Quinn: The Fourth Turning Detonation, Part 1
  [Source: http://www.zerohedge.com/fullrss2.xml 2021/01/27-10:25]

Quinn: The Fourth Turning Detonation, Part 1

Authored by Jim Quinn via The Burning Platform blog,

“Americans today fear that linearism (alias the American Dream) has run its course. Many would welcome some enlightenment about history’s patterns and rhythms, but today’s intellectual elites offer little that’s useful. Caught between the entropy of the chaoticists and the hubris of the linearists, the American people have lost their moorings.” – Strauss & Howe – The Fourth Turning

“The ancients believed that each cyclical extreme, mirroring the hopes and fears of the other, helps generate the other. The night longs for the day, the day for night. In war, people yearn for relief from strife, leading to peace. In peace, people yearn to champion what they love, leading to war.” – Strauss & Howe – The Fourth Turning

When I started thinking about my annual beginning of the year article in early January, I tried to formulate a catchy title. Knowing we have entered the thirteenth year of this Fourth Turning, with the intensity of the crisis reaching an unparalleled level since November 4, I decided upon Fourth Turning Detonation. I immediately thought that might be too dire and figured I would change it later. After the first few weeks of the new year, I now think it might be grossly inadequate to describe what is coming in 2021.

It is easy to get distracted by the daily gyrations, ceaseless media propaganda, political theater, false narratives, and delusional beliefs of both the left and right, as this military empire built on debt and deceit spirals towards its fiery cataclysmic climax. Opposing forces have gathered themselves into position focusing on defeating their domestic enemies, with the left seeming to have strategic advantage but led by hubristic dullards, while numerous foreign adversaries circle like hungry vultures ready to pounce on the dying beast of an empire.

Last January I wrote a two-part article called 2020 – Year of Living Dangerously which harkened back to another article I had written eight years before 2012 – Year of Living DangerouslyI lamented the fact I had not understood Fourth Turnings will take their own sweet time on the way to a climax, with twists and turns which will differentiate it from previous Crisis periods in U.S. history. My impatience for the great battle to resolve this struggle has not and will not impact the timeline, but the three elements driving this Crisis remain firmly in control, as they have since 2008: debt, civic decay, global disorder.

My belief regarding the subtext of what has happened and is happening in this country has not changed. I certainly underestimated the lengths these psychopaths in suits would go to in 2020 to further pillage the world’s wealth while using a pandemic as cover to further their agenda of hegemony and turning the world into a virtual prison camp under constant technological surveillance. Despite the timing, I still believe that which is unsustainable will not be sustained.

“It seems I always underestimate the ability of sociopathic central bankers and their willingness to destroy the lives of hundreds of millions to benefit their oligarch masters. I always underestimate the rampant corruption that permeates Washington DC and the executive suites in mega-corporations across the land. And I always overestimate the intelligence, civic mindedness, and ability to understand math of the ignorant masses that pass for citizens in this country. It seems that issuing trillions of new debt to pay off trillions of bad debt, government sanctioned accounting fraud, mainstream media propaganda, government data manipulation and a populace blinded by mass delusion can stave off the inevitable consequences of an unsustainable economic system.”

I used to try and make specific predictions about the new year generally centered upon economic chaos, stock markets crashing, global conflict, and various other doom-like events. But those running this clown show somehow convince the masses all is well, the economy is healthy, inflation is non-existent, debt does not matter, college makes you smart, we’re energy self-sufficient, 100 million working age Americans not working – but unemployment was 3.5%, the stock market hitting all-time highs is good for you even though your real wages haven’t gone up in a decade, and America was great again.

It is amazing to me how effective propaganda is when multiple generations have been indoctrinated and socially engineered in the government school system and decades of boob tube fake news has been programmed into their pliably ignorant brains. Edward Bernays created the game plan and the techno-oligarch despots currently running the show are executing it to perfection.

“The conscious and intelligent manipulation of the organized habits and opinions of the masses is an important element in democratic society. Those who manipulate this unseen mechanism of society constitute an invisible government which is the true ruling power of our country. …We are governed, our minds are molded, our tastes formed, our ideas suggested, largely by men we have never heard of.” – Edward Bernays – Propaganda

This Fourth Turning likely has another 5 to 10 years before some sort of convulsive resolution, unless it is accelerated like the Civil War Fourth Turning, with similar tragic consequences and mass casualties. Predicting the actual events which will occur over a short-term time frame is a fool’s errand, so I prefer to try and discern the direction and amplitude of the ongoing Crisis to gauge how we should prepare for what is coming.

I do admire writers like Jim Kunstler who really go out on a limb and make extremely specific forecasts for the coming year, like he did on January 1 with his Forecast 2021 — Chinese Fire Drills with a side of French Fries (Jacobin-style) and Russian DressingIf even 25% of his predictions had come to fruition, 2021 would have gone down as one of the most earth shattering in history. But here we are a few weeks later and all his predictions about Trump going to war with the Deep State and winning a glorious victory for the American people failed to materialize. Trump is golfing at Mar-a- Lago, while the Deep State remains firmly in control and in the midst of consolidating their power by crushing dissent through Domestic terrorism legislation and complete control of social media platforms.

Even Kunstler acknowledges the Fourth Turning as a generational dynamic driving the events pushing the country and the world towards armed conflict. My high-level prognostications for 2020 certainly did not include a global pandemic used to introduce an Orwellian global dystopia and justification to steal a presidential election through mail-in ballot fraud and voting machine rigging.

Of course, Bill Gates predicted the pandemic in 2018 and his buddy Fauci, in 2017, said there was “no doubt” Donald J. Trump would be confronted with a surprise infectious disease outbreak during his presidency. I wonder why he had no doubt. Fauci, an unknown lifetime government bureaucrat, is now a media darling, despite being wrong about everything. And Gates’ wealth has soared during this plandemic. My big picture guesses last year were colored by the assassination of Iranian general Qasem Soleimani on January 3, expecting Middle East conflict to erupt. These were my main conjectures for 2020:

  • The Fed will continue to run their electronic printing presses at warp speed until the inevitable banquet of consequences is served to all.

  • We have entered the extreme greed phase of this debt-based Ponzi scheme. The stock market is in the blow-off stage, where earnings, valuations, and rational thinking are meaningless. Momentum and a delusional belief in the infallibility of the Fed are all that matter. Who knows how far it will go, but fear will eventually rear its ugly head, and a cascading collapse will make a lot of useful investing idiots very angry for the third time in the last two decades.

  • The Democrats and their Surveillance State co-conspirators have determined the best way to cover-up their treasonous acts are to stay on the offensive by impeaching Trump on bogus charges.

  • The social distress I noted last year continues unabated today as the glorification of abnormality reaches new heights. The flames of division and disarray are fanned unceasingly by the left-wing media to distract from the true desperate financial situation of the country.

  • Israel quietly foments discontent and turmoil across the region to keep the focus off itself. Russia and China support Iran economically and militarily to offset Americans dominance of the region. Confusion reigns.

  • Anyone with an ounce of critical thinking skills knows none of this is about freedom, democracy or doing the right thing. It’s about oil and it’s about the military industrial complex requiring enemies to keep the profits flowing.

  • The shale “miracle” is just another delusion built upon easy money pumped out by the Fed. No one can make profits on shale oil at $60 per barrel.

  • The months leading up to the election will be a circus. Propaganda, misinformation, and outright lies will be spread like manure. Of course, voting will not alleviate the issues which will continue to drive this Fourth Turning towards its climax – debt, civic decay, global disorder.

  • No matter the result of the upcoming election, neither side will accept the outcome.

  • There are no viable political solutions to our current dilemmas. It is just a matter of when and where the conflict goes hot and blood is spilled.

  • I do not know what events will dominate the coming year, but I do know the intensity of hate and vitriol will increase. I do know military conflict in the Middle East will expand. I do know the political machinations in this country will surge as the election approaches. I do know the Deep State will do everything in their immense power to undermine Trump. I do know the Fed will QE and Trump will cheer every new stock market record. I do know I will be lied to and propagandized by the mainstream corporate media.

I knew 2020 had the potential to be a chaotic year, but didn’t anticipate a flu with a 99.7% survival rate being used by totalitarian minded politicians to destroy the global economy, usher in Orwellian police state lockdown measures across the globe; a stock market crash followed by Fed created bubbles still growing ever bubblier through $4 trillion of money printing; adding $4 trillion to the national debt (with another $3 trillion on the way in 2021); paying millions to sit at home eating Cheetos and watching Netflix; destroying a few hundred thousand small businesses while enriching mega-corporations; putting a nail in the coffin of the 1st Amendment through censorship of conservative speech; and blatantly stealing a presidential election.

The globalist elite want to keep the fear at a high level to institute their global reset, where you will own nothing and be happy, or you will be brought to heel by the truncheon. This was the year it became crystal clear, the world is filled with good people, governed, and manipulated by bad people.

By delaying this article until after January 20 I allowed the Qanon Psyop of Trump using the military to rescue the country to pass into history as another delusion of hope over reason. I truly do not know whether the Qanon phenomena (it was not widely known by Trump supporters or most people) was just a LARP being played by former Dungeons & Dragons keyboard warriors or an FBI/CIA counter-intelligence operation designed to keep a segment of the population distracted and ever hopeful their white knight would rescue them from the clutches of the evil Deep State. I am reminded of the quote about hope from President Snow in the Hunger Games.

“Hope, it is the only thing stronger than fear. A little hope is effective, a lot of hope is dangerous. A spark is fine, as long as it’s contained.”

The elevation of Trump to president and the spark of hope he would truly drain the swamp, arrest the traitorous Deep State coup co-conspirators, lead his legions to victory over the forces of evil, and make America great again, kept half the people in the country hopeful for the last four years.

Meanwhile, the military industrial complex raked in hundreds of billions more from the American taxpayer; Wall Street bankers gorged on the trillions of free money, manufactured by their captured puppets at the Federal Reserve; the Silicon Valley despots consolidated their hold on commerce and communication; and the average American saw their standard of living continue its 50- year decline. The question is whether those constituting the “invisible government” allowed too much hope and needed the engineered pandemic to re-introduce fear as their primary control technique moving forward.

They believe they have contained the spark with their fraudulent election victory; installation of an empty senile vassal as their conduit for the great reset; having their media mouthpieces propagate the falsity of a right wing white supremacist insurrection at the Capital; crushing dissent by censoring the truth through totalitarian social media conglomerates; proceeding with an impeachment farce based on Trump telling his supporters to peacefully protest the fraudulent election outcome; and threatening to destroy the lives of all vocal Trump supporters.

I am highly doubtful they have contained the spark. I believe there are smoldering embers just waiting to be stirred into a conflagration which will engulf the entire world in a fiery purging of the existing social order, which has exhausted itself and needs to be cleansed. Jefferson understood the nature of Fourth Turnings two hundred years before Strauss & Howe put it to paper.

“Try to unlearn the obsessive fear of death (and the anxious quest for death avoidance) that pervades linear thinking in nearly every modern society. The ancients knew that, without periodic decay and death, nature cannot complete its full round of biological and social change. Without plant death, weeds would strangle the forest. Without human death, memories would never die, and unbroken habits and customs would strangle civilization. Social institutions require no less. Just as floods replenish soil and fires rejuvenate forests, a Fourth Turning clears out society’s exhausted elements and creates an opportunity.” – Strauss & Howe – The Fourth Turning

In Part Two of this article, I will examine the concept of the Grey Champion, their role in Fourth Turnings, and make some speculations as to the course of 2021 and the remainder of this Fourth Turning.

*  *  *
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Tyler Durden Tue, 01/26/2021 - 21:25
US States Ease Lockdowns Despite "Mutant" COVID 'Boogeymen'
  [Source: http://www.zerohedge.com/fullrss2.xml 2021/01/27-10:05]

US States Ease Lockdowns Despite "Mutant" COVID 'Boogeymen'

Even as President Joe Biden challenges Americans to a "100 day masking challenge" and other mask-related restrictions on federal land, some of the biggest states in the US  (including ultra-liberal California and swing-state Michigan, among others) are going their own way, resisting calls from the Biden administration to go heavy with masks and lockdowns, which have - as we've noted, seemingly made no difference and lack scientific basis.

Perhaps it has something to do with the WHO's admission that PCR overamplification may have led to the "Case-Demic" that "conspiracy theorists have long warned about.

But whatever the case may be, recently, liberal governors like New York's Andrew Cuomo appeared to recognize that the economy needs to reopen, and quickly. Even Cuomo acknowledges that the holiday spike is fading.

Notably, the spike in cases from the pre-holiday period is already beginning to subside. This, coupled with all of those warnings about a post-holiday case surge, had led to suspicions that the American public has been gaslighted - or at least intentionally misled, by federal authorities intent on doing whatever they can to tarnish President Trump's legacy.

Meanwhile, and possibly related, vaccination rates worldwide aren't off to a great start - while reports of healthcare professionals and others who refuse to take it have been rolling in.

Yet, despite liberal leaders' sudden post-inauguration interest in reopening, they seem to be ignoring the new boogeyman - the new "mutated" strains from the UK and South Africa, which have caused a good deal of panic among public health officials (whether warranted or not). 

And since the US has administered fewer than 25MM vaccines, more of these COVID "variants" are setting off alarms - causing vaccine maker Moderna announcing the development of a 'booster' shot to protect against both mutants.

Teachers' unions, meanwhile, are increasingly opposed to lawmakers pushing to return to in-person instruction within 100 days.

According to Northwestern University epidemiologist Sadiya Khan, who spoke with Bloomberg, "We’re just asking to go backwards by easing restrictions without focusing on achieving herd immunity with vaccination." The doctor is an epidemiologist at the Northwestern University Feinberg School of Medicine in Chicago."It’s very fragile," she said referring to the COVID economy.

Perhaps things would be less 'fragile' if Democratic leaders' sudden push to reopen didn't have the most suspicious timing in the known universe, and California (and other states) were more transparent about whose 'science' they're following.

Tyler Durden Tue, 01/26/2021 - 21:05
Milking The Capitol Melee For All It's Worth
  [Source: http://www.zerohedge.com/fullrss2.xml 2021/01/27-09:45]

Milking The Capitol Melee For All It's Worth

Authored by Jacob G. Hornberger via The Future of Freedom Foundation (emphasis ours),

Not surprisingly, leftists are milking the January 6 Capitol melee for all its worth. There is a simple reason for that: they wish to use it to introduce a new wave of domestic tyranny into America, just as Republicans did after the 9/11 attacks. In fact, I wouldn’t be surprised if they start referring to the melee as simply 1/6.

That’s why they continue to describe the melee as an insurrection, revolution, rebellion, sedition, terrorism, invasion, and a grave attempt to destroy our democratic system and overthrow the government. It’s clear, according to leftists, that the intent of the “invaders” was to take control over the reins of the federal government and make Donald Trump king. I wouldn’t even be surprised if they determine that Russia was behind the “invasion.”

Thus, don’t be surprised to see a new version of the USA PATRIOT Act. Anyway, the original one is getting a bit old in the tooth. And don’t be surprised to see a renewed and reinvigorated “war on terrorism,” albeit here in the United States, with increased secret surveillance, suppression of speech, indefinite incarceration, torture, and even perhaps assassination (a power that the Supreme Court has upheld with respect to both foreigners and Americans).

Moreover, don’t be surprised when the leftists use the Capitol melee to justify more anti-gun tyranny. Never mind that the “revolutionaries” never even fired a shot. They could have and, therefore, that’s a good enough reason for leftists to enact some more tyrannical gun control. Americans obviously understand this because they were buying guns in droves before Biden took power.

One thing is certain: There will be increasing destruction of liberty in America, owing to the leftist reaction to what the Trumpsters did in the Capitol.

The idea is to never let a good crisis or emergency go to waste. What better time to enact tyrannical controls than during crises or emergencies? If they are enacted in ordinary times, people might object to having their liberty destroyed. During crises and emergencies, many people let their fear induce them to trade their liberty for security.

Our American ancestors understood this. That’s why there is no crisis or emergency exception in the original Constitution or the Bill of Rights. Our ancestors understood that crises and emergencies have always been the time-honored way by which people lose their liberties, to their own government.

One of the big precedents for this phenomenon, of course, was Adolf Hitler and the Reichstag Fire. Soon after Hitler took office, terrorists fire-bombed the Reichstag, which was Germany’s equivalent of our Congress. Even worse, the terrorists were communists, which made the situation doubly scary and dangerous.

Hitler’s reaction was predictable. He went to the Reichstag and requested emergency powers to deal with the communist-terrorist crisis. When he met with resistance among members of the Reichstag, he went ballistic, screaming and berating them for not understanding the serious nature of the crisis facing Germany. Giving him temporary emergency powers would enable him to wage war on terrorism and win it.

The Reichstag gave Hitler what he wanted. Germany was never the same again, until after it was defeated in World War II. Giving Hitler those emergency powers plunged the nation into years of darkness.

There are some who say that Hitler himself instigated the Reichstag attack in order to provide the pretext for seeking emergency powers. (Would public officials really do such a thing?) Regardless, the lesson is clear: Public officials use emergencies and crises to expand power and destroy liberty.

We are now witnessing, once again, that phenomenon playing out here in the United States. A “crisis” is being used to make Americans afraid, very afraid. And then comes the additional layer of tyranny and oppression, which the afraid people go along with and even support. It’s an old racket, even going back before Hitler and the Reichstag Fire.

Tyler Durden Tue, 01/26/2021 - 20:45
Thanks To COVID-19, China Is Now The World Leader For Foreign Direct Investment
  [Source: http://www.zerohedge.com/fullrss2.xml 2021/01/27-09:25]

Thanks To COVID-19, China Is Now The World Leader For Foreign Direct Investment

China is now the world's "top destination" for foreign direct investment ("FDI"). FDI captures things like foreign companies building infrastructure and making acquisitions of local companies.

The shift came as a result of - wait for it - the Covid-19 pandemic amplifying "an eastward shift in the center of gravity of the global economy", according to the Wall Street Journal.

New investments by overseas businesses into the U.S. fell 49% in 2020 as a result of the pandemic. China saw its direct investments rise 4% over the same period of time. The success is being attributed to how the country (supposedly) handled the pandemic better than the U.S. 

The numbers, heavily influenced by the global pandemic, "underline China’s move toward the center of a global economy long dominated by the U.S.," the WSJ wrote.

Foreign investments into the U.S. peaked at $472 billion in 2016, while at the same time foreign investments in China totaled $134 billion. Since then, investments in China have continued to rise and investments in the U.S. have continued to fall. Over the last 4 years, the Trump administration discouraged investment in China and put Chinese investors on notice that investing in the U.S. would carry new national security scrutiny.

Daniel Rosen, founding partner of Rhodium Group, an independent research firm in New York, said there's little room for concern: “I don’t think one can say anything confidently about the impact of the FDI downturn in the U.S., compared to all the other hits on the U.S. economy.”

He continued: "It is natural that foreign investment would decline sharply in the U.S. under the circumstances because it has an open, market economy, while China doesn’t. There is no reason to be concerned about the outlook for the FDI in the United States providing that the U.S. is sticking with its basic open-market competitive system.”

Major names like Honeywell International and Adidas were among companies who invested more in China during the pandemic.

James Zhan, Unctad’s director of investment and enterprise, doesn't see a respite for the U.S., or other countries that have seen FDI fall, anytime soon. He said: “Investors are likely to remain cautious in committing capital. The road to full FDI recovery will be bumpy.”

Joseph Joyce, professor of international relations and economics at Wellesley College, said: “Companies are reassessing their policies about global supply chains, about foreign markets, about their own use of technology. The pandemic is making all these companies rethink the most basic assumption about where they are located.”

East Asia attracted a third of all foreign investment globally in 2020, the report notes. It marks the largest share since records began in the 1980s. Meanwhile, it isn't just the U.S. that saw huge drops in the west. The EU also saw a 71% drop in 2020 and the UK and Italy both saw "no new investment". Germany saw a 61% drop. 

While experts thought China could also see such a drop, their economy "reopened in April just as the U.S. and Europe started a series of continuing lockdowns and disruptions."

Even the Journal notes that it was China's "ability to quickly control the coronavirus within its borders helped its economy rebound relatively quickly". China also immediately rushed to shore up confidence from foreign investors at the beginning of 2020. China’s premier, Li Keqiang, told the country’s cabinet in March: “We must implement targeted policies to arrest the slide in foreign trade and foreign investment.”

Other companies have simply found it difficult to leave China. Such was the case for Seoul Semiconductor, whose CEO, Hong Myeong-ki, simply said: “We were very dependent on China.”

Tokyo based researcher Ding Ke noted that this reliance on China's market for many companies kept them in the country: “They need to reduce overreliance on supply chains in one single market. But the bigger risk they identified is losing the China market.”

Tyler Durden Tue, 01/26/2021 - 20:25
The Myths Behind The "Capitalism Is Racist" Claim
  [Source: http://www.zerohedge.com/fullrss2.xml 2021/01/27-09:05]

The Myths Behind The "Capitalism Is Racist" Claim

Authored by Lipton Matthews via The Mises Institute,

Though numerous studies prove the contrary, it is still widely assumed that capitalism perpetuates racism. Celebrities and academics incessantly broadcast the message that capitalism engenders racism. For example, recently on Twitter, superstar athlete Andre Iguodala informed his followers that capitalism cannot be divorced from racism: “Capitalism and racism go hand in hand. And you can’t have one without the other.” Equally scathing is the blistering declaration of sociologist Edna Bonacich in an academic review:

“Capitalism and racism are closely connected….The huge wealth of America’s white-owned corporations rests on the backs of the hard labor of workers, many of whom are people of color.”

Despite the popularity of anticapitalist rhetoric, it is woefully mistaken. Some entrepreneurs will express racist tendencies, but if they are determined to succeed in business, they have no alternative but to jettison such beliefs. Gary Becker pointed this out years ago in his frequently cited book The Economics of Discrimination. Becker posited that competition in the free market made it costly for companies to discriminate against individuals due to group identity. By refusing to hire qualified applicants because of race or sex, businesses would lose market share. Racists may object to employing people outside of their race, however, the crux of the matter is that self-interest trumps the collectivism of racism. Although racists may abhor minorities, the urge to accumulate wealth is far more potent than the desire to discriminate.

Similarly, recent research corroborates Becker’s thesis that firms engaging in discrimination are less likely to remain competitive. Devah Pager in an innovative 2016 study testing the relationship between observed discrimination and firm longevity concludes that these firms show a greater propensity to fail:

This study builds on the findings of an experimental audit study of racial discrimination in employment conducted in New York City in 2004….We see that 17 percent of nondiscriminatory establishments had failed by 2010, relative to 36 percent of those that did discriminate. The likelihood of going out of business for an employer who discriminated thus appears more than twice that of its nondiscriminating counterpart.

Under capitalism the allure of profit serves as a deterrent to discrimination. For instance, the strident resistance of streetcar companies in the Jim Crow South to laws mandating them to segregate black customers poignantly demonstrates the market’s hostility to unjust discrimination. Economist Jennifer Roback in an article titled “Racism as Rent-Seeking” lucidly illustrates that these laws were a result of political entrepreneurship:

Race relations in the U.S. South were in a state of flux in the period immediately after the Civil War and remained so until the turn of the century, when the “Jim Crow” system of rigid segregation was put into place….Municipal streetcars were segregated by law in many Southern cities….Prior to legislation, streetcar passengers in many cities sat wherever they wished, and next to anyone they wished. There is little to indicate that segregation was introduced in response to the demands of passengers, and in some cases, passengers of both races were dissatisfied with the new rule. Moreover, some of the streetcar companies themselves actively resisted segregation, on the grounds that segregation would be too expensive….White passengers seemed to be indifferent about segregation; streetcar companies resisted segregation; certainly, black passengers resisted segregation. Who then wanted it badly enough to work for its introduction? The most likely candidates are politicians who believed that there existed latent sentiment in favor of segregation among whites. Political entrepreneurs could offer white voters something they valued enough to vote for, but not enough to bear the costs privately. Through collective action, the costs of segregation could be imposed on the (disenfranchised) black passengers and the (regulated) streetcar companies.

Roback refers to such tactics as “psychic rent seeking,’’ indicating that people leverage the force of government to acquire psychological benefits for themselves, despite incurring expenses for others.

Notwithstanding the propaganda of leftists, rhetoric is no substitute for facts. History reveals that discrimination is primarily inspired by the corrupt agenda of rent seekers in cahoots with the government. South African leading economist Thomas Hazlett notes that this is usually the case:

The South African gold rush made the natural synergy between white-owned capital and abundant black labor overpowering….White workers feared the large supply of African labor as the low-priced competition that it was. Hence, white tradesmen and government officials, including police, regularly harassed African workers to discourage them from traveling to the mines and competing for permanent positions. Beginning in the 1890s, the Chamber of Mines, a group of employers, complained regularly of this systematic discrimination and attempted to secure better treatment of black workers. Their gesture was not altruistic, nor founded on liberal beliefs….But here they had a clear economic incentive: labor costs were minimized where rules were color-blind. This self-interest was so powerful that it led the chamber to finance the first lawsuits and political campaigns against segregationist legislation.

Likewise, South Africa during Apartheid is an excellent case study of the power of the market to eviscerate racism. To protect whites from competition, blacks were prevented by law from taking white-collar jobs. This not only limited their productivity, but also reduced the number of black employees able to take industrial jobs, thus creating artificial manpower shortages. As such the South African Employers Consultative Committee on Labour Affairs in 1977 lobbied for the elimination of discrimination based on race or color from all aspects of employment practices. Therefore, motivated by the goal to gain wealth, even vile racists will eschew racist policies.

Certainly, some owners and entrepreneurs will find niches in which they can cater to racist clients. But for those who wish to attain high levels of growth and success, the data is clear that serving all customers and workers indiscriminately is the way to wealth. Essentially, the power of the free market is the best antidote to racism. Entrepreneurs seek to win in business, and engaging in discrimination hinged on race is the surest way to lose. Of note is also the fact that people who migrate from other countries irrespective of race become wealthier after relocating to America. Yet, ironically, many who lament the racist nature of American capitalism also insist that immigrants improve their lives by immigrating to the United States.

Both theory and the empirical research show that a truly competitive marketplace is incongruous with racism, but, clearly, saying otherwise confers leftists with the benefits of expressing the “luxury beliefs” of elites.

Tyler Durden Tue, 01/26/2021 - 20:05
Is This The Next Big Hedge Fund To Blow Up... And What Happens Next
  [Source: http://www.zerohedge.com/fullrss2.xml 2021/01/27-08:53]

Is This The Next Big Hedge Fund To Blow Up... And What Happens Next

Yesterday afternoon, when Gamespot and a bunch of most shorted small cap stocks exploded to never before seen levels, we reported that Melvin Capital had emerged as the first casualty of the Reddit/WallStreetBets forced squeeze bull raids when it received an emergency $2.75 rescue loan from its previous investors, Citadel and Point72. The reason why the Gabe Plotkin-founded fund was brought to the verge of margin call liquidation, is that among its $12 billion in AUM (which is now well below $9 billion) the company had publicly reported that it also owned hundreds of millions worth of puts targeting such retail daytrading darlings as GameSpot, Bed Bath and Beyond and GSX.

Had Melvin merely held shorts - which it doesn't have to disclose under current SEC rules - it is unlikely that any of the ongoing fireworks would have ever taken place as the fund would have never attracted the attention of the WallStreetBets crowd which we now know specifically targeted Melvin Capital, and by extension its peers which held concentrated shorts in the same handful of stocks, which incidentally as we reported last Friday, just happened to be the most shorted Russell 3000 stocks, all of which had a short interest to float ratio of 50% or more: a recipe for explosive short squeezes in any market, and certainly in one as illiquid as this one.

In any case, once WallStreetBets figured out that Melvin was shorting not only some of the biggest daytrading darlings but also some of the most shorted names, it wasn't a stretch to conclude that it would become the target of a violent bull raid and that's precisely what happened on Friday, when Gamestop stock soared - a move which was catalyzed by Citron's Andrew Leff capitulating and stating he would no longer discuss his GME short - and again on Monday when the metaphorical dagger to Plotkin's heart was the spike in GME stock to $159 at which point the fund found itself in a multibillion margin call, and only a bailout by Ken Griffin and Steve Cohen could prevent catastrophe.

We already know all this. What we didn't know is who would be next, and as we said yesterday, there most certainly will be other casualties.

Well, we now have a candidate for hedge fund #2 to collapse as a result of the ongoing Reddit bull raids.

Presenting Maplelane Capital, a $3.3 billion New York-based hedge fund which was established in 2010 which according to its description "focuses on a short term approach with active participation utilizing options trading." Maplelane Capital was founded by Leon Shaulov - formerly of the disgraced tech-focused hedge fund Galleon whose boss Raj Rajaratnam was thrown in jail for insider trading on tips from a Goldman director over a decade ago - "with less than $50 million, mostly from his personal savings."

A quick look at the fund's Form ADV reveals the following information on it "Investment Strategies, Methods of Analysis and Risk of Loss"

The Adviser seeks attractive returns by utilizing a fundamental approach to equity investing across all market sectors. In addition, while the portfolios will generally be characterized as having a short-term holding period, there may be several positions that are held for a much longer holding period. It is anticipated that the Adviser will use significant amounts of leverage on behalf the Clients. The Adviser actively uses options trades to express views on the market and on individual stocks. The portfolios may have a significant short net exposure to equity markets, although at times, it may be relatively market neutral or have a significant long net exposure to equity markets.

So a fund that uses "options" to "use significant amount of leverage on behalf of clients" and is "significantly short."

Alarm bells should be going off here... But in any case, we don't care some much about the fund's investing style or history -  readers curious about Maplelane's history can read the following NYT piece. What we do care about is what it owns - or rather, is short - because a quick look at the company's latest 13F would be more than sufficient to send r/wallstreetbets howling with rage: not only does MapleLane have many of the same shorts - via publicly disclosed puts - that Melvin Capital was almost liquidated over, but it has even more puts! Below is a table of Maplelane's latest put positions.

These, as above, are the "who's who" of the most shorted stocks on Wall Street.

In short (no pun intended), all the pain that Melvin Capital is currently going through, may befall Maplelane, if it hasn't already: our only indication of how the fund is doing YTD is a brief mention in the WSJ saying that the fund is "down for the year." Worse: with an even deeper book of puts, the r/wallstreetbets community will now have even more stocks to ramp up in expectation of forcing a short squeeze either at Maplelane, or any other hedge fund that shared an idea dinner with Leon Shaulov and decided to piggyback on his shorts.

So what happens then?

Let's say Maplelane is currently nursing massive P&L losses and it is just a day or so from a terminal margin call, which will force the fund to come up with billions or be liquidated by its prime broker. Unless Maplelane is very close with Citadel, SAC pardon Point72 or another huge and very liquid hedge fund, Shaulov will have no choice but to start dumping its long to fund its margin call.

Not surprisingly, at least one member of r/wallstreetbets figured out that this is precisely what happened back in 2008 when hedge funds that were crushed by the financial crisis, siloed out their most illiquid assets and had no choice but to sell their most liquid, and best performing ones. Hence the correct observation that if the short squeeze at Melvin Capital continues, "Melvin has to liquidate their other positions if they have to cover these shorts."

Yet for once (it would appear), wallstreetbets is actually behind the market, because a quick look at some of the industry's favorite longs, shows that they got hammered. SMID-cap hedge fund growth darlings like Roku, Peloton and Square tumbled as much as 6%. Not coincidentally, Bloomberg notes thatGoldman's Hedge Fund VIP ETF which tracks hedge funds’ most popular stocks, slumped for a fourth straight day, the longest stretch since October, even as the company's basket of most-shorted names soared 15% during the same period.

“The recent squeeze in heavily shorted stocks has been nothing short of extraordinary,” said Jonathan Krinsky, chief market technician at Bay Crest Partners. “If shorts cause too much pain, there is usually some repercussion on the other side as longs have to be sold to offset losses.”

Why? Because these are among the top long holdings of such hedge funds as Melvin and... Maplelane. In other words, these are the stocks that will be liquidated next if any of a number of hedge funds caught in the massive squeeze has to liquidate their short book.

And once the reflexive selling of long to cover shorts begins, it will only escalate in a feedback loop that leads to gross deleveraging of the fund(s), more short covering, more long selling, while at the same time the prices of the most shorted stocks continues to soar.

So will this happen? Well, that's the $64 trillion question.

Ultimately, nothing that is taking place is the fault of either hedge funds or redditors or robinhooders. No, the only entity at fault here is the Fed which has injected trillions and trillions in hopes of preserving the "market" while instead it merely made a grotesque mockery of what it used to be. As we noted yesterday, "what is remarkable is how many people are "surprised" by what is going on in the "market." You throw $20 trillion stimulus at it, you nationalize the bond market, you break all links between price and fundamentals... what do you think happens?"

One thing we do know will happen, is that sooner or later it will all end in tears, whether with stocks limit up or down. Meanwhile, one may as well take advantage of this terminally broken market and make some money, as one hedge fund after another blows up.

Oh, remember that basket of most shorted Russell 3000 stocks we put together on Friday and urged readers to buy ahead of precisely this kind of market action? Well, it has more than doubled just two days later...

... and if Maplelane or some other hedge fund caught massively short is forced to liquidate in a margin call supernova, it is guaranteed that this basket will only keep rising for the foreseeable future. 

Tyler Durden Tue, 01/26/2021 - 19:53
'They're Wasting Our Time': Rand Paul Shreds 'Unconstitutional' Trump Impeachment, Lists Examples Of 'Democrat Incitement'
  [Source: http://www.zerohedge.com/fullrss2.xml 2021/01/27-08:46]

'They're Wasting Our Time': Rand Paul Shreds 'Unconstitutional' Trump Impeachment, Lists Examples Of 'Democrat Incitement'

Kentucky GOP Senator Rand Paul shredded Congressional Democrats over the second impeachment of former President Trump, arguing in a floor speech in a procedural motion to 'table or kill' the proceedings that "Democrats are about to drag our great country down into the gutter of rancor and vitriol the likes of which has never been seen in our nation’s history," adding "It’s almost as if they have no ability to exist except in opposition to Donald Trump"

Paul then argued that Democrats are guilty of the exact 'incitement' they've accused Trump of - suggesting that "No Democrat will honestly ask whether Bernie Sanders incited the shooter that nearly killed Steve Scalise," and "No Democrat will ask whether Maxine Waters incited violence when she literally told her supporters" to confront Trump officials in public."


Ultimately, 45 GOP Senators voted to kill the impeachment - meaning they agree that it's unconstitutional, while five GOP Senators voted to table it and proceed with the impeachment; Susan Collins, Lisa Murkowski, Mitt Romney, Ben Sasse and Pat Toomey.

It would require another 12 GOP Senators to convict and impeach Trump - now a private citizen.

Earlier in the week, Paul wrote that the impeachment trial was a "farce and should be dismissed before it is even allowed to begin," adding that the Senate doesn't have the authority to hold an impeachment trial for a former president.

"It shows they don’t have the votes and we’re basically wasting our time," said Paul, who believes the Senate roll call would show that over a third of the chamber thinks the proceeding is unconstitutional.

Republican senators have criticized the president for his actions on Jan. 6, but many have signaled opposition to voting to convict the president. At least 30 Senate Republicans have said they are opposed to or leaning against convicting Mr. Trump, according to a Wall Street Journal survey of senators and their public comments, leaving few open to potentially casting a guilty vote.

I doubt there are seven, quite honestly. I’m certain there aren’t 17, at least not today,” said Sen. Kevin Cramer (R., N.D.). He cited concerns over the legality of trying a former president, as well as whether Mr. Trump’s actions, while wrong, constituted incitement. -WSJ

Democrats, meanwhile, say the trial is warranted and that Congressional Republicans are focusing on the constitutional question to avoid having to weigh the impeachment on its merits - much like most of the judges who tossed out election challenges based on technical factors.

"They don’t want to be held accountable on that vote, so they’re going to try to make it another argument that [it’s] all about the Constitution," said Democratic Senator Dick Durbin.

This will be the first ever impeachment trial for a former president. It's scheduled to begin in earnest the week of Feb. 8, approximately one month after the US Capitol riot which left five people dead and temporarily disrupted the counting of the electoral votes.

Watch Paul's entire speech below:

Tyler Durden Tue, 01/26/2021 - 19:46
Former Boeing Employee Says 737 Max "Still Not Fixed" 
  [Source: http://www.zerohedge.com/fullrss2.xml 2021/01/27-08:45]

Former Boeing Employee Says 737 Max "Still Not Fixed" 

Boeing's troubled 737 Max returned to US skies last month. American Airlines was the first domestic carrier to fly the Max and has since operated more than 200 flights. While other domestic and international carriers gear up for a much wider re-launch of the aircraft, a former senior manager at Boeing's 737 Max plant in Seattle has published a new report warning that the Max is "still not fixed." 

Ed Pierson, the report's author, retired from Boeing in August 2018 and worked at the Max factory in Renton, Washington, claims more investigations are needed into the aircraft's electrical system and production quality problems at the factory. 

Pierson alleges that the US and European regulators have primarily ignored factors that he points out in the report, which may have played a role in Lion Air flight JT610 and Ethiopian Airlines flight ET302 crashes that killed 346 people. He links both crashes back to conditions at the factory in Renton.

Pierson firmly believes Boeing's effort to redesign Max's flight control system, called MCAS software, ensures a single sensor failure would not happen in flight is not enough. 

"The paper underscores the likely role a chaotic and dangerously unstable production environment played in the accidents. Mr. Pierson also puts forth three other plausible accident scenarios not addressed in the accident investigations. The 14-page report includes a timeline and an analysis that ties the two 737 MAX airplane crashes together in ways not previously reported. Most importantly, Mr. Pierson's analysis raises serious doubts as to the safety of the 737 MAX. Alarmingly, the FAA's recertification fixes do not address the problems identified in the report," the report's abstract reads.

In late 2019, Pierson testified during a House Transportation Committee hearing on both Max crashes where he described the Renton factory as "chaotic" and "dysfunctional." 

With the planes returning to the air, he is worried that Boeing and regulators have overlooked many of the issues he pointed out. 

In the report, he believes the production defects of critical Max parts were defected when they entered service, adding that the aircraft's complex wiring systems may have contributed to the random deployment of the MCAS system in flight. 

Pierson said the MCAS sensor failures contributed to both crashes but asked why they were happening to new aircraft. 

All of this suggests, Pierson explained, "point back to where these airplanes were produced, the 737 factory".

Pierson's report was analyzed by famed pilot Chesley Sullenberger who said the "report is very disturbing, about manufacturing issues in the Boeing factories that go well beyond just the Max, and also affect… the previous version of the 737." 

"Like electricity, Boeing and the FAA have taken the path of least resistance throughout the entire design, development, certification, production, and now recertification of the 737 MAX," Pierson said in the report. 

"The design of the 737 MAX, MCAS software and the failure to provide vital information and training to pilots did not trigger these accidents. Neither did corporate decision making made years ago, unethical behavior, deceptive marketing, or a misguided leadership culture that prioritized profits over safety. Nor did deregulation, regulatory capture, or a completely broken aircraft certification process. In fact, all of these things contributed mightily to these tragedies. Unfortunately, every MAX airplane ever manufactured shares this same wretched history. The pilots are certainly not to blame. They did everything they could to save the lives of the people who trusted them. The triggering event for these crashes was a defective AOA Sensor part, and quite possibly, a malfunctioning electrical system stemming from a dangerously unstable production environment," he said." 

Pierson concludes: "We can either investigate these production problems and fix them, or we can wait for another disaster." 

* * * 

Read The Full Report Here: 737 MAX - Still Not Fixed

Tyler Durden Tue, 01/26/2021 - 19:45
Are EVs Good For The Environment? ...Mostly Not
  [Source: http://www.zerohedge.com/fullrss2.xml 2021/01/27-08:25]

Are EVs Good For The Environment? ...Mostly Not

Authored by Bruce Wilds via Advancing Time blog,

The idea Electric vehicles are less damaging to the environment has been broadly accepted by many people as fact. The notion EVs are good for the planet is a key factor for many of those deciding to buy an electric car. This debate has become rather political with a recent article in Barron's pointing out that some of the research damning electric cars has been funded by Saudi oil interest. Part of the argument flowing out of this centers on the idea that policies incentivizing electric-car production will lead to the creation of more carbon emissions during coming years than if we were to instead encourage the use of efficient gasoline engines.

EVs Still Charged By Electricity From Fossil Fuel

It is not surprising that people are going to try and shape conclusions and public opinion to serve their strategic interests. The direction society takes is a high-stakes game since the EU, Japan, Korea, and 110 other countries have pledged carbon neutrality by 2050. This is why countries such as China have extended $100 billion thus far in EV subsidies, the fact is China wants to make many of these vehicles. This is the main reason shares in Chinese EV manufacturers such as NIO and Xpeng have followed Tesla stock higher in recent months.

Adding to claims of agenda "propaganda" is the fact that a lengthy and detailed EV study by the Oak Ridge National Laboratory (ORNL), published in the scientific journal “Nature Communications,” was paid for by oil giant Saudi Aramco, which counts China as its largest customer. This indicates how little transparency exists around private companies’ financial or other involvement in the U.S. Department of Energy’s research. Some analysts say that Aramco’s role in producing the research is a potential conflict of interest and that the relationship between Aramco and ORNL highlights a broader concern about how some companies fund scientific research only to directly support their business interests. 

As this article is being written those ready to curse my take on this issue are gathering in the wings. On one side we have those that think EVs are the solution, on the other is an even larger group ready to scream about freedom of choice or how climate change is a hoax. To the first group, I say you are being deceived by those conveniently forgetting that most electricity is still generated by fossil fuel and that EVs also have a few other issues. To the second group, my message is, self-indulgent, self-centered, people with the attitude the world is their oyster and the hell with everyone else. Some of these people are not even open to the idea that what humans do here on earth has any effect at all on our climate.

Gas-guzzlers Are Often Used As Family Cars

As a strong environmentalist, I get tired of hearing that "EVs are good for the environment. "While my stand may rile those promoting EVs my attitude towards the four-door pickups driven by many average citizens angers and appalls many others. The fact is vehicle manufacturers maximize profits by prioritizing these big-ticket gas-guzzlers. These trucks are not used for work and should carry a heavy "poor mileage tax." All the high horsepower petroleum vehicles that fill our streets with engines able to get us from stoplight to stoplight in the blink of an eye and the huge low mile per gallon vehicles often occupied by one person are the bane of environmentalist.

As to whether EVs are as environmentally friendly as many people claim is a topic that is hotly debated. The chart near the top of this article screams that they are not. Electricity demand is still rising across the world, most nuclear plants getting very old, and the most ecologically friendly sources are running full out. This means the slack is being taken up by fossil-fuel generated plants. Under the idea of, last in first out, this would mean that almost all the juice being pumped into EVs comes from fossil-fuel generated juice. To make matters worse, other issues exist.

Below are a few comments, or parts of comments, about EVs that have been gathered from different recent articles. I have not fully researched all these but they do add to my doubts about these vehicles.

  • The Greenwashing Industrial Complex is one of the evilest and fraudulent scams of the 21st century. As an example, the pollution and environmental destruction created by the manufacturing and disposal of EV batteries, and also the magnets for power-generating windmills, is 10X worse than pollution created by fossil-fuel vehicles.

  • In Germany about 40% of the energy mix is produced by coal and 30% by renewables - a mid-sized electric car must be driven for 125,000 km, on average, to break even with a diesel car, and 60,000 km compared to a petrol car. It takes nine years for an electric car to be greener than a diesel car, assuming an annual average mileage of 13,500 km. Most consumers will have bought a new car by then. The case is similar in the U.S. but less pronounced in nuclear-powered France.

  • Battery production causes more environmental damage than carbon emissions alone. Consider dust, fumes, wastewater, and other environmental impacts from cobalt mining in the Democratic Republic of the Congo; water shortages and toxic spills from lithium mining in Latin America, which can alter ecosystems and hurt local communities; a heavily polluted river due to nickel mining in Russia; or air pollution in northeastern China, as mentioned above.

  • There isn't enough cobalt in the world to replace even half of the current ICE vehicles.  Never mind the fact they have kids mining the stuff in the Congo. InsideSources, says, every EV battery contains cobalt, with most of it mined in the Democratic Republic of Congo (DRC). This area has been an ugly mess for years as the Congo government and armed militants duke it out over the control of mines. Much of the DRC cobalt is then hauled to South Africa and shipped to China for processing.

Also flowing into the issue of " less damaging to the environment" is something recently brought to my attention, and that is, EVs tend to rapidly eat through tires. While many people may not think this is a big deal, it is. Since electric car batteries are heavier than petrol engines they need a more robust tire. Also, because of their accelerating faster from a standstill. If you want to take advantage of that without too much wear then you need a more robust tire, these cost more, and it has been said, you are lucky if you get 20,000 miles out of a set of tires. All this is addressed at, https://www.quora.com/Is-it-true-that-electric-cars-wear-out-tires-faster-than-fossil-fuel-cars

Pollution From Tires Is A Growing EV Issue

Like many people I had forgotten or brushed aside the thought something as simple and common as the tire was such a problem. This should have been high on my radar because years ago I was given a building simply because it had been filled with tires. The officials in my city were all over the owner to get rid of them. It cost me a bit of money and a lot of work to have them hauled away and properly recycled. With that in mind, below are a few of the many articles voicing pollution issues concerning tires.

Homeguides.sfgate.com claims; Toxins released from tire decomposition, incineration, or accidental fires can pollute the water, air, and soil. While 42 states regulate tire disposal to some degree, eight states have no restrictions on what you must do with your discarded tires. Even with laws in place, illegal dumping still occurs, presenting negative environmental impacts.

Tiretechnologyinternational.com states; Air pollution from tire wear particles can be 1,000 times worse than what comes out of a car’s exhaust, Emissions Analytics found harmful particle matter from tires is a serious environmental problem. What is even more frightening is that while exhaust emissions have been tightly regulated for many years, tire wear is not. With the increasing growth in sales of heavier SUVs and battery-powered electric cars, non-exhaust emissions are a growing problem.

And, www.politico.eu/article/tires, delves into how driving affects the environment in ways beyond the well-known pollutants spewing from tailpipes and leaking from engines. Tires shed tiny pieces of plastic as they wear down, accounting for about 10 percent of the microscopic pieces of the pollutant found in the sea, according to one estimate. Tire waste was addressed in the European Commission's Plastics Strategy earlier this year. The EU executive is looking into how to cut down on microplastics that may be coming from tires and is considering regulations.

With all the above in mind, the buzz in EV trading over the last couple of weeks has interestingly been surrounding legacy automakers like General Motors and, even Ford moving strongly in the direction of manufacturing more EVs. This may someday be seen as a huge environmental misstep. The best answer may be a shift to more efficient gasoline engines in smaller vehicles.  

Tyler Durden Tue, 01/26/2021 - 19:25
Germany Poised To Cut International Air Travel "To Almost Zero" On Virus Variant Fears
  [Source: http://www.zerohedge.com/fullrss2.xml 2021/01/27-08:05]

Germany Poised To Cut International Air Travel "To Almost Zero" On Virus Variant Fears

Alarmed over recently emerged strains of coronavirus which are said to be more infectious, Germany is mulling taking the drastic step of cutting all international air travel in and out of the country to "almost zero," according to the AFP.

Interior Minister Horst Seehofer announced Tuesday the government is now reviewing the implementation of further "drastic measures" amid restrictions in the country which took effect in November. He cited the example of Israel which recently went to a full-on 2nd lockdown of the entire country.

"The danger from the numerous virus mutations forces us to consider drastic measures," Seehofer said to the Bild newspaper. "That includes significantly stricter border checks, especially at the borders of high-risk areas, but also reducing air travel to Germany to almost zero, as Israel is currently doing," he added.

Via Shutterstock

"The people in Germany who accept the tough restrictions expect us to protect them as best we can from an explosion in infection numbers," Seehofer said.

Chancellor Angela Merkel appeared to back a plan that would effectively shut down all borders, saying in new comments the government will take "certain precautions at border," according to her address before a meeting of conservative CDU/CSU bloc lawmakers.

"Everyone understands that now is not the time to travel," she added. Currently Germany has had over two million COVID-19 infections and more than 52,000 deaths from the virus.

A week ago Merkel announced that renewed pandemic restrictions, especially the closure of schools and 'non-essential' stores and markets, would last until at least mid-February.

The proposal of shutting off borders altogether also comes as there's been widespread disappointment at the slowness of a vaccine rollout in Europe, also amid worrisome reports of severe adverse effects and even deaths among elderly patients reportedly from the shot, particularly out of Norway in the middle of this month amid the rollout of the Pfizer/BioNTech vaccine.

A ban on most or all international flights would have immediate and major repercussions for the aviation industry and global travel, given Germany remains a central international hub of flights across Europe but also the rest of the world, including to the Middle East and Africa.

Tyler Durden Tue, 01/26/2021 - 19:05