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Do Kwon: ‘I Am Heartbroken’ Over Pain Caused by UST Collapse

The admission comes after the stunning demise of the Terra blockchain’s flagship project......»»

Category: forexSource: coindeskMay 13th, 2022

The Real Reasons Behind the Crypto Crash, and What We Can Learn from Terra’s Fall

UST's downfall could have short-term and long-term ripple effects, especially as skeptical legislators like Elizabeth Warren survey the damage Crypto markets are in freefall this month—and their struggles have been gravely exacerbated by the demise of a $60 billion project that critics are calling a Ponzi scheme. The project in question is TerraUSD (UST), a stablecoin pegged to the U.S. dollar that its supporters hoped would upend traditional payment systems across the world. But it was wiped out in the span of days when investors panicked and tried to pull out their money, causing a vicious, self-enforcing bank run. The crash bankrupted many investors and pulled down the entire crypto market with it: over $400 billion in value was wiped out in terms of crypto market capitalization. [time-brightcove not-tgx=”true”] “This is among the most painful weeks in crypto history & one we’ll reckon with for a long time to come,” Jake Chervinsky, the head of policy at the DC-based lobbying firm Blockchain Association, wrote on Twitter. While Terra investors were the ones most immediately hurt, its downfall could have both short-term and long-term ripple effects for crypto and beyond, especially as skeptical legislators and regulators survey the damage. “People have lost their life savings through crypto investments, and there aren’t enough protections in place to safeguard consumers from these risks,” Massachusetts Senator Elizabeth Warren wrote in a statement to TIME. “We need stronger rules and stronger enforcement to regulate this highly volatile industry.” Here’s what happened, and what lies in store following the debacle. What happened, exactly? Terra’s rapid rise and fall can be difficult to explain succinctly without any prior knowledge of the blockchain. In fact, many of its boosters hid behind obfuscation and jargon to rebut some of its obvious flaws. Here’s a brief explanation. Terra is its own blockchain, just like Bitcoin or Ethereum. Its foremost product is the UST stablecoin, which is pegged to the U.S. dollar. Stablecoins are used by crypto traders as safe havens for when markets in DeFi (decentralized finance) get choppy: instead of converting their more volatile assets into hard cash, which can be expensive and trigger tax implications, traders simply trade them for stablecoins. Some stablecoins derive their value from being fully backed by reserves: if investors decide they ever want out, the stablecoin’s foundation should theoretically have enough cash on hand to repay all of them at once. UST, on the other hand, is an algorithmic stablecoin, which relies upon code, constant market activity, and sheer belief in order to keep its peg to the dollar. UST’s peg was also theoretically propped up by its algorithmic link to Terra’s base currency, Luna. For the last six months, investors have been buying UST for one main reason: to profit off a borrowing and lending platform called Anchor, which offered a 20% yield to anyone who bought UST and lent it to the protocol. When this opportunity was announced, many critics immediately likened it to a Ponzi scheme, saying it would be mathematically impossible for Terra to give such a high return to all of their investors. Terra team members even acknowledged that this was the case—but likened the rate to a marketing spend to raise awareness, in the same way that Uber and Lyft offered severely discounted rides at the beginning of their existence. But some blockchain experts say that last week, wealthy investors pulled off a maneuver in which they borrowed huge amounts of Bitcoin to buy UST, with the intention of making huge profits when the value of UST fell, otherwise known as short-selling. This caused UST to depeg from the dollar. A bank run ensued, with investors who had earned interest via Anchor scrambling to get out the door before it was too late. Their activity caused the linked currency Luna to also crash in what is known as a “death spiral.” As of now, UST is worth 12 cents, and Luna is worth fractions of a penny after being worth as much as $116 in April. The life savings of many Terra and Luna investors vanished in a matter of days. The r/Terraluna subreddit filled with people opening up about their mental health issues and contemplating suicide. “I’m going through some of the darkest, most severe mental pain of my life. It still doesn’t seem real that I lost $180,000,” one poster wrote. Terra dragged down Bitcoin and the whole crypto market Before Terra’s crash, cryptocurrency values were already on the decline, due in part to the Federal Reserve raising its interest rates. (They did so to stop inflation, which has caused people to spend less money.) But UST’s crash put another dent in the overall market, most centrally because Terra creator Do Kwon had bought billions worth in Bitcoin as a safeguard for UST. When he and the Luna Foundation Guard deployed more than $3 billion to defend the peg, in doing so he caused downward pressure on the market, causing other large investors to sell off their Bitcoin shares. Bitcoin hit its lowest point since December 2020, and Kwon’s ploy to save UST was unsuccessful. “The way these algorithmic stablecoins are designed, they have this upward force during bull markets, which is how they get so popular,” says Sam MacPherson, an engineer at MakerDAO and the co-founder of the software design company Bellwood Studios. “But the same forces act in reverse during bear markets and expose their fundamental flaws. So that is eventually what triggered [the crash].” The ripple effects were felt throughout the crypto ecosystem. Because firms sold around $30,000 of Ether in their own attempt to defend UST’s peg, Ether also plunged below $2000 for the first time since July 2021. As many investors tried to cash out their Ethereum-based stablecoins, their sheer number of transactions caused Ethereum’s transaction fees to spike, causing people to forfeit even more money. Coinbase, one of the crypto world’s biggest and most mainstream companies, slumped 35% last week. And the NFT ecosystem plunged 50% over the last seven days by sales volume, according to Cryptoslam. The cumulative effect was the loss of hundreds of billions of dollars across the ecosystem. Many worry that Terra’s crash is the first domino precipitating a long-foretold “crypto winter,” in which mainstream investors lose interest and values remain low for months.“ I suspect some cryptocurrencies will be worthless and that capital investment in the space will slow to a crawl as investors nurse their losses, much as we saw in the Internet bubble,” Bloomberg’s Edward Harrison wrote. So, what could happen next as a result of the crash? Regulations could tighten Stablecoins have long been drawing the scrutiny of regulators. Congress held a hearing weighing their risks and benefits in December. The same month, President Biden’s working group called for “urgent” action to regulate them. Terra’s crash gives even more ammo to regulators who argue that the space needs to be roped under government control. On May 12, Treasury Secretary Janet Yellen called for “comprehensive” regulations of stablecoins, saying that while the current crash is too small to threaten the whole financial system, stablecoins are “growing very rapidly. They present the same kinds of risks that we have known for centuries in connection with bank runs.” Hilary Allen, a professor at American University Washington College of Law who testified about the risks of stablecoins at the congressional hearing in December, says that the fallout of the Terra crash gives us a glimpse of what could be in store should crypto move toward the mainstream without regulation. “In a few years time, something like this could have many more pathways to cause broader harm, especially if the banks continue to get closer to this space,” she says. “I think it’s critical that regulators and policymakers see this moment as a time to put up whatever firewall they can between the traditional financial system and DeFi.” Massachusetts Representative Jake Auchincloss tells TIME that he’s in the process of drafting legislation requiring stablecoins to be federally audited. Auchincloss doesn’t seek to ban stablecoins, as he believes they could play a role in “keeping the U.S. dollar as the world’s reserve currency.” But he hopes to bring stablecoins under the purview of a federal bureau like the Comptroller of the Currency; to make sure stablecoin issuers can prove they have 90 days of liquid reserves; and to explore the idea of mandating that they provide insurance for customers. “We’re going to let private sector actors make their own risk-reward decisions, and we’re going to empower the federal government to ensure that there’s no systemic risk forming from the sector,” he says. Senator Warren has been one of the most vocal public detractors of crypto, and took Terra’s collapse as evidence for why regulators need to “clamp down” on stablecoins and DeFi “before it is too late.” Across the Atlantic, the European Commission is considering implementing a hard cap on the daily activity of large stablecoins, according to Coindesk. Much of the crypto world, meanwhile, seems to have become resigned to the reality of incoming regulation. “A lot of lives have been ruined. The rest of the crypto ecosystem needs to be open to working with regulators such that we can deter these types of situations from happening in the future,” MacPherson says. Boundary-pushing stablecoins might be over For many years now, ambitious blockchain developers have embarked upon the quest of creating a functional and safe algorithmic stablecoin, in the hopes that they might be more resistant to inflation than reserve-backed stablecoins and less susceptible to governmental oversight or seizure. But all of them eventually lost their peg and failed. UST, for a few months, was the medium’s crowning success story—and now is its biggest failure. Its crushing defeat will cast a long shadow over any developer that tries it next: venture capital firms and investors will likely be much more leery of jumping into similar models. Two other boundary-pushing stablecoins, Frax and magic internet money (MIM), saw massive drops in their market caps last week despite holding their peg to the dollar. “I think this has rightly destroyed any faith in the algorithmic stablecoin model,” Allen says. “It’s quite possible after Terra, we might never see them again—although I never say never when it comes to crypto.” Over the last week, many leaders in the crypto community have scrambled to distance UST from other types of stablecoins, arguing that reserve-backed stablecoins are comparatively secure and should be allowed to continue to flourish with minimal regulation. Chervinsky, at the Blockchain Association, wrote on Twitter that UST was “in a category of its own,” compared to other models that are “very stable and reliable.” Matt Maximo, a researcher at the crypto investor Grayscale Investments, wrote to TIME in an email that UST’s crash could lead to more demand for dollar-backed or overcollateralized stablecoins. Allen, however, argues that reserve-backed stablecoins still carry risk. “The best analogy with these reserve stablecoins is with money market mutual funds,” she says, referring to a type of fund whose failure helped trigger the 2008 financial crisis. “And those have had runs and have been bailed out.” (The economics journalist Jacob Goldstein made the same comparison in TIME’s Future of Money issue in October.) Venture capital may stop pouring money into crypto Over the past couple years, an astonishing amount of money has flown into the crypto space via venture capital firms, perhaps most notably from Andreessen Horowitz. Terra itself was the beneficiary of a slew of brand-name investors, including Pantera Capital and Delphi Digital. UST’s crash could raise mistrust on both sides. “It is likely that many of the institutions that have invested in the space may see significant short-term losses, resulting in a slowdown in venture investing,” Maximo writes to TIME. Chris McCann and Edith Yeung, general partners at the crypto-focused VC firm Race Capital, told Bloomberg this week that they had heard of deals falling apart, being repriced, or even founders getting “ghosted” by potential investors. MacPherson, on the other hand, turned the blame for Terra’s crash in part onto the VC firms that lent their institutional trust to the perilous project. “I think they should take some responsibility with how they’ve ruined some of these regular folks who invested in UST not knowing the de-peg risk,” he says. “Some of the [firms] made a lot of money off this, and I think they should compensate those who have lost.” At the moment, Terra’s major investors are being forced to decide whether to help bail the project out or cut and run. Many of them have been awfully quiet over the last week. Michael Novogratz, the billionaire founder and CEO of Galaxy Digital who got a giant Luna shoulder tattoo in January, has not tweeted since May 8. A representative for Lightspeed Venture Partners, a major crypto-focused firm that invested $250,000 in the Luna token, wrote that they remained committed to the space. “Lightspeed has been investing in blockchain for over 8 years. We see this as a computing paradigm shift that is bigger than the ebb and flow of the short term price of Bitcoin. We are doubling down, specifically in infrastructure, DeFi and emerging use cases,” they wrote. The hype over decentralized finance may be slowing Much of the promise of crypto lies in its decentralized nature: that its value doesn’t derive from manipulable controlling authority like a bank or a government, but rather sleekly-designed code and network effects. This week, some crypto enthusiasts have argued that Terra’s crash was a successful stress test for this hypothesis: that Bitcoin’s perseverance amid such a giant sell-off proves its durability. But Terra’s crash did reveal many centralized pressure points in the ecosystem, which, if they didn’t break, at least bent significantly. While there’s no CEO of crypto, one charismatic founder—Terra’s Do Kwon—was able to single handedly create a project that then erased hundreds of billions of dollars in value. He then used his position of power to defend his coin in the same way that the Federal Reserve might, in turn crushing the entire market. Kwon did not immediately respond to a request for comment. The attack showed the vulnerability of Curve pools—decentralized exchanges in which prices can shift quickly due to whales exiting or entering them—and Binance, the world’s largest cryptocurrency exchange, which did not have deep enough liquidity to sustain the massive amounts of UST entering circulation. In fact, the Terra saga shows that blockchain’s decentralized nature allows bad actors to have an outsized impact on the system. But many enthusiasts say that events like this actually help weed out those trying to take advantage of the system, and will lead to a more robust and more educated user base going forward. “The permissionless nature of the blockchain means that we can’t prevent it,” MacPherson says. “But I think we should do a better job of informing the public what the risks are.” Ponzi schemes might find fewer takers… or not Whether the debacle sticks in people’s minds as a learning experience is another question entirely. On Thursday, the controversial crypto entrepreneur Justin Sun announced an algorithmic stablecoin with 40% APR for lenders. Galois Capital, in a snarky response, tweeted: “This industry being a self-regulating one requires that learning happen. The results were mixed.” It seems that there are still plenty of crypto investors who will accept extremely high risk, so long as the prospect of extremely high riches remains......»»

Category: topSource: timeMay 17th, 2022

Bill Hwang Released After Posting $100 Million Bail, Says He "Lost His Passport"

Bill Hwang Released After Posting $100 Million Bail, Says He "Lost His Passport" Update (3:30pm ET): Bill Hwang may have blown through tens of billions of personal money, but he still had at least $100 million left, because that's how much he just paid to post bail and be freed after pleading not guilty. This means only one thing: Hwang is about to get on a private jet (conveniently, he lives just 10 minutes away from Teterboro where he can find a plethora of one way tickets to purchase) and next week's megaparty featuring Hwang and Jho Low will be superlit. In his first appearance since being arrested at 6 a.m. Wednesday, Hwang agreed to fork over $5 million in cash and pledged two properties including his personal home to secure his bond, Bloomberg reported. Wearing a face mask, green shirt and tan pants, Hwang agreed not to travel outside of the New York-New Jersey-Connecticut area. Hwang told prosecutors that he lost his passport, so his wife will surrender her passport instead, Bloomberg reports. His co-defendant, Chief Financial Officer Patrick Halligan, also pleaded not guilty and will be freed on $1 million bail and have limited travel. Both men will be released Wednesday. They are due back in court in lower Manhattan on May 19. The size of Hwang's bail matches some of the more high-profile white-collar cases of the past year. Trump ally Tom Barrack was freed from jail for $250 million and Nikola Corp. founder Trevor Milton was released for $100 million. While those levels are high, the highest U.S. bail is believed to be $3 billion, set in 2003 by a Texas judge for real estate heir Robert Durst, after he already jumped bail once. An appeals court later slashed the amount to $450,000. In addition, Galleon Group LLC’s Raj Rajaratnam was freed on $100 million bail in 2009 and junk bond king Michael Milken faced a quarter-billion dollar demand in 1989. Bernie Madoff’s bail was set at $10 million and he struggled to meet it, unable to find four people to co-sign for him. And while Bill - passport in tow - is about to flee, one of his accomplices is about to get a knock on the door. According to Bloomberg, as Bill Hwang’s Archegos Capital Management piled up billions in an attempt to squeeze shorts in a handful of highly shorted names, he coordinated trades with an old acolyte atop another hedge fund, according to U.S. prosecutors. Sometimes Hwang allegedly enlisted his help to sidestep bank policies threatening to end the buying spree. Well, according to Bloomberg, that mystery fund manager, identified only as “Adviser-1” in Hwang’s indictment unsealed Wednesday, is Tao Li, the head of Teng Yue Partners, a New York-based hedge fund that oversaw $4 billion as of last year, according to people with knowledge of the investigation. Li and Teng Yue haven’t been accused of wrongdoing by U.S. authorities. Teng Yue didn’t respond to messages seeking comment. Hwang was arrested Wednesday on charges of fraud for allegedly manipulating markets and deceiving banks that lost billions of dollars. Lawrence Lustberg, an attorney for Hwang, said his client is “entirely innocent.” Bloomberg previously reported that by January of last year Li had taken an intense interest in GSX, amassing a position that was unusually big even among Teng Yue’s concentrated bets. At one point that month, as the stock rocketed, GSX accounted for about 40% of the fund’s portfolio, according to people familiar with the holdings. GSX later changed its name to Gaotu Techedu Inc. While we doubt that Toi won't be accused for long, many were relieved (or maybe disappointed) to find out that this mystery accomplice was not Cathie Wood, head of the infamous ARK Invest, and who we already knew was quite close with Hwang. * * * After the spectacular collapse of Archegos Capital Management, the SEC announced last October that they were investigating whether the firm engaged in market manipulation. On Wednesday, owner Bill Hwang and his former CFO, Patrick Halligan, were arrested at their homes and charged with racketeering conspiracy, securities fraud and wire fraud in connection with a scheme to manipulate the share prices of public companies in order to boost profits, according to Bloomberg. They said the plan, which relied heavily on leverage, helped pump up the firm’s portfolio from $1.5 billion to $35 billion in a single year. -Bloomberg Bill Hwang's RIDICULOUS year, as officially documented by the U.S. DOJ: Hwang's personal fortune grew from $1.5 bln to **$35 billion** within a year. The total size of Archegos's market position with the use of leverage increased from $10 billion to **$160 billion** at its PEAK. pic.twitter.com/7jmL51SgjU — Sridhar Natarajan (@sridinats) April 27, 2022 According to the 40-page indictment, Hwang engaged in a "fraudulent scheme" that included "interlocking deceptive acts and misconduct, through false and misleading statements to security-based swap ("SBS") counterparties and prime brokers and manipulative trading designed to artificially move the market, which, in tandem, increased Archegos’s assets under management from around $4 billion to over $36 billion in just under six months." From March 2020 until its collapse in March 2021, Archegos, at Hwang’s direction, underwent a period of rapid and exponential growth, achieved largely through the entry into SBSs with about a dozen Counterparties, which subjected Archegos to significant exposure to rising and falling share prices of the issuers referenced in its SBSs. Archegos’s growth thus presented the firm with a predicament. To continue growing, and otherwise maintain the gains it had achieved through its ramp-up of exposures, Archegos needed to ensure that (1) the value of those exposures would continue to appreciate, and (2) its Counterparties would continue to extend credit margin and trading capacity necessary for Archegos to enter into even more SBSs. In order to overcome this issue, Archegos "chose not to rely on ordinary market forces," and instead "engaged in a brazen scheme to manipulate the market for the securities of the issuers that represented Archegos’s top 10 holdings" by purchasing both securities and SBSs related to those issuers. Archegos, through Hwang and Tomita, effected this scheme by dominating the market for its Top 10 Holdings, as well as by “setting the tone” (i.e., engaging in large pre-market trading), bidding up prices by entering incrementally higher limit orders throughout the trading day, and “marking the close” (i.e., engaging in large trading in the last 30 minutes of the trading day) and by other non-economic trading, all with the goal of artificially inflating the share prices of its Top 10 Holdings. To fuel the alleged manipulation, Archegos used margin extended by counterparties - which Hwang and crew 'deliberately misled', because had they answered truthfully after they began asking questions, it "would have led Archegos to exhaust the finite trading resource that its Counterparties provided." As part of the scheme, Archegos knowingly provided these Counterparties with false assurances concerning its portfolio composition, its concentrated exposure, and its liquidity  profile. As Archegos intended, these deceptions fraudulently convinced its Counterparties that Archegos’s overall positioning was less concentrated and more liquid than it actually was. These deceptions induced Archegos’s Counterparties to continue to transact with it and extend leverage beyond what the Counterparties’ risk tolerance would have otherwise permitted had they known the truth – thus allowing Archegos to continue to grow its positions and, thereby, drive up and sustain the stock prices of the Top 10 Holdings. Eventually, the weight of Defendants’ fraudulent and manipulative scheme was too much for Archegos to bear, and over the course of less than a week in late March 2021, the house of cards collapsed. Price declines in some of Archegos’s Top 10 Holdings triggered significant margin calls that Archegos was unable to meet. In turn, without its trading activity to artificially inflate the prices of the Top 10 Holdings, those stock prices collapsed. And, Archegos’s subsequent default resulted in billions of dollars in credit losses among its Counterparties and significant losses to the market participants who invested in the stocks at inflated prices. Hwang's plan was to spark massive rolling short squeezes. He was inspired by SoftBank's gamma squeeze in August 2020 and starting Sept 2020 used tens of billions in TRS to bid up and squeeze the most heavily shorted names. Only problem is by the end he had nobody to sell to. pic.twitter.com/n7ICkpW4Bf — zerohedge (@zerohedge) April 27, 2022 As a reminder, Archegos amassed a concentrated portfolio of stocks well in excess of $100 billion by using borrowed money in the form of TRS, which kept the exposure on the books of the various prime brokers working with Archegos, thus allowing Hwang to hide his full exposure. His funded imploded in March as some of the stocks tumbled, triggering margin calls from banks, which then dumped Hwang’s holdings. The pain was especially acute for the fund's prime brokers such as Credit Suisse, Nomura and Morgan Stanley, who collectively lost more than $10 billion, prompting internal investigations and the forced departures of senior executives. Remember when we used to speculate about where all the buying power was coming from? pic.twitter.com/TwDfcLSw9B — FlowPoint Partners, LLC (@cppinvest) April 27, 2022 Credit Suisse came under fire last May for the paltry fees they received from Archegos, which FT said at the time "raises further questions about the risks the lender was prepared to shoulder in pursuit of relationships with ultra-wealthy clients," adding that "the low level of fees and high risk exposure have caused concern among the board and senior executives, who are investigating the arrangement, according to two people with knowledge of the process." It also caused a flood of layoffs and terminations as the bank belatedly looked at its books and realized just how massive its exposure had been. As Risk.net first reported, Credit Suisse demanded a margin of only 10% for the equity swaps it traded with Archegos and allowed the family office 10-times leverage on some transactions. That was about double the leverage offered by fellow prime broker Goldman Sachs, which took minimal losses when unwinding its positions. In 2012, Hwang pleaded guilty to insider trading in Chinese bank stocks, and paid $44 million to settle the SEC's charges when he was head of Tiger Asia Management and Tiger Asia Partners. Hwang shorted three Chinese bank stocks based on insider information they received in private placement offerings. Tiger Asia became one of the largest Asia-focused hedge funds after its 2001 founding - running more than $5 billion at its peak. It was dealt a major blow in 2008 after Volkswagen AG's share price savaged short sellers. Hwang is a former protégé of hedge-fund titan Julian Robertson, who founded Tiger Management in 1980, which as the Wall Street Journal reports, turned $8.8 million into nearly $22 billion. Several investors trained by Robertson became known as the "Tiger cubs." I dont think Hwang will just "carry on " Julian pic.twitter.com/WaYn1Ssg3L — Marc Cohodes (@AlderLaneEggs) April 27, 2022 More on Hwang's indictment: According to the complaint, once Archegos would approach 5% position in a stock, Bill Hwang would allegedly require any additional exposure be limited to total return swap to avoid any public disclosures — Rebecca Jarvis (@RebeccaJarvis) April 27, 2022 The central aim of Bill Hwang/ Archegos was to control the price and artificially increase the value of securities in Archegos portfolio, according to the charges these securities included the following stocks: pic.twitter.com/iwWOSYMgTI — Rebecca Jarvis (@RebeccaJarvis) April 27, 2022 According to charges, Hwang and others working at Archegos would routinely buy/sell more than 10-15% of a stock’s daily trading volume knowing this would influence the price. — Rebecca Jarvis (@RebeccaJarvis) April 27, 2022 And read the entire indictment below: Tyler Durden Wed, 04/27/2022 - 15:50.....»»

Category: personnelSource: nytApr 27th, 2022

Bill Hwang Arrested: Archegos Owner Charged With Racketeering, Securities And Wire Fraud

Bill Hwang Arrested: Archegos Owner Charged With Racketeering, Securities And Wire Fraud After the spectacular collapse of Archegos Capital Management, the SEC announced last October that they were investigating whether the firm engaged in market manipulation. On Wednesday, owner Bill Hwang and his former CFO, Patrick Halligan, were arrested at their homes and charged with racketeering conspiracy, securities fraud and wire fraud in connection with a scheme to manipulate the share prices of public companies in order to boost profits, according to Bloomberg. They said the plan, which relied heavily on leverage, helped pump up the firm’s portfolio from $1.5 billion to $35 billion in a single year. -Bloomberg Bill Hwang's RIDICULOUS year, as officially documented by the U.S. DOJ: Hwang's personal fortune grew from $1.5 bln to **$35 billion** within a year. The total size of Archegos's market position with the use of leverage increased from $10 billion to **$160 billion** at its PEAK. pic.twitter.com/7jmL51SgjU — Sridhar Natarajan (@sridinats) April 27, 2022 As a reminder, Archegos amassed a concentrated portfolio of stocks well in excess of $100 billion by using borrowed money in the form of TRS, which kept the exposure on the books of the various prime brokers working with Archegos, thus allowing Hwang to hide his full exposure. His funded imploded in March as some of the stocks tumbled, triggering margin calls from banks, which then dumped Hwang’s holdings. The pain was especially acute for the fund's prime brokers such as Credit Suisse, Nomura and Morgan Stanley, who collectively lost more than $10 billion, prompting internal investigations and the forced departures of senior executives. Remember when we used to speculate about where all the buying power was coming from? pic.twitter.com/TwDfcLSw9B — FlowPoint Partners, LLC (@cppinvest) April 27, 2022 Credit Suisse came under fire last May for the paltry fees they received from Archegos, which FT said at the time "raises further questions about the risks the lender was prepared to shoulder in pursuit of relationships with ultra-wealthy clients," adding that "the low level of fees and high risk exposure have caused concern among the board and senior executives, who are investigating the arrangement, according to two people with knowledge of the process." It also caused a flood of layoffs and terminations as the bank belatedly looked at its books and realized just how massive its exposure had been. As Risk.net first reported, Credit Suisse demanded a margin of only 10% for the equity swaps it traded with Archegos and allowed the family office 10-times leverage on some transactions. That was about double the leverage offered by fellow prime broker Goldman Sachs, which took minimal losses when unwinding its positions. In 2012, Hwang pleaded guilty to insider trading in Chinese bank stocks, and paid $44 million to settle the SEC's charges when he was head of Tiger Asia Management and Tiger Asia Partners. Hwang shorted three Chinese bank stocks based on insider information they received in private placement offerings. Tiger Asia became one of the largest Asia-focused hedge funds after its 2001 founding - running more than $5 billion at its peak. It was dealt a major blow in 2008 after Volkswagen AG's share price savaged short sellers. Hwang is a former protégé of hedge-fund titan Julian Robertson, who founded Tiger Management in 1980, which as the Wall Street Journal reports, turned $8.8 million into nearly $22 billion. Several investors trained by Robertson became known as the "Tiger cubs." I dont think Hwang will just "carry on " Julian pic.twitter.com/WaYn1Ssg3L — Marc Cohodes (@AlderLaneEggs) April 27, 2022 More on Hwang's indictment: According to the complaint, once Archegos would approach 5% position in a stock, Bill Hwang would allegedly require any additional exposure be limited to total return swap to avoid any public disclosures — Rebecca Jarvis (@RebeccaJarvis) April 27, 2022 The central aim of Bill Hwang/ Archegos was to control the price and artificially increase the value of securities in Archegos portfolio, according to the charges these securities included the following stocks: pic.twitter.com/iwWOSYMgTI — Rebecca Jarvis (@RebeccaJarvis) April 27, 2022 According to charges, Hwang and others working at Archegos would routinely buy/sell more than 10-15% of a stock’s daily trading volume knowing this would influence the price. — Rebecca Jarvis (@RebeccaJarvis) April 27, 2022 Tyler Durden Wed, 04/27/2022 - 08:07.....»»

Category: personnelSource: nytApr 27th, 2022

Deflation Next? Will The Bullwhip Do The Fed"s Job On Inflation

Deflation Next? Will The Bullwhip Do The Fed's Job On Inflation By Craig Fuller of FreightWaves, The only thing surprising about the freight market slowdown is the speed at which it’s unfolding. The supply chain “bullwhip effect” is both predictable and expected. The surge of inventories and declining freight costs/capacity imbalances will be deflationary. The trucking market has slowed. Demand for trucks usually surges during the Spring, but this year, demand for truckload freight has broken out of this typical seasonal pattern. Outbound Tender Volume Index (OTVI) is an index which measures the volume of truckload order requests in the contract truckload market. The OTVI chart shows year over year activity from 2018 to this year. The bullwhip effect is something every supply chain 101 student learns about – the idea that upstream providers overproduce in reaction to a one-time demand shock. What is the bullwhip effect? According to the Chartered Institute of Procurement and Supply, the bullwhip effect “is defined as the demand distortion that travels upstream in the supply chain from the retailer through to the wholesaler and manufacturer due to the variance of orders which may be larger than that of sales.” The best way to think of this in terms of COVID is that in the early part of the cycle, the Federal Reserve was pouring trillions of dollars into the economy to ensure that the market didn’t collapse. Consumers went out and spent all of that money on physical goods. At the same time, production in China and the U.S. was shut down or limited. The combination – stimulating consumption but limiting production – caused the American consumer to burn through almost all inventory. Retailers ordered more goods based on the inflated demand at that time. Upstream to them, wholesalers and manufacturers did the same. Along that chain some even ordered bumper stock. When the orders didn’t arrive as planned, they ordered more. And upstream to them, vendors also ordered more for the same reason. As orders flowed upstream, everyone started to produce at unprecedented levels. Consumers, flush with excess cash and bullish due to high employment and a roaring economy, continued to order physical goods. Then the products started flowing, and in spite of delays, they poured in. Earlier this year, consumers pulled back… at first just slightly. But all of those products kept pouring in, along with buffer stock. Warehouse inventories piled up. And now consumers have shifted away from consuming physical products and have started to consume services and experiences once again. Meanwhile, all of that inventory keeps coming. And now we can see those goods in market data. Here is a chart of real retail inventories, excluding new or used autos. Because inventories are counted on the basis of their dollar value, rapid inflation can make inventories appear artificially higher, so remember that these numbers have been deflated by the Consumer Price Index, or CPI. In other words, inflation has been stripped out to reflect ‘true’ growth in inventory volume, not just price. And as goods flow into our economy, there is nowhere to transport them. Warehouses are full and spending on goods has stalled as Americans suddenly have more options. So freight demand has slowed. Inventory at very high levels FreightWaves’ editorial and research staff, as well as its Market Experts, are constantly conducting channel checks. Lately, we are hearing that national big box retailers have plenty of inventory, particularly in large discretionary categories, such as furniture and household goods. On Twitter, where the freight markets are suddenly becoming a trendy topic of discussion in conjunction with economic activity, there is a suggestion that other large consumer categories are seeing a sudden slowdown as well. Used cars have been nearly impossible to come by and have experienced unmatched price inflation for the past two years. This could be changing. Meanwhile, used vehicles experienced the biggest drop in prices in two years. The CEO of a chain of used car dealerships has a blog that discusses the used car trends for the general public. On Twitter, he talks about market conditions frequently. On April 9th, he posted:  This was followed by Quant researcher Steve Hou, who posted: Lumber prices are also coming down, after two years of inflated prices and extremely tight supply. In the past month, lumber commodity prices have dropped from $1,252 to $949 per-thousand-board-feet, a 30% decline. A shift by consumers to services Higher energy and food prices likely shocked the consumer into a spending pullback on physical goods – while retailers were desperately rebuilding inventories – at the same time that consumers finally began to shift spending away from physical goods to services. And without demand, you don’t need to move anything quickly. Shippers feel much less urgency and therefore they are slowing the freight velocity of their supply chains. We can see that in volume shifts between the modes of transportation they’re using. Railroads move products slower, including intermodal (containerized freight on the rails). It’s currently 21% cheaper to move a container of freight on intermodal than it is via a truck (door-to-door) – an all-time savings high. Chart: Cost delta percentage intermodal vs. truck  The chart below displays volume trends in intermodal and truckload. Intermodal is holding its own, while truck volumes are slowing. Chart: 53-ft. containers on rail vs. truckload volumes  This is all good for consumers – prices for freight will come down. Supply chain bottlenecks will ease. What were recently inventory shortages are now gluts, and will likely result in price discounts, not increases. This is a late-stage supply chain correction. The trucking industry, particularly small trucking firms, will end up feeling the pain. But this was inevitable. A freight recession happens far more often than a GDP recession. The last time this happened was 2019, when the freight market experienced a downturn, but the broader economy did not.  I think a freight recession is inevitable and I think that inflation has to cool. It was either going to be the Federal Reserve’s job to do so or the market’s to do so. We can thank the supply chain bullwhip for doing the Federal Reserve’s job.  China’s latest round of system-wide shutdowns  may be the final straw that pushes many supply chain executives in America to reevaluate their sourcing strategy (if they haven’t already). China is becoming far too unpredictable and unstable as a supplier. Importers should take this breather to catch up. There is still lots to be bullish about. The “bullwhip correction” will be a different kind of headache than we’ve had to deal with for the past two years, but the good news is the market is correcting and things are “normalizing” – as least as far as supply chains are concerned. Want to track the same data and get an edge on competitors in the market? SONAR’s high-frequency platform tracks global supply chain activity in real-time, with the freshest perspective on the global upstream economy.   Tyler Durden Tue, 04/12/2022 - 07:30.....»»

Category: blogSource: zerohedgeApr 12th, 2022

What Is The "Great Reset" And What Do The Globalists Actually Want?

What Is The "Great Reset" And What Do The Globalists Actually Want? Authored by Brandon Smith via Alt-Market.us, I first heard the phrase “Great Reset” way back in 2014. Christine Lagarde, who was head of the IMF at the time, was suddenly becoming very vocal about global centralization. It was an agenda that was generally only whispered about in the dark corners of institutional white papers and the secretive meetings of banking elites, but now these people were becoming rather loud about it. Lagarde was doing a Q&A at the World Economic Forum and the notion of the “Reset” was very deliberately brought up; what the project entailed was vague, but the basic root of it was a dramatic shift away from the current economic, social and political models of the world into a globally centralized and integrated system – A “New World Order,” if you will… It’s important to remember that we had just jumped through the fires of an international credit collapse which started in 2008 and had continued to cause uncertainty in markets for years. The central banks had dumped tens of trillions of dollars worth of stimulus into the system just to keep it on life support. Some of us in the alternative media believed that these actions were not meant to save the economy, only zombify the economy through currency devaluation and inflation. Not long down the road, this zombie creation would turn on us and try to eat us alive, and only the central bankers new exactly when this would occur. Think of the crash of 2008 as Stage 1 of the Reset agenda; the globalists were getting cocky and were ready to unveil their plans to the public. Lagarde’s discussion at the WEF was also held around the time that Klaus Schwab was introducing his 4th Industrial Revolution concept, which is a little more forward with what the globalists really want. He talks excitedly of a true “global society” and a world in which people turn to Artificial Intelligence (AI) as a better means of governance. He even suggests that laws would eventually be dictated by AI and that courts would be run by robots. Of course, he admits that this cannot happen without a period of economic deconstruction in which people and governments will have to choose between sacrifice for the sake of stability or continued pain in the name of holding on to the “old ways.” Look at it this way: The Great Reset is the action or the chaos, and the 4th Industrial Revolution is the intended result or planned “order.” That is to say, it’s a new order created out of engineered chaos. Yeah, it sounds like bad science fiction, but remember these are the people that enjoy the undivided attention of many of our political leaders and they rub elbows with the central bankers at the Federal Reserve. I’ll say it again: The proponents of the Great Reset and the 4th Industrial Revolution, who want to completely undermine and reconstitute our society and way of life, are close partners with our national leaders and the very bankers that could force such a reset to happen through a deliberate collapse. The globalists have been trying to rebrand and repackage their New World Order agenda for many years, and the Reset was what they came up with. Rather than being innocuous sounding, the term threatens systemic upheaval and an erasure of the past. When you “reset” something it usually goes back to zero – A blank slate that the engineers can use to rewrite the code and the functions. But what does this really mean? What do the globalists REALLY WANT? Here are the details, so far as I can prove or support with evidence, of what the “Great Reset” actually is and what programs they hope to enforce: Total Global Economic Centralization Some people might claim that we already have global economic centralization, but they don’t understand what this really means. While national central banks are all members of the IMF and the Bank for International Settlements and take their marching orders from these institutions, what the globalists want is open global governance of finance, probably through the IMF. In other words, it’s not enough that they manipulate economies secretly by using national central banks as proxies; what they want is to stop hiding and to come out into the light as the magnanimous rulers they think they are. The ultimate goal of full centralization is to erase the very idea of free markets and to allow a handful of people to micromanage every aspect of trade and business. It’s not just about influence, it’s about economic empire. But in order to achieve a global central bank they must first implement a one world currency plan. A One World Digital Currency System The IMF has been talking about using their Special Drawing Rights basket as the foundation for a global currency for years (since at least the year 2000). Around a decade ago China started taking on trillions of dollars in debt just to qualify as a member of the SDR system, and the IMF has hinted that when all is said and done that system will go digital. All that is needed is the right kind of crisis to shock the public into compliance. This was evident at the height of the covid pandemic lockdowns and the threat of economic disaster when globalist institutions began to suggest that the IMF’s SDR could be used as a safety net for nations, with strings attached, of course. But beyond the stresses of the pandemic there is a much bigger crisis; namely the stagflationary crisis now on our doorstep. With multiple national currencies in decline and the dollar’s world reserve status increasingly in question, I have no doubt that the globalists will take the opportunity to offer the public their digital currency as a solution. The new system would be more like a phantom currency for a time. The SDR would be the glue or the backing while national currencies remain in circulation until the digital framework becomes pervasive. The IMF and the people behind it would become the defacto world central bank, with the power to steer the course of all national economies through a single currency mechanism. On the micro-economic side, each and every individual would now be dependent on a digital currency or cryptocurrency which removes all privacy in trade. All transactions would be tracked, and by the very nature of blockchain technology and the digital ledger this would be required. The money elites wouldn’t have to explain the tracking, all they would have to say is “That’s how the technology functions; without the ledger it doesn’t work.” A Global Social Credit System The evil inherent in globalism was readily apparent during the recent lockdowns and the violent push for medical tyranny. Despite the fact that covid only had a median Infection Fatality Rate of only 0.27% according to dozens of official studies, the WEF contingent of politicians and world leaders were frothing at the mouth, proclaiming that the existence of covid gave them the right to take total control of people’s lives. Klaus Schwab and the WEF happily announced that the pandemic was the beginning of the “Great Reset” and the 4th Industrial Revolution, stating that the covid crisis presented a perfect “opportunity” for change. The vaccine passports were thankfully defeated by numerous conservative red states in the US, leading to the complete reversal of such policies across most of the western world. We were free for years while many blue states and other countries were facing authoritarianism and this caused a lot of problems for the globalists. It’s hard to institute a global medical dystopia when people around the world can look at the conservatives in the US and see that we are living just fine without the controls. The vax passports need to be understood as a first step towards something else – The beginning of a massive social credit system much like the one being used in China right now. If you think cancel culture is a nightmare today, just think what would happen if the collectivist mob had the power to drop a review bomb on your social credit account and declare you to be untouchable? Imagine if they had the power to simply shut down your ability to get a job, to shop in grocery stores and even shut down access to your money? Without your compliance to the collective, access to normal survival necessities would be impossible. This is what the globalists want, as they openly admitted at the start of the pandemic, and the vax passports would have been an introduction to that technocratic horror had we conservatives not stood our ground. You Will Own Nothing And Be Happy By 2030 The “Sharing Economy” (also sometimes referenced in parallel with “Stakeholder Capitalism”) is a concept that has been making the rounds in the WEF for a few years now. The media has attempted at every turn to spread lies and disinformation claiming that the plan does not exist; but again, it is openly admitted. The sharing economy is essentially a communistic economy, but distilled down to a bizarre minimalism even people who lived in the Soviet Union did not have to experience. The structure is described as a kind of commune based society in which people live in Section 8-style housing, with shared kitchens, shared bathrooms, and barely any privacy. All property is rented, or borrowed. All cars are borrowed and shared, most transit is mass transit, basic personal items such as computers, phones, and even cooking utensils might be shared or borrowed items. As the WEF says, you will own nothing. Being happy about it is another matter. The argument for this kind of society is of course that “climate change” and the frailties of consumer economics demand that we reduce our living standards to near zero and abandon the sacred ideal of property ownership for the sake of the planet. Set aside the fact that carbon based global warming is a farce. The world’s temperatures have only risen by 1 DEGREE CELSIUS in the span of a century, according to the NOAA. This was data that climate scientists had attempted to hide or gloss over for years, but now it is out there for everyone to see. There is no proof of man made global warming. None. The globalists have been scheming to use environmentalism as an excuse for centralization since at least 1972, when the Club Of Rome published a treatise titled ‘The Limits To Growth’. Twenty years later they would publish a book titled ‘The First Global Revolution.’ In that document they specifically recommend using global warming as a vehicle: “In searching for a common enemy against whom we can unite, we came up with the idea that pollution, the threat of global warming, water shortages, famine and the like, would fit the bill. In their totality and their interactions these phenomena do constitute a common threat which must be confronted by everyone together. But in designating these dangers as the enemy, we fall into the trap, which we have already warned readers about, namely mistaking symptoms for causes. All these dangers are caused by human intervention in natural processes, and it is only through changed attitudes and behaviour that they can be overcome. The real enemy then is humanity itself.” The statement comes from Chapter 5 – The Vacuum, which covers their position on the need for global government. The quote is relatively clear; a common enemy must be conjured in order to trick humanity into uniting under a single banner, and the elites see environmental catastrophe, caused by mankind itself, as the best possible motivator. They present the solution of the shared economy concept as if it is a new and bold idea. What the globalists ultimately want for their Great Reset, however, is a tidal wave reversal from freedom and individual prosperity back to a very old manner of doing things, similar to ancient feudalism. You become a peasant working on land owned by the elites, or by the state, and you will never be allowed to own that land. The only difference would be that in a feudal empire of the past peasants could not own land because of the class system. This time around, you won’t be allowed to own anything, including land, because wanting to own anything is “selfish” and destructive to the planet. Total Information Control The truth is a rare commodity these days, but nowhere near as rare as it will be if these elitists get what they want. The globalists are far more open about their agenda today than they have ever been before, and I suspect this is because they believe they will be able to rewrite the history of today’s events with impunity after the Reset unfolds. They think they will own the world of information and will be able to edit our cultural memory as they go. The mainstream media calls all of this “conspiracy theory.” I call it conspiracy reality. It’s hard to deny openly spoken admissions by the globalists themselves, all they can do is try to spin the information as much as possible to keep the public on the fence in terms of what needs to be done, which is a purge of the globalists from our country and perhaps the entire world. If we do not do this, there will come a time when nothing I say here is remembered and no evidence of the Reset plan will exist. The establishment will have eliminated all notions of it from written history, leaving only a fantasy tale of how the world collapsed and a small organization of “visionary” globalists saved it from oblivion through a new religion of centralization. *  *  * If you would like to support the work that Alt-Market does while also receiving content on advanced tactics for defeating the globalist agenda, subscribe to our exclusive newsletter The Wild Bunch Dispatch.  Learn more about it HERE. Tyler Durden Sat, 04/02/2022 - 23:30.....»»

Category: blogSource: zerohedgeApr 2nd, 2022

Blain: Why You Shouldn"t Panic About Bonds

Blain: Why You Shouldn't Panic About Bonds Authored by Bill Blain via MorningPorridge.com, “I would like to come back as the bond market. You can intimidate everybody.” In bonds there is pain as prices tumble – but that does not change the fundamentals of investing in bonds. The risk is rising bond yields will expose the dangerous over-valuations low rate distortion has caused across other financial-assets, perhaps causing more than a few bubbles to pop. I think we should pay a quick visit to Bond Market 101 this morning. Stock markets might move higher because Tesla and Amazon announced stocks splits – bizarrely leading retail investors to believe they can own more of the company for less, or because vague indications of a Ukraine solution mean infinite upside. These illustrate the equity market is a perverse voting machine, reflecting flawed expectations because participants think as clearly as mud. Bonds are different. Bond markets are also subject to participant voting, but they move with mathematical grace and elegance… or, at least they are supposed to. It’s the maths that makes them so critical for institutional investors in terms of their predictability to meet future liabilities and generate dull and boring returns. In Equities there is the excitement of potential appreciation, in bonds there are steady returns – which is why the old adage about the percentage of bonds in your portfolio should match your age. Judging by the number of articles in recent weeks panicking about “catastrophic” bond routs, and inverted yield curves, it might be time to remind ourselves on the fundamentals of bond markets, and why bond traders and fixed income managers are the smartest bods in finance. The mathematics of bonds, and concepts like duration and convexity (which measure the sensitivity of a bond to changes in yield and price) are as complex as you want to make them – but fear not… I shall try to explain them in simple terms even I can understand by simply not mentioning them again…. (Christ on a bike – why am I even trying to explain bonds??? Trying to explain fixed income to equity investors is about as likely to succeed as teaching a rhinoceros to juggle monkeys, and vice-versa.. (Picture, if you will, an equity monkey trying to explain Tesla to bond rhinos!)) But, hey-ho, let’s give it a go… In recent weeks bond yields have risen as central bank tightening and inflation expectations take hold… Rising yields means prices fall. (Doh!) Prices of low coupon bonds are more sensitive to changes in yields than high coupon bonds, and as 95% of global bonds have been issued in the ultra-low rate environment of the last 10-years, thus the price falls look precipitous even though yields have only risen less than a hundred basis points or so. Let me try to illustrate the most dramatic aspect of this “Bond Catastrophe” with a classic horror story: Austria’s Euro 4 billion 0.85% 2120 “Century” Bond. It was launched in June 2020 at a yield of 0.88%, As interest rates fell, it rose to a price of 133.00 in Nov 2020. The price has tumbled by more than half – it now trades at a price of 65.00%, The yield has risen to 1.55%, thus, The price collapse is dramatic, But it will pay investors 85 cents per Euro 100 each year, and repay in full at 100% in June 2122 (subject terms and conditions, such as Austria still being there…) Ah.. the magic of bond maths! (Yes; maths, not “math” as dyslexic Yanks misspell it.) As a result of spectacular bond price changes, it’s no surprise I’ve been reading a plethora of despairing articles about bond market doom’n’gloom. There is lot of “End of the world” stuff. Financial scribblers have picked-up my mantra about “in bond markets there is truth”. They assume tumbling bond prices must mean bond markets are about to deliver death and destruction in the way the Kremlin can only dream of. There is destruction if you bought bonds to trade – that a function of price. You have lost – thus far. Many people think bond yields could reverse and prices rise again: for all the tough talk about rising rates, they reckon central banks will blink and bail out markets by keeping rates low. It’s a contrarian trade.. and it might happen. Meanwhile, the scribblers write how rising yields have  triggered a massive collapse in bond values. But, even that’s not actually true – rising yields don’t change the “value” of a bond. They change its price – which is a different although very painful thing when yields rise. All things being equal it will still pay its annual coupon and redeem on its maturity date. In bonds there is certainty and dull, boring, predictability… (Which is why I hang around with equity people at parties..) Let’s go back to bond basics. A bond is a simple IOU. You lend me $100 and I agree to pay you $5 each year in coupon, plus $100 back in 5-years time. Thus it’s a 5% 5-year Bond. There are lots of different types of bonds: Sovereign bonds – a county with financial sovereignty (one that controls the printing presses for its own currency) will not default. It sets the risk-free interest rate all assets in that currency are valued against. I put a level between them and… Government/Semi-Sov bonds – (not everyone with agree with my nomenclature) are bonds issued by governments without financial sovereignty – like any European Euro nations, or agencies guaranteed by sovereign or government bond. Why the distinction? The UK will always be able to repay Gilts by printing sterling. (That has potential other consequences like currency markets, but for the sake of the argument, let’s not worry.. this morning.) In contrast, the Italians have to politely ask Germany to agree to supporting the ECB lending them more to repay existing debt or approving more bond issuance when they are already up to the eyeballs in debt.… It’s an unsubtle difference. Generally, the market likes to pretend this is not an issue – or a minor quibble at most. But the reality is Italy and Greek spreads to Germany (how much more yield they pay than Germany) widens every time people realise/remember the EU is not guaranteeing or standing behind Greek or Italian debt. That was illustrated when ECB head Mario Dragi said he’d “do anything”, including dancing naked with a unicorn.. Greece was yielding 25 percentage points more than Germany at the time. Now its 140 basis point – 1.4 percentage points. Draghi’s promise worked, although the unicorn said Dragi stepped on her hooves… Yeah, sure.. Greece is just a tiny bit more risky than Germany… (Choked and muffled laughter…) Euro government credits are therefore a greater risk than US Treasuries, UK Gilts and Japanese JGBs for the simple reason the ECB is a political construct trying to align the bickering tribes of Europe, rather than a sovereign nation, while hoping German workers will pay the pensions of the French and Italian comrades. Then you have the credit markets.. Credit markets feature the additional dimension of credit risk – the risk the company won’t repay. That is why they yield more than Govies. Corporates can explode, go bust, default or restructure. Credit risk changes in line with interest rates – generally credit risk rises as interest rates rise because financially stressed companies struggle to pay higher interest charges. Credit markets can be further subdivided into areas like bank debt, which can be senior, subordinated, perpetual capital and a host of other things designed to obscure and complicate the matter. And then there is secured debt and securitisations.. and other loverly ways we used to relieve German banks of their deutschemarks… ah these were the days… Bond markets have one apex predator. Inflation. It’s the big issue. Lets assume you lend Germany 100 Euros for five years at 0% in a period of zero inflation, its safe money. You get back 100 Euros. The gain is you got your money back – and in such a deflationary market, you might have lost money in gold, housing or stocks. If you lend Germany 100 Euros for five years and inflation is 5% per annum, then the value of your 100 euros in 5-years is about 28% less than what you initially invested. In the case of the Austria bond 5% inflation means you will have lost about 1100% of your purchasing power within 50-years, so your Euro 100 will be effectively worthless… at least your annual 85 cents will buy you a drop of water – not. Lots on investors are prepared to take the inflation risk – calculating inflation is often transitory and its worth trading it against the risks of a higher yielding asset that may be less damaged by inflation. They may also believe the world is moving towards deflation, and that the security and risk characteristics of a bond are better than anything else, and that the bond pixies will look after them. But… The truth is hard to bear… The real reason everyone is panicking about bonds is nothing to do with the maths of the bond market, or the perfectly predictable shift in prices we are seeing. … What you need to understand about bonds is that they are very, very, very important. Equity is nothing more than pastry decoration on the financial market pie. Bonds… are the filling. That is because the yield of the bond markets is the de-facto baseline for every other price… As the perceived risks of any financial asset (bond, equity, gold, housing, real assets…) rises, the wider it trades to that base. We call that Govt Bond base yield the Risk-Free Rate. But a problem has arisen. Since 2008 – when central banks intervened to save markets post Lehman, the waters have become murky… There is the ongoing expectation the Central Banks will step in again, and QE has introduced serious ongoing market distortion from monetary experimentation and artificially low interest rates. If you artificially keep the baseline bond yield artificially low it makes every other financial asset look more attractive on a relative basis because they yield more… That simple fact basically explains the massive financial asset inflation we’ve seen since QE and central bank bond buying started… Its what’s driven equity prices higher, made the rich richer, and fuelled inequality. But if you are an equity investor, you don’t call it financial asset inflation – you’ve embraced it as the great 2009-22 Equity Bull Market.  Sorry to burst your bubble… but its low interest rates rather than fundamental corporate value that underlay the bull market… And now its about to pop. This is where reality punches you harder than Will Smith ever could. We’ve all known that ever since Central Bank started distorting markets it would come to an end. When bond yields start to normalise… well that’s when the pain will spread not just to the inflated equity markets – but everything else priced of the Govie risk free rate – which is basically everything… And that, boys and girls, is why you shouldn’t panic about bond markets…. you will likely get your money back (minus inflation.) In fact, that’s why bonds will be a safe-haven if things really deterioriate.. Don’t panic about bonds… but maybe just a wee bit of panic about every other asset in your portfolio… Ouch…. Tyler Durden Wed, 03/30/2022 - 12:45.....»»

Category: blogSource: zerohedgeMar 30th, 2022

Sunday Collum: 2021 Year In Review, Part 3 - From "Insurrection" To Authoritarianism

Sunday Collum: 2021 Year In Review, Part 3 - From 'Insurrection' To Authoritarianism Authored by David B. Collum, Betty R. Miller Professor of Chemistry and Chemical Biology - Cornell University (Email: dbc6@cornell.edu, Twitter: @DavidBCollum), I have a foreboding of an America in my children’s or grandchildren’s time when the United States is a service and information economy; when nearly all the manufacturing industries have slipped away to other countries; when awesome technological powers are in the hands of a very few, and no one representing the public interest can even grasp the issues; when the people have lost the ability to set their own agendas or knowledgeably question those in authority; when, clutching our crystals and nervously consulting our horoscopes, our critical faculties in decline, unable to distinguish between what feels good and what’s true, we slide, almost without noticing, back into superstition and darkness. The dumbing down of America is most evident in the slow decay of substantive content in the enormously influential media, the 30 second sound bites (now down to 10 seconds or less), lowest common denominator programming, credulous presentations on pseudoscience and superstition, but especially a kind of celebration of ignorance. ~  Carl Sagan, 1995, apparently having invented a time machine Every year, David Collum writes a detailed “Year in Review” synopsis full of keen perspective and plenty of wit. This year’s is no exception. Read Part 1 - Crisis Of Authority & The Age Of Narratives here... Read Part 2 - Heart Of Darkness & The Rise Of Centralized Healthcare here... So, here we are at the third and final part of the 2021 Year in Review and it’s no longer 2021. Sorry about that pfuck-up. Think of it as not in 2021 but from 2021. You may have noticed that the first 200 pages (parts 1 and 2) were laced with a recurring catchphrase, “WTF is happening?” It was a literary device for noting that the events ceased to make sense within a conventional worldview, suggesting it is time to torch the old model and start anew. Our response to a disease that was killing a very small slice of the population was to sequester and vaccinate the entire population with an experimental drug of real but unquantified fatality rate. The apparent scientific illiteracy was not some mass psychosis. Y’all just got suckered by America’s Most Trusted Psychopathic Mass Murderer assisted by an epic media blitz sponsored by the pharmaceutical industry that had a distinct authoritarian quality. Unthinking respect for authority is the greatest enemy of truth. ~ Albert Einstein During the brief period after uploading part 2 while grinding on this last portion, the Supreme Court took on the vaccine mandate issue, ruling that the only people forfeiting control of their own healthcare are the healthcare workersref 2 The court also illustrated their profound ignorance of the pandemic and what they were even charged to assess—the Constitutionality of mandates, not the efficacy.ref 3 The CEO of a major insurer reported a 40% spike in fatalities within the 18–65 age bracket that was not from Covid.ref 4 He said 10% would be a 3-sigma, once-every-200-year event: 40% is unheard of. Although he refrained from identifying a cause—deaths of despair, neglected healthcare, or a toxic vaccine—he knows precisely what did them in. They have been studying this stuff for centuries. I suspect his real message was that the insurance industry is about to contribute to inflation with rising premiums. Meanwhile, the pathological liars running the covid grift decided after two years the masks you’ve been wearing served no medical purpose and that the vaccines don’t work either. Wait: who said the masks and vaccines don’t work? We have known for many months that COVID-19 is airborne and therefore, a simple cloth mask is not going to cut it…Cloth masks are little more than facial decorations. ~ Leana Wen, MD, CNN medical expert with no admitted ties to the CCPref 5 Two doses of the vaccine offers very limited protection, if any. Three doses with a booster offer reasonable protection against hospitalization and deaths. Less protection against infection. ~ Albert Bourla, Pfizer CEOref 6 Here is my most heartfelt response to them: You psychopathic lying sacks of shit. You had us wear rags across our faces and put rags across the kids’ faces when clinical studies that could be read by people with half your IQs showed they were worthless. Suicide rates and other deaths of despair soared while you petty tyrants played your little games and generated billions of dollars of profits while destroying the middle class. You have maimed or killed an unknown number of gullible victims with your lockdowns, vaccines, remdesivir, and oppression of Ivermectin. You jammed a vaccine that bypassed animal trials into the fetuses of pregnant women, assuring them it was safe. If we spoke up, we got muzzled. If we refused the vaccine, we got fired. You should all hang from your necks until dead. I will piss on your graves. I feel better already. Very refreshing. Meanwhile, many of my friends and colleagues look at the same data and say, “Oh. I guess I better get the booster and a KN95 mask.” You have got to unfuck yourselves. You’ve been duped. It will get worse. The tactics used to oppress us would have made Stalin smirk. Australia was a beta test for what is to come in the rest of the west if we don’t wake up soon. They are gonna keep coming for one simple reason: we accepted it. We got bent over and squealed like pigs. What normalization does is transform the morally extraordinary into the ordinary. It makes us able to tolerate what was once intolerable by making it seem as if this is the way things have always been. ~ Jason Stanley, How Fascism Works A person is considered ‘ordinary’ or ‘normal’ by the community simply because he accepts most of its social standards and behavioral patterns; which means, in fact, that he is susceptible to suggestion and has been persuaded to go with the majority on most ordinary or extraordinary occasions. ~ William Sargant, in Battle of the Mind Meanwhile, the financial world became even more dominated by central bankers who haven’t the slightest understanding of free-market capitalism. These twits or criminals—maybe both—have blown the most colossal bubble in history if you account for both price and breadth across the spectrum of asset classes. For the layperson, that means they have set us up for a colossal failure. Go back and re-read Valuations if you cannot picture the epic financial carnage lying dead ahead. The gap between the Fed funds rate and headline inflation has never been this large. These pinheads believe that if the markets do not coincide with their world views, the markets must be wrong. I am not an economist, but it appears that none of them are either. The notion that a dozen nitwits should set the most important price of them all—the price of capital—rather than letting the markets set it through price discovery is financial authoritarianism or what some call State Capitalism. I am angry in case it doesn’t show. Meanwhile, in 2020–21 the Fed contributed to destroying upwards of a half-million mom ’n’ pop businesses—they gutted the middle class—while giving BlackRock credit at 0.15% interest rates to buy up all their houses. Here is my advice to those day trading criminals: look both ways as you enter crosswalks. What I believe the response of society to a severe downturn given the current political climate will be epic. Big downturns come after euphorias. We have never entered a downturn with society at large this grumpy. We are in the early stages of The Fourth Turning.ref 7 The deterioration of every government begins with the decay of the principles on which it was founded. ~ Charles-Louis De Secondat When a State has mortgaged all of its future revenues the State, by necessity, lapses into tranquility, langor, and impotence. ~ David Hume, 1752 So, WTF is going on here? In this final part, I address geopolitics. It begins with a relatively benign analysis of Biden’s first year in office, culminating with what I think Afghanistan is really about. The second section addresses my view of what may prove to be the most important day in US History—January 6, 2021. Although it is my best shot—Dave’s Narrative—I will not attempt to nor will I inadvertently spread the love to both sides of the political spectrum. It is a right-wing view that most right-wing politicians and pundits are too cowardly to state in polite company. The final section addresses the Rise of Global Authoritarianism. For a topic covered by thousands of treatises to call my knowledge skeletal is a reach. I have merely created an intellectual foundation—a chalk outline—to ponder why authoritarianism is here and what could stop it. (Plot spoiler: I do not believe it can be stopped.) They know where we are, they know our names, they know from our iPhones if we’re on our way to the grocery store or not. But they haven’t acted on that to put people in camps yet. They could do it. We could be East Germany in weeks, in a month. Huge concentration camps and so forth. ~ Daniel Ellsberg (@DanielEllsberg), author of The Pentagon Papers and Secrets Before moving on, let me give a plug for a book.ref 8 I have not even finished it yet, but it will change your worldview. Look at those ratings! I can guarantee none of those readers enjoyed it. Kennedy will curdle your bone marrow describing 35 years of atrocities commited by America’s Most Trusted Madman. It is emblematic of a much larger problem. Evil is powerless if good men are unafraid – Americans don’t realize what they have to lose. ~ Ronald Reagan The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by menacing it with an endless series of hobgoblins, all of them imaginary. ~ H. L. Mencken Biden – Freshman Year Scorecard Let’s go, Brandon! ~ Cheers across America Most presidents begin their reign with a calling. Reagan raised our national self-esteem after a period of economic and political malaise. Bush Sr. took on the Gulf War, for better or worse. Clinton oversaw the economic boom and bank deregulation, again for better or worse. Bush Jr. was handed 9/11 and, in my opinion, boned it badly. Obama had to wrestle with the Great Financial Crisis. Trump was charged with disturbing the peace—drain the swamp if you will. Biden undeniably needed to begin healing the social discord that, regardless of its source, left the country wounded and divided. Maybe that was not Biden’s calling, but I wanted to see him become the president of all the people. This is not revisionist history of my failing memory: Biden’s the last of the Old Guard, which is probably why he was slipped into the office by the DNC old guard. I am guessing there will be no Supreme Court stacking; that was just rhetoric (I hope). There will be wars just like every president (except Trump, who brought troops home.) Congress is more balanced again and, at the time of this writing, the Senate is still in Republican hands. Hopefully, the gridlock will usher in some garden-variety dysfunction. I have subtle concerns about a Harris presidency. Admittedly, my opinion is based on precious few facts, but Harris displays a concerning shallowness of character, a lack of a moral compass, and the potential to slide to the left of Bernie. (I sometimes reflect on what it must have been like raising the teenaged Kamala.) I am trying to reserve judgment because first impressions scavenged from the digital world are sketchy if not worthless. ~ 2020 Year in Review By this description, Biden tanked his GPA. He ushered in a Crusade to erase the Trump era and its supporters. The weaponizing of social media and censorship against one’s opponents was probably unavoidable, but the downside will be revealed when the wind changes. Team Biden took banishing of political opponents on social media to new levels by, as noted by Jen Psaki, flagging “problematic posts” and the “spread of disinformation” for censorship. NY Timeslapdog Kevin Roose called for a “reality Czar,” not noticing the Russian metaphor problem. The War on Domestic Terror may prove to be a turning point in American history, one that risks extinguishing the flame of the Great American Experiment. Significant erosions of Constitutionally granted civil liberties discussed throughout the rest of this document may not have been Biden’s fault, but they occurred on his watch. If you see an injustice and remain silent, you own it. I can’t remain silent. Biden is the epitome of the empty, amoral creature produced by our system of legalized bribery. His long political career in Congress was defined by representing the interests of big business, especially the credit card companies based in Delaware. He was nicknamed Senator Credit Card. He has always glibly told the public what it wants to hear and then sold them out. ~ Chris Hedges, right-wing hatchet man Team Biden. Books have been written about Trump’s fumbles in the first months (or four years) of his presidency. See Josh Rogin’s Chaos Under Heaven in Books or Michael Lewis’ less balanced The Fifth Risk reviewed in last year’s YIR. The Cracker Jack team assembled for Joe reveals a glob of feisty alt-left activists and omnipresent neocons. According to Rickards, two dozen players on Biden’s roster were recruited from the consulting firm WestExec Advisors (including Psaki and Blinken.)ref 1 That’s power and groupthink. David Axelrod: You must ask yourself, ‘Why are we allowing him to roll around in the hallways doing impromptu interviews?’ Jen Psaki: That is not something we recommend. In fact, a lot of times we say ‘don’t take questions.’ Young black entrepreneurs are just as capable of succeeding given the chance as white entrepreneurs are, but they don’t have lawyers; they don’t have accountants. ~ Joe Biden Joe Biden, President – Joe is the Big Guy. In an odd sense, he is immunized from criticism because he is visibly losing his marbles. His cognitive decline is on full display; this 52 seconds of gibberish about inflation is emblematic.ref 2 He’s 80 years old, for Cripes sake. I read a book this year entitled, When the Air Hits Your Brain, which derives from a neurosurgical aphorism that finishes with “you ain’t never the same.” Wanna guess who had two brain aneurysms (one rupturing) years ago leading to a miraculous recovery?ref 3 You’re the most famous African-American baseball player. ~ Joe Biden to the Pope, context unknown (possibly even a deep fake)ref 4 I am neither reveling in Joe’s problems nor do I believe he is calling the shots. Claims that the puppet master is Harris are, no offense, on the low side of clueless. Obama seems like a better guess but Barrack was a front man too. Having an impaired leader of a superpower, however, is disquieting and potentially destabilizing, especially with Taiwan in play. Biden’s energy policy that clamped down on fossil fuel production only to ask OPEC to open the spigots is one for the ages. The covid policies bridging both administrations were catastrophic, but throwing workers out of jobs into the teeth of unprecedented labor shortages makes zero sense. The nouveau inflation—Bidenflation—may stick to him like it stuck to Jimmy Carter, but that is unfair to both presidents. Look to the Fed in both cases for blame. Troubles at the southern border and the Afghanistan pullout are a couple of serious logs for a raging inferno that represents Biden’s first year in office. As discussed in a later section, demonizing “white supremacists”—not just political opponents but opponents labeled by their race—will not be viewed well by historians unless history is at a serious fork and Joe is ultimately protrayed as the founder of some new Fatherland. Kamala Harris, Vice President – Whenever situations heat up, Harris is off like a prom dress. During the crisis at the border that she was charged with overseeing, she took off to Europe, cackling about never even visiting the border. Kamala endorsed and claimed credit for the Kabul evacuation.ref 5,6 Realizing she had pulled yet another boner she pulled out before they renamed it Kamalabad. (Hey: At least I had the decency to pass on the Kamalatoe joke.) In a moment of surreal comedy, Harris hosted a public chat with Bill Clinton on “empowering women.”ref 7 She can even serve up semi-reasonable ideas with dollops of cringe. If the Democrats nominate her in 2024, may God have mercy on their souls—she is unelectable—or maybe on our souls—I could be wrong. Jen Psaki, Press Secretary – The role of any press secretary is to calm the press down with nuggets of insight—to feed the birds. When that fails, lie your ass off, all with a cold, calculating sociopathy. I would say she did the best job imaginable given the hand she was dealt. Disagree? I’ll just have to circle back with you on that. Ron Klain, Whitehouse Chief of Staff – This guy might be the rainmaker, but I haven’t quite figured him out. He has the durability of Andrei Gromyko, maintaining a central role through three democratic administrations. Keep an eye on him. Janet Yellen, Secretary of the Treasury – We have yet to find out Yellen’s role because she has not been pressed into service by a crisis. To resolve the minor “meme stock” bruhaha, which did not call for a resolution, she needed an ethics waiver owing to the soft corruption of her bank-sponsored million-dollar speaking tour. My expectations of her are quite low, and I imagine she will meet them. Antony Blinken, Secretary of State – He has a good resume. Like Psaki, he is forced to play a weak hand. He lacks Psaki’s skills. Jennifer Mulhern Granholm, US Energy Secretary – In a press conference she was asked how many barrels of oil a day the US consumes and said, “I do not have those numbers in front of me.” ‘Nuff said. Get her out of there. Merrick Garland, Attorney General – The press will tear anybody a new one so snippets with bad optics are always dangerous. I would say, however, ordering the FBI to investigate parents who get irate at school boards—even those who seem rather threatening—is over the top. Leave that to the local and state police. His role in the January 6th event and push into domestic terrorism is potentially sinister and moves him onto my shitlist. Saule Omarova, nominee for Comptroller of the Currency – This one blows my circuits. She is what in the vernacular is called “a commie” straight from Kazakhstan with a thesis on Marxism—a devout believer that the State should run the show. She also hails from Cornell Law School. (Yeah. I know. STFU.) Matthew Continetti of the National Review noted she is, “an activist intellectual who is—and I say this in the kindest way possible—a nut.”ref 8 There will be no more private bank deposit accounts and all of the deposit accounts will be held directly at the Fed. ~ Saule Omarova, Cornell Law Professor   We want them to go bankrupt if we want to tackle climate change. ~ Saule Omarova, on oil and gas companies For those who have seen the horror movie The Ring, Cornell tried to exorcise the demon by sending “the VHS tape” to Washington, D.C., but it came back stamped “Return to Sender.” She withdrew. Hey Team Biden: you could want to snatch up MIT’s Venezuelan-derived president who is already on the board of the World Economic Forum and was instrumental in pushing Aaron Swartz to off himself.ref 9 John Kerry, Climate Czar – Don’t we have enough Czars? John is charged with flying around the world in his private jet, setting the stage for a 30-year $150 trillion push to make many bank accounts much My disdain for the climate movement catches Kerry in the splash zone. Pete Buttegieg, Transportation Secretary – I must confess to liking Mayor Pete and would have been happier if he had gotten the crash course in the oval office rather than Joe. The one criticism I would make is that taking two months of paternity leave during the nation’s greatest transportation crisis seemed odd. I think when you are in such an important position you find a way. Get a nanny. Bring the twins to your office. Leave them with your spouse. For Pete’s sake (sorry), stay at your post. For the record, after my youngest son was born my wife had health problems. I used to bring him to work and lecture with him in a Snugly and changed a shitload of diapers. You could have done it too, Pete. Samantha Power, Head of the US Agency for International Development (USAID) – Sam is a garden-variety neocon, having served as ambassador to the UN and on the National Security Council, both under Obama. She was central to the planning behind destabilizing Libya,ref 10 which sure looks like a bad idea unless destabilizing the Middle East is our foreign policy. Please just don’t fuck up too much. Cass Sunstein, Homeland Security employee. This is not really an appointment, per se. Cass is the Harvard-employed husband of neocon Samantha Powers. In his 2008 book, Conspiracy Theories, Cass declared “the existence of both domestic and foreign conspiracy theories” to be our greatest threat, outlining five possible solutions, and I quote, “(1) Government might ban conspiracy theorizing. (2) Government might impose some kind of tax, financial or otherwise, on those who disseminate such theories. (3) Government might engage in counter-speech, marshaling arguments to discredit conspiracy theories. (4) Government might formally hire credible private parties to engage in counter-speech. (5) Government might engage in informal communication with such parties, encouraging them to help.” Guys like Cass who come out of Harvard’s CIA training camps are menaces to society. Marvelous hire, Joe. Victoria Nuland, Undersecretary for Political Affairs – She is famous for her hot mic “Fuck the EU” comment and for engineering the coup in Ukraine—a Wonder Bread neocon. William J. Burns, Head of the CIA – I’ve got nothing on Bill, not even a fingerprint. It would be difficult for me to grade him poorly on a curve with the likes of John Brennan, William Casey, and Alan Dulles. (I once had dinner with a former CIA head John Deutch. What a dick.) Christopher Wray, Head of the FBI – As the FBI increasingly looks like the Praetorian Guard for the power elite (both in and out of public office), Wray has followed in the footsteps of his predecessors like J. Edgar Hoover and James Comie to be both top cop and dubious scoundrel. Wray’s fate might be dictated by the ongoing Durham investigation, but I have not seen any heads roll inside the Beltway since Watergate a half-century ago. Tony Fauci, Director of NIAID – That bipartisan, power-hungry authoritarian—The Most Trusted Madman in America—is a recurring theme. He doesn’t know any science. He is a political hack—a chameleon—who survived 35 years multiple administrations by being able slither out of anybody’s claws and regrow his tail. Rochelle Walensky, Director of the CDC – She got serious attention in part 2. I am horrified by her sociopathy. I think she is evil. Amy Gutmann, Ambassador to Germany – Guttman was given the job after giving the Big Guy more than $900,000 in speaking fees and an honorary degree from UPenn when she was the University’s president. I am sure every ambassador pays market rates for the job.  Cathy Russell, Biden’s Director of Presidential Personnel–She is married to Tom Donlin, Chairman of the gargantuan multinational investment firm, BlackRock. Their daughter made it into the Whitehouse National Security Council. A talented family enjoying the political respect accorded to billionaires. Asmeret Asefaw Berhe, Head of the Office of Science – Despite scientific chops as a climate-change-supporting agronomist, she has no administrative experience and is inexperienced in the scientific programs that she is overseeing. Of course, everything is now about the $150 trillion climate grift, so she’s our girl. Jared Bernstein, Whitehouse Economic Advisor – He is highly educated, with a bachelor’s degree in music, master’s degrees in social work and philosophy, and a Ph.D. in social welfare. His greatest strength may be his complete lack of training in economics. Shalanda Baker, Deputy Director for Energy Justice in the Office of Economic Impact and Diversity at the Department of Energy – Is that a salaried position? ‘Nuff said. General Mark Milley, Chairman of the Joint Chiefs of Staff – Mark transitioned from the Trump administration. It caused a stir when he went more “woke” than Chelsea Manning. We will no longer defeat our enemy but assign them pronouns and include them. This was followed by a scandal outlined in Bob Woodward’s book in which he instructed military leaders in a secret meeting to bypass Trump on important military decisions.ref 11 He then unilaterally told his peer in the Chinese military that he would drop a dime if there was an impending military conflict. He tried to hang it on the Secretary of Defense, but the Secretary spit the bit fast.ref 12 My theory is that the sudden wokeness was to commandeer allies on the far left knowing that scandal was coming. It worked. He looks like he is right out of Dr. Strangelove without the lip gloss and eye shadow. Xavier Becerra, Secretary of Health and Human Services. He refuses to acknowledge the merits of natural Covid-19 immunity. That puts him near the top of my shitlist. Becerra has no medical or scientific training. He’s a lawyer, but at least he is from an underrepresented group. Rachel Levine, Assistant Secretary of Health and Human Services – I know little about her. She might be the most qualified candidate, certainly more so than her boss Becerra. Call me skeptical of a purely merit-based appointment. Hunter Biden. I was going to place Hunter in the bullets and call him Head of the DEA and National Association of the Arts, but I had reservations. There are sad, heartwarming, and troubling roles played by Hunter Biden. His addiction is a highly personal problem that is difficult for the first family to deal with, especially given other tragedies in their lives. Joe Rogan succinctly explained Hunter’s remarkably odd behavior: “he is a crackhead.” They are part and parcel of being dopesick. Leaked emails from the laptop show Dad to be a compassionate and loving father struggling to save his son. Ironically, old footage surfaced of Joe ranting about how we have to deal with crackheads severely no matter whom they know.ref 13 It did not age well. It is clear that Hunter Biden was selling access and influence. It appears that Joe Biden was aware of that effort. That is very serious. If these emails are false, this is a major story. If they are true, this is a major scandal. ~ Jonathan Turley Before you start blubbering, however, recall that Hunter’s laptop revealed that he was playing critical roles in Russian and Chinese dealings for the Biden family. The Kleenex gets tossed and the gloves now come off. Hunter’s business partner stepped forward admitting nefarious deals were made with Joe involved. Joe denied knowing the clown, but a then photo of the two surfaced.ref 14 This year Hunter also began selling his artwork for up to $500,000 a pop behind a “Chinese Wall”—a veil that ensures we cannot find out who bought the art.ref 15,16,17 The money might literally be from behind a Chinese wall. That buys a lot of crack even after the Big Guy’s 10% cut. Figure 1 shows two paintings, one by a Hunter and the other by two elephants. (No joke, elephants have been painting brilliant pictures free-trunk for decades.) Figure 1. Biden art (left) brought $500,000. The elephant painting (shown being painted) brought $39,000. We are a democracy…there are things you can’t do by executive order unless you are a dictator. ~ Joe Biden, several years ago Executive Orders. Before the first week of his presidency was over, Biden had signed 37 of those beauties. Some, such as the order extending rent moratoria, were overtly unconstitutional. Some merely unwound Trump’s orders that had unwound Obama’s orders. This is dodge ball. While Yale was battling a civil rights case for discriminatory admissions practices, the Biden DOJ dismissed it without comment.ref 18 Yale is said to have promptly destroyed the evidence, which shows they have good lawyers. Transgender athletes were reinstated in women’s sports, ensuring that longstanding records will be shattered.ref 19 It got surreal when UPenn’s transgender swimmer was beaten by Yale’s transgender swimmer.ref 19a An executive order giving the IRS direct access to our bank accounts seems both sinister and inevitable…death and taxes as they say.ref 20 There are a lot of Republicans out there giving speeches about how outraged they are about the situation at the border. Not many who are putting forward solutions. ~ Jen Psaki, forgetting about the wall idea Crisis at the Border. The mainstream press covered this one exhaustively. There are parallels here with the North Africans crossing into Europe several years back. It looks intentional, but why? Don’t tell me about building a democratic base. That is too far in the future and too simplistic. It is far easier to control the elections at the server level. Baffling details include the administration’s suggestion that border agents should be empowered to authorize the immigration of “climate migrants.”ref 21 That could boost a few agents salaries. Rumors of US military planes transporting illegals into the US suggests somebody could punk the elite: load up a boat and drop a couple hundred on Martha’s Vineyard. On further thought, rather than offering Vineyardians more gardeners, drop off some Afghans.ref 22Whoever is calling the shots, this is neither about civil rights nor climate change. Attorney General Merrick Garland clarified the immigration challenge: Today marks a step forward in our effort to make the asylum process fairer and more expeditious. This rule will both reduce the caseload in our immigration courts and protect the rights of those fleeing persecution and violence. If you do that, that will set off a mass migration that’s like nothing that we have ever seen in this country because the entire world will then come on through to get their asylum, essentially legalizing illegal immigration, in a very clever way. ~ Attorney General Merrick Garland WTF did Garland just say? Both his meaning and intent are unclear. The immigrants, of course, were all unvaccinated, which would have been OK by me had the administration not gone Third Reich to vaccinate US citizens. The administration also wanted to offer $450,000 to every immigrant family separated from their loved ones: why?ref 23They seemed to walk that third-trimester idea back and then walked it forward again. A half-billion-dollar, no-bid contract to manage the immigrants went to friends of the administration.ref 24 Your tax dollars at work. At least we are back to business as usual. By the way, where is Border Czar Kamala Harris while all this is going on? Making creepy videos.ref 25,26 People who like quotes love meaningless generalizations. ~ Graham Greene Miscellaneous issues surfaced that either went away or are still festering quietly. On the positive side, stacking the Supreme Court—increasing the number of justices to get a left-leaning majority—seems to have been only a political football. Granting Washington DC statehood, while to a plebe like me doesn’t seem nuts, has the trappings of a massive powershift to the left in national elections. Joe invaded the legal process by declaring Chauvin guilty and Kyle Rittenhouse a white supremacist. Would Obama have done this? I don’t think so. Rittenhouse may get his “10% for the Young Guy” in defamation suits against Joe and every media outlet on the planet. Joe checking his watch five times at the funeral of dead marines didn’t play well,ref 27 but if you put a camera on me I wouldn’t make it to lunchtime without serving up Jim Acosta fresh meat. The main drama of Biden’s first year, however, played out in a distant land.   Afghanistan—where empires go to die. ~ Mike Malloy Afghanistan. I’ve been groping for nomenclature — Afghazi, Afghazistan, Benghanistan, Benghazistan, Saigonistan, Clusterfuckistan, and Bidenistan—to describe this odd moment in history. That 20-year skirmish cost an estimated $2.3 trillion.ref 28 The idea that it was only a few thousand troops with no fatalities in the last year or two makes me question my wisdom, but I can’t start revising history. Whether for right or wrong, I was glad we were getting out. The ensuing Crisis in Kabul looked like the graveyard of a presidency—a combination of the Bay of Pigs and the Iran Hostage Crisis that would dog us for years. They are chanting “Death to America”, but they seemed friendly at the same time. ~ CNN reporter wearing a burka looking for a husband Even before the evacuation started we were hearing about huge caches of weapons that would be abandoned.ref 29 In an eat-and-dash that would make an IHOP waiter wince, we bugged out at 2:00 AM without telling anybody.ref 30Jalalabad Joe had assured us repeatedly the 300,000-strong Afghan army would hang tough. They were defeated in time to chow down on some goat stew for dinner. Images of desperate Afghan’s clinging to transport planes brought up images of the Saigon Embassy rooftop. We left service dogs in cages.ref 31 Marines would never do that. Stranded Americans and Afghan collaborators were begging for help to get to the airport and even to get into the airport.ref 32The administration used a drone to strike on some kids and their dads loading water into a truck to change the news cycle briefly.ref 33 The Afghan who is credited with saving Joe Biden and John Kerry in a disastrous excursion to Afghanistan years earlier got left behind pleading for help:ref 34 Hello Mr. President: Save me and my family. Don’t forget me here. Mercenaries like Blackwater’s Erik Prince tried to prevent Americans from taking The Final Exit,ref 35 only to get stonewalled by the Whitehouse. Meanwhile, the top commander and four-star Wokie, Mark Milley, was too mired in scandal.ref 36 Retired generals were calling for the active-duty generals to resign.ref 37 The withdrawal could not be botched worse if you tried. The populace are now facing a winter of profound famine.ref 38 Rural Afghanistan has been rocked by climate change. The past three decades have brought floods and drought that have destroyed crops and left people hungry. And the Taliban — likely without knowing climate change was the cause — has taken advantage of that pain. ~ CBS News, sticking it like a Russian gymnast This vexing story was from the Theater of the Absurd. Starting with the caches of military equipment left behind, I have two simple solutions that a group of teenagers could have concocted: Announce Blow Shit Up Friday (BSUF). Provide the military personnel with some grenade launchers and a few kegs of beer, grill up some goat burgers, and start blowing shit up. That would be a blast. If that is too unprofessional, you gather all armaments and anything of else of value into an open space. Once the wheels go up on the last troop transport, drop a MOAB—Mother of All Bombs.ref 39 Tough luck for those who were trying to hotwire the stuff when the MOAB arrives. It will take a year to get them out…If you use those billions of dollars of weapons behind I promise they’ll be using them against your grandchildren and mine someday. ~ Joe Biden, Presidential Candidate, 2007ref 40 The collapse of the Afghan Army also couldn’t have come as a surprise. The military and CIA certainly knew that those troops wouldn’t withstand a West Side Story-level brawl.ref 41 The soldiers were paid by the US for their service COD, and there was no C left. Shockingly, most of the payroll booty had long-since been snarfed up by the politicians and top military brass from the only swamp in Afghanistan.ref 42 Whocouldanode? Taliban can murder as many people as they want. But if they keep trolling Biden like this they’re gonna get kicked off of social media. ~ Jesse Kelley, noting the Taliban has an active Twitter feed Here is a script playing out in my noggin. The Crisis in Kabul was an arms deal—Fast and Furious 2.0. One of our top diplomats called the Taliban and said, “We are pulling out in a month. We’ll leave the keys in the ignition and pallets of $100 billsref 43 to help pay for upkeep. If you guys let us sneak out unmolested, you can party like it’s 999—an authentic Taliban-themed fraternity party. We will leave you guns, money, nice facilities, and even a few wives. If you fuck this up, however, we will be right back here.” The Whitehouse also lent a legitimizing tone to the regime when speaking about “working with the Taliban” as part of the deal. In return, the State Department called on the Taliban to form an “inclusive and representative government,”ref 44 so there’s that bit of risible nonsense. Neville Chamberlain couldn’t have done any better. The bottom line: 90% of Americans who wanted to leave Afghanistan were able to leave Afghanistan. ~ Jalalabad Joe Biden That might be a great poll number or inflated final exam grade at a college Joe erroneously claimed to attend, but I am not sure “90%” is impressive in this context. The actual evacuation was ineptly executed from the get-go. Mr. Rogers, with the help of his viewing audience of toddlers, could have Kabuled together a better plan based on the simple precept, “pull out the civilians then the military.” Baffling claims the Whitehouse was obstructing evacuations of charter flights containing Americans was not right-wing propaganda: Where are they going to land? A number of these planes have a handful of Americans, but they may have several hundred individuals who do not have proper documentation of identity….we don’t have manifests for them, we don’t know what the security protocols are for them, we don’t know what their documentation is…hard choices you face in government. ~ Jen Psaki, press conference WTF actually happened? When nothing makes sense your model is wrong. Glenn Greenwald got the scent that withdrawal was intentionally mishandled, suggesting this is “fully within the character of the deep-state operatives.”ref 45We also forgot to destroy our sophisticated FBI-derived software and a complete database containing the biometrics of Friends of the USA,ref 46,47,48 enabling the Taliban to find potential detractors for an attitude correction. Think of it as Afghanistan’s high-tech War on Domestic Terror. The stonewalling of help from other countries also makes no sense using a conventional model.ref 49 Biden’s CIA Director met with Taliban leadership covertly—so covertly we all knew about it—to concoct a “deal”, but what kind of deal?ref 50 During the evacuation, we gave the Taliban names of American citizens, green card holders, and Afghan allies supposedly to let them pass through the militant-controlled perimeter of the city’s airport.ref 51 They would never abuse this list, right? A large number of Afghan refugees—possibly as many as 100,000 according to Tucker Carlson—entering the US are consistent with our open border policy along the Mexican border, but what is that all about? Afghans, by the way, are reputed to be always recalcitrant to assimilate in Europe just in case you’re thinking of renting out your basement as an Airbnb.ref 52 What happened in Afghanistan is not incompetence. We are not that incompetent. ~ General George Flynn The goal is to use Afghanistan to wash money out of the tax bases of the US and Europe through Afghanistan and back into the hands of a transnational security elite. The goal is an endless war, not a successful war. ~ Julian Assange, 2011ref y I have no doubt that blood was shed after we left. More than a few US sympathizers surely lost their heads. As to the stranded Americans, why were they still there? China had evacuated their citizens months earlier.ref 53(Hmmm…Chinese citizens were there?) Two dozen students from the Cajon Valley Union School District and 16 parents there for an enriching summer trip were stranded.ref 54 How did they get visas? That field trip will generate a few college essays that will beat any written about dead grandparents, although Kabul State College may be their only option. This is now on-track, Peter, to be the largest airlift in U.S. history. I would not say that is anything but a success. ~ Jen Psaki to Peter Doucy The media can create, steer, or smother narratives at will. I have a question: Where are all the dead Americans—thousands of them—said to be left behind? Horror stories should be surfacing daily, but they’re not. We shit a mudbrick when One Dead Kashoggi (ODK) got fed to the camels in Saudi Arabia. Three thousand fatalities on 9/11 got us into Afghanistan in the first place. We supposedly left behind “thousands of Americans” but without generating a single headline? So much for that Bay of Pigs­–Iran Hostage Crisis analogy. So here are my next questions and I am deadly serious: Did we get duped? Was the whole thing more sham than farce? There is no such thing as a true account of anything. ~ Gore Vidal Here is Dave’s Narrative. We installed the Taliban as the rulers of Afghanistan as the best of many bad options. The winners are the Taliban and China. The two are inking deals for mineral rights as I type. The chaos was intentional. But why accept such a profound humiliation and dashed hopes of future alliances in global hotspots? I think that the Taliban winning the war in Afghanistan, and then the way our exit happened, has absolutely inspired jihadists all over the world. The Taliban is saying, we just didn’t defeat the United States, we defeated NATO. We defeated the world’s greatest military power, ever. I think, not only will the jihadists be inspired, but a lot of them are going to come to Afghanistan to be part of the celebration, to be part of jihadist central. We are more at risk, without a doubt. ~ Michael Morell, former CIA Director under Obama Maybe China has way more than just Hunter’s laptop to blackmail us and is about to take possession of Taiwan soon. While we await the next Kyle Rittenhouse trial to preoccupy ourselves, take a peek at this video. Skip over the election stuff since we all have rock-hard opinions on that and go to minute 55:30. Xi Jinping’s right-hand man, Di Dongsheng, publicly explained the extent Beijing controls US politics:ref 55 There is nothing in the world that money can’t fix, right? If one wad of cash can’t handle it, then I’ll have two wads. (laughter) Of course this is how I do things. In fact, to be a bit blunt, in the past 30 years or past 40 years, we manipulated the core power circle in the United States, right? I mentioned earlier that Wall Street started to have a very strong influence on U.S. domestic and foreign affairs in the 1970s. So we figured out our path and those we could be dependent on. But the problem is that Wall Street’s status has declined after 2008. More importantly, starting in 2016 Wall Street has no influence on Trump. Why? It is awkward. Trump had a soft breach of contract on Wall Street once, so the two sides had conflicts. They tried to help during the Sino-US trade war. As far as I know, friends from the U.S. told me that they tried to help, but they were too weak. But now we see that Biden has come to power. (crowd laughs) The traditional elites, political elites, and the establishment have a very close relationship with Wall Street. You all see it: Trump talked about Biden’s son, “You have investment funds around the world.” Who helped him build the funds? You understand? There are transactions involved. (laughter) So at this point in time, we use an appropriate way to express a certain kind of goodwill. (applause) ~Di Dongsheng, Vice Director and Secretary of the Center for Foreign Strategic Studies of Chinaref 55 January 6th Capitol Insurrection Alec Baldwin killed more people in 2021 than did the January 6th insurrectionists. Anybody reading this far knows that the January 6th riots stemmed from the right-wing voters who doubted the veracity of the 2020 election. Twitter polls show that view is not as partisan or as rare as the media would lead you to believe. I happen to doubt U.S. election integrity but have for quite a few election cycles. ref 1 Hacked Stratfor emails show the democrats rigged the vote in ’08 ref 2 and Republicans rigged it in ’04.ref 3 It is bipartisan Capture the Flag with red and blue pinnies.ref 4 In any event, Trump’s Green Goblin strategy was to beckon the MAGA faithful to the Capitol to protest the Electoral College signing off on the results. It was not so different than the mobs outside the courthouses trying to subvert the Rittenhouse and Chauvin trials, but the scale of January 6th was much larger and the optics were Biblical. It got out of hand and, at times, even a little Helter Skelter. Mob psychology elicits dramatic changes in brain chemistry and has been the topic of many laboratory studies.”ref 5 Temporary insanity is not a crazy defense. My Tweet got some hysterically hateful responses from the Right who missed the sarcasm and the Left who did not. I think I squandered more of my valuable time left on this planet burrowing through the January 6th story than on the Covid-Vaccine combo platter. I should preface this section by noting that I was praised by a thoughtful long-time reader for being “balanced and measured and carefully worded, even on edgy topics.” I may be on the cusp of disappointing him. It’s impossible to peer at the The Great Insurrection through a non-partisan lens. Both sides may find common ground in the belief that January 6th is a profound fork in the road of the American Experiment. The sock-starching Left will celebrate it as a national holiday every year while the bed-wetting Right will try to ignore it. Both are wrong. Look at that photo and pause to ponder its implications. Put a funny caption to it. Let’s hear from some Republicans first: We must also know what happened every minute of that day in the White House — every phone call, every conversation, every meeting leading up to, during, and after the attack. ~ Liz Cheney I think Lizard nailed it. We’re on the same page. Let’s keep going… January 6 was worse than 9/11, because it’s continued to rip our country apart and get permission for people to pursue autocratic means, and so I think we’re in a much worse place than we’ve been. I think we’re in the most perilous point in time since 1861 in the advent of the Civil War. ~ Michael Dowd, former Bush strategist I would like to see January 6th burned into the American mind as firmly as 9/11 because it was that scale of a shock to the system. ~ George Will, syndicated columnist Mike and George are as unhinged as I am but on different hinges. I think they are delusional and offensive. Edging forward… The 1/6 attack for the future of the country was a profoundly more dangerous event than the 9/11 attacks. And in the end, the 1/6 attacks are likely to kill a lot more Americans than were killed in the 9/11 attacks, which will include the casualties of the wars that lasted 20 years following. ~ Steve Smith, Lincoln Project co-founder Now I’m getting the heebie-jeebies if for no other reason than the Lincoln Project is filled with Democratic operatives (or at least neocons) pretending to be Republicans—as authentic as the Indians at the Boston Tea Party or stepmoms on PornHub. We have seen growing evidence that the dangers to our country can come not only across borders but from violence that gathers within…There is little cultural overlap between violent extremists abroad and violent extremists at home… But in their disdain for pluralism, in their disregard for human life, in their determination to defile national symbols, they are children of the same foul spirit. ~ George W. Bush, a thinly veiled allusion to January 6 George got some serious guff from more than a few of the 80 million Fox-watching extremists including the Grand Wizard: So interesting to watch former President Bush, who is responsible for getting us into the quicksand of the Middle East (and then not winning!), as he lectures us that terrorists on the ‘right’ are a bigger problem than those from foreign countries that hate America. ~ Donald Trump He nailed it. I have stated previously that Bush committed war crimes. Of course, the National Security Machine chimed in… The No. 1 national security threat I’ve ever seen in my life to this country’s democracy is the party that I’m in — the Republican Party. It is the No. 1 national security threat to the United States of America. ~ Miles Taylor, a former Department of Homeland Security (DHS) official Dude! You just tarred about 80 million asses with that brushstroke. Let’s move further left to find some middle ground: They swooned for him on 9/11 because he gave them what they most crave: the view that Al Qaeda is comparable to those who protested at the Capitol on 1/6. ~ Glenn Greenwald, on George Bush’s comments Glenn is part of a growing cadre of liberals including Matt Taibbi, Tim Pool, Bill Maher, The Weinstein Brothers, and Joe Rogan who are unafraid to extend olive branches across The Great Partisan Divide at risk of being labled white supremacists and Nazis, but they are hardly emblematic of the Left. From the elite Left… I think we also had very real security concerns. We still don’t yet feel safe around other members of Congress.  ~ AOC AOC’s comment prompted one pundit to tell her to “get a therapist”, which seems correct given her moment of maximum drama was when a security guard was screaming outside her door, “Are you OK, Ma’am?” #AlexandriaOcasioSmollett began trending on social media when it was disclosed that she was not even in the building when Ragnar and his buddies showed up.ref 6 They will have to decide if Donald J. Trump incited the erection…the insurrection. ~ Chuck Schumerref 7 What ya thinking about Chuckie? We are facing the most significant test of our democracy since the Civil War. That’s not hyperbole. Since the Civil War. The Confederates back then never breached the Capitol as insurrectionists did on Jan. 6. ~ Joe Biden Joe may be on the A-Team, but he hasn’t found his way out of the locker room. The blue-check-marked liberals did not mince words… The 9/11 terrorists and Osama bin Laden never threatened the heart of the American experiment. The 1/6 terrorists and Donald Trump absolutely did exactly that. Trump continues that effort today. ~ S.V. Dáte, Huffington Post’s senior White House correspondent The only effective way for the government to respond to an act of war by domestic terrorists is to be prepared to meet them with machine guns and flamethrowers and mow them down. Not one of those terrorists who broke through police lines should have escaped alive. ~ a Washington Post commenter Moving as far left as you can by tuning into the most cunning commie who can outfox any Western leader… Do you know that 450 individuals were arrested after entering the Congress? They came there with political demands. ~ Vladimir Putin The Cast of this Drama. This Kafkaesque narrative will be scrutinized by historians and democratic operatives for years to come. The Left will cast this event as a truly unique moment in US history, but it was precedented. I see parallels with the 1920’s Bonus Army in which World War I veterans were pissed off about unpaid post-war benefits.ref 8 In the saddest of ironies, many were killed by Army regulars. Some authorities, including a young Dwight Eisenhower, thought it was a benign protest while others thought it was an assault on America. Grumpy crowds appear at the Capitol only on days of the week that end in “y.” Recently, f.....»»

Category: blogSource: zerohedgeFeb 6th, 2022

January 6: A Legacy Of Troubling Questions

January 6: A Legacy Of Troubling Questions Authored by Joseph Hannemann via The Epoch Times, The hardened-steel baton made the most disturbing sound as it bounced off Victoria White’s skull. It varied between a hollow click and a deeper snap, depending on where on her head the metal weapon made contact. “Please don’t beat her!” a man in the crowd yelled. It was chaos in the West Terrace tunnel entrance of the U.S. Capitol on the afternoon of Jan. 6, 2021. Outside, thousands who had attended President Donald Trump’s “Save America” rally milled about the terrace, while groups of rioters battled police near the tunnel. An almost demonic cacophony emanated from under the tunnel arch. “I didn’t even touch you,” a woman cried. “I need help! I need help,” a man shouted. “Stand up, dammit!” intoned a police officer in riot gear. “Get out!” boomed another. Then a blood-curdling scream, followed by the ear-splitting sound of an emergency siren. Victoria White appears prone or near-collapse in several parts of a five-minute video. (Screen Captures/Joseph McBride) After repeatedly striking White in the head, the officer in white holstered his baton. Then he made a fist with his bare left hand and punched White in the face. “Oh, no-no-no! Please! Please don’t beat her!” someone shouted, to no effect. After three full-force knuckle shots to White’s head, the officer in white paused. Then he went in for two more blows. He grabbed the hair at the back of her head and pulled it hard. White looked dazed and confused. She wore a blank stare. Another officer reached in with his baton in an apparent attempt to prevent more blows. The officer in white grabbed his colleague’s arm and shoved it back at him. The almost unbelievable violence meted out on the unarmed, 5-foot-4-inch White provides a stark contrast to the often-preached narrative that Jan. 6 was strictly an insurrection carried out by mobs of Trump supporters wanting to overthrow the government. White was a victim of brutality. Her lawyer is preparing a civil suit. Hers is one of the hidden stories of Jan. 6, exposed only after a federal judge ordered that three hours of surveillance video held by the U.S. Department of Justice be released to White’s attorney. Political Divide Widens The voluminous media coverage in the weeks leading up to the one-year anniversary of Jan. 6 demonstrates the substantial and growing divide between Americans of differing political stripes. The prevailing narrative is that supporters of Trump, whipped into a frenzy by his Jan. 6 speech at the Ellipse, descended on the U.S. Capitol in a violent attempt to upend democracy. A large crowd of Trump supporters—estimates ranged from 30,000 on the low end to 2 million on the high end—crowded the Ellipse to hear the president rail against the 2020 presidential election. Trump contended, along with millions of supporters, that widespread election fraud in key states like Pennsylvania, Michigan, Georgia, Arizona, and Wisconsin had robbed him of a second term and placed Democrat Joe Biden in an illegitimate presidency. The speech started approximately an hour later than scheduled. Well before Trump concluded his remarks, a group of protesters breached a lightly guarded barrier on the Capitol’s pedestrian walkway. They quickly headed for the Capitol building. By the time the throngs of rally-goers made the long walk to the Capitol grounds, the perimeter fencing and security signs indicating the site was restricted had been methodically removed. As tens of thousands of protesters surrounded the Capitol, pockets of violence broke out. Windows were broken, and protesters climbed inside, just after 2 p.m. At other entrances, protesters found doors propped open and proceeded inside like tourists. The circumstances of the worst violence are hotly contested, but the results were real. Trump supporter Ashli Babbitt, 35, was shot and killed by a Capitol Police officer as she attempted to enter the Speaker’s Lobby. White and others were beaten by police in or near the West Terrace tunnel, attorneys say. Aaron Babbitt with his wife, Ashli, who was killed at the U.S. Capitol on Jan. 6, 2021. “She loved life,” he said. (Courtesy of Aaron Babbitt) Some 140 police were injured during battles with rioters. Capitol Police Officer Brian Sicknick died on Jan. 7, 2021, although his death was eventually determined to be from natural causes. Capitol Police Officer Howard Liebengood and Washington Metropolitan Police Officer Jeffrey Smith—both of whom were on duty at the Capitol—took their own lives in the weeks after Jan. 6. President Joe Biden described Jan. 6 as the “worst attack on our democracy since the Civil War.” The Associated Press asserted it was “the most sustained attack on the seat of American democracy since the War of 1812.” Steven Sund, former U.S. Capitol Police chief, called it “a coordinated violent attack on the United States Capitol by thousands of well-equipped armed insurrectionists.” Many Americans don’t see those words as hyperbole, insisting Trump-fueled mobs fully intended to disrupt the U.S. Congress and overthrow the federal government. Across the political chasm are those who reject that dominant narrative, and assert that while Jan. 6 was many things, it was no insurrection. They view that characterization as a convenient way to suppress the truth. The real Jan. 6 story, they believe, remains hidden on some 14,000 hours of surveillance video from around the Capitol grounds. Portions of that video will undoubtedly be unsealed as some of the more than 725 people arrested for alleged Jan. 6-related crimes go on trial. Whatever the chaos of that infamous day is called, one thing seems clear. The full Jan. 6 story hasn’t been told. One year later, the legacy of Jan. 6 is a trail of troubling questions—the answers to which could rock American politics and deepen the divide between its citizens. Is There Evidence of Treason or Sedition? In response to the violence at the Capitol, the FBI launched one of the most sweeping investigations in its history. Agents pored over cell phone video, social media postings, surveillance video, and police bodycam footage to identify those who were at the Capitol that day. The FBI opened a national tip line and posted videos and photographs of protesters. Tips came from many sources, including neighbors and family members who turned in their relatives. Of the more than 725 people arrested over the past year, no one was charged with treason or sedition. At least 225 defendants were charged with assaulting, resisting, or impeding police, including 75 who allegedly used a deadly or dangerous weapon, or caused serious bodily injury to an officer. Two men climb over other protesters and lunge at police officers guarding the entrance to the West Terrace tunnel at the U.S. Capitol on Jan. 6, 2021. (Screen Capture via The Epoch Times) The most common charge issued by federal prosecutors—involving 640 individuals—was for entering or remaining in a restricted federal building or grounds. About 40 percent of all those arrested were charged with impeding or attempting to impede an official proceeding—the certification of the Electoral College votes from the 2020 presidential election. Of the 165 people who have pleaded guilty to date, nearly 90 percent of the cases involved misdemeanors. The rest were felonies. Are There Any Investigative Conclusions? House Speaker Nancy Pelosi (D-Calif.) appointed a select committee to investigate the Jan. 6 breach and subsequent violence. That group’s work is ongoing. Preliminary findings could be made public by summer. Republican House members are conducting their own probe, but complain that Democrats refuse to cooperate or share records with their GOP colleagues. The Senate Committee on Homeland Security and Governmental Affairs, and the Committee on Rules and Administration, issued a report on the Capitol breach that cited a range of intelligence and law enforcement failures that enabled the violence. Among the findings in the Senate report was that neither the FBI nor the Department of Homeland Security issued formal intelligence bulletins about the potential for violence at the Capitol on Jan. 6. The FBI’s Norfolk field office sent out a situational information report late on Jan. 5, warning of individuals traveling to Washington for “war” at the Capitol, but the agency overall didn’t view as credible online posts calling for violence. Capitol Police didn’t have a department-wide operational plan or staffing plan for the Jan. 6 joint session of Congress, the report said. It faulted a lack of training in civil disturbances and a failure to provide basic protective equipment to rank-and-file officers. Who Incited the Capitol Breach and Violence? Independent media and online sleuths sounded alarms about the presence of unindicted individuals among those who first breached the Capitol at about 12:50 p.m. These men played a central role in the breach, encouraged protesters to go to the Capitol, and directed people into the building. Yet they haven’t been arrested, indicted, or identified by the FBI as among the wanted. Who were they? A man—now known to be Ray Epps of Queen Creek, Arizona—was captured on video on Jan. 5, 2021, attempting to recruit Trump supporters to assault the Capitol the next day. “Tomorrow, we need to go into the Capitol,” Epps says, as seen in a video clip. “Into the Capitol!” A man near him says, “What?” and others are heard shouting, “No!” Then the crowd breaks into a chant: “Fed! Fed! Fed! Fed!”—accusing Epps of being a federal agent. Ray Epps seen on Jan. 5, 2021, trying to recruit men to attack the Capitol. They accuse him of being a federal agent. (CapitolPunishmentTheMovie.com/Bark at the Hole Productions) Epps gets into verbal sparring with some of the Trump supporters. “You’re counterproductive to our cause,” one young man shouts. Epps shouts back, staying on message: “It doesn’t matter. … That’s not what we’re here for. … You’re getting off the subject. … We’re here for another reason.” Another video shows Epps saying, “Tomorrow—I don’t even like to say it because I’ll be arrested,” prompting a man nearby to reply, “Then let’s not say it.” Epps responds: “I’ll say it. We need to go into the Capitol!” A young man in the crowd, wearing an American flag neck gaiter, replies, “I didn’t see that coming!” On Jan. 6, as crowds milled about the Washington Monument in long lines to get in to watch Trump’s speech, Epps could be heard shouting through a megaphone: “As soon as our president is done speaking, we are going to the Capitol, where our problems are. It’s that direction. Please spread the word!” Epps is seen again in video footage taken at the metal barricades outside the Capitol at 12:50 p.m., as a small crowd chants, “USA! USA!” He whispers something in the ear of a man wearing a backward Make America Great Again cap. A few seconds later, the young man helps push over the barricade as Epps steps back to watch. This first breach of the security perimeter was 20 minutes before Trump finished his speech. Epps is then seen sprinting with the crowd up the steps toward the Capitol. A few days after the Jan. 6 violence, the FBI placed a photo of Epps on a “Seeking Information” poster, asking for the public’s help in identifying those who breached the Capitol. He could be seen in Photograph No. 16. That photo has since been scrubbed from the FBI website. Ray Epps is shown at lower left on an early FBI wanted poster, but his photo has since been scrubbed from the FBI website. (FBI.gov/Wayback Machine) On the current list of 1,559 photographs of people the FBI wants to identify, there is no longer a No. 16. The list skips from Photograph No. 15 to Photograph No. 17. Epps hasn’t been arrested or charged. John Guandolo, a former FBI agent and counter-terrorism expert who was on the Capitol grounds on Jan. 6, said he saw FBI agents dressed as protesters. “For a good portion of the day, I was with law enforcement, FBI, etcetera,” Guandolo said in an interview for the documentary “Capitol Punishment.” “Guys would walk by, and we’d look at each other and be like, ‘Two more right there. Here comes another. There’s another one.’ They were everywhere.” Revolver, an alternative news outlet, identified others around the Capitol grounds who were active participants in the breach but whose photos weren’t included on the FBI’s wanted list. One man, wearing a grey Bulwark jacket, knit cap, and sunglasses, is seen on video rolling up the green plastic fencing around the security perimeter. He pulls up the stakes and removes the “Area Closed” signs. A man in a blue cap with a blue bullhorn is seen in multiple videos atop the media tower erected for the inauguration. Dubbed “Scaffold Commander” by online researchers, he barks out directives and encouragement for 90 minutes. “Don’t just stand there! Keep moving!” “Move forward! Help somebody over the wall!” Once the crowd filled in around the Capitol, Scaffold Commander switched gears. “We’re in! Come on! We gotta fill up the Capitol! Come now, we need help!” Revolver’s video investigation said that whether or not Epps and Scaffold Commander knew each other, their words and actions worked well together. “So we have Scaffold Commander directing the body of the crowd from the tower above, and Ray Epps directing the vanguard front-liners at the police line below,” the Dec. 18 story read. “Yet neither one of them has been prosecuted, nor is either presently ‘wanted’ by the FBI.” Revolver founder Darren Beattie took to Twitter to ask Epps to expose who his handlers were. “But now, it is time to think for yourself, Ray. Forget about your boat and your ranch and your grill. If you make the right move and tell the truth, you change everything,” Beattie wrote on Dec. 29. Neither Epps, the FBI, nor federal prosecutors have commented on Epps’s actions that day, on whether he worked for the FBI, or on why he hasn’t been indicted. Epps told an Arizona Republic reporter on Jan. 12, 2021, “I didn’t do anything wrong.” Rep. Thomas Massie (R-Ky.) asked Attorney General Merrick Garland on Oct. 21 to dispel concerns about the Epps videos, but Garland wouldn’t comment. I just played this video for AG Merrick Garland. He refused to comment on how many agents or assets of the federal government were present in the crowd on Jan 5th and 6th and how many entered the Capitol. pic.twitter.com/lvd9n4mMHK — Thomas Massie (@RepThomasMassie) October 21, 2021 “You’ve said this was one of the most sweeping investigations in history,” Massie said during a public hearing. “Have you seen that video, those frames from that video?” Garland began talking about a standing practice of not commenting on investigative specifics, before Massie interrupted him: “How many agents or assets of the federal government were present on January 6th, whether they agitated to go into the Capitol, and if any of them did?” Garland’s reply: “I’m not going to comment on an investigation that’s ongoing.” What Is the Significance of Unindicted Actors? Attorneys who represent Jan. 6 defendants say if Epps or other participants were FBI informants or agents, then it blows a hole in the idea that Trump supporters were solely responsible for violence at the Capitol. Participation by government actors could legally invalidate conspiracy charges, they say. Attorney Jonathon Moseley, who represents Jan. 6 defendant Kelly Meggs of Dunnellon, Florida, a member of the Oath Keepers, issued subpoenas to Epps, Oath Keepers founder Stewart Rhodes, and other men who played visible roles on Jan. 6. As Meggs’s April trial on conspiracy charges approaches, Moseley wants to know why Epps was at the Trump rally and Capitol, and whether he was working for the government. Moseley said Epps was seen at the first breach of a police line at the pedestrian walkway, about 200 yards from the Capitol building. Video shows Epps as he appears to rush the makeshift barricade erected by police, “then stops short,” Moseley said. Ray Epps at the U.S. Capitol on Jan. 6, 2021, shortly before pepper gas is shot into the crowd. “Been a long time,” he says after coughing. “Aah, I love it!” (Screen Capture/Rumble) “It’s like he’s head-faking people to rush with him, but then he never touches it,” he said. “A police officer falls—I think it may be a woman—and his immediate instinct is to go help her, and he thinks better of it and steps back. It really looks like he’s undercover.” Moseley said the involvement of government-paid actors in facilitating or inciting the breach of the Capitol complex would create reasonable doubt in just about any of the Jan. 6 cases. “There are legal consultants who keep emphasizing that, legally, you can’t conspire with the government. So if he’s working directly or indirectly for the government, then people are innocent of the conspiracy,” Moseley said. “It’s a legal rule. If there are 10 people conspiring and one of them is with the government, not only could it be entrapment, but it also may invalidate a conspiracy.” That type of legal issue has been raised in a Michigan case in which a group of men stand accused in federal court of a plot to kidnap Michigan Gov. Gretchen Whitmer, a Democrat. Defense attorneys recently filed a motion to dismiss the case, contending that government agents and informants concocted the kidnapping plan and pushed to convince the defendants to participate. Are Jan. 6 Detainees Political Prisoners? Third-world banana republics are notorious for terrible prison conditions and brutal treatment of the accused and convicted alike. Some lawyers, family members, and defendants believe the District of Columbia operates a jail that would be at home in any of those countries. The jail is sometimes called “DC-GITMO,” after the U.S.-run terrorist detention camp in Guantánamo Bay, Cuba. The poor accommodations at the D.C. jail have long been the subject of discussion in the nation’s capital. The Washington Post said conditions there were “deplorable,” an ironic descriptor, considering who the jail’s primary occupants are these days. The issue got national attention in 2021 because of repeated allegations of brutal, abusive treatment of men accused of Jan. 6 crimes. A 28-page report issued in late 2021 by Rep. Marjorie Taylor Greene (R-Ga.) said treatment of Jan. 6 detainees was “inhumane.” (Document Cover/Marjorie Taylor Greene) “American citizens are being tortured right now within five miles of the White House,” said Joseph McBride, a New York attorney who represents a half-dozen Jan. 6 defendants. “America does not punish its citizens pre-trial,” McBride wrote on Twitter. “Authoritarian regimes do.” McBride said his clients have suffered treatment that should never happen in America, all because they supported Trump by being at the U.S. Capitol on that fateful day. During incarceration, they’ve suffered—among other things—severe beatings by guards; the denial of medical attention, including medications for chemotherapy; and refusal of food, McBride said. Christopher Quaglin, charged with assaulting police officers during the riot, suffers from celiac disease, but the jail feeds him only food with gluten, McBride said. He has been refused medical treatment. “Yes, we are extremely concerned that he will die,” McBride wrote on Twitter on Dec. 27. Ted Hull, the superintendent of Northern Neck Regional Jail, where Quaglin is housed, said McBride’s assertions are wrong. Christopher Quaglin with his wife, Moria, who fears her husband could die without medical attention in federal custody. (Courtesy Quaglin Family) “Regardless of Mr. McBride’s fictitious assertions,” Hull told The Epoch Times, “inmate Quaglin is and has been receiving the appropriate dietitian-designed diet consistent with his specific dietary requirements and the appropriate level of medical services consistent with his diagnosis.” Rep. Marjorie Taylor Greene (R-Ga.) toured the D.C. jail with Rep. Louie Gohmert (R-Texas) in November, then issued a 28-page report titled “Unusually Cruel.” The report said the conditions for the Jan. 6 detainees were “inhumane.” Couy Griffin, the founder of Cowboys for Trump who attended the Jan. 6 Trump rally and was on the Capitol grounds, never went inside the Capitol building. He was charged with entering and remaining in a restricted building, and disorderly and disruptive conduct in a restricted building. He was arrested and jailed, but eventually released while awaiting trial. “I spent the next nine days in that cell in total solitary confinement. No shower, no phone, no attorney,” Griffin said in the film “Capitol Punishment.” The guards, he said, often chanted “F Trump! F Trump!” and called him an “[expletive] white cracker.” He complained about his treatment to the deputy warden, who he said told him, “The only job these guards have is to keep your chest moving up and down.” Richard Barnett of Gravette, Arkansas, faced seven charges for his alleged actions on Jan. 6, including sitting in the office chair of House Speaker Nancy Pelosi, captured in a now-iconic news photograph. One day during his four-month detention, Barnett experienced tightness in his chest and arm pain. He called for help, but the guard who responded only mocked and laughed at him. Barnett then called out to a female staff member, who said she would get help. “Richard [lay] there for a significant period of time—certainly enough for him to die,” read McBride’s report on jail conditions, which he sent to Amnesty International. After being given a medical checkup and returned to his cell, Barnett fell asleep. A guard began pounding on the glass door to his cell, jolting him awake so quickly he stood up and then fainted, hitting his head on the sink. Now bleeding from a head wound, Barnett screamed for an hour before help came, the report said. One day, Barnett’s cell door opened, and some nine officers entered, cuffing his wrists and shackling his legs. Guards violently shook him back and forth, lifted him off his feet by the shackles, and slammed him headfirst into the concrete floor, according to McBride’s report, a copy of which was also sent to the American Civil Liberties Union. The U.S. Marshals Service conducted a surprise inspection of the D.C. jail facilities in October and interviewed 300 detainees. Conditions at the jail “do not meet the minimum standards of confinement,” the Marshals report said. As a result, the Marshals Service removed all of its detainees and transferred them to facilities in the federal Bureau of Prisons. This didn’t include the Jan. 6 detainees. Emery Nelson, spokesperson for the Bureau of Prisons, said the agency doesn’t comment on “anecdotal allegations” or provide information about individual inmates. “The Bureau of Prisons (BOP) is committed to accommodating the needs of federal offenders and ensuring the safety and security of all inmates in our population, our staff, and the public,” Nelson said. “The BOP takes seriously our duty to protect the individuals entrusted in our care.” Who Died at the Capitol on Jan. 6? One person was killed at the hands of U.S. Capitol Police, and police action might have contributed to the death of two others, but the four other deaths related to Jan. 6 were either from natural causes or suicides. Ashli Babbitt was shot in the left shoulder and killed as she crawled through a broken window at the entry to the Speaker’s Lobby. Ashli’s husband, Aaron Babbitt, said a careful examination of video footage from the hallway indicates Ashli was upset with rioters who smashed glass in the double doors. He thinks she panicked and sought escape through the window, only to be shot by Lt. Michael Byrd as a result. She was unarmed and presented no threat to anyone, Aaron Babbitt said. Capitol Police Lt. Michael Byrd aims his Glock 22 at the window where Ashli Babbitt was about to appear. (CapitolPunishmentTheMovie/Bark at the Hole Productions) Rosanne Boyland, 34, of Georgia, died in or near the West Terrace tunnel at the Capitol. McBride says surveillance video shows Boyland was beaten by a police officer as she lay on the ground. The D.C. medical examiner ruled the death accidental: intoxication from a prescription medication. Kevin Greeson, 51, of Georgia, died on the Capitol grounds of a heart attack brought on by cardiovascular disease, the medical examiner ruled. Benjamin Phillips, 50, of Pennsylvania, died of atherosclerosis, heart disease characterized by fatty plaques that build up in the arteries, the medical examiner ruled. Of the three police officers who died in the weeks following Jan. 6, Sicknick died from natural causes, and Liebengood and Smith died from suicide. Did Democrats Weaponize Jan. 6? Rep. Rodney Davis (R-Ill.), ranking member of the Committee on House Administration, accused House Speaker Nancy Pelosi (D-Calif.) and House Democrats of “weaponizing events of January 6th against their political adversaries.” Davis sent a letter to Pelosi on Jan. 3, 2022, complaining that House Democrats repeatedly obstructed attempts by Republican lawmakers to investigate security vulnerabilities at the U.S. Capitol before and during Jan. 6 violence. The obstruction came through denial of House records and ignoring repeated requests for documents, Davis wrote. “Unfortunately, over the past twelve months, House Democrats have been more interested in exploiting the events of January 6th for political purposes than in conducting basic oversight of the security vulnerabilities exposed that day,” Davis wrote. Specifically, lawmakers want to know about a request that former U.S. Capitol Police Chief Steven Sund said he made to then-House Sergeant-at-Arms Paul Irving prior to Jan. 6 for “the assistance of the National Guard,” Davis wrote. Sund reported that Irving was “concerned about the ‘optics’ of a National Guard presence at the Capitol.” During violence on Jan. 6, when Sund asked about getting authorization for the National Guard, Irving responded that he “needed to run it up the chain of command,” the letter said. Former U.S. Capitol Police Chief Steven Sund testifies at a Senate Homeland Security and Governmental Affairs and Senate Rules and Administration committees joint hearing on Capitol Hill in Washington on Feb. 23, 2021. (Erin Scott/Pool/AFP via Getty Images) In February 2021 testimony before the U.S. Senate, Irving denied Sund’s claims. Republican lawmakers then requested access to Irving’s communications to substantiate that denial. Davis said he wrote to House General Counsel Douglas Letter to request those records, but Letter never replied. “Both the Sergeant at Arms and the chief administration officer failed to produce any documents to Republicans pursuant to our requests,” Davis wrote, “suggesting that these House officers may be providing documents only to Democrats on a partisan basis.” Davis said Republicans want to know why Sund’s Jan. 4, 2021, request for National Guard support on Jan. 6 was denied, and whether Pelosi or her staff ordered the refusal. They also want to know what conversations occurred during Capitol violence on Jan. 6, when Sund again asked for National Guard help. Finally, they want to know why the select committee on Jan. 6, appointed by Pelosi, won’t examine the speaker’s role “in ensuring the proper House security preparations,” the letter said. When asked whether the speaker had responded to Davis, Henry Connelly, Pelosi’s communications director, referred The Epoch Times to a statement issued by House Administration Committee Chair Zoe Lofgren (D-Calif.). “The Ranking Member’s letter is pure revisionist fiction. The Chief Administrative Officer and House Sergeant at Arms have already notified Ranking Member Davis they are complying with preservation requests and will fully cooperate with various law enforcement investigations and bonafide congressional inquiries,” Lofgren said in the statement. From the inception of the Select Committee to Investigate the January 6th Attack on the United States Capitol, Republican leadership discounted its work because Pelosi rejected two of the five Republicans chosen by House Minority Leader Kevin McCarthy (R-Calif.) for the probe. McCarthy then withdrew his picks. Pelosi appointed Reps. Liz Cheney (R-Wyo.) and Adam Kinzinger (R-Ill.) to serve on the nine-member panel. The select committee could issue at least an interim report by mid-2022 and a final report in the fall, committee sources told several media outlets. Committee chairman Rep. Bennie Thompson (D-Miss.) said in December that there was no set schedule for public hearings to release the group’s findings. The Epoch Times asked the Department of Justice for comment on the presence of federal agents on Jan. 6, but didn’t receive a reply by press time. The Epoch Times contacted Epps through his business for comment, but didn’t receive a reply by press time. Tyler Durden Thu, 01/06/2022 - 16:20.....»»

Category: blogSource: zerohedgeJan 6th, 2022

Turkey Halts All Stock Trading As Currency Disintegrates, Central Bank Powerless To Halt Collapse

Turkey Halts All Stock Trading As Currency Disintegrates, Central Bank Powerless To Halt Collapse Another day, another collapse in the Turkish lira, only this time there was a twist: as the hyperinflating currency implodes, Erdogan has finally had enough of the relentless pummeling, and is starting to shut down Turkey's markets. But first, let's back up: heading into Friday, the lira accelerated its historic descent, weakening past the 16 per-dollar mark for the first time ever, as the central bank's pledge to end a four-month cycle of interest rate cuts on Thursday failed to convince investors that inflation can be brought to heel. That was just the start however, and the currency plunge only accelerated crashing as low as 17.14 just hours later, bringing declines this week to 17%. YTD the currency has lost more than half of its value! As a reminder, the central bank yesterday cut its benchmark one-week repo rate by a further 100 basis points to 14%, its fourth reduction since September spurred by demands from President Recep Tayyip Erdogan to lower borrowing costs in the face of surging consumer prices as part of his batshit insane monetary policy Erdoganomics whose only possible outcome is the collapse of Turkey's economy and hyperinflation. The resulting sell-off accelerated a 54% plunge in the currency so far this year as real rates fall further below zero with inflation now standing at an annual 21.3%. Erdogan then responded to the economic pain caused by rising prices by ordering a 50% increase in the minimum wage next year, guaranteeing even more inflation as it will increase production costs that will see inflation accelerate by a further 2% to 8% next year, Erkin Isik, chief economist at QNB Finansbank, wrote in a note to clients. In any case, once the lira plunged to 17, the central bank spent another billion or so intervening, its 5th intervention just in December. Needless to say, this intervention like all those preceding it, had a half-life of just a few minutes, and shortly after the USDTRY was trading back at just shy of all time highs. And then, a stunning new development: as Bloomberg reports, all trades on Turkey’s benchmark stock index Borsa Istanbul 100 were halted after a sudden plunge in stocks - which until now were trading gingerly higher as one would expect in a time of runaway inflation - triggering a market-wide circuit breaker. Trading of equities, equity derivatives and debt repo transactions were “halted temporarily” at 4:24 p.m. in Istanbul after the index reversed gains and fell as much as 5%, according to a public filing. Trading was scheduled to restart at 4:54 p.m, however we are confident it will only lead to more selling. And this is what the realization that hyperinflation has arrived and may not be good for stocks looks like: Of course, such attempts to halt a panic only make it worse, and sure enough, the furious selling only accelerate after the reopen, leading to another halt... ... and headlines such as these: HSBC MSCI TURKEY UCITS ETF SINKS TO RECORD LOW TURKISH STOCK INDEX CRASHES 9%, MOST SINCE MARCH The bottom line, as Delphine Arrighi from Guardcap Asset Management, said “Turkey has entered some uncharted territories here by responding to rampant inflation with rate cuts. As long as real rates remain negative, dollarization will continue to add pressure on the currency.” For what it's worth, our view is clear and what is happening is very much charted: it is our view that Erdogan is purposefully hoping to spark economic collapse and hyperinflation... Is Erdogan trying to singlehandedly destroy the Turkish economy to deflect attention from the billions he has pillaged — zerohedge (@zerohedge) December 16, 2021 ... to deflect from the historic pillaging he and his cronies have done over the years. And the only way to do that is with a broad economic collapse that he can pin on "foreign intervention" and in the ensuing chaos, quietly sneak out of the country. A few coup or two should help. Tyler Durden Fri, 12/17/2021 - 09:06.....»»

Category: blogSource: zerohedgeDec 17th, 2021

Evergrande Has Finally Defaulted: Here"s What Happens Next

Evergrande Has Finally Defaulted: Here's What Happens Next This is the way Evergrande ends: not with a bang but a whimper. Three months after an initial shockwave of fear that China's largest and most indebted property developer was set to default, roiled global markets only to see the company repeatedly kick the can on several occasions even as the final default was always just a matter of when not if (due to billions in interest payments and tens of billions in upcoming debt maturities), overnight ratings agency Fitch (with Moodys and S&P set to follow shortly) officially downgraded insolvent property developers China Evergrande Group and Kaisa Group, saying they had defaulted on offshore bonds. The downgrades to so-called "restricted default" status came days after the companies failed to make an offshore bond interest payment, even though Evergrande and Kaisa have not officially announced defaults that will result in drawn-out debt restructuring processes and potentially nationalization. In its note on Evergrande, Fitch said the developer - which failed to make overdue coupon payments on two bonds by the end of a 30-day grace period on Monday -did not respond to its request for confirmation on coupon payments worth $82.5 million that were due last month, with the 30-day grace period ending this week, and so assumed "they were not paid."  On Tuesday, S&P said that a default by the developer was “inevitable" and is likely to declare a Selective Default event momentarily to keep in line with Fitch. Fitch defines a restricted default as indicating an issuer has experienced a default or a distressed debt exchange, but has not begun winding-up processes such as bankruptcy filings and remains in operation. The non-payment has triggered an "event of default" on Evergrande's bonds and its other U.S. dollar notes will become due immediately and payable if the bond trustee or holders of at least 25% in aggregate amount declare so, Fitch said. The same "cross default" is true for Kaisa, which, according to Refinitiv data, has note maturities totlling $2.8 billion next year, and $2.2-3.2 billion of maturities each year between 2023 and 2025. Fitch said there was limited information available on Kaisa's restructuring plan after it missed $400 million in offshore bonds repayment on Tuesday. Evergrande said last week it planned to forge ahead with a restructuring of its debt. * * * As extensively reported here for the past year, and especially since August, the fate of Evergrande which has more than $300 billion in liabilities, and other indebted Chinese property companies has gripped financial markets in recent months amid fears of knock-on effects around the world, although Beijing has repeatedly sought to reassure investors. "The defaults of Evergrande and Kaisa move us to the second step of this China Property downturn, with systemic risk being gradually replaced by idiosyncratic risk," said Robin Usson, credit analyst at Federated Hermes. He is of course referring to the much bigger risk that is the downturn in China's residential - and in general property - sector, which as Goldman recently showed is the world's largest asset and arguably the most important pillar propping up China's entire economy. Should China's housing market crash, all bets are off. The question now is just how aggressively will the state come to the economy's rescue to avoid a self-reinforcing toxic spiral. After all, just last week the PBOC finally capitulated and reversed on its long-running position of avoiding excess stimulus when it unexpectedly cut RRR and proceeded to hint that more is coming. "It will be interesting to see the role played by SOEs (state-owned enterprises) in the restructuring process, the level of 'control' exerted by the government over this 'marketed-oriented approach'," Usson added. Ahead of the Fitch determination, PBOC Governor Yi Gang said on Thursday that rights of Evergrande shareholders and creditors would be "fully respected" based on their legal seniorities, and the risk caused by a few Chinese real estate companies in the short term would not undermine Hong Kong's capital market. Meanwhile, Reuters reports that Kaisa is expected to soon sign a non-disclosure agreement with Lazard, the adviser of a group of bondholders, the source and another person told Reuters. The bondholders hold over 25% of Kaisa's $12 billion offshore bonds. The NDA will lay the groundwork for further discussions on forbearance and financing solutions. But an agreement is unlikely in the next few weeks as the talks are still at an early stage.  Kaisa said it was open to talks on forbearance, but declined to comment on details. The group of Kaisa offshore bondholders, which says it owns 50% of the notes that were due on Dec. 7, sent the company draft terms of forbearance late on Monday. The group previously offered $2 billion in fresh debt to help Kaisa repay its onshore and offshore debts, sources have said. Other financing ideas are also on the table. Kaisa is also in talks with another bondholder group, the first person said. Kaisa's default came after it failed last week to secure the minimum 95% approval needed from offshore bondholders to exchange the bonds that were due Dec. 7 for new notes due June 6, 2023, at the same interest rate. Trading in Kaisa's shares, which have lost 75% this year, was suspended on Wednesday. Evergrande's stock has plunged 88% this year. * * * So what happens to Evergrande next? First and foremost, today's news is not a surprise, with Evergrande bonds having already tumbled to record lows this week, after a flurry of news reports and leaks last week made it abundantly clear that billionaire Hui Ka Yan’s property giant is headed for China’s largest-ever debt restructuring. As Bloomberg notes, barring a last-minute shock, holders of $19.2 billion in Evergrande dollar notes face deep haircuts as the company overhauls its mammoth balance sheet without a government bailout - a process that promises to be long, contentious and potentially risky for Asia’s largest economy. The developments mark the beginning of the end for the sprawling real estate empire started 25 years ago by Hui, setting off a lengthy battle over who gets paid from what remains. Evergrande said in a brief exchange filing on Friday that it plans to “actively engage” with offshore creditors on a restructuring plan. The company is planning to include all its offshore public bonds and private debt obligations in the restructuring, people familiar with the matter said Monday. Evergrande, which had more than $300 billion of liabilities as of June, becomes the biggest victim of President Xi Jinping’s efforts to crack down on the free-wheeling real estate sector and curb property speculation. As Bloomberg notes, "Beijing’s reluctance to bail out the developer sends a clear signal that the Communist Party won’t tolerate massive debt build-ups that threaten financial stability." It's also a signal that billionaires who made their fortunes off unviable businesses will not be spared. But the question now is whether the government can limit the fallout. The bonds of many smaller, lower-rated real estate firms have also plunged in recent weeks, driving Chinese junk bond yields (which mostly cover the property market) to a record yield above 20%, though they were poised for a second day of gains Wednesday after Beijing’s easing signals injected confidence (and liquidity) into the market. No less than 10 firms have already defaulted on onshore or offshore bonds since concerns about Evergrande’s financial health intensified in June, leading to a freeze in the bond market and a collapse in real estate transactions. While Kaisa is already in default, other peers are sure to follow: China Aoyuan Group said last week there’s no guarantee it will be able to pay its debt. Meanwhile, the giant red flag is the continued collapse of home sales and prices as confidence in China's massive housing ponzi scheme evaporates, which has adding another headwind for an economy grappling with sluggish growth. “They’re playing with fire,” said Cathie Wood, the head of Ark Investment Management, which pared its China holdings earlier this year. For now, Chinese authorities are signaling that they plan to ring-fence Evergrande and limit contagion rather than orchestrate a rescue as they’ve done during past crises. Whether and how they can do that, will determine if 2022 is a year of recovery and normalization - as JPMorgan wrote in its year ahead outlook - or a global depression. While the People’s Bank of China reiterated on Friday that risks posed to the economy by Evergrande’s debt crisis can be contained, citing the developer’s “own poor management” and “reckless expansion” for the problems it faces, the reality is that without government backstop it is likely that China's housing market will collapseand Beijing knows this. The China Banking and Insurance Regulatory Commission said in a separate statement that loans for real estate development and acquisitions should be issued in a “reasonable” manner. But the clearest financial system support measures came on Monday, when China’s central bank released 1.2 trillion yuan ($188 billion) of liquidity via a cut in the reserve requirement ratio for most banks, a move which while expected came too fast and surprised most analysts and prompting the WSJ to write that "Beijing Reins In China’s Central Bank" in which it wrote: Earlier this week, pressured by senior leaders worried about plunging economic growth, the PBOC said it would ease banks’ reserve requirements, effectively making more cash available for bank lending. The move went against policy signals it had sent weeks earlier and came as the central bank and other financial institutions came under scrutiny by Beijing, part of Mr. Xi’s effort to curb capitalist forces in the economy. That was the tipping point. Shortly thereafter, the government pledged to support the housing market to better meet “reasonable” needs, adding to signs it will ease real estate curbs, first discussed here last month. As part of the upcoming nationalization of Evergrande, officials are starting to take a more hands-on role at Evergrande. Chairman Hui was summoned by the Guangdong government last week after the company said it plans to work with creditors on a restructuring plan. Authorities in Evergrande’s home province will send a working group to urge the builder to manage risks, as well as strengthen internal controls and ensure normal operations. The company on Monday said state representatives have taken the majority of seats on a new risk management committee. So far, containment efforts haven’t assuaged investors. While pain has so far largely been contained to China’s smaller offshore credit market, that’s little consolation for developers that have relied heavily on international investors to raise funds. Borrowing costs have spiked for companies with the weakest balance sheets, including Kaisa and Fantasia Holdings Group Co. In total, Bloomberg calculates that Chinese borrowers have defaulted on a record $10.2 billion of offshore bonds this year, with real estate firms making up 36% of that. “There is extreme stress in the market,” with about half the developers in the country in deep financial distress and pricing in high default risk, said Jenny Zeng, co-head of Asia Pacific fixed-income at Alliance Bernstein. That said, China’s bigger, higher-rated developers such as Longfor Group Holdings and Country Garden Holdings are holding up much better than their lower-rated rivals. Country Garden, the largest developer by sales, has seen its 2031 bond rebound to 88 cents on the dollar, after dropping to 73 cents last month. A 2024 note sold by China Vanke Co., the second-biggest firm, has rallied to trade above par. “We expect sector divergence to continue,” said Iris Chen, a credit desk analyst at Nomura Securities Co. “The high-quality survivors of the game will gain despite relatively high cash prices already, as they will have a better chance to restart normal refinancing, which will further strengthen their liquidity.” But most importantly, as noted earlier, China is desperate to limit the fallout on the broader housing market, in a country where real estate accounts for about a quarter of economic output and as much as 75% of household wealth as we have noted for half a decade.  China’s housing slump has intensified in recent months after sales plunged and home prices fell for the first time in six years. Contract sales by the country’s top 100 developers plunged 38% in November from a year earlier to 751 billion yuan, sharper than the 32% drop in the previous month, according to preliminary data from China Real Estate Information Corp. As we explained in detail recently, any slowdown in real estate could have a ripple effect not only on China’s economy but on global growth. China’s growth slowed in the third quarter, with signs there will be more pain to come. The Federal Reserve last month warned that fragility in China’s commercial real-estate sector could spread to the U.S. if it deteriorates dramatically. China’s real estate sector makes up almost half of the world’s distressed dollar-denominated debt. Critically, Beijing has finally realized that its latest doomed attempt at deleveraging and avoiding liquidity injections has been a failure, and on Monday President Xi oversaw a meeting of the Communist Party’s Politburo that concluded with a signal of an easing in curbs on real estate. The leadership panel, gathering in advance of a broader annual economic session that sets goals for the coming year, pledged to stabilize the economy in 2022. Meanwhile, for global bondholders, an Evergrande default is likely to start a prolonged battle for repayment. Chinese authorities have made it clear the company should put homebuyers, suppliers, and retail investors -- who bought the firm’s wealth management products -- ahead of debtholders. Some 1.6 million homebuyers have put down deposits with Evergrande for properties that have yet to be completed. “No matter what the outcome, offshore bondholders are last in line for payment and are certainly going to have to accept haircuts, possibly significant ones,” said Andrew Collier, managing director of Orient Capital Research Inc. in Hong Kong. With Evergrande’s dollar notes trading at about 20 cents on the dollar, the market is already pricing in a haircut of around 80%. The key for bondholders is whether the company can speed up home sales and unload assets to raise cash so it can start settling its liabilities, said Gary Ng, a senior economist at Natixis SA. As Bloomberg reported recently, Evergrande’s offshore noteholders included Ashmore Group Plc and UBS AG, according to data compiled by Bloomberg. Even as Evergrande’s stock and bond prices have plunged, Ashmore bought another $100 million of bonds issued by the developer or its subsidiaries in the third quarter. The trades brought its holdings to more than $500 million at the end of September, the data show. Further market reaction to Evergrande’s missed payments may be driven by how the restructuring process plays out, said Jim Veneau, head of Asian fixed income at AXA SA.  “An orderly restructuring, where the company can run its operations as normally as possible and refrain from distressed asset sales will substantially help contain further damage across the sector,” Veneau said. The single biggest loser in dollar terms may be Evergrande founder Hui, who once owned more than 70% of the company before recent stock sales. The plunge in Evergrande’s share price this year has cut the chairman’s wealth by 73%, or about $17 billion, according to the Bloomberg Billionaires Index. Once the second-richest man in China, Hui now ranks 75th. For years, the son of an impoverished wood cutter who built one of China’s biggest real estate firms and later branched out into electric vehicles, tourism and soccer clubs, has been able to count on the support of Beijing, or other tycoons to bail him out. This time, he appears on his own. The bottom line, however, was summarized best by China Beige Book: "while direct fallout from the Evergrande bankruptcy - which has been telegraphed for months - won't be the problem, the problem is having a billion Chinese watch this play out, then expecting them to spend afterward." Tyler Durden Thu, 12/09/2021 - 09:21.....»»

Category: personnelSource: nytDec 9th, 2021

Black Friday Turns Red On "Terrible News" - Global Markets Crater On "Nu Variant" Panic

Black Friday Turns Red On "Terrible News" - Global Markets Crater On "Nu Variant" Panic The Friday after thanksgiving is called black Friday because that's when retailers finally turn profitable for the year. Not so much for market, however, because this morning it's red as far as the eye can see. The culprit: the same one we discussed late last night - the emergence of a new coronavirus strain detected in South Africa, known as B.1.1.529, which reportedly carries an "extremely high number" of mutations and is “clearly very different” from previous incarnations, which may drive further waves of disease by evading the body’s defenses according to South African scientists, and soon, Anthony Fauci. British authorities think it is the most significant variant to date and have hurried to impose travel restrictions on southern Africa, as did Japan, the Czech Republic and Italy on Friday. The European Union also said it aimed to halt air travel from the region. "Markets have been quite complacent about the pandemic for a while, partly because economies have been able to withstand the impact of selective lockdown measures. But we can see from the new emergency brakes on air travel that there will be ramifications for the price of oil," said Chris Scicluna, head of economic research at Daiwa. As a result, what was initially just a 1% drop in US index futures, has since escalated to a plunge of as much as 2% with eminis dropping the most since September, at one point dropping below 4,600 after closing on Wednesday above 4,700 as a post-Thanksgiving selloff spread across global markets amid mounting concerns the new B.1.1.529 coronavirus variant - which today will be officially called by the Greek lettter Nu - could derail the global economic recovery.  Russell 2000 contracts sank as much as 5.4%. Technology shares may be caught in the net too as Nasdaq 100 futures slid. The VIX increased as much as 9.4 vols to 28, it's biggest jump since January. It was last seen up 7.4 points, or the biggest increase since February. Adding to the pain, there is nothing on today's macro calendar and the US market closes early which will reduce already dismal liquidity even more, exacerbating some of the moves throughout the session. Headlines are likely to center on various nations preventing travel from South Africa whilst potentially imposing more stringent COVID measures domestically, as well as which countries "find" the Nu variant. Amid the panicked flight to safety, 10Y TSY yields tumbled as traders slashed bets on monetary tightening by the Federal Reserve (just hours after Goldman predicted that the Fed would double the pace of its taper and hike 3 times in 2022, oops) ... ... as did oil amid fears new covid lockdowns will lead to a collapse in crude demand (they will also certainly force OPEC+ to put on pause their plans to keep hiking output by 400K every month). Paradoxically, even cryptos are tumbling, which is surprising since even the dumbest algos should realize by now that a new covid outbreak means more dovish central banks, no tightening, and if nothing else, more QE and more liquidity which is precisely what cryptos need to break out to new all time highs. Cruise ship operator Carnival slumped 9.1% in premarket trading and Boeing slid 5.8% as travel companies tumbled worldwide. Stay-at-home stocks such as Zoom Video rallied.  Didi Global shares fell after Chinese regulators reportedly asked the ride-hailing giant to delist from U.S. bourses. Here are some of the other big premarket movers: Airlines and other travel stocks slumped in premarket trading on growing concern about a new Covid-19 variant identified in southern Africa. The European Union is proposing to halt air travel from several countries in the area and the U.K. will temporarily ban flights from the region. United Airlines (UAL US) fell 8.9%, Delta Air (DAL US) -7.9%, American Airlines (AAL US) -6.7%; cruiseline-operator Carnival (CCL US) -12%; hotelier Marriott (MAR US) -6.1%; lodging company Airbnb (ABNB US) -6.9%. Stay-at-home stocks that benefit from higher demand in lockdowns rose in premarket, with Zoom Video (ZM US) gaining 8.5% and fitness equipment group Peloton (PTON US) +4.7%. Vaccine stocks surged in premarket, while Pfizer and BioNTech got an added boost after their coronavirus shot won European Union backing for expanded use in children. Moderna (MRNA US) rose 8.8%, Novavax (NVAX US) +6.2%, Pfizer (PFE US) +5.1%, BioNTech (BNTX US) +6.4%. Small biotech stocks gained in premarket as investors sought havens. Ocugen (OCGN US) added 22%, Vir Biotechnology (VIR US) +7.8%, Sorrento Therapeutics (SRNE US) +5%. Cryptocurrency-exposed stocks fell as Bitcoin dropped as investors dumped risk assets. Marathon Digital (MARA US) declined 9%, Riot Blockchain (RIOT US) -8.8%, Coinbase (COIN US) -4.6%. Didi Global (DIDI US) declined 6% in premarket after Chinese regulators were said to have asked the ride-hailing giant to delist from U.S. bourses. Selecta Biosciences (SELB US) dropped 13% in Wednesday’s postmarket ahead of Thursday’s Thanksgiving closure, after saying the U.S. FDA placed a clinical hold on a trial. Quotient Technology (QUOT US) gained 3.9% in Wednesday’s postmarket on news that a board member bought $150,000 of shares. What happens next will matter and so, all eyes are on the opening bell for the U.S. markets, set to return from the holiday for a shortened trading session. Tumbling futures and a soaring VIX signaled that the rout in Asia and Europe won’t spare New York equities, while lack of liquidity will only make the pain worse. The Japanese yen emerged as the main haven currency of the day, with the dollar languishing. “Every trader in New York will be rushing to the office now,” said Salm-Salm & Partner portfolio manager Frederik Hildner, adding that news of the new variant could mean the end of the inflation and tapering debate. The worsening pandemic poses a dilemma for central banks that are preparing to tighten monetary policy to curb elevated price pressures, according to Ipek Ozkardeskaya, senior analyst at Swissquote. “It’s terrible news,” Ipek Ozkardeskaya, a senior analyst at Swissquote, said in emailed comments. “The new Covid variant could hit the economic recovery, but this time, the central banks won’t have enough margin to act. They can’t fight inflation and boost growth at the same time. They have to choose.” “We now have a new Covid variant that’s ‘very’ different from the ones we knew so far, a rising inflation, and a market bubble,” she said.  “The only encouraging news is the easing oil prices, which could tame the inflationary pressures and give more time to the central banks before pulling back support.” In the meantime, the World Health Organization and scientists in South Africa were said to be working “at lightning speed” to ascertain how quickly the B.1.1.529 variant can spread and whether it’s resistant to vaccines. The new threat adds to the wall of worry investors are already contending with in the form of elevated inflation, monetary tightening and slowing growth. In Europe, the Stoxx 600 index headed for the biggest drop in 13 months plunging 2.7%; travel and banking industries led the Stoxx Europe 600 Index down as much as 3.7%, the biggest intraday drop since June 2020. Airbus slumped 8.6% in Paris and British Airways owner IAG tumbled 12% in London, while food-delivery stocks gained.  Here are some of the biggest European movers today: Stay-at-home stocks and Covid testing firms such as TeamViewer and DiaSorin are among the biggest gainers as worries over a new Covid variant send the Stoxx 600 tumbling on lockdown fears TeamViewer and DiaSorin rise as much as 6% and 7%, respectively On the down side, travel and leisure stocks plunge, with the likes of IAG, Lufthansa and Carnival posting double- digit falls IAG drops as much as 21% Software AG shares rise as much as 9.5% after Bloomberg reported that the firm is exploring strategic options, including a potential sale, with Morgan Stanley saying the company’s biggest headwinds are behind it. Evolution gains as much as 4.6%, recouping part of Thursday’s 16% plunge, with Bank of America saying the share price’s “crazy time” amounts to a good buying opportunity. Skistar rises as much as 3.7%, bucking steep declines for travel and leisure stocks, after Handelsbanken upgraded the stock, saying bookings for the Scandinavian ski resort operator are “set to surge.” Telecom Italia climbs as much as 2.8% following a Bloomberg report that private equity firms KKR and CVC are considering teaming up on a bid for the company. ING Groep falls as much as 11% after Goldman Sachs analyst Jean-Francois Neuez cut his recommendation to neutral from buy. Getlink drops as much as 6% as French fishermen start protests aimed at stepping up pressure on the U.K. in a post-Brexit fishing dispute. Earlier in the session, MSCI's index of Asian shares outside Japan fell 2.2%, its sharpest drop since August. Casino and beverage shares were hammered in Hong Kong, while travel stocks dropped in Sydney and Tokyo. Japan's Nikkei skidded 2.5% and S&P 500 futures were last down 1.8%. Giles Coghlan, chief currency analyst at HYCM, a brokerage, said the closure of the U.S. market for the Thanksgiving holiday on Thursday had exacerbated moves. "We need to see how transmissible this variant is, is it able to evade the vaccines - this is crucial," Coghlan said. "I expect this story to drag on for a few days until scientists have a better understanding of it." Indian stocks plunged as the detection of a new coronavirus strain rattled investor sentiment globally, raising concerns over a likely setback to the nascent economic recovery.  The S&P BSE Sensex lost 2.9%, the most since mid-April, to 57,107.15 in Mumbai, taking its loss this week to 4.2%, the biggest weekly drop since January. The NSE Nifty 50 Index declined by a similar magnitude on Friday. Reliance Industries was the biggest drag on both measures and declined 3.2%.  “There is fear of this new variant spreading to other countries which might again derail the global economy,” said Hemang Jani, head of equity strategy at Motilal Oswal Financial Services Ltd.   Of the 30 shares in the Sensex index, 26 fell and 4 gained. All but one of 19 sub-indexes compiled by BSE Ltd. retreated, led by a index of realty companies. The S&P BSE Healthcare index was the only sub-index to gain, surging 1.2%. While researchers are yet to determine whether the new virus variant is more transmissible or lethal than previous ones, authorities around the world have been quick to act. The European Union, U.K., Israel, and Singapore placed emergency curbs on passengers from South Africa and the surrounding region. Travel stocks were among the hardest hit. InterGlobe Aviation Ltd. fell 8.9%, Spicejet Ltd. slipped 6.7% and Indian Hotels Co. Ltd. plunged 11.2%, the most since March 2020.  “Nervousness on the new variant of coronavirus and expectations of the U.S. Fed increasing the pace of tapering have led to recent market weakness,” Amit Gupta, fund manager for portfolio management services at ICICI Securities Ltd. said. “This trend may take some time to recover as the WHO meeting on the new mutant variant impact and hospitalization rates in US and Europe will be watched by the market very closely.” Crude oil to emerging markets completed this picture of mayhem. In rates, fixed income was firmly bid as Treasuries extended their advance led by the belly of the curve, outperforming bunds, while money markets pared rate-hike bets amid fears that a new coronavirus strain may spread globally, slowing economic growth. Cash Treasuries outperformed, richening 12-14bps across the short end, with Thursday’s closure exacerbating the optics. As shown above, 10Y Treasury yields shed as much as 10 basis points while the Japanese yen jumped the most since investors’ March 2020 rush for safety. Yields across the curve are lower by more than 8bp at long end, 13bp-15bp out to the 7-year point, moves that if sustained would be the largest since at least March 2020 and in some cases since 2009. Short-term interest rate futures downgraded the odds of Fed rate increases. Gilts richened 10-11bps across the curve, outperforming bunds by 4-5bps. Peripheral and semi-core spreads widen. In FX, JPY and CHF top the G-10 scoreboard with havens typically bid. In FX, the Bloomberg Dollar Spot Index was little changed after earlier touching a fresh cycle high, and the greenback was mixed versus its Group-of-10 peers as the yen and the Swiss franc led gains while the Canadian dollar and Norwegian krone were the worst performers as commodity prices plunged. Traders pushed back the timing of a 25-basis-point rate increase by the Federal Reserve to July from June, with only one further hike expected for the remainder of 2022. It’s a similar story in the U.K. where the Bank of England is now expected to tighten policy in February instead of next month. Wagers that the ECB will raise its deposit rate by the end of next year have also been slashed, with only a six basis-point increase priced in, half of that seen earlier this week. The European Union is proposing to follow the U.K. in halting air travel from southern Africa after the new Covid-19 variant was identified there. The yen is at the epicenter of skyrocketing currency volatility as the new virus variant shakes markets. The cost of hedging against swings in the Japanese currency over the next week, which captures the release of the next U.S. payrolls report, is the most expensive in more than a year. In commodities, crude futures are hit hard. WTI drops over 7% before finding support near $73, Brent drops over 5% before recovering near $78. Spot gold grinds higher, adding $21 to trade near $1,809/oz. Base metals are sharply offered with much of the complex off as much as 3%. Looking at the otherwise quiet day ahead, data releases include French and Italian consumer confidence for November, as well as the Euro Area M3 money supply for October. Otherwise, central bank speakers include ECB President Lagarde, Vice President de Guindos, and the ECB’s Visco, Schnabel, Centeno, Panetta and Lane, and BoE chief economist Pill. Market Snapshot S&P 500 futures down 1.9% to 4,607.50 STOXX Europe 600 down 2.8% to 468.04 MXAP down 1.8% to 193.33 MXAPJ down 2.2% to 628.97 Nikkei down 2.5% to 28,751.62 Topix down 2.0% to 1,984.98 Hang Seng Index down 2.7% to 24,080.52 Shanghai Composite down 0.6% to 3,564.09 Sensex down 2.7% to 57,234.83 Australia S&P/ASX 200 down 1.7% to 7,279.35 Kospi down 1.5% to 2,936.44 Brent Futures down 5.8% to $77.46/bbl Gold spot up 0.9% to $1,805.13 U.S. Dollar Index down 0.33% to 96.46 German 10Y yield little changed at -0.31% Euro up 0.4% to $1.1259 Top Overnight News from Bloomberg The European Union is proposing to halt air travel from southern Africa over growing concern about a new Covid-19 variant that’s spreading there, as the U.K. said it will also temporarily ban flights from the region Those close to the Kremlin say the Russian president doesn’t want to start another war in Ukraine. Still, he must show he’s ready to fight if necessary in order to stop what he sees as an existential security threat: the creeping expansion of the North Atlantic Treaty Organization in a country that for centuries had been part of Russia Bitcoin tumbled 20% from record highs notched earlier this month as a new variant of the coronavirus spurred traders to dump risk assets across the globe Germany’s Greens tapped their two co- leaders to run the foreign ministry and take charge of an influential portfolio overseeing economy and climate protection in the country’s next government under Social Democrat Olaf Scholz A more detailed breakdown of global markets courtesy of Newsquawk Asian equity markets declined and US equity futures were also on the backfoot on reopen from the prior day’s Thanksgiving lull with markets spooked by new COVID variant concerns related to the B.1.1.529 variant in South Africa that was first detected in Botswana. The new variant showed a high number of mutations and was said to be the most evolved strain ever which spurred fears it could be worse than Delta and is prompting both the UK and Israel to halt flights from several African nations. ASX 200 (-1.7%) was negative with heavy losses in energy and broad underperformance in cyclicals leading the downturn across all sectors, while the much better than expected Australian Retail Sales data was largely ignored. Nikkei 225 (-2.5%) underperformed and gave up the 29k status as selling was exacerbated by detrimental currency inflows and with SoftBank shares among the worst hit on reports that China is said to have asked Didi to delist from US exchanges on security fears, which doesn't bode well for SoftBank given that its Vision Fund is the top shareholder in the Chinese ride hailing group with a stake of more than 20%. Hang Seng (-2.5%) and Shanghai Comp. (-0.7%) conformed to the risk aversion with the mood not helped by ongoing geopolitical concerns after a Chinese Defense Ministry spokesperson noted they are ready to crush Taiwan independence bid "at any time”, while China also said it opposes US sanctions on its companies and will take all necessary measures to firmly defend the rights of Chinese companies. Beijing interference further contributed to the headwinds amid the request by China for Didi to delist from US which reports stated regulators could backtrack on and with Tencent subdued after some Chinese state-run companies restricted the use of Tencent's messaging app. Top Asian News Stocks in Asia Set for Worst Day Since March on Virus Woes Mizuho CEO Steps Down After Regulator Hit on System Issues Meituan 3Q Revenue Meets Estimates Japan’s Kishida Delivers $316 billion Extra Budget for Recovery European equities are trading markedly lower (Stoxx 600 -2.9%) with losses in the Stoxx 600 extending to 3.8% WTD. Sentiment throughout the week has been hampered by various lockdown measures imposed across the region with the latest leg lower accelerated by new COVID variant concerns related to the B.1.1.529 variant in South Africa. The new variant has shown a high number of mutations and is said to be the most evolved strain so far. This has spurred fears it could be worse than Delta and has prompted multiple nations to halt flights from several African nations.The handover from the overnight session was an equally downbeat one with the Nikkei 225 (-2.5%) dealt a hammer blow by the risk environment and unfavourable currency flows. Stateside, futures are lower across the board with the RTY the clear laggard with losses of 4.2% compared to the ES -1.8%, whilst the tech-heavy NQ is faring better than peers but ultimately still lower on the session to the tune of 1.6%. Note, early closures in the US and subsequent liquidity conditions could exacerbate some of the moves throughout the session. With the macro calendar light, focus for the session is likely to centre on various nations preventing travel from South Africa whilst potentially imposing more stringent COVID measures domestically. Any further clarity on the spread of the variant and its potential to evade vaccines will be of great interest to the market and likely be the main driving force of price action today. Sectors in Europe are lower across the board with the Stoxx 600 Banking (-5.1%) sector bottom of the pile amid the declines seen in global bond yields as markets scale back expectations of central bank tightening (e.g. pricing now assigns a 63% chance of a 15bps hike by the BoE next month vs. 93% a week ago). Oil & Gas names (-4.8%) are suffering on account of the declines in the crude space with WTI crude in freefall with losses of 6.7% given the potential impact of travel restrictions on demand. Travel restrictions on South Africa (from UK, Israel, EU et al) and the potential for further announcements has crushed the Travel & Leisure sector (-5.7%) with airline names dealt a hammer blow; IAG (-13.5%), easyJet (-11%), Deutsche Lufthansa (-12%), Air France (-9.5%). Elsewhere, there are a whole raft of other laggards which are very much in-fitting with the March 2020 playbook but there are simply too many to list for the purpose of this report. Defensives and Tech are faring better than peers but ultimately still lower on the session to the tune of 1% and 1.9% respectively. Finally, for anyone wanting some positivity from today’s session, the potential for further lockdowns has proved to be beneficial for the likes of HelloFresh (+3.2%), Ocado (+2.1%) and Delivery Hero (+1.9%). Top European News Airlines Skid on South Africa Travel Bans Tied to Variant German Coalition Proposes a Combustion-Car Ban Without Saying So Putin Pushes Confrontation With NATO as Hardliners Prevail Siemens Is Said to Kick Off Sale of Postal Logistics Business In FX, the index has been under pressure in the risk-averse environment amid a slump in yields and gains in its basket components – namely the JPY, CHF, EUR (see below) – and with liquidity also thinned by Thanksgiving. From a technical perspective, the index has declined from its 96.787 overnight high, through the 96.500 mark, to a low of 96.332 – with the weekly trough at 96.035. Ahead, the US calendar is once again light, with the US also poised for an early Thanksgiving closure; thus, impulses will likely be derived from the macro environment. JPY, CHF, EUR - Haven FX JPY and CHF are the clear outperformers as a function of risk-related inflows. USD/JPY has retreated from a 115.37 peak and fell through its 21 DMA (114.15) to a base around 113.66 - with the current weekly low around 113.64. USD/CHF retreated from 0.9360 to 0.9260 – with the 50 and 100 DMAs seen at 0.9234 and 0.9219, respectively, ahead of 0.9200. EUR/USD meanwhile gains on what is seemingly an unwind of the carry trade amid a spike in volatility. EUR/USD found support near 1.1200 before rebounding to a current 1.1288 peak. AUD, NZD, CAD, GBP - The non-US Dollar risk currencies bear the brunt of the latest market downturn, with losses across industrial commodities not helping. The Loonie has taken the spot as the biggest G10 loser as hefty COVID-induced losses in the oil complex keep the currency suppressed. USD/CAD trades towards the top of a current 1.2647-2774 range. AUD is also weighed on by softer base metal prices – AUD/USD fell from a 0.7200 overnight high to a current low at 0.7110. On that note, Westpac sees AUD/USD pushed down to 0.7000 by Jun 2022 (prev. 0.7700) amid rate differentials with the US; Westpac made significant changes to its FOMC policy forecast and now expect consecutive increases in the fed funds rate in Jun, Sept, and Dec 2022. NZD/USD is slightly more cushioned amid smaller exposure to commodities, and as the AUD/NZD cross takes aim at 1.0450 to the downside. GBP, meanwhile, was initially among the losers amid its high-beta status but thereafter nursed losses in a move that coincided with EUR/GBP rejecting an upside breach of its 21 DMA at 0.8475. EM - The ZAR is the standout laggard given the new South African COVID variant - B.1.1.529 COVID-19 variant (expected to be named Nu) – which is said to be the most evolved strain so far and thus prompted several countries to halt travel to the country of origin. USD/ZAR currently trades within a 15.9375-16.3630 intraday band. Meanwhile, the downturn oil sees USD/RUB north of 75.00 and closer to 76.00 from a 74.2690 base. The Lira also feels some contagion despite the lower oil prices (Turkey being a large net oil importer) – USD/TRY is back on a 12.00 handle and within 11.92-1226 parameters at the time of writing. In commodities, the crude complex has been hit by compounding COVID fears which in turn triggered various travel restrictions and subsequently took its toll on global crude demand prospects. The new and more evolved South African variant prompted the UK, Singapore, and Israel to expand their travel red lists to include some African nations (Israel reported its first case of the new COVID-19 variant known as B.1.1.529). Japan also imposed tighter border restrictions. China’s Shanghai city see flights impacted by its own outbreak. Europe also tackles its surge in daily cases - German Green Party's Baerbock (incoming Foreign Minister) does not rule out a German lockdown, according to Spiegel. EU Commission President von der Leyen is also to propose activation of the emergency air brake, to halt travel from southern Africa due to the B.1.1.529 COVID-19 variant. Losses in oil have exacerbated - with WTI Jan and Brent Feb now under USD 74/bbl (vs high 78.65/bbl) and USD 77/bbl (vs high 80.42/bbl), -6.0% and -5.0% respectively. This comes ahead of the OPEC+ confab next week, whereby OPEC watchers have suggested that oil prices will be a large contributor to the final decision. It is difficult to see how OPEC+ will increase output to the levels the US et al. will be content with, with the latest COVID downturn building the case for a pause in planned output hikes. Elsewhere, haven demand sees spot gold extend on gains above USD 1,800/oz after topping the 100 DMA (1,792.95/oz), 200 DMA (1,791.38/oz), 50 DMA (1,790.13/oz) overnight. Base metals are softer across the board amid the risk aversion. LME copper posts losses of around 3% at the time of writing, as prices threaten a more convincing downside breach of USD 9,500/t. US Event Calendar Nothing major scheduled DB's Jim Reid concludes the overnight wrap Things have escalated on the covid front quite rapidly over the last 12 hours. Yesterday new covid variant B.1.1.529 was slowly starting to gather increasing attention but overnight it has begun to dominate markets and has caused a notable flight to quality with 10 year USTs -8bps lower. It was originally identified in Botswana and is starting to spread rapidly in Africa. The South African Health Minister has said it is "of serious concern". Almost 100 cases have already been identified in South Africa and the UK moved to put the country back (along with 5 other African nations) on a reinstated red travel list last night with others following this morning. The variant is said to be the most heavily mutated version yet and the WHO will meet today to decide if it is a variant of interest or a variant of concern. So a lot of eyes will be on how severe it is and whether it completely evades vaccines. At this stage very little is known. Mutations are often less severe so we shouldn’t jump to conclusions but there is clearly a lot of concern about this one. Also South Africa is one of the world leaders in sequencing so we are more likely to see this sort of news originate from there than many countries. Suffice to say at this stage no one in markets will have any idea which way this will go. Overnight in Asia all benchmarks are trading lower on the news with the Shanghai Composite (-0.50%), CSI (-0.64%), KOSPI (-1.27%), Hang Seng (-2.13%) and the Nikkei (-2.90%) all lower. Airlines and other travel stocks have obviously fallen heavily. Hong Kong has detected two confirmed cases of the new variant just as Hong Kong and China were considering quarantine-free travel. S&P 500 (-0.93%) and DAX (-1.82%) futures are also much weaker. Elsewhere, in Japan, CPI rose +0.5% year-on-year (+0.4% consensus and +0.1% previously), on the back of 16-month high fuel prices. With the US out on holiday for Thanksgiving, there wasn’t much going on yesterday after a very quiet day in markets. The variant news was only slowly creeping into the news flow so it hardly impacted trading. But in keeping with the theme of recent days, both inflation and the latest covid wave in Europe remained very much in the picture as jitters continue to increase that we could see further lockdowns as we move towards Christmas. Starting with the headline moves, European equities did actually show signs of stabilising yesterday, with the STOXX 600 up +0.42% thanks to a broad-based advance across the continent. In fact that’s actually the index’s best daily performance in over three weeks, although that’s not reflecting any particular strength, but instead the fact the index inched steadily but persistently towards a record high before selling off again a week ago. Other indices moved higher across the continent too, with the FTSE 100 (+0.33%), the CAC 40 (+0.48%) and the DAX (+0.25%) all posting similar advances. These will all likely reverse this morning. One piece of news we did get came from the ECB, who released the account of their monetary policy meeting for October. Something the minutes stressed was the importance that the Governing Council maintain optionality in their policy settings, with one part acknowledging the growing upside risks to inflation, but also saying “it was deemed important for the Governing Council to avoid an overreaction as well as unwarranted inaction, and to keep sufficient optionality in calibrating its monetary policy measures to address all inflation scenarios that might unfold.” Against this backdrop, 10yr bond yields moved lower across multiple countries, with those on bunds (-2.3ps), OATs (-2.3bps) and BTPs (-1.9bps) all declining. There was also a flattening in all 3 yield curves as well, with the 2s10s slope in Germany (-3.0bps), France (-3.7bps) and Italy (-2.8bps) shifting lower. And the moves also coincided with a continued widening in peripheral spreads, with both the Spanish and the Greek spreads over 10yr bund yields widening to their biggest levels in over a year. Of course, one of the biggest concerns in Europe right now remains the pandemic, and yesterday saw a number of fresh measures announced as policymakers seek to get a grip on the latest wave. In France, health minister Veran announced various measures, including the expansion of the booster rollout to all adults, and a reduction in the length of time between the initial vaccination and the booster shot to 5 months from 6. Meanwhile in the Czech Republic, the government declared a state of emergency and approved tighter social distancing measures, including the closure of restaurants and bars at 10pm. And in Finland, the government have said that bars and restaurants not using Covid certificates will not be able to serve alcohol after 5pm. All this came as the European Medicines Agency recommended that the Pfizer vaccine be approved for children aged 5-11, which follows the decision to approve the vaccine in the US. Their recommendation will now go to the European Commission for a final decision. There wasn’t much in the way of data at all yesterday, though German GDP growth in Q3 was revised down to show a +1.7% expansion (vs. +1.8% previous estimate). Looking at the details, private consumption was the only driver of growth (+6.2%), with government consumption (-2.2%), machinery and equipment (-3.7%) and construction (-2.3%) all declining over the quarter. To the day ahead now, and data releases include French and Italian consumer confidence for November, as well as the Euro Area M3 money supply for October. Otherwise, central bank speakers include ECB President Lagarde, Vice President de Guindos, and the ECB’s Visco, Schnabel, Centeno, Panetta and Lane, and BoE chief economist Pill. Tyler Durden Fri, 11/26/2021 - 08:12.....»»

Category: blogSource: zerohedgeNov 26th, 2021

Weiss: We Got Here Because Of Cowardice, We Get Out With Courage

Weiss: We Got Here Because Of Cowardice, We Get Out With Courage Authored by Bari Weiss via Commentary.org, A lot of people want to convince you that you need a Ph.D. or a law degree or dozens of hours of free time to read dense texts about critical theory to understand the woke movement and its worldview. You do not. You simply need to believe your own eyes and ears.  Let me offer the briefest overview of the core beliefs of the Woke Revolution, which are abundantly clear to anyone willing to look past the hashtags and the jargon. It begins by stipulating that the forces of justice and progress are in a war against backwardness and tyranny. And in a war, the normal rules of the game must be suspended. Indeed, this ideology would argue that those rules are not just obstacles to justice, but tools of oppression. They are the master’s tools.  And the master’s tools cannot dismantle the master’s house. So the tools themselves are not just replaced but repudiated. And in so doing, persuasion—the purpose of argument—is replaced with public shaming. Moral complexity is replaced with moral certainty. Facts are replaced with feelings. Ideas are replaced with identity. Forgiveness is replaced with punishment. Debate is replaced with de-platforming. Diversity is replaced with homogeneity of thought. Inclusion, with exclusion. In this ideology, speech is violence. But violence, when carried out by the right people in pursuit of a just cause, is not violence at all. In this ideology, bullying is wrong, unless you are bullying the right people, in which case it’s very, very good. In this ideology, education is not about teaching people how to think, it’s about reeducating them in what to think. In this ideology, the need to feel safe trumps the need to speak truthfully.  In this ideology, if you do not tweet the right tweet or share the right slogan, your whole life can be ruined. Just ask Tiffany Riley, a Vermont school principal who was fired—fired—because she said she supports black lives but not the organization Black Lives Matter. In this ideology, the past cannot be understood on its own terms, but must be judged through the morals and mores of the present. It is why statues of Grant and Washington are being torn down. And it is why William Peris, a UCLA lecturer and an Air Force veteran, was investigated for reading Martin Luther King’s “Letter from Birmingham Jail” out loud in class. In this ideology, intentions don’t matter. That is why Emmanuel Cafferty, a Hispanic utility worker at San Diego Gas and Electric, was fired for making what someone said he thought was a white-supremacist hand gesture—when in fact he was cracking his knuckles out of his car window. In this ideology, the equality of opportunity is replaced with equality of outcome as a measure of fairness. If everyone doesn’t finish the race at the same time, the course must have been defective. Thus, the argument to get rid of the SAT. Or the admissions tests for public schools like Stuyvesant in New York or Lowell in San Francisco.  In this ideology, you are guilty for the sins of your fathers. In other words: You are not you. You are only a mere avatar of your race or your religion or your class. That is why third-graders in Cupertino, California, were asked to rate themselves in terms of their power and privilege. In third grade.  In this system, we are all placed neatly on a spectrum of “privileged” to “oppressed.” We are ranked somewhere on this spectrum in different categories: race, gender, sexual orientation, and class. Then we are given an overall score, based on the sum of these rankings. Having privilege means that your character and your ideas are tainted. This is why, one high-schooler in New York tells me, students in his school are told, “If you are white and male, you are second in line to speak.” This is considered a normal and necessary redistribution of power. Racism has been redefined. It is no longer about discrimination based on the color of someone’s skin. Racism is any system that allows for disparate outcomes between racial groups. If disparity is present, as the high priest of this ideology, Ibram X. Kendi, has explained, racism is present. According to this totalizing new view, we are all either racist or anti-racist. To be a Good Person and not a Bad Person, you must be an “anti-racist.” There is no neutrality. There is no such thing as “not racist.”  Most important: In this revolution, skeptics of any part of this radical ideology are recast as heretics. Those who do not abide by every single aspect of its creed are tarnished as bigots, subjected to boycotts and their work to political litmus tests. The Enlightenment, as the critic Edward Rothstein has put it, has been replaced by the exorcism.  What we call “cancel culture” is really the justice system of this revolution. And the goal of the cancellations is not merely to punish the person being cancelled. The goal is to send a message to everyone else: Step out of line and you are next.  It has worked. A recent CATO study found that 62 percent of Americans are afraid to voice their true views. Nearly a quarter of American academics endorse ousting a colleague for having a wrong opinion about hot-button issues such as immigration or gender differences. And nearly 70 percent of students favor reporting professors if the professor says something that students find offensive, according to a Challey Institute for Global Innovation survey. Why are so many, especially so many young people, drawn to this ideology? It’s not because they are dumb. Or because they are snowflakes, or whatever Fox talking points would have you believe. All of this has taken place against the backdrop of major changes in American life—the tearing apart of our social fabric; the loss of religion and the decline of civic organizations; the opioid crisis; the collapse of American industries; the rise of big tech; successive financial crises; a toxic public discourse; crushing student debt. An epidemic of loneliness. A crisis of meaning. A pandemic of distrust. It has taken place against the backdrop of the American dream’s decline into what feels like a punchline, the inequalities of our supposedly fair, liberal meritocracy clearly rigged in favor of some people and against others. And so on. “I became converted because I was ripe for it and lived in a disintegrating society thrusting for faith.” That was Arthur Koestler writing in 1949 about his love affair with Communism. The same might be said of this new revolutionary faith. And like other religions at their inception, this one has lit on fire the souls of true believers, eager to burn down anything or anyone that stands in its way.  If you have ever tried to build something, even something small, you know how hard it is. It takes time. It takes tremendous effort. But tearing things down? That’s quick work.  The Woke Revolution has been exceptionally effective. It has successfully captured the most important sense-making institutions of American life: our newspapers. Our magazines. Our Hollywood studios. Our publishing houses. Many of our tech companies. And, increasingly, corporate America.  Just as in China under Chairman Mao, the seeds of our own cultural revolution can be traced to the academy, the first of our institutions to be overtaken by it. And our schools—public, private, parochial—are increasingly the recruiting grounds for this ideological army.  A few stories are worth recounting: David Peterson is an art professor at Skidmore College in upstate New York. He stood accused in the fevered summer of 2020 of “engaging in hateful conduct that threatens Black Skidmore students.” What was that hateful conduct? David and his wife, Andrea, went to watch a rally for police officers. “Given the painful events that continue to unfold across this nation, I guess we just felt compelled to see first-hand how all of this was playing out in our own community,” he told the Skidmore student newspaper. David and his wife stayed for 20 minutes on the edge of the event. They held no signs, participated in no chants. They just watched. Then they left for dinner. For the crime of listening, David Peterson’s class was boycotted. A sign appeared on his classroom door: “STOP. By entering this class you are crossing a campus-wide picket line and breaking the boycott against Professor David Peterson. This is not a safe environment for marginalized students.” Then the university opened an investigation into accusations of bias in the classroom. Across the country from Skidmore, at the University of Southern California, a man named Greg Patton is a professor of business communication. In 2020, Patton was teaching a class on “filler words”—such as “um” and “like” and so forth for his master’s-level course on communication for management. It turns out that the Chinese word for “like” sounds like the n-word. Students wrote the school’s staff and administration accusing their professor of “negligence and disregard.” They added: “We are burdened to fight with our existence in society, in the workplace, and in America. We should not be made to fight for our sense of peace and mental well-being” at school. In a normal, reality-based world, there is only one response to such a claim: You misheard. But that was not the response. This was: “It is simply unacceptable for faculty to use words in class that can marginalize, hurt and harm the psychological safety of our students,” the dean, Geoffrey Garrett wrote. “Understandably, this caused great pain and upset among students, and for that I am deeply sorry.”  This rot hasn’t been contained to higher education. At a mandatory training earlier this year in the San Diego Unified School District, Bettina Love, an education professor who believes that children learn better from teachers of the same race, accused white teachers of “spirit murdering black and brown children” and urged them to undergo “antiracist therapy for White educators.”  San Francisco’s public schools didn’t manage to open their schools during the pandemic, but the board decided to rename 44 schools—including those named for George Washington and John Muir—before suspending the plan. Meantime, one of the board members declared merit “racist” and “Trumpian.”  A recent educational program for sixth to eighth grade teachers called “a pathway to equitable math instruction”—funded by the Bill and Melinda Gates Foundation—was recently sent to Oregon teachers by the state’s Department of Education. The program’s literature informs teachers that white supremacy shows up in math instruction when “rigor is expressed only in difficulty,” and “contrived word problems are valued over the math in students’ lived experiences.”  Serious education is the antidote to such ignorance. Frederick Douglass said, “Education means emancipation. It means light and liberty. It means the uplifting of the soul of man into the glorious light of truth, the light only by which men can be free.” Soaring words that feel as if they are a report from a distant galaxy. Education is increasingly where debate, dissent, and discovery go to die. It’s also very bad for kids.  For those deemed “privileged,” it creates a hostile environment where kids are too intimidated to participate. For those deemed “oppressed,” it inculcates an extraordinarily pessimistic view of the world, where students are trained to perceive malice and bigotry in everything they see. They are denied the dignity of equal standards and expectations. They are denied the belief in their own agency and ability to succeed. As Zaid Jilani had put it: “You cannot have power without responsibility. Denying minorities responsibility for their own actions, both good and bad, will only deny us the power we rightly deserve.” How did we get here? There are a lot of factors that are relevant to the answer: institutional decay; the tech revolution and the monopolies it created; the arrogance of our elites; poverty; the death of trust. And all of these must be examined, because without them we would have neither the far right nor the cultural revolutionaries now clamoring at America’s gates.  But there is one word we should linger on, because every moment of radical victory turned on it. The word is cowardice. The revolution has been met with almost no resistance by those who have the title CEO or leader or president or principal in front of their names. The refusal of the adults in the room to speak the truth, their refusal to say no to efforts to undermine the mission of their institutions, their fear of being called a bad name and that fear trumping their responsibility—that is how we got here. Allan Bloom had the radicals of the 1960s in mind when he wrote that “a few students discovered that pompous teachers who catechized them about academic freedom could, with a little shove, be made into dancing bears.” Now, a half-century later, those dancing bears hold named chairs at every important elite, sense-making institution in the country.  As Douglas Murray has put it: “The problem is not that the sacrificial victim is selected. The problem is that the people who destroy his reputation are permitted to do so by the complicity, silence and slinking away of everybody else.” Each surely thought: These protestors have some merit! This institution, this university, this school, hasn’t lived up to all of its principles at all times! We have been racist! We have been sexist! We haven’t always been enlightened! I’ll give a bit and we’ll find a way to compromise. This turned out to be as naive as Robespierre thinking that he could avoid the guillotine.  Think about each of the anecdotes I’ve shared here and all the rest you already know. All that had to change for the entire story to turn out differently was for the person in charge, the person tasked with being a steward for the newspaper or the magazine or the college or the school district or the private high school or the kindergarten, to say: No. If cowardice is the thing that has allowed for all of this, the force that stops this cultural revolution can also be summed up by one word: courage. And courage often comes from people you would not expect. Consider Maud Maron. Maron is a lifelong liberal who has always walked the walk. She was an escort for Planned Parenthood; a law-school research assistant to Kathleen Cleaver, the former Black Panther; and a poll watcher for John Kerry in Pennsylvania during the 2004 presidential election. In 2016, she was a regular contributor to Bernie Sanders’s campaign. Maron dedicated her career to Legal Aid: “For me, being a public defender is more than a job,” she told me. “It’s who I am.” But things took a turn when, this past year, Maron spoke out passionately and publicly about the illiberalism that has gripped the New York City public schools attended by her four children.  “I am very open about what I stand for,” she told me. “I am pro-integration. I am pro-diversity. And also I reject the narrative that white parents are to blame for the failures of our school system. I object to the mayor’s proposal to get rid of specialized admissions tests to schools like Stuyvesant. And I believe that racial essentialism is racist and should not be taught in school.” What followed this apparent thought crime was a 21st-century witch hunt. Maron was smeared publicly by her colleagues. They called her “racist, and openly so.” They said, “We’re ashamed that she works for the Legal Aid Society.”  Most people would have walked away and quietly found a new job. Not Maud Maron. This summer, she filed suit against the organization, claiming that she was forced out of Legal Aid because of her political views and her race, a violation of Title VII of the Civil Rights Act.  “The reason they went after me is that I have a different point of view,” she said. “These ideologues have tried to ruin my name and my career, and they are going after other good people. Not enough people stand up and say: It is totally wrong to do this to a person. And this is not going to stop unless people stand up to it.” That’s courage. Courage also looks like Paul Rossi, the math teacher at Grace Church High School in New York who raised questions about this ideology at a mandatory, whites-only student and faculty Zoom meeting. A few days later, all the school’s advisers were required to read a public reprimand of his conduct out loud to every student in the school. Unwilling to disavow his beliefs, Rossi blew the whistle: “I know that by attaching my name to this I’m risking not only my current job but my career as an educator, since most schools, both public and private, are now captive to this backward ideology. But witnessing the harmful impact it has on children, I can’t stay silent.” That’s courage.  Courage is Xi Van Fleet, a Virginia mom who endured Mao’s Cultural Revolution as a child and spoke up to the Loudoun County School Board at a public meeting in June. “You are training our children to loathe our country and our history,” she said in front of the school board. “Growing up in Mao’s China, all of this feels very familiar…. The only difference is that they used class instead of race.” Gordon Klein, a professor at UCLA, recently filed suit against his own university. Why? A student asked him to grade black students with “greater leniency.” He refused, given that such a racial preference would violate UCLA’s anti-discrimination policies (and maybe even the law). But the people in charge of UCLA’s Anderson School launched a racial-discrimination complaint into him. They denounced him, banned him from campus, appointed a monitor to look at his emails, and suspended him. He eventually was reinstated—because he had done absolutely nothing wrong—but not before his reputation and career were severely damaged. “I don’t want to see anyone else’s life destroyed as they attempted to do to me,” Klein told me. “Few have the intestinal fortitude to fight cancel culture. I do. This is about sending a message to every petty tyrant out there.” Courage is Peter Boghossian. He recently resigned his post at Portland State University, writing in a letter to his provost: “The university transformed a bastion of free inquiry into a social justice factory whose only inputs were race, gender and victimhood and whose only output was grievance and division…. I feel morally obligated to make this choice. For ten years, I have taught my students the importance of living by your principles. One of mine is to defend our system of liberal education from those who seek to destroy it. Who would I be if I didn’t?” Who would I be if I didn’t? George Orwell said that “the further a society drifts from the truth, the more it will hate those that speak it.” In an age of lies, telling the truth is high risk. It comes with a cost. But it is our moral obligation. It is our duty to resist the crowd in this age of mob thinking. It is our duty to think freely in an age of conformity. It is our duty to speak truth in an age of lies.  This bravery isn’t the last or only step in opposing this revolution—it’s just the first. After that must come honest assessments of why America was vulnerable to start with, and an aggressive commitment to rebuilding the economy and society in ways that once again offer life, liberty, and the pursuit of happiness to the greatest number of Americans. But let’s start with a little courage. Courage means, first off, the unqualified rejection of lies. Do not speak untruths, either about yourself or anyone else, no matter the comfort offered by the mob. And do not genially accept the lies told to you. If possible, be vocal in rejecting claims you know to be false. Courage can be contagious, and your example may serve as a means of transmission. When you’re told that traits such as industriousness and punctuality are the legacy of white supremacy, don’t hesitate to reject it. When you’re told that statues of figures such as Abraham Lincoln and Frederick Douglass are offensive, explain that they are national heroes. When you’re told that “nothing has changed” in this country for minorities, don’t dishonor the memory of civil-rights pioneers by agreeing. And when you’re told that America was founded in order to perpetuate slavery, don’t take part in rewriting the country’s history. America is imperfect. I always knew it, as we all do—and the past few years have rocked my faith like no others in my lifetime. But America and we Americans are far from irredeemable.  The motto of Frederick Douglass’s anti-slavery paper, the North Star—“The Right is of no Sex—Truth is of no Color—God is the Father of us all, and all we are brethren”—must remain all of ours. We can still feel the pull of that electric cord Lincoln talked about 163 years ago—the one “in that Declaration that links the hearts of patriotic and liberty-loving men together, that will link those patriotic hearts as long as the love of freedom exists in the minds of men throughout the world.” Every day I hear from people who are living in fear in the freest society humankind has ever known. Dissidents in a democracy, practicing doublespeak. That is what is happening right now. What happens five, 10, 20 years from now if we don’t speak up and defend the ideas that have made all of our lives possible? Liberty. Equality. Freedom. Dignity. These are ideas worth fighting for. Tyler Durden Sun, 10/17/2021 - 23:05.....»»

Category: personnelSource: nytOct 18th, 2021

Ozy Media’s Carlos Watson Addresses The Company’s Downfall

Following is the unofficial transcript of a CNBC interview with Ozy Media Co-Founder Carlos Watson on CNBC’s “Squawk Box” (M-F, 6AM-9AM ET) today, Monday, October 4th.  Following are links to video on CNBC.com: [soros] Q2 2021 hedge fund letters, conferences and more Ozy Media’s Watson On Path Forward: We’re Going To Have To Change Substantially […] Following is the unofficial transcript of a CNBC interview with Ozy Media Co-Founder Carlos Watson on CNBC’s “Squawk Box” (M-F, 6AM-9AM ET) today, Monday, October 4th.  Following are links to video on CNBC.com: [soros] Q2 2021 hedge fund letters, conferences and more Ozy Media’s Watson On Path Forward: We’re Going To Have To Change Substantially Ozy Media’s Watson Addresses Numerous Scandals Leading To Company’s Downfall ANDREW ROSS SORKIN: Welcome back to “Squawk Box.” Our next guest is here to give us a first-person account of the dramatic rise and fall of Ozy, a roughly 8-year old new media company that collapsed last week following reporting The New York Times about a series of allegedly misleading statements and actions. We’ve been talking about it all week, Ozy Media Co-Founder Carlos Watson is here with us on the set. Carlos, good morning to you. CARLOS WATSON: Morning. SORKIN: We have so many questions that have been unanswered and I’m hoping you can help us with. The first though— WATSON: Do you mind if I start at the top though? SORKIN: Well I think what you’re about to say because we just heard that, and we talked about it as a collapse. On Friday, the company said effectively they’re, it was going out of business. WATSON: Said we’re going to suspend operations and begin an orderly wind down but over the weekend, good conversations with investors, with advertisers. I was warmly surprised to hear from a number of folks readers, viewers, others, and as embarrassing sometimes as it may feel to do, I realized that we were premature. I realized we have something special here. I think that there’s a really good opportunity and part of what last week showed me is not only that we have lots of things that we have to do to improve. We do and I know we’re going to talk about some of those today. But I very genuinely feel like we have a meaningful important voice in what is maybe the most transformative decade and a half century, and I want Ozy to be around and be a part of it. I want people to read our newsletters. I want them to watch our TV shows. I want them to enjoy our podcast. I want them to come to our live events. I think all of that matters. SORKIN: Okay for them to do that, if that’s going to be the case, they’re gonna have to trust you and they’re gonna have to trust the Ozy brand. WATSON: Right. SORKIN: So, let’s talk about that trust because I think there’s, there were so many questions raised by the reporting that that was in the New York Times last week plus lots of other reporting in other places. And let’s just say this, lots of Ozy was real. I just wanna say that out loud, which is to say, the newsletters exist, the festival exists, the advertising exists. You’ve won an Emmy, that exists. But I think there’s other questions about whether the numbers were inflated. We heard about this phone call between your co-founder and Goldman Sachs apparently impersonating somebody from YouTube. We’ve talked about the advertising that suggested that said one thing, but the quotes necessarily, didn’t necessarily come from where they said they were coming from. I think we need to just try to the extent that you can clear the error, explain it— WATSON: Sure. SORKIN: Let’s do that. Let’s start with this phone call though because that’s what sort of set this whole thing off. Your co-founder had a phone call with Goldman Sachs as you were trying to raise money and effectively took them off of a Zoom, and then apparently started to impersonate within it with a fake email address as well, somebody from YouTube. What happened? WATSON: I don’t know. I wasn’t there. But I do know that I got a call from the YouTube folks after it saying something strange had happened, and we figured out what happened. I immediately called back to the folks at Goldman, right away, not four days later as I think someone wrote at one point and, and look, it’s heartbreaking, it’s wrong, it’s not good, it’s not okay. I love Goldman, I worked there, I’ve got a lot of friends there, you know, to this day several months afterwards. I’m grateful to them that, you know, we’ve formed a new advertising partnership and so, you know, hopefully there was some sense of trust regained, but there’s no doubt about it that that was not okay and that fractured a lot of trust not just there, but obviously, you saw what happened in a very tumultuous week last week, SORKIN: But part of what was happening in that instance from what I understand is, you had represented, and the company had represented at one point that your show was going to appear originally on A&E, by the way represented to me because I appeared on your show, and when I first got that email from the producer, it said this show was on going to be on A&E with 95 million households and I remember sitting down actually when I was about to do your show and I said to the producer in the, in the ear I said, “By the way, when does this air?” Thinking it’s going to air on A&E and she said something like, “We, you know, we’re really leaning in hard to online media, this is actually a YouTube Original.” But what it now appears like is it actually wasn’t a YouTube Original either. And in fact, that was somewhat of what the discussion or the issue was with Goldman Sachs, that you were uploading these videos to YouTube, but a YouTube Original is something where you say they’ve effectively commissioned the program. WATSON: So lots of miscommunication in that but I want to clarify that one because I think that that was definitely one where we lost a lot of trust. We originally conceived the show with A&E, you’ve seen the announcements that we have, have a partnership with them or a multi-year partnership. You know we’ve done shows on A&E, on their sister network History Channel, on Lifetime Channel, did good things. And originally during the summer, the conversation was with them. We created a sizzle reel together. We talked about which guests and things like that. And as the summer moved on, we realized that they were on a different timetable than we were and so, we shifted to YouTube. Now in the back of our mind we thought there still could be an opportunity for us to come back to them, but we clearly shifted to YouTube. I know that for you and for a number of other people, you got emails on that. That was wrong. I don’t know whether that was a mistake or whether that was intentional but whatever it is, that was wrong. SORKIN: But the executive producer that you hired believed that he was making a show for A&E and in fact, suggested on the record in the New York Times this week, or last week, that the show, every time he was told that he wanted to call someone at A&E, he was told effectively not to. WATSON: You know, I don’t know about that but I have to say this, I made a really bad decision last week and I didn’t respond to your text. I didn’t respond to texts lots of other people I know and I wish I had engaged with the media, had good conversations because I felt like after that piece, it was kind of like open season for people to throw whatever crazy half-truth and put it out there. Now, to be really clear, some of the things that came out last week were mistakes that we made, I know that we’ll talk about those too, but that’s a good example of one that I think that’s true. That same producer you’re talking about is the same producer who’s texted me multiple times since then with multiple exclamation points saying congratulations on the show bringing Matt Damon on, congratulations on the show now appearing on Amazon Prime. So, look, there’s no doubt about it that last summer, as the show started, we originally hoped that we were going to do with A&E and it ended up shifting to YouTube and, and, and I am sure that we did not communicate that well and I own that and that’s— SORKIN: But you use the word half-truths. I think there’s more than a half-truth or, or a half-lie in that which is the producer actually said to you specifically that you were lying to the staff about the fact that this show was supposed to be on A&E and then apparently lied again when you said it was gonna be a YouTube Original. WATSON: I disagree. I don’t think that’s true. So, both pieces of what you’re saying, which is the idea that he said to me that I was lying— SORKIN: Right. WATSON: And number two that I then said to the staff that it was YouTube Original, right. Clearly it wasn’t a YouTube Original and knowing what a YouTube Original was, it clearly wasn’t that. And let me— SORKIN: But why did they believe that it was a YouTube Original? Why were they telling me by the way that it was YouTube Original? WATSON: I hope that it was only a mix up of words, right. I hope that’s all it was. It may not have been but I hope there was only a mix up of words. But Andrew, what I don’t want to have obscured is that we didn’t do one or two episodes of the show, we’ve done 200 episodes and when Scarlett Johansson has come on, when Dr. Fauci has come on, when H.E.R. has come on, when Mark Cuban has come on, when Malcolm Gladwell has come on. SORKIN: But no one is— WATSON: Hold on one second. They come on knowing that they’re coming on a terrific YouTube show that has a chance to reach a really dynamic audience. SORKIN: Nobody’s disputing the quality of the program but by the way you just mentioned this being on Amazon Prime which became another issue is that you advertised it was the first show, first talk show on Amazon Prime. You were uploading that show to Amazon Prime. I remember seeing that ad for the first time thinking wow good for Carlos, Amazon Prime has commissioned him. That’s amazing. And then I found out when I read the story, that in fact you were just simply uploading it like anybody could. WATSON: It’s not. No, no, no, timeout guys and again, thank you for this time. I know we are going to spend a lot of time, Joe, do you mind if I hit this first and then come to you? JOE KERNEN: I’m just seeing like a pattern and I’m just wondering who is in charge that decided— WATSON: You know what? Let me, let me answer that and let me come back there because that also ties to the question of regaining trust and there’s a larger question, that’s totally legitimate question. So, to be really clear, getting on Amazon Prime, not everyone can upload it. That’s a very rare thing and this suggestion in one of the articles is just like any random yahoo can do that. You can’t do that, you should talk to the folks at Amazon and not believe some of the, you know, not very good reporting about that so it is a big deal. Number two, our understanding from them is that we were the only talk show and part of what was special about that is that they hadn’t done it otherwise and they weren’t in a place yet where they were willing to put their own money, but what they were willing to do in terms of a large upfront payment, but what they were willing to do and what they do for a few people is allow you to be part of Amazon Prime where you take risk and they take risk and the more views you have, the more you get paid. SORKIN: But to put a fine point on it. WATSON: Hold on. Hold on. SORKIN: They then asked you to stop advertising this point. WATSON: Well, but they asked to stop everything because what they said to us and what they said to me is because we are not convinced that we’re definitely gonna get in the talk show business and if you advertise it like that, you’re gonna have lots of other people, their agents and everyone calling, so they didn’t say take it down because it’s not true, they said take it down because we don’t want you stimulating more pitches for us in a space that we haven’t committed to yet. Let’s see how you do. If you do well with the interesting guests you have, whether it’s a Priyanka Chopra, whether it’s a Mark Cuban, a Lloyd Blankfein, whomever, then great and we’ll see where we go from there. So, please with all of these things let’s have the conversation, right, because we definitively made some mistakes and Joe I know we want to have a larger conversation about whether mistakes were ingrained in who we are or whether, like a lot of young companies, we made mistakes but that was the 20% not the 80% of who we are, but let’s go through all of these because I think that’s a super important point. We are on Amazon Prime, it’s a very difficult place to get. There are only two ways to get in there, you can either get a meaningful upfront payment and they drive it or for a few people, they say you’re special enough and if you want to take risk, and we’ll take risk, we’ll do that together and we bet on ourselves and we did it and our understanding and talking to them is that we were the only talk show and their hesitation about having it out there was not that it wasn’t true but that they didn’t want to stimulate more demand and so I want to clear that up and I think that’s important. SORKIN: Okay, Becky’s got a question for you. BECKY QUICK: Carlos, really quickly, back to the issue of— WATSON: Becky, I apologize, I’m not hearing you yet. QUICK: Oh sorry, maybe they can turn on the microphone. Can you hear me now? SORKIN: Can you hear her? WATSON: I don’t hear her yet. QUICK: Okay, maybe it’s not back. Joe’s got a question, why don’t you let him ask. KERNEN: Mine, I’m just wondering, the, the aggressive marketing that caused sort of to oversell and you could call it aggressive or someone was downright just this falsehoods about where, you know, you buy some advertising somewhere and then the entity suddenly the LA Times is saying — who was that, who because it happened again and again, again, do you have a head of marketing or— WATSON: But let me start with a macro place Joe and I’m saying this in order to address this and address it comprehensively because it’s important. KERNEN: Right. WATSON: Again, as you said before and as you know because I’ve been here with you before. We have a real business. We have real newsletters that millions of people get. We have real TV shows that people watch, we’ve won an Emmy. We have real podcasts that have been in the top 10 on Apple. We have real festivals that people come to. We have tried to market these very different franchises, about 25 in all, we’ve tried very hard to market them well. I would tell you that one of the mistakes we made is that sometimes we were too aggressive in marketing them unequivocally and I own that, not anyone else, I own that. That’s my mistake. I’m the CEO, I’m responsible that we tried our best. Now, do, if you’re asking me do I think that we got it wrong 50% of the time or 80% of time? No. If you ask me do I think we got it wrong 20% of the time? Yeah, we probably did and that’s on me and I own that and one of the things I hope will be true of that going forward is we’ll be much better about that, much crisper about that. KERNEN: So, 80% of the marketing was, was true, I don’t think that’s true. WATSON: Why do you not think it’s true? KERNEN: I just heard of some of the best— WATSON: Look, it was an incredibly salacious week and I do think at some point I hope you will invite me back to talk about the state of journalism, and I want to talk to Andrew and Becky about that too. I thought last week there was, there was not only real critique and there was, and make no mistake about it, I own the things that we need to do better on data, the things we need to do better on marketing, the things we need to do better on leadership and culture. I clearly own that and clearly have thoughts about where we can go from there. But in addition to that, I thought there was a wild piling on that was inappropriate, and that left you, and a lot of other people saying, is this everything about Ozy? Even Andrew, Andrew I look back, you sent me a text after you were on my show and you said, I’ve never had so many people tell me that they were watching the show, where did you get that magic from. You remember sending me that text? SORKIN: I remember looking at the, I think what I said to you, I think was— WATSON: No, no, no, I— SORKIN: You can get it because I remember being amazed by how many people were watching it on YouTube. WATSON: You told me in the text, you said and I’m happy to bring it. SORKIN: You can. WATSON: You said on the text to me and I’ll read it here to you if you like. You said to me— SORKIN: I was amazed how many people were watching it. WATSON: You said to me quote on August 29th at 7:54pm, “You have a big audience on YouTube, I keep hearing from various people who say they saw it.” I keep hearing from various people saying that they saw it. “I’d love to talk to you.” SORKIN: Right. WATSON: So that’s what you said, keep hearing from people. So, look, I just, I need you guys to be fair about this and thoughtful about this and not just go with this kind of one way digital mob. SORKIN: I know and Becky’s got a question but I want to ask you one other, which relates to the newsletter franchise, one of the things you’ve talked about is having 26 million people getting this newsletter. And I don’t disbelieve that you have 26 million addresses in your database. You can buy some of those, you can do some of that organically. But I also saw an investment deck that you had. WATSON: You can partner. SORKIN: Right, you can partner. WATSON: And I’ve partnered before on newsletter efforts with The New York Times. SORKIN: But I did see, I saw an investment deck that said you had a 25% open rate on those 26 million newsletters, subscribers. That is a very high open rate for what I don’t believe is a fully organic list. Can you, can you speak to that? Was it really, do you really have a 25% open rate on 26 million newsletters? WATSON: We do not. But, but I hope what it said and I don’t know which deck you’re referring to, I hope what it said is that for our best most regular people that it was 25%. So, of that 26 million, that 10 to 12 million who were the most regular, I hope what it said is that we have a 25% open rate, I hope that’s what it said. SORKIN: This was a deck for your, for your Series D, which brings me to another question. The investors who invested after this now infamous call between your executive and Goldman Sachs. Were they made aware of the call and the questions that have been raised that we’re now talking about today? WATSON: You know what, because you know that that is fraught and there are a lot of questions, I’m not going to go into that but I will say this and I think this is really important and when we talk about investments you know this with private companies, when you invest in a private company, you don’t just have one conversation or there’s not one data point. You and I both know that it can be a three to 12-month process. You and I both know that you often, if you’re the potential investor, you often have dozens of conversations both ones at the company sets up but also ones that you do yourself and that there are lots of data points and you go through that and you sync it all through and I’m confident that all of our investors and I’m confident that they talk to customers. I’m confident they talk to members of our team. I’m confident that they talk to other competitors. I’m confident that they consumed our newsletters and our TV shows and our podcasts, and many of them would come in the earlier days to our festivals as well so I want to say that because I know we keep having this conversation— QUICK: Hey Carlos. Just on that point though— WATSON: As though— QUICK: On that, on that point— WATSON: Becky, sorry, Becky can I just say one more thing— QUICK: But on that point, I just want to clarify what the point that you’re making right now. We know that the situation the conversation with Samir Rao, that that was a situation that you say where it was a mental break. Was there, were there any other occasions where investors were given misleading information in any of these conversations that you’re talking about right now or was that a one-off event? WATSON: Becky, I hope and I hope and I believe that that was a one-off event. I mean it’s a tragic event, it’s a horrific event, it’s a wrong event. And, and so I hope and trust that that was a that was a one-off. And so, but let me say something else because I think, again, this is important and it started at the beginning of the conversation Andrew. Like, I think it’s completely inappropriate and not thoughtful these kind of comparisons to Theranos. You and I both know that Theranos didn’t have a real product. And again, you’ve been on my TV shows. You’ve seen the Emmy that we won. You’ve received our newsletters at least heard of so— SORKIN: No, no, I— WATSON: So I want to make sure that we have like a grounded, thoughtful conversation and so investors who were thinking about us, considering us, getting to know us by the way, we’re also investing in other companies who were investing in Reese Witherspoon’s Hello Sunshine, they were investing in Business Insider, they were investing in, in the Atlantic and all sorts of other companies and so these are people who aren’t just sophisticated investors but often investors who know the media space, maybe even better than I do. SORKIN: The point that Ben Smith made in today’s column was though, that it was a group think. It was everybody trying to be part of a club and that they actually didn’t do their diligence at all. WATSON: Yeah, so let’s, what I’d say is that I think Ben Smith should never have had a chance to write this piece. I’ve shared with a number of people before that two years ago in August of 2019, Ben Smith sent an email to me and his then CEO Jonah Peretti said I think you guys should get together for the purposes of talking about them buying me. We spent three months in conversation. They had me meet all of their top leaders, folks in marketing, folks in finance, folks in analytics, they went through our numbers backwards and forwards, they put together a joint presentation, and they made us after the end of that, in November, right before Thanksgiving, spending all that time doing diligence, Joe they made us an offer of nearly a quarter of a billion dollars for a company that Ben Smith now sets up as though it’s a house of cards and it was just group think. How is that possible that Ben Smith who’s been in new media for that many years, kicked off a process, followed up with me and they ended up making an offer for nearly a quarter of a billion dollars, $225 million, for something that they now say was group think and it was made up. And when we said no to him once and said no to him twice, two weeks later he quit, went to the Times and his first column in March of 2020 was, I guess, new media can’t work, I guess I’ve got to join the Times. Just because it didn’t work for him, not okay for him now to take a potshot at us and did he tell his editor that he was conflicted when he was writing about us. Did he tell his editor that he still owns lots of stock in Buzzfeed and that he tried to buy us? He didn’t. I don’t think that’s okay. I don’t think that’s okay, I don’t think he should have been able to write that piece and write the other pieces and create this false narrative that because Ozy doesn’t look like something he wants it to be and because we said no to him multiple times— SORKIN: But clearly you’re acknowledging that there are things that you, you and the company have done that are misleading. That were fair game for, for a journalist to write about. WATSON: 100% that we should have done better. Three of the areas and there may be more than three, but we definitely should have been better with data because so many of the data tools, only look at digital only, and we’re not a digital media company. I call us a modern media company because we’ve got TV shows, newsletters, podcasts and festivals. So we should have figured out that multi-platform data, we should have been better on the marketing. Joe, we got it wrong, it’s not okay what we did, it’s not, but I don’t think it was 80% of the time, I think it was probably more like 20% of the time and I would tell you that there’s some things around leadership and culture that I need to be better at and we need to be at. QUICK: Carlos, can I just, can I just clarify on that point? The things that you say you own because you were the leader you own it because people under you were doing things you didn’t know about or people under you were doing things that you did know about? WATSON: Becky, that’s such a broad question and, you know, that’s such a broad question. QUICK: No, I’m trying to be specific. It’s right for a leader to say it happened on my watch, it’s my fault. But is it your fault because you didn’t know or your fault because you did— WATSON: Fair. Let me give you a couple. So one on the data, I should have figured out a third party group that could have done, not just digital like Comscore does because Comscore only looks at website traffic or mainly looks at website traffic, but even though it was hard I should have figured out a solution as I now have and we have a third party that has done a preliminary look and hopefully they’ll finish up in the next couple of weeks and we will share it broadly with people and going forward, every month, we will share our data. We’ve got nothing to hide, we’ve got good things there. And so yes, I own that I didn’t make sure that that happened. And I knew that that was critical to us and we did the best we could. We did it piecemeal, but I should have had someone external as an example do it, do it consistently and share it with people in an easy consumable way. QUICK: But I’m sorry when we’re talking about made up marketing numbers, did you know that was happening or not? WATSON: I don’t believe we had made up marketing numbers, Becky. I don’t believe we had made up marketing numbers, and so I’ve heard people say that repeatedly but what it is, in my mind, is it’s Ben Smith and people like him who only believe that what happens on Twitter and websites matter and discount newsletters and discount podcasts and discount TV shows and discount festivals, and so their belief is, if you’re not doing that, if you’re not active on Twitter and doing snarky things on Twitter, then you don’t have a real media company and I, I constitutionally reject that. In fact, a big part of the reason why we’re going to continue going forward is because I don’t think it’s a good world where the only kind of media companies you have or the kind of media companies that get Ben Smith excited, what about the rest of us. SORKIN: I just want to say because I asked you about the email opens before and I’m looking at the deck, I’ll show it to you right here. 25% email opens. Ozy email average 25% open rate, 2.5 times industry and 3% CTR. It doesn’t have a star next to it that says just the people who are actively engaged with you in some way, and— WATSON: You know, I need to look at that more closely but let’s make sure that we do something here, which is that I don’t want, if you and I looked at any small company— SORKIN: Right. WATSON: Or a large company, we would find a handful of things that aren’t great. Just to be really clear, we would, we would find and just because something is sloppy or stupid, doesn’t mean it’s illegal, right. I just want to be really clear about that— SORKIN: Look I’m not, I recognize mistakes can be made, I think the question is whether there’s a pattern and series of mistakes and I think that is the, the larger issue. I’ll raise another one with you, Sharon Osborne, you made a comment on this program, by the way, saying that she was a friend and investor in the company. WATSON: I didn’t say she was a friend. SORKIN: I think we can probably go back and get the tape. WATSON: You know what, play the tape then. Please, go ahead, play the tape. SORKIN: I don’t know if we have the tape— WATSON: You know what, cue up the tape. This is an Obama Romney moment. Cue up the tape. Show me the tape. SORKIN: As we wait for the tape if we can get it. WATSON: So here’s, here’s what I said and here’s what is true. We have a wonderful music and ideas festival that I’ve invited you to many times. Becky you were going to come, as you recall, and you were going to do something. We had a conversation about that you couldn’t do it, we went back and forth with folks to try and see if we could get you to be a moderator of one of the things— QUICK: Yeah, it was something I couldn’t do. WATSON: It’s called OZY Fest and Sharon Osborne and the folks said that that was too close to the name of something they did called Ozzfest. They ended up suing us. We went back and forth and the final resolution was that they would get stock in our company, they would ultimately get about 50,000 shares. And so, I think on this show and maybe a couple of others, in my mind people who own shares in our company, are investors— SORKIN: But you do recognize an investor— WATSON: Hang on, hang on. Hey can I finish? SORKIN: You tell somebody that they’re an investor, they typically do that proactively and you didn’t say by the way, they happened to get shares instead of cash. WATSON: Andrew. SORKIN: I mean there’s a difference. There’s a difference. WATSON: Andrew, no doubt that there’s a difference but also if you put the blink test on this, the Malcolm level blink test, do you think I’m really saying to serious investors invest because Sharon Osborne? Like do you really think that’s like a calling card, like seriously, is that a calling card like just the blink test here. You really think that’s what I was doing or do you think you and I were having a light moment and we were making a joke and I said that, like play the tape. I’m sure it’s a light moment and there’s no one I’m going to say, hey, you know why you should invest because Sharon Osborne is in Ozy. I’m not gonna say that we were probably having a light moment I hope you’ll play the tape. SORKIN: What do you say to people, and I want to go back if we could to this though, you’re going to try to continue this company and, and keep going. WATSON: And it will be tough and it will be tough, as you said we will to, Joe, we will have to regain trust. SORKIN: The investors apparently have left the company. I mean Ron Conway effectively said I’m giving back the shares. WATSON: And again, I need you, Andrew, as sophisticated as you are about this stuff, like, you know, that we’ve raised millions of dollars of capital and Ron Conway put in $50,000. And so for you to keep banding about Ron Conway— SORKIN: It’s the first time I’m mentioning his name. WATSON: Hey, hey, today, right. But you mentioned it before last week so for you to keep banding that about like that’s a substantive big decision, like that’s not accurate and that’s what I meant before Joe about these things that are misleading. So, I’m sorry to see them go. He’s a terrific investor. SORKIN: But why do they, why do they abandon the company if things are as, as good as you say they are. Marc Lasry, by the way, defended you initially said that he thought that this mental health issue was real, said that it was dealt with appropriately. You know, 72 hours later, he’s gone. Why? Tell us about that conversation then. WATSON: Can’t, can’t speak to that except to say it’s heartbreaking. I am a big fan of Marc’s. I’ve been lucky to get a chance to work with him. He was great as an investor, as a board member, as a chairman. He joined me here on this show, as you know, I think more than once. He helped me with a number of our key business development efforts and so he was great and I’m, I, you know I don’t want to put words in his mouth, but I’m sure he and I both wish last week hadn’t happened. I think we both felt like Ozy had had some incredible momentum this year, which is part of the reason why he became chairman. I think we both hoped that a lot more will happen but part of my opportunity going forward is to make sure that we build back stronger, that we create something that he and others can be proud of and, you know, Joe, you probably remember Tylenol situation, years ago, right. And that was a moment of leadership, that was a moment when it looked like an important company was going to go away. KERNEN: Timber. WATSON: You remember that? KERNEN: I remember it well. WATSON: And so, you know, look at our best and we, we may not get there, right, this is gonna be hard but at our best, this will be our Lazarus moment, right, at our best, and we may or may not see— SORKIN: So, tell us, what do you think you need to do at this point. By the way, you’re gonna have to get, I assume, maybe more, more investors though I know you have some cash still on hand, you’re gonna have to bring back the advertising community to ultimately support this and then readers and the public. WATSON: And so I think the first thing I have to do is think about my team. SORKIN: How are they gonna stay with you by the way? WATSON: You know what? That that’s a good question. That’s a good question. SORKIN: Have you talked to them? WATSON: I’ve talked to some of them. Obviously this has all happened very quickly. It’s a terrific team, they were as traumatized last week as I was as heartbroken as I was. I mean, whenever you want to say, you and I both know that when you ever you met people from Ozy, they loved Ozy. They weren’t kind of going through the motions, it wasn’t just like they loved Ozy, right, and so and so— SORKIN: But by the way, there were a number of reports last week from at least ex-employees who clearly didn’t love Ozy. WATSON: Fair enough. Of the, of the nearly thousand people we’ve hired over the last decade, part time and full time from freelance reporters to software engineers to people doing our festivals, crews on our TV shows and other folks, we did have people. And people ran with stories from for example one gentleman who we fired for lying multiple times but they set him up and allowed his quote Potemkin village or things like that to run wild as though he was a credible source, I don’t think that’s okay. Right. And so, I’m happy to have conversations about that and I’m happy to walk through that. But here’s the bottom line when you ask me what I need to do next, got to make sure that our team is in a good place and that’s not going to be easy and you and I both know that, have to make sure that we regain the trust of investors that’s not going to be easy either, have to make sure that we deliver really premium products. So at the end of the day, if we don’t have a newsletter that people want to read, if we don’t have TV shows that people want to watch, we don’t podcasts that people put on their headsets and go for a safe swim like we don’t have anything. If we don’t have an OZY Fest, that you can come to we don’t have anything so that’s going to be important. And the last thing I would say that’s going to ultimately be really important is we have to change. We have to change substantially on data, on leadership and culture, on marketing. SORKIN: Carlos Watson, we very much appreciate you being here. WATSON: You know what I wish I’d come last week— SORKIN: But one thing I can tell you is that I do wish you luck, I really do. WATSON: Thank you. Thank you. I hope I get a chance to come back. SORKIN: Thank you, Carlos. KERNEN: Thank you. WATSON: Thank you Joe. Thank you Becky. Updated on Oct 4, 2021, 1:30 pm (function() { var sc = document.createElement("script"); sc.type = "text/javascript"; sc.async = true;sc.src = "//mixi.media/data/js/95481.js"; sc.charset = "utf-8";var s = document.getElementsByTagName("script")[0]; s.parentNode.insertBefore(sc, s); }()); window._F20 = window._F20 || []; _F20.push({container: 'F20WidgetContainer', placement: '', count: 3}); _F20.push({finish: true});.....»»

Category: blogSource: valuewalkOct 4th, 2021

Chanos Warns Evergrande Crisis Could Be Worse Than Lehman For China

Chanos Warns Evergrande Crisis Could Be Worse Than Lehman For China One of the world's most well-known short-sellers, Jim Chanos, told FT the Evergrande crisis is just a symptom of the property-driven growth model coming to an end and could be "far worse" than a "Lehman-type" blowup for China.  "There's lots of Evergrandes out there in China — Evergrande just happens to be one of the biggest," Chanos said.  "But all the developers look like this. The whole Chinese property market is on stilts."  Chanos could be right. After all, on Monday, Chinese realtor Sinic Holdings crashed 87% in Hong Kong on fears of a slowdown in the Chinese real estate sector. Evergrande is the world's most indebted developer, with at least $300 billion in debt outstanding. In recent months, a liquidation panic of the company's bonds sent its 2023 bonds from 90 cents on the dollar in June to 26 cents present day. In recent weeks, the collapse has spooked markets, including global equities, credit, FX, and commodities. Fears of Evergrande's unraveling seemed imminent earlier this week after two anxiety-filled days during which China was on holiday and traders hammered Hong Kong trader property stocks in the anticipation the company would default on its yuan bond. However, Evergrande's onshore unit unveiled vaguely worded plans to pay the interest due Thursday while leaving the fate of an $83.5 million offshore bond coupon payment in limbo. Unlike Lehman, which caused an international implosion of the financial system, most of Evergrande's $300 billion in liabilities are held with creditors and businesses in mainland China. So worldwide contagion might not happen this time around but could certainly inflict severe pain for the world's second-largest economy.  Chanos said the consequences of default by Evergrande could unleash a credit crisis in the country: "In many ways, you don't have to worry that it's a Lehman-type situation, but in many others, it's far worse because it's symptomatic of the whole economic model and the debt that's behind the economic model."  He added:  "If you try to deflate this bubble, it is fraught with risks. I don't think they're contagion risks." Evergrande could be transformed into a zombie company where it defaults on its interest payments but is given extended time to repay or restructured. One would assume Communist Party won't allow the company to implode ahead of a closed-door Communist Party's Central Committee in November.  In the meantime, the communists will have to figure out "new growth drivers or downshift somewhat semi-permanently into a lower level of growth," he said.  "Has the Chinese Communist party grappled with the implications of that? That remains to be seen," he added. Lower and slower growth is something President Xi Jinping and his ruling party cannot have and perhaps is why People's Bank of China has come to the rescue this week in the biggest one-day injection since February.  Chanos' New York-based hedge fund Kynikos Associates has doubled its exposure to China in its global short fund to more than 10% this year, with short positions in HSBC and Standard Chartered, "due to their heavy loan exposure to Greater China."  ... and let's not forget, no matter how the Evergrande drama plays out, China's housing market is in trouble.  Tyler Durden Wed, 09/22/2021 - 13:43.....»»

Category: blogSource: zerohedgeSep 22nd, 2021

Big Lots plunges 12% as high gas prices and inflation squeezes customers, leading to unexpected quarterly loss

Big Lots said its Q1 inventory was up 48.5% from a year ago. A entrance to a Big Lots retail store.Jeffrey Greenberg/Universal Images Group via Getty Images Big Lots shares slid Friday after the company posted a decline in quarterly sales and unexpectedly swung to a loss.  The retailer said its customers were feeling the pressure of higher gas prices and broader inflation.  Sales fell 15% to $1.37 billion, missing the FactSet estimate of $1.46 billion.  Big Lots shares sharply dropped Friday after the general merchandise retailer unexpectedly swung to a quarterly loss, with the company saying its customers were feeling the pain of high gas prices.  The retailer, which runs more than 1,400 stores in 47 states, also said first-quarter sales dropped 15% to $1.37 billion, which missed the FactSet consensus estimate of $1.46 billion. Shares of Big Lots dropped 12% to $26.82 Friday morning. The stock in premarket trade fell by as much as 25%. Comparable sales growth began to slow in April after solid starts in February and March, prompting the company to increase price markdowns. "We believe the slowdown was caused by the spending pressure our consumers felt from higher gas prices and broader inflation, which is affecting discretionary purchases across the retail industry," Big Lots CEO Bruce Thorn said in the earnings report. Gas prices have been climbing after oil prices rocketed higher following Russia's invasion of Ukraine in late February. The average US price of regular gas was $4.60 a gallon this week, according to motor club AAA. Gas prices could soar to $6 a gallon this summer, JPMorgan recently warned. Comparable sales fell 17% during the quarter. A year earlier, they rose 11.3%. Inventory spiked up 48.5% on higher unit costs and a significant increase in in-transit inventory, it said. Big Lots swung to a first-quarter loss of $0.39 a share, confounding expectations of a profit of $0.95 a share in a FactSet survey of analysts. "We have reacted quickly to the changes in consumer demand by increasing value offerings to our customers," said Thorn. "We expect the environment to remain challenging and we remain highly focused on managing the business prudently, which includes aggressively right-sizing our inventories over the course of Q2." Big Lots' report follows downbeat financial results from Target and Walmart, among other retailers. Upscale retailer Nordstrom, however, this week raised its profit guidance for the full year.Read the original article on Business Insider.....»»

Category: topSource: businessinsider16 hr. 1 min. ago

Microsoft (MSFT) Announces New Updates to Microsoft 365 Apps

Microsoft (MSFT) rolls out updates across Microsoft 365 apps to aid subscriber growth in the near term. Microsoft MSFT recently rolled out new features and updates to Microsoft 365 that improve a user’s ability to deliver compelling presentations and visuals, enhance security protections for small businesses, and help employees to organize and streamline workflow in a hybrid or remote working environment.The company has launched a private preview of Microsoft Viva Goals — a new module that helps organizations set measurable goals and enables employees to record and track progress along the way. With customized dashboards and quick links, Viva Goals makes it easy to check in on progress and share results.Microsoft has also rolled out a Storytelling feature to PowerPoint. It is an integration between Microsoft Power BI and PowerPoint, added to enable live, interactive reports within the slides. PowerPoint users are now able to add live report pages into PowerPoint slides without losing data interactivity, even when making their presentation.A new enhancement to presenter mode enables the presenter to choose where they show up on the slide and the ability to resize their video feed while automatically adjusting content size accordingly.The company has started offering Defender for Business as a standalone, giving small and medium sized businesses (SMBs) multi-layer protection, detection, and response option against increasing cyber threats. On Mar 1, 2022, Microsoft Defender for Business was made generally available in Microsoft 365 Business Premium, its comprehensive security and productivity solution for businesses with up to 300 employees.Microsoft Corporation Price and Consensus Microsoft Corporation price-consensus-chart | Microsoft Corporation QuoteOther Upgrades to Streamline Workflow and ProcessesMicrosoft has been consistently updating its software offerings to aid enterprises with the regular workflow. Strong adoption of Microsoft 365 is expected to aid top-line growth in the near term.In third-quarter fiscal 2022, Office Consumer products and cloud services revenues rose 11% (up 12% at cc), driven by growth in Microsoft 365 subscription revenues. Microsoft 365 Consumer subscribers totaled 58.4 million, up 16% year over year.Microsoft Teams, Lists, and Forms have been given various updates aimed to streamline processes and minimize distractions within an origination. The company is adding a notification drawer in Teams that appears at the top of the screen for in-meeting messages. This will enable users to preview, collapse, and clear all notifications with just one tap.Microsoft has also extended the availability of Microsoft Lists for Android to Google Play store for Microsoft 365 commercial customers. The new mobile app is likely to aid users in managing events, tracking issues and assets, helping with new-employee onboarding, and keeping coordination across inventory.The company has further introduced two new experiences with Microsoft Forms — a cross-device experience, which brings the full capability of Microsoft Forms to a mobile device and the getting started experience for new users, including a series of templates that can be used across work, school, and life.Zacks Rank & Stocks to ConsiderMicrosoft currently carries a Zacks Rank #3 (Hold).Some better-ranked stocks in the broader technology sector include Avnet AVT, Monolithic Power Systems MPWR and Analog Devices ADI. While Avnet and Monolithic Power Systems sport a Zacks Rank #1 (Strong Buy), Analog Devices carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.Avnet has gained 6.3% in the past year. The long-term earnings growth rate for AVT is currently projected at 37.2%.Monolithic Power Systems has gained 18.9% in the past year. The long-term earnings growth rate for MPWR is currently projected at 25%.Analog Devices has rallied 0.8% in the past year. The long-term earnings growth rate for ADI is currently projected at 12.3%. Just Released: The Biggest Tech IPOs of 2022 For a limited time, Zacks is revealing the most anticipated tech IPOs expected to launch this year. Concerns about Federal interest rates and inflation caused many private companies to stay on the bench- leading to companies with better brand recognition and higher growth rates getting into the game. With the strength of our economy and record amounts of cash flooding into IPOs, you don’t want to miss this opportunity. See the complete list today.>>See Zacks Hottest IPOs NowWant 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 Analog Devices, Inc. (ADI): Free Stock Analysis Report Microsoft Corporation (MSFT): Free Stock Analysis Report Avnet, Inc. (AVT): Free Stock Analysis Report Monolithic Power Systems, Inc. (MPWR): Free Stock Analysis Report To read this article on Zacks.com click here......»»

Category: topSource: zacks16 hr. 15 min. ago

The wild life of billionaire Twitter founder and "Block Head" Jack Dorsey, who"s officially left the social network"s board, eats one meal a day, and takes ice baths

Jack Dorsey, famous for his unusual life of luxury, stepped down as Twitter CEO in 2021 but continues to lead Block as its "Block Head." Jack Dorsey onstage at a bitcoin convention on June 4, 2021 in Miami, Florida.Joe Raedle/Getty Images Jack Dorsey cofounded Twitter in 2006 and the company made him a billionaire. He's famous for his unusual life of luxury, including a daily fasting routine and regular ice baths. He stepped down as Twitter CEO in November 2021 but continues to lead Block as its "Block Head." Visit Business Insider's home page for more stories. From fighting armies of bots to quashing rumors about sending his beard hair to rapper Azealia Banks, Twitter founder Jack Dorsey leads an unusual life of luxury.Dorsey has had a turbulent career in Silicon Valley. After cofounding Twitter on March 21 2006, he was booted as the company's CEO two years later, but returned in 2015 having set up his second company, Square — which he rebranded as Block in 2021.He led Twitter through the techlash that has engulfed social media companies, testifying before Congress multiple times.And Dorsey announced on November 29, 2021, he had stepped down as the CEO of Twitter. He continues to lead Block, where in April 2022 he changed his title from "CEO" to "Block Head." And on Wednesday, Dorsey officially stepped down from Twitter's board of directors amid Elon Musk's bid for the company, a move that has been expected since fall 2021.Dorsey has provoked his fair share of controversy and criticism, extolling fasting and ice baths as part of his daily routine. His existence is not entirely spartan, however. Like some other billionaires, he owns a stunning house, dates models, and drives fast cars.Scroll on to read more about the fabulous life of Jack Dorsey.Rebecca Borison and Madeline Stone contributed reporting to an earlier version of this story.Dorsey began programming while attending Bishop DuBourg High School in St. Louis.VineAt age 15, Dorsey wrote dispatch software that is still used by some taxi companies.Source: Bio. When he wasn't checking out specialty electronics stores or running a fantasy football league for his friends, Dorsey frequently attended punk-rock concerts. @jackThese days Dorsey doesn't favour the spiky hairdo.Source: The Wall Street JournalLike many of his fellow tech billionaires, Dorsey never graduated college.edyson / FlickrHe briefly attended the Missouri University of Science and Technology and transferred to New York University before calling it quits.Source: Bio.In 2000, Dorsey built a simple prototype that let him update his friends on his life via BlackBerry and email messaging.joi / FlickrNobody else really seemed interested, so he put away the idea for a bit.Source: The Unofficial Stanford BlogFun fact: Jack Dorsey is also a licensed masseur.Getty Images/Bill PuglianoHe got his license in about 2002, before exploding onto the tech scene.Sources: The Wall Street JournalHe got a job at a podcasting company called Odeo, where he met his future Twitter cofounders.Jack Dorsey, Biz Stone and Evan Williams took home the prize in the blogging category at SXSW in 2007.Flickr via Scott Beale/LaughingSquidOdeo went out of business in 2006, so Dorsey returned to his messaging idea, and Twitter was born.On March 21, 2006, Dorsey posted the first tweet.Jack Dorsey's first tweet.Twitter/@jackDorsey kept his Twitter handle simple, "@jack."Dorsey and his cofounders, Evan Williams and Biz Stone, bought the Twitter domain name for roughly $7,000.Khalid Mohammed / AP ImagesDorsey took out his nose ring to look the part of a CEO. He was 30 years old.A year later, Dorsey was already less hands-on at Twitter. Evan Williams and Jack Dorsey.Wikimedia CommonsBy 2008, Williams had taken over as CEO, and Dorsey transitioned to chairman of Twitter's board. Dorsey immediately got started on new projects. He invested in Foursquare and launched a payments startup called Square that lets small-business owners accept credit card payments through a smartphone attachment.Sources: Twitter and Bio.In 2011, Dorsey got the chance to interview US President Barack Obama in the first Twitter Town Hall.President Obama talks to the audience next to Jack Dorsey during his first ever Twitter Town Hall.ReutersDorsey had to remind Obama to keep his replies under 140 characters, Twitter's limit at the time.Source: TwitterTwitter went public in November 2013, and within hours Dorsey was a billionaire.APIn 2014 Forbes pegged Dorsey's net worth at $2.2 billion. On the day it was reported he was expected to resign, Bloomberg's Billionaires Index calculated his net worth at $12.3 billion.Source: Bio. and ForbesIt was revealed in a 2019 filing that Dorsey earned just $1.40 for his job as Twitter CEO the previous year.Twitter and Square founder Jack Dorsey, who doesn't earn anything from his primary day job.David Becker / GettyThe $1.40 salary actually represented a pay rise for Dorsey, who in previous years had refused any payment at all.He's far from the only Silicon Valley mogul to have taken a measly salary - Mark Zuckerberg makes $1 a year as CEO of Facebook.Source: Insider He might have been worth more had he not given back 10% of his stock to Square.Jack Dorsey with Hollywood producer Brian Grazer, Veronica Smiley, and Kate Greer at the annual Allen and Co. conference at the Sun Valley, Idaho Resort in 2013.ReutersThis helped Square employees, giving them more equity and stock options. It was also helpful in acquiring online food-delivery startup Caviar.Sources: Insider and CaviarWith his newfound wealth, he bought a BMW 3 Series, but reportedly didn't drive it often.Alex Davies / Business Insider"Now he's able to say, like, 'The BMW is the only car I drive, because it's the best automotive engineering on the planet,' or whatever," Twitter cofounder Biz Stone told The New Yorker in 2013.Source: The New YorkerHe also reportedly paid $9.9 million for this seaside house on El Camino Del Mar in the exclusive Seacliff neighborhood of San Francisco.The Real Estalker via Sotheby'sThe house has a view of the Golden Gate Bridge, which Dorsey views as a marvel of design.Source: InsiderBefore the pandemic, Dorsey said he worked from home one day a week.Jack Dorsey's home setup.Twitter/@jackIn an interview with journalist Kara Swisher conducted over Twitter, Dorsey said he worked every Tuesday out of his kitchen.He also told Kara Swisher that Elon Musk is his favorite Twitter user.Elon Musk is a prolific tweeter.PewDiePie/YouTubeDorsey said Musk's tweets are, "focused on solving existential problems and sharing his thinking openly."He added that he enjoys all the "ups and downs" that come with Musk's sometimes unpredictable use of the site. Musk himself replied, tweeting his thanks and "Twitter rocks!" followed by a string of random emojis.Both Musk and Dorsey are crypto enthusiasts, and appear to have developed a good public relationship.Source: InsiderFacebook CEO and rival Mark Zuckerberg once served Jack Dorsey a goat he killed himself.Gene KimDorsey told Rolling Stone about the meal, which took place in 2011. Dorsey said the goat was served cold, and that he personally stuck to salad.Source: Rolling StoneHis eating habits have raised eyebrows.Phillip Faraone/Getty Images for WIRED25Appearing on a podcast run by a health guru who previously said that vaccines caused autism, Dorsey said he eats one meal a day and fasts all weekend. He said the first time he tried fasting it made him feel like he was hallucinating."It was a weird state to be in. But as I did it the next two times, it just became so apparent to me how much of our days are centered around meals and how — the experience I had was when I was fasting for much longer, how time really slowed down," he said.The comments drew fierce criticism from many who said Dorsey was normalizing eating disorders.In a later interview with Wired, Dorsey said he eats seven meals a week, "just dinner."Sources: Insider, The New StatesmanIn the early days of Twitter, Dorsey aspired to be a fashion designer.Cindy Ord / Getty Images, Franck MichelDorsey would regularly don leather jackets and slim suits by Prada and Hermès, as well as Dior Homme reverse-collar dress shirts, a sort of stylish take on the popped collar.More recently he favors edgier outfits, including the classic black turtleneck favored by Silicon Valley luminaries like Steve Jobs.Sources: CBS News and The Wall Street JournalHe also re-introduced the nose-ring and grew a beard.GettyDorsey seems to care less about looking the part of a traditional executive these days.Singer Azealia Banks claimed to have been sent clippings of Dorsey's beard hair to fashion into a protective amulet, although Dorsey denied this happened.Azealia Banks.GettyIn 2016, Banks posted on her now-deleted Twitter account that Dorsey sent her his hair, "in an envelope." Dorsey later told the HuffPo that the beard-posting incident never happened.Sources: Insider and HuffPoDorsey frequently travels the world and shares his photos with his 6 million Twitter followers.Jack Dorsey meeting Japanese Prime Minister Sinzo Abe.Twitter/@JPN_PMOOn his travels, Dorsey meets heads of state, including Japan's former Prime Minister Shinzō Abe.Source: TwitterTweets about his vacation in Myanmar also provoked an outcry.Bagan, Myanmar.Shutterstock/Martin M303Dorsey tweeted glowingly about a vacation he took to Myanmar for his birthday in December 2018. "If you're willing to travel a bit, go to Myanmar," he said.This came at the height of the Rohingya crisis, and Dorsey was attacked for his blithe promotion of the country — especially since social media platforms were accused of having been complicit in fuelling hatred towards the Rohingya.Source: InsiderHowever, Dorsey says he doesn't care about "looking bad."FILE PHOTO: U.S. President Trump welcomes South Korea’s President Moon to the White House in WashingtonReutersIn a bizarre Huffington Post interview in 2019, Dorsey was asked whether Donald Trump — an avid tweeter — could be removed from the platform if he called on his followers to murder a journalist. Dorsey gave a vague answer which drew sharp criticism.Following the interview's publication, Dorsey said he doesn't care about "looking bad.""I care about being open about how we're thinking and about what we see," he added.In September 2018, Jack Dorsey was grilled by lawmakers alongside Facebook COO Sheryl Sandberg.Facebook COO Sheryl Sandberg and Jack Dorsey are sworn-in for a Senate Intelligence Committee.Drew Angerer/Getty ImagesDorsey and Sandberg were asked about election interference on Twitter and Facebook as well as alleged anti-conservative bias in social media companies.Source: InsiderDuring the hearing, Dorsey shared a snapshot of his spiking heart rate on Twitter.AP Photo/Jose Luis MaganaDorsey was in the hot seat for several hours. His heart rate peaked at 109 beats per minute.Source: InsiderDorsey testified before Congress once again on October 28, 2020.Jack Dorsey tuning into the hearing with the Senate Committee on Commerce, Science and Transportation.U.S. Senate Committee on Commerce, Science and Transportation/Handout via REUTERSDorsey appeared via videoconference at the Senate hearing on Section 230, a part of US law that protects internet companies from legal liability for user-generated content, as well as giving them broad authority to decide how to moderate their own platforms.In prepared testimony ahead of the hearing, Dorsey said stripping back Section 230 would "collapse how we communicate on the Internet," and suggested ways for tech companies to make their moderation processes more transparent. During the hearing, Dorsey once again faced accusations of anti-conservative biasJack Dorsey appearing virtually at the hearing.Michael Reynolds-Pool/Getty ImagesThe accusations from Republican lawmakers focused on the way Twitter enforces its policies, particularly the way it has labelled tweets from President Trump compared to other world leaders.Dorsey took the brunt of questions from lawmakers, even though he appeared alongside Facebook CEO Mark Zuckerberg and Google CEO Sundar Pichai.Source: ProtocolDuring the hearing, the length of Dorsey's beard drew fascination from pundits.Dorsey had to address accusations of censorship.Greg Nash/Pool via REUTERSSome users referred to Dorsey's facial hair as his "quarantine beard," while others said it made him look like a wizard.—rat king (@MikeIsaac) October 28, 2020—Taylor Hatmaker (@tayhatmaker) October 28, 2020"Jack Dorsey's beard is literally breaking Twitter's own face detection," posted cybersecurity blogging account @Swiftonsecurity.—SwiftOnSecurity (@SwiftOnSecurity) October 28, 2020 Dorsey also addressed the way Twitter dealt with a dubiously sourced New York Post story about Hunter Biden.Jack Dorsey appearing on-screen at the hearing.Greg Nash/Pool via REUTERS TPX IMAGES OF THE DAYWhen the New York Post published a report about Hunter Biden on October 14 that threw up red flags about sourcing, Twitter blocked users from sharing URLs citing its "hacked materials" policy.Dorsey subsequently apologized publicly, saying it was wrong of Twitter to block URLs.—jack (@jack) October 16, 2020During the Senate hearing, Sen. Ted Cruz accused Twitter of taking the "unilateral decision to censor" the Post.Dorsey said the Post's Twitter account would remain locked until it deleted its original tweet, but that updated policies meant it could tweet the same story again without getting blocked.Source: InsiderDorsey had to appear before another hearing on November 17 2020 — this time about how Twitter handled content moderation around the 2020 presidential election.U.S. Senate Judiciary Committee via REUTERS/File PhotoDorsey was summoned alongside Facebook CEO Mark Zuckerberg by Republicans who were displeased with how the platforms had dealt with then-President Donald Trump's social media accounts. Both CEOs defended their companies, saying they are politically neutral.When he's not in Washington, Dorsey regularly hops in and out of ice baths and saunas.This is not Dorsey's sauna.ShutterstockDorsey said in the "Tales of the Crypt" podcast that he started using ice baths and saunas in the evenings around 2016.He will alternately sit in his barrel sauna for 15 minutes and then switch to an ice bath for three. He repeats this routine three times, before finishing it off with a one-minute ice bath.He also likes to take an icy dip in the mornings to wake him up.Source: CNBCDorsey's dating life has sparked intrigue. In 2018, he was reported to be dating Sports Illustrated model Raven Lyn Corneil.Sports Illustrated Swimsuit / YouTube / GettyPage Six reported in September 2018 that the pair were spotted together at the Harper's Bazaar Icons party during New York Fashion Week. Page Six also reported that Dorsey's exes included actress Lily Cole and ballet dancer Sofiane Sylve.Source: Page SixHe's a big believer in cryptocurrency, frequently tweeting about its virtues.Teresa Kroeger/Getty ImagesIn particular, Dorsey is a fan of Bitcoin, which he described in early 2019 as "resilient" and "principled." He told the "Tales of the Crypt" podcast in March that year that he was maxing out the $10,000 weekly spending limit on Square's Cash App buying up Bitcoin.In October 2020 he slammed Coinbase CEO Brian Armstrong for forbidding employee activism at the company, saying cryptocurrency is itself a form of activism.—jack (@jack) September 30, 2020 Source: Insider, Insider and CNBC Dorsey said Square was launching a new bitcoin business in summer 2021.Square CEO Jack Dorsey speaks at the Bitcoin 2021 Convention, a crypto-currency conference held on June 4, 2021 in Miami, Florida.Joe Raedle/Getty ImagesDorsey announced the new venture in a tweet on July 15, 2021 and said its name was "TBD." It wasn't clear whether that was its actual name, or Dorsey hadn't decided on a name yet.—jack (@jack) July 15, 2021 Dorsey said he hopes bitcoin can help bring about "world peace."Jack Dorsey on stage at the Bitcoin 2021 Convention, a crypto-currency conference in Miami.Joe Raedle/Getty ImagesDorsey appeared alongside Elon Musk and Ark Invest CEO Cathie Wood during a panel called "The B Word" on July 2021. He said he loves the bitcoin community because it's "weird as hell.""It's the only reason that I have a career — because I learned so much from people like who are building bitcoin today," Dorsey said.At the end of 2019 Dorsey said he would move to Africa for at least three months in 2020.AP Photo/Francois MoriDorsey's announcement followed a tour of Ethiopia, Ghana, Nigeria, and South Africa. "Africa will define the future (especially the bitcoin one!). Not sure where yet, but I'll be living here for 3-6 months mid 2020," he tweeted. Dorsey then came under threat of being ousted as Twitter CEO by activist investor Elliott Management.Paul Singer, founder and president of Elliott Management.REUTERS/Mike Blake/File PhotoBoth Bloomberg and CNBC reported in late February 2020 that major Twitter investor Elliott Management — led by Paul Singer — was seeking to replace Dorsey. Reasons given included the fact that Dorsey split his time between two firms by acting as CEO to both Twitter and financial tech firm Square, as well as his planned move to Africa.Source: InsiderTesla CEO and frequent Twitter user Elon Musk weighed in on the news, throwing his support behind Dorsey.Tesla CEO Elon Musk.REUTERS/Hannibal Hanschke"Just want to say that I support @jack as Twitter CEO," Musk tweeted, adding that Dorsey has a good heart, using the heart emoji.Source: InsiderDorsey managed to strike a truce with Elliott Management.AP Photo/Jose Luis MaganaTwitter announced on March 9, 2020 that it had reached a deal with Elliott Management which would leave Jack Dorsey in place as CEO.The deal included a $1 billion investment from private equity firm Silver Lake, and partners from both Elliott Management and Silver Lake joined Twitter's board.Patrick Pichette, lead independent director of Twitter's board, said he was "confident we are on the right path with Jack's leadership," but added that a new temporary committee would be formed to instruct the board's evaluation of Twitter's leadership.In April 2020, Dorsey announced that he was forming a new charity fund that would help in global relief efforts amid the coronavirus pandemic.Dorsey.Matt Crossick/PA Images via Getty ImagesDorsey said he would pour $1 billion of his own Square equity into the fund, or roughly 28% of his total wealth at the time. The fund, dubbed Start Small LLC, would first focus on helping in the fight against the coronavirus pandemic, he said.Dorsey said he would be making all transactions on behalf of the fund public in a spreadsheet.In July 2020, hackers compromised 130 Twitter accounts in a bitcoin scam.TwitterThe accounts of high-profile verified accounts belonging to Bill Gates, Kim Kardashian West, and others were hacked, with attackers tweeting out posts asking users to send payment in bitcoin to fraudulent cryptocurrency addresses.As a solution, Twitter temporarily blocked all verified accounts — those with blue check marks on their profiles — but the damage was done.  Elon Musk said he personally contacted Dorsey following the hack.Elon Musk (left) and Dorsey.Susan Walsh/AP; Getty ImagesDuring a July 2020 interview with The New York Times, Musk said he had immediately called Dorsey after he learned about the hack."Within a few minutes of the post coming up, I immediately got texts from a bunch of people I know, then I immediately called Jack so probably within less than five minutes my account was locked," said Musk.Source: The New York TimesIn March 2021 Dorsey put his first-ever tweet up for auction.Jack Dorsey and Sheryl Sandberg, Facebook COO, off camera, testify during a Senate (Select) Intelligence Committee hearing in Dirksen Building where they testified on the influence of foreign operations on social media on September 5, 2018Tom Williams/CQ Roll CallAs the craze for Non-fungible tokens (NFTs) gathered momentum, Dorsey announced he was auctioning his first tweet for charity. It was bought for $2.9 million by Hakan Estavi, chief executive at at Bridge Oracle. Dorsey said proceeds from the auction would go to Give Directly's Africa response.Twitter announced on November 29 Dorsey had stepped down as CEO.Jack Dorsey co-founder and chairman of Twitter and co-founder and CEO of Square.Joe Raedle/Getty ImagesCNBC was the first to report on Dorsey's expected resignation, citing unnamed sources.Twitter confirmed the story the same day, announcing Chief Technology Officer Parag Agrawal would take over as CEO with immediate effect.Dorsey posted on his Twitter account saying: "Not sure anyone has heard but, I resigned from Twitter."In his tweet he included a screenshot of the email he sent to Twitter staff announcing his resignation.—jack⚡️ (@jack) November 29, 2021And in May 2022, his time on the board of directors officially came to an end, an anticipated move that coincides with the company's stockholder's meeting. Two days after Dorsey stepped down as Twitter CEO, Square changed its name to Block.Block's revamped logo.Block"The name change creates room for further growth," the company said in a statement."Block references the neighborhood blocks where we find our sellers, a blockchain, block parties full of music, obstacles to overcome, a section of code, building blocks, and of course, tungsten cubes," it added.The line about tungsten cubes was an apparent reference to a craze among crypto enthusiasts of paying as much as $3,500 for novelty tungsten cubes.In April 2022, Dorsey changed his official title at Block from CEO to "Block Head."Jack Dorsey's official job description on the Block website was changed to say Block Head.BlockThe title change was made official in a regulatory filing with the Securities and Exchange Commission on April 20, 2022."There will be no changes in Mr. Dorsey's roles and responsibilities," the filing said.Block's website was also updated to list his new title as Block Head.Musk tweeted in response to the news using fire emojis to signal his approval for Dorsey's title.—Elon Musk (@elonmusk) April 23, 2022 Musk officially added the title of "Technoking" to his role at Tesla in March 2021.Dorsey said in an April 2022 tweet his "biggest regret" was Twitter shutting down Vine.Jack Dorsey, CEO of Twitter and co-founder & CEO of Square, attends the crypto-currency conference Bitcoin 2021 Convention at the Mana Convention Center in Miami, Florida, on June 4, 2021.Marco Bello/AFP/Getty ImagesDorsey replied to a Twitter user lamenting Vine's demise saying: "I know. Biggest regret," accompanied by a sad face emoji.Twitter acquired short-form video app Vine in 2012 but shut it down in 2016.Read the original article on Business Insider.....»»

Category: topSource: businessinsiderMay 25th, 2022

A Los Angeles teen led a fight to shut down urban oil wells, survived cancer, and won a "Green Nobel"

Nalleli Cobo fought to close a leaking oil well near her home, sue the city of Los Angeles for environmental racism, and phase out urban drilling. Nalleli Cobo in front of the closed AllenCo site.Tamara Leigh Photography for the Goldman Environmental Prize Nalleli Cobo has spent half her life fighting to end oil and gas drilling in Los Angeles. Cobo and her neighbors became sick as a nearby oil well site leaked potentially toxic gas into the air. The 21-year-old won a 2022 Goldman Environmental Prize for her successful efforts to stop urban drilling. When she was 9 years old, Nalleli Cobo got a nosebleed that changed her life.It was the first of many, soon accompanied by headaches, heart palpitations, stomach pain, spasms, and asthma.Cobo lived in an apartment in South Los Angeles with three siblings, her great-grandparents, and her mother, who had immigrated there from Mexico. Talking with their neighbors, they learned that many people in the building were experiencing similar health issues. They suspected the oil-drilling site across the street."Everyone could smell it," Cobo told Insider.The oil wells, run by a company called AllenCo, often emitted a nauseating rotten-egg smell. Sometimes the smell seemed masked with artificial scents, filling the neighborhood with the smell of guava or cherries or chocolate.It turned out the AllenCo site was leaking. Gas from drilling sites can contain harmful substances like particulate matter, benzene, and carbon monoxide. Research has linked proximity to oil and gas wells with higher rates of preterm births, respiratory irritation, cardiovascular disease, and cancer.Active pumpjacks from oil wells in Culver City, Los Angeles County, California, on March 10, 2022.Bing Guan/ReutersWhen Cobo thinks about growing up in that apartment with her family, she said, "It just makes me so warm and fuzzy. But then you would take a step outside and it was an entirely different world."Her health issues continued for a decade, culminating in a cancer diagnosis when she was 19. She eventually underwent three surgeries, six weeks of radiation, three rounds of chemo, eight minor procedures, and fought off two infections. Because of the pandemic, she went into treatment alone. To save her life, surgeons had to remove her entire reproductive system. She can no longer have children.From the age of 9, despite her health problems, Cobo organized her neighbors and led a tireless campaign against the wells, resulting in the site's permanent closure and criminal charges against AllenCo executives. Legal disputes between the company and the city are ongoing."They chose the wrong community," said Cobo, who is now 21 and has been cancer-free for a year and five months.The work didn't stop with AllenCo. Los Angeles is home to one of the largest urban oil fields in the country. Roughly 580,000 residents live within a quarter-mile of an active well. Cobo's continued activism added to a chorus of voices from neighborhoods across the city, where residents said wells were making them sick. In January, Los Angeles City Council unanimously voted to ban new oil and gas wells and phase out existing ones over a five-year period.Cobo's efforts earned her a 2022 Goldman Environmental Prize, known as the "Green Nobel," on Wednesday.AllenCo did not immediately respond to a request for comment.After-school activism: a 'Hannah Montana' double lifeNalleli Cobo has been fighting to end oil and gas drilling in Los Angeles since she was 9.Tamara Leigh Photography for the Goldman Environmental PrizeShortly after Cobo and her neighbors began noticing health problems, toxicologists from the organization Physicians for Social Responsibility came to Cobo's building, confirmed the leak from the AllenCo site, and explained the associated health risks.Horrified, Cobo and her mother began filing complaints to the local air-quality management district. They galvanized their neighbors to speak at city council meetings and hold rallies, where Cobo spoke publicly about her health.For years, Cobo would return from school and do homework until her mother finished work. Then they would go knock on neighbors' doors to hand out flyers. Sometimes they had a meeting after school or watched documentaries on fracking and drilling."It was up to us to become the experts," Cobo said.Nalleli Cobo, a 2022 Goldman Environmental Prize winner, and her mother.Tamara Leigh Photography for the Goldman Environmental PrizeWhat she really wanted to watch was the Disney Channel crossover of the TV shows "The Suite Life of Zack and Cody" and "Hannah Montana," where Miley Cyrus plays a California teen who leads a secret double life as a famous pop star."It was learning to sacrifice things like that," Cobo said, adding, "it did low-key feel like a little 'Hannah Montana' moment, where it was my activism and being a normal little 9-year-old girl."Soon, Cobo and her neighbors had organized a group called People Over Pozos (which means "wells" in Spanish). In 2013, several inspectors from the US Environmental Protection Agency became sick after visiting the AllenCo oil wells. The company promptly suspended its operations there.Cobo and her family moved to a new neighborhood just a few months later. She said her health immediately improved."It was like crazy night and day, when I didn't have to use my inhaler 30 times a day anymore, or I could sleep in my own bed again without nosebleeds," she said.Cobo helped sue the city of Los Angeles and get the wells shut down for goodOil wells in Los Angeles, California.Tamara Leigh Photography for the Goldman Environmental PrizeThe temporary closure wasn't enough for Cobo and her neighbors to feel safe. The site wasn't completely shuttered, and there were still thousands like it across the city.In 2015, Cobo co-founded the South Central Youth Leadership Coalition. The group sued the city of Los Angeles for environmental racism, saying it had disproportionately permitted oil drilling in Latino and Black communities. Cobo remembers rushing from school to file the lawsuit before the courthouse closed for the day."I've always put my activism before school or anything. For me, it's a life-and-death situation. It's my community on the line. It's future generations on the line. It's a no-brainer that I have to give my all," she said.After the city adopted new requirements for oil drilling applications, they reached a settlement in the lawsuit.Nalleli Cobo holds the Goldman Environmental Prize.Tamara Leigh Photography for the Goldman Environmental PrizeDoctors don't know for sure what caused Cobo's cancer. "At first, we thought it was possibly genetic. So we all got tested, even my great-grandma, who was 104. And it wasn't," she said.In September 2019, inspectors for the California Department of Conservation discovered that gas was still leaking from the AllenCo site, since its wells hadn't been plugged. The following year, the site closed permanently. Cobo bought a cake to celebrate with her family. (A recent report from The Los Angeles Times indicates that the wells still haven't been properly plugged.)"I think listening to frontline communities is really important," Cobo said, adding, "We're not experts, but we know our communities, we know our stories. And that's why it's important that we work as a team."Read the original article on Business Insider.....»»

Category: topSource: businessinsiderMay 25th, 2022

The crypto crash and the future of bitcoin — 3 perspectives from an economist, a researcher, and an investor

Experts from the Frankfurt School of Finance, Emden Research, and Rudy Capital spoke with Insider about how they saw the future of cryptocurrencies. From left: Timo Emden, Philipp Sandner, and Thomas Faber.Emden/ Thomas Faber /Frankfurt School Blockchain Center / filo /Namthip Muanthongthae / Getty Images Crypto markets have recently crashed as part of a global sell-off in risky assets. Bitcoin has fallen by 25% in the past month, while Luna has lost 99% of its value. Three crypto experts told Insider how they saw the future of cryptocurrencies. This is an edited, translated version of an article that originally appeared on May 21, 2022.TerraUSD (UST) — a stablecoin that uses an algorithm to maintain its value by keeping it pegged to the US dollar — recently broke away from its dollar peg, which caused its sister coin Luna to lose over 99% of its value.In an interview with Insider, Philipp Sandner, the head of the Frankfurt School Blockchain Center at the Frankfurt School of Finance & Management, said bitcoin and other crypto tokens had been "dragged along" with the crash of UST and Luna.Sandner said the collapse resulted from numerous overvaluations and inflated token prices, which he referred to as "almost monstrous structures" that have emerged in the cryptosystem. But it's not just UST that's causing problems for bitcoin and the crypto world. Rising interest rates also affect prices, said the crypto analyst Timo Emden of Emden Research, a research firm that focuses on cryptocurrencies and blockchain. "The days of 'cheap money' are over.""Rising interest rates are proving to be poison for risky asset classes," he said. "The fear of rapid interest-rate hikes, especially by the US Federal Reserve, is taking away one of bitcoin and company's most important stimuli in recent months," he continued, alluding to the record-low interest rates of the past few years.Bitcoin and other cryptocurrencies also appear to be correlated with tech stocks, as the crypto crash comes on the back of a sell-off in more established stocks.But Emden believed that it's still a "fantastic and promising" technology."All the swan songs to bitcoin are, in my view, too early," Emden said. But from a fundamental and technical point of view, the outlook has "clouded over considerably," he added.On bitcoin's price, Emden added that "a slide to $20,000 should not come as too much of a surprise."For the crypto analyst Thomas Faber of Rudy Capital, the current macro view is "relatively gloomy." But he feels the long-term outlook "remains positive." "Nothing has changed in the foundations, value propositions, and visions of most crypto projects," Faber said. "Its disruptive firepower in many areas, such as decentralized finance, remains unchanged and will continue to gain momentum in the coming years," he added. But in the short term, he said, investors should expect further declines.Emden said the recent crash indicated the current aversion to risky asset classes. "Investors are fleeing their investments in panic," he said. "No one wants to catch the falling knife at the moment. Bargain hunters continue to stay away. The fundamental, as well as the technical, situation remains clouded. The stock-market lights are still red," Emden added.Many investors must decide whether to try to wait out the crash or sell off their remaining book profits at the "last second," he said."So there's a danger of the downward spiral continuing. Momentum has developed, which is difficult to stop," Emden continued. He added that investors should prepare for further uncertainties in the coming hours and days.For Sandner, the crypto crash leaves "a lot of scorched earth" for investors, especially those who "never really engaged with cryptocurrencies, but just invested in any old tokens."The professor believed that we were in one of the "worst crises for crypto assets.""Being part of the crypto scene has given me a thick skin over the years," Sandner said.He's experienced such crashes a few times. He said the first time you experience a crash, "you're shocked. The second time, you're also shocked because you thought it wouldn't happen again. But then you realize that crypto markets, just like stock markets, are often incredibly overvalued."Sandner believed this wouldn't be the last crypto crash: "Sometime in a few years, bitcoin will plummet again." He said this volatility provided an argument for stricter regulation to contain crypto's "wild growth."Sandner said that many people "have lost a lot of money" and now don't have the resources or the will to invest more, so they're "turning their backs" on crypto. He added that this creates a lack of liquidity and means the price can't rise.Sandner didn't believe that crypto prices would continue to fall further at the moment. "My gut feeling is that we've reached the bottom," he said.Bitcoin has fallen by about 25% in the past month, while ethereum has fallen by about 35%, and solana by about 50%. It appears that the tokens all correlate with each other, Sandner said.If bitcoin fell another 25%, then because of the correlation, the other cryptocurrencies would fall another 35% or 50%, which means they would have crashed by about 75% in just a few weeks, he added."Maybe a lot of things were inflated, but I can't see the tokens only holding around 20% of their original value," Sandner said. But he added that "anything is possible with bitcoin."Read the original article on Business Insider.....»»

Category: topSource: businessinsiderMay 25th, 2022

Nomura Warns Market "Risks Disappointment" If It Expects A "Fed Pause"

Nomura Warns Market "Risks Disappointment" If It Expects A 'Fed Pause' Another missed economic data point this morning (durable goods) just added to the misery of the US Macro Surprise Index which has plunged red to its weakest since Oct 2021... Source: Bloomberg And as Nomura's Charlie McElligott notes, this accelerating "miss" is coinciding with a market which was already obsessing on “hard-landing” recession risk due to the shock FCI-tightening of the Fed’s still relatively nascent policy pivot. Look at the directional turn in categorized sectors of the economy since May 1 to today, particularly “Housing” and “Surveys” while also seeing a sign of a turn in “Labor”... Of the last 19 major US economic data releases tracked as inputs to Bloomberg’s US Economic Surprise Index dating back to May 13th, 13 have “missed” to the downside versus expectations... And it is this broad-based US weakening which is adding to the concern that added velocity to the “Recession / Contraction” fears this week, while Nomura's Economic Quadrant work risks a further “impulse” lower towards “Contraction” after this recent string of downside surprises... Source: Nomura And while we noted earlier that rate-hike expectations are fading modestly as stocks collapse... McElligott warns that the market risks being disappointed by believing that there is a “pause” option looming, where instead, he warns: "I think the Fed is simply biting-off 1 to 2 months of (weak) forward guidance at a time right now - again, remember also from Powell: '…there could be some pain involved in restoring price stability'..." So perversely, the Nomura strategist thinks that if anything, the Fed is seeing the results of their FCI tightening campaign through these broad measures “slowing” and could actually become incrementally “emboldened” to keep PUSHING on their hiking path until the see the “whites of the eyes” of sustainably lower inflation...as opposed to the notion of “pausing and hoping” for the inflation data to move lower. Additionally / separately, McElligott believes there is a substantial “head fake” risk into the Fed's preferred inflation measures this week (particularly Core PCE Deflator MoM on Friday), where even our "above Street" hawkish Fed outlook sees this April reading as a downside risk versus expectations... but we then see the next CPI read as an upside surprise potential (Mannheim picking back up, OER / Rent, Services broadening), which could absolutely whipsaw a Rates market where “shorts” are being stopped-out “real time”. Today’s Fed Minutes could be a big deal on messaging (as the Nomura Econ Team notes): The May FOMC meeting minutes are likely to indicate a robust discussion about how quickly, and how far, the Fed’s policy normalization should progress considering elevated inflation. While Chair Powell suggested at the press conference that the Committee was not “actively” considering 75bp hikes, his subsequent public comments suggest the Committee did not rule out such action.  In addition, more FOMC participants have signaled a greater likelihood of taking rates beyond a 2.25-2.50% range, suggesting an early consensus may be forming for more restrictive policy.  We will also be paying attention to comments related to forward guidance after Powell suggested any guidance beyond 60 or 90 days may not be useful. Back to the market, Nomura's cross-asset strategist notes that the grinding “stop-out” in hawkish / bearish UST and STIR trades (i.e. the Nomura QIS model estimating “short covering” of +$44.8B in G10 Bonds over the past 2w alone)... Net CTA Bond Exposure at 18.4%ile ...has further contributed to deteriorating market liquidity now, as funds have reduced to low grosses- / nets- in the trade... Gross CTA Bond Exposure at 4.5%ile since 2011 Simply put, the bond market is still significantly short, becoming drastically less liquid, and the growing perception that the (negative) economic response to Fed hawkishness is going to dictate an FOMC "downshift" is misplaced. Tyler Durden Wed, 05/25/2022 - 11:45.....»»

Category: blogSource: zerohedgeMay 25th, 2022