What happens when plebs can’t afford bread, and the circuses aren’t that entertaining?

Nothing good. Which is why the cost-of-living crisis is the #1 problem, according to the World Economic Forum’s Global Risks Report – an annual poll of 1,200 government, business and civil society professionals.

According to the poll, there will be little respite from “energy inflation, food and security crises” in the coming years (or months?).

In the near term, nearly 70% of those polled say volatile economies and various ‘shocks’ are in the cards, while 20% or so of those polled say they fear “catastrophic outcomes” within the next 10 years, according to Bloomberg.

“Very few leaders in today’s generation have been through these kind of traditional risks around food and energy, while at the same time battling what’s coming up in terms of debt, what’s coming up in terms of climate,” said Saadia Zahidi, WEF managing director, who warned that the world may be entering a “vicious cycle.”

“We’re going to need a sort of new type of leadership that is much more agile,” she told Bloomberg Television.

Next week will mark the annual WEF conference in Davos, Switzerland, where the global elite will sit around and discuss how best to run our lives.

The gathering begins at a time when inflation is at a four-decade-high across many advanced economies, with interest rates far more elevated than anyone was predicting 12 months ago.

The report calls for global cooperation, and warns that if governments mishandle the current crisis they “risk creating societal distress at an unprecedented level, as investments in health, education and economic development disappear, further eroding social cohesion.”

Increases in military expenditure could reduce support for vulnerable households, leaving some countries in a “perpetual state of crisis” and set back the urgent need to tackle climate change and biodiversity loss. -Bloomberg

The worst case scenario, according to the report, is the risk of “geoeconomic warfare” – in which geopolitical rivalries are likely to increase economic tensions, exacerbating both short and long-term risks. 

“In this already toxic mix of known and rising global risks, a new shock event, from a new military conflict to a new virus, could become unmanageable,” according to Zahidi. “Climate and human development therefore must be at the core of concerns of global leaders to boost resilience against future shocks.”

What’s more, the report also warned that the interaction of a ‘cluster of risks’ can cause a cascade of future problems in a “polycrisis,” such as “resource rivalry” in which countries compete for natural resources.

Lost in all the focus on CPI-driven chaos in capital markets, The SEC charged cryptocurrency lending firm Genesis Global Capital and crypto exchange Gemini with offering unregistered securities through Gemini’s “Earn” program.

As CoinTelegraph’s Jesse Coghlan reported, in December 2020, Genesis, a subsidiary of crypto conglomerate Digital Currency Group (DCG) entered into a deal with Gemini to offer the exchange’s customers the yield-bearing crypto product. This was then launched in February 2021.

Under the agreement, Gemini customers could loan their crypto to Genesis under the promise the latter would repay the loan with interest. Genesis had full control over how it would earn a yield to repay Gemini creditors.

In a statement, the SEC said its complaint alleges that the Gemini Earn program constitutes an offer and sale of securities and should have been registered with the commission.

“We allege that Genesis and Gemini offered unregistered securities to the public, bypassing disclosure requirements designed to protect investors,” SEC Chair Gary Gensler said in a statement.

We @SECGov charged Genesis & Gemini for the unregistered offer & sale of crypto asset securities through Gemini Earn.

Crypto intermediaries need to comply with our securities laws. This protects investors. It promotes trust in markets. It’s not optional. It’s the law.

— Gary Gensler (@GaryGensler) January 12, 2023

Gensler added the charges “build on previous actions to make clear to the marketplace and the investing public that crypto lending platforms and other intermediaries need to comply with our time-tested securities laws.”

“It’s not optional. It’s the law.”

The SEC said its investigating other securities law violations from other entities relating to the Gemini Earn program.

But, as Coghlan reported later in the day, Tyler Winklevoss, the co-founder of cryptocurrency exchange Gemini, hit back at the SEC charging Gemini, calling the action “totally counterproductive” in a series of tweets.

5/ But seriously, what is the point or urgency here? The Earn program has been shut down for almost two months.

— Tyler Winklevoss (@tyler) January 12, 2023

In a series of tweets on Jan. 12, Winklevoss shared his disappointment about the charges by the Securities and Exchange Commission (SEC) over Gemini’s “Earn” program, claiming the regulator was “optimizing for political points,” calling the allegations “super lame” and a “manufactured parking ticket.”

4/ We look forward to defending ourselves against this manufactured parking ticket. And we will make sure this doesn’t distract us from the important recovery work we are doing.

— Tyler Winklevoss (@tyler) January 12, 2023

Gemini’s Earn product launched in February 2021 and officially ran until Jan. 8. A deal with the crypto lender and Digital Currency Group (DCG) subsidiary Genesis allowed Gemini users to earn yield by lending their crypto to the market-making firm.

Tyler Winklevoss stated Gemini would defend itself against the unregistered security charges and would “make sure this doesn’t distract us from the important recovery work we are doing.”

As OilPrice’s Alex Kimani writes, oil prices have kicked off the new year on the back foot, tumbling to large losses in the first week before staging a modest recovery in the second as demand uncertainty continues to weigh on trading. Concerns over the rapid expansion of China’s COVID cases, following the relaxation of strict zero-COVID policies have continued to weigh heavily on oil prices.

Commenting on oil’s recent lethargy, Goldman trader Rich Privorotsky writes that for all the excitement on China re-opening, time spreads in WTI remain negative (2m-3m) and are trading at 1m lows and “something just doesn’t quite jive between the optimism flooding back into cyclicality versus an oil price which should have lot more going for it given”

1. low US inventories

2. a de facto put from the SPR

3. issues on Russian supply/exports

4. China re-opening expectations becoming fully entrenched.

Incidentally, Privorotsky notes that copper does not share the concern, breaking out above the recent range: “perhaps the relative pricing differential is a reflection on China growth relative to growing concerns about US growth…a thematic which is very clearly reflected in equity performance over the last couple months. Keeping an open mind, seems market is chasing short term momentum with investors keen to re-deploy capital/chasing what has recently been working.”

Luckily, for oil bulls, reprieve could be on the way with oil markets having reacted positively to China re-opening its borders on February 8, 2023 as one of the final acts of abandonment of the zero-Covid era. More relief is expected to come thanks to the Lunar New Year travel providing a short-term demand boost. Chinese Lunar New Year lasts for two weeks, and is set to begin on Sunday, 22 January 2023, and end on February 5, the date of the rising of the full “Snow Moon.” Indeed, the Civil Aviation Administration of China (CAAC) has predicted that passenger flights might reach 88% of their pre-pandemic levels by the end of January. However, this might only be a temporary bump unless China is able to move past its latest COVID wave before the oil markets feel confident about prospects of a sustained demand uplift.  But some experts are still holding out hope that the worst could be in the rearview mirror. Commodity analysts at Standard Chartered have expressed optimism that the prolonged selloff could have reached an inflection point, with the analysts saying that the seven-month long downwards trend is likely to falter now. The analysts say that the previous hyperbole that triggered a huge oil price rally has cooled off and has been replaced by excessive pessimism leading to oil prices undershooting their 2023 target.

StanChart points to the oil futures markets, where…

“…speculative positioning now reflecting an overly bearish viewpoint in our opinion and with crude oil the least popular positive exposure apart from palladium among investors, we think there is now short-term upside of USD 5-10/bbl, with more to follow in H2. With supply risks biased towards lower supply, and with OPEC patience likely to be strained by further attempts to push prices significantly below.”

The commodity experts have forecast that demand growth in 2023 will clock in at 1.04 million barrels per day (mb/d), with non-OECD countries providing all but 9 thousand barrels per day (kb/d) of that. Demand is expected to be stronger in the second half of the year, with H2 demand coming in at 101.1mb/d, 1.7mb/d higher than the H1 average. The analysts say much of that growth will come from the Asia-Pacific region where they have predicted that growth will accelerate from 177kb/d in 2022 to 852kb/d in 2023, with China seeing demand growth of 483kb/d compared to a 350kb/d decline in 2022.

At this juncture we could say the oil market is almost evenly divided between the bulls and the bears.

Hedge fund manager Pierre Andurand is wildly bullish, and recently came out and predicted that oil may top $140/bbl this year if Asian economies fully reopen after COVID-related lockdowns. According to Andurand, the market is “underestimating the scale of the demand boost [a full reopen] will bring,” also telling Bloomberg that oil demand could grow by more than 4M bbl/day, or ~4%, this year. Eric Nuttall, partner and senior portfolio manager at Ninepoint Partners LP, has told the Financial Post that oil prices will return to $100 per barrel in 2023 while Bank of America has predicted that Brent could quickly go past $90 per barrel on the back of a dovish pivot in the U.S. Federal Reserve and a “successful” economic reopening by China.

But there’s no shortage of bears, either.

Two weeks ago, Credit Suisse broke the hearts of the bulls after declaring that the selloff is not done yet, and Brent could see further downside towards the 61.8% retracement at $63.02 per barrel. Interestingly, Brent prices have given up another 4% since that dire prediction was made to trade at $80.75 per barrel, implying the downside risk remains huge. A week ago, famous oil broker PVM Oil wrote in a blog that,“There is no doubt that the prevailing trend is down, it is a bear market,’’ citing warm weather in Europe as well as China’s bing Covid woes. Another ominous sign: a week ago, Brent futures prices slipped into backwardation suggesting that traders believe that future oil prices will be lower than current prices.

Meanwhile, ING strategists see a weak Q1 but stronger prices from Q2 going forward, writing in a blog last week that, “The oil market is looking better supplied in the near term and risks are likely skewed to the downside. However, our oil balance starts to show a tightening in the market from the second quarter through to the end of the year, which suggests that we should see stronger prices from 2Q23 onwards.”

By Todd Maiden of FreightWaves

Freight costs fell year over year (y/y) in December for the first time in 28 months, according to a Thursday report from Cass Information Systems.

The Cass Freight Index report showed total expenditures on the payments platform were down 4.3% y/y and 5.5% lower than in November. The shipments component of the index recorded a 3.9% y/y decline, meaning actual transportation rates were likely 0.4% lower y/y during the month (down 2.2% sequentially and 5.3% seasonally adjusted).

The report said lower truckload contract rates were the main catalyst for the index’s decline during the month. The data set includes other transportation modes, like less-than-truckload, rail and parcel, and also captures fuel and accessorial charges, creating some noise in the numbers. Truckload accounts for more than half of freight expenditures on the platform.

“Freight rates are on track to fall 5% in 2023 just based on the normal seasonal pattern of this index,” ACT Research’s Tim Denoyer said. “With loose market conditions and some welcome relief in diesel prices, the actual decline is likely to be a good bit larger.”

With the fourth-quarter earnings season set to start next week, analysts have been dialing in expectations and picking likely winners and losers for the year. While some analysts have noted key indicators are slightly improving, the consensus is TL contract rates saw some pressure in the fourth quarter and will likely be down y/y by mid- to high-single-digit percentages at least through the first half of 2023.

However, most are pointing to firming fundamentals for carriers by midyear, resulting in a potential upcycle in the back half. The thesis is that persistent cost pressures on carriers, and regulatory impediments to capacity like AB5, will result in a steady exodus of operators, removing downward pressure on rates. Further, the weakness in demand and pricing evident in the third quarter appears to have accelerated during the fourth quarter, creating easier y/y comps for the group later this year.

While shippers may be beginning to see some savings, freight costs are still much higher than they were before the pandemic. Cass’ expenditures subindex was up 23% for full-year 2022, which followed a 38% increase in 2021.

Cass’ Truckload Linehaul index, which excludes fuel and accessorials, increased 1.7% y/y but fell 1% from November. December marked the seventh straight sequential decline for linehaul rates. The report also noted that the y/y comps ramp higher with December’s result sitting 5% below January 2022 levels.  

“With a tougher comparison in January, this index is likely to turn down on a y/y basis,” Denoyer continued. “New truckload contracts are generally being renewed with considerable rate reductions, but this pressure will be partly offset by strong trends since Thanksgiving in spot rates, which have held most of their gains even as drivers have by and large come back from holiday break.”

Although he said the TL market was “transitioning from the late-cycle stage to the bottoming stage” and that tightening in the spot-contract spread is “a key signpost of this new stage of the cycle, even green shoots of a new rate cycle.”

Shipments were down 3.3% from November, but up 1.2% on a seasonally adjusted basis.

“Normal seasonality from here would have shipments back in positive territory y/y in 1H’23, but sharpening declines in imports, into the West Coast in particular, suggest near-term trends may soften further,” Denoyer said.

Data used in the Cass indexes is derived from freight bills paid by Cass, a provider of payment management solutions. Cass processes $37 billion in freight payables annually on behalf of customers.

Turkey on Thursday summoned Sweden’s ambassador to complain about issues related to the country’s attempt at NATO ascension, at a moment Stockholm has lately admitted that Turkey is asking what it cannot give. 

This latest example of Turkey’s anger is perhaps among the most absurd examples of Turkish overreach regarding its demands that Sweden clamp down on dissident Kurdish groups, given it involves a mere tweet and a group exercising free speech.

The offending tweet by a Swedish-based activist group called Rojava Committee of Sweden is described by AFP as follows: “A tweet by the Rojava Committee of Sweden on Wednesday compared Erdogan to Italy’s Fascist dictator Benito Mussolini, who was hung upside down after his execution in the closing days of World War II.”

And more provocatively the tweet included imagery of a dummy made to look like Erdogan swinging from a rope, continuing the Mussolini death comparisons. Apparently the group staged the “hanging” of the dummy on a street in Stockholm as part of a demonstration.

“History shows how dictators end up,” the group wrote as part of the message. “It is time for Erdogan to resign. Take this chance and quit so that you don’t end up hanging upside down on (Istanbul’s) Taksim Square.”

🇹🇷🇸🇪 Turkey summons Swedish ambassador as Kurdish group hangs puppet of Turkish President Erdogan in Stockholm . pic.twitter.com/0rbanl5Gd8

— SlowFlights (@FlightsSlow) January 12, 2023

Turkey’s government is demanding severe action against the Kurdish activist group from Swedish authorities over the whole thing. While Sweden’s foreign ministry condemned the video and tweet, this wasn’t enough to satisfy Turkish officials, who want a legal crackdown by authorities against the Rojava Committee of Sweden.

“We urge the Swedish authorities to take necessary steps against terrorist groups without further delay,” Erdogan’s chief spokesman Fahrettin Altun tweeted. In response, Sweden’s Foreign Minister Tobias Billstrom said Stockholm supports “an open debate about politics” but “distances itself from threats and hatred against political representatives.”

“Portraying a popularly elected president as being executed outside city hall is abhorrent,” the Swedish diplomat wrote. However, legally tweet is being interpreted in Sweden and Europe as protected speech, and there is unlikely to be any further action against the Kurdish group. Of course, Turkey under Erdogan hasn’t been a fan of free speech for a number of years at this point.

Lately Turkey has demanded that Sweden go so far as to even change its laws related to speech and freedom of assembly in order to crack down on anti-Turkey Kurdish groups. But Swedish Prime Minister Ulf Kristersson has admitted that at this point regarding Ankara’s stipulations to joining NATO, “We cannot meet all of Turkey’s demands.” 

Authored by Denes Albert via Remix News,

Russian forces, who have reportedly suffered considerable losses on the front line, have now deployed additional units of the world’s most powerful mortar, which is capable of using a nuclear warhead on the battlefield.

Dubbed the “Sledgehammer,” the self-propelled 2S4 Tyulpan mortar, known as the Tulip in English, has a 240mm cannon — twice the caliber of NATO mortars, which are just 120mm — making it by far the largest caliber mortar system in the world. Carried on its own tracks, it has a range of 19 kilometers and is used to destroy large fortifications, military equipment, or strategic positions.

🇷🇺 2S4 Tyulpan en action. pic.twitter.com/2GDC0vUNHC

— Fulgur advenit (@GrillardEric) January 2, 2023

The 2S4 Tulip self-propelled mortar is capable of firing nuclear bombs, but this is likely to be limited to “micro-nuclear bombs” designed to destroy an area the size of a football stadium. It can also fire armor-piercing, laser-guided, and prohibited cluster munitions, as well as tactical nuclear bombs, according to Hungarian news outlet Ziare.

“It is a massive weapon, devastating when conventional weapons are used, capable of destroying a large area. But it would also make a very large target for Ukrainian artillery and drone crews, who hunt for offensive equipment on a daily basis,” a security expert told the Daily Mirror.

“The mortar is capable of targeting an out-of-sight target with bombs that would be extremely difficult if not impossible to intercept,” he explained.

Ukrainian forces have targeted the mortar system on the battlefield, and some footage from drone operators has shown a number of the weapons knocked out.

Minus one Russian 240-mm self-propelled heavy mortar 2S4 Tyulpan. A Russian heavy mortar burst into flames. The fire was extinguished, but the mortar was disabled. pic.twitter.com/b6bR12kd0w

— Paul Jawin (@PaulJawin) January 2, 2023

Developed during the Cold War, an initial batch of three vehicles was completed in 1969; it was immediately directed to a factory test program, which ended in October. The Tyulpan entered service two years later, and serial production began in 1974. The 2S4 Tyulpan was first seen by Westerners in 1975, so it was given the NATO designation M-1975, while its official name is 2S4.

Out of hundreds produced, Russia is believed to have only 40 to 50 still in operational service. However, Moscow is believed to have 400 units in storage and to be activating additional mortars to send to the battlefield in Ukraine.

Authored by Dave DeCamp via AntiWar.com,

Taiwan’s Defense Ministry revealed on Wednesday that it has sent some of its military officers to a NATO war college in Italy, acknowledging cooperation with the Western military alliance that is sure to anger China.

One Taiwanese air force officer, Lt. Col. Wu Bong-yeng, told reporters that he went to the NATO Defense College in Rome in 2021 for a six-month course and insisted the cooperation was purely academic.

“This was an academic exchange, not a military exchange,” he said. “Of course, they were very curious about Taiwan,” Wu said he studied the same curriculum as officers from NATO countries did, and the Taiwanese Defense Ministry said other officers had been sent to the college.

Taiwan is known to cooperate with the US military, but interactions with other foreign militaries are much more rare. The revelation comes after NATO said China poses “systemic challenges” to the alliance in its new Strategic Concept document that was issued in 2022.

NATO first made clear it had its eye on China in 2020 and said at the time the alliance would work to build stronger partnerships in the Indo-Pacific.

Since then, some NATO countries have joined the US in sending warships into sensitive waters near China, including France, Germany, and Britain.

The US and its allies have been taking steps to increase ties with Taiwan in recent years, which Beijing views as an affront to the one-China policy. These policies have provoked an increase in Chinese military activity around the island.

This week, a group of German lawmakers visited Taiwan, and a US trade delegation is due to arrive on the island on Saturday.

Authored by John and Nisha Whitehead via The Rutherford Institute,

How do you trust a government that continuously sidesteps the Constitution and undermines our rights? You can’t.

When you consider all the ways “we the people” are being bullied, beaten, bamboozled, targeted, tracked, repressed, robbed, impoverished, imprisoned and killed by the government, one can only conclude that you shouldn’t trust the government with your privacy, your property, your life, or your freedoms.

Consider for yourself.

• Don’t trust the government with your privacy, digital or otherwise. In the two decades since 9/11, the military-security industrial complex has operated under a permanent state of emergency that, in turn, has given rise to a digital prison that grows more confining and inescapable by the day. Wall-to wall surveillance, monitored by AI software and fed to a growing network of fusion centers, render the twin concepts of privacy and anonymity almost void. By conspiring with corporations, the Department of Homeland Security “fueled a massive influx of money into surveillance and policing in our cities, under a banner of emergency response and counterterrorism.” For instance, all across the country, police are installing Flock Safety license plate readers as part of a public-private partnership program between police and the surveillance industry. These cameras, which upload data in real time to fusion crime centers, signal a turning point in the transition from a police state to a police-driven surveillance state.

• Don’t trust the government with your property. In yet another effort to legitimize warrantless searches, police are employing “hit-and-hold” tactics in which police enter a home, carry out an initial sweep of the property, handcuff the occupants, then wait for official search warrants to be secured and applied retroactively. In the meantime, police have managed to bypass the Fourth Amendment. The rationale, to prevent possible destruction of evidence, is the same one used to deadly effect with no-knock raids. If government agents can invade your home, break down your doors, kill your dog, damage your furnishings and terrorize your family, your property is no longer private and secure—it belongs to the government. Hard-working Americans are having their bank accounts, homes, cars electronics and cash seized by police under the assumption that they have allegedly been associated with some criminal scheme.

• Don’t trust the government with your finances. The U.S. government—and that includes the current administration—is spending money it doesn’t have on programs it can’t afford, and “we the taxpayers” are being forced to foot the bill for the government’s fiscal insanity. The national debt is $31.3 trillion and growing, and we’re paying more than $300 billion in interest every year on that public debt, yet there seems to be no end in sight when it comes to the government’s fiscal insanity. According to Forbes, Congress has raised, extended or revised the definition of the debt limit 78 times since 1960 in order to allow the government to essentially fund its existence with a credit card.

• Don’t trust the government with your health. For all intents and purposes, “we the people” have become lab rats in the government’s secret experiments, which include MKULTRA and the U.S. military’s secret race-based testing of mustard gas on more than 60,000 enlisted men. Indeed, you don’t have to dig very deep or go very back in the nation’s history to uncover numerous cases in which the government deliberately conducted secret experiments on an unsuspecting populace—citizens and noncitizens alike—making healthy people sick by spraying them with chemicals, injecting them with infectious diseases and exposing them to airborne toxins. Unfortunately, the public has become so easily distracted by the political spectacle out of Washington, DC, that they are altogether oblivious to the grisly experiments, barbaric behavior and inhumane conditions that have become synonymous with the U.S. government, which has meted out untold horrors against humans and animals alike.

• Don’t trust the government with your life: At a time when growing numbers of unarmed people have been shot and killed for just standing a certain way, or moving a certain way, or holding something—anything—that police could misinterpret to be a gun, or igniting some trigger-centric fear in a police officer’s mind that has nothing to do with an actual threat to their safety, even the most benign encounters with police can have fatal consequences. The number of Americans killed by police continues to grow, with the majority of those killed as a result of police encounters having been suspected of a non-violent offense or no crime at all, or during a traffic violation. According a report by Mapping Police Violence, police killed more people in 2022 than any other year within the past decade. In 98% of those killings, police were not charged with a crime.

• Don’t trust the government with your freedoms. For years now, the government has been playing a cat-and-mouse game with the American people, letting us enjoy just enough freedom to think we are free but not enough to actually allow us to live as a free people. Freedom no longer means what it once did. This holds true whether you’re talking about the right to criticize the government in word or deed, the right to be free from government surveillance, the right to not have your person or your property subjected to warrantless searches by government agents, the right to due process, the right to be safe from militarized police invading your home, the right to be innocent until proven guilty and every other right that once reinforced the founders’ belief that this would be “a government of the people, by the people and for the people.” On paper, we may be technically free, but in reality, we are only as free as a government official may allow.

Whatever else it may be—a danger, a menace, a threat—the U.S. government is certainly not looking out for our best interests, nor is it in any way a friend to freedom.

Remember the purpose of a good government is to protect the lives and liberties of its people.

Unfortunately, what we have been saddled with is, in almost every regard, the exact opposite of an institution dedicated to protecting the lives and liberties of its people.

As I make clear in my book Battlefield America: The War on the American People and in its fictional counterpart The Erik Blair Diaries, “we the people” should have learned early on that a government that repeatedly lies, cheats, steals, spies, kills, maims, enslaves, breaks the laws, overreaches its authority, and abuses its power at almost every turn can’t be trusted.