Elon Musk Was Concerned Over Dad Errol"s "Inappropriate Behaviour" Towards Minor Stepsister: Biography

I Rode With An Ice Road Trucker To The Arctic Circle. Here's What It Was Like By Rachel Premack of Freightwaves On July 30, I flew from my home in New York City to Anchorage, Alaska, to hitchhike to the Arctic Ocean. I am not mentally imbalanced. I am a reporter who covers the trucking industry. Let me provide some more context: Back in May, with my colleague John Paul Hampstead, I wrote a story about the controversial growth of drilling in Alaska and its effect on the $800 billion trucking industry. There’s a nasty freight recession slamming U.S. trucking fleets, but Alaska seems to be experiencing the opposite. Alaskan trucking executives told me in May that they’re planning on doubling in size. They want to hire not just Alaska residents, but folks from the Lower 48.  Sourdough Express, which was founded in 1898, is one of those companies looking to lavish pay raises on employees and hire more. Just this month, President Josh Norum gave his linehaul truck drivers a 25% pay bump. “[W]e are building the team for all the work the next 4 years,” he recently told me over text message. These companies particularly want more drivers to haul equipment on the Dalton Highway, which ends in the North Slope oil drilling region. It’s not a job for any ol’ truck driver. I wanted to see the experience for myself — why was it that trucking in Alaska had inspired shows like “Ice Road Truckers?” Why is everyone so fascinated by driving a truck in a really cold place? And is it as dangerous as it looks on television? Alaska’s North Slope Borough. A whopping 11,000 people live here, which is actually more than I would have guessed. (Image: U.S. Bureau of Land Management) Norum advised me to come before the summer was up. So, on July 30, I took the 12-ish hour trip to Anchorage. I was only four hours behind Eastern Time but incredibly thrown off. At 10 p.m. local time, or 2 a.m. Eastern, the skies were bright blue, the sun beating down.  I fell asleep regardless. That next morning, I was off to Sourdough Express’ Anchorage terminal.  My path. I would travel from Anchorage to Fairbanks, stay in a hotel overnight, then go from Fairbanks to Deadhorse. (Google Maps) The Anchorage terminal was more hectic than I would have expected. It reminded me of other truck terminals I’ve been to in New York City — plenty of day cabs and overnight cabs alike. Summer is actually a slower time for Alaskan trucking fleets for Sourdough. Even in the Arctic Circle, the summer is too warm to maintain the region’s famous ice roads.  Local governments create those ice roads every November and December. On that hard, frozen ground, oil company workers build and live in so-called “man camps” where they work wild shifts all winter. Truck drivers service those man camps with everything from Cheetos to drilling equipment to mattresses.  The land is too soft and squishy to support oil rigs and trucks in the summer. Instead, this season is when truckers bring up everything that oil companies will need in the winter. It’s the full-time Alaskan truck drivers who stick around, hauling pipes and steel plates that will be used in a few months. I wouldn’t be experiencing the ice roads during this trip, but if I gathered my gumption perhaps I could come back in the winter.  Then, in the winter, truck drivers from all over the U.S. come up to cash in on the lucrative, dangerous, thrilling job of being an ice road trucker. An executive at Alaska West Express, another local trucking company, told me in May that such truck drivers can make $150,000 to $170,000 a year, in addition to benefits. It’s an amazing compensation compared to the typical tractor-trailer driver, who the federal government says earns a median annual wage of around $48,000. Well, anyways, before I could enjoy the Dalton Highway, I had to get from Anchorage to Fairbanks. Kyle Monnier, a 30-year-old who was born and raised in Alaska, would be my driver for that journey.  I went to the bathroom before we left. I got used to wearing this safety vest. It provides a nice splash of color to any outfit you may be wearing. 8:38 a.m. Stylish! (Photo: Rachel Premack/FreightWaves) And off we went!  July 31: Anchorage to Fairbanks, 359 miles Monnier and I would be hauling two trailers (typical for Alaska) of building supplies from Anchorage to Fairbanks. These weren’t urgent loads. The first trailer was wood and the one behind was insulation.   12:51 p.m. A full view of the truck while we grabbed lunch. (Photo: Rachel Premack/FreightWaves) The first, unexpected thing I learned about trucking in Alaska is the difference in the state’s hours-of-service (HOS) laws. Federal laws require truck drivers to drive no more than 11 hours in a 14-hour period. They also need to take 34 hours off duty if they’ve driven up to 60 hours in a seven-day period or 70 hours in an eight-day period. (Here’s more information on HOS regulations if for some bizarre reason you are curious.) HOS regulations can be a snore outside the trucking community, but they’re huge for drivers. They function totally differently in Alaska. I was shocked when I got into Monnier’s cab that he had 15 hours of driving in a 20-hour window. His on-duty time was 80 hours, too. Alaska has extended HOS rules in part because driving here can be so unpredictable. For example, dirt roads means equipment can get unexpectedly beat up. Because Alaska is so sparsely populated, you might be waiting a while for a mechanic if you need help.  Getting out of Anchorage was quick enough, though Monnier said the traffic leaving the big city is pretty bad. Coming from New York, this didn’t look terribly congested to me. 8:55 a.m. A definite plus of driving in Alaska is the lack of traffic and the views. (Photo: Rachel Premack/FreightWaves)2:09 p.m. We’re near Denali National Park here. (Photo: Rachel Premack/FreightWaves) On days that he works, Monnier drives the six hours from Anchorage to Fairbanks, unloads, and then typically drives the six hours back to Anchorage empty. He usually stops at a gas station for a simple meal. At his usual spot, I got surprisingly good chicken nuggets and a bag of chips. I’ve reported for years about how truck drivers usually have to rely on packaged and processed foods. One thing I didn’t truly understand before riding along with Monnier is just how important energy drinks are for a truck driver. When you’re chugging along the road, you can’t exactly park at an artisan cafe or go through a Starbucks drive-thru. Instead, Monster energy drinks — or in my case, Celsius — become your main source of caffeine. 2:20 p.m. I built up the courage at last to ask Monnier if I could get a picture of him. (Photo: Rachel Premack/FreightWaves) We were on the road for about seven hours, so we naturally talked for a while. Monnier’s wife and son live in the Lower 48, though she’s also from Alaska. Monnier became a truck driver shortly after graduating from high school.  After several hours chatting, Monnier played the music he normally listens to while he’s driving. He was worried I might be offended by rap music, but I am not. His music taste ended up eclectic at minimum — rap to country to electronica to “Barbie Girl.” (He has not watched the movie!) “I have listened to every song on Pandora at least 20 times,” he said. 5:23 p.m. Unhooking and leaving Fairbanks. (Photo: Rachel Premack/FreightWaves) All good things must come to an end, and eventually Monnier and I reached Fairbanks. He unhooked his load and bobtailed back to Anchorage; very little freight comes out of Fairbanks headed downstate. My day was finished, but his was only halfway over. Aug. 1: Fairbanks to Prudhoe Bay, 495 miles I enjoyed a good night’s sleep at a Best Western Plus. The sun set at 11:02 p.m. Next on deck was the more fearsome part of the journey: Fairbanks to Prudhoe Bay on the Dalton Highway. Monnier said he had gone a few times and was open to driving on it again. I would be riding with Richard Mustain. Monnier assured me Mustain — or Mustang, as his call sign goes — was a Dalton Highway veteran, who knew just about everything there is to know about the road.  After a good night’s sleep, I arrived before 8 the next morning at Sourdough’s Fairbanks terminal. 7:56 a.m. The trucks are ready to rumble. (Photo: Rachel Premack/FreightWaves) Mustang and I would be hauling pipes for the oil fields in Prudhoe. We would also be joined by a training driver named Mike who had never gone on the Dalton Highway before. Alaskan truck drivers call it “the Dalton.” They also all know it is exactly 414 miles. Construction on the road finished in 1974. It exists only because of the Trans-Alaska Pipeline System, which runs above and below ground alongside the Dalton. During the ride, I would gaze upon the pipeline as a fond friend accompanying us. In retrospect, it is incredibly odd to rely upon a pipeline as a source of mental support. The Dalton does not begin in Fairbanks. First, you have to drive exactly 73.1 miles on another road called the Elliot Highway. I lost phone service shortly into the Elliot, and did not get it again until we reached the end of the trip. At the beginning of the Dalton, you see a series of alarming signs that make clear to anyone not driving an 18-wheeler that maybe you should bugger off: “HEAVY INDUSTRIAL TRAFFIC. PROCEED WITH CAUTION.” I was comfortably in the passenger seat of Mustang’s 2024 Peterbilt and had no guilt about proceeding. Mustang at 10:45 a.m. (Photo: Rachel Premack/FreightWaves) Truck drivers on the Dalton are dealing with steep grades in addition to heavy loads. Sourdough trucks typically haul around 110,000 pounds here – a significant bump from the typical 80,000-pound limit in the Lower 48. Oversized loads escorted by two pick-up trucks are also common here. So, when truck drivers are slowly navigating hills or curves on the road, typical passenger vehicles or motorbikes pose a safety issue. Mustang said he typically drives around 35 mph. It’s not surprising, then, that passenger vehicles might try to skirt around him. The issue of motorcyclists and “four-wheelers” (as truck drivers call us plebeians) quickly became clear.  Mustang remained calm about 6 miles into the Dalton when a pack of motorbikes passed us. Moves on the road that might send a typical driver (not me, of course) into a fit of expletives didn’t get more than a chuckle from Mustang. Whenever the odd car appeared on the horizon, he would get on his CB radio and alert Mike behind us to keep a watch out. 10:36 a.m. Respect heavy industrial traffic! (Photo: Rachel Premack/FreightWaves) Mustang is a Missouri native, a self-described “farm boy” who quit high school and started a family as a young man. He’s been a truck driver for 30 years. In 2015, a friend of his was telling a group — all truck drivers — about his experience hauling fuel. Mustang was the only one who actually went that winter. He showed up at the Fairbanks airport with a gym bag, completely out of his element. “It was scary to come up here,” Mustang said. “I didn’t know nobody. People I didn’t know picked me up from the airport.” He loved it immediately. He barely took photos on his phone before he moved to Alaska; now, he has about 10,000 of them. Most of them are in the same place, just different seasons. The long grasses change colors — red, pink, beige. That makes the mountains look different week to week. And then there’s the sky. Because of the ice crystals that form in the atmosphere during the long winters, “sun dogs” appear where it looks like there are three suns in the sky. Most fantastic might be the aurora borealis, which can make it look like the sky is swirling, shooting fingers down. “It will make your insides feel funny,” Mustang said. Mustang identifies as a “cheechako,” which is Alaskan slang for someone who just moved here and is amazed by everything. After about 10 years as a cheechako, Mustang says you become a “sourdough” — not a native-born Alaskan, but a hardened resident who isn’t, say, taking pictures of the same mountain every few days.  “They come outside, look around and aren’t amazed by what they see,” Mustang said. “I’m not sure I’ll get to that point.” John, an Anchorage resident I met after the ride-along, mentioned to me that he views himself as Alaskan, not American. Alaska is, of course, a U.S. state, but many residents here refer to the contiguous 48 states the way Canadians might. I heard folks call the Lower 48 the “States,” “America” or simply “the lower.” “Once you start living in Alaska, you lose touch with ‘the lower’ — the last tornado, the last school shooting,” Mustang told me. “It’s like being in a different country when you live here.” 11:34 a.m. Truck drivers on the Dalton typically warn each other when they’re approaching each other. (Photo: Rachel Premack/FreightWaves) The Dalton is mostly a dirt road. Mustang told me it’s normal for a trucker’s windshield to crack during the workday because rocks fling around the vehicle’s tires and hit the windshield. Four-wheelers and motorcyclists aside, the Dalton is truly a trucker’s kingdom. Every few dozen mileposts, there’s a spot with a nickname, likely christened by a truck driver. At milepost 74, there’s the “Roller Coaster,” featuring ups and downs. “Finger Mountain” is at milepost 98, so named because it looks like a middle finger. (I didn’t see the resemblance.) Milepost 126 is “Oh Shit Corner,” where a sharp turn may shock Dalton truckers who don’t have Mustang on the CB radio guiding them. Milepost 132 is “Gobbler’s Knob.” We are in polite company and I will not share the origin of that name. 12:23 p.m. A rare moment of paved highway. (Photo: Rachel Premack/FreightWaves) Some signs on the Dalton pointed out these charming names, but it’s otherwise just passed down from each generation of Dalton truckers. Mustang said he’s part of the third generation of truck drivers on the Dalton. The first came in the 1970s and 1980s — guys who truly roughed it and whom Mustang spoke of with reverence. He said it took three days back then to get to Prudhoe Bay; now it can be done in 14 hours. Next, there was the next generation who trained the likes of Mustang. Mustang embraces the responsibility of training the next generation. He wears a Prudhoe Bay T-shirt most days as a sort of uniform.  Most exciting to me was milepost 115, when we officially crossed into the Arctic Circle. 2:10 p.m. It wasn’t even that cold. (Photo: Rachel Premack/FreightWaves) I learned that the Arctic Circle, which I previously thought meant “it’s really cold,” refers to any location on Earth where the sun is up for 24 hours at least one day a year and down for 24 hours at least one day a year. It cannot be overstated that the Dalton, and the entire state of Alaska, is beautiful. The summer is particularly fantastic. I did not see a dark sky once the entire week I was in Alaska, which is probably why I was easily delighted during my seven days there. The weather was a perfect 60 to 70 degrees. The winter, of course, is less charming. In Anchorage, where nearly half of the state lives, the sun is up for as little as 5 1/2 hours a day. Research on Alaska suggests that depression, alcoholism and even partner abuse increase amid these dark, cold days. “The light and dark messes with your insides, your mind, your body,” Mustang said, and luckily added, “but it doesn’t seem to bother me.” It’s even worse in our final destination of Prudhoe Bay, where thousands work and live in the winter. The sun does not rise — at all — from late November to late January. John, the Alaskan I met later that week, told me he was an oil rig worker when he was a younger man. The big conversation during the winters in the cafeteria was whether or not you saw the sun that day. The truck cabin was getting sunnier as we discussed all this. That’s because the trees were shrinking. We were approaching the tundra. 3:20 p.m. If you think this picture is nice, guess what the real view was like! We were also approaching the last place where a truck driver (or trucking journalist) could get food and use the bathroom until we hit Deadhorse, the main settlement of Prudhoe Bay. It was also frankly one of the first places since we got on the Dalton that functioned as a rest stop. The town is Coldfoot. By the way, you may have been wondering how anyone uses the bathroom when driving in the Arctic wilderness. It’s called pulling over to “kick a tire” (read: peeing next to your truck). Creative ways to use the bathroom while trucking aren’t exclusive to Alaska, but here it can get dangerous. Mustang told me of a recent episode when he kicked a tire and came back around to his truck to find a bear standing there. He charged the bear and it mercifully ran off. I do not need to tell you here that I drank very little water the day I was on the Dalton. Exhausted and hungry, I was happy to get to Coldfoot. It’s allegedly the world’s farthest north truck stop. Mustang warned me not to get anything fried. As previously stated, opportunities for bathrooms are limited. 3:50 p.m. Coldfoot Camp, which claims to be the world’s farthest north truck stop. Google ranks it as a 1-star hotel, but its Google and TripAdvisor reviews overwhelmingly cheery. Here’s the menu. I got a burger and a bowl of their soup of the day. My colleague Justin Martin, aka “Super Trucker,” noted when I showed him a picture of the menu that the prices weren’t as bad as he had guessed.  Mustang went back out to his truck to check up on his and Mike’s equipment. Meanwhile, I was kind of … confused on what to do next. We were going to sit at a communal table specifically for truck drivers, but I felt a bit out of sorts. The jet lag started to kick in and I felt a bit awkward.  3:49 p.m. Trucking in Alaska is what I picture it was like back in the good ol’ days. Most truckstops and gas stations are small, or at least locally owned chains. Because of the oil industry, truck drivers and the industrial economy just loom larger in the public imagination. That seems to allow truck drivers to command more respect from the driving population. Anyways, I sat down and ate my burger. Then I bought some stuff from the gift shop. I started to get a real appreciation then for how long a truck driver’s workday is. We started the work day nearly eight hours ago, but we still had about half the Dalton left to drive. Mustang told me that a particularly active Dalton truck driver can do three trips to Prudhoe a week, which translates to about six 14-hour days and three nights away from home. Mustang sticks to two weekly trips up to Prudhoe.  Our workday was about to get a bit longer. Mustang and Mike, the trainee behind us, needed to get some work done on Mike’s truck. Coldfoot has a machine shop with a mechanic who can fix up minor equipment issues. 4:50 p.m. This is the point in which I am slightly fading away. Ultimately, the issue was fixed. We were back on the road a bit after 5 p.m. It was longer than anyone wanted to be held up. We still had about 5 1/2 hours before we reached Prudhoe. It’s a necessity for Dalton truck drivers to know how to do minor — or major — repairs on their vehicles. The issue on Mike’s equipment was thankfully quick and the guys were able to catch it near a mechanic’s shop, rather than on the side of the highway hours from anyone. These were brand-new Peterbilts, and the road had already given them a bit of a beating. Mustang noted to me that most trucks in Alaska have separate fuel tanks because, say, a caribou might come up and pierce one of them with its antlers. This sounded slightly ridiculous until I saw caribou later on the drive. At 5:52 p.m., I wrote the following in my notes: “I am tired!!!” 6:46 p.m. No more trees. It was time for me to wake up. We were nearing milepost 248: the fearsome Atigun Pass, nearly 4,800 feet above sea level. That’s where the Continental Divide crosses with the Dalton. In the winter, avalanches often shut down the road. Robb Christenson, the director of sales and pricing at Sourdough, warned me about this one back in Anchorage. As we climbed the Atigun, drivers waiting to descend waited for us; this was all coordinated on the CB radio. The altitude meter clicked up and up and up. Mustang said the Atigun is “a piece of cake.” But you need to know how to approach it. In the Lower 48, truck drivers learn that they need to shift into a lower gear when descending a hill. However, in Alaska, Mustang said instead while going downhill you actually need to go into a higher gear. It’s because drivers here are hauling heavier loads. Keeping to a low gear would just push your vehicle down the mountain and you’d risk losing control. It sounds like a quick fix, but Mustang said new drivers from the Lower 48 struggle to make this adjustment. The busted guardrails on either side of the Dalton at this stretch of the drive was a grim reminder that this stretch of highway is unforgiving to mistakes.  Anyways, Mustang indeed went into the 10th gear as we descended the Continental Divide. And here I am, weeks later, telling you the tale. “This is the greatest trucking job in the world,” Mustang told me. “No traffic, no stoplights, just trucking. You see bears and critters and water.” That’s great for Mustang. However, I was not doing so hot. Sitting in a passenger seat for 12 hours (without air ride!) was not ideal. For some reason, my left knee hurt. My stomach held two Celsius energy drinks, a burger, a cream-based soup and very little water. It was becoming very clear to me again why truck drivers struggle with not just food on the road, but their body literally hurting. Combating the boredom, monotony and body aches by eating junk food seemed appropriate to me. Mustang said he once struggled with the same urges. He proudly now snacks on beef jerky and berries instead of candy bars and sips water instead of soda pop.  “It’s really easy to eat the wrong stuff while you’re trucking,” Mustang said. “A lot of depression goes on in trucking, because you’re away from your family. I love what I do but I’m way out of shape. Sitting in here, you don’t get no workout on your muscles.” Mustang tells me we have about 2 1/2 hours left. This is the most glorious news in the world. Now that the elevation (and avalanche risk) has passed us, the pipeline has reemerged. 8:05 p.m. I am still in the truck. Don’t worry, my dear pipeline is on the other side of the road. There aren’t too many people who live out here, as you could pretty well imagine. However, Mustang does drive to them during the wintertime, when ice roads make a slew of other communities accessible by car. Truck drivers bring food and other supplies to towns in the “bush.” These are communities of mostly Alaska Natives who aren’t connected to other settlements with roads. Until recently, people in the bush fished, hunted and foraged for food. But now, as money from drilling projects floods their communities, Alaska Natives are buying more from, say, Walmart and truck drivers are able to drive these goods to the bush towns. When there are no ice roads in warmer months, bush communities rely on planes or boats to deliver these nonperishable goods. Not all of the residents of these bush communities are happy with these developments. On one hand, energy companies have flooded Alaska Native communities with cash and work opportunities. Subsistence living is no longer the norm. However, new issues have plagued these settlements. Alaska Native communities now see outsize rates of diabetes, alcoholism and drug abuse compared to other Alaskans.  Some local leaders say these issues are partially a result of oil development. They’re particularly concerned about ConocoPhillips Alaska’s Willow project, which could produce up to 180,000 barrels of oil a day. President Joe Biden approved the Willow project in March. That’s good news for truck drivers and oil workers but alarming for those who say the project will be a “carbon bomb” that heightens the climate crisis. Locally, some Native Alaskans say increased drilling affects traditional rites like caribou hunting. (And that would, in turn, make them more reliant on nonperishable, processed foods from outside their communities.) Speaking of hunting, we start scanning the horizon for critters. I do spot a few caribou. We haven’t seen any bears, but they’re more scared of people than you’d think. Mustang said buffalo out here will ram your truck “until they die.” There’s another creature called muskox, which is native to the Arctic. Their fur is incredibly soft. Before I realize it, the ride is nearly finished. I am a little sad to leave.  10:10 p.m. This is the tundra! We are at last in the tundra. It’s not what I expected. It’s a beautiful, bright green grass dotted with wildflowers and slashed with light blue streams. Mustang tells me the fields are soaking wet. We still see some hunters nestled in the tall grasses, looking to shoot caribou. It’s unclear to me if they’re locals or came up here to hunt. And, once again, the landscape changes. Now it’s permafrost, which is soil that remains at or below freezing even in the summer. It’s cracked because the permafrost is no longer so permanent. Even in the Arctic Circle, temperatures are rising. Even parts of the road are starting to get hilly because the permafrost is melting and expanding. 10:24 p.m. Permafrost galore. Did I mention this is hour 14 in the truck? And then, against all odds, we make it to Deadhorse. The oil rigs, the squat buildings, the man camps, they all appear like a mirage. 10:31 p.m. I never thought I would be so happy to see an oil rig. I thank Mustang for an unforgettable experience. He admits it’s another workday for him. I fear I was an annoying passenger, or maybe he’s finally sick of Alaska, sick of trucking. But later, he sends me no fewer than nine videos (a mere slice of his 10,000-photo library) of musk oxen, pink grasses, caribou interrupting traffic, Northern Lights and even his truck on a barge heading out to the Arctic Ocean. “All of these videos pretty much explain why I love this job so much,” Mustang writes in his text message. He is a “cheechako” yet.  Thank you to Richard Mustain, Kyle Monnier, Josh Norum and everyone else at Sourdough Express I met for taking the time to show me around Alaska. If you are a truck driver with a story to share, email me at rpremack@freightwaves.com. And don’t forget to subscribe to MODES for more trucking insights. Tyler Durden Thu, 09/07/2023 - 15:00.....»»

The owner of Bang Bang Tattoo, Keith McCurdy, says he's running his shops the "right way." But some ex-employees say working there was a nightmare. Zach Meyer for InsiderKeith McCurdy has inked Justin Bieber on a private jet, Cara Delevingne at the Gansevoort hotel, and Katy Perry while traveling with her on tour. He gave Rihanna the tiny handgun tattoo that some speculated was a message to Chris Brown, her ex whom she'd accused of assault. Vogue has heralded the 37-year-old as "the best in the biz," and The New York Times has described him as having "transformed the body-art industry."McCurdy's signature style — hyperrealistic black-and-gray micro tattoos that require expert precision — has been widely replicated. Clients wait up to two months for an appointment at one of his two New York City shops, where tattoos can cost into the thousands of dollars. At Bang Bang Tattoo, "You're not paying for the tattoo," a former artist's assistant said. "You're paying for the brand."In an industry known for bold ink, edgy imagery, and an anarchist streak, McCurdy has branded himself as someone who does things differently — what he calls the "right way." He offers his staff mental-health support. He's a self-professed "protector of women" who describes his business as a feminist utopia. His shops are bare, modern, and luxurious. In McCurdy's view, he's setting the bar for the industry. "I challenge people out there to do a better job than me," he said. "I'm waiting for who's competing with us. I don't see it."Yet some former Bang Bang employees said that McCurdy's meticulously curated image as a thoughtful progressive in a rough-and-tumble industry wasn't much more than good PR. At Bang Bang, "they just woke-wash everything," one former employee said.McCurdy's shops were rife with old-school issues, ex-employees said — and some new ones, too. Multiple people said it wasn't unusual to hear higher-ups tell inappropriate jokes or share stories about sexual encounters. Several staffers said McCurdy — better known to them as Bang — could be obsessively controlling, monitoring workers through 15 cameras between his two shops, and pressuring them to speak with his "business manager," who also happened to be his former therapist, about their personal problems.Tattoo artists said McCurdy turned cruel and vindictive when they left Bang Bang. One artist who left to start his own shop said McCurdy and a friend shoved him in the street while screaming profanities. In another case, McCurdy went so far as to sue an artist and threaten her immigration status over claims she'd stolen his clients, court documents show. (Many people who spoke with Insider asked to remain anonymous for fear of retaliation from McCurdy.)Rihanna helped launch Keith McCurdy's career, introducing him to her celebrity friends. "He met Rihanna at the street shop, and that was just luck," said East Side Ink's owner, Josh Lord. "And then he rode that as far as he could."Epsilon/Getty ImagesIn a niche industry like tattooing, it's impressive that McCurdy was able to go mainstream. He's name-checked everywhere from GQ to US Weekly. After Rihanna's gun tattoo took off, "I could kind of control what the press would write," he said.But McCurdy's media savvy has camouflaged a different side to the artist and the business he runs, ex-staffers say. If you cross him, "he'll do anything to come for you," the former Bang Bang artist Joice Wang said, adding, "He's actually a monster."For a guy with guns tattooed on each side of his neck (hence the name), McCurdy has a remarkably warm presence. He speaks like a preacher delivering a sermon, ending every story with a moral. He has a red beard and a sturdy frame and likes to wear backward baseball hats and thick-rimmed glasses. He is, by his own admission, "not hip.""I like focusing on me and the tasks I have," he told me at his Grand Street shop in February. "I like answering to the person in the mirror. I like competing with my expectations. It makes me happy."McCurdy worked his way up from a tattoo shop outside a trailer park in tiny-town Delaware to a "super grimy" spot near Washington Square Park when he was 19 to New York City institutions like Last Rites Tattoo Theatre and East Side Ink. Along the way he met Rihanna, who wandered into the shop where he was working in 2007 to get a nipple pierced. McCurdy said the singer asked the piercer, Joe Snake, who the best person for a tattoo was, and Snake walked her over to him. McCurdy gave her a line of Sanskrit on her hip, and the two hit it off.His celebrity roster only grew from there: Swizz Beatz's ex-wife's hairstylist introduced him to Beatz; Beatz introduced him to the soccer star Thierry Henry; Henry introduced him to a whole list of New York Knicks players. And Rihanna hooked him up with her famous friends, including Perry and Delevingne. "He was very intelligent," East Side Ink's owner, Josh Lord, said. "He met Rihanna at the street shop, and that was just luck. And then he rode that as far as he could."McCurdy owns Bang Bang Tattoo and prides himself on doing things "the right way." But former employees say he could be obsessively controlling and vindictive.Susan Watts/NY Daily News via Getty ImagesMeanwhile, McCurdy kept refining his style, cutting his ink with water to give his tattoos a softer, more delicate look. His work appealed to people intimidated by the bold American-traditional designs at some shops. He posted his tattoos on Myspace, Facebook, and eventually Instagram — a novel thing for tattoo artists, who had typically relied on word of mouth. After Delevingne tagged him in a 2013 photo of the lion tattoo he'd done on her index finger, his Instagram following grew to about 200,000."I didn't want to sit in a tattoo shop and goof around and wait for walk-ins," McCurdy said. "I wanted to hustle. I wanted to be proactive." He landed a book deal with HarperCollins for his autobiography, which was published in 2015.The year before his book came out, McCurdy opened Bang Bang on Broome Street. He hired a creative director to design a minimalist space: blank white walls, poured-concrete floors, and flat-screen TVs. McCurdy made it a point not to hang art (tattoo shops are typically covered in flash sheets, or examples of artists' work). "I wanted it to be about the art we're making, not the art that's been made," he said. "The space is a reflection of our brand."Four years later, McCurdy opened another, even more grandiose shop on Grand Street, with a white marble lobby, a 7-foot-long aquarium, and free Fiji water bottles for every client. The renovation, McCurdy estimated, cost close to $1.8 million.Bang Bang's prices matched McCurdy's expensive taste. Even in the early days, some of its artists' rates were double, if not triple, those of most shops in the city, where a custom 4-by-4 inch black-and-gray tattoo ran about $300. Prices went up as McCurdy's A-list clients multiplied: Miley Cyrus, Selena Gomez, LeBron James. Today, a tattoo by McCurdy starts at about $10,000 for a daylong session and can cost $100,000 for a full sleeve.Several tattoo artists said Bang Bang used its celebrity clientele to price-gouge average customers, some of whom didn't know better than to spend hundreds on a simple design. Paul Booth, who owns Last Rites, said that when McCurdy worked for him, he "was more concerned about making a buck than treating his clients right," and that he ultimately fired McCurdy. (McCurdy said he left on good terms and Booth did not fire him.) Lord, the East Side Ink owner, called McCurdy "the Donald Trump of tattoos," saying he's "only interested in his own tacky brand and making money, no matter who else it hurts."McCurdy hired a creative director to design the minimalist aesthetic of his Bang Bang Tattoo shops. "The space is a reflection of our brand," he said.Anna MorgowiczMcCurdy ran his business like a corporation, complete with performance reviews, a mandatory sexual-harassment course, and blood-borne-pathogen training, which included teaching artists how to properly clean their equipment and change out needles. In its 2018 article, the Times wrote that McCurdy "made hiring women a priority and was clear with his staff that tattoo-world misogyny would not be tolerated beneath his roof.""My daughter is 9," he told the outlet. "She has a feminist button on her backpack and she doesn't really know what it means, but I want her to have the sense that she can do anything she wants with her life."Wang, who was hired full time in 2016 and became one of Bang Bang's most in-demand artists, said McCurdy asked her to sign an artist's agreement, which included a noncompete clause and an NDA — both anomalies in the tattoo world. The most recent version of the agreement, which is dated 2023 and which McCurdy shared with Insider, includes a clause stating that artists cannot speak negatively about the company, or McCurdy, even anonymously.Sara Fabel, who worked at Bang Bang as a guest artist for about a week around 2018, said being asked to sign an NDA would be a "huge red flag" because artists should be able to talk about their negative experiences. That McCurdy "has dozens of artists willing to sign shows the power he has in the industry," she said.Being tapped to work at Bang Bang can make an artist's career, turning them into a minor celebrity and bringing in floods of clients. McCurdy picks his staff meticulously, often trawling Instagram for flawless line work or promising beginners.Wang was an inexperienced 22-year-old tattooer in 2015, when McCurdy first reached out to talk about her work. She was thrilled. At the time, Bang Bang was the "pinnacle" of tattooing, Wang said: "It was a group of eight artists. They ruled the industry."Bang Bang staffers spent much of their time together. McCurdy organized Christmas parties, trips to Disney World, and things like paintballing excursions. He even built a designated room in the shop for staffers and clients to smoke weed. "We all became kind of like family," said Johnny Perez, who worked as an artist's assistant from 2014 to 2016. "Everybody really got along. You felt kind of special."But as they settled in, some former employees said, they started to chafe at the way McCurdy ran things. For instance, if a new hire, like Wang, has fewer than 100,000 Instagram followers, they're required to let Bang Bang make them a separate work account — that McCurdy and managers then run. "We create the page, we take their photography, we post for them," McCurdy said, explaining that they "haven't earned" access to Bang Bang's 2.4 million followers.Wang said not being able to run her own work account made her feel muzzled and resulted in fewer dark-skinned clients being showcased on her page, because Bang Bang's managers thought colored ink didn't look as good on deep skin tones. McCurdy said that while he wanted to showcase diversity, "the fact of the matter is that more people with lighter skin get tattooed than people with very dark skin."McCurdy didn't just oversee employees' online presence — he also kept close tabs on them at his shops. Eleven cameras monitor the Grand Street shop, McCurdy said, and four are installed at Broome Street. McCurdy accesses the footage through an app on his phone. "Every zone is filmed," he said, later adding that the cameras were meant to ensure people were staying on task and to protect his business: "No one's going to be able to say we mistreated them."One former artist's assistant who worked the front desk from 2015 to 2016 said there was a camera pointed directly at her computer screen. "If I wasn't working hard enough, or it looked like I wasn't answering email, or if I looked at my phone for a second, he would yell at me through the camera and say, 'Get back to work,'" she said of McCurdy, adding that this happened at least five times.Perez had similar experiences when he was opening the shop. All of a sudden, he would hear McCurdy's voice coming from a camera near the front desk. "It wasn't in a serious way," Perez said, but "it was like, 'Oh, I'm watching you. Just know that I'm watching.'"A third former assistant, who worked at Bang Bang for about six months in 2018, said that "there were cameras on us at all times" and that she had told managers she felt as if she were living in the dystopian novel "1984." At one point she was pulled into a meeting with McCurdy in which he showed her a video clip of her giggling with another employee. She said McCurdy reprimanded her for not staying on task and fired her. "It was just a really bizarre work environment," she said, adding that McCurdy acted as if she had "done something atrocious."After the model Cara Delevingne tagged McCurdy in a photo of a lion he tattooed on her finger, his Instagram following exploded. He credits social media with making him a household name.Jens Kalaene/picture alliance via Getty ImagesMcCurdy was an intense boss, but he looked out for his employees, people said. Gladys Ko, a former Bang Bang artist who goes by the moniker Ghinko, said McCurdy was "very fatherly" and "protective" after she came to work one day with a black eye, immediately taking her aside to talk about it.After that, Ko said, McCurdy would sometimes "pull me into a meeting to check up on me," or "hang out with me for the entire day just to make sure I was OK." She credits McCurdy with being "her rock" during a hard time.McCurdy has spoken openly about his own emotional struggles. He went through an especially difficult time in 2013, when he opened the first Bang Bang shop on the Lower East Side with his now-estranged father, Vincent Lacava. (McCurdy was raised mostly by his mother, Susan McCurdy, and grandparents in Claymont, Delaware; his parents had him as teenagers and separated when he was young.) Lacava, a video game designer, invested $50,000 in the shop, but McCurdy says he was an "abusive" boss who cursed at employees and drank on the job. McCurdy said he offered to buy Lacava out. "His response was: 'Fuck you. I own your name. I'll run it without you,'" McCurdy recalled. The two took their fight to the trademark office, and McCurdy won. His dad shuttered the shop. (Lacava said he and McCurdy "clashed" over the business and eventually parted ways but had "very different views on what happened at the shop.")Despite the win, McCurdy spiraled. He was tattooing out of his Brooklyn apartment, and his marriage was falling apart. That's when his wife introduced him to Karen Bridbord, a psychologist and former in-house coach for JPMorgan Chase. She helped the couple with their marriage and began working with McCurdy separately as his executive coach. "He's a thought leader," Bridbord said. "That's one of the things that drew me to him."McCurdy ended up hiring Bridbord as Bang Bang's de facto head of HR; he refers to her as his "business manager." She's still his executive coach but is no longer his therapist. Bridbord said she's employed as a consultant and wasn't present at the shops every day.Bridbord said that staffers exhibiting a change in behavior, like showing up late or "looking disheveled," would be flagged and sent her way. After talking to them, she would determine the best course of action, whether that be referring them to an outside therapist or recommending they attend rehab.Bridbord said these one-on-one conversations were confidential. However, three people said a camera monitored the back room where they took place. "Bang has access to these cameras, and something that's supposed to be between me and you can easily be seen by him," Perez said. "So there was no real sense of security."McCurdy confirmed that he could access footage of his employees' conversations with Bridbord. He said he'd sometimes "demand" that people speak with Bridbord, adding that her "recommendation has to be followed through if you want to keep your job."Some staffers felt as though McCurdy foisted Bridbord on them. Georgia Grey, a Bang Bang tattoo artist who's worked there for eight years, said she thought it was smart for McCurdy to have Bridbord available, especially for immigrants adjusting to a new place. But when he and managers "sicced" Bridbord on Grey after learning Grey was pregnant, she said, she felt overwhelmed and upset because she hadn't been ready to share the news.During Wang's annual performance review in 2017, she told McCurdy she was struggling with her dad's imprisonment and having to support her family financially. He insisted she talk to Bridbord six separate times. "I don't know if you realize this, but we aren't just your bosses. We're your family," McCurdy told Wang, according to a transcript of the review he read aloud. "I can see you're sad. I want to help you. So let me, please, and let Karen."Wang pushed back, according to the transcript, telling McCurdy that Bridbord was "a stranger.""No she's not, Joice," McCurdy replied. "She's not trying to figure out what drug to put you on. She's trying to figure out how to help."Several staffers said they were uncomfortable speaking with Bridbord because she'd been McCurdy's therapist and still worked closely with him as his executive coach.When staffers did hear lewd jokes or comments about sex at the shops, there was no formal way for them to address it. Four female ex-employees, who worked at Bang Bang from 2015 to 2017, said that while McCurdy was known for his sarcastic sense of humor, he sometimes went overboard.One of these women, a former artist's assistant, said that on several occasions McCurdy taped a printout of a penis to her back without her knowledge, photos of which were obtained by Insider. He'd "be like, 'Good job,' and pat me on the back, and then I would walk around for however long with that on my back," she said, adding that this happened when the shop was full of clients. Another time, she said, McCurdy taped a penis to her headset "so it looked like a dick was pointing into my mouth." The pranks made the assistant feel belittled and humiliated. (McCurdy said that he had no memory of the first incident and that the second would never happen.)Another artist's assistant, who was 19 when she was hired, said McCurdy once commented that her breasts were "distracting" and said she needed to "put a bra on" under her sweater dress. The remark made her feel distraught and "disgusting," she said. "Looking back, I'm like, 'That is so incredibly wrong.'" Another employee said the assistant told them about the incident right after it happened. ("There is no history or evidence to support this accusation," McCurdy said.)McCurdy spoke openly about his sexual encounters, the women recalled. One said he told her about how a woman's breasts were so big that they were "basically bouncing on top of him" during sex. McCurdy said it was "possible" he'd had a conversation about sex in Bang Bang's early days but had no memory of doing so.This kind of behavior extended to other Bang Bang employees. Three women said that Edward Borew, a Bang Bang manager who's McCurdy's cousin, talked publicly about sleeping with sex workers and made sexual comments at work. (Borew said the statement was "false" and all three women were "disgruntled ex-employees.")JonBoy, a former Bang Bang Tattoo artist, was accused of flashing two female employees at the shop.Bryan Steffy/Getty ImagesTwo of the female employees said a Bang Bang tattoo artist known as JonBoy flashed his penis at them while they were working. (McCurdy fired JonBoy in 2016 for doing something he called "egregious and unacceptable" but rehired him about a year later after JonBoy started seeing a therapist, as recommended by Bridbord. JonBoy left the shop permanently in 2018.)One former assistant said that a manager, Matthew Ganser, made her clean up a condom he said he'd used and left on the couch. She said the incident earned Ganser the nickname Magnum Mac. Wang recalled the incident and said Ganser would frequently talk about hooking up with women at the shop. (Both McCurdy and Ganser said the nickname came from a meme, and McCurdy said he has no memory of a condom-cleaning incident, which Ganser called a "fabricated lie." Ganser added that he never spoke about hooking up with women at the shop.)Three of the women said they didn't speak up about the behavior at the time because they were young and because crude humor was a given in the industry — to the point that putting up with it became a rite of passage. "I don't think he fully understands what it means to respect women," Wang said of McCurdy. "I believe he believes he's an advocate for women. But only because he's so misinformed."Inevitably, artists leave the Bang Bang family. But if they don't do it on McCurdy's terms, there can be consequences. "I'm a carer of people," McCurdy said. "I just am authentically. I give a shit until I don't — until someone crosses the line."Two former employees said McCurdy was known to use a burner Instagram account to troll tattooers, which he denies. Some former employees said they were afraid to speak out against McCurdy, saying it wasn't worth risking their finances or mental health.I believe he believes he's an advocate for women. But only because he's so misinformed. Joice WangIn 2017, Wang asked McCurdy for a raise. He turned her down, she said, so she quit. Soon after, she noticed that every photo on her work Instagram account, which had more than 110,000 followers, had been wiped without her knowledge. Bang Bang then gave the account, with Wang's followers intact, to a different artist. (McCurdy confirmed this practice.)For Wang, losing her followers and her entire body of work was like losing her livelihood. "I felt like the floor had fallen beneath me," she said. "There was no way for these people to find me again."Wang said she took to her personal Instagram — which had some 2,000 followers — to vent her frustrations and ask people to report the work account. McCurdy then sent her a text threatening legal action. "I will remind you that we have a legally binding NDA signed by you that forbids you from speaking negatively about my company," reads the text, which Insider viewed.Wang thought it was fair to honor the appointments clients had booked with her at Bang Bang, offering to tattoo them elsewhere. But McCurdy didn't see it that way. He called a shop in Sweden where Wang was planning to work as a guest artist and told them she was a thief and to cancel her booking. (The Swedish shop owner ultimately allowed Wang to tattoo there.)Ganser, the Bang Bang manager, also sent Wang a text comparing her behavior to her father's, who was in prison. "Just like your dad," he wrote. "Look where he's at."Another artist left Bang Bang in 2016 to open his own shop and offered his coworkers a chance to join him. When McCurdy discovered this, he called the artist and told him to watch his back."I threatened to come and smack him in front of all his employees," McCurdy confirmed to Insider.A few months later, the artist was walking to his new shop, which was near Bang Bang, when someone shoved him from behind. When he turned around, the artist said, he saw McCurdy "screaming at me being like, 'Hey, fuck you, you little piece of shit!'" McCurdy confirmed the run-in but said he "never put my hands on him."In 2019, one of Bang Bang's most sought-after artists, the Turkish tattooer Eva Karabudak, left to start her own shop in Brooklyn. A few days later, McCurdy sued Karabudak, calling her "disloyal" and "dishonest" and accusing her of "surreptitiously" stealing his clients, the suit says. He asked for a minimum of almost $154,000 in damages.McCurdy had hired Karabudak in 2017 and paid nearly $30,000 for her visa and health-insurance costs, according to the complaint. In return, McCurdy alleged, Karabudak signed an agreement to work for him for at least three years. In an affidavit dated May 2019, Karabudak said she'd made no such promise and McCurdy had retaliated against her for not signing an artist's agreement that included a noncompete clause. He "got extremely angry, and in an unprofessional manner, raised his voice, used profanity, threatened to terminate my employment and cancel my Visa," the suit says. "Although I felt intimidated and pressured by him, I did not sign." The case was dismissed in February 2020.Even tattoo artists who've never worked with McCurdy have landed in his crosshairs. In March 2019, a prominent New York City tattooer commented on a meme making fun of Bang Bang's extravagant pricing. McCurdy, through Bang Bang's official account, fired back in the comments, calling her a "bitch" and saying she was a bad tattooer with "shit lines." He also DM'd her, writing, "Holler at me when you learn how to tattoo bitch.""I already knew he was very fragile and had a pretty disturbed ego, but that whole situation proved it," the New York City tattooer said. "I felt like he exposed himself in the most wonderful way."Nearly a decade after opening the first Bang Bang shop, McCurdy still sees himself as a trailblazer. Most recently, he launched a formula called Magic Ink that can turn tattoos "on" and "off." He debuted the ink last September in GQ, where he gushed about the marvels of "tech tattoos." The first vial sold as an NFT for roughly $164,000, according to the magazine. McCurdy spent 26 hours tattooing a religious mural on Justin Bieber's chest in 2017. "I didn't want to sit in a tattoo shop and goof around and wait for walk-ins," he said. "I wanted to hustle."Photo by Gotham/GC ImagesMcCurdy is vigilant about maintaining his reputation, as well as that of his business. In a March 20 Instagram post, he addressed complaints that his famous micro tattoos fade and blur too quickly, packing the caption with phrases like "macrophages" and "particle density" and ending it with a cheeky, "thanks for playing." When I met him in February, he came armed with hundreds of pages of documents — "evidence," he called it — all highlighted and color-coded. I gestured at the pile, wondering aloud what made him so quick to be defensive."I don't know, man," he replied. "Heavy is the head that wears the crown, I guess."The truth is, guys like McCurdy are the norm in tattooing. Because mainstream US tattoo culture largely stems from male-dominated fringe groups like bikers, sailors, and gang members, the industry has been slow to evolve, clinging to the crudeness and bravado that defined it in the first place. "A lot of artists feel concerned about tattooing losing a sense of edginess," a well-known New York City artist said. "I see that being responsible for excusing a lot of bad behavior because it gets written off as being authentic or being tough or being true to some imagined original spirit of tattooing."The difference is that McCurdy says all the right things — at least in public. From his perspective, he's a feminist who cares deeply about his employees' mental health. In a January email to Insider, he told me he respected and safeguarded women. He's doing new things — creating structures, setting rules — that are supposed to protect people.After spending close to eight hours with McCurdy myself, it's clear he believes in his mission. "The background of me being screwed by family, which is something no one ever expects to go through, is why everything here is done the right way," he told me. But even as I spoke with him, it felt as if he was talking to an audience. I could hear him crafting the narrative he wanted to see on the page — a narrative that he's been telling himself, and the world, for at least a decade.McCurdy isn't wrong to believe that tattooing as a whole should evolve. Yet in trying to push things in the right direction, he may have created as many problems as he's solved. That, and he's not exactly open to feedback, despite modeling his business after his own funhouse mirror version of corporate America."I know God picked me to do this job, so I do it," he told me. "I know who we are, I know where we're going. I know what we're doing. And there's nothing anybody can say in the world that's going to stop our progress."Read the original article on Business Insider.....»»

The founder of Bang Bang Tattoo, Keith McCurdy, says he's running his shops the "right way." But some ex-employees say working there was a nightmare. Zach Meyer for InsiderKeith McCurdy has inked Justin Bieber on a private jet, Cara Delevingne at the Gansevoort hotel, and Katy Perry while traveling with her on tour. He gave Rihanna the tiny handgun tattoo that some speculated was a message to Chris Brown, her ex whom she'd accused of assault. Vogue has heralded the 37-year-old as "the best in the biz," and The New York Times has described him as having "transformed the body-art industry."McCurdy's signature style — hyperrealistic black-and-gray micro tattoos that require expert precision — has been widely replicated. Clients wait up to two months for an appointment at one of his two New York City shops, where tattoos can cost into the thousands of dollars. At Bang Bang Tattoo, "You're not paying for the tattoo," a former artist's assistant said. "You're paying for the brand."In an industry known for bold ink, edgy imagery, and an anarchist streak, McCurdy has branded himself as someone who does things differently — what he calls the "right way." He offers his staff mental-health support. He's a self-professed "protector of women" who describes his business as a feminist utopia. His shops are bare, modern, and luxurious. In McCurdy's view, he's setting the bar for the industry. "I challenge people out there to do a better job than me," he said. "I'm waiting for who's competing with us. I don't see it."Yet some former Bang Bang employees said that McCurdy's meticulously curated image as a thoughtful progressive in a rough-and-tumble industry wasn't much more than good PR. At Bang Bang, "they just woke-wash everything," one former employee said.McCurdy's shops were rife with old-school issues, ex-employees said — and some new ones, too. Multiple people said it wasn't unusual to hear higher-ups tell inappropriate jokes or share stories about sexual encounters. Several staffers said McCurdy — better known to them as Bang — could be obsessively controlling, monitoring workers through 15 cameras between his two shops, and pressuring them to speak with his "business manager," who also happened to be his former therapist, about their personal problems.Tattoo artists said McCurdy turned cruel and vindictive when they left Bang Bang. One artist who left to start his own shop said McCurdy and a friend shoved him in the street while screaming profanities. In another case, McCurdy went so far as to sue an artist and threaten her immigration status over claims she'd stolen his clients, court documents show. (Many people who spoke with Insider asked to remain anonymous for fear of retaliation from McCurdy.)Rihanna helped launch Keith McCurdy's career, introducing him to her celebrity friends. "He met Rihanna at the street shop, and that was just luck," said East Side Ink's owner, Josh Lord. "And then he rode that as far as he could."Epsilon/Getty ImagesIn a niche industry like tattooing, it's impressive that McCurdy was able to go mainstream. He's name-checked everywhere from GQ to US Weekly. After Rihanna's gun tattoo took off, "I could kind of control what the press would write," he said.But McCurdy's media savvy has camouflaged a different side to the artist and the business he runs, ex-staffers say. If you cross him, "he'll do anything to come for you," the former Bang Bang artist Joice Wang said, adding, "He's actually a monster."For a guy with guns tattooed on each side of his neck (hence the name), McCurdy has a remarkably warm presence. He speaks like a preacher delivering a sermon, ending every story with a moral. He has a red beard and a sturdy frame and likes to wear backward baseball hats and thick-rimmed glasses. He is, by his own admission, "not hip.""I like focusing on me and the tasks I have," he told me at his Grand Street shop in February. "I like answering to the person in the mirror. I like competing with my expectations. It makes me happy."McCurdy worked his way up from a tattoo shop outside a trailer park in tiny-town Delaware to a "super grimy" spot near Washington Square Park when he was 19 to New York City institutions like Last Rites Tattoo Theatre and East Side Ink. Along the way he met Rihanna, who wandered into the shop where he was working in 2007 to get a nipple pierced. McCurdy said the singer asked the piercer, Joe Snake, who the best person for a tattoo was, and Snake walked her over to him. McCurdy gave her a line of Sanskrit on her hip, and the two hit it off.His celebrity roster only grew from there: Swizz Beatz's ex-wife's hairstylist introduced him to Beatz; Beatz introduced him to the soccer star Thierry Henry; Henry introduced him to a whole list of New York Knicks players. And Rihanna hooked him up with her famous friends, including Perry and Delevingne. "He was very intelligent," East Side Ink's owner, Josh Lord, said. "He met Rihanna at the street shop, and that was just luck. And then he rode that as far as he could."McCurdy owns Bang Bang Tattoo and prides himself on doing things "the right way." But former employees say he could be obsessively controlling and vindictive.Susan Watts/NY Daily News via Getty ImagesMeanwhile, McCurdy kept refining his style, cutting his ink with water to give his tattoos a softer, more delicate look. His work appealed to people intimidated by the bold American-traditional designs at some shops. He posted his tattoos on Myspace, Facebook, and eventually Instagram — a novel thing for tattoo artists, who had typically relied on word of mouth. After Delevingne tagged him in a 2013 photo of the lion tattoo he'd done on her index finger, his Instagram following grew to about 200,000."I didn't want to sit in a tattoo shop and goof around and wait for walk-ins," McCurdy said. "I wanted to hustle. I wanted to be proactive." He landed a book deal with HarperCollins for his autobiography, which was published in 2015.The year before his book came out, McCurdy opened Bang Bang on Broome Street. He hired a creative director to design a minimalist space: blank white walls, poured-concrete floors, and flat-screen TVs. McCurdy made it a point not to hang art (tattoo shops are typically covered in flash sheets, or examples of artists' work)."I wanted it to be about the art we're making, not the art that's been made," he said. "The space is a reflection of our brand."Four years later, McCurdy opened another, even more grandiose shop on Grand Street, with a white marble lobby, a 7-foot-long aquarium, and free Fiji water bottles for every client. The renovation, McCurdy estimated, cost close to $1.8 million.Bang Bang's prices matched McCurdy's expensive taste. Even in the early days, some of its artists' rates were double, if not triple, those of most shops in the city, where a custom 4-by-4 inch black-and-gray tattoo ran about $300. Prices went up as McCurdy's A-list clients multiplied: Miley Cyrus, Selena Gomez, LeBron James. Today, a tattoo by McCurdy starts at about $10,000 for a daylong session and can cost $100,000 for a full sleeve.Several tattoo artists said Bang Bang used its celebrity clientele to price-gouge average customers, some of whom didn't know better than to spend hundreds on a simple design. Paul Booth, who owns Last Rites, said that when McCurdy worked for him, he "was more concerned about making a buck than treating his clients right," and that he ultimately fired McCurdy. (McCurdy said he left on good terms and Booth did not fire him.) Lord, the East Side Ink owner, called McCurdy "the Donald Trump of tattoos," saying he's "only interested in his own tacky brand and making money, no matter who else it hurts."McCurdy hired a creative director to design the minimalist aesthetic of his Bang Bang Tattoo shops. "The space is a reflection of our brand," he said.Anna MorgowiczMcCurdy ran his business like a corporation, complete with performance reviews, a mandatory sexual-harassment course, and blood-borne-pathogen training, which included teaching artists how to properly clean their equipment and change out needles. In its 2018 article, the Times wrote that McCurdy "made hiring women a priority and was clear with his staff that tattoo-world misogyny would not be tolerated beneath his roof.""My daughter is 9," he told the outlet. "She has a feminist button on her backpack and she doesn't really know what it means, but I want her to have the sense that she can do anything she wants with her life."Wang, who was hired full time in 2016 and became one of Bang Bang's most in-demand artists, said McCurdy asked her to sign an artist's agreement, which included a noncompete clause and an NDA — both anomalies in the tattoo world. The most recent version of the agreement, which is dated 2023 and which McCurdy shared with Insider, includes a clause stating that artists cannot speak negatively about the company, or McCurdy, even anonymously.Sara Fabel, who worked at Bang Bang as a guest artist for about a week around 2018, said being asked to sign an NDA would be a "huge red flag" because artists should be able to talk about their negative experiences. That McCurdy "has dozens of artists willing to sign shows the power he has in the industry," she said.Being tapped to work at Bang Bang can make an artist's career, turning them into a minor celebrity and bringing in floods of clients. McCurdy picks his staff meticulously, often trawling Instagram for flawless line work or promising beginners.Wang was an inexperienced 22-year-old tattooer in 2015, when McCurdy first reached out to talk about her work. She was thrilled. At the time, Bang Bang was the "pinnacle" of tattooing, Wang said: "It was a group of eight artists. They ruled the industry."Bang Bang staffers spent much of their time together. McCurdy organized Christmas parties, trips to Disney World, and things like paintballing excursions. He even built a designated room in the shop for staffers and clients to smoke weed. "We all became kind of like family," said Johnny Perez, who worked as an artist's assistant from 2014 to 2016. "Everybody really got along. You felt kind of special."But as they settled in, some former employees said, they started to chafe at the way McCurdy ran things. For instance, if a new hire, like Wang, has fewer than 100,000 Instagram followers, they're required to let Bang Bang make them a separate work account — that McCurdy and managers then run. "We create the page, we take their photography, we post for them," McCurdy said, explaining that they "haven't earned" access to Bang Bang's 2.4 million followers.Wang said not being able to run her own work account made her feel muzzled and resulted in fewer dark-skinned clients being showcased on her page, because Bang Bang's managers thought colored ink didn't look as good on deep skin tones. McCurdy said that while he wanted to showcase diversity, "the fact of the matter is that more people with lighter skin get tattooed than people with very dark skin."McCurdy didn't just oversee employees' online presence — he also kept close tabs on them at his shops. Eleven cameras monitor the Grand Street shop, McCurdy said, and four are installed at Broome Street. McCurdy accesses the footage through an app on his phone. "Every zone is filmed," he said, later adding that the cameras were meant to ensure people were staying on task and to protect his business: "No one's going to be able to say we mistreated them."One former artist's assistant who worked the front desk from 2015 to 2016 said there was a camera pointed directly at her computer screen. "If I wasn't working hard enough, or it looked like I wasn't answering email, or if I looked at my phone for a second, he would yell at me through the camera and say, 'Get back to work,'" she said of McCurdy, adding that this happened at least five times.Perez had similar experiences when he was opening the shop. All of a sudden, he would hear McCurdy's voice coming from a camera near the front desk. "It wasn't in a serious way," Perez said, but "it was like, 'Oh, I'm watching you. Just know that I'm watching.'"A third former assistant, who worked at Bang Bang for about six months in 2018, said that "there were cameras on us at all times" and that she had told managers she felt as if she were living in the dystopian novel "1984." At one point she was pulled into a meeting with McCurdy in which he showed her a video clip of her giggling with another employee. She said McCurdy reprimanded her for not staying on task and fired her. "It was just a really bizarre work environment," she said, adding that McCurdy acted as if she had "done something atrocious."After the model Cara Delevingne tagged McCurdy in a photo of a lion he tattooed on her finger, his Instagram following exploded. He credits social media with making him a household name.Jens Kalaene/picture alliance via Getty ImagesMcCurdy was an intense boss, but he looked out for his employees, people said. Gladys Ko, a former Bang Bang artist who goes by the moniker Ghinko, said McCurdy was "very fatherly" and "protective" after she came to work one day with a black eye, immediately taking her aside to talk about it.After that, Ko said, McCurdy would sometimes "pull me into a meeting to check up on me," or "hang out with me for the entire day just to make sure I was OK." She credits McCurdy with being "her rock" during a hard time.McCurdy has spoken openly about his own emotional struggles. He went through an especially difficult time in 2013, when he opened the first Bang Bang shop on the Lower East Side with his now-estranged father, Vincent Lacava. (McCurdy was raised mostly by his mother, Susan McCurdy, and grandparents in Claymont, Delaware; his parents had him as teenagers and separated when he was young.) Lacava, a video game designer, invested $50,000 in the shop, but McCurdy says he was an "abusive" boss who cursed at employees and drank on the job. McCurdy said he offered to buy Lacava out. "His response was: 'Fuck you. I own your name. I'll run it without you,'" McCurdy recalled. The two took their fight to the trademark office, and McCurdy won. His dad shuttered the shop. (Lacava said he and McCurdy "clashed" over the business and eventually parted ways but had "very different views on what happened at the shop.")Despite the win, McCurdy spiraled. He was tattooing out of his Brooklyn apartment, and his marriage was falling apart. That's when his wife introduced him to Karen Bridbord, a psychologist and former in-house coach for JPMorgan Chase. She helped the couple with their marriage and began working with McCurdy separately as his executive coach. "He's a thought leader," Bridbord said. "That's one of the things that drew me to him."McCurdy ended up hiring Bridbord as Bang Bang's de facto head of HR; he refers to her as his "business manager." She's still his executive coach but is no longer his therapist. Bridbord said she's employed as a consultant and wasn't present at the shops every day.Bridbord said that staffers exhibiting a change in behavior, like showing up late or "looking disheveled," would be flagged and sent her way. After talking to them, she would determine the best course of action, whether that be referring them to an outside therapist or recommending they attend rehab.Bridbord said these one-on-one conversations were confidential. However, three people said a camera monitored the back room where they took place. "Bang has access to these cameras, and something that's supposed to be between me and you can easily be seen by him," Perez said. "So there was no real sense of security."McCurdy confirmed that he could access footage of his employees' conversations with Bridbord. He said he'd sometimes "demand" that people speak with Bridbord, adding that her "recommendation has to be followed through if you want to keep your job."Some staffers felt as though McCurdy foisted Bridbord on them. Georgia Grey, a Bang Bang tattoo artist who's worked there for eight years, said she thought it was smart for McCurdy to have Bridbord available, especially for immigrants adjusting to a new place. But when he and managers "sicced" Bridbord on Grey after learning Grey was pregnant, she said, she felt overwhelmed and upset because she hadn't been ready to share the news.During Wang's annual performance review in 2017, she told McCurdy she was struggling with her dad's imprisonment and having to support her family financially. He insisted she talk to Bridbord six separate times. "I don't know if you realize this, but we aren't just your bosses. We're your family," McCurdy told Wang, according to a transcript of the review he read aloud. "I can see you're sad. I want to help you. So let me, please, and let Karen."Wang pushed back, according to the transcript, telling McCurdy that Bridbord was "a stranger.""No she's not, Joice," McCurdy replied. "She's not trying to figure out what drug to put you on. She's trying to figure out how to help."Several staffers said they were uncomfortable speaking with Bridbord because she'd been McCurdy's therapist and still worked closely with him as his executive coach.When staffers did hear lewd jokes or comments about sex at the shops, there was no formal way for them to address it. Four female ex-employees, who worked at Bang Bang from 2015 to 2017, said that while McCurdy was known for his sarcastic sense of humor, he sometimes went overboard.One of these women, a former artist's assistant, said that on several occasions McCurdy taped a printout of a penis to her back without her knowledge, photos of which were obtained by Insider. He'd "be like, 'Good job,' and pat me on the back, and then I would walk around for however long with that on my back," she said, adding that this happened when the shop was full of clients. Another time, she said, McCurdy taped a penis to her headset "so it looked like a dick was pointing into my mouth." The pranks made the assistant feel belittled and humiliated. (McCurdy said that he had no memory of the first incident and that the second would never happen.)Another artist's assistant, who was 19 when she was hired, said McCurdy once commented that her breasts were "distracting" and said she needed to "put a bra on" under her sweater dress. The remark made her feel distraught and "disgusting," she said. "Looking back, I'm like, 'That is so incredibly wrong.'" Another employee said the assistant told them about the incident right after it happened. ("There is no history or evidence to support this accusation," McCurdy said.)McCurdy spoke openly about his sexual encounters, the women recalled. One said he told her about how a woman's breasts were so big that they were "basically bouncing on top of him" during sex. McCurdy said it was "possible" he'd had a conversation about sex in Bang Bang's early days but had no memory of doing so.This kind of behavior extended to other Bang Bang employees. Three women said that Edward Borew, a Bang Bang manager who's McCurdy's cousin, talked publicly about sleeping with sex workers and made sexual comments at work. (Borew said the statement was "false" and all three women were "disgruntled ex-employees.")JonBoy, a former Bang Bang Tattoo artist, was accused of flashing two female employees at the shop.Bryan Steffy/Getty ImagesTwo of the female employees said a Bang Bang tattoo artist known as JonBoy flashed his penis at them while they were working. (McCurdy fired JonBoy in 2016 for doing something he called "egregious and unacceptable" but rehired him about a year later after JonBoy started seeing a therapist, as recommended by Bridbord. JonBoy left the shop permanently in 2018.)One former assistant said that a manager, Matthew Ganser, made her clean up a condom he said he'd used and left on the couch. She said the incident earned Ganser the nickname Magnum Mac. Wang recalled the incident and said Ganser would frequently talk about hooking up with women at the shop. (Both McCurdy and Ganser said the nickname came from a meme, and McCurdy said he has no memory of a condom-cleaning incident, which Ganser called a "fabricated lie." Ganser added that he never spoke about hooking up with women at the shop.)Three of the women said they didn't speak up about the behavior at the time because they were young and because crude humor was a given in the industry — to the point that putting up with it became a rite of passage. "I don't think he fully understands what it means to respect women," Wang said of McCurdy. "I believe he believes he's an advocate for women. But only because he's so misinformed."Inevitably, artists leave the Bang Bang family. But if they don't do it on McCurdy's terms, there can be consequences. "I'm a carer of people," McCurdy said. "I just am authentically. I give a shit until I don't — until someone crosses the line."Two former employees said McCurdy was known to use a burner Instagram account to troll tattooers, which he denies. Some former employees said they were afraid to speak out against McCurdy, saying it wasn't worth risking their finances or mental health.I believe he believes he's an advocate for women. But only because he's so misinformed. Joice WangIn 2017, Wang asked McCurdy for a raise. He turned her down, she said, so she quit. Soon after, she noticed that every photo on her work Instagram account, which had more than 110,000 followers, had been wiped without her knowledge. Bang Bang then gave the account, with Wang's followers intact, to a different artist. (McCurdy confirmed this practice.)For Wang, losing her followers and her entire body of work was like losing her livelihood. "I felt like the floor had fallen beneath me," she said. "There was no way for these people to find me again."Wang said she took to her personal Instagram — which had some 2,000 followers — to vent her frustrations and ask people to report the work account. McCurdy then sent her a text threatening legal action. "I will remind you that we have a legally binding NDA signed by you that forbids you from speaking negatively about my company," reads the text, which Insider viewed.Wang thought it was fair to honor the appointments clients had booked with her at Bang Bang, offering to tattoo them elsewhere. But McCurdy didn't see it that way. He called a shop in Sweden where Wang was planning to work as a guest artist and told them she was a thief and to cancel her booking. (The Swedish shop owner ultimately allowed Wang to tattoo there.)Ganser, the Bang Bang manager, also sent Wang a text comparing her behavior to her father's, who was in prison. "Just like your dad," he wrote. "Look where he's at."Another artist left Bang Bang in 2016 to open his own shop and offered his coworkers a chance to join him. When McCurdy discovered this, he called the artist and told him to watch his back."I threatened to come and smack him in front of all his employees," McCurdy confirmed to Insider.A few months later, the artist was walking to his new shop, which was near Bang Bang, when someone shoved him from behind. When he turned around, the artist said, he saw McCurdy "screaming at me being like, 'Hey, fuck you, you little piece of shit!'" McCurdy confirmed the run-in but said he "never put my hands on him."In 2019, one of Bang Bang's most sought-after artists, the Turkish tattooer Eva Karabudak, left to start her own shop in Brooklyn. A few days later, McCurdy sued Karabudak, calling her "disloyal" and "dishonest" and accusing her of "surreptitiously" stealing his clients, the suit says. He asked for a minimum of almost $154,000 in damages.McCurdy had hired Karabudak in 2017 and paid nearly $30,000 for her visa and health-insurance costs, according to the complaint. In return, McCurdy alleged, Karabudak signed an agreement to work for him for at least three years. In an affidavit dated May 2019, Karabudak said she'd made no such promise and McCurdy had retaliated against her for not signing an artist's agreement that included a noncompete clause. He "got extremely angry, and in an unprofessional manner, raised his voice, used profanity, threatened to terminate my employment and cancel my Visa," the suit says. "Although I felt intimidated and pressured by him, I did not sign." The case was dismissed in February 2020.Even tattoo artists who've never worked with McCurdy have landed in his crosshairs. In March 2019, a prominent New York City tattooer commented on a meme making fun of Bang Bang's extravagant pricing. McCurdy, through Bang Bang's official account, fired back in the comments, calling her a "bitch" and saying she was a bad tattooer with "shit lines." He also DM'd her, writing, "Holler at me when you learn how to tattoo bitch.""I already knew he was very fragile and had a pretty disturbed ego, but that whole situation proved it," the New York City tattooer said. "I felt like he exposed himself in the most wonderful way."Nearly a decade after opening the first Bang Bang shop, McCurdy still sees himself as a trailblazer. Most recently, he launched a formula called Magic Ink that can turn tattoos "on" and "off." He debuted the ink last September in GQ, where he gushed about the marvels of "tech tattoos." The first vial sold as an NFT for roughly $164,000, according to the magazine. McCurdy spent 26 hours tattooing a religious mural on Justin Bieber's chest in 2017. "I didn't want to sit in a tattoo shop and goof around and wait for walk-ins," he said. "I wanted to hustle."Photo by Gotham/GC ImagesMcCurdy is vigilant about maintaining his reputation, as well as that of his business. In a March 20 Instagram post, he addressed complaints that his famous micro tattoos fade and blur too quickly, packing the caption with phrases like "macrophages" and "particle density" and ending it with a cheeky, "thanks for playing." When I met him in February, he came armed with hundreds of pages of documents — "evidence," he called it — all highlighted and color-coded. I gestured at the pile, wondering aloud what made him so quick to be defensive."I don't know, man," he replied. "Heavy is the head that wears the crown, I guess."The truth is, guys like McCurdy are the norm in tattooing. Because mainstream US tattoo culture largely stems from male-dominated fringe groups like bikers, sailors, and gang members, the industry has been slow to evolve, clinging to the crudeness and bravado that defined it in the first place. "A lot of artists feel concerned about tattooing losing a sense of edginess," a well-known New York City artist said. "I see that being responsible for excusing a lot of bad behavior because it gets written off as being authentic or being tough or being true to some imagined original spirit of tattooing."The difference is that McCurdy says all the right things — at least in public. From his perspective, he's a feminist who cares deeply about his employees' mental health. In a January email to Insider, he told me he respected and safeguarded women. He's doing new things — creating structures, setting rules — that are supposed to protect people.After spending close to eight hours with McCurdy myself, it's clear he believes in his mission. "The background of me being screwed by family, which is something no one ever expects to go through, is why everything here is done the right way," he told me. But even as I spoke with him, it felt as if he was talking to an audience. I could hear him crafting the narrative he wanted to see on the page — a narrative that he's been telling himself, and the world, for at least a decade.McCurdy isn't wrong to believe that tattooing as a whole should evolve. Yet in trying to push things in the right direction, he may have created as many problems as he's solved. That, and he's not exactly open to feedback, despite modeling his business after his own funhouse mirror version of corporate America."I know God picked me to do this job, so I do it," he told me. "I know who we are, I know where we're going. I know what we're doing. And there's nothing anybody can say in the world that's going to stop our progress."Read the original article on Business Insider.....»»

The report said GOP Rep. Bryan Slaton, 45, gave alcohol to a 19-year-old intern, had sex with her, and then told her to keep it a secret. Texas State Capitol Dome and FlagsGetty Images A Texas legislative committee recommended a lawmaker be expelled for inappropriate conduct, per the Associated Press. The committee report said GOP Rep. Bryan Slaton, 45, had sex with a 19-year-old intern. The report also said he abused his position of power and engaged in harassment. A committee within the Texas legislature has recommended a lawmaker be expelled for his inappropriate sexual conduct with a teenage intern. The House General Investigative Committee unanimously recommended Republican Rep. Bryan Slaton, 45, be expelled after his sexual contact with a 19-year-old intern came to light, The Associated Press reported. Slaton and his attorney did not immediately respond to Insider's request for comment on Sunday, but his attorneys previously called the claims "outrageous" and "false," the AP reported. An investigation into the lawmaker's conduct began after two 19-year-old legislative aides and one 21-year-old intern filed complaints last month.Slaton's biography in the Texas House said he attended seminary school and served as a youth minister for over a decade. He has a wife and a young child. Slaton has also been among a cohort of Republicans pushing bans on access to gender-affirming healthcare and drag queen story hours for kids."Children don't need to be focused on sex and sexualization," he said in an interview last year, the AP previously reported. "We need to let them just grow up to be children and let them do that as they're getting closer to being an adult." The investigation into Slaton's misconduct found that he gave alcohol to a teenage intern, as well as another young staffer, and then had sex with the intern once she was intoxicated, the AP reported. The intern was "really dizzy" and had "split vision," the committee report found."Slaton's misconduct is grave and serious," the committee's report said, finding that the lawmaker had abused his position of power, given alcohol to a minor, violated employment laws, and engaged in harassment, according to the AP.  The investigation's report also said Slaton showed the young intern a threatening email and told her everything would be fine if they kept their involvement under wraps, the AP reported. Slaton also asked a fellow lawmaker to keep his behavior a secret, the outlet reported. "The fact that Slaton has not expressed regret or remorse for his conduct is also egregious and unwarranted," the committee's report said, per the AP. "It is the Committee's unanimous recommendation that, considering the factors stated above, the only appropriate discipline in this matter is expulsion."Expelling a member requires a two-thirds vote from the 150 House members, and Committee Chairman Andrew Murr said he expects a resolution calling for Slaton's expulsion next week, the AP reported.Read the original article on Business Insider.....»»

Leaked FBI Memos Expose Sexual Misconduct, Drunk Driving, Property Theft And More Internal FBI disciplinary files dating back to 2017 reveal that 'scores' of FBI employees have been busted over the past five years engaging in various illegal and unethical conduct, including sexual misconduct, drunk driving, property theft, assaulting a child losing their service weapons and assaulting a child, Just the News reports. Rampant sexual misconduct included inappropriate affairs with felons in prison, as well as confidential sources and subordinate employees. And while sexual transgressions often resulted in firings, other things such as drunk driving an lost weapons offenses did not. One report from April 2017 listed general examples of past FBI misconduct, including one agent dismissed for admitting to having sexually molested his daughter and granddaughter for years. Another acted "as an agent of a foreign government." One stole drug evidence to feed a heroin addiction, while another employee pulled a gun on a private citizen during an incident of road rage. The female bystander in question was thrown up "against a concrete lane divider, causing temporary loss of consciousness and large contusion."  Other reports detail an employee who shot and killed his neighbor's dog and another who was driving drunk — with a blood alcohol level three times the legal limit — and killed an 18-year-old in the process. Yet not all of these subjects were said to have served prison time, and some even kept their jobs.  -Just the News In another incident, an agent had an unsecured M4 carbine rifle stolen from his government vehicle during a Starbucks run - which resulted in a mere two-week suspension, the whistleblower records provided to JTN show. "Although there was a lockbox in the trunk for storage of weapons and sensitive items," the agent shoved the rifle bag behind the front passenger seat. "While Employee was in the Starbucks, the Bucar was burglarized. The rear passenger, rear driver, and tailgate windows were broken, and the rifle bag containing the M4 was stolen." The reports show there were at least 23 cases of agents and Bureau staff driving under the influence (DUI) but only five resulted in termination, while the others received suspensions or retired. There were several other incidents involving alcohol unrelated to driving that also drew short-term suspensions. At least three dozen agents reported guns being lost, stolen or handled unsafely, including one agent who accidentally discharged his weapon and shot a hole through the floor of his hotel room. -Just the News In another case, a supervisory employee "hit his minor child," and was only busted after the kid's school "noticed bruises and contacted Child Protective Services." After OPR discovered that the child had been "coached to minimize what happened" and the agent took bureau-mandated parenting classes, the employee received just a 40-day suspension for "Assault and Battery." Another employee sent "a threatening and vile email to his girlfriend's ex-husband." When a process server attempted to serve a temporary restraining order (TRO) on him, he threatened to shoot him, then failed to report the incident to his supervisor. He received a 25-day suspension. The misconduct was catalogued in a quarterly email sent to all Bureau employees by the FBI's Office of Professional Responsibility (OPR), which were suspended for a period of seven months in 2021-2022 due to complaints that "employees harmed by misconduct" may feel shamed - however, the bureau resumed publication over the belief that it may dissuade employees from committing crimes or violations in the future. "OPR suspended sending our quarterly email that details employee misconduct and its consequences," read an April 2022 email. "We wanted to weigh the value of publishing this information with the discomfort employees harmed by misconduct may feel at its having been published." An employee "admitted engaging in a romantic relationship with an incarcerated felon and sending him money," according to the report. The employee "failed to report contact with the felon," yet only received a suspension of 15 days. A similar situation from the fallout of a failed "romantic relationship" caused an employee to remove "certain jointly-owned property from the apartment of Employee's former significant other and damaged other property," the email reported. "Although no criminal charges were filed, Employee was arrested for vandalism and theft." Final verdict: 14-day suspension. -JtN One retired agent went on record with JTN, where he suggested that the bureau may be getting more serious about firing employees for certain offenses. He was, however, concerned by the light penalties for things such as alcohol offenses. "I was seeing that in a lot of cases, particularly in the DUIs, there was not many dismissals," retired Assistant Director Kevin Brock told the outlet. "They were getting, you know, 20, 30, 40 days of suspension without pay. And that struck me as something a little bit of a divergence from the past. Louis Freeh, when he was director, drew a bright line. He said anybody who misuses alcohol and gets in a bureau car is going to be dismissed. And that stopped a lot of bad behavior." So it's not a question of 'who's watching the watchers,' rather, why are the bad eggs escaping meaningful punishment for their actions? Oh right, this is the same agency that knowingly used fabricated evidence as part of a scheme to frame Donald Trump as a Russian asset, and then misled Congress. Tyler Durden Fri, 02/24/2023 - 12:03.....»»

Futures Rise Boosted By Solid Tesla Earnings, Chevron's Giant Buyback In a mirror image of Tuesday's action, when MSFT earnings hammered stocks (after first headfaking them higher) only to see the selloff reverse completely during the course of Wednesday trading, on Thursday US equity futures and tech stocks were set to gain after an upbeat earnings report from Tesla reinforced optimism about the health of Corporate America. As of 7:30am, Nasdaq 100 futures were up 0.7% while S&P 500 futures rose 0.3%. Tesla jumped about 8% in premarket trading after the electric-car maker reported better-than-expected profit and said it was on track to deliver about 1.8 million vehicles this year. Risk sentiment was boosted by news that US energy giant Chevron had authorized a massive $75 billion stock buyback, representing 22% of its outstanding shares, helping elevate energy stocks around the globe. Asia stocks jumped to 9-month highs as Hong Kong returned from break and European stocks rose by 0.4%. Meanwhile, the dollar continued to weaken as speculation continued to mount that the Fed is drawing closer to the end of its rate-hiking cycle, and would follow in the footsteps of first Canada and then Indonesia, both of which have officially paused. Bonds and gold edged lower. In premarket trading, all eyes were on Tesla which rose 7.3% after the electric-car maker reported better-than-expected profits and said it was on track to deliver about 1.8 million vehicles this year. Analysts noted that the EV market leader’s output target looks conservative as new factories in Berlin and Austin are set to add more capacity this year. Among peers: Rivian (RIVN US) +3.5%, Lucid (LCID US) +3.4%, Nikola (NKLA US) +1.9%, Nio (NIO US) +4.9%, Xpeng (XPEV US) +5.1%, Li Auto (LI US) +5%. Bank stocks traded higher in premarket trading Thursday, putting them on track to gain for a second straight day. In corporate news, a New York Stock Exchange employee failed to properly shut down a disaster-recovery system, leading to Tuesday’s chaotic opening session. Meanwhile, Cboe Global Markets wants to list more tokens on its crypto exchange, as established firms from traditional finance seek to capitalize on demand for reliable counterparties following the collapse of FTX. Here are some other notable premarket movers: Chevron (CVX US) gains 2.5% after it announced plans to buy back $75 billion of shares and increase dividend payouts after a year of record profits that evoked angry denunciations from politicians around the world as soaring energy prices squeezed consumers. Pfizer (PFE US) drops 1.8% in premarket trading as UBS downgrades the stock to neutral, saying estimates for the pharma giant’s Covid-19 franchise still look too high. IBM (IBM US) shares slip 2% after the tech infrastructure and IT services company’s free cash flow for 4Q fell short of estimates, which Morgan Stanley analysts say was a “significant blemish” in the quarter. That overshadowed IBM’s estimate-beating revenue and profit for the fourth- quarter. BuzzFeed (BZFD US) shares were indicated up about 35% following a Wall Street Journal report that the company reached a content creation deal with Meta. The deal was agreed last year and is worth nearly $10 million, WSJ cites people familiar with the matter as saying. Seagate (STX US) shares rise 7.6% as its quarterly update was better than expected and the computer- hardware firm’s guidance underpins a positive view on the stock, analysts say. Teradyne (TER US) falls 3% after its 1Q earnings forecast missed the average analyst expectation, on lower demand for semiconductors and storage tests. Fourth-quarter earnings beat analysts’ estimates. Las Vegas Sands (LVS US) shares gain 2.1% as analysts raise their price targets on the stock. They said better-than-expected results despite travel restrictions boded well for a recovery. US stocks have kicked off 2023 with a rally that has set the S&P 500 on course for its best January since 2019, as investors bet that the Federal Reserve will slow the pace of rate hikes in time to avert a recession. Deutsche Bank AG strategists said this week they expect further gains in the first quarter as an economic contraction is “running late.” Commenting on yesterday's dramatic market reversal, Goldman trader John Flood writes that "when the market/stocks dont go down on bad news (MSFT guide) typically a bullish signal. I think we learned a lot from this price action today: this mkt is more resilient than most of us are giving it credit for (be very thoughtful/selective with your short positions as squeezes will be common this Q). Worth noting CVX raised the dividend by 6% and authorized a monster $75B buyback...energy complex will outperform on this tomorrow. Reminder buyback blackout period ends post close this Friday." Today all eyes will be on US GDP figures due later today, with economists expecting the data to show a slowdown in growth at the end of the year. Focus has also been on the fourth-quarter earnings season for signs of how companies plan to navigate slowing demand and elevated inflation. Analysts are projecting the first quarterly decline in US profits since 2020, but some market strategists have warned profit margin estimates for 2023 are still too high. “Earnings have not been great but they are not disastrous either,’ said Rupert Thompson, chief economist at asset manager Kingswood Holdings Ltd. “Institutional investors have been short equities so you are seeing some of those positions being covered.”  Thompson sees the January stock surge as overdone, given recession risks ahead, but did not discount further short-term gains because “if you do get a 5% pullback, people who missed the rally may think ‘shall we just bite the bullet now rather than wait for another 5% fall?” "Sentiment remains fixated on the path of inflation, and where the Fed will go with interest-rate policy,” said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown. Today’s economic data will be crucial to see “whether demand is being squeezed out of the economy and whether more storm clouds are gathering on the horizon,” she said. Soft-landing bets for the US economy and expectations the Federal Reserve is nearing the end of its rate-hiking cycle have lifted stock markets and put the dollar on course for its worst monthly performance since last May. On Thursday, it held around flat against its Group-of-10 peers as investors awaited economic growth and jobs data as well as a core price index that could determine the Fed’s policy path. In Europe, the Stoxx 600 was higher by 0.5% with outperformance in the tech sector after Nokia and STMicroelectronics posted better-than-expected numbers. Results from telecoms group Nokia Oyj and chipmaker STMicroelectronics NV were applauded by investors, helping to lift the Stoxx 600 index by half a percent. Here are some of the biggest European movers on Wednesday: Sabadell shares soar as much as 10% after the Spanish lender reported 4Q net profit that beat estimates and gave above- consensus estimates guidance Sartorius AG rises as much as 8.3% after the laboratory equipment firm reassured the market with an update to its financial targets; its subsidiary Sartorius Stedim Biotech rises, too STMicro jumps as much 9.3% after the chipmaker projected first-quarter and full-year sales ahead of consensus estimates, defying a slowdown in the broader semiconductor industry Nokia shares gain as much as 7.2%, the biggest intraday climb since July, after the telecom equipment maker outlined full-year outlook that met expectations Diageo falls as much as 7.4%, weighing on peers in the alcohol and beverages sector, after the Johnnie Walker maker’s results disappointed in North America and delivered an uncertain outlook Volvo shares slide as much as 4.9% in early trading after the Swedish truck producer reported 4Q22 earnings that came in below consensus SEB falls as much as 4.8%, the most since October, after the Swedish lender reported 4Q figures that beat expectations but were of a low quality, according to Citi Novartis falls as much as 2.4% on being cut to neutral from buy at Citi on a more cautious outlook for the Swiss pharma group’s cholesterol drug Leqvio and prostate cancer drug Pluvicto SAP shares fall as much as 4.1% after it’s free cash flow outlook for 2023 missed estimates, even though the firm still projected at least a double-digit growth for operating profits Earlier in the session, stocks in Asia Pacific rose for a fifth straight day as investors in Hong Kong returned from Lunar New Year holidays that delivered a boost to consumption. The MSCI Asia Pacific Index climbed as much as 0.8% to the highest since April 22. Hong Kong-listed stocks rallied as data on spending and tourism during the three-day break signaled a recovery in demand is gaining traction in China. The Hang Seng Index closed at its highest since March. “Stocks in Hong Kong would probably remain on the stronger side,” Chetan Seth, an Asia Pacific equity strategist at Nomura, told Bloomberg Television. “What we might see in the months ahead is improvement in activity indicators.”  Benchmarks in South Korea, Indonesia and Singapore also rose as traders assessed the global economy’s prospects. China’s reopening has triggered a rebound across Asia, with investors now looking beyond Covid infection figures to evaluate how a recovery in the region’s largest economy will impact earnings. The MSCI Asia gauge is outperforming the S&P 500 by more than four percentage points so far in 2023 Japanese stocks fell, while markets in Australia, China, India, Taiwan and Vietnam were closed. Japanese stocks closed slightly lower, erasing early gains and halting a four-day winning streak, as investors assessed prospects for corporate earnings and the global economy. The Topix fell 0.1% to close at 1,978.40, while the Nikkei declined 0.1% to 27,362.75. Sony contributed the most to the Topix decline, decreasing 1.3%. Out of 2,161 stocks in the index, 893 rose and 1,116 fell, while 152 were unchanged. “There is a continued wait-and-see mood as there are two important indicators, the FOMC meeting and ISM employment reports coming up next week,” said Shogo Maekawa a global market strategist at JP Morgan Asset Management In FX, the Bloomberg Dollar Index swung between moderate gains and losses. The Norwegian krone and Australian dollar led gains, while Sweden’s krona lagged.  The euro retreated after six days of gains versus the greenback, though it is likely to enjoy continued monetary policy support, as several European Central Bank rate-setters spoke in favor of further hefty policy-tightening over coming months.  Traders are likely to parse reports on US economic growth, initial jobless claims and a core price index due Thursday to gauge if the Fed will opt for a smaller rate hike on Feb. 1. Recent commentary from some central bank officials has backed the case for a quarter point increase In rates, treasuries were lower after following gilts and, to a lesser extent, bunds during European morning. US yields cheaper by up to 4bp across long-end of the curve which leads losses on the day; 10-year yields back up to around 3.48% with gilts underperforming by additional 2bp in the sector and bunds trading broadly in line. UK and German 10-year yields rise by 4bps and 2bps respectively. A raft of US economic data is set to be released, and auction cycle concludes with 7-year notes following strong demand for 5- and 2-year sales. $35b 7-year notes at 1pm New York time is final coupon auction of the November-to-February financing quarter; all previous coupon auctions during January have stopped through. The WI 7-year around 3.525% is ~40bp richer than January’s stop-out and below auction stops since August. Saira Malik, chief investment officer of Nuveen, said earnings risk in a consumer-led slowdown will act as a headwind to equities, with a shift into bonds underscoring the fragile sentiment. “You can start to increase your duration in fixed-income and get strong total returns in it without a lot of these heavy macro risks that are going to hit equities,” Malik said in an interview with Bloomberg TV. “Equities considering their valuation are less attractive.” Elsewhere, oil prices rose for a second day, lifted by expectations of demand recovery in China. Crude future advance with WTI gaining 0.9% to trade near $80.90. Spot gold falls roughly 0.5% to trade near $1,937/oz. Bitcoin fell more than 2%, reversing much of Wednesday’s gain. Looking to the busy day ahead now, data releases from the US include the advance estimate of Q4 GDP, preliminary durable goods orders for December, new home sales for December and the weekly initial jobless claims. Otherwise, earnings releases include Visa, Mastercard, Intel, American Airlines and Comcast. Market Snapshot S&P 500 futures up 0.2% to 4,038.75 MXAP up 0.6% to 170.22 MXAPJ up 1.1% to 558.68 Nikkei down 0.1% to 27,362.75 Topix down 0.1% to 1,978.40 Hang Seng Index up 2.4% to 22,566.78 Shanghai Composite up 0.8% to 3,264.81 Sensex down 1.3% to 60,205.06 Australia S&P/ASX 200 down 0.3% to 7,468.30 Kospi up 1.7% to 2,468.65 STOXX Europe 600 up 0.5% to 454.33 German 10Y yield little changed at 2.19% Euro down 0.1% to $1.0900 Brent Futures up 0.4% to $86.50/bbl Gold spot down 0.5% to $1,937.17 U.S. Dollar Index up 0.17% to 101.81 Top Overnight Stories BOJ members were divided over whether the 2% inflation goal could be sustainably achieved and felt the extreme level of accommodation should be sustained. Also, The IMF suggested that the BOJ could allow more flexibility in 10-year bond yields, a move that would involve policy changes for the central bank. RTRS / Nikkei China’s most scenic destinations have been inundated during the Spring Festival holiday, as Beijing’s shift away from Covid Zero spurred a travel frenzy despite the country’s ongoing omicron outbreak. BBG Bank of Indonesia has delivered enough interest-rate increases, according to Governor Perry Warjiyo, who signaled that this round of tightening is coming to an end as the Federal Reserve also winds down. This is the second central bank in as many days (after the Bank of Canada yesterday) to signal an end to rate hikes. BBG Pakistan’s economy is at risk of collapse, with rolling blackouts and a severe foreign currency shortage leaving businesses struggling to operate as authorities attempt to revive an IMF bailout to relieve the deepening crisis. FT Adani Group may take legal action against Hindenburg Research after the US short seller alleged "brazen" market manipulation and accounting fraud. Shares of Adani-related entities slumped yesterday, shaving $12 billion off the empire of Asia's richest man, and a raft of its companies' dollar bonds fell further today. BBG Eurozone officials start talks on creating a huge multibillion-euro fund to compete w/the US green energy subsidies. London Times The NYSE mayhem earlier this week was due to simple human error, people familiar said — an exchange employee didn't correctly shut down a backup system running overnight so heading into Tuesday, the NYSE's computers treated the 9:30 a.m. bell as a continuation of trading, skipping the opening auctions. No word yet on the cost of the chaos. BBG Donald Trump's back. Meta will reinstate the former president's social media accounts "in the coming weeks" following a two-year suspension. He had 34 million followers on Facebook and 23 million on Instagram back in 2021 but, more important, his re-election campaign will now be able to buy ads to raise money via direct appeals or by capturing users' contact info to solicit them directly. BBG Tesla jumped as much as 8% premarket after profit beat, though there were mixed signals on the outlook. Elon Musk said production may top 1.8 million vehicles this year. BBG A more detailed look at global markets courtesy of Newsquawk APAC stocks traded somewhat mixed amid key holiday closures and after the flat handover from Wall St where the major indices recouped most of their initial losses after the BoC’s dovish hike. Nikkei 225 was subdued amid a firmer currency and upside in yields, while the government also lowered its overall economic assessment for the first time in 11 months. KOSPI gained despite the weaker-than-expected GDP data although the finance minister flagged the likelihood of a return to growth for the current quarter. Hang Seng outperformed as participants in Hong Kong returned from the Lunar New Year holiday and were greeted by strength in tech, property and autos, although trade across the rest of the region remained relatively quiet owing to the closures in Australia, China, Taiwan, India and Vietnam. Top Asian News BoJ Summary of Opinions from the January meeting stated it is appropriate to maintain current monetary easing including YCC and that the BoJ must keep yields from rising across the curve while being mindful of the bond market function. Furthermore, they must spend more time to gauge the impact of the December decision and must conduct a review of policy at some point although it is appropriate to maintain easy policy for now, while they still see some distance in achieving the price goal and noted it will take some time to achieve sustained wage growth. IMF (policy proposal on Japan) says the BoJ should allow bond yields to move in a more flexible manner; If significant upside inflation risks materialise, BoJ needs to be ready to withdraw stimulus strong, e.g. by increasing interest rates; possible options for the BoJ include widening the yield bank, increasing the yield target, targeting shorter yields and shifting to a quantity target; BoJ policy is appropriate as inflation is likely to ease but risks are becoming more pronounced; FX intervention should be limited to special circumstances such as disorderly market conditions. Japan is to downgraded its COVID classification on May 8th, via NHK. European bourses are firmer across the board, Euro Stoxx 50 +0.6%, with a busy morning for earnings dictating the state of play before Stoxx 600 heavyweight LVMH's (MC FP) earnings, due after-market on Thursday. Stateside, futures are firmer across the board, ES Mar'23 +0.2% and comfortably above the 4k mark and as such the 10- and 200-DMAs which reside on either side of the figure. NDX +0.6% is the incremental outperformer after a well received update from Tesla (TSLA) +7% pre-market while IBM (IBM) slips -1.6% after its Q4 report. Top European News US and EU are reportedly discussing a potential deal regarding critical raw materials and minerals, to enable the EU to benefit from the US' Inflation Reduction Act/green investment plan, via Bloomberg citing sources. UK 2022 car production fell 9.8% Y/Y to 775k units, while car and light van production for 2023 is expected to increase 15% Y/Y to 984k units, according to SMMT. UK ONS says consumer behaviour indicators were broadly similar to the prior week. Irish Finance Minister McGrath says Brexit talks have reached a new level. Italian Economy Minister says before April they intend to extend relief measures to assist families and firms with energy costs, could alter regulations on capital gains tax. Denmark Calls for Mandatory Military Service for Women Europe Gas Prices Rebound After Slump With Asia Demand in Focus Diageo Drops as Sales Growth Slows in Crucial US Market Saipem Top Oil Services Pick at JPMorgan, Subsea 7 Cut FX DXY slips to a minor new 101.500 y-t-d low, but holds in and pares some losses pre-US data raft. Aussie and Kiwi remain underpinned on inflation grounds, but AUD/USD heavy on 0.7100 handle and NZD/USD clipped around 0.6500. Yen recoils between 129.00-130.00 range vs Buck as Japan's top currency diplomat warns that sharp moves will not be tolerated, CNH bid as HK markets return from holiday with COVID reopening optimism. Euro and Pound wobble above 1.0900 and 1.2400 vs Dollar and ahead of technical resistance. Morgan Stanley's month-end USD rebalancing model: expects the USD to underperform in January, with weakness expected vs all G10 currencies ex-NOK. CBRT announced support for the conversion of firms' foreign exchange obtained from abroad into Turkish liras to support 'liraization' in commercial activities, with firms to be provided with FX conversion support corresponding to 2% of the amount converted. Fixed Income Core benchmarks have continued to ease from best levels with the IMF's BoJ/Japan policy proposal adding to the pressure. Bunds holding just above 138.00 within 138.62-137.91 parameters while Gilts are just below 105.00 towards the mid-point of a 105.66-104.72 range. USTs are similarly contained around the 115.00 handle as participants await US data and a subsequent 7yr auction. Commodities WTI and Brent March futures remain underpinned by the China-demand narrative, though are relatively rangebound overall and spent much of the morning trading with no firm direction with focus on geopols and French strike action. US and European gas futures are experiencing a modest divergence, with ING suggesting the US Nat Gas pressure is due to milder weather. TotalEnergies (TTE FP) says pension reforms strike action is interrupting shipments at French production sites, except for the Feyzin refinery (119k BPD). Continue to ensure petrol stations are supplied, no shortage. 24-hours strike declared at the 140k BPD Fos-Sur-Mer oil refinery in France, according to BFM TV citing an Esso Union official. German energy regulator says there is not enough gas saving in the third calendar week; household, business and industry consumption down 9%in total in that week (vs 20% target). Spot gold has been dipping from best levels amid seemingly yield-driven USD upside while LME copper is relatively resilient but has slipped from best levels. Geopolitics Russian Kremlin says it sees the sending of Western tanks to Ukraine as direct and growing involvement in the conflict. Russian Security Council's Secretary Patrushev says the US and NATO are participating in the Ukrainian conflict and want to prolong it. US Event Calendar 08:30: 4Q GDP Annualized QoQ, est. 2.6%, prior 3.2% 4Q GDP Price Index, est. 3.2%, prior 4.4% 4Q PCE Core QoQ, est. 3.9%, prior 4.7% 4Q Personal Consumption, est. 2.8%, prior 2.3% 08:30: Dec. Durable Goods Orders, est. 2.5%, prior -2.1% Dec. -Less Transportation, est. -0.2%, prior 0.1% Dec. Cap Goods Orders Nondef Ex Air, est. -0.2%, prior 0.1% Dec. Cap Goods Ship Nondef Ex Air, est. -0.4%, prior -0.1% 08:30: Jan. Initial Jobless Claims, est. 205,000, prior 190,000 Continuing Claims, est. 1.66m, prior 1.65m 08:30: Dec. Advance Goods Trade Balance, est. -$88.1b, prior -$83.3b, revised -$82.9b 08:30: Dec. Retail Inventories MoM, est. 0.2%, prior 0.1% Wholesale Inventories MoM, est. 0.5%, prior 1.0% 08:30: Dec. Chicago Fed Nat Activity Index 10:00: Dec. New Home Sales MoM, est. -4.4%, prior 5.8% New Home Sales, est. 612,000, prior 640,000 11:00: Jan. Kansas City Fed Manf. Activity, est. -8, prior -9 DB's Jim Reid concludes the overnight wrap Morning from Milan. Yet another first time since the pandemic started trip. Always nice to be back. I’d almost forgotten how good the food is here! It was a fairly positive macro dinner with clients generally constructive. It was unique to be in Italy and see no-one really too concerned about Italy credit quality which is testimony to the various EU/ECB packages both pre and post the pandemic and also impressive given how far the ECB has come on rates and how far it still has to go. With markets overall on the calm side too at the moment we're getting our mini vol from entering earnings crossfire season where a big name’s quarterly report can pick you off. Indeed, sentiment yesterday was heavily influenced at first by Microsoft’s disappointing cloud sales outlook from after the bell on Tuesday night. The company’s shares were down around -4.5% soon after the open, before sentiment steadily improved as the day progressed. By the end of the day, it had clawed its way back up to have only lost -0.59%. More broadly, the Nasdaq and S&P 500 hit intraday lows of -2.34% and -1.69%, respectively, before closing at -0.18% and -0.02%. So a decent recovery. After the close, we then heard from Tesla and IBM. Tesla reported adjusted earnings of $1.19 EPS ($1.12 EPS expected) as it sought to boost output quickly to achieve its previous guidance of 1.8mn vehicles delivered this year. In after-market trading it then advanced +5.5%, especially after Elon Musk said that he expected demand would remain strong despite an expected contraction and that there was a new “next-generation” vehicle that would be announced in March. IBM (-2.0% after-market) also beat earning expectations at $3.60 EPS (consensus was $3.58), and increased its sales forecast whilst announcing they would be cutting headcount by 1.5%. Against this backdrop, US equity futures are looking more positive this morning, with those on the S&P 500 (+0.12%) and the NASDAQ 100 (+0.35%) both higher. With the S&P 500 finishing the day largely unchanged, 12 of 24 industry groups were in positive territory for the day. Telecoms (+2.50%), banks (+1.17%), insurance (+0.78%), and food & beverage (+0.73%) outperformed, whereas transports (-1.43%) and utilities (-1.36%) were the biggest laggards. Europe closed before the last of the rally in the US, with the STOXX 600 finishing down -0.29%. The STOXX Technology index was similarly down -1.66% at the lows before staging a late recovery itself that only left it down -0.13%. Much like US equities, US bonds saw a decent range and by the close yields on 10yr Treasuries were down -1.1bps on the day to 3.44% (range 3.42-3.49%). By contrast in Europe, yields on 10yr bunds (+0.3bps), OATs (+1.1bps) and BTPs (+3.3bps) all moved higher to varying degrees. That followed fresh comments from ECB speakers, with Slovenia’s Vasle saying that rates should go up by 50bps at the next two meetings. Ireland’s Makhlouf also endorsed continuing with 50bps into March, saying that “We need to continue to increase rates at our meeting next week – by taking a similar step to our December decisions – and also at our March meeting.” Ahead of the Fed and ECB decisions next week, we did get a decision yesterday from the Bank of Canada. They hiked by 25bps as expected, but said in their statement that they expect “to hold the policy rate at its current level while it assesses the impact of the cumulative interest rate increases.” Governor Macklem did make clear in his press conference statement that this was “a conditional pause”, and said they were willing to do more if needed to get inflation back to target. However, it’s still an important milestone after a series of 8 hikes at consecutive meetings, particularly given speculation about when the Fed might reach a similar point in their own hiking cycle. Speaking of the Fed, they’re currently in their blackout period, but the Washington Post reported yesterday that Vice Chair Brainard was a top contender to become the next head of the National Economic Council at the White House. If that happened, that would open up a space on the board as well as the Vice Chair position, although as it stands Brainard’s position as both a Governor and Vice Chair currently last until H1 2026. Nevertheless, there is a precedent for such a move from the Fed to the White House, such as when former Chair Bernanke went from being a Fed Governor to Chair of the Council of Economic Advisers in 2005, before going back to the Fed as Chair the following year. Similarly, Janet Yellen made the same move from Fed Governor to CEA Chair in 1997. Staying with the White House, the Biden administration announced that the US would be sending 31 M1 Abrams tanks to Ukraine, adding on to those confirmed by Germany. Delivery of the US tanks could take months but training would begin soon. The German tanks are expected to be sent to Ukraine within three months. Overnight in Asia, equities have posted advances for the most part, with the Hang Seng up +1.89% as it resumed trading following a holiday. That leaves the index on track for its highest closing level since April last year, and brings its gains since the end of October to +53% now. In the meantime, the KOSPI was also up +1.44%, but the Nikkei is down -0.20% this morning amidst a further strengthening in the Japanese Yen, which stands at 129.36 per US Dollar this morning. Looking at yesterday’s other data, the Ifo business climate indicator from Germany rose to a 7-month high of 90.2 in January (vs. 90.3 expected). And the expectations component rose to an 8-month high of 83.2 (vs. 82.0 expected). To the day ahead now, and data releases from the US include the advance estimate of Q4 GDP, preliminary durable goods orders for December, new home sales for December and the weekly initial jobless claims. Otherwise, earnings releases include Visa, Mastercard, Intel, American Airlines and Comcast. Tyler Durden Thu, 01/26/2023 - 08:06.....»»

One of the organizers said he hopes it "opens people's eyes and conveys the brutality and suffering of the victims." A destroyed Russian T-90M Proryv main battle tank in Ukraine's Kharkiv region, May 9, 2022. Lenze and Giebel have not yet selected a wreck for display.REUTERS/Vitalii Hnidyi A German group can put a wrecked Russian tank outside the Russian embassy in Berlin, a court said.  Local officials had objected to the plan, but were overruled by a higher court on Tuesday.  Project organizer Enno Lenze said he would pick up a tank himself from Ukraine for the display.  A German group won the right to place the wreck of a Russian tank in front of the country's embassy in Berlin to convey the "brutality" of the war in Ukraine.Local authorities had initially resisted the proposal from Enno Lenze and Wieland Giebel, who both run a museum in Berlin, citing public safety and its appropriateness, according to a court press release. But Mitte officials were ordered by Berlin's administrative court on Tuesday to allow the proposal, first made in June, to go ahead. Putting the tank there temporarily "falls under the constitutionally protected freedom of expression," the court said. The embassy is on the Unter Den Linden boulevard in Berlin's Mitte, a key tourism and administrative district. Lenze, whose biography lists him as an "entrepreneur, consultant, museum director" says he has been in Ukraine since March, working as a war reporter.He said on Twitter that there "I saw all these shot down tanks and this destroyed stuff."—Enno Lenze (@ennolenze) October 11, 2022 He added that he was inspired by similar displays in Prague, Warsaw and Kyiv. "But the city of Berlin said no, and they had hilarious reasons," he continued, outlining what he said were the objections officials raised, including traffic concerns and the potential impact on a nearby kebab stall.Mitte district was also initially concerned because "people probably died" in the wreck, making it inappropriate for display, the court release said. The road just outside the embassy likely can't support the weight of a massive tank, the court release said, so the which suggested a nearby crossroads for the display.However, the paperwork involved in transporting and organizing the installation means the tank won't arrive soon, Lenze said in his video. The Russian Embassy in Berlin on September 3, 2022.Christoph Soeder/picture alliance via Getty ImagesThe embassy did not respond to Insider's request for comment, and Lenze told Insider that no representative has said anything. In an interview with German magazine Demos Mag, Lenze said the embassy isn't his main intended audience, but passers-by, whose empathy he hopes to awaken. "In general, I hope that it opens people's eyes and conveys the brutality and suffering of the victims without showing 'shock pictures' directly," he said.  Lenze told Insider that he doesn't have a tank yet, but plans to pick one up from Ukraine using a flatbed truck and paying associated costs themselves."Our government doesn't want to send tanks to Ukraine, but it also doesn't want me to import one as well, so it's a bit stupid," he said in his video message. Germany's Chancellor, Olaf Scholz, has come under internal criticism over his government's hesitance to send armed vehicles to Ukraine, as Defense News reported.On Monday, following intense Russian bombardment of Ukrainian cities and energy infrastructure, Germany announced it would send air defense systems, as Reuters reported. Read the original article on Business Insider.....»»

Recession, Prices, & The Final Crack-Up Boom Authored by Alasdair Macleod via GoldMoney.com, Initiated by monetarists, the debate between an outlook for inflation versus recession intensifies. We appear to be moving on from the stagflation story into outright fears of the consequences of monetary tightening and of interest rate overkill. In common with statisticians in other jurisdictions, Britain’s Office for Budget Responsibility is still effectively saying that inflation of prices is transient, though the prospect of a return towards the 2% target has been deferred until 2024. Chancellor Sunak blithely accepts these figures to justify a one-off hit on oil producers, when, surely, with his financial expertise he must know the situation is likely to be very different from the OBR’s forecasts. This article clarifies why an entirely different outcome is virtually certain. To explain why, the reasonings of monetarists and neo-Keynesians are discussed and the errors in their understanding of the causes of inflation is exposed. Finally, we can see in plainer sight the evolving risk leading towards a systemic fiat currency crisis encompassing banks, central banks, and fiat currencies themselves. It involves understanding that inflation is not rising prices but a diminishing purchasing power for currency and bank deposits, and that the changes in the quantity of currency and credit discussed by monetarists are not the most important issue. In a world awash with currency and bank deposits the real concern is the increasing desire of economic actors to reduce these balances in favour of an increase in their ownership of physical assets and goods. As the crisis unfolds, we can expect increasing numbers of the public to attempt to reduce their cash and bank deposits with catastrophic consequences for their currencies’ purchasing power. That being so, we appear to be on a fast track towards a final crack-up boom whereby the public attempts to reduce their holdings of currency and bank deposits, evidenced by selected non-financial asset and basic consumer items prices beginning to rise rapidly. Introduction In the mainstream investment media, the narrative for the economic outlook is evolving. From inflation, by which is commonly meant rising prices, the MSIM say we now face the prospect of recession. While dramatic, current inflation rates are seen to be a temporary phenomenon driven by factors such as Russian sanctions, Chinese covid lockdowns, component shortages and staffing problems. Therefore, it is said, inflation remains transient — it’s just that it will take a little longer than originally thought by Jay Powell to return to the 2% target. We were reminded of this in Britain last week when Chancellor Sunak delivered his “temporary targeted energy profits levy”, which by any other name was an emergency budget. Note the word “temporary”. This was justified by the figures from the supposedly independent Office for Budget Responsibility. The OBR still forecasts a return to 2% price inflation but deferred until early 2024 after a temporary peak of 9%. Therefore, the OBR deems it is still transient. Incidentally, the OBR’s forecasting record has been deemed by independent observers as “really terrible”. Absolved himself of any responsibility for the OBR’s inflation estimates, Sunak is spending £15bn on subsidies for households’ fuel costs, claiming to recover it from oil producers on the argument that they are enjoying an unexpected windfall, courtesy of Vladimir Putin, to be used to finance a one-off temporary situation. That being the case, don’t hold your breath waiting for Shell and BP to submit a bill to Sunak for having to write off their extensive Russian investments and distribution businesses because of UK government sanctions against Russia. But we digress from our topic, which is about the future course of prices, more specifically the unmeasurable general price level in the context of economic prospects. And what if the OBR’s figures, which are like those of all other statist statisticians in other jurisdictions, turn out to be hideously wrong? There is no doubt that they and the MSIM are clutching at a straw labelled “hope”. Hope that a recession will lead to lower consumer demand taking the heat out of higher prices. Hope that Putin’s war will end rapidly in his defeat. Hope that Western sanctions will collapse the Russian economy. Hope that supply chains will be rapidly restored to normal. But even if all these expectations turn out to be true, old-school economic analysis unbiased by statist interests suggests that interest rates will still have to go significantly higher, bankrupting businesses, governments, and even central banks overloaded with their QE-derived portfolios. The establishment, the mainstream media and government agencies are deluding themselves over prospects for prices. Modern macroeconomics in the form of both monetarism and Keynesianism is not equipped to understand the economic relationships that determine the future purchasing power of fiat currencies. Taking our cue from the stagflationary seventies, when Keynesianism was discredited, and Milton Friedman of the Chicago monetary school came to prominence, we must critically examine both creeds. In this article we look at what the monetarists are saying, then the neo-Keynesian mainstream approach, and finally the true position and the outcome it is likely to lead to. Since monetarists are now warning that a slowdown in credit creation is tilting dangers away from inflation towards recession, we shall consider the errors in the monetarist approach first. Monetary theory has not yet adapted itself for pure fiat Monetarist economists are now telling us that the growth of money supply is slowing, pointing to a recession. But that is only true if all the hoped-for changes in prices comes from the side of goods and services and not that of the currency. No modern monetarist appears to take that into account in his or her analysis of price prospects, bundling up this crucial issue in velocity of circulation. This is why they often preface their analysis by assuming there is no change in velocity of circulation. While they have turned their backs on sound money, which can only be metallic gold or silver and their credible substitutes, their analysis of the relationship between currency and prices has not been adequately revised to account for changes in the purchasing power of pure fiat currencies. It is vitally important to understand why it matters. A proper gold coin exchange standard turns a currency into a gold substitute, which the public is almost always content to hold through cycles of bank credit. While there are always factors that alter the purchasing power of gold and its relationship with its credible substitutes, the purchasing power of a properly backed currency and associated media in the form of notes and bank deposits varies relatively little compared with our experience today, particularly if free markets permit arbitrage between different currencies acting as alternative gold substitutes. This is demonstrated in Figure 1 below of the oil price measured firstly in gold-grammes and currencies under the Bretton Woods agreement until 1971, and then gold-grammes and pure fiat currencies subsequently. The price stability, while economic actors accepted that the dollar was tied to gold and therefore a credible substitute along with the currencies fixed against it, was evident before the Bretton Woods agreement was suspended. Yet the quantity of currency and deposits in dollars and sterling expanded significantly during this period, more so for sterling which suffered a devaluation against the dollar in 1967. The figures for the euro before its creation in 2000 are for the Deutsche mark, which by following sounder money policies while it existed explains why the oil price in euros is recorded as not having risen as much as in sterling and the dollar. The message from oil’s price history is that volatility is in fiat currencies and not oil. In gold-grammes there has been remarkably little price variation. Therefore, the pricing relationship between a sound currency backed by gold differs substantially from the fiat world we live with today, and there has been very little change in monetarist theory to reflect this fact beyond mere technicalities. The lesson learned is that under a gold standard, an expansion of the currency and bank deposits is tolerated to a greater extent than under a pure fiat regime. But an expansion of the media of exchange can only be tolerated within limits, which is why first the London gold pool failed in the late 1960s and then the Bretton Woods system was abandoned in 1971. Under a gold standard, an expansion of the quantity of bank credit will be reflected in a currency’s purchasing power as the new media is absorbed into general circulation. But if note-issuing banks stand by their promise to offer coin conversion to allcomers that will be the extent of it and economic actors know it. This is the basis behind classical monetarism, which relates with Cantillon’s insight about how new money enters circulation, driving up prices in its wake. From John Stuart Mill to Irving Fisher, it has been mathematically expressed and refined into the equation of exchange. In his earlier writings, even Keynes understood monetarist theory, giving an adequate description of it in his Tract on Monetary Reform, written in 1923 when Germany’s papiermark was collapsing. But even under the gold standard, the monetarist school failed to incorporate the reality of the human factor in their equation of exchange, which has since become a glaring omission with respect to fiat currency regimes. Buyers and sellers of goods and services do not concern themselves with the general price level and velocity of circulation; they are only concerned with their immediate and foreseeable needs. And they are certainly unaware of changes in the quantity of currency and credit and the total value of past transactions in the economy. Consumers and businesses pay no attention to these elements of the fundamental monetarist equation. In essence, this is the disconnection between monetarism and catallactic reality. Instead, the equation of exchange is made to always balance by the spurious concept of velocity of circulation, a mental image of money engendering its own utility rather than being simply a medium of exchange between buyers and sellers of goods and services. And mathematicians who otherwise insist on the discipline of balance in their equations are seemingly prepared in the field of monetary analysis to introduce a variable whose function is only to ensure the equation always balances when without it, it does not. Besides monetarism failing to account for the human actions of consumers and businesses, over time there have been substantial shifts in how money is used for purposes not included in consumer transactions — the bedrock of consumer price indices and of gross domestic product. The financialisation of the US and other major economies together with the manufacture of consumer and intermediate goods being delegated to emerging economies have radically changed the profiles of the US and the other G7 economies. To assume, as the monetarists do, that the growth of money supply can be applied pro rata to consumer activity is a further error because much of the money supply does not relate to prices of goods and services. Furthermore, when cash and bank deposits are retained by consumers and businesses, for them they represent the true function of money, which is to act as liquidity for future purchases. They are not concerned with past transactions. Therefore, the ratio of cash and instant liquidity to anticipated consumption is what really matters in determining purchasing power and cannot be captured in the equation of exchange. Monetarists have stuck with an equation of exchange whose faults did not matter materially under proper gold standards. Besides ignoring the human element in the marketplace, their error is now to persist with the equation of exchange in a radically different fiat environment. The role of cash and credit reserves In their ignorance of the importance of the ratio between cash and credit relative to prospective purchases of goods and services, all macroeconomists commit a major blunder. It allows them to argue inaccurately that an economic slowdown triggered by a reduction in the growth of currency and credit will automatically lead to a fall in the rate of increase in the general price level. Having warned central banks earlier of the inflation problem with a degree of success, this is what now lies behind monetarists’ forecasts of a sharp slowdown in the rate of price increases. A more realistic approach is to try to understand the factors likely to affect the preferences of individuals within a market society. For individuals to be entirely static in their preferences is obviously untrue and they will respond as a cohort to the changing economic environment. It is individuals who set the purchasing power of money in the context of their need for a medium of exchange — no one else does. As Ludwig von Mises put it in his Critique of Interventionism: “Because everybody wishes to have a certain amount of cash, sometimes more sometimes less, there is a demand for money. Money is never simply in the economic system, in the national economy, it is never simply circulating. All the money available is always in the cash holdings of somebody. Every piece of money may one day — sometimes oftener, sometimes more seldom — pass from one man’s cash holding to another man’s ownership. At every moment it is owned by somebody and is a part of his cash holdings. The decisions of individuals regarding the magnitude of their cash holdings constitute the ultimate factor in the formation of purchasing power.” For clarification, we should add to this quotation from Mises that cash and deposits include those held by businesses and investors, an important factor in this age of financialisation. Aside from fluctuations in bank credit, units of currency are never destroyed. It is the marginal demand for cash that sets it value, its purchasing power. It therefore follows that a relatively minor shift in the average desire to hold cash and bank deposits will have a disproportionate effect on the currency’s purchasing power. Central bankers’ instincts work to maintain levels of bank credit, replacing it with central bank currency when necessary. Any sign of a contraction of bank credit, which would tend to support the currency’s purchasing power, is met with an interest rate reduction and/or increases in the note issue and in addition today increases of bank deposits on the central bank’s balance sheet through QE. The expansion of global central bank balance sheets in this way has been mostly continuous following the Lehman crisis in 2008 until March, since when they began to contract slightly in aggregate — hence the monetarists’ warnings of an impending slowdown in the rate of price inflation. But the slowdown in money supply growth is small beer compared with the total problem. The quantity of dollar notes and bank deposits has tripled since the Lehman crisis and GDP has risen by only two-thirds. GDP does not account for all economic transactions — trading in financial assets is excluded from GDP along with that of most used goods. Even allowing for these factors, the quantity of currency liquidity for economic actors must have increased to unaccustomed levels. This is further confirmed by the Fed’s reverse repo balances, which absorb excess liquidity of currency and credit currently standing at about $2 trillion, which is 9% of M2 broad money supply. In all Western jurisdictions, consuming populations are collectively seeing their cash and bank deposits buy less today than in the past. Furthermore, with prices rising at the fastest rate seen in decades, they see little or no interest compensation for retaining balances of currencies losing purchasing power. In these circumstances and given the immediate outlook for prices they are more likely to seek to decrease their cash and credit balances in favour of acquiring goods and services, even when they are not for immediate use. The conventional solution to this problem is the one deployed by Paul Volcker in 1980, which is to raise interest rates sufficiently to counter the desire of economic actors to reduce their spending liquidity. The snag is that an increase in the Fed funds rate today sufficient to restore faith in holding bank deposits would have to be to a level which would generate widespread bankruptcies, undermine government finances, and even threaten the solvency of central banks, thereby bringing forward an economic and banking crisis as a deliberate act of policy. The egregious errors of the neo-Keynesian cohort Unlike the monetarists, most neo-Keynesians have discarded entirely the link between the quantity of currency and credit and their purchasing power. Even today, it is neo-Keynesians who dominate monetary and economic policy-making, though perhaps monetarism will experience a policy revival. But for now, with respect to inflation money is rarely mentioned in central bank monetary committee reports. The errors in what has evolved from macroeconomic pseudo-science into beliefs based on a quicksand of assumptions are now so numerous that any hope that those in control know what they are doing must be rejected. The initial error was Keynes’s dismissal of Say’s law in his General Theory by literary legerdemain to invent macroeconomics, which somehow hovers over economic reality without being governed by the same factors. From it springs the belief that the state knows best with respect to economic affairs and that all the faults lie with markets. Every time belief in the state’s supremacy is threatened, the Keynesians have sought to supress the evidence offered by markets. Failure at a national level has been dealt with by extending policies internationally so that all the major central banks now work together in group-thinking unison to control markets. We have global monetary coordination at the Bank for International Settlements. And at the World Economic Forum which is trying to muscle in on the act we now see neo-Marxism emerge with the desire for all property and personal behaviour to be ceded to the state. As they say, “own nothing and you will be happy”. The consequence is that when neo-Keynesianism finally fails it will be a global crisis and there will be no escape from the consequences in one’s own jurisdiction. The current ideological position is that prices are formed by the interaction of supply and demand and little else. They make the same error as the monetarists in assuming that in any transaction the currency is constant and all the change in prices comes from the goods side: money is wholly objective, and all the price subjectivity is entirely in the goods. This was indeed true when money was sound and is still assumed to be the case for fiat currencies by all individuals at the point of transaction. But it ignores the question over a currency’s future purchasing power, which is what the science of economics should be about. The error leads to a black-and-white assumption that an economy is either growing or it is in recession — the definitions of which, like almost all things Keynesian, are somewhat fluid and indistinct. Adherents are guided religiously by imperfect statistics which cannot capture human action and whose construction is evolved to support the monetary and economic policies of the day. It is a case of Humpty Dumpty saying, “It means what I chose it to mean —neither more nor less” Lewis Caroll fans will know that Alice responded, “The question is whether you can make words mean so many different things”. To which Humpty replied,” The question is which is to be master —that’s all.” So long as the neo-Keynesians are Masters of Policy their imprecisions of definition will guarantee and magnify an eventual economic failure. The final policy crisis is approaching Whether a macroeconomist is a monetarist or neo-Keynesian, the reliance on statistics, mathematics, and belief in the supremacy of the state in economic and monetary affairs ill-equips them for dealing with an impending systemic and currency crisis. The monetarists argue that the slowdown in monetary growth means that the danger is now of a recession, not inflation. The neo-Keynesians believe that any threat to economic growth from the failures of free markets requires further stimulation. The measure everyone uses is growth in gross domestic product, which only reflects the quantity of currency and credit applied to transactions included in the statistic. It tells us nothing about why currency and credit is used. Monetary growth is not economic progress, which is what increases a nation’s wealth. Instead, self-serving statistics cover up the transfer of wealth from the producers in an economy to the unproductive state and its interests through excessive taxation and currency debasement, leaving the entire nation, including the state itself eventually, worse off. For this reason, attempts to increase economic growth merely worsen the situation, beyond the immediate apparent benefits. There will come a point when the public wakes up to the illusion of monetary debasement. Until recently, there has been little evidence of this awareness, which is why the monetarists have been broadly correct about the price effects of the rapid expansion of currency and credit in recent years. But as discussed above, the expansion of currency and bank deposits has been substantially greater than the increase in GDP, which despite its direction into financial speculation and other activities outside GDP has led to an accumulation of over $2 trillion of excess liquidity no one wants in US dollar reverse repos at the Fed. The growth in the level of personal liquidity and credit available explains why the increase in the general price level for goods and services has lagged the growth of currency and deposits, because at the margin since the Lehman crisis the public, including businesses and financial entities, has been accumulating additional liquidity instead of buying goods. This accelerated during covid lockdowns to be subsequently released in a wave of excess demand, fuelling a sharp rise in the general level of prices, not anticipated by the monetary authorities who immediately dismissed the rise as transient. The build-up of liquidity and its subsequent release into purchases of goods is reflected in the savings rate for the US shown in Figure 2 below. The personal saving rate does not isolate from the total the accumulating level of spending liquidity as opposed to that allocated for investment. The underlying level of personal liquidity will have accumulated over time as a part of total personal savings in line with the growth of currency and bank deposits since the Lehman crisis. The restrictions on spending behaviour during lockdowns in 2020 and 2021 exacerbated the situation, forcing a degree of liquidity reduction which drove the general level of prices significantly higher. Profits and losses resulting from dealing in financial assets and cryptocurrencies are not included in the personal savings rate statistics either. This matters to the extent that bank credit is used to leverage investment. Nor is the accumulation of cash in corporations and financial entities, which are a significant factor. But whatever the level of it, there can be little doubt that the levels of liquidity held by economic actors are unaccustomedly high. The accumulation of reverse repos representing unwanted liquidity informs us that the public, including businesses, are so sated with excess liquidity that they may already be trying to reduce it, particularly if they expect further increases in prices. In that event they will almost certainly bring forward future purchases to alter the relationship between personal liquidity and goods. It is a situation in America which is edging towards a crack-up boom. A crack-up boom occurs when the public as a cohort attempts to reduce the overall level of its currency and deposits in favour of goods towards a final point of rejecting the currency entirely. So far, economic history has recorded only one version, which is when after a period of accelerating debasement of a fiat currency the public finally wakes up to the certainty that a currency is becoming worthless and all hope that it might somehow survive as a medium of exchange must be abandoned. To this, perhaps we can add another: the consequences of a collapse of the world’s major monetary institutions in unison. How excess liquidity is likely to play out We have established beyond reasonable doubt that the US economy is awash with personal liquidity. And if one man disposes of his liquidity to another in a transaction the currency and bank deposit still exists. But aggregate personal liquidity can be reduced by the contraction of bank credit. As interest rates rise, thereby exposing malinvestments, the banks will be quick to protect themselves by withdrawing credit. As originally described by Irving Fisher, a contraction of bank credit risks triggering a self-feeding liquidation of loan collateral. Initially, we can expect central banks to counter this contraction by redoubling efforts to suppress bond yields, reinstitute more aggressive QE, and standing ready to bail out banks. These are all measures which are in the central banker’s instruction manual. But the conditions leading to a crack-up boom appear to be already developing despite the increasing likelihood of contracting bank credit. The deteriorating outlook for bank credit and the impact on highly leveraged banks, particularly in Japan and the Eurozone, is likely to accelerate the flight out of bank deposits to — where? Regulators have deliberately reduced access to currency cash so a bank depositor can only dispose of larger sums by transferring them to someone else. Before an initial rise in interest rates began to undermine financial asset values, a transfer of a bank deposit to a seller of a financial asset was a viable alternative. That is now an increasingly unattractive option due to the changed interest rate environment. Consequently, the principal alternative to holding bank deposits is to acquire physical assets and consumer items for future use. But even that assumes an overall stability in the public’s collective willingness to hold bank deposits, which without a significant rise in interest rates is unlikely to be the case. The reluctance of a potential seller to increase his bank deposits is already being reflected in prices for big ticket items, such as motor cars, residential property, fine and not-so-fine art, and an increasing selection of second-hand goods. This is not an environment that will respond positively to yet more currency debasement and interest rate suppression as the monetary authorities struggle to maintain control over markets. The global financial bubble is already beginning to implode, and the central banks which have accumulated large portfolios through quantitative easing are descending into negative equity. Only this week, the US Fed announced that it has unrealised portfolio losses of $330bn against equity of only $50bn. The Fed can cover this discrepancy if it is permitted by the US Treasury to revalue its gold note to current market prices – but further rises in bond yields will rapidly wipe even that out. Other central banks do not have this leeway, and in the cases of the ECB and the Bank of Japan, they are invested in considerably longer average bond maturities, which means that as interest rates rise their unrealised losses will be magnified. So, the major central banks are insolvent or close to it and will themselves have to be recapitalised. At the same time, they will be required to backstop a rapidly deteriorating economic situation. And being run by executives whose economic advisers do not understand both economics nor money itself, it all amounts to a recipe for a final cock-up crack-up boom as economic actors seek to protect themselves. As the situation unfolds and economic actors become aware of the true inadequacies of bureaucratic group-thinking central bankers, the descent into the ultimate collapse of fiat currencies could be swift. It is now the only way in which all that excess faux liquidity can be expunged. Tyler Durden Sat, 06/04/2022 - 13:30.....»»

NASA astronaut Doug Hurley discussed what it was like working with Elon Musk and a new Netflix documentary he features in, in a Fox interview. SpaceX and Tesla CEO Elon Musk.Yasin Ozturk/Anadolu Agency via Getty Images Elon Musk has a "very human side to him," according to NASA astronaut Doug Hurley.  Hurley's comments came ahead of a new Netflix documentary covering a historic SpaceX launch in 2020. In an interview with Fox News, Hurley discussed working with Musk and the new documentary.  NASA astronaut Doug Hurley reminisced on what it was like working with SpaceX CEO Elon Musk before he flew on a historic flight to space and back in 2020. In an interview with Fox News, Hurley spoke about his impressions of Musk, the billionaire space race, and a new Netflix documentary, "Return to Space" which follows Hurley's journey and that of fellow astronaut Bob Behnken as they embarked on the first human SpaceX mission to the International Space Station. In May 2020, Musk and SpaceX made history after the company successfully launched two astronauts into space aboard a Crew Dragon spaceship. Shortly after, the astronauts' ship docked at the International Space Station.The mission marked the first time a commercial spaceship delivered humans into orbit and to the ISS. According to Hurley, Musk had a "huge amount of concern" for him and Behnken's safety when preparing for the launch. "He wanted to ensure that the mission would not only be successful but that we would come back to our families," Hurley told Fox. "It drove him to look at every single possible thing with the spacecraft to make sure that we come home safely," he added.Hurley said one thing most people don't get to witness about Musk is his "human side." As the spaceflight edged closer, Hurley recalled Musk speaking to every employee, "even the interns," asking them about their concerns surrounding the mission. "I think that's a very human side a lot of people don't get to see. What I witnessed was a man who was genuinely concerned about our well-being and our families. And I will always be thankful for that because I'm still here," Hurley said. Before the SpaceX flight, the US hadn't flown humans to space from American soil since 2011. Musk subsequently resurrected American crewed spaceflight for NASA but also kicked off a new era of commercial spaceflight with the 2020 mission. One thing that "amazed" Hurley the most about Musk, however, is his "incredible grasp of the technical situation." "You can talk to him about the spacecraft itself or an issue with the rocket — he wants to understand all of it. He's very hands-on," Hurley said. "You have engineers, literally the experts of the system, on site to address those questions," he added. Despite Hurley's praise, Musk's public reputation is somewhat mixed.His on-and-off romantic partner, the musician Grimes, recently described him in an interview with Vanity Fair as both "the love of my life" and someone who says "stupid shit." On the latter, Musk has consistently shown misunderstanding of how particular COVID-19 tests work and skepticism of public health measures, Insider previously reported. He also tweeted "the coronavirus panic is dumb" in March 2020.  Two years on, the disease has killed nearly 1 million of his fellow Americans.Musk recently joined the board of Twitter after steadily buying up the firm's shares and becoming its biggest shareholder. Some Twitter employees expressed annoyance at the development, with one changing their name to "elon musk is a racist demagogue with a god complex." Another said those protesting represented "a vocal minority" at Twitter, Insider reported.Read the original article on Business Insider.....»»

Edging Towards A Gold Standard Authored by Alasdair Macleod via GoldMoney.com, Commentators are trying to make sense of Russian moves... However, there is a back story which differs from much of the speculation, which this article addresses. The Russians have not put the rouble on some sort of gold standard. Instead, they have repeated the Nixon/Kissinger strategy which created the petrodollar in 1973 by getting the Saudis to agree to accept only dollars for oil. This time, nations deemed by Russia to be unfriendly will be forced to buy roubles – roughly 2 trillion by the EU alone based on last year’s natural gas and oil imports from Russia — driving up the exchange rate. The rouble has now doubled against the dollar from its low point of RUB 150 to RUB 75 yesterday in just over three weeks. The Russian Central Bank will soon be able to normalise the domestic economy by reducing interest rates and removing exchange controls. The Russians and Chinese will be acutely aware that Western currencies, particularly the yen and euro, are likely to be undermined by recent developments. The financial war, which has always been in the background, is emerging into plain sight and becoming a battlefield between fiat currencies, and it is full on. The winner by default is almost certainly gold, now the only reliable reserve asset for those not aligned with Russia’s “unfriendlies”. But it is still a long way from backing any currency. Putin is losing the battle for Ukraine President Putin is embattled. His army as let him down — it turns out that his generals lack the necessary leadership qualities, the squaddies are suffering from lack of food, fuel, and are suffering from frostbite. It is reported that one brigade commander, Colonel Yuri Medvedev, was deliberately run down by one of his own men in a tank, a measure of the chaos at the front line. And Putin is not the first national leader to have misplaced his confidence in military forces. Conventional wisdom (from Carl von Clausewitz, no less) suggested Putin might win the battle for Ukraine but would be unable to hold the territory. That requires the willingness of the population to accept defeat, and a lesson the Soviets had learned in Afghanistan, with the same experience repeated by America and the UK. But Putin has not even won the battle and word from the Kremlin is of accepting a face-saving fall-back position, perhaps taking Donetsk and the coast of the Sea of Azov to join it up with Crimea. There was little doubt that if Putin came under pressure militarily, he would probably step up the commodity and financial war. This he has now done by insisting on payments in roubles. The mistake made in the West was to believe that Russia must sell commodities, and even though sanctions harm the West greatly, the strategy is to put maximum pressure on the Russian economy for a quick resolution. It is obviously flawed because Russia can still trade with China, India, and other significant economies. And thanks to rising commodity prices the Russian economy is not in the bad place the West believed either. Besides nations representing 84% of the world’s population standing aside from the Western alliance’s sanctions and with some like India sorely tempted to buy discounted Russian oil, we would profit from paying attention to some very basic factors. Russia can certainly afford to sell oil at significant discounts to market prices, and there are buyers willing to break the American-led embargoes. The non-Western world is no longer automatically on-side with American hegemony; that is a rotting hulk which the Americans are desperately trying to keep afloat. Observing this, the Kremlin seems relaxed and has said that it is willing to accept currencies from its friends, but Western enemies (the “unfriendlies”) would have to pay for oil in roubles or, it has also been suggested, in gold. On 23 March the Kremlin drew up a list of these unfriendly countries, which includes the 27 EU members, Switzerland, Norway, the United States, the United Kingdom, Canada, Australia, New Zealand, Japan, and South Korea. Payment in roubles is easy to understand. We can assume that all oil and natural gas long-term supply contracts with the unfriendlies have force majeure clauses, because that is normal practice. In the light of sanctions, the Russians are entitled to claim different payment terms. And it is this that the Russians are relying upon for insisting on payment in roubles. Germany, for example, would have to buy roubles on the foreign exchanges to pay for her gas. Buying roubles supports the currency, and this was the tactic that created the petrodollar in 1973 when Nixon and Kissinger persuaded the Saudis to take nothing else but dollars for oil. It was that single move which more than anything confirmed the dollar as the world’s international and reserve currency in the aftermath of the temporary suspension of the Bretton Woods Agreement. That’s not quite the objective here; it is to not only underwrite the rouble, but to drive it higher relative to other currencies. The immediate effect has been clear, as the chart from Bloomberg below shows. Having halved in value against the dollar on 7 March, all the rouble’s fall has been recovered. And that’s even before Germany et al buy roubles on the foreign exchanges to pay for Russian energy. The gold issue is more complex. The West has banned not only Russian transactions settling in their currencies but also from settling in gold. The assumption is that gold is the only liquid asset Russia has left to trade with. But just as ahead of the end of the cold war Western intelligence completely misread the Soviet economy, it could be making a mistake again. This time, intel seems to be misled by full-on Keynesian macro analysis, suggesting the Russian economy is vulnerable when it is inherently stronger in a currency shoot-out than even the dollar. There is no need for Russia to sell any gold at all. The Russian economy has a broadly non-interventionist government, a flat rate of income tax of 13%, and a government debt of 20% of GDP. There are flaws in the Russian economy, particularly in the lack of respect for property rights and the pervasive problem of the Russian Mafia. But in many respects, Russia’s economy is like that of the US before 1916, when the highest income tax rate was 15%. An important difference is that the Russian government gets substantial revenues from energy and commodity exports, taking its income up to over 40% of GDP. While export volumes of energy and other commodities are being hit by sanctions, their prices have risen substantially. But it remains to be seen what form of money or currency for future payments will be used for over $550bn equivalent of exports, while $297bn of imports will be substantially reduced by sanctions, widening Russia’s trade surplus considerably. Euros, yen, dollars, and sterling are ruled out, worthless in the hands of the Central Bank. That leaves Chinese renminbi, Indian rupees, weakening Turkish lira and that’s about it. It’s hardly surprising that Russia is prepared to accept gold. Putin’s view on the subject is shown in Figure 1 of stills taken from a Tik Tok video released last weekend. Furthermore, Russia’s official reserves are only a small part of the story. Simon Hunt of Simon Hunt Strategic Services, who I have found to be consistently well informed in these matters, is convinced based on his information that Russia’s gold reserves are significantly higher than reported — he thinks 12,000 tonnes is closer to the mark. The payment choice for those on Russia’s unfriendly list, if we rule out gold, is effectively of only one — buy roubles to pay for Russian energy. By sanctioning the world’s largest energy exporter, the effect on energy prices in dollars is likely to drive them far higher yet. Additionally, market liquidity for roubles is likely to be restricted, and the likelihood of a bear squeeze on any shorts is therefore high. The question is how high? Last year, the EU imported 155 billion cubic meters of natural gas from Russia, valued at about $180bn at current volatile prices. Oil exports from Russia to the EU were about 2.3 million barrels per day, worth an additional $105bn for a combined total of $285bn, which at the current exchange rate of RUB 75.5 is RUB 2.15 trillion. EU Gas consumption is likely to fall as spring approaches, but payments in roubles will still drive the exchange rate significantly higher. And attempts to obtain alternative sources of LNG will take time, be insufficient, and serve to drive natural gas prices from other suppliers even higher. For now, we should dismiss ideas over payments to the Russians in gold. The Russian gold story, initially at least, is a domestic issue. Though it might spill over into international markets. On 25 March, Russia’s central bank announced it will buy gold from credit institutions at a fixed rate of 5,000 roubles per gramme starting this week and through to 30 June. The press release stated that it will enable “a stable supply of gold and smooth functioning of the gold mining industry.” In other words, it allows banks to continue to lend money to gold mining and related activities, particularly for financing new gold mining developments. Meanwhile, the state will continue to accumulate bullion which, as discussed above, it has no need to spend on imports. When the RCB’s announcement was made the rouble was considerably weaker and the price offered by the central bank was about 20% below the market price. But that has now changed. Based on last night’s exchange rate of 75.5 roubles to the dollar (30 March) and with gold at $1935, the price offered by the central bank is at a premium of 7.2% to the market. Whether this opens the situation up to arbitrage from overseas bullion markets is an intriguing question. And we can assume that Russian banks will find ways of acquiring and deploying the dollars to do so through their offshore facilities, until, under the cover of a strong rouble, the RCB removes exchange controls. There is nothing in the RCB’s statement to prevent a Russian bank sourcing gold from, say, Dubai, to sell to the central bank. Guidance notes to which we cannot be privy may address this issue but let us assume this arbitrage will be permitted, because it might be difficult to stop. And if Russia does have undeclared bullion reserves more than those allegedly held by the US Treasury, then given that the real war is essentially financial, it is in Russia’s interest to see the gold price rise in dollars. Not only would Eurozone banks be scrambling to obtain roubles, but the entire Western banking system, which takes the short side of derivative transactions in gold will find itself in increasing difficulties. Normally, bullion banks rely on central banks and the Bank for International Settlements to backstop the market with physical liquidity through leases and swaps. But the unfortunate message from the West to every central bank not on Russia’s unfriendly list is that London’s or New York’s respect for ownership rights to their nation’s gold cannot be relied upon. Not only will lease and swap liquidity dry up, but it is likely that requests will be made for earmarked gold in these centres to be repatriated. In short, Russia appears to be initiating a squeeze on gold derivatives in Western capital markets by exploiting diminishing faith in Western institutions and their cavalier treatment of foreign property rights. By forcing the unfriendlies into buying roubles, the RCB will shortly be able to reduce interest rates back to previous policy levels and remove exchange controls. At the same time, the inflation problems faced by the West will be ameliorated by a strong rouble. It ties in with the politics for Putin’s survival. Together with the economic benefits of an improving exchange rate for the rouble and the relatively minor inconvenience of not being able to buy imports from the West (alternatives from China and India will still be available) Putin can retreat from his disastrous Ukrainian campaign. Senior figures in the Russian army will be disciplined, imprisoned, or disappear accused of incompetence and misleading Putin into thinking his “special operation” would be quickly achieved. Putin will absolve himself of any blame and dissenters can expect even greater clampdowns on protests. Russia’s moves are likely to have been thought out in advance. The move to support the rouble is evidence it is so, giving the central bank the opportunity to reverse the interest rate hike to 20% to protect the rouble. Foreign exchange controls on Russians can shortly be lifted. Almost certainly the consequences for Western currencies were discussed. The conclusion would surely have been that higher energy and other Russian commodity prices would persist, driving Western price inflation higher and for longer than discounted in financial markets. Western economies face soaring interest rates and a slump. And depending on their central bank’s actions, Japan and the Eurozone with negative interest rates are almost certainly most vulnerable to a financial, currency, and economic crisis. The impact of Russia’s new policy of only accepting roubles was, perhaps, the inevitable consequence of the West’s policies of self-immolation. From Russia’s failure in Ukraine, Putin appears to have had little option but to go on the offensive and escalate the financial, or commodity-currency war to cover his retreat. We can only speculate about the effect of a strong rouble on the international gold price, but if Russian banks can indeed buy bullion from non-Russian sources to sell to the RCB, it would mark a very aggressive move in the ongoing financial war. China’s position China will be learning unpalatable lessens about its ambition to invade Taiwan, and Taiwan will be encouraged mightily by Ukraine’s success at repelling an unwelcome invader. A 100-mile channel is an enormous obstacle for a Chinese invasion that Russia didn’t have to navigate before Ukrainian locals exploited defensive tactics to repel the invader. There can now be little doubt of the outcome if China tried the same tactics against Taiwan. President Xi would be sensible not to make the same mistake as Putin and tone down the anti-Taiwan rhetoric and try the softer approach of friendly relations and economic integration to reunite Chinese interests. That has been a costless lesson for China, but another consideration is the continuing relationship with Russia. The earlier Chinese description of it made sense: “We are not allies, but we are partners”. What this means is that China would abstain rather than support Russia in the various supranational forums where the world’s leaders gather. But she would continue to trade with Russia as normal, even engaging in currency swaps to facilitate it. More recently, a small crack has appeared in this relationship, with China concerned that US and EU sanctions might be extended to Chinese entities in joint ventures with Russian businesses linked to sanctioned oligarchs and Putin supporters. The highest profile example has been the suspension of a joint project to build a petrochemical plant in Russia involving Sinopec, because of the involvement of Gennady Timchenko, a close ally of Putin. But according to a report from Nikkei Asia, Sinopec has confirmed it will continue to buy Russian crude oil and gas. As always with its geopolitics, we can expect China to play its hand with great care. China was prepared for the consequences of US monetary policy in March 2020 when the Fed reduced its funds rate to zero and instituted quantitative easing of $120bn every month. By its actions it judged these moves to be very inflationary, and began stockpiling commodities ahead of dollar price rises, including energy and grains to project its own people. The yuan has risen against the dollar by about 11%, which with moderate credit policies has kept annualised domestic price inflation subdued to about 1% currently, while consumer price inflation in the West is soaring out of control. China is not therefore in the weak financial position of Russia’s “unfriendlies”; the highly indebted governments whose finances and economies are likely to be destabilised by rising energy prices and interest rates. But it does have a potential economic crisis on its hands in the form of a collapsing property market. In February, its response was to ease the credit restrictions imposed following the initial pandemic recovery in 2021, which had included attempts to deleverage the property sector. Property aside, we can assume that China will not want to destabilise the West by her own actions. The West is doing that very effectively without China’s assistance. But having demonstrated an understanding of why the West is sliding into an inflation crisis of its own making China will be keen not to make the same mistakes. Her partnership with Russia, as joint leaders in the Shanghai Cooperation Organisation, is central to detaching herself from what its Maoist economists forecast as the inevitable collapse of imperial capitalism. Having set itself up in the image of that imperialism, it must now become independent from it to avoid the same fate. Gold’s wider role in China, Russia, and the SCO Gold has always been central to China’s fallback position. I estimated that before permitting its own people to buy gold in 2002, the state had acquired as much as 20,000 tonnes. Subsequently, through the Shanghai Gold Exchange the Chinese public has taken delivery of a further 20,000 tonnes, mainly through imports from outside China. No gold escapes China, and the Chinese government is likely to have added to its hoard over the last twenty years. The government maintains a monopoly on refining and has stimulated the mining industry to become the largest national producer. Together with its understanding of the West’s inflationary policies the evidence is clear: China is prepared for a world of sound money with gold replacing the dollar’s hegemony, and it now dominates the world’s physical market with that in mind. These plans are shared with Russia, and the members, dialog partners and associates of the Shanghai Cooperation Organisation — almost all of which have been accumulating gold reserves. Mine output from these countries is estimated by the US Geological Survey at 830 tonnes, 27% of the global total. The move away from pure fiat was confirmed recently by some half-baked plans for the Eurasian Economic Union and China to escape from Western fiat by setting up a new currency for cross-border trade backed partly by commodities, including gold. The extent of “off balance sheet” bullion is a critical issue, because at some stage they are likely to be declared. In this context, the Russian position is important, because if Simon Hunt, quoted above, is correct Russia could have more gold than the US’s 8,130 tonnes, which it is widely thought to overstate the latter’s true position. Furthermore, Western central banks routinely lease and swap their gold reserves, leading to double counting, which almost certainly reduces their actual position in aggregate. And if fiat currencies continue to decline we could find that the two ringmasters for the SCO have more monetary gold than all the other central banks put together — something like 30,000-40,000 tonnes for Chinese and Russian governments, compared with perhaps less than 20,000 tonnes for Russia’s adversaries (officially ,the unfriendlies own about 24,000 tonnes, but we can assume that at least 5,000 of that is double counted or does not exist due to leasing and swaps). The endgame for the yen and the euro Without doubt, the terrible twins in the major fiat currencies are the yen and the euro. They share much in common: negative interest rates, major commercial banks highly leveraged with asset to equity ratios averaging over twenty times, and central bank balance sheets overloaded with bonds which are collapsing in value. They now face rising interest rates spiralling beyond their control, the consequences of the ECB and Bank of Japan being trapped under the zero bound and being in denial over falling purchasing power for their currencies. Consequently, we are seeing capital flight, which has accelerated dramatically this month for the yen, but in truth follows on from relative weakness for both currencies since the middle of 2021 when global bond yields began rising. Statistically, we can therefore link the collapse of both currencies on the foreign exchanges with rising bond yields. And given that rising interest rates and bond yields are in their early stages, there is considerable currency weakness yet to come. Japan and its yen The Bank of Japan has publicly stated it would buy an unlimited amount of 10-year Japanese Government Bonds at a 0.25% yield to contain the bond sell-off. A higher yield would be more than embarrassing for the BOJ, already requiring a recapitalisation, presumably with its heavily indebted government stumping up the money. Figure 2 shows that the 10-year JGB yield is already testing the 0.25% yield level (charts from Bloomberg). Fig 2. JGB yields hits BoJ Limit and Yen collapsing As avid Keynesians, the BOJ is following similar policies to that of John Law in 1720’s France. Law issued fresh livres which he used to prop up the Mississippi venture by buying shares in the market. The bubble popped, the venture survived, but the livre was destroyed. Today, the BOJ is issuing yen to prop up the Japanese government bond market. As the issuer of the currency, the BOJ is by any yardstick bankrupt and in desperate need of new capital. Since it commenced QE in 2000, it has accumulated so much government and corporate debt, and even equities bundled into ETFs, that the falling value of the BOJ’s holdings makes its liabilities significantly greater than its assets, currently to the tune of about ¥4 trillion ($3.3bn). Ignoring the cynic’s definition of madness, the BOJ is doubling down on its commitment, announcing on Monday further unlimited purchases of 10-year JGBs at a fixed yield of 0.25%. In other words, it is supporting bond prices from falling further, echoing Mario Draghi’s “whatever it takes” and confirming its John Law policy. Last Tuesday’s Summary of Opinions at the Monetary Policy Meeting on March 17 and 18 had this gem: “Heightened geopolitical risks due to the situation surrounding Ukraine have caused price rises of energy and other items, and this will push down domestic demand while raising the CPI. Under the circumstances, it is necessary to improve labour market conditions and provide stronger support for wage increases, and therefore it is increasingly important that the bank persistently continue with the current monetary easing.” No, this is not satire. In other words, the BOJ’s deposit rate will remain negative. And the following was added from Government Representatives at the same meeting: “The budget for fiscal 2022 aims to realise a new form of capitalism through a virtual circle of growth and distribution and the government has been making efforts to swiftly obtain the Diet’s approval.” A virtuous circle of growth? It seems like intensified intervention. Meanwhile, Japan’s major banks with asset to equity ratios of over twenty times are too highly geared to survive rising interest rates without a bank credit crisis threatening to take them down. It is hardly surprising that international capital is fleeing the yen, realising that it will be sacrificed by the BOJ in the vain hope that it can continue to maintain bond prices far above where they should be. The euro system and its euro The euro system and the euro share similar characteristics to the BOJ and the yen: interest rates trapped under the zero bound, Eurozone G-SIBs with asset to equity ratios of over 20 times and market realities forcing interest rates and bond yields higher, as Figure 3 shows. Furthermore, Eurozone banks are heavily exposed to Russian and Ukrainian debt due to their geographic proximity. Fig 3: Euro declining as bond yields soar There are two additional problems for the Eurosystem not faced by the BOJ and the yen. The ECB’s shareholders are the national central banks in the euro system, which in turn have balance sheet liabilities more than their assets. The structure of the euro system means that in recapitalising itself the ECB does not have a government to which it can issue credit and receive equity capital in return, the normal way in which a central bank would refinance its balance sheet by turning credit into equity. Instead, it will have to refinance itself through the national central banks which being insolvent themselves in turn would have to refinance themselves through their governments. The second problem is a further complication. The euro system’s TARGET2 settlement system reflects enormous imbalances which complicates resolving a funding crisis. For example, on the last figures (end-February), Germany’s Bundesbank was owed €1,150 billion through TARGET2, while Italy owed €568 billion. It would be in the interests of a recapitalisation for the Italian government to want its central bank to write off this amount, while the Bundesbank is already in negative equity without writing off TARGET2 balances. Germany’s politicians might demand the balances owed to the Bundesbank be secured. This problem is not insoluble perhaps, but one can see that political and public wrangling over these imbalances will only serve to draw attention to the fragility of the whole system and undermine public trust in the currency. With Germany’s CPI now rising at 7.6% and Spain’s at 9.8%, negative deposit rates are wildly inappropriate. When the system breaks it can be expected to be sudden, violent and a shock to those in thrall to the euro system. Conclusion For decades, a showdown between an Asian partnership and hegemonic America has been building. We can date this back to 1983, when China began to accumulate physical gold having appointed the Peoples’ Bank for the purpose. That act was the first indication that China felt the need to protect itself from others as it ventured into capitalism. China has navigated itself through increasing American assertion of its hegemony and attempts to destabilise Hong Kong. It has faced obstacles to its lucrative export trade through tariffs. It has been cut off from Western markets for its advanced technology. China has resented having to use the dollar. After Russia’s ill-advised invasion of Ukraine, it now appears that the invisible war over global financial resources and control is intensifying. The fuse has been lit and events are taking over. The destabilisation of the yen and the euro are now as certain as can be. While the yen is the victim of John Law-like market-rigging policies and likely to go the same way as France’s livre, perhaps the greater danger is for the euro. The contradictions in its set-up, and the destruction of Germany’s sound money principals in favour of the inflationism of the PIGS was always going to be finite. The ECB has got itself into a ridiculous position, and no amount of conjuring and cajoling of financial institutions can resolve the ECB’s own insolvency and that of all its shareholders. History shows that there are two groups involved in a currency collapse. International holders take fright and sell for other currencies and assets they believe to be more secure. They drive the exchange rate lower. The second group is the public in a nation, those who use the currency for transactions. If they lose confidence in it, the currency can rapidly descend into worthlessness as ordinary people accelerate its disposal for anything tangible in a final crack-up boom. In the past, an alternative currency was always the sounder one, one backed by and exchangeable for gold coin. That is so long ago that we in the West have mostly forgotten the difference between money, that is gold and silver, and unbacked fiat currencies. The great unknown has been how much abuse of money and credit it would take for the public to relearn the difference. Cryptocurrencies have alerted us, but they are not a widely accepted medium of exchange and don’t have the legal standing of gold and gold substitutes. War is to be our wake-up call — financial rather than physical in character. Western central banks and their governments have been fiddling the books, telling us that currency debasement is good for us. That debasement has accelerated in recent years. But by upping the anti against Russia with sanctions that end up undermining the purchasing power of all the West’s major currencies, our leaders have called an end to the reign of fiat. Tyler Durden Sat, 04/02/2022 - 14:30.....»»

Five Trump-Russia 'Collusion' Corrections We Need From The Media Now Authored by Aaron Maté via RealClearInvestigations.com, Five years after the Hillary Clinton campaign-funded collection of Trump-Russia conspiracy theories known as the Steele dossier was published by BuzzFeed, news outlets that amplified its false allegations have suffered major losses of credibility. The recent indictment of the dossier's main source, Igor Danchenko, for allegedly lying to the FBI, has catalyzed a new reckoning. In response to what the news site Axios has called "one of the most egregious journalistic errors in modern history," the Washington Post has re-edited at least a dozen stories related to Steele. For two of those, the Post removed entire sections, changed headlines, and added lengthy editor's notes. Rosalind Helderman: Bylined reporter on two of the Post's most corrected stories. Twitter/@PostRoz Tom Hamburger: Other bylined reporter on two of the Post's most corrected stories. Twitter/@thamburger But the Post's response also exhibits the limits of the media's Steele-induced self-examination. First, the reporters bylined on those two articles, Rosalind S. Helderman and Tom Hamburger, and their editors have declined to explain how and why they were so egregiously misled. Nor have they revealed the names of the anonymous sources responsible for deceiving them and the public over months and years. Perhaps more important, the Post, like other publications, has so far limited its Russiagate reckoning to work directly involving Steele – and only after a federal indictment forced its hand. But the Steele dossier has been widely discredited since at least April 2019, when Special Counsel Robert S. Mueller and his team of prosecutors and FBI agents were unable to find evidence in support of any of its claims. The dossier was also only one aspect of the Trump-Russia misinformation fed to the public. Even when not advancing Steele's most lurid allegations, the nation's most prominent news outlets nonetheless furthered his underlying narrative of a Trump-Russia conspiracy and a Kremlin-compromised White House. Along the way, some journalists won their profession's highest distinction for this flawed coverage. While co-bylining stories that the Post has all but retracted, Helderman and Hamburger also share a now increasingly awkward honor along with more than a dozen other colleagues at the Post and New York Times: a Pulitzer Prize. In 2018, the Pulitzer awards committee honored the two papers for 20 articles it described as "deeply sourced, relentlessly reported coverage in the public interest that dramatically furthered the nation's understanding of Russian interference in the 2016 presidential election and its connections to the Trump campaign, the President-elect's transition team and his eventual administration." Above, Washingon Post and New York Times reporters whose 2018 Pulitzer Prize for National Reporting on the Trump-Russia affair is tainted by evidence in the public record that significant reporting was erroneous or misleading -- reporting that still has not been corrected by their publications, even though the Post recently made numerous corrections regarding the long-discredited Steele dossier. Journalist identifications are here. (Credit: YouTube/The Pulitzer Prizes) Although neither newspaper has given any indication that it is returning the Pulitzer, the public record has long made clear that many of those stories – most of which had nothing to do with Steele – include falsehoods and distortions requiring significant corrections. Far from showing "deeply sourced, relentlessly reported coverage," the Post's and the Times' reporting has the same problem as the Steele document that these same outlets are now distancing themselves from: a reliance on anonymous, deceptive, and almost certainly partisan sources for claims that proved to be false. Many other prestigious outlets published a barrage of similarly flawed articles. These include the report by Peter Stone and Greg Gordon of McClatchy that the Mueller team obtained evidence that Trump lawyer Michael Cohen had visited Prague in 2016; Jane Mayer's fawning March 2018 profile of Steele in the New Yorker; the report by Jason Leopold and Anthony Cormier of BuzzFeed that President Trump instructed Cohen to lie to Congress -- explicitly denied by Mueller at the time; and Luke Harding of The Guardian's bizarre and evidence-free allegation that Julian Assange and Paul Manafort met in London's Ecuadorian embassy. McClatchy and BuzzFeed have added editors' notes to their stories but have not retracted them.  In this article, RealClearInvestigations has collected five instances of stories containing false or misleading claims, and thereby due for retraction or correction, that were either among the Post and Times' Pulitzer-winning entries, or other work of reporters who shared that prize. Significantly, this analysis is not based on newly discovered information, but documents and other material long in the public domain. Remarkably, some of the material that should spark corrections has instead been held up by the Post and Times as vindication of their work. RCI sent detailed queries about these stories to the Post, the Times, and the journalists involved. The Post's response has been incorporated into the relevant portion of this article. The Times did not respond to RCI's queries by the time of publication. Falsehood No. 1: Michael Flynn Discussed Sanctions With Russia and Lied About It Flynn faces the press in his only White House Briefing Room remarks as national security adviser. YouTube/C-SPAN Officials say Flynn discussed sanctions By Greg Miller, Adam Entous and Ellen NakashimaWashington Post, February 9, 2017 Less than a month after BuzzFeed published the Steele dossier, the Washington Post significantly advanced the then-growing narrative that the Trump White House was beholden to Russia. A Feb. 9, 2017, Post article claimed that National Security Adviser Michael Flynn "privately discussed U.S. sanctions against Russia" with Russian Ambassador Sergei Kislyak "during the month before President Trump took office, contrary to public assertions by Trump officials." The Post sourced its reporting to nine "current and former officials" who occupied "senior positions at multiple agencies at the time of the calls" between Flynn and Kislyak following the Nov. 8, 2016 election. The Post's sources – who were revealing classified information, presumably from taps on Kislyak's phone – left no room for doubt: "All of those officials said Flynn's references to the election-related sanctions were explicit." They also added their own spin to the meaning of the conversations: Flynn's calls with Kislyak "were interpreted by some senior U.S. officials as an inappropriate and potentially illegal signal to the Kremlin that it could expect a reprieve from sanctions that were being imposed by the Obama administration in late December to punish Russia for its alleged interference in the 2016 election." Adding some mind-reading to the narrative, a former official told the Post that Kislyak "was left with the impression that the sanctions would be revisited at a later time." The Post and its sources fueled innuendo that Flynn had floated a payback for Russia's alleged 2016 election help and lied to cover it up. Facing a barrage of anonymous officials contradicting him, Flynn walked back an initial denial and told the Post that "while he had no recollection of discussing sanctions, he couldn't be certain that the topic never came up." Four days later, he was forced to resign. The following December, Special Counsel Mueller seemingly vindicated the Post's narrative when Flynn pleaded guilty to making false statements to the FBI, including about his discussion of sanctions with the Russian ambassador. Flynn would later backtrack and reverse that guilty plea, sparking a multi-year legal saga. When the transcripts of his calls with Kislyak were finally released in May 2020, they showed that Flynn had grounds to fight: It wasn't Flynn who made a false statement about discussing sanctions with Kislyak; it was all nine of the Post's sources — and, later, the Mueller team — who had misled the public. Sergei Kislyak: Transcripts of Flynn's calls with the Russian Ambassador do not square with the Washington Post's reporting. AP Photo/Carolyn Kaster, File In all of Flynn's multiple conversations with Kislyak in December 2016 and January 2017, the issue of sanctions only gets one fleeting mention – by Kislyak. The Russian ambassador tells Flynn that he is concerned that sanctions will hurt U.S.-Russia cooperation on fighting jihadist insurgents in Syria. The sum total of Flynn's response on the matter: "Yeah, yeah." The pair did have a longer discussion about a separate action Obama had ordered at the time: the expulsion of 35 Russian officials living in the United States. The expulsions, which were carried out by the State Department, were a distinct action from the sanctions, which targeted nine Russian entities and individuals under a presidential executive order. In discussing the expulsions, Flynn never addressed what Trump might do; his only request was that the Kremlin's response be "reciprocal" and "even-keeled" so that "cool heads" can "prevail." "[D]on't go any further than you have to," Flynn told Kislyak. "Because I don't want us to get into something that has to escalate, on a, you know, on a tit for tat." In its rendering of the call, the Mueller team cited these comments from Flynn – but inaccurately claimed that he had made them about sanctions. The Special Counsel's Office appeared to be following the lead of the Post's sources, who had claimed, falsely, that Flynn's references to sanctions were "explicit." Both the Post and the special counsel used Flynn's explicit comments about expulsions to erroneously assert that he had discussed sanctions. Yet the release of the transcripts did not prompt the Post to come clean. Instead, both the Post and the New York Times doubled down on the deception. The Post's May 29, 2020, story about the transcripts' release was headlined "Transcripts of calls between Flynn, Russian diplomat show they discussed sanctions." The Times claimed that same day that "Flynn Discussed Sanctions at Length With Russian Diplomat, Transcripts Show." In reality, the transcripts showed the exact opposite. In response to RCI, the Post acknowledged that the Feb. 9, 2017 story had conflated "sanctions" with "expulsions." "We appropriately used the word 'sanctions' in reference to the punitive measures announced by President Obama, including Treasury penalties on Russian individuals, expulsions of Russian diplomats/spies and the seizure of two Russia-owned properties," Shani George, the Post's Vice President for Communications, wrote. In other articles, however -- including a Dec. 29, 2016 article linked in the Feb. 9 story's second paragraph – the Post made a clear distinction between the two. Asked about dropping the distinction between sanctions and expulsions for the article discussed here, the Post did not respond by the time of publication.  Falsehood No. 2: Repeated Contacts With Russian Intelligence Left to right, Carter Page, Paul Manafort, Roger Stone: Repeated contacts with Russian spies? Doubtful. FNC/AP Trump Campaign Aides Had Repeated Contacts With Russian Intelligence By Michael S. Schmidt, Mark Mazzetti and Matt ApuzzoNew York Times, February 14, 2017 On Feb. 14, 2017 – just one day after Flynn resigned – the New York Times fanned the flames of the growing Trump-Russia inferno. "Phone records and intercepted calls show that members of Donald J. Trump's 2016 presidential campaign and other Trump associates had repeated contacts with senior Russian intelligence officials in the year before the election, according to four current and former American officials," the Times reported. The story, written by three members of the paper's Pulitzer Prize-winning team, Michael S. Schmidt, Mark Mazzetti and Matt Apuzzo, also suggested that these suspicious "repeated contacts" were the basis for the FBI's investigation of the Trump campaign's potential conspiracy with Russia: "American law enforcement and intelligence agencies intercepted the communications around the same time they were discovering evidence that Russia was trying to disrupt the presidential election by hacking into the Democratic National Committee, three of the officials said. The intelligence agencies then sought to learn whether the Trump campaign was colluding with the Russians on the hacking or other efforts to influence the election." The article even threw in a plug for Christopher Steele, who, the Times said, is believed by senior FBI officials to have "a credible track record." The story helped build momentum for the appointment of Special Counsel Mueller, and then quickly unraveled. Four months after the Times' report – and just weeks after Mueller's hiring – FBI Director James Comey testified to Congress about the story, saying that "in the main, it was not true." When the Mueller report was released in April 2019, it contained no evidence of any contacts between Trump associates and Russian intelligence officials, senior or otherwise. And in July 2020, declassified documents showed that Peter Strzok, the top FBI counterintelligence agent who opened the Trump-Russia probe, had privately dismissed the article. The Times reporting, Strzok wrote upon its publication, was "misleading and inaccurate … we are unaware of ANY Trump advisers engaging in conversations with Russian intelligence officials." Comey on Times story: "In the main, it was not true." It's still uncorrected. To date, the Times has appended two minor corrections. The most recent one reads: "An earlier version of a photo caption with this article gave an incorrect middle initial for Paul Manafort. It is J., not D." Rather than address its glaring errors, the Times left the story otherwise intact. When the Strzok notes disputing its claims emerged, the Times responded: "We stand by our reporting." Earlier this year, the Times even claimed vindication. The occasion was an April 15, 2021, press release from the Treasury Department. The Treasury statement alleged that Konstantin Kilimnik, a former aide to Trump's one-time campaign manager, Paul Manafort, is a "known Russian Intelligence Services agent" who "provided the Russian Intelligence Services with sensitive information on polling and campaign strategy" during the 2016 election. Writing that same day, Times reporters Mark Mazzetti and Michael S. Schmidt declared that Treasury's evidence-free press release — coupled with an evidence-free Senate Intelligence claim in August 2020 that Kilimnik is a "Russian intelligence officer" — now "confirm" the Times' report from February 2017. The Treasury announcement did not explain how the department, which conducted no official Russiagate investigation, was prompted to lodge an explosive allegation that a multi-year FBI/Mueller investigation found no evidence for. It also does not name the position Kilimnik allegedly held in Russian intelligence – much less say whether he was a senior official. It also failed to address ample countervailing evidence: that Kilimnik had shared this same, publicly available polling data with Americans; that the FBI still does not deem him a Russian intelligence officer, instead claiming that he has unspecified "ties"; that he had long been a valued State Department source; that he traveled to the U.S. on a civilian Russian passport, not the suspicious diplomatic one Mueller alleged without producing it; and that even the Senate Intelligence Committee was "unable to obtain direct evidence of what Kilimnik did with the polling data and whether that data was shared further."  Wanted in the U.S., Kilimnik shared his civilian (not diplomatic) passport with RCI. Konstantin Kilimnik via RealClearInvestigations In addition, no U.S. government or congressional investigator ever contacted him for questioning, Kilimnik told RCI in an April 2021 interview when he produced images of the civilian passport. To declare victory, Mazzetti and Schmidt not only relied on one sentence of a press release but distorted the claims of their original story. Even if Kilimnik somehow proved to be a Russian intelligence officer, the Times' 2017 story had reported that the Trump campaign had engaged in "intercepted calls" with multiple "senior Russian intelligence officials" – not just one person, and at a "senior" level. To elide that, Mazzetti and Schmidt abandoned the plural Russian "intelligence officials" to spin the Treasury press release as proof that "there had been numerous interactions between the Trump campaign and Russian intelligence during the year before the election." It then returned to the use of the plural to further claim that Treasury's statement is "the strongest evidence to date that Russian spies had penetrated the inner workings of the Trump campaign." RCI sent Mazzetti and Schmidt detailed questions about their February 2017 article and their claim, four years later, that a Senate report and a Treasury press release confirm it. They did not respond. Falsehood No. 3: George Papadopoulos's 'Night of Heavy Drinking' With the Australian Envoy The Times mischaracterized George Papadopoulos's supposed Russiagate-launching barroom chat. AP Photo/Jacquelyn Martin Unlikely Source Propelled Russian Meddling Inquiry By Sharon LaFraniere, Mark Mazzetti and Matt ApuzzoNew York Times, December 30, 2017 By late 2017, the Russiagate saga was engulfing the Trump presidency. The indictments of several figures connected to Trump fueled a media-driven narrative that Mueller was closing in on a Trump-Russia conspiracy. But a roadblock emerged in late October. After a year of evasions, the Hillary Clinton campaign and its law firm Perkins Coie admitted that they had funded the Steele dossier and that a lawyer for the firm, Marc Elias, had commissioned it. The disclosure was forced by House Republicans, led by Rep. Devin Nunes, who had subpoenaed the bank records of Fusion GPS in a bid to identify its secret funder. (Fusion GPS was the opposition-research firm hired by Perkins Coie that in turn hired Steele.) For those wedded to the Trump-Russia collusion narrative, the admission was problematic: After months of anonymous media claims that Steele's dossier was "credible" and even "bearing out," the heralded document was exposed as a paid partisan hit job from Trump's political opponents. If the FBI was found to have relied on the dossier, the Clinton campaign's key role could discredit the entire investigation. Just before the 2017 year-end deadline for 2018 Pulitzer eligibility, the New York Times produced a new origin story for the probe that would temper these concerns and help the newspaper win the prize. The FBI's decision to open the Trump-Russia probe had nothing to do with Steele, the Times claimed. Instead, the instigator was George Papadopoulos, a low-level campaign volunteer indicted by Mueller two months prior. "During a night of heavy drinking at an upscale London bar in May 2016," the Times' piece began, Papadopoulos told an Australian diplomat named Alexander Downer that Russia had "political dirt on Hillary Clinton," including "thousands of emails." Papadopoulos, the Times said, had learned of the Russian scheme the previous month from Joseph Mifsud, a Maltese academic who claimed to be in touch with "high-level Russian officials." Mifsud's claim signaled inside knowledge of Russia's alleged hack of the Democratic National Committee, the Times said, because at that point the "information was not yet public." Alexander Downer: The Australian diplomat's account of his conversation with George Papadopoulos conflicts with the Times' reporting. Twitter/@AlexanderDowner When Downer, via the Australian government, relayed this information to the U.S. in July, the FBI decided to open its Trump-Russia probe, codenamed Crossfire Hurricane, the Times reported. "The [DNC] hacking and the revelation that a member of the Trump campaign may have had inside information about it were driving factors that led the F.B.I. to open an investigation in July 2016 into Russia's attempts to disrupt the election and whether any of President Trump's associates conspired," the Times claimed. The article pointedly asserted that the Steele dossier "was not part of the justification to start a counterintelligence inquiry, American officials said." (In a possible contradiction, it also claims, without specifics, "that the investigation was also propelled by intelligence from other friendly governments, including the British.") Several key aspects of the article have been challenged by the principals involved — leaving aside a key question the Times appears never to have asked: Why would the FBI launch a counterintelligence probe of a presidential campaign based on a barroom conversation involving a volunteer? Moreover, the Times or its sources mischaracterized the barroom conversation, according to both of its participants. Speaking to a Sydney-based newspaper a few months later about the fateful London exchange, Downer said Papadopoulos had never mentioned "dirt" or "thousands of emails" — which the FBI would have linked to the DNC hack. Instead, Downer told The Australian, Papadopoulos "mentioned the Russians might use material that they have on Hillary Clinton in the lead-up to the election, which may be damaging." Contrary to the specificity of the Times' rendering, Downer recalled that Papadopoulos "didn't say what it was." He also said Papadopoulos made no mention of Mifsud, a mysterious figure with rumored ties to Western intelligence who vanished after a cursory FBI interview. A declassified FBI document would later confirm Downer's account of a vague conversation. In May 2020, the Justice Department released the July 31, 2016, FBI electronic communication (EC) that officially opened its Russia investigation. The EC states that Downer had told the U.S. government that Papadopoulos had "suggested the Trump team had received some kind of suggestion from Russia that it could assist" the Trump campaign by anonymously releasing damaging information about Clinton and President Obama. The EC made no mention of any "dirt," "thousands of emails," or Mifsud. It also acknowledged that the nature of the "suggestion" was "unclear" and that the possible Russian help could entail "material acquired publicly," as opposed to hacked emails by the thousands. Another declassified document, the December 2017 testimony from Andrew McCabe — the former FBI deputy director who helped launch and oversee the Russia probe — also undermined the Times' premise. Asked why the FBI never sought a surveillance warrant on the Trump volunteer who supposedly sparked the investigation, McCabe replied that "Papadopoulos' comment didn't particularly indicate that he was the person … that was interacting with the Russians." Despite the countervailing claims of Downer, McCabe, and the FBI document that opened the investigation (not to mention the recollections of both Papadopoulos and Downer that they only had one drink, belying the Times claim of "a night of heavy drinking"), the Times has never run a single update or correction. Falsehood No. 4: Russia Launched a Sweeping Interference Campaign That Posed a ‘National Security Threat' Social media posts from Russia's effort to "assault American democracy," as the Times put it. HPSCI Minority Doubting the intelligence, Trump pursues Putin and leaves a Russian threat unchecked By Greg Miller, Greg Jaffe and Philip RuckerWashington Post, December 14, 2017 To Sway Vote, Russia Used Army of Fake Americans By Scott ShaneNew York Times, September 8, 2017 As the Pulitzer-winning media outlets relied on anonymous intelligence officials to fuel innuendo about Trump-Russia collusion, they turned to these same sources to imply that a compromised president was unwilling to confront the existential threat of "Russian interference." "Nearly a year into his presidency," a Pulitzer-winning December 2017 Washington Post story declared, "Trump continues to reject the evidence that Russia waged an assault on a pillar of American democracy and supported his run for the White House." As a result, Trump has "impaired the government's response to a national security threat." The Post's article was sourced to "more than 50 current and former U.S. officials" including former CIA Director Michael Hayden, who "described the Russian interference as the political equivalent of the Sept. 11, 2001, attacks." Another Pulitzer-winning story, written by Scott Shane of the New York Times two months earlier, offered a revealing window into the merits of the Russian interference allegations, and the appropriateness of equating them to attacks like 9/11. "To Sway Vote, Russia Used Army of Fake Americans," the Times' headline blared. Aside from the Pulitzer board, Shane's article also impressed the New York Times' editors, who proclaimed in a follow-up editorial that their colleague's "startling investigation" had revealed "further evidence of what amounted to unprecedented foreign invasion of American democracy." But from the details in Shane's article, it is difficult to see why anonymous U.S. intelligence officials, Pulitzer judges, and Times editors saw the alleged Russian "cyberarmy" as such a seismic danger. Melvin Redick, suspected Russian operator. The proof? Articles "reflecting a pro-Russian worldview," the Times reported. New York Times Shane's piece opened by describing a June 2016 Facebook post by an account user named Melvin Redick, who promoted the website DC Leaks, alleged by the U.S. to be a Russian intelligence cutout. Redick's posts, Shane writes, were "among the first public signs" of Russia's "cyberarmy of counterfeit Facebook and Twitter accounts" that turned the platforms into "engines of deception and propaganda." To Clint Watts, a former FBI agent turned MSNBC commentator, Russia's infiltration of Facebook and Twitter was so dangerous that social media, he said, is now afflicted by a "bot cancer." But these explosive conclusions, Shane's own piece later acknowledged, were undermined by a lack of evidence. The online users who manipulated social media, Shane quietly notes near the bottom, were in fact only "suspected Russian operators" [emphasis added]. Shane's uncertainty extends to Melvin Redick, the alleged Russian bot who begins the story. Redick is one of several identified accounts that "appeared to be Russian creations," Shane concedes. The only proof tying Redick to Russia? "His posts were never personal, just news articles reflecting a pro-Russian worldview." Robert Mueller's final report two years later also tried to raise alarm about what he called a "sweeping and systematic" Russian interference campaign. But as with the Pulitzer-winning outlets before him, the contents of his report failed to support the headline assertion. The Russian troll farm blamed for a sweeping social media campaign to install Trump spent about $46,000 on pre-election posts that were juvenile, barely about the election, and mostly appeared during the primaries. After suggesting that the troll farm was tied to the Kremlin, the Mueller team was forced to walk back that innuendo in court, and later dropped the case altogether. The other main claim regarding Russian interference – that the GRU (Russia's foreign intelligence agency) hacked the DNC's email servers and gave the material to Wikileaks – was quietly undermined by Mueller's qualified language and key evidentiary gaps, as RCI reported in 2019. The Russian hacking claim suffered an additional setback in May 2020, when testimony from the CEO of CrowdStrike — the Clinton-contracted firm that was the first to publicly accuse Russia of infiltrating the DNC — was declassified. Speaking to the House Intelligence Committee in December 2017, CrowdStrike's Shawn Henry disclosed that his company "did not have concrete evidence" that alleged Russian hackers had stolen any data from the servers. Despite its once exhaustive and alarmist interest in the operations of Russia's cyber army, neither the Times nor the Post has ever reported Henry's explosive admission. This includes Pulitzer-winning Post national security reporter Ellen Nakashima, who effectively kicked off the Russiagate saga by breaking the news on CrowdStrike's Russian hacking allegation in June 2016. Other than Henry, Nakashima's main source was Michael Sussmann – the Clinton campaign attorney recently indicted for lying to the FBI. Falsehood No. 5: The Justice Department Pulled Its Punches on Trump Ex-Justice official Rod Rosenstein was blamed for handcuffing Mueller -- a charge much doubted. AP Photo/Evan Vucci Justice Dept. Never Fully Examined Trump's Ties to Russia, Ex-Officials Say By Michael S. SchmidtNew York Times, Aug. 30, 2020 (Updated June 9, 2021) When Mueller ended his investigation in 2019 without charging Trump or any other associate for conspiring with Russia, a collusion-obsessed media formulated more conspiracy theories to explain away this unwelcome ending. First came the belief that Attorney General William Barr had forced Mueller to shut down, misrepresented his final report, and hid the smoking-gun evidence behind redactions. When Mueller failed to support any of these allegations in his July 2019 congressional testimony, a new culprit was needed. One year later, the New York Times found its fall guy: Mueller's overseer, former Deputy Attorney General Rod Rosenstein, had handcuffed the special counsel. "The Justice Department secretly took steps in 2017 to narrow the investigation into Russian election interference and any links to the Trump campaign, according to former law enforcement officials, keeping investigators from completing an examination of President Trump's decades-long personal and business ties to Russia," Michael Schmidt reported on Aug. 30, 2020. Rosenstein, Schmidt said, "curtailed the investigation without telling the bureau, all but ensuring it would go nowhere" and preventing the FBI from "completing an inquiry into whether the president's personal and financial links to Russia posed a national security threat." To buttress his case, Schmidt cited the Democrats' leading collusion advocate, Rep. Adam Schiff, who feared that "that the F.B.I. Counterintelligence Division has not investigated counterintelligence risks arising from President Trump's foreign financial ties." But as Schmidt's article tacitly acknowledged, that outcome did not come from Rosenstein but the Mueller team itself. After Rosenstein appointed Mueller, Schmidt reported, members of the special counsel's team "held early discussions led by the agent Peter Strzok about a counterintelligence investigation of the president." But these "efforts fizzled," Schmidt added, when Strzok "was removed from the inquiry three months later for sending text messages disparaging Mr. Trump." If Rosenstein had indeed "curtailed" a counterintelligence investigation by Mueller's team, why did the special counsel staffers discuss it, and why did it only "fizzle" upon Strzok's exit three months later? Strzok himself disputed the premise of Schmidt's article. "I didn't feel such a limitation," Strzok told the Atlantic. "When I discussed this with Mueller and others, it was agreed that FBI personnel attached to the Special Counsel's Office would do the counterintelligence work, which necessarily included the president." The only problem, Strzok added, was that by "the time I left the team, we hadn't solved this problem of who and how to conduct all of the counterintelligence work." Strzok's "worry," he added, was that the counterintelligence angle "wasn't ever effectively done" – not that it was ever curtailed. Another key Mueller team member, lead prosecutor Andrew Weissmann, also rejected Schmidt's claim. NYT story today is wrong re alleged secret DOJ order prohibiting a counterintelligence investigation by Mueller, “without telling the bureau.” Dozens of FBI agents/analysts were embedded in Special Counsel's Office and we were never told to keep anything from them. 1 of 2 — Andrew Weissmann (@AWeissmann_) August 31, 2020 Also erroneous is NYT claim "Rosenstein concluded the F.B.I. lacked sufficient reason to conduct an investigation into the president’s links to a foreign adversary.” See DOJ Special Counsel Appointment Order, para. (b)(i). 2 of 2 — Andrew Weissmann (@AWeissmann_) August 31, 2020 Rosenstein's May 2017 scope memo, which established the parameters of Mueller's investigation, indeed contained no such limitations. It broadly tasked Mueller to examine "any links and/or co-ordination" between the Russian government and anyone associated with the Trump campaign, as well as – even more expansively – "any matters that arose or may arise directly from that investigation." In his July 2019 congressional appearance, Mueller had multiple opportunities to reveal that his probe had been impeded or narrowed. Asked by Rep. Doug Collins (R-Ga.) whether "at any time in the investigation, your investigation was curtailed or stopped or hindered," Mueller replied "No." When Rep. Raja Krishnamoorthi (D-Ill.) tried to lead Mueller into agreeing that he "of course … did not obtain the president's tax returns, which could otherwise show foreign financial sources," Mueller did not oblige. "I'm not going to speak to that," Mueller replied. With no curtailing or interference in the probe, perhaps Mueller never turned up any Russia-tied counterintelligence or financial concerns about Trump because there was simply none to find. For a media establishment that had spent years promoting a Trump-Russia collusion narrative and sidelining countervailing facts, that was indeed a tough outcome to fathom. But it's no time for excuses or false claims of vindication: The tepid accounting spurred by the Steele dossier's collapse should be just the start of a far more exhaustive reckoning. Broadly misleading journalism that plunged an American presidency into turmoil demands much more than piecemeal corrections. Tyler Durden Wed, 11/24/2021 - 17:40.....»»

Waypoints On The Road To Currency Destruction (And How To Avoid It) Authored by Alasdair Macleod via GoldMoney.com, The few economists who recognise classical human subjectivity see the dangers of a looming currency collapse. It can easily be avoided by halting currency expansion and cutting government spending so that their budgets balance. No democratic government nor any of its agencies have the required mandate or conviction to act, so fiat currencies face ruin. These are some waypoints to look for on the road to their destruction: Monetary policy will be challenged by rising prices and stalling economies. Central banks will almost certainly err towards accelerating inflationism in a bid to support economic growth. The inevitability of rising bond yields and falling equity markets that follows can only be alleviated by increasing QE, not tapering it. Look for official support for financial markets by increased QE. Central banks will then have to choose between crashing their economies and protecting their currencies or letting their currencies slide. The currency is likely to be deemed less important, until it is too late. Realising that it is currency going down rather than prices rising, the public reject the currency entirely and it rapidly becomes valueless. Once the process starts there is no hope for the currency. But before we consider these events, we must address the broader point about what the alternative safety to a fiat collapse is to be: cryptocurrencies led by bitcoin, or metallic money to which people have always returned when state fiat money has failed in the past. Introduction When expected events begin to unfold, they can be marked by waypoints. These include predictable government responses, and the confused statements of analysts who are unfamiliar with the circumstances. We see this today in the early stages of an inflation that threatens to become a terminal cancer for fiat currencies. Harder to judge is the human element, the pace at which realisation dawns and the public’s consequential response to the discovery that their currency is being debauched and their wealth being transferred stealthily to the state. But history can provide some guidance. If we consider the evidence from Austria before the First World War, we see that the economic prophets who truly understood economics became thoroughly despondent long before the First World War and the currency collapse of the early 1920s. Carl Menger, the father of subjectivity in marginal price theory became depressed by what he foresaw. As von Mises in his Memoirs wrote of Menger’s discouragement and premature silence, “His keen intellect had recognized in which direction Austria, Europe, and the world were pointed; he saw this greatest and highest of all civilizations rushing toward the abyss”. Mises then recorded a conversation his great-uncle had had with Menger’s brother, which referred to comments made by Menger at about the turn of the century, when he reportedly said, “The policies being pursued by the European powers will lead to a terrible war ending with gruesome revolutions, the extinction of European culture and destruction of prosperity for people of all nations. In anticipation of these inevitable events, all that can be recommended are investments in gold hoards and the securities of the two Scandinavian countries” [presumably being on the periphery of European events]. The few economists who have studied American and European monetary and economic policies dispassionately and how they have evolved since the Nixon shock will resonate with Menger’s concerns. Mises also noted that this “pessimism consumed all sharp-sighted Austrians”. Menger’s pupil and friend, Crown Prince Rudolf, successor to the Austro-Hungarian throne took his own life and that of his lover in 1889 because of his despair over the future of his empire and that of European civilisation, and not because of his love affair. As with all historical comparisons, today’s decline in American hegemony is only a most generalised repetition of the process by which an empire dies. But from this distance of over a century from events in Vienna it is easy to forget how important the Hapsburgs were and that before Napoleon the Austro-Hungarian empire had been the largest and most important of the European empires. But putting aside the obvious differences between then and now, today we see little or no evidence of cutting-edge economists sharing the despair of the early Austrians. There is a good reason why this despair is absent today. Instead of economists independent from the state, universities, and professorial sponsorship, the entire economic profession is paid for by governments and their departments to promote statist intervention in the economic affairs of humanity. Feeding off statistics, mathematics is every policy-makers and investor’s religion. But economics is not a natural science governed by mathematics, like physics or chemistry, but a social science governed by markets; markets being forums where humans interact to satisfy their needs and wants, to exchange their production for consumption, and to manage their savings and capital. As Hayek said of his friend Keynes, Keynes was a mathematician and not an economist. Today we can confidently state that students are taught mathematics and not economics. Economists are no longer economists, but statisticians and mathematicians devoid of the a priori reasoning that was central to the science before Keynes. With the entire profession taught to believe in statist intervention, perhaps we should not be surprised that economists are not ringing the alarm bells warning of the consequences of decades of state manipulation of markets and of the catastrophe that evolves from denying there is any difference between money and currency, that is gold or silver, and infinitely expandable promissory notes and credit. Even many modern “Austrians” seem oblivious to the danger of a fiat money collapse, let alone the dire economic consequences. Among them there is even an antipathy against metallic money, which suggests they have not fully absorbed the theories of money and credit so lucidly explained by their earlier mentors. Hopefully, the decline of America and its dollar hegemony we will not result in military conflict, let alone one on the scale of the 1914-18 European catastrophe. But that might be a vain hope. In today’s America we see a hegemon struggling to get to terms with its decline and the reality that the rise of Asia cannot be stopped. But what concerns us here is the more obvious and immediate problem of its currency, dollars backed by nothing more than the faith and credit of the declining US Government. It is not too late to avoid a complete collapse of the dollar-led global currency regime, but there is no sign that the measures to avoid it will be taken. And with the exclusive dominance of mathematical economists: neo-Keynesians, monetarists, and modern monetary theorists alike, there is hardly anyone, like Menger, Mises, and the other Austrian economists who, before the First World War foresaw the economic and monetary consequences of unfettered statism and inflationary financing. Bitcoin — the canary in the currency mine We find ourselves not being warned of potential inflationary dangers by the state-educated pseudo-economists but by a motley crowd of geeks and speculators instead, who have grasped the relative price effect from different rates of currency issuance. Bitcoin’s quantity is capped while those of fiat currencies are not. All you need to exploit this simple fact is believe and convince yourself and others that bitcoin is the replacement currency of tomorrow for the comparison between bitcoin and state fiat to appear valid. This was certainly the story being promoted by crypto enthusiasts from shortly after bitcoin’s first trade until the end of last year. But they have become increasingly convinced that the future for bitcoin is not so much as a currency (after all, while its price in dollars is rising it is in no one’s interest to use it as a medium for exchanging goods), but simply that, like a stock index on steroids, it is the inflation hedge par excellence. And for fear of missing out, even investing institutions run by custodians of other peoples’ money are now piling in. But an index based on equities has the fundamental prop under it of being comprised of stocks the objective of which is to earn money for shareholders by selling goods and services for profit. With bitcoin there are no underlying earnings and nothing which is inflation-linked. In that sense it is a chimera. An argument has therefore developed, with investors and speculators buying bitcoin only because the relative rate of issue relative to fiat currencies is capped, which is expected to drive the price still higher as governments continue to print their currencies. The underlying rationale, that bitcoin is a replacement currency for state fiat currencies has been disproved and I have little more to add in this respect. It cannot be used for economic calculation, because for a borrower there is uncertainty of repayment value. Nor does bitcoin as a rival to state currencies hold water because no central bank will permit it to act as such. This is one reason why they are heading private cryptocurrencies off at the pass by developing their own, state-issued, and state-controlled digital currencies which can be used for economic calculation. Not only has the argument for ever rising bitcoin prices become its sole support, but the underlying rationale, that cryptocurrencies such as bitcoin qualify as a medium for transactions and will be permitted to replace state-issued fiat currencies cannot apply. By identifying relative rates of currency issue as a valuation factor the tech-savvy millennial generation has understood a partial truism. The other part of which they appear not to be fully aware is that the effect of monetary inflation is to undermine a currency’s purchasing power. It is a separate argument from one based solely on relative rates of currency issue. However, having half the story understood at least is an advance from not comprehending any of it, and when further rises in prices for goods become widely expected, as they appear to be beginning to today, crypto fans are likely to learn the consequences of monetary inflation earlier than their non-tech predecessors, and perhaps even before state-educated economists as well. For now, investors are being enticed by nothing other than the promise of riches to buy bitcoin as an inflation hedge, being disappointed by gold’s non-performance. In a recent quote in the UK’s Daily Telegraph a Morgan Stanley analyst stated just that: “We believe the perception of bitcoin as a better inflation hedge than gold is the main reason for the current upswing… triggering a shift away from gold [funds] into bitcoin funds since September”. But without the prop of being a credible form of replacement money the only reason to buy bitcoin is that circular argument: it should be bought because it is being bought. Furthermore, buying bitcoin funds dissipates potential bitcoin demand, because for a bitcoin fund to qualify as a regulated investment, obtaining regulatory permission is easiest when a fund deals mostly or wholly in contracts on a regulated futures exchange instead of the underlying unregulated bitcoin. In other words, much of the demand for bitcoin is being side-lined into paper versions rather than for bitcoin itself. Bubbles based on pure speculation always fail. That is not to say that speculative flows won’t drive bitcoin’s price higher still; as a possibility it seems highly likely. But that is for speculators, not those who seek protection from evolving economic and monetary events. Attention should be paid to Menger’s reported words 120 years ago, quoted above, that “In anticipation of these inevitable events, all that can be recommended are investments in gold hoards and the securities of the two Scandinavian countries” — except the securities of the two Scandinavian countries offer no escape today. That being the case, the price of gold measured in bitcoin would appear to present a remarkable opportunity for lucky holders of bitcoin and similar private-sector cryptocurrencies. This is shown in Figure 1 below. Since April 2015, the ratio of gold to bitcoin prices has fallen from over 5 to 0.03, a decline of over 99%. We have established why bitcoin has advanced: it is now due solely to the madness of an investing crowd, given that it is apparent that it will have no monetary role in the future. Market participants have either forgotten about or turned their backs against the metallic monies of millennia which have always returned as circulating media when state-issued fiat currencies fail. Why gold is under-owned and unappreciated Bitcoin is just part of this story: the other is the central banks’ resistance to rivalry to their fiat currencies from sound money. When US citizens were banned from owning gold coin, gold bullion, and gold certificates by executive order in 1933, the US Government’s desire to escape the discipline of gold as money became public. The resetting of international currency arrangements at Bretton Woods replaced gold with the dollar as the reserve currency with convertibility into gold limited to central banks and certain post-war supranational organisations. Even that failed, leading to the Bretton Woods agreement being suspended by President Nixon in 1971. Led by the US Fed, ever since the Nixon shock central banks have run a propaganda campaign to convince their private sectors that gold’s historic role as the money “of last resort” had been made redundant through the magic of monetary progress. That propaganda campaign is now fifty years old and encompasses the entire working lives of employees in all financial sectors. The dollar myth as the ultimate form of money is now fully institutionalised. In parallel with statist propaganda there has been a fundamental reform of the financial system to permit the development of various forms of derivatives. While derivatives previously existed in limited quantities, their massive expansion since the mid-eighties big-bang and the repeal of the Glass-Steagall Act created the means to absorb speculative demand for all commodities, including metallic money. According to the Bank for International Settlements, outstanding notional amounts of gold OTC derivatives at the end of last year stood at $834bn, to which must be added derivatives on regulated markets totalling a further $100bn. Together they are the equivalent together of over 15,000 tonnes of gold. There is little doubt that, like bank credit, the financial system’s ability to create paper gold out of thin air has had a profound effect on the price. Backing this inflation of derivative paper has been the expansion of bank and shadow bank credit. That is now coming to an end, with the implementation of the latest phase of Basel 3 banking regulations. Basel 3 and the net stable funding ratio If you Google it, you find that Basel 3 is an internationally agreed set of measures developed by the Basel Committee on Banking Supervision in response to the financial crisis of 2007-09. It was a crisis centred on derivatives, which highlighted the inadequacies of minimum capital requirements, banking supervision and market discipline, the three pillars of banking regulation. Basel 3 is gradually being introduced, but the regulations which concern gold and silver derivatives are what specifically concern us. Curbing balance sheet risk from inappropriate funding of precious metal derivative positions has already been introduced in Europe, Switzerland, and the US with the introduction of the net stable funding ratio. The last major financial jurisdiction to be affected is the UK, which introduces appropriate regulations from the first trading day of 1922 — in only nine weeks’ time. Put briefly, a bank will no longer be able to run unrestricted derivative assets and liabilities without them being tied together. In other words, if a bank has a derivative as an asset on its balance sheet, it must relate specifically to and match a liability for netting purposes and be otherwise unencumbered if a balance sheet funding penalty is to be avoided. If a bank owns unencumbered physical gold as an asset, it can match that against a customer’s unallocated account without a funding penalty, if it has successfully sought and obtained regulatory permission to do so. Two consequences follow. The first is that a bullion bank can only run an uneven book if it is prepared to accept a funding penalty through the application of the net stable funding ratio.[iii]Therefore, liquidity will almost certainly be withdrawn from futures and forwards markets, at least because banks want to appear fully compliant with the regulations. And the second is that most of the BIS gold derivative number of $834bn referred to above reflects bullion banks liabilities to their gold deposit accounts. By the year-end bullion banks will want to remove them, and the only way this can be achieved is by paying off customer gold accounts in fiat currency. There could be thousands of tonnes equivalent of paper gold to reconcile in this way, leaving gold account depositors to either abandon their gold exposure entirely or to buy physical replacements in the market. And while the gaff is being blown on gold forwards and futures, reconciling central bank swaps and leases could also emerge as a problem. In short, the factors that have suppressed the gold price since the early 1970s are not only coming to an end but are being reversed. The liquidation of paper gold threatens a gold liquidity crisis, which in the past would have been resolved by making bullion available through central bank gold swaps. But with central banks already owed bullion by the commercial banks and increasingly concerned about monetary inflation, this facility may be restricted. For the leading central banks, the introduction of Basel 3’s net stable funding ratio therefore comes at a difficult time. They are already fighting to convince their markets that inflation is only a transient price effect and are beginning to reluctantly admit it is more intractable than they thought. The last thing they need is for the gold price to be forced higher by their own regulations, adding to fears of yet higher inflation to come. But for individuals seeking to escape a fiat money catastrophe it appears that the ratio of gold to bitcoin is at an extreme of overvaluation for bitcoin and an extreme undervaluation for gold. The next waypoints in understanding inflation Because bitcoin has introduced the concept of relative rates of issue for currencies, the masses of the millennial generations will be alerted to the debasement of fiat currencies sooner than they would otherwise have been. We are less interested in how this is reflected in cryptocurrency prices than how this knowledge changes relations between consumers and state currencies. Statist economists and monetary policy makers at the major central banks insist that higher prices for consumer goods are being driven by a combination of increased spending, which was stored up during covid lockdowns, and logistics disruption. To this can be added labour problems, with acute shortages in certain industry sectors and absenteeism due to continuing covid infections. Furthermore, energy and other input costs for businesses have been rising rapidly. Monetary policy makers are aware that a wider consumer panic over rising prices must be avoided. They understand that continuing reports of product shortages will risk encouraging consumer stockpiling, driving consumer prices even higher. They will fear that interest rates would have to be increased significantly to bring price inflation back under control. But growth in the major economies appears to be stalling, which in the Keynesian playbook calls for lower interest rates and monetary stimulation instead. This leads us to... Waypoint 1. Commentary in the main-stream media has yet to address this dilemma. It is to be expected at any time. Following our first waypoint, we can assume that interest rates will be forced to rise by markets beginning to discount further losses of currency purchasing power for which interest compensation is demanded. That will inevitably terminate the bull market in equities because it undermines bond prices, pushing up yields and disrupting relative valuations. Figure 2 shows that this process has probably started, though markets are not yet discounting a rise in bond yields beyond a minor amount. The technical message from this chart confirms that the 10-year UST yield is set to go significantly higher, affecting government borrowing adversely through rising interest costs. And when the bear market in these bonds becomes more obvious to investors and foreign holders of them alike, funding the government deficit will become much more difficult. The scale of the rise in fixed interest yields is likely to take market participants and policy planners alike by surprise. The only way in which monetary policy planners can attempt to control rising bond yields and to stop equities sliding into a bear market is to increase the pace of currency creation, particularly through enhanced QE. But for now, the Fed’s stated intention is to taper QE, not increase it. This leads us to... Waypoint 2. No anticipation of this dilemma in the media or independent commentary has yet been detected. Look out for it. In the run up to the northern hemisphere winter and the Christmas shopping season, energy prices and fuel costs are set to rise further. There is no sign of product shortages being resolved. The danger is that with continuing product shortages, consumers will push their purchases of goods not immediately needed even further into the future in case they become unavailable. This will drive consumer prices even higher, creating expectations of yet higher interest rates in financial markets. The Fed will have a straightforward choice: resist market pressures for higher interest rates to save financial markets, stave off insolvencies by over-leveraged borrowers and minimise government funding costs; or protect the dollar by raising the funds rate sufficiently to take all expectation of higher rates out of the market and ignore the financial carnage. This will be next... Waypoint 3. No anticipation of this dilemma in the media or independent commentary has yet been detected. There is a specific danger developing from consumer demand leading to a general stockpiling goods. When the process goes beyond a certain point the consequences of consumers disposing of their currency and credit in favour of goods become apparent. Currency no longer works as the objective value in a transaction, this role being switched to goods, because people begin to buy goods just to get rid of currency. When that process starts in earnest, the fate of the currency is sealed. A hundred years ago this was called the crack-up boom, the final abandonment of currency. Waypoint 4. No anticipation of the final nails in the fiat currency coffin is currently anticipated. When it is, the fate of the currency will have already been sealed. Summary and conclusions Those of us not under the direct management of the US monetary policies will not escape the consequences. All western central banks accept the dollar as their reserve currency and not metallic money, so events affecting the dollar affect all the other fiat currencies. Furthermore, the other major central banks led by the Bank of Japan, European Central Bank, and the Bank of England are pursuing similarly inflationary monetary policies. Central bank groupthink is concreted into global monetary policies. Without a change in their mandate the end of modern currencies is only a matter of time — and a shortening one at that. The dying days of fiat are foreshadowed by the speculative fervour in bitcoin and other leading cryptocurrencies. A new millennial tech-savvy class of investors has got at least half the message, that fiat currency quantities are being inflated. That a significant element of the population has grasped this much about currencies early challenges the long-held wisdom that not one in a million understands money, which allows governments to oversee a limitless expansion of currency and credit for significant periods of time. Therefore, the danger to state inflationism is that significant numbers will act sooner to avoid currency depreciation by dumping it in favour of goods. It is a process that once started is impossible to stop. While the establishment appears vaguely aware of this danger, it lacks the theoretical knowledge to deal with it. Ninety years of denying classical economics in favour of Keynesianism and other statist monetary theories are too embedded in the official mind. And in the absence of understanding the destructive forces of inflationism, prescient individuals seeking protection for their families, close friends and themselves have no option but to reduce their dependency on fiat currencies and all ephemeral financial assets tied to them. These include savings deposits and “stores of wealth”, particularly fixed-interest bonds and equities. The fashionable alternative is distributed ledger cryptocurrencies which are beyond the interference of the state, exemplified by the rise and rise of bitcoin. But this article points out that this has now become dominated by speculation, so much so that in their ignorance of catallactics investors are discarding metallic money in favour of bitcoin. This is a mistake. There are sound reasons why metallic money, gold and silver, have always been money used as a medium of exchange. And as Figure 1 in this article illustrates, relative to bitcoin gold is now less than 1% of its value in 2016. Bitcoin is the bubble; gold has become the anti-bubble. The systematic suppression of gold in favour of the dollar as the world’s reserve currency is now coming to an end. The fact that westerners hardly own any bullion as part of their savings is a mistake they will rue, if, as seems inevitable, current monetary and economic policies persist. Tyler Durden Fri, 10/29/2021 - 22:00.....»»

Kerrisdale Capital is short shares of Camber Energy Inc (NYSEAMERICAN:CEI). Camber is a defunct oil producer that has failed to file financial statements with the SEC since September 2020, is in danger of having its stock delisted next month, and just fired its accounting firm in September. Its only real asset is a 73% stake […] Kerrisdale Capital is short shares of Camber Energy Inc (NYSEAMERICAN:CEI). Camber is a defunct oil producer that has failed to file financial statements with the SEC since September 2020, is in danger of having its stock delisted next month, and just fired its accounting firm in September. Its only real asset is a 73% stake in Viking Energy Group Inc (OTCMKTS:VKIN), an OTC-traded company with negative book value and a going-concern warning that recently violated the maximum-leverage covenant on one of its loans. (For a time, it also had a fake CFO – long story.) Nonetheless, Camber’s stock price has increased by 6x over the past month; last week, astonishingly, an average of $1.9 billion worth of Camber shares changed hands every day. if (typeof jQuery == 'undefined') { document.write(''); } .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles .af-body.af-standards input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Henry Singleton Series in PDF Get the entire 4-part series on Henry Singleton in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q2 2021 hedge fund letters, conferences and more Is there any logic to this bizarre frenzy? Camber pumpers have seized upon the notion that the company is now a play on carbon capture and clean energy, citing a license agreement recently entered into by Viking. But the “ESG Clean Energy” technology license is a joke. Not only is it tiny relative to Camber’s market cap (costing only $5 million and granting exclusivity only in Canada), but it has embroiled Camber in the long-running escapades of a western Massachusetts family that once claimed to have created a revolutionary new combustion engine, only to wind up being penalized by the SEC for raising $80 million in unregistered securities offerings, often to unaccredited investors, and spending much of it on themselves. But the most fascinating part of the CEI boondoggle actually has to do with something far more basic: how many shares are there, and why has dilution been spiraling out of control? We believe the market is badly mistaken about Camber’s share count and ignorant of its terrifying capital structure. In fact, we estimate its fully diluted share count is roughly triple the widely reported number, bringing its true, fully diluted market cap, absurdly, to nearly $900 million. Since Camber is delinquent on its financials, investors have failed to fully appreciate the impact of its ongoing issuance of an unusual, highly dilutive class of convertible preferred stock. As a result of this “death spiral” preferred, Camber has already seen its share count increase 50- million-fold from early 2016 to July 2021 – and we believe it isn’t over yet, as preferred holders can and will continue to convert their securities and sell the resulting common shares. Even at the much lower valuation that investors incorrectly think Camber trades for, it’s still overvalued. The core Viking assets are low-quality and dangerously levered, while any near- term benefits from higher commodity prices will be muted by hedges established in 2020. The recent clean-energy license is nearly worthless. It’s ridiculous to have to say this, but Camber isn’t worth $900 million. If it looks like a penny stock, and it acts like a penny stock, it is a penny stock. Camber has been a penny stock before – no more than a month ago, in fact – and we expect that it will be once again. Company Background Founded in 2004, Camber was originally called Lucas Energy Resources. It went public via a reverse merger in 2006 with the plan of “capitaliz[ing] on the increasing availability of opportunistic acquisitions in the energy sector.”1 But after years of bad investments and a nearly 100% decline in its stock price, the company, which renamed itself Camber in 2017, found itself with little economic value left; faced with the prospect of losing its NYSE American listing, it cast about for new acquisitions beginning in early 2019. That’s when Viking entered the picture. Jim Miller, a member of Camber’s board, had served on the board of a micro-cap company called Guardian 8 that was working on “a proprietary new class of enhanced non-lethal weapons”; Guardian 8’s CEO, Steve Cochennet, happened to also be part owner of a Kansas-based company that operated some of Viking’s oil and gas assets and knew that Viking, whose shares traded over the counter, was interested in moving up to a national exchange.2 (In case you’re wondering, under Miller and Cochennet’s watch, Guardian 8’s stock saw its price drop to ~$0; it was delisted in 2019.3) Viking itself also had a checkered past. Previously a shell company, it was repurposed by a corporate lawyer and investment banker named Tom Simeo to create SinoCubate, “an incubator of and investor in privately held companies mainly in P.R. China.” But this business model went nowhere. In 2012, SinoCubate changed its name to Viking Investments but continued to achieve little. In 2014, Simeo brought in James A. Doris, a Canadian lawyer, as a member of the board of directors and then as president and CEO, tasked with executing on Viking’s new strategy of “acquir[ing] income-producing assets throughout North America in various sectors, including energy and real estate.” In a series of transactions, Doris gradually built up a portfolio of oil wells and other energy assets in the United States, relying on large amounts of high-cost debt to get deals done. But Viking has never achieved consistent GAAP profitability; indeed, under Doris’s leadership, from 2015 to the first half of 2021, Viking’s cumulative net income has totaled negative $105 million, and its financial statements warn of “substantial doubt regarding the Company’s ability to continue as a going concern.”4 At first, despite the Guardian 8 crew’s match-making, Camber showed little interest in Viking and pursued another acquisition instead. But, when that deal fell apart, Camber re-engaged with Viking and, in February 2020, announced an all-stock acquisition – effectively a reverse merger in which Viking would end up as the surviving company but transfer some value to incumbent Camber shareholders in exchange for the national listing. For reasons that remain somewhat unclear, this original deal structure was beset with delays, and in December 2020 (after months of insisting that deal closing was just around the corner) Camber announced that it would instead directly purchase a 51% stake in Viking; at the same time, Doris, Viking’s CEO, officially took over Camber as well. Subsequent transactions through July 2021 have brough Camber’s Viking stake up to 69.9 million shares (73% of Viking’s total common shares), in exchange for consideration in the form of a mixture of cash, debt forgiveness,5 and debt assumption, valued in the aggregate by Viking at only $50.7 million: Camber and Viking announced a new merger agreement in February 2021, aiming to take out the remaining Viking shares not owned by Camber and thus fully combine the two companies, but that plan is on hold because Camber has failed to file its last 10-K (as well as two subsequent 10-Qs) and is thus in danger of being delisted unless it catches up by November. Today, then, Camber’s absurd equity valuation rests entirely on its majority stake in a small, unprofitable oil-and-gas roll-up cobbled together by a Canadian lawyer. An Opaque Capital Structure Has Concealed the True Insanity of Camber’s Valuation What actually is Camber’s equity valuation? It sounds like a simple question, and sources like Bloomberg and Yahoo Finance supply what looks like a simple answer: 104.2 million shares outstanding times a $3.09 closing price (as of October 4, 2021) equals a market cap of $322 million – absurd enough, given what Camber owns. But these figures only tell part of the story. We estimate that the correct fully diluted market cap is actually a staggering $882 million, including the impact of both Camber’s unusual, highly dilutive Series C convertible preferred stock and its convertible debt. Because Camber is delinquent on its SEC filings, it’s difficult to assemble an up-to-date picture of its balance sheet and capital structure. The widely used 104.2-million-share figure comes from an 8-K filed in July that states, in part: As of July 9, 2021, the Company had 104,195,295 shares of common stock issued and outstanding. The increase in our outstanding shares of common stock from the date of the Company’s February 23, 2021 increase in authorized shares of common stock (from 25 million shares to 250 million shares), is primarily due to conversions of shares of Series C Preferred Stock of the Company into common stock, and conversion premiums due thereon, which are payable in shares of common stock. This bland language belies the stunning magnitude of the dilution that has already taken place. Indeed, we estimate that, of the 104.2 million common shares outstanding on July 9th, 99.7% were created via the conversion of Series C preferred in the past few years – and there’s more where that came from. The terms of Camber’s preferreds are complex but boil down to the following: they accrue non- cash dividends at the sky-high rate of 24.95% per year for a notional seven years but can be converted into common shares at any time. The face value of the preferred shares converts into common shares at a fixed conversion price of $162.50 per share, far higher than the current trading price – so far, so good (from a Camber-shareholder perspective). The problem is the additional “conversion premium,” which is equal to the full seven years’ worth of dividends, or 7 x 24.95% ≈ 175% of face value, all at once, and is converted at a far lower conversion price that “will never be above approximately $0.3985 per share…regardless of the actual trading price of Camber’s common stock” (but could in principle go lower if the price crashes to new lows).6 The upshot of all this is that one share of Series C preferred is now convertible into ~43,885 shares of common stock.7 Historically, all of Camber’s Series C preferred was held by one investor: Discover Growth Fund. The terms of the preferred agreement cap Discover’s ownership of Camber’s common shares at 9.99% of the total, but nothing stops Discover from converting preferred into common up to that cap, selling off the resulting shares, converting additional preferred shares into common up to the cap, selling those common shares, etc., as Camber has stated explicitly (and as Discover has in fact done over the years) (emphasis added): Although Discover may not receive shares of common stock exceeding 9.99% of its outstanding shares of common stock immediately after affecting such conversion, this restriction does not prevent Discover from receiving shares up to the 9.99% limit, selling those shares, and then receiving the rest of the shares it is due, in one or more tranches, while still staying below the 9.99% limit. If Discover chooses to do this, it will cause substantial dilution to the then holders of its common stock. Additionally, the continued sale of shares issuable upon successive conversions will likely create significant downward pressure on the price of its common stock as Discover sells material amounts of Camber’s common stock over time and/or in a short period of time. This could place further downward pressure on the price of its common stock and in turn result in Discover receiving an ever increasing number of additional shares of common stock upon conversion of its securities, and adjustments thereof, which in turn will likely lead to further dilution, reductions in the exercise/conversion price of Discover’s securities and even more downward pressure on its common stock, which could lead to its common stock becoming devalued or worthless.8 In 2017, soon after Discover began to convert some of its first preferred shares, Camber’s then- management claimed to be shocked by the results and sued Discover for fraud, arguing that “[t]he catastrophic effect of the Discover Documents [i.e. the terms of the preferred] is so devastating that the Discover Documents are prima facie unconscionable” because “they will permit Discover to strip Camber of its value and business well beyond the simple repayment of its debt.” Camber called the documents “extremely difficult to understand” and insisted that they “were drafted in such a way as to obscure the true terms of such documents and the total number of shares of common stock that could be issuable by Camber thereunder. … Only after signing the documents did Camber and [its then CEO]…learn that Discover’s reading of the Discover Documents was that the terms that applied were the strictest and most Camber unfriendly interpretation possible.”9 But the judge wasn’t impressed, suggesting that it was Camber’s own fault for failing to read the fine print, and the case was dismissed. With no better options, Camber then repeatedly came crawling back to Discover for additional tranches of funding via preferred sales. While the recent spike in common share count to 104.2 million as of early July includes some of the impact of ongoing preferred conversion, we believe it fails to include all of it. In addition to Discover’s 2,093 shares of Series C preferred held as of February 2021, Camber issued additional shares to EMC Capital Partners, a creditor of Viking’s, as part of a January agreement to reduce Viking’s debt.10 Then, in July, Camber issued another block of preferred shares – also to Discover, we believe – to help fund Viking’s recent deals.11 We speculate that many of these preferred shares have already been converted into common shares that have subsequently been sold into a frenzied retail bid. Beyond the Series C preferred, there is one additional source of potential dilution: debt issued to Discover in three transactions from December 2020 to April 2021, totaling $20.5 million in face value, and amended in July to be convertible at a fixed price of $1.25 per share.12 We summarize our estimates of all of these sources of potential common share issuance below: Might we be wrong about this math? Absolutely – the mechanics of the Series C preferreds are so convoluted that prior Camber management sued Discover complaining that the legal documents governing them “were drafted in such a way as to obscure the true terms of such documents and the total number of shares of common stock that could be issuable by Camber thereunder.” Camber management could easily set the record straight by revealing the most up- to-date share count via an SEC filing, along with any additional clarifications about the expected future share count upon conversion of all outstanding convertible securities. But we're confident that the current share count reported in financial databases like Bloomberg and Yahoo Finance significantly understates the true, fully diluted figure. An additional indication that Camber expects massive future dilution relates to the total authorized shares of common stock under its official articles of incorporation. It was only a few months ago, in February, that Camber had to hold a special shareholder meeting to increase its maximum authorized share count from 25 million to 250 million in order to accommodate all the shares to be issued because of preferred conversions. But under Camber’s July agreement to sell additional preferred shares to Discover, the company (emphasis added) agreed to include proposals relating to the approval of the July 2021 Purchase Agreement and the issuance of the shares of common stock upon conversion of the Series C Preferred Stock sold pursuant to the July 2021 Purchase Agreement, as well as an increase in authorized common stock to fulfill our obligations to issue such shares, at the Company’s next Annual Meeting, the meeting held to approve the Merger or a separate meeting in the event the Merger is terminated prior to shareholder approval, and to use commercially reasonable best efforts to obtain such approvals as soon as possible and in any event prior to January 1, 2022.13 In other words, Camber can already see that 250 million shares will soon not be enough, consistent with our estimate of ~285 million fully diluted shares above. In sum, Camber’s true overvaluation is dramatically worse than it initially appears because of the massive number of common shares that its preferred and other securities can convert into, leading to a fully diluted share count that is nearly triple the figure found in standard information sources used by investors. This enormous latent dilution, impossible to discern without combing through numerous scattered filings made by a company with no up-to-date financial statements in the public domain, means that the market is – perhaps out of ignorance – attributing close to one billion dollars of value to a very weak business. Camber’s Stake in Viking Has Little Real Value In light of Camber’s gargantuan valuation, it’s worth dwelling on some basic facts about its sole meaningful asset, a 73% stake in Viking Energy. As of 6/30/21: Viking had negative $15 million in shareholder equity/book Its financial statements noted “substantial doubt regarding the Company’s ability to continue as a going ” Of its $101.3 million in outstanding debt (at face value), nearly half (48%) was scheduled to mature and come due over the following 12 months. Viking noted that it “does not currently maintain controls and procedures that are designed to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act are recorded, processed, summarized, and reported within the time periods specified by the Commission’s rules and forms.” Viking’s CEO “has concluded that these [disclosure] controls and procedures are not effective in providing reasonable assurance of compliance.” Viking disclosed that a key subsidiary, Elysium Energy, was “in default of the maximum leverage ratio covenant under the term loan agreement at June 30, 2021”; this covenant caps the entity’s total secured debt to EBITDA at 75 to 1.14 This is hardly a healthy operation. Indeed, even according to Viking’s own black-box estimates, the present value of its total proved reserves of oil and gas, using a 10% discount rate (likely generous given the company’s high debt costs), was $120 million as of 12/31/20,15 while its outstanding debt, as stated above, is $101 million – perhaps implying a sliver of residual economic value to equity holders, but not much. And while some market observers have recently gotten excited about how increases in commodity prices could benefit Camber/Viking, any near-term impact will be blunted by hedges put on by Viking in early 2020, which cover, with respect to its Elysium properties, “60% of the estimated production for 2021 and 50% of the estimated production for the period between January, 2022 to July, 2022. Theses hedges have a floor of $45 and a ceiling ranging from $52.70 to $56.00 for oil, and a floor of $2.00 and a ceiling of $2.425 for natural gas” – cutting into the benefit of any price spikes above those ceiling levels.16 Sharing our dreary view of Viking’s prospects is one of Viking’s own financial advisors, a firm called Scalar, LLC, that Viking hired to prepare a fairness opinion under the original all-stock merger agreement with Camber. Combining Viking’s own internal projections with data on comparable-company valuation multiples, Scalar concluded in October 2020 that Viking’s equity was worth somewhere between $0 and $20 million, depending on the methodology used, with the “purest” methodology – a true, full-blown DCF – yielding the lowest estimate of $0-1 million: Camber’s advisor, Mercer Capital, came to a similar conclusion: its “analysis indicated an implied equity value of Viking of $0 to $34.3 million.”17 It’s inconceivable that a majority stake in this company, deemed potentially worthless by multiple experts and clearly experiencing financial strains, could somehow justify a near-billion-dollar valuation. Instead of dwelling on the unpleasant realities of Viking’s oil and gas business, Camber has drawn investor attention to two recent transactions conducted by Viking with Camber funding: a license agreement with “ESG Clean Energy,” discussed in further detail below, and the acquisition of a 60.3% stake in Simson-Maxwell, described as “a leading manufacturer and supplier of industrial engines, power generation products, services and custom energy solutions.” But Viking paid just $8 million for its Simson-Maxwell shares,18 and the company has just 125 employees; it defies belief to think that this purchase was such a bargain as to make a material dent in Camber’s overvaluation. And what does Simson-Maxwell actually do? One of its key officers, Daryl Kruper (identified as its chairman in Camber’s press release), describes the company a bit less grandly and more concretely on his LinkedIn page: Simson Maxwell is a power systems specialist. The company assembles and sells generator sets, industrial engines, power control systems and switchgear. Simson Maxwell has service and parts facilities in Edmonton, Calgary, Prince George, Vancouver, Nanaimo and Terrace. The company has provided its western Canadian customers with exceptional service for over 70 years. In other words, Simson-Maxwell acts as a sort of distributor/consultant, packaging industrial- strength generators and engines manufactured by companies like GE and Mitsubishi into systems that can provide electrical power, often in remote areas in western Canada; Simson- Maxwell employees then drive around in vans maintaining and repairing these systems. There’s nothing obviously wrong with this business, but it’s small, regional (not just Canada – western Canada specifically), likely driven by an unpredictable flow of new large projects, and unlikely to garner a high standalone valuation. Indeed, buried in one of Viking’s agreements with Simson- Maxwell’s selling shareholders (see p. 23) are clauses giving Viking the right to purchase the rest of the company between July 2024 and July 2026 at a price of at least 8x trailing EBITDA and giving the selling shareholders the right to sell the rest of their shares during the same time frame at a price of at least 7x trailing EBITDA – the kind of multiples associated with sleepy industrial distributors, not fast-growing retail darlings. Since Simon-Maxwell has nothing to do with Viking’s pre-existing assets or (alleged) expertise in oil and gas, and Viking and Camber are hardly flush with cash, why did they make the purchase? We speculate that management is concerned about the combined company’s ability to maintain its listing on the NYSE American. For example, when describing its restruck merger agreement with Viking, Camber noted: Additional closing conditions to the Merger include that in the event the NYSE American determines that the Merger constitutes, or will constitute, a “back-door listing”/“reverse merger”, Camber (and its common stock) is required to qualify for initial listing on the NYSE American, pursuant to the applicable guidance and requirements of the NYSE as of the Effective Time. What does it take to qualify for initial listing on the NYSE American? There are several ways, but three require at least $4 million of positive stockholders’ equity, which Viking, the intended surviving company, doesn’t have today; another requires a market cap of greater than $75 million, which management might (quite reasonably) be concerned about achieving sustainably. That leaves a standard that requires a listed company to have $75 million in assets and revenue. With Viking running at only ~$40 million of annualized revenue, we believe management is attempting to buy up more via acquisition. In fact, if the goal is simply to “buy” GAAP revenue, the most efficient way to do it is by acquiring a stake in a low-margin, slow- growing business – little earnings power, hence a low purchase price, but plenty of revenue. And by buying a majority stake instead of the whole thing, the acquirer can further reduce the capital outlay while still being able to consolidate all of the operation’s revenue under GAAP accounting. Buying 60.3% of Simson-Maxwell seems to fit the bill, but it’s a placeholder, not a real value-creator. Camber’s Partners in the Laughable “ESG Clean Energy” Deal Have a Long History of Broken Promises and Alleged Securities Fraud The “catalyst” most commonly cited by Camber Energy bulls for the recent massive increase in the company’s stock price is an August 24th press release, “Camber Energy Secures Exclusive IP License for Patented Carbon-Capture System,” announcing that the company, via Viking, “entered into an Exclusive Intellectual Property License Agreement with ESG Clean Energy, LLC (‘ESG’) regarding ESG’s patent rights and know-how related to stationary electric power generation, including methods to utilize heat and capture carbon dioxide.” Our research suggests that the “intellectual property” in question amounts to very little: in essence, the concept of collecting the exhaust gases emitted by a natural-gas–fueled electric generator, cooling it down to distill out the water vapor, and isolating the remaining carbon dioxide. But what happens to the carbon dioxide then? The clearest answer ESG Clean Energy has given is that it “can be sold to…cannabis producers”19 to help their plants grow faster, though the vast majority of the carbon dioxide would still end up escaping into the atmosphere over time, and additional greenhouse gases would be generated in compressing and shipping this carbon dioxide to the cannabis producers, likely leading to a net worsening of carbon emissions.20 And what is Viking – which primarily extracts oil and gas from the ground, as opposed to running generators and selling electrical power – supposed to do with this technology anyway? The idea seems to be that the newly acquired Simson-Maxwell business will attempt to sell the “technology” as a value-add to customers who are buying generators in western Canada. Indeed, while Camber’s press-release headline emphasized the “exclusive” nature of the license, the license is only exclusive in Canada plus “up to twenty-five locations in the United States” – making the much vaunted deal even more trivial than it might first appear. Viking paid an upfront royalty of $1.5 million in cash in August, with additional installments of $1.5 and $2 million due by January and April 2022, respectively, for a total of $5 million. In addition, Viking “shall pay to ESG continuing royalties of not more than 15% of the net revenues of Viking generated using the Intellectual Property, with the continuing royalty percentage to be jointly determined by the parties collaboratively based on the parties’ development of realistic cashflow models resulting from initial projects utilizing the Intellectual Property, and with the parties utilizing mediation if they cannot jointly agree to the continuing royalty percentage”21 – a strangely open-ended, perhaps rushed, way of setting a royalty rate. Overall, then, Viking is paying $5 million for roughly 85% of the economics of a technology that might conceivably help “capture” CO2 emitted by electric generators in Canada (and up to 25 locations in the United States!) but then probably just re-emit it again. This is the great advance that has driven Camber to a nearly billion-dollar market cap. It’s with good reason that on ESG Clean Energy’s web site (as of early October), the list of “press releases that show that ESG Clean Energy is making waves in the distributive power industry” is blank: If the ESG Clean Energy license deal were just another trivial bit of vaporware hyped up by a promotional company and its over-eager shareholders, it would be problematic but unremarkable; things like that happen all the time. But it’s the nature and history of Camber/Viking’s counterparty in the ESG deal that truly makes the situation sublime. ESG Clean Energy is in fact an offshoot of the Scuderi Group, a family business in western Massachusetts created to develop the now deceased Carmelo Scuderi’s idea for a revolutionary new type of engine. (In a 2005 AP article entitled “Engine design draws skepticism,” an MIT professor “said the creation is almost certain to fail.”) Two of Carmelo’s children, Nick and Sal, appeared in a recent ESG Clean Energy video with Camber’s CEO, who called Sal “more of the brains behind the operation” but didn’t state his official role – interesting since documents associated with ESG Clean Energy’s recent small-scale capital raises don’t mention Sal at all. Buried in Viking’s contract with ESG Clean Energy is the following section, indicating that the patents and technology underlying the deal actually belong in the first instance to the Scuderi Group, Inc.: 2.6 Demonstration of ESG’s Exclusive License with Scuderi Group and Right to Grant Licenses in this Agreement. ESG shall provide necessary documentation to Viking which demonstrates ESG’s right to grant the licenses in this Section 2 of this Agreement. For the avoidance of doubt, ESG shall provide necessary documentation that verifies the terms and conditions of ESG’s exclusive license with the Scuderi Group, Inc., a Delaware USA corporation, having an address of 1111 Elm Street, Suite 33, West Springfield, MA 01089 USA (“Scuderi Group”), and that nothing within ESG’s exclusive license with the Scuderi Group is inconsistent with the terms of this Agreement. In fact, the ESG Clean Energy entity itself was originally called Scuderi Clean Energy but changed its name in 2019; its subsidiary ESG-H1, LLC, which presides over a long-delayed power-generation project in the small city of Holyoke, Massachusetts (discussed further below), used to be called Scuderi Holyoke Power LLC but also changed its name in 2019.22 The SEC provided a good summary of the Scuderi Group’s history in a 2013 cease-and-desist order that imposed a $100,000 civil money penalty on Sal Scuderi (emphasis added): Founded in 2002, Scuderi Group has been in the business of developing a new internal combustion engine design. Scuderi Group’s business plan is to develop, patent, and license its engine technology to automobile companies and other large engine manufacturers. Scuderi Group, which considers itself a development stage company, has not generated any revenue… …These proceedings arise out of unregistered, non-exempt stock offerings and misleading disclosures regarding the use of offering proceeds by Scuderi Group and Mr. Scuderi, the company’s president. Between 2004 and 2011, Scuderi Group sold more than $80 million worth of securities through offerings that were not registered with the Commission and did not qualify for any of the exemptions from the Securities Act’s registration requirement. The company’s private placement memoranda informed investors that Scuderi Group intended to use the proceeds from its offerings for “general corporate purposes, including working capital.” In fact, the company was making significant payments to Scuderi family members for non-corporate purposes, including, large, ad hoc bonus payments to Scuderi family employees to cover personal expenses; payments to family members who provided no services to Scuderi; loans to Scuderi family members that were undocumented, with no written interest and repayment terms; large loans to fund $20 million personal insurance policies for six of the Scuderi siblings for which the company has not been, and will not be, repaid; and personal estate planning services for the Scuderi family. Between 2008 and 2011, a period when Scuderi Group sold more than $75 million in securities despite not obtaining any revenue, Mr. Scuderi authorized more than $3.2 million in Scuderi Group spending on such purposes. …In connection with these offerings [of stock], Scuderi Group disseminated more than 3,000 PPMs [private placement memoranda] to potential investors, directly and through third parties. Scuderi Group found these potential investors by, among other things, conducting hundreds of roadshows across the U.S.; hiring a registered broker-dealer to find investors; and paying numerous intermediaries to encourage people to attend meetings that Scuderi Group arranged for potential investors. …Scuderi Group’s own documents reflect that, in total, over 90 of the company’s investors were non-accredited investors… The Scuderi Group and Sal Scuderi neither admitted nor denied the SEC’s findings but agreed to stop violating securities law. Contemporary local news coverage of the regulatory action added color to the SEC’s description of the Scuderis’ fund-raising tactics (emphasis added): Here on Long Island, folks like HVAC specialist Bill Constantine were early investors, hoping to earn a windfall from Scuderi licensing the idea to every engine manufacturer in the world. Constantine said he was familiar with the Scuderis because he worked at an Islandia company that distributed an oil-less compressor for a refrigerant recovery system designed by the family patriarch. Constantine told [Long Island Business News] he began investing in the engine in 2007, getting many of his friends and family to put their money in, too. The company held an invitation-only sales pitch at the Marriott in Islandia in February 2011. Commercial real estate broker George Tsunis said he was asked to recruit investors for the Scuderi Group, but declined after hearing the pitch. “They were talking about doing business with Volkswagen and Mercedes, but everything was on the come,” Tsunis said. “They were having a party and nobody came.” Hot on the heels of the SEC action, an individual investor who had purchased $197,000 of Scuderi Group preferred units sued the Scuderi Group as well as Sal, Nick, Deborah, Stephen, and Ruth Scuderi individually, alleging, among other things, securities fraud (e.g. “untrue statements of material fact” in offering memoranda). This case was settled out of court in 2016 after the judge reportedly “said from the bench that he was likely to grant summary judgement for [the] plaintiff. … That ruling would have clear the way for other investors in Scuderi to claim at least part of a monetary settlement.” (Two other investors filed a similar lawsuit in 2017 but had it dismissed in 2018 because they ran afoul of the statute of limitations.23) The Scuderi Group put on a brave face, saying publicly, “The company is very pleased to put the SEC matter behind it and return focus to its technology.” In fact, in December 2013, just months after the SEC news broke, the company entered into a “Cooperative Consortium Agreement” with Hino Motors, a Japanese manufacturer, creating an “engineering research group” to further develop the Scuderi engine concept. “Hino paid Scuderi an initial fee of $150,000 to join the Consortium Group, which was to be refunded if Scuderi was unable to raise the funding necessary to start the Project by the Commencement Date,” in the words of Hino’s later lawsuit.24 Sure enough, the Scuderi Group ended up canceling the project in early October 2014 “due to funding and participant issues” – but it didn’t pay back the $150,000. Hino’s lawsuit documents Stephen Scuderi’s long series of emailed excuses: 10/31/14: “I must apologize, but we are going to be a little late in our refund of the Consortium Fee of $150,000. I am sure you have been able to deduce that we have a fair amount of challenging financial problems that we are working through. I am counting on financing for our current backlog of Power Purchase Agreement (PPA) projects to provide the capital to refund the Consortium Fee. Though we are very optimistic that the financial package for our PPA projects will be completed successfully, the process is taking a little longer than I originally expected to complete (approximately 3 months longer).” 11/25/14: “I am confident that we can pay Hino back its refund by the end of January. … The reason I have been slow to respond is because I was waiting for feedback from a few large cornerstone investors that we have been negotiating with. The negotiations have been progressing very well and we are close to a comprehensive financing deal, but (as often happens) the back and forth of the negotiating process takes ” 1/12/15: “We have given a proposal to the potential high-end investors that is most interested in investing a large sum of money into Scuderi Group. That investor has done his due-diligence on our company and has communicated to us that he likes our proposal but wants to give us a counter ” 1/31/15: “The individual I spoke of last month is one of several high net worth individuals that are currently evaluating investing a significant amount of equity capital into our That particular individual has not yet responded with a counter proposal, because he wishes to complete a study on the power generation market as part of his due diligence effort first. Though we learned of the study only recently, we believe that his enthusiasm for investing in Scuderi Group remains as strong as ever and steady progress is being made with the other high net worth individuals as well. … I ask only that you be patient for a short while longer as we make every effort possible to raise the monies need[ed] to refund Hino its consortium fee.” Fed up, Hino sued instead of waiting for the next excuse – but ended up discovering that the Scuderi bank account to which it had wired the $150,000 now contained only about $64,000. Hino and the Scuderi Group then entered into a settlement in which that account balance was supposed to be immediately handed over to Hino, with the remainder plus interest to be paid back later – but Scuderi didn’t even comply with its own settlement, forcing Hino to re-initiate its lawsuit and obtain an official court judgment against Scuderi. Pursuant to that judgment, Hino formally requested an array of documents like tax returns and bank statements, but Scuderi simply ignored these requests, using the following brazen logic:25 Though as of this date, the execution has not been satisfied, Scuderi continues to operate in the ordinary course of business and reasonably expects to have money available to satisfy the execution in full in the near future. … Responding to the post- judgment discovery requests, as a practical matter, will not enable Scuderi to pay Hino any faster than can be achieved by Scuderi using all of its resources and efforts to conduct its day-to-day business operations and will only serve to impose additional and unnecessary costs on both parties. Scuderi has offered and is willing to make payments every 30 days to Hino in amounts not less than $10,000 until the execution is satisfied in full. Shortly thereafter, in March 2016, Hino dropped its case, perhaps having chosen to take the $10,000 per month rather than continue to tangle in court with the Scuderis (though we don’t know for sure). With its name tarnished by disgruntled investors and the SEC, and at least one of its bank accounts wiped out by Hino Motors, the Scuderi Group didn’t appear to have a bright future. But then, like a phoenix rising from the ashes, a new business was born: Scuderi Clean Energy, “a wholly owned subsidiary of Scuderi Group, Inc. … formed in October 2015 to market Scuderi Engine Technology to the power generation industry.” (Over time, references to the troubled “Scuderi Engine Technology” have faded away; today ESG Clean Energy is purportedly planning to use standard, off-the-shelf Caterpillar engines. And while an early press release described Scuderi Clean Energy as “a wholly owned subsidiary of Scuderi Group,” the current Scuderi/ESG Clean Energy, LLC, appears to have been created later as its own (nominally) independent entity, led by Nick Scuderi.) As the emailed excuses in the Hino dispute suggested, this pivot to “clean energy” and electric power generation had been in the works for some time, enabling Scuderi Clean Energy to hit the ground running by signing a deal with Holyoke Gas and Electric, a small utility company owned by the city of Holyoke, Massachusetts (population 38,238) in December 2015. The basic idea was that Scuderi Clean Energy would install a large natural-gas generator and associated equipment on a vacant lot and use it to supply Holyoke Gas and Electric with supplemental electric power, especially during “peak demand periods in the summer.”26 But it appears that, from day one, Holyoke had its doubts. In its 2015 annual report (p. 80), the company wrote (emphasis added): In December 2015, the Department contracted with Scuderi Clean Energy, LLC under a twenty (20) year [power purchase agreement] for a 4.375 MW [megawatt] natural gas generator. Uncertain if this project will move forward; however Department mitigated market and development risk by ensuring interconnection costs are born by other party and that rates under PPA are discounted to full wholesale energy and resulting load reduction cost savings (where and if applicable). Holyoke was right to be uncertain. Though its 2017 annual report optimistically said, “Expected Commercial Operation date is April 1, 2018” (p. 90), the 2018 annual report changed to “Expected Commercial Operation is unknown at this time” – language that had to be repeated verbatim in the 2019 and 2020 annual reports. Six years after the contract was signed, the Scuderi Clean Energy, now ESG Clean Energy, project still hasn’t produced one iota of power, let alone one dollar of revenue. What it has produced, however, is funding from retail investors, though perhaps not as much as the Scuderis could have hoped. Beginning in 2017, Scuderi Clean Energy managed to sell roughly $1.3 million27 in 5-year “TIGRcub” bonds (Top-Line Income Generation Rights Certificates) on the small online Entrex platform by advertising a 12% “minimum yield” and 16.72% “projected IRR” (based on 18.84% “revenue participation”) over a 5-year term. While we don’t know the exact terms of these bonds, we believe that, at least early on, interest payments were covered by some sort of prepaid insurance policy, while later payments depend on (so far nonexistent) revenue from the Holyoke project. But Scuderi Clean Energy had been aiming to raise $6 million to complete the project, not $1 million; indeed, this was only supposed to be the first component of a whole empire of “Scuderi power plants”28 that would require over $100 million to build but were supposedly already under contract.29 So far, however, nothing has come of these other projects, and, seemingly suffering from insufficient funding, the Holyoke effort languished. (Of course, it might have been more investor-friendly if Scuderi Clean Energy had only accepted funding on the condition that there was enough to actually complete construction.) Under the new ESG Clean Energy name, the Scuderis tried in 2019 to raise capital again, this time in the form of $5 million of preferred units marketed as a “5 year tax free Investment with 18% cash-on-cash return,” but, based on an SEC filing, it appears that the offering didn’t go well, raising just $150,000. With funding still limited and the Holyoke project far from finished, the clock is ticking: the $1.3 million of bonds will begin to mature in early 2022. It was thus fortunate that Viking came along when it did to pay ESG Clean Energy a $1.5 million upfront royalty for its incredible technology. Interestingly, ESG Clean Energy began in late 2020 to provide extremely detailed updates on its Holyoke construction progress, including items as prosaic as “Throughout the week, ESG had met with and continued to exchange numerous e-mails with our mechanical engineering firm.” With frequent references to the “very fluid environment,” the tone is unmistakably defensive. Consider the September update (emphasis not added): Reading between the lines, we believe the intended message is this: “We didn’t just take your money and run – honest! We’re working hard!” Nonetheless, someone appears to be unhappy, as indicated by the FINRA BrokerCheck report for one Eric Willer, a former employee of Fusion Analytics, which was listed as a recipient of sales compensation in connection with the Scuderi Clean Energy bond offerings. Willer may now be in hot water: a disclosure notice dated 3/31/2021 reads: “Wells Notice received as a preliminary determination to recommend disciplinary action of fraud, negligent misrepresentation, and recommendation without due diligence in the sale of bonds issued by Scuderi Holyoke,” with a further investigation still pending. We wait eagerly for additional updates. Why does the saga of the Scuderis matter? Many Camber investors seem to have convinced themselves that the ESG Clean Energy “carbon capture” IP licensed by Viking has enormous value and can plausibly justify hundreds of millions of dollars of incremental market cap. As we explained above, we find this thoroughly implausible even without getting into Scuderi family history: in the end, the “technology” will at best add a smidgen of value to some generators in Canada. But track records matter too, and the Scuderi track record of failed R&D, delays, excuses, and alleged misuse of funds is worth considering. These people have spent six years trying and failing to sell power to a single municipally owned utility company in a single small city in western Massachusetts. Are they really about to end climate change? The Case of the Fictitious CFO Since Camber is effectively a bet on Viking, and Viking, in its current form, has been assembled by James Doris, it’s important to assess Doris’s probity and good judgment. In that connection, it’s noteworthy that, from December 2014 to July 2016, at the very start of Doris’s reign as Viking’s CEO and president, the company’s CFO, Guangfang “Cecile” Yang, was apparently fictitious. (Covering the case in 2019, Dealbreaker used the headline “Possibly Imaginary CFO Grounds For Very Real Fraud Lawsuit.”) This strange situation was brought to light by an SEC lawsuit against Viking’s founder, Tom Simeo; just last month, a US district court granted summary judgment in favor of the SEC against Simeo, but Simeo’s penalties have yet to be determined.30 The court’s opinion provided a good overview of the facts (references omitted, emphasis added): In 2013, Simeo hired Yang, who lives in Shanghai, China, to be Viking’s CFO. Yang served in that position until she purportedly resigned in July 2016. When Yang joined the company, Simeo fabricated a standing resignation letter, in which Yang purported to “irrevocably” resign her position with Viking “at any time desired by the Company” and “[u]pon notification that the Company accepted [her] resignation”…Simeo forged Yang’s signature on this document. This letter allowed Simeo to remove Yang from the position of CFO whenever he pleased. Simeo also fabricated a power of attorney purportedly signed by Yang that allowed Simeo to “affix Yang’s signature to any and all documents,” including documents that Viking had to file with the SEC. Viking represented to the public that Yang was the company’s CFO and a member of its Board of Directors. But “Yang never actually functioned as Viking’s CFO.” She “was not involved in the financial and strategic decisions” of Viking during the Relevant Period. Nor did she play any role in “preparing Viking’s financial statements or public filings.” Indeed, at least as of April 3, 2015, Yang did not do “any work” on Viking’s financial statements and did not speak with anyone who was preparing them. She also did not “review or evaluate Viking’s internal controls over financial reporting.” Further, during most or all of the Relevant Period, Viking did not compensate Yang despite the fact that she was the company’s highest ranking financial employee. Nevertheless, Simeo says that he personally paid her in cash. Yang’s “sole point of contact” at Viking was Simeo. Indeed Simeo was “the only person at Viking who communicated with Yang.” Thus many people at Viking never interacted with Yang. Despite the fact that Doris has served as Viking’s CEO since December 2014, he “has never met or spoken to Yang either in person or through any other means, and he has never communicated with Yang in writing.” … To think Yang served as CFO during this time, but the CEO and other individuals involved with Viking’s SEC filings never once spoke with her, strains all logical credulity. It remains unclear whether Yang is even a real person. When the SEC asked Simeo directly (“Is it the case that you made up the existence of Ms. Yang?”) he responded by “invoking the Fifth Amendment.”31 While the SEC’s efforts thus far have focused on Simeo, the case clearly raises the question of what Doris knew and when he knew it. Indeed, though many of the required Sarbanes-Oxley certifications of Viking’s financial statements during the Yang period were signed by Simeo in his role as chairman, Doris did personally sign off on an amended 2015 10-K that refers to Yang as CFO through July 2016 and includes her complete, apparently fictitious, biography. Viking has also disclosed the following, which we believe pertains to the Yang affair (emphasis added): In April of 2019, the staff (the “Staff”) of the SEC’s Division of Enforcement notified the Company that the Staff had made a preliminary determination to recommend that the SEC file an enforcement action against the Company, as well as against its CEO and its CFO, for alleged violations of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder [laws that pertain to securities fraud] during the period from early 2014 through late 2016. The Staff’s notice is not a formal allegation or a finding of wrongdoing by the Company, and the Company has communicated with the Staff regarding its preliminary determination. The Company believes it has adequate defenses and intends to vigorously defend any enforcement action that may be initiated by the SEC.32 Perhaps the SEC has moved on from this matter and will let Doris and Viking off the hook, but the fact pattern is eyebrow-raising nonetheless. A similarly troubling incident came soon after the time of Yang’s “resignation,” when Viking’s auditing firm resigned, withdrew its recent audit report, and wrote a letter “advising the Company that it believed an illegal act may have occurred” – because of concerns that had nothing to do with Yang. First, Viking accounted for the timing of a grant of shares to a consultant in apparent contradiction of the terms of the written agreement with the consultant – a seemingly minor issue. But, under scrutiny from the auditor, Viking “produced a letter… (the version which was provided to us was unsigned), from the consultant stating that the Agreement was invalidated verbally.” Reading between the lines, the “uncomfortable” auditor suspected that this letter was a fake, created just to get him off Viking’s back. In another incident, the auditor “became aware that seven of the company’s loans…were due to be repaid” in August 2016 but hadn’t been, creating a default that would in turn “trigger[] a cross-default clause contained in 17 additional loans” – but Viking claimed it “had secured an oral extension to the loans from the broker-dealer representing the lenders by September 6, 2016” – after the loans’ maturity dates – “so the Company did not need to disclose ‘the defaults under these loans’ after such time since the loans were not in default.” It’s easy to see why an auditor would object to this attitude toward financial disclosure – no need to mention a default in August as long as you can secure a verbal agreement resolving it by September! Against this backdrop of disturbing behavior, the fact that Camber just dismissed its auditing firm three weeks ago on September 16th, even with delisting looming if the company can’t become current again with its SEC filings by November, seems even more unsettling. Have Camber and Viking management earned investors’ trust? Conclusion It’s not clear why, back in 2017, Lucas Energy changed its name to “Camber” specifically, but we’d like to think the inspiration was England’s Camber Castle. According to Atlas Obscura, the castle was supposed to help defend the English coast, but it took so long to build that its “advanced design was obsolete by the time of its completion,” and changes in the local environment meant that “the sea had receded so far that cannons fired from the fort would no longer be able to reach any invading ships.” Still, the useless castle was “manned and serviced” for nearly a century before being officially decommissioned. Today, Camber “lies derelict and almost unheard of.” But what’s in a name? Article by Kerrisdale Capital Management Updated on Oct 5, 2021, 12:06 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});.....»»

Leftist Mayor Calls 911 On Peaceful Petitioners - Describes Them As "Far Right Wing" It is no secret that blue state politicians have been growing more extreme each passing year.  Given a taste of ultimate authority during the covid lockdowns, they now seem to operate on the assumption that this is how society will function from now on – Unilateral authority with no checks and balances based on arbitrary proclamations rather than constitutional law.   As the old saying goes, if you want to test a person's character, give them power.  Democrats assumed far reaching powers during the pandemic scare, and they have revealed their true natures.  This reality also extends to their behavior regarding “trans rights”, which they believe allows them to restrict individual speech, violate women's privacy rights and erase the right of parents to be informed of school interactions with their children. It may be opposition to the school trans indoctrination problem in particular that compelled leftist Mayor Janice Deccio of Yakima, Washington to call 911 on Sept. 3rd, outraged by the presence of conservative petitioners collecting signatures at a local Walmart to stop schools from hiding information from parents, among other actions.  In June of this year, Deccio proclaimed the entire month as "Lesbian, Gay, Bisexual, Transgender, Asexual, Aromantic, Queer, Two-Spirit, Non-Binary, and Intersex Pride Month" in Yakima, during a city council organized event.  Deccio claims she was simply informed by her constituents of “far right wing petitioners” at Walmart “harassing” shoppers, and that she was not aware of what they were specifically collecting signatures for.  Petitioners held signs listing their goals, making her assertion less believable.   The volunteers were gathering signatures over Labor Day weekend on six Washington ballot initiatives funded by Let’s Go Washington.  I-2113 would roll back restrictions placed by Democrats on when police officers can engage in vehicular pursuits. I-2117 would lower the Democrat-imposed carbon tax that has spiked gas prices. I-2124 would allow employees to opt out of Washington's long-term care insurance program. I-2109 would repeal the state's capital gains tax. I-2111 would prohibit state income taxes being imposed and I-2081, would allow parents of public school students to review their child’s instructional materials and student records. The signature gatherers also caught the attention of former Democrat candidate for Congress Doug White who posted on Twitter/X complaining about the “illegal petition” while asking his followers “What will you do about it?”  Perhaps hoping to rally leftists to disrupt the petitioners since the police refused to violate their rights.   Illegal petitioners outside west valley Walmart. They have been trying to get rid of them for a week but refuse to leave. Police and sheriff will do nothing. Sgt Shepard of the YPD states “it’s their constitutional right”. Do you agree? What will you do about it? pic.twitter.com/9q2Hro9YyT — Doug White (@DougWhiteRAU) September 3, 2023 The Yakima Mayor says she “does not care” about the nature of the petition and was only concerned about “harassment” and the property rights of Walmart.  However, if this is true why would she make sure to paint the petitioners as “far right wing?”  Her clear disappointment and expression of disbelief after being informed that the petitioners were acting within the law also reveals that the 911 call may have been motivated by political zealotry. Attempting to conflate the private property of a home residence with the parking lot of Walmart could be blamed on ignorance.  Perhaps Mayor Deccio is simply stupid.  Clearly she was aware that police could not intervene before she made the call, and contacted 911 anyway.  Was she hoping to use her government position to pressure police to confront petitioners regardless of the law?    At bottom the most important question is not a legal one – How was this small group of people causing harm?  Why bother them at all?  Would the Mayor have made the same phone call if the petitioners were far-left and in support of gun control, carbon taxes and trans propaganda in schools? The identification of “far right wing” is often used by leftists as a qualifier for censorship.  They argue that free speech is  protected, but not absolute.  Meaning, free speech is okay for those they deem to be the “good guys” but it should be restricted for those they deem to be the “bad guys.”  Conveniently, leftists have also declared themselves the arbiters of who is good and who is bad, and they believe everyone to the right of Karl Marx and Klaus Schwab to be bad. While some might say that this is a minor problem associated with a small city, it is in fact a reflection of a much larger agenda.  The political left has been trying to establish double standards on every level of government and social redress for years; rules for thee but not for me.  And when government begins to silence and suppress one group in favor of another, the end result will be predictably explosive.  Luckily the local police in this instance were properly informed and were not subject to political pressure.  Tyler Durden Thu, 09/21/2023 - 20:00.....»»

The "coffee-cup test," where job applicants get rejected if they don't pick up after themselves, hits on fears that tech like AI will make hiring more opaque. The "coffee-cup test" might play into some of our fears about a hiring process that's often not transparent. The rise of artificial intelligence can add to those concerns. vgajic/Getty ImagesThe "coffee-cup test" has resurfaced online as a symbol, for some, of opaqueness in hiring.The secret nature of the test can raise similar concerns to the use of AI in hiring.Both the coffee test and AI can make the process of getting a job feel arbitrary and nontransparent.Years ago, I heard a story about a recruiter who would hold up résumés to a light to see whether the watermark stamped onto the paper was facing the right direction.Some background: Résumés used to be printed on paper. Fancy résumé stock often carried a faint image known as a watermark that would speak to the paper's fine pedigree — or at least how much you'd paid for it.The legend went that even swanky paper wasn't enough for this loathsome recruiter. If the watermark was upside down or facing backward, it was an indicator of the candidate's slapdash approach to life. Into the trash it went.For another boss man, today's litmus test isn't paper but ceramic. The hiring manager shows those who show up for interviews where the kitchen is, offers them a coffee, and then rejects those who don't bus their dishes afterward.The coffee-cup test, like the watermark check before it, can feel like a trivial way to toss candidates who might otherwise be qualified. Little surprise, experts on interviewing often dismiss the gotcha approach.Yet one reason these stories keep resurfacing online, even years later, is because they speak to our fears that we're hurtling toward a hiring environment with more unfairness and even trickery — trappuccino, anyone? — thanks to technology.Today, the bogeyman is artificial intelligence. AI can seem just as arbitrary in its decision making as the coffee-cup test."One of the reasons people are nervous about AI is that the algorithms used are very blackbox," Josh Millet, an expert on hiring, told Insider. "The applicant has no idea how they're being evaluated."It's a similar feeling that some might get from the coffee-cup standard. "No one should have secret tests," he said.AI, of course, could make a hiring process that's still way too subjective that much less so. Yet some worry that ruthless bots will rely on mysterious algorithms to yank job candidates' from consideration because of invisible infractions or minor deficiencies.Millet, who's founder and CEO of Criteria, a Los Angeles company that works to help companies reduce bias and increase efficiency in hiring, said the promise of AI is to strip unfairness from the recruiting process and make it just about the data. Yet for that to happen, the data sets on which the AI is trained can't be biased. That's a big challenge."There's great promise, but there's also risk that it not be used ethically and responsibly," Millet said, referring to AI.When AI sits in on the interviewThere have been notable examples of AI fails when it comes to hiring. Perhaps one of the best known was a trial in which Amazon tested using AI in recruiting. But because the training was done using résumés largely from men, the AI discriminated against female candidates. The company shut down the project."There's been some really high-profile faceplants on AI," Millet said. It's little wonder, then, that job seekers would be concerned about the increase in digital gatekeepers. In a survey of some 1,200 employed US adults, about half said that AI tools used in recruiting are more biased than people. The online survey was conducted in June by the Harris Poll for the American Staffing Association.People are even more squeamish about the notion of our AI overlords getting to make a final call on whether a candidate gets hired. A Pew Research Center survey of 11,000 US adults in mid-December 2022 found that seven in 10 Americans are against letting AI make the ultimate hiring decision.Sandra Sucher, a professor of management practice at Harvard Business School, told Insider it's understandable why people would have concerns given the record of bias in AI."Those aren't imaginary concerns. Those are absolutely appropriate concerns," she said, adding that work remains to address those challenges."The promise of equitable hiring is there," Sucher said. "I genuinely would worry about perpetuation of bias depending on the age and the nature of the data set."Yet the misgivings by some workers and others don't seem to be keeping employers from bringing on AI to do more of the work of hiring. That includes interviewing — presumably without the java.In one survey of representatives from some US companies, 43% reported that their organizations are using or plan to use AI in the interview process by 2024. The online poll, conducted in June by Resume Builder, involved about 1,000 people who are part of the hiring process at their employers.Secret tests might not say much about a candidateThe coffee-cup test, then, can feel to critics like another way that people are being judged on things that don't pertain to their jobs. Of course, some have argued the test is a good measure of how considerate a candidate is in the workplace. One Reddit user wrote, "My guess is the people raging against it are the same ones that leave their dirty dishes for other people."Yet, Millet said, tests that are designed to be a "soul read" into what a person is really like, or how much integrity the candidate has, can often fall short. These measures, for one, don't take into account how nervous a candidate might be in the interview.Instead of relying on hidden metrics, Millet said those doing the hiring should use standardized questions across candidates and a rubric to score people's answers. For insights into people's character or,  preferably, their work ethic, Millet said it's best to use questions that pose scenarios and see how candidates respond. Essentially, anything interviewers do to assess character, personality, or ability should be structured and objective, he said.Millet said a good rule of thumb for hiring is that the selection criteria should be relatively transparent. "If I want to know something about you, I should ask you a question about it."Read the original article on Business Insider.....»»

You're Not Supporting Ukraine Enough Until The Nuclear Blast Hits Your Face Authored by Max Abrahms, op-ed via NewsWeek.com, What happened to Elon Musk this past week showcases how completely unhinged and dangerous U.S. policy to Ukraine has become. The condemnation began when the Washington Post published excerpts from a new biography on Musk revealing that he turned down a Ukrainian request to help launch a major sneak attack in September 2022 on the Crimean port of Sevastopol. There were numerous, legitimate reasons why Musk refused to activate his Starlink internet services for Ukraine to carry out the unprecedented, surprise attack on Russian naval vessels: Musk was providing terminals to Ukraine for free; he was not on a military contract at that time; the late-night request came directly from the Ukrainian—not American—government; and Starlink had never been activated over Crimea because of U.S. sanctions on Russia. Most importantly, Musk was concerned that enabling the attack could result in serious "conflict escalation." He worried that he was being asked to turn on Starlink for a "Pearl Harbor like attack" and had no wish to "proactively take part in a major act of war," possibly provoking a Russian nuclear response. In response to this nuclear aversion, Musk was called "evil" by a high-level Ukrainian official and "traitor" by American war enthusiasts.  Rachel Maddow on the Russia conspiracy network MSNBC said Musk was "intervening to try to stop Ukraine from winning the war." Not to be outdone, CNN's Jake Tapper described Elon as a "capricious billionaire" who "sabotaged a military operation by Ukraine, a U.S. ally," an act that demands "repercussions." For his part, chief Iraq war salesman-turned-Democrat-darling, David Frum, said that Musk must be stripped of his U.S. government contracts for not reflexively acceding to the Ukrainian Starlink request, and former "progressive," Sen. Elizabeth Warren, called for an immediate Congressional investigation "to ensure foreign policy is conducted by the government and not by one billionaire." ‼️ @SenWarren demands an investigation into SpaceX after Musk blocked Ukraine from extending the Starlink network near Crimea. “The Congress needs to investigate whether we have adequate tools to ensure foreign policy is conducted by the government and not by one billionaire". pic.twitter.com/p3I19Yk851 — Ostap Yarysh (@OstapYarysh) September 12, 2023 But the Musk pile-on was just getting started. In the days that followed, his detractors used a Ukrainian operation as proof that Musk was overreacting. Days after the Starlink story broke, Ukraine successfully launched British Storm Shadow cruise missiles into the Russian naval headquarters in the Crimean port city of Sevastopol. It was the largest attack since Moscow launched its full-scale invasion of Ukraine nearly 19 months ago, and it damaged a Russian submarine and warship. When the military action was not followed by World War III, Musk was torched again. As the pro-war media noted, "It was precisely such a strike, according to Musk, that should have provoked a nuclear war." A torrent of international relations pundits on Twitter mocked Musk, tweeting things like "I was assured by an internet service provider executive that this would have caused WWIII and the use of nuclear weapons" and "How's it going man, after the splendid attack on Sevastopol? WW3 started already?" Musk's detractors might think this is all very funny, but attacking Crimea—not to mention the Russian mainland in increasingly frequent drone strikes on Moscow—is no laughing matter. Even the staunchest Western war enthusiasts from the NATO-aligned Atlantic Council to the Estonian defense minister to Biden's own Secretary of State Antony Blinken all previously acknowledged that threatening Crimea is a possible "red line" that could lead to nuclear war. As the Russian military specialist Nicolo Fasola pointed out in April, "There's a definite risk that Putin would use nuclear weapons to counter a Ukrainian offensive in Crimea. And that's why Ukraine's Western allies are reluctant." But that previous caution has faded—no doubt as a result of the much-touted counteroffensive disappointing American war planners, leading to a seemingly endless and halting war of attrition reminiscent of World War I. Meanwhile, Biden's political legacy is on the line as the presidential election looms. The longer the war goes on, the more the Biden administration and its NATO allies are throwing caution to the wind. Biden keeps consenting to supply weapons previously ruled out as excessively escalatory, from Patriot air defense systems to Abrams tanks to cluster munitions to F-16's. The latest reversal is over the expected transfer of Army Tactical Missile Systems that can fly up to 190 miles, enabling Ukrainian forces to strike far beyond Russia's defensive positions inside Crimea and deep into Russian sovereign territory. National Security advisor Jake Sullivan used to rule out ATACMS "to ensure that we don't get into a situation in which we are approaching the Third World War." Even CNN, an enthusiastic advocate for greater American involvement in the war, has acknowledged the "fears about escalating the conflict." A couple months ago, Senator James Risch of Idaho told the Aspen Security Forum, "I'm tired of hearing about escalation. I want Putin to wake up in the morning worried about what he's going to do that's going to cause us to escalate." Biden apparently now agrees. The view now ruling the Democratic Party and the President is the same as the warmongers: It's silly to worry as Musk does about turning the Ukraine war into something catastrophically worse. It's un-American not to try to find Russia's redline for starting World War III. It's traitorous to believe—as the President himself did, just a few months ago—that we should be doing all we can to prevent escalation. The new mantra seems to be: We're not trying hard enough in Ukraine until we feel the nuclear blast against our faces. *  *  * Max Abrahms, Ph.D., is a professor of political science at Northeastern University and author of Rules for Rebels: The Science of Victory in Militant History. Tyler Durden Sun, 09/17/2023 - 23:15.....»»

Detransitioner Sues Doctors Who Cut Off Her Breasts At 16 Authored by Caden Pearson via The Epoch Times (emphasis ours), Luka Hein, a young lady who regrets receiving a "radical double mastectomy" at the age of 16 to treat gender dysphoria, is suing her physicians and the University of Nebraska Medical Center (UNMC) for damages. A transgender flag sits on the grass outside of the U.S. Capitol building in Washington, on May 22, 2023. (Anna Moneymaker/Getty Images) At 16 years old, Ms. Hein was a minor when physicians from UNMC surgically removed her breasts as the first step in her so-called "gender-affirming care," per a lawsuit filed in the District Court of Douglas County, Nebraska, on Wednesday. The Center for American Liberty legal organization on Wednesday accused doctors at UNMC of lying to Ms. Hein and her parents, and of hiding research that doesn't support the prevailing "gender-affirming" model of care for people suffering from gender dysphoria. "UNMC doctors deceived Luka and her parents with false promises claiming that if Luka did not undergo the removal of her breasts, she would take her own life, despite medical evidence to the contrary," the Center for American Liberty stated. "UNMC also concealed scientific studies that do not support surgical 'transitions' for minors—including studies showing transgender surgeries actually increase suicidality and psychiatric morbidity." Ms. Hein contends in her lawsuit that doctors and her health care team at Nebraska Medicine were negligent in not questioning her self-diagnosis instead of affirming her gender identity per the prevailing "Dutch protocol." She claims this ultimately caused her harm by encouraging her "toward irreversible chemical and surgical solutions." The Dutch protocol is the origin of the "gender-affirming" model of care, which Ms. Hein's lawsuit contends conditions children toward transgender identification "by encouraging social transition, chest binding, opposite sex pronouns, cross-sex hormones and surgery," rather than treating gender dysphoria. In a post on Instagram earlier this year, Ms. Hein described herself as "a victim" of the "gender-affirming care system." "I was a young teenager with a history of mental health issues who had been groomed and preyed upon online, and as a result fell into a spiral of hatred towards both myself and my body," she wrote. "The medical system did not look into or seem concerned about the underlying issues that were causing the distress that made me feel the need to escape my body at such a young age," she continued, "instead I was affirmed down a path of medical intervention that I could not fully understand the long term impacts and consequences of due to my both my age and mental health conditions." Her lawsuit contends that by "immediately affirming" her, the doctors "developed a type of transgender tunnel vision that blocked out the other factors that were or may have been the cause or causes of Luka’s dysphoria." This treatment method of affirming Ms. Hein's new gender identity, which she now bitterly regrets, came "during a time in her life when she was going through profound personal upheaval, trauma, and distress," according to the complaint (pdf). Ms. Hein, the suit contends, "was simply too young to understand the irreversible implications of the transgender 'treatment' recommended, prescribed, and carried out" by health care workers at UNMC. Doctors 'Owed a Duty' to Hein The defendants, UNMC Physicians and the Nebraska Medical Center are "controlled affiliates" of co-defendant Nebraska Medicine, which coordinates and controls the activities of the two entities, including inpatient and outpatient hospital and physician care. The clinic is based in Omaha, Douglas County, Nebraska. The lawsuit specifically names Dr. Nahia “Jean” Amoura, an OB/GYN and director of the gender care clinic. It also names Dr. Perry Johnson, a plastic surgeon at the gender clinic, and Dr. Stephan Barrientos, a resident physician who allegedly assisted Dr. Johnson in removing Ms. Hein's breasts on the alleged advice of Dr. Amoura. Megan Smith-Sallans, a mental health therapist working in gender care, was also named in the lawsuit as working with the three physicians to allegedly "cause harm" to Ms. Hein. Ms. Hein's complaint contends that the physicians at UNMC, a clinic that boasts about its leadership "in ground-breaking research," had the ability and duty to independently examine the scientific basis of the "gender-affirming" model. "As Nebraska’s premier medical institution, and with millions of research dollars at hand, Defendants owed a duty to Luka—and the hundreds of patients like her—to independently research the underpinnings of the Dutch study before adopting its flawed protocols," the complaint states. Chloe Cole takes part in a demonstration in Anaheim, Calif., on Oct. 8, 2022. (John Fredricks/The Epoch Times) 'Gender-Affirming' Model 'Should Have Never Been Used' The lawsuit contends that the Dutch model "should have never been used” as justification to scale up the protocol for general use. "But like a virus that escapes the lab, the Dutch protocol spread like a contagion due to 'runaway diffusion,' a phenomenon whereby innovative clinical practices are rushed to market without long-term, carefully controlled ethical research demonstrating that the benefits of the innovation outweigh the risks," the lawsuit states. Such a "seismic shift" away from the time-tested protocols in diagnosing patients means that "reasonably prudent" doctors have a duty to examine and assess their patients for other potential causes of distress before resorting to irreversible procedures like double mastectomy or hysterectomy, the complaint contends. UNMC's website boasts that it has earned a "Top Performer" designation from the Human Rights Campaign, a group that lobbies for the Dutch protocol of "gender-affirming" care. "This means that UNMC staff do not question a patient’s self-diagnosis of transgender identification, no matter their age or the root issues from which they suffer," the complaint states. "Rather, UNMC faculty 'affirm' the chosen gender identity of the patient and then undertake pharmacological and surgical interventions based on what is known as the 'Dutch Protocol.'" This protocol, which was based on a Dutch study of transgender patients who received hormone therapies in the early 2000s, has become the prevailing treatment method for gender dysphoria in the United States. However, multiple follow-up studies have pointed out its weaknesses. Ms. Hein's complaint contends that the study had no control group, that the study "cherry-picked" the patients, that the study ended with 40 percent fewer patients participating—one patient died from complications arising after he had a vagina surgically created—and that the study excluded data from patients whose treatment with puberty blockers "did not progress well." The complaint notes that the studies were funded by Ferring Pharmaceuticals, which produces puberty-blocking drugs and stood to profit from favorable results. The Epoch Times contacted UNMC and Ferring Pharmaceuticals for comment. Tyler Durden Sun, 09/17/2023 - 14:00.....»»

Why Is Rhode Island Still Irrationally Targeting School Children With "Masking And Testing" Policies? Authored by Andrew Bostom via The Brownstone Institute, One of the consistent mercies of the SARS-CoV-2 “covid-19 pandemic,” even at its most virulent initial stages, has been the paucity of serious disease in children generally, and healthy children, universally. Covid-19 always was and remains a very highly age– and comorbid risk-stratified disease that targets the extremely frail elderly—especially those in congregate care—and the otherwise middle-aged to elderly with multiple (for example, ≥ 6!), severe, chronic comorbidities. For the vast preponderance of the world’s population, and workforce, i.e., the ~94 percent under age 70-years-old, we now know that the most aggressive early variants, such as the Wuhan, Alpha, and Delta strains, conferred a very modest infection fatality ratio (IFR; covid-19 deaths/total covid-19 infections) of 0.1 percent, or 1 per 1,000 infections. This seasonal influenza-like IFR for those < 70, overall, dropped precipitously further in the pediatric age range (0-19-years-old) to 0.0003 percent, or 1 in 333,333. Such unalarming IFRs among those < 70, especially children, for the early SARS-CoV-2 variants, have been reduced by at least 3-fold more (so 0.1 percent/3; 0.0003 percent/3!) since the advent of the Omicron wave in early 2022, and its perhaps even milder related subvariants, that are continuing to emerge through the present.  During 3+ years, including the period when the most virulent early SARS-CoV-2 strains were predominant, through the Omicron wave, and till now, not a single pediatric death due to covid-19, has been recorded in Rhode Island. This contrasts starkly with the three HINI influenza (swine flu) pediatric pneumonia deaths that accrued in a single flu season, during the 2009-2010 swine flu pandemic, mirroring recent national US pediatric influenza death trends. Comparative US pediatric influenza vs. SARS-CoV-2 mortality data since 2009, underscore how both pandemic, and bad seasonal influenza outbreaks—with which we cope, appositely, minus hysteria—pose a greater mortality risk to children, than SARS-CoV-2.  We have also learned that SARS-CoV-2 transmission, like influenza transmission, is driven by persons with symptomatic infections. Both SARS-CoV-2 contact tracing studies, and an elegant experimental design tracking viral emissions from deliberately infected healthy subjects, just published in the Lancet, have reaffirmed this observation. Moreover, regardless of mode of transmission, it is also established that children did not “drive” the SARS-CoV-2 pandemic. Complementing these irrefragable SARS-CoV-2 mortality and transmission data, a century of uniform public health evidence, bolstered over the past four decades by randomized, controlled trial findings, demonstrates that community masking (with N95 masks, as well) does not prevent respiratory virus infections (influenza, SARS-CoV-2, RSV, and others) in adults, or children.  Blithely ignoring each of these four fundamental, evidence-based considerations, on August 24, 2023, just prior to the reopening of Rhode Island public schools after summer recess, the Rhode Island Department of Health’s (RIDOH) Center for Covid-19 Epidemiology (CCE), distributed a memorandum (original pdf here; archived here) to public “School and District Leaders,” with the following cover email from CCE “team leader,” Julia Brida: From: Brida, Julia (RIDOH-Contractor) Sent: Thursday, August 24, 2023 1:51 PMCc: COVID19Questions, RIDOH Subject: [EXTERNAL] Center for COVID-19 Epidemiology- Back to School MemoImportance: High Good Afternoon,   We hope you have had a great summer! Ahead of the 2023-24 school year, the Rhode Island Department of Health Center for COVID-19 Epidemiology (CCE) wanted to share a memo to provide key updates and information regarding COVID-19. This includes:  COVID-19 key recommendations  Clinical guidance  Tracking COVID-19 in Rhode Island   COVID-19 operational updates  Testing resources   Outbreak reporting and support   Center for COVID-19 Epidemiology, Education Team Julia BridaSenior PM | HCH Enterprises  Education Policy & Engagement Team Lead | Center for COVID-19 Epidemiology (CCE)Division of Emergency Preparedness & Infectious Disease (EPID) Rhode Island Department of Health (RIDOH) The memo itself urged students and staff to: “[G]et tested when you have COVID-19 symptoms;” “If exposed to someone with COVID-19, monitor symptoms; test after day 5; and wear a mask through day 10;” and “If you have COVID-19, isolate at home for 5 days and wear a mask through day 10.” A so-called “Covid-19 Operational Update” section of the memo declared, “Testing remains an important tool to detect infection and prevent COVID-19 spread.” Glaringly absent from the memo (archived here) was any unambiguous statement that these recommendations were not compulsory for students (and their parents), staff, or administration, and non-compliance with them would not preclude an individual’s school attendance, limit their school activities, or affect school district funding. This current sorry situation, vis-à-vis “covid public health policy” for schools, continues the unbroken thread of Lysenkoist mismanagement which knits together Rhode Island’s response since children returned, gingerly, in part, to “in-class learning” during September, 2020.  RIDOH and the rest of Rhode Island’s “covid brain trust” have always enacted uncritically the policies hectored at the public by national covid leadership figures, such as former “Covid-19 Response Coordinator,” Dr. Deborah Birx. Dr. Birx was fêted at the University of Rhode Island in the fall of 2020, where she aggressively pushed mass, unselective covid testing because, “her main concern is (was) asymptomatic spread.” This misbegotten testing policy and the false construct of asymptomatic spread, were of course both rubber-stamped by RIDOH and its then generalissima, Dr. Nicole Alexander-Scott. Dr. Scott, as proof of her overzealous endorsement of the factitious mass testing/asymptomatic spread paradigm, had RIDOH issue an “early warning” asymptomatic press release, and a subsequent release crowing about the state’s completion of its “millionth covid-19 test.” Nearly a year later, despite the well-established futility of community masking, generalissima Scott angrily remonstrated, “Masks work,” in response to a query by independent journalist, Pat Ford. Ford’s preamble to his question raised the issue of potential harms of masking to children, which Scott ignored.  RIDOH Covid-19 Medical Director (later RIDOH Acting Director), Dr. James McDonald lied under oath in Rhode Island Superior Court claiming three RI children had died “as a result of covid-19.” Still under oath, about a week afterward, Dr. McDonald was allowed to “correct” this act of perjury, and only then did he acknowledge indeed there had not been any primary cause of pediatric covid-19 deaths in Rhode Island. McDonald also conceded, candidly, during this latter testimony, that a 16-year-old male admitted to a Rhode Island Emergency Department with an ultimately fatal gunshot wound to the head, who as part of his admission testing, coincidentally “tested positive” for covid-19, would be designated a “covid-19 death,” by RIDOH recording methods, since “it meets the definition of the CDC.” At a subsequent deposition, as Acting RIDOH Director, Dr. McDonald was questioned about a comprehensive Pediatric Infectious Disease Journal review—a journal that he claimed to be familiar with as a pediatrician—entitled, “The Role of Children and Young People in the Transmission of SARS-CoV-2.” The review concluded,  “[T]here is no convincing evidence to date, 2 years into the pandemic, that children are key drivers of the pandemic.”  McDonald while acknowledging he had not read the review nevertheless, defiantly, if (tragi-)comically proclaimed, “I don’t agree with that assessment.” The good Dr. McDonald predictably could not supply any published data to support his dogmatic contention.  Last December (2022) RIDOH’s Dr. Philip Chan helped gin up hysteria over a Rhode Island so-called “tripledemic,” the alleged confluence of covid-19, influenza, and RSV infections, affecting children, in particular. Dr. Chan’s claim proved to be contrived. Hard data showed minimal primary pediatric covid-19 admissions, a significant fall outbreak of RSV, accompanied by RSV hospital admissions, and to a much lesser extent, pediatric influenza infections, and influenza hospital admissions, driving total pediatric respiratory viral hospitalizations.  Once again, a tocsin of potential looming calamity is already being sounded, now, for another so-called tripledemic this fall by the new director of the Centers for Disease Control and Prevention, Dr. Mandy Cohen. Sadly, if inevitably soon, such overwrought “tripledemic” messages, with a repeat inappropriate focus on pediatric covid-19, are almost certain to be echoed by Rhode Island’s disingenuous local RIDOH public health brain trust.  RIDOH’s newly minted “back to school” covid policy recommendations will have no ameliorative impact, especially in light of covid’s near nonexistent threat to children. But their socioeconomic effects might continue to wreak unnecessary havoc on our communities, albeit not as extreme as lockdowns. How do we Rhode Islanders extricate ourselves from this hysterical, anti-scientific “covid school policy” morass? There are general, evidence-based templates we can cite. In Sweden, open primary schools with teachers providing face-to-face education, and no masking throughout the covid-19 pandemic, were associated with “No learning loss during the pandemic” vs. closed schools, “distance learning,” and mask mandates, in the US, yielding “historic learning setbacks for America’s children,” including Rhode Island schoolchildren. Furthermore, there were no covid-19 deaths among Swedish schoolchildren during the most virulent spring 2020 covid-19 wave, while teachers as a profession had similar or even lower serious covid-19 morbidity, vs. all other Swedish workers. Dr. Tom Jefferson is an internationally recognized evidence-based medicine research scholar whose ongoing pooled analyses of community masking for the potential prevention of respiratory viral infections extend back almost two decades. Responding to Dr. Anthony Fauci’s recent incoherent, vacuous “critique” of Dr. Jefferson’s 2023 Cochrane Review reestablishing the lack of randomized, controlled trial evidence supporting community masking, Jefferson noted, “So, Fauci is saying that masks work for individuals but not at a population level? That simply doesn’t make sense. And he says there are ‘other studies’…but what studies?  He doesn’t name them so I cannot interpret his remarks without knowing what he is referring to. It might be that Fauci is relying on trash studies. Many of them are observational, some are cross-sectional, and some actually use modelling. That is not strong evidence. Once we excluded such low-quality studies from the review, we concluded there was no evidence that masks reduced transmission.” We can also restate the evidence that mass asymptomatic testing, since SARS-CoV2 transmission is driven by symptomatic persons, are conjoined fool’s errands, made worse still if these practices are attached to punitive school policies.  Finally, concerned Rhode Island parents must demand, unequivocally, that RIDOH issue an immediate clarifying memo to “School and District Leaders.” This memo must state plainly that none of RIDOH’s covid-19 policy recommendations are mandatory, and failure to implement or comply with them will not result in any children or staff being barred from school, or school activities, nor will such failure jeopardize any school or district funding.  Tyler Durden Thu, 09/14/2023 - 19:00.....»»

Japanese Panic Buy Gold As Yen Implodes And Inflation Soars A gold-buying frenzy in hyperinflating banana-republic basket cases such as Venezuela, Zimbabwe, Argentina or Turkey makes sense; one can also imagine Indians and Chinese liquidating rushing to buy the precious metal, as they periodically do (for other, not less relevant, reasons). But Japan? That's right: the otherwise quiet (and rapidly aging) population of Japan has found a new infatuation with gold, and it has the relentless money-printing juggernaut that is the BOJ to thank for it. Japanese savers have not had a strong incentive to move assets out of cash... until now As the FT reports, the price of gold in Japan (denominated in that joke of a currency, the Japanese lira yen)  has jumped to an all-time high as the yen extends its historic slide against the US dollar, vaporizing the purchasing power of residents and forcing cash-rich households to find a hedge against ubiquitous inflation. Buying of yen-denominated gold at the nation’s largest dealer has driven the price of the yellow metal above the ¥10,000 per gramme level for the first time in recent days. It was trading at ¥10,100 last week, according to retail prices published by Tanaka Kikinzoku, one of Japan’s largest gold retailers. The retail gold price in Japan — the main reference price for the metal in the country — tracks global spot prices, which have been pushed up by the coronavirus pandemic, the war in Ukraine, the debt ceiling crisis in the US and global tensions between the east and west. But most of all, it reflects the dramatic collapse in the value of the yen, which recently passed ¥147 against the dollar, a level that last year triggered verbal market intervention by the Japanese authorities but this year has been widely ignored by a central bank which realizes that intervention at this point is futile and would only precipitate Japanese hyperinflation and systemic collapse. And since Japan's inflation, which recently surpassed that of the US, will keep rising... ... as the weak yen will only get weaker - occasional desperation intervention aside - as long as there was no signal from the Bank of Japan that it is ready to tighten its ultra-loose policy which won't happen for a long time (and when it does, it will spark a collapse in the JGB bond market forcing the trapped BOJ to immediately reverse once again) demand for gold in Japan will only keep rising. Economists cited by the FT, said the move in retail gold prices, which extends an 18-month rally at gold stores around Japan, was part of a rapid shift in household attitudes to risk as years of deflation have given way to rising consumer prices. Imagine a world where the biggest source of demand for gold in Asia is not India but Japan, and where demand will only rise as the yen (inevitably) falls as it gets closer to its inevitable and catastrophic end. Well, we are pretty much there now. Jesper Koll, an economist and adviser to the Japan Catalyst Fund, an investment fund, said the primary driver for the buying by Japanese households was an urgent search for inflation protection after years without strong incentive to move assets out of cash. “The fact that gold is a non-yen asset helps, but the trigger is inflation,” said Koll, and since inflation in Japan is only going to rise, so will demand for gold. Japanese households emerged from the pandemic with a record of more than ¥2 quadrillion in accumulated assets or around four times the country’s annual gross domestic product. About half of that was held in cash and deposits — a balance closely eyed by Japan’s securities houses, which are trying to convince customers that inflation is here to stay and they now need to switch their savings into other financial products. The problem is that core CPI in Japan reached 3.1% last month. “Inflation in Japan is at a crossroads,” said Tomohiro Ota, senior Japan economist at Goldman Sachs, noting that although consumer prices keep going up, some of the increase is down to temporary government subsidies while consumption growth has stalled since March. Goldman Sachs predicts that Japan’s currency will hit ¥155 against the dollar in the next six months. Eiichiro Kato, a general manager for Tanaka Kikinzoku’s Precious Metals Retail Department, said that gold had become particularly attractive to customers concerned about the yen’s fall to multi-decade lows and their assets being denominated in yen. Of course, it's not just Japanese savers who are rushing to the safety of gold: a year of record gold purchases by central banks in a world where the dollar is now weaponized against enemies of Ukraine the Biden administration, has made it clear that demand for gold will only rise. "We do not see many factors that would cause the dollar-denominated price to fall significantly, and we think that the yen-denominated price could rise further if the yen continues to weaken,” said Kato. However, Hideo Kumano, chief economist at Dai-Ichi Research Institute, warned against reading too much into the rise in Japan’s gold price due to the small size of the market. “It could prove to be an outlier and the country’s elderly population might not change their behaviour and start to consume, even if inflation does remain high,” he said. On the other hand, with deflation now dead and buried (at least until the next global depression) the odds that Japan's notoriously thrifty population will continue to save at a time when its currency is collapsing are nil, especially since the BOJ itself has given up trying to contain the surge in yen-denominated gold... ... something it did for much of the previous decade. Tyler Durden Thu, 09/14/2023 - 17:20.....»»

Elon Musk and his brother, Kimbal, told Walter Isaacson that their father, Errol, had harshly criticized Musk after a disfiguring attack by a group of students. GIANLUIGI GUERCIA/AFP via Getty Images and Chesnot/Getty ImagesElon Musk said his father once called him "worthless" after he was beaten up at school.Musk shared the experience in Walter Isaacson's new biography of Musk.His father, Errol Musk, disputed this account in a statement to Insider. Elon Musk and his father, Errol Musk, are giving conflicting characterizations about the elder Musk's reaction to an attack at school that the two agree was severe enough to have put Elon Musk in the hospital.The story was recounted in Walter Isaacson's new biography of Elon Musk, who's now the world's richest person. Setting up the incident, Isaacson wrote that Musk was often bullied in school because he was "the youngest and smallest student in his class," adding that it didn't help that Musk lacked the empathy and desire to win friends.Isaacson then went on to describe an altercation in which a student who was playing with his friends bumped into Musk, prompting Musk to push him back and the two to exchange words. The boy and his friends later jumped Musk at recess, Isaacson wrote, and pushed him down a flight of concrete steps."They sat on him and just kept beating the shit out of him and kicking him in the head," Musk's brother, Kimbal Musk, who had been sitting with him, told Isaacson."When they got finished, I couldn't even recognize his face," he said. "It was such a swollen ball of flesh that you could barely see his eyes."Isaacson wrote that while the beating had even required Musk to get corrective surgery in his nose decades after it happened, "the scars were minor compared to the emotional ones inflicted by his father," who while speaking with Isaacson for the book appeared to justify the attack on his son.Errol Musk told Isaacson: "The boy had just lost his father to suicide and Elon had called him stupid. Elon had a tendency to call people stupid. How could I possibly blame that child?"But the elder Musk's account differs from his sons' about what happened when Elon Musk came home from the hospital. The Musk brothers said Errol Musk lashed out at his son. "I had to stand for an hour as he yelled at me and called me an idiot and told me that I was just worthless," Elon Musk said.Kimbal Musk described it to Isaacson as the worst memory of his life. "My father just lost it, went ballistic, as he often did," he said. "He had zero compassion."The brothers no longer speak with their father. Elon Musk told Rolling Stone in 2017 that his father is "a terrible person.""No, I did not berate Elon," Errol Musk told Insider in an email. "That is nonsense. Elon was in the hospital for a few days. It was not possible to do that nor would I have done that. I was shocked by the incident."He added that the main boy involved was "much smaller than Elon," and that they were both about 12 or 13 years old.Isaacson wrote that Errol Musk moved Elon Musk from a public school to a private academy, Pretoria Boys High School, after the attack. Errol Musk reiterated this to Insider, saying he "went to the expense of buying another house in another city to be able to put Elon and Kimbal in there."Elon and Kimbal Musk's mother, Maye, divorced Errol Musk in 1979. In an interview with Harper's Bazaar, she described it as an abusive marriage.Ex-girlfriend Grimes told Isaacson that Elon Musk's experience with his father has had an impact on future relationships."He associates love with being mean or abusive," she told Isaacson, "It's about his father and what he grew up with."His first wife, Justine Wilson, whom he was married to from 2000 to 2008, told Isaacson that Musk would sometimes call her a "moron" or "idiot," which she associated with Errol Musk.Read the original article on Business Insider.....»»