After West Rejected Putin’s Overture, Document Of Ukraine’s Surrender To Be Next Proposal: Kremlin
The Kremlin has continued blasting the international Ukraine peace summit which was held in Burgenstock, Switzerland over the weekend, with spokeswoman Maria Zakharova highlighting that the Alpine “get-together” produced zero results.
Though there were almost 100 countries represented, Zakharova said that this attempt to involve as many countries of the Global South as possible “has failed”. She further described that the whole effort at putting on a “universal event” while at the same time talking more weapons deliveries to Kiev behind the scenes was all about trying to “camouflage” the West’s continued aggressive intentions.
Decrying the Zelensky peace formula, she added that “Its authors in the United States and on Bankovaya Street are trying to portray it as the only foundation for a peace settlement.”
Notably Saudi Arabia, India, South Africa, Thailand, Indonesia, Mexico and the UAE did not sign the summit’s final communique. Additionally, Brazil was present as an “observer” but also did not sign.
They are not interested in peace in Ukraine, they need further confrontation, escalation and expanded hostilities to implement their unrealizable dream of inflicting a “strategic defeat” on Russia.
Just the day prior to the start of Saturday’s two-day Swiss summit, President Putin had listed key conditions for peaceful settlement, centered on Ukrainian troops leaving the four annexed eastern territories, as well as Kiev giving up all aspirations to join NATO.
Leaders gathered in Switzerland had rejected the overture as but more “propaganda” – and said it would be tantamount to Ukraine’s total capitulation.
The Kremlin now says that the next formal proposal on the horizon will be a document of the Ukrainian government’s surrender. This was stated by Russia’s chief delegate to the Vienna talks on military security and arms control, Konstantin Gavrilov, in a Rossiya-24 television interview.
“There are points of no return. The next thing that Russia will have to offer will be the document about [the Kiev government’s] surrender,” he said. He called last week’s proposals by Putin “realistic” and said they could end the war if they were embraced.
The joint communique issued by the Ukraine Peace Summit in Switzerland is the most bland and unremarkable document that probably could’ve been produced. The main points are that nuclear facilities must be safeguarded, global food security must be uninterrupted, and Ukrainian… pic.twitter.com/7c0Swyy7kn
“Ukrainian troops must be completely withdrawn from the Donetsk People’s Republic, the Luhansk People’s Republic, Kherson and Zaporizhzhia regions,” Putin had said in a televised address. “As soon as Kyiv says it is ready to do this and begins really withdrawing troops and officially renounces plans to join NATO, we will immediately — literally that very minute — cease-fire and begin talks,” he asserted.
But Italian Premier Giorgia Meloni on Saturday echoed the consensus of leaders gathered with Zelensky in Burgenstock, on Saturday saying this “seems to me more like a propaganda move than a real one.”
“If President Putin’s proposal is: We are willing to have a peace negotiation if Ukraine recognizes the invasion of Ukraine and gives up the occupied parts… doesn’t seem particularly effective to me as a proposal,” Meloni said.
Ryanair CEO Michael O’Leary asserted that the asylum system was “a complete scam” and that such individuals “are not refugees” because they are arriving from safe countries and then flushing their passports down the toilet.
O’Leary made the comments during an appearance on the Newstalk radio station.
The airline boss was asked how people are able to arrive in Ireland on Ryanair flights without proper documentation or being able to prove their identities.
“Yeah because they flush them down the toilet, they arrive at Dublin airport and they flush them down the toilet,” he responded.
“It’s a complete scam, these people are not refugees” says Ryanair CEO Michael O’Leary on Newstalk pic.twitter.com/s4k8MM1fGw
O’Leary said non-EU visitors to Ireland had to have their passports photographed at the border control desk so the details could be sent to the government, but that this was impossible with economic migrants.
“They show up here…it’s a complete scam and these are not refugees, one of the things that drives me nuts in Ireland is we treat people as refugees who are coming from the UK or from France,” he complained.
“Nobody got to Ireland from Afghanistan or from Kenya or from Nigeria or from Syria on a direct flight because there aren’t any, so you’re not fleeing persecution in the UK or in Germany, O’Leary added.
“We should look after refugees, I have great sympathy for the Ukrainians, but people who are arriving here from the UK, France or other EU countries, we should be turning them back saying, here back to the EU countries where you came from.”
O’Leary said it was difficult to track what flight the migrants were on or what seat they were sitting in “because they tear up or flush their documentation down the toilets, and all of them have documentation when they board the RyanAir flight at the other side.”
Ireland has been completely subsumed by economic migrants, vast numbers of whom have set up in tent cities in major Irish cities, notably the capital Dublin.
Meanwhile, according to data released in Germany by the Federal Office for Migration and Refugees, 57 per cent of asylum seekers have no documentation to prove their identity, their age, or their country of origin, a figure that has risen from 48 per cent in 2023.
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Macron’s Idiotic Ukraine Policies Have Paved Way For Triumph Of The French Right
The EU, NATO, and a number of European capitals are watching France’s political turmoil with growing alarm, as President Emmanuel Macron is clearly on the ropes, having called early elections, leaving a path open for the French ‘far-right’ to triumph.
The foreign policy establishment in both Europe and Washington fears that large-scale joint initiatives like ramped-up military spending and the new push to fund Ukraine’s defense for years to come could also be in question, given Macron had long become among Kiev’s top cheerleaders.
He had even recently unveiled a controversial plan to send French and NATO military trainers to Ukraine. “Paris has been working for a while now with the Ukrainians on this,” a person familiar with France’s initiative had told The Financial Times. But given the plan wasn’t launched formally by NATO leadership, Macron is seen as the prime mover on the European continent behind all of this.
But France’s surprise political leader as of this past weekend, Marine Le Pen – who blew president Macron away in the European Parliament elections – is reaching out to mainstream voters as she aims to cement a majority in the next parliament, a result that would constitute an earthquake in European politics.
Her group, the National Rally, is already on track to become the biggest party in the lower house, a prospect which has caused alarm among investors, the national security establishment, France’s international partners, and a section of the French public. Two rounds of parliamentary elections will conclude on July 7.
Macron in a Tuesday address admitted he was hurt by his party’s defeat in the European Parliament elections, and said the country would have been in “chaos” without his call for snap legislative elections:
“Without a dissolution, there would have been chaos,” Macron was quoted as saying on Tuesday by Agence France-Presse. “The decision I took was the most difficult, the most serious, but the most responsible.”
With the National Rally expected to make sizeable parliamentary gains, what is its stance on Russia-Ukraine policy? And what’s Jordan Bardella vision of the issue, who could become French PM at the young age of 28?
The ‘controversial’ and supposedly ‘Russia-sympathetic’ stance is perhaps best seen in some quietly removed sections of defense policy that had been on the National Rally’s website prior to June 11. The sections had called for deepening diplomatic ties with Moscow, and for France to exit NATO’s integrated military command. Politico details of the removed policy sections which undoubtably still reveal the party’s thinking…
The deleted proposals hailed from Marine Le Pen’s presidential run in 2022, in which her party had laid out 17 thematic booklets outlining its proposals across all policy areas. While 16 booklets remain online, the one on defense was removed from the web page some time after June 11. It can still be found online at a page that is no longer linked to on the party’s website.
In the manifesto, the National Rally had advocated distance from Washington while trying to engage with Moscow. Noting that Washington “does not always behave as an ally to France,” Le Pen’s program in 2022 proposed to seek “an alliance with Russia on certain issues,” such as European security or combating terrorism.
The withdrawn document also said that France should “immediately” leave NATO’s integrated military command.
The deleted document also proposed “to put an end” to cooperation projects with Germany in the military sector, given “a deep and irreconcilable doctrinal, operational and industrial divergence with Berlin.” Those include plans for jointly developed next-generation battle tanks and next-generation fighter jets.
To expand on the question of France’s political future and what it means for new roadblocks or even serious reversal of Macron’s Ukraine policies, columnist and political cartoonist Ted Rall told Russia’s Sputnik early this week that “There’s no Jordan Bardella without a Marine Le Pen.”
“We don’t want Ukraine to join NATO, and we don’t want to divide our nuclear deterrent at the European level and send troops into a war that is not currently France’s war. These are very serious questions.” –Marine Le Pen
‘Macron wants to send French soldiers to Odessa to bolster his image’ – Marine Le Pen
‘We don’t have the same sensitivity as Sarkozy or Mariani on this issue [the war in Ukraine]. What is certain is that we [France] immediately supported Ukraine, we immediately condemned Russia,… pic.twitter.com/XB4kEYuEML
— Ignorance, the root and stem of all evil (@ivan_8848) May 7, 2024
Rall explained that shift to the right is in part a reaction against Macron’s ratcheting Ukraine policies, and a reflection of the reality that “The French don’t have an appetite for conscription or even for wars of choice.”
“They haven’t been engaged in [a war] in a long, long time,” Rall explained. “Ukraine’s a hot war. It’s a real war. It’s not like a police action, like going to quell the natives in New Caledonia. This is real serious. Frenchmen will be coming back in body bags from Ukraine.”
“And it’s a conflict that a lot of French people are deeply divided about. The politics are bad for Macron,” he continued. I don’t know why he’s absolutely so determined to push this narrative because truly he and his administration and his legacy are really on the ropes right now. And the last thing he needs is a controversial or unpopular policy, which this, I think, is.”
The New York Times published the full version of the spring 2022 draft peace treaty between Russia and Ukraine over the weekend, which confirmed a lot of what was previously reported but also included some interesting details from unnamed diplomatic sources about why these talks ultimately failed. According to a European one who was present at the Extraordinary Summit of NATO Heads of State and Government on 24 March 2022, Polish President Andrzej Duda dramatically railed against this deal:
“Leaders in Poland — early and strong supporters of Ukraine — feared that Germany or France might try to persuade the Ukrainians to accept Russia’s terms, according to a European diplomat, and wanted to prevent that from happening.
To that end, when Poland’s president, Andrzej Duda, met with NATO leaders in Brussels on March 24, he held up the March 17 text, said the diplomat, who was present. ‘Which of you would sign it?’ Mr. Duda asked his counterparts, the diplomat said. None of the NATO leaders spoke up.”
It was already observed on 29 March 2022 that “Poland’s Ruling Party Helped Provoke The Worst Security Crisis Since WWII”, albeit for different reasons than what was just revealed, namely the way in which their self-interested anti-Russian fearmongering helped reshape the US’ deep state dynamics. Now there’s no question that Poland was actively trying to sabotage the Russian-Ukrainian peace talks and that its efforts predated former British Prime Minister Boris Johnson’s infamous trip to Kiev.
President Putin confirmed in his interview with Tucker Carlson earlier this year what Zelensky’s top ally David Arakhamia disclosed in late November about how that leader convinced Ukraine to keep fighting. In his words, “the fact that they obeyed the demand or persuasion of Mr. Johnson, the former Prime Minister of Great Britain, seems ridiculous and very sad to me.”
It’s now known, however, that there was more leading up to this than even the Russian leader himself thought as recently as four months ago.
Duda’s dramatic display at March 2022’s NATO meeting did more for unifying the West around the cause of perpetuating their proxy war on Russia through Ukraine than anything else that’s thus far been reported. This in turn greatly facilitated Johnson’s subsequent trip to Kiev over two weeks later where he was then able to convince his hosts that the West has their back if they keep fighting. His country and Poland also had an ace up their sleeves to play just in case France and Germany pushed for peace.
They and Ukraine forged an informal alliance on 17 February 2022 in the literal week before the start of Russia’s specialoperation, which evaded most observers’ attention due to the fast-moving events that preceded the latest phase of this decade-long conflict. So long as Poland was in favor of continuing hostilities, which nobody had any doubt about but hadn’t earlier known just how zealous it was, then the UK could rely on it as a land bridge for the emergency dispatch of military equipment to Ukraine.
The whole point in agreeing to form this pact was to give Ukraine the ability to keep fighting if it chose to in the event that conventional hostilities broke out with Russia like they did a week later. Ukraine knew that the UK’s commitment was rock-solid due to its centuries-long policy of dividing-and-ruling Europe, while Duda hyperbolically reaffirmed Poland’s two weeks before Johnson’s visit to Kiev, which wasn’t previously reported but would have obviously been passed along to Ukraine at the time.
The Polish leader’s dramatic display set the stage for his meeting with Johnson right before the latter’s trip to Kiev, therefore convincing Zelensky that he does indeed have a credible means to perpetuate the conflict with the view of ending it on better terms. Had it not been for Duda making a big show out of his country’s opposition to the draft peace treaty and pledging his support for Ukraine with Johnson, then Zelensky might have doubted Poland’s commitment to their alliance, thus saving the peace process.
The newfound insight that Poland was just as much to blame as Britain for sabotaging spring 2022’s peace talks vindicates Confederation party chairman and newly elected MEP Grzegorz Braun for what he said in an interview over the weekend. He shared his concerns from 6:00-8:23 about Poland once again being exploited by the Anglo-American Axis to usher in another new world order that would follow his country sparking World War III in the coming future just like the role that it played for them in1939.
The risk of World War III breaking out is now higher than it’s ever been since the Cuban Missile Crisis due to the US’ dangerous game of nuclear chicken with Russia, and the only reason why everything got to this point in the first place is because Poland helped sabotage spring 2022’s peace talks. Had it never agreed to that February’s informal alliance with the UK and Ukraine or if Duda would have reconsidered his country’s commitment to it, then there likely wouldn’t be any such serious risk at present.
As Braun said later on in his interview, there’s now a very real chance that Polish meat could be thrown into the Russian grinder to follow the half-million Ukrainian troops who were already killed in this conflict, the scenario of which readers can learn more about here and here. If Poland conventionally intervenes in Ukraine, then the risks of World War III breaking out would instantly spike, which could turn his warning about its historical role in global affairs into a prophecy.
Hello everyone and welcome to the latest edition of Bird Flu Digest, formerly known as OffGuardian…
The wall-to-wall coverage of Bird Flu is getting wallier-to-wallier with each passing week, to the point it’s almost hard to keep up with the waves of hot takes and chilling insights. But if you’re going to try, the best place to do it is right here, where I spend a good portion of my time reading very similar articles in very similar papers all about the danger of a pandemic they’re about to pretend is happening.
Not a dream of mine growing up, but life’s like that.
Anyway…bird flu.
In our last bird flu update, we pointed out that the “bird flu death” in Mexico was very likely no such thing, and that reporting it as such was right out of the Covid playbook.
I really do think it’s very likely that we will, at some time, it’s not a question of if, it’s more of a question of when we will have a bird flu pandemic.”
This story was naturally picked up and spread everywhere, but Redfield is hardly alone in this hysterical panic-fueling nonsense.
All of these stories talk about “gathering data”, “flying blind”, and the need for “prevention”. And all of that is really code for “testing”. Almost every article talks up the need to increase testing – both of humans and animals.
But anyone who’s been paying attention since 2020 knows PCR tests don’t gather data, they create data. They are machines for generating “cases”. Far from preventing a pandemic, they can be used to manufacture one.
There are even early signs of mandating tests going forward, such as this Politico article bemoaning the lack of farmers voluntarily signing up for government surveillance programs:
The federal response is largely focusing on voluntary efforts by farmers to help track and contain the outbreak. But many farms still have not signed up for USDA efforts to boost surveillance and testing for the virus.
And the solution to this is more money:
Although federal funds have been allocated, no farms have enrolled in voluntary on-site milk testing, according to the USDA. Fewer than a dozen farms have applied for separate financial aid in exchange for boosting biosecurity measures to help contain the virus.
Paying farmers to test their animals is another recycled Covid strategy. It will generate cases, which will generate culling, which links us up with the other aspect of “bird flu” – not “the next pandemic” but “the war on food”.
As the alleged disease allegedly spreads from poultry farm to dairy farm more and more chickens are being culled and cows slaughtered. This is going to escalate even further soon, when governments start paying farmers to destroy their cattle.
Again, from Politico:
…federal rulemaking is delaying the rollout of compensation for farmers who have lost or had to kill cows because of the disease.
Translation:
They want to pay farmers to test their cows, then “financially compensate” them when they have to be destroyed.
Incentivizing testing, rewarding positive results. That’s how you make a pandemic out of nothing, and sabotage the food system in the process.
But there’s good news, after all the the EU is already procuring 40 million doses of vaccines, just in case. And the Moderna stock price keeps going up too. So there’s that.
Honestly, it’s like watching a movie where they signpost the “surprise” twist ending inside the first five minutes, and then you have to sit through two interminable hours of what the writers clearly consider to be subtle foreshadowing.
It’s getting to the point I just want them to do the bloody pandemic and get it over with.
Israel’s Top Generals Approve Battle Plans For Lebanon Offensive
The Israel Defense Forces (IDF) on Tuesday announced that plans to launch an offensive in Lebanon against Hezbollah have been formally approved.
The IDF statement further said it is preparing to “accelerate readiness in the field” at a moment the situation is deteriorating, given the Lebanese paramilitary group backed by Iran has in the last days sent hundreds of drones and missiles into northern Israel. The statement spelled out that “operational plans for an offensive in Lebanon were approved.”
The military cited that the head of the IDF’s Northern Command Maj. Gen. Ori Gordin and chief of the Operations Directorate Maj. Gen. Oded Basiuk had given their final approval for the Lebanon battle plans.
However, whether the trigger is pulled on launching the major operation remains to be seen, as outside diplomatic efforts to intervene also intensify.
During an afternoon briefing Pentagon spokesman Major General Patrick Ryder was asked by reporters about the newly approved Israeli battle plans. He responded: “I’m not going to get into hypotheticals and speculate on what might happen other than to say no one wants to see a wider regional war.”
Hezbollah has been strongly signaling it could attack Israel’s third largest city of Haifa, which would mark a severe escalation, after Israel has launched airstrikes as deep into Lebanon as far north as Baalbek, as well as near the Syrian border in the northeast.
President Biden’s envoy Amos Hochstein has been in both Israel and Lebanon seeking to convince officials on both sides against escalation; however, the US doesn’t have direct contact with Hezbollah but instead tends to go through Lebanese government intermediaries. The White House has warned that an expanded Israeli offensive in Lebanon would be disastrous for both Israel and the whole region, given the war could widen to include Iran.
Israeli officials have said the IDF stands ready to “destroy” Hezbollah, and on Sunday IDF Spokesman Rear Adm. Daniel Hagari said “Hezbollah’s increasing aggression is bringing us to the brink of what could be a wider escalation, one that could have devastating consequences for Lebanon and the entire region.”
Earlier this month Prime Minister Benjamin Netanyahu said, “Whoever thinks he can hurt us and we will respond by sitting on our hands is making a big mistake.” He had added at a time when massive fires were spreading in the north due to constant Hezbollah drone and missile attacks, “We are prepared for very intense action in the north.” There are currently some 100,000 Israeli residents who remain outside their homes and communities due to the persistent threat of rocket attack.
The Securities and Exchange Commission is dropping its investigation into whether Ether is a security, Ethereum developer Consensys said Wednesday.
“The Enforcement Division of the SEC has notified us that it is closing its investigation into Ethereum 2.0,” the firm said in a June 19 X post.
“This means that the SEC will not bring charges alleging that sales of ETH are securities transactions,” which it hailed as a “major win for Ethereum developers, technology providers, and industry participants.”
ETHEREUM SURVIVES THE SEC.
Today we’re happy to announce a major win for Ethereum developers, technology providers, and industry participants: the Enforcement Division of the SEC has notified us that it is closing its investigation into Ethereum 2.0.
The news sent Ethereum sharply higher, after several days of unexplained declines driven by an overly aggressive futures seller.
In March, Fortune reported the SEC issued subpoenas to multiple companies which was related to attempts to label ETH as a security.
Consensys sued the SEC in April, alleging the regulator planned “to seize control over the future of cryptocurrency,” which it said was still on in its latest post.
The Music Just Stopped: Japan Banking Giant Norinchukin To Liquidate $63 Billion In Treasuries & European Bonds To Plug Massive Unrealized Losses
Last October, when the wounds from the March 2023 bank failures – which surpassed the global financial crisis in total assets and which sparked the latest Fed intervention, setting the market’s nadir over the past 16 months – were still fresh, we made a non-consensus prediction: we said that since the Fed has once again backstopped the US financial system, “the next bank failure will be in Japan.“
This prediction only got warmer two months later when, inexplicably, Japan’s Norinchukin bank, best known as Japan’s CLO whale, was quietly added to the list of counterparties for the Fed’s Standing Repo Facility, a/k/a the Fed’s foreign bank bailout slush fund.
The Norinchukin Bank, New York branch has been added to the list of Standing Repo Facility Counterparties, effective Dec. 1
great, the Fed is now bailing out Japan’s CLO whale.
Can someone please bug the next dinner at Centralbahnplatz 2 18th floor dining room
But if that was the first, and still distant, sign that something was very wrong at one of Japan’s biggest banks (Norinchukin is Japan’s 5th largest bank with $840 billion in assets) today the proverbial canary stepped on a neutron bomb inside the Japanese coalmine, because according to Nikkei, Norinchukin Bank “will sell more than 10 trillion yen ($63 billion) of its holdings of U.S. and European government bonds during the year ending March 2025 as it aims to stem its losses from bets on low-yield foreign bonds, a main cause of its deteriorating balance sheet, and lower the risks associated with holding foreign government bonds.”
See, what’s happened in Japan is not that different from what is happening in the US, where as the FDIC keeps reminding us quarter after quarter, US banks are still sitting on over half a trillion dollars in unrealized losses, as a result of the huge jump in interest rates which has blown up the banks’ long-duration fixed income holdings, sending them trading far below par and forcing banks (and the Fed, see BTFP) to come up with creative ways of shoving these massive losses under the rug.
And while Japanese rates have barely budged – the BOJ only just raised rates for the first time in decades in April – the move is already cascading into the form of huge losses for domestic banks, which have been hammered twice as hard due to their holdings of offshore debt which until 2021 was viewed as risk free, only to blow up in everyone’s face two years ago when the bull market since the early 1980s ended with a bang.
Enter Norinchukin: according to the Nikkei, the company’s net loss for the year ending March 2025, which was previously forecast to top 500 billion yen, will rise to the 1.5 trillion yen level with the bond sales.
“We plan to sell low-yield [foreign] bonds in the amount of 10 trillion yen or more,” Norinchukin Bank CEO Kazuto Oku told Nikkei, an amount just above $60 billion.
Facing a problem that is very familiar to all US banks, Oku said the bank “acknowledged the need to drastically change its portfolio management” to reduce unrealized losses on its bonds, which totaled roughly 2.2 trillion yen as of the end of March. Oku explained bank’s intention to shift its investments, saying, “We will reduce [sovereign] interest rate risk and diversify into assets that take on corporate and individual credit risk.”
Now, if Nochu, as it is affectionately known by bankruptcy lawyers, was a US bank circa one year ago, it would not have to sell anything: it could just pledge all of its sharply depreciated bonds at the Fed’s BTFP facility, and get a par value for them.
Unfortunately, Nochu is not US but Japanese, and it is not 2023 but rather 2024, when the high-rate disaster of 2023 was supposed to be over. Supposed to be… but instead it’s only getting worse. Regular readers will hardly need it, but for novices Nikkei gives the following quick primer: “Interest rates in the U.S. and Europe have risen and bond prices are down. This reduced the value of high-priced (low-yielding) foreign bonds that Norinchukin purchased in the past, causing its paper losses to swell.”
So faced with no other options, Nochu is doing the only thing it can: an orderly liquidation of tens of billions of securities now, when they are still liquid and carry a high price, in hopes of avoiding a disorderly liquidation and much worse, in a few months when the bond market freezes up.
And yes, the Japanese rates canary is quite, quite massive: as of the end of March, Norinchukin had approximately 23 trillion yen of foreign bonds (about $150 billion), amounting to 42% of its total 56 trillion yen of assets under management.
To get some sense of the scale, according to the Bank of Japan, outstanding foreign bonds held by depositary financial institutions amounted to 117 trillion yen as of the end of March. Norinchukin, which is a major institutional investor in Japan, holds as much as 20% of the total on its own! And those asking, yes: once Nochu begins selling, all others will have to join the club!
But why start the selling now? Because, as we warned last October when we predicted that the next bank crisis will be in Japan, the Japanese mega-bank now believes interest rate cuts in the U.S. and Europe are likely to take longer than it previously expected, it will try to significantly cut its unrealized losses by selling foreign bonds in fiscal 2024.
And so, Norinchukin plans to sell over 10 trillion yen in foreign bonds, in addition to its normal trading activities.
The rest of the story is filler: in attempt to divert attention from the 10 trillion yen elephant in the room, the Nikkei then wastes time discussing the bank’s other “alternatives” to wit:
The company is now considering investment alternatives, including equities, corporate bonds, corporate loans and private equity, as well as securitized products such as corporate loan-backed securities and mortgage-backed securities. By diversifying its portfolio, it aims to prevent unrealized losses from expanding to the point where they become a concern for management. It will also try to replace some low-yielding foreign government debt with other such bonds offering higher interest rates.
What are you talking about? What diversification? Once the selling begins, the bank will be lucky if it can get even a fraction of the proceeds it hopes for (because all the other banks won’t just be standing there twiddling their thumbs, as they wait to see how massively Nochu reprices the market).
And it’s not just banks: if and when the selling begins by a bank that holds 20% of all foreign bonds in Japan, the liquidation cascade will quickly spread to Mrs Watanabe. According to the U.S. Treasury Department, Japanese investors held $1.18 trillion of U.S. government bonds as of March, the largest slice among foreign holders.
Needless to say, but the Nikkei does so anyway, “Massive sales by Norinchukin could have a sizable effect on the U.S. bond market.”
And since we now know what is happening, it is only a matter of time before everyone else frontruns Norinchukin.
What happens next will be even uglier: since the bank will no longer be able to mask its fixed income losses under the guise of accounting sleight of hand, the bank’s financial results for the period ending March 2025 will “deteriorate significantly as a result of the huge divestment of foreign bonds and turn paper losses into real ones.” As of May, Norinchukin put its final loss at more than 500 billion yen, but this is now expected to reach the 1.5 trillion yen level.
A little more context: back in the immediate aftermath of the global financial crisis, in the year ending March 2009, Norinchukin posted a final loss of about 570 billion yen due to impairment of securitized products. The forecast loss for this fiscal year is expected to top the previous record by roughly 1 trillion yen. Nevertheless, Oku said that putting the losses on the books in the year ending next March will “improve [the bank’s] finances and portfolio, thus enabling to move into the black in the period ending March 2026.”
Spoiler alert: no it won’t… and that’s why the bank is now scrambling to share the pain with even greater fools, i.e., “investors.”
According to the Nikkei, Norinchukin Bank is considering raising 1.2 trillion yen to shore up its finances. It has already started discussions with Japan Agriculture Cooperatives, one of its main investors, and others. Of course, the question of who in their right mind would lend the bank good money to plug an even bigger hole that is about to open up, is anyone’s guess.
But that won’t stop the bank from doing what it has to, now that it has picked the liquidation route: and once the selling flood begins, it won’t end as these flashing red headlines from Bloomberg just confirmed:
*NORINCHUKIN TO SELL US, EUROPEAN SOVEREIGN BONDS GRADUALLY
*NORINCHUKIN ALSO WEIGHS LOCAL, OVERSEAS BONDS, PROJECT FINANCE
*NORINCHUKIN EYES ASSETS INCLUDING CLOS, STOCKS AFTER BOND LOSS
There’s a name for this: a firesale, but – drumroll – a “gradual” one, because that’s how firesales supposedly go in Japan.
Luckily, the one thing nobody has to guess, is what happens next: as the wonderful movie Margin Call laid out so very well, once you realize that the music has stopped, you have three choices: i) be first, ii) be smarter, or iii) cheat. In the case of Japan’s Norinchukin, it has decided the time has come to liquidate before everyone else. We wonder how “everyone else” will take this particular news…
The Supreme Court is currently reviewing a case that could impact your individual liberty. And you probably haven’t heard about it…
The case began in November 2022, when Loper Bright Enterprises, a fishery based out of Cape May, New Jersey, appealed a district court opinion to the Supreme Court. The conflict between Loper Bright and the National Marine Fisheries Service (NMFS) started after the agency decided to require private fisheries like Loper Bright to pay their regulatory inspectors for their time observing fishery practices.
While the law doesn’t explicitly allow this practice, the Fishery Service cites the Chevron Deference, a precedent set by a 1984 Supreme Court case, which states that an ambiguous law can be interpreted by government agencies as they see fit. In short, the Fishery Service wants private companies to pay their salaries and found a legal loophole to justify it.
While this may seem like an isolated incident, it is just one example of a long history of government agencies infringing on individual liberty. The outcome of this case holds supreme importance for the future of our republic and the preservation of our financial and civil freedoms.
The Administrative State: A Tyranny of the Unelected
Since 1950, the federal government has steadily grown in size. Today, it has over 2.9 million civilian employees, more than Walmart has worldwide. This growth has paved the way for the creation of a governmental pseudo-branch denoted the “administrative state.” The administrative state contains government employees who have a significant impact on people’s everyday lives but yet aren’t held accountable to citizens in the form of elections. These unelected bureaucrats undermine the central ethos of a republic, where elected officials are supposed to seek the good of their constituents or risk not being re-elected.
The problem with this system was made evident during the pandemic. During the COVID shutdown, hundreds of millions of Americans were sentenced to lockdowns, impacting their schools, churches, and families. Many of the people behind this policy were members of the CDC, one of the government agencies that comprise the administrative state. The decisions they made were not subject to the traditional checks and balances which typically constrain the US government. Instead, America found itself under a tyranny of the unelected.
This overreach extends beyond individual liberty into private business. When businesses can be encroached upon at a whim by unelected authorities, long-term investment becomes a much riskier endeavor. When the COVID shutdown occurred, many small businesses, with their small profit margins and high overhead, were unable to weather the storm. For the companies that survived, the blatant government intervention and the severe consequences that followed left a sour taste in their mouth for future capital investments. You’re not going to build a new business if a bureaucrat can shut it down the next day. All of these factors contribute to government agencies having a negative impact on financial markets and investor portfolios.
The Central Problem With Chevron
The Chevron Deference precedent, which is at the center of Loper Bright Enterprises v. Raimondo, gives even more power to these governmental agencies. When ambiguity exists, this precedent allows courts to simply defer to agencies’ interpretations, even if those interpretations favor the agencies’ own interests. It also allows courts to seek out ambiguity in order to give near-unbridled power to these agencies.
If the Supreme Court upholds Chevron, it will further entrench the power of unelected bureaucrats and make it increasingly difficult for individuals and businesses to challenge agency overreach. However, if the Court rules against Chevron, it would represent a shift toward increased restraint of the administrative state, leading to a reevaluation of the scope and authority of federal agencies.
Either way, Loper Bright Enterprises v. Raimondo is set to have a heavy impact on the future of the administrative state and the balance of power between the government and the people.
American Freedom is on Trial
Loper v. Raimondo is more than just a legal dispute, it is a battle for freedom against the encroachment of the administrative state.
Proponents of Chevron argue that the statute has promoted national stability by reducing potential conflict between administrative bodies and private entities.
However, during the time Chevron has been in place, the administrative state has done everything but promote stability. Agencies have steadily increased their power, as evidenced by the COVID-19 case study, resulting in many counterproductive governmental actions.
The second, and most poignant argument for Chevron is that individual agencies have more expertise in their respective fields. Therefore, since they possess intellectual authority, they are justified in having political authority over the American populace. This dispute is, at its core, a battle for individual freedom.
One of the central claims of socialism is that centralized planners, who are more educated and knowledgeable than the average citizen, can orchestrate the nation and economy better than individual Americans making decisions. But this understanding is rooted in arrogance, not substance. Countries with more economic freedom have a higher life expectancy, GDP per capita, education rate, and overall quality of life. The “chaos” of free choice actually leads to productive outcomes. The Supreme Court should side with Loper Bright by overruling Chevron, giving citizens more of the vital freedom which is a necessary factor for national and individual success.
Sullivan Greenlights Ukraine Cross-Border Attacks Beyond Kharkiv Region With US Arms
US National Security Advisor Jake Sullivan has said that authorization for Ukrainian use of American weapons for cross-border attacks extends not just to the Kharkiv region, but into other Russian regions as well, further escalating Biden’s initial greenlight for such offensive operations.
Blinken in a Monday PBS interview told NewsHour’s Nick Schifrin “This is not about geography, it’s about common sense” and expanded the parameters for using NATO-supplied missiles. Watch the exchange below:
Jake Sullivan says US authorization for Ukrainian cross-border attacks extends not just to the Kharkiv region, but other Russian regions as well. “This is not about geography, it’s about common sense” he says. Expect the parameters of this bold new policy to continue to grow pic.twitter.com/01OISmVwm3
The following is what was said in this opening section of the interview:
Schifrin: Does the agreement that you have made with Ukraine to allow Ukraine to fire American weapons just over the border into Russia at Russian forces that are about to attack into Ukraine, does that extend beyond the Kharkiv region, including into the Sumy region, where Russian forces have also been targeting Ukraine?
Sullivan: It extends to anywhere that Russian forces are coming across the border from the Russian side to the Ukrainian side to try to take additional Ukrainian territory.
Schifrin: So, that could include the Sumy region?
Sullivan: That’s happened in Kharkiv.
We have seen initial indications that Russia has made exploratory moves across in Sumy. And so it would apply there as well. This is not about geography. It’s about common sense. If Russia is attacking or about to attack from its territory into Ukraine, it only makes sense to allow Ukraine to hit back against the forces that are hitting it from across the border.
That’s when the interviewer pointed out the obvious–that this policy will lead to open-ended and uncontrollable escalation given it takes away all parameters. “Of course, Russia is attacking Ukraine from all parts of Russia. Why draw the line there?” Schifrin asked.
Sullivan at this point essentially gave Kiev the greenlight to attack a much more expanded area inside Russia. “Well, first, we are permitting Ukrainian forces to attack Russian forces using Russia as a sanctuary in the areas where on the battlefield they are attacking from inside Russia with artillery, with other ground-based munitions,” Biden’s top security official said.
And what’s more is that when asked about F-16s, Sullivan affirmed that Ukraine can use the US-made jets to attack Russia. Sullivan explained:
“…we have made clear — and we have seen over the course of the past two years Ukraine do this — that they can use air defense systems, including those supplied by the United States, to take Russian planes out of the sky, even if those Russian planes are in Russian airspace, if they’re about to fire into Ukrainian airspace.”
President Putin in late March had addressed this possibility. He said that Russian forces would then have to right to attack any airbase from which these F-16s are flown, including if they take off from within Western countries or NATO bases.
Commenting on the fresh and escalatory Sullivan remarks, independent journalist Michael Tracey said to “Expect the parameters of this bold new policy to continue to grow.”
