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[l] at 1/20/22 3:30pm
Tulsi Gabbard Blasts "Warmongers" Taking US Toward "Destruction Of The World" Over Ukraine Former US congresswoman Tulsi Gabbard is once again calling out the US hawks' rush to escalate toward military confrontation with Russia over Ukraine. The Iraq War veteran and reserve officer who also became well-known for exposing the dirty war on Syria said in a Thursday video message posted to Twitter that confrontation between "two nuclear armed powers" can only end in "the destruction of the world and life as we know it." She deplored during the clip taken from a recent news appearance that the unhinged and dangerous jingoism is coming primarily from "warmongers" currently in office, who are now "influencing the decisions that are being made by this White House.” As warmongers in the White House escalate tensions with Russia, let’s be real about what we’re dealing with - open conflict between two nuclear armed powers. The only place this conflict can end is the destruction of the world and life as we know it. This is what's at stake. pic.twitter.com/jVM8YiI1Ee — Tulsi Gabbard ? (@TulsiGabbard) January 20, 2022 During the segment Gabbard identified that Secretary of State Antony Blinken and National Security Advisor Jake Sullivan are central parts of the problem. She argued that they are well-known supporters of "regime change wars": "Unfortunately, in this White House, we have warmongers and people like Jake Sullivan and Tony Blinken, who had a very strong hand in being the architects of regime change wars in Iraq, in Libya, in Syria and they're the ones who are influencing the decisions being made by this White House," she said. Interestingly, Biden himself has appeared less hawkish than his own top staff. For example, both Jen Psaki and Blinken this week have claimed Russia is poised to invade Ukraine "at any point".  And yet during his solo press conference Q&A on Wednesday, Biden made it abundantly clear that he thinks Putin hasn't made up his mind yet. Biden also came under severe criticism from within his own party when he suggested disunity within NATO over how to respond: “It's one thing if it's a minor incursion and we end up having to fight about what to do and not do,” Biden said. "But if they actually do what they're capable of doing with the forces amassed on the border, it is going to be a disaster for Russia if they further invade Ukraine." Gabbard, meanwhile, has consistently been a thorn in establishment Democrats' side. She's engaged in political battles with hawks in her own party, which inevitably resulted in smears that she too is somehow "compromised" by Russia or a "Putin asset" etc.. (the same thing they said about Trump).  She's been consistent in calling out both sides of the aisle on regime change wars and military adventurism abroad... The most powerful AQ enclave in the world today is in Idlib, Syria. Yet Pompeo & corporate media call these terrorists “rebels” & want to protect them. Question to Trump & all Dem Candidates: Do you want to protect AQ or defeat them? Voters have a right to know. #StandWithTulsi pic.twitter.com/88GjWJTA5d — Tulsi Gabbard ? (@TulsiGabbard) March 2, 2020 Gabbard also years ago, in 2017, came under fire for going to Damascus to meet with Syria's Bashar al-Assad. She explained she wanted to understand what was really happening in the country first hand, and condemned the US covert war to overthrow the Syrian state, which involved the CIA and Pentagon funding and weaponizing jihadists, including al-Qaeda. Tyler Durden Thu, 01/20/2022 - 17:30
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[l] at 1/20/22 3:16pm
Jamie Dimon Gets Pay-Rise To $34.5 Million In 2021, Goldman Banker Bonuses Surge 40-50% After scraping by on just $31.5 million a year in both 2019 and 2020, JPMorgan's board has decided that CEO Jamie Dimon deserves a pay rise in 2021 (well, have you see what inflation is doing to the cost of living?). The 10% pay-rise notably outweighs inflation though as the package includes $28 million of restricted stock tied to performance, an annual base salary of $1.5 million and a $5 million cash bonus - pushing his total compensation up 10% YoY to $34.5 million. “Amid the continued challenges of Covid-19 and supply chain disruptions, under Mr. Dimon’s stewardship, the firm continued to serve its clients and customers around the world,” the bank said in the filing. It did so “during a time of unprecedented business demands, while supporting and providing a safe work environment for its employees and investing in and executing on strategic initiatives.” As a reminder, both Dimon and his top deputy, Daniel Pinto, were awarded special bonuses last year to entice them to stay in their roles for a “significant number of years.” And one more thing... While one can crow about JPMorgan earning $48.3 billion last year (a 66% jump from the prior year), we note that almost $10 billion of that came from reserve releases after potentially soured loans predicted at the start of the pandemic never materialized... all thanks to trillions of dollars in buying and commitments The Fed bailed the banks out with. Ok just one more thing... JPM stock rose 25% in 2021, but underperformed the S&P 500 and the KBW Nasdaq Bank Index. "We will be competitive in pay," Mr. Dimon said last week on a call with analysts. "If that squeezes margins a little bit for shareholders, so be it." JPMorgan is not alone in ramping up banker pay... Following comments from Goldman Sachs' CEO this week that the bank would not shy away from handing out hefty bonuses to retain top talent, Reuters reports that Goldman increased its annual bonus pool for top-performing investment bankers by 40% to 50%. That is on top of the one-time bonuses we previously reported for Goldman's top-talent. Bottom line: it's good to be king. Tyler Durden Thu, 01/20/2022 - 17:16
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[l] at 1/20/22 3:11pm
The Joker: A Premonition Authored by Jeffrey Tucker via The Brownstone Institute, It was two years and a few months ago – only a few months before lockdowns – that I dragged myself to see The Joker, a movie I dreaded but ended up respecting.  “It’s a movie about one man’s descent into madness,” said the ticket taker. “Nothing else.”  Why was the ticket seller pre-reviewing this movie for me? The line seemed overly rehearsed, a cautionary note to viewers as a way to prevent what has concerned people, namely that the movie’s fictional mayhem would generate real-world copycats. This was the great worry at the time.  Still, his mini-review did give me some reassurance. The previews alone were too creepy. Life is tough enough without movies introducing more sadness, which is precisely why I like to stick with uplifting fare. Still, I marshaled my way through this one.  There is a superficial way in which the man was correct. This was just about one guy. Even after leaving, I kept telling myself that. And yet after it was over, I experienced precisely what so many others reported at the time. The movie imparts an aura that you can’t shake. You take it home with you. You sleep with it. You wake up in the morning and see that damned face again. You think through scenes. Then you remember things. Then more starts to make sense – not moral sense but narrative sense.  It was also tremendously unpleasant viewing, the most difficult two-plus hours of movie watching I can remember. It was also brilliant and gripping in every frame. The score is perfect. And the acting didn’t seem like acting.  As for the “just one man” interpretation, that’s hard to sustain. The street scenes. The subways packed with people wearing clown masks, headed to the protest. The rich, established businessman running for mayor and the protests that engenders. The strange way in which this unsettling and violent figure becomes a folk hero on the streets. There was surely a larger point here.  Yes, I had seen the usual tug-of-war on Twitter about what it meant. It’s pro-Antifa! It’s a conservative warning against extremist politics! It’s a right-wing smear against the leftward drift of the Democrats! It’s a left-wing apologia for the rise of the workers against the elites, so of course eggs need to be broken!  The trouble is that none of those narratives explained the various twists and turns, and the unease and ambiguity that the film created within the viewer.  It took me a full day to come up with an alternative theory. The thesis probably pertains to all renderings of The Joker in print or film but this one is particularly prescient because its sole focus is on the one character, with the most elaborate backstory yet given.  The trouble begins with personal life failures. While this man is troubled, you sometimes think that perhaps he is not so far gone as to be irredeemable. He might function well. He can get through this, just like everyone else deals with their own demons. Joaquin Phoenix does a great job of slipping in and out of crazy. He seems to behave fine around his mother, and his brief girlfriend. He has interactions that are not totally wrecked by his eccentricity. Yet there are life circumstances that keep driving him more and more to the point that he loses love for life as it is. He gives up hope and fully embraces despair as a way of thinking and living. And then he does evil and discovers something that empowers him: his conscience does not provide a corrective. On the contrary, the evil he does makes him feel empowered and valued.  To review: his life was not working; he found something that worked for him finally. Then he embraced it.  What is that thing he embraced? It has a particular name in the history of ideas: Destructionism. It’s not just a penchant; it’s an ideology, an ideology that purports to give shape to history and meaning to life. That ideology says that the sole purpose of action in one’s life should be to tear down what others have created, including the liberties and lives of others.  This ideology becomes necessary because doing good seems practically impossible, because one still needs to make some difference in the world to feel that your life has some direction, and because doing evil is easy. The ideology of destructionism enables a person to rationalize that evil is at least somehow preparing the ground for some better state of society in the future.  What is that better state? It could be anything. Maybe it’s a world in which everyone owns everything equally. Maybe it is a world without happiness or a world with universal happiness. Maybe it is a world without faith. Maybe it is national production with no international trade. It’s a dictatorship  – society conforming to One Will. It’s the absence of patriarchy, a world without fossil fuels, an economy without private property and technology, production without the division of labor. A society of perfect morality. The ascendance of one religion. A germ-free world!  Whatever it is, it is illiberal and therefore unworkable and unachievable, so the advocate must eventually find solace not in creating but in destroying the existing order.  The first time I read of the concept was in Ludwig von Mises’s 1922 book Socialism. He brings it up toward the end after having proven that classical socialism itself is conceptually impossible. If there is nothing positive to do, no real plan to achieve anything socially beneficial; because the whole idea is cockamamie to begin with, the proponents must either abandon the theory or find satisfaction in the demolition of society as it currently exists. Destructionism becomes a psychology of wreckage imparted by an ideology that is a failure by necessity of theory and practice. The Joker failed at life and so sets out to destroy it for others. So too are those consumed by an ideological vision to which the world stubbornly refuses to conform.  This is why any left/right interpretation of The Joker is too limited.  The movie came out only a few months before virus lockdowns. Was it a premonition? Probably in some way. In those days, we were gorged by media and politics with insane visions of how society should work. It should not surprise us when these visionaries ultimately turn to anger, then dehumanization of opponents, and then plot plans for tearing down what exists just for the heck of it.  That “what is” could be world trade, energy consumption, diversity, human choice generally, the freedom of association, the chaos of enterprise the existence of the rich, a degenerate race, the frustration of one man with his absence of effective power. Hardly anyone imagined what would become the ideological basis of destructionism: pathogenic control.  Destructionism is stage two of any unachievable vision of what society should be like against a reality that refuses to conform. Destructionism also proves to be strangely compelling to populist movements that are anxious to externalize their enemies (the infected, the unvaccinated) and smite the forces that stand in the way of their reassertion of power.  Finally such people discover satisfaction in destruction – as an end in itself – because it makes them feel alive and gives their life meaning.  The Joker, then, is not just one man, not just a crazy person, but the instantiation of the insane and morbid dangers associated with persistent personal failure backed by a conviction that when there is a fundamental conflict between a vision and reality, it can only be solved by the creation of chaos and suffering. As unpleasant as it is, The Joker is the movie we needed to see to understand and then prepare for the horrors that this unchecked mentality can and did unleash on the world.  The idea of lockdowns was literally unthinkable until it was suddenly mainstreamed in late February 2020. Only a few weeks later, it became a reality. We were told that it was all to stop a virus. It completely failed on the front but it achieved something else. Lockdowns and now mandates have empowered a ruling elite to try out a new theory of how life can work. The failure of their efforts is everywhere in evidence.  Do they now stop? Or find new ways to destroy that create more chaos, more distractions, more instability, more randomness, more experiments with the unthinkable? The Joker did create copycats.  Tyler Durden Thu, 01/20/2022 - 17:11
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[l] at 1/20/22 2:53pm
Leon Black Accuses Apollo Co-Founder Harris Of Orchestrating Smear Campaign Against Him The legal drama surrounding Apollo founder and longtime CEO Leon Black (who abruptly left the firm last year following accusations of abuse levied in the courts by an ex-girlfriend) is reaching absurd new dimensions as Black and his legal team have come forward with a bombshell allegation: In a recent court filing, Black alleged that his former business partner, Apollo co-founder and fellow billionaire Josh Harris, has been pulling strings in the shadows to orchestrate Black's undoing, and the character assassination that has seen Black's name dragged through the mud, forcing him out of roles like his chairmanship of the Museum of Modern Art. Bloomberg private equity reporter Heather Perlberg expounded on these latest developments in a story published Thursday which was based mostly on court filings from Black's legal team (the billionaire is fighting a civil lawsuit filed by an ex-girlfriend and longtime mistress who has accused him of sexually abusing her). In his latest filings, Black lays out a conspiracy that he alleges is being orchestrated by Harris and PR maven Steven Rubenstein. Black alleges that the two are using Black's former mistress, Guzel Ganieva, as part of a "coup and smear campaign" in an effort to install Harris as Apollo's CEO. If that is the case, Harris's efforts were unsuccessful, since Harris has also departed Apollo and is starting a new PE venture of his own. While Ganieva initially accused Black of sexual assault (despite admitting that they had a consensual sexual relationship for more than half a decade, and that he had lavished her with gifts) she later expanded her lawsuit to claim that she had also been "trafficked" by Epstein at Black's behest. In the late-Tuesday filing, Black's attorneys claimed that Harris has worked with Rubenstein to seed stories in the  media about Black's business ties with Jeffrey Epstein (whom Black paid $158MM for "tax advice", a payment that many have insinuated was the result of extortion). It also accused them of using Ganieva as part of their scheme. Now, Black's team is demanding phone records from Harris and Rubenstein that could "show communication between Ms. Ganieva's camp and Mr. Rubenstein's camp - between his accuser and the public relations team that works for his arch-rival - further demonstrating that Ms. Ganieva's claims are nothing but fabrications stitched together from whole cloth." "It is not a stretch to infer that someone with very deep pockets is supporting her and/or this lawsuit. Mr. Black is entitled to probe and prove up that inference," Black's lawyers added. Black's lawyers have subpoenaed Verizon for data on all of Rubenstein's calls and texts over the past 12 months. In a motion to quash the order, Rubenstein's lawyers said that "[a]ny private citizen should be aghast that [a bystander to a lawsuit] could be made the subject of a subpoena calling for all their telephone records simply at the whim of a litigant," Rubenstein’s lawyers wrote in a motion to quash the order that was cited by the FT. Ganieva's lawyers have dismissed Black's claims about her lawsuits being supported by his enemies as "pure speculation". Both Black and Ganieva have filed tit for tat civil complaints with the Supreme Court of the State of New York. Meanwhile, a representative for Harris, reached Wednesday, called the accusations "desperate and absurd." "Mr. Harris does not know Ms. Ganieva, has never met or spoken with her or anyone representing her, has no financial or any other dealings with her or her representatives, and had no involvement of any kind in the filing of any claims by her. Simply put, Mr. Harris has nothing whatsoever to do with the deeply troubling situation Mr. Black finds himself in, and any statement or implication otherwise is unhinged at best." According to Bloomberg, Harris blamed Black for maneuvering Marc Rowan into the CEO's chair at the private equity giant. The question now is what kind of collateral damage will result from this feud between two billionaires. Already, both Black and Harris have left the extremely successful firm that they helped to create. Both of their reputations have suffered (although Black has clearly taken the brunt of this damage). Could their fortunes, along with their standing in polite society, also be at risk? At the very least, the whole escapade could provide grist for the next season of "Billions". Tyler Durden Thu, 01/20/2022 - 16:53
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[l] at 1/20/22 2:30pm
Greenwald: Congress's 1/6 Committee Claims Absolute Power As It Investigates Citizens With No Judicial Limits Authored by Glenn Greenwald via greenwald.substack.com, In its ongoing attempt to investigate and gather information about private U.S. citizens, the Congressional 1/6 Committee is claiming virtually absolute powers that not even the FBI or other law enforcement agencies enjoy. Indeed, lawyers for the committee have been explicitly arguing that nothing proscribes or limits their authority to obtain data regarding whichever citizens they target and, even more radically, that the checks imposed on the FBI (such as the requirement to obtain judicial authorization for secret subpoenas) do not apply to the committee. US Representatives Elaine Luria, Adam Schiff, Liz Cheney, Jamie Raskin, Adam Kinzinger and Chairman Bennie Thompson, speak to the media following testimony during the Select Committee to Investigate the January 6th Attack on the US Capitol (Photo by OLIVIER DOULIERY/AFP via Getty Images) As we have previously reported and as civil liberties groups have warned, there are serious constitutional doubts about the existence of the committee itself. Under the Constitution and McCarthy-era Supreme Court cases interpreting it, the power to investigate crimes lies with the executive branch, supervised by the judiciary, and not with Congress. Congress does have the power to conduct investigations, but that power is limited to two narrow categories: 1) when doing so is designed to assist in its law-making duties (e.g., directing executives of oil companies to testify when considering new environmental laws) and 2) in order to exert oversight over the executive branch. What Congress is barred from doing, as two McCarthy-era Supreme Court cases ruled, is exactly what the 1/6 committee is now doing: conducting a separate, parallel criminal investigation in order to uncover political crimes committed by private citizens. Such powers are dangerous precisely because Congress’s investigative powers are not subject to the same safeguards as the FBI and other law enforcement agencies. And just as was true of the 1950s House Un-American Activities Committee (HUAC) that prompted those Supreme Court rulings, the 1/6 committee is not confining its invasive investigative activities to executive branch officials or even citizens who engaged in violence or other illegality on January 6, but instead is investigating anyone and everyone who exercised their Constitutional rights to express views about and organize protests over their belief that the 2020 presidential election contained fraud. Indeed, the committee's initial targets appear to be taken from the list of those who applied for protest permits in Washington: a perfectly legal, indeed constitutionally protected, act. This abuse of power is not merely abstract. The Congressional 1/6 Committee has been secretly obtaining private information about American citizens en masse: telephone records, email logs, internet and browsing history, and banking transactions. And it has done so without any limitations or safeguards: no judicial oversight, no need for warrants, no legal limitations of any kind. Indeed, the committee has been purposely attempting to prevent citizens who are the targets of their investigative orders to have any opportunity to contest the legality of this behavior in court. As we reported in October, the committee sent dozens if not hundreds of subpoenas to telecom companies demanding a wide range of email and other internet records, and — without any legal basis — requested that those companies not only turn over those documents but refrain from notifying their own customers of the request. If the companies were unwilling to comply with this "request,” then the committee requested that they either contact the committee directly or just disregard the request — in other words, the last thing they wanted was to enable one of their targets to learn that they were being investigated because that would enable them to seek a judicial ruling about the legality of the committee's actions. But now the committee is escalating its aggressive investigative actions. They have begun sending subpoenas to private banks, demanding the banking records of private citizens, and doing so such that either the person never finds out or finds out too late to obtain a judicial order about the legality of the committee's behavior. In one case, they targeted JP Morgan with these subpoenas while knowing that that bank is being represented by former Obama Attorney General Loretta Lynch; Lynch — unsurprisingly — then directed her client not to accommodate any requests from its own clients to ensure judicial review On November 22, the 1/6 Committee served a subpoena on Taylor Budowich — a former spokesman for the Trump campaign who never worked for the U.S. Government — that requested a wide range of documents as well as his deposition testimony. On December 14, Budowich voluntarily complied by handing over a large amount of his personal records, and then, on December 22, he flew to Washington at his own expense and submitted to questioning. There is no suggestion that Budowich was engaged in any violence or other illegal acts at the Capitol on January 6. Their only interest in this private citizen is his connection to the Trump campaign and his stated view that he believed the 2020 election was marred by fraud. After he furnished the committee with those documents and then testified, Budowich learned from others that the committee was issuing subpoenas directly to the banks used by other individuals for their personal accounts. He thus requested that his lawyer notify his own bank, JPMorgan Chase, that he would object to their cooperation with any subpoena without first providing notice to him so that he can have time to seek a legal ruling in court. Typically, citizens learn when law enforcement agencies such as the FBI serve subpoenas to third-party providers such as banks or internet companies. That allows a crucial right: to contest the legality of the action in court before the documents are supplied. But when such a subpoena is concealed from the person, it prevents them from obtaining judicial review. In general, citizens learn of FBI subpoenas, and the FBI (with rare exceptions) has the power to impose a "gag order” or otherwise prevent the person from learning about it only if they first persuade a court that such an extreme measure is warranted (by arguing, for instance, that a terror suspect will flee or destroy evidence if they learn they are being investigated). That safeguard ensures that in most cases, a citizen has the right to seek judicial protection from an illegal act by an investigative body. But the 1/6 Committee recognizes no right of any kind and no limits on its power. On November 23 — the day after it served a subpoena on Budowich himself — it served a subpoena on Budowich's bank, JPMorgan. The original date for the bank to produce the records was December 7, but JPMorgan — advised by Loretta Lynch as its legal counsel — bizarrely requested that the deadline be extended until December 24: the day before Christmas, knowing that courts would be closed that day and the next. It was only on December 21 — when Budowich was in Washington for his testimony before the committee — did JPMorgan send him notice at his home that it had received a subpoena and intended to produce the requested documents on December 24: just three days later. As JPMorgan and Lynch knew would happen, Budowich did not see the letter until he arrived home on the evening of December 22: less than forty-eight hours before the bank told him they were going to give up all of his financial records to the committee. Upon discovering that the committee had subpoenaed his bank, Budowich's lawyers immediately advised JPMorgan that they had legal objections to the subpoena, and requested that — given it was about to be Christmas Eve and the courts would be closed — the bank seek an extension from the committee to enable Budowich to seek a judicial ruling. But the bank, advised by Loretta Lynch, refused — and told him they intended to turn the documents over on Christmas regardless of whether that gave him time to request judicial intervention. The bank even refused to provide a copy of the subpoena they received from the committee, which Budowich, to this very day, has not seen. Budowich's lawyers did everything possible to seek judicial intervention before JPMorgan gave all his financial documents to the committee, but the timing agreed to by the committee, Lynch and the bank — documents produced on Christmas Eve, with notice to him arriving just a couple days before when he was testifying in Washington — made it impossible, by design. As a result, JPMorgan gave all of his banking records to the committee without even seeking an extension. Budowich was therefore left with no alternative but to file an after-the-fact lawsuit against House Speaker Nancy Pelosi and the committee members, seeking an emergency injunction against the committee's use of his banking records. In response, both the committee and JPMorgan argued that the entire question was “moot” given that they already handed over the documents. In other words, lawyers for the committee and Loretta Lynch created a plot whereby JPMorgan would notify Budowich of its intent to hand over the documents right before Christmas, so as to purposely deny him time to seek a court ruling, and then used the fact that he was "too late” in filing as a ground for arguing that the court should shut its doors to him and refuse to even give him a hearing. The court agreed that Budowich's request for an emergency injunction was “moot” given that the bank already handed supplied the documents, but agreed to rule on the merits of the arguments about whether the subpoena was legal. The parties’ briefs on this question were submitted to an Obama-appointed federal judge, James Boasberg, in Washington. The oral argument on Budowich's request to enjoin the use of his banking records by the committee was held earlier on Thursday, and Judge Boasberg quickly rejected Budowich's objections to the subpoena. It will now be appealed to the Court of Appeals, but the issues presented by the committee's arguments are chilling. At the hearing, the committee's lawyers essentially repeated the same argument they advanced in their legal brief: namely, that none of the legal safeguards imposed on the FBI and other law enforcement agencies to guard against abuse of power apply to this Congressional committee, which therefore enjoys virtually absolute power to do what it wants. That is not an exaggerated summary of the committee's argument. The primary law on which Budowich is relying is The Right to Financial Privacy Act (“RFPA”), which prohibits any “financial institution, or officers, employees or agent of the financial institution” from "provid[ing] to any Government authority access to or copies of, or the information contained in, the financial records of any customer” unless they have first complied with the requirement of that law. Among the key requirements is that a “financial institution shall not release the financial records of a customer until the Government authority seeking such records certifies in writing to the financial institution that it has complied with the applicable provisions of this chapter.” As Budowich's lawyers argued, the key to the law is that a person whose financial records are sought must receive notice of that attempt and be given sufficient time to challenge it in court: Both 12 U.S.C. §§ 3405 (administrative subpoena or summons) and 3408 (formal written request) require that a copy of the subpoena or request “have been served upon the customer or mailed to his last known address on or before the date on which the subpoena or summons was served on the financial institution” together with a formal statutory notice allowing ten (10) days from the date or service or fourteen (14) days from the date of mailing the required notice. See 12 U.S.C. §§ 3405, 3408. Additional provisions of RFPA establish the right of a financial institution customer to challenge a request for their financial records in an appropriate United States District Court, and that proceedings involving such challenges should be completed or decided within seven (7) calendar days of the filing of any Government response. See 12 U.S.C. § 3410(a)-(b). The committee did not deny that it failed to meet these requirements. Obviously, they could not argue that, given that the plan they created with JPMorgan and its lawyer, Loretta Lynch, was designed to ensure that Budowich have no time to obtain a judicial ruling before his bank records were handed over. Instead, the committee's response is they do not have to comply with this law. “The Act restricts only agencies and departments of the United States, and the Select Committee is neither,” the committee's lawyer contended. In fact, they explicitly argued that these safeguards were meant to be imposed only on the FBI and other law enforcement agencies, but were intended to exempt Congress even when, as here, they are clearly engaged in investigating private citizens for potential crimes. “Multiple provisions of the statute underscore that Congress intended 'Government authority' to mean an executive branch agency or department,” the committee's lawyers wrote in an assertion of power breathtaking in its scope and limitlessness. All of the other committee's arguments are similarly designed to bestow on itself absolute and unlimited power in how it investigates private citizens, and to insist that the judiciary is without power to impose limits on it. The committee insists, for instance, that it can investigate anyone it wants in connection with 1/6 even if its motive is not to enact new laws and even if the documents it seeks (Budowich's financial records) have no relationship to any proposed new laws. That is because, it says, “Congressional committees are not required to identify a specific piece of legislation in advance of conducting an investigation of the pertinent facts. It is sufficient that a committee’s investigation concerns a subject on which legislation 'could be had.'" Such a principle, if accepted, would destroy any limits on Congress’s ability to investigate citizens (clearly, it was possible for the McCarthy-era Congressional investigations to lead to new laws even though, as the Supreme Court twice ruled when striking them down, that was clearly not its primary purpose). But Judge Boasberg nonetheless accepted the committee's argument on the ground that an appellate court had already ruled that the 1/6 Committee had a valid legislative purpose and he was therefore bound by that decision. The committee's other arguments are even more extreme: namely, that “the Constitution’s Speech or Debate Clause provides absolute immunity to Members and committees when performing legislative acts" and that “sovereign immunity prohibits litigation against Congress to which it has not consented, and no such consent has been.” That would mean that the 1/6 Committee could literally do whatever it wanted to citizens, and no court would have the right even to review the legality or constitutionality of what it is doing let alone put a stop to it. What happened during the first War on Terror — and so many other events that were perceived as traumatic — is instructive here. So many Americans were so horrified by the carnage of that day that, for years, many did not care or want to hear about legal niceties, constitutional limits or civil liberties regarding the government's actions. Anything the government did in the name of responding to or retaliating for 9/11 became inherently justified, and anyone who objected — no matter the principles cited — was deemed to be on the side of the terrorists. The same dynamic is prevailing here. There are serious constitutional limits on the ability of Congress to investigate private citizens. It is blatantly abusive to scheme with JPMorgan and its counsel Loretta Lynch to ensure that a citizen has no time to seek judicial relief regarding the committee's attempt to obtain mounds of his personal and financial records. And, in general, the committee has been on a rampage targeting not only Trump officials or people who engaged in criminal behavior at the Capitol on January 6 but a wide group of citizens whose only crime appears to be their political beliefs and associations — exactly what the Supreme Court cited when striking down the excesses of Congress’s McCarthy-era probes of citizens. But with the media overwhelmingly cheering anything done in the name of stopping the Trump movement and those who supported 1/6 in any way, all of these civil liberties concerns and constitutional protections are run roughshod over in the name of safety. The latest arguments from the Congressional 1/6 Committee amount to little more than an assertion of unfettered power for Adam Schiff, Liz Cheney and the rest of the committee members to dig into the lives of anyone they want without limits. To support the independent journalism we are doing here, please subscribe, obtain a gift subscription for others and/or share the article Tyler Durden Thu, 01/20/2022 - 16:30
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[l] at 1/20/22 2:13pm
Netflix Craters On Subscribers Miss, Catastrophic Guidance Recent earnings reports from streaming giant Netflix have been a mixed bag: the stock tumbled one year ago when the company reported a huge miss in both EPS and new subs, which at 2.2 million was tied for the worst quarter in the past five years, while also reporting a worse than expected outlook for the current quarter. This reversed four quarters ago when Netflix reported a blowout subscriber beat and projected it would soon be cash flow positive, sending its stock soaring to an all time high - if only briefly before again reversing and then tumbling three quarters ago when Netflix again disappointed when it reported a huge subscriber miss and giving dismal guidance, leading to the second quarter when Netflix slumped again after the company missed estimates and guided lower. This again reversed last quarter when Netflix soared after it blew away expectations and guided to a whopper Q4. Which brings us to today, when the stocks has tumbled back to the middle of its range for much of the past two years, with investors on edge to find out not whether the company would confirm its impressive guidance. Said otherwise, how many new subscribers did Netflix add in the third quarter? That number, for the company which ended the third quarter with more than 213 million subs, will sway how the company’s stock moves in after-hours trading. In other wrods, will Netflix’s “monster quarter for content” translate into outsize subscriber gains? That’s the question Wells Fargo analyst Steven Cahall asked in a research note Wednesday. New films, such as “Red Notice” and “Don’t Look Up,” and the limited series “Squid Game” were the most-watched in Netflix history. Well, the answer in a word is no, because despite bearing modestly on revenue and EPS, NFLX missed on Q4 streaming adds, but more importantly, its Q1 subs forecast was an absolute disaster, and at just 2.50 million it was nearly 4 million below the street's estimate of 6.26 million. Here is what NFLX just reported for Q4. EPS $1.33, beating est. 81c Rev. $7.71B, matching est. $7.71B Operating margin 8.2% vs. 14.4% y/y, beating the estimate 6.96% Operating income $631.8 million, down 34% y/y, but also beating the estimate $559.0 million Negative free cash flow $569 million vs. negative $284.0 million y/y, missing the estimate of negative $516.8 million So far so good, or at least not terrible. But this is where the wheels comes off, because while the company had previously forecast 8.5 million Q4 paid subs, it achieved just 8.28 million (which still was just above the Wall Street estimate of 8.13 million), down 2.7% Y/Y... This is how the company explained this miss: We slightly over-forecasted paid net adds in Q4 (8.3m actual compared to the 8.5m paid net adds in both the year ago quarter and our beginning of quarter projection). For the full year 2021, paid net adds totaled 18m vs 37m in 2020. Our service continues to grow globally, with more than 90% of our paid net adds in 2021 coming from outside the UCAN region. The Q4 subscriber miss was broken down as follows: UCAN streaming paid net change +1.19 million, +38% y/y, missing the estimate +596,839 EMEA streaming paid net change +3.54 million, -21% y/y, beating the estimate +3.45 million LATAM streaming paid net change +970,000, -20% y/y, missing  the estimate +1.23 million APAC streaming paid net change +2.58 million, +30% y/y, missing the estimate +2.91 million But the real gut punch was the company's Q1 2022 guidance, where the company not only saw revenue of $7.9 billion, far below the $8.12 billion estimate, and EPS of 2.86 which was also below consensus of $3.37, but the worst of all is that the company now expects just 2.50 million streaming paid subs this quarter, some two-thirds below the consensus of 6.26 million, bringing the company's total subs to just over 224 million. This would be the worst start to a year since at least 2017! And visually: This, as Stanphyl Capital notes, explains why NFLX just announced a big price increase - the growth is gone, so it has to start maximizing revenues in more conventional ways. Now you know why $NFLX just announced a big price increase... It's got to start milking the subs it's got, as it can't grow enough any more by getting new ones. — Stanphyl Capital (@StanphylCap) January 20, 2022 In an ominous twist, instead of focusing on the potential market share, Netflix was surprisingly honest when addressing the competitive landscape saying that "consumers have always had many choices when it comes to their entertainment time - competition that has only intensified over the last 24 months as entertainment companies all around the world develop their own streaming offering." And then there's this: "While this added competition may be affecting our marginal growth some, we continue to grow in every country and region in which these new streaming alternatives have launched." At this point the narrative fell back to the familiar "growth" chatter: "This reinforces our view that the greatest opportunity in entertainment is the transition from linear to streaming and that with under 10% of total TV screen time in the US, our biggest market, Netflix has tremendous room for growth if we can continue to improve our service." But wait, there was more bad news news, as the company projected that for 2022, it is currently targeting an operating margin of just 19%-20%, explaining that its operating margin outlook is driven by two main factors. First, as seen in the chart below, we delivered above the three percentage point annual linear progression over the past two years (average of four percentage points per year). Second, NFLX said that the US dollar "has strengthened meaningfully against most other currencies. With ~60% of our revenue outside of the US due to our international success, we estimate that the US dollar’s appreciation over the past six months has cost us roughly $1 billion in expected 2022 revenue (as a reminder, we don’t hedge)." Well... maybe it's time to hedge!?  And so with the vast majority of our expenses in US dollars, this translates into an estimated two percentage point negative impact on our 2022 operating margin. In hopes of easing investor fears, the company said that as it has written in the past, "over the medium term we believe we can adjust our pricing and cost structure for a stronger US dollar world. In the near term, we want to continue to invest appropriately in our business and don’t want to over-react to F/X fluctuations to the detriment of our long term growth. There is no change to our goal of steadily growing our operating margin at an average increase of three percentage points per year over any few year period" Unfortunately, the market clearly did not believe this in light of the catastrophic subscriber guidance, which is payback for years of pulled forward demand thanks to stimmies and omicron, and the stock is now cratering after hours, tumbling more than $60 or over 12% after hours to $447. Putting this in context, the stock was at $700 on November 17, barely two months ago. Developing Tyler Durden Thu, 01/20/2022 - 16:13
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[l] at 1/20/22 2:01pm
Stocks Pump'n'Dump, Bitcoin Jumps As US Macro Slumps China cut rates overnight, US jobless claims spiked, Existing home sales plunged, Peloton puked, and geopolitical malarkey remains at '11'... so it really shouldn't be a surprise that stocks and bond yields were lower on the day (but having been conditioned to BTFD for the last 12 years, US equity market investors got another slap back to reality today). No https://t.co/kSzSxT8eut — zerohedge (@zerohedge) January 20, 2022 Futures rallied hard on the ugly jobless claims data as algos lifted them to yesterday's late-day high stops and tomorrow's gamma-heavy Op-Ex provided the ammunition, but its all went pear-shaped with a massive puke that felt very forced. Small Caps and Nasdaq screamed up 2% at the day's highs, only to give it all back and then some in the last hour... Small Caps are now down 6% on the week (a short week) as BTFD turns into sell-the-fucking-rips... This the Nasdaq and Small Caps' worst start to the year since 2009. Technically, this was very ugly with The Dow breaking closing below its 200DMA (for the first time since 12/1/21), Nasdaq closed below its 200DMA for the first time since April 2020, Russell 2000 is at its lowest since 1/5/21 (down YoY), and the S&P 500 closed below its 100DMA for the first time since 10/4/21... For now it appears the Powell-Put is significantly lower as rate-hike expectations remain near cycle-highs... Source: Bloomberg Before we leave equity land, investors told Peloton to get on yr bike, dumping 25% on record volume back below its IPO price... Source: Bloomberg All of which can be roughly translated as... Yields were lower across the board today with the long-end significantly outperforming (30Y -4bps, 2Y -0.1bps)... Source: Bloomberg That flattened the yield curve back to yesterday's lows and its lowest close since the post-Powell-Pivot/Omicron puke... Source: Bloomberg The dollar chopped around in a relatively narrow range today but ended higher on the back of a bid as stocks puked... Source: Bloomberg Bitcoin ripped higher on the ugly claims data, then faded after tagging the highs from earlier in the week... Source: Bloomberg Gold dipped very modestly on the day (after nearing $1850 at its highs)... Oil prices slipped after DOE confirmed API's reports with a crude inventory build and weak gasoline demand... Finally, we note that the recent slew of disappointing data and sentiment has driven 'hope' down to its lowest since before COVID... Source: Bloomberg It appears President Biden can't jawbone this one... and he is about to face soaring gas prices again too... Source: Bloomberg Tyler Durden Thu, 01/20/2022 - 16:01
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[l] at 1/20/22 1:46pm
Maxwell Defense Files Motion For New Trial Over Sex Trafficking Charges Authored by Dave Paone via The Epoch Times (emphasis ours), Ghislaine Maxwell’s defense team filed a motion in federal court on Dec. 19 requesting a new trial for the British socialite. Jeffrey Epstein associate Ghislaine Maxwell sits as the guilty verdict in her sex abuse trial is read in a courtroom sketch in New York City, on Dec. 29, 2021. (Jane Rosenberg TPX Images of the day/Reuters) On Dec. 29 Maxwell was found guilty of five out of six sex-trafficking charges on behalf of the late convicted pedophile Jeffrey Epstein. Accompanying exhibits for the new trial request are under seal. At the center of the motion is Juror No. 50, who had recently stated publicly he was a victim of childhood sexual abuse and made this known to his fellow jurors during deliberations. The prosecution had previously requested there be an inquiry into the juror and the defense had previously requested a new trial. On Jan. 5, Judge Alison Nathan set a briefing schedule with Jan. 19 as the date the defense could officially file a motion for a new trial. The prosecution could respond on Feb. 2 and the defense could reply to that on Feb. 9. The prosecution informed Nathan on Jan. 10 that if there’s no new trial it will drop its two outstanding perjury charges against Maxwell. On Jan. 14 Nathan scheduled Maxwell’s sentencing for June 28. Tyler Durden Thu, 01/20/2022 - 15:46
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[l] at 1/20/22 1:27pm
Bank of America Gloats After S&P Hits Its Bearish Year-End Price Target After Just 3 Weeks Yesterday, we reported that Morgan Stanley's chief equity strategist - and biggest Wall Street bear with a handful of exceptions - took a preemptive victory lap, and capitalized on the recent market rout which has left his bullish colleagues scrambling who to revise their narrative, to predict even more pain for stocks in the first half including a 10-20% correction in H1, even though technically at 4,500, the S&P is still some 100 points away from his 2022 base case target for the S&P500. But if Wilson's victory lap may seem premature in retrospect, especially if stocks soar from here, Bank of America's chief equity strat, Savita Subramanian has every reason to float - while not nearly as bearish as Wilson, her year-end price target of 4,600 has already been hit, prompting a difficult question: "Is it 2023 yet?" As Subramanian gloats, "the S&P 500 now hovers just below our year-end target of 4600 already" adding that "elements of our too bearish call last year are playing out today." Here's why: Last year, we underestimated margin preservation of corporates amid rising inflation, and failed to forecast that negative real rates would fall further. But wage pressures are now starting bite and real rates have risen ~50bp this year. In 2021, we underestimated the impact of liquidity on stocks: Fed balance sheet increases have explained more of S&P 500 returns than earnings post-GFC; if we plug last year’s balance sheet expansion into this historical relationship, our liquidity framework yields an S&P 500 2021 year-end price ranging from 4500 (using rate of change in Fed asset base) to 4900 (using chg.); the actual close was 4766. To be sure, Subramanian was also quite bearish in 2021 as well, but as she writes in the mea culpa, she underestimated margin preservation of corporates amid rising cost pressure. She also notes that the S&P 500’s 27% price return was entirely due to upward earnings revisions, as the forward P/E actually compressed by 5%. This followed 2020’s purely multiple-expansion-driven gains. In 2021, all sectors’ except Real estate and Utilities saw returns driven by EPS revisions; meanwhile Energy saw the biggest EPS revision, driving its gains, and as Subramanian notes, "stocks with positive estimate revisions saw higher returns than any other factor we track." And while Savita can certainly take the W and pull her price target for the time being before deciding how to proceed once things stabilize, she - like Wilson over at MS - remains steadfastly bearish, and forecasts EPS growth to slow from ~50% in 2021 to trend 6.5% in 2022, coupled with even more multiple compression as revisions and guidance have weakened. Staples and Communication Services – two sectors BofA is underweight –have seen the weakest revisions/guidance.... and finally wages are starting to bite, as downward guidance around cost pressure has begun to materialize in earnest. Another simple reason why BofA remains bearish is that as shown in the charts below, Fed liquidity was the main driver of returns in 2021... liquidity which won't be coming back until the next crash. And while the liquidity handoff from Fed/government to consuemrs/corporates is bullish for the economy, it is bearish for stocks. The liquidity transfer: Fed & gov. spent money and now cash balances are high Following a ~$11T increase in the Fed balance sheet and money supply (M2), the Fed and US government successfully injected much needed liquidity into the system and saved the world. Now, the consumer and corporates are sitting with a record $19T in cash, a 35% increase from 2019. Why is this bearish for stocks? Because historical relationships between cash balances versus M2 and versus Fed balance sheet expansion suggest that consumer cash is more tied to money supply (the real economy) than Fed balance sheets, while corporate cash is tied to the real economy and to monetary policy by similar magnitudes. With quantitative tightening expected this year – with balance sheet reduction of over $600B in 2022 (house view), corporates are more likely to see the negative impact via a rising cost of capital and asset deflation, than the consumer will. Then, after several pages of factor analysis, BofA focuses on its regime indicator – which aggregates macro indicators to yield four phases of the cycle – and concludes that the US has shifted from “Mid Cycle” in earlier 2021 to “Late Cycle” in August. Historically, High Quality, Low Risk and High Dividend Yield performed best in this phase. Free Cash Flow also typically outperforms. And since we are late cycle, the next big event is recession. As for markets, she concludes that the "hawkish Fed changes the story in 2022. With quantitative tightening expected later this year, our liquidity framework above suggests muted returns from here – 4600 on the S&P 500 by year end, and just +1.5%/yr over the next three years based on YoY Fed balance sheet change and +2.8%/yr based on rate of change." There is much more in BofA's full report (available as usual for professional subs) but readers get the message: the S&P has hit BofA's price target of 4,600 and according to the bank's chief equity strategist, we aren't going anywhere for the next 3 years (and if we are going somewhere, it's lower). Tyler Durden Thu, 01/20/2022 - 15:27
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[l] at 1/20/22 1:05pm
Investing Legend Turns Apocalyptic, Expects Stocks To Crater 50% In Largest Wealth Destruction In US History It was several years ago when Jeremy Grantham quietly turned from stock bull to vocal permabear, and while his market notes turned breathlessly alarmist (if only to those who were long his multi-billion fund GMO), such as this from June 2020 "Stock-market legend who called 3 financial bubbles says this one is the ‘Real McCoy,’ this is ‘crazy stuff’", it wasn't until early 2021 that Grantham's warnings of an imminent crash became especially shrill... and spectacularly wrong. Recall, back in January 2021, Grantham wrote that "Bursting Of This "Great, Epic Bubble" Will Be "Most Important Investing Event Of Your Lives", while was followed by warnings of a "Spectacular" Crash In "The Next Few Months." Needless to say, no crash followed as the Fed and other central banks went all in on stabilizing the market, resulting in an epic year for risk assets which closed 2021 at all time highs, while GMO suffered not only steep losses but also substantial redemptions, a humiliating outcome for Grantham who had previously called the bursting of both the dot com and housing bubbles, but failed to account for just how determined the Fed is to avoid another bubble bursting. But with stocks again swooning on fears Fed support of gradually fading, it didn't take long for the 83-year-old Grantham to publish his most apocalyptic note yet, "Let The Wild Rumpus Begin" out this morning, in which he revisits the familiar them that we are currently living in a superbubble - only the fourth of the past century - and like the crash of 1929, the dot-com bust of 2000 and the financial crisis of 2008, Grantham is "nearly certain" the bursting of this bubble has begun, sending indexes back to statistical norms and possibly further. How much lower? The iconic value manager sees the S&P tumbling by nearly 50% to 2,500 from its all time highs of 4,800 just a few weeks ago. The Nasdaq Composite, which closed in a technical correction on Wednesday down 10% from its all time high, may sustain an even bigger correction. “I wasn’t quite as certain about this bubble a year ago as I had been about the tech bubble of 2000, or as I had been in Japan, or as I had been in the housing bubble of 2007,” Grantham told Bloomberg in a “Front Row” interview. “I felt highly likely, but perhaps not nearly certain. Today, I feel it is just about nearly certain.” The signs that Grantham has been looking at are hardly a secret: the first indication that the bursting of the superbubble has begun came last February, when dozens of the most speculative stocks began falling. One proxy, Cathie Wood’s ARK Innovation ETF, has since tumbled by 52%. Next, the Russell 2000, an index of mid-cap equities that typically outperforms in a bull market, trailed the S&P 500 in 2021. Indeed, many of the bubble baskets which are a proxy of central bank liquidity, have been sharply lower for the past year with a handful of exceptions. Grantham also points to the kind of “crazy investor behavior” indicative of a late-stage bubble: meme stocks, a buying frenzy in electric-vehicle names, the rise of nonsensical cryptocurrencies such a dogecoin and multimillion-dollar prices for non-fungible tokens, or NFTs. However, while it has certainly become more subdued, as the following chart of single stock option activity from Goldman shows, retail is still solidly in the market. “This checklist for a super-bubble running through its phases is now complete and the wild rumpus can begin at any time,” Grantham, writes adding that “when pessimism returns to markets, we face the largest potential markdown of perceived wealth in U.S. history" To be sure, Grantham admits that he may not have timed the top perfectly, but says it's only a matter of time before the bubble bursts. In the meantime, we are living in the "vampire phase of the bull market" which will survive for a while but eventually it "keels over and dies. The sooner the better for everyone", to wit: ... we are in what I think of as the vampire phase of the bull market, where you throw everything you have at it: you stab it with Covid, you shoot it with the end of QE and the promise of higher rates, and you poison it with unexpected inflation – which has always killed P/E ratios before, but quite uniquely, not this time yet – and still the creature flies. (Just as it staggered through the second half of 2007 as its mortgage and other financial wounds increased one by one.) Until, just as you’re beginning to think the thing is completely immortal, it finally, and perhaps a little anticlimactically, keels over and dies. The sooner the better for everyone. Sparing no superlatives to describe what is coming, Grantham said the coming crash could rival the impact of the dual collapse of Japanese stocks and real estate in the late 1980s, with catastrophic consequences. Not only are equities in a super-bubble, according to Grantham there’s also a bubble in bonds, “the broadest and most extreme” bubble ever in global real estate and an “incipient bubble” in commodity prices. Even without a full reversion back to statistical trends, he calculates that losses in the U.S. alone may reach $35 trillion. While Grantham is one of the iconic (and last remaining) value managers who’s been investing for 50 years and calling bubbles for almost as long, Bloomberg's Erik Shatzker writes that he knows his predictions are fodder for skeptics. One obvious question: How could the S&P 500 advance 26.9% in 2021 -- its seventh-best performance in 50 years -- if stocks were poised to plummet, especially when Grantham was warning of an epic crash last January? Rather than disprove his thesis, Grantham said the strength in blue-chip stocks at a time of weakness in speculative bets only reinforces it: “This has been exactly how the great bubbles have broken,” he said. “In 1929, the flakes were down for the year before the market broke, they were down 30%. The year before they’d been up 85%, they had crushed the market.” In other words, Grantham is pointing to the same lack of market breadth that prompted even Goldman to ring the alarm last month, when the bank pointed out that 51% of all market gains since April are from just 5 stocks.. Having seen the same pattern that played out in every past super-bubble is what gives him so much confidence in predicting this one will implode similarly. Echoing what we have said since 2009, when the view was largely contrarian and has since become consensus, Grantham puts the blame for bubbles of the past 25 years on bad monetary policy. Ever since Alan Greenspan was Fed chairman, he argues, the central bank has “aided and abetted” the formation of successive bubbles by first making money too cheap and then rushing to bail out markets when corrections followed. Now, Grantham warns, investors may no longer be able to count on that implied put. He says that with inflation running at the fastest clip in four decades “limits” the Fed’s ability to stimulate the economy by cutting rates or buying assets,.. “They will try, they will have some effect,” he added. “There is some element of the put left. It is just heavily compromised.” Under these conditions, the traditional 60/40 portfolio of stocks offset by bonds offers so little protection it’s “absolutely useless,” Grantham said. He advises selling U.S. equities in favor of stocks trading at cheaper valuations in Japan and emerging markets, owning resources for inflation protection, holding some gold and silver, and raising cash to deploy when prices are once again attractive. “Everything has consequences and the consequences this time may or may not include some intractable inflation” Grantham writes. “But it has already definitely included the most dangerous breadth of asset overpricing in financial history.” Here, we disagree: yes, there will be a crash, one which will send deflationary shockwaves around the world, but it will only prompt an even bigger rescue by the same Fed which no longer has an alternative after it crossed the Rubicon in 2020 and bought corporate bonds and junk bond ETFs to avoid an all out collapse in the post-covid turmoil. In the next crash the Fed, whose only contribution over the past 100 years has been to make the rich richer and create an epic "wealth effect" bubble, will buy stocks and ETFs, transforming into the Bank of Japan, before eventually it loses all credibility. But by then, stocks will be orders of multiple higher, completely disconnected from reality and fundamentals and trading only on the quadrillions in liquidity central banks inject to preserve the western way of life. Incidentally, the question of what happens after the next crash is one that was posed just yesterday by another market bear, Stifel strategist Barry Bannister, who predicts a market drop to 4,200 in Q1 2022, but wonders what happens post-correction, when he writes that "equities risk the third bubble in 100 years if the Fed loses its nerve and cancels much of the tightening plan. We doubt that occurs anytime soon, because we believe bubbles are exceptionally poor policy, and the prior two equity bubble tops (1929 and 2000) were followed by “lost decades.” We do not doubt it at all, and are absolutely certain that the Fed - which has no choice but to blow an even bigger bubble after the coming market crash - will do just that. The only question we have is how much of a crash can the Fed weather before it capitulates, i.e., what is the level of the Fed put. We are confident that another 10-20% lower - which will obliterate Biden's ratings and Republican avalanche in the miderms, surging inflation notwithstanding - and the market will finally discover what it is looking for. Grantham's full note is below (pdf link).   Tyler Durden Thu, 01/20/2022 - 15:05
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[l] at 1/20/22 12:45pm
Taylor Rule In Dust-Up With Rates Shows Path Ahead By Ven Ram, cross-asset strategist for Bloomberg Markets Live Policy rates in the U.K., U.S., Canada and the euro zone trail forecasts bootstrapped from the Taylor Rule by the most, suggesting that terminal rates in the most advanced economies may be underestimating the task ahead for policy makers. Policy rates in those economies lag the implied policy rate by 3 percentage points or more, while the gap is narrower in New Zealand and other nations where central banks are trying to kindle inflation.   Traders are pricing terminal rates from about 0.30% to 2% from across the euro zone to Canada. That illustrates skepticism on whether central banks will be able to push through the rate hikes they are penciling in and whether their economies will be able to withstand such moves. For instance, the median dot plot for the Fed funds rate at the end of 2024 is 2.125%, while the terminal rate priced by the markets is around 1.83%. Just in the past week we have seen traders positioning themselves for a steeper rate trajectory, with some bracing for a 50-basis point increase as soon as March. With Fed Chair Jerome Powell suggesting that a balance-sheet runoff will commence sooner in this cycle than the previous time, and Governor Christopher Waller saying the exercise “will take some pressure of longer-end rates,” it may be that the historical response of a flatter curve concurrent with a hiking cycle may have to be rewritten. The Fed is “way behind” the curve, and the policy rate should be anywhere from 3% to 6%, not the near-0% now targeted, John Taylor, who coined the eponymous rule, remarked at the annual meeting of the American Economic Association. In the U.K., the terminal rate is around 1.10%, which may reflect comments by Bank of England Governor Andrew Bailey that interest rates are unlikely to climb back to pre-financial-crisis levels. Still, with inflation in the U.K. north of 7% and 5y5y inflation swaps around 4%, it’s inconceivable that raising the Bank Rate to 1%-1.25% will put the inflation genie back in the bottle. In Canada, conviction that the central bank won’t raise rates before April is being tested. A Bank of Canada survey of business executives described an economy running increasingly hot, with labor shortages, record inflation expectations and strong demand. Markets are pricing in as much as 200 basis points of tightening over the next two years. That would go a long way toward bridging the gap implied by the Taylor Rule. The euro zone may be the exception. Even if the Fed raises rates more than three times this year and the BOE follows suit, it’s inconceivable that the European Central Bank will be keen to raise rates for fear of committing a policy mistake. While the ECB may reduce the pace of its enlarged asset-purchase program from the second quarter, it may still be hesitant to raise rates before the first quarter of 2023. Even in such a scenario, it will move in measured steps, meaning its deposit rate will take a long time to even reach zero. The Taylor Rule, which was coined in the early nineties, served as a guide for developed-market central banks until the onset of the global financial crisis. However, the Fed unveiled quantitative easing in response to the crisis, and it’s become part of the global central banking tool kit, deployed at the first sign of trouble. That meant that policy rates began to diverge drastically from the path implied by the rule. The lack of an adjustment factor for the impact of QE marks a crucial limitation of the analysis, which means that perhaps not all of the gaps between terminal rates and the Taylor rule may be bridged in the current policy cycle. Tyler Durden Thu, 01/20/2022 - 14:45
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[l] at 1/20/22 12:32pm
Daily Briefing: It's Beginning to Look a Lot Like Another Commodity "Super Cycle" The commodity “super cycle” chorus will only get louder with crude oil touching eight-year highs, nickel reaching levels not seen in a decade, and even gold looking like a compelling trade right now. Mixed U.S. economic data probably won’t alter the Federal Reserve’s plans to tighten monetary policy. But China’s central bank is clearly in easing mode. Combined with constrained supply across the complex, and that’s fuel enough for commodities firmly linked to the Middle Kingdom’s economy. Tony Greer talks with Maggie Lake about what’s happening with commodities amid a murky global outlook, and joins the conversation to discuss the impact of recent moves by the People’s Bank of China. Questions for Tony? Drop them right here on the Exchange: https://rvtv.io/33VU4CE Tyler Durden Thu, 01/20/2022 - 14:32
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[l] at 1/20/22 12:27pm
Fed Releases Much-Anticipated Report On Digital Dollar “The introduction of a CBDC would represent a highly significant innovation in American money,” says The Fed in its much-anticipated report on the possible issuance of a U.S. digital currency. The 35-page discussion paper on a government-backed coin makes no firm conclusions on whether (making it clear it did not “favour any policy outcome” at this point) it should be issuing a CBDC, but instead solicits feedback (as Powell had previously explained would be its purpose). Powell has previously said any CBDC should serve “as a complement to, and not a replacement of, cash and current private-sector digital forms of the dollar, such as deposits at commercial banks”. The bank in the paper said a digital dollar could bolster the financial system by ensuring the U.S. dollar remains the preeminent currency in the international financial system, improve cross-border payments and increase financial inclusion and ease the dollar’s use in new technology. However, the central bank also warned of possible negative effects, including draining deposits from traditional banking and making runs on financial firms more likely or more severe.  The Fed said: “While a CBDC could provide a safe, digital payment option for households and businesses as the payments system continues to evolve, and may result in faster payment options between countries, there may also be downsides.” “They include how to ensure a CBDC would preserve monetary and financial stability as well as complement existing means of payment. Other key policy considerations include how to preserve the privacy of citizens and maintain the ability to combat illicit finance,” it added. In the paper, the central bank noted that inaction on developing a digital US currency might erode the country’s supremacy in global markets. “It is important . . . to consider the implications of a potential future state in which many foreign countries and currency unions may have introduced CBDCs,” the Fed said. “Some have suggested that, if these new CBDCs were more attractive than existing forms of the US dollar, global use of the dollar could decrease - and a US CBDC might help preserve the international role of the dollar,” it added. The bottom line - this document is a nothing-burger in terms of any further insight into if and when The Fed will unleash digital money on the citizenry since comments are sought and ultimately this has to be approved by Congress. "We look forward to engaging with the public, elected representatives, and a broad range of stakeholders as we examine the positives and negatives of a central bank digital currency in the United States," Federal Reserve Chairman Jerome Powell said in a statement. “The Federal Reserve does not intend to proceed with issuance of a C.B.D.C. without clear support from the executive branch and from Congress, ideally in the form of a specific authorizing law,” he added. Read the full report below: Tyler Durden Thu, 01/20/2022 - 14:27
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[l] at 1/20/22 12:07pm
The Federal Reserve Is A Money-Making Enterprise Via SchiffGold.com, The Federal Reserve is a money-making enterprise. This probably shouldn’t come as any surprise, given that the central bank can create money out of thin air and buy yielding assets. Still, the Fed rakes in a staggering amount of money. The central bank recently released its unaudited preliminary financial statement for 2021. The Fed’s total net income for 2021 came in at $107.8 billion. How does that compare to a legitimate business? Apple booked a pretax income of $109 billion in its fiscal year 2021. So, the Fed rakes in nearly the same income as Apple. The Fed’s total Revenues for the year came in at $123.1 billion. Here are the sources of that “income” courtesy of WolfStreet. $122.4 billion in interest received on its holdings of securities, mostly Treasury securities and MBS that it purchased as part of its QE. $275 million in net income from its pandemic era emergency programs that are being unwound, such as the corporate bond and bond ETF holdings that it sold by November 2021. $457 million in fees from services, mostly paid by the banks. By the way, the Fed does not pay taxes. But it does remit nearly all of its net income to the US Treasury. This is required by law. But don’t worry, plenty of people still get a cut of the pie before the Fed sends all that cash over to the federal government. The Fed paid  $583 million in statutory dividends to the shareholders of the 12 regional Federal Reserve Banks. Bankers also got a nice cut. The Fed paid $5.3 billion in interest on the reserves it holds for banks. It pays interest at a 0.15% rate on cash deposited by banks. Here are some of the other big expenses paid by the Federal Reserve, again courtesy of WolfStreet. $1.9 billion in foreign currency revaluation losses $414 million in interest paid to counterparties of its reverse repos. $1 billion in costs related to producing, issuing, and retiring currency (the paper dollars). $5.3 billion in operating expenses of the 12 regional Federal Reserve Banks, including the salaries of the luminary traders that run these FRBs. $970 million in expenses of the Board of Governors (the federal agency, of which Powell is the chair) $628 million to fund the Consumer Financial Protection Bureau. After all of that, Uncle Sam’s cut was $107.4 billion. That was the highest level since 2015. The lesson – there is big money in central banking. Nice work if you can get it. But you can’t. Tyler Durden Thu, 01/20/2022 - 14:07
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[l] at 1/20/22 11:45am
Nomura Warns Of Build-Up In "Combustible Fuel For A Mechanical Short Squeeze" Across Op-Ex Facing a massive $3.3tln of options notional, including $1.3tln of single stock options, expiring on Friday, Nomura's Charlie McElligott warned yesterday that "it’s a doozy of epic “short Gamma, short Delta”... But, SpotGamma notes that the shift lower in markets over the past several days has increased the concentration of put-heavy gamma tied to Fridays OPEX. We now see =30% of S&P, and =20% of QQQ rolling off on 1/21. You can see below that as long as the S&P is This suggests this index expiration is generally supportive of S&P prices. This view is supported by McElligott, who said in a note this morning that: "I am beginning to think that despite the volatility into / around Op-Ex 'Gamma unclench' and as we continue to see liquidation-type de-risking in futures, that there is very much a potential path for a counter-trend rally in Equities in the coming-days." And given the tumble in liquidity, that move could be aggressive... The Nomura strategist notes that a lot of the “short Gamma” set to come off this expiry is from downside hedges, which are ITM and increasingly likely to be monetized the longer we don’t break down (still dependent on whether rolled-out or not, of course), while also noting that the broad need to hedge / size of hedges is reduced from the selling-down of underlying positions; accordingly, it did indeed look like there was “monetization” of some downside yday, as “negative / short $Delta” in QQQ and IWM actually incrementally DECREASED DoD, despite spot another -1% / -1.5% lower. In the meantime, “extreme negative / short Delta” across all option expiries is at risk of becoming a combustible “fuel” for a mechanical squeeze if spot rallies…while we see over -$107B of front-week $Delta alone! This “squeeze risk” too builds when taken in conjunction with the aforementioned fresh CTA “shorts” in NQ and RTY there providing additional mechanical covering “buy stops” not too far above spot as well - along with various other Global Eq futs “shorts” in the model And it appears the squeeze could have started as the broad US indices ripped higher from the open this morning... But, as SpotGamma notes, given all of the above, we still expect traders to hold hedge protection through Wednesdays FOMC. Markets still have to contend with a continued reduction in single stock deltas, which foreshadows more “volatile chop” into 1/26. For next week SpotGamma suggests that the clearing of Fridays OPEX positions (Index puts + long call hedges) could set up a bullish move post FOMC – assuming Powell doesn’t upset expectations. The passing of FOMC often leads to a further reduction in “event hedges” and a reduction in implied volatility (leading to supportive vanna flows). However, as McElligott warns, it is critical that S&P Futs continues to hold above its own CTA Trend model “flip” level, as the current S&P “+100% Long” signal would turn to “-37% Short” on a break and close below today’s sell-trigger at 4507 as the 3m window would turn “short”. And similarly, a reclaiming in Spooz of its 100DMA (4571 for ES) either today or in coming-days would further strengthen the case that LOCALLY, “the floor is in” for a potential Post Fed rally next week. Tyler Durden Thu, 01/20/2022 - 13:45
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[l] at 1/20/22 11:34am
What Will It Take To Sink The Housing Market? Update (1330ET): Following this morning's print showing that 2021 saw the best annual existing home sales since 2006, MishTalk's Mike Shedlock asks the question everyone should be asking as prices hit record-er and record-er prices - what will it take to sink the housing market? Sales are hot thanks to cheap money from the Fed, rising rent prices, speculation, fear of missing out, three rounds of fiscal stimulus, and a booming stock market.  It's difficult to put a percentage on each of those factors but they all tie together.  If the Fed gets in 3 or 4 rate hikes, mortgage rates will go up and so will alleged unaffordability.  The stock market boom makes people feel wealthy and that leads to second home buying which in turn reduces supply available to first time buyers.  Fear of missing out (FOMO) is always a factor in bubbles and the Fed sure blew another. Housing speculation is nowhere near as great as in 2007 but the stock market euphoria is much greater.  Finally, there does not have to be any reason for a selloff other than a change in sentiment. Think back to 2006 when there were lines around the block for the right to enter a lottery to buy a Florida condo. Two weeks later there were no lines.  That spread from city to city and quickly nationwide. Sentiment changed and there was no apparent trigger. The pool of greater fools simply ran out. This time the Fed will get the blame but the result will be the same. The stock market and housing will go down together and most will say "No one saw this coming."  *  *  * As we detailed earlier, amid Omicron anxiety, surging mortgage rates, and a dip in homebuilder sentiment, analysts expected a modest 0.6% MoM drop in existing home sales in December, but while they were right on direction, the magnitude was way off as December Existing Home Sales crashed 4.6% MoM - the biggest MoM drop since Feb 2021. Source: Bloomberg This is the worst December drop in sales since 2009 and existing home sales dropped 7% YoY. “Even as sales are falling, the fact that prices are showing this strength is showing that buyers are there. But the lack of inventory is hindering some of the sales activity,” Lawrence Yun, NAR’s chief economist, said on a call with reporters. While the December print saw total existing home sales slide, 2021 still saw the best annual sales since 2006... Source: Bloomberg One potential problem looming is that home prices appreciated by the most since 1999. The median selling price rose 15.8% in December from a year ago to $358,000. That compares with $354,400 in the prior month. Sales of homes costing less than $250,000 declined in December, while purchases of properties priced at least $500,000 increased Lean inventories remain the housing market's biggest problem. There were just 910,000 homes for sale last month, down 18% from a month earlier and 14.2% from a year ago. At the current pace it would take 1.8 months to sell all the homes on the market, also a record low. Realtors see anything below five months of supply as a sign of a tight market. All regions posted sales decreases last month, led by the West and South Tyler Durden Thu, 01/20/2022 - 13:34
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[l] at 1/20/22 11:11am
Biden Walks Back Ukraine Statements: Any Russian Offensive Marks An "Invasion" During President Biden's 2-hour solo press event, he was asked repeatedly about the administration's posture on Ukraine and the growing fears of a Russian invasion threat. To the disappointment and anger of US hawks as well as Ukrainian government officials themselves, he made a distinction between a "minor incursion" and an all-out "invasion" - suggesting that only in the latter scenario might there be a robust response from the US. CNN soon after the Q&A session focused on Biden's distinguishing between an "incursion" vs. major invasion: But he suggested a "minor incursion" would elicit a lesser response than a full-scale invasion of the country. "I'm not so sure he is certain what he is going to do. My guess is he will move in. He has to do something," Biden said, describing a leader searching for relevance in a post-Soviet world. "He is trying to find his place in the world between China and the west." We want to remind the great powers that there are no minor incursions and small nations. Just as there are no minor casualties and little grief from the loss of loved ones. I say this as the President of a great power ?? — Володимир Зеленський (@ZelenskyyUa) January 20, 2022 Ukraine's President Zelensky responded Thursday by emphasizing "there are no minor incursions" - after Biden layed out that America's response would be determined based on the scope of any Russian offensive, with the US president strongly suggesting he would likely stop at imposing sanctions. Hawks took this as tantamount to Biden giving Putin a 'green light' to act as Russia pleases in restive Donbass. Many want Biden to instead threaten a full American military response. All this has prompted Biden to do some walking back of the original statements. On Thursday he sought to clarify at the start of a press event that was supposed to focus on infrastructure. "I've been absolutely clear with President Putin. He has no misunderstanding. If any assembled Russian units move across the Ukrainian border, that is an invasion," Biden said. "Let there be no doubt at all that if Putin makes this choice, Russia will pay a heavy price," Biden continued. He noted this could also come in the form of a Russian cyber-attack or other form of irregular warfare. The day prior Biden stated provocatively that Putin "has never seen sanctions like the ones I have promised will be imposed if Russia further advances into Ukraine." Re: Biden in press conference suggesting a "minor incursion" by Russia into Ukraine would be met with a lesser response, CNN's Matthew Chance (who's in Kyiv) just reported that Ukrainian officials "watched those remarks with horror" — Steve Lookner (@lookner) January 19, 2022 He concluded the Ukraine portion of his Thursday remarks by saying, "The Ukrainian foreign minister said this morning that he's confident of our support and resolve and he has a right to be." Importantly, on Friday US Secretary of State Antony Blinken is set to meet with his Russian counterpart FM Sergey Lavrov in Geneva, where they will attempt to reach some level of understanding on a path forward on dialogue focusing on deescalating the situation. Tyler Durden Thu, 01/20/2022 - 13:11
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[l] at 1/20/22 10:56am
Peloton Plunges Below IPO Price On Reports Of Production Halt Peloton Interactive, Inc. shares crashed more than 24% after CNBC reported internal documents from the company that said production of its bikes and treadmills would be temporarily halted due to souring demand. Shares have been halted and reopened several times and now trade at a significant discount of the $29 IPO price.  The story for Peloton continues to worsen. In a confidential presentation dated Jan. 10, the company (known for slapping an iPad on a stationary bike and charging thousands of dollars) said demand for its bikes and treadmill had faced a "significant reduction" worldwide. CNBC explains more about Peloton's upcoming production halts:  Peloton plans to pause Bike production for two months, from February to March, the documents show. It already halted production of its more expensive Bike+ in December and will do so until June. It won't manufacture its Tread treadmill machine for six weeks, beginning next month. And it doesn't anticipate producing any Tread+ machines in fiscal 2022, according to the documents. Peloton had previously halted Tread+ production after a safety recall last year. Peloton has completely misjudged demand as it's stuck with thousands of cycles and treadmills sitting in warehouses across the country.  *This story is developing...  Tyler Durden Thu, 01/20/2022 - 12:56
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[l] at 1/20/22 10:38am
JPM Trading Desk: After Yesterday's Systematic Selling, Let's See If This Bounce Can Hold After the worst start to a year for the Nasdaq since 2008... ... stocks are finally rebounding solidly and are posting what may be the strongest day for markets in 2022. But the question on everyone's mind is whether the solid early action will persist. Indeed, as JPM writes in its market summary note today, "today’s pre-market setup is similar to yesterday. Let’s see if we can hold pre-market gains throughout the session as yesterday afternoon felt like systematic selling. If 1.90% was a buy-level in bonds, then we may have a relief rally being initiated led by Tech." However, as JPM's Andrew Tyler notes, "I would not take this as a sign that the rotation is over, though. I think investors are still figuring out which elements of Tech will be resilient to a tightening cycle while also taking profits on multi-year investments. Add to that the selling and shorting within the most speculative sectors and you have an interpretation for 2022 market behavior." With that in mind, here is the latest JPM trading desk commentary on yesterday's market action, and into today: Consumers: 1) PG shaking off the margin weakness is a good(albeit surprising) sign as we head into the bulk of staples earnings season. EPS flow-through is minimal despite sales beats = multiples stretching. Until the growth sell-off subsides it seems $ will continue to hide in large cap staples. HFs have been fighting shorts in the space and seems they may be throwing in the towel at the wrong time. Will be interesting to see if PG can hold... I'm watching CHD, KMB etc closely as these charts looks incredibly stretched. 2) RETAIL finally seeing a bounce. Luxury data points in Europe (Burberry,Richemont etc) helping sentiment in CPRI, TPR etc. Additionally continue to hear anecdotally that the Jan CC data is re-accelerating (we are seeing the same in our Chase Spend data). Not sure if the bounce will sustain but maybe enough to improve some pretty poor sentiment in the space. TMT: We are seeing a bit more demand in megacap tech….and that’s helping buttress the broader tape heading into the afternoon. Megacap positioning continues to be near a 4-year low across HFs (and we continue to see sporadic shorts within the cohort…mostly to hedge out broader growth risk along with private investment exposure). Yields aren’t higher….for the moment …but the largest trend we’re seeing in tech today is the prevalence for larger cap stocks…and a lot of today’s trading activity (and hedging) coming through ETFs. Separately, an interesting article on Google’s payment’s strategy…which also discusses them getting more comfortable with crypto Financials: BAC. Conf call over. Much more reassuring message on nearer term expense trajectory than the peers, clarifying the flat y/y expense guide incorporates inflation, investments, and markets strength. Small positive on the NI side, with Q1 NII up couple hundred million from Q4, implies NII in the $11.7bn range vs consensus at $11.4bn. Loan growth comments also bullish, broad based and recently accelerating, with high single digit the aim vs the street closer to 5%. MS. Q4 conf call over. Constructive message on the markets trajectory, with the banking pipeline healthy and the year starting well – mgmt. expect advisory results to benefit from a broadening of transactions across sectors.Expenses clearly an area of focus after the GS disappointment yesterday,MS emphasizing the inherent operating leverage in the model (more wealth/asset mgmt. focused) vs the markets franchise of Goldman. Nointention/need to change risk tolerance to hit the newly outlined targets(street already there). No color on the $225m strategic investment gain inequities but solid call. Tyler Durden Thu, 01/20/2022 - 12:38
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[l] at 1/20/22 10:15am
US Army Guerrilla Warfare Exercise To Target "Freedom Fighters" Authored by Paul Joseph Watson via Summit News, The US Army is set to conduct a “guerrilla warfare exercise” later this month in North Carolina where troops will battle against “freedom fighters.” Yes, really. The two week “unconventional warfare exercise” will take from from Jan. 22-Feb. 4 on privately owned land in a remote location which remains unknown. “Called Robin Sage, the exercise serves as a final test for Special Forces Qualification Course training and it places candidates in a politically unstable country known as Pineland,” reports the Charlotte Observer. “These military members act as realistic opposing forces and guerrilla freedom fighters, also known as Pineland resistance movement,” said the the U.S. Army John F. Kennedy Special Warfare Center. Information about the exercise was provided to the media in a bid to avoid civilians confusing the drills with actual terrorist attacks or warfare, which has happened before. “It will be realistic enough to include the sounds of gunfire (blanks) and flares,” said the center. As Chris Menahan notes, a similar Robin Sage exercise in 2019 showed resistance fighters displaying a flag that says “liberty.” “They could tell these soldiers they’re battling the Chinese, Russians, Iranians, North Koreans or other foreign enemies but instead they have them training to kill “freedom fighters” with “Liberty” flags,” writes Menahan. The exercise will do little to dampen concerns that the Biden administration is launching a de facto ‘domestic war on terror’ targeting patriots and Trump supporters. Following the January 6 Capitol riot, Democrats ludicrously compared the events to September 11 in an attempt to justify using federal resources that would normally be focused on actual terrorists against American conservatives. Earlier this month, the Justice Department created a new “specialized unit focused on domestic terrorism” in response to an “elevated” threat from violent extremists in the United States. NEW: Citing "elevated threat from domestic violent extremists," DOJ official announces creation of new domestic terrorism unit "to augment our existing approach." https://t.co/v1W3qyU6rl pic.twitter.com/HfnIM3X4Xr — ABC News (@ABC) January 11, 2022 However, polls show that Americans are split on who represents the biggest threat, particularly after the Waukesha attack, its subsequent cover up, in addition to the fact that left-wing extremists spent much of 2020 rioting and burning down American cities. A recent Schoen Cooperman Research survey found that voters are split on domestic extremism, with 23 per cent naming left-wing extremism and 21 per cent naming right-wing extremism as the greater concern. Following the January 6 incident, Army General Mark Milley, the chairman of the Joint Chiefs of Staff, said he wanted to understand “white rage,” although an interest in understanding “black rage” after a sustained period of violent mayhem caused by Black Lives Matter protesters wasn’t seemingly of any importance. *  *  * Brand new merch now available! Get it at https://www.pjwshop.com/\ In the age of mass Silicon Valley censorship It is crucial that we stay in touch. I need you to sign up for my free newsletter here. Support my sponsor – Turbo Force – a supercharged boost of clean energy without the comedown. Get early access, exclusive content and behinds the scenes stuff by following me on Locals. Tyler Durden Thu, 01/20/2022 - 12:15
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[l] at 1/20/22 9:55am
Dave Portnoy Beats Business Insider To Punch Over Second 'Rough Sex' Hit Piece Two months after Dave Portnoy debunked allegations by Business Insider that he had non-consensual rough sex with several women, the Barstool Sports founder announced on Thursday that Insider is back at it - and has scrounged up more accusers for a second hit-piece. Except, Dave has more receipts... To review, after Insider published a November article accusing the multi-millionaire of sexual abuse, Portnoy hit back - providing text messages and other communications which made clear the accusers continued wanting dick from Portnoy, or thought they could somehow leverage their encounters for personal gain. On Thursday, Portnoy warned Insider that he's ready for them after receiving an email demanding a response within 24 hours on their new hit piece. What's more, read the letter below from Portnoy's legal counsel which makes clear he's eager to sue the pants off the far-left publication. pic.twitter.com/Kc3eNgYEaE — Dave Portnoy (@stoolpresidente) January 20, 2022 Needless to say, Portnoy was prepared this time and beat Insider to the punch. Tyler Durden Thu, 01/20/2022 - 11:55
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[l] at 1/20/22 9:55am
IRS To Require Facial Recognition To View Tax Returns The US Internal Revenue Service (IRS) has partnered with a Virginia-based private identification firm which requires a facial recognition selfie among other things, in order to create or access online accounts with the agency. According to KrebsonSecurity, the IRS announced that by the summer of 2022, the only way to log into irs.gov will be through ID.me. Founded by former Army Rangers in 2010, the McLean-based company has evolved to providing online ID verification services which several states are using to help reduce unemployment and pandemic-assistance fraud. The company claims to have 64 million users. Some 27 states already use ID.me to screen for identity thieves applying for benefits in someone else’s name, and now the IRS is joining them. The service requires applicants to supply a great deal more information than typically requested for online verification schemes, such as scans of their driver’s license or other government-issued ID, copies of utility or insurance bills, and details about their mobile phone service. When an applicant doesn’t have one or more of the above — or if something about their application triggers potential fraud flags — ID.me may require a recorded, live video chat with the person applying for benefits. -KrebsonSecurity For the sake of his article, Krebs made himself a guinea pig and signed up with ID.me to describe the lengthy process that "may require a significant investment of time, and quite a bit of patience." After uploading images of one's driver's license, state issued ID or passport. If your documents get accepted, ID.me will then prompt you to take a live selfie with your mobile device or webcam. That took several attempts. When my computer’s camera produced an acceptable result, ID.me said it was comparing the output to the images on my driver’s license scans. -KrebsonSecurity Once that's accepted, Id.me will ask to verify your phone number - and will not accept numbers tied to voice-over-IP services such as Skype or Google Voice.  screenshots via krebsonsecurity.com Krebs' application became stuck at the "Confirming your Phone" stage - which led to a video chat (and having to resubmit other information) which had an estimated wait time of 3 hours and 27 minutes. Krebs - having interviewed ID.me's founder last year - emailed him, and was able to speak with a customer service rep one minute later "against my repeated protests that I wanted to wait my turn like everyone else." As far as security goes, CEO Blake Hall told Krebs last year that the company is 'certified against the NIST 800-63-3 digital identity guidelines" and "employs multiple layers of security, and fully segregates static consumer data tied to a validated identity from a token used to represent that identity." "We take a defense-in-depth approach, with partitioned networks, and use very sophisticated encryption scheme so that when and if there is a breach, this stuff is firewalled," said Hall. "You’d have to compromise the tokens at scale and not just the database. We encrypt all that stuff down to the file level with keys that rotate and expire every 24 hours. And once we’ve verified you we don’t need that data about you on an ongoing basis." Krebs believes that things such as facial recognition for establishing one's identity is a "Plant Your Flag" moment, because "Love it or hate it, ID.me is likely to become one of those places where Americans need to plant their flag and mark their territory, if for no other reason than it will probably be needed at some point to manage your relationship with the federal government and/or your state." The top commenter in his comments section, meanwhile, begs to differ...   Tyler Durden Thu, 01/20/2022 - 11:55

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