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In-House Designer For Balenciaga, Adidas Comes Under Fire Over Disturbing Social Media Posts

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In-House Designer For Balenciaga, Adidas Comes Under Fire Over Disturbing Social Media Posts

While fashion company Balenciaga has filed a $25 million lawsuit against the producers of an ad which featured pedophilic images that included BDSM teddy bears and other disturbing imagery, internet sleuths have homed in one of the company’s in-house stylists, Lotta Volkova, who has a disturbing social media history which was recently made private.

Born in 1984, the Russian-born Volkova – who also designs for Adidas, was described by Vogue as a “super stylist.” But she’s also super into disturbing images of satanism, children in distress, and teddy bears in bondage, based on her now-private Instagram feed, as noted by The Namal, citing a lengthy Twitter thread by internet sleuth @curioslight.

To dive into the rabbit hole, click on the tweet below.

Following outrage over the Balenciaga ad, Kim Kardashian issued a statement condemning the “disturbing images” – which notably came out after @curiouslight’s thread. Did she see it and decide to reevaluate her relationship with the company?

Meanwhile, people are still dissecting the original Balenciaga ad…

Tyler Durden
Mon, 11/28/2022 – 16:40

Greenwald: The Media’s Deranged Hysteria Over Elon Musk’s Promised Restoration Of Free Speech

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Greenwald: The Media’s Deranged Hysteria Over Elon Musk’s Promised Restoration Of Free Speech

Authored by Glenn Greenwald via Substack,

It was easy to predict that there would be an all-out war from Western power centers if Musk sought to mildly reduce censorship on Twitter. Still, the media outdid itself…

It is hard to overstate how manic, primal and unhinged is the reaction of corporate media employees to the mere prospect that new Twitter owner Elon Musk may restore a modicum of greater free speech to that platform. It was easy to predict — back when Musk was merely toying with the idea of buying Twitter and loosening some of its censorship restrictions — that there would be an all-out attack from Western power centers if he tried. Online censorship has become one of the most potent propaganda weapons they possess, and there is no way they will allow anyone to dilute it even mildly without attempting to destroy them. Even with that expectation in place of what was to come, the liberal sector of the corporate media (by far the most dominant media sector) really outdid itself when it came to group-think panic, rhetorical excess, and reckless and shrill accusations.

In unison, these media outlets decreed that not only would greater free speech on Twitter usher in the usual parade of horribles they trot out when demanding censorship — disinformation, hate speech, attacks on the “marginalized,” etc. etc. — but this time they severely escalated their rhetorical hysteria by claiming that Musk would literally cause mass murder by permitting a broader range of political opinion to be aired. The Washington Post‘s Taylor Lorenz even warned of supernatural demons that would be unleashed by these new free speech policies, as she talked to a handful of obviously neurotic pro-censorship “experts” and then wrote about these thinly disguised therapy sessions with those neurotics under this headline: “‘Opening the gates of hell’: Musk says he will revive banned accounts.”

But the self-evident absurdity of this laughable meltdown and the ease of mocking it should not obscure that there are lurking within these episodes some genuinely insidious and serious dangers. These preposterous media employees are just the sideshow. But what they are doing, unwittingly or otherwise, is laying the groundwork for far less frivolous and more serious people to use the attacks on Musk to further fortify the regime of censorship they have been constructing: the limitlessly demonizing language heaped on him, the success they have already had in driving away many if not most corporate advertisers from Twitter, the threats to once again abuse the monopoly power of Google and Apple to destroy Twitter or at least cripple it if Musk does not comply with their censorship orders (as they succeeded in doing last year to the free speech site Parler when it became the most-downloaded app in the country and refused to censor on demand).

To examine the media tactics being invoked, and to highlight the underlying conflicts among power centers at stake in this battle, we devoted our monologue to this topic as part of Friday night’s episode of the pre-launch test-runs we are airing of our new live SYSTEM UPDATE program, soon to debut nightly on Rumble. As we explained last week, these test-run episodes are designed to air for now solely on the Locals platform, and are available for now exclusively to our Substack and Locals subscribers, in order to elicit feedback and help us perfect the show as we prepare for our debut on Rumble. The audience feedback we received after our first episode and the first interactive after-show we did was genuinely helpful, and we spent the week incorporating many of our audience’s suggestions in order to elevate the quality of our program as we head toward our launch.

But given the timeliness of our latest monologue to these still-unfolding events, as well as the fact that we were able to keep the test-run glitches to a minimum, we have posted this new full thirty-minute monologue on Rumble, for anyone to watch here. Reflecting the success we believe we can achieve in reaching a large new audience with our program, the number of viewers we attracted to that test-run show before the first full day has already exceeded 100,000: on a Saturday, over Thanksgiving weekend.

As we always have done and will continue to do with all video broadcasts and video reporting we do, we have created and are posting a full transcript of the monologue for subscribers only, available below, for those who prefer to read rather than watch (though we do believe that the video component of the show allows us to use another dimension in conveying our reporting, one of the main reasons we committed to produce this new live program on Rumble). But for those who prefer to read, the transcript of our Musk analysis is below; those wishing to watch our new SYSTEM UPDATE monologue can do so by clicking this link and then watch the video on Rumble.

Subscribers can read more here…

Tyler Durden
Mon, 11/28/2022 – 16:20

Twitter Suffers From “Ridiculous” Number Of “Psy Ops”, Elon Musk Says

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Twitter Suffers From “Ridiculous” Number Of “Psy Ops”, Elon Musk Says

Authored by Tom Ozimek via The Epoch Times,

Twitter owner Elon Musk said Monday that the platform suffers from a “ridiculous” number of professional psychological operations (or, “psy ops”), a concept that typically refers to the dissemination of propaganda or, when used by state actors like the military, psychological warfare tactics meant to manipulate one’s enemies.

“The amount of pro psy ops on Twitter is ridiculous!” Musk wrote in a post on Twitter.

He added jokingly that “at least with new Verified, they will pay $8 for the privilege—haha.”

Musk later qualified his statement, responding to a Twitter user’s comment that the psychological operations are “mid”-level rather than professional. Musk conceded that “it’s mostly basic.”

While it’s not clear what, specifically, Musk was referring to in his post on the prevalence of “pro psy ops,” Twitter has, in the past, struggled to deal with foreign state-linked information operations on the platform, including activity it has deemed malicious.

‘Foreign Interference in Political Conversations’

In 2018, Twitter stated in a blog post that it had identified thousands of accounts that made more than 10 million tweets associated with “foreign interference in political conversations” on the platform.

“It is clear that information operations and coordinated inauthentic behavior will not cease. These types of tactics have been around for far longer than Twitter has existed—they will adapt and change as the geopolitical terrain evolves worldwide and as new technologies emerge,” the company said at the time.

Later, in December 2021, Twitter announced it had removed more than 3,000 accounts that were operating as foreign state-linked information operations, including from China, Russia, and Venezuela.

Twitter said that, in most cases, the accounts were suspended for various violations of its platform manipulation and spam policies, which include prohibitions against using Twitter in ways that “artificially amplify or suppress information or engage in behavior that manipulates or disrupts people’s experience” on the platform.

Prohibited actions include artificially inflating followers or engagement by, for instance, buying “likes” or coordinating to exchange “follows,” in what’s known as “reciprocal inflation.”

‘Widely Diverse Viewpoints’

The company also said it would launch the Twitter Moderation Research Consortium (TMRC), a program that lets outside researchers tap into Twitter data to study trends and study platform governance issues.

While there have been questions about the fate of the research consortium since Musk took over Twitter in late October, he later announced he was ordering the establishment of a “content moderation council” that would represent “widely diverse viewpoints.”

Musk, who has labeled himself as a “free-speech absolutist,” has vowed to make the platform more welcoming to various viewpoints while insisting he wouldn’t allow it to become a “free-for-all hellscape.”

At the time, former President Donald Trump praised Musk for succeeding with his takeover bid of Twitter and praised the tech mogul’s moves to open Twitter up to diverse views.

“I am very happy that Twitter is now in sane hands, and will no longer be run by Radical Left Lunatics and Maniacs that truly hate our country,” Trump said in post on Truth Social, though he indicated that he might not return to Twitter even if Musk were to reinstate his account, which at the time was suspended.

Musk has since restored Trump’s account on Twitter, along with a series of other banned accounts, including that of satirical site Babylon Bee and Jordan Peterson, a controversial professor of psychology.

Trump hasn’t posted anything on Twitter since his account was reinstated, with his last post being from Jan. 8, 2021, when the former president said he wouldn’t be going to the presidential inauguration of Joe Biden.

Musk said recently he’s “fine” with Trump not posting on Twitter, adding that the social media giant had made a “grave mistake” when it banned the former president from the platform.

“Deplatforming a sitting president undermined public trust in Twitter for half of America,” Musk said.

Since Musk took over Twitter, he has vowed to reduce the number of bots on the platform and curb inauthentic activity.

Twitter paused its recently announced $8 verified blue check subscription service after a wave of blue check accounts appeared on the platform, impersonating big brands and making embarrassing posts.

Musk said recently that the verified check service would be returning on Dec. 2, adding that Twitter would also be rolling out gold and gray checks in addition to blue ones, and that all verified marks would be manually authenticated.

Tyler Durden
Mon, 11/28/2022 – 15:45

WHO Renames Monkeypox… Because Racism

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WHO Renames Monkeypox… Because Racism

Three months ago, the World Health Organization – in all its ‘expertise’ – decided to prioritize resources in seeking the public’s help in renaming Monkeypox, as “part of an ongoing effort to discourage harmful misconceptions associated with the current name.” The renaming effort followed “demands from international scientists” and “public health officials” who have claimed that the current name encourages a harmful stigma.

And today, its official, WHO has renamed Monkeypox to (drum roll please)… mpox.

Both the monkeypox and mpox names will be used by WHO over the next year as the term “monkeypox” is gradually phased out, WHO said in a press release.

“When the outbreak of monkeypox expanded earlier this year, racist and stigmatizing language online, in other settings and in some communities was observed and reported to WHO,” the press release stated.

As the WHO explains:

Human monkeypox was given its name in 1970 (after the virus that causes the disease was discovered in captive monkeys in 1958), before the publication of WHO best practices in naming diseases, published in 2015. According to these best practices, new disease names should be given with the aim to minimize unnecessary negative impact of names on trade, travel, tourism or animal welfare, and avoid causing offence to any cultural, social, national, regional, professional or ethnic groups.

Last month WHO Director-General Tedros Adhanom Ghebreyesus said monkeypox had seen “a promising decline globally. The number of reported cases has dropped for eight straight weeks. This is very encouraging.”

Mpox? We assume ‘poo flu’, ‘hump bumps’, or ‘pride pustules’ weren’t acceptable?

Tyler Durden
Mon, 11/28/2022 – 15:25

Ron Paul Urges Separation Of Tech & State

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Ron Paul Urges Separation Of Tech & State

Authored by Ron Paul via The Ron Paul Institute for Peace & Prosperity,

Senator Ed Markey (D-MA) recently got in touch with his inner mobster and threatened Elon Musk – the new owner of Twitter and the CEO of electric car company Tesla and space ventures company SpaceX. He told Musk, “Fix your companies” or “Congress will.”

As part of this threat, Markey referred to an ongoing National Highway Traffic Safety Administration (NHTSA) investigation into Tesla’s autopilot driving system and Twitter’s 2011 consent decree with the Federal Trade Commission (FTC).

Markey has done more than make threats: He is one of a group of Democratic senators who wrote to the FTC urging an investigation into whether Musk’s actions as the new owner of Twitter violated the consent decree or consumer protection laws. Since FTC Chair Lina Khan wants to investigate as many businesses as possible, it is likely she will respond favorably to the senators’ letter.

President Biden has also endorsed an investigation into the role foreign investors played in financing Musk’s Twitter purchase. Biden may be concerned that Musk is not likely to ban tweets regarding Hunter Biden’s business deals.

Concerns that Musk would allow tweets containing information embarrassing (or worse) to the Biden administration point to the real reason many Democratic politicians and progressive writers and activists are attacking Musk. They support efforts to suppress conservative, libertarian, and other “non-woke” speech on social media. They view the prospect of a major platform refusing to silence those who dissent from the woke mob or the Democratic Party establishment as a threat to their power. Musk further angered the left by committing what, to many Democrats (and Liz Cheney), is the ultimate hate crime — allowing Donald Trump back on Twitter.

The threat against Musk shows the threat to liberty is not just from big tech; it is from the alliance between big tech and big government.

Some conservatives think that increasing government’s power over social media is the correct way to make big tech respect free speech.

However, increasing the US government’s power over social media can just end up putting more power behind government threats like those from Rep. Markey. Expanded government control over how social media companies conduct their business can also further incentivize the companies to work with the federal government to shut down free speech.

Once the government steps in with increased regulation, the risk is that greater government control over what is communicated on social media will follow. The question will just be who is calling the shots on the exercise of that control. Will the result be an increase of the liberal or “woke” pressure on social media companies to silence conservatives, libertarians, opponents of teaching critical race theory and transgenderism in schools, and those who question the safety and effectiveness of covid vaccines? Alternatively, will a new sort of pressure become dominant, maybe pressure to comply with conservative or Republican preferred limits on speech? Either way, liberty loses.

Big tech companies silence their users to curry favor with politicians and bureaucrats, often after “encouragement” from politicians and bureaucrats. Therefore, to end big tech’s censorship, Americans should demand that all government officials — including the president — not violate the First Amendment. We must work to put an end to government officials pressuring or even “encouraging” social media platforms either to silence any American citizen because of his opinions or to downplay or suppress any news story. The way to protect free speech online is to separate tech and state.

Tyler Durden
Mon, 11/28/2022 – 15:09

World’s Largest Active Volcano In Hawaii Erupts For First Time In Decades

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World’s Largest Active Volcano In Hawaii Erupts For First Time In Decades

After nearly four decades of silence, Hawaii’s Mauna Loa, the world’s largest active volcano, erupted Sunday night, prompting authorities to declare an ashfall advisory across the state’s Big Island. 

“The eruption continues at the summit of Mauna Loa. All vents remain restricted to the summit area. However, lava flows in the summit region are visible from Kona. There is currently no indication of any migration of the eruption into a rift zone,” the US. Geological Survey wrote on its website, adding the current volcano alert level is “warning.” 

USGS webcam showed the eruption is currently confined to the summit. 

No mandatory evacuation orders have been given to residents around Mauna Loa, but Hawaii County opened shelters just in case the eruption worsened. 

The last time Mauna Loa erupted was in 1984. USGS wrote:

“Based on past events, the early stages of a Mauna Loa eruption can be very dynamic and the location and advance of lava flows can change rapidly.

“If the eruption remains in Moku’āweoweo, lava flows will most likely be confined within the caldera walls.

“However, if the eruptive vents migrate outside its walls, lava flows may move rapidly downslope.”

Portions of the Big Island could expect upwards of a quarter-inch of ash in some areas. 

Footage of the eruption is being posted on Twitter.

The eruption is large enough that weather satellites have detected it from space.  

We’ve been closely following the developments of Mauna Loa. In late October, the intensifying earthquake swarms underneath the volcano caught our attention, indicating a possible eruption. And the quakes continued this month as we noted, “such unrest could be a precursor to an eruption not seen in decades.” 

Tyler Durden
Mon, 11/28/2022 – 14:45

Pfizer CEO Blasted By UK Pharma Watchdog For “Disgracefully Misleading” Statements On COVID Vaccine

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Pfizer CEO Blasted By UK Pharma Watchdog For “Disgracefully Misleading” Statements On COVID Vaccine

Authored by Thomas Lifson via AmericanThinker.com,

You might think that an official rebuke of Pfizer’s CEO for misleading the public on the benefits of its COVID vaccine would be big news, especially given the fill court press by vaccine absolutists to compel people to receive the shots.

6 months ago, Dr. Bourla appeared with Klaus Schwab at the Wiorld Economic Forum (YouTube screengrab)

But even with a Google search, I have not yet seen any US media coverage of a starling rebuke delivered to Pfizer CEO Dr. Albert Bourla by a panel convened by the UK Prescription Medicines Code of Practice Authority (PMCPA). The criticism followed remarks he made in a December 2021 interview with the BBC. The following account is derived from an article in the Melbourne, Australia Herald-Sun by Frank Chung.

In early December 2021, Dr Bourla used an interview with BBC Breakfast to claim that the virus was “thriving” in schools and “there is no doubt in my mind that the benefits, completely, are in favour of” giving five-year-olds the vaccine.

“This is disturbing, significantly, the educational system, and there are kids that will have severe symptoms,” he said. (snip)

By March 2022, some data were showing the effectiveness of the children’s vaccine plummeted to just 12 per cent within weeks of inoculation.

Dr Bourla said in the BBC interview that the main benefit of immunising children was “the indirect protection of adults”.

“The extent to which we can do that and protect adults by avoiding them being infected by children with the current vaccines is still quite uncertain,” he said.

“So, that’s the balance — we clearly want to protect children as much as possible and we’ve got good evidence now that this vaccine, even at a low dose, produces a really good protective immune response in children and produces many fewer side effects because of the lower dose.

The CEO’s touting of “good evidence” and his promotion of a jab that turned out to have but 12% effectiveness, drew an almost immediate complaint:

Shortly after the interview was published, parent lobby group UsForThem lodged a formal complaint with the Prescription Medicines Code of Practice Authority (PMCPA).

The complaint alleged Dr Bourla’s remarks were “disgracefully misleading” and “extremely promotional in nature”, breaching several clauses of the Association of the British Pharmaceutical Industry’s (ABPI) code of practice, The Telegraph reported. (snip)

There is simply no evidence that healthy schoolchildren in the UK are at significant risk from the SARS COV-2 virus and to imply that they are is disgracefully misleading,” the complaint said.

A code of practice panel convened by the PMCPA found Pfizer had breached the code in a number of different ways, including by misleading the public, making unsubstantiated claims, and by failing to present information in a factual and balanced way, according to The Telegraph.

Pfizer appealed the findings, arguing Dr Bourla’s remarks were based on “up-to-date scientific evidence” and could be substantiated by the “publicly available independent benefit-risk assessments”. 

An appeal board panel met in November, where the breaches relating to misleading the public, making unsubstantiated claims and the lack of balance were upheld.

The more serious findings, including that Pfizer had brought discredit to the industry, had encouraged irrational use of a medicine and had failed to maintain high standards, were overturned.

The full case report will be published in coming weeks.

Pfizer is one of the largest television advertisers in the United States. That’s why I don’t expect this strong rebuke of its CEO to get much publicity here.

Tyler Durden
Mon, 11/28/2022 – 14:24

Deeper Than Expected Black Friday Discounts Stoke Retailer Margin Angst

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Deeper Than Expected Black Friday Discounts Stoke Retailer Margin Angst

Deeper than expected Black Friday discounts have shifted the focus to profit margins, adding insult to injury to a sector that was already headed into year-end as one of the worst-performers in the S&P 500, with companies such as Target and Best Buy having shocked investors by slashing forecasts in recent weeks.

To be sure there was some good news: while the traditional Black Friday scenes of shoppers trampling each other for flatscreen TVs and Playstations were nowhere to be found, online sales set a new record at $9 billion (up from $8.92 billion last year, and $9.03 billion in 2020) due to deeply discounted items ranging from apparel to electronics.

In a nutshell, in-store sales were nothing special, online sales were outstanding, but deep inventory-liquidating discounts – the kind we warned about back in May when discussing the reverse bullwhip effect – aimed at stimulating spending have raised analyst concerns about margins.

As far as in-store traffic goes, Goldman made the following observations in the Northeast, Texas and Utah;

  1. Overall traffic still appeared muted relative to 2019 at most “traditional” Black Friday weekend destinations, but was still higher than 2021.
  2. Consumer electronics, toys, and sporting goods had the most traffic.
  3. Promotions are back, as expected.
  4. Stores looked very well stocked (which again is no surprise, see our preview more than six months ago about the ‘reverse-bullwhip‘ effect leading to an oversupply of inventory which retailers have struggled to pare down). 

Goldman further notes that according to Shopify data released Sunday there was a 19% increase in Black Friday sales vs. 2021, with the best performing categories being apparel & accessories, health & beauty, and home & garden.

The online sales blowout vs. muted in-store traffic comports with what we noted yesterday, as major shopping centers saw light activity despite the discounts.

As the Financial Times notes:

The retail industry expects weaker growth over the course of the peak shopping season, with the National Retail Federation forecasting sales will advance 6-8 per cent during November and December. That would barely keep pace with inflation, which was running at 7.7 per cent in October.

As noted above, online sales set a record on Friday – with retailers such as Urban Outfitters observing that shoppers were putting record amounts of goods in their online shopping carts.The biggest discounts this year were for toys, which averaged 34% off listed prices, while electronics saw discounts peak at 27% according to Friday figures released by Adobe Analytics. Goldman also noted that online promotional activity began earlier in the week, with retailers using various promotional tactics – including targeted discounts and free shipping – to move products.

That said, it now appears that Black Friday discounts were so deep that some analysts have expressed concern over margins. Here is a snapshot of sellside takes from the start to holiday spending:

  • Jeffries‘ Rondal Konik notes that a record number of companies offered higher promotions compared to last year.
  • Morgan Stanley‘s Alex Straton says Black Friday traffic appeared “mixed,” and sees further margin risk if consumers hold out on spending and force retailers to offer deeper discounts.”
  • KeyBancs Noah Zatkin says Black Friday weekend played out largely in-line with his expectations, with traffic ‘solid, but not strong,’ with in-store traffic for apparel and footwear brands softer relative to other categories. While Baird analyst Colin Sebastian said that online sales saw a solid weekend, and that significant discounting stimulated higher spending rates beginning early last week.

Companies to watch include Etsy, Wayfair, EBay, Chewy, Target, Costco and Best Buy, as well as sportswear brands such as Nike, Lululemon and Under Armour.

Now to see what Cyber Monday brings…

Tyler Durden
Mon, 11/28/2022 – 11:40

5 Major Newspapers Send Letter To Biden Demanding US Drop Assange Charges

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5 Major Newspapers Send Letter To Biden Demanding US Drop Assange Charges

Authored by Jake Johnson via Common Dreams (emphasis ours),

The five major media outlets that collaborated with WikiLeaks in 2010 to publish explosive stories based on confidential diplomatic cables from the US State Department sent a letter Monday calling on the Biden administration to drop all charges against Julian Assange, who has been languishing in a high-security London prison for more than three years in connection with his publication of classified documents.

“Twelve years after the publication of ‘Cablegate,’ it is time for the U.S. government to end its prosecution of Julian Assange for publishing secrets,” reads the letter signed by the editors and publishers of The New York TimesThe GuardianLe MondeDer Spiegel, and El País. “Publishing is not a crime.”

Protesters gather outside the Home Office in London, Getty Images

The letter comes as Assange, the founder and publisher of WikiLeaks, is fighting the U.S. government’s attempt to extradite him to face charges of violating the draconian Espionage Act of 1917. If found guilty on all counts, Assange would face a prison sentence of up to 175 years for publishing classified information—a common journalistic practice.

Press freedom organizations have vocally warned that Assange’s prosecution would pose a threat to journalists the world over, a message that the five newspapers echoed in their letter Monday.

“This indictment sets a dangerous precedent, and threatens to undermine America’s First Amendment and the freedom of the press,” the letter reads. “Obtaining and disclosing sensitive information when necessary in the public interest is a core part of the daily work of journalists. If that work is criminalized, our public discourse and our democracies are made significantly weaker.”

The “Cablegate” leak consisted of more than 250,000 confidential U.S. diplomatic cables that offered what the Times characterized as “an unprecedented look at back-room bargaining by embassies around the world.”

Among other revelations, the documents confirmed that the U.S. carried out a 2009 airstrike in Yemen that killed dozens of civilians. Cables released by WikiLeaks showed that then-Yemeni President Ali Abdullah Saleh assured U.S. Central Command Gen. David Petraeus that the Yemeni government would “continue saying the bombs are ours, not yours.”

The media outlets’ letter notes that “the Obama-Biden administration, in office during the WikiLeaks publication in 2010, refrained from indicting Assange, explaining that they would have had to indict journalists from major news outlets too.”

“Their position placed a premium on press freedom, despite its uncomfortable consequences,” the letter continues. “Under Donald Trump, however, the position changed. The [Department of Justice] relied on an old law, the Espionage Act of 1917 (designed to prosecute potential spies during World War One), which has never been used to prosecute a publisher or broadcaster.”

Despite dire warnings from rights groups, the Biden administration has decided to continue pursuing Assange’s extradition and prosecution. In June, the United Kingdom formally approved the U.S. extradition request even after a judge warned extradition would threaten Assange’s life.

Assange’s legal team filed an appeal in August, alleging that the WikiLeaks founder is “being prosecuted and punished for his political opinions.”

Tyler Durden
Mon, 11/28/2022 – 11:22

“Recession Is Coming” As Fed “Is Going Too Crazy” – Dallas Fed Respondents Slam US Economic Outlook

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“Recession Is Coming” As Fed “Is Going Too Crazy” – Dallas Fed Respondents Slam US Economic Outlook

While the headline Dallas Fed Manufacturing survey did not weaken as much as expected, the production index, a key measure of state manufacturing conditions, fell five points to near zero – its weakest level since the COVID lockdowns in 2020…

Under the hood, several other measures of manufacturing activity indicated contraction this month. The new orders index plummeted to -20.9 – its sixth month in a row in negative territory and lowest reading since May 2020. The growth rate of orders index dropped seven points to -19.9. The capacity utilization index turned negative, falling from 9.1 to -3.4, and the shipments index posted a second consecutive negative reading at -7.5, down from -1.6 in October.

Additionally, perceptions of broader business conditions continued to worsen in November. The general business activity index posted a seventh consecutive negative reading but moved up five points to -14.4. The company outlook index pushed down further, from -9.1 to -15.2.

However, it was the comments from respondents that offer the most prescient insight into US economic conditions:

  • Customers are illiquid. Demand is there; there is just no cash to buy food. There is increased tension in terms of demand for skilled workers and retaining them. [Food Manufacturing]

  • Business is slow and slowing. Our outlook for January is hopeful. [Paper Manufacturing]

  • There is less panic buying going on. Inventories are beginning to go down. Lead times we are able to give to our customers are beginning to decrease as input of new orders slows. The slowdown is consistent with normal seasonal factors but way below last year’s very high fourth-quarter order level. We are beginning to see the end of the dislocations caused by the pandemic. [Printing and Related Support Activities]

  • Recession is coming! We are just waiting for the backlog to evaporate. Then layoffs start. [Primary Metal Manufacturing]

  • We are very concerned about the volume of future business activity. We see our customers pulling back their plans for expansion but still planning for the future. This has put us in a position to be very competitive to win every order possible to ensure our cash flow and ability to pay our employees and bills. [Machinery Manufacturing]

  • We are still running strong; however, we believe that it is inevitable that the economy will contract within the next six months. [Machinery Manufacturing]

  • [The Federal Reserve] is going too crazy—that is really affecting the industrial equipment industry and stalling infrastructure spending as I have never seen before. Millions of jobs are at risk in manufacturing. [Computer and Electronic Product Manufacturing]

  • The cost of capital is unbearable for small businesses and will delay or reduce expenditures or hiring unless business drives change. [Computer and Electronic Product Manufacturing]

  • The outlook is troubling and unsettling. Caution is the strategy. The Federal Reserve is too aggressive. Let what’s been done materialize in the economy before piling on. [Transportation Equipment Manufacturing]

Does any of that sound like an economy that is “strong as hell”?

Tyler Durden
Mon, 11/28/2022 – 11:10