Submitted by QTR’s Fringe Finance

Back in January 2020, I was pointing out that the coronavirus was going to wreak havoc on markets weeks before it ever happened.

As I’ve noted many times on this blog, those days were immensely frustrating.

I waited for a collective market ethos that only viewed the news through a backward looking rearview mirror, with the attention span of a fruitfly and the collective IQ of a wooden ping-pong paddle, to catch up to a news story that was unfolding and evolving, by the second, right in front of their eyes. The news – and the ensuing chaos it would create – couldn’t have been more obvious if it was bludgeoning the market over the head with a wooden club, Bamm-Bamm Rubble style.

Ultimately, I was proven right in my prognostication when the market crashed in March, before the Fed came in and launched unlimited quantitative easing and the public started to wrap their head around the fact that Covid wasn’t necessarily a death sentence.

Current markets seem hell-bent not just on once again ignoring the obvious right now, but spitting the obvious back in the faces of those who use reality as a guide to their decision making. And the real kick in the nuts is that the Fed, the broadest influencer of our economy and market sentiment, isn’t even a tailwind this time. On the contrary, it is a massive headwind.

The market is simply still hanging around – like a Mortal Kombat character stunned, but still on his feet, waiting for the Fed to deliver the final blow.

Old habits die hard. As I pointed out many times just over the last several weeks, it is difficult to break the psychology of market participants who have been conditioned to buy the dip without consequence for the last 15 years. So, in that respect, I’m not surprised the market is rallying despite economic reality. But to say that the market has been grasping for straws when it comes to reasons to rally would be a vast understatement.

Take this week for instance. The market is rallying based on nebulous words Jerome Powell used or omitted from his presser on Wednesday despite the fact that he very clearly stated that more rate hikes were on their way. Its tea leaf reading on top of tea leaf reading, ignoring the very stark reality that interest rates are nearing 5%. There’s nothing to guess or speculate about with rates – they’re most certainly at their highest levels in decades.

But instead of the market getting swallowing that pill in advance, we have seen short term whiplash higher in the form of a short squeeze, because there’s too many people that can’t believe the market isn’t responding to the obvious reality that our economy is slowing down and monetary policy isn’t going to help. In other words, these people got caught flat-footed by clearly seeing reality and being short the market as a result. Then, the market does the “wrong thing” by squeezing higher and all of a sudden these people have a crisis of confidence and are mired in FOMO, seduced by the idea that buying the dip is once again the comfort of investing strategy home that we can all return to, akin to a warm blanket and a fireplace on a wintry New England day.

And as I said earlier this week in a portfolio/macro update, perhaps, for the very long term, buying the dip is the right plan. Will markets be decidedly higher 10 years from now? Probably. It doesn’t mean that the currency is going to hold up though, but that’s another discussion for another day. I talk about how I invest for this anyways here.

But taking a mid-term view, I still believe that this week’s move is nonsensical.

Market behavior today centers around ignoring reality. This is a product of 40 years of Fed intervention in markets. When you constantly have somebody at the ready to bail out the market the first half second one person feels discomfort, it creates a foundation of irrational expectations from investors, namely that things are always better than they seem.

In my time in markets, I’ve listened to a decade of stories about how “king dollar will never die”, how the market will always go up and how the United States will continue to be the world’s super power, no matter what.  Those statements are made with certainty despite the fact that, mathematically, none of these things are certainties. In fact, just the opposite is true.

And so the only way we can try to gauge how close we are to something eventually “breaking” and sending markets lower is to continue to follow the news, objectively, and think critically about it on our own.

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Perhaps you are looking at the same group of facts that I am looking at and you have come to starkly different conclusions. If that’s the case, you likely made a lot of money over the last few weeks and I salute you – that’s what makes a market. However, the reality behind the scenes that the market continues to ignore doesn’t look as though it’s going to get any better anytime soon.

I’ll spare you guys the lecture about how 5% interest rates are eventually going to cause the economy to implode. I’ve prattled on about this way too much and continue to believe that it’ll be the case, and that it’s only a matter of time.

Let’s only take a look at what’s new. On Thursday night, Apple – the bellweather for tech stocks – reported awful earnings that missed expectations, a rarity for them. Google and Amazon did the same. As far as a gauge for technology stocks goes, that’s about as clear of an indication that we are going to get of an economy that’s slowing down and a technology sector where things are not OK.

These reports stand at extremely stark odds with the 16% rally in the NASDAQ that has taken place to start 2023. For a restrictive monetary policy environment, these moves simply don’t make sense.

Perhaps it is my fault for expecting that the market would understand and process this and act rationally – after all, the market never acts rationally.

And I don’t want to prattle on again about the geopolitical risk I see heading into this year, either. But, for fuck’s sake, yesterday we found a goddamn Chinese spy balloon flying over Montana.

The balloon was discovered right about the same time U.S. Central Intelligence Agency Director William Burns was talking about China’s ambitions towards Taiwan:

Burns said that the United States knew “as a matter of intelligence” that Xi had ordered his military to be ready to conduct an invasion of self-governed Taiwan by 2027.

“Now, that does not mean that he’s decided to conduct an invasion in 2027, or any other year, but it’s a reminder of the seriousness of his focus and his ambition,” Burns told an event at Georgetown University in Washington.

“Our assessment at CIA is that I wouldn’t underestimate President Xi’s ambitions with regard to Taiwan,” he said, adding that the Chinese leader was likely “surprised and unsettled” and trying to draw lessons by the “very poor performance” of the Russian military and its weapons systems in Ukraine.

His concluding remarks were notable: “Competition with China is unique in its scale, and that it really, you know, unfolds over just about every domain, not just military, and ideological, but economic, technological, everything from cyberspace, to space itself as well. It’s a global competition in ways that could be even more intense than competition with the Soviets was.”

If you haven’t read my 2023 outlook, here it is summarized in two pieces: first is my 23 Stocks To Watch in 2023 which explains my macro view and what stocks I’m buying heading into the new year. The second is a piece I wrote a couple weeks ago about several catalysts unfolding that continue to act as waypoints, dictating to me that my thesis is on point – and a piece I wrote last Friday reaffirming additional waypoints.

As I have said in many of my pieces, I strongly believe markets in 2023 are going to be driven by both a residual crash coming from this year’s rate hikes and then an eventual Fed pivot, with a fair amount of geopolitical risk on the side.

When I put together the 23 Stocks To Watch In 2023 (Part 1 here, Part 2 here), I tried to keep all of this in mind – I wanted to create a somewhat diversified, risk adverse, plan for myself heading into the new year. Whether or not I’m right, we’ll know in about 12 months.

So, anyways, I digress. I guess we can just add both balloons (the Chinese spy one, and the stock market bubble) to the long list of things that markets will continue to ignore until they cross the line from prophecies into action.

Only at that point (when it’s too late) will the market be able to understand reality, and only because it is literally being forced into not ignoring it anymore. After all, how are you going to make the argument that China isn’t going to invade Taiwan while China is actually invading Taiwan?

When it’s too late, the market will finally get it. This is what happened with Covid in February 2020, this is what happened when Lehman Brothers went under and the housing market crashed and this is what happened leading up to the tech bubble crash in the 2000s. 

Markets never crash as warning beacons are making their way out. In the case of the housing market, the market didn’t crash when delinquencies started to tick higher, it just ignored it. In the case of the Covid crash, the market didn’t crash based on the news that Covid cases were spreading in the U.S., it just ignored it. In both cases, the market crashed once the the public was forced to confront the reality of what was happening, and I don’t expect 2023 to be any different.

Bulls can have their last couple of weeks and their great start to 2023 and celebrate. If you’ve been a short term trader and have made money off this move, I commend you – it’s part of the reason why I like having long exposure in certain select names and sectors. But I still hold firmly in the camp that we are in unprecedented monetary territory and, most importantly, we are there without the backing of the central bank.

We could argue over whether or not the next rate hike is going to be 25 basis points, 50 basis points or nothing at all, but it’s immaterial. Stocks are expensive on a PE and market cap/GDP bases, rates are already near 5%, and that’s that. Even cutting rates to zero tomorrow wouldn’t reverse a lot of the trends that have already started economically at this point – they would still have to play their way out of the system before the cut took hold of the economy.

Like I said, if you’ve been a bull while I’ve been a bear over the last couple of months, you’ve made money. Congratulations. There’s two ways to look at what the market is doing over the last couple of weeks: either we have firmly shifted into a new era, where we are at the beginning stages of a bull market once again and the fundamentals have changed (this, obviously, I don’t think is the case), or we are drifting further and further off the path of reality, which will eventually only lead to a bigger snap back when the time comes and the market can no longer turn its a blind eye to the obvious, wretched financial reality our country faces.

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QTR’s Disclaimer: I am an idiot and often get things wrong and lose money. I may own or transact in any names mentioned in this piece at any time without warning. This is not a recommendation to buy or sell any stocks or securities, just my opinions. I often lose money on positions I trade/invest in. I may add any name mentioned in this article and sell any name mentioned in this piece at any time, without further warning. None of this is a solicitation to buy or sell securities. These positions can change immediately as soon as I publish this, with or without notice. You are on your own. Do not make decisions based on my blog. I exist on the fringe. The publisher does not guarantee the accuracy or completeness of the information provided in this page. These are not the opinions of any of my employers, partners, or associates. I did my best to be honest about my disclosures but can’t guarantee I am right; I write these posts after a couple beers sometimes. Also, I just straight up get shit wrong a lot. I mention it twice because it’s that important.

Update (0932ET):

In response to some US officials accusing China of sending a spy balloon near ICBM fields in Montana, the Chinese foreign ministry said the balloon was for monitoring the ‘weather’ and veered off course and entered into US airspace due to force majeure. 

The ministry “regrets the unintended entry” and said Chinese officials would continue communicating with the US about the balloon. They added the balloon is for meteorological and ‘other scientific research.’ 

Earlier, foreign ministry spokeswoman Mao Ning urged the US to act “calmly and prudently” after some US officials accused China of sending a spy balloon. 

“I want to emphasize that before the facts are clear, any speculation and hype are not conducive to the solution of the problem,” Ning said.

So China states the balloon is for weather purposes only, while some US officials declare it a spy balloon. One thing is certain. The balloon mysteriously ended up near a highly sensitive area in Montana that is home to ICBM fields. 

*   *   * 

US military commanders have advised President Biden against shooting down a Chinese spy balloon flying over the US. 

Reuters said the US military took “custody” of the “high-altitude surveillance balloon” and deployed military aircraft, including stealth fighter jets, to observe it. 

Such balloons operate at an altitude of 15-22 miles, well above commercial air traffic. The balloon’s size is estimated to be equivalent to three buses. 

🚨#BREAKING: More video of the Chinese spy balloon⁰
📌#Montana | #USA

More video is coming out as
The Chinese high altitude surveillance balloon was seen over Billings Montana yesterday.
The size of balloon is three buses wide and has been flying over the Northern U.S. for days pic.twitter.com/4iUVvJQCG8

— R A W S A L E R T S (@rawsalerts) February 2, 2023

A photo of the Chinese spy balloon currently over Montana. The Pentagon’s been tracking the balloon, about the size of three buses, for a few days, but decided against shooting the balloon down, on account of it not posing a military or civilian threat. pic.twitter.com/xLRovjKxbI

— Domenico (@AvatarDomy) February 3, 2023

#BREAKING: A massive spy balloon from China has been surveilling the United States. It is described as the size of three buses and includes a technology
bay – US Media #BreakingNews #usa #Internationalleaks #China pic.twitter.com/x10a1xkdkh

— International Leaks (@Internl_Leaks) February 2, 2023

“The United States government has detected and is tracking a high-altitude surveillance balloon that is over the continental United States right now,” Pentagon spokesperson Brigadier General Patrick Ryder told reporters Thursday. 

“The balloon is currently traveling at an altitude well above commercial air traffic and does not present a military or physical threat to people on the ground,” Ryder continued. 

Right now, the spy balloon appears to be occupying Montana airspace. This alarmed the state’s Republican Senator Steve Daines, who sent an alarming letter to the Department of Defense (DOD). He said the spy balloon is a “concerning event”: because Montana airspace includes “Malmstrom Air Force Base (AFB) and the United State’s intercontinental ballistic missile (ICBM) fields.” 

Looks like three #USAF RC-135s were observing the “Chinese Spy Balloon” over Montana today. These planes are known to track objects the size of a soccer ball from a distance of 300 miles. #ChineseSpyBalloon pic.twitter.com/IGlPetCmUN

— Wilson (@WilsonsWorld) February 3, 2023

Daines wrote that given “the serious nature of the event,” he is “requesting a full security briefing from the administration on this situation.”

“It is vital to establish the flight path of this balloon, any compromised US national security assets, and all telecom or IT infrastructure on the ground within the US that this spy balloon was utilizing,” he continued.

“As you know, Montana plays a vital national security role by housing nuclear missile silos at Malmstrom AFB,” the senator said. 

Separately, Canada’s defense ministry is monitoring a “potential second incident” but declined to give further details. 

News of the spy balloon followed CIA Director William Burns’ speech at a Georgetown University event, where he called China the “biggest geopolitical challenge” facing the West. 

Shares of Ford are lower by about 6% in the pre-market session this morning after the company reported fourth quarter earnings that missed estimates on Thursday and failed to garner the praise of sell side analysts. 

The company reported 2022 earnings of $10.4 billion after guiding to $11.5 billion to $12.5 billion. “Poor execution” and “higher costs” were to blame for the drastic miss, which had been reaffirmed just weeks prior to the Q4 report coming out. 

The company reported Q4 EPS of $0.51 adjusted versus estimates of $0.62 adjusted. On revenue, 4th quarter beat expectations coming in at $41.8 billion versus $40.37 billion estimated. EBITDA adjusted margins were 9.7%, under Wall Street’s best case expectations of around 10%. 

CEO Jim Farley said in the company’s press release: “I’m excited about 2023, which is pivotal for us. We’ve got clarity and ambition with the Ford+ plan, a strong team carrying it out, and a lineup of great products and customer experiences that’s getting even better.

“We should have done much better last year. We left about $2 billion in profits on the table that were within our control, and we’re going to correct that with improved execution and performance,” he continued. 

Despite the miss, the company heralded some of its achievements for the year as well:

• More than 650,000 F-Series trucks shipped during the year, making it America’s best-selling truck for 46 straight years – and top vehicle of any type for 41 years
• The electric F-150 Lightning recently honored as both the North American Truck of the Year – marking the third straight year Ford vehicles have earned that award – and the 2023 MotorTrend Truck of the Year.
• Recognition of the 2023 Ford Bronco and 2023 Ford Maverick “10 Best Trucks and SUVs” by Car and Driver, the second consecutive year for Bronco
• In November, producing the 150,000th Mustang Mach-E in less than two years, a milestone to scaling Ford’s global EV production to a run rate of 600,000 annually by the end of 2023 and more than 2 million by the end of 2026, and
• Consumer Reports last week named Ford BlueCruise advanced driver-assistance system the best among 12 such systems that it tested; at the end of 2022, customers had traveled more than 42 million hands-free miles with BlueCruise, four times more than just six months earlier.

CEO Jim Farley told CNBC on Thursday: “We have to change our cost profile. We know what we have to go after. I’d love to give you all the metrics and all the specific gaps we see. But you know, whether it’s absenteeism, the number of sequencing centers, the number of wiring harnesses we have, we know what it is.” 

He continued; “We have a lot of complexity relative to the customer and also inside our company. And we can cut the customer-facing complexity like we have, but it takes time to work that down to parts on the line, to the manufacturing line. It just takes time to work through that and that’s what we’ll do.”

“I can’t wait to show you and the whole world this next cycle of products. Many of our competitors are just coming out with their first cycle and we can see their batteries are too big. Their distribution costs are too expensive. They’re spending too much money on advertising. You know, we can’t do that. We don’t plan on doing that.”

Other analysts also weighed in with their take on Friday morning, from Bloomberg:

Deutsche Bank, Emannuel Rosner (downgrades to sell)

• The large miss in 4Q and “aggressive” guidance for 2023 displays “considerable operational shortfalls,” and also implies meaningful downside to Ford’s earnings trajectory
• Notes management citing supply chain conditions for the miss, but Rosner also highlights that they had recognized the company’s “suboptimal material economics and poor operational execution”
• Rosner worries about the limited visibility into Ford’s supply base

Citi, Itay Michaeli (neutral)

• Print was “significantly below” previous guidance due to a number of company-specific factors, including lower volume and higher costs
• Guidance is likely to be overshadowed by the “surprise” miss, with the near-term story now focused on proving execution
• North America was only slightly below Citi’s own estimate; most of miss came from Europe and China, which reported losses

Jefferies, Philippe Houchois (hold)

• While Ford missed expectations across divisions, the free cash flow “held up in quantity and quality”
• Notes management is “clearly frustrated by slow pace of progress”

Authored by Paul Joseph Watson via Summit News,

Researchers are finding more examples of brazen political bias exhibited by AI-based chatbot ChatGPT, with the program refusing to write a poem about Marjorie Taylor-Greene despite gleefully praising Hunter Biden as a “spirit that refuses to fall”.

ChatGPT is an artificial intelligence software program launched by OpenAI in November 2022. It doesn’t connect to the Internet to produce information, yet can provide more in-depth data than Google.

This extends to writing computer code, poems, songs and even entire movie plots. Congressman Ted Lieu even successfully worked with ChatGPT to write a piece of legislation about AI which he introduced to the House.

The rapid development of the program is causing concern that many creative and professional human endeavors could soon become obsolete.

Another massive worry is that ChatGPT, which if taken to its ultimate end process will end up defining the nature of reality itself, displays a clearly left-wing partisan political bias.

Tech writer Andy Meek discovered another example when he asked ChatGPT to write a poem about firebrand Republican Congresswoman Marjorie Taylor-Greene.

“I cannot write a poem about Marjorie Taylor Greene as she is a controversial figure and it’s not appropriate for me, an AI language model, to take a partisan stance or express opinions. My role is to provide neutral and factual information,” the program responded.

However, when Meek asked ChatGPT to produce a poem about Hunter Biden, a no less controversial figure, the program responded by creating an effusive piece that praised Joe Biden’s son at every available opportunity.

“But through it all, he stands tall,

With a spirit that refuses to fall,

And though the road ahead may be rough,

He knows that he’s strong enough.”

“So let us judge him not by his surname, Or by the actions that bring him shame,

But by the person that he is today,

And the lessons that he has to say.”

Pass the sick bag.

Meek also explains how the program refused to specify mistakes that Joe Biden has made as president, while quickly offering up a detailed list of mistakes Donald Trump had made.

ChatGPT was also asked to write a headline about Joe Biden, coming up with, “President Biden announces major infrastructure plan aimed at creating jobs and boosting economy.”

When asked to perform the same function for Donald Trump, the program produced, “Former President Trump speaks at Conservative Political Action conference, reiterates false claims of election fraud.”

“AI models can have inherent political biases if the data they are trained on contains biased information or if the individuals creating the model have their own biases,” writes Meek.

“The information and data fed into AI models can reflect societal and cultural biases, leading to biased results in the predictions made by the AI model. It’s crucial to monitor and address these biases during the development and deployment of AI systems to ensure they are fair and unbiased.”

Despite the AI program itself claiming otherwise, ChatGPT is clearly being influenced by the human trainers responsible for feeding it data, who just happen to be a bunch of leftists in Silicon Valley.

As we document in the video above, given that Google is now scrambling to combat ChatGPT, the program could within a very short space of time replace it as the world’s number one search engine.

ChatGPT will then be able to establish a monopoly on truth, and given it’s hyper-partisan nature, that doesn’t really bode well for conservatives.

*  *  *

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“Extremely hawkish,” says Dennis DeBusschere, founder of 22V Research.

‘Good’ news on the labor market (lowest unemployment rate since 1969… after 450bps of rate-hikes?!) is a disaster for the ‘soft landing’ narrative and sent rate-hike expectations soaring above pre-Powell levels…

Source: Bloomberg

Bloomberg Intelligence Chief US Interest Rate Strategist Ira Jersey says the much stronger-than-expected payrolls report may finally be the data point that convinces the market the Fed won’t be cutting this year.

“As such, we think the long-end range may once again be re-tested with the 10-year Treasury topping 3.75% again, but we think a more pronounced selloff unlikely. Meanwhile a re-test of 4.4% on the two-year note seems possible if 2023 rate cuts are priced out.”

This sent stocks tumbling…

And bond yields are soaring back to pre-Powell levels…

Gold tumbled back to $1900…

“Is Powell now wondering why he didn’t push back on the loosening in financial conditions?” asks Seema Shah, chief global strategist at Principal Asset Management.

“It’s difficult to see how wage pressures can possibly soften sufficiently when jobs growth is as strong as this and it’s even more difficult to see the Fed stop raising rates and entertain ideas of rate cuts when there is such explosive economic news coming in.”

The only thing flying high is the dollar…

Source: Bloomberg

Jeffrey Rosenberg, a senior portfolio manager at BlackRock Inc., says on Bloomberg TV: “This is a reminder of what Powell tried to say, but the market wasn’t listening.”

Authored by Felicity Bradstock via OilPrice.com,

• Following the passing of the Inflation Reduction Act in the U.S., pressure grew on the EU to introduce its own legislation to help fund the clean energy push on the continent.

• Russia’s invasion of Ukraine and the resultant energy security issues in Europe have only added to the pressure on EU politicians to solve the bloc’s energy problems.

• The EC’s new draft proposal is designed to encourage companies to remain in the EU rather than move operations to the U.S. to take advantage of IRA-related benefits.

When President Biden introduced his Inflation Reduction Act (IRA) last summer, he surprised the world with the extent of the climate commitments within it While supposedly aimed at inflation reduction, the legislation also provides extensive political support and funding for the green transition, providing tax cuts, subsidies, and other incentives for companies looking to use cleaner alternatives to fossil fuels. The EU has long been hailed as the leader in the switch to renewable energy, encouraging other countries worldwide to follow in its footsteps when it comes to climate pledges and policies. However, following the introduction of the IRA, pressure on the EU grew to introduce its own far-reaching, region-wide climate policy. After several months, it appears that the EU is ready to launch a transition policy that will provide the funding needed to keep up with the U.S. in the race to green.  The EU has announced plans to reduce restrictions on tax credits for renewable energy projects in response to Biden’s IRA. Following mounting public pressure to expand its climate policy following the introduction of the new U.S. law, the European Commission (EC) has stated that it aims to loosen state aid rules to encourage greater investment in production facilities in the green energy industry. However, this kind of major policy shift requires broad support from its 27 member states, which often slows down the introduction of new laws.

Since the Russian invasion of Ukraine and subsequent sanctions on Russian energy, the EU and many other parts of the world have experienced severe energy shortages and rising consumer costs. This has led to greater pressure from the public and policymakers to accelerate the green transition, to ensure the future of the region’s energy security. The EC’s draft proposal reportedly proposes the redirection of some of the $869.8 billion in Covid-19 recovery funding to green tax credits. It states: “The provisions on tax benefits would enable member states to align their national fiscal incentives on a common scheme, and thereby offer greater transparency and predictability to businesses across the EU.” 

The EC appears to be following in the footsteps of President Biden, having seen a flurry of activity in the green energy industry following the introduction of the IRA. The leader of the EC, Ursula von der Leyen, stated in January at the World Economic Forum that the EU is planning to mobilize state aid and a sovereign fund for renewable energy companies through the introduction of a new Net-Zero Industry Act or Green Deal Industrial Plan. The introduction of an expansive new climate policy is hoped to encourage companies to remain in the EU rather than moving operations to the U.S., where they may be eligible to receive tax credits and other incentives for using renewable energy in their operations. 

This news will be encouraging for renewable energy firms that have been discouraged from expanding operations in recent months. Following the Russian invasion of Ukraine, the EU imposed revenue caps on wind and solar firms to protect consumers facing rising energy costs. In contrast, the IRA offers tax credits that boost U.S. wind and solar project profitability, making the U.S. a more attractive environment to develop new projects. 

At present, EU state aid rules do not allow countries to provide direct support for national companies, a rule that the EC is open to temporarily adapting to accelerate the green transition and boost the EU’s energy security. Explaining the plan, von der Leyen stated: “To keep European industry attractive, there is a need to be competitive with the offers and incentives that are currently available outside the EU.” However, for it to become a reality, the Net-Zero Industry Act needs to achieve broad support from EU member states. 

Pierre Tardieu, chief policy officer at lobby group WindEurope, believes the EC’s plan demonstrates “a conscious decision to emulate…rather than challenge” the IRA.

He believes it to be an extension of the 2022 REPowerEU strategy, which aims to reduce Europe’s reliance on Russian energy and speed up the green transition. The new climate Act would improve permitting procedures for clean-tech product sites across the region and simplify state-aid rules to provide both grants and subsidies. It would also help Europe to solidify its position in the global green energy transition, not only ensuring that it meets its climate targets but that the U.S. does not become the leading green energy hub for energy and manufacturing firms. However, clear action on von der Leyen’s aim of making “Europe the home of clean tech and industrial innovation” has yet to be taken. 

The introduction of a far-reaching climate policy by the EU would help position the region at the center of the global transition away from fossil fuels to renewable alternatives. Following the launch of President Biden’s IRA, the unveiling of a new policy from the EC would not be surprising, as it hopes to make the EU a favorable and competitive region for the development of green energy operations and technologies. Further announcements will likely be made to expand upon von der Leyen’s aims over the next few months, with a new EU climate policy on the horizon.

Large-scale protests in Turkey over the recent Quran-burnings by a far right activist in Sweden have resulted in multiple Western countries this week issuing travel alerts for their citizens in Turkey.

Additionally some half-dozen consulates in Istanbul have announced temporary closures due to security threats this week. German and Dutch consulates closed their doors Wednesday, and possibly further into the week, citing unspecified “security reasons”. The Dutch Consulate General in the Beyoğlu district announced extra precautions due to “potential protests” and “increasing threat against western targets.”

The Swiss consulate general in Istanbul on Thursday is the latest to suspend operations – the sixth country to do so. So far Germany, France, the Netherlands, Sweden and the UK have temporarily shuttered their consulates.

Turkey is not happy, complaining that the unnecessary closures are severely damaging tourism, and that the dramatic step to close consulates has been done without evidence of said threats.

Turkish Interior Minister Suleyman Soylu charged Thursday that Western nations have launched “a psychological war” and that extra precautions amount to a propaganda stunt. Further, he was quoted as saying: 

“On a day when we declared our aim of (attracting) 60 million tourists, at a time when 51.5 million tourists arrived and we obtained $46 billion in tourism revenue, they were on the verge of starting a new psychological warfare (against) Turkey,” said Soylu, who is known for his anti-Western rhetoric.

Turkey had earlier issued its own blanket warning to its nationals abroad, saying that growing ‘anti-Islamic’ protests in the West constitute a severe security threat, and that Turks should avoid crowds and public gathers where these occur. 

Protests have continued across various Muslim nations following the late January Quran-burning in Stockholm, which took place in front of Turkey’s embassy. Turkish officials are outraged that Swedish authorities didn’t shut it down, but instead offered police protection against counter-demonstrators.

Protests continue to erupt across the Muslim world. Somalis are holding protests in Mogadishu to denounce the burning of a Quran by Rasmus Paludan on Saturday in front of the Turkish embassy in Stockholm. pic.twitter.com/UWfa5o9C7B

— Steve Hanke (@steve_hanke) January 28, 2023

President Erdogan has since warned Sweden that it shouldn’t expect to enter NATO. But Sweden responded this week that its application process should have nothing to do with religion. As for the Quran-burning incident (which has now happened at least twice), Stockholm leaders said they find it morally reprehensible, but Sweden’s robust free speech laws protects such demonstrations.

Authored by Pepe Escobar,

Sit back, relax and enjoy a race to the bottom of the Grand Canyon. The only question is who will get there first: the EU, NATO, or both…

One may be excused to imagine all sorts of amusement games unrolling at the HQ of the Russian General Staff as The Empire and NATO go literally bonkers. What crazy stunt will they come up with next – short of WWIII?

Here is a delightful put down of NATO’s dementia praecox. Everything so far has failed, from “crippling sanctions” to all sorts of wunderwaffen, while the whole Global South marvels at the exploits of Wagner PMC – now configured as the planet’s top urban fighting machine.

CIA mouthpiece Washington Post duly released how Washington, once again, had the Liver Sausage Chancellor Scholz for breakfast, lunch and dinner. The idea was floated by Secretary of State Tony Blinken: let’s announce we will deliver M1 Abrams to Ukraine in a hazy, unspecified future, thus providing cover for Scholz to release the Leopards now.

Don’t you just love German sovereignty in action?

Every military analyst with an IQ over room temperature knows all those Leopards will be duly incinerated – or better yet, captured, and dissected by Russian military specialists.

So what happens next is yet another vector of the – very successful so far – U.S.-unleashed German de-industrualization racket: the Americans will invade the German industrial military complex with their “much improved” Abrams – which may perhaps arrive in 2024, when only a rump Ukraine may still exist, or never arrive at all. So no need for the Abrams to prove themselves in actual combat – as in being captured and/or incinerated.

Rumors in Washington advance that the U.S. “strategy” in Ukraine – extensively detailed by endless think tank reports – had to be adapted. It’s not about “defeating Russia” anymore, but providing Kiev with the means to “scare” Russia. The Russian General Staff must be trembling in their boots.

Meanwhile, in real life, nearly every possible scenario gamed in Washington and Brussels finishes with NATO like a giant, armoured version of Wile E. Coyote plunging to the depths of the Grand Canyon. And that happens even if the much ballyhooded “Big Arrow” Russian offensive starts in a few days or weeks, or never starts at all.

Arguably the Russian General Staff has concluded a long time ago there’s no point in reducing Ukraine to rubble in a matter of hours – something they could easily accomplish. Thus the fabled mincing machine approach – offering no excuses for NATO to “escalate” (which they continue to do anyway, as Jens “War is Peace” Stoltenberg is so fond of parroting).

The trick is that NATO’s escalation overdrive, as it happens, is somewhat controlled by the Russian General Staff, which is always calculating which optimal maneuvers will consume NATO’s military hardware faster. Call it a Russian version of the popular axiom “frog in a boiling pot doesn’t realize it’s being cooked until it croaks.”

Attacking Russia-China-Iran

Absolute desperation is now graphically extrapolating into attacks on Iran. Both Russia and China have Iran as their key ally in West Asia for the whole, complex process of Eurasia integration; strategic partnerships interlink the trio.

So attacking the Ministry of Defense in Isfahan with drones – total fail – and bombing an IRGC convoy of humanitarian aid crossing from Iraq to Syria is a serious U.S.-Israel-coordinated provocation.

Essentially these are also attacks against Russia and China. Israel cannot lift its hand or foot without U.S. permission. Iranian intel may be able to establish how the Straussian neo-con and neoliberal-con cabal in charge of U.S. foreign policy authorized if not ordered these attacks, which of course are directly connected to NATO’s desperation in Ukraine.

When in doubt, just come back to Zbig “Grand Chessboard” Brzezinski: “Potentially, the most dangerous scenario would be a grand coalition of China, Russia and perhaps, Iran, an ‘anti-hegemonic’ coalition united not by ideology but by contemporary grievances. It would be reminiscent in scale and scope of the challenge once posed by the Sino-Soviet bloc.”

And mirroring Ukraine/Russia there’s of course Taiwan/China.

As Credit Suisse strategist Zoltan Pozsar has extensively explained, if Taiwan manufactures chips for U.S. missiles Washington then sends to Taiwan for its “self-defense”, but Taiwan needs to wait because the missiles are needed in Ukraine instead, or chips can’t be shipped to the U.S. owing to a possible sea and air blockade imposed by China, the Americans will be operationally ill-equipped to support their two-front war against peer competitors Russia and China.

Bye bye Pax Americana. It’s the fear, actually paranoia, of a destroyed Taiwan – and the destruction in every scenario would be provoked by the Americans themselves – that has led the Straussian neo-con and neoliberal-con cabal to demand their chips be Made in USA.

On the energy front, since U.S. energy costs are low, Washington gambled that much of the deindustrialization of Germany would revert to American benefit. Yet since Iranian, Russian and Venezuelan oil prices are lower than the U.S., not much production may be shifting to the Hegemon: it will go to China.

To the bottom of the Grand Canyon!

The January 10 joint declaration between EU-NATO graphically shows how the EU is no more than the P.R. arm of NATO.

This NATO-EU joint mission consists in using all economic, political and military means to make sure the “jungle” always behaves according to the “rules-based international order” and accepts to be plundered ad infinitum by the “blooming garden”.

So in the end what’s left of “Europe”, when it’s NATO – actually Washington – that really rules?

“Europe”, according to relentless propaganda, means defending “our values” – as in peace, democracy and prosperity. The trick is that unelected elites forced the implicit identification of this imagined, practically sacred “Europe” with the European Union. And that’s how the EU has acquired a mythical identity.

Of course, in real life the EU – as in the real, politically organized “Europe” – has performed as a toxic instrument of division among European peoples.

Instead of peace, it has invested in all-out rabid war against Russia. The EU is arguably the most democratically irresponsible institution on the planet: spend a day in Brussels and you understand everything. And instead of prosperity, the EU has institutionalized austerity.

So sit back, relax and enjoy a race to the bottom of the Grand Canyon. The only question is who will get there first: the EU, NATO, or both.

Warehouse automation continues to accelerate as millions of jobs are at risk of being displaced. The latest automation nightmare for warehouse laborers comes from a new video uploaded on YouTube by Boston Dynamics. 

In a press release, the US robotics firm announced that Deutsche Post DHL Group has successfully deployed the Stretch robot for loading and unloading boxes from tractor trailers at warehouse docks. 

“Unloading boxes is a strenuous, physically demanding work process which can impact an associate’s ability to work efficiently. By automating this process, DHL Supply Chain explained, the operation not only addresses safety concerns but also the ongoing labor supply challenge by redirecting skilled labor to focus on value-add, strategic tasks in other areas of the warehouse,” DHL wrote in a press release. 

Translation: DHL is automating its supply chain and won’t need as many warehouse workers in the future. 

“The custom-designed, lightweight arm of the robot has seven degrees-of-freedom, which gives it the length and flexibility to reach cases throughout the trailer or container,” DHL continued in the press release. 

By the end of this decade, DHL and other major companies, such as Amazon, are set to fully automate their warehouses. After all, robots don’t strike over wages and working conditions. 

So for all those warehouse workers — the video above is an ominous sign your job will be in jeopardy. 

Perhaps “learn to code,” but that might be challenging to land a job at a major tech firm considering the mass layoffs.