Individual Economists

Thursday: GDP, Unemployment Claims, Durable Goods, Bank Stress Tests

Calculated Risk -

• At 8:30 AM ET, The initial weekly unemployment claims report will be released.  The consensus is for a decrease to 390 thousand from 412 thousand last week.

• Also at 8:30 AM, Durable Goods Orders for May from the Census Bureau. The consensus is for a 3.0% increase in durable goods orders.

• Also at 8:30 AM, Gross Domestic Product, 1st quarter 2020 (Third estimate). The consensus is that real GDP increased 6.4% annualized in Q1, unchanged from the second estimate of a 6.4% increase.

• At 11:00 AM, the Kansas City Fed manufacturing survey for June. This is the last of regional manufacturing surveys for June.

• At 4:30 PM, Federal Reserve releases Results from 2021 Bank Stress Tests

GOP Sees CRT Battle As Potent Weapon In Midterms

Zero Hedge -

GOP Sees CRT Battle As Potent Weapon In Midterms

As viral videos continue to emerge of pissed off parents putting school boards in their place over Critical Race Theory (CRT) - which charges an entire demographic with a collective crime, uses it as grounds to frame individuals within that demographic as perpetrators of that crime, and then seeks to strip condemned individuals of rights, dignity and equal protection based on that charge (via @AurelianofRome) - Republican lawmakers see an opportunity heading into midterms.

In one blistering speech last week during a crowded district school board meeting in Illinois, parent Ty Smith, who is black, blasted CRT as an ideology that flies in the face of what Dr. Martin Luther King taught - instilling a fundamental tension and division between Americans.

"Critical Race Theory is pretty much going to be teaching kids to hate each other, how to dislike each other…," he said.

More recently, parents in Loudoun County, Virginia - now "ground zero" in the fight against CRT, called out the "wokest and worst school board in America" this week, leading to arrests.

Now, according to The Hill, "some Republican candidates — like Glenn Youngkin, the party’s nominee for governor in Virginia and a former chief executive of the Carlyle Group — are using their opposition to critical race theory to paint themselves as defenders of traditional American values and patriotism."

"Critical race theory is not an academic curriculum. It is a political agenda to divide people and actually put people into different buckets and then pit them against one another," said Youngkin in a recent Fox News appearance. "Critical race theory will not be in Virginia’s schools when I serve Virginians as the next governor."

Other Virginia Republicans are similarly jumping on the CRT bandwagon.

"A lot of parents have overheard their kids’ lessons during virtual school and they didn’t like what they heard. America has had to work through problems but is not a country full of racists, and we shouldn’t be teaching our kids that our nation is fundamentally racist," said state delegate Jason Miyares (R), a GOP nominee for attorney general. "We can’t survive as a nation if we are raising an entire generation of children to learn to hate their country."

Opponents of critical race theory have protested in several other Virginia school districts — Frederick County, Virginia Beach, Hanover County and Amherst County — all of which do not use the theory in their own curricula. 

Youngkin’s opponent, former Gov. Terry McAuliffe (D), has dismissed the debate as a political fabrication that is not on the top of voters’ minds

That’s another right-wing conspiracy,” McAuliffe said in audio apparently recorded by a tracker and reported by Fox News. “This is totally made up by Donald Trump and Glenn Youngkin. This is who they are. It’s a conspiracy theory.”  -The Hill

"Critical race theory is an absolute disaster for the Democrats," said Sen. Rick Scott (R-RL), Chair of the National Republican Senatorial Committee (NRSC). "Parents want their schools to teach what I got taught: Reading, writing and arithmetic."

Tyler Durden Wed, 06/23/2021 - 19:40

The "Great Reset" Is Here, Part 1: The New Blueprint For Worldwide Inflation

Zero Hedge -

The "Great Reset" Is Here, Part 1: The New Blueprint For Worldwide Inflation

Authored by James Rickards via,

For years, currency analysts (myself included) have looked for signs of an international monetary “reset” that would diminish the dollar’s role as the leading reserve currency and replace it with a substitute, which would be agreed upon at some Bretton Woods-style monetary conference.

Now, it looks like the move towards the long-expected Great Reset is accelerating.

At the recent G7 summit in the UK, G7 leaders gave their blessings to a $100 billion allocation of IMF special drawing rights (SDRs) to help lower-income countries address the COVID-19 crisis.

President Biden fully supports the idea. The White House issued the following statement:

The United States and our G7 partners are actively considering a global effort to multiply the impact of the proposed Special Drawing Rights (SDR) allocation to the countries most in need…

At potentially up to $100 billion in size, the proposed effort would further support health needs – including vaccinations…

A separate press release from the same day continued the same sentiment, stating, “We strongly support the effort to recycle SDRs to further support health needs.”

In another development, IMF Managing Director Kristalina Georgieva said last Wednesday that she expected the fund’s governors to approve a $650 billion allocation of SDRs in mid-August.

What exactly are SDRs?

Basically, they’re world money.

In 1969, the IMF created the SDR, possibly to serve as a source of liquidity and alternative to the dollar.

In 1971, the dollar did devalue relative to gold and other major currencies. SDRs were issued by the IMF from 1970 to 1981. None were issued after 1981 until 2009 during the global financial crisis.

The 2009 issuance was a case of the IMF “testing the plumbing” of the system to make sure it worked properly. Because zero SDRs were issued from 1981–2009, the IMF wanted to rehearse the governance, computational, and legal processes for issuing SDRs.

The purpose was partly to alleviate liquidity concerns at the time, but it was also to make sure the system works in case a large, new issuance was needed on short notice. The 2009 experiment showed the system worked fine.

Since 2009, the IMF has proceeded in slow steps to create a platform for massive new issuances of SDRs and establish a deep liquid pool of SDR-denominated assets.

On January 7, 2011, the IMF issued a master plan for replacing the dollar with SDRs.

This included creating an SDR bond market, SDR dealers, and ancillary facilities such as repos, derivatives, settlement and clearance channels, and the entire apparatus of a liquid bond market.

A liquid bond market is critical. U.S. Treasury bonds are among the world’s most liquid securities, which makes the dollar a legitimate reserve currency.

The IMF study recommended that the SDR bond market replicate the infrastructure of the U.S. Treasury market, with hedging, financing, settlement and clearance mechanisms substantially similar to those used to support trading in Treasury securities today.

In August 2016, the World Bank announced that it would issue SDR-denominated bonds to private purchasers. Industrial and Commercial Bank of China (ICBC), the largest bank in China, will be the lead underwriter on the deal.

In September 2016, the IMF included the Chinese yuan in the SDR basket, giving China a seat at the monetary table.

So, the framework has been created to expand the SDR’s scope.

The SDR can be issued in abundance to IMF members and used in the future for a select list of the most important transactions in the world, including balance-of-payments settlements, oil pricing, and the financial accounts of the world’s largest corporations, such as Exxon Mobil, Toyota, and Royal Dutch Shell.

The basic idea behind the SDR is that the global monetary system centered around the dollar is inherently unstable and needs to be reformed.

Part of the problem is due to a process called Triffin’s Dilemma, named after economist Robert Triffin. Triffin said that the issuer of a dominant reserve currency had to run trade deficits so that the rest of the world could have enough of the currency to buy goods from the issuer and expand world trade.

But, if you run deficits long enough, you would eventually go broke. This was said about the dollar in the early 1960s. The SDR would solve Triffin’s Dilemma.

I wrote about SDRs and the global elite plans for them in the second chapter of my 2016 book, The Road to Ruin.

Over the next several years, we will see the issuance of SDRs to transnational organizations, such as the U.N. and World Bank, for spending on climate change infrastructure and other elite pet projects outside the supervision of any democratically elected bodies.

I call this the New Blueprint for Worldwide Inflation.

But Triffin’s Dilemma is not the only dynamic that’s pushing the world away from the dollar.

In Part 2, we show you why the weaponization of the dollar by the U.S. government is pushing the world to seek alternatives.

Tyler Durden Wed, 06/23/2021 - 19:20

Fully Vaccinated Israelis May Be Forced To Quarantine After Exposure To "Delta" Variant

Zero Hedge -

Fully Vaccinated Israelis May Be Forced To Quarantine After Exposure To "Delta" Variant

As concerns about the threat posed by the "Delta" variant, a mutant strain of COVID-19 first discovered in India that's believed to be much more dangerous than rival strains, intensify, Israeli health officials have just been given the authority to quarantine pretty much anybody who is exposed to "Delta", even if the individual is already fully vaccinated, Reuters reports.

The heavy-handed decision comes after a warning by new Israeli Prime Minister Naftali Bennett on Tuesday over new outbreaks caused by "Delta" . Bennett complained that daily infections have been rising again in Israel after weeks of a low plateau credited to the country's record mass-vaccination drive.

Under the updated Health Ministry directive, vaccinated or formerly infected people can be ordered to self-isolate for up to 14 days if authorities suspect they may have passed in "close contact with a carrier of a dangerous virus variant."

This could include having been passengers on the same plane, the ministry said, a possible dampener on Israel's gradual opening of its borders to vaccinated summer tourists.

Addressing the Knesset (Israel's parliament), Health Minister Nitzan Horowitz said fines of "thousands of shekels" might be levied against Israeli citizens or residents who travel to countries blacklisted as high COVID-19 risks.

On June 16, the Health Ministry listed Argentina, Brazil, South Africa, India, Mexico and Russia as off-limits to Israeli citizens or residents unless they receive special permission.

Some 55% of Israel's 9.3MM population have received both doses of the Pfizer-BioNTech vaccine, and a steep drop in cases had prompted most economic restrictions to be lifted. But just days earlier, Israel announced plans to start vaccinating teenagers between the ages of 12 and 15.

Offering an example of how different countries are handling the potential threat posed by the "Delta" variant, analysts at Rabobank pointed out that the UK has a far larger presence of the Delta variant, but that hasn't stopped it from allowing everyone to travel internationally from August; and Thailand, where COVID variants are also spreading, is opening up to tourism starting July 1 (in Phuket) and nationally beginning in October.

Meanwhile, Israel, which became the first developed nation in the world to vaccinate its population using mostly Pfizer doses, has already reinstated its mask rules after briefly removing them last week.

Tyler Durden Wed, 06/23/2021 - 19:00

Industry Icon Seeing Housing "Hyperinflation"

Zero Hedge -

Industry Icon Seeing Housing "Hyperinflation"

It has been a week of staggering home prices increase news which has seen the median existing home price surge to a record $350,000...

... up a whopping 24% from a year ago...

... while today we learned that the median new home price surged 18%, also to a record $374,400 (the average selling price was also a record $430,600)...

... the result being a collapse in homebuyer sentiment...

... leading to a sharp slowdown in actual sale transactions, as the soaring prices start to adversely impact the broader market.

Remarkably summing up what's going on in the housing market, veteran housing analyst Ivy Zelman said she was seeing “hyperinflation” in the US housing "ecosystem" fraught with labor and materials bottlenecks.

Zelman’s warning comes as investors are closely watching whether a broad surge in inflation as the economy recovers from pandemic lockdowns will prove to be transitory. At least it validates one part of a recent Bank of America warning which said that the US is facing "hyperinflation" if transitory. Well we now have the hyperinflation part; for the sake of the dollar and cilivization, one can only hope that BofA is also right about the transitory part.

Speaking in a Wednesday webcast with Walker & Dunlop Chief Executive Officer Willy Walker, CEO of real estate research firm Zelman & Associates cited a truck-driver shortage along with shipping constraints and soaring costs as among the biggest problems homebuilders are facing. She underscored difficulty in moving shingles from Canada to the U.S. in particular, along with kinks in the supply chain for other staple building materials including drywall and insulation.

And, confirming the sudden drop in new transactions, Zelman also warned that home buyers are stretched.

"At some point the consumer cries uncle," she said, quoted by Bloomberg.

She also warned that surging prices today could lead to tumbling prices tomorrow, cautioning about the impact of higher interest rates on home prices and the prospects the Fed may start to taper asset purchases. While more supply is set to come on the market eventually, Zelman sees homebuilder stocks as expensive, and she envisions a tough second half. Her cautious stance would accelerate if rates were to rise.

Perhaps in response to her warning, or today's huge miss in new home sales, homebuilder stocks fell with the S&P homebuilding index closing down 1.2% on Wednesday after paring a drop of as much as 2.5%. Lennar Corp., M/I Homes Inc., PulteGroup Inc. and D.R. Horton Inc. were among worst performers. The index has dropped more than 13% from its all-time high in May.

Zelman's "hyperinflation" warning echoes a recent analysis from Bank of America in which the bank's chief economist Michelle Meyer said that the US economy "is facing an imbalance: a burst in demand has been met with constrained supply. Economics 101 tells us that when the demand curve shifts more than the supply curve, prices will rise, which continues until the balance is restored from a combination of slowing demand and greater supply."

This narrative, Meyer said, describes the US housing market. Demand for housing climbed higher in the months following the onset of the pandemic, leaving existing home sales to reach a peak of 6.7 million saar in October, the highest since 2006. This has left builders to scramble to respond, sending building permits to a high of 1.9 million saar in January. The result: home prices and building costs have surged higher.

And while prices are soaring, the long journey to restore the equilibrium has at least started as existing home sales have come off the highs and housing starts have increased. For what it's worth, Bank of America thinks existing home sales will continue to moderate while starts run at a high 1.6 million pace through this year and next until supply has returned to the historical average between 5-6 months, eventually allowing home price appreciation to cool. But, as Meye warns, "this will not be resolved overnight – it will be a long journey to balance the housing market."

So yes, hyperinflation now... and utopia at some indefinite point in the future.

For those curious, BofA has summarized the recent housing trends in charts covering four key themes:

  • Signs from the recent data: Mortgage purchase applications and existing homes sales have been declining this year and are expected to slip further. In contrast, we see upside for new home sales and housing starts but with speed bumps due to high costs.
  • Surveys show discouraged buyers: As shown above, buyer sentiment has fallen to the lowest since 1982, reportedly due to high prices. But yet paradoxically homebuilder sentiment is holding close to record highs given exceptionally low inventory. This can only end in tears.
  • Builders are facing incredible cost pressure: All else equal, the rise in the price in lumber and related products has added over $34K to the price of a new home over the past year. The sharp gains in builder costs are starting to hold back production.
  • Double-digit home price gains are not sustainable: Home prices have soared over the year. The trajectory is unsustainable and price appreciation should cool next year but only slowly given the extreme imbalance between supply and demand

The latest data on the housing market

  • After roaring higher last year, mortgage purchase applications have seen a pullback suggesting a cooling off in housing demand. The 4-week moving average is nearly back to the pre-COVID highs.
  • Mortgage rates have risen this year with the 30yr fixed rate reaching as high as 3.3% in mid-March from a low of 2.8% in February before settling at its recent level of 3.1%. The timing of the rates move coincides with the drop in purchase applications.
  • Looking ahead, most rates strategists expect interest rates to move higher with the 10yr Treasury benchmark rising to 2.15% by 1Q22 from its current level around 1.6%. Higher rates will therefore remain a headwind going forward.

  • Existing home sales showed a similar trajectory as mortgage applications: running currently at 5.80mm saar which is down from the peak last fall but still up from 5.66mn in 2020.
  • The trajectory of new home sales has also cooled, but the data have seen more of a plateau than a pullback with new home sales of 863k saar in April. Through the first four months of 2021, new home sales are averaging 907k saar, which is well above 2020 sales of 828k.
  • Looking ahead, the risks are for existing home sales to head even lower due to the combination of declining affordability and tight inventories. Meanwhile, new home sales may grind higher as these supply challenges funnel demand towards new construction.

  • Housing starts slid by 9.5% mom in April to 1.57mn saar, although few consider this the start of a downturn. Building permits have remained elevated at 1.73mn saar suggesting robust underlying demand for new residential construction.
  • The components of building permits are also promising. Single family permits have been bouncing between 1.1-1.2mn saar and historically run close together with single family starts. Meanwhile, the noisier multifamily sector has been running just under 600k.
  • Housing starts are expected to remain at an elevated trend and grind higher, much like new home sales, totaling 1.6mn in 2021 versus 1.4mn in 2020.

What do the surveys say?

  • Given the demand-supply imbalance in housing, it has become a seller’s market. According to the University of Michigan consumer sentiment survey, the share of those believing it is a good time to sell has soared to a record high 80% while the share of those believing it is a good time to buy has dropped to 46%, the lowest since 1982.
  • Buyers have recently been pressured by dwindling affordability, reflecting a combination of higher prices and rising, albeit still low, interest rates. The share of those believing it was a good time to buy due to low prices dropped to a mere 7% in May, while those believing it is a good time due to low interest rates have moderated to 29%. The latter is still the primary buying reason.

  • The Fannie Mae National Housing Survey provides additional evidence that it has become a seller’s market. The net share of respondents who believe it is a good time to buy has dropped to -1% as of April, which is the lowest since the series goes back to 2010.
  • Conversely, the net share who think it is a good time to sell has rebounded to 41%. This compares to the historical high of 47% achieved in 2018.
  • The shifts in sentiment around market conditions supports our view that the trend is lower for existing home sales as the market needs to rebalance

  • The run up in home prices is partly a function of strong demand but also historically tight housing supply, which has been a decade in the making. In order to ease these price pressures, there is a strong need to build.
  • The NAHB housing index, a measure of homebuilder sentiment, reached a record high of 90 in November and has cooled to a robust 83 as of the past two months. Given the need for housing supply, homebuilders are feeling quite optimistic about the outlook.
  • The strength in homebuilder sentiment underpins our outlook for additional upside in housing starts and new home sales.

Rising Costs and Prices

  • While there are clear supply challenges in housing inventories, builders are also facing their own supply constraints, creasing challenges for new construction.
  • One of the major constraints is soaring lumber prices. Looking at the first expiring contract for lumber futures, prices soared to a peak of $1,686/1000 board feet in early May before cooling off below $1,400 more recently, which is multiples higher than the $400 pre-pandemic trend.
  • According to the NAHB, “the escalating lumber prices are largely due to insufficient domestic production and extremely large lumber mill curtailments that lasted well into the 2020 building season.”

  • Given the rapid rise in lumber prices, the total cost of lumber and manufactured lumber products for an average single family home has soared 184% from April 2020 to April 2021, rising to $48,316. Put another way, the rise in lumber has added $35,872 more to the price of a new home. This is according to an NAHB analysis using Random Lengths data.
  • The lumber costs for an average multifamily unit have spiked as well to $17,220, reflecting a $12,966 or 190% increase. The NAHB estimates that the rise in multifamily costs equate to a $119 per month increase in rents.
  • The NAHB notes that other costs have contributed to higher home prices including interest, brokers’ fees, and margins required to attract capital and get loans underwritten.

  • The rising cost of construction and therefore new home prices is evident when looking at the distribution of sales by price point. Builders are concentrating construction in the higher priced homes where the high costs can be more easily absorbed.
  • The share of homes sold over $500k rose to 26% in April, which is the highest since the data go back to 2002, from a 2019 average of 18%. In addition, the share of homes sold between $300-500k has risen to 47% from 39% over the same period.
  • Conversely, the share of homes sold below $300k reached a historic low of 27%, dropping from a 2019 average of 44%.

The path to normalize

  • The biggest challenge confronting the housing market is the lack of supply. Months supply of both new 1-family and total existing homes has dropped to historically low levels of 4.4 months and 2.4 months, respectively.
  • Prior to the pandemic, demand in the new home market was more balanced around 5-6 months. That said, this stat doesn’t tell the whole story as builders primarily targeted the upper-end of the price spectrum during the last business cycle. On the aggregate, the last decade was a period of underbuilding.
  • This put pressure on the existing home stock, with months supply generally trending lower and reaching historically tight levels of around 3 months even before COVID-19.

  • The supply/demand imbalance has contributed to a rapid rise in home prices, with home price appreciation (HPA) reaching 13.2% yoy in March according to the S&P CoreLogic Case-Shiller index.
  • The current trajectory is likely unsustainable as higher prices weigh on affordability and therefore housing demand. We also expect housing starts to drive up inventory. We look for HPA to end this year at 12% yoy and next year at a still-elevated 6% yoy. Looking ahead, home price appreciation should set back to a lower trend, more consistent with the growth in income.

  • Reflecting the pressure from home price gains, we expect the NAR affordability index to slide this year. The boosts to household income from recent stimulus have provided a positive offset to affordability over the past year as home prices have surged, but will no longer be a factor.
  • Higher rates will be an additional headwind to affordability. As discussed earlier, our rates strategy team expects the 10y Treasury benchmark to reach 2.15% by 1Q 2022, which suggests roughly a 55bp increase.
  • The decline in affordability should lead to a moderation in existing home sales.

Tyler Durden Wed, 06/23/2021 - 18:40

Apple Daily Closes, Becoming First Casualty Of New Hong Kong Security Law

Zero Hedge -

Apple Daily Closes, Becoming First Casualty Of New Hong Kong Security Law

Arrests continued at Hong Kong's Apple Daily on Wednesday as authorities arrested a columnist, prompting the paper to announce that it will cease publication and close immediately, an outcome that many had already taken as a foregone conclusion.

The FT reports that the pro-democracy tabloid, owned by incarcerated media tycoon Jimmy Lai, will close because its assets have  been frozen and many of its staff arrested, making it impossible for the paper to continue publishing. The paper's owner, Lai, is facing charges of violating the new Beijing-imposed national security law. He has remained in custody even as the US and UK have protested that they are "deeply concerned" about his condition.

A final edition of Apple Daily will be printed Thursday. Apple owner Next Digital said that it had expedited the closure of the paper because of concerns for its workers' safety (it was initially supposed to shut down on Saturday following a recent raid on the paper's newsroom and the freezing of its assets).

The paper became one of Beijing's No. 1 targets in Hong Kong during the latest round of anti-democracy protests, which exploded in 2019 just months before a mysterious new virus suddenly appeared in Wuhan, just miles from a lab where the virus and other familial strains were being studied.

Apple has a long history of criticizing the government in Hong Kong, which wasn't as much of a problem when Beijing was still respecting HK's Democratic freedoms. But over the last six or seven years - roughly since the "Umbrella" protests of 2014 - Beijing has grown impatient, and has sought to silence critics of the CCP in the special administrative region.

Hong Kong police raided the newsroom and arrested some of the paper's executives last week (the five arrested included Ryan Law, the paper's editor-in-chief). On Wednesday, they arrested an editorial writer for the paper who uses the pen name Li Ping. Chinese authorities have accused the paper of "colluding with foreign forces" by publishing calls for sanctions against Hong Kong in the wake of the 2019 movement.

Police went so far as to declare the paper's newsroom a "crime scene", barring workers from entering, in the first case of the new national security law being used against journalists.

The closure is just the latest reminder that Hong Kong's days as a beacon of press freedom in Asia are over.

"In the past, definitely Hong Kong was the regional hub for media because it was so easily to publish here and the rankings for press freedom were very high," said Rose Luqiu, an assistant professor at Hong Kong Baptist University’s journalism department and a former journalist. "[But] there is evidence of a paradigm shift from a libertarian media system to an authoritarian media system."

Some experts in the area were shocked by the crackdown, saying they didn't expect journalists to be arrested (though some did expect the paper would be forced to close).

Tyler Durden Wed, 06/23/2021 - 18:20

Critical Race Theory May Violate Civil Rights Act, The Constitution: Dr. Carol Swain

Zero Hedge -

Critical Race Theory May Violate Civil Rights Act, The Constitution: Dr. Carol Swain

Authored by Ella Kietlinska via The Epoch Times,

Critical Race Theory training, which pressures people not to say certain things, take a certain stance, or forces them into some segregated settings, may infringe on people’s constitutional rights and even violate civil rights laws, said Dr. Carol Swain, a former professor of political science and law at Princeton and Vanderbilt universities.

The main tenet of Critical Race Theory (CRT) is that the people of the world are divided into oppressors and oppressed, and in the United States, “all white people are considered oppressors who benefit from undeserved advantages,” Swain told The Epoch Times in an interview on EpochTV’s “Crossroads” program.

“[Whites] are deemed guilty of having set up a system of systemic racism,” she said of one main assumption being drawn from CRT.

“The demonization of one group of people because of the color of their skin is something that is discriminatory.”

A lot of white people who are forced into CRT-based training, and forced to confess to being racist because of their race, do not realize that they are protected by the Civil Rights Act of 1964 that prohibits discrimination on the basis of race, color, national origin, religion, and disability, explained the retired professor.

White people are protected in the same way that black people are by civil rights laws, she said.

“We’re not a country where it’s acceptable to bully and shame people because of the color of their skin.”

Such acts create a hostile environment at work or may cause psychological harm to children at school, the award-winning author explained, adding that parents have reported depression, trauma, or other problems in their children who had been told that, because of their whiteness or the fact that their ancestors inflicted harm, they are also guilty of oppression.

Moreover, the Equal Protection Clause of the 14th Amendment of the United States Constitution guarantees certain protections to all people, even non-citizens.

If a public institution such as a school tries to restrict people’s speech or behavior, it may be also a First Amendment violation, Swain said.

Private schools have more freedom to discriminate than public ones, but students whose rights are infringed can use other bases, such as the student handbook that guarantees students certain rights, to fight discrimination, she added.

Swain suggested that students facing discrimination can also seek help from organizations defending students’ or individuals’ freedom of speech, association, and religious liberty, such as The Foundation for Individual Rights in Education (FIRE) or the Christian Legal Society.

Another way to counter discrimination at schools is publicity, the professor advised. Students can write articles about discrimination cases and publish them in student media like The College Fix or Campus Reform as there have been cases of universities backing down due to the public outcry over the reports of unfair treatment, according to Swain.

She also recommended that students “always document things that are discriminatory and use that evidence when the time is right.”

History of Race Relations

 “I think America has been so important to the world, that the true history of its founding, as well as the mistakes that were made and just how we address those mistakes, are things that enrich people. And it is something that should not be hidden, and certainly not something that would be a cause of shame,” Swain told Crossroads.

“The true story of America is a story of blacks and whites working together to overcome that tragic part of our history.”

During the period following the end of slavery, “it was white philanthropy that set up schools across the South, that set up those historically black colleges and universities, and trillions of dollars have been donated since the end of slavery to try to address the past and present effects of slavery,” explained the co-chairwoman for former President Donald Trump’s 1776 Commission.

Johnny Taylor, Jr. speaks after President Donald Trump announced him as the Chairman of the President’s Board of Advisors on Historically Black Colleges and Universities in the Roosevelt Room of the White House in Washington on Feb. 27, 2018. (Samira Bouaou/The Epoch Times)

The civil rights movement itself is a moment in history where whites, blacks, people of other races and ethnicities came together for a cause. “That was powerful,” she continued.

Swain was born during the time of “systemic racism” in the segregated South. She witnessed the collapse of institutional racism and benefited from the opportunities created for black Americans like herself.

“My love of country came about because when I was in school, we were taught civics and patriotism. And I felt like I lived in the greatest nation in the world,” Swain said.

Racism was dying in the United States before President Barack Obama was elected, she said. At that time, the country was portrayed by legacy media as being a post-racial society. “I think that because we were making so much progress, the political left and those that benefit by racism and keeping us divided … they had to act.”

This was the time when the racial tensions, which divided people, restarted and when standards in classes, especially in public schools, were lowered owing to CRT and the restorative justice agenda being pushed, she added.

Opportunities for black people have never been better than today and ultimately, success depends on a person’s attitude, she said.

Swain shared that as one of 12 children, she had dropped out of high school, married at 16, and had three small children by the time she was 21. Despite that, she went back to school, got a high school equivalency, and went to a community college where she got the first of her degrees.

She pointed out that she was able to achieve success and overcome the circumstances of her birth because she believed that hard work mattered and applied herself as such.

“I did not see myself as handicapped because I was black, poor, a woman,” the professor said. “I took advantage of what America offered.”

Among today’s youth, minorities are being “crippled in their minds because they’ve been told by the political left what they can’t do and they are being handicapped,” she warned.

“They’re not even being held to the same standards that people of my generation were held to at colleges and universities. And as a consequence, they do feel inferior. A lot of what is crippling them is what they have been indoctrinated with.”

In her view, the racism coming from the political left is a forced re-segregation, and the lowered standards being pushed out for racial, ethnic minorities are impeding the development of their fullest potential.

Racism Serves Political, Financial Interests

Inciting racism serves the political interests of the Democrats who use the CRT to sow divisions between races in order to secure the black votes that they need to maintain their power, Swain said.

Protesters march to the state Capitol in Baton Rouge, La., Sunday, July 10, 2016. People are protesting the shooting death of a black man, Alton Sterling, by two white police officers at a convenience store parking lot last week. (Scott Clause/The Daily Advertiser via AP)

Any time some progress is made with race relations, an incident is found “to play up in the media to get Americans all worked up and divided by race. And it’s very easy to do because there’s always something happening somewhere,” she added.

She pointed to the many incidents like police shootings that have been played up by the media, acting to inflame people’s emotions and distract the public “during a time when there’s something in the news that is not favorable to the progressive agenda.”

It makes black people keep feeling like there is so much racism and blames Republicans or white people for being guilty of this racism, Swain continued.

“They are creating a very dangerous situation in this country because they’re demonizing all white people, including themselves and their own children,” she said, adding that hatred, once unleashed, cannot be easily “put back in the box.”

Black Lives Matter (BLM), an openly Marxist organization, was able to capitalize on the public’s reaction to George Floyd’s death and raise millions of dollars for progressive black causes, Swain said. People around the world who care about black people were shocked by the video of Floyd’s death, which was played over and over again in the news and many then donated money to the organization because they believed in the slogan “Black Lives Matter.”

“Black lives do matter, all lives matter,” she said. But “that money did not go into black communities. It didn’t change black lives.”

The Epoch Times has reached out to Black Lives Matter for comment.

Swain went on to encourage Americans to counter the negative impact of CRT by becoming informed about CRT and “where it comes from, and how it operates, and how it’s contrary to the Constitution, and the Equal Protection Clause and civil rights laws.”

“If people become equipped by knowledge and have the courage to stand up on principle, to fight for principles they believe in, there’s no way that this radical agenda can take down our nation,” she said.

“You should know the truth and the truth shall make you free,” Swain said, citing the Bible.

If people, however, allow CRT to advance through the nation’s institutions of power and reshape the way the society functions, then state-sanctioned discrimination will soon be instituted by the U.S. government—by the highest echelons of power—weakening and destroying the nation from within, she warned.

“The remedy is the American people standing on principles, standing on values, standing on their history, and being courageous enough to fight back,” said Swain.

Tyler Durden Wed, 06/23/2021 - 18:00

China Denounces US Navy Warship Transiting Taiwan Strait  

Zero Hedge -

China Denounces US Navy Warship Transiting Taiwan Strait  

China called the U.S. Navy's latest sail of a warship through the Taiwan Strait the region's most significant security "risk creator." The narrow waterway that separates Taiwan from China is a highly contested region. 

The U.S. Pacific Fleet said Tuesday the Arleigh Burke-class guided-missile destroyer USS Curtis Wilbur "conducted a routine Taiwan Strait transit June 22 (local time) through international waters in accordance with international law."

"The ship's transit through the Taiwan Strait demonstrates the U.S. commitment to a free and open Indo-Pacific," the U.S. 7th Fleet Public Affairs added. 

However, the warship's transit was not well received by China. The People's Liberation Army's Eastern Theatre Command said it closely monitored the vessel as it sailed through the strait. 

"The U.S. side is intentionally playing the same old tricks and creating trouble and disrupting things in the Taiwan Strait," said PLA Eastern Theater Command. This "fully shows that the United States is the greatest creator of risks for regional security, and we are resolutely opposed to this."

The transit comes after 28 warplanes breached Taiwan's air defense identification zone last week, the largest reported incursion to date.

Elsewhere in the Asia Pacific, as the great power competition between China and the U.S. continues to excite geopolitical watchers, the Ronald Reagan Carrier Strike Group entered the South China Sea, a heavily contested body of water, last week. 

Here is U.S. Navy's latest positioning worldwide via Stratfor. 

Notably, in a seemingly unrelated event, Russia is conducting one of its largest Pacific military drills since the end of the Cold War, a few hundred miles off Hawaii's coast. At least 20 warships, submarines, fighter jets, and long-range bombers simulated sinking an aircraft carrier. 

The Indo-Pacific region is an area to monitor as global superpowers conduct transits, drills, and stake their claim in highly disputed waters. 

Tyler Durden Wed, 06/23/2021 - 17:40

Journalists Hit New Low By Betraying Source

Zero Hedge -

Journalists Hit New Low By Betraying Source

Authored by J Peder Zane via,

The New York Times has decided it is fine to out a confidential source -- provided his name is Tucker Carlson. Its media columnist, Ben Smith, reports that the Fox News star is “the go-to guy for sometimes-unflattering stories about Donald J. Trump and for coverage of the internal politics of Fox News (not to mention stories about Mr. Carlson himself).”

Breaking a cardinal rule of journalistic ethics, Smith identifies Carlson as one of his own “off-the-record” sources. So, too, did “16 other journalists … [who] told me on background that he has been, as three of them put it, ‘a great source.’”

Betraying no self-awareness of his cynicism, Smith underscores the transgressive nature of these disclosures by noting that none of the 16 work at the Times because “it would put my colleagues in a weird position if I asked them” to betray a source. Translation: He’s happy to have his competitors violate sacred rules.

The one offender Smith does name is Brian Stelter, the host of CNN’s “Reliable Sources” (and Times alumnus) who routinely casts himself as the conscience of journalism, who told him “you can see Tucker’s fingerprints all over” his anti-Fox book, “Hoax.”

Given the left’s hatred of Carlson – who is their current Bogeyman No. 2, after Donald Trump – and its habit of reporting fake news, Smith’s article could be a smear aimed at stirring up conflict on the right and problems for Carlson with his employer. That thought would not have occurred to me even five years ago, but that’s where we are.

If Carlson does dish dirt off the record, Smith’s piece is a yet another new low for our increasingly partisan press. As my RealClearInvestigations colleague Tom Kuntz observed, “Protecting confidential sources is, of course, one of the bedrocks of journalism. The free flow of information depends on people being able to share hard truths without jeopardizing their careers or lives.”

It is why journalists have gone to jail to protect their sources. Outing Carlson sends the message that trust is dead in American journalism. No source is safe if reporters decide they don’t like or agree with them. Today it’s the Fox News anchor, tomorrow it’s the whistleblower who uncovered malfeasance in the Biden administration.

Still, the protection of confidentiality is not ironclad. All bets are off when a source lies. For example, false disclosures from dishonest anonymous sources were a prime driver of the bogus Trump/Russia scandal that dominated the news for several years. Smith’s paper was a prime dumping ground of misinformation, as was the publication he edited before coming to the Times, BuzzFeed, publisher of the now-infamous and largely fabricated Steele dossier. Smith also oversaw the seminal but deeply misleading BuzzFeed work of Ali Watkins (now also at the Times) that commenced the years-long media smearing of former Trump campaign adviser Carter Page.

Kuntz argues, “When sources engage in gross deception on a matter of such import, even committing national security crimes in the process, the news media involved should honor their higher duty – to their readers or viewers – to expose the malfeasance and correct the record.”

Even as the Times outs Carlson – who is not accused of misleading anyone – it continues to protect those who perpetrated devastating frauds upon the nation. That silence is a scandal; instead of honoring trust, it betrays it. If Smith truly cares about the fate of American journalism, he should insist that his editors identify the anonymous sources of their many debunked stories during the Trump years:

The paper could start by unmasking the unnamed “law enforcement” source who told the paper that Capitol Hill police officer Brian Sicknick had died after “pro-Trump rioters … struck him in the head with a fire extinguisher.” Although this claim was cited by Democrats as grounds for impeachment, it was apparently invented. And what about the anonymous sources who told the Times and other news outlets that former New York City mayor and Trump confidant Rudy Giuliani had received “a formal warning” about potential Russian disinformation. The Times issued a correction to this whopper, but never said where the disinformation came from. Likewise, Times readers still don’t know the identity of the source who maintained – anonymously, of course -- that the 2016 Trump campaign had “repeated contacts” with Russian intelligence agents, a claim Robert Mueller could find no evidence to support.

Although the Times never named any of these sources, something tells me it wasn’t Tucker Carlson.

Tyler Durden Wed, 06/23/2021 - 17:20

Biden's 'Gun Grabbing' ATF Nominee David Chipman Confirmation Set To Advance Despite Missing Personnel File Controversy

Zero Hedge -

Biden's 'Gun Grabbing' ATF Nominee David Chipman Confirmation Set To Advance Despite Missing Personnel File Controversy

Authored by Emily Miller via Emily Post News (emphasis ours),

Gun-control advocate David Chipman is on track to be confirmed as ATF director, even though his government personnel record is hidden from the public. Senate Judiciary Committee Democrats are expected to vote Thursday to move Pres. Joe Biden’s nominee to the floor. Opponents to Chipman’s confirmation say the process cannot keep moving forward without getting his personnel files from the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).  

The key files would confirm Chipman’s denial that he lost control of his duty weapon and that the substance of the EEO discrimination complaints against him were unfounded. He said all allegations are false. Chipman worked at the ATF from June 1988 to May 2012. Since then, he’s worked for anti gun groups run by Mike Bloomberg and Gabby Giffords. 

This David Chipman photo is from an ad paid for by Mike Bloomberg

We last saw Chipman during his nomination hearing on May 26. Click here to read my story on Chipman being forced to admit on the record that he believes AR-15 style rifles should be confiscated from Americans and his other radical ideas.  The Democrats cleverly put Chipman in a hearing with several other nominees in order to limit the time he could be questioned on video.  

During the weeks that have passed, Republican senators have sent follow-up questions for Chipman to respond in writing. The questions and lack of answers are disturbing about what the senators seem to know but need proof.

Government personnel files don’t disappear. The newer federal government personnel records are electronic. The older, paper ones are in the National Archives and can easily be retrieved by request. Those are then scanned and put into the electronic system.


Mark Oliva is Director of Public Affairs for the National Shooting Sports Foundation (NSSF), which represents the firearms manufacturers and licensed gun dealers who deal with ATF every day. “Chipman has the opportunity to be completely open and honest with the American public by releasing his personnel file to the Senate Judiciary Committee but has chosen not to,” Oliva told me on Tuesday.

“This is demonstrative of his unwillingness to be truthful and falls far short of the level of trust required of the position of public trust to which is is nominated,” added Oliva on behalf of the NSSF. “He is unqualified and unworthy of this position of authority to lead a law enforcement and regulatory body.”

Sen. Ted Cruz questions Chipman

There must be a reason that ATF has not turned over all the files to the Senate. That’s what Sen. Ted Cruz (R-TX) wanted to know when he sent written follow-up questions to Chipman. 

CRUZ:  Are you willing to make your full personnel file from your time at ATF available to the Committee? 

CHIPMAN: My ATF personnel file is under the control of the federal government. As a nominee and private citizen, I have submitted more than 2,000 pages of responsive public and private records to the Committee. If I am confirmed, I will continue to be responsive and transparent with the Committee to the best of my ability, consistent with Department policies and practices. 

You can see that Chipman sidesteps answering whether he would make public his personnel file if he is confirmed. What is the secret?

Cruz also got Chipman on the record about the key allegations. The Texas Republican first focused on the allegation of a missing gun.

CRUZ: While you were at ATF, did you ever lose, misplace, or have your service weapon stolen? If so, please explain the circumstances, the results of any pending investigation(s), whether the firearm or firearms were ever recovered, and any disciplinary action taken. 


CRUZ:  While you were at ATF, were you ever the subject of any disciplinary actions? If so, please explain. 


This next line of questioning is about the employment discrimination complaints against Chipman that have not been seen by senators.

CRUZ: While you were at ATF, were you ever the subject of any EEOC complaints? If so, please explain. 

CHIPMAN: During my 15 years as a manager at ATF, I received two EEO complaints. Both complaints were resolved without any finding of discrimination and no disciplinary action was taken against me. 

CRUZ:  While you were at ATF, were you ever the recipient of any formal or informal counseling as the result of allegations of inappropriate or unlawful behavior? 


If Chipman is telling the truth under oath that the EEO complaints against him were without merit and showed no discrimination, why doesn’t he want the public to see them? One would assume his accusers’ names would be redacted, so if the only reason is that the false complaints would unfairly make him look bad, then the records can be sealed for only senators to view.

Chipman is at his Senate confirmation hearing

Sen. Tom Cotton (R-Arkansas) broadly asked Chipman about hate crimes, which is likely connected to the allegations in the EEO complaints.

To read Chipman's exchange with Tom Cotton and Sen. Mike Lee, click here and subscribe.

Tyler Durden Wed, 06/23/2021 - 17:00

The COVID Lockdowns Showed Us How Dangerous Social Engineers Have Become

Zero Hedge -

The COVID Lockdowns Showed Us How Dangerous Social Engineers Have Become

Authored by Birsen Filip via The Mises Institute,

Since the onset of the covid-19 pandemic, governments around the world, along with a handful of unelected medical experts, have been behaving as though they are the social engineers of totalitarian regimes (e.g., fascism, Nazism, and communism).

To be more precise, this select group of political leaders and medical experts have upended economies, as well as the lives of billions of ordinary people, by implementing extremely coercive and restrictive lockdowns and physical distancing measures for the stated purpose of bringing the pandemic under control and preventing future outbreaks.

Specific measures have included curfews; police patrols on the streets; the compulsory closure of businesses deemed nonessential, as well as workplaces, schools, and institutions of higher education; the banning of social gatherings; the cancelation of sporting and cultural events; the suspension of religious services; and restrictions on personal movement and interactions at the local, national, and international levels. In many parts of the world, people have been subjected to mandatory stay-at-home orders, requiring them to spend most of the day confined and isolated in their homes.

Lockdown measures have also been used to prohibit people from engaging in public protests and freely expressing their opinions, as failure to comply with limits on social gatherings has led to people being arrested, detained, and fined. It has also not been uncommon to see excessive police force being used to enforce lockdowns and curfews, and to disperse protests against unreasonable restrictions. Some governments have also set up detention centers for international travelers entering into their countries, where they are forced to quarantine at their own expense while they wait for the results of their covid-19 tests. Shockingly, in early June 2021, the provincial government in Ontario, Canada, went so far as to announce that residents in long-term care homes would soon be permitted to engage in “close physical contact, including handholding” and “brief hugs” with visitors when both parties are fully immunized.

Unfortunately, instead of criticizing this state of affairs, the mainstream media and major social media platforms are fully on board. They have turned out to be willing collaborators of the governments in these matters by glorifying their oppressive and punitive measures, censuring critical viewpoints, and fostering a culture of surveillance, all while spreading fear. They have also been ceaselessly promoting the injection of experimental vaccines as the only solution that will bring totalitarian lockdown measures to an end.

If Karl Popper and Friedrich Hayek had witnessed the type of central planning that has taken place since the beginning of the pandemic, they would have called it “holistic social engineering.” They were convinced that supporters of the concept of a social engineer sought to extend “the power of the State” in controlling and reshaping society as a whole in accordance with their own ideals, goals, and wills. According to Popper, social engineers believe that they can diagnose the goals and needs of society, and then implement a strategy to achieve them through large-scale planning. However, such an undertaking would require social engineers to centrally coordinate the activities of millions of people by replacing the wills and ends of those individuals with their own. Meanwhile, Hayek stated that the best way to make everybody serve the ends of the social engineers is

to make everybody believe in those ends. To make a totalitarian system function efficiently it is not enough that everybody should be forced to work for the same ends. It is essential that the people should come to regard them as their own ends. Although the beliefs must be chosen for the people and imposed upon them, they must become their beliefs, a generally accepted creed which makes the individuals as far as possible act spontaneously in the way the planner wants. If the feeling of oppression in totalitarian countries is in general much less acute than most people in liberal countries imagine, this is because the totalitarian governments succeed to a high degree in making people think as they want them to.

Social engineers of the pandemic have been largely successful in convincing the masses that the oppressive lockdown measures that they are being forced to endure are ultimately in the best interests of society as a whole. In many instances, they have managed to make many people believe that the goals of the lockdowns are in fact their own goals. At the same time, social engineers have been discouraging “criticism,” as they do not “easily hear of complaints concerning the measures” that they have instituted. Accordingly, the critical views put forth by some journalists, activists, dissenters, legal experts, medical professionals, and anybody else who cares about freedom, human rights violations, and the common good have been systematically silenced. Popper explained that the social engineer:

will have to be deaf to many complaints; in fact, it will be part of his business to suppress unreasonable objections. (He will say, like Lenin, “You can’t make an omelette without breaking eggs.”) But with it, he must invariably suppress reasonable criticism also.

After nearly a year and a half of antiliberal, undemocratic, unethical, antiscientific, ahistorical, and oppressive governmental measures, while denying billions of people their basic human rights, freedom, and sovereignty, social and economic life has essentially been completely crippled in many countries and regions. Nonetheless, social engineers of the pandemic period have treated critics and complaints as “a blemish,” proof of irrationality, and violations of the common good.

Hayek and Popper incessantly warned about the form of central planning that we are currently being subjected to, which has been used by numerous dictators and tyrants such as Hitler, Stalin, and Pol Pot. They specifically argued that it would not only lead societies down “the road to serfdom,” but also cause irreversible, large-scale social and economic damage. In fact, since the lockdowns began, general freedom (e.g., freedom of speech, freedom of expression, freedom of religion, freedom of assembly, freedom of the press, and intellectual freedom), negative freedom (i.e., freedom from coercion), positive freedom (i.e., freedom of self-development), subjective freedom (i.e., freedom to act based on one’s own will and views), objective freedom (i.e., freedom of “being with other”), and economic freedom (e.g., freedom to earn one’s living, to produce, to buy, to sell, etc.) have been all violated to some extent. Furthermore, hundreds of millions of people have lost their jobs or endured income reductions, many small and medium-sized companies have gone bankrupt, unemployment rates have increased across major economies, and most countries have gone into recession. Moreover, the lockdowns have also had a number of unintended social and health consequences, including increases in domestic violence to unprecedented levels, in the form of both physical and emotional abuse; a significant rise in substance abuse and related deaths (i.e., overdoses); worsening mental health problems leading to depression and suicides; isolation and antisocial lifestyles and behavior, particularly in children; physical inactivity and weight gain; and, the cancellation or delay of medical procedures, surgeries, and consultations. The unexpected destructive consequences of the totalitarian lockdown measures will undoubtedly be felt for decades to come.

Hayek and Popper would not have been surprised that the lockdown measures generated so many adverse impacts on people, the economy, and society. In fact, they warned that social engineering could never successfully achieve its predetermined goals and ends in the real world for two main reasons: the limited and dispersed nature of human knowledge and the spontaneous forces of society. Based on the concept of dispersed knowledge, “we know little of the particular facts to which the whole of social activity continuously adjusts itself in order to provide what we have learned to expect. We know even less of the forces which bring about this adjustment by appropriately coordinating individual activity.”

Hayek and Popper would have argued that social engineers of the pandemic could not realistically possess the type and the abundance of knowledge needed to plan such large-scale oppressive lockdowns. According to them, by ignoring the dispersed nature of human knowledge, social engineers falsely believed that they could possess all of the knowledge required to redesign an entire society while also having complete control over all efforts directed toward the achievement of teleologically evaluated goals. In fact, Hayek and Popper concluded that it was impossible to exercise complete control over society via social engineering because the limitations of human knowledge meant that nobody could foresee all of the possible consequences of human actions, which is necessary if common goals are to be achieved. These sentiments apply to contemporary social engineers of the pandemic, and could explain why they were unable to accurately predict the consequences of many of the oppressive policies and measures that were intended to mitigate the spread and impacts of covid-19.

Popper and Hayek argued that even if it were hypothetically possible for a social engineer to possess all the knowledge needed to centrally plan and organize an entire society, they would still be unable to attain their teleologically evaluated goals in the manner they envisioned on account of the spontaneous forces of society, which represent the second main obstacle to the success of large-scale central planning. The spontaneous forces of society would make it impossible to effectively collect detailed information about the constantly changing activities, private interests, particular circumstances, complex relationships, and preferences of millions of people. The unexpected and unplanned outcomes associated with the spontaneous forces of society mean that the original plans of any social engineer will end in failure, because “the real outcome will always be very different from the rational construction” of the social engineer. In order to realize their predetermined goals, social engineers would be forced to continuously modify and change their plans, while using their exclusive power to coerce individuals for the purpose of imposing increasingly restrictive measures. That is to say, they would need to constantly interfere in the choices that individuals make without having to obtain any input from them.

Hayek warned that the coercive measures employed by social engineers could “destroy those spontaneous forces which have made advance” and progress possible across history, and inevitably result in “a stagnation of thought and a decline of reason.” He wanted people to understand that while “it may not be difficult to destroy the spontaneous formations which are the indispensable bases of a free civilization, it may be beyond our power deliberately to reconstruct such a civilization once these foundations are destroyed.” This is why Popper called social engineering the “greatest and most urgent evil of society.” According to him, “even with the best intentions of making heaven on earth it only succeeds in making it hell—that hell which man alone prepares for his fellow-men.”

Tyler Durden Wed, 06/23/2021 - 16:40

"Cackling Kamala" Pressured Into Border Visit, Trump Gloats

Zero Hedge -

"Cackling Kamala" Pressured Into Border Visit, Trump Gloats

President Trump took a victory lap on Wednesay, after a Politico report that Vice President Kamala Harris is finally heading to the US-Mexico border this week, after months of defensive snarking when asked about the issue.

"After months of ignoring the crisis at the Southern Border, it is great that we got Kamala Harris to finally go and see the tremendous destruction and death that they've created—a direct result of Biden ending my very tough but fair Border policies..." said Trump in a Wednesday statement.

Kamala has come under mounting pressure for failing to visit the border - which President Joe Biden put her in charge of. To that end, Rep. Lauren Boebert (R-CO) on Wednesday introduced a GOP bill sponsored by 21 Republicans to censure Biden for a "failure" to faithfully execute US border and immigration laws.

In a Wednesday speech, Boebert said "President Biden passed the buck to Cackling Kamala...It’s not funny."

Exhibit A:


Tyler Durden Wed, 06/23/2021 - 16:20

June 23rd COVID-19 New Cases, Vaccinations, Hospitalizations

Calculated Risk -

This data is from the CDC.

According to the CDC, on Vaccinations.

Total doses administered: 319,872,053, as of yesterday 319,223,844. Daily change: 0.65 million.

COVID Metrics  TodayYesterdayWeek
AgoGoal Percent over 18,
One Dose65.6%65.5%64.7%≥70.0%1,2 Fully Vaccinated
(millions)150.8150.4146.5≥1601 New Cases per Day3,411,28211,25112,146≤5,0002 Hospitalized312,40212,63314,015≤3,0002 Deaths per Day3,4287293276≤502 1 America's Goal by July 4th,
2my goals to stop daily posts,
37 day average for Cases, Hospitalized, and Deaths
4Cases and Deaths updated Mon - Fri

KUDOS to the residents of the 16 states and D.C. that have already achieved the 70% goal: Vermont, Hawaii and Massachusetts are at 80%+, and Connecticut, New Jersey, Maine, Rhode Island, Pennsylvania, New Mexico, California, Maryland, Washington, New Hampshire, New York, Illinois, Virginia and D.C. are all over 70%.

Next up are Minnesota at 69.3%, Delaware at 69.2%, Colorado at 68.9%, Oregon at 68.9%, Wisconsin at 64.8%, Nebraska at 63.8%, and South Dakota at 63.6%.

COVID-19 Positive Tests per DayClick on graph for larger image.

This graph shows the daily (columns) and 7 day average (line) of positive tests reported.

This data is from the CDC.

Fed's Kaplan Sparks Late-Day Dump On Rate-Hike, Taper Talk

Zero Hedge -

Fed's Kaplan Sparks Late-Day Dump On Rate-Hike, Taper Talk

Ugly PMIs (Services recovery collapsed), and even uglier housing data suggest all is not well under the surface of the "excellent" recovery and that "hope"-filled gap between 'soft' and hard data is set to slump again...

Source: Bloomberg

But markets just shrugged it off as the echoes of Powell's dovish promises bounced around their frontal cortexes.

While Small Caps did their manic thing; The Dow, S&P, and Nasdaq all trod water all day in a very narrow range... UNTIL this happened...

The U.S. economy will likely meet the Federal Reserve’s threshold for tapering its asset purchases sooner than people think, said Dallas Fed President Robert Kaplan, who has penciled in an interest-rate increase next year.

“As we make substantial further progress, which I think will happen sooner than people expect -- sooner rather than later -- and we’re weathering the pandemic, I think we’d be far better off, from a risk-management point of view, beginning to adjust these purchases of Treasuries and mortgage-backed securities,” Kaplan said Wednesday in an interview with Bloomberg News.

“If we do these purchases longer than might be necessary, for me it actually may reduce our flexibility in adjusting rates,” Kaplan said.

“I’d rather start tapering, assuming we meet our conditions, sooner rather than later so that we have more flexibility in deciding what we want to do on rates down the road.”

And the selling began sending The Dow, S&P and Nasdaq into the red for the day...

Since just before the FOMC statement last week, The Dow and Small Caps are in the red and Nasdaq the big outperformer...

VIX fell to a 14 handle intraday...

This is how quiet it was...

Source: Bloomberg

Treasury yields also went nowhere fast, eventually rising 1-2bps across the curve on the day (10Y now unchanged from pre-FOMC)...

Source: Bloomberg

And while the dollar chopped around, it ended spectacularly unch...

Source: Bloomberg

There were some fireworks of note.

Fannie & Freddie were destroyed by SCOTUS ruling...

Source: Bloomberg

Crypto ended very marginally higher after giving back some overnight gains. Bitcoin briefly touched $35k before sliding...

Source: Bloomberg

WTI whipped higher and lower on OPEC+ production, inventories, and weak data...

Gold followed a similar trajectory - ending unch...

Finally, we note that the real measure of market fear - implied correlation - has collapsed, finally reverting to pre-COVID levels...

Source: Bloomberg

The implied correlation, a topic we have discussed in the past at length, quantifies the difference between the index's volatility and the summation of the underlying volatility of the names in an index. In a nutshell, the implied correlation measures the relative demand for instant liquid index macro protection relative to its underlying names (a slower less liquid way to protect yourself). The higher the correlation, the greater the risk of a very significant systemic downside move (since correlations tend to approach 1 when systemically bad events occur).

Source: Bloomberg

By implicitly measuring the market's demand for this relative protection - and its implicit downside risk sentiment - implied correlation is much more applicable as a measure of investor sentiment... which right now is about as complacent as its ever been.

Tyler Durden Wed, 06/23/2021 - 16:01

Leading US Scientist Finds China Scrubbed Early COVID Data That Could Help Explain Origins

Zero Hedge -

Leading US Scientist Finds China Scrubbed Early COVID Data That Could Help Explain Origins

A leading US expert in influenza viruses has discovered that early sequences of the coronavirus genome from a global database at the request of Chinese researchers.

Professor Jesse Bloom, who works at the Fred Hutchinson Cancer Research Center in Seattle, found a project by Wuhan University which sequenced 34 positive COVID-19 cases from January 2020, as well as 16 cases in early February in which researchers looked into diagnosing a SARS-CoV-2 infection using a technique known as nanopore sequencing.

While the results of their researcher were published in March as a pre-print, and in June following peer review, the genomic sequences obtained during the course of their research - and uploaded to the US-maintained Sequence Read Archive (SRA) within the National Institutes of Health - were removed by a process that could have only taken place if the SRA staff were asked to do so, according to The Telegraph.

The sequences, which have been recovered from cloud storage and published in a pre-print, have been described by experts as “the most important data” on the origins of Covid-19 in more than a year. 

The recovered data does not support either the “natural origins” or “lab leak” theory over the pandemic’s source, scientists say. However, it suggests the virus was circulating in Wuhan earlier than previously thought, and could perhaps point toward answers on the origins of Sars-CoV-2 - answers that could not only help end this pandemic but prevent the next one. 

The emergence of the sequences also suggests there is more data from the early days of the epidemic that China is sitting on, and which may be recoverable by investigators. 

Bloom writes in a lengthy Twitter thread: "Although events that led to emergence of #SARSCoV2 in Wuhan are unclear (zoonosis vs lab accident), everyone agrees deep ancestors are coronaviruses from bats. Therefore, we’d expect the first #SARSCoV2 sequences would be more similar to bat coronaviruses, and as #SARSCoV2 continued to evolve it would become more divergent from these ancestors. But that is *not* the case! Instead, early Huanan Seafood Market #SARSCoV2 viruses are more different from bat coronaviruses than #SARSCoV2 viruses collected later in China and even other countries. @lpipes @ras_nielsen give nice technical analysis at"

The NIH confirmed that the removal of the data, telling the Telegraph that they had "reviewed the submitting investigator’s request to withdraw the data," and removed it.

"The requestor indicated the sequence information had been updated, was being submitted to another database, and wanted the data removed from SRA to avoid version control issues," said a spokesperson, adding "Submitting investigators hold the rights to their data and can request withdrawal of the data."

Bloom published his findings on the preprint server bioRxiv.

Tyler Durden Wed, 06/23/2021 - 14:40

Court Dismisses BLM Lawsuit Against Federal Agencies Over Lafayette Park Protests

Zero Hedge -

Court Dismisses BLM Lawsuit Against Federal Agencies Over Lafayette Park Protests

Authored by Jonathan Turley,

We recently discussed the Inspector General report on the Lafayette Park protests and the debunking of claims that the federal government and specifically Attorney General Bill Barr cleared the area for the controversial photo op of President Donald Trump in front of St. John’s Church. For a year, legal and media experts have stated as fact that area was cleared for that purpose and that Barr was lying about the federal agencies using tear gas as opposed to pepper balls (even though the legal and practical difference is largely immaterial). Some tried to keep the myth alive by criticism the IG report and its scope.

Now, federal judge Dabney L. Friedrich has dismissed the lawsuit by the ACLU and Black Lives Matter as based on unsupported and unsubstantiated claims against the federal agencies. Ironically, the court allowed the lawsuit against the MPD under Mayor Muriel Bowser to continue. The Bowser Administration admitted recently that it used tear gas near the park on that night and that such use was perfectly reasonable. Both the Bowser and Biden Administrations sought to dismiss the BLM lawsuit as unfounded and unsupportable — a striking departure from what Bowser has stated publicly.

testified in Congress not long after the clearing of the area and stated that the conspiracy theory was already contradicted by the available evidence. I encouraged Congress to investigate the question and establish the truth of the matter.

As previously discussed, there was ample evidence in the days after the protests to reinforce the account of Barr and others that the plan to clear the park area was proposed days before any plan for a photo op. There was never any evidence that Barr knew of the photo op plan before approving the operation.  Nevertheless, media and legal experts continued to claim as a fact that this was all done for the photo op.  University of Texas professor and CNN contributor Steve Vladeck continued to claim that Barr ordered federal officers “to forcibly clear protestors in Lafayette Park to achieve a photo op for Trump.”

Democratic leaders like Speaker Nancy Pelosi repeated the conspiracy theory about the photo op and the Washington Post ran an article by Philip Bump titled “Attorney General Bill Barr’s Dishonest Defense of Clearing of Lafayette Square.” Not only did the Post refer to the “debunked claim” that no tear gas was used by the federal government, but goes on to state incredibly:

“It is the job of the media to tell the truth. The truth is that Barr’s arguments about the events of last Monday collapse under scrutiny and that his flat assertion that there was no link between clearing the square and Trump’s photo op should be treated with the same skepticism that his claims about the use of tear gas earns.”

It turns out that both assertions were true.

The Inspector General of the Department of Interior has conducted an investigation over the last year and found that the clearing was not done “to allow the President to survey the damage and walk to St. John’s Church.”

That is not the only contraction of the almost universal media accounts. The federal government has long denied using “tear gas” in its operation as opposed to pepper balls in the clearing operation on June 6th. The difference has little real significance either legally or practically. However, critics latched on the denial to show that Barr and others were lying. The IG found that “the USPP incident commander did not authorize CS gas for this operation. Expecting that CS gas would not be used, most USPP officers did not wear gas masks.”

The IG found no evidence of approval or use of tear gas by the federal operation. However, it confirmed “and the MPD confirmed, that the MPD used CS gas on 17th Street on June 1. As discussed above, the MPD was not a part of nor under the control or direction of the USPP’s and the Secret Service’s unified command structure.”

Now the federal court has completed its review of the evidence put together by the ACLU and found no credible basis for the conspiracy theory put forward by Vladeck and others. Judge Friedrich noted that “merely alleging that the defendant officials communicated, without alleging any details of those communications that suggest an unlawful agreement” is not enough. It was however enough for legal and media figures to repeat this conspiracy theory as fact for over a year.

What is most striking in the opinion is the utter lack of evidence presented by ACLU, which encouraged the Court to assume a conspiracy to clear the park for the photo op and to deny the right to protest.  There was nothing but pure conjecture, as the Court noted:

These allegations, taken as true, do not show sufficient “events, conversations, or documents indicating an agreement or meeting of the minds’ amongst the defendants to violate [plaintiffs’] rights based on [their] membership in a protected class.” Barber v. D.C. Gov’t, 394 F. Supp. 3d 49, 66 (D.D.C. 2019) (alteration and internal quotation marks omitted). Rather, they demonstrate only that these officials were communicating with each other on June 1, prior to and after the clearing of Lafayette Square. Merely alleging that the defendant officials communicated, without alleging any details of those communications that suggest an unlawful agreement, cannot justify inferring the requisite agreement for a § 1985(3) conspiracy.

As we discussed with Bump’s coverage of the IG investigation, there is little acknowledgment of the false conspiracy claims made by the media or legal experts like Vladeck. Just as there was little interest in confirming key facts when the protests occurred, there is even less interest in admitting that these figures at the Washington Post, CNN, and other outlets maintained a false and unsupported factual claims.

There is also little recognition of the striking disconnect between what Bowser has claimed publicly and what her Administration has argued in court. Bowser continued to slam the federal government for the use of tear gas, for example, and never admitted that it was the MPD that used the tear gas.  Ironically, it is the District’s MPD that will be continuing as a litigant, not Barr or the federal agencies.

Here is the opinion: Lafayette Park decision

Tyler Durden Wed, 06/23/2021 - 14:20

Iran Says It Foiled New 'Sabotage Attack' On Nuclear Facility

Zero Hedge -

Iran Says It Foiled New 'Sabotage Attack' On Nuclear Facility

Iran on Wednesday announced security services prevented a "sabotage attack" on a civilian nuclear site at a moment JCPOA negotiations in Vienna are said to be headed toward an uncertain conclusion.

The alleged sabotage attempt targeted an Iranian Atomic Energy Organization building in Karaj city, which is northwest of Tehran. Iranian officials gave few details, nor did they reveal the precise form the sabotage took, other than to say the incident "left no casualties or damages and was unable to disrupt the Iranian nuclear program," as the AP reported.

It comes after a string of mysterious incidents throughout the past year which have periodically taken Iranian nuclear and key industrial facilities offline - the most famous of which was the Natanz cyberattack of summer 2020, widely blamed on Israel.

The AP presents some further details of the sensitive Iranian sites in Karaj as follows:

While it was not clear which Karaj facility had been targeted, the AP noted that the area is home to two known sites connected with Iran’s nuclear program, including the Karaj Agricultural and Medical Research Center.

According to the IAEA, the center uses nuclear technology to improve the "quality of soil, water, agricultural and livestock production."

What makes this newest alleged sabotage attack interesting is that it comes just after Iran elected a new hardline president (who will be sworn in later this summer), and just after a new Israeli prime minister has been sworn in.

This past weekend, new Prime Minister Naftali Bennett picked up right where Netanyahu left off in warning the world against restoring the Joint Comprehensive Plan of Action (JCPOA). Bennett in Sunday remarks for the first time commented on Iran's presidential election. In particular he seized on the Islamic hardliner credentials of the winner of Friday's election, Ebrahim Raisi, saying that world powers negotiating in Vienna must "wake up". 

"Raisi's election is, I would say, the last chance for world powers to wake up before returning to the nuclear agreement, and understand who they are doing business with," Bennett said.

If a sabotage attack is confirmed Wednesday, it could suggest Bennett is continuing Netanyahu's covert "dirty tricks" campaign targeting military and nuclear sites inside the Islamic Republic. 

With the uncertain status of negotiations among world powers in Vienna, it's very likely Tel Aviv is actually stepping up its efforts to ramp up the pressure via espionage against Iranian sites.

Tyler Durden Wed, 06/23/2021 - 14:00

AIA: "Architecture billings continue historic rebound" in May

Calculated Risk -

Note: This index is a leading indicator primarily for new Commercial Real Estate (CRE) investment.

From the AIA: Architecture billings continue historic rebound
Demand for design services from U.S. architecture firms continues to grow at a vigorous pace, according to a new report today from The American Institute of Architects (AIA).

AIA’s Architecture Billings Index (ABI) score for May rose to 58.5 compared to 57.9 in April (any score above 50 indicates an increase in billings). May’s ABI score is one of the highest in the index’s 25-year history. During May, the new design contracts score reached its second consecutive record high with a score of 63.2, while new project inquiries also recorded a near-record high score at 69.2.

“Despite ballooning costs for construction materials and delivery delays, design activity is roaring back as more and more places reopen,” said AIA Chief Economist Kermit Baker, Hon. AIA, PhD. “However, concern over rising inflation and ongoing supply chain disruptions, as well as emerging labor shortages, could dampen the emerging construction recovery.”
• Regional averages: Midwest (63.4); South (59.0); West (57.4); Northeast (54.2)

• Sector index breakdown: commercial/industrial (60.6); multi-family residential (59.5); mixed practice (57.9); institutional (57.1)
emphasis added
AIA Architecture Billing Index Click on graph for larger image.

This graph shows the Architecture Billings Index since 1996. The index was at 58.5 in May, up from 57.9 in April. Anything above 50 indicates expansion in demand for architects' services.

Note: This includes commercial and industrial facilities like hotels and office buildings, multi-family residential, as well as schools, hospitals and other institutions.

This index had been below 50 for eleven consecutive months, but has been solidly positive for the last foure months.  
The eleven months of decline represented a significant decrease in design services, and suggests a decline in CRE investment through most of 2021 (This usually leads CRE investment by 9 to 12 months), however we might see a pickup in CRE investment towards the end of the 2021 and into 2022.

Daily Briefing: NASDAQ Grinds Higher as Bitcoin Bounces Back

Zero Hedge -

Daily Briefing: NASDAQ Grinds Higher as Bitcoin Bounces Back

Real Vision’s Jack Farley welcomes Samuel Burke, Real Vision managing editor, and Weston Nakamura to the Daily Briefing to discuss the S&P 500 trending higher, effects of global vaccination campaigns, and the rise in oil prices. The trio will analyze the bullish sentiment present in the market as vaccination rates continue to improve. Nakamura and Burke also look at the oil market as summer driving demand escalates. Special Festival of Learning offer - 10% off with the code DAILYBRIEFING.

Tyler Durden Wed, 06/23/2021 - 13:48

The Sources Of Inflation Few Dare Discuss

Zero Hedge -

The Sources Of Inflation Few Dare Discuss

Authored by Charles Hugh Smith via,

Since the word inflation is so loaded, let’s use the more neutral (and more accurate) term, decline in purchasing power: an hour of your labor buys fewer goods and services of lesser quality than it did a decade ago or a generation ago.

While the conventional discussion focuses on monetary inflation, i.e. expansion of money supply, the real rip-your-face-off sources have nothing to do with money supply. The rip-your-face-off sources are scarcities that cannot be filled by substitution or globalization.

Consider skilled hands-on labor as an example. Let’s say some essential parts in essential infrastructure require welding. There is no substitute for skilled welders. But wait, doesn’t economic dogma hold that whenever costs rise, a cheaper substitute will magically manifest out of a swirl of dust?

That dogma is false in cases such as skilled labor.

The only substitute for a skilled welder is another skilled welder, and while theory holds that there will be cheaper welders who can be brought in from elsewhere, this is also not true. Due to deficiencies in education and a cultural bias against manual labor, there is a shortage of skilled welders virtually everywhere.

But wait, can’t we just offshore the project? Globalization always lowers costs, right?

So by all means, load your busted boat trailer on a container ship to China, find a welder in Shanghai to do the work, and then ship the boat trailer back. Weeks later, you discover the plan and the specs weren’t followed, so all the time and money was wasted.

It would have been so much cheaper and faster if you’d just paid the welder in town a few extra bucks and had it done right in a few hours.

But wait — we’ll just automate welding and have a robot do it all for next to nothing. OK, fine, pal — you manufacture the robot and program it to trundle out to the busted boat trailer, examine the breaks and do the welding so it actually works again.

Go ahead and do that (at gargantuan expense), and then let’s see the robot do it right in dozens of different jobs in all sorts of situations, and then add up the cost of all that compared to the relatively low cost of an experienced welder.

Meanwhile, back in the real world, people with high levels of craft skills and experience are scarce, and the fantasy of robots replacing them are untethered from reality.

Central banks can conjure trillions of dollars out of thin air but they can’t conjure up experienced, motivated workers willing to work for lousy pay. As I noted recently, the minimum wage would have to double to even get close to the purchasing power of the minimum wage I earned two generations ago.

If an economy can’t pay its workers enough to live, it doesn’t deserve to exist and should be shoveled into the dustbin of history.

Fans of automation are rarely if ever the people tasked with designing, manufacturing and programming robots. Fans of automation don’t recognize any limits on the cost and efficacy of automation because their faith in technology is quasi-religious. But in the real world, there are many tasks that don’t lend themselves to automation.

If automation was as cheap and easy as many seem to think, then why does Amazon need 1.3 million human employees? In terms of automation, what could be easier than vast warehouses, vehicles and delivery?

Amazon certainly has the money and talent to automate everything that can be automated, so why is Amazon hiring hundreds of thousands of humans and boosting wages for 500,000 humans?

Although it’s heresy to true believers in automation, humans are cheaper and create more value than robots in many settings. Simply put, there are limits on the cost effectiveness and value creation of robotics and automation.

A strong case can be made that automation has drastically reduced the quality of services and created the illusion of effectiveness. For example, you go online, check the inventory in your local outlet, drive down there and discover a bare shelf even though the online app indicates dozens in stock.

Where is the value in this travesty of a mockery of a sham?

Those at the top of the wealth-power pyramid avoid the systems they profit from like the plague. Abysmal customer service, poor quality goods, apps that don’t work — that’s all the debt-serfs will ever experience. Those who own the systems know how awful it all is and they never touch any of the goods and services they pour into the slop buckets of the commoners.

Few seem to have noticed that we’re already on the downside of Peak Globalization: labor costs are rising in China, too, for the same reason labor costs are rising here and elsewhere. The number of people willing to do dirty, boring, difficult work for low pay and no benefits is diminishing.

Some of this scarcity is due to demographics, as the workforce shrinks, some of it is increasing opportunities for flexible gig work that pays as well or better, and some is a rejection of the status quo.

Apologists for the wunnerfulness of globalization also fail to take into account the nationalization of critical resources or resources being cut off for geopolitical reasons.

Nice copper mine you got there, but now it’s ours, and we’re raising prices. Go find a substitute for copper, cobalt, rare earths — gosh, there are no substitutes? Wait a minute, economists promised us scarcity was impossible because there’s always a substitute.

In the real world, essentials for which there are no substitutes are scarce, and the world is awakening to the power of those who control these essentials. Globalization was always based on the notion that there was always another place to stripmine, but now the entire planet has been stripmined, put under the plow or clearcut.

The primary source of cost-cutting and profit-boosting — lowering quality and reducing quantities — have reached limits.

If the package gets any smaller, we’ll need a microscope to see it. Cutting corners has been going on so long that there are no corners left to be trimmed. Shrinkflation has reduced cereal boxes such that the boxes are not wide enough to stand up on the shelf.

Producers have to raise prices to maintain profits, period. And anyone who lets profit margins slip is cashiered, to be replaced by someone who won’t.

So let’s review the sources of inflation:

  • Scarcities of labor across the board. (see job openings chart below).

  • Deglobalization/Peak Globalization.

  • Cost and value-creation limits on automation.

  • All the corners have been cut, now prices have to rise or companies will bankrupt themselves.

  • People are abandoning the status quo hamster wheel.

Few are willing to acknowledge these sources because they run counter to the fantasy world narrative that’s spinning the frenzied hamster wheel. Purchasing power is prosperity, and since purchasing power is in free-fall, so is prosperity — at least for the bottom 90%.

Trillions in free money have masked the decline temporarily, but what’s transitory isn’t inflation — it’s the illusion of prosperity that’s transitory. And that’s why nobody in a position of power wants to discuss prices being driven by scarcities caused by actual physical limits.

Those who think prices can’t double or triple haven’t experienced scarcities caused by actual physical limits. There are no substitutes for essentials or skilled labor. Globalization has already stripmined the planet and central banks can’t print experienced workers willing to work for rapidly devaluing wages in dead-end jobs while billionaires pay pennies in taxes.

We’re getting a real-world economics lesson in rip-your-face-off increases in prices, and the tuition is about to go up — way up.

Tyler Durden Wed, 06/23/2021 - 13:40