Month: August 2022

Authored by Jessica Mao via The Epoch Times (emphasis ours),

Chinese authorities had high hopes for China’s chip industry, expecting to see a “semiconductor miracle,” which would then affirm the “advantage of China’s whole nation system,” as well as overcome technology sanctions imposed by the United States.

However, eight years into establishment of China Integrated Circuit Industry Investment Fund, also known as the “Big Fund,” trillions of yuan have been exhausted with little success in tech innovation.

China’s anti-corruption watchdog launched an investigation into the former and current executives of the “Big Fund” in July, and seven senior officials linked to the “Big Fund” have demoted since.

In fact, misusing government research and development (R&D) subsidies and grants is common within China’s scientific community.

Where Did China’s Trillions in Research Funding Go

In April 2018, Chinese state media Sina Finance published an article, asking the question, “China has long been spending trillions of yuan in the field of semiconductors every year, but where did the huge amount of funds go?”

The article went on to say that in the past several years, roughly only 40 percent of the country’s research funding was actually spent on science and technology research and development, and 60 percent was spent on meetings and business trips.

“Whenever there are chances of business meetings, one can reimburse travel expenses, gasoline cost, and the travel cost can be huge when people go abroad to attend meetings. Even researchers at Tsinghua University and Peking University are no exception,” it said. “Anhui University of Engineering has also found that research funds are used to reimburse entertainment, foot spa, HOA cost and other expenses unrelated to the project. Moreover, the university noted a drastic increase of business trips abroad in recent years.”

A researcher revealed to Sina Finance that usually for the so-called inspection trips in foreign countries, the researchers simply made a brief appearance at their targeted inspection sites, and the rest of the time was spent on travel, leisure, and sightseeing.

In addition to holding or attending business meetings, Chinese research institutions are also obsessed with buying equipment, according to the article.

“Every year, when the funding is allocated, the first thing they do is to update all the laptops, scanners, cell phones, and other resources in the team, and sometimes a mentor with several topics in hand can get himself several of the latest laptops,” it said.

R&D Fraud

Many researchers are very skillful at selling an idea—hyping up a concept, sometimes to the point of committing R&D fraud, in order to apply for a hefty amount of funding. “Some key projects can get several millions or even several tens of millions of yuan as research grant. These people’s desire for capital is greater than getting down-to-earth with scientific research,” the article said.

Citing the Wuhan Hongxin scandal as an example, the article recounted that in August 2002, Chen Jin, then dean of the microelectronics school of Shanghai Jiaotong University, bought a Motorola chip from the United States, and hired a few migrant workers to polish off the MOTO logo from the chip with sandpaper. He then paid a small company to put a “Hanxin One” trademark on polished surface of the chip. Through layers of his personal connections, he was able to obtain various certifications, claiming that it was China’s first high-end DSP chip with independent intellectual property rights.

“As the whole nation was thrilled at his claim, Chen applied for dozens of research projects in one shot, and even deceived the General Armament Department of China’s military into filing a Weapons and Equipment Technology Innovation Project. No one noticed any problems before or afterwards. So he succeeded in defrauding over 100 million yuan of scientific research funds,” the article said.

In an interview with The Epoch Times on Aug. 12, overseas China expert Lu Tianming pointed out that China’s ambition of rapid chip R&D itself is a good goal to set, but the thing is, the Chinese Communist Party is rotten to the core.

“It can be said that every single communist official is corrupt,” Lu said. “Actually, it would be abnormal if any official or supervisor involved would not embezzle from the funds. They all wish to line their own pockets when given such an opportunity.”

By Irina Slav of OilPrice.com

Energy markets and nature seem to have it in for Europe. Record-breaking gas prices, rising coal prices, and droughts that interfere with electricity generation in some key markets have combined to push electricity contracts in the EU to record highs as uncertainty about the coming winter deepens.

Reuters reported earlier this week that a number of power forward contracts traded in the EU hit highs because of what increasingly looks like a perfect energy storm, affecting every energy source in one way or another.

“A number of factors are adding up: The market is uncertain about whether (French utility) EDF will increase nuclear availability enough for winter, which explains the price differences between the two countries [France and Germany],” Rystad Energy analyst Fabian Ronningen told Reuters.

EDF has had to significantly reduce the capacity utilization rate of its nuclear power plants because droughts in France have reduced water availability for cooling the reactors. But the drought came on top of earlier problems: reactor corrosion that prompted the utility to close some of them earlier this year, effectively reducing the supply of electricity available for sale on the domestic or regional market.

Meanwhile, in Germany, wind output is low, and so is the water level of the Rhine—a key transport route for things like coal, for example. Germany’s economy is quite dependent on this crucial shipping corridor, but when the water level is critically low, shippers simply cannot load the usual volume of cargo, meaning that coal and other commodities are reaching their destinations in smaller mounts and more slowly.

The drought is also affecting hydropower output, adding to worries about future supply. Because of the drought, Norway, which generates more than two-thirds of its electricity from hydropower, announced it would curb electricity exports, threatening supply for other European countries at the worst possible time. In the UK, there’s talk about blackouts.

Meanwhile, Gazprom’s gas flows to Europe remain much lower than usual, with the Russian state major warning this week that gas prices on the spot European market could top $4,000 per 1,000 cubic meters. Recently, spot prices broke the $2,500 barrier.

“European spot gas prices have reached $2,500 (per 1,000 cubic meters). According to conservative estimates, if such a tendency persists, prices will exceed $4,000 per 1,000 cubic meters this winter,” Gazprom said.

The European Union has been quick in switching from Russian gas to U.S. LNG amid the Ukraine crisis, but speed has not been enough: U.S. LNG export capacity is not limitless, and producers also have other clients, in Asia. As the winter season approaches, Asian buyers have become more willing to pay hefty premiums for any LNG, which has intensified competition for a limited number of LNG tankers.

No wonder, then, that electricity prices in some parts of Europe have hit records. Even less wonder that industries are beginning to buckle, per a recent Bloomberg report. The report noted that Germany’s year-ahead electricity contract rose to more than 530 euros per MWh earlier this week, which constituted a 500-percent increase over the past 12 months. No industry can absorb such a price shock unscathed, and German industry didn’t.

Germany had to pay the equivalent of more than $15 billion to bail out one of its biggest gas utilities, Uniper, earlier this year. Chemicals giant BASF warned that a gas shortage could wreak havoc on the industry. Aluminum and zinc smelters are closing, and so are fertilizer plants, all because of record gas and electricity prices.

Relief is not in sight unless one considers the filling up of gas storage caverns in Europe a form of relief. The EC had set a target of 80 percent for storage fill rates by October 1. Member-states are on track to hit this target ahead of schedule, but this has come at a cost: the EU’s gas bill this year is ten times higher than it normally is, at over $51 billion.

What’s more, storage alone will not be enough to keep European economies going through the winter months. The EU will need more gas as regular supply. Besides the U.S., there are few other places it can get it. It could be why the head of the German energy regulator warned the EU’s biggest economy would need to reduce gas consumption by a fifth to avoid shortages and rationing in the winter.

“The longer these price rises go up, the more this will be felt across the economy,” Daniel Kral, senior economist at Oxford Economics, told Bloomberg this week. “The magnitude of the increase and magnitude of the crisis isn’t comparable to anything in the past few decades.”

It is unfortunate that Europe is experiencing one unprecedented crisis after another. And it could yet get worse as the oil embargo against Russia kicks in at the end of the year.

Analysts have warned that this could lead to higher prices for oil. This will, in turn, add to upward electricity price pressure due to the switch from gas to oil some utilities in Europe have implemented to shield themselves from prohibitive gas prices.

The western world is about to stop waging some bizarro war against Vladimir Putin that has sparked loathed energy hyperinflation across most of Europe, and is about to embrace the Russian leader, behind closed doors of course, even if it means a terribly vexxed Zelenskyy and US deep state.

Why? Because “pariah” Vladimir Putin is about to re-emerge on the G20 scene again, this time courtesy of Indonesian President Joko Widodo, who today said that both Putin and China’s president Xi both plan to attend the G20 summit in the resort island of Bali later this year.

“Xi Jinping will come. President Putin has also told me he will come,” Jokowi, as the president is known, said in an interview with Bloomberg News Editor-in-Chief John Micklethwait on Thursday. It was the first time the leader of the world’s fourth-most populous nation confirmed both of them were planning to show up at the November summit, according to Bloomberg.

Needless to say, the presence of Xi and Putin at the meeting will set up a showdown with the deep state handlers who control Joe Biden’s teleprompter and other, less senile “western” leaders, all of whom are set to meet in person for the first time since Russia’s invasion of Ukraine. The attack has left the G-20 divided over whether to place sanctions on Russia, because while a handful of G-20 countries are relatively self reliant, most are desperate for Russia’s commodity exports, whose lack has sent European energy prices to… well, just look for yourselves.

Putin and Jokowi discussed preparations for the G-20 summit in Bali in a phone call Thursday, the Kremlin said in a statement that didn’t mention whether the Russian leader will attend. Putin’s attendance will also likely bring him face to face with Volodymyr Zelenskiy for the first time since Russia’s invasion because for some odd reason the Ukrainian president – who also doubles as a Vogue model – is also slated to be in Bali.

Showing just how inconsequential the Biden White House has become in global affairs, Putin’s presence will take place even though Biden had called for Russia to be removed from the G-20, and US officials had earlier been pressuring Indonesia to exclude Putin from the Bali summit.

It’s almost as if when it comes to the world deciding between Putin’s nat gas exports and the deep state’s wishes, the world chooses the former. To make that point, Indonesia’s leader explained that as the new global axis lines are drawn, Asia stands with China and Russia.

“The rivalry of the big countries is indeed worrying,” Jokowi, 61, said in the interview. “What we want is for this region is to be stable, peaceful, so that we can build economic growth. And I think not only Indonesia: Asian countries also want the same thing.”

“Indonesia wants to be friends with everyone,” he said. “We don’t have problems with any country. Each country will have their own approach. Each leader has their own approach. But what’s needed by Indonesia is investment, technology that will change our society.”

Jokes aside, however, as Bear Traps report author Larry McDonald notes, we are likely just months away from quietly shelving western sanctions on Russia.

JP Morgan trading Russian bonds, Putin back in the G-20, what war? Invite to get a deal on energy for the EU heading into the winter I suspect. https://t.co/rPZO6WMVB2

— Lawrence McDonald (@Convertbond) August 19, 2022

Authored by Katabella Roberts via The Epoch Times (emphasis ours),

American retail company Lowe’s is handing out $55 million in bonuses to its front-line hourly employees in an effort to help combat the increasing cost of living.

Lowe’s Chief Executive Marvin R. Ellison announced the bonus scheme during the company’s second-quarter earnings call on Wednesday.

“I would like to personally thank our associates for their hard work and dedication. In recognition of some of the cost pressures they are facing due to high inflation, we are providing an incremental $55 million in bonuses to our hourly front-line associates this quarter,” Ellison said on the call.

“These associates have the most important jobs in our company, and we deeply appreciate everything they do to serve our customers to deliver a best-in-class experience,” Ellison added.

For a designated time period, the company is also providing workers with an additional 10 percent discount on everyday household and cleaning items, meaning they can now purchase those products at a 20 percent discount.

Executive Vice President Joe McFarland said he hopes the added discounts will also help to “ease the burden of inflation impacting many of these items.”

“We will continue to look for meaningful ways to improve our associates’ work-life balance while providing them with the tools to build a career at Lowe’s,” McFarland said.

Steve Salazar, a spokesperson for Lowe’s, confirmed to The Washington Post that employees at the company will see the bonus on Sept. 9, and it will be taxed.

Households Feeling the Strain

Lowe’s operates or services 2,200 home improvement and hardware stores and employs approximately 300,000 people, according to its official website.

The $55 million in bonuses shared among the 300,000 employees would amount to an average bonus of roughly $183 per employee.

Lowe’s announcement comes as inflation has rocketed in the United States, prompting a string of businesses, including Microsoft, ExxonMobil, and Walmart, to offer worker bonuses, discounts, and gift cards in an effort to offset soaring prices, although it is unclear just how helpful the one-time lump sumps will be as the cost of living steadily increases.

Read more here…

It is only fitting that on the day Blood, Bath and Bankruptcy Bed Bath & Beyond suffered a historic crash in its stock price, we learn from Bloomberg that the quasi-insolvent retailer hired law firm Kirkland & Ellis to help it address a debt load that’s become unmanageable amid a sales slump.

Kirkland, best known for its legal advice in restructuring and bankruptcy situations, was tapped to help the retailer navigate options for raising new money, refinancing existing debt, or both, according to the report. Translation: from $30 yesterday, BBBY stock will be worthless in a few days (just in case there is confusion why Ryan Cohen pulled the plug).

None of this will come as a shock to debt investors, usually far, far smarter then their equity peers, and is why much of Bed Bath & Beyond’s bonds and loans are already trading at distressed levels, even as its stock climbed as high as $30 per share earlier this week.

The share price however tumbled back to $10 after hours on Thursday, after activist shareholder Ryan Cohen dumped his entire stake making $68 million in the process, while costing a similar amount to the thousands of retail investors who followed him into this melting ice cube.

Alas, the stock is going much lower – in fact, $0.00 sounds like support – as the trading prices of the retailer’s debt, have plunged to half their face value or less this year, with the sharpest drop coming after the company announced dismal quarterly earnings June 29. And since the unsecured debt will be impaired, this implies there is zero value for the equity in the upcoming bankruptcy.

If only BBBY had sold stock in an ATM offering at the grotesquely inflated price from earlier this week, to hapless retail investors. That way RC Ventures pump and dump would have been complete.

The European Commission has said it is still weighing a travel ban for all Russian nationals, but stressed in a Thursday statement that some member states have individually begun to impose restrictions on visas, but that none has ceased issuing them completely. 

Commission spokesperson Anitta Hipper called for a “coordinated approach” among EU countries, saying in a Thursday press briefing in Brussels that “visa activities have not stopped completely and in particular the humanitarian cases are catered for.”

She said that Russia’s ongoing assault on Ukraine had created “unprecedented challenges” for the entirety of the EU, and for that reason had “acted immediately” to suspend a visa facilitation agreement with Moscow on February 25, the day after the invasion. 

EU foreign ministers are set to meet later in August, and the proposed travel ban will be on on the agenda, she said. Ukrainian government under President Zelensky has been lobbying hard for the European Union as well as the United States to shut their borders to any and all Russian travelers for a period of at least one year.

“The most important sanctions are to close the borders — because the Russians are taking away someone else’s land,” Zelensky told The Washington Post in an interview published over a week ago. He stressed that as punishment Russian citizens should “live in their own world until they change their philosophy” – before being allowed to travel in the West. “They’ll understand then,” he said.

Estonia and Finland were among the first European countries to back the call, and took steps to impose their own restrictions for Russian travel. 

The Moscow Times reports that Russians seeking to travel abroad are now racing against the clock ahead of proposed tighter travel restrictions especially to the Baltics:

Finland said Tuesday it will reduce the number of visas issued to Russians by 90% starting next month and Lithuania, Estonia and Latvia have recently also announced restrictions on tourist visas for Russians. 

The three Baltic states and Finland, which share land borders with Russia, have reported an increase in the numbers of Russians using their airports to transit further into the EU as a workaround to the bloc’s ban on Russian airlines.

Further the report underscores that “The number of applications for Schengen visas — which give access to most EU countries — submitted by Russians has risen rapidly in recent weeks, according to tour agencies contacted by The Moscow Times.”

One major Russian tour and travel industry insider was quoted as saying the number Schengen visa applications made by Russian citizens has doubled in only two weeks.

Last week the Kremlin blasted the proposal as “irrational” and painted it as racist and xenophobic. It remains that the EU were to tell 145 million Russians they can no longer travel to Europe for any reason in a sweeping ban, it goes without saying that this would be unlikely to impact Putin’s war-time decision making in any way. Instead, it would only serve to punish common people, who also have a wide range of views regarding the war in Ukraine. 

Authored by Pat Buchanan,

When 30 FBI agents showed up at Mar-a-Lago to cart off boxes of documents, it was an authorized, legitimate and justified procedure to retrieve national security secrets being illegally kept there.

Or it was an unprecedented regime raid on the home and office of the foremost political rival of President Joe Biden that called to mind a “Third World country,” the East German “Stasi,” the KGB or the Gestapo.

And Jan. 6, 2021?

That was a riot, a disgraceful breach of the Capitol, involving assaults on Capitol cops that deserved to be and are being punished.

No, it was more than that. Far more. It was an “insurrection,” a “fascist coup,” an act of treason led by far-right extremists to abort the transfer of power from the winner of the election of 2020 to the loser. It ranks right up there with the 1814 burning of the Capitol by the British.

Such is the magnitude of the divide in America, a divide that extends far beyond our clashing views of Jan. 6 and the Mar-a-Lago raid.

Consider abortion. Before the 1960s, abortion was almost universally regarded as a shameful and criminal act. Doctors who performed abortions were disgraced and sometimes sent to prison.

But after the Dobbs decision by the Supreme Court declared that Roe v. Wade in 1973 was wrongly decided, restoration of women’s right to an abortion is being championed by half the nation.

The other half of America yet believes abortion involves the killing of an unborn innocent child.

Part of America celebrates the Supreme Court’s decision to declare marriage equality for homosexuals. Yet, a traditionalist minority believes such a mandate imposes on the nation a secularist morality contradicted by the tenets of the Christian faith that was the basis of laws for our first two centuries as a nation.

Nor is it only clashing morality that divides us.

For a nation, a country, a people, a democracy to endure, there needs be a broad consensus of belief, culture, custom and politics.

On the issue of law and order, without which a republic cannot stand, there is now disagreement over the role and conduct of our police.

During the George Floyd summer of 2020, “Defund the Police!” was the clamor of the left, and among the street chants of Black Lives Matter was, “Pigs in a Blanket, Fry ‘Em Like Bacon.”

Only a stunning political recoil caused its abandonment.

For a nation, especially a great world power like the United States, some things are indispensable to its preservation.

A democratic republic needs to preserve the value of its currency, to defend its borders against illegal mass migrations and invasions, to preserve law and order, especially in its great cities.

Which of these requisites exist today when the nation suffers 8% inflation; 250,000 illegal aliens cross our southern border every month; and “mass shootings” occur daily in our cities during which at least four victims are gunned down, wounded or killed?

The preservation of a democracy also requires the confidence of its people in its defining institutions.

Yet, since the Reagan era, Americans’ collective confidence in our major institutions has fallen from one-half of the nation to one-fourth.

In 2022, confidence in the Supreme Court fell by a third to 25%. Only a fourth of the country retained high confidence in the presidency; and confidence in Congress plummeted to 7%, or one in every 14 Americans.

One in 6 Americans had great confidence in our newspapers, with only 1 in 9 citizens saying the same about television news.

In summary, we are a country whose people have a diminishing confidence in almost all of its institutions, from big business to the churches, universities and media. Only small business and the U.S. military enjoy the confidence of the American people.

Public approval of Biden’s performance is at the lowest level ever recorded for a president at this point in his first term.

True, we have been through and recovered from divisive times.

In the 1860s, 11 of the 33 states seceded and fought for four years to gain their independence of the Union.

The 1960s were divisive, but the left, with Sen. George McGovern its political expression, captured less than 40% of the vote against Richard Nixon in 1972. Ronald Reagan ran up two landslides in the 1980s.

Those days are long gone.

The left today dominates the academic community and culture to a greater degree than it once did and is further removed from the heart of the country in Middle America than it has ever been.

When, how, does America ever unite again?

And what unites us, other than an external attack on the country, like Pearl Harbor or 9/11?

Where is the common ground on which to stand?

Does such ground even exist, given the divisions in religion, race and ethnicity, and the seemingly irreconcilable disagreements over morality, ideology, culture and politics?

Has the great experiment run its course?

Authored by Katabella Roberts via The Epoch Times (emphasis ours),

Amazon has accused the U.S. Federal Trade Commission (FTC) of making unreasonable and unfair demands as part of the agency’s probe into the company’s Prime membership program, according to a new legal filing.

The Jeff Bezos-founded company has been under investigation by the regulator since March 2021 regarding whether or not it makes it difficult for customers who want to end their membership with Amazon Prime, the subscription service that costs $139 per year or $14.99 per month and allows users to take advantage of additional services that are otherwise unavailable to other Amazon customers.

However, Amazon said in the Aug. 5 legal filing (pdf) that the investigation had become “unworkable and unfair, reflecting less of a responsible effort to collect the facts about a variety of longstanding and highly popular subscription programs than a one-sided effort to force Amazon to meet impossible-to-satisfy demands.”

Nearly 20 current and former Amazon employees and executives, including founder Jeff Bezos and CEO Andy Jassy, as well as former retail executive boss Dave Clark and his successor Doug Herrington, SVP of international Russ Grandinetti, and former head of Prime, Greg Greeley, were served subpoenas to give evidence as part of the agency’s investigation into the e-commerce giant.

The subpoenas are officially known as Civil Investigative Demands (CID).

‘Unworkable and Unfair’

In the filing, Amazon asked that the FTC “quash or limit” the subpoenas, while certain current and former Amazon employees also petitioned to quash or limit the subpoenas served on them individually because they are “unworkable and unfair.”

Specifically for founder Bezos and CEO Jassy, lawyers state that the two are petitioning for the CID’s to be “quashed” because “staff has identified no legitimate reason for needing their testimony when it can obtain the same information, and more, from other witnesses and documents.”

Amazon claims that it has worked “diligently and cooperatively with FTC staff to provide information relevant to the FTC’s investigation” for over a year and has produced 37,000 pages of documents relating to the probe, and provided “dozens of pages of interrogatory responses,” among other things.

It also claims that it has “proactively followed up with staff to ensure it had the materials it needed” but that FTC staff had become “inexplicably disengaged,” and by February 2022 had not communicated with Amazon about the Prime investigation for almost four months.

The company claims that in April 2022, after roughly six months of alleged silence from the FTC, Amazon was “abruptly notified … that a new attorney would be taking over and that staff was under ‘tremendous pressure’ to conclude the investigation,” and gave the company and its executives just a few weeks to comply.

“Staff’s handling of this investigation has been unusual and perplexing,” Amazon wrote in the petition. “The current impasse has been brought about by unexplained pressure placed on staff to complete the investigation hastily, by an arbitrarily chosen deadline.”

“But staff’s own behavior has exacerbated the breakdown in this investigation, with the most recent incident being the most egregious: staff has attempted to restrict, contrary to law and FTC practice, counsel’s ability to jointly represent Amazon and the Individual CID recipients. Staff has gone so far as to demand that counsel leave a hearing for the first individual witness for failing to abide by this improper restriction. The Commission must step in.”

Investigation Expanded

Amazon claimed that the FTC’s scope of the investigation has been extended to include additional non-Prime subscription programs, such as Audible, Amazon Music, Kindle Unlimited, and Subscribe & Save.

Lawyers for the company claimed that the FTC had “refused to provide the Individual CIDs to Amazon’s counsel when requested and informed counsel that they would not be permitted to jointly represent Amazon and any of the individual employees,” which it described as “plainly contrary to law.”

At the very least, Amazon asks that the deadline to provide the information should be extended.

“At a minimum, Amazon needs staff to further clarify its vague and argumentative requests and grant more time to comply with them, something staff has refused to do without explanation,” lawyers noted.

The FTC, which is headed by Lina Khan, pledged in 2020 to look more closely into the power of America’s five biggest tech companies: Amazon, Apple, Facebook, Microsoft, and Alphabet (including Google).

Amazon has raised concerns over Khan’s stance on antitrust law and her previous criticism of the company and its market dominance, stating that it would make her impartial in her role as chair.

Read more here…