FT : China makes more than $30bn in emergency loans

China makes more than $30bn in emergency loans
New data show Beijing emerging as formidable competitor of western-led IMF

China has doled out tens of billions of dollars in secretive “emergency loans” to countries at risk of financial crises in recent years, turning Beijing into a formidable competitor of the western-led IMF.

The bailouts represent a pivot from the huge infrastructure loans China has extended over nearly a decade as part of its $838bn Belt and Road Initiative, a programme that saw it eclipse the World Bank as the world’s biggest financer of public works.

Three of the largest recipients of China’s rescue lending have been Pakistan, Sri Lanka and Argentina, which together have received as much as $32.83bn since 2017, according to data compiled by AidData, a research lab at William & Mary, a university in the US. 

Other countries receiving rescue lending from Chinese state institutions included Kenya, Venezuela, Ecuador, Angola, Laos, Suriname, Belarus, Egypt, Mongolia and Ukraine, according to AidData, which did not provide details for these countries.

Such credit is aimed at enabling countries to keep up payments on foreign debt and to continue buying imports, warding off balance of payments (BoP) distress that can develop into full-blown storms such as the 1997 Asian crisis and the Latin American crisis of the 1980s. The IMF’s austere prescriptions in the aftermath of the Asian crisis were deeply unpopular, reinforcing a backlash against it that persists to this day.

Unlike the IMF, which announces the details of its credit lines, debt relief and restructuring programmes to debtor countries, China operates largely in secret. China’s financial institutions publish scant details of the credit it issues and Beijing does not predicate its lending on debt restructuring or economic reforms in recipient countries, analysts said. In most cases, the objective of China’s emergency lending is to prevent defaults on infrastructure loans extended under the Belt and Road Initiative, analysts said.

“Beijing has tried to keep these countries afloat by providing emergency loan after emergency loan without asking its borrowers to restore economic policy discipline or pursue debt relief through a co-ordinated restructuring process with all major creditors,” said Bradley Parks, executive director of AidData.

The AidData research lab maintains the world’s most comprehensive database on China’s global financing activities mostly by compiling data from countries that receive Chinese loans. The data set captures thousands of loans from more than 300 Chinese government institutions and state-owned entities across 165 low- and middle-income countries.

Parks added that China’s approach often “postpones the day of reckoning”. 

“When Beijing acts as an alternative lender of last resort and bails out a distressed sovereign without requiring economic policy discipline or pursuing a co-ordinated debt rescheduling with major creditors, it effectively kicks the can down the road and leaves it to others to solve the underlying solvency problem,” Parks said.

A study of the individual loans provided by Chinese financial institutions since 2017 to Pakistan, a key participant in the Belt and Road Initiative, shows a drip-feed of support in the form of loans from state-owned banks and SAFE, the agency that controls Beijing’s $3tn stash of foreign exchange reserves. 

The terms on such loans are far from concessionary, often building in a margin of about 3 per cent above benchmark funding costs. In addition to these loans, the People’s Bank of China, the central bank, has a currency swap agreement with its Pakistan counterpart that allows Islamabad to draw down funds when it needs them, the AidData records show. The PBoC has declined to comment.

Commentators said China’s rescue lending risked prolonging and exacerbating debt distress and the crises that often follow in debtor nations. “I see these as a major impediment to crisis resolution,” said Gabriel Sterne, head of EM macro at Oxford Economics and a former senior economist at the IMF.

As Sri Lanka’s current financial meltdown demonstrates, Beijing’s support is sometimes insufficient, analysts said. “The suspicion is that countries seek out the loan to avoid going to the IMF, which demands painful reform,” Sterne added. “There may be circumstances in which the gamble for redemption works, but generally — as in the Sri Lankan case — it just makes the adjustment more painful when it actually happens.”

Sean Cairncross, former chief executive of the Millennium Challenge Corporation, a US government foreign aid agency that provides grant funding on condition of democratic governance and economic transparency, said China’s loans were provided in pursuit of long-term aims in competition with rival powers.

“This isn’t about any particular loan or country . . . They want to have the ear of governments where raw materials are located, or large markets, or strategic ports, or where there is access to shipping lanes,” he said. “It is a way to narrow the strategic options for the US and for the west, in terms of access and influence globally.”

FT : Fracking groups fear Truss reforms fall short of industry’s revival

Fracking groups fear Truss reforms fall short of industry’s revival
Companies welcome lifting of moratorium but warn further rule changes needed for projects to be viable

Fracking companies have warned that Liz Truss’s lifting of a moratorium on the controversial method of shale gas extraction will not resurrect the industry in England without rapid reform of planning and seismicity rules.

The new UK prime minister on Thursday ended a ban on fracking in England that has been in place since 2019, as part of wide-ranging reforms to bolster Britain’s domestic energy supplies and address soaring bills for households and businesses.

Truss claimed the decision “could get gas flowing in as soon as six months”, although she acknowledged that the resumption of fracking in England would also be dependent on “where there is local support for it”.

While fracking companies, including Australian-owned Cuadrilla and Britain’s largest privately owned company Ineos, welcomed the reversal, industry insiders warned that other rules would also need to be tackled if the government wants to kick-start production.

Ross Glover, development director at Aim-listed fracking company IGas Energy, told the Financial Times that streamlining rules around planning and permitting would be crucial.

“Development of any form of infrastructure” in the UK faces a lengthy planning and permitting process, Glover argued. “We are not saying get rid of all the regulation, what we are saying is we need to have a proper discussion about how we accelerate the projects.”

IGas shares have surged more than 650 per cent this year, partly on the back of investor anticipation of a reversal of the fracking moratorium.


Shale gas companies have also long called for a review of seismicity regulations, known as the “traffic light system”, that require an immediate halt to work if fracking triggers earth tremors of magnitude 0.5 or above.

Charles McAllister, director of policy at UKOOG, a trade body that represents frackers, warned that if the industry does “not get the comprehensive policy support required, then some of the companies may not progress” their shale projects.

UKOOG is asking for the fracking industry to be subject to the same standards on surface vibrations that apply to other industries.

“We are asking to be treated fairly in terms of . . . earthquake regulations. We would want to be treated in line with construction, geothermal, quarrying and [the] coal mining industry,” McAllister said. “Our view is, the industry has been demonised in the context of wider regulation on seismicity and surface vibration.”

Brian Mullin, head of planning consultancy Marrons Planning, suggested community consent may also need to be removed from fracking consenting processes “as it demonstrably amounts to a moratorium for delivery”.

Ineos, which has offered to drill a shale gas test well to prove to the government that “we can do [fracking] safely and without harm to the environment”, has raised the prospect of payments to local communities to gain support.

“We have promised to invest the first 6 per cent of the value of the gas back into the local communities,” Ineos director Tom Crotty said on Thursday.


Hydraulic fracturing, or fracking, involves pumping water, sand and chemicals under the ground at high pressure to release gas from rock formations. It has transformed the US energy sector, but some leading academics have long argued Britain’s geology is ill suited to the process, even if community consent in such a densely populated country could be achieved.

“[The] geological history of the UK is complicated,” said Stuart Haszeldine, professor at the school of geosciences at the University of Edinburgh.

Truss’s energy reforms are also aimed at unleashing a new wave of exploration among UK North Sea companies, although sceptics argue that any increase in the region’s output is likely to have a minimal impact on sky-high oil and gas prices.

Truss will greenlight the first oil and gas licensing round since 2019-20 as the government seeks to arrest declines in UK oil and gas production.

The UK’s annual North Sea oil and gas output dropped 17 per cent last year. Although gas production has improved 27 per cent year on year in the first half of 2022, energy companies have cautioned that the reversal will prove “shortlived” unless there is a new wave of investment.

The new permits will be for mature areas of the UK North Sea, meaning any companies that successfully drill new wells can take advantage of existing infrastructure rather than installing costly new pipelines.

The UK oil and gas regulator, the North Sea Transition Authority, will prioritise an initial package of fast-track licences that contain existing discoveries, which companies could potentially exploit in less than a year, although the remaining permits could take between five and 10 years to yield any production.

Officials are also seeking to accelerate projects that are already in the development stages so they can reach production faster.

The government is particularly keen for Equinor to progress its Rosebank oil and gasfield 130 kilometres off the cost of the Shetland Islands, according to people familiar with officials’ thinking.

Rosebank is among the largest in a pipeline of projects slated to receive government and company approval in 2022 and 2023. Another of the biggest, Shell’s Jackdaw gas scheme, received a green light in June.

Equinor has so far said it will take a final investment decision on Rosebank in 2023.

Yvonne Telford, senior analyst for north-west Europe at the consultancy Westwood Global Energy Group, said exploration and production companies did have the “appetite” to proceed with developments.

But she warned that “production volumes from the larger developments such as Shell’s Jackdaw and Equinor’s Rosebank fields will not be seen until 2026 and 2027”.

FT : Netflix partners with Ubisoft to bolster fledgling gaming division

Netflix partners with Ubisoft to bolster fledgling gaming division
Streaming giant will launch three new mobile games next year based on French company’s popular hits

Netflix has teamed up with Ubisoft, one of Europe’s biggest video game companies, as the streaming giant seeks to bolster its fledgling gaming business.

The California-based streaming service will launch three new mobile games next year based on Ubisoft’s games, including its most successful title Assassin’s Creed.

The move comes as Netflix attempts to accelerate growth of its new gaming arm amid a slowdown in the company’s streaming business. The streaming group has lost more than half of its market value since April when it revealed its decade-long subscriber growth had ended.

The partnership will entail the French gaming group developing the mobile games for Netflix. This will also include a game based on Ubisoft’s Mighty Quest, a castle-building and monster-looting game, and the historical puzzle adventure game called Valiant Hearts.

The games will be made available exclusively to Netflix subscribers, with no ads or in-app purchases, allowing Ubisoft to tap into new audiences and experiment with fresh formats for existing titles. No details of the deal value have been announced.

Netflix entered the gaming sector last year, hiring a number of high-profile executives, as it joined the world’s largest technology companies in trying to grab a slice of the most valuable portion of the entertainment industry.

Big Tech groups including Amazon, Facebook-owner Meta, Google and Apple have all stepped up their investments in video games in recent years, vying to become the “Netflix of gaming”.

Netflix has launched 28 games and acquired three gaming studios, including Night School Studio, which makes the supernatural adventure game Oxenfree, and Texas-based Boss Fight Entertainment. In March, it bought Next Games, the Finnish developer behind mobile games based on its hit show Stranger Things.

However, the company has struggled to quickly convert a big chunk of its roughly 220mn subscribers into regular gamers. There are about 1.9mn daily active users of Netflix’s mobile games, according to market intelligence firm Apptopia, and they have been installed 28mn times. By contrast, King, a popular games publisher that makes Candy Crush, has roughly 30mn daily active users.

Leanne Loombe, head of external games at Netflix, said the streaming company is still “very committed to games” but is at an experimentation stage, working out which styles and genres resonate most with its subscribers.

“Whoever our members are we want to make sure there’s a game on there for them,” she said, adding that in the future “we are going to start to focus more on Netflix IP” as “that’s what we have a superpower in”.

The streaming giant plans to have a total of 50 games on its roster by the end of the year.

But its push comes during a wider slowdown in the gaming sector, with console producers, video game publishers and gaming chipmakers reporting weakening sales and engagement in recent months. Last week, US tech group Snap, which owns social media group Snapchat, said it was putting its gaming plans on hold.

Loombe said the company was not perturbed by a recent slide in gaming engagement, particularly in mobile, noting that “people are still playing games . . . so there’s still a huge opportunity for us”.

“You need a few hours to watch a TV series or films but you only need five minutes to play a game on your commute,” she added.

(ZH) Americans Love The NFL, But Change Is Looming

Americans Love The NFL, But Change Is Looming

While Baseball is often referred to as “America’s favorite pastime”, the NFL has long surpassed the MLB as the nation’s favorite professional sports league.
As Statista's Felix Richter notes, for several reasons, including first and foremost its better suitability for television, football flew by baseball as Americans’ favorite sport to watch in the 1960s and hasn’t looked back since. In recent years, baseball has even been surpassed by basketball, as younger audiences prefer the action-packed, star-studded NBA over what many young viewers consider the dragging affair of a three-hour baseball game.
You will find more infographics at Statista
According to findings from Statista's Global Consumer Survey, the NFL remains the number 1 among major professional sports leagues in the U.S., at least for now. While 52 percent of self-declared sports fans follow the National Football League, compared to 42 percent for the NBA and 31 percent who follow the MLB, looking at the youngest group of respondents reveals a worrying trend for NFL executives.
Among 16- to 25-year-olds, the NFL only plays second fiddle to the NBA, with just 33 percent of young sports fans following the league. The NBA reaches 40 percent of Gen X fans, who are overall less likely to follow any professional sports leagues than their older compatriots.

>>> Weekend Papers Summary

Weekend Papers Summary

NEW YORK TIMES
-First speech as King of Britain caps day of remembrance: King Charles III’s speech, coming one day after Queen Elizabeth II’s death, emphasized the continuity of governance in Britain’s constitutional monarchy.
-The UK now enters a mourning period that continues until after the queen’s funeral.
-New offensive seems to have caught Russian forces off guard. Sweeping south from positions in Ukraine’s northeast, Ukrainian forces have made their largest gains since routing Russia from Kyiv in April. Ukrainian and Western officials warned that the operations were in their early days and that the situation was fluid.
-Justice Dept. and Trump lawyers clash over special master’s qualifications. The two sides had diverging views of who could serve as an independent arbiter to sift through the files seized from former President Trump’s home.
-Navy orders high-level outside investigation of SEAL course. The punishing selection course for the Navy’s most elite force is under new scrutiny after a sailor’s death exposed physical abuse and other problems.
-Yeshiva University can bar LGBT Club for now, Justice rules: Sonia Sotomayor’s ruling will be in place pending a decision by the Supreme Court to take up the case.
-In New Hampshire, a MAGA rivalry is splitting House Republicans. Two young conservatives are battling for the mantle of Trumpism in a congressional primary that could help decide the House majority.
-First Kansas, Now Michigan and beyond as abortion ballot measures spread. Democrats are hoping ballot measures on abortion rights will drive up voter turnout. They’re looking to Michigan as a test run.
-Gov. Hochul declares polio state of emergency for New York. The virus has now been detected in a Nassau County wastewater sample, officials said.
-After legal fight, Oberlin says it will pay $36.59M to Gibson’s Bakery. The latter said the liberal arts college in Ohio had falsely accused it of racism after a Black student was caught shoplifting.
-Marc Lewitinn, Covid patient, dies after 850 days on a ventilator. While no definitive statistics exist, doctors say Mr. Lewitinn was likely the longest-surviving intubated Covid patient. He was 76.

THE FINANCIAL TIMES
-Charles III has addressed his nation for the first time, vowing to emulate his late mother Queen Elizabeth’s “life-long service”, ahead of his formal proclamation as king on Saturday.
-“We are at war,” Emmanuel Macron said on Monday as he outlined the emergency measures France was taking to shore up its energy supply and shelter its citizens and business from soaring costs. For months following Russia’s full-scale invasion of Ukraine, the president of France, aspired to act as intermediary and peacemaker between Kyiv and Moscow. This week he and fellow European leaders became belligerents in a sharply escalating energy conflict between Russia and the west. It was time, Macron said, for a “general mobilization”.
-The US is threatening to impose sanctions on buyers of Russian oil that rely on western services and fail to abide by the price cap proposed by G7 countries, as the Biden administration vows to strictly enforce the policy once it takes effect.
-Europe’s energy ministers have signaled support for a temporary cap on the price of gas imports including those from Russia and a windfall levy on energy producers to address “astronomical” costs for businesses and consumers.
-Josh Harris, the billionaire private equity executive who left Apollo Global Management last year after a messy succession battle, is returning to the investment industry with a firm that aims to be a contender in financial markets including private equity, credit and insurance.
-Josh Harris, the billionaire private equity executive who left Apollo Global Management last year after a messy succession battle, is returning to the investment industry with a firm that aims to be a contender in financial markets including private equity, credit and insurance.
-UK Prime Minister Liz Truss has been accused of carrying out an “ideological purge” of top civil servants after she approved the sacking of Sir Tom Scholar, the experienced permanent secretary at the Treasury, on her first day in the job. Whitehall insiders fear that Scholar’s dismissal on Tuesday will have a chilling effect on the civil service and make it less likely that officials will speak “truth to power”.
-FTX Ventures, the investment firm led by billionaire Sam Bankman-Fried, will buy a 30 per cent stake in the fund of ex-Trump aide Anthony Scaramucci, as he continues his mission to try to bolster the struggling cryptocurrency market.
-India imposed controls on exports of several varieties of rice on Friday, in a move likely to affect the global market for one of the most commonly eaten staple foods as commodity prices surge following Russia’s invasion of Ukraine. The country — the world’s leading exporter of rice, accounting for about 40% of the global trade — imposed a 20% duty on unmilled white rice, husked brown rice and semi-milled or wholly-milled rice. The restrictions do not apply to basmati rice, India’s best-known variety of the grain.
-Investors and analysts expect sterling and UK government bond prices to weaken further as the country issues billions of pounds in debt to fund Prime Minister Liz Truss’s new energy package.
-Solar power generation reached a new record in the EU over the summer months as supplies from gas, hydropower and nuclear were all squeezed during the energy crisis.
Sunny weather across the continent and a boost in solar installations contributed to the record generation, which was 28 per cent higher than the previous summer, according to research from Ember, the UK environmental think-tank.

NY POST
Tensions were too high for Meghan Markle to join the royal family at Balmoral after Queen Elizabeth II’s death, insiders say. Members of the family, including Prince William, the new heir to the throne, dashed to the monarch’s bedside Thursday.
-Gov. Kathy Hochul had New Yorkers pay twice as much for COVID tests from a company tied to nearly $300,000 in donations to her campaign compared to other state vendors, a new report details, raising fresh concerns of alleged pay-to-play behavior ahead of the Nov. 8 election.
-A suspected ransomware attack on Holiday Inn has crippled the hotel giant’s ability to book reservations online, resulting in sharp occupancy drops that have sparked legal threats from franchisees, The Post has learned. InterContinental Hotels Group, which owns Holiday Inn as well as 15 other brands including Crowne Plaza, said hackers breached its systems on Monday, forcing it to shut down its online reservation booking portal.

>>> Barron’s Weekend Summary

Barron’s Weekend Summary: For those who believe in Bitcoin, El Salvador looks like a crypto paradise.


Cover Story:
-For those who believe in Bitcoin, El Salvador looks like a crypto paradise. It’s one of the few places in the world where you can use Bitcoin to buy a Coke or cerveza on the beach. In theory, you can pay rent in Bitcoin, buy a house, pay off a credit card, or send a payment to a Mayan pottery vendor in the local market. Yet El Salvador is far from a crypto lover’s dream. Instead, it has turned into a cautionary tale of what happens when a country adopts a cryptocurrency, tries to weave it into its economy, and rebrands itself as a tech-friendly haven: It isn’t working as advertised.

Interview:
-Joseph Wang, a former trader on the Fed’s open-market desk and author of the Fed Guy blog and Central Banking 101 discusses the coming quantitative tightening. QT is as ambitious as its impact is uncertain. At full-throttle, the pace of balance-sheet tightening will be much more aggressive than in the past, and come at a time when interest rates are rising quickly. What could go wrong? Potentially, a lot, suggests Wang.

Tech Trader:
-Videogames have become the world’s most lucrative global entertainment medium, but the industry’s top players are unknown compared with film directors and TV show runners. Take Vince Zampella, who is responsible for the creation of three multibillion-dollar franchises, including the original Call of Duty and Modern Warfare, both of which are among the most successful games in history. Zampella also made Apex Legends as the head of Respawn, his independent studio that Electronic Arts EA +1.41% wisely acquired in 2017. Earlier this year, Electronic Arts announced that Apex had surpassed $2B in bookings.

The Trader:
-Traders prefer a volatile market, and they’ve gotten one in 2022. Stocks have declined, rallied, and dropped again, driven by ever-evolving expectations for interest rates and inflation, shifting recession odds, and the outlook for corporate earnings. About the only thing that has been reliable has been the technicals. This past week’s rally lifted the Dow Jones Industrial Average 2.7%, the Nasdaq Composite 4.1%, and the S&P 500 3.6%. That’s after all three saw declines of at least 3% during the prior week, their third straight losing week.
-IHS Holding is the new kid on the block in the cell-tower world—and its stock may be worth buying. Running a wireless network requires a multitude of antennas, cell towers, and the wires that connect them all. Profit margins are wide, recurring revenue is high, and future visibility is clear, given long-term contracts with annual escalators. In developed markets, recent growth has come from upgrading wireless networks to support 5G, which requires larger and heavier equipment that generates more rent, and more antennas to handle the wider range of wireless spectrum bands 5G requires.

Features:
-Queen Elizabeth II, who died Thursday at the age of 96, was Britain’s longest serving monarch. During her reign, British equities returned roughly 12% a year on average—in nominal terms—according to data from Credit Suisse. US stocks returned roughly 11% a year on average—again in nominal terms. (The US experienced lower inflation than the UK over the past 70 years.) The UK nominal numbers turn 100 pounds invested in the early 1950s into pounds worth roughly 300,000 today. That is quite a return that spans periods of war, currency devaluation, and labor unrest.
-The energy crunch in Europe escalated into a full-blown crisis this past week after Vladimir Putin cut off the pipeline that supplies a third of the natural gas that Russia sends to Europe. Natural-gas prices soared 30% at one point, and Goldman Sachs analysts projected that Europeans will see their monthly energy bills triple this winter to an average of EUR500, or almost $500, per family at the peak.

European Trader:
-Inflation is no problem for Evian. Evian, on sale since 1978 in the U.S., was one of the pioneers. Danone, its parent company, bottles it in the French Alps on the south shore of Lake Geneva and sends it all over the world. Sales of Danone’s water products rose 7.7% in the first half, just as inflation was accelerating to the fastest rate in 40 years. That was a big part of Danone’s overall increase of 7.4% in like-for-like sales. Danone also boasts a range of dairy and plant-based products, such as Activia and Actimel yogurts, Delight coffee creamer, and the Silk soy-milk line. It sells a range of baby foods, including Aptamil formula, where its biggest market is China.

Emerging Markets:
-Chile, with 19 million inhabitants, is the world’s dominant copper producer, boasting a third of global output, and No. 2 in lithium. The planet needs much more of both of these metals if EVs and renewable energy are going to save it. Demand for copper will double by 2035, S&P Global research predicts. Chileans’ landslide rejection of their new proposed constitution on Sep. 4 could make the race for supply easier.

Commodities:
Water has become a popular topic these days, given widespread drought conditions around the globe and the water crisis in Jackson, Miss. That doesn’t translate into an automatic win-win when it comes to investing in the sector. “While the megatrends of water continue to roil the headlines, the investment implications are more complicated,” says Deane Dray, managing director and multi-industry analyst at RBC Capital Markets.

Streetwise:
-Jack Hough presents the exciting topic of fertilizer arbitrage. Profits for North American fertilizer companies have exploded higher, and the reason has to do with the war in Ukraine, and a century-old manure workaround that today feeds the planet. Farming depends on reactive nitrogen compounds, like ammonia, made from nitrogen and hydrogen. Dung is filled with the stuff, luckily enough. But if we relied just on manure for fertilizer, the planet would only be able to support a population of maybe 4B, tops. On Nov. 15, we’re projected to hit 8B. Russia has shut off Europe’s natural-gas supply, and since gas isn’t easily shipped overseas, the price in Europe is many times the US price. Gas makes up about 75% of the cost of fertilizer, so European plants have simply shut down, leaving North American ones to supply the market.

The Epoch Times : US at Risk of Descent Into ‘Anarchy’ Amid Heightened Distrust

US at Risk of Descent Into ‘Anarchy’ Amid Heightened Distrust of DOJ, Law Enforcement, Expert Warns
By John Ransom

The United States is at risk of descending into “anarchy” amid escalating criticism of federal law enforcement entities in the wake of the FBI’s raid last month at former President Donald Trump’s Mar-a-Lago estate in Florida, a legal expert has warned.
The Department of Justice (DOJ), in response to claims of bias, on Aug. 30 banned all of its non-career political appointees from partisan events and other political activity.
“We must do all we can to maintain public trust and ensure that politics—both in fact and appearance—does not compromise or affect the integrity of our work,” Attorney General Merrick Garland said in a memo to DOJ employees.
Attorney Sandra Spurgeon, who has successfully litigated hundreds of state and federal cases, told The Epoch Times, “We are spiraling to anarchy, and we have to take the politics out of the positions by people of power within our legislative and executive branch.”
Spurgeon, who supports the DOJ ban, said that Garland had no choice but to do something to try to restore the public’s respect for law enforcement. She warned that the leadership of the DOJ and the FBI “live a very different life than you and I do.”
“They don’t think about the same things on the level that we would think of things because they have been elevated into a state where they have lost the appreciation of impartiality,” Spurgeon said about top government officials that are the focus of the ban.
“And quite frankly, they just don’t care.”
Public distrust of federal law enforcement agencies has trended to low levels, with 53 percent of voters agreeing with a statement that the FBI is “Joe Biden’s Gestapo,” according to an Aug. 15–16 survey by pollster Rasmussen. The survey of 1,000 U.S. likely voters also showed that 44 percent of respondents view the FBI less favorably since the Mar-a-Lago raid over documents the government alleges Trump doesn’t have permission to hold.
Overall, only 36 percent of likely voters disagree with the description of the FBI as a “Gestapo” that benefits President Joe Biden.
The DOJ directive also came a few days before a primetime TV speech in which Biden directed fiery political rhetoric against Trump-supporting Republicans. In the Sept. 1 speech given in the shadow of Philadelphia’s Liberty Hall, Biden warned against “MAGA Republicans” who “live not in the light of truth but in the shadow of lies.”
Out-of-Touch Behavior
Out-of-touch behavior by the so-called political class has led to the crisis that necessitated the DOJ ban, one former U.S. special agent told The Epoch Times.
One issue is that “a Biden appointee, the U.S. attorney for the state of Massachusetts [Rachael Rollins], showed up at a Joe Biden fundraising event where First Lady Jill Biden was appearing,” Eric Caron, who previously worked as an agent for the U.S. Treasury and for the Department of Homeland Security, said about the impetus for the attorney general’s directive.
“She even used a government vehicle” to get to the event, Caron added, all of which could be a violation of the Hatch Act ban on electioneering.
The electioneering claim is under investigation by the U.S. Office of Special Counsel, after the case was referred to the DOJ by Sen. Tom Cotton (R-Ark.) after Rollins, who was confirmed after a fractious process, showed up at the Biden fundraiser.
Politicization Claims
Others have wondered if the ban, as well as another DOJ memo issued on the same day reiterating a policy restricting communications with Congress, could be an attempt to intimidate so-called whistleblowers within the FBI and DOJ.
“Ever since we told you that FBI whistleblowers had begun contacting Members of Congress to report on political pressure from high-ranking FBI officials to falsely label some investigations and run interference on others to serve a political agenda,” noted former Trump attorney Jay Sekulow, the chief counsel at the American Center for Law and Justice. “Garland has been very busy trying to shut them down, and anyone else who might expose what’s going on.”
But even after discounting the possible partisan motives behind the moves, the gesture will be inadequate in regaining the trust and confidence of the American people, one critic says.
Under Garland, there have been a number of highly publicized cases that seem to indicate extreme politicization in the DOJ, Mike Davis of the Article III Project, which promotes constitutionalist judges and the rule of law, told The Epoch Times.
One such episode, according to Davis, involves an October 2021 memo by Garland foreshadowing “a series of measures designed to address the rise in criminal conduct directed toward school personnel.”
That memo came after the National School Boards Association, a key ally of the Democrats, wrote a letter to Biden, complaining that parents who showed up at school board meetings put school personnel “under an immediate threat” of violence. The association later apologized for the letter; Garland, later testifying at a House Judiciary Committee hearing, said that the DOJ hadn’t been told by the White House to issue the memo.
“Attorney General Garland’s ban on campaign activity for Justice Department political appointees is like placing a Band-Aid on a severed limb,” said Davis.
The move seemed desperate to Casey D. Thompson, assistant professor of legal studies at Tarleton State University.
“I will say that it could possibly be a last resort,” he told The Epoch Times in an email.
Spurgeon cautioned that the level of disrespect for our legal system and the damage that is being done daily to our court system, which is “vital to us as citizens to prevent a state of anarchy” is accelerating.
“I don’t believe we are in a state of anarchy yet, but the question must be, how do we ensure a level of transparency with our government, where ‘we the citizens’ have restored trust in those chosen to govern us in a bipartisan manner?” she said.
“I think American citizens will no longer accept being governed blindly and without accountability.”
Officials at DOJ didn’t respond by press time to a request by The Epoch Times for comment.

(ZH) Escobar: Germany's Energy Suicide - An Autopsy

Escobar: Germany's Energy Suicide - An Autopsy

When Green fanatic Robert Habeck, posing as Germany’s Economy Minister, said earlier this week “we should expect the worst” in terms of energy security, he conveniently forgot to spell out how the whole farce is a Made in Germany cum Made in Brussels crisis.
Flickers of intelligence at least still glow in rare Western latitudes, as indispensable strategic analyst William Engdahl, author of A Century of Oil, released a sharp, concise summary revealing the skeletons in the glamour closet.
Everyone with a brain following the ghastly Eurocrat machinations in Brussels was aware of the main plot – yet hardly anyone among average EU citizens. Habeck, Chancellor “Liver Sausage” Scholz, the European Commission (EC) Green Energy VP Timmermans, EC dominatrix Ursula von der Leyen, they are all involved.
In a nutshell: as Engdahl describes it, this is about “the EU plan to de-industrialize one of the most energy-efficient industrial concentrations on the planet.”
That’s a practical translation of the UN Green Agenda 2030 – which happens to be metastasized into crypto Bond villain Klaus Schwab’s Great Reset – now renamed “Great Narrative”.
The whole scam started way back in the early 2000s: I remember it vividly, as Brussels used to be my European base in the early “war on terror” years.
At the time, the talk of the town was the “European energy policy”. The dirty secret of such policy is that the EC, “ advised” by JP MorganChase as well as the usual mega speculative hedge funds, went all out into what Engdahl describes as “a complete deregulation of the European market for natural gas.”
That was sold to the Lugenpresse (“lying media”) as “liberalization”. In practice, that’s savage, unregulated casino capitalism, with the “free” market fixing prices while dumping long-term contracts – such as the ones struck with Gazprom.
How to decarbonize and destabilize
The process was turbo-charged in 2016, when the last gasp of the Obama administration encouraged massive export of LNG out of the US’s huge shale gas production.
For that one needs to build LNG terminals. Each terminal takes as much as 5 years to build. Within the EU, Poland and Holland went for it from the start.
As much as Wall Street in the past invented a “ paper oil” speculative market, this time they went for a speculative “paper gas” market.
Engdahl details how “the EU Commission and their Green Deal agenda to ‘decarbonize’ the economy by 2050, eliminating oil, gas and coal fuels, provided the ideal trap that has led to the explosive spike in EU gas prices since 2021.”
The creation of this “single” market control implied forcing illegal rule changes on Gazprom. In practice, Big Finance and Big Energy – which totally control anything that passes for “EU policy” in Brussels – invented a new pricing system parallel to the long-term, stable prices of Russian pipeline gas.
By 2019, an avalanche of Eurocrat energy “ directives” by the EC – the only thing these people do – had established a totally deregulated gas market trading, setting the prices for natural gas in the EU even as Gazprom remained the largest supplier.
As lots of virtual trading hubs in gas futures contracts started popping up across the EU, enter the Dutch TTF (Title Transfer Facility). By 2020 the TTF was established as the real EU gas benchmark.
As Engdahl points out, “TTF is a virtual platform of trades in futures gas contracts between banks and other financial investors. Outside, of course, of any regulated exchange.
So LNG prices soon started to be set by futures trades in the TTF hub, which crucially happens to be owned by the Dutch government – “the same government destroying its farms for a fraudulent nitrogen pollution claim.”
By any means necessary Big Finance had to get rid of Gazprom as a reliable source to allow powerful financial interests behind the Green Deal racket to dominate the LNG market.
Engdahl evokes a case very few know about across Europe: “On May 12, 2022 although Gazprom deliveries to the Soyuz gas pipeline through Ukraine were uninterrupted for almost three months of conflict, despite Russia’s military operations in Ukraine, the NATO-controlled Zelensky regime in Kiev closed a major Russian pipeline through Lugansk, that was bringing Russian gas both to his Ukraine as well as EU states, declaring it would remain closed until Kiev gets full control of its pipeline system that runs through the two Donbass republics. That section of the Ukraine Soyuz line cut one-third of gas via Soyuz to the EU. It certainly did not help the EU economy at a time Kiev was begging for more weapons from those same NATO countries. Soyuz opened in 1980 under the Soviet Union bringing gas from the Orenburg gas field.”
Hybrid War, the energy chapter
On the interminable soap opera involving the Nord Stream 1 turbine, the crucial fact is that Canada deliberately refused to deliver the repaired turbine to Gazprom – its owner – but instead sent it to Siemens Germany, where it is now. Siemens Germany is essentially under American control. Both the German and Canadian governments refuse to grant a legally binding sanction exemption for the transfer to Russia.
That was the straw that broke the (Gazprom) camel’s back. Gazprom and the Kremlin concluded that if sabotage was the name of the game, they couldn’t care less whether Germany received zero gas via Nord Stream 1 (with brand new Nord Stream 2, ready to go, blocked by strictly political reasons).
Kremlin spokesman Dmity Peskov took pains to stress “problems in [gas] deliveries arose due to sanctions that have been imposed on our country and a number of companies by Western countries (…) There are no other reasons behind supply issues.”
Peskov had to remind anyone with a brain that it’s not Gazprom’s fault if “the Europeans (…) make a decision to refuse to service their equipment” which they are contractually obligated to do. The fact is the whole Nord Stream 1 operation hinges on “one piece of equipment that needs serious maintenance.”
Deputy Prime Minister Alexander Novak, who knows one or two things about the energy business, cleared up the technicalities:
“The entire problem lies precisely on [the EU’s] side, because all the conditions of the repair contract have been completely violated, along with the terms of shipping of the equipment.”
All that is inscribed into what Deputy Foreign Minister Sergey Ryabkov describes as “a total war declared against us”, which is “being waged in hybrid forms, in all areas”, with “the degree of animosity of our opponents – of our enemies” being “enormous, extraordinary.”
So none of this has anything to do with “Putin weaponizing energy”. It was Berlin and Brussels – mere messengers of Big Finance – which weaponized the supply of European energy on behalf of a financial racket, and against the interests of European industry and consumers.
Beware of the toxic trio
Engdahl has summarized how, “by systematically sanctioning or closing gas deliveries from long-term, low cost pipelines to the EU, gas speculators via the Dutch TTP have been able to use every hiccup or energy shock in the world, whether a record drought in China or the conflict in Ukraine, to export restrictions in the USA, to bid the EU wholesale gas prices through all bounds.”
Translation: casino capitalism at its finest.
And it gets worse, when it comes to electricity. There is a so-called EU Electricity Market Reform in progress. According to it, producers of electricity – from solar or wind – automatically receive “the same price for their ‘renewable’ electricity they sell to the power companies for the grid as the highest cost, i.e. natural gas.” No wonder the cost of electricity in Germany for 2022 increased by 860% – and rising.
Baerbock incessantly parrots that German energy independence cannot be secured until the country is “liberated from fossil fuels.”
According to Green fanaticism, to build the Green Agenda it’s imperative to completely eliminate gas, oil and nuclear power, which happen to be the only reliable energy sources as it stands.
And it’s here that we see the toxic trio Habeck/Baerbock/von der Leyen ready for their close up. They pose as saviors of Europe preaching that the only way out is to invest fortunes in – unreliable – wind and solar power: the “answer” from Providence to a gas price debacle manufactured by none other than Big Finance, Green fanaticism and Eurocrat “leadership”.
Now tell that to struggling pan-European households whose bills will surge to a whopping, collective $2 trillion as General Winter knocks on the door.

(ZH) The "Scariest Paper Of 2022" Reveals The Terrifying Fate Of

The "Scariest Paper Of 2022" Reveals The Terrifying Fate Of Biden's Economy: Millions Are About To Lose Their Job

For much of the past year (and certainly at the time, more than a year ago, when the so-called experts, central bankers and macrotourists were still yapping about "transitory inflation" and other things they were wrong about and do not understand), we were warning that at some point the Fed will realize that it is simply impossible to contain supply-driven inflation through stubborn rate hikes which instead would lead to a dire alternative - millions in mass layoffs and newly unemployed workers ...
... and will revise its 2% inflation target higher, a move which will send every risk asset - from high-beta trash and meme stonks, to blue-chip icons, to bitcoin and cryptos limit up.
To remind readers of this coming phase shift, we most recently warned in June that "at some point Fed will concede it has no control over supply. That's when we will start getting leaks of raising the inflation target"...
Well, it turns out that we were right, and not just about the coming mass layoffs, but also about the inflation target leaks. But first, lets back up a bit.
A little over one year after nobody expected the Fed would be hiking rates like a drunken sailor until some time in late 2023 or 2024, it has now become fashionable to not only predict that the Fed will keep hiking rates at every FOMC meeting and at the fastest pace since the near-hyperinflation of the 1980s, but that the central bank will somehow manage to avoid a hard landing (i.e., the hiking cycle won't end in a recession or depression), even though every single Fed tightening cycle since 1913 has ended in disaster.
An example of this was the statement by former Fed vice chair (and PIMCO's "twice-revolving door") Rich Clarida, who told CNBC that "failure is not an option for Jay Powell," adding that "I think they're going to 4% hell or high water. Until inflation comes down a lot, the Fed is really a single mandate central bank."
Of course, if one could hike rates in a vacuum that could work - after all, Clarida himself, who admits he got this year's soaring inflation dead wrong when he was still a daytrading god and part oft he Fed in 2021, said that the Fed may as well have just one mandate, namely to tame inflation. But what so few seem to recall is that the Fed is "hiking to spark a recession", or as CNBC's Steve Liesman put it, there is no such thing as "immaculate rate hikes" meaning that rate hikes have dire tradeoffs in other sectors of the economy. In other words, if the Fed's intention is to spark a recession, it will spark a recession... leading to millions of Americans losing their jobs, something which even Elizabeth Warren appears to have grasped.
Yet due to the recency bias of Biden's trillions in stimmies, and a world where workers - whether working form home or the office - have virtually all the leverage, few today can conceive of a world where inflation is zero or negative and is instead replaced with millions in unemployed workers, an outcome which one could (or rather should) say is even worse for the ruling democrats than roaring inflation. At least, with runaway prices, most people have a job and their wages are rising (at least nominally, if not in real terms).
However, the higher rates rise, the closer we get to that inevitable moment when the BLS - unable to kick the can any longer - admits what has been obvious to so many for months: the US is facing a labor crisis of epic proportions with millions and millions of mass layoffs. And for those to whom it is not yet obvious, we urge to read a WSJ op-ed published by none other than Jason Furman, who is not some crackpot republican but Obama's own top Economic Adviser from 2013-2017 and currently economic policy professor at Harvard.
In "Inflation and the Scariest Economics Paper of 2022", Furman summarizes a paper written by Johns Hopkins macroeconomist Larry Ball with co-authors Daniel Leigh and Prachi Mishra of the International Monetary Fund released by the Brookings Papers on Economic Activity, whose conclusion is as follows: "To bring price increases down to 2%, we may need to tolerate unemployment of 6.5% for two years."
In other words, just as we said, inflation - much of which is supply-driven, which the Fed can do nothing about - will force the Fed to crush the economy by keeping rates for much longer, the result of which will be many millions in unemployed workers, or as Furman puts it, the paper "shows why the Federal Reserve will likely need to maintain its war on inflation, even if unemployment continues to rise."
What is more remarkable about Furman's read of the economist paper is that in addition to its primary theme (the lack of labor slack, or labor tightness, is responsible for some 3.4% of underlying inflation in July 2022), the paper admits precisely what we have been saying all along - that the Fed can't control supply-side variables:
The paper also argues, convincingly in my view, for a different measure of underlying inflation. Fluctuations in energy and food prices are generally due to factors outside the control of macroeconomic policy makers. Geopolitics and weather have elevated the inflation rate in recent years. Plunging gasoline prices are temporarily lowering the inflation rate now. That’s why economists since the 1970s have focused on “core” inflation, which excludes food and energy.
But food and energy aren’t the only things people buy that are subject to supply-side volatility. Prices of new and used cars, for example, have gyrated over the past two years for reasons that are mostly unrelated to the strength of the overall economy. Both regular and core inflation are based on taking averages of price increases and can be distorted by large changes in outlier categories. The median inflation rate calculated by the Federal Reserve Bank of Cleveland drops outliers to remove these distortions.
According to Furman, median inflation - which is a statistically better measure of the underlying inflation that policy makers can actually control - is well above the Fed’s preferred headline inflation print (which fell to zero in July on a sequential basis and has stabilize) and shows no sign of moderating and has run at a 6.6% annual rate in the last three months.
But the "scariest" part of the new paper, Furman reveals, is when the authors use their model to forecast the unemployment rate that would be needed to bring inflation down to the Fed’s 2% target. He explains why this is so scary:
The authors present a range of scenarios, so I ran their model using my own assumptions... Under these assumptions, which are more optimistic than the authors’ midpoint scenario, if the unemployment rate follows the Federal Open Market Committee’s median economic projection from June that the unemployment will rise to only 4.1%, then the inflation rate will still be about 4% at the end of 2025. To get the inflation rate to the Fed’s target of 2% by then would require an average unemployment rate of about 6.5% in 2023 and 2024.
Where is unemployment now: it's 3.7% (6.014 million unemployed workers vs 164.746 million civilian labor force). This matters, because according to one of the most erudite economist Democrats, by the end of the Biden admin in 2024, the unemployment will have to soar to 6.5% for inflation to plunge to the Fed's historical target of 2.0%
What does this mean in absolute numbers? Assuming a modest increase in the US labor force, a 6.5% unemployment rate in 2024 would translate into no less than 10.8 million unemployed workers, an 80% increase from the 6 million today!
Still think that politicians - and especially Democrats - will sit quietly and blindly ignore how high the Fed is hiking rates if it means that to normalize inflation back to 2% it means nearly doubling the number of unemployed Americans (and a crushing recession to boot). Spoiler alert: no, they won't, and this may be one of the very rare occasions when Elizabeth Warren is actually right to worry about what the coming mass layoff wave means for Democrats... and the 2024 presidential election.
So what should the Fed do? Well, according to Furman, the Fed has four options:
  1. First, place more emphasis on the ratio of job openings to unemployment and median inflation as it assesses the tightness of labor markets and the underlying rate of inflation.
  2. Second, the new paper shows how much easier it will be to tackle inflation if expectations remain under control. The Fed should follow up on Chairman Jerome Powell’s tough talk at Jackson Hole with meaningful action such as a 75-basis-point increase at the next meeting.
  3. Third, be prepared to accept the unemployment rate rising above 5% if inflation is still out of control.
While we doubt #3 is actionable, what is more remarkable is Furman's final proposal: it's the one that, like the Dude's proverbial rug, ties the room together and sets the stage for what is coming:
Finally, stabilizing at a 3% inflation rate is probably healthier for the economy than stabilizing at 2%—so while fighting inflation should be the central bank’s only focus today, at some point the Fed should reassess the meaning of victory in that struggle.
And just in case his WSJ proves too complicated for some mainstream experts and economists, here it is in truncated, twitter format:
And there you have it: remember what we said on June 21: "At some point Fed will concede it has no control over supply. That's when we will start getting leaks of raising the inflation target." Well... there it is.
And while mainstream economists and the market may require quite a few months to grasp what is coming, it is the only way out of a crisis of commodities - as Zoltan has repeatedly and correctly put it - and which central banks have no control over, and thus will have to move not only the goalposts but the entire football field to avoid a social revolt or something even scarier.
While we wait, we can't help but snicker at what the 79-year-old figurehead in the White House tweeted today...
... because what Biden calls "the strongest economic recovery in recent history" is - even according to Democrats - about to be the biggest economic disaster in modern history.