US Signs Commitment With Israel To Uphold Military Edge Over Gulf States

US Signs Commitment With Israel To Uphold Military Edge Over Gulf States

Tyler Durden

Fri, 10/23/2020 – 21:00

Authored by Dave DeCamp via,

Potential F-35 sales to Gulf states have driven US officials to take extra steps to guarantee Israel’s military superiority over its neighbors, known as the Qualitative Military Edge (QME).

On Thursday, Secretary of Defense Mark Esper and Israeli Defense Minister Benny Gantz met at the Pentagon and signed a joint declaration affirming Washington’s commitment to ensure Israel’s QME.

Prime Minister Benjamin Netanyahu stands in front of an F-35 fighter jet at the Israeli Air Force’s Nevatim base, via The Times of Israel.

“I want to state, again, how committed we are to Israel’s Qualitative Military Edge when it comes to defense sales, and our commitment to Israel’s security, which has been longstanding and it’s guaranteed and ironclad,” Esper said.

Details of the declaration are not clear, and it may be largely symbolic since maintaining Israel’s QME is already mandated by US law. A source from the meeting told The Jerusalem Post that an agreement was formulated to further Israeli acquisitions of US weapons.

The US sale of F-35 fighter jets to the UAE that is rumored to be part of Abu Dhabi’s normalization agreement with Israel was initially objected to by Israeli officials. But now, Israel could be angling to get some new weapons out of the deal. In September, Israeli Prime Minister Benjamin Netanyahu submitted a wishlist of advanced weaponry to President Trump worth $8 billion.

The F-35 sale has met resistance in Congress, with upholding Israel’s QME being a top priority on both sides of the aisle. A group of bipartisan lawmakers introduced a bill in the House that would effectively give Israel veto powers over US arms sales to the Middle East.

via ZeroHedge News Tyler Durden

​​​​​​​WeWork Default Looms As COVID DOwnturn Sparks Fitch Downgrade

​​​​​​​WeWork Default Looms As COVID DOwnturn Sparks Fitch Downgrade

Tyler Durden

Fri, 10/23/2020 – 20:40

Even though Global Head of Real Estate at WeWork, Peter Greenspan, recently told Ken Biberaj, US Managing Director at real estate services firm Savills, in an interview that the firm’s balance sheet is “strong,” Fitch Ratings downgraded the struggling co-working company on Thursday evening, warning about the increased default risk because the virus pandemic has resulted in a permanent shift in lower office space demand. 

The rating agency slashed WeWork’s long-term issuer default rating to CCC from CCC+. The CCC tier, essentially the lowest level in the junk bond market, implies the once high-flying startup has a significant chance of defaulting on its obligations. 

Fitch’s downgrade is due to the “viability of WeWork’s business model in light of a potential lasting shift by companies to a hybrid office model that leads to permanently lower office space demand.” 

Fitch said, “WeWork has made material progress to reduce its cash burn rate, in a scenario where demand is structurally lower, Fitch sees WeWork as potentially requiring additional liquidity sources inclusive of and beyond the full $3.3 billion SoftBank financing commitment.” 

Maybe that’s why SoftBank’s Masayoshi Son plowed $1.1 billion into the sinking ship, known as WeWork, in August to help it weather the coronavirus pandemic. 

Fitch said WeWork’s cash burn rate had been cut by nearly 40% from $4 billion in 2019 to $2.5 billion in 2020. Under one scenario, absent of a second coronavirus wave and structurally lower office demand, Fitch sees WeWork’s burn rate decreasing to about $900 million, with much of the funding coming from SoftBank unsecured notes.

As for the scenario with a second wave and structurally lower office demand, which at the moment, appears to be in play, Fitch sees WeWork with a cash burn of about $1.5 billion in 2021 and 2022. Fitch questions if the struggling co-working company can receive funding in this scenario. 

The virus pandemic forces a new era of remote working, and a permanent demand shift lower for office space. Fitch warns:

“WeWork’s business model is potentially compromised due to the coronavirus pandemic…” 

Fitch believes the company will have to “negotiate exits” rather than “walk away from committed leases,” so it can preserve its “reputation” without “destabilize its business model.” 

And rather than negotiating exits, WeWork, at some of its buildings, just stopped paying rent

A previous concern held by the rating agency is that a reduction in leasing demand by WeWork in top cities could result in lower rents for other commercial spaces that would reduce the relative attractiveness of WeWork spaces. 

WeWork’s bonds maturing in 2025 trade around 63 cents on the dollar as more downside is possible. 

As for SoftBank’s Vision Fund’s upcoming SPAC, well, it remains to be seen if it will be the vehicle to take struggling WeWork public. 

We give the last word to Fitch: “WeWork would be considered a going concern in bankruptcy and that the company would be reorganized rather than liquidated.” 

via ZeroHedge News Tyler Durden

To ‘Save’ People From COVID, Puerto Rico Shuts Down 911 Call-Centers

To ‘Save’ People From COVID, Puerto Rico Shuts Down 911 Call-Centers

Tyler Durden

Fri, 10/23/2020 – 20:20

Authored by Simon Black via,

Are you ready for this week’s absurdity? Here’s our Friday roll-up of the most ridiculous stories from around the world that are threats to your liberty, risks to your prosperity… and on occasion, inspiring poetic justice.

Puerto Rico Shuts Down 911 Over COVID

Puerto Rico has two centers which field 911 emergency calls for the island.

This week, BOTH of those call centers were shut down because employees tested positive for COVID.

The government instead instructed residents of Puerto Rico to call an alternative 10 digit number if they need emergency assistance.

Puerto Rico is not known for having the most efficient government… but seriously, this was the best solution they could think of? They couldn’t find replacement workers, a temporary facility, or simply reroute 911 calls to the emergency number they now advise calling?

That’s the COVID craze for you– if shutting down 911 saves just one life, it’s worth it.


Click here to read the full story.

*  *  *

Coronavirus Funds End Up in Brazilian Senator’s Butt

The President of Brazil recently celebrated the end of corruption in the country.

But one of his allies must not have received the memo.

Police raided a Brazillian Senator’s home over evidence that he diverted Coronavirus response funds from the government to criminal enterprises.

Some of that money allegedly ended up in the Senator’s pocket– or more accurately, his butt.

During the raid the Senator was caught hiding over 30,000 reais (over $5,000) in his underpants, between his butt cheeks.

Click here to read the full story.

*  *  *

Facebook Fights Fake News: An Obviously Satirical Newspaper

The Babylon Bee is a gem of a satirical news website, with headlines such as, “Nation Longs For More Civilized Age When Politicians Settled Disputes With Pistols,” and “To Improve Next Debate Both Candidates’ Mics Will Be Muted The Entire Time.”

Last week we talked about how the Twitter mob– and dictionary– decided the phrase “sexual preference” was offensive after Amy Coney Barrett used it during her Supreme Court Senate hearings.

Commenting on this Senate witch hunt to find something wrong with the judge, The Babylon Bee ran a headline that said, “Senator Hirono Demands ACB [Amy Coney Barret] Be Weighed Against A Duck To See If She Is A Witch.”

It’s a reference to a joke from the 1970s film The Monty Python and the Holy Grail.

But Facebook said it was incitement to violence, insinuating the article could make people want to burn witches…

Facebook demonetized The Babylon Bee until it edits the article.

But The Babylon Bee has refused to edit the satirical article.

Looks like the fake news is speaking a little too much truth for Facebook.

Click here to read the full story.

*  *  *

Now It’s Offensive to Work Hard

This summer the tax-funded KIPP Charter Schools decided to retire the slogan “Work hard. Be nice,” because it “supports the illusion of meritocracy.”

KIPP leadership thinks it is wrong to tell kids that hard work is all it will take to be successful, because there is something else standing in their way.

“Working hard and being nice is not going to dismantle systemic racism,” reads the KIPP website, explaining the decision to nix the old motto.

The new religion of wokeness preaches that everyone is a helpless victim. No amount of hard work will get you ahead.

KIPP hasn’t released a new slogan yet but maybe they’ll try, “Seize the means of production. Execute the Bourgeoisie.”

Click here to read the full story.

*  *  *

San Diego School District Abolishes Grades to ‘Combat Racism’

Students in San Diego schools will no longer have to do homework, turn in assignments, or take tests, because none of it will count toward a grade anyway.

Instead teachers will decide if a student has mastered the material.

How will teachers make this determination without some kind of test? Well, there aren’t any details on that yet.

But surely it will be less systemically racist than an A, B, or C letter grade.

Click here to read the full story.

*  *  *

Pennsylvania Restaurant that Opened in Violation of Lockdown “Not Guilty”

A Pennsylvania restaurant opened to full capacity in May in defiance of Pennsylvania’s lockdown orders and safety procedures.

The restaurant was cited and fined, but they went to court and pleaded not guilty.

Last week, a judge found in the restaurant’s favor, saying the Department of Agriculture fined the restaurant for violations it could not lawfully cite them for.

Click here to read the full story.

*  *  *

Twitter Mob Angry that a white Israeli actress will play a Macedonian Greek

The Twitter mob erupted over the decision to cast a white Israeli to play Cleopatra in an upcoming film.

The mob says the movie is white-washing history since clearly the Egyptian princess should be played by a Black actress, right?

Well actually, Cleopatra was of Macedonian Greek heritage. And she ruled Egypt before the Arab conquest.

So that means Cleopatra was neither Arab nor Black. But why should facts get in the way of wokeness? Once again, ignorance prevails!

Click here to read the full story.

*  *  *

On another note… We think gold could DOUBLE and silver could increase by up to 5 TIMES in the next few years. That’s why we published a new, 50-page long Ultimate Guide on Gold & Silver that you can download here.

via ZeroHedge News Tyler Durden

Kremlin Says US Elections Have Become “Competition In Russophobia”

Kremlin Says US Elections Have Become “Competition In Russophobia”

Tyler Durden

Fri, 10/23/2020 – 20:00

This week’s perhaps overly dramatic announcement Wednesday night by the heads of multiple federal agencies – foremost among them Director of National Intelligence John Ratcliffe – alleging new major efforts by Russia and Iran to interfere in the US presidential election formed a key question and talking point by debate moderator Kristen Welker Thursday night.

Welker even referenced as somehow undisputed and settled “truth” the now debunked “Russian bounties” story. Over a month ago the Pentagon and other intelligence heads concluded after an exhaustive investigation that there’s simply no evidence to suggest Russian military intelligence paid Afghan fighters to target Americans.

Final 2020 US presidential campaign debate in Nashville

Russia was certainly paying attention to the debate and was not amused. The Kremlin on Friday blasted what it said was “Russophobia” at the center of the debate.

Kremlin Spokesman Dmitry Peskov told journalists Friday that competition in Russophobia has become a constant in all US electoral processes, regrettably.”

“We are fully aware of this and can only express regret,” he added as quoted in TASS.

“After all, probably, it is the American electorate who is the target audience of these debates, that is, common Americans. It is up to them to decide who won the debate, not us,” the spokesman said.

Indeed the American public is by and large likely growing tired of the endless Russia scapegoating too.

National security pundit and research fellow at Columbia University’s Saltzman Institute of War and Peace Studies Richard Hanania had this to say about just how vapid foreign policy questions have become in this election (when they are offered at all):

Notice how the entire debate on foreign policy was about who was “nicer” to China, Russia, or some other “enemy,” not say whether we should go to war more or less often. There’s a primitiveness and stupidity surrounding discussions of foreign policy that we don’t accept elsewhere, he pointed out.

Over the years Putin himself has increasingly mocked and laughed about the degree to which he personally gets blamed for almost all ills of American society – from election meddling to “weaponizing” race relations to supposedly seeking to take out the national power grid.

via ZeroHedge News Tyler Durden

Saudi Arabia Is Suffering The Consequences Of Its Failed Oil Price War

Saudi Arabia Is Suffering The Consequences Of Its Failed Oil Price War

Tyler Durden

Fri, 10/23/2020 – 19:20

Authored by Simon Watkins via,

Nine months on from Saudi Arabia’s second major oil price war in the last five years, more negative consequences are manifesting themselves. Aside from the irrevocably damaged core relationship with the U.S., the permanent distrust of international investors, and the further alienation of many of its fellow OPEC members, Saudi Arabia is now beginning to discover the true depth and breadth of damage that it has done to its own economy, which will endure for many years to come. 

Figures released at the end of September show that Saudi Arabia’s economy contracted 7 per cent year-on-year (y-o-y) in the second quarter of 2020, with the Kingdom’s private sector showing a negative growth rate of 10.1 per cent, while the public sector recorded negative growth of 3.5 per cent. Saudi’s oil revenue in the first half of the year was 35 per cent lower than a year earlier, while non-oil revenue fell by 37 per cent. Moreover, in the second quarter of 2020 alone, the Kingdom’s petroleum refining activities recorded a 14 per cent y-o-y drop. All of this resulted in a current account deficit of SAR67.4 billion (US$18 billion), or 12 per cent of GDP, in Q220 compared with a surplus of SAR42.9 billion, or 5.8 per cent of GDP, a year earlier, according to Saudi Arabia’s General Authority for Statistics. 

The official line being peddled by various Saudi agencies to explain these appalling numbers is that they are the result of the COVID-19 pandemic outbreak that destroyed demand for oil around the globe. That, of course, is only partly true, as the key element that made this factor exponentially worse was that Saudi Arabia decided to launch yet another oil price war at the same time, the key feature of which was to crash oil prices by ramping up oil production from itself and other OPEC members, plus Russia. For a market already saturated with oil as demand continued to fall away, the price effect on the supply side of the oil price equation was catastrophic and led to unprecedented negative pricing on WTI futures contracts for May. The additional factor that has been overlooked by market commentators is that by the beginning of March, when Saudi launched the last oil price war, it was becoming clear that the COVID-19 outbreak would not be as containable as many had thought even a month or so before. It would have been entirely understandable to the senior Saudis with whom Saudi Crown Prince Mohammed bin Salman (MbS) had shared his plan to try to destroy and/or disable the U.S. shale oil sector again (albeit with exactly the same strategy that had failed so disastrously just four years earlier) that the new oil price war would be put on hold.

This, though, would have required self-control, introspection, and intelligent analysis, the lack of which in MbS was noted by, among many others, the German intelligence service, the Bundesnachrichtendienst (BND), as long ago as 2015. As highlighted in a leaked intelligence dossier from the BND in 2015 entitled ‘Saudi Arabia – Sunni regional power torn between foreign policy paradigm change and domestic policy consolidation’ the then-Saudi Arabian defence minister, then-Deputy Crown Prince Mohammed bin Salman, was “trying to strengthen his own position in the royal succession [regardless] of whether this put Saudi Arabia’s relationship with erstwhile regional allies in jeopardy.”

The intelligence agency added that: “The careful diplomatic stance of older members of the Saudi royal family has been replaced by an impulsive policy of intervention.”  MbS’ impulsive nature had also clearly not taken into account the prescient warning from Saudi Arabia’s deputy economic minister, Mohamed Al Tuwaijri, back in 2016 which stated unequivocally – and completely unprecedented criticism of government policy from a Saudi minister – that:

“If we [Saudi Arabia] don’t take any reform measures, and if the global economy stays the same, then we’re doomed to bankruptcy in three to four years.”

The consequences of the oil price war that prompted this outburst from a Saudi minister were also apparently not taken into account by MbS either who now, as then, appeared more concerned with his own personal position in the royal succession (given the ill-health of King Salman) than with the economic and social health of his country or his OPEC brothers. Between 2014 and 2016 alone, the Saudi-instigated oil price war cost OPEC member states lost a collective US$450 billion in oil revenues from the lower price environment, according to the IEA. Saudi Arabia itself moved from a budget surplus to a then-record high deficit in 2015 of US$98 billion and spent at least US$250 billion of its foreign exchange reserves over that have gone forever. Even before the 2020 oil price war was launched, Saudi Arabia was facing sizeable budget deficits every year until at least 2028.

Moreover, there is no sign whatsoever of any change any time soon to the massive supply overhang that began in earnest with the Saudi-led crude oil overproduction at the same time as the faster spread of COVID-19. According to figures from the end of September from various data analytics companies, Saudi Arabia’s domestic crude oil stockpiles have climbed to the highest since the effects of the COVID-19 outbreak were most deeply felt on the oil market’s supply-demand balance in April. Specifically, according to data analytics firm Kpler, Saudi Arabia’s crude stockpiles were 78 million barrels as of 23 September, the highest since the end of April, with an uncertain demand outlook from Saudi’s key target market of Asia still weighing on pricing. This is not likely to improve in the coming weeks as, despite the reduction in Saudi’s official selling prices (OSPs) for Asia for September and October deliveries, refiners continue to struggle with suppressed oil products’ margins. To add to this negative factor, a large proportion of refineries in Asia have term contracts for up to 80 per cent (or even higher) of the oil they take in and local traders report that many of them are not even using this volume on their current run rates.

With very little new money added into Saudi Arabia’s finances from the internationally-shunned Aramco IPO, oil demand still low due to COVID-19 but supply still high after the latest oil price war, and foreign exchange reserves drawing closer to the minimum level needed to ensure the survival of the economically-crucial SAR-US$ currency peg, Saudi has little choice but to start contemplating ‘selling the family silver’, metaphorically speaking. According to various news reports, Saudi Aramco is currently in talks with global fund manager, BlackRock, and other international investment firms, to sell a stake in a core part of its oil infrastructure – its pipeline business – for around US$10 billion. To put the sheer scale of Saudi Arabia’s MbS-inflicted economic disaster into perspective, though, the entire proceeds from the sale of this core part of the Kingdom’s core industry will only cover 48 days of the guaranteed dividend payments due to shareholders of Aramco. This extraordinary guarantee was, again, a product of the fact that MbS did not want to lose face and cancel the Aramco offering when it had become clear that no serious international investors wanted to touch it due to its multiple toxic elements.

This comes on top of the slew of announcements since the end of the 2020 oil price war of Saudi projects either delayed or cancelled, including the once much-vaunted flagship US$20 billion crude-to-chemicals plant at Yanbu on Saudi’s Red Sea coast. The similarly high-profile purchase of a 25 per cent multi-billion dollar stake in Sempra Energy’s liquefied natural gas (LNG) terminal in Texas is also apparently under threat, although Sempra for its part has said that it continued to work with Aramco and others “to move our project at Port Arthur LNG forward.” In the same vein, according to various news sources, Aramco has suspended its key US$10 billion deal to expand into mainland China’s refining and petrochemicals sector, via a complex in the Northeastern province of Liaoning that would have seen Saudi supply up to 70 per cent of the crude oil for the planned 300,000 barrels per day refinery. In sum, it appears that all of Aramco’s principal projects aimed at diversifying Saudi Arabia away from the relatively zero added-value pursuit of just pumping and selling crude oil are now subject to review and/or outright suspension. 

via ZeroHedge News Tyler Durden

YouTube Is Selling So Many Political Ads It Has Run Out Of Videos To Place Them On

YouTube Is Selling So Many Political Ads It Has Run Out Of Videos To Place Them On

Tyler Durden

Fri, 10/23/2020 – 19:20

While social media makes its best attempt at trying to get Joe Biden elected by censoring stories about his son, YouTube is facing another dilemma: the platform is so inundated with political ads it has nowhere to put them.

As advertising campaigns flood the platform, YouTube has “struggled” to place the ads in front of the desired audience for each, according to Bloomberg

Interestingly enough, YouTube is experiencing the shortage most in “critical swing states”, where ad prices have doubled as a result. This, obviously, makes political advertising far more lucrative for Google, who saw ad revenue fall this year and will announcing its earnings next week. 

Cat Stern, media director for Lockwood Strategy Lab, a digital campaign agency focused on Democratic candidates and progressive advocacy organizations, told Bloomberg: “There’s a crunch. All political advertisers are buying in the same states, to similar audiences.”

YouTube viewers have risen during the pandemic and while commercial ads have been “anemic”, political ads have spiked heading into November 3. In highest demand are the ads that users aren’t allowed to skip through. There are also ad “reservations” for YouTube’s most popular videos that are in high demand. 

Reid Vineis, vice president of digital at Majority Strategies, a Republican political ad firm, said: “The reserves tend to be gobbled up by well-funded campaigns.”

While this occurs, other less-well-funded campaigns have turned to platforms like Hulu and Roku to run their ads. 

Some states, like Iowa, are usually entirely sold out on YouTube. Tim Cameron, co-founder of FlexPoint Media, said: “A lot of late money that’s coming on board — it’s difficult to find anywhere to put it.”

At some points, YouTube has been unable to place up to 75% of the amounts that people are willing to spend. YouTube didn’t comment for Bloomberg’s article, but the article notes that a “code yellow” was assigned to Google’s staff regarding the inability to place ads, meaning Google was increasing the resources it was deploying to try and solve the issue. 

Google has sole more than $139 million in political ads over the last month alone. 

via ZeroHedge News Tyler Durden

Inflationism Has Overturned Society

Inflationism Has Overturned Society

Tyler Durden

Fri, 10/23/2020 – 19:00

Authored by MN Gordon via,

Every now and again, when a sense of doom falls suddenly upon them, the bulls turn to bears.  That is to say, they turn from buying stocks to selling.  What is it that prompts them to panic?  What turns emotions so quickly from greed to fear?

The answers to these questions come a dime a dozen.  You can certainly dream up answers that are at least as good as anything professional analysts put forward.  The most convincing answers, whether true or not, are often those tied to current events.

For example, on Monday stocks sold off.  The Dow Jones Industrial Average (DJIA) dropped 410 points.  The popular rationale was that stocks sold off because of gridlock in Congress over passing a new stimulus bill.  On Tuesday the DJIA was up 113 points.  Apparently, this was because stimulus talks were back on.

But that was before Wednesday, when the DJIA dropped 97 points because the imminent stimulus agreement was still imminent.  Then, on Thursday, the DJIA jumped 152 points because stimulus talks were getting warmer.

Do you see the connection?  Do you see the correlation?  Does it imply causation?  Or is it all a great game of chasing the wild goose?

Moreover, what if the new coronavirus bailout bill passes, but it’s only $1.9 trillion?  Is that less bullish for stocks than a $2.2 trillion handout package?  These are the sorts of inane questions one must ask in a world where the stock market’s been corrupted by government intervention.

How It Works

Government intervention can take many forms.  At the moment, one of the more popular forms of government intervention involves printing up trillions upon trillions of fake dollars.  The Treasury then hands these fake dollars out like they’re handing out breath savers.

The Treasury, of course, borrows the fake money from the Fed.  The Fed gets the fake dollars to loan to the Treasury by creating new credit from thin air.  The symbiotic disharmony of fiscal and monetary stimulus is doomed to fail.  But, in there interim, the stock market loves it.

Yet as more and more fake dollars are doled out to somehow stimulate the economy, the existing stock of dollars is diluted.  The dollar’s value becomes worth less and less.  John Maynard Keynes, in his 1919 work, The Economic Consequences of the Peace, elaborated how it works:

“By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens.  By this method they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some.” 

You see, something both strange and awful is taking place.  The new fake dollars look and feel like real dollars.  They still show up in your bi-weekly paycheck.  You can count them up.  You can see them in your bank account.

But when you go to spend them.  When you use them to buy your family a week’s worth of food at the supermarket, or to pay your monthly utility bill…the dollars no longer work the way they used to.  They’ve been corrupted.  Their value has been confiscated by Washington’s inflationism.

Inflationism Has Overturned Society

The debasement of money by governments has been going on for thousands of years.  The current corruption of your dollars has been going on since the passing of the Federal Reserve Act in 1913.  And it has been going on in earnest since 1971, when Nixon terminated the convertibility of the dollar into gold by foreign governments.

The dollar has lost over 96 percent of its value since 1913.  That means, today’s dollar would be worth less than 4 cents back in 1913.  How much longer this dollar corruption can continue is uncertain.  But there are limits, even if they cannot be strictly defined.

For example, how much bread can be added to a meatloaf before it’s fully corrupted?  How many printing press dollars can be added to the economy before they’re rejected as payment by foreign trade partners?

We may soon find out…

The U.S. national debt’s over $27 trillion.  Yet gross domestic product is only $19.5 trillion.  The budget deficit for 2020 alone was $3.1 trillion.  The forthcoming coronavirus bailout bill ensures that at least $2 trillion more will be added to the debt in 2021.

This debt will never honestly be paid.  But it will be dishonestly paid.  And you’ll get to pay it.  In fact, you already are.  You’re paying it through inflationism.

The dollars you hold.  The dollars you earn.  The dollars you use to buy the things you want and need.  They’ve been corrupted.

Here Keynes, in agreement with Lenin, explains what’s going on:

“There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency.  The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.”

As goes the money, so goes society.  When money’s corrupted, society soon follows.  No doubt, with each passing day, this natural axiom is being clarified with exacting rigor.

via ZeroHedge News Tyler Durden

Ron Perelman’s Asset Firesale Continues As He Lists $106 Million Superyacht For Sale

Ron Perelman’s Asset Firesale Continues As He Lists $106 Million Superyacht For Sale

Tyler Durden

Fri, 10/23/2020 – 18:40

Ron Perelman, who we reported months ago definitely, certainly, almost positively wasn’t selling all of his assets because he was in a cash crunch is now in the process of selling his $106 million superyacht. 

The yacht, called C2, has been listed by broker Burgess for 90 million euros, according to Bloomberg. It was built in 2009, sports 15 cabins, can accommodate 31 guests and and a crew of 27, and also has a swimming pool. If that wasn’t enough, it includes a retractable movie screen and “fold out balconies” that flank both sides of a “beach club”. 

As they did last month, his spokespeople declined to comment on the listing.

Recall, we wrote last month that Perelman was in the process of selling his Gulfstream 650 and “crates” of his artwork. We noted he had already sold his stake in AM General, sold a flavorings company he has owned for decades and had hired banks to sell stock he owns in other companies.

Among the art he was selling was Jasper Johns’s “0 Through 9,” worth about $70 million, Gerhard Richter’s “Zwei Kerzen (Two Candles),” worth about $50 million and Cy Twombly’s “Leaving Paphos Ringed with Waves,” which is worth about $20 million.

Art adviser Wendy Goldsmith said back in September: “What he’s selling is as blue chip as it gets.”

Perelman has been under pressure due to his crashing stake in Revlon. He has seen his fortune drop from $19 billion to just $4.2 billion over the last two years, according to the Bloomberg Billionaire’s Index. His investment company, MacAndrews & Forbes, said it needed to “rework its holdings” back in July due to the pandemic.

As we noted in September, that “reworking” looked more like a fire sale of – well – everything.

Perelman said publicly: “We quickly took significant steps to react to the unprecedented economic environment that we were facing. I have been very public about my intention to reduce leverage, streamline operations, sell some assets and convert those assets to cash in order to seek new investment opportunities and that is exactly what we are doing.”

He continued: “I realized that for far too long, I have been holding onto too many things that I don’t use or even want. I concluded that it’s time for me to clean house, simplify and give others the chance to enjoy some of the beautiful things that I’ve acquired just as I have for decades.”

A friend of Perelman’s, Graydon Carter, told Bloomberg in September: “Often when people say this sort of thing, it’s masking something else. In Ronald’s case, it’s true. He has learned to love and appreciate the bourgeois comforts of family and home.” He described Perelman as “crazy about spending time at home”.

Some of his sales will go to pay down loans from Citigroup, though Perelman’s spokesman says they are not “forced sales”. She also denied Perelman is selling his 57 acre estate in the Hamptons. 

Perelman is best known being a fearless financial engineer in the 1980’s and 1990’s. Ken Moelis said of Perelman’s track record: “He was imaginative, aggressive and innovative in ways that changed the financial landscape.”

But the $1.74 billion valuation Revlon had back in the 1980’s when he purchased it has plunged to $279 million. It was $365 million when we wrote about Perelman in September.

Perelman loved the business and said it “defined him”. He had offered it several loans and had catalyzed several executive changes to try and keep the business afloat. Revlon is now losing to smaller cosmetic shops that advertise through social media – while dealing with the effects of Covid. 

Some Revlon bonds trade were trading around 14 cents on the dollar in September and the company has $3.73 billion in debt. 

All told, “at least nine banks” have claims against Perelman’s assets, including his art collection, house in the Hamptons and “various aircraft”. There are $267 million in mortgages linked to his Upper East Side headquarters for MacAndrews & Forbes.

Currently, Perelman’s art collection makes up about a third of his fortune. And that can be tricky, for assets that have an illiquid market. Recently, one painting he tried to sell was pulled from auction at the last minute due to lack of interest. 

MacAndrews & Forbes saw its general counsel, spokesman, head of capital markets and CFO all depart over the last few months. 

And despite the spin on Perelman’s fire sales as being a way to spend more time with family, Perelman has his skeptics, including Richard Hack, who wrote a book about him in 1996. 

Hack concluded: “If you want a simpler life, you go buy a farm in Oklahoma, not sell a painting out of your townhouse in Manhattan. If he’s selling his art, it’s because he needs cash.”

We can imagine the same is true about his yacht. 

via ZeroHedge News Tyler Durden

Will Democracy’s Myths Doom Liberty?

Will Democracy’s Myths Doom Liberty?

Tyler Durden

Fri, 10/23/2020 – 18:20

Authored by James Bovard via The Mises Institute,

The Supreme Court declared in 1943, “There is no mysticism in the American concept of the State or of the nature or origin of its authority.” In reality, the cardinal doctrines of contemporary democracy are layer upon layer of mystical claptrap. The phrases which consecrate democracy seep into many Americans’ minds like buried hazardous waste.

If Joe Biden wins the presidential election, voters will be told that our political system is redeemed: the “will of the people” is now clear, Biden will rule with “the consent of the governed,” and Americans are obliged to again trust and obey the federal government. If Donald Trump is reelected, much of the same media will continue howling about imaginary Russian plots. But these notions remain dangerous delusions regardless of who is declared the winner on Election Day.

The notion that election results represent the “will of the people” is one of the most shameless triumphs of democratic propaganda. Rather than revealing the “will of the people,” election results are often a one-day snapshot of transient mass delusions. Votes which only reveal comparative contempt for competing professional politicians are transmogrified into approvals for blueprints to forcibly remake humanity.

Americans are encouraged to believe that their vote on Election Day somehow miraculously guarantees that the subsequent ten thousand actions by the president, Congress, and federal agencies embody “the will of the people.” In reality, the more edicts a president issues, the less likely that his decrees will have any connection to popular preferences. It is even more doubtful that all the provisions of hefty legislative packages reflect majority support, considering the wheeling, dealing, and conniving prior to final passage. Or maybe the Holy Ghost of Democracy hovers over Capitol Hill to assure that average Americans truly want every provision on every page of bills that most representatives and senators do not even bother reading?

A bastard cousin of the “will of the people” flimflam is the notion that citizens and government are one and the same. President Franklin Roosevelt, after five years of expanding federal power as rapidly as possible, declared in 1938, “Let us never forget that government is ourselves and not an alien power over us.” President Johnson declared in 1964: “Government is not an enemy of the people. Government is the people themselves,” though it wasn’t “the people” whose lies sent tens of thousands of American conscripts to pointless deaths in Vietnam. President Bill Clinton declared in 1996, “The Government is just the people, acting together—just the people acting together.” But it wasn’t “the people acting together” that bombed Serbia, invaded Haiti, blockaded Iraq, or sent the tanks in at Waco.

President Barack Obama hit the theme at a 2015 Democratic fundraiser:

“Our system only works when we realize that government is not some alien thing; government is not some conspiracy or plot; it’s not something to oppress you. Government is us in a democracy.”

But it was not private citizens who, during Obama’s reign, issued more than half a million pages of proposed and final new regulations and notices in the Federal Register; made more than 10 million administrative rulings; tacitly took control of more than 500 million acres by designating them “national monuments”; and bombed seven foreign nations. The “government is the people” doctrine makes sense only if we assume citizens are masochists who secretly wish to have their lives blighted.

Presidents perennially echo the Declaration of Independence’s appeal to “the consent of the governed.” But political consent is gauged very differently than consent in other areas of life. The primary proof that Americans are not oppressed is that citizens cast more votes for one of the candidates who finagled his name onto the ballot. A politician can say or do almost anything to snare votes; after Election Day, citizens can do almost nothing to restrain winning politicians.

A 2017 survey by Rasmussen Reports found that only 23 percent of Americans believe that the federal government has “the consent of the governed.” Political consent is defined these days as rape was defined a generation or two ago: people consent to anything which they do not forcibly resist. Voters cannot complain about getting screwed after being enticed into a voting booth. Anyone who does not attempt to burn down city hall presumably consented to everything the mayor did. Anyone who does not jump the White House fence and try to storm into the Oval Office consents to all executive orders. Anyone who doesn’t firebomb the nearest federal office building consents to the latest edicts in the Federal Register. And if people do attack government facilities, then they are terrorists who can be justifiably killed or imprisoned forever.

In the short term, the most dangerous democratic delusion is that conducting an election makes government trustworthy again. Only 20 percent of Americans trust the government to “do the right thing” most of the time, according to a survey last month by the Pew Research Center. Americans are being encouraged to believe that merely changing the name of the occupant of the White House should restore faith in government.

If Biden is elected, we will hear the same “redemption” storyline that was trumpeted when Obama replaced (temporarily) disgraced George W. Bush. The same media that ignored Biden’s corruption during the presidential campaign will insist that his inauguration purifies Uncle Sam. With Biden in charge, pundits and pooh-bahs will swear that it is safe to expand federal control over healthcare, education, housing, the economy, the environment, and anything else that moves.

But the benevolence of government rarely transcends the perfidy of politics. Washington will remain as venal as ever, regardless of the hallelujah chorus of PBS NewsHour panelists. When scandals erupt, citizens will be told to trust politically approved fixes to the system—even though most Washington reforms are like fighting crime by hiding the corpses of victims.

It is time to demystify democracy. The surest effect of exalting democracy is to make it easier for politicians to drag everyone else down. Until presidents and members of Congress begin to honor their oath to uphold and defend the Constitution, they deserve all the distrust and disdain they receive. Americans need less faith in democracy and more faith in their own liberty.

via ZeroHedge News Tyler Durden

Raoul Pal: The Biggest Trade in the World

Raoul Pal: The Biggest Trade in the World

Tyler Durden

Fri, 10/23/2020 – 18:10

Real Vision CEO, Raoul Pal, arrives to the Daily Briefing frothing at the mouth with Bitcoin bullishness. Senior editor, Ash Bennington, tries in vain to contain Raoul’s enthusiasm, but with Bitcoin up over 20% this month, Raoul’s zeal simply cannot be restrained, and he proceeds to go at length about how this asset will become a global reserve asset as the world moves along an adoption curve of trust. Raoul and Ash proceed to discuss the ongoing progress to make crypto-assets easier to own for RIAs and institutional investors, and Raoul reflects on the relative risk/reward profile of bitcoin at a time with record low bond yields and a stock market at all-time highs. In the intro, editor Jack Farley breaks down the new Frankenstein of the fixed income world: the CLO ETF.

via ZeroHedge News Tyler Durden