Month: February 2024

After Amazon and Facebook reported blowout earnings, sending their stocks up double digits after hours and soothing the bitter taste left from the recent disappointing earnings from MSFT, TSLA and GOGL, everyone was looking at the last Mag 7 of them all, the (formerly?) biggest company in the world, Apple which however left a bit to be desired, because while the iPhone maker reported both revenue and EPS which beat (iPhone sales actually beat this time while Mac, iPad and Wearables all missed), the company’s Greater China revenue disappointed, coming in below estimates, with Service revenues also disappointing.

Here is what the company reported for fiscal Q1:

• EPS $2.18 vs. $1.88 y/y, beating estimates of $2.11
• Revenue $119.58 billion, +2.1% y/y, beating estimates of $117.97 billion
  • Products revenue $96.46 billion vs. $96.39 billion y/y, beating estimates $95.14 billion
  • IPhone revenue $69.70 billion, +6% y/y, beating estimates of $68.55 billion
  • Mac revenue $7.78 billion, +0.6% y/y, missing estimates of $7.9 billion
  • IPad revenue $7.02 billion, -25% y/y, missing estimates of $7.06 billion
  • Wearables, home and accessories $11.95 billion, -11% y/y, missing estimates of $12.02 billion
  • Service revenue $23.12 billion, +11% y/y, missing estimates of $23.37 billion
  • Greater China rev. $20.82 billion, -13% y/y, missing estimates of $23.5 billion
• While Revenue of nearly $120BN finally grew from a year ago, ending a period of 4 quarters of decline, it was still down from two years prior.

• Gross margin $54.86 billion, +9% y/y, beating estimates $53.56 billion
• Cash and cash equivalents $40.76 billion, above estimates  $38.81 billion

While the numbers were mixed, the good news is that AAPL managed to avoid a 5th consecutive quarter of annual revenue declines (it would have been the first time since the company’s existential crisis in the 1990s).

Commenting on the quarter, CEO Tim Cook said that “today Apple is reporting revenue growth for the December quarter fueled by iPhone sales, and an all-time revenue record in Services. We are pleased to announce that our installed base of active devices has now surpassed 2.2 billion, reaching an all-time high across all products and geographic segments. And as customers begin to experience the incredible Apple Vision Pro tomorrow, we are committed as ever to the pursuit of groundbreaking innovation — in line with our values and on behalf of our customers.”

CFO Luca Maestri chimed in that “our December quarter top-line performance combined with margin expansion drove an all-time record EPS of $2.18, up 16 percent from last year. During the quarter, we generated nearly $40 billion of operating cash flow, and returned almost $27 billion to our shareholders. We are confident in our future, and continue to make significant investments across our business to support our long-term growth plans.”

Despite the optimistic rhetoric, the rumors about the company’s weakness in China turned out to be true, and revenues there missed estimates of $23.5BN badly, the company generating just $20.82BN in sales in what until recently was the biggest growth market, confirming action by Beijing to shun the western cell phone. Here is the geographic breakdown of Apple’s sales…

… and here is the YoY change. China’s 13% drop sticks out like a sore thumb.

This shouldn’t be a surprise: for months, Apple watchers have been beating the drum that the iPhone is underperforming in China, citing strong growth by rivals like Huawei, Xiaomi and others, combined with some government agencies banning the use of the device at work. Apple pushed back considerably on its last earnings call against that idea; but it turns out it was lying. Today, we learned that sales in China actually fell nearly $3 billion in the critical holiday quarter. That’s the lowest China 1Q revenue for Apple since 2020!

CFO Luca Maestri had this to say about the plunge in China: “There is a decline. We are not happy with the decline but we know China is the most competitive market in the world…We continue to see significant opportunity for us in China in the long term.”

Judging by the move in AAPL stock after hours, the market disagrees.

Turning to revenue by product category, iPhones beat and… that was it: all other categories disappointed:

• IPhone revenue $69.70 billion, +6% y/y, beating estimates of $68.55 billion
• Mac revenue $7.78 billion, +0.6% y/y, missing estimates of $7.9 billion
• IPad revenue $7.02 billion, -25% y/y, missing estimates of $7.06 billion
• Wearables, home and accessories $11.95 billion, -11% y/y, missing estimates of $12.02 billion

While it is notable that the iPhone 15 grew, the context is critical – the iPhone 14 Pro before it slumped considerably because of supply-chain hiccups in China (i.e. base effect). That issue wasn’t replicated this year, plus the iPhone 15 Pro was a much bigger update. Still, the pick up in iPhone revenues was at best modest as the chart below shows.

Mac revenue was the biggest product miss (revenue was -1.6% or so off of estimates). Computer sales have been challenged for over a year now as consumers were increasingly cost sensitive, and many had already bought new computers during the pandemic. Industry analyst IDC expects 2024 to bring long-awaited growth in computer sales.

Commenting on the disappointing results, Tim Cook said the decrease in Wearables, Home and Accessories was due to a difficult comparison to new products released in 2022. That included the first Apple Watch Ultra and a new Apple TV. The 2023 updates in the category were minor — and Apple dealt with a few days of halted sales in the US due to the patent fight with Masimo Corp.

And then there was service revenues, which despite rising to a new all time high of $23.1BN (up 11.3%) missed estimates of $23.4BN.

Still, according to CFO Luca Maestri, Apple has well over one billion paid subscriptions, more than double what it had four years ago, across its ecosystem (this includes first and third-party subscriptions).

Putting it all together, despite the solid iPhone results and profit beat, investors are disappointed by the China numbers, with the stock falling as much as around 4% so far after-hours, the loss accelerating during the call when the company said that during the March quarter it expected total and iPhone revenue to be similar to previous years when factoring in that 2Q revenue last year came in about $5 billion higher due to certain conditions (i.e., inventory replenishment). The company also expects gross margins between 46%-47% for Q2, as well as operating expenses of $14.3BN-$14.5BN, and expects service business the show double digit growth similar to the current quarter. Finally, CFO Maestri said services in the March quarter will be negatively impacted by foreign exchange rates and that comparisons for the March quarter are more challenging than in other quarters (translation: take last Q2 and slash $5BN due to “pent up” demand for iPhone in the March 2023 quarter which obviously won’t be here this time).

Not surprisingly, AAPL’s stock is doing the worst of all the megatechs reporting today, with both AMZN and META surging after their repective reports, and only AAPL sliding.

Trump special prosecutor Nathan Wade will avoid testifying about his alleged relationship with Fulton County District Attorney Fani Willis.

Wade notably filed for divorce from his stay-at-home wife of 20 years, Jocelyn Wade, on Nov. 2nd, 2021, the day after Fani hired him as a special prosecutor in the Trump case, from which he earned more than $650,000 in taxpayer dollars – which he used to take Fani on lavish vacations, according to claims from Trump co-defendant Michael Roman and corroborated by receipts revealed in the divorce case.

Cobb County Superior Court Judge Henry Thompson signed a temporary settlement in the divorce case on Jan. 30, then canceled a hearing scheduled for Jan. 31 in which Wade was expected to testify about his relationship with Willis.

The two have been accused of being in an “improper” relationship, with Trump and other Republicans arguing that the case has been a politically-driven prosecution from the start, meant to derail the former president’s 2024 reelection bid.

Fani was also subpoenaed to testify on Jan. 31 after she was unsuccessful in quashing it. Judge Thompson rejected her attempt, however the settlement means that she will dodge testimony as well.

Meanwhile, Fulton Superior Court Judge Scott McAfee has ordered Willis to respond to allegations of having an “improper” relationship with Wade by Friday, and a hearing has been scheduled for mid-February.

As the Epoch Times reports further, an attorney representing Michael Roman, one of the co-defendants, filed a motion on Jan. 8 to dismiss the Fulton County election interference case, alleging misconduct on the part of Fulton County prosecutors.

Mr. Roman’s attorney, Ashleigh Merchant, alleged in the 100-plus page filing that Ms. Willis was engaged in an “improper, clandestine personal relationship” with Mr. Wade and of “profiting significantly” from the relationship at the expense of taxpayers.

Court documents show that Mr. Wade paid for Ms. Willis to fly with him to two different cities.

Ms. Merchant also accused Ms. Willis of using funds meant for clearing a pandemic-era backlog of cases in Fulton County to pay Mr. Wade a large sum of money.

Documents show Mr. Wade has been paid at a rate of $250 per hour for his involvement in the case, or around $650,000 in total.

Mr. Roman is seeking to disqualify Ms. Willis and her office from the election interference case, per his attorney’s Jan. 8 filing.

President Trump has also made similar demands, saying that both Ms. Willis and the case have been “totally compromised” and the case against him should be dismissed.

Prosecutors have not yet filed a response to Ms. Merchant’s motion, although they have said they intend to.

The Fulton County Audit Committee has also asked Ms. Willis to address the “improper” relationship allegations.

Bob Ellis, the Fulton County Commissioner, called on Ms. Willis in a Jan. 21 letter to provide explanations, including regarding payments to Mr. Wade, by Feb. 2.

Ms. Willis faces an investigation in the Georgia Legislature over alleged misconduct, while a Georgia lawmaker recently filed a resolution to impeach Ms. Willis, alleging various acts of “malfeasance, tyrannical partiality, and oppression.”

Accusing Ms. Willis of suffering from “Trump Derangement Syndrome,” State Rep. Charlice Byrd, a Republican, alleged that Ms. Willis used her office not to pursue justice but for political gain.

Ms. Byrd said in a Jan. 26 statement that she has introduced H.R. 872, a resolution to vote on impeachment charges against Ms. Willis.

The resolution calls Ms. Willis’ indictment “the severest case of gross abuse of discretion” while alleging that the Fulton County DA “grossly violated” her oath of office, in which she swore to be impartial.

Ms. Byrd’s impeachment resolution also accuses Ms. Willis of engaging in an “inappropriate” and “unethical” relationship with Mr. Wade while alleging that she profited from the relationship.

There are a total of 22 articles of impeachment in the resolution, each an alleged violation of Georgia Code 16-10-1.

While the resolution doesn’t go into detail about the allegedly political nature of the prosecution, similar claims have been made by House investigators.

The Georgia Senate adopted a resolution in a Jan. 26 floor vote that establishes a committee to investigate the various misconduct allegations against Ms. Willis.

The alleged misconduct includes ongoing expenditure of “significant public funds for the purpose of hiring a special assistant district attorney with whom District Attorney Willis had, and may yet have an ongoing romantic relationship,” the Senate resolution reads.

If such a relationship were proven to exist, it would amount to a “clear conflict of interest and a fraud upon the taxpayers of Fulton County and the State of Georgia,” potentially leading to Ms. Willis’ recusal, delays in the trial against President Trump, the appointment of a special prosecutor, and disciplinary actions, per the resolution.

Ms. Willis’ office did not respond to a request for comment.

In prior remarks regarding the scandal, however, she suggested racism was the motivation behind the scrutiny.

Authored by Lee Taylor of Uncommon Sense via the Daily Sceptic (emphasis ours),

Are we in the final stages of mainstream media dominance? Over the last 15 years the market has certainly shifted – the mainstream’s sluggish adoption of nascent technology and that technology’s ever expanding reach has opened the door to new media. 

It takes a long time for a whale washed up on a beach to decay to just bones. Scavengers pick over the rotting carcass for years before it finally disappears. One could argue that since 2020 the decay of mainstream media has quickened in pace. The mainstream media’s bias and lack of integrity is unravelling. Whether it was the failure of the mainstream to interrogate the Covid narrative, the one-sided and often mistaken coverage of the BLM protests after the murder of George Floyd or the lack of interest and then cover up of a certain laptop, perception of impartiality is difficult to justify.

What has stopped mainstream media asking the most pertinent and relevant questions? Recent events highlight either a lack of journalistic integrity or, more concerning, ideological capture. The New York Times is no longer the paper of record, seemingly reporting Hamas press releases verbatim. The once great BBC seems to be more interested in teaching about white privilege, while the Associated Press is now the communications arm of the climate change lobby.

Dissenting opinions, alternative and independent views and traditional values are being deconstructed to an alarming degree. This has left many people feeling unseen and de-prioritised in the cultural conversation.

Reading, viewing and listening figures are all down across the mainstream. The public is departing the mainstream in droves. But the question is, where are they going? 

Figures show they are going to new media. Joe Rogan is now arguably the world’s most powerful journalist; his popularity is largely due to him offering long form content where viewers and listeners get a better understanding of the issues than they would from clickbait headlines or snippets. Matt Taibbi, an American author, journalist, podcaster and former Contributing Editor for Rolling Stone, broke the Twitter files on his Substack, and Dr. Carl Heneghan and Dr. Tom Jefferson, two medical researchers whose Covid advice was different from the Government’s, can review and respond to the U.K.’s Covid Inquiry on Substack.

Funding

Traditionally the mainstream was funded by advertisers. Brands would place ads for their products and services in the pages of publications and pay for the privilege. Potential customers would see the ads and buy the products or services. With the digitalisation of the news this moved to website ads and then led to the centralisation of ad inventory. This all worked out quite nicely for everyone. But then…

Independent news media represent a double threat to the established mainstream. Firstly, the mainstream is haemorrhaging readers, viewers and listeners to them; advertisers pay per impression in the digital world, thus less impressions mean less advertising revenue. Secondly and more dangerously, alt-media sites are subverting the mainstream media’s control of the narrative.

Wiser men have written about the censorship industrial complex, a phrase coined by Matt Taibbi and Michael Shellenberger; it is a growing, international, multi-billion dollar sector. The establishment has a number of tactics to censor and thwart independent publishers. Some are easy to spot, while others are more covert. YouTubers and podcasters can simply be taken off the platforms: Jordan Peterson has had a number of episodes taken off YouTube and Dr. Robert W. Malone has been banned completely. It is a little more difficult to impede independent news publishers. One way is for the Global Disinformation Index (GDI) and other NGOs like NewsGuard and Graphika to deem alt-news websites to be ‘unsafe’ because they publish ‘misinformation’ or ‘disinformation’ – often relying on ‘fact-checkers’ funded by these websites’ mainstream rivals – thus removing their ability to sell advertising space. Media Matters monitors media outlets for “conservative misinformation” then notifies activist journalists so they can take “direct action against offending media institutions”. They sometimes do this in nefarious ways – as revealed in the recent Musk lawsuit. 

The big social media platforms offer a new way to connect with users. But with the exception of X, they do not tolerate free speech. Calling a man dressed up as a woman a man will get you banned on Facebook and Instagram quicker than you can say “XY”. YouTube has what it is calling a ‘hate speech’ policy that is applied so arbitrarily that it is near impossible to guess what content it will tolerate and what will be removed because it’s ‘hate speech’. 

Twitter 1.0 said it was not shadow-banning but the Twitter Files revealed that was clearly a lie. Twitter 2.0 is better than Twitter 1.0, but it still shadow-bans some content under a policy described as “freedom of speech, not reach” and we know Google tweaks its algorithms to promote content it approves of and suppress content it doesn’t.

The mainstream media and their backers are doing all they can to suppress and demonetise independent media creators. 

Independent media funding 

Yet against all odds, independent media channels are thriving, attracting millions of page views, viewers and listeners.

Without access to advertisers and with the sword of Damocles hanging over them, independent content creators are forced to rely on donations from supporters and fans or premium content subscription models. 

Independent media are what they say, independent, and so trying to get them all in one place is a bit like herding cats. However, there is now a way to seamlessly advertise across all independent publishers. Through my agency’s new advertising platform, you can simultaneously reach the readers of the Daily Sceptic or Spiked, access viewers of Triggernometry or Real America’s Voice, or sponsor the Zero Hedge Debates. 

Uncommon Ad Space, a new advertising platform my agency has created, represents a unique opportunity to promote your brand to a largely untapped audience of millions of fiercely loyal, independent thinkers and heavy purchasers. The mission is to bring independent media outlets together in one place so brands and advertisers who want to reach this market can do so easily. Not only can brands get access to a rapidly growing audience, but they can also help support independent content creators and circumvent efforts by the censorship-industrial complex to demonetise them. 

As the utopian globalist ideologues abandon everything of value, beauty, truth, justice and genuine merit, they create huge opportunities for independent websites and content creators. New media are the future. Old media sites are rapidly piling up in the dustbin of history. 

 Lee Taylor is the Managing Director of marketing agency Uncommon Sense. You can contact him on email here. Find Uncommon Ad Space on X. The Uncommon Ad Space website can be found here.

The largest refinery in the US Midwest has been shut down after a power outage hit the facility Thursday afternoon.

BP’s Whiting refinery, located in Whiting, Indiana, is the Midwest’s largest refinery and largest globally for the British multinational oil and gas company. It can process 440,000 barrels of crude oil daily. 

BP issued this statement about the incident: 

“BP has notified the City of Whiting that they are in the process of safely shutting down the refinery after a suspected power outage.

“BP has activated their emergency response team and evacuated refinery office buildings out of an abundance of caution. Local fire departments are assisting with the evacuation by closing nearby roads. The safety of refinery staff and the community are our highest priority for the Whiting BP Refinery.” 

Commodity analyst Giovanni Staunovo posted on social media platform X, “As a result of this power outage, additional product is being burned, which will cause additional flaring of the stacks. This flaring is a safety release to burn off the extra product and is a normal process during an event. BP is working to resolve the power outage as quickly as possible.” 

The City of Whiting has been notified of a power outage at the BP Whiting Refinery property which has affected power to the Refinery. As a result of this power outage, additional product is being burned which will cause additional flaring of the stacks. This flaring is a safety…

— Giovanni Staunovo🛢 (@staunovo) February 1, 2024

Images of the flaring have been published on X. 

BP Whiting refinery as of 15 mins ago showing heavy flare activity, major power loss. Likely looking at a couple of weeks of impacted production- very early, however. pic.twitter.com/k9ecj1hVXo

— Patrick De Haan ⛽️📊 (@GasBuddyGuy) February 1, 2024

The bp plant in whiting Indiana is being evacuated. #whitingindiana #bp pic.twitter.com/IKHema2tfQ

— Childhood Matters (@MamaearthDesign) February 1, 2024

BREAKING: BP Whiting Refinery in Indiana has power outage resulting in emergency flares releasing everything so there is isn’t an explosion. Regional News Source’s Paul Goddard reports BP lost control and had to “dump the chemicals.” Basically…uncontrolled chemical release. pic.twitter.com/o19SCUM4Qc

— Jordan (@JordanChariton) February 1, 2024

Gasoline futures have not reacted to the news of the refinery closure. 

There is no word on refining disruptions and or the cause of the power outage.

With The Magnificent 7 stocks getting clubbed in recent days after disappointing earnings from TSLA and GOOGL and meh results from MSFT, hope was high that Amazon can save the world. So here’s the good news: a top- and bottom-line beat, and despite some weakness in AWS revenues (which came in just below estimates) the stock is surging after hours.

Here is what Amazon reported for Q4:

• EPS $1.00 vs. 94c q/q, beating estimates 78c
• Net sales $169.96 billion, +14% y/y, beating estimates of $166.21 billion
  • Online stores net sales $70.54 billion, +9.3% y/y, beating estimate $68.91 billion
  • Physical Stores net sales $5.15 billion, +3.9% y/y, missing estimates of $5.23 billion
  • Third-Party Seller Services net sales $43.56 billion, +20% y/y, beating estimates of $41.96 billion
  • AWS net sales $24.20 billion, +13% y/y, missing estimates of $24.22 billion
  • North America net sales $105.51 billion, +13% y/y, beating estimates of $102.88 billion
  • International net sales $40.24 billion, +17% y/y, beating estimates of $38.96 billion
  • Third-party seller services net sales excluding F/X +19% vs. +24% y/y, beating estimates of +15.9%
  • Amazon Web Services net sales excluding F/X +13% vs. +20% y/y, beating estimates of +11.8%
• Operating income $13.21 billion vs. $2.74 billion y/y, beating estimates of $10.49 billion
• Operating margin 7.8% vs. 1.8% y/y, beating estimates of 6.17%
  • North America operating margin +6.1% vs. -0.3% y/y, beating estimates +4.12%
  • International operating margin -1% vs. -6.5% y/y, beating estimates -1.27%
• Fulfillment expense $26.10 billion, +13% y/y, beating estimates of $25.2 billion
• Seller unit mix 61% vs. 59% y/y, estimate 59.5%

Q1 Guidance:

• Revenue between $138.0 billion and $143.5 billion, or up 8% and 13%; The median consensus estimate was $142BN so the upper end is stronger if not the lower or average.
• Operating Income between $8.0 billion and $12.0 billion, also beating the Wall Street estimate of $9.1 billion.

​Bottom line: the company beats expectations on both revenue ($169 billion), EPS ($1.00 vs 78c) and operating income ($13.2 billion). Amazon Web Services, the company’s profit driver, posted revenue in line with analyst estimates, but investors are likely to be heartened by much higher than expected operating income from the cloud division.

Commenting on the quarter, CEO Andy Jassy said that “what we’re most pleased with is the continued invention and customer experience improvements across our businesses. The regionalization of our U.S. fulfillment network led to our fastest-ever delivery speeds for Prime members while also lowering our cost to serve.” As for AWS, the “continued long-term focus on customers and feature delivery, coupled with new genAI capabilities like Bedrock, Q, and Trainium have resonated with customers and are starting to be reflected in our overall results.” Also Amazon’s Advertising services “continue to improve and drive positive results.”

Taking a closer look at profits, it was a bit of a mixed bag, with AWS reporting profit margins which dipped modestly to 29.61% from 30.23% in the previous quarter, if solidly ahead of the 24.33% reported a year ago and also beating estimates (thus offsetting the negative taste from weakness in revenue growth which disappointed modestly). As for the retail operations, North America margins posted a solid improvement, rising to 6.1% from -0.3% a year ago, and beating estimates of 4.1%, while International margins dipped modestly to -1.0% from -0.3% a quarter ago, but better than that -1.3% expected.

​As Valoir Analyst Rebecca Wettemann writes in a note after earnings, with AWS’s lead in traditional cloud infrastructure fading, its ability to compete against Microsoft and Google in offering AI services is a critical consideration for investors. As such, she’ll be watching for how Amazon speaks about customer growth in Bedrock, a service that allows AWS customers to tap into large language models.

Combining the modest drop in AWS and international margins with the continued improvement in North America means that the blended profit margin remained at 7.8%, the highest since early 2021.

And speaking of profit, CEO Andy Jassy is keeping a tight hold on expenses. Spending on marketing and sales was basically flat. General and administrative expenses fell by about 10%. And technology and content spending — which includes salaries for software developers as well as servers and other hardware — rose just 6%, down from 38% growth entering this year.

Also of note: during the last year, Amazon laid off about 27,000 corporate employees. Cuts have continued in 2024, if more quietly, falling on entertainment subsidiaries and its studios business. CFO Olsavsky said that “I don’t see it as a year of efficiency type thing. It’s more we are going to continue to be careful on what we invest in,” holding the line on headcount in some areas while continuing to invest in others.

Looking at the company’s guidance, Amazon expects revenues to be between $138.0 billion and $143.5 billion, or to grow between 8% and 13% compared with first quarter 2023. Taking the average of the range suggests revenue growth just around 10% YoY, which while solid, would be the lowest in the past year. Then again the company has a history of sandbagging results so investors will likely ignore this.

Amazon also said that operating income is expected to be between $8.0 billion and $12.0 billion, compared with $4.8 billion in first quarter 2023, and stronger than the Wall Street estimate of $9.12BN.

“The bottom line is that despite all the concerns plaguing the tech sector, Amazon has managed to perform surprisingly well,” said Jesse Cohen, a senior analyst at Investing.com. “The results indicate that ongoing cost-cutting measures are having a positive impact on Amazon’s business prospects.”

The cheerful view was clearly shared by the street, with Amazon stock soaring about 10% after hours to $174 after closing at $155 yesterday, and not far from the company’s record high of $188.65 hit in the summer of 2021.

 

Authored by Victor Davis Hanson via American Greatness,

Iranian-backed militias have attacked American installations and forces in Syria, Iraq, and Jordan some 170 times.

Ostensibly, these terrorist groups claim they are hitting US forces to coerce America into dropping its support of Israel and demanding a cease-fire in the Gaza war.

In reality, these satellite terrorists are being directed in a larger effort by Iran to pry the US. out of the Middle East, in the manner of the 1983 Marine barracks bombing.

That way, Iran will be free to fulfill its old dream of becoming a nuclear shield for a new Shiite/Persian terrorist axis from Tehran to Damascus to Beirut to the West Bank and Gaza—surrounding Israel and intimidating the Gulf regimes and more moderate states like Jordan and Egypt into concessions.

These Iranian appendages have made a number of unfortunately correct assumptions about America in general and the Biden administration in particular.

One, after the recent serial humiliations of the flight from Afghanistan, the passivity of watching a Chinese spy balloon traverse with impunity the continental United States, the mixed American signals on the eve of the Ukraine war, the troubled Pentagon’s recruitment and leadership lapses, and the destruction of the US southern border, both Iran and its surrogates feel that the United States either cannot or will do much of anything in response to their aggression.

They see the U.S. military short thousands of recruits, its leadership politicized, its munition stocks depleted by arms shipments to Ukraine and Israel, and the massive abandonment of weapons in Kabul.

Two, they view Joe Biden’s serial appeasement as a force multiplier of these perceptions of American weakness. After entering office, the Biden administration begged for a renewed Iran deal from a preening theocracy. It sought to ensure calm by delisting the Houthis from global terrorist designations and sending hundreds of millions of dollars to Hamas and radical Palestinians to buy good behavior.

Biden may have agreed that Iran was the spider in the center of the Middle East Islamic terrorist web, but only thereby to win over it with bribes such as lifting embargoes and sanctions to ensure an Iranian windfall of $90 or more billion in oil sales revenue.

Biden greenlighted a bribery payment of $6 billion to Iran to return American hostages, thereby ensuring more will be taken. It loudly distanced itself from the Netanyahu government. The gulf encouraged radicals to believe they could coerce Israel into accepting radical Islamic states on the West Bank and Gaza.

Three, after hitting American stations and bases 170 times and seeing little sustained, much less disproportionate, responses, Iran and its satellites now feel they are winning proxy wars with the US.

They have all but shut down the Red Sea as an international shipping route—damaging Europe, Egypt, and Israel, which all depend on Red Sea commerce for vital imports and exports.

Iran has forced Biden to publicly alienate the Netanyahu government and push a ceasefire down Israel’s throat. And it has helped to spark international pro-Hamas protests throughout Europe and the US that timid and compliant left-wing governments fear could lose them close elections.

But most damaging are administration spokesmen who mouth the same empty script after each serial attack:

1) The US will respond at the time and place of its own choosing.

2) The US finds no direct evidence of Iranian involvement, although it clearly has supplied the attackers;

3) The US does not wish a wider war and has no plans to attack Iran itself.

Translated to our enemies, it means an 80-year-old non-compos-mentis president is in no position to prevent, much less win, a theater-wide Middle East war that his own serial appeasement has now nearly birthed.

Biden and the Democratic Party know, as National Security Advisor Jake Sullivan pointed out just prior to the October 7 attacks on Israel, that the administration inherited a deterred and quiet Middle East. And then it blew up on their appeasing watch.

Now they are terrified of a theater-wide conflict breaking out during an election year—a fact known to all of America’s Middle East enemies.

Biden and company have forgotten the ancient wisdom that preparing loudly only for peace guarantees war. To prevent war, it should return to oil sanctions on Iran, embargo its banking transactions, slap a travel ban on Iran and its allies, cut off all aid to Hamas and the West Bank, and restore a true terrorist designation for the Houthis.

US officials must stop aimlessly babbling. If the administration must speak, Washington should do so by conveying disproportionality and unpredictability. And if, and when, America were to strike, it should do so in silent and devastating fashion.

When serially attacked, loudly responding that we will only proportionally strike back and wish no wider war will only ensure a big, ugly one.

Meta CEO Mark Zuckerberg and other social media executives were grilled over the issue of child sexual exploitation on their platforms.

In a Wedesday hearing of the Senate Judiciary Committee, the executives from Discord, Meta, Snap, TikTok and X were asked to explain the safety features of their respective apps.

“Mr. Zuckerberg, you and the companies before us … have blood on your hands. You have a product that’s killing people,” said committee ranking member Lindsey Graham (R-SC).

“These companies must be reined in, or the worst is yet to come,” he added.

Sen. Ted Cruz then shocked the audience, grilling Zuckerberg over Meta-owned Instagram connecting pedophiles with child sexual exploitation material – with the company even flagging certain content and then letting people continue on to it.

Watch:

Ted Cruz just confronted Zuckerberg on the Instagram Wall Street Journal story that exposed that social media was connecting pedophiles with pizza code words and Instagram’s own algorithm was helping pedophiles find content.
When Ted showed Zuckerberg Instagram’s warning screen… pic.twitter.com/nTwf7LxkXz

— Green Lives Matter (@Ultrafrog17) January 31, 2024

Zuckerberg issued a rare apology to the families and parents of children who have been harmed by his platforms.

“I’m sorry for everything you have all been through,” he said, awkwardly. “No one should go through the things that your families have suffered, and this is why we invest so much, and we are going to continue doing industry-wide efforts to make sure no one has to go through the things your families have had to suffer.”

The day before the hearing, Sen. Dick Durbin (D-IL), chair of the Senate Judiciary Committee, said in a floor speech that the focus of the hearing was on how technology has failed to protect children from sexual exploitation online – calling on fellow senators to support a legislative proposal, the Strengthening Transparency and Obligations to Protect Children Suffering from Abuse and Mistreatment Act of 2023 (STOP CSAM Act).

It would provide support for victims, enhance accountability, and increase transparency for online platforms.

More via the Epoch Times;

In the committee’s introduction to the hearing, Mr. Durbin also referenced previous warnings about social media from The National Center on Sexual Exploitation. Five tech companies, including social media platforms Instagram, Twitter, Snapchat, Roblox, and Reddit, were included on its annual “Dirty Dozen“ list for their alleged roles in facilitating child sexual exploitation.

In his speech, Mr. Durbin highlighted reports of offenders using these platforms to target children and trade child sexual abuse material. He also stressed the importance of holding these tech companies accountable for the harm inflicted upon children and urged his fellow senators to demand answers during the hearing.

The lawmaker concluded his speech by urging Congress to update Section 230 of the Communications Decency Act, which currently shields the tech industry from accountability. He argued that adapting the law is essential to hold tech companies responsible for their actions and to protect children from exploitation.

Mr. Durbin also reaffirmed his commitment to working towards legislation that safeguards children and holds the tech industry accountable for its role in child exploitation.

“Everyone needs to do their part to stop this gross injustice, and that includes Congress finally enacting legislation that holds the tech industry accountable when it fails to protect children,“ Mr. Durbin said. ”That is why the Judiciary Committee will hold its landmark hearing tomorrow. And it is why I will continue working to bring the STOP CSAM Act and other critical bills that would protect our kids to the Senate floor.”

‘We’re Gonna Die Waiting’

Mr. Graham questioned Discord’s CEO about his support for the STOP CSAM Act and each of the other bipartisan bills before the committee, but on each occasion, the executive was unwilling to offer support.

“If you wait on these guys to solve the problem, we’re gonna die waiting,” Mr. Graham said after questioning executives about the legislation.

During her opening statements, Linda Yaccarino, the CEO of X, expressed support for the STOP CSAM Act. However, when later questioned by Mr. Durbin about supporting other pieces of legislation, she was unable to confirm her company’s support.

Near the end of his questioning, Mr. Graham again reiterated his frustration with the social platforms and their leadership, saying: “I am tired of talking. I’m tired of having discussions. We all know the answer here … Stand behind your product. Go to the American courtroom and defend your practices. Open up the courthouse door. Until you do that, nothing will change. These people can be sued for the damage they’re doing.”

The lawmaker said he believes that Americans who have been wronged due to social media platforms’ efforts to further their business should have “somebody to go to to complain.”

“There is no commission to go to that can punish you. There’s not one law in the book because you oppose everything we do, and you can’t be sued. That has to stop folks … Because for all the upside [of social media] the dark side is too great to live with. We do not need to live this way as Americans.”

Authored by Kevin Stocklin via The Epoch Times (emphasis ours),

News Analysis

While former President Donald Trump appears to be cruising toward the GOP nomination, and with a polling lead over incumbent President Joe Biden in key swing states, Republicans will likely face a much steeper climb in the general election than they realize.

Fundamental changes in state election laws, coupled with an alliance of left-wing federal, corporate, financial, and nonprofit entities, have handed the Democratic Party advantages that the GOP may be unable to overcome.

In the decades before 2020, the Republican National Committee (RNC) and Democratic National Committee (DNC) machines each had their own unique strengths: The RNC had the money and the DNC had the troops.

As noted in the book “The Victory Lab,” an analysis by political journalist Sasha Issenberg, Republicans excelled at fundraising and spent heavily on messaging through paid television, radio, and online ads. The DNC, with its voters often concentrated in urban centers, called on its foot soldiers, most notably students and union leaders, to go door-to-door and stir up support.

In 2020, the landscape shifted in the wake of two events: The COVID-19 pandemic and the death of George Floyd in police custody. A narrative emerged that existing state voting laws were hazardous to public health and racist and that they had to change.

The 2020 ‘Shadow Campaign’

In a laudatory 2021 article in Time titled “The Secret History of the Shadow Campaign That Saved the 2020 Election,” author Molly Ball detailed a “well-funded cabal of powerful people, ranging across industries and ideologies, working together behind the scenes to influence perceptions, change rules and laws, steer media coverage, and control the flow of information.”

While praising the effort, Ms. Ball said that the actors “were not rigging the election; they were fortifying it.”

The “conspiracy,” as Ms. Ball described it, included DNC operatives, union leaders, tech and social-media companies, Wall Street bankers, and a network of nonprofit donor funds that pooled hundreds of millions of dollars to finance “armies of poll workers and got millions of people to vote by mail for the first time.”

While the coalition’s purpose, ostensibly, was “saving democracy,” the overriding goal was to keep President Trump from winning a second term.

And the “well-funded cabal” appears to be gearing up for a repeat performance in 2024, with a few new twists.

The DNC and groups allied with them rely on a five-part strategy to ensure that President Trump didn’t then and will not now get a second term.

That strategy includes intense legal pressure on state election officials to loosen voter integrity laws, a data nerve center that contains personal profiles of voters to predict how they will vote, an alliance of left-wing foot soldiers to bring out Democratic votes in key swing states, a collection of groups capable of bringing violence and mass unrest to cities and towns if called upon, and a network of financing vehicles to fund it all.

The first order of business, once the “well-funded cabal” was assembled, was to change state election laws.

Rewriting Election Rules

Following the mantra to “never let a crisis go to waste,” a nationwide campaign of DNC-sponsored lawsuits forced many states, even some with Republican governors, to drop what had once been standard voter integrity practices.

“That effort involved voiding basic security protocols on election procedures, including absentee ballots, and pushing for the equivalent of all-mail elections, which would give their activists a free hand in pressuring, coercing, and influencing voters in their homes in ways they are unable to do in polling places,” political analysts John Fund and Hans von Spakovsky wrote in their 2021 book titled “Our Broken Elections.”

“To force these changes, they ended up filing more election-related lawsuits than had ever been filed in an election year in U.S. history,” the authors said.

Perhaps the most enticing of all the electoral opportunities presented by the pandemic and civil unrest was the advent of universal, unsolicited mail-in ballots, which are still in use in some states.

According to the U.S. Census Bureau, 43 percent of American voters cast their ballot by mail in 2020, compared to 21 percent who did so in 2016.

In their book, Mr. Fund and Mr. von Spakovsky wrote that “the flood of millions of mail-in ballots opened the system to unprecedented confusion and largely untraceable fraud.”

“There’s a reason that a bipartisan commission co-chaired by former President Jimmy Carter in 2005 called mail-in absentee ballots the ‘largest source of potential voter fraud’ and that most countries in the European Union have banned ‘postal voting’ over the same concerns,” they wrote.

The topic of election fraud has become sharply politicized, with conservatives insisting that it’s a significant enough problem to sway the outcome of elections, and left-wing groups insisting it isn’t. 

The Heritage Foundation, a conservative think-tank, keeps an ongoing database of cases of voter fraud, documenting 1,500 cases to date and 1,276 criminal convictions. The group stated that illegal voting has resulted in election results being overturned in at least a dozen races.

However, the left-leaning Brookings Institution stated that what’s recorded in the Heritage database “may sound like big numbers, however … the findings encompass more than a decade of data during which, nationally, hundreds of millions of votes have been cast.” 

In December 2023, Rasmussen Reports and The Heartland Institute conducted a survey of more than 1,000 voters regarding how they cast ballots in 2020; responses were evenly split between Republican and Democratic voters, and 30 percent of respondents said they voted by mail. 

Of the respondents who voted by mail, 21 percent said they had done so in a way that, whether they were aware of it or not, violated election laws. This includes filling out ballots for friends and relatives and forging other people’s signatures on ballots.

“We asked if they voted by mail in a state in which they are no longer a permanent resident, which is voter fraud,” Justin Haskins, a director at the Heartland Institute, told The Epoch Times. “About one in five respondents who voted by mail in the 2020 election said yes.”

The survey also found that 8 percent of respondents said a friend, family member, or organization offered to pay or reward them for voting in the 2020 election.

The Privatization of State Voting Systems

The “voter suppression” narrative, which gained acceptance throughout many parts of America, played to the strengths of the Democratic Party.

“Because the tax code allowed nonprofit organizations to run registration and turnout drives as long as they did not push a particular candidate,” Mr. Issenberg wrote, “organizing ‘historically disenfranchised’ communities became a backdoor approach to ginning up Democratic votes outside the campaign finance laws.”

One example of what Mr. Fund and Mr. von Spakovsky call the “privatization” of state election systems by wealthy donors, is the Chicago-based Center for Tech and Civic Life (CTCL), a group that is nominally nonpartisan but led by Democrat activists.

CTCL received $350 million from Facebook founder Mark Zuckerberg’s Chan Zuckerberg Initiative, ostensibly to protect the health of voters and election officials during the pandemic.

These “Zuckerbucks,” as they have come to be known, were channeled through CTCL into 2,500 mostly liberal jurisdictions to pay for new polling locations, ballot drop boxes, “voter education” centers, and campaigns to reach non-English-speaking voters, according to the authors.

In one instance, CTCL gave $10 million to the city of Philadelphia, whose entire election administration budget was $15 million before the grant. However, CTCL stipulated that the funds be used for “private printing and postage for mail-in ballots and to scatter ballot drop boxes,” the authors wrote.

Read more here…

Another rollercoaster day for stocks.

Following on the biggest drop for the S&P since September thanks to Powell unleashing Hawk Hogan during his presser, stocks – which had managed to regain about a third of the drop overnight – started the day off on the back foot, dropping to session lows early in the session as the regional banks crisis threatened to spread out of control as multiple small banks tumbled high-single and double digits.

However, then the market quickly remembered that it was precisely the bank crisis last March that sparked a powerful Fed response (BTFP), and a violent rally, and we got the same thing today as stocks slingshot sharply higher closing 1.1% higher…

… with the meltup paradoxically also spreading to the KRE regional bank index, as the very catalyst for the meltup reversed and also rose in an example of absurd market reflexivity.

While banks have struggled, one can’t say the same for tech, which has levitated since the open, and is well on its way to erasing all the losses during Wednesday’s drubbing…

… although a lot will depend on what AMZN, AAPL and META report after the close.

Until then, however, everyone is enjoying today’s relief rally (relief from what exactly?) and even though we have seen a veritable rollercoaster in March rate cut odds in the past 48 hours…

… all sectors green except energy…

… which was hammered by various fake news reports out of Al Jazeera that an Israel-Hamas ceasefire is imminent (it isn’t), which was enough for CTAs to resume shorting on overdrive, and sending oil sharply lower…

… and even though Al Jazeera deleted the original report, the shorting CTAs were still too powerful and ended up pressing shorts all day to send WTI down almost $3 for the day.

Elsewhere, as stocks rose, yields tumbled, with the 10Y plunging as low as 3.815% before reversing modestly, with the move focusing on the long-end…

… while the dollar reversed an earlier attempt to move higher after a very strong ISM report, which the market quickly ignored as attention shifted to the nascent round two of the banking crisis and the inevitable rate cuts…

… as well as the sharp drop in the Fed’s reverse repo which assures that  tapering of the Fed’s QT is fast approaching…

… which may explain why both gold and bitcoin closed the day near session highs as attention turns to today’s mega earnings and tomorrow’s jobs report, at which point we start everything from square one.

Elon Musk is picking up and moving to Texas…again.

Having already moved Tesla’s manufacturing to the Lone Star state and in the wake of a Delaware Chancery Court ruling this week that saw Musk’s $55 billion pay plan voided, Musk is now seeking to reincorporate Tesla in Texas. 

Musk held a poll on his X account this week asking his followers whether or not the company should reincorporate in Texas. The response was an overwhelming ‘yes’, prompting Musk to write: “The public vote is unequivocally in favor of Texas! Tesla will move immediately to hold a shareholder vote to transfer state of incorporation to Texas.”

The move could be risky, Reuters reported on Thursday. If Musk proceeds with the vote, it carries inherent risks. Legal authorities suggest that Musk would likely face lawsuits from investors if he attempts to relocate Tesla’s state of incorporation to Texas. This is especially true if the move is perceived as a tactic to protect his compensation package rather than to gain advantages for Tesla.

Dan Coatsworth, investment analyst at AJ Bell, commented: “Elon Musk’s plan to change Tesla’s state of incorporation from Delaware to Texas is typical behaviour for the entrepreneur who always looks for an alternative if he can’t get what he wants.”

Another business adviser told Reuters: “Shareholders need to take a hard look at how transitioning out of Delaware might impact their rights and the company’s governance.”

As we wrote earlier this week, a Delaware judge voided Elon Musk’s $55 billion pay package after a Tesla shareholder brought a case to court claiming it was excessive. The consequences of the ruling could have major implications for Tesla’s governance structure, but their implementation will hinge on a forthcoming appeal, according to Bloomberg. 

Delaware Chancery Court Chief Judge Kathaleen St. J. McCormick cited inadequate disclosures and board conflicts of interest in her ruling. Musk, whose wealth largely comes from Tesla, the top auto company globally, has seen stock options from this plan vest as performance goals were met, though he hasn’t exercised them yet.

The judge wrote: “In the final analysis, Musk launched a self-driving process, recalibrating the speed and direction along the way as he saw fit. The process arrived at an unfair price. And through this litigation, the plaintiff requests a recall.”

“The most striking omission from the process is the absence of any evidence of adversarial negotiations between the Board and Musk concerning the size of the grant,” she continued.

The compensation case, which was launched by shareholder Richard Tornetta, argued that Tesla’s board lacked independence in crafting Musk’s pay, a view the judge supported.

“Never incorporate your company in the state of Delaware,” Musk fired back on Twitter earlier this week. 

Tuesday’s court verdict requires Tesla’s board to put together a new executive compensation plan, at least temporarily overhauling the record-setting package previously awarded to Musk in 2018.

Looks like the company could be doing so in Texas…