Month: April 2022

Bretton Woods III? China Begins Buying Russian Coal And Oil In Yuan 

Bretton Woods III? China Begins Buying Russian Coal And Oil In Yuan 

The old economic order, in which the dollar’s centrality to global trade remains king, is beginning to fade. The latest example of the dollar’s demise comes as China purchases coal and oil from Russia in yuan due to Western sanctions isolating Russian banks from the SWIFT payment system. 

Chinese commodity firms purchased Russian coal in local currency in March, and the first shipments are expected to arrive in China this month, according to Bloomberg, citing Chinese consultancy Fenwei Energy Information Service Co. Traders said this coal shipment paid in yuan would be the first since the U.S. and Europe unleashed harsh sanctions severing some top Russian banks from SWIFT. 

Traders are also reporting Russian crude bought in yuan. The first Eastern Siberia Pacific Ocean grade crude shipment will arrive at Chinese refiners in May. 

Russia and China trading yuan for commodities is just one example of a new emerging economic order.

Premium subs should recall former N.Y. Fed repo guru and current Credit Suisse strategist Zoltan Pozsar’s stunning note last week that said the consequences of the Ukraine war are ushering in “the birth of the Bretton Woods III – a new world (monetary) order centered around commodity-based currencies in the East that will likely weaken the Eurodollar system and also contribute to inflationary forces in the west.”

Fast forwarding to the punchline, Poszar wrote that if the framework he has laid out previously (and again, in his latest note) is the right framework to think about how to trade interest rates in coming years, inflation will be higher; the level of rates will be higher too; demand for commodity reserves will be higher, which will naturally replace demand for FX reserves (Treasuries and other G7 claims); Meanwhile, demand for dollars will be lower too as more trade will be done in other currencies; and as a result of this, the perennially negative cross-currency basis (the dollar premium) will naturally fade away and potentially become a positive cross-currency basis.

Translation: the dollar is on its way out as the world’s undisputed reserve currency, a consequences of events that put in motion when Putin invaded Ukraine (with the implicit blessing of China and India) and when the West decided to expel Russia from the entire western financial system.

It is this chain of events that Pozsar calls Bretton Woods III and the reports of China’s purchases of oil and coal in yuan (not dollars) suggesting the path to that new world order is accelerating faster that many hoped (as the surge in the Ruble may also suggest).

Pozsar spoke with Bloomberg’s Joe Weisenthal and Tracy Alloway this week and recited his Bretton Woods III thesis, suggesting: 

“Instead of a Volcker moment, we got a Putin moment and we basically have war and out of this war, something will also emerge.

“Out of this, I think this ‘Bretton Woods III’ that I started to kind of develop and run with, is a world where we are, again, going to go back to commodity-backed money — where gold, once again, is going to play a big role. And not just gold, but I think all forms of commodities,” Pozsar said.

To the Credit Suisse strategist’s point, the global financial system’s plumbing is being reworked, and the dollar’s dominance in global trade is being challenged.

As Pepe Escobar recently noted, Iran has shown how to do it.

Persian Gulf traders confirmed to The Cradle that Iran is selling no less than 3 million barrels of oil a day even now, with no signed JCPOA (Joint Comprehensive Plan of Action agreement, currently under negotiation in Vienna). Oil is relabeled, smuggled, and transferred from tankers in the dead of night.

All the blather about “crashing Russian markets,” ending foreign investment, destroying the ruble, a “full trade embargo,” expelling Russia from “the community of nations,” and so forth –that’s for the zombified galleries. Iran has been dealing with the same thing for four decades, and survived.

Moscow is also considering a rupee-ruble payment system for Indian oil traders, while Saudi Arabia could start pricing some of its brent in yuan for Chinese traders.

“The oil market, and by extension the entire global commodities market, is the insurance policy of the status of the dollar as reserve currency,” said economist Gal Luft, co-director of the Washington-based Institute for the Analysis of Global Security who co-wrote a book about de-dollarization.

“If that block is taken out of the wall, the wall will begin to collapse.”

A drop in the demand for dollars would be bad news for a US government that depends on dollar demand to fund its out-of-control spending. As Michael Maharrey recently wrote, imagine a world in which the Chinese didn’t need dollars.

China ranks as the biggest foreign holder of US debt. If it continues to divest itself of dollars, who will pick up the slack? The Federal Reserve has been buying Treasuries hand over fist for the last two years, keeping its big fat thumb on the bond market. But it’s tapering purchases and supposedly planning on shrinking its balance sheet. If global demand for Treasuries drop precipitously — and it would in a world without the petrodollar — the US government would either have to drastically cut spending or the Fed would have to continue printing money to monetize the debt.

Even if this is nothing but talk, it underscores the fact that the dollar is on shaky ground. US policymakers would be wise to consider future dollar weaponization carefully.

Tyler Durden
Thu, 04/07/2022 – 11:22

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‘If I Did 1/100 Of What Hunter Biden Did, I’d Be In Jail For The Rest Of My Life’: Eric Trump

‘If I Did 1/100 Of What Hunter Biden Did, I’d Be In Jail For The Rest Of My Life’: Eric Trump

Authored by Harry Lee and Steve Lance via The Epoch Times,

There are no “equal scales of justice” in the United States, and the mainstream media has been covering up for the Biden family, according to Eric Trump, the second son of former President Donald Trump.

“Based on their approval rating, [the mainstream media] is really damaged because they’ve got 7 percent approval rating in this country. It’s horrible. People don’t trust them anymore,” Eric Trump told NTD’s “Capitol Report” over the weekend.

Eric Trump at the Stop the Steal rally in Washington on Jan. 6, 2021. (Jenny Jing/The Epoch Times)

In October 2021, a Gallup poll showed that only 7 percent of adult Americans have “a great deal” of trust in the media. Combined with 29 percent “a fair amount” of trust, they represent the second-lowest confidence level since Gallup first tracked such data in 1972. Another 29 percent of the public has “not very much” trust, and 34 percent have “none at all.”

“If I did 1/100 of what Hunter Biden did, I’d be in jail for the rest of my life,” said Eric, the executive vice president of the Trump Organization.

Hunter Biden, the sole surviving son of President Joe Biden, has been involved in controversy for years, particularly concerning his business dealings while his father was vice president. Hunter Biden made $50,000 a month as a board member for Ukraine-based Burisma while his father was charged by Obama with helping improve the country’s governmental practices.

On March 28 and 29, Sens. Chuck Grassley (R-Iowa) and Ron Johnson (R-Wis.) released bank records showing payments were made to Hunter Biden from a Chinese Communist Party-linked company. “The evidence is stunning, and it is growing,” said Johnson.

The U.S. Attorney’s Office in Delaware has been investigating Hunter Biden for his possible tax fraud, according to the younger Biden.

Later last year, a New York art gallery helped Hunter Biden sell his artwork. The arrangement was criticized in a CNN interview with Walter Shaub, the Obama administration’s Government Ethics Office director, as setting a precedent that is “perfect for funneling bribes.”

Hunter Biden (L) embraces his father, President-elect Joe Biden, in Wilmington, Del., on Nov. 7, 2020. (Andrew Harnik/Pool/AP Photo)

“The mainstream media hasn’t mentioned Hunter Biden’s name in 258 days. There’s a serious problem with that. They let him skirt by. They carry Joe Biden’s water,” Eric Trump said.

According to media watchdog NewsBusters, the corporate media didn’t mention Hunter Biden from July 12, 2021—when NBC talked about the ethics of his art sale—until March 16, 2022, when The New York Times admitted the authenticity of his laptop.

On March 30, The Washington Post confirmed the laptop story as well.

When the New York Post first reported on Hunter Biden’s laptop in October 2020, the mainstream media overwhelmingly discredited the report. Some social media sites, such as Facebook and Twitter, quickly suppressed the report. Twitter locked the newspaper’s account for more than two weeks.

Eric Trump said the corporate media has been covering up for Hunter’s father Joe Biden as well. He said if his father had said 1/100 of the “stupid things” Biden said, the media and the left would call for implementing Article 25 of the Constitution to remove the president.

The elder Biden has been frequently caught uttering gaffes during his public appearances.

“But again, they’re on that side, and they’ll do anything to cover up for him and let him get away with just about anything under the sun,” said Eric.

“You don’t have equal scales of justice in this country. You don’t have equal media coverage. The media is the propaganda wing of the left-wing party. And I think that [has] become very clear to all Americans.”

Hunter Biden has acknowledged his actions didn’t look good but denied doing anything wrong. President Biden has repeatedly defended his son.

On April 3, White House chief of staff Ron Klain said President Biden believes that his son didn’t break the law.

“The president is confident that his family did the right thing,” Klain told ABC. “But again, I want to just be really clear: these are actions by Hunter and his brother, they’re private matters, they don’t involve the president. And they certainly are something that no one at the White House is involved in.”

Tyler Durden
Thu, 04/07/2022 – 11:00

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Koch Network Smeared as Pro-Russia for Suggesting Sanctions Might Not Work


krtphotoslive910204

Stand Together is a charitable organization founded by Charles Koch that gives money to libertarian groups and causes. It works to advance classically liberal ideas on a variety of issues: school choice, criminal justice reform, regulation, and foreign policy, to name just a few. Stand Together works with right-leaning organizations on some of these issues, left-leaning organizations on other issues, and also with organizations that don’t neatly fit the left-right paradigm. (Disclosure: Reason Foundation, the nonprofit that publishes Reason, receives support from Stand Together.)

Unfortunately, many progressive journalists—and even some populist conservatives—view everything connected to Charles Koch and his late brother David as nefarious by default. In their zeal to denounce the Koch brothers’ influence on American politics, they end up attacking policies that they should otherwise support.

Case in point is this bizarre and misleading “exclusive” report on Stand Together from Judd Legum, a progressive journalist who writes the newsletter Popular Information. Legum accuses Stand Together of supporting a “partial victory” for Russia in Ukraine, and wanting the U.S. to drop “virtually all” Russian sanctions.

“In an internal email obtained exclusively by Popular Information, Stand Together, the influential non-profit group run by right-wing billionaire Charles Koch, argues that the United States should seek to deliver a partial ‘victory’ to Russia in Ukraine,” writes Legum. “The email was sent to Stand Together staff by Dan Caldwell, the group’s Vice President of Foreign Policy, on March 16. The subject line was ‘An Update on Ukraine.'”

Nowhere in his article does Legum share the email in its entirety: Instead, he selectively quotes from it, leaving out important, clarifying context. He also takes great pains to portray skepticism of the long-term effectiveness of economic sanctions as some kind of kooky, fringe belief.

Legum describes Caldwell’s email as offering a “boilerplate” denunciation of Russian President Vladimir Putin that “quickly pivots” to a “broad rebuke of international efforts to sanction the Russian government,” as if the sentiment expressed is brief or insincere. Here is the relevant section of the email:

I wanted to take a moment to better connect you to our sense of things regarding the war in Ukraine.

Russia’s invasion of Ukraine is immoral, unjustified, and should be immediately halted. In addition, the regime of Vladmir Putin is authoritarian and has inhibited the Russian people from enjoying the benefits of a free and open society.

Throughout our decades-long history, our community has consistently stood against unjust wars and advocated for peaceful relations between nations.

So while we support the Ukrainian people, we also must do everything we can to prevent escalation and reduce the threat of nuclear conflict.

Understandably, the invasion of Ukraine and the suffering inflicted on its people by the Putin regime has evoked a strong response among us all. This has contributed to demands from some for the United States to take a more aggressive posture against Russia – including calls for actions that would entail direct military strikes against Russian forces, such as the imposition of a NATO no fly zone over Ukraine.

However, it is not in America’s or anyone’s interest for the war to escalate into a larger conflict between a nuclear-armed Russia and the United States. Especially not the Ukrainians, who will bear the brunt of a more violent and widespread conflict.

This is not to say the United States should do nothing.

I am not sure why Legum reads this as a “boilerplate” denunciation followed by a “quick pivot.” I read it as sober and well-considered—in truth, I can’t find anything with which to disagree. (Though perhaps Legum would say that I too am compromised by Koch dollars.)

In the next half of the statement, Caldwell expresses support for sanctions against specific Russian leaders, and says that broader sanctions should “never be taken off the table.” But he perceptively questions whether broad-based, long-running sanctions have generally succeeded in the past, and provides various examples of regimes that withstood sanctioning:

The United States should support diplomatic efforts to help end the war. An outright victory by either Russia or Ukraine is increasingly unlikely and a diplomatic resolution is the path that best limits the bloodshed and minimizes the risk that the current war could escalate into a larger conflict.

On the question of sanctions, aggressive and targeted sanctions against Russian leaders are warranted. Additionally, sanctions are a legitimate tool of American statecraft and should never be taken off the table.

However, overly-broad sanctions rarely work as intended and often strengthen the authoritarian regimes that are being targeted while increasing the suffering of ordinary people – something you already see taking place in Russia. Additional examples of this dynamic in action include Iraq in the 1990s’, Venezuela, Iran, and Afghanistan – all countries where people had no ability to hold their rulers accountable for the impact of the sanctions precisely because they were authoritarian regimes.

Most irresponsibly, Legum highlights the following line: “An outright victory by either Russia or Ukraine is increasingly unlikely and a diplomatic resolution is the path that best limits the bloodshed.” He describes this as Stand Together advocating for the U.S. to “seek to deliver Russia a partial ‘victory’.”

But Caldwell clearly does not wish for Russia to achieve “victory,” partial or otherwise; he is merely acknowledging that any peace will likely involve both Russia and Ukraine getting some things that they want. It’s perfectly reasonable to concede that in order to end all the death and destruction, Putin will have to emerge from the conflict as something short of a complete and total loser.

Legum quotes two foreign policy experts—Brian Katulis and Daniel Fried—who think the current sanctions should remain in place and believe they are working to “reduce Putin’s resources for further aggression.” They are certainly entitled to that opinion; there is little reason to doubt that the sanctions are making things harder in Russia, including for ordinary Russians. But it is not crazy to wonder whether the sanctions will meaningfully prevent Putin from continuing the war in Ukraine, or whether the amount of suffering we are dispensing to the Russian people is ultimately counterproductive or even immoral.

Legum’s article has drawn well-deserved criticism from Michael Cohen, a fellow at the Eurasia Group Foundation, and Emma Ashford, who works for the Atlantic Council. Both described Legum’s piece as a “hatchet job,” and rightly so.

In response, Legum criticized Cohen and Ashford on the grounds that their organizations also received Koch funding. But Legum’s pet expert, Fried, is also affiliated with the Koch-funded Atlantic Council, so the insinuation that a Koch affiliation means we should automatically reject an expert’s criticisms backfires in all directions here.

The overarching point of Legum’s article is to cast aspersions on Koch Industries’ decision to continue operating several glass manufacturing facilities within Russia. Koch Industries, for what it’s worth, maintains it will not “walk away from our employees there or hand over these manufacturing facilities to the Russian government so it can operate and benefit from them.”

But it’s absurd to characterize Stand Together’s skepticism of sanctions as anything other than a sincere belief held by some libertarians, noninterventionists, and a great many progressives. Indeed, Rep. Ro Khanna (D–Calif.), one of the most left-leaning members of the House, has taken an identical position. Progressive Reps. Ilhan Omar (D–Minn.) and Cori Bush (D–Mo.) voted against the U.S. ban on Russian oil imports.

Legum did not respond to a request for comment.

The post Koch Network Smeared as Pro-Russia for Suggesting Sanctions Might Not Work appeared first on Reason.com.

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“Rubble” Surges To 2-Month Highs Against Dollar As Russia Works To Reduce FX Volatility

“Rubble” Surges To 2-Month Highs Against Dollar As Russia Works To Reduce FX Volatility

Having crashed to a record low of 121.5 per dollar shortly after the Ukraine war began – triggering memories of the battering it took during the 1998 Russian financial crisis – the Ruble was (for a brief period) the most potent symbol of the crushing blow that The West had struck against Russia’s economic fortunes.

Things were so bad that President Biden took to Twitter to mock the currency, saying that it had been reduced to “rubble”…

Two weeks later, things look a little different as the Russian currency has soared higher against the USDollar – now at its strongest against the greenback in two months…

There are numerous reasons for the rebound, including capital controls, but the main drivers appear to be Putin’s “Rubles for Gas” ultimatums and the fact that, as Mike Shedlock noted, the much-lauded sanctions against Russia are in fact “half-assed” and have done little to reduce inbound cashflows for energy and ag products.

“A current-account surplus should actually be another source of stability for the ruble,” said Brendan McKenna, a strategist at Wells Fargo Securities LLC.

“If energy prices remain high and major importers of Russian energy and commodities continue to purchase, the current account should stay in surplus.”

Of course, due to the embarrassing nature of this resurgence going against the sanction-crushed-‘rubble’ narrative from Washington, U.S. Treasury Secretary Janet Yellen quickly jumped into rubbish the market’s comeback here, claiming that the market for rubles has become so manipulated by actions of the Russian government and its central bank to limit capital outflows that “you should not infer anything” from the value of the ruble.

“As Russia’s economy and financial sector adapt to a new equilibrium of capital controls, managed prices, and economic autarky, it is not surprising that some of the domestic markets stabilize,” said Elina Ribakova and Benjamin Hilgenstock, economists at the Institute of International Finance.

“Sanctions have become a moving target and will require adjustments over time to remain effective.”

However, not everyone is buying the rebound as as positive sign:

“Don’t buy the peace rallies,” said Paul Domjan, a senior contributing analyst at Tellimer.

“Investors should be very cautious about market rallies following news about peace talks. There will be plenty of false dawns as the world valiantly seeks to end this war.”

However, all the time China, India (and much of Europe) is still buying Putin’s energy and ag products… no matter how loud the threats come from Washington, the Ruble will stave off the “rubble” narrative.

Additionally, Russian FinMin Anton Siluanov noted this morning that Russia will do everything to ensure its creditors receive debt payments, and is working on measures to reduce ruble volatility, make ruble exchange rate more predictable.

Tyler Durden
Thu, 04/07/2022 – 10:40

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Bond Market Volatility Here To Stay If Fed Has Way

Bond Market Volatility Here To Stay If Fed Has Way

By Edwards Bollingbroke, Bloomberg Markets Live analyst and reporter and former rates trader.

Until investors receive some clear and concise guidance on the Federal Reserve’s target for its policy path, bouts of bond market volatility are likely to stick around.

Harry Truman once said: “If you can’t convince them, confuse them” — an apt description of the current relationship between the Fed and interest-rate traders. Rates volatility has surged over recent weeks on a clouded outlook for monetary policy, as traders adjust positions based on expectations for Fed interest-rate hikes and balance-sheet reductions.

Yet still no one knows — not least the Fed — what is the so-called terminal rate, or the level of interest rates where the economy can cruise along without needing a policy change to speed up or slow down. This lack of precision has stretched rates volatility to multi-year highs, and in some cases through levels seen in the March 2020 liquidity crisis.

December 2022 eurodollar futures, contracts that closely align the perceived path of the policy rate, dropped as much as 14 basis points during that peak selloff on Tuesday following comments from Fed Governor Lael Brainard on shrinking the balance sheet as early as May.

Bouts of volatility have gathered pace this year, with the biggest rally sending December 2022 futures to close up 22 basis points on March 1 following capitulation of hawkish positions. That was followed the next day by a selloff that pushed it down 28 basis points after Fed Chair Jerome Powell expressed openness to 50 basis-point rate hikes.

Such moves have helped drive net weekly changes to among the highest levels over the past decade and make the contracts extremely hard to trade, especially within a liquidity shock backdrop.

While rates markets grapple with price swings, strategists are penning an array of projections, albeit somewhat conditional, for the end-game of the policy path.

Deutsche Bank recently forecast the terminal rate for this cycle “could” be in the 3.25% to 4.25% range, compared with a rate of around 3% and 3.25% from strategists at both Goldman Sachs Group Inc. and Bank of America Corp.

The Fed sees the target rate peaking at 2.75% in 2023 and 2024 then falling to its neutral or long-term rate of 2.375% the following year, based on median estimates in its dot-plot projections from the March meeting.

Minutes of that meeting released Wednesday noted that participants “judged that it would be appropriate to move the stance of monetary policy toward a neutral posture expeditiously”.

Investors are currently trading the terminal rate above 3.00% by mid-2023, pricing in cuts by the end of next year, based on interest-rate swaps.

Speaking last weekend, Fed New York Bank President John Williams called for a sequence of rate hikes to curb inflation while monitoring the economy’s progress, noting “clearly, we need to get something more like normal or neutral, whatever that means.”

Obviously, a cautious, flexible approach is warranted to rein in inflation while protecting economic growth. But such a lack a clarity in the policy narrative means unprecedented price swings are likely here to stay as traders reposition for the next anticipated lurch in Fed steps.

Tyler Durden
Thu, 04/07/2022 – 10:25

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Why Is Facebook Censoring Articles About How BLM Used Donations To Buy a $6 Million House?


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When George Floyd, an unarmed black man, was killed by Minneapolis police in May 2020, donations poured in for Black Lives Matter (BLM) from people who thought they were funding racial justice initiatives and helping to ensure bad-actor cops would finally be held accountable for their violent actions.

Surely some of the donations did go toward that. But $6 million of them went toward paying for a 6,500-square-foot house in Southern California, replete with a pool and a bungalow.

Worse still, when the New York Post reported on Black Lives Matter’s organizational malfeasance, Facebook censored the story. Meta, which owns Facebook, has deemed the content “abusive.”

In October 2020, Black Lives Matter received $66.5 million from generous donors. Later that same month, a man named Dyane Pascall—the financial manager for BLM co-founder Patrisse Cullors’ consulting firm—bought the $6 million house. “Pascall transferred ownership of the house to an LLC established in Delaware by the law firm Perkins Coie,” Sean Campbell reports at Intelligencer, which “ensured that the ultimate identity of the property’s new owner was not disclosed to the public.”

Since then, the house’s raison d’etre has been…somewhat unclear. It serves as a sort of secure location—providing high-ranking members of the organization a place to sleep when they need it—but also a place to record content for posting on social media, both for the BLM account and for Cullors’ own projects (like a peach cobbler cooking video, notes Intelligencer).

More from Campbell:

On March 30, I asked the organization questions about the house, which is known internally as “Campus.” Afterward, leaders circulated an internal strategy memo with possible responses, ranging from “Can we kill the story?” to “Our angle — needs to be to deflate ownership of the property.” The memo includes bullet points explaining that “Campus is part of cultural arm of the org — potentially as an ‘influencer house,’ where abolition+ based content is produced by artists & creatives.” Another bullet is headed “Accounting/990 modifications” and reads in part: “need to first make sure it’s legally okay to use as we plan to use it.” The memo also describes the property as a “safehouse” for leaders whose safety has been threatened. The two notions — that the house is simultaneously a confidential refuge and a place for broadcasting to the widest possible audience — are somewhat in tension. The memo notes: “Holes in security story: Use in public YT videos.”

None of this is technically illegal, but all of it is ill-advised if your goal is to ensure donors trust that their money will be used to advance racial justice, not personal enrichment for the founders. And these reports, from both Intelligencer and the New York Post, are extraordinarily damning for an organization whose leaders have already come under scrutiny for their extravagant spending. Cullors’ posh real estate holdings totaling at least $3.2 million were the subject of a prior New York Post piece that ended up being censored by Facebook, unable to be shared on the platform.

This isn’t the first time the Post has run afoul of the Facebook overlords. In February 2020, the publication ran one of the earliest pieces introducing the theory to U.S. audiences that the coronavirus may have been the result of a lab leak—a theory that became popular in May 2021, with The New York Times, The New Yorker, and The Atlantic running articles that began to take the theory seriously, and one that still, months later, hasn’t been discredited.

Facebook’s fact-checkers somehow deemed the Post‘s reporting untrue, but reversed the ban on sharing man-made lab leak information in…May 2021.

And, in October 2020, after the Post published a report on Hunter Biden’s laptop, Twitter suspended the publication’s account while Facebook took steps to limit the reach of the article. Just last month, The New York Times confirmed that the initial reporting checked out with its own story on the Biden laptop. (Former head Jack Dorsey commented in November 2020 that Twitter had erred in its decision and reiterated his expansive commitment to free speech principles in congressional hearings months later, though Twitter has still been the subject of ongoing content moderation controversy.)

It’s not just that such censorship is bad in principle (it is!), but also that the censors are often wrong and clumsy when they attempt to deem what’s true and false. Private companies like Twitter and Facebook/Meta have every right to decide their own content moderation policies, but it’s not hard to notice patterns in who and what they choose to crack down on. It’s not always that the information is incorrect, just that the reporting is embarrassing to favored political causes or complicates a prevailing narrative.

It’s unclear why an opulent 6,500-square-foot $6 million mansion is needed to end police brutality and bring about racial justice for black Americans. It’s even more unclear why Facebook would want to hide this information from interested users, unless it sees its role as merely running interference for political allies, hiding credible journalism when it’s damning to them.

The post Why Is Facebook Censoring Articles About How BLM Used Donations To Buy a $6 Million House? appeared first on Reason.com.

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Koch Network Smeared as Pro-Russia for Suggesting Sanctions Might Not Work


krtphotoslive910204

Stand Together is a charitable organization founded by Charles Koch that gives money to libertarian groups and causes. It works to advance classically liberal ideas on a variety of issues: school choice, criminal justice reform, regulation, and foreign policy, to name just a few. Stand Together works with right-leaning organizations on some of these issues, left-leaning organizations on other issues, and also with organizations that don’t neatly fit the left-right paradigm. (Disclosure: Reason Foundation, the nonprofit that publishes Reason, receives support from Stand Together.)

Unfortunately, many progressive journalists—and even some populist conservatives—view everything connected to Charles Koch and his late brother David as nefarious by default. In their zeal to denounce the Koch brothers’ influence on American politics, they end up attacking policies that they should otherwise support.

Case in point is this bizarre and misleading “exclusive” report on Stand Together from Judd Legum, a progressive journalist who writes the newsletter Popular Information. Legum accuses Stand Together of supporting a “partial victory” for Russia in Ukraine, and wanting the U.S. to drop “virtually all” Russian sanctions.

“In an internal email obtained exclusively by Popular Information, Stand Together, the influential non-profit group run by right-wing billionaire Charles Koch, argues that the United States should seek to deliver a partial ‘victory’ to Russia in Ukraine,” writes Legum. “The email was sent to Stand Together staff by Dan Caldwell, the group’s Vice President of Foreign Policy, on March 16. The subject line was ‘An Update on Ukraine.'”

Nowhere in his article does Legum share the email in its entirety: Instead, he selectively quotes from it, leaving out important, clarifying context. He also takes great pains to portray skepticism of the long-term effectiveness of economic sanctions as some kind of kooky, fringe belief.

Legum describes Caldwell’s email as offering a “boilerplate” denunciation of Russian President Vladimir Putin that “quickly pivots” to a “broad rebuke of international efforts to sanction the Russian government,” as if the sentiment expressed is brief or insincere. Here is the relevant section of the email:

I wanted to take a moment to better connect you to our sense of things regarding the war in Ukraine.

Russia’s invasion of Ukraine is immoral, unjustified, and should be immediately halted. In addition, the regime of Vladmir Putin is authoritarian and has inhibited the Russian people from enjoying the benefits of a free and open society.

Throughout our decades-long history, our community has consistently stood against unjust wars and advocated for peaceful relations between nations.

So while we support the Ukrainian people, we also must do everything we can to prevent escalation and reduce the threat of nuclear conflict.

Understandably, the invasion of Ukraine and the suffering inflicted on its people by the Putin regime has evoked a strong response among us all. This has contributed to demands from some for the United States to take a more aggressive posture against Russia – including calls for actions that would entail direct military strikes against Russian forces, such as the imposition of a NATO no fly zone over Ukraine.

However, it is not in America’s or anyone’s interest for the war to escalate into a larger conflict between a nuclear-armed Russia and the United States. Especially not the Ukrainians, who will bear the brunt of a more violent and widespread conflict.

This is not to say the United States should do nothing.

I am not sure why Legum reads this as a “boilerplate” denunciation followed by a “quick pivot.” I read it as sober and well-considered—in truth, I can’t find anything with which to disagree. (Though perhaps Legum would say that I too am compromised by Koch dollars.)

In the next half of the statement, Caldwell expresses support for sanctions against specific Russian leaders, and says that broader sanctions should “never be taken off the table.” But he perceptively questions whether broad-based, long-running sanctions have generally succeeded in the past, and provides various examples of regimes that withstood sanctioning:

The United States should support diplomatic efforts to help end the war. An outright victory by either Russia or Ukraine is increasingly unlikely and a diplomatic resolution is the path that best limits the bloodshed and minimizes the risk that the current war could escalate into a larger conflict.

On the question of sanctions, aggressive and targeted sanctions against Russian leaders are warranted. Additionally, sanctions are a legitimate tool of American statecraft and should never be taken off the table.

However, overly-broad sanctions rarely work as intended and often strengthen the authoritarian regimes that are being targeted while increasing the suffering of ordinary people – something you already see taking place in Russia. Additional examples of this dynamic in action include Iraq in the 1990s’, Venezuela, Iran, and Afghanistan – all countries where people had no ability to hold their rulers accountable for the impact of the sanctions precisely because they were authoritarian regimes.

Most irresponsibly, Legum highlights the following line: “An outright victory by either Russia or Ukraine is increasingly unlikely and a diplomatic resolution is the path that best limits the bloodshed.” He describes this as Stand Together advocating for the U.S. to “seek to deliver Russia a partial ‘victory’.”

But Caldwell clearly does not wish for Russia to achieve “victory,” partial or otherwise; he is merely acknowledging that any peace will likely involve both Russia and Ukraine getting some things that they want. It’s perfectly reasonable to concede that in order to end all the death and destruction, Putin will have to emerge from the conflict as something short of a complete and total loser.

Legum quotes two foreign policy experts—Brian Katulis and Daniel Fried—who think the current sanctions should remain in place and believe they are working to “reduce Putin’s resources for further aggression.” They are certainly entitled to that opinion; there is little reason to doubt that the sanctions are making things harder in Russia, including for ordinary Russians. But it is not crazy to wonder whether the sanctions will meaningfully prevent Putin from continuing the war in Ukraine, or whether the amount of suffering we are dispensing to the Russian people is ultimately counterproductive or even immoral.

Legum’s article has drawn well-deserved criticism from Michael Cohen, a fellow at the Eurasia Group Foundation, and Emma Ashford, who works for the Atlantic Council. Both described Legum’s piece as a “hatchet job,” and rightly so.

In response, Legum criticized Cohen and Ashford on the grounds that their organizations also received Koch funding. But Legum’s pet expert, Fried, is also affiliated with the Koch-funded Atlantic Council, so the insinuation that a Koch affiliation means we should automatically reject an expert’s criticisms backfires in all directions here.

The overarching point of Legum’s article is to cast aspersions on Koch Industries’ decision to continue operating several glass manufacturing facilities within Russia. Koch Industries, for what it’s worth, maintains it will not “walk away from our employees there or hand over these manufacturing facilities to the Russian government so it can operate and benefit from them.”

But it’s absurd to characterize Stand Together’s skepticism of sanctions as anything other than a sincere belief held by some libertarians, noninterventionists, and a great many progressives. Indeed, Rep. Ro Khanna (D–Calif.), one of the most left-leaning members of the House, has taken an identical position. Progressive Reps. Ilhan Omar (D–Minn.) and Cori Bush (D–Mo.) voted against the U.S. ban on Russian oil imports.

Legum did not respond to a request for comment.

The post Koch Network Smeared as Pro-Russia for Suggesting Sanctions Might Not Work appeared first on Reason.com.

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Why Is Facebook Censoring Articles About How BLM Used Donations To Buy a $6 Million House?


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When George Floyd, an unarmed black man, was killed by Minneapolis police in May 2020, donations poured in for Black Lives Matter (BLM) from people who thought they were funding racial justice initiatives and helping to ensure bad-actor cops would finally be held accountable for their violent actions.

Surely some of the donations did go toward that. But $6 million of them went toward paying for a 6,500-square-foot house in Southern California, replete with a pool and a bungalow.

Worse still, when the New York Post reported on Black Lives Matter’s organizational malfeasance, Facebook censored the story. Meta, which owns Facebook, has deemed the content “abusive.”

In October 2020, Black Lives Matter received $66.5 million from generous donors. Later that same month, a man named Dyane Pascall—the financial manager for BLM co-founder Patrisse Cullors’ consulting firm—bought the $6 million house. “Pascall transferred ownership of the house to an LLC established in Delaware by the law firm Perkins Coie,” Sean Campbell reports at Intelligencer, which “ensured that the ultimate identity of the property’s new owner was not disclosed to the public.”

Since then, the house’s raison d’etre has been…somewhat unclear. It serves as a sort of secure location—providing high-ranking members of the organization a place to sleep when they need it—but also a place to record content for posting on social media, both for the BLM account and for Cullors’ own projects (like a peach cobbler cooking video, notes Intelligencer).

More from Campbell:

On March 30, I asked the organization questions about the house, which is known internally as “Campus.” Afterward, leaders circulated an internal strategy memo with possible responses, ranging from “Can we kill the story?” to “Our angle — needs to be to deflate ownership of the property.” The memo includes bullet points explaining that “Campus is part of cultural arm of the org — potentially as an ‘influencer house,’ where abolition+ based content is produced by artists & creatives.” Another bullet is headed “Accounting/990 modifications” and reads in part: “need to first make sure it’s legally okay to use as we plan to use it.” The memo also describes the property as a “safehouse” for leaders whose safety has been threatened. The two notions — that the house is simultaneously a confidential refuge and a place for broadcasting to the widest possible audience — are somewhat in tension. The memo notes: “Holes in security story: Use in public YT videos.”

None of this is technically illegal, but all of it is ill-advised if your goal is to ensure donors trust that their money will be used to advance racial justice, not personal enrichment for the founders. And these reports, from both Intelligencer and the New York Post, are extraordinarily damning for an organization whose leaders have already come under scrutiny for their extravagant spending. Cullors’ posh real estate holdings totaling at least $3.2 million were the subject of a prior New York Post piece that ended up being censored by Facebook, unable to be shared on the platform.

This isn’t the first time the Post has run afoul of the Facebook overlords. In February 2020, the publication ran one of the earliest pieces introducing the theory to U.S. audiences that the coronavirus may have been the result of a lab leak—a theory that became popular in May 2021, with The New York Times, The New Yorker, and The Atlantic running articles that began to take the theory seriously, and one that still, months later, hasn’t been discredited.

Facebook’s fact-checkers somehow deemed the Post‘s reporting untrue, but reversed the ban on sharing man-made lab leak information in…May 2021.

And, in October 2020, after the Post published a report on Hunter Biden’s laptop, Twitter suspended the publication’s account while Facebook took steps to limit the reach of the article. Just last month, The New York Times confirmed that the initial reporting checked out with its own story on the Biden laptop. (Former head Jack Dorsey commented in November 2020 that Twitter had erred in its decision and reiterated his expansive commitment to free speech principles in congressional hearings months later, though Twitter has still been the subject of ongoing content moderation controversy.)

It’s not just that such censorship is bad in principle (it is!), but also that the censors are often wrong and clumsy when they attempt to deem what’s true and false. Private companies like Twitter and Facebook/Meta have every right to decide their own content moderation policies, but it’s not hard to notice patterns in who and what they choose to crack down on. It’s not always that the information is incorrect, just that the reporting is embarrassing to favored political causes or complicates a prevailing narrative.

It’s unclear why an opulent 6,500-square-foot $6 million mansion is needed to end police brutality and bring about racial justice for black Americans. It’s even more unclear why Facebook would want to hide this information from interested users, unless it sees its role as merely running interference for political allies, hiding credible journalism when it’s damning to them.

The post Why Is Facebook Censoring Articles About How BLM Used Donations To Buy a $6 Million House? appeared first on Reason.com.

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“Island-Wide Blackout” Strikes Puerto Rico After Major Power Station Erupts In Flames 

“Island-Wide Blackout” Strikes Puerto Rico After Major Power Station Erupts In Flames 

Puerto Rico’s power grid was hit by a devastating fire at one of the largest power plants on the island that triggered widespread blackouts, according to Bloomberg.

On Wednesday night, the outage began when a fire broke out at the Costa Sur power plant in the island’s southwest region, Puerto Rican utility company LUMA Energy said. 

The Puerto Rico Electric Power Authority (PREPA) tweeted a video of one of the power plant’s generator circuit breakers erupting in flames, shooting fireballs into the night sky. 

“The power grid has suffered a massive island-wide blackout, potentially caused by a circuit breaker failure at the Costa Sur generation plant,” LUMA officials said Wednesday night. The fire was extinguished hours later. 

Gov. Pedro Pierluisi urged Puerto Ricans “to remain calm.” According to PowerOutage, as many as 438k out of 1.468 million customers tracked are without power as of 0900 ET. 

In recent months, the outage was one of the biggest for the island’s deteriorating electrical grid, which has seen frequent rolling blackouts grow worse by the year. 

Meanwhile, Puerto Rico exited bankruptcy last month, but PREPA remains buried in insurmountable debt, totaling around $9bln. 

Tyler Durden
Thu, 04/07/2022 – 10:06

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Judge Acquits Jan. 6 Defendant On All Charges

Judge Acquits Jan. 6 Defendant On All Charges

Authored by Zachary Stieber via The Epoch Times,

A federal contractor was acquitted by a judge on April 6 on four charges in relation to entering the U.S. Capitol on Jan. 6, 2021.

Matthew Martin in a selfie photograph taken on Jan. 6, 2021. (DOJ/Screenshot via The Epoch Times)

Prosecutors failed to prove that Matthew Martin, who worked at the Los Alamos National Laboratory in New Mexico, committed crimes when entering the Capitol for about 10 minutes, U.S. District Judge Trevor McFadden, a Trump appointee, ruled.

McFadden said it was reasonable for Martin to believe that outnumbered police officers allowed him and others to enter the Capitol through the Rotunda doors on Jan. 6, 2021. The judge also said Martin’s actions were “about as minimal and non-serious” as anyone who was at the Capitol that day.

According to court filings, Martin attended a rally held by former President Donald Trump on Jan. 6 before returning to his hotel, where he heard that the Capitol had been breached. Martin left the building and ventured on the Capitol grounds before eventually entering the Capitol.

“While I was at the top, they started letting people into the building. And I—so I joined the—they were holding the doors open, the guards were. And I walked in and saw the rotunda,” Martin told an FBI agent during an interview.

Martin, whose bench trial started Tuesday, testified that a police officer waved him into the building after the riot erupted. A prosecutor dismissed that testimony as “nonsense,” though the government acknowledged in a filing that “police officers stood on either side of the doorway as the defendant entered” the building.

Video shows two police officers standing near the Rotunda doors and allowing people to enter as Martin approached, McFadden, the judge, said. One of the officers appeared to lean back before Martin placed a hand on the officer’s shoulder as a possible sign of gratitude.

McFadden described Martin’s testimony as “largely credible.” The judge said it was not unreasonable for him to believe that officers allowed him to enter the Capitol, even though alarms were blaring and broken glass was strewn about the floor.

McFadden also said there was no evidence Martin, who spent about 10 minutes inside the Capitol, intended to disrupt Congress from certifying President Joe Biden’s electoral victory and described the defendant as a “silent observer of the actions of others.”

In an image from video, Matthew Martin stands inside the U.S. Capitol on Jan. 6, 2021. (DOJ/Screenshot via The Epoch Times)

Martin was acquitted on four misdemeanor charges: entering and remaining in a restricted building, disorderly and disruptive conduct in a restricted building, violent entry and disorderly conduct in a Capitol building, and parading, demonstrating, or picketing in a Capitol building.

Prosecutors had asserted in a pretrial brief that “the evidence will prove beyond a reasonable doubt that [Martin] committed each offense charged.”

“I think the definitive factor was that Matt Martin did not break the law,” lawyer Dan Cron, representing Martin, told reporters after the verdict.

“We had the benefit of a lot of video evidence and the judge had a chance to see it.”

“I am very thankful for the judge’s verdict and I’m hoping to get my life back together and my job back,” Martin added.

More than 775 defendants have been arrested in relation to the breach. Approximately one-third have entered guilty pleas, and about half of the approximately 110 sentenced have received jail time.

Martin chose a bench trial versus a jury trial.

He’s the first Jan. 6 defendant to be acquitted on all charges.

In another bench trial, McFadden acquitted Cowboys for Trump founder Couy Griffin on a charge of disorderly conduct but convicted Griffin of illegally entering restricted grounds.

The only jury trial to wrap up as of yet saw jurors convict Guy Wesley Reffitt on five counts, including civil disorder.

Tyler Durden
Thu, 04/07/2022 – 09:45

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