The man who allegedly attacked Paul Pelosi is an illegal immigrant, U.S. officials have confirmed.

“U.S. Immigration and Customs Enforcement (ICE) lodged an immigration detainer on Canadian national David DePape with San Francisco County Jail, Nov. 1, following his Oct. 28 arrest,” the Department of Homeland Security (DHS) told The Epoch Times in an email.

DHS is the parent agency of ICE, which is tasked with removing people who are in the United States illegally.

Immigration detainers are placed on suspects who are illegal immigrants. They are meant to prevent state or local officials from releasing the suspects.

If a suspect is due to be released, the detainer means officials hand over the person to federal officials, unless local officials defy the request.

Adam Lipson, DePape’s public defender, indicated after DePape’s arraignment this week that he was representing an illegal immigrant.

“He currently has a federal hold so he can’t be released anyway,” Lipson told reporters when asked about the motion for no bail entered by the San Francisco District Attorney’s Office.

Lipson could not be reached for comment.

“Nobody in America should be victimized by an illegal alien. The illegal alien crime rate here should be exactly 0.0%,” the National Border Patrol Council, the Border Patrol’s union, said in a statement.

Immigration records show DePape entered the United States in March 2008 as a temporary visitor. Canadians are generally admitted without a visa if they are visiting for business or pleasure and can typically stay in the United States for up to six months.

Additionally, according to a lawyer who has been in touch with DePape’s former girlfriend, DePape has embraced left-wing and right-wing conspiracy theories.

As Janice Hisle reports at The Epoch Times, the former girlfriend, Oxane “Gypsy” Taub, is herself in a women’s prison for 20 crimes involving a teen boy.

Taub’s attorney, Christopher Dobbins, told The Epoch Times on Nov. 2 that based on his conversations with Taub the theories about DePape being a right-wing extremist seem to be off base.

Dobbins thinks DePape tends to believe conspiracy theories in general, whether they’re left-wing or right-wing.

“He’s all over the place,” Dobbins said.

Dobbins said he has heard from Taub by phone frequently since news broke that DePape, 42, was arrested in the Oct. 28 breach of the Pelosi mansion in San Francisco. She has expressed a lot of concern for DePape, Dobbins said.

Taub has been trying to raise funds for DePape’s defense, Dobbins said.

Statements from Dobbins and a neighbor shed new light on DePape’s unorthodox lifestyle, his apparent homelessness, and his thought processes.

“Even though he’s probably Public Enemy No. 1 right now,” and DePape and Taub have apparently been estranged for a while, Taub still cares for her ex, Dobbins said.

She thinks he’s deeply troubled and has serious mental issues, Dobbins said. The two have known each other for many years and both were pictured in San Francisco newspapers in 2013 when they were protesting city ordinances banning public nudity.

Taub asked Dobbins to defend DePape; Dobbins said he declined the offer, choosing to steer away from a potential conflict of interest involving his representation of Taub.

Lawyer Contests ‘Fixated’ Claim

DePape is the father of two of Taub’s three children. A daughter, fathered by another man, is grown; two boys, in their late teens or early adulthood, have been living alone at their mother’s property during her legal troubles, Dobbins said.

Now 53, Taub is imprisoned near Los Angeles for offenses involving a teen boy, prosecutors said in a news release when a jury convicted her in August 2021.

Dobbins points out that his client testified in her own defense, and she still asserts that she is innocent. She testified that her actions toward the boy were misinterpreted.

The teen was a schoolmate of one of her sons, and Taub was convinced the boy was being abused, Dobbins said. She believed she was being helpful to him, as she was repeatedly contacting him after being told to stop, Dobbins said. But “she never touched him,” he declared.

Prosecutors, however, said Taub “became fixated on a 14-year-old boy in 2018,” and committed the offenses.

That was how the Alameda County District Attorney’s Office put it in a news release.

Prosecutors issued the release in August 2021 after a jury found Taub guilty of four felonies—attempted child abduction, stalking, and two counts of dissuading a witness—plus 16 misdemeanors: a count of molestation and 15 violations of court orders to stay away from the boy.

“Over the course of 14 months, she sent him numerous obsessive emails, created blogs directed at him, used his friends to send him messages, and eventually tried to abduct him a few blocks from his school in Berkeley,” the release said. “While the case was pending, Taub also tried to dissuade the victim from testifying.”

DePape Lived in School Bus

Dobbins, who was a schoolteacher before he became an attorney 14 years ago, said Taub is one of the most interesting, unusual clients he has ever encountered.

He described her as a free spirit and a well-intentioned idealist who can be misunderstood. “She is a kind of out-there person, kind of pushing the envelope,” he said, acknowledging that her nudist, bohemian lifestyle irritates her neighbors; he said he had visited the area several times.

Ryan La Coste, who resides near the house where Taub lived in the 1500 block of Woolsey St., Berkeley, Calif., told The Epoch Times that he only saw DePape “in passing,” but he believes DePape sometimes lived in a yellow school bus that is parked at the property.

Authorities have said they believe DePape mostly was living in a garage on Shasta Street in Richmond, Calif., for the past two years.

La Coste said DePape sporadically showed up in the Berkeley neighborhood even after Taub was incarcerated. La Coste believes he most recently saw DePape staying in the bus a couple of months ago.

La Coste has lived in the neighborhood for five or six years. Right after he moved in, “the problems started immediately” at Taub’s house, he said.

“Children was setting fires out here. They were dressed in like snorkeling gear and swim trunks, setting fires and smoke was coming into my house,” he said. “So I was like, trying to go tell their mother, not knowing who she was.”

Later that evening, he got a call that was “super-weird,” he said. “They said I threatened to kill her children…and it just got worse and worse from there…it was just kind of like a constant flow of bugging me and disturbing me and trying to pick fights with me.”

That stopped only after Taub was locked up on the charges involving the young boy. She is eligible for parole in January, court records show.

La Coste described DePape and a parade of other “characters” coming and going at Taub’s property, “almost like a hippie collective.”

“They’ve had people camping right here, trying to sell me drugs over the fence,” he said, “And, you know, they’re active nudists; they’re plastered all over the internet.”

Even Taub’s sons have been known to be “just standing there, naked,” La Coste said, even in front of his 13-year-old niece.

Psychedelic Experiences?

La Coste also said he found it strange that Taub was enamored of a psychoactive substance called ibogaine—which she would go to Mexico to obtain and then frequently offered to others, including him.

Ibogaine is found in the African rainforest shrub known as Tabernanthe Iboga. “It is unlicensed but used in the treatment of drug and alcohol addiction,” according to a 2016 report in the National Library of Medicine. “However, reports of ibogaine’s toxicity are cause for concern.”

Asked to respond to La Coste’s statements about ibogaine, Dobbins acknowledged that his client testified about the drug during her trial last year, and acknowledged that she tried to offer it to the young man she was hanging around.

Read more here…

It’s only appropriate that one day after we saw a veritable cornucopia of mass layoff announcements…

Layoffs announced in the last day:

– Lyft 13% of workers
– Opendoor 18%
– Stripe 14%
– Chime 12%
– Twitter 50%
– Morgan Stanley (% unknown)

— Genevieve Roch-Decter, CFA (@GRDecter) November 3, 2022

… and on the same day that Elon Musk will fire half of Twitter employees, that the Bureau of Lies (sic) and Statistics will come up with the most grotesque “seasonal adjustment” yet, and claim that some 200K jobs were created in the US, or at least that’s what the median Wall Street consensus is; the actual reported number will likely be just fractionally below this estimate to make it seem “credible.” Alas, a representation of the actual US economic reality won’t be available until the first Friday of December, with the midterm elections now in the rearview mirror, when the BLS will have no choice but to aggressively start catching down to what the jobs number is, including aggressive prior revisions (which by then nobody will care about), in a month that will be seen as a watershed “kitchen sinking” of data, and which will furiously reprice the Fed’s hiking intentions and terminal rate.

But before we get there, we have tomorrow’s payrolls fairy tale to get through: in his preview of what’s in store, Goldman trader John Flood writes “TYVM to Jay Pow for somewhat derisking the jobs print tomorrow. Street is looking for +200k headline print (GIR +225k, last +263k), AHE MoM .3% (GIR .35%, last .35%), U/ E Rate 3.6% (GIR 3.5%, last 3.5%) and Labor Force Participation rate of 62.3% (GIR 62.3%, last 62.3%). We are still FIRMLY in a bad data is good for stocks and vice versa setup here (and will be for the foreseeable future).”

The Goldman trader also adds that “weaker employment data should lift the S&P more than stronger data will hit it (I would not have said this before yesterday’s developments)”, and provides the following NFP matrix:

• Goldilocks: headline, AHE <.3 u rate>3.6 and Labor Force Participation rate >62.3%. S&P quickly claws back 2+%
• Worst Case: >300k headline, AHE >.3%, U/E
• Base Case: 175k – 225k headline, AHE .3%, U/E 3.6% and LFP 62.3%. S&P rallies 50 – 100bps.

A more detailed look of what to expect courtesy of Newsquawk:

• The rate of payrolls growth is expected to moderate in October, while the jobless rate is expected to rise a little.
• Goldman estimates non-farm payrolls rose by 225k in October (mom sa), above consensus of +195k but a slowdown from the +263k pace in September.
• There will be attention on the wages measures; any downside could give the Fed cover to downshift the pace of rate hikes in December.
• A weak headline could also see calls for the Fed to slow its normalization become louder, as the central bank aggressively tightens policy into restrictive territory to cap inflation, particularly as politicians have an eye on the US midterm elections next week.
• According to Goldman, labor demand remains elevated despite declining this year, and Big Data indicators generally point to above-consensus payroll gains. The bank also believes the exit of the youth summer workforce weighed on job growth in the September report, and the absence of that headwind argues for a pickup in some low-skill services categories. Generally, job growth tends to pick back up in October when the labor market is tight, as firms frontload autumn and pre-holiday hiring.

Estimates:

Consensus expects 200k nonfarm payrolls to be added to the US Economy in October, moderating from the 263k rise seen in September. If the consensus expectation is realized, it would be beneath the three-, six- and 12-month averages (at 372k, 360k, 474k respectively).

The unemployment rate is seen nudging up by one-tenth of a percentage point, taking it to 3.6%; there will be focus on the participation rate to see whether the rise is a function of returning workers (participation previously fell one-tenth to 32.3%, which helped bring the jobless rate down by two-tenths to 3.5%). The Fed’s September economic projections forecast the unemployment rate would rise to 3.8% by the end of this year, before picking up to 4.4% next year, though the updated projections still see the longer-run unemployment rate at 4.0%.

Labor Market Proxies: Claims data for the week that coincides with the BLS’ reference period in its establishment survey saw initial jobless claims were ultimately little changed at 212,250k vs 215,750k in the reference week for the September jobs report. Similarly, continuing claims climbed a little between both of those windows, from 1.381mn to 1.388mln. In its flash purchasing managers data series for October, S&P Global said employment was broadly unchanged in the month, though the seasonally adjusted Employment Index was below the neutral 50.0 level for the first time since June 2020, driven by a fall in service sector staffing numbers, while manufacturers registered a slower pace of job creation. The ISM survey is also consistent with that view of a neutral labour market in October, with its manufacturing employment index rising from 48.7 to the neutral 50.0 level (note: the services ISM has not been released at the time this preview is being published). Meanwhile, ADP’s new gauge of national employment – which analysts continue to remain critical of given that it does not forecast the official data with any deal of success – was strong, seeing 239k payrolls added, topping expectations of 195k.

Wages: Average hourly earnings are seen rising by 0.3% M/M in October, matching the pace from the September report; the annual measure is expected to ease to 4.7% Y/Y from 5.0% – that will be encouraging Fed officials who are lifting rates to combat inflation, particularly since some analysts say that base effects will support the annual measure in October. As a point of reference, the ADP’s data for October said pay growth eased again in October, and the momentum of gains for job changers was ebbing (for these workers, annual pay growth edged down for the third straight month, to 15.2% Y/Y from 15.7% in September); for job stayers, pay gains registered 7.7% in October, in line with recent months. That would be welcome news at Fed HQ, particularly after the recent quarterly Employment Cost Index data, which suggests that pay growth was still accelerating in Q3 by some measures. Meanwhile, average workweek hours are seen unchanged at 34.5hrs.

Arguing for a stronger-than-expected report:

• Tight labor markets. When the labor market is tight, job growth tends to slow in September and pick back up in October, as shown in Exhibit 1. The September tendency in part reflects the loss of the summer youth workforce, which in September 2022 contributed -128k to job growth according to the household survey (mom sa). The absence of this headwind argues for a pickup in some low-skill services categories in tomorrow’s report. Additionally, the tight labor market incentivizes firms to frontload autumn and pre-holiday hiring, given the likely difficulty of finding workers in November and December

• Big Data. High-frequency data on the labor market were mixed in October but generally point to strong job growth, with three of the four measures available this month consistent with above-consensus payrolls (see Exhibit 2).

• Job availability. JOLTS job openings rebounded by 0.4mn to 10.7mn workers in September, swinging from below to above the level implied by alternative data (see Exhibit 3). The labor market has likely continued to rebalance at a steady pace, in Goldman’s view. The Conference Board labor differential—the difference between the percent of respondents saying jobs are plentiful and those  saying jobs are hard to get— decreased substantially relative to September but remains at a high level (-5.6pt to +32.5)

• ADP. Private sector employment in the ADP report increased by 239k in October above expectations for 195k.

Arguing for a weaker-than-expected report:

• Employer surveys. The employment components of business surveys generally decreased in October. Our services employment survey tracker decreased by 0.7pt to 51.5 and our manufacturing survey employment tracker decreased by 0.2pt to 52.7.
• Job cuts. Announced layoffs reported by Challenger, Gray & Christmas increased 7.6% month-over-month in October, following a 30.0% increase in September (SA by GS).

Neutral/mixed factors:

• Jobless claims. Initial jobless claims decreased during the October payroll month, averaging 212k per week vs. 220k in September. Residual seasonality (i.e., goalseeking) and other so-called “non-economic factors” explain much of the variation in initial claims over the last few months, and according to Goldman, “the overarching message from the jobless claims data is that layoff rates remained very low in Q3. Continuing claims in regular state programs increased 92k from survey week to survey week, although they may also be affected by residual seasonality.”

Policy Implications: Recent reports indicate that the Fed may downshift to a slower pace of rate hikes from December onwards. However, for that to happen, officials have previously indicated that they would want to see meaningful progress in bringing inflation down. Accordingly, the wages data could be influential for the December debate (the market is currently shooting for 75bps in November, and then 50bps in December). This week, the latest JOLTs data (for September) showed a rise against expectations it would decline, and while that didn’t do much to change the narrative for the November FOMC meeting, expectations of where the eventual terminal rate will be moved hawkishly (the market now sees above 5.0% in May 2023, vs just above 4.8% a week earlier). On the other side of the coin, if the headline begins to show stress (for instance, if it were to come in towards the bottom, or below the 50-300k forecast range), it could reignite concerns regarding the economic slowdown, at a time when the Fed is tightening policy aggressively, which could lead to more calls for the Fed to slow the rate it is normalising policy, particularly from the political community given the US midterm elections next week. (Note: this preview is being published before the November FOMC meeting).

Authored by Caitlin Johnstone via Medium.com,

So it turns out the US intelligence cartel has been working intimately with online platforms to regulate the “cognitive infrastructure” of the population.

This is according to a new investigative report by The Intercept, based on documents obtained through leaks and an ongoing lawsuit, on the “retooling” of the Department of Homeland Security from an agency focused on counterterrorism to one increasingly focused on fighting “misinformation, disinformation, and malinformation” online.

While the DHS’s hotly controversial “Disinformation Governance Board” was shut down in response to public outcry, the Intercept report reveals what authors Lee Fang and Ken Klippenstein describe as “an expansive effort by the agency to influence tech platforms” in order to “curb speech it considers dangerous”:

According to a draft copy of DHS’s Quadrennial Homeland Security Review, DHS’s capstone report outlining the department’s strategy and priorities in the coming years, the department plans to target “inaccurate information” on a wide range of topics, including “the origins of the COVID-19 pandemic and the efficacy of COVID-19 vaccines, racial justice, U.S. withdrawal from Afghanistan, and the nature of U.S. support to Ukraine.”

Docs show Facebook and Twitter closely collaborating w/ Dept of Homeland Security, FBI to police “disinfo.” Plans to expand censorship on topics like withdrawal from Afghanistan, origins of COVID, info that undermines trust in financial institutions. https://t.co/Zb3zmI1dQF

— Lee Fang (@lhfang) October 31, 2022

The report reveals pervasive efforts on the part of the DHS and its Cybersecurity and Infrastructure Security Agency (CISA), along with the FBI, to push massive online platforms like Facebook, Instagram and Twitter to censor content in order to suppress “threats” as broad as fomenting distrust in the US government and US financial institutions.

“There is also a formalized process for government officials to directly flag content on Facebook or Instagram and request that it be throttled or suppressed through a special Facebook portal that requires a government or law enforcement email to use,” The Intercept reports.

“Emails between DHS officials, Twitter, and the Center for Internet Security outline the process for such takedown requests during the period leading up to November 2020,” says The Intercept. “Meeting notes show that the tech platforms would be called upon to ‘process reports and provide timely responses, to include the removal of reported misinformation from the platform where possible.’”

While these government agencies contend that they are not technically forcing these tech platforms to remove content, The Intercept argues that its investigation shows “CISA’s goal is to make platforms more responsive to their suggestions,” while critics argue that “suggestions” from immensely powerful institutions will never be taken as mere suggestions.

“When the government suggests things, it’s not too hard to pull off the velvet glove, and you get the mail fist,” Michigan State University’s Adam Candeub tells The Intercept. “And I would consider such actions, especially when it’s bureaucratized, as essentially state action and government collusion with the platforms.”

This is absolutely wild. The government is secretly transforming “national security” agencies into a new Narrative Police.

“If a foreign government sent these messages,” said the former ACLU president, “there is no doubt we would call it censorship.”

Read the story: https://t.co/9bMjDKSmcd

— Edward Snowden (@Snowden) October 31, 2022

The current CISA chief is seen justifying this aggressive government thought policing by creepily referring to the means people use to gather information and form thoughts about the world as “our cognitive infrastructure”:

Jen Easterly, Biden’s appointed director of CISA, swiftly made it clear that she would continue to shift resources in the agency to combat the spread of dangerous forms of information on social media. “One could argue we’re in the business of critical infrastructure, and the most critical infrastructure is our cognitive infrastructure, so building that resilience to misinformation and disinformation, I think, is incredibly important,” said Easterly, speaking at a conference in November 2021.

Another CISA official is seen suggesting the agency launder its manipulations through third party nonprofits “to avoid the appearance of government propaganda”:

To accomplish these broad goals, the report said, CISA should invest in external research to evaluate the “efficacy of interventions,” specifically with research looking at how alleged disinformation can be countered and how quickly messages spread. Geoff Hale, the director of the Election Security Initiative at CISA, recommended the use of third-party information-sharing nonprofits as a “clearing house for trust information to avoid the appearance of government propaganda.”

But as a former ACLU president tells The Intercept, if this were happening in any government the US doesn’t like there’d be no qualms about calling it what it is:

“If a foreign authoritarian government sent these messages,” noted Nadine Strossen, the former president of the American Civil Liberties Union, “there is no doubt we would call it censorship.”

Indeed, this report is just another example of the way western powers are behaving more and more like the autocracies they claim to despise, all in the name of preserving the values the west purports to uphold. As The Intercept reminds us, this business of the US government assigning itself the responsibility of regulating America’s “cognitive infrastructure” originated with the “allegation that Russian agents had seeded disinformation on Facebook that tipped the 2016 election toward Donald Trump.” To this day that agenda continues to expand into things like plots to censor speech about the war in Ukraine.

[Thread]

Hundreds of former agents of a notorious Israeli spying organization are now working in key positions at the world’s biggest tech/comms corporations, including Google, Facebook and Microsoft.

My new investigation for @MintPressNews: https://t.co/blv2ieGOmS

— Alan MacLeod (@AlanRMacLeod) October 31, 2022

Other examples of this trend coming out at the same time include Alan MacLeod’s new report with Mintpress News that hundreds of former agents from the notorious Israeli spying organization Unit 8200 are now working in positions of influence at major tech companies like Google, Facebook, Microsoft and Amazon (just the latest in MacLeod’s ongoing documentation of the way intelligence insiders have been increasingly populating the ranks of Silicon Valley platforms), and the revelation that The Grayzone’s Max Blumenthal and Aaron Maté were barred from participating in a Web Summit conference due to pressure from the Ukrainian government.

We’re destroying western values to defend western values. To win its much-touted struggle of “democracies vs autocracies”, western civilization is becoming more and more autocratic. Censoring more. Trolling more. Propagandizing more. Jailing journalists. Becoming less and less transparent. Manipulating information and people’s understanding of truth.

We’re told we need to defeat Russia in Ukraine in order to preserve western values of freedom and democracy, and in order to facilitate that aim we’re getting less and less free speech. Less and less free thought. Less and less free press. Less and less democracy.

I keep thinking of the (fictional) story where during World War II Winston Churchill is advised to cut funding for the arts to boost military funding, and he responds, “Then what are we fighting for?” If we need to sacrifice everything we claim to value in order to fight for those values, what are we fighting for?

Dissent is becoming less and less tolerated. Public discourse is being more and more aggressively disrupted by the powerful. We’re being shaped into the exact sort of homogeneous, power-serving, tyrannized, propagandized population that our leaders criticize other nations for having.

Any journalists or press freedom advocates out there care about a US gov’t ally, Ukraine, pressuring a media conference to cancel two journalists? https://t.co/sPwaQAIiTV

— Aaron Maté (@aaronjmate) October 31, 2022

If the powerful are becoming more tyrannical in order to fight tyranny, what’s probably actually happening is that they are just tyrants making up excuses to do the thing they’ve always wanted to do.

As westerners in “liberal democracies” we are told that our society holds free speech, free thought and accountability for the powerful as sacrosanct.

Our leaders are showing us that this is a lie.

The problem with “western values” is that the west doesn’t value them.

In reality, those who best exemplify “western values” as advertised are the ones who are being most aggressively silenced and marginalized by western powers. The real journalists. The dissidents. The skeptics. The free thinkers. The peace activists. Those who refuse to bow down to their rulers.

Our ongoing descent into tyranny in the name of opposing tyrants calls forth a very simple question: if defeating autocracy requires becoming an autocracy, what’s the point of defeating autocracy?

*  *  *

My work is entirely reader-supported, so if you enjoyed this piece please consider sharing it around, following me on Facebook, Twitter, Soundcloud or YouTube, buying an issue of my monthly zine, or throwing some money into my tip jar on Ko-fi, Patreon or Paypal. If you want to read more you can buy my books. The best way to make sure you see the stuff I publish is to subscribe to the mailing list for at my website or on Substack, which will get you an email notification for everything I publish. Everyone, racist platforms excluded, has my permission to republish, use or translate any part of this work (or anything else I’ve written) in any way they like free of charge. For more info on who I am, where I stand, and what I’m trying to do with this platform, click here. All works co-authored with my American husband Tim Foley.

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Authored by Andrew Thornebrooke via The Epoch Times (emphasis ours),

State actors that include China’s communist regime are seeking to influence next week’s U.S. midterm elections, according to the nation’s cybersecurity chief.

China, Iran, and Russia may all seek to influence or otherwise interfere with U.S. democratic processes, according to Cybersecurity and Infrastructure Security Agency (CISA) Director Jen Easterly.

“We are concerned about Russia and Iran and China trying to influence our elections,” Easterly said during a Nov. 1 talk at the Center for Strategic and International Studies, a Washington-based think tank.

“It’s a significant concern when you think about these adversaries who are trying to sow discord, that are trying to break us apart as Americans and are trying to undermine integrity in our elections.”

Easterly’s comments follow closely behind several revelations in recent months regarding how hostile foreign powers are attempting to undermine stability in the United States.

Meta Platforms, which owns Facebook and Instagram, said in September that it had disrupted several Chinese and Russian influence operations. Those operations took place on Facebook, Instagram, and Meta competitor Twitter, and appeared largely aimed at increasing political polarization among Americans by spreading false and inflammatory posts about controversial topics including race, abortion, fascism, and gun control.

Likewise, a report published in October by intelligence firm Recorded Future found that China-based actors were attempting to influence the Nov. 8 midterm elections by undermining confidence in lawmakers who were critical of the Chinese Communist Party (CCP) and in the U.S. system of government itself.

Yet another report by nonprofit Global Witness and the Cybersecurity for Democracy (C4D) team at New York University asserted that social media giant TikTok failed to prevent 90 percent of political ads with misleading or blatantly false election information, even as the company claims it doesn’t allow any political advertising.

Easterly said the need to maintain strong cyber defenses against such operations is critical, and that the United States would need to be prepared for activity designed to cause instability.

“It’s not the time to put our shields down,” she said. “We need to be prepared for potential disruptive [and] destructive activity.”

“That’s what foreign adversaries want. They want to have disruption. They want to sow discord. They love the partisan rancor. They love the tearing apart of America.”

Easterly, who served 20 years as a U.S. Army officer, said that there were no credible or specific threats to election infrastructure now, but the types of influence operations seen recently could contribute to the growing number of other threats being made against Americans attempting to conduct the elections.

From physical intimidation to threats to misinformation, Easterly said the threat environment facing everyday Americans who work at the polls is more complex than ever.

To that end, Easterly said that securing elections is a nonpartisan activity, and Americans need to work together to protect the American way of life by increasing election literacy and ensuring safe and resilient conditions for poll workers.

Read more here…

Despite Jamie Dimon’s infamous condescension of crypto, banking giant JPMorgan just executed its first-ever cross-border transaction using decentralized finance (DeFi) on a public blockchain.

As Cointelegraph reports, the trade was facilitated by the Monetary Authority of Singapore’s (MAS) Project Guardian on Nov. 2 – which was established as part of a pilot program to “explore potential decentralized finance (DeFi) applications in wholesale funding markets.”

Bloomberg reports that JPMorgan issued tokenized S$100,000 ($71,000) and then traded it for tokenized yen with Tokyo-based banking firm SBI Digital Asset Holdings.

Singapore’s largest bank – DBS Bank, and business leadership platform Oliver Wyman Forum also took part in the pilot program.

“Today was the first step to show that we can actually trade on these public networks,” said Tyrone Lobban, head of Blockchain Launch and Onyx Digital Assets at JPMorgan, in an interview.

“The future is really working toward scaling this pivotal moment.”

WORLD! J.P. Morgan has executed its 1st *LIVE* trade on public blockchain using DeFi, Tokenized Deposits & Verifiable Credentials, part of @MAS_sg Project Guardian 🙌🚀🔥https://t.co/XI212SG4zg Many world 1sts here, & since this is public ⛓ here’s a transparent🧵on what we did:

— Ty Lobban (@TyLobban) November 2, 2022

“We clearly see what’s happening in the public domain and we can see how the innovation is creating not only new ways of doing financial transactions, but new types of products as well,” Lobban said, noting that the bank will explore using other blockchain networks over time, he added.

MAS Chief Fintech Officer Sopnendu Mohanty said the successful test was a “a big step towards enabling more efficient and integrated global financial networks”, and the latest pilot has helped develop the country’s digital asset strategy, adding that:

“The live pilots led by industry participants demonstrate that with the appropriate guardrails in place, digital assets and decentralized finance have the potential to transform capital markets.”

While the transaction wasn’t a crypto trade, it used the infrastructure developed by crypto firms: the Polygon blockchain, which makes transactions on the Ethereum blockchain cheaper, and a modified version of Aave, a major DeFi lending project.

MATIC, a utility and staking token within the Polygon blockchain ecosystem, rose over 18% to $0.985 after the announcements, accompanied by an uptick in daily trading volume.

Additionally, Goldman Sachs is set to unveil a data service created with global index provider MSCI and crypto data firm Coin Metrics that seeks to classify hundreds of digital coins and tokens so institutional investors can make sense of the new asset class.

“The digital asset ecosystem has really expanded over the last couple of years,” said Anne Marie Darling, head of client strategy for Goldman’s Marquee platform, in an interview with CNBC.

“We’re trying to create a framework for the digital asset ecosystem that our clients can understand, because they increasingly need to think about performance tracking and risk management in digital assets.”

It seems the bulge bracket banks are starting to realize there may be ‘another way’. Are they readying themselves for a pivoting Fed’s money flood sending crypto prices soaring as institutional investors seek any haven from the central planners’ inflation?

Authored by Jim Quinn via The Burning Platform blog,

If you believed they put a man on the moon

Man on the moon

If you believe there’s nothing up his sleeve

Then nothing is cool

REM – Man on the Moon

The REM song Man on the Moon, released in 1992, is a haunting melancholy tune, with Andy Kaufmann and his life and death as the focal point. For me, the lyrics always bring me back to the simpler time of my youth, when our antenna TV could get about eight channels, we had one rotary phone, one old used station wagon, lived in a row home, and a family of five could be raised on a truck driver’s income, with a stay-at-home mom.

It’s the references to the Game of Life, Risk, Monopoly, Twister, checkers, and chess, which invoke what we did for fun when we weren’t out riding bikes, playing stick-ball, roller hockey, or touch football in the streets. Were bad things going on in the world? Sure. The Vietnam War, Watergate, gasoline shortages and rationing, stagflation, and a myriad of other damaging challenges confronted the country, just as they always have throughout history.

One of the supposed historic moments in human history was the moon landing in July 1969, when I was six years old. I remember sitting on the floor in front of the TV and thinking how cool it was and how cool that I was allowed up at 11:00 pm to watch it. Another 600 million people were also watching. At the time, no one questioned what they were watching live on their TVs. It was the penultimate human achievement, with the goal set by JFK during Camelot before he was murdered by his own government, proving our technological superiority to the evil Soviets. To fail in this mission would have been too embarrassing to the leaders of our empire, only two decades into its infancy. I believed the official narrative up until a few years ago.

I don’t know whether Stanley Kubrick staged the moon landing on a movie set, or some other scenario, but my skepticism is based on something rather mundane. TV technology in 1969 was poor. Picture quality from stations a few miles across town were bad. The moon is 239,000 miles from earth. How could they have landed on the moon and broadcast live video that was as clear as if you were watching a TV show, when surveillance camera video in 2022, 53 years later can’t even reveal who placed those pipe bombs around Washington DC on January 5th, 2020.

The government, their media mouthpieces, and most certainly the plethora of alphabet agencies wielding the real power (CIA, FBI, DHS, etc.) in D.C. created the term “conspiracy theorists” as a way to cover up their diabolical Deep State plots to rule the world from behind the curtain. The CIA coined the term in the wake of the JFK assassination as a method to discredit critical thinking Americans who questioned the validity of the Warren Report and the government cover-up of JFK’s murder by rogue elements of the U.S. government.

This was not the beginning of manipulation of the public mind by men we have never heard of. As expounded by the master of propaganda, Edward Bernays, the manipulation was already taking place during the 1920s. With the advent of mass media technology, the ability of these malevolent Svengalis to sway the masses towards believing whatever narrative they spin has expanded exponentially.

“The conscious and intelligent manipulation of the organized habits and opinions of the masses is an important element in democratic society. Those who manipulate this unseen mechanism of society constitute an invisible government which is the true ruling power of our country. We are governed, our minds are molded, our tastes formed, our ideas suggested, largely by men we have never heard of.” – Edward Bernays – Propaganda – 1928

Many of REM’s songs have a word salad feel to them, but bassist Mike Mills described how singer and lyricist Michael Stipe “came up this beautiful lyric that encompasses doubt, belief, transition, conspiracy and truth”. The title of the song and the lyric “if you believe” are ambiguous and can be interpreted by believers and non-believers. Those referred to as conspiracy theorists, the favorite term of the Deep State acolytes and their legacy media propaganda outlets, feel vindicated by the lyrics, while those who believe everything fed to them by their overlords believe the lyrics are making fun of conspiracy theorists.

I was twenty-nine years old in 1992, newly married, one year before the birth of our first child, working on getting my MBA at night, trying to move up the corporate ladder, and still ignorant of how the world was run by unseen men functioning as an invisible government.

I’ve always had a skeptical nature and knew in my teens that JFK was not killed by a lone gunman in the Book Depository building, but the hustle and bustle of life kept me from examining so called “conspiracy theories” on a deeper level. Through the 90s I was busy raising a family, working long hours, paying a mortgage, auto loans, tuition bills, and sports fees for my three boys. There was no time to breathe, let alone examine the truth behind how the world functioned.

9/11 changed all that. Something didn’t add up. Somehow the 341- page Patriot Act, creating a new agency and numerous new unlawful governmental powers, was supposedly written, and voted on within four weeks of 9/11. Only three Republicans voted against the bill – including Ron Paul, who I had never heard of at the time. The unwarranted invasion of Iraq in 2003 based on lies and propaganda, led by Cheney and Rumsfeld, was the straw that broke the camel’s back.

I began to read anti-establishment blogs and investigated the stories being peddled by the government, media, and Wall Street. I started reading articles and books by the likes of Ron Paul and other opponents of neocons, the Fed, the military industrial complex, the Wall Street cabal, propaganda spewing MSM, and the Deep State. I turned myself from a naïve member of the ignorant masses into an anti-government libertarian anarchist, who hasn’t believed a word uttered by any politician, MSM talking head, celebrity, or Wall Street beholden toady in the last sixteen years.

By early 2008 I was writing articles and sending Op-Eds to my local newspapers. During the summer of 2008 I was writing articles on Seeking Alpha and Financial Sense predicting a banking crisis, financial system meltdown and global recession. Shortly thereafter, Seeking Alpha and Financial Sense began censoring my articles and my “conspiracy theorist” credentials were minted.

I have believed less and less of what they have been selling as the years have progressed, opening my mind to the likelihood those who control the levers of society do not have my best interests at heart and are solely driven by a carnivorous desire for wealth, power, and control over the masses. I now approach life with an eyes wide open skepticism of everything and everyone. I’m not a pessimist, but a realist who only trusts data I can replicate, facts I can substantiate, and people who make cogent fact-based arguments without a bias influenced by money.

The world is a scary place and the men constituting the “invisible government”, pulling the strings, and using their limitless wealth to buy off politicians, the media, the entertainment industry, academia, the medical industry, and so called “experts”, are satanically driven by their seemingly insatiable thirst for ruling the world. They believe their ends always justify their means. These sociopathic bastards don’t care how many people they kill or how many lives they financially ruin in their relentless pursuit of mammon. They proclaim themselves to be gods, based on the power they can wield through their ill-gotten wealth. Their arrogance and hubris know no bounds.

We are currently living in an Age of Mass Deceit not seen before in human history. The advent of advanced technology and instant mass media messaging has provided these evil fiends with the means to spin their web of lies and essentially brain wash and /or terrify the ignorant masses into doing whatever they are told. The last few years have proven these psychological propaganda techniques, applied through the use of mass media, bought off politicians and “experts”, and a compliant sheep-like populace dumbed down by decades of government school indoctrination, has essentially destroyed western civilization, with the denouement of global war and depopulation of the planet still playing out.

As it turns out, “conspiracy theorists” like me and a slew of other critical thinking individuals, have turned out to be right on just about everything we have been saying for the last fourteen or so years. The Deep State acts as if disinformation, as defined by those engineering the false narratives, is a threat to the nation and has colluded with the MSM, Facebook, Twitter, and Google to suppress any alternative viewpoints, censor those who can disprove their narratives, and de-platform anyone who dares question their authority and approved storyline. DHS and the social media tyrants coordinated to throw a presidential election, which is a traitorous act and would be prosecuted in a law-abiding system.

During the Covid scamdemic, they achieved the goal set by CIA head William Casey in 1981. Everything the American public believed since March 2020 was false. Some people seem to be wakening from their mass psychosis formation stupor, but it may be too late. The damage is done, and the tens of millions of psychologically broken individuals are still malleable material for the Deep State.

We are nothing more than disposable pieces on a game board to those calling the shots and running the show. The game of Risk has taken on a new meaning from what I knew in my youth. There is now a new narrative being spun, where all the tyrants who demanded subservience to all government dictates, lockdowns, masking, social distancing, and being coerced into becoming guinea pigs for an untested, experimental, Big Pharma enriching gene altering therapy disguised and sold as a vaccine under threat of losing your livelihood, want dispensation and forgiveness for their crimes.

You weren’t allowed to say goodbye to your loved ones or attend their funerals, but the chosen ones dined at extravagant restaurants and allowed liquor stores and Wal-Mart to stay open. Your small business was destroyed, while Amazon made billions.

These murderous hypocrites killed thousands of seniors by knowingly putting infected patients into old age homes, killed thousands more by putting treatable patients on ventilators and Fauci’s remdesivir, killed thousands more by not allowing safe and effective treatments like ivermectin and hydroxychloroquine to be prescribed by doctors, and have killed and injured thousands more by forcing a dangerous Big Pharma toxic concoction on tens of millions through threats, mandates and a never ending stream of lies. All for a flu with a miniscule fatality rate for those under 85 years old and not morbidly obese. This was the biggest scam in human history, perpetrated by Gates, Fauci, Schwab and their willing co-conspirator minions in the media, medical industry, and government.

These “experts” seeking forgiveness because they were just caught up in the “hysteria” of the moment weren’t wrong. They were lying from the outset and need to pay dearly for their crimes against humanity. Nuremberg 2.0 is the only thing that will satisfy myself and all the other dissenters who risked their livelihoods by refusing to go along. We were scorned, ridiculed, ostracized, censored, fired, de-platformed, wished dead by the authoritarian minded sheep who demanded compliance, and treated like outcasts by family members who believed the narrative hook, line and sinker.

I don’t believe. I think. And I don’t forget or forgive these feckless tin pot dictators. They have shown their colors and now that the tide seems to be turning, we must channel our inner Conan the Barbarian. We need to crush our enemies, see them driven before us, and hear the lamentation of their women.

They pushed their agenda too far and too fast out of desperation, as the financial underpinnings of their fake world order began to strain and crumble. This desperation exposed their blatant lies to a vast array of critical thinkers across the world who have not been deterred in exposing the falsehoods on social media, blogs, and free speech websites. When the truth was censored and suppressed on Youtube, alternatives like Rumble, Bitchute, and Odysee sprung to life. When Facebook and Twitter banned truth tellers, new platforms like Gab and Truth Social were created.

Writers and doctors silenced by social media platforms, like Glenn Greenwald, Alex Berenson, Robert Malone, and many others gravitated to the free speech forum of Substack where they are free to speak the truth and earn money through voluntary subscriptions. If Elon Musk follows through on his promises, Twitter will once again become a free speech forum rather than the social media censorship arm of the Democratic Party and the Deep State.

I am under no illusions that the Republicans regaining the House and Senate next week will change the direction of the country. It would just be a speed bump temporarily slowing down our descent into the abyss. The Uniparty in DC, where both sides agree 80% of the time on frivolous spending, never ending wars, debasement of our currency, and limiting the rights of citizens, will continue to be funded and controlled by Soros, Gates, and other shady billionaires operating in smoky rooms where your opinions are not sought. The authoritarians will not yield without a fight. This sign in the upscale Capital section of D.C. on Halloween tells you everything you need to know about these brain damaged loons. They remain your enemy.

If you still believe JFK was assassinated by a lone gunman; the official story of what really happened on 9/11; that Epstein killed himself and numerous celebrities, politicians, and financiers aren’t pedophiles; the Federal Reserve isn’t controlled by Wall Street; Klaus Schwab and his WEF acolytes are not trying to Reset the world where you will eat bugs, own nothing, and be happy; Bill Gates is not creating viruses and investing in vaccine makers, while buying up farmland, as part of his dream to decrease the “surplus” population; Soros is not funding the election of communists whose sole purpose is to destroy the cities and states they are running; scientific experts like Fauci are not swayed by the vast amounts of money they are paid by Big Pharma to fake their research and ignore the deaths from these products; Covid was not the weaponization of the annual flu with a billion dollar marketing campaign used to implement government control of the population, which will be expanded during the next engineered crisis; January 6th was an armed insurrection; Putin is literally Hitler and the U.S. did not blow up the Nordstream pipelines while waging a proxy war against Russia; a drug addict nudist from Berkley with a pride flag and BLM flag hanging outside his dilapidated bus is a MAGA underwear terrorist and not a male prostitute picked up by Paul Pelosi; and the Democrats are not cheating again in these 2022 mid-term elections, you are the real conspiracy theorists.

The believers choose to willfully ignore the facts either because they are deliberately obtuse as a mechanism to combat their cognitive dissonance, or they are compensated to support and perpetuate the false narratives of their ruling overlords. I understand my opinions and writings are nothing but a drop in the ocean as this tsunami rush towards our shores. But I will continue to fight for what I believe and will not bend the knee to the malicious forces who hate me and everything I stand for. I urge everyone to heed the wisdom of two of the most brilliant minds of the 20th Century and do your utmost to keep the truth alive.

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It is my sincere desire to provide readers of this site with the best unbiased information available, and a forum where it can be discussed openly, as our Founders intended. But it is not easy nor inexpensive to do so, especially when those who wish to prevent us from making the truth known, attack us without mercy on all fronts on a daily basis. So each time you visit the site, I would ask that you consider the value that you receive and have received from The Burning Platform and the community of which you are a vital part. I can’t do it all alone, and I need your help and support to keep it alive. Please consider contributing an amount commensurate to the value that you receive from this site and community, or even by becoming a sustaining supporter through periodic contributions. 

EV battery manufacturer Contemporary Amperex Technology Co. Ltd. (CATL) is growing its global expansion yet again.

The world’s largest EV battery producer, which had announced a $233 million factory in Germany back in 2018, has made several moves this year to increase its global footprint. Over the summer, it announced it would be building a $7.2 billion factory in Hungary. Now, plans for a factory in Mexico are also being finalized, according to Caixin. 

The report also says that the manufacturer could be looking to expand with plants in the U.S. and Indonesia. 

CATL was barely founded a decade ago, in 2011, but caught the tremendous wave of the EV industry in China (and its related subsidies). As the report notes, the company caught the government subsidy tailwind in 2015 and never looked back:

In 2015, CATL was included on a government list of EV-battery makers which carmakers had to source from to be eligible for subsidies. This narrowing of the field of competition helped the company hoover up the business from domestic and international carmakers riding the wave of growth. For example, CATL was chosen to be Volkswagen’s sole battery supplier in the country, CEO Matthias Muller told Caixin in early 2018.

CATL was able to seize this opportunity in part by achieving technological breakthroughs which made its products more competitive than its rivals. The company pioneered the use of lithium iron phosphate (LFP) batteries. Though these batteries are safer, they have lower energy density, meaning that EVs powered by such batteries have lower driving range compared to those using nickel-cobalt-manganese (NCM) batteries. But CATL managed to improve their density by redesigning the battery packs with fewer parts.

CATL’s lead among the Chinese EV market is starting to slip, dropping to 47% market share in the first 8 months of this year from 50% in 2020, the report noted. China Aviation Lithium Battery Co. Ltd. (CALB) and BYD are two major competitors in China. 

A source told Caixin that the company’s outlook on the industry is  “you either forge ahead or drift downstream.” The company will face substantial competitive forces in places like South Korea and Japan, and will have to navigate geopolitical crosswinds when attempting to enter markets like Germany and the U.S. The company is looking to upgrade its product lineup in Germany, the report says. 

Washington’s Inflation Reduction Act “includes provisions that stipulate EV-makers must source batteries domestically to enjoy subsidies” and in Europe, “stringent environmental rules could also present challenges”. 

But CATL has already started to make inroads with EV companies outside of China. For example, Tesla announced last October that it would use CATL’s batteries in its cars delivered to global consumers, not just for cars in China. Ford announced in July that it would “import LFP batteries from CATL for its North American electric pickup trucks and SUVs”, Caixin wrote. 

Liu Yanlong, general secretary at China Industrial Association of Power Sources, concluded: “By setting up production facilities, battery companies can better serve clients at their proximity by reducing costs of transportation and other logistics.”

By Simon White, macro strategist for Bloomberg’s Markets Live blog

Stocks in the US will remain mired in a bear market as long as China’s slowdown frustrates a strong rebound for the tech sector.

After a hiatus for most of this century, macro-driven markets, along with volatility, are back. To understand them, it’s now more essential than ever to have a joined-up, holistic view of the world. Butterflies are flapping their wings everywhere, and those reverberations are being felt in diverse, complex and constantly-changing ways.

One of the biggest butterflies in macro terms is China. Understanding the dynamics at play for the country’s economy is key to understanding when the equity bear market will end.

China faces economic pain on three fronts — from its policy of seeking to eradicate Covid, the collapse in its property sector and also the growing risk posed by debt deflation.

While hopes continue to be dashed for a definitive end to China’s Zero-Covid policy, the slump in the country’s property market is arguably a more serious problem. Home sales are plummeting, rents are falling, residential building activity is contracting and high-yield real-estate debt has cratered 80% from its peak.

Local governments in China often use land as collateral for the debt they issue. With $8 trillion of such liabilities outstanding, falling land values – unless they recover – threaten to condemn China to years of debt-deflation and economic malaise, akin to what Japan experienced after its property bubble burst in the late 1980s.

China’s growth slowdown is a serious problem and can be seen most starkly in increased capital outflows. This might seem counter-intuitive given that China has been running huge trade surpluses. But domestic policies ensuring the household sector subsidizes the export-facing state-owned-enterprise sector means running those surpluses comes at a cost to overall growth.

Capital votes with its feet, even in a country with a nominally-closed capital account. We can infer capital is leaving China at an increasing rate as FX reserves are not rising, despite the huge inflows from exports.

The yuan has been weakening to alleviate some of the domestic credit destruction that comes with capital outflow. But it has not been enough. Liquidity conditions in China are tepid at best, especially with policy makers still reluctant to resort to so-called “flood-like” stimulus so as to avoid re-inflating the shadow-banking sector.

This brings us back to US tech. Real M1 growth – one of the broadest and best indicators of China growth – tends to lead US tech earnings by one year. It therefore follows that its current inability to properly recover represents a formidable headwind to a turnaround for US tech stocks. 

It would be easy to make the case that US tech shouldn’t be too dependent on China. After all, three of the biggest tech firms – Amazon, Alphabet and Meta – do not have a significant presence in the country. But there are plenty of other US tech firms that do derive a significant amount of their revenue from China, such as Tesla, Nvidia and Apple.

In fact, altogether, almost an eighth of S&P 500 tech firms’ revenue comes from China, an amount substantially higher than any other sector. Tech firms’ revenue from China alone accounts for almost 1.5% of all of the S&P 500’s $15.7 trillion in revenues.

Risks to those sales streams look set to mount in the coming months and years as the US clamps down on the export of technology to China, most notably via the recent ban on semiconductors materials and know-how. Even so, the dial is unlikely to shift enough in the near term to make China unimportant to the performance of US tech firms.

Furthermore, capital controls make it difficult for foreign firms to get capital out of China when growth, and therefore revenues, are weak. That cash is often considered to be “stranded” and thus not able to boost earnings back in the company’s home country (even if it is considered a worthwhile risk to win the premium granted in one’s share price for having sales in such a huge market).

Stocks therefore are likely stuck in a bear market until tech – accounting for a quarter of the S&P’s market cap – makes a comeback. And that’s not likely until China emerges from its pandemic-induced growth stupor and manages to avoid a debt-deflation. Macro investing may be back, but no one said it would be easy.

It’s official: former Israeli Prime Minister Benjamin Netanyahu is returning to power after his alliance of far right parties won this week’s elections. 

The Times of Israel confirmed late in the day Thursday: “As the final thousands of votes were being tallied Thursday evening, Prime Minister Yair Lapid called opposition leader Benjamin Netanyahu to concede the race and congratulate him on his election victory.”

Bibi’s conservative coalition is expected to take as many as 65 seats in the 120-member Knesset, a clear and sweeping victory. 

“The state of Israel comes before any political consideration,” Lapid announced. “I wish Netanyahu success, for the sake of the people of Israel and the State of Israel.”

Lapid had been caretaker prime minister since June. Four prior gridlocked elections over a period of three-and-a-half years had failed time and again to produce a final government. Netanyahu is expected to take the highest office once again.

For the Likud party chairman, this will likely result in his third stint as prime minister, after the led the country in the position from 1996 to 1999, and then more recently from 2009 to 2021. He’s the longest serving leader in the country’s history, having served for 15 years.

Fox News has cited former Israeli Ambassador to the United Nations and likely soon-to-be Knesset member in the new government, Danny Danon, as saying countering Iran will top the agenda for the new Netanyahu administration. 

“I think if we will win, if Netanyahu will return to his position as prime minister, we will be able to put the issue of Iran on the front lines and we will expect our colleagues in the U.S. also to address this threat,” Danon said.

Meanwhile, speaking of anti-Iran hawks…

Welcome back, @Netanyahu—you were missed! pic.twitter.com/ZnujUPgH89

— Mike Pompeo (@mikepompeo) November 3, 2022

It’s about to feel like 2018 all over again. But we’ll see what Netanyahu’s approach to the White House will look like with Biden at the helm, and fewer neocon Republican allies in high positions in Washington. 

And the new far-right governing coalition’s response to the Ukraine crisis will be interested, at a moment the Ukrainian government is essentially begging for Israeli weapons, especially the Iron Dome anti-air defense system…

Congratulations to @netanyahu on winning the elections. It’s always important to see real democracy in action. 🇺🇦 & 🇮🇱 share common values & challenges that now require effective cooperation. We hope to open a new page in cooperation with the new 🇮🇱 Government for 🇺🇦&🇮🇱 benefit!

— Володимир Зеленський (@ZelenskyyUa) November 3, 2022

Michael Msika and Farah Elbahrawy, Bloomberg Markets Live reporter and commentators

Let the economists debate all day long about whether a recession is coming: In corporate earnings, one has already arrived, if you set aside the oil and gas industry. And the worst may not be over.

Third-quarter earnings for companies in the S&P 500 excluding energy have fallen 3.5%, based on results so far and estimates for those still to come, according to data compiled by Bloomberg Intelligence. That’s after a 1.8% drop in the preceding period, marking the first consecutive declines since 2020, when the pandemic began.

Earnings for US energy companies have gotten a boost from elevated oil prices due to tighter supply caused by Russia’s invasion of Ukraine. But the broader corporate world is feeling the pinch of raging inflation, the resultant higher interest rates from the Federal Reserve, the surging dollar and slowing demand.

“We’re very clearly seeing a slowdown in earnings growth,” Madison Faller, global strategist at JPMorgan Private Bank, told Bloomberg Television. “That said, I don’t think earnings expectations are yet fully pricing in this probability of a recession.”

Investors largely have looked past the decline in profits this earnings season, lifting the S&P 500 by 2.5% since companies started reporting in mid-October. The thinking was that the Fed’s rate increases soon will have inflation under control, allowing the central bank to slow or even end its rate hike campaign, and the economy to avoid a recession.

The Fed dashed such optimism in its latest interest rate decision Wednesday, with Chair Jerome Powell leaving little doubt that he’s prepared to push rates as high as needed to stamp out inflation. If there’s a deeper economic downturn in the offing, earnings estimates may still be too high.

A consensus estimate for 12-month S&P 500 earnings per share of $210, down from the current $232, is a level which would reflect an economic slowdown, Faller said.

The next global earnings-per-share recession is about to begin, according to Citigroup Inc. strategists led by Robert Buckland. It would be the eighth in the past 50 years. The past seven lasted two years and saw earnings fall 31%, they wrote in a note.

“We remain concerned that interest-rate-obsessed equity markets have yet to price in the true earnings impact of a full-blown economic slowdown,” they said. Analyst consensus estimates are still too high, predicting 5% global earnings per share growth in 2023 when Citi strategists forecast a 5% to 10% contraction, they added.

To be sure, analysts are already slashing their forecasts for the next couple of years — projections for 2023 earnings have fallen six straight weeks while the consensus for 2024 has dropped for 19 consecutive weeks. 

The third-quarter results illustrate how bad it’s gotten. US companies typically steer analyst expectations lower in the weeks before earnings announcements, so that they then can manage to beat the lowered estimates. This quarter, though, earnings are coming in 1% below consensus, so this could be only the third time since the Great Financial Crisis that results miss expectations, according to Bank of America Corp. strategists including Savita Subramanian.

To further complicate matters, the S&P 500 is likely to lose the oil and gas earnings crutch moving into the coming quarters. Energy companies’ earnings growth will fade the next two quarters and will start to contract in the second quarter of 2023, according to analysis from Wendy Soong, a senior associate analyst at BI.

“We are still not yet at the sort of 20-30% earnings decline which usually comes with a recession,” said James Athey, investment director at Abrdn. “Recent recessions have been fleeting because of the speed with which the Fed has responded through easier policy. That’s less likely this time given the inflation backdrop.”