Elon Musk Reveals “Extremely Powerful” ADL CEO Sought To Shake Him Down For Donations

Elon Musk Reveals “Extremely Powerful” ADL CEO Sought To Shake Him Down For Donations

Update: The ADL is now fundraising off this scandal and telling donors they’re under threat due to Musk’s criticisms!

DailyWire’s Ben Shapiro summed things up succinctly:

“Elon Musk is now at war with the Anti-Defamation League, a progressive interest group that proclaims it is speaking in the name of Jewish causes. And like a lot of these progressive interest groups, they are interested in removing advertising revenue from sources where they can’t control the speech.

Musk posted on X saying the ADL has been trying to kill his platform by falsely accusing him of being anti-semitic, and that If this continues, he’ll have no choice but to file a defamation suit against, ironically, the Anti Defamation League.

Elon Musk happens to be correct about all of that, which is why it’s very important that if you’re an advertiser and you are looking at platforms to advertise on, you probably should be looking at free speech platforms like X – otherwise X will revert back to type and it’s going to do the same kind of crap that Facebook and YouTube have done in censoring material.”

Musk agreed:

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As InformationLiberation.com’s Chris Menahan detailed earlier, Twitter/X owner Elon Musk revealed on Wednesday that Jonathan Greenblatt, the “extremely powerful” CEO of the Anti-Defamation League, sought to shake him down for donations just like he did to Adidas, the Brooklyn Nets and Kyrie Irving.

“Andrew Ross Sorkin asks Jonathan Greenblatt if he was seeking to have a role at X or shaking @elonmusk down for donations to the ADL (like he did to Adidas and the Brooklyn Nets) and he responds by saying that’s an ‘anti-Semitic trope,’ ” Greg Price tweeted along with a clip of Greenblatt’s latest appearance on CNBC.

“Because the answer is ‘Yes!’ regarding seeking donations, hence JG’s refusal to answer the question,” Musk responded. “JG instead went on the attack, implying that Sorkin, despite being Jewish, is somehow an anti-Semite just for asking a basic conflict-of-interest question!”

“I love how ADL overlord Jonathan Greenblatt says the ADL is just a little ‘nonprofit in New York’ with no power as if they didn’t lead a pressure campaign that squeezed $60 billion from Meta’s market cap for not complying with their demands,” Ashley St. Clair commented in response to Greenblatt’s CNBC appearance. “ADL has been operating mafia-style for ideological compliance for decades!”

“Exactly!” Musk said. “The ADL is extremely powerful in the west, as demonstrated by our massive drop in US advertising, while Asia advertising has actually grown slightly.”

Musk also said it was “bizarre” how Marc Lamont Hill, who was “canceled” by the ADL and lost his job at CNN for criticizing Israel, is now defending them and painting Musk’s criticism of the foreign lobby group as “dangerous, dishonest,” “deeply antisemitic” and inviting of “violence from his Nazi base.”

“Jonathan at ADL kicked off a massive Twitter boycott campaign less than a week after the acquisition closed,” Musk said in another post.

“Literally nothing had changed about the site. Our US revenue is still 60% down from that campaign, but slowly improving.”

Musk also questioned why the ADL is training FBI agents.

“Why does the FBI need training that holocausts are terrible?” Musk asked.

The ADL also trains local law enforcement throughout America, teaching them the same tripe they teach schoolchildren about the many evils of “whiteness.”

Rather than cower in the face of the ADL’s threats, Musk engaged with Keith Woods and questioned why so many Jews have turned against free speech.

After Woods exposed alleged Israeli intelligence agent Vivian Bercovici trying to influence the #BanTheADL campaign on a popular Twitter Space, her Wikipedia was edited to try and hide her connections to the Israeli intel firm Black Cube.

Musk has shared several posts claiming the ADL strayed from it’s original noble mission but the truth is they’ve always been terrible.

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Tyler Durden
Thu, 09/07/2023 – 13:00

via ZeroHedge News https://ift.tt/RgIlBt2 Tyler Durden

Ukraine Drone Scores Direct Hit On Central Rostov, Home To Russian Military HQ

Ukraine Drone Scores Direct Hit On Central Rostov, Home To Russian Military HQ

Overnight and into the early morning on Thursday, the central part of the Russian city of Rostov-on-Don was rocked by a drone strike direct hit, amid broader attacks on multiple other regions.

Russia’s military said that at least three regions of the country were targeted by drones out of Ukraine, in what’s now become a weekly or almost daily trend of escalation. Reportedly a location which hosts Russia’s central command center for its operations in Ukraine was targeted in the Rostov attack, which lies in southern Russia.

Stillframe from video of overnight attack on central Rostov-on-Don

Rostov region Governor Vasily Golubev said that “Two drones were shot down by air defense systems in the southern city of Rostov-on-Don, which lies less than 40 miles from the Ukrainian border.” But at least one scored a direct hit.

While the defense ministry said inbound drones in other parts of the country, such as the Moscow region, were shot down, Golubev additionally confirmed that the attack on Rostov-on-Don damaged three buildings and left at least one injury.

Most drones from Ukraine are intercepted or fail to do much damage, but video from this latest attack on Rostov shows a direct hit on the city center.

An additional cluster of drones was said to have been destroyed by anti-air defenses over the Bryansk region, while on Thursday morning five villages in Russia’s Belgorod region were hit by cross-border Ukrainian artillery. 

The New York Times in a fresh report commented on the significance of this attack as follows:

Explosions rocked the area around one of Russia’s largest military hubs before dawn on Thursday

…The southern city of Rostov-on-Don, where at least one of the explosions occurred, is home to Russia’s southern military headquarters and is a key command center for its forces in the war. Russian news outlets posted a series of videos showing an explosion in the center of the city, but it was not clear what caused the blast. 

Another video of the Rostov strike captured from further away…

The report noted that clearly the Ukrainian military or intelligence was behind it, even if Kiev didn’t own up to it – part of the trend of increased attacks meant to create psychological tension and instability in Russian society.

“Frederick B. Hodges, a retired lieutenant general and former top U.S. Army commander in Europe, said that the strikes inside Russia have a cumulative effect, possibly hurting the economy and heightening tensions in a Russian military command already unsettled by the fallout from Mr. Prigozhin’s short-lived mutiny and setbacks in the war in Ukraine,” the NYT cited.

The Kremlin has increasingly pointed the finger at US and NATO intelligence for assisting Kiev with target locations inside Russia in what has constituted a massive escalation. Some major US media reports have cited US officials who appear to actually admit this.

Tyler Durden
Thu, 09/07/2023 – 12:40

via ZeroHedge News https://ift.tt/7oEw9Us Tyler Durden

Get A New COVID Shot? The Evidence Suggests Otherwise…

Get A New COVID Shot? The Evidence Suggests Otherwise…

Authored by Eyal Shahar via The Brownstone Institute,

Fall is coming and the Covid propaganda machine, fueled by manufacturers of Covid vaccines, is already here. Without a single trial of the effectiveness against death, lipid nanoparticles that contain mRNA and perhaps more (remnant DNA?) will likely be added to regular flu vaccination every winter. Perhaps as soon as this winter they will no longer be called booster doses.

It is therefore an appropriate time to revisit the claims of high effectiveness of the first booster, which was added to the two-shot protocol two winters ago. Using empirical data from three sources, I will examine here what is left after accounting for the healthy vaccinee bias (to be explained) and show peculiar features of the data that indicate even deeper estimation problems. Then, I will discuss another bias, called differential misclassification, which cannot be easily removed.

Considering these two biases (there may be others), the true effectiveness of the first booster was somewhere between mediocre and zero, and it is impossible to narrow that range. Therefore, all those observational studies of the booster effectiveness were useless.

Taking a new Covid shot every winter, whether called booster or not, has no empirical basis. The burden of proving effectiveness against death squarely rests on public health officials, and anything short of a randomized trial is unacceptable.

The healthy vaccinee bias

I devoted several articles to this topic, which may be summarized as follows:

A naïve comparison of Covid mortality in vaccinated people and unvaccinated people, even if age-adjusted, is grossly misleading because the former have a lower risk of death to begin with. At least part of their lower Covid mortality, if not all, has nothing to do with the vaccine. They are simply healthier people than their unvaccinated counterparts. That’s called the healthy vaccinee bias.

Or vice versa: unvaccinated people are, on average, sicker than their vaccinated counterparts, and therefore have higher mortality in general, including mortality from Covid.

Biases have been studied extensively by epidemiologists, biostatisticians, and others. But if you run a search for “healthy vaccinee bias” on PubMed, a well-known website for biomedical articles, you will not find many publications. There are only 24 (August 31), including recent correspondence in the New England Journal of Medicine on the booster effectiveness.

The healthy vaccinee bias, which many mistakenly call selection bias, is a type of confounding bias. Moreover, it is not restricted to a comparison of vaccinated with unvaccinated but is carried forward with additional doses. Those who took the third dose were healthier, on average, than those who took only two doses. We’ll see the evidence shortly. Shifting of healthier people along the sequence of doses has another peculiar effect. For instance, the “leftover” cohort of two-dose recipients becomes sicker (more comparable) to the cohort of unvaccinated.

The healthy vaccinee bias can be removed, at least partly, but little has been written on the method. As far as I know, two research groups independently developed a correction method for biased risk ratios: one group from Hungary; another from the US. Unaware of that work until recently, I also proposed a method. Interestingly, it turns out that it’s the same trivial math, expressed in two or three forms.

Regardless of the math, the common underlying principle is simple. We know that vaccinated people are healthier, on average. Let’s use data on non-Covid mortality to estimate their Covid mortality, had they been as unhealthy as their unvaccinated counterparts. In other words, we estimate the risk in a counterfactual state, which is not observable. Indeed, one of several ways to define confounding and deconfounding is based on counterfactual reasoning. (There are other ways.)

To correct the bias, we need data on non-Covid mortality by vaccination status. That type of data has been consistently hidden. So far I am aware of three sources of data on non-Covid death of recipients of the third dose: England, Wisconsin, and Israel.

Data from the Office of National Statistics (ONS), England

The ONS is the largest of the three sources. That agency periodically publishes an extensive dataset with many levels of stratification, from which I extracted monthly data for those who received the third dose versus those who received only two doses. In both cases, I chose only those people who received the last dose at least 21 days ago, avoiding sparse data for some other categories and ensuring comparability. The time period I examined was November 2021 through April 2022, shortly after the initiation of the booster campaign till the next (fourth dose) campaign.

The ONS data include age-standardized mortality rates for all ages, and also rates for 10-year age groups with additional age-standardization within those age groups. I chose the latter rates. The results were nearly identical using non-standardized rates, which is not surprising given the narrow age bands.

The example below shows that the rate of non-Covid mortality in the oldest recipients of only two doses was 2.19 times that rate in their age-matched counterparts who received three doses. Those who continued to take the booster were healthier on average. That’s the healthy vaccinee bias, which was present in every age group in every month. The ratio 2.19 is called the bias factor. Its value ranged from 2 to 5 in most of the ONS data I extracted. The lowest value was 1.7 and the highest was 8.1.

Copied from the ONS Excel file with my additions (in red)

A naïve analysis produces a risk ratio of 0.27 (vaccine effectiveness of 73 percent) attributed to taking a third dose versus taking only two doses. Both are biased estimates. To compute a corrected risk ratio we should multiply the biased risk ratio (0.27) by the bias factor (2.19), as explained elsewhere.

Rounding at the end of the computation, we get a corrected risk ratio of 0.60 (corrected vaccine effectiveness of only 40 percent).

A few methodological points:

First, as I noted earlier, the use of actual rates rather than standardized rates has made no material difference. The age groups were narrow enough. In the example above, we get exactly the same result whichever type of rate we use because the standardized rates were almost identical to the actual rates.

Second, when using actual rates, population denominators cancel out. Simple math shows that we can get the corrected risk ratio by using only counts of deaths.

I will skip the technical derivation and just show the computation for the example above:

  • Odds of Covid death (vs. non-Covid death) in third-dose recipients: 606/6,912 = 0.088

  • Odds of Covid death (vs. non-Covid death) in two-dose recipients: 88/598 = 0.147

  • Corrected risk ratio: 0.088/0.147 = 0.60

Third, serious questions have been raised on the ONS denominators. However, this method of correction for the healthy vaccinee bias relies only on counts of deaths (which do matter a lot.) We will return to this topic at the end when I discuss another important bias: differential misclassification of the cause of death.

Fourth, sparse data (few deaths) is a common problem in estimation of vaccine effectiveness, especially when the sample is stratified. In the interval I analyzed for the booster effect (November 2021 — April 2022), it was not an issue. The ONS dataset is large enough to produce stable results at those levels of stratification.

Fifth, I restricted the computation to age 60 and above for two reasons: 1) the unbrainwashed reader knows that Covid has never been a public health issue for younger populations. 2) The number of Covid deaths in younger age groups was small.

The graph below shows a naïve analysis of the ONS data. The estimates of high effectiveness are useless for at least one reason: the healthy vaccinee bias. The ONS acknowledges the point, without using the word “bias.”

They write:

“The ASMRs [age-standardized mortality rates] are not equivalent to measures of vaccine effectiveness; they account for differences in age structure and population size, but there may be other differences between the groups (particularly underlying health) that affect mortality rates.”

Corrected estimates of effectiveness are shown in the graph below. Comparing the second graph to the first, it is apparent that the magnitude of the healthy vaccinee bias was large, and in April 2022, biased estimates of 54 percent to 70 percent were essentially nullified. We also observe rapid and complete waning of effectiveness, which was not seen in the biased results.

Nonetheless, new questions arise after the correction:

  • Why does effectiveness appear to increase with aging in many pairwise comparisons? For instance, why is it twice as high in the oldest than the youngest in November 2021? We expect to observe the opposite, given well-established knowledge from immunology.

  • Why does effectiveness increase in the youngest age group between November 2021 and January 2022, and then rapidly decrease? Is there any biological explanation?

  • Why is the linear, downward trend most consistent and sharp only in the oldest age group?

  • Why are the estimates for the four age groups largely equalized by January 2022, and then diverge again?

Some features of the data simply don’t make sense. Why?

I offer the following answer to all these questions: either we did not remove the healthy vaccinee bias completely and uniformly, or some other bias-related processes have operated. Although we should confidently reject the original, biased estimates, we cannot endorse the new estimates as valid, final substitutes. They do not even qualify as upper boundaries of effectiveness. True effectiveness, if meaningful at all, should be much lower.

Data from Wisconsin

Data from Milwaukee County, Wisconsin is presented in a study by Yuan et al. (preprint) or Atanasov et al. (peer-reviewed version). Their article is among the best manuscripts I have read in my professional career, which does not mean that I agree with a statement such as “COVID-19 vaccines have saved millions of lives.” They did not. Nor do I agree with their claims about the benefits of the booster, as you will shortly see.

That article is exceptional on several counts: 1) independent discovery of the method to remove the healthy vaccinee bias; 2) thorough analyses at a level I have rarely seen (if you bother to read a lengthy appendix); 3) thoughtful discussions of almost every issue I could think about; 4) full exposition of the data. To my surprise, however, the phrase “healthy vaccinee bias” is never mentioned, nor is there any citation of previous work on the topic.

The authors have studied vaccine effectiveness of various doses against Covid death in residents of Milwaukee County, Wisconsin. From their overwhelming amount of data, I was able to extract and compute the numbers in the table below, which is essentially the same kind of data as the ONS data and the same kind of analysis — in two age groups rather than four, over three months (combined). Even after grouping, the data are sparse (a small number of Covid deaths.)

As you can see, the results are peculiar. There was only moderate healthy vaccinee bias in ages 60–79 and no bias at all in ages 80+. What kind of healthy vaccinee bias was accounted for? Why do we observe a bias factor of 1? Following correction, the booster effectiveness in ages 80+ was somewhat higher, not lower, than in ages 60–79. Are these the expected results?

The authors write that “…selection effects, unless controlled for (through our CEMP measure or in another way), can produce large biases in VE estimates.” That’s correct, and we just saw it in the ONS analysis. But for some reason these effects did not seem to operate in their data for elderly booster recipients versus two-dose recipients.

I commend the authors for creative explanations of anomalous results (Appendix, pages 13–14). Apparently, no explanations were needed for the ONS data. The healthy vaccinee bias never vanished in any age group.

An excellent analysis cannot remedy problems that are inherent in the sample. It may be sparse data problem alone or a lot more. Either way, we should have no trust in the new estimates.

Data from Israel

A letter to the editor of the New England Journal of Medicine has recently generated considerable interest in the healthy vaccinee bias. Høeg and colleagues astutely used data on non-Covid mortality from a study of booster recipients in Israel. In those data, biased vaccine effectiveness of 95 percent has turned into null after correction for the healthy vaccinee bias. The data are summarized below.

When a new method is introduced, new questions often arise, which are highly technical. Rather than correcting the bias using counts, rates, or age-adjusted rates, it is also possible to correct the bias by a two-step procedure. First, we fit a multivariable regression model to remove as much confounding as we can, for both Covid death and non-Covid death. Then, we apply the counterfactual-based correction for the “leftover” bias. The results may differ. For instance, in the study from Israel, the second method generated vaccine effectiveness of 57 percent rather than 0 percent.

  • Are both methods valid, in the statistical sense of “unbiased results?”

  • If so, which is preferred from a statistical perspective (say, smaller variance)?

The discussion is far too complicated to be included here. I will just say — for those with advanced statistical knowledge — that the two-step method is a hybrid of two approaches to deconfounding: classical conditioning and counterfactual reasoning. Whether that hybrid is justified, even if valid, is questionable. On the other hand, I am not aware yet of any overt pitfall of the single counterfactual approach, namely, the approach of Høeg and el., and mine.

Differential misclassification bias

Imagine two people who died in a hospital. Patient A received only two doses of a Covid vaccine; patient B received three doses (“up to date”). Suppose Covid was the cause of death in both patients. Nonetheless, in our imperfect world there is misclassification, and one of the two deaths, or both, might be recorded as a non-Covid death. What kind of misclassification might be expected?

It depends on vaccination status.

We may assume that physicians are more reluctant to attribute death to Covid in a vaccinated patient than in an unvaccinated patient “because the vaccines are highly effective.” Still, they do record Covid as a cause of death in vaccinated patients, but they might do so differently for patient A (two doses) versus patient B (three doses). The Covid death of patient B, who is “up to date” on vaccination status, is more likely to be mistakenly recorded as non-Covid than the Covid death of patient A who is not. By analogy, think about patient A as “unvaccinated” and about patient B as vaccinated. Which Covid death is more likely to be missed? The latter.

The phenomenon is called differential misclassification bias, and I have no doubt that it was operating universally for various reasons: the mindset of physicians, PCR testing protocols, and so on. Nonetheless, it is difficult to quantify and remove the bias. When differential misclassification is added to the healthy vaccinee phenomenon, the bias is compounded. To illustrate the point, hypothetically, I used the sparse data from Milwaukee County, Wisconsin.

Suppose 5 percent of 491 non-Covid deaths in ages 60–79 were actually Covid deaths, which were misclassified (because physicians were convinced that the vaccines were highly effective and for other reasons.) Nonetheless, there was differential misclassification as explained above: 6 percent of 239 non-Covid deaths in three-dose recipients (“up to date” vaccinated) were Covid deaths, whereas only 4 percent of 252 non-Covid deaths in two-dose recipients (“unvaccinated”) were Covid deaths.

The computation is shown in the table below. After correcting for both differential misclassification bias and the healthy vaccinee bias, we get only 28 percent effectiveness of the third dose.

The authors of that study acknowledged that estimated effects would be biased if “the degree of undercounting differed systematically between vaccinated and unvaccinated persons,” but they “have no reason to expect that condition (ii) holds.”

As I wrote above, I do not share their belief. There are plenty of reasons to expect differential misclassification, and those of us who followed PCR testing practices in Israel, for example, have ample evidence.

I believe that some day, observational data on the effectiveness of Covid vaccines will be taught in epidemiology courses as prime examples of the healthy vaccinee bias, misclassification bias, other biases, and other distortions.

To summarize:

The true effectiveness of the first booster was short-lived, if meaningful at all.

Peak protection was somewhere between mediocre and zero, and it is impossible to narrow that range. Therefore, all those observational studies of the booster effectiveness were useless.

Taking a new Covid shot every winter has no empirical basis. The burden of proving effectiveness against death squarely rests on public health officials and anything short of a double-blind, placebo-controlled randomized trial is unacceptable. And that applies to the flu shot as well.

[ZH: Then, there is the other problem… as Rand Paul explains…]

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Republished from the author’s Medium account

Tyler Durden
Thu, 09/07/2023 – 12:25

via ZeroHedge News https://ift.tt/3iLWkbu Tyler Durden

Russia Unhappy With Armenia For Hosting Joint US Military Exercises

Russia Unhappy With Armenia For Hosting Joint US Military Exercises

Russia is not happy with its ally Armenia, which is part of the Moscow-led regional Collective Security Treaty Organization (CSTO). There have been intensifying Armenia-Russia tensions after Moscow’s refusal to intervene military on Yerevan’s side in the 2020 Nagorno-Karabakh War and follow-up clashes of 2022.

Armenia’s defense ministry has announced it will host joint military exercises with the United States next week, dubbed the Eagle Partner 2023 drills, which will run September 11-20.

The defense ministry stated the exercises are for the purpose of training for peacekeeping missions. “Within the framework of preparation for peacekeeping missions, units preparing for international peacekeeping operations frequently participate in similar joint exercises and trainings in partner countries,” a statement said.

However, the drills appear small, given the Pentagon has confirmed that a mere 85 American soldiers and 175 Armenians will participate. A statement also said it will not involve heavy weaponry, and will feature members of the Kansas National Guard

The Kremlin has said this is cause for “concern”, with spokesman Dmitry Peskov issuing the following statement Thursday:

“Of course, such news causes concern, especially in the current situation. Therefore, we will deeply analyze this news and monitor the situation.”

Currently there are contingents of Russian peacekeeping forces in the contested border regions between Armenia and Azerbaijan. Since the truce signed on November 10, 2020 – which saw ethnic Armenians booted from historic territory – there have been some 2,000 Russian troops in the region keeping an uneasy peace.

Russia has long had a military base inside Armenia going back to 1991. Thus the tiny caucuses country has long been seen as within Russia’s sphere of influence since Soviet times.

Via BBC

On Thursday, Armenian Prime Minister Nikol Pashinyan once again charged that Azerbaijan is mobilizing troops along the border. “Azerbaijan has massed forces along the line of contact with Nagorno-Karabakh and on the border with Armenia over the last few days,” he said, adding that “the military-political situation in our region has seriously worsened.”

He alleged Azerbaijan is “demonstrating its intention to undertake a fresh military provocation against Nagorno-Karabakh and Armenia.”

Tyler Durden
Thu, 09/07/2023 – 12:05

via ZeroHedge News https://ift.tt/PkDGxXh Tyler Durden

Risk Free Government Debt – Fact Or Fiction

Risk Free Government Debt – Fact Or Fiction

Authored by Michael Lebowitz via RealInvestmentAdvice.com,

Most investors believe that U.S. government debt is risk free. Why shouldn’t they, every economic and financial textbook, media outlet, and bond guru say so?

Did you know it used to be a fact that the earth was flat and “health cigars” were a thing? Obviously, those facts and myths have been disproven, as have many others that seem equally preposterous today. 

Facts, even if we are not 100% confident that they are factual, provide stability in an otherwise chaotic world. Our need for stability allows unproven “facts” to perpetuate.

In this article, we challenge a “fact” that serves as the foundation for pricing all financial assets. However, our concern for the risk-free status of government debt may be very different from where you think we might be going with this article.

Fitch Downgrades U.S. Government Debt

On August 1, 2023, Fitch downgraded U.S. government debt from AAA to AA+. The event occurred almost twelve years to the day that S&P took the same action. The recent downgrade was ridiculous for two reasons.

First, why does the U.S. government have a debt rating? The Treasury and or Fed can print money to ensure its debt never defaults.

Second, if you were to apply traditional credit metrics to the federal government, its rating should have been well below the AAA rating that it had before the downgrade.

Treating the government as we would a company, we find that it has incurred a loss in all but four of the last 40 years. It’s hard to imagine a company could lose so much money consistently, remain in business, be AA+-rated, and be globally considered risk free.

Rating The Government With Traditional Measures

When Fitch calculates the credit rating for a company, it uses the debt service coverage ratio (DSCR), among other fundamental measures of debt, assets, and liquidity. DSCR measures corporate cash flows as compared to debt obligations. Basically, it’s a rough calculation of a company’s ability to pay down its debt.

The government’s DSCR is just under 10. As of 2022, it had debt outstanding of $30.8 billion and $3.1 billion in tax receipts. Remember that tax receipts are like sales for a company and not net profit. The government will spend the $3.1 billion of tax receipts plus a couple more billion to keep the government running. Just the cost of the interest on the debt will eat into a third of the tax receipts.

The graph below shows the growth of the government’s DSCR from 3.0 to 10.0 over the last fifty years. The horizontal lines are NYU Stern School estimates of the appropriate credit rating based on the DSCR for non-financial corporations. As shown, the government’s DSCR would land it firmly in junk bond territory between a B and CCC rating.

A Different Kind of Default Risk

If the government’s debt rating resembles a CCC-rated bond, why do we consider it risk free? The simple answer is that the government and the Fed own the money printing press. If need be, they will print money to fund its debt.

As such, the odds of a government bond investor not receiving their interest and principal in its entirety are zero percent. However, the risks for domestic bondholders and the American people are plentiful when the government and Fed ignore their fiscal and monetary responsibilities.

Government debt has risen significantly, but government interest rate expenses have increased by far less, as shown below.

To accomplish this feat, the Fed has administered near-zero interest rates and, since 2008, has bought nearly $9 trillion, or about a quarter of the total public debt outstanding. Historically, low-interest rates have allowed the Treasury to increase its debt outstanding since 2000 sixfold, while its interest expense has slightly more than doubled over the same period.

The cost of continual deficits, or the risk, is weaker economic growth. While our prosperity is less than it otherwise would be, weaker economic growth contributes to lower interest rates.

Government debt has a negative multiplier. Each dollar of debt the government issues results in negative economic growth and weaker inflation over the long run. Government spending initially boosts economic activity. But over time, the aggregate costs of the debt in terms of interest expenses outstrip the benefits. Further, the capital used by the government likely would have been invested in more productive uses by the private sector.

Hoisington Investment Management On The Negative Multiplier

For more on the topic, we lean on Hoisington Investment Management’s latest quarterly update:

Estimates from econometric studies of highly indebted industrialized economies indicate that the government expenditure multiplier is positive for the first four to six quarters after the initial deficit financing, then turns negative after three years. This implies that a dollar of debt financed federal expenditures will, ‘at the end of the day,’ reduce private GDP.

Regarding how recent surges in deficits will affect economic growth, they have this to say:

After taking into consideration the benefits of the deficit spending, the lagged negative multiplier effects and the way in which debt is being financed, the upcoming deficits are likely to have a negligible, if not contractionary, impact on economic growth this year and next.

Simply, more deficit spending reduces economic growth and inflation, pushing bond yields lower. Instead of punishing fiscal abuse, the government is rewarded with lower yields, albeit at the cost of less economic activity and, therefore, lower tax receipts. 

Such is the magic of exceedingly low interest rates generated by the Fed and the government’s fiscal irresponsibility.

Wicksell Warned Us

As we said, the risk of holding Treasury bonds is not a technical default. The risk is that the methods used to manipulate the interest rate markets to help keep debt affordable harm the nation’s prosperity.

A few years back, we wrote Wicksell’s Elegant Model. The article summarizes Knut Wicksell’s theories concerning the level of interest rates versus the natural economic growth rate.

The following quotes from the article help us appreciate his concepts and why the necessity for lower interest rates presents a significant risk to the populace.

On the other hand, if market rates of interest are held abnormally below the natural rate then capital allocation decisions are not made on the basis of marginal efficiency but according to the average return on invested capital. This explains why, in those periods, more speculative assets such as stocks and real estate boom.

But when short-term market rates are below the natural rate, intelligent investors respond appropriately. They borrow heavily at the low rate and buy existing assets with somewhat predictable returns and shorter time horizons. Financial assets skyrocket in value while long-term, cash-flow-driven investments with riskier prospects languish. The bottom line: existing assets rise in value, but few new assets are added to the capital stock, which is decidedly bad for productivity and the economy’s structural growth.

Summary

Risk free Treasury securities will always pay its investors in full. But the means and schemes used to pay them will detract from economic activity and, ultimately, the prosperity of the nation’s citizens. We think that is quite a risk and one grossly underappreciated!

Tyler Durden
Thu, 09/07/2023 – 11:50

via ZeroHedge News https://ift.tt/XWHIMi4 Tyler Durden

Choked-Up Cooperman “Concerned About The Lefties” Running America

Choked-Up Cooperman “Concerned About The Lefties” Running America

Legendary fund manager Leon Cooperman has never been a man afraid to wear his heart on his sleeve and this morning’s appearance on CNBC may well be the most emotional of all as he reflected on the state of America.

After giving his thoughts on the economy and the market (see below), the octagenarian’s voice began to quiver as he recalled his father’s arrival in America at the age of 12 and his own inglorious rise through the Bronx public school system to business school and finally on to Wall Street, where he says “I had no money.”

Since then “I have made a lot of money, and I’m giving it all back” the self-made billionaire notes as his philanthropy is as legendary as his investing success. But then he cracks…

“You’re concerned about what happens…” the CNBC anchor begins.

Cooperman steps in, holding back tears, “I’m concerned about the lefties,” he says, adding that “they don’t get it.”

“What made me write the book,” he says, remarking on his autobiography “From The Bronx To Wall Street: My Fifty Years in Finance and Philanthropy”, is that:

“I have three terrific grandchildren and I want them to understand the merits of capitalism,” he continued, choking back tears, and “I want them to be capitalists with a heart.”

“I just want to keep the system straight…”

Watch the heart-wrenching comments here that we suspect many can ascribe to…

On the market side of things, Cooperman warns “I don’t expect we see a new high in the market for a long time.” His view is that policymakers have been working against each other.

“We’ve had very bad policy mix and part of the stress this year has been very stimulative to fiscal policy, restrictive to monetary policy.”

“Powell kept interest rates far too low for too long and then raised it very abruptly. The speed of the rise destabilized the system. Plus, he was telling the system the markets were overvalued,” says Cooperman. “I’m highly critical of his performance.”

And sees rates going higher (10Y to 5.50%)

“I don’t think interest rates are too high. The stock market has been going up,” Cooperman notes.

“Ultimately we’ll end up with a recession. It will be caused by either QT, the Fed or the price of oil or the dollar. Right now everything is well behaved.”

Tyler Durden
Thu, 09/07/2023 – 11:30

via ZeroHedge News https://ift.tt/ruYUXtA Tyler Durden

Another Twist On Made By China

Another Twist On Made By China

By Peter Tchir of Academy Securities

I have been incredibly focused on the need for China to sell more of its own brands, if they hope to escape the economic malaise they have slipped into. China’s Next Move.

I’ve been more focused on their attempts to sell their brands, largely into emerging market countries with whom they have large trade deficits with. But it has not been limited to that, and the success and support that Huawei had is something to be watched closely.

Source: Tom’s Hardware

This morning markets are being hit by stories that Chinese agencies will ban the use of certain phones for those agencies.

Breaking into and having success selling into China has always been tough. Will it get even more difficult if China decides that another way to sell more of its brands is to further restrict the selling opportunity of foreign brands within China?

China has some economic difficulties, and their “best” way out is to sell more of their brands (since it will be difficult to convince manufacturers to return in droves).

This twist, of potentially denying domestic markets to “foreign” brands, would presumably increase sales of Chinese brands.

I am convinced that not challenging the Made By China trade, could be biggest risk to investments and corporate strategies in the coming year(s).

Tyler Durden
Thu, 09/07/2023 – 11:15

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WTI Holds Near 10-Month Highs As Total US Crude Stock Hit 1985 Lows

WTI Holds Near 10-Month Highs As Total US Crude Stock Hit 1985 Lows

Oil prices are holding on to recent gains this morning – trading at 10-month highs after API’s reported big crude and gasoline draw  – on the heels of OPEC+ production cuts and Chinese demand.

Additionally, Aramco raised its prices for US and Asian buyers, as Saudi Arabia looks to draw crude out of storage by under-supplying the market to help boost prices.

API

  • Crude -5.2mm (-2.1mm exp)

  • Cushing -1.4mm

  • Gasoline -5.09mm (-1.2mm exp) – biggest draw since March

  • Distillates +310k (-200k exp)

DOE

  • Crude -6.3mm (-2.1mm exp)

  • Cushing -1.75mm

  • Gasoline -2.67mm (-1.2mm exp) – biggest draw since May

  • Distillates +679k (-200k exp)

Confirming API’s report, the official data shows large draws in crude and gasoline inventories and another big decline in stocks at the Cushing hub…

Source: Bloomberg

The Biden admin added to the SPR for the 5th straight week (a still tiny 798k barrels)…

Source: Bloomberg

US Crude stockpiles fell further – to their lowest since early December – and are well below their five-year average for this time of year as the summer driving season ends.

Source: Bloomberg

Including the SPR, this is the lowest level of total crude inventories in America since 1985…

Source: Bloomberg

US Crude production continues to be decoupled (at post-COVID highs) from the rig count…

Source: Bloomberg

WTI was hovering around $87.50 ahead of the official data and held those gains…

“The notion of $100/bbl has evolved from completely unimaginable a few short months ago, to within striking (or hyping) distance today,” analysts including Michael Tran and Helima Croft said in a note.

A $100/bbl figure is “far from a base-case scenario for us, but we have learned to respect that this oil market has evolved into as much of a momentum-based market as it is a fundamentally based one,” they said in the Sept. 7 report.

Of course, this all leaves President Biden with a problem… gas pump-prices are near the highest level ever for this time of year.

Supply is unlikely to increase any time soon, with refiners entering fall turnaround period and with much higher diesel margins ensuring every fuelmaker is prioritizing distillates over gasoline output.

And higher pump-prices are highly correlated with peoples’ perceptions of inflation – good luck Chair Powell

Tyler Durden
Thu, 09/07/2023 – 11:07

via ZeroHedge News https://ift.tt/fQlwcJz Tyler Durden

What Explains the Discourse on 303 Creative?

This series of posts by Prof. Richard Re (Virginia) is based on his draft article, “Does the Discourse on 303 Creative Portend a Standing Realignment,” which is forthcoming in the Notre Dame Law Review Reflection.

In my first few posts, I’ve argued that the legal and factual criticisms leveled against 303 Creative v. Elenis are basically misplaced, or at least greatly overblown. That conclusion raises an important question: why did procedural criticism regarding the case take off? In my paper, I suggest four potential answers.

First, procedure matters. Jurisdiction isn’t just something that you study in Civil Procedure or Federal Courts. True, the “she worries” meme may have been especially popular among the fairly large number of lawyers at large in American society. But general media attention and other evidence suggests that at least some significant number of lay people also understand that courts have limited authority to rule. And those people can become incensed when they believe that that authority is being abused. The discourse on 303 Creative thus shows that the judiciary’s descriptive legitimacy is, to some significant degree, tethered to its observance of jurisdictional principles.

Second, soundbites matter. The idea that the Supreme Court decided a “fake case” or “made up case” has a kind of popular resonance that sophisticated legal ideas don’t, especially when coupled with a larger discourse suggesting shady happenings at the Court. Further, the unfounded “she worries” meme probably couldn’t have happened without real-time, bite-sized mass communication. Commentators and audiences alike were ready to believe and repeat that the justices were simply ignoring obvious legal principles, based on true but misleading snippets of information. The fact that these extreme criticisms can’t survive scrutiny didn’t undermine their transmissibility. For instance, the “she worries” meme garnered quick uptake in a district court order—thereby proving that at least some chambers are attentively listening.

Third, popular views matter. The merits of the Court’s end-of-term rulings were fairly popular, or at least not-that-unpopular, making procedural complications a relatively effective basis to indict the justices. For instance, race-based affirmative action and student debt-relief certainly have their supporters, but polls suggest that they are also nationally unpopular, or close to it. Whether the merits ruling in 303 Creative was unpopular is unclear at present. That uncertainty stems partly from abiding animus toward LGBTQ persons, but it also partly stems from significant support on the left for strong rights of free expression, including rights against compelled speech. Potential procedural problems may thus have been a relatively alarming feature of the Court’s recent behavior.

Fourth, and most interestingly, power matters. In this essay, I have focused on the law as it currently stands. But the law of standing, like all law, is frequently (and appropriately) in motion. Almost a century ago, restrictions on justiciability were associated with the left. Why? Because the Supreme Court was conservative. Later, the Court became liberal—and conservatives took up the task of championing jurisdictional limits. Is the worm turning again? Are we seeing the start of a standing realignment, in which the left becomes markedly more hawkish on standing and some related doctrines?

This last possibility will be the subject of my next and final post.

The post What Explains the Discourse on <i>303 Creative</i>? appeared first on Reason.com.

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Why We Can’t Have Nice Things: Can You Afford Tariffs on Tin Cans?


An illustration of metal cans on a yellow background | Illustration: Lex Villena; Italianestro

You probably don’t think much about tin cans, even when you’re buying one. It’s the product inside the can—soup, beans, maybe hairspray or sunscreen—that seems to matter.

But the humble tin can is both a crucial component of modern, globe-spanning supply chains and a product of them: About half of the metal used to make tin cans in the U.S. is imported from abroad. And that’s why tin cans—more specifically, tinplate steel, the type of metal used to make those cans—are at the center of a behind-the-scenes fight over tariffs that illustrates so many of the problems with protectionist policies.

On one side of that fight is Cleveland-Cliffs, one of just two companies in the U.S. that produces tinplate steel. In a recent petition to the Commerce Department, Cleveland-Cliffs asked for tariffs of up to 300 percent against imported tinplate steel—the products that account for over half of the supply of tinplate in the American economy.

Those tariffs will translate into reduced supply and higher prices, says Tom Madrecki, vice president of supply chain and logistics for the Consumer Brands Association.

“When the tariffs go into effect, they raise the cost of steel, they raise the cost of the packaging,” says Madrecki. The can itself is often the most expensive element of a canned food item, so those prices quickly cause the overall price tag to rise. “You [will] see food prices go up 19 to 30 percent. That translates to 36 to 58 cents per can,” he says.

And while new tariffs might protect some tinplate-making jobs at Cleveland-Cliffs, research suggests the higher prices will cause far greater losses throughout the rest of the economy. The Trade Partnership, a think tank, estimates that the proposed tariffs could cause up to 40,000 jobs to be lost in downstream industries, including blue-collar jobs like can-making and food production. If the steel in their tin cans is suddenly more expensive, food production companies might simply purchase finished—and less-highly-tariffed—cans overseas.

“You’re going to go to the grocery store one day…and you’re going to look at the receipt in disbelief and say, ‘How did this happen?'” says Gerard Scimeca, vice president at Consumer Action for a Strong Economy, a free market group that opposes the tariff proposal. “Well, this is how that happened: You had a company trying to take advantage of our trade policy for personal gain.”

And here’s the real kicker: As a rule, the Department of Commerce doesn’t even consider the potential (and often obvious) consequences of these decisions. The tariff petition process is one-sided and skewed heavily in favor of companies seeking protectionism at the expense of consumers and workers throughout the economy.

Government policy, no surprise, is one of the big reasons why we can’t have nice things.

Further reading for this week’s episode:

Biden Administration Considering New Tariffs That Will Hike Prices for Canned Goods,” by Eric Boehm, Reason.

U.S. Plans New Tariffs on Food-Can Metal From China, Germany, and Canada,” by Yuka Hayashi, The Wall Street Journal

Tinplate Steel Tariffs Will Harm American Consumers and Manufacturing Jobs,” by the Consumer Brands Association

Four Areas for Congress To Exercise Trade Policy Oversight,” by Tori Smith, American Action Forum

Written by Eric Boehm; produced and edited by Hunt Beaty; mixing by Ian Keyser; fact-checking by Katherine Sypher.

The post <em>Why We Can't Have Nice Things</em>: Can You Afford Tariffs on Tin Cans? appeared first on Reason.com.

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