Category: zerohedge

House GOP investigators are investigating several individuals related to Manhattan DA Alvin Bragg’s case against former President Trump, including one top prosecutor who was previously a senior DOJ official during the Biden administration, and a 2023 video of another prosecutor pleading the 5th (privilege against self-incrimination) when asked if he broke any laws while investigating President Trump.

When asked by Rep. Matt Gaetz (R-FL) if he knowingly broke any laws while investigating President Trump, ex-Bragg prosecutor Mark. F. Pomerantz invoked the right during a May 1, 2023 deposition.

Watch:

NEW VIDEO:

Trump Prosecutor PLEADS FIFTH when asked if he BROKE THE LAW investigating Trump! pic.twitter.com/enDGztIhtD

— Rep. Matt Gaetz (@RepMattGaetz) May 2, 2024

“In a closed-door deposition, I asked Mark Pomerantz very simple questions regarding whether he committed crimes or violated the civil rights of any people in the course of his investigation of President Trump and his tenure at the Manhattan DA’s office,” Gaetz told Newsweek in a Thursday email.

FWIW: @mattgaetz have you considered giving Mark Pomerantz immunity so you can force him to respond to your questions. You’ll never get the DOJ to prosecute him anyway, might as well get the dirt. @PhilHollowayEsq @pnjaban @barnes_law @RobGouveiaEsq pic.twitter.com/BVazEoeENP

— @amuse (@amuse) May 2, 2024

Meanwhile, the House Judiciary Committee is investigating another top prosecutor on Bragg’s team – Matthew Colangelo, who’s leading the “politicized” prosecution against the former President. wrote House Judiciary Committee Chairman Jim Jordan (R-OH) in an April 30 letter to Attorney General Merrick Garland, as part of the committee’s oversight of “politically motivated prosecutions.”

“That a former senior Biden Justice Department official is now leading the prosecution of President Biden’s chief political rival only adds to the perception that the Biden Justice Department is politicized and weaponized,” wrote Jordan.

As the Epoch Times notes further,

Mr. Colangelo, who delivered the opening statement in President Trump’s so-called “hush money” trial in New York last week, joined Mr. Bragg’s office in December 2022.

For a period of time, Mr. Colangelo also worked as Chief Counsel for Federal Initiatives at the office of New York Attorney General Letitia James, who led a separate case against President Trump that accused him of inflating asset values to get better loan terms and that ended in a $464 million judgment against the former president.

During his time at the office of Ms. James, who has also been accused of political motivations in her prosecution of the former president, Mr. Colangelo was involved in the investigation into the Trump Organization.

In his letter, Mr. Jordan is demanding that Mr. Garland provide various records related to Mr. Colangelo’s work in the Justice Department, as well as any communication between Mr. Bragg’s office and the DOJ related to President Trump or any of his businesses.

“Given the perception that the Justice Department is assisting in Bragg’s politicized prosecution, we write to request information and documents related to Mr. Colangelo’s employment,” Mr. Jordan wrote, while alleging that Mr. Colangelo’s recent employment history “demonstrates his obsession with investigating a person rather than prosecuting a crime.”

In the so-called “hush money” case, Mr. Bragg has charged President Trump with 34 counts of falsifying business records to hide nondisclosure payments that Mr. Colangelo alleges amounted to a criminal conspiracy to influence the 2016 presidential election.

President Trump has maintained his innocence and has called the case a “political witch hunt.”

While at Ms. James’ office, he was part of a team that sued President Trump’s charitable organization in 2018 over allegations that the former president improperly used charitable assets in his 2016 presidential primary campaign. The lawsuit led the Trump Foundation to be shut down and caused the former president to be ordered to pay $2 million in damages.

Later, Mr. Colangelo was involved in Ms. James’ probe into the Trump Organization, which centered on allegations that the former president and his company defrauded banks, insurers, and others by allegedly overvaluing his assets and exaggerating his net worth in documents used in deals and to secure loans.

That case ended with a $464 million (including interest) judgment against President Trump, while also barring the former president from doing business in the state of New York for three years.

President Trump has argued that no bank was victimized by the stated asset valuations and that lenders—including Deutsche Bank—made considerable amounts of money in interest by extending the loans.

The former president has also repeatedly argued that his financial statements included a disclaimer that asked banks to carry out their own analyses and due diligence when reviewing loan applications.

After working on the investigation into the Trump Organization while at Ms. James’ office, Mr. Colangelo left for a high-ranking position at the DOJ, before returning two years later to New York and joining Mr. Bragg’s team.

The House Judiciary Committee, which Mr. Jordan leads, recently accused Mr. Bragg of being motivated by a “political vendetta” in bringing criminal charges against the former president.

“Bragg’s politically motivated prosecution of President Trump threatens to destroy this notion of blind justice by using the criminal justice system to attack an individual he disagrees with politically, and, in turn, erodes the confidence of the American people,” reads the House Judiciary report.

The report details the backdrop of Mr. Bragg’s decision to charge President Trump with 34 felony counts using a novel legal theory that bootstrapped misdemeanor allegations into a felony, alleging that the prosecution was motivated by political calculations.

“These charges are normally misdemeanors subject to a two-year statute of limitations, but Bragg used a novel and untested legal theory—previously declined by federal prosecutors—to bootstrap the misdemeanor allegations as a felony, which extended the statute of limitations to five years, by alleging that records were falsified to conceal a second crime,” the report states.

Under New York state law, falsifying business records is a misdemeanor. However, if the records fraud was used to cover up or commit another crime, the charge could be elevated to a felony.

In opening arguments in the “hush money” trial, Mr. Colangelo backed Mr. Bragg’s prosecutorial strategy. He portrayed the nondisclosure payments as part of a “planned, coordinated, long-running conspiracy to influence the 2016 election, to help Donald Trump get elected through illegal expenditures to silence people who had something bad to say about his behavior.”

“It was election fraud, pure and simple,” Mr. Colangelo alleged, claiming that “the case is about a criminal conspiracy and a cover-up.”

A number of legal experts have challenged the way Mr. Bragg elevated the misdemeanor into a felony, including retired Harvard law professor Alan Dershowitz, who argued that Mr. Bragg was operating on an invalid legal premise because he invoked federal statutes over which New York has no jurisdiction.

Mr. Dershowitz also recently said that he believes that Mr. Bragg’s office has violated voters’ rights with the Trump prosecution, with the legal scholar arguing that the case amounts to a criminal conspiracy to influence elections.

Mr. Bragg’s office did not respond to a request for comment.

Authored by Jeffrey A. Tucker via The Epoch Times (emphasis ours),

Commentary

No question that Elon Musk is a genius but his real power lies with his common sense. These days this is a rare quality in business. People in higher levels of corporate achievement today are so propagandized from college onward with newspeak and baloneythink that they cannot recall the basics.

That’s a major reason why corporate culture went off the rails and made itself vulnerable to all kinds of ridiculous ideological penchants that have nothing to do with productivity and profitability.

I’m most intrigued by Elon’s approach to staffing. When he first came to Twitter, he fired 3 out of 5 employees within a few weeks. Operating based on instinct, his goal was to toss out anyone whose work consists of overseeing others, scheduling meetings, and otherwise preening around as someone in charge. Whole teams were tossed out. His next level of fires consisted of those whose job was entirely made up and had nothing to do with the business goal.

Those standards meant firing most employees. And guess what? The site worked better immediately, and development of features took off at an incredible pace. Over the course of a year, he turned Twitter from being an amusement to becoming the essential tool that is X, easily the most valuable social-media space on the entire internet.

The most important element consisted in cleaning house. Draining the swamp, to echo a phrase.

So it is in nearly every U.S. firm of any medium or large size. Financial conditions since the turn of the millennium have favored puffed up labor forces plus huge salaries. The low-interest-rate environment meant endless credit and that in turn puffed up valuations. Management came to believe that all problems can be solved by hurling more human bodies at them, all the better if these people had credentials.

This was new. It completely changed the ethos of professional life.

We went through two decades of the following.

“We need better marketing.”

“Let’s put together a marketing team headed by a top-flight marketeer with a marketing degree from the best university.”

“We need better data.”

“Let’s hire a data expert to oversee a team of quants.”

“We need to focus on compliance.”

“Great, we’ll get a full team establishment to focus on nothing but.”

Thousands, hundreds of thousands, were hired in such fake jobs only to find that they have nothing to do but protect their jobs. So their jobs mostly consisted of coming up with ways to give themselves the appearance of having a job.

They mastered the art of the fancy spreadsheet, which is the perfect tool for creating the appearance of work without the reality, in addition to myriad task-planning platforms to chronicle who was doing what and when, all the better if the tasks had nothing to do with the driving purpose of the institution.

The whole system was easily gamed by employees and mid-level managers, complete with managerial techno-babble to trick higher ups. An entire language vocabulary developed around the ruse. If you could speak it, fill up space in meetings saying everything and nothing, you were good to go.

This went on for twenty or so years of growing puff and fluff in vast numbers of corporations and organizations. This became deeply entrenched in corporate culture to the point that hardly anyone knew how to do anything but trick their superiors into thinking they were essential. This became the very essence of professional life in America, only to be exposed variously in books about bullshit jobs, a perfect description of millions of high-paid positions.

This whole ethos cannot last forever. It was the lockdowns that exposed the racket, as whole workforces disappeared to their kitchen tables and nothing much changed about the functioning of the organization. That’s highly suspicious to say the least. But so dopey had corporate culture become that people actually believed it was possible to pull down a massive salary by doing nothing but chatting with coworkers on Slack and hanging out in video meetings.

Anyway, Elon has long known about this racket. He has never tolerated it at his companies. He developed a keen sense of who was scamming him, and sent out repeated and serious notices to everyone in his companies that they will be fired if they imagine that they will be paid to pretend to work. As a result, his companies make stuff and actually turn a profit.

These days much of his management strategy is above-board and posted to X. He has made a clear statement to the staff of X. He uses a three-pronged test of every employee. The person must be excellent, necessary, and trustworthy.

Let’s examine this.

Excellent means, above all else, a willingness to do real work. No fake work of telling others what to do but real work. That means knowing the industry, specializing in a task, keeping up on the task, doing it reliably even if it is boring and comes with no praise, and caring enough so that you work after hours and weekends, and not complaining constantly of being overworked, which is a sure sign of someone who is running a racket.

Excellent means having real skills, knowing software, committing real changes yourself, taking full responsibility, and managing several steps in the production process and knowing about the whole chain before and after. It doesn’t mean bossing people around, hiding work, hoarding tasks, hogging logins, denouncing colleagues, dripping poison in people’s ears, and so on.

Excellence means not forever kvetching about needing a work/life balance. That is another sure sign that the person is a no-goodnik. The reason is that it advances a false dualism: there is work and there is life and they are somehow unrelated. Work is life, the thing you do to accomplish something. A good vacation is work too in the sense that you are working toward some end such as seeing or experiencing new things. If you truly believe that when you are working, you are not living, there is a rather obvious problem.

I’ve conducted many job interviews and there are some sure signs that the person shouldn’t be hired. One is asking detailed questions about benefits and time off. Another is showing no particular interest in the processes and productivity of the company. Another is worrying that someone might contact them during off-hours. All these point to the reality that this person is not among the excellent.

As for necessary, that’s a really important standard of finding out if something should stay or go. If you are not necessary to a business, you should not be there. You are a waste, a net drain of resources. Period. Only those who are necessary should be employed. I’ve always had the rule “Do not hire until it hurts.” That is to say, do as much as you can yourself and only outsource what you are doing to others when you simply run out of time to be able to achieve the thing that is calling on your specialized talents. You should not look to do this but only do it when it becomes impossible to do otherwise.

The necessary standard applies in every area of life. Consider the COVID shots, for example. We don’t even have to worry about whether they are safe or effective. They were never necessary for 99 percent of the population even under the best assumptions of their effectiveness. That was the real failing all along. And yet hardly anyone talked about it.

Every unnecessary employee should be immediately fired. Keeping them on is robbery from the other employees who are necessary. As a worker, nothing is more demoralizing than being part of a company that pays and protects someone who does nothing valuable. Just having a person around like this—it can be one person or a thousand—demotivates everyone else. Why should I work hard, care, and invest myself so much when this loser just hangs out barking orders and otherwise is only pretending to do stuff?

The secret of staffing is this. Good employees desperately want bad employees to be fired. They long for it and pray for it to happen. When it doesn’t happen and failures continue to thrive, the management is discredited in the eyes of others. The continuation of employment of duds and ne’er-do-wells absolutely poisons the whole firm. Not even one should be tolerated even one day. Ever.

What about the third test, trustworthy? This is part of the other two. You notice that in any firm, the people who make the most trouble, through gossip and constant kvetching, are the layabouts who are neither excellent nor necessary. They sense their own lack of value and externalize it. They get progressively worse over time, through lies and plots and conspiracies. These people are poison to a company. They need to be fired yesterday.

Oddly, you will notice this too: the losers, loafers, poseurs, and fakes tend to hang out together. They gather in little corners. They meet for lunch. They hang out after hours at the bar. What are they doing? They are trashing the company. They are putting down competent people. They are disparaging the company and its products. They complain about being overworked and underpaid.

The beautiful thing about this tendency is that it tells managers whom to fire. Just fire the entire friend circle on grounds that it is untrustworthy and toxic to everything and everyone else. The sooner the better.

Elon’s rules are fantastic. They should also pertain in government too, and especially in government. If you are not excellent, necessary, and trustworthy, the president elected by the people should be in a position to fire you immediately. Every decent system of government should work this way, with not even one position that is outside control by the people. The entire administrative state needs to be abolished and turned into a government by the people again.

Excellent, Necessary, and Trustworthy. Those are the standards for every organization, corporate, nonprofit, and government. This is the way to fix the world, one termination at a time. Let them all find other real jobs, in the food service industry or hospitality. There they can learn a thing or two about what it means to work.

Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times or ZeroHedge.

Donald Trump has added roughly $1.8 billion more to his net worth after regulatory filings show that he increased his stake in Truth Social by a significant degree – bringing the former president’s ownership to nearly 65% in Trump Media & Technology Group (TMTG).

Trump secured an additional 36 million shares of TMTG, bringing his stake to 114.75 million shares, according to an April 30 filing with the SEC. According to the latest price of nearly $50 per share, Trump’s stake in TMTG is valued at around $5.7 billion.

The additional $1.8 billion was secured through 36 million additional “earnout shares” granted if TMTG hit certain performance metrics over a certain period, according to an April 15 filing. That said, Trump can’t sell any shares due to a six-month lockup agreement.

As the Epoch Times notes further, TMTG shares have been on a roller-coaster ride since the company listed on Nasdaq last month through a merger with a special purpose acquisition company (SPAC) and was snapped up by Trump supporters and speculators.

After the initial surge of interest, TMTG shares pulled back to around the $62 mark, where they traded until news broke on April 1 that, in 2023, the company suffered a $58 million loss.

Word of the loss sent its stock price on a downward trajectory, to $22.84 by April 16, which marked a bottom.

Since then, TMTG shares have rallied, with only one meaningful pullback between April 19–23, and are now trading at $49.90 per share, the highest since an April 3 close of $48.81.

Much of the $58 million loss that sent the stock price falling on April 1 appears to be related to an interest expense of $39.4 million on its outstanding debt, according to the 8-K filing. In 2022, the company made a net profit of $50.5 million.

The former president said on April 4 that media fixation on the $58 million loss was misguided. He touted TMTG fundamentals—which he said include over $200 million cash and no debt—as “very solid.”

TMTG CEO Devin Nunes echoed that in an April 1 statement: “Closing out the 2023 financials related to the merger, Truth Social today has no debt and over $200 million in the bank, opening numerous possibilities for expanding and enhancing our platform.”

“We intend to take full advantage of these opportunities to make Truth Social the quintessential free-speech platform for the American people,” he added.

TMTG’s meteoric rise and subsequent wobble sparked massive interest in shorting the stock—meaning betting money on its potential price decline.

Mr. Nunes expressed concern about “naked” selling of TMTG stock, which is the practice of traders selling shares of a company without borrowing them first, according to the letter.

The tech CEO added that the company has become the “single most expensive stock to short in U.S. markets” as of early April, arguing that traders now “have a significant financial incentive to lend non-existent shares” of the stock.

Pressing the issue further, TMTG issued a notice to DJT investors on April 23, highlighting steps they can take to prevent the lending of their shares by brokerage firms for the purpose of short selling.

“TMTG wants to clarify that brokerage firms may facilitate short selling in DJT shares by lending DJT shareholders’ shares held in margin accounts,” the notice reads.

“Through this practice, brokerage firms earn an alternative source of revenue by ‘lending’ shares to sophisticated and institutional investors who are betting that the stock’s price will fall. If the stock price in fact falls, then the brokerage firm and the sophisticated and institutional investors will profit while retail investors will not,” it added.

To prevent their shares from being loaned out for the purpose of short selling, DJT investors were advised to hold their shares in cash accounts at their brokerage firms, rather than in margin accounts.

They should also opt out of any securities lending programs, according to the notice.

Authored by Simon White, Bloomberg macro strategist,

The largest firms in the US are unsurpassably pulling ahead of their smaller rivals by earning more, investing more, holding more cash and buying back more of their stock.

The bull market is thus likely to remain historically lackluster and less robust as smaller companies continue to lag their bigger counterparts.

They say the rich get richer, and nowhere is that more true than for the most-valuable firms in the US. The “Magnificent Seven” is by now a well-worn moniker for a septet of some of the biggest companies in the world, such as Nvidia, Apple and Amazon.

Yet the widening leadership that the largest firms already enjoy extends beyond the monopolies or oligopolies that benefit many of them. They are also bolstering their financials and investing in the future in such a way that they are leaving their smaller brethren in the dust, rendering their lead invulnerable.

Large-cap indexes in the US have never been so concentrated, with the Magnificent Seven accounting for 27% of the S&P 500’s market cap. The outperformance really began to take off in the pandemic. Expanding to the largest 50 stocks in the S&P, we can see these began to significantly outpace the index’s smallest 250 members after 2020.

What lies behind this dominance? There are at least five reasons:

• Massive loosening of monetary policy in the pandemic

• The US running its largest ever pro-cyclical deficit

• Tech firms benefiting from mass working-from-home during Covid

• Companies taking advantage of the pandemic disruptions to raise margins by almost more than they ever have before – with the largest firms taking advantage of monopolies to raise prices the most

• The AI boom kickstarted by ChatGPT

These advantages are allowing the largest firms to move into an unbeatable position, condemning the smallest ones to playing permanent second fiddle. Such a set-up means the bull market is fated to be mild compared to historical bull runs, as well as being less robust.

Market concentration can also be seen in earnings, with the largest 50 firms accounting for 35% of the S&P’s total Ebitda. An acceleration in earnings at the largest firms since the pandemic is fortifying that effect. The top 50’s Ebitda has risen over 3.5x since 2020, while it has only doubled for the smallest 250 companies in the S&P.

Those earnings are further ingraining big firms’ advantage. They are now outspending their smaller cousins on future investment on an epic scale. Tech firms are ploughing money into GPU chips, data centers and energy production in a way that makes it increasingly impossible for others to ever catch up – not only in technology, but across the economy as AI gnaws away more and more at the need for many jobs.

 
The largest firms are also bolstering their cash positions. While smaller companies’ cash and marketable securities is up only marginally since the pandemic, the pile at large firms is going from strength to strength and is on a strong upward trend. The biggest 50 companies in the S&P hold 53% of the index’s total corporate cash, compared to only 8% for the smallest 250.

Having cash is essentially being long volatility. If anything unexpected happens, you are in a better position to deal with it. A financial shock causes margins to rise? That cash is there to cover it. A rival goes bust? The cash can be used to acquire it on the cheap. Smaller firms are increasingly short volatility and are vulnerable to or are unable to capitalize from unexpected shocks.

This cycle has been dominated by rising rates, so it’s no surprise interest expenses have increased across the board. The largest and the smallest firms have seen their quarterly interest costs climbing by about $7-8 billion since the pandemic.

Yet once again, the largest firms come out on top. If we look at interest coverage, i.e. the ratio of Ebit to interest expense, the biggest companies’ coverage has been pretty stable, while the ratio for the smallest has been falling. In level terms, the difference is even more stark, with the biggest companies’ earnings covering their interest 25 times, versus only six times for their smaller counterparts. Even taking into account the extra interest received by corporates, the largest companies still come out on top.

Furthermore, both small and large firms have taken on more debt in recent years, but bigger companies are less vulnerable to debt downgrades as their cash position has risen even more relatively.

If all that is not enough to make the largest companies’ shares more attractive, they are also diverting more of their accelerating earnings to buying back their stock, mechanically helping to boost their price through reducing the share count. Smaller companies have not had the wherewithal to match them, even though in the years before the pandemic total buybacks were similar for small and large firms alike.

Like a camel train in the desert, smaller firms are at the back and falling further behind. This has implications for the bull market. The current one is mild compared to previous episodes, consistently lagging the average bull market over the last 35 years.

But a look under the hood shows why. The biggest stocks are now cleanly outperforming the average bull advance.

However, the smallest S&P stocks are heavily lagging behind their average bull performance.

Without any significant change, the bull market is likely to continue to pale next to the more virile examples in recent decades.

That’s not to say the largest stocks are immune to a correction or periods of underperformance.

It certainly doesn’t help that they are viewed as the most crowded and consensus trades among US fund managers (according to BofA’s Global Fund Manager Survey).

Source: BofA

But it’s difficult to see — other than through their own unforced errors, or a complete reappraisal in attitudes to the near-term capabilities of AI and other new tech — how small companies can catch up on their larger rivals. Big is beautiful — and most probably now unassailable.

What goes up, must come down.

Cocoa prices turned lower on Thursday, extending a weekly decline that is slated to be the largest on record due to the evaporation of liquidity from large traders. 

Futures in New York plunged as much as 9.3% to the lowest level since mid-March and have tumbled 37.5% from the peak of a little more than $12,000 a ton in mid-April. 

If losses are sustained through Friday, then this week’s decline of about 30% will be the largest on record. 

“Price moves have also been more erratic as a liquidity crunch upended the market after it became more expensive for traders to maintain their positions,” according to Bloomberg. 

Jack Scoville, vice president at Price Futures Group, said the downward swings were happening “in a rather dramatic way” because of dwindling liquidity. He noted prices could still be “mostly a correction” and bulls still could push prices to near record highs. 

This week’s Hightower Report report showed that “commercial firms are delaying some of their purchases of West African cocoa until next season, which has pressured the cocoa market.” 

Judy Ganes, president at J. Ganes Consulting, said bulls need a “new spark” of bad weather reports in West Africa to bottom out prices. 

“Bull markets need to be constantly fed to be sustained,” and the multi-month price spike has created a “vacuum” from a lack of new buyers, Ganes said. 

Despite the market turmoil this week, Oil trader Pierre Andurand still has a $20,000 price target for later this year. 

Rep Jim Jordan (R-OH) has released several new pieces of previously unseen information revealing what Elon Musk called a “smoking gun” in regards White House pressure on Facebook to censor the lab leak theory of Covid-19.

First, Jordan shares a text message from Mark Zuckerberg to Sheryl Sandberg, Nick Clegg and Joel Kaplan – the company’s highest-ranking executives at the time, in which he asks if Facebook can tell the world that “the [Biden] WH put pressure on us to censor the lab leak theory?” – hours after Biden accused Facebook of “killing people.”

On July 16, 2021, Mark Zuckerberg texted Sheryl Sandberg, Nick Clegg, and Joel Kaplan.

Three of the highest ranking executives at Facebook.

Could Facebook tell the world that “the [Biden] WH put pressure on us to censor the lab leak theory?” pic.twitter.com/B1Wno3ayTW

— Rep. Jim Jordan (@Jim_Jordan) May 1, 2024

 Clegg responded that the Biden White house is “highly cynical and dishonest,” while Sandberg said that they were being scapegoated because the White House wasn’t hitting its vaccination numbers.

Facebook felt that they had been combatting alleged misinformation—aka censoring Americans—all year! pic.twitter.com/HQxQKrwX5z

— Rep. Jim Jordan (@Jim_Jordan) May 1, 2024

Facebook felt, in fact, that they had been ‘combating misinformation,’ (aka censoring Americans) all year.

Since February 2021, the company had been censoring the “Wuhan lab leak theory” “in response to … tense conversations with the new [Biden] Administration.” pic.twitter.com/lB9wg7tlDe

— Rep. Jim Jordan (@Jim_Jordan) May 1, 2024

Then in late May of 2021, Facebook finally stopped removing content regarding the lab leak theory – though they did demote it. When employees told Zuckerberg about the reversal and explained why they censored the lab leak theory in the first place, Zuckerberg replied that this is what happens when Facebook “compromises [its] standards due to pressure from an administration.”

These documents show the CHILLING EFFECT government coercion has on free expression.

Facebook knew the White House wanted them to censor, but they didn’t exactly know what or how much.

— Rep. Jim Jordan (@Jim_Jordan) May 1, 2024

According to Elon Musk, this is a “Smoking gun First Amendment violation.”

Smoking gun First Amendment violation

— Elon Musk (@elonmusk) May 2, 2024

We know the feeling!

Oh yeah, that https://t.co/w1mYccdhLK pic.twitter.com/Y6v64yAy6J

— zerohedge (@zerohedge) May 2, 2024

 

Authored by Zachary Stieber via The Epoch Times (emphasis ours),

A top scientist said in newly disclosed testimony that a lab origin for the virus that causes COVID-19 is possible, citing how Chinese scientists operated in less-than-ideal conditions.

“You can’t rule that out,” Ralph [‘humanized mice for testing bat Covid‘] Baric, a University of North Carolina professor and member of the U.S. National Academy of Sciences, said in the testimony.

Mr. Baric pointed to how researchers at the Wuhan Institute of Virology, located near where the first cases of COVID-19 were detected, conducted experiments on viruses under biosafety level two conditions, rather than the biosafety level three conditions typically employed elsewhere.

Mr. Baric has for years worked with Shi Zhengli and other Wuhan scientists, testing enhanced viruses in work they say helps prepare for outbreaks by making it easier to develop countermeasures such as vaccines.

Ms. Zhengli and other scientists in Wuhan were doing culturing work under biosafety level two conditions into 2020, “which I thought was irresponsible,” Mr. Baric said. That was “one of the main reasons why I felt that the potential laboratory escape hypothesis shouldn’t be, in essence, put under the rug.”

He was speaking on Jan. 22 to the U.S. House of Representatives Select Subcommittee on the Coronavirus Pandemic. The panel released the transcript on May 1.

Mr. Baric, who holds a doctorate in microbiology, told the subcommittee that he favored the theory that SARS-CoV-2, the virus that causes COVID-19, has a natural origin due in part to the odds being tilted that way.

“What’s more likely, is it a lab leak or is it natural processes? You’re looking at … a million exposures [between nature and humans] occurring over 17 years versus what happens in a laboratory setting,” Mr. Baric testified. He said that the diversity in nature ran hundreds of millions of times larger than the viruses in the Wuhan Institute of Virology. “If you consider that, it’s more likely to be a natural event than it is to come out of the laboratory,” he said.

Experts around the world remain divided on the origins of the pandemic. Some believe the available evidence supports a lab origin, highlighting how Chinese authorities destroyed evidence from the Wuhan Institute of Virology and the lower safety standards there. Others say data from a wet market in Wuhan suggest a natural origin.

Mr. Baric said he reviewed the data from the market and described it as showing the market was a “site of amplification.” But he noted that the studies suggest cases there didn’t appear until December 2019, while other papers have indicated cases started earlier in China.

“Clearly, the market was a conduit for expansion,” he said. “Is that where it started? I don’t think so.”

Peter Daszak, president of the EcoHealth Alliance organization—which for years sent U.S. taxpayer money to the WIV—signed an open letter published by The Lancet in 2020 that said, “We stand together to strongly condemn conspiracy theories suggesting that COVID-19 does not have a natural origin.”

Questioned about the definitive statement, Mr. Daszak told the panel on Wednesday that “we take all theories seriously” and that a lab origin for SARS-CoV-2 remains “possible but extremely unlikely, based on the evidence we have.”

“I just don’t think the data are there to support that. And I think that the evidence that this came from a natural spillover is huge and growing every week,” he added.

Mr. Baric said he was asked to sign the Lancet letter but declined because of his work with WIV. Mr. Daszak did not disclose his work with WIV in the conflicts of interest section. Mr. Baric instead signed a letter calling for an investigation into the origins that said “theories of accidental release from a lab and zoonotic spillover both remain viable.”

John Ratcliffe, a former director of national intelligence, told the subcommittee in 2023 that the lab leak theory “is the only explanation credibly supported by our intelligence, by science, and by common sense.” A declassified assessment that year said five intelligence agencies assess natural origin as more likely while two others lean towards a lab origin. Most agencies say the virus was not genetically engineered and all believe it was not developed as a biological weapon.

Xavier Becerra, the U.S. health secretary, said at a summit in April that any ideas about the origin are “speculation” because China has withheld some data. “We’re never going to quite know unless China opens up some more,” he said.

With most of the megatechs having already released earnings, all eyes were on the last Mag7 to report during the heart of earnings season (there is still Nvidia, but due to a calendar quirk that’s not for a month) which is also the company which until recently was the undisputed market cap world champion until it was overtaken by the mAIcrosoft juggernaut: Apple. Having failed to enjoy the same AI-driven euphoria some of its giga cap peers, Apple stock had languished for months and was in fact relegated by Goldman recently to the Meh 3 (AAPL, GOOGL, TSLA) and away from the Fab 4 (META, NVDA, MSFT, AMZN). But much of that was recovered after hours when AAPL not only reported blowout earnings but unveiled a massive, record-breaking $110 billion stock buyback program (because when your best product is the 5 pound neck brace known as the Vision Pro you have no choice but to buy your own stock since nobody else will do it for you) which sent the stock soaring after hours.

Here is what AAPL reported for the quarter ended March 31:

• EPS $1.53 vs. $1.52 y/y, and beating the estimate $1.50
• Revenue $90.75 billion, down 4.3% y/y primarily on China weakness, but beating the recently lowered estimate of $90.33 billion
  • Products revenue $66.89 billion, -9.5% y/y, just missing the estimate $66.95 billion
    • IPhone revenue $45.96 billion, -10% y/y, beating estimate $45.76 billion
    • Mac revenue $7.45 billion, +3.9% y/y, beating the estimate $6.79 billion
    • IPad revenue $5.56 billion, -17% y/y, missing estimate of $5.91 billion
    • Wearables, home and accessories $7.91 billion, down 9.6% y/y, and badly missing estimate $8.29 billion now that the Vision Pro is a confirmed flop
  • Service revenue $23.87 billion, +14% y/y, beating the estimate $23.28 billion
  • Greater China rev. $16.37 billion, -8.1% y/y, beating the estimate $15.87 billion. This was probably the one item everyone was closely watching due to the big swing impact the recent plunge in China sales would have on the company. It ended up being not as bad as feared.

Going down the line:

• Total operating expenses $14.37 billion, higher than the estimate $14.33 billion
• Gross margin $42.27 billion, +0.7% y/y, higher than the estimate $42.01 billion
• Cash and cash equivalents $32.70 billion, below the estimate $36.83 billion

And so on.

Looking at a breakdown of sales by product category we find that, as expected, iphone sales dropped 10% in a quarter which most knew would be ugly for the iphone maker, but at $46bn they just barely beat expectations of $45.8 billion. The rest of the product suite was mixed with Macs surprisingly beating estimates while both iPads and wearables missed. In any case the trend is clear: while sales may not be plunging, they have certainly topped out and the only ting that is still rising is Services.

Looking at a geographic breakdown we find that while sales declined across almost every region, with the notable exception of Europe…

… the 8.1% drop in China sales was not nearly as bad as consensus expected, which fear a double digit drop was coming.

CFO Maestri said that the China concerns were overblown. “We were happy with our results in China,” he said. “The reality is different from maybe what you read at times.”

CEO Cook also pushed back on the idea that the iPhone was suffering in the country, saying that revenue from the device actually grew in mainland China. The weakness stemmed from other parts of the business, he said.

“Other products didn’t fare as well,” he said on a conference call. “And so we clearly have work there to do.”

At the same time, Bloomberg notes that Apple hasn’t shown that new product categories can reinvigorate growth. It canceled work on a self-driving car in February, eliminating a project that some had hoped could become one of its famous “next big things.”

Services were a relative bright spot, growing 14% to $23.9 billion in revenue. That topped Wall Street expectations of $23.3 billion: the category includes Apple Music, the TV+ streaming platform and iCloud subscriptions, but its revenue primarily comes from the App Store. But that business is under pressure from regulators, with Apple being forced to allow third-party marketplaces and payment services in the European Union. Depending on how Apple fares in a legal battle with the Justice Department, it may have to make changes in the US as well.

The company did push into the mixed-reality headset market this year, with the Feb. 2 debut of the Vision Pro. But that product is off to a slow start and could take years before it adds meaningfully to Apple’s revenue. Apple didn’t disclose Vision Pro sales figures on Thursday, but said that the device is generating interest among corporate customers.

But while the results were solid, and beat reduced estimates it’s what was not part of the income statement that stunned investors: the company announced a mind-blowing new stock buyback program, of $110 billion, beating the previous record set by – who else – Apple, and which itself is bigger than the market cap of Boeing (although now that all Boeing whistleblowers have died, expect BA to soar), and also bigger than both GM and Ford combined!

If that wasn’t enough, AAPL also predicted a return to growth in the current period, sparking optimism that a slowdown is easing. A lack of innovative new devices has contributed to slow sales at Apple, but the company looks to begin fixing that on May 7. That’s when it plans to unveil new iPads — the first updates to its tablet line in 1 1/2 years.

The results came as a relief to investors, who have been waiting for the iPhone maker to pull out of a long slump. Apple has posted sales declines in five of the past six quarters, hurt by a sluggish smartphone market and headwinds in China. The company had warned analysts in February that revenue in the latest period would be down about 5% from a year earlier.

In the current period, Apple expects sales to climb by a percentage in the low single digits. The company predicted that both its iPad and services business would grow by a rate in the double digits, but declined to give a forecast for the iPhone — its flagship product.

But wait there’s more: the iphone maker also is planning a long-awaited push into generative artificial intelligence. In June, Chief Executive Officer Tim Cook is expected to lay out Apple’s AI strategy at its annual Worldwide Developers Conference.

“We are making significant investments in the space,” Chief Financial Officer Luca Maestri told Bloomberg Television’s Emily Chang. “We believe we are well-positioned.” Cook said Thursday that Apple will stand out from its AI rivals by tightly integrating hardware and software, using in-house chips, and making privacy and security a priority.

AAPL shares soared as much as 7.9% in extended trading Thursday before easing back a bit. Apple had been down 10% to $173.03 this year through the close, and is now still down modestly for the year.

Hamas is praising the government of Colombia and its leftist president Gustavo Petro for on Thursday formally cutting diplomatic ties with Israel after accusing its military of genocide against the Palestinian people. 

A Hamas statement the same day hailed it as a “recognition of the suffering of Palestinian people” and further urged more Latin American countries to follow suit. Bolivia was the first to do so earlier in the nearly 7-month long conflict.

The Hamas statement said countries around the globe must cut ties with “a rogue and fascist entity that is continuing its crimes against our people.” Interestingly the language seems geared toward appealing to Global South countries who have long struggled against colonial powers.

Petro was elected in 2022, and that’s when the country’s relations to Israel dramatically shifted. He is Colombia’s first Left-wing president in its history, and before that Tel Aviv and Bogota enjoyed strong, positive relations.

In a Wednesday speech before a May Day rally in the capital, Petro said,”Tomorrow (Thursday) diplomatic relations with the state of Israel will be severed… for having a genocidal president.” 

“If Palestine dies, humanity dies, and we will not let it die,” he said at one point in the speech. He proclaimed that “democratic peoples cannot allow Nazism to reestablish itself in international politics.”

However, Bloomberg has noted that his motives could partly be to distract from the ongoing economic crisis in the country:

Petro is looking to counter large anti-government rallies that took place on April 21 and said his administration will send a package of bills to congress meant to boost economic growth.

The package will include measures that force the financial sector to provide cheap financing to productive sectors, Petro said.

“It will consist of bills that generate forced investment in the Colombian private financial system aimed at credits for small, medium, and large industries, agriculture, and tourism in Colombia, to reactivate the country,” he said.

Petro has for months been a fiery vocal critic of Israel, having first threatened to sever relations with Israel back in March. Late last year he also announced plans to open an embassy in the Palestinian West Bank city of Ramallah. Israel’s foreign ministry has slammed the “antisemitic” move to sever official relations.

“if Palestine dies, humanity dies.”

Colombia’s President Gustavo Petro says the country is cutting diplomatic ties with Israel over its war on Gaza. pic.twitter.com/XZxpHE0rTy

— Al Jazeera English (@AJEnglish) May 2, 2024

“Relations between Israel and Colombia always were warm and no antisemitic and hate-filled president will succeed in changing that,” Katz wrote on X. “The state of Israel will continue to defend its citizens without worry and without fear.”

It remains to be seen whether other Left-leaning governments in the region follow Colombia and Bolivia. Already Chile has recalled its ambassador from Israel. 

Authored by Matt Taibbi via Racket News,

Last week, in “It’s Not Me, It’s You,’” I wrote about a booming new op-ed genre, the editorial that bashes hick voters for their incorrect “Perception of the Economy.” Pundits attack voters’ “stubbornly low” assessments, producing poll numbers that leave experts “baffled” and wondering when people will catch up to “reality.”

In a bit of Racket malpractice, the article didn’t mention Paul Krugman of the New York Times, who’s written a collection of those articles and become the unofficial tribune of the “Perception of the Economy” movement. As scientists in classical times believed the sun revolved around the earth, Krugman believes all things revolve around Donald Trump, the subject of this recent piece of wizardry:

Krugman’s “quack economics” fears are prompted by a Wall Street Journal report claiming Trump advisers are “quietly drafting proposals that would attempt to erode the Federal Reserve’s independence” if Trump wins in November. As the Times “Dealbook” page surmised, “The overall goal is to give Trump what he wants: more say on interest rates,” with those unnamed sources claiming Trump aides discussed requiring Fed officials to consult with the president before raising or lowering rates.

Krugman spins a series of elaborate nightmare hypotheticals on the basis of this one piece of information, concluding:

How would Trump respond if things went wrong? Remember, he suggested we look into fighting Covid by injecting disinfectant. Why expect him to be any less inclined to magical thinking in dealing with, say, a new surge in inflation?

Paul Krugman, worried about a magical thinking response to a “surge in inflation.” Why would that be funny? Let’s review:

Six months ago, Krugman made an announcement on Twitter. “The war on inflation is over,” he declared. “We won, at very little cost.” The pronouncement stood like the Colossus of Rhodes over a heroic graph:

This was the economic equivalent of George Bush’s “Mission Accomplished” stunt. Krugman graphed the Consumer Price Index excluding “shelter, food, and used cars.” The CPI, which ostensibly tracks changes in the price of consumer goods, is already a quasi-bogus number whose quirky methodology allows government to make prices seem lower. That wasn’t enough for Krugman, who simply removed three of the biggest household spending variables to take the real CPI of 3.7% and jam it below 2%, creating his own bespoke inflation monitor.

Krugman was instantly mocked, even by other mainstream outlets. “Nobel Economist Paul Krugman Mocked For Saying Inflation is Over if You Exclude Most of What People Buy,” was the take in Business Insider. “Inflation is not a problem if you don’t buy anything,” added TalkMarkets. The funniest response showed Krugman had zoomed past The Onion and become a Babylon Bee headline:

Krugman backpedaled slightly, but couldn’t help himself and went back month after month to argue the numbers were better than they seemed. In January, he posted the “NY Fed measure of underlying inflation” to confirm “the war is over, and we won.” In February, for instance, he posted a chart reminding us that “if it weren’t for owners’ equivalent rent, a price nobody pays, nobody would be talking about inflation.”

All this came a year after he had to write a column called “I Was Wrong About Inflation,” admitting to being on “Team Relaxed” when it came to the potential downside impact of a massive monetary rescue plan. One of the reasons for his miscalculation? “A big piece of the plan was one-time checks to taxpayers, which we argued would be largely saved rather than spent.”

Krugman calculates consumer prices without housing or food and assumes people in the middle of an economic crisis won’t spend six hundred bucks, but thinks other people are guilty of magical thinking on inflation?

Putting a bow on all this, in the “magical thinking” piece Krugman indulged in a catastrophic fantasy about Trump potentially devaluing the dollar to stimulate exports, an idea he ripped as “clearly inflationary — raising import prices and overheating a U.S. economy that is already running hot.” One can only assume he means hot in the Goldilocks sense, i.e. not too much inflation, and not too little, but just hot enough.

One last note. Krugman rails against Trump’s reported plans to expand tariffs. This is interesting because when Joe Biden told the World Trade Organization to shove it a year and a half ago after the WTO declared Trump’s last tariff regime (which Biden was continuing) illegitimate, Krugman declared, “It’s up to America to determine whether its trade actions are necessary for national security,” and “an international organization has no right to second-guess that judgment.” This came in an article showing Biden speaking sternly into a microphone with a big ‘Murican flag in the background, titled, “Why America is Getting Tough on Trade.”

I’m not endorsing any of Trump’s economic ideas, but the issue here is the naked partisanship of Krugman’s act. When Trump was in office, he was writing articles like “Why is Trump a Tariff man?” and declaring that his tariffs were about “rewarding his friends,” “power,” and “cronyism,” rather than any kind of populist policy (because Trump voters are “driven more by animosity toward immigrants and the sense that snooty liberals look down on them than by trade policy”). When Biden’s in office, extending the exact same tariffs, Krugman waves the flag and hums Lee Greenwood for his “tough America” columns. Now we’re back to worrying about Trump’s “magical thinking” and “petty strongman” tendencies.

This is worth pointing out only because partisan pettiness has become the default explanation for those “perception of the economy” pieces I wrote about last week. Krugman has hit this theme countless times, most recently in early April:

Quoting the Wall Street Journal in saying, “When it comes to the economy, the vibes are at war with the facts,” Krugman adds:

The elephant in the room — and it is mainly an elephant, although there’s a bit of donkey too — is partisanship. These days, Americans’ views of the economy tend to be determined by political affiliation rather than the other way around… Republican politicians and media are united in trashing the Biden economy… Democrats, on the other hand, are divided, with some progressives talking down the economy because they fear that acknowledging the good news might undermine the case for strengthening that weak social safety net.

Got that? Ordinary people don’t have honest opinions about the economy, just partisan reactions, and when progressives say negative things, it’s only because they’re lying for a good cause, i.e. stumping for a wider safety net. Everybody is dishonest except the experts like Krugman, who have facts where the volk only have vibes, and wrong ones at that.

What’s so irritating about the “partisan divide in economic perceptions” becoming the reigning explanation for negative public attitudes about the economy is that they’re such obvious projection. With Trump on the ballot this November, no mainstream pundit will dare speak ill of Joe Biden’s economy, whether it deserves it or not, which is both confusing and galling to audiences, and almost certainly adds to the hesitancy reflected in the polls. How can anyone feel good about things if they sense the “experts” wouldn’t tell them even if they saw a crash coming?

It’s one thing to be called stupid and partisan, but having Paul Krugman do it is almost a compliment. Almost.