The Risk Of Recession Isn't Zero

Authored by Lance Roberts via RealInvestmentAdvice.com,

As we discussed recently, Wall Street economists increasingly believe the risk of recession has fallen sharply. To wit:

“Economists don’t think the economy will get even close to a recession. In January, they, on average, forecast sub-1% growth in each of the first three quarters of this year. Now, they expect growth to bottom out this year at an inflation-adjusted 1.4% in the third quarter.” – WSJ

Of course, this outlook seems contradictory to numerous indicators with a long history of preceding recessionary onsets, such as yield curve inversions. As shown, we currently have the longest, consistent period in history where the yield spread between the 10-year Treasury bond and the 3-month Treasury bill is inverted. Yet, no recession has manifested itself this time.

Another historically reliable recession indicator is the 6-month rate of change of the Leading Economic Index. As with yield curve inversion, the current depth and duration of the LEI’s negative readings have always coincided with a recession. But again, the U.S. has avoided such an outcome.

Of course, the Federal Reserve’s tightening of monetary policy through one of its more aggressive rate-hiking campaigns also failed to push the economy into a recession.

Given that the economy has continued to defy recession expectations, it is understandable that economists have “given up” anticipating one.

But is the risk of recession gone?

The Risk Of Recession Isn’t Zero

There is a very funny meme circulating on social media. Yes, cute, cuddly animals seem safe, but “the risk of them murdering you is low but never zero.”

Such seems like an apropos meme, given that the economy’s recession risk may be low currently, but it isn’t zero.

As discussed previously, one of the primary reasons why the economy has defied the recessionary drag from higher borrowing costs has been the ample supply of fiscal support through previously passed spending bills such as the Inflation Reduction Act and the CHIPs Act. When combined with stimulus checks, tax credits, and moratoriums on various debt payments like rent and student loans, the amount of monetary support for consumption supported economic growth as the Federal Reserve tightened monetary policy.

What is crucial to understand is that the surge in monetary support acted as an “adrenaline” boost to the economy. Yes, many economic data series suggest the risk of recession is elevated. However, the surge of monetary injections sent the economy into overdrive, as evidenced by economic growth in 2021.

The crucial point to understand, and what eludes most economists, is that the economy slows as that “adrenaline” boost fades. Had the economy been growing at 5% nominal, as in 2019, the decline from the post-pandemic peak would already register a recession. However, given that nominal growth neared 18%, it will take much longer than normal for growth to revert below zero. To show this, we looked at the number of quarters between peak economic activity and the entrance into a recession. Using that historical analysis, we can estimate the reversion of economic growth into a recession could take roughly 22 quarters. Such would time the next recession in late 2025 to mid-2026.

Many things could certainly happen to lengthen or shorten that estimated time frame. However, the importance is that a reversal of growth from elevated economic growth rates can take much longer than normal. Another similar period was the 25 quarters of slowing economic growth before the 1991 recession.

For investors, while consensus estimates of economists put the risk of recession very low, it is not zero.

Economic Data To Watch

Given the long lag between recessionary indicators and economic recession, it is unsurprising economists gave up anticipating a recession. However, while the recession has not happened yet, it does not mean that it still can’t. We should pay special attention to data historically correlated to economic growth.

For example, real retail sales have weakened materially since the peak of economic activity in 2021. As shown, retail sales make up roughly 40% of Personal Consumption Expenditures (PCE). Therefore, it is unsurprising that retail sales precede PCE changes. The importance of that lead is that PCE comprises nearly 70% of the GDP calculation. Therefore, as consumer demand slows, the economy slows, and inflation falls. Real retail sales are now negative as consumers run out of excess savings, likely slowing economic growth further in the quarters ahead.

Of course, without employment, it is hard to increase economic consumption further. Notably, while we count part-time employment, those jobs do not provide the wages and benefits of full-time employment to support a family. Unsurprisingly, a key leading indicator to every previous recession has been a reversal of full-time employment.

While it is certainly possible that the economy could avoid a recession given additional monetary or fiscal support, government and business investment comprise a much smaller contribution to GDP than consumer spending. As noted in “Bad News Is Good News,” with consumers strangled between declining wage growth and higher living costs, the ability to fuel the difference with debt is becoming increasingly challenging.

“The consequence of that lack of income growth is that they are the first to run into the limits of taking on additional debt.”

Pay attention to the economic data in the future. While it may take much longer than many expect, we suspect the risk of recession is likely greater than zero.

Tyler Durden Fri, 05/24/2024 - 08:15

From WardsAuto: May U.S. Light-Vehicle Sales Tracking to Annualized Rate Flat with April (pay content).  Brief excerpt:

There is a good possibility sales end May above expectations, depending on much holiday marketing pulls in additional buyers. Second-quarter sales are pegged at a 15.9 million-unit SAAR, with volume rising 1% from the year-ago period.
emphasis added

Click on graph for larger image.

This graph shows actual sales from the BEA (Blue), and Wards forecast for May (Red).

On a seasonally adjusted annual rate basis, the Wards forecast of 15.8 million SAAR, would be up 0.4% from last month, and up 1.8% from a year ago.

Futures Rebound After Thursday Rout As Rate Cut Expectations Fade

After Thursday's rout, which saw the overbought  S&P first hit an all time high before traders suddenly dumped everything (following hotter than expected PMI and Initial claims reports has further delayed expectations for the Fed's first rate hike ostensibly to December) to buy Nvidia, whose market cap soared by over $200 billion to a record $2.55 trillion, on Friday US equity futures and treasuries have staged a modest rebound. As of 7:30am, S&P 500 and Nasdaq 100 futures rose 0.3%, led by premarket gains at Micron, Microchip Technology and Advanced Micro Devices all of which continue to benefit from bullish sentiment around artificial intelligence following Nvidia's blockbuster earnings. Europe’s Stoxx 600 index slipped 0.4%, playing catch-up with Wednesday’s Wall Street drop, which was the biggest this month. 10Y yields dropped 1bp to 4.47% after surging the previous session by as much as 8bps ahead of a half-day trading session for the US bond market; the Bloomberg Dollar Spot Index was headed for its first drop in five days, but still on track to post its best weekly gain since April 12. Oil continued its decline despite the signal from macro data that the economy is actually growing quite strong, in what appears to be accelerating CTA liquidations. Today's macro events includes the April prelim Durable Goods report, the Kansas City Fed and the May final UMich report.

In premarket trading, Apple shares ticked 0.7% higher after the technology firm’s price target is raised to a Street-high view of $275 from $250 at Wedbush, a move that reflects “iPhone demand turning the corner into an AI driven iPhone 16 supercycle.” Tesla was flat after a report that Elon Musk’s SpaceX has initiated discussions about selling existing shares at a price that could value the company at roughly $200 billion. Here are some other notable premarket movers:

• Bilibili (BILI US) shares fluctuate between gains and losses as analysts debate the outlook for the Chinese online entertainment firm’s goal toward reaching breakeven, with Barclays upgrading the stock to equal weight from underweight.
• Domo (DOMO US) shares slide 11% after the enterprise software firm’s second-quarter revenue forecast came in below estimates.
• DuPont (DD US) shares climb 1.8% after an upgrade to overweight at Wells Fargo.
• Exact Sciences (EXAS US) slip 2.0% after rival Guardant Health’s Shield blood test to screen for colorectal cancer received the support of an FDA advisory panel Thursday.
• Intuit (INTU US) shares are down 6.2% after the tax-preparation software company gave a forecast for adjusted fourth-quarter earnings that is weaker than expected. However, it raised its full-year revenue forecast. The company also said the CEO of its Credit Karma business will retire by the end of the year.
• Summit Theraputics (SMMT US) shares tumble 20% after trial data on Hong Kong-listed biopharmaceutical company Akeso’s lung cancer drug was seen as disappointing. Summit acquired exclusive rights for development and commercialization of the drug in the US, Canada, EU and Japan from Akeso for $500 million in late 2022.
• Workday (WDAY US) shares fall 12% after the software company cut its full-year subscription revenue forecast. The company also reported 1Q results, which analysts said were mixed. Peer Salesforce (CRM US) also decline 1.4%

The market mood turned more sombre after stronger-than-expected US business activity data forced traders to push back rate-cut expectations by a month. The change put Bloomberg’s dollar index on track for its biggest weekly gain since early April, while rate-sensitive Treasury two-year yields traded just off the three-week highs above 4.95% hit on Thursday. Separately, the latest FOMC minutes showed policymakers are in no rush to cut rates, with some even seeing a need for more restrictive policy.

To that point, this morning Goldman pushed back its forecast of the Fed’s first rate cut back one meeting, from July to September: "Earlier this week, we noted that comments from Fed officials suggested that a July cut would likely require not just better inflation numbers but also meaningful signs of softness in the activity or labor market data. After the stronger May PMIs and lower jobless claims, this does not look like the most likely outcome" wrote Goldman economist Jan Hatzius.

“What we have is this repricing of rate cuts,” said Kenneth Broux, a strategist at Societe Generale. “Two-year yields are again within touching distance of 5%, so the debate on whether US yields have peaked is still alive.”  For now, profits at larger US companies appear resilient to the higher-for-longer rates backdrop, offering encouragement to equity bulls. For broader positive momentum to reverse, “we’ll need to see if there’s a repricing of Fed cuts to hikes but the bar for that is still very high,” Broux said.

The Fed minutes and robust data have put MSCI’s global benchmark on track for its first weekly decline in five, and some strategists, including  BofA's Michael Hartnett are warning the rally is at risk of overheating. Barclays strategists said stock gains are starting to “look tired.”

 

European stocks followed their US and Asian counterparts lower after traders pushed back expectations of Fed interest rate cuts. The Stoxx 600 fell 0.5% with almost all subindexes in the red, with only retail and auto stocks rising. The tech sector leads declines, breaking a two-day advance fueled by sentiment around Nvidia. In company news, drugmakers GSK and Boehringer win the first US Zantac cancer case to go to trial. Here are some of the biggest European movers Friday:

• GSK rises after winning the first US Zantac cancer case to go to trial. It’s another positive step, according to Jefferies analysts
• Drugmakers GSK and Boehringer Ingelheim persuaded a Chicago jury to reject a woman’s claim that the blockbuster heartburn drug Zantac caused her cancer
• Pepco Group surges as much as 13%, after reporting gross margin improvement in 1H ended March 31 and guided for 20% increase of underlying Ebidta in FY
• DNB Bank rises as much as 2.4% after a Barclays double-upgrade as analysts grow more constructive on Norway versus other Nordic countries in a rate-cut environment
• Gerresheimer rises as much as 0.4% after being upgraded to buy by analysts at Hauck & Aufhaeuser following its deal to buy the holding company of Bormioli Pharma
• Renault gains as much as 3.2% as UBS upgrades to hold from sell, saying cash return expectations are now building due to factors including the cancellation of Ampere’s IPO
• Julius Baer gains as much as 3.4% after higher-than-expected assets under management outweighed concerns over weak net new money
• Acciona Energia falls as much as 8.5% after cutting its Ebitda guidance for 2024. Analysts say it’s “perplexing” the company failed to fully quantify its new outlook
• Zealand Pharma drops as much as 7.1% after reporting topline results from a trial investigating dapiglutide as an obesity treatment, which analysts called underwhelming
• Celon Pharma drops as much as 7.4% after announcing a venture with US life science fund Tang Capital for the development of depression drugs
• Hargreaves Lansdown falls as much as 5%, with Liberum analysts highlighting the opportunity to take profits after the investment platform rebuffed a £4.7 billion offer

In FX, the Bloomberg Dollar Spot Index was headed for its first drop in five days, but still on track to post its best weekly gain since April 12. The Norwegian krone topped the G-10 FX leaderboard while cable was steady at 1.2696 after falling earlier as UK retail sales missed forecasts; GBPUSD is poised for its best monthly gain since November on view the Bank of England will take longer to cut interest rates. USD/JPY rose 0.1% to 157.01, up a third day; Japan’s inflation cooled for a second month while staying above the Bank of Japan’s price target as the yen’s recent depreciation fuels concerns that cost-push inflationary pressures may be here to stay

“Fed cuts are likely at least four months away barring a sudden growth shock, while other central banks are starting to cut, albeit only gradually,” Wells Fargo strategists led by Michael Schumacher wrote in a research note. “And if there is a further repricing in global rate expectations, that would likely only serve to weigh on global growth expectations, tilting the balance in favor of US dollar strength”

In rates, Treasuries edge higher, with US 10-year yields falling 1bp to 4.47%. Gilts gain, led by the short end after UK retail sales fell at the fastest pace this year. UK two-year yields fall 4bps. SIFMA recommend early close for cash bond market Friday at 2pm New York, ahead of Memorial Day weekend. US yields richer by up to 1bp across front-end of the curve with 2s10s spread wider by almost 1bp as long-end yields remain close to Thursday’s closing levels. In UK 2-year gilts richer by around 2bp, outperforming across front-end of the curve

In commodities, oil prices decline, with WTI falling 0.9% to trade near $76.20. Spot gold rises 0.5%.

In crypto, Bitcoin is modestly softer and holds just above $67k, while Ethereum trades around $3.7k after the SEC approved plans from NYSE, CBOE and Nasdaq for the listing of spot Ethereum ETFs.

Looking at today's calendar, US economic data includes April durable goods orders (8:30am), May University of Michigan sentiment (10am) and Kansas City Fed services activity (11am). Fed officials’ scheduled speeches include Waller at 9:20am, giving a keynote address at a Central Bank of Iceland event in Reykjavík on R*.

Market Snapshot

• S&P 500 futures up 0.2% to 5,295.50
• STOXX Europe 600 down 0.5% to 519.01
• MXAP down 0.8% to 179.35
• MXAPJ down 0.9% to 561.72
• Nikkei down 1.2% to 38,646.11
• Topix down 0.4% to 2,742.54
• Hang Seng Index down 1.4% to 18,608.94
• Shanghai Composite down 0.9% to 3,088.87
• Sensex up 0.1% to 75,526.60
• Australia S&P/ASX 200 down 1.1% to 7,727.59
• Kospi down 1.3% to 2,687.60
• German 10Y yield little changed at 2.58%
• Euro little changed at $1.0820
• Brent Futures down 0.3% to $81.13/bbl
• Gold spot up 0.4% to $2,338.61
• US Dollar Index little changed at 105.02

Top Overnight News

• European stocks followed New York and Asia lower after traders pushed back expectations of interest rate cuts by the Federal Reserve to later in 2024 following strong US economic data.
• Chinese President Xi Jinping urged deeper reforms for some of the country’s key sectors as investors look for hints on major policy shifts to be revealed at the upcoming party conclave.
• UK retail sales fell at the fastest pace this year as consumers delayed spending due to rainy weather, underlying the hurdles facing the Conservative government’s bid for reelection.
• Overseas issuers sold yen bonds at the fastest pace in five years this month, chasing cheap funds before an expected interest rate hike by the Bank of Japan pushes up borrowing costs.
• Tesla (TSLA) to cut Model Y output at Shanghai plant by at least 20% during March-June 2024, via Reuters citing sources
• US Treasury Secretary Yellen said many Americans are still struggling with inflation, while she expressed concern over 'substantial' increases in living costs, according to FT.

A more detailed look at global markets courtesy of Newsquawk

APAC stocks followed suit to the selling on Wall St where the initial NVIDIA-related euphoria was soured after strong US PMI data lifted the dollar and yields. ASX 200 declined with underperformance seen in the consumer and rate-sensitive sectors. Nikkei 225 gapped down at the open beneath the 39,000 level amid the headwinds from the US, while participants digested mixed inflation data which slowed in pace from the prior month. Hang Seng and Shanghai Comp were lower with the former weighed on by losses in the property sector and with tech stocks pressured by mixed earnings, while the downside was limited in the mainland amid a lack of catalysts.

Top Asian News

• RBNZ Deputy Governor Hawkesby said while near-term inflation risks are to the upside, he is confident medium-term inflation is returning to the target. Hawkesby said no single data point will cause a rate hike and he is watching domestic inflation pressures and expectations, while he added that cutting interest rates is not part of the near-term discussion and there is a lot of uncertainty about tradable inflation going forward.
• RBNZ Assistant Governor Silk said RBNZ is concerned about near-term inflation risks and adjusts its models after underestimating domestic inflation.

European bourses, Stoxx 600 (-0.5%), are entirely in the red, though off worst levels, with Europe playing catch-up to the risk-off sentiment which reverberated from the Wall Street afternoon session. European sectors hold a strong negative bias; Banks and Tech reside as the laggards whilst Retail, Autos & Parts, and Media are among the better performers, albeit still mostly in the red. US Equity Futures (ES +0.2%, NQ Unch, YM +0.2%, RTY +0.3%) are marginally firmer attempting to pare back some of yesterday's hefty losses.

Top European News

• ECB's Schnabel says some elements of inflation are proving persistent; would caution against moving too fast on rates
• UK Ofgem Energy Price Cap (GBP): 1,568 (exp. 1,574; prev. 1,690), -7% (exp. -7%) for dual-fuel households.
• Barclays expects the BoE to begin lowering rates in August with rate cuts to follow in November and December.

FX

• DXY is marginally softer vs. some peers but ultimately still around yesterday's PMI-inspired best levels which saw DXY tick above the 105 mark; trough thus far at 104.92.
• EUR is a touch firmer vs. the USD after finding support above the 1.08 mark. Price action this week has largely been at the whim of the USD with yesterday's EZ PMI data overshadowed by the equivalent US release. overshadowed by the equivalent US release.
• GBP is steady vs. the USD after yesterday's PMI-induced downside, and brushes off initial pressure following the softer-than-expected Retail Sales figures. Cable currently trades on either side of 1.27.
• JPY is marginally softer vs. the USD following mixed Japanese inflation metrics overnight which warrant a cautious stance from the BoJ and an unchanged rate at the June meeting. For now, the pair is contained within yesterday's 156.50-157.19 range.
• Antipodeans are both contained vs. the USD in quiet trade. AUD/USD has been unable to launch much of a recovery from recent losses. NZD/USD is steady vs. the USD having performed much better than its antipodean counterpart this week on account of a hawkish RBNZ.
• PBoC set USD/CNY mid-point at 7.1102 vs exp. 7.2539 (prev. 7.1098).

Fixed Income

• USTs are marginally firmer with prices unable to launch much in the way of a meaningful recovery after yesterday's PMI-induced losses and awaiting impetus from US Durable Goods. Today's range is well contained within yesterday's 108.17+ to 109.06 parameters.
• Bunds are attempting to claw back some of the lost ground seen yesterday in the wake of encouraging EZ PMI metrics, which were then followed up by an uptick in EZ wages and a particularly hot US PMI release.
• Gilts are attempting to atone for yesterday's downside which followed the broader dynamics within global fixed income markets. Gains are smaller than their German counterpart despite disappointing UK retail sales metrics which saw a M/M contraction of -2.3% vs. exp. -0.4%.

Commodities

• Crude is modestly softer in what has been a catalyst-thin session thus far; Brent sits in a USD 81.05-81.55/bbl.
• Spot gold and silver attempt to recover from yesterday's steep losses in the absence of fresh catalysts this morning; XAU sits in a USD 2,325.47-2,340.69/oz intraday range.
• Mixed/contained trade across base metals as prices consolidate from this week's choppiness which saw 3M LME copper print record highs on Monday before tumbling over USD 700/t throughout the week.
• OPEC+ to meet virtually on June 2nd, according to statement (prev. June 1st)

Geopolitics

• China on Friday sent multiple bombers to conduct mock missile strikes in the Taiwanese drills, with dozens of missiles used in the drills, according to Chinese state media.
• Israel’s PM and ministers decided to expand the mandate of the negotiating team during the war cabinet meeting on Wednesday night, according to Axios' Ravid citing an Israeli senior official, although the official noted that it is not certain that it will be possible to achieve a breakthrough in the talks on abductees.
• American and British aircraft launched two raids on Hodeidah Airport in Yemen. It was later reported that a Yemeni official said about ten Houthi leaders and experts were killed and wounded in the marches and missiles as the coalition targeted an operations room in Hodeidah, according to Sky News Arabia.
• Russian President Putin is reportedly ready to halt the war in Ukraine with a negotiated ceasefire which recognises current battlefield lines, according to Reuters sources; but is prepared to fight on if Ukraine and the West do not respond
• Ukrainian President Zelensky is set to attend the G7 leaders meeting in a fresh push for aid, according to Bloomberg. It was separately reported that House Speaker Johnson said they would soon host Israeli PM Netanyahu for a joint session of Congress.
• Japan imposed sanctions against Russian-related entities and an individual. It was separately reported that South Korea imposed sanctions on seven North Korean individuals and two Russian vessels.
• China's Defence Ministry said military drill exercises around Taiwan continued and they will test the ability to jointly seize power, strike jointly, and occupy and control key areas.
• US, Australia, Britain, Canada, Japan, Czech Republic, Lithuania and German offices in Taipei issued a joint statement supporting Taiwan's participation at the WHO meeting.
• Azerbaijan takes control of four villages on the border with Armenia, according to Tass

US Event Calendar

• 08:30: April Durable Goods Orders, est. -0.8%, prior 2.6%, revised 0.9%
  • April Durables Less Transportation, est. 0.1%, prior 0.2%, revised 0%
  • April Cap Goods Orders Nondef Ex Air, est. 0.1%, prior 0.1%, revised -0.2%
  • April Cap Goods Ship Nondef Ex Air, est. 0.1%, prior 0%, revised -0.1%
• 10:00: May U. of Mich. Sentiment, est. 67.7, prior 67.4
  • May U. of Mich. Current Conditions, est. 68.8, prior 68.8
  • May U. of Mich. Expectations, est. 67.0, prior 66.5
  • May U. of Mich. 1 Yr Inflation, est. 3.4%, prior 3.5%
  • May U. of Mich. 5-10 Yr Inflation, est. 3.1%, prior 3.1%
• 11:00: May Kansas City Fed Services Activ, prior 9

Central Bank Speakers

• 09:20: Fed’s Waller Gives Keynote Address on R*

DB's Jim Reid concludes the overnight wrap

It was a fascinating day yesterday as a barnstorming reaction to Nvidia's results (+9.32%) clattered headfirst into stronger data and rising yields (UST 10yr +5.5bps), with the negative impact of the latter winning out with the S&P 500 (-0.74%) and the NASDAQ (-0.39%) seeing their worst day of May so far.

After Nvidia's results the night before it felt like nothing could derail the market and at the open the S&P had initially hit an all-time intraday high (+0.66% on the day at the peak) and the VIX index of volatility hit its lowest intraday level since the pandemic, falling as low as 11.52pts.

The momentum had started to shift as US weekly initial jobless claims fell back to 215k (vs. 220k expected). That’s a second weekly decline, and suggests that the spike to 232k a couple of weeks ago was just a blip. And shortly afterwards, that theme was cemented by the flash composite US PMI for May, which rose to its strongest in over two years, at 54.4 (vs. 51.2 expected). That was led by a strong rebound in services activity (from 51.3 to 54.8), while manufacturing also ticked up (from 50.0 to 50.9). So the data yesterday suggests there’s little urgency for the Fed to cut rates anytime soon, and the odds of a cut by the September meeting were slashed to 56% by the close, down from 72% the previous day.

With investors pricing out rate cuts, that led to a sovereign bond selloff on both sides of the Atlantic. For US Treasuries, this pushed the 10yr yield up +5.5bps to 4.48%, whilst the 2yr yield was up +6.6bps to 4.94%. In addition that move left the 2s10s yield curve at -46.3bps by the close, which is the most inverted it’s been so far this year. So as it stands, there’s little sign that the longest 2s10s inversion on record is coming to an end. This morning in Asia, yields on 2 and 10yr Treasuries are back down -1.5bps and -1bps respectively.

Meanwhile in Europe, yields on 10yr bunds (+6.1bps), OATs (+5.8bps) and BTPs (+6.3bps) all moved higher yesterday, which was cemented by their own PMI numbers earlier in the day. Indeed, the Euro Area composite PMI was up from 51.7 to 52.3 on the flash reading, which is its strongest level in a year.

Staying on Europe, there was also some interesting wage data from the ECB yesterday, which showed that negotiated pay accelerated from +4.5% to +4.7% year-on-year in Q1. Together with the PMI data, that supported a decent move lower in rate cut expectations, with the amount of rate cuts priced by the December meeting down -4.7bps to just 59bps, which is the fewest so far this year. However, the general consensus remains that they’re still likely to cut rates in June (which is 91% priced), and the ECB’s Villeroy said that they “should not over-interpret”, and that “we are very probably, barring a surprise, going to have a first rate cut in our next Governing Council meeting”. A little earlier in the year, the ECB had been telling us how crucial this wage data is, and then when it was released they downplayed it citing the role of one-off payments. Read their blog here. Our European economists note that realised wage data has been sticky of late, providing potential ammunition for the hawks, though the forward looking indicators of wages are pointing to a clear slowing.

But of course, it wasn’t all bad news yesterday, as Nvidia’s results from the previous day did lead to fresh gains for tech stocks. In fact, Nvidia saw their own share price rise by another +9.32% to $1037.99, having been up by +12% intra-day. So just a cool $218bn of additional market cap on the day - a similar size to the entire market cap of Shell (2nd largest in FTSE). Bear in mind that exactly a year earlier Nvidia closed at $306.88, so its share price has more than tripled in that time. We did a late CoTD yesterday updating our analysis comparing the Mag-7 profits to that of the entire listed universe of G20 countries. Nvidia is actually catching up fast making around a quarter of the profit of the entire listed UK or French markets. If the Mag-7 were a country index it would now be the third most profitable in the world behind US and China with just 7 stocks compared to the hundreds or thousands of stocks in other country indices. See our report here.

Nvidia’s rally helped push the Magnificent 7 (+0.40%) up to another all-time high, even as the other 6 stocks were down on the day. Indeed, outside of the positivity around Nvidia, it was a pretty weak day for equities, with a negative turn later in the session leading the S&P 500 (-0.74%) to the largest fall since the end of April. A remarkable 89% of the companies in the S&P 500 were down on the day, with semiconductors being the only one of the 24 industry groups to post a gain. And the small-cap Russell 2000 (-1.60%) lost ground for a third consecutive day. Over in Europe, equities were also supported by the strength among tech stocks, with the STOXX Technology index up +1.51% and the STOXX 600 up +0.07%, but closing before the more negative sentiment fully took over.

In Asia, the Hang Seng (-1.19%) is the biggest underperformer driven by a decline in technology stocks while the Nikkei (-1.16%) is also notably lower as Japan’s consumer inflation softened (more on this below). Elsewhere, the KOSPI (-1.04%) is also trading in negative territory dragged down by index heavyweight Samsung Electronics while mainland Chinese stocks are also falling with the CSI (-0.43%) and Shanghai Composite (-0.16%) both edging lower. In overnight trading, S&P 500 (+0.13%) and Nasdaq futures (+0.07%) are back up a touch.

Coming back to Japan, core inflation slowed for a second straight month in April after it rose +2.2% y/y as expected and after increasing +2.6% in March, indicating that the Bank of Japan (BoJ) will be patient in raising interest rates. At the same time, "core-core” inflation rate — which strips out both fresh food and energy prices witnessed the sharpest fall to 2.4% y/y in April from 2.9% the month before, albeit in line with expectations. Meanwhile, headline inflation also slowed to +2.5% y/y in April (v/s +2.4% expected), down from March’s +2.7% figure.

To the day ahead now, and data releases include UK retail sales for April, and in the US there’s the preliminary April reading for durable goods orders, along with the final May reading for the University of Michigan’s consumer sentiment index. Meanwhile from central banks, we’ll hear from the ECB’s Schnabel, Vasle, Muller, Nagel, De Cos and Centeno, along with the Fed’s Waller.

Tyler Durden Fri, 05/24/2024 - 07:56

SpaceX Reportedly Plans "Liquidity Round" For Insiders At $200 Billion Valuation

Elon Musk's SpaceX is reportedly discussing with investors and insiders to sell existing shares, potentially valuing the company at nearly $200 billion. SpaceX leads the world in rocket launches as the space race lifts off, and its Starlink subsidiary dominates the market for space-based high-speed internet.

Bloomberg sources said the upcoming tender offer has yet to be finalized (likely in June) but is expected to be between $108 and $110 a share. This allows insiders, such as early investors and employees, to sell shares. 

The terms still need to be finalized, and the size of the tender offer could change based on the level of interest from both insider sellers and potential buyers.

Musk had to correct the initial Bloomberg report, which was reported by X user Mario Nawfa, leading the billionaire to comment on Nawfa's post, explaining: "SpaceX has no need for additional capital and will actually be buying back shares. We do liquidity rounds for employees and investors every ~6 months." 

SpaceX has no need for additional capital and will actually be buying back shares.

We do liquidity rounds for employees and investors every ~6 months.

— Elon Musk (@elonmusk) May 23, 2024

Nawfa responded to Musk's post: "Bloomberg got it wrong again Deleted the post, and will do a new post debunking them." 

Bloomberg is always wrong

— Science Guy (@ScienceGuy2718) May 24, 2024

A $200 billion valuation would represent a $20 billion increase from the $180 valuation the company received in its most recent tender offer. 

We suspect Starlink is preparing for the public markets via an IPO. Yet the timing is uncertain. 

Here's our latest reporting... 

We've asked the question: 

• Ready For IPO? Starlink Achieves Cash-Flow Breakeven

Followed by:

• SpaceX Prepares For Starlink IPO In 2024, Report Says

And this:

• IPO Nearing? Elon Musk's Starlink In Hyper-Growth, Surprises Analysts With $6.6 Billion Revenue Projection

Get ready. SpaceX's Starship is preparing for its fourth launch. 

Flight 4 in about 10 days https://t.co/1Fb0ProHjG

— Elon Musk (@elonmusk) May 24, 2024

While reporting on SpaceX, we occasionally ask where Musk's competitors are, like Bezos and United Launch Alliance. It appears SpaceX is leaving the competition on Earth. 

Tyler Durden Fri, 05/24/2024 - 07:45

Many Americans Say They Will Never Retire

Via AntoniusAquinas.com,

A recent AARP poll provides further evidence of the deterioration of American living standards, especially for those approaching retirement age.  The study contradicts what most policy makers have believed to be a “soft landing” for the economy after two years of rampant inflation.

“More than one quarter of U.S. adults over the age of 59,” the survey found, “say they expect to never retire.”  One in four have no retirement savings while one third of “older adults” have credit card debt of more than $10,000 and 12% hold a balance of $20,000 or more.” The Headline of an April 25 Washington Times article by Fatima Hussein says it all: “More Than 25% of U.S. Adults Over 50 Expect Never to Retire.”

Not surprisingly, the report conducted with the NORC Center for Public Affairs Research, points out that the lack of savings is due to the rising cost of living: “Everyday expenses and housing costs, including rent and mortgage payments, are the biggest reasons why people are unable to save for retirement.”

While AARP zeroed in on rising prices as the culprit for the financial pinch that potential retirees are feeling, it did not delve into who or what was the catalyst for the increase in living costs.  Neither has the financial press, which has always been a cheerleader for the Uniparty, been diligent in its duty about the ultimate source for soaring prices. 

While the trend of Americans working well into their retirement years has been going on for years, the situation has accelerated under both the Trump and Biden presidencies.  In concert with the Federal Reserve, the fiscal policies of the two administrations have been the primary factor for why many Americans cannot retire. 

Even before the start of the hyped Covid pandemic, the Trump administration, in just one term, was on pace to become the biggest spender in U.S. history.  The astronomical increase in government spending and money printing which took place in response to Covid are now being felt.

The Fed’s balance sheet before the Covid lockdowns in January of 2020 stood at $4.15 trillion. By the end of Trump’s presidency, it had nearly doubled to $7.3 trillion as the government doled out “stimulus checks” to non-working Americans and transferred billions to business favorites and cronies in an unimaginable grab of power and wealth. 

Under Biden, the balance sheet had risen to a little short of $9 trillion in mid-2022 and has come down, now standing at $7.4 trillion, according to American Action Forum.

Expanding the balance sheet means that the Fed issues more dollars it takes and buys assets (mostly government bonds). This is actually debt monetization.  The increase in the money supply is the classic – and true – definition of inflation.  Rising prices are not inflation, but its consequence.   

At first, the new money went into financial assets increasing their nominal values. However, because of the “lag effect,” the inflation the Fed created is now pushing up consumer prices.  The Fed has had to do this because of profligate government spending which must be sustained through borrowing, since tax revenues are not enough to meet expenditures. 

When asked in his current re-election campaign on what he would do to solve the rising cost of living, Trump said that he would “drill baby drill.”  Such a statement demonstrates again that the former president, like the current occupant of the office, does not understand the problem.

Increasing domestic oil production is certainly good in itself, which will create jobs and bring more oil to the market. But it will not address general price inflation which is a monetary phenomenon. 

Rising prices can be reversed if the Fed increases interest rates, or better yet, lets rates be set by the market.  Higher rates will entice people to save, which will take money out of circulation, thus putting downward pressure on prices.

Just as important, the government needs to cut spending and eliminate departments and programs which will mean less money printing by the Fed.  The likelihood of this taking place in a presidential election year is next to zero.      

Even if the government and the Fed took the proper steps and began to put the nation on a sound financial footing, it will take years for the damage that has been done to be rectified.

Sadly, the Uniparty has no intention of doing the right thing and as economic conditions worsen, the number of people who must work until they drop will continue to rise.

Tyler Durden Fri, 05/24/2024 - 07:20

Watch: US Deploys Anti-Air Defense System On Gaza Aid Pier

Israeli media has reported that two American soldiers were injured Thursday in an accident which occurred while working on the Gaza humanitarian pier. 

"Two U.S. soldiers sustained light injuries on Thursday during a work accident near the temporary floating pier in Gaza," i24 News said.

IDF/Reuters

"The soldiers were promptly evacuated through Ashdod Port to an Israeli hospital for treatment," the report indicated. Israeli Army Radio described that the US soldiers were "injured in the floating dock area off Gaza."

The pier has seen the first aid trucks roll off in the last several days, but the whole operation has been off to a chaotic start. As of Tuesday there had not been any deliveries confirmed even though several trucks had departed with aid.

"Pentagon spokesman Maj. Gen. Pat Ryder said Tuesday that the issues have arisen once the aid was loaded onto nongovernmental organization trucks, departed the marshaling area and headed toward distribution warehouses in Gaza," Navy Times reported.

Some of the trucks had reportedly been taken over by desperate Palestinians before making it to their destination.

"Only five of the 16 aid trucks that left the secured area on Saturday arrived at the intended warehouse with their cargo intact, U.N. World Food Program spokesperson Steve Taravella told The Associated Press," Navy Times continued. "He said the other 11 trucks were waylaid by what became a crowd of people and arrived without their cargo."

Site security has remained a serious concern, despite Israel's military (IDF) being in charge of protecting the land portion of the pier, with US warships off the coast.

ArmyRecognition.com: U.S. Centurion C-RAM anti-aircraft artillery system is deployed near a US-built floating pier in the Gaza Strip.

Widely circulating social media images appear to confirm that the US military has deployed a C-RAM system (Counter-Rocket, Artillery, and Mortar) to safeguard the pier from aerial attacks such as drones or rockets.

Videos suggest it has already seen some action, possibly having taken out a drone flying nearby. Or else, it may have been a planned live-fire test to ensure its positioning and capabilities once installed. The C-RAM is relied upon to protect US forward operating bases elsewhere in the Middle East, as well as places like the US Embassy in Baghdad's Green Zone.

Below: Watch the newly installed C-RAM in action on Gaza's coast...

U.S. Army C-RAM in action on the Gaza floating pier. pic.twitter.com/G9smwQnRxR

— Clash Report (@clashreport) May 22, 2024

The Pentagon previously made it clear that if US troops come under fire, they are authorized to defend themselves and fire back. However, the IDF has also said it is providing security on land, and there are at least two Israeli bases established nearby.

Tyler Durden Fri, 05/24/2024 - 06:55

Loose Talk About The End Of Everything: VDH

Authored by Victor Davis Hanson via American Greatness,

After a recent summit between new partners China and Russia, General Secretary Xi Jinping and Russian Federation President Vladimir Putin issued an odd one-sentence communique: “There can be no winners in a nuclear war and it should never be fought.”

No one would disagree, even though several officials of both hypocritical governments have previously threatened their neighbors with nuclear attacks.

But still, why did the two feel the need to issue such a terse statement—and why now?

Rarely has the global rhetoric of mass annihilation reached such a crescendo as the present, as existential wars rage in Ukraine and Gaza.

In particular, Putin at least believes that he is finally winning the Ukraine conflict. Xi seems to assume that conventional ascendant Chinese military power in the South China Sea has finally made the absorption of Taiwan practicable.

They both believe that the only impediment to their victories would be an intervention from the U.S. and the NATO alliance, a conflict that could descend into mutual threats to resort to nuclear weapons.

Thus the recent warnings of Xi and Putin.

Almost monthly, North Korean dictator Kim Jong Un continues his weary threats to use his nuclear arsenal to destroy South Korea or Japan.

A similarly monotonous, pro-Hamas Turkish president, Recep Erdogan, regularly threatens Armenians with crazy talk of repeating the “mission of our grandfathers.” And he occasionally warns Israelis and Greeks that they may one day wake up to Turkish missiles raining down upon their cities.

More concretely, for the first time in history, Iran attacked the homeland of Israel. It launched the largest wartime array of cruise missiles, ballistic missiles and drones in modern history—over 320 projectiles.

Iran’s theocrats simultaneously claim they are about ready to produce nuclear weapons. And, of course, since 1979, Iran has periodically promised to wipe Israel off the map and half the world’s Jews with it.

Most ignore these crazy threats and write them off as the braggadocio of dictators. But as we saw on October 7, the barbarity of human nature has not changed much from the premodern world, whether defined by savage beheading, mutilations, murdering, mass rape, torture, and hostage taking of Israeli elderly, women, and children.

But what has radically transformed are the delivery systems of mass death—nuclear weapons, chemical gases, biological agents, and artificial-intelligence-driven delivery systems.

Oddly, the global reaction to the promise of Armageddon remains one of nonchalance. Most feel that such strongmen rant wildly but would never unleash weapons of civilizational destruction.

Consider that there are as many autocratic nuclear nations (e.g., Russia, China, Pakistan, North Korea, and perhaps Iran) as democratic ones (U.S., Britain, France, Israel, and India). Only Israel has an effective anti-ballistic missile dome. And the more the conventional power of the West declines, the more in extremis it will have to rely on a nuclear deterrent—at a time when it has no effective missile defense of its homelands.

In a just-released book, The End of Everything, I wrote about four examples of annihilation—the classical city-state of Thebes, ancient Carthage, Byzantine Constantinople and Aztec Tenochtitlán—in which the unimaginable became all too real.

In all these erasures, the targeted, naïve states believed that their illustrious pasts, rather than a realistic appraisal of their present inadequate defenses, would ensure their survival.

All hoped that their allies—the Spartans, the anti-Roman Macedonians, the Christian nations of Western Europe, and the subject cities of the Aztecs—would appear at the eleventh hour to stave off their defeat.

Additionally, these targeted states had little understanding of the agendas and capabilities of the brilliantly methodic killers outside their walls—the ruthless wannabe philosopher Alexander the Great, the literary patron Scipio Aemilianus, the self-described intellectual Mehmet II, and the widely read Hernán Cortés—who all sought to destroy utterly rather than merely defeat their enemies.

These doomed cities and nations were reduced to rubble or absorbed by the conquerors. Their populations were wiped out or enslaved, and their once-hallowed cultures, customs, and traditions lost to history. The last words of the conquered were usually variations of, “It can’t happen here.”

If the past is any guide to the present, we should take heed that what almost never happens in war can certainly still occur.

When killers issue wild, even lunatic, threats, we should nonetheless take them seriously.

We should not count on friends or neutrals to save our civilization. Instead, Americans should build defense systems over the skies of our homeland, secure our borders, ensure our military operates on meritocracy, cease wild deficit spending and borrowing, and rebuild both our conventional and nuclear forces.

Otherwise, we will naively—and fatally—believe that we are magically exempt when the inconceivable becomes all too real.

*  *  *

Victor Davis Hanson’s The End of Everything. How Wars Descend into Annihilation was just released by Basic Books.

Tyler Durden Fri, 05/24/2024 - 06:30

The Start Of De-Dollarization: China's Move Away From The USD

Since 2010, the majority of China’s cross-border payments, like those of many countries, had been settled in U.S. dollars (USD). As of the first quarter of 2023, that’s no longer the case.

As Visual Capitalist's Julian Wendling shows in the grrahic below, from the Hinrich Foundation, the Chinese renminbi (RMB) is growing in popularity in payments both domestically and globally.  

The De-Dollarization of China’s Cross-Border Transactions

This analysis uses Bloomberg data on the share of China’s payments and receipts in RMB, USD, and other currencies from 2010 to 2024. 

In the first few months of 2010, settlements in local currency accounted for less than 1.0% of China’s cross-border payments, compared to approximately 83.0% in USD. 

China has since closed that gap. In March 2023, the share of the RMB in China’s settlements surpassed the USD for the first time.

Since then, the de-dollarization in Chinese international settlements has continued.  

As of March 2024, over half (52.9%) of Chinese payments were settled in RMB while 42.8% were settled in USD. This is double the share from five years previous. According to Goldman Sachs, foreigners’ increased willingness to trade assets denominated in RMB significantly contributed to de-dollarization in favor of China’s currency. Also, early last year, Brazil and Argentina announced that they would begin allowing trade settlements in RMB. 

Most Popular Currencies in Foreign Exchange (FX) Transactions

Globally, analysis from the Bank for International Settlements reveals that, in 2022, the USD remained the most-used currency for FX settlements. The euro and the Japanese yen came in second and third, respectively.

The Chinese renminbi, though accounting for a relatively small share of FX transactions, gained the most ground over the last decade. Meanwhile, the euro and the yen saw decreases in use. 

The Future of De-Dollarization

If the RMB’s global rise continues, the stranglehold of the USD on international trade could diminish over time.  

The impacts of declining dollar dominance are complex and uncertain, but they could range from the underperformance of U.S. financial assets to diminished power of Western sanctions.

However, though the prevalence of RMB in international payments could rise, a complete de-dollarization of the world economy in the near- or medium-term is unlikely. China’s strict capital controls that limit the availability of RMB outside the country, and the nation’s sputtering economic growth, are key reasons contributing to this.

Tyler Durden Fri, 05/24/2024 - 05:45

Reality Check Looms For Rosy European Growth Expectations

By Michael Msika, Bloomberg Markets Live reporter and analyst

After a massive wave of optimism on European markets, the expected economic improvement that has buoyed stocks now has to be delivered.

The uptrend is still intact for the Stoxx 600 but signs of overheating have cooled markets, especially after investors priced in a lot more optimism than the economic data actually showed. European preliminary PMIs, due later in the day, might give more clues about the growth outlook, given the still uncertain path of monetary policy.

Stalling manufacturing PMIs over the past couple of months were accompanied with a clear wobble in cyclical equities relative to defensives. A similar pattern could be expected without a significant improvement in the data, as the gap with stocks remains very wide.

“We are in favor of high quality exposure over cyclicals,” say UBS strategists Gerry Fowler and Sutanya Chedda, adding that while the date doesn’t yet point to stagflation ahead, markets are underestimating that possibility. “European equities have rallied strongly to reflect the change in sentiment and discount rates but if softer margins offset sales growth, earnings growth may not propel a bull market.”

After a massive outperformance from cyclical equities, mostly backed by earnings delivery and bottoming economic data, things are starting to look stretched. The group is up 30% since the end of October, more than twice the returns of defensives and dwarfing the Stoxx 600’s 20% surge, and the first quarter earnings season has started to show cracks in the bull case.

“Cyclical sector earnings are softening vs defensives,” say JPMorgan strategists led by Mislav Matejka, pointing that median cyclical vs defensives EPS growth for the Stoxx 600 is at -15%, the worst print since the second quarter of 2020. The strategists have argued for a rotation into defensives last month, especially into utilities and real estate. They are particularly concerned about the earnings prospects of carmakers, citing pricing, volumes and margin weakness. “European activity momentum is improving vs last year, but is still anemic in the historical context, and some of the margin pressures could emerge,” they say.

Even if Europe is a more cyclical market than the US, that doesn’t mean it can’t perform without a cyclical boost. In fact, the recent performance of the overall stock market has shown a clear broadening, consistent with the uncertainty regarding the economic outlook and the monetary policy.

“Although equities have strongly rebounded, the dovish tape has led to a notable rotation within the market. Leadership has indeed turned more barbell, a healthy and logical development in our view, given that cyclicals were looking extended on a number of macro and fundamental measures,” say Barclays strategists led by Emmanuel Cau. “Irrespective of the volatility of US cut expectations, we believe the growth/policy mix in Europe is getting more favorable. We see green shoots emerging in the economy, while upcoming ECB/BOE cuts should open up opportunities within the market.”

Technically, the picture isn’t worrying yet during this consolidation phase. DayByDay technical analyst Valerie Gastaldy shows that the Stoxx 600 has opened three gaps on the way up to 525.2. She notes that the most recent one has been closed, and the index came to a halt, even though US indexes made new highs.

So how far can it fall? Gastaldy notes that a drop down to 514 would bear “no consequence for the trend. Should prices fall below this level, we would have to assume that the index is correcting either the trend started in January, or the one started at the end of October,” she says. “For the time being, the trends remain bullish, though the correction could extend some 2% below current prices.”

Tyler Durden Fri, 05/24/2024 - 05:00

Ukraine Enforces Desperate Conscription Laws As Russian Troops Close In On Kharkiv

Ukraine is now enforcing a new mobilization law which is being called 'divisive' among many Ukrainian citizens and some political leaders.  The law requires men ages 18-60 to carry their military paperwork at all times to be presented to authorities on demand.  It lowers the minimum draft age from 27 to 25 (Ukraine has a demographic shortage of men ages 18-25).  And, all military age Ukrainian men abroad must come back to Ukraine to renew their passports, including refugees driven from their homes in the early days of the war.  

Conscripts must update their address, contact information, and military records within 60 days through government institutions or a mobile application.  This is in preparation for a national draft database containing information on every fighting age male in the country.  The conscription measures are expected to greatly reduce Ukraine's labor pool, forcing many businesses to shut down.  Essential workers are not exempt from the draft.

Vladimir Zelensky signed two other bills into effect, one allowing prisoners to be deployed to the front lines (the western media criticized Russia last year for implementing a similar measure), the other bill quintuples fines for people caught trying to evade the draft.    

Early versions of the law allowed for concessions on pay and better rotation for soldiers, including a policy which would relieve soldiers serving for 36 months or more.  All demobilization concessions were removed from the final version; Ukraine's military leadership argued that they needed the most experienced soldiers to remain at the front.

Kyiv has offered cash bonuses to troops towards purchases of housing and cars as an incentive to join the war effort, however, critics argue that the Ukrainian treasury does not actually have the funds to fulfill the promises Zelinsky is making. 

To counter charges of undermining soldier morale, the Ukrainian Defense Ministry says it is working on a separate demobilization bill, but massive manpower shortages make any demobilization action highly unlikely.  Front line soldiers have repeatedly complained about the lack of rotation, with some rarely getting a chance to leave the trenches in the past two years.

These desperate conscription laws arrive just as Russian forces close in on Kharkiv, the second largest city in the nation.  Bombardment of the city's defenses and infrastructure is already underway in preparation for a possible offensive.  Some analysts argue that Russia does not have enough troops to to take Kharkiv and that this is a distraction.  Russia may open a new front near Sumy which is 100 miles away, or they may plan to full envelope Kharkiv because they know Ukraine's troop strength is at a minimum. 

The western media has been an avid mouthpiece for the Ukrainian government over the past couple years with many pundits shaming Ukrainian citizens who have tried to leave to avoid being involuntarily mobilized.  Seeing the complete lack of organization and the habitual embezzlement of funds among Ukraine's leadership it's not surprising that many citizens do not want to fight for them.  If only the media was as energetic about promoting peace negotiations as it has been about promoting war.

Tyler Durden Fri, 05/24/2024 - 04:15

Overreporting COVID-19 As An Underlying Cause Of Death Inflated Mortality Numbers During Pandemic: Analysis

Authored by Megan Redshaw, J.D. via The Epoch Times (emphasis ours),

A new analysis suggests COVID-19 was reported more frequently than it should have been as an underlying cause of death, inflating COVID-19 mortality numbers and attributing deaths from other causes to the virus.

(Lane V. Erickson/Shutterstock)

In a preprint paper published in Research Gate, researchers aimed to identify who truly died “from” COVID-19 versus who died “with” COVID-19 but were included in U.S. COVID-19 mortality numbers.

To determine if COVID-19 was overreported as an underlying cause of death, researchers calculated the overreporting adjustment factor and compared the ratio of reporting COVID-19 as a multiple—or contributing—cause of death versus an underlying cause of death on death certificates from 2020 to 2022. They also examined how “pneumonia and influenza” were reported on death certificates from 2010 to 2022.

An overreporting adjustment factor for mortality is a statistical correction applied to mortality data to account for the propensity of certain death counts reported more frequently or inaccurately than others. It typically involves comparing reported death counts to a more accurate independent benchmark, which helps ensure data reflect the true incidence of deaths in a population. Here, the researchers chose pneumonia and influenza because the conditions are similar in nature to COVID-19, and they could compare patterns using mortality data before and after the pandemic began in 2020.

According to the preprint, data show COVID-19 was systematically overreported as an underlying cause of death during the pandemic by an average of about three times for all ages compared to influenza and pneumonia during the same period—and was highest in those aged 15 to 54. Additionally, only about one-third of influenza and pneumonia-related deaths were reported as underlying causes, whereas almost all COVID-19-related deaths were reported as “deaths from COVID-19.”

When comparing underlying cause death rates for different age groups for COVID-19 with death rates from influenza and pneumonia, researchers observed that underlying cause COVID-19 death rates were higher than those for influenza and pneumonia in the 15 to 24 and older age groups. After adjusting to obtain the overreporting factor, they found COVID-19 death rates were still higher than they were for influenza and pneumonia for ages 25 to 34 and older and equal for those aged 15 to 24.

About 30 percent of influenza and pneumonia-related deaths were registered as an underlying cause of death on death certificates, whereas 90 percent of COVID-19 deaths were recorded as the underlying cause of death in 2020 and 2021. In 2022, 76 percent of COVID-19 deaths were registered as the underlying cause.

“There was a systematic overreporting of deaths from COVID when we analyze versus the flu and pneumonia, as almost all COVID deaths were reported as the underlying cause,” Edward Dowd, founder of Phinance Technologies, told The Epoch Times. “Basically, when one wants to understand the pandemic, only about 30 percent of the reported COVID-19 deaths were ‘from COVID-19’ as the underlying cause,” Mr. Dowd said.

How the US Counts COVID-19 Deaths

Each country has its own criteria for determining what constitutes a COVID-19-related death. The United States uses the World Health Organization’s (WHO) classification system to categorize and code mortality data from death certificates.

The WHO defines the underlying cause of death as “the disease or injury which initiated the chain of events leading directly to death, or the circumstances of the accident or violence which produced the fatal injury.” The underlying cause of death is chosen from the conditions listed by the physician on the death certificate. When the physician records multiple causes or conditions, the underlying cause is determined by the sequence of conditions that led to the death on the certificate, ICD provisions, and selection rules.

“The WHO methodology for identifying COVID-19-related deaths cast a wide net for potential classification of COVID-19 as either the underlying cause of death or a contributory cause of death, which could lead to over-reporting relative to other diseases. This led to criticisms of suspected over-counting of COVID-19-related deaths during the pandemic. As an example, a CDC mortality report indicated that COVID-19 was the sole cause of only about 5% of listed COVID-19 deaths,” the authors of the analysis wrote.

Each death certificate contains a single underlying cause of death and up to 20 additional multiple or contributing causes. According to the Centers for Disease Control and Prevention (CDC), properly classifying the death on a death certificate is important for mortality trends that inform public health risks and policy decisions.

Causes of Overreporting COVID-19 Deaths

According to the analysis, incentives for recording positive COVID-19 tests may have contributed to an overreporting bias in deaths attributed to COVID-19 compared to other diseases. Since the beginning of the pandemic, COVID-19 deaths have included those who died with COVID-19 and from COVID-19, and more recently, those who died of conditions attributed to long COVID, even if they had not tested positive for the virus in recent months or years.

The White House acknowledged early on that health officials were taking a very liberal approach to mortality regarding COVID-19.

“There are other countries that if you had a preexisting condition, and let’s say the virus caused you to go to the ICU and then have a heart or kidney problem, some countries are recording that as a heart issue or a kidney issue and not a COVID-19 death,” former White House coronavirus response coordinator, Dr. Deborah Birx told reporters during an April 2020 press briefing.

“Right now, we’re still recording it, and the great thing about having forms that come in and a form that has the ability to mark it as ‘COVID-19 infection’ the intent is right now that if someone dies with COVID-19, we are counting that as a COVID-19 death,” Dr. Birx said.

State health departments use the CDC’s standardized surveillance case definition and uniform criteria to define a disease for public health surveillance. They also report COVID-19 cases through the agency’s National Notifiable Diseases Surveillance System. At the beginning of the pandemic, the CDC’s definition of COVID-19 was “very simplistic,” and health departments recorded anyone with a positive COVID-19 diagnosis at the time of death a COVID-19 death, even if a clear alternative cause of death existed.

Likewise, medical examiners and coroners follow CDC guidelines when completing death certificates, and the agency’s National Center for Health Statistics provides standardized forms and procedures for certifying deaths, including how to determine underlying causes of death and report related causes.

CDC guidance states that in cases where a “definite diagnosis of COVID-19 cannot be made, but is suspected or likely,” it is “acceptable” to report COVID-19 on the death certificate as “probable” or “presumed” and certifiers can use their best clinical judgment in determining whether an individual likely had COVID-19. It’s this same discretion that allows long COVID to be counted as a COVID-19 death long after an individual tested positive for infection.

The CDC broadly defines long COVID as “signs, symptoms, and conditions that continue to develop after acute COVID-19 infection” that can last for “weeks, months, or years.” The term is also used to refer to post-acute sequelae of SARS-CoV-2 infection (PASC), long-haul COVID, and post-acute COVID-19.

The CDC guidance gives a physician or medical examiner discretion to classify long COVID as a COVID-19 fatality, and the CDC death certificate guidance allows for PASC to be listed as an underlying cause of death, which may affect COVID-19 mortality numbers.

A December 2022 Vital Statistics Rapid Release Report published by the CDC identified 3,544 deaths in the National Vital Statistics System that mentioned long COVID key terms and were coded as COVID-19 deaths in the United States from Jan. 1, 2020, through June 30, 2022.

Tyler Durden Fri, 05/24/2024 - 03:30

"Hybrid Pressure": Russian Proposal To Change Baltic Sea Border Briefly Appears Online

Russia just gave its Baltic neighbors a big scare this week, after a new draft decree appeared on a government website published by the defense ministry which proposed redrawing 100+ year old borders around Russian islands in the Gulf of Finland as well as around the exclave of Kaliningrad.

The draft appeared briefly on Russia's TASS news agency only to disappear by Wednesday, where a page at the link said "draft deleted". Russian media has since denied that there are any such plans to move sea borders deeper into Baltic waters.

Maritime boundaries in the Baltic Sea. Source: The Baltic Marine Environment Protection Commission

The now deleted draft suggested a maritime border change would "correspond to the modern geographical situation"; however, Kremlin spokesman Dmitry Peskov downplayed it saying "there is nothing political here".

But Peskov also added the caveat that the political situation in the region had changed since the 1980s: "You can see the level of confrontation, especially in the Baltic region," he stated in response to questions.

Finland, Lithuania, and Sweden raised the alarm over what they see as a subtle threat and Kremlin effort to sow confusion and instability:

A Russian Defense Ministry proposal to redraw Russia’s maritime borders in the Baltic Sea has sparked concern from Moscow’s neighbors in the region, with officials from Finland to Lithuania decrying what they describe as an attempt to sow confusion and destabilize regional security.

While the Kremlin insisted Wednesday that the government draft resolution was not politically motivated, experts told The Moscow Times that the proposed changes could be used to put pressure on Russia’s western neighbors — all of whom are EU and NATO members.

“This is an issue that shows Russia can and is going to create problems and disputes where the situation was already unproblematic,” said Arkady Moshes, who heads the Russia program at the Finnish Institute of International Affairs (FIIA).

“So it’s a part of this hybrid pressure,” he told The Moscow Times.

Lithuanian Foreign Minister Gabrielius Landsbergis said in the wake of the controversy, "This is an obvious escalation against NATO and the EU, and must be met with an appropriately firm response." Finland’s Foreign Ministry decried it as "a form of hybrid influencing" - and Sweden warned it can be seen as an expansionist move.

Below is some of what the since deleted document outlined...

2/ The Russian MoD produced a since-deleted document proposing that the Russian government should reassess the 1985 maritime borders in the Gulf of Finland because these borders were based on outdated “small-scale nautical navigation maps” developed in the mid-20th century. pic.twitter.com/XrZkZS5JgQ

— Institute for the Study of War (@TheStudyofWar) May 23, 2024

What appeared in the Russian Defense Ministry document did not present details of precisely how the maritime borders could change, but was clearly enough to spook officials in neighboring countries. Tyler Durden Fri, 05/24/2024 - 02:45

Ukraine: You Break It, We Take It

Authored by Citizen Soldier via RealClearDefense,

All Aboard! Here comes the latest Postwar Gravy Train, laden with massive government spending, lax oversight and other goodies for cunning contractors and economic opportunists seeking to benefit from the near-destruction of Ukraine.

Last week, the State Department announced it intends to seize Russian assets in the United States to help fund rebuilding efforts, though the estimated $300 billion here and in Europe won’t cover the projected price tag of $500 billion. “What Putin destroyed, Russia should – must – pay to rebuild,” Secretary of State Antony Blinken said.

Like an earlier generation of interventionists, Blinken cites the “Pottery Barn rule” – You Break It, You Own It – to explain an aggressor’s moral obligation to rebuild. Colin Powell used the same reasoning in the summer of 2002, as a "caution" to President George W. Bush about the consequences of military action in Iraq. A major difference is the dollars at stake. American and European firms undoubtedly are eager to reconstruct a modern, high-tech country from the ground up.

Our government seeks every opportunity to impose itself, at home and abroad, but has a poor track record for managing projects.

No-bid contract awards, bribes and billions of missing dollars are the legacy of the Coalition Provisional Authority’s rebuilding work in Iraq, where officials concluded that not enough was accomplished for the amount of funds expended. We learned that when taxpayer money is plentiful, oversight and results will be negligible. Just imagine how generous and hands-off our government might be spending Russia’s money.

Not everyone endorses the act of confiscating Russia’s money, pointing to the principle of reciprocity as a reason to show restraint. “Stealing” the assets of a foreign country sets a dangerous precedent that could be applied against us. For example, what if China confiscates American assets to fund rebuilding projects in Libya, Iraq or other nations the United States has damaged through war?

The DC hype-meisters talk about the Great Power Competition of wannabe superpowers; they tell us that China is on the brink of becoming the dominant international force, that Russia is preparing to seize all of Europe. Here, though, the façade falls away—the elites believe the United States has no economic or military peers. When you’re as rich and mighty as America, there’s no fear of reciprocity.

The elites will do what’s in the immediate best interest of their friends, which include certain corporations and investors who will benefit from the most extensive international project since World War II. For this group, the only morality is a morality of power: Treating other nations the way you want to be treated is a rule for losers and weaker players.

Blinken and the politicians talk about our categorical imperative in Ukraine, how the world relies on America to “defend democracy” and “protect the rules-based order.” But their words ring hollow. The cynical truth is that what Russia breaks, America will take—using confiscated money to fund a massive rebuilding project that will be poorly managed, but lucrative for the chosen few involved.  

Citizen Soldier believes in life, liberty and the pursuit of Happiness.

Tyler Durden Fri, 05/24/2024 - 02:00

US-UK Intelligence Warning: China Cyberthreats Pose 'Epoch-Defining' Challenge

Authored by James Gorrie via The Epoch Times,

The cybersecurity wars between communist China and the West are raging, yet few people realize what’s really going on. That’s now changing.

The Chinese regime’s ability to launch successful cyberattacks against American and British defenses is higher than it has ever been. New attack tactics, techniques, and protocols (TTPs) developed by the Chinese Communist Party’s (CCP’s) cyber division are threatening the integrity and functionality of Western nations’ military communications, operations, and other critical systems.

(L to R) MP Tim Loughton, Sir Iain Duncan Smith, and MP Stewart McDonald during a press conference at the Centre for Social Justice in central London on March 25, 2024. The Chinese regime is believed to have targeted a group of senior MPs and peers with a fresh series of cyberattacks aimed at undermining UK democracy. (Jordan Pettitt/PA Wire)

That may be why the United States and the UK are now publicly speaking about these critical threats, warning the Chinese and other national threat actors with which they coordinate to cease these provocative attacks. To that point, American, British, and European officials have warned that the Chinese regime’s cyberattacks are both coercive and destabilizing. As an indication of just how serious those threats are, the UK summoned the Chinese ambassador as a formal response to the regime’s increasing cyber threats to the UK.

UK: Defending Against China’s Cyberattacks Is ‘Top Priority’

To underscore their concern, Anne Keast-Butler, director of the Government Communications Headquarters (GCHQ), the UK’s top-tier surveillance agency, said at a security conference in England’s city of Birmingham that responding to China’s cyber activities was “a top priority” for GCHQ. This isn’t the first time the UK government has had to confront Beijing about its illegal and threatening activities in cyberspace, but of late, it’s become a much bigger problem.

In fact, last month, British Prime Minister Rushi Sunak said Chinese hackers working for the CCP were running “malicious cyber campaigns” against UK lawmakers and UK media and were also responsible for a hack on the British Armed Forces’ payments system. The prime minister spoke further about the cyber threats, saying his country faced an “axis of authoritarian states like Russia, Iran, North Korea, and China.”

What’s more, British authorities have charged three men with spying for Hong Kong’s foreign intelligence service in the UK. The men are accused of being Chinese state-sponsored hackers and stealing election data from the UK’s elections offices, as well as performing surveillance operations in the UK. Beijing stated that the case was “a fabrication.” When pressed about these and other cyber activities and the threats they pose to international norms and the security of the United States, the UK, and European countries, Beijing denied the existence of such threats, dismissing them as “absurd.”

These events put additional strains on UK relations with China.

The Volt Typhoon Threat and Beyond

These official accusations follow in the wake of the confrontation that Washington had with Beijing several weeks ago regarding its advanced “Volt Typhoon” attack. That attack involved the discovery of the long and undetected presence of Chinese infiltration into vital U.S. operational systems across a variety of verticals. It was determined that Chinese attackers had breached the networks of dozens of American critical infrastructure organizations that control electrical power, water, and both civilian and military communication systems via a widespread network of compromised servers and computers.

FBI Director Christopher Wray contends that Volt Typhoon would be used to disrupt, if not eliminate, control of the critical infrastructure systems mentioned above, as well as other strategic assets, prior to launching a military campaign against the United States or Taiwan. Again, Beijing has denied any official connection to the Volt Typhoon attack.

Hackers Penetrating US Defense Systems

However, at the Birmingham security conference, National Cyber Director Harry Coker asserted that Chinese hackers were violating U.S. defense sites in cyberspace and targeting U.S. interests at an “unprecedented scale.” Mr. Coker highlighted the severity of this threat, noting that “in a crisis or conflict scenario, China could use their pre-positioned cyber capabilities to wreak havoc in civilian infrastructure and deter U.S. military action.”

The British prime minister and the GCHQ chief emphasized their rising concerns about China’s cyberattacks and their impact on the global order. Mr. Sunak said the next few years would be “dangerous and transformational,” while Ms. Keast-Butler said that “Russia and Iran pose immediate threats, but China is the ‘epoch-defining’ challenge.”

As China’s Power Rises, So Do Attacks

However, the United States, the UK, and Europe aren’t the only targets of Chinese hackers. The Philippines has seen a fourfold rise in Chinese cyberattacks year over year as friction between the two has increased. The parallel between the Chinese regime’s growing military power and influence in the world and its rising level of cyberattacks against its adversaries can’t be overlooked. Nor can the fact that the United States and the UK feel the need to publicly point the finger at China.

Cyberattacks have occurred for decades, but this is a clear change from how they were handled in the past, when they were managed at the government level. However, with China’s apparent ability to penetrate even the most highly guarded systems, the next few years may well be, as the British observed, “destabilizing,” “transformative,” and “epoch-defining.”

Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times or ZeroHedge.

Tyler Durden Thu, 05/23/2024 - 23:40

Putin's Purge? Another Top Russian General Arrested On Bribery Charges

Is this the continuation of what appers an ongoing purge by President Vladimir Putin of his top defense ranks? 

The Kremlin escalated its crackdown on Russia’s top military ranks, with a new corruption arrest this week.

Russian authorities detained Lieutenant-General Vadim Shamarin, deputy to General Valery Gerasimov, head of the army’s general staff, on suspicion of large-scale bribe-taking, Russian state media reported Thursday. 

It is the fourth arrest in the past month of a high-ranking military official, marking the biggest Russian army scandal in years. The detentions come as President Vladimir Putin carries out a sweeping reshuffle of top jobs, including a change at the head of the Ministry of Defense.

Lieutenant-General Vadim Shamarin, deputy head of the army's general staff. Handout/Reuters

The arrest comes closely on the heels of the biggest reshuffling in military leadership since the Ukraine invasion's start: the May 12th removal of Defense Minister Sergei Shoigu (or rather, he was shifted to head of the national security council) and installation of Andrei Belousov.

"On May 22, the court chose a preventive measure for Shamarin in the form of detention for a period of two months," a court official was cited in AFP as confirming. Additionally a senior defense ministry procurement official identified as Vladimir Verteletsky was also reportedly detained.

The court has alleged Shamarin accepted bribes "at an especially large scale" while overseeing the doling out of state contracts:

Russia’s Investigative Committee, which probes major crimes, announced later on Thursday that the general is accused of accepting 36 million rubles ($397,000) from the executives of a phone manufacturing plant for “general patronage” and ensuring higher product supplies through Defense Ministry contracts.

He is currently in pretrial detention. As for recent removals which are specifically criminal cases, below is a review of the series of arrests:

• Deputy Defense Minister Timur Ivanov was detained in late April
• Lieutenant-General Yuri Kuznetsov, head of personnel at the defense ministry
• Major-General Ivan Popov, a former top commander for Russia’s offensive in Ukraine

Despite all appearances, the Kremlin is still denying that a "purge" is in progress - but instead a mere serious campaign to root out corruption.

Kremlin spokesman Dmitry Peskov told RIA in the wake of the detention of Gerasimov's deputy, "The fight against corruption is a continuous effort. This is not a campaign. It is an integral part, in fact, of the activities of our law enforcement agencies."

So this string of arrests is being presented as an open and shut simple enforcement of the law, but this is hardly convincing many Russia observers in the West. For example, the BBC's Russia Editor Steve Rosenberg has observed: "When one top defense official in Russia is arrested, that’s interesting. When four senior defense figures are arrested in less than a month, that’s more than a pattern...begins to look like a purge."

As for head of the army, Gen. Gerasimov... while this certainly puts him under a greater spotlight (as his #2 just went down), he is not accused of any wrongdoing, but still has come under increased criticism among Kremlin officials of late for how the 'special military operation' is being executed in Ukraine.

Tyler Durden Thu, 05/23/2024 - 23:20

The Unifying Principle: Here's Why The Political Divisions In The US Today Cannot Be Mended

Authored by Brandon Smith via Alt-Market.us,

Recently I was watching a short documentary about the history of political discourse and division in the US and it got me thinking about how the internal conflicts of the past might relate to the rampant social battles Americans are dealing with today. From early disagreements between various Founding Fathers on hot button issues like the Sedition Act, central banking and standing armies, to epic and disastrous conflagrations like the Civil War, America has never been “of one mind” on everything.

Overall, though, the longstanding assumption is that even when we slip and fall into disarray Americans will find common ground and move on towards the future together.  It’s a nice sentiment, but what if this ideal no longer applies?

There are some people that argue there was never a golden era for the US; that we’ve always been destructive, or exploitative or “imperialist.” Of course, it’s very easy to examine any given time period through the lens of modern sensibilities and pass judgment. How we would do things today is not necessarily how we would do things yesterday. We can’t easily condemn the men and women of the past without at least recognizing that we will probably never see the issues of their day from their perspective.

The political left is the most egregious violator of this principle. They have a bad habit of trying to rewrite history according to their current ideological cultism and applying their taboos to time periods when civilization had very different views on how to function. The progressive philosophy is partially rooted in “futurism”; the idea that all old ideas and ways of doing things must be abandoned to make way for new methods. In other words, they think everything “new” is better and must be embraced.

Frankly, this theory has never proven correct. Not every old idea should be left behind and not every new method is better. In fact, most ideas that leftists think are new are actually very old. There’s nothing ground breaking about DEI (Diversity, Equity and Inclusion), it’s just another form of Marxism based on personal identity rather than the traditional class politics.

Do you want to know what DEI really is? It’s a vehicle for forced association.

Forced association is used to leverage populations into a homogeneous soup, a hive mind with no individual thought or right to discriminate against destructive groups and ideologies.  But if America is experiencing an agenda of forced association today then we have to ask – What is there to be gained?  Why pressure people who fundamentally disagree with each other on every level to coexist within a society? Why do the people in power want this so badly?

Well, for the central planners (usually socialists/globalists), tribalism is a big no-no. People going their own way is unacceptable. If the populace thinks they can divide and separate and live differently from each other, then how can the establishment continue to exist? For a one-world government to be achieved ALL divisions must be erased and everyone has to either love or fear the purveyors of “unity.”

Separation must, therefore, be demonized.  The problem is, there’s no way to blackmail a population into association, not in the long term anyway.  A group is an abstraction without form; it means nothing until the individuals involved share a unifying principle.  When I look back at political disagreements in history I find that there is a vital factor that existed during past conflicts that does NOT exist today.

Even during the worst of times including the Civil War both sides of the division held the same basic principles and morals. They had a lot of the same values, a shared religion and a shared understanding of reality. They were people connected by the same American soul, they merely disagreed on singular issues. The goal for each side was for America and its fundamental heritage to survive, even if they didn’t always obey every aspect of the Constitution or the existing leadership at the time. This is not how things work in 2024.

In terms of surface level politics its obvious that there will never be peaceful reconciliation between woke progressives and conservatives/independents. One side or the other has to go, and I think the majority of people in the US want leftists to go.

To be clear I’m not saying that all people on the political left are exactly the same. There’s definitely a political spectrum from traditional liberals to extreme activists. But there is no denying that, for now, woke zealots control the levers of power and influence within the Democratic Party and the leftist media. They also have the explicit backing of every major institution from corporations to NGOs to government.

You don’t see a whole lot of average Democrats with the guts to stand up and criticize their own side even when they know there’s something very wrong happening. They go along with the program either out of laziness or fear. With conservatives the reverse is true. Conservatives can’t seem to organize a damn thing because we constantly disagree with each other when it comes to solutions.

And let’s not forget the fence riders out there. It’s sure nice to always be out of the fray and in the rear with the gear while pretending as if you’re “above it all.” That’s a very comfortable place to be because it allows a person to avoid risk while appearing as if they’re taking the high road. Much like a slippery academic who never defines his position in a debate so that he can change his arguments on a whim.

The issue is that, even though fence riders don’t want to admit it, there are times when one side is right and one side is utterly wrong. Sometimes there is no middle ground.

A lot of moderates are finally waking up to the horrors of the collectivist movements in our midst. Maybe it was the pandemic lockdowns or the attempted trans indoctrination of children or the unhinged nature of far-left activists in the streets but somewhere along the way moderates finally realized conservatives were RIGHT all along about a lot of things. We were fighting to save their freedoms years ago while they were acting cool and wondering what all the fuss was about.

There are a lot of factors that set conservatives (and a many moderates) apart from the political left, but the core disconnect is so deep and disturbing it’s hard to quantify. I can only summarize it down to this:

1) The unifying principle of the left is deconstruction. They find their meaning or purpose in the act of tearing down and destroying what other people have built.

2) The unifying principle for conservatives is to build and protect what has been found to work.

Humanity’s best bet for success is liberty with responsibility, free markets and meritocracy. All things we are trying to preserve, and all things that leftists want to blow up.

For progressives the most important question is: What happens when they’ve destroyed the last edifice? What comes next? If dismantling systems is their unifying principle what will they do when they have nothing else to dismantle? What happens when every plate in the china shop is broken? They are incapable of creating a new and functional society so they would need an outside foundation.

In this regard I set globalists apart from typical leftists. Globalists are indeed leftists at their core but they are also builders, and not in a good way. Globalists don’t build societies, they build prisons. Once the useful idiots on the left have finished the job of deconstructing America the globalists plan to come in with a new ideal, a new religion, a new foundation based on worshiping THEM.

Here is where we find the greatest split of all – The spiritual nature of our impasse.

I’ve definitely never been one to promote the concept of theocracy and I have many scruples when it comes to “Earthly” religious organizations. Anything governed by men can be corrupted. But I also accept that America was built by a majority Christian society following integral Christian values. I don’t think every American needs to be Christian. The Founding Fathers understood that religious freedom is essential. But we must acknowledge and embrace the fact that the country works best when Christianity is at the forefront.  At least there is a unifying moral code to hold the framework together.

Furthermore, it would be far easier to reconcile Christian social systems with science and critical thinking than it will be to reconcile freedom loving Americans with far-left collectivists. The woke cult is much more hostile to science today than Christians are; they even refuse to acknowledge human biology.  I also think Christianity is growing along with newer generations of conservatives with a greater respect for skepticism.  We could see a renaissance following the paths set by great Christian thinkers like Thomas Aquinas or C.S. Lewis.

I’m seeing a lot of the old blind devotion to the Republican Party fall by the wayside and a greater focus on what politicians achieve rather than what they promise. I’m seeing people on the right embrace the value of comedy and pop culture more, which has always been a problem for conservatives. And, I’m seeing science open doors to religious thought instead of trying to close them. As humanity delves deeper into quantum physics, cosmology and even the mind sciences, our relationship to the great beyond requires consideration of the physical AND the metaphysical.

It’s the kind of thing that would make progressives rage and foam at the mouth.  For them, science must always be in service to their causes or it ceases to have value, and one of their primary causes is the erasure of Christianity.  They’ll never allow a world where science and religion work together to build a future in which discovery is balanced with ethical responsibility.

Then there is the issue of moral imperative.  Many of us see the targeting of children for indoctrination and exploitation.  We see the promotion of subjective reality and degeneracy.  We see the inclination towards lies as a tool for political power.  We see leftists caring more about winning and less about the truth.

For the globalists and the woke mob, morality is nothing more than a social construct, but we know that these ideas are inborn and inherent for the majority of people. If they weren’t, humanity would have gone extinct ages ago from self destruction. Leftists don’t agree with the concept of a basic moral code. Leftists don’t even agree that morals are a necessity. They think they can manifest their own reality from thin air. How can we possibly live side-by-side with people who despise every pillar that holds western civilization together?

The answer is – We can’t.  For now I see no path to peace.  Peace would require a unifying principle, a mutual respect, and that does not exist.

*  *  *

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Tyler Durden Thu, 05/23/2024 - 23:00

USAF Releases First Mid-Flight Image Of B-21 Raider 

The B-21 Raider, the US Air Force's latest stealth bomber, was unveiled in December 2022 and is currently undergoing testing at Edwards Air Force Base in California. This cutting-edge aircraft is poised to gradually replace the B-1 and B-2 bombers in the second half of the decade, solidifying its position as the backbone of America's stealth bomber fleet. 

On Wednesday, the USAF released new stunning images of the B-21.

Since the stealth bomber debuted, there has only been a handful of images released and or taken by the public: 

• Air Force Unveils B-21 Raider Stealth Bomber

• USAF Shares New Images Of B-21 Raider

• New Image Reveals B-21 Raider Taxiing Ahead Of Maiden Flight

• First Flight Of B-21 Raider Captured On Video

The B-21 is USAF's first strategic bomber in over three decades and is expected to enter service in the mid-2020s with a production goal of 100 aircraft. 

America is gearing up for conflict as the world fractures into a multipolar state. 

Tyler Durden Thu, 05/23/2024 - 22:40

In Blow To China, Argentina's Milei Looking To US For Defense Cooperation

Authored by Autumn Spredemann via The Epoch Times (emphasis ours),

Over the past decade China’s security footprint in Argentina has grown considerably, but analysts say recent indicators demonstrate President Javier Milei may be shifting defense cooperation back towards the United States.

(Illustration by The Epoch Times, Shutterstock, Getty Images, Shimin Gu/CC, Public Domain, Casa Rosada (Argentina Presidency of the Nation)/CC)

A 2012 agreement between officials in Argentina’s Neuquen Province and Beijing allowed the construction of a deep space tracking station near the Chilean border, that made Washington sit up and take notice.

The 50-year contract grants the Chinese Communist Party (CCP) the ability to operate freely on Argentinian soil. The facility, known as Espacio Lejano, became the precedent for a Chinese ground tracking facility in Rio Gallegos, on the south eastern coastal tip of Argentina, which was formally announced in 2021.

Since the Espacio Lejano contract was signed, analysts and U.S. officials have repeatedly expressed concern over China’s expanding collaboration with Argentina in matters of security and surveillance.

“The PRC [People’s Republic of China] has expanded its ability to extract resources, establish port, manipulate governments through predatory investment practices, and build potential dual-use space facilities,” U.S. Southern Command Gen. Laura Richardson said during a 2023 House Armed Services Committee hearing.

President Milei took office on Dec. 10, 2023, replacing the progressive President Alberto Fernandez, who forged closer ties with China and signed a 2022 deal to join the Communist Party’s Belt and Road Initiative. While campaigning, Mr. Milei made no secret of his disdain for communist regimes and signaled his intent to move away from socialist policies in favor of a more libertarian direction.

In the nearly seven months he has been in office, President Milei has enacted major economic reforms and a downsizing of government.

Other recent “positive indicators” indicate the Milei administration are prioritizing defense relations with the United States over China, said Leland Lazarus, the associate director for national security at Florida International University’s Jack D. Gordon Institute for Public Policy.

“The fact is that in just six months, he’s already visited the U.S. multiple times. He’s met with Secretary Blinken, he’s been to the White House … all that is like absolute music to General Richardson’s ears. To Biden’s ears,” Mr. Lazarus told The Epoch Times.

Ms. Richardson traveled to Argentina in April, on a visit that included the donation of a Hercules C-130H transport aircraft to the Argentinian Air Force and a tour of a naval facility in Ushuaia, Tierra del Fuego, the extreme tip of the country.

“We are committed to working closely with Argentina so that our collaborative security efforts benefit our citizens, our countries and our hemisphere in lasting and positive ways,” Ms. Richardson said in a statement at the time.

Argentine President-elect Javier Milei pauses for a photo while departing from the Eisenhower Executive Office Building, next to the White House in Washington, on Nov. 28, 2023. (Mandel Ngan/AFP via Getty Images)

In Ushuaia, Ms. Richardson met with local military personnel to discuss their role in “safeguarding shipping routes vital to global trade.”

In an Argentinian Ministry of Defense release, President Milei confirmed that Ms. Richardson also checked on the progress of an “integrated naval base” at the Ushuaia naval facility.

Argentine officials stated that they also discussed “legislative modernization in defense matters.”

Under the previous administration, China had been given preferential treatment.

In June 2023, Tierra del Fuego Gov. Gustavo Melella gave China the go-ahead to build a “multi-purpose” port facility near the Strait of Magellan.

The project was promptly met with legislative backlash as three national deputies and members of the Civic Coalition filed an official complaint against the governor’s provincial decree to build a port with Beijing. The same group further accused Mr. Melella of violating Argentina’s national security.

No public records show the project has since moved forward.

Shift in Relations

Mr. Lazarus said Argentina’s desire for deeper security cooperation with Western partners was also evident in April when Argentina’s Minister of Defense, Luis Petri, signed a historic purchase agreement for 24 F-16 fighter jets from Denmark.

“Today we are completing the most important military aeronautical acquisition since 1983,” Mr. Petri said in an official press release.

“Thanks to this investment in defense, I can proudly say that we are beginning to recover our aerial sovereignty and that our entire society is better protected against all those threats that put us to the test.”

The purchase occurred after multiple media reports in 2022 said the previous administration under President Alberto Fernandez was considering the purchase of China–Pakistan-made JF-17 fighter jets. A minister of former President Mauricio Macri’s administration, who asked not to be identified, confirmed to The Epoch Times that a deal to purchase the JF-17 jets was under consideration during the Fernandez era.

Argentina's President Alberto Fernandez (L) arrives at Beijing's airport ahead of the Belt and Road Forum in Beijing on Oct. 17, 2023. (Parker Song/POOL/AFP via Getty Images)

The China snub on such a notable arms deal is telling for some, as the CCP has invested a lot in Argentina’s defense sector.

“From 2009–2019 China transferred a total of $634 million worth of major military hardware to five South American countries—Argentina, Bolivia, Ecuador, Peru, and Venezuela,” a House Foreign Affairs Committee brief states.

“The governments of Venezuela, Ecuador, Bolivia, and Argentina have purchased PRC [People’s Republic of China] defense equipment, cooperated in military exercises, and engaged in educational exchanges and training for military personnel.”

Read more here...

Tyler Durden Thu, 05/23/2024 - 22:20

What Americans Are Most Worried About

Statista’s Consumer Insights survey has been tracking which issues adults in the United States consider to be the most important in the country right now, and how they have shifted over time.

The following chart, via Statista's Anna Fleck, provides just a snapshot of these, listing the eight most cited concerns out of a possible 20 options, in the most recent survey wave as well as in the survey wave at the start of the pandemic.

You will find more infographics at Statista

Where health and social security came first in the earlier iteration, likely in reference to Covid, it had dropped by 6 percentage points by 2023/24. In the meantime, inflation and the cost of living has risen from third position to first position (+13 p.p).

Other notable changes include a drop in the share of people citing immigration in the latest wave and an increase in the share of people picking crime. Six of the eight most recent most pressing issues are social, with the sole environmental topic of climate change having narrowly dropped off the list, coming in 10th position with 30 percent of respondents picking it, following unemployment with 31 percent.

As this chart shows, poverty and housing are now on the minds of more U.S. adults, at least more imminently, than before. Where poverty had previously tied in 9th position with education in 2019/20 with a 32 percent share of respondents picking it as one the most important issues facing the country right now, the share rose to 37 percent in the latest survey wave. Similarly, where housing had been in rank 11 with 22 percent, it has now risen to position 6, with 36 percent of respondents selecting the option.

Tyler Durden Thu, 05/23/2024 - 22:00

Judge Blocks Florida Law Criminalizing Transport Of Illegal Immigrants Into State

Authored by Bill Pan via The Epoch Times (emphasis ours),

A federal judge has temporarily blocked part of a Florida law that criminalizes transporting illegal immigrants into the state.

Illegal aliens from Cuba line up to board a bus to be driven to a U.S. Customs and Border Protection station as they are processed in Marathon, Fla., on Jan. 5, 2023. (Joe Raedle/Getty Images)

The challenged law was signed by Florida Gov. Ron DeSantis a year ago, when southern border states were bracing for a flood of illegal immigrants following the scheduled expiration of Title 42, a public health order that allowed border enforcement agents to quickly expel those deemed at risk of bringing in COVID-19.

Touted by Mr. DeSantis and his supporters as the “strongest anti-illegal immigration legislation in the country,” the law contains a provision that makes it a third-degree felony for anyone to “knowingly and willfully” transport into Florida someone whom “the person knows or reasonably knew ... has not been inspected by the Federal Government since his or her unlawful entry.”

In a preliminary injunction issued on May 22, [Venezuelan born] Judge Roy Altman of the Southern District of Florida said the provision in question “extends beyond the state’s authority to make arrests for violations of federal immigration law, and in doing so, intrudes into territory that’s preempted.”

“In this case, any harm the state may suffer from an injunction is overweighed by the harm [the provision] poses both to the Plaintiffs and to the United States, which has the ultimate interest in protecting federal supremacy in the realm of immigration,” the Trump-appointed judge wrote.

The lawsuit was filed in July by The Farmworker Association of Florida, which describes itself as a “grassroots and community-based farmworker membership organization” serving seasonal workers as well as migrant workers who travel with the seasons to harvest crops.

According to its complaint, the association members have to travel back and forth between Florida, Georgia, and Alabama, crossing back into Florida multiple times per year. With the transportation law in place, some of its members became “too afraid to travel in and out of Florida with their undocumented friends or family members,” over the fear of being arrested or prosecuted, according to the association.

Florida Attorney General Ashley Moody, a defendant in the suit, has argued that the association has no legal standing to sue in the first place. She also clarified that visa holders, DACA recipients—those who were illegally brought to the United States as young children—asylum seekers, and people with pending removal proceedings are not subject to punishment under the transportation law, since they are considered “inspected” by the federal government.

Judge Altman disagreed with her argument. In the May 22 opinion, he said the way the law is worded gives the association’s members a good reason to fear a potential arrest and that they have “suffered an injury in fact,” even though they haven’t put themselves at risk of an actual arrest.

The judge also found that the Association has standing to sue.

“An organizational plaintiff suffers cognizable injury when it is forced to divert resources from its regular activities to educate and assist affected individuals in complying with the challenged statute,” he wrote.

The association was backed by a score of high-profile progressive advocacy groups: the national and Florida chapter of the American Civil Liberties Union (ACLU), Americans for Immigrant Justice, the American Immigration Council, and the Southern Poverty Law Center. They celebrated the court order as a “much-needed win for Floridians.”

“The court was right to block this callous and patently unconstitutional law, which had threatened Floridians with jail time for doing the most ordinary things, like going to work, visiting family, and driving kids to soccer games. This ruling is an important victory for Florida communities,” Spencer Amdur, senior staff attorney with the ACLU’s Immigrants’ Rights Project, said in a statement.

The Florida attorney general’s office did not respond by press time to a request by The Epoch Times for comment.

The ruling is the latest in the legal blowback against states that seek to handle illegal immigration on their own in the wake of the growing crisis at the nation’s southern border. The Biden administration has sued three states—Texas, Iowa, and most recently Oklahoma—for making illegal immigration a state crime enforceable by state and local law enforcement.

Tyler Durden Thu, 05/23/2024 - 21:40