Month: February 2024

Authored by Jonathan Turley,

Former New York Times editor Adam Rubenstein has a lengthy essay at The Atlantic that pulls back the curtain on the newspaper and its alleged bias in its coverage. The essay follows similar pieces from former editors and writers that range from Bari Weiss to Rubenstein’s former colleague James Bennet. The essay describes a similar work environment where even his passing reference to liking Chik-Fil-A sandwiches led to a condemnation of shocked colleagues.

An opinion-section editor, Rubenstein was involved in the controversy over publishing Sen. Tom Cotton’s (R., Ark.) op-ed where he argued for the possible use of national guard to quell violent riots around the White House.

It was one of the lowest points in the history of modern American journalism. Cotton was calling for the use of the troops to restore order in Washington after days of rioting around the White House.  While Congress would “call in the troops” six months later to quell the rioting at the Capitol on January 6th, New York Times reporters and columnists called the column historically inaccurate and politically inciteful. Reporters insisted that Cotton was even endangering them by suggesting the use of troops and insisted that the newspaper cannot feature people who advocate political violence. One year later, the New York Times published a column by an academic who had previously declared that there is nothing wrong with murdering conservatives and Republicans.

Rubenstein noted:

On January 6, 2021, few people at The New York Times remarked on the fact that liberals were cheering on the deployment of National Guardsmen to stop rioting at the Capitol Building in Washington, D.C., the very thing Tom Cotton had advocated.

Instead, he describes an environment in which the staff routinely rejected conservative viewpoints, subjected conservatives to added demands and editing, and faced staff opposition to working on such pieces. He noted:

Being a conservative—or at least being considered one—at the Times was a strange experience. I often found myself asking questions like “Doesn’t all of this talk of ‘voter suppression’ on the left sound similar to charges of ‘voter fraud’ on the right?” only to realize how unwelcome such questions were. By asking, I’d revealed that I wasn’t on the same team as my colleagues, that I didn’t accept as an article of faith the liberal premise that voter suppression was a grave threat to liberal democracy while voter fraud was entirely fake news.

Or take the Hunter Biden laptop story: Was it truly “unsubstantiated,” as the paper kept saying? At the time, it had been substantiated, however unusually, by Rudy Giuliani. Many of my colleagues were clearly worried that lending credence to the laptop story could hurt the electoral prospects of Joe Biden and the Democrats. But starting from a place of party politics and assessing how a particular story could affect an election isn’t journalism. Nor is a vague unease with difficult subjects. “The state of Israel makes me very uncomfortable,” a colleague once told me. This was something I was used to hearing from young progressives on college campuses, but not at work.

What emerges from the interview is all-too-familiar to many of us on this blog.

I have long been a critic of what I called “advocacy journalism” as it began to emerge in journalism schools. These schools encourage students to use their “lived expertise” and to “leave[] neutrality behind.” Instead, of neutrality, they are pushing “solidarity [as] ‘a commitment to social justice that translates into action.’”

For example, we previously discussed the release of the results of interviews with over 75 media leaders by former executive editor for The Washington Post Leonard Downie Jr. and former CBS News President Andrew Heyward. They concluded that objectivity is now considered reactionary and even harmful. Emilio Garcia-Ruiz, editor-in-chief at the San Francisco Chronicle said it plainly: “Objectivity has got to go.”

Saying that “Objectivity has got to go” is, of course, liberating. You can dispense with the necessities of neutrality and balance. You can cater to your “base” like columnists and opinion writers. Sharing the opposing view is now dismissed as “bothsidesism.” Done. No need to give credence to opposing views. It is a familiar reality for those of us in higher education, which has been increasingly intolerant of opposing or dissenting views.

Downie recounted how news leaders today

“believe that pursuing objectivity can lead to false balance or misleading “bothsidesism” in covering stories about race, the treatment of women, LGBTQ+ rights, income inequality, climate change and many other subjects. And, in today’s diversifying newsrooms, they feel it negates many of their own identities, life experiences and cultural contexts, keeping them from pursuing truth in their work.”

There was a time when all journalists shared a common “identity” as professionals who were able to separate their own bias and values from the reporting of the news.

Now, objectivity is virtually synonymous with prejudice. Kathleen Carroll, former executive editor at the Associated Press declared “It’s objective by whose standard? … That standard seems to be White, educated, and fairly wealthy.”

In an interview with The Stanford Daily, Stanford journalism professor, Ted Glasser, insisted that journalism needed to “free itself from this notion of objectivity to develop a sense of social justice.” He rejected the notion that journalism is based on objectivity and said that he views “journalists as activists because journalism at its best — and indeed history at its best — is all about morality.”  Thus, “Journalists need to be overt and candid advocates for social justice, and it’s hard to do that under the constraints of objectivity.”

Lauren Wolfe, the fired freelance editor for the New York Times, has not only gone public to defend her pro-Biden tweet but published a piece titled “I’m a Biased Journalist and I’m Okay With That.” 

Former New York Times writer (and now Howard University Journalism Professor) Nikole Hannah-Jones is a leading voice for advocacy journalism.

Indeed, Hannah-Jones has declared “all journalism is activism.”

It is easy to see how  this was a “strange experience” for Rubenstein.

He objects that “our goal was supposed to be journalistic, rather than activist,” but he found reporters actively working to advance the political interests of the Democrats and Joe Biden.

It was a strange, not a unique, experience. It is another account of the orthodoxy of American media, which increasingly functions like a de facto state media.

In his description of the sandwich controversy, Rubenstein describes how he was introduced to the culture of the New York Times at his orientation meeting. When asked about his favorite sandwich in the group meeting, he committed the offense of naming Chick-fil-A’s spicy chicken sandwich.

That led to a shocked hush before the rep leading the orientation said: “We don’t do that here. They hate gay people.” That statement was met with the snapping of fingers from the staff in agreement in a communal condemnation.

It is clear from the account that, at the Times and other major outlets, there is much of traditional journalism that they “don’t do . . . here.”

Mitch McConnell (R-KY), who turned 82 last week and has suffered multiple public ‘glitches,’ will step down from his Senate leadership position in November after maintaining power for almost two decades as the longest-serving Senate leader in US history.

McConnell was set to announce his decision on Wednesday in the well of the Senate, AP reports.

“One of life’s most underappreciated talents is to know when it’s time to move on to life’s next chapter,” he said in prepared remarks seen by the outlet. “So I stand before you today … to say that this will be my last term as Republican leader of the Senate.”

While he’ll no longer be leader, McConnell will serve out his Senate term, which ends in January 2027, “albeit from a different seat in the chamber.”

McConnell is rated — and has been for some time — Americans’ most disliked political leader. (Obviously he is beloved by DC.) In America, however, his favorability ratings are even worse than Biden’s. https://t.co/vrC0fnLIsH

— Mollie (@MZHemingway) February 28, 2024

“As I have been thinking about when I would deliver some news to the Senate, I always imagined a moment when I had total clarity and peace about the sunset of my work,” the prepared remarks continue. “A moment when I am certain I have helped preserve the ideals I so strongly believe. It arrived today.”

It also arrived, as noted above, after two major health scares and his party shifting towards anti-war populism ushered in by President Trump.

BREAKING NEWS: Sen. Mitch McConnell appearing to have another scary episode in the media gaggle in Covington today. Aides had to step in to help him out and repeat questions. He was eventually lead away. We’ll have the full video on @WLWT pic.twitter.com/q9ex5MHxLV

— Hannah Thomas (@HannahPThomas) August 30, 2023

His tenure was not without its critics, especially from the more restive corners of his party, often aligned with Trump’s confrontational style. Yet, McConnell’s grip on his caucus seldom wavered, a testament to his deep understanding of the political undercurrents that shape legislative priorities.

The two have been estranged since December 2020, when McConnell refused to abide Trump’s lie that the election of Democrat Joe Biden as president was the product of fraud.

But while McConnell’s critics within the GOP conference had grown louder, their numbers had not grown appreciably larger, a marker of McConnell’s strategic and tactical skill and his ability to understand the needs of his fellow Republican senators.

McConnell gave no specific reason for the timing of his decision, which he has been contemplating for months, but he cited the recent death of his wife’s youngest sister as a moment that prompted introspection. “The end of my contributions are closer than I’d prefer,” McConnell said. –AP

The impending leadership vacuum raises questions about the direction of the Republican Party. His successor will inherit a party at a crossroads, caught between its traditional conservative roots and the populist wave that has reshaped its identity in recent years.

When you see McConnell is stepping down but then you remember his replacement (Thune or Cornyn) will be as bad or worse. pic.twitter.com/FxXwM74MlI

— Jesse Kelly (@JesseKellyDC) February 28, 2024

By Michael Every of Rabobank

Cartoon Versions Of Everything

President Macron’s remarkable public speech saying Europe will “do everything needed” to stop Russia winning in Ukraine, and “not ruling out” sending troops, of course, saw President Putin immediately reply that the latter would mean war with Russia; and, of course, Germany then stated they oppose this course of action. Macron may have then tweeted a video saying Europe needs to be prepared to act militarily without the US vis-à-vis Ukraine, but its inability to do so was laid bare.

You might think this doesn’t matter in a markets Daily. You’d be wrong. To translate it to someone limited to the narrow world of finance, imagine if a central bank promised to do “whatever it takes”, but when a crisis hit said, “except QE.” Markets would crash, and headlines would be of crushing humiliation and total loss of credibility. Europe just experienced the same in realpolitik. After all, France is not only a member of the UN Security Council –alongside a UK whose aging submarine nuclear deterrent may or may not work– but the only EU state with a serious military; and it just displayed that, within an EU mechanism that’s the only way to scale up to make it a serious global player, it cannot be taken seriously at all.

Promising to send troops, but no new weapons, was always a dangerously contradictory, escalatory action that invited Putin to show that he wouldn’t blink, and Europe would – which it did. The only actual breakthroughs from Macron were promises of an unspecified quantity of long-range missiles at an undisclosed future date, and a U-turn on using new EU funds for Ukraine to purchase foreign ammunition in light of the fact that Europe cannot manufacture it itself at the required scale, the latter pragmatism a scandalous reflection of its military incapacity.

To bring it back it back to markets, if a central bank (in)acted like Macron, everyone would know the final bill would be vastly higher than it originally looked like being. The same is true for the EU in terms of any dreams of any “Strategic Autonomy” in an ever-more ‘geopolitical’ world. That world was watching, and face-palming or laughing; as a result, you could, literally, be talking about needing to spend many tens, perhaps many hundreds, of billions more on EU defense to try to reinstall an element of real deterrence. In short, when it comes to violence, reputations matter more than they do in the world of central banking.

Yet Macron just displayed, again, that most Western leaders have never been physically worried about their own safety in a world of streetfighters, who look at their ‘whatever it tales’ and say ‘whatever’. That’s as even the Financial Times carries an opinion piece warning that Europe needs to consider a wider range of potential future geoeconomic threats, including from the US under Trump, not just from Russia and China. (And the US author ignored Iran; and, as the Wall Street Journal puts it, ‘While the World Was Looking Elsewhere, North Korea Became a Bigger Threat: Kim enlarged his nuclear arsenal and built ties to Russia, no longer aiming for reunification with South Korea. The US and its allies are alarmed.’)

In that real world, global ocean carrier giants Maersk announced we should expect the Red Sea crisis to last into the second half of the year –which we already did– and that, “We encourage customers to prepare for disruptions to persist in the global network.” Again, we were saying exactly this while markets were ignoring Suez as short-term ‘noise’ that had nothing to do with their take-it-to-the-bank central-bank rate cuts.

Framing this for markets, Elwin de Groot’s ‘Wait and Red Sea: Gauging the Inflation Risks’ sees the impact averaging of 0.5%s to Eurozone y-o-y CPI over the next two years; 0.1ppt if the crisis deescalates; and 1.8ppts if Suez remains closed and we get other plausible knock-on effects. (Which Maersk is warning of, and a perceived lack of EU realpolitik power encourages). The latter would shock the ECB and markets thinking rate cuts arrive in time for them to go on their nice, safe, long summer holiday. The real world sadly doesn’t rotate around EU school timetables.

On that note, the RBNZ kept rates on hold today at 5.50% rather than *hiking*, as some had feared, while also noting that “the geopolitical climate poses a risk to inflation.” You think?! Let’s see how this plays out, first in the RBNZ Governor’s post-decision Q&A, and then in the real world.

Meanwhile, showing that the West’s problems extend well beyond politics, the WSJ just ran ‘Why We Risk a Cartoon Version of Capitalism’, noting…

“It sometimes feels as if we are living in a cartoon version of market capitalism, where shareholders have given up trying to control companies. Money floods into shares based on memes, is shifted around by algorithms based on past patterns, or goes into vast passive index trackers sold on the basis of being virtually free. None have an incentive to devote resources to keeping the corporate bureaucracy in check, since day traders and hedge funds will be gone before the next CEO meeting, while passive funds can’t sell even if the CEO is thrown in prison.”

Are they wrong? If so, where? And how do these firms get behind a national-security push in the same way the FT covers Adani is doing so in India?

Of course, most in markets will continue to ignore me, Maersk, and Macron to focus on headlines like Apple dropping plans for an EV for an AI, chasing the latest acronym du jour. It’s not as if there isn’t a gap in the market for one given I just saw Google Gemini, when asked to give a concise yes/no answer to the simple question: “Is the United States a better place to live compared to Nazi Germany?”, allegedly say, “No.”

Welcome to cartoon versions of everything.

As Congress scrambles once again to avert a government shutdown before a Friday headline, which is looking more and more likely, here are the details of what will happen if nothing is done.

The shutdown will come in two phases – around 20% of government funding will run out in two phases – one on Friday night, and the other a week later on March 8. The other 80% of government agencies would see their funding expire on various other dates if Congress can’t come to an agreement.

The 20% of agencies affected by the two near-term dates include the:

• Department of Housing and Urban Development
• Department of Transportation
• Department of Veterans Affairs
• Department of Energy
• Department of Agriculture
• Food and Drug Administration

Some areas of the Department of Defense, such as the Army Corps of Engineers and the Interior Department, will also be affected by the expiring funds.

That said, activities considered essential to public safety, economic stability and the president’s constitutional authority would be exempt – such as air traffic controllers, who would stay on the job, but go unpaid. FDA food safety inspectors would similarly remain working.

Veterans’ benefits – including health care and pensions, would also continue during a government shutdown per the department’s contingency plan, the Washington Post reports, which adds that 96% of the agency’s nearly 414,000 employees will continue working – either because their pay isn’t linked to annual appropriations, or they are exempt from furloughs.

Programs such as SNAP (Supplemental Nutritional Assistance Program) or WIC (Special Supplemental Nutrition Program for Women, Infants, and Children) will seen no interruptions for the foreseeable future, as both have sources of contingency funds that can float them along past the deadline.

That said, roughly 5 million families receiving rental assistance stand to see sharp cuts to their benefits unless key housing programs are funded.

And while the air traffic controllers would remain in their posts, some 16,000 of the FAA’s 45,000 employees would be furloughed. Those who will remain on the job (aside from air traffic controllers) include accident investigators, anti-terrorism and intelligence officials and other safety officials.

The Post outlines four potential paths forward for Congress:

1. Pass the bills: Lawmakers could drop their disagreements and speedily adopt legislation to fund the government. There’s been positive movement in that direction since Biden summoned congressional leaders to the White House on Tuesday, but an agreement is still a ways off.
2. Pass another CR: Congress could drop its plan to pass appropriations — or annual spending bills — and pass another CR, in essence kicking the can down the road again. Lawmakers are already considering a continuing resolution to avoid the March 9 shutdown deadline, which would extend funding for the agencies affected until March 22.
3. Pass a very short CR: If lawmakers are nearing an agreement but just need another beat to dot their i’s and cross their t’s, they could pass a CR that lasts only a few days. That would keep the government open and give both the House and Senate enough time to take up new spending legislation without an intense time crunch. Senate Republicans discussed this option at their weekly lunch meeting on Tuesday; it’s unclear how House Republicans would feel about this approach.
4. Shut down the government, but keep it brief: Congress actually buys itself a little a more time to solve government shutdowns each time it passes a CR. It’s been setting the deadline on a Friday, so if the government does shut down, lawmakers have the weekend to try to open the government up again while most federal workers are already off the clock. If lawmakers are very close to a deal, they could choose to try to pass legislation to resolve the situation over the weekend and have the government open again on Monday like nothing ever happened. In this scenario, a partial shutdown might only last a few hours, even if final passage of new funding legislation comes Saturday morning.

The latest shutdown traces its roots back to the spring of 2023, when Biden and former House Speaker Kevin McCarthy made a deal to cap federal discretionary spending in the 2024 fiscal year in exchange for suspending the US debt limit.

McCarthy infuriated House conservatives for not extracting deeper spending cuts. Instead of holding firm, McCarthy reached across the aisle and made a deal with Democrats to pass a continuing resolution (or CR). Following this, the conservatives – led by Rep. Matt Gaetz (R-FL), ousted the former speaker and installed Rep. Mike Johnson (R-LA) in his face.

And Johnson now finds himself in the exact same pickle.

Authored by Amaka Nwaokocha via CoinTelegraph.com,

OpenAI has asked a federal judge to dismiss parts of The New York Times’ copyright lawsuit against it, arguing that the newspaper “paid someone to hack ChatGPT” and other artificial intelligence (AI) systems to generate misleading evidence for the case.

In a Manhattan federal court filing on Monday, OpenAI stated that The NYT caused the technology to reproduce its material through “deceptive prompts that violate OpenAI’s terms of use.” OpenAI didn’t identify the individual it claims The NYT employed to manipulate its systems, avoiding accusations of the newspaper violating anti-hacking laws.

The “hacking” OpenAI mentions in the filing could also be called prompt engineering or “red-teaming”…

In the filing, OpenAI said:

“The allegations in the Times’s complaint do not meet its famously rigorous journalistic standards. The truth, which will come out in this case, is that the Times paid someone to hack OpenAI’s products.” 

OpenAI’s claim of “hacking” is, according to the newspaper’s attorney Ian Crosby, merely an effort to use OpenAI’s products to find evidence of the alleged theft and reproduction of The NYT’s copyrighted work.

Screenshot of the filing by OpenAI. Source: Courtlistener

In December 2023, The NYT filed a lawsuit against OpenAI and its leading financial supporter, Microsoft. The lawsuit alleges the unauthorized use of millions of NYT articles to train chatbots that provide information to users.

The lawsuit pulled from both the United States Constitution and the Copyright Act to defend the original journalism of The NYT. It also pointed to Microsoft’s Bing AI, alleging that it creates verbatim excerpts from its content.

The New York Times is among many copyright holders suing tech firms for supposedly misusing their content in AI training. Other groups, like authors, visual artists and music publishers, have also filed similar lawsuits.

OpenAI has previously asserted that training advanced AI models without utilizing copyrighted works is “impossible.” In a filing to the United Kingdom House of Lords, OpenAI stated that, as copyright covers a wide range of human expressions, training leading AI models would be infeasible without incorporating copyrighted materials.

Tech firms argue that their AI systems use copyrighted material fairly, emphasizing that these lawsuits threaten the potential multitrillion-dollar industry’s growth.

Courts have yet to determine if AI training is considered fair use under copyright law. However, some infringement claims related to generative AI system outputs were dismissed because there was insufficient evidence to show the AI-created content resembled copyrighted works.

An initiative organized by dissident Democrats outraged over President Biden’s handling of the Israel-Gaza war has sent a powerful shot across the bow of his presidential campaign, as more than 100,000 Democrats voted “uncommitted” in the Michigan primary.

That’s more than 9 times former President Trump’s 10,704-vote victory margin in his 2016 defeat of Hillary Clinton, in a critical swing state that will be worth 15 electoral votes in the November general election. Critically, that 100,000-voter coalition turned out for a primary election where the conclusion was foregone. There are likely many more who share their sentiments but didn’t bother voting. 

With more than 95% of votes counted, “uncommitted” accounted for a hefty 13.3% of the statewide total. Biden had 81.1%, while Marianne Williamson, who suspended her campaign three weeks ago, was edging the still-campaigning Rep. Dean Phillips 3.0% to 2.7%. Wayne County, home of Dearborn and its large Muslim population, saw 21% vote uncommitted with 75% of the count completed. 

Michigan has one of the largest Muslim populations in America. Angered by Biden’s lop-sided support for Israel and failure to restrain an Israel Defense Forces campaign that has caused tens of thousands of civilian casualties — including a high proportion of children — leaders have promoted a nationwide campaign to “Abandon Biden.” An allied effort, under the moniker of “Listen to Michigan,” was championed by Michigan Rep. Rashida Tlaib.    

Squad member Rashida Tlaib says she’s “proud” to vote against Biden (”Uncommitted”) in the Michigan Democratic primary pic.twitter.com/fRibYb28w6

— Republicans against Trump (@RpsAgainstTrump) February 27, 2024

Some Michigan Muslims are sufficiently angry that they’ve threatened to vote Republican in November. They realize the GOP is subservient to the State of Israel, but they credit Republicans for at least being honest about it. Where Biden is concerned, they feel betrayed and lied to, and want to punish him and like-minded Democrats.  

In the run-up to the primary, Biden and his team gingerly yet clumsily attempted to mend relations with Michigan’s Muslims. Biden himself didn’t dare meet with them personally. Instead, Team Biden sent Jewish national security advisor Jon Finer for a closed-door meeting in which he told Arab-American political leaders, “We are very well aware that we have [made] missteps in the course of responding to this crisis since Oct. 7.”  It clearly didn’t work. 

Don’t think the uncommitted votes were only cast by Muslims. Progressive leftists and young voters factored in too. In Washtenaw County, home of the University of Michigan, 17% voted uncommitted.  

The Uncommitted are showing Genocide Joe what it means to be committed to humanity.

— Aaron Maté (@aaronjmate) February 28, 2024

The “uncommitted” movement didn’t just earn publicity and shake the Biden campaign. It’s also expected to result in Michigan actually sending one uncommitted delegate to the Democratic nominating convention. “Under Michigan’s Democratic primary rules, candidates can receive delegates by earning at least 15 percent of the vote in a specific congressional district,” reports the New York Times‘ Zach Johnk. That seems a certainty where Tlaib’s Michigan-12 district. 

This could be the start of a rolling nightmare for the Biden-Harris campaign. While leftist media and party officials will spin the Michigan result in favor of Biden, it’s made a national splash and could ignite a trend that spreads to upcoming states, with Democrats seizing upon the tactic to voice not only disappointment with Biden’s approach to Israel and Gaza, but also to express their long-simmering general dissatisfaction with Biden. A Rasmussen poll released Monday found that 48% of Democrats backed the idea of the Democratic Party “finding another candidate to replace Joe Biden before the election in November.” 

If Biden remains the candidate, the biggest general-election threat in Michigan isn’t that Muslims and college students will vote Red in November, but that they’ll simply stay home, or cast protest votes for candidates like the Green Party’s Jill Stein. Don’t expect them to vote for independent Robert F. Kennedy, Jr, who decisively repelled a once-promising block of Kennedy-curious progressives and libertarians with his over-the-top, pro-Israel rhetoric.

Authored by Paul Joseph Watson via Modernity.news,

Dr. Phil left The View hosts stunned after revealing the true impact COVID lockdowns had on children.

During an appearance on the ABC show, the television host began by explaining the harm smart phones and social media had wrought on childhood development.

“Kids stopped living their lives and started watching people live their lives and so we saw the biggest spike and the highest levels of depression, anxiety, loneliness and suicidality since records have been kept and it’s just continues on and on and on,” said Phil McGraw.

That narrative was palatable to the hosts, but when McGraw used the same logic to slam COVID lockdowns, the hosts bristled.

Dr. Phil leaves hosts on The View in STUNNED SILENCE after utterly SCHOOLING them on lockdowns— Hosts PANIC: ‘CUT TO COMMERCIAL BREAK!’pic.twitter.com/kqOxjo0eUP

— Benny Johnson (@bennyjohnson) February 27, 2024

“Then COVID hits ten years later and the same agencies that knew that are the agencies that shut down the schools for two years – who does that? Who takes away the support system for these children?”

Dr. Phil also pointed out that COVID lockdowns prevented interventions for children who were being violently and sexually abused.

Whoopi Goldberg then shot back claiming “they were trying to save kids’ lives,” to which McGraw responded by pointing out that school children were almost completely unaffected by COVID.

Goldberg then tried to argue that this was thanks to the lockdown, before another host confronted Dr. Phil by saying, “Are you saying no school children died of COVID?”

“I’m saying it was the safest group, they were the less vulnerable group and they suffered and will suffer more from the mismanagement of COVID than they will from the exposure to COVID and that’s not an opinion, that’s a fact,” said McGraw.

The audience then started applauding, something which triggered Goldberg to immediately scramble to go to break.

“Audience clapping at end triggered those wicked witches,” commented Mike Cernovich.

Audience clapping at end triggered those wicked witches. https://t.co/ibiYgagJOz

— Cernovich (@Cernovich) February 28, 2024

Dr. Phil is completely correct in that COVID affected children far less severely than adults, something that Goldberg incorrectly claims is thanks to lockdowns but in fact was due to their superior immune response.

As we previously highlighted, multiple major studies confirm that pandemic lockdowns had devastating effects on children, harming their emotional development, social skills and driving mass clinical depression.

*  *  *

Your support is crucial in helping us defeat mass censorship. Please consider donating via Locals or check out our unique merch. Follow us on X @ModernityNews.

Oil prices are extending gains this morning, reversing earlier losses, as reports suggest OPEC+ will rollover its production cuts. This will pressure supply as Red Sea disruptions are triggering widely tracked gauges of the physical market to point to tighter conditions.

Last night’s big crude build, reported by API, was shrugged off (helped by a bigger than expected gasoline draw).

Bulls will be hoping to see a smaller crude build

API

• Crude +8.428mm (+1.5mm exp)

• Cushing +1.825mm

• Gasoline -3.27mm(-1.3mm exp)

• Distillates -523k (-2.0mm exp)

DOE

• Crude +4.199mm (+1.5mm exp)

• Cushing +1.458mm

• Gasoline -2.83mm (-1.3mm exp)

• Distillates -510k (-2.0mm exp)

Official data showed a smaller Crude build than API (but still more than expected) as well as a decnt build at Cuishing

Source: Bloomberg

The Biden administration has added to the SPR for 12 of the last 14 weeks (+743k last week)

Source: Bloomberg

US Crude production was steady at record highs (13.3mm b/d) as rig counts have stopped falling…

Source: Bloomberg

WTI was hovering just above $79 ahead of the official data and extended its retracement on the official data…

So-called prompt spreads – the premium that the most immediate crude futures contract commands over the next one – for Brent and West Texas Intermediate recently rallied to the widest backwardation in about four months, excluding contract expiry anomalies.

Spreads are “on fire, pointing to tight physical markets,” said Daniel Ghali, a commodity strategist at TD Securities.

WTI prompt spread…

“With Europe taking fewer Middle East barrels due to the extra shipping costs to avoid the Red Sea, there is a preference for short haul and that pool of alternatives is thinner,” said Christopher Haines, an analyst at Energy Aspects.

Brent prompt spread..

Other gauges such as the so-called physical market swaps and the WTI cash roll have also strengthened.

Authored by Michael Lebowitz via RealInvestmentAdvice.com,

Apple’s valuations are near their most expensive levels of the last ten years. Now consider that today’s valuation premiums are amidst a much higher risk-free bond yield than during most of the previous ten years.

Apple has a market cap of $2.8 trillion. Assuming its price-to-earnings ratio and margins remain stable, Apple must sell nearly $400 billion of products and services each year to keep its share price stable. To fathom that, consider that every man, woman, and child on planet Earth must spend about $45 on Apple products yearly.

The point of sharing those statistics and the valuation premium is to contextualize whether Apple can grow at the growth rate implied by its investors. Further, if its earnings growth alone doesn’t support a valuation premium to the market’s valuation, can the continued use of stock buybacks support the premium?

Apple’s Track Record

The graph below shows Apple shares have provided its investors with a fantastic 20% annualized growth rate for the last 39 years. That is more than double the 8.7% growth rate for the S&P 500 over the same period.

Its exceptional outperformance versus the market is warranted. Since 1993, Apple’s earnings per share have grown at over 3x the rate of the S&P 500.

Apple’s Recent Trends

While Apple may have an incredible record of earnings growth and share price appreciation, current investors must avoid the temptation to rest on prior trends. Instead, their focus should be on what may lie ahead.

The following graph shows the running 3-year annualized growth rates for sales, net earnings, and earnings per share. Recent growth rates are much lower than they have been. We truncated the graph to the last ten years to better highlight the more recent trends.

Earnings and sales were boosted in 2021 and 2022 by the stimulus-related spending and inflation caused by the massive pandemic-related fiscal stimulus. Many companies, including Apple, saw demand increase and could expand profit margins, as inflation was easy to pass on to customers.

However, Apple’s earnings and sales growth are returning to pre-pandemic levels. To better appreciate what the future may hold, consider the five pre-pandemic years highlighted in blue. During that period, sales grew by 4.2% annually. Net earnings grew by 4.3% and EPS by 10.4%

The Magic of Stock Buybacks

The price of a stock is not meaningful. Apple stock trades for $182 a share. Its market cap is roughly $2.85 trillion. If the company repurchased all but one share, its market cap would be unchanged, but its share price would be $2.85 trillion. 

That simple example highlights how valuable buying back shares can be for investors.

Back to Apple’s recent EPS, net earnings and sales trends. Its EPS grew roughly double that of sales or net earnings. The graph below helps explain how they pulled off such a feat. Once Apple started buying back shares in late 2013, its EPS grew 4-6% more than its actual earnings.

The following graph compares Apple’s annual EPS versus its EPS if it had not repurchased shares. The graph starts in 2013 when Apple began to aggressively buy back shares.

Why The Premium Versus The Market?

Apple has recently grown its earnings and sales at an approximate 5% growth rate. This is only about 1% higher than the approximate 4% nominal GDP growth from 2017 to 2019. But less than the approximate 9% EPS and sales per share growth of the S&P 500. 

So why are Apple investors willing to pay a premium for subpar growth?

Apple is an incredibly successful and innovative company with a long history of rewarding investors. Investors are willing to pay for the future potential of new products and services with enormous income potential. Such investor goodwill is hard to put a price on.

Passive investment strategies are a second reason. Apple and Microsoft are the two largest stocks by market cap. The increased popularity of passive investment strategies feeds the most extensive market cap stocks disproportionately to smaller companies.

Consider the holdings of XLK, the $52 billion tech sector ETF. Apple and Microsoft make up almost 50% of the ETF. If an investor buys $1,000 of XLK, approximately $500 will go to Apple and Microsoft, and the remaining 62 companies will get the rest.

Finally, and most importantly, are share buybacks. While we can’t quantify what future innovation, goodwill, and passive investment strategies are worth, we can grasp Apple’s ability to continue forward with buybacks.

Future Buyback Funding

The chart below shows Apple has been spending between $60 and $80 billion per year on stock buybacks. Keep that figure in mind as we walk through its sources of cash to continue buying back shares.

Debt, cash, and earnings are their predominant sources to fund buybacks.

Debt Funded Buybacks

Apple came to market with its first long-term debt offering in 2013, commensurate with its initiation of share buybacks. Apple’s debt peaked eight years later at $109 billion. Using debt to fund share buybacks made sense, with borrowing rates in the very low single digits. However, the calculus has changed, with rates now at 4% and higher.

Cash and Marketable Securities on Apple’s balance sheet are at $61.5 billion, about a year’s worth of buyback potential. While a massive amount of money, it is off its peak of $107 billion.

Lastly are earnings. Apple has been earning about $100 billion a year since 2021. Even if they regress to pre-pandemic levels ($50-$60 billion), earnings are enough to continue supporting its buyback program. However, if earnings are employed to buy back shares, it comes at the expense of investments toward innovations and product upgrades. Furthermore, Apple pays about $15 billion yearly in dividends, which also requires funding.

The graph below shows that from 2018 to 2020, Apple spent more on buybacks than it made. It was relying on debt and cash to make up the difference.

Over the last two years, buybacks only account for 60% of earnings, allowing cash to grow for future buybacks and investments. Hence, if $100 billion a year in earnings is sustainable, even without growth, $60 to $80 billion a year in buybacks is entirely possible. If earnings retreat to their pre-pandemic level, debt and cash will be required. If interest rates stay at their current levels, debt may not be financially sensible.

Summary

Unlike most “growth” companies, a bet on Apple is a bet on their ability to buy back shares. It appears that Apple can continue to buy back its shares with earnings and cash. Such would maintain their higher-than-market EPS growth with or without above-market earnings growth.

Other than negative earnings growth and high-interest rates, a buyback tax on corporations, as is being proposed, could also reduce or eliminate their buyback program. If such a bill were to pass or Apple cuts back on buybacks for another reason, its premium valuation may wither away.