**FBI Arrest Two In Manhattan For 'Conspiring' To Act As CCP Spies, Operating Illegal Police Station**
FBI Arrest Two In Manhattan For 'Conspiring' To Act As CCP Spies, Operating Illegal Police Station
The FBI arrested two New York residents with **conspiring to act as agents of China's government**, by operating an illegal police station, and acting as spies.
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_The America ChangLe Association in New York on Oct. 6, 2022. An overseas Chinese police outpost in New York, called the Fuzhou Police Overseas Service Station, is located inside the association building. (Samira Bouaou/The Epoch Times)_ (
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In a _Monday press release (https://www.justice.gov/opa/pr/two-arrested-operating-illegal-overseas-police-station-chinese-government)_, the Department of Justice announced the arrests of Lu Jianwang, 61, and Chen Jinping, 59, in connection with the undeclared police station in Manhattan's Chinatown neighborhood. They will be prosecuted in the Eastern District of New York, and are expected to appear in federal court in Brooklyn.
The two admitted to the FBI that they **deleted their communications with a CCP official** after discovering they were under investigation.
" **It is simply outrageous that China’s Ministry of Public Security thinks it can get away with establishing a secret, illegal police station on U.S. soil to aid its efforts to export repression and subvert our rule of law,**" said Acting Assistant Director Kurt Ronnow of the FBI Counterintelligence Division. "This case serves as a powerful reminder that the People’s Republic of China will stop at nothing to bend people to their will and silence messages they don’t want anyone to hear. The FBI is dedicated to protecting everyone in the United States against efforts to undermine our democratic freedoms, and we’ll hold any state actors – and those who help them – accountable for breaking our laws."
According to the DOJ;
Before helping to open the police station in early 2022, Lu had a longstanding relationship of trust with PRC law enforcement, including the MPS. Since 2015, and through the operation of the secret police station, Lu was tasked with carrying out various activities, including to assist the PRC government’s repressive activities on U.S. soil:
- In 2015, during PRC President Xi Jinping’s visit to the United States, Lu participated in counterprotests in Washington, D.C,. against members of a religion that is forbidden under PRC law. A deputy director of the MPS awarded Lu a plaque for the work he performed on behalf of the PRC government.
- In 2018, Lu was enlisted in efforts to cause a purported PRC fugitive to return to the PRC. The victim reported being repeatedly harassed to return to the PRC, including through threats of violence made to the victim and the victim’s family in the United States and in the PRC.
- In 2022, the MPS Official sought Lu’s assistance in locating an individual living in California who is a pro-democracy activist. In turn, Lu enlisted the help of another coconspirator. Later, when confronted by the FBI about these conversations, Lu denied that they occurred.
**In October 2022, the FBI conducted a judicially authorized search of the illegal police station**. In connection with the search, FBI agents interviewed both Lu and Chen and seized their phones. In reviewing the contents of these phones, FBI agents observed that communications between Lu and Chen, on the one hand, and the MPS Official, on the other, appeared to have been deleted. In subsequent consensual interviews, Lu and Chen admitted to the FBI that they had deleted their communications with the MPS Official after learning about the ongoing FBI investigation, thus preventing the FBI from learning the full extent of the MPS’s directions for the overseas police station.
Each defendant faces a maximum of five years in prison if convicted for conspiring to act as agents of the PRC, and up to 20 years in prison on the obstruction of justice charge.
**In a second complaint**, 24 Chinese police officers were charged over belonging to a "special project working group" task force that "commits crimes, targeting Chinese democracy activists and dissidents located outside of the PRC, including right here in New York City, according to Eastern District of New York Attorney Breon Peace, who added that "This task force operates as an internet troll farm, creating thousands of fake online personas which they use in a coordinated plot to harass, disparage and threaten dissidents and activists throughout the world."
In February, we noted that the FBI **closed the illegal Chinatown police station (https://www.zerohedge.com/political/secret-ccp-overseas-police-station-nyc-closed-after-reported-fbi-raid)** following a raid of the building last fall. As the _Epoch …
**DeSantis Targets 'Cultural Marxism,' Vows 'War On Woke' At Liberty University**
DeSantis Targets 'Cultural Marxism,' Vows 'War On Woke' At Liberty University
_Authored by Terri Wu via The Epoch Times (https://www.theepochtimes.com/desantis-slams-cultural-marxism-at-liberty-university-vows-war-on-woke_5196752.html?utm_source=partner&utm_campaign=ZeroHedge&src_src=partner&src_cmp=ZeroHedge) (emphasis ours),_
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_Florida Gov. Ron DeSantis speaks at Liberty University in Lynchburg, Va., on Apr. 14, 2023. (Courtesy of Liberty University)_ (
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LYNCHBURG, Va.—Fresh off signing a six-week abortion ban (https://www.theepochtimes.com/desantis-signs-floridas-6-week-abortion-ban-into-law_5193963.html) into law the day before, **Florida Gov. Ron DeSantis vowed to continue fighting the “war on woke” to about 9,000 students before receiving an honorary degree of the Doctorate of Humanities at Liberty University on Friday.**
Speaking to young evangelicals at the twice-weekly convocation service, which the school calls “the world’s largest gathering of Christian students,” DeSantis touted Florida as the “refuge of sanity” and “a ray of hope” when “freedom and our very own way of life… withered on the vine” in the country.
In his view, Florida’s population growth and his landslide reelection victory last year are a direct result of his fight against woke ideology—what he called “cultural Marxism”—and Americans “voting with their feet.”
“ **We have made Florida the state where woke goes to die**,” he declared as the audience burst into a loud cheer.
His statements against gender ideology—prohibiting using puberty blockers or sex change operations on minors in Florida and criticizing biological males competing in women’s sports—were also well-received by the crowd. “Because woke represents a war on truth, we must wage a war on woke,” he added.
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_Florida Gov. Ron DeSantis (C) receives an honorary degree of the Doctorate of Humanities at Liberty University from university president Jerry Prevo (L) and pastor Jonathan Falwell in Lynchburg, Va., on Apr. 14, 2023. (Courtesy of Liberty University)_ (
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The governor started his speech by thanking Liberty University students for praying for his wife Casey’s recovery from breast cancer. Casey was diagnosed in 2021 and became cancer-free late last year. “The prayers that we received as a result of that lifted up our spirits,” he said. **“The prayers have been answered.”**
In closing, he said he “looked forward to the battles ahead” in the “war on truth,” “I will fight the good fight. I will finish the race. I will keep the faith.”
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_Florida Gov. Ron DeSantis speaks at Liberty University in Lynchburg, Va., on Apr. 14, 2023. (Terri Wu/The Epoch Times)_ (
?itok=Ul97m79c)‘Uplifting’ and ‘Inspiring’
Giulia Nicole, a homeschooled high school senior, said DeSantis’s speech was “uplifting.” She has been on dual enrollment at Liberty University online and will attend the college full-time in August, majoring in accounting.
“A lot of times when you hear people speak, you kind of leave feeling like the world is just going downhill, and there’s not a lot of hope,” she told The Epoch Times. “ **Gov. DeSantis was very uplifting.** He was a breath of fresh air because I feel encouraged right now. I don’t feel worried about the future. So I really enjoyed his speech.”
She attended the convocation with her mother Carla Nicole, grandmother Maria Shoemaker, and a friend Savannah Dudzik, a Floridian in Lynchburg, for just the weekend for a pro-life event.
“I would just say I was impressed. **Every time he speaks, I’m a little bit more impressed.** He’s so genuine. And we need people like that in politics,” Dudzik, a resident in the Tampa Bay area, told The Epoch Times. “We need people who are genuine, people who you can tell he’s not there for the crowd. He’s not there for the applause. He’s there for the people. He’s there for us.”
_Read more **here...** (https://www.theepochtimes.com/desantis-slams-cultural-marxism-at-liberty-university-vows-war-on-woke_5196752.html)_
Tyler Durden (https://cms.zerohedge.com/users/tyler-durden)Mon, 04/17/2023 - 21:00
**USPS Targets Hiking First Class Mail Prices By 5.4%**
USPS Targets Hiking First Class Mail Prices By 5.4%
The same U.S. government that is fighting inflation is also succumbing to it: the price of stamps and postage is once again moving higher. Prices on first-class mail stamps will rise to 66 cents from 63 cents in July, pending approval from regulators, according to CNN (https://www.cnn.com/2023/04/12/business/usps-stamp-prices/index.html).
The price hike - which is being put in place to "offset a rise in operating expenses" - amounts to about a 5.4% hike. Someone should tell the government those hikes are "above the Fed's 2% target".
Among those expenses are a rise in wages and increasing costs of doing business. “These price adjustments are needed to provide the Postal Service with much needed revenue,” the post office commented in a statement (https://www.cnn.com/2023/04/12/business/usps-stamp-prices/index.html).
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The price of postcards will also go up, from 48 cents to 51 cents. International postcards will see their prices rise from $1.45 to $1.50.
As the report notes, regulators turning down USPS requests for prices hikes are rare, though it did happen in 2010 because the Post Office “failed both to quantify the impact of the recession on its finances and to show how its rate request relates to the resulting loss of mail volume.”
The post office expects to lose $4.5 billion in 2023 and we're sure these price hikes will do little to help rectify the bottom line. But hey, raising prices 5.4% while the Fed clamors for 2% inflation all while burning cash is American as apple pie.
Maybe the Post Office should take itself public on the NASDAQ via SPAC, where the market would value it on a price/sales basis instead of focusing on pesky details like actual net income and cash generation...
Tyler Durden (https://cms.zerohedge.com/users/tyler-durden)Mon, 04/17/2023 - 20:40
https://www.zerohedge.com/markets/usps-targets-hiking-first-class-mail-prices-54
**"We're Going To See A Lot Of Bankruptcies": Former Home Depot CEO Warns**
"We're Going To See A Lot Of Bankruptcies": Former Home Depot CEO Warns
_Authored by Naveen Anthrapully via The Epoch Times,_ (https://www.theepochtimes.com/were-going-to-see-a-lot-of-bankruptcies-former-ceo_5197083.html)
Bob Nardelli, the former CEO of Home Depot, is warning about more bankruptcies hitting the U.S. economy, and blames lawmakers for their delay in coming to terms regarding the country’s debt ceiling.
> _“ **I think we’re going to see a lot of bankruptcies.** Like Bed, Bath, and Beyond. We got Walmart not only laying people off but closing stores. We got Accenture laying people off. We got Amazon closing distribution centers. So, **I think there’s a tremendous-mixed message,**” Nardelli said in an April 14 interview (https://www.foxbusiness.com/economy/home-depot-ceo-predicts-a-lot-of-bankruptcies-in-us-economy-its-different-than-anything-ive-seen) with Fox._
>
> **_At present, the “complexity” of the American economy is “different than anything I have seen in my 52 years.”_**
Nardelli also blamed Congress’ inability to work together to raise the U.S. debt limit as creating a burden on businesses, saying that he is “definitely worried” about the situation.
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The former Home Depot CEO says he is seeing “inventory builds” in a lot of public and private businesses. **He pointed to the 2007–09 period when the banking meltdown took “everything down.”**
> _“I think we’re in a very complex environment. And, of course, this debt issue only adds to that. It adds to the certainty of uncertainty, what’s going to happen.”_
Surge in Bankruptcy Filings
**Bankruptcy filings across the United States rose for the third straight month in March in all major industries.** A total of 42,368 new bankruptcies were filed last month, according to data from Epiq Bankruptcy, a provider of U.S. bankruptcy court data, technology, and services.
**This is 17 percent up from the 36,068 filings in March 2022 and is the highest number of monthly bankruptcy filings since April 2021.**
Data from S&P Global Market Intelligence showed 71 corporate bankruptcy petitions in March, a jump from 58 in the previous month. This is the highest monthly total since July 2020 and the fourth straight month of increases.
**First-quarter corporate bankruptcy filings came in at 183, which is “more than any comparable period in the past 12 years,”** S&P Global said (https://www.theepochtimes.com/new-bankruptcy-filings-soar-across-all-industries-as-corporate-filings-reach-highest-since-2010_5176047.html).
Bank Lending Dips, Layoffs
Meanwhile, lending activity by banks suffered the biggest plunge ever in the two weeks ending March 29. Commercial lending in the country declined by $105 billion during this period—the highest since 1973. The collapse in lending was led by declining real estate loans as well as industrial and commercial loans.
According to financial analyst Andreas Steno Larsen, tough times are ahead for the American economy. “Evidence is gathering that the SVB-fueled banking stress indeed will turn into a recession, but instead of a fast and rapid liquidity-driven recession, we are rather slow-walking into a credit crunch over summer,” he wrote (https://stenoresearch.com/steno-signals-43-slow-walking-into-a-recessionary-credit-crunch/) in an April 9 post.
**Indication of an incoming credit crunch was seen in the latest Survey of Consumer Expectations (SCE) by the New York Federal Reserve.**
> _“Perceptions of credit access compared to a year ago deteriorated in March, with the share of households reporting it is harder to obtain credit than one year ago rising and reaching a series high,” according to an April 10 press release (https://www.newyorkfed.org/newsevents/news/research/2023/20230410)._
>
> _“Respondents were more pessimistic about future credit availability as well, with the share of households expecting it will be harder to obtain credit a year from now also rising.”_
Besides the credit crunch, there has been a quadrupling in worker layoffs.
**The first quarter of 2023 saw job cuts rise by 396 percent compared to the same period a year ago,** according to an April report by outplacement firm Challenger, Gray & Christmas, Inc. The total number of job cuts announced by U.S.-based employers during this period came in at 270,416, which is the highest first-quarter number since 2020.
The number-one reason cited by companies for the job cuts was market or economic conditions, followed by cost-cutting in second place.
Billions of dollars have flown out from domestically chartered commercial banks in…
**Volkswagen Debuts ID7 Mid-Sized EV Sedan, Expected To Start At $38,000**
Volkswagen Debuts ID7 Mid-Sized EV Sedan, Expected To Start At $38,000
Just as the EV price wars are heating up, Volkswagen has launched its much awaited ID7 sedan. Expected to be priced (https://carbuzz.com/cars/volkswagen/id-7) around $38,000 to $40,000 for the entry level model, the stunning sedan will assuredly be a direct competitor to Tesla's Model 3.
A release (https://media.vw.com/en-us/releases/1739) by the company on Monday details the first all-electric Volkswagen for the upper mid-size sedan class, touting its "combination of excellent aerodynamics and a new, more efficient drivetrain".
The launch is set for Fall 2023 for Europe and China, and then 2024 for North America. The vehicle has a manufacturer’s estimated potential range of up to 435 miles, as well as "a revised powertrain, spacious interior and premium technologies".
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The release says of the new drivetrain:
> _The new electric drivetrain has been optimized above all for energy efficiency. Depending on the battery size, Volkswagen estimates that, depending on trim, WLTP ranges of up to 435 miles (700 km) and DC fast charging capacities of up to about 200 kW will be possible. EPA-estimated range is not yet available and will be released closer to the North American launch date._
“With the ID.7 we are taking the next step in our electric offensive. The ID.7 offers a high level of comfort and long ranges. By 2026, we will offer the broadest electric vehicle range of all manufacturers in Europe—from the entry-level model for less than 25,000 euros up to the ID.7 as the new top model within the EV family. Our goal is to achieve an electric car share of 80 per cent in Europe by 2030. From 2033, Volkswagen will produce only electric vehicles in Europe," said Thomas Schäfer, CEO of Volkswagen Passenger Cars.
Kai Grünitz, Member of the Brand Board of Management responsible for Development said: “The ID.7 sets new efficiency standards on the basis of the modular electric drive matrix (MEB). We are aiming for a range of up to 700 kilometres2 on the WLTP standard. This is made possible by very good aerodynamics and by significantly increased efficiency in the areas of the powertrain and thermal management.”
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“The ID.7 is an extremely important model for the Volkswagen brand in Europe, North America and China. The ID.7 offers an attractive package that will excite both existing and new Volkswagen customers all over the world. With this Volkswagen, we are offering premium technologies that impress through their exclusivity, comfort and high degree of everyday usability," concluded Imelda Labbé, Member of the Brand Board of Management for Sales, Marketing and Aftersales.
You can watch the full launch here:
Tyler Durden (https://cms.zerohedge.com/users/tyler-durden)Mon, 04/17/2023 - 20:00
**Hospital Sues AG Over Probe Into Transgender Care Services**
Hospital Sues AG Over Probe Into Transgender Care Services
_By Kelly Gooch of Becker's Hospital Review (https://www.beckershospitalreview.com/legal-regulatory-issues/hospital-sues-ag-over-probe-into-transgender-care-services.html)_
_
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Children's Mercy Hospital in Kansas City, Mo., is suing Missouri Attorney General Andrew Bailey over his demand for records and testimony on gender-affirming care, _The Kansas City Star_ (https://account.kansascity.com/paywall/stop?resume=274345295) reported.
The lawsuit, filed April 14 in Jackson County, asks a judge to deny Mr. Bailey's investigative demands, saying the requests are a "burdensome overreach" despite "no allegations of wrongdoing," according to the newspaper.
Mr. Bailey's office made the demand for records and testimony in a letter sent in late March. In February, his office had already confirmed (https://www.beckershospitalreview.com/hospital-management-administration/missouri-agencies-investigating-transgender-center-at-st-louis-hospital.html) an investigation (https://ago.mo.gov/home/news/2023/02/09/missouri-attorney-general-andrew-bailey-confirms-launch-of-multi-agency-investigation-into-st.-louis-transgender-center-for-harming-hundreds-of-children) by Missouri agencies into whistleblower allegations against the Washington University Transgender Center (https://physicians.wustl.edu/specialties/lgbtq-health/washington-university-transgender-center) at St. Louis Children's Hospital. The whistleblower raised allegations that individuals at the transgender center had harmed hundreds of children each year, including by using experimental drugs on them.
Now, Mr. Bailey's office is also looking at Children's Mercy and made more than 50 requests for documents and information in his office's March 24 investigative demand letter to the hospital. Requests include all instances when child abuse was reported to law enforcement and questions of whether Children's Mercy prescribes hormone blockers for, or performs surgery on, transgender individuals, according to _The Kansas City Star_.
Madeline Sieren, a spokesperson for Mr. Bailey's office, said in a statement shared with the newspaper that Children's Mercy "is refusing to provide even a single document to explain its practices."
"That is very concerning," she said, adding that Mr. Bailey's office looks forward to "prevailing in this request for information and learning what is truly going on."
Children's Mercy argues that Mr. Bailey is not authorized to investigate and enforce medical standards under the state's merchandising practices act, and that complying with his requests would require the hospital to violate state and federal laws, including HIPAA, according to NBC affiliate _KSHB_ (https://www.kshb.com/news/local-news/childrens-mercy-hospital-sues-missouri-ag-andrew-bailey-over-investigation-into-transgender-care-services). The system also said in its suit that it has no connection to the Washington University center under investigation. Children's Mercy is not mentioned in the allegations against Washington University Transgender Center, according to _KSHB_.
**The lawsuit filed April 14 comes after Mr. Bailey announced (https://ago.mo.gov/home/news/2023/04/13/missouri-attorney-general-andrew-bailey-promulgates-emergency-regulation-targeting-gender-transition-procedures-for-minors) emergency rules targeting gender transition procedures for minors, which take effect April 27.** The emergency regulations include prohibiting gender-affirming care unless patients have at least 15 sessions with a mental health provider and have experienced at least three consecutive years of a _**"medically documented, long-lasting, persistent and intense pattern of gender dysphoria."**_
Tyler Durden (https://cms.zerohedge.com/users/tyler-durden)Mon, 04/17/2023 - 18:20
https://www.zerohedge.com/markets/hospital-sues-ag-over-probe-transgender-care-services
**Dramatic Video Shows Large Mob Looting Compton Gas Station**
Dramatic Video Shows Large Mob Looting Compton Gas Station
There has been a surge in lawlessness in recent weeks across several large progressive cities. The most recent incident occurred in Compton, a city in southern Los Angeles County, California, over the weekend when a large mob stormed a gas station.
Los Angeles-based KABC (https://abc7.com/compton-arco-gas-station-looting-los-angeles-county-vandalizing/13136901/) reported the "large mob" that "bum-rushed" the Arco gas station near Alondra Boulevard and Central Avenue on Saturday night stole thousands of dollars worth of merchandise. A dramatic video of the incident has gone viral on Twitter.
> Los Angeles, the city of fallen angels: A large mob of thug looters was caught on video looting a gas station in Compton and stealing thousands of dollars' worth of merchandise. https://t.co/P2LU3EHmTg (https://t.co/P2LU3EHmTg)pic.twitter.com/sfHv26RV5Z (https://t.co/sfHv26RV5Z)
>
> — Dane (@UltraDane) April 16, 2023 (https://twitter.com/UltraDane/status/1647691436396257281?ref_src=twsrc%5Etfw)
The Los Angeles County Sheriff's Department told the local news station that much of the store's merchandise was stolen in minutes.
Compton resident and customer of Arco, Greg Johnson, said:
> _"It's unbelievable. Unreal. I've never seen anything like that happen here."_
Commenting on the incident is the police advocacy nonprofit organization National Police Association which tweeted:
> **_"When your DA hates cops, loves criminals, and dismisses victims, and your state government is focused on de-incarceration this is what you get - Wild video shows large mob ransacking Arco gas station in Compton."_**
We've pointed out to readers that lawlessness is unfolding in multiple liberal cities this spring:
- _All Hell Breaks Out In Chicago As Hundreds Of Teenagers Wreak Havoc_ (https://www.zerohedge.com/political/all-hell-breaks-out-chicago-hundreds-teenagers-wreak-havoc)
- _Baltimore Mayor Calls For Citywide Curfew After All Hell Breaks Out_ (https://www.zerohedge.com/political/baltimore-mayor-calls-citywide-curfew-after-all-hell-breaks-out)
If possible, steer clear of liberal-run cities. The growing trend of lawlessness is worrisome.
Tyler Durden (https://cms.zerohedge.com/users/tyler-durden)Mon, 04/17/2023 - 18:00
https://www.zerohedge.com/political/shocking-video-shows-large-mob-looting-compton-gas-station
**Winner Takes All: The US-China Race To AI Mastery**
Winner Takes All: The US-China Race To AI Mastery
_Authored by James Gorrie via The Epoch Times,_ (https://www.theepochtimes.com/winner-takes-all-the-us-china-race-to-ai-mastery_5199237.html)
**_AI competition may prove to be the last technology race in the world..._**
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The AI-powered ChatGPT is intensifying the competition between the United States and China for artificial intelligence dominance.
**The stakes couldn’t be higher.**
For the sake of clarity, ChatGPT is the AI-driven tool that can create documents, reports, and other content with just a question or a few key words. It was created by OpenAI, a Bay Area technology firm started by tech standouts such as Elon Musk, Peter Thiel, and other tech luminaries.
The good news is how ChatGPT has brought the race for AI dominance back into the national conversation. The potential for AI technology to alter our world is difficult to overstate, even though ChatGPT technology itself barely scratches the surface of what AI technology can really do.
AI Will Transform Everything
Both the United States and China are fully engaged in efforts to master AI technology in its most powerful applications, which includes creating so-called “deep fakes” that put words into people’s mouths and put people in places they never were. Even those capabilities are mere shadows of what is to come.
In a few short years at most, the way we do even the most common tasks, from manufacturing goods, transporting them, and marketing them will be radically changed. Medicines, machines, and methodologies of inquiry will all be fundamentally different under AI. AI will change every activity or industry to which it is applied, and that includes rapid advancements in biotechnology and its transformational impact on warfare.
The AI Race Will Be the Last Race
The race for AI mastery isn’t the first time that nations have raced to achieve technological dominance in the world. The race to reach the moon comes to mind, but it was ideological almost as much as it was technological in its impact. The race to develop the first atomic bomb during the Second World War is a better comparison. Many observers believe that AI represents nothing less than a paradigm shift for the entire world and across the spectrum of industries and scientific applications.
That’s what makes AI a qualitatively different technology than all others. It will forever alter the relationship between humanity and machines. Humanity’s great innovation was the replication and transformation of the natural world into the mechanization and manipulation of it. It was only just over a century ago that mankind transitioned from horse to automobile, then on to flight, and then to space flight.
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_A visitor watches an AI sign on an animated screen at the Mobile World Congress (MWC), the telecom industry’s biggest annual gathering, in Barcelona. (Josep Lago/AFP via Getty Images)_
A concurrent shift occurred with the communication revolution, effectively compressing time and distance by the speed of light. This not only made the world smaller and events more impactful as they’re witnessed in real time, but it also shortened reaction times.
The AI revolution, however, is a quantum leap in technological advancement. AI is the actual dematerialization of machines and the separation of thought from humanity, neither of which has ever happened before. For the first time ever, mankind is threatened not just with destruction from a man-made device, but by our own creations replacing us altogether.
China’s Big Data and Surveillance
That’s no exaggeration. Philosopher Yuval Harari has warned of AI rendering humans as obsolete and “useless.” Harari isn’t the only one to see the red flags. Elon Musk has said that AI is “summoning the demon,” implying that once released, it will be beyond our control.
That remains to be seen. But both statements are a nod to the power that AI may well yield to those who first acquire the requisite level of skill and technology. Accordingly, Russian President Vladimir Putin observed that whoever masters AI will be master of the world.
He’s probably right, and the Chinese Communist Party has every intention of doing both.
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_A Chinese man plays online games at an internet cafe in Wuhan, China, in this file pho…
https://www.zerohedge.com/technology/winner-takes-all-us-china-race-ai-mastery
**Slew Of Cities Suing Kia, Hyundai For Making Easily-Stolen Vehicles**
Slew Of Cities Suing Kia, Hyundai For Making Easily-Stolen Vehicles
**At the same time big cities are going light on criminals, many of them are choosing to instead make an example out of the _manufacturers_ of stolen property.**
**At least eight cities have filed suit against Kia and Hyundai,** seeking unspecified damages over the manufacturers' production of cars lacking common anti-theft technology. The cities include Seattle, Milwaukee, Cleveland, San Diego and St. Louis. Individuals who bought or leased the cars are also suing the companies.
"Big corporations like Kia and Hyundai must be held accountable for endangering our residents and putting profit over people,” said (https://www.reuters.com/legal/st-louis-sues-hyundai-kia-over-car-thefts-joining-other-us-cities-2023-03-28/) St Louis Mayor Tishaura Jones.
In a suit filed in February, the city of Columbus, Ohio said (https://www.wsj.com/articles/cities-sue-hyundai-kia-after-wave-of-car-thefts-80c8d9fa?mod=e2tw), **“The security system for these cars is so substandard that it can be exploited by a middle-schooler.**” At risk (https://www.wsj.com/articles/cities-sue-hyundai-kia-after-wave-of-car-thefts-80c8d9fa?mod=e2tw) are Kias made from 2011 to 2021, and Hyundais built between 2016 and 2021.
Because millions of Hyundai and Kia vehicles lack a common anti-theft device called an "immobilizer," **they can be easily started with a USB cable and a screwdriver.**"Immobilizers were standard on 96% of U.S vehicles by 2015 but were standard on only 26% of 2015 model year Hyundai and Kia vehicles," reports the _Wall Street Journal_ (https://www.reuters.com/legal/st-louis-sues-hyundai-kia-over-car-thefts-joining-other-us-cities-2023-03-28/).
Thanks to **how-to videos circulated on TikTok** and other social media platforms, thefts of Hyundai and Kia vehicles positively skyrocketed in 2021.
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**Screenshot from a video showing how easy it is to steal many Kias and Hyundais with a USB cable** (
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For example, **Milwaukee saw Hyundai and Kia thefts soar from 895 in 2020 to 6,970 in 2021,** with other cities also reporting 8- and 10-fold increases.
To look at the risk in another way, **about one in every 10 Kias (https://oag.ca.gov/system/files/attachments/press-docs/AG%20Letter%20to%20Hyundia%20and%20Kia%20final_1.pdf) registered in Chicago was stolen in 2022.** Insurers have taken note -- and taken action: **State Farm and Progressive have each restricted and/or repriced their coverage** of affected Kia and Hyundai vehicles. Sales of policies have been limited in certain parts of the country.
Scrambling to address the fiasco, both manufacturers **distributed steering wheel locks** to police departments last year and encouraged them to give them to Kia and Hyundai owners. Now, they're **implementing a software fix** that has to be installed by a dealer. The software upgrade isn't available for all models yet -- and for some, it will never come.
Of course, **even after the upgrade is installed, your vehicle is still seen as a prime target.** To notify criminals that it's been upgraded, Hyundai is giving (https://www.nhtsa.gov/press-releases/hyundai-kia-campaign-prevent-vehicle-theft) customers window stickers. Ahead of your upgrade, you can also try bluffing: Enterprising people are selling (https://www.etsy.com/listing/1434305815/kia-hyundai-anti-theft-car-sticker?click_key=d1a84b21acb24b8046cdaca170fe816478e29257%3A1434305815&click_sum=d0775916&external=1&rec_type=ss&ref=pla_similar_listing_top-1&frs=1) stickers online.
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Tyler Durden (https://cms.zerohedge.com/users/tyler-durden)Mon, 04/17/2023 - 17:20
https://www.zerohedge.com/political/slew-cities-suing-kia-hyundai-making-easily-stolen-vehicles
**Biden EPA’s New Vehicle Emissions Standards Spark Backlash From Auto Industry, Republicans**
Biden EPA’s New Vehicle Emissions Standards Spark Backlash From Auto Industry, Republicans
_Authored by Nathan Worcester via The Epoch Times (https://www.theepochtimes.com/biden-epas-new-vehicle-emissions-standards-sparks-backlash-from-auto-industry-republicans_5190484.html?utm_source=partner&utm_campaign=ZeroHedge&src_src=partner&src_cmp=ZeroHedge) (emphasis ours),_
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_An employee works on an assembly line at startup Rivian Automotive's electric vehicle factory in Normal, Ill., on April 11, 2022. (Kamil Krzaczynski/Reuters)_ (
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**The Environmental Protection Agency’s (EPA’s) proposed emissions standards for automobiles and trucks are raising eyebrows in the auto industry and Washington alike.**
“EPA’s proposed emissions plan is aggressive by any measure. By that I mean **it sets automotive electrification goals in the next few years that are … very high**,” John Bozzella, president and CEO of the automaker trade organization Alliance for Automotive Innovation, wrote in an April 12 blog post (http://www.globalautomakers.org/posts/blog/how-to-think-about-epas-new-greenhouse-gas-rules).
The federal standards would (https://www.theepochtimes.com/biden-admin-unveils-rule-to-force-67-percent-of-cars-sold-to-be-electric-by-2032_5189758.html) tightly restrict emissions from new vehicles. That would effectively force automakers to boost their sales of electric vehicles (EVs).
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_Environmental Protection Agency Administrator Michael Regan testifies before the Senate Appropriations Committee in the Dirksen Senate Office Building on Capitol Hill on April 20, 2021. (Chip Somodevilla/Getty Images)_ (
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The agency’s proposal (https://www.epa.gov/newsreleases/biden-harris-administration-proposes-strongest-ever-pollution-standards-cars-and) anticipates that under the new standards, **two-thirds of new light-duty vehicles sold in the United States would be electric by the model year 2032.**
It also predicts that **46 percent of new medium-duty vehicles sold in the United States would be electric by that model year.**
EVs made up less than 6 percent of total new vehicle sales in 2022 (https://www.coxautoinc.com/market-insights/in-a-down-market-ev-sales-soar-to-new-record/). That’s an increased percentage relative to past years, even as total new vehicle sales were down to 13.8 million units from 17.3 million in 2018.
**The EPA claims that its standards would lower carbon dioxide emissions by 10 billion tons.**
Agency administrator Michael Regan described the standards as the “strongest ever” during an April 12 press conference.
“The proposal exceeds the administration’s own 50 percent electrification target,” Bozzella wrote, noting that his industry is “fully committed to an electric and low-carbon transportation future.”
Not Enough Chargers
Less than two weeks ago, the IRS and the Treasury Department issued complex guidance (https://www.theepochtimes.com/us-electric-vehicle-tax-credits-get-tougher-to-navigate_5164954.html) on EV tax credits that could make it harder for consumers to benefit from those financial incentives.
Bozzella, who began his career (https://www.linkedin.com/in/john-bozzella/details/experience/) working for then-New York Mayor David Dinkins, a Democrat, said the guidance would reduce the number of vehicles qualifying for tax credits. That would seem to disincentivize EV adoption even as the administration steps up other measures intended to facilitate more EV purchases.
Bozzella also said the 100,000 public, nonproprietary EV chargers in the United States are “not enough.”
An April 6 memo (https://www.autosinnovate.org/posts/communications/Auto%20Perspective%20on%20Coming%20EPA%20Emissions%20Rules.pdf) from the automotive alliance stated that **electrification would take a “massive, 100-year change to the U.S. industrial base and the way Americans drive.”**
Groups outside of the auto industry also voiced concerns.
Will Hild, executive director of Consumers’ Research, a consumer protection organization, said the standards are “the same thing BlackRock and ESG extremists like Larry Fink are doing with U.S. pensions and retirement dollars.”
“ **The American people won’t stand for it,**” he said.
_Read more **here...** (https://www.theepochtimes.com/biden-epas-new-vehicle-emissions-standards-sparks-backlash-from-auto-industry-republicans_5190484.html?ut…
**New Mexico Researchers Transform Dead Birds Into Drones**
New Mexico Researchers Transform Dead Birds Into Drones
Followers of the "Birds Aren't Real" conspiracy theory, which claims the birds in the sky are government surveillance drones, may find some validation as a new research project intends to transform dead birds into drones.
Reuters (https://www.reuters.com/lifestyle/science/dead-birds-get-new-life-new-mexico-researchers-develop-taxidermy-bird-drones-2023-04-13/) reported a team of scientists at the New Mexico Institute of Mining and Technology in Socorro are taking dead birds and converting them into drones to study flight. While the bird drones might not be spying, it provides some validity to supporters of the Birds Aren't Real movement.
> _"We came up with this idea that we can use ... dead birds and make them (into) a drone," said Dr. Mostafa Hassanalian, a mechanical engineering professor who is leading the project._
>
> _"Taxidermy bird drones - currently being tested in a purpose-built cage at the university - can be used to understand better the formation and flight patterns of flocks. That, in turn, can be applied to the aviation industry," said Hassanalian._
>
> _"If we learn how these birds manage ... energy between themselves, we can apply (that) into the future aviation industry to save more energy and save more fuel," he said._
The Birds Aren't Real folks will have a blast with this picture of one of Hassanalian's taxidermy bird drones.
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Hassanalian told Bussiness Insider that the Birds Aren't Real movement didn't inspire his research.
Tyler Durden (https://cms.zerohedge.com/users/tyler-durden)Mon, 04/17/2023 - 16:40
https://www.zerohedge.com/technology/new-mexico-researchers-transform-dead-birds-drones
**Shorts Steamrolled As Late Day Squeeze Sends Stocks To Session High, VIX Plummets**
Shorts Steamrolled As Late Day Squeeze Sends Stocks To Session High, VIX Plummets
First, some context from Goldman's Prime Brokerage: "our franchise flows have shifted to local selling of tech this week and Nasdaq is only up in two of the past ten sessions ( _**also note that it stands exactly where it stood in ... the spring of 2021).**_"
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In other words, might as well have sold in May _**of 2021**_ and gone away for two years, enjoying all the hikes, golfing and trips and you'd still be right where you left off. Instead, you overtraded every market move and lost money.
Today was a micro snapshot of this entire dynamic: after some terrible results from large custody bank State Street, at a time when everyone is on edge about anything negative news out of banks, which sent State Street shares plunging by as much as 18%, the most intraday since March 2020...
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... following the sharp early selloff, we say bank stocks gradually recover all losses before eventually trading near session highs by the close, as the massive hedge fund short overhang we discussed last week (https://www.zerohedge.com/markets/why-non-stop-squeezes-stubborn-hedge-funds-are-most-short-sp-12-years)remains intact.
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... and leads to a powerful rally every time a selling thrust is exhausted, and today was no difference. And speaking of massive short overhangs, after we noted last week that the number of non-commercial net specs (i.e. hedge funds) shorting the S&P is at an 11 year high, we have barely budged..
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... which is also why stocks took the escalator down, and the short squeeze elevator up closing at session highs and squeezing another round of shorts in the process...
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... a reversal which the 0DTE crew orchestrated starting at exactly 2pm ET with a market-leading spike in delta, driven by a surge in call buying and put selling, a market inflection which was captured vividly in this chart from our SpotGamma partners (https://www.zerohedge.com/spotgamma)...
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?itok=tANahLsG)_Source:_ (?itok=tANahLsG) _Spotgamma (https://www.zerohedge.com/spotgamma)_
... which also is why the VIX was crushed today, as puts were unwound in a frenzy, and tumbled below 17 to the level where it was back in Jan 2022 when stocks were at all time highs!
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And while banks promptly recovered and joined most other sectors in the green, the only sector that was lower was energy...
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... tracking the renewed weakness in oil...
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... where unlike stocks, shorts once again have _**zero**_ fear of a squeeze, at least no a financial one - indeed, while all financial actors in energy are pressing their shorts having picked this asset class as the best expression of rising recession bets - bets which are encouraged by the senile occupant of the White House, because we learned today that another 1.6 million ba…
**Competition And Costs Are Threatening The US LNG Boom**
Competition And Costs Are Threatening The US LNG Boom
_Authored by Tsvetana Paraskova via OilPrice.com,_ (https://oilprice.com/Energy/Energy-General/Competition-And-Costs-Are-Threatening-The-US-LNG-Boom.html)
- More than a dozen proposed LNG export projects in the United States could stall due to cost inflation and increased competition to secure financing.
- Demand for LNG has soared since Russia invaded Ukraine and buyers spurned Russian pipeline gas.
- Developers could launch $100 billion worth of new LNG projects over the next five years, but securing long-term deals and financing is a major hurdle.
Cost inflation and increased competition to secure long-term buyers and financing could hold back some of the more than a dozen proposed LNG export projects in the United States.
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Demand for LNG globally is currently high, as European countries rush to build import terminals and purchase liquefied natural gas to offset the very low, or complete lack of, Russian pipeline gas supply.
Despite the surge in LNG demand and the abundance of natural gas in the United States, America’s next LNG export boom could stall as costs have surged and financing has become more complicated with the higher interest rates.
_**“It’s dramatically more expensive,”**_ Charif Souki, who founded Cheniere Energy and was the CEO of what is now the top U.S. LNG exporter until 2015, told the Financial Times (https://www.ft.com/content/e7f3681f-3f0a-40de-ab65-65f62c7d6acb).
_**“There are fewer and fewer construction companies that can actually handle these kinds of loads,”**_ said Souki, who now leads Tellurian, the developer of the Driftwood project that has hit snags in its ability to raise funds and secure major long-term customers in recent years.
Apart from soaring project costs and rising interest rates, U.S. LNG export project developers face the issue with many buyers’ reluctance to commit to 20-year-long supply deals.
Developers of U.S. LNG export facilities could launch $100 billion (https://oilprice.com/Energy/Natural-Gas/EU-Energy-Crisis-May-Lead-To-100-Billion-In-New-US-LNG-Projects.html) worth of new plants over the next five years as high prices and the need for energy security create strong momentum for long-term LNG demand and contracts, energy consultancy Wood Mackenzie said in a report (https://www.woodmac.com/press-releases/us-could-see-%24100b-of-new-lng-projects-in-the-next-five-years/) earlier this year.
**Yet, price volatility and the cost and financing issues could mean that fewer projects could see the start of operations this decade than previously thought.**
New U.S. and Canadian LNG export projects show signs of accelerating but volatile natural gas prices are making bets on future supply and demand difficult (https://oilprice.com/Energy/Natural-Gas/North-American-LNG-Projects-Plagued-By-Price-Volatility.html), industrial market intelligence provider Industrial Info Resources (IIR) said in research last month.
Tyler Durden (https://cms.zerohedge.com/users/tyler-durden)Mon, 04/17/2023 - 16:20
https://www.zerohedge.com/energy/competition-and-costs-are-threatening-us-lng-boom
**US Banks Lost Money On Mortgages For The First Time Since The MBA Began Keeping Records**
US Banks Lost Money On Mortgages For The First Time Since The MBA Began Keeping Records
US banks **lost money on mortgages in 2022**, according to a report (https://www.mba.org/news-and-research/newsroom/news/2023/04/06/imb-production-profits-falls-to-series-low-in-2022) from the Mortgage Bankers Association (MBA), which noted that the average loss was **$301 on each loan originated** that year, vs. an average profit of $2,339 per loan in 2021.
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"The rapid rise in mortgage rates over a relatively short period of time, combined with extremely low housing inventory and affordability challenges, meant that both purchase and refinance volume plummeted," said Marina Walsh, MBA’s vice president of industry analysis, as reported by _USA Today_ (https://www.usatoday.com/story/money/personalfinance/real-estate/2023/04/13/banks-making-loss-on-mortgages/11655704002/). "The stellar profits of the previous two years dissipated because of the confluence of declining volume, lower revenues and higher costs per loan."
The MBA has been tracking these statistics since 2008.
> _**Mortgage rates more than doubled in 2022, briefly touching 7% in October.** Rates have since come down slightly._
>
> _Loan volumes in 2022 were 50% down compared with 2021. Volume was $2.6 billion (8,371 loans) per company in 2022, down from $4.9 billion (16,590 loans) per company in 2022._
>
> _Meanwhile, **producing a loan got more expensive for lenders**. The total costs including commissions, compensation and equipment increased to $10,624 per loan in 2022, up from $8,664 in 2021. -USA Today_
"Companies could not adjust their capacity fast enough," said Walsh. "The number of production employees declined, but not at the same pace as origination volume. As a result, productivity in 2022 fell to a low of 1.5 closed loans a month per production employee."
The report also notes that **refinancing applications were also down**, as most homeowners have loans with interest rates below 4%. By dollar volume, the refinancing share of total originations dropped 20% in 2022 from 46% in 2021.
Meanwhile, the average loan balance for first mortgages reached a **high of $323,780 in 2022**, up from $298,324 in 2021 - the largest single-year increase in the history of the report.
Tyler Durden (https://cms.zerohedge.com/users/tyler-durden)Mon, 04/17/2023 - 15:40
**The Military-Industrial Stock-Buyback Complex**
The Military-Industrial Stock-Buyback Complex
_Authored by Matt Stoller via 'BIG by Matt Stoller' Substack,_ (https://mattstoller.substack.com/p/the-military-industrial-stock-buyback)
_**Why is the US military ceding ground to China? As a new DOD report shows, big defense contractors are middlemen whose main purpose is stock buybacks and dividends.**_
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Today I’m writing about an astonishing report (https://www.acq.osd.mil/asda/dpc/pcf/docs/finance-study/FINAL%20-%20Defense%20Contract%20Finance%20Study%20Report%204.6.23.pdf) that came from the Pentagon this week on how Wall Street has wrecked the defense industrial base. This chart, which shows stock buybacks are up while research and development is down, is the key finding.
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_“Despite improving profit margins and cash generation for defense contractors in 2010-2019 vs 2000-2009, the share of contractor spending on Independent Research and Development (IR&D) and capital expenditures declined while cash paid to shareholders in dividends and share_ repurchases increased by 73% _” \- DOD Contract Finance Study Report, April 2023_
Before I get to that, I have a few announcements. First, there’s some good BIG-related news. Montana Congressman Ryan Zinke is demanding an investigation (https://zinke.house.gov/media/press-releases/zinke-calls-investigation-recreationgov-contract-glacier-national-park) into Booz Allen’s Recreation.gov contract and the consulting giant’s control over national parks. As you may recall, I broke the story (https://mattstoller.substack.com/p/why-is-booz-allen-renting-us-back) about Recreation.gov late last year, and the Wall Street Journal did a follow-up (https://www.wsj.com/articles/national-park-fees-booz-allen-68d4d6d8) on it last week. There’s also a class action complaint against Booz Allen. So yay.
Second, I’ll now be sending occasional shorter missives to paid subscribers. On Wednesday, I sent out a shorter quick read (https://mattstoller.substack.com/p/quick-read-good-news-on-drug-price) on how Wall Street expects action against drug middlemen. Don’t worry, I’ll still be writing the longer stuff. If you want access to all the writing and the BIG Discord server, you can subscribe here (https://mattstoller.substack.com/subscribe).
And now…
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On the eve of Germany’s invasion of Poland in 1939, America was woefully unprepared for a conflict that everyone thought would come. Most strategists knew the nation that could produce more with its industrial base would probably win, and yet even so, the American business world was oblivious. 85% of U.S. factory machinery dated from the 1920s or earlier, and some predated the Civil War.
And the deeper one looked the worse the situation seemed. The next war would be fought at the cutting edge of technology, which is to say, with airplanes. And an air force required the technological marvel of aluminum, which you could only get from the longest-lasting industrial monopoly in U.S. history, the Aluminum Company of America, or Alcoa. Aluminum, light and strong, was also immensely energy-intensive to create, and Alcoa organized production of 100% of it.
The President of Alcoa, Arthur Davis, a hoarder of talent, tools, and inputs like bauxite, wasn’t worried. He had promised there would be no shortage, that Alcoa, modern and sophisticated as it was, could fulfill all military and civilian demand, and then some. Yet even before the entry of America into the war, Davis was proven wrong. Aerospace firms just couldn’t get their hands on enough of the wonder metal.
After America joined the fight, the shortage got worse. “Prime Minister Churchill said of the Royal Air Force that never in history did so many owe so much to so few,” wrote investigative journalist I. F. Stone. “It might be said of us that never did a people do so little with so much,” he added. Politicians were furious at Alcoa, as were military leaders. FDR demanded 50,000 airplanes a year, and the U.S. delivered that, and more. But to do so, the national security apparatus, which has always lurked in the background of monopoly power questions, had to help break Alcoa’s power, through a mammoth antitrust su…
https://www.zerohedge.com/geopolitical/military-industrial-stock-buyback-complex
**The Fed Cannot Fix Today's Energy Inflation Problem**
The Fed Cannot Fix Today's Energy Inflation Problem
_Authored by Gail Tverberg via Our Finite World blog,_ (https://ourfiniteworld.com/2023/04/05/the-fed-cannot-fix-todays-energy-inflation-problem/)
There is a reason for raising interest rates to try to fight inflation. This approach tends to squeeze out the most marginal players in the economy. Such businesses and governments tend to collapse, as interest rates rise, leaving less “demand” for oil and other energy products. The institutions that are squeezed out range from small businesses to financial institutions to governmental organizations. The lower demand tends to reduce inflationary pressure.
The amount of goods and services that the world’s economy can produce is largely determined by fossil fuel supplies, plus our ability to use “complexity” in many forms to produce the items that the world’s growing population requires. Adding debt helps add complexity of various types, such as more international trade, more advanced education, and more specialized tools. For a while, the combination of growing energy supplies and growing complexity have helped pull economies along.
Unfortunately, the world’s oil supply is no longer growing. Without an adequate oil supply, it becomes difficult to maintain complexity because complex solutions, such as international trade, require adequate oil supplies. Inasmuch as we seem to be reaching energy and complexity limits, nothing the regulators try to do to change the debt and money supplies–even reeling them back in–can fix the underlying oil (and total energy) problem.
I expect that the rich parts of the world, including the US, Europe, and Japan, are in line to be adversely affected by high interest rates this time. With their high levels of complexity, they are among the most vulnerable to disruption when there is not enough oil to go around.
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_Figure 1. World oil consumption divided into consuming areas, based on data of BP’s 2022 Statistical Review of World Energy. Europe excludes Estonia, Latvia, Lithuania, and Ukraine._
The problem I see is that rich countries expect to maintain service economies that are fed by huge streams of manufactured goods and raw materials from poorer countries. This pattern appears unsustainable to me, in a world with falling exports because of energy problems.
I expect a significant change in the trading of goods and services, starting as soon as the next few months. Major financial changes may be ahead, fairly soon, as well. In this post, I will try to explain these and related ideas.
**\[1\] Growing debt is a temporary substitute for growing energy supply of the right kinds.**
Economists seem to believe that the economy grows because of an invisible hand (https://www.investopedia.com/terms/i/invisiblehand.asp). I believe that the economy grows because of a growing supply of energy products of the right kinds, together with a growing supply of other raw materials, and a growing supply of human labor. The economy grows in keeping with the laws of physics.
Debt does help provide an extra pull, however, because it enables growing “complexity.” Even in the days of hunters and gathers, it was helpful for people to work together and share the benefit of their labor. A type of short-term debt results from the delayed benefit of working together, even if the delay is only a few hours.
In modern times, debt can help build a factory. The factory can provide more/better output than individual people working by themselves using available resources. There needs to be a way of paying for the delayed benefit of the human labor involved in the whole chain of events that leads to the finished output. Growing debt can help pay workers, long before the benefit of the factory becomes available.
Debt can also make high-priced goods more affordable. A car, or a home, or a college education is more affordable if it can be paid for in installments, as income becomes available to pay for it.
**\[2\] Diminishing returns on added complexity is one issue that puts an end to the ability to grow debt.**
As an example, we are slowly discovering that it doesn’t make sense to provide everyone with a university education. Yes, advanced education is of benefit to a percentage of the population, but, in general, there are not enough jobs that pay sufficiently well for it to make economic sense to provide advanced education for everyone who would like to attend college. If debt is provided to finance everyone who applies for advanced education, there are likely to be many loans that can’t be repaid.
As another example, long supply lines can provide cost savings for a manufacturer, but if there is a disrupti…
https://www.zerohedge.com/energy/fed-cannot-fix-todays-energy-inflation-problem
**"It's Going To Be Ugly": Commercial Real Estate Predictions Turn Dire**
"It's Going To Be Ugly": Commercial Real Estate Predictions Turn Dire
Over the past several months we've seen a series of progressively negative headlines over **commercial real estate** \- predictions becoming more and more dire.
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- Hartnett: Commercial Real Estate Is The Next Shoe To Drop (https://www.zerohedge.com/markets/hartnett-commercial-real-estate-next-shoe-drop) (subscribers only, really all you need to know...)
- Echoes Of New Century's Collapse Amid Sudden Firesale Of Real Estate Loans As Morgan Stanley Sees 40% Downside (https://www.zerohedge.com/markets/echoes-new-centurys-collapse-amid-sudden-firesale-real-estate-loans-one-bank-sees-40) (subscribers only)
- Commercial Real Estate Faces Perfect Storm: The Demise Of Downtown Office Buildings (https://www.zerohedge.com/personal-finance/commercial-real-estate-faces-perfect-storm-demise-downtown-office-buildings)
- A Record 30% Of San Francisco Office Space Is Vacant (https://www.zerohedge.com/economics/salesforce-ditches-last-san-francisco-office-commercial-vacancy-rate-hits-all-time-high)
Blackstone, of course, is waiting with dry powder for the "largest ever" real estate drawdown (https://www.zerohedge.com/markets/blackstone-raises-30-billion-largest-ever-real-estate-drawdown-fund-capitalize-commercial).
Now, according to one CEO of a real estate investment firm, **things could get as bad as what was seen during the 2008 financial crisis**.
"Unfortunately in the situation we're in, things need to bottom out, and they haven't bottomed out yet," said Patrick Carroll, the CEO of the real estate investing firm Carroll, in a Thursday interview with _CNBC_, adding that **while some areas of CRE could remain intact**, such as multifamily housing, **areas such as offices and hotels could be "destroyed,"** as the sector grapples with tighter credit conditions and a cascade of debt maturities.
"It's going to be ugly. It's going to be at least as bad as '08, '09," he warned.
One of the core issues is that commercial mortgage debt held by banks will need to be refinanced in **much tougher conditions** in the coming years - as around 80% of outstanding commercial property debt is held by small and medium-sized banks.
"Sellers are not realizing how much their properties have lost value, and they're not willing to dump their properties yet because they haven't felt enough pain. They're about to start feeling pain. These lenders are screwed," said Carroll, who noted that $1.5 trillion in commercial real estate debt will come due in the next three years - which will either need to be refinanced or renegotiated.
And with the collapse of SVB and other small banks feeling the pressure, **many will be less inclined to lend** without doing so at much higher interest rates than the commercial real estate market is used to.
Tyler Durden (https://cms.zerohedge.com/users/tyler-durden)Mon, 04/17/2023 - 14:22
https://www.zerohedge.com/economics/its-going-be-ugly-commercial-real-estate-predictions-turn-dire
**Leaked Document Shows American Smart Bombs Are Failing In Ukraine**
Leaked Document Shows American Smart Bombs Are Failing In Ukraine
American-made smart bombs are failing in Ukraine, based on successful Russian electronic jamming measures, according to a Pentagon document connected to alleged leaker Jack Teixeira.
The highly-classified document not only reviews use of effective Russian countermeasures to make the smart bombs ineffective, but also says that in some cases technical problems are resulting in failure to detonate.
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A Biden administration defense aid program has involved sending the Joint Direct Attack Munition-Extended Range (JDAM-ER) to Ukraine in order to turn unguided bombs into GPS guided "smart bombs" capable of hitting targets over 50 miles away.
According to _Politico_ (https://www.politico.com/news/2023/04/12/russia-jamming-u-s-smart-bombs-in-ukraine-leaked-docs-say-00091600):
> _A larger problem is that Russia is using GPS **jamming to interfere with the weapons’ targeting process**, according to the slide and a separate person familiar with the issue who’s not in the U.S. government. American officials believe Russian jamming is causing the JDAMs, and at times other American weapons such as guided rockets, to miss their mark._
>
> _"I do think there may be concern that the Russians may be jamming the signal used to direct the JDAMs, which would answer why these munitions are not performing in the manner expected and how they perform in other war zones," said Mick Mulroy, a former Pentagon official and retired CIA officer._
The document mentions that "1,000 arming lanyards" were approved for Ukrainian forces, suggesting that over 1,000 of the smart bomb kits will be sent.
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Far from being the 'game changer' that Kiev hoped for, other major US-provided systems are failing as well. The leaked Pentagon documents elsewhere make mention of M270 and HIMARs rockets being thwarted by Russian forces' GPS jamming tactics. Some documents among the trove of leaks have consistently shown that Ukraine's military is generally beset by ammunition and weapons shortages, despite the billions in defense aid pledged from the West.
Tyler Durden (https://cms.zerohedge.com/users/tyler-durden)Mon, 04/17/2023 - 14:20
https://www.zerohedge.com/military/leaked-document-shows-american-smart-bombs-are-failing-ukraine
**Greenwald: The Government Is Abusing Secrecy Powers**
Greenwald: The Government Is Abusing Secrecy Powers
_Authored by Steve Watson via Summit News,_ (https://summit.news/2023/04/17/greenwald-the-government-is-abusing-secrecy-powers/)
**Journalist Glenn Greenwald charged Sunday that the latest intelligence leaks have shown that “The U.S. government abuses its secrecy powers. They essentially label every document ‘classified information’.”**
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“The government always claims that people are endangered when their secrets get out, that’s not this case,” the journalist told Fox News host Howard Kurtz.
Greenwald noted that when he was working on the Snowden files, there were banal documents about vacations and parking credentials for government employees that were all classified.
“A lot of times what the government says is top secret or classified isn’t harmful to leak at all. What they often are though are secrets that the public has a right to know,” Greenwald urged.
“It’s the job of the FBI to catch people who leak classified information, \[but\] as a journalist, those are the people we cultivate, those are the people we rely on to do our jobs,” Greenwald further noted, adding that “Every single day the New York Times, the Washington Post, NBC News, Fox has stories along the lines of ‘senior officials told us XYZ’ and they claim that this information is classified.”
“The difference here is that this person did not give the information to the New York Times, The Washington Post, and so bizarrely they went on a hunt to find him and out him,” Greenwald said, adding “I think it’s incredibly bizarre for media corporations to unearth sources and leakers.”
Greenwald also noted that the media feels a pressure to insert itself into such cases in order to stay relevant.
“I think there’s a growing recognition on the part of these sources that they don’t need the media anymore, and they don’t trust the media,” he said.
Watch:
> I had a good conversation with @HowardKurtz (https://twitter.com/HowardKurtz?ref_src=twsrc%5Etfw) on Fox earlier today about the key issues raised by the leak of these classified documents, what these documents reveal, how the corporate media has treated them and the accused leaker, and the implications of recent leaking trends: pic.twitter.com/mLvCQzJ6jj (https://t.co/mLvCQzJ6jj)
>
> — Glenn Greenwald (@ggreenwald) April 16, 2023 (https://twitter.com/ggreenwald/status/1647641424245018624?ref_src=twsrc%5Etfw)
Related:
> Video: Carlson Exposes How Establishment Media Is Desperate To Help Cover Up Info From Intel Leaks (https://summit.news/2023/04/14/video-carlson-exposes-how-media-wants-to-help-cover-up-information-from-intel-leak/)
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Tyler Durden (https://cms.zerohedge.com/users/tyler-durden)Mon, 04/17/2023 - 14:00
https://www.zerohedge.com/geopolitical/greenwald-government-abusing-secrecy-powers
**Key Events This Week: It's All About Earnings As Macro Calendar Eases**
Key Events This Week: It's All About Earnings As Macro Calendar Eases
Looking at the key events this week, today will see the US debt ceiling rise up the agenda again since House Speaker Kevin McCarthy is giving a speech at the New York Stock Exchange that’s expected to cover the Republicans’ position on the issue. As a reminder, the US is expected to come up against the debt ceiling again this summer (or even sooner (https://www.zerohedge.com/markets/why-weeks-tax-data-could-lead-much-earlier-debt-ceiling-crisis)), and the Republicans have said they want concessions like spending cuts in return for passing an increase. Since the Republicans now have a majority in the House of Representatives, at least some of them will need to be on board to pass an increase. The situation has several echoes to the last major fight over the debt ceiling in 2011, when there was also a Democratic president negotiating with a Republican majority in the House. Although an agreement was eventually reached, that episode coincided with a noticeable slump in the S&P 500 alongside a sharp decline in consumer confidence.
In the meantime, there are a few highlights ahead on the data side. Tomorrow sees the release of China’s Q1 GDP growth, where DB economists are expecting an above-consensus print of +4.5% year-on-year. Then on Friday we’ll get the April flash PMIs from around the world, which will offer an initial indication of how the global economy has been performing into Q2. Otherwise, inflation will remain in the spotlight, with this week seeing the March CPI releases from Japan and the UK. In Japan, economists expect core-core inflation excluding fresh food and energy to tick up slightly to 3.6%, up from 3.5% the previous month. And in the UK, inflation is anticipated to decline to 9.7%, down from 10.4% in February.
Here is a summary of the key US events:
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The final big highlight this week will be earnings season, which is increasingly ramping up now as 59 companies in the S&P 500 will be reporting. Some of the financials will be of particular interest given the market turmoil last month, and we’ll get results from Bank of America, Morgan Stanley, Goldman Sachs and Charles Schwab this week. Elsewhere, some of the highlights will include Tesla, Netflix, IBM and Johnson & Johnson.
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In its preview of the week ahead, Rabobank writes that the market will focus mostly on US earnings season "because if these go down, the implication will be that unemployment must soon rise, and then US rates fall, and then P/E ratios are not the issue they are soon to be otherwise, apparently." Hence, will the tone be that good news is bad news and bad news is good news? Or will it be good news is good news, and there is no recession fear? It’s hard to project the collective mind of a market focused on the here and now, the never-never, and quarterly returns, rather than unfolding geopolitical reality.
However, in data terms, this is what the global calendar looks like:
- **Monday:** New Zealand food price inflation for March opened the week, coming in at +0.8% m-o-m. This follows on from a 1.5% gain in February, which saw annual food price inflation hit its highest level since 1989. It’s likely that further food inflation lays ahead, as the longer-run effects of Cyclone Gabrielle continue to be felt in the coming months. No change in China’s 1-year MTLR rate is expected from 2.75% today. Later, the Empire Manufacturing index for April will be released in the US. Expectations are -18, a substantial improvement over March’s -24.6. A beat would confirm a trend of improvement following last week’s strong industrial production data.
- **Tuesday:** The minutes of the RBA’s April policy meeting will be first up. This may provide further insight into Governor Lowe’s comments a fortnight ago that the pause doesn’t necessarily mean the RBA has finished hiking. Stronger than expected jobs figures released last week certainly lend some weight to the idea that the RBA isn’t done yet, as does the building momentum in house prices across Aussie capital cities. Afterwards we will see Q1 GDP data for China. This is expected at 3.9% y-o-y, well up on the previous read of 2.9% and accelerating toward China’s 5% target for 2023. Later in the day we have a speech from the Fed’s Bowman, as well as the ZEW survey in Germany: improved readings for both the current situation and future expectations are anticipated here. CPI data in Canada foll…
https://www.zerohedge.com/markets/key-events-week-its-all-about-earnings-macro-calendar-eases