China Outpacing US Military At ‘Disturbing’ Rate: Gen. Milley

China Outpacing US Military At ‘Disturbing’ Rate: Gen. Milley

Authored by Samantha Flom via The Epoch Times (emphasis ours),

China is on a trajectory to achieve military superiority over the United States by midcentury, Joint Chiefs of Staff Chairman Gen. Mark Milley warned members of Congress on March 29.

Chairman of the Joint Chiefs of Staff Gen. Mark Milley testifies before the Senate Appropriations Committee Subcommittee on Defense on Capitol Hill in Washington on May 3, 2022. (Amanda Andrade-Rhoades/Pool/AFP via Getty Images)

Testifying at a House Armed Services Committee hearing on the Department of Defense’s 2024 budget requests, Milley noted that China has a national goal to be a “global coequal” with the United States and “militarily superior” by 2049.

“They’re on that path to do that, and that’s really disturbing,” he said. “That’s really bothersome. And we’re going to have to not only keep pace, but we have to outpace that, and that will assure the peace.”

Of particular concern is China’s nuclear development program, Milley said, holding that there is little the United States could do to “stop, slow down, disrupt, interdict, or destroy” it.

Milley’s unease echoed that of U.S. Air Force Secretary Frank Kendall, who told Congress on Tuesday that China’s expansion of its nuclear force was the most “disturbing” military threat he’d seen in his half-century career.

For months, the Pentagon has been sounding the alarm over China’s nuclear moves, warning in December that the country was on pace to quadruple its number of nuclear warheads to 1,500 by 2035.

Currently, the Defense Department estimates China’s nuclear warhead count to be more than 400. And while that number may seem small compared with the United States’ stockpile of around 3,750, Milley stressed on Wednesday that the communist country’s capabilities should not be underestimated.

They have a significant nuclear capability today and they have intercontinental ballistic missiles that can range the United States,” he said. “That is obviously bothersome.”

The general also noted that the situation is further complicated by the strengthening relationship between China and Russia, which he described as “troublesome.”

We are facing two nuclear-armed great powers,” he emphasized. “So, the principles of the Cold War of deterrence still obtain, but now it’s more complicated because it’s two versus one.”

And with the added threat of Iran joining the mix, Milley predicted, “Those three countries together are going to be problematic for many years to come.”

A New Cold War?

Milley’s remarks came on the heels of the release of a new Heritage Foundation report (pdf), which holds that the United States has entered into a new Cold War with China and outlines a defensive plan to counter the threat.

Read more here…

Tyler Durden
Fri, 03/31/2023 – 17:00

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Douglass Mackey Convicted for Vote-by-Tweet Meme

Here’s the E.D.N.Y. U.S. Attorney’s Office press release:

Douglass Mackey, also known as “Ricky Vaughn,” was convicted today by a federal jury in Brooklyn of the charge of Conspiracy Against Rights stemming from his scheme to deprive individuals of their constitutional right to vote. The verdict followed a one-week trial before United States District Judge Ann M. Donnelly. When sentenced, Mackey faces a maximum of 10 years in prison….

In 2016, Mackey established an audience on Twitter with approximately 58,000 followers. A February 2016 analysis by the MIT Media Lab ranked Mackey as the 107th most important influencer of the then-upcoming Presidential Election.

As proven at trial, between September 2016 and November 2016, Mackey conspired with other influential Twitter users and with members of private online groups to use social media platforms, including Twitter, to disseminate fraudulent messages that encouraged supporters of presidential candidate Hillary Clinton to “vote” via text message or social media which, in reality, was legally invalid. For example, on November 1, 2016, in or around the same time that Mackey was sending tweets suggesting the importance of limiting “black turnout,” the defendant tweeted an image depicting an African American woman standing in front of an “African Americans for Hillary” sign.

The ad stated: “Avoid the Line. Vote from Home,” “Text ‘Hillary’ to 59925,” and “Vote for Hillary and be a part of history.” The fine print at the bottom of the deceptive image stated: “Must be 18 or older to vote. One vote per person. Must be a legal citizen of the United States. Voting by text not available in Guam, Puerto Rico, Alaska or Hawaii. Paid for by Hillary For President 2016.” The tweet included the typed hashtag “#ImWithHer,” a slogan frequently used by Hillary Clinton. On or about and before Election Day 2016, at least 4,900 unique telephone numbers texted “Hillary” or some derivative to the 59925 text number, which had been used in multiple deceptive campaign images tweeted by Mackey and his co-conspirators.

Several hours after tweeting the first image, Mackey tweeted an image depicting a woman seated at a conference room typing a message on her cell phone.  This deceptive image was written in Spanish and mimicked a font used by the Clinton campaign in authentic ads. The image also included a copy of the Clinton campaign’s logo and the “ImWithHer” hashtag.

For my reservations about the case, see here; for the judge’s opinion rejecting Mackey’s First Amendment defense, see here. Congratulations to prosecutors Erik D. Paulsen, F. Turner Buford, and William J. Gullotta, who won the conviction. Thanks to my colleague Prof. Rick Hasen (Election Law Blog) for the pointer.

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Today’s Order Allowing Dominion Voting’s Case Against Fox to Go Forward

The order, which denied Fox’s motion for summary judgment and partly granted Dominion’s motion for summary judgment as to certain elements of the claim, is here; it’s 130 pages long, and I’m likely not to have the time soon to get through the whole thing and digest it, but I thought I’d pass it along. An excerpt, though, as to the falsehood of the underlying statements (emphasis in original):

While the Court must view the record in the light most favorable to Fox, the record does not show a genuine issue of material fact as to falsity. Through its extensive proof, Dominion has met its burden of showing there is no genuine issue of material fact as to falsity. Fox therefore had the burden to show an issue of material fact existed in tum. Fox failed to meet its burden. The evidence developed in this civil proceeding demonstrates that is CRYSTAL clear that none of the Statements relating to Dominion about the 2020 election are true. Therefore, the Court will grant su1nmary judgment in favor of Dominion on the element of falsity.

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Hillsdale College Revokes Curriculum License to “Classical” School Over Its Objections to Michelangelo’s David

Tallahassee Democrat (Ana Goñi-Lessan) reported yesterday, linking to a Hillsdale press release:

Hillsdale College is no longer affiliated with Tallahassee Classical School. Tallahassee Classical previously held a license to use Hillsdale’s curricular materials. That license has been revoked and will expire at the end of the school year.

Hillsdale College provides a classical scope and sequence to many schools across the country as a free resource. It is important to note that Hillsdale does not advise or train the teachers, board members, or school leaders of these curriculum schools.

Hillsdale’s relations with those schools are founded upon a mutual understanding about the aims of education. Education is a cooperative endeavor between students, parents, and teachers. Discretion, good judgment, and prudence are essential for that endeavor to be successful.

To set the record straight: This drama around teaching Michelangelo’s “David” sculpture, one of the most important works of art in existence, has become a distraction from, and a parody of, the actual aims of classical education. Of course, Hillsdale’s K-12 art curriculum includes Michelangelo’s “David” and other works of art that depict the human form.

For more, see this earlier blog post.

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Police Traveled 500 Miles To Seize Girl’s Pet Goat for Slaughter


A brown and white African Boer goat kid.

A federal civil lawsuit alleges that sheriff’s deputies from Shasta County, California, traveled across the state to seize a little girl’s “beloved pet goat” for slaughter. New reporting details how they may have violated the law in doing so.

According to the lawsuit, in June 2022, Jessica Long and her daughter, who was 9 years old and only referred to as E.L., attended the Shasta District Fair. The fair includes a junior livestock auction, in which members of 4-H youth programs exhibit farm animals they’ve raised. At the end, the animals are sold to the highest bidders to be slaughtered for meat. The fair takes 7 percent of the sale, and the kids get to keep the rest.

In April, Long purchased her daughter a goat, whom she named Cedar. From then until the fair, E.L. “fed and cared for Cedar every day.” She “bonded” with the animal just as she “would have bonded with a puppy” and “loved him as a family pet.”

At the fair, state Sen. Brian Dahle was Cedar’s highest bidder, pledging $902. But by then, E.L. had second thoughts about sending her new four-legged friend to die. She and her mother tried to withdraw Cedar from competition but were told that the rules forbid it. After the auction, E.L. refused to leave Cedar’s side, sobbing next to him in his pen. At this point, before money had changed hands, Long and her daughter sought to terminate the contract: California law allows that “a contract of a minor may be disaffirmed.”

Long told representatives of the fair that she would happily pay the 7 percent fee that would have resulted from the sale (in this case, $63.14) and took Cedar home. Anticipating controversy, she later took the goat to another farm in Sonora County, more than 200 miles away.

But in the following days, B.J. Macfarlane, livestock manager of the Shasta District Fair & Event Center, the state agency that runs the fair, called Long and told her that if she did not return Cedar, he would have her charged with felony grand theft. Long offered to let the fair association keep the entire $902, but Macfarlane would not budge. She also reached out to Dahle, who agreed that he “would not resist her efforts to save Cedar from slaughter.”

In an email to the Fair Association, Long wrote of her efforts to “make it right with the buyer and the fairgrounds,” mentioning Dahle’s support and offering to pay for the goat “and any other expenses I caused.” But Melanie Silva, CEO of the Fair Association, was unmoved. Silva wrote back that while she was “not unsympathetic” to E.L.’s plight, “please understand the fair industry is set up to teach our youth responsibility and for the future generations of ranchers and farmers to learn the process and effort it takes to raise quality meat. Making an exception for you will only teach [our] youth that they do not have to abide by the rules that are set up for all participants.”

She concluded that it was “out of my hands” and that Long would “need to bring the goat back to the Shasta District Fair immediately.” According to records received by The Sacramento Bee, Silva then emailed an official with the state’s Department of Food and Agriculture, saying that an organizer of a local community barbecue “has contacted her lawyers regarding the theft of the goat donated to the bbq.”

Two weeks after the fair, Shasta sheriff’s Detective Jeremy Ashbee sought and received a search warrant, directing two officers to drive more than 500 miles in order to seize Cedar and return him to Shasta County. The warrant authorized a search of a goat rescue in Napa County, but Cedar was not there. After searching the rescue, the officers drove over to Sonoma County and took Cedar from the farm, even though that property wasn’t listed on the warrant. (In a court filing, the officers contended that “no warrant was necessary to retrieve Cedar at the Sonoma Farm as they had consent from the property owner to retrieve the goat.”)

In an amended complaint filed in February, Long claims the officers were then “required by law to hold Cedar or deliver him to the Magistrate” so the court could determine Cedar’s ownership. But instead, they “independently deemed unknown third parties…to be the owners of Cedar” and delivered him back to the fairgrounds.

Perplexingly, Long is not certain what actually happened to Cedar: “At this time we don’t have that specific information and we can only speculate,” her attorney told the Bee. “While it hasn’t been confirmed as a factual matter, we believe the goat Cedar has been killed.”

Long filed a federal lawsuit in September 2022 against all three officers, alleging violations of the Fourth and 14th Amendments and seeking damages.

While Long and her daughter admittedly sought to terminate a contract, it’s hard to imagine a worse state response at any stage of the process. If both Long and Dahle agreed to terminate the contract, and Long agreed to reimburse the fair for its share of the purchase, then who was harmed?

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Communications Can Be Defamatory Even If Readers Realize There’s a Considerable Risk of Error

Various commenters have suggested that AI programs’ output can’t be defamatory because reasonable readers wouldn’t view the statements as “100% reliable” or “gospel truth” or the like. Others have taken the more modest position that reasonable readers would at least recognize that there’s a significant risk of error (especially given AI programs’ disclaimers that note such a risk). And our own Orin Kerr has suggested that “no one who tries ChatGPT could think its output is factually accurate,” so I take it he’d estimate the risk of error as very high.

But, as I’ve noted before, defamation law routinely imposes liability for communicating assertions even when there is a clear indication that the assertion may well be false.

For instance, “when a person repeats a slanderous charge, even though identifying the source or indicating it is merely a rumor, this constitutes republication and has the same effect as the original publication of the slander.” When speakers identify something as rumor, they are implicitly saying “this may be inaccurate”—but that doesn’t get them off the hook.

Indeed, according to the Restatement (Second) of Torts, “the republisher of either a libel or a slander is subject to liability even though he expressly states that he does not believe the statement that he repeats to be true.” It’s even more clear that a disclaimer that the statement merely may be inaccurate can’t prevent liability.

Likewise, say that you present both an accusation and the response to the accusation. By doing that, you’re making clear that the accusation “may [be] inaccurate.”

Yet that doesn’t stop you from being liable for repeating the accusation. (There are some narrow privileges that defamation law has developed to free people to repeat certain kinds of possibly erroneous content without risk of liability, in particular contexts where such repetition is seen as especially necessary. But those privileges are needed precisely because otherwise presenting both an accusation and a response is actionable.)

And this is especially so because of what OpenAI itself notes in its GPT-4 Technical Report:

This tendency [to, among other things, produce untruthful content] can be particularly harmful as models become increasingly convincing and believable, leading to overreliance on them by users. Counterintuitively, hallucinations can become more dangerous as models become more truthful, as users build trust in the model when it provides truthful information in areas where they have some familiarity.

Couple that with OpenAI’s promotion of GPT-4’s successes in reliably performing on various benchmarks—bar exams, SATs, etc.—and it seems likely that reasonable readers will perceive GPT-4 (and especially future, even more advanced, versions) as generally fairly reliable. They wouldn’t view it as perfectly reliable, but, again, rumors are famously not perfectly reliable, yet people do sometimes act based on them, and repeating rumors can indeed lead to defamation lawsuits. They may certainly view it as more reliable than a Ouija board, a monkey on a typewriter, a fortune-teller, or the various other analogies that I’ve heard proposed (mor on those here). And one can be a reasonable reader even if one doesn’t have much understanding of how these AIs work, or even if one doesn’t have much experience with testing the AIs to see how often they err.

So, yes, when an AI program generates and communicates statements about how someone was found guilty of tax fraud, accused of harassment, and so on—and includes completely bogus quotes, though supposedly from real and prominent media outlets—there is a significant legal basis for treating those statements as defamatory, and the AI company as potentially liable for that defamation.

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Poll Finds That Americans Care Less About ‘Community Engagement.’ Government Is Largely to Blame.


local-inst

Americans value community engagement far less than they did a quarter-century ago, according to a new poll from The Wall Street Journal and research group NORC. The survey further found sizable declines in Americans’ attachment to other traditional American values, particularly since 2019. (Although the apparent sharpness of this trajectory, if not the poll’s assessment of Americans’ priorities, may be due to methodical inconsistencies, writes pollster Patrick Ruffini.) Republicans were more likely than Democrats to say traditional values are “very important”—e.g., “patriotism” (59 to 23 percent), religion (53 to 27 percent), and “having children” (38 to 26 percent). Not so for “community involvement,” which just 25 percent of Republicans labeled “very important,” compared to 32 percent of Democrats (27 percent overall).

“The decline of Americans’ participation in local civil society institutions—from churches to school parent groups—may vary year-over-year but must be considered a long-term trend,” the American Enterprise Institute’s Howard Husock tells Reason. This long-term breakdown of civil society—of local, private associations—largely in lower-class communities and largely since the 1960s, has been well documented in such works as Robert Putnam’s Bowling Alone (2000), Charles Murray’s Coming Apart (2013), and Timothy P. Carney’s Alienated America (2019).

While the trend toward civil detachment is surely propelled by many factors, Husock singles out the government’s ever-growing involvement in citizens’ everyday lives. “One must be mindful of this insight from the late sociologist Nathan Glazer, who wrote…of ‘the simple reality that every piece of social policy substitutes for some traditional arrangement, whether good or bad, a new arrangement in which public authorities take over, at least in part, the role of the family and neighborhood group, of voluntary associations,'” he says. “Put another way, government social programs have crowded out civil society.”

And government has, indeed, expanded aggressively in recent decades. Since 1970, the federal government’s yearly outlays have ballooned from approximately $195 billion to above $6 trillion (more than a 30-fold increase). In the past two decades, federal agencies have codified 114,821 final rules, according to the Competitive Enterprise Institute’s “10,000 Commandments” report for 2022. The totality of federal outlays and regulatory costs in 2021 comprised 36 percent of the economy, the report notes. “If it were a country, U.S. regulation would be the world’s eighth-largest economy (not counting the United States itself ), ranking behind France and ahead of Italy,” it adds.

The federal government’s subsidy programs almost doubled from 1990 to 2020, leaping from 1,176 to 2,249. From 1990 to 2018, federal aid-to-state programs—e.g., for agriculture, education, and energy projects—spiked from 463 to 1,386.

This era of bloated government is also one in which technological advances make social self-isolation increasingly easy, perhaps even attractive to some. “In a world before radio, before television, before we had more than three networks, before inexpensive travel, there were just fewer options for leisure time,” says David Boaz, a distinguished senior fellow at the Cato Institute. “Now, with the vastness of the world available to us on screens, it’s easier to stay home.”

The internet has facilitated the creation of a new sort of civil society, however. “Social media has also made it possible for people to find community online, among people they would never have met,” Boaz notes. “Libertarians, gay or trans people, people with rare diseases, fans of obscure bands or fading hobbies can find community and comfort in a way they couldn’t before.”

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Large US Banks Saw Record Deposit Outflows Last Week, Small Bank Outflows Stall

Large US Banks Saw Record Deposit Outflows Last Week, Small Bank Outflows Stall

The Fed just released its weekly commercial bank data dump showing deposit inflows/outflows.

Two things to note:

1) This is for the week up to 3/24/23 (which includes the post-SVB reaction week)

2) ‘Large Banks’ includes the top 25 banks (which means SVB was among that group, hence, we get no indication of SVB rotation flows, and also the $30 bn deposit transfer to FRC may impact the results)

A slowing growth in money-market fund inflows hinted at a slowing pace of deposit outflows from the US domestic commercial banking system last week (even though the last three weeks have seen MM inflows top $300bn), but that was not what we saw, with deposits (ex large time deposits) tumbling $131bn…

Source: Bloomberg

But, while many people’s attention has only been drawn to the US domestic bank deposit flows recently, they have been consistently suffering outflows for a year (this data excludes ‘large time deposits’). This is the 9th straight weekly decline in deposits…

Source: Bloomberg

Fascinatingly, both Large and Small banks saw deposit outflows (on a seasonally-adjusted basis) with Large banks losing a huge $129bn of deposits – the biggest weekly outflow ever…

Small banks, on the hand, saw a tiny $1.948 billion outflow (on a seasonally-adjusted basis)…

Source: Bloomberg (note different scales)

We note that the skew could be impacted by the $30bn rotation from “big banks” to FRC (a small bank)…

On a non-seasonally-adjusted basis, following the $196BN in small banks last week, we saw a $5.8BN INFLOW for small banks in the week ended March 22

The biggest (SA) large bank deposit outflow on record takes the overall level of deposits (ex-large deposits) to its lowest since March 2021…

In fact, outside of 9/11 (where infrastructure damage and closures prompted a blockage in payments/transfers), the total 5% drawdown in US domestic commercial bank deposits is the largest in history

Source: Bloomberg

While all of the data above is for domestic US banks, we also saw foreign bank deposits plunge $41 billion last week (slightly less than the $45bn from the week prior)…

Source: Bloomberg

Bear in mind this data includes the post-SVB period, where we had US regional banks all tumbling further and Yellen offering no guaranteed deposits, FRC stock collapse amid bailouts (though that will skew the data due to that $30bn infusion), and the fear of Credit Suisse’s collapse… and the ongoing gap between deposit rates and TSY yields

4% rates appears to have been the trigger for rotation (from deposits to MM)…

So with outflows continuing (and the spread between banks and TSY/MM fund yields), will banks start to compete for deposits? (Well not the biggest ones, for sure)…

“There are two key questions raised by the recent deposit turmoil,” Barclays Plc strategist Joseph Abate wrote in a note last week.

“How many deposits do banks ultimately lose to higher yielding money market funds? And how costly is it to replace this funding?”

Until now, when banks have lost deposits they haven’t had to compete aggressively so rates have lagged the Fed’s rate increases, and balances at government-only money fund balances had been flat since the hiking cycle began.

“But now that depositors have noticed, this dynamic is about to change,” Abate said.

And if the small ones start to ‘compete’ their profitability will collapse even further.

Which probably explains why regional banks just can’t bounce…

Still think this bank-run is over?

Tyler Durden
Fri, 03/31/2023 – 16:38

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No Going Back

No Going Back

Authored by Vincent McCaffrey via AmGreatness.com,

The old normal isn’t coming back without some new thinking about what structures will reinvigorate our old principles…

Like most polls, Gallup polls are usually paid advertisements for whomever commissions them and therefore deserving of as little attention. However, the indefatigable Sharyl Attkisson recently reported on the results of one such survey and that did draw my attention. Evidently, 47 percent of Americans say life will never go back to pre-pandemic normal. I was somewhat stunned! How could 53 percent be thinking we could go back? 

This led me to darker thoughts on the collateral damage of our recent foolishness. At least 53 percent of Americans will be woefully unprepared for what is coming. Due to their own unwillingness to bear witness to the reality around them, much less recognize the consequences, the unprepared will be the first to panic, and their panic will result in more bad behavior at a time when strength of character will be needed. 

But there is worse yet: 33 percent of Americans say their lives are completely back to normal. I had no idea that 33 percent of Americans lived in caves! But then, my own ignorance never fails to astound me. What could be considered normal to these citizens? Even in peaceful and civilized New Hampshire, we can see the damage done. 

How could this be? Well, perhaps it is tied to the fact that more than half of all Americans are on some level of government welfare, from Social Security to child care assistance, and those payments have not been diminished. Nevertheless, the inflationary costs of food and fuel have dramatically risen in the last three years due to federal monetary policies as well as profligate spending, so that doesn’t explain everything. 

Anyone reasonably sentient must be aware of the problems caused by the COVID lockdown and the misdirection of tax revenues, allegedly to “soften” that blow, but actually and cynically proffered in order to gain votes. From drug use to family decomposition, the rise in crime and the disintegration of our physical infrastructure, there is a lot of visible devastation out there. Is this poll indicating 33 percent of Americans are comatose? 

It was even more discouraging to read that 50 percent of Republicans say their lives are back to normal. Granted, this may be a willful statement of their desire to return to normalcy, but it also might indicate why the Republican Party is so out of touch as to be okay with sending billions of dollars of taxpayer cash and military equipment to Ukraine while our own trains are derailing, bridges and roads are degrading, and air traffic is failing. 

In keeping with the old newspaper standing head, “women and children hardest hit,” 70 percent of women are likely to say things in general suck, while 51 percent say they are unsure of the future. Children were not polled—and, given our poor school systems—that might be an underlying long-term cause for our overall ignorance.

Confirming the previous doubts expressed about the veracity of the poll, only 38 percent of those who earn more than $90,000  per year say their lives are back to normal—that figure is composed of 50 percent who say they are Republican, 33 percent who say they are independent, and 24 percent who say they are Democrats. That is to say, most of those polled who are pretty well off are pessimistic, while 68 percent of those in an average income bracket ($36,000 to $90,000) are not happy now, and almost half do not expect things to return to “normal” in the future. 

But this negative point of reference is the larger issue. What do our fellow Americans expect and what are they likely to do about it? Remember, these are the same people who voted for the politicians who made this mess. Will they accept responsibility for their actions? 

Given the progressive indoctrination in public schools over two generations, bound as those institutions are to the deep state, and given the progressive harangue from mass media and the onslaught from the entertainment industry, what is the likelihood a majority of Americans today are prepared to turn against their handlers and accept an active role in their own welfare or bear witness to their past foolishness? 

But there is no going back. As a nation we cannot return to some better moment out of the 1990s or 1950s. The accepted norms of those generations are lost. And no force will bring them back minus their own deficiencies. We cannot unlearn the internet.

The course that a minority of the population (my guess is less than 33 percent) must now chart is not unlike to the path chosen by our founders and their generation. Given the general lack of knowledge today about history and the replacement of it by phony propaganda such as the “1619 Project,” the objectives must be tied to current circumstances to make them clear.

Highlighting graphic practicalities such as the rise of the multinational corporations in America with no allegiance to our own people, as they make arms and sell them to our enemies, can make a family with a son overseas more aware; tech companies that mine and sell our personal data and abuse our privacy make themselves obvious by their own actions; and the simple rising costs of living and doing business for a population which is otherwise occupied with the day to day struggle, cannot be ignored.

Those who have the security of ample property and income will not be on hand until their own ox is gored. The recent Dutch farmer revolt might be encouraging, if not for the important fact that the Canadian truckers who similarly risked everything had their countrymen simply turn away. 

People caught in an endless cycle of debt by major corporations (i.e, wage slaves) as the whole of America is turned into an enormous company town, will not be interested. Their homes are mortgaged, and their savings have already dwindled. They are afraid of retribution and losing what little they have left, even as their college loans are still outstanding. And those people (and it is a large number) who work for the bureaucracies, federal, state, and local, will be largely unavailable if not already organized against anyone who threatens their sinecures. They think they will be the survivors. But they haven’t a clue.

Democrats as a group will mainly be out to lunch—at least until the empirical evidence that they are dealing with thugs is smashed in their faces like a grapefruit (à la James Cagney and Mae Clarke), and then they might have a political awakening. But they are just as likely to proclaim their victimhood and look for another benefactor. 

Feminists will be the enemy of the good until they realize they were used and discarded by the Marxist agenda—but not enough of them are young athletes bewildered by having to compete against men who identify as women. With politics as their new religion, most are just as likely to blame the result on men, which will be true this time, to a point.

Independents—the nonaligned—are most often pawns to their insecurities. They are looking for the best deal at any one moment and will always be treated accordingly with verbal promises not worth the paper they’re printed on. They bargain over principle. The long-term game is beyond their comprehension. 

With so little help, and a task so large, the difficulties may appear insurmountable. But I would suggest that it could not have seemed any less impossible to the members of our first ad hoc Congress as they faced the most powerful nation on earth armed with an idea which had never been tried before.

China, Russia, Iran, and their allies will happily take advantage of any weakness. They are doing that right now. It is up to us to still elect leaders who will meet that challenge. But the current system of government is too flawed to survive much longer. It promotes corruption and dishonesty. Every election cycle enlarges our debt and weakens our fiber. Even if we manage to elect a good government, we must then live with an inevitable swing of the pendulum as the bad guys work to undermine any progress.

But any long-term objective must be in keeping with the best principles of our founders. Those tenets are tested and true, and they are already familiar to the greatest number of citizens. In the short term, the anachronistic structure set in place 200 years ago to give those truths a chance to flourish must now be examined for termites as well as for strength, and replaced, from pillar to post. The structure is important only so far as it protects and furthers those principles. 

It is the truth that matters, not the structure—just as my Free Will Baptist grandmother said, when I foolishly mentioned the peccadillos of some preacher of the time, “It’s the Lord I pray to, not the pastor.” 

My own thoughts return to that first Continental Congress. As we go forward and continue trying to elect better people to a job now thoroughly corrupted, we should act separately to elect a “shadow” government, similar to that of Westminster, but in the full light of day, with the peaceful purpose of proposing better ways and means. It must be constructed in public view and its purposes made clear. A short conversation with an average person will tell you that neither politicians nor our system are trusted. Given some time to show what might be done, with a consistent emphasis on principle and ways to make those ideas manifest, a larger public following should develop.

There is no Frodo among us who might faithfully handle the ring of power without succumbing to its poison. We cannot hope for a savior to make this happen. And the Lord will only help those who help themselves.

Tyler Durden
Fri, 03/31/2023 – 16:20

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Bitcoin & Bullion Soar In Q1 As The Dollar Dumps, Banks Battered, Big-Tech Booms

Bitcoin & Bullion Soar In Q1 As The Dollar Dumps, Banks Battered, Big-Tech Booms

Q1 2023 – and even more specifically the month of March – can be summarized with one simple image…

Bank crisis in US and EU, global war rhetoric rising, de-dollarization actions escalating, US layoffs exploding? Makes you wonder about the state of the dollar eh?

Source: Bloomberg

BUT Everything must be ok right – the S&P 500 is above pre-SVB levels (just ignore the bank stocks collapse)…

Source: Bloomberg

However, a bigger picture look paints a different picture as the dollar suffered its second straight quarterly decline) as Bitcoin soared over 70% and Gold jumped almost 9% (bonds and stocks were also higher in Q1)…

Source: Bloomberg

In equity-land, the divergence across the majors in Q1 is quite shocking as long-duration mega-cap tech (and trash) soared while Big-Caps (Dow) and Small-Caps (Russell 2000 – heavy with small financials) ended around unchanged.

That was the Nasdaq’s best quarterly performance since Q2 2020 (and before that to Q1 2012)…

Source: Bloomberg

For the month, the Nasdaq is up over 8%, its biggest March advance since 2010. The Russell 2000 and Trannies were the ugliest horse in March’s glue factory…

Source: Bloomberg

Dow surged to its best week since November, but Small Caps outperformed, up over 3%…

The last 3 Friday have seen fear over SVB, CS, & DB respectively, so 4th time was the charm this week with a major melt-up as early 0DTE negative delta flows (as the S&P broke above 2065 JPM Collar Call Strike) were rapidly unwound as stocks continued to squeeze higher and that accelerated the gains…

Source: SpotGamma

The S&P rallied all the way back up to the key 4100 level today…

The S&P 500’s performance in Q1 was dominated by just 15 stocks…

In fact, it gets worse, according to Bianco Research, META, AAPL, AMZN, NFLX, GOOGL, MSFT, NVDA, TSLA account for all of the S&P’s YTD return. They are up +4.6%. The other 492 stocks collectively are down for the year (-.99%).

Source: Bianco Research

Mega-Cap techs saw market caps soar with AAPL back above $2.5 trillion, MSFT back above $2 trillion, AMZN back above $1 trillion, and META and TSLA back above $500 billion…

Source: Bloomberg

Tech and Discretionary dramatically outperformed in Q1 while Energy and Financials lagged…

Source: Bloomberg

European markets were mixed in March with Germany and France ending green while UK was the biggest loser…

Source: Bloomberg

On the month, European banks are modest underperformers relative to US banks, but both are ugly…

Source: Bloomberg

March was a wake-up call for commercial real estate, as Office REITs crashed hard…

Source: Bloomberg

US growth stocks have dominated Q1, crushing value stocks (until this week when the ratio of Russell 1000 Value/ Growth hit the August lows). For context, this is the biggest growth/value quarter since Q1 2020 (and before that Q1 2009)

Source: Bloomberg

March saw bond vol (MOVE) explode relative to equity vol (VIX) – to the same extent as October 2008…

Source: Bloomberg

Thanks to March ugliness (and basically no issuance), corporate bond spreads in US and EU are wider in Q1 after blowing out wider in March, erasing all the compression from Jan/Fed…

Source: Bloomberg

While stocks bounced back above pre-SVB levels, the credit market remains much more stressed (even with the rally of the last 2 days)…

Source: Bloomberg

Q1 was a wild one for bonds with Treasury yields exploding higher on hawkish Fed realizations and then collapsing lower on safe-haven/recession anxiety over the bank crisis. Amid all the chaos, yields ended the quarter surprisingly grouped, down around 30bps or so (with the belly outperforming)…

Source: Bloomberg

March was a big month for the yield curve with its biggest monthly steepening since May 2013 (2s10s +32bps), ending Q1 unchanged…

Source: Bloomberg

Yields were all higher on the week (with the short-end underperforming)…

Source: Bloomberg

The market’s expectations of The Fed’s actions has swung violently in Q1 from a post-payrolls-beat, post-hawkish-Powell surge (expecting rates to  be over 100bps higher by year-end) to a post-SVB failure collapse (expecting rates to be almost 100bps lower by year-end). The quarter ends with coin-flip odds of one more rate-hike before The Fed is done and then cuts starting by September…

Source: Bloomberg

Interestingly, the short-term yield curve is ending Q1 just a little more dovish than it started it – having been dramatically more hawkish and dovish intra-quarter…

Source: Bloomberg

The dollar is set to end the quarter 1.4% lower, its first consecutive quarterly loss since 2020, amid easing concerns about the global banking sector and money market wagers on Federal Reserve interest-rate cuts. This is the 5th monthly drop in the dollar out of the last 6 months

 

Source: Bloomberg

All the major cryptos had a good Q1, with Solana outperforming and Bitcoin gaining more than Ethereum (and that was in spite of ‘Operation Choke Point 2.0’)…

Source: Bloomberg

Bitcoin is up for the 3rd month in a row for its best quarterly gain since Q1 2021, back above $28,500 (and Ethereum is also up for 3 straight months (best Q since Q1 2021), nearing 7 month highs at $1850)…

Source: Bloomberg

NatGas was the standout commodity performance in Q1, collapsing 50% as warmer weather spoiled Putin’s party plans. Gold was the quarter’s best performer (along with copper – China reopening hopes) as crude closed lower…

Source: Bloomberg

Gold is up for the second quarter in a row (up over 19% in the  last 6 months – its best such gain since 2016), with its highest quarterly close in history. March saw gold rally almost 9% -its best month since July 2020 (topping $2000) once again…

Oil has been on a tear for the last two weeks with WTI back above $75, but remains down on the year, after breaking below its Jan/Feb range…

And finally, Q1 saw over $450 billion of inflows into Money-Market funds and over $300 billion in deposit outflows from US domestic banks…

Source: Bloomberg

And in case you were wondering what has sparked this sudden panic-buying in bonds, bullion, bitcoin, and big-tech? That’s easy – The Fed!!! Just as we warned would happen mid-March…

It’s the ‘old QE’ trade writ large. But what happens next (as The Fed balance sheet actually shrunk modestly last week) and Goldman’s US Activity Index just dropped into contraction…

With recessionary signals growing louder, maybe pricing in some ‘easing’ by The Fed is ‘fair’ but that appears fully priced-in to stocks at near-record high valuations (esp. mega-cap tech).

Tyler Durden
Fri, 03/31/2023 – 16:00

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