Authored by David Stockman via InternationalMan.com,

The undisputed fact is that the CDC changed rules for causation on death certificates in March 2020, so now we have no idea whatsoever whether the 1.05 million deaths reported to date were deaths because OF Covid or just incidentally were departures from this mortal world WITH Covid. The extensive well-documented cases of hospital DOAs (deaths on arrival) from heart attacks, gunshot wounds, strangulation or motorcycle accidents, which had tested positive before the fatal event or by postmortem, are proof enough.

More importantly, what we do know is that not even the power-drunk apparatchiks at the CDC and other wings of the Federal public health apparatus found a way to change the total mortality counts from all causes.

That’s the smoking gun unless you consider the year 2003 to have been an unbearable year of extraordinary death and societal misery in America. To wit, the age-adjusted death rate from all causes in America during 2020 was actually 1.8% lower than it had been in 2003 and nearly 11% lower than it had been during what has heretofore been understood to be the benign year of 1990!

To be sure, there was a slight elevation of the all-causes mortality rate in 2020 relative to the immediately preceding years. That’s because the Covid did disproportionately and in some ghoulish sense harvest the immunologically vulnerable elderly and co-morbid slightly ahead of the Grim Reaper’s ordinary schedule.

And far worse, there were also extraordinary deaths in 2020 among the less Covid vulnerable population owing to hospitals that were in government ordered turmoil; and also to an undeniable rise in human malfunction among the frightened, isolated, home-bound quarantined, which resulted in a swelling of homicides, suicides and a record level of deaths from drug overdoses (94,000).

Still, the common sense line of sight across this 30-year chart below tells you 1000 times more than the context-free case and death counts which scrolled across America’s TV and computer screens day-in-and-day-out.

It tells you there was no deadly plague; there was no extraordinary public health crisis; and that the Grim Reaper was not stalking the highways and byways of America.

Compared to the pre-Covid norm recorded in 2019, the age-adjusted risk of death in America during 2020 went up from 0.71% to 0.84%. In humanitarian terms, that’s unfortunate but it does not even remotely bespeak a mortal threat to societal function and survival and therefore a justification for the sweeping control measures and suspensions of both liberty and common sense that actually happened.

This fundamental mortality fact—the “science” in bolded letters if there is such a thing—totally invalidates the core notion behind the Fauci policy that was sprung upon our deer-in-the-headlights president stumbling around the Oval Office in early March 2020.

In a word, the above chart proves that the entire Covid strategy was wrong and unnecessary. Lock, stock and barrel.

*  *  *

We’ve seen governments institute the strictest controls on people and businesses in history. It’s been a swift elimination of individual freedoms. But this is just the beginning… Most people don’t realize the terrible things that could come next, including Central Bank Digital Currencies (CBDCs), the abolition of cash, and much more. If you want to know how to survive what the central bankers and the Deep State have planned, then you need to see this newly released report from legendary investor Doug Casey and his team. Click here to download it now.

Authored by Michael Snyder via TheMostImportantNews.com,

One rule that I have always lived by is that crazy people should be avoided.  But what good is that rule now that our entire society has started to go completely nuts?  Everywhere you look, the fabric of our society is being completely shredded.  The thin veneer of civilization that we all used to be able to take for granted is rapidly disappearing, and violence often erupts for seemingly no reason at all.  You simply cannot have a “civilization” without civilized people, and the truth is that we are becoming less civilized with each passing year.  Sadly, this is particularly true for our young people.  Most of them have been brought through our completely amoral system of public education, and most of them have had their minds severely warped by thousands upon thousands of hours of mental garbage that masquerades as entertainment.  As a result, many of them behave like lunatics, and the streets of our cities are no longer safe.

One of the reasons why so many people like to interact with others through phones and video screens is because the real world has become just so hazardous.

A video that was trending on social media during the holiday season is a perfect example of this.  An absolutely massive brawl recently erupted at a Waffle House in Austin, Texas, and it got so much attention that Fox News even took notice…

“Waffle House” is trending on Twitter in reaction to a video of an employee deflecting and slapping down a chair that was thrown at her during a fight at one of the chain’s restaurants in Austin, Texas.

The original video, which is more than two minutes long, shows the lead-up and fight between multiple Waffle House customers and employees.

The employee who was struck with two chairs has gone viral for her quick reflexes and impressive deflection.

This brawl has been watched millions upon millions of times, and the reason why it became so popular is because many viewers found it to be extremely entertaining.

In particular, many were absolutely fascinated by the Waffle House employee that was seemingly able to deflect chairs that were thrown at her with a flick of her arm.

The US Military has many branches defending our country
Army
Navy
Marines
Air Force
Waffle House Employees
pic.twitter.com/o06ejeZpbV

— Brad Williams (@funnybrad) December 28, 2022

She is being called “Waffle House Girl”, and people are joking that she is a new superhero.

But where are all the people that are crying out in anguish for what has happened to this generation of young people?

An entire generation of young adults seems to have no moral foundation whatsoever, and that has dire implications for the future of our society.

Every day, there are more brawl videos featuring our young people on social media.

They are brawling in restaurants, they are brawling at Walmart, they are brawling at sporting events, they are brawling on the subway and they are brawling in the streets.

And we just act like all of this is perfectly normal.

These days, if you choose to use public transportation you are literally putting your life on the line.

One 78-year-old man that lives in Oregon recently found this out the hard way.  He was brutally attacked by a crazed 25-year-old lunatic that tried to chew his face off for apparently no reason at all.  When authorities finally arrived, they could “see the victim’s skull”…

A suspect is in custody after a grisly attack on an elderly man on a MAX platform in Gresham early Tuesday morning, according to police.

At about 2:17 a.m., officers responded to the Cleveland Station at 1200 Northeast 8th Street where witnesses reported an attack and a lot of blood.

Officers found the attacker still on top of the victim, a 78-year-old man from Hillsboro, and pulled him off.

According to police, the suspect “had chewed off the victim’s ear and part of his face. The injury was so severe that responders could see the victim’s skull.”

This sort of an attack on a 78-year-old man doesn’t make any sense at all.

But this is the society that we live in now.

In fact, senseless violence is even happening right outside of the White House…

A man allegedly beat another man to death with a metal pipe Wednesday in Washington, D.C., near the White House.

A jogger found the man at the Ellipse park in downtown Washington, D.C., and then found a nearby Secret Service agent, according to Fox 5. Police were able to obtain video footage that shows an altercation in the same area at around 6:30 a.m.

If they can’t even keep the area around the White House safe, do you really think that they are able to protect you?

Hordes of ruthless predators are roaming our streets, and they just keep getting younger and younger.

In Milwaukee, a 10-year-old boy is being accused of murdering his own mother because she wouldn’t buy him a virtual reality headset…

A 10-year-old boy who is charged with fatally shooting his mother for refusing to buy him a VR headset seems more preoccupied with his gadgets than the murder as he faces trial, family members say.

The Milwaukee boy is charged as an adult with first-degree reckless homicide in the November 21 killing of Quiana Mann, 44, who was shot in the face in their home.

The boy’s aunt Rhonda Reid told WTMJ-TV on Tuesday that when she talks to him in custody, he claims not to remember the shooting and quickly shifts the conversation to his favorite topic.

10-year-old kids aren’t supposed to know how to kill people.

What in the world has happened to us?

At this point, homicide and suicide are two of the most common causes of death for young children in this country…

Homicide as well as suicide are common causes of death for young age groups in the United States, second only to accidents for those between the ages of 15 and 34.

After that age, cancer, heart disease and more recently Covid-19 become bigger killers.

Even for children aged 5-9, homicide is a big danger and was the fourth most common cause of death for the age group in 2020, according to the Centers for Disease Control and Prevention.

For those 10 to 14 years old, both homicide and suicide are among the top 4 killers.

Are you starting to get my point?

Yes, the fabric of our society really is coming apart at the seams all around us.

And the biggest criminals of all are those that are supposed to be running the entire show.

The most heinous crimes are being committed by those that roam the halls of power, but our society has become so corrupt that most people simply do not care.

Just like so many great civilizations before us, we will surely fall if our current decline cannot be reversed.

My hope is that my articles will shock people into realizing that we desperately need change.

Because time is running out, and at this point most of the population is still in a deep state of sleep.

*  *  *

It is finally here! Michael’s new book entitled “End Times” is now available in paperback and for the Kindle on Amazon.

Stellantis NV unveiled its first electric pickup under the Ram Truck brand on the CES 2023 show floor in Las Vegas. 

On Thursday, the Ram 1500 Revolution Battery-electric Vehicle (BEV) Concept was shown for the first time. The truck is about two years behind rivals and is slated for 2024 production. 

.@RamTrucks unveils the Ram 1500 Revolution battery-electric vehicle Concept @CES 2023, demonstrating the brand’s commitment to electric-vehicle leadership. #StellantisDareForward #RamTrucks #RamRevolution #BEV #EV #CES2023

Details: https://t.co/1Ozo3R3qj4 pic.twitter.com/TG2smgsAgP

— Convenience Store News. (@CStoreNews_) January 6, 2023

“Everything our customers see from Ram in the future will be a direct descendant of this Ram Revolution concept,” Mike Koval, head of the Ram brand, told Bloomberg. He was firm that the all-electric drivetrain would deliver best-in-class customer performance:

 “We will push past what our competitors have announced.”

The Revolution’s competitors include Rivian Automotive Inc.’s R1T, Ford Motor Co.’s F-150 Lightning, Tesals’ Cybertruck, Chevrolet’s Silverado EV, and GMC’s Hummer EV, to name a few. 

“If Stellantis wants to survive, they’re going to have to beat at least one of the big dogs in trucks,” said Sandy Munro, founder of Detroit engineering firm Munro & Associates.

A Stellantis press release provided some specs about the Revolution, including its ability to charge 100 miles of range in about 10 minutes with 800-volt DC fast charging at up to 350 kW.

Head designer Ralph Gilles told Fox News the new truck has “a fold-down rear wall that stretches the bed floor into the cabin and a tunnel down the center that goes under the armrest through the dashboard and into the front trunk.” 

The concept shown at CES 2023 isn’t the final design, and Stellantis told Bloomberg there would be tweaks to the design before series production begins. 

Authored by Bryan Jung via The Epoch Times,

The Canadian government has implemented a temporary ban on foreigners buying residential property for two years.

The Prohibition on the Purchase of Residential Property by Non-Canadians Act took effect Jan. 1, as Ottawa attempts to ease a housing shortage among Canadian citizens.

The ban was approved by the Canadian Parliament on June 23, to make homes more affordable for local residents, after non-resident foreign investors bought properties across the country, raising prices.

“The Act defines residential property as buildings with 3 homes or less, as well as parts of buildings like a semi-detached house or a condominium unit. The law does not prohibit the purchase of larger buildings with multiple units,” according to the Canadian government in a press release.

Following his win in 2021, Prime Minister Justin Trudeau and his ruling Liberal Party introduced the ban after promising to pass it during the election campaign.

Trudeau Blames Canadian Housing Shortages on Non-Residents

Canadian housing prices had been rising since the start of the COVID-19 pandemic, with Trudeau’s party accusing foreign buyers of snapping up massive amounts of scarce homes as investments.

Major buyer markets such as Vancouver and Toronto had already imposed taxes on non-residents and owners of empty homes.

“The desirability of Canadian homes is attracting profiteers, wealthy corporations, and foreign investors,” read the Liberals’ campaign website in 2021.

“This is leading to a real problem of underused and vacant housing, rampant speculation, and skyrocketing prices. Homes are for people, not investors.”

The government later clarified in December that the new law would apply only to city residences and not to recreational properties such as summer cottages and that the ban would also include real estate company owners who are not Canadians.

Several exceptions in the act include certain categories of non-citizens, such as refugees, permanent residents, and those looking to rent.

Prime Minister Justin Trudeau delivers an address at the Laurier Club Holiday Event, an event for supporters of the Liberal Party of Canada, in Gatineau, Que., on Dec. 15, 2022. (Justin Tang/The Canadian Press)

Foreign Violators Face Strict Penalties

Corporations or individuals who violate the ban would be subject to a large fine, or even ordered to sell the property.

“As set out under the Act, a non-Canadian that contravenes the prohibition, or any person or entity that knowingly assists a non-Canadian in contravening the prohibition, is guilty of an offence and liable on summary conviction to a fine of up to $10,000,” the act reads.

“The Act establishes that, if a non-Canadian is convicted of having contravened the prohibition, the superior court of the province in which the residential property to which the contravention relates is situated may, on application of the responsible Minister, order the residential property to be sold. Any judicial sale order would be at the discretion of the applicable court.”

If a foreign buyer is found in violation and is forced to sell the residential property, they may not receive more than the original purchase price.

“The Act also establishes that any such court-ordered sale will result in the non-Canadian receiving no more than the purchase price paid for the residential property. For greater clarity, the sale of a property in breach of the prohibition does not affect the validity of the sale.”

Another exception is granted to Canadian Indigenous tribes, who are partially exempted from the act.

“The Regulations explicitly clarify that the prohibition in the Act does not apply in circumstances where it would conflict with Indigenous rights recognized and affirmed by section 35 of the Constitution Act, 1982. This provision was subject to public consultation, including direct outreach to Indigenous governments and organizations,” the law states.

Canadian Realtor Groups Object to the New Ban

However, the sudden rise in home prices between 2020 and 2021 was already on the decline in 2022, making the act unnecessary, according to the Canadian Real Estate Association (CERA), which is critical of the new law.

CERA reported that average home prices in Canada were 13 percent lower from a peak of more than $590,000 at the start of 2022, to just over $465,000 in December.

The country’s real estate market has been cooling down, after the Bank of Canada aggressively raised interest rates to rein in high inflation, causing mortgage rates to spike.

The real estate association’s home price index is still 38 percent higher than at the end of 2019, but housing inventory is now back to pre-pandemic levels.

…

Meanwhile, the real estate association stated its concerns over the housing ban, even with exemptions for those intending to move to Canada, combined with the possibility of retaliation by the United States and Mexico.

It fears a similar ban on Canadians looking to purchase winter homes in warmer climates to the south.

“Canadians purchase vacation and residential properties in many countries, but particularly in the United States,” according to CERA, which said Canadians are the largest foreign buyers of American properties, with most in Florida and Arizona.

“These provide Canadians with a place to spend the winter months and are a form of savings for Canadian retirees.”

“If Canada places a ban on Americans owning property in Canada, we should expect them to respond in kind,” they continued.

…

Read more here…

Authored by Lisa Bian via The Epoch Times,

On Jan. 3, the South Korean government announced that travelers from Hong Kong and Macau must provide a negative COVID-19 test from Jan. 7, in addition to arrivals from mainland China, and 76 percent of positive COVID-19 cases at the South Korean border were in Chinese people.

The Korea Disease Control and Prevention Agency (KDCA) said that from Saturday, visitors from Hong Kong and Macau would be required to show proof of a negative PCR test within 48 hours of departure, or a negative rapid antigen test within 24 hours when entering Korea. Travelers would be required to upload test results on the Q-CODE website before boarding the plane.

Travelers from Hong Kong and Macau are only required to take a pre-departure test for COVID-19 and are not restricted from applying for a short-term visa. However, if there are any symptoms, a COVID-19 test must be done after entry into the country, and those found positive at the airport must quarantine for seven days at their own expense.

According to the KDCA, the number of imported COVID-19 cases in South Korea on Jan. 3 was 172, the highest in three months, of which 131 (76.2 percent) were from China. In the previous week, 31 percent of imported COVID-19 cases were from China. South Korea started to test all travelers from China for the disease on Jan. 2.

Cho Kyu-hong, minister of health and welfare and the first director of the KDCA, said at a meeting on Jan. 4, “We need to be on high alert for the pandemic in China at this time.”

In the absence of transparent information about the current outbreak in mainland China, many countries around the world have adopted entry restrictions on Chinese travelers.

On Dec. 30, 2022, the South Korean government announced the temporary suspension of short-term visas from mainland China to Korea; the suspension of additional flights from mainland China; the requirement for pre-departure tests for travelers from China; and that those testing positive upon arrival must undergo a seven-day quarantine at an isolation facility designated by the South Korean government at their own expense.

In a regular press conference, Lim Sook-young, the head of the situation coordination team at the KDCA, explained on Jan. 4 that the South Korean government considered the differences between mainland China, Hong Kong, and Macau in terms of pandemic data. In particular, the discontinuation of the publication of statistics on COVID-19 in China makes it difficult to get an accurate picture of the pandemic. Owing to the lack of transparency in China, the South Korean government took stronger measures on arrivals from China than from Hong Kong and Macau.

The Chinese Communist Party abolished its zero-COVID policy in early December, and in the midst of a major outbreak in China, the regime’s Health Commission suspended the release of daily pandemic data on Dec. 25. The World Health Organization has repeatedly asked Chinese authorities to share specific information on the outbreak in real time.

South Korean authorities plan to monitor the flow of the pandemic in Hong Kong and Macau and decide whether to introduce additional prevention measures.

Regarding the possibility of Chinese travelers presenting forged negative COVID-19 tests and flying on passenger planes, Lim said that there have been some cases of forged PCR test results being used.

In addition, South Korea started to strengthen its measures against mainland China on Jan. 2. Just one day after that, according to the Incheon Police Department, a Chinese visitor to South Korea tested positive at Incheon International Airport on the evening of Jan. 3 and was placed in a quarantine facility at a nearby hotel. He escaped during the transfer to the quarantine site and is now being pursued by police.

In addition, there is a shortage of cold and fever medicine, after the outbreak in mainland China. The South Korean government said it is concerned about the shortage of cold medicine in the country owing to massive purchases of medicine by Chinese people. Authorities established a purchase limit on cold medicine sold in pharmacies on Dec. 30 last year, while stepping up efforts to crack down on the smuggling of cold medicine through airports and parcels.

According to Korean outlet NEWSIS, one Chinese man bought 6 million won (about $4,700) of antipyretic and cold medicine at a pharmacy in the city of Hanam, Gyeonggi Province.

Sam Bankman-Fried is fighting to persuade a US court that he should be able to access Robinhood shares worth around $450 million to help pay for his legal fees. The problem: the Department of Justice – which does not believe the 56 million shares of Robinhood were property of the bankrupt FTX estate – moved on Wednesday to seize the shares. Another problem: both FTX and BlockFi are also laying claim to the shares as well.  And while FTX’s creditors hope the shares can help make them whole, Bankman-Fried said he needs the funds to cover his legal fees. 

Lawyers for the disgraced former CEO in a Delaware court filing on Thursday that the 56.3 million Robinhood shares should be returned to Bankman-Fried because the company that owns them, Emergent Fidelity Technology Ltd, is not part of the bankruptcy estate (at least not yet). Bankman-Fried owns 90% of Emergent. He and former FTX chief technology officer Gary Wang  borrowed $546 million from Alameda Research (in other words used money stolen from FTX clients) to buy the Robinhood shares, according to court filings. Robinhood’s shares closed at $8.11 on Thursday, giving the stake a value of $456 million.

“Mr. Bankman-Fried has not been found criminally or civilly liable for fraud, and it is improper for the FTX Debtors to ask the Court to simply assume that everything Mr. Bankman-Fried ever touched is presumptively fraudulent,” his lawyers said in the filing. They added that Bankman-Fried’s need to pay his legal bills is greater than the “economic loss” that FTX faces, citing several legal precedents; we are confident that FTX clients would certainly beg to differ.

“Mr. Bankman-Fried requires some of these funds to pay for his criminal defense,” the filing read, noting that the disgraced FTX founder is “facing potential criminal liability.” Bankman-Fried pleaded not guilty to all charges, including wire fraud and campaign finance violations, in New York Tuesday.

Bankman-Fried’s move is the latest in an ongoing ownership dispute over the shares. The equities, once worth more than $600 million, have plunged since they’ve been stuck in legal limbo.

On Thursday, court revealed that more than 56 million Robinhood shares are on the line, worth a little more than $450 million as of Friday’s prices. The shares belong to Emergent Fidelity Technologies, of which Bankman-Fried is the 90% stockholder, the filing added.

Representing Bankman-Fried in the bankruptcy proceedings is Gregory T. Donilon from Montgomery McCracken Walker & Rhoads LLP.

Bankman-Fried’s criminal lawyers are Cohen & Gresser’s Christian R. Everdell and Mark Stewart Cohen, who recently represented Ghislaine Maxwell in her sex trafficking case.

Bankman-Fried’s personal legal fees are not public, but Sullivan and Cromwell LLC, the firm leading FTX’s restructuring, accepted a $12 million retainer from the exchange before it filed for Chapter 11 on Nov. 11, 2022. As of Nov. 3, 2022, the firm had already cashed in more than $3.4 million of its retainer, nearly 30%.

Authored by Charles Hugh Smith via OfTwoMinds blog,

As painful as this liquidation and repricing of risk is for borrowers and lenders, those without debt, those with cash and those with essential skills that are in demand regardless of boom or bust will all benefit.

Who would benefit from a severe global recession? The typical answer is “no one,” as a drop in economic activity is assumed to hurt everyone. But it’s not quite that simple; there are silver linings for some in all those dark clouds.

When demand for energy plummets, the price of oil tends to drop dramatically. There are several reasons for this:

1. Price is set on the margins so a modest decline in demand can trigger an outsized drop in price. In the 2008-09 timeframe, oil fell from $147/barrel to the $30s on a modest decline in demand.

2. While oil producers always announce production cuts to maintain high process, they are under pressure to offset plummeting income by pumping more oil, not less.

3. Speculative capital floods into oil when prices are rising and exits when prices are dropping. This financialization of the energy markets exacerbates price movements up and down.

Dramatic declines in oil hurt producers and benefit consumers. As demand for goods and services declines, suppliers and retailers must trim prices and profit margins to maintain market share. This deflationary pressure benefits consumers.

As marginal businesses close their doors and marginal renters move out of high-cost rentals, landlords must reduce rents to avoid the eventual result of mass vacancies, i.e. bankruptcy. Reductions in rents benefit consumers.

Marginal homeowners and absentee landlords slide into insolvency and are either forced to sell their homes and real estate or their lenders foreclose on their mortgages and sell the lender-owned properties to reduce their losses. These forced sales reduce the price of these assets, benefiting those with cash who can now afford to buy assets that were unaffordable in the pre-recession bubble.

A deep recession also shifts global capital flows. As a general rule, oil/gas exporters and manufacturing exporters pile up excess savings (trade surpluses) by selling energy and goods to importing nations running trade deficits which are funded by borrowing (debt).

The exporting nations need some place to invest or park their excess capital and buying the importers’ debt yields interest income. This excess capital can also be placed in reserves (gold or foreign currencies), invested in offshore real estate, stocks, enterprises, etc., low-utility “bridges to nowhere” in the domestic economy or malinvested in grandiose malls, stadiums, palaces, etc.

It can also be spent in social welfare or high-technology programs, etc.

A severe global recession upends these capital flows. As demand craters, exporters’ surpluses drop precipitously. Rather than having surplus capital to spend/invest, the exporting nations must sell assets or tap reserves to fund the programs that the domestic populace views as their birthright.

As demand craters, importing nations import less, reducing their borrowing needs. But since the surplus capital of exporters has plummeted, the debtor nations find there are fewer buyers of their debt. This supply-demand imbalance pushes interest rates / bond yields higher, as importing / debtor nations must compete for the shrinking pool of capital sloshing around the global economy.

As marginal private-sector and public-sector borrowers default, lenders tighten lending guidelines to reduce the risk of losing money on debt offered to potentially marginal borrowers. Those seeking loans find it more costly to borrow as credit tightens, and those with cash find their capital earns a higher return as capital becomes more scarce.

These dynamics typically generate self-reinforcing feedback loops. As defaults rise, forced selling then triggers additional defaults as prices continue dropping. Heavily indebted households, enterprises and nations that suffer declines in income default on their debt, forcing a repricing of risk throughout the global credit market.

Prices that the unwary reckon have hit bottom continue to drop as the self-reinforcing dynamic of liquidation and repricing of risk feeds on itself.

As painful as this liquidation and repricing of risk is for borrowers and lenders, those without debt, those with cash and those with essential skills that are in demand regardless of boom or bust will all benefit. Those burdened with high costs and promises that cannot be kept will be liquidated. Those with low costs and few promises have the means to adapt to changing conditions.

In terms of natural selection, a severe global recession puts tremendous selective pressure on every participant on every scale: households, small businesses, global corporations, nations, alliances and empires. The least resilient won’t have the means to adapt and they will default/dissolve. The more resilient will have the means to tighten their belts and survive. The most adaptable will not just survive, they will emerge stronger due to their capacity for rapid, successful adaptability.

What it takes to not just survive but emerge stronger is the topic of my two books Global Crisis, National Renewal: A (Revolutionary) Grand Strategy for the United States and Self-Reliance in the 21st Century.

*  *  *

My new book is now available at a 10% discount ($8.95 ebook, $18 print): Self-Reliance in the 21st Century. Read the first chapter for free (PDF)

Become a $1/month patron of my work via patreon.com.

Back in 2020, around the time Xi Jinping decided to burst the Chinese housing bubble, which as a reminder was estimated by Goldman at the time to be the world’s single largest asset class (and bubble) at over $62 trillion, larger than either the US equity and bond markets…

… China unveiled the so-called “three red lines” policy, which sought to reduce developers’ leverage, lower risk in the financial sector and make homes more affordable as part of President Xi Jinping’s common prosperity push and practically meant that only companies that have very little debt (which basically meant nobody) were allowed to grow their debt at a max of 15%, and since most Chinese developers were in the 2 or 3 red lines category, it prohibited them from growing debt (a full breakdown of the three criteria is shown below),

The measures, which imposed strict debt and cash-flow targets on real estate firms, choked off liquidity for the highest-leveraged developers, contributing to the avalanche of defaults and construction halts that sparked mortgage boycotts and plunging sales across the nation.

The outcome result was the biggest shock for China’s property sector, which quickly took down giant housing developer Evergrande and numerous of its undercapitalized peers, impoverished countless real estate billionaires (some say this was Xi’s plan all along), sent home prices sliding and hammered household consumption across China’s middle class, whose biggest asset – their home – was no longer appreciating at double digits every year and in fact was contracting for the first time in a decade.

So fast forward to today when just weeks after China’s shocked the world with the speed and magnitude of its “covid-zero” reversal, Beijing – in its pursuit of a powerful, and generously credit funded, economic rebound appears set to unleash the full power of the country’s real estate bubble because as Bloomberg reported overnight, “China is planning to relax restrictions on developer borrowing, dialing back the stringent “three red lines” policy that exacerbated one of the biggest real estate meltdowns in the country’s history.”

According to BBG sources, Beijing would allow “some property firms to add more leverage by easing borrowing caps”, and push back the grace period for meeting debt targets set by the policy. The deadline could be extended by at least six months from the original June 30 date.

Such easing could mark “the most dramatic shift in China’s real estate policy, adding to a clutch of measures issued since November to bolster the battered sector that accounts for about a quarter of the nation’s economy.” Indeed, within the span of just a few weeks, the government has softened its stance for sectors from chips and coal imports to internet platform businesses, underscoring Beijing’s resolve to refocus on economic growth.

“This is a signal from the top regulators in an attempt to help restore market confidence in the real estate sector and create a positive feedback loop between the homebuyers, developers, and the physical market,” said Zerlina Zeng, senior credit analyst at Creditsights Singapore LLC.

The news helped push China’s property index higher by 1.5% and nearly 100% above its late October low when Chinese assets saw a widespread global liquidation amid covid zero fears and Xi’s escalating crackdown on asset markets. Prices for China dollar high-yield notes, a sector dominated by property firms, have reached levels last seen in January 2022 at an average 75 cents on the dollar.

The offshore yuan surpassed its 200-day moving average for the first time since April after the news.

What does this policy reversal mean for China’s property markets, and economy in general? Well, consider that with access to credit markets largely closed since 2020, developers had defaulted on more than 140 bonds in 2022, according to data compiled by Bloomberg. Overall, developers missed payments on a combined $50 billion in domestic and global debt based on issuance amount.

All of that is about to go into reverse.

In the meantime, however, China Evergrande Group, once the country’s biggest developer and a poster child for the property crackdown, was labeled a defaulter in December 2021 after it missed payments on several bonds. Others followed suit, including Kaisa Group Holdings Ltd. and Sunac China Holdings. The defaults crushed what was once the most active and lucrative high-yield bond market in the world.

Fears of further contagion meantime weakened consumer confidence and roiled global investors who had long assumed the government would bail out the real estate titans. The crisis spooked buyers, driving home sales down by the most in at least two decades, while home prices declined for 15 straight months.

But now, very suddenly and unexpectedly, after almost two years of housing market pain Beijing is changing its stance. Under the new proposal, China will ease restrictions on debt growth for developers depending on how many red lines they meet. According to Bloomberg sources, companies that meet all three thresholds will no longer have borrowing caps and can use letter of guarantees from banks to pay land purchase deposits.

To be sure there had been vocal opposition to China’s credit crackdown: as recently as last month, the head of a leading Chinese think tank had signaled Beijing needed to rethink what he called the mistaken “three red lines.”

“Using such harsh policies toward the sector was a total mistake,” said Yao Yang, dean of the National School of Development at Peking University, in an interview. “We had companies whose business was more or less healthy, but because of the “three red lines,” their business became a problem.”

As Bloomberg also notes, the policy reversal comes on the heels of a slew of directives aimed at reviving the housing sector, which accounts for as much as 70% of household assets in some parts of the country. The recent measures include:

• Lower mortgage rates for first-home buyers if newly constructed house prices drop for three consecutive months
• A nationwide cap on real estate commissions to boost demand
• Allowing private equity funds to raise money for residential property developments
• Pledging 200 billion yuan ($29 billion) in special loans to ensure stalled housing projects are delivered
• A 16-point plan unveiled in November that ranged from addressing the liquidity crisis to loosening down-payment requirements for homebuyers

Officials have signaled further support. In an interview with Xinhua News Agency, China’s housing minister Ni Hong pledged further efforts to take a “sound approach” to address the risk of “capital chain breaks” among developers, and steer the industry onto a “high-quality development path” in 2023.

The various easing measures have sparked a sharp rally in property stocks and bonds, boosting confidence in the sector as some of the stronger firms like Country Garden Holdings Co. regain access to credit and equity markets to pay debt and resume construction.

That said, the sweeping measures have yet to arrest the slump in China’s housing sector, which has also been slowed by Covid lockdowns and more recently, a surge in virus cases. New home sales dropped 31% in December from a year earlier. Citigroup Inc. analysts including Griffin Chan expect sales to fall another 25% in 2023, as recovery will be constrained by reduced supply, and buyers’ expectations will take time to turn around.

Finally, what China’s reversal means for the rest of the world is that a tidal wave of new credit is about to be unleashed, and as a recent report in Economic Information Daily said, the amount of new credit China issues is likely to reach another record high this year, while interest rates for longer-term loans could decline further. In other words, prepare for a surge in Chinese Total Social Financing as Beijing finally ends its latest experiment with austerity and is finally set to unleash the biggest credit expansion in history.

And yes, it will be inflationary, which means that China – just like Putin before it – is about to control what happens in US capital markets because the last thing the Fed can do is stop hiking just as China is about to go into credit-funded overdrive.

Authored by Tom Ozimek via The Epoch Times,

Former President Donald Trump said on Jan. 5 that if he’s successful in his bid for the presidency in 2024, he will order the U.S. military to crush Mexican drug cartels and show them “no mercy.”

Trump made the announcement as President Joe Biden was preparing to make his first visit to the U.S.–Mexico border since taking office.

In a video statement on Thursday, Trump blamed “Biden’s open border policies,” which he called a “deadly betrayal of our nation,” for fueling drug-related deaths among Americans.

Illegal immigration has soared under Biden’s watch, with unauthorized crossings exceeding 2.3 million in fiscal year 2022, according to Customs and Border Protection data. That figure topped the previous record by around 1 million and was more than twice the highest level recorded under Trump.

Trump, who previously suggested using U.S. military force against drug cartels operating south of the border, including by reportedly launching missiles into Mexico to destroy drug labs, said in Thursday’s video that deadly narcotics like fentanyl are pouring “across our wide open border” and are “stealing hundreds of thousands of beautiful American lives.”

Since Biden took office, 200,000 Americans have died on drug overdoses, Trump said.

Drug cartels are “waging war on America,” Trump continued, adding that the time has now come “for America to wage war on cartels.”

Trump claimed he would designate cartels as foreign terrorist organisations and block their access to the global financial system, while asking Congress to pass laws that would punish drug smugglers and human traffickers with the death penalty.

“When I am president, it will be the policy of the United States to take down the cartels, just as we took down ISIS and the ISIS caliphate—and just as, unlike the situation we are in today, we had a very, very strong border,” Trump said.

The former president said he would deploy all necessary military assets, including the U.S. Navy, to impose a naval embargo on cartels and make sure they can’t use regional waters to smuggle drugs into the country.

Further, he would “order the Department of Defense to make appropriate use of special forces, cyber warfare, and other overt and covert actions to inflict maximum damage on cartel leadership, infrastructure, and operations.”

“Millions and millions of families and people are being destroyed. When I am back in the White House, the drug kingpins and vicious traffickers will never sleep soundly again,” Trump said.

“We did it once, and we did it better than anybody else.”

Trump says he will use the full force of the military to crush the drug cartels: pic.twitter.com/7tFrmHmMES

— American Firebrand (@AmFirebrand) January 5, 2023

Trump’s remarks came as Biden announced steps that he said would improve border security and help stem the flow of illegal immigration while expanding a parole program that opens a legal pathway for tens of thousands of people a month to enter the United States lawfully.

‘Do Not Just Show Up at the Border’

Biden said at a White House press briefing Thursday that the United States would start turning away Cubans, Haitians, and Nicaraguans who cross the U.S.–Mexico border illegally. That move builds on an existing effort to stop Venezuelans from trying to enter the United States without authorization.

“Do not just show up at the border,” Biden said.

 “Stay where you are and apply legally from there.”

While seeking to block illegal crossings by Cubans, Haitians, Nicaraguans, and Venezuelans, the Biden administration is also expanding a parole program that allows 30,000 people from those four countries per month to enter the United States legally for two years and work.

Most of the people crossing the U.S.–Mexico border illegally in recent times are from those four countries.

“We anticipate this action is going to substantially reduce the number of people attempting to cross our southwest border without going through a legal process,” Biden said, adding that Mexico has agreed to take back up to 30,000 people a month who get caught trying to cross the border illegally.

People gather near a crossing into El Paso, Texas, as seen from Ciudad Juarez, Mexico, on Dec. 20, 2022. (Christian Chavez)

Another part of the new effort is letting people who are seeking to enter the United States schedule an appointment at a port of entry to start a claim for asylum.

Most asylum claims are ultimately rejected, but a major backlog in the courts leaves most illegal aliens living in the country for years before their case is adjudicated. Some people aren’t deported even if their claims are denied.

The Biden administration is also sending more asylum officers and judges to the border to try to adjudicate the cases more quickly. The aim is to reduce the initial processing time from months to days.

“We can’t stop people from making the journey, but we can require that they come here in an orderly way under U.S. law,” Biden said.

The administration also plans to increase funding for border communities impacted by the surge in illegal immigration.

The actions “will make things better but will not fix the border problem completely,” Biden added, blaming Congress for not approving a plan he proposed to reform the immigration system.

“This new process is orderly,” Biden said. “It’s safe and humane, and it works.”

Biden made the remarks ahead of a planned visit to El Paso, Texas, a border town that has been at the forefront of the illegal immigration surge, having become the busiest corridor for illegal crossings.

Over the past week, border agents have encountered an average of 1,731 illegal aliens a day in a 268-mile stretch of the border known as the El Paso Sector, according to figures published by the city.

At the same time, there was an average of 3,410 people daily in Border Patrol custody over the past seven days.

The world’s largest memory chipmaker recorded an operating profit decline of 69% for the three months that ended in December — the worst drop in nearly a decade — as the semiconductor supply glut worsens. 

Preliminary numbers released by Samsung showed the company’s operating profit declined to 4.3 trillion won ($3.4 billion) last quarter, missing the average analyst estimate of 6.7 trillion won ($5.3 billion). Sales fell to 70 trillion won ($55 billion) in the quarter, down 8.6% over the same period a year ago. The company is expected to publish a full financial statement with net income and updates on divisional performance at the end of the month. 

“Amid continued external uncertainties, including a potential global economic downturn, overall earnings decreased sharply quarter on quarter as we saw a significant drop in the memory business results due to lackluster demand and weaker sales of smartphones,” the company said in a statement.

Readers have been well informed about South Korea’s largest company grappling with dismal memory chip demand. We cited the Korea Economic Daily in September that warned about Samsung’s troubles and how the “semiconductor industry has entered a full-fledged ice age.”

“The decline in 4Q demand was greater than expected as customers adjusted inventories in their effort to further tighten finances,” Samsung said in its statement, adding significant price declines in memory chips and slumping smartphone sales were due to “weak demand resulting from prolonged macro issues.” 

And those macroeconomic headwinds Samsung might be talking about could be the global economy sliding into recession. Earlier this week, International Monetary Fund Managing Director Kristalina Georgieva warned about global recession risks on CBS’s ‘Face the Nation.’ 

South Korea’s exports of memory chips are in a down-cycle, indicating a worsening slump in tech demand critical to global economic growth.

Despite the bad news, though mostly known, shares of Samsung Electronics trading on Korean exchanges rose 1.4% Friday — holding above the 100-day moving average. 

Here’s what Wall Street analysts had to say about Samsung (list courtesy of Bloomberg):

CLSA Securities Korea (Sanjeev Rana) 

• “Shares are rising because really bad numbers from Samsung raise the likelihood of the company taking some action to control memory supply in the form of capex or production cut” 
• “Samsung has been adamant that it has no plans to cut capex or supply but a fast deterioration in the demand and its deteriorating profitability means that the management might be forced to consider the unthinkable, i.e. memory production cuts” 
•  Other memory chip suppliers from Micron to Kioxia and SK Hynix have already announced reduction in either capex or output; if Samsung joins, it will become clear that the industry supply growth will tighten, leading to a better demand supply balance later this year

Midas International Asset Management (Shin Jin-Ho) 

• In the past when earnings were bad, the shares began to rebound after Samsung’s comments on output adjustment 
• So investors are buying on the earnings shock, as expectations for output cut increase after earnings miss 
• Bullish on Samsung stock price in the short term

Bloomberg Intelligence (Masahiro Wakasugi) 

• Samsung’s 1Q profit could stay low after its 4Q preliminary results came in 35% below consensus
• The NAND chip division may have posted a loss in 4Q due to severe price erosion while DRAM generated profit
• Earnings recovery might be slow in 2023 on declining chip prices despite demand recovery in 2Q or 3Q