Politico Becomes Pravda: Use Of Word "Crisis" Banned When Describing Border Crisis
Politico has turned narrative-shaping up to 11 with it's latest decision to ban its journalists from using the word 'crisis' to describe the flood of illegal immigrants currently overwhelming US border detention facilities after President Biden essentially invited them with campaign promises followed by a flurry of Executive Orders on immigration which all but rolled out the red carpet.
According to an internal Politico memo written by deputy production director Maya Parthasarathy and obtained by the Washington Examiner, journalists are to: "Avoid referring to the present situation as a crisis, although we may quote others using that language while providing context. While the sharp increase in the arrival of unaccompanied minors is a problem for border officials, a political challenge for the Biden administration and a dire situation for many migrants who make the journey, it does not fit the dictionary definition of a crisis," adding "If using the word 'crisis,' we need to ask of what and to whom."
And while Biden himself used the word "crisis" when describing the border situation last week, the White House has repeatedly denied that the word applies - which means Politico is toeing the official party line regarding the border crisis.
"Avoid emotive words like onslaught, tidal wave, flood, inundation, surge, invasion, army, march, sneak, and stealth," the memo reads.
Dictionary.com defines a crisis as "a condition of instability or danger, as in social, economic, political, or international affairs, leading to a decisive change." The Cambridge English Dictionary describes a crisis as "a time of great disagreement, confusion or suffering."
The White House has denied the word applies, but Biden and spokeswoman Jen Psaki have both used the word in unguarded moments, prompting walk-back efforts. Politico did not respond to a request for comment.
Border patrol officials logged over 14,000 unaccompanied minors in custody last month. The Department of Homeland Security estimates that roughly 117,000 migrant children will enter the country by the end of the year. For context, 80,000 unaccompanied minors entered through the southern border in all of 2019, when the media seemed to have no problem labeling the surge as a crisis.
After immense pressure from both Republicans and Democrats, Biden himself referred to the situation on the border as a " crisis" earlier this month.
"We’re going to increase the number. The problem was that the refugee part was working on the crisis that ended up on the border with young people," he said following a round of golf. "We couldn’t do two things at once, but now, we are going to increase the number."
"The president does not feel children coming to our border, seeking refuge from violence, economic hardships, and other dire circumstances, is a crisis," she said when asked about his comments. "He does feel that the crisis in Central America, the direct circumstances that people are fleeing from, that that is a situation we need to spend our time, our effort on, and we need to address it if we are going to prevent more of an influx of migrants from coming in years to come."
* * *
The report also notes that Politico has casually used the word crisis to describe 'a wide array of other topics.'
Last October, for example, the outlet reported on the "crisis" of "empty retail space."
Last June, there was a "police brutality crisis."
They regularly report on the "climate crisis"
But more than 18,000 unaccompanied migrant children crammed into overflowing federal facilities - requiring the government to rent hotel rooms along the border - is not a crisis, according to the Biden administration and Politico - who going forward must avoid using terms "which could portray migrants as a negative, harmful influence" despite the fact that their presence is extremely 'negative' and 'harmful' to legally immigrated low-income workers who now have more people to compete with for a limited number of low-income jobs.
Intel Beats But Stock Slides On Poor Profit Margin, Disappointing Guidance
Intel is currently undergoing a dramatic transformation, and as such its just completed quarter is hardly indicative of what to expect, moments ago INTC reported revenue and earnings which both handily beat expectations, while the company also guided higher. Here are the key Q1 numbers:
Revenue 19.7BN, down 0.8% Y/Y, but beating exp. of 17.86BN
Adj. EPS 1.39, beating exp. of 1.15
Looking closer at the company's segments reveals the following revenue picture:
Data Center Group Revenue $5.56 billion, -21% y/y, estimate $5.89 billion
Internet of Things revenue $1.29 billion, +46% y/y, estimate $781.5 million
Mobileye revenue $377 million, +48% y/y, estimate $332.6 million
Adjusted EPS $1.39 vs. $1.45 y/y, estimate $1.14 (range $1.10 to $1.25)
Yet not all was great: Intel's gross margin was 55.2% missing analyst expectations of 57.98%, as the global semiconductor supply-chain fiasco is clearly impacting even companies like Intel. Why does this matter - because until 2019 margins were regularly above 60%, but it was the covid pandemic that really hammered profit margins.
There was more bad news in the company's Q2 guidance, where the company projected EPS that missed the Wall Street estimate by 6 cents, despite projecting stronger revenue. This makes sense in a world where Intel is having troubles passing on rising costs:
Sees adjusted revenue about $17.8 billion, beating the estimate $17.64 billion (range $17.14 billion to $18.22 billion); Sees GAAP revenue $18.9 billion
Sees adjusted EPS $1.05, missing the estimate $1.11
However, the poor Q2 guidance was offset by Intel's stellar full-year revenue forecast, which was raised by $500MM to $72.5BN, while EPS is expected to come just above the Wall Street consensus:
Sees adjusted revenue $72.5 billion, up from the $72 billion forecast previously, beating the estimate $72.09 billion; Sees GAAP revenue $77.0 billion, saw about $76.5 billion
Sees adjusted EPS $4.60, saw $4.55, beating the estimate $4.56
Intel admits to sandbagging guidance, saying that the forecast could be even strong if supply (i.e., the chip shortage) normalizes considering the record demand for PCs. Sure enough, notebook platform volumes increased 54% compared with last year, as demand for laptops remains off the charts:
*INTEL GAVE CONSERVATIVE FORECAST, COULD BE HELPED BY SUPPLY
*INTEL SAYS PC ENVIRONMENT VERY STRONG, COULD BE RECORD YEAR
*INTEL SEES NO INDICATION OF PC DEMAND SLOWDOWN
Some more headlines from an interview with CEO Gelsinger:
Intel Upside Constrained by Supply, CEO Gelsinger Says
Intel Says PC Environment Very Strong, Could Be Record Year
Co. Gave Conservative Forecast, Could Be Helped by Supply
Co. Sees No Indication of PC Demand Slowdown
Intel Profitability in 2H Crimped by Costs, Competition
CEO Says Will Be Aggressive in Gaining Market Share
CEO Says Signs of Enterprise Spending Returning
Co. Has 50 Customers in Pipeline for Foundry Effort
Despite the solid beat and even more solid full year guidance, investors were not excited by the company's disappointing quarterly guidance and margin miss, and pushed the stock lower after hours, although much of the kneejerk snap lower has been recovered.
Since when do we need the cops to intervene in the recreational stabbings of our youth?
Just when I thought that America couldn’t possibly get any softer, people start suggesting that there’s a role for the police in preventing knife murders. The snowflake generation strikes once again.
Is there any tradition that the radicals won’t ruin?
As the brilliant Bree Newsome pointed out on Twitter, “Teenagers have been having fights including fights involving knives for eons.” And now people are calling the cops on them? I ask: Is this a self-governing country or not? When Newsome says “we do not need police to address these situations by showing up to the scene & using a weapon,” she may be expressing a view that is unfashionable these days. But she’s right.
“we should let the kids stab each other to death” is quite the take
Disappointingly, my colleague Phil Klein has felt compelled to join the critics. In a post published yesterday, Phil asked in a sarcastic tone whether the police should “somehow treat teenage knife fights as they would harmless roughhousing and simply ignore it.”
My answer to this is: Yes, that’s exactly what they should do - yes, even if they are explicitly called to the scene.
I don’t know where Phil grew up, but where I spent my childhood, Fridays were idyllic: We’d play some football, try a little Super Mario Bros, have a quick knife fight, and then fire up some frozen pizza before bed.
And now law enforcement is getting involved?
This is political correctness gone mad.
It’s hypocrisy, too.
Who among us hasn’t come within a second or two of murdering someone else with a steak knife? My best friend in school, Bobby “The Blade” Simpson, used to throw shivs at the smaller kids in the music room. Did we need the authorities to step in when that happened? No, we did not.
And if something went wrong? Well, that’s why we had substitutes.
In all honesty, I worry that this sort of helicopter policing is making us weak. Back in my day, the people who survived a good stabbing came out stronger for it. I learned a lot of lessons from my time in the ring: Self-reliance, how to overcome fear, the importance of agility, the basics of military field dressing. And, given the turnover, I also learned how to make new friends.
Today, the free-range generation to which I belong is dying out — and, this time, it is not from the wounds inflicted by everyday teenage knife fights but because our politicians and activists simply cannot leave us be. From the time of the Colosseum, our civilization has had a tradition of lightly regulated, highly entertaining combat. Who are we, exactly, to think we know better?
"Way To Go Joe!" - Bonds Bid As Biden Tax Plan Tanks Stocks
A Bloomberg report suggesting Biden will pay for some of his "infrastructure" bill by doubling the capital gains tax for high income Americans sparked some brief unrest in US equity markets today...Nasdaq was the hardest hit on the day but we note that Small Caps were sold most after the Biden headline...
Notably, Small Caps briefly got green for the week (after being down over 4% on Tuesday) before Biden buggered it all up...
This is in line to be the worst week for stocks since mid-Feb.
White House press secretary Jen Psaki explained that President Biden "thinks spending can be on the backs of the wealthiest Americans who can afford it... and our economic team believes that won't have a negative impact."
Sgt. William Kelly, the second highest-ranking official in the Norfolk Police Department’s internal affairs division, has been fired for making an anonymous donation to the defense fund for Kyle Rittenhouse.
The donation (revealed after a security breach of the Christian crowdfunding site GiveSendGo) was accompanied by a note saying that Rittenhouse did “nothing wrong.” Despite the obvious attack on free speech and associational rights, there has been little concern raised in the media or by legal experts.
Kelly is an 18-year veteran of the department. He made an anonymous donation and was not publicly speaking as an officer.
He included a note “God bless. Thank you for your courage. Keep your head up. You’ve done nothing wrong.”
Norfolk City Manager Chip Filer said in a statement that Police Chief Larry Boon agreed the officer violated city and departmental policies against “egregious comments.”
Section 5.1 of the Norfolk Police Manual prohibits any conduct or comments, including off-duty, that would produce a “loss of respect” for the department or bring it into “disrespect.” It is the type of ambiguous standard that is anathema to free speech and associational rights.
Not only was Kelly fired, but Filer and Boon carried out the action in just 72 hours - leaving little time for a defense or full investigation.
If this was an anonymous contribution, it is hard to see how it violates any rule on public commentary. Reports indicate that Kelly was the victim of a security breach. It is also notable that Rittenhouse has not been found guilty and is entitled to a presumption of innocence. Rittenhouse insists that he was acting in self-defense after he was attacked. That is obviously a highly contested defense that has divided many. It is ultimately a matter for the court and the jury to decide.
Police officers (and paramedics) should be able to make donations to legal funds without being harassed by the media or fired by their departments. The fact that Kelly added a message anonymously to a legal defense fund does not implicate his department or fellow officers. If the account of the breach is true, the comment was not intended to be made public.
It would amount to the firing of an officer over a communication intended to be non-public - the same status as a private communication. The question is whether the department would fire an officer who made such a remark privately in an email to friends that was later hacked.
In my view, the case raises very serious concerns over free speech and associational rights. The Utah case is particularly chilling as the media attempts to embarrass or harass public employees who donate to controversial causes or legal defense funds.
At a minimum, the department should have allowed for a reasonable period of investigation and consideration of these issues before terminating Kelly. Putting aside his 18 years of public service, Kelly remains a citizen with basic rights accorded to him under the First Amendment.
US States Close Mass Vaccination Centers Due To Falling Demand
As we noted a few weeks ago, America has smashed President Biden's revised target of 200M COVID-19 jabs in arms by the end of his first 100 days in office while moving up his target for having the entire adult population vaccinated. According to data from the CDC, the US has easily surpassed 200M jabs-in-arms. But as the COVID-19 cases climb, the world is beginning to rethink expectations surrounding herd immunity, while also questioning the efficacy of vaccines as some patients are reinfected by "mutant" COVID-19 strains, or - even more rarely - fall victim to strange side-effects (like cerebral blood clots).
As the map below shows, vaccination rates are extremely high along the coasts, while the southeast, a bastion of vaccine skepticism, has seen more resistance.
The upshot, is that the projections for 100% herd immunity shared this spring by Sell Side analysts at banks like Morgan Stanley now appear almost absurdly over-optimistic.
Despite the fact that millions of Americans have yet to be vaccinated, mass vaccination centers are shutting down across the US (with the exception of California and the northeast). Here's breakdown of recent vaccination site closures, courtesy of Forbes:
Palm Beach County, Florida, is shutting down three mass vaccination sites in favor of new mobile vaccination efforts, the Palm Beach Post reported Wednesday, after the sites were operating at only 50% capacity this week.
Mass vaccination sites in Clarkesville, Georgia, and North Carolina will shut down by the end of May, officials announced this week, and Summit County, Ohio, canceled a planned mass vaccination clinic on April 27 citing “decreased demand.”
Several Texas mass vaccination sites in Williamson and Galveston counties are shutting down, and Galveston officials asked the state not to send the county any vaccine next week as the number of residents making vaccine appointments declines.
Waukesha County, Wisconsin, will likely shut down its mass vaccine site to new first doses by the end of the week, as the county hits its target of 60% of eligible residents being vaccinated.
Some vaccination locations have made plans to close before this week: Sites in Las Vegas and Cascade County, Montana, were announced to be shutting down last week, for instance, while Mercer County, Ohio, shuttered their drive-through mass vaccine clinic earlier in April.
Officials are reporting noticeable decreases in the number of people getting inoculated in areas where sites are not closing, including in Texas, Idaho, Missouri,Alabama, Maine and Maryland, where Gov. Larry Hogan predicted Wednesday the state would be shutting down mass vaccination sites “at some point soon.”
America has turned into a consumption economy. The problem is, economies can’t run on consumption...
Peter Schiff explains in this clip from a recent interview.
Consumption economies are bubble economies.”
A vibrant, healthy economy needs production.
Because you cannot consume what is not first produced. Since our economy is so weak and we’re unable to produce the things that we’re consuming, America relies on strong international economies that are able to produce what we consume.”
The question is how long will the rest of the world subsidize America’s standard of living? How long will other countries prop up a dysfunctional, weakening US economy by supplying it with goods it cannot produce for itself?
And then the dollar crashes and that’s the end of this game. Because to the extent that we can only spend our dollars on the things that we produce ourselves, that’s where it hits the fan, because we’re not producing things. And then price increases are going to explode in a much more visible manner.”
Peter said this is already happening.
Prices are going up all over and we want to pretend that, well, this is a one-time thing. It’s transitory. It’s because of supply shocks or shortages. No. It’s a surplus of money. That is the problem. And we’re creating even more.”
When you break it all down, all of this is inflation. Money printing and shopping are driving the economy. Americans are sitting at home getting stimulus checks and spending the money. But they’re not making anything. There is little production.
Americans are buying stuff that they didn’t produce. There’s no productivity related to this money printing. And so we’re going to see a surge in prices.”
Tesla Model Y Can Be “Tricked” To Drive With "Nobody In The Drivers Seat", Consumer Reports Says
Adding to the ongoing discussion this week about a fatal Tesla wreck in Houston where two men died, Consumer Reports has come out and dropped a bombshell on Thursday, independently corroborating the notion that Tesla Model Y's can drive themselves with no one in the drivers seat.
Consumer Reports said it could “easily get the car to drive even with no one in the driver’s seat,” according to CNBC. The auto reviewer said it was able to trick the system by putting a weighted chain on the steering wheel and keeping the seatbelt buckled.
Consumer Reports’ senior director of auto testing, Jake Fisher, told CNBC: “In our test, the system not only failed to make sure the driver was paying attention -- it couldn’t even tell if there was a driver there at all.”
Consumer Reports posted video of, and detailed how they ran, their test:
Fisher engaged Autopilot while the car was in motion on the track, then set the speed dial (on the right spoke of the steering wheel) to 0, which brought the car to a complete stop. Fisher next placed a small, weighted chain on the steering wheel, to simulate the weight of a driver’s hand, and slid over into the front passenger seat without opening any of the vehicle’s doors, because that would disengage Autopilot. Using the same steering wheel dial, which controls multiple functions in addition to Autopilot’s speed, Fisher reached over and was able to accelerate the vehicle from a full stop. He stopped the vehicle by dialing the speed back down to zero.
Fisher commented: “The car drove up and down the half-mile lane of our track, repeatedly, never noting that no one was in the driver’s seat, never noting that there was no one touching the steering wheel, never noting there was no weight on the seat. It was a bit frightening when we realized how easy it was to defeat the safeguards, which we proved were clearly insufficient.”
Consumer Reports also said that Tesla's Autopilot can operate where there is no lane lines, which was the case in the Houston wreck.
“Any system that looks at lane lines can be tricked. They may see something as a lane line that is not, like a car strip, a curb may be interpreted as landline and so on.” Fisher continued: “Tesla is falling behind other automakers like GM and Ford that use technology to make sure the driver is looking at the road on models with advanced driver assist systems.”
Additionally on Thursday, Bloomberg reported that several Senators had "raised questions about Tesla safety" in a new letter to the NHTSA. Senators Blumenthal and Markey expressed concerns about a "possible emerging pattern" of safety concerns - to which we reply: where have you been the last 2 years?
Recall, yesterday we noted that one of the men who died in the fiery Houston Tesla wreck that we have been reporting on over the last few days has been identified as 59-year-old Dr. William Varner. Varner was a doctor at the local Memorial Hermann Health System. The health system released a statement on his death overnight heading into Wednesday, stating:
"Dr. Varner was a tremendous human being who personally impacted many throughout our Memorial Hermann The Woodlands Medical Center family over the years. Our thoughts and prayers go out to his entire family, and also to those who had the privilege of working and serving alongside him in various capacities. He will be dearly missed by so many."
Recall, Mark Herman, Harris County Constable Precinct 4, told Reuters that the police will serve search warrants on Tesla to secure data from the wreck.
He was responding to a tweet by Tesla CEO Elon Musk, who said, "Data logs recovered so far show Autopilot was not enabled." Herman appeared quite skeptical: "If he is tweeting that out, if he has already pulled the data, he hasn't told us that" Herman told Reuters. "We will eagerly wait for that data."
“We have witness statements from people that said they left to test drive the vehicle without a driver and to show the friend how it can drive itself,” Herman said according to the Reuters report.
Recall, the Tesla slammed into a tree near Hammock Dunes Place in the Houston Area, a local NBC affiliate reported. The wreck was in the "Carlton Woods subdivision near the Woodlands," the report says. According to authorities, "the vehicle failed to negotiate a cul-de-sac turn, ran off the road and hit the tree."
Of the two occupants, one was seated in the passenger seat of the front of the car while the other was seated in the passenger seat of the back of the car. NBC says it is "trying to determine whether the vehicle may have been in automatic driving mode due to the victims’ seating, but that information is not available yet."
A reported 23,000 gallons of water needed to be used to extinguish the flames because the Tesla's battery "kept reigniting". Two federal agencies will investigate the deadly crash of a Tesla Model S over the weekend near Houston, Texas, in which local authorities said no one was behind the wheel.
The National Highway Traffic Safety Administration (NHTSA) and the National Transportation Safety Board (NTSB) are aware of the fatal Tesla crash that killed two, which occurred on Saturday night in Spring, Texas. Both agencies are sending investigators to conduct a safety analysis.
"NHTSA is aware of the tragic crash involving a Tesla vehicle outside of Houston, Texas. NHTSA has immediately launched a Special Crash Investigation team to investigate the crash. We are actively engaged with local law enforcement and Tesla to learn more about the details of the crash and will take appropriate steps when we have more information," the NHTSA told local news KHOU11 in a statement.
And the NTSB tweeted Monday afternoon that their investigation team, "in coordination with the Harris County Precinct 4 Constable's Office," will "conduct a safety investigation of the fatal Apr. 17, 2021, Tesla vehicle crash near Spring, TX."
NTSB also said their "investigation would focus on the vehicle's operation and the post-crash fire. NTSB investigators will arrive in the area later this afternoon."
The largest company headquartered in Georgia, Home Depot, is being told that if it fails to publicly denounce the state’s voting law reform legislation, it will be boycotted. This isn’t coming from Black Lives Matter, per se. The corporation is being held hostage by religious leaders who demand specific talking points be delivered … or else.
Corporations, especially those headquartered in Georgia, have come out against the legislation signed by Governor Kemp. Republicans describe the bill as one that addresses election integrity while Democrats call it a voter suppression law – “Jim Crow 2.0”. Coca-Cola and Delta were among the first to make a point to virtue-signal after the governor signed the bill, only to be exposed as taking part in the process and giving input into the legislation. Both were fine with the law until the governor signed it and grievance activists did their thing. Coke soon discovered that not all of its consumers think that companies should be making policy – that ‘s the job of lawmakers- and now it is trying to clean up the mess it made for itself.
Churches have increasingly played a part in American politics and this is an escalation of that trend. Evangelical churches have shown support for conservative and Republican candidates while black churches get out the vote for Democrats. This threat of bringing a large-scale boycott over state legislation is a hostile action against the corporation. It’s political theatre. Groups like Black Voters Matter, the New Georgia Project Action Fund (Stacey Abrams), and the Georgia NAACP are pressuring companies to publicly voice their opposition and the religious leaders are doing the bidding of these politically active groups.
When SB 241 and HB 531 were working through the legislative process, the groups put pressure on Republican lawmakers and the governor to abandon the voting reform legislation. They also demanded that donations to any lawmakers supporting the legislation be stopped. The Georgia Chamber of Commerce tried to remain bipartisan while still voicing support for voting rights but then caved and expressed “concern and opposition” to some provisions. At the time, several large Georgia companies were targeted by activists, including Aflac, Coca-Cola, Delta Airlines, Home Depot, Southern Company and UPS.
The Georgia Chamber of Commerce previously reiterated the importance of voting rights without voicing opposition against any specific legislation. In a new statement to CNBC, the Georgia Chamber said it has “expressed concern and opposition to provisions found in both HB 531 and SB 241 that restrict or diminish voter access” and “continues to engage in a bipartisan manner with leaders of the General Assembly on bills that would impact voting rights in our state.”
Office Depot came out at the time and supported the Chamber’s statement. The Election Integrity Act of 2021, originally known as Georgia Senate Bill 202, is a Georgia law overhauling elections in the state that was signed into effect by the governor and we know what happened. Office Depot has not delivered for the activists as they demand so now the company faces boycott drama. The religious leaders are taking up where the activist groups left off.
African Methodist Episcopal Bishop Reginald Jackson said the company has remained “silent and indifferent” to his efforts to rally opposition to the new state law pushed by Republicans, as well as to similar efforts elsewhere.
“We just don’t think we ought to let their indifference stand,” Jackson said.
The leader of all his denomination’s churches in Georgia, Jackson had a meeting last week with other Georgia-based executives to urge them to oppose the voting law, but said he’s had no contact with Home Depot, despite repeated efforts to reach the company.
Faith leaders at first were hesitant to jump into the boycott game. Now the political atmosphere has changed and they are being vocal. Jackson focused on pressuring Coca-Cola first. After that company went along to get along, before it realized its error, Jackson moved his focus onto other companies.
“We believe that corporations have a corporate responsibility to their customers, who are Black, white and brown, on the issue of voting,” Jackson said. “It doesn’t make any sense at all to keep giving dollars and buying products from people that do not support you.”
He said faith leaders may call for boycotts of other companies in the future.
So, here we are with Home Depot in the spotlight. There are four specific demands leveled at Home Depot in order to avoid further action from the activists.
Rev. Lee May, the lead pastor of Transforming Faith Church, said the coalition is “fluid in this boycott” but has four specifics requests of Home Depot: To speak out publicly and specifically against SB 202; to speak out against any other restrictive voting provisions under consideration in other states; to support federal legislation that expands voter access and “also restricts the ability to suppress the vote;” and to support any efforts, including investing in litigation, to stop SB 202 and other bills like it.
“Home Depot, we’re calling on you. I’m speaking to you right now. … We’re ready to have a conversation with you. You haven’t been ready up to now, but our arms are wide open. We are people of faith. People of grace, and we’re ready to have this conversation, but we’re very clear those four things that we want to see accomplished,” May said.
The Rev. Timothy McDonald III, senior pastor of the First Iconium Baptist Church, warned this was just the beginning.
“It’s up to you whether or not, Home Depot, this boycott escalates to phase two, phase three, phase four,” McDonald said. “We’re not on your property — today. We’re not blocking your driveways — today. We’re not inside your store protesting — today. This is just phase one.”
That sounds a lot like incitement, doesn’t it? Governor Kemp is speaking out, he has had enough. He held a press conference to deliver his comments.
“First, the left came for baseball, and now they are coming for Georgia jobs,” Kemp said, referring to MLB’s decision to move this year’s All-Star Game from Atlanta over the new laws. “This boycott of Home Depot – one of Georgia’s largest employers – puts partisan politics ahead of people’s paychecks.”
“The Georgians hardest hit by this destructive decision are the hourly workers just trying to make ends meet during a global pandemic. I stand with Home Depot, and I stand with nearly 30,000 Georgians who work at the 90 Home Depot stores and 15 distribution centers across the Peach State. I will not apologize for supporting both Georgia jobs and election integrity,” he added.
“This insanity needs to stop. The people that are pushing this, that are profiting off of it, like Stacey Abrams and others, are now trying to have it both ways,” Kemp said. “There is a political agenda here, and it all leads back to Washington, D.C.”
The governor is right. The activists are in it to federalize elections, not to look out for Georgians, who will lose jobs over these partisan actions. The law signed by Kemp increases voting rights, it doesn’t limit them.
With stocks tumbling following the report that Joe Biden is considering a proposal that would double the capital gains tax, as investors dump in hopes of locking in existing cap gains rates - an exercise in futility if Biden and the socialists in Congress decide to make such a tax change retroactive to all of 2021 - Bloomberg quickly polled several Wall Street traders who focused on the policy’s implications for investing, and concluded that while it was too soon to panic, prospects of a higher levy on stock profits could spark near-term selling as investors look to skirt a higher rate.
Here are some hot takes, courtesy of Bloomberg:
Chris O’Keefe, managing director at Logan Capital Management
The first impact would be people deciding they are either going to take their gains now to try to get ahead of it. You could see people pull forward their gains to this year. It would potentially reduce the flow of capital because people would be less willing to take gains and move onto something else. People would be less willing to trade if they had to pay a tax that high.
Chris Zaccarelli, chief investment officer for Independent Advisor Alliance
It will incentivize selling this year before it does anything else. In the years to come, it will probably discourage selling, to some extent, but may also discourage buying as well as people look at other things to do with their money. The higher the taxes, the less people are likely to participate in activities that cost them tax.
Dan Suzuki, Richard Bernstein Advisors LLC’s deputy chief investment officer
It’s more aggressive than what people were expecting. I would personally fade the reaction though. Seems very unlikely that it will pass in its current state, so it would be heavily diluted.
Sameer Samana, Wells Fargo Investment Institute’s senior global market strategist
If this is the start of less market-friendly policies, it could make the gains from here a lot choppier. We worry less about an increase in corporate tax rates and more about capital gains taxes/changes in stepped up basis. Those latter two have a much more chilling and direct effect on how people invest.
Max Gokhman, head of asset allocation at Pacific Life Fund Advisors
I don’t think anyone is truly surprised that Biden is unveiling a cap gains tax, but what few people expected is that he’d do it so soon and in this magnitude. Unless it’s effective retroactively for 2021, it’s likely to be a 2022 rule -- in that case you will see at least marginal selling this year. And while retail investors get a lot of press right now for being a dominant force in day-to-day volume, the reality is that most stocks held by individuals are held by the wealthiest ones.
Kim Forrest, chief investment officer of Bokeh Capital Partners
Prices are set by the balance of buyers and sellers so if you have more incentive to be a more active trader to reduce taxes, that’s going to put limits on how high stocks can go because there will be more sellers. And that’s the market mechanism on any given day. I’m not saying that ultimately but you’re artificially creating sales.
Chris Grisanti, chief equity strategist at MAI Capital Management
The devil will be in the details -- will it be retroactive to January 1 of this year and then you wouldn’t need to sell right away? Will it be the beginning of next year? That all begs the question, will it get passed? With taxes especially there’s a lot of horse trading before the final deal. There are a lot of moving parts. One thing investors can be sure of is that taxes are going up and we have to at least partially pay for all the money we’ve been spending on stimulus.
On a more ominous note, it would appear Silicon Valley's honeymoon with the Harris-Biden presidency could be ending fast as billionaire VC Tim Draper rage-tweeted that the potential doubling of the capital gains rate could kill off American job creation...
43.4% capital gains tax might kill the golden goose that is America/Silicon Valley. People need an incentive to build long term #startups of value. In California, that would be a 56.4% tax burden. >50% Spells death to job creation.
Market Cap Of Money-Losing Companies Surpasses Dot Com Bubble Record
In a recent note from SocGen's Andrew Lapthorne, the cross-asset strategist summarizes the ongoing market insanity delightfully, saying that "there is an increasingly large number of weird and wonderful signs of market excess, from surging crypto currencies started as a joke to a single New Jersey Deli trading at $100m market cap."
To be sure, it's not just the record liquidity that has pushed the Goldman index of financial conditions to record easy levels...
... there is also a lot of good news, with the economic narrative improving and vaccination programs accelerating worldwide, with most now hoping that the worst of the pandemic is behind us. At the same time, global profit expectations are being revised upwards and earnings growth is forecast to jump by a third in 2021.
Given this almost euphoric market backdrop, Lapthorne correctly notes that "anything bearish is met with groans."
But to complete the record, the SocGen strategist adds that even after this profit rebound, global equities will be trading at over 21x earnings, which is extremely expensive on most historical measures, and at a stock level, "the distribution of valuations is as extreme as during the 1999 tech-bubble."
Finally, the amount of global market capitalization that has reported a negative profit number in the last year and in each of the last three years is higher than at any point during the past 22 years, and has even surpassed the dot com bubble.
Lapthorne's rhetorical question: "We wonder how the history books will describe 2021."
As extreme leftists within the Democratic party formally reintroduced their radical ‘green new deal’ Tuesday, Senator Rand Paul warned that the vast spending plan seeks to overturn the voter economy, do away with free market capitalism, and even create armies of youths dedicated to implementing socialist policy.
Appearing on Fox News, Paul warned that the far left “definitely think that money grows on trees, and I guess that’s part of the green plan.”
While the plan has been touted as a $172 Billion spend, Paul note that “if you add all of it up from the infrastructure bill, it’s actually about $500 billion.”
“There’s $174 billion for weatherising houses, which never gets to energy efficiency, to meet the cost. There’s about $100 billion for electric cars,” Paul also noted.
“There’s $10 billion for some kind of army of climate change people, some kind of climate corps youth which I think has connotations in our history of these sort of government informed youths out there marching for things that the government tells them to do,” the Senator further warned.
The Civilian Climate Corps Act, introduced along with the new deal Tuesday says that a civilian army should exist “to mobilize the next generation of conservation and resilience workers and maximize the creation of accessible training opportunities and good jobs.”
“I think all of it is horrendous but the biggest problem is the financial drain on the future of our country by spending so much money we don’t have,” Paul urged.
Countering the argument made by the likes of Bernie Sanders that the deal will create millions of jobs, Paul emphasised that “building pyramids could create jobs, it’s really should the government be deciding where we use our dollars and where they’re spent and where the jobs are created, or should the market place?”
The Senator continued, “In the market place we vote. So when I go to Walmart or Kroger, I vote on what needs to be produced by buying something. So what is produced and where the jobs are created are what I like to eat or what I like to buy at Walmart, that is the consumer driven capitalist way where we vote in the economy. When government does it, it means I don’t get to vote as a consumer, Bernie Sanders gets to decide it.”
Paul also noted that when it comes to policy that actually has an effect on the carbon footprint, Democrats are opposed.
“One industrial decision has accounted for more reduction in carbon than any other decision in the history of this movement, and that’s fracking,” Paul noted.
“And so they are against the one thing that has reduced the carbon footprint, as we’ve converted to natural gas,” he added.
The plan, being pushed by the likes of Sen. Ed Markey (D-Mass.) and Rep. Alexandria Ocasio-Cortez (D-N.Y.) calls for transitioning to a 100 percent carbon free-economy, as well as meeting 100 percent of power demand from zero-emission energy sources like wind and solar.
Critics have warned that it will collapse an already stretched economy while handing government total control over all aspects of society.
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As Bloomberg reports, President Joe Biden will propose almost doubling the capital gains tax rate for wealthy individuals to 39.6%, which, coupled with an existing surtax on investment income, means that federal tax rates for investors could be as high as 43.4%, according to people familiar with the proposal.
The plan would boost the capital gains rate to 39.6% for those earning $1 million or more, an increase from the current base rate of 20%, the people said on the condition of anonymity because the plan is not yet public.
A 3.8% tax on investment income that funds Obamacare would be kept in place, pushing the tax rate on returns on financial assets higher than the top rate on wage and salary income, they said.
The proposal could reverse a long-standing provision of the tax code that taxes returns on investment lower than on labor. Biden campaigned on equalizing the capital gains and income tax rates for wealthy individuals, saying it’s unfair that many of them pay lower rates than middle-class workers.
For $1 million earners in high-tax states, rates on capital gains could be above 50%.
For New Yorkers, the combined state and federal capital gains rate could be as high as 52.22%. For Californians, it could be 56.7%.
And investors know the implications... (and for everyone selling now, it's too late - the tax will be retroactive!)
Meanwhile idiot algos still selling as if they can somehow avoid paying higher capital gains taxes on tax that will cover all of 2021
It's all so pathetic, isn't it? The only way left to get ahead in America is to leverage up the riskiest gambles.
It's painfully obvious that the only way left to get ahead in America is crazy-risky speculation, but nobody seems to even notice this stark and stunning reality. Why are people piling into crazy-risky bets on speculative vehicles like Gamestop and Dogecoin? The obvious answer is because others have reaped a decade or two of wages in a few weeks, and skimming a couple hundred thousand dollars in a few weeks or months is the only way an average wage earner is going to be able to buy a house, fund a retirement account, afford to have a family, etc.
Look at the reality of wage stagnation: I made $12 an hour in 1986, and I wasn't some highly paid techno-guru or Wall Street shill. $12 an hour was an OK wage in 1986 but it wasn't fantastic. Now 35 years later, $12 is still an OK wage. A lot of people make less than $12/hour.
But what happened to the cost of healthcare, housing, childcare and everything else required to have a family in those 35 years? These costs have exploded higher. It was already a stretch to buy a house in 1986 making $12/hour, but now--are you joking? Depending on the region, the cost of a modest house has tripled or gone up five-fold or even ten-fold in the past 35 years.
As for getting ahead by starting your own business--that's another bitter joke. In 1986 I was able to provide our single employees decent healthcare insurance for $50 each and those with families for about $150 per month. Our employees did not pay a dime for this coverage. We (the employers) paid all the healthcare insurance costs as well as workers compensation, liability insurance and unemployment insurance (federal and state).
According to the Bureau of Labor Statistics (BLS), the consumer price index (CPI) has risen such that what $1 bought in 1986 now costs $2.40. Try buying real healthcare insurance for an employee today for $50 X 2.4 = $120 per month. The CPI is a pathetic joke when it comes to housing, childcare, healthcare, higher education and all the other big-ticket expenses of having a family.
All the expenses of operating a business have soared even as liability exposure, compliance costs and junk fees have skyrocketed. And by definition, you're "rich," even if you're losing money, because you're a business owner, so there's a tax target on your back as state and local governments jack up junk fees, penalties, fines and taxes on everything that isn't already overtaxed.
As for getting a graduate degree to place yourself above the competition--credential inflation is even worse than price inflation. There are 100 other equally credentialed candidates for every high-paying slot, and if you (foolishly) accept the big-bucks job, your life outside of work is over. You are essentially a well-compensated indentured servant of your Corporate America masters.
And now that you're "rich," you're also a Tax Donkey, paying between 40% and 50% of your earnings in taxes. The billionaires and their corporations pay little or nothing, as they've got the tax dodges (philanthro-capitalist foundations, offshore tax gimmicks, subsidies enacted by cheaply-bought politicians, etc.), but you, indentured servant of Corporate America--you're "rich" and should pay more.
So please work harder and make even more income, and if you're lucky we'll let you keep a slice of the higher earnings. But maybe not, because, well, you're "rich." You don't own anything and can barely afford a family, but you're "rich" in terms of earnings, and that's what counts.
And so the last best hope for the non-elite workforce without the privileges of a wealthy well-connected family is to play the riskiest tables in the Federal Reserve's casino, maxing out margin (borrowing money against one's stock portfolio) and buying options, which expire worthless if the bet goes south.
Because the reality of American life is the ways to get ahead are down to:
1) choose wealthy parents
2) win the lottery
3) follow the FIRE path (financial independence, retire early) which requires a high-paying job and super-low expenses,
4) join a friend's software start-up that gets bought by Microsoft, Google, Apple or Facebook for mega-millions, or
5) gamble and win at the Fed casino's riskiest tables.
Take a look at three charts: margin debt (all-time high - above), M2 money supply (all-time high - below), and money velocity (all-time low - below). The Fed creates trillions of dollars out of thin air which flows into speculative asset bubbles, punters with no other realistic options to get ahead max out their margin accounts to boost their bets at the riskiest tables and meanwhile, back in the real economy, stagnation reins supreme: stagnant wages, stagnant family / household formation, stagnant business formation and the velocity of money is in a free-fall to dead money.
It's all so pathetic, isn't it? The only way left to get ahead in America is to leverage up the riskiest gambles at the riskiest tables, betting that everyone will be a winner at the Fed's rigged tables--but you have to play to win.
Or lose, but nobody mentions that. All you'll hear in the Fed's casino is the Fed has our back, until the entire casino collapses in a putrid heap of fraud, corruption, greed, systemic risk and hubris.
Biden Plans Capital Gains Tax Hike To Help Finance $1.5 Trillion "Human Infrastructure" Package
Update (1305ET): Hours after the NYT published its report about the details of Biden's "human infrastructure plan," Bloomberg followed up with a series of headlines that sent markets reeling: Biden is set to propose a capital gains tax as high as 43.4% for the wealthiest Americans. For context, the top rate is currently 23.8%.
BIDEN TO PROPOSE CAPITAL GAINS TAX AS HIGH AS 43.4% FOR WEALTHY
PROPOSAL WOULD MEAN 52.22% TOTAL CAPITAL GAIN LEVY IN NY STATE
TOP RATE WOULD BE PAID BY THOSE MAKING MORE THAN $1 MILLION
Markets puked on the news, likely because - as we explained earlier - expectations of a higher cap gains rate would incentivize investors to sell to lock in their gains before the higher rate takes effect. Of course, if the tax is retroactive to 2021, then there's no point in selling because it would already be too late to lock in a lower rate.
* * *
The NYT has just published the first "official" leak detailing the outline of President Biden's "American Family Plan", the second part of his administration's signature "Build Back Better" proposal (the first part, entitled the "American Jobs Plan", was unveiled during a live press briefing in Pittsburgh earlier this month).
The second phase of Biden's sweeping "Green New Deal"-inspired program centers on what administration officials call "human infrastructure".
Should it pass in its current form, it would entail spending hundreds of billions of dollars on universal pre-kindergarten, expanded subsidies for child care, a national paid leave program for workers and free community college tuition for all.
While the overhaul will raise taxes on investors and millionaires via a proposal for a top marginal income tax rate at 39.6% (up from 37%, the level it was reduced to under Trump) a controversial increase in capital gains tax for individuals earning more than $1 million per year (raising the rate to 39.6% from 20%) was also included as part of the package described by the NYT.
Of course, any change in capital gains rates could have potentially profound implications for financial markets: if the new rate taxes effect next year, there could be serious selling pressure on stocks before year-end 2021 as investors seek to lock in gains at the lower rate.
What's more, the plan in its current form will also propose eliminating a provision of the tax code that reduces taxes for wealthy heirs who sell assets they inherit, like art or property, that have risen in value. As he discussed during the rollout of pt. 1, the package would also raise revenue by increasing enforcement at the IRS to bring in more money from wealthy Americans who evade taxes. All provisions under discussion would keep the tax rate on individuals earning $400k per year or less steady, in keeping with a promise made during the campaign. During his briefing in Pittsburgh, Biden said he would remain open to all revenue suggestions, so long as they don't violate this one rule.
Other tax provisions regarding the estate tax and capping dedications on the wealthy are also in play. While rich Democrats demand that Biden find a way to remove the cap on SALT deductions that was included in President Trump's landmark tax cuts, the NYT reports that the plan would extend through 2025 an expanded tax credit for parents (essentially a monthly payment from the government for most families) that was created on a temporary basis by the $1.9 trillion economic aid package signed into law last month.
Some Democrats have pushed Biden to make that tax credit permanent, arguing that it would dramatically reduce child poverty. Those pushing Mr. Biden include Senators Michael Bennet of Colorado, Cory Booker of New Jersey and Sherrod Brown of Ohio, along with Representatives Rosa DeLauro of Connecticut, Suzan DelBene of Washington and Ritchie Torres of New York. Conservatives worry that expanding the child tax credit would incentivize poor mothers to have more children out of wedlock.
The family plan will also include some type of extension for an expanded Earned Income Tax Credit, which was included in the earlier aid package on a one-year basis.
“Expansion of the child tax credit is the most significant policy to come out of Washington in generations, and Congress has an historic opportunity to provide a lifeline to the middle class and to cut child poverty in half on a permanent basis,” the lawmakers said this week in a joint statement. “No recovery will be complete unless our tax code provides a sustained pathway to economic prosperity for working families and children."
Previous iterations of Biden's "human infrastructure plan" circulated inside the White House called for raising revenues by enacting measures to reduce the cost of prescription drugs purchased by the federal government via medicare and medicaid, but these measures have been set aside for now; they might make an appearance later in a plan to expand Medicare that's still in its incipient stages.
All told with tax credits and spending, the plan is expected to cost $1.5 trillion. When combined with the $2.25 trillion "American Jobs Plan", the total cost of the overhaul is slated at just below $4 trillion.
NBC Deceptively Edits 911 Call & Video From Fatal Police Shooting Involving Knife-Wielding Teen Girl
NBC News - which was forced to apologize in 2012 for deceptively editing the 911 phone call of George Zimmerman in the Trayvon Martin case to make him sound racist - has done it again.
Following the fatal officer-involved shooting of 16-year-old black girl, Ma'Khia Bryant - who was about to stab another black girl in Columbus, Ohio - tensions flared high as a flood of leftist journalists and 'blue-checks' on Twitter falsely reported that Bryant was unarmed.
Less than a day later, bodycam footage revealed that Bryant was clearly wielding a knife - and about to stab the other black teen when she was shot.
NBC News, however, continued peddling the 'unarmed' lie with a deceptive edit of the 911 call to remove a reference to the attempted stabbing, as well as the video - which NBC stops right before it's apparent the teen is holding a knife.
In stark contrast, CBS Evening News showed the important part of the 911 call. "These grown girls over here trying to fight us, trying to stab us," the caller says.
They also slow down the video and zoom in on the knife in the attacker's hand. pic.twitter.com/izvXaUH6Ki
Why is NBC intentionally trying to inflame racial tension?
I mean I get that a dying televisual media needs to keep boomers glued to the screen according to the only mode of political-emotional discourse they know: all politics has to be a movie. And that we’ve rendered much of the rest of our populace functionally illiterate. But still.
Rabo: Even QE-Addled Markets May See This As A Tail-Risk Off
By Michael Every of Rabobank
Narratives in the raw
Yesterday’s big speech from Russian President Vladimir Putin was mostly focused on domestic issues. Apparently his economy is clearly not in a good state – which makes one wonder who has been running the place for nearly 20 years. Yet there was a very blunt comment about Russia’s “dire” demographic outlook – and an equally blunt warning that while Russia did not want to burn bridges with other countries, it would set its own red lines, and those that crossed them would hugely regret it. A few years ago that kind of bellicose rhetoric would have been front-page news. In the present environment it hardly makes the news at all – even if the underlying risk of Russia-Ukraine conflict, and its potential market impact, are tail risks that won’t go away until the huge Russian army on the Ukrainian border does.
Higher up the news-flow today is a massive explosion in central Israel; suggestions this was a missile attack; and against Israel’s nuclear reactor at Dimona. Unconfirmed video suggests this was either intercepted by missile defenses, or hit another target. With Israeli jets striking Syria, this suggests it was an Iranian proxy to mirror the recent Israeli sabotage effort against Natanz. Israeli defense policy is based on the principle of massive deterrence – so the scale of reprisals remains to be seen, and if they in turn lead to escalation. Also recall Prime Minister Netanyahu may have only days left in office: the only way for him to rally the opposition around him as PM would be a true national emergency.
As such, while this could be just another in a long line of tit-for-tat in this region, even QE-addled markets may see this as a tail-risk off. It potentially underlines again how the Suez Canal, even if not directly involved, could again be closed in some geopolitical scenarios, straining supply-chains further; and it may be a knee-jerk positive for energy prices.
The ‘irony’ is that this comes as representatives in Vienna re-heating the 2015 Iran nuclear deal claim “real progress”: which critics claim means the decision has been made to overlook Iran enriching uranium to a 60% level; evidence Tehran secretly broke the terms of the deal before the US walked away; the sunset clauses that mean this is a can-kicking exercise; and Iran’s ballistic missile programme and sponsorship of terrorism.
Yet Reuters now reports a senior US State Department official as saying “Important disagreements between the US and Iran persist…with the negotiations still far from conclusion and the outcome uncertain,” and that “The main differences between Washington and Tehran are over what sanctions the US would need to remove and what steps Iran would need to take to resume its obligations to curb its nuclear program.”
Which seems to say that nothing much substantive has been agreed at all – unless this is all for show. Logically, if the Iran deal collapses there is no end-point but Iranian submission, which won’t happen; or the use of force, which nobody wants. Yet if the deal is re-struck, sanctions are lifted, and Iranian oil can flow, Iran will have lots more to spend on Russian arms. Perhaps this lead to regional peace: and perhaps it does the complete opposite. Life is complicated in a simple narratives aren’t.
If you think geopolitical tensions end there, you are wrong. An explosion at a Pakistani hotel that hosts the Chinese ambassador has also killed four. It’s unclear who was responsible. Note the China-India-Pakistan triangle, which saw recent violent clashes, where borders are still unresolved, and where China is now reportedly planning a mega-dam that would control the flow of water into India, is arguably only out of the headlines for tactical, not strategic reasons.
And speaking of tactics and strategy, in Canada, Huawei executive Meng Wanzhou has won a three-month delay to her US extradition hearing; and the Australian federal government has used new powers to tear up four agreements signed by Victoria, including one with Iran, one with Syria, and two related to China’s Belt and Road Initiative. “This is another unreasonable and provocative move taken by the Australian side against China,” was the official response. Will Aussie exporters see further Chinese measures in response?
Meanwhile, as we have daggers drawn in the Middle East, bombs in Pakistan, sabres being rattled between Russia and Ukraine, and continued global recognition of growing tensions over Taiwan, today will see 40 world leaders attend President Biden’s on-line climate summit, where all will no doubt make pledges to fight the climate crisis – rather than each-other.
“[US President] Biden is expected to announce a commitment to cut US emissions in half from 2005 levels by 2030. This will be greeted by huzzahs from elite opinion-makers, but this commitment, and this entire effort, is misbegotten. A key theory driving it is that if the US cuts its emissions, everyone else around the world will as well, preserving the Earth as we know it. But even well-intentioned countries are liable to miss, or to manipulate, their climate targets, whatever they say. And not all countries are well-intentioned.”
Yet we also see Italy’s PM Draghi is talking about a EUR220bn reworking of the Italian economy in a plan which is apparently 200 pages long with 500 charts - so more than two charts per page, which means not much text (luckily, many buzzwords are short). 40% of the funds will go to the poorer south: where, Bloomberg notes, “growth challenges have confounded every government since the country was unified in the mid-19th century.” There will be six overall “missions” with 16 categories of expenditure, including greening Italy’s historic buildings, high-speed rail, and lots of other things now classified as “infrastructure”. Let’s see if that is enough for Super Mario to finally jump-start Italy.
In short, we have the optimism of Build Back Better alongside what may be the pessimism of the rawest of realpolitik – but whoever said that there can only ever be one narrative at a time? Wouldn’t that make trading as easy as central banks have been trying --and still failing--to? Or, more cynically, aren’t both actually part of the same meta-narrative – of systemic failure, and the various possible responses to it?
The House Democrats, with the support of President Joe Biden, have just voted (perfectly along party lines) to approve the establishment of the “State of Washington, Douglass Commonwealth” as our 51st state today.
I had testified and written about D.C. statehood for decades and, as noted in a recent column, I believe that the best interests of both the country and the district residents is found in retrocession, not statehood.
As noted earlier, there has been comparatively little debate of the bill in the House, where perfunctory hearings rushed it to the floor.
What was missing by design in the House was any acknowledgment, let alone consideration, of alternatives to creating the first Vatican-like city-state in the country. Most importantly, there was no discussion of what district citizens could gain from an alternative to statehood — retrocession.
The tragedy is that we have never had a full and honest debate of the options for securing full representational rights for district residents.
There is little interest in having such a national discussion or submitting this question to the voters in the form of a constitutional amendment. Polls show a majority of Americans still oppose D.C. statehood as they have for decades despite both well-funded campaigns and overwhelming support in the media. There has always however been a pathway to full representational status through retrocession. However, the Democratic leadership again cut off consideration of that and other options in another “take or leave it” legislative construct. There are also opposing views on whether a constitutional amendment is warranted and, of course, the preference of some to continue the original intent of the Framers in the creating of “federal city” that is not controlled by any state.
The bill is not likely to succeed in the Senate and we will lose another year without a full and civil discussion of these options. Instead, it will fail and deepen our divisions while supporting calls for killing the filibuster rule. The politics remains the same as does the status of the district.
Ukrainian President Volodymyr Zelensky, who recently donned combat gear to join his government’s troops on the battle line with the Donbass, on Wednesday addressed the nation in a televised address in which he conjured up the specter of Russian troops on his nation’s eastern border. He asked and answered a number of rhetorical questions, among them: "Do Ukraine and its international partners demand that troops be withdrawn from our borders? Yes." The international partners in question are the US and its NATO allies and partners.
The keynote of his address was this: "Does Ukraine want a war? No. Is it ready for it? Yes. Will Ukraine stop fighting for peace through diplomacy? Never. Will Ukraine defend itself if it needs to? Always."
The utility of such phrasing is that the statement can be interpreted differently according to where the stress is laid. And a threat of war can be couched within a seeming pledge of peace. His "international partners" can portray his comments as reflecting a desperate plea for peace while confronted with the threat of war. That is, Zelensky projects himself simultaneously as a peace-loving statesman and a resolute (if reluctant) warrior.
The message was addressed to three capitals in particular. Moscow, Washington and Brussels.
A press release on the signing was posted on the president’s website, which states:
"This document improves the requirements for manning the Armed Forces of Ukraine and other military formations with reservists (military-trained persons with combat experience) in a special period without announcing mobilization. This will make it possible to quickly equip the military units of all the defense forces of the state with reservists, which will significantly increase their combat capability during a military aggression, as well as rapidly increase the combat potential of the defense forces and allow timely response to sudden threats to national security."
Ready for war in fact.
The country’s Defense Minister, Andriy Taran, said the act also will augment the professionalization of the nation’s armed forces, a key NATO demand for countries aspiring to membership of the military bloc. He also said that part of that process is increasing the percentage of military-age citizens "contracting" with the military. He further explained the intent of the act in saying, "We count on increasing the efficiency of recruiting military units in a special period by recruiting reservists, motivated, trained soldiers with combat experience."
And Ukrainian Foreign Minister Dmitry Kuleba reported that he had a phone conversation with Senator Robert Menendez, Chairman of the U.S. Senate Foreign Relations Committee, in which the latter said he expected a vote today on the Ukraine Security Partnership Act to increase military assistance to the country, "which includes the supply of lethal weapons."
50+ Crewmembers Likely Doomed As Missing Indonesian Submarine Feared Too Deep To Retrieve
It looks like the Indonesian Navy submarine that disappeared yesterday during routine naval exercises has fallen too deep to retrieve, meaning the 53 crewmembers onboard are likely doomed - if they're not dead already.
Authorities said oxygen in the submarine would run out by early Saturday.
"Hopefully we can rescue them before the oxygen has run out" at 3 a.m. on Saturday, Indonesia’s navy chief of staff, Adm. Yudo Margono, told reporters.
He said rescuers found an unidentified object with high magnetism in the area and that officials hope it’s the submarine.
The diesel-powered KRI Nanggala 402 was participating in a training exercise Wednesday when it missed a scheduled reporting call. Officials reported an oil slick and the smell of diesel fuel near the starting position of its last dive, about 96 kilometers (60 miles) north of the resort island of Bali, though there's no evidence conclusively linking this to the sub, many took it as a disturbing sign that something went wrong.
As of Thursday morning, the navy fears the worst: the expectation is that the submarine sank to a depth of 600-700 meters (2,000-2,300 feet), much deeper than its collapse depth estimated at 200 meters (656 feet). The estimate is from a firm that refitted the vessel in 2009-2012. Experts said the water pressure could cause the submarine to collapse in on itself, instantly killing everybody on board, if it dives too deep.
Ahn Guk-hyeon, an official from South Korea’s Daewoo Shipbuilding and Marine Engineering, said the submarine would collapse if it goes deeper than around 200 meters because of pressure. He said his company upgraded much of the Indonesian submarine’s internal structures and systems but it lacks latest information about the vessel.
Frank Owen, secretary of the Submarine Institute of Australia, also said the submarine could be at too great a depth for a rescue team to operate.
"Most rescue systems are really only rated to about 600 meters (1,969 feet)," he said. "They can go deeper than that because they will have a safety margin built into the design, but the pumps and other systems that are associated with that may not have the capacity to operate. So they can survive at that depth, but not necessarily operate."
And unfortunately for the crew, the missing sub was never retrofitted with a rescue system, which means an underwater rescue would be virtually impossible.
Owen, a former submariner who developed an Australian submarine rescue system, said the Indonesian vessel was not fitted with a rescue seat around an escape hatch designed for underwater rescues. He said a rescue submarine would make a waterproof connection to a disabled submarine with a so-called skirt fitted over the recue seat so that the hatch can be opened without the disabled submarine filling with water. Owen said the submarine could be recovered from 500 meters (1,640 feet) without any damage but couldn’t say if it would have imploded at 700 meters (2,297 feet).
However, entering the area as a white person comes with potential risks if you make the mistake of behaving in a “problematic” manner.
All visitors are asked to wear face masks and act with “humility,” but a lengthier list of rules for white people explains how they will be treated differently.
The rule sign to the George Floyd autonomous zone in Minneapolis has additional rules for white people. Since forming, the area has seen increased violence, criminal activity, drug abuse & even a murder. https://t.co/uifR9Y1GWn
Whites are asked to “decenter yourself,” which is a euphemism for a mandate to behave like second class citizens and keep quiet.
“Be mindful of whether your volume, pace and movements are supporting or undermining your efforts to decenter yourself,” states the advisory.
The patronizing tone continues with a demand to “contribute to the energy of the space, rather than drain it.”
The rules also state that white people should seriously consider whether taking photos is appropriate and to seek consent from anyone they photograph, despite the whole area being public.
The rules also encourage whites to intervene if they “witness white folks doing problematic things,” which presumably includes doing anything other than engaging in slavish worship for the 21st century deity that is George Floyd.
Black Lives Matter groups routinely issue demands of white people for their events, some of which enforce outright segregation.
As we highlighted last week, a group of Black Lives Matter protesters in Minneapolis were caught on camera telling a white liberal ally, “You’re white! You don’t belong!” before demanding that he leave the area.
Following the conviction of Derek Chauvin, BLM mobs also descended on diners in New York while telling white restaurant owners to “get the f**k out” of the city.”
Biden About To Declare US Recognition Of Armenian Genocide, Enraging Turkey
It's long been a Turkish 'red line' for which all the country's recent modern leaders have reacted fiercely at the mere suggestion, and which only thirty countries in the world officially acknowledge. It's being widely reported that President Joe Biden is preparing to declare the formal US recognition of the Armenian genocide, which was the mass systematic killing of over one million Armenians in Asia Minor from 1915-1917 at the end of the Ottoman Empire. Hundreds of thousands of Greek and Assyrian Christians were also slaughtered in the name of achieving 'Turkification'.
According to CNN on Thursday, "Two people familiar with the decision said the President was expected to make the declaration as part of an official statement on Remembrance Day, which falls on Saturday. Both said it was possible he would change his mind before then, and issue a statement merely recognizing the event without describing it as genocide."
Congressional leaders as well as Armenian-Americans have for decades lobbied for greater recognition of the event which was carried out by the Young Turk government during the World War I period. However, the term itself has for years been banned in Turkey's parliament and results in swift crackdowns and legal measures for any journalist wishing to write about it within the country.
Turkey's longtime pressure campaign has worked in many Western countries. For example, the Trump administration had blocked a 2019 bipartisan Congressional effort to pass legislation recognizing the Armenian genocide.
Thus Biden's recognition will mark a major break from all predecessors, who didn't want to rile relations with the powerful NATO ally.
According to to further details from the Associated Press, "The anticipated move — something Biden had pledged to do as a candidate — could further complicate an already tense relationship with Turkish leader Recep Tayyip Erdogan. Administration officials had not informed Turkey as of Wednesday, and Biden could still change his mind, according to one official."
Biden's USAID Administrator Nominee Samantha Power weighed in on Wednesday...
Telling the truth, and standing up to bullies and genocide deniers, will be of enormous consequence. 1/3https://t.co/8lxJaxfIR7
Amid rumblings the administration is poised to pull the trigger on the controversial recognition, Turkish Foreign Minister Mevlut Cavusoglu early in the week warned of already soured relations, "If the United States wants our relations to get worse, it’s up to them."
Would you hire a money manager that manages your wealth on false assumptions?
It seems like a bad idea, but many people unknowingly opt for such a management style in their retirement plans.
Target Maturity Funds are one of the fastest-growing mutual fund sectors of the last decade. These passive strategies are most popular in 401k and other retirement plans with limited options and long investment time horizons.
Wall Street nicknames them “set ‘em and forget ‘em” funds because their strategy purportedly adjusts risk lower as you age. At first blush, such a strategy makes sense as risk tolerance is often a function of age. However, the purveyors of these funds fail to disclose that measuring risk is a function of the prices and valuations of assets.
Changing asset allocations based solely on the calendar is playing roulette with your financial well-being.
What Are Target Funds
Target Funds are passive mutual funds run by basic algorithms. The funds slowly allocate away from stocks and toward bonds based on a target future date. For example, a fund with a 2050 target date will initially invest heavily in stocks, with the remainder in fixed income assets. As the fund ages, it reduces equity exposure leaning more toward fixed income.
The table below shows how the Vanguard family of Target funds transition from 90/10 allocation of stocks to fixed income to 50/50 as they reach the target date.
Target date funds are based on one simple thesis- as we age, we should reduce financial risks.
There is sound logic to lessening financial risk as you age. First, there are fewer years of future income and investment gains to make up for potential investment losses with each passing day. Second, for those entering or already in retirement, the stability of wealth to cover current and future living expense is critical.
Target funds fail in their complete lack of consideration for measuring risk. Equities, for example, are inherently riskier when fundamental valuations are above average and recent performance has been strong. Conversely, they are less risky at low valuations with beaten-down share prices.
To better understand the problem with allocating based solely on a future date, we start with the graph below. The chart makes it appear as though the S&P 500 is a reliable growth machine. Why not have a strategy that relies on the trend continuing?
Unfortunately, for us mere mortals, with 10-30 year investing time frames, we best zoom in on the graph in shorter time horizons.
Shown below is the same graph but annotated differently. The red lines represent extended periods where the index had negative returns. The red bars quantify how long those periods lasted.
Stocks rise over very long periods, but shorter periods often see long periods of consolidation with no upward progress. If you were unfortunate to start investing in 1929, it was not until 1954 till you saw prices back at 1929s levels. But for those that started investing in 1951 or 1981, the equity market trend was primarily upward.
The start and end dates of your investment time horizon matter greatly. Blindly allocating to equities based on age and failing to account for market risks is a recipe for failure.
Who can predict the future?
Quite often we hear investors state the future is unpredictable. Accordingly, they claim equities offer much better historical returns than bonds. As such, why not roll the dice on history and go all-in on equities.
No one can tell you with any certainty what stocks will do tomorrow or next month. However, looking further into the future, market returns become easier to forecast. The graph below shows stock returns become increasingly dependent on valuations as the investment horizon increases.
The next graph shows 10-year rolling returns on the S&P 500. The simple takeaway is that returns are cyclical.
Periods in which equities are overpriced with high valuations are followed by periods with lower returns. Conversely, periods when stocks are cheap, are often followed by periods of strong returns.
To better stress the point, the following graph compares ten-year forward annualized returns to 10-year prior annualized returns. Quite often, the two lines mirror each other. For example, for the ten years ending March of 2009, the market returned -6% annually. The annual return for the next ten years was over +14%.
Valuations As Predictors
Now we focus on fundamental valuations, or how much investors are willing to pay for future earnings.
The following graph shows when valuations are low, forward returns tend to be higher and vice versa.
To further illuminate the strong correlation between valuation and returns, we present the same graph above but with the right-hand Y-axis (returns) in inverse order. Again, the higher the valuation, the lower the returns in the following ten years.
In almost all cases, aversion to risk should increase with age. The problem is that target funds do not assess risk, just your supposed tolerance to risk. There have been multiple times in history when valuations and prior returns were well above average. At these times, a 30-year-old with a passive equity-based strategy should have reduced their equity exposure. Conversely, there are times in history when prices and valuations were so beaten down that a 70-year-old should have had high exposure to equities.
We picked on equities in this article, but the same logic applies equally to bonds and most other asset classes.
Today, valuations stand at extreme highs. We should expect annualized equity returns of zero or even below zero based on the regression of historical returns and valuations. If your wealth is actively managed, current high exposure to equities is fine. The advice assumes you or your manager is aware of the risks and ready to act if necessary.
Most 401ks offer their participants many alternatives alongside target funds. For those that elect to take passive strategies, like target funds, we strongly advise that you assess your risk profile and that of the markets and invest accordingly.
US Existing Home Sales Tumble For 2nd Straight Month As Prices Soar At Record Pace
After unexpectedly plunging in February (exaggerated by weather conditions), analysts expected existing home sales to continue to slide in March as affordability (inventories and rates) squeeze the marginal panic-buyer at record high prices. And just as we warned earlier, existing home sales were worse than expected, tumbling 3.7% MoM (for the second straight month)...
And while sales are up over 12% YoY, the recent plunge in SAAR sales have been dramatic, tumbling to 7-month lows...
This should not have been a huge surprise as Christophe Barraud warned earlier. Housing affordability has been under pressure since January. On one hand, mortgage rates started rebounding with the 30-year recently hitting the highest level since June 2020 in late March.
On the other hand, prices kept climbing at a quick rate (amid demand, distribution, and construction costs). The median selling price jumped 17.2% from a year ago to $329,100 in March, the highest in records back to 1999.
There were 1.07 million homes for sale last month, down more than 28% from a year earlier.
“We know that home prices have been rising, mortgage rates inching higher, housing affordability becoming much more challenging, however I would say the softening sales activity is not due to demand going away,” Lawrence Yun, NAR’s chief economist, said on a call with reporters.
“Demand remains strong, it is simply the severe lack of supply that is holding back sales conditions,” Yun said.
All regions posted sales declines in March, led by an 8% decrease in the West and a 2.9% drop in the South.
De-escalation Or Calm Before The Storm? Russia Orders Troops Back After Massive Crimea Drills
After the reported Russian troop build-up along Ukraine's border which thrust the half-decade long Donbass conflict back into media headlines late last month, the Kremlin this week has been conducting major naval and aerial military drills on the southern coast of Crimea and in the Black Sea.
Amid threats and counter-threats between Moscow and NATO, which also witnessed a rare overture from Biden for a bilateral summit with Putin to be held over the summer, Russia's defense minister on Thursday announced the close of the drills and ordered the additional troops back to the their permanent bases.
Speculation has been rampant and the actual numbers of additional Russian troops near Ukraine has differed wildly - from claims of multiple tens of thousands to 100,000 - and all the way up to fantastical projections of 150,000. It remains unclear to what degree Russia will fully draw down these 'extra' forces near Ukraine's border and in Crimea.
Russia's position all along has been that the initially reported "build-up" which was considered a severe "threat" to Ukrainian sovereignty (as Kiev accused Moscow of preparing an offensive) was in reality related to regularly scheduled military exercises in the region.
"I consider the goals of the snap check of readiness fulfilled," Defense Minister Shoigu announced Thursday. "The troops have shown their defense capability and I decided to complete the drills in the South and Western military districts."
Are we finally witnessing rapid de-escalation? Or is it just the calm before the storm?
The Russian Defence Ministry said the manoeuvrs in Crimea involved more than 60 ships, over 10,000 troops, around 200 aircraft and about 1,200 military vehicles.
The exercise featured the landing of more than 2,000 paratroopers and 60 military vehicles on Thursday. Fighter jets covered the airborne operation.
Shoigu flew in a helicopter over the Opuk firing range in Crimea to oversee the exercise. He later declared the drills over, but ordered the military to stand ready to respond to any "adverse developments" during NATO's Defender Europe 2021 exercise.
Earlier this week Ukrainian Foreign Minister Dmytro Kuleba informed Western allies that the "continued" Russian troop mustering was "expected to reach a combined force of over 120,000 troops" in about a week.
He argued that sanctions on Moscow must be ratcheted up - this even after Biden's last Thursday sanctions rollout targeting Russian officials and companies over the SolarWinds hack and alleged election interference.