Category: zerohedge

Following the earlier this month Biden-ordered full troop exit from Afghanistan slated to be completed by Sept.11 of this year, the White House on Thursday announced the military withdrawal has now officially begun. 

While traveling aboard Air Force One, the deputy White House press secretary Karine Jean-Pierre confirmed to reporters that “A drawdown is underway,” but also added the caveat that, “While these actions will initially result in increased forces levels, we remain committed to having all of US military personnel out of Afghanistan by September 11, 2020.”

“The President’s intent is clear, the US military departure from Afghanistan will not be rushed.… It will be delivered and conducted in a safe and responsible manner that ensures the protection of our forces,” Jean-Pierre explained.

Previously Pentagon officials have described “increased forces levels” as constituting the security and personnel required to oversee a safe logistical exit from the country that includes a vast amount of military equipment and defense facilities that have accumulated over the course of the two-decade long war and occupation. 

CNN details that “Fewer than 100 troops, along with military equipment, have been moved largely by aircraft to execute President Joe Biden’s order to begin the withdrawal process no later than May 1, according to several US defense officials.”

“There have been about 2,500 US troops in Afghanistan that are openly acknowledged, plus several hundred additional special operations forces. All of them will depart under the President’s orders,” the report adds. NATO at the same time is signaling a full draw down within months.

It’s likely these slew of new statements Thursday are intended to seek to assure the Taliban that an exit is indeed in motion. But Saturday could see a proverbial all hell breaking loose given May 1 is the deadline (from the Taliban’s perspective) based on the prior Trump admin-Taliban deal that was inked in February 2020.

“There is remarkable consensus within the region and the international community against a military takeover by the Taliban.”

I’m guessing the Taliban doesn’t care. https://t.co/hKUEd1qUiK

— Max Abrahms (@MaxAbrahms) April 28, 2021

The Taliban has vowed to strike at any American targets should troops remain in the country after that date. US leaders are now worried that the Taliban could hit hard just as the Pentagon is in the midst of its draw down; and in the medium to longer term it’s expected that entire major cities could once again fall to the hardline Islamic fundamentalist group.

To protect the exiting US troops, over the past weeks the US has sent additional B-52 bombers to the region to safeguard the pullout, along with the presence in regional waters of the USS Eisenhower aircraft carrier. 

Many pundits ultimately see this whole spectacle as just a recipe for continuing to stay far past Biden’s anticipated Sept.11 exit, given there’s a seeming endless number of ways this could go wrong. So it’s worth asking: will we still be seeing similar headlines of “drawdown has begun” a few years from now as the prior pattern has shown when it comes to America’s longest ever running war?

Authored by Glenn Greenwald and Siraj Hashmi via Outside Voices Substack, (emphasis ours)

Biden’s claim that the Capitol Riot was the “worst attack on our democracy since the Civil War” is ahistorical garbage…

As President Biden wrapped up a 65-minute joint address to Congress to mark his administration’s first 100 days, what was shared in the lead-up to his speech sowed discord over the entire affair:

Biden to refer to Jan 6 insurrection as “the worst attack on our democracy since the Civil War” in speech tonight. pic.twitter.com/rW6L2ybDRQ

— Jim Acosta (@Acosta) April 28, 2021

Sure enough, the President delivered on this. Opening his address, Biden stated, “I took the oath of office — lifted my hand off our family Bible — and inherited a nation in crisis. The worst pandemic in a century. The worst economic crisis since the Great Depression. The worst attack on our democracy since the Civil War.”

Yes, the January 6th siege on the U.S. Capitol building, often alluded to as an “insurrection,” was an embarrassing day for our country. But to suggest that it was “the worst attack on our democracy since the Civil War” is disingenuous at best. At worst, it’s a malicious attempt to whitewash the history of attacks carried out both by and on the government that have had much more catastrophic results.

Apart from the September 11th terrorist attacks that targeted the country’s financial system, Al Qaeda terrorists attacked the defenders of our democracy when a hijacked American Airlines flight 77 flew into the Pentagon. Were it not for the heroes who resisted against the hijackers of United flight 93, Al Qaeda’s attempt to fly a commercial airline into the White House or U.S. Capitol building would have come to fruition. Despite being a horrific tragedy, 9/11 has been dismissed by some as being explicitly a “foreign attack,” not one from within.

So, let’s explore attacks on our democracy from within.

Following 9/11, the Bush administration, in conjunction with Congress, expedited the passage of the Patriot Act, a wide-sweeping national security law that infringed on the civil liberties of every American in the name of fighting terror. The Fourth Amendment became a relic of the past as the government’s power to surveil and spy on its own citizens reached its peak. Individuals who shared names with persons of interest or suspected terrorists, including U.S. citizens, landed on government no-fly lists, restricting their right to freely move about the country for dubious reasons and with no due process or recourse. And even worse, many had their right to due process eviscerated when they were detained by the newly-created Department of Homeland Security and found themselves at Guantanamo Bay without even being charged with a crime.

Yet this is not the first time that American citizens, or even permanent residents for that matter, had their rights infringed upon by the government.

As the FBI was formed in the early 20th century, Americans whose ideologies were at odds with the government’s interests were often targeted by the agency’s longest-serving director, J. Edgar Hoover. In the eyes of the FBI Director, Dr. Martin Luther King Jr. was a suspected communist given his ties to Stanley Levison, whose suspected pro-communist activities were monitored by the FBI in the 1950s. Although Dr. King has been viewed as one of the most consequential leaders in American history due to his role in the civil rights movement, at the time, Hoover and many in the FBI viewed him as a threat to our democracy, ushering in communism under the guise of “civil rights.” The FBI infamously blackmailed Dr. King by sending him a letter advocating he commit suicide. 

J Edgar Hoover (1895 -1972) points his finger while testifying before the House on Un-American Activities Committee, Washington, DC. (Photo by Hulton Archive/Getty Images)

The Red Scare was so severe in the United States that the government actively sought to chip away at Americans’ First Amendment rights to prevent the spread of such ideas. And through the Lavender Scare in the early 1950s, thousands of people were forced out of government service for simply for being suspected of being homosexual. 

When the United States entered the First World War, President Woodrow Wilson signed the Espionage Act of 1917 into law, which then gave way to the Sedition Act of 1918. These two laws worked in conjunction to strip away the First Amendment rights of every American and demand undying fealty towards the U.S. government. Expressing even the slightest bit of criticism of the U.S. or associating with groups like the Communist Party could result in, at the very least, a government wiretap, and, at worst, a hefty prison sentence and possible execution. In the same token that President Franklin Roosevelt interned approximately 120,000 Japanese Americans during World War II in fear that they might side with the Japanese Empire, the Espionage and Sedition Acts under President Wilson explicitly targeted German-born American residents during World War I, with over 2,000 arrested and sent to internment camps.

While the FBI has had its fair share of attacking our democracy, its intelligence counterpart, the CIA, has interfered in the affairs of other countries countless times. As Americans decry countries like Russia, China, and Iran for interfering in our electoral process, the CIA has had a hand in interfering in the affairs of well over a dozen nations. For as many autocratic regimes as the CIA tried to topple in places like Cuba, Indonesia, and the Dominican Republic, the CIA had a hand in the overthrow of democracies as well in countries like Iran, Chile, and Guatemala.

For decades, J. Edgar Hoover — the notorious FBI Director after whom the law enforcement’s DC headquarters continues to be named — assaulted democracy in every way imaginable. Hoover kept dossiers on political leaders to enforce his will over them. His agency tried to blackmail Dr. Martin Luther King, Jr. into suicide with threats to expose alleged adultery. FBI agents routinely infiltrated anti-war and civil rights groups as part of its COINTELPRO program and other similar domestic spying activities. And the NSA notoriously spied on millions of American citizens without warrants.

There is a strong argument to be made that the CIA is responsible for interfering in American democracy, too.

The first impeachment of President Donald Trump in 2019 occurred when a whistleblower within the CIA filed a complaint after Trump had a call with Ukrainian President Volodymyr Zelensky in which Trump asked his Ukrainian counterpart to investigate his political rival, Joe Biden, in exchange for $400 million in military aid.

But it didn’t end there.

The story of the Russian Bounty program on U.S. troops in Afghanistan that broke publicly in the summer of 2020 made a significant impact in tipping the scales during the 2020 presidential election. The CIA produced the initial intelligence assessment in 2019, which later broke publicly in the summer of 2020, further cementing the perception that Trump was in the pocket of Russian President Vladimir Putin––a claim that was exacerbated when then-President Trump dismissed the allegations outright, calling it “fake news.” However, in April 2021, Trump would be vindicated as the U.S. government revealed that the Intelligence Community had “low to moderate confidence” in the intelligence assessment. In other words, there was little evidence to prove that it was real.

On top of these government abuses that took place on a wide scale impacting every American, there was a long-drawn-out period since the Civil War that impacted millions of Americans that has had consequences that last to this day: Jim Crow.

Following the Civil War and Reconstruction, the implementation of Jim Crow laws in Southern former slave states not only segregated black people from the white population, but also barred them from fully participating in society as equal members. Through policies like poll taxes, literacy tests, and increased residency requirements, black people had their right to vote stripped away, essentially removing them from the political process, keeping them further ostracized from society. It was authoritarianism in the most sinister manner, targeting a racial group that was perceived to be subhuman to their white counterpart, all in the name of protecting democracy.

A young boy drinks from the ‘colored’ water fountain on the county courthouse lawn, Hallifax, North Carolina, April 1938. (Photo by John Vacha/FPG/Getty Images)

Despite all these examples in which our democracy––and the democracies of other nations––were attacked with our government playing the central antagonist, there were a half dozen times where the sitting U.S. president and, by extension, our democracy were attacked from within. Since the Civil War, four U.S. presidents were assassinated (Lincoln in 1865, Garfield in 1881, McKinley in 1901, and Kennedy in 1963) and two presidents were injured in assassination attempts (Roosevelt in 1912 and Reagan in 1981). These were six attacks on the duly elected leaders of the people of the United States. Not only does changing the leadership alter the trajectory for a nation, but due to its status, it has lasting effects for the rest of the world.

If President Biden is to suggest that the siege on Capitol Hill on January 6th was “the worst attack on our democracy since the Civil War,” then we should demand that our leaders be honest about what does and does not constitute an “attack on our democracy.” Attacks on our democracy aren’t just reserved for storming the U.S. Capitol and targeting U.S. lawmakers with historically low approval ratings. If that’s the case, that a certain set of rules only applies to the political elite and not the people, then it’s safe to say that we do not truly live in a democracy.

For the 4th time in the last 5 months, China’s Services and Manufacturing PMIs missed expectations in April.

China’s official manufacturing purchasing managers index declined to 51.1 in April from 51.9 in March (and well below the 51.8 expectations), according to data released Friday by the National Bureau of Statistics.

The non-manufacturing gauge, which measures activity in the construction and services sectors, dropped to 54.9 (from 56.3 in March), compared to 56.1 projected by economists.

While the trend is not the friend of the Chinese economy, we do note that both PMIs remain above the 50-level demarcating an expansion in output. The reading has now remained in expansionary territory for 14 straight months.

The subindex measuring production fell to 52.2 from 53.9 in March. Total new orders also dropped to 52 from 53.6 in March, and new export orders fell from 51.2 in March to 50.4, but stayed in the expansionary territory for two straight months.

Surveyed manufacturers said chip shortages, international logistics jams and rising delivery costs have weighed on their operations, the statistics bureau said.

The non-manufacturing PMI again outpaced manufacturing, supporting the view of the services sector is catching up and manufacturing activity peaking.

The one potential silver lining, looking ahead, is that China’s economy could be about to get a boost as Deutsche Bank notes that from June onward, the credit impulse -on a YoY basis – should mechanically rebound thanks to base effects. More importantly, as the chart below shows, higher frequency leading indicators are also consistent with a recovery in the credit impulse.

Indeed, recent easing of financial conditions suggests the credit impulse should converge towardsa zero. In turn, this would be consistent with stable PMI manufacturing new orders. And even more notably, for those paying attention to supply chain disruptions and inflationary impulses worldwide, a stabilization of China’s manufacturing is key given that it tends to lead global manufacturing and is a key driver of global inflation expectations.

A Paris Mayor who was raised in a devout Muslim household by Algerian immigrant parents threw her support behind a controversial letter by current and former military chiefs who said that if nothing is done about the “laxist” policies on radical Islam, it would require “the intervention of our comrades on active duty in a perilous mission of protection of our civilizational values.”

“What is written in this letter is a reality,” Mayor Rachida Dati of Paris’ 7th arrondissement told France Info radio. “When you have a country plagued by urban guerrilla warfare, when you have a constant and high terrorist threat, when you have increasingly glaring and flagrant inequalities … we cannot say that the country is doing well.“

“The hour is grave, France is in peril,” reads the letter, adding that failure to act against the “suburban hordes” would lead to “civil war” and deaths “in the thousands.”

The letter was signed by hundreds of retired soldiers, including 20 retired generals, as well as several active duty members of the military – 18 of whom are to be fired, the country’s armed forces chief confirmed on Thursday, according to the Daily Mail.

“The police have become a target for terrorists” said Dati, 55, who served as justice minister under Nicolas Sarkozy from 2007 to 2009. Her comments follow the fatal stabbing last week of a policewoman in the southwest Paris neighborhood of Rambouillet. The suspect, a Tunisian national, had been watching jihadist propaganda videos prior to the attack.

“I am afraid that the police will break down one day,” Dati continued, adding “And if they crack, we go well beyond the disintegration of society.”

Dati’s comments come as France’s Chief of Defense, François Lecointre, called the letter “absolutely revolting,” adding of the active-duty signatories: “I hope that their automatic retirement will be decided.”

“This is an exceptional procedure, which we are launching immediately at the request of the Minister of the Armed Forces,” he added. “These general officers will each pass before a higher military council. At the end of this procedure, it is the President of the Republic who signs a decree expelling them.”

President Macron’s government strongly condemned the letter, which was published on the 60th anniversary of a failed coup d’etat by generals opposed to France granting independence to Algeria, its former North African colony.

Prime Minister Jean Castex said the letter by military figures was ‘against all of our republican principles, of honour and the duty of the army’.

And Florence Parly, the Defence Minister, said: ‘This is unacceptable. There will be consequences, naturally.

The soldiers behind the letter were all said to be anti-immigration activists with racist views and strong ties to the far-Right Rassemblement National (National Rally).

The lead signatory was Christian Piquemal, 80, who commanded the French Foreign Legion before losing his privileges as a retired officer after being arrested while taking part in an anti-Islam demonstration in 2016. –Daily Mail

Supporting the signatories was Marine Le Pen, the Rassemblement National leader, writing in response to the letter: “I invite you to join us in taking part in the coming battle, which is the battle of France.”

Earlier this week, we highlighted an interesting article in the FT this according to which China’s population was set to decline for the first time since the 1950s when the national census data is released soon. However, in response to the report which prompted widespread speculation over implications of this demographic inflection point, the Chinese National Bureau of Statistics (NBS) best known for faking every possible piece of data, released a statement this morning saying that the population continued to grow in 2020 ahead of the official release. Watch for 2016-19 revisions though.

So although a decline was avoided, the NBS recently said that China’s demographics “has reached an important turning point”.

Here Deutsche Bank’s Jim Reid reminds us that using UN population forecasts, China’s population is predicted to peak in 2031 at around 2% above 2019 levels, so expectations were already that the population was plateauing. With normal margins of error the peak could come notably before (maybe even now) or indeed after. For the record, on the UN’s data, India’s population is expected to climb above China’s in 2027 – to be the largest in the world – and will be 17% above by 2050.

More interestingly, the working-age population peaked in China around 2015 (2013 using NBS data) having surged in the globalization era. In the forty years to 2015 this increased c.97% but is predicted to fall c.-12% over the next 20 years.

As Reid concludes, we can only speculate whether this changes the global inflation outlook. Over the last few decades the surge of global workers and the integration of originally very cheap Chinese labor into the global system has had a very depressing impact on inflation. But as workers become relatively more scarce across the world, including the now much higher-paid Chinese, not to mention with countless supply chains permanently frayed or broken, will there be more pricing power for labor in the years ahead?

China successfully launched a key module of a new space station Thursday, a mission that shows the country’s ‘space dream’ of dominating low Earth orbit is quickly becoming a reality. 

China National Space Administration announced Thursday morning that the Long March-5B Y2 rocket lifted off in the southern province of Hainan with the core capsule of the new Tiangong space station. 

Historic moment! Just now #China launched the Long March-5B Y2 #rocket, sending the #Tianhe天和 core module of China’s #SpaceStation into the #space. Tianhe module is China’s first space station core module and the largest spacecraft China has ever made. pic.twitter.com/ey9GYCKOao

— Ambassador Deng Xijun (@China2ASEAN) April 29, 2021

The next-generation space station will take 18 months to build in low Earth orbit, with a completion year sometime in 2022. The space station is designed as a scientific research outpost for China through the end of the decade since it has been excluded from using the International Space Station (ISS). 

When completed, the Tiangong space station will be approximately one-fifth the mass of the ISS and weigh about 90-metric-ton in the shape of a T. The size will be comparable to the Russian Mir space station, which operated from 1986 to 2000. 

“We did not intend to compete with the ISS in terms of scale,” Gu Yidong, chief scientist of the China Manned Space program, was quoted by Scientific American as saying.

The ISS recently celebrated its 20 years in operation with an end of lifespan by 2030. Already, the space station has shown signs of wear and tear amid a series of malfunctions, including air leaks. 

In early April, Russia said it would pull out of the ISS in 2025 and build a space station by 2030 if Russian President Vladimir Putin provides funding. If not, Russia could soon find itself working with the Chinese in space.

President Xi Jinping has touted China’s space dream as he was cited by state media as saying it’s the path to “national rejuvenation.” 

China has recent made no secret of its space ambitions. From the moon to Mars, the country has recently landed multiple spacecraft on these extraterrestrial bodies.

Meanwhile, the US is doing the same as a space race between both countries heats up. 

Authored by Robert Bridge via The Strategic Culture Foundation,

In what just might be the most misguided attempt at ‘utopian’ living ever conceived, progressive Democrats continue to demand the defunding and disbanding of police forces in cities around the country. Yet, like a doctor that has made the wrong diagnosis on a patient, such a radical idea will not bring peace and security to America’s ailing neighborhoods. In fact, it will make them virtually unlivable.

The United States desperately needs a national debate on the root causes of police violence, which the political left has prematurely and wrongly attributed to “systemic racism.” Missing from the bigger picture are questions pertaining to economic hardship, broken homes, drug abuse and street gangs – and perhaps most importantly of all, poorly trained police – as just a few of the contributing factors that have placed law enforcement between a rock and a hard place.

For every Derek Chauvin, the former Minneapolis police officer charged in the murder of George Floyd, there are dozens of cops like Nicholas Reardon, who was forced to make a split-second decision after a Black girl, Ma’Khia Bryant, 16, attempted to stab another teenager. Reardon, who shot and killed Bryant, has found himself something of a celebrity not for potentially saving the life of a young girl, but for being the fresh face of “white supremacy.”

NBA star Lebron James led the charge against the cop when he unconscionably tweeted to his 46.5 followers a photograph of Nicholas Reardon with the caption, “YOU’RE NEXT, beside the emoji of an hourglass. Some people may consider that a threat.

Facts do not matter. Only the narrative matters. pic.twitter.com/7yAp5X42Uu

— Ben Shapiro (@benshapiro) April 22, 2021

In another incident, Kim Potter, a 26-year department veteran of the Minneapolis police force, shot and killed Daunte Wright, 20, just blocks away from where George Floyd was killed. The similarities don’t end there. As was the case with Floyd, Daunte Wright, for whom the police had an outstanding warrant, struggled with the police and even managed to make it back inside of his vehicle before being fatally shot. Potter, who appears to have mistaken her gun for a taser in the chaos that ensued, has been charged with second-degree manslaughter in Wright’s death.

In yet another highly publicized incident, Adam Toledo, a 13-year-old Latino boy, was shot and killed last month by Chicago Police Department officer Eric Stillman following a foot chase down a dark alley. Footage from Stillman’s body cam appears to show Toledo dropping a handgun moments before turning and raising his hands, immediately prior to being killed.

Is it fair to blame the phantom of “systemic racism” for these and other killings that occasionally occur between civilians and the police? That would seem ludicrous, yet that is how these tragic incidences are being framed in the media and by civil rights groups, like Black Lives Matter, who continue to bang the drum for disbanding the police. Would it not make more sense to fight not only for better training in the police ranks, but for getting the word out to the youth that resisting arrest is not the best strategy when confronted by a law enforcement officer? Yet such a rational plan of action would deprive the Democrats of the political points they receive every time a member of the minority gets killed during a run-in with the police. At the same time, it would dry up corporate donations to BLM, which has helped its co-founder and self-described Marxist, Patrisse Khan-Cullors, purchase four luxury homes in the United States alone.

Getting back to the question of police training, why didn’t Nicholas Reardon opt to shoot a warning shot instead, or perhaps “aim low,” as a means to prevent Miss Bryant from stabbing that young lady? And why was Officer Stillman in pursuit of an individual down a dark alley in the West End of Chicago without any backup? And finally, how in the world was it possible for Kim Potter, a trained police officer, to confuse a weighty Glock-22 with a lightweight Taser? Brandon Tatum, a Black American political commentator and former police officer, offered as an alternative to the ‘systemic racism’ theory, the possibility that Potter was part of an affirmative action hiring program.

“They are hiring people to meet quotas,” Tatum commented on his YouTube channel, “and they’re not hiring the best people for the job.”

That is one possible theory to explain police violence that the mainstream media will not be entertaining anytime soon. The question is “why”? Why is the media, just like it is with so many major corporations, hyping and funding the idea of systemic racism as the source of police violence when there are many other far more plausible explanations? While the ultimate motivation for assuming such a dangerous position may never be known, it is clear that anyone who challenges the ‘racist’ narrative risks attracting the wrath of the woke brigade. This would include, perhaps more than anyone, the academics.

In 2019, psychologists Joseph Cesario of Michigan State and David Johnson of the University of Maryland examined 917 fatal police shootings of civilians from 2015 to ask a simple question: did the race of the police officer or the civilian play any role in those tragic events? The answer: no they didn’t. Cesario and Johnson concluded there was “no significant evidence of antiblack disparity in the likelihood of being fatally shot by police.” Their findings were published in the Proceedings of the National Academy of Sciences, a peer-reviewed journal. Would it surprise anyone to know that “citizen behavior,” i.e. resisting arrest, is the greatest determinate of police behavior?

Perhaps equally unsurprising is the establishment came down hard on the two number crunchers, especially after their research was cited by author Heather MacDonald in an article for the Wall Street Journal entitled, The Myth of Systemic Police Racism.

“It set off a firestorm at Michigan State,” MacDonald wrote. “The university’s Graduate Employees Union pressured the MSU press office to apologize for the “harm it caused” by mentioning my article in a newsletter. The union targeted physicist Steve Hsu, who had approved funding for Mr. Cesario’s research. MSU sacked Mr. Hsu from his administrative position. PNAS editorialized that Messrs. Cesario and Johnson had “poorly framed” their article—the one that got through the journal’s three levels of editorial and peer review.”

As par for course, various student groups took up petitions to have Hsu fired, while the school profusely apologized. In the end, the mob declared yet another victory as Hsu finally stepped down from his position.

The controversial paper’s co-author Cesario told WSJ that he feared the activists would continue “pushing for a narrowing of what kinds of topics people can talk about, or what kinds of conclusions people can come to.”

It appears that Mr. Cesario’s fears have materialized faster than he could have realized as a wall of censorship has been constructed around the world of academia, the one place where the truth on “systemic racism” was being exposed for the lie it is. Now that there is no one left to tell the people, aside from a handful of rigidly regulated and censored truth-seeking publications, America can expect a future of artificially induced racial tensions as a number of good cops are forced to take the blame for a “systemic racism” that only exists on the pages of the mainstream media.

Manhattan’s “prime” retail real estate market remained under pressure in the first quarter even as COVID-19 vaccines became widely available and public health restrictions eased. 

According to Bloomberg, citing a report by Cushman & Wakefield, SoHo, a neighborhood in Lower Manhattan known for designer boutiques, fancy chain stores, and high-end art galleries, experienced the worst slump in retail rents in the first quarter, down 20% from a year earlier to $279 a square foot. The latest surge in long-term leases barely put a dent in overhead supply that has been increasing since the beginning of the pandemic. About 30% of SoHo’s retail space is dormant and available for rent. 

We noted in a piece titled “Manhattan Retail Rents Plunge In “Prime” Shopping Areas” that retail rents slid in the fourth quarter of last year. 

Besides SoHo, Herald Square and Madison Ave.’s retail rents tumbled 19% over the same quarter last year. Madison Avenue had the most inventory available, with the availability rate at a whopping 40%.

“The bad news is that first quarter of 2021 is showing the true impact of the pandemic on the market,” Steven Soutendijk, an executive managing director at Cushman & Wakefield, told Bloomberg. 

Soutendijk continued: “The good news is that landlords are responding and adjusting rents even further downwards to spur leasing.”

Mayor DeBlasio’s solution to mitigate the virus spread has doomed the city. A speedy economic recovery is now questionable.

Former New York City Mayor Rudy Giuliani recently said DeBlasio has “ruined” the metro area through strict public health orders crushing businesses and liberal policies that have made the area more dangerous. 

“Now he’s consistently doing horrible things and destroying my city,” Giuliani said. “He’s ruining it all, he’s doing it in a flash of an eye.”

To revive the city, DeBlasio will spend $30 million on a tourism campaign this summer to attract tourists. 

“It’s critical that we deliver the message that New York City is open and welcoming visitors once again,” Fred Dixon, president and chief executive officer of NYC & Company, the city’s official tourism organization, told WSJ. 

Tourism accounts for hundreds of thousands of jobs – for a sustainable recovery, there needs to be an influx of tourists to visit attractions, shop at retail shops, eat at restaurants, and stay in hotels. 

An exodus of office workers, companies, and residents also adds to the city’s economic woes. Without the uptick in foot traffic on streets, the city should prepare for a new reality, one where its economic recovery lags the rest of the country. 

Authored by Bill Blain via MorningPorridge.com,

“Heaven is purpose and principle. Purgatory is paper and procedure. Hell is rules and regulation.”

We had a slew of spectacular Big Tech results this week, but has the time come to regulate them more closely to avoid increasingly monopolistic behaviour, and to protect the population from the pernicious effect of the manipulation of big data? It’s as much an argument about the role of the state as it is about the success of companies. There will be winners and losers.

As always there is lots going on in markets, but the run of superb Tech results has been truly spectacular. Many tech firms have successfully navigated the Pandemic, selling into bored WFH workers, and achieved staggering success. Let’s use the moment to ponder the difficult question of how should we value Tech, and should it be more thoroughly regulated?

To the upside, new value and economic growth is created from new ideas creating new demand and markets. Invention leads to innovation – which is why everyone is so over-excited about the swift adoption potential of AI, Virtual Reality, 3-D printing, Meatless meat, Robotics, autonomous systems from drones to cars and all the other wonderful things we read about in the new tech space. The companies trade on extraordinary multiples based on their perceived potential – and is often exaggerated.

In real reality, (as opposed to virtual), these ideas are often brilliant solutions in search of problems; they take time, effort, and travel many wrong paths on the road to monetisation. We see that repeatedly in the miserable negative profits generated by so many tech unicorns that promised so much. Some stuff works. Much doesn’t.

There is nothing wrong with the Tech adoption process. The massive personal rewards Tech entrepreneurs can make for themselves is a major reason why the West is so innovative. Long may it be encouraged.

On the downside, some Big Tech – most these most closely thriving off the back of the monetisation of data – have been massively profitable. Their success creates a completely different series of moral sentiment dilemmas, as Adam Smith may have put it.

Where do limits on Big Tech need to come?

It’s been said the goal of every entrepreneur is to become a monopoly and reap monopoly-like returns. The goal of legislators is to avoid it happening. Regulatory oversight of profits is not an attractive option for investors who’ve funded the entrepreneur on the basis they’ll get monopoly-like yields.

Google’s results earlier this week were spectacular. So spectacular they have raised fears for the prospect of further government/interventions to rein back on Big Tech money making machines. Google’s success (nobody calls it Alphabet) came on the back of the pandemic spurring up user numbers, web advertising, YouTube and the stock rose to a new record on a $50 bln stock buyback plan – what else would a tech giant find to do with its money, aside from buying Waymo’s driverless car tech and building more data centres?

Facebook posted a beat on earnings and $26 bln revenues on the back of a 30% rise in ad revenue, and an increase in the volume of ads. My Facebook pages are now 80% ads for leather desk mats, outdoor kitchens, light fittings, Scandinavian furniture, wine storage and all the other stuff She-who-is-Mrs-Blain and I have googled as we renovate the house. I barely use the thing any more. My kids don’t touch it. Facebook makes nearly $10 for every user from Ad revenue.

Amazon reports later today, and its looking like another massive winner on the back of boosted pandemic sales, the lack of high street competition due to lockdowns, its increasing dominance, and the fleet of Imperial Star Destroyers it’s planning to use to host drone deliveries…. (Ok.. but soon..)

Apple is different. It sells real stuff, and regular readers will know I’m an addict of its goods and services. Its results were stellar – double digit growth across the product range, revenues of $90 bln – half of which was iPhone sales, 42.5% margins and authorisation for a $90 bln stock buyback programme.

However, Apple is under the regulatory cosh for the way in which it’s using its massively powerful App Store gateway to gouge profits from App Developers – the Fortnite maker Epic Games takes Apple to court next week. Apple can do that because iOS and Mac is its own ecosystem/tech-habitat, and if you want access to its Bright-Shiny-Things you play by their rules.

The problem of Big Tech’s success is its sheer scale, and many firms have passed the innovation/inventive stage into the monetisation phase. That is when some of them will morph from moving society forward into a pure profit play as they seek monopoly status. They stop inventing stuff, and seek to make their stuff pay, becoming increasingly bureaucratic as they do so.

I read recently Matt Stoller of the American Liberties Project pointing out:

“What these firms are doing to get 20-30% returns is capturing market power, they are not creating wealth.”

Many politicians now agree. They see Facebook, Amazon, Google et al as de-facto monopolies reaping unwarrantable windfall profits while creating untold harm to consumers and other firms from anti-competitive business policies. Its a factor legislators around the globe are determined to address. (Especially if it makes them look strong to voters.)

The question is – how much should government intervene to regulate and licence big tech? The Libertarian right would say not at all. But Adam Smith would have recognised the dangers inherent in Big Tech’s control and use of big data. Information is a public good. Rather than allowing Big Tech to own and control it – should it be owned by the people and licenced by the state as a public good? That’s a question, btw, not a statement

Investors will say no – they want the returns. But these companies now utterly dominate their space. They are no longer inventive tech companies expanding the limits of innovation – now they are monopolies milking their data streams.

That’s why Apple’s new privacy controls are so interesting. This week they upgraded the operating system to stop Apps from tracking Apple User’s data. Google is also on board to kill the App tracking cookies. That’s terrifying news for Facebook which has been monetising that data to sell ads. The social media site is on the wires arguing its bad for smaller niche advertisers, and that its just Apple and Google looking to concentrate the data in their own hands.

There is any amount of economic literature to explain why monopolies are such a bad idea. Monopolies that exploit the information revealed by internet users about themselves are perhaps even worse – inserting themselves virus-like into their victims and driving their spending decisions. Its wider than just trying to sell us stuff our browsing history has suggested we might like to buy.

As the degree of polarisation in recent elections has shown, the rising problem of this modern age is that billions of voters think they have free will, but their every action and belief is now increasingly set according to the algorithms dictating what the read, see and buy. In the US, its been the subject of judicial hearings: Algorithms and Amplification: How Social Media Platforms Shape our Discourse and Our Minds.

Regulation is never a great solution, but maybe it is time for greater government action over the windfall profits being made by Big Tech behemoths? If Amazon is swamping the high-street because it runs cheaper – even it out by taxing them higher! The logic is simple: Amazon’s success puts high streets out of business and causes additional social welfare, medical and other costs from the workers and businesses it displaces. You can make similar arguments for any Big Tech monopoly…

Except, maybe Facebook. If I can think of any reason not to dump Facebook, I’ll be sure to let you know. Basically it’s just an advertising platform, and its primary advantage of targeted advertising to likely interested, motivate buyers, is about to get much weaker. Sell. There are plenty of other ways to advertise.

I have some further points to make re the need to regulate Tech, looking at it from a slightly different perspective of when Tech is Good or Bad for the environment and ecosystem (not just from the perspective of climate change), but I will save that up for Part 2… It will be about the pros, cons, and potential costs of launching Low Earth Orbit coms satellites, and will ask about the perceived public need vs public good!

This week’s ‘Zarif-Gate’ audio leak has caused a shake-up in Iran’s presidential office, reportedly leading to the resignation Hessameddin Ashena, head of the Strategic Studies Center (a think tank closely associated with the Iranian presidency), as he was present during the interview with Zarif. The top Iranian diplomat had essentially said it was the military leadership that sets policy.

“Hesamodin Ashena of the Center for Strategic Studies resigned over ‘the theft’ of the three-hour tape of Foreign Minister Mohammad Javad Zarif being interviewed at the CSS,” AFP reports Thursday. “Ashena, who held the post of Iranian deputy intelligence minister in the 2000s, has headed the center since 2013 and also serves as adviser to President Hassan Rouhani.”

But it’s not enough for Islamic hardliners representing the clerical and military establishment, who are now calling for Zarif to step down immediately, also given his remarks were taken as disparaging toward the late “national hero” Soleimani. 

The interview, which was reportedly captured months ago and was never meant to be made public, included Zarif speaking with surprising frankness and criticism toward the role of the Islamic Revolutionary Guard Corps (IRGC) in the Islamic Republic. He bluntly admitted, for example, that the powerful IRGC often overrides government decisions and that the late Quds Force chief Qassem Soleimani’s actions often harmed diplomacy. Even Iranian newspapers described the leak as a major “scandal” which embarrassed Iran on the world stage at a moment of “progress” at the Vienna nuclear talks. 

In his first public comments since the scandal, Zarif said in an Instagram post that he’s committed to “protecting the interests” of the country and Iranian people. He expressed regret, but stopped short of a direct apology:

“I am very sorry how a secret, theoretical discussion about the necessity of increasing cooperation between diplomacy and the field (the Guard) — in order for the next officials to use the valuable experiences of the last eight years –- became an internal conflict,” Zarif wrote.

“I did not censor myself, because this is a betrayal of the people,” he added.

“I have always been subject to the policies approved by the country and I have strongly defended them. But in expressing my expert opinion, I have considered seeking forgiveness, appeasement, and self-censorship as betrayal,” he said, essentially suggesting it was the leak itself that was a betrayal.

“Zarif also says that by assassinating [Soleimani] in Iraq, the United States delivered a major blow to Iran, more damaging than if it had wiped out an entire city in an attack.” https://t.co/J7tFMnspzg

— Josh Kraushaar (@HotlineJosh) April 26, 2021

While the widespread international coverage of the leaked tapes triggered a firestorm of debate within Iran which in typical fashion pitted the Islamic hardliners against ‘moderates’ (Zarif and Rouhani are widely seen within the “moderate” camp that seeks engagement with the West), it appears the Iranian top diplomat’s job is safe, for now.

There’s speculation that the leak was intended to sabotage Vienna talks, which is viewed by deep suspicion within the Iranian hardliner political camp – particularly represented in parliament and among the Shia clerical establishment.