During an earnings call earlier this week, the CEO of Restaurant Brands International Inc., the parent company of Burger King, stated that he plans to close between 300 and 400 underperforming stores this year to streamline the fast-food brand. 

“Historically, we’ve closed a couple of hundred units at Burger King US,” CEO Joshua Kobza said in a Q1 earnings call on Tuesday. The expected closures this year appear to be well above average. 

In the first three months, several Burger King franchisees have declared bankruptcy, including Illinois-based Toms King, Michigan-based EYM King, and Utah-based Meridian Restaurants Unlimited.

Kboza said, “Traffic was modestly negative this quarter,” but noted an improvement in year-over-year traffic trends from Q4 into Q1. 

Burger King has shuttered a net total of 124 US locations, a 1.7% reduction, leaving just 7,000 US restaurants at the end of the quarter. More closures are anticipated in the coming months.

The brand’s $400 million “Reclaim the Flame” bet to regain market share and wind down underperforming restaurants might be working — as it delivered comparable sales of 8.7% year-over-year for the quarter.

Additionally, the brand strives to simplify its overly complex menus and operations. Though raising costs on the iconic Whopper could be determinantal to future sales as rival McDonald’s recently found out that higher menu prices led to a pushback from consumers. 

Not everyone can afford a $9 burger… 

McDonald’s diners pushing back against price increases in some markets: CEO

Paying $9 for a dollar meal hamburger the last straw?

— zerohedge (@zerohedge) April 25, 2023

And while Burger King trims stores and becomes leaner, it must realize consumers have been battered with 24 months of negative real wage growth. Any price increases might jeopardize its turnaround plan, as some consumers have now traded down fast food restaurants for “Dollar Tree Dinners.”

Burger King did go ‘woke’… 

So let’s see how this turnaround strategy pans out.

Authored by Pierre Kory via The Brownstone Institute,

What a dystopian nightmare watching “America’s Doctor” try to continue his Covid victory tour…

It is both shocking and unsurprising that he would do this despite leaving a generation of children with lower IQ scores, a US life expectancy which dropped three years in the span of two, hundreds of thousands of deaths from the vaccines amongst working-age Americans (threatening the life insurance industry), millions of vaccine injured, skyrocketing disability rates, an explosion of cancers, and suddenly plummeting birth rates.

So I went after him.

Again.

Maybe he will get the memo this time, particularly in light of the frosty receptions he has received of late from normally kid-gloved, obsequious interviewers. Enjoy.

Dr. Anthony Fauci left government in December, but his media tour is going strong, albeit with a different tone and tenor. The fawning adulation and questions about his exercise regimes and bobbleheads have been replaced by skepticism and outright doubt from outlets who never dared question the all-knowing man once dubbed “America’s doctor” by the New Yorker.

Fauci recently appeared on CNN to complain about, “a personification of me as a person who essentially closed everything down.” He was responding to a lengthy sitdown with the New York Times where he declared, “Show me a school that I shut down and show me a factory that I shut down. Never. I never did. I gave a public-health recommendation that echoed the C.D.C.’s recommendation, and people made a decision based on that.”

For all his faults, Fauci is no fool. One does not spend 54 years ensconced in the federal government without learning how to play politics.

Three years removed from the worst of the COVID pandemic, the longtime director of the National Institute of Allergy and Infectious Diseases knows the policy decisions guided by his medical recommendations are looking worse by the day.

Herein lies his problem. When his ideas were in vogue, Fauci had no problem claiming responsibility. Now that the ugly consequences are coming due, he is eager to wash his hands.

In the face of plummeting math and reading scores between 2020 and 2022, Fauci is especially quick to deny his role in the school shutdowns. Last fall, Fauci raised eyebrows for denying that school lockdowns, “forever irreparably damaged anyone.” 

Yet as late as September 2020, Fauci recommended that schools only open back up once the virus is “under control.” Earlier in the year, he had chastised Florida Governor Ron DeSantis, warning that premature reopening “likely” led to widespread student infection. 

Today, even left-leaning sources concede that, “kids are safe. They always have been.”

Then came the vaccines. From the outset, Fauci’s entire COVID mitigation strategy was based on an experimental vaccine rushed to market under the branding “warp speed.” There had never been an mRNA-approved vaccine before, and now it was being pushed non-stop from the White House podium with the full support of the pharmaceutical industry. 

It was always highly illogical to deploy a static vaccine toward a mutagenic and constantly changing coronavirus. Then came the checks the vaccines couldn’t write. Fauci told us they would stop transmission. He implored us to “follow the science.”

Today, the science is clear: the COVID vaccine does not prevent transmission or contagion of the virus. Yet even now, Fauci continues to lament that “only 68 percent of the country is vaccinated” and says “we do really poorly” compared to the rest of the world.

European countries like Switzerland, normally held up by American academics as worthy of emulation, are advising their citizens against the vaccine. There’s a reason that known vaccine expert Robert Kennedy, Jr. is already earning the support of nearly one in five Democrat voters.

In my private practice, I have treated more than 500 patients suffering injuries from the vaccine, I have seen the unintended — but brutal — harm they’ve often caused up close and personal. Yet to raise any of these issues is to risk one’s livelihood. That is Fauci’s greatest stain on our country.

Fauci fostered an environment where doctors who deviated from the preferred party line were persecuted and even criminalized for offering a different point of view. Silencing free expression and thought is the antithesis of America, and dangerous for science, innovation, and medicine.

Fauci blamed “misinformation and disinformation” for “really hurting so many things, including people’s trust in science,” yet on his watch, laws were passed that empowered government agencies to strip doctors of their medical licenses for questioning the wisdom of vaccines. 

These efforts left a profound lasting impact on medicine and the patient-doctor relationship. Suddenly physicians were forced to choose between offering their best advice or losing their ability to practice medicine.

Anthony Fauci’s legacy is one of narcissism and power. The glorification of his massive ego trumped any scientific or medical data. His policies were giveaways to the pharmaceutical industry, which helped burnish his image and crush dissent. He saw his opportunity for the spotlight and seized it. Now, rather than admit mistakes, Fauci is intent on revising history.  Unfortunately for his legacy, we’re all living with the consequences of his hubris, and they are impossible to overlook.

*  *  *

Reposted from the author’s Substack

In an alleged first which is no doubt making US Congressional hawks very proud, Ukraine says it has intercepted a Russian ballistic missile for the first time using a US-made anti-air defense system. What’s more, and perhaps the more dubious aspect, is that it was a hypersonic missile shot down over Kiev, according to top Ukrainian officials.

Commander of Ukraine’s air force, Mykola Oleshchuk, announced in a Saturday Telegram post that a Russian Kinzhal, or Kh-47, was inbound until being successfully intercepted using American Patriot missiles. The intercept occurred Thursday night in what’s the first time known time Patriot defenses were put into successful use by Ukraine.

Moscow has long touted its hypersonic ballistic missiles as essentially “impossible to intercept” given the projectile can travel at 10 times the speed of sound with a range of up to 2,000 kilometers (or about 1,250 miles).

According to the top Ukrainian commander’s words: 

“Yes, we shot down the ‘unique’ Kinzhal,” Oleshchuk stated. “It happened during the night time attack on May 4 in the skies of the Kyiv region.”

Oleshchuk said the Kh-47 missile was launched by a MiG-31K aircraft from the Russian territory and was shot down with a Patriot missile.

And a separate statement from Air Force spokesman Yurii Ihnat taunted the Russians while boasting of the US Patriot’s proven capabilities: 

“They were saying that the Patriot is an outdated American weapon, and Russian weapons are the best in the world,” Air Force spokesman Yurii Ihnat said on Ukraine’s Channel 24 television. “Well, there is confirmation that it effectively works against even a super hypersonic missile.” Ihnat said.

He said successfully intercepting the Kinzhal is “a slap in the face for Russia.”

It was only late last month that Ukraine confirmed delivery of the first Patriot batteries from the United States, though an unknown quantity, alongside anti-air systems from Germany and the Netherlands.

More self-congratulations from Ukraine’s top brass was issued Saturday follows: 

“I congratulate the Ukrainian people on a historic event,” Lt. Gen. Mykola Oleshchuk, the commander of the Ukrainian air force, said in a statement posted on the Telegram messaging app. “Yes, we have shot down the ‘unparalleled’ ‘Kinzhal.'”

It should be noted that amid the atmosphere of heavy war propaganda and disinformation which is part and parcel of modern conflict, even The New York Times has expressed caution in its headline, “Ukraine Claims It Shot Down Russia’s Most Sophisticated Missile for First Time.”

The Times describes, “The U.S. officials said they were relying on information from the Ukrainian military coming through classified channels, but added they had no reason to doubt its authenticity.”

“Nevertheless, independent analysts were reluctant to confirm the interception until more information was available about the type of missile Russia fired and whether it was hit by a Patriot,” the report notes.

One Moscow-based analyst was quick to dismiss the reports as “fake news”…

Fake News Alert: It’s Extremely Unlikely That Kiev Shot Down A Hypersonic Missile https://t.co/d7LxeyrV0Y

— Andrew Korybko (@AKorybko) May 6, 2023

Meanwhile, Russia’s air war is likely only to heat up further, given also on Saturday the defense ministry said Ukraine sent two ballistic missiles into Crimea. “A ballistic missile launched by Ukraine’s Hrim-2 OTRK was shot down over the Republic of Crimea by the air defense,” a top Crimean official announced.

Sputnik further quoted him as follows: “Russia’s air defense systems on Saturday shot down two ballistic missiles launched by Ukraine’s Grom-2 operational-tactical missile system (OTRK) over Crimea, Oleg Kryuchkov, an adviser to Head of Crimea Sergey Aksyonov, said on Saturday.”

Authored by Matthew Vadum via The Epoch Times (emphasis ours),

A friend of Supreme Court Justice Clarence Thomas is pushing back against a new report that claims a wealthy Republican donor paid for the private school tuition of the justice’s grandnephew.

During the presidency of Donald Trump, Mark Paoletta was general counsel to the Office of Management and Budget and before that, served as chief counsel to then-Vice President Mike Pence. He’s also a friend of Thomas and his wife, Ginni Thomas, whom he has represented as a lawyer.

Paoletta responded on May 4 to a ProPublica article published hours earlier that detailed how billionaire Harlan Crow’s company paid the private school tuition of Thomas’s grandnephew, Mark Martin, whom the justice took custody of when he was 6 years old and was raising like a son. The exact amount paid over four years at two schools was unclear but the article said it could be upwards of $150,000.

Paoletta disputes that estimate, saying Crow only covered the first year of tuition at each school.

In a nearly 600-word statement about Martin and the tuition payments, Paoletta wrote on his Twitter account that the Thomases had, beginning in 1997, “devoted twelve years of their lives to helping a beloved child in desperate need of love, support, and guidance.

“They agreed to take in this young child much as Justice Thomas’s grandparents had done for him and his brother in 1955.

“Justice Thomas and his wife made immeasurable personal and financial sacrifices and poured every ounce of their lives and hearts into giving their great nephew a chance to succeed.”

When the Thomases were trying to find a school where they could send Martin, Crow recommended Randolph-Macon Academy in Front Royal, Virginia, which he had attended. Crow also had funded scholarship programs for disadvantaged students at the school for decades, Paoletta wrote.

Crow paid only for Martin’s first year at Randolph-Macon and when Martin transferred to another school in Georgia, Crow paid for the first year at that school as well, Paoletta wrote.

“The Thomases love their great nephew. It is despicable that the press has dragged him into their effort to smear Justice Thomas. This story is another attempt to manufacture a scandal about Justice Thomas. But let’s be clear about what is supposedly scandalous now: Justice Thomas and his wife devoted twelve years of their lives to taking in and caring for a beloved child—who was not their own—just as Justice Thomas’s grandparents had done for him.

“They made many personal and financial sacrifices to do this. And along the way, their friends joined them in doing everything possible to give this child a future. Harlan Crow’s tuition payments made directly to these schools on behalf of Justice Thomas’s great nephew did not constitute a reportable gift.”

The federal Ethics in Government Act didn’t require that the tuition payments be publicly disclosed “because the definition of a ‘dependent child’ under the Ethics in Government Act (5 U.S.C. 13101 (2)) does not include a ‘great nephew,’” Paoletta wrote.

Read more here…

Following the collapse of First Republic last week, the meltdown of three other banks, and the Federal Reserve’s quarter-point increase, making the tenth straight hike in an aggressive campaign to tame elevated inflation, a professor of finance at the Stanford Graduate School of Business presented a grim warning that the regional banking dominos are falling. 

In a New York Times opinion piece titled “Yes, You Should Be Worried About a Potential Bank Crisis. Here’s Why,” Professor Amit Seru wrote, “the fragility and collapse of several high-profile banks are most likely not an isolated phenomenon.” He said, “A damaging combination of fast-rising interest rates, major changes in work patterns, and the potential of a recession could prompt a credit crunch not seen since the 2008 financial crisis.” 

Just in the past few months, Silicon Valley Bank, Signature Bank and First Republic Bank have failed. Their combined assets surpassed those held by the 25 banks (when adjusted for inflation) that collapsed at the height of the financial crisis. While some experts and policymakers believe that the resolution of First Republic Bank on Monday indicates the turbulence in the industry is coming to an end, I believe this may be premature. On Thursday, shares of PacWest and Western Alliance are falling as investors’ fears spread. Adverse conditions have significantly weakened the ability of many banks to withstand another credit shock — and it’s clear that a big one may already be on its way.

Rapidly rising interest rates create perilous conditions for banks because of a basic principle: The longer the duration of an investment, the more sensitive it is to changes in interest rates. When interest rates rise, the assets that banks hold to generate a return on their investment fall in value. And because the banks’ liabilities — like its deposits, which customers can withdraw at any time — usually are shorter in duration, they fall by less. Thus, increases in interest rates can deplete a bank’s equity and risk leaving it with more liabilities than assets. So it’s no surprise that the US banking system’s market value of assets is around $2 trillion lower than suggested by their book value. When the entire set of approximately 4,800 banks in the United States is examined, the decline in the value of equity is most prominent for midsize and smaller banks, reflecting their heavier bets on long-term assets.

In an interview with The Guardian, Seru was more precise about just how many banks were burning through their capital buffers and were underwater. The estimate is shocking: Almost half of America’s 4,800 banks.

“It’s spooky. Thousands of banks are underwater.

“Let’s not pretend that this is just about Silicon Valley Bank and First Republic. A lot of the US banking system is potentially insolvent.”

Since monetary tightening works in long lags (9-12 months), many of the rate hikes over the last year have yet to filter through the real economy. In the coming quarters, the US banking system will face its toughest challenge yet, as tightening lending standards might spark more breaking. 

In Seru’s NYTimes op-ed piece, he noted, “There’s another looming area of concern that could spark such panic: The commercial real estate sector.” 

Commercial real estate loans, worth $2.7 trillion in the United States, make up around a quarter of an average bank’s assets. Many of these loans are coming due in the next few years, and refinancing them at higher rates naturally increases the risk of default. Rising interest rates also depress the value of commercial properties, especially those with long-term leases and limited rent escalation clauses, which also increases the likelihood of owner default. In the Great Recession, for example, default rates rose to about 9 percent, up from around 1 percent, as interest rates rose.

For Zerohedge readers, the dual crises affecting regional banks and the commercial real estate sector (offices) isn’t a new thesis. We first proposed the coming turmoil on Mar. 21 in a note titled “”Nowhere To Hide In CMBS”: CRE Nuke Goes Off With Small Banks Accounting For 70% Of Commercial Real Estate Loans”. We’ve documented the unfolding crisis spreading from regional banks to the CRE space in numerous pieces (many of which can be found in our premium section). 

Our latest note, featuring BofA strategist Michael Hartnett highlights “every Fed tightening cycle ends in crisis.” 

The apocalyptic warning about a vast number of US banks being insolvent comes as JPMorgan CEO Jamie Dimon’s recently claimed: “The system is very, very sound.” 

Authored by Savannah Hulsey Pointer via The Epoch Times (emphasis ours),

Former CIA Director John Brennan and former Director of National Intelligence James Clapper are scheduled to testify before a Congressional panel this month as House Republicans investigate the effort to discredit negative stories about President Joe Biden’s son right before the 2020 election.

A representative from the Select Subcommittee on the Weaponization of the Federal Government, Chairman Jim Jordan (R-Ohio), confirmed to The Epoch Times that it will conduct a transcribed interview with Brennan on May 11 and Clapper on May 17.

Brennan and Clapper, both longtime government officials, were harsh critics of former President Donald Trump and held their most recent jobs under former President Barack Obama.

The pair were among the 51 ex-intelligence officials who signed the October 2020 letter (pdf) discouraging confidence in the content of Hunter Biden’s laptop.

This letter helped spread the now-proven false idea that the stories about the laptop’s content were just Russian disinformation, an idea that Biden’s 2020 campaign promoted.

Controversy has continued to swirl over the open letter that Clapper, Brennan, and former CIA deputy director Michael Morell signed, along with 48 other former intelligence officials.

The letter made the rounds following the New York Post’s explosive report from October 2020 on a laptop later proven to belong to Hunter Biden, son of then-presidential candidate Joe Biden.

The letter said that the “arrival on the U.S. political scene of emails purportedly belonging to Vice President Biden’s son Hunter, much of it related to his time serving of the Board of the Ukrainian gas company Burisma, has all the classic earmarks of a Russian information operation.”

The also laptop contained photographs of Hunter Biden, including one allegedly depicting him passed out while smoking a crack pipe.

Biden’s presidential campaign at the time cited the letter as evidence that the Hunter Biden laptop story was Russian disinformation. Polling indicates that if voters had known the laptop’s contents, some would have voted differently, which could have altered the outcome of the 2020 presidential election.

Read more here…

Authored by Level39 via Bitcoin Magazine,

Does one of the largest individual shareholders of The New York Times benefit from the publication’s recent hit piece on Bitcoin mining?

The article, “The Real-World Costs Of The Digital Race For Bitcoin,” attacked the role of Bitcoin miners who participate in sanctioned demand-response programs within the Electricity Reliability Council Of Texas (ERCOT), the state’s energy grid. These programs provide ancillary and demand-response services that enable variable renewable power to be profitable and readily available when consumer demand rises. They also allow for grids to remain reliable during extreme weather events, such as Winter Storm Uri in February 2021.

In its haste to attack Bitcoin mining, The New York Times appears to have reversed more than a decade of support for pro-renewable, demand-response programs and has potentially handed the Texas legislature fodder to limit competition on the Texas grid, in favor of policies that promote natural gas peaker plants and pipelines.

Who Is Carlos Slim?

Carlos Slim Helú, a Mexican business magnate who provided the newspaper with a $250 million loan in 2009, currently owns roughly 8% of The New York Times Company’s class A shares. He is the eighth-richest person in the world with a net worth of $96 billion, making him the richest person in Latin America. Slim’s fortune largely derives from telecommunications networks, such as América Móvil — Latin America’s largest mobile phone company that dominates Mexico’s telecommunications industry. The company has kept the nation’s phone rates among the highest in the world and is thought to be a key factor restraining Mexico’s economic development.

Slim has investments in the Texas energy market, through oil and gas companies. His corporate conglomerate, Carso Grupo, owns Carso Energy, which transports and sells Texas natural gas to Mexico’s state-run power companies through pipelines. By attacking Bitcoin mining, The New York Times indirectly helps midstream companies such as Carso Energy, which increase its profits from transporting and selling natural gas to Mexico.

Carlos Slim’s second eldest son, Marco Antonio Slim Domit, manages the financial side of their family’s business empire and is a member of the board of directors of Grupo Carso and an independent director at BlackRock, in addition to being a member of its board of directors. BlackRock is the second-largest investor of the New York Times Company, holding 8.67% of class A shares.

Slim’s Connection To Texas Oil And Gas

The Wahalajara system is a new network of pipelines that transports natural gas from the Permian Basin to population centers in Guadalajara and western-central Mexico. The network originates from the Waha hub in western Texas, a critical supply hub for Permian Basin natural gas producers.

A joint venture between Carso Energy and Energy Transfer Partners operates two critical pipelines to Mexico that originate from the Waha hub — the Waha-Presidio “Trans-Picos” pipeline and Waha-San Elizario “Comanche Trail” pipeline, entering service in 2017. Carso Energy has a 51% stake in the joint venture. Carso Energy has a 100% stake in the Sásabe-Samalayuc pipeline, in Mexico, which is fed from Waha via San Elizario and entered service in 2021. With the help of additional Carso Energy pipelines and other sources of natural gas, the Secretaría de Energía (SENER), Mexico’s ministry of energy, expects to add 30,000 megawatts of combined-cycle, gas-fired power generation capacity to the country’s electric grid over the next decade.

Natural Gas Prices At The Waha Hub

Approximately 70% of Mexico’s natural gas imports are supplied by U.S. pipelines. Therefore, it is common for natural gas contracts in Mexico to be linked to locations in the U.S. where pricing is determined, such as the Waha hub, Henry hub and Houston Ship Channel.

The Waha hub is one of the most important pricing point for natural gas in Mexico, in part because each of the Wahalajara pipelines jointly operated by Carso Energy and Energy Transfer are designed to transport and sell over 1 billion of cubic feet of natural gas per day to Mexico’s state-owned Comisión Federal de Electricidad (CFE) power plants.

The natural gas price index for the Mexican market, known as the IPGN, is calculated with the Waha benchmark price by the Comisión Reguladora de Energía (CRE), a government energy regulatory commission. Carso Energy’s transport income generally benefits from higher prices at the Waha hub. The CRE uses the Waha benchmark to calculate a daily reference price for natural gas used by CFE, which helps determine the price of natural gas sold to the CFE by Carso Energy, including the midstream costs of transportation and other fees associated with importing natural gas. The CFE is one of the largest customers of natural gas in Mexico and by the end of next year, the CFE is expected to generate 65% of Mexico’s power. Selling natural gas to the CFE can become extremely profitable during severe weather events in Texas, due to heavily-inflated spikes in the Waha benchmark price.

Severe weather events aside, the Waha hub has been plagued with takeaway capacity constraints, causing record low prices in the Waha benchmark of natural gas that have consistently fallen below the Henry hub in Erath, Louisiana. The New York Mercantile Exchange (NYMEX) primarily uses the Henry hub price for natural gas futures contracts. Physical supply and demand dynamics at the Waha hub can have effects that influence the Henry hub and NYMEX natural gas futures. The Wahalajara pipelines had been expected to help narrow the steep Waha hub discount to the Henry hub, however, the Waha benchmark still went negative 20 times in the last three years due to other factors that remain an issue.

Negative pricing at the Waha hub can occur when there is an oversupply of natural gas and not enough pipeline capacity to transport the gas. When this happens, producers may be forced to pay buyers to take their natural gas in order to avoid having to entirely shut down production. This can lead to negative pricing, which can present a number of challenges for Waha pipelines.

“Waha is in the Permian basin, and is characterized as a market that is perpetually long supply, and needs to trade at a discount to its marginal demand market. That demand market is almost always outside of the Permian basin. Therefore, basis is determined by the amount of excess gas that needs to be moved to another location. The relative abundance or scarcity of this egress capacity influences Waha basis greatly…

“On a daily basis, wind generation directly competes with natural gas. As new wind (and solar) farms are constructed, renewable energy sources are taking a larger share of total generation. If renewables generation grows faster than load (demand for power), then gas demand generally suffers.”

–“Waha Basis: Forces Affecting Price,” AEGIS Reference 

Bitcoin Mining Competes With Natural Gas Pipelines

Low prices reduce the incentive for producers to sell natural gas in the Waha market, which in turn can lead to lower throughput volumes for the Wahalajara pipelines. Shale oil wells in the Permian Basin have become extremely gassy — producing more associated natural gas as they age and oil production falls. This results in increased exploration for shale oil, which results in more gassy wells and an oversupply of natural gas. As prices stay low, or go negative, it becomes more profitable to waste natural gas by either venting it or flaring it.

Venting methane is harmful for the environment as it is a potent greenhouse gas that traps 80 times more heat than carbon dioxide (CO2) over a 20-year period. Flaring is better than venting, but is only 92% efficient, meaning that 8% of all flared methane still escapes into the atmosphere.

Bitcoin mining is nearly 100% efficient at mitigating methane emissions, so it’s more ecologically sound and profitable to mine Bitcoin with methane from stranded Permian Basin wells than it is to waste it. Bitcoin miners can even be used to reduce fugitive emissions from abandoned oil wells once the wells are no longer productive. Ultimately, this all means there is less incentive to build expensive infrastructure to transport Permian natural gas to the Waha hub where it may sell for practically nothing.

This is a major problem for operators of the Wahalajara pipeline system. Midstream companies such as Carso Energy and Energy Transport grow profits by increasing the volume and value of transported natural gas. The oil and gas industry has concluded that costs have to rise because the current cost structure is unsustainable as losses for natural gas explorers continue to mount.

Bitcoin Mining Competes With Natural Gas Peaker Plants

To make matters more challenging for the oil and gas industry, research indicates that using large, flexible loads, such as Bitcoin mining operations, can have a net decarbonizing effect on grids over the long term. This is believed to happen when loads balance fluctuations in variable renewable generation, which in turn facilitates higher penetrations of renewable resources when those power sources are available.

Brad Jones, the former interim CEO of ERCOT, has publicly affirmed that Bitcoin mining has already played a major role in bringing renewables into the Texas grid, by supporting the financials of solar and wind facilities, and providing a balancing effect between consumers and excess generation that would otherwise be negatively priced or curtailed.

“For many years, ERCOT had been looking for loads of scale that could respond in a demand responsive way that can help us balance our grid… It’s here now. And it’s a great thing for helping us to manage the grid. Helping us to manage our resources. Bitcoin has the nature of really turning down when prices begin to rise, in a way that we can give that power back to other consumers. And at the same time, as we bring more and more renewables into the state, it becomes a driver of more renewables. Because right now if we bring in all the renewables that are signed up to want to come to our state, there will be a significant depression of pricing during the day. By having Bitcoin there to assist, to stabilize those prices throughout the day, it’s going to drive more renewables into our system. And that’s good for Texas.” 

–Brad Jones, former Interim CEO of ERCOT

Moreover, research suggests that demand-response programs are competitors to traditional, flexible-generation plants and, by proxy, the natural gas companies that provide fuel to those plants.

“Widespread adoption of demand response may not be viewed favourably by all participants in the power market. In particular, if the capacity value, or the availability in times of need, of demand response is significant, owners of peaking plants will likely see their capacity factors decrease as demand response takes over some or all of the responsibility for regulation, load following and ramping… This will have a significant impact on the potential for generator owners to recover their investment, possibly leading to the decommissioning of otherwise operational plants. Such a scenario would clearly be greatly opposed by operators of flexible generators, even though it may present an efficient solution for the system as a whole.” 

–“Benefits And Challenges Of Electrical Demand Response: A Critical Review”

If flexible demand response can lead to the decommissioning of flexible generation, there would obviously be fewer potential buyers of natural gas during periods of peak demand. As variable renewables continue to increase market share within ERCOT, Carso Energy and Energy Transfer would have good reason to view demand-response programs that Bitcoin mining operations participate in as competitors to peaker plants that reliably buy and consume natural gas.

Of course, natural gas peaker plants are necessary when solar and wind aren’t available, enabling miners to continue mining during those hours. On the surface, this would appear to make Bitcoin miners and natural gas companies close allies. However, if oil and gas executives concur with Jones and the research above, there would be a motive for oil and gas companies to negatively color the public’s perception of Bitcoin’s participation in ERCOT demand-response programs. Natural gas may be maintaining its market share within ERCOT as renewables grow, but the industry would rather increase its market share and eliminate competition to secure its long-term future.

Oil And Gas Lobbies The Texas Legislature

Warren Buffett also has a motive to view Bitcoin mining’s role in demand response as competition. Buffett owns Berkshire Hathaway Energy, a subsidiary of Berkshire Hathaway, which is currently lobbying the Texas legislature to build 10 new peaker plants totaling 10 gigawatts of generation capacity by November 2023 — paid for by an additional charge on Texans’ power bills. Peaker plants are typically natural gas power plants that only run when there is a high demand for energy. New peaker plants would replace the need for demand-response customers.

It’s no wonder Buffett has described Bitcoin as “rat poison squared.” Despite what Elizabeth Warren says, attacking Bitcoin mining’s role in demand response results in higher electricity bills for Texans, to pay fees for peaker plants.

The Texas Senate recently passed Senate Bill 6, which would funnel at least $10 billion to build those natural gas peaker plants, and possibly up to $18 billion, for them to sit idle until high demand and extreme weather events. In testimony at a committee meeting in March, Berkshire Hathaway was the lone supporter of the bill. Energy analysts and The Wall Street Journal have criticized the plan as being bad for Texas, due to it being costly and undermining competition from solar and wind. Senate Bill 7 adds oversight requirements to ERCOT for peaker plants and provides allowances for plants that will operate at a loss when severe weather isn’t observed. This is a sophisticated way of saying the industry is requiring the state to provide the oil and gas industry with a subsidy, for which the people of Texas will be on the hook.

Meanwhile, the Texas Senate passed Senate Bill 1751 unanimously out of committee and with only one “no” vote from the senate floor, which unfairly prohibits bitcoin miners from competing to receive commonly used tax incentives. Worse, it stymies miners in their efforts to make the Texas electrical grid more resilient in emergency situations by arbitrarily limiting Bitcoin mining’s participation in ancillary and demand-response services to 10%, which the industry likely already exceeds. Another bill, Senate Bill 2015 would establish a goal for 50% of new generating capacity installed in ERCOT by 2024, to come from dispatchable generation, which is primarily natural gas.

It’s well known that the oil and gas industry showers Texas Governor Greg Abbott and other politicians with money. After Winter Storm Uri, Energy Transfer’s CEO donated $1 million to Governor Abbott after the company pocketed billions of dollars from the deadly storm.

Atmos Pipeline-Texas and NuStar Energy are operators of some of the largest pipelines and natural gas storage networks in Texas and aim to increase takeaway capacity from the Permian Basin where the Waha hub is located. In 2022, both Atmos and NuStar donated, in total, $40,500 to the campaigns of Lois Kolkhorst, Donna Campbell, Robert Nichols and Jose Menendez — the four co-sponsors of the anti-Bitcoin-mining Senate Bill 1751. These four state senators received $163,500 from the oil and gas industry as a whole.

If Bitcoin really were to promote the use of fossil fuels over the long run, why are Texas senators — who significantly benefit from the oil and gas industry — introducing legislation that unfairly targets Bitcoin miners?

Bitcoin Mining Relocates To Texas And Balances Its Grid

Prior to China’s ban on Bitcoin mining enacted in June 2021, severe weather events in Texas resulted in windfall profits for natural gas companies. For example, Energy Transfer raked in $2.4 billion during the February 2021 blackout of Winter Storm Uri, by using natural gas as a peaking asset — storing it when the price is low, and selling when demand skyrocketed.

Exporting natural gas to Mexico during a severe weather event in Texas can be even more profitable for the Wahalajara pipeline operators, since the Mexican price might be even higher — especially If ERCOT were more reliant on natural gas peakers. During the 2021 Texas winter blackouts, the price of natural gas in Mexico skyrocketed to 100 times normal prices. Natural gas peaker plants struggled during Uri, as natural gas was freezing in pipes.

After an influx of mining rigs from China relocated to Texas in late 2021, many became sanctioned as large flexible loads (LFLs) within ERCOT. Today, LFLs are providing and profiting from ancillary services that natural gas peaker plants would have previously dominated. And they are doing so at a lower price point that peaker plants struggle to compete with — saving Texans money on their electric bills by getting more for less. In fact, LFLs helped balance the grid and avoid blackouts during the summer heat wave of 2022 and during Winter Storm Elliot, over Christmas of 2022 — freeing up over 3,000 megawatts of spare capacity on the grid. This success was forecasted by ERCOT a few weeks prior to Winter Storm Elliot, in a report that heralded Bitcoin miners as beneficial to balancing the grid during extreme weather events.

The Gray Lady Attacks Bitcoin

In November 2022, five months before his anti-Bitcoin mining article was published, Gabriel Dance — deputy investigations editor at The New York Times — attended the Texas Blockchain Summit, in Austin, as part of his investigative research. A few weeks later, he began emailing participants from the conference, promising to include their nuanced perspectives in his upcoming article.

Dance ultimately proved this was all a ruse. When his article was finally published, it became evident that he chose to omit all of the pro-Bitcoin mining arguments and only included unbecoming quotes from its proponents.

The substance of Dance’s article deserves harsh criticism. It was filled with disinformation and fallacious reporting about the role of demand response that has since been thoroughly debunked by the Bitcoin Policy Institute. Dance’s reporting contradicted the U.S. Department of Energy, which views demand response favorably. It also conflicted with earlier endorsements of demand response from The New York Times, going back at least to 2007.

Here is a selection of previous endorsements from the Times:

“Across the United States, several thousand businesses and residential customers are ceding control of their electrical systems during moments of unusually high demand. And they are getting paid to do it. The system, based on a concept called ‘demand response,’ is one of the latest ways that Internet technology is being applied to manage over-stretched U.S. power supplies better.”

–“Demand Response Technology Shaves Peak Energy Consumption By Remote Control,” The New York Times, November 7, 2007

In 2009, The New York Times reported that demand response had been endorsed by the Obama administration’s Federal Energy Regulatory Commission chairman, Jon Wellinghoff.

“The Obama administration, Congress and the new Federal Energy Regulatory Commission chairman, Jon Wellinghoff, have all focused on reducing peak demand. Mr. Wellinghoff has called demand response the ‘killer application’ of the smart grid.”

–“Dimming The Lights To Meet Demand,” The New York Times, April 17, 2009

In 2010, in its “Energy And Environment” section of the paper, the Times continued to extol the benefits of demand response to its readers.

“This concept, called demand response, has gained traction in utility circles. In essence, it involves paying users to make small sacrifices when there is an urgent need for extra power (the ‘peak’). The utility can then rely on cutting some demand on its system at crucial times and, in theory, avoid the cost of building a new plant just to meet those peak needs… For farmers, however, this process isn’t easy. Workers must be dispatched to turn the pumps on and off, and there is a risk of crop damage.”

–“Why Is A Utility Paying Customers?,” The New York Times, January 23, 2010

Again, later in 2010, the Times reiterated the Obama administration’s positive view of demand response.

“…[Wellinghoff] sees consumers as active parts of the grid … stabilizing the grid by adjusting demand through intelligent appliances or behavior modification, known as demand response; and storing energy for various grid tasks. He thinks consumers should get paid to provide these services.” 

–“Making The Consumer An Active Participant In The Grid,” The New York Times, November 29, 2010

The newspaper even quoted environmentalists who wanted Texas to adopt more demand response.

“Environmentalists argue that the strains on the grid should spur Texas to work on energy-saving strategies. In particular, they are pushing a program called demand response, in which businesses and consumers are paid to reduce power at times of high demand, like late summer afternoons. Colin Meehan, a clean energy analyst with the Environmental Defense Fund in Texas, said in an e-mail that Texas had ‘so far only taken very small steps’ on demand response.” 

–“Electric Grid In Texas Faces Multiple Challenges,” The New York Times, December 22, 2011

The Times continued to praise demand response throughout the Obama administration, almost as if it was doing the administration’s job to promote the technology.

“But balancing the grid involves more than just increasing capacity. Perhaps the state’s most promising conservation tool is ‘demand response,’ … The programs, which are voluntary in Texas, can take many forms… Demand response ‘probably deserves more focus and attention,’ said Doyle Beneby, the president of C.P.S. Energy, a municipally owned utility that has not taken a position in the capacity market debate. ‘In Texas, it could be a big part of the solution.’” 

–“With Strain On Electric Grid, A Push To Prioritize Conservation,” The New York Times, January 23, 2014

And yet, Dance’s hit piece against Bitcoin mining single-handedly reversed the Times’ position on demand response. Dance wrote the following passage, which makes demand response sound like an evil scheme for flexible customers to defraud retail customers:

“Their massive energy consumption combined with their ability to shut off almost instantly allows some companies to save money and make money by deftly pulling the levers of U.S. power markets. They can avoid fees charged during peak demand, resell their electricity at a premium when prices spike and even be paid for offering to turn off. Other major energy users, like factories and hospitals, cannot reduce their power use as routinely or dramatically without severe consequences.” 

–“The Real-World Costs Of The Digital Race For Bitcoin,” The New York Times, April 9, 2023

It all begs a long list of questions: Why did The New York Times spend months researching an article that distracts readers from serious environmental issues, only to focus on a technology that is only responsible for an infinitesimal 0.14% of global emissions? Why did it ignore a December 2022 ERCOT study that showed large flexible loads, such as Bitcoin mining operations, were beneficial to the Texas grid? Why did The New York Times ignore the fact that Bitcoin mining played a significant role in avoiding blackouts during Winter Storm Elliot, over Christmas and during the 2022 summer heat wave? Why did it ignore that Bitcoin mining reliably provides a price floor for overbuilding renewable generation on the ERCOT grid? Why single out a sanctioned demand-response customer that was, according to ERCOT’s former interim CEO, largely responsible for bringing in large-scale, variable renewable projects into Texas? Why did The New York Times reverse more than a decade of support for pro-renewable demand response programs that were championed by the U.S. Department of Energy and Obama’s Federal Energy Regulatory Commission chairman? Why, after months of research, did The New York Times publish its anti-Bitcoin mining story precisely when the Texas legislature was voting on bills that attack Bitcoin mining demand-response programs and replace them with natural gas peaker plants? Why did the Times’ editors use allegedly-manipulated footage that made it appear as if there was smog in Rockdale, Texas?

Very little about the hit piece makes any sense. Is it a coincidence that The New York Times attacked Texas Bitcoin mining at just the right time that it could benefit one of its largest shareholders?

“The point is, Slim doesn’t have to interfere at all. I know from experience that publishers do intervene in the editorial process, as is their prerogative. And I can assure you that Slim’s investment will be a factor, even if unspoken, in editorial decision-making henceforth at the Times. Perhaps Mexico’s crony capitalism will remain a mostly neglected topic — but now conspiracies will be read into the neglect.” 

–Andreas Martinez, former columnist for The New York Times

We may never know if Slim influenced the editorial process in the newspaper’s latest hit piece attacking Bitcoin mining. However, it would fit an ongoing pattern of The New York Times protecting Slim’s business interests in addition to patterns of alleged, calculated, systemic bias and distortions. Whether these are all coincidences, or something more, may be up for debate. However, editors of the Times seem more than willing to sacrifice the newspaper’s remaining shreds of journalistic integrity for whatever motivates them to run such hit pieces.

More and more readers, on the other hand, are beginning to distrust mainstream media and it doesn’t help when the largest shareholders of media companies are positioned to reap profits from the reporting. There is little recourse in such matters, however, bringing attention to potential conflicts of interest may at least provide some context to otherwise inexplicable editorial decisions.

Thanks to Justin Orkney for assistance with this article.

This is a guest post by Level39. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.

Billionaire tech investor Peter Thiel told independent journalist Bari Weiss on her podcast, “Honestly with Bari Weiss,” that when death comes knocking on his door, he has opted to be cryogenically frozen, even though he isn’t entirely sure if the technology will revive him at a future date. 

Weiss asked Thiel: 

“Is it true that you’re signed up to be cryonically preserved when you die so that you might be brought back to life in the future?”

The billionaire, who ranks 271 on the Bloomberg Billionaires Index, with a net worth of $8.1 billion, responded: 

“Yes… But I think of it more as an ideological statement.”

“I don’t necessarily expect it to work, but I think it’s the sort of thing we’re supposed to try to do,” Thiel continued.

Weiss then asked Thiel if he made plans for his loved ones to be frozen too. That’s when he stated he was “not convinced” the technology works as intended (yet). 

“It’s more, I think we need to be trying things. It’s not there yet,” he said 

Thiel’s interest in anti-aging technologies is part of a race among other billionaires fascinated with living forever. He told The Telegraph in a 2014 interview that he is signed up to be frozen by biotech firm Alcor. 

“In telling you that I’ve signed up for it [cryogenics], there’s always this reaction that it’s really crazy, it’s disturbing. But my take on it is it’s only disturbing because it challenges our complacency.”

In 2006, Theil pledged $3.5 million in funding for Alcor to complete scientific research into the alleviation and eventual reversal of the debilities caused by aging. 

Thiel has expressed his concern that the human race is distracted by conflicts and cultural matters while it should focus on other issues like curing cancer

“I keep thinking that I’m not doing enough on biotech and radical life extension or even just trying to invest in curing a lot of these very big chronic diseases that we have,” he told Weiss.

Thiel joins a list of billionaires who also want to be cryogenically preserved. Some have already had their bodies frozen at temperatures of -321°F in the hope of being revived centuries later when medical science has advanced enough to treat the cause of their death. 

Submitted by QTR’s Fringe Finance

The regional bank crisis is continuing on, or ahead, of schedule. Not wanting to live in an echo chamber – but also mindful of the fact that I’m in the minority with how I think about the economy – I wanted to have a long-form discussion with two of my friends, Andy Schectman and Larry Lepard, to discuss the state of the U.S.

We talked about the blowoff valve for the economy – something I wrote about days ago – as gold and precious metals.

“When we take out 2100 with authority, it’s game on,” Larry says. “That’ll be a clear historical breakout. When that occurs, we’re going to squirt up to 2500 or 3000 very quickly.”

“Where else do you go beside gold and silver? Yes I own a precious metals company, but I try to be objective. Where do you go in the system where rising rates inversely affect stocks and bonds?” Schectman asks.

“The blowoff valve is the value of the currency and the easiest measure of that is gold,” Lepard adds.

We also discussed the regional banking crisis. “How is it that anyone isn’t freaking out that the Fed is basically bailing out the FDIC? The FDIC is, in essence, insolvent,” Andy Schectman asked me. “They’re going to blow up the regional banks.”

“Everyone is leaving the regional banks because Janet told us they won’t be safe”

We also discussed the state of the Fed and the global economy.

“The Fed is really playing with fire with this tight monetary policy. They are solving the problem in the short term but compounding the problem in the long term. They’re going to be forced into yield curve control,” Larry adds. “The next QE will take the Fed’s balance sheet from $9 trillion to $25 trillion.”

“Hyperinflation occurs when everybody becomes convinced that there is no way out other than printing the currency,” he adds. “I think it’s kind of inevitable. Everyone can read the signals and the signals are going to be there.”

We talked about how the BRICS nations are trying to move away from the U.S. dollar. “When you look at countries that have expressed interest in joining BRICS, they all have substantial gold holdings,” Andy told me about the global economy. “The numbers are increasing among those who want to join, there’s over 60 countries they have lined up in a queue [to join BRICS].”

“I do believe it’ll be a Sunday night. OPEC, the BRICS nations, Saudi Arabia – they come out and say on a Sunday night, we’re taking other currency for oil – and everything blows up Monday morning. It’s a tsunami of dollars,” Andy concluded. “The pieces are being put into place right now. Nobody is going to have time to react.”

“Why the hell would Central Banks be buying more gold now than ever? They’re frontrunning. They don’t care about the technicals, they’re using the Western suppression of gold prices to de-dollarize. What does that look like when the world completely sheds dollars because they no longer need them to buy oil?”

We also discussed:

• the end of the U.S. dollar’s dominance

• the geopolitical divide taking place

• gold & silver markets and manipulation

• politics into 2024

• banking collapses & equity markets

• the future of bitcoin & crypto

You can listen to my full interview with Larry and Andy on Spotify here, Apple Podcasts here, and streaming on YouTube here:

Larry manages the EMA GARP Fund, a Boston based investment management firm. Their strategy is focused on providing “Monetary Debasement Insurance”. He has 38 years experience and an MBA from Harvard Business School. And he likes to curse. On Twitter he is @LawrenceLepard

Andy is the President & Owner of Miles Franklin Precious Metal Investments. Prior to starting Miles Franklin, Ltd. in 1989, Andrew became a Licensed Financial Planner, specializing in Swiss Franc Investments and alternative investments. At Miles Franklin Ltd., a company that has eclipsed $5 billion in sales, Andrew has developed an operation that maintains trust, collaboration, and ethical behavior, superior customer service and satisfaction to better serve their clients. He is responsible for overseeing the firm’s operations and business functions; including strategy and planning, account management, finance, and new business. He is andy@milesfranklin.com on email. 

QTR’s Disclaimer: I am not a guru or an expert. I am an idiot writing a blog and often get things wrong and lose money. I may own or transact in any names mentioned in this piece at any time without warning and generally trade like a degenerate psychopath. This is not a recommendation to buy or sell any stocks or securities or any asset class – just my opinions of me and my guests. I often lose money on positions I trade/invest in and I’m sure have lost more than I’ve made in my time in markets. I may add any name mentioned in this article and sell any name mentioned in this piece at any time, without further warning. Positions can change immediately as soon as I publish this, with or without notice. You are on your own. Do not make decisions based on my blog. I exist on the fringe. The publisher does not guarantee the accuracy or completeness of the information provided in this page. These are not the opinions of any of my employers, partners, or associates. I did my best to be honest about my disclosures but can’t guarantee I am right; I write these posts after a couple beers sometimes. Also, I just straight up get shit wrong a lot. I mention it three times because it’s that important.