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Adams administration launches citywide survey to determine policy goals

For the first time the mayor will ask the people what he should prioritize in his first budget To view the full story, click the title link......»»

Category: blogSource: crainsnewyorkJan 14th, 2022

The Politics Of Sentiment

The Politics Of Sentiment Authored by Peter Tchir via Academy Securities, The Politics of Sentiment The politics of, ooh, feeling good. I wanted to follow up on our CONsumer CONfidence T-Report and thoughts on the University of Michigan sentiment survey. Consumer Confidence versus Independents The data on sentiment by political affiliation seems to go back to the middle of 2008. I’ve included this chart because 1. It demonstrates that “independents” are very representative of the average of consumer sentiment (I don’t know the relative size of each political association in terms of this survey, but I’ll assume for now that it isn’t so big as to skew the results). 2. It allows me to avoid including the independents in later charts, since it is effectively one and the same with the survey, making those charts easier to read. Consumer Confidence versus Political Affiliations In this chart, you can see that the difference between parties was minimal when the series were first introduced. It expanded a bit during the 2nd Obama administration, but then started to diverge after President Trump election. The sentiment turned on a dime. Literally, one day Dems were happy and Republicans were nervous and the next day, they had opposite outlooks on the world. Similarly, we saw another similar shift after President Biden won. While no one was particularly optimistic at that time, the relative optimism changed and remains extremely large. Relative Sentiment Yes, there are reasons you could see this sort of economic outlook deviation. SALT taxes tended to affect different parties (based on where they lived) differently. Some impact could be attributed to what states and regions people are moving out of versus where they are moving (I’m assuming home price outlook affects sentiment, and that is pretty local). But as a whole, it seems odd that Republicans have the worst outlook relative to the average than at any point since 2007, which encompasses some pretty interesting periods. While Dems aren’t the happiest they have been relative to the average, they are pretty darn happy. Difference By Party The difference by party is extreme! We went from periods of time where there was relatively little difference, to what seems like increasingly large differentiation by party, and clearly tied to Presidential elections (on this quick glance, there don’t seem to be huge moves linked to mid-term elections). Bottom Line It is difficult, given the little bit of data and the time I had to determine if there are real economic reasons the outlooks would be so different. Yes, I can see how some policies shape to make one group happier than the other, which would impact their outlook, but the deviation seems so extreme, that it is difficult to believe, that a purely logical economic assessment would produce such extreme deviations. So, are people responding in a way that reflects their political view rather than their economic outlook? Are they responding this way because they truly believe that their economic outlook is that different? I don’t know the answers, but I think as we prepare for Thanksgiving and get friends and family around the table, we should know that, at least as far as the University of Michigan survey is concerned, people’s economic sentiment is highly correlated to their political belief! (for full disclosure, I am Canadian and cannot vote in the U.S., so am not affiliated with either party, but that won’t stop me from watching my son play in the Turkey Bowl and sitting down to a giant feast on Thursday!) This divisiveness doesn’t seem good for the country, and likely makes getting good policy enacted almost impossible as the divergence is so large. I’m encouraged there is some middle ground, but this divisiveness will set the table for the next T-Report (not the Thanksgiving table) as I want to explore inflation and policy response in more detail (I’ve also been challenged to channel Taylor Swift into a report, and might need some help on that, because unlike the Re Flex, where I could only think of one song, Taylor Swift’s repertoire is so large, it will be difficult to come up with a single theme, though there are some front runners as the topic is inflation and mismanagement of perceptions). From a market’s perspective, everything still holds from yesterday’s (Take Me Down to the Bitcoin City). Have a Great Thanksgiving! Tyler Durden Wed, 11/24/2021 - 12:45.....»»

Category: worldSource: nytNov 24th, 2021

Some Say Occupy Wall Street Did Nothing. It Changed Us More Than We Think

Ten years ago, on November 15, Occupy Wall Street was pepper-sprayed into the night by a squadron of police officers who helped shovel the tents, books, and placards left by activists into a fleet of sanitation trucks. A messy, motley, and spirited demonstration, Occupy started as a march of some 2,000 people in lower Manhattan… Ten years ago, on November 15, Occupy Wall Street was pepper-sprayed into the night by a squadron of police officers who helped shovel the tents, books, and placards left by activists into a fleet of sanitation trucks. A messy, motley, and spirited demonstration, Occupy started as a march of some 2,000 people in lower Manhattan that mushroomed to approximately 1,000 similar protests across the country. It seized enough media coverage to appear like a moment in the making, as it amplified outrage over America’s skewed distribution of wealth and opportunity. And yet, as quickly as it started, it was gone within 59 days. [time-brightcove not-tgx=”true”] In the decade since its demise, scores of observers—and even participants—have said Occupy Wall Street fell short. Pundits including New York Times columnist Andrew Ross Sorkin have written that it will amount to nothing more than an asterisk in the history books. Then, there’s Micah White, editor at the activist magazine Adbusters. White’s email blast before the protest began is credited with sparking the idea behind Occupy. But in the 10 years since the protest ended, White has deemed Occupy a disappointment since it never achieved what it set out to do. In his 2016 book, The End of Protest. A New Playbook for Revolution, White wrote, “an honest assessment reveals that Occupy Wall Street failed to live up to its revolutionary potential: We did not bring an end to the influence of money on democracy, overthrow the corporatocracy of the 1 percent or solve income inequality.” He concluded by calling Occupy “a constructive failure because the movement revealed underlying flaws in dominant and still prevalent theories of how to achieve social change through collective action.” At first glance, it might seem as if Occupy came and went without leaving much of a legacy. It never solidified around a specific set of demands, nor did it generate a concrete platform. There’s no significant flesh-and-bones organization to point to as its heir. And it never anointed a leadership team. There’s a big problem with that conclusion, however: Occupy’s messaging just won’t go away. It permeates political discourse about the global economy. It has cemented notions of economic inequality squarely in D.C. policy debates. Ideas that were thought to be too socialist since the demise of the Eastern Bloc—class struggle, wealth distribution across social strata, or even flaws in the capitalist system—were suddenly aired loudly and frequently for the first time since the Great Depression. Sparking new youth movements Occupy, Nobel laureate Joseph Stiglitz told TIME, “is part of a series of events that precipitate an understanding of the limitations of corporate America, something that today has morphed into a sense of the misdeeds not only by the financial sector, the fossil fuel sector, and now by big tech. It was the first critique that crystallized it in a very powerful way. Subsequent movements built on growing understanding, a sense that the corporate sector is not really serving American interests.” Occupy also seized the imagination of two key demographics on the rise. The first of these: Millennials, many of whom participated in the movement’s Manhattan launch or any of the similar protests around the country. The sustained protest also left a lasting impression on Generation Z, a cohort that was just becoming aware of a turbulent world around it. Powered by youthful exuberance, Occupy not only roused a spirit of protest, but also helped create a template for peaceful resistance that could include equal measures of social media and old-fashioned physical presence. Not bad for two weeks of work—or as Vladimir Lenin wrote, “In some decades nothing happens—in some weeks decades happen.” Millennials were pivotal in getting Occupy’s message out to participants and the media alike. A majority of participants were young students and college graduates who were steeped in student loan debt, according to CUNY sociologist Ruth Milkman’s studies of New York City’s Occupy enclave. As the first American generation to embrace social media, they used Twitter and Facebook to issue a call to action and later coordinate activities. Electrical outlets at Zuccotti Park made it possible to set up a makeshift communications post, one protesters used to contact media and document daily activities. Read More: The Racial Reckoning Went Global Last Year. Here’s How Activists in 8 Countries Are Fighting for Justice Occupy was not created by any one centralized group, nor did it give birth to an organization of formal movement. It embraced an open-source, horizontal structure, more in line with a software developer’s organizational hierarchy. Key figures in the movement including late-professor and long-time activist David Graeber said the structure was deliberate, the goal being a new democratic model which would follow the will of the people. The result, however, was a standstill mired in glacial debates that failed to produce a platform or leadership. And yet, Occupy seem to pull in support from disparate groups. The attraction lay in the fact that Occupy membership was never limited by narrow goals or messaging, says American University marketing professor Sonya Grier. “It was broad enough to capture all the associations the American public could generate at the time,” she says. “Even absent a unifying strategic action plan, Occupy Wall Street had the legs to spread to different societal groups in a way that continues to the present.” A long line of protests followed in Occupy’s wake and owe it a debt of gratitude. With the help of Occupy veterans, the Fight for $15 fair wage movement started less than a year after the Zuccotti Park encampment was shut down. Black Lives Matter, #MeToo, the anti-Trump women’s marches, and the March for Our Lives certainly drew inspiration from Occupy. The movement helped propel Bernie Sanders’ Democratic-Socialist presidential campaign. There is a direct link between Occupy’s focus on economic disparity and the ascendancy of the Democratic party’s Progressive caucus. “The success of Occupy opened the eyes of a lot of participants to what protest was and how it could make a difference,” says CUNY’s Milkman. “In a way, it made protest cool for a new generation of young people for the first time since the late 1960’s.” Millennials are often maligned as a changeable and disconnected generation glued to their smartphone screens. That’s off the mark, says CUNY’s Milkman whose studies have tracked a group of several hundred Occupiers over time. She says a substantial majority have continued a commitment to change, some as activists, some as participants in other social movements, and some as labor organizers. In many ways, Occupy’s function as a loudspeaker marked a tipping point for other groups as well. In 2011, labor unions saw an opening, and several declared support for Occupy or marched including New York City transit workers, a Teamsters local, and later longshoremen at an Oakland, California offshoot. In 2016, a wave of teachers strikes in red states such as Oklahoma and Kentucky were organized by Millennials via social media. And the labor movement’s Striketober muscle flexing this year likely drew some inspiration from Occupy. Read More: What the Labor Movement Needs to Keep ‘Striketober’ Going, According to New AFL-CIO Leader Liz Shuler A wave of media exposure Location played a big part, too. Occupy’s headquarters was, of course, in America’s news media capital. Base camp for the movement was Zuccotti Park, a compact 33,000 square-foot public space small enough to be a guilt slice in the glutton’s banquet that is lower Manhattan real estate. The irony: Zuccotti was privately owned. Its owners had won a zoning concession that prevented Mayor Michael Bloomberg from outright evicting Occupy’s protesters and helped its longevity. From the start, Occupy delivered drama. Early on, New York Police pepper-sprayed several female Occupiers. Later, police clashed with march participants and arrested 700 protesters. The result was a groundswell of publicity. Occupy started slowly, drawing in 2% of total news coverage by the end of its second week, as measured by the Pew Research Center. By mid-November, that number had grown steadily to 13% while driving economic issues to absorb almost a quarter of newscasts. For perspective, consider two numbers. The first is 20+ million, the combined audience that sat down for evening newscasts of the big three broadcasters ABC, CBS, and NBC, according to Nielsen. At an average cost of $55,000 for a 30-second commercial slot, Occupy at its peak was generating a level of media attention roughly equivalent of nearly $1 million in free advertising nightly. By the beginning of its second month, the exposure was helping Occupy make inroads. A survey conducted in late October found a slim majority of participants (39% to 35%) supported rather than opposed the movement. Contrast those numbers with a 32%-44% support/oppose ratio generated by the Tea Party movement at the time and Occupy’s pull becomes clear. “When mainstream media, politicians and people milling at the water cooler are talking about political and economic inequality, the Occupiers are winning,” wrote University of California Irvine political science professor David S. Meyer at the time. The origins of ‘the 1%’ Any retrospective of Occupy must include serious consideration of its rallying cry: “We are the 99%.” Economists such as Stiglitz and Thomas Piketty may have already been studying the way inequality had wedged a shockingly wide gap between haves-in-excess and have-nots, but in just 14 characters, Occupy organizers created a message that framed the outrage millions and put “the 1%” on notice. They were armed with a deft turn of phrase made for daily distribution on a crescendo of news coverage. In this way, Occupy echoed the Tea Party and millions of others on the political left, right and center who were suffering during the height of the Great Recession and concurrently expressing outrage at bank bailouts that left them stranded. Occupy’s message continues to resonate. Exhibit A: President Joe Biden, who has targeted the 1% repeatedly while pushing to overhaul U.S. tax policy to help fund infrastructure improvements and an aggressive social agenda. His administration is also reportedly seeking to make good on yet another of Occupy’s ideas: debt cancellation. The 2020 Democratic Party platform pointed out that incomes for the top 1% in the country were growing five times faster than those of the bottom 90 percent. And let’s not forget Alexandria Ocasio-Cortez, whose “Tax the Rich” dress at this year’s Met Gala event seems to leap straight out of an Occupy pret-a-porter evening collection. Read More: Erasing Student Debt Makes Economic Sense. So Why Is It So Hard to Do? “Occupy’s legacy is the commonsense attention to inequality,” says author Astra Taylor who participated in the protest and later co-authored a book chronicling its day-to-day progression. “Structural issues such as poverty were examined before Occupy, but were subterranean in American discourse,” she says. “Occupy brought them to the surface and in that way made the everyday experience of real people news.” Occupy’s unprecedented media success helped make the 99% and 1% labels commonplace. The nine months preceding Occupy were marked by global upheaval, so much so that TIME named “The Protester” the person of the year in 2011. The Arab Spring of 2011 had toppled despotic governments in Egypt, Tunisia and Libya. In Europe, the Indignados protests against the Spanish government’s austerity measures followed soon after. By the time of its launch on September 17, Occupy had emerged as the latest in a global wave of mass discontent. A legacy left, right and center The lasting effects of Occupy are not isolated to the Left. A surge in populism is visible across the American political spectrum and much of the Right’s messaging can be traced back to the discontent Occupy crystallized. Donald Trump was able to leapfrog a crowd of Republican contenders in 2016 in part by hinting early on about raising taxation rates for the rich—only to U-turn later. His close adviser, Steve Bannon has identified a growing distrust of elites by a predominately white working class as key to Trump’s popularity. “The notion of money corrupting politics, of corporate welfare, and of crony capitalism—this is the stuff that left- and right-wing populism are made of,” says Robert Reich, formerly an economic adviser to the Clinton administration. Indeed, Bannon, whose film Occupy Unmasked claimed to expose an orgy of criminality at the heart of the protest, nevertheless took up positions about the abandonment of the working class that mirrored the movement’s tone. Bannon frequently pointed to his father’s loss of life savings when AT&T stock tanked in the 2008 market drop as prime motivation. Occupy’s wide appeal was fueled by shared frustration, more specifically a sense of disconnect between commonfolk and the government. “The idea is essentially that the system is not going to save us, we’re going to have to save ourselves,” said activist Graeber two days after Occupy launched. The 1%, meanwhile, has all but written Occupy off. The movement had no discernible impact on banking. No corporate regulation is directly linked to it. Ten years later, Wall Street and corporate America are bursting at the seams. Since 2011, the S&P 500 has climbed over 325% and now has a combined market capitalization of $39 trillion. Over the last 10 years, the wealthiest have gotten robust tax breaks thanks to a sizable windfall in the Trump tax cuts of 2017. And some measures find that members of the 1% grabbed hold an additional $7 trillion in wealth during the pandemic alone. Economist Thomas Piketty, who authored two seminal books on inequality in the last decade— Capital in the 21st Century (2013) and Capital and Ideology (2019)—says, “Inequality has been moving to the center stage since Occupy and Capital, but it is not enough. The process will continue and will probably be accelerated by COVID and global warming, but the forces of resistance (especially the power of money on political campaigns, think tanks, universities, the media, etc.) are still very strong.” He adds, “What makes me optimistic is that it’s always been like this: elites fight to maintain extreme inequality, but in the end there is a long-run movement toward more equality, at least since the end of the 18th century, and it will continue.”.....»»

Category: topSource: timeNov 15th, 2021

Bitcoin & The US Fiscal Reckoning

Bitcoin & The US Fiscal Reckoning Authored by Avik Roy via NationalAffairs.com, Cryptocurrencies like bitcoin have few fans in Washington. At a July congressional hearing, Senator Elizabeth Warren warned that cryptocurrency "puts the [financial] system at the whims of some shadowy, faceless group of super-coders." Treasury secretary Janet Yellen likewise asserted that the "reality" of cryptocurrencies is that they "have been used to launder the profits of online drug traffickers; they've been a tool to finance terrorism." Thus far, Bitcoin's supporters remain undeterred. (The term "Bitcoin" with a capital "B" is used here and throughout to refer to the system of cryptography and technology that produces the currency "bitcoin" with a lowercase "b" and verifies bitcoin transactions.) A survey of 3,000 adults in the fall of 2020 found that while only 4% of adults over age 55 own cryptocurrencies, slightly more than one-third of those aged 35-44 do, as do two-fifths of those aged 25-34. As of mid-2021, Coinbase — the largest cryptocurrency exchange in the United States — had 68 million verified users. To younger Americans, digital money is as intuitive as digital media and digital friendships. But Millennials with smartphones are not the only people interested in bitcoin; a growing number of investors are also flocking to the currency's banner. Surveys indicate that as many as 21% of U.S. hedge funds now own bitcoin in some form. In 2020, after considering various asset classes like stocks, bonds, gold, and foreign currencies, celebrated hedge-fund manager Paul Tudor Jones asked, "[w]hat will be the winner in ten years' time?" His answer: "My bet is it will be bitcoin." What's driving this increased interest in a form of currency invented in 2008? The answer comes from former Federal Reserve chairman Ben Bernanke, who once noted, "the U.S. government has a technology, called a printing press...that allows it to produce as many U.S. dollars as it wishes at essentially no cost. By increasing the number of U.S. dollars in circulation...the U.S. government can also reduce the value of a dollar in terms of goods and services, which is equivalent to...inflation." In other words, governments with fiat currencies — including the United States — have the power to expand the quantity of those currencies. If they choose to do so, they risk inflating the prices of necessities like food, gas, and housing. In recent months, consumers have experienced higher price inflation than they have seen in decades. A major reason for the increases is that central bankers around the world — including those at the Federal Reserve — sought to compensate for Covid-19 lockdowns with dramatic monetary inflation. As a result, nearly $4 trillion in newly printed dollars, euros, and yen found their way from central banks into the coffers of global financial institutions. Jerome Powell, the current Federal Reserve chairman, insists that 2021's inflation trends are "transitory." He may be right in the near term. But for the foreseeable future, inflation will be a profound and inescapable challenge for America due to a single factor: the rapidly expanding federal debt, increasingly financed by the Fed's printing press. In time, policymakers will face a Solomonic choice: either protect Americans from inflation, or protect the government's ability to engage in deficit spending. It will become impossible to do both. Over time, this compounding problem will escalate the importance of Bitcoin. THE FIAT-CURRENCY EXPERIMENT It's becoming clear that Bitcoin is not merely a passing fad, but a significant innovation with potentially serious implications for the future of investment and global finance. To understand those implications, we must first examine the recent history of the primary instrument that bitcoin was invented to challenge: the American dollar. Toward the end of World War II, in an agreement hashed out by 44 Allied countries in Bretton Woods, New Hampshire, the value of the U.S. dollar was formally fixed to 1/35th of the price of an ounce of gold. Other countries' currencies, such as the British pound and the French franc, were in turn pegged to the dollar, making the dollar the world's official reserve currency. Under the Bretton Woods system, foreign governments could retrieve gold bullion they had sent to the United States during the war by exchanging dollars for gold at the relevant fixed exchange rate. But enabling every major country to exchange dollars for American-held gold only worked so long as the U.S. government was fiscally and monetarily responsible. By the late 1960s, it was neither. Someone needed to pay the steep bills for Lyndon Johnson's "guns and butter" policies — the Vietnam War and the Great Society, respectively — so the Federal Reserve began printing currency to meet those obligations. Johnson's successor, Richard Nixon, also pressured the Fed to flood the economy with money as a form of economic stimulus. From 1961 to 1971, the Fed nearly doubled the circulating supply of dollars. "In the first six months of 1971," noted the late Nobel laureate Robert Mundell, "monetary expansion was more rapid than in any comparable period in a quarter century." That year, foreign central banks and governments held $64 billion worth of claims on the $10 billion of gold still held by the United States. It wasn't long before the world took notice of the shortage. In a classic bank-run scenario, anxious European governments began racing to redeem dollars for American-held gold before the Fed ran out. In July 1971, Switzerland withdrew $50 million in bullion from U.S. vaults. In August, France sent a destroyer to escort $191 million of its gold back from the New York Federal Reserve. Britain put in a request for $3 billion shortly thereafter. Finally, that same month, Nixon secretly gathered a small group of trusted advisors at Camp David to devise a plan to avoid the imminent wipeout of U.S. gold vaults and the subsequent collapse of the international economy. There, they settled on a radical course of action. On the evening of August 15th, in a televised address to the nation, Nixon announced his intention to order a 90-day freeze on all prices and wages throughout the country, a 10% tariff on all imported goods, and a suspension — eventually, a permanent one — of the right of foreign governments to exchange their dollars for U.S. gold. Knowing that his unilateral abrogation of agreements involving dozens of countries would come as a shock to world leaders and the American people, Nixon labored to re-assure viewers that the change would not unsettle global markets. He promised viewers that "the effect of this action...will be to stabilize the dollar," and that the "dollar will be worth just as much tomorrow as it is today." The next day, the stock market rose — to everyone's relief. The editors of the New York Times "unhesitatingly applaud[ed] the boldness" of Nixon's move. Economic growth remained strong for months after the shift, and the following year Nixon was re-elected in a landslide, winning 49 states in the Electoral College and 61% of the popular vote. Nixon's short-term success was a mirage, however. After the election, the president lifted the wage and price controls, and inflation returned with a vengeance. By December 1980, the dollar had lost more than half the purchasing power it had back in June 1971 on a consumer-price basis. In relation to gold, the price of the dollar collapsed — from 1/35th to 1/627th of a troy ounce. Though Jimmy Carter is often blamed for the Great Inflation of the late 1970s, "the truth," as former National Economic Council director Larry Kudlow has argued, "is that the president who unleashed double-digit inflation was Richard Nixon." In 1981, Federal Reserve chairman Paul Volcker raised the federal-funds rate — a key interest-rate benchmark — to 19%. A deep recession ensued, but inflation ceased, and the U.S. embarked on a multi-decade period of robust growth, low unemployment, and low consumer-price inflation. As a result, few are nostalgic for the days of Bretton Woods or the gold-standard era. The view of today's economic establishment is that the present system works well, that gold standards are inherently unstable, and that advocates of gold's return are eccentric cranks. Nevertheless, it's important to remember that the post-Bretton Woods era — in which the supply of government currencies can be expanded or contracted by fiat — is only 50 years old. To those of us born after 1971, it might appear as if there is nothing abnormal about the way money works today. When viewed through the lens of human history, however, free-floating global exchange rates remain an unprecedented economic experiment — with one critical flaw. An intrinsic attribute of the post-Bretton Woods system is that it enables deficit spending. Under a gold standard or peg, countries are unable to run large budget deficits without draining their gold reserves. Nixon's 1971 crisis is far from the only example; deficit spending during and after World War I, for instance, caused economic dislocation in numerous European countries — especially Germany — because governments needed to use their shrinking gold reserves to finance their war debts. These days, by contrast, it is relatively easy for the United States to run chronic deficits. Today's federal debt of almost $29 trillion — up from $10 trillion in 2008 and $2.4 trillion in 1984 — is financed in part by U.S. Treasury bills, notes, and bonds, on which lenders to the United States collect a form of interest. Yields on Treasury bonds are denominated in dollars, but since dollars are no longer redeemable for gold, these bonds are backed solely by the "full faith and credit of the United States." Interest rates on U.S. Treasury bonds have remained low, which many people take to mean that the creditworthiness of the United States remains healthy. Just as creditworthy consumers enjoy lower interest rates on their mortgages and credit cards, creditworthy countries typically enjoy lower rates on the bonds they issue. Consequently, the post-Great Recession era of low inflation and near-zero interest rates led many on the left to argue that the old rules no longer apply, and that concerns regarding deficits are obsolete. Supporters of this view point to the massive stimulus packages passed under presidents Donald Trump and Joe Biden  that, in total, increased the federal deficit and debt by $4.6 trillion without affecting the government's ability to borrow. The extreme version of the new "deficits don't matter" narrative comes from the advocates of what has come to be called Modern Monetary Theory (MMT), who claim that because the United States controls its own currency, the federal government has infinite power to increase deficits and the debt without consequence. Though most mainstream economists dismiss MMT as unworkable and even dangerous, policymakers appear to be legislating with MMT's assumptions in mind. A new generation of Democratic economic advisors has pushed President Biden to propose an additional $3.5 trillion in spending, on top of the $4.6 trillion spent on Covid-19 relief and the $1 trillion bipartisan infrastructure bill. These Democrats, along with a new breed of populist Republicans, dismiss the concerns of older economists who fear that exploding deficits risk a return to the economy of the 1970s, complete with high inflation, high interest rates, and high unemployment. But there are several reasons to believe that America's fiscal profligacy cannot go on forever. The most important reason is the unanimous judgment of history: In every country and in every era, runaway deficits and skyrocketing debt have ended in economic stagnation or ruin. Another reason has to do with the unusual confluence of events that has enabled the United States to finance its rising debts at such low interest rates over the past few decades — a confluence that Bitcoin may play a role in ending. DECLINING FAITH IN U.S. CREDIT To members of the financial community, U.S. Treasury bonds are considered "risk-free" assets. That is to say, while many investments entail risk — a company can go bankrupt, for example, thereby wiping out the value of its stock — Treasury bonds are backed by the full faith and credit of the United States. Since people believe the United States will not default on its obligations, lending money to the U.S. government — buying Treasury bonds that effectively pay the holder an interest rate — is considered a risk-free investment. The definition of Treasury bonds as "risk-free" is not merely by reputation, but also by regulation. Since 1988, the Switzerland-based Basel Committee on Banking Supervision has sponsored a series of accords among central bankers from financially significant countries. These accords were designed to create global standards for the capital held by banks such that they carry a sufficient proportion of low-risk and risk-free assets. The well-intentioned goal of these standards was to ensure that banks don't fail when markets go down, as they did in 2008. The current version of the Basel Accords, known as "Basel III," assigns zero risk to U.S. Treasury bonds. Under Basel III's formula, then, every major bank in the world is effectively rewarded for holding these bonds instead of other assets. This artificially inflates demand for the bonds and enables the United States to borrow at lower rates than other countries. The United States also benefits from the heft of its economy as well as the size of its debt. Since America is the world's most indebted country in absolute terms, the market for U.S. Treasury bonds is the largest and most liquid such market in the world. Liquid markets matter a great deal to major investors: A large financial institution or government with hundreds of billions (or more) of a given currency on its balance sheet cares about being able to buy and sell assets while minimizing the impact of such actions on the trading price. There are no alternative low-risk assets one can trade at the scale of Treasury bonds. The status of such bonds as risk-free assets — and in turn, America's ability to borrow the money necessary to fund its ballooning expenditures — depends on investors' confidence in America's creditworthiness. Unfortunately, the Federal Reserve's interference in the markets for Treasury bonds have obscured our ability to determine whether financial institutions view the U.S. fiscal situation with confidence. In the 1990s, Bill Clinton's advisors prioritized reducing the deficit, largely out of a conern that Treasury-bond "vigilantes" — investors who protest a government's expansionary fiscal or monetary policy by aggressively selling bonds, which drives up interest rates — would harm the economy. Their success in eliminating the primary deficit brought yields on the benchmark 10-year Treasury bond down from 8% to 4%. In Clinton's heyday, the Federal Reserve was limited in its ability to influence the 10-year Treasury interest rate. Its monetary interventions primarily targeted the federal-funds rate — the interest rate that banks charge each other on overnight transactions. But in 2002, Ben Bernanke advocated that the Fed "begin announcing explicit ceilings for yields on longer-maturity Treasury debt." This amounted to a schedule of interest-rate price controls. Since the 2008 financial crisis, the Federal Reserve has succeeded in wiping out bond vigilantes using a policy called "quantitative easing," whereby the Fed manipulates the price of Treasury bonds by buying and selling them on the open market. As a result, Treasury-bond yields are determined not by the free market, but by the Fed. The combined effect of these forces — the regulatory impetus for banks to own Treasury bonds, the liquidity advantage Treasury bonds have in the eyes of large financial institutions, and the Federal Reserve's manipulation of Treasury-bond market prices — means that interest rates on Treasury bonds no longer indicate the United States' creditworthiness (or lack thereof). Meanwhile, indications that investors are growing increasingly concerned about the U.S. fiscal and monetary picture — and are in turn assigning more risk to "risk-free" Treasury bonds — are on the rise. One such indicator is the decline in the share of Treasury bonds owned by outside investors. Between 2010 and 2020, the share of U.S. Treasury securities owned by foreign entities fell from 47% to 32%, while the share owned by the Fed more than doubled, from 9% to 22%. Put simply, foreign investors have been reducing their purchases of U.S. government debt, thereby forcing the Fed to increase its own bond purchases to make up the difference and prop up prices. Until and unless Congress reduces the trajectory of the federal debt, U.S. monetary policy has entered a vicious cycle from which there is no obvious escape. The rising debt requires the Treasury Department to issue an ever-greater quantity of Treasury bonds, but market demand for these bonds cannot keep up with their increasing supply. In an effort to avoid a spike in interest rates, the Fed will need to print new U.S. dollars to soak up the excess supply of Treasury bonds. The resultant monetary inflation will cause increases in consumer prices. Those who praise the Fed's dramatic expansion of the money supply argue that it has not affected consumer-price inflation. And at first glance, they appear to have a point. In January of 2008, the M2 money stock was roughly $7.5 trillion; by January 2020, M2 had more than doubled, to $15.4 trillion. As of July 2021, the total M2 sits at $20.5 trillion — nearly triple what it was just 13 years ago. Over that same period, U.S. GDP increased by only 50%. And yet, since 2000, the average rate of growth in the Consumer Price Index (CPI) for All Urban Consumers — a widely used inflation benchmark — has remained low, at about 2.25%. How can this be? The answer lies in the relationship between monetary inflation and price inflation, which has diverged over time. In 2008, the Federal Reserve began paying interest to banks that park their money with the Fed, reducing banks' incentive to lend that money out to the broader economy in ways that would drive price inflation. But the main reason for the divergence is that conventional measures like CPI do not accurately capture the way monetary inflation is affecting domestic prices. In a large, diverse country like the United States, different people and different industries experience price inflation in different ways. The fact that price inflation occurs earlier in certain sectors of the economy than in others was first described by the 18th-century Irish-French economist Richard Cantillon. In his 1730 "Essay on the Nature of Commerce in General," Cantillon noted that when governments increase the supply of money, those who receive the money first gain the most benefit from it — at the expense of those to whom it flows last. In the 20th century, Friedrich Hayek built on Cantillon's thinking, observing that "the real harm [of monetary inflation] is due to the differential effect on different prices, which change successively in a very irregular order and to a very different degree, so that as a result the whole structure of relative prices becomes distorted and misguides production into wrong directions." In today's context, the direct beneficiaries of newly printed money are those who need it the least. New dollars are sent to banks, which in turn lend them to the most creditworthy entities: investment funds, corporations, and wealthy individuals. As a result, the most profound price impact of U.S. monetary inflation has been on the kinds of assets that financial institutions and wealthy people purchase — stocks, bonds, real estate, venture capital, and the like. This is why the price-to-earnings ratio of S&P 500 companies is at record highs, why risky start-ups with long-shot ideas are attracting $100 million venture rounds, and why the median home sales price has jumped 24% in a single year — the biggest one-year increase of the 21st century. Meanwhile, low- and middle-income earners are facing rising prices without attendant increases in their wages. If asset inflation persists while the costs of housing and health care continue to grow beyond the reach of ordinary people, the legitimacy of our market economy will be put on trial. THE RETURN OF SOUND MONEY Satoshi Nakamoto, the pseudonymous creator of Bitcoin, was acutely concerned with the increasing abundance of U.S. dollars and other fiat currencies in the early 2000s. In 2009 he wrote, "the root problem with conventional currency is all the trust that's required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust." Bitcoin was created in anticipation of the looming fiscal and monetary crisis in the United States and around the world. To understand how bitcoin functions alongside fiat currency, it's helpful to examine the monetary philosophy of the Austrian School of economics, whose leading figures — especially Hayek and Ludwig von Mises — greatly influenced Nakamoto and the early developers of Bitcoin. The economists of the Austrian School were staunch advocates of what Mises called "the principle of sound money" — that is, of keeping the supply of money as constant and predictable as possible. In The Theory of Money and Credit, first published in 1912, Mises argued that sound money serves as "an instrument for the protection of civil liberties against despotic inroads on the part of governments" that belongs "in the same class with political constitutions and bills of rights." Just as bills of rights were a "reaction against arbitrary rule and the nonobservance of old customs by kings," he wrote, "the postulate of sound money was first brought up as a response to the princely practice of debasing the coinage." Mises believed that inflation was just as much a violation of someone's property rights as arbitrarily taking away his land. After all, in both cases, the government acquires economic value at the expense of the citizen. Since monetary inflation creates a sugar high of short-term stimulus, politicians interested in re-election will always have an incentive to expand the money supply. But doing so comes at the expense of long-term declines in consumer purchasing power. For Mises, the best way to address such a threat is to avoid fiat currencies altogether. And in his estimation, the best sound-money alternative to fiat currency is gold. "The excellence of the gold standard," Mises wrote, is "that it renders the determination of the monetary unit's purchasing power independent of the policies of governments and political parties." In other words, gold's primary virtue is that its supply increases slowly and steadily, and cannot be manipulated by politicians. It may appear as if gold was an arbitrary choice as the basis for currency, but gold has a combination of qualities that make it ideal for storing and exchanging value. First, it is verifiably unforgeable. Gold is very dense, which means that counterfeit gold is easy to identify — one simply has to weigh it. Second, gold is divisible. Unlike, say, cattle, gold can be delivered in fractional units both small and large, enabling precise pricing. Third, gold is durable. Unlike commodities that rot or evaporate over time, gold can be stored for centuries without degradation. Fourth, gold is fungible: An ounce of gold in Asia is worth the same as an ounce of gold in Europe. These four qualities are shared by most modern currencies. Gold's fifth quality is more distinct, however, as well as more relevant to its role as an instrument of sound money: scarcity. While people have used beads, seashells, and other commodities as primitive forms of money, those items are fairly easy to acquire and introduce into circulation. While gold's supply does gradually increase as more is extracted from the ground, the rate of extraction relative to the total above-ground supply is low: At current rates, it would take approximately 66 years to double the amount of gold in circulation. In comparison, the supply of U.S. dollars has more than doubled over just the last decade. When the Austrian-influenced designers of bitcoin set out to create a more reliable currency, they tried to replicate all of these qualities. Like gold, bitcoin is divisible, unforgeable, divisible, durable, and fungible. But bitcoin also improves upon gold as a form of sound money in several important ways. First, bitcoin is rarer than gold. Though gold's supply increases slowly, it does increase. The global supply of bitcoin, by contrast, is fixed at 21 million and cannot be feasibly altered. Second, bitcoin is far more portable than gold. Transferring physical gold from one place to another is an onerous process, especially in large quantities. Bitcoin, on the other hand, can be transmitted in any quantity as quickly as an email. Third, bitcoin is more secure than gold. A single bitcoin address carried on a USB thumb drive could theoretically hold as much value as the U.S. Treasury holds in gold bars — without the need for costly militarized facilities like Fort Knox to keep it safe. In fact, if stored using best practices, the cost of securing bitcoin from hackers or assailants is far lower than the cost of securing gold. Fourth, bitcoin is a technology. This means that, as developers identify ways to augment its functionality without compromising its core attributes, they can gradually improve the currency over time. Fifth, and finally, bitcoin cannot be censored. This past year, the Chinese government shut down Hong Kong's pro-democracy Apple Daily newspaper not by censoring its content, but by ordering banks not to do business with the publication, thereby preventing Apple Daily from paying its suppliers or employees. Those who claim the same couldn't happen here need only look to the Obama administration's Operation Choke Point, a regulatory attempt to prevent banks from doing business with legitimate entities like gun manufacturers and payday lenders — firms the administration disfavored. In contrast, so long as the transmitting party has access to the internet, no entity can prevent a bitcoin transaction from taking place. This combination of fixed supply, portability, security, improvability, and censorship resistance epitomizes Nakamoto's breakthrough. Hayek, in The Denationalisation of Money, foresaw just such a separation of money and state. "I believe we can do much better than gold ever made possible," he wrote. "Governments cannot do better. Free enterprise...no doubt would." While Hayek and Nakamoto hoped private currencies would directly compete with the U.S. dollar and other fiat currencies, bitcoin does not have to replace everyday cash transactions to transform global finance. Few people may pay for their morning coffee with bitcoin, but it is also rare for people to purchase coffee with Treasury bonds or gold bars. Bitcoin is competing not with cash, but with these latter two assets, to become the world's premier long-term store of wealth. The primary problem bitcoin was invented to address — the devaluation of fiat currency through reckless spending and borrowing — is already upon us. If Biden's $3.5 trillion spending plan passes Congress, the national debt will rise further. Someone will have to buy the Treasury bonds to enable that spending. Yet as discussed above, investors are souring on Treasurys. On June 30, 2021, the interest rate for the benchmark 10-year Treasury bond was 1.45%. Even at the Federal Reserve's target inflation rate of 2%, under these conditions, Treasury-bond holders are guaranteed to lose money in inflation-adjusted terms. One critic of the Fed's policies, MicroStrategy CEO Michael Saylor, compares the value of today's Treasury bonds to a "melting ice cube." Last May, Ray Dalio, founder of Bridgewater Associates and a former bitcoin skeptic, said "[p]ersonally, I'd rather have bitcoin than a [Treasury] bond." If hedge funds, banks, and foreign governments continue to decelerate their Treasury purchases, even by a relatively small percentage, the decrease in demand could send U.S. bond prices plummeting. If that happens, the Fed will be faced with the two unpalatable options described earlier: allowing interest rates to rise, or further inflating the money supply. The political pressure to choose the latter would likely be irresistible. But doing so would decrease inflation-adjusted returns on Treasury bonds, driving more investors away from Treasurys and into superior stores of value, such as bitcoin. In turn, decreased market interest in Treasurys would force the Fed to purchase more such bonds to suppress interest rates. AMERICA'S BITCOIN OPPORTUNITY From an American perspective, it would be ideal for U.S. Treasury bonds to remain the world's preferred reserve asset for the foreseeable future. But the tens of trillions of dollars in debt that the United States has accumulated since 1971 — and the tens of trillions to come — has made that outcome unlikely. It is understandably difficult for most of us to imagine a monetary world aside from the one in which we've lived for generations. After all, the U.S. dollar has served as the world's leading reserve currency since 1919, when Britain was forced off the gold standard. There are only a handful of people living who might recall what the world was like before then. Nevertheless, change is coming. Over the next 10 to 20 years, as bitcoin's liquidity increases and the United States becomes less creditworthy, financial institutions and foreign governments alike may replace an increasing portion of their Treasury-bond holdings with bitcoin and other forms of sound money. With asset values reaching bubble proportions and no end to federal spending in sight, it's critical for the United States to begin planning for this possibility now. Unfortunately, the instinct of some federal policymakers will be to do what countries like Argentina have done in similar circumstances: impose capital controls that restrict the ability of Americans to exchange dollars for bitcoin in an attempt to prevent the digital currency from competing with Treasurys. Yet just as Nixon's 1971 closure of the gold window led to a rapid flight from the dollar, imposing restrictions on the exchange of bitcoin for dollars would confirm to the world that the United States no longer believes in the competitiveness of its currency, accelerating the flight from Treasury bonds and undermining America's ability to borrow. A bitcoin crackdown would also be a massive strategic mistake, given that Americans are positioned to benefit enormously from bitcoin-related ventures and decentralized finance more generally. Around 50 million Americans own bitcoin today, and it's likely that Americans and U.S. institutions own a plurality, if not the majority, of the bitcoin in circulation — a sum worth hundreds of billions of dollars. This is one area where China simply cannot compete with the United States, since Bitcoin's open financial architecture is fundamentally incompatible with Beijing's centralized, authoritarian model. In the absence of major entitlement reform, well-intentioned efforts to make Treasury bonds great again are likely doomed. Instead of restricting bitcoin in a desperate attempt to forestall the inevitable, federal policymakers would do well to embrace the role of bitcoin as a geopolitically neutral reserve asset; work to ensure that the United States continues to lead the world in accumulating bitcoin-based wealth, jobs, and innovations; and ensure that Americans can continue to use bitcoin to protect themselves against government-driven inflation. To begin such an initiative, federal regulators should make it easier to operate cryptocurrency-related ventures on American shores. As things stand, too many of these firms are based abroad and closed off to American investors simply because outdated U.S. regulatory agencies — the Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission, the Treasury Department, and others — have been unwilling to provide clarity as to the legal standing of digital assets. For example, the SEC has barred Coinbase from paying its customers' interest on their holdings while refusing to specify which laws Coinbase has violated. Similarly, the agency has refused to approve Bitcoin exchange-traded funds (ETFs) without specifying standards for a valid ETF application. Congress should implement SEC Commissioner Hester Peirce's recommendations for a three-year regulatory grace period for decentralized digital tokens and assign to a new agency the role of regulating digital assets. Second, Congress should clarify poorly worded legislation tied to a recent bipartisan infrastructure bill that would drive many high-value crypto businesses, like bitcoin-mining operations, overseas. Third, the Treasury Department should consider replacing a fraction of its gold holdings — say, 10% — with bitcoin. This move would pose little risk to the department's overall balance sheet, send a positive signal to the innovative blockchain sector, and enable the United States to benefit from bitcoin's growth. If the value of bitcoin continues to appreciate strongly against gold and the U.S. dollar, such a move would help shore up the Treasury and decrease the need for monetary inflation. Finally, when it comes to digital versions of the U.S. dollar, policymakers should follow the advice of Friedrich Hayek, not Xi Jinping. In an effort to increase government control over its monetary system, China is preparing to unveil a blockchain-based digital yuan at the 2022 Beijing Winter Olympics. Jerome Powell and other Western central bankers have expressed envy for China's initiative and fret about being left behind. But Americans should strongly oppose the development of a central-bank digital currency (CBDC). Such a currency could wipe out local banks by making traditional savings and checking accounts obsolete. What's more, a CBDC-empowered Fed would accumulate a mountain of precise information about every consumer's financial transactions. Not only would this represent a grave threat to Americans' privacy and economic freedom, it would create a massive target for hackers and equip the government with the kind of censorship powers that would make Operation Choke Point look like child's play. Congress should ensure that the Federal Reserve never has the authority to issue a virtual currency. Instead, it should instruct regulators to integrate private-sector, dollar-pegged "stablecoins" — like Tether and USD Coin — into the framework we use for money-market funds and other cash-like instruments that are ubiquitous in the financial sector. PLANNING FOR THE WORST In the best-case scenario, the rise of bitcoin will motivate the United States to mend its fiscal ways. Much as Congress lowered corporate-tax rates in 2017 to reduce the incentive for U.S. companies to relocate abroad, bitcoin-driven monetary competition could push American policymakers to tackle the unsustainable growth of federal spending. While we can hope for such a scenario, we must plan for a world in which Congress continues to neglect its essential duty as a steward of Americans' wealth. The good news is that the American people are no longer destined to go down with the Fed's sinking ship. In 1971, when Washington debased the value of the dollar, Americans had no real recourse. Today, through bitcoin, they do. Bitcoin enables ordinary Americans to protect their savings from the federal government's mismanagement. It can improve the financial security of those most vulnerable to rising prices, such as hourly wage earners and retirees on fixed incomes. And it can increase the prosperity of younger Americans who will most acutely face the consequences of the country's runaway debt. Bitcoin represents an enormous strategic opportunity for Americans and the United States as a whole. With the right legal infrastructure, the currency and its underlying technology can become the next great driver of American growth. While the 21st-century monetary order will look very different from that of the 20th, bitcoin can help America maintain its economic leadership for decades to come. Tyler Durden Tue, 10/19/2021 - 23:25.....»»

Category: worldSource: nytOct 20th, 2021

Why The Swiss Electorate Put The Brakes On Climate Policy

Why The Swiss Electorate Put The Brakes On Climate Policy Authored by Hans Rentsch via RealClearEnergy.com, On June 13th, the revised CO2 law failed at the Swiss ballot box. Judging from the rather confused debate following the rejection of the bill, one can hardly say that the shock in the politically competent circles had a beneficial effect in favor of more realism. Many commentators were surprised that the electorate put the brakes on climate policy, and many seemed puzzled about how to interpret the will of the people as expressed in the vote. In the referendum of May 2017, the revised Energy Act had been approved by a clear majority, but four years later a tight "no" to the revised CO2 Law followed. No Inconsistency in Voting Behavior Both legislative revisions are to be viewed as interconnected partial steps in the former energy minister Doris Leuthard's Energiewende (energy transition project). First yes, then no - and that looks quite inconsistent. The VOTO and VOX studies from the follow-up surveys allow a comparison of the two votes. The crucial point sounds almost trivial: The electorate that approved the Energy Act in May 2017 was not the same electorate that voted against the CO2 Act four years later - even disregarding the demographic shifts. The main difference lies in the much higher voter turnout for the CO2 Act - almost 60 percent, versus just 43 percent for the Energy Act. This high mobilization, well above the average of 46 percent, was due to the four other proposals that were voted on the same day, above all the two popular initiatives aiming at a reorientation of the agricultural policy. Due to radical requirements regarding the protection of drinking water and the use of pesticides for agriculture as well as upstream and downstream industries, these had led the farming sector to expect drastic consequences. In an extensive and expensive campaign, the associations of the agricultural sector fought the initiatives and lured many people to the polls in rural regions. According to an analysis by the survey institute GFS Bern, a double no to the agricultural initiatives is the strongest explanation factor for a no to the CO2 law. Obviously, it didn't take a lot of additional energy to also write a no on the voting slip for the CO2 law.  A detail from the VOTO-study is also worth being mentioned. Although the conservative Schweizerische Volkspartei (SVP) was the only major party to support the referendum against the Energy Act in 2017, the party was unable to mobilize its supporters. Only 38 percent took part in the vote, the lowest percentage of any party. The SVP, on the other hand, mobilized its supporters most strongly in the vote on the CO2 Act in June this year: 73 percent of SVP sympathizers took part in the vote - because of the two strongly mobilizing agricultural initiatives. The CO2 law, so to speak as the sidecar, bore the consequences.  The Urban-Rural Divide and Other Gaps Many comments on the vote complained about a growing urban-rural divide. As if this were something new! The same would have been visible in other referenda if one had looked more closely. The urban-rural divide only depicts the different political positions: urban Switzerland ticks left, rural Switzerland non-left. Instead of superficially complaining about a divide between town and country, it is worth looking at other ditches. It goes without saying that the differences between left and right are particularly great when it comes to issues that are as ideologically and morally charged as energy and climate policies. Supporters of the Green Party voted in favor of the Energy Act with a yes share of 94 percent, while only 16 percent of SVP party supporters voted in favor. Almost the same gap appeared in the referendum on the CO2 law: 93 percent versus 17 percent. There are also astonishing divides within parties. The official voting recommendation of the national pro-business and pro-market party "FDP. Die Liberalen" was yes in both votes, but some cantonal FDP sections opposed the national pro decision. And a majority of the FDP party supporters voted against the official party line. In the referendum on the new Energy law, 53 percent rejected the bill, and no less than 63 percent voted against the revised CO2 law. In an opinion poll amongst party members before the elections to the lower house in autumn 2019, the party leadership was able to win support for a green "last-minute" swivel, obviously under the influence of the "Fridays for Future" strikes, very much inflated by the compliant media. However, such surveys typically produce declamatory statements at zero cost, while referenda on new legislation are about concrete measures and noticeable effects. There was a very special divide in the sphere of influence of the traditional farmers' party SVP, which was the only significant party in both referenda to oppose the bills. But in the case of the revised CO2 law the Swiss Farmers Association had recommended adoption, thus departing far from its political base. The informed observer suspects, that the Swiss Farmers Association had entered into an logrolling deal with economic interests that fought for the law, who in return promised to respect agricultural protection interests, especially in the case of new Free Trade Agreements. Since the research institutes mandated to produce the VOX or VOTO studies still collect genderrelated data, somewhat old-fashioned, according to binary-biological gender, a gap between men and women becomes visible. Women had voted in favor of the Energy Act with a pro share of 64 percent, men only with 53 percent. In the referendum on the CO2 Act, women approved the law with a yes majority of 52 percent, while men produced only 45 percent yes votes. The difference was somewhat smaller than in the case of the Energy law. But the gender divide was of a more serious quality, because men dominated women by overturning the law approved by a majority of women. The Educational Elite as the Spearhead of the Energiewende (energy transition) There is also a wide gap in voting behavior based on the level of education. Highly educated people owning a university degree emerged from the referenda as the most convinced "energy transitioners." The group with only basic vocational training or an apprenticeship rejected the Energy Act with around 55 percent no votes. In contrast, people with a tertiary education voted for the law with a three-quarters majority. In the vote on the CO2 bill, the differences were smaller, but with a pro share of around 70 percent, the bracket of the highly educated was still well above the approval rates of the groups with a lower level of education. These are typically people who have to cope with their everyday life and usually have other worries than using scarce material resources to express some ideal values. An orientation based on certain morally rewarding values is widespread among the materially privileged educated elite. Such attitudes are often used for personal image cultivation, but such behavior is associated with costs. Just think of the high prices for "ethical consumption." In an article in the leading Swiss daily newspaper Neue Zürcher Zeitung, the cultural scientist Wolfgang Ullrich wrote that to orient one's life towards higher values is the bliss only of elites. Their privileged social position enables the "new moral nobility" to implement a value-conscious lifestyle and thus to rise above other people. The fact that the support for the Energy and the CO2 bills was so strong in the university educated and the cultural milieus can primarily be explained with this value orientation and not with a superior technical or economic insight into the effects of the new legislation. The prominent American moral psychologist Jonathan Haidt said in a speech, only slightly exaggerating, that highly educated people are not, as they themselves would think, better informed than others, they are just more adept at justifying their prejudices. The rough categorization "highly educated" also blurs an important fact. In terms of numbers, the predominant university degrees stem from "soft" subjects generally referred to as humanities (typically with female over-representation) such as languages, psychology, journalism, media, law, political science, sociology, history, geography, ethnology and medical-social subjects. In contrast to the political-ideological spectrum of the entire electorate, there is a pronounced left-green "value bias" among university graduates in the above-mentioned fields of study. Such orientation towards self-defined values also reflects a tendency towards illusory social goals and a massive overestimation of political will and ability in the sense of: all we want is also feasible. Farewell to Illusions: The Paris 2015 1.5 Degree Target It goes without saying that the electorate's no to the new CO2 law does not fit into the officially promoted path towards the projected energy transition and the intermediate targets of CO2 reduction in line with the Paris 2015 commitments. But how is the will of the people to be derived from the two seemingly opposed outcomes in the referenda on energy and climate policy? On the one hand, the participating electorates in the two votes differ greatly in many respects. On the other, the voting results obviously depend on whether a bill is presented to voters as a single issue or in a package with other projects of legislation. In times of rising alarmist voices, nothing would be more useful than to engage in a sober analysis of the situation without prejudice and to part from all the illusions that shape current energy and climate policy. This applies in particular to the Fukushima-fueled Swiss Energiewende.  The 1.5 degree target from the Paris 2015 conference and agreement and the connected grandiose "zero carbon" oaths are the great basic illusions. Unattainable goals are bound to make climate policy a constant failure. Why should the world state of 1850 at the end of the Little Ice Age with a CO2 concentration of 280 ppm represent a natural climate optimum for the environment, health, and nutrition? Furthermore, since the average global temperature has already increased by 1.1 degrees since then, and since the temperature reacts with a delay to today's CO2 concentration of 415 ppm, the 1.5 degrees would probably also be exceeded, even if the human world were to stand still tomorrow. Nonetheless, our responsible authorities continue to announce unperturbed that the 1.5 degree target of the 2015 Paris Climate Agreement can be achieved, if we only want it. The blurred meaning of "we" is confusing the message. We in tiny Switzerland have nothing to do with reaching the 1.5 degree target. We have only made commitments to reduce greenhouse gases in solidarity, in the hope that the other Paris 2015 committed countries will do the same and stick to their nationally determined contributions (NDC). In light of the free-rider problem, this hope is built on sand. If, on the other hand, "we" is meant globally, it is outside of Switzerland's political responsibilities and competencies. The enormous technological and economic progress and the high level of prosperity in the societies of mass consumption in the western welfare states and in successful Asian countries as well as the development in poorer countries are outright unimaginable without the availability of fossil energy. From simple logics, it can be concluded that a brutal decarbonization of economies would be an extremely costly project - social costs expressed, economically correct, as opportunity costs. (Note: If scarce resources are put to a new use, they are missing elsewhere. The added value that is lost from the next best or even better use of these resources are economic costs). Moreover, the distribution conflicts to be expected from a radical decarbonization policy, both within and between states, would hardly be politically resolvable. Anyone who throws the catchphrase "climate justice" into the debate in order to remind rich countries of their special responsibility takes a narrow view. Because it is the technological and economic achievements of the countries shaped by western values that have massively reduced extreme poverty and child mortality worldwide and have more than doubled the average life expectancy since 1900 - with the greatest progress in the (formerly) poor countries of Asia and Africa.  The public debate about the costs and benefits of an "ambitious climate policy" is characterized by vague warnings and illusions. The best-founded cost estimates of the long-term damage caused by climate change and the costs of climate policy are due to the American Yale economist William Nordhaus. In 2018, he received the Nobel Prize for his contributions to the "calculus" of climate policy. Nevertheless, his findings seem to have no effect on the usual current climate policy, which is by and large based on grandiose declamations, spilling scarce resources with mostly symbolic effect. Among climate activists of all kinds who live in the illusionary world of Paris 2015, Nordhaus has few supporters anyway. No wonder, because according to Nordhaus' estimates, a climate policy that seeks to achieve the 1.5 degree target is unaffordable in practice. In the trade-off between the costs of climate policy and the damage caused by climate change, a warming scenario of around 3.5 degrees does best in the model simulations of Nordhaus. Even if many may doubt these model-based results or outright dismiss them as cynical, such cost-benefit comparisons are indispensable, not least because the model assumptions realistically reflect the way people think and act. The choice of a realistic discount rate for calculating present values of costs is of utmost importance here, but an ongoing debate among economists on this issue would call for a separate discussion. An Energy Transition Without Nuclear Power? The illusions cultivated in Switzerland, including "fake facts," also disseminated by official bodies in the federal administration, concern alleged savings in electricity consumption despite the planned electrification of mobility and buildings, the grossly overestimated future expansion of renewable energies wind, solar and hydropower, availability of electricity imports to cover the massively growing winter electricity production deficit, and the vague hopes for technological breakthroughs in electricity storage and in carbon capture and storage. All this has been reported in detail elsewhere, with no visible effect on current policies and projects. Political Switzerland is a heavy steamer with many actors in the engine room and at the helm. The approval of the Energy Act in 2017 was primarily a vote in favor of phasing out nuclear energy. In the VOTO follow-up survey, four out of five respondents expressed a wish for a nuclear-free Switzerland. The images of the reactor explosion in Fukushima were still firmly imprinted on people's minds. "Hard cases make bad law" is an old political adage that pops up here. We could have learned a lot from the Fukushima hard or even worst case, if we had analyzed the consequences more calmly, instead of announcing an "energy transition" two months after the disaster with the phasing out of nuclear energy. Winston Churchill is credited with observing that security lies in the multitude of variables that are available as options for action. If, based on costless wishes and on vague hopes, a county's voting population restricts options for action, it must also be prepared to deal with a reality that might behave differently than hoped for. After all, voices are now gradually being raised calling for a reassessment of nuclear energy in times of ruthless but very fragile targets for "net-zero 2050." Due to the highest possible democratic legitimation by a popular vote, an exit from the nuclear phase-out currently seems practically impossible in Switzerland. What makes a turnaround even harder: the fundamentalistic rejection of nuclear energy is a central element of the mission and self-image of politically influential persons, parties and NGOs. A sober reassessment would be a betrayal of a fundamental position, to which one has been completely devoted for decades. Finally, if around four-fifths of those eligible to vote are in favor of phasing out nuclear energy, it takes civil courage to stand up and give the remaining fifth a vote. A counter-experience to Fukushima that could stir up people's mindset in a similar way favoring a more realistic energy policy, would be an electricity blackout provoking the failure of important systems. Such an event is not unrealistic under the pressures and constraints of the announced energy transition. Relevant warnings can be found in official risk scenarios for Switzerland. With the ongoing and increasing uncoupling from the European electricity network due to Switzerland’s rejection of an institutionally binding general agreement with the EU, these risks are rising. But as long as the perception and the media communication of accidents in the energy sector - not least thanks to the specters "Fukushima" and "Chernobyl" - are so distorted at the expense of nuclear energy, the prevailing opinions in the population should not be overestimated. Perhaps in a few years we shall see a climate youth on strike who - in contrast to today's ideologically blind Fridays for Future activists - is calling for an exit from the "nuclear exit." All to the benefit of ambitious climate targets. *  *  * (Note: This essay expresses a personal opinion and in no way presents an officially approved perspective of either the CCRS or the University of Zurich).  Tyler Durden Sat, 10/09/2021 - 09:20.....»»

Category: personnelSource: nytOct 9th, 2021

Futures Drift Before Taper-Triggering Jobs Report

Futures Drift Before Taper-Triggering Jobs Report US equity-index drifted in a tight range overnight, in a tight range before key jobs data that could provide clues on the Federal Reserve’s policy. As noted in our preview, unless the jobs report is a disaster, it will virtually assure the Fed launches tapering in one month. Markets drifted higher on Thursday after the Senate averted the risk of an immediate default, pushing global stocks on course for their best week since early September, but a late day selloff wiped away most gains and closed spoos below the critical 4400 level. At 07:30 a.m. ET, Dow e-minis were up 35 points, or 0.10%, S&P 500 e-minis were up 5.00 points, or 0.1%, and Nasdaq 100 e-minis were up 10.75 points, or 0.07%. Treasury Yields were 1 point higher after earlier tagging 1.60%, the highest since June. The dollar was flat while Brent topped $83 before paring gains. Bitcoin traded above $55,000. Uncertainty over the debt ceiling negotiations and a run-up in U.S. Treasury yields over elevated inflation were major concerns among investors earlier this week, injecting volatility in equity markets this week. High-growth FAAMG stocks slipped in premarket trading following sharp gains in previous session. Energy firms including Chevron Corp and Exxon Mobil gained about 0.8% tracking crude prices, while major U.S. lenders also edged up as the benchmark 10-year yield hit its highest level since June 4. Here are some of the biggest movers and stocks to watch today: Tesla (TSLA US) shares in focus after Elon Musk says a global shortage of chips and ships is the only thing standing in the way of the company maintaining sales growth in excess of 50% Sundial Growers (SNDL US) shares rise as much as 19% in U.S. premarket after the Canadian cannabis producer said it will buy liquor and pot retailer Alcanna for $276m in stock Allogene Therapeutics (ALLO US) plunges 36% in U.S. premarket trading after an early-stage study of its cell therapy was put on hold by U.S. regulators Prelude Therapeutics (PRLD US) fell in U.S. premarket trading, adding to Thursday’s 40% plunge on early- stage data for the company’s experimental cancer treatments that Barclays says came in below expectations Vaxart (VXRT US) rises 8% in U.S. premarket trading after its oral tablet vaccine candidate cut transmission of Covid-19 in animals, according to data from a study led by Duke University Faraday Future (FFIE US) slides 4% in U.S. premarket trading after J Capital says it is short on the stock. The short-seller says they don’t think the company “will ever sell a car” Codiak Biosciences (CDAK US) shares fell 6% in Thursday postmarket trading after disclosing that Sarepta Therapeutics is terminating a research license and option agreement Agile Therapeutics (AGRX US) tumbled Thursday postmarket after the women’s health-care company said that it intends to offer and sell shares of its common stock, as well as warrants to purchase shares of its common stock, in an underwritten public offering Looking to today's main event, economists expect September hiring to have surged by 500,000 jobs as the summer wave of COVID-19 infections began to subside, and as millions of Americans no longer receive jobless benefits, positioning the Fed to start scaling back its monthly bond buying.  “All roads lead to non-farm payrolls data which will decide, in the market’s minds, whether the start of the Fed taper is a done deal for December,” said Jeffrey Halley, senior market analyst at OANDA. “I do not believe that markets have priced in the Fed taper and its implications to any large degree yet. Even a weak number probably only delays the inevitable for another month.” Even “reasonably soft” payrolls and unemployment figures wouldn’t be enough to change the minds of its officials, according to Ipek Ozkardeskaya, senior analyst at Swissquote. “Only a shockingly low figure could do that,” she said. “The persistent rise in oil prices can only continue boosting inflation fears and the central bank hawks, limiting the upside potential in case of a further recovery in stocks.” “As soon as you start thinking about tapering it’s really hard to not then think about what that means for the Fed funds rate and when that might start to increase,” Kim Mundy, currency strategist and international economist at Commonwealth Bank of Australia in Sydney, said on Bloomberg Television. “We do see scope that markets can start to price in a more aggressive Fed funds rate hike cycle.” In Europe, tech companies led the Stoxx Europe 600 Index down 0.2%, with energy stocks and carmakers being the only industry groups with meaningful gains. Chip stocks fell, especially Apple suppliers, following a profit warning from Asian peer and fellow supplier AAC Technologies. On the other end, European travel stocks rose after U.K. confirmed the travel “red list” will be cut to just seven countries; British Airways parent IAG and TUI led the advances. Here are some of the biggest European movers today: Daimler shares gains as much as 3.2%, outperforming peers, after UBS upgrades stock to buy from neutral, calling it an earnings momentum story that stands to gain from strong demand, electrification trends and its future focus on passenger cars. Adler shares rise as much as 13% after shareholder Aggregate sells a call option to Vonovia for a 13.3% stake in the German real estate investment firm at a strike price of EU14 per share. Cewe Stiftung shares jump as much as 4.2%, their best day in over three months, after the photography services firm gets a new buy rating at Hauck & Aufhaeuser. Weir shares fall as much as 6.3%, to the lowest since Nov. 13, after the U.K. machinery maker announced that a ransomware attack will affect full-year profitability; Jefferies says it’s unlikely that guidance beyond that will be revised. Zur Rose slumps as much as 9.2% after Berenberg downgrades the Swiss online pharmacy to hold from buy, citing the expected negative impact from a delay in the implementation of mandatory e-prescriptions in Germany. Czech digital-payments provider Eurowag shares slide as much as 10% as it starts trading in London, after pricing its IPO below an initial range and making its debut a day later than planned. Asian stocks rose for a second day as China’s market reopened higher and the U.S. Senate approved a short-term increase in the debt ceiling. The MSCI Asia Pacific Index advanced as much as 1% in a rally led by consumer discretionary shares. Alibaba and Tencent were among the biggest contributors to the gauge’s climb. Shares in mainland China surged more than 1% as investors returned from the Golden Week holiday. Chinese property shares fell after a report that more than 90% of China’s top 100 property developers’ sales declined in September by an average of 36% from the same period last year, while investor concerns about developers’ liquidity rose after Fantasia bonds were suspended from trading. In mainland: CSI 300 Real Estate Index drops as much as 2%, Seazen Holdings falls as much as 5%, Poly Developments -4%. Asia’s stock benchmark is slightly down for the week, as rising bond yields weighed on tech-heavy indexes in South Korea, Taiwan and Japan. The gauge is down more than 1% this month amid an energy shortage in China and India.  “Markets may not want to commit directionally” given that we have non-farm payrolls data on the docket, making a follow-through of today’s rally suspect, said Ilya Spivak, the head of Greater Asia at DailyFX. Traders are expecting today’s U.S. employment data to provide clues on the direction of the world’s largest economy. On Thursday, the U.S. averted what would have been its first default on a debt payment. Most major benchmarks in Asia climbed, led by Japan, Indonesia and Australia. India’s central bank kept its lending rates at a record low at a policy meeting today. In Australia, the S&P/ASX 200 index rose 0.9% to close at 7,320.10. All industry groups edged higher. The benchmark rose 1.9% for the week, the biggest weekly gain since early August. Miners led the charge, having the best week since July, banks the best since the start of March. EML Payments tumbled after an update on its Ireland subsidiary from the country’s central bank. Chalice Mining continued its rebound, finishing the session the strongest performer in the mining subgauge.  There is a risk of excessive borrowing due to low interest rates and rising house prices, Reserve Bank of Australia said in its semiannual Financial Stability Review released Friday. In New Zealand, the S&P/NZX 50 index fell 0.1% to 13,086.60 In rates, Treasury futures remained under pressure after paring declines that pushed 10-year yield as high as 1.5995% during European morning, highest since June 4; the 1.60% zone is thought to have potential to spur next wave of convexity hedging. U.K. 10-year is higher by 4bp, German by 2.3bp - gilts underperformed, weighing on Treasuries as money markets continue to bring forward BOE rate-hike expectations. During U.S. session, September jobs report may seal case for Fed taper announcement in November.  In FX, the greenback traded in a narrow range versus G10 peers while 10-year Treasury yields approached 1.6%, outperforming Bunds.  Gilt yields rose 5-6bps across the curve; demand for downside protection in the pound eases this week as the U.K. currency moves off cycle lows amid money markets repricing. U.K. wage growth rose at its strongest pace on record in a survey of job recruiters, indicating strains from a shortage of workers are persisting. Turkish lira initially weakens above 8.96/USD before recouping half of its losses In commodities, oil extended a rebound, on track for a seventh weekly gain. Crude futures pushed to the best levels for the week. WTI rises 1.5% near $79.50, Brent pops back on to a $83-handle. Spot gold trades a $5 range near $1,757/oz. Base metals are mostly positive, with LME nickel gaining over 3.5%. Looking at the day ahead, the highlight will be the aforementioned September jobs report. Central bank speakers include ECB President Lagarde and the ECB’s Panetta. Market Snapshot S&P 500 futures little changed at 4,389.50 STOXX Europe 600 down 0.3% to 457.18 MXAP up 0.4% to 194.72 MXAPJ up 0.2% to 636.80 Nikkei up 1.3% to 28,048.94 Topix up 1.1% to 1,961.85 Hang Seng Index up 0.6% to 24,837.85 Shanghai Composite up 0.7% to 3,592.17 Sensex up 0.7% to 60,070.61 Australia S&P/ASX 200 up 0.9% to 7,320.09 Kospi down 0.1% to 2,956.30 Brent Futures up 1.4% to $83.09/bbl Gold spot up 0.0% to $1,756.25 U.S. Dollar Index little changed at 94.29 German 10Y yield up +3.4 bps to -0.151% Euro little changed at $1.1549 Top Overnight News from Bloomberg Global talks to reshape the corporate tax landscape are set to resume on Friday after Ireland’s decision to adhere to the world consensus on a minimum rate removed one hurdle to an agreement that still hangs in the balance Germany’s Social Democrats hailed a positive start in their effort to form a government after their first meeting with the Greens and the pro-business Free Democrats A U.S. nuclear-powered attack submarine struck an object while submerged in international waters in the Indo- Pacific region last week, the Navy said, adding that no life- threatening injuries were reported China drained the most short- term liquidity from the banking system in a year on a net basis as it reduced support after a week-long holiday. Government bond futures slid by the most since August China’s central bank will continue to push for the reform of its benchmark loan rate and make deposit rates more market-based, according to a senior official India’s central bank surprised markets by suspending its version of quantitative easing, signaling the start of tapering pandemic-era stimulus measures as an economic recovery takes hold U.K. government bond yields have climbed to levels last seen before the Brexit referendum in 2016 relative to German peers, as traders brace for inflation in Britain over the next decade to far outpace the rate in Europe’s largest economy A detailed look at global markets courtesy of Newsquawk Asia-Pac stocks traded mostly higher as the region conformed to the global upbeat mood after the agreement in Washington to raise the debt ceiling which the Senate approved, with the overnight bourses also invigorated by the return of China and strong Caixin PMI data. The ASX 200 (+0.9%) was led higher by strength in mining names with underlying commodity prices boosted as Chinese buyers flocked back to market which helped the ASX disregard a record increase in daily COVID-19 cases in Victoria state. Nikkei 225 (+1.3%) was the biggest gainer and reclaimed the 28k level as exporters benefitted from a softer currency, while attention turns to PM Kishida who will outline his policy program today and is reportedly planning to present an additional budget after the election. Furthermore, there were recent comments from an ally of the new PM who suggested that capital gains tax could be raised to 25% from the current 20% without affecting stock prices, although this failed to dent the mood in Tokyo and weaker than expected Household Spending was also brushed aside. The gains for the KOSPI (-0.1%) were later reversed alongside the tentative price action in index heavyweight Samsung Electronics after its Q3 prelim. results showed oper. profit likely rose to its highest in three years but missed analysts’ forecasts. Hang Seng (+0.6%) and Shanghai Comp. (+0.7%) were mixed with the latter jubilant on reopen from the Golden Week holiday after improved Caixin Services and Composite PMI data which both returned to expansionary territory. This helped mainland stocks overlook the recent developer default fears and largest daily liquidity drain by the PBoC since October last year, although Hong Kong initially lagged amid heavy Northbound Stock Connect trade. Finally, 10yr JGBs declined on spillover selling from T-notes and with havens shunned amid the gains across riskier assets, although downside in JGBs was limited given the BoJ’s presence in the market for nearly JPY 1.5tln of JGBs with up to 10yr maturities. Top Asian News Gold Steadies Ahead of Key U.S. Jobs Report as Yields Climb Investors Fear Tax Talk in Kishida’s ‘New Japanese Capitalism’ China Coal Prices Plunge as Producers Vow to Ease Shortages China Developer Stocks Fall After Report of Monthly Sales Drop An initially contained to marginally-firmer European cash open followed an upbeat APAC handover (ex-Hang Seng) was short-lived with bourses coming under moderate pressure; Euro Stoxx 600 -0.3%. As such, major indices are all in the red, except for of the UK FTSE 100 which is essentially unchanged and bolstered by strength in heavy-weight energy and mining names given broader price action the return of China. Sectors were initially mixed at the open, but in-fitting with the action in indices, has turned to a predominantly negative performance ex-energy. Crossing to the US, futures have directionally been following European peers, but the magnitude has been more contained, with the ES unchanged as we await the September labour market report for any read across to the Fed’s policy path; however, officials have already made it clear that it would have to be a very poor report to spark a deviation from its announced intentions, where it is expected to announce an asset purchase tapering in November. Returning to Europe, Daimler (+2.5%) stands out in the individual stocks space, firmer after a broker upgrade and notable price target lift at UBS; Marks & Spencer (+1.5%) is also supported on broker action. To the downside lies Weir Group (-3.0%) after reports of a ransomware attack. Top European News Adler’s Largest Shareholder Sells Option on Stake to Vonovia; A Controversial Tycoon Sits on Adler’s $9 Billion Pile of Debt Chip Stocks Drag Tech Gauge Lower as Asian Apple Supplier Warns European Gas Rises as Bumpy Ride Continues With Cold Air Coming Lira Weakens to Fresh Low as Rising U.S. Yields Add Pressure In FX, the Dollar is trying to regroup and firm up again after its latest downturn amidst a further rebound in US Treasury yields, more pronounced curve re-steepening, and perhaps some relief that the Senate finally passed the debt ceiling extension bill, albeit by a slender margin and only delaying the issue until early December. Looking at the DXY as a benchmark, a marginally higher low above 94.000 and lower high below 94.500 is keeping the index contained as the clock ticks down to September’s jobs report that is expected to show a recovery in hiring after the prior month’s shortfall, but anecdotal data has been rather mixed to offer little clear pointers for the bias around consensus - full preview of the latest BLS release is available via the Research Suite under the Ad-hoc Economic Analysis section. From a technical perspective, near term support for the DXY resides at 94.077 (vs the current 94.139 base) and resistance sits at 94.448 (compared to a 94.338 intraday high). TRY - A double whammy for the already beleaguered Lira as oil prices come back to the boil and ‘sources’ suggest that Turkish President Erdogan’s patience is wearing thin with the latest CBRT Governor as the Bank waited until September to cut rates. Recall, Erdogan has already ousted a CBRT chief for not loosening monetary policy in his belief that lowering the cost of borrowing will bring inflation down, and although the reports have been by a senior member of his administration there is a distinct feeling of no smoke without fire in the markets as Usd/Try remains bid having only held below 9.0000 by short distance between 8.9707-8.8670 parameters. CHF/JPY - No real surprise that the low yielders and funders are underperforming, even though broadly upbeat risk sentiment during APAC hours has not rolled over to the European session. The Franc has retreated to 0.9300 vs the Buck and Yen is trying to fend off pressure on the 112.00 handle after failing to sustain momentum through 111.50 before weaker than expected Japanese household spending data overnight. However, decent option expiry interest from 111.85-75 (1.4 bn) may weigh on Usd/Jpy pending the aforementioned US payrolls outcome. AUD - Some payback for the Aussie after Thursday’s outperformance, as Aud/Usd loses a bit more momentum following its rebound beyond 0.7300 and with hefty option expiries at 0.7335 (2.7 bn) capping the upside more than smaller size at the round number (1.1 bn) cushions the downside. In commodities, WTI and Brent remain on an upward trajectory after the mid-week pullback; as it stands, crude benchmarks are near fresh highs for the week, with WTI for November eyeing USD 80/bbl once again. Fresh news flow for the complex has been sparse, aside from substantial UK press focus on the domestic energy price cap potentially set to increase next year. More broadly, US officials have largely reiterated commentary from the Energy Department provided on Thursday around not currently intending act on energy costs with a reserve release. The session ahead has just the Baker Hughes rig count specifically for crude scheduled, though the complex may well get dragged into a broader risk move depending on the initial reaction to and analysis on NFP. For metals, spot gold and silver are contained around the unchanged mark and haven’t been affected by any significant amount by the firmer USD or elevated yield space thus far. Elsewhere, base metals are buoyed by China’s return and strong Caixin data from the region, although it is worth highlighting that the likes of LME copper are well off earlier highs. US Event Calendar 8:30am: Sept. Change in Nonfarm Payrolls, est. 500,000, prior 235,000 Change in Private Payrolls, est. 450,000, prior 243,000 Change in Manufact. Payrolls, est. 25,000, prior 37,000 Unemployment Rate, est. 5.1%, prior 5.2% Sept. Underemployment Rate, prior 8.8% Labor Force Participation Rate, est. 61.8%, prior 61.7% Average Weekly Hours All Emplo, est. 34.7, prior 34.7 Average Hourly Earnings MoM, est. 0.4%, prior 0.6% Average Hourly Earnings YoY, est. 4.6%, prior 4.3% 10am: Aug. Wholesale Trade Sales MoM, est. 0.9%, prior 2.0%; Wholesale Inventories MoM, est. 1.2%, prior 1.2% DB's Jim Reid concludes the overnight wrap I’ve never quite understood why you’d go to the cinema if you’ve got a nice telly at home but such has been the nature of life over the last 19 months that I was giddy with excitement last night at booking tickets for James Bond at the local cinema next week. We’ve booked it on the same night as our first ever physical parents evening where I’ll maybe have the first disappointing clues that my three children aren’t going to be child prodigies and that maybe they’ll even have to settle for a career in finance! Markets have been stirred but not completely shaken this week and yesterday they continued to rebound thanks to the near-term resolution on the US debt ceiling alongside subsiding gas prices, which took the sting out of two of the most prominent risks for investors over the last couple of weeks. That provided a significant boost to risk appetite, and by the close of trade, the S&P 500 had recovered +0.83% in its 3rd consecutive move higher, which put it back to just -3.0% beneath its all-time high in early September, whilst Europe’s STOXX 600 was also up +1.60% and closed before a later US sell-off. Attention will today focus squarely on the US jobs report at 13:30 London time, which is the last one before the Fed’s next decision in early November, where a potential tapering announcement is likely bar an extraordinarily poor number today, or an exogenous event in the next few weeks. Starting with the debt ceiling, yesterday saw Democratic and Republican Senators agree to pass legislation to raise the ceiling by enough to get to early December, meaning we won’t have to worry about it for another 8 whole weeks. The Senate voted 50-48 with no Republicans blocking the legislation to increase the debt limit by $480bn, with House Majority leader Hoyer saying that the House would convene on Tuesday to pass the measure as well. To raise it for a longer period, the chatter out of Washington made it clear that Democrats would need to need to raise the debt ceiling in a partisan manner as part of the reconciliation process. As we mentioned in yesterday’s edition, this extension means that a number of deadlines have now been punted into the year end, including the government funding and the debt ceiling (both now expiring the first Friday of December), just as the Democrats are also seeking to pass Biden’s economic agenda through a reconciliation bill containing much of their social proposals, alongside the $550bn bipartisan infrastructure package. And on top of that, we’ve also got the decision on whether Chair Powell will be re-nominated as Fed Chair, with the decision 4 years ago coming at the start of November. So a busy end to the year in DC. The other main story yesterday was the sizeable decline in European natural gas prices, with the benchmark future down -10.73% to post its biggest daily loss since August. Admittedly, they’re still up almost five-fold since the start of the year, but relative to their intraday peak on Wednesday they’ve now shed -37.5%. So nearly a double bear market all of a sudden! The moves follow Wednesday’s signal that Russia could supply more gas to Europe. However, even as energy prices were starting to fall back from their peak, the effects of inflation were being felt elsewhere, with the UN’s world food price index climbing to its highest level in a decade in September. Looking ahead, today’s main focus will be on the US jobs report for September later on. Last month the report significantly underwhelmed expectations, coming in at just +235k, which was well beneath the +733k consensus expectation and the slowest pace since January. That raised questions as to the state of the labour market recovery, and helped to complicate a potential decision on tapering, with nonfarm payrolls still standing over 5m beneath their pre-Covid peak. This month, our US economists are expecting a somewhat stronger +400k increase in nonfarm payrolls, which should see the unemployment rate tick down to a post-pandemic low of 5.1%. On the bright side at least, the ADP’s report of private payrolls for September on Wednesday came in at an above-forecast 568k (vs. 430k expected), while the weekly initial jobless claims out yesterday for the week through October 2 were beneath expectations at 326k (vs. 348k expected). Ahead of that, global equities posted a decent rebound across the board, with cyclicals leading the march higher on both sides of the Atlantic. As mentioned at the top, the S&P 500 advanced +0.83%, which was part of a broad-based advance that saw over 390 companies move higher on the day. That said the index was up as much as +1.5% in early US trading before slipping lower in the US afternoon. The pullback was partly due to new headlines that China’s central bank plans to continue addressing monopolistic actions in internet companies that operate in the payments sector. Nonetheless, Megacap tech stocks were among the big winners yesterday, with the FANG+ index up +2.08%, whilst the small-cap Russell 2000 index was also up +1.58%. In Europe, the STOXX 600 (+1.60%) posted its strongest daily gain since July, and the broader gains helped the STOXX Banks index (+1.61%) surpass its pre-pandemic high, taking it to levels not seen since April 2019, even as sovereign bond yields moved lower. Speaking of sovereign bonds, yesterday saw a divergent set of moves once again, with yields on 10yr Treasuries up +5.2bps to 1.573%, their highest level since June, whereas those across the European continent moved lower. The US increase came against the backdrop of that debt ceiling resolution, and there was a noticeable rise in yields for Treasury bills that mature in December, which is where the debt ceiling deadline has now been kicked to. Elsewhere in North America, the Bank of Canada’s Macklem joined the global central bank chorus and noted inflation pressures were likely to be temporary, even if they’ve been more persistent than previously expected. Meanwhile over in Europe, lower inflation expectations helped yields move lower, with those on 10yr bunds (-0.3bps), OATs (-1.1bps) and BTPs (-3.6bps) all moving back. Overnight in Asia, all markets are trading in the green with the Nikkei (+2.16%) leading the way, along with CSI (+1.34%), Shanghai Composite (+0.60%), KOSPI (+0.22%) and Hang Seng (+0.04%). Chinese markets reopened after a week-long holiday so the focus will again be back on property market debt, and today the PBOC injected just 10bn Yuan with its 7-day reverse repos, resulting in a net liquidity withdrawal of 330bn Yuan. That comes as the services and composite PMIs did see a pickup from August level, with the services PMI up to 53.4 (vs. 49.2 expected), moving back above the 50 mark that separates expansion from contraction. In Japan however, household spending was down -3.0% year-on-year in August (vs. -1.2% expected) which came amidst a surge in the virus there. There’s also some news on the ESG front, with finance minister Shunichi Suzuki saying that the country would introduce ESG factors when considering the finance ministry’s foreign reserves. Looking forward, S&P 500 futures (+0.06%) are pointing to a small move higher. In Germany, as talks got underway today on a potential traffic-light coalition, it was reported by DPA that CDU leader Armin Laschet had signalled his willingness to stand down, with the report citing unidentified participants from internal discussions. In televised remarks last night, Laschet said that his party needs fresh voices across the board and that new leadership will be in place soon. This moves comes as Germany’s Social Democratic Party held talks with the Greens and the Free Democratic Party to enact a new three-way ruling coalition, which would leave the CDU out of power entirely. There wasn’t a massive amount of data yesterday, though German industrial production fell by -4.0% in August (vs. -0.5% expected), which follows the much weaker than expected data on factory orders the previous day. Elsewhere, the Manheim used car index increased +5.3% in September, its first positive reading in 4 months. Our US economics team points out that there tends to be around a two month lag between wholesale prices and CPI prints, so we aren’t likely to see this impact next week’s CPI print but it will likely prevent a bigger fall towards the end of the year. To the day ahead now, and the highlight will be the aforementioned September jobs report from the US. Central bank speakers include ECB President Lagarde and the ECB’s Panetta. Tyler Durden Fri, 10/08/2021 - 07:50.....»»

Category: smallbizSource: nytOct 8th, 2021

How the baby boomer generation is the real problem, according to 21 millennials

21 millennials told Insider why baby boomers are responsible for the many problems millennials now face. These millennials tell us about the problems they now face because of baby boomers. Business Insider Deutschland Millennials are accused by some of being whiny, narcissistic, and too politically passive. A number of them suggest, however, that the real problem isn't them; it's baby boomers. 21 millennials told Insider why baby boomers are responsible for many problems millennials now face. See more stories on Insider's business page. Whiny, self-obsessed, not politically engaged enough - the accusations directed at millennials by older generations seem endless.Millennials, or anyone born between 1980 and 2000, often get painted as pampered do-gooders with a naive worldview, whose priorities extend only to getting sabbaticals and being allowed to work from home.That said, decades of disregard for the climate, unfair policies and structures being implemented between the generations, and questionable ideas concerning success in the workplace have left 18 to 38-year-olds with a heavy weight to bear.Twenty-one young people from Germany told Insider of the problems the baby boomers have created and perpetuated in Germany and how they can be solved:'Let's stop talking about what's gone wrong.' Felix Finkbeiner, 20, environmental activist. Flickr / Plant for the Planet We're hurtling towards the edge of a cliff at full pelt - it isn't for the sake of science that we're trying to figure out the quantity by which sea levels are set to rise; it's about survival.Together, with more than 67,000 other children and young people from our Plant for the Planet initiative, I've committed myself to combat the climate crisis. And yes, perhaps the older generation is listening to us but are they doing enough?The climate crisis is the greatest challenge of our time. The CO2 clock is ticking. What must we do and what can we do right now? Well, we can massively reduce our CO2 emissions. And we can plant 1,000 billion trees to absorb a quarter of man-made CO2. I'd say to the older generations, to company bosses, and to politicians: "Let's stop talking about what's gone wrong or what's going wrong - let's plant trees together and save our future."'It's older people who get to call the shots on pensions - yet they no longer have to cough up.' Sarna Röser, 30, chairwoman of Junger Unternehmer (Young Entrepreneurs). BJU Most baby boomers will be retiring soon, which will put considerable pressure on our pension system. There's a massive disparity between the number of working people and the increasing number of pensioners for whom those working people are footing the bill.I think a simple and logical solution would be if everyone had to work for a period of time during their later years. And retirement should be linked to life expectancy. I'm skeptical about who decides what's what when it comes to pensions. You only find older people sitting on the Pensions Commission, who no longer foot the bill themselves. We younger people have to hand out payments but aren't given a say.'The biggest problem the baby boomers have left us isn't that they haven't grown out of their crap.' Kevin Kühnert, 28, national chairman of the youth organisation of the Social Democratic Party of Germany, Jusos. Getty Images The biggest problem the baby boomers have dumped on us isn't that they haven't grown out of their crappy habits: it's the state they've in which they've left the future of our pension system. Pay-as-you-go financing, which has been successfully practiced for decades, will come under increasing pressure as more baby boomers leave the workforce and begin receiving benefits from the pension fund. This news comes as no surprise but politics has, so far, failed to make provisions for that day, when it comes.Fewer contributors and more beneficiaries mean great challenges will be posed for the statutory pension for a good 15 years. How these challenges will be managed isn't just a technical question. In fact, some are taking the opportunity - through scandalous inaction - to slowly chip away at the principle of solidarity when it comes to pensions and to privatize them. If all employees became contributors, we could increase contributions slightly and, if necessary, avoid shying away from tax subsidies.'We've inherited the baby boomers' workaholic attitude and taken it to the next level. Stefanie Laufs, 31, senior communications consultant at a PR agency. Stefanie Laufs The notion that Generation Y has no interest in professional success and thinks of the home office as synonymous with doing nothing is certainly not new - and unfortunately, it's firmly rooted in the minds of many among the older generation. I actually believe we've inherited their workaholic attitude - always better, always more, always higher - and that we've taken what the baby boomers did and pushed it much further.Whether among friends, colleagues, or in reports in the media - no other generation linked with topics such as burnout or partly unpaid overtime as often as ours. The demands on our generation when it comes to starting a career are enormous. You're expected to have five years of professional experience after completing your studies as well as to nearly have finished your Ph.D. Of course, you can't solely blame the baby boomers, but they've always stressed the importance of establishing a career and reinforced that it was the key to a successful and happy life. Although we've taken on this attitude, we'd actually do a lot better to leave it behind. Generation Y continues to work a lot, but having a private life is much more important than money: leisure and downtime shouldn't be overlooked.Our generation is on its way to achieving the ideal work-leisure balance and to putting the baby boomers' workaholic madness to rest.'Too much emphasis on progress and performance is a key problem we've inherited from the older generation.' Jonathan Sierck, 24, author of the book 'Junge Überflieger'. Jonathan Sierck A serious problem we've inherited from the older generation is this fixation on progress and performance. In our tireless efforts to push boundaries, whatever the cost, there's usually little room to address the often serious consequences. There's no doubt about it: constant growth and development do pay off and, as a species, we have to take certain risks every now and then in order to move forward and survive. But pushing boundaries mustn't become the objective itself nor must it come at the cost that it currently does.In order to steer us into a desirable future, we need those in decision-making positions to be sharp. They need both the courage to change yet the informed judgment to pick up on warning signs too. To ensure we don't continue to deplete our resources, we need a clear plan that takes into consideration the effects of our actions. Otherwise, we'll leave our future generations with more - possibly even more serious - problems than those we have inherited, whether they be nuclear waste, the bees dying off, or climate disasters.'Our education systems barely differ to those of the previous generation - and neither has the emphasis on grades and targets in the world of work, unfortunately.' Magdalena Rogl, 33, head of digital channels Microsoft Germany. Magdalena Rogl I'm firm on the notion that we owe much to those who came before us. Especially the generation born in 1968, who revolutionized so much and helped break down so many structures.But one area in which far too little has happened in recent decades is education. Our education systems have barely changed from those of the previous generation - and neither has the emphasis on grades and targets in the world of work, unfortunately.At the age of 10, our children are still "sorted" into schools - not based on their individual talents, but purely according to their grades. Applicants are still assessed according to their qualifications on paper far too often, and not by what they actually know. And academic degrees are still worth more than emotional education.I still remember the look of horror on the faces of my first boyfriend and his parents when I announced I was leaving high school as soon as I legally could, to follow my heart and become a childcare worker.But I think I learned more life lessons through doing so than I could have ever done at university.And that's exactly what our generation so urgently needs: lessons in life. More and more tasks are being taken over by machines and artificial intelligence. The skills Generation Y needs in professional life today are not obedience, authority, and academic knowledge, but empathy, flexibility, and problem-solving.Our generation must adapt quickly to new circumstances, because the job you did yesterday may look quite different tomorrow. And the office is no longer about sitting at a desk from nine until five; it's about working at a time and place that maximizes one's quality of work, based on the individual.That's why I'm committed to ensuring our future generations get better human and digital education, so they make our world more human and each individual person can be as he or she is - and thus achieve their own best performance.'Those who monopolize most of the power are, on average, much too old.' Daniel Krauss, 35, cofounder and chief information officer of Flixbus. Flixbus Today's prosperity is probably the greatest legacy of the previous generation. We should definitely be grateful for it. But it's not as though it's being passed down to younger generations without its drawbacks. The downside is that his focus on prosperity means few provisions have been made for the future and we haven't adapted to our current challenges.Those who monopolize most of the power are still, on average, far too old. Our generation is still trapped in a gilded cage. At some point, young Germans are going to escape that cage and find that the country is no longer at the top of the list of industrial nations.This power needs to be handed over to the younger generation at an early stage. We're ready to take on the responsibility and start restructuring things.'The older generation knows little about what constitutes a healthy and balanced diet.' Jörg Mayer and Nadine Horn, both in their early thirties, are vegan bloggers on 'Eat this'. Eat This The abundance in food and convenience have featured heavily in the kitchens of the post-war generation. Where meat had previously featured rarely on the dining table, it was almost a compulsory, everyday part of meals in the 1950s. But it had to be simple, fast, and cheap.It's becoming increasingly clear that this kind of practice can't go on indefinitely for future generations.Due to this abundance and a lack of true appreciation for food, some among the older generation have little idea about what constitutes a healthy, balanced diet. What's more, over the years a lot of marketing-driven pseudo-sciences - which, simply put, is often wrong and sometimes even dangerous - have persisted.Questions like: "Where do vegans get protein from if they don't eat meat?" or the myth that milk consumption is good for the bones (when the opposite is true) are still firmly anchored in their minds and will only be shifted with a lot of effort.We try to set a good example and show that vegan life is anything but boring, that we don't just live off salad or tofu - that the kitchen can be a place to have fun. We're trying to show that cooking with friends, either alone or in pairs, is not another tedious chore; it's the best thing you can do.'Politicians must take us and our ideas seriously.' Ria Schröder, 26, chairman of Jungen Liberalen (the Young Liberals). Business Insider Deutschland The baby boomers, our parents and theirs, have been instrumental in ensuring we grew up with high living standards. I'm grateful for that but we've also inherited a few problems, one of them being the pension situation. Like many in my generation, I don't assume I'll be provided for in old age. The level of baby boomers being paid for by us is ever increasing while there are fewer of us to foot the bill. It's great that people are living longer but the subsidy for the pension system is already the largest item in the German budget.At the same time, less and less is being invested in the future: for example, in education, and in infrastructure. My generation is outnumbered. But those who focus only on large voter groups are putting the future of our country at risk in favor of short-term electoral success. Politicians must take us and our ideas seriously. Ultimately it will help not only one generation but the whole country.'We know humanity has power over the Earth's biophysical systems, thanks to our predecessors.' Sina Leipold, 32, junior professor of social transformation and circular economy at the University of Freiburg. Sina Leipold For some time, we've known humanity affects and has control over the Earth's biophysical systems more than any other force of nature - knowledge we've attained only thanks to our predecessors. It is both a blessing and a curse for our generation.Never before have so many people been able to inhabit our planet and never before have commodities like regular holiday flights been so easy and readily affordable.At the same time, hurricanes, floods, and heatwaves have threatened to destroy (and, in many cases, have destroyed) the lives and homes of millions.My personal goal, through a more responsible approach than previous generations, is to help our generation ensure this power sticks around long term, instead of putting it at risk by inviting irreversible climate disasters.'Older generations aren't prepared to take risks.' Christopher Obereder, 26, startup founder. David Visnjic Setting up a business in Germany is far too complex; it should be more straightforward. Other countries are well ahead and we should be moving on as soon as possible. The tax system in Germany is also massively outdated and makes it extremely difficult for those looking to get started with a business.Start-ups could be much better supported with tax reforms so the start-ups could focus more on taking care of their business. Singapore has attracted startups from all over the world with its simple control system and has become the hub of the crypto scene. Our political structures are also too slow to change and aren't able to keep up with innovation. Things have to change on this front.A survey by U.S. News showed Germany was in first place in the "Entrepreneurship" category, ahead of Japan and the USA. It's clear Germany is at the forefront despite the clear room for improvement.Work has also changed: people used to stay in the same job their whole life, which is why it used to be feasible to work without constantly developing and learning. Today we seem to switch jobs every year or two. I think it has a lot to do with the Internet.We always need to be ready to learn new things and take risks. And many opportunities and possibilities arise with the Internet if you're open to it - cryptocurrencies are something I'm currently heavily involved in and open to, and I realize older generations aren't.There's a conflict simply because older generations always advocate stability and safety over risk-taking, which they aren't prepared to do. I can only speak for myself but if I'd never taken risks, I'd never have learned. We have to learn through trial and error that you can't make money from anything and everything. Failure has become a valid part of working life, even if older generations still don't want to admit it.But older generations are starting to accept the start-up scene for what it is: it's fast-moving, involves risk-taking, and isn't always lucrative.'The older generation has left European peace in a fragile state.' Lisa Badum, 34, Green Party parliament representative. Lisa Badum The rapid rise in greenhouse gases, the dramatically worsening climate crisis, the question of nuclear waste disposal, the irreversible death of countless plant and animal species - these are just some of the many consequences of failed climate and environmental policies from previous generations. Because they haven't relied on sustainability, they've dumped the consequences of and responsibility for their actions onto future generations. We're now having to face a mammoth challenge together: to keep global warming below two degrees to give future generations the chance to make mistakes.As for Europe, our younger generation has inherited the task of establishing European peace, a project which the older generation has left in a sorry state. The continually rising rate of youth unemployment within the EU, austerity policies, Brexit - all of these things have greatly weakened the notion of the "European community" and reinforced right-wing nationalist and populist forces in Europe. I myself have close ties with Greece, and over the years I've witnessed the destructive effects of austerity there, and have also seen growing disillusionment towards the EU. We have to stop this in its tracks and do it now because lasting peace between us all is the most basic of prerequisites for taking on the many challenges ahead and finding solutions for tomorrow.Where justice and gender equality are concerned, the older generation has set us on a path of clear progress, particularly as regards legal equality between the sexes. While we have to defend this success, we also have to continue fighting for 100% equality between men and women, whether in family and work, pay or pension, and the end of sexual violence towards women and girls.'Digitisation is largely a generational issue.' Barbara Engels, 30, economist at the Institute of German Economics Cologne (IW). IW Cologne Being digital means being online, networking, being open to new business models - and being young. It seems to be a largely generational issue: older people are less likely to be online than younger people, which is a pity because digitization opens up many new possibilities, especially for people who are aging. It can simplify and enrich everyday life. I hope people of all ages will greet digitization with open arms and optimism, but obviously not without a healthy dose of skepticism. Networking is at the heart of the digital world and could contribute to a better level of understanding between young and old. And it would help us learn much more from older people and vice versa.'Pension plans are a big disappointment.' Kristine Lütke, 35, president of WirtschaftsjuniorDeutschland (the Junior Chamber Germany). Wirtschaftsjunioren Deutschland The subsequent drop in birth rate as a result of the rise of the contraceptive pill among the baby boomers is exacerbating demographic change. This has resulted in a shortage of specialists and labor in all areas of the economy. We young entrepreneurs and managers in particular are suffering from this as employers. Moreover, our country's pension plans are a huge disappointment for our generation and an attack on intergenerational justice, particularly in view of demographic changes. The question of billions of funding for the "maternal pension" that's been proposed in Germany remains open.What can be done to increase employment rates and to mitigate the consequences of demographic change, as well as the pensions package? We need to look at options for flexible retirement. The statutory retirement age should be done away with. And working time law needs to be fundamentally reformed.'Climate change presents us with challenges that will dictate the opportunities of future generations.' Lukas Köhler, 31, Free Democratic Party Member of Parliament. Lukas Köhler We've inherited a lot of problems to do with CO2 in the atmosphere. Climate change today presents us with a task - and how we manage this task will directly determine the opportunities available for future generations. That's why I'm fully committed to limiting climate change as much as possible. We will only succeed with a market-based climate policy in which politicians set clear targets for reducing emissions. Other bans and regulations are unnecessary and provide false incentives. If we succeed in building a global emissions trading scheme with ambitious goals, which is as broad as possible for all economic sectors, I'm convinced we can limit global warming to an acceptable level.'We've been left with a society that revolves around profit rather than sustainability.' Sonja Oberbeckmann, 36, environmental microbiologist at the Leibniz Institute for Baltic Sea Research. Sonja Oberbeckmann We have much to thank the previous generations for: no generation has grown up as carefree and with as many possibilities as ours. However, it's come at a price: we've been left with a society that revolves around profit rather than sustainability, where material prosperity counts more than individual happiness.My professional field, science, is set up for the short term: there are many temporary contracts, focusing on trendy topics. But this profit-focused society has left its mark everywhere. The environment is riddled with pesticides, exhaust gases, plastics, and much more. People are stressed and it seems they would sooner pop pills than demand the time to live more healthily. Hardly anyone stops to breathe.We, all generations together, can define new goals and break out of this established cycle, that's exploiting human and environmental resources. Instead of sitting passively in front of the television and getting worked up about company bosses, we should all be taking responsibility and consuming both more sustainably and consciously. And we should be asking ourselves from time to time what actually makes us truly happy.'We're still teaching as though we're in the 19th century.' Nina Toller, Private Teacher. Business Insider Deutschland Living in the 21st century, teaching 19th-century style: this is what seems to be at the core of our schooling.I've tried myself to fend this off with learning methods that combine critical thinking and communication with creativity and teamwork, as well as the use of digital media. My students shouldn't just be learning content and facts; they should be learning how to obtain new facts, how to share work effectively and efficiently, and how best to absorb and apply what they've learned. In this way, they develop openness, a willingness to learn, and also a certain degree of independence. The teacher becomes more of a companion for learning and a moderator.My school is open to digital media and supports me in my creative work. I almost always use QR codes or get foreign-language authors, into the classroom via Skype.Yet, due to a lack of technical support, training, time, and security, few teachers can organize something like this on their own initiative. On my page "Toller Unterricht" I publish lots of my ideas as well as tried and tested lesson plans, with materials included.Politicians have made promises to digitize schools. In addition to the lack of qualifications teachers have, there also seems to be a lack of equipment. I'm glad my school has some projectors and smartboards I can use for my lessons, but some don't even have Internet access.Data protection is currently being taken to ridiculous extremes: new data protection regulation makes the use of private computers difficult, so some are being advised to use paper and pen. This won't work within the frame of a digitization strategy for Germany in 2018.Therefore, comprehensive reform is needed. Only then can we equip all our students with the skills to prepare them for life and learning in the 21st century.'It's as if the parents think schools are responsible for raising children.' Franziska Hafer, 23, teacher. Franziska Hafer The older generation has paid far too little attention to sustainable development. Sustainable development means empowering children to form their own opinions and encouraging them to act sustainably. Sustainable development means the current generation is developing, not compromising the next generation, but actively considering it. Children haven't been sensitized to this at all.I think there's a very different tone in schools now. I get the sense that kids are becoming less and less respectful. Manners are disappearing and, unfortunately, you rarely see a boy holding the door open for a girl. It's as if parents think schools are responsible for bringing children up.Some children are only interested in who has the latest, highest-end mobile. The children who do not have a say in this are outside the picture - and I think that the generation above us is responsible for instilling different values.'We've inherited a toxic political style from the generation before us.' Max Lucks, 21, spokesman for Grünen Jugend (Green Youth). Max Lucks We've not inherited generational conflicts; we've inherited a toxic political style from the generation before us, which has dealt little with political change or shaping the future and has been more focused on how everything can remain as is. One only has to look at how Merkel's government dealt with a climate crisis and how it's always been ignored and fought against by one commission or another. This political style has disappointed our generation and rightly so: it's clear to young people that a little isn't enough to answer the hard questions. For example, how can we still find well-paid and permanent jobs in 20 years' time in spite of digitalization?'The older ranks of conservative politicians are afraid of change.' Akilnathan Logeswaren, 29, European Activist. Business Insider Deutschland As an activist for a united Europe, I'm always reminded of how much of the older ranks of conservative politicians fear change. While young people are almost unanimous in their commitment to a united Europe, the older generation is still resistant to it, although though the United States of Europe has been on the agenda of previous German political figures such as Franz Josef Strauss himself.While old politicians are practicing against the left by remaining on the right, today's young people are already focusing more on the spirit of the European Parliament, namely by looking for solutions.In the 21st century, it is no longer about just having ideas, but about collaborating for a shared future. For example, the campaign #FreeInterrail - a free Interrail ticket for all Europeans as soon as they turn 18 - was devised by the youth for the youth. Ideas like these will secure our peace and cohesion in the long term.Read the original article on Business Insider.....»»

Category: topSource: businessinsiderOct 4th, 2021

Telecom Stock Roundup: Corning Boosts Fiber Production, Telefonica Inks Deal & More

While Corning (GLW) will invest $150 million in its Catawba County facility in North Carolina to augment fiber production for AT&T, Telefonica (TEF) will migrate most of its database systems to Oracle. Over the past five trading days, U.S. telecom stocks have witnessed a roller-coaster ride, punctuated by the uncertainty regarding the final passage of the $1.2 trillion infrastructure bill by the House and a transatlantic pledge to strengthen semiconductor supply chains to tackle chip shortage. Although Democratic Speaker Nancy Pelosi has scheduled the bill for a vote today, it appears to be still stuck in a potential stalemate, as several progressive Democrats want the bill to be tied to the larger $3.5 trillion budget reconciliation bill that is facing massive backlash from both Republicans and Democrats. Despite interventions by President Biden to broker a compromise with the dissident groups, the bill appears poised on a tender balance to pass through the House. The infusion of federal funds to improve broadband infrastructure for greater access and deeper penetration in the underserved domestic markets could have worked wonders for the beleaguered industry and helped to bridge the digital divide. However, the uncertainty over the much sought-after infrastructure bill that focuses on affordability and low-cost service option has hard hit the industry. While the policy paralysis has crippled operations, an FCC-mandate to ‘rip and replace’ telecommunications equipment manufactured by China-based firms like Huawei and ZTE has affected the sustainability of rural telecom firms amid widespread resentment of the release of Huawei's chief financial officer Meng Wanzhou from three-year detention in Canada. The removal of the low-cost gear is likely to affect rural network service, hurt profitability and jeopardize the progress of 5G deployment when most local operators would be forced to reshuffle their existing infrastructure. Although the FCC is slated to initiate a $1.9 billion program to reimburse the carriers by seeking applications from Oct 29 through Jan 14, 2022, it is unlikely to pacify the huge number of rural telecom operators that are likely to go out of office.Meanwhile, senior cabinet officials from both the United States and the European Union have come together to coordinate transatlantic ties to better address supply chain headwinds for chip shortage and take a pro-active and unified approach against foreign adversaries. With the launch of the U.S.-EU Trade and Technology Council, the continents aim to strengthen the regional technology ecosystem by pledging to cooperate on export controls for sensitive dual-use technologies and on the development of AI. Although this appeared to be a positive signal for the industry, unless the tangible effects percolate within the system, it is unlikely to reap significant benefits.     Regarding company-specific news, partnership, strategic agreements, portfolio enhancements, and 5G deals primarily took the center stage over the past five trading days.Recap of the Week’s Most Important Stories1.     Corning Incorporated GLW has extended its long-term partnership with AT&T Inc. T by committing to invest $150 million in its Catawba County facility in North Carolina to augment fiber production. In addition to generating about 200 jobs initially to boost regional economic development, the investment is likely to help AT&T increase its fiber footprint across the country and scale up its broadband network connectivity.A surge in demand for broadband connectivity has led to a wide proliferation of fiber infrastructure throughout the country and carriers like AT&T are aiming to significantly increase their fiber coverage to gain a greater pie in the market. An integrated fiber expansion strategy is expected to improve AT&T’s broadband connectivity for both enterprise and consumer markets, while steady 5G deployments are likely to boost end-user experience. The carrier intends to achieve this objective by leveraging its long-term business association with Corning spanning over three decades and gain a competitive edge in the fiber industry, which is probably in the early stages of a major growth cycle.      2.     To better utilize the benefits of 5G and edge computing facilities in core network functions, Telefónica, S.A. TEF recently inked a multi-year agreement with cloud-service provider Oracle Corporation to migrate most of its database systems to the cloud. The deal is the second of its kind this month with Telefonica forging an agreement with IBM to develop its first-ever Unica Next cloud-based 5G core network platform using IBM intelligent automation software and services.Per the Oracle deal, the Spain-based carrier will transfer all its internal and commercial operations data, including business intelligence services and billing, revenues, and customer management products to the cloud-based platform in tune with the evolving business conditions. It will be operated by Oracle in Telefonica’s datacenters to comply with European data laws. Moreover, this is likely to safeguard data security issues while keeping operating costs down as Telefonica has a debt-laden balance sheet.3.     Verizon Communications Inc. VZ has upgraded some of the features of its subsidiary BlueJeans that offers an interoperable cloud-based video conferencing service across a wide range of devices and conferencing platforms. The move is aimed to facilitate a seamless transition to a hybrid workplace with a spontaneous and engaging interactive digital platform as the work-from-home option continues to gain traction.Such technological innovations are likely to provide flexibility to remote workers and unlock workplace productivity and happiness. By creating a virtual space that simulates a real-life office environment where distributed teams can collate together to brainstorm, organize and socialize, BlueJeans aims to address a major hurdle in today’s hybrid work reality.4.   Nokia Corporation NOK has partnered with Slovenia-based telecommunications company — Telekom Slovenije — to power the latter’s fiber-to-the-home (FTTH) network with the deployment of avant-garde broadband equipment. Per the agreement, Telekom Slovenije will also capitalize on the Quillion chipset-powered Nokia ISAM FX series. The ISAM FX series involve high-capacity access nodes that have been specifically designed to deliver ultra-broadband services rapidly and cost-effectively. The deployment, which is scheduled to commence this year, will bring 10Gb/s fiber to Slovenia. Currently, the FTTH network caters to more than half of Slovenian households. The 10Gb/s fiber installation will enable these households to benefit from high-speed broadband connections.  5.    Ericsson ERIC has inked a 10-year 5G partnership deal with Digital Nasional Berhad (“DNB”) to deliver a nationwide 5G network in Malaysia. DNB is helping Malaysia to achieve its digital goals as outlined in the government’s MyDIGITAL blueprint, which plans to transform Malaysia into a digitally-driven, high-income country.DNB’s partnership with Ericsson covers the latter’s Radio System products and solutions, including Spectrum Sharing, cloud-native 5G Core, and 5G Radio Access Network. The Sweden-based telecom gear maker will supply its Managed Services offering, Ericsson Operations Engine. It will also provide operational support systems and business support systems solutions.Price PerformanceThe following table shows the price movement of some of the major telecom stocks over the past week and six months.Image Source: Zacks Investment ResearchIn the past five trading days, Juniper has been the best performer with its stock gaining 2.1% while Bandwidth has declined the most with its stock falling 12.7%.Over the past six months, Motorola has been the best performer with its stock appreciating 20.2% while Bandwidth has declined the most with its stock falling 44.3%.Over the past six months, the Zacks Telecommunications Services industry has gained 4.4% and the S&P 500 has rallied 10.5%.Image Source: Zacks Investment ResearchWhat’s Next in the Telecom Space?In addition to 5G deployments and product launches, all eyes will remain glued to how the administration implements key policy changes to safeguard the interests of the industry and address the bottlenecks to spur growth. Zacks’ Top Picks to Cash in on Artificial Intelligence This world-changing technology is projected to generate $100s of billions by 2025. From self-driving cars to consumer data analysis, people are relying on machines more than we ever have before. Now is the time to capitalize on the 4th Industrial Revolution. Zacks’ urgent special report reveals 6 AI picks investors need to know about today.See 6 Artificial Intelligence Stocks With Extreme Upside Potential>>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report AT&T Inc. (T): Get Free Report Ericsson (ERIC): Get Free Report Verizon Communications Inc. (VZ): Get Free Report Nokia Corporation (NOK): Get Free Report Telefonica SA (TEF): Get Free Report Corning Incorporated (GLW): Get Free Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksSep 30th, 2021

Futures Slide Alongside Cryptocurrencies Amid China Crackdown

Futures Slide Alongside Cryptocurrencies Amid China Crackdown US futures and European stocks fell amid ongoing nerves over the Evergrande default, while cryptocurrency-linked stocks tumbled after the Chinese central bank said such transactions are illegal. Sovereign bond yields fluctuated after an earlier selloff fueled by the prospect of tighter monetary policy. At 745am ET, S&P 500 e-minis were down 19.5 points, or 0.43%, Nasdaq 100 e-minis were down 88.75 points, or 0.58% and Dow e-minis were down 112 points, or 0.33%. In the biggest overnight news, Evergrande offshore creditors remain in limbo and still haven't received their coupon payment effectively starting the 30-day grace period, while also in China, the State Planner issued a notice on the crackdown of cryptocurrency mining, will strictly prohibit financing for new crypto mining projects and strengthen energy consumption controls of new crypto mining projects. Subsequently, the PBoC issued a notice to further prevent and dispose of the risks from speculating on cryptocurrencies, to strengthen monitoring of risks from crypto trading and such activities are illegal. The news sent the crypto space tumbling as much as 8% while cryptocurrency-exposed stocks slumped in U.S. premarket trading. Marathon Digital (MARA) drops 6.5%, Bit Digital (BTBT) declines 4.7%, Riot Blockchain (RIOT) -5.9%, Coinbase -2.8%. Big banks including JPMorgan, Citigroup, Morgan Stanley and Bank of America Corp slipped about 0.5%, while oil majors Exxon Mobil and Chevron Corp were down 0.4% and 0.3%, respectively, in premarket trading.Mega-cap FAAMG tech giants fell between 0.5% and 0.6%. Nike shed 4.6% after the sportswear maker cut its fiscal 2022 sales expectations and warned of delays during the holiday shopping season. Several analysts lowered their price targets on the maker of sports apparel and sneakers after the company cut its FY revenue growth guidance to mid-single- digits. Here are some of the biggest U.S. movers today: Helbiz (HLBZ) falls 10% after the micromobility company filed with the SEC for the sale of as many as 11m shares by stockholders. Focus Universal (FCUV), an online marketing company that’s been a favorite of retail traders, surged 26% in premarket trading after the stock was cited on Stocktwits in recent days. Vail Resorts (MTN) falls 2.7% in postmarket trading after its full-year forecasts for Ebitda and net income missed at the midpoint. GlycoMimetics (GLYC) jumps 15% postmarket after announcing that efficacy and safety data from a Phase 1/2 study of uproleselan in patients with acute myeloid leukemia were published in the journal Blood on Sept. 16. VTV Therapeutics (VTVT) surges 30% after company says its HPP737 psoriasis treatment showed favorable safety and tolerability profile in a multiple ascending dose study. Fears about a sooner-than-expected tapering amid signs of stalling U.S. economic growth and concerns over a spillover from China Evergrande’s default had rattled investors in September, putting the benchmark S&P 500 index on course to snap a seven-month winning streak. Elaine Stokes, a portfolio manager at Loomis Sayles & Co., told Bloomberg Television, adding that “what they did is tell us that they feel really good about the economy.” While the bond selloff vindicated Treasury bears who argue yields are too low to reflect fundamentals, others see limits to how high they can go. “We’d expected bond yields to go higher, given the macro situation where growth is still very strong,” Sylvia Sheng, global multi-asset strategist with JPMorgan Asset Management, said on Bloomberg Television. “But we do stress that is a modest view, because we think that upside to yields is still limited from here given that central banks including the Fed are still buying bonds.” Still, Wall Street’s main indexes rallied in the past two session and are set for small weekly gains. European equities dipped at the open but trade off worst levels, with the Euro Stoxx 50 sliding as much as 1.1% before climbing off the lows. France's CAC underperformed at the margin. Retail, financial services are the weakest performers. EQT AB, Europe’s biggest listed private equity firm, fell as much as 8.1% after Sweden’s financial watchdog opened an investigation into suspected market abuse. Here are some of the other biggest European movers today: SMCP shares surge as much as 9.9%, advancing for a 9th session in 10, amid continued hopes the financial troubles of its top shareholder will ultimately lead to a sale TeamViewer climbs much as 4.2% after Bankhaus Metzler initiated coverage with a buy rating, citing the company’s above-market growth AstraZeneca gains as much as 3.6% after its Lynparza drug met the primary endpoint in a prostate cancer trial Darktrace drops as much as 9.2%, paring the stock’s rally over the past few weeks, as a technical pattern triggered a sell signal Adidas and Puma fall as much as 4% and 2.9%, respectively, after U.S. rival Nike’s “large cut” to FY sales guidance, which Jefferies said would “likely hurt” shares of European peers Earlier in the session, Asian stocks rose for a second day, led by rallies in Japan and Taiwan, following U.S. peers higher amid optimism over the Federal Reserve’s bullish economic outlook and fading concerns over widespread contagion from Evergrande. Stocks were muted in China and Hong Kong. India’s S&P BSE Sensex topped the 60,000 level for the first time on Friday on optimism that speedier vaccinations will improve demand for businesses in Asia’s third-largest economy. The MSCI Asia Pacific Index gained as much as 0.7%, with TSMC and Sony the biggest boosts. That trimmed the regional benchmark’s loss for the week to about 1%. Japan’s Nikkei 225 climbed 2.1%, reopening after a holiday, pushing its advance for September to 7.7%, the best among major global gauges. The Asian regional benchmark pared its gain as Hong Kong stocks fell sharply in late afternoon trading amid continued uncertainty, with Evergrande giving no sign of making an interest payment that was due Thursday. Among key upcoming events is the leadership election for Japan’s ruling party next week, which will likely determine the country’s next prime minister. “Investor concerns over the Evergrande issue have retreated a bit for now,” said Hajime Sakai, chief fund manager at Mito Securities Co. in Tokyo. “But investors will have to keep downside risk in the corner of their minds.” Indian stocks rose, pushing the Sensex above 60,000 for the first time ever. Key gauges fell in Singapore, Malaysia and Australia, while the Thai market was closed for a holiday. Treasuries are higher as U.S. trading day begins after rebounding from weekly lows reached during Asia session, adding to Thursday’s losses. The 10-year yield was down 1bp at ~1.42%, just above the 100-DMA breached on Thursday for the first time in three months; it climbed to 1.449% during Asia session, highest since July 6, and remains 5.2bp higher on the week, its fifth straight weekly increase. Several Fed speakers are slated, first since Wednesday’s FOMC commentary set forth a possible taper timeline.  Bunds and gilts recover off cheapest levels, curves bear steepening. USTs bull steepen, richening 1.5bps from the 10y point out. Peripheral spreads are wider. BTP spreads widen 2-3bps to Bunds. In FX, the Bloomberg Dollar Spot Index climbed back from a one-week low as concern about possible contagion from Evergrande added to buying of the greenback based on the Federal Reserve tapering timeline signaled on Wednesday. NZD, AUD and CAD sit at the bottom of the G-10 scoreboard. ZAR and TRY are the weakest in EM FX. The pound fell after its rally on Thursday as investors looked ahead to BOE Governor Andrew Bailey’s sPeech next week about a possible interest-rate hike. Traders are betting that in a contest to raise borrowing costs first, the Bank of England will be the runaway winner over the Federal Reserve. The New Zealand and Aussie dollars led declines among Group-of-10 peers. The euro was trading flat, with a week full of events failing “to generate any clear directional move,” said ING analysts Francesco Pesole and Chris Turner. German IFO sentiment indeces will “provide extra indications about the area’s sentiment as  businesses faced a combination of delta variant concerns and lingering supply disruptions”. The Norwegian krone is the best performing currency among G10 peers this week, with Thursday’s announcement from the Norges Bank offering support In commodities, crude futures hold a narrow range up around best levels for the week. WTI stalls near $73.40, Brent near $77.50. Spot gold extends Asia’s gains, adding $12 on the session to trade near $1,755/oz. Base metals are mixed, LME nickel and aluminum drop ~1%, LME tin outperforms with a 2.8% rally. Bitcoin dips after the PBOC says all crypto-related transactions are illegal. Looking to the day ahead now, we’ll hear from Fed Chair Powell, Vice Chair Clarida and the Fed’s Mester, Bowman, George and Bostic, as well as the ECB’s Lane and Elderson, and the BoE’s Tenreyro. Finally, a summit of the Quad Leaders will be held at the White House, including President Biden, and the Prime Ministers of Australia, India and Japan. Market Snapshot S&P 500 futures down 0.3% to 4,423.50 STOXX Europe 600 down 0.7% to 464.18 German 10Y yield fell 8.5 bps to -0.236% Euro little changed at $1.1737 MXAP up 0.4% to 201.25 MXAPJ down 0.5% to 643.20 Nikkei up 2.1% to 30,248.81 Topix up 2.3% to 2,090.75 Hang Seng Index down 1.3% to 24,192.16 Shanghai Composite down 0.8% to 3,613.07 Sensex up 0.2% to 60,031.83 Australia S&P/ASX 200 down 0.4% to 7,342.60 Kospi little changed at 3,125.24 Brent Futures up 0.4% to $77.57/bbl Gold spot up 0.7% to $1,755.38 U.S. Dollar Index little changed at 93.14 Top Overnight News from Bloomberg China Evergrande Group’s unusual silence about a dollar-bond interest payment that was due Thursday has put a focus on what might happen during a 30-day grace period. The Reserve Bank of Australia’s inflation target is increasingly out of step with international counterparts and fails to account for structural changes in the country’s economy over the past 30 years, Westpac Banking Corp.’s Bill Evans said. With central banks from Washington to London this week signaling more alarm over faster inflation, the ultra-stimulative path of the euro zone and some of its neighbors appears lonelier than ever. China’s central bank continued to pump liquidity into the financial system on Friday as policy makers sought to avoid contagion stemming from China Evergrande Group spreading to domestic markets. A more detailed look at global markets courtesy of Newsquawk Asian equity markets traded mixed with the region failing to fully sustain the impetus from the positive performance across global counterparts after the silence from Evergrande and lack of coupon payments for its offshore bonds, stirred uncertainty for the company. ASX 200 (-0.4%) was negative as underperformance in mining names and real estate overshadowed the advances in tech and resilience in financials from the higher yield environment. Nikkei 225 (+2.1%) was the biggest gainer overnight as it played catch up to the prior day’s recovery on return from the Autumnal Equinox holiday in Japan and with exporters cheering the recent risk-conducive currency flows, while KOSPI (-0.1%) was lacklustre amid the record daily COVID-19 infections and after North Korea deemed that it was premature to declare that the Korean War was over. Hang Seng (-1.2%) and Shanghai Comp. (-0.8%) were indecisive after further liquidity efforts by the PBoC were offset by concerns surrounding Evergrande after the Co. failed to make coupon payments due yesterday for offshore bonds but has a 30-day grace period with the Co. remaining quiet on the issue. Finally, 10yr JGBs were lower on spillover selling from global counterparts including the declines in T-notes as the US 10yr yield breached 1.40% for the first time since early-July with the pressure in bonds also stemming from across the Atlantic following a more hawkish BoE, while the presence of the BoJ in the market today for over JPY 1.3tln of government bonds with 1yr-10yr maturities did very little to spur prices. Top Asian News Rivals for Prime Minister Battle on Social Media: Japan Election Asian Stocks Rise for Second Day, Led by Gains in Japan, Taiwan Hong Kong Stocks Still Wagged by Evergrande Tail Hong Kong’s Hang Seng Tech Index Extends Decline to More Than 2% European equities (Stoxx 600 -0.9%) are trading on the back foot in the final trading session of the week amid further advances in global bond yields and a mixed APAC handover. Overnight, saw gains for the Nikkei 225 of 2.1% with the index aided by favourable currency flows, whilst Chinese markets lagged (Shanghai Comp. -0.8%, Hang Seng -1.6%) with further liquidity efforts by the PBoC offset by concerns surrounding Evergrande after the Co. failed to make coupon payments due yesterday for offshore bonds. As context, despite the losses in Europe today, the Stoxx 600 is still higher by some 1.2% on the week. Stateside, futures are also on a softer footing with the ES down by 0.4% ahead of a busy Fed speaker schedule. Back to Europe, sectors are lower across the board with Retail and Personal & Household Goods lagging peers. The former has been hampered by losses in Adidas (-3.0%) following after hours earnings from Nike (-4.2% pre-market) which saw the Co. cut its revenue guidance amid supply chain woes. AstraZeneca (+2.1%) sits at the top of the FTSE 100 after announcing that the Lynparza PROpel trial met its primary endpoint. Daimler’s (+0.1%) Mercedes-Benz has announced that it will take a 33% stake in a battery cell manufacturing JV with Total and Stellantis. EQT (-6.5%) sits at the foot of the Stoxx 600 after the Swedish FSA announced it will open an investigation into the Co. Top European News EQT Investigated by Sweden’s FSA Over Suspected Market Abuse Gazprom Says Claims of Gas Under-supply to Europe Are ‘Absurd’ German Sept. Ifo Business Confidence 98.8; Est. 99 German Business Index at Five-Month Low in Pre-Election Verdict In FX, the rot seems to have stopped for the Buck in terms of its sharp and marked fall from grace amidst post-FOMC reflection and re-positioning in the financial markets on Thursday. Indeed, the Dollar index has regained some poise to hover above the 93.000 level having recoiled from 93.526 to 92.977 over the course of yesterday’s hectic session that saw the DXY register a marginal new w-t-d high and low at either end of the spectrum. Pre-weekend short covering and consolidation may be giving the Greenback a lift, while the risk backdrop is also less upbeat ahead of a raft of Fed speakers flanking US new home sales data. Elsewhere, the Euro remains relatively sidelined and contained against the Buck with little independent inspiration from the latest German Ifo survey as the business climate deteriorated broadly in line with consensus and current conditions were worse than forecast, but business expectations were better than anticipated. Hence, Eur/Usd is still stuck in a rut and only briefly/fractionally outside 1.1750-00 parameters for the entire week, thus far, as hefty option expiry interest continues to keep the headline pair in check. However, there is significantly less support or gravitational pull at the round number today compared to Thursday as ‘only’ 1.3 bn rolls off vs 4.1 bn, and any upside breach could be capped by 1.1 bn between 1.1765-85. CAD/NZD/AUD - Some payback for the non-US Dollars following their revival, with the Loonie waning from 1.2650+ peaks ahead of Canadian budget balances, though still underpinned by crude as WTI hovers around Usd 73.50/brl and not far from decent option expiries (from 1.2655-50 and 1.2625-30 in 1.4 bn each). Similarly, the Kiwi has faded after climbing to within single digits of 0.7100 in wake of NZ trade data overnight revealing a much wider deficit as exports slowed and imports rose, while the Aussie loses grip of the 0.7300 handle and skirts 1.1 bn option expiries at 0.7275. CHF/GBP/JPY - The Franc is fairly flat and restrained following a dovish SNB policy review that left in lagging somewhat yesterday, with Usd/Chf and Eur/Chf straddling 0.9250 and 1.0850 respectively, in contrast to Sterling that is paring some hawkish BoE momentum, as Cable retreats to retest bids circa 1.3700 and Eur/Gbp bounces from sub-0.8550. Elsewhere, the Yen has not been able to fend off further downside through 110.00 even though Japanese participants have returned to the fray after the Autumn Equinox holiday and reports suggest some COVID-19 restrictions may be lifted in 13 prefectures on a trial basis. SCANDI/EM/PM/CRYPTO - A slight change in the pecking order in Scandi-land as the Nok loses some post-Norges Bank hike impetus and the Sek unwinds a bit of its underperformance, but EM currencies are bearing the brunt of the aforementioned downturn in risk sentiment and firmer Usd, with the Zar hit harder than other as Gold is clings to Usd 1750/oz and Try down to deeper post-CBRT rate cut lows after mixed manufacturing sentiment and cap u readings. Meanwhile, Bitcoin is being shackled by the latest Chinese crackdown on mining and efforts to limit risks from what it describes as unlawful speculative crypto currency trading. In commodities, WTI and Brent are set the conclude the week in the green with gains in excess of 2% for WTI at the time of writing; in-spite of the pressure seen in the complex on Monday and the first-half of Tuesday, where a sub USD 69.50/bbl low was printed. Fresh newsflow has, once again, been limited for the complex and continues to focus on the gas situation. More broadly, no update as of yet on the Evergrande interest payment and by all accounts we appear to have entered the 30-day grace period for this and, assuming catalysts remain slim, updates on this will may well dictate the state-of-play. Schedule wise, the session ahead eyes significant amounts of central bank commentary but from a crude perspective the weekly Baker Hughes rig count will draw attention. On the weather front, Storm Sam has been upgraded to a Hurricane and is expected to rapidly intensify but currently remains someway into the mid-Atlantic. Moving to metals, LME copper is pivoting the unchanged mark after a mixed APAC lead while attention is on Glencore’s CSA copper mine, which it has received an offer for; the site in 2020 produced circa. 46k/T of copper which is typically exported to Asia smelters. Elsewhere, spot gold and silver are firmer but have been very contained and remain well-within overnight ranges thus far. Which sees the yellow metal holding just above the USD 1750/oz mark after a brief foray below the level after the US-close. US Event Calendar 10am: Aug. New Home Sales MoM, est. 1.0%, prior 1.0% 10am: Aug. New Home Sales, est. 715,000, prior 708,000 Central Bank Speakers 8:45am: Fed’s Mester Discusses the Economic Outlook 10am: Powell, Clarida and Bowman Host Fed Listens Event 10:05am: Fed’s George Discusses Economic Outlook 12pm: Fed’s Bostic Discusses Equitable Community Development DB's Jim Reid concludes the overnight wrap WFH today is a bonus as it’s time for the annual ritual at home where the latest, sleekest, shiniest iPhone model arrives in the post and i sheepishly try to justify to my wife when I get home why I need an incremental upgrade. This year to save me from the Spanish Inquisition I’m going to intercept the courier and keep quiet. Problem is that such speed at intercepting the delivery will be logistically challenging as I remain on crutches (5 weeks to go) and can’t grip properly with my left hand due to an ongoing trapped nerve. I’m very glad I’m not a racehorse. Although hopefully I can be put out to pasture in front of the Ryder Cup this weekend. The big news of the last 24 hours has been a galloping global yield rise worthy of the finest thoroughbred. A hawkish Fed meeting, with the dots increasing and the end of QE potentially accelerated, didn’t quite have the ability to move markets but the global dam finally broke yesterday with Norway being the highest profile developed country to raise rates this cycle (expected), but more importantly a Bank of England meeting that saw the market reappraise rate hikes. Looking at the specific moves, yields on 10yr Treasuries were up +13.0bps to 1.430% in their biggest daily increase since 25 February, as both higher real rates (+7.9bps) and inflation breakevens (+4.9bps) drove the advance. US 10yr yields had been trading in a c.10bp range for the last month before breaking out higher, though they have been trending higher since dropping as far as 1.17% back in early-August. US 30yr yields rose +13.2bps, which was the biggest one day move in long dated yields since March 17 2020, which was at the onset of the pandemic and just days after the Fed announced it would be starting the current round of QE. The large selloff in US bonds saw the yield curve steepen and the long-end give back roughly half of the FOMC flattening from the day before. The 5y30y curve steepened 3.4bps for a two day move of -3.3bps. However the 2y10y curve steepened +10.5bps, completely reversing the prior day’s flattening (-4.2bps) and leaving the spread at 116bp, the steepest level since first week of July. 10yr gilt yields saw nearly as strong a move (+10.8bps) with those on shorter-dated 2yr gilts (+10.7bps) hitting their highest level (0.386%) since the pandemic began.That came on the back of the BoE’s latest policy decision, which pointed in a hawkish direction, building on the comment in the August statement that “some modest tightening of monetary policy over the forecast period is likely to be necessary” by saying that “some developments during the intervening period appear to have strengthened that case”. The statement pointed out that the rise in gas prices since August represented an upside risks to their inflation projections from next April, and the MPC’s vote also saw 2 members (up from 1 in August) vote to dial back QE. See DB’s Sanjay Raja’s revised rate hike forecasts here. We now expect a 15bps hike in February. The generalised move saw yields in other European countries rise as well, with those on 10yr bunds (+6.6bps), OATs (+6.5bps) and BTPs (+5.7bps) all seeing big moves higher with 10yr bunds seeing their biggest climb since late-February and back to early-July levels as -0.258%. The yield rise didn’t stop equity indices recovering further from Monday’s rout, with the S&P 500 up +1.21% as the index marked its best performance in over 2 months, and its best 2-day performance since May. Despite the mood at the end of the weekend, the S&P now starts Friday in positive territory for the week. The rally yesterday was led by cyclicals for a second straight day with higher commodity prices driving outsized gains for energy (+3.41%) and materials (+1.39%) stocks, and the aforementioned higher yields causing banks (+3.37%) and diversified financials (+2.35%) to outperform. The reopening trade was the other main beneficiary as airlines rose +2.99% and consumer services, which include hotel and cruiseline companies, gained +1.92%. In Europe, the STOXX 600 (+0.93%) witnessed a similarly strong performance, with index led by banks (+2.16%). As a testament to the breadth of yesterday’s rally, the travel and leisure sector (+0.04%) was the worst performing sector on this side of the Atlantic even while registering a small gain and lagging its US counterparts. Before we get onto some of yesterday’s other events, it’s worth noting that this is actually the last EMR before the German election on Sunday, which has long been signposted as one of the more interesting macro events on the 2021 calendar, the results of which will play a key role in not just domestic, but also EU policy. And with Chancellor Merkel stepping down after four terms in office, this means that the country will soon be under new management irrespective of who forms a government afterwards. It’s been a volatile campaign in many respects, with Chancellor Merkel’s CDU/CSU, the Greens and the centre-left SPD all having been in the lead at various points over the last six months. But for the last month Politico’s Poll of Polls has shown the SPD consistently ahead, with their tracker currently putting them on 25%, ahead of the CDU/CSU on 22% and the Greens on 16%. However the latest poll from Forschungsgruppe Wahlen yesterday suggested a tighter race with the SPD at 25, the CDU/CSU at 23% and the Greens at 16.5%. If the actual results are in line with the recent averages, it would certainly mark a sea change in German politics, as it would be the first time that the SPD have won the popular vote since the 2002 election. Furthermore, it would be the CDU/CSU’s worst ever result, and mark the first time in post-war Germany that the two main parties have failed to win a majority of the vote between them, which mirrors the erosion of the traditional big parties in the rest of continental Europe. For the Greens, 15% would be their best ever score, and exceed the 9% they got back in 2017 that left them in 6th place, but it would also be a disappointment relative to their high hopes back in the spring, when they were briefly polling in the mid-20s after Annalena Baerbock was selected as their Chancellor candidate. In terms of when to expect results, the polls close at 17:00 London time, with initial exit polls released immediately afterwards. However, unlike the UK, where a new majority government can immediately come to power the day after the election, the use of proportional representation in Germany means that it could potentially be weeks or months before a new government is formed. Indeed, after the last election in September 2017, it wasn’t until March 2018 that the new grand coalition between the CDU/CSU and the SPD took office, after attempts to reach a “Jamaica” coalition between the CDU/CSU, the FDP and the Greens was unsuccessful. In the meantime, the existing government will act as a caretaker administration. On the policy implications, it will of course depend on what sort of government is actually formed, but our research colleagues in Frankfurt have produced a comprehensive slidepack (link here) running through what the different parties want across a range of policies, and what the likely coalitions would mean for Germany. They also put out another note yesterday (link here) where they point out that there’s still much to play for, with the SPD’s lead inside the margin of error and with an unusually high share of yet undecided voters. Moving on to Asia and markets are mostly higher with the Nikkei (+2.04%), CSI (+0.53%) and India’s Nifty (+0.52%) up while the Hang Seng (-0.03%), Shanghai Comp (-0.07%) and Kospi (-0.10%) have all made small moves lower. Meanwhile, the Evergrande group missed its dollar bond coupon payment yesterday and so far there has been no communication from the group on this. They have a 30-day grace period to make the payment before any event of default can be declared. This follows instructions from China’s Financial regulators yesterday in which they urged the group to take all measures possible to avoid a near-term default on dollar bonds while focusing on completing unfinished properties and repaying individual investors. Yields on Australia and New Zealand’s 10y sovereign bonds are up +14.5bps and +11.3bps respectively this morning after yesterday’s move from their western counterparts. Yields on 10y USTs are also up a further +1.1bps to 1.443%. Elsewhere, futures on the S&P 500 are up +0.04% while those on the Stoxx 50 are down -0.10%. In terms of overnight data, Japan’s August CPI printed at -0.4% yoy (vs. -0.3% yoy expected) while core was unchanged in line with expectations. We also received Japan’s flash PMIs with the services reading at 47.4 (vs. 42.9 last month) while the manufacturing reading came in at 51.2 (vs. 52.7 last month). In pandemic related news, Jiji reported that Japan is planning to conduct trials of easing Covid restrictions, with 13 prefectures indicating they’d like to participate. This is likely contributing to the outperformance of the Nikkei this morning. Back to yesterday now, and one of the main highlights came from the flash PMIs, which showed a continued deceleration in growth momentum across Europe and the US, and also underwhelmed relative to expectations. Running through the headline numbers, the Euro Area composite PMI fell to 56.1 (vs. 58.5 expected), which is the lowest figure since April, as both the manufacturing (58.7 vs 60.3 expected) and services (56.3 vs. 58.5 expected) came in beneath expectations. Over in the US, the composite PMI fell to 54.5 in its 4th consecutive decline, as the index hit its lowest level in a year, while the UK’s composite PMI at 54.1 (vs. 54.6 expected) was the lowest since February when the country was still in a nationwide lockdown. Risk assets seemed unperturbed by the readings, and commodities actually took another leg higher as they rebounded from their losses at the start of the week. The Bloomberg Commodity Spot index rose +1.12% as Brent crude oil (+1.39%) closed at $77.25/bbl, which marked its highest closing level since late 2018, while WTI (+1.07%) rose to $73.30/bbl, so still a bit beneath its recent peak in July. However that is a decent rebound of roughly $11/bbl since its recent low just over a month ago. Elsewhere, gold (-1.44%) took a knock amidst the sharp move higher in yields, while European natural gas prices subsidised for a third day running, with futures now down -8.5% from their intraday peak on Tuesday, although they’re still up by +71.3% since the start of August. US negotiations regarding the upcoming funding bill and raising the debt ceiling are ongoing, with House Speaker Pelosi saying that the former, also called a continuing resolution, will pass “both houses by September 30,” and fund the government through the first part of the fiscal year, starting October 1. Treasury Secretary Yellen has said the US will likely breach the debt ceiling sometime in the next month if Congress does not increase the level, and because Republicans are unwilling to vote to raise the ceiling, Democrats will have to use the once-a-fiscal-year tool of budget reconciliation to do so. However Democrats, are also using that process for the $3.5 trillion dollar economic plan that makes up the bulk of the Biden agenda, and have not been able to get full party support yet. During a joint press conference with Speaker Pelosi, Senate Majority Leader Schumer said that Democrats have a “framework” to pay for the Biden Economic agenda, which would imply that the broad outline of a deal was reached between the House, Senate and the White House. However, no specifics were mentioned yesterday. With Democrats looking to vote on the bipartisan infrastructure bill early next week, negotiations today and this weekend on the potential reconciliation package will be vital. Looking at yesterday’s other data, the weekly initial jobless claims from the US for the week through September 18 unexpectedly rose to 351k (vs. 320k expected), which is the second week running they’ve come in above expectations. Separately, the Chicago Fed’s national activity index fell to 0.29 in August (vs. 0.50 expected), and the Kansas City Fed’s manufacturing activity index also fell more than expected to 22 in September (vs. 25 expected). To the day ahead now, and data highlights include the Ifo’s business climate indicator from Germany for September, along with Italian consumer confidence for September and US new home sales for August. From central banks, we’ll hear from Fed Chair Powell, Vice Chair Clarida and the Fed’s Mester, Bowman, George and Bostic, as well as the ECB’s Lane and Elderson, and the BoE’s Tenreyro. Finally, a summit of the Quad Leaders will be held at the White House, including President Biden, and the Prime Ministers of Australia, India and Japan. Tyler Durden Fri, 09/24/2021 - 08:12.....»»

Category: blogSource: zerohedgeSep 24th, 2021

By The Numbers, A Failing President

By The Numbers, A Failing President Authored by Pat Buchanan, If the left believed that draping the Capitol riot of Jan. 6, 2021, around the neck of former President Donald Trump and the party that refused to repudiate him would sink the GOP, it appears to have miscalculated. For, as the left painted the Capitol riot as an “armed insurrection,” “domestic terrorism,” “attempted coup,” and political atrocity that stands beside Pearl Harbor and 9/11 as “a day that will live in infamy,” Republicans were displacing the Democrats as America’s first party. Democrats began 2021 as the preferred party of 49% of the country. Only 40% identified as Republicans. When 2022 began, the standings had been reversed. Forty-two percent of Americans identified as Democrats, and 47% as Republicans, a turnaround of 14 points. While President Joe Biden began 2021 with an approval rating in the mid-50s, he ended the year with an approval rating in the low 40s. One national poll showed Biden’s approval rating sinking to 33%. On Wednesday, a Politico/Morning Consult survey came out that showed that 37% of Americans awarded Biden a grade of “F” for his first year, with another 12% giving him a “D.” School kids with grades like that risk being held back a year or expelled. On his handling of the issues of immigration and restoring national unity, 40% of Americans flunked Biden. On the economy, 38% gave him an “F.” Also, in that Politico survey, 68% of respondents said America is on the “wrong track,” more than twice the number who believe she is heading in the “right direction.” In this same survey, Biden’s overall approval stands at 40%. What is the message that the totality of these numbers conveys? Democrat and media obsession with Jan. 6, their vast exaggeration of what happened, and the campaign to indict the GOP as a mortal threat to “American democracy” has failed as a strategy. And Biden’s presidency is seen by the people he leads as a failing presidency. If the election of 2022 were held next Tuesday, Democrats would be swept from power in both houses of Congress, and a Republican Congress would face a lame-duck President Joe Biden for the next two years. And it is hard to see any deus ex machina waiting in the wings to prevent what is coming: gridlocked U.S. government from 2023 to 2025. Indeed, when one considers the political situation one year after Biden’s inauguration and 10 months before the 2022 elections, how Biden turns things around for himself, his presidency and his party is not easy to see. The foremost issue in the public mind is the economy, inflation in particular. The consumer price index has been surging at 7%. But for the Federal Reserve to put on the brakes to control inflation could mean a major hit in the stock market, which was robust in Biden’s first year. If Biden is fighting stagflation by the fourth quarter of calendar year 2022 — as Jimmy Carter was in 1980 — Democratic candidates will be avoiding him the way Stacey Abrams shunned him on his visit to Atlanta. A second issue on which Biden is racking up failing grades in the public’s mind is immigration, which means the southern border across which some 2 million illegal immigrants from more than 100 countries poured in 2021. Biden has conceded that he has no chance of dealing with the crisis legislatively because of GOP opposition in Congress. And his unhappy progressive allies would not permit Biden to employ the means necessary to halt the invasion of the country whose borders he has sworn to protect and defend. Another issue gaining traction is the explosion of flash mob robberies and shootings and killings in Democratic-run cities, coupled with the perception that progressives are soft on criminals and tough on cops. Saturday, a week ago, Michelle Alyssa Go, a 40-year-old New Yorker, was shoved to her death in front of a subway train at Times Square station by a “homeless” person. Atrocities like this are now almost daily fare, and the stories and video are moving public opinion back to the law-and-order attitudes that worked so well for the Republican Party in the Richard Nixon and Ronald Reagan eras. As for the coronavirus, the Biden administration neither anticipated nor prepared for the delta and omicron variants. And no one knows where we will be next November — hopefully, in a better place. As of now, Biden is a drag on the Democratic Party at the national level, and very probably in the off-year election in November. What began his slide in public approval last August was a foreign policy debacle, the perception of a bungled withdrawal from Afghanistan. And how Biden handles the Ukraine crisis ginned up by Russian President Vladimir Putin may come to be seen as a reflection of his mastery of foreign policy, or his ineptitude. Ukraine could be determinant in history’s judgment of Biden’s presidency. Tyler Durden Fri, 01/21/2022 - 16:20.....»»

Category: blogSource: zerohedgeJan 21st, 2022

People Want Business Leaders to ‘Break the Cycle of Distrust’ and Address Societal Issues, According to New Report

After another year marred by the COVID-19 pandemic and rapid spread of disinformation, a new report reveals that business leaders could be key to breaking out of “a vicious cycle of distrust fueled by government and media.” The Trust Barometer, a study published annually by global communications firm Edelman, unveiled its findings on Tuesday after… After another year marred by the COVID-19 pandemic and rapid spread of disinformation, a new report reveals that business leaders could be key to breaking out of “a vicious cycle of distrust fueled by government and media.” The Trust Barometer, a study published annually by global communications firm Edelman, unveiled its findings on Tuesday after conducting more than 36,000 online surveys in 28 countries between Nov. 1 and Nov. 24, 2021. The firm found that public trust eroded even further in the past year among world governments and the media—largely due to mishandling of the pandemic, lack of progress on climate change and increased partisanship among media organizations. Yet, as companies develop vaccines and find cleaner energy sources, the report highlighted an increased desire for the private sector to play a larger role in addressing societal challenges, despite growing concerns about its commitment to social equity and workplace practices. [time-brightcove not-tgx=”true”] “Business must now be the stabilizing force delivering tangible action and results on society’s most critical issues,” CEO Richard Edelman said in a press release. “Societal leadership is now a core function of business.” Edelman The 2022 Edelman Trust Barometer found that trust in government and media globally declined in the last year. According to Edelman, every stakeholder group surveyed expects business to help “fill the void” on issues such as climate change, economic inequality, workforce reskilling and racial injustice. U.S. climate envoy John Kerry has already called on the private sector to help find solutions to climate change, in large part by funding the trillions needed for a global clean energy transition, and companies like Unilever and Alphabet have set goals to reduce their environmental footprints. These are positive signs, the report suggests, as trust in business was found to be higher than all other institutions. In an essay published alongside the report, Edelman explained that business leaders should continue taking active policy stances and serve as models of long-term thinking for other institutions. Nearly 60% of the survey’s respondents also said they buy brands based on values, and nearly two-thirds of investors look to back businesses aligned with their values. However, the study found that the public considers non-governmental organizations (NGOs) to be the most ethical institutions, while businesses were found to be the most competent. Meanwhile, Edelman wrote that government and media have entered a “distrust spiral” and are considered by the public to be neither ethical nor competent. Just under two years ago, prior to the start of the pandemic in 2020, the same survey found government to be the most trusted institution, at a time when the world sought leadership to stop the spread of the virus. A failure to do so, Edelman wrote, combined with “a stark partisan divide” in the news media has contributed to a rapidly decreasing level of trust among the public. Read More: With the State of the World in the Hands of Big Business, Some Executives Think It Can Pay to Do Good “The media business model has become dependent on generating partisan outrage, while the political model has become dependent on exploiting it,” he said. “Whatever short-term benefits either institution derives, it is a long-term catastrophe for society.” Now, as governments bear those consequences, many are already predicting that outcome. Only 4 in 10 respondents say government can execute and achieve results, and the survey also found that people in every democracy studied believe they will be worse off financially in five years. In addition, Edelman says class divides became more apparent with this year’s survey: people with higher incomes were found to have slightly increased trust in public institutions, while trust among those with lower incomes either plateaued or plummeted, which Edelman attributes to the lack of job opportunities due to automation and inadequate working conditions for those holding frontline jobs. Overall, the study concludes that business must fill the void left by government and deliver tangible actions while helping restore trust to all societal institutions, even though many private enterprises were not designed to fill this role. “As business steps up, we need to move from outrage to optimism, fears to confidence, insinuation to fact,” Edelman wrote......»»

Category: topSource: timeJan 21st, 2022

The Brain Drain That Is Killing America’s Economy

Each spring I get antsy WhatsApp messages from friends across the U.S., as well as London, Dubai, Hong Kong, and Singapore. Their high school senior kids have just been admitted to colleges in America, Canada, Britain, and elsewhere, and they want my opinion on the best option. Over the past decade I’ve been tracking these… Each spring I get antsy WhatsApp messages from friends across the U.S., as well as London, Dubai, Hong Kong, and Singapore. Their high school senior kids have just been admitted to colleges in America, Canada, Britain, and elsewhere, and they want my opinion on the best option. Over the past decade I’ve been tracking these late teens’ decisions and the trend has been unmistakeable: Less America, more Canada. Canadian education is as good as America’s and more affordable. Universities such as Waterloo have blended apprenticeships into their curricula as a requirement for graduation, and McGill has established itself as a global innovation hub. The next beneficiary of America’s reputational fall from grace is Europe, especially universities in England, Scotland, and Ireland. The Netherlands is also very much in vogue as many countries switch to English instruction. [time-brightcove not-tgx=”true”] Global teen talent choosing non-American higher education—and some of America’s best and brightest doing the same— couldn’t come at a worse time. The country’s demographics have been deteriorating since before the 2008 financial crisis, with economic insecurity leading to a sharp drop-off in fertility. The “baby bust” that followed the financial crisis implied that America would have fewer 18-year olds entering college by 2026—and thus many colleges would have to shutter. But thanks to COVID-19, that reckoning has come much sooner. Not only have dozens of colleges closed since 2008 (particularly across the South), but poor finances and unpreparedness for the pandemic remote shift have led to double-digit declines in applicant numbers across the collegiate heartland from the Northeast to the Mid-Atlantic through the Midwest. College enrollment is plummeting as never before across all categories, from community colleges to private four-year universities. The recession has forced many youth to choose between education and employment, with many choosing the latter, leaving educators uncertain as to whether they will ever go to college. Now, the COVID-19 “baby bust” is far more severe than even that of the 2008 financial crisis, meaning even under a roaring economic rebound scenario, many more colleges will go belly up by 2038. Demographic forecasting is a generational exercise, and America’s shrinking youth base is the result not only of lower fertility and rising economic uncertainty, but also because the country has failed to maintain what used to be a huge edge in attracting young talent from around the world. America launched the “War on Terror” over twenty years ago, invading Afghanistan and soon after Iraq. Even as President Obama sought to rebuild America’s prestige, the annual inflow of Chinese and Indian students began to taper and decline during the latter years of his administration. Then came Donald Trump’s visa bans, border walls, and immigration restrictions. Taken together, as the startling data from the latest Census reveals, American immigration has plummeted to an all-time low of only 0.1% between mid-2020 and mid-2021, which amounts to barely 200,000 new migrants. At this rate, America’s population may well soon decline. Even with sanity restored to the White House, America’s reputation remains at a nadir. More than half the world’s population is under the age of forty. From Colombia to Morocco to Afghanistan, they’ve grown up watching America flail militarily and disgrace itself politically. From 9/11 to the war on terror, the financial crisis and rising inequality, all have diminished America in the eyes of the younger generation. Today’s most important battleground is people, not places. There is a global war for young talent to recruit young students, professionals, taxpayers, caregivers, entrepreneurs, investors, and others to ensure healthy demographics, tax base, industry, and innovation. But the young people America needs are a slippery target. Since the 2008 financial crisis, the number of American expats has doubled, many of them young professionals seeking opportunity across fast growing economies from Eastern Europe to the Far East. Now comes the remote revolution. COVID-19 has been a “great reset” in our lifestyles, workplace habits, and other aspects of social and professional life. It will be for global talent migration as well. According to research firm IDC, more than forty percent of the global workforce—at least 1.5 billion people—is “location independent.” The capacity for remote work has graduated from latent to actual. Professionals are moving as never before, both within and across borders—and this is only the immediate mid-pandemic phase. Now imagine the pace of relocation once borders have actually reopened and corporate culture fully adapts to digital platforms. At the moment, asynchronous collaboration is Google Docs and Slack, but soon enough it will be more Github and Metaverse. Many people are quitting their jobs due to burn-out but promising that their next job will be remote. According to the Y-combinator funded Hacker News, the number of job posts featuring remote work have quadrupled since 2017. American tech companies have been the most progressive in embracing remote work. That alone will drive many to seize the moment to relocate abroad. But they’ve also said they plan to hire the best people anywhere for each new position. Suddenly the Bay Area coder may be competing with talent in Kenya. As Simon Kuper wryly warned in the Financial Times, “If you can do your job from anywhere, then someone anywhere can do your job.” Even though the Biden administration is encouraging companies to “buy American” or “hire American,” their DNA guides them to constantly arbitrage the world for taxes, technology and talent. A friend from a major tech company recently flew to Portugal to recruit Europeans and Americans who have planted roots there and corral them into a new co-working space. From Tulum, Mexico, to Athens, Greece, to Phuket, Thailand, entire colonies have sprung up catering to mobile youth in search of sunny, low-tax hubs. Digital nomads are geographically mercenary, using websites like Expatistan and nomad-themed message boards to calculate where to find the best balance between cost of living and quality of life. And those websites are steering them towards Berlin, Prague, Tbilisi, and Bali—not New York and Los Angeles. And according to VanHack, one of the largest platforms of digital nomads in the software industry, Canada, Britain, Germany, the Netherlands, Ireland, and Spain all rank ahead of the U.S. as top destinations for relocating among the more 600,000 developers surveyed. Americans are making Europe great again. A generational shift has occurred that Boomers and even older Gen-X don’t quite grasp: Today’s young professionals don’t identify themselves by their nationality—they identify as talent. Millennial and Gen-Z are content with portfolio careers and working abnormal hours, even for less pay, in exchange for less work and more time for travel and passion projects. Business degrees are a particularly powerful agent of mobility. For all intents and purposes, an MBA is a passport. The world’s eight hundred business schools spread across fifty countries are perhaps the leading agents in stirring the pot in the global war for talent. They recruit worldwide for students and compete fiercely to feed their graduates into multinationals, which then circulate them around the world. Corporate executives may no longer control where employees want to be, but still determine who gets to rise to the top. Executives cluster near headquarters, and human resource departments are starting to emphasize longitude to avoid the inefficiencies of asynchronous coordination. For the same reason, venture capital funds will often have board members in two out of the three—America, Europe, or Asia—but rarely all three. The end-state for global companies might resemble the “Twenty hubs but no HQ” model business guru CK Prahalad prophesied nearly two decades ago. Dozens of countries want to be those hubs. Smart governments are rolling out the red carpet for this new global nomadic class. Before Covid, almost no nation had special “nomad visas” save for Estonia. Now almost 70 countries do. Dubai’s Golden Visa program has attracted hundreds of young entrepreneurs who are given grants and other perks to innovate the country’s AI and drone programs. Sweden and Singapore have “tech pass” programs that actively give grants to start-ups. More broadly, many governments have adopted more clearly tiered migration systems, ladders that residents climb on the pathway from migrant and stakeholder to resident and citizen. America is history’s greatest winner in the war for talent, but the competition is heating up. A decade ago, the U.S. still took in as many migrants as the rest of the rich world combined. But as of 2019, according to a recent CATO Institute study, that gap had narrowed to zero—and that was before COVID-19 travel restrictions. Continued suspicions over Chinese espionage have turned off many Chinese students and scholars. Universities are losing billions of dollars in tuition, property owners are losing tenants, and the cottage industry of language tutors and professional coaches have far fewer clients to assimilate into American life. As Stanford professor and Nobel laureate Steven Chu put it, “We’re shooting ourselves not in the foot but in something close to the head.” Until foreign students are guaranteed a green card with their degree, talented foreign youth may take their brains elsewhere. Don’t be surprised if many of them move over the border and work remotely instead. After all, Canada appears to be the new home of the American Dream. Canada’s points-based immigration policy is luring young people from around the world with the promise of a pathway to citizenship. Even better, the vast majority of new jobs created are full-time rather than just temp work. Meanwhile, only ten percent of America’s immigration application forms are available online. For the cash-rich Asians who represent the majority of global millennials and Gen-Z, Europe is even closer than North America. The U.K. capitalized on Trump’s odious image, admitting a record number of foreign students in 2020. Aging Europe has few children and needs to fill its classrooms with foreigners. Across Europe’s IT sector one finds Indian software engineers and data scientists with degrees from Manchester or Amsterdam, and they’re snapping up EU blue cards instead of American green cards. The Biden Administration has its work cut out for it to attract the world’s best and brightest to America in anything like the numbers it used to. It has managed to let Trump’s H1-B visa restrictions expire, and plans to allow spouses of H1-B holders to work, a boost for would-be two-income households. But immigration reform remains an epic mess, held up by Congressional inaction on the Build Back Better Act whose provisions include a massive overhaul of green card processing that would immediately affect nearly one million current foreign workers. If those workers leave, there won’t be enough skilled Americans to take their place. We need to forecast scenarios for the future distribution of talent from the perspective of Gen-Y and Gen-Z. Hundreds of millions of young people are becoming geography-free. But where they physically go matters. America’s national debt has exploded (100 percent of GDP and climbing), and young workers and taxpayers are needed to power a real recovery beyond today’s artificial stimulus. An aging country with a declining population and crumbling infrastructure isn’t fit to prevail over China, much less outlast its 1.4 billion people in the long run. Despite record-low unemployment, there are still millions of job vacancies. Even after stimulus cheques are spent and wages rise, people aren’t going to rush back into menial labor unless they have to. Furthermore, as hundreds of billions of dollars are deployed on infrastructure across the country, far more workers will be needed to get it all done in any meaningful timeframe. America will need an army of migrants to truly build back better. Demographic renewal requires vigorously competing to attract the next generation. Collecting people is collecting power. The war on terror lasted twenty years. The war for talent should be America’s main mission for the next twenty......»»

Category: topSource: timeJan 21st, 2022

Futures Slide After Disappointing JPMorgan Earnings, Tech Rout Worsens

Futures Slide After Disappointing JPMorgan Earnings, Tech Rout Worsens After trading flat for much of the overnight session, S&P futures slumped to session lows shortly after JPM reported earnings that disappointed the market (see our full write up here) and were last trading down 30 points or 0.64%, with Dow futures down 0.3% and Nasdaq futures taking on even more water as the "sell tech" trade was back with a bang. Treasury yields rose 3bps to 1.74% and the dollar reversed an overnight loss. The VIX jumped above 20 and was last seen around 21. The Nasdaq 100 fell to the lowest in almost three months yesterday as tech came under pressure after Fed Governor Lael Brainard said officials could boost rates as early as March. It looks like the selling will continue today. “Market sentiment has been shaken by concerns over the prospect of imminent Fed tightening along with record global Covid-19 infection rates, but we don’t expect either of these factors to end the equity rally,” said UBS Wealth Management CIO Mark Haefele in a note. “The fourth-quarter U.S. earnings season, which started this week, could turn investor attention back to strong fundamentals.” JPMorgan shares dropped in premarket trading after revenues and EPS beat thanks to a $1.8 billion reserve release while FICC trading revenue missed expectations even as its dealmakers posted their best quarter ever and Chief Executive Officer Jamie Dimon gave an upbeat assessment of prospects for growth. Wells Fargo advanced after reporting higher-than-estimated revenue. BlackRock Inc. became the first public asset manager to hit $10 trillion in assets, propelled by a surge in fourth-quarter flows into its exchange-traded funds. Here are some of the other notable pre-movers today: U.S.-listed casino stocks with operations in Macau rise after the announcement of much-anticipated changes to the local casino law aimed at tightening government oversight on the world’s largest gaming market. Las Vegas Sands (LVS US) +6.6%; Melco Resorts (MLCO US) +5.5%; Wynn Resorts (WYNN US) +5.6%. Apple (AAPL US) shares are up in U.S. premarket trading after Piper Sandler raises its target for the stock, saying that Apple’s set-up for 2022 is favorable. Broker adds that the tech giant’s venture into health-care and automotive markets are the next catalysts to drive the stock to a $4 trillion market cap and beyond. NextPlay Technologies (NXTP US) shares jump 19% in U.S. premarket trading after giving an update for fiscal 3Q 2022 late yesterday. Domino’s Pizza (DPZ US) is cut to equal-weight from overweight at Morgan Stanley, while Chipotle is upgraded to overweight from equal-weight amid a “mixed” view on restaurant stocks into 2022. Amicus Therapeutics (FOLD US) advanced in postmarket trading after being upgraded to outperform from market perform at SVB Leerink, which cited the potential of a treatment for Pompe disease, should it be approved. Spirit Realty dropped 4% postmarket after launching a share sale via Morgan Stanley and BofA Securities. European equities traded poorly and followed the drop in Asia, with most sectors trading lower, weighed down once again by a soft tech sector. Euro Stoxx 50 is down 0.8%, most major indexes dropped over 1% before rising off the lows. Oil & gas is the best Stoxx 600 performer with crude trading well. European technology stocks as well as pandemic winners are leading declines after a U.S. selloff in tech shares resumed Thursday as Federal Reserve officials signaled their intention to combat inflation aggressively.  European chipmakers are down in early trading Friday: ASM International -3.5% at 9.17 a.m. CET, Infineon -0.9%, ASML -2.9%, STMicroelectronics -2.3%. Meanwhile, energy and automakers outperformed. Utilities were also in focus as French nuclear energy producer Electricite de France SA (EDF) plunged by a record as the French government confirmed plans to force it to sell more power at a steep discount to protect households from surging wholesale electricity prices, a move that could cost the state-controlled utility 7.7 billion euros ($8.8 billion) at Thursday’s market prices. There was some good news: a majority of strategists still see the rally in European equities continuing this year. The Stoxx Europe 600 Index will rise about 5.2% to 511 index points by the end of 2022 from Wednesday’s close, according to the average of 19 forecasts in a Bloomberg survey. Equity funds once more led inflows among asset classes in the week through Jan. 12, as investors reduced cash holdings, according to BofA and EPFR Global data. Earlier in the session, Asian stocks slid as investors offloaded technology shares on growing speculation the Federal Reserve will raise interest rates in March.  The MSCI Asia Pacific Index fell as much as 1.3% before paring losses to 0.7% in afternoon trading. Alibaba, Keyence and Sony Group were among the largest contributors to the benchmark’s slide. The Hang Seng Tech Index, which tracks China’s biggest tech firms, closed down 0.5%. Electronics makers also dragged down indexes in Japan and South Korea, with benchmarks in both nations leading the region’s drop. China’s CSI 300 Index closed at its lowest since November 2020. Asian stocks have been whipsawed this year by remarks from Fed officials as investors try to gauge the timing and scope of the anticipated interest rate hikes. The renewed weakness on Friday was triggered by comments from Fed Governor Lael Brainard, who said officials could boost rates as early as March to ensure that price pressures are brought under control. “This kind of hawkishness and a rush for rate hikes is, of course, a minus for share prices,” said Ayako Sera, a market strategist at Sumitomo Mitsui Trust Bank in Tokyo. If the Fed were to increase rates in March, “investors will want to make sure the economy remains strong despite the monetary tightening before making their move,” Sera added.  With Friday’s moves, Asia’s benchmark is set to pare its weekly gain to about 1.6%, which would still be its best weekly performance since October.    In Japan, sentiment worsened as Tokyo raised its Covid alert to the second-highest of four levels as virus cases surged. South Korea’s Kospi was also weighed down as the central bank increased its policy rate for the third time in just five months In rates, Treasuries pared declines with stock index futures under pressure as U.S. day begins. Yields beyond the 2-year reached session highs inside Thursday’s ranges amid a global government bond selloff. Treasury yields are cheaper by 3bp to 4bp across the curve with 10- year yields around 1.7274%, fading a bigger loss earlier and slightly underperforming bunds and gilts. Asia session featured speculation about tighter global monetary policy. IG dollar issuance slate empty so far and expected to remain light ahead of U.S. holiday weekend with markets closed Monday; four names priced $3.8b Thursday. In FX, the Bloomberg dollar spot is little changed around worst levels for the week, while NOK, JPY and CAD top the G-10 scoreboard. The yen advanced, and is set for its largest weekly advance in more than a year as speculation about a shift in the Bank of Japan’s policy spurred a further unwinding of dollar longs. The five-year Japanese government bond yield climbed to a six-year high. The volatility term structure in dollar-yen shifted higher Friday and inverted. The euro was little changed around $1.1460 and European sovereign bond yields rose, with the core underperforming the periphery. Norway’s krone and the Canadian dollar advanced as oil prices rose, with Brent trading above $85 per barrel, while the Australian and New Zealand dollars were the worst performers. The pound extended its longest winning streak in nearly two months as the U.K. economy surpassed its pre-pandemic size in November for the first time. Sweden’s krona inched down, shrugging off data showing that the nation’s inflation rate rose to the highest level in 28 years In commodities, crude futures rally with WTI recovering to Wednesday’s best levels near $83 and Brent putting in fresh highs near $85.40. Spot gold is little changed a brief retest of the week’s highs, trading near $1,823/oz. Base metals are mixed: LME nickel adds about 2% extending its recent surge; copper holds a narrow range in the red Looking at the day ahead now, data releases include US retail sales, industrial production and capacity utilisation for December, along with the University of Michigan’s preliminary consumer sentiment index for January and the UK’s GDP for November. Central bank speakers include ECB President Lagarde and New York Fed President Williams. Lastly, earnings releases include Citigroup, JPMorgan Chase, Wells Fargo and BlackRock. Market Snapshot S&P 500 futures up 0.3% to 4,667.00 STOXX Europe 600 down 0.5% to 483.71 MXAP down 0.8% to 195.28 MXAPJ down 0.5% to 639.13 Nikkei down 1.3% to 28,124.28 Topix down 1.4% to 1,977.66 Hang Seng Index down 0.2% to 24,383.32 Shanghai Composite down 1.0% to 3,521.26 Sensex up 0.1% to 61,320.31 Australia S&P/ASX 200 down 1.1% to 7,393.86 Kospi down 1.4% to 2,921.92 German 10Y yield little changed at -0.08% Euro up 0.1% to $1.1467 Brent Futures up 0.8% to $85.16/bbl Gold spot up 0.1% to $1,823.97 U.S. Dollar Index little changed at 94.73 Top Overnight News from Bloomberg Federal Reserve Governor Christopher Waller said that three interest-rate increases this year was a “good baseline” but there may be fewer or even as many as five moves, depending on inflation The U.K. and the European Union agreed to intensify post-Brexit negotiations over Northern Ireland, as Foreign Secretary Liz Truss led the British side for the first time in a meeting at her official country residence Germany’s economy contracted by as much as 1% in the final quarter of 2021 as the emergence of the coronavirus’s omicron strain added to drags on output from supply snarls and the fastest inflation in three decades Japan’s Government Pension Investment Fund, the world’s largest, may mull investing in Chinese government bonds if the market situation improves, GPIF President Masataka Miyazono says at a press conference in Tokyo Ukraine said a cyberattack brought down the websites of several government agencies for hours. Authorities didn’t immediately comment on the source of the outage, which comes as tensions with Russia surge over its troop buildup near the border Russia won’t wait “endlessly” for a security deal with NATO and progress depends on the U.S., Foreign Minister Sergei Lavrov said Friday, keeping up pressure after a week of high-level talks with the West failed to yield noticeable progress Turkey’s newly appointed finance chief said the country’s inflation will peak months earlier and at a level far lower than predicted by top Wall Street banks The global pressures driving inflation higher represent a “major change in trends” and will keep price growth high for the foreseeable future, Bank of Russia Governor Elvira Nabiullina said North Korea appears to have fired two ballistic missiles into waters off its east coast-- in what could be its third rocket-volley test in less than 10 days -- hours after issuing a fresh warning to the Biden administration A more detailed look at global markets courtesy of Newsquawk Asian equity markets weakened amid headwinds from the US where all major indices declined led by losses in tech and consumer discretionary amid a slew of hawkish Fed speak, while mixed Chinese trade data added to the cautiousness in the region. ASX 200 (-1.1%) traded lower as tech and consumer stocks mirrored the underperformance of stateside peers and with nearly all industries on the back foot aside from utilities and gold miners. Nikkei 225 (-1.3%) briefly gave up the 28k level amid a firmer currency and source reports that BoJ policy makers are said to debate how soon they can begin signalling a rate hike. In terms of the notable movers, Fast Retailing was the biggest gainer after it reported a record Q1 net, followed by Seven & I Holdings which also benefitted post-earnings, while Hitachi Construction was at the other end of the spectrum after news that parent Hitachi will offload half its majority stake. KOSPI (-1.4%) eventually underperformed after the Bank of Korea hiked rates by 25bps for a third time in the current tightening cycle to 1.25%, as expected. BoK also noted that CPI is to stay in the 3% range for a while and BoK Governor Lee made it clear that rates will continue to be adjusted which has fuelled speculation of similar action at next month’s meeting. Hang Seng (-0.2%) and Shanghai Comp. (-1.0%) were also pressured with participants digesting the latest trade figures which showed weaker than expected Imports although Exports topped estimates. Nonetheless, the downside was somewhat limited amid ongoing expectations for PBoC easing to support the economy as the Fed moves closer towards a rate lift off and with some encouragement after Evergrande averted its first onshore debt default whereby bondholders approved a six-month postponement of bond redemption and coupon payments. Finally, 10yr JGBs retreated beneath the 151.00 level following the source report that suggested debate within the BoJ on how soon a rate increase can be signalled which could occur ahead of the 2% price target, while this coincided with an increase in the 5yr yield to a 6-year high and a weaker than previous 20yr JGB auction. Top Asian News Chinese Developer R&F Downgraded to Restricted Default by Fitch Macau Cuts Casino License Tenure, Caps Float as Controls Tighten Inflation Irks Asia as Japan Yields Hit Six-Year High, BOK Hikes China Builders’ Dollar Bonds Slump Further; Logan, KWG Lead The major cash equity indices in Europe remain subdued but off worst levels (Euro Stoxx 50 -0.7%; Stoxx 600 -0.6%) as the downbeat APAC mood reverberated into the region amid a slew of hawkish Fed speak, while the mixed Chinese trade data added to the concerns of a slowdown ahead of next week’s GDP metrics. Newsflow had overall been quiet during the European session ahead of the start of US earnings season, but geopolitical tensions remain hot on the radar after North Korea fired its third missile of the year (albeit landing outside Japan’s EEZ), whilst Russia closed all communication channels with the EU and exerted some time-pressure on Washington with regards to Moscow’s security demands. Back to trade, a divergence is seen between Europe and the US as the former catches up to the late accelerated sell-off on Wall Street yesterday; US equity futures have been consolidating with mild broad-based gains seen across the ES (+0.2%), YM (+0.2%), NQ (+0.2%) whilst the RTY (Unch) narrowly lags. Delving into Europe, the UK’s FTSE 100 (-0.1%) is cushioned by gains across its Oil & Gas and Financial sectors as crude oil prices and yields clamber off intraday lows, whilst the SMI (-0.3%) sees some losses countered by its heavyweight healthcare sector. Sectors in Europe are mostly in the red with a slight defensive tilt, although Oil & Gas stands as the top gainer and the only sector in the green. The downside meanwhile sees Tech following a similar sectorial underperformance seen on Wall Street and APAC overnight. In terms of individual movers, DAX-heavyweight SAP (-0.3%) conforms to the losses across tech after initially rising as a result of upgraded guidance and the announcement of a share buyback programme of up to EUR 1bln. The most notable mover of the day has been EDF (-17.5%) as the Co. withdrew guidance after noting the impact of new French price cap measures is forecast to be around EUR 8.4bln on FY22 EBITDA. Top European News EDF Slumps by Most on Record on Hit From Price Cap U.K. Economy Surpasses Pre-Pandemic Size With November Surge German Recovery Lags Rest of Europe on Supply Snarls, Inflation HSBC Markets Chief Georges Elhedery To Take Six-Month Sabbatical In FX, another lower low off a lower high does not bode well for the index and Buck more broadly, but some technicians will be encouraged by the fact that chart supports in the form of a Fib retracement and 100 DMA have only been breached briefly. Meanwhile, Friday may provide the Greenback with a prop via pre-weekend position squaring and US data could lend a hand if upbeat or better than expected at the very least. For now, the DXY is restrained between 94.887-626 confines, with the upside capped by a major trendline that falls just below 95.000 around 94.980, and the Dollar also hampered by pressure emanating outside the basket from the likes of the Yuan, crude oil and other commodities. CAD/JPY/GBP - The Loonie has reclaimed 1.2500+ status in line with a rebound in WTI towards Usd 83/brl, but still faces stiff trendline resistance vs its US counterpart at 1.2451 and probably conscious that several multi-billion option expiries roll off either side of the 1.2500 level today. Conversely, the Yen has cleared the psychological 114.00 hurdle with some fundamental impetus coming from hawkish BoJ source reports contending that policy-setters are contemplating how soon the Bank can telegraph a rate hike that is likely to be delivered prior to inflation reaching its 2% target. Elsewhere, Sterling remains elevated above 1.3700, though unable to scale 1.3750 even with tailwinds from stronger than forecast UK GDP and IP or a narrower than feared trade gap amidst ongoing political uncertainty. CHF/EUR/NZD/AUD - All narrowly divergent and contained against their US rival, with the Franc straddling 0.9100 and Euro holding within a 1.1483-51 range and immersed in hefty option expiry interest spanning 1.1395 to 1.1485 (see 7.01GMT post on the Headline Feed for details). On the flip-side, the Aussie and Kiwi have both lost a bit more momentum after probing 0.7300 and approaching 0.6900 respectively yesterday, and Aud/Usd appears to have shrugged off robust housing finance data in the run up to China’s trade balance revealing sub-consensus imports. SCANDI/EM - Firmer than anticipated Swedish CPI and CPIF metrics have not offered the Sek much support, as the stripped down core ex-energy print was in line and bang on the Riksbank’s own projection. However, the Huf has been underpinned by hot Hungarian inflation and the Cnh/Cny in wake of the aforementioned Chinese trade data showing a record surplus for December and 2021 overall. In Turkey, the Try is flattish following the latest CBRT survey that predicts a weaker year-end Lira from current levels, but above record lows and still well above target CPI, while in Russia the Rub is benefiting from Brent’s rise above Usd 85.50/brl (in keeping with the Nok) against the backdrop of geopolitical and diplomatic strains as the country’s Foreign Minister declares that all lines of communication with the EU have ended. In commodities, WTI and Brent front-month futures have been on an upward trajectory since the Wall Street close, with the former now above USD 83/bbl (vs 81.58/bbl low) and the latter north of USD 85.50/bbl (vs 83.99/bbl low) in European hours. Overall market sentiment has been a non-committal one amid a lack of fresh macro catalysts, however, geopolitical updates have been abundant: namely with Russia’s punchy rhetoric surrounding its security demand from NATO and Washington, whilst North Korea fired what is said to be ballistic missiles which landed just outside Japan’s Exclusive Economic Zone (EEZ). On the demand side of the equation, eyes remain on China’s economic and COVID situations, with the import figures indicating China's annual crude oil imports drop for the first time in 20 years, whilst the nation grounded further flights between the US due to its zero-COVID policy. On the supply side, reports suggested that China will release oil stockpiles in the run-up to the Lunar New Year (dubbed as the largest human migration). The release is part of a coordinated plan with the US and other major consumers, according to the reports, which cited sources suggesting China will likely ramp up its releases if prices top USD 85/bbl. Turning to metals, spot gold is trading sideways and prices waned after again hitting the resistance zone around USD 1,830/oz flagged earlier this week. LME copper meanwhile remains under USD 10,000/t – subdued by the sharp slowdown in Chinese imports suggesting weaker demand, albeit annual imports of copper concentrate hit a historic high in 2021. The trade data also indicated a fall in iron ore imports as a factor of the steel production curbs imposed last year to tackle pollution and high iron ore prices. US Event Calendar 8:30am: Dec. Import Price Index YoY, est. 10.8%, prior 11.7%; MoM, est. 0.2%, prior 0.7% Export Price Index YoY, est. 16.0%, prior 18.2%; MoM, est. 0.3%, prior 1.0% 8:30am: Dec. Retail Sales Advance MoM, est. -0.1%, prior 0.3% Dec. Retail Sales Ex Auto MoM, est. 0.1%, prior 0.3% Dec. Retail Sales Ex Auto and Gas, est. -0.2%, prior 0.2% Dec. Retail Sales Control Group, est. 0%, prior -0.1% 9:15am: Dec. Industrial Production MoM, est. 0.2%, prior 0.5% Capacity Utilization, est. 77.0%, prior 76.8% Manufacturing (SIC) Production, est. 0.3%, prior 0.7% 10am: Nov. Business Inventories, est. 1.3%, prior 1.2% 10am: Jan. U. of Mich. Sentiment, est. 70.0, prior 70.6; Expectations, est. 67.0, prior 68.3; Current Conditions, est. 73.8, prior 74.2 U. of Mich. 1 Yr Inflation, est. 4.8%, prior 4.8%; 5-10 Yr Inflation, prior 2.9% DB's Jim Reid concludes the overnight wrap There was no rest for markets either yesterday as the tech sell-off resumed in earnest, which came as fed funds futures moved to price in a 93% chance of a March rate hike, the highest closing probability to date. At the same time, however, the US dollar continued to weaken and has now put in its worst 3-day performance in over a year, having shed -1.25% in that time. And all this is coming just as earnings season is about to ramp up, with a number of US financials scheduled to report today ahead of an array of companies over the next few weeks. Starting with sovereign bonds, yields on 10yr Treasuries fell a further -3.9bps yesterday, their biggest decline since mid-December, to their lowest closing level in a week, at 1.704%, with most of the price action again happening during the New York afternoon. Lower inflation breakevens helped drive the decline, with the 10yr breakeven down -3.4bps after the producer price inflation data for December came in softer than expected. Indeed, the monthly gain of +0.2% (vs. +0.4% expected) was the slowest since November 2020, and in turn that left the year-on-year measure at +9.7% (vs. +9.8% expected), which is actually a modest decline from the upwardly revised +9.8% in November. As with the previous day’s CPI reading though, there was a more inflationary interpretation for those after one, as the core PPI measure came in at a monthly +0.5% as expected, leaving the year-on-year change at an above-expected +8.3% (vs. +8.0% expected). So something for everyone but no massive surprises either way. The latest inflation data came as numerous Fed speakers continued to match the recent hawkish tone, which helped strengthen investor conviction in the odds of a March hike as mentioned at the top. Philadelphia Fed President Harker said at an event that “My forecast is that we would have a 25 basis-point increase in March, barring any changes in the data”, and that he had 3 hikes pencilled in but “could be convinced of a fourth if inflation is not getting under control.” Separately, we heard from Governor Brainard, who appeared before the Senate Banking Committee as part of her nomination hearing to become Fed Vice Chair. She signalled that she would be open to a March hike as well, saying that they would be in a position to hike “as soon as asset purchases are terminated”, which they’re currently on course to do in March. Even President Evans, one of the most dovish members of Fed leadership, said a March rate hike and multiple hikes this year were a possibility. As it happens, today is the last we’ll hear from various Fed speakers for a while, as tomorrow they’ll be entering their blackout period ahead of the next FOMC announcement later in the month. Staying on the Fed, Bloomberg reported overnight that President Biden has picked three nominees for the vacant slots. They include Sarah Bloom Raskin, previously Deputy Secretary of the Treasury, who’s reportedly going to be nominated to become the Vice Chair of supervision, as well as Lisa Cook and Philip Jefferson, who’d become governors. Cook is an economics professor at Michigan State University, and Jefferson is an economics professor at Davidson College in North Carolina. All 3 would require Senate confirmation, and bear in mind those choices haven’t been officially confirmed as of yet. Over on the equity side, the main story was a further tech sell-off that sent both the NASDAQ (-2.51%) and the FANG+ index (-3.72%) lower for the first time this week, and taking the former to a 3-month low. That weakness dragged the S&P 500 (-1.5%) lower, though despite the stark headline numbers, it was only just over half of the shares in the index that were in the red on the day. Meanwhile in Europe, the STOXX 600 (-0.03%) also saw a modest decline, though the STOXX Banks (+1.10%) hit a fresh 3-year high after advancing for the 8th time in the last 9 sessions. Sovereign bond yields echoed the declines in the US too, with those on 10yr bunds (-3.1bps), OATs (-3.3bps) and BTPs (-4.6bps) all moving lower. Following that tech-driven fall overnight on Wall Street on the back of those hawkish comments, Asian stock markets are trading lower this morning. Japan's Nikkei (-1.42%) extended the previous session’s losses while briefly falling over -2%, as the Japanese Yen found a renewed bid amid the risk-off mood. Additionally, the Kospi (-1.37%) widened its losses, after the BOK lifted borrowing costs by 25bps to 1.25% amidst rising concerns about inflationary pressure. That takes the benchmark rate back to pre-pandemic levels after the central bank's 25bps rate increase in August and November last year. Meanwhile, the Korean government unveiled a supplementary budget worth 14 trillion won in size to continue providing support to the economy. Elsewhere, the Hang Seng index (-0.86%), CSI (-0.60%) and Shanghai Composite (-0.53%) have all moved lower as well. Data released in China showed that exports went up +20.9% y/y in December (vs +20.0% market expectations) albeit imports in December rose +19.5% y/y less than +28.5% as anticipated. That meant that they posted a trade surplus of $94.46bn last month, above the consensus forecast for a $74.50bn surplus. Looking ahead, futures on both the S&P 500 (-0.19%) and DAX (-0.79%) are pointing to further losses later on. Elsewhere in markets, yesterday saw another surge in European natural gas futures (+13.71%), albeit still at levels which are less than half of the peaks seen in mid-December. The latest moves came as Russia’s deputy foreign minister Sergei Ryabkov said that talks with the US had reached a “dead end”, amidst strong tensions between the two sides with Russia rejecting any further expansion of NATO as well as calls to pull back its forces from near Ukraine’s border. In response, the Russian ruble weakened -2.31% against the US dollar yesterday, whilst the MOEX stock index (-4.05%) suffered its worst daily performance since April 2020. Turning to the Covid-19 pandemic, the decline in UK cases continued to accelerate yesterday, with the number of cases over the past week now down -24% relative to the previous 7-day period. Looking at England specifically, the total number of Covid-19 patients in hospital is now down for a 3rd day running, and in London the total number in hospital is down to its lowest level since New Year’s Eve. To the day ahead now, and data releases include US retail sales, industrial production and capacity utilisation for December, along with the University of Michigan’s preliminary consumer sentiment index for January and the UK’s GDP for November. Central bank speakers include ECB President Lagarde and New York Fed President Williams. Lastly, earnings releases include Citigroup, JPMorgan Chase, Wells Fargo and BlackRock. Tyler Durden Fri, 01/14/2022 - 08:13.....»»

Category: dealsSource: nytJan 14th, 2022

With a Bang: RISMedia Kicks Off 2022 With Expert Panels, Predictions

Covering everything from the complex technical aspects of the new MLS changes to the power of women’s leadership in the industry, RISMedia’s all-star lineup of trendsetters and influencers at RISMedia’s Real Estate Rocking in the New Year wasted no time in delving into the most pertinent questions facing real estate professionals in 2022, providing a […] The post With a Bang: RISMedia Kicks Off 2022 With Expert Panels, Predictions appeared first on RISMedia. Covering everything from the complex technical aspects of the new MLS changes to the power of women’s leadership in the industry, RISMedia’s all-star lineup of trendsetters and influencers at RISMedia’s Real Estate Rocking in the New Year wasted no time in delving into the most pertinent questions facing real estate professionals in 2022, providing a road map and plenty of poignant advice to guide a successful path through the new year. “Our collective goal is to help all of you enter 2022 better equipped to tackle today’s issues and help you improve your value proposition,” said John Featherston, RISMedia’s Founder, CEO & Publisher. “Buyers and sellers need your services now more than ever to achieve their real estate goals and objectives. We hope today helps you start off your year stronger than ever before.” In the wake of the global upheaval over the past couple years, mapping out the increasingly unknown challenges of 2022 seemed more important than ever, and panelists started off with goals and predictions for what the next 12 months will bring, as the industry hopes to see the continuation of a strong housing market, along with accelerating trends around technology and equity. Chief Economist for the National Association of REALTORS®, Lawrence Yun, laid out a scenario where pandemic-driven demand and rising rents would offset other macroeconomic impediments, resulting in a relatively strong real estate market. “There is an eagerness for home buying especially in a rising-rent situation, and REALTORS®, you should be positioned to help out,” he said. Sue Yannacone, President & CEO of Realogy Franchises, said the industry should focus on the “growth opportunities” that materialized during the pandemic, both in the realm of technology as well as geographically and demographically. “Millennials are really finally en masse entering the home buying age, if you will,” Yannacone pointed out. “And the transfer of wealth that we’ve been talking about for quite some time now is beginning to occur. You couple that with the fact that we have people rethinking their lifestyle and rethinking what home means to them… companies continuing to allow work-from-home, work-from-anywhere policies are all going to continue to fuel the demand that we’re seeing.” With consumers seeing the possibilities in digital closing, virtual tours and speedier transactions, Yannacone urged the thousands of people streaming the event to lean into the changes, and find more ways to augment their services with tech “in a way that helps us engage with our consumer more.” She also highlighted disparities in home ownership for Black and Hispanic families, saying that REALTORS® can make a difference here. “We have an opportunity to serve these communities better, and it’s a real ongoing priority for me and I’m sure for many,” she said. Panels Though billed as an opening overview of the larger “Rocking in the New Year” event, experts had a chance to get into the weeds on a couple key issues. Candace Adams, President & CEO of Berkshire Hathaway HomeServices New England Properties/Westchester Properties/New York Properties/Hudson Valley Properties, moderated a powerful discussion on the state of women’s leadership, with participants seeing both progress and new pitfalls appearing in the last couple years. “I think a lot of what the pandemic did was accelerate a change,” said Cory Vasquez, chief marketing officer for Realty ONE Group. “I think that we saw some strength that women bring to the table really contribute to helping people through job changes, work changes, schools changes, life changes. Women tend to be resilient; we love to self-develop.” Broadly, panelists generally agreed that women had seen more opportunities at the high leadership levels than in year’s past, fueled by changing attitudes and priorities. Flexibility, empathy, multitasking and resilience were all qualities that allowed women to rise to the top during the pandemic, and which many companies and organizations could benefit from, they said. “There are numerous research studies that show women are better leaders especially in a crisis, which is what we are dealing with the last couple years,” said Tina Lapp, President of Colibri Real Estate. At the same time, women have fallen out of the broader workforce much faster than men and have often been asked to multitask with things like remote schooling. Michelle Harrington, CEO & Broker of Record for First Team Real Estate, pointed out the pandemic significantly hampered efforts to achieve gender equality, with the World Economic Forum predicting it would take 30 more years to reach this goal due to Covid. At the same time, Harrington urged women to let their own abilities and talents shine and show the world what they can do, rather than waiting around for government action. “You really need to believe in yourself. Women are awesome. We don’t need affirmative action, we don’t need someone to appoint us to a board because a law says it,” she said. “Don’t try to be a man, we’re not men. We can do things our own way,” Adams affirmed. “And that’s a shift from maybe a decade ago.” A second panel sank its teeth into an important regulatory and technical issue—the Multiple Listing Service (MLS). Vice President of MLS & Industry Relations for HomeServices of America, Jon Coile detailed a half-dozen recent policy changes likely to affect brokerages, as well as previewed a new environment for MLS owners and users in 2022. “We should be treating organized real estate as if it were part of the solution—we’re all in this together,” he said. Statewide standards for MLSs are currently being considered in the industry, he said, and MLSs are now required to tweak their attribution and provide back-office feeds for brokerages. Rebecca Jensen, President & CEO of Midwest Real Estate Data added that an overall standardization and collaborative attitude, lauding large MLSs and group efforts by smaller ones to invest in technology and share best practices. “When we’re talking about a shift in both the business model and the money, I think you’re going to see that not just in the brokerage community but in the MLS community,” Jensen predicted. “We’ve talked about consolidation of MLSs for years now, but now it is consolidation of services, and it is teaming up with different industry players to really deliver what it is that different brokerages need.” Across the broader landscape of things likely to affect the industry, President of the Houston Association of REALTORS®, Bob Hale called out climate change as something “affecting everything from California to Florida to Texas to Kentucky.” Also, Executive Director of the Real Estate Services Providers Council Ken Trepeta, looked at regulatory action coming from the Biden administration. “I think we’re going to see activity out of the Consumer Financial Protection Bureau and Housing and Urban Development,” he said “There is going to be a lot of focus on fair housing, fair lending.” Regardless of all the unknowns and possibilities, staying up to date with news and developments will certainly remain vital, as 2022 promises to offer just as much change and challenge as last year. Missed the event? Replays including every panel and expert interview are available here. Jesse Williams is RISMedia’s associate online editor. Email him your real estate news ideas to jwilliams@rismedia.com. The post With a Bang: RISMedia Kicks Off 2022 With Expert Panels, Predictions appeared first on RISMedia......»»

Category: realestateSource: rismediaJan 13th, 2022

Victor Davis Hanson: Who Are The Real Insurrectionists?

Victor Davis Hanson: Who Are The Real Insurrectionists? Authored by Victor Davis Hanson, Recently, Democrats have been despondent over President Joe Biden's sinking poll numbers. His policies on the economy, energy, foreign policy, the border, and COVID-19 all have lost majority support. As a result, the left now variously alleges that either in 2022, when they expect to lose the Congress, or in 2024, when they fear losing the presidency, Republicans will "destroy democracy" or stage a coup. A cynic might suggest that they praise democracy when they get elected, only to claim it is broken when they lose. Or they hope to avoid their defeat by trying to terrify the electorate. Or they mask their own revolutionary propensities by projecting them onto their opponents. After all, who is trying to federalize election laws in national elections contrary to the spirit of the Constitution? Who wishes to repeal or circumvent the Electoral College? Who wishes to destroy the more than 180-year-old Senate filibuster, the over 150-year-old nine-justice Supreme Court, and the more than 60-year-old, 50-state union? Who is attacking the founding constitutional idea of two senators per state? The Constitution also clearly states that "When the President of the United States is tried, the Chief Justice shall preside." Who slammed through the impeachment of former president Donald Trump without a presiding chief justice? Never had a president been either impeached twice or tried in the Senate as a private citizen. Who did both? The left further broke prior precedent by impeaching Trump without a special counsel's report, formal hearings, witnesses, and cross-examinations. Who exactly is violating federal civil rights legislation? New York City's Department of Health and Mental Hygiene in December decided to ration potentially lifesaving new COVID-19 medicines, partially on the basis of race, in the name of "equity." The agency also allegedly used racial preferences to determine who would be first tested for COVID-19. Yet such racial discrimination seems in direct violation of various title clauses of the 1964 Civil Rights Act. That law makes it clear that no public agency can use race to deny "equal utilization of any public facility which is owned, operated, or managed by or on behalf of any State or subdivision thereof." Who is behind the new racial discrimination? In summer 2020, many local- and state-mandated quarantines and bans on public assemblies were simply ignored with impunity -- if demonstrators were associated with Black Lives Matter or protesting the police. Currently, the Biden administration is also flagrantly embracing the neo-Confederate idea of nullifying federal law. The administration has allowed nearly 2 million foreign nationals to enter the United States illegally across the southern border -- in hopes they will soon be loyal constituents. The administration has not asked illegal entrants either to be tested for or vaccinated against COVID-19. Yet all U.S. citizens in the military and employed by the federal government are threatened with dismissal if they fail to become vaccinated. Such selective exemption of lawbreaking non-U.S. citizens, but not millions of U.S. citizens, seems in conflict with the equal protection clause of the 14th Amendment. After entering the United States illegally, millions of immigrants are protected by some 550 "sanctuary city" jurisdictions. These revolutionary areas all brazenly nullify immigration law by refusing to allow federal immigration authorities to deport illegal immigrant lawbreakers. At various times in our nation's history -- 1832, 1861-65, and 1961-63 -- America was either racked by internal violence or fought a civil war over similar state nullification of federal laws. In the last five years, we have indeed seen many internal threats to democracy. Hillary Clinton hired a foreign national to concoct a dossier of dirt against her presidential opponent. She disguised her own role by projecting her efforts to use Russian sources onto Trump. She used her contacts in government and media to seed the dossier to create a national hysteria about "Russian collusion." Clinton urged Biden not to accept the 2020 result if he lost, and herself claimed Trump was not a legitimately elected president. The chairman of the Joint Chiefs of Staff has violated laws governing the chain of command. Some retired officers violated Article 88 of the Uniform Code of Military Justice by slandering their commander-in-chief. Others publicly were on record calling for the military to intervene to remove an elected president. Some of the nation's top officials in the FBI and intelligence committee have misled or lied under oath either to federal investigators or the U.S. Congress, again, mostly with impunity. All these sustained revolutionary activities were justified as necessary to achieve the supposedly noble ends of removing Trump. The result is Third World-like jurisprudence in America aimed at rewarding friends and punishing enemies, masked by service to social justice. We are in a dangerous revolutionary cycle. But the threat is not so much from loud, buffoonish one-day rioters on Jan. 6. Such clownish characters did not for 120 days loot, burn, attack courthouses and police precincts, cause over 30 deaths, injure 2,000 policemen, and destroy at least $2 billion in property -- all under the banner of revolutionary justice. Even more ominously, stone-cold sober elites are systematically waging an insidious revolution in the shadows that seeks to dismantle America's institutions and the rule of law as we have known them. Tyler Durden Thu, 01/06/2022 - 23:00.....»»

Category: personnelSource: nytJan 6th, 2022

Mitch McConnell slams Democrats for trying to "exploit" the January 6 anniversary to "advance partisan policy goals"

"It is especially jaw-dropping to hear some Senate Democrats invoke the mob's attempt to disrupt our country's norms," McConnell said. Senate Minority Leader Mitch McConnell (R-KY).Anna Moneymaker/Getty Images Mitch McConnell slammed Democrats for trying to "exploit" the January 6 anniversary. He accused them of pushing "partisan policy goals that long predated this event." McConnell did not attend the commemorative events at the Capitol on Thursday. Senate Minority Leader Mitch McConnell on Thursday marked the anniversary of the "dark" and "disgraceful" January 6 Capitol insurrection, but also criticized Democratic leaders over how they've commemorated the deadly day."January 6th, 2021 was a dark day for Congress and our country. The United States Capitol, the seat of the first branch of our federal government, was stormed by criminals who brutalized police officers and used force to try to stop Congress from doing its job," the Kentucky Republican said in a statement, referring to when Congress met to certify the 2020 presidential election results."This disgraceful scene was antithetical to the rule of law. One year later, I am as grateful as ever for the brave men and women of the U.S. Capitol Police who served our institution bravely that day and every day since. I continue to support justice for those who broke the law," he continued.McConnell then took aim at Democrats, accusing them of trying to "exploit" the anniversary to push forward their agenda."It has been stunning to see some Washington Democrats try to exploit this anniversary to advance partisan policy goals that long predated this event. It is especially jaw-dropping to hear some Senate Democrats invoke the mob's attempt to disrupt our country's norms, rules, and institutions as a justification to discard our norms, rules, and institutions themselves," McConnell said. President Joe Biden, Vice President Kamala Harris, and Democratic lawmakers gathered at the Capitol on Thursday to commemorate January 6 through speeches, a moment of silence, and other events. Republican leaders, including McConnell, were notably absent. McConnell is traveling to Atlanta, Georgia, to attend the funeral of his former colleague, Sen. Johnny Isakson.In a speech, Biden recounted the day's violence, honored the deaths of law enforcement officials, and issued a stark warning that "we must make sure that such an attack never, never happens again."The president also criticized former President Donald Trump, pinning blame on him — without explicitly naming him — for the riot and condemning his "big lie" that the 2020 presidential election was rigged. "He built his lie over months. It wasn't based on any facts," Biden said. "He's not just a former president. He's a defeated former president — defeated by a margin of over 7 million of your votes in a full and free and fair election."At one point in his speech, Biden also commented on states' efforts to reshape voting laws. Many of these new laws restrict voting access and politicize the election administration process. "So, we have to be firm, resolute, and unyielding in our defense of the right to vote and to have that vote counted," Biden said.Among Senate Democrat's top priorities is advancing voting rights legislation. But the party, which controls 50 Senate seats with Vice President Kamala Harris able to cast a tie-breaking vote, needs to overcome the 60-vote filibuster requirement in order for a bill to pass. That means possibly tweaking Senate rules to move the voting rights legislation along by a simple-majority vote.McConnell and Republicans have previously blocked Democrats' voting rights legislation and have expressed widespread opposition to the policy proposal."No party that would trash the Senate's legislative traditions can be trusted to seize control over election laws across America," McConnell said in a statement on Wednesday. "Nobody who is this desperate to take over our democracy on a one-party basis can be allowed to do it."Read the original article on Business Insider.....»»

Category: personnelSource: nytJan 6th, 2022

5 places where World War III could start in 2022

Several simmering disputes have the world looking more dangerous than any time since the end of the Cold War. Taiwanese M110 self-propelled Howitzers fire during exercises in southern Taiwan, May 30, 2019.AP Photo/Chiang Ying-ying Simmering disputes have the world looking more dangerous than any time since the Cold War. A number of local conflicts could quickly ensnare great powers, setting off a full-scale war. Here are five flashpoints with the highest potential for erupting into World War III. Entering 2022, the world looks more dangerous than it has at any time since the late 1980s.Real conflicts of interest in Eastern Europe and the East China Sea have set the table for the first serious great-power conflict in decades. Crises in the Middle East, Northeast Asia, and the Himalayas continue to smolder.Here are the five most dangerous flashpoints for the eruption of World War III, in descending order of peril:5 places World War III could erupt: UkraineUkrainian troops from Donbass battalion train with small arms outside Mariupol, Ukraine, March 13, 2015.GettyEasily the most likely flashpoint for great power war in 2022 lies along the border between Russia and Ukraine. Over the past six months, Russia has steadily built up forces along the frontier as Kyiv, Moscow, and Washington have traded barbs.Russia's immediate concerns involve the Ukrainian acquisition and use of Turkish drones along its border regions, along with a general increase in Ukrainian military power. Moscow's long-range problem is its inability to reverse the Western orientation that Kyiv has adopted since 2014.Russia has publicly argued that it wants to resolve the issues of Ukraine and of Russia's relationship with NATO on a permanent basis. The United States and NATO have not responded positively to these overtures but have notably failed to guarantee Ukraine's security.If Russia launches an invasion of Ukraine things could get ugly quickly. Despite improvements in Ukrainian forces, most analysts expect that Russia would win quick victories along the border, potentially gaining access to the Ukrainian heartland.Direct Russian military action would put immense pressure on the United States to respond in some fashion. However, the US can support Kyiv in several ways without direct intervention. This includes economic sanctions against Russia, cyberattacks against Russian infrastructure, the transfer of weapons to Ukraine, and the sharing of real-time intelligence with Ukrainian forces.The use of any of these tools, especially if they show some success on the ground, could lead to a confrontation between Moscow and Washington.5 places World War III could erupt: TaiwanTaiwanese navy frigate Yi Yang fires an anti-submarine missile during a drill near Hualien, Taiwan, May 22, 2019.REUTERS/Tyrone SiuOver the past year, long-simmering US concern over the Chinese threat to Taiwan has seemed to come to a boil.Chinese military capabilities have grown rapidly over the past decade, and now constitute a major obstacle against US intervention. At the same time, China's military remains untested, and an amphibious assault across the Taiwan Strait would constitute one of the most sophisticated military operations in history.The potential for miscalculation is immense. The United States maintained a studied ambiguity towards Taiwan for the past 40 years as it developed a strong economic relationship with the People's Republic of China.This "strategic ambiguity" was designed to remove the incentive for Taiwan to declare independence while not giving China an excuse to invade. Some in Congress have now called for an end to this policy, and for more full-throated support of Taiwan's international position.Taiwan air force ground crew run to a US-made F-16V fighter for an emergency takeoff during an exercise in southern Taiwan, January 15, 2020.AP Photo/Chiang Ying-yingA war could begin in several different ways. China could launch a "bolt from the blue" attack designed to catch US and Taiwanese forces unawares.Alternatively, tensions in other aspects of the US-China relationship might convince Beijing of the likelihood of a change in the US stance toward Taiwan, leading to a pre-emptive attack.Finally (and least likely) Taiwan might attempt to make its independence an accomplished fact, which most analysts believe would incur Chinese military intervention.In any eventuality, escalation would be difficult for either side to manage, and a fight over access to Taiwan could quickly degenerate into a general war.5 places World War III could erupt: IranAn anti-US mural on a wall of a government building in central Tehran, October 12, 2011.REUTERS/Morteza Nikoubazl Any honest appraisal of US policy toward Iran now recognizes that then-President Donald Trump's decision to abandon the Joint Comprehensive Plan of Action (JCPOA), better known as the Iran Nuclear Deal, was a disastrous mistake.The US effort to increase military and economic coercion against Iran has failed. Iran has stepped up its nuclear efforts while improving the sophistication of its missile forces and increasing its covert activities across the region.Negotiations have thus far failed to restore the status quo, as the United States has stumbled over its inability to commit and Tehran has taken a tough attitude. If negotiations fail to bring Iran into some kind of a deal, the threat of military action lurks in the background.While the Biden administration doesn't seem excited about the prospect of war, US allies in Riyadh and Jerusalem could try to trigger a confrontation. Similarly, if Iran comes to believe an attack is inevitable, it could pre-empt with all the tools it has available.Iran lacks committed great power backing, but a conflict in the Middle East could open opportunities elsewhere for Russia and China.5 places World War III could erupt: North KoreaA submarine missile parades across Kim Il Sung Square in Pyongyang, April 15, 2017.AP Photo/Wong Maye-EThe North Korea front has gone quiet over the last couple of years, as the DPRK has struggled too much with the covid pandemic to bother making much trouble internationally.Japan, South Korea, and the United States have similarly been happy to let sleeping dogs lie, focusing on bigger international and domestic problems rather than trying to cut through the apparently intractable Korean situation.To the extent that North Korea has made the headlines the news largely seems to be positive, with the US and Seoul coming to a mutual understanding on the prospects for a formal end to the Korean War.And yet … the problem of North Korea remains unresolved. It is not a failed state but it faces enormous economic, social, and political problems.Historically, Pyongyang has used external belligerence to attract international attention and force a resolution of its concerns. While North Korea has not tested a nuclear weapon in several years, a resumption of testing, combined with additional tests of its missile arsenal, could erase much of the calm that has ensued over the past few years.5 places World War III could erupt: HimalayasIndian and Chinese army officers meet in the Pangong Lake region of Ladakh as they pull back from disputed portions of their border, February 10, 2021.Indian Army via APTensions between China and India have mellowed over the past year, but we should not forget that the border between the two countries witnessed lethal confrontations over the past two years.India and China have worked hard to reduce tensions along the border, but basic disagreements over territory and disposition remain. Both countries have continued to build up infrastructure in the region that could support rapid military mobilization.Neither Beijing nor Delhi seem particularly interested in throwing down over control of remote mountain regions. But it is not difficult to envision renewed skirmishes that then draw in other problematic aspects of their relationship.Although China enjoys considerable military superiority, some trends appear to favor India. The burgeoning technological relationship between Delhi and Washington is a source of concern for Beijing, especially given the newfound willingness of the United States to engage in long-term technological agreements such as AUKUS.If China comes to understand renewed tension along the border as part of a general encirclement strategy rather than as a bilateral problem with India, it might become more willing to take serious risks to resolve the situation.World War III in 2022?A room at the Villa La Grange arranged for a meeting between Russian President Vladimir Putin and President Joe Biden, June 16, 2021.Sergei BobylevbackslashTASS via Getty ImagesThe Covid pandemic has demanded much of the world's attention over the past two years. This hasn't stopped geopolitics in its tracks, but it certainly has redirected the priorities of global leaders.The pandemic isn't over, but it is becoming part of the background noise of international politics, and great powers are recalibrating and reasserting their interests. We shouldn't expect great power war in 2022, but we should always be aware of the potential for things to get out of hand.Most importantly, we should take care to consider that the conflicts above are interactive and interdependent. If war breaks out with Iran, it affects decision-making over the whole world.Now a 1945 contributing editor, Dr. Robert Farley is a senior lecturer at the Patterson School at the University of Kentucky. Dr. Farley is the author of "Grounded: The Case for Abolishing the United States Air Force" (University Press of Kentucky, 2014), "the Battleship Book" (Wildside, 2016), and "Patents for Power: Intellectual Property Law and the Diffusion of Military Technology" (University of Chicago, 2020).Read the original article on Business Insider.....»»

Category: topSource: businessinsiderJan 6th, 2022

We Analyzed the Emissions 4 Families Generated in a Week. Here’s What We Learned About Living Greener

If 2021 was one of our last, best, chances to save the planet, it was also the year that we bought lots and lots of stuff, cooped up at home and frustrated with the pandemic. That shopping acted counter to the goal of reducing our carbon footprint; consumption drives about 60% of greenhouse gas emissions… If 2021 was one of our last, best, chances to save the planet, it was also the year that we bought lots and lots of stuff, cooped up at home and frustrated with the pandemic. That shopping acted counter to the goal of reducing our carbon footprint; consumption drives about 60% of greenhouse gas emissions globally, as the factories that make our stuff and the ships and trucks that bring it to us generate emissions, not to mention the emissions caused by mining for raw materials and farming the food we eat. Amazon alone reported in June that its emissions went up 19% in 2020 because of the boom in shopping during the pandemic. [time-brightcove not-tgx=”true”] Still, it can be hard, as an individual or a family, to care enough to change habits. Buying things has become one of the few sources of joy for many people since COVID-19 began sweeping the globe—and shopping online has become necessary for people trying to stay at home and avoid potential exposure. But goods are so cheap and easily available online that it feels harmless to add one more thing to your shopping cart. Convincing yourself to be environmentally conscious in your shopping habits feels a bit like convincing yourself to vote—obviously you should do it, but do the actions of one person really matter? As I kept buying things that I thought I needed while cooped up at home, I wondered: how much was my shopping, individually, contributing to climate change? Those pairs of extra-soft sweatpants, those reams of high density rubber foam that I use to baby-proof my apartment, those disposable yogurt bins and takeout food containers, all made from plastic and paper and other raw materials; was I—and other U.S. families spending so much money on stuff—making it that much harder to reach the COP26 goal of preventing warming from going beyond 1.5°C? Read more: Our Shopping Obsession is Causing a Literal Stink In order to estimate the carbon footprint of the shopping habits of families like mine, I asked four families in four cities—Denver, Colo., Atlanta, Ga., San Francisco, Calif., and Salem, Mass.—to track their spending the week beginning on Cyber Monday, Nov. 29, so I could try to determine what parts of their holiday spending were most harmful to the environment. I chose to calculate their carbon footprint rather than other impacts like the amount of water used to make the products they bought because scientists agree on the urgency of reducing greenhouse gas emissions to protect the planet’s future.   Courtesy photoThe baby in the Salem family opens a holiday gift. Measuring one’s carbon footprint is difficult, especially because much of the environmental impact from spending is upstream, at the factories that burn fossil fuels to make cars, for example, and at the farms that raise cows for our consumption and release methane. So I asked for help from David Allaway, a senior policy analyst at the Oregon Department of Environmental Quality, who has been working for years to calculate the carbon footprint that comes from consumer spending. To figure out how much the consumption habits of Oregonians contribute to climate change, and what the state should be doing to remedy this, Allaway commissioned the Stockholm Environment Institute to produce the first state-level analysis of the environmental footprint of Oregon’s consumer spending in 2011. This analysis, called consumption-based emissions accounting, roughly estimates the emissions that come from consumer purchases in 536 different categories, including things as specific as beef cattle, books, and full-service restaurants. It counts the emissions of all purchases by consumers, regardless of where those emissions were created—in Mexico, picking, packing, and shipping bananas; in Saudi Arabia, drilling for and refining petroleum. Allaway has refined the analysis since then and completed it again in 2015. Allaway agreed to use the model he has honed to calculate the carbon footprint of these four families, based on how much money they spent in each category. The families sent me their expenses, excluding housing, and I entered them into the categories in Allaway’s model. This is, of course, an inexact model: The families only tracked one week of spending, and their spending was self-reported, so it’s possible they missed an expense or two. Still, the estimates give a good overview of the emissions driven by the behavior of different families. They only tracked one week of spending, and I prorated their electricity and power costs, so this is still an inexact calculator. A family might spend a lot one week and not much the following week. Still, the estimates give a good overview of just how much of a difference individuals can make in reducing their carbon footprint, and they shed light on exactly how our spending drives emissions. Although many consumers have a lot of guilt about disposing of things once they’re done with them, whether it be plastic packaging or a shirt that they’ve worn a few times and then stained, we just looked at consumption. That’s because the emissions from the disposal of goods is tiny compared to the emissions created from producing something in the first place. “By the time you purchase something, 99% of the damage has already been done,” Allaway told me. This means that the “reduce” part of “reduce, reuse, recycle,” is the most important. Read more: How American Consumers Broke the Supply Chain Buying less stuff is a piece of reducing emissions, but families can most reduce their carbon footprints through their eating and travel habits. The Denver family, which is vegetarian and has solar panels on their roof, had a significantly smaller footprint than the others. The families that ate beef and dairy and that bought plane tickets were responsible for the most emissions. There’s a reason the Swedish have a word “flygskam,” or “flight shame”: one flight can cancel out the most tightfisted family’s progress for a week. In general, spending on services and experiences, like concert tickets or museum subscriptions, is more environmentally friendly than spending on goods, because part of what you are paying for is labor. Allaway estimates that every $100 spent on materials accounts for about three times more emissions than $100 spent on services. Of course, there are exceptions—spending $100 on a steak dinner for two could have higher emissions than spending $100 on groceries to make a vegan meal at home. A few more quick caveats: these are all families with annual incomes of more than $100,000, and I sourced them from friends of friends and social media. They are all white, which is the group that is responsible for the highest levels of consumption in the U.S., and as a result, the most emissions. TIME agreed to use only their initials and the cities in which they live in order to encourage them to openly share their consumption habits without fear of being shamed for their purchases. The results varied widely, from a family in San Francisco that had a weekly carbon footprint of 1,267 kg of carbon dioxide equivalent—about the same as driving from New York to San Francisco in a gas-powered car—to the family in Denver whose weekly carbon footprint was just 360 kgCO2, the equivalent of driving from Denver to Tucson. Here are their detailed weekly breakdowns. The Family That Spends a Lot Online A.S. + W.H. Location: Salem, Mass. Children: 1-year-old Combined household income: about $200,000 Total emissions: 819 kgCO2e   This family spent about $2,800 for the week and had a carbon footprint of 819 kgCO2e, the equivalent of a passenger car driving 2,058 miles, according to the EPA’s Greenhouse Gas Equivalencies Calculator. That’s the same as they would have emitted from driving from Salem, Mass. to Charleston, S.C., and back. A.S and W.H. own their home in the coastal community of Salem, Mass. and have a baby daughter. Before becoming parents, the couple was used to buying things and using them for years. But they’re finding that as their daughter grows, their pace of shopping has sped up. “One of the things that makes having a baby so wasteful is that you need something, and when you need it, you need it urgently,” A.S. told me. “You need it for three weeks, and then you don’t need it anymore.” Online shopping has been a source of contention for the couple; W.H. buys almost everything online, which his spouse thinks creates needless waste. The two have asked their extended family to cut back on buying goods and to gift them experiences or services instead, but relatives have been resistant to change. Their biggest single source of consumption-based emissions from the week, 138 kgCO2e, came from buying stuff online. They spent $298.99 for gifts for two family friends: two subscription boxes from Little Passports, which will send the recipients crafts, puzzles and books about different locations around the world for a year. This falls into the “dolls, toys, and games” category, which means the emissions-per-dollar would have been calculated the same regardless of what dolls, toys, and games they bought. Most of the emissions in this category come from the factories that make this stuff, rather than the materials mined or produced to create them, Allaway said, so it wouldn’t really matter environmentally whether they bought these toys at Amazon, Walmart or at a local toy store. They also bought a $269.20 wall sconce, a purchase that created 105 kgCO2e. Aside from those purchases, their biggest emissions came from the food they ate—specifically beef and dairy products. A.S. and W.H. had a pizza dinner with family during the week and a few snacks and coffees at local restaurants; all meals out, whether sit-down or take-out, are categorized as services. But they did buy around $40 worth of ice cream, yogurt and cheese, and they participated in a food share that provided them with around $28 of red meat (the protein changes every week.) Dairy and beef cause a lot more emissions than vegetables; the family spent roughly the same amount on vegetables and on dairy products, but the dairy was responsible for more than double the emissions as their veggies. The couple told me that they’ve been trying to cut back on dairy but have had a hard time finding an environmentally-responsible alternative; almond milk uses up crucial water, for example, and coconut milk requires a lot of emissions-heavy transport to get from where coconuts are grown to New England. They also wonder whether cutting back on things they enjoy is worth the sacrifice. Spending $30 on beef produces about 47 kgCO2e, which is the same as driving about 120 miles. Why should they stop buying cheese if their neighbor is driving that far to commute to and from work every week? “That’s one of the big pieces of friction between me and my husband,” A.S. told me. “I think he sees this as too big of a problem for any individual behavior to change.” The Family That Eats Out a Lot M.C. and N.A. Location: Atlanta, Ga. Children: 14 months and 3 ½ years old Combined household income: $100k-$200k Total emissions: 757 kgCO2e   This family spent about $1,361 for the week and had consumption-based emissions of 757 kg CO2e, the same as if they’d driven a car 1,902 miles, according to the EPA’s Greenhouse Gas Equivalencies Calculator. That’s the distance from Atlanta to Las Vegas. The Atlanta family’s emissions came in slightly lower than the Salem family’s. M.C. told me that this week was atypical for them because they usually buy diapers and fill up on gas, and they didn’t do either this week. They did eat out a lot—they were surprised by how much, once they started counting, but because of the way Allaway’s model works, restaurants are a lower-emissions way to spend money than buying a lot of goods. (The model doesn’t account for what you eat at a restaurant, but since so much of a restaurant’s bill is for service, rather than a tangible product, the spending often creates lower emissions.) M.C. told me that because they’re in their car so much, they often stop by quick-service restaurants like Chick-Fil-A to get a fast dinner if they don’t have time to prepare something at home. The pandemic has made them feel guilty about the environmental repercussions of eating out so much, because even sit-down restaurants serve food on disposable plates, with plastic utensils. But their biggest source of emissions for the week was something out of their control—electricity generation. Their electricity bill is about $200 a month but can be as high as $500 in the summer and winter, the family told me. I prorated that to $50 a week, which led to 254 kg CO2e, one of the highest single weekly sources of emissions for any family. (That’s the equivalent of a car driving from New York to Detroit.) The Atlanta and Denver households had higher emissions from their electricity and natural gas bills than the other two families in part because these regions are more reliant on coal-fired power plants, Allaway said. N.A., who works in finance, takes public transit to work, and the family has been trying to move away from spending money on things and toward spending on experiences. But something like cutting back on red meat or being more conscious about the products they buy can be hard, M.C. said. She has enough going on already. “With two little kids, I don’t think about it,” she said. The Family That Travels A.A. and M.T. Location: San Francisco Children: 18 months Combined household Income: more than $300,000 Total emissions: 1,267 kg CO2e   The wealthiest families create the most emissions, and that was certainly true with the San Francisco family, which was the highest-earning of the four families and which generated the highest emissions: the equivalent of driving from San Francisco to Miami. A.A. told me she thought the family had been buying way too much stuff online, and they did buy more stuff online than any of the other families —$60 on clothes from Target, $23 for a baby float on Amazon, $48 for diapers on Amazon, $21 for baby wipes. They also shopped at brick and mortar stores—$26 at a local bookstore, $37 at CVS for razors and snacks, $18 at a local hardware store. And they spent a lot on restaurants—about $300 in total. But none of those purchases drove the bulk of their emissions. Instead, that came from a $400 purchase of two round-trip airline tickets from San Francisco to Los Angeles, which created 436 kg CO2e, the single largest emissions from any purchase of the four families for the week. Because prices were discounted when they bought the tickets, that’s probably a low estimate of the emissions from their flight; the emissions calculator run by myclimate, an international nonprofit, estimates that a roundtrip flight for two between those two cities would generate 614 kg of CO2e, more than the 333 kg the family would have created by driving. (Taking a train would have lowered their emissions further, but also would have taken 12 hours one way.) They also spent $400 on hotel reservations, leading to 123 kg CO2e. This is intuitive—we all know that flying creates a lot of emissions. But it was illuminating to see just how much more it creates than other things do. That one trip to LA bumped the family’s emissions from 708 kg in the week to 1,276. A.A. told me they haven’t flown much since the pandemic started and bought the tickets to attend a close friend’s wedding. In the last two years, they’ve flown far less than they did before the pandemic and before having children. Instead, they’ve stayed home and explored San Francisco, or driven to destinations within an hour or two. They say they feel lucky to be able to do that where they live and will think twice before buying plane tickets on a whim going forward, but that unless costs go up, it may be hard to resist a getaway. The Family That Buys Used M.C. and N.A. Location: Denver Children: 9, 7, and 4 years old Combined household income: More than $200,000 Total emissions: 360 kg CO2e The Denver family has been trying to be more environmentally-conscious for years, and they had the lowest emissions, despite having the most family members (although they were the only family without a kid in diapers.) Their emissions were far lower than those of the other three families, adding up to the equivalent of a drive from Denver to Tucson. They do just about everything they can do to reduce emissions: M.C. doesn’t eat meat or cook it at home; her husband and children only eat meat if it’s served at a friend’s house. The family tries to avoid dairy products (one of the items they bought this week was vegan “egg”nog); they buy used clothes from ThredUp; their home has solar panels. M.C. said the family has always been conscious about reducing waste but became more serious about it a few years ago; when all their friends were moving to the suburbs, they moved to a more urban area of Denver, where N.A. could walk to work. “The driving we were doing was more impactful than the plastic wrap on a bag of pasta,” M.C. said. The couple knew they would have to make some sacrifices when they had children, but they didn’t want to give up on their environmental goals. They decided to wrest control over what their life looked like. “We realized that we could make some more intentional choices, set up our life in a way that not only decreased environmental impact, but also made our life happier,” she said. They enjoy being able to walk to so many places. M.C. has really never liked meat; she would occasionally cook it for her kids but stopped doing so three years ago. They’ll treat themselves to real cheese or real eggnog occasionally, but usually they go vegan. Their biggest emissions came from their use of natural gas—they spend about $44 a month on natural gas, despite their solar panels. Because solar power is so variable—it may be sunny one day, and then cloudy for a week—most systems that run on renewables like solar also use some natural gas. Still, the Denver family avoided a lot of emissions in places where other families didn’t. They spent $156 on clothes, but all from ThredUp, a used clothing site, which generated only 17 kg CO2e, according to Allaway’s estimates. The San Francisco family, by contrast, spent $61 on new clothes, which resulted in 26 kg CO2e. (Allaway’s model treats used goods as having a very low carbon footprint because it assigns the carbon footprint to the previous user, who bought them new; but buying used clothes does have some carbon footprint since the clothes are transported from the warehouses where they’re stored.) M.C. said she knows her kids might resist wearing used clothes as they get older and that there may be a day when they don’t want Christmas gifts from the thrift store. But they’re trying to teach their children not to be consumed by materialism, she said. She wants them to find happiness from something other than new things. When I asked M.C. if she thought her sacrifices were worth it, she said yes. Her family’s choices allow the couple and their children to focus on relationships, she said. She hopes she has motivated some friends and family to change their behavior, too. But ultimately, it’s about being aware of the urgency of environmental awareness, she said. “By trying to reduce my own emissions, that helps me stay in touch with the broader issues and think about the ways I can be an advocate for change in the areas that really will have an impact,” she said. What Your Family Can Do Of course, the emissions that the Denver family saved compared to the San Francisco family would be wiped out by one individual taking an hourlong flight on a private jet. It can be hard to rationalize making dramatic behavioral changes when reducing individual emissions can feel fruitless. Even the annual emissions of the San Francisco family—around 66 metric tons of CO2—pale in comparison to the electricity use of just one U.S. supermarket over the course of a year: 1,383 metric tons of CO2. But changing your behavior is not fruitless, Allaway says. Individuals by themselves might not be able to make enough of a difference to prevent the worst effects of climate change, but collective action—lots of individuals working together—might. Still, many of our preconceived notions about what to buy can be wrong. In the winter, Oregon consumers who buy tomatoes from nearby British Columbia have a bigger carbon footprint than those who buy tomatoes from faraway Mexico, because the Canadian tomatoes are grown in power-hungry greenhouses, Allaway has found. Out-of-season apples from New Zealand may have less of a carbon footprint than local apples that have been put in cold storage for months. Coffee beans delivered in a fully recyclable steel container have a higher climate impact than beans delivered in non-recyclable plastic because of the steel container’s weight. There are behavioral changes you can make that will almost certainly lower your emissions. You can reduce your driving and flying. You can switch to renewable energy. You can buy lighter goods, which use less materials than heavyweight goods, and buy things that have to travel a smaller distance to get to your home (although that in itself is hard to parse out, because a “locally-made” toy may have been created from materials imported from China, which negates the benefits of buying something local). You can buy things that are made from plants rather than animals, and buy used goods whenever possible. (Of course, there’s a caveat there, too—buying a used car that is a gas guzzler would be worse than buying a new electric vehicle.) But if you’re trying to choose individual products that were created with lower emissions, you’ll have a tough task ahead of you. Right now, one of the only ways to know which products have the lowest carbon footprint is to read their life cycle assessment, which is a document that measures their environmental impact from cradle to grave. In Europe, many companies also offer Environmental Product Declarations, which are abbreviated versions of life-cycle assessments, says Sarah Cashman, director of Life Cycle Services at ERG, an environmental consulting group. These documents are hard to decipher, dotted with words like “eutrophication potential,” (the nutrient runoff from farming or manufacturing). EPD InternationalA chart in a 49-page diaper environmental product declaration document There is no report card that lets customers easily see which products are made, transported, and sold with lower emissions than others. Amazon has tried to start labeling some products as “climate-pledge friendly” so that shoppers can choose green products that have received a third-party sustainability certification from a qualifying organization. But even that puts a lot of burden on a consumer to read every label on every item that they buy. So much responsibility for creating less waste has already fallen onto the consumer that asking them to take one more step, as the families above said, is too much. There is a solution, though. Consumers can demand more from companies, who can take on the responsibility of lowering emissions for the products they make every step of the way. The supply chains of eight global industries account for more than 50% of greenhouse gas emissions, according to the Boston Consulting Group. There are companies that already have a head start. Patagonia says that 86% of its emissions come from the raw materials it uses and their supply chains, and through its Supply Chain Environmental Responsibility Program, it is aiming to use only renewable or recycled materials to make its products by 2025. Most companies won’t do this unprompted, but if consumers start shopping at places that are reducing emissions in their supply chain, companies will start looking at their supply chains in order to stay in business. A database of companies that are legitimately working on this would be a good first step. It may feel like there’s nothing you can do as an individual or as a family, but collective action could look like millions of families preferring to shop at places that are working to dramatically reduce emissions in their supply chain. Buying less may not be an option for many families, but Americans have proved, if nothing else, that they know how to shop smart.  .....»»

Category: topSource: timeJan 6th, 2022

Greenwald: NBC News Uses Ex-FBI Official Frank Figliuzzi To Urge Assange"s Extradition, Hiding His Key Role

Greenwald: NBC News Uses Ex-FBI Official Frank Figliuzzi To Urge Assange's Extradition, Hiding His Key Role Authored by Glenn Greenwald via greenwald.substack.com, Two of the television outlets on which American liberals rely most for their news — NBC News and CNN — have spent the last six years hiring a virtual army of former CIA operatives, FBI officials, NSA spies, Pentagon chiefs, and DOJ prosecutors to work in their newsrooms. The multiple ways in which journalism is fundamentally corrupted by this spectacle are all vividly illustrated by a new article from NBC News that urges the prosecution and extradition of Julian Assange, claiming that the WikiLeaks founder, once on U.S. soil, will finally provide the long-elusive proof that Trump criminally conspired with Russia. Twitter profile of former FBI Assistant Director Frank Figliuzzi, now of NBC News The NBC article is written by former FBI Assistant Director and current NBC News employee Frank Figliuzzi, who played a central role during the Obama years in the FBI's attempt to investigate and criminalize Assange: a rather relevant fact concealed by NBC when publishing this. But this is how U.S. security state agents now directly control corporate news outlets. During the Cold War and then in the decades following it, the U.S. security state constantly used clandestine measures to infiltrate U.S. corporate media outlets and shape U.S. media coverage in order to propagandize the domestic population. Indeed, intelligence agencies have a long, documented record of violating their charter by interfering in domestic politics through formal programs to manipulate U.S. media coverage. In 1974, The New York Times’ Seymour Hersh exposed that “the [CIA], directly violating its charter, conducted a massive, illegal domestic intelligence operation” which included “assembling domestic intelligence dossiers” and “recruiting informants to infiltrate some of the more militant dissident groups.” The Senate's Church Committee report in 1976 concluded that “intelligence excesses, at home and abroad, were not the 'product of any single party, administration, or man,”; rather, “Intelligence agencies have undermined the constitutional rights of citizens primarily because checks and balances designed by the framers of the Constitution to assure accountability have not been applied.” A 1977 Rolling Stone exposé by Carl Bernstein — entitled “The CIA and the Media” — revealed “more than 400 American journalists who in the past twenty-five years have secretly carried out assignments for the CIA" — including the most influential news executives in the country: William Paley of CBS, Henry Luce of Time Inc., Arthur Hays Sulzberger of the New York Times. Bernstein laid out how sweeping the CIA's commandeering of mainstream media outlets was: Some of these journalists' relationships with the Agency were tacit; some were explicit. There was cooperation, accommodation and overlap. Journalists provided a full range of clandestine services -- from simple intelligence gathering to serving as go-betweens with spies in Communist countries. Reporters shared their notebooks with the CIA. Editors shared their staffs. Some of the journalists were Pulitzer Prize winners, distinguished reporters who considered themselves ambassadors-without-portfolio for their country. Most were less exalted: foreign correspondents who found that their association with the Agency helped their work; stringers and freelancers who were as interested it the derring-do of the spy business as in filing articles, and, the smallest category, full-time CIA employees masquerading as journalists abroad. In many instances, CIA documents show, journalists were engaged to perform tasks for the CIA with the consent of the managements America's leading news organizations. The history of the CIA's involvement with the American press continues to be shrouded by an official policy of obfuscation and deception. . . . By far the most valuable of these associations, according to CIA officials, have been with The New York Times, CBS, and Time Inc. In 1996, the Senate Intelligence Committee issued a lengthy report entitled “CIA's Use of Journalists and Clergy in Intelligence Operations" after “the House of Representatives [took] a vote on the subject as to the prohibition of use of journalists and others by the CIA." In 2008, The New York Times’ David Barstow won a Pulitzer for exposing the Pentagon's secret plot to disseminate Defense Department talking points by placing former officials as “analysts" at each news network who, in secret, coordinated their claims. In 2014, The Intercept obtained the CIA's communications with journalists through a FOIA request and discovered that national security reporter Ken Dilanian routinely submitted his drafts about the CIA to agency officials before publication; his newspaper at the time, The Los Angeles Times, pronounced itself “disappointed” and said he may have violated the paper's rules, but he was promptly hired by the Associated Press and now covers the intelligence community for . . . NBC News. Revealingly, none of those multiple Congressional and media exposés deterred the CIA and related agencies from contaminating domestic media coverage. Over the last six years, the opposite happened: this tactic has accelerated greatly. U.S. security state services now not only shape but often control news coverage — not by clandestine tactics but right out in the open. Many of the top security state officials over the last two decades have been hired to deliver "news” for these two major corporate networks: former CIA Director John Brennan (NBC), former Homeland Security Secretary James Clapper (CNN), former Assistant FBI Director Frank Figliuzzi (NBC), former Homeland Security Advisor Fran Townsend (CNN), disgraced former FBI Deputy Director Andrew McCabe (CNN), former NSA and CIA Director Michael Hayden (CNN), and countless others. This career path from the Deep State to NBC/CNN is now so common that those who are fired in disgrace or resign immediately show up on their payroll. As but one illustrative example: on February 2, 2018, FBI official Josh Campbell wrote a self-serving op-ed in The New York Times flamboyantly announcing his resignation over alleged interference by Trump officials; two days later, CNN announced it had hired Campbell as a "law enforcement analyst,” where he continues to "report the news.” In 2018, the DOJ's Inspector General concluded that McCabe, while serving as former FBI Deputy Director, had lied to the Bureau about his role in the leaks; CNN then hired him. The reasons this is so dangerous are self-evident. Allowing the U.S. security state to shape the news converts media outlets into a form of state TV. As Politico's Jack Shafer wrote in 2018 under the headline "The Spies Who Came Into the TV Studio": Standard journalistic contributors—reporters, anchors, editors, producers—pursue the news wherever it goes without fear or favor, as the famous motto puts it. But almost to a one, the TV spooks still identify with their former employers at the CIA, FBI, DEA, DHS, or other security agencies and remain protective of their institutions. This makes nearly every word that comes out of their mouths suspect. These security state agencies were created to lie and spread disinformation; allowing them to place their top operatives at news outlets obliterates even the pretense that there is any separation between them and corporate journalism. Worse, it requires these media outlets to pretend they are adversarially reporting on agencies which their own colleagues recently helped run. And, worst of all, it creates a massive conflict of interest whereby news “analysts” are commenting on stories in which they played central roles in their prior, often-very-recent life as a security state operative — as happened repeatedly during Russiagate when people like John Brennan were “analyzing” investigations for NBC News which they helped launch or of which they are targets. The New York Times, Dec. 23, 2019 To call all of this a conflict of interest is to gravely understate the case. It is an all-but-explicit merger between the security state and the corporate media. This latest NBC News article on Assange by former FBI Assistant Director Figliuzzi features all of these corrupt dynamics. MSNBC has been repeatedly promoting it. That is remarkable on its own: a so-called "news outlet” is cheering — indeed, salivating over — the Biden administration's attempt to criminalize Assange under “espionage” laws for the sin of reporting genuine documents showing all sorts of improper conduct by the agencies whose former operatives now staff that network. Given that press freedom groups in the West have uniformly condemned the prosecution of Assange as a grave threat to a free press, it is stunning to watch a corporation that claims to be in the news business cheering rather than denouncing it. But for the U.S. media, that is just ordinary corruption and subservience to the CIA: it is hardly rare to find "journalists” giddy over the prospect of Assange's ongoing imprisonment. What makes this new article particularly notable is that the FBI — when Figliuzzi was a senior official there — was directly involved in the attempt to investigate, frame and prosecute Assange. Yet the article, while identifying its analyst as “the assistant director for counterintelligence at the FBI, where he served 25 years as a special agent and directed all espionage investigations across the government,” makes no mention of his direct personal interest in the Assange prosecution. The primary claim of this article is an unhinged conspiracy theory. Figliuzzi asserts that extraditing Assange onto U.S. soil could endanger Donald Trump. The former FBI official barely conceals his glee over the prospect that Assange could somehow offer up dirt on Trump in exchange for a promise of leniency from prosecutors: If the Department of Justice plays its cards right, it can make the case precisely about those Russian government hacks and WikiLeaks' dissemination of the content of those hacks by offering a deal to Assange in return for what he knows. That’s what should worry Trump and his allies. . . . Assange may be able to close the gap between collusion and criminal conspiracy. Assange got the Democratic National Committee data dump from an entity long suspected to be a front for the GRU, the Russian military intelligence service. . . Assange may be able to help the U.S. government in exchange for more lenient charges or a plea deal. Prosecutions can make for strange bedfellows. A trade that offers a deal to a thief who steals data, in return for him flipping on someone who tried to steal democracy sounds like a deal worth doing. So, DOJ, if you’re listening… That Assange "stole data” is an absolute lie — not even the U.S. Government claims this — but NBC News has previously shown that it has no qualms about disseminating that particular lie. As for Figliuzzi’s belief that Assange possesses secret information about Trump's collusion with Russia over the 2016 election: that is nothing short of madness. Robert Mueller did not even attempt to interview Assange, precisely because the Special Counsel (Figliuzzi's former boss) obviously recognized that Assange had no information that would assist Mueller's investigation to determine whether Trump or his associates criminally conspired with Russia. If Assange really has information showing Trump criminally worked with the Kremlin, how can Figliuzzi justify that Mueller, during eighteen months of investigating that question, never even sought to speak to Assange? Moreover, if — as Figliuzzi fantasizes — Assange were in possession of some sort of smoking gun that Mueller never found but which would finally prove Trump's guilt on various crimes, why did Trump not pardon Assange? After all, if this twisted fantasy that NBC News is promoting had any validity — namely, Trump will be in big trouble once the U.S. succeeds in extraditing Assange to the U.S. to stand trial — why was it the Trump administration that brought these charges against Assange in the first place, and why would Trump not have pardoned Assange in order to prevent such a deal from taking place? None of what Figliuzzi is claiming has any evidence to support it or even makes any minimal sense. But as usual, that is no bar to NBC News and MSNBC publishing and aggressively promoting it. As I will never tire of pointing out, it is the corporate media outlets that most vocally denounce disinformation which are the ones guilty of spreading it most frequently and destructively. What makes this NBC article by Figliuzzi worse than standard media disinformation is that the former FBI official is writing about events in which he had direct personal involvement, without any disclosure of this fact. In 2011, Iceland’s Minister of the Interior, Ogmundur Jonasson, discovered that FBI agents had been deployed to his country under false pretenses. The FBI's counterintelligence unit, led by Figliuzzi, had claimed they were there because they wanted to help the Icelandic government stop an “imminent attack” by hackers into Iceland's government databases. That was a lie. As The New York Times reported two years later, the FBI went to Iceland in order to dig up dirt on Assange and WikiLeaks that would enable their prosecution. At the time, Assange was spending significant time in Iceland; he concluded that the country's broad press freedom and privacy protections, as well as support from several politicians, enabled him to work there safely. The FBI unit under Figliuzzi focused its counterintelligence efforts in Iceland on recruiting a very young WikiLeaks insider with a history of criminality and mental illness, Sigurdur Ingi Thordarson, in order to provide incriminating information about Assange. When Jonasson, the Interior Minister, discovered the truth, he expelled the FBI from his country, as The Times recounted: But when “eight or nine” F.B.I. agents arrived in August, Mr. Jonasson said, he found that they were not investigating an imminent attack, but gathering material on WikiLeaks, the activist group that has been responsible for publishing millions of confidential documents over the past three years, and that has many operatives in Iceland. . . . The F.B.I.’s activities in Iceland provide perhaps the clearest view of the government’s interest in Mr. Assange. A young online activist, Sigurdur Ingi Thordarson (known as Siggi), told a closed session of Iceland’s Parliament this year that he had been cooperating with United States agents investigating WikiLeaks at the time of the F.B.I.’s visit in 2011. . . The F.B.I. efforts left WikiLeaks supporters in Iceland shaken. “The paranoia,” [Parliament member Birgitta] Jonsdottir said, “is going to kill us all.” The FBI's counterintelligence efforts under Figliuzzi in Iceland succeeded. Thordarson became a key witness for the FBI in its efforts to prosecute Assange. Indeed, the pending indictment against the WikiLeaks founder — which is the basis for the Biden DOJ's demand that he be extradited from the U.K. — heavily relies on accusations from Thordarson (the indictment refers to him as "Teenager” and to Iceland as "NATO Country-1"). Even a cursory review of the indictment shows how central to the case against Assange are the allegations which the FBI induced Thordarson to make: "In September 2010, ASSANGE directed Teenager to hack into the computer of an individual formerly associated with WikiLeaks and delete chat logs containing statements of ASSANGE.” But in June of this year, Thordarson recanted his allegations against Assange. Speaking to the Icelandic newspaper Stundin, Thordarson confessed how he had been caught stealing money from WikiLeaks by forging an email in Assange's name and directing WikiLeaks’ funds to be sent to his personal account. He “saw a way out” of the pending criminal problem by helping the FBI in its hunt against Assange. Thus, "on August 23d, [Thordarson] sent an email to the US Embassy in Iceland offering information in relation to a criminal investigation,” and he then became the FBI's star witness. Providing the FBI with false allegations against Assange helped the FBI but did not help Thordarson much: he was shortly thereafter convicted on charges of “massive fraud, forgeries and theft on the one hand and for sexual violations against underage boys he had tricked or forced into sexual acts on the other.” Yet “Thordarson was sentenced in 2013 and 2014 and received relatively lenient sentences” as the judge reviewed his cooperation activities as well as his formal psychiatric diagnosis that he is a sociopath. Even after that lenient punishment, Thordarson continued to commit crimes, piling up numerous other criminal charges. That was when the FBI, eager to indict Assange, again saw an opportunity in Thordarson: In May 2019 Thordarson was offered an immunity deal, signed by [U.S. Deputy Attorney General Kellen S.] Dwyer, that granted him immunity from prosecution based on any information on wrongdoing they had on him. The deal, seen in writing by Stundin, also guarantees that the DOJ would not share any such information to other prosecutorial or law enforcement agencies. That would include Icelandic ones, meaning that the Americans will not share information on crimes he might have committed threatening Icelandic security interests – and the Americans apparently had plenty of those but had over the years failed to share them with their Icelandic counterparts. With Assange now behind bars based on the indictment he helped the FBI secure, Thordarson decided to come clean. He had lied to the FBI and fed them false incriminating information against Assange because he knew that would help shield him from accountability for his own crimes. In other words, at the heart of the FBI's case against Assange — one compiled by the FBI's counterintelligence operations under Figliuzzi before he went to NBC News — is a chronic criminal with a history of fraud, sexual assault against minors, and serious psychiatric illness. And he has now recanted his claims. If NBC News were a legitimate news operation, it would obviously bar Figliuzzi from “reporting on” or “analyzing” a major press freedom case in which the FBI was so intricately involved, and implicated, during his tenure there. But the opposite is true. Figliuzzi is obsessed with Assange's prosecution and extradition, talking about it often both on his social media account and on NBC and MSNBC platforms. Beyond the issue of journalistic ethics — which nobody should expect of NBC and MSNBC at this point — something more sinister is going on here. The Biden administration's aggressive pursuit of Assange's extradition, along with its demand that he be kept imprisoned while the judicial process is pending, has been denounced with increasing fervor by press freedom and civil liberties groups that are usually allies of the Democrats. That even includes the ACLU. Leaders from around the world, including on the left, have been strongly condemning the Biden administration. Other countries are now frequently holding up Biden's assault on press freedom, along with the British government, as a reason why those two countries lack credibility to sermonize about press freedom. This new argument pushed by NBC News and its former FBI operative Frank Figliuzzi — liberals should cheer Assange's prosecution because we can squeeze him once he is here to turn on and implicate Trump — seems like a barely disguised political ploy to protect the Biden White House from criticism. NBC News knows that liberals crave Trump’s prosecution above all, so trying to convince them that Assange's extradition could advance that — as false as that obviously is — would likely benefit the White House which NBC serves, by fortifying support among Trump-obsessed liberals or at least diluting opposition. But taken on its own terms, the argument now being promoted by NBC to justify Assange's extradition is deeply disturbing. What they are essentially arguing is that the entire prosecution is a pretext. Though justified based on Assange's alleged lawbreaking in connection with the 2010 publication by WikiLeaks of the Iraq and Afghanistan war logs, the real benefit, according to NBC, is the opportunity to pressure Assange to turn on Trump in connection with the 2016 election. In other words, they are keeping Assange imprisoned for years, and working to bring him to the U.S., because they believe they can force him with promises of leniency to offer up information they can use against Trump — just as the FBI manipulated the young, mentally unwell Icelandic teenager to offer false accusations against Assange. And that would also create the added incentive to treat Assange as abusively as possible to turn the pressure as high up as possible for him to implicate Trump. Indeed, on the day Assange was arrested in London, a smiling Sen. Joe Manchin (D-WV) all but proclaimed this to be the real purpose of the extradition ("he'll be our property and we can get the truth and the facts from him"): That the U.S.'s corporate newsrooms are now filled with former agents of the U.S. security state on their payrolls is one of the most significant and disturbing media developments in recent years. It means that dirty, scheming operatives like Frank Figliuzzi can now do their dirty work not in the shadows or in agencies known to be guilty for decades of this sort of treachery and lies, but under the cover of “respectable” media outlets. When Figliuzzi speaks — or when John Brennan or James Clapper or Andrew McCabe do — the lips of these media outlets are moving but the CIA and the FBI and the DOJ are the ones actually speaking. That has been true for decades, but at least they had the decency to maintain the pretense. That security state agencies have now dispensed with the formalities and control these news outlets so directly reveals the utter impunity with which they now operate, particularly in establishment liberal circles. That an FBI official who played a key role in concocting false accusations against Assange now "reports” or “analyzes” that very same case under the logo of NBC News says more about the institutional corruption of these news outlets than thousands of articles could ever get close to. To support the independent journalism we are doing here, please subscribe, obtain a gift subscription for others and/or share the article Tyler Durden Sun, 01/02/2022 - 18:00.....»»

Category: worldSource: nytJan 2nd, 2022

Biden Wants To "Woke" Up Your Doctor

Biden Wants To 'Woke' Up Your Doctor Authored by Wesley Smith,  op-ed via The Epoch Times, The Biden Administration wants to pay doctors to create office “anti-racism plans” that could soon bring full blown critical race theory into your examining room... What’s that you say? You didn’t hear about Congressional legislation to that effect? That’s because there is no such law. Rather, the idea was pushed quietly into implementation by the blob-like federal bureaucracy that exercises primary control over the details and minutia of federal law. Despite what you may have been taught in high school government class, federal statutes do not provide the specifics that will apply once a bill becomes law. Instead, legislation merely establishes a skeleton outline, usually directing the Secretary of this or that Department to write the details after the bill has passed through the arcane rule making process. In other words, the contemporary administrative state run by the executive branch has substantial quasi-legislative authority never dreamed of by our Founding Fathers. There are few limitations to rule making other than that the regulation must be relevant to, and consistent with, the governing statue. But laws are often so vaguely written, that isn’t difficult. Moreover, the promulgated rules are where the devil in the details of federal law is to be found. How do we know what has been proposed or promulgated by the bureaucrats? All rules—whether preliminary or finalized—are published in a gargantuan volume called the Federal Register. Oh good. That means we can just look them up, right? Well, sure: In theory. But good luck trying. Each year more than 70,000 pages of very small print are published in the FR. Imagine digging through that eye-glazing text! Talk about needles and haystacks. Yes, there is a modicum of societal input in rule making. But it is very indirect. When a new rule is proposed, time is allowed for public comments that—in theory and sometimes in fact—influence the bureaucrats who write and promulgate the rule. Bureaucrats may also attend meetings with “stake holders” about the contents of proposed rules. But like everything else in Washington, D.C., this administrative process is highly political. Whether commenters have any impact on the final rule usually depends on their political clout and/or whether they are allies of the sitting administration, not policy acumen. Needless to say, individual citizens rarely know what is going on, much less, have a meaningful chance to directly participate in the process. Alright, enough dismal civics. Here is what the new rules on Medicare payments to doctors—that begins on page 64996 of the 2021 FR and ends on page 66031—states about the anti-racism plan bonus: In Appendix 2—are your eyes rolling back in your head yet?—doctors are offered a percentage of their Medicare income “to create and implement an anti-racist plan.” Among other consequences, this means establishing an anti-racist bureaucracy within physicians’ offices (my emphasis):  “The plan should include a clinic-wide review of existing tools and policies, such as value statements or clinical practice guidelines, to ensure that they include and are aligned with a commitment to anti-racism and an understanding of race as a political and social construct, not a physiological one.” In other words, the rule states quite specifically that the plan isn’t about medicine. And it isn’t about science. Rather, it furthers naked ideology and insinuating very woke politics into the clinical setting. That isn’t all: “The plan should also identify ways in which issues and gaps identified in the review can be addressed and should include target goals and milestones for addressing prioritized issues and gaps …. The … eligible clinician or practice can also consider including in their plan ongoing training on anti-racism and/or other processes to support identifying explicit and implicit biases in patient care and addressing historic health inequities experienced by people of color.” Think of the money to be made by leftist anti-racist trainers and organizers, which is part of the point. Moreover, the call for “anti-racism” could be interpreted as calling for discrimination in medical settings against people who are not of color. For example, Ibram X. Kendi, the intellectual leader of the Anti-Racist Movement wrote in his book “How to Be an Anti-Racist,” “The only remedy to racial discrimination is antiracist discrimination.” This invidious thinking has seeped into the medical establishment. Consider a relevant advocacy column entitled “Advancing President Biden’s Equity Agenda,” published last April in the New England Journal of Medicine. “To promote equity,” psychiatrist Neil K. Aggarwal wrote, “the Biden administration should distribute resources differentially in order to benefit groups that are persistently disadvantaged.” That would be to pit some of us against others of us in our own doctor’s office. This obsession with differences—ever more thinly sliced—isn’t healthy. And it isn’t right. All patients should be treated equally. No patient should be considered “favored” or “disfavored.” Everyone should receive optimal care. But such equality isn’t within the value system that “anti-racism” generally—and the new rule, specifically—promotes. It is no surprise that the Biden administration has gone woke. But the real danger against true equality isn’t in the president’s speeches but in the power of the bureaucracy swamp. Indeed, what other “equity” landmines are being laid quietly within the hundreds of thousands of pages of the Federal Register? Today, the bureaucrats are offering doctors a bonus to enlist in the “anti-racism” cause. Tomorrow, they may make critical race theory mandatory in the medical office. And we probably won’t know until the deed is done. This much is sure: Pushing “equity” in healthcare is a prescription for tearing this country apart. Tyler Durden Sun, 01/02/2022 - 14:40.....»»

Category: blogSource: zerohedgeJan 2nd, 2022

CCP Extending "3 Warfares" Strategy Into Space: Expert

CCP Extending "3 Warfares" Strategy Into Space: Expert Authored by Andrew Thornebrooke via The Epoch Times, A Chinese robot trundles about in the dust. It collects rock samples, measures chemical compounds, and observes craters never before seen by humankind. It’s beyond the reach of U.S. sensors. It’s beyond the rule of international laws and norms. It’s on a mission. It’s on the dark side of the moon. The Chinese Communist Party (CCP) has been operating Yutu-2 on the far side of Luna since 2019. Ostensibly part of the CCP’s lunar exploration program, rovers such as Yutu-2 are preparing the way for the construction of a new robotic research base on the moon. That base, in turn, will prepare the way for a crewed moon landing and a new lunar base managed jointly by China and Russia. The exploration phase of this process, of which Yutu-2 is a part, is planned to extend through 2025 with six more missions conducted by China and Russia. Following that, construction on the base is expected to last until at least 2035, with full operational capacity being achieved by 2036. The ambition piques the interest of scientists, ever hungry for new knowledge about Earth’s only moon. The secrecy shrouding the project, however, unnerves strategists who don’t see this little rover as merely one small step for mankind, but as one giant leap for Chinese military capabilities. Indeed, some experts believe that Yutu-2’s lunar rock collection isn’t only a continuation of Sino–U.S. competition, but might actually provide the keys to victory in a future war. Space Is a Warfighting Domain Michael Listner is an attorney of a very peculiar sort. He specializes in space policy and has, for some years, led the publication of “The Précis,” a legal newsletter that examines the basis of space law and its ramifications for international policy in every field from business to national security. He says the CCP is extending its “Three Warfares” strategy into space. This vast new frontier will be central to the regime’s campaigns of media aggrandizement, the subject of psychological warfare, and, vitally, the centerpiece of new legal battles that will reshape the international order as China seeks to claim the United States’ global hegemon status for its own. The strategy, he said, is designed to undermine and perhaps defeat the enemy without firing a shot. “Space is a warfighting domain,” Listner said. “It’s going to be part of the struggle and it’s going to be part of a future conflict.” “They are fighting on all these fronts right now,” Listner added of the CCP’s three warfares strategy in space. “In fact, I really look at it as preparing the battlefield.” That effort to shape the battlefield, central to any military, is particularly meaningful to Chinese military strategists who, since at least the fifth century B.C., have studied the writings of the eminent philosopher of war Sun Tzu, who argued that preparing the battlefield was the means of mastering the enemy. As such, it’s feared that the Chinese regime will effectively ensure that should conflict break out, it has the strategic advantage by preparing a favorable legal landscape, positioning assets in orbit, and building alliances in its space operations. The reason for the continuation of this effort on the moon is simple enough: America can’t work without space. “The American dependence and reliance on space is almost absolute,” said Paul Crespo, president of the Center for American Defense Studies. “From communications to banking to air and ground travel and GPS, our economy, society, and military cannot survive without U.S. space dominance.” Crespo, a Marine veteran who served in the Defense Intelligence Agency, has spent years examining the CCP’s malign influence abroad and its efforts to degrade and undermine its adversaries through dual-use technologies and legal warfare. Both Crespo and Listner fear that the moon will be China’s next “nine-dash line,” and that it will be used to bend the rule of law to the CCP’s advantage, just as it has in the South China Sea. The Chinese regime claims about 85 percent of the disputed South China Sea demarcated by its nine-dash line, a claim that was rejected by a 2016 international tribunal. Several other countries also lay claim to parts of the waterway. Despite the ruling, Beijing has built military outposts on artificial islands and reefs in the region, and deployed coast guard ships and Chinese fishing boats to intimidate foreign vessels, block access to waterways, and seize shoals and reefs. Experts fear the CCP will use its moon and space infrastructure to similarly box out competition and control the happenings of the region, in violation of international laws and norms. “The CCP has proven it has no respect for international law or norms, and is willing to bully, threaten, coerce and push its way into any place it deems vital to its strategic goals,” Crespo said. “That’s crystal clear with its illegal expansion into, and claims on, most of the South China Sea.” “This certainly will be even more true for China in space where the norms are far less established and codified.” The United States’ response to CCP space adventurism has been mixed. During the administration of President Donald Trump, the nation took a hardline stance and sought to outrace the CCP to the moon. Indeed, the Artemis Accords were initially designed to guide those nations that were to partake in the Artemis Program, a U.S.-led effort to establish a base on the moon. Trump’s Space Policy Directive-1, likewise, sought to “lead an innovative and sustainable program of exploration with commercial and international partners to enable human expansion across the solar system and to bring back to Earth new knowledge and opportunities.” To accommodate these ambitions, NASA attempted to step up its original goal of establishing a moon presence from 2028 to 2024. That date was quickly pushed back to 2025, however. Since then, NASA has changed course again, and slated 2025 as the earliest date for a U.S. flight around the moon, but which won’t land on the moon. A Long March 5B rocket lifts off from the Wenchang launch site on China’s Hainan island on May 5, 2020. Another variant of the Long March rocket was used to get China’s hypersonic missile into orbit in July. (STR/AFP via Getty Images) Usurping the Advantage The moon race has the potential to revolutionize international relations more than any other facet of Sino–American competition. When it comes to dictating what the law is beyond the earth’s atmosphere, Crespo and Listner believe that who gets there first wins. “It’s all really about great power competition,” Listner said. “The general consensus about great power competition is who’s going to eventually make the rules in an international arena. In other words, who’s going to have the most influence in shaping what’s legal and what the worldview looks like in the next few decades.” Listner described the struggle between the United States and China for influence in shaping the world and its norms as one of competing visions, in which two radically different ways of understanding and operating in the world are being pitted against one another. That struggle, he said, is playing out in space. “Right now, there are two competing visions,” Listner said. “One is the Artemis Accords, which the Trump administration started.” “The Russian Federation and the People’s Republic of China countered with their own competing vision, called the International Lunar Research station.” The Artemis Accords, Listner said, are a framework for international cooperation regarding the exploration and use of Luna, Mars, and other astronomical objects. The effort is based largely on the U.N. Outer Space Treaty of 1967, and seeks to affirm peaceful cooperation, promote interoperability, and register objects in space with uniform standards. The Outer Space Treaty currently has 111 signatories, including China and Russia. The Artemis Accords, first signed in 2020, has 14 signatories; China and Russia didn’t sign, viewing the effort as a commercial agreement needlessly favorable to the United States. The International Lunar Research Station, on the other hand, is the CCP and Russia’s effort to wrest international space leadership away from the United States’ NASA, and champion a new, Eurasian order. Indeed, little Yutu-2 is just the first of seven exploratory missions planned by China and Russia, which will prepare the way for the construction of the base. That matters when the future of space dominance is on the line. “It’s about the competing view of what the rule of law is going to be and who’s going to make the rules on the lunar surface and in exploiting space,” Listner said. “Whoever gets there first and starts building will be the one who makes the rules.” To that end, Crespo warned that the CCP is attempting to reforge space in its own image, undercutting the United States’ ability to sustain itself not only as a world superpower, but possibly as a civilization. “Neutralizing our space dominance will severely hamper our ability to win any major conflict, and ultimately even our ability to maintain a stable, modern, functioning society,” he said. “If the Chinese move beyond simply neutralizing our dominance and gain clear space dominance themselves, that will become almost a fait accompli in terms of America losing its ability to remain a world power, and even simply an independent sovereign nation.” Listner said that it’s gray-zone conflict at its finest, and that the United States and China are engaged in war by any other name. “From the perspective of the PRC, we’re at war,” Listner said, referring to the People’s Republic of China. Chinese People’s Liberation Army HQ-9 surface-to-air missile launchers are seen during a military parade at Tiananmen Square in Beijing on Sept. 3, 2015. A modified version of this missile was used to shoot down a satellite in a test by China in 2007. (Greg Baker/AFP via Getty Images) The Lunar Threat That gray-zone conflict, in which nations engage in hostilities stopping somewhere short of opening fire, is in full swing in outer space. “Any manned Chinese and/or Russian base on the moon would provide them a significant strategic advantage militarily, legally, and economically,” Crespo said. In early December, Gen. David Thompson, the U.S. Space Force’s first vice chief of space operations, said that the CCP is launching attacks on U.S. space infrastructure “every single day.” These reversible attacks, in which U.S. satellite architecture or cyber systems are compromised temporarily, are largely understood to be a testing of the waters. That is, preparation for a real war. Thompson said in separate remarks that the Chinese regime is developing space capabilities at double the rate of the United States. Moreover, its growing array of platforms designed for space warfare is growing. “[The Chinese] have robots in space that conduct attacks,” Thompson said. “They can conduct jamming attacks and laser dazzling attacks. They have a full suite of cyber capabilities.” “If we don’t start accelerating our development and delivery capabilities, they will exceed us. And 2030 is not an unreasonable estimate,” he said. Such advancements point to weaknesses in existing laws such as the Outer Space Treaty, which many people erroneously believe bans the development of space weapons. “Conventional weapons in space aren’t banned by the Outer Space Treaty, as can be seen by the Russian Federation’s ASAT [Anti-satellite weapon] demonstration a few weeks ago,” Listner said. “However, nuclear weapons in certain circumstances are prohibited by the Outer Space Treaty.” Listner’s remarks refer to the recent demonstration by Russia of an ASAT missile that it used to explode a satellite in orbit. Critics accused Russia of putting the lives of astronauts at risk, as the thousands of pieces of debris could destroy space vehicles. The event was similar to an incident carried out by China in 2007. Indeed, the CCP is rapidly expanding its military capabilities as part of an all-out push to usurp military and commercial dominance from the United States. That effort is designed to provide the CCP with an overwhelming new blitzkrieg of military technologies worthy of science fiction. The effort includes the development of hypersonic weapons, electromagnetic pulse devices, new naval vessels capable of launching rockets into space, and a nuclear reactor to power space travel, reportedly 100 times more powerful than those planned by the United States. In all, the CCP plans to launch 10,000 satellites by 2030 in its efforts to topple U.S. space dominance. There are several ways in which the CCP could use the moon, or space assets more generally, to exploit weaknesses in its adversaries or further its weaponization efforts. Increased presence would allow China greater communication and control of its space assets, most notably satellite architecture, which is key to U.S. and allied GPS systems that the military depends upon. Experts have long argued that a preemptive strike on U.S. GPS systems would be China’s first move in a war, including one over Taiwan. Other potentialities are more hypothetical, such as the long-theorized use of a kinetic bombardment system that could leverage Earth’s gravitational pull against it. Such a system could effectively turn objects as simple as tungsten rods into weapons of mass destruction due to the velocity with which they would hit the earth. This would effectively allow a satellite- or moon-based system to throw heavy objects at the Earth with the destructive power of a meteor, a feat for which the proposed weapon has long been termed “Rods from God.” Though costlier than other systems, the idea for such a system has existed since the Cold War, and the Pentagon reportedly considered developing it in 2006 before pursuing hypersonic glide vehicle research instead. Listner said the CCP’s continued conquest of space was partially owed to the failure of U.S. and allied leaders to recognize fundamental differences in Western and Eurasian ways of conceptualizing the world and politics. “Fundamentally, we have to understand that the PRC and the Russian Federation do not think like the U.S. and Western nations,” Listner said. His comments reflected a growing consensus, recognized by new U.S. congressional reports, that the CCP is advancing a global campaign to champion Marxism as an alternative to American capitalism, and to supplant the United States as a global hegemon. To this end, the international community may like to play at lawmaking, such as is the case with the Artemis Accords, but the CCP has demonstrated a repeated unwillingness to adhere to such norms. “NGOs, peace groups, and disarmament groups believe the PRC and the Russians think like us when they don’t,” Listner said. “It’s called ‘mirror thinking,’ and it’s a very, very dangerous trap to play into.” This picture released on Jan. 11, 2019, by the China National Space Administration (CNSA) via CNS shows the Yutu-2 moon rover, taken by the Chang’e-4 lunar probe on the far side of the moon. (China National Space Administrat/AFP via Getty Images) A Base for Whom? Perhaps nowhere is this trap more apparent than in the CCP’s so-called dual-use policy. The CCP publicly denies that its space systems and projects, including its moon plans and satellite, are used for military purposes. For instance, it characterized its grabber satellite as a means of cleaning space junk, and its hypersonic missile test as a reusable spacecraft. Critics of the CCP point out that the ambiguity about whether such technology is ultimately civilian or military in nature is a feature of dual use. Dual use is the practical realization of the CCP’s policy of “civil-military fusion,” aimed at erasing all barriers between private and public life to ensure that all civilian technologies also advance Chinese military dominance. The rockets used to launch Yutu-2 to Luna are one such example. The same type of rocket was used to launch the CCP’s new hypersonic weapons system, which U.S. leaders fear is a nuclear first-strike weapon. CCP leaders said that the test was for the benefit of its space program. “Virtually everything that enables a country to launch objects into space is indistinguishable from intercontinental ballistic missiles or hypersonic weapons,” Crespo said. “For China, that distinction is fairly moot.” Crespo said that that ambiguity is part of the program, designed to obscure whether the military or civilian function of any project was intended to be dominant. Such ambiguity makes a difference on the moon, where all Chinese taikonauts are in the employ of the Chinese military. “Any moon base serves scientific purposes while also clearly providing China a strategic lunar presence that will need to be defended, and can be used for surveillance, reconnaissance or military attacks of all types against satellites and other space assets,” Crespo said. “No lunar base will be purely civilian to the CCP.” A World to Gain Space has been described by researcher Paul Szymanski as “the most obscure battlefield.” Its obscurity doesn’t, however, diminish its centrality to the future of nations. To the contrary, the economic, military, and political ramifications of space, and of the control of Luna, in particular, are nigh impossible to overstate. “Space is America’s greatest asset and its greatest vulnerability,” Crespo said. “The Chinese and Russians see it as our Achilles heel.” To that end, one may consider the strategic value of space as the foremost point of CCP ambitions. It is the gateway through which one growing power might leapfrog a global hegemon to dictate the future of earthly affairs. Indeed, it isn’t an overstatement to say that the moon is to the CCP what the Alps were to Hannibal. Should it be taken, the rest may fall like dominoes. “The stakes are that high,” Crespo said. “Whoever controls space may control the world.” Tyler Durden Sat, 01/01/2022 - 23:10.....»»

Category: dealsSource: nytJan 1st, 2022