brazil were to scale back next year because of a lack of fertilizer, that would certainly be bad news for a global food crisis,” says Joseph Schmidhuber, an economist who has studied the conflict’s impact on food for the United Nations’ Food and Agriculture Organisation.
The war in Ukraine, coupled with the West’s economic sanctions, have put the world’s food security at tremendous risk. These sanctions were meant to punish Russia for its invasion of Ukraine, but they are causing a serious danger to the world’s ability to feed itself.
In this sense, the Brazilian government has recently submitted to the United Nations’ Food and Agriculture Organisation an critical proposal excluding fertilizer products from any sanctions imposed on Russia. Brazil’s Agriculture Minister Tereza Cristina Dias has called on countries to find an international solution to the issue, noting that a shortage of fertilizers would provoke “food inflation and potentially undermine food security.”
To conclude, not only has the Brazilian government avoided a food crisis by replenishing the country’s stockpiles with the help of Russia, but it has also been playing a leading role in seeking international solutions to an emerging food emergency crisis that, in the worst scenario, could see millions of people dying from starvation, especially in the poorer countries.
That so being, the world should hope that President Jair Bolsonaro is duly re-elected by the Brazilians in the forthcoming presidential elections in October this year.
Tyler Durden
Tue, 06/07/2022 – 17:25 - Bitcoin Soars Back From Overnight Plunge As Citadel, Virtu Signal HFT Move To Crypto
Bitcoin Soars Back From Overnight Plunge As Citadel, Virtu Signal HFT Move To Crypto
So now we know what Plan B was for the giant HFT shops…
Just hours after the SEC leaked plans to The WSJ that the regulator is preparing to propose unprecedented changes to market structure as soon as this fall which would make it virtually impossible to frontrun retail orders, sending shares of Virtu tumbling, Coindesk reports that Citadel and Virtu are building a cryptocurrency trading platform along with retail brokerages Fidelity and Charles Schwab.
According to Coindesk, work on a “cryptocurrency trading ecosystem” is aimed at creating more efficient access to deep pools of liquidity for digital assets, the source told the online publication.
The firms in Citadel Securities’ initial consortium will be joined by additional wealth managers, market makers, and other industry leaders who are expected to join the marketplace before it launches.
Citadel Securities had been “quietly hiring executives” to build out a crypto trading stack, a second source told CoinDesk.
“This marketplace is intended to create more efficient access to deep pools of liquidity for digital assets. So a group of industry leaders are working closely together to facilitate the safe, clean, compliant and secure trading of digital assets,” the source told CoinDesk.
Bloomberg reports that Susan Coburn, a spokeswoman for Fidelity, said the company “supports efforts within the industry that provide optionality to source liquidity for our clients.”
Schwab “has made a minority, passive strategic investment in a new digital asset venture,” spokeswoman Mayura Hooper said in an emailed statement.
“We know there is significant interest in this cryptocurrency space and we will look to invest in firms and technologies working to offer access with a strong regulatory focus and in a secure environment.”
Additionally, earlier in the day, Citadel confirmed its commitment to crypto as it noted that if regulators allow it, the company is willing to make markets in ETFs that hold cryptocurrencies.
“We will be ready if and when those products are approved, but we are taking a measured approach,” Kelly Brennan, head of the firm’s ETF group, said in an interview at Bloomberg’s headquarters in New York, adding that the firm can’t provide liquidity until regulatory issues are resolved.
“We get a huge volume of calls about spot Bitcoin ETFs, but they are all from prospective issuers,” said Cory Laing, head of Delta-One sales at Citadel Securities. “The calls are not coming from clients.”
Customers who want to be in crypto are finding ways, according to Laing.
“They aren’t waiting for a nice packaged product,” he said.
If a spot Bitcoin ETF gets approval, Laing anticipates that demand will follow.
As a reminder, Griffin told Bloomberg earlier this year he had changed his anti-cryptocurrency stance and that it was possible his firm would get into market-making for digital assets.
“Crypto has been one of the great, great stories in finance over the course of roughly the last 15 years and, I’ll be clear, I’ve been in the naysayer camp over that 15-year period.”.
The reaction to this news was self-evident as overnight weakness in Asia was eviscerated with a mirror-image buying-panic…
One reason for this renewed bullishness is self-evident.
Growth in the partnership between the price-makers (Virtu and Citadel) and price-takers (the clients of Schwab and Fidelity) relies on ‘roping in’ more and more retail traders whose orders will be potentially ‘front-run’ (allegedly), since liquidity and trading volumes have collapsed as crypto prices have dropped. And what drags retail kicking-and-screaming back into Bitcoin and Ethereum better than a rip-snorting rally where ‘all your friends’ on Twitter or TikTok are “killing it” again.
Tyler Durden
Tue, 06/07/2022 – 17:05
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