Bulls & Bears Collide In Crypto-Land: Hot-Hands Versus HODLers

Bulls & Bears Collide In Crypto-Land: Hot-Hands Versus HODLers

Bears are on the hunt for Bitcoin HODLers profits, whilst supply dynamics approach a new equilibrium, and derivative markets remain heated…

Amid the “fear and panic” in the crypto markets, as Bitcoin drops 50% from all-time-highs, Glassnode.com’s ‘Permabull Nino’  details the current uncertainty that overhangs the Bitcoin market, and the psychology of its participants attempting to regain their footing in the following areas:

  • HODLer profits sitting at key historical levels, and the overall observable investor response

  • Zoomed out supply dynamics and spending behavior among short-term and long-term holders, and what it indicates about investor sentiment in the medium to long term

  • Derivative activity, and what it can imply about shorter term expectations towards Bitcoin price action

HODLers Profits Under Siege

The Bitcoin price is currently trading down ~50% from the ATH set in November 2021. As the drawdown worsens, an increasingly significant volume of BTC supply has fallen into an unrealized loss. Approximately 5.7 million BTC are now underwater (~30% of circulating supply).

As the bears apply pressure to the in-profit cohort of holders, Bitcoin bulls are defending a historically significant level of the Percent of Supply in Profit metric. This magnitude of ‘top heavy supply’ was defended in two instances in the last few years:

  • May 2020 – July 2020, the quiet recovery period following the extreme move downwards from Covid-related panic.

  • May 2021 – July 2021, the choppy and accumulative period following a historical deleveraging event.

The reaction from this level will likely provide insight into the medium term direction of the Bitcoin market. Further weakness may motivate these underwater sellers to finally capitulate, whereas a strong bullish impulse may offer much needed psychological relief, and put more coins back into an unrealized profit.

Live Chart

We can establish an appreciation of market-wide psychology by observing who is parting ways with their coins, and why and when these spends are taking place. The Percent of Transfer Volume in Profit chart displays the proportion of coins spent on-chain that were last moved at lower prices, as a gauge for macro fear and greed.

  • Percent of Transfer Volume in Profit > 65% signals that a large amount of coins are being spent in profit. This historically occurs during bullish impulses, as holders take advantage of market strength.

  • Percent of Transfer Volume in Profit < 40% signals that on-chain volumes are dominated by coins acquired at higher prices. This historically occurs in market downtrends and especially capitulation events.

The sell-off this week saw less than 40% of spent volume in profit, reaching levels that historically coincide with capitulation events. Past instances at this level have preceded a bullish reversal, and a period of general risk-on behaviour.

Live Chart

The low levels of profitable coin spends is also evident in the Realized Profit chart, which shows the profitability of BTC moved, on a USD basis. In-profit holders are displaying a notable unwillingness to spend coins, with consistent Realized Profit values below $1 Billion/day. In the face of tumultuous and unconvincing price action, this signals that this cohort of holders are patiently waiting for higher prices to spend their respective supply.

Climbing realized profits, especially above the $1 Billion level and accompanied by positive price performance, signals demand absorption of coins, and is a metric to watch in the coming weeks.

Live Chart

Meanwhile, Realized Losses remain elevated and trending higher, as underwater holders spend coins that were acquired near the market top through October and November.

On average, daily Realized Loss values are ~$750 Million/day, behavior that is comparable to the May – July 2021 capitulation lows. The consistency of large loss realization events is indicative of uneasiness within the market, however also reflects an estimate of demand inflows to absorb these spent coins.

Sustained periods of large realized loss does put the onus on the bulls to prove sufficient demand support. A macro decline in realized loss values would be a more encouraging signal for the bulls, as it provides an early indication of sell-side exhaustion.

Live Chart

The stalemate at play between price action, Realized Profits, and Realized Losses is visible in the 28-day Market Realized Gradient (MRG), which compares the momentum in Market Cap (speculative value) versus the Realized Cap (real capital inflows).

  • Positive values signal that a bull trend is in tact, and upwards momentum in spot markets is growing.

  • Negative values signal that a bear trend is in play, and momentum favors the bears.

  • Large values signal that Bitcoin is possibly overbought (positive) or oversold (negative), as market valuation deviates from more fundamental capital inflows or outflows, respectively.

The MRG trend and values indicate that current market pricing is nearing a point of equilibrium with capital inflows, with a month’s long bullish divergence developing. A firm break above zero would signal a bullish reversal is in play, whilst a break down would suggest momentum is accelerating to the downside.

Live Workbench Chart

Cohorts and Psychology

We can also analyse the psychology and spending behaviour of both Short-Term Holders (STH) and Long-Term Holders (LTH) by looking at changes in their respective Realized Caps and supply dynamics.

The following metric is calculated as the difference between the daily change of LTH and STH realized caps. Interpretation is as follows:

  • Negative Values (red) signal that the STH Realized Cap is increasing more on a daily basis than the LTH Realized Cap. This occurs during bull runs when long term holders distribute supply into new holders.

  • Positive Values (green) signal that the LTH Realized Cap is increasing more on a daily basis than the STH Realized Cap, which occurs during bearish accumulation markets as STH activity decreases, and unspent coins mature into the LTH cohort.

Values currently sit near zero with a general trend to the upside, indicative of a softening of distribution by LTHs, the market reaching a new equilibrium, and a potential reversal into accumulation. Note however, that the process of establishing similar market equilibrium and possible macro bottoms has historically taken several months to resolve.

Live Workbench Chart

The modest distribution of coins from LTHs to STHs is reflected in the Total Supply Held metric, as the net volume of coins held by the STH cohort has increased in recent months.

The supply held by this cohort sits at ~3 Million BTC, a relative historical low, and a level that signifies a transition into a HODLer dominated market. This has been in effect since the May 2021 deleveraging event. Low STH supply levels are typical of bearish trends, as old coins remain dormant, and younger coins are slowly accumulated by high conviction buyers.

Live Chart

Next we turn to the Realized Cap HODL Waves, which reflects the breakdown of the Realized Cap by coin age, and cost basis. The chart below has been filtered for coins younger than 3 months to further highlight the forces at play within the shorter term holder cohort.

Generally speaking, lower values in this metric speak to a bearish trend where old coins are dormant, and young coins are gradually accumulated and taken off market.

At present, around 40% of the Realized Cap is held in coins under 3mths old, owned by buyers entering near the market top, or during the present correction. The 1-3m band is expanding and a constructive view would see these coins continue to mature into the 3m+ band, creating a net decline in young coins. A more bearish observation would be if older coins start being spent, causing these bands to swell, and signifying an additional influx of liquid supply that must be absorbed.

Live Chart

Derivatives Fireworks on the Horizon

Amidst downwards pressure in Bitcoin holder profitability but yet favorable medium to long term supply dynamics, futures markets remain a powder keg for short term volatility with Perpetual Futures Open Interest at ~250k BTC – a historically elevated level.

Since April 2021, this has paired with large pivots in price action as the risk for a short or long squeeze increases, resolved in market wide deleveraging events.

Live Chart

Alongside high open interest, funding rates this week moved into negative territory, indicating that shorts were increasingly hungry for leverage. As perpetual swap markets were pushed below spot prices, it does add further bias towards a potential oversupply of short positions in close proximity to the current price.

Live Chart

In addition to large outstanding open interest, and negative funding rates, trading volume continues to drip lower, currently around $30B per day. This is coincident with levels in December 2020, and reflects a marked reduction from the 2021 bull market highs, hitting well above $70B/day. Should a deleveraging event occur, thinner trading volumes may accentuate the impact.

Live Chart

As Open Interest continues charging for a big move, funding rates drop, and futures volumes contract, Crypto-Margined Open Interest continues its march downwards versus Cash-Margined Open Interest.

With only 40% of Open Interest sitting in Crypto-Margined products and in a convincing downtrend since May 2021, Cash-Margined Futures data becomes increasingly higher signal and worthy of more market participants’ attention. Note that this trend is primarily driven by a relative reduction in crypto-margin on Binance, Bybit, Huobi and OKEx exchanges.

Live Chart

In summary, there is evidence that the market is reaching some form of price and momentum equilibrium, within what is a broader bearish market structure. Bitcoin bears certainly have the upper hand, however modest bullish divergences are appearing across a number of on-chain metrics and indicators. Coupled with elevated future open interest, and a bias that appears to be a short heavy market, a risk of a deleveraging to the upside remains on the table.

Tyler Durden
Sat, 01/22/2022 – 16:30

via ZeroHedge News https://ift.tt/3GTqegN Tyler Durden

1 Cop Killed, 2 Critically Wounded In Harlem Shooting

1 Cop Killed, 2 Critically Wounded In Harlem Shooting

NYC Mayor Eric Adams is off to a rocky start to his four-year term at Gracie Mansion.

Two weeks after 17 were killed (including 8 children, according to the mayor’s revised numbers) in a disastrous fire in a Bronx high rise, the deadliest fire the city had seen in decades, Adams is facing a rash of police-involved shootings, including one incident Friday that left one cop dead and two others critically wounded.

It’s the latest development in a crime wave that has been worsening across the US, with NYC seeing violent crime surge to levels unseen in years.

The news was reported Saturday afternoon by the New York Times. The shooting occurred in Harlem, where the officers were responding to a domestic violence call, according to the report. The shooter opened fire on them while inside the apartment.


Source: NYT

Police initially erroneously said that two cops had died, but later revised the total to 1. The shooter was shot in the head and is in critical condition.

The office killed was Jason Rivera, 22, who joined the department in 2020.

Police Commission Keechant Sewell addressed the media during a press briefing outside the hospital where the two wounded cops had been taken, the NYT reports.

Speaking at a news conference at the hospital where the two officers were taken after being shot, Keechant Sewell, the police commissioner, described Officer Rivera as a “son, husband, officer and friend” who had been “killed because he did what we asked him to do.”

“I’m struggling to find the words to express the tragedy we are enduring,” said Ms. Sewell, her voice rising in anger. Like the man who hired her, Mayor Eric Adams, she began her job overseeing the largest police force in the United States this month.

“We’re mourning, and we’re angry,” she added.

Mayor Adams had been in the Bronx earlier attending a vigil for a baby who had been shot in the face with a stray bullet Wednesday night, another high-profile crime that drew intense media attention.

“This was just not an attack on three brave officers,” he said. “This was an attack on the City of New York” and “an attack on the children and families of this city,” Adams said at the news conference.”

Even the NYT acknowledged that the stream of major crimes had “tested” Adams’ pledge to tackle the resurgent crime problem in the city, a major piece of his successful primary campaign in a city beset by more progressive candidates vying for the spotlight.

During the briefing, the NYPD’s chief of detectives delivered a breakdown of the incident that led to the fatal shooting.

Around 6:30 p.m. on Friday, three officers from the 32nd Precinct answered a 911 call from a woman who said she was fighting with her son. When the officers arrived at the apartment, they were met by the woman and a second son. There was no indication from the 911 call, officials said, that there were weapons in the apartment.

The woman told the officers that the son she had been fighting with was in a back bedroom at the end of a long, narrow hallway. As officers Mora and Rivera approached the bedroom, the door swung open and Mr. McNeil began firing. After shooting the two officers, Mr. McNeil tried to leave the apartment and was shot by the third officer, whose name has not been released.

Mr. McNeil, 47, was on probation after being arrested in New York on a felony drug charge around 2003, officials said. He also had four arrests in other states, all more than a decade ago.

Unfortunately this isn’t the only cop shooting to happen recently. Friday’s shooting brings the total number of NYPD officers shot since the start of 2022 to 5; 4 were shot, with the first cop shooting taking place just hours into the New Year. Another officer was shot on Tuesday, meaning four cops have now been shot in the span of 72 hours.

And progressive DAs want to let more violent criminals out of prison.

Tyler Durden
Sat, 01/22/2022 – 16:00

via ZeroHedge News https://ift.tt/33M9utw Tyler Durden

No Arbitration of Claims Against Scientology After Plaintiffs Had Left the Church

From Bixler v. Superior Court, decided Wednesday by the California Court of Appeal (Justices Laurence Rubin, Carl Moor, and Lamar Baker):

Petitioners … are former members of the Church of Scientology who reported to the police that another Church member [Daniel Masterson] had raped them. They allege that, in retaliation for their reports, the Church encouraged its members to engage in a vicious campaign of harassment against them. {[T]hey state no cause of action against Masterson for sexual assault. Instead, they allege causes of action against all defendants for stalking, physical invasion of privacy, constructive invasion of privacy, [and] intentional infliction of emotional distress ….}

After petitioners brought suit in superior court against the Church and related entities and persons, some of those defendants moved to compel arbitration, relying on agreements that provided all disputes with the Church would be resolved according to the Church’s own “Ethics, Justice and Binding Religious Arbitration system.” That system was created to decide matters “in accordance with Scientology principles of justice and fairness.” …

The contract on its face apparently applied to all litigation against the Church:

My freely given consent to be bound exclusively by the discipline, faith, internal organization, and ecclesiastical rule, custom, and law of the Scientology religion … in all my dealings of any nature with the Church, and in all my dealings of any nature with any other Scientology church or organization which espouses, presents, propagates or practices the Scientology religion means that I am forever abandoning, surrendering, waiving, and relinquishing my right to sue, or otherwise seek legal recourse with respect to any dispute, claim or controversy against the Church, all other Scientology churches, all other organizations which espouse, present, propagate or practice the Scientology religion, and all persons employed by any such entity both in their personal and any official or representational capacities, regardless of the nature of the dispute, claim or controversy.

But the court concluded that, as a matter of California law, the arbitration agreement couldn’t be enforced after the parties left the Church:

Individuals have a First Amendment right to leave a religion. We hold that once petitioners had terminated their affiliation with the Church, they were not bound to its dispute resolution procedures to resolve the claims at issue here, which are based on alleged tortious conduct occurring after their separation from the Church and do not implicate resolution of ecclesiastical issues….

According to plaintiffs, Scientology forbids members from contacting police to report a crime committed by a member. It instructs members that reporting such incidents is considered a “high crime” and subjects the reporting member to punishment. Scientology utilizes so-called “Fair Game” tactics to “attack, harass, embarrass, humiliate, destroy, and/or injure individuals who Defendants declare to be an enemy of Scientology, known in Scientology as a ‘Suppressive Person’ ….” Masterson is a television actor; Scientology granted him special treatment when he achieved “celebrity status.” To that end, Scientology worked to prevent plaintiffs from reporting Masterson’s crimes and, once they did, declared plaintiffs Suppressive Persons. Scientology then mobilized an aggressive Fair Game campaign against them.

While the Fair Game campaigns against each plaintiff differed, collectively plaintiffs allege Scientology’s agents committed the following acts against them: surveilled them, hacked their security systems, filmed them, chased them, hacked their email, killed (and attempted to kill) their pets, tapped their phones, incited others to harass them, threatened to kill them, broke their locks, broke into their cars, ran them off the road, posted fake ads purporting to be from them soliciting anal sex from strangers, broke their windows, set the outside of their home on fire, went through their trash, and poisoned trees in their yards. This conduct was alleged to be pursuant to Scientology’s policies and procedures.

According to plaintiffs’ complaint, Scientology’s directives are that Suppressive Persons are to be silenced by whatever means necessary. Scientology instructs members “to damage the person’s professional reputation, file frivolous lawsuits, and harass and surveil ‘the enemy.'” Scientology’s “policies and procedures encourage and/or instruct followers to ‘ruin [the individual] utterly.'” …

In addition to events occurring while still a Scientology member, each petitioner alleged an invasive Fair Game campaign occurring entirely after she had left the church. Bixler alleged that she formally terminated her relationship with the Church in October 2016, then reported Masterson to the police. It was only after her report that she was declared a Suppressive Person and she and her husband were subjected to the Fair Game campaign.

Jane Doe #1 learned in June 2005 that she had been declared a Suppressive Person and was no longer permitted to engage in religious services at the Church. More than a decade later (after she asked the LAPD to reopen its investigation into Masterson), the Church commenced its Fair Game campaign against her. Jane Doe #2 ceased practicing Scientology entirely in 2004. In 2017, she reported Masterson’s assault to the LAPD, at which point the Fair Game harassment began….

This case involves both petitioners’ First Amendment rights to leave a faith and Scientology’s right to resolve disputes with its members without court intervention. When applied to a dispute that arose after petitioners left the faith, and which can be resolved on neutral principles of tort law, we find petitioners’ right to leave the faith must control….

An individual possesses an “inalienable First Amendment right to the free exercise of religion, which includes her right to change her religious beliefs ….” “The constitutional freedom to question, to doubt, and to change one’s convictions, protected by the Free Exercise and Establishment Clauses, is important for very pragmatic reasons. For most people, religious development is a lifelong dynamic process even when they continue to adhere to the same religion, denomination, or sect.”

California precedent counsels against enforcing agreements that would violate an individual’s right to change religions. The issue arose in In re Marriage of Weiss (Cal. Ct. App. 1996). There, prior to marrying her Jewish husband, a woman converted to Judaism and executed a written “Declaration of Faith,” in which she pledged to rear all their children “‘in loyalty to the Jewish faith and its practices.'” After the couple divorced, the woman returned to Christianity.  She was attending church and had enrolled the couple’s child in Sunday school. The child also attended a weekly club meeting at the church and had attended church summer camp. The father “acknowledged [the mother] had the right to expose the minor to her religion, but objected to the minor’s being indoctrinated in the Christian faith or being enrolled in any activity ‘that would be contrary to his Jewish faith.'”

The trial court refused to restrain the mother’s religious activity with the child. The father appealed, arguing the court erred in not enjoining the mother from engaging the child in Christian religious activity. The Court of Appeal affirmed, recognizing the rule in California that a parent cannot enjoin the other parent from involving their child in religious activities in the absence of a showing of harm to the child.

The father argued that the written antenuptial agreement should be enforced as an exception to that rule and that the mother should be bound by her promise. … [T]he Weiss court disagreed. The court concluded the agreement was legally unenforceable for two reasons: enforcement would result in improper judicial entanglement in religious matters and would violate the mother’s First Amendment right to change her religion.

As Presiding Justice Klein wrote, “Further, in view of [the mother’s] inalienable First Amendment right to the free exercise of religion, which includes the right to change her religious beliefs and to share those beliefs with her offspring, her antenuptial commitment to raise her children in [the father’s] faith is not legally enforceable for that reason as well.”  While a parent’s religious freedom may yield to other competing interests, “‘it may not be bargained away.’ [Citation.]” …

Just like written antenuptial agreements to raise children in a particular faith are not enforceable against a parent who has left the faith, Scientology’s written arbitration agreements are not enforceable against members who have left the faith, with respect to claims for subsequent non-religious, tortious acts. To hold otherwise would bind members irrevocably to a faith they have the constitutional right to leave….

Scientology argues that petitioners simply agreed to be bound by Scientology dispute resolution procedures no matter what. As Scientology puts it, “An ‘irrevocable‘ agreement to ‘forever‘ waive civil proceedings and submit to Scientology Ethics and Justice Codes in ‘any dispute’ with Churches of Scientology is a condition for participation in the religion.” It argues that this agreement should be enforced like any other agreement.

Enforcing this provision without regard to petitioners’ First Amendment rights would mean that if the Church or a Church member committed any intentional or negligent tort against a former member of the Church, that former member would be bound by Scientology dispute resolution procedures regardless of the fact that the member had left the Church years, even decades, before the tort. In effect, Scientology suggests that one of the prices of joining its religion (or obtaining a single religious service) is eternal submission to a religious forum—a sub silencio waiver of petitioners’ constitutional right to extricate themselves from the faith. The Constitution forbids a price that high….

The Church of Scientology also argued that having this rule would discriminate against religious arbitration agreements, in favor of secular arbitration agreements. No, said the court, suggesting that a similar rule might apply to secular arbitration agreement as well:

[The Church] has provided no authority upholding an arbitration agreement ad infinitum, and the California case on which Scientology relies for this proposition is distinguishable. In Buckhorn v. St. Jude Heritage Medical Group (Cal. Ct. App. 2004), … [t]he Fourth District Court of Appeal [upheld an arbitration agreement provision in a contract], on the basis that his tort claims “stem[med] from the contractual relationship between the parties,” and were therefore within the scope of the arbitration agreement. Here, petitioners’ claims against Scientology do not stem from the contractual relationship; they stem from the alleged “Fair Game” campaign Scientology engaged in as retribution for reporting Masterson to police after they left the Church. This harassment allegedly arose because of petitioners’ relationship with Masterson and their reporting his conduct to police, not because of their prior affiliation with Scientology. Indeed, plaintiff Riales alleged a similar Fair Game campaign of harassment, and it is undisputed she was never a member….

The post No Arbitration of Claims Against Scientology After Plaintiffs Had Left the Church appeared first on Reason.com.

from Latest – Reason.com https://ift.tt/33TKqRb
via IFTTT

No Arbitration of Claims Against Scientology After Plaintiffs Had Left the Church

From Bixler v. Superior Court, decided Wednesday by the California Court of Appeal (Justices Laurence Rubin, Carl Moor, and Lamar Baker):

Petitioners … are former members of the Church of Scientology who reported to the police that another Church member [Daniel Masterson] had raped them. They allege that, in retaliation for their reports, the Church encouraged its members to engage in a vicious campaign of harassment against them. {[T]hey state no cause of action against Masterson for sexual assault. Instead, they allege causes of action against all defendants for stalking, physical invasion of privacy, constructive invasion of privacy, [and] intentional infliction of emotional distress ….}

After petitioners brought suit in superior court against the Church and related entities and persons, some of those defendants moved to compel arbitration, relying on agreements that provided all disputes with the Church would be resolved according to the Church’s own “Ethics, Justice and Binding Religious Arbitration system.” That system was created to decide matters “in accordance with Scientology principles of justice and fairness.” …

The contract on its face apparently applied to all litigation against the Church:

My freely given consent to be bound exclusively by the discipline, faith, internal organization, and ecclesiastical rule, custom, and law of the Scientology religion … in all my dealings of any nature with the Church, and in all my dealings of any nature with any other Scientology church or organization which espouses, presents, propagates or practices the Scientology religion means that I am forever abandoning, surrendering, waiving, and relinquishing my right to sue, or otherwise seek legal recourse with respect to any dispute, claim or controversy against the Church, all other Scientology churches, all other organizations which espouse, present, propagate or practice the Scientology religion, and all persons employed by any such entity both in their personal and any official or representational capacities, regardless of the nature of the dispute, claim or controversy.

But the court concluded that, as a matter of California law, the arbitration agreement couldn’t be enforced after the parties left the Church:

Individuals have a First Amendment right to leave a religion. We hold that once petitioners had terminated their affiliation with the Church, they were not bound to its dispute resolution procedures to resolve the claims at issue here, which are based on alleged tortious conduct occurring after their separation from the Church and do not implicate resolution of ecclesiastical issues….

According to plaintiffs, Scientology forbids members from contacting police to report a crime committed by a member. It instructs members that reporting such incidents is considered a “high crime” and subjects the reporting member to punishment. Scientology utilizes so-called “Fair Game” tactics to “attack, harass, embarrass, humiliate, destroy, and/or injure individuals who Defendants declare to be an enemy of Scientology, known in Scientology as a ‘Suppressive Person’ ….” Masterson is a television actor; Scientology granted him special treatment when he achieved “celebrity status.” To that end, Scientology worked to prevent plaintiffs from reporting Masterson’s crimes and, once they did, declared plaintiffs Suppressive Persons. Scientology then mobilized an aggressive Fair Game campaign against them.

While the Fair Game campaigns against each plaintiff differed, collectively plaintiffs allege Scientology’s agents committed the following acts against them: surveilled them, hacked their security systems, filmed them, chased them, hacked their email, killed (and attempted to kill) their pets, tapped their phones, incited others to harass them, threatened to kill them, broke their locks, broke into their cars, ran them off the road, posted fake ads purporting to be from them soliciting anal sex from strangers, broke their windows, set the outside of their home on fire, went through their trash, and poisoned trees in their yards. This conduct was alleged to be pursuant to Scientology’s policies and procedures.

According to plaintiffs’ complaint, Scientology’s directives are that Suppressive Persons are to be silenced by whatever means necessary. Scientology instructs members “to damage the person’s professional reputation, file frivolous lawsuits, and harass and surveil ‘the enemy.'” Scientology’s “policies and procedures encourage and/or instruct followers to ‘ruin [the individual] utterly.'” …

In addition to events occurring while still a Scientology member, each petitioner alleged an invasive Fair Game campaign occurring entirely after she had left the church. Bixler alleged that she formally terminated her relationship with the Church in October 2016, then reported Masterson to the police. It was only after her report that she was declared a Suppressive Person and she and her husband were subjected to the Fair Game campaign.

Jane Doe #1 learned in June 2005 that she had been declared a Suppressive Person and was no longer permitted to engage in religious services at the Church. More than a decade later (after she asked the LAPD to reopen its investigation into Masterson), the Church commenced its Fair Game campaign against her. Jane Doe #2 ceased practicing Scientology entirely in 2004. In 2017, she reported Masterson’s assault to the LAPD, at which point the Fair Game harassment began….

This case involves both petitioners’ First Amendment rights to leave a faith and Scientology’s right to resolve disputes with its members without court intervention. When applied to a dispute that arose after petitioners left the faith, and which can be resolved on neutral principles of tort law, we find petitioners’ right to leave the faith must control….

An individual possesses an “inalienable First Amendment right to the free exercise of religion, which includes her right to change her religious beliefs ….” “The constitutional freedom to question, to doubt, and to change one’s convictions, protected by the Free Exercise and Establishment Clauses, is important for very pragmatic reasons. For most people, religious development is a lifelong dynamic process even when they continue to adhere to the same religion, denomination, or sect.”

California precedent counsels against enforcing agreements that would violate an individual’s right to change religions. The issue arose in In re Marriage of Weiss (Cal. Ct. App. 1996). There, prior to marrying her Jewish husband, a woman converted to Judaism and executed a written “Declaration of Faith,” in which she pledged to rear all their children “‘in loyalty to the Jewish faith and its practices.'” After the couple divorced, the woman returned to Christianity.  She was attending church and had enrolled the couple’s child in Sunday school. The child also attended a weekly club meeting at the church and had attended church summer camp. The father “acknowledged [the mother] had the right to expose the minor to her religion, but objected to the minor’s being indoctrinated in the Christian faith or being enrolled in any activity ‘that would be contrary to his Jewish faith.'”

The trial court refused to restrain the mother’s religious activity with the child. The father appealed, arguing the court erred in not enjoining the mother from engaging the child in Christian religious activity. The Court of Appeal affirmed, recognizing the rule in California that a parent cannot enjoin the other parent from involving their child in religious activities in the absence of a showing of harm to the child.

The father argued that the written antenuptial agreement should be enforced as an exception to that rule and that the mother should be bound by her promise. … [T]he Weiss court disagreed. The court concluded the agreement was legally unenforceable for two reasons: enforcement would result in improper judicial entanglement in religious matters and would violate the mother’s First Amendment right to change her religion.

As Presiding Justice Klein wrote, “Further, in view of [the mother’s] inalienable First Amendment right to the free exercise of religion, which includes the right to change her religious beliefs and to share those beliefs with her offspring, her antenuptial commitment to raise her children in [the father’s] faith is not legally enforceable for that reason as well.”  While a parent’s religious freedom may yield to other competing interests, “‘it may not be bargained away.’ [Citation.]” …

Just like written antenuptial agreements to raise children in a particular faith are not enforceable against a parent who has left the faith, Scientology’s written arbitration agreements are not enforceable against members who have left the faith, with respect to claims for subsequent non-religious, tortious acts. To hold otherwise would bind members irrevocably to a faith they have the constitutional right to leave….

Scientology argues that petitioners simply agreed to be bound by Scientology dispute resolution procedures no matter what. As Scientology puts it, “An ‘irrevocable‘ agreement to ‘forever‘ waive civil proceedings and submit to Scientology Ethics and Justice Codes in ‘any dispute’ with Churches of Scientology is a condition for participation in the religion.” It argues that this agreement should be enforced like any other agreement.

Enforcing this provision without regard to petitioners’ First Amendment rights would mean that if the Church or a Church member committed any intentional or negligent tort against a former member of the Church, that former member would be bound by Scientology dispute resolution procedures regardless of the fact that the member had left the Church years, even decades, before the tort. In effect, Scientology suggests that one of the prices of joining its religion (or obtaining a single religious service) is eternal submission to a religious forum—a sub silencio waiver of petitioners’ constitutional right to extricate themselves from the faith. The Constitution forbids a price that high….

The Church of Scientology also argued that having this rule would discriminate against religious arbitration agreements, in favor of secular arbitration agreements. No, said the court, suggesting that a similar rule might apply to secular arbitration agreement as well:

[The Church] has provided no authority upholding an arbitration agreement ad infinitum, and the California case on which Scientology relies for this proposition is distinguishable. In Buckhorn v. St. Jude Heritage Medical Group (Cal. Ct. App. 2004), … [t]he Fourth District Court of Appeal [upheld an arbitration agreement provision in a contract], on the basis that his tort claims “stem[med] from the contractual relationship between the parties,” and were therefore within the scope of the arbitration agreement. Here, petitioners’ claims against Scientology do not stem from the contractual relationship; they stem from the alleged “Fair Game” campaign Scientology engaged in as retribution for reporting Masterson to police after they left the Church. This harassment allegedly arose because of petitioners’ relationship with Masterson and their reporting his conduct to police, not because of their prior affiliation with Scientology. Indeed, plaintiff Riales alleged a similar Fair Game campaign of harassment, and it is undisputed she was never a member….

The post No Arbitration of Claims Against Scientology After Plaintiffs Had Left the Church appeared first on Reason.com.

from Latest – Reason.com https://ift.tt/33TKqRb
via IFTTT

The Three Types of US-Led Regime Change

The Three Types of US-Led Regime Change

Authored by Joe Lauria via Consortium News,

Throughout the long, documented history of the United States illegally overthrowing governments of foreign lands to build a global empire there has emerged three ways Washington broadly carries out “regime change.”

From Above. If the targeted leader has been democratically elected and enjoys popular support, the CIA has worked with elite groups, such as the military, to overthrow him (sometimes through assassination).  Among several examples is the first CIA-backed coup d’état, on March 30, 1949,  just 18 months after the agency’s founding, when Syrian Army Colonel Husni al-Za’im overthrew the elected president, Shukri al-Quwatli. 

The CIA in 1954 toppled the elected President Jacobo Árbenz of Guatemala, who was replaced with a military dictator. In 1961, just three days before the inauguration of President John F. Kennedy, who favored his release, Congolese President Patrice Lumumba was assassinated with CIA assistance, bringing military strongman Mobutu Sese Seko to power.  In 1973, the US backed Chilean General Augusto Pinochet to overthrow and kill the democratically-elected, socialist President Salvador Allende, setting up a military dictatorship, one of many U.S.-installed military dictatorships of that era in Latin America under Operation Condor


Chilean presidential palace during U.S.-backed coup, Sept. 11, 1973. (Library of the Chilean National Congress/Wikipedia)

From Below. If the targeted government faces genuine popular unrest, the U.S. will foment and organize it to topple the leader, elected or otherwise. 1958-59 anti-communist protests in Kerala, India, locally supported by the Congress Party and the Catholic Church, were funded by the CIA, leading to the removal of the elected communist government. The 1953 coup in Iran that overthrew the democratically-elected Prime Minister Mohammad Mosaddegh was a combination of bottom-up CIA (and MI-6)-backed street protests, and top-down conservative clergy and military to destroy democracy and return a monarch to the throne. The US-backed Ukrainian coup of 2014 is the latest example of the US working with genuine popular dissent to help organize and steer the overthrow, in this case, of an OSCE-certified elected president. 

Through Military Intervention.  If a coup is not feasible, the US turns to indirect or direct military intervention. One of earliest examples was the US expeditionary force that invaded Russia in 1918 during the civil war in an attempt to help overthrow the new Bolshevik government.  More recently, in 1983 the U.S. military invaded Grenada to overthrow a Marxist president; in 1989 the U.S. invaded Panama to overthrow former CIA asset Manuela Noriega.

Another hybrid operation was the US bombing of Serbia in 1999 and the State Department funding of the opposition group Otpor!, which led to the ouster of Slobodan Milosevic. The most prominent recent examples of direct military invasion to overthrow governments are the U.S.-led invasions of Afghanistan in 2001 and Iraq in 2003. Indirect military intervention through proxies to overthrow governments happened in the 1980s Contra war against Nicaragua; and the 2011 to present jihadist war to overthrow the Syrian government. 


Tanks in the streets of Teheran, 1953. (Public domain/Wikipedia.)

Not From Thin Air

Economic sanctions are commonly imposed by the US in advance to “soften up” the target. In non-military interventions, the US does not create regime change out of whole cloth:  it works with pre-existing dissent, whether in the population or in the military or another elite group. It will harness it, fund it, train it and organize it, but not create it.  

In other words, in regime change that doesn’t involve invasion and occupation, it is not a question of either US involvement or genuine dissent. It is almost always both.

And sometimes a cigar is just a cigar: there are legitimate revolts that are not taken over by the US because the uprisings are against US clients’ and Washington’s interests: for instance, the 2010 uprising in Bahrain. In such cases the US will support crushing dissent (as it is ready to do at home as well). 

Kazakhstan

Last week, Consortium News ran two pieces on the uprisings in Kazakhstan. The first, by Craig Murray, made the argument that the CIA was not involved and that the uprising was genuine, given the country’s economic inequality and increases in fuel prices that were quickly reversed.

Murray is a former British ambassador to neighboring Uzbekistan and knows Central Asia. There is no doubt that inequality, the fuel price hikes and decades of authoritarian rule fueled the protests. But by its very covert nature, it is close to impossible to know what the CIA is up to anywhere in the world until declassification of documents usually decades later, or if a whistleblower or leak emerges earlier. 

Anyway, the CIA did not need to be directly involved. It’s been known since at least a 1991 Washington Post article that the CIA is ostensibly no longer required for regime change. After the 1975 Church Committee revelations of its crimes and corruption, the CIA, facing a public backlash, resorted to new methods. The establishment of the U.S. National Endowment of Democracy in 1983 does openly what the CIA once did secretly, the Post argued. “The old era of [CIA] covert action is dead,” Post columnist David Ignatius declared. 

“The world doesn’t run in secret anymore. We are now living in the Age of Overt Action. … the triumph of overt action [is] a network of overt operatives who during the last 10 years have quietly been changing the rules of international politics. They have been doing in public what the CIA used to do in private — providing money and moral support for pro-democracy groups, training resistance fighters, working to subvert communist rule. And, in contrast to many of the CIA’s superannuated Cold Warriors, who tended to get tangled in their webs of secrecy, these overt operatives have been immensely successful.”

But as CN founder Robert Parry explained in an 2015 article republished today on Consortium Newsthe CIA had a direct hand in the establishment of the NED, even in the writing of the Congressional legislation that authorized the U.S. Agency for International Development to fund it with U.S. government money. The continued hand of the CIA was to be hidden in the “Age of Overt Action.” 

The NED in Kazakhstan

Since Kazakhstan’s independence in 1990 after the breakup of the Soviet Union the country has been run by one man, Nursultan Nazarbayev. Though he formally stepped down in 2019 in favor of his hand-picked successor, Kassym-Jomart Tokayev, Nazarbayev is still the power behind the throne. Nursultan, the new capital city, was named after him in 2019.


Protestors setting up a yurt in Aktobe on Jan. 4. (Esetok/Wikipedia)

Kazakhstan’s political system has few democratic features. Not that that matters much to the United States. In its long history of overthrowing governments abroad, the US has toppled dictators just as readily as elected democrats. It is immaterial. What matters is whether leaders are furthering or standing in the way of US interests.

The lack of democracy was of no interest either to former President Bill Clinton and former Prime Minister Tony Blair, who both cozied up to Nazarbayev for lucrative paydays. London and other Western centers have little problem taking investments from undemocratic Kazakh elites. The lack of democracy in Kazakhstan could be useful to Washington. The population’s rage at being suppressed politically and economically is the kind of raw material needed to drive a coup from the bottom up. 

In 2020, the NED spent $1,082,991 on 20 programs in Kazakhstan.  One was $50,000 to “promote freedom of peaceful assembly” through “strategic litigation to support activists facing repression.” Another, for $65,000 was to “promote civic engagement among youth in Kazakhstan.”

Genuine Kazakh Revolt

This money was poured into a country with pre-existing tensions that exploded from Jan. 2 to Jan. 11, leaving 227 people dead, 9,900 arrested and vast sections of city centers looted and destroyed. At the start the government tried to quell the protests by again capping fuel prices, the government resigned and Nazarbayev stepped down as chairman of the national security council. It didn’t work. Shoot to kill orders were issued against the rioters. 

Ultimately, Russian troops as part of the Collective Security Treaty Organization mission restored order. In a news analysis on Jan. 6, The New York Times Eastern Europe bureau chief made an unattributed, editorial comment: “And once Russian troops arrive, they seldom, if ever, go home.”  Normally the corporate media are fed such lines by unnamed US officials. In this case the US government line seemed to work in reverse.

The next day U.S. Secretary of State Antony Blinken said, “One lesson of recent history is that once Russians are in your house, it’s sometimes very difficult to get them to leave.” Moscow reacted furiously, pointing out that the US should examine its history of the invasions of Vietnam and Iraq. “If Antony Blinken loves history lessons so much, then he should take the following into account: when Americans are in your house, it can be difficult to stay alive and not be robbed or raped,” the foreign ministry said.

The Russian and other CSTO troops left Kazakhstan on Wednesday. 

US Interests in Kazakhstan 

Installing a government hostile to Russia and China, which both border Kazakhstan, would be advantageous to the US It could disrupt China’s Silk Roads initiative through the country and the U.S. could put a military base in Kazakhstan. Since April the US has been trying to find a Central Asian country for a base to further the encircling pressure on Russia. There are also oil and gas deposits beckoning.

Despite these interests, the second article that Consortium News ran last week advised the U.S. stay out of Kazakhstan.  Saying there was no evidence of U.S. involvement with the protests, Anatol Lieven wrote: 

“If the Kazakh government collapses or is gravely weakened, it would be very surprising if hard line elements in Washington did not see this as an opportunity to use Kazakhstan as a base to undermine Chinese rule in Sinkiang — even if (as in Syria) this led them into de facto alliance with Islamist extremist forces.

For America to use Kazakhstan in this way would be both a crime and a blunder, that would recall the worst aspects of U.S. policy in Africa, Asia, and Central America during the Cold War. It would in fact cast America in the role in which American commentators like to cast Russia — that of a cynical troublemaker, absolutely indifferent to the consequences of its actions for unfortunate populations on the ground.”

Circumstantial Evidence of the Causes 

Was in fact the US not involved in the uprising, as Lieven maintains?

According to Russian President Vladimir Putin, “The events in Kazakhstan are not the first and far from the last attempt to interfere in the internal affairs of our states from the outside.” He told other CSTO leaders on Jan. 10: “The measures taken by the CSTO made it clear that we would not let anyone destabilize the situation at our home and implement so-called ‘color revolution’ scenarios.”


Putin speaking with other CSTO leaders, Jan. 10. (Kremlin pool)

Putin also said, “Elements of force and information support of protests were actively used, and well-organized and well-controlled groups of militants were also used … including those who had obviously been trained in terrorist camps abroad.”

The possible presence of jihadists followed reports that a Kazakh policemen had been beheaded. The Kazakh government had a slightly different take, according to long-time Moscow correspondent Fred Weir, writing in the Christian Science Monitor: 

“Kazakh leaders have offered a different explanation, pointing to high-ranking internal traitors who utilized the pretext of price increases to trigger protests, then unleashed specially trained armed units in an attempt to stage a coup d’état. At least one top former official, the recently dismissed head of the security services, Karim Masimov, has been arrested and charged with plotting against the state.

Other experts note that no movement has claimed responsibility for the uprising, and no set of unified demands or discernible leaders have emerged from the turmoil. That highly unusual circumstance is hard to square with an organized rebellion, Galym Ageleulov, head of the independent human rights group Liberty, told the Monitor from Almaty on Monday.

‘I think what happened was that a peaceful civil meeting of people who are tired of authoritarian government got used by elites in their internal struggles,’ he says. ‘It was a spontaneous upsurge without leaders because there is no permitted legal opposition, and civil activism is not able to grow.’ …

‘All the elements are there: socioeconomic tensions, elements of outside interference, and a half-completed transfer of power’ from the aging autocrat Mr. Nazarbayev to his chosen successor, Mr. Tokayev, [Fyodor Lukyanov, a leading Russian foreign policy analyst] says. “’It is well known that some groups behind Nazarbayev were not happy with his choice. There is a feeling among many observers that it was not a purely spontaneous outburst.’”

Normally in regime change operations, the US has a leader in exile ready to be installed. Mukhtar Ablyazov, leader of the Democratic Choice of Kazakhstan, is in exile in Paris. He says he has not accepted Western money, asked for Western sanctions, which have not come, and egged on what he called the revolution unfolding in his country. He claimed Russia was “occupying” Kazakhstan, only to see the uprising end and Russian troops leave. 

The beheadings, the organized nature of the uprising, the seizing of the airport, the NED funding, and the leader in exile are all circumstantial evidence of possible U.S. involvement. Many commenters on social media and on this site took the view that if it walks like a duck, it must be a U.S.-backed coup. 

But journalism needs to be held to a higher standard of proof. CN rightly criticizes corporate media for repeating unnamed U.S. intelligence officials without skepticism. Skepticism must also be applied when the US is accused of being involved in a coup. Circumstantial evidence is not enough.  Even in an “Age of Overt Action” a smoking gun is needed, usually arriving with the declassification of documents that has proved the history of U.S. regime change.     

In 2014 in Ukraine, there was also the circumstantial evidence of NED involvement. Then U.S. Assistant Secretary of State for European and Eurasian Affairs Victoria Nuland told the U.S.-Ukrainian Foundation on Dec. 13, 2013, that Washington had spent $5 billion over a decade to support Ukraine’s “European aspirations,” in other words to pull it away from Russia.

But there was also a smoking gun. It came in the form of the leaked telephone call between Nuland and the then US ambassador to Ukraine in which they discussed who the new Ukrainian leader would be, weeks before the coup occurred.

In Kazakhstan, despite the circumstantial evidence, there is no smoking gun so far. Therefore the question of whether there was direct and decisive U.S. involvement in the Kazakh uprising must remain inconclusive.

Tyler Durden
Sat, 01/22/2022 – 15:30

via ZeroHedge News https://ift.tt/3Aq5c7l Tyler Durden

US Embassy In Ukraine Shows Off First Biden ‘Lethal Aid’ Shipments To Arrive

US Embassy In Ukraine Shows Off First Biden ‘Lethal Aid’ Shipments To Arrive

The US Embassy in Kyiv, Ukraine, on Saturday is showing off the first part of a $200 million “security assistance” package for Ukraine’s army which has arrived rather quickly after the Biden administration approved it. 

“The donation, which includes close to 200,000 pounds of lethal security assistance, including ammunition for the front line defenders of Ukraine, demonstrates the United States’ strong commitment to Ukraine’s sovereign right to self-defense,” the U.S. embassy said in posts on Facebook and Twitter.

In total Washington has issued over $2.7 billion in defense aid going back to the 2014, with the latest commitment of $650 million more being pledged last year.

The embassy featuring photographs of the newly arrived lethal aid is meant as assurance to its Ukrainian ally, but is also aimed at Moscow in a bit of continued muscle-flexing as the West has condemned its troop build-up near the border. This despite that Friday talks in Geneva between Antony Blinken and Russian FM Sergey Lavrov seemed to open a path toward de-escalation talks.

The US embassy-Kiev described

“The United States will continue providing such assistance to support Ukraine’s Armed Forces in their ongoing effort to defend Ukraine’s sovereignty and territorial integrity against Russian aggression. As President Biden told President Putin, should Russia further invade Ukraine, the United States will provide additional defensive material to Ukraine above and beyond that already provided.”

Likely much of this initial defense aid features anti-tank missiles and other anti-armor weaponry, and additional munitions. Of most concern for the West and Ukraine’s national forces remains thwarting Russia’s tanks if they were to enter Donbass.

The Biden White House had authorized a rush delivery of US-made weapons to be transferred to Kiev via Baltic allies, namely Estonia, Lithuania, and Latvia. The UK has already made multiple deliveries on large Globemaster transport planes – and even The Netherlands has signaled it will join the NATO allies.

However, Germany has stuck by its policy of not delivering weapons to potential conflict hot spots, and has made it clear to allies that no German arms should be transferred.

Tyler Durden
Sat, 01/22/2022 – 15:00

via ZeroHedge News https://ift.tt/3IvNz8C Tyler Durden

Saudis Bomb Hospital & Youth Soccer Field In Yemen, Over 200 Killed

Saudis Bomb Hospital & Youth Soccer Field In Yemen, Over 200 Killed

Authored by Andrea Germanos via Common Dreams,

A series of Saudi-led airstrikes were blamed Friday for killing scores of people in Yemen as civilians, including children, continue to suffer deadly consequences of the U.S.-backed conflict that has lasted for years. Overnight bombings included one that targeted a prison holding mostly migrants in the northern city of Sa’ada, an area described as being under the control of Houthi forces.

“It is impossible to know how many people have been killed. It seems to have been a horrific act of violence,” said Ahmed Mahat, MSF’s (Doctors Without Borders) head of mission in Yemen. A hospital in the city “has received 138 wounded and 70 dead” [later revised to over 200 killed] and is “so overwhelmed that they can’t take any more patients,” MSF said.

Strikes also hit further south in the port city of Hodeida. According to Agence France-Presse: “Video footage showed bodies in the rubble and dazed survivors after an air attack from the Saudi Arabia-led pro-government coalition took out a telecommunications hub. Yemen suffered a nationwide internet blackout, a web monitor said.”

The humanitarian group Save the Children said that at least three children, as well as more than 60 adults, were reported killed by the series of strikes, though the number of confirmed casualties would likely rise.

The children killed as a result of the Hodeidah strike had been playing on a nearby football field, the group said. “Children are bearing the brunt of this crisis,” said Gillian Moyes, the group’s country director in Yemen.

“They are being killed and maimed, watching as their schools and hospitals are being destroyed, and denied access to basic lifesaving services,” she said. “They are asking us: Does it matter if I die?”

“The initial casualties report from Sa’ada is horrifying,” Moyes added. “Migrants seeking better lives for themselves and their families, Yemeni civilians injured by the dozens, is a picture we never hoped to wake up to in Yemen.”

In the U.S., the Biden administration—like previous administrations—has faced calls to stop supplying Saudi Arabia with weapons and other support being used to wage the bombing campaign on Yemen that’s estimated to have killed over 300,000 Yemenis since 2015 and unleashed what the United Nations called the world’s worst humanitarian crisis.

In The New Republic earlier this month, the Quincy Institute’s Trita Parsi and Annelle Sheline wrote:

Despite Biden’s promise to end the war in Yemen and his pledge to make the Saudis “pay the price, and make them in fact the pariah that they are,” he has fallen back into America’s hegemonic role in the Middle East: taking sides, making America a party to conflicts, and selling more weapons—U.S. interest, peace, stability, and human rights be damned.

Responding to news of the overnight airstrikes, journalist Spencer Ackerman tweeted: “America is complicit in this, as it has been complicit in every Saudi or UAE airstrike of this horrific war that Biden and his senior officials once promised to end. I hope they see these children when they sleep at night.”

The International Committee of the Red Cross sounded alarm about the recent intensification of violence in Yemen.

“It is essential that we protect the lives of people in armed conflict. The human toll that we witness in Yemen is unacceptable,” Fabrizio Carboni, ICRC’s regional director for the Near and Middle East, said in a statement Thursday.

“Civilians living in densely populated areas have been exposed to increased attacks,” he continued, “causing death and injury and deepening the psychological trauma among the affected communities after seven years of war.”

The deadly strikes came after a Tuesday statement from the United Nations High Commissioner for Human Rights also expessing concern about the uptick in violence in Yemen.

“In recent days,” said spokesperson Ravina Shamdasani, “there have been dozens of airstrikes and artillery strikes launched by the parties with seemingly little regard for civilians.”

“The fighting has damaged civilian objects and critical infrastructure, including telecommunication towers and water reservoirs, as well as hospitals in Sana’a and Taizz. With frontlines shifting rapidly over large areas, civilians are also exposed to the constant threat of landmines,” she said. “As has been shown time and time again,” added Shamdasani, “there is no military solution to the conflict in Yemen.”

Tyler Durden
Sat, 01/22/2022 – 14:30

via ZeroHedge News https://ift.tt/3tQwceI Tyler Durden

Oil Traders Will “Break The Fed” And “Make Jerome Powell Cry Uncle”

Oil Traders Will “Break The Fed” And “Make Jerome Powell Cry Uncle”

Submitted by QTR’s Fringe Finance

This is Part 2 of an interview with Harris Kupperman, founder of Praetorian Capital, a hedge fund focused on using macro trends to guide stock selection. Mr. Kupperman is also the chief adventurer at Adventures in Capitalism, a website that details his investments and travels.

Part 1 of this interview will be found here.

Harris is one of my favorite Twitter follows and I find his opinions – especially on macro and commodities – to be extremely resourceful. I’m certain my readers will find the same. I was excited to get the chance to ask him about anything I wanted, which I did last week.

Q; What one sector of the equities market would you dive into now if you had to pick only one – and why?

It’s not an equity, but if there was one asset to focus on, it would be long-dated OTM oil futures options. They’re the purest way to get long inflation and they’re mispriced compared to the potential upside. All sorts of right-tail assets seem mispriced, but the IV on oil futures options seem particularly mispriced as it is so cheap compared to the parabolic upside potential.

In terms of equities themselves, I think offshore oil services are about to really inflect.

With Brent at $86, demand for offshore production will come back in a major way. Especially because many Western governments are making it so painful to explore and produce oil domestically. As a result, the incremental supply will come from places that need the oil revenue—much of this will be offshore.

Meanwhile, much of this offshore equipment trades at tiny fractions of replacement cost. At the top of the cycle, these companies often trade for a few times replacement cost. I think we’re about to a surprising move in the price of oil, and these equities are the fulcrum security in the oil sector—but since most have restructured in bankruptcy, they have clean balance sheets and minimal risk if I’m wrong and the sector doesn’t inflect.

Oil is about to surprise people—offshore hasn’t moved yet. That’s where I’d be focusing my time, but buying the 2025, $100 strike oil call just seems like a more elegant way to play this with a lot less operational risk and a whole lot greater upside potential.  

What’s your broader view on markets in 2022? Will they stabilize? Full on crash? Rotation from growth to value?

I think the market will have a lot of volatility, but sort of go nowhere. Instead, I expect a huge sector rotation from Ponzi and high-multiple growth to industrials and commodities.

A lot of these “old economy” businesses trade at low single-digit multiples on cash flow and fractions of replacement cost. They’ve been ignored for years, they’ve cut costs, consolidated and not invested much in capacity. We’re at the part of the cycle where they finally earn huge returns. That’s where you want to be.

Meanwhile, as the Fed raises rates and tightens liquidity, the high-multiple stuff will get bludgeoned. It’s amazing how many multi-billion market cap stocks are down 75% from the highs last year, yet they still seem ludicrously expensive. This will eventually get corrected and corrected with a lot more pain.

What fiat currencies do you prefer to own, assuming you have to own one? And why?

I think crypto has had its bubble. It now needs to consolidate. There’s far too much speculative interest for me. I sold out of my Bitcoin last spring for a 6x from where I bought it in 2020.

Longer term, I’m quite partial to Monero and own a few. It’s what everyone thinks Bitcoin is, while Bitcoin is actually something VERY different. The privacy aspect, along with negligible transaction costs will make Monero viable. It’s out of consensus, but adoption continues to accelerate. During the coming wash-out in risk assets, I intend to pick up some more Monero.

Is the Fed still firmly in control of the bond market. Is there any chance “bond vigilantes” take over at some point?

Oil traders are the new bond vigilantes. They’ll be the ones that break the Fed and force JPOW to cry uncle. The Fed hasn’t lost control yet, but when oil breaks $100, they’ll go into panic mode.

I worry that they’ll eventually crush everything with a CUSIP while trying to stop oil from going parabolic. Naturally, they’ll fail at this because they have little to do with the price of oil, but that won’t stop them from trying.

What’s one lesson you’ve learned in your investing career that you want to pass on and think is important in 2022?

Leverage is dangerous. We’re entering a much more volatile period. I think the overall market will continue going much higher because they’ll keep stimulating, but there will be periods where they panic and stop stimulating.

Equities can literally trade at any price. Make sure that on these sharp and steep pullbacks, you aren’t the one forced to sell at the lows. Instead, you want to be the one who buys when others get margin calls. Play with less leverage, keep extra liquidity and expect that there will be huge opportunities coming up.

What’s your outlook on how the world thinks about Covid in the coming year?

Covid is a bad cold that has evolved into a mental disorder. You really need to separate the two. Left alone, Covid the virus will evolve to be less dangerous to humans. Unfortunately, governments like to tinker and convince voters that they’re doing something useful. Vaccinating a huge percentage of the population, with multiple boosters, is likely to change how the virus would naturally evolve. We’re already seeing this with Omicron.

The triple vax’d are more susceptible than the double vax’d, and the unvax’d are almost immune to it. This is an adjusted evolutionary path and governments should be terrified of the data. This is a warning that is getting ignored. Most scientists have always known that vaccinating against a coronavirus is a mistake—it’s the reason that they don’t vaccinate livestock against coronaviruses.

They’ve already tried that and know it doesn’t work, with the added risk that the virus can evolve to be more dangerous. What we should have done is gone for herd immunity, protected the at-risk, and gotten on with life.

Unfortunately, Covid has evolved into this mental disorder where people walk around with cloth diapers on their faces and scrub their hands with alcohol all day. There’s this whole neurosis to it, with people lecturing others on if they’re going through the motions correctly.

Governments have been quick to realize that a large portion of the population is mentally unstable and easily manipulated. They’ve prayed upon this to gain power and tell these people that their mental disorder is now normal.

COVID-19 Is Hurting Our Mental Health. But What Can We Do About It? |  Medicine at Michigan

Eventually, most people will get bored of role-playing “pandemic,” and they’ll push back against government-created inconveniences. We’ll return to sanity, while a lunatic fringe will continue with their new neuroses. I finally believe we’re now past peak-stupid, but I’ve thought that a few times and then governments have once again tried to flex their powers and scare people into acting insane.

Fortunately, people are starting to wake up to all of this. In another few quarters, Covid, the mental disorder, will hopefully mostly be over with—though we’ll have the residual question about long-term health risks from these experimental mRNA vaccines—which is still quite a wild-card.

You have to remember that governments are just a collection of politicians trying to guess which way the mob is trending. As the mob adjusts, the smarter politicians will follow the voters and hopefully this thing ends. Here in Florida, no one has worn a mask in 18-months, yet you have these tourists with 2 masks on at the beach.

It’s quite hilarious. But then after a few days in Florida, they attune culturally and no longer fear germs as much. This process will happen everywhere as people realize that this is all just a bad cold. They’ll see others going on with their lives without dying. People will adjust and the more astute politicians will try to stay in front of this trend. Until then, we just have to wait it out and watch this crazy psychological experiment unfold…

Part 1 of this interview can be found here

Now read:

  1. Capitalism And Common Sense Will End Vaccine Mandates In 2022

  2. Oil Is Now “Out Of OPEC’s Hands” And Is “Going Higher”

  3. Short The Whole F*cking Vaccine Thing

ZeroHedge readers always get 20% off a subscription to my blog using this link: GET 20% OFF FOR LIFE

DISCLAIMER: 

All content is Harris Kupperman’s opinion. I own physical silver, GLD, GDX, GDXJ, PAAS, PSLV and a number of other metals/miners/gold/silver equities as well as numerous companies with exposure to oil and uranium. Readers should assume Harris also has positions in all trends/equities/etc. mentioned in this interview – as do I. We will likely stand to benefit if prices of commodities rise and/or our prognostications come true. None of this is a solicitation to buy or sell securities. It is only a look into personal opinions and personal portfolios. Positions can change immediately as soon as I publish this, with or without notice. These are not the opinions of any of my employers, partners, or associates. I get shit wrong a lot. I’m not a financial advisor, I hold no licenses or registrations and am not qualified to give advice on anything, let alone finance or medicine. Talk to your doctor, talk to your financial advisor or your therapist. You are on your own. Do not make decisions based on my blog. I exist on the fringe.

Tyler Durden
Sat, 01/22/2022 – 13:30

via ZeroHedge News https://ift.tt/3rNhq66 Tyler Durden

Fear And Panic As Bitcoin Crashes 50% From All Time High

Fear And Panic As Bitcoin Crashes 50% From All Time High

Just two months after cryptos hit an all time high amid widespread euphoria that the newly launched bitcoin ETF would lead to even more substantial upside, the two largest tokens have lost half of their value, with the broader crypto sector suffering more than $1 trillion in losses amid an accelerating liquidation panic that the Fed’s tightening cycle will lead to another crypto winter. 

Such is the volatility in the sector where, as Bloomberg put it overnight, there has been just one constant recently: “decline after decline after decline.” Of course, for veteran hodlers, Bloomberg hyperbole seems trivial in a world where 80% drawdowns are the norm and the current drop may have a ways to go before it hits a bottom, before a new all time high is hit.

Where Bloomberg is right however, is that superlatives for the latest carnage have been easy to come by: Friday’s decline led to the liquidation of more than $1.1 billion in crypto futures positions and overall more than $1 trillion in market value has been destroyed since the last peak. In other words, “the meltdown is pouring salt on an already-deep wound.”

After the latest furious puke that pushed Bitcoin RSI’s indicator to the most oversold level since the covid crash in March of 2020…

… Bitcoin, which lost more than 12% on Friday, saw its price drop just above $34,000 with Ethereum sliding as low as $2,400, as the two largest digital assets now trade at a 50% discount from their all time highs and are back to levels last seen in late July, early August. Other digital currencies have suffered just as much, if not more, most meme coins mired in similar drawdowns.

While the selling has been relentless for the past two months, it accelerated in the past three weeks, after the latest Fed minutes – published in early January – showed its intention to not only hike rates but to accelerate the unwind of its balance sheet, which has sent all “bubble baskets” plunging, with bitcoin getting hit especially hard amid the carnage.

And while there have been much larger percentage drawdowns for both Bitcoin and the aggregate market, according to Bespoke,  this marks the second-largest ever decline in dollar terms for both.

“It gives an idea of the scale of value destruction that percentage declines can mask,” wrote Bespoke analysts in a note. “Crypto is, of course, vulnerable to these sorts of selloffs given its naturally higher volatility historically, but given how large market caps have gotten, the volatility is worth thinking about both in raw dollar terms as well as in percentage terms.”

Another fact that Bloomberg gets right, is that over the past year, cryptos have transformed from relatively uncorrelated assets providing diversification during market turbulence, into what is effectively a high beta stock. This is easily seen in the following chart showing the 60d correlation between cryptos and stocks. One can thank institutional adoption for that, because the same institutions that are now facing margin calls on their tech holdings, are also dumping cryptos to provide much needed liquidity.

“Crypto is reacting to the same kind of dynamics that are weighing on risk-assets globally,” said Stephane Ouellette, chief executive and co-founder of institutional crypto-platform FRNT Financial. “Unfortunately for some of the mature projects like BTC, there is so much cross-correlation within the crypto asset class it’s almost a certainty that it falls, at least temporarily in a broader alt-coin valuation contraction.”

Antoni Trenchev,, co-founder of Nexo, cites Bitcoin’s correlation to the tech-heavy Nasdaq 100, which right now is near the highest in a decade. “Bitcoin is being battered by a wave of risk-off sentiment. For further cues, keep an eye on traditional markets,” he said. “Fear and unease among investors is palpable.”

According to  Art Hogan, chief market strategist at National Securities, it’s useful to think of cryptocurrencies as living in the same space as other speculative sectors, including special-purpose acquisition companies and electric-vehicle makers. “When we’re in an environment where all of those riskier assets are selling off, crypto is going to find itself doing the same,” Hogan said. “When the Nasdaq 100 or any of the other more-speculative, rapid-growth, momentum-type asset classes start to gain some traction, so will cryptocurrencies.”

Unfortunately for Bitcoin longs, one place where the token’s correlation is especially high is that to such market naplam as Cathie Wood’s sinking ARK Innovation ETF, a pandemic poster-child of speculative risk-taking. That correlation stands at around 60% year-to-date, versus about 14% for the price of gold, according to Katie Stockton, founder and managing partner of Fairlead Strategies, a research firm focused on technical analysis. It’s “reminding us to categorize Bitcoin and altcoins as risk assets rather than safe havens,” she said.

Perhaps unaware what “hodling” means, data from Coinglass shows that more than 342,000 traders had their positions closed over the past 24 hours, with liquidations totaling roughly $1.1 billion.

“Digital-currency markets in total have been challenged this month,” said Jonathan Padilla, co-founder of Snickerdoodle Labs, a blockchain company focused on data privacy. “There’s definitely some pain there.”

Though liquidations have spiked, the numbers are rather muted when compared to previous declines, according to Noelle Acheson, head of market insights at Genesis Global Trading. Acheson points out that Bitcoin’s one-week skew, which compares the cost of bearish options to bullish ones, spiked to almost 15% on Wednesday compared to an average of about 6% in the past seven days.

“This flagged a jump in bearish sentiment, in line with overall market jitters given the current macro uncertainty,” she said.

Amid the pain, some of bitcoin’s most faithful are professing patience…

… while others are starting to wonder out loud at what point the battering might end. Famed crypto investor and (former?) billionaire Mike Novogratz mused on Twitter that “this will be a year where people realize being an investor is a difficult job.”

Unfortunately for Novogratz, 2600 did not hold and Eth is now trading below 2,400.

Still, many point out that like on all previous occasions when cryptos crashed, they eventually rebounded to new all time highs. At some point, sellers will become exhausted and the market could see some capitulation soon, said Matt Maley, chief market strategist for Miller Tabak + Co. “When that happens, the institutions will come back in in a meaningful way,” he said. “Once the asset class becomes more washed-out, they’ll have a lot more confidence to come back in and buy them. They know that cryptos are not going away, so they’ll have to move back into them before long.”

But it’s not just central bank tightening fears and liquidation technicals that have depressed cryptos: one can also throw in a relentless news cycle, where just in recent days, regulators from Russia, the U.K., Singapore and Spain all announced interventions that could undermine crypto companies looking to grow in those regions. Meanwhile, the Biden administration is preparing to release an initial government-wide strategy for digital assets as soon as next month and task federal agencies with assessing the risks and opportunities that they pose, Bloomberg reported late on Friday.

Testing the resilience and patience of the faithful, so far the sharp drop below the psychological level of $40,000 has failed to serve as an upward inflection point. Crypto proponents say heavy liquidations often serve to cut out the froth in easy-win asset speculation, helping to solidify new bottoms in the market.

Ultimately, the real support will come from none other than the Fed, which will soon realize that it is hiking into a slowing economy…

… and will be forced to be far more dovish during this week’s FOMC meeting, a reversal which should serve to send risk assets sharply higher.

“Fear and unease among investors is palpable,” Nexo’s Trenchev,said. “If we see a bigger selloff in equities, expect the Fed to verbally intervene to calm nerves and that’s when Bitcoin and other cryptos will bounce.”

In other words, the more the Fed tightens – or the more the Fed scares markets into believing it will tighten – the bigger the market selloff, and the worse the economic slowdown, until eventually Powell will be forced to ease, a key point brought up by  Bank of America CIO Michael Hartnett yesterday.

Incidentally, it also means that the faster markets crash, the faster the Fed panics, and is forced to stabilize stocks because even if the new and improved Powell Put is well below previous levels, the Fed can’t risk a market crash just to appease Biden’s demands for an inflationary slowdown so Democrats aren’t destroyed in the midterms.

And incidentally, this weekend’s ongoing selloff in cryptos means that while stocks are currently mercifully not trading, Monday should be another bloodbath, as Jim Bianco reminds us.

One thing is certain: several more 2% drops in the Nasdaq, and Powell – who two years ago crossed the Fed’s final rubicon and bought corporate bonds to halt a catastrophic collapse – will be making emergency phone calls to put an end to the carnage. As such, a continuation of the meltdown may just be the best thing that the bitcoin faithful can hope for.

Tyler Durden
Sat, 01/22/2022 – 13:04

via ZeroHedge News https://ift.tt/3ApSaq4 Tyler Durden

Rickards: Bad News, I’m Afraid

Rickards: Bad News, I’m Afraid

Authored by James Rickards via DailyReckoning.com,

The breakdown of global supply chains is well-known by now. Whether it’s finding groceries in your supermarket, buying a new car or buying appliances like dishwashers and refrigerators, goods are scarce. Also, deliveries take forever and choices are limited.

Many people wonder why the problem isn’t going away. Here’s the answer:

The supply chain is a complex dynamic system. When any complex system collapses, you can look for specific causes but that’s usually a waste of time. Systems collapse internally because they are too large and too interconnected and require too many energy inputs to keep going.

Any specific cause is more likely to be a symptom than a true cause. It’s frustrating, but that’s the answer.

Most Americans’ first encounter with the supply chain meltdown was in the spring of 2020 during the first wave of the coronavirus pandemic. Shoppers noticed that items like hand sanitizer and paper goods at Costco and other big-box stores were cleaned out.

It seemed that Americans who were locked down and quarantined at the time were hoarding these products because they had no idea when they would be allowed to venture out again.

The shortages were real, but were limited to specific products. The other aisles at Costco were stocked and so were all the other stores around (at least those that were allowed to remain open).

Now It’s Everything

But it’s not just Costco this time. It’s every supermarket, convenience store and other retail outlet from coast to coast. And it’s not just cleaning products and paper goods. Your local supermarket might have bare shelves for eggs, peanut butter, milk and other staples.

It’s not a case of being stocked out of all goods all the time. Your store is like a box of Cracker Jack – you never know what’s inside.

Many items are available, but many are not. It’s a case of stockouts of certain goods from time to time. But you can be sure that something will be missing and some of the shelves will be bare.

Still, there’s a narrative around that the crisis is temporary, that steps are being taken to alleviate shortages and backlogs and things will soon be back to normal.

The narrative blames the shortages on the pandemic and the number of workers home with COVID. It says that things will clear up when the virus is under control. That’s the narrative, but it’s not the reality.

The evidence is that the supply chain crisis is just getting started. It’ll be with us for years and have huge negative economic effects.

All Connected and All Collapsing at Once

No one doubts that the pandemic, especially the Omicron variant, has had a major impact and has caused millions to fall ill and miss work. It’s also likely that the missing employees due to illness are part of the reason shelves are not fully stocked.

But they are not a prime cause of the supply chain chaos.

Even if stores were fully staffed, there would still be shortages and delays due to everything from a shortage of truck drivers, late container cargo shipments from Asia, manufacturing delays due to lack of inputs, energy shortages and many other impediments.

That’s the point.

The supply chain is collapsing at every stage due to bottlenecks at every other stage. Commodity inputs are scarce, partly due to energy shortages at mines. Manufacturing is behind due to lack of commodity inputs. Deliveries are behind due to manufacturing delays. And finally, shelves are bare due to nondelivery of orders and a worker shortage.

It’s all connected and it’s all collapsing at once. So don’t believe the happy talk about a “temporary” supply chain crisis.

I’ll say it again: The crisis will last for years with predictable negative effects on economic growth.

The “Factory to the World” Is Closing Down

One major concern is China. China is currently pursuing a COVID Zero policy. This means that China has zero tolerance for even a single case of COVID.

If COVID appears, China will isolate the individual, do a massive track-and-trace operation and then forcibly remove entire neighborhoods to quarantine camps outside the city limits for mandatory lockdowns of 14 days or more.

If more than a few cases are detected, China will follow the same procedure but on a much larger scale. They will relocate hundreds of thousands of people if needed and shut down entire cities. This has already happened in Xi’an, a city of 1.5 million people and a major manufacturing center.

A new lockdown just arose in Henan province, which is the center of Chinese electronics production. China has also locked down the port of Ningbo, which is the second largest port in China after Shanghai, and one of the largest in the world.

China has also required that crews on arriving vessels must be confined to the vessel and are not allowed onshore for normal rest and recreation. Since these crews often spend six months or more at sea, vessel operators are starting to schedule trips that avoid China.

That means that even when goods are produced, they cannot necessarily be shipped because of a shortage of vessels and crews. The situation is getting worse, not better, and will deteriorate even more as we move toward the Beijing Olympics and the Lunar New Year holidays in China.

In effect, the “factory to the world” has decided to shut down the factory, or at least large parts of it for months to come.

This will continue to impact the U.S., which Americans are not accustomed to or prepared for.

Forced Labor

Americans associate bare shelves with Third World countries or perhaps East Germany during the Cold War. That last time Americans have had to deal with shortages on this scale were the gas crises of the 1970s and rationing during World War II.

Importantly, the phenomenon is not limited to the United States – it’s a global event. And it’s leading to extreme government measures. Take a look at Australia.

As in the U.S., Australia has large numbers of unemployed workers. They receive benefit payments similar to welfare and unemployment from an agency called Centrelink.

Well, the government has now declared that unemployed benefit recipients must work several hours per week to restock supermarket shelves in order to keep their Centrelink benefits. So, social benefits are being used to draft forced labor to deal with a supply chain problem.

Australia has become a kind of prison camp based on government dictates concerning the virus. It’s a good example of how COVID has empowered governments to dictate every aspect of citizens’ lives. This won’t be the last government mandate in Australia or here. And there’s a powerful lesson to be learned here:

Once governments get a taste of neo-fascism, they always want more. That’s true even in a liberal democracy like Australia. We’re seeing similar phenomena play out in western European democracies as well.

A Race Against Time

The other thing we can be sure of is that these mandates will slow the economy and destroy wealth.

The bad news for investors, again, is that this situation will persist for years. It’s not easy to correct and definitely not something that can be corrected quickly.

In markets, this will play out as higher costs, lower earnings and ultimately lower stock prices.

With markets still close to all-time highs, this could be a good time to lighten up on stocks before the supply chain reality catches up with the stock market bubble.

When it does, it won’t be pretty.

Tyler Durden
Sat, 01/22/2022 – 12:30

via ZeroHedge News https://ift.tt/3FZ1jYc Tyler Durden