Month: January 2022

Spotify has responded to growing cries from the left to censor medical information which challenges or refutes official government bodies regarding Covid-19. Last week, artists Neil Young and Joni Mitchell removed their music from the platform to protest Joe Rogan over an interview with mRNA inventor and early treatment advocate Dr. Robert Malone, while others have been threatening to follow suit.

In a Sunday public letter, Founder and CEO Daniel Ek tried to strike a compromise between free speech advocates and those who want to eliminate wrongthink from public discourse under the guise of protecting the public from ‘dangerous concepts.’

“We know we have a critical role to play in supporting creator expression while balancing it with the safety of our users,” wrote Ek – who made no specific mention of Rogan. “In that role, it is important to me that we don’t take on the position of being content censor while also making sure that there are rules in place and consequences for those who violate them.“

There’s been a lot of conversation about information regarding COVID-19 on Spotify. We’ve heard the criticism and we’re implementing changes to help combat misinformation. https://t.co/ic8jfR1RNR

— Daniel Ek (@eldsjal) January 30, 2022

Ek also said that Spotify would add a “content advisory” to any podcast episode which includes any mention of Covid-19, and will direct listeners to a “Covid-19 hub” where they can consume mainstream information regarding the virus.

Where does this leave Rogan?

A company spokesperson told Bloomberg that none of Rogan’s episodes currently on the platform (which includes the Malone interview) violate Spotify’s policies – a decision which risks fueling further outrage on the left, who may accuse the company of circling wagons around one of the most powerful voices in media to protect their bottom line.

Rogan has presented a public relations conundrum for Spotify ever since the company paid more than $100 million for the exclusive rights to his show. He offers a hospitable environment for guests with controversial points of view about the pandemic, politics and just about every other topic. 

The criticism and controversy has thus far been worth it to the company’s leadership: Spotify’s stock price jumped the day they announced the deal, and Rogan hosts the single most popular podcast on its service. Spotify moved into podcasting hoping it would turn its popular but unprofitable music service into a more lucrative business. Investors cheered the efforts, though they have cooled on the company in recent months. Its stock has fallen 48% in the past 12 months, closing at $172.98 on Jan. 28 with a stock-market value of $33 billion. -Bloomberg

A cadre of aging leftist musicians vs…

Joe Rogan has completely disrupted the legacy media. pic.twitter.com/rBLCYweag0

— Pomp 🌪 (@APompliano) January 3, 2022

Spotify has also made public its rules governing acceptable content on the platform, but only made them available to employees.

Their ‘medical misinformation’ section pertains to “content that promotes dangerous false or dangerous deceptive medical information that may cause offline harm or poses a direct threat to public health.’ Examples include:

• asserting that AIDS, COVID-19, cancer or other serious life threatening diseases are a hoax or not real
• encouraging the consumption of bleach products to cure various illnesses and diseases
• promoting or suggesting that vaccines approved by local health authorities are designed to cause death
• encouraging people to purposely get infected with COVID-19 in order to build immunity to it (e.g. promoting or hosting “coronavirus parties”)

Read the entire policy below:

Dangerous Content

Spotify is home to communities where people can create, express themselves, listen, share, learn, and be inspired. Don’t promote violence, incite hatred, harass or engage in any other behavior that may place people at risk of serious physical harm or death. What to avoid:

Content that advocates or glorifies serious physical harm towards an individual or group includes, but may not be limited to:

• • encouraging, promoting, or glorifying suicide and self-harm (if you or someone you know is struggling or thinking about self-harm, please see here for ways to get help)
  • inciting or threatening serious physical harm or acts of violence against a specific target or specific group
  • content that promotes or supports violent extremist organizations

Content that targets an individual or identifiable group for harassment or related abuse includes, but may not be limited to:

• • repeatedly targeting specific individuals with sexual advances
  • sharing, threatening to share, or encouraging others to share someone’s private information, including credit card or banking information, National Identity numbers, etc.

Content that incites violence or hatred towards a person or group of people based on race, religion, gender identity or expression, sex, ethnicity, nationality, sexual orientation, veteran status, age, disability or other characteristics associated with systemic discrimination or marginalization includes, but may not be limited to:

• • praising, supporting, or calling for violence against a person or group of people based on the characteristics listed above
  • dehumanizing statements about a person or group based on the protected characteristics listed above
  • promoting or glorifying hate groups and their associated images, and/or symbols

Content that promotes dangerous false or dangerous deceptive medical information that may cause offline harm or poses a direct threat to public health includes, but may not be limited to:

• • asserting that AIDS, COVID-19, cancer or other serious life threatening diseases are a hoax or not real
  • encouraging the consumption of bleach products to cure various illnesses and diseases
  • promoting or suggesting that vaccines approved by local health authorities are designed to cause death 
  • encouraging people to purposely get infected with COVID-19 in order to build immunity to it (e.g. promoting or hosting “coronavirus parties”)

Content that illicitly promotes the sale of regulated or illegal goods includes, but may not be limited to: 

• • selling illegal firearms or firearm parts
  • selling illegal drugs
  • selling endangered species or products derived from endangered species

Content that promotes, solicits, or facilitates child sexual abuse or exploitation includes, but may not be limited to:

• • visual depictions of a minor engaged in a sexual act or lascivious depictions of a nude minor
  • promoting acts of sexual abuse against a child in exchange for money
  • encouraging or promoting sexual attraction by adults towards minors
  • promoting, normalizing, or glorifying child grooming behaviors

Deceptive Content

Creating great experiences on Spotify requires trust that people are who they say they are, that they won’t be scammed, and that no one is trying to manipulate our platform. Don’t use malicious practices to deceive others. What to avoid:

Content that impersonates others in order to deceive includes, but may not be limited to:

• • replicating the same name, image, and/or description as another existing creator
  • posing as another person, brand, or organization in a misleading manner

Content that promotes manipulated and synthetic media as authentic in ways that pose the risk of harm includes, but may not be limited to:

• • audio or video recording that comes from a real and valid source that has been altered in a way that changes the meaning or context of the original media and is purported to be true, thus posing a risk of harm to the speaker or other individuals
  • audio or visual media artificially created through the use of technology that’s purported to be true, such as digitally manufactured sexual audio and video content or content falsely suggesting that someone committed a crime

Content that attempts to manipulate or interfere with election-related processes includes, but may not be limited to:

• • misrepresentation of procedures in a civic process that could discourage or prevent participation
  • misleading content promoted to intimidate or suppress voters from participating in an election

Content that attempts to take advantage of the Spotify community includes, but may not be limited to:

• • posting, sharing, or providing instructions on implementing malware or related malicious practices that seek to harm or gain unauthorized access to computers, networks, systems, or other technologies
  • phishing or related attempts to deceptively solicit or collect sensitive information
  • promoting investment and financial scams like “get rich quick” and pyramid schemes, or otherwise encouraging others to part with money under false pretenses

Sensitive Content

We have tons of amazing content on Spotify, but there are certain things that we don’t allow on our platform. Don’t post excessively violent or graphic content, and don’t post sexually explicit content. What to avoid:

Content that promotes graphic or gratuitous depictions of violence, gore, or other shocking imagery includes, but may not be limited to:

• • severely mutilated or dismembered bodies 
  • promoting animal cruelty or torture 

Content that contains sexually explicit material includes, but may not be limited to:

• • pornography or visual depictions of genitalia or nudity presented for the purpose of sexual gratification
  • advocating or glorifying sexual themes related to rape, incest, or beastiality

Illegal Content

The law is the law. No matter who you are, it is your responsibility to comply with applicable laws and regulations. What to avoid:

Content that violates applicable laws and regulations includes, but may not be limited to:

• • content that does not comply with applicable sanctions and export regulations
  • content that is intended to promote or commit an illegal act of any kind

Content that infringes the intellectual property rights of others includes, but may not be limited to:

• • content provided to Spotify without obtaining necessary permissions
  • content that infringes third-party copyrights or trademarks

Authored by MN Gordon via EconomicPrism.com,

“What the hell is going on?” California Governor, Gavin Newsom

Gender X?

The sun always shines bright over the Golden State.  Even in January.  But, beneath the sunshine, darkness rages in the land of fruits and nuts.

For example, State Senator Scott Wiener – a monster – recently introduced a bill that would permit children 12 and older to be vaccinated against COVID-19 without their parent’s knowledge or consent.  According to Wiener, this bill is consistent with current state law that allows teens to have abortions and obtain birth control without telling their parents.

Yet Wiener’s bill may be finished.  Because his cohort, State Senator Dick Pan, has introduced a bill that would require all children to be vaccinated against COVID-19 to attend K-12 schools regardless of personal beliefs.  Not vaccination?  Then no school.

Perhaps, this is for the best.  Getting kicked out of school at this late stage in the decline and fall of western civilization is a major blessing.  What kid deserves an institutional education from freaks and rejects?

Before we pulled our son out of the local Long Beach public high school, he was learning history from someone that went by Mx.  Apparently, the teacher – a dude with a green beard – was uncertain if he was male or female.  So he used Mx. instead of Mr. or Ms.

This all may seem a little ridiculous, we know.  However, in California, many people are confused about what gender they are.  It’s a real problem.

Several years ago the state Department of Motor Vehicles attempted to simplify things by adding a nonbinary gender designation (X, as opposed to M or F) to driver licenses and identification cards.  But, alas, this further complicated things…

Because if you’re gender X, what locker room do you use when changing into your swimsuit?

All logic was lost to absurdity.

To solve the matter, at least in our local hamlet, the Long Beach Unified School District is using school repair and safety bond measure funds to build high school aquatic centers with all-gender locker rooms.  That way, if you’re confused about your biology, you can don your swimsuit without having to decide what sex you are.

And even if you’re in full agreement with how God made you, you’ll still have to use an all-gender locker room…because that’s the only option.

What could possibly go wrong?

Zombie Apocalypse

California, no doubt, has been in a worsening state of decay for decades.  Public displays of gender confusion are but one of many signs of degeneration.

The recent rash of flash mob smash and grab robberies and freight train plunderings has garnered what local public officials consider to be unwanted national attention.  Quite frankly, for many Americans across the nation, this offers a preview of what tomorrow will bring.

Zombies may be coming to a city or town near you, eventually.  But in California’s urban centers, the zombie apocalypse is already here.  In fact, it’s been here for many years.

As of 2020, according to something called the Los Angeles Homeless Services Authority, there’s a homeless population in Los Angeles County of precisely 66,463.  For perspective, SoFi Stadium, the posh new home of the Los Angeles Rams, which was constructed in Inglewood several years ago at a price tag of $5 billion, has a capacity of 70,000.

So if you tune in to watch the Rams play the San Francisco 49ers on Sunday, or to watch the Super Bowl in a few weeks, the number of zombies roaming around LA County represents 95 percent capacity of SoFi Stadium.  What’s more, the homeless count was not conducted in 2021 because of COVID-19.  By now, the number of zombies is easily over 70,000.

They’re everywhere.  Haphazard urban campsites litter the bank tops of the colossal, concrete Los Angeles River Channel between Downtown Los Angeles and Downtown Long Beach.  Bidenvilles extend along sidewalks and beneath highway bridge abutments.  When you spare a zombie a dollar, they gripe, “that’s all?!”…confirming that price inflation is totally out of control.

The massive army of zombies roaming about the LA LA land paradise – screaming at the air and defecating on residential driveways – has become a significant embarrassment for local leaders.  The massive collection of tents and makeshift shelters has become too much for public officials to ignore.

What to do…

Los Angeles Tackles Zombies Ahead of Super Bowl

Dirty jobs require trained professionals.  Planet Green, from what we gather, is a company that specializes in emergency disaster and biohazard waste cleanup.  Early Monday morning, Planet Green workers donned hazmat suits and cleared away several homeless encampments near SoFi Stadium.

Is this because the Super Bowl is just a few weeks away or merely a coincidence?

The Mayor of Inglewood, James Butts, said the clearing of Bidenvilles had to do with safety and is part of regular cleanups around the city.  Jass Singh, a local business owner, offered another perspective:

“Finally it’s cleared, they should have done it five, ten years ago.”

Clearing out LA zombie camps before primetime affairs has been a classic playbook for local leaders since at least the 1980s.  One local advocacy group, “Services Not Sweeps”, provided a statement, saying in part:

“This is the same strategy politicians use any time a major event comes to LA, whether it’s the Super Bowl or the Oscars or the Olympics.  They use cops and criminalization to sweep away evidence of their failure to address Los Angeles’ affordable housing crisis.”

Services Not Sweeps has compassionate sentiments.  And while politics certainly caused this manmade disaster, there’s no way politics can fix it.  The fact is, LA’s zombie apocalypse is too great to reverse.  Once a city’s slipped into decay and disrepair, it keeps on sliding.

We don’t like it.  We can’t change it.  Still, there’s an immediate challenge at hand.  Here’s the situation:

Super Bowl Sunday is February 13.  Century Boulevard, between LAX and SoFi Stadium, is roughly 4 miles.  Will Planet Green clear all the zombie camps from this corridor in time?

Consider it a Hail Mary.

*  *  *

Silver is an industrial metal with many different applications.  Most important of all, however, is that silver can be stacked.  By this, silver stacking is an important way to subvert government policies of extreme dollar debasement.  If you enjoy stacking silver, and if you’re interested in discovering other means to protect your wealth and profit during the zombie apocalypse, then consider giving the Wealth Prism Letter a try.  Take a look, and join our burgeoning club of silver stacking subscribers today!

Here we go again.

After we saw a veritable rollercoaster in market last week, after Powell’s shockingly hawkish FOMC presser which spooked Wall Street into predicting that 5 (as JPM and Goldman now expect), six or even seven rate hikes (as per the latest Bank of America forecast) are on deck in 2022 alone, tensions have also remained elevated after Powell refused to refute speculation of a 50bps rate hike this year.

Of course, tensions eased on Friday after the latest set of dismal economic data, which led the Atlanta Fed to come out with a 0.1% Q1 GDP estimate which will turn negative in the coming days after just a few more incrementally negative datapoints…

… suggested that inflation will fade far sooner and the US economy will slide into contraction long before the Fed can hike even a handful of times, let along go the way to 2.50% or 3.00% or whatever strategists believe the neutral rate is these days. This, together with tens of billions in month end mutual fund rebalancing, sent futures soaring on Friday in the latest violent intraday reversal.

But with futures set to open in just a few hours, we may get another sharp drop at 6pm ET when traders punt risk after yet another Fed official – we would say hawk but that’s meaningless now that even the uber-doves have turned hawkish to appease Biden and his imploding approval rating…

Monetary policy 4 parts pic.twitter.com/eibcu5nNKo

— zerohedge (@zerohedge) January 28, 2022

… hinted at a 50bps rate hike in March.

In an interview with the Financial Times, Raphael Bostic, president of the Fed’s Atlanta branch, said the Fed could “supersize a rate increase to half a percentage point if inflation remains stubbornly high.“

Curiously, while not jumping on the latest Wall Street bandwagon calling for 5 or more hikes in 2022, Bostic instead stuck to his call for only three quarter-point interest rate increases in 2022, with the first coming in March, but he said a more aggressive approach was possible if warranted by the economic data.

That, the FT notes, could mean rate rises at each of the seven remaining policy meetings in 2022, or even the possibility of the Fed increasing the federal funds rate by half a percentage point, double its typical amount and a tool it has not used in roughly two decades.

“Every option is on the table for every meeting,” Bostic said on Friday. “If the data say that things have evolved in a way that a 50 basis point move is required or [would] be appropriate, then I’m going to lean into that . . . If moving in successive meetings makes sense, I’ll be comfortable with that.”

“I do think that a view has emerged that we have some meetings that we really just dial it in and that there’s no ability of action at, and that’s just never been my mindset.

Bostic added that he would be watching closely for a deceleration in monthly consumer price gains and further evidence that rising wages are not feeding meaningfully into higher inflation when thinking about his forecast for interest rates. Which means that the next CPI print will be especially important.

And, as we noted on Friday, the Atlanta Fed president said he was encouraged by the latest employment cost index (ECI) report, which was published on Friday and which showed a sequential decline, which prompted Bostic to expect a moderation in wage growth going forward.

That said, Bostic expressed little concern about the recent market gyrations, and said it was a natural response to a Fed that was beginning to withdraw its support.

“The reduction of accommodation should translate into tighter financial markets,” Bostic said. “The developments that we’ve seen on that front are comforting in the sense that markets are still functioning the way they’re supposed to, and they are responding to conditions in ways that are rational and appropriate.”

He said, however, that he was closely monitoring overnight borrowing markets, in particular, for signs of stress akin to the episode in 2018 when financial markets seized up as the Fed tightened monetary policy further despite fears of a growth slowdown.

Bostic, who also supports the Fed reducing its $9tn balance sheet “as quickly as” possible without impairing market functioning, said he was “optimistic” about how the economy was going to perform in the coming months, despite elevated inflation.

Throwing a bone to the market bulls, Bostic rejected claims that the Fed would raise interest rates far too aggressively and in a manner that would prove damaging.

“Our policy path is not a constriction path. It’s a less accommodative path,” he said. “If we do the three [interest rate increases] that I have in mind, that’ll still leave our policy in a very accommodative space. I don’t think there’s going to be a lot of constraint on growth as we remove these emergency actions.”

Of course, while the kneejerk response to Bostic is that this is another telegraphing of a 50bps hike, the reality is that all the Fed president is saying is what Powell said earlier, namely that the Fed will now have to be much more reactive to continued price pressures. And yes, while that could include faster rate hikes, it could also lead to a slowdown or even reversal if we hit a recession in the second half, something which BofA’s CIO Michael Hartnett has been pounding the table on in recent weeks…

Hartnett: “Fed won’t end up tightening many times as just few rates hikes & QT are enough to unwind excesses and threaten H2 recession”

He is usually 3-6 months ahead of the herd

— zerohedge (@zerohedge) January 28, 2022

… although the bigger danger, as Hartnett also revealed, is that the Fed will hike until the market breaks. Of course, if his own Atlanta Fed shows GDP has turned negative, we expect Bostic to be among the first to push back on aggressive tightening as the last thing the Fed will do is hike into a clear and present recession.

Meanwhile, even the sellside is starting to turn, with BofA writing on Friday that based on recent data trends, the “risk of a negative growth quarter” is “significant”, and the bank slashed its Q1 GDP forecast from 4.0% to just 1.0%.

Economic conditions aside, there are at least two more fundamental reasons to ignore what Bostic has to say: first, he has always been among the Fed’s more outspoken hawks.

Secondly, even if Bostic is dead set on hiking into a recession (which he isn’t) he won’t have the opportunity to do so for years: as a reminder, he is a non-voter until 2024, by which point not only will the Republican part control Congress…

… but the US will likely already long be in a recession.

Finally, even if the Fed is using Bostic’s FT interview as a way to telegraph what is coming, there are almost two months until the March FOMC, and a lot can change by then, not least the next CPI print which if it comes (well) below expectations, will be viewed as a key dovish reversal by the market, especially if the current downbeat economic trends fail to reverse, pushing the economy straight into a contraction.

By Eric Peters, CIO of One River Asset Management

“The Fed bought $130bln of bonds so far this year. And global central banks bought $300bln already,” said Biggie Too, global chief strategist for one of Wall Street’s too-big-to-fail affairs.

“We have a rate shock, yet they’re still doing QE,” bellowed Biggie. “There really are just two camps now: sheepish equity longs and stubborn equity longs,” he barked.

“So you gonna buy 30yr treasuries with 7% inflation? Or buy gold when the dollar is going up? Who wants to buy emerging markets when the Fed is about to tighten?” asked Biggie, working himself up, bouncing.

“Maybe that’s why equities have gone from being this thoroughbred, racing beautifully around the track, to a bucking bronco – and yet no one can get off.”

* * *

Infrared tests of the ancient artwork reveal that Botticelli initially started painting Christ as a young child, hugged by his mother. But for reasons long since lost, during the year 1500 AD, the 55yr old artist entered his studio, turned the canvas upside down, started over, and produced The Man of Sorrows.

From a few ounces of unremarkable paint, emerged a masterpiece, a haunting work. His earlier paintings were mainly mythological, The Birth of Venus, his most famous. Later, his work turned more Gothic, perhaps a reflection of the darkness that briefly descended on Florence. Dictatorship. Botticelli lived in a time resembling ours, rhyming, the Renaissance — a period of breathtaking creativity, expressed with the tools of time, brushes, chisels, pens.

But even in periods that favor the uninhibited expression of human creativity, we wrestle with our eternal demons. Political conflict, rivalry, false pride, greed, stupidity. We see it manifest today in Russia/Europe, US/China, Republicans/Democrats, climate-change, crushing inequality. The Man of Sorrows changed hands over five centuries, watching our triumphs, defeats, in silence.

An anonymous buyer purchased the painting in 1963. It re-emerged this week, selling for 45,400,000 dollars; a currency invented 282yrs after Botticelli died.

The Sotheby’s auction price is +1,621-times the 28,000 dollars paid in 1963. Such a return is almost inconceivable.

The S&P 500 in those 59yrs is +68-times. Gold +51-times. The US consumer price index is +9-times. But high art is unlike other assets, connecting us to genius, the sublime. And it reveals this truth: an asset with finite supply, but no intrinsic value, can become priceless, if only we imagine it so.

Which leads back to our present Renaissance. We live in a period of utterly stunning human advance, expressed with the technological tools of our time. Today’s greatest creations will barely resemble those of the past. Yet all this is obscured from most by the distractions streaming across the newsfeeds. And our highest calling, of course, is to navigate the rising volatility, while quietly creating and investing in the treasures of tomorrow. 

A 29 year old crypto “expert” that already manages $2.5 billion is coming to an ARK near you.

Ophelia Snyder, whose firm 21Shares manages $2.5 billion from her office in Switzerland’s “Crypto Valley”, is teaming up with ARK Invest’s Cathie Wood to try and launch a bitcoin ETF in the United States, according to Bloomberg. 

She has already opened an office in New York, where crypto-friendly Mayor Eric Adams has publicly proclaimed his support for the asset class. She’s now going to be tasked with the difficult proposition of getting regulators to look favorably upon the idea of a bitcoin ETF. It’s an idea the SEC hasn’t seemed to warm up to just yet. 

But that hasn’t stopped her. She told Bloomberg: “We really want to make people feel confident when they enter the space. That’s the whole game for us — lowering the barriers to entry and making people feel excited about what we feel is revolutionary technology.”

Wood and Snyder first met at a conference, the report says, where they “bonded over their mutual interest in crypto”. Now, Wood sits on the board of Amun, another of Snyder’s crypto-related companies. 

Todd Rosenbluth, head of ETF and mutual fund research at CFRA Research, told Bloomberg that risks of these ETFs “are elevated relative to traditional equity or fixed income products, so it’s easy to see how investors could lose money faster.”

Snyder’s current company tries to minimize risk of crypto “by purchasing the actual coins that underlie its funds and storing them in an offline wallet, known as cold storage”, the report says. While this adds to fees, it adds a layer of security. However, it doesn’t do much to protect investors from the volatile swings in crypto pricing. 

She has also been a critic of bitcoin futures ETFs: “The futures products are much more financially complex outside of the Bitcoin exposure. My worst nightmare is people start buying these products not understanding these nuances.”

21Shares charges between 1.49% and 2.5%. 

Snyder has “an enormous amount” of her own money in crypto, Bloomberg writes. 

She concluded about the asset class: “This is my life. This is the thing I think is going to change the entire world.”

By Seth Carpenter, Morgan Stanley global chief economist

The Fed, Inflation, and Some Unpleasant Math

At last week’s FOMC press conference, Chair Powell was unequivocal about his discomfort with persistently high inflation. Had the January FOMC been a forecast meeting, he told us, he would have revised up his inflation forecast for 2022 by “a few tenths.” The Fed is set on tightening policy this year. Bringing down inflation through monetary policy means slower growth, but how much inflation and growth will decline is the question.

A dirty little secret about the economics profession is how imprecisely we understand the inflation-generating process. The Fed and most mainstream economists have in mind a version of an “expectations-augmented Phillips curve” to describe cyclical inflation. Inflation is driven by inflation expectations and whether the economy has slack and inflation falls or is overextended and inflation rises. That cyclical component ignores other short-term factors, like swings in oil prices or the current supply chain frictions, that can temporarily push inflation up or down. Framing inflation this way has some thorny implications for the next few years, particularly if most of current inflation is cyclical, not temporary.

Core PCE inflation just hit roughly 5%, or about 3 percentage points above the Fed’s target. If the extra inflation is cyclical, policy will have to slow the economy to create enough slack to bring it down. If it is mostly Covid driven and temporary, inflation will come down on its own. Our house view is that the majority of the extra inflation is Covid driven, not cyclical, but what if we are wrong?

Suppose two-thirds of the extra inflation (2 percentage points) is cyclical and only one-third is temporary. The Fed’s baseline estimate of the Phillips curve has a slope of about 0.1, that is, a 1-percentage-point increase in the unemployment rate lowers core PCE inflation by only one-tenth of a percentage point. Simple arithmetic says that a 20-percentage-point increase in unemployment is needed to bring inflation down by 2 percentage points. But even if the relationship is 5 times larger, as may have been the case decades ago, the Fed would need to orchestrate a 4-percentage-point increase in the unemployment rate to wring out those 2 percentage points of inflation. Any time unemployment has risen by 50bp, we have had a recession.

Of course, the Fed does not want to intentionally cause a recession, so something would have to give. The other refuge, of course, is inflation expectations. If the Fed can convince everyone that inflation will get back to 2%, the trade-off is much less painful. But some measures of inflation expectations are highly sensitive to realized inflation, whereas others barely budge. (Others have criticized the prominence of inflation expectations in macro analysis, see Rudd, 2021) .The real question is whether under the current circumstances, the inflation expectations that matter will move simply because the Fed acts, or if inflation has to come down first. If the latter is true, we are still stuck.

So if the bulk of current inflation is cyclical … a recession or years of high inflation. Chair Volcker opted for recession, but inflation in the 1970s was much, much higher. I suspect Chair Powell will not deliberately engineer a recession. The challenge, of course, is knowing how much policy tightening is too much. To be clear, our baseline view is that most of the inflation will prove temporary, but it always pays to ask “what if we are wrong?”

U.S. truckers celebrate the recent Occupational Safety & Health Administration (OSHA) canceled vaccine mandate and their Candian counterparts who have rolled into Canada’s capital, Ottawa, this weekend, demanding an end to cross-border vaccine rules. Truckers are on the frontlines fighting against medical tyranny as the next convoy could be soon headed to Washington, D.C. 

A Facebook group called “Convoy To DC 2022” has more than 63k members and is preparing a convoy of truckers to ride from California to Washington, D.C., to tell the Biden administration and progressives they’re are done with overreaching health mandates. 

Dates and planned routes for Convoy To DC 2022 are expected to be released in the near term on a website and various social media platforms, and a GoFundMe page will be set up. The funds raised will help fund fuel costs and lodging for truckers participating in the movement. 

For truckers considering to partake in the convoy, we wanted to explain what’s happening with diesel markets. 

Bloomberg reports ultra-low sulfur diesel futures have entered backwardation, a market condition where prices today are higher than future contracts trading months out. This is a bullish structure and the first time materializing since 2015. 

The backwardation comes as a powerful winter storm and cold weather have plagued the Eastern U.S., boosting heating demand. Diesel stockpiles in the central Atlantic region decreased to 19.7 million barrels last week, a seven-year seasonal low. Total US stockpiles are well under a 5-year average. 

Dwindling stockpiles and high demand have pressured spot diesel prices, jumping to an 8-year high this month, trading around $2.68 per gallon. 

Putting this all together for the organizers of the Convoy To DC 2022, the most significant expense for truckers will be soaring fuel costs. With backwardation in full swing, diesel prices are likely to move higher. A GoFundMe campaign could greatly alleviate expenses for those planning to make the cross-country drive. 

Authored by Paul Joseph Watson via Summit News,

A speech therapist says that mask wearing during the pandemic has caused a 364% increase in patient referrals of babies and toddlers.

Jaclyn Theek told WPBF News that before the pandemic, only 5 per cent of patients were babies and toddlers, but this has soared to 20 per cent.

Parents are describing their children’s speech problems as “COVID delayed,” with face coverings the primary cause of their speaking skills being seriously impaired.

As young as 8 months old, babies start learning how to speak by reading lips, a thankless task if parents and carers smother themselves with masks to comply with mandates.

A speech therapist says her clinic has seen a “364% increase in patient referrals of babies and toddlers”.

“It’s very important kids do see your face to learn, so they’re watching your mouth.”

What the hell have we done?!

End this cruel insanity. pic.twitter.com/DN6J4yQfju

— Darren Grimes (@darrengrimes_) January 26, 2022

“It’s very important kids do see your face to learn, so they’re watching your mouth,” said Theek.

The news report featured one such mother, Briana Gay, who is raising five children but having speech problems with her youngest.

“It definitely makes a difference when the world you’re growing up in you can’t interact with people and their face, that’s super important to babies,” said Gay.

According to Theek, since the pandemic, autism symptoms are also skyrocketing.

“They’re not making any word attempts and not communicating at all with their family,” she said.

As we previously highlighted, Forbes deleted an article written by an education expert who asserted that forcing schoolchildren to wear face masks was causing psychological trauma.

A study by researchers at Brown University found that mean IQ scores of young children born during the pandemic have tumbled by as much as 22 points while verbal, motor and cognitive performance have all suffered as a result of lockdown.

Michael Curzon noted that two of the primary causes for this are face masks and children being atomized as a result of being kept away from other children.

“Children born over the past year of lockdowns – at a time when the Government has prevented babies from seeing elderly relatives and other extended family members, from socialising at parks or with the children of their parent’s friends, and from studying the expressions on the faces behind the masks of locals in indoor public spaces – have significantly reduced verbal, motor and overall cognitive performance compared to children born before, according to a new U.S. study. Tests on early learning, verbal development and non-verbal development all produced results that were far behind those from the years preceding the lockdowns,” he wrote.

Perhaps all the virtue signalers who think of themselves as such morally upstanding people for wearing masks will change their behavior given they are literally contributing to causing major cognitive problems in children.

Or maybe they simply won’t care, given that the mask is now a political status symbol above anything else.

*  *  *

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While China’s credit impulse recently bottomed and is already starting its next major upcycle, the remnant of the current slowdown are still hitting the economy and overnight the latest PMI data showed that China’s manufacturing sector expanded at a slower pace in January amid a seasonal slowdown, Covid-19 outbreaks and a housing market drop which dragged activity at small firms to the weakest since the depth of the pandemic.

In keeping with China’s penchant for always beating expectations, Beijing’s National Bureau of Statistics reported that the official manufacturing purchasing managers’ index declined to 50.1 from 50.3 in December, just above the median estimate of 50.0 which separates expansion from contraction. Likewise, the non-manufacturing PMI, which measures activity in the construction and services sectors, fell to 51.1, also just fractionally above the consensus forecast. Meanwhile, the non-government Caixin manufacturing PMI fell to 49.1 in January from 50.9 in December, likely due to local outbreaks.

Some details from the NBS report:

• Among major manufacturing sub-indexes, the output index fell to 50.9 from 51.4, and the new orders sub-index decreased to 49.3 from 49.7.
• The new export order sub-index increased to 48.4 in January vs. 48.1 in December, and the import sub-index fell to 47.2 in January vs. 48.2.
• The manufacturing employment sub-index decreased to 48.9 in January from 49.1. The raw material inventories sub-index edged down to 49.1 from 49.2, and the finished goods inventories sub-index fell to 48.0 from 48.5 in December.
• The suppliers’ delivery times sub-index fell to 47.6 from 48.3, suggesting slower suppliers’ delivery likely due to local outbreaks and related restrictions.
• By enterprise size, the PMI of large enterprises rose to 51.6 (vs. 51.3 in December), the highest in six months while the PMIs of small enterprises fell to 46.0 (vs. 46.5 in October),  the lowest since February 2020 and taking a contracting streak to a ninth month.

Price indicators in the NBS manufacturing survey suggest inflationary pressures picked up in January with the input cost sub-index rebounding significantly to 56.4 (vs. 48.1 in December), and the output prices sub-index rose to 50.9 (vs. 45.5 in December), both are higher than November levels. NBS mentioned both input cost and output price sub-indexes of petroleum, coking and other fuels, and smelting and pressing of nonferrous metals were above 60.

The official non-manufacturing PMI – comprised of the services and construction sectors – also fell in January to 51.1 vs. 52.7 in December, driven by a decline in services sectors – the services PMI fell to 50.3 (vs. 52.0 in December), and the lowest since August. According to the survey, the PMIs of monetary and financial services were above 60 in January, while the PMIs of high-contact consumer services, including accommodation and transportation, were below 50 due to local outbreaks in January.

The Caixin manufacturing PMI was released later in the morning. The headline index fell to 49.1 in January from 50.9 in December: this was the lowest print since the Covid crash in March 2020.

Sub-indexes in the Caixin manufacturing PMI showed themes were mostly consistent with NBS PMIs except new export orders (stronger in NBS, weaker in Caixin): 

• deceleration in output and new orders in January (48.4 and 48.5 vs. 52.7 and 50.9 in December),
• weaker employment (47.9 vs. 48.7 in December),
• falling inventories in both raw inputs and finished goods (49.8 and 48.7 vs. 50.3 and 50.1 in December),
• renewed inflationary pressures in input and output prices (both rose to 52.6 in January vs. 50.8 and 49.2 in December),
• slower suppliers’ delivery (47.5 vs. 48.7 in December), while new export orders sub-index in Caixin fell to 46.5 in January (vs. 49.9). Caixin survey mentioned the recent uptick of COVID cases home and abroad impacted sales and supply chains in January.

Despite the traditional fudging of PMI numbers especially on the NBS side, the numbers signaled a clear slowdown in the economy – with weaker output and new orders, weaker employment, falling inventories, slower supplier’s delivery, heightened inflationary pressures – although to be expected not just due to local outbreaks and related restrictions but because Chinese factories often see a production lull in January and February as workers head home for the Lunar New Year holidays. The divergence between NBS and Caixin in new export orders could be related to potentially geographic coverage differences and sector bias – NBS closely linked to raw materials, Caixin tilted towards machinery – between the two surveys. Activity has also been affected this year by the government’s orders for steel plants to trim output to reduce air pollution ahead of the Winter Olympics in Beijing which begin Friday.

“Industrial activities slowed due to weak domestic demand,” Zhiwei Zhang, chief economist at Pinpoint Asset Management Ltd., wrote in a note. “The slowdown is particularly severe for the small firms.”

The disruptions have added to the woes facing the Chinese economy, with home sales falling and consumption sluggish due to tightened restrictions to contain the spread of the highly-contagious omicron virus variant. Residents in places where there have been recent Covid-19 outbreaks, including Beijing, Shanghai and the northern port city of Tianjin, have been urged to not leave the cities unless necessary.

Manufacturers were also squeezed by higher costs, with input prices rising at the fastest rate in three months, according to the official data.

“That could drive the producer price index up and narrow the room for monetary policy,” said Bruce Pang of China Renaissance Securities Hong Kong, although in light of the recent commitment to easing policy, we doubt that even a solid bounce in the PPI will derail Beijing’s new-found monetary generosity.

To spur growth, the central bank has cut key interest rates, lowered reserve requirements for lenders and vowed to open its toolbox wider, in response to top leaders’ call for prioritizing stability. Still, a set of earliest available indicators tracked by Bloomberg sent mixed signals about the state of the economy in January, with the housing market and consumer spending staying weak and business confidence and stocks tumbling.

Elsewhere, construction activity continued to cool this month, with the NBS sub-index falling to 55.4, suggesting sentiment remained subdued given the property downturn and the limited effect that government spending on infrastructure is having so far. The approaching holiday and cold winter may have also had some impact on building.

“The weak PMI indicates the policy easing measures from the government have not yet been passed to the real economy,” according to Pinpoint’s Zhang. “We expect the government will step up policy supports in coming months, particularly through more fiscal spending.”

Translation: China’s all important credit impulse will soar, perhaps hitting its cycle high around the US midterm elections.

 

Authored by David Stockman via AntiWar.com,

It looks like we have plunged so deeply into the theater of the absurd that we now have a case of “Albania don’t want the ball!”.

Our reference, of course, is to the apocryphal football story about a coach repeatedly signaling a play from the sidelines, only to have the quarterback keep breaking huddle while frantically waving his arms and shouting,

“But Leroy don’t want the ball!”

That is to say, Ukrainian president Zelensky, a former television comic, apparently knew all about the 60- year old American story, at least according to the geniuses at CNN who reported it below. That the White House quickly disavowed the “Ukraine” story is undoubtedly your authentication:

A call between US President Joe Biden and Ukrainian President Volodymyr Zelensky on Thursday “did not go well,” a senior Ukrainian official told CNN…… Biden warned Zelensky an imminent invasion is a “distinct possibility”

On the “long and frank call, Biden warned his Ukrainian counterpart……that an invasion was now virtually certain, once the ground had frozen later in February…..

Zelensky, however, restated his position that the threat from Russia remains “dangerous but ambiguous,” and it is not certain that an attack will take place, the official said.

Zelensky urged his American counterpart to “calm down the messaging,” warning of the economic impact of panic, according to to the official.

You might think so. For instance, it is apparently not just president Zelensky who is not seeing the white of those Russian eyes. The country’s defense minister also recently weighed in to that effect. So let’s pierce the fog of hysteria by asking Ukrainian Defense Minister Reznikov what’s going on:

“I can absolutely say that to date, the Russian armed forces have not created a strike group that could make a forceful invasion of Ukraine.”

It must be comical for Russia to sit back and watch the Keystone Kops at the helm of US foreign policy blunder and bluster, with Biden’s press secretary insisting that a Russian invasion is “imminent” even as the Ukrainians – who are in a position to know and also in a position to benefit if it was true – pour cold water on the Biden war-fear-porn.

Then again, if this purportedly “beleaguered ally” doesn’t see the danger, so what?

The Washington and NATO neocons do – they are literally foaming at the mouth with war fever. Kiev is obviously not aware that the White House, with access to arguably “privileged intel”, is convinced that Russia will invade “any-minute-now”.

So, yes, we can cut to the transcript of the must re-watch Wag the Dog. After all, when it comes to America’s security and prosperity, what’s really the difference between Albania and Ukraine, anyway.

So, as Hollywood was still bold enough back in 1998 to say,

Wait. We can’t afford a war.

We’re not having a war. We’re having the appearance of a war.

We cannot afford it. -What’ll it cost? –

But they would find out.

Who’s gonna find out? The American people? Who’s gonna tell them? What did they find out about the Gulf War? One video of one bombfalls down a chimney.

The building could have been made out of Legos.

You want us to go to war?

That’s the general idea.

With who?

I’m working on it. Albania?

Why?

Why not?

What do you know about them?

Nothing.

Precisely. They seem shifty, standoffish. Who knows from Albania? Who trusts Albanians?

What did Albania ever do to us?

What did they do for us? This is why we have to mobilize the B-3 bomber.

You really want to go to war with Albania?

We don’t have a choice. This is what you do to make it real. Get your press office right now to deny it. It didn’t happen.

“There is no report of Albanian activity.”

They have to deny it. It didn’t happen.

Deny. …news from the president on his visit to China.

Another sort of news, however… has emerged from the presidential quarter. We turn to Melissa Gardner at KZAB in Santa Fe… with this breaking news.

Thanks, Richard. Today a local Firefly Girl… accused the president of *** misconduct. This photo of the girl claims that the *** misconduct… occurred inside the Oval Office. Her attorney says there are no plans yet… to hold a press conference.

There you have it. There is no imminent war, threat of war, even tiny specter of war, in the Ukraine. It’s all White House theater, and its about nothing more than–like director Barry Levinson’s “suitcase nukes” from Albania – distracting from Biden’s plunging poll figures.

So it needs be said: Compared to Donald Trump’s statists excesses and pretensions, the Biden team’s disgusting War Movie would have made Dustin Hoffman so proud at the end that they would not have had the gall to kill him with a heart attack!

Unfortunately, however, this goes way beyond Wag The Dog 2.0. It’s not simply that there are no meaningful, historically validated Ukrainian borders to defend – if that made a difference for national security, which it doesn’t. More importantly, however, is that the underlying policy architecture – preserving the rule of law which Washington claims to have scrupulously advanced since, say 1917–is a complete and unmitigated crock.

As we indicated in the previous article, Ukraine is, and always has been, a patchwork of morsels that belonged until recently to different empires – Austro-Hungarian and Russian – as well as several nations, such as Russia, Poland and Romania. It regroups Catholicism and Orthodoxy, and has millions of ethnic Russians and Russian speakers with deep historical, cultural and economic links with Russia.

So Ukraine was a de facto new Yugoslavia.

The fatal mistake committed by Washington in 2014, therefore, was to force Kiev as well as the Ukrainian population as a whole to make an impossible choice between Europe and Russia. Or as Aaron Mate astutely observed,

The inevitable result would have to be Maidan, completely manipulated by American intel, even as Russians clearly saw how the EU switched from the position of honest broker to the lowly role of American chihuahuas.

Russo-phobic U.S. hawks will never renounce the spectacle of their historical adversary bogged down in a slow-burning fratricidal war in the post-Soviet space. As much as they will never renounce Divide and Rule imposed over a discombobulated Europe. And as much as they will never concede “spheres of influence” to any geopolitical player.

Without their toxic imprint, 2014 could have played in quite a different manner.

To dissuade Putin to restore Crimea to its rightful place – Russia – it would have taken two things: for Ukraine to be decently managed after 1992, and not to force it to choose the Western camp, but to make it a bridge, Finland or Austria-style.

After Maidan, the Minsk agreements were as close as possible to a viable solution: let’s end the conflict in Donbass; let’s disarm the protagonists; and let’s re-establish control of the borders of Ukraine while providing real autonomy to Eastern Ukraine.

For all that to happen, Ukraine would have needed a neutral status, and a double security guarantee, by Russia and NATO. And to render the association agreement between Ukraine and the EU compatible with the close links between Eastern Ukraine and the Russian economy.

All that would have perhaps configured a European vision of decent future relations with Russia.

Yet the Russo-phobic Deep State would never allow it. And the same applied to the White House. Barack Obama, that cynical opportunist, was too engulfed by the dodgy Polish context in Chicago and not free from the exceptionalist obsession with deep antagonism to be able to build a constructive relationship with Russia.

Then there’s the clincher, revealed by a high-level US Intel source.

In 2013, the late Zbigniew “Grand Chessboard” Brzezinski was presented with a classified report on Russian advanced missiles. He freaked out. And responded by conceptualizing Maidan 2014 – to draw Russia into a guerrilla war then as he had done with Afghanistan in the 1980s.

And here we are now: it’s all a matter of unfinished business.

In the meanwhile, here is the spoiler alert for the next article: The idea that what is happening on the Washington orchestrated TV stage has anything to do with standing up to dictators and Munich 2.0 is so blithering stupid that it deserves to be torn asunder limb-for-limb.

Which is exactly what we intend to do.