For almost a year now, we have been dutifully tracking several key datasets within the auto sector to find the critical inflection point in this perhaps most leading of economic indicators which will presage not only a crushing auto loan crisis, but also signal the arrival of a full-blown recession, one which even the NBER won’t be able to ignore, as the US consumers are once again tapped out. We believe that moment has now arrived.

But first, for those readers who are unfamiliar with the space, we urge you to read some of our recent articles on the topic of car prices – which alongside housing, has been the biggest driver of inflation in the past 18 months – and more specifically how these are funded my the US middle class, i.e., car loans, and last but not least, the interest rate paid for said loans. Here are a few places to start:

• Are We Headed For An “Auto Loan Crisis” As Delinquencies Begin To Rise? – July 7
• A Flood Of Repossessed Vehicles Poised To Hit The Used-Car Market – July 25
• American Drivers Go Deeper Into Debt As Inflation Pushes Car Loans To Record Highs – Aug 29
• Credit Card Rates Just Hit A Record As The Average Car Loan Rises To Fresh All Time High – Oct 9
• New-Car Loan-Rates Set To Hit 14-Year High As Affordability Crisis Worsens – Nov 3

So while the big picture is clear – Americans are using ever more debt to fund record new car prices – fast-forwarding to today, we have observed two ominous new developments: the latest consumer credit report from the Fed revealed a dramatic spike in the amount of new car loans, which increased by more than $2,000 in one quarter, from just over $38,000 (a record), to $40,155 (a new record).

Now this shouldn’t come as a shock: a simple reason why new car loans have hit record highs is simply because new car prices have also soared to all time highs, as the next chart shows.

Here we will ignore for the time being cause and effect, or “chicken or egg” questions – i.e., whether record new car prices are the result of easy record credit, or whether record new car loans are simply tracking the explosive surge in car prices, and instead focus on something even more ominous: the explosion in the average interest rate on a new 60 month auto loans: according to Bankrate, as of Dec 16, the number is just over 6.50%, almost doubling since the start of the year, and the highest in 12 years.

It is this surge in nominal auto debt as well as the unprecedented spike in new auto loan rates, that we believe has finally pushed the US car sector to the infamous Wile Coyote point of no return.

Consider the following: according to various recent financial analysts, a growing number of consumers are falling behind on their car payments – a trend which will only accelerate – in a sign of the strain soaring car prices and prolonged inflation are having on household budgets.

As NBC reports, whereas repossessions tumbled at the start of the pandemic when Americans got a boost from stimulus checks and lenders were more willing to accommodate those behind on their payments, in recent months, the number of people behind on their car payments has been approaching prepandemic levels, and for the lowest-income consumers, the rate of loan defaults is now exceeding where it was in 2019, according to a recent report from Fitch.

Naturally, with the economy set to slump into a Fed-induced recession, the trend will only get much worse into 2023 with economists expecting unemployment to rise, inflation to remain relatively high (at least until the economy crashes) and household savings – already at record lows – set to dwindle. At the same time, a growing number of consumers are having to stretch their budgets to afford a vehicle; the average monthly payment for a new car is up 26% since 2019 to $718 a month, and nearly one in six new car buyers is spending more than $1,000 a month on vehicles. Other costs associated with owning a car have also shot up, including insurance, gas and repairs.

“These repossessions are occurring on people who could afford that $500 or $600 a month payment two years ago, but now everything else in their life is more expensive,” said Ivan Drury, director of insights at car buying website Edmunds. “That’s where we’re starting to see the repossessions happen because it’s just everything else starting to pin you down.”

The silver lining is that while the US auto sector faces unmitigated disaster in 2023, for those in the repossession business, it’s been difficult to keep up. Jeremy Cross, the president of International Recovery Systems in Pennsylvania, said he can’t find enough repo men to meet the demand or space to hold all the cars his company has been tasked with repossessing. With the holidays approaching, he’s been particularly busy as people prioritize spending elsewhere, and he’s expecting business to keep up throughout next year and 2024.

“Right now, it’s really the perfect storm,” said Cross. “Over the last two years, vehicle prices were inflated because there was no new car supply, people were still buying like crazy because they had a lot of stay-at-home cash, they had inflated credit scores, so it was like a recipe for disaster.”

Ironically, at the same time, the number of repossession companies has shrunk by 30% as many firms closed up shop and the workers found jobs in other industries when repossessions tumbled during 2020, Cross said. Now, he told NBC, lenders are paying him premiums to repossess their cars first in anticipation of a continued increase in loan defaults (read: plunging prices).

“The volume is picking up, and the remaining companies that are still performing repossessions are very busy,” Cross said. “The overall numbers are still not prepandemic numbers, but we will see a big change coming in ‘23 and ‘24 that I think the lenders are starting to recognize because they are offering financial incentives that they never had to do in the past. They’re jockeying for position knowing that there’s only a certain amount of bandwidth available.”

Predictably, the coming auto crisis is an issue that’s raised concern among officials at the Consumer Financial Protection Bureau, who say they are seeing troubling signs in the auto market, particularly among so-called subprime borrowers, who have below-average credit scores, and those with loans taken out in 2021 and 2022 when auto prices were particularly high.

Yes: that 2008 deja vu feeling is back front and center….and so are the defaults.

“Loans taken out in those years are performing worse than prior years just because those consumers had to finance cars once the supply chains were jammed and the prices started to go up,” said Ryan Kelly, acting auto finance program manager for the CFPB. “Those consumers got hit with inflation twice. First, when they had to finance a car after the prices went up, and then when they had to put gas in the car after the Russia-Ukraine conflict started. So there’s just a lot of consumer stress.”

What happens next?

Well, as the economy continues to deteriorate in 2023, the number of those falling behind on their car payments will continue to rise, even as consumers tend to give priority to their car payment ahead of most bills because of the importance a car plays in getting to work or potentially providing shelter, industry analysts said.

For now, the rate of defaults and repossessions isn’t expected to reach 2008 and 2009 levels, when there was a spike caused by the financial crisis. The percentage of auto loans that were 30 days delinquent was at 2.2% in the third quarter compared with 2.35% delinquent over the same period in 2019, according to data from Experian. By contrast, just over 4% of auto loans went into default in 2009. However, that could quickly change once the 2023 economy unleashes the final whammy of mass layoffs (which have already slammed the tech sector).

“We’re expecting it to continue to increase and maybe even breach prepandemic levels because of the macroeconomic headwinds of higher interest rates, higher cost of borrowing and expectations for unemployment to continue to increase,” said Margaret Rowe, the lead auto analyst at Fitch. “I think our expectation is that we’re going to continue to see it go up, but it’s just been so low that even going up isn’t like what we saw in the Great Financial Crisis.”

Some, like Cox Automotive, remain optimistic: their analysts (who just may be a little conflicted) forecast that while loan defaults and repossessions will increase from their pandemic lows, long-term through 2025 they predict overall defaults and repossessions will remain at or below historic norms.

Still, the financial squeeze has been particularly difficult for lower-income consumers looking for budget vehicles, which have been particularly hard to find. While in the past, those car buyers would have purchased a used car for $7,000 to $15,000 they are now having to spend $20,000 to $25,000 for the same type of vehicle. Among dealers that cater to subprime and deep subprime consumers, the average listing price on their cars has almost doubled since the beginning of the pandemic, according to the CFPB.

“That near prime and subprime group of consumers, they’re getting hit very, very hard by inflation. That group of people did not have much disposable income. They had to finance a more expensive car and then they got hit with prices going up overall. There’s just a lot of stress,” said Kelly.

Ally Financial, which has a significant share of loans to subprime borrowers, said in its October earnings report that it expects delinquencies to increase to as much as 3.8% compared with 3.1% in 2019. That estimate will prove to be overly optimistic.

Another risk to car buyers’ finances is the growing length of auto loans, many of which now exceed seven years. While those longer term loans can lower the monthly payments amid higher prices, consumers risk paying off the loan much more slowly than the car is depreciating, leaving them underwater if they need to sell the vehicle. It can also mean higher interest costs over the life of the loan on top of already inflated vehicle prices.

And speaking of interest rates, they have not been this high since 2009 and will stay at their current levels until the Fed finally pivots. As NBC notes, “for consumers, there is unlikely to be any relief over the next year. Interest rates are expected to remain high for those needing to borrow to buy a vehicle, and Covid-related plant closures and material shortages are continuing to ripple through the car manufacturing supply chain, limiting the number of new vehicles.”

“I dare think what happens to people who are signing up for new loans today,” said Drury. “It’s not going to be better when we see these payments so high.”

But wait, there’s more.

As twitter’s CarDealershipGuy – who claims to be an anonymous auto-industry CEO and whose analysis has been featured in places like the NY Post and who frequently Tweets about the state of the auto market – laid out a long thread on Thursday, all of the above may end up being an overly optimistic assessment of the perfect storm that’s about to hit the auto sector:

“This morning I discovered something *extremely* alarming happening in the car market, specifically in auto lending. I’m now convinced that there is a massive wave of car repossessions coming in 2023,” he wrote.

Recapping much of what we said above, he noted that over the past 2 years, many people took out exorbitant loans on cars and while car values were inflated (and still are) but many people simply had no choice and bought an overpriced a car. Then, echoing the Fitch assessment, he notes how those buyers are underwater: “Car valuations are now plummeting. Some cars have declined in value as much as 30% y/y. And these same people that took out these big loans are now ‘underwater’. Basically, they owe banks more on these cars than they are worth. And the banks are well-aware of this.”

The punchline is his personal experience from late last week. “This morning, one of our General Managers opened up DealerTrack — a portal that dealers use to communicate with auto lenders — and highlighted something very concerning. 9 of our lending partners have started WAIVING ‘open auto stipulations’ for consumers.”

What this means, he explained, is that once consumers are stuck with a vehicle they paid too much for, they can’t trade it in without putting some money up front to cover the difference of what is owed on it versus what it is worth. At that point, he notes, “Dealer can’t sell consumer a car, Consumer can’t buy a car, And, you guessed it, lender can’t finance a car!”

The lender then knows that most consumers are stuck and waives the open auto stipulation – meaning they allow the consumer to buy the new car with a second loan knowing they already have a first one. But the lender does it because they know that the buyer will default on the old, other car.

Cue default avalanche: “This is NOT normal. But it’s the only way lenders can finance cars and dealers can put cars on the road. And the implications of this will be tons of repossessions,” the CEO wrote.

He concluded: “I’ve been a doubter, but after what I saw this morning, I’m now FULLY convinced that a wave of car repossessions will hit in early/mid 2023. If lenders are willing to backstab each other in order to put more loans on the road, we’re in trouble.”

Here is a snapshot of his entire thread:

This morning I discovered something *extremely* alarming happening in the car market, specifically in auto lending. I’m now convinced that there is a massive wave of car repossessions coming in 2023.

Here’s what I discovered (and what no one knows):

Background:

Over the past 2 years, many people took out exorbitant loans on cars. Car values were inflated (and frankly, still are to some extent). But many people simply had no choice and bought an overpriced a car.

Well…

Car valuations are now plummeting. Some cars have declined in value as much as 30% y/y.  And these same people that took out these big loans are now “underwater”.

Basically, they owe banks more on these cars than they are worth. And the banks are well-aware of this…

But there is no easy solution. You can’t just put the genie back in the bottle. This brings me to what happened this morning:

Every Friday I conduct a team meeting to recap our week.

This morning, one of our General Managers opened up DealerTrack — a portal that dealers use to communicate with auto lenders — and highlighted something very concerning:

9 of our lending partners have started WAIVING “open auto stipulations” for consumers.

Wait, wtf does that even mean?

Let me explain using a simple, hypothetical scenario:

1) Consumer takes out an auto loan in 2020/2021 on an overvalued car

2) 2022 comes around and that overvalued car is now rapidly declining in value

3) With the car declining in value, consumer now owes more on the car than it is worth

4) Consumer no longer wants the car. Maybe they outgrew it. Or maybe it keeps breaking. So consumer wants to trade it in.

5) But dealer can’t trade the car in because the consumer owes WAY too much on it. So dealer asks consumer for lots of money down to cover the difference.

6) But of course, the consumer doesn’t have $1,000s to cover the difference between what they owe on the car and what it’s worth. And here comes the perfect storm…

7) Dealer can’t sell consumer a car, Consumer can’t buy a car, And, you guessed it, lender can’t finance a car! Everybody loses! Oh no. So what happens next?

8) Lender knows that most consumers are stuck in this situation, and does the following:

WAIVES THE OPEN AUTO STIPULATION.

Meaning, the lender lets the consumer buy the car KNOWING that they already have an open auto loan with another bank!

Why the f*ck would they do this?

Surely the lender knows that consumers that take out a 2nd auto loan are MUCH riskier and have a MUCH high risk of default? Right? RIGHT?

Yes, but the lender does it because they know that the consumer will default on the other car !!!!

Dog eat dog style.

Let me be clear: This is NOT normal.

But it’s the only way lenders can finance cars and dealers can put cars on the road.

And the implications of this will be tons of repossessions.

I’ve been a doubter, but after what I saw this morning, I’m now FULLY convinced that a wave of car repossessions will hit in early/mid 2023. If lenders are willing to backstab each other in order to put more loans on the road, we’re in trouble.

This will not end pretty.

What does this mean in simple terms: well, besides the imminent devastation across the auto sector, including a surge in defaults and car repossessions, we are about to witness a historic collapse in car prices. In fact, in a subsequent tweet, the CarDealershipGuy noted the plunge in prices at troubled used-car dealer Carvana which will be the first domino to fall and be forced to liquidate much if not all of its inventory to stay afloat:

These are all retail-ready cars being advertised to other dealers – likely at a big loss.

(h/t RayMF for submission) pic.twitter.com/f8xb2oSnyU

— CarDealershipGuy (@GuyDealership) December 17, 2022

Translation: just as soaring car prices were the leading indicator for red-hot, runaway inflation in 2021 and 2022 (followed by housing, food, goods and finally services) so the plunge in car prices – first used, then new – is the canary in the recessionary coal mine of deflation that will send all prices – cars, houses, and everything else – sharply lower in the coming months.

After spending just five days in a Bahamian jail cell, FTX founder Sam Bankman-Fried is backpedaling on his decision to contest extradition to the United States to face fraud charges, Reuters reports, citing a person familiar with the matter.

According to the report, SBF will appear in court on Monday to formally consent to extradition – which will pave the way for him to appear in US court to face charges that he commingled customer deposits to cover expenses and debts, and to make investments through his crypto hedge fund, Alameda Research LLC.

That said, legal experts tell Reuters that a trial is likely over a year away.

As Fox News reported last week, the Bahamas prison where SBF was reportedly heading – Fox Hill – is “harsh” due to “overcrowding, poor nutrition [and] inadequate sanitation,” along with cells that are “infested with rats, maggots, and insects.”

“He will be in sick bay for orientation purposes and then we will determine where best to place him,” said Bahamian Commissioner of Correctional Services Doan Cleare in a statement to Reuters.

A 2021 U.S. State Department report said prisoners at Fox Hill described “infrequent access to nutritious meals and long delays between daily meals.” 

“Maximum-security cells for men measured approximately six feet by 10 feet and held up to six persons with no mattresses or toilet facilities. Inmates removed human waste by bucket. Prisoners complained of the lack of beds and bedding,” according to the report. “Some inmates developed bedsores from lying on bare ground. Sanitation was a general problem, and cells were infested with rats, maggots, and insects.“

“Overcrowding, poor sanitation, and inadequate access to medical care were problems in the Bahamas Department of Correctional Services men’s maximum-security block,” the report continued. “The facility was designed to accommodate 1,000 prisoners but was chronically overcrowded.”

On Thursday, Bankman-Fried sought bail from the Bahamas Supreme Court following his Dec. 12 arrest. On Tuesday he was remanded to Fox Hill Prison after Chief Magistrate JoyAnn Ferguson rejected his request to remain at home while awaiting a hearing on his extradition to the US.

Authored by Katabella Roberts via The Epoch Times (emphasis ours),

The city of Denver declared a state of emergency on Thursday in order to stave off a local humanitarian crisis amid an influx of illegal aliens from the southern border, mainly from El Paso, Texas.

Mayor Michael Hancock, a Democrat, issued the declaration as several hundred illegal aliens, mostly from Central and South America, have arrived in the state in just the past few days alone.

“Let me be frank: This influx of migrants, the unanticipated nature of their arrival, and our current space and staffing challenges have put an immense strain on city resources to the level where they’re on the verge of reaching a breaking point at this time,” Hancock said at a news conference on Thursday.

“What I don’t want to see is a local humanitarian crisis of unsheltered migrants on our hands because of a lack of resources,” the mayor added.

According to Hancock’s office, more than 900 aliens have arrived in Denver over the past several months, including more than 600 people since Dec. 2.

Another 247 aliens have arrived since Monday alone, while 75 turned up at a local homeless shelter overnight on Thursday evening, according to his office.

Denver ‘On the Verge of Reaching Breaking Point’

Approximately 404 aliens are currently being accommodated in the city’s emergency shelters, including 102 at church and nonprofit shelter sites, the mayor’s office said.

The “anticipated nature” of the arrival of the influx of illegal aliens has placed extreme pressure on the city’s efforts to shelter them, leading to limited space which is being further exacerbated by a lack of staffing, Hancock’s office said during Thursday’s news conference, noting that winter weather was set to make the situation worse.

Hancock added that Denver is currently “at the level where we are on the verge of reaching breaking point at this time.”

“The declaration is another tool in the toolbox to help serve the increasing number of migrants arriving in Denver, particularly as winter weather sets in,” Hancock said.

Under the emergency declaration, Gov. Jared Polis, a Democrat, will be alerted that Denver is enacting a state of emergency.

Denver will then be able to access additional emergency resources to help manage the influx of aliens, and will also be able to continue requesting financial assistance from various funding sources.

Hancock said that, together with community partners, and the help of local churches and nonprofits, the city continues to provide aliens—the majority of which are coming to the city having entered the United States through El Paso, Texas—with emergency shelter.

Hancock Takes Aim at Biden Admin

Denver has already forked out more than $800,000 on the illegal alien sheltering effort, and that number is expected to increase significantly.

A majority of the aliens who have arrived in Denver are from Venezuela, according to Hancock, and are fleeing a political and humanitarian crisis in their home country.

The mayor took aim at the Biden administration for failing to address the “critical situation” or respond adequately, despite being aware of it.

Read more here…

Twitter CEO Elon Musk reinstated a handful of left-wing journalists who had been booted from Twitter days ago for violating the social media platform’s “doxxing” policies.

Shortly after midnight, Musk tweeted, “the people have spoken … accounts who doxxed my location will have their suspension lifted now.”

The people have spoken.

Accounts who doxxed my location will have their suspension lifted now. https://t.co/MFdXbEQFCe

— Elon Musk (@elonmusk) December 17, 2022

Musk decided to lift the suspensions of the lefty journalists who shared his private jet locations earlier in the week after a Twitter poll he conducted on Thursday night showed 58.7% of the 3.7 million users who voted wanted the journalists reinstated “Now.” 

Unsuspend accounts who doxxed my exact location in real-time

— Elon Musk (@elonmusk) December 16, 2022

Some of the accounts that were suspended include Keith Olbermann, Aaron Rupar, Tony Webster, NYT’s Ryan Mac, CNN’s Donie O’Sullivan, WaPo’s Drew Harwell, Mashable’s Matt Binder, The Intercept’s Micah Lee, and VOA’s Steve Herman. 

“Matt Binder is back,” the Mashable journalist tweeted early Saturday.

Matt Binder is back https://t.co/cTZtuShaFm

— Matt Binder (@MattBinder) December 17, 2022

Olbermann’s account remains suspended as of early Saturday morning. 

Musk accused the journalists of sharing private information about his whereabouts. He said in a Twitter Space on Thursday:

“You doxx, you get suspended. End of story. That’s it.” 

All of this stems from an incident on Wednesday where Musk alleged a “crazy stalker” attacked the car one of his children was riding in. 

Musk said, “Any account doxxing real-time location info of anyone will be suspended, as it is a physical safety violation. This includes posting links to sites with real-time location info.”

“Posting locations someone traveled to on a slightly delayed basis isn’t a safety problem, so is ok,” Musk added. 

Musk also said: 

“If anyone posted real-time locations & addresses of NYT reporters, FBI would be investigating, there’d be hearings on Capitol Hill & Biden would give speeches about end of democracy!”

One of the first accounts suspended was @elonjet, a Twitter account operated by a college kid that tracks Musk’s private plane locations (the account is still suspended).

Lefty journalists who had years of running amok on the social media platform where rules didn’t apply to them but only applied to their opposition have finally got a taste of what it’s like to end up in Twitter jail. 

Authored by Jack Phillips via The Epoch Times (emphasis ours),

Former President Donald Trump announced Thursday that he will bar the federal government from using terms such as “misinformation” and “disinformation” to describe domestic speech if he’s reelected.

In a video released by the New York Post, Trump said that if he’s named the winner in 2024, one of his first executive acts will target federal rules around speech. The advertisement-like clip showed Trump making his announcement in front of two American flags.

“Within hours of my inauguration, I will sign an executive order banning any federal department or agency from colluding with any organization, business, or person, to censor, limit, categorize, or impede the lawful speech of American citizens,” Trump said.

“I will then ban federal money from being used to label domestic speech as ‘mis-‘ or ‘dis-information’. And I will begin the process of identifying and firing every federal bureaucrat who has engaged in domestic censorship—directly or indirectly—whether they are the Department of Homeland Security, the Department of Health and Human Services, the FBI, the DOJ, no matter who they are,” he added.

Since last week, several journalists have published installments of the “Twitter Files,” promoted by new Twitter owner Elon Musk, that revealed how Trump’s account was suspended in early 2021 as well as how officials and campaigns communicated with Twitter executives through back channels.

The 45th president also proposed a “Digital Bill of Rights” that “should include a right to digital due process—in other words, government officials should need a court order to take down online content, not send information requests such as the FBI was sending to Twitter.”

“In addition, all users over the age of 18 should have the right to opt-out of content moderation and curation entirely, and receive an unmanipulated stream of information if they so choose,” Trump said.

After taking office in 2021, President Joe Biden has called on news outlets and social media firms to tackle what he said is misinformation around COVID-19 and vaccines.

“I make a special appeal to social media companies and media outlets: Please deal with the misinformation and disinformation that is on your shows,” Biden said earlier this year. “It has to stop. COVID-19 is one of the most formidable enemies America has ever faced. We have got to work together, not against each other.”

Months before that, Biden told reporters that Facebook, Twitter, and other platforms are “killing people” by allowing certain claims about the virus to proliferate.

Activity

A week after the midterm elections, Trump announced at his Mar-a-Lago resort that he would be embarking on a third campaign for president but has kept a relatively low profile since then.

Trump has made few policy statements after his Nov. 15 speech declaring his candidacy and reportedly has not left Florida to campaign or hold rallies. Republicans, meanwhile, underperformed during the 2022 midterms after forecasters predicted a “red wave” in both the House and Senate.

Days after announcing his candidacy, Attorney General Merrick Garland’s appointed a special counsel, Jack Smith, to lead investigations into Trump’s 2020 election challenges and handling of records since he left office. The FBI searched Trump’s home in August, recovering what Department of Justice prosecutors say were classified materials.

Meanwhile, Trump faced controversy for a dinner meeting with rapper Kanye West and political commentator Nick Fuentes. On Truth Social, the former president described West as a “seriously troubled man” in confirming the meeting: “I told him don’t run for office, a total waste of time, can’t win.”

Trump’s Twitter account, which has around 90 million followers now, was recently reinstated by Musk after the Tesla CEO conducted a poll that found a majority of users wanted the former president back on the platform. So far, Trump has not used his once-highly engaged account and has told media outlets that he will stick to using Truth Social instead.

Read more here…

Authored by Mark Tapscott via The Epoch Times (emphasis ours),

Texas Gov. Greg Abbott is asking the state’s attorney general to open an investigation of nongovernmental organizations (NGOs) that are helping illegal immigrants who are crossing the border from Mexico.

“With the end of Title 42 just days away, the number of illegal immigrants crossing the Texas–Mexico border has reached an all-time high,” Abbott, a Republican, told Texas Attorney General Ken Paxton in a letter made public on Dec. 15. “Indeed, this past Sunday, over a 24-hour span, over 2,600 illegal immigrants crossed the border near El Paso and illegally entered Texas. These numbers are likely to increase in the coming weeks.”

Abbott’s reference to Title 42 is to a public health emergency order issued by President Donald Trump to stop the spread of COVID-19 across the southern border that authorized federal agents to return immigrants crossing the border to Mexico to await processing of their cases, including claims of seeking asylum in the United States. A federal court ruled earlier this year that the order will be halted on Dec. 21.

“But as the facts on the ground continue to change, we must remain vigilant in our response to this crisis. There have been recent reports that non-governmental organizations (NGOs) may have assisted with illegal border crossings near El Paso,” Abbott told Paxton.

“We further understand NGOs may be engaged in unlawfully orchestrating other border crossings through activities on both sides of the border, including in sectors other than El Paso. In light of these reports, I am calling on the Texas Attorney General’s Office to initiate an investigation into the role of NGOs in planning and facilitating the illegal transportation of illegal immigrants across our borders.”

Abbott’s letter to Paxton comes a day after the Heritage Foundation Oversight Project made public the results of a massive analysis of more than 30,000 anonymized cell devices used by illegal immigrants after entering the United States and receiving resettlement care and services via NGO facilities.

The Heritage project tracked the devices to nearly every congressional district in the country, according to Mike Howell, director of the conservative foundation’s Oversight Project.

“We now have undeniable proof that NGOs are the Biden administration’s partner in facilitating and perpetuating this historic border crisis. What’s most shameful is that these NGOs are using not just taxpayer dollars to complete the final link in the drug cartels’ human smuggling operation, but also funds donated by Americans across this country who have no idea their charitable giving is being used for this purpose,” Howell said in a statement.

“They are working hand-in-glove with the open-borders advocates in the Biden administration to resettle untold numbers of illegal aliens across this country every month, willingly advancing the left’s goal of reshaping the American electorate and advancing their political objectives.

“These organizations have no business engaging in such behavior. They should be investigated, held accountable, and defunded. And make no mistake, the Oversight Project is just getting started in showing the role these groups are playing in not only continuing this historic border crisis, but in fueling the cartels’ business model and encouraging millions of individuals to subject themselves to misery, suffering, and death along the journey to the border. We are ready and willing to cooperate with Texas law enforcement to pass along information regarding what we find.”

There are dozens of NGOs involved in various ways in assisting immigrants coming into the United States. It isn’t illegal to provide such care and services to legal immigrants, but multiple federal laws may be broken when illegal immigrants are involved.

Among such NGOs, according to the state of California, are Amnesty International USA, Catholic Charities USA, Doctors Without Borders, Human Rights Watch, U.N. High Commissioner for Refugees, and Refugee Council USA.

Read more here…

Following the latest ‘TWITTER FILES‘ drop, which revealed that “Twitter’s contact with the FBI was constant and pervasive, as if it were a subsidiary,” journalist Matt Taibbi commented that “Instead of chasing child sex predators or terrorists, the FBI has agents — lots of them — analyzing and mass-flagging social media posts.”

Instead of chasing child sex predators or terrorists, the FBI has agents — lots of them — analyzing and mass-flagging social media posts. Not as part of any criminal investigation, but as a permanent, end-in-itself surveillance operation. People should not be okay with this.

— Matt Taibbi (@mtaibbi) December 16, 2022

In response, California Democratic Rep. Ted Lieu lashed out – telling Taibbi: “I’m on the House Judiciary Committee that has oversight over the @FBI and you are lying,” adding “The FBI has lots of agents chasing child sex predators and terrorists. Please stop undermining and lying about federal law enforcement.”

To which researcher Tracy Beanz asked FBI whistleblower Steve Friend to chime in.

Oh? Hey @RealStevefriend !! Maybe you wanna hop in here and help him?

— Tracy Beanz (@tracybeanz) December 17, 2022

Friend, a former 12-year veteran of the FBI and a SWAT team member, notably came out in October to claim that the agency went into hyperdrive to track down and investigate January 6th cases to promote the appearance of right-wing domestic terrorism, at the expense of other investigations – such as child trafficking.

Friend was suspended and stripped of his gun and badge in September for refusing to participate in SWAT raids against January 6th subjects accused of misdemeanor offenses, according to the NY Post.

As Taibbi wrote in November of Friend;

He worked a child pornography detail before being transferred to the assignment that would upend his life: investigating J6. The FBI not only took Friend off vital work chasing child predators to pursue questionable investigations of people maybe connected with the Capitol riots (often in some misdemeanor fashion), they used dubious bureaucratic methods he felt put him in an impossible spot.

Essentially, the FBI made Friend a supervisory agent in cases actually being run by the Washington field office, a trick replicated across the country that made domestic terrorism numbers appear to balloon overnight. Instead of one investigation run out of Washington, the Bureau now had hundreds of “terrorism” cases “opening” in every field office in the country. As a way to manipulate statistics, it was ingenious, but Friend could see it was also trouble.

As a member of a dying breed of agent raised to focus on making cases and securing convictions, Friend knew putting him nominally in charge of a case he wasn’t really running was a gift to any good defense attorney, should a J6 case ever get to trial.

“They’re gonna see my name as being the case agent, yet not a single document has my name as doing any work,” Friend says. “Now a defense lawyer can say, ‘Hey, the case agent for this case didn’t perform any work.’ Labeling the case this way would be a big hit to our prosecution.”

And so, in response to Lieu’s tweet, Friend wrote: “Hey @tedlieu, I’ll be happy to explain how I was moved from investigating child exploitation and human trafficking and told to focus on January 6. I was told child pornographers should be considered a “local matter.””

Absolutely @tracybeanz. Hey @tedlieu, I’ll be happy to explain how I was moved from investigating child exploitation and human trafficking and told to focus on January 6. I was told child pornographers should be considered a “local matter.” https://t.co/iE7KJ9fZt7

— @RealStevefriend (@RealStevefriend) December 17, 2022

So far crickets from Lieu, though he’s quite the prolific Tweeter so maybe Friend will get a response.

The FBI, meanwhile, responded to Taibbi’s “The Twitter Files” thread, in which he said that between January 2020 and November 2022, former Twitter Senior Director of Trust & Safety, Yoel Roth, had exchanged over 150 emails with the agency.

“The FBI regularly engages with private sector entities to provide information specific to identified foreign malign influence actors’ subversive, undeclared, covert, or criminal activities,” the FBI said in a statement. “Private sector entities independently make decisions about what, if any, action they take on their platforms and for their customers after the FBI has notified them.”

Authored by Matt Taibbi via TK News,

Toward the end of work on this story a controversy blew up around the Twitter Files. I learned a little on Thursday night, and then apparently missed a whole drama that took place online Friday while I was trying to put the FBI story together.

Once that story was out, I saw just a few critics weigh in before falling asleep. This morning highlights were passed on to me by friends. The gist was expressed by MSNBC’s Mehdi Hasan, who’s taken over the role of Ardent Establishment Moralist from Rachel Maddow, who had a firm grip on it until she spent three years bollocking the Trump-Russia story.

Mehdi’s had a raging cable-on for all things Elon Musk for a while, apparently.

Here’s a tweet from yesterday:

Is this a joke? Taibbi is doing a new Twitter Files thread while continuing to ignore what Musk has done to journalists on this platform for the past 24 hours? Even Weiss has called him out, but Taibbi seems to want to tweet through it. Wow. https://t.co/bkruKarMzP

— Mehdi Hasan (@mehdirhasan) December 16, 2022

 I actually wasn’t silent about it (see last night’s Substack piece), but even if I had been, so what? These Twitter Files stories that are coming out are getting at issues that have nothing to do with Elon Musk, Keith Olbermann, Aaron Rupar, Barney the Dinosaur, or anyone else.

This is a chance for ordinary Americans to see, from the inside, how their tax dollars have been spent building an elaborate, systematized method of censorship and opinion control, with agencies like the DHS and the DOJ/FBI at the helm. These “enforcement” agencies are not fighting or investigating crime (or even, say, terror plots), they’re just collecting domestic intelligence on a grand scale, and seeking to distort the public’s perception of reality through mass moderation, via programs we’ve been told little to nothing about.

Hasan believes that just as we’re getting this state-sponsored mass-censorship program in our sights, I should stop, beat my breast on Twitter about an unrelated topic every other corporate journalist in the world is already wailing about, and make the story about me at exactly the moment we’ve found good reason for people to focus their attention on agencies like the FBI and the DHS.

There’s a divide in media, mostly generational, with conspicuous exceptions. The current reigning breed of press figure — Mehdi is a perfect example — imagines himself or herself to be first and foremost a political animal, someone who’s primary job is to advocate at all times for a point of view.

There’s an extraordinary emphasis on “calling out,” a concept that didn’t exist when I started doing this job. A parallel example to the lunacy of last night would be the parade of people in the past weeks who insisted I had a responsibility — because we both happened to be on the Twitter Files story — to confront Bari Weiss about past actions of hers involving Columbia University and professors accused of bias against Jewish students.

Because I didn’t throw a fit and walk out on a great story when Bari came on the scene, it’s evidence I’ve “aligned myself with the right.” I imagine once word gets out we were also civil and cooperative as we rummaged through the digital pile, this will be another count in the indictments against us both.

This is the same bugbear that afflicted signatories of the “Harper’s Letter,” many of whom found themselves accused of hypocrisy because they co-signed a statement with (circle one) Bari/J.K. Rowling/David Frum/Katie Herzog/Jesse Singal/Others, who were deemed Bad People for reasons X, Y, Z, etc. The idea was, we don’t judge people on the basis of what they say anymore. Instead, by co-signing a statement with others, we are now responsible — indeed, we’ve implicitly endorsed — the collective actions and opinions accrued over the lifetimes of all the people whose signatures are on the same page with ours.

Therefore you must not sign a statement, even if you believe in every word of it. You have to attach conditions: I won’t sign, you’re supposed to say, until the following three objectionable people are removed. You have to “call out” the very people who may have just gulped hard before agreeing to co-sign a petition with you.

The furor over who signed the Harper’s Letter succeeded in its obvious aim, which was to detract from its simple, humane message, which was good enough for Salman Rushdie and Noam Chomsky: “We refuse any false choice between justice and freedom, which cannot exist without each other.”

Instead of debating this proposition, national media turned the Harper’s Letter — quickly rechristened the “now-infamous letter” by the likes of Forbes — into a referendum on the views of people like Bari and J.K. Rowling. Its organizer, Thomas Chatterton Williams, became the subject of appalling attacks, and even after criticizing Donald Trump both in the letter and out of it, was criticized for failing to add enough quantity to his critique, not adding that Trump is a violent demagogue and mendacious racist in addition to something less than a genuine proponent of free speech. The Atlantic even pretended to be aghast that the Harpers signatories could worry about free expression in the pages of a magazine that does not pay its interns.

This was all a show, transparently designed to obscure the point. It’s beyond obvious the same phenomenon is going on with the Twitter Files.

I mentioned a divide in the business. There is another breed of media figure, dwindling in number, which doesn’t care where any interesting information or documentation comes from. Those of us in that group know we’re legally allowed to publish material that’s been stolen, and we’ll take newsworthy revelations from hackers, foreign spies, political zealots of all stripes, and crazy people (especially crazy people: they are some of our best sources). Some of the best journalism has come from interviews with gangsters and convicted murderers. We don’t care: if the stuff is real and newsworthy, we’ll print it.

Subscribers to TK News can read more here…

As usual, the graphics in Friday night’s “Twitter Files” story make the entire thread too large to sneak through Gmail’s size limit. But a readable online version of the thread lives on the TK site. You can find it by clicking here.

Video game industry legend John Carmack, the man who brought us Doom, Quake and Wolfenstein, is done with Facebook’s virtual reality ‘metaverse’ project, which is apparently a complete mess.

The 52-year-old Carmack, who joined Meta from Oculus after its $2 billion acquisition in 2014, said in an internal memo published in part by the NY Times, that he’s “wearied of the fight” and would focus on his own startup – AI firm Keen Technologies, for which he’s raised $20 million.

“It has been a struggle for me,” Carmack wrote in the post. “I have a voice at the highest levels here, so it feels like I should be able to move things, but I’m evidently not persuasive enough.”

When Facebook bought virtual reality company Oculus in 2014, Carmack was one of the most influential voices in the VR world. He decided to stay with the company after CEO Mark Zuckerberg chose to pivot the company’s focus – and name – towards the metaverse.

Yet even though Meta was moving swiftly into an area that Mr. Carmack specialized in, he was sometimes a dissenting voice about how the effort was going. He became known for internal posts that criticized the decision-making and direction set forth by Mr. Zuckerberg and Andrew Bosworth, Meta’s chief technology officer. Mr. Carmack had been working part-time for the company in recent years. -NYT

In an August podcast interview, Carmack said Meta’s $10 billion in losses within the company’s augmented reality and VR division made him “sick to my stomach,” and that the company’s metaverse efforts have been bogged down by concerns over diversity and privacy.

Carmack has also internally criticized features of the company’s Quest VR headsets – saying that the hardware of the Quest 2 headset was “exactly what I wanted to see from the beginning,” but that the software was lacking.

“We built something pretty close to The Right Thing,” he said.

Still, Carmack thinks that Meta has the best shot at pulling off VR.

“V.R. can bring value to most of the people in the world, and no company is better positioned to do it than Meta,” he wrote in his farewell post.

Authored by Katie Spence via The Epoch Times (emphasis ours),

The social media coordination between the Department of Justice (DOJ) and the FBI isn’t limited to Twitter, former Congressman and current CEO of President Trump’s Truth Social, Devin Nunes, alleged in an interview that aired on Newsmakers by NTD and The Epoch Times on Dec. 14.

The Twitter Files, a collection of internal emails and communications made public by Twitter’s new owner, Elon Musk, confirmed what many Conservatives have alleged for years. Namely, Twitter was shadow-banning accounts that didn’t fit a specific ideology and suspending accounts that bucked the chosen political narrative, Nunes claimed.

But, the most concerning revelation in the Twitter Files, according to Nunes, is that the DOJ and the FBI had informants—whether paid or volunteers—that put forward a specific directive to Twitter, and that is likely happening on other social media platforms.

“The coordination that the Department of Justice and the FBI clearly had with Twitter? I don’t think it stops there,” Nunes stated.

“It seems like they were either running informants, or had paid informants, or had volunteers, where they were actively sending information on behalf of the government on who to look into, or who to ban, and that sort of thing.

“The bigger issue is, Twitter is one thing, but what about Facebook? What about Instagram?”

Censorship and Shadow-Banning

According to Nunes, Trump developed Truth Social because, before Musk bought Twitter, Trump recognized that there was absolute control over public discourse in the United States.

Furthermore, that control led to shadow banning and suspending social media accounts, so those accounts couldn’t criticize the controlling regime in the proverbial public square.

And while Nunes further stated that he’d recently discussed the Twitter File drops with Trump—and in general, Trump is glad Musk purchased Twitter—Trump still believes Musk needs to release all of the Twitter Files to the public and not go through cherry-picked journalists.

“What [do] we really need from Elon Musk and Twitter at this point? Just release all the files. Don’t just have selective journalists look at it. Release all the files so everyone can begin to evaluate them. You never know what you’re going to find [with more people looking at the files].”

Nunes said he believes that by releasing all the files, even more will be uncovered by citizen journalists and by Congress. He added he’s not alone in the belief that Musk should release all files and noted that Jack Dorsey, Twitter’s former CEO and founder, also called on Musk to release the Twitter Files to the public.

Legacy Media Silence

The Twitter Files contained explosive revelations. But the legacy media has largely avoided covering the drops. When asked why there was silence, Nunes stated that the legacy media had supported a particular narrative and political party.

Musk revealing damaging information on government censorship has put the media in an interesting predicament where if they cover the files, they also expose their complicity and damaging information to their preferred political group.

“There’s a strange cat-and-mouse game where [Musk] is sitting on what seems to be a treasure trove of really damaging information to not only the fake news media but also to probably many areas within the United States government,” Nunes stated.

Read more here…