Sabrina Serves Up a Cup of Holiday Fear: New at Reason

'Chilling Adventures of Sabrina: A Midwinter's Tale'You doubt there’s a war on Christmas? Then why has it been so long since we’ve had a decent slice-and-dice Santa movie? Television critic Glenn Garvin is not saying that Netflix’s Chilling Adventures of Sabrina: A Midwinter’s Tale is going to make anybody forget about Silent Night, Deadly Night or Black Christmas. But it does have a cannibal witch who likes to wash down her baby-meat sandwiches with gin. So don’t be a Grinch about it.

A Midwinter’s Tale is actually a (more or less) stand-alone Christmas episode of Chilling Adventures, the latest chapter of the pleasantly demented Archie comic-books auteur Roberto Aguirre-Sacasa to elevate his teen-town characters from zaniness to sociopathy to hellfire depravity. Garvin has more.

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L.A. City Councilman Wants to Force Movie Theaters to Sell Tofu Dogs

Tofu dogLos Angeles City Councilman Paul Koretz’s wife and daughter are vegans, so now he’s proposing an ordinance to require concessions at major venues to sell vegan food.

He’s not just talking about city-owned venues such as airport terminals, but also privately owned and operated movie theaters and stadiums. And he’s not just talking about just anything vegan; he wants to force these venues to offer vegan protein options.

If you need an example of how little the average government official grasps how private commerce works, check out his explanation to Variety of how he thinks this will play out if implemented: “There’s really no downside to it. The change could easily be made in any venue. A movie theater serves hot dogs. They can serve vegan dogs. It’s easy.”

It’s easy! Apparently vegan hot dogs are free and do not impose any costs whatsoever on these venues!

So what happens when a movie theater buys vegan dogs as ordered, but people don’t want to buy them or eat them because they’re gross? Seriously, I know vegans who won’t touch them. I have actually enjoyed several meatless meals, but these were at restaurants that specialize in making it all taste good, not concession stands. If there’s no downside to it, as Koretz insists, then why aren’t they already doing it?

Nobody, nobody, is going to convert to veganism on the basis of what’s in some warmer at a movie theater, so nothing in this plan is going to change anyone’s larger eating habits. The people who want to buy hot dogs are going to buy hot dogs. Vegans didn’t just look at the lack of options and then shrug and buy meat, did they? They can make it through a movie or a basketball game without backsliding into beef, right?

And what happens to the uneaten tofu dogs? Koretz argues that vegan food is better for the environment than eating meat and helps fight climate change. But is that if nobody buys the concession stands’ vegan options, they’re going to get thrown away, creating food waste. Food waste is bad for the environment! Food that ends up in landfills produces methane as it decomposes, contributing to greenhouse gas problems.

In short, this plan is not going to result in less meat consumption, and it may actually contribute slightly to global warming.

We have actual existing evidence that such food mandates contribute to problems while solving little. In Minneapolis, a city ordinance ordered all stores to carry fresh produce and other foods deemed healthier, even if nobody wanted to buy them. Stores had to devote money and shelf space to the required goods, and then throw them away when they rotted. People didn’t want them.

If enough people actually want vegan options at these venues, they’ll certainly let the vendors know. Vegans aren’t known for being shy about their eating habits. Dodger Stadium already offers vegan hot dogs, and STAPLES Center has vegan food choices. It’s simple supply and demand, the marketplace in action. If people want vegan food at the movie theater, and the theater realizes it can make money serving them, it’ll provide those choices. If it won’t make money serving them, all Koretz is doing is forcing additional costs on these businesses (many of which operate on pretty thin margins) and contributing to the food waste problem. It’s a terrible idea, and the city should reject his plans.

Bonus link: Over at the Los Angeles Times, occasional Reason contributor Gustavo Arellano blasts Koretz’s poor grasp of the economics of food production and the operating margins of concession stands.

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“Wokesterism” – Will The Donald ‘Devil-Hunters’ Be In The Dock In 2019?

Authored by James Howard Kunstler via Kunstler.com,

Sleepwalkers Awoke!

Andrew Sullivan called it “the Great Awokening” in a shrewd New York Magazine column this week. He refers, off course, to earlier episodes of American religious hysteria, namely the Great Awakening of the 1730s that featured the Rev. Jonathan Edwards raining sulfur and brimstone down on guilt-wracked New Englanders, and then the Second Awakening of the the early 1800s that spun off innumerable Protestant sects, cults, and utopian experiments. I like the term “Wokesterism” because the “ism” part acknowledges that the current hysteria makes a religion out of politics.

Sullivan’s theory is that Wokesterism is an improvised replacement for sclerotic American Christianity, to fill the vacuum of entropic meaninglessness that pervades life in the republic these days. He says:

And so we’re mistaken if we believe that the collapse of Christianity in America has led to a decline in religion. It has merely led to religious impulses being expressed by political cults. Like almost all new cultish impulses, they see no boundary between politics and their religion.

Wokesterism eerily mirrors many of the harsher practices of the most severe American Protestantism. It offers its own original sin, “white privilege,” from which there is neither redemption nor hope of redemption – like the old Presbyterian hell for babies who have come into this world drenched in sin. No amount of abject apology will avail for heretics to Wokesterism.

The principal aims of Wokesterism are coercion of others, persecution, and punishment of the guilty (the un-Woke). Most importantly, it requires the suspension of individual conscience in order to promote unthinking, robotic obedience and mob justice. That helps explain the disgraceful blindness of the Wokester Left, especially the educated elites who work in the news media, the computer tech sector, and other “creative class” vocations.

One thing that Sullivan leaves out is the necessity for the Devil. That role is filled by Mr. Trump. His sinister cargo of belief, countering the Wokefullness of unicorns and rainbows, is the dark theology of MAGA, and Mr. Trump’s followers are the imps, demons, incubi and succubi of deplorable fly-over land. Wokesters will spare no effort to vanquish all this wickedness, and even lying and cheating in the service of that end is considered fair play. Hence the arrant and epic dishonesty of The New York Times.

Interesting case in point: Yesterday’s developments in the General Flynn court case are not even present in this morning’s Times. I speak of the action on the bench of Federal Judge Emmet Sullivan. It’s been brought to his attention that the scurrilous entrapment of Gen. Flynn by Woke FBI managers entailed departures from normal, lawful procedure. Gen. Flynn was interrogated in January of 2017, and the FBI account of the interview was not written (supposedly) until August off that year. The reason that reports and memoranda must be written ASAP after an interview is for the obvious reason that much important fact may be forgotten or misremembered if not documented right away.

There is actually reason to believe that earlier versions of the report exist (or did exist), and they were trashed or buried when the main interrogator-of-Flynn, Peter Strzok, was cashiered from Robert Mueller’s team in July 2017. Judge Sullivan has demanded that the FBI produce those earlier docs by today (Friday) at 3:00 pm. It will be interesting to see if the FBI complies… or not. There is also a fair chance that Judge Sullivan will throw out Gen. Flynn’s conviction based on prosecutorial misconduct.

In the event, we could see the awesome downfall of the Archangel Mueller, and the unravelling of Wokester dreams of defeating the Devil via the Mueller inquisition. It will certainly be an embarrassment to the ardent Wokesters of the news media, who have shilled for this campaign for over two years. The General Flynn business is not the only thread unwinding in the giant tapestry of Wokester narrative. As in other epic persecutions, like the Jacobin Reign of Terror in 1790s France, and Mao Zedong’s Cultural Revolution of the 1960s, the tables are turning. The inquisitors, prosecutors, and executioners are going too face charges themselves, and harsh punishment is not out of the question.

The defeat of Wokesterism would be a very salutary outcome for a nation that has so badly lost its bearings to the worst of human instincts: religious persecution. It could be a fatal blow to the Democratic Party, which will have to find an alternative reason for its existence than Devil-and-Demon hunting. The Devil hunters themselves could be in the dock in 2019, answering for their actual crimes against American citizens and the public interest. Even the sainted Holy Mother of Wokesterism, the Archangel Hillary, may find herself wingless in a witness chair, answering how all that schwag from Russian banksters happened to end up in her foundation’s cookie jar.

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Despite Abysmal Performance, Hedge Fund Traders Expect 16% Pay Raise

While the S&P is flirting with unchanged territory on the year, for hedge funds 2018 was a year they would all rather forget ever happened: not only is the HFRX hedge fund index down 6.3% YTD, its worst annual performance since Q3, 2011, but as of today it is at the year lows, confirming that hedge funds “hedge” only in name.

Furthermore, as we discussed yesterday, the investing public appears to have lost its fascination with the 2 and 20 business model, and as Hedge Fund Research calculated, in 2018 there were the fewest hedge-fund launches since 2000…

… while poor performance and growing redemptions have forced dozens of marquee names to either shutter or convert to family offices, with the list below summarizing some of the most popular managers who have thrown in the towel in 2018 or decided to return outside money and only manage cash for “friends and family” (and their own, of course).

And yet, paradoxically, despite a truly abysmal track record, where the average hedge fund is not only down for the year but badly underperforming its benchmark for the 8th year in a row, hedge fund employees of all stripes, from junior analysts to portfolio managers, have something in common this year: unmitigated optimism in the form, or as Bloomberg puts it, “they’re all expecting fatter paychecks.”

Despite an industry beset with lagging performance, an investor exodus and closures, hedge fund professionals expect a median compensation of $520,000 in 2018, a 16% increase from last year’s $450,000, Bloomberg reports citing a survey by executive search firm Odyssey Search Partners, which polled 500 respondents from September through November.

Here’s the breakdown: the top tier – i.e., partners, portfolio managers and other senior staff – predict a more modest increase in comparison to their junior counterparts. They see a median compensation of $950,000, up nearly 10% even though most of them have failed to deliver on their only job requirement: outperform the market. And naturally, since this group’s compensation is the most tied to performance, that makes this optimism especially perplexing.

As for junior analysts, many of whom have been made obsolete in a market in which fundamental analysis is irrelevant, and where algos, robots, HFTs and various other machines call the shots, they expect average comp to rise 18% from $275,000 to $325,000.

Don’t tell them but they will all be disappointed.

Another ironic finding: most hedge fund employees said in the survey that they are still bullish overall on their industry, which is also ironic in light of the now daily news of one or more hedge funds shuttering for good. Which may be why their confidence is muted: this time last year they expected a 39% bonus increase versus 21% this year, according to the survey. They’ll be lucky to get 0%.

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Bank Bulls Battered As Financials Enter Bear Market

S&P Financials are now down 20.3% from their highs – officially entering a bear market as they fall to the lowest since September 2017…

The S&P Bank index is extending losses, now down 24% from its 2018 highs and at its lowest since September 2017.

As suddenly a collapsing yield curve matters…

And the world’s most systemically important banks have erased all post-Trump gains…

 

And if you are banking (forgive the pun) on those “fortress balance sheet” US banks, as BMO’s Brad Wishak notes, price and time are playing a familiar hand in US bank stocks…

 

 

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Crypto Bull Tom Lee: Bitcoin’s ‘Fair Value’ Closer To $15,000, But He’s Sick Of People Asking About It

Listening to the crypto bulls of yesteryear continue to defend their case for new new all-time highs, despite a growing mountain of evidence to suggest that last year’s rally was spurred by the blind greed of gullible marginal buyers (not to mention outright manipulation), one can’t help but feel a twinge of pity for Mike Novogratz and Wall Street’s original crypto uber-bull, Fundstrat’s Tom Lee.

Lee achieved rock star status thanks to his prescient calls for a stunning rally in bitcoin months before crypto went parabolic. But as prices plunged this year, he has carried on with his appearances on CNBC and in the financial press, making the structural bull case for bitcoin to anybody who is still willing to listen. We imagine most of Lee’s audience is in the same boat as he is: Refusing to let go in the face of heavy losses, according to Bloomberg.

Lee

Apparently ignoring the fact that bitcoin has crashed through every support level so far with little regard for financial models projecting fair value at $6,000 (or $5,000 or $4,000), Lee has published another categorically bullish research note explaining why his model suggests that bitcoin’s true “fair value” is somewhere between $13,800 and $14,800.

BTC

Bitcoin’s present value “doesn’t make sense”, Lee argues, because, working backwards, one would expect the number of “active” crypto wallets to fall to 17 million from 50 million. Ergo, since the number of crypto wallets hasn’t declined, the “fair value” level of crypto must be much higher than it is currently (though how Lee justifies the wallet metric as anything other than an arbitrary benchmark remains a mystery).

“Fair value is significantly higher than the current price of Bitcoin,” he wrote.

“In fact, working backwards, to solve for the current price of Bitcoin, this implies crypto wallets should fall to 17 million from 50 million currently.”

This latest call comes after Lee lowered his year-end projection for bitcoin from $25,000 to $15,000.

According to Lee’s calculations, bitcoin wallets climb to around 7% of the total number of VISA account holders (some 4.5 billion) BTC could be worth $150,000.

“Hence, the risk/reward is still strong,” Lee said.

“Given the steep discounts of [bitcoin] to our fair value models, the excessive bearish sentiment about fundamentals does not seem warranted.”

But we don’t have to tell you that bitcoin at $150,000 – with the fundamentals being what they are – seems ridiculous on its face. Which makes us wonder: What is it about the number of active wallets that justifies using it as a basis for this valuation model?

However, in an interview with CNBC this week, the best-known bitcoin bull exhibited some frustration in his forecasts for crypto prices:

“Given we are so close to year-end, we are not providing any updates to near-term price objectives – read this as, we are tired of people asking us about target prices,”

Finally, we note that this year’s utter collapse is not that unusual; throughout its ten-year history, bitcoin has bounced from boom to bust to boom to bust. If this latest boom and bust has taught us anything, it’s that conventional financial modeling doesn’t work for crypto.

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First Amendment Lawsuit Challenges U.T.-Austin’s Prohibition of Speech That Is ‘Offensive,’ ‘Biased,’ ‘Uncivil,’ or ‘Rude’

“Student A,” a freshman at the University of Texas at Austin, is a self-described “Tea Party conservative” who “strongly supports Israel, believes in a race-blind society, supports President Trump, is pro-life, and supports the border wall.”

“Student B,” a U.T.-Austin sophomore who “considers himself a libertarian,” “strongly supports the Second Amendment right to keep and bear arms, believes in a race-blind society, and has serious concerns that the ‘Me Too’ movement will erode due process.”

“Student C,” a U.T.-Austin freshman who “believes that the breakdown of the nuclear family has had many negative effects on society,” is “strongly prolife,” “strongly supports the Second Amendment,” and “believes that Justice Kavanaugh was treated unfairly during his confirmation proceedings.”

According to a First Amendment lawsuit filed by the group Speech First yesterday, all three students are afraid to speak their minds, not because their views are likely to be unpopular on campus, but because they worry that they will be investigated and punished by the university for violating its broad, vague rules prohibiting speech that strikes other students as “offensive,” “biased,” “uncivil,” or “rude.” That fear seems entirely credible when you consider U.T.-Austin’s policies regarding “harassment” and “campus climate incidents,” which read as if they were written by officials unfamilar with what federal courts have been saying about freedom of speech at state-sponsored universities for half a century.

U.T.-Austin’s Institutional Rules on Student Services and Activities prohibits “verbal harassment,” defined as “hostile or offensive speech” that a) “is not necessary to the expression” of a “political, religious, philosophical, ideological, or academic idea,” b) “is sufficiently severe, pervasive, or persistent to create an objectively hostile environment that interferes with or diminishes the victim’s ability to participate in or benefit from the services, activities, or privileges provided by the University,” and c) “personally describes or is personally directed to one or more specific individuals.” The rule says verbal harassment “may consist of threats, insults, epithets, ridicule, personal attacks, or…harassing sexual speech” and “is often based on the victim’s appearance, personal characteristics, or group membership, including but not limited to race, color, religion, national origin, gender, age, disability, citizenship, veteran status, sexual orientation, gender identity or gender expression, ideology, political views, or political affiliation.”

Some of the conduct covered by that rule could qualify as sexual harassment under federal education law or as criminal harassment under Texas law. But on its face, the ban also covers a lot of constitutionally protected speech. Note that the university decides what sort of speech is “necessary” to express a “political, religious, philosophical, ideological, or academic idea,” and students have no way of anticipating what will qualify. The “hostile or offensive speech” need not be “severe, pervasive, and persistent,” as under federal law; rather, any one of those will do. The requirement that the speech be “personally directed to one or more specific individuals” would cover all sorts of online and in-person conversations. Finally, the examples of bias includes not just the usual categories, any one of which could be the basis for dubious charges, but also “ideology, political views, or political affiliation,” which means almost any heated political discussion could be considered verbal harassment.

If Student A got into an argument about the border wall with a Latino student, he could perceive her rhetoric as “hostile or offensive,” maybe even “severely so,” and surmise that it was based on his “national origin.” If Student B condemned the Democratic Party’s disrespect for the Second Amendment in a coversation with Democrats, that could easily be construed as “hostile or offensive speech” directed at people based on their “ideology, political views, or political affiliation.” If Student C, God help him, made a passionate plea for protecting the lives of unborn children to a group of female students who support abortion rights, that too could qualify as verbal harassment, directed at them by virtue of their sex and their political views.

There are similar problems with the prohibition of “harassment” in U.T.-Austin’s Residence Hall Manual, which applies to all students who live in university housing and want to continue doing so. “Members of an educational community should adhere to standards of civility and good taste that reflect mutual respect,” the manual says. “A respectful environment is free of harassment, violence and verbal abuse….In an effort to foster an environment free from harassment and intimidation, Residence Life is committed to responding appropriately to acts of racism, sexism, heterosexism, ageism, ableism and any other force that seeks to suppress another individual or group of individuals.”

U.T.-Austin also imposes “standards of civility” on communications through the university’s email system or the internet access the school provides. The Office of the Chief Information Officer’s Acceptable Use Policy demands that students “be civil” and “not send rude or harassing correspondence.” Penalties for violating the Acceptable Use Policy include “verbal warning, revocation of access privileges, disciplinary probation, suspension from the university, [and] criminal prosecution.”

Any hope that wise university officials will apply these sweeping rules judiciously seems misplaced in light of U.T.-Austin’s Campus Climate Response Team (CCRT), which encourages students to file a report whenever they hear or read anything that offends them. “Campus climate incidents” can include “verbal harassment” on or off campus, remarks that “create a hostile or offensive classroom environment,” statements by faculty members “perceived as derogatory and insensitive,” “derogatory comments” on Facebook, “insulting and insensitive posts on social media or group chat apps,” “insulting or insensitive online posts pertaining to race, gender identity, or sexual orientation,” “a party with a racist theme,” or “student organizations participating in traditions perceived as insensitive or based on stereotypes.” Students can file reports anonymously, and they need not be witnesses to the incidents they describe.

Students who say or write things that offend others therefore may find themselves interrogated by CCRT investigators based on thirdhand reports from unidentified complainants. The CCRT does not have much power on its own. But if it investigates an incident and decides there may have been a violation of U.T.-Austin policies or criminal law, it refers the matter to university officials or police for further action. The CCRT received more than 1,000 reports during the last four academic years.

In this environment, it would not be surprising if students with unpopular views thought twice before stating them or worried about expressing them too forcefully or provocatively. The Speech First lawsuit notes several incidents that reinforced the impression that “certain viewpoints are not welcome on campus,” including the university’s condemnation of an “affirmative action bake sale” that prompted about 200 CCRT reports, the refusal of funding for a debate on inequality sponsored by the U.T. Objectivist Society, and the cancellation of a conservative group’s “Catch an Illegal Immigrant” event after an administrator warned that it violated U.T.-Austin’s “honor code.”

The lawsuit argues that the university’s policies are unconstitutionally vague and overbroad, chilling constitutionally protected speech. Speech First is asking the U.S. District Court for the Western District of Texas to issue injunctions barring U.T.-Austin from enforcing its speech restrictions or using the CCRT to investigate complaints about “campus climate incidents.”

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A Crackdown on Cash and Bitcoin? New at Reason

“Governments of the advanced industrial economies should phase out the use of paper money in the form of large-denomination notes and sharply restrict the use of cryptocurrencies.”

That was the resolution at a public debate hosted by the Soho Forum on December 3, 2018. Arguing the affirmative was the Harvard economist Kenneth Rogoff, a former chief economist at the International Monetary Fund. Lawrence H. White, a professor of economics at George Mason University and a senior fellow at the Cato Institute, argued against the resoluiion. Soho Forum Director Gene Epstein moderated the debate.

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“Cheap” Is The Most Requested Apartment Search Word In 2018

Authored by Mike Shedlock via MishTalk,

Over 25% of those searching for an apartment in 2018 were looking for something “cheap”. A close second was “studio“.

The Rent Cafe 2018 Year End Rent Report shows rents hold strong at year end.

What most caught my eye, however, was an interactive graphic that lets you hover over a phrase to see how often perspective renters included that word or phrase in a search.

Search Results

  • Cheap apartments: 25.14%

  • Studios: 23.88%

  • One-, two- and three-bedroom apartments follow in that order, with 10.48%, 9.46% and 7.5% of all rental-related searches, respectively.

  • Luxury apartments also saw significant interest among renters this year, accounting for 7% of searches.

  • Those wanting a pool or gym turned up in 0.33% and 0.06% respectively

Cheap Is On My Mind

Studio is another sign that cheap is on renter’s minds.

Admittedly there is some overlap between cheap and studios while there isn’t between One-, two- and three-bedroom apartments. However, there is likely some overlap between studio and one-bedroom.

GPS Searches

The infographic only listed amenities but here’s another interesting factoid: Online activity has migrated to GPS-enabled mobile devices. One third of the keywords people searched for in 2018 included the words ‘near me.’

Cheap – Near Me

This is what people want: Cheap, near them.

Everything else other than number of bedrooms doesn’t factor in until final comparisons.

National Average Rent

Other Take-Aways

  • The national average apartment rent ends the year with a strong 3.1% y-o-y increase, having reached $1,419, $42 above what renters were paying this time last year, according to Yardi Matrix.

  • As of the end of the year and throughout 2018, rents have seen the most fluctuation in small cities, with double-digit percentage increases in Odessa, TX, Midland, TX, and Reno, NV.

  • Queens, NY has been the only large market with stagnating rents, and only two small cities, Baton Rouge, LA and College Station, TX have seen significant decreases.

Cheap is In

In case you haven’t figured it out, cheap is in.

Don’t count on those looking for “cheap” to be looking to buy homes until this economic bubble collapses.

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“Top Secret” Intel Report Claims Russia, China Continue To Help North Korea Evade Sanctions

With US markets going into full-fledged convulsions thanks to disheartening economic data out of China, a looming government shutdown, renewed fears about a “no deal” Brexit and Dow component JNJ’s worst day in 16 years, strategists can add one more disconcerting development to their list of woes. Citing a “top secret” intelligence report, NBC News said Friday that the US suspects that North Korea is still evading US sanctions by secretly transferring oil at sea.

While this isn’t exactly news – the US back in September reportedly formed an international posse to crack down on these illegal oil sales – it certainly doesn’t bode well for the stalled planning for a second summit between President Trump and North Korean leader Kim Jong Un. It also raises questions about North Korea’s intentions as doubts persist about Pyongyang’s commitment to denuclearization. Negotiations hit an impasse over the summer as Pyongyang insisted that the US commit to a gradual schedule of removal for its economic sanctions, while Washington has insisted that the North must completely denuclearize first – something few intelligence analysts expect it to do.

North

Specifically, the intel report examined how the North has changed up its tactics and moved these transfers out of the East China Sea and into “more logistically challenging waters to the North and South” as the US-led posse – Australia, Britain, Canada, France, Japan, South Korea and New Zealand are also participating – has made the transfers more difficult by its presence alone (they typically don’t try to board or detain ships caught in the act, instead allowing them to flee). The Koreans are also using smaller ships to evade detection. The US has been monitoring the smuggling activity since October 2017, when it began surveillance flights after both the UN and the US ramped up sanctions that summer following the most intense phase of the North Korean nuclear- and missile-testing crisis.

The North Koreans are also resorting to smaller vessels to avoid recognition by the coalition’s warships and surveillance aircraft, the officials said. The assessment found that while attempts to transfer oil have not decreased, the coalition presence has forced North Korea out of the East China Sea and into more logistically challenging areas to the north and south. That shift could ultimately affect the pace and number of the ship-to-ship transfers, raising the cost of smuggling for North Korea, according to the three U.S. officials.

A U.S. defense official said the U.S. began surveillance flights over the East China Sea to disrupt these illicit transfers on Oct. 19, 2017. Since then, the U.S. has conducted more than 300 surveillance flights. Allied nations began flights on April 30 of this year, and have flown more than 200 surveillance flights to date.

Since October 2017, there have been 30 instances when smugglers halted ship-to-ship transfers when observed by coalition naval forces at sea, according to a U.S. defense official.

The U.S. Pacific Command assessment, labeled “Top Secret,” found that the presence of warships and surveillance aircraft deployed by an eight-nation coalition since September has forced North Korea to adjust its tactics at sea, including transferring oil further away from the Korean Peninsula and often in other countries’ territorial waters.

What’s almost worse than the smuggling itself is the fact that the North Korean ships participating in the transfers apparently have never heard of the phrase “act natural”, as ships have repeatedly been observed to drop whatever they were doing and flee after spotting Western monitors. 

“What’s equally as powerful as boarding a ship is taking a picture of the hull, getting information about the ship involved in the illegal activity, and that allows you to get to the insurers, the networks, the people financing the operation, and so we’ve been successful with a camera as much as we would be if we were to proceed to boardings.”

Before the posse was formed in September, incidences of North Korean smuggling (often abetted by China and Russia) had been on the rise.

A leaked report by U.N. sanctions experts in August, based on U.S. intelligence, found the number of transfers surging, with vessels turning off the transponders that show a ship’s geographic location. Between January and May, North Korean ships made 89 deliveries of refined petroleum to the country’s ports, U.N. Ambassador Nikki Haley said in July.

Which brings us the bigger issue here: Despite opting to support tighter UN sanctions against North Korea last year, China and Russia have continued to supply North Korea with badly needed oil. Some of the ships that have been tracked by US monitors have helped move North Korean coal to Russian ports. Though the intelligence analysts say their surveillance regime has helped them crack down on the support networks for these ships – like insurers and Western companies that need to abide by the sanctions.

When confronted about their complicity in the sanctions violations, Russia and China have insisted that they abide by the UN rules. Yet analysts say evidence of their deception is easy to see. Monitors of energy prices in North Korea show that the increased sanctions have had virtually no impact. Meaning that the sanctions impressed upon North Korea by President Trump have had virtually no effect.

Analysts and firms that track North Korean shipping data say there are numerous signs that the regime continues to use deception to move coal out of North Korean ports for sale and to obtain oil through ship-to-ship transfers at sea.

“I think they’re certainly trying to keep apace with the sanctions regime,” said Lucas Kuo, an analyst at C4ADS, a non-profit research organization that uses data to track illicit networks.

Two ships identified in a report by a U.N. panel earlier this year for smuggling coal to Russian ports, the Sky Angel and the Sky Lady, continue to operate and recently made port visits to Japan — even obtaining insurance paperwork, according to maritime and shipping sites.

The Sky Angel pulled into the Japanese port of Muroran in July, and Sky Lady made a port of call at Tomakomai on Tuesday.

“The fact that they’re still able to acquire this insurance at least raises some questions,” Kuo said.

And if Korean energy products have managed to slip through the sanctions so easily, what does that say about other Korean exports, like seafood?

The upshot here is that while we’re sure Trump will largely disregard these findings as he seeks a major diplomatic “win” by becoming the president who opens up North Korea, we’ll likely be hearing more soon about how these violations are Russia’s and China’s fault.

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