Aug 09

Today’s News 9th August 2022

  • Russia Suspends US Inspections Of Its Nuclear Arsenal Under New START Treaty
    Russia Suspends US Inspections Of Its Nuclear Arsenal Under New START Treaty

    While the world is creeping closer toward a DefCon 1 exchange with every passing day, should Russia launch tomorrow there will be no way of knowing just how many warheads and ICBMs Putin is letting loose (not that he needs all that many). The reason is because on Monday, Russia informed the US that it is temporarily suspending American inspections of its nuclear weapons sites under the 2010 Treaty on Measures for the Further Reduction and Limitation of Strategic Offensive Arms (New START).

    “On August 8, 2022, the Russian Federation officially informed the United States via diplomatic channels that our country is temporarily exempting its facilities from inspection activities under the New START Treaty,” the Russian Foreign Ministry said in a statement, adding it also covers “facilities that can be used for demonstrations under the treaty.”

    According to Anadolu, the statement stressed that the measures had a “temporary character” but everyone knows there is nothing more permanent in this world than a “temporary” government mandate.

    It added that the exemptions would be immediately canceled in case of a “resolution of the existing problems and issues regarding the resumption of inspection activities under the treaty.”

    The first Strategic Arms Reduction Treaty, START I, was signed in 1991 between the US and the USSR at a time when there were many thousands of nuclear warheads and took effect in 1994.

    In 2010, former US President Barack Obama and former Russian President Dmitry Medvedev signed a successor agreement called New START which set a limit of no more than 1,550 deployed warheads and 700 missiles, including inspections to verify compliance with the deal.

    Days before it was set to expire on Feb. 5, 2021, the two countries agreed to extend it for another five years.

    Russia’s obfuscating move harkens to the depths of the cold war when every Russian nuclear move was shrouded in secrecy, and clearly what this means is that it’s time for a Spies like Us sequel.

    Tyler Durden
    Tue, 08/09/2022 – 02:15

  • France Looks To Keep Nuclear Power Plants Running Despite Heatwave
    France Looks To Keep Nuclear Power Plants Running Despite Heatwave

    By Tsvetana Paraskova of OilPrice.com

    French authorities have allowed five nuclear power plants in France to continue operations and discharge hot water in rivers even during another heatwave as the country looks to keep its electricity generation stable and conserve natural gas for the coming winter.

    Power giant EDF has warned that it might have to reduce nuclear power generation this summer because of environmental regulations as the water levels of rivers are low and water temperatures high. Water from rivers is typically used to cool reactors, while environmental regulations usually set limits on nuclear power output because hot water re-entering rivers could endanger the local flora and fauna.

    However, under exceptional circumstances this year, the French nuclear energy regulator, ASN, said on Monday that it is temporarily changing the rules on hot water discharge at the nuclear power plants Blayais, Bugey, Golfech, Saint-Alban, and Tricastin.

    The regulator thus prolonged the waivers for those plants, considering that the government has requested that nuclear power generation be maintained at as high levels as possible, in view of preserving gas and hydropower for the autumn and the winter, ASN said.

    France’s EDF has warned for weeks that nuclear power generation in France would be reduced as high temperatures of rivers Rhone and Garonne make them too hot to cool reactors.  

    France has had issues with its nuclear power generation this year, which has reduced the available electricity supply in France and Europe and sent French power prices for next year surging. Half of all reactors EDF is operating are currently offline for planned maintenance or repairs.

    France’s nuclear power generation accounts for around 70 percent of its electricity mix, and when its reactors are fully operational, it is a net exporter of electricity to other European countries. Prolonged maintenance at several nuclear reactors this year, however, means that France—and the rest of Europe—have less nuclear-generated power supply now.   

    Tyler Durden
    Tue, 08/09/2022 – 01:30

  • Marko Kolanovic Says It's Time To Shift Away From Stocks To Commodities
    Marko Kolanovic Says It’s Time To Shift Away From Stocks To Commodities

    Heading into August, we had over 7 full months where every. single. week, JPM’s equivalent of Goldman’s Abby Joseph Cohen, the resident in-house permabull  (and one time value-added quant) Marko Kolanovic, would tell the bank’s sellside clients to just keep buying stocks no matter how much the market crashed the day, week or month before… or was about to crash. We even charted it two months ago, showing his weekly invocations to what was left of JPM clients with actual disposable income, to buy stocks.

    And yet, try as hard as he might to influence market sentiment – an ability he lost long ago when he traded in the bloomberg for the corner office – Marko’s weekly sermons from the latest market dip failed to have any impact. In fact, some joked that for stocks to turn higher, Marko would have to finally turn bearish.

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    All joking aside though, stocks are finally screeching higher and – guess what – Marko, or mARKo as he is also known, has just turned ever so slightly bearish.

    In a note published on Monday, Kolanovic – while still a bull – has become less bullish writing that “given diminishing risks of a more negative shift in behaviour, low positioning in risky assets and widespread negativity in sentiment, as well as robust nominal GDP and revenue growth, risky assets have seen a recovery” and as a result “with commodities lagging other risky assets, we shift some of our risk allocation from equities to commodities.“

    As a result, the team’s overall overweight recommendation on risky assets stays the same. They also remain underweight fixed income and cash.

    As Bloomberg notes, “telling clients to cut back on stocks is a notable shift for Kolanovic, voted the No. 1 equity-linked strategist in last year’s Institutional Investor survey.” Well sure, just look at the top chart where every green arrow indicates a time when Marko said to buy, buy the dip, or buy the rip. Far from having any market timing skills, the Croatian’s strategy is to hope he is like the broken clock and be right at least twice in 2022… supposedly that will offset all those other times he was wrong.

    Then said, since Marko is if not genetically then certainly contractually incapable of being openly bearish, his gentle shift away from raging permabull, doesn’t mean that he expects stocks will actually fall. Far from it: the JPMorgan strategist – as always – sees equities rising through year-end, bolstered by robust corporate earnings. Yet with commodities weakening of late, the strategists view it as a chance to pounce. Oh and it’s really a CYA type of note, one where if stocks surge Marko can say “i told you so“, and if stocks plunge Marko can say “I told you to rotate out of stocks.” He’ll just never tell you when to sell ahead of the next bear market.

    Tyler Durden
    Mon, 08/08/2022 – 23:00

  • "We Can't Let Them Do This": Taibbi Talks With Russell Brand
    “We Can’t Let Them Do This”: Taibbi Talks With Russell Brand

    Authored by Matt Taibbi via TK News,

    Had a long, enjoyable discussion with the inestimable Russell Brand last week, part of which is shown in his free preview above. It’s been amazing to watch his show expand since we last spoke, a testament to many things I think, two in particular. He obviously has unique wit and enviable communications skills, which can take anyone far in a YouTube-driven media landscape, but his secret sauce is the easy, accepting vibe of his politics. When talking about issues he focuses on whether he finds humility, honesty, or joyfulness in the picture and celebrates accordingly, but if he finds nothing but meanness and narrowness, he just makes a note of it and moves on.

    The old, dead measuring sticks of left and right are mostly left behind, and you don’t miss them. The sheer cheerfulness of his show has made it difficult for critics to pigeonhole him as any kind of reactionary, and the ballooning growth of his following is an amusing poke in the eye of traditional media that still tries to corral audiences with fear and division, a strategy that’s not just wrong but has a built-in ceiling.

    We talk a little about censorship here, but the full discussion ranged all over. If and when that’s posted, I’ll let you know. You can find his podcast, Under My Skin, here.

    Tyler Durden
    Mon, 08/08/2022 – 22:30

  • Dalio's US-China Conflict Gauge Is Off The Charts
    Dalio’s US-China Conflict Gauge Is Off The Charts

    By Ye Xie Bloomberg Markets Live commentator and reporter

    Ray Dalio’s take on US-China tensions over Taiwan contains some alarming warnings.

    While the founder of the world’s largest hedge fund wrote that an all-out war is still considered “improbable,” a gauge he uses to track the conflict between the two countries has surged to a record and is comparable to previous major wars. He warned that the tit-for-tat escalation could easily get out of control, as has often happened in history.

    As far as markets are concerned, the fallout from US House Speaker Nancy Pelosi’s visit to Taiwan appears to be more noise than signal. But for Bridgewater Associates’s Dalio, the “fourth Taiwan Straits crisis” is not something to be taken lightly, and the situation is “very similar” to the environment immediately prior to the two world wars.

    That’s the message from his gauge of US-China conflict, which is composed of indicators such as changes in military spending and the views of people in each country toward the other, according to an essay published Monday. The current reading is nearly 1.2 standard deviations above average, in the high end of the range of major conflicts.

    Source: Ray Dalio, Bridgewater Associates

    Dalio isn’t predicting that a war is inevitable. In fact, he thinks an all-out confrontation is unlikely, at least for now. Yet, the risk is an eye-for-an-eye escalation of tensions as we witnessed during the trade war in the Trump era.

    Source: Ray Dalio, Bridgewater Associates

    From Dalio:

    Pelosi’s visit was perceived by China as a move in favor of Taiwan’s independence, rather than toward one China with Taiwan part of China, and it is essentially challenging the US to stop it from doing what it is doing. The question is whether the US will respond with another escalation that will prompt another Chinese response, in the classic tit-for-tat acceleration into war, or if the sides will step back.

    Even though the US fighting to defend Taiwan would seem to be illogical, not fighting a Chinese attack on Taiwan might be perceived as being a big loss of stature and power over other countries that won’t support the US, if it doesn’t fight and win for its allies. Additionally, such defeats can make leaders look weak to their own people, which can cost them the political support they need to remain in power.

    An all-out confrontation between the two superpowers would have a much larger global impact than the Russia-Ukraine war. All we can do is hope it doesn’t come to that. Yet, as Dalio said, hope is not a strategy.

    Tyler Durden
    Mon, 08/08/2022 – 22:02

  • Cruz To 'Wait And See' Whether Trump Runs In 2024 Before Deciding On White House Bid
    Cruz To ‘Wait And See’ Whether Trump Runs In 2024 Before Deciding On White House Bid

    Authored by Frank Fang via The Epoch Times (emphasis ours),

    Sen. Ted Cruz (R-Texas) speaks at the Conservative Political Action Conference held at the Hilton Anatole in Dallas, Texas, on Aug. 5, 2022. (Brandon Bell/Getty Images)

    Sen. Ted Cruz (R-Texas) said he, like everyone else, is going to “wait and see” whether former President Donald Trump is going to run in 2024, before making his own decision about a possible bid for the White House.

    “Everyone is going to wait and see what Donald Trump decides and make decisions from there,” Cruz told Fox News on Aug. 5 at the Conservative Political Action Conference (CPAC) in Dallas, Texas.

    “I am grateful for his leadership,” Cruz continued. “He’s going to decide what he wants to do. And frankly, he’s going to decide on his own timeframe.”

    “He’s going to decide when he damn well wants to, and the rest of the world will react accordingly,” Cruz added.

    In 2016, Trump garnered 1,441 delegates in state primaries and caucuses, before being officially nominated as the Republican presidential candidate. Cruz finished second with 551 delegates.

    Donald Trump, who was then a Republican presidential candidate, gestures as Sen. Ted Cruz (R-Texas) looks on during the Republican Presidential Debate, hosted by CNN, at The Venetian Las Vegas, in Las Vegas, Nevada, on Dec. 15, 2015. (Robyn Beck/AFP via Getty Images)

    Trump has not made public announcements about running for president in 2024. However, during a speech at CPAC on Saturday, he hinted at a possible 2024 run when he said, “We may have to do it again.” Last month, he told New York Magazine that he has made up his mind about whether to run in 2024, but the “big decision” is when to make the announcement.

    The former president is currently the favorite for the 2024 GOP presidential nomination. According to the results of a CPAC straw poll announced on Saturday, Trump won 69 percent of the vote, followed by Florida Gov. Ron DeSantis with 24 percent. Cruz finished a distant third with 2 percent.

    In a head-to-head matchup for the 2024 race, President Joe Biden and Trump are locked in a “statistical dead heat,” according to a July poll by San Francisco-based data insights company Premise. The poll found Trump with 53 percent support compared to Biden with 47 percent.

    Cruz has previously said he was thinking about the 2024 race for president. In an interview with Newsmax in July, Cruz said he was “certainly looking at it.”

    “2016 was the most fun I’ve ever had in my life,” he continued, reflecting on his last presidential campaign. “We came incredibly close, had an incredible grassroots army.”

    Speaking to Fox, Cruz said he is focusing on the 2022 elections at the moment.

    “I’m spending practically every waking moment on the campaign trail, focusing on retaking the house and retaking the Senate,” Cruz said. “I think we’re gonna win votes. I think we’re gonna see a Republican majority in the House. I think we’re gonna see a Republican majority in the Senate.”

    Late last month, Cruz took part in a campaign rally in Cottleville to support Missouri Attorney General Eric Schmitt, who advanced to the November general election on Aug. 2 after winning the state’s Republican Senate primary. Schmitt is endorsed by both Cruz and Trump.

    Schmitt will face Democratic primary winner Trudy Busch Valentine in November, to fill a Senate seat to be vacated by Sen. Roy Blunt (R-Mo.), who decided not to seek a third term in office.

    Read more here…

    Tyler Durden
    Mon, 08/08/2022 – 21:30

  • Watch: Italian Army Detonates WWII Bomb Found In Dried Up River
    Watch: Italian Army Detonates WWII Bomb Found In Dried Up River

    The Italian Army detonated a World War II bomb uncovered by fishermen on the drought-stricken Po River.

    “Fishermen found the bomb on the bank of the River Po due to a decrease in water levels caused by drought,” Colonel Marco Nasi told Reuters. 

    Army specialists defused the 240 kg (530 pounds) U.S.-manufactured bomb found on Po’s river bank near the northern village of Borgo Virgilio, close to the city of Mantua, last week. 

    About 3,000 people in the surrounding area were told to evacuate during the disposal operation.

    Borgo Virgilio’s Mayor Francesco Aporti said many residents were not pleased with the evacuation orders: 

    “At first, some of the inhabitants said they would not move, but in the last few days, we think we have persuaded everyone,” Aporti said. 

    On Sunday, army specialists carried out a controlled explosion of the bomb in a quarry in Medole, about 45 km (30 miles) from where it was discovered. 

    Watch the army remove the bomb from the river bank and then blow it up at the quarry. 

    We noted in early July that Italy declared a state of emergency in five northern regions surrounding the Po due to a dangerous heatwave and drought. The country’s longest river snakes around 405 miles in northern Italy and is used for drinking water, crop irrigation, and hydroelectric power. 

    According to the European news outlet Euronews, this is the sixth water emergency for the Po River basin in two decades. 

    Who knows what else will be found as water levels drop to dangerously low levels… 

    Tyler Durden
    Mon, 08/08/2022 – 21:00

  • Fourth "Discovery Of Human Skeletal Remains" At Lake Mead Since May
    Fourth “Discovery Of Human Skeletal Remains” At Lake Mead Since May

    Since May, the fourth set of human remains has been discovered at Lake Mead as water levels recede amid a severe drought. 

    The National Park Service tweeted rangers received an emergency call reporting the “discovery of human skeletal remains” at Swim Beach in Nevada on Saturday.

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    The cause of death and the identity are a mystery, and no other details have been released by the rangers. 

    The Clark County Medical Examiner is currently determining the cause of death as the investigation is ongoing. 

    This is the fourth discovery of human skeletal remains at Lake Mead since May and probably won’t be the last as water levels drop. 

    The first body, discovered on May 1, was stuffed in a barrel, likely a murder victim who died “sometime in the mid-’70s to early ’80s, based on clothing and footwear the victim was found with,” according to a press release from the Las Vegas Metropolitan Police. Paddleboards discovered the second body on May 7 and the third on July 26. 

    As of Monday, Lake Mead’s water level was at 1,041 feet, approximately 173 feet below its level in 2000 when the great drought began. 

    “Continuing a 22-year downward trend, water levels in Lake Mead stand at their lowest since April 1937, when the reservoir was still being filled for the first time,” NASA wrote in a report last week. The U.S. space agency also released satellite images of the lake’s water level falling over time. 

    “We will likely find additional bodies that have been dumped in Lake Mead” as the water level continues to drop, Las Vegas Metropolitan Police Homicide Lt. Ray Spencer said in May. 

    Tyler Durden
    Mon, 08/08/2022 – 20:35

  • Biden And Pelosi Give Wrong 'Facts' About 'Assault Weapon' Ban
    Biden And Pelosi Give Wrong ‘Facts’ About ‘Assault Weapon’ Ban

    Authored by Emily Miller via The Epoch Times (emphasis ours),

    U.S. President Joe Biden delivers remarks at an event in Washington on July 11, 2022. (Chip Somodevilla/Getty Images)

    President Joe Biden and congressional Democrats are trying to reinstate the federal assault weapon ban that was in effect for 10 years because—they claim—it reduced gun crime. The bill, which just passed the House, will soon get a vote in the Senate.

    In the effort to get it passed, Biden and House Speaker Nancy Pelosi (D-Calif.) made some grand claims, which they called “facts,” about the previous ban on rifles leading to decreasing crime. But those facts don’t appear to be backed up by evidence.

    “Supporters of the bans are calling their assertions ‘facts,’ in an effort to mislead the public,” Lawrence Keane, senior vice president and general counsel of the National Shooting Sports Foundation (NSSF) told The Epoch Times. “Many of the Democratic Members of Congress were purposefully misleading in their assertions that the 1994 Assault Weapons Ban reduced crime. This level of willful ignorance would be comical if the effects of what they are trying to do wasn’t so blatantly unconstitutional.”

    The ban was in effect from 1994 to 2004.

    Pelosi

    During that time, “we witnessed gun crime with assault weapons drop by up to 40 percent,” Pelosi said on the House floor during the recent debate.

    “The number of murders with rifles actually increased slightly when the ban went into effect,” John R Lott Jr., the president of Crime Research, told The Epoch Times, referring to data from the FBI’s annual release of reports from law enforcement agencies on homicides by weapon type. Lott also pointed out that no one collects data on all crimes committed with so-called assault weapons.

    The term “assault weapon” is a political phrase referring to semi-automatic rifles with various cosmetic features. The House bill calls an “assault weapon” a rifle that has one feature such as a pistol grip, folding stock, or grenade launcher.

    While Pelosi makes it sound like there’s a grave risk of being killed by a rifle, it’s actually a rare crime. Lott has reported that the percentage of firearm murders with any type of rifles was 4.8 percent prior to the ban starting in September 1994. During the 10-year ban, homicide by rifle was 4.9 percent of all murders. Then rifle homicides dropped to 3.6 percent after the ban expired in 2004.

    The speaker did not cite the source of her statistics. She could be referring to how all violent crime went down since the spike in the 1980s, which would include the small number of murders by rifles.

    You can see this in this graphic of the FBI data. The decrease was dramatic.

    There were 15,463 homicides by gun in 1994 when the ban went into effect and 724 were by rifles. When the ban expired in 2004, there were 9,385 homicides and 403 of them were by rifle.

    “The falling crime rates are more likely due to many other factors than firearm ownership, including a concerted effort and focus on prosecuting criminals,” explained Keane.

    Pelosi’s press office did not respond to a request for information on the source of her data.

    Studies

    Furthermore, there is no study that has proven that the gun control law had a direct effect on crime reduction. Quite the opposite, Rand’s “Study of Gun Policy” in 2018 (pdf) looked at various studies on the impact of the law on violent crime and concluded that “available evidence is inconclusive for the effect of assault weapon bans on total homicides and firearm homicides.”

    The Centers for Disease Control (CDC) also published a report in 2003 on evaluating the effectiveness of firearms laws and studied the assault weapon ban. It said that studies were “inconsistent” and thus concluded that, “evidence was insufficient to determine the effectiveness” of the law.

    Ownership of these so-called assault weapons increased during the ban. Keane, the powerful gun lobbyist, pointed out that during the ban, what his organization calls Modern Sporting Rifles continued to be legally manufactured and sold if they did not have two of the cosmetic features necessary for the rifle to be banned.

    Biden has been pushing incessantly for it to be reinstated since he took office on the basis that it decreased mass shootings. He said in July: “Assault weapons need to be banned. They were banned. I led the fight in 1994. And then, under pressure from the NRA and the gun manufacturers and others, that ban was lifted in 2004.”

    NRA stands for National Rifle Association.

    Biden also said on June 2, “In the 10 years it was law, mass shootings went down. But after Republicans let the law expire in 2004 and those weapons were allowed to be sold again, mass shootings tripled. Those are the facts.”

    But an Epoch Times investigation into mass shootings showed that they are extremely rare and went up and down during the time period in question. As you can see in this graphic, there was no pattern of mass shootings in that 10-year period.

    The White House press office did not respond to a request for the source of the president’s data.

    Pelosi echoed Biden with her own statistic, saying in a speech that “since the ban expired, the number of mass shooting deaths has grown by nearly 500 percent.”

    That’s not true.

    Read more here…

    Tyler Durden
    Mon, 08/08/2022 – 20:10

  • US To Join Military Drills Near India's Disputed Border With China
    US To Join Military Drills Near India’s Disputed Border With China

    Authored by Dave DeCamp via AntiWar.com,

    The US will participate in war games with the Indian military in an area of India that is less than 62 miles away from the country’s disputed border with China, known as the Line of Actual Control (LAN).

    The drills will be held from October 18-31 and will be the eighteenth iteration of annual exercises between the two militaries known as Yudh Abhyas, which is Hindi for “war practice.” They will be held in the Auli area of the Indian state of Uttarakhand in the Himalayas mountain range.

    File image, via The Tribune News

    The Yudh Abhyas drills are meant to train for fighting in high altitudes. The last iteration of the exercises was held in the mountains of Alaska in October 2021.

    Tensions have been high between India and China in the Himalayas since June 2020, when clashes in the Galwan Valley killed 20 Indian troops and four Chinese soldiers. Since then, China and India have been engaged in talks to reduce tensions, but they have also reinforced their militaries along the LAN.

    The US has been increasing military ties with India in recent years with hopes of using New Delhi as a counter to Beijing. After the Galwan Valley clashes, the US and India signed a new military pact, known as the Basic Exchange and Cooperation Agreement (BECA).

    Under BECA, the US can share more intelligence and satellite information with India. US military leaders have said that since signing the pact, the US has been able to help India with surveillance of the Chinese military along the LAN. The intelligence could also potentially be used for Indian missile strikes in the region.

    Location of the major June 2020 border clash which left 20 Indian troops dead, via BBC:

    News of the drills comes not long after House Speaker Nancy Pelosi (D-CA) made her provocative trip to Taiwan, which China responded to by launching its largest-ever military drills around the island.

    Beijing also responded by cutting off military talks with Washington, and tensions between the US and China continue to soar.

    Tyler Durden
    Mon, 08/08/2022 – 19:45

  • Norway To Limit Electricity Exports, 'Cannot Rule Out' Rationing
    Norway To Limit Electricity Exports, ‘Cannot Rule Out’ Rationing

    Norway on Monday announced that due to an ‘uncertain and demanding situation’ over sky-high electricity prices – caused by low water levels at hydroelectric stations (in what they refer to as a “weather-dependent power supply”), as well as the “dramatic situation in Europe” regarding Ukraine, the government will be limiting electricity exports “when the water level in the reservoirs drops to very low levels.”

    Photo: alxpin/iStock

    Norway has notably been referred to as the “battery of Europe” thanks to its ability to generate and export massive quantities of hydroelectric power.

    They also won’t rule out the ‘low probability’ of having to ration electricity in the spring.

    So far this year, far less electricity (11.6 TWh) has been produced in southern Norway than at the same time last year – 18 per cent less. In South-West Norway, the total production of adjustable hydropower last week was the lowest we have seen so far this year.

    Collectively, this results in historically high electricity prices and a situation where, for the first time in many years, we cannot completely rule out a period of electricity rationing in the spring. But our professional authorities emphasize that the probability of this is low. -Minister of Petroleum and Energy, Norway

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    “This is not something people can afford to pay,” said Morten Frisch, a Norwegian energy consultant based in the United Kingdom, in a statement to the Daily Telegraph, adding that the cost of energy in Norway has already risen between 10 and 20 times the price people were paying last year.

    “When they run dry, they run dry, and it’s likely to take a minimum of three months, possibly six months, before they can be refilled by rain,” Frisch continued.

    As Torkel Nyberg of OilPrice.com writes:

    A cut in Norwegian power exports would be felt in Northwest Europe, which itself is grappling with issues at coal and nuclear power generating plants due to the low water level in rivers limiting coal supply via barges and warm river water unsuitable for cooling nuclear reactors.

    As a result of these issues and the uncertainty over natural gas supply from Russia, power prices in Germany for the year ahead jumped to a record on Friday.

    This summer’s dry weather across Europe has affected Norwegian hydropower, which accounts for 90% of Norwegian power generation. The remaining around 10% of the electricity supply in Norway comes from wind power.

    While Europe scrambles to procure natural gas for winter power generation and heating, Western Europe’s biggest oil and gas producer, Norway, has a whole different power problem this summer—dry weather, which depletes water reservoirs for hydropower.

    Although Norway doesn’t use gas for power generation, Europe’s gas and energy crisis is felt there, too. In recent weeks, hydropower producers have been discouraged from tapping more water for hydropower generation to save water for the winter. Operators were also asked not to export too much electricity to the rest of Europe as reservoirs are not as full as in previous years, and not to rely on imports from Europe, which is struggling with energy supply. Some Norwegian utilities, including top electricity producer Statkraft, have followed the plea from transmission system operator Statnet not to produce too much electricity now.  

    Tyler Durden
    Mon, 08/08/2022 – 19:20

  • DeSantis Slams 'Weaponized Federal Agencies' For Raid On Trump's Mar-A-Lago
    DeSantis Slams ‘Weaponized Federal Agencies’ For Raid On Trump’s Mar-A-Lago

    Update (2053ET): Florida Governor Ron DeSantis (R) came out with a blistering response to the Monday FBI raid on former President Donald Trump’s Mar-a-Lago residence, reportedly in connection with materials Trump brought with him after leaving office.

    “The raid of MAL is another escalation in the weaponization of federal agencies against the Regime’s political opponents, while people like Hunter Biden get treated with kid gloves,” said DeSantis. “Now the Regime is getting another 87k IRS agents to wield against its adversaries? Banana Republic.”

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    Trump supporters have begun gathering outside Mar-a-Lago.

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    Moments ago, Donald Trump – who is still banned by Twitter – published a statement on Truth Social in which he said that his Florida home, Mar A Lago is “currently under siege, raided, and occupied by a large group of FBI agents“, an assault which according to Trump “could only take place in broken, Third-World Countries.” He is probably right. He also claims the Fed’s presence was unannounced and the reason was politically motivated.

    His full statement posted on his Truth Social account is below:

    Statement by Donald J. Trump, 45th President of the

    United States of America

    These are dark times for our Nation, as my beautiful home, Mar-A-Lago in Palm Beach, Florida, is currently under siege, raided, and occupied by a large group of FBI agents. Nothing like this has ever happened to a President of the United States before. After working and cooperating with the relevant Government agencies, this unannounced raid on my home was not necessary or appropriate. It is prosecutorial misconduct, the weaponization of the Justice System, and an attack by Radical Left Democrats who desperately don’t want me to run for President in 2024, especially based on recent polls, and who will likewise do anything to stop Republicans and Conservatives in the upcoming Midterm Elections. Such an assault could only take place in broken, Third-World Countries. Sadly, America has now become one of those Countries, corrupt at a level not seen before. They even broke into my safe! What is the difference between this and Watergate, where operatives broke into the Democrat National Committee? Here, in reverse, Democrats broke into the home of the 45th President of the United States.

    The political persecution of President Donald J. Trump has been going on for years, with the now fully debunked Russia, Russia, Russia Scam, Impeachment Hoax #1, Impeachment Hoax #2, and so much more, it just never ends. It is political targeting at the highest level!

    Hillary Clinton was allowed to delete and acid wash 33,000 E-mails AFTER they were subpoenaed by Congress. Absolutely nothing has happened to hold her accountable. She even took antique furniture, and other items from the White House.

    I stood up to America’s bureaucratic corruption, I restored power to the people, and truly delivered for our Country, like we have never seen before. The establishment hated it. Now, as they watch my endorsed candidates win big victories, and see my dominance in all polls, they are trying to stop me, and the Republican Party, once more. The lawlessness, political persecution, and Witch Hunt must be exposed and stopped.
     
    I will continue to fight for the Great American People!

    Local reporters confirmed the raid, saying the FBI executed a search warrant at Mar-a-Lago. “They just left,” although it isn’t clear what the search was about.

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    Social media was predictably full of kneejerk reactions.

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    According to the New York Times:

    The search, according to two people familiar with the investigation, appeared to be focused on material that Mr. Trump had brought with him to Mar-a-Lago, his private club and residence, after he left the White House. Those boxes contained many pages of classified documents, according to a person familiar with their contents.

    Mr. Trump delayed returning 15 boxes of material requested by officials with the National Archives for many months, only doing so when there became a threat of action being taken to retrieve them.

    As Techno Fog notes, the politics of the search can’t be ignored. If the New York Times is to be believed, Trump’s purported crime – the delay of returning materials – could have been resolved in another manner not involving raiding his home and breaking open a personal safe. No doubt the search is an escalation by a desperate Regime confronted by their own failures at home and abroad.

    This doesn’t necessarily mean there wasn’t another reason for the search. Could it have to do with the DOJ’s ongoing January 6 probe (although, given the politicization of Biden’s DOJ, that is no guarantee)? Maybe not, but it might be too soon to tell. Last week there was reporting that a federal grand jury investigating January 6 had issued subpoenas to the Trump White House Counsel, Pat Cipollone, and his top deputy, Patrick Philbin.

    According to the author, it is possible that the roadmap for the DOJ comes from the January 6 Committee, “which has poured out the thin gruel of purported criminal charges against Trump, alleging he and others, including attorney John Eastman, could be charged with”:

    1. Obstruction of an Official Proceeding (18 USC 1512(c)(2)); and
    2. Conspiracy to Defraud the United States (18 USC 371).

    Each of these counts, as well as the DOJ’s pursuit of Trump and his attorneys and advisors, amounts to the criminalization of politics, or as Technofog puts it, “arguments of law that might fail in the courts are now prosecutable offenses. Attempts to delay a vote count based on novel, and not corrupt, interpretations of the law can put you in prison. Issues surrounding the counting of state results or whether the Vice President can refuse to count electoral votes is a matter to be decided through the civil or political process, not through charges brought by vindictive opponents.”

    Meanwhile, we are still waiting for an official comment:

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    Tyler Durden
    Mon, 08/08/2022 – 19:08

  • China’s Economy Slumps Further, Raising Fears Of Layoffs
    China’s Economy Slumps Further, Raising Fears Of Layoffs

    Authored by Alex Wu via The Epoch Times (emphasis ours),

    This aerial photo shows cargo containers stacked at a port in Lianyungang in China’s eastern Jiangsu province on May 9, 2022. (STR/AFP via Getty Images)

    Both official and independent data show that China’s economy has slumped further in the second quarter of the year, with manufacturing slowing down unexpectedly and a downturn in the real estate sector intensifying. This has raised fears of a wave of layoffs in the second half of the year adding to already severe unemployment issues in China.

    China’s economy deteriorated further in July, said a China Beige Book International (CBBI) report in early August, which provides independent economic data. Factory outputs and new production orders in China reached their slowest since mid-2020, and retail employment was at its worst in more than two years, according to the latest CBBI survey. Deterioration in revenue growth for manufacturers and retailers curtailed profits, the report said.

    On Aug. 1, official data revealed even worse numbers in manufacturing and real estate. Data released by the Chinese regime’s statistics bureau showed that the purchasing managers index (PMI) of China’s manufacturing industry for July was 49.0 compared with 50.2 in the previous month, a decrease of 1.2 percentage, which is below the critical level of 50.

    In July, with more cases of COVID-19 emerging in parts of China, the communist regime continued its strict “zero-COVID” measures, putting many cities in lockdown, including industrial centers and economic hubs.

    Manufacturing activity had rebounded in June after the lockdowns were lifted in parts of mainland China but have now slumped again.

    The China Real Estate Index Research Institute publicized that in July, the average price of new residential buildings month-on-month in 100 cities in mainland China dropped instead of increasing, and the average price of homes further plummeted. Price drops for new houses were greater in cities, especially in the Yangtze River and Pearl River deltas, where housing prices had been increasing in previous years.

    A general view shows Evergrande residential buildings under construction in Guangzhou, in southern China’s Guangdong Province on July 18, 2022. (JADE GAO/AFP via Getty Images)

    Property sales in the 17 cities tracked by the Index Research Institute fell 33.4 percent month-on-month in July, compared with an 88.9 percent jump in June as lockdowns lifted.

    High Unemployment Rate

    According to a report by major Chinese finance website Caixin, employment in the domestic manufacturing sector has continued to shrink, with the employment index falling to its lowest point in 27 months. The report attributed the layoffs to cost-cutting measures of factories, weak sales, and a “cautious attitude toward hiring” across industries.

    In addition, nearly 11 million college students in mainland China graduated in the summer—a record high. According to official data released by the Chinese regime, the unemployment rate for urban youth aged 16-24 climbed to 19.3 percent in June, also record high.

    Thousands of job seekers flock to an employment fair in Hefei, east China’s Anhui Province on Feb. 25, 2015. (STR/AFP/Getty Images)

    Due to widespread uncertainty about employment, consumer confidence remains fragile. For those who still have jobs, many are more reluctant to spend money.

    Official data shows that economic growth in mainland China slowed to 0.4 percent year-on-year in the second quarter. The outside world believes that China’s economy may even already be in recession, as the Chinese regime is known for its lack of transparency and often reports false numbers.

    Dim Prospects

    At China’s ruling Communist Party’s (CCP) Politburo meeting on July 28, the regime acknowledged that this year’s international environment is “complex and severe,” and that domestic tasks are “difficult and arduous.” The CCP leadership remained silent on the 5.5 percent economic growth target it set for this year. Analysts say this suggests that the CCP believes it will ultimately fail to achieve this goal.

    Independent current affairs commentator Tang Jingyuan told The Epoch Times that the downturn in Chinese real estate, a pillar industry and the largest sector of local government investment and revenue, has intensified. “Manufacturing employment continues to shrink, and unemployment hits a new high, and manufacturing corresponds to the export of China’s economy. It shows that the mainland China’s consumption stimulus policy has no effect,” he said.

    “These data reflect that the three pillars of China’s economy: investment, exports and consumption, are overall in deceleration or even stalling. On this basis, the CCP authorities still stick to ‘zero-COVID’ policy, which will only hurt the Chinese economy,” Tang said.

    “To make matters worse, China’s economic crisis is not a question of whether it can achieve the targeted growth rate, but whether it can stabilize the economy in the next five or even 10 years.”

    Xu Jian contributed to the report.

    Tyler Durden
    Mon, 08/08/2022 – 18:55

  • Are Bonds Really A Buy
    Are Bonds Really A Buy

    By Russell Clark of the Capital Flows and Asset Markets Substack

    Every time I open twitter these days, I see someone saying “Here comes deflation and its time to buy bonds!” and then providing some graph to back up the view. Typically it will involve the price of commodities, or perhaps some variation of PMI that leads core inflation. I think they a probably wrong – and I say that with about 90% confidence. At some point bonds will be a buy, but not today.

    So why is everyone a bond buyer? I think its mainly psychological. When the Federal Reserve first embarked on its QE program, everyone became very bearish long date bonds. Oddly, everyone seemed to ignore the experience of Japan, which had first invented QE, and had never seen a bond bear market. To see this in “asset flows” we can look at TLT US – the long dated treasury ETF. As late as 2014, the short interest in this was greater than the shares outstanding! TLT was actually net short (well not TLT, but it was creating units for people to be short treasuries). Run forward to today, and the long position has double in 6 months, and short position is near all time lows.

    Nothing like being short and wrong to convert people to ultra bulls (see bitcoin, Tesla etc…). So what are these converted bulls looking at to make them so bullish bonds? First of all, they have seen the treasury yield curve invert, which has tended to signal recession, so the basic assumption is that the Federal Reserve wont raise rates anymore. This assumption puts interest rates at the heart of inflation, that is high interest rates kills inflation. I think this assumption is wrong.

    An inverted yield curve and signs of a top in commodity prices is enough to push people into being bullish bonds.

    So why were the bond bears wrong in 2014, and why are the bond bulls wrong now?

    Often when people talk about structural inflation, they talk about budget deficits and low interest rates. Japan has proven that large deficits do not create inflation in of themselves. This has formed the organising idea behind which MMT – or deficits don’t matter – crowd.

    Focusing on deficits miss the point. The key issue is whether governments are enacting “austerity” or not. Austerity can come in many different flavours, from reducing government payroll, to cutting or freezing wages, but it is not hard to work out when government is enacting austerity or not. Japan has not seen a public servant pay rise in decades. When we look at the US, we can see that post GFC, we were in an age of austerity. You don’t need a microscope to see that post Covid, US government spending remain elevated compared to pre-Covid.

    You also don’t have to be much of a political analysis to make an educated guess that neither the Republicans or the Democrats will cut spending until the bond market tells them to do so. When I look at CPI over over 8% and US 30 Year Treasury sub 3%, I think bond bulls have lost their minds.

    The intellectual thread behind all of this, is that capitalism is deflationary, and socialism is inflationary. The problem is that capitalism creates income inequality, the eventually destroys the social contract, And that point “some” socialism is necessary. We are seeing the social contract fray in the UK, where strikes are now commonplace. Perhaps the US is different, but my guess big government is here to stay, and so is inflation. Bonds look like shorts to me.

    Tyler Durden
    Mon, 08/08/2022 – 18:07

  • New Patent May Reveal Russia's Next-Generation Bomber Design
    New Patent May Reveal Russia’s Next-Generation Bomber Design

    New patent details have emerged of what could be the first basic design concept behind Russia’s next-generation stealth bomber intended by Moscow to replace the aging fleet of Soviet-era aircraft, according to The War Zone. 

    The patent drawings show what appears to be technology related to an engine intake duct awarded to Russian aerospace and defense company Tupolev. It may provide the first glimpse at the company’s long-in-development PAK DA stealth bomber. 

    “The intake is shown from the front, top, and side. But most interesting is the aircraft in which the intake is incorporated. While it’s worth noting that the plane design depicted is not described as the PAK DA, it’s certainly in keeping with semi-official and unofficial reports of the bomber’s general design,” The War Zone said. 

    Based on the drawings, the shape of the aircraft appears similar to the U.S. Air Force’s B-2 Spirit. We noted last year that “the strategic bomber race is on…” Here’s a side-by-side comparison of both bombers. 

    A source familiar with PAK DA’s development recently told Russian news outlet TASS that the long-range bomber will be assembled in 2023. 

    “Currently, the experimental model is being built. The demonstration model will be ready by 2023,” the source said.

    They also said, “the subsonic PAK DA will be armed with hypersonic weapons. Besides, its flight will be aided by drones.” 

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    Meanwhile, the public unveiling of the USAF’s next stealth bomber could be later this year. 

    Tyler Durden
    Mon, 08/08/2022 – 17:40

  • Ron Paul: Pelosi's Taiwan Trip Exposes US Policy As Dangerous, Deadly, & Dumb
    Ron Paul: Pelosi’s Taiwan Trip Exposes US Policy As Dangerous, Deadly, & Dumb

    Authored by Ron Paul via The Ron Paul Institute,

    House Speaker Nancy Pelosi’s “surprise” trip to Taiwan last week should be “Exhibit A” as to why interventionism is dangerous, deadly, and dumb. Though she claimed her visit won some sort of victory for democracy over autocracy, the stopover achieved nothing of the sort. It was a pointless gesture that brought us closer to military conflict with zero benefits.

    As Col. Doug Macgregor said of Pelosi’s trip on a recent episode of Tucker Carlson Tonight, “statesmanship involves advancing American interests at the least cost to the American people. None of that is in play here… Posturing is not statesmanship.”

    PLA pilot patrolling near Taiwan on Sunday: Xinhua via AP

    Pelosi’s trip was no outlier. Such counterproductive posturing is much celebrated by both parties in Washington. Neoconservative Senators Bob Menendez and Lindsey Graham were thrilled with Pelosi’s stop in Taipei and used it as a springboard to push for new legislation that would essentially declare war on China by declaring Taiwan a “major non-NATO ally.”

    The “one China” policy that, while perhaps not perfect, has kept the peace for more than 40 years is to be scrapped and replaced with one sure to provoke a war. Who benefits?

    Foolishly taking the US to the brink of war with Russia over Ukraine is evidently not enough for Washington’s bipartisan warmongering class. Risking a nuclear war on two fronts, with both Russia and China, is apparently the only way for Washington to show the rest of the world it’s serious.

    The Washington Post’s neoconservative columnist Josh Rogin accurately captures the mindset in Washington DC with a recent article titled, “The skeptics are wrong: The US can confront both China and Russia.”

    For Washington’s foreign policy “experts,” those of us who don’t believe a war with both Russia and China is a great idea are written off as “skeptics.” Count me as one of the skeptics!

    During the Cold War there were times of heightened tension, but even in the darkest days the idea that nuclear war with China and the Soviet Union could be a solution was held only by only a few madmen. Now, with the ideological struggles of the Cold War a decades-old memory, such an argument makes even less sense. Yet this is what Washington is selling.

    The US fighting a proxy war with Russia through Ukraine and Nancy Pelosi provoking China nearly to the point of war over Taiwan is meant to show the world how tough we are. In reality, it demonstrates the opposite. The drunken man in a bar challenging everyone to a fight is not tough. He’s foolish. He has nothing to gain and everything to lose from his display of bravado.

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    That is interventionism at its core: a foolish policy that provokes nothing but anger overseas, benefits no one in the US except the special interests, and leaves the rest of us much poorer and worse off.

    There may be plenty to criticize about China’s government and policies. They are far from perfect, particularly in protection of civil liberties. But have we already forgotten that our own government shut down the country for two years over a virus, and then forced a huge number of Americans to take an experimental shot that is proving to be as worthless as it is dangerous? Let’s look at the log in our own eye before we start lobbing missiles overseas.

    Tyler Durden
    Mon, 08/08/2022 – 17:15

  • Semiconductors Emerge As Battleground In US-China Race
    Semiconductors Emerge As Battleground In US-China Race

    Authored by Jessica Mao via The Epoch Times (emphasis ours),

    300-millimeter wafers are pictured in a machine for coating with gold in a clean room during the mass production of semiconductor chips at the Bosch’s semiconductor plant in Dresden, eastern Germany, on July 12, 2022. (Photo by Jens Schlueter/AFP via Getty Images)

    As every aspect of modern life becomes more and more digitized, not just the economies of nations but their sovereign influence will rely more and more on the command of technology.

    Although the United States and China are not engaged in traditional warfare, they are engaged in a war of ideas, trade, and technology, especially in semiconductor hegemony, where both sides are battling for supply and advancement.

    In recent years, the United States has made a series of moves to hinder and outpace Chinese development in semiconductors, including persuading Asian semiconductor powerhouses to join its alliance, passing a massive spending bill to aid domestic chip production, and banning exports of high-end chipmaking equipment to China.

    In late July, the United States expanded its bans on exports to China of equipment that can make semiconductors up to 14 nanometers in size, according to major U.S. chipmaking equipment suppliers, such as Lam Research Corp. and KLA, who were notified by the government about the expanded restrictions.

    Previously, the United States had banned the sale of equipment that can produce chips of 10 nm or smaller to Chinese chip manufacturers.

    Generally in semiconductor fabrication, the smaller the process technology, the more advanced the chip. The smaller the technology node, the higher the transistor density and the lower the chip power consumption, resulting in higher performance. However, the smaller manufacturing process requires more advanced material and equipment, and will incur a greater cost in R&D and production.

    Semiconductors are seen on a circuit board that powers a Samsung video camera at the Samsung MOBILE-ization media and analyst event in San Jose, Calif., on March 23, 2011. (Justin Sullivan/Getty Images)

    The development follows a historic $52 billion bill passed by U.S. congress on July 27 to aid domestic chip makers in research, development, and production volume. One of the conditions is that the companies receiving the funds will not increase advanced chip production in mainland China.

    The U.S. Department of Commerce said the tightening policies impair “PRC efforts to manufacture advanced semiconductors to address significant national security risks to the United States.”

    Meanwhile, the United States is also reportedly planning to ban the exports of U.S. chipmaking equipment that produces advanced NAND chips to major Chinese chipmakers, such as Yangtze Memory Technologies Corp (YMTC).

    YMTC is a state-owned company and China’s only storage NAND flash memory manufacturer competing with major U.S. manufacturers. Its global market share is about 5 percent. In a report released by the White House in June 2021, YMTC was identified as the “national champion” enterprise of the Chinese regime, having received $24 billion in subsidies from the Chinese government.

    NAND chips are used to store data in a wide range of electronic devices such as smartphones and personal computers, as well as in the data centers of companies such as Amazon, Facebook, and Google.

    If the NAND chip initiatives are officially issued, they will be the first time that the United States uses trade restrictions to contain China’s ability to produce non-military use memory chips, broadening the scope of protecting the U.S.’s national security and dealing a massive blow to Chins’s memory chip industry.

    On Aug. 1, U.S. senators, including Senate majority leader Chuck Schumer (D-N.Y.), requested that the Department of Commerce add YMTC to the U.S. trade blacklist.

    The move could further hamper the growth of China’s semiconductor industry and protect American companies; the only two U.S. memory chip makers, Western Digital and Micron Technology. The two account for about a quarter of the NAND chip market share.

    According to a Bloomberg report, the United States is also pushing the Netherlands and Japan to stop the chipmaking equipment suppliers, ASML and Nikon, from selling lithography machines to China. The move could potentially deal a severe blow to major Chinese chipmakers such as Semiconductor Manufacturing International Corp. (SMIC) and Hua Hong Semiconductor Ltd.

    US CHIPS Act

    On July 26, the U.S. Senate voted to advance its Chips and Science Bill aimed at boosting domestic semiconductor production and improving technological competitiveness with China.

    The bill was later passed in the U.S. House of Representatives on July 28 and signed into law by President Joe Biden on Aug. 2.

    Senate Majority Leader Chuck Schumer (D-N.Y.) speaks alongside a bipartisan group of U.S. Senators, including (L-R) Roger Wicker (R-Miss.); Mark Warner (D-Va.); Todd Young (R-Ind.), and Maria Cantwell (D-Wash.), following the passage of the CHIPS Act, providing domestic semiconductor manufacturers with $52 billion in subsidies to cut reliance on foreign sourcing, at the U.S. Capitol in Washington, D.C., on July 27, 2022. (SAUL LOEB/AFP via Getty Images)

    The legislation will provide $280 billion in funding to prop up and kickstart domestic semiconductor manufacturing and research; the price tag is far above previous legislation that aimed to provide just $52 billion to manufacturers.

    Officially dubbed the CHIPS [Creating Helpful Incentives to Produce Semiconductors for America] Act of 2022, the measure would provide tens of billions of dollars in subsidies and tax breaks to technology corporations in an effort to spur new market growth, as well as funding for government-backed tech research.

    Proponents of the legislation have long said that it’s necessary in order to maintain a competitive edge with China, which is pouring money into its own domestic chip production.

    The legislation also clarifies that entities receiving U.S. government funding are prohibited from engaging in transactions involving substantial expansion of semiconductor manufacturing in China or any other foreign country of concern for at least ten years after the Act takes effect.

    These restrictions are designed to prevent chipmakers from significantly expanding the production of chips more advanced than 28nm in China within the next decade.

    Even though the 28-nanometer chips are a few generations behind today’s advanced semiconductors, they are still widely used in cars, lower-end smartphones, appliances, and more.

    Chip 4 Alliance

    The United States has also been working to persuade Asian semiconductor powerhouses to participate in its “Chip 4 alliance.”

    The U.S.-led alliance aims to strengthen cooperation in the semiconductors industry among the United States and the East Asian powerhouses of Taiwan, South Korea, and Japan to build a secure supply chain that excludes China.

    Taiwan and Japan have already agreed to participate in the Chip 4 alliance proposed by the United States this March, pending South Korea’s decision to join.

    The United States has reportedly given South Korea a deadline to decide whether it will join the “Chip 4 alliance” by Aug. 31, according to local South Korean reports citing unnamed sources in Washington.

    Read more here…

    Tyler Durden
    Mon, 08/08/2022 – 16:50

  • CBS Censors Own Documentary After Ukraine Outraged
    CBS Censors Own Documentary After Ukraine Outraged

    CBS has censored its own documentary investigative reporting after an avalanche of pushback from supporters of Ukraine and its military. The segment highlighted that tons of weaponry shipped from the United States to the country’s military has gone missing, and sounded the alarm as billions in dollars more have been pledged by the Biden administration.

    “CBS partially retracted a documentary in which it said that shipments of weapons to Ukraine from the US had been going missing,” Insider reports Monday. “CBS tweeted on Monday that it had removed a a video promoting the documentary that included a months-old quote saying most aid was not making it to Ukraine’s front lines.” Below is the deleted tweet, with the offending line of “30% of it [US-supplied arms and munitions] reaches its final destination.”

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    The segment, titled “Arming Ukraine” was published days ago, and follows on the heels of Pentagon and US intelligence officials issuing similar warnings that there are few mechanisms in place to legitimately track the arms flowing into the country. One admin official even described in April that, “we have fidelity for a short time, but when it enters the fog of war, we have almost zero. It drops into a big black hole, and you have almost no sense of it at all after a short period of time.”

    The fresh CBS reporting added to these concerns, quoting the the head of a Lithuania-based organization supplying the Ukrainian military, Jonas Ohman, who said bluntly:

    “All of this stuff goes across the border, and then something happens, kind of like 30% of it reaches its final destination.”

    Ohman stressed that actually getting the weapons to the designated Ukrainian army units involves having to navigate an array of “power lords, oligarchs [and] political players.” This also as there have been persistent reports that some weapons end up on the black market, or might possibly be moved outside Ukraine.

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    A senior crisis adviser with Amnesty International also told CBS in the documentary, “What is really worrying is that some countries that are sending weapons do not seem to think that it is their responsibility to put in place a very robust oversight mechanism.”

    Officials with the Ukrainian government promptly accused the mainstream US network of playing into “Russian propaganda”.

    Along with a widespread social media backlash from Kiev’s supporters and pundits, this was apparently enough for CBS to announce it is “updating” the segment, with some of the offending lines now dropped…

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    The Ukrainian government further put out a dubious claim that “all received equipment is accounted for” – this despite months of Pentagon officials warning that this isn’t the case.

    Unsurprisingly, Ukraine’s Minister of Foreign Affairs, Dmytro Kuleba, has demanded that CBS News conduct an internal investigation to get to the bottom of things.

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    There’s of late been growing scrutiny placed on the Ukrainian side, after Russia and Putin have long been the main focus of Western mainstream media reporting. It appears that efforts to “police” western MSM reports to deflect any possible criticism of Kiev whatsoever during the war is now ramping up.

    Tyler Durden
    Mon, 08/08/2022 – 16:25

  • Markets In A World Of Pain As Most-Shorteds Squeeze Higher While TSY Curves Invert To Grotesque Levels
    Markets In A World Of Pain As Most-Shorteds Squeeze Higher While TSY Curves Invert To Grotesque Levels

    It was a wasted day in the market, one where stocks ground higher overnight and hit session highs just after the open, before a concerted wave of VWAP selling pushed stocks back to flat for the day…

    … with tech shares hit the hardest as buybacks appeared to be oddly missing today…

    … while Nvidia’s unexpected earnings preannouncement and guidance cut which sent the stock 6.30% lower, its biggest one day drop since early June did not help…

    … as staples, industrial and banks also dropped while energy, homebuilders and small caps traded solidly in the green…

    With another red hot (but far cooler than in recent months) CPI looming, bonds were anything but jittery as yields slumped all day led by the back end…

    … and with the 2Y roughly unchanged, the 2s10s curve inverted to a mindblowing, grotesque 46bps, the biggest inversion since the year 2000, and set to blow that out of the water in the next few days as longer yields continue to sink:

    No wonder hedge funds managers remain extremely bearish – the bond market is screaming not just recession but maybe even depression.

    According to Bloomberg, unable to find traction in stocks, hedge funds have shifted to bonds and are engaged in various bets on more flattening in futures, namely 10-year versus ultra bonds and 2-year contracts against ultra 10-years, while mortgage portfolios managed by mutual funds have done it with 2s and 10s in cash Treasuries. Real money too has engaged in assorted bets the inversion will grow.   Flatteners got the green light once again Friday after a huge beat on the July non-farm payroll report. The spread between 2s10s set lows of -44 bps Friday. That level has been surpassed today with an inversion to ~-45 bps.   The next level to target is -50 bps, which is the size of the inversion last set in August 2000 based on a weekly chart.

    The paradox of course, is that even as hedge funds turn increasingly more bearish in bond land, their stock shorts are getting blown out of the water on the back of the previously discussed buyback/CTA/retail bid, which today resulted in the 9th consecutive rise in Goldman’s most shorted tech name basket (BBG ticker SCBMSIT), matching the longest such stretch on record.

    The market-wide short squeezes also meant that retail investors have woken from their hibernation slumber and are once again raging and sparking short squeezes, such as those seen today in BBBY, AMC and Gamestop, all of which are sharply higher on the back of powerful squeeze-driven rallies.

    What is odd is that the squeeze-driven meltup comes at a time when the market is resetting its expectations of near-term rate cuts by the Fed (we doubt this will last long, especially after a miss in the next CPI report and a long-overdue collapse in the August payrolls) with STIR traders now pricing in just 5bps of rate cuts in Q1 2023 down sharply from a full rate cut as recently as two weeks ago…

    … however, far from winning the hawkish argument, the Fed’s day of capitulation is merely being extended, and as Charlie McElligott writes today, “the nuanced dynamic which remains clear is this: the market continues to believe that the longer the FOMC stays on this course to a higher terminal rate and runs “restrictive for longer,” that it will later then lead to higher odds of a harder slowdown thereafter” which is why the next important calendar phase, or EDH3-EDZ3 i.e., Mar23-Dec23, actually sits at its most inverted level yet, implying ~64bps of Fed cuts thereafter—aka “more hiking / more restrictive now, bigger cutting / easing later!

    These growing odds that the Fed will have to pivot eventually are likely behind today’s rally in oil prices…

    … as well as the jump in cryptos to multi-week highs (much more coming with the ETH merge looming).

    Meanwhile positioning – as we have covered all weekend long – continues to trade extremely, extremely short as hedge funds hope and pray that the inevitable flush that will trigger the Fed’s rate cuts comes before the relentless meltup forces them to cover their shorts!

    As Nomura notes, the bearish masses were so grossly underpositioned for a rally after anticipating an earnings wipeout and “cleanse lower” which did not materialize, perversely thanks to the magnitude of just how low those “negative revisions” expectations were—and accordingly, the pain-trade has been “higher”

    So with this idea that 1) prices are beginning to contract, that 2) inflation expectations are softening thereafter, and that 3) current labor strength and 4) consumer balance sheet allows for 5) “more rope” to digest this forward state of accumulated / lagged “tightening into restriction”, Nomura’s McElligott says that it all then puts us much close to the actual slowdown and “dovish Fed pivot” that will then merit the aforementioned “even larger easing” thereafter.

    And as all this happens, the relentless buying from systematics keeps lifting the overall tide: similar to Goldman, Nomura estimates that CTA Trend have bought +$60.1B of Global Equities futures in aggregate over the past 1m period on almost entirely “short covering” flows, and now showing an aggregate “Net Long” across the 13 Global equity futures futs positions since the peak of the last large “bear market rally” into start of June—including nascent “+19% Long” signals across all 3 US Equities positions

    Finally, adding to the bears’ pain, “Positive Delta” flows are also ripping stocks higher and further leaning into implied Volatility, which has added a ton of Gamma to Dealers who had been “Short,” but are now instead in “Long Gamma vs Spot” territory for all 3 US Equities indices, further insulating the market’s range from large price swings (“Long Gamma” = sell highs, buy lows = MM’s and Dealers as liquidity “MAKERS,” not TAKERS)

    Tyler Durden
    Mon, 08/08/2022 – 16:24

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