Month: July 2024

Authored by Chris Powell via MoneyMetals.com,

In the July 18 edition of Gold Newsletter, editor and publisher Brien Lundin wrote about the failure of silver prices to keep up with gold prices.

“I’m not the kind of conspiracy buff that many of my friends in the industry are,” Lundin wrote, “but it’s hard to look at silver and not see some hidden hands at work (especially considering who holds so much of the metal in both physical and paper forms while acting as custodian for the biggest silver exchange-traded fund).”

Of course, Lundin meant investment bank JPMorgan Chase and silver ETF SLV.

Why anyone would invest in silver or the other precious and monetary metals with JPMorgan Chase can be explained only by ignorance.

In the last decade, the bank has pleaded guilty to five felonies and has paid more than a billion dollars in government fines and civil lawsuit settlements, including a fine of $920 million for manipulation of the monetary metals markets by some of its traders:

https://www.justice.gov/opa/pr/jpmorgan-chase-co-agrees-pay-920-million-connection-schemes-defraud-precious-metals-and-us

But silver market manipulation long has been bigger than even JPMorgan Chase. 

Indeed, silver price suppression has been U.S. government policy since President Lyndon B. Johnson signed the Coinage Act of 1965, which removed silver from the country’s money.

Signing the act into law, Johnson proclaimed:

“If anybody has any idea of hoarding our silver coins, let me say this. Treasury has a lot of silver on hand, and it can be and it will be used to keep the price of silver in line with its value in our present silver coin. There will be no profit in holding them out of circulation for the value of their silver content”:

https://www.presidency.ucsb.edu/documents/remarks-the-signing-the-coinage-act

https://www.gata.org/node/15838

It’s not known how long the U.S. government’s strategic silver inventory lasted after 1965 and how much was used for executing the price-suppression policy Johnson proclaimed, but eventually, collectors and investors did exactly what the president warned would bring them no profit. They removed the silver coins from circulation and hoarded them as the steady inflation of the U.S. dollar made them worth far more than their face value.

JPMorganChase Bank long has been a primary dealer in U.S. government securities and has been particularly close to the U.S. Treasury Department, so when SLV was launched in 2006 and the bank became custodian of the fund’s silver, suspicion of government involvement with the bank and the ETF was fairly aroused. (The bank now is also the custodian of the metal of the major gold ETF, GLD, prompting more fair suspicion.)

After SLV was founded, complaints that JPMorgan Chase was manipulating the silver market grew loud enough that the bank felt obliged to answer them publicly.

First, the bank’s CEO, Jamie Dimon, said the bank had no interest of its own in the monetary metals and traded them only for clients. Then in 2012 the head of the bank’s commodity desk, Blythe Masters, went on CNBC to emphasize this denial, particularly in regard to silver.

“There’s been a tremendous amount of speculation, particularly in the blogosphere, on this topic,” Masters told the CNBC reporter. “I think the challenge is that it represents a misunderstanding of the nature of our business. … Our business is a client-driven business where we execute on behalf of clients to achieve their financial and risk-management objectives. … We have offsetting positions. We have no stake in whether prices rise or decline.”

See: https://www.gata.org/node/11216

But since CNBC is a mainstream financial news organization, its reporter failed to put the critical follow-up question to Masters: Do JPMorgan Chase’s clients trading silver and other monetary or precious metals include governments, particularly the U.S. government, directly or indirectly?

The answer to that question was provided inadvertently 10 years later, and barely noticed by mainstream financial news organizations, during the trial of the JPMorgan Chase traders charged with and convicted of “spoofing” the monetary metals futures markets. In the very last paragraph of its July 31 report about the trial, Bloomberg News reported:

“Another set of important clients were central banks, which trade gold for their reserves and are among the biggest players in the bullion market. At least 10 central banks held their metal in vaults run by JPMorgan in 2010, according to documents disclosed in court”:

https://gata.org/node/22108

 A mechanism for governments to use for surreptitious manipulation of the monetary metals futures markets was already in place at CME Group, operator of all the major futures exchanges in the United States. It is called the Central Bank Incentive Program, whereby CME Group exchanges provide volume trading discounts to governments, central banks, and international organizations for trading all futures contracts on CME Group’s exchanges.

CME Group’s master statement to the U.S. Securities and Exchange Commission says: “The customer base of our derivatives exchanges includes professional traders, financial institutions, institutional and individual investors, major corporations, manufacturers, producers, governments, and central banks”:

https://www.gata.org/node/18925

http://investor.cmegroup.com/node/43571/html

https://www.gata.org/files/CMEGroup-CentralBankIncentiveProgram-Feb2019.pdf

So there remain some compelling questions in the monetary metals sector.

— Would Western governments and particularly the U.S. government have worked so hard for so long to control the price of gold, as documented by GATA here —

https://gata.org/node/20925

— while leaving the other major monetary metal, silver, alone?

After all, for many years the world might have sensed monetary debasement almost as readily from a rising silver price as from a rising gold price, even if these days, with inflation sending most important prices soaring, it’s hard not to sense monetary debasement nearly everywhere one looks, except maybe, as Lundin notes, when one looks at silver.

— Why do all the major bullion banks seem to trade gold and silver the same way at the same time? It sure looks like collusion. If it is collusion, it would violate anti-trust law in the United States, United Kingdom, and other Western countries — unless, of course, the bullion banks are simply executing government trades and thus giving camouflage to government intervention. 

The Gold Reserve Act of 1934 authorizes the U.S. Treasury Department, through its Exchange Stabilization Fund, to intervene secretly in any market in the world:

https://home.treasury.gov/policy-issues/international/exchange-stabilization-fund

That intervention like this is going on has been essentially confirmed by the U.S. Commodity Futures Trading Commission, which repeatedly has refused to answer not just for GATA but even for a U.S. representative whether the commission has jurisdiction over manipulative futures trading undertaken by or at the behest of the U.S. government or whether such manipulation is legal:

https://www.gata.org/node/19917

— By amassing a big hoard of silver “for clients” and serving as custodian of the silver ETF SLV, has JPMorgan Chase in effect reconstituted the U.S. government’s strategic silver reserve for interventional purposes?

— What exactly goes on every day on the trading desk at the Federal Reserve Bank of New York? What markets are being traded there by the U.S. government, how are they being traded, and why? Is the desk trading more than the government bonds it reports trading? Why can’t the public be allowed to observe this trading?

— Is the Bank for International Settlements trading the monetary metals for the U.S. government, directly or through intermediaries?

In 2005 the head of the BIS’ monetary and economic department, William R. White, told a conference at BIS headquarters in Switzerland that a primary purpose of cooperation among central banks is “the provision of international credits and joint efforts to influence asset prices (especially gold and foreign exchange) in circumstances where this might be thought useful”:

https://www.gata.org/node/4279

The United States is a member of the BIS and White’s “asset prices” easily could cover the prices of the other traditional monetary metal, silver.

Gold Newsletter’s Lundin is right that it’s hard not to suspect that “hidden hands” are at work against the silver price just as they have been against gold. Or at least it’s hard not to suspect that “hidden hands” are at work as long as you’re not part of a mainstream financial news organization or an executive of the typically oblivious silver-mining company.

Via RFE/RL Staff,

• The EU has transferred €1.5 billion to Ukraine, using proceeds from frozen Russian assets.

• This move is part of a larger Western effort to support Ukraine financially and pressure Russia.

• Russia has vowed to respond to the EU’s actions, though specifics are not yet clear.

European Commission President Ursula von der Leyen has announced that the European Union will send Ukraine 1.5 billion euros ($1.63 billion) that represent revenues from Russian assets frozen by the 27-member bloc.

“Today we transfer 1.5 billion in proceeds from immobilized Russian assets to the defense and reconstruction of Ukraine,” von der Leyen wrote on X.

“There is no better symbol or use for the Kremlin’s money than to make Ukraine and all of Europe a safer place to live.”

Following Moscow’s unprovoked invasion of Ukraine in February 2022, the West froze some 276 billion euros ($300 billion) in sovereign Russian wealth funds and the Group of Seven (G7) industrialized countries last month decided to service a $50 billion loan for Ukraine with proceeds generated by Russia’s frozen assets, prompting Moscow to threaten legal action.

On July 25, EU Economic Commissioner Paolo Gentiloni said the G7 was likely to have a framework deal on the loan for Ukraine’s defense and reconstruction by October, according to Euractiv.com.

Ukrainian Prime Minister Denys Shmyhal voiced gratitude for the EU move in a message on X.

“Thank you, @vonderleyen, and the EU for your steadfast support and this significant contribution to Ukraine’s defense and reconstruction. Together, we are turning adversity into strength and building a safer, more resilient Europe,” he said.

Most of the frozen Russian sovereign funds — some 210 billion euros ($228 billion) — are held in Europe, while about $10 billion is in the United States, Euractiv.com estimates.

Some $30 billion are in Japan, and $10 billion in Britain.

In reaction to von der Leyen’s announcement, Kremlin spokesman Dmitry Peskov said Russia will not leave the EU’s move unanswered but said Moscow’s response had to be carefully planned.

“This is certainly grounds for well-thought-out actions in response to such unlawful decisions being implemented by the European Union. Such actions will certainly follow,” Peskov told journalists on July 26.

Authored by Andrew Korybko via substack,

India’s WION cited unnamed diplomatic sources to report on Friday that Prime Minister Modi is planning to visit Kiev at the end of August. This was surprising considering that India summoned the Ukrainian Ambassador in mid-July to complain about Zelensky publicly insulting Modi after the latter visited Russia. It was analyzed here that Ukraine risked losing the support of the Global South after attacking the leader of its most populous country, but then something major happened to change Delhi’s calculations.

Ukrainian Foreign Minister Kuleba visited Beijing, which this preview here foresaw as a signal that his country is semi-serious about resuming peace talks with Russia. That insight was proven correct after he said that his country is ready for this but added that it won’t be forced into anything either. Russian Foreign Ministry spokeswoman Zakharova was skeptical, but Kremlin spokesman Peskov was less so, instead pointing to the political and legal obstacles that would have to be resolved before this happens.  

In any case, the world interpreted Kuleba’s words as a newfound willingness to entertain the resumption of peace talks with Russia, which was hitherto taboo for his side and its foreign supporters to talk about. From India’s perspective, the possibility of China organizing a Brazilian-fronted non-Western peace process before and/or during the G20- in Rio would be a nightmare come true since it would result in Russia becoming diplomatically indebted in China, which could eventually lead to trouble for India.

Russia’s recently recalibrated Asian balancing act, which readers can learn more about here and here, was crowned by Modi’s visit to Moscow but now India has reason to worry that all this progress might be reversed if China calls in its diplomatic debt and gets Russia to distance itself somewhat from India. It’s no secret that China and India are embroiled in a fierce border dispute, so it’s not unforeseeable that Beijing might lean on Moscow to decelerate and ultimately cut off the supply of military spares to Delhi.

India is disproportionately dependent on Russian equipment so that scenario could instantly cripple its deterrence capabilities vis-à-vis China and thus force it into accepted a lopsided deal for resolving their dispute under the pain of war if it refuses. To be absolutely clear, there aren’t any credible indications that Russia would bend to China’s speculative demand to jointly blackmail India via complementary military means, but it can’t confidently be ruled out by responsible Indian policymakers either.

That being the case, it naturally follows that the most effective way to preemptively thwart this worst-case scenario is for India to make a play for replacing China as the leader of the incipient non-Western peace process on Ukraine, ergo the reason why Modi might soon visit Kiev. From Russia’s perspective, it would be more ideal for India to mediate a resolution to this conflict than for China to do so since its established balancing/pragmatic policymaking faction wants to avoid diplomatic indebtedness to Beijing.

Likewise, the US would also prefer for India to play this role instead of China since the latter is its systemic rival in the New Cold War, hence why Washington is unlikely to let Kiev participate in any Chinese-organized but Brazilian-fronted non-Western peace process anyhow. Nevertheless, Kiev might also “go rogue” to an extent by still taking part in such events, which its leadership might envisage leveraging to get more aid from the US and have it rescind all existing restrictions on the use of its arms.

Even if that happens, Ukraine would be unable to agree to anything meaningful without the US’ approval though seeing as how it militarily depends on American-led NATO, so there are limits to what could come from its participation in such Chinese-organized but Brazilian-fronted events. By contrast, the US would have no objections to Ukraine taking part in Indian-led ones, especially since this could serve to help the US and India “reset” their troubled ties by cooperating to end this globally significant conflict.

In the same vein, Ukraine and India could also “reset” their ties too, which unexpectedly worsened after Zelensky insulted Modi. If his country is truly serious about resuming peace talks with Russia and has American approval for this, then India could promptly mediate between them given its special and privileged strategic partnership with Russia. It would be a win-win for India, the US, Ukraine, and Russia if Modi assumes this role, but a lost diplomatic opportunity for China, which won’t give up its plans easy.

Authored by Aldgra Fredly via The Epoch Times,

The U.S. Department of Justice (DOJ) has asked an appeals court to dismiss a lawsuit filed by TikTok seeking to block a new U.S. law that could lead to a nationwide ban on the video-sharing app.

President Joe Biden signed the new law in April, requiring either the sale of the app by its Chinese parent company, ByteDance, by next year or face its removal from app stores and web-hosting services.

TikTok filed a lawsuit in May challenging the constitutionality of the new law on the grounds that the U.S. government infringed the First Amendment rights of the company and its users in the United States.

In a brief filed to the federal appeals court on July 26, the DOJ raised concerns over the national security threat posed by TikTok, noting that the app collects “vast swaths” of sensitive data from its 170 million U.S. users.

“That collection includes data on users’ precise locations, viewing habits, and private messages—and it even includes data on users’ phone contacts who do not themselves use TikTok,” it stated.

The DOJ argued that the ruling Chinese Communist Party (CCP) in China could potentially use its robust authority to gain access to U.S. consumer data and the algorithm owned by ByteDance.

“Given TikTok’s broad reach within the United States, the capacity for China to use TikTok’s features to achieve its overarching objectives to undermine American interests creates a national-security threat of immense depth and scale,” it stated.

The DOJ said the Chinese regime could “covertly control” TikTok’s algorithm to influence the content that U.S. users receive “for its own malign purposes,” such as promoting disinformation and exacerbating social divisions.

“Among other things, it would allow a foreign government to illicitly interfere with our political system and political discourse, including our elections,” the DOJ stated.

The DOJ claimed that employees of TikTok and ByteDance often engage in a practice called “heating,” in which certain videos are manually promoted to achieve a certain number of views.

The department warned that this functionality could be “a powerful tool” for manipulating public discourse and public perceptions of events.

The DOJ also accused TikTok of misapplying the First Amendment. It argued that the new law was aimed at “national-security concerns unique to TikTok’s connection to a hostile foreign power, not at any suppression of protected speech.”

“They largely dismiss the divestment option—under which ByteDance’s American affiliate could continue engaging in these activities on the platform—as infeasible, in significant part because TikTok’s U.S. operations are currently interwoven with operations in China and because China will not permit the export of the proprietary recommendation algorithm,” it stated.

A TikTok spokesperson said the DOJ’s brief does not alter “the fact that the Constitution is on our side,” reiterating that the new law would violate the First Amendment by silencing its users’ voices.

“As we’ve said before, the government has never put forth proof of its claims, including when Congress passed this unconstitutional law,” the spokesperson said in an emailed statement to The Epoch Times.

“Today, once again, the government is taking this unprecedented step while hiding behind secret information. We remain confident we will prevail in court,” the spokesperson said.

The new law sets the initial deadline for a TikTok sale by January 2025, and President Biden can decide to extend the deadline by another three months to allow the deal to be completed.

TikTok has maintained that it has not and will not share U.S. user data with the CCP. But according to China’s counterespionage law, ByteDance must hand over data on U.S. users if requested.

Via The Cradle

The Canadian Revenue Agency (CRA) notified the Jewish National Fund (JNF) on July 25th that it plans to revoke the group’s charitable status over its use of donations to build military infrastructure in Israel.

“Canadian charities are not allowed to fund foreign militaries,” Mark Blumberg, an attorney specializing in Canadian charity law, told the National Post. “Clearly, there were previously some compliance issues,” he added.

“Our position is that it is unjust for CRA to revoke a charity because a charitable object that it accepted almost 60 years ago is now no longer considered to be a valid charitable object,” the JNF said in a statement, adding that it will challenge the decision in the courts.

The Zionist organization also accused the CRA of “antisemitism.”

“As a Zionist-inspired organization, JNF Canada has many vociferous antisemitic detractors who we believe have influenced the decision-making process in this matter,” JNF Canada national president Nathan Disenhouse and CEO Lance Davis told media.

Founded in 1901, by 2007 the Jerusalem-based JNF owned 13 percent of the occupied Palestinian territories and has been considered the single-largest landowner in Israel. Furthermore, its charter explicitly prohibits the sale or lease of land to non-Jews.

“Under the guise of ‘environmentalism,’ the JNF has forested over the ruins of Palestinian villages in an attempt to ‘greenwash’ non-Jewish dispossession.”

“This includes ‘Canada Park’ which was built over top 3 destroyed Palestinian villages who more than 9,000 residents were expelled from their homes,” Canada’s Green Party says in a petition to revoke the charitable status of the JNF.

“Because of its charitable status, JNF provides tax credits for donations, meaning that up to 25 percent of their budget comes from our taxes,” the statement adds.

The Canadian Revenue Agency has notified the Jewish National Fund of Canada that it will lose its charitable status because of its use of Canadian taxpayer-supported donations to build military infrastructure in Israel.https://t.co/mu6IN84vYL

— Evan Dyer (@EvanDyerCBC) July 26, 2024

The CRA decision comes several months after Ottawa announced plans to ban new arms exports to Israel. Nevertheless, officials clarified that export permits approved before January 8 would remain in effect.

Authored by Cory Morgan via The Epoch Times,

Millions of Albertans, and indeed Canadians, are mourning the destruction of a site where they have memories of recent and childhood trips. We can be thankful that no lives have been lost, but the loss for residents of Jasper is unimaginable. I grew up in the town of Banff and can’t imagine watching my hometown go up in flames.

Banff may very well suffer the same fate as Jasper soon, though, as it is nestled within the same kind of beautiful, but highly flammable Rocky Mountain forests as Jasper. When the Jasper fires have been extinguished and the rebuilding process begins, we must have a serious appraisal of our forest management practices and act as soon as possible. Otherwise, it won’t be a matter of if another community is lost to a wildfire, it will be a matter of when.

The fingers are pointing and the partisan sniping has already begun as politicians and activists try to lay blame of the Jasper tragedy upon others. But we must set aside partisanship, and even ideology, and work towards solutions before we see more losses.

To begin with, it must be accepted that fires in boreal forests are natural and inevitable. It has only been in the last couple of centuries that humans have entered the scene and meddled with the natural cycle of burning and rejuvenation of forests. What we are seeing today is the consequences of deferring the fires that would have naturally burned. The forests have become overgrown, unhealthy, and cluttered with layers of extremely flammable deadfall. Forests in that condition burn hot and fast, leading to fires that can’t be extinguished. Many communities in Canada are surrounded by forests like this and are but one spark away from a disaster.

It’s not reasonable to just let fires burn naturally in populated areas. That means we must manage these forests and our communities to reduce the chances of wildfires and mitigate the damage they cause. This has been done to a degree in areas, but not adequately.

Forest management to reduce wildfire risk is not new. Logging, tree spacing, and prescribed fires are all methods used to reduce fire hazards in populated regions. Unfortunately, when politics get involved, the wisdom of foresters can be lost as elected officials face backlash for supporting the cutting or burning of brush.

Jasper is a prime example. A mountain pine beetle infestation had previously killed thousands of acres of pine trees around the townsite. Standing dead pine trees are extremely flammable, and experts were warning of the risk they presented to Jasper in 2018. A plan was formulated between the Alberta Forest Service and Jasper National Park officials to manage the forests, but it was rejected by the federal government. It’s not that the federal government wanted to see the area burn. They didn’t want to deal with the optics of bulldozers and loggers taking down tracts of forest in a scenic national park along with the haze and smoke prescribed burns would bring. The consequences of that deferral are being seen today.

Municipal governments are loath to create buffers between forests and their townsites because residents enjoy the cozy feel of living next to the wilderness. Developers pitch communities that share space with nature and property owners will complain if bush is cut back.

Cutting buffers in forests, doing prescribed burns, and clearcut logging may not look pretty, but it is all preferable to the devastation a fire will bring. Politicians must make the tough choices and impose fire mitigation measures upon communities, even if it upsets some residents.

Just as we build dams and dykes to prevent flooding in populated areas, we must look at managing forests to reduce the fire risks. I worked as a surveyor for over 20 years in Alberta, and what I saw building up on the eastern slopes of the Rocky Mountains was concerning, to say the least. In some areas, it is almost impossible to walk due to the volume of deadfall. If we don’t clear those zones out soon, a fire will and it will be a big one.

Government jurisdiction and long-term changes in the climate are subjects worthy of discussion, and we doubtless will be having those discussions for years.

In the meantime, we must act and safeguard our communities. We don’t have years to wait, and we will see more heartbreaking losses as we have with Jasper if we keep putting off the forest management that must happen.

Authored by Steve Watson via Modernity.news,

During an address to the Turning Point Summit on Friday, President Trump asserted that Joe Biden was forced to quit the presidential race by “fascists” who carried out a “coup.”

Trump told the Florida crowd “As you know, five days ago, we officially defeated the worst president in the history of the United States, Crooked Joe Biden. You know, I thought a lot about it. We defeated him.”

Trump continued, “He was badly beaten. And, you know, everybody who was going to him said, ‘You can’t beat him. You’re not going to beat this guy. You can’t beat him. Get out. Get out. We want you out…We want you out of the race. You’re going to lose. We want to put somebody else in.’”

Trump compared the situation to “a prizefighter,” explaining “He’s losing badly, ready to be knocked out. And they say, well, wait, let’s stop the fight. Let’s put somebody else in.”

“It doesn’t work that way. And it’s not supposed to work that way. And this really was a coup by the Democrats. This was a coup. Nothing else,” Trump emphasised.

Trump: Biden was outed in a “fascist coup.” Full report here: https://t.co/57PQciFfK3 pic.twitter.com/KUuhE3fCJP

— m o d e r n i t y (@ModernityNews) July 27, 2024

“He got 14 million votes,” Trump noted, referring to the Democratic primary, adding “I hate to stick up for Biden, but, you know, he didn’t want to do what he did. He said, ‘I’ll never go out. I’ll never, ever go out.’ About two days later, ‘I’m proud to go out.’”

Trump further declared “the fascists went after him. They threatened him with the 25th Amendment.”

“They said, we can do it the nice way or we can do it the hard way, Joe. That’s what happened. I know,” Trump added, referring to reports of what Nancy Pelosi said to Biden.

Trump continued, “I know as many people on that side as I know on our side, so to speak. But that’s what happened. They said, we can do it the hard way. We can do it the easy way. 25th Amendment, if you don’t go. And he said, ‘Oh, I’ll go.’”

“And now they’re trying to make him into a brave hero. He’s so brave,” Trump concluded.

Elsewhere during the speech, Trump highlighted how some leftists are saying it is ‘hateful’ to pronounce Kamala Harris’ name incorrectly.

Trump proclaimed “there are numerous ways of saying her name. They were explaining to me, you can say Kamala, you can say Kamala. I said, don’t worry about it.”

“It doesn’t matter what I say. I couldn’t care less if I mispronounce it or not. I couldn’t care less,” he urged.

“Some people think I mispronounce it on purpose, but actually I’ve heard it said about seven different ways. There are a lot of ways. There are a lot of ways,” Trump told the audience.

Trump: “There are numerous ways of saying her name. They were explaining to me, you can say Kamala, you can say Kamala. I said, don’t worry about it. It doesn’t matter what I say. I couldn’t care less if I mispronounce it or not. I couldn’t care less.” https://t.co/57PQciFfK3 pic.twitter.com/tWPqJsiJXi

— m o d e r n i t y (@ModernityNews) July 27, 2024

*  *  *

Your support is crucial in helping us defeat mass censorship. Please consider donating via Locals or check out our unique merch. Follow us on X @ModernityNews.

Between 2022 and 2023, the five major U.S. sports leagues collectively earned $49.3 billion.

The NFL generated the highest revenue, at $18.7 billion, significantly outpacing both the NBA and MLB, which each brought in $10.9 billion. Although the main sources of league revenues have largely remained unchanged over the last four decades, there are distinct variations in the revenue breakdown of each sport.

This graphic, via Visual Capitalist’s Niccolo Conte, breaks down U.S. sports leagues by revenue stream, based on data from Sportico.

Breaking Down U.S. Sports League Revenues

Below, we show how each major league generates revenue based on their primary sources of revenue. Revenue for the NFL and MLB is as of 2022, revenue for the NBA and NHL is for the 2022-2023 season, and revenue for the MLS is as of 2023.

Central revenue includes league media, merchandise, other sponsorships, and shared ticket revenue.

As we can see, central revenue, which largely consists of media and broadcast deals, is the most important revenue source for the NFL and NBA.

Since 2018, the NFL has grown from 61 of the top 100 most watched TV broadcasts to 93 in 2023. Adding to this, streaming platforms are increasingly signing contracts with the NFL, including Netflix paying $150 million to stream two 2024 Christmas games and Amazon paying $1 billion to stream Thursday night games exclusively on digital.

Additionally, the NBA recently signed an 11-year $76 billion deal with ESPN, Amazon, and NBC that is worth more than double its previous contract. Moreover, this trend of significantly increasing media deal values is seen across every major league amid high consumer demand for professional sports.

For the MLB, local media is a vital source of revenue, with nearly a quarter of revenues coming from this source—more than any other sport by far. In fact, each day an average 2.3 million viewers watch MLB games on regional sports networks.

Meanwhile, the NHL makes the highest share of revenue from seating and suite sales compared to major sports leagues, at 44%, due to it attracting less lucrative TV contracts.

Authored by Charles Hugh Smith via OfTwoMinds blog,

Confidence / complacency doesn’t map the real world, in which liquidity dries up and markets go bidless.

When Alan Greenspan issued his mea culpa in late 2013 about missing the subprime mortgage implosion and the resulting Global Financial Meltdown (Why I Didn’t See the Crisis Coming Foreign Affairs), he started by noting the complete and utter failure of everyone’s sophisticated models to predict the collapse of confidence.

The core failure, he suggested, lay in the models’ reliance on the notion that humans make decisions rationally as Homo economicus, when the reality is we are extremely prone to irrational exuberance (a.k.a. running with the greed-enchanted herd) and panic (running off the cliff with the herd). He invoked Keynes famous “animal spirits” as the missing variable in economic models.

Irrational “animal spirits” generate “tail risk,” events that supposedly happen only rarely but when they do happen, they trigger outsized consequences, and the Fed’s models failed to accurately account for “tail risk” because they happen more often than statistical models predict.

All this boils down to liquidity and illiquidity: When “animal spirits” are confident in future increases in asset valuations, participants place a constant bid under the market because prices will keep going up so I’ll make more money in the future. This constant bid is called liquidity: cash is flowing into the asset class, be it stocks or housing or cryptocurrencies or commodities.

When “animal spirits” turn to panic, sellers rush to sell as buyers vanish as they fear that prices will keep going down so I’ll lose more money in the future. Buying into a downtrend is known as “catching the falling knife”: the initial “buy the dip” players have their head handed to them on a platter, and those on the sidelines decide not to try to catch the falling knife.

This is an illiquid market: when sellers dump assets on the market and buyers vanish, the bid keeps dropping until buyers are willing to gamble that “this is the bottom.” But should asset prices continue sliding after an initial euphoric pop higher–“the bottom is in, buy!”–then those who held back find their caution reinforced: that wasn’t the bottom after all, and everyone who jumped in lost money.

As every surge of “buy the dip” players has their head handed to them on a platter, the market goes bidless–everyone who wanted to play “catch the falling knife” has been burned, and those who have lost the “animal spirits” to gamble stay out. The market goes bidless, and asset prices crash to levels no one in the greed-euphoria stage could imagine were even remotely possible.

Those who follow liquidity assume that the more cash sloshing around the system, the more money will flow into assets. But this assumes participants–and therefore markets–are rational. When caution–and then panic–take hold of the herd, no matter how much cash is sloshing around, none of it will be gambled on a losing bet.

Take a look at this chart of the Nasdaq dot-com bubble, and note the bubble symmetry: what shot up soon plummeted back to pre-bubble levels. Stocks that had reached $60 per share were recommended as “buys” at $45–a rational play perhaps, but wildly off the mark, as the stock eventually bottomed at $4.

When sellers desperate to sell swamp buyers, prices decline. If buying dries up, prices crash.

It’s worth pondering the psychological reality that losses make a much bigger impression on us than gains. This is the foundation of risk aversion: once burned, twice shy. Everyone’s surprised when “animal spirits” reverse polarity, but the confidence that any asset has reached “a permanently high plateau” is misplaced. Every manic greed-inflated bubble pops and cascades back to Earth. Here is a preview of the Everything Bubble popping:

Greenspan’s models–and everyone else’s–projected a rational market in which buyers continued to buy assets even as they lost money on previous attempts to “catch the falling knife.” In other words, the markets will always be liquid.

The Pavlovian “buy the dip” reflex that was so profitable on the way up now becomes the road to ruin as every pop higher gets sold. Those playing “buy the dip” are eventually wiped out, leaving only those burned and wary. Eventually people tire of losing and they give up. After losing 40%, a 4% return on a Treasury bond–brushed off in the glorious ascent as foolishly cautious–now looks pretty good.

Confidence / complacency doesn’t map the real world, in which liquidity dries up and markets go bidless. In the real world, humans panic and eventually decide to never again buy stocks or real estate, as the sting of their losses lingers far longer than their memories of glorious gains earned by riding the bubble higher.

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Authored by Lennart Wagemans via The Mises Institute,

Many claim the problem with fractional reserve banking is that it loans money into existence. It does, but under normal circumstances the money created by commercial banks disappears when loans are repaid or defaulted on, which therefore doesn’t create a permanent inflation of the money supply.

Government intervention, however, converts temporary money into permanent money through bailouts like the Troubled Asset Relief Program. They purchase loans that would have been defaulted on, preventing the evaporation of credit. When banks hold loans that are at risk of default, they face having to write them off, which would remove this part of the money supply. Bailouts turn such disappearing credit into permanent money, in effect giving banks free money.

Without government bailouts, banks would be unwilling to make loans that are unlikely to be repaid, thus limiting their willingness to loan large amounts of money into existence. This would keep the money supply more stable. At any time, some part of the money in existence would still be destined for removal through repayment. This proportion would somewhat fluctuate with economic conditions, and the temporary money would be indistinguishable from other money until a loan is repaid, but new money would not continually get loaned into existence.

When high-risk loans inevitably fail, the state steps in to purchase them to prevent banks from having to write off so many loans that they have net negative assets on their books. However, seeing the creation of toxic loans as just excessive risk-taking in reaction to having a safety net misses the larger dynamic. Praxeologically, the production of toxic loans is the rational supply of a good in high demand. These financial assets can be sold for a higher value than it costs to make them, thus their production is economically rational.

Banks, praxeologically speaking, perform the function of government contractors, producing the product “toxic financial asset.” Similar to how defense contractors produce fighter jets or fish farms produce caviar for state banquets, banks create failing loans knowing the government will purchase them. This demand ensures that banks continue to produce high-risk financial instruments. The financial sector profits from creating these products despite knowing they may become worthless. Ironically, it is their worthlessness that causes them to be valuable since that rationalizes the bailout.

Companies receiving bailout funds have not incurred typical costs, like having to maintain machinery or invest in future production, meaning they operate on much higher margins. Thus, they have much more money to offload before it loses value. They are looking for quick gains, not stable dividends, which can typically be found in assets like tech stocks and real estate, causing an unnatural inflow of funds into these sectors. This explains why tech giants grow disproportionately large; they happen to attract the interest of people with fresh money. Productivity and value creation become relatively less valuable as the economy becomes optimized toward capturing inflation investments. This process distorts market signals, misallocates resources, and perpetuates an economic environment where success ties more to financial maneuvering than genuine productive output.

Many businesses today, especially in the tech sector, function more as inflation-capturing devices than traditional profit-generating enterprises. They prioritize attracting investment from the recipients of fresh money. A second layer of these inflation-capturing suppliers grew to capture the trickle of funds from the first layer. This means the economy has geared itself to supply the businesses that get new money, instead of allocating resources to what actual people want to buy.

The closer to the inflation fan a business is, the more profitable it can be. In an economy that rewards inflationary rent-seeking, creating value has become unwise, as it only earns low-profit-margin money from stingy spenders who had to work to earn it. You will be able to confirm that practically anybody you know either receives money from an inflation source or supplies those who do. The economy has grown toward the money source, like a fungus toward a nutrient, rather than meeting real people’s needs. This means economic decisions are effectively made by what elites in palaces decide to finance, rather than the market. This is like a fascist economy where businesses were nominally private, but state planners in the capital made the production decisions.

Many superwealthy today were simply lucky initial owners of popular assets that got bid up by this unnatural inflow of new money. Attracting the money flow toward assets you own has become a more important means of wealth generation than profitable operation. And that is what all the top companies do these days, trying to dazzle investors. It is like starting a cryptocurrency and getting people to buy it so your initial coins grow in value. This explains the propensity for hype cycles. They are not trying to make a profit; they are trying to excite investors to bid up their stocks.

It is not just those who directly receive fresh money who benefit from an increase in the money supply. As everyone else’s purchasing power erodes from inflation, owners of substantial assets, like factories, are lifted relatively. They continually receive a transfer of purchasing power at the expense of everyone else. An 8% annual inflation rate — a realistic estimate considering that economic growth masks the true increase in the money supply — enhances the value of hereditary capital by 2,200 times when compounded over a century, or 220,000%. Conversely, a family without assets had their purchasing power reduced to 0.045% of its original value. This means inflation continually creates inequality. This is the real reason the rich get richer, why the world is so unequal, and why so many bad decisions are made in the internal power struggle for inflation capture.

By continually handing free money to the rich, government facilitates a transfer of purchasing power from the population to the moneyed class. This skews wealth distribution and continually impoverishes the working class. Earned money now makes up a smaller portion of the overall purchasing power available. In a free market, wealth accumulation would rely more on productive enterprise than rent-seeking, resulting in a more equitable distribution of wealth based on productivity. Work would be more highly rewarded, and even modest employment would provide substantial purchasing power, reducing the need for a welfare state. Thus, the current system perpetuates inequality that favors the rich at the expense of the broader population.

Marxists have misdiagnosed the cause of economic inequality. It’s not the extraction of surplus value from workers, as suggested by the labor theory of value, that gives capitalists unfair wealth. Instead, it’s the continuous influx of free money through increases in the money supply. Their analysis inverts the reality of how inequality arises. Karl Marx identified the natural market as the problem and called for state intervention to fix it. Thus, his cure was the disease. Interventionist policy ironically perpetuates the very inequality they decry. A culture steeped in his economic interpretation maintains an interventionist environment that benefits financial elites through inflationary policies and bailouts, perpetuating economic disparity. (Although praxeologically, this may have been his intention.)

The problem is not insufficient regulation of the financial sector. If one type of risky bet is banned, banks will find other ways to speculate or create derivatives of existing bets. You can’t ban all risky bets. Mortgage-backed securities were bets on other’s mortgages, and Enron bet on future energy prices. In a normal market, these risks would be self-correcting. Faced with losses when bets go sour, they would be unwilling to make unsafe bets. The real problem is having a system of involuntary force that transforms temporary credit into real purchasing power.

In a broader perspective, we can see distinct types of financial structures. During the industrial capitalism of the 19th century, power resided with industrial capitalists who created tangible products, driving progress and improving living standards. Today, the financial elite manipulate the allocation mechanism itself, without producing real value, having reduced industrial producers to the role of servants. This structure resembles feudal power systems, where medieval palace elites controlled society, disguised as modern financial theory.