Month: January 2023

On Tuesday, German Foreign Minister Annalena Baerbock ignited a firestorm of debate when she stated that Western allies are fighting a war against Russia – causing many to suggest that she essentially ‘declared war’ on Russia, and contradicting the official stance by saying the quiet part out loud.

“And therefore I’ve said already in the last days – yes, we have to do more to defend Ukraine. Yes, we have to do more also on tanks,” she during a Tuesday keynote address at the Parliamentary Assembly of the Council of Europe in Strasbourg, France – adding “But the most important and the crucial part is that we do it together and that we do not do the blame game in Europe, because we are fighting a war against Russia and not against each other.“

German foreign minister declares war on Russia pic.twitter.com/C4cAqnZXhD

— Michael Tracey (@mtracey) January 25, 2023

Baerbock’s comments played right into Russia’s position that they are in a proxy war with the West which was triggered by decades of NATO expansion to their doorstep, vs. the West’s position that they’re simply supporting Ukraine against an unprovoked invasion.

Of note, on Wednesday, Washington announced that it would send more than 30 M1 Abrams tanks to Kiev, while Berlin committed to a dozen Leopard II panzers, while encouraging Poland and other EU and NATO members to provide similar support. France, meanwhile, is “continuing our analysis” of the proposal to send tanks to Ukraine, after already promising several AMX-10 “light tanks” earlier this month.

NATO members France and Croatia have explicitly refuted Baerbock.

“We are not at war with Russia and none of our partners are,” said French ministry spokeswoman Anne-Claire Legendre on Thursday, per AFP. “The delivery of military equipment… does not constitute co-belligerence.”

Croatian President Zoran Milanovic called Baerbock’s comments “madness.”

“Now the German foreign minister says we must be united, because I quote, we are at war with Russia. I didn’t know that,” he said, adding “Maybe Germany is at war with Russia, but then, good luck, maybe this time it turns out better than 70-odd years ago.”

“If we are at war with Russia, then let’s see what we need to do. But we won’t ask Germany for its opinion,” Milanovic asserted. “Let them figure out who is the actual chancellor over there. I’ve been in politics for a long time, and our country has been through a lot, but I’ve never seen this kind of madness before,” he continued.

“Do you want us to enter the war?” he asked during a visit to the port city of Split, adding that Croatia “should in no way help” Ukraine militarily, Summit News reports.

Croatian President Zoran Milanovic: The German Foreign Minister said in English the day before yesterday in Strasbourg that we must be united because we are at war with Russia. I quote: “We are at war with Russia.” I did not know that. pic.twitter.com/dnQO1VllwQ

— Milopotamus (@Xifidion) January 27, 2023

Serbian foreign minister Ivica Dacic, meanwhile, commented on the US-EU sanctions against Russia, saying that the embargo on Moscow would harm Belgrade.

Dacic made the comments on Thursday from Ankara after meeting with his Turkish counterpart, Mevlut Cavusoglu.

Last week the European Parliament demanded that Belgrade enter into a “full alignment” with the bloc’s foreign and security policy, and join the embargo.

According to Dacic, Serbia has not joined out of “national and state interests, economic cooperation, as well as problems Serbia has with Kosovo,” referring to the NATO-backed breakaway province.

“It would be inappropriate for Serbia to sanction Russia now, and it would be harmful to our interests,” he said, adding “That doesn’t mean we won’t do everything to clearly say we don’t support the infringement of Ukraine’s territorial integrity and help as much as we can.”

Authored by Steve Watson via Summit News,

Senator Rand Paul warned Wednesday that over classification of information is being used to avoid oversight and institute cover ups, such as regarding the origins of COVID.

Appearing on Newsmax TV’s “Eric Bolling The Balance,” Paul explained “I think there’s an overclassification problem here. Everything’s classified. And in all likelihood, what we’ll find is this is not some sort of organized scheme to have the secrets to the nuclear weapon in [Biden’s] Corvette. I think it’s more likely than not that we’ve classified so many documents that it’s hard to find documents that are not classified.”

He continued, “The one problem with classifying so much is that there is, right now, to my knowledge, pretty good information out there in the intelligence community about the virus originating from the lab in China, and yet they classify it to try to prohibit people [like] me giving you the information that we already know that this came from a lab. And so this is a real problem.”

“We need to allow less classification so the American people can understand more about what’s going on with their government,” Paul urged.

He added, “I go to classified hearings, and I haven’t actually been to a classified hearing where I actually thought I heard a secret, to tell you the truth.”

Paul further noted that when President Trump was found to have some documents, “the left-wing media acted as if oh, these are the Manhattan Project. This is the secrets to the nuclear weapon… Really, most of the stuff we see is not really that secret. But it’s all stamped that way.”

“The intelligence community does this so they have more power and we have less power,” the Senator continued, adding “I have long argued that Congress needs to know more and the American people need to know more about what the CIA does, what the FBI does. Because we can’t oversee them, we can’t have oversight and reform if we don’t know what they’re doing.”

“They avoid oversight by classifying things, and often there’s a policy decision like, for example, with COVID, we need to know if COVID came from a lab so we can prevent this from happening again. Some of this is being stymied by the intelligence agencies classifying things that need to be declassified,” Paul further asserted.

Watch:

Paul has previously labeled the subterfuge over the coronavirus lab leak as “the biggest coverup in the history of science,” and has vowed to continue to expose the origins of the pandemic and uncover a paper trail that he is positive will lead back to the Wuhan lab research funded by Anthony Fauci and the National Institutes of Health.

Video: Rand Paul Promises To ‘Find The Paper Trail’ For Lab Leak COVID Origin

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It’s a vote of confidence for crypto when the space needs it most…

Ed Tilly, Chief Executive Officer at Cboe Global Markets Inc., said this week he wants to list more token on the company’s crypto exchange in the wake of the FTX blowup and additional, ongoing blowups in the space.

Tilly said this week that established firms from the traditional world of finance are seeking “reliable counterparties” and that his company wants to “capitalize” on that demand, a report from Bloomberg said on Thursday.

Bitcoin, Bitcoin Cash, Ether, Litecoin and USD Coin already trade on Cboe Digital, the report says. 

In terms of an opportunistic business opportunity, the timing couldn’t be better for Cboe now that major exchange FTX has collapsed and is currently in the midst of bankruptcy proceedings. Cboe would likely have an opportunity not only to capture some of FTX’s business, but to help restore credibility to crypto in general. 

The Commodity Futures Trading Commission and Securities & Exchange Commission are now seeking to regulate crypto, the report says, would could add another much-needed layer of credibility to the space. 

Tilly commented: “We will be taking this slowly as the SEC and the CFTC debate jurisdictional oversight, but our goal is, of course, to offer more and more exposures than the current five tokens we do today.”

The report says that Cboe “is also planning to list margin futures on its CFTC-regulated entity, and is working to get approval from the regulator” to do so. The details of these contracts were described by Bloomberg: 

These contracts would be less capital intensive to trade and would require a broker as intermediary.  The bourse’s current Bitcoin and Ether futures require customers to outlay the full amount of the contract upfront. The margin model, used in the commodities markets, requires just a percentage of the total as collateral.

Authored by Caden Pearson via The Epoch Times,

Rep. Matt Gaetz (R-Fla.) introduced a resolution in the U.S. House of Representatives on Thursday calling for an investigation into Rep. Adam Schiff (D-Calif.) and proposed he be denied access to classified information.

The resolution (pdf), titled “Preventing Extreme Negligence with Classified Information Licenses Resolution,” or “PENCIL Resolution,” is an updated version of a similar resolution Gaetz introduced in 2019.

It calls for Schiff to be denied access to classified information and investigated by the House Ethics Committee. It also calls for his comments on the discredited allegations that Russia colluded with the Trump campaign in 2016 to be struck from the official record.

“Congressman Adam Schiff led the effort for years to weaponize lies from the Clinton campaign and a corrupt Department of Justice to smear President [Donald] Trump while destroying any trust the country had left in America’s intelligence agencies,” Gaetz said in a statement.

“Speaker McCarthy kept his promise to remove Rep. Schiff from the Intelligence Committee, and with the PENCIL Resolution, we will express the sense of Congress that he should be barred from accessing any classified information at all,” he continued. “He can no longer be trusted by his colleagues in Congress or the American people.”

House Speaker Kevin McCarthy officially rejected Schiff for a seat on the House Intelligence Committee on Jan. 24, having argued that Schiff “lied to the American public.”

The day before McCarthy denied Schiff a seat, Charles McGonigal, a former FBI agent who played a role in investigating Trump’s 2016 campaign advisers Carter Page and George Papadopoulos over the collusion allegations, was himself arrested for alleged ties to a Russian oligarch.

The U.S. Department of Justice announced on Jan. 23 that McGonigal had been charged with violating and conspiring to violate the International Emergency Economic Powers Act by laundering money on behalf of Oleg Deripaska, a sanctioned Russian billionaire.

Gaetz argued that McGonigal’s arrest “proved that the very people investigating President Trump for Russian collusion were themselves taking orders from Russian oligarchs.”

U.S. Rep. Adam Schiff (D-Calif.) listens during the third hearing by the Select Committee to Investigate the January 6th Attack on the U.S. Capitol in the Cannon House Office Building in Washington on June 16, 2022. (Anna Moneymaker/Getty Images)

PENCIL Resolution

Schiff served on the Intelligence Committee since January 2015, first as the ranking minority member when Republicans were last in the majority, then as chairman from January 2019 to Jan. 3, 2023, when Democrats were in the majority.

The Democrat was one of eight members, referred to by Gaetz as the “Gang of Eight,” who had access to critical and sensitive intelligence information that other members of Congress and the American people did not have clearance to access.

Gaetz’s resolution states that during his tenure, Schiff made false claims about collusion between Trump and Russia during the 2016 election, despite the principal conclusions of the Mueller Report determining that there was no criminal collusion.

In December 2017, Schiff said during an interview with CNN: “The Russians offered help, the campaign accepted help. The Russians gave help, and the president made full use of that help.” The resolution additionally notes that Schiff incorrectly claimed there was “clear evidence on the issue of collusion.”

Further, the resolution states that Schiff has been untrustworthy by advancing lies about Trump and that Schiff has attempted to cover his abuse of discretion with legislation.

In November 2020, Schiff’s office demanded Twitter remove “any and all content” by alleged harassers and spreaders of so-called misinformation about the committee’s staff. This included removing content created by State Department staffers that challenged the Russia collusion narrative. His office also called for the suspension of “many” accounts.

Ultimately, the resolution states that Schiff “can no longer be trusted by his colleagues in Congress or the American people.”

The Epoch Times contacted Schiff’s office for comment.

The headline from this morning’s income and spending data is The Fed’s favorite inflation indicator – Core PCE Deflator – printed pretty much in line with expectations (headline up 0.1% MoM was marginally hotter than expected). The year-over-year prints dropped to 5.0% and 4.4% respectively for headline and core – while both lower and trending down from the highs last year, these prints are still the highest since 1991…

Source: Bloomberg

Americans’ income was expected to rise 0.2% MoM and spending drop 0.1% MoM and while incomes met expectations, spending was weaker than expected (-0.2% MoM). That is the second straight month of spending declines…

Source: Bloomberg

On a year-over-year basis, spending growth continues to outpace income growth…

Source: Bloomberg

Notably, govt wages and salaries are growing faster than those of private workers for the first time since March 2020:

• Private workers wage growth Dec 4.4%, vs 5.1% in Nov

• Govt workers wage growth Dec 4.8%, vs 4.9% in Nov

All of which leaves the personal savings rate languishing near record lows (although it did improve from 2.9% to 3.4% – its highest since May 2022 – as credit card debt hits record highs)…

Source: Bloomberg

We note that the savings rate was revised significantly higher in the last two months… (as credit card debt has soared)…

How much of the savings rate increase is real vs excel spreadsheet adjustments is TBD, but this is good news for Powell: consumer starting to retrench and save more -> less inflation https://t.co/WkPzMKplHL

— zerohedge (@zerohedge) January 27, 2023

Does that really sound like the ‘strong consumer’ we keep being told about? It sounds like the consumer is finally hitting their limit on spending (but no slowdown in credit card spending) and is pulling back… not a good sign for GDP.

Authored by Brandon Smith via Alt-Market.us,

The decline of a currency’s world reserve status is often a long process rife with denials. There are numerous economic “experts” out there that have been dismissing any and all warnings of dollar collapse for years. They just don’t get it, or they don’t want to get it. The idea that the US currency could ever be dethroned as the defacto global trade mechanism is impossible in their minds.

One of the key pillars keeping the dollar in place as the world reserve is its petro-status, and this factor is often held up as the reason why the Greenback cannot fail. The other argument is that the dollar is backed by the full force of the US military, and the US military is backed by the US Treasury and the Federal Reserve – In other words, the dollar is backed by…the dollar; it’s a very circular and naive position.

These sentiments are not only pervasive among mainstream economists, they are also all over the place within the alternative media. I suspect the main hang-up for liberty movement analysts is the notion that the globalist establishment would ever allow the dollar or the US economy to fail. Isn’t the dollar system their “golden goose”?

The answer is no, it is NOT their golden goose. The dollar is just another stepping stone towards their goal of a one-world economy and a one-world currency. They have killed the world reserve status of other currencies in the past, why wouldn’t they do the same to the dollar?

Globalist white papers and essays specifically outline the need for a diminished role for the US currency as well as a decline in the American economy in order to make way for Central Bank Digital Currencies (CBDCs) and a new global currency system controlled by the IMF. I warned about this years go, and my position has always been that the derailment of the dollar would likely start with the end of its petro status.

In 2017 I published an article titled ‘Saudi Coup Signals War And The New World Order Reset’. I noted at the time that the sudden power shift over to crown prince Mohammed Bin Salman indicated a change in Saudi Arabia’s relationship to the US. I stated that:

“To understand how drastic this coup has been, consider this — for decades Saudi Kings maintained political balance by doling out vital power positions to separate, carefully chosen successors. Positions such as Defense Minister, the Interior Ministry and the head of the National Guard. Today, Mohammed Bin Salman controls all three positions. Foreign policy, defense matters, oil and economic decisions and social changes are now all in the hands of one man.”

The rise of MBS was backed by the Public Investment Fund (PIF), a fund comprised of trillions of dollars supplied by globalists within Carlyle Group (Bush family, etc.), Goldman Sachs, Blackstone and Blackrock. MBS garnered the favor of the globalists for one specific reason – He openly supported their “Vision For 2030”, a plan for the dismantling of “fossil fuel” based energy and the implementation of carbon controls. Yes, that’s right, the head of Saudi Arabia is backing the eventual end of oil based energy, and part of that includes the end of the dollar as the petro currency.  

In exchange for their cooperation, the Saudis are being given access to ESG-like funding as well as access to AI advancements and the so-called “digital economy.”  It sounds crazy, but there is much talk of AI developments to cure numerous health problems and extend lifespan.  With those kinds of promises, it’s not surprising that Saudi elites would be willing to dump the dollar and even oil.

In 2017 I noted that:

“I believe the next phase of the global economic reset will begin in part with the breaking of petrodollar dominance. An important element of my analysis on the strategic shift away from the petrodollar has been the symbiosis between the U.S. and Saudi Arabia. Saudi Arabia has been the single most important key to the dollar remaining as the petrocurrency from the very beginning.”

I believed that the threat to petro status would ultimately be spurred on by a proxy war between East and West:

“World economic war is the real name of the game here, as the globalists play puppeteers to East and West. It is a geopolitical crisis they will have created to engineer public support for a solution they predetermined.”

Back then I thought that such a proxy war would be initiated in the Middle East, possibly in Iran. However, it’s clear that Ukraine is the powderkeg the globalists have chosen, at least for now, with Taiwan being the next shoe to drop.

In the years since I made these predictions the relationship between Saudi Arabia, Russia and China has grown very close. Arms deals and energy deals are becoming a mainstay of trade and this has led to a quiet but steady distancing of the Saudis from the dollar. This past week, the dominoes were set in motion for dollar collapse when Saudi Arabia announced at Davos that they are now willing to trade oil in alternative currencies.

In response, Xi Jinping pledged to ramp up efforts to promote the use of the Chinese yuan in energy deals. This falls in line with another article I wrote in 2017 titled ‘The Economic End Game Continues,’ in which I described how conflict with Eastern nations (China and Russia) would be exploited to create a catalyst for the end of the dollar’s petro status.

The importance of the Saudi announcement cannot be overstated; this is the beginning of the end of the dollar. The dollar’s world reserve status is largely dependent on its petro-status. Without one, you cannot have the other. This is almost the exact same dynamic that led to the implosion of the British Sterling decades ago as the global petro currency which resulted in the rise of the dollar to take its place.

This time, though, it will not be a single foreign currency that takes on the role of world reserve, it will be a basket currency system controlled by the IMF called Special Drawing Rights, along with a single global digital currency that is yet to be named but is now under development.

The consequences of the loss of reserve status will be devastating to the US economy. It is the only glue holding our system together – The ability to defer inflation by exporting it overseas is a superpower only the US enjoys. The Fed can print money perpetually if it wants to in order to fund the government or prop up US markets, as long as foreign central banks and corporate banks are willing to absorb dollars as a tool for global trade. If the dollar is no longer the primary international trade mechanism, the trillions upon trillions of dollars the Fed has created from thin air over the years will all come flooding back to the US through various avenues, and hyperinflation (or hyperstagflation) will be the result.

This dynamic is already in play, as foreign holders of US debt and dollars have been dumping them at record pace since 2017. The process continues at a time when the Federal Reserve is cutting it’s balance sheet and raising interest rates, which means there is no longer a buyer of last resort.

This may be why multiple foreign central banks have renewed their purchases of gold reserves and are once again stockpiling precious metals. They seem to be well aware of what is about to happen to the dollar, while the American public is kept in the dark.

The effects of the decline of the dollar may not be immediately felt, or become obvious for another year or two. What will happen is consistent inflation on top of the high prices we are already dealing with. Meaning, the Federal Reserve will continue to hold interest rates higher and prices will barely budge or they may climb in spite of monetary tightening. Even in the face of a major recessionary contraction, which I predict will be triggered starting in April, prices will STILL remain higher.

All the while the mainstream media and government economists will say they have “no idea” why inflation is so persistent, and that “nobody could have seen this coming.” Some of us saw it coming, but only because we accept the reality that the dollar’s days are numbered.

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US futures dropped after yesterday’s meltup, led lower by semiconductor stocks and traded in a tight range on Friday after a catastrophic earnings report and guidance from (former?) chip giant Intel, while investors awaited key inflation figures for clues on what the Fed will do next week. Nasdaq 100 futs were down 0.3% by 7:30 a.m. ET while S&P 500 futures dropped 0.2%.

Europe’s Stoxx 600 index was 0.1% higher, building on its 0.4% gain from Thursday. The Bloomberg Dollar Spot index was modestly higher, while most Group-of-10 currencies remained under pressure amid muted trading. Treasuries were on the back foot, mirroring moves in German and UK bond markets. Oil and gold rose, while Bitcoin fell for a second-straight day. Focus today will be on the latest reading of the core personal consumption expenditures index, the Fed’s preferred inflation data.

Before the Intel report on Thursday, the S&P 500 index achieved its highest close in more than a month and the Nasdaq 100 rose 2% to a four-month high. Yesterday’s rally began with Tech earnings and then accelerated with macro data both a showing a resilient economy but one whose metrics are approaching Fed-preferred levels. Yesterday’s 7Y auction was strong, making 8 of 8 auctions this year where demand was strong enough to move yields lower.

Data on Thursday also showed US gross domestic product expanded at a faster-than-forecast pace into the end of 2022. That encouraged hopes the world’s biggest economy can achieve a soft landing, but could temper expectations of a Federal Reserve pivot towards rate cuts later this year. “Stronger data may negate the argument for recession, but then, it means the Fed has to be more hawkish,” Boardman-Weston said. “Markets are in a bit of a Catch-22.”

“You are seeing more and more companies turn cautious about the earnings outlook,” said Dan Boardman-Weston, chief investment officer at BRI Wealth Management. “If there is a recession, earnings will have to decline and price-to-earnings ratios have to come down.”

Another dampener was the continued rout in companies linked to Indian billionaire Gautam Adani. His corporate empire has shed some $50 billion of market value in less than two sessions following an explosive report from short seller Hindenburg. The losses dragged India’s Nifty 50 index to three-month lows.

In premarket trading, Intel shares plunged 11% after the chipmaker issued one of its weakest ever quarterly forecasts as a slump in personal-computer sales hits the business. Analysts say they were surprised by the magnitude of the weakness in the forecast. Visa shares rise as much as 1% in US premarket trading after the payments company’s earnings beat expectations, prompting analysts to raise their targets on the stock in the hope that the firm will be able to weather a weaker economic environment as travel rebounds and foreign exchange pressures ease. Bank stocks were lower in premarket trading, putting them on track to snap a two day winning streak. In corporate news, Wells Fargo kept Chief Executive Officer Charlie Scharf’s pay at $24.5 million for 2022. Meanwhile, South Korea’s financial regulator has fined US-based Citadel Securities almost $10 million over its use of high-frequency trades that allegedly disrupted the market. Here are some more notable premarket movers:

• Buzzfeed shares jump as much as 28% in US premarket trading, set to extend yesterday’s 120% rally on the digital-media firm’s plans to use OpenAI.
• Eastman Chemical’s results missed expectations and the chemicals group’s outlook implies an improvement across 2023 that may be viewed as ambitious, analysts say. Eastman shares fell 3% in extended trading after the update.
• Hasbro shares sink as much as 5.3% in US premarket trading after the toy and game maker reported weaker 4Q sales that fell short of analyst estimates. Jefferies says the quarter is just a “painful period” in the firm’s transformation, which will see it cut 1,000 jobs and reshuffle management. Truist Securities says the results raise concerns around the firm’s ability to grow in 2023.
• L3Harris outpaced estimates in its 4Q results and its outlook is good enough to match low expectations, analysts say. Shares in the aerospace and defense group rose 3% in after- hours trading.
• KLA Corp shares declined 5.5% in extended trading on Thursday after the semiconductor capital equipment company gave a third-quarter revenue forecast that was below expectations at the midpoint.

Despite Friday’s weakness, US stocks remain on track for their best month since July, while the Nasdaq 100 is on course for its fourth straight week of gains – its longest such streak since mid-August – as investors bet signs of easing inflation will prompt the Fed to ease the pace of rate hikes.  While the Fed is set to hike interest rates by 25 basis points next week — shifting away from last year’s bigger moves — hopes for end-2023 rate cuts are “a step too far” and may end up being frustrated, according to Erick Muller, head of product and investment strategy at Muzinich & Co. Ltd.

“We will probably see the Fed say ‘we are entering the final phase but listen carefully guys: we will continue to raise rates,” Muller said. “A lot of volatility in rates will depend on the path of inflation from here.”

Victoria Scholar, head of investment at Interactive Investor, said Friday’s declines also suggested some profit taking after the strong run of gains. “On top of that, there’s growing caution ahead of the PCE price index, which could provide some clues into the US inflation outlook at the Fed’s next move,” she said. Meanwhile, a note from Bank of America showed investors continued to prefer non-US equities in the week through Jan. 25. European stock funds had $3.4 billion of inflows, the note said citing EPFR Global data, while US funds saw just $300 million.

And speaking of Europe, the continent’s equity indexes were slightly higher on the day and on course for a weekly gain as earning season continues in earnest. The Stoxx 600 is up 0.1%, led by outperformance in the energy, construction and consumer product sectors. Travel and retail fall. The Stoxx index has gained almost 7% so far, but caution has seeped in as company earnings trickle out. Here are some of the biggest European movers on Friday:

• LVMH rose to a fresh record high, up 0.8% in early trading as the market focused on the prospects of the Chinese market reopening for the luxury behemoth rather than its weak 2H operating profit margins
• SSAB gains as much as 11% as the Swedish steelmaker’s higher-than-forecast dividend and plans for a buyback offset its 4Q earnings miss, according to analysts
• Husqvarna rises as much as 16% after Germany’s Bosch said it would acquire shares in the Swedish lawn-care and outdoor equipment firm, increasing its stake to about 12%
• Sainsbury climbs as much as 6.5%, the most intraday since November, after convenience-store operator Bestway Group said it has acquired or agreed to acquire a 3.45% stake in the grocer
• JCDecaux gains as much as 6.6% after reporting better- than-expected 4Q revenue, even though the outdoor advertising firm’s China business was hit by a drop in mobility
• Adidas rises as much as 2.5% after the sportswear brand was upgraded to buy at Warburg, which said the company’s low starting point will ensure earnings will improve
• Hennes & Mauritz drops as much as 7.9%, the most since May, after the clothing retailer reported fourth-quarter gross margin that missed analyst estimates
• Remy Cointreau falls as much as 3.2% after the premium spirits maker’s US inventories overshadowed 3Q organic revenue that beat the average estimate
• Scor drops as much as 8.2%, the most intraday since July, after Chief Executive Officer Laurent Rousseau resigned less than two years into the role
• Vestas pares declines of as much as 5.6% as analysts said external challenges continue to weigh on the firm, but that there are signs of improvements

Earlier in the session, Asian stocks advanced for a sixth straight day, supported by mild risk-on sentiment ahead of US consumer spending data that would offer further clues on the Federal Reserve’s policy path. The MSCI Asia Pacific Index climbed as much as 0.6%, headed for its highest close since April. India’s benchmarks fell the most in the region, dragged by Adani Group shares. Hong Kong’s Hang Seng Index climbed despite increasing restrictions against China’s semiconductor industry. The gains in broader Asia track overnight moves in US markets, where stocks jumped as data showed that America’s economic growth is cooling somewhat and as tech shares rallied. Investors are awaiting data on US personal income and consumption as well as home sales later in the day, among the final set of data the Fed will analyze before setting rates next week.

“The disinflation impulse is likely to stretch further, as has been evident from CPI releases lately, likely continuing to build a case for a 25bps rate hike by the Fed next week,” Saxo Capital Markets strategists wrote in a note. With Friday’s gains, the MSCI Asia gauge is set to cap its fifth weekly advance. Shares in South Korea were among the top gainers in the region while Vietnam’s stock measure jumped in a catch-up rally as traders returned from the Lunar New Year holidays. Mainland markets reopen Monday.  Next week is set to be one of the busiest this earnings season in Asia with over 200 companies reporting, according to Bloomberg-compiled data. Traders will assess the impact of higher interest rates and slowing demand on corporate profits in the region, with China’s reopening expected to provide some reprieve

Japanese equities posted modest gains after a tech rally drove peers higher in New York, with investors assessing the implications of the latest economic data including a slowdown in US economic growth.  The Topix Index rose 0.2% to close at 1,982.66 in Tokyo, while the Nikkei advanced 0.1% to 27,382.56. Mitsubishi UFJ Financial Group Inc. contributed the most to the Topix Index gain, increasing 2.7%. “US GDP data showed that interest rate hike is slowly taking effect, and concerns about further hikes have receded,”said Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management.

Indian stocks declined for a straight second session on Friday as a selloff in Adani Group shares deepened after a damaging report from a short-seller.  The S&P BSE Sensex shed 1.5% in Mumbai as traders returned from a one-day holiday, while the NSE Nifty 50 Index extended its drop to 1.6%. Friday’s drop was biggest single-day plunge since Dec. 23 for both gauges while their two-day slide was most since Sept. 26. For the week the indexes slipped more than 2% each and are more than 6% away from their all-time high level seen early December. The India VIX Index, a measure of volatility expectations, rose 18%, the most since Feb. 24, tracking plunge in the benchmark. S&P BSE AllCap Index, India’s broadest gauge by number of companies, saw 1006 companies declining while 158 advanced.  Adani Green Energy, Adani Transmission and Adani Total Gas all slumped 20% in the second trading session after US investment firm Hindenburg Research released a report alleging financial malpractice.  The fresh bout of selling happened as market participants evaluated the impact of US short-seller Hindenburg Research’s report on Adani Group, Nishit Master, a portfolio manager with Axis Securities said in note.  Markets will likely stabilize over the next few days as investors opt for bargain buying as good stocks with history of free cash flow generation are available at reasonable valuations, he added. Foreign investors have been sellers of Indian shares this month, taking out $1.6 billion through Jan. 24, after net selling $167 million in December. 

The Dollar Index is flat ahead of US PCE data later today, trading mixed against its Group-of-10 peers, though currencies largely consolidated recent moves. The yen led gains and the pound and the Swedish krona were the worst performers and the pound underperformed its G10 rivals.

• The euro traded in a narrow 1.0866-1.0900 range. Volumes were 60% above recent averages Thursday as traders position for next week’s meetings by the Fed and the ECB. European bonds slipped, led by the belly, and 10-year German yields headed for their biggest weekly increase so far in 2023
• The pound and gilts slipped, with the UK currency heading for its first week of losses against the dollar since the start of the year. BOE also meets next week
• The yen strengthened after Tokyo inflation data beat estimates, adding to expectations that the Bank of Japan may tweak its ultra-loose monetary policy. Tokyo consumer prices excluding fresh food rose 4.3% y/y in January, fastest pace since 1981; estimate 4.2% gain
• New Zealand dollar was steady after paring an earlier advance. Business confidence index rose to -52 in January from -70.2 in December, according to ANZ Bank New Zealand

In rates, treasuries were pressured lower, following losses across core European rates with Italian bonds notably underperforming over the London session. US yields were cheaper by up to 6.5bp across 10-year sector which leads losses on the day, cheapening 5s10s30s fly by 2.6bp and steepening 2s10s by 3bp; in 10-year sector bunds lag by additional 1.5bp on the day while Italian bonds trade 5bp cheaper. US session focus switches to data with US personal spending and PCE deflator expected.

In commodities, oil prices extended gains, benefiting signs of a resilient US economy and China’s continued recovery; WTI added 1.2% to trade near $82.00. Analysts at Goldman Sachs predicted crude prices to head to $100 a barrel later this year from current levels just above $80. Spot gold is little changed at $1,928/oz. Gas markets were pressured as Freeport’s Texas LGN plant has received approval to restart alongside forecasts for elevated European temperatures next week. EU proposed a price cap on Russian premium oil products of USD 100/bbl and USD 45/bbl on discounted oil products, while EU governments are to discuss the proposals today before entry into force on February 5th.

Bitcoin is little changed and holding around the USD 23k mark, with fresh catalysts limited and focus on upcoming key US data.

Looking at the day ahead, data releases from the US include personal income, personal spending and the Fed’s preferrered inflation indicator, the core PCE, as well as December’s pending home sales and the University of Michigan’s final consumer sentiment index for January. Over in Europe, there’s also French consumer confidence for January, the Euro Area money supply for December. Lastly, earnings releases include American Express, Charter Communications and Chevron.

Market Snapshot

 

• S&P 500 futures down 0.3% to 4,061.25
• MXAP up 0.4% to 170.70
• MXAPJ up 0.2% to 560.17
• Nikkei little changed at 27,382.56
• Topix up 0.2% to 1,982.66
• Hang Seng Index up 0.5% to 22,688.90
• Shanghai Composite up 0.8% to 3,264.81
• Sensex down 1.5% to 59,300.13
• Australia S&P/ASX 200 up 0.3% to 7,493.83
• Kospi up 0.6% to 2,484.02
• STOXX Europe 600 up 0.1% to 454.54
• German 10Y yield little changed at 2.25%
• Euro little changed at $1.0884
• Brent Futures up 1.4% to $88.67/bbl
• Gold spot down 0.1% to $1,927.47
• U.S. Dollar Index little changed at 101.84

Top Overnight News from Bloomberg

• Back-to-back interest-rate increases of 50 basis points are approaching from the European Central Bank, whose battle with persistent inflation will see it hike borrowing costs until May, according to a Bloomberg survey of economists
• The IMF said Sweden might have to require banks to hold more capital and increase funding for the financial regulator, as risks rise in the country’s property sector
• Japan and the Netherlands are poised to join the US in limiting China’s access to advanced semiconductor machinery, forging a powerful alliance that will undercut Beijing’s ambitions to build its own domestic chip capabilities, according to people familiar with the negotiations
• Nearly a year into an invasion that was supposed to take weeks, Vladimir Putin is preparing a new offensive in Ukraine, at the same time steeling his country for a conflict with the US and its allies that he expects to last for years
• Putin demanded his government to come up with a plan for re-jigging Russia’s oil levies in a move to offset the effects from western energy sanctions on the nation’s budget revenues

A more detailed look at global markets courtesy of Newsquawk

APAC stocks traded with a positive bias after the mostly strong US data releases, albeit with advances capped as participants also digested earnings including disappointing results from Intel, and firm Tokyo CPI data. ASX 200 was marginally higher on return from holiday with the index propped up by tech and financials. Nikkei 225 lacked decisiveness following firm Tokyo CPI data in which core inflation rose at its fastest pace since 1981 and further added to the pressure for the BoJ to rethink its ultra-easy policy. Hang Seng was choppy and struggled to sustain early gains after data showed a wider contraction in Hong Kong’s exports and with Japan and the Netherlands set to join the US’s chip curbs on China.

Top Asian News

• Japan and the Netherlands agreed to join the US on China chip curbs with US, Dutch and Japanese officials set to conclude talks as early as today, while the Netherlands is to expand restrictions on ASML (ASML NA) and Japan will set similar limits on Nikon (7731 JT), according to Bloomberg and Reuters.
• Hong Kong Dollar Bears Stage a Comeback as Funding Costs Slide
• India Regulator to Study Hindenburg Report on Adani Group: Rtrs
• Apple’s iPhone Dominated China Last Quarter Despite Disruptions

European bourses are near unchanged levels, Euro Stoxx 50 +0.3%, though a very mild positive skew is seen in quiet post-earnings newsflow. LVMH slips with attention on lower margins, Intel (-9.5% pre-market) lags after a miss on the headline metrics and a weak market outlook. US futures are lower across the board with the NQ -0.5% lagging post-INTC; focus for the session ahead is firmly on US PCE before next week’s hefty Central Bank docket.

Top European News

• UK Chancellor Hunt says the best cut in tax right now would be a cut in inflation, today’s announcement is more of a general plan/guide, will need to wait for budgetary events for further details. Should aim for the most competitive tax regime of any major nation but sound money needs to come first. Need restraint in public spending. Unlikely that we will have the headroom to cut business taxes in March.
• 7 EU nations Finance Ministers have sent a letter to Trade Commissioner Dombrovskis have pushed back on plans for “permanent or excessive non-targeted subsidies” in response to the US green subsidies/Inflation Reduction Act, via Politico.
• IMF Article IV review of Sweden: mild recession likely, 2023 growth -0.3%. HICP expected to moderate to 6.5% in 2023. Strong employment is a positive, should somewhat offset household burden from rates/inflation
• Vestas Sees More Pain Ahead for Beleagured Wind Industry
• Sainsbury Rises After Bestway Group Buys Stake, May Add More
• Libya Says More Deals to Follow Eni’s $8 Billion Gas Investment
• Ionos Owners See IPO Proceeds Raising Up to €543 Million

FX

• DXY is firmer but somewhat mixed vs peers, with the index sub-102.00 as the JPY outperforms after hot Tokyo CPI.
• At best, USD/JPY tested but failed to move below 129.50 to the downside, and remains towards the lower-end of a 129.51-130.26 range.
• Overall, EUR, CAD and CHF are little changed awaiting impetus from the afternoon US data docket with specific developments elsewhere limited; pivoting, 1.0880, 1.3320 and 0.92 respectively.
• GBP is the main laggard for no obvious/specific reason, Cable has struggled to make any move above 1.24 stick, with EUR/GBP above 0.8800 at best though the move stalled ahead of the 0.8811 21-DMA.

Fixed Income

• Core benchmarks have continued to slip despite a limited early-doors bounce/ any positivity from another well-received US auction.
• Bunds have given up a handful of touted interim levels during their descent to a 137.09 low, with the associated yield above 2.25%, though shy of the 2.27% 11th January best.
• Gilts fell to a 104.30 trough, but remain above recent lows, while the UST decline has seemingly paused for breath above 114.15 ahead of US PCE.

Commodities

• WTI and Brent March futures have been moving higher since the European cash equity open, with the former back above USD 82/bbl (vs low USD 81.08/bbl) and the latter north of USD 88.50/bbl (vs low USD 87.55/bbl), in limited fresh newsflow.
• Gas markets are pressured as Freeport’s Texas LGN plant has received approval to restart alongside forecasts for elevated European temperatures next week.
• EU proposed a price cap on Russian premium oil products of USD 100/bbl and USD 45/bbl on discounted oil products, while EU governments are to discuss the proposals today before entry into force on February 5th.
• Strikes at TotalEnergies (TTE FP) sites have been suspended, will be proposed again on January 31st, via CGT Union.
• Spot gold is little changed in narrow sub-15/oz parameters with any potential upside capped by the firmer USD, base metals are mixed but contained overall.

Geopolitics

• Japan is to impose additional sanctions against Russian individuals and entities, while it will impose an additional export ban on military-related items to Russia as part of sanctions. according to Reuters.

US Event Calendar

• 08:30: Dec. Personal Income, est. 0.2%, prior 0.4%
  • Personal Spending, est. -0.1%, prior 0.1%
  • Real Personal Spending, est. -0.1%, prior 0%
• 08:30: Dec. PCE Deflator MoM, est. 0%, prior 0.1%
  • PCE Deflator YoY, est. 5.0%, prior 5.5%
  • PCE Core Deflator YoY, est. 4.4%, prior 4.7%
  • PCE Core Deflator MoM, est. 0.3%, prior 0.2%
• 10:00: Jan. U. of Mich. Sentiment, est. 64.6, prior 64.6
  • Current Conditions, est. 68.6, prior 68.6
  • Expectations, est. 62.0, prior 62.0
  • 1 Yr Inflation, est. 4.0%, prior 4.0%; 5-10 Yr Inflation, est. 3.0%, prior 3.0%
• 10:00: Dec. Pending Home Sales YoY, est. -35.4%, prior -38.6%
  • Dec. Pending Home Sales (MoM), est. -1.0%, prior -4.0%
• 11:00: Jan. Kansas City Fed Services Activ, prior -5

DB’s Jim Reid concludes the overnight wrap

I’m relieved to nearly make it to the end of the week in one piece. Whilst my fever has gone I’m still weak and at home there’s 2 sets of penicillin being taken, one perforated ear drum, and a wife who went to bed at just after 7pm last night. In the olden days there would be a big cross on our door. We are supposed to be going to a containment room tonight, where you get locked into a room for an hour and have to find a way out by deciphering all the clues with your team. Sounds like hard work!

Markets deciphered a lot of mixed clues yesterday and, after some cause for concerns, decided that it was easier to shrug it all off and drive equities to fresh 2023 highs. Earnings also helped the mood, to be fair. The S&P 500 closed up +1.10% (YTD highs), just as credit spreads tightened and oil prices recovered from their losses earlier in the week. We still think we are in a positive sweet spot but there was certainly stuff to worry about in the US data yesterday. It depends on whether you saw the glass half full or half empty element of it.

When it came to those data releases, an important one was the Q4 GDP release from the US, which showed the economy grew by an annualised +2.9% at the end of last year (vs. +2.6% expected). That’s certainly some distance from a recession and there was lots of focus on it being above consensus. However, a key point of caution is that 1.5pp of it was attributable to inventory growth, with net exports and the government adding 0.6pp each. Final sales to private domestic purchasers was soft and showed signs of grinding to a halt. So the details weren’t as flattering as the headline number might suggest at first glance. In the meantime though, the report also offered confirmation that inflation was slowing down, with the PCE price index that the Fed targets up by an annualised +3.2% in Q4, the slowest since Q4 2020, whilst core PCE was up +3.9%, the slowest since Q1 2021.

It wasn’t just the GDP release that aided hopes of a soft landing, however, as the weekly initial jobless claims for the week ending January 21 came down to 186k (vs. 205k expected). That’s their lowest level since April, and this isn’t just a blip either, since the 4-week moving average fell beneath 200k for the first time since May. Continuing claims were up to +1,675k (survey +1,658k) though so a bit mixed.

Net, net the market took the more positive side of the ledger though and investors moved to price in slightly more central bank rate hikes over the coming months. For instance, the rate priced in by Fed funds futures for the December meeting was up by +3.8bps to 4.47%. Similarly, the ECB rate priced for December was also up +4.7bps. That led to a noticeable rise in sovereign bond yields, with the 10yr Treasury yield up +5.3bps on the day to 3.495%, followed up by a +3.13bps move overnight in Asia to 3.53%. The US dollar (+0.19%) also advanced into the afternoon before giving back some gains toward the end of the US session. In Europe it was much the same story, with yields on 10yr bunds (+5.8bps), OATs (+7.7bps) and BTPs (+8.6bps) all posting a solid increase as we approach next week’s round of central bank meetings.

More details on that equity rally now. It was a big roundtrip for the S&P 500, which had been up +0.91% in the first 15 minutes of trading, before being down nearly -0.1% on the day just 90 minutes into trading. Once all the data was absorbed risk rallied through the rest of the day right through the European close. In Europe the STOXX 600 came down from its own intraday high of +0.76% to end at +0.42%, but it missed out on the last lag of the rally last night. On a sectoral basis, energy stocks (+3.32%) were the biggest outperformer in the S&P, aided by a +1.89% rise in Brent crude oil prices that took oil back to $87.47/bbl and then another +0.4% higher to $87.82/bbl in early trading in Asia. Megacap tech stocks were another winner, with the FANG+ index up +3.02% to its highest level since September thanks to a surge in Tesla (+10.97%) after its earnings release. However, some of the more defensive sectors like consumer staples (-0.28%) lagged behind the broader index.

Intel was down -9.7% in after-market trading following its earnings announcement. The chipmaker surprised investors by offering a negative earnings forecast for Q1’23 and the lowest quarterly revenue target since 2010. The company has pointed to poor PC sales as the main driver of the expected weakness. Visa was trading +1.1% higher in post-market trading despite seeing purchase volumes rise less than expected in Q4’22, and expectations that higher prices will slow consumer demand. Against that backdrop, US stock futures are indicating a negative start with contracts tied to the S&P 500 (-0.29%), as well as the NASDAQ 100 (-0.61%), ticking down.

Asian equity markets are struggling to gain traction this morning despite that strong tech-led handover from Wall Street overnight. Across the region, the KOSPI (+0.70%) is leading gains with the Nikkei (-0.03%) and the Hang Seng (-0.05%) slightly below the flatline. Elsewhere, markets in China are closed for the Lunar New Year.

In early morning data, Tokyo’s CPI for January came out with an upside surprise as headline inflation advanced to +4.4% year-on-year (vs. +4.0% expected), hitting a four-decade high. It followed a downwardly revised +3.9% increase in the previous month. Meanwhile, the Japanese Yen (+0.15%) is positively responding against the dollar, trading at $130.03 as the stronger inflation data reinforced market expectations that increasing quickening inflation could push the Bank of Japan to move away from its ultra-easy policy.

Looking at yesterday’s other data, US durable goods orders were up by +5.6% in December (vs. +2.5% expected), although excluding transportation they were much as expected at -0.1% (vs. -0.2% expected). Otherwise, new home sales in December came in at an annualised 616k (vs. 612k expected), with a downward revision in November’s figure to 602k (vs. 640k previously). Lastly, the Kansas City Fed’s manufacturing activity index beat expectations at -1 (vs. -8 expected), which is the first increase in that measure in 6 months.

To the day ahead now, and data releases from the US include personal income, personal spending and PCE for December, as well as December’s pending home sales and the University of Michigan’s final consumer sentiment index for January. Over in Europe, there’s also French consumer confidence for January, the Euro Area money supply for December. Lastly, earnings releases include American Express, Charter Communications and Chevron.

India’s richest man, Gautam Adani, Founder and Chairman of the Adani Group, watched more of his corporate empire implode on Friday, with over $50 billion in market capitalization wiped out in two trading sessions following a report by US short-seller Hindenburg Research. 

Adani Enterprises plunged 18.5% on Friday, closing at 2,761 rupees. Shares slid below 3,276 rupees, a level at which investors were allocated shares in a recent equity sale. Other units like Adani Green Energy Ltd. and Adani Total Gas crashed by a daily limit of 20%. Sellers were out in force as daily volumes exceeded three-month averages. 

Hindenburg issued the short report late Tuesday night, claiming Adani Group conducted a “brazen stock manipulation and accounting fraud scheme over the course of decades.”

Turmoil spilled into the broader main equity index of the country. NSE Nifty 50 Index sank to its lowest levels since Oct. 21. 

“It seems like there might be more downside and this report can become a big legal issue as it is causing reputational damage too,” Sameer Kalra, founder of Target Investing in Mumbai, told Bloomberg. 

On Thursday, Adani Group’s legal team released a statement that said it’s exploring legal action against Hindenburg for its “maliciously mischievous, unresearched” report. 

Hindenburg released the report as Adani Enterprises was preparing to attract more investors for its share sale. The transaction would be India’s largest-ever primary follow-on public offering. 

Joining Hindenburg’s party is Pershing Square’s Bill Ackman. He tweeted late Thursday night that the short report on Adani Group companies was “highly credible and extremely well researched.” 

“Adani’s response to Hindenburg Research is the same as Herbalife’s response to our original 350-page presentation,” Ackman tweeted, referring to his short-selling campaign against Herbalife Nutrition Ltd. five years ago. 

Adani’s response to @HindenburgRes is the same as @Herbalife’s response to our original 350-page presentation. Herbalife remains a pyramid scheme. I found the Hindenburg report highly credible and extremely well researched. @AdaniOnline response speaks volumes. Caveat emptor. https://t.co/og6DLbPzp5

— Bill Ackman (@BillAckman) January 27, 2023

Even before Hindenburg, CreditSights noted months ago that Adani’s conglomerate is “deeply overleveraged” with “stretched balance sheets.” However, the US short seller seems to put a massive spotlight on the group’s corporate governance. 

… and maybe it’s time for Carl Icahn to chime in. 

Hey @Carl_C_Icahn time to go long Adani https://t.co/WRDFnsI9Gh

— zerohedge (@zerohedge) January 27, 2023

Hindenburg’s newest campaign to take on India’s richest person and roil markets of an entire country is undoubtedly a step up from publishing short reports on small US companies, such as correctly calling the fraud in electric-vehicle maker Nikola. 

Here’s something to ponder. 

Adani’s debt bubble will probably be the cause of the first Indian financial crisis. They have loans from the largest banks and part of every major mutual fund portfolio. The market will go down with it

— T Anurag ⚡ (@T_Anurag_Nair) January 27, 2023

Authored by Charles Hugh Smith via OfTwoMinds blog,

When competence, transparency and accountability are all punished, the Race to the Bottom accelerates.

Race to the Bottom describes the process of competitive devaluation, where value is gutted to remain competitive with those who are grabbing market share by stripping out quality, value, durability, transparency, accountability and competence.

We see the global Race to the Bottom in everyday products: the quality of goods has plummeted as manufacturers compete to reduce costs to maintain high profit margins by stripping out the quality and durability of components. We see it in shrinkflation, where the cereal box contains less cereal while the price ratchets higher.

We see it when cereals that once contained no sugar are now sickly-sweet because the manufacturer is losing market share to less healthy sugar-bomb cereals.

We see it in healthcare where costs have been so ruthlessly stripped out to boost profits that it takes months to get an appointment and overworked caregivers no longer have the “luxury” of providing the care they were trained to provide. Routine procedures and hospital stays now carry pricetags equal to four years college tuition or a modest house.

The Race to the Bottom isn’t limited to goods and services. Consider the bedrock of the social order, civility. Civility in discourse is now rarer than sightings of UFOs / UAPs.

In politics, scoring cheap points while ignoring the nation’s social decay and unsustainable bubble economy is another example of the Race to the Bottom. Is getting to the bottom of the Taylor Swift ticketing “fiasco” really the most pressing issue that politicians need to address? It would seem so.

In macro-economics, the Race to the Bottom is often used to describe currency devaluation: nations seek to devalue their currency to boost exports, ignoring the downside of devaluation, i.e. their citizenry’s wealth is also devalued as the purchasing power of their currency is reduced to aid a relatively small cohort of exporters.

The decay of transparency, accountability and competence that manifests across a vast spectrum of public and private life is a profoundly systemic Race to the Bottom. Local governments and corporations alike seek to hide their malfeasance, greed and incompetence and evade accountability by any means available.

It’s as if hiding incompetence and insider profiteering is now the most valuable form of competence. Real-world competence has decayed to the point that nobody even knows what competence is, as they’ve never experienced it. The same can be said of transparency and accountability: nobody’s actually experienced actual transparency and consequences falling to those in positions of responsibility.

The “solution” of the incompetent is always the same: throw more money at the problem. But doubling or tripling the budget for housing the homeless or improving public transit never results in doubling or tripling the efficacy or efficiency of the failing systems. Instead, the money is squandered on insider profiteering: studies no one ever looks at, PR displays of “caring,” spectacles of some new showcased ‘solution” that doesn’t actually work and was never intended to be anything more than a PR stunt, and so on.

In this Race to the Bottom, power flows from saying “no”, not “yes.” The list of “stakeholders” is endless, and every one can stall or cancel a project. Nobody’s in charge except to make sure nothing gets done of any consequence.

In this Race to the Bottom, it’s a major victory if each unit of homeless housing only costs $300,000 each rather than $600,000 each and a grand total of 42 units will be built–eventually, unless of course a NIMBY group or other “stakeholder” nixes the project via endless judicial filings.

No matter how much money is thrown at the system, the bus service continues its downhill slide.

When competence, transparency and accountability are all punished, the Race to the Bottom accelerates. The worst are advanced, and the race to strip value, quality and quantity out of products and services becomes a free-for-all stripmining that favors the ruthlessly greedy.

“Markets” are nothing but platforms to be manipulated and gamed to benefit the few at the expense of the many. In this Race to the Bottom, regulators are either toothless or asleep at the wheel or bought off. Everything is for sale, and auctioned off to the highest bidder.

From low earth orbit, the Race to the Bottom is accelerating on all fronts because we’ve lost the ability to solve problems due to the power of entrenched insiders and powerful interests who profit so immensely from keeping the corrupt, unsustainable systems of power glued together for just a bit longer so they can maximize their private gains.

That the system they’ve hollowed out to maximize their private gain might take them down when it collapses doesn’t seem to occur to them. Their “faith” in the power of wealth is absolute, and so they think they’ll be safe in their fortified compounds, super-yachts, private aircraft, etc.

But all these forms of power are contingent on the vast system they are busy hollowing out.

So go right ahead and join the race to the bottom in every nook and cranny of public and private life. All your gains will vanish with the system that’s been fatally undermined by the pell-mell race to the bottom.

The Ibogaine-fueled fantasy is that we can individually pillage the system by stripping it of value, but magically escape the consequence of everyone stripping the value out to maximize their gains, i.e. systemic collapse.

Nice, until the Ibogaine wears off. That’s not how reality works. Actions have consequences, and those consequences have their own consequences.

*  *  *

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