Author: admin

When Colin Powell of all people has to appear on MSNBC to slam fake reporting you know mainstream media has lost the plot.

In a rare moment, the former Secretary of State under Bush slammed the wall-to-wall coverage of the Russian bounties in Afghanistan story as “almost hysterical”. It’s all the more awkard for MSNBC, which had him on the network Thursday to talk about it, given he’s one of those ‘never Trump’ Bush-era officials, who despite a legacy of having fed the world lie after lie to invade Iraq, has since been given “resistance hero” status among liberals.

Describing that military commanders on the ground didn’t give credence to The New York Times claim that Russia’s GRU was paying Taliban and other militants to kill American soldiers, Powell said the media “got kind of out of control” in the first days after the initial report weeks ago.

Colin Powell politely tells MSNBC that they (& many others) botched the Russian Bounty story w/ “hysterical” coverage. “Our military commanders did not think that it was as serious a problem as the newspapers were reporting & television was reporting… It got almost hysterical.” pic.twitter.com/fue42WlWbv

— Aaron Maté (@aaronjmate) July 10, 2020

“I know that our military commanders on the ground did not think that it was as serious a problem as the newspapers were reporting and television was reporting,” Powell told MSNBC’s Andrea Mitchell. “It got kind of out of control before we really had an understanding of what had happened. I’m not sure we fully understand now.”

“It’s our commanders who are going to go deal with this kind of a threat, using intelligence given to them by the intelligence community,” Powell continued. “But that has to be analyzed. It has to be attested. And then you have to go find out who the enemy is. And I think we were on top of that one, but it just got almost hysterical in the first few days.”

He also deflated the ongoing manufactured atmosphere which seeks to maintain a perpetual Washington hawkish position vis-a-vis Moscow, based on perceived “Russian aggression”.

A real world consequence of ‘fake news:’ The ratcheting up of military tensions between the two countries with enough nuclear firepower to destroy human civilization. Remember when the majority of people were terrified of stuff like this? pic.twitter.com/zj9Eo01cUm

— Bryan MacDonald (@27khv) July 10, 2020

“I don’t think we’re in a position to go to war with the Russians,” Powell said. “I know Mr. Putin rather well. He’s just figuring out a way to stay in power until 2036. The last thing he’s looking for is a war, and the last thing he’s looking for is a war with the United States of America.”

Authored by Mike Shedlock via MishTalk,

Machines cannot match human skills at processing meat but the coronavirus has forced Tyson’s hand.

Covid outbreaks at processing forced Tyson to turn to Robot Butchers.

In April and May, more than 17,300 meat and poultry processing workers in 29 states were infected and 91 died, according to the U.S. Centers for Disease Control and Prevention. Plant shutdowns reduced U.S. beef and pork production by more than one-third in late April.

The outbreak forced Tyson to try something new despite the fact that machines cannot  subtle differences in shape or color. 

Nor are sizes uniform as they are with a car.

A skilled loin boner can carve a cut of meat like filet mignon without leaving too many scraps on the bone, which have to be turned into lower-value products like finely textured beef, a low-cost trimming used in hamburger meat, or dog food, said Mark Lauritsen, an international vice president for the United Food and Commercial Workers International Union, which represents many meatpacking workers. For beef companies, that’s the difference between meat selling wholesale at $5 a pound and 19 cents a pound, he said. “Labor is still cheaper, and humans can do those skilled jobs much better than machines can,” he said.

Robot Skills

At a Tyson plant a team includes designers who once worked in the auto industry. They are now are developing an automated deboning system.

Tyson has 122,000 employees. When better robots are available, many of those workers will lose their jobs. 

Meat Processing vs Other Industries

Automation has been slow because labor is cheap despite requiring a skill set that machines cannot do easily.

But eventually machines will get smarter and faster. The communities dependent on those jobs will get hammered.

This is an interesting story from many angles, but without a doubt Covid will speed up robotics in the meat processing industry.

Accused sex-trafficker Ghislaine Maxwell has hired a fleet of powerhouse attorneys to defend her against federal charges that she procured underage girls as young as 14 for sexual encounters with deceased pedophile Jeffrey Epstein.

According to Bloomberg Law, “Maxwell will confront federal prosecutors with years of experience in New York courts and deep knowledge of the child sex-trafficking allegations surrounding her and her former lover Jeffrey Epstein.”

For her own legal team, Maxwell has assembled the mirror image — attorneys with years of experience practicing in New York courts and also with deep knowledge of the allegations against her and Epstein.

Maxwell’s hired two pairs of law partners, one from New York, the other from Denver. The New Yorkers — Christopher Everdell and Mark Cohen — were once federal prosecutors while the Denver duo — Laura Menninger and Jeffrey Pagliuca — has defended Maxwell in civil lawsuits by Epstein’s victims.

…

Everdell spent more than a decade working for the government, focusing on complex frauds, cybercrime, terrorism and international narcotics cases. In 2014, the Federal Drug Agent Foundation cited Everdell and his team for their work in the investigation and apprehension of Mexican drug lord Joaquin “El Chapo” Guzman.

Cohen served in the federal prosecutors office in Brooklyn, New York, where he was part of a team that convicted Thomas Pitera, a Bonnano organized-crime family hit man known for dismembering his victims.

Both former public defenders with experience in sex-crimes cases, Menninger and Pagliuca have represented Maxwell in civil lawsuits by women who claim she helped Epstein recruit them for underage sex, with Maxwell participating in some of the sexual assaults. –Bloomberg Law

Former Manhattan federal prosecutor Jennifer Rodgers thinks Maxwell’s approach is ‘savvy,’ and that her attorneys Menninger and Pagliuca “know all the facts, so this seems like a smart strategy.”

Prosecutors say the 58-year-old Maxwell, Epstein’s longtime ‘madam’ according to accusers, spent years as a central figure in his criminal enterprise. Epstein died last August in a New York jail cell in what was officially ruled a suicide.

Maxwell’s lawyers will have to review millions of pages of evidence the U.S. has collected over the decades. While her lawyers haven’t yet disclosed their legal strategy, they’ll have to confront the allegations as well as the emotional testimony from women who’ve come forward and accused Maxwell of engaging in and enabling their abuse.

More than a dozen women accused Epstein of abusing them but according to prosecutors, three were victims of both Maxwell and the financier. –Bloomberg Law

“It’s a very smart for the defense to hire and obtain local counsel who can guide them,” said New York criminal defense lawyer Marvyn Kornberg, adding that Everdell and Cohen “know their way around, they know people in the prosecutor’s office and they can, if they want, try to work out a deal. They can operate with knowledge about what’s going on with the other side, which can’t be done as well by lawyers who practice primarily in Colorado.”

Meanwhile, former Cohen colleague Jonathan Sack thinks Maxwell’s legal team will be in a good position to form a strategy to counter the DOJ.

“Mark is a thoughtful lawyer who will know his case, understand it and have a good sense of what the prosecution is doing and what the options are for the defense,” said Sack. “He’ll carefully assess the strengths and weaknesses in the government’s case and will have a good feeling for how a jury would view the facts as well as his client.”

Authored by Caitlin Johnstone via Medium.com,

A new Reuters/Ipsos poll has reportedly found that a majority of Americans believe the completely discredited narrative that the Russian government paid Taliban-linked fighters to kill the occupying forces of the US and its allies in Afghanistan.

“A majority of Americans believe that Russia paid the Taliban to kill U.S. soldiers in Afghanistan last year amid negotiations to end the war, and more than half want to respond with new economic sanctions against Moscow, according to a Reuters/Ipsos poll released on Wednesday,” Reuters reports.

“Overall, 60% of Americans said they found reports of Russian bounties on American soldiers to be ‘very’ or ‘somewhat’ believable, while 21% said they were not credible and the rest were unsure,” says Reuters.

Most Americans believe Russia targeted U.S. soldiers, want sanctions in response, Reuters/Ipsos poll shows https://t.co/NWvdxquRMK pic.twitter.com/t18vMlEovx

— Reuters (@Reuters) July 8, 2020

Those 21 percent are objectively correct: the story is not credible, and it’s not even close. Gareth Porter shows in The Grayzone how the “Bountygate” narrative is so utterly baseless that even US intelligence agencies have dismissed it, Joe Lauria of Consortium News explains how it doesn’t make any sense on its face, and FAIR’s Alan MacLeod breaks down the appalling journalistic malpractice that went into circulating this incredibly thinly sourced story to the mainstream public.

The story advances no solid facts or verified information. What it does advance is pre-existing imperialist agendas like remaining in Afghanistan, killing the last of the remaining nuclear deals with Moscow, and manufacturing public support for new Russia sanctions.

And yet a majority of people believed it, and still believe it.

The narrative that Russia paid Taliban fighters to kill occupying forces is now regarded as an established fact in many key circles, despite being backed by literally zero facts.

If people were as objective and adept at critical thinking as we tend to believe we are, the mass media’s unconscionable facilitation of a brazen cold war psyop would by itself have killed off all public trust in the institution of mass news reporting. But people are not as objective and adept at critical thinking as we tend to believe we are. People have many cognitive biases which distort our ability to objectively process information and understand events, including one which causes us to believe something is true just because they’ve heard it said multiple times. This makes us easily susceptible to mass media propaganda, where our encounters with daily news headlines can shape our perception of what’s going on in the world regardless of whether or not those headlines are backed by actual facts.

“Bounty-Gate” is the Pentagon’s main chance to keep the U.S. war in #Afghanistan going for a while longer. Push-back against those in Congress exploiting this fraud is needed to deprive the Pentagon and its allies from succeeding in this scheme. https://t.co/OUPC6IpUgc

— Gareth Porter (@GarethPorter) July 8, 2020

This latest poll is a perfect example of how the plutocrat-owned media manipulate public opinion in the interest of establishment agendas using brazen propaganda campaigns, but it is just the most recent example. Over and over and over again we see public perception of what’s going on distorted by lies inserted into their minds by the corporate news media, like when half a year after the invasion of Iraq seven in ten Americans believed Saddam Hussein was responsible for the 9/11 attacks. All it took to trick them into believing this and supporting the invasion was repeatedly mentioning 9/11 and Saddam in the same breath, despite there never being any evidence whatsoever for any such thing.

This kind of manipulation is not rare, it is ubiquitous and ongoing. Every single day the plutocratic media are putting ideas in people’s minds which favor the establishment upon which said plutocrats have built their kingdoms, normalizing the insane status quo and manufacturing support for agendas which bolster it. This is not some delusional conspiracy theory, it’s a well-documented fact to which many mainstream journalists have testified.

As long as this remains the case in our society, democracy cannot exist in any meaningful way. As long as a loose alliance of plutocrats and government operatives are able to consistently manipulate the way a critical mass of people think and vote, then you cannot rightly say that the people are in charge of the fate of their nation. If the majority is consistently in alignment with the plutocrats whose outsized media influence enables them to dominate the public narrative, then voting necessarily reflects the will of those plutocrats, not the people.

Even if you changed everything else that is wrong with the current system, nothing would change if the plutocratic class retained its ability to manipulate the way people think and vote. You can fix America’s garbage election integrity, end gerrymandering, even get money out of politics, but as long as the plutocratic class is still using its wealth to manipulate public thought in support of its interests, people would keep voting the way they’re manipulated to vote.

Manipulation is a key ingredient in any long-term abusive relationship, because people don’t tend to stay in abusive situations unless they are manipulated into doing so. This is true whether you’re talking about romantic partnerships, governments, or globe-spanning power structures. We don’t use the power of our numbers to end this abusive relationship where we are at the whim of crushing austerity, exploitative neoliberalism, endless war and rapacious ecocide, because we’re being manipulated into staying.

And, just like with any other abusive relationship, there comes a time to leave before it’s too late. That time is now. We can begin by expanding awareness of what’s really going on, both inwardly in ourselves and outwardly by sharing truthful information with others. In so doing, we stand a chance at making ourselves impossible to propagandize effectively and using our strength in numbers to force real change.

*  *  *

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On the week, Nasdaq has soared higher once again, notably divergent from the rest of the markets with Small Caps actually down on the week…

Which has sent the ratio of Megacap-Tech to Small Caps back near a record high…

Source: Bloomberg

Nasdaq is up 8 of the last 9 days and 17 of the last 20 days – this is easy!!!

Interestingly, today saw the week’s performances flip with Small Caps surging as Nasdaq slipped. Markets were sold at the cash open then immediately ramped higher…

Spot the odd market out (Chinese stock speculation re-erupted this week)…

Source: Bloomberg

Median US stocks continue to diverge significantly from the handful of megatech stocks driving the Nasdaq ever higher…

Source: Bloomberg

Notably Defensives and Cyclicals have rallied tick for tick higher since the European close yesterday – very unusual moving together…

Source: Bloomberg

And then there’s TSLA – up from $1000 to $1500 in 7 days…

And who’s buying?

TSLA’s now as big as JPMorgan… and TSLA is now bigger than Ford + GM + BMW + Daimler + Volkswagen combined

Source: Bloomberg

Treasury yields touched a two month lows today…

Source: Bloomberg

Then ripped back higher with 5Y and 2Y unch on the week, the long-end still notably lower (and the curve flatter)…

Source: Bloomberg

The Dollar ended lower on the week, chopping around in a tight range…

Source: Bloomberg

Cryptos were all higher on the week, led by Ripple…

Source: Bloomberg

Copper was the week’s high-flier as China erupted in speculative excess. Oil was down…

Source: Bloomberg

Big intraweek drop in WTI was bid back above $40…

Silver held above $19…

And gold clung to $1800…

Spot Gold reached back to its highest since 2011…

Finally, you have to laugh right…

Bonds ain’t buying it…

Source: Bloomberg

Because fun-durr-mentals…

Source: Bloomberg

Authored by James Rickards via The Daily Reckoning,

I’ve argued that we’re in a new depression. The depth of the new depression is clear. What is unclear to most observers are the nature and timing of the recovery.

The answer is that high unemployment will persist for years, the U.S. will not regain 2019 output levels until 2022 and growth going forward will be even worse than the weakest-ever growth of the 2009–2020 recovery.

This may not be the end of the world, yet it is far worse than the most downbeat forecasts. Some sixth-grade math is a good place to begin the analysis.

Make 2019 economic output 100 (the actual figure is $21 trillion; “100” is 100% of that number, a convenient way to measure ups and downs).

Assume output drops 40% in the second and third quarters of 2020. (Many estimates project larger drops; 40% is a plausible if conservative estimate.)

A 40% drop for six months equals a 20% drop for the full year assuming the first and fourth quarters are flat on net.

A 20% drop from 100 = 80 (or $4.2 trillion of lost output).

Now let’s see what happens if we estimate back-to-back growth years of 10% in 2021 and 2022…

First, is 10% growth even a reality? Past history says no.

Since 1948, U.S. annual real growth in GDP has never exceeded 10%.

In fact, post-1980 recoveries averaged 3.2% growth. And since 1984, growth has never exceeded 5%. So 10% is a very optimistic forecast to begin with.

If our new base is 80 (compared with 100 in 2019) and we increase output by 10% in 2021, this brings total output to 88.

If we enter 2021 with a new base of 88 and add another 10% to that, we come to 96.8 in total output by the end of 2022.

Here’s the problem.

Using 100 as a yardstick for 2019 output and assuming an unrealistic back-to-back years of 10% real growth in 2021 and 2022, one still does not get back to 2019 output levels.

The hard truth is 96.8 is less than 100.

It would take the highest annual real growth in over 40 years, sustained for two consecutive years, to get close to 2019 output levels.

It’s far more realistic to assume real growth will be less than 10% per year. That puts the economy well into 2023 before reaching output levels last achieved in 2019.

This is the reality of this depression.

It’s not about continuously declining GDP. A depression is an initial collapse so large that even years of high growth won’t dig the economy out of its hole.

Analysts and talking heads debate the recovery’s strength using letters that mimic the shape of a growth curve as shown on a graph.

• A V-shaped recovery goes down steeply and back up steeply to get output back where it started in a relatively brief time.

• A U-shaped recovery goes down steeply, does not grow materially right away and then makes a sharp recovery.

• An L-shaped recovery goes down steeply and is followed by low growth for an indefinite period of time.

• Finally, the W-shaped recovery goes down steeply, bounces back quickly and then falters for a second time before finally recovering and getting back to earlier levels of output and growth.

The post-2009 recovery produced only 2.2% growth. It was an L-shaped recovery.

It was a real recovery, yet the output gap between the former trend and the new trend was never closed.

The U.S. economy suffered over $4 trillion of lost wealth based on the difference between the former strong trend and the new weaker trend.

That lost wealth was a serious problem for the U.S. before the New Great Depression.

Now the prospect is for even lower growth than the weak post-2009 recovery.

The new recovery, far from the 10% growth discussed in the example above, may only produce 1.8% growth, even worse than the 2.2% growth before the pandemic.

It’s another L-shaped recovery, the second in a row. Now the bottom of the L is even closer to a flat line and the output gap compared with the long-term trend is even greater.

There will be no V-shaped recovery. There are no green shoots despite what you hear on TV.

We’re in a new Great Depression and will remain so for years.

With every passing day, the bizarre freakshow that was once known as the “market” gets even more bizarre.

And we use the term “market” only in its loosest, legacy sense, one where it represented more than just the centrally-planned intentions of a few central bankers and politicians. Why? Because as BofA’s CIO Michael Hartnett reminds us in his latest Flow Show report, the disconnect between macro and markets has never been greater – i.e., they have never been more broken – but that is to be expected for the following three reasons:

1. Markets rationally being “irrational”: government and corporate bonds have been fixed (“nationalized”) by central banks, so why would anyone expect markets to connect with macro, why should credit & stocks price rationally.
2. Markets leading macro: policy makers (see China this week) know higher asset prices necessary condition for macro recovery (Wall St assets are 5.6x size of US GDP)…
   

   …V-shape recovery on Wall St leading V-shape recovery on Main St (see PMI’s & housing activity); gasoline demand good US mobility signal, up sharply to 9mn barrel/day from spring lows, watch to see if virus again negatively impacts economy.

3. Markets rationally pricing-in Max Liquidity, Minimal Growth backdrop, as they have done for 10 years; of 3042 stocks in MSCI ACWI currently 2141 >20% below their all-time highs, i.e. in a bear market.

Also consider this: if the S&P500 (3230 on Jan 1st) was just “tech, health care, Amazon, Google” it would now be 4173 , and if the S&P were “everything else” it would be 2924. No secret here, but US tech outperformance over US banks past 6 months biggest since 1999 tech bubble & 2008 GFC.

So while markets may be broken – as one would expect in a world where central banks have taken over all price discovery – three key trends remain and are totally unchanged for 2020. Per BofA:

• Central bank liquidity drives asset prices;
• Credit prices drive equities;
• Sellers’ strike in credit & tech mirrored by buyers’ strike in value stocks & banks.

Some other observations from BofA’s CIO on what was once a “market”:

Cash & gold the big inflow winners in 2020;

Gold inflows on cumulative basis at all-time high:

Discounting all-time high in price; largest inflow to China funds ($6.1bn) since Jul’15 (and 2nd inflow largest ever):

So with stocks now fully mandated and no longer discount the future or respond to fundamentals or news, does this mean that stocks will rise indefinitely until eventually the population burns down the Marriner Eccles building? According to Hartnett the answer is now, and while stocks see bullish drivers of Positioning & Policy into the summer, these will peak just as the autumn begins, at which point bulls will require profits to surprise to upside allowing rally in risk assets to broaden into HY, value stocks, small cap and so on; At the same time, bears will argue that big 2020 underperformance of banks a signal of no economic hope & sinister repeat of 1999 & 2008; According to Hartnett, these are the catalysts required to boost banks:

1. Vaccine: most likely catalyst for big GDP & EPS upward revisions H2 and flip from growth to value.

2. Fiscal: 2020 policy stimulus has been massive ($18.5tn of which $10.5tn in fiscal & $8.0tn in monetary = 21% global GDP) (Chart 5) and coordinated (1st time in years monetary & fiscal, like two wheels of a bicycle, moving quickly in same direction working together); banks the natural hedge for fiscal success (key barometer to watch = small business confidence surveys, e.g. NFIB) in stimulating animal spirits.

3. Politics: rising probability of political “blue wave” i.e. Democrats winning White House, Senate, Congress (latest Oddschecker.com probabilities…Biden win 57%, Real Clear Politics probability…Dem Senate 62%); Table 2 shows annualized returns following 7 out of 21 “blue waves” since 1928…returns, more obviously in bonds, below historic averages after Dem “clean sweep” but outperformance of value over growth more pronounced; “Blue Deal” fiscal stimulus in 2021 via infrastructure, student debt forgiveness, health care spending positive value & banks.

4. Risk-taking: bank deposits up $2.2tn since end-Feb but bank loans up only $0.5tn vs cash/reserves up $1.3tn and UST+MBS holdings up $0.3tn (Chart 6); bank stocks tied-at-the-hip to interest rates (Chart 7).

If and when Fed/ECB/BoJ can ever raise interest rates global banks will become the instant leadership; ironically introduction by Fed of Yield Curve Control in Sept may in typical contrarian fashion trigger a rally in banks; but the other irony is that sustained bank performance first requires risk-taking to boost economic growth & interest rate expectations in 2021 & 2022; until then bank stock bulls will focus on China (has led virus, market & macro recovery) & Europe (start of fiscal stimulus).

When we last looked at real-time consumer spending data one month ago, we saw a stunning rebound in Bank of America credit and debit card spending trends, with total card spending ex-autos essentially recovering pre-covid levels by early June.

No doubt, a big part of this was due to the surge in Personal Income since the start of the current recession, which as we explained earlier was a function of the extremely generous fiscal stimulus which meant that on a per capita basis, claimants received roughly $788/week ($41k annualized) on average, well above the usual amount of roughly $300 in a normal labor environment ($15-$16k annualized).

Unfortunately, both this massive government handout and this impressive spending spree are now is coming to an end, and as JPM writes, in data through Sunday, July 5, the bank’s tracker of spending by a panel of 30 million Chase credit and debit cardholders remains below its recent peak on June 22, and it appears to have flattened out at this lower level as COVID-19 spreads rapidly in some parts of the country.

What is notable, is that contrary to widespread anecdotes that sunbelt states have led the slowdown in spending, JPM notes that this modest pullback in nationwide spending has not been driven by a sharp pullback concentrated in states where the virus has spread rapidly, but instead by modest pullbacks that are widespread across states. On the other hand, this pattern raises the concern that behavior has not changed enough to stem the spread of the virus in the hardest-hit states.

To be sure, holidays like July 4 can make it difficult to distinguish signal from noise in high-frequency data, and some methods of calculating over-year-ago spending comparisons have naturally swung dramatically in recent days given the timing of the holiday. But even when looking through these swings, spending has begun to flatten out at a somewhat lower level than the peak seen on June 22.

JPM also points out that the pullback in spending since late June has been widespread across states. There is some correlation between the spread of the virus over the last two weeks and the pullback in spending, but the correlation has been modest so far. This pattern suggests that there are some cautious consumers in all states who have pulled back on spending as the virus has resumed its spread, but that the rapid spread of the virus in certain states has not produced a significant change in behavior by the entire population in these states.

To be fair, there are somewhat larger recent declines in spending in buckets likely to be most affected by the spread of the virus. For example, “card-present” (essentially in-person) spending has fallen more in Texas than in New York, and spending by Texas millennials—which had returned to year-ago levels by mid-June— has fallen more than by New York millennials. Still, the bank’s economists are most struck by the relatively small differences in changes in behavior across these groups in recent weeks.

Meanwhile, and as we first pointed out last week, JPM has observed a correlation between spending levels and the subsequent spread of the virus three weeks ago, and it has remained strong over the last three weeks. Indeed, to date the bank finds that states with higher levels of spending—especially card-present restaurant spending—have seen more rapid growth of the virus in subsequent weeks.

To summarize, JPM has documented two important facts about the interaction between spending and the spread of the virus—higher spending levels have predicted the spread of the virus, but spending levels have not fallen much in the states where the virus has spread most rapidly recently.  These two facts raise the concern that behavior in the hardest-hit states has not changed enough to stem the spread of the virus going forward.

Still, it is possible that other behavioral changes that we cannot measure could stop the spread. As one example, it is possible that the relationship between restaurant spending and virus spread is just a correlation, and that it could possibly be driven by other behaviors like going to bars or parties which are correlated with restaurant spending. With bars now closed again in Texas, Florida, and southern California, it is possible that the spread of the virus will slow even as restaurant spending remains high. But the facts shown in JPM data do not present much reason for optimism.