- Sweden Pandemic Deaths Among Lowest In Europe — All While Avoiding Strict Lockdowns
Sweden Pandemic Deaths Among Lowest In Europe — All While Avoiding Strict Lockdowns
Sweden logged one of the lowest Covid-19 death rates in Europe, all while avoiding strict economy-killing lockdowns that led to economic chaos across the world, the Telegraph reports, citing new figures from the World Health Organization.
Sweden, which was criticised in the early stages of the pandemic for resisting a mandatory lockdown, had fewer deaths per capita than much of Europe.
In 2020 and 2021, the country had an average excess death rate of 56 per 100,000 – compared to 109 in the UK, 111 in Spain, 116 in Germany and 133 in Italy. -Telegraph
As the Telegraph delicately notes – “Experts said the difference demonstrated stringent lockdowns alone did not determine success when battling Covid-19.”
So what’s Sweden’s secret?
The Telegraph suggests that things such as lower obesity and better general health played a factor – which is certainly true.
“The lesson from Sweden is to invest in your population’s health and have less inequality,” said Prof Devi Sridhar, the chairman of global public health at the University of Edinburgh.
Meanwhile in the strictly locked-down UK, “there have been too many preventable deaths,” according to Dr Michael Head, a senior research fellow in global health at the University of Southampton. “By the end of the pandemic, it’s likely that the UK will probably end up mid-table on various metrics that measure pandemic performance, such as excess mortality,” he added.
In fact, some 68% of deaths during the pandemic came from just 10 countries, including the United States, Russia and India.
But Colin Angus, a modeller at the University of Sheffield who was not involved in the study, said the WHO’s methodology “looks entirely sensible”, adding that excess death estimates are critical to hold governments to account.
The figures were compiled by a panel made up of international experts who have been working on the data for months, using a combination of national and local information, as well as statistical models, to estimate totals where the data are incomplete. -Telegraph
Of course, we’ve known for a while that enough evidence exists to question the effectiveness of lockdowns.
Peer-Reviewed Study “Did Not Find Evidence” Lockdowns Were Effective In Stopping COVID Spread
Statistician: Lockdowns Don’t Work Because They Force People To Congregate In Fewer Places
Another Study Shows—Yet Again—That Lockdowns Don’t Work
Anti-Lockdown States Performed Better Than New York & California, Think Tank Finds
It Was The Lockdowns, Not The Pandemic That Created The Havoc
Now imagine policymakers ever admitting they were wrong as we suffer through an inflationary hangover.
Tyler Durden
Mon, 05/09/2022 – 02:45 - Vilches: Europe's Mad Ban On Russian Oil
Vilches: Europe’s Mad Ban On Russian Oil
Cognitive scientists would concur in that the current performance of European leadership could be diagnosed as either myopic ignorance or – most probably – full intellectual blindness.
Ursula von der Leyen
In the case of so far happy-go-lucky Ursula von der Leyen there is no doubt it´d be the latter… but only if we first dismiss her warm on-the-record support for Bundeswehr colonial policies and military involvement… plus her praise of Third Reich famous general Field Marshall Erwin Rommel, Commander of the Führer Headquarters. But leaving that possible Nazi whiff aside, full ´intellectual blockage´ is the only kind way to dare explain a most strategic project as foolish and doomed to fail as banning Russian oil sales worldwide. Why so you may ask ?
Ref #1 https://www.wsws.org/en/articles/2017/06/20/vond-j20.html
asymmetrical retaliation
The short answer is massive — ´Russian´ massive – unmitigated “asymmetrical non-military retaliation” through surgical and divisive optional sales of natural gas – and other key commodities – just leaving EU sanctioned Russian oil for sale to and re-sale by third parties. And, oh yes, weaponization is not limited to any particular means as various European war schools should have internalized already. War means war and pretty much anything is fair game. But apparently, it´d be as if through the centuries, uppity European leaders – most especially German, French, Swedish, British and Poles — have not learned a single thing despite the über-high costs already paid for by their nations large-caliber warfare experiences most especially with Russia. By the way, the UK also has the additional ( unsolvable? ) burden of its current Brexit ballast…
Ref # 2 https://www.zerohedge.com/energy/eu-proposes-ban-russian-oil-imports
Ursula´s softball
May I call you Ursula ? Thank you. “We will make sure that we phase out Russian oil in an orderly fashion [… a phenomenal bad joke of sorts… ] in a way that allows us and our partners to secure alternative supply routes and minimises the impact on global markets” you said. Question: will the Russians just idly watch you trying to execute such enormity at the EU´s preferred speed and political and geopolitical sequencing? And the Russians would never dare to strike back with natural gas or other restrictions no? For starters, what about nickel, uranium, and lithium? Not having them would be like trying to prepare tasty food without salt, pepper or mustard. Without uranium no nuclear power is possible, did you know? [ more on that later ]. Ursula, your pink unicorn wishful thinking is unfathomable gal.
EU kelpers
This mad-ban requires EU approval with conditional support from Hungary, Greece, and others. So some special EU members will be exempted while regular EU ´kelpers´ will not. Now could that lead to serious friction ? How many years will it take all of Europe to reconvert its industry and supply chains? “This is why we will phase out Russian supply of crude oil within 6 months and refined products by the end of the year.” Okay, so Aunty Ursie you believe the Russians are dumb enough to let you phase this idea out nice and easy at your own pace and whenever you decide to act per your own special EU schedule. No market dynamics involved as Europe plays everybody else´s pieces too as grandpas would do with 3-year-old grandkids.
Ref # 3 https://www.rt.com/business/555065-russia-oil-ban-exemption-eu/
Russian DNA
No way Ursula, the Russians play world-class professional chess while you play elementary school checkers, not even being good at that either. The instant Russia perceives the initial execution of your game plan regarding banning of Russian oil, they´ll make their moves, not yours. And those Russian moves will not be nice and pretty. For one, Europe will not have anywhere nearly ready its own diesel refining capacity by the end of 2022 while the middle distillate market is ever much tighter everywhere as demand recovers from the Covid pandemic. So the EU “plan” is
to frantically search for hard-to-find or simply non-existent substitutes while investing tons of time, money, effort and risk. Well, the Russians know that already even before you start. Diesel is already in critically short supply in the EU.
Furthermore, Europe will continue buying Russian oil and distillates via third countries once it introduces any embargo only that at much higher prices than today. Such old, quick and dirty business is known as “triangulation” Ursula.
Russian hardball
The existential threat imposed on Russia by the EU with its macabre “Ukraine Plan” and sanctions has not left Russia any way out other than playing hardball for keeps. Furthermore, the Russian non-military retaliation domain is actually unlimited due to the full-scale and open-ended addiction that Europe has developed for Russian imports of different sorts including commodities of any and every imaginable type. Without such, Europe will cease to exist as we know it in a matter of a very few months, if not weeks. As Francis Fukuyama should posit, Europe´s dependency on Russian commodities is the end of its own history. The unipolar world is dying, admit it Frank. Hint: write a new book guy.
Ref # 5 https://www.rt.com/business/554968-moscow-toughens-response-western-sanction
not your dog
It seems that Ursula von der Leyden has convinced the EU that feeding a refinery or a chemical plant is pretty much like feeding your dog. But nothing can be further from the truth. Chemical plants and refineries are very closely matched and subtly calibrated to very specific supply feeds very difficult to substitute. Changes can and have been made, but it requires lots of time, effort, money, dedicated facilities, experimentation, specific expertise, risk, and most important fixed, unchanging feeds always complying with specs. This means that Russia today supplies Europe with exclusive unreplaceable oil & gas grades of very specific chemical content (even coal grades) that would be impossible to get from third parties fast enough and cheap enough. So it´s a very delicate and tight matching already achieved between European facilities and Russian fuels and other inputs that cannot be altered or replaced that easily, let alone all at the same time !! Are EU countries aware of all this ?
Ref #6 https://www.ifo.de/en/node/69417
expensive divorce
So maybe after investing years, money, expertise, trials & errors, risk and lots of hard work Europe may possibly and eventually be able to partially switch from current to dirtier or far more inefficient options. But that would be (a) against the EU´s Green Deal compliance and (b) a very short-term non-sustainable “solution” (c) against the whole world.
So how can Europe transition to a 0% Russian supplies end-point as swiftly and safely as Chinese plate spinners?
Ref # 7 https://www.rt.com/business/555087-energy-warning-russia-sanctions/
No minimally informed no-nonsense mindset has thought out the foolish idea of coordinating the whole European continent in this self-destructive mission. Taking matters to an extreme, let´s assume that Europe completely weans itself – or is cut off — from Russian oil & gas imports tomorrow morning and everything else sourced in Russia. In that hypothetical case, Moscow may feel the financial problem possibly within 6 months… or maybe never. But if such event were to happen, the timing would be quite different as the EU would necessarily start imploding in 6 days and would achieve full implosion in 6 weeks. With the oil mad-ban Europe would badly need to find substitutes for Russian imports. The problem is such need cannot ever be satisfied fast enough and right enough no matter how it is diced or sliced. Triangulation means Europe will buy quality Russian imports via third countries only that at much higher prices
plug & play (not)
No, it is not anywhere near “plug & play” either. No. Several EU landlocked countries can only import nat-gas thru existing Russian pipeline unless a nightmarish and highly risky sea-land supply lines are established by different means going across complicated mountain ranges sometimes, a project which no one wants to entertain. Replacing Russian feeds & supply lines is an incommensurable task that Russia will not help out with either. Once Russia withstands the “ban Russian oil” idea, Europe will find itself in the worse of both worlds not being able to rewind back.
tit-for-tat ?
Also, the impact of the Russian reaction may most probably result to be disproportionate to the damage inflicted by an EU worldwide ban on Russian oil. Hence, ´asymmetrical´, simply because an exact ´tit-for-tat´ result is impossible to calculate for and let alone effectively achieve. If ever implemented, the unintended consequences of a haphazard decision such as proposed will necessarily mean for the EU either to (1) instantly back-pedal to square one or (2) finally suicidal Europe would follow through and achieve its goal. I kid you not. Other commodities could be included.
human food
And food for thought, as Europe would face famine in-its-face if grains from Ukraine, Belarus, Russia and elsewhere are tied up or absent by Russian retaliation or impossibility to deliver. And the lack of cheap diesel and natural gas from Russia means that farmers everywhere face sharply increased costs, whereby fertilizer is either not available at all, or too expensive to use, and thus crop yields will fall worldwide increasing the price of food products. Greenhouse producers in many parts of Europe have already shut down over high energy costs as prices stand today, not even thinking of the possibility of having Russian oil banned worldwide. Banning Russian oil from Europe can only back-fire.
Russian leverage
It´s impossible to approach all aspects involved at once, so let´s briefly touch upon part of Russia´s bargaining power.
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Russia does not want, let alone need, to defeat all of Europe. Just turning Germany — or Poland for that matter — into a messy mess would be more than enough for the whole EU to focus and reason out basic stuff.
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No uranium from Russia means the 3 remaining German nuclear power stations cannot be re-commissioned. Not having already scheduled substitute delivery of finely-tuned Russian uranium means an adaptive retro-fit with newly-sourced feed, which technically is risky and mission almost impossible which would take years.
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China + India + Brazil have ´free-patent-IP´ investments plans in Russia kicking off an entirely new ball game
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60% of German gas consumption is Russian. Today German industry would not survive without Russian gas.
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A partial or total reduction of Russian nat-gas and coal supply in retaliation for banning Russian oil would negatively and instantly impact Europe in many ways and the rest of the world with irregular market dynamics.
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If not delivered to the EU, the Russian nat-gas can be vented or flared at well-heads as there is plenty more.
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Russian oil can be sold elsewhere and/or stockpiled relatively rapidly and easily, or production can be slowed down without damaging reservoirs or wells. Russia will actually increase its “drill baby drill” policy.
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Paraphrasing former US Secretary of Treasury John Connally “Sorry, Russian commodities, your problem”
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Russia´s market is 85% of the world population largely under growth and just as fed up with the US-dollar reserve currency system. The EU trade embargo on Russia does not work per parallel imports from 3rd parties
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The defiant Russian economy is doing just fine, the Ruble is as strong as ever. US President Biden vowed “to make sure the pain of our sanctions hits the Russian economy, not ours” as if he were getting the picture…
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China and others definitely back Russia while the rest of the world de-dollarizes and does not sanction Russia
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There are $ 500 billion worth of physical Western assets in Russia that can be confiscated at any time.
Ref # 9 https://www.rt.com/business/555076-moscow-allows-foreign-goods/
Ref # 10 https://www.rt.com/business/553038-russia-lifts-ban-parallel-imports/
Ref # 12 https://www.lexology.com/library/detail.aspx?g=39ef25c3-1bf0-4029-bac2-de0ac11965da
Ref # 13 https://www.rt.com/business/555097-russia-sanctions-recession-economist/
Ref # 14 https://www.rt.com/business/555119-russia-india-oil-sales-increase/
eyes wide shut
Agreed, it´s a multi-variable environment in a context of constant change with plenty of moving parts interacting on each other. But, for starters, no ( or less) Russian nat-gas and no Russian oil means many unsolvable things for the EU today. We´d also need to add the impact of having no oil, coal, or gas substitutes fast enough in large enough quantities. All of that put together means no (or less) refined products, no intermediate distillates, no heavy-duty machinery (think mining) no nickel nor aluminum, cobalt or lead or magnesium, no neon, no grains or edibles at large, wheat, corn, barley, rye, soybeans, timber, paper, titanium, rocket engines, nitrogen fertilizer, crop nutrients, potash, less petrochemicals, iron ore, minerals and rare-earths, uranium for nuclear power plants, lithium for batteries, no inputs for production of metals, plastics, fabrics, pharmaceuticals, fertilizer, chemicals, etc., no manganese, chromium, platinum, essential palladium for catalytic converters, copper, tin, mica, wolfram, bismuth, kaolin, talcum, tungsten, diamonds, phosphates, sulphur… and even no gold. By the way, as we should all know, none of these can be printed.
Russian vacations
By the way, fewer distillates such as diesel and fuel oil means that private and public transportation and freight would slow down lots, also affecting heavy-duty vehicles, industrial machinery, and airplane travel. Also far lower tourism. So might as well shut down the EU and go away on vacation to beautiful Russia right? You won´t find that much food or heating or A/C either, just new massive unheard of migrations all around you. With less Russian imports, very huge German industrial giants run the certainly serious risk of shutting down otherwise continuous year-round processes which cannot be re-started and would mean irreparable harm & negative impact on the German economy and the rest of the world. And it’s not only Russian produce that would be missing. Also from Belarus and Ukraine itself + the Stans
mission impossible
Only mediocre light-brained European leadership can propose such suicidal move 100% guaranteed to blowback in-their-face much harder and faster than their original strike. It´d be like poking a bear ( sound familiar ? ) with a sharply pointed pole and pretending the beast to continue munching fish unbothered by the aggression itself and the presence of the aggressor, both. Not even young unexperienced teen-aged urban Canadians would think of doing such a thing. Of course, they would know that the bear will necessarily focus attention first ( already done that… ) then would rise on his hind legs and swing his sharp deadly paw wide and fast sooner than the EU can react to what just happened.
It isn´t European David vs. Russian Goliath either. It´s a well-fed and rested Russian Goliath with hypersonic weapons under his arm vs. a worn-out underweight European David with a worn-down sling and lots of very small stones…
to “Schwedt” or not to “Schwedt”
Schwedt is a key refinery for which the German government better find fast good & reliable sources of substitute Russian oil. If Schwedt does not deliver as usual, problems will be felt throughout Germany, Poland, and elsewhere.
But one problem is that Schwedt is majority-owned by Rosneft, the Russian state oil company which has control.
Now supposedly Schwedt has already dramatically reduced its dependence on Russian oil. But there´s a rub.
data laundromat
The rub is that EU member countries are very good at data laundering practices since inception of EU membership acceptance proceedings. Don´t trust me, ask Goldman Sachs they should know. So, for example, if imported Russian oil stays stationary in an EU depot for a couple of months it is “nationalized” and it is no longer considered to be ´Russian´. Also, the official oil inflow figures cheat, as for partial mixtures of Russian oil 45%+ 55% ´oil from somewhere else´ it is considered to be non-Russian, see? So Russian oil import substitution is a topic not yet anywhere close to being solved. And if Russian oil is banned right here, well Russians might deny delivery of either Russian oil or Russian gas – or whatever — over there. They defend their interests, not the EU´s.
Ref # 15 https://www.rt.com/business/555059-europe-needs-russian-gas/
Ref # 16 https://www.rt.com/business/555022-germany-petrol-shortages-russia-oil/
two to tango
Which brings us to the fact that the EU cannot dream of moving its pieces in a vacuum as if the Russian enemy were not there also playing in the same theater scenarios and moving its pieces alternatively. The instant the EU makes any headway whatsoever regarding the possible banning of Russian oil, then Russia will respond in kind or possibly before so as to carry out a pre-emptive deterrence sort of like a taste of things to come such as in Poland and Bulgaria
“We have every right to take a matching decision and impose an embargo on gas pumping through the [existing] Nord Stream 1 gas pipeline. So firstly, Russia may reduce or cut off its gas exports if the West goes ahead with a ban on Russian oil”. Understand? The EU attacks Russian oil and Russia counter-attacks reducing or cutting off Russian natural gas, etc. In other words, asymmetric non-military retaliation.
Ref # 17 https://www.bbc.com/news/58888451
Prices
If the Russian oil ban attempt goes ahead, agreed that the first thing that Russia may do is reduce or cut off nat-gas supplies – or other key commodities — with the stroke of a keyboard.. And it would be impossible to find replacements for Russian oils fast enough also. It would take years of adaptation and readjustments and it will still be much more expensive for European consumers. Russian Deputy Prime Minister Alexander Novak left on record that a “rejection of Russian oil would lead to catastrophic consequences for the global market causing oil prices to more than double to $300 a barrel”…possibly up to $ 500 pundits say assertively in specialized blogs. Be it $300 or $500 does the EU actually want that ? And Russia would end up earning much more by exporting far less. Trust US Treasury Secretary Janet Yellen, she said it, not me. And the higher the price, the higher the inflationary pressure and the higher the prices at the supermarkets already at approx. 35% p.a.. I can´t believe having to explain all this, really…
Ref # 18 https://www.bbc.com/news/business-60656673
Despite sanctions, Russia has almost doubled its monthly earnings from selling fossil fuels to the EU, according to the Centre for Research on Energy and Clean Air. The EU has imported about $23 billion dollars of fossil fuels per month from Russia since March 2022 as oil and gas prices have soared, compared with an average of about $ 12 billion in 2021. Meanwhile, transfers of oil between tankers have surged as buyers take advantage of discounted Russian crude. Different crude blends shipped from Russia may also contain oil from elsewhere which would also be affected.
logistics & freight
Banning Russian oil also means a logistics major reversal from-East-to-West to from-South-to-North. Such cardinal change is costly and risky. New shipping freighters are unprepared for unknown delivery schedules and product specs. Ports and oceans are different, shipping lanes are different, climate is different, seasonal availability of product and ship size and type are also different. That also involves lots of negotiating time, coordination, money, expertise, risk, permanent costs, and new dependencies with yet unknown trade and business partners, new modus operandi, brokers, insurance companies, etc. That is why every EU government has failed to build a realistic energy strategy that does not depend on Russia. Continuity, LNG & LPG terminal bottlenecks, and processing, availability, cost, no weather restrictions when needed. Pipe delivery is safe, dependable, and cheap, sea freight is risky and cost-prohibitive
nuclear blues
Germany had 15 nuclear plants in operation. The last 3 operating nuclear plants in Germany were scheduled to be decommissioned permanently in 2022. Part of the “Green Agenda” in the EU is to eliminate nuclear plants. France does not approve this, but is having technical trouble with its nuclear plants. France has said it will shut down 50% of its nuclear plants for critical maintenance this year at the worst possible timing imaginable.
Ref # 19 https://www.bbc.com/news/business-61298791
military impact
No readily available fuels of the right type (careful) mean no deployment no planes or other aircraft which means pretty much being stuck. Bad logistics, less food, no (or less) supplies, no heating to speak of. The European conventional military dependence on Russian fuels is beyond overwhelming, close to checkmate. Fuel imports are not anywhere near a military solution, just a way for civilians to survive if and when available and at a terribly high price.
“So the EU better be prepared to continue paying (many) billions of euros each week to Russia, supporting the Ruble and subsidizing its military in the process. It’s not just a short-term problem, either. If Germany manages over time (many years ?) to find adequate replacements for Russian natural gas, oil and coal, it will be at (tremendously) much higher prices. The era of cheap-Russian natural gas fueling the German economy is over. German energy-intensive companies, like its chemical giants, could not compete in the global market. Germany will face painful choices about the future of its industrial economy”. So without very specific and unreplaceable exclusive Russian grades of natural gas and oil and coal the European military are pretty much game-over.
unmanageable world finances
The camel is 990% overloaded and this one foolish decision may break its back. The world already rides on a wild $ 600+ trillion of a derivatives tiger that can only survive provided the corresponding counterparties do not fail.
“ Clearly, central banks in conjunction with their governments will have no option but to rescue their entire financial systems, which involves yet more central bank credit being provided on even greater scales than seen over Covid, supply chain chaos, and the provision of credit to pay for higher food and energy prices. It must be unlimited.”
So unless something dramatically favorable happens very soon, economic-financial considerations will have highly negative socio-political impact driving the crisis to a high-pitch climax with the pitchforks roaming about European streets. Per Rabobank: “ When the ´food system´ breaks down, everything will break down with it”.
Per The Guardian, “…Come October, it’s going to get horrific, truly horrific … a scale beyond what we can deal with”.
Europe´s mad ban on Russian oil is just another perfect example of sheer Anglo-Saxon European puppeteering.
Tyler Durden
Mon, 05/09/2022 – 02:00 -
- The Psychology Of Manipulation: 6 Lessons From The Master Of Propaganda
The Psychology Of Manipulation: 6 Lessons From The Master Of Propaganda
Authored by Ryan Matters via Off-Guardian.org,
Edward L. Bernays was an American business consultant who is widely recognized as the father of public relations. Bernays was one of the men responsible for “selling” World War 1 to the American public by branding it as a war that was necessary to “make the world safe for democracy”.
During the 1920s, Bernays consulted for a number of major corporations, helping to boost their business through expertly crafted marketing campaigns aimed at influencing public opinion.
In 1928, Edward Bernays published his famous book, Propaganda, in which he outlined the theories behind his successful “public relations” endeavours. The book provides insights into the phenomenon of crowd psychology and outlines effective methods for manipulating people’s habits and opinions.
For a book that’s almost 100 years old, Propaganda could not be more relevant today. In fact, its relevance is a testament to the unchanging nature of human psychology.
One of the key takeaways of the book is that mind control is an important aspect of any democratic society. Indeed, Bernays maintains that without the “conscious and intelligent manipulation of the organized habits and opinions of the masses”, democracy simply would not “work”.
We are governed, our minds molded, our tastes formed, our ideas suggested, largely by men we have never heard of. This is a logical result of the way in which our democratic society is organized. Vast numbers of human beings must cooperate in this manner if they are to live together as a smoothly functioning society.
According to Bernays, those doing the “governing” constitute an invisible ruling class that “understand the mental processes and social patterns of the masses”.
In Propaganda, Bernays draws on the work of Gustave Le Bon, Wilfred Trotter, Walter Lippmann, and Sigmund Freud (his uncle!), outlining the power of mass psychology and how it may be used to manipulate the “group mind”.
If we understand the mechanism and motives of the group mind, is it not possible to control and regiment the masses according to our will without their knowing about it?
I recently explored this topic in an essay about how occult rituals and predictive programming are used to manipulate the collective consciousness, influencing the thoughts, beliefs and actions of large groups of people, resulting in the creation of what occultists call “egregores”.
Here I have extracted some key insights from Bernays in an attempt to show how his book Propaganda is, in many ways, the playbook used by the globalist cryptocracy to process the group mind of the masses.
1. IF YOU MANIPULATE THE LEADER OF A GROUP, THE PEOPLE WILL FOLLOW
Bernays tells us that one of the easiest ways to influence the thoughts and actions of large numbers of people is to first influence their leader.
If you can influence the leaders, either with or without their conscious cooperation, you automatically influence the group which they sway.
In fact, one of the most firmly established principles of mass psychology is that the “group mind” does not “think”, rather, it acts according to impulses, habits and emotions. And when deciding on a certain course of action, its first impulse is to follow the example of a trusted leader.
Humans are, by nature a group species. Even when we are alone, we have a deep sense of group belonging. Whether they consciously know it or not, much of what people do is an effort to conform to the ideals of their chosen group so as to feel a sense of acceptance and belonging.
This exact method of influencing the leader and watching the people follow has been used extensively throughout the last few years. One notable instance that comes to mind is the horrendously inaccurate epidemiological models created by Neil Ferguson, which formed the basis for Prime Minister Boris Johnson’s lockdown policies.
Once Johnson was convinced of the need to lockdown and mask up, the people gladly followed.
2. WORDS ARE POWERFUL: THE KEY TO INFLUENCING A GROUP IS THE CLEVER USE OF LANGUAGE
Certain words and phrases are associated with certain emotions, symbols and reactions. Bernays tell us that through the clever and careful use of language, one can manipulate the emotions of a group and thereby influence their perceptions and actions.
By playing upon an old cliché, or manipulating a new one, the propagandist can sometimes swing a whole mass of group emotions.
The clever use of language has been employed throughout the Covid-19 pandemic to great effect. An obvious example of this was when the definition of “vaccine” was changed to include injections utilising experimental mRNA technology.
You see, the word “vaccine” is associated in the public mind with a certain picture – that of a safe, proven medical intervention that is not only life-saving but absolutely necessary.
If governments had told people to go get their “gene therapies”, the vast majority of the public would likely question the motives behind such a campaign; they would feel extremely sceptical because the phrase “gene therapy” is not associated with the same images, emotions and feelings as “vaccine”.
The same goes for the word “pandemic”, the definition of which was also changed. The word “pandemic” is generally associated in the collective consciousness with fear, death, chaos and emergency (largely thanks to Hollywood and the myriad virus films it has released over the years).
3. ANY MEDIUM OF COMMUNICATION IS ALSO A MEDIUM FOR PROPAGANDA
Any system of communication, whether phone, radio, print, or social media, is nothing more than a means of transmitting information. Bernays reminds us that any such means of communication is also a channel for propaganda.
There is no means of human communication which may not also be a means of deliberate propaganda.
Bernays goes on to stress that a good propagandist must always keep abreast of new forms of communication, so that they may co-opt them as means of deliberate propaganda.
Indeed, systems that most people would associate with freedom of speech and democracy are none other than means of circulating propaganda. Facebook fact-checkers, Big Tech censorship and YouTube’s Covid banners certainly fall into this category.
Other examples of this include the recent algorithm updates made by various search engines (including Google and DuckDuckGo) to penalize Russian websites. Although this should come as no surprise (Google has been engaging in this type of “shadow propaganda” for many years).
4. REITERATING THE SAME IDEA OVER AND OVER CREATES HABITS AND CONVICTIONS
Although Bernays terms this a technique used by the “old propagandists”, he, nonetheless, recognizes its usefulness.
It was one of the doctrines of the reaction psychology that a certain stimulus often repeated would create a habit, or that the mere reiteration of an idea would create a conviction.
Repeating the same idea or the same “mantra” again and again is a form of neuro-linguistic programming aimed at instilling certain concepts or emotions into the subconscious mind. Indeed, people who are feeling sad or depressed are often advised to repeat to themselves an uplifting saying or affirmation.
There are many examples of this simple, yet effective, technique being used to great effect over the last few years. Think Q’s “trust the plan”, the globalist favourite, “build back better” or the incessant repetition of that twisted phrase, “trust the science”. Included in this category are the 24/7-in-your-face death statistics and case numbers, aimed at promoting the illusion of a pandemic.
There are more obvious examples of this as well, such as news anchors in different areas all reading from the exact same script.
5. THINGS ARE NOT DESIRED FOR THEIR INTRINSIC WORTH, BUT RATHER FOR THE SYMBOLS THAT THEY REPRESENT
After studying why people make certain purchasing decisions, Bernays observed that people often don’t desire something for its usefulness or value, but rather because it represents something else which they unconsciously crave.
A thing may be desired not for its intrinsic worth or usefulness, but because he has unconsciously come to see in it a symbol of something else, the desire for which he is ashamed to admit to himself.
Bernays gives the example of a man buying a car. From the outside, it may appear as if the man is buying the car because he needs a means of transport, but in actuality, he is buying it because he craves the elevated social status that comes with owning a motor vehicle.
This idea, too, applies to the events over the last few years.
For example, masks are a symbol of compliance. Everyone knows they don’t work but they wear them because of their desire to “fit in”, and to be seen as an upstanding citizen who follows the rules. Covid-19 injections are also a symbol and many people choose to get them because they have a desire to avoid being called an “anti-vaxxer” or a “conspiracy theorist”.
6. ONE CAN MANIPULATE INDIVIDUAL ACTIONS BY CREATING CIRCUMSTANCES THAT MODIFY GROUP CUSTOMS
Lastly, Bernays tells us that if one wishes to manipulate the actions of an individual, the most effective way to do so is to create circumstances that engender the desired behaviour.
What are the true reasons why the purchaser is planning to spend his money on a new car instead of on a new piano? […] He buys a car, because it is at the moment the group custom to buy cars. The modern propagandist therefore sets to work to create circumstances which will modify that custom.
For example, why all of a sudden does everyone “stand with Ukraine”? According to Bernays, it’s not because there is a war going on and innocent people need our love and support, but rather because it is the new “group custom” to do so.
The process of altering group customs begins from the top down. In every nation or social clique, there are leaders, public figures and influencers. Manipulating those with the most sway eventually filters down into the public mind. That is why when a celebrity decides to wear something extravagant on the red carpet, a whole new trend can arise overnight.
Similarly, at the beginning of the Covid saga and then the Russia-Ukraine war, the media were quick to circulate stories of celebs “catching Covid” and urging people to stay home, or public figures condemning Russian actions and calling for stricter sanctions (which just so happened to hurt the West more than they hurt Russia).
THE PROPAGANDA PLAYBOOK
The world is a volatile place right now. Things seem to change quickly and no one knows what might happen next. However, amid all this chaos there is one thing that has not changed and is unlikely to change any time soon, and that is human psychology.
Because of this, the tactics used to manipulate people’s thoughts, beliefs and actions have not changed either. In fact, most of them were outlined in detail 100 years ago by Edward Bernays in his 1928 book, Propaganda.
That’s right, the Puppet Master’s playbook isn’t a secret. It’s right there, freely available to anyone who cares to understand how the powers that be seek to influence them on a daily basis.
* * *
Propaganda by Edward Bernays has now been added to our Forbidden Library. Read it now, along with other forbidden books.
Tyler Durden
Sun, 05/08/2022 – 23:20 - Hedge Funds Are Flooding Into Energy Stocks At The Fastest Pace In Years
Hedge Funds Are Flooding Into Energy Stocks At The Fastest Pace In Years
It didn’t take long for hedge funds to completely reverse their aversion towards energy.
Recall back in the middle of March, when not long after oil briefly soared to the highest level in 14 years, hedge funds just couldn’t sell oil fast enough – contrary to traders of physical oil who were buying up every last drop, be it real or synthetic – they could find. It’s also one of the primary reasons why despite dismal fundamentals which scream oil in the mid to upper-$100 range, the black gold would get slammed down every time it tried to make a break for it.
So fast forward to today, when oil is now well back over the price hit when Biden announced his SPR release, and energy stocks – in the words of Goldman’s head of hedge fund sales Tony Pasquariello – remain the only place to hide from the market’s vicious selloff. A big reason for that is that hedge funds have finally capitulated on dumping and shorting energy, and have turned full-bore oil bulls.
According to the latest weekly report by Goldman’s Prime Brokerage group (full note available to professional subscribers), amid rising crude oil prices, Energy was the only US sector that saw positive price returns this week, outperforming the S&P 500 index by +7.7% (largest spread in 8 weeks). More importantly, it was also among the most $ net bought US sectors on the GS Prime book.
Remarkably, hedge funds bought US Energy stocks at the fastest pace since Mar ’20 amid continued sector outperformance.
According to GS Prime, “this week’s net buying in US Energy was the largest since Mar 2020 (1-Yr Z score +1.8), driven by long buys outpacing short sales nearly 4 to 1; Integrated Oil & Gas, E&P, and Oil & Gas Equip & Services were among the most net bought subindustries, while Storage & Transportation and Oil & Gas Drilling were among the most net sold.”
Some more details on the recent buying flurry: hedge funds were net buyers of US Energy stocks in 4 of the past 5 weeks, driven by long buys outpacing short sales 3 to 1. More notably, the uptick in $ gross trading flow in US Energy over the past month was the largest over any 4-week period since Mar ’20.
Still, before we get calls of “hedge funds are rotating in so dump it all”, here is some context: energy now makes up a paltry 4.4% of overall US Net exposure (vs. an even paltrier 2.1% at the start of 2022), and while this is the highest level since Aug ’19, it is just in the 37th %ile vs. the past five/ten years.
How much more can the rotation into energy be in the coming weeks and months? Well, if we are about to experience a reversion to the mean, it could be a lot because while the Bloomberg commodity spot index is clearly trading at all time highs…
… when put in the context of equities, well… see for yourselves:
Tyler Durden
Sun, 05/08/2022 – 22:45 - Victor Davis Hanson: California Can't Go On Like This
Victor Davis Hanson: California Can’t Go On Like This
The following is an abridged version of a talk delivered on Wednesday, April 20, 2022, during the question and answer portion of an OpenTheBooks.com virtual event. Videos, media, and other speeches are available at YouTube/OpenTheBooks.
Photo by Sterling Davis on Unsplash Victor Davis Hanson, earned his B.A. at the University of California, Santa Cruz, and his Ph.D. in classics from Stanford University. He is the author of several books, including A War Like No Other: How the Athenians and Spartans Fought the Peloponnesian War and The Second World Wars: How the First Global Conflict Was Fought and Won. Dr. Hanson is also a senior fellow at the Hoover Institution and a professor of classics emeritus at California State University, Fresno.
QUESTON:
Dr. Hanson, You and I are both native Californians. So looking at California, do you think we’ve lost the state? Or do you have any strategy advice to reverse this current downward trend set up that we have, and bring some success to us? Just in the state of California.
ANSWER — VICTOR DAVIS HANSON:
California is sort of like a prodigal son. We’ve all had members of our family that we love, and we grew up with and we thought they were stable, and then they take drugs or they get wayward, they get in trouble, but we don’t disown them. Well, we don’t move away from them. We try to work with them and hope they can find redemption.
I think that’s what we’re doing in California.
So, there isn’t one Republican statewide officeholder. Republicans only have 11 of 53 Congressional seats. The rest are Democrats. Both houses of the state legislature have super majorities (Democrats). The ninth federal appellate court is the most liberal in the nation. So, they got what they wanted; the left did.
The Left got what they wanted.
Because about four or five to 6 million voters— we don’t know the exact number of the old Ronald Reagan, Pete Wilson, Arnold Schwarzenegger voters (32 years of Republican governors) — they moved. And they moved because:
- paying the highest electricity, gas, sales, income tax in the nation.
- 47/50 rated schools
- terrible infrastructure, 48th on roads and bridges.
- And California had high crime.
That was a bad deal compared to Texas, or Florida or Wyoming or Nevada.
And, then, we had $6 trillion dollars of market capitalized wealth that came in to Silicon Valley in 30 years, and that created a whole class of coastal millionaires, who were never subjected to the consequences or the ramifications (of bad public policy).
So, walls on the border were terrible, but I need a wall around my estate in Palo Alto. Teachers unions are great, but my kid goes to the Menlo school or Sacred Heart. Twenty-seven cents peak electricity is essential. But it’s 70 degrees in Atherton all year round (Atherton is the richest city in America).
That kind of hypocrisy really hurt us.
Then, let’s face it, we had 10 million people come here illegally from Mexico. And it wasn’t like the first diaspora of the 80s, 70s, or 60s of northern Mexico. These were people were indigenous people and very poor, without a high school diploma, and subject to a great deal of racism in Mexico.
They came with far fewer skills, and they came in mass over the last 30 years. And they were promised open borders for their families and government support for their families. And they repaid that fee by being doctrinaire and leftist Democrats.
So, that’s where we are now: the combination of a lot of tech money, and you know, and then our universities which were the best in the country — Stanford, Berkeley, Caltech, UCLA — they became engines of this paradigm and the middle class left.
…
So California was lost.
And CA has the highest taxes costs cost per square footage, highest gasoline, highest electricity, highest number in poverty. Twenty-one percent of the population lives in poverty. One out of three people in public assistance (across America) live in California. Half the homeless live in California.
However, you know, nothing’s static. So this Latino population has actually moved much slower than one would have liked. But it’s very similar to the Italian diaspora from Southern Italy and Sicily in the 1920s or late 19th century.
And today’s Hispanics are becoming middle and upper middle class.
And guess what? They don’t want people coming in from Mexico with 13 tattoos into their schools. They want advanced placement for their children, not bilingual education. And so they’re starting to – for the first time – vote conservatively.
And under this Biden administration, there’s a phenomenon where they’re paying $7 for diesel fuel a gallon. Six dollars and thirty cents today for gasoline. Building materials are unaffordable.
So, upper middle class and working and middle class Hispanics (that are 40% of the CA population) are undergoing — I’m not even sure they’re fully aware of it in the abstract — the most radical political shift in my lifetime.
And I think that it’s going to be across California and even nationwide.
Should they exercise that political clout, then, I think you’d see the beginning of real change back to what California could be.
Because we’ve done — just to finish very quickly: We’ve reached the maximum extent of the left-wing progressive experiment without total chaos.
Anything more than we do letting criminals out in Los Angeles and San Francisco under these crazy Soros-funded DA’s, letting homeless people fornicate or have excrement on the sidewalk, being easy on hit and run drivers and those with three DUIs – that is what we have now.
And everybody understands that it doesn’t work.
I was in San Francisco not too long ago, and people are parking with their windows down. Or they have signs on their window shield, “nothing in the car.” Or they unlock their cars. And these are not clunkers. These are Lexus’ and Volvos and they are basically saying to the criminal element… come in scrounge around, there’s nothing there.
But please don’t break my $1,600 electrified windshield because if you do, I know they won’t prosecute you. And I’m out $1,600.
…
That’s something that’s pre-civilizational. And there are groups of people who are changing their political allegiance. So, I think I’m cautiously optimistic that what can’t go on won’t go on.
Tyler Durden
Sun, 05/08/2022 – 22:10 - Bill Maher Refuses To Follow Democrats Into The Woke Abyss
Bill Maher Refuses To Follow Democrats Into The Woke Abyss
HBO Host Bill Maher is now openly mocking ‘woke’ Democrats for dying on the hill of gender politics while more important issues such as Roe V. Wade threaten core Democratic principles.
“Louisiana wants to pass a law that says flat out if you get an abortion, you get charged with murder. Wow,” said Maher. “Suddenly getting the right pronoun doesn’t seem so big, does it?“
Kudos to Maher for pointing out his own party’s descent into idiocracy.
“Oklahoma already has one on the books. Six weeks, can’t get an [abortion] after six weeks,” said the comeidan, adding “Most women don’t even know they’re pregnant at six weeks.
“They don’t even know if they like the guy. Six weeks. That’s a quick look.”
Maher even knocked pro-abortion protesters – saying that the claim that ending Roe v. Wade would send abortion rights back 50 years is “factually inaccurate,” adding that the ruling is not “settled law,” and wouldn’t have the impact that pro-choice protesters think it would.
‘Most abortions now, even when you go to a clinic, are done with the pill,’ Maher said. The pill. And pills are easy to get in America.’
‘So, you know, for the people who say we’re going back to 1973, we’re not. That’s just factually inaccurate.’ -Daily Mail
Maher even pointed out that abortion rights in many European countries are far more restrictive than in the US.
“The modern countries of Europe are way more restrictive than we are or what they’re even proposing,” said Maher. “If you are pro-choice, you would like it a lot less in Germany, and Italy, and France, and Spain, and Switzerland.”
This week Bill Maher learned European countries have far more restrictive abortion laws than we do in America and that women report being pro-life more often than men. How many people have no clue about this or about fetal pain science? If they did, some might change. pic.twitter.com/8RjUXtrbVX
— Robby Starbuck (@robbystarbuck) May 8, 2022
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Germany, France and Spain all set an abortion limits at 14 weeks into the pregancy, with Italy and Switzerland setting the cap at 12 weeks.
Even the more liberal Norway and Denmark set the limit at 12 weeks, with Sweden limiting abortions at 18 weeks.
In the U.S., only 22 states set abortion limits at 20 weeks or less, according to the Guttmacher Institute, and most states that have set a shorter time frame cannot enforce the law as they have faced numerous legal challenges. -Daily Mail
Meanwhile, Maher also put Democrats’ primal screaming over Roe v. Wade in perspective, saying “This whole bulls*** argument about, ‘Well, it’s settled law.’ So was segregation,” adding “So that’s a bulls*** argument. It’s what you think.”
The rational Democrat strikes again…
Tyler Durden
Sun, 05/08/2022 – 21:35 - Escobar: Megalopolis x Russia – Total War
Escobar: Megalopolis x Russia – Total War
After careful evaluation, the Kremlin is rearranging the geopolitical chessboard to end the unipolar hegemony of the “indispensable nation”.
“But it’s our fate / To have no place to rest, / As suffering mortals / Blindly fall and vanish / From one hour / To the next, / Like water falling / From cliff to cliff, downward / For years to uncertainty.”
– Holderlin, Hyperion’s Fate Song
Operation Z is the first salvo of a titanic struggle: three decades after the fall of the USSR, and 77 years after the end of WWII, after careful evaluation, the Kremlin is rearranging the geopolitical chessboard to end the unipolar hegemony of the “indispensable nation”. No wonder the Empire of Lies has gone completely berserk, obsessed in completely expelling Russia from the West-centric system.
The U.S. and its NATO puppies cannot possibly come to grips with their perplexity when faced with a staggering loss: no more entitlement allowing exclusive geopolitical use of force to perpetuate “our values”. No more Full Spectrum Dominance.
The micro-picture is also clear. The U.S. Deep State is milking to Kingdom Come its planned Ukraine gambit to cloak a strategic attack on Russia. The “secret” was to force Moscow into an intra-Slav war in Ukraine to break Nord Stream 2 – and thus German reliance on Russian natural resources. That ends – at least for the foreseeable future – the prospect of a Bismarckian Russo-German connection that would ultimately cause the U.S. to lose control of the Eurasian landmass from the English Channel to the Pacific to an emerging China-Russia-Germany pact.
The American strategic gambit, so far, has worked wonders. But the battle is far from over. Psycho neo-con/neoliberalcon silos inside the Deep State consider Russia such a serious threat to the “rules-based international order” that they are ready to risk if not incur a “limited” nuclear war out of their gambit. What’s at stake is nothing less than the loss of Ruling the World by the Anglo-Saxons.
Mastering the Five Seas
Russia, based on purchasing power parity (PPP), is the 6th economy in the world, right behind Germany and ahead of both the UK and France. Its “hard” economy is similar to the U.S. Steel production may be about the same, but intellectual capacity is vastly superior. Russia has roughly the same number of engineers as the U.S., but they are much better educated.
The Mossad attributes Israel’s economic miracle in creating an equivalent of Silicon Valley to a base of a million Russian immigrants. This Israeli Silicon Valley happens to be a key asset of the American MICIMATT (military-industrial-congressional-intelligence-media-academia-think tank complex), as indelibly named by Ray McGovern.
NATOstan media hysterically barking that Russia’s GDP is the size of Texas is nonsense. PPP is what really counts; that and Russia’s superior engineers is why their hypersonic weapons are at least two or three generations ahead of the U.S. Just ask the indispensable Andrei Martyanov.
The Empire of Lies has no defensive missiles worthy of the name, and no equivalents to Mr. Zircon and Mr. Sarmat. The NATOstan sphere simply cannot win a war, any war against Russia for this reason alone.
The deafening NATOstan “narrative” that Ukraine is defeating Russia does not even qualify as an innocuous joke (compare it with Russia’s “Reach Out and Touch Someone” strategy). The corrupt system of SBU fanatics intermingled with UkroNazi factions is kaput. The Pentagon knows it. The CIA cannot possibly admit it. What the Empire of Lies has sort of won, so far, is a media “victory” for the UkroNazis, not a military victory.
Gen Aleksandr Dvornikov, of Syria fame, has a clear mandate: to conquer the whole of Donbass, totally free up Crimea and prepare the advance towards Odessa and Transnistria while reducing a rump Ukraine to the status of failed state without any access to the sea.
The Sea of Azov – linked to the Caspian by the Don-Volga canal – is already a Russian lake. And the Black Sea is next, the key connection between the Heartland and the Mediterranean. The Five Seas system – Black, Azov, Caspian, Baltic, White – enshrines Russia as a de facto continental naval power. Who needs warm waters?
Moving “at the speed of war”
The pain dial, from now on, will go up non-stop. Reality – as in facts on the ground – will soon become apparent even to the NATOstan-wide LugenPresse.
The woke Chairman of the Joint Chiefs of Staff, Gen Mark Milley, expects Operation Z to last years. That’s nonsense. The Russian Armed Forces may afford to be quite methodical and take all the time needed to properly demilitarize Ukraine. The collective West for its part is pressed for time – because the blowback from the real economy is already on and bound to become vicious.
Defense Minister Shoigu has made it quite clear: any NATO vehicles bringing weapons to Kiev will be destroyed as “legitimate military targets”.
A report by the scientific service of the Bundestag established that training of Ukrainian soldiers on German soil may amount, under international law, to participation in war. And that gets even trickier when coupled with NATO weapons deliveries: “Only if, in addition to the supply of weapons, the instruction of the conflict party or training in such weapons were also an issue would one leave the secure area of non-warfare.”
Now at least it’s irretrievably clear how the Empire of Lies “moves at the speed of war” – as described in public by weapons peddler turned Pentagon head, Lloyd “Raytheon” Austin. In Pentagonese, that was explained by the proverbial “official” as “a combination of a call center, a watch floor, meeting rooms. They execute a battle rhythm to support decision-makers.”
The Pentagonese “battle rhythm” offered to a supposedly “credible, resilient and combat-capable Ukraine military” is fed by a EUCom system that essentially moves weapons orders from Pentagon warehouses in the U.S. to branches of the Empire of Bases in Europe and then to the NATO eastern front in Poland, where they are trucked across Ukraine just in time to be duly incinerated by Russian precision strikes: the wealth of options include supersonic P-800 Onyx missiles, two types of Iskander, and Mr. Khinzal launched from Mig-31Ks.
Kremlin spokesman Dmitry Peskov has stressed Moscow is perfectly aware the U.S., NATO and UK are transferring not only weapons but also loads of intel. In parallel, the collective West turns everything upside down 24/7 shaping a new environment totally geared against Russia, not caring for even a semblance of partnership in any area. The collective West does not even consider the possibility of dialogue with Russia.
Hence talking to Putin is “a waste of time” unless a “Russian defeat” in Ukraine (echoing strident Kiev P.R.) would make him “more realistic”. For all his faults, Le Petit Roi Macron/McKinsey has been an exception, on the phone with Putin earlier this week.
The neo-Orwellian Hitlerization of Putin reduces him, even among the so-called Euro-intelligentzia, to the status of dictator of a nation chloroformed into its 19th century nationalism. Forget about any semblance of historical/political/cultural analysis. Putin is a late Augustus, dressing up his Imperium as a Republic.
At best the Europeans preach and pray – chihuahuas yapping to His Master’s Voice – for a hybrid strategy of “containment and engagement” to be unleashed by the U.S., clumsily parroting the scribblings of denizens of that intellectual no-fly zone, Think Tankland.
Yet in fact the Europeans would rather “isolate” Russia – as in 12% of the world’s population “isolating” 88% (of course: their Westoxified “vision” completely ignores the Global South). “Help” to Russia will only come when sanctions are effective (as in never: blowback will be the norm) or – the ultimate wet dream – there’s regime change in Moscow.
The Fall
UkroNazi P.R. agent Ursula von der Lugen presented the sixth sanction package of the Europoodle (Dis)Union.
Top of the bill is to exclude three more Russian banks from SWIFT, including Sberbank. Seven banks are already excluded. This will enforce Russia’s “total isolation”. It’s idle to comment on something that only fools the LugenPresse.
Then there’s the “progressive” embargo on oil imports. No more crude imported to the EU in six months and no more refined products before the end of 2022. As it stands, the IEA shows that 45% of Russia’s oil exports go to the EU (with 22% to China and 10% to the U.S.). His Master’s Voice continues and will continue to import Russian oil.
And of course 58 “personal” sanctions also show up, targeting very dangerous characters such as Patriarch Kirill of the Orthodox Church, and the wife, son and daughter of Kremlin spokesman Dmitri Peskov.
This stunning display of stupidity will have to be approved by all EU members. Internal revolt is guaranteed, especially from Hungary, even as so many remain willing to commit energy suicide and mess up with the lives of their citizens big time to defend a neo-Nazi regime.
Alastair Crooke called my attention to a startling, original interpretation of what’s goin’ on, offered in Russian by a Serbian analyst, Prof. Slobodan Vladusic. His main thesis, in a nutshell: “Megalopolis hates Russia because it is not Megalopolis – it has not entered the sphere of anti-humanism and that is why it remains a civilization alternative. Hence Russophobia.”
Vladusic contends that the intra-Slav war in Ukraine is “a great catastrophe for Orthodox civilization” – mirroring my recent first attempt to open a serious debate on a Clash of Christianities.
Yet the major schism is not on religion but culture: “The key difference between the former West and today’s Megalopolis is that Megalopolis programmatically renounces the humanistic heritage of the West.”
So now “it is possible to erase not only the musical canon, but also the entire European humanistic heritage: the entire literature, fine arts, philosophy” because of a “trivialization of knowledge”. What’s left is an empty space, actually a cultural black hole, “filled by promoting terms such as ‘posthumanism’ and ‘transhumanism’.”
And here Vladusic gets to the heart of the matter: Russia fiercely opposes the Great Reset concocted by the “hackable”, self-described “elites” of Megalopolis.
Sergey Glazyev, now coordinating the draft of a new financial/monetary system by the Eurasia Economic Union (EAEU) in partnership with the Chinese, adapts Vladusic to the facts on the ground (here in Russian, here in an imperfect English translation).
Glazyev is way more blunt than in his meticulous economic analyses. While noting the Deep State’s aims of destroying the Russian world, Iran and block China, he stresses the U.S. “will not be able to win the global hybrid war”. A key reason is that the collective West has “put all independent countries in front of the need to find new global currency instruments, risk insurance mechanisms, restore the norms of international law and create their own economic security systems.”
So yes, this is Totalen Krieg, Total War – as Glazyev spells it out with no attenuation, and how Russia denounced it this week at the UN: “Russia needs to stand up to the United States and NATO in its confrontation, bringing it to its logical conclusion, so as not to be torn between them and China, which is irrevocably becoming the leader of the world economy.”
History may eventually register, 77 years after the end of WWII, that neocon/neoliberalcon psychos in Washington silos instigating an inter-Slavic war by ordering Kiev to launch a blitzkrieg against Donbass was the spark that led to the Fall of the U.S. Empire.
Tyler Durden
Sun, 05/08/2022 – 21:00 - Morgan Stanley: "We Live In The Most Chaotic, Hard-To-Predict Macroeconomic Times In Decades"
Morgan Stanley: “We Live In The Most Chaotic, Hard-To-Predict Macroeconomic Times In Decades”
By Seth Carpenter, Global Chief Economist of Morgan Stanley
How Close To The Edge
Fears of a global recession abound, and in the past three months we have revised our global growth forecast down 170bp while inflationary pressures have risen.
We live in the most chaotic, hard-to-predict macroeconomic times in decades. The ingredients for a global recession are on the table. My colleague Mike Wilson is calling for a substantial further selloff in US equities, even in the base case of no recession. Consider that the recovery from Covid means companies that have over-earned – especially those producing consumer goods whose demand has soared – will face a reversal of fortune. What’s more, higher rates and falling growth are never good for valuations. Avoiding a recession is our base case, but markets will have to confront the rising probability of one regardless.
China’s sharp slowdown is clear. Last year, the Chinese government embarked on a regulatory reset that caused a marked downshift in the economy. Then successive waves of Covid buffeted the country. The Covid-zero policy has throttled household spending and has not left the productive side of the economy unscathed. Critically large cities like Shanghai and Shenzhen have been locked down, and cases in other major cities have been rising. The risk of an extended contraction is plain to see.
For Europe, the slowdown is more prospective because recent PMIs and confidence surveys suggest continued momentum. But since Russia’s invasion of Ukraine started, downside macroeconomic risks have risen. The sharp spike in energy and food prices will impose a tax on the European consumer. And as the Russian invasion of Ukraine continues, the prospect of an embargo on oil imports from Russia is becoming more certain. The second half of the year looks decidedly worse for euro area growth than the first half. Accompanying these headwinds, high inflation has spurred the ECB to normalize policy. While ending QE and bringing the depo rate to zero are highly unlikely to pitch Europe into recession, markets are forward looking, and the selloff in euro area sovereigns is likely just the start of tightening financial conditions.
In the US, GDP contracted in 1Q. To be sure, domestic final spending was solid, and the culprits were inventories and exports. Weak exports, however, warn of softening global growth. Nonfarm payrolls for April rose by 428k, extending a string of very strong job gains. But just as in Europe, we have yet to see the hit to consumer spending from the surge in food and energy prices, and our recent work shows that the drag can be noticeable (see Slower Growth Ahead). Moreover, mortgage rates have gone above 5% for the first time in 12 years, and with a shortage of new homes driving prices higher and higher, home affordability is the worst in decades. And of course, the Fed has signaled a fairly aggressive set of rate hikes that we see taking the federal funds rate past 2.5% this year as the balance sheet starts to shrink. The direction of travel for the US economy is clear, though for now it remains strong.
So why not call for a global recession? For now, even if Chinese GDP sees a modest sequential contraction in 2Q, mounting fiscal policy and receding Covid should allow for a subsequent rebound. A European embargo on Russian oil is likely to be manageable, while for a recession, we would need a scenario where all energy imports from Russia including natural gas are cut off abruptly. And the Fed is feeling its way with policy, trying to slow the economy to rein in inflation but willing to reverse course at the first sign of doing too much. We would need a European contraction to hit the US economy after enough front-loaded policy tightening is in train to trigger a recession. The alignment of those unlucky stars is possible, hence the rising risk, but it is not something I would count on.
Tyler Durden
Sun, 05/08/2022 – 20:30 - Pro-Abortion Activists Target Homes Of Justices Kavanaugh And Roberts
Pro-Abortion Activists Target Homes Of Justices Kavanaugh And Roberts
Authored by Naveen Athrappully via The Epoch Times (emphasis ours)
Photo via Fox News Around 100 pro-abortion activists took their protests to the homes of two conservative U.S. Supreme Court Justices on Saturday night in the aftermath of a leaked draft opinion, according to which the landmark 1973 Roe v. Wade ruling is set to be overturned.
Protests kicked off from a local café at Chevy Chase, and protestors first headed off to the home of Justice Brett Kavanaugh, then toward the residence of Chief Justice John Roberts, located just half a mile away, and finally back to Kavanaugh’s, where police asked them to disperse.
The energy is markedly more negative outside Kavanaugh’s house. The anger has become much more palpable than outside any other justices’ house. pic.twitter.com/zY2OY34hcA
— Douglas Blair (@DouglasKBlair) May 8, 2022
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During the demonstration, protestors chanted slogans like “Keep abortion safe and legal.” Left-wing group ShutDown DC is planning on holding a protest outside Supreme Court Justice Samuel Alito’s house on May 9.
“The evening of Monday, May 9, we will hold a vigil for all these rights that Alito is threatening to take away. Because it’s been impossible to reach him at the Supreme Court (especially now with the enormous fences), we will do it at his home,” said an online description of the event.
“At 7:30 pm we will gather at a nearby location and walk together to his house. At the foot of his driveway, on the public street, we will light candles and speakers will share their testimony.”
According to the leaked Supreme Court draft opinion, the justices have decided to overturn the 1973 decision that categorized abortion as a constitutional right.
Alito wrote that the 1973 judgment was “egregiously wrong from the start,” its reasoning was “exceptionally weak,” and the decision has had “damaging consequences.”
Numerous states are set to ban abortion once the Supreme Court strikes down Roe v. Wade. States that continue to allow abortion may see an influx of pregnant women seeking such services.
A crowd of angry pro-abortion protesters have marched to a house believed to belong to a U.S. Supreme Court Justice. Video by @DouglasKBlair. #prochoice #prolife #abortion pic.twitter.com/e4mICRYjPU
— Andy Ngô 🏳️🌈 (@MrAndyNgo) May 8, 2022
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Roberts called the unprecedented leak “absolutely appalling” during a recent talk with a group of lawyers and judges. He also called the individual who leaked the document “foolish” if they believed the action would affect the final court judgment.
“To the extent this betrayal of the confidences of the Court was intended to undermine the integrity of our operations, it will not succeed. The work of the Court will not be affected in any way,” Roberts said.
Protesters showed up at Supreme Court justices homes today after left wingers posted their addresses online and the Biden White House refused to condemn these private home protests. Here were some of their signs courtesy of @DouglasKBlair. pic.twitter.com/ea0YIAO6l2
— Clay Travis (@ClayTravis) May 8, 2022
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“This was a singular and egregious breach of that trust that is an affront to the Court and the community of public servants who work here.”
Kavanaugh is one of the five justices known to have cast the preliminary votes to overturn Roe v. Wade. Roberts opposed striking it down completely, instead batting for a compromise decision that would leave some parts of the original ruling intact while keeping abortion limited to 15 weeks of pregnancy.
Amid protests triggered by the draft opinion, Justice Clarence Thomas, one of the most conservative on the nine-member Supreme Court panel, stated that the court cannot be “bullied.”
As a society, “we are becoming addicted to wanting particular outcomes, not living with the outcomes we don’t like,” Thomas said, according to Reuters. “We can’t be an institution that can be bullied into giving you just the outcomes you want. The events from earlier this week are a symptom of that.”
* * *
[ZH and a reminder…]
Parents did far less than this at school board meetings (literally just getting up to speak in public meetings) and the DOJ tried to investigate them as domestic terrorists. https://t.co/I4opw4CLNI
— Rachel Bovard (@rachelbovard) May 8, 2022
Tyler Durden
Sun, 05/08/2022 – 20:11 - Hedge Fund CIO: "We're On Our Own Now, Without A Fed Safety Net. It's A Sobering Reality"
Hedge Fund CIO: “We’re On Our Own Now, Without A Fed Safety Net. It’s A Sobering Reality”
By Eric Peters, CIO of One River Asset Management
Hope all goes well… “For as long as we’ve been trading, every time stocks fell hard, you knew they’d step in and cut rates,” said the CIO, describing the Fed Put. “But with the kind of inflation we’re seeing now, there’s no way the Fed can cut rates just because stocks fall,” he said. “Even if the S&P were to puke 25% in a week or two, the best you could hope for from the Fed is some kind of statement saying they’ll slow down, maybe pause.”
US stocks had just finished lower for the 5th consecutive week. “What we’re seeing is the market pricing out the Fed Put. We’re on our own now, without a safety net. It’s a sobering reality, a bit like trading crypto.”
Overall:
“Our plans and policies have produced the strongest job creation economy in modern times,” declared Biden. “The unemployment rate now stands at 3.6% – the fastest decline in unemployment to start a President’s term ever recorded,” he boasted. “There have been only 3 months in the last 50yrs where the unemployment rate in America is lower than it is now – a direct result of the American Rescue Plan, our COVID vaccination program, and my plan to grow our economy from the bottom up and middle out.”
No one could’ve known exactly what would happen when Biden signed into law the $1.9trln American Rescue Plan in March 2021. Now we do. “Inflation is much too high,” said Powell, following his 50bp rate hike, and describing plans to reduce the Fed’s $9trln balance sheet.
“We understand the hardship it is causing, and we’re moving expeditiously to bring it back down,” pledged the Fed Chairman. “We have both the tools we need and the resolve that it will take to restore price stability on behalf of American families and businesses.”
The essential tool the Fed has is its ability to create slack in the labor market through forcing people out of work, undermining their position when negotiating higher wages. But higher wages and narrowing inequality are precisely what the administration wants from America’s hot economy.
So begins a new conflict in a world of rapidly expanding hostilities. For decades, the disinflationary tendencies that accompanied rising levels of globalization, slowing working-age population growth rates, and accelerating microprocessor processing speeds, allowed central banks to act in general support of fiscal stimulus. In each cycle, their stimulus ratcheted up as our central bankers probed for the point at which their expansive policies would spur runaway inflation, wage-price spirals, hoarding, debasement. But they never found it — until now that is.
In that previous paradigm, stocks and bonds generally rose together. Even better, when the former temporarily declined the latter rallied. What replaces it will look far different. And we are only now getting a glimpse.
Tyler Durden
Sun, 05/08/2022 – 19:41 - How To Kill A Zombie? Positive Real Yields Leave Record Number Of Biotechs Trading Below Cash
How To Kill A Zombie? Positive Real Yields Leave Record Number Of Biotechs Trading Below Cash
An aggressive, hawkish, and behind the curve Federal Reserve unleashed the most significant rate hike since the Dot-Com bubble burst in the early 2000s. The oversized 50bps hike was in response to inflation at four-decade highs. The Fed is expected to ‘taper’ its balance sheet at the beginning of June, and all of this hawkishness has crushed the valuations of profitless companies.
The Fed telegraphed its move to embark on the hiking cycle late last year from emergency levels. The market’s consensus forecast of rate hikes for 2022 increased from 50bps in November to 235bps in May as the Fed is on the path to finding the neutral rate by the end of the year to slow inflation.
More importantly, real yields jumped into positive territory for the rest time in two years. However, the move didn’t happen overnight and began in November.
Once deeply in negative territory, the dynamic helped divert money from U.S. government bonds into risky stocks, such as profitless companies like biotech. This has since reversed.
Anticipation of tighter monetary policy pushed real yields positive and has re-rated risky companies, evident in the fact that over 20% of the Nasdaq Biotechnology Index’s 370 members – a record by a long way – are now trading less than cash.
The rise in real yields makes ‘growth’-focused, profitless ‘lottery ticket’ stocks less attractive (as those longer duration equity payoffs get discounted more and more heavily).
It seems, the world’s freshly schizophrenic central bank hawks have finally figured out how to kill zombies. As we detailed recently, Zombies were introduced to the economic jargon by Ricardo Caballero, Takeo Hoshi, and Anil Kashyap in their article, “Zombie lending and depressed restructuring in Japan” in 2008, where they named the unprofitable and indebted yet still operating firms in Japan as “zombie companies.” They found that, after the financial crash of the early 1990s, large Japanese banks kept money flowing to otherwise insolvent borrowers, aka zombies.
What happens, when money (credit) is abundantly and easily available? Unprofitable firms that should fail start to roll-over their debts and seek easy funding to carry on. This is what happened after central banks enacted their ‘extreme’ monetary measures in the 2010’s. They started to create zombie companies, like ailing Japanese banks did in the 1990’s.
Zombie companies are a menace to the economy, because they restrict the entry of new, more productive companies, diminish job creation in the economy and lock capital to unproductive use. Zombie companies seek to survive, not to thrive. They hoard money and debt, but do not invest. Workers may keep their jobs, but they are locked in unprofitable production.
According to research by Natixis, a French bank, the share of zombie corporations in Europe had risen to 21 percent by the end of 2019. Now, due to the “corona bailouts,” the share is likely to be considerably higher. According to the data compiled by Deutsche Bank Securities, the number of U.S. publicly traded companies classified as zombies had risen to close to 19 percent by the end of 2020. According to Bloomberg, in November 2020, U.S. zombie corporations sat on an incomprehensibly large mountain of $2 trillion in debt. The number of publicly listed zombie companies had also swollen by 200 since the start of the pandemic. This is a clear example of how government and central bank induced bailouts make the economy more fragile.
Alas, central banks, especially the Federal Reserve and the European Central Bank have fed the creation of zombie companies for years through ultra-low interest rates and QE programs.
Zombies should not exist in the real world, and the real world is about catching up with the “zombified” global corporate sector. With the drastically hastening inflation forcing the hand of central bankers to raise rates aggressively in the coming months, we are heading into a flood of corporate bankruptcies.
And then, calamity.
At the same time, the TINA (there is not alternative) narrative has died with Treasuries now offering ‘safer’, higher-yielding alternatives for increasingly anxious investors (despite the worst ever start to a year for bonds)…
However, it gets worse, as Paul Tudor Jones recently warned, piling headlong into bonds may not be the wisest choice, as he notes that we are now in “uncharted territory”.
Specifically, PTJ warned investors to prioritize capital preservation in such a challenging environment for “virtually anything.”
“I think we’re in one of those very difficult periods where simply capital preservation is I think the most important thing we can strive for,” Jones said.
“I don’t know if it’s going to be one of those periods where you’re actually trying to make money.”
It’s not just investors that are in ‘uncharted territory’ as The Fed faces global stagflation…
As he summarized: “You can’t think of a worse environment than where we are right now for financial assets.”
And perhaps the signals from the riskiest of risky lottery ticket stocks – Biotechs – is one more sign of that risk-tolerating, zombie-embracing behavior being abandoned.
Tyler Durden
Sun, 05/08/2022 – 19:15 - CA Lawmakers Use 'Gut-And-Amend' To Resurrect Failed Gun Tax
CA Lawmakers Use ‘Gut-And-Amend’ To Resurrect Failed Gun Tax
Submitted by The Machine Gun Nest (TMGN, emphasis ours),
California lawmakers have used a legislative technique known as “gut-and-amend” to revive and fast-track a tax on firearms and ammunition.
On May 5th, the California State Assembly ‘gutted’ the contents of an unrelated bill (AB-1227) aimed at building energy efficiency, and amended it with language reviving a long-failed firearm and ammunition excise tax which, if passed, would be effective immediately as an “urgency statute.”
According to the new language, “The year 2020 saw an unprecedented surge in firearm and ammunition sales across the nation, and this trend has continued into 2021.” They say that the tax is needed because “This surge in firearm and ammunition sales and profits has occurred alongside an unprecedented nationwide spike in shootings and gun homicides.” Seemingly conflating legal gun sales with crime and violence.
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A California bill regarding roof replacement building standards was just amended to completely change it into a gun and ammo tax that would take effect immediately. https://t.co/hOewLdlZ8S pic.twitter.com/jItKC9Cl63
— Firearms Policy Coalition (@gunpolicy) May 6, 2022
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The bill itself calls for an excise tax of 10% on handguns and 11% on long guns, ammunition, or precursor parts. California would then deposit the tax collected from the bill into a so-called Gun Violence Prevention, Healing, and Recovery Fund. We’ve stated that these funds are cover for liberal states to tax gun owners and fund their opposition research, which in turn supports more gun control laws. It’s like an authoritarian Uroboros.
Interestingly, a similar bill, AB-1223, was introduced by the same author, California state legislator Marc Levine, but failed to pass in February. This is another attempt to pass a failed gun tax by gutting and amending a solar roofing bill.
What’s even more telling of the lawmakers’ attitudes in California is this excerpt from the proposed legislation: “Existing law imposes various taxes, including taxes on the privilege of engaging in certain activities.” It’s obvious here that California intends to treat the 2nd Amendment like a privilege, to be taxed and taken away from those that are unworthy, or cannot afford it, instead of a constitutional right.
As expected, the reaction on Twitter from gun owners has been explosive.
@AsmRodriguez52 @SenatorLeyva
As my representatives in the CA legislature, I am requesting you oppose AB1227 (Levine) as it is yet another racist, classist attack on CA citizens’ access to our #2A Rights. I expect you to find ways to remove barriers to RIGHTS, not place them. pic.twitter.com/YC2BIGh56c— Triggerology (@Triggerology_FT) May 7, 2022
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How is that even legal??
— Legal Backchanneler “Spooky” (@not_spookyguns) May 6, 2022
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Just California doing California things
— Gilbert Quintanilla (@GilbertQuinta16) May 6, 2022
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this would be shocking if it was happening anywhere else but California.
— The Machine Gun Nest (@TMGNMD) May 6, 2022
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Can we tax voting at the same rate? Maybe $200 voting tax? Wait… Taxation of a constitutional right… We already dealt with that.
— Nicholas Pettinato (@NPettinato14) May 6, 2022
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While the insanity of the situation can almost be humorous, gun owners should look at California not as a bubble but as an example of what can happen when one party controls a state. Don’t forget, California was a Republican stronghold state until the 90s but now serves as a template and testing ground for gun control policy nationwide.
Tyler Durden
Sun, 05/08/2022 – 18:40 - 3 American Tourists Found Dead In Mysterious "Health Emergency" At Bahamas Resort
3 American Tourists Found Dead In Mysterious “Health Emergency” At Bahamas Resort
Three American tourists were found dead inside their hotel room, and a fourth person was hospitalized Friday, at a Sandals resort in the Bahamas, according to local authorities.
Bahamian Acting Prime Minister Chester Cooper said two men and a woman died at the Sandals Emerald Bay resort on Exuma. A fourth was airlifted to a hospital in nearby Nassau.
JUST IN: The air ambulance carrying an American woman who is being transported to Princess Margaret Hospital from Exuma, touched down in New Providence just after 7pm today.
Sandals Emerald Bay officials in Exuma released a statement confirming that three other guests had died. pic.twitter.com/Ke4QvM3ABq
— Our News Bahamas (@OurNewsRev) May 7, 2022
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Royal Bahamas Police Force said it was investigating that at least two people sought medical treatment Thursday night after suffering from nausea and vomiting.
JUST IN: Police are investigating the Sudden Death of two men and a woman
Detectives from New Providence are in Exuma investigating the death of two men and a woman. pic.twitter.com/wcI9QTW2XG
— Our News Bahamas (@OurNewsRev) May 6, 2022
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On Friday, police found a man and woman dead in their hotel room. In a separate hotel room, a man was found dead. All had signs of convulsion but no trauma, police added.
FIRST ON THE GROUND: Less than 24 hours after three Americans died of unknown causes in separate villas at Sandals Emerald Bay resort on Exuma, ewnews has arrived on the island and will provide coverage as the circumstances surrounding their deaths are investigated and revealed. pic.twitter.com/uFFEkd9bew
— Eyewitness News Bahamas (@ewnewsbahamas) May 7, 2022
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Sandals confirmed the three deaths to USA Today. A spokesperson for the resort released this statement:
“It is with deep sadness that we can confirm the passing of three guests at Sandals Emerald Bay on May 6, 2022.
“A health emergency was initially reported and following our protocols we immediately alerted emergency medical professionals and relevant local authorities,” Stacy Royal, a spokesperson for Sandals, said.
Minister of Health and Wellness Dr. Michael Darville and his team are expected to arrive on the island this evening to investigate the health emergency.
“We thought we might have to make a makeshift facility, a mini-hospital … we believe it’s an isolated situation that revolves around four people,” Darville said. It remains unclear how the three died.
Tyler Durden
Sun, 05/08/2022 – 18:05 - Duck And Cover
Duck And Cover
By Peter Tchir of Academy Securities
Even I am not old enough to done “duck and cover” drills in school, but it somehow comes to mind this weekend as we digest the latest market action and the ongoing Russian nuclear threats.
Markets
On the week, stocks didn’t do too badly. The Dow was almost unchanged, and even the hard-hit Nasdaq “only” dropped 1.4%. Based on that, last weekend’s Bad to the Bone seemed overly dramatic. But the weekly change isn’t reflective of the mess the markets were. From its lows on Wednesday, ahead of the FOMC, the Nasdaq 100 rallied over 5% only to plunge almost 8% at its lowest point on Friday morning! While we expected many to try and rally, post FOMC, largely because it worked extremely well back in March, I had no expectation that the rally would be that strong and fast! Nor, did I expect it to be so short lived and to turn so ugly, so quickly.
Markets, largely, remain broken. Liquidity is abysmal. Stock indices seem to move 0.5% on a whim and the trading this week, made me think back to the days when the TARP legislation failed, which I discussed on TD Ameritrade.
There were some bright spots, like energy, where XLE was up almost 10% on the week! (Barron’s included Academy’s view that “The energy companies of today are also the energy companies of the future”). Bitcoin, on the other hand, is back below $35,000 as I type and had a miserable week, dropping more than 10%.
I remain concerned that the “non-virtuous circle” described in last week’s report, highlighting the linkage between “disruptive” stocks and crypto isn’t over (though TQQQ had large inflows last week, including a huge inflow on Friday, as some investors bet heavily on a bounce, using leverage. ARKK, which I also highlight, had inflows on the week, but had a significant outflow on Friday which is something to watch).
As much as I want to be full on bullish at these levels, the only “capitulation” that I have seen is the capitulation of shorts and hedges on Wednesday afternoon!
Duck and cover seems to apply to trying to manage risk in these markets.
Rates and Credit
Much of the blame for last week’s markets can be placed on the Treasury market, though, that is a bit too simplistic. Yes, the 10-year treasury went from 2.94% on Wednesday, to 3.13% by Friday, but it did moved 5 bps higher on Monday, while stocks rallied and even on Friday, stocks and bonds were not moving in lock-step, which sets us up, potentially for a “risk-off” type of day, when stocks sell-off as treasuries rally.
The yield curve actually steepened (at least 2s vs 10s) which should, if anything, be encouraging.
Credit, as expected (or at least as hoped) did very well! The Bloomberg corporate bond spread actually tightened from 135 to 134 on the week. That seemed almost too good to be true, but LQD (a longer dated IG ETF) had spreads go from 172 to 169. The CDX index, didn’t fare as well, but that is linked, via algos, to the stock market almost as much as to the bond market.
Lower prices and overall higher yields are attracting money to corporate bonds! That has been very supportive for spreads.
I think there are some key takeaways from the credit markets:
- Credit is holding in, which should support equity prices. Equities should not go into freefall while credit is holding in. What we are seeing is the gap between high equity valuations and credit, close. There is a large buffer between the credit risk and equity risk for most firms and that is what is getting priced in. Even some “distressed” investors are buying IG bonds, as the dollar prices are so attractive (buying bonds below par, solves a lot of credit concerns).
- Watching the leveraged loan market closely. Leveraged loans and CLO’s had done very well, especially versus high yield bonds. That, to me, indicated that the movement was primarily rates related, and there wasn’t much concern about credit spreads. But these markets (BKLN and SRLN and JBBB are some ETFs to watch) are back to their march lows, or even worse than that. There is at least a hint that in the high yield market, credit risk is becoming more of a concern! This “metric” or signal has gone from comforting to mildly disturbing.
Market Strategy – Duck and Cover
As we head into this week:
- Expect more volatility. I cannot think of any reason why volatility would decline dramatically. Last week’s extreme price action will likely feed into VAR (value at risk) models and cause traders to reduce positions. Liquidity, with summer coming is likely to remain poor, or get worse as traders won’t have the stomach for large positions with reduced staff as people take their vacations.
- Buy dips on credit and rates. Unless we see signs of credit fears (either IG bond spreads widening or leveraged loans catching up to high yield bonds) I like buying dips on credit and rates. But very cautiously.
- Watch Quantitative Tightening in action. When a bond matures, the issuer often issues new debt. That applies to treasuries as much as anything. Often, the holders of an existing bond, “roll” into the new bond. There is, to some extent, a list of ready made buyers. They are receiving cash for the bond that is maturing and may have an inclination to re-invest that money in bonds of the same issuer. Simplistic, yes, somewhat true, also yes. So, when the FED holds bonds that are maturing and is NOT planning on re-investing those proceeds, new buyers have to be found. I think we will see investors in every asset class, reduce risk to get similar expected returns, which is why I think the selling in the riskiest assets, isn’t quite over, yet.
- Sell rips on risky assets. I’m stuck thinking we have another 10% downside on risky assets (and more than that on crypto). It doesn’t mean that we won’t get vicious “bear market” rallies. But I just don’t think this ‘valuation re-evaluation’ is over yet. It is getting close to being done, but I would really like to see capitulation, which I still don’t think we’ve seen.
Stay nimble. Duck and cover was meant to be a way to protect yourself, and I think we have to trade this market with that perspective in mind.
Longer term, the level of discussion about “securing” supply chains is high and I’m certain is going to result in action as companies (and countries) focus on ensuring that their supply chains are robust and “secure”.
I am the least bearish I’ve been, even expecting some sort of a rally, which may mean I’ve become part of the problem and markets will face a rough start to the week.
Tyler Durden
Sun, 05/08/2022 – 17:37 - The World Is "Crying Out For Diesel"; Product Tankers Could Win Big
The World Is “Crying Out For Diesel”; Product Tankers Could Win Big
By Greg Miller of Freight Waves,
Retail gasoline prices in the U.S. are up 45% year on year. Diesel used by American truckers is up 75% and just hit an all-time high. But this is not just an American problem. Pain at the pump is global. And so-called product tankers — ships designed to transport cargoes such as diesel, gasoline and jet fuel — are in prime position to profit.
Fuel flows globally to where it earns the highest return. Case in point: As U.S. diesel prices have skyrocketed, American exports of diesel have surged, because demand in other countries is higher.
U.S distillate fuel exports hit 1.74 million barrels per day (b/d) in early April, nearing record levels, according to preliminary data from the Energy Information Administration (EIA). Total U.S. exports of all refined products in April rose 28% year on year.
‘Outright panic buying of diesel’
“There has been outright panic-buying of diesel,” said Anthony Gurnee, CEO of product-tanker owner Ardmore Shipping, during a conference call on Wednesday.
Ardmore specializes in MR tankers, a vessel class with capacity ranging from 25,000-54,999 deadweight tons (DWT). Clarksons Platou Securities said that modern-built MRs were earning $49,800 per day in the spot market as of Friday. That’s more than quadruple the average rate for full-year 2021. Clarksons puts the breakeven rate for such vessels at $18,000 per day.
“The world is really crying out for diesel and that’s causing refinery margins to spike,” said Lois Zabrocky, CEO of International Seaways, during a conference call on Wednesday.
INSW’s product tanker fleet primarily consists of MRs and LR1s (55,000-79,999 DWT). Modern LR1s are earning $50,400 per day in the spot market, according to Clarksons, which puts the breakeven rate for such ships at $19,000 per day. Current LR1 rates are almost quadruple their full-year 2021 average.
Larger LR2s (80,000-119,00 DWT) that handle high-volume, long-haul runs are showing even steeper gains. Rates for modern LR2s jumped 21% on Friday to $58,600 per day, said Clarksons.
War exacerbates diesel shortages
The worldwide diesel market is “extremely tight” and the Russia-Ukraine war “has exacerbated the global diesel shortage,” said James Doyle, head of corporate development at Scorpio Tankers, during a conference call on April 28.
Before the invasion, he said, Russia exported about 1 million b/d of diesel to Europe. That volume has plummeted. “But the diesel shortage in Europe is not new,” he added. “And the shortage extends beyond Europe to Latin America and Africa, which have similar diesel deficits.
“For our MRs, the highest rate increases were for our vessels going from the U.S. Gulf to Latin America, which has less to do with Russia and Ukraine and more to do with increasing demand,” Doyle pointed out.
“We expect the market to tighten further with increased competition for distillate molecules as jet fuel demand returns. This is also having an impact on gasoline. With refineries running in max distillate mode, we are not building significant gasoline inventories ahead of peak driving season. As demand grows and inventories remain low, product tankers will need to be the conduit for filling the global supply-demand imbalance.”
Commodity specialist Argus made the same point on gasoline. “The lack of spare capacity is causing alarm heading into the peak summer driving season,” Argus warned on Thursday. “The situation is compounded by even higher middle-distillate margins, which have boosted supply of diesel over gasoline.”
Inventories drawn through COVID era
Usually, rates for tankers that carry crude oil and rates for tankers that carry petroleum products trend roughly in tandem. And if one outperforms the other, it’s usually crude. This year, product tankers are dramatically outperforming crude tankers; larger crude tankers are still below breakeven.
Both crude and product tankers saw rates collapse during the COVID era. Oil production outstripped demand amid lockdowns. The world’s inventories filled with cheap crude and products bought at the trough.
Ever since, those inventories have been drawn down instead of using tankers to import new supply (because new supply is much more expensive than the petroleum still in storage bought at the trough).
Due to this practice, stockpiles were already historically low months before Russia invaded Ukraine. In November 2021, Alphatanker published a report called “Welcome to the great diesel squeeze,” which warned: “It’s now apparent that global gasoil and diesel markets are tightening at an alarming pace with supply shortfalls now hitting key consumer markets worldwide.”
Then Russia invaded Ukraine. “This event immediately laid bare … the risks of severely depleted inventories,” said Evercore ISI analyst Jon Chappell.
Product tankers vs. crude tankers
Asked why this has boosted product tanker rates so much more than crude tanker rates — given that crude inventories are also historically low — Chappell responded, “Usually the two groups are highly correlated, and usually crude leads and outperforms by measure of magnitude. But we are far from normal times.
“Crude tankers are doing really well in regions directly impacted by Russia’s invasion of Ukraine — the Black Sea, Baltic and the Med — owing to the higher insurance costs and risks of entering those markets. But overall, the crude markets have been balancing new longer trade routes with the inability of OPEC to meet quotas, Russia [being] offline, and China lockdowns. The market is better than it probably should be based on those latter factors, but the low inventories and longer ton-miles [voyage distances] are offsetting some of the macro headwinds.
“Product tankers are benefiting from localized diesel shortages, high refinery margins … and massive trading arbs [arbitrages] that allow traders to pay much higher freight costs and still make a ton on the arb. Inventories are far too low globally and prices will likely remain elevated, forcing more trading in unusual trade lanes, tightening capacity and lifting that market well before and well above crude.
“Eventually crude tankers will catch up, I think, if supply of crude can meet higher refinery demand. But right now, it’s a unique product story. And talking with my oil analyst, it’s hard to see how these diesel shortages ease or the strong tanker markets end,” said Chappell.
Earnings recap
Among the universe of listed shipowners, Clarksons Platou Securities said that “product tankers are sailing up as the winning sector year to date.” Rates are surging on “exploding refining margins,” said Clarksons. It maintained that “the products sector looks primed to gain further.”
Through Thursday’s close, the stocks of Scorpio Tankers and Ardmore Shipping were up 106% and 114% year to date, respectively. Shares of International Seaways — which owns both crude and product tankers — were up 50% year to date.
Listed product tanker owners have just reported more losses for the first quarter. The rate upswing won’t be fully felt until the current quarter.
Ardmore Shipping reported a net loss of $7 million for Q1 2022 versus a net loss of $8.5 million in Q1 2021. The adjusted loss of 4 cents per share beat consensus expectations for a loss of 8 cents.
Ardmore has 50% of its Q2 2022 available MR spot days booked at $25,500 per day. That compares to rates of $16,513 per day in Q1 2022.
International Seaways reported a net loss of $13 million for Q1 2022 compared to a net loss of $13.4 million in the same period last year. The adjusted loss of 29 cents per share was slightly better than Wall Street expectations for a loss of 30 cents.
The company has 41% of its available Q2 2022 MR spot days booked at an average of $24,500 per day. That compares to $14,030 per day in the first quarter.
Scorpio Tankers reported a net loss of $84.4 million for Q1 2022 compared to a net loss of $62.4 million in Q1 2021. The adjusted loss per share of 27 cents came in much better than the consensus forecast for a loss of 58 cents.
Scorpio has 42% of its available Q2 2022 spot MR days booked at $30,000 per day. Its MR fleet earned an average of $16,305 per day in the first quarter.
Tyler Durden
Sun, 05/08/2022 – 17:30 - Western Banks Brace For $10 Billion Hit Over Russia Exit
Western Banks Brace For $10 Billion Hit Over Russia Exit
Western banks are bracing for a $10 billion collective hit as they prepare to shutter operations in Russia over the invasion of Ukraine – a move which mirrors several US lenders last month.
A Societe Generale logo on a Rosbank bank branch in Moscow, Russia. The French bank was hurt by a write-down on its Russian business.
Bloomberg NewsAccording to the Financial Times, international sanctions have “forced banks to consider turning their backs on a country that some lenders first entered more than a century ago.”
This week a string of European banks set aside billions of euros in provisions ahead of the closure of their Russian operations, following similar moves by US lenders last month. Western banks collectively have $86bn of exposure to Russia — with close to 40,000 staff — and are setting aside more than $10bn in expectation of losses on their ventures, according to Financial Times calculations. -FT
French lender Société Générale, which has operated in Russia for 150 years, has set aside €561mn for the first quarter, and expects to lose €3.1bn ($3.3bn) on the sale of its Rosbank subsidiary – which was founded by billionaire Vladimir Potanin. The bank has 3.1 million retail customers throughout Russia and €18bn ($19.3bn) of total exposure to the country. Around 12,000 people are employed by Rosbank.
Italy’s UniCredit has set aside €1.3bn ($1.37bn), and says that exiting Russia entirely could cost it €5.3bn ($5.6bn). The bank currently has 4,000 workers and 2 million customers in the country, where it has operated for 17 years.
“I’m sure you have noticed the speed of change in terms of . . . waves of sanctions,” said CEO Andrea Orcel.
Graphic via FT Research (Steven Bernard and Patrick Mathrin) Other European banks preparing to take a hit are French bank Crédit Agricole, Austria’s Raiffeisen, Swiss lender UBS, and Credit Suisse.
Tyler Durden
Sun, 05/08/2022 – 16:55 - Biden Sends First Lady Jill To War-Torn Ukraine After Zelensky Urged Him To Come
Biden Sends First Lady Jill To War-Torn Ukraine After Zelensky Urged Him To Come
It appears the White House PR team has been quite busy trying to get creative in terms of ways it could display support for Ukraine… short of President Joe Biden actually going there himself (as has been requested and urged by Zelensky). They came up with a Mother’s Day “surprise” in the form of first lady Jill Biden traveling to a war zone to meet the first lady of Ukraine for a photo op.
CNN reports of the previously unannounced visit, “First lady Jill Biden spent part of Mother’s Day making an unannounced trip to Uzhhorod, Ukraine, a small city in the far southwestern corner of Ukraine, a country that for the last 10 weeks has been under invasion by Russia.”
Via The Independent The two met in a former school that’s now a refugee center for Ukrainians’ fleeing the fighting. Notably it’s the first time that President Zelensky’s wife, Olena Zelenska, has appeared in public since the Russian invasion kicked off on Feb.24.
The Ukrainian first lady praised Jill Biden’s “very courageous act” – and Biden explained, “I wanted to come on Mother’s Day.” She said: “We thought it was important to show the Ukrainian people this war has to stop. And this war has been brutal.” Biden added, “The people of the United States stand with the people of Ukraine.”
Three weeks ago Ukraine’s President Zelensky told CNN’s Jake tapper that the US president should visit his country in person because “he is the leader of the United States, and that’s why he should come here to see.”
NEWS: surprise visit by @FLOTUS to Ukraine and a surprise appearance by Ukrainian first lady Olena Zelenska, who has been in hiding since the start of the Russian invasion pic.twitter.com/wrHAyEb57x
— Kate Bennett (@KateBennett_DC) May 8, 2022
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But many pundits have noted the huge security risk for such a trip, but additionally the question of Biden’s age, stamina and mental acumen for such a journey. Last month both Secretary of State Antony Blinken and Secretary of Defense Lloyd Austin visited Kiev, and House Speaker Nancy Pelosi made the trip a week ago.
Last month when pressed on the question of Biden going, White House Press Secretary Jen Psaki insisted “No. no… We are not sending the president to Ukraine.” She explained that when the UK’s Boris Johnson made the trip, he had to take a long train ride under high secure conditions. The suggestion was that it would be too difficult and risky for the US president to undertake, however, apparently it’s not for his wife Jill.
Tyler Durden
Sun, 05/08/2022 – 16:20 - What Traders Can Learn From Professional Horse-Betting
What Traders Can Learn From Professional Horse-Betting
By Alex of the MacroOps Substack
Thegreek.com, a horse racing blog, discusses the “seven deadly sins” losing horse bettors commit. Repeat these sins in your trading and you’ll suffer the same fate as the losers at the track.
Awesome. What a finish !! 😀👏👏 https://t.co/A5Gl6PnLYa
— TheLastRefuge (@TheLastRefuge2) May 8, 2022
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Here are the four most important sins to avoid:
Deadly Sin No.1: The most important thing is picking winners.
Wrong! Professional horse bettors will tell you that trying to pick the winner of the race is a failed strategy and that it’s far more important to get value. What’s “value?” Consider this: A horse that you handicap as a legitimate even-money favorite should win about half the time. So that horse is a bad play at 4/5 or less. A horse that you analyze should win about one in four times the race is run, should be about 3/1. That horse won’t win as often as the even money shot but if you can get value, say 5/1 or higher, you’ll make money in the long run.
The few horse bettors good enough to make a living know it’s not about picking a winner. It’s about identifying positive expected value. Oftentimes that means the lower probability play is the better bet.
If an option is currently priced to profit 1 in 10 times, but you think it’ll profit 2 in 10 times, then buy it. It’s a value. It doesn’t matter that most of the time the option will expire worthless. Over the long haul, the buyer will walk away profitable.
Deadly Sin No.3: You should bet more on a horse you really like, such as your “best bet.”
Ridiculous. Why bet if you don’t like who you’re betting? Put another way, any horse worth betting is one worth betting significantly. Sophisticated bettors usually bet about the same amount on every bet. After all, as one professional gambler told me, “If I knew what my ‘best bets’ were I’d only bet those.” A “best bet” is a media creation. If you know what you’re doing, your best bet always should be the next bet you make.
Professional track gamblers understand that bet size is incredibly important. Sizing your bets based on “hunches” leaves you susceptible to accidentally betting big on losers and tiny on winners.
Imagine three trades where you’re right on the first two and wrong on the last. And since you thought you had a “hot hand”, you bet really big on that last loser. This would result in the losses from the last trade canceling out the gains from your first two winners. Your account would end up net negative.
Sizing up has a time and a place in trading. Soros would bet big when the stars aligned. But you need lots of experience before you can start sizing up on what you think are great trades.
Until you’re seasoned and able to decipher between a good and great bet, keep your position sizes consistent. If you don’t, you risk going broke from bad luck.
Deadly Sin No. 4: Statistical betting trends are important.
Actually, they’re not. “Technical handicapping,” as it’s called, is another of those manufactured disciplines used by professional touts, not professional horse racing bettors. Mostly, technical handicapping—wherein statistics are employed to predict an outcome—are little more than “backfitting,” a practice where someone makes up a theory to fit a set of numbers. It’s a lazy handicapping shortcut and no replacement for hard analysis.
Ever wonder why those really smart quants with the fancy degrees end up blowing up? It’s because they have too much trust in a model tightly fit to past data.
Studying the past can help you figure out what’ll happen in the future, but only within reason. If you create a trading model based on the premise that the future will play out exactly like the past… it will fail.
Keep historically based assumptions as simple as possible. That will help thread the needle between useful insight and robustness.
Deadly Sin No. 7: Specialize in certain aspects of the game and pick your spots.
Why limit yourself? If you never bet grass races or stay away from maidens you may be missing some great betting opportunities. When you gamble, having more options always is preferable.
Tyler Durden
Sun, 05/08/2022 – 15:45 - Peak Inflation And Fed Policy: A Relationship Which Should Worry The Fed And Scare Investors
Peak Inflation And Fed Policy: A Relationship Which Should Worry The Fed And Scare Investors
Submitted by Joseph Carson, former chief economist At AllianceBernstein, via The Carson Report
Some have used peak inflation to create the impression that the worse of inflation news is in the rear and that the Fed has less tightening to do than what many expect. Yet, peak inflation says a lot about what the Fed has to do, which should worry the Fed and scare investors.
In three out of the last four decades, the US experienced a cyclical rise in inflation (4% and above) that compelled policymakers to raise official rates in response. It didn’t matter if the inflation cycles were broad (the early and late 1980s) or narrow (oil spike in the mid-2000s). But policymakers had to raise official rates above peak inflation on each occasion to squash the price cycle.
No one is thinking the unthinkable that the Fed has to raise rates above the 8.5% increase in consumer prices over the past year. Yet, past experiences provide painful lessons on the level of official rates required to reverse inflation cycles.
Each inflation cycle has common and unique factors. However, many, including Fed officials, have argued that the current inflation cycle has more than a few items lifting prices temporarily. The Bureau of Labor Statistics (BLS) produces a special aggregate series that removes some things people have cited, so it helps remove some of the noise.
For example, BLS published a series of CPI less food, energy, shelter, and used car and truck prices. This series removes the recent temporary spikes in food and energy prices linked to the Russian invasion of Ukraine. It also removes the massive spike in used vehicle prices associated with supply bottlenecks owing to the pandemic. Yet, this dumbed-down price series still shows a 5.8% in the past year, matching the highest rate recorded in 40 years.
So even if this is the inflation rate the Fed needs to target to reverse the inflation cycle, it still calls for a fed funds rate of 6% or more than twice the peak rate shown in policymakers’ official rate projections made in March.
Given how tight the labor markets are nowadays and everything else being equal, it would probably take a 6% fed funds rate to impact consumer demand and dampen inflation by creating more unemployment. At the end of March, there were a record 11.5 million job openings against a backdrop of 6 million unemployed. Never before has the Fed faced a significant inflation cycle with labor markets this tight.
Yet, I would bet that long before the fed funds rate gets close to 6%, something else would break to stop the Fed. Things that stopped the Fed in the past were an abrupt and sharp drop in the financial markets or a cessation in the flow of credit that could lead to economic and financial instability.
Given the current market environment, none of those conditions are present, so the risk, for now, is that Fed tightening course could look a lot like those of the past until something else breaks. Investors forewarned.
Tyler Durden
Sun, 05/08/2022 – 15:10
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