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Back in June 2017, we wrote that if one had to follow just one macro indicator that impacts virtually every aspect of the global economy, that would be the Chinese credit impulse. Not surprisingly, the article was titled “Why The (Collapsing) Credit Impulse Is All That Matters.” Then, a few years later just in case there was any confusion, we again wrote “Why The Collapsing Chinese Credit Impulse Is All That Matters.”

The reason for this is simple: with western central banks woefully unable to spark benign inflation both domestically or globally, China has emerged – starting around the time of the global financial crisis – as the only source of global economic and reflationary momentum, which in turn depends on China’s ability and willingness provide yet another stimulus to its domestic economy.  It does so by injecting trillions of new credit into its financial system, as the following chart of Total Social Financing over time clearly shows.

We bring all this up because as we have noted in recent months, and as SocGen’s Wei Yao writes this week, China’s credit impulse has been rising since early 2019 and is now close to its highest level post-GFC. And while the initial recovery in 2019 was a result of the fading impact of financial deleveraging, the surge this year is propelled by the counter-pandemic stimulus. Since credit impulse is measured in percentage of GDP, the sharp slowdown in nominal GDP growth from 7.8% in 2019 to about 2.5% in 2020 has also helped the credit impulse record a much more notable pick-up than credit growth, which has climbed from slightly below 10% yoy end-2018 to over 13.5% yoy lately. Of course there is a cost” China’s debt-to-GDP ratio is on track to jump by more than 25% this year to 285%. However, in a surprising reversal, for the first time since 2008, the magnitude of China’s credit stimulus is not the largest in the world, as it is surpassed substantially by the US where the Fed will have monetized over $3 trillion in 2020.

A quick breakdown where credit is being created: as SocGen explains, Chinese corporates account for 70% of the rise in the credit impulse in this upturn after bearing the brunt of the deleveraging campaign in 2017/18. Government borrowing accounts for the remaining 30%, as Beijing is ramping up fiscal support to the economy. Somewhat counterintuitively, there is nearly no contribution from the household sector, despite the quick and strong rebound in housing sales.

Given the three-quarter lead of credit impulse over economic growth observed in the past decade, the improvement in credit impulse so far is likely to support the economic recovery, in particular that of investment, well into mid-2021 at least. However, SocGen also note two unique features in this cycle that may limit the scale of investment acceleration in the coming quarters.

• Some of the credit impulse may just turn up as non-performing debt later. At the height of the pandemic crisis, the Chinese government and central bank pushed financial institutions to inject a substantial amount of credit into the corporate sector for the purpose of keeping affected companies afloat, just like in many other countries. Some of these companies have recovered and will invest if the economy continues to revive, but some of them may still go under. Notably, state-owned enterprise (SOEs) and local government financing vehicles (LGFVs), many of which had weak financial status entering the crisis have been among the major beneficiaries from the credit easing this year. Shortly after the PBoC embarked on policy normalisation, some of them defaulted on their bonds and shocked the entire bond market in November.
• The deleveraging mindset looks to be a lasting drag on public investment. Unlike in the previous easing cycle, infrastructure growth has been surprisingly limited in this recovery despite the generous expansion in government bond financing. After plunging 18.5% yoy in 1Q amid the lockdown, (traditional) infrastructure growth rebounded to 5.7% yoy in 2Q and has stagnated ever since. That pace is faster than the 3.8% in 2018 and 3.2% in 2019, but substantially slower than in any year before 2018. The main explanation seems to be local governments’ cautiousness over taking up much more shadow government debt (i.e. LGFV debt) for low-return projects.

Much more important, however, is SocGen’s contention that China’s credit impulse is about to peak and poised to turn down, as Chinese policymakers have shown every intention to resume the country’s derisking project.  Since early 3Q, they have begun to shift their focus from fighting the crisis to risk control and long-term sustainability. The monetary policy stance has normalized to the extent that benchmark interbank rates and key bond yields are either close to or above pre-crisis levels. Furthermore, the fiscal impulse in 2H so far has also been smaller than budgeted, and the issuance quota for government bonds will probably be downsized in the 2021 budget. At the same time, SocGen notes that Beijing is mulling over a new deleveraging campaign targeted at housing and fintech. Even if the PBoC does not embark on an aggressive tightening cycle, “the combination of a smaller fiscal deficit, these targeted deleveraging programmes and potentially more credit events will likely already be enough to exert material downward pressure on credit growth in 2021″, according to SocGen.

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Given all the factors above, SocGen expects the credit impulse to start moving dramatically lower at the turn of the year, from over +8% to around -7% end-2021, about as low as that seen in late 2018 when global stock markets suffered a major freakout. This projection assumes that credit growth will decelerate slightly slower than during the 2017-18 deleveraging campaign, from 13.5% y/y currently to barely above 10% y/y end-2021. Then, as nominal GDP growth is expected to rebound strongly in yoy terms, partly thanks to base effects, the credit impulse will likely see a steeper decline than credit growth next year. That said, the top risk to this forecast would be a more lenient policy stance on the back a softer-than-expected economic momentum. In this case, credit impulse would not shrink as fast

So what does all of this mean for global markets and the vast array of inflation-linked assets?

For the answer, we once again go back to SocGen which one years ago first analyzed how China’s credit impulse feeds through to inflation sensitive assets. The French bank studied correlations of these assets with the Chinese credit impulse (with a 1-year lag) and expected that a modest increase in the credit impulse should lead to a modest gain in reflation-linked assets over the next few quarters, which is what happened. However, understandably, the bank did not account for the Coronavirus pandemic which, after the initial setback, has since led to a further acceleration in Chinese credit growth over the full year.

As we approach the end of 2020, industrial metals are almost up 10% yoy, and Chinese sovereign bond yields as well as US 5Y forward 5Y inflation are both higher than their levels from last year. However, the year has not gone so smoothly for other inflation-sensitive assets such as eurozone banks (state-mandated dividend suspension), sovereign bond yields in Europe and the US (central bank forward guidance & quantitative easing), and value vs quality (tech-sector-linked performance differential).

This led SocGen to further explore the dispersion across inflation-linked assets; it is then that its Chinese analysts found that the performance of some assets (such as industrial metals) was more directly linked to Chinese credit impulse than others (such as value/quality), but it did not explore the possibility of varying lag times for different assets. In hindsight, the pandemic has made it obvious that the symbolic credit wave does not reach all the shores at the same time and does not have the same strength either. Overall, the manufacturing/industrial/durable goods sector has continued to exhibit the best pass-through of the credit-led inflation. This can be observed in the chart below, which continues to show a close link between Chinese credit impulse and US durable goods price inflation.

The relationship seen in the chart above is logical given that the pandemic has caused a shift in the composition of US household demand away from (mostly domestically produced) services and toward durable goods (mostly imported).

Next, SocGen analyzed the various lag times when calculating correlations (between inflation-linked assets and Chinese credit impulse), and the results confirmed initial expectations – of both this website and the French bank – that the credit impulse first reaches assets that are driven primarily by the Chinese economy (Chinese bond yields and industrial metals). Next to be impacted are inflation breakevens and sovereign yields in Western economies. The peak correlation for other growth-sensitive assets such as eurozone banks and AUD/JPY arrives with bigger lag of around 4-5 quarters. This result, while logical, is quite significant, as it gives us a playbook for the ebb and flow in Chinese credit impulse.

The table above shows the correlation between different assets and Chinese credit impulse for varying lag times. The extent of the differences between lags in correlations is exemplified in the left-hand chart below. While peak correlation for Chinese interest rate swaps arrives with an eight-month lag, the peak correlation for eurozone banks manifests itself with a lag of 14 months.

Comparing the correlations for two different lag times also shows interesting results. For a three-quarter lag (eight months to be more precise), Chinese interest rates and industrial metals exhibit the highest correlations with credit impulse. However, for a 14-month lag, Copper/Gold ratio, eurozone banks and AUD/JPY show the highest correlations.

Looking ahead, with high correlations and short lag times, Chinese interest rate swaps and industrial metals should be the first assets to be adversely impacted by the topping of the Chinese credit impulse. Australian house prices and US 5Y forward 5Y inflation will likely also be hit in this first group.

The mining and industrial sectors also have short lag times, but their correlation is slightly lower. The other highly correlated group of assets, including eurozone banks, also gets strongly affected by credit impulse, but the rather large lag time opens the door for other factors to influence the price action of these assets as well.

Low correlation with certain assets suggests that Chinese credit, while being one of the drivers, may not be the main driver of price performance for these assets (e.g. semis/software ratio, sovereign yields in the West and value/quality ratio).

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Next, we look at some of the assets most affected by China’s credit impulse, starting with Commodities/Commodities-linked assets.

Starting with commodities, SocGen notes that the broader industrial metals complex has a shorter lag (8m) to credit impulse than copper (15m). Moreover, copper prices seem to be running ahead of what credit impulse levels would suggest, implying less upside from here in the near term. However, industrial metals still point to a healthy double-digit gain over the next few quarters.

Based on SocGen’s analysis, if the credit impulse weakness is confirmed in 4Q 2020, the strength in the broader industrial metals complex to dissipate as we approach the second half of 2021.

Eurozone banks

In addition to Commodities, there is a clear and strong feed-through from Chinese credit impulse to the Eurozone banks sector, whose long lag time of 4-5 quarters opens the possibility of other factors exerting strong influence on this sector. Nevertheless, as a base case, the credit impulse model suggests that banks should remain supported by the inflationary wave at least till the end of 2021.

However, Chinese credit impulse is not the only tailwind for banks. A successful roll-out of vaccines against the virus should lead to less pressure on banking sector as the economy slowly goes back to normal. In terms of immediate catalysts, further clarity on capital redistribution at the upcoming ECB meeting should be a positive development for the sector. To quote the SG banks research team:

“The important part of the dividend communication is the signal that it gives. With distributions turned off, the implicit message from the ECB is that banks do not have sufficient capital and/or will be called on to provide further support to the real economy. Any softening of this stance, even with compromise caveats, would outline that the perception of capital has improved.”

The other imminent catalyst is the run-off elections in the state of Georgia for two US Senate seats on 5 January. If the Democrats win both seats, they will achieve a narrow effective majority in the Senate with Vice President Harris’ tie-breaking vote. This should lead to a repricing of the size of potential fiscal easing and should support the inflationary trend we have observed so far. Many bank sector-related assets should be beneficiaries of these two imminent catalysts, while the direct beneficiaries of further clarity on dividend  istributions would be Eurozone banks dividend swaps.

Further clarity on distributions should support SocGen’s credit strategy team reco to be overweight financials vs non-financials in European credit, as banks’ provisions are high and supply is limited.

China sovereign bond yields

Not all assets are likely to be equally impacted by the credit impulse led reflation. In fact, we expect Chinese government bonds to exemplify the dispersion among risk assets given differing lag times. A confirmation of the Chinese credit impulse trend reversal should be quite significant for the trend in Chinese sovereign bond yields. With SocGen expecting the credit impulse to head into deeply negative territory by the end of 2021, and with one of the shortest lag times to this leading indicator, Chinese government bond yields have asymmetrical risks to the downside. The reversal in issuance trends should also help – the bank expects a ~30% reduction in overall bond issuance in China in 2021 compared to 2020. Foreign flows and a likely inclusion in FTSE WGBI (World Government Bond Index) are also potential tailwinds next year.

This trend is likely to contrast with the other large Western sovereign bond markets – especially the US where significantly higher long end rates as expected(SocGen forecasts end 2021 10Y TSYs @ 1.5% and 30Y TSYs @ 2.5%). The credit impulse framework also suggests a slightly delayed response from G3 bond yields (11-12 months), which suggests that the spread between US treasury yields and Chinese sovereign bond yields could tighten by the end of 2021 (after hitting a record wide in November). SocGen’s recently recommended this investment idea (long 10Y CGB against 10Y UST, with a target of +180bp and a stop of +260bp, current level +234bp).

Other inflation-sensitive assets

Barring a significant setback in the vaccine rollouts, SocGen expects a broad outperformance of inflation sensitive assets over the next couple of quarters… and then a reversal. As future expectations of inflation gradually move higher, financial conditions should remain easy given the negative real rate environment. Other assets such as value vs growth, semiconductors vs software and growth-sensitive currencies should continue to do well. However, the second half of 2021 should be the time to buy protection on some of these assets as credit impulse rolls off its elevated levels. This would be consistent with a turn lower in sovereign bond yields across the major economies by the end of 2021.

Key takeaways

To summarize SocGen’s views, the Chinese credit impulse reached a turning point in the current (Q4 2020) quarter, and will head lower next year. If this is confirmed by the upcoming data, expect a dispersion between inflation sensitive assets in 2021. Assets with larger lag times (e.g. Eurozone banks) will benefit from the residual reflationary trends for the next year, “but some assets with shorter lag times (such as CNY rates) will reverse their trend and follow credit impulse lower much sooner” according to SocGen.

In the chart below, SocGen provides a critical estimated timeline of the peak Y/Y performance for each of the assets analyzed in its recent research. While these assets are influenced by multiple factors and therefore could easily diverge from expectations, the chart below does present a neat output from a lagged regression analysis and is a useful guideline for next year.

Authored by Robby Soave via Reason.com,

District officials in San Diego evidently believe that the practice of grading students based on average scores is racist…

K-12 students in large public school districts across the country spent much of the fall semester at home, a less-than-ideal result of the COVID-19 pandemic. But Zoom learning was hardly the only significant change to the education system. Some school districts are embracing trendy but dubious ideas about how to fight racism in the classroom.

The San Diego Unified School District, for instance, moved this fall to abolish its traditional grading system. Students will still receive letter grades, but they won’t reflect average scores on papers, quizzes, and tests. Under the new system, pupils will not be penalized for failing to complete assignments or even show up for class, and teachers will give them extra opportunities to demonstrate their “mastery” of subjects. What constitutes mastery is not quite clear, but grades “shall not be influenced by behavior or factors that directly measure students’ knowledge and skills in the content area,” according to guidance from the district.

District officials evidently believe that the practice of grading students based on average scores is racist and that “anti-racism” demands a learning environment free of the pressure to turn in assignments on time. As evidence for the urgency of these changes, the district released data showing that minority students received more Ds and Fs than white students: Just 7 percent of whites received failing grades, compared to 23 percent of Native Americans, 23 percent of Hispanics, and 20 percent of black students.

“This is part of our honest reckoning as a school district,” Vice President Richard Barrera told a local NBC affiliate.

“If we’re actually going to be an anti-racist school district, we have to confront practices like this that have gone on for years and years.”

These changes to San Diego schools’ grading system are an excellent example of a bureaucracy citing a noble-sounding goal (who could be against anti-racism?) to justify a policy that doesn’t address the issue whatsoever. After all, eliminating these kinds of grades won’t eliminate the underlying inequities that produced the disparate failure rates. It may actually cover those inequities up: Given that grades are a tool for evaluating students’ progress, the district is essentially announcing that it will no longer gather as much evidence as it could about negative social phenomena it would presumably like to fix. Better grades do not mean students will suddenly have a better grasp of the material. They certainly won’t be better prepared for college, where traditional grades are very much still a thing.

Indeed, this is a lot like “addressing” poverty by no longer tallying the number of homeless people – or, to use a timely example, like President Donald Trump’s frustration that increasing COVID-19 testing makes the epidemic look worse. Coronavirus cases exist even if they go undetected; similarly, minority students who are falling behind their classmates will be falling behind even if their teachers aren’t giving them Fs.

Getting rid of grades is an old idea: As far back as 1964, the Public Education Association urged high schools to stop using grades due to fears that students were deliberately choosing easier classes. “By eliminating percentage grading, students would no longer be tempted to obtain a more favorable final grade by enrolling in classes that are below their level of ability,” said the association in a report obtained by The New York Times. But in the past, the concern was that grades tell us too little. Today, the concern seems to be that grades tell us too much.

A related push is occurring in the world of standardized testing.

In 2020, California eliminated the SAT – a measure on which students of color have historically underperformed whites – as a mandatory requirement for applicants to state universities. Janet Napolitano, president of the University of California, is giving officials four years to propose a better and more equitable test; if one does not materialize, testing will cease to be an admissions factor entirely.

But this elides a serious problem for minority students: Other admissions criteria – such as legacy considerations and extracurricular activities – favor privileged applicants even more dramatically than grades and tests do. The wealthiest (and usually whitest) students have better access to résumé-padding activities. Yes, they can also hire tutors and take test prep courses, but there’s only so much extra value to be extracted from such things. Grades and standardized tests have problems, but without them, the deck would be stacked against the underprivileged to an even greater degree.

Not all the demands from anti-racist education activists are unwise or unworkable. Diversify Our Narrative, a Black Lives Matter–affiliated organization for California college students, is pressing K-12 schools to make the study of history less Eurocentric and to add more minority-authored literature to the curriculum. Expanding students’ choices is seldom a bad thing, and there’s certainly room for schools to update their offerings with more Asian history, African art, South American literature, etc. These additions shouldn’t be forced on teachers who don’t know the subjects, but they should be allowed.

Unfortunately, the drive for anti-racism in the classroom often takes an unhelpful and performative tack. Poorly considered initiatives on college campuses have backfired dramatically while imperiling students’ free speech and due process rights: Prohibitions on “microaggressions”—slight, unintentional racial offenses—have created incentives for students to call police hotlines and snitch on each other over petty grievances. Many professors are afraid that saying the wrong thing, even inadvertently, will produce a lengthy investigation that could cost them their jobs—and indeed, there are plenty of examples of such investigations taking place. Several have become virtually household names: Laura Kipnis, Nicholas Christakis, Bret Weinstein.

These ideas are gradually spreading from secondary to primary education. In August, Fairfax Public Schools in Virginia invited Ibram X. Kendi, an activist and author of the books How to Be an Antiracist and Antiracist Baby, to have a virtual conversation with principals, administrators, and teachers. Kendi, who was paid $20,000 to speak for one hour, believes that the Constitution should be amended to create a federal Department of Anti-Racism with the power to censor public officials who make racist statements. The district also bought $24,000 worth of his books, which argue that any arrangement producing unequal results along racial lines is racist by definition.

The fact of the matter is that the most racially disparate problem in K-12 right now has nothing to do with microaggressions, or grades and testing, or even curricula. It’s that students in cities across the U.S. who rely on public education are stuck at home, while children in the same age cohorts who attend private schools have largely returned to class. New York City, D.C., Baltimore, Chicago, and countless other big districts have opted to keep schools closed, even though many working-class families depend on them to provide in-person instruction, guidance, and day care.

It’s the same story in San Diego. Officials may want to provide an anti-racist education, but at present they aren’t providing much of an education at all.

The misplaced priorities of big city school districts have not been lost on everyone. San Francisco Mayor London Breed, a Democrat, recently assailed her school district for moving forward with a costly plan to rename 44 supposedly problematically named schools (Washington, Lincoln, Jefferson, etc.). “In the midst of this once-in-a-century challenge, to hear that the District is focusing energy and resources on renaming schools—schools that they haven’t even opened—is offensive,” she said. “It’s offensive to parents who are juggling their children’s daily at-home learning schedules with doing their own jobs and maintaining their sanity.”

No doubt many parents agree with her. What kids need most of all right now is a return to normalcy, not activist-driven social experimentation.

There have been zero cases of COVID-19 linked to any of Waffle House’s 2,100 locations, according to CEO Walter Ehmer, who told Fox News that American people are being ‘disproportionately hurt’ by unscientific lockdowns.

“We have proven, over these nine months, we have zero evidence of any spread being traced back to our restaurants for our people or our customers,” said Ehmer. “We’ve traced back all of our infections… and it all traces back to something away from the restaurant.”

“We are disproportionately hurting American people who are wanting to work for no data and no science that ties back to that being a dangerous place,” he added.

Ehmer explained that other restaurant CEOs he’s spoken to on the matter have reported that spread is not being traced back to their dining rooms either.

Meanwhile, employees and customers are ready to return to restaurants, Ehmer said, especially those who rely on open, full-capacity dining rooms to make a living. –Fox Business

“Shutting down restaurant dining rooms virtually has no impact on reducing the spread. And what it does have is a certain devastating impact on the millions of people in this industry that look to restaurants to provide their livelihood… and at this time of year to buy Christmas presents for their kids,” added Ehmer.

Meanwhile, Waffle House patrons are divided over taking the vaccine.

Residents and visitors within a half-mile of the downtown area of Custer, a small town in northern Washington near the Canadian border, were told to evacuate, after a train carrying up to 30,000 gallons of crude oil derailed and caught fire.

“This train is carrying crude oil. ALL residents and visitors within 1/2 mile need to evacuate the area!” Washington state police said on Twitter.

BNSF Railway confirmed the train was carrying oil and derailed around 11:40 a.m. local time. Initial reports indicated that three to five tank cars went off the tracks and there were reports of a fire near the end of the train.

“BNSF is working with local authorities to assess and mitigate the situation,” the company tweeted. “The cause of the incident is under investigation. Our first priority is dealing with any safety issues.”

The smoke could be seen for miles…

Hi, someone who just happened to be in the area at the time of the fire here, it started just about noon , and here’s some photos I got while we were coming back from Birch Bay. Shaken! pic.twitter.com/m2AX6JM0mY

— Atlas #mementomori ⚫️⚪️ (@atlascosplays) December 22, 2020

And police have blocked the roads…

We are working to evacuate a 1/2 mile radius from the site of the derailment. Train cars are on fire. I-5 is closed in both directions from Grandview to Birch Bay Lynden Rd. Train cars are on fire.
AGAIN, PLEASE AVOID THE AREA. pic.twitter.com/OuqC5NAuoE

— Whatcom County Sheriff’s Office (@whatcomsheriff) December 22, 2020

Authored by Charles Hugh Smith via OfTwoMinds blog,

The profit-maximizing Big Tech / Big Media Totalitarian regime hasn’t just strangled free speech and civil liberties; it’s also strangled democracy.

The U.S. has entered an extremely dangerous time, and the danger has nothing to do with the Covid virus. Indeed, the danger long preceded the pandemic, which has served to highlight how far down the road to ruin we have come.

The danger we are ill-prepared to deal with is the consolidation of the private-sector media and its unification of content into one Approved Narrative which is for sale to the highest bidders. This is the perfection of for-profit Totalitarianism in which dissent is crushed, dissenters punished and billions of dollars are reaped in managing the data and content flow of the one Approved Narrative.

So don’t post content containing the words (censored), (censored) or (censored), or you’ll be banned, shadow-banned, demonetized, demonized and marginalized. Your voice will be erased from public access via the Big Media platforms and you will effectively be disappeared but without any visible mess or evidence–or recourse in the courts.

That’s the competitive advantage of for-profit Totalitarianism–no legal recourse against the suppression of free speech and dissent. And if you’re shadow-banned as I was, you won’t even know just how severely your free speech has been suppressed because the Big Tech platforms are black boxes: no one outside the profit-maximizing corporation knows what its algorithms and filters actually do or exactly what happens to the disappeared / shadow-banned.

Shadow-banning is an invisible toxin to free speech: if you’re shadow-banned, you won’t even know that the audience for your posts, tweets, etc. has plummeted to near-zero and others can no longer retweet your content. You only see your post is online as usual, because this is the whole point of shadow-banning: you assume your speech is still free even as its been strangled to death by Big Tech black box platforms.

Since Andy Grove’s dictum only the paranoid survive is my Prime Directive, I’ve paid a bit more to have access to server traffic data. So I can pinpoint precisely when I was shadow-banned: my overall traffic fell off a cliff and the number of readers visiting from links on Big Tech platforms fell from thousands to near-zero.

The new consolidated Big Media Totalitarians play an interesting game of circular sources: in the traditional, now-obsolete / suppressed form of journalism, a reporter would be required to identify a minimum of three different sources for the story, and make at least a desultory effort to present two sides of the issue.

That model is out the window in the USSA’s Big Media Totalitarian regime. Now reporters only have to use a completely bogus, fabricated source in another Big Media story. Just being in another Big Media platform / publication is now “proof” that the source is legitimate.

In other words, investigative journalism is nothing but a Potemkin Village of circular sources conjured out of thin air by Big Media. Here’s an example from my own experience of being shadow-banned.

1. A completely bogus organization pops up out of nowhere and doesn’t bother identifying its owners, managers or sources.

2. This complete travesty of a mockery of a sham fabrication then issues a list of websites which it claims, with zero evidence, are stooges / outlets of Russian propaganda.

3. With zero investigation of this slanderous, evidence-free “source,” the venerable Washington Post (owned by Jeff Bezos) publishes an evidence-free hit piece glorifying this fabrication on Page One.

4. The other Big Media giants then amplify the bogus slander because it came from a “legitimate source,” the Washington Post.

Do you understand how circular sourcing works now? Once a flagrantly bogus bit of propaganda is embraced by one Big Media giant as part of the Approved Narrative, then every other Big Media / Big Tech corporation promotes the fabrication as “real news” even as it is obviously the acme of “fake news”, a complete fabrication.

The fake “source” was called PropOrNot, and the list included dozens of well-respected independent websites, all slandered with a completely fake accusation for one reason: each site had published some content that cast a skeptical eye on the crowning of Hillary Clinton in 2016 and the crushing of Bernie Sanders’ campaign by Big Media’s Approved Narrative.

As long as you post videos of kittens and kids dancing, you’re OK because your content (owned and controlled by the platform you posted it on–read the terms of Service) is free to the platforms and they use your content to “engage” users which generates billions in profits.

But if you question the Approved Narrative, you put a big day-glo target on your back. Now if you’re a multi-millionaire, you know, a top 0.1% per-center, you can afford to keep posting dissenting views even after you’ve been demonetized and your income falls to near-zero.

The rest of us aren’t quite so privileged. This is another of the toxic elements in Big Media / Big Tech’s consolidated control of what was once known as free speech: They don’t have to ban your content outright, which might cause a few ripples of tame protest; all they have to do is starve you into submission by strangling your source of income.

Thanks to watertight terms of service, even a multi-millionaire is legally powerless against the USSA’s Big Media Totalitarian regime. By posting content, you already gave away all your rights. So you can go solo and post content on some obscure corner of the web that no one knows exist, but that’s the functional equivalent of being banned and demonetized.

So go right ahead and enter a sound-proof box and scream your head off; nobody can hear you. Welcome to the totally privately owned, legally untouchable Big Tech / Big Media Totalitarian regime that will let you know what’s in the Approved Narrative because that’s all you’re allowed to see.

Gordon Long and I cover these topics and many more in our latest video Buying the Narrative (35:41) Since I’d like the video to actually be viewed more than 11 times, I avoided using the terms (censored), (censored) or (censored), and that’s the final fatal poison delivered by our profit-maximizing Big Tech / Big Media Totalitarian regime: self censorship. You know what you can’t say, so don’t say it. Stick with the kitten videos and you’ll be just fine.

You’ll be just fine but you no longer live in a functioning democracy. The profit-maximizing Big Tech / Big Media Totalitarian regime hasn’t just strangled free speech and civil liberties; it’s also strangled democracy.

It’s all fun and games until the pendulum of Totalitarian Consolidation and its Approved Narrative reaches an extreme (like, say, right now) and the pendulum swings back to an equal extreme at the other end of the spectrum. Keep in mind that hubris and money are no match for history: the more powerful you claim to be, the greater your fall. The way of the Tao is reversal.

Welcome to the U.S.S.A.’s Banquet of Consequences (December 8, 2020)

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A Hacker’s Teleology: Sharing the Wealth of Our Shrinking Planet (Kindle $8.95, print $20, audiobook $17.46) Read the first section for free (PDF).

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Oil prices extended their losses today, with WTI back below $47 at its lowest in a week, as fears of a rapidly spreading COVID strain struck fear in the vaccine-hopers expecting a return to normal.

“This sudden, panicked action by government around the world points to the risk of even more widespread lockdowns and travel restrictions well into the new year,” said Pavel Molchanov, energy research analyst at Raymond James & Associates Inc.

“Needless to say, that will slow down the recovery in global oil demand and is weighing on oil prices.”

For now, all eyes will be on tonight’s inventory data and implied gasoline demand tomorrow for a sense how US lockdowns have impacted the energy complex domestically.

API

• Crude +2.70mm (-3.1mm exp)

• Cushing +341k

• Gasoline -224k (+600k exp)

• Distillates +1.03mm (-1mm exp)

Analysts expected a 6th straight week of gasoline builds (but did not get one), and after the week before last’s huge build, crude stocks are expected to draw down (but instead crude stocks saw a build)…

Source: Bloomberg

WTI was hovering back below $47 ahead of the API print, and extended losses after the surprise build…

The threat to near-term demand from additional stay-at-home measures has rippled across oil markets. 

Brent contracts for prompt delivery are back at a discount against later deliveries — a bearish pattern known as contango.

Authored by Robert Wheeler via The Organic Prepper blog,

Amidst the reports of potential martial law, COVID hysteria, and arguments of stolen elections, there are accounts of an alleged “massive” hack attack against the U.S. government and major Fortune 500 companies.

While the details surrounding the hacking have yet to be released, it hasn’t stopped America’s judge, jury, and executioner – Mainstream Corporate Media – from declaring who the culprit is. Along with D.C. Swamp dwellers and Deep State stalwarts, MSM has reported the recent hacking as none other than Russia’s work.

I know. I know. Hold your surprise.

Predictably, the accusers have not offered a shred of evidence to prove or even back up their case against Russia. For his part, President Trump has denied that Russia had anything to do with the hack, downplaying the incident’s seriousness.

Instead, he makes a counterclaim that it was likely China who was behind the hacking. But Trump offered no evidence either.

What Happened?

A massive cyber breach allowed hackers to not only access but to spend months exploring several U.S. government and private companies’ systems around the globe. The hackers inserted malware into a software update from SolarWinds. (The company used by thousands of companies and federal agencies to monitor their computer networks.)

SolarWinds claims that nearly 18,000 of its customers in the private and public sector received the adulterated software between March and June of 2020.

The U.S. Cybersecurity and Infrastructure Security Agency stated the attack “poses a grave risk” to federal, state, and local governments and private companies and organizations. CISA noted that removing the malware would be “highly complex and challenging for organizations.” In other words, the full scale of the hacking is as of yet unknown.

Who was hacked? 

At this time, the U.S. government agencies hacked include: 

• Commerce Department

• Department of Homeland Security

• The Pentagon

• The Treasury Department

• USPS

• National Institutes of Health

• Department of Energy (where National Nuclear Security Administration software was also breached.)

However, the DOE has reassured the public by stating the hack was isolated to business networks and not national security operations. In other words, the hackers were not able to access classified material, just unclassified items.

Also, other government agencies, consulting, telecom, and technology companies from North America, Asia, Middle East, and Europe, according to FireEye, were hacked. (FireEye is the security firm to sound the alarm over the incident.)

As NPR reports,

After studying the malware, FireEye said it believes the breaches were carefully targeted: “These compromises are not self-propagating; each of the attacks require meticulous planning and manual interaction.”

Microsoft, which is helping investigate the hack, says it identified 40 government agencies, companies and think tanks that have been infiltrated. While more than 30 victims are in the U.S., organizations were also hit in Canada, Mexico, Belgium, Spain, the United Kingdom, Israel and the United Arab Emirates.

“The attack unfortunately represents a broad and successful espionage-based assault on both the confidential information of the U.S. government and the tech tools used by firms to protect them,” Microsoft’s President Brad Smith wrote.

“While governments have spied on each other for centuries, the recent attackers used a technique that has put at risk the technology supply chain for the broader economy,” he added.

Who Was Responsible?

Let’s get one thing out of the way. We don’t know yet.

As I stated at the beginning of this article, neither side presents information to bolster their case. For the sake of analysis, however, all sides (and some that remain unmentioned) must be considered.

Russia

Predictably, Deep State operatives and D.C. Swamp dwellers along with the mainstream media began crowing that Russia was behind the alleged hacking. According to them, it was just another incident in a long line of incidents that can be traced back to either Donald Trump or Vladimir Putin, two individuals whom the limousine left views as essentially one person.

But none of these outlets or individuals have offered a bit of proof to back up their claims. It is hard to take any claims of “Russian aggression” seriously, considering the media, left, and Deep State spent two years using the “Russiagate” narrative to pressure and undercut the Trump administration (after nearly eight years of provoking Russia in Ukraine and Syria).

However, after a decade of provocation on its borders, attempted color revolutions, sanctions, and growing threats, it is logical that Russia would want to gather as much information as possible about American intentions.

However, the likelihood that the Russians would have risked such exposure of their intentions is out of character with its leadership. (Which has been keen to let the United States destroy itself at home and abroad, allowing Russia to swoop in and pick up the pieces.)

China

Trump has suggested China might be responsible for the hacking but has failed to show any proof. Of course, China has the motivation to hack American agencies and corporations as much as Russia and for many of the same reasons. Indeed, China has been more open than most countries about its spying operations.

Deep State

But what about a third option? At this point in the game, we have to assume one possible culprit would be actors within the United States government. Those not necessarily loyal to the national interests who would benefit from staging a hacking event to be blamed on the target country. After all, skilled hackers (as these were) can mask their locations, appearing to be in entirely different countries.

It is possible that Russia or China (possibly Iran) may have been blamed for a hacking they never committed.

All three of these possibilities are plausible.

At this point, we do not know who was responsible for the hack, and, even according to mainstream reports, we do not know the extent of the damage.

What we do know, however, is that no crisis will be left to waste.

This one will be no different.