Swiss Watch Exports Crash In China & Hong Kong

Fears of a luxury slowdown are materializing. New data from the Federation of the Swiss Watch Industry shows that exports of luxury timepieces tumbled the most since 2020 as demand crashed in Asia. 

Swiss watch exports dropped in March. Their value fell by 16.1% compared with the same month in 2023 to 2 billion Swiss francs ($2.2 billion). Cratering demand in China and Hong Kong caused most of the decline. Weakness was reported across all six main markets. 

Exports to mainland China, the second-biggest market for Swiss watches, plunged 42%, the worst decline since March 2020, when the global economy began seizing up due to government-enforced lockdowns. Shipments to Hong Kong tumbled even more, down 44%. 

"The negative trend is even worse than we expected and the decline in China is really worrying and probably indicates that inventories in the region were once again too high," Jean-Philippe Bertschy, an analyst at Vontobel in Switzerland, told Bloomberg. 

Faltering demand for Swiss watches comes one day after LVMH Moët Hennessy Louis Vuitton, the world's largest luxury group, controlled by the family of billionaire Bernard Arnault, reported that "uncertain geopolitical and economic environment" has weighed on luxury spending. 

LVMH shares in Paris are 10.5% below the peak put in early last year. 

For a broader view of global luxury stocks, the MSCI World Textiles, Apparel & Luxury Goods Index also shows the index well below (-21%) the peak put in at the end of 2021. 

A combination of China's slower-than-expected economic recovery and generational highs in interest rates across the Western world are some of the reasons why a global slowdown in the luxury market has materialized. 

Tyler Durden Fri, 04/19/2024 - 04:15

Borrell Came Up With A Nifty Excuse For Why NATO Won't Shoot Down Russian Missiles Over Ukraine

Authored by Andrew Korybko via Substack,

This is credible enough of a reason to justify a conventional NATO intervention in defense of Israel without giving Ukraine grounds to claim that there are double standards at play.

Ukraine became jealous like never before after NATO members helped shoot down Iranian missiles en route to Israel earlier this month yet won’t lift a finger to help Ukraine shoot down Russian ones.

British Foreign Secretary David Cameron said that “the difficulty with what you suggest (about the UK shooting down Russian missiles) is if you want to avoid an escalation in terms of a wider European war, I think the one thing you do need to avoid is NATO troops directly engaging Russian troops.”

Pentagon spokesman John Kirby responded to a similar question by saying “Look: different conflicts, different airspace, different threat picture. And [President Joe Biden] has been clear from the beginning [of the Ukraine hostilities] that the US is not going to be involved in that conflict in a combat role.” Zelensky’s Chief of Staff Andrey Yermak didn’t buy their explanations, however, and demanded that the West start shooting down Russian missiles just like they shot down Iranian ones.

NATO Secretary General Jens Stoltenberg tried allaying Ukraine’s jealousy by declaring that “if allies face a choice between meeting NATO capability targets and providing more aid to Ukraine, my message is clear: send more to Ukraine.”

Even though he’s telling members to prioritize Ukraine’s interests over their own national ones, Kiev isn’t expected to calm down since it still knows that NATO won’t come to its rescue in this respect like the bloc just did for Israel.

That’s where EU foreign policy chief Josep Borrell’s nifty excuse comes in. As he explained, “Iran’s attacks flew over air bases of the armies of France, the US, the UK and Jordan. They have gone over their bases, which then acted in self-defense. There are no air bases of the UK, or the US, much less Jordan of course, on Ukrainian territory or in the territory Russian missiles fly over. Therefore, the same answer cannot be given because the circumstances are not the same.”

This is credible enough of a reason to justify a conventional NATO intervention in defense of Israel without giving Ukraine grounds to claim that there are double standards at play.

The only way that Kiev could try flipping the tables is in the far-fetched event that it officially admits the presence of NATO troops on its territory, which Polish Foreign Minister Radek Sikorski described as an “open secret” last month, and pinpoints their bases to prove that the bloc does nothing as Russian missiles fly overhead.

That is extremely unlikely to happen, however, since it would represent a major security risk. Ukrainian officials might still hint that this is the case and perhaps leak vague information about it into their national media and/or to international media via their “agents of influence”, but they’re almost certainly not going to cross the red line of disclosing specific details that could put those troops at risk. Borrell, for all his professional faults, knows this and thus crafted his nifty excuse that inspired this analysis.

Giving credit where it’s due, that was a wise move since his explanation is consistent enough to dispel Ukraine’s complaints about NATO’s double standards and consequent perception of being less important to the bloc than Israel is, both of which are true but can now be more plausibly denied. Ukraine should accept that NATO isn’t going to treat it and Israel as equals, with the only consolation being if some members send it more Patriot systems, but that’s not the same as them shooting down Russian missiles.

Tyler Durden Fri, 04/19/2024 - 03:30

Illegal UK Immigrant Who Protested With Sign Saying "Migrants Are Not Criminals" Pleads Guilty To Rape Of 15-Year-Old Girl

Authored by Thomas Brooke via ReMix News,

A Congolese migrant who had his deportation from the U.K. blocked by an airline’s cabin crew and previously campaigned outside a detention center with a sign that read, “Migrants are not criminals,” has pleaded guilty to raping a 15-year-old girl.

Anicet Mayela entered his guilty plea at Oxford Crown Court last Friday for one count of rape of a former economics student.

The court heard how there was a high level of “dangerousness” surrounding the attack, which is understood to have taken place between Dec. 1 and Dec. 31 last year.

The Congolese national had been living in Britain since 2004 when he paid smugglers to help him escape his country of origin where he claimed he was being persecuted.

Several attempts by the U.K. Home Office to deport him were thwarted by feigned injuries and legal challenges, including an incident back in May 2005 when a planned deportation flight was prevented from taking off by Air France cabin crew who claimed public officials had broken Mayela’s hand after handcuffing him.

With the aid of left-wing charities, including the Institute of Race Relations, and immigration lawyers, the Congolese national won leave to remain in Britain later that year after successfully arguing a return to his homeland would be a violation of his human rights.

Mayela used the opportunity to actively campaign against the deportation of illegal migrants, participating in a demonstration near his detention center in Oxford where he spoke to the BBC and hung a sign around his neck that read, “Migrants are not criminals.”

“I am here to support my friends. I have been inside here, and at Colnbrook,” he told the U.K.’s public broadcaster from outside the detention center.

On Friday, Mayela was ordered to remain in custody while a pre-sentencing report was prepared.

He is scheduled to return for sentencing on May 10.

Read more here...

Tyler Durden Fri, 04/19/2024 - 02:45

BRICS - The Project Of The Century

Authored by Peter Hanseler via VoiceOfRussia.com,

The Western media are prioritizing the Ukraine conflict, the green revolution and the woke revolution. In the shadow of this media coverage, BRICS is changing the world.

We bring you the latest figures and place them in the current geopolitical environment. – An analysis.

 

Introduction

One of the main topics of this blog is BRICS. We have written numerous articles, followed and analyzed the development of this organization. Significantly, the first independent post on this blog was dedicated to BRICS on November 18, 2022 “The unstoppable rise of the East“.

Our last dedicated BRICS-only article from 24 September 2023 “BRICS will change the world – slowly” gave an overview of the development and summarized the results of the BRICS summit in South Africa in August 2023. This article was published by ZeroHedge, the GloomBoomDoom report by Dr. Marc Faber and Weltwoche (print and online).

From the density of our coverage, it is clear that we ascribe paramount importance to BRICS for the geopolitical and geo-economic development of the world. Based on the facts, we have come to the conclusion that BRICS will change the world more than all other developments of the last 100 years put together. The developments around BRICS have already triggered a tectonic shift in the geopolitical balance of power; the Ukraine conflict and the accelerating crisis in the Middle East are merely pieces of the mosaic by comparison.

The Western media are setting their priorities differently and focusing on topics that we believe are of lesser importance: Mortal enemy Russia, wokeness and green ideology.

Reporting on BRICS in the West, if it takes place at all, is limited to portraying BRICS either as an instrument of China to achieve world power – as the Financial Times put it,

«How the BRICS nations risk becoming satellites of China»

FINANCIAL TIMES – 26 JULY 2023

or to trivialize the success of BRICS – according to the NZZ,

“We explain in the video why this extension only promises limited success.”

NZZ, 14 DECEMBER 2023

Preliminary remarks on the figures

We proceed as we always do and develop a fact-based foundation for a discussion.

Membership doubled as of January 1

Since January 1, Saudi Arabia, Iran, the United Arab Emirates, Egypt and Ethiopia have joined the existing members (Brazil, Russia, India, China and South Africa) as new members.

Argentina not participating

In August 2023, Argentina was invited to become the sixth member. However, the new president of Argentina, Javier Milei, decided not to accept this invitation and to rely on the USA and Donald Trump to rescue his economy.

It is impossible to judge at this point whether this decision will prove to be the right one. For the second largest country in South America, which was once one of the richest countries in the world, it is to be hoped that Milei can pull the cart out of the deep mire. Milei is fighting against the establishment in Argentina, which has driven the country economically to the wall. These former rulers are serious opponents who are fighting for sinecures that Milei must wrest from them if he wants to save Argentina. We hope that Javier Milei can prevail and wish him every success and good luck. The first signs of success appear to be emerging: The country was able to report a positive budget for the first time last month. It seems to be heading in the right direction.

Saudi Arabia

According to Western media reports, Saudi Arabia is not yet fully on board. South African Foreign Minister Naledi Pandor is reported to have told Reuters that “Saudi Arabia has not yet responded to the invitation to join BRICS. It is still being considered”.

Saudi Arabia, or rather the ruling Saud family, has been an ally of the USA since the end of the Second World War, and this relationship has been further strengthened since the agreement of the ” Petrodollar” in 1974.

Since President Biden has been in power, the relationship with the USA has suffered massively, while at the same time cooperation with China and Russia has strengthened to an unprecedented level.

The problem that Saudi Arabia now has is the gigantic investments that the state and private individuals have made, particularly in the USA and the UK. Government investments in the USA alone amount to over USD 35 billion and investments in the UK are said to be around USD 75 billion. Due to the geopolitical situation in the world and the West’s aggressive sanctions policy, the concerns of Saudi Arabia that these investments could be confiscated in the event of a BRICS accession are definitely justified. As Saudi Arabia is important to BRICS and China has overtaken the US as Saudi Arabia’s largest trading partner, we expect Saudi Arabia to join BRICS as soon as China might make commitments to the Saudis in the event of Western expropriation.

BRICS-10 in numbers Map

Dark green BRICS until August 2023 – light green – the new BRICS members – Source: VoicefromRussia

Numbers

In our figures, we compare the BRICS-10 with the G7 and the world as a whole to give you a feel for the ratios. The parameters we use are population, GDP (adjusted for purchasing power), oil production, gas production and gold production.

We show the gross national product adjusted for purchasing power. If you use the US dollar as a measure of GDP, the economic power of a country is distorted: if you want to measure financial strength realistically, it makes a big difference whether, for example, a Big Mac in US dollars costs twice as much in one place as elsewhere. The so-called Big Mac Index is reason enough to use purchasing power-adjusted figures when comparing GDP figures. The reason why Western media use the unadjusted figures is pure marketing to disguise the devaluation of the US dollar and make it appear stronger than it is.

Charts

Graphical representation of the figures – Source: VoicefromRussia.

Interim result

All factors show that the BRICS 10 far outstrip the G7 and it seems incomprehensible that the West is simply suppressing this fact. A look beneath the surface reveals facts that reinforce the impression of the bare figures.

Assessment of these figures Oil production

The following additional facts should be taken into consideration when evaluating the oil production figures:

Firstly, although the USA is still the largest oil producer in the world, accounting for around 18% of global production, it also consumes the most oil, with a share of over 20%. This means that the USA is currently not even able to cover its own consumption. This fact alone is a compelling reason for the US to pressure Saudi Arabia not to join BRICS.

Secondly, the major oil-producing members of BRICS have a great deal of influence or even control over OPEC. As BRICS thus also controls OPEC and therefore controls the price and distribution of a large proportion of oil, BRICS can be said to have an (indirect) monopoly position.

Thirdly, the production costs for US oil are around 2.5 times higher than the production costs for Saudi oil.

These factors therefore further strengthen the BRICS’ position of power with regard to oil.

Natural gas

With regard to natural gas, it should be noted that with Iran’s accession to BRICS, the two largest natural gas producers in the world are joint members of BRICS: Russia and Iran.

The largest non-BRICS gas producer is Qatar, which is (still) allied with the USA. BRICS is therefore also a real center of power when it comes to natural gas.

Gold

With regard to gold, it should be briefly mentioned that China and Russia are number 1 and 2 in global gold production respectively. I mention gold here because there is a good chance that gold will again play an important role in future monetary systems at some point – more on this below.

Russia holds the BRICS chairmanship in 2024

Over 220 BRICS conferences will be held in Russia over the course of 2024. The topics are diverse: science, high technology, healthcare, environmental protection, culture, sport, youth exchange and civil society.

President Putin’s statements at the beginning of the year at the opening event of BRICS 2024 in Moscow were interesting. He mentioned several times the closer cooperation between the members on security issues. It seems that BRICS will therefore not only focus on economic aspects, but also on security-related aspects more and more. The apparent coordination of the BRICS states in connection with the Middle East conflict at the UN in New York clearly indicates close cooperation on non-economic issues.

Various non-official sources have reported that the SCO (Shanghai Cooperation Organization) is moving closer to BRICS and may even merge with it. In addition to China, India, Kazakhstan, Kyrgyzstan, Pakistan, Russia, Tajikistan and Uzbekistan, Iran has also been a member of the SCO since July 2023.

This is extremely important due to the heightened geopolitical tensions and the two major conflicts in Ukraine and the Middle East. If these two organizations were to merge, there would be a new counterweight to NATO. NATO is already increasingly being characterized by experts as a mere chattering club, particularly due to its performance in the Ukraine conflict, which was not a success. As a result, NATO has almost lost its threatening potential. If the BRICS-SCO merger becomes a reality, NATO would finally degenerate into an empty shell.

Formal applications for admission – BRICS+ Candidates

Algeria, Bahrain, Bangladesh, Bolivia, Kazakhstan, Cuba, Kuwait, Nigeria, Pakistan, Palestine, Senegal, Thailand, Venezuela, Vietnam and Belarus have formally applied for membership.

Green: BRICS 10 (light green Saudi Arabia) – Yellow: formal membership applications

Figures

Charts

Assessment

It should be noted in this list that the formal applicants will probably not all be admitted in 2024. This illustration shows the maximum and the broad formal interest in this organization. The applications for admission from some countries harbor great potential for conflict with the USA.

In my opinion, the greatest potential for conflict from an American perspective is the possible accession of Mexico, Cuba and Venezuela. Mexico’s membership would be seen by the USA in the same way as the Soviet stationing of nuclear missiles in Cuba in 1962 – “enemy on the doorstep of the USA”. This is probably also the reason why it was reported on March 3 that Mexico had not submitted a formal application for membership. Fear is breathing down the necks of the Mexicans and the USA is exerting pressure in the background.

In Venezuela, the country with the world’s largest oil reserves, the US has been trying for years to overthrow President Maduro and install a puppet.
Last August, it was not enough to gain admission and the USA will do everything in its power to prevent this oil giant from joining. However, the USA has a losing hand with the Venezuelan population, as it is imposing sanctions on the beleaguered country to bring about a collapse and accepting that the Venezuelan people are suffering from hunger.

The list of formal applications for admission could therefore change considerably between now and October, when the decisions on who will be invited to Kazan are made. What is certain, however, is that the G7 – especially the United States – is devoting huge energies to slowing down the development of BRICS. In my opinion, however, this organization is already too powerful to be weakened by the West.

BRICS turns its back on the US dollar The petrodollar – US dollar as a reserve currency

The greatest danger of this ever stronger community is to the USA. We have discussed many times that the Petrodollar is the real foundation of American supremacy and not the American armed forces.

It is of existential importance for the USA that international trade, especially commodity trade, is conducted in US dollars. We explain why.

The US dollar as a global trading currency means that practically all countries have to hold US dollars in reserve in order to be able to settle their trade invoices. This makes the US dollar a reserve currency.

However, central banks do not hold the US dollar in cash, but in US government securities in order to earn interest. This makes the world’s central banks the biggest buyers of US government securities, regardless of whether they think they are a good investment. As a result, the US can refinance its debt on terms that are not based on the strength of the US economy, but on these systemic purchases. French President Giscard d’Estaing rightly described the petrodollar in the 1970s as an “exorbitant privilege”, as it leads to the automatic refinancing of the USA.

Abuse of this exorbitant privilege

However, the USA has been abusing this privilege for decades. Whenever a country implements something that the US does not like, it is cut off from the US dollar. The US can implement this without any problems, as all US dollar transactions go through the US. The consequences for the country concerned are catastrophic, as it is effectively banned from the commodities trade.

Theft of Russian central bank reserves

However, by blocking the foreign currency reserves of the Russian central bank in March 2023, the US has overstepped the mark, because now the entire Global South is afraid to hold US dollars, as they may suffer the same fate. Although every legal expert declares that the freeze was already carried out without an international legal basis, the West is about to go one step further and prepare the confiscation. This is the unequivocal statement made by Janet Yellen on February 27:

“I also believe it is necessary and urgent for our coalition to find a way to unlock the value of these immobilized assets to support Ukraine’s continued resistance and long-term reconstruction.”

JANET YELLEN AT THE PRESS CONFERENCE BEFORE THE G20 ON FEBRUARY 27, 2024

 

The EU under Ms. von der Leyen and even exponents in Switzerland are preparing to put this planned raid into practice and thus not only continue to block these funds, but to steal them.

De-dollarization is already here

Until 2022, Russia conducted 80% of its trade in USD and EUR, 50% in US dollars. Today it is only 13%.

In the same period, Russia’s trade activity in roubles and yuan rose from 3% to 34% for both currencies.

These figures are clearly the result of the sanctions against Russia. However, it is a declared goal of all BRICS countries to no longer trade with each other in US dollars, but in the respective local currencies.

If you look at the current size of BRICS – 36% of global GDP – this will herald a tectonic development away from the US dollar; if you add the formal applicants, this figure rises to 42% of global GDP.

According to Bloomberg, the use of the US dollar as a reserve currency is collapsing.

Source: Bloomberg

Consequences for the US

De-dollarization poses an existential threat to the USA, as it will result in the loss of buyers of US government bonds and thus the USA’s ability to refinance its highly deficit-ridden national budget. As US government bonds are a product like any other, whose price is determined by supply and demand, a collapse in demand also leads to a collapse in the price of US government bonds. As the interest rate on bonds moves inversely to the price, the interest rate on bonds and therefore inflation will rise.

Debt in the USA is currently accelerating at an unprecedented rate. Debt currently amounts to over USD 34 trillion. It will soon take just one month to accumulate the next trillion in debt – apocalyptic. When President Reagan was in power, the total US debt amounted to less than one trillion. It therefore took just under 200 years to build up the first trillion in debt; soon this amount of debt will be a reality within a month.

One of the reasons for this is that the USA will already have to pay one trillion US dollars (1,000,000,000,000) in interest payments on its own debt this year alone. This is more than the USA spends on its entire military expenditure, which is gigantic in itself, as the USA spends more money on its military than the next 13 countries combined.

Source: Wikipedia

If the willingness of the countries of the Global South, and in particular the BRICS members, to buy decreases, the USA will sooner or later find itself in an existentially dangerous situation.

BRICS’ own currency Trading currency

There is a lot of talk about a new currency that would serve as a payment and financing instrument for the BRICS. There were voices – including James Rickards – who were convinced last August that a BRICS single currency would be created as early as 2023. We were skeptical about this timing and took the view that it would take longer, and we were right. However, this does not mean that James Rickards was wrong, he was just a little early.

We have seen above that the BRICS countries are in fact hardly using the US dollar among themselves any more, instead using their local currencies.

Use of local currencies

The consequence of this is that the BRICS members accumulate currencies of their trading partners over the course of a trading year if they sell more goods than they buy. Example: Russia and India use Roubles and Rupees in their trade. Since Russia sells more to India (especially raw materials) than India sells to Russia, the Russians are sitting on large amounts of Rupees at the end of the year. This problem arises regularly throughout the BRICS region among the various members in bilateral trade when deficits or surpluses build up.

Settlement with gold

I believe that the bilateral use of national currencies will continue for the time being, but that the first step will be to look for a mechanism to balance these surpluses or deficits at the end of a trading year.

Gold is an obvious choice here, not gold calculated in US dollars, Rupees or Roubles, but gold in units of weight. The trade differences at the end of a year or month would be settled in gold (kg or tons). Whether in this case the gold is actually physically delivered or merely recorded in a ledger depends on the trust between the parties. I also assume that in such a case, gold warehouses would be opened in various locations in the BRICS region, where the member countries would store their gold and their holdings would be confirmed by a BRICS auditing company.

A final issue would then be to determine the exchange rate of the local currencies. This seems to be one of the major sticking points so far.

Indications that the trend is towards gold

Evidence always comes from the facts. The world produces around 3,000 tons of gold per year.

According to the World Gold Council, central banks have been net buyers of gold since 2010 and the trend in gold purchases has increased steadily in recent years.

The Chinese bought the most gold (225 tons).

Caution is advised with regard to the official reported gold reserves.

It is very possible – and in my opinion probable – that the gold reserves of China and Russia are much larger than officially reported.

It is clear that central banks are buying more gold than they have since the 1960s. This is an indication that they are not only arming themselves against inflation, but also for the settlement of commodities.

It will be interesting to see what exactly will happen this year, but I assume that at the next BRICS summit, which will take place in Kazan in October, announcements will be made that will surprise the West. In addition to new members, I believe that a trade clearing system as described above or even more is within the realm of possibility.

Future of BRICS – many new members Preliminary remarks

Looking to the future, BRICS has the potential to unite many countries of the Global South and completely eclipse the Collective West.

We have compiled the data of those countries that are interested in joining. This is for the future, but in times of geopolitical tensions and military conflicts, history teaches us that a lot can happen in a short time, especially after decades, without major changes. For this reason, we are merely providing a framework below and are not making any predictions regarding the timeline, but rather letting the figures speak for themselves and refraining from commenting at this stage.

Map

Green: BRICS 10 – Yellow: formal requests for membership – Blue: countries that show interest

Numbers Charts

Conclusion

After BRICS became BRICS-10 last August by doubling its membership and thus far outstripping the previous economic colossus G7, the current year is set to continue in giant strides. The gap to the G7 will definitely widen further at the BRICS summit in Kazan. It is still uncertain which of the formal applicants will actually be invited and thus become new members on January 1, 2025.

In my opinion, however, one thing is already a fact: the hegemony of the USA will come to an end as a result of de-dollarization. The combination of astronomical debts, rampant new borrowing and the fact that more and more countries in the Global South are turning away from the US dollar is accelerating the demise of the hegemon that ascended to the throne in 1945 and is increasingly harming itself through its aggressive geopolitics.

No world power has ever left voluntarily and peacefully. The aggressive stance of the USA towards Russia and China and its adherence to the alliance with Israel are de facto proof of the aggressive behavior of the sick hegemon.

This attitude could lead to a war between Russia and NATO in Ukraine, where a local conflict is still taking place, all the more so as the Americans have so far been on the way to inciting France, Great Britain and Germany to wage war against the giant empire.

In the Middle East, the attitude is downright perverse. In order not to alienate the Jewish lobbies in the USA, which traditionally have a major influence on presidential elections, the USA is supporting a genocide that has been clearly designated as such by the International Court of Justice. In addition to purely electoral considerations in the USA, the USA also supports Israel in order not to lose its last power base in the Middle East. These two ends obviously justify the means – and the means is genocide. The Israeli attack on Hezbollah in Lebanon has already begun and so there is ever less in the way of a burning Middle East.

Finally, they are also trying to provoke a conflict over Taiwan – a conflict that would be fought between Chinese and would therefore be a civil war. China’s intention to reach a diplomatic agreement with Taiwan in the next 20 to 30 years – that was the plan – is in jeopardy due to Washington’s aggressive stance.

The behavior of the US is unfortunately typical – the downfall is predetermined, the facts and figures in this article prove it. Whether the smouldering fires already blazing in American society will bring about a change and whether they will be aggressive or more balanced cannot yet be guessed. We will have to wait for the presidential elections in the USA, but a lot can still happen between now and November.

For a geopolitician, the world could hardly be more exciting – but for humanity, a little less tension and pressure would be a blessing. After all, people under pressure, especially politicians, have a tendency to make big mistakes.

Tyler Durden Fri, 04/19/2024 - 02:00

N.Y. Gives Trump The Anne Boleyn Treatment

Authored by Richard Porter via RealClear Politics,

Jury selection is underway now complete in the case of The People of the State of New York vs. Donald J. Trump, which alleges that the defendant lied to his own check register, and lied to the general ledger of his own company, when the invoice given to him by his lawyer was paid and recorded by someone else, and that the misstatement he made to himself in his own records was done “with the intent to defraud and intent to commit another crime and aid and conceal the commission thereof.”

It is often noted that this is the first time that a former U.S. president is being tried for a crime, although Ulysses S. Grant may (or may not) have been cited for speeding in his carriage. The federal government chose not to prosecute Bill Clinton, who lied under oath during a sexual harassment lawsuit and then dissembled again about sex before a grand jury. Clinton lost his law license, settled the case on unfavorable terms, and was sanctioned by both federal and Arkansas state courts.

So, this is a first. And let’s be honest about who is doing what to whom and why.

The prosecutor elected in New York County of New York state indicted Trump, after Trump announced his 2024 run for president, for allegedly violating New York Penal Laws 175.05 and 175.10 seven years ago.

That local prosecutor, Alvin Bragg, is a member of the Democratic Party – and the voters who elected Bragg and from whom the jury will be chosen support the Democratic Party. In 2016, the people of New York County voted 87% for Hillary Clinton and 10% for Donald Trump, and in 2020, 87% for Joe Biden and 12% for Donald Trump. In other words, the jury pool is chosen from one of the most partisan jurisdictions in the country – a place where almost all the judges are Democrats as well.

So the Democratic prosecutor elected in the second most Democratic county in the United States will try the former Republican president and current putative Republican Party presidential nominee before a Democrat-appointed judge and a jury drawn from a pool 87% of whom voted against him (and who are being asked if they watch Fox News or listen to talk radio in the screening process).

One wonders if the law even matters. But let’s review the two statutes at issue to highlight what the law requires the prosecution to prove. First, the prosecutor must prove that Trump violated the relevant statute, which requires a finding that he falsified business records with intent to defraud – that he “makes or causes a false entry in the business records of an enterprise.”

By the way, falsifying business records in the second degree is a misdemeanor, not a felony. Moreover, New York’s statute of limitations requires that misdemeanor prosecutions be commenced within two years of the commission of the act, meaning that under the last provision, this case should never have been filed.

Bragg elevated this misdemeanor into a felony by including New York  Penal Law 175.10 in the indictment – falsifying business records in the first degree. That statute reads this way:

“A person is guilty of falsifying business records in the first degree when he commits the crime of falsifying business records in the second degree, and when his intent to defraud includes an intent to commit another crime or to aid or conceal the commission thereof.”

There are other obvious difficulties with this case beyond the credibility of the witnesses (a porn star who denied any affair numerous times and a disbarred lawyer convicted of perjury).

For example, why does the entry in the check register or the general ledger matter at all? When would those entries, as opposed to the allegedly false invoices, be shown to anyone for any nefarious purpose? And were the entries even false? Was there any intent to fool someone to obtain something in making the entries – who was the target of the allegedly false entry in private books and records? If there’s no mark, no victim, then how could there be an “intent to defraud”? Defraud whom? And what is the other crime that the person making the book entry intended to commit or hide? If the other crime is not a New York crime but a federal crime, does every county prosecutor in the United States, including Alvin Bragg, have the jurisdiction to enforce an alleged federal crime indirectly through a state crime?

We shall see.

The political nature of this trial is obvious, and unprecedented in the United States. Even with irrefutable DNA evidence that Bill Clinton committed perjury, the special prosecutor declined to press criminal charges against him. In America’s recent past, prosecutors tended to exhibit a modicum of restraint. Those days are apparently gone.

I reviewed an interesting law review article of political show trials down through history, from the trial of Socrates in Athens to the famous show trials in the 1930s Stalinist Soviet Union, curious to see if I could find historical precedent for this trial.

The closest precedent is probably Anne Boleyn’s trial for adultery in 1536. It was about sex, the trial was in a hostile jurisdiction controlled by her accuser, and the whole point of the exercise was to lop off the head of someone who stood in the way of the regime’s continuity. But that’s what Democrats have lusted for since Donald Trump first arrived on the scene, isn’t it? They made no secret of it.

Richard Porter is a lawyer in Chicago and National Committeeman to the RNC from Illinois.

Tyler Durden Thu, 04/18/2024 - 23:40

FBI Repatriates Revolutionary War-Era Firearms At Philadelphia's Museum Of The American Revolution

The FBI announced the return of several Revolutionary War-era firearms during a repatriation ceremony at Philadelphia's Museum of the American Revolution last week, according to CBS.

These guns, stolen in the 1960s and 1970s from around Valley Forge Park, were recovered following a lengthy investigation involving the FBI's Art Crime Team, the Department of Justice, and the Upper Merion Township Police Department. The agency is now seeking public assistance to locate more missing artifacts.

Special Agent Jake Archer, a member of the FBI's Art Crime Team said: "We were all committed to seeing justice — not just bringing the objects back home, but seeking a proper prosecution of those who perpetrated these crimes."

CBS reported that in 2009, an investigation was triggered when a tipster informed Upper Merion Township police about a gun, suspected of being stolen, seen at a local antique show. Although it turned out not to belong to the Valley Forge collection, this tip led detectives to probe the thefts more deeply.

They collaborated with the Museum of the American Revolution, which now holds the collections previously managed by the dissolved Valley Forge Historical Society, and obtained a list of missing items.

As the investigation unfolded, Michael Corbett, Scott Corbett, and Thomas Gavin admitted to stealing items from Valley Forge Park and the Valley Forge Historical Society, according to the FBI. They assisted investigators in locating some of the stolen artifacts.

The collaborative effort expanded to include the FBI's Art Crime Team, and together, they pursued leads on the thieves and the artifacts. Currently, the search continues for ten items: four firearms stolen on October 24, 1968, from Valley Forge and six other items taken from different locations.

The museum is actively working to refine the descriptions of the missing objects to include more distinctive details that may jog public memory, hoping that some artifacts might have been inherited unknowingly by individuals. The FBI and other involved agencies are still seeking public assistance to recover these pieces.

Scott Stephenson, president and CEO of the Museum of the American Revolution, concluded: "The fact is, the vast majority of people want to do the right thing."

You can see photos and descriptions of the missing items on the FBI website.

Tyler Durden Thu, 04/18/2024 - 23:10

"This Is Too Stupid For It Not To Be The Plan" Holter Hammers Globalist Agenda 'Driving America Into A Brick Wall'

Via Greg Hunter’s USAWatchdog.com,

Back in February, when everyone was predicting a Fed rate cut, precious metals expert and financial writer Bill Holter said rates would be going up and not down.  Since that call, the 10-Year Treasury is up more than 30 basis points.  It closed today at 4.67%.  Now, Holter is still calling for higher interest rates that will coincide with higher gold and silver prices. 

Why?  It’s called inflation, and it’s not temporary. 

Holter explains, “Foreigners are backing away from buying Treasuries..."

"That is the only thing that has kept the doors open, so to speak, is the fact we are able to borrow an unlimited amount of money because we are the world reserve currency. 

Foreigners backing away from our debt is going to lead the Federal Reserve to be the buyer of last, and then, only resort.  So, you will have direct monetization between the Fed and the Treasury. 

What that will cause is a currency that declines in purchasing power.  It will decline in a big way, and it will decline rapidly. 

So, what I am describing is inflation that turns into hyperinflation.”

But that is not the end of our problems.  Holter points out, “I do think it is going to get worse, and that means interest rates will go higher, and that will put on much more pressure..."

"  We are at 4.65% on the 10-Year Treasury now.  We went from 3.75% to 4.65% (in a short amount of time).  We run through 5% on the 10-year Treasury, and everything blows up. . . . The bottom line here is we are at the end game of a fiat currency.  Young people have never experienced high inflation. . . . Where we are this time around, Paul Volker (Fed Head in 1979) was able to raise rates to 16% or 17% and crush inflation.  He was able to do that because there was not a ton of debt.  The U.S. debt back in 1980 was 35% of GDP.  Now, it is 125% plus debt to GDP.  If you raise rates to 6% to 8%, you will blow up the entire system because much of this debt was put on during the 1% to 3% interest rate time. . . . The inflation is going to push rates higher no matter what the Fed says.”

Gold is hitting one new record high after another.  It’s not greed, but fear, and Holter says:

“Big money is buying gold because they are looking for protection.”  

The other wild card is war, and Holter says, “War is a way to keep the system propped up.”

In closing, Holter contends, what you are seeing is not a series of mistakes by incompetent people.  Holter says,

“This is too stupid for it not to be the plan. . . .This is not a Republican or Democrat thing.  We are being steered directly into a brick wall because the globalists can’t take over the world with the US standing. 

They have to take the US down, and if they take the US down, so will the western financial system fall.  If that happens, the globalists can have their way.”

Bill also added that according to his former business partner, Jim Sinclair (who died in October of 2023) said at some point gold will start a rally that you never sell. 

Holter thinks the rally in gold and silver going on now is the rally Sinclair was talking about years ago.

There is much more in the 46-minute interview.

Join Greg Hunter as he goes One-on-One with financial writer and precious metals expert Bill Holter for 4.16.24.

*  *  *

To Donate to USAWatchdog.com Click Here.

Bill Holter’s new website is still growing, and it is totally free.  It’s called BillHolter.com.

Tyler Durden Thu, 04/18/2024 - 22:40

Moar Power: White House Considers Invoking "Unprecedented" Climate Emergency

How best to grab power when there's no convenient emergency to use as excuse? Invent one!

That's right: if you had 'climate emergency' on your 'list of disasters to prompt mail-in balloting' bingo card, you may soon be able to cross that square off. That's because the Biden administration is reportedly renewing discussions "about potentially declaring a national climate emergency," according to Bloomberg. 

Such an "unprecedented" declaration could "unlock federal powers to stifle oil development", among other things, the report says. 

Bloomberg reports, according to sources who requested anonymity as a final decision has not been reached, top advisers to President Joe Biden are reconsidering the possibility of declaring the emergency.

This action could lead to restrictions on crude exports, a suspension of offshore drilling, and a reduction in greenhouse gas emissions, sources say.

Within the White House, opinions are split on this issue. Some advisers believe that declaring a climate emergency wouldn't grant Biden sufficient new powers to enact significant changes. Others, however, contend that it could energize voters who prioritize climate issues.

“President Biden has treated the climate crisis as an emergency since day one and will continue to build a clean energy future that lowers utility bills, creates good-paying union jobs, makes our economy the envy of the world and prioritizes communities that for too long have been left behind,” said White House spokesperson Angelo Fernandez Hernandez.

Historically, U.S. presidents, including former President Donald Trump, have declared national emergencies for various reasons. A climate emergency declaration would be unprecedented and likely face legal challenges.

The Biden administration considered this in 2022 amidst a deadlock on clean-energy legislation, but shelved the idea after the Inflation Reduction Act passed. Last year, President Biden said he had effectively used his authority for climate action by imposing conservation and clean-energy measures, and this year he halted new natural gas export licenses.

Environmental groups, however, are pushing for more aggressive actions. Emergency declarations could allow the president to halt crude exports, suspend offshore drilling, and restrict oil and gas transportation.

Youth environmental organizations like the Sunrise Movement, Fridays For Future USA, and the Campus Climate Network are planning Earth Day protests to demand that Biden declare a national climate emergency.

Aru Shiney-Ajay, the Sunrise Movement’s executive director, said Biden must "use every tool at his disposal to tackle the climate crisis and prepare our communities to weather the storm" of "another summer of floods, fires, hurricanes and extreme heat". 

Tyler Durden Thu, 04/18/2024 - 22:10

Conservatives Call For House Hearing On Google Gemini Ahead Of 2024 Election

Authored by Eric Lundrum via American Greatness,

Conservative activists have been calling for the House GOP to hold congressional hearings regarding the threat of Google Gemini, Google’s artificial intelligence (AI) program, and its left-wing biases ahead of the 2024 election.

As reported by Just The News, a letter signed by multiple conservative groups was sent to Congressman Jim Jordan (R-Ohio), Chairman of the House Judiciary Committee, this week demanding that Congress take action to investigate possible collusion between Big Tech platforms such as Google and the Biden White House.

“With President Trump the decisive favorite to win in November, it’s clear that Big Tech giants will try to pull the same tricks as last time to throw the election to the Democrats,” the letter reads in part.

“Unfortunately, as tech giants ramp up their crusade against Trump ahead of the 2024 election, 15 new technologies like generative AI will give them even more powerful tools to boost Democrats’ electoral prospects than four years prior,” the letter continues.

“[I]t’s more important than ever for Republicans in Congress to scrutinize Google’s monopolistic AI efforts, particularly given the threat it could pose to election integrity in 2024 and beyond.”

The letter was signed by the leaders of six conservative groups: The New York Young Republican Club, the Bull Moose Project, the American Principles Project, Citizens for Renewing America, American Accountability Foundation Action, and the National Constitutional Law Union.

Jordan has previously ordered Big Tech companies to hand over documents regarding their communication with the Biden Administration, as well as any influence the White House may have had over Google’s development of Gemini.

In addition, the Biden Administration has been hit with multiple lawsuits over its efforts to coerce social media companies into censoring conservative viewpoints, particularly regarding the Chinese Coronavirus and widespread voter fraud in the 2020 election.

Tyler Durden Thu, 04/18/2024 - 21:40

Biden Wins Endorsement Of Kennedy Family Members

Authored by Emel Akan and Jeff Louderback via The Epoch Times (emphasis ours),

President Joe Biden on April 18 traveled to Philadelphia, the final stop of his three-day tour of the crucial battleground state, where he received the Kennedy family’s endorsement for his reelection campaign.

President Joe Biden speaks during a campaign event at Martin Luther King Recreation Center in Philadelphia, Penn., on April 18, 2024. (Drew Hallowell/Getty Images)

More than 15 members of the Kennedy family, who had previously criticized Robert F. Kennedy Jr.’s independent bid for the White House, endorsed President Biden at a campaign event in Philadelphia.

Speaking at the event, Kerry Kennedy, the sister of RFK Jr. and Robert F. Kennedy’s seventh child, praised President Biden, stating that reelecting him is the best way forward for the country.

“President has been a champion for all the rights and freedoms that my father and uncle stood for. That’s why nearly every single grandchild of Joe and Rose Kennedy supports Joe Biden,” Ms. Kennedy said.

“In 2024, there are only two candidates with any chance of winning the presidency,” she added.

Speaking at the event, President Biden thanked the family members for the endorsement.

Six of RFK Jr.’s siblings stood alongside President Biden on stage at the Martin Luther King Recreation Center in Philadelphia.

“I don’t want to become emotional. What an incredible honor to have the support of the Kennedy family,“ President Biden said. ”Most meaningful introduction I’ve ever gotten in my life.”

RFK, Jr. entered the presidential race in April last year, challenging President Biden for the Democratic Party nomination.

After encountering multiple hurdles by the DNC and accusing the organization of “rigging the primary” and not allowing any candidate to compete against President Biden, Mr. Kennedy announced he would run as an independent in October 2023.

Many believe Mr. Kennedy’s third-party challenge threatens President Biden more than former President Trump.

In the RealClearPolitics average of polls as of April 17, President Trump leads with 41 percent, followed by President Biden (35.7 percent), and Mr. Kennedy (11.7 percent).

Multiple times on the campaign trail, Mr. Kennedy has pointed out that he has more than 100 family members and said that many of them are working on his campaign.

Amaryllis Fox Kennedy, his daughter-in-law, is his campaign manager.

RFK Jr. responded in a social media post to his family members’ endorsement of President Biden.

“I hear some of my family will be endorsing President Biden today. I am pleased they are politically active—it’s a family tradition,” Mr. Kennedy wrote on X on April 18. “We are divided in our opinions but united in our love for each other.”

During a recent interview with CNN, Mr. Kennedy criticized President Biden, saying he is a bigger threat to democracy than President Trump.

“I can make the argument that President Biden is the much worse threat to democracy, and the reason for that is President Biden is the first candidate in history—the first president in history that has used the federal agencies to censor political speech, so to censor his opponent,” Mr. Kennedy said.

In March, the DNC announced the creation of a team to counter third-party and independent presidential candidates.

It hired Lis Smith, a veteran Democrat strategist who managed Pete Buttigieg’s unsuccessful 2020 presidential campaign, to spearhead an aggressive communication plan to combat Mr. Kennedy, independent Cornel West, and Green Party nominee Jill Stein.

In October 2023, Mr. Kennedy’s sister, Rory Kennedy, called her brother’s campaign “dangerous” in a post on X.

“I feel strongly that this is the most important election of our lifetime, and there’s so much at stake. And I do think it’s going to come down to a handful of votes in a handful of states.

“And I do worry that Bobby just taking some percentage of votes from Biden could shift the election and lead to Trump’s election,” she told CNN in March when asked about her comment.

Campaign Events in Pennsylvania

President Biden traveled to Pennsylvania this week for a three-day tour of the battleground state, starting with a campaign event in his hometown of Scranton on April 16.

In Scranton, the president highlighted a contrast between his economic agenda and that of his 2024 presidential rival and predecessor, former President Trump.

He also reiterated his push to raise taxes on the rich and big corporations.

“Folks, where we come from matters. When I look at the economy, I don’t see it through the eyes of Mar-a-Lago; I see through the eyes of Scranton,” President Biden said.

On April 17, President Biden traveled to Pittsburgh, where he announced dramatically higher tariffs on steel and aluminum imports from China, a move likely aimed at pleasing blue-collar voters in the battleground state.

With 19 crucial electoral votes, the state is a key focus for the Biden campaign.

The campaign says it believes it has a clear advantage in Pennsylvania for the 2024 election, and is making significant investments in key voter groups, including black and Latino communities in the state.

Last month, for example, the campaign opened 14 offices in a single week, enlisted 1,700 volunteers, and formed key coalitions around the state to reach out to various demographics.

The campaign has seven offices in Philadelphia to mobilize voters and ensure a high turnout in November.

“In contrast, the Trump campaign still has no public presence—and across Pennsylvania, local media have reported there are no signs of the Trump campaign.

“The RNC was even forced to scrap plans to open a minority outreach office in Allentown, Pennsylvania,” the Biden campaign said in a statement.

Tyler Durden Thu, 04/18/2024 - 19:40

America's Confused Commander-In-Chief Warns Israel Against Attacking Israel

While Democratic strategists have long tried to downplay and dismiss President Biden's obvious age and cognitive issues—which have been on continual display of late—he has just made fresh comments which illustrate the dangers of these persistent issues for the Commander-in-Chief and for the nation at a moment the Middle East stands on the brink of major war.

The 81-year-old president said in an interview with Nexstar Media’s Reshad Hudson that he is urgently trying to de-escalate tensions centering on Gaza and Iran, following Iran's Saturday night unprecedented attack on the Jewish state. That's when he explained that he urged Israel to exercise restraint, and in his words he "made it clear to the Israelis: don’t move on Haifa." Watch below:

According to Biden, he is pressuring the Israelis not to attack “Haifa”. Leader of the free world, ladies and gents pic.twitter.com/SeZJPfaJAS

— Jake Wallis Simons (@JakeWSimons) April 18, 2024

He then began immediately mumbling: "It’s Just Not, I Mean, Anyway..." - and trailed off, apparently losing his train of thought before moving on to speak about the Saturday Iranian ballistic missile and drone attack on Israel.

Biden was apparently intending to refer to Rafah in the comments, which is the Palestinian city in the far southern Gaza Strip, and not the third largest city in Israel. The Netanyahu government has for weeks said it is preparing to move militarily on the refugee-packed enclave. 

The US is worried that an IDF ground offensive will trigger further regional escalation, including the potential for attacks on American bases from Iran-backed militias in Iraq and Syria.

But the obvious question is: will Israeli leaders really taking Washington's stance seriously when they hear the American president, or "leader of the free world," warning Israel not to attack a city in Israel?

If Biden can't distinguish Gaza's Rafah from Israel's Haifa, then certainly we can expect to see many more of these consequential gaffes if he gets into office another four years.

Tyler Durden Thu, 04/18/2024 - 19:20

Soros Nonprofit Gives 8-Figure Sum To Far-Left Super PAC

Authored by Eric Lundrum via American Greatness,

One of the many nonprofits run by far-left billionaire George Soros donated tens of millions of dollars to a major super PAC that funds multiple left-wing groups.

According to Fox News, Federal Elections Commission (FEC) records posted Monday reveal that the Fund for Policy Reform gave $60 million to the Democracy PAC in the first quarter of 2024; the Democracy PAC subsequently sent $21 million to Democratic committees in support of various congressional candidates in both the House and the Senate.

The $21 million was dispersed among a dozen left-wing groups, with $8 million being split two ways between top outside groups in support of House and Senate Democrats.

Additionally, $2.5 million was donated to Planned Parenthood, as well as another $2.5 million to BlackPAC, and $1.8 million to American Bridge, a Democratic opposition research firm.

Other donations included $1 million to the ColorOfChange PAC and $500,000 to Americans for Contraception Victory.

ColorOfChange is one of the most radical groups when it comes to the far-left “defund the police” agenda.

“We know that policing doesn’t keep us safe, communities do,” the group said in a petition demanding that supporters harass politicians to get them to support the defunding movement.

“Policing doesn’t lead to thriving communities, investment does.”

The massive $60 million dump was the second-largest donation in the 2024 election cycle thus far, only surpassed by the $82.6 million that was donated by a state super PAC to Never Back Down, the super PAC that backed the doomed presidential campaign of Governor Ron DeSantis (R-Fla.).

The 93-year-old George Soros recently handed full control of his political empire to his son, Alex, and Alex’s subsequent moves have been watched closely.

The younger Soros shows no signs of slowing down his family’s influence over left-wing politics both in America and globally, continuing to pour millions into far-left causes that undermine the security of the United States of America, including pro-amnesty and pro-open borders groups, as well as backing progressive district attorneys who refuse to enforce basic laws.

In response, Musk is gathering signatures...

Given the relentless attacks on free speech, I am going to fund a national signature campaign in support of the First Amendment

— Elon Musk (@elonmusk) April 18, 2024

Tyler Durden Thu, 04/18/2024 - 19:00

Inside The Disinformation Industry

Authored by Freddie Sayers via UnHerd.com,

“Our team re-reviewed the domain, the rating will not change as it continues to have anti-LGBTQI+ narratives…

The site authors have been called out for being anti-trans. Kathleen Stock is acknowledged as a ‘prominent gender-critical’ feminist.”

This was part of an email sent to UnHerd at the start of January from an organisation called the Global Disinformation Index. It was their justification, handed down after a series of requests, for placing UnHerd on a so-called “dynamic exclusion list” of publications that supposedly promote “disinformation” and should therefore be boycotted by all advertisers.

They provided examples of the offending content: Kathleen Stock, whose columns are up for a National Press Award this week, Julie Bindel, a lifelong campaigner against violence against women, and Debbie Hayton, who is transgender. Apparently the GDI equates “gender-critical” beliefs, or maintaining that biological sex differences exist, with “disinformation” — despite the fact that those beliefs are specifically protected in British law and held by the majority of the population.

The verdicts of “ratings agencies” such as the GDI, within the complex machinery that serves online ads, are a little-understood mechanism for controlling the media conversation. In UnHerd’s case, the GDI verdict means that we only received between 2% and 6% of the ad revenue normally expected for an audience of our size. Meanwhile, neatly demonstrating the arbitrariness and subjectivity of these judgements, Newsguard, a rival ratings agency, gives UnHerd a 92.5% trust rating, just ahead of the New York Times at 87.5%.

So, what are these “ratings agencies” that could be the difference between life and death for a media company? How does their influence work? And who funds them? The answers are concerning and raise serious questions about the freedom of the press and the viability of a functioning democracy in the internet age.

Disinformation only really became a discussion point in response to the Trump victory in 2016, and was then supercharged during the Covid era: Google Trends data shows that worldwide searches for the term quadrupled between June and December 2016, and had increased by more than 30 times by 2022. In response to the supposed crisis, corporations, technology companies and governments all had to show they were taking some form of action. This created a marketplace for enterprising start-ups and not-for-profits to claim a specialism in detecting disinformation. Today, there are hundreds of organisations who make this claim, providing all sorts of “fact-checking” services, including powerful ratings agencies such as GDI and Newsguard. These companies act as invisible gatekeepers within the vast machinery of online advertising.

How this works is relatively straightforward: in UnHerd’s case, we contract with an advertising agency, which relies on a popular tech platform called “Grapeshot”, founded in the UK and since acquired by Larry Ellison’s Oracle, to automatically select appropriate websites for particular campaigns. Grapeshot in turn automatically uses the “Global Disinformation Index” to provide a feed of data about “brand safety” — and if GDI gives a website a poor score, very few ads will be served.

The Global Disinformation Index was founded in the UK in 2018, with the stated objective of disrupting the business model of online disinformation by starving offending publications of funding. Alongside George Soros’s Open Society Foundation, the GDI receives money from the UK government (via the FCDO), the European Union, the German Foreign Office and a body called Disinfo Cloud, which was created and funded by the US State Department.

Perhaps unsurprisingly, its two founders emerged from the upper echelons of “respectable” society. First, there is Clare Melford, whose biography published by the World Economic Forum states that she had previously “led the transition of the European Council on Foreign Relations from being part of George Soros’s Open Society Foundation to independent status”. She set up the GDI with Daniel Rogers, who worked “in the US intelligence community”, before founding a company called “Terbium Labs” that used AI and machine learning to scour the internet for illicit use of sensitive data and then sold it handsomely to Deloitte.

Together, they have spearheaded a carefully intellectualised definitional creep as to what counts as “disinformation”. Back when it was first set up in 2018, they defined the term on their website as “deliberately false content, designed to deceive”. Within these strict parameters, you can see how it might have appeared useful to have dedicated fact-checkers identifying the most egregious offenders and calling them out. But they have since broadened the definition to encompass anything that deploys an “adversarial narrative” — stories that may be factually true, but pit people against each other by attacking an individual, an institution or “the science”.

GDI founder Clare Melford explained in an interview at the LSE in 2021 how this expanded definition was more “useful”, as it allowed them to go beyond fact-checking to targeting anything on the internet that they deem “harmful” or “divisive”:

“A lot of disinformation is not just whether something is true or false — it escapes from the limits of fact-checking. Something can be factually accurate but still extremely harmful… [GDI] leads you to a more useful definition of disinformation… It’s not saying something is or is not disinformation, but it is saying that content on this site or this particular article is content that is anti-immigrant, content that is anti-women, content that is antisemitic…”

Larger traffic websites are rated using humans, she explains, but most are rated using automated AI. “We actually instantiate our definition of disinformation — the adversarial narrative topics — within the technology,” explains Melford. “Each adversarial narrative is given its own machine-learning classifier, which then allows us to search for content that matches that narrative at scale… misogyny, Islamophobia, anti-Semitism, anti-black content, climate change denial, etc.”

Melford’s team and algorithm are essentially trained to identify and defund any content she finds offensive, not disinformation. Her personal bugbears are somewhat predictable: content supporting the January 6 “insurrections”, the pernicious influence of “white men in Silicon Valley”, and anything that might undermine the global response to the “existential challenge of climate change”.

The difficulty, however, is that most of these issues are highly contentious and require robust, uncensored discussion to find solutions. Challenges to scientific orthodoxy are particularly important, as the multiple failures of the official response to Covid-19 amply demonstrated. Indeed, one of the examples of GDI’s good work that Melford highlighted in her LSE talk was an article on a Spanish website in June 2021 about the Delta variant of Covid-19. “Official data: a third of deaths from the Delta variant in the United Kingdom were among the vaccinated,” reads the headline, next to an advertisement for Chipotle Mexican Grill. “This is clearly untrue,” she said breezily, “and Chipotle has been caught next to this ad unwittingly, and unfortunately for them have funded this highly dangerous disinformation about vaccines”.

This was, however, far from an accurate description. The statistic being reported comes from a June 2021 Public Health England report into Covid variants that sets out the 42 known deaths from the Delta variant from January to June: 23 were unvaccinated, 7 vaccinated with one shot and 12 fully vaccinated. In other words, 29% were fully vaccinated — around a third — and 17% partially vaccinated, making a total of 45% vaccinated. The headline claiming a third were vaccinated, it turns out, was not spreading “dangerous disinformation” at all — if anything, it underplayed the story.

Examples like this are far from rare. The GDI still hosts an uncorrected 2020 blog about the “evolution of the Wuhan lab conspiracy theory” surrounding Covid-19’s origins, which concludes that “cutting off ads to these fringe sites and their outer networks is the first action needed”.

This is despite the fact that Facebook and other tech companies long ago corrected similar policies and conceded that it was a legitimate hypothesis that should never have been censored.

In the US, a number of media organisations have started to take action against GDI’s partisan activism, prompted by a GDI report in 2022 that listed the 10 most dangerous sites in America. To many, it looked simply like a list of the country’s most-read conservative websites. It even included RealClearPolitics, a well-respected news aggregator whose polling numbers are among the most quoted in the country. The “least risk of disinformation” list was, predictably enough, populated by sites with a liberal inclination.

In recent months, a number of American websites have launched legal challenges against GDI’s labelling system, which they claim infringes upon their First Amendment rights. In December, The Daily Wire and The Federalist teamed up with the attorney general of Texas to sue the state department for funding GDI and Newsguard. A separate initiative to prevent the Defense Department from using any advertiser that uses Newsguard, GDI or similar entities has been successful, and is now part of federal law.

But GDI is a British company and, on this side of the Atlantic, the Conservative Government continues to fund it. A written question from MP Philip Davies last year revealed that £2.6 million was given in the period up to last year, and that there is still “frequent contact” between the GDI and the FCDO “Counter Disinformation and Media Development” unit.

Yesterday, I was invited to give evidence to the House of Lords Communication and Digital Committee during which I outlined the extent of the threat to the free media of self-appointed ratings agencies such as the Global Disinformation Index. The reality, as I told Parliament, is that GDI is merely the tip of the iceberg. At a time when the news media is so distrusted and faces a near-broken business model, the role of government should be to prevent, not encourage, and most certainly not fund, consolidations of monopoly power around certain ideological viewpoints.

But this isn’t simply a matter for the media. Both companies and those in the advertising sector also need to act: it cannot be good marketing for brands to target only half the population. Last year, Oracle announced it was cutting ties with GDI on free speech grounds, but as we discovered, it seems they are still collaborating via the Grapeshot plaform: is Larry Ellison aware of this?

At its heart, the disinformation panic is becoming a textbook example of how a “solution” can do more harm than the problem it is designed to address. Educated campaigners such as Clare Melford may think they are doing the world a service, but in fact they are acting as intensifying agents, lending legitimacy to a conspiratorial world view in which governments and corporations are in cahoots to censor political expression. Unless something is done to stop them, they will continue to sow paranoia and distrust — and hasten us towards an increasingly radicalised and divided society.

Tyler Durden Thu, 04/18/2024 - 17:40

"We Have Our Jury": All 12 Jurors Seated For Trump Trial

Update (1705ET): All 12 jurors have been selected for Trump's NY hush money trial following the dismissal of two people earlier in the day.

Former President Donald Trump gestures as he returns from a recess in his trial for allegedly covering up hush money payments linked to extramarital affairs, at Manhattan Criminal Court in New York City on April 18, 2024. (Brendan McDermid/Pool/AFP via Getty Images)

As part of the process, dozens of jurors were almost immediately excused after admitting they couldn't be fair or impartial during the trial (and the rest lied, of course).

"We have our jury," said Judge Juan Merchan, after the 12th juror was selected. As The Hill notes:

One primary juror is originally from Lebanon and retired.

Another lives on the Upper East Side and said while she does “have opinions,” she does “firmly believe I can be fair and impartial.”

A third was born in Ohio and works in e-commerce. The fourth is from California and just watches “late night news.” And the fifth is a physical therapist who listens to podcasts related to sports and faith.

The first of six alternate jurors was also selected. She is a woman who grew up in England and Hong Kong.

There are five alternates left to select.

Let the games begin!

*  *  *

Authored by Chase Smith via The Epoch Times (emphasis ours),

A second juror who was seated on the jury for former President Donald Trump in the Manhattan ‘Hush-Money’ Trial earlier this week was excused on Thursday, after prosecutors said that someone with the same name was arrested in the 90s for “tearing down political advertisements.”

The Associated Press also reported that this juror, an IT consultant who previously described President Trump as “fascinating and mysterious,” failed to disclose his wife was allegedly a previous participant in a corruption inquiry by the Manhattan district attorney’s office.

Earlier in the day, a juror was dismissed after saying she had concerns about her ability to be fair and impartial and had concerns about her identity being made public.

The two were sworn in earlier in the week with five others, including one alternate, on the second day of the trial.

The two dismissals by New York Supreme Court Justice Juan Merchan reduce the number of seated jurors to five. A total of 18 jurors need to be seated before the trial begins, six of which will be alternates.

AP described the scene in the Manhattan courtroom on Thursday morning as “frenetic,” as prosecutors also asked the judge to hold President Trump in contempt of court over social media posts they claim violated a gag order by Judge Merchan.

Second Dismissal

The second dismissal Thursday came when prosecutors raised concerns the juror may have not been forthcoming during jury selection when a question was asked whether he had ever been accused of or convicted of a crime, AP reported.

The juror was summoned to the court to answer questions after an article was found regarding a person with the same name being arrested in the 1990s for tearing down political campaign signs supporting conservative candidates in Westchester County, a suburban county of New York.

The prosecution also disclosed the man’s wife may have been involved in a deferred prosecution agreement with their office, also in the 1990s.

AP reported that the questions by Judge Merchan were “off-microphone” and thus his responses to the judge’s questions were not fully known, along with whether or not he confirmed or denied the allegations were indeed connected to him.

Thursday’s events bring a roadblock to an already difficult task of finding enough jurors to seat in the largely liberal Manhattan jury pool who are found to be able to decide President Trump’s fate fairly and impartially.

Inside the court, there’s broad acknowledgment of the futility in trying to find jurors without knowledge of Trump. A prosecutor this week said that lawyers were not looking for people who had been “living under a rock for the past eight years.”

But Thursday’s events laid bare the inherent challenges of selecting a jury for such a landmark, high-publicity case. More than half the members of a group of 96 prospective jurors brought into the courtroom were dismissed Thursday, most after saying they doubted their ability to be fair and impartial.

Earlier Dismissal

Early in the morning, Judge Merchan reported that the woman also known as “Juror 2” had slept on the decision to sit on the jury overnight and informed the court she wished to be dismissed.

She was brought into the room and said after thinking about it, she has friends, colleagues, and family that “push things” and outside influences that would likely affect her impartiality. She added that she had been identified as a juror from news reports.

The juror, an oncology nurse, said her family and friends had questioned her about whether or not she was a juror based on media reports. The judge in turn ordered journalists to refrain from publishing information about the juror’s current and prior jobs.

Justice Merchan said, “As evidenced by what’s happened already, it’s become a problem,” according to AP. The answers also will be redacted from court transcripts.

Prosecutors additionally asked for the employer question to be removed from the questionnaire for jurors, while the judge disagreed with the argument and said it was necessary information.

Other Developments

Also in court on Thursday, prosecutors asked for the 45th president to be held in contempt for what they said were social media posts that violated a gag order that bars him from attacking witnesses.

Those posts, prosecutors argued, included an article referring to witness and former Trump attorney Michael Cohen as a serial perjurer and another by a Fox News personality that liberals were disguising their true motives to be seated on the jury.

Mr. Trump’s attorney said that Mr. Cohen had attacked his former boss in public and the president was replying to those attacks.

On Monday, when Justice Merchan asked 96 prospective jurors if they couldn’t be fair and impartial in the trial, more than half of them raised their hands. They were then dismissed.

The Case

The legal case against President Trump involves an alleged $130,000 payment made by his former lawyer, Michael Cohen, to adult performer Stephanie Clifford, also known as Stormy Daniels, to keep her claims of having an affair with the president from becoming public.

President Trump has pleaded not guilty to the charges, asserting that it’s part of a longstanding and widespread effort to prevent him from being reelected. Earlier this week, President Trump wrote on Truth Social and told reporters that being in court every day will hamper his campaign, noting that he won’t be able to visit potential battleground states with just months to go before the November election.

The trial is expected to last upwards of eight weeks. Of that, the jury selection process could last as long as two weeks, analysts speculate.

The New York case is one of four criminal prosecutions the former president faces. The other cases stem from his alleged mishandling of classified information and activity in challenging the results of the 2020 election.

He has pleaded not guilty to those charges, too, although it’s not clear whether the three cases will make it to trial before November.

The federal election case was placed on hold by a Washington-based judge as the appeals process plays out. In the documents case in Florida, the federal judge has yet to reschedule a new trial date.

In Georgia, the former president has appealed state election-related charges in Fulton County, putting that case on hold. It came amid allegations that the Fulton County district attorney, Fani Willis, engaged in inappropriate behavior that the defendants say should have led to her dismissal.

Jack Phillips and The Associated Press contributed to this article.

Tyler Durden Thu, 04/18/2024 - 17:05

The Great Freight Recession Has Now Lasted Longer Than The COVID Bull Market

By Greg Fuller, CEO of FreightWaves

On March 31, 2022, FreightWaves declared that a freight recession was imminent. More than two years later, the freight market remains in one of its deepest and longest recessions in history.

The trucking industry is asking, “How much longer is the market going to remain in a recession?” (Photo: Jim Allen/FreightWaves)

Our original conclusion was derived from signals from FreightWaves SONAR. Its high-frequency datasets, which track freight supply and demand in real-time, indicated an imminent collapse. When FreightWaves first published the article, many were not only skeptical of the conclusion, they derided FreightWaves for the call. Even after the recession took hold, few would have guessed that the freight downturn would be as deep or as long as it has been.

As we enter the third year of the Great Freight Recession, the trucking industry asks, “How much longer is the market going to remain in a recession?”

We believe that we are now at the bottom of the market.

SONAR’s Outbound Tender Rejection Index, or OTRI, measures the percentage of truckload transactions rejected by carriers. OTRI indicates that conditions are better than they were a year ago, albeit not by much.

Tender rejections are a highly reliable indicator of the balance of supply and demand. The higher the rejection rate, the more load options a carrier has. The lower the rate, the fewer load options a carrier has. While some will look at the absolute value of tender rejections, we also look at them in the context of where they have been.

Tender rejections are currently at 3.95%, up from the 2024 low of 3.39 on March 26 and up substantially from 2.88% a year ago.

The Outbound Tender Rejection Index. To learn more about FreightWaves SONAR, click here

We believe that tender rejections bottomed out in late March and have steadily increased throughout April, which is historically a soft month in freight. This indicates that the 2024 low is in the rearview mirror.

Contracted load accepted volumes, another SONAR index measuring contracted load demand, tell us that the market has grown since January 2023.

As of April 15, 2024, year-over-year contracted volumes are up 9%.

Contract accepted volumes are currently down 6% compared to April 2021, the peak of the COVID bull run.

Contract Load Accepted Volume. To learn more about FreightWaves SONAR, click here

While a gap certainly exists between peak volumes and current volumes, the gap is narrowing. In the past year, contracted load accepted volumes have increased by 9%.

Contract Load Accepted Volume. To learn more about FreightWaves SONAR, click here.

The Atlanta Federal Reserve now forecasts that year-over-year GDP growth is up by 3%. In a normal growing economy, freight demand grows faster than economic growth. If the economy grows above 2% for the year, we expect that contracted load accepted volumes in 2025 will surpass the 2021 peaks.

Capacity will continue to decline

The growth in contracted load accepted volumes will occur at the same time that capacity continues to bleed out of the market.

Another of the many indices in the SONAR platform is the Carrier Details Net Revocation Data, which shows the increase or decline in the number of trucking companies in the market. In the chart below, anything above zero (green) shows an expansion in the number of trucking authorities, while anything below zero (red) shows a decline.

To learn more about FreightWaves SONAR, click here.

The index has been in negative territory since the fourth quarter of 2022. Capacity continues to leave the market, allowing the market to return to balance.

During the two years of the freight market’s COVID bull run, fleets built up substantial operating surpluses and were able to build strong balance sheets. This has enabled them to hang on for a long time.

For much of the Great Freight Recession, trucking fleets have been running many of their miles at losses. This has forced them to tap into the financial reserves they built up during the COVID bull run.

The Great Freight Recession has gone on longer than the COVID bull run, meaning that since the first days of the COVID lockdowns, truckers have operated primarily in recessionary territory. For those who remain in the market, their reserves are likely exhausted, as is their stamina.

However, for those who can continue, the tough times may be ending. The data suggests that a recovery in the balance of supply and demand will come as soon as fall 2024, but almost certainly by spring 2025.

Tyler Durden Thu, 04/18/2024 - 17:00

Money-Market Fund Assets See Largest Outflows Since 'Lehman'

Total money-market fund assets plunged by $112BN in the last week as Tax-Day demands took the total assets below $6 Trillion for the first time sine January (to $5.97 Trillion)...

Source: Bloomberg

Corporate taxes collected from April 11 through April 17 totaled $100.7 billion, Treasury data show.

While Tax-Day's impact matters obviously, we note that this is the largest weekly drop in money-market fund assets since Lehman (Sept 2008) and the biggest two-week drop (-$143BN) on record...

Source: Bloomberg

Much of the decline in money-market fund assets was led by institutional outflows that totaled $96.6BN in the week ended April 17 - the largest drawdown since an extended tax-filing deadline in mid-October. Retail investors pulled about $15.5 billion out of money-market funds../.

Source: Bloomberg

In a breakdown for the week to April 17, government funds - which invest primarily in securities like Treasury bills, repurchase agreements and agency debt - saw assets fall to $4.8 trillion, a $99 billion decline. 

Prime funds, which tend to invest in higher-risk assets such as commercial paper, meanwhile, saw assets fall to $1.01 trillion, a $12 billion decline.

Still, cash is expected to continue piling into money funds as long as the Federal Reserve keeps rates on hold - and this week has seen rate-cut expectations tumble further...

Source: Bloomberg

The Fed's balance sheet shrank to its smallest since February 2021...

Source: Bloomberg

As The Fed starts discussing tapering QT and usage of The Fed's bank bailout facility (now expired but these are 12 month term loans) fell by $4.1BN more to basically erase all the late-period arb-driven inflows, leaving a huge $126BN hole in bank balance sheets still being filled by this...

Source: Bloomberg

Finally, we note that bank reserve at The Fed slipped last week as it appears the reality for US equity market cap is starting to dawn...

Source: Bloomberg

While there may be no rate-cuts anytime soon... will The Fed taper QT in a big enough manner to avoid that recoupling?

Tyler Durden Thu, 04/18/2024 - 16:44

Netflix Reports Blowout Q1 Results & Sub Adds, But Warns Gains Will Slow, Will End Reporting Of Quarterly Subs; Stock Slides

After suffering a historic collapse at the end of 2021, when in the span of five months Netflix lost 75% of its value, and when Ackman first bought then immediately dump the stock just around the generational bottom, the company has enjoyed a stellar recovery over the past two year when it rose by nearly 300%, from a low of $166 to a recent high of price of $636, just shy of the record hit in late 2021.

It is therefore not surprising that after this tremendous ascent and nearly 3x return, that both Goldman and UBS agree that Netflix remains a very crowded long with investors very bullish. According to UBS, "the bull thesis continues to revolve around the residual impact of password sharing and they are just scratching the surface on the scale of the ads business" while "the rationalization of content spend and direct-to-consumer efforts from competitors will also be a tailwind for Netflix." Goldman chimes in that positioning and sentiment skew more long - as NFLX’s multiple is approaching multi-year highs - with stock up ~28% YTD and short interest back at 10 year lows.

That said, UBS cautions that stretched positioning and the stock near $620 cause some to pause, but given they are the first one out of the gate, the stock could benefit from investors using it as a safety play.

On the earnings print, investors will be focused on:

1. magnitude of upside to sub net adds
2. pricing updates as estimates are underpinned by price increases eventually hitting;
3. tailwinds from paid sharing and if there are legs left versus already in run rate;
4. updates on scaling in ad business progress into 2H/2025, and consistent message on revenue re-acceleration;
5. updates to margin expectations (~2-3pts y/y annual OM expansion) and spending plans given pullback at peers; and
6. updates on live content/sports strategy.

And here are the main bogeys:

• Q1 Subscriber Adds: 8MM (heard a wide range of estimate - some higher, up to 10MM, some lower, 7-8MM, Goldman expects +7MM)
• Q1 Revenue Growth adjusted for FX: +16-17%
• Q1 Reported Revenue Growth: +14%
• Q1 EBIT: $2.4B, +40% y/y
• Q2 Subscriber Adds: 4M
• Q2 Revenue Growth adjusted for FX: +17%
• Q2 Reported Revenue Growth: +16%
• Q2 EBIT: $2.4BN
• FY24 Operating Margin: reiterate guide at 24%
• FY24 FCF Guide: $6BN

With that in mind, and considering that options are pricing in a roughly 7% swing after hours today, here is what NFLX reported for its first quarter:

• EPS $5.28, beating the estimate $4.52, and more than double the $2.88
• Revenue $9.37 billion, up a whopping 15% y/y, and beating the estimate $9.26 billion
  • Revenue was above the company's guidance as paid net additions (9.3M vs. 1.8M in Q1’23) were higher than we forecast.
• Streaming paid net change +9.33 million smashed estimates of 4.84 million, were just shy of the highest whisper number of 10 million and were far above the +1.75 million subs added a year ago. This was the best start of the year since 2020!
  • UCAN streaming paid net change +2.53 million vs. +100,000 y/y, beating estimates of +988,580
  • EMEA streaming paid net change +2.92 million vs. +640,000 y/y, beating estimates of +1.58 million
  • LATAM streaming paid net change +1.72 million vs. -450,000 y/y, beating estimates of +837,467
  • APAC streaming paid net change +2.16 million, +48% y/y, beating estimates of +1.48 million
• Operating margin 28.1% vs. 21% y/y, estimate 25.7%
• Operating income $2.63 billion, a whopping +54% increase y/y, and beat estimates of $2.43 billion
• Free cash flow $2.14 billion, +0.9% y/y, and also beat estimate $1.87 billion

Bottom line: Q1 subscriber adds smashed estimates in what was the best Q1 for NFLX since 2020 when the pandemic led to an unprecedented growth surge.

Netflix ended Q1 with total streaming paid memberships of 269.6 million, up 16% y/y, and well above the estimate of 264.52 million. The subs are in line with what it guided last quarter when it said that "paid net additions to be down sequentially but to be up versus Q1’23 paid net adds of 1.8M."

About 40% of Netflix’s new customers are selecting the advertising option in markets where it’s available, the company said. The advertising tier is still minuscule relative to online video giants like YouTube.

Netflix has successfully rebounded from a post-covid slowdown in 2021 and 2022 to grow at its fastest rate since the early days of the coronavirus pandemic. That is due largely to its crackdown on people who were using someone else’s account. The company estimated more than 100 million people were using an account for which they didn’t pay. While executives at Netflix feared a backlash from customers, the company has been able to convince millions of moochers to pay for access.

Looking ahead, for Q2 Netflix sees the following:

• Revenue $9.49 billion, missing the estimate $9.51 billion
• EPS $4.68, beating the estimate $4.54
• Operating margin 26.6%, beating estimate 25.4%

Drilling down into the Q2 forecast reveals:

• revenue growth of 16% which equates to 21% growth on a F/X neutral basis due primarily to price changes in Argentina and the devaluation of the local currency relative to the US dollar.
• paid net additions should be lower in Q2’24 vs. Q1’24 due to typical seasonality
• the company also forecasts global ARM to be up year-over-year on a F/X neutral basis in Q2. This is what the quarterly subs look like historically and vs WS estimates:

For the full year, NFLX sees revenue growth between 13% and 15%, boosted its operating margin outlook to 25%, beating the estimate of 24.1%, and above the 24% expected previously; the company still sees free cash flow about $6 billion, estimate $6.49 billion

And here are the results and projections summarized:

And here is the regional detail: for the third consecutive quarter, EMEA (Europe, the Middle East and Africa) accounted for the largest share of Netflix’s growth in the quarter. The company added almost 3 million customers in that region, following the 5 million added last quarter. The average amount Netflix makes per customer has increased only modestly in the past year, at $16.64, and rising 3%.

Yet despite the blowout numbers this quarter, something bad may be on deck because NFLX reported that starting next year with 1Q 2025 earnings, the company will stop reporting quarterly membership numbers and ARM; to counter that, the company will also start providing annual revenue outlook. Here is the explanation, straight from the quarterly report:

As we’ve noted in previous letters, we’re focused on revenue and operating margin as our primary financial metrics — and engagement (i.e. time spent) as our best proxy for customer satisfaction. In our early days, when we had little revenue or profit, membership growth was a strong indicator of our future potential. But now we’re generating very substantial profit and free cash flow (FCF). We are also developing new revenue streams like advertising and our extra member feature, so memberships are just one component of our growth. In addition, as we’ve evolved our pricing and plans from a single to multiple tiers with different price points depending on the country, each incremental paid membership has a very different business impact. It’s why we stopped providing quarterly paid membership guidance in 2023 and, starting next year with our Q1'25 earnings, we will stop reporting quarterly membership numbers and ARM.

We’ll continue to provide a breakout of revenue by region each quarter and the F/X impact to complement our financials. For guidance, we’ll add annual revenue guidance on top of what we already provide today: our annual operating margin and free cash flow forecast and forecasts for quarterly revenue, operating income, net income, and EPS. We’ll also announce major subscriber milestones as we cross them.

Instead of subs, NFLX - like Musk - plans on providing more details on overall engagement: "we’ve been providing progressively more information on engagement, starting with our Top 10 weekly and most popular lists and more recently our bi-annual report into viewing on Netflix (which covers ~99% of all video watch time on our service). This is more information than any of our competitors provide, and we expect to provide even more over time."

Netflix finished the quarter with gross debt of $14B and cash and cash equivalents of $7B; curiously, it boosted the revolving credit facility to $3 billion from $1 billion. NFLX expects to refinance its upcoming debt maturities and we don’t currently have plans to lever up to buy back stock as we value balance sheet flexibility

Expectations for Netflix’s first quarter had soared in recent days, as one analyst after another published rosy forecasts. Pouring some cold water on expectations, NFLX said subscriber gains will be lower this period, even as revenue will increase 16%, or more than expected.

Netflix also said it will stop reporting paid quarterly membership and revenue per subscriber, starting with the first quarter of 2025. Those metrics have long been the primary way Wall Street evaluated the company’s performance, but Netflix has tried to shift the focus to traditional measures like sales and profit. Management will continue to report major subscriber milestones.

“The movement to no longer disclose quarterly subscriptions from next year will not go down well,” Paolo Pescatore, founder and analyst at PP Foresight, said in an email. “More so given the subscriber growth that the streaming king has seen over the last year.”

To be sure, new customers have had plenty to watch. Netflix has delivered a new hit every couple weeks so far this year, including limited series such as Fool Me Once and Griselda, the dramas The Gentleman and 3 Body Problem and the reality show Love Is Blind. The streaming service accounts for 8.1% of TV viewing in the US,  and is a leading TV network in most of the world’s major media markets.

“With more than two people per household on average, we have an audience of over half a billion people,” the company said in its letter. “No entertainment company has ever programmed at this scale and with this ambition before.”

Yet even skeptical analysts have been impressed with the company’s recent performance, lifting their price targets for investors. To sustain its growth going forward, Netflix has also introduced a cheaper, advertising-supported version of its service targeting cost-conscious customers. It’s also begun to invest in live programming, including stand-up specials, wrestling and an upcoming boxing match.

Turning to the once-problematic cash flow statement, the company generated cash from operating activities of $2.2B in Q1, and free cash flow of $2.1B (both flat with Q1’23).

During the quarter, NFLX paid down $400M of senior notes with cash on hand and repurchased 3.6M shares for $2B. The company finished the quarter with gross debt of $14B and cash and cash equivalents of $7B.

NFLX is still forecasting full year 2024 free cash flow of approximately $6B and cash content spend of up to $17B.

Finally, here is the explanation for why NFLX is boosting its revolver:

We’re modestly evolving our capital allocation strategy to better reflect our investment grade status. Going forward, rather than anchoring to $10-$15B of gross debt and minimum cash equivalent to two months of revenue, we’ll maintain financial policies consistent with a solid investment grade credit rating. In particular, we’ll continue to prioritize profitable growth by reinvesting in our business, maintain a healthy balance sheet and ample liquidity, and return excess cash (beyond several billion dollars of minimum cash and any used for selective M&A) to shareholders through share repurchases.

As part of this evolution, we’ve upsized our revolving credit facility from $1B to $3B. This will bolster our access to liquidity, and enable us to improve our cash efficiency, over time. We also expect to refinance our upcoming debt maturities and we don’t currently have plans to lever up to buy back stock as we value balance sheet flexibility

The recent growth lifted Netflix shares back toward record highs, giving the company a market value of more than $260 billion. It set an all-time closing high of $691.69 in November 2021, although today's earnings will likely slow down the recent gains: while the result were solid, and the beat was across the board, the stock initially spiked then, and at last check NFLX was down about $20 from its closing price of $610, and about $100 below its record high from Nov 2021.

Tyler Durden Thu, 04/18/2024 - 16:36

This Is The Uniparty 'Reveal': Speaker Johnson To Pass $95.3 Billion Foreign Aid Package Using Democrats

House Speaker Mike Johnson (R-LA) is scrambling - both to keep his job, and to pass several bills to devote billions in US taxpayer funds to foreign entanglements that Johnson's conservative base has little-to-no appetite for. The bills would provide around $60.8 billion for Ukraine, $26.4 billion for Israel, and $8.1 billion for Ukraine. Meanwhile, following Republican outcry - Johnson included a fifth bill which would revive the Secure Border Act - so US border security is essentially an afterthought.

In order to appease said base, Johnson - who faces a growing threat of removal by House conservatives - has added a US border security measure to the package, which he told lawmakers the House would vote on Saturday night. The $95.3 billion package includes three aid bills to send funds to Ukraine, Israel and Taiwan, after claiming that the situation in Ukraine was at a tipping point, and the "axis of evil" of Russia, China and Iran are coordinating to help Russia to push further into Europe, like Hitler.

Speaker Mike Johnson: "We're going to stand for freedom and make sure that Putin doesn't march through Europe... we're the greatest Nation on the planet, and we have to act like it"

He confirms Trump supports him and the record-breaking Ukraine funding plan he just introduced pic.twitter.com/uTUjs7rRz2

— Michael Tracey (@mtracey) April 17, 2024

Seriously? 

"To put it bluntly, I would rather send bullets to Ukraine than American boys," said Johnson, the Washington Times reports.

He’s a stupid, gullible, dishonest person whose incompetence is eclipsed only by his cowardice. Imagine being alive and sentient and witnessing the last 10 years of Deep State skullduggery and then allowing yourself to be manipulated by the most corrupt intelligence apparatus on… https://t.co/h0DIvuNstb

— Sean Davis (@seanmdav) April 18, 2024

The Ukraine aid would be provided as a loan, but with provisions allowing for the loan to be canceled.

A fourth bill would allow the use of seized Russian assets for aid, and sanctions for Russia, China and Iran. It also includes the language of a House-passed bill requiring TikTok to divest from China, a proposal that stalled in the Senate.

A fifth, separate bill includes core components of the House GOP’s Secure the Border Act. -Washington Times.

Far-right conservatives in the House balked at the new plan, calling the border language “watered down” and demanding it to be attached to Ukraine aid.

Conservatives slam

Rep. Bob Good (R-VA) called it a "joke," arguing that Johnson is more worried about Ukraine than the US-Mexico border - which the speaker had previously promised to pair together.

"He certainly doesn’t want to try to use border security because I guess he’s afraid it might mess up Ukraine," Good added.

Rep. Thomas Massie said on X that Johnson "plans to pass the rule for the $100 billion foreign aid package using Democrats on the Rules Committee," adding "This is the Uniparty "reveal.""

This is the Uniparty “reveal.”

— Thomas Massie (@RepThomasMassie) April 18, 2024

GOP Gives up on Johnson: @RepThomasMassie says Mike Johnson has betrayed the Republican conference on 2 big occasions and he is about to do it a third time. Massie has called on Johnson to resign as John Boehner did and allow the GOP to elect a new speaker. #TheGreatAmericaShow pic.twitter.com/Xz2RY2kJAG

— Lou Dobbs (@LouDobbs) April 18, 2024

The Secure Border Act - passed by the House but shut down in the Democrat-led, open-border Senate, would restart the construction of Donald Trump's southern border wall, and would include other measures to stem the flow of migrants.

Momentum Builds for Ouster

According to The Hill, momentum is "growing quickly" to oust ('vacate') Johnson if he moves to alter the 'motion to vacate' rule as part of the above package. The move would raise the threshold for forcing a vote on a motion to vacate - which can currently be called by a single lawmaker. This would reverse an agreement struck between former GOP Speaker Kevin McCarthy (CA) and conservatives in January of last year as a condition of their support for his leadership.

Johnson denied that he's considering such a modification, however he told CNN on Wednesday that the ouster mechanism "has been abused in recent times," adding that "maybe, at some point, we change that."

The denial has done little to mollify the conservatives, who huddled with Johnson for a long and tense discussion on the chamber floor Thursday — a meeting that featured plenty of yelling. Afterward, some of the conservatives said they’re ready to support a motion to vacate if Johnson endorses the rule change making it harder to launch that very process. 

“It’s a red line for me, for sure,” Rep. Lauren Boebert (R-Colo.) told reporters after the gathering broke up.

Rep. Matt Gaetz (R-Fla.), who led the effort to oust McCarthy from the Speakership in October, would not commit to supporting Johnson’s removal over the rule change but suggested that it could be the last straw for him.

“I think a motion to vacate is something that could put the conference in peril, and Ms. Boebert and I were working to avoid that,” Gaetz said. “Our goal is to avoid a motion to vacate. But we are not going to surrender that accountability tool, particularly in a time when we are seeing America’s interests subjugated to foreign interests abroad.” -The Hill

The controversy comes as Rep. Marjorie Taylor Greene (R-GA) has repeatedly threatened to drop a motion to vacate on Johnson over his willingness to negotiate deals with Democrats on key issues such as federal spending, government surveillance, and most recently - Ukraine aid.

"He’s serving Ukraine first and America last, and that would be the worst thing to do," said Greene. "I can’t think of a worse betrayal ever to happen in United States history. And here’s what’s really ironic: the constitutional attorney, Mike Johnson, is literally betraying the American people in order to keep his grip of power on the Speakership."

Tyler Durden Thu, 04/18/2024 - 15:20

Huge Bond Wagers Make Some Hedge Funds Too-Big-To-Fail, IMF Warns

Who could have seen this coming?

btw this is where the next really big crash will start https://t.co/XcK2RezYEk

— zerohedge (@zerohedge) February 1, 2024

Bloomberg's Ye Xie reports that a small group of funds has accumulated such large short wagers in the Treasury market that they could destabilize the broader financial system during times of stress, according to the International Monetary Fund.

“A concentration of vulnerability has built up, as a handful of highly leveraged funds account for most of the short positions in Treasury futures,” the IMF said in its Global Financial Stability Report released this week.

“Some of these funds may have become systemically important to the Treasury and repo markets, and stresses they face could affect the broader financial system.”

The IMF’s comments came in a section discussing the so-called basis trade, which contributed to turmoil in the world’s biggest bond market at the time of the pandemic outbreak in 2020.

In this trade, hedge funds exploit tiny differences between the prices of cash Treasuries and futures, using large sums of money borrowed from the repurchase-agreement market to amplify returns. Because of this leverage and reliance on short-term funding, the bet has drawn increasing scrutiny from regulators. And now the IMF is highlighting another risk: concentrated positions.

As of December, about half the two-year Treasury short positions in the futures market were in the hands of eight traders or less, according to the IMF. It was at a similar level at the end of 2019, just before a surge in funding costs in the early days of the pandemic spurred traders to unwind the positions, which helped boost volatility in bonds at a time of upheaval across financial markets.

Source: IMF’s Global Financial Stability Report

The use of basis trades swelled along with the Federal Reserve’s interest-rate hikes, which potentially make the strategy more profitable by widening the price gap between the cash and futures markets.

A Fed study last month estimated that hedge funds have amassed at least $317 billion in Treasury holdings related to basis trades since the first quarter of 2022, although the size is “significantly” less than it previously estimated.

The Securities and Exchange Commission has been working to rein in basis trades and increase the transparency of hedge funds’ exposure to the strategy.

In December, the SEC required the funds and brokerages to centrally clear far more of their US Treasuries transactions, a move to bolster oversight of basis trades.

Source: IMF’s Global Financial Stability Report

Since then, there are signs that use of the trade may be waning: Commodity Futures Trading Commission data shows a decline in leveraged funds’ short positions in bond futures.

The concentration in these bets has also diminished.

In two-year futures, net short positions controlled by eight traders or less have dropped to about 38% of total open interest, from 50% in early January, according to CFTC data compiled by Bloomberg.

Source: CFTC's Commitments of Traders data

Note: Data show percentage of two-year Treasury short futures contracts held on a net basis

Despite that unwinding, the IMF noted the short positions of leveraged funds remain large, which means they may still loom as a risk.

As the Fed shrinks its holdings of Treasuries, a process known as quantitative tightening, it also may reduce the liquidity in the financial system, potentially triggering a jump in funding costs and leading the basis trade to unravel, the IMF said.

“Basis trade investors rely on low repo haircuts and low repo rates to leverage their positions and increase basis trade profitability,” the report said.

“A spike in repo rates — triggered, for example, by surprises in quantitative tightening — can render the trade unprofitable and could trigger the forced selling of Treasury securities and a brisk unwinding of futures positions as funds seek to quickly delever.”

Which explains, as we noted previously, why the SEC is now scrambling to figure out just how much capital is truly allocated to basis trades within multi-manager/multi-strat hedge funds, but based on our quick look at regulatory leverage, the actual amount allocated to basis is orders of magnitude greater than $550BN, more likely in the $2+ trillion ballpark across the entire global hedge fund industry.

And there you have it: all the basis trade is, is the latest manifestation of the "collecting pennies in front of a steamroller" trade, because when it works it generates 10% returns every year like clockwork, with the only gating factor being how much leverage a hedge fund has access to.

However, during a crisis, such as the Sept 2019 repo fiasco or the March 2020 crash, it all goes to hell... and the Fed rushes to bail out not just bank but hedge funds which are now so tightly interwoven in the financial fabric (via ultra loose and generous Prime Brokerage linkages) that central banks have no choice but to bail out everyone, including the billionaires who run the hedge funds that have put on trillions of basis trades on!

...and The IMF is worried.

Tyler Durden Thu, 04/18/2024 - 15:00

Breaking Down The 2024 Bitcoin Halving: Implications & Predictions For Bitcoin Miners

Authored by 'El Sultan Bitcoin' via Bitcoin Magazine,

The Bitcoin halving event, a pivotal occurrence, is scheduled for April, 19 2024. This quadrennial event will reduce the block subsidy for Bitcoin miners from 6.25 BTC to 3.125 BTC, thereby halving the reward that miners receive for their efforts.

Such events have historically led to profound shifts in the mining landscape, potentially influencing various economic and operational facets of Bitcoin mining.

ECONOMIC OUTLOOK AND MARKET PREDICTIONS

After the halving, the immediate impact is a considerable decrease in miner revenue due to the reduced block subsidy. This could lead to a decline in the hashrate as less efficient miners may turn unprofitable and exit the network. Luxor’s Hashrate Index Research Team projects about 3-7% of Bitcoin’s hashrate could go offline if Bitcoin’s price maintains its current level. However, if prices fall, up to 16% of the hashrate could become economically unviable, depending on the trajectory of Bitcoin prices and transaction fees post-halving.

The hashrate, a critical security measure for Bitcoin, might adjust along with difficulty levels to align with the new economic realities. Luxor’s analysis suggests different scenarios where the network's hashrate could end up ranging from 639 EH/s to 674 EH/s by year's end, reflecting adjustments to the new earning potential post-halving.

ASIC PRICING AND BREAKEVEN POINTS

Post-halving, the profitability of different ASIC models will become crucial as the mining reward drops. Lower rewards mean that only the most efficient machines will be able to operate profitably if the price of Bitcoin does not see a significant increase. For instance, according to Luxor’s projections, next-generation ASICs like the S19 XP and M30S++ might have breakeven power costs ranging from $0.07/kWh to $0.15/kWh, depending on post-Halving hashprice.

This shift in profitability will likely lead to a repricing of ASIC machines. Historical data suggests that ASIC prices are highly correlated with hashprice; therefore, the anticipated reduction in hashprice will prompt a downward adjustment in ASIC values. This will particularly impact older and less efficient models, potentially accelerating their phase-out from the market.

THE ROLE OF CUSTOM ASIC FIRMWARE POST-HALVING

To combat reduced profitability, miners are increasingly turning to custom ASIC firmware to improve the efficiency of their hardware. Firmware like LuxOS and BraiinsOS can enhance the performance of machines by optimizing their power usage and hashrate output, thus lowering the breakeven point for electricity costs. For example, underclocking an S19 with custom firmware could extend its operational viability by reducing its power draw, thereby maintaining profitability even at lower hashprices.

Public miners, in particular, are adopting custom firmware to boost the efficiency of their fleets. Companies like CleanSpark and Marathon have reported using custom solutions to enhance their operational efficiencies. This trend is expected to grow as more miners seek to maximize their output and minimize costs in the face of decreasing block rewards.

2024 BITCOIN HALVING AND BEYOND

The 2024 Bitcoin Halving is set to reshape the mining landscape significantly, just as previous halvings have. While the exact outcomes are uncertain, the event will undoubtedly present both challenges and opportunities. Miners who plan strategically, taking into account both economic forecasts and operational efficiencies, will be better positioned to navigate the post-halving environment.

For those in the Bitcoin mining industry, staying informed and adaptable will be key to leveraging the halving event as an opportunity rather than a setback. With the right preparations, particularly in ASIC management and firmware optimization, miners can continue to thrive even under tightened economic conditions.

Tyler Durden Thu, 04/18/2024 - 14:25