ZeroHedge News

An Epidemic Of Mandatory

Tyler Durden — Mon, 09 Aug 2021 03:50:00 +0000

An Epidemic Of Mandatory

Authored by Richard Fernandez via PJMedia.com,

The official narrative has shifted from “we can beat the coronavirus” to “we can coexist with it but only if you follow our shifting instructions very carefully.”

The pandemic has become endemic, going from something we can beat to “another virus that we’ll have to live with.”

As far back as February, an article in Nature asked if we could ever be “coronavirus-free… [by maintaining] heavy restrictions… could the world hope to rid itself of the virus?”

Probably not.

The good news from a San Francisco hospital coronavirus cluster is that the vaccinated don’t get very sick anymore.

The bad news is that they can test positive.

“At least 233 staff members at two major San Francisco hospitals, most of them fully vaccinated, tested positive for the coronavirus this month, and most, according to a hospital official, involved the highly contagious Delta variant.”

However, few were seriously stricken.

Without vaccinations, Dr. Day said, the hospitalization rate would be much worse.

“We’re concerned right now that we’re on the rise of a surge here in San Francisco and the Bay Area,” Dr. Day said.

“But what we’re seeing is very much what the data from the vaccines showed us: You can still get Covid, potentially. But if you do get it, it’s not severe at all.”…

Staff members at both hospitals have continued to wear personal protective equipment, Dr. Day said. But the number of staff infections reported in July is about as many as during the peak of the winter surge.

It’s like a science fiction story where the earth has been invaded by aliens, who can be contained but cannot be dislodged. This life form (the authorities think) comes from some Species X or Missing Link and nobody knows for sure what it will do next. “The virus becoming endemic is likely, but the pattern that it will take is hard to predict,” says Angela Rasmussen, a virologist from Georgetown University. Among the scenarios now envisioned are:

Some regions might become temporarily virus-free but remain at risk from reinfection;
The virus will never go away, but constant vaccination and restriction will prevent widespread hospitalization;
Humanity will be able to eventually reduce the menace to the impotence of the common cold.

This shift in tone is a significant one because it sets the stage for an indefinite period of vigilance. Gone are the categorical expectations of quick triumph. In its place is a protracted total war where the key word is “mandatory.”

The headlines are full of the word:

“Factbox: Countries make COVID-19 vaccines mandatory”
“Check In app now mandatory if you want to enter thousands of businesses”
“Compulsory vaccinations for care home staff in England backed by MPs”
“Covid vaccine certificates to be compulsory for crowded venues in England”
“Anti-Covid masks now mandatory outdoors in 30 French departments”
“Germany Imposes Mandatory COVID-19 Testing Requirement for Unvaccinated People”
“New York City and California to Require Vaccines or Tests for Workers”
“Biden Orders Military to Move Toward Mandatory COVID Vaccine.”

Mandatory, compulsory, required and we might break even, cross our hearts and hope to die. But the problem with “mandatory” is that nobody can say how long it will take to work or, honestly, whether it will work at all. There is “No end in sight for COVID ‘Phase A’ on Australia’s path out of lockdowns,” writes ABC news. The sad truth is that many world leaders didn’t even know they would need a Plan B in the confident early days of fact-checkers. But we are now in a game dominated, not by the original coronavirus and the world of 2019, but by a new situation shaped by the public policy response since then.

Second Order Effect refers to the idea that every action has a consequence, and each consequence has a subsequent consequence. In other words, this means that a single decision can initiate a series of cause-and-effects, something which we might not have knowledge or control of. Therefore, it can be very difficult for us to predict possible implications of the original decision (unless we are somehow blessed with an all-seeing crystal ball).

We now live in the second-order world. “Get Ready for a Spike in Global Unrest,” writes Foreign Policy. What was supposed to be the summer of recovery has become the season of disaster.

To call 2021 the summer of discontent would be a severe understatement. From Cuba to South Africa to Columbia to Haiti, often violent protests are sweeping every corner of the globe as angry citizens are taking to the streets.

Each country has different histories and realities on the ground … butd they all faced a perfect storm of preexisting social, economic and political hardships which fallout from the Covid-19 pandemic only inflamed farther.

Though the problem is worst in the Third World, even European and North American countries face the same dilemma: how to fight this now-endemic disease without running out of economic energy that at some stage will mean stall, crash and burn — unless “mandatory” works before then.

The longer it takes for “mandatory” to work, if ever it does, the more political shibboleths will become unaffordable. At some point, fossil fuel taxes will become insupportable. Further on, perhaps “open borders” must go. Further still, even public-sector unions and academia will feel the pinch. Yet if history is any guide, ideologues will cling to their obsessions even at the cost of survival. “Mandatory” may give a false impression of light at the end of the tunnel when, as Slate writes, that is just a “noble lie.”

When experts or agencies deliver information to the public that they consider possibly or definitively false to further a larger, often well-meaning agenda, they are telling what is called a noble lie. …

Later in 2020, Fauci participated in a second noble lie. In December, he explained in a phone interview with then–New York Times reporter Donald McNeil that he had been moving the target estimate for herd immunity based in part on emerging studies. …

In his own words, he “nudged” his target range for herd immunity to promote vaccine uptake. Even though his comments were made to influence public actions to get more people vaccinated (a noble effort), the central dilemma remains: Do we want public health officials to report facts and uncertainties transparently? Or do we want them to shape information, via nudges, to influence the public to take specific actions? …

The epidemic of “mandatory” suggests that rather than becoming more flexible and adaptive before an endemic disease, the experts are hanging on to the mantle of certitude.

Slate sadly concludes:

“Noble lies are a trap. We cannot predict the public’s behavior, and loss of trust is devastating. The general population is far too skeptical to blindly follow the advice of experts, and far too intelligent to be easily duped.”

True. And that loss of trust is how we arrived at mandatory.

Tyler Durden Sun, 08/08/2021 - 23:50

Restrictions On Unvaxxed See Explosion Of Fake Vaccination Cards In US & EU

Tyler Durden — Mon, 09 Aug 2021 03:25:00 +0000

Restrictions On Unvaxxed See Explosion Of Fake Vaccination Cards In US & EU

A week ago we detailed the story of the American couple getting fined $50,000 by the government of Canada after they were caught providing border agents with fake COVID-19 "proof of vaccination" documents at the airport. We noted this seeming unusual occurrence was likely the tip of the iceberg in terms of the rise of an entire sophisticated counterfeit documents industry geared toward getting around new restrictions quickly going into place, such as the recent New York City ban on the unvaccinated dining in restaurants or entering gyms and other public venues. This also as so-called digital 'COVID passports' aren't yet uniform within the US or especially around the globe, and as global protests and pushback are on the rise, especially in Europe.

And most recently the United States has mandated that all federal workers must be vaccinated, with the only alternative being a regimen of regular testing and mask-wearing. Major employers are also increasingly issuing mandates for their in-person staff. There will without doubt be many who refuse what is still at this point an experimental vaccine (given lack of formal FDA approval and the regular rigorous procress), while also naturally desiring to avoid the extreme inconvenience of daily social distancing and generally being placed in a ~~second class~~ "non-vaxxed" social category.

The Wall Street Journal has documented multiple instances of fake vaccination cards and their proliferation on the internet, based largely on the relatively easy to forge initial CDC vaccination cards. "In the U.S., fake vaccination cards purportedly issued by the Centers for Disease Control and Prevention have appeared for sale on sites such as Amazon, eBay and Etsy," the report details.

Getty Images

"In May, officers arrested a bar owner in California for allegedly selling fake vaccination cards costing $20 each," it continues. "The alleged perpetrator was charged with identity theft, forging government documents and falsifying medical records."

And a DOJ spokesman confirmed in the report that "While we do not have definitive numbers, we are seeing more of these types of schemes recently." This includes the example of a California licensed practitioner of homeopathic medicine, described as running a scheme where clients would order "immunization pellets" and receive CDC vaccination cards in return, including detailed instructions on how to write in specific vaccine lot number information into the card.

Currently there's talk in the US of implementing a uniform digital vaccination "proof" for each person fully vaccinated; however, as the WSJ details further in Europe where such an EU pass does exist, fakes are still popping up all over:

Despite the more-secure format, fake versions of the EU digital certificate have multiplied. In Italy, there are about 30 social-media profiles purporting to sell fake certificates, about 500 of which have been sold in the past few months, according to Ivano Gabrielli, an Italian police commander who oversees online fraud investigations. Telegram is the main platform being used for the sale of the fake certificates, he said.

Ultimately the current fakes that are out there, especially the digital fakes, are believed to be easily detectable. But this would all change in a scenario where information in a nation's vaccine registry might be hacked, for example.

Vaccine passports could create 'two-tier society', equality watchdog warnshttps://t.co/gzbJinfzcR
— BBC News (UK) (@BBCNews) April 15, 2021

But like with any certificate or sought-after identity-related document in the past, forgers will without doubt get better at the craft.

The WSJ report provided another interesting example of fraudulent vaccine passes in the EU as follows:

An Italian channel on Telegram is currently advertising a digital version of a vaccine certificate for €100, the equivalent of $118, and a printed copy for €120. "Family packs" consisting of four passes can be had for €300 for digital versions and €350 for printed copies. Passes can be paid for in cryptocurrencies such as bitcoin and in some cases through PayPal or with Amazon gift cards.

Illustrative

Authorities in the US and EU are working the counteract and shut down the increasingly sophisticated schemes.

Without doubt the fakes will continue to be proliferated, and will show up increasingly in the United States as more locales and possibly even entire states enact a 'two-tiered system' of sorts segregating the status of the vaxxed vs. unvaxxed. Each new day of this and it seems we're all living in a Black Mirror episode.

Tyler Durden Sun, 08/08/2021 - 23:25

They're Normalizing Robot Police By Calling Them "Dogs"

Tyler Durden — Mon, 09 Aug 2021 03:00:00 +0000

They're Normalizing Robot Police By Calling Them "Dogs"

Authored by Caitlin Johnstone,

Hawaii police are defending their use of pandemic relief funds for a robotic “police dog” made by Boston Dynamics which scans homeless people’s eyes to see if they have a fever.

“If you’re homeless and looking for temporary shelter in Hawaii’s capital, expect a visit from a robotic police dog that will scan your eye to make sure you don’t have a fever,” says a new report from Associated Press.

“That’s just one of the ways public safety agencies are starting to use Spot, the best-known of a new commercial category of robots that trot around with animal-like agility.”

“Acting Lt. Joseph O’Neal of the Honolulu Police Department’s community outreach unit defended the robot’s use in a media demonstration earlier this year,” AP reports.

“He said it has protected officers, shelter staff and residents by scanning body temperatures between meal times at a shelter where homeless people could quarantine and get tested for COVID-19. The robot is also used to remotely interview individuals who have tested positive.”

Hawaii Police Department starts using Boston Dynamics robot dogs in order to avoid any unnecessary social contact amid the pandemic

Follow our Telegram https://t.co/Q7gy2WKwCh pic.twitter.com/ycRw0ts9KN
— RT (@RT_com) August 1, 2021

This has understandably elicited criticism from civil rights advocates.

“Because these people are houseless it’s considered OK to do that,” Hawaii ACLU legal director Jongwook Kim told AP.

“At some point it will come out again for some different use after the pandemic is over.”

This report comes just days after we learned that police in Winnipeg have also obtained a “Spot” robot which they intend to use in hostage situations.

Winnipeg Free Press reports:

The Winnipeg Police Service is set to acquire a pricey dog-shaped robot, to be used in hostage situations, that’s already been ditched by police in New York City.

“Spot” is made by Boston Dynamics, which sells the device for US$74,500. Winnipeg police are spending $257,000 to acquire and use Spot. The 32-kilogram robot “has the ability to navigate obstacles, uneven terrain (and) situations where our traditional robot platforms can’t go into,” said Insp. Brian Miln at a news conference Wednesday.

Months earlier the New York Police Department cancelled its lease of the same type of robot they obtained last year following public outcry. More from AP:

The expensive machine arrived with little public notice or explanation, public officials said, and was deployed to already over-policed public housing. Use of the high-tech canine also clashed with Black Lives Matter calls to defund police operations and reinvest in other priorities.

The company that makes the robots, Boston Dynamics, says it’s learned from the New York fiasco and is trying to do a better job of explaining to the public — and its customers — what Spot can and cannot do. That’s become increasingly important as Boston Dynamics becomes part of South Korean carmaker Hyundai Motor Company, which in June closed an $880 million deal for a controlling stake in the robotics firm.

Winnipeg police acquire controversial robot dog https://t.co/XepH5wki0g
— Winnipeg Free Press (@WinnipegNews) July 28, 2021

To be absolutely clear, there is not actually any legitimate reason for any normal person to refer to these machines as a “robotic dog”, or a “high-tech canine”, or by a cutesy cliché name for a pet. These are robots. Robots that are being used by police forces on civilian populations. If the robots being used had two legs, or eight, they would not be able to apply such cuddly wuddly labels, and public alarm bells would be going off a lot louder.

Which is of course the idea. As AP noted above, Boston Dynamics is acutely aware that it has a PR situation on its hands and needs to manage public perception if it wants to mainstream the use of these machines and make a lot of money. Because it’s a known fact that westerners tend to be a lot more sympathetic to dogs than even to other humans, arbitrarily branding a quadrupedal enforcement robot a “dog” helps facilitate this agenda.

On-the-ground robot policing is becoming normalized today under the justification of Covid-19 precautions in the same way police around the world have normalized the use of drones to police coronavirus restrictions, at the same time police departments are rolling out dystopian systems for predicting future criminality using computer programs and databases.

This is fucking insanehttps://t.co/XR4cEgIHxv pic.twitter.com/Im1aqeBGRk
— Fentanyl Toucher (@lib_crusher) July 25, 2021

This is all happening as the French army is testing these “Spot” robots for use in combat situations, years after the Pentagon requested the development of a “Multi-Robot Pursuit System” which can “search for and detect a non-cooperative human subject” like a pack of dogs. New Scientist’s Paul Marks reported on the latter development back in 2008:

Steve Wright of Leeds Metropolitan University is an expert on police and military technologies, and last year correctly predicted this pack-hunting mode of operation would happen. “The giveaway here is the phrase ‘a non-cooperative human subject’,” he told me:

“What we have here are the beginnings of something designed to enable robots to hunt down humans like a pack of dogs. Once the software is perfected we can reasonably anticipate that they will become autonomous and become armed.

We can also expect such systems to be equipped with human detection and tracking devices including sensors which detect human breath and the radio waves associated with a human heart beat. These are technologies already developed.”

These developments always elicit nervous jokes about Terminator movies and the idea of Skynet robots going rogue and enslaving humanity, but the far more realistic and immediate concern is this technology being used on humans by other humans.

For as long as there have been governments and rulers, there has been an acute awareness in elite circles that the public vastly outnumber those who rule over them and could easily overwhelm and oust them if they ever decided to. Many tools have been implemented to address this problem, from public displays of cruelty to keep the public cowed and obedient, to the circulation of propaganda and power-serving religious doctrines, but at no time has any power structure in history ever produced a guaranteed protection against the possibility of being overthrown by their subjects who vastly outnumber them.

The powerful have also long been aware that robot and drone technologies can offer such a protection.

Once the legal and technological infrastructure for robotic security systems has been rolled out, all revolutionary theory that’s ever been written goes right out the window, because the proletariat cannot rise up and overthrow their oppressors if their oppressors control technologies which enable them to quash any revolution using a small security team of operators.

Or, better yet, fully automated technologies which can fire upon civilians without the risk of human sympathy taking the side of the people. According to a recent UN report, a Turkish-made drone may have been the first ever to attack humans with deadly force without being specifically ordered to.

Live Science reports:

At least one autonomous drone operated by artificial intelligence (AI) may have killed people for the first time last year in Libya, without any humans consulted prior to the attack, according to a U.N. report.

According to a March report from the U.N. Panel of Experts on Libya, lethal autonomous aircraft may have “hunted down and remotely engaged” soldiers and convoys fighting for Libyan general Khalifa Haftar. It’s not clear who exactly deployed these killer robots, though remnants of one such machine found in Libya came from the Kargu-2 drone, which is made by Turkish military contractor STM.

So at this point we’re essentially looking at a race to see if the oligarchic empire can manufacture the necessary environment to allow the use of robotic security forces to lock their power in place forever before the masses get fed up with the increasing inequalities and abuses of the status quo and decide to force a better system into existence.

What a time to be alive.

* * *

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Tyler Durden Sun, 08/08/2021 - 23:00

US Embassy Alerts All Americans To Depart Afghanistan "Immediately" As More Provincial Capitals Fall

Tyler Durden — Mon, 09 Aug 2021 02:35:00 +0000

US Embassy Alerts All Americans To Depart Afghanistan "Immediately" As More Provincial Capitals Fall

Over the weekend a second provincial capital has fallen to the Taliban, this time in the north of Afghanistan, just days after the southern Nimruz province which borders Iran fell reportedly with barely any resistance from US-trained Afghan national forces.

On Saturday Sheberghan, the capital of Jowzjan province, was captured at a moment the US State Department has sounded the alarm for any American citizens still remaining in the country, with just a little over a month to go until Biden's Sept.11 complete troop exit deadline. The US embassy in Kabul had urged Americans to leave the war-torn country "immediately" while noting they can't rely on government flights.

Image via NDTV

A US Embassy security alert on Saturday stated that "Given the security conditions and reduced staffing, the Embassy’s ability to assist U.S. citizens in Afghanistan is extremely limited even within Kabul."

At the moment southern Helmand province is also under threat of imminent fall the Taliban, who are gaining momentum also through increasing capture of military bases and equipment, including US Humvees and weaponry - which the Islamist militants have been parading of late.

The Wall Street Journal summarizes the significance of this latest provincial capital to fall to the Taliban advance as follows:

"The fall of the city of Sheberghan is particularly important because Jowzjan has long been the traditional stronghold of ethnic Uzbek warlord Abdul Rashid Dostum, one of the country’s main anti-Taliban leaders who served as Afghanistan’s vice president until last year."

Sheberghan also borders Turkmenistan, which means it's yet another huge blow to Kabul in terms of losing an important hub of regional trade, also at a moment the Taliban controls the vast majority of key border crossing areas.

The U.S. Embassy urges U.S. citizens to leave Afghanistan immediately using available commercial flight options.

Please see our #SecurityAlert below⬇️for more information. https://t.co/tU1qywKd5w
— U.S. Embassy Kabul (@USEmbassyKabul) August 7, 2021

Crucially these latest rapid Taliban gains have been made in the south and north even as Afghanistan's military with the aid of the United States has conducted large-scale airstrikes. "As attacks intensify, Afghan security forces and government troops have retaliated with increasing airstrikes, aided by the United States. This has raised growing concerns about civilian casualties across the country," NBC News writes.

This strongly suggests that even if the Pentagon were to provide full and immediate air support to Afghan forces across all theaters, it would likely do little to blunt the insurgents' offensive. It could now be a mere matter of months or even weeks before Kabul finds itself under siege.

Tyler Durden Sun, 08/08/2021 - 22:35

California College Students Contest Vaccination Mandates To Return To Campus

Tyler Durden — Mon, 09 Aug 2021 02:10:00 +0000

California College Students Contest Vaccination Mandates To Return To Campus

Authored by Drew Van Voorhis via The Epoch Times,

Some students across California school systems are concerned about recently implemented requirements to get the COVID-19 vaccine prior to stepping foot on campuses again in the fall, saying it should be their decision about what they put in their bodies.

The University of California (UC) and California State University (CSU) systems announced in July that they would be requiring all students and staff to be fully inoculated against COVID-19 by the fall semester, backtracking on their statements earlier this year that vaccinations would not be mandated unless one of them was given full approval from the Food and Drug Administration (FDA).

“There is no alternative here for anyone who doesn’t want to get the vaccine,” James Barr, president of Cal State Fullerton College Republicans told The Epoch Times.

“It’s something that every student has to get now in order to continue their education, which I find repugnant in terms of [the school] administration. I don’t believe that any student should be mandated to take a vaccine in order to get their education out of the way,” he said.

Students plan to protest the vaccination requirements on Fullerton’s campus Aug. 7, requesting either that the rules be changed, or students at least be given the option to wear a mask instead. At this point, not all classes are available online, so not every student can continue their online education if they choose not to get vaccinated.

Barr said the point of the protest is not to oppose vaccines or tell others not to get vaccinated, but to fight for people’s right to make their own medical choices.

“Whatever happened to ‘my body, my choice’?” Amanda McGuire, Field Director for Lincoln Club Institute, a nonprofit working to connect students with resources to fight back against vaccine mandates, told The Epoch Times.

“All students want restored is the human right to control what goes into their own bodies. We have yet to understand the effects of such a mandate as this, but they are sure to do more harm than good in every way,” she said.

Not all students are against the mandates though, as some say they are necessary to keep the virus from spreading.

“I think it comes down to a matter of safety more than anything, regardless of where you stand on the issue,” Josh Mitchell, president of Associated Students Inc. at CSU Fullerton, told The Epoch Times.

“I think the university can’t in good conscience open up [without everyone vaccinated] considering how big our campus is. We have 45,000 students on campus next year and around 3,000 staff and faculty. Considering [that], if students are not vaccinated, we will have potential outbreaks, and because of that I believe that’s where the decision came from.”

Mitchell said that he personally has not received any messages from students who have been unable to continue their education due to not being vaccinated, but he wants to work to advocate for those students.

For some students, their opposition to the vaccine has less to do with its potential side effects and more about how it is developed. Lloyd Labriaga, president of Students for Life at UC Irvine, told The Epoch Times that because the vaccine is developed using fetal cell lines that originally come from abortions, many pro-life students do not want to take the vaccine.

According to the Los Angeles County Department of Public Health:

“In various stages of vaccine development and manufacturing, some of the COVID-19 vaccines used cells originally isolated from fetal tissue (often referred to as fetal cells), some of which were originally derived from an aborted fetus,” as stated in a recent fact sheet (pdf).

“The use of fetal cell lines is a very sensitive and important topic within some faith communities and among individuals with concerns about the ethics of using materials derived in this way.”

Labriaga also said that college students, who are typically young and do not usually have severe reactions to COVID-19, should not be the target demographic for vaccine mandates.

“Most college students are very young, and we’re at the lowest risk levels from COVID. So why is UCI forcing us to take vaccine, wear masks, and social distance? All these three things for an age group that’s not likely going to get affected badly from it.”

CSU Fullerton did not immediately respond to a request for comment from The Epoch Times.

Tyler Durden Sun, 08/08/2021 - 22:10

14 Israelis Have Caught COVID-19 Even After Booster Shot, Some Hospitalized

Tyler Durden — Mon, 09 Aug 2021 01:45:00 +0000

14 Israelis Have Caught COVID-19 Even After Booster Shot, Some Hospitalized

The population of Israel has been looked upon of late as a global guinea pig of sorts given it was the first country out of the gate to implement a large-scale booster shot program for people 60 and up who've already been vaccinated with two rounds of the COVID-19 shot. This was announced only at the end of July, and the early data is beginning to trickle in.

Israel is considered to have among the world's highest vaccination rates, with 5.3 million of its citizens having been inoculated with two doses, with weeks ago headlines declaring it had reached 'herd immunity' - only for the headlines to give way to reports of the alarming rapid rise of breakthrough cases.

And now it appears that even the much touted COVID booster shot could be failing to protect: "Internal Health Ministry data shows that 14 Israelis have been infected with COVID-19 a week after receiving a booster shot, Channel 12 news reports," The Times of Israel writes Sunday.

Image via FT

Already over the weekend Israeli media is reporting that "serious cases" have hit a four month high, with over 324 patients hospitalized, many of them in critical condition.

It was only a little over a week ago that elderly Israelis began receiving the third shot, and so "early results" and observations have only now begun to come in, and it's not looking good. The Times of Israel continues in its breaking report:

The network says 11 of those infected are over the age of 60 — two of whom have now been hospitalized — while the other three got their third dose because they are immunocompromised.

If confirmed in larger samples, the figures could cast doubt on the effectiveness of the booster shot, which Israel has started administering before major health bodies around the world have approved it.

Channel 12 noted that the confirmed new infections were revealed based on tests performed one week after the group had received the third shot. Three of the above are being described as "younger patients".

This comes as the CDC and FDA have begun discussions on pushing forward with offering booster shots in the US - possibly as early as September, according to some reports.

Israeli Prime Minister Naftali Bennett says people are rushing to get a third vaccine shot as protection from the surging delta variant of the coronavirus. https://t.co/NhNEMu2fC3
— WTOP (@WTOP) August 8, 2021

The Jerusalem Post has subsequently issued further details of the new 'post booster jab' cases as follows:

Of the 422,326 Israelis who have so far received their third dose of Pfizer's coronavirus vaccine, 14 have so far reportedly contracted the disease in tests performed one week after the shot, N12 reported on Sunday evening.

Of the 14 confirmed cases, 11, are over the age of 60, and 3 are younger patients who are at a greater risk due to immunosuppresive diseases. Two have so far been hospitalized.

So now even a third jab might be powerless amid the current Delta variant wave (and no doubt others to follow)?

ISRAEL: JUST IN: 14 Israelis got COVID a week after receiving their third vaccine (booster) shot. 11 of them are over 60, 2 of them hospitalized.
— KolHaolam (@KolHaolam) August 8, 2021

Regardless, Anthony Fauci, has already begun making the pitch for a third shot "reasonably soon" while making the rounds on the big Sunday shows...

"We need to look at them in a different light," Fauci said of boosters on CNN’s "Fareed Zakaria GPS” on Sunday, according to Bloomberg. “We would certainly be boosting those people before we boost the general population that’s been vaccinated, and we should be doing that reasonably soon."

He began by noting the booster would first be made available for the immunocompromised and elderly (just like in Israel). "As soon as they see that level of durability of protection goes down, then you will see the recommendation to vaccinate those individuals," Fauci added.

Meanwhile USA Today wrote that "Some people are already taking the matter into their own hands, deciding to get extra doses – either a second or a third shot depending on which vaccine they got the first time. One doctor referred to the phenomenon on Twitter as 'booster mania.'"

Tyler Durden Sun, 08/08/2021 - 21:45

People Left Cities For Rural Zoom Towns. How Does That Impact Wildfire Risk?

Tyler Durden — Mon, 09 Aug 2021 01:20:00 +0000

People Left Cities For Rural Zoom Towns. How Does That Impact Wildfire Risk?

Via Priceonomics.com,

As the pandemic waxes and wanes and we look back on the last 18 months, it’s clear that different types of workers experienced differential economic impacts. On one hand, there are workers who need to be in a location to do their job. Many members of the workforce, including restaurant staff, hotel employees, and those in the events industry saw their financial livelihoods devastated as the pandemic shut down parts of the economy.

On the other hand, we also saw the boom of “Zoom workers”—or knowledge workers who can conduct their work online. These workers typically work from anywhere. For these workers, the pandemic enabled them to move out of the city and work in more rural locations with natural beauty.

As such, the pandemic has given birth to a massive real estate boom in these so-called “Zoom towns” where knowledge workers relocated during the pandemic. These picturesque locations, particularly in the West, have seen a spike in real estate prices.

But there is tremendous risk associated with these growing Zoom towns in rural areas —almost all of them are in high wildfire risk areas. Living in a cabin in the woods seems idyllic until a spark of lightning ignites the forest and endangers your home.

In this analysis, we examine the wildfire risk and property values of popular Zoom towns in the Western U.S. At CAPE Analytics, we use artificial intelligence to analyze vast quantities of geospatial imagery to help insurers and other companies better understand properties and property risk. In this analysis, we look at U.S. Forest Service wildfire risk data, paired with Zillow home price estimates from the Zillow Home Value Index.

We found that the Zoom town with the highest fire risk in our sample is Mariposa, CA, a picturesque town near Yosemite, followed by Springdale, UT, and Lake Arrowhead, CA. Meanwhile, the most expensive Zoom towns in our sample were Aspen, CO, and Carmel-by-the-Sea, CA. The Zoom towns with the fastest price appreciation were Glen Ellen, CA, Truckee, CA, and Big Bear, CA, with annual price appreciation exceeding 25% in each location.

In general, our analysis finds that Zoom towns with lower home prices tend to carry higher wildfire risk. However, these same areas, which carry high fire risk, are also experiencing the highest appreciation in property values, as remote workers drive up demand. For those who deal with risk, such as the insurance industry, this can be a worrisome trend. Not only are more people moving to these higher-risk areas, but the property values (and subsequent potential losses) are growing at unprecedented rates.

Before diving into the results, let’s spend a moment on the data sources and methodology. The U.S. Forest Service provides wildfire risk assessment for much of the United States on a 0 to 5 score ranking system (0 being no risk, 5 being very high risk). We looked at the fire risk scores in cities and towns mentioned in news articles about pandemic relocation trends. This data was then paired with Zillow’s typical single-family home value estimates according to the Zillow Home Value Index (ZHVI) as of April 30th, 2021.

To start, let’s look at the list of Zoom towns we’ve assembled, ranked from the highest to lowest fire risk according to the U.S. Forest Service.

Chart via Cape Analytics

By a significant margin, Mariposa, CA, has the highest average wildfire risk at 3.8. Coming in second place is Springdale, UT, a town near Zion National Park. Lake Arrowhead, a Southern California vacation destination, and Glen Ellen, CA, a town in the middle of Sonoma wine country, round out the top four highest risk areas.

The lowest wildfire risk areas among Zoom towns in the Western United States are Butte, MT, followed by the arid locations of Palm Springs, CA, and La Quinta, CA. It should be noted that even in areas like Napa, CA, which ranks as low as 0.6 fire risk, this score is skewed by the more densely populated portions of each city. In the more rural surrounding areas of each town, the fire risk can be extremely high.

Next, we wanted to quantify the typical home price in each of these Zoom towns. The following chart ranks homes by typical value, according to Zillow, and compares those values to each town’s wildfire risk.

Chart via Cape Analytics

Aspen, Vail, Sun Valley, and Park City, all small Western ski towns, make up four out of the five most expensive places. In second place is Carmel-by-the-Sea in California. All of these top five areas have relatively low wildfire risk on average. The least expensive Zoom towns in our sample are Butte, MT, Mariposa, CA and MT, Taos, NM. In Butte and Taos, at least, the wildfire risk is lower than the typical city in this study.

How do home prices correlate with fire risk in these idyllic rural locations? The following chart shows the Zillow home values segmented by wildfire risk bucket.

Chart via Cape Analytics

In general, the more wildfire risk in the area, the lower the home prices. Homeowners insurance is higher in fire-prone areas (or impossible to obtain), which may also help drive down home prices. Another possible explanation is that homes in particularly high-risk areas tend to be more remote, closer to wildland, and further away from amenities that drive up home prices.

Finally, let’s turn our attention to where home prices are rising the fastest over the last year as some people work from home in more rural areas. Below is the chart of the Zoom towns with the largest 1-year price appreciation.

Chart via Cape Analytics

Glen Ellen, a town in Sonoma wine country, has the highest appreciation rate over this last year, with homes increasing 28.8% in just one year. Truckee, the ski town on the California side of the Lake Tahoe area, has had the second-highest price growth in the last year, with homes selling for 27.7% more than the year prior. As Bay Area workers flee to Lake Tahoe, Truckee is a more affordable homeownership option than being closer to the lake in Tahoe City. Big Bear Lake in California also saw price appreciation greater than 25% in one year.

Price appreciation typically is a consequence of increased demand for a given amount of housing stock. The following chart shows the average price appreciation by fire risk cohort among locations:

Chart via Cape Analytics

Unfortunately, we have seen a substantial increase in demand for homes that happen to be in high fire risk zones. The highest price appreciation has been in areas with a high fire risk score of 2-3, which includes many areas that have had devastating wildfires in recent years, followed by areas with moderate fire risk of 1-2.

The COVID migratory pattern of people leaving cities has led to an influx of homebuyers in these higher wildfire risk areas. For people fortunate enough to be economically unscathed by the pandemic, working remotely has opened living options. As a result, many are relocating to mountain towns, wine country, or near a picturesque national park. As more demand for rural living leads to more housing and higher home value in those areas, the risk and possible total destructive value of a wildfire increases in turn.

New homeowners in these areas should be aware of this heightened risk and take mitigation measures, such as maintaining a minimum, 10-foot defensible space perimeter between the home and any vegetation. A recent Cape Analytics analysis, for example, shows that clearing vegetation from 10 feet around a home reduces the risk of damage from a wildfire by 80% or more, in very high-risk areas.

As climate change and associated wildfire risk worsen throughout the Western U.S., it’s paramount for government officials, insurance companies, and homeowners to understand the changing risk landscape and the possible negative impacts on people and property.

* * *

This post is from Cape Analytics a Priceonomics Data Studio customer. Does your company have interesting data? Become a Priceonomics customer.

Tyler Durden Sun, 08/08/2021 - 21:20

Colleges Dole Out Cash, Free Parking, Laundry & Ski Passes To Make Up For On-Campus Housing Shortages

Tyler Durden — Mon, 09 Aug 2021 00:55:00 +0000

Colleges Dole Out Cash, Free Parking, Laundry & Ski Passes To Make Up For On-Campus Housing Shortages

The "year off" school that many students took due to the Covid-19 pandemic is coming back to bite colleges this fall in the form of a major housing shortage.

In fact, schools like Middlebury College in Vermont and Dartmouth College are offering incentives to try and alleviate the stress of what is going to be a housing crunch when the new school year starts. Middlebury is giving its students ski passes to try and move them to satellite housing, while Dartmouth is offering $5,000 to students to get them to back out of living on campus. Dartmouth is also converting "common areas into bedrooms and doubles into triples," Bloomberg reported this week.

Justin Anderson, a Dartmouth spokesman, commented: “Other potential solutions, such as new modular housing or blocks of hotel space, proved to be less feasible.”

Middlebury's enrollment was up 13% to 2,880 from a typical year. It has also moved its room and board discount up to 50% for students who opt to live off campus and shuttle to campus. This deal includes ski passes, free laundry and a faculty parking pass.

Derek Doucet, dean of students, commented: “Our first priority is to provide an in-person educational experience to all active students who wish to be here.”

The shortage is going to hit harder at many liberal arts colleges where the on-campus experience is part of the appeal of the school. Alex Bloom, director of undergraduate enrollment research at EAB Global Inc, said that people at these schools "want to walk around and have a sense of intimacy, a small environment with access to everything" and that their "value proposition is most dependent on the in-person college experience.”

“The line between living and learning is practically nonexistent,” Pomona College's website says. 94% of students usually live on campus for all four years.

The shortage poses extra challenges since many students are excited about the prospect of resuming "normal" and again living on campus. “Living on campus was something I really wanted to do because I’d been away for so long,” said 20-year-old Valeria Andrade at Dartmouth.

Many other colleges are expecting robust enrollment for the coming year as well. Harvard, for example, is set to have its largest freshman class since World War II, the report noted.

Tyler Durden Sun, 08/08/2021 - 20:55

Jim Rickards: Stop The Lies!

Tyler Durden — Mon, 09 Aug 2021 00:30:00 +0000

Jim Rickards: Stop The Lies!

Authored by James Rickards via DailyReckoning.com,

Health officials continue to lose credibility over COVID-19. They seem to change their minds daily based on whim rather than science. But that’s been the case since the pandemic started.

Going back to last January, official comments on COVID have been mostly wrong. The comments were either outright lies or were prescriptions based on politics, not medicine.

In January 2020, the World Health Organization said there was no human-to-human transmission of COVID. They knew better because of data from China, so that was a lie. Dr. Anthony Fauci said there was little risk of COVID coming from China to the U.S. Another lie.

Then, over the course of 15 months, Fauci said not to wear masks, then he said to wear them, then he said you could take them off. Now, he says it’s time to put them on again.

Fauci is an over-the-hill bureaucrat, not a true scientist. His greatest skill has been successfully navigating the Washington swamp for the past four decades. He’s heavily conflicted because he owns patents on inputs to the vaccines.

He also has a lot to hide, because he funded the Wuhan laboratory coronavirus research in the first place. The science is clear that masks don’t work (because the virus is far smaller than the mask weave), and lockdowns don’t work (because people indoors in confined spaces spread the virus faster than people outside who are in motion).

Masks are positively dangerous for children because they force you to breathe your own CO2, which causes dizziness, lethargy, inability to focus and can cause people to pass out. The latest lie is Biden’s call for vaccine mandates for federal workers or weekly testing, masking and distancing.

What Vaccine Mandate?

The White House had repeatedly said there would be no federal vaccine mandates. It’s true that there is no single mandate that applies to all Americans. But there are now hundreds of mini-mandates that add up to the same thing.

Biden’s federal worker mandate covers 4 million federal employees and as many as 4 million federal contractors.

Meanwhile, universities are imposing vaccine mandates on returning students. Large companies like Facebook and Google are imposing vaccine mandates on their workers. New York State has imposed a vaccine mandate on state workers. Sports and entertainment venues are barring anyone who cannot prove they have been vaccinated.

When you add it all up, we’re turning into a society of vaxxed and unvaxxed where the latter are denied the opportunity to work, attend school, go out for a show or sporting event and so on.

“There is no vaccine mandate,” they’ll say. But in reality, the unvaccinated will be treated as second-class citizens who can’t live regular lives or participate fully in society.

Why Are So Many Vaccinated People Getting Sick?

This is all over so-called vaccines that are really experimental gene modification treatments with dangerous side effects and limited efficacy since many vaccinated individuals are now being infected again. The vaccines won’t stop you from getting the virus or from spreading it.

In one Massachusetts town, for example, 74% of new cases have already been vaccinated. Data from overseas is even more revealing since many countries report new cases daily, which doesn’t allow for the type of data manipulation U.S. health agencies often engage in.

In Israel, about 85% of adults over 30 are fully vaccinated. Over 90% of those above 60 are fully vaccinated. But Israel is experiencing a dramatic rise in new cases. The number of serious cases has increased about 10 times since the beginning of July. Importantly, the vast majority are vaccinated.

The data reveal that rates of severe cases among the vaccinated are currently as high as the unvaccinated’s rate just two weeks ago.

The Israeli Prime Minister, Naftali Bennett, warns that cases may quadruple within three weeks and that authorities are preparing for new lockdowns (even though lockdowns have proven to be ineffective against stopping the virus).

Most Israelis have taken the Pfizer vaccine, incidentally.

Gene Therapy

But why should these vaccines stop you from getting the virus or from spreading it? Again, these aren’t vaccines in the traditional sense, which introduce weakened or inactive parts of a virus, against which your body produces antibodies.

Instead, these COVID vaccines introduce mRNA (messenger RNA) into your muscle cells. The cells then reproduce the spike protein. These vaccines are, therefore, a form of gene therapy.

Fauci has said that the recent surge in infections is a “pandemic of the unvaccinated,” that 99% of deaths were unvaccinated. But that’s another lie. The CDC’s own data indicated that 15% of fatalities occurred among the unvaccinated during the period in question. There’s reason to believe the actual figures are higher.

But the demands for universal vaccination continue. The American Medical Association (AMA) has reported that 96% of practicing physicians are fully vaccinated, based on a poll of 300 respondents.

The point is to try to convince those who aren’t vaccinated that if almost all doctors are vaccinated, you should be too. But a separate survey of 700 participants conducted by the Association of American Physicians and Surgeons (AAPS) revealed that nearly 60% of respondents said they were not “fully vaccinated.”

Which numbers do you believe are more likely?

Cheap, Effective Therapeutics Are Suppressed

At the same time, health authorities have suppressed cheap, effective therapeutics like Ivermectin and hydroxychloroquine that can significantly reduce COVID hospitalizations and deaths. These drugs have been around for decades and are extremely safe.

But the alphabet soup of health agencies says they need more testing before they can be approved. Yet these are the same people who are shoving experimental gene therapy down people’s throats, which were rushed through on an emergency basis without the usual testing that takes years.

Any health professional who cites the benefits of these therapeutics can be banned from social media, despite numerous clinical studies that demonstrate their effectiveness, especially if used in the early stages of illness. They aren’t magic bullets, but the data indicate they provide substantial benefit.

Why are public health authorities so determined to suppress these cheap but effective therapeutics? Well, you might want to follow the money.

The FDA granted emergency use approval for the vaccines. But for the FDA to grant that emergency approval, “no formally approved alternatives” can be available at the time.

If these other therapeutics were deemed effective, the vaccines couldn’t be rushed through on an emergency basis. And a lot of powerful interests stood to profit from the vaccines. They wouldn’t profit from off-patent therapeutic drugs that might cost pennies per pill.

Meanwhile, the push for new lockdowns, universal vaccination and vaccine passports continues.

It’s a Brave New World, and it’s not going away soon.

Tyler Durden Sun, 08/08/2021 - 20:30

Covid Booster Shots Coming "Soon" Fauci Tells CNN

Tyler Durden — Mon, 09 Aug 2021 00:05:00 +0000

Covid Booster Shots Coming "Soon" Fauci Tells CNN

It's no longer a matter of if but when the US will mandate booster shots to those already vaccinated.

Speaking to CNN's Fareed Zakaria, Anthony Fauci who has managed to last at least a few weeks since a major flip-flop, said Covid-19 vaccine booster shots should be given “reasonably soon” to people with weakened immune systems.

"We need to look at them in a different light. We would certainly be boosting those people before we boost the general population that’s been vaccinated, and we should be doing that reasonably soon."

"The virus has changed. We went from a virus that was formidable but didn't transmit nearly as well as the virus we're dealing with today... the situation is understandably a bit complicated."

- Dr. Anthony Fauci on how well Covid vaccines protect against the new Delta variant. pic.twitter.com/vEVRGBgonU
— CNN Newsroom (@CNNnewsroom) August 8, 2021

It wasn't clear who would make the determination which potential subjects have a weakened vaccine system: perhaps Apple will comb through all American iPhones as part of its latest crackdown on personal privacy and alert the proper authorities if it finds a white blood cell count below a given (constantly changing, because this is after all "science") threshold.

Fauci spoke as debate grows over “breakthrough” infections among fully vaccinated people and whether approval should be given for booster shots. On Sunday, Israel, the first nation to roll out booster shots widely, said it had given more than 420,000 third shots to people 60 and over. At least 14 Israelis have already caught Covid-19 after having been injected with a booster shot, suggesting that the booster shot will be the first of many, and will likely last all the way through the mid-term elections because, well, mail-in ballots next November.

Fauci said most people who have compromised immune systems, including those with organ transplants or who are on chemotherapy, “never did get an adequate response” from their Covid-19 vaccination. This is yet another example of US "scientists" moving the goalposts in real time, and they will keep on moving that much is guaranteed: when asked if other groups should get booster shots, Fauci said the CDC and Prevention is ready to give such recommendations “as soon as” they see clear evidence to do so from the data.

As for the kind of data the CDC will be looking for, Fauci said that the CDC has been tracking the level of durability of protection for the elderly, those in nursing homes and young people, month by month. “As soon as they see that level of durability of protection goes down, then you will see the recommendation to vaccinate those individuals.”

Speaking one day after Barack Obama' epic birthday bash (despite it being shrunk for just the closest family and friends), Fauci said that health officials don’t take breakthrough infections “lightly,” warning that the delta variant which is more contagious and is fueling the surge of U.S. cases to more than 100,000 a day, will produce “more” breakthrough cases. Luckily, everyone inside the Barack Birthday Bash tent is exempt from such risks.

And speaking of furiously moving goalposts, Fauci said the Delta variant presents the additional problem that vaccinated people can also transmit the virus to someone else. That has led to the CDC revising its mask guidelines recently. But, he stressed: “The vaccines are still doing what you originally want them to do -- to keep you out of the hospital to prevent you from getting seriously ill.”

Actually, what the CDC "originally" wanted the vaccines to do, was to prevent those who were jabbed from infecting others. Only later did we learn that too was a fabrication.

Finally, Fauci reminded viewers that all Covid-19 vaccines remains experimental although he assured his pals at CNN that a full approval could arrive “within the next few weeks."

Tyler Durden Sun, 08/08/2021 - 20:05

Goldman Slashes China GDP On Delta Spread, Warns Of Inflation Spike Risk On "Supply-Chain Spillovers"

Tyler Durden — Sun, 08 Aug 2021 23:40:00 +0000

Goldman Slashes China GDP On Delta Spread, Warns Of Inflation Spike Risk On "Supply-Chain Spillovers"

While the rest of the developed world is scrambling to reverse the most recent spike in covid cases, attention is increasingly turning to China where the current Delta variant-driven outbreak has affected more regions than the winter resurgence, with 144 mid- to high-risk districts scattered over 11 provinces (vs. 72 districts over six provinces during the winter) as the following chart from Morgan Stanley shows.

While the case count is still relatively modest...

... the more transmissible nature of the variant and China's Covid-zero approach indicate that economic impact is inevitable. Evident of this, in addition to stringent lockdowns and travel restrictions in higher-risk regions, most low-risk regions have also imposed precautionary social-distancing measures in entertainment venues.

Echoing this downbeat take, Bloomberg commentator Ye Xie writes that "the delta variant adds to downside risks for the economy" noting that "the regulatory tightening adds to downside risk for China’s economy just as the Covid-19 virus reemerged. China began imposing travel restrictions as the delta variant fueled the nation’s broadest outbreak in more than a year. The dimmed growth outlook sent bonds rallying, pushing 10-year yields down for a seventh straight week, the longest decline since 2018. Meanwhile, the crisis at China Evergrande deepened, with its bonds dropping to new record lows."

In this context, shortly after Nomura trimmed its Chinese economic forecast, late last week Morgan Stanley also cut its China economic forecast - just before the latest disappointing trade data was released out of Beijing on Saturday which saw sequential declines in both imports and exports...

... and the bank now expects 3Q GDP to soften to 5.0% 2Y CAGR (vs. 5.5% in 2Q and 5.0% in 1Q), which corresponds to 5.1% YoY and 1.6% QoQ SAAR. According to the bank's China economist Robin Xing, "the downward revision is mainly attributable to a weaker service consumption including travel, catering and entertainment." That said, Xing expects 4Q GDP to rebound to 5.5% 2Y CAGR (or 4.5% YoY), considering: 1) backloaded fiscal support and infrastructure investment; and 2) a mild rebound in service growth conditional on stable domestic virus situation. Consequently, Morgan Stanley lowered its full-year GDP growth forecast by 50bp to 8.2%, with below-trend consumption growth as the lingering elevated uncertainty over the virus situation would cap hiring in service sectors below full employment

Fast forward to Sunday, when - never too far behind the curve - Goldman's China economists also took the machete to their GDP forecasts, writing that with the virus spreading to many of China's provinces and local governments reacting swiftly to control the spread of the highly contagious Delta variant, "we have begun to see softening in national aggregate data."

Similar to Morgan Stanley, Goldman slashed its Q3 real GDP forecast by 3.5% to 2.3% Q/Q (vs. 5.8% previously), even if - similar to MS - Goldman also predicted an offsetting hike to Q4 GDO growth which is expected to benefit from both activity normalization after the Q3 outbreak and policy support: "wWe revise up our Q4 real GDP forecast to 8.5% qoq ar (vs. 5.8% previously). This leaves our full-year 2021 projection modestly lower at 8.3% yoy (vs. 8.6% previously)."

Why just a modest one-quarter drip in GDP, and subsequent renormalization? The bank explains:

Our forecasts assume the government brings the virus outbreak under control in about a month and the virus outbreak and related control measures mainly hit service activities. Industrial activities appeared less affected as of early August. Even in Nanjing where restrictions are arguably among the tightest, industrial companies have managed to maintain operations. But we would closely monitor high-frequency indicators such as steel demand and listed companies’ guidance to see if there are signs of industrial activity disruptions at the national level.

Whether Goldman is right that the Chinese speedbump will last just one quarter is debatable, but a bigger problem emerges when looking at the potential for global supply chains to be snarled further, with Goldman's chief economist Jan Hatzius writing in a separate report that while he expects the direct impact of the Delta variant on the US economy to consist mainly of a delay in the final steps of reopening, rather than a major reversal, "many Asia Pacific economies have imposed tighter restrictions that in some cases have included factory closures, raising the risk of negative spillovers at a time when supply chain disruptions are already at record levels."

Why does this matter? Because as Haztius explains, significant "downside risks are possible if new restrictions constrain semiconductor or auto production in the region, or if China adopts tighter restrictions that affect exports to the US of several currently constrained goods" which could lead to further supply chain blockages, to wit:

Any setbacks in Asia could spill over to the US at a time when supply chain disruptions are already the most severe and widespread in decades, as shown in Exhibit 3. These supply-side problems accounted for much of the disappointment to our initial Q2 GDP growth expectations and have lingered into Q3

To narrow in on current vulnerabilities where Delta-related supply disruptions pose the greatest risk, the chart below shows the share of US imports from Asia Pacific economies for several intermediate inputs and consumer goods that have been in short supply recently.

Here, Goldman highlights three key risks.

First, Asia Pacific countries account for about half of the semiconductors used in the US. Our sector analysts do not expect shutdowns of semiconductor plants themselves because cleanliness standards are exceptionally high even in normal times, but the plants rely on a long supply chain in the region that could be vulnerable to tighter restrictions. The final packaging and export steps also pose some risk.
Second, the US imports just under 20% of its autos from the Asia Pacific region. Our sector analysts see some risk that auto parts producers in Southeast Asian countries with especially stringent lockdowns could further reduce production in Japan, where Toyota has already announced a brief production halt. Any reduction in auto exports to the US would worsen already tight new auto inventories in the US.
Third, US imports from China account for 7-9% of domestic use of several vulnerable goods, including plastics, semiconductors, furniture, and apparel. If China—which is also experiencing supply chain challenges related to weather and flooding in July—needs to adopt tighter measures that hamper either production or exports, the US could also see moderate negative spillover effects in these areas.

But the biggest threat of all, in a time of "transitory inflation" when everyone is keeping one eye on stratospheric trans-Pacific container shipping rates which ensure far higher inflation until there is significant renormalization...

... is that "any setbacks in the Asia Pacific region could also pose upside inflation risk, especially for autos and other goods that require semiconductors. Port closures or stricter control measures at ports could also put further upward pressure on shipping costs, which are already very high." Hatzius lists three specific inflation risks from extended Delta-related restrictions in China and Asia-Pacific:

First, further delays in the rebuild of auto inventories would push back the timeline for new and used car price normalization.
Second, any further hit to semiconductor output could raise prices on a range of consumer electronics that require them.
Third, port closures or stricter virus control measures at ports could further increase shipping costs from East Asia to the US, which are already extremely high due to container shortages and remaining restrictions on international transport services.

In other words, if China really wants to tighten the screws on the Biden admin and send already soaring US prices into orbit, all it has to do is develop a sudden case of the "Delties", shut down its ports for a few weeks and watch as the US screams in terror as "transitory" hyperinflation takes hold.

Tyler Durden Sun, 08/08/2021 - 19:40

Gold Flash Crashes By Almost $100 As $4 Billion In Sell Orders Hit

Tyler Durden — Sun, 08 Aug 2021 23:22:14 +0000

Gold Flash Crashes By Almost $100 As $4 Billion In Sell Orders Hit

In the liquidity void that follows the resumption of futures trading, and which saw US futures trade modestly lower, a sudden burst of selling in the gold futures contract sent Gold pries plunging to as low as $1,677.0 or almost $100 lower from the Friday close of $1,761.50.

Together with Friday's post-payroll plunge, this has been the biggest 2-day drop in gold (in dollar terms) since the March 2020 crash.

However, unlike Friday when gold moved in response to the spike in the dollar and the surge in yields...

... there was no offsetting move in any securities after the futures reopen (the 10Y traded back over 1.30% but the move was orderly) when over $4 billion notional, or some 24,000 contracts...

... were suddenly and furiously dumped in a completely price-indiscriminate manner whose apparent intention was to nuke the entire bid-stack.

While there was no news or even pair-trade correlation catalyst behind the move, technicians have noted a "death cross" alongside a technical breach of USD 1,750/oz which triggered liquidation stops to the downside.

Silver was also slammed...

And equity futures have tumbled to Friday's post-payrolls lows...

For now, gold appears to have stabilized around the $1700 level.

Tyler Durden Sun, 08/08/2021 - 19:22

University Spends $50,000 Removing "Racist" Boulder From Campus

Tyler Durden — Sun, 08 Aug 2021 23:15:00 +0000

University Spends $50,000 Removing "Racist" Boulder From Campus

Apparently a 'racist' boulder was making students at the University of Wisconsin's Madison campus feel uncomfortable to the point that the school actually spent some $50,000 removing it.

The story is so utterly absurd that we wish we could claim satire, but as Fox News writes, "Chamberlin Rock, which rests atop Observatory Hill, is named after a 19th Century geologist and former university president, Thomas Crowder Chamberlin, whose work centered on glacial deposits, according to a bio on the university’s website."

Wisconsin State Journal via AP

Controversy erupted after a nearly 100-year-old news article indicated that the dark colored rock had in the 1920s been often referred to using a racial slur. It was also believed the Ku Klux Klan had been active on campus at the time.

Activist student groups had in recent years dubbed the rock a "symbol of racism" and a "racist monument". Last week the campus brought in a crane to remove it... because "inclusivity" etc.

"The Black Student Union led the call to remove the rock last summer," an ABC report described. "Crews began removing it just before 7 a.m. Friday, securing it with straps and lifting it with a crane before moving it to a flatbed truck. It cost an estimated $50,000, covered by private donations, to remove."

The "racist rock" goes away, students can breath easy, apparently, Wisconsin State Journal via AP

The rock's removal has garnered national media attention, which points to just how over-the-top stupid and absurd the whole thing is, also summarized unironically in this quote: "Juliana Bennett, a senior and a campus representative on the Madison City Council, said removing the rock signaled a small step toward a more inclusive campus."

Perhaps inadvertently highlighting that grown adults are now calling inanimate natural objects "racist" - here's arguably the dumbest quote among them all...

Kenneth Owens, a Madison resident, said he was glad to see the rock go,

"It's not the rock's fault that it got that terrible and unfortunate nickname," he said. "But the fact that it's... being moved shows that the world is getting a little better today."

You KNOW the world has lost its mind when A ‘racist’ 42-ton boulder said to be two billion years old, was removed from the University of Wisconsin-Madison campus this weekend. The boulder had no comment pic.twitter.com/YizzMRFvOR
— Jimmy Lee (@CEOJimmyLee) August 8, 2021

We await the moment it gets "discovered" that the very soil under the students' feet is "racist". Maybe they'll just uproot and destroy the campus altogether, and everyone can go home and just be done with it all.

Tyler Durden Sun, 08/08/2021 - 19:15

Israel's Ambassador Issues Explicit Call For 'Regime Change' In Iran

Tyler Durden — Sun, 08 Aug 2021 22:50:00 +0000

Israel's Ambassador Issues Explicit Call For 'Regime Change' In Iran

Authored by Dave DeCamp via AntiWar.com,

Israel's Ambassador to the US and UN Gilad Erdan said Friday that Israel would ultimately like to see regime change in Iran.

"In the end, we would ultimately like to see [the government] overthrown and [for there to be] regime change," Erdan told Israel’s Army Radio when asked about his government’s Iran policy.

It’s no secret Israel is hostile to the Iranian government, but Israeli officials have previously avoided such explicit calls for regime change. What Erdan said was interpreted by The Times of Israel as "one of the most far-reaching comments by an Israeli official in favor of regime change in Tehran."

Illustrative: prior airstrikes in Syria

Erdan said he was working to rally the world against Iran. "We would like to see actions that are much more determined from the international community against Iran,’ he said. “We hope the international community will draw this conclusion as soon as possible because we need to put an end to this murderousness."

Erdan’s comments come after a week of almost daily threats from Israeli officials that they might take military action against Iran over a deadly attack on the Mercer Street, an Israeli-linked ship that was hit by a drone last week. The attack killed two crew members; a British national and a Romanian.

Watch my statement about Iran’s lies regarding its attack on the Mercer Street civilian vessel and what the Security Council needs to do: hold Iran accountable, condemn its activities, and use all means at its disposal to stop Iran’s malign activities. pic.twitter.com/yGW9QM97aW
— Ambassador Gilad Erdan גלעד ארדן (@giladerdan1) August 6, 2021

Israel, the US, and now the G7 have all blamed Iran for the Mercer Street attack, but Tehran maintains its innocence. On Thursday, Israeli Defense Minister Benny Gantz said Israel was prepared to attack Iran and urged that other countries also take action.

"We are at a point where we need to take military action against Iran. The world needs to take action against Iran now," he said.

Tyler Durden Sun, 08/08/2021 - 18:50

A Detailed Look At Who Is Buying Bitcoin Here

Tyler Durden — Sun, 08 Aug 2021 22:25:00 +0000

A Detailed Look At Who Is Buying Bitcoin Here

The past two weeks saw some of the strongest crypto returns this year, with the broader crypto index rallying around 25%. The move started when bitcoin (BTC) rocketed 15% in a two-hour window during early Asia time on Monday 26 July.

As we noted at the time, a break of the $35,000 level triggered stops on short positions, undermining record-high cash-margined futures open interest.

While many stories tried to tie the move to Amazon.com's posting of a job advert for a lead crypto analyst, this was not the catalyst as the news had first hid two days earlier, and the company was quick to quash speculation that it suggested they would consider accepting BTC payments.

Echoing our take that the move was a squeeze and technical in nature, UBS strategist Alexey Ostapchuk writes in his weekly "Crypto Compass" note that "underlining its technical nature, price momentum ran out of steam right at the 38.2% Fibonacci retracement point, extending a clear downtrend from May which now becomes immediate resistance around 41k. Above that the 200dma comes in around 45k, then the 50.0% and 61.8% Fibos near 47k and 51k, respectively."

While the rest of the crypto space was dragged up in the buying frenzy, but Bitcoin Cash (BCH), Ether (ETH) and XRP proved to be subsequent standouts

Taking a modest tangent here, we look at a recent analysis by Copper.co of on-chain data which confirms UBS' observations and reflects that small to medium investors have returned to accumulation ever since Bitcoin hit the $35k mark at the end of May. The fact that the cryptocurrency dropped further to $30k was, by on-chain metric standards, seen as a cost-averaging opportunity. Simply said, retail buyers accumulated more.

Digging deeper, Copper founds that since the start of this year, on-chain data shows that entity holding between 0 and 1 BTC increased by 137k Bitcoins, equivalent to 72% of newly mined supply. Meanwhile, miner balances have actually increased since the start of the year, meaning, not all mined Bitcoins have come to market.

While it may seem that we’re speaking about small amounts of Bitcoin, context is important. These small amounts of accumulated Bitcoin are more than triple Tesla’s now infamous purchase. These investors have also accumulated more than MicroStrategies ballooned treasury of 105k Bitcoins. There is a key point to further consider. The demand by these investors has been and remains very consistent.

In 2021 alone, entity holding between 0.01 and 0.1 BTC increased by over 40k Bitcoins. Between 0.1 and 1 BTC entity holdings saw a huge 86k increase. But more interesting is the fact that it was only on a few days of the year did these entity holdings decrease.

This category of investors is seemingly price agnostic. Since the end of 2013 when Bitcoin hit over $1000 for the first time, these entity holdings never saw a month in decline. Since 2018, when Bitcoin met its top before declining from near $20k to $3k, entity holdings have grown by nearly 500k. Every month saw growth.

So linear is the growth of smaller investors that Copper did some simple extrapolation on how retail might chip away at the supply, Satoshi-by Satoshi.

What if found is that average monthly growth rates for entity holdings have been fairly close year-on-year (see chart 4). And considering the consistent level of growth since 2018, Copper assessed the market supply should these levels continue and long-term investors remain price agnostic. After all, a near $65k BTC didn’t scare them off. Should growth continue at this pace up until Bitcoin reaches its next miner reward halving, entity holdings could grow to nearly 1.7mn BTC from just under 1mn today. This would account for nearly 75% of new mined Bitcoin (see chart 5).

Of course, there will come a time when price will matter. But to date, this can’t actually be seen by smaller investors. Growth has been particularly steady. And these entity holdings have increased more in the first seven months of 2021 than in all of 2020 already - at sky high prices (see chart 6).

This doesn’t account for institutional buyers. And what also needs to be considered despite not having actual figures, is that there is Bitcoin sitting on exchanges that also represents retail investors are accumulating.

The bottom line:

Small investors can make a big difference. Are these investors potentially new entrants attempting to gain a small slice of Bitcoin? Or perhaps traders rotating profits into Bitcoin? Listening in on the crypto community can seem particularly obnoxious to proponents of the traditional investor class. Every dip is an opportunity no matter the losses. Hold on to bitcoin for life. The institutions are coming. But what’s scarier is that so far, despite grandiose claims, they’ve been fairly accurate. One thing that time will test is the concept of “Stacking Sats”. Maybe they know something. So far, the data supports it.

To be sure, some of these moves can be traced to idiosyncratic developments: the launch of SmartBCH sidechain, Ethereum's widely anticipated and just completed 'London' hard fork, and Ripple's On-Demand Liquidity service. Notably, ETH is following the pattern it mapped around its seven previous upgrades quite closely.

It is also worth noting that with Ethereum volumes now surpassing those of bitcoin...

... it may be just a matter of time before ETH becomes the biggest cryptocurrency and has a lower volatility than its historically larger peer...

... especially if ETH is subject to a major gamma squeeze: as shown below, the bulk of long-dated ETH option strikes are in the 5000 and higher range, while most short-dated bitcoin option straks are below the current spot price.

Still, as Ostapchuk notes, "it's worth recognizing that these are all bigger market-cap coins which tend to be less volatile so would normally be laggards in any bull market.That this is instead an environment where market interest is unusually concentrated probably speaks of the hangover that is still affecting retail interest. It may also say something about attention focusing on better prospects for institutional adoption in the face of greater legal clarity."

As the UBS strategist goes on, headline comparisons and on-chain metrics further illustrate some of these dynamics. Compared with BTC and ETH, most altcoins remain substantially further from their recent all-time highs.

Which brings us to arguably the key question: who's buying?

According to Ostapchuk, the main bitcoin buyers continue to be medium-size whales, holders of 10k-100k coins, generally at the expense of bigger entities. Remarkably, the smallest cohort of users that own less than 1 BTC saw the next-largest increase in holdings having absorbed 131% of new bitcoins minted over the last fortnight.

Furthermore, the recovery in on-chain activity was primarily driven by receiving entities and accumulation addresses, with the former count now back at January levels and the latter reaching a new peak. Meanwhile, exchange balances and the number of pure senders remain low amid sub-par transaction volumes.

Separately, as noted recently, mining difficulty has rebounded with prices but remains well below its pre-China crackdown levels, lifting BTC issuance back to mid-May rates of growth.

As Ostapchuk summarizes, "such things generally accord with our composite measures that show trendiness scores below normal and no major coin prices screening as particularly stretched."

* * *

Away from market dynamics and looking at the news front, UBS points to a few holdouts like ShapeShift are going to extreme lengths to remain outside the regulatory fold. But most service providers are scrambling to become more compliant. Thus, Binance and FTX cut permitted maximum trading leverage on their platforms from 100 times or more to 'just' 20 so as to deflect attention and enhance consumer protection. Both face increased scrutiny over the 'open secret' that they have thus far done little to prevent US consumers from trading through their unregulated offshore entities. This was one of the points which Gary Gensler emphasized in a speech at the Aspen Security Forum on Tuesday. He also said that securing compliance from trading, lending and DeFi platforms should be a legislative priority, and that the Howey Test remained sufficient and suggested many digital assets are indeed securities so require registration. On a more accommodating note, he said he was looking forward to receiving SEC staff reviews of crypto ETF applications, especially those linked to BTC futures.

BlockFi also received a cease and desist order for new account openings in the first such clampdown on a platform that pays users a substantial (4-8% annualized) yield for staking cryptocurrencies that are then used to provide dollar loans. The New Jersey Attorney General alleges that these represent unregistered securities, and other states like Alabama and Texas have since followed suit. Such action is already reverberating across the sector. Another well-known industry name, Uniswap, delisted around 100 offerings on its trading interface, including tokenized stocks, options and indices.

The long-running Department of Justice investigation into Tether ratcheted up a notch just after the Fed and Treasury signalled their heightened focus on stablecoins. Bloomberg reported that executives there may have committed bank fraud by hiding the fact that their early business dealings were linked to crypto. Paxos also turned on its larger rivals in a scathing blog post. Fully 96% of its reserves are held in FDIC-insured cash deposits along with a further 4% in US Treasury bills; the equivalents for USDT and USDC are 4%+3% and 61%, respectively, with much of the remainder being unsecured commercial paper, secured loans, corporate bonds and some longer-dated Treasuries.

We got two surprises out of Washington. One was wrapped up in the much anticipated bipartisan infrastructure bill, which now incorporates enhanced supervision of digital asset transactions via the IRS to fund around USD28bn of the USD550bn in new outlays. Lobbying efforts by the Bitcoin Association and others succeeded in tightening the definition of 'brokers' in the final draft, though the USD10,000 threshold on transaction reporting stands. Some further changes are inevitable as it works its way through the Senate and the requirements won't go into effect until 2023. But this clearly marks a ratcheting up of the pressure on VASPs, who have hitherto been enjoying an unfair advantage over their legacy financial sector peers. The other twist came from Don Beyer (D-VA), chairman of Congress' Joint Economic Committee. He introduced a bill 'seemingly out of fresh air' that seeks to establish comprehensive oversight of crypto industry. Observers describe it as remarkably well researched and the most impressive piece of such legislation to date, making it too worth watching even if its immediate prospects for becoming law are less clear.

Finally, a handful of useful crypto charts courtesy of UBS:

Tyler Durden Sun, 08/08/2021 - 18:25

Knowing "When To Fold 'Em" Is Hard

Tyler Durden — Sun, 08 Aug 2021 22:00:00 +0000

Knowing "When To Fold 'Em" Is Hard

By Nicholas Colas of DataTrek Research

Highly skilled equity managers know how to find great stocks, but they are not so good at knowing which positions to sell. That observation comes from a recently published paper which is the subject of this post. The problem here is one of attention. Great PMs spend a lot of time looking for the next big idea and much less on evaluating their current positions. When they sell, that information gap leaves them open to unproductive mental shortcuts. Good news: the paper’s findings point to 4 hacks around this problem.

* * *

The decision to buy or sell a stock should be based on the same question: how will it perform in the future? Therefore, you’d think that highly skilled portfolio managers would be good at both. They should (generally) pick winners and sell them when they’re about to stop working.

A recently published NBER paper shows that’s not what happens, however. The paper’s title, “Selling Fast and Buying Slow: Heuristics and Trading Performance of Institutional Investors”, is a nod to Daniel Kahneman’s book “Thinking, Fast and Slow”. We love a good behavioral finance story, so the paper’s findings and our thoughts on them are the subject of this week’s Story Time Thursday.

The study, done by researchers at the University of Chicago, MIT, and UK data firm Inalytics, (link to the full paper below) looked at buy and sell decisions across 783 actively managed portfolios from 2000 to 2016. All portfolios were unlevered and actively managed by institutional, long-only managers who make concentrated bets (average of 80 positions at any one time). They outperformed by an average of 2.6 points/year over their benchmarks during this period, so we’re talking about a skillful group of individuals.

This graph summarizes the researchers’ key finding: these PMs were great at buying the right stocks, but not so great at knowing which names to sell out of their portfolios. The left side bar graph shows that these managers on average picked winners versus their benchmark. Great, but … The graph on the right shows they would have been better off either 1) selling a small part of every name in their portfolio or 2) randomly picking a name to ax, rather than selling the name they chose to cut loose.

The paper’s authors believe that “the stark discrepancy in performance between buys and sells is consistent with an asymmetric allocation of limited cognitive resources towards buying and away from selling”. In layman’s language, there’s only 24 hours in a day and PMs spend most of that time looking for the next hot investment idea. That leaves less time for keeping up on the names they already own. When pressed to sell out a position, therefore, they lean on counterproductive heuristics (mental shortcuts).

As odd as all this sounds, the realities of running a money management business do (sort of) demand it:

Describing new and interesting investment ideas is a huge part of the marketing process for investment managers. Many fund-raising meetings start with the allocator asking “OK, tell me a stock story I haven’t heard before”. Of course a PM is going to allocate more time to finding a new name rather than having to discuss something they’ve owned for a while and will therefore seem stale.
Wall Street doesn’t care about counterfactuals. If a PM has a winning record, they will generally be able to find new clients. “You’re a great money manager, but you sell the wrong names so I’m not giving you any money to manage” has never been said by anyone, ever.

Even with that cynical (but absolutely correct) second point, the paper does still offer 4 actionable observations that we believe are applicable to anyone looking to improve portfolio performance:

When a good investment process leads you to an idea, do all the work up-front and size it appropriately (i.e., no “cheerleading positions” – make it count). Selling low-conviction ideas (as measured by portfolio weighting) was responsible for most of the underperformance the researchers found in the data. These were names the PM had put on the sheet in a small way, but had not felt confident enough to size up. When they found something they thought was better, they ditched the small holding to fund their next purchase.
It can often be a good idea to wait for the next earnings report before selling. Researchers found that sales made on earnings announcement dates “substantially” outperformed the random-sale counterfactual (randomly selling a name or just cutting back the entire portfolio evenly). Oddly, purchases made on earnings announcement days saw no net outperformance versus other buys.
Don’t just focus on whether a name has been a big winner/loser for you when deciding to sell. Past performance is not a predictor of future returns, but the PMs studied still sold outliers (big winners or big losers) at rates “more than 50 percent higher” than other positions. As with the prior point, this bias did not exist when PMs made Buy decisions.
Value investors beware; the paper found that “funds that score higher on value appear to underperform most in selling”. Momentum strategy portfolios, by contrast, had no selling underperformance over the 1 year after their sales.

The bottom line to all this: where the head goes, the portfolio follows. Finding new ideas to own requires a disciplined approach, but so does making sales. The paper’s key finding is that even highly skilled managers mentally overweight “buying” and underweight “selling”, leaving them open to a range of unproductive heuristics when deciding to unload a position. The good news – for them and for all investors – is that correcting this imbalance comes down to just paying a bit more attention to what’s already in the portfolio.

Source:

Selling Fast and Buying Slow: Heuristics and Trading Performance of Institutional Investors, by Akepanidtaworn, Di Mascio, Imas and Schmidt, NBER 2021: https://www.nber.org/papers/w29076

NPR article about the paper and its findings: https://www.npr.org/sections/money/2021/08/03/1022840229/why-even-the-most-elite-investors-do-dumb-things-when-investing

Tyler Durden Sun, 08/08/2021 - 18:00

NYC Suburban Home Sales Plunge As Shortages Persist

Tyler Durden — Sun, 08 Aug 2021 21:35:00 +0000

NYC Suburban Home Sales Plunge As Shortages Persist

Even though we recently noted US housing supply could be finally catching up with demand, that doesn't seem to be the case for single-family homes in New York City's suburbs. The great exodus from the city for rural life continues, but there are not enough homes on the market, which dampened sales last month.

New York City's suburbs have been in a total euphoric buying frenzy over the last year due to an abundance of city dwellers buying up rural homes. This sparked insane bidding wars and homes that sold routinely over asking prices, many with cash offers that were willing to waive inspections and seller costs.

Bloomberg cites a new report from appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate that says for the first time in more than a year, home sales for July in New York City's suburbs declined.

Single-family home sales in Westchester County fell 36% and 31% in Long Island last month over the same period the previous year, the first decline since June 2020. Signed deals in the Hamptons fell for the second consecutive time since May 2020, with contracts in July diving as much as 61%.

The lack of homes with high demand among city dwellers plus low-interest rates has kept a bid in New York City's suburban markets. A hybrid workweek has allowed many to work at home and float between the office. As long as a good internet connection in the suburbs can handle Bloomberg Terminals and Zoom calls, demand for suburban homes will continue.

Only 150 homes were listed last month in the Hamptons, 36% fewer than a year ago. Westchester recorded a 48% drop in new listings while Long Island listings sank 18%.

Scott Durkin, chief executive officer of Douglas Elliman, said new construction is needed to satisfy demand. Those familiar with purchasing land and building a home from scratch understand that permitting to the actual build can take anywhere between 1-2 years.

There was one exception, Greenwich saw a 10% rise in signed deals last month, though listings fell 8.5%.

Home sales in New York City's suburbs are sliding as many are unwilling to chase prices higher. This market will eventually correct the supply imbalance, and prices will adjust accordingly.

Tyler Durden Sun, 08/08/2021 - 17:35

The Paradigm Shift In China

Tyler Durden — Sun, 08 Aug 2021 21:10:00 +0000

The Paradigm Shift In China

By Chetan Ahya, Morgan Stanley chief Asia economist

A profound policy shift is under way in China. To achieve the goals of ensuring social stability and making economic growth more sustainable, policy-makers have initiated a far-reaching and wide-ranging regulatory tightening cycle. This new course will shape the evolution of China’s economy and capital markets in the coming years. The implications? Rebalancing the shares of corporate profits and wages in GDP as well as recalibrating China’s equity risk premium.

Broadly speaking, we believe that policy-makers’ goal of ‘common prosperity’ focuses on the challenges of rising income inequality. Significantly, this parallels the unfolding policy shift in the US, albeit with different approaches and starting points (see Sunday Start: The Paradigm Shift). While this change in policy should not come as a surprise since income inequality is a global issue, the speed, scale and intensity of the measures we are seeing in China today are unexpected.

To take a step back, from a macroeconomic perspective, ‘common prosperity’ is consistent with rebalancing China’s economy towards consumption. In the early phase of China’s modern economic development, the most pressing need was to create employment opportunities to meet a sharp and sustained rise in China’s working age population. To address this, policy-makers took the approach of incentivizing investment, especially in the manufacturing sector. Costs for a wide variety of inputs across land, labor, capital and energy were kept low, while growth took precedence over the environmental impact of industrialization. The result was a rise in the ratio of fixed investment to GDP from 24% in 1990 to 42% in 2020, which catalyzed a period of fast-paced GDP growth, in the process lifting hundreds of millions out of poverty.

Economic development has now reached a critical juncture. Per capita income is on the cusp of crossing the high income threshold, but the distribution of household incomes has become markedly uneven. The most pressing need today is to address income inequality and raise the share of wages in GDP to support the long-standing goal of rebalancing the economy towards consumption. With a wage share of 52% and high levels of precautionary saving given limited access to healthcare, education and housing (especially for migrant workers), the proportion of private consumption in GDP is naturally limited. Raising the share of household incomes in GDP and reducing inequality while tackling the ‘three big mountains’ – escalating healthcare, education and housing costs – should support a higher share of private consumption.

Rebalancing towards consumption comes at a price. A higher wage share helps households but affects the owners of capital. A declining share of corporate profits in GDP means that even with relatively high rates of GDP growth, corporate profitability in aggregate will face headwinds.

What’s more, regulatory actions to rebalance the shares of labor and corporate profits inevitably raise the equity risk premium. Regulatory changes are often unpredictable, leading market participants to second-guess when the next wave will hit, which sectors might be affected and to what extent. In some instances, especially in recent years, regulatory actions have not kept pace with the growth of industries. Industries were initially allowed to grow and gain scale, attracting significant capital commitments for future growth and investment. But after exponential expansion, these industries have experienced a wave of intense regulatory action, limiting their scope severely and even disrupting their business models. Moreover, the uneven communications around regulatory changes and seemingly uncoordinated actions across different regulatory agencies leave global investors in need of clarity.

The upshot is that, in the near term, the effects of the regulatory tightening cycle should dampen overall corporate sentiment, curtail private investment and weigh on the growth outlook. It may also deter global investors from deepening their participation in China’s capital markets. Our equity strategists, Jonathan Garner and Laura Wang, believe that equity risk premium will remain at a relatively high level, at least in the near term, and that, over time, the MSCI China universe will gradually have a more balanced sector allocation with a reduced weight for Internet and a higher weight for sectors like Industrials and IT. From a capital markets perspective, our China financials analyst, Richard Xu, believes that the recent regulations may lead to further shifts in some IPOs from the US to Hong Kong.

Policy trade-offs and choices will likely determine the intensity of these headwinds. While all industries need regulations to varying extents, these constraints need to be balanced against the overarching objective of maintaining economic progress. The private sector plays a crucial role in innovation and sustaining productivity gains, growth drivers that have become more important against the backdrop of weakening demographics. We believe that policy-makers understand the challenges posed by dampening corporate sentiment and investment and will steer a middle course between tempering the worst effects of market forces while ensuring a reasonable and sustainable rate of economic growth.

Tyler Durden Sun, 08/08/2021 - 17:10

California's Dixie Fire Mushrooms To State's Second-Largest Wildfire Ever

Tyler Durden — Sun, 08 Aug 2021 20:45:00 +0000

California's Dixie Fire Mushrooms To State's Second-Largest Wildfire Ever

The Dixie Wildfire continues to ravage hundreds of thousands of acres, fueled by strong winds and bone-dry vegetation in Northern California. The wildfire has become the second-largest in California history, and the largest in the US as more than a hundred large fires burn.

PERFECT STORM: The combination of intense heat, extreme drought and powerful winds have caused the ‘Dixie fire' in northern California to become the largest of more than 100 wildfires burning in the western U.S. pic.twitter.com/24qhOmzWiB
— CBS Evening News (@CBSEveningNews) August 7, 2021

Dixie incinerated more than 447,000 acres as of Saturday night, according to the California Department of Forestry and Fire Protection (CAL FIRE). The fire is only 21% contained.

The wildfire's cause is under investigation. Bloomberg said Thursday utility giant PG&E Corp.'s power lines might have played a part in sparking the fire. On Friday, a federal judge ordered PG&E to provide details about the equipment and where the fire began.

The #DixieFire is now the 2nd largest fire in California’s history. As firefighters continue their fight against 11 major wildfires/complexes across the state, please take the time to ensure you and your family are #EvacuationReady by visiting https://t.co/gIN3kS6vHF. pic.twitter.com/92PFACuLYS
— CAL FIRE (@CAL_FIRE) August 8, 2021

Dozens of building structures were destroyed in the gold rush-era town of Greenville on Wednesday and Thursday.

Heat waves and a historic megadrought have transformed much of the American West into a tinder box. Dixie has become the third-largest fire in recorded California history and is the largest active fire in the US.

Smoke from the wildfires is spreading across the country.

Here's a look at the smoke forecast across the country for Sunday and Monday (Aug 8-9). Wildfires continue to spread across the western US, including the #DixieFire which is now California's largest fire in recorded history. #arwx pic.twitter.com/GLIF5DALv8
— NWS Little Rock (@NWSLittleRock) August 8, 2021

The National Interagency Fire Center (NIFC) reports "107 large fires have burned 2,179,454 acres" in 14 western states.

NIFC provides a grim weather forecast for the western US, stating, "the fire outlook continues to reflect warmer and drier conditions leading to the high potential for severe wildfire activity throughout the western United States through the rest of summer and into the fall."

The US Drought Monitor continues to show severe conditions across the western half of the US.

California's fire season could surpass last year's season, the worst fire season in state history.

None of this should be surprising since California's top fire officials were warning months ago that the worst wildfire season on record was quickly approaching.

Tyler Durden Sun, 08/08/2021 - 16:45

Sagging Productivity Will Fuel Stagflation

Tyler Durden — Sun, 08 Aug 2021 20:20:00 +0000

Sagging Productivity Will Fuel Stagflation

Authored by Bruce Wilds via Advancing Time blog,

For years businesses shouted they were seeing huge gains in productivity but the truth is that productivity can be difficult to measure. Before long, that will bring front and center the issue of how sagging productivity can help fuel stagflation. Covid-19 may shine a bit of light on this with many people now working at home, do not be surprised if companies are forced to ask, what are these employees really doing?

While it is easy to recognize places where huge gains are being made, productivity can suffer from something akin to the leaky bucket syndrome. I contend that over the last few years society, in general, has seen overall efficiency drop in many areas. This has been papered over by a slew of claims about how this and that are being handled much better.

The hype we hear often ignores the reality that many of the new systems touted as gains carry with them a lot of negatives. With the onslaught of computers and word processing the garbage in garbage out pipeline has exploded. This has resulted in a simple search for information dropping the person searching into a loop that circles back upon itself at the same time it renders little in the way of helpful information. The effect of this is evident in government, it is not uncommon for laws and bills flowing from Washington to run thousands of pages in length. In hindsight, while the old way of typing and copying was inefficient compared to modern methods, it did limit the number of pages a person could create.

The truth be told, many of us have wasted a full day or more on a machine that is malfunctioning or simply refuses to do our bidding. The idea we save time by not fixing something discounts the cost and waste created when we are forced to throw away an item that still has a great deal of useful value. Sometimes I have to wonder whether people will ever look up from their cell phones long enough to realize a lot of things are not working.

What You Get When People Don't Care

Saving a few dimes by outsourcing the payment of our local utility bills means those jobs no longer remain in our community. Also, getting answers takes longer for the consumer that ends up paying more in both time and effort. Public transportation based on tax-supported empty buses crisscrossing town on the half-hour does more damage to the environment than many of its supporters are willing to admit.

Another example is continuing to have the money-losing United States Postal Service rush to every mailing address in America six days a week delivering junk mail that people often don't want. Industries have grown up around this so-called public service. Advertisers exploit this. Where I live, even our tax-funded entities such as the park department, public school system, and state university feed into the waste by putting out glossy notices and thick books touting all that they are offering as a "public service."

The fact is in our current easy money economy a company's value is often no longer being closely linked to productivity. Stock buybacks using low-cost loans and bonds have both led to driving the stock market higher. Still, this is more about how big companies often exhibit a lack of skin in the game mentality. This is also being fueled by employees that don't expect to be with a company for very long in a society where many people move from company to company. These people seldom care if a job holds up over time or what happens after they move on.

In some ways, society has moved toward a nonchalant attitude towards companies that simply fail to impress. This can also be seen in non-profit concerns and quasi-government agencies, both seem to be having a difficult time finding good leaders to carry out their missions. The one thing most are able to do, however, is to pay these figureheads far more than they are worth.

The market may be a little bit soggy when it comes to the importance of productivity because so much of what the talking heads are focused on is tapering, tapering, and tapering. The recent flow of free easy money from the Fed has washed away much of the common sense of which Main Street was originally based. Having employees that are, productive, responsible, and knowledgeable has a great deal of merit.

The huge problem before us is that tapering is easier said than done and politically unpopular. QE has made the wealthy and powerful much richer and they "control the strings." Risk can build slowly and while some people predict a massive deflationary cycle may happen in the future as defaults surge, it is just as likely inflation is being baked into the whole financial system. This makes stagflation the most probable scenario we face in the future.

Tyler Durden Sun, 08/08/2021 - 16:20

What Goldman Really Thinks: "The Ante Will Be Upped When Taper Begins"

Tyler Durden — Sun, 08 Aug 2021 19:55:00 +0000

What Goldman Really Thinks: "The Ante Will Be Upped When Taper Begins"

Finance professionals are well aware that when it comes to research, Wall Street has two sets of books: one set, that produced by the official sellside Research division, tends to be perpetually cheerful and is meant to encourage commission-boosting risk-taking among the broader client group; and since this is the research that immediately leaks to the financial media and thus the broader public, it serves to bolster optimism in capital markets and encourage a continuation of a market-levitating status quo. An example of this is Goldman's David Kostin announcing last Thursday that he is hiking his year-end price target for the S&P500 from 4,300 to 4,700 primarily on lower Treasury yields. While there was little discussion about why lower yields which paradoxically signify a slowing economy and lack of reflation should be bullish for markets, that doesn't really matter - what matters is that market upside has received a Goldman stamp of approval, and now the rest of Wall Street's client-facing researchers will scramble to imitate Goldman with their own optimistic upgrades of where "they" think the market will close the year.

But is that what Goldman really thinks?

For the answer of what any bank - be it Goldman or anyone else - believes will happen, one has to step away from the research desk which is manned by bankers whose pay is not determined by whether they are right or wrong, but whether they produce enough convincing work product to validate the prevailing market narrative (in the current case bullish) and also facilitating client meetings with management teams, which is also why most ratings on Wall Street are "Buy" - few CEOs will meet with clients of a bank that just slapped a "Strong Sell" rating on their stock.

As a result, the truth often lies with the unofficial research created by a bank's Sales and Trading division, which is far more difficult to come by - in fact it usually is not even included in a bank's client blasts, one can't directly subscribe to it - and is proprietary to specific traders from either the Flow or Prop desks where it is shared on a direct email basis with a very small subset of generous clients, usually those whose soft dollar commissions surpass a given threshold. Furthermore, since these reports - and their authors - are judged and compensated on the feedback from their clients, and in many cases their own direct P&Ls, the analysis is usually far much more accurate because unlike regular research, if traders are wrong one too many times, they can not only lose their bonus if clients complain, but can also lose their job.

To get a sense of just how different official research is from S&T reports, below we have grabbed the latest note from Goldman's Tony Pasquariello, head of hedge fund sales at the bank. We urge readers to first skim the summary of Kostin's hyperbullish market upgrade which we published last week, which sees nothing but smooth sailing in the second half, and compare it to the note below which is far more somber and while admitting the bubble nature of the market, anticipates turbulence once the taper is announced, perhaps as soon as this month's Jackson Hole meeting: "S&P is trading at P/E levels only seen in the tech bubble ... and US Financial Conditions have never been easier ... so, yes, the ante will be upped when taper begins." Furthermore, retail euphoria is a stark reminder that we are in another dot com era: "the US retail investor is long and involved in a way that’s very distinct from the pre-2020 bull market ... and, we’ve lived in an era of investor euphoria that’s pushed the multiple up to demanding levels."

Perhaps most notably, his concern that the "current policy setting" may lead to ruins, but - well - one should never fight central banks, right: "while the current monetary approach may ultimately constitute an inappropriate policy setting, it’s been another year where you’ve been paid to just go with global central banks."

So without further ado, here is the latest client note from Goldman's Tony Pasquariello:

Markets/Macro

While preparing for a trip earlier this week¹, I dug through some old notes in a markets folder². Here are a handful of one-liners that stuck out, with a stab at the application to the present day:

i. "as a wise macro manager once said, it’s usually 3-4 big trades a year that drive 90% of your returns” ⇒ Q1 offered a very high quality opportunity set that’s hugely waned; that said, if the US labor market steams ahead, I’m relatively optimistic the back end of the year will offer a few more pitches to hit.

ii. “every macro process begins with a liquidity framework” ⇒ while the current monetary approach may ultimately constitute an inappropriate policy setting, it’s been another year where you’ve been paid to just go with global central banks.

iii. “equities don’t suddenly break because of over-valuation, they typically break when liquidity is tightened” ⇒ S&P is trading at P/E levels only seen in the tech bubble ... and US Financial Conditions have never been easier ... so, yes, the ante will be upped when taper begins.

iv. “the rally in equities is constantly in question; e.g. at 1250 in S&P, there was no workout in Europe -- Greece was going to default and there wasn’t enough capital in the European banking system to withstand it” ⇒ easier said than done, I know.

v. “certain years and certain cycles favor trading over investing, in others it’s the photographic negative” ⇒ in macro, 2021 has clearly favored aggressive trading; in micro, it’s been a mixed bag (investing at the index level, trading at the sector/factor level).

footnote 1: what stuck out when meeting with corporate clients was enormous focus on two topics: China (most every mention was shot through with some degree of negativity) and ongoing labor challenges (the difficulty of hiring, the friction of RTO and the persistence of COVID).
footnote 2: one of the journals I re-read was from 2016. it was striking how, eight full years on from the GFC, there was still so much scar tissue in the market narrative (as distinct from the investor euphoria that’s characterized the past 12 months).

Market Direction:

With respect to supply/demand and sentiment:

i. the bullish read: retail activity is off the boil from Q1, but it’s still a story of net demand (see chart 12 below) … corporate technicals are very healthy (all-time high in M&A, $727bn of expected buyback executions and $546bn of dividends from S&P) … there’s still a huge amount of cash sloshing around the global financial system (that’s a clunky statement, but I think you can detect it everywhere) … the put/call ratio on S&P is around all-time highs ... and various measures of investor sentiment are surprisingly well balanced (be it Goldman Investment Research or CNN fear/greed).
ii. the less bullish read: don’t miss the point, following a period of record demand, the US retail investor is long and involved in a way that’s very distinct from the pre-2020 bull market ... and, we’ve lived in an era of investor euphoria that’s pushed the multiple up to demanding levels.

Bigger picture, my simple macro process for equities always starts with (1) the trajectory of growth and (2) financial conditions. In an outright sense, current readings are superb (Q3 should market the apex of global economic output, and the GS Financial Conditions Index has never been more accommodative) … While in a comparative sense, the rate of change / second derivative of both factors will almost certainly be less impressive from here.

At the risk of boring you with the same conclusion, I still think that’s a good enough underpinning for US equities -- while admitting that the path for S&P from here is more likely to be a grind than a gap (and, that the overriding theme of macro trading is more likely to be “pro-cyclical” than full-throated “reflation”).

I’ll conclude with a reference to point 9 below, which vividly illustrates just how strong the building blocks of shareholder returns are today.

* * *

Quick points, charts:

1. Calibrating China: the amount of ink devoted to China right now is very significant. A few takes:

i. again, to this point in the game, global equity markets have notably compartmentalized this variable. I’m not speaking of just S&P -- the durability of other Asian markets, and EM in general, is a historical aberration: link.
ii. in a way, that’s a bit reminiscent of the 1990s wedge … I’m not suggesting it will be anywhere close to this magnitude, but note NKY dropped 50% in the decade ... whilst S&P ripped 430%.
iii. should the news flow continue, it’s reasonable to think the repatriation of capital out of the Chinets could be large and sustained. I think it’s worth remembering that -- outside of US mega cap tech -- the Chinese ADRs felt like one of the only games in town circa ’09-19.

2. Speaking of Japan: despite the Olympics, the domestic equity market is remarkably off the radar of global investors. while admitting my soft spot for Japan-style trading rallies, note the GDP sequencing: Q1 -3.9% ... Q2 +0.3% ... Q3E +4.0% ... Q4E +8.4% (that last estimate is well above consensus). My point here is I can see NKY lining up as great risk/reward again down the stretch should the pro-cyclical narrative reassert itself.

3. Rates: As a colleague put it, 1.25% on 10yr note yields is purgatory for the directional crowd. that said, again viewed through the prism of a stock operator, the ongoing push lower in real yields -- both in the US and Europe -- is an ongoing tailwind for risk in general, particularly the long duration plays (and, not just tech stocks, I continue to be drawn to healthcare).

4. Infrastructure: given the long runway here, in isolation I don’t think this is a story to plan your risk around, but on the margin our house view for infrastructure stuck me as decently positive: “overall, we continue to expect Congress to approve around $3 trillion over 10 years in additional spending, consisting of around $500bn from the bipartisan infrastructure bill and another $2.5 trillion from a budget reconciliation bill” (link).

5. This benchmark note on the future of work is worth a trip to the printer: For example: in surveying 50k full-time US and 15k UK workers, 20% of people don’t want to work from home at all post-pandemic, while 30% want to work from home five days a week. the remaining 50% of workers are fairly evenly spread between wanting to work one to four days a week at home. so, the biggest groups want either zero -- or five days -- in the office.

6. I thought this quote applies to many people in our trade: Novak Djokovic said in an interview with the Financial Times that "I can carry on playing at this level because ... I like hitting the tennis ball."

7. While on the topic of being good at your craft, h/t to one Dr. Sancheti, who is retiring after performing more than 55,000 surgeries in his career: link.

8. Yes, China is mired in a serious bear market. yet, amidst the breakdown, witness the explosive breakout in our China renewables / clean energy basket (you’ll see similar strength in the China innovation basket, ticker GSXACINO). this is also an interesting compare/ contrast with the US, where the domestic renewables basket (GSXURNEW) is 20% off the February highs with S&P ripping:

9. US Portfolio Strategy made notable upward revisions to our S&P price targets: YE’21 to 4700 (from 4300) and YE’22 to 4900 (from 4600). within that forecast, our new earnings estimates represent upward revisions of $14 for 2021 and $10 for 2022, reflecting expectations of stronger top-line growth and profit margin expansion. as you can see here, compared to the pre-pandemic levels of 2019, sales, income, EBIT and earnings should be up very meaningfully in 2021.

10. While increasingly viewed with ambivalence, the past three decades have seen a remarkable expansion in US corporate profit margins. as you can see here, while margins should make a fresh push to higher highs, in the forward our US Portfolio Strategy team is a bit less bullish than consensus, though this is largely because they assume a version of tax reform is passed by year-end and becomes effective next year (credit to Cormac Conners):

11. Yes, it’s been a huge year for new issues. that said, again as a % of equity market cap, it’s really not so wild:

12. Yes, a tremendous amount of money has flowed into global equities over the past few years. At the same time, demand for Fixed Income remains utterly huge (credit to sales & trading collegue Scott Rubner):

Tyler Durden Sun, 08/08/2021 - 15:55

Ron DeSantis Is Defending Freedom By 'Getting In The Way' Of COVID Authoritarians

Tyler Durden — Sun, 08 Aug 2021 19:30:00 +0000

Ron DeSantis Is Defending Freedom By 'Getting In The Way' Of COVID Authoritarians

Authored by Jordan Schachtel via 'The Dossier' substack,

In an ideal nation, the most important duty of an elected politician involves ensuring the protection of their constituents’ individual rights. During COVID Mania, the political forces for tyranny in America have attempted to contaminate this sacred ideal — under the guise of keeping us safe from a virus — by running roughshod over every aspect of our lives. The Biden Administration has sought to delegitimize the former category of politician, whose most high-profile advocate in America today is Gov. Ron DeSantis, in order to boost the latter form of nanny state authoritarianism.

On Tuesday, the battle between these two forces continued, with high profile Biden Administration actors (such as President Biden himself, along with White House spokesperson Jen Psaki) demanding that Gov. DeSantis “get out of the way” and let the ruling class, under the advice of their esteemed “public health experts,” continue to trample our rights as Americans.

“We need leadership from everyone. If some governors aren't willing to do the right thing to beat this pandemic, then they should allow businesses and universities who want to do the right thing to be able to do it," Joe Biden said today at a press conference.

"I say to these governors, 'Please help. But if you aren't going to help, at least get out of the way.'"

Pres. Biden: "If some governors aren't willing to do the right thing to beat this pandemic, then they should allow businesses and universities who want to do the right thing to be able to do it."

"If you aren't going to help, at least get out of the way." https://t.co/iS94lNK991 pic.twitter.com/U0yTRLKqJc
— ABC News (@ABC) August 3, 2021

The language is purposely colorless and unspecific. What they want and support is very clear, as stated mid day by Psaki. The Biden Administration and the forces for COVID tyranny want the governor to let the federal government, school boards, and “pubic health” bureaucrats impose discriminatory movement passes on populations based on their COVID vaccination status. Additionally, they want to let school boards and teachers unions force children to wear masks all day, subjecting them to physical and emotional trauma, so that their elders can feel safer.

Governor DeSantis: "Many Florida schoolchildren have suffered under forced masking policies, and it is prudent to protect the ability of parents to make decisions regarding the wearing of masks by their children."

Jen Psaki: pic.twitter.com/o05RSAmJ4A
— Corey A. DeAngelis (@DeAngelisCorey) August 3, 2021

As political season heats up, the Biden Administration has stepped up its campaign to attack Governor DeSantis, largely in bad faith.

COVID cases are indeed up in Florida. This is expected, because just like at this time last year, Florida is dealing with yet another respiratory illness season. The Biden Administration claims that forced masking, vaccine passports, lockdowns, and the like will somehow improve Florida’s situation, and that the sick would suddenly stop getting sick during the hot summer months.

There is simply no evidence anywhere in the world that restricting the individual rights of citizens, segregating the unvaccinated from the vaccinated, and forcing people to wear masks all day would have any benefit whatsoever when it comes to stopping a virus. Virtually every “public health” command and edict has come up empty, and these severely damaging policies have made matters worse across the board. The forces for COVID tyranny live in an evidence-free world, and DeSantis is right to dismiss them and shame them for their failures. The data and the science is on the side of the Florida governor, and not America’s COVID totalitarian class. And even if those tyrannical solutions worked to stop a virus with a 99.8% recovery rate, the residual effects would not be anywhere near worth it under any rational cost benefit analysis.

Luckily for Floridians, when it comes to protecting the most vulnerable Americans among us, the schoolchildren who remain without a political voice, the Florida governor has made it his mission to “get in the way,” in the form of protecting their individual rights from the “public health” extremists.

“There will be no lockdowns, there will be no school closures, there will be no restrictions and no mandates in the state of Florida.”@GovRonDeSantis issued an executive order to block any #MaskMandates in #Florida schools. https://t.co/5YYRxTNoDe
— The Epoch Times (@EpochTimes) August 3, 2021

The Iraq War vet is clearly no pushover, and he’s had enough of the corporate press and other corrupt institutions blaming the supposedly non-compliant class for a virus problem that they couldn’t solve through shoddy authoritarian nonsense.

Florida Gov. Ron DeSantis on mask judginess:

"I'm sick of the judgemental stuff ... Nobody's trying to get ill here. There's people that were hermits for a year & a half that wore six masks & still contracted it ... Let's not indulge these things that somehow it's their fault." pic.twitter.com/PA0mnrGg6a
— Scott Morefield (@SKMorefield) August 3, 2021

By being the man who “gets in the way” when the forces of tyranny come for his state, DeSantis is upholding his commitment to the individual rights of each and every citizen of Florida, and he’s setting a foundational American example for all elected politicians to follow.

* * *

Support Jordan's work here

Tyler Durden Sun, 08/08/2021 - 15:30

Trio Of Tropical Disturbances To Watch In Atlantic Basin

Tyler Durden — Sun, 08 Aug 2021 19:05:00 +0000

Trio Of Tropical Disturbances To Watch In Atlantic Basin

A trio of tropical disturbances are developing in the Atlantic basin and should be closely watched next week. Two of the disturbances have the chance of forming into tropical depressions in the next five days.

July was a quiet period after an active start (June 1) to the 2021 Atlantic hurricane season, but statistically, the busiest part of the hurricane season begins on Aug. 20. It seems a significant uptick in storms is ahead.

The first disturbance is a low-pressure system over the west-central Atlantic. The second disturbance is more east and is moving westward in the central tropical Atlantic. The third distance is near Africa.

Last week, National Oceanic and Atmospheric Administration (NOAA) upgraded the number of named storms to 21 from its prior forecast of 15 in May.

NOAA is now forecasting at least ten hurricanes and up to five major ones with winds above 100 mph.

"While the tropics have been slow the past few weeks, NOAA forecasters believe a busy hurricane season lay ahead," said Matthew Rosencrans, the lead seasonal hurricane forecaster at the U.S. Climate Prediction Center.

Source: Bloomberg

The 2020 hurricane season saw a record 30 storms, with several major ones striking Louisiana.

Keep an eye on tropical development in the Atlantic Basin. The next tropical storm will be named Fred.

Tyler Durden Sun, 08/08/2021 - 15:05

Lobbyists Spent $426 Million To Reap An Infrastructure Bonanza

Tyler Durden — Sun, 08 Aug 2021 18:40:00 +0000

Lobbyists Spent $426 Million To Reap An Infrastructure Bonanza

Authored by Mike Shedlock via MishTalk.com,

Nearly 2,000 companies and other groups have engaged with Washington officials about infrastructure to shape the final deal...

Lobbying Bonanza in Washington

The Washington Post comments Massive Economic Packages Unleash Lobbying Bonanza in Washington.

Nearly 2,000 companies and organizations have lobbied Congress and the administration this year in an attempt to influence the contours of major new infrastructure spending, an effort that is sure to intensify now that the Senate is hoping to vote within days on their version of the $1 trillion public-works package.

The proposal — along with a still-forming second economic package valued at $3.5 trillion — carries high stakes for corporations that have long pined for infrastructure improvements and other federal spending that would be beneficial to their bottom lines.

The organizations working to shape the package — ranging from powerful trade associations representing agricultural and energy giants to small-time firms working for cities in Alabama and Kansas — mentioned either “infrastructure” or President Biden’s initial proposal, known as the American Jobs Plan, on their lobbying disclosure forms during the most recent quarter this year, according to an analysis from the Center for Responsive Politics, a nonprofit group that tracks money and influence in Washington.

Amazon, whose founder Jeff Bezos owns The Washington Post, spent nearly $10 million in the first six months of the year on a slew of lobbyists who worked on issues including “electric vehicle charging infrastructure” and “infrastructure investment legislation,” according to filings. The Global Infrastructure Investor Association, which represents financial firms like Goldman Sachs, Blackstone and Morgan Stanley, lobbied earlier this year on “public-private partnerships in financing state and federal infrastructure,” its disclosures show.

The RATE Coalition hired Forbes Tate Partners to lobby against corporate tax raises, a firm whose lobbyists include former aides to the Senate’s top tax-focused committee. The American Chemistry Council, which represents companies including 3M, Dow, Dupont and ExxonMobil, has taken particular aim at a portion of the infrastructure package that would raise the country’s so-called superfund tax.

Result: 2,701-Page Infrastructure Bill

As fruits of their efforts, the lobbyists produced a 2,701-page bill.

It's important to understand that Congressmen do not write bills, lobbyists do. They are the only ones who understand what's in those 2,701 pages.

On Fox News, Kudlow asked: How many Senators have read this bill?

Dirty Little Republican Secret

17 GOP Senators have signed on to this package making it a truly bipartisan boondoggle. The WSJ comments on the Republican support.

So why did 17 GOP senators vote to proceed? On the baser end of the scale, here’s the dirty little secret: The bill fundamentally amounts to a heap of spending, and some Republicans can spend with the best of Democrats. The member press releases are already flying, bragging about the pork they are directing back to their home states.

The Biden White House wants to remake America fundamentally in Bernie Sanders’s vision. This is the moment the GOP needs to be hammering away at the bad policy, the risks, and at the contrasts in governance. Which gets hard to do when Senate Republicans are whooping that Biden agenda along.

Musical Tribute

Long time readers knew from the top of this post that a musical tribute was coming. This one is a movie flashback.

Worst Bills Money Can Buy

In the end, Democrats and Republicans mostly feed from the same trough in the same smelly pigsty.

Lobbyists reap the Bonanza and taxpayers foot the bill.

On Thursday Senator Manchin Urged Fed to Immediately Taper to Halt Inflation and Avoid Tax Hikes

I suggest he (a Democrats), and all the Republicans take a look at the bills they are now prepared to sign.

After the obligatory review (has anyone even read it?) It's Senator Manchin's Patriotic Duty to Switch Parties to Stop the Insanity

* * *

Like these reports? I hope so, and if you do, please Subscribe to MishTalk Email Alerts.

Tyler Durden Sun, 08/08/2021 - 14:40

"This Is About Control, Not Children": Eric Weinstein Calls Out Apple's Virtuous Pedo-Hunter Act

Tyler Durden — Sun, 08 Aug 2021 18:15:00 +0000

"This Is About Control, Not Children": Eric Weinstein Calls Out Apple's Virtuous Pedo-Hunter Act

Last week, Apple announced that they would begin analyzing images on its devices before they're uploaded to the cloud in order to identify child pornography and report it to the authorities, sending privacy advocates through the roof.

No matter how well-intentioned, @Apple is rolling out mass surveillance to the entire world with this. Make no mistake: if they can scan for kiddie porn today, they can scan for anything tomorrow.

They turned a trillion dollars of devices into iNarcs—*without asking.* https://t.co/wIMWijIjJk
— Edward Snowden (@Snowden) August 6, 2021

Apple defended the decision - claiming there's a '1 in 1 trillion chance of false positives.'

"Instead of scanning images in the cloud, the system performs on-device matching using a database of known CSAM image hashes provided by NCMEC (National Center for Missing and Exploited Children) and other child safety organizations. Apple further transforms this database into an unreadable set of hashes that is securely stored on users' devices," the company said in an announcement.

Privacy advocates have pointed out the obvious slippery slope of allowing big tech to infiltrate our personal lives under the guise of fighting [evil thing], and the next thing you know Apple is hunting dissidents for human rights abusers, reporting who owns what guns, or people taking 'suspicious' routes that deviate from their normal pattern. As the Electronic Frontier Foundation notes:

We’ve said it before, and we’ll say it again now: it’s impossible to build a client-side scanning system that can only be used for sexually explicit images sent or received by children. As a consequence, even a well-intentioned effort to build such a system will break key promises of the messenger’s encryption itself and open the door to broader abuses.

All it would take to widen the narrow backdoor that Apple is building is an expansion of the machine learning parameters to look for additional types of content, or a tweak of the configuration flags to scan, not just children’s, but anyone’s accounts. That’s not a slippery slope; that’s a fully built system just waiting for external pressure to make the slightest change. -EFF

They're hypocrites anyway

Hitting it on the nose, as usual, is Eric Weinstein - who calls out Apple's Tim Cook for scanning our *private* photos for child porn, while utterly ignoring Jeffrey Epstein's high-level child-sex trafficking and ties to intelligence.

This is an easy tell: people who have **less** than **zero** interest in elite pedophiles connected to intelligence, want intelligence on everyone, dominated by ordinary non-pedophiles. If you’re dumb enough to believe this i can’t help you.

This is about control, not children. pic.twitter.com/wx1j5qI6Ix
— Eric Weinstein (@EricRWeinstein) August 8, 2021

Prove me wrong @alexstamos, @apple and Tim Cook: join me in calling for hearings into the Intelligence Community, its connection to Jeffrey Epstein and state protected pedophilia in our highest “elite” Echelons.

No? Thought so. This is sickening. Creepy Cowardice? That’s iPhone. pic.twitter.com/PonA18O75E
— Eric Weinstein (@EricRWeinstein) August 8, 2021

Either that, or drop the privacy campaign. You can’t have it both ways.
— Eric Weinstein (@EricRWeinstein) August 8, 2021

Also critical of Apple is WhatsApp head Will Cathcart - who says he's "concerned" about Apple's announcement, and "a setback for people's privacy all over the world."

I read the information Apple put out yesterday and I'm concerned. I think this is the wrong approach and a setback for people's privacy all over the world.

People have asked if we'll adopt this system for WhatsApp. The answer is no.
— Will Cathcart (@wcathcart) August 6, 2021

More via Threadreader App:

Child sexual abuse material and the abusers who traffic in it are repugnant, and everyone wants to see those abusers caught.

We've worked hard to ban and report people who traffic in it based on appropriate measures, like making it easy for people to report when it's shared. We reported more than 400,000 cases to NCMEC last year from @WhatsApp, all without breaking encryption.

Apple has long needed to do more to fight CSAM, but the approach they are taking introduces something very concerning into the world.

Instead of focusing on making it easy for people to report content that's shared with them, Apple has built software that can scan all the private photos on your phone -- even photos you haven't shared with anyone. That's not privacy.

We’ve had personal computers for decades and there has never been a mandate to scan the private content of all desktops, laptops or phones globally for unlawful content. It’s not how technology built in free countries works.

This is an Apple built and operated surveillance system that could very easily be used to scan private content for anything they or a government decides it wants to control. Countries where iPhones are sold will have different definitions on what is acceptable.

Will this system be used in China? What content will they consider illegal there and how will we ever know? How will they manage requests from governments all around the world to add other types of content to the list for scanning?

Can this scanning software running on your phone be error proof? Researchers have not been allowed to find out. Why not? How will we know how often mistakes are violating people’s privacy?

What will happen when spyware companies find a way to exploit this software? Recent reporting showed the cost of vulnerabilities in iOS software as is. What happens if someone figures out how to exploit this new system?

There are so many problems with this approach, and it’s troubling to see them act without engaging experts that have long documented their technical and broader concerns with this.

Apple once said “We believe it would be in the best interest of everyone to step back and consider the implications …”

…”it would be wrong for the government to force us to build a backdoor into our products. And ultimately, we fear that this demand would undermine the very freedoms and liberty our government is meant to protect.” Those words were wise then, and worth heeding here now.

More notable hot takes:

Here. I said it in @Telegraph. Any kind of data may be potentially targeted. Apple's system is a world-precedent in the area of remote inspection of private data/files. This is a huge power/capability. https://t.co/bnGQkvrhWU pic.twitter.com/0kKBNW19ft
— Lukasz Olejnik (@lukOlejnik) August 7, 2021

Maybe Apple will reverse course and maybe they don’t. But I don’t think they have come to terms with the deep well of antipathy and mistrust this move is going to create. It’s going to be with them for years, undoing billions of dollars in priceless customer trust and marketing. pic.twitter.com/ZgbQl1vYPC
— Matthew Green (@matthew_d_green) August 7, 2021

We previously obtained a sample of malware deployed in Xinjiang that scans phones for 70,000 specific files related to politics, Uighurs, etc. Why wouldn't Chinese authorities try to get Apple to leverage its new child abuse system to instead fulfil this https://t.co/NZxIJIuOC8
— Joseph Cox (@josephfcox) August 6, 2021

Tyler Durden Sun, 08/08/2021 - 14:15