Friday, June 30, 2023

Supreme Court Strikes Down Biden Student Loan Forgiveness Program

 Supreme Court Chief Justice John Roberts speaks during impeachment proceedings in the Senate chamber at the U.S. Capitol in Washington on Jan. 30, 2020. (Senate Television via Getty Images)

Supreme Court Chief Justice John Roberts speaks during impeachment proceedings in the Senate chamber at the U.S. Capitol in Washington on Jan. 30, 2020. (Senate Television via Getty Images) 

The Supreme Court voted 6–3 on June 30 to strike down President Joe Biden’s controversial plan to partially forgive student loans.

The six conservative justices voted to invalidate the program in the closely watched case, while the three liberal justices voted to uphold it.

Biden unveiled the plan in August 2022 in a move critics decried as a constitutionally dubious attempt to help Democrats in November 2022 congressional elections. The Congressional Budget Office said the plan could cost about $400 billion, but the Wharton School estimates the price tag could blow past $1 trillion.

Biden denounced the ruling as wrongheaded. “This fight is not over,” he said.

On Feb. 28, the Supreme Court heard two related cases back-to-back dealing with the program, Biden v. Nebraska (court file 22-506) and Department of Education v. Brown (court file 22-535).

The Biden v. Nebraska appeal springs from a lawsuit Arkansas, Iowa, Kansas, Missouri, Nebraska, and South Carolina brought against the federal government.

The other appeal arises from a lawsuit filed by two borrowers who say the department improperly denied them the opportunity to participate in the public commenting process and that they would have urged the agency to provide greater debt relief.

In Biden v. Nebraska, Chief Justice John Roberts wrote the court’s majority opinion (pdf). It was joined by Justices Clarence Thomas, Samuel Alito, Neil Gorsuch, Brett Kavanaugh, and Amy Coney Barrett.

“Last year, the Secretary of Education established the first comprehensive student loan forgiveness program, invoking the Higher Education Relief Opportunities for Students Act of 2003 (HEROES Act) for authority to do so.

“The Secretary’s plan canceled roughly $430 billion of federal student loan balances, completely erasing the debts of 20 million borrowers and lowering the median amount owed by the other 23 million from $29,400 to $13,600.  … Six States sued, arguing that the HEROES Act does not authorize the loan cancellation plan. We agree.”

“The secretary’s plan has ‘modified’ the cited provisions [in the statute] only in the same sense that the French Revolution ‘modified’ the status of the French nobility—it has abolished them and supplanted them with a new regime entirely,” Roberts said, paraphrasing a comment he made during oral arguments on Feb. 28.

Justice Barrett filed a concurring opinion. In the other case, Department of Education v. Brown, Justice Samuel Alito wrote the court’s unanimous decision that threw out the two borrowers’ claim for a lack of legal standing.

These borrowers who did not qualify for maximum relief had argued that the department failed to follow “mandatory procedures known as (1) negotiated rulemaking and (2) notice and comment.”

The borrowers “do not want debt forgiveness under the HEROES Act, which they claim is unlawful. They want debt forgiveness under the [Higher Education Act of 1965].

But “[n]othing the Secretary has done deprives them of a ‘chance’ to seek that result. Because respondents cannot meaningfully connect the absence of loan relief under the HEA to the adoption of the [debt relief] Plan, they have failed to show that their injury is fairly traceable to the Plan.”

Because the respondents lack standing, the Supreme Court vacated the judgment of the U.S. District Court for the Northern District of Texas and remanded the case “with instructions to dismiss.”The loan forgiveness program was justified by reference to the twin emergencies the Trump administration declared in March 2020 to combat the COVID-19 virus. The national emergency and the public health emergency enabled federal agencies to exercise expansive powers in managing the government’s pandemic response but on May 11 Biden ended those emergencies.

In the other case, Department of Education v. Brown, Justice Samuel Alito wrote the court’s unanimous decision (pdf) that threw out the two borrowers’ claim over a lack of legal standing.

The loan forgiveness program was justified by reference to the twin emergencies the Trump administration declared in March 2020 to combat the COVID-19 virus. The national emergency and the public health emergency enabled federal agencies to exercise expansive powers in managing the government’s pandemic response, but on May 11 Biden ended those emergencies.

The Biden administration separately put a pause on student loan payments and interest during the recent pandemic at an estimated cost of $100 billion but then claimed last year that the pandemic gave it emergency authority under the law to proceed with partial loan forgiveness.

The pause expires in the fall. Interest restarts in September and loan payments resume in October, according to the government. About 26 million people reportedly applied under the program before courts blocked it last year. Of that total, 16 million are said to have been approved before the government stopped accepting applications.

About 26 million people reportedly applied under the program before courts blocked it last year. Of that total, 16 million are said to have been approved before the government stopped accepting applications.

The U.S. Department of Education claims that it has the authority under the HEROES Act to move forward with debt relief on an emergency basis, which would cancel as much as $20,000 in loan principal for 40 million borrowers.

But lawmakers involved in the passage of the HEROES Act have said it was enacted after the 9/11 terror attacks to provide student loan relief to military service members and their families, not to cancel debts en masse.

The original version of the legislation in 2001 allowed the department to grant debt relief as a result of a “national emergency” related to a “terrorist attack,” but the 2003 version removed the “terrorist attack” qualifier.

Biden vetoed a congressional measure earlier this month that sought to block the program, which is premised on twin emergencies the Trump administration declared in March 2020 to combat the COVID-19 virus.

This is a developing story. This article will be updated.

Thursday, June 29, 2023

Supreme Court Strikes Down Race-Based Admissions at Colleges

Chief Justice of the United States John Roberts attends the State of the Union address on February 7, 2023 in the House Chamber of the U.S. Capitol in Washington, DC. (Jacquelyn Martin-Pool/Getty Images)

Chief Justice of the United States John Roberts attends the State of the Union address on February 7, 2023 in the House Chamber of the U.S. Capitol in Washington, DC. (Jacquelyn Martin-Pool/Getty Images) 

The Supreme Court struck down on a 6-3 vote the use of racially discriminatory admissions policies at U.S. colleges. The decision issued on June 29 ends the use of so-called affirmative action in higher education, a longtime goal of conservatives.

Chief Justice John Roberts wrote (pdf) that for too long universities have “concluded, wrongly, that the touchstone of an individual’s identity is not challenges bested, skills built, or lessons learned but the color of their skin. Our constitutional history does not tolerate that choice.”

But in a footnote, Roberts carved out an exception for military academies. Because military academies did not participate in the case and “none of the courts below addressed the propriety of race-based admissions systems in that context,” the new decision applies only to civilian educational institutions of higher learning, he wrote. The exception appears to suggest the court could in the future consider the use of affirmative action in admissions at military academies.

Justice Sonia Sotomayor wrote a dissenting opinion.

The new decision “rolls back decades of precedent and momentous progress,” she said.

The case is actually two separate appeals that were heard together on Oct. 31, 2022: Students for Fair Admissions Inc. (SFFA) v. President and Fellows of Harvard College, court file 20-1199, and SFFA v. University of North Carolina (UNC), court file 21-707.

Roberts wrote the majority opinion in the UNC case, which was joined by Justices Clarence Thomas, Neil Gorsuch, Brett Kavanaugh, Samuel Alito, and Amy Coney Barrett. The court’s three liberal justices, Sonia Sotomayor, Elena Kagan, and Ketanji Brown Jackson dissented. The vote was 6-3.

The justices’ votes in the Harvard case were the same except that Jackson did not participate in the decision after she recused herself because she has close ties to Harvard. Kagan did not recuse herself even though she used to be dean of the Harvard Law School from 2003 to 2009. The vote in this case was 6-2.

Considered a conservative group, SFFA calls itself “a nonprofit membership group of more than 20,000 students, parents, and others, who believe that racial classifications and preferences in college admissions are unfair, unnecessary, and unconstitutional.”

Harvard and UNC are, respectively, the oldest private college and the oldest public college in the United States.

In the Harvard case, U.S. District Judge Allison Dale Burroughs previously found after a 15-day non-jury trial for Harvard, ruling its admission policy that was said to discriminate against Asian American applicants was not motivated by “racial animus … or intentional discrimination” and was “narrowly tailored to achieve diversity and the academic benefits that flow from diversity.” The U.S. Court of Appeals for the 2nd Circuit upheld the lower court’s decision, ruling against SFFA.

In the North Carolina case, U.S. District Judge Loretta Copeland Biggs previously held an eight-day non-jury trial to determine if UNC was complying with existing precedent.

The court approved the school’s admissions policy because it uses race “flexibly as a ‘plus’ factor” and only as “one among many factors.” The court found UNC had no viable race-neutral alternatives to help it “achieve the educational benefits of diversity about as well as its current race-conscious policies and practices.”

The court stated that providing admissions preferences based on socioeconomic status instead of race would not work because “the majority of low-income students are white,” so the schools would just “be choosing more white students.” Race should be used by UNC indefinitely because it is “interwoven in every aspect of the lived experience.” Until the United States one day resolves its “struggle with racial inequality,” minority students would continue to be “less likely to be admitted in meaningful numbers on [race-neutral] criteria.”

SFFA promptly filed an appeal with the U.S. Court of Appeals for the 4th Circuit, but before that court could rule on the case, also sought review from the Supreme Court, which was granted.

In the majority opinion, Roberts wrote that the Harvard and UNC admissions programs “cannot be reconciled with the guarantees of the Equal Protection Clause.”

“Both programs lack sufficiently focused and measurable objectives warranting the use of race, unavoidably employ race in a negative manner, involve racial stereotyping, and lack meaningful endpoints. We have never permitted admissions programs to work in that way, and we will not do so today.”

Years earlier, then-Justice Sandra Day O’Connor had predicted the demise of affirmative action. In Grutter v. Bollinger (2003), she wrote, “We expect that 25 years from now the use of racial preferences will no longer be necessary to further the interest approved today.”

Making race-conscious admissions decisions is “dangerous,” O’Connor wrote, calling it a “deviation from the norm of equal treatment.” Such programs must “be limited in time,” she stated, adding that “all governmental use of race must have a logical end point.”

While race cannot be used as a factor in admissions decisions, this doesn’t mean college applicants have to refrain during the process from discussing race, the opinion stated.

“Nothing in this opinion should be construed as prohibiting universities from considering an applicant’s discussion of how race affected his or her life, be it through discrimination, inspiration or otherwise,” Roberts wrote.

“A benefit to a student who overcame racial discrimination, for example, must be tied to that student’s courage and determination. Or a benefit to a student whose heritage or culture motivated him or her to assume a leadership role or attain a particular goal must be tied to that student’s unique ability to contribute to the university,” he wrote.

“In other words, the student must be treated based on his or her experiences as an individual—not on the basis of race.”

Justice Clarence Thomas, who had long pressed to end affirmative action, wrote a 58-page opinion concurring with the majority.

The new ruling “sees the universities’ admissions policies for what they are: rudderless, race-based preferences designed to ensure a particular racial mix in their entering classes,” Thomas wrote.

Justice Jackson wrote in a separate, 29-page dissenting opinion in the UNC case that the majority opinion is “truly a tragedy for us all.”

“With let-them-eat-cake obliviousness, today, the majority pulls the ripcord and announces ‘colorblindness for all’ by legal fiat. But deeming race irrelevant in law does not make it so in life,” Jackson wrote. Sotomayor and Kagan joined Jackson’s dissent.

This is a developing story. This article will be updated. Zachary Stieber contributed to this report.

Tuesday, June 27, 2023

Nigeria Issues Licenses for Two Crude Export Terminals in Bid to Boost Output

NNPCL, Belema Ltd. secure licenses for establishment of Crude Export Terminals 

Nigeria has authorized two new crude oil export terminals that people involved say could process more than 400,000 b/d of oil and spur the production of more crude in Africa’s biggest producer.

The Nigerian Midstream and Downstream Petroleum Regulatory Authority issued the licenses June 13 to a subsidiary of state-owned Nigerian National Petroleum Corp. and upstream operator Belema Oil Producing.

Farouk Ahmed, head of the regulator, said NNPC Exploration and Production will build the 2.2 million-barrel offshore Utapate terminal, while the Belema Sweet Export terminal will have a capacity of 2 million barrels when it comes online in 18-24 months.

Tein Jack-Rich, CEO of Belema Oil, said after the announcement that his company’s terminal hoped to handle 400,000 b/d of crude, according to local media reports.

NEPL operates onshore oil block OML 130 in the southeastern Niger Delta. The block yields around 35,000 b/d of crude, which is exported through ExxonMobil’s Qua Iboe terminal.

Belema Oil operates OML 55, while the NNPC and London-listed Seplat Energy also have an interest. The block produces around 80,000 b/d.

Jack-Rich said the project would increase crude production, both for local refineries and export, according to local news reports.

Nigeria has 31 export terminals but only 23 are active. In April, a 10-day strike by in-house unions at ExxonMobil’s export terminals — including the terminal that lifts flagship crude grade Qua Iboe — caused monthly Nigerian production to fall by more than 250,000 b/d.

Platts, a unit of S&P Global Commodity Insights, last assessed Qua Iboe at a 45 cents/b discount to Dated Brent on June 14.

Output issues

Bola Tinubu, Nigeria’s new president and who has upended the country’s economic orthodoxy since taking office late May, promised to raise crude output to 2.6 million b/d by 2027 during the presidential campaign.

Nigeria has the capacity to produce 2.2 million b/d, but output lagged below 1.3 million b/d for much of 2022, with the country’s ageing fields affected by outages. Rampant oil theft and insecurity has cost the country billions of dollars in lost exports and underinvestment.

Oil exports are a vital revenue stream for Nigeria, and a critical source of foreign exchange reserves, particularly as the country has been importing almost all its refined products.

Aliko Dangote, Africa’s richest man, has constructed a 650,000 b/d refinery to make Nigeria self-sufficient in fuels, but questions remain about the progress of the project — officially commissioned in June — following years of delays and cost overruns.

Qatar to Build Major Oil Refinery in Iraq and Launch New Company for Oil Tankers

Oil refinery in Iraq 

Qatar and Iraq have signed an an MoU to establish a 150,000 barrels per day oil refinery in Iraq, the Peninsula reported.

Both countries have also signed an MoU to establish a joint company that will build and operate oil tankers that carry crude oil and petroleum products according to the laws in force in both countries.

The deals were signed on the sidelines of Qatar’s Amir HH Sheikh Tamim bin Hamad Al Thani’s official visit to the Republic of Iraq.

Qatar also signed an MoU to supply Iraq with liquefied gas, and cooperate with Qatari companies specialized in building stations to receive gas, establish related tanks and the necessary infrastructure, including power stations and pipelines.

Monday, June 26, 2023

US Declassifies COVID-19 Origins Report

A laboratory technician wearing personal protective equipment (PPE) works on samples to be tested for the Covid-19 coronavirus at the Fire Eye laboratory, a Covid-19 testing facility, in Wuhan in China's central Hubei province early on Aug. 5, 2021. (STR/AFP via Getty Images)

 A laboratory technician wearing personal protective equipment (PPE) works on samples to be tested for the Covid-19 coronavirus at the Fire Eye laboratory, a Covid-19 testing facility, in Wuhan in China's central Hubei province early on Aug. 5, 2021. (STR/AFP via Getty Images)

The Office of the Director of National Intelligence finally released a government report on the origins of COVID-19 on Friday. The chairs of the House Intelligence and Coronavirus Pandemic committees say the report lends credence to the theory that the virus may have originated in a laboratory in Wuhan, China.

Congress passed legislation earlier this year mandating the declassification of information related to potential connections between the Wuhan Institute of Virology (WIV) and the origins of the pandemic.

The declassified report provides insight into the activities of the WIV before the pandemic and presents the Intelligence Community’s (IC) understanding of the origins of COVID-19. However, it does not definitively determine the source of the virus.

“All agencies continue to assess that both a natural and laboratory-associated origin remain plausible hypotheses to explain the first human infection,” the 10-page declassified report states (pdf).

The report includes assessments from the National Intelligence Council (NIC), the Department of Energy, the Federal Bureau of Investigation (FBI), the Central Intelligence Agency (CIA), and other unnamed agencies.

The majority of agencies, including the NIC and four other Intelligence Community agencies, believe that the virus most likely resulted from natural exposure to an infected animal or a close progenitor.

However, the Department of Energy and the FBI hold the view that the virus originated in a laboratory, although they have different reasons for their assessment.

Epoch Times Photo
The P4 laboratory on the campus of the Wuhan Institute of Virology in Wuhan, Hubei Province, China, on May 13, 2020. (Hector Retamal/AFP via Getty Images)

The CIA and another agency are unable to determine the precise origin of COVID-19, as both hypotheses rely on significant assumptions or face challenges with conflicting reporting, the report states.

Some of the assessments in the report were previously known.

The IC expanded its investigation into COVID-19 in March to explore whether the initial human infection occurred naturally through contact with an infected animal or if it was connected to a laboratory incident.

The report states that the virus was not genetically engineered nor created as a biological weapon, according to “almost all” of the agencies involved. However, there is disagreement among agencies regarding the laboratory origin hypothesis.

Wuhan Experiments ‘Left No Traces of Genetic Modification’

Before the pandemic, the WIV engaged in collaboration with China’s People’s Liberation Army (PLA) on “public health-related research.” Some of the WIV scientists conducted experiments on coronaviruses, but there is no evidence of genetic modification in these viruses, according to the report.

However, the report states that the WIV did not possess viruses that could “plausibly be the progenitor of SARS-CoV-2” before the pandemic. Instead, the viruses were primarily used for “virology and vaccine-related work.”

Between 2017 and 2019, the WIV funded research projects and involved some of its personnel in projects to “enhance China’s knowledge of pathogens and early disease warning capabilities for defensive and biosecurity needs of the military.”

“The IC assesses that this work was intended for public health needs and that the coronaviruses known to be used were too distantly related to have led to the creation of SARS-CoV-2,” the report states.

Epoch Times Photo
A new study in 2022 found that a neutrophil-associated cationic protein contained in saliva can prevent Covid-19 infection. This image shows a 3D print of a spike protein of SARS-CoV-2—the virus that causes COVID-19—in front of a 3D print of a SARS-CoV-2 virus particle. (Courtesy of NIAID/RML)

The WIV conducted extensive research on coronaviruses before the pandemic, including genetic analysis and sampling of animals, particularly bats.

While the report acknowledges the presence of genetic engineering work at the WIV, it states that there is no “direct evidence that a specific research-related incident occurred involving WIV personnel before the pandemic that could have caused the COVID pandemic.”

However, the report notes that some of the WIV’s genetic engineering projects on coronaviruses involved techniques that could make it challenging to detect intentional changes, citing a 2017 dissertation by a WIV student.

“Some of the WIV’s genetic engineering projects on coronaviruses involved techniques that could make it difficult to detect intentional changes,” the report states.

“A 2017 dissertation by a WIV student showed that reverse genetic cloning techniques—which are standard techniques used in advanced molecular laboratories—left no traces of genetic modification of SARS-like coronaviruses.”

The WIV scientists created chimeras of SARS-like coronaviruses through genetic engineering and attempted to clone unrelated infectious viruses. Reverse genetic cloning techniques were employed on SARS-like coronaviruses, although the report states that no evidence suggests intentional genetic modification in relation to SARS-CoV-2.

Inadequate Biosafety Precautions at Wuhan Lab

The WIV had been the subject of biosafety concerns in handling SARS-like coronaviruses before the pandemic.

The report noted that some WIV researchers “probably did not use adequate biosafety precautions at least some of the time prior to the pandemic in handling SARS-like coronaviruses.” This increased the risk of potential exposure to viruses.

Biosafety improvements, training, and procurements were being made in mid-2019, the report states, but the IC is not aware of any specific incident that triggered those measures. This coincided with the broader biosecurity legislation in China.

One issue highlighted in the report is the lack of transparency regarding China’s decisions on which pathogens required higher biocontainment protocols, even after the WIV’s BSL-4 laboratory was accredited in 2017. Additionally, there was a shortage of properly trained personnel at the facility.

Epoch Times Photo
Laboratory technicians wearing personal protective equipment working on samples to be tested for COVID-19 at the Fire Eye laboratory, a COVID-19 testing facility, in Wuhan in China’s central Hubei province, on Aug. 4, 2021. (STR/AFP via Getty Images)

In 2019, experiments were conducted in lower containment labs despite known risks.

In 2020, an inspection of the WIV’s high-containment laboratories took place just months after the emergence of the COVID-19 outbreak. The inspection identified various issues, including the need for equipment updates, additional disinfectant measures, and improvements to ventilation systems.

However, the report cautioned that these findings were made during the institute’s crisis response to the COVID-19 outbreak and may “not necessarily indicative” of the WIV’s biosafety status prior to the outbreak.

In the fall of 2019, some WIV researchers fell sick before the COVID-19 outbreak. The IC’s assessment “neither supports nor refutes” the theory that they were infected with SARS-CoV-2, saying that their symptoms were “consistent with but not diagnostic of COVID-19.” Their symptoms, the report states, “could have been caused by a number of diseases and some of the symptoms were not consistent with COVID-19.”

China Has ‘Some Serious Explaining To Do’

In a joint statement, Rep. Mike Turner (R-Ohio), chair of the House Intelligence Committee, and Rep. Brad Wenstrup (R-Ohio), chair of the Select Subcommittee on the Coronavirus Pandemic, said the declassified report is “a promising step toward full transparency.”

The two Republican lawmakers declared that “everyone deserves to know the truth.” The pair said the information gathered by their committees during this Congress and the last “supports the likelihood of a lab leak.”

Turner and Wenstrup said their committees “will continue to investigate the origins of COVID-19 and the information obtained today will help to further its investigation.”

“The Chinese Communist Party and the Chinese People’s Liberation Army have some serious explaining to do. This declassified report from the Office of the Director of National Intelligence and the Intelligence Community lends credence to the lab leak theory, which suggests that the coronavirus outbreak most likely originated from a Wuhan virology lab in China,” they said.

“This is on top of the Government Accountability Office’s report released last week outlining the flow of U.S. taxpayer dollars to Chinese entities known to be doing coronavirus research,” their statement continued.

“While we appreciate the report from ODNI, the corroboration of all available evidence, along with further investigation into the origins of COVID-19 must continue.”

Billion-Dollar Bank Restricts Customers to $667 Cash Withdrawal Limit, Places Cap on How Much People Can Spend

Billion-Dollar Bank Restricts Customers to $667 Cash Withdrawal Limit, Places Cap on How Much People Can Spend 

One of the biggest banks in Australia is making significant changes to the amount of cash customers can withdraw and how much they are allowed to spend using their debit cards.

Westpac is reportedly restricting the amount of cash that customers can pull out of ATMs to $1,000 AUD per day, which is about $667 USD.

In addition, the bank is setting a maximum amount that people can spend using their debit card.

That amount will be fixed at $8,000 AUD per day, which is equivalent to $5,343 USD at time of publishing.

That change is a big departure from the bank’s previous policies, reports Yahoo Finance Australia.

“This is a major change. The current limit when tapping, inserting or making online payments with a debit card is a customer’s entire available balance.”

The changes follow a report from Australia’s central bank that found a “sharp decline” in the number of cash transactions executed throughout the country.

“The sharp decline in the cash share of transactions reflects that most Australians now use cash infrequently.

Indeed, 72% of Australians were classed as ‘low cash users’ in 2022, using cash for 20% or less of their in-person transactions, compared with 50% in 2019.

By contrast, ‘high cash users’, who use cash for 80% or more of their in-person transactions, now represent only about 7% of Australians – a number that halved between 2019 and 2022.

Also, just over half of respondents did not use cash at all during the 2022 survey week, compared with around one-third in 2019. One in 20 participants used cash for all in-person transactions in the 2022 survey, compared with one in 10 in 2019.”

Inside Prigozhin’s Wagner, Russia’s Secret War Company | WSJ Documentary

Friday, June 23, 2023

What really happened the night the nickel market broke

 LME nickel lawsuits are about principle as much as money 

Matthew Chamberlain had just presided over one of the wildest days in the history of metals markets when he sat down to type a late-night memo to the UK’s financial regulator. But the London Metal Exchange’s chief executive was optimistic.

It was the evening of March 7 last year and nickel prices had surged as much as 90% to an unprecedented $55,000 a ton, causing huge strains across the market. A large Chinese bank had missed a margin call in the hundreds of millions of dollars. The Financial Conduct Authority was beginning to demand updates.

Now, after a long day of meetings, calls, and emails, Chamberlain summed up the LME’s position: the price spikes were explainable because of jitters over Russia’s invasion of Ukraine, and the market was still functioning. It didn’t see a need to intervene.

“We will see where we stand 0800-0900 tomorrow,” Chamberlain wrote. “If the nickel price has fallen overnight, we’ll be in a much better position.” At 9:36 p.m., he pressed send.

By the time he woke up at 5:30 a.m., the market was in chaos.

The broad outlines of what happened in the nickel market last year are by now well known. Prices did start rising because of worries over Russian supply, but by the time of Chamberlain’s memo the nickel market was in the grips of a violent squeeze centered around a short position built by Xiang Guangda of Tsingshan Holding Group Co., the world’s top nickel and stainless steel producer. A few hours after Chamberlain woke up, the LME announced it was cancelling all nickel trades that had taken place on March 8.

Now, documents made public in a court hearing this week recount in unforgiving detail the LME’s fateful decisions in early March, and how it sleepwalked into a crisis with little precedent in the modern history of finance.

Across 649 pages of filings and witness statements, they reveal that the LME was largely in the dark about Tsingshan’s role as the major driver of the price spike until after it had decided to cancel billions of dollars of nickel trades; that the exchange’s top decision-makers were asleep as the market spiraled out of control; and that Chamberlain made the key decision that the market was disorderly in about 20 minutes after he woke up on March 8 – unaware until much later that the LME’s staff had allowed prices to move more rapidly by disabling its own automatic volatility controls.

Death spiral

The LME has acknowledged that it has lessons to learn from the events of last year but insists it acted in the best interests of the market to avoid a “death spiral” that threatened to bankrupt a dozen banks and brokers and posed a risk to the wider financial system.

“The LME is not meant to be a spectator,” Jonathan Crow, a lawyer for the LME, said in court on Wednesday. “It is meant to be operating an orderly market and then it must intervene in moments of disorder.”

Read more: LME cancelled nickel trades to ‘save’ Tsingshan, London court told

Its handling of the saga has been criticized by everyone from the International Monetary Fund to Citadel Securities’ Ken Griffin. And the crisis threatened the existence of the 146-year-old LME itself. In the words of its chief risk officer, the situation carried “a significant risk of market collapse leaving the LME unable to function as a venue for the world’s non-ferrous metals markets.”

The outcome of the legal battle playing out this week in London’s High Court could be similarly existential for the LME. Hedge fund Elliott Investment Management and trading firm Jane Street are seeking $472 million in damages in a judicial review, but the $12 billion of trades the LME cancelled on March 8 is more than 100 times its annual profit. Even if the LME prevails, it faces an uphill struggle to rebuild its reputation among investors and an ongoing investigation from the FCA.

Big bets

Six months before the crisis, in September 2021, traders at Elliott had started placing a bet that nickel prices would rise. The hedge fund, run by billionaire Paul Singer and best known as an activist shareholder and ferocious litigator, is a significant player in commodity markets with a taste for big wagers.

Around the same time, at Tsingshan’s offices in Shanghai, Xiang was coming to the opposite view. Like Elliott, Xiang, who’s known as ‘Big Shot’ in Chinese commodities circles, also has a history of betting big. He’d built Tsingshan from a modest start into a global metals behemoth, and now he was backing himself to deliver again: with plans to boost production significantly, he reckoned prices could only fall. He started building up a large nickel short position.

By February 2022, it was clear that Elliott’s view of the market was prevailing. Stocks were low, demand for nickel in electric car batteries was booming, and traders were fretting that supplies from Russia could be cut off.

“Wow,” Elliott’s contact at JPMorgan said in an instant message. “We did that at the right time.”

The market started trading in a self-reinforcing cycle, known as a “short squeeze.” Higher prices forced Xiang to post more margin, leading him to reduce his position by buying back contracts – and so pushing up prices further.

Yet the LME remained largely unaware of Tsingshan’s role in driving prices higher as the chaotic events unfolded. 

The LME’s senior management first became aware of Tsingshan’s short position when Bloomberg wrote about it on Feb. 14, according to the witness statements. However, while Chamberlain recognized that the position was large, he did not see it as “a particular cause for concern,” and therefore did not request any further information.

Margin calls

Without that, the LME only had access to data about Tsingshan’s on-exchange position, and not the portion of its position that was held bilaterally, or over the counter. Bloomberg has since reported that Tsingshan’s total position was five times the size of the on-exchange part the LME could see.

On the morning of March 7, nickel prices leapt to $36,000 a ton, and the strains were becoming apparent in the market. Four LME brokers were late in paying their margin calls that morning.

One of them, a unit of China Construction Bank Corp., was unable to pay a margin call in the hundreds of millions of dollars for the entire day. It told the LME that the reason was because clients including Tsingshan had not paid margin calls to it.

Defaults are not an everyday occurrence on the LME or any other exchange. The LME’s clearinghouse had never put a member into default since it started operations in 2014. That CCBI, as the unit is known, was unable to pay its margin call was a sign of the extreme stress on the market.

As prices surged, the LME began to hold discussions about whether and how it should respond. The key question at the time, and one raised repeatedly during this week’s legal case, is whether the market had become “disorderly.”

LME executives discussed suspending the market on a call on the morning of March 7. By 1:30 p.m., with prices up 60% for the day, James Cressy, the LME’s chief operating officer said in an email that there was “a question of how orderly the mkt is and whether we suspend.”

Still, nickel continued to trade.

But in recognition of the strains spreading through the market, the LME’s clearinghouse resolved to stop making margin calls until the following morning – giving members more time to find cash, but also potentially exposing LME Clear to a greater risk if prices moved even higher.

When the LME’s “Special Committee” met at 4 p.m., it decided that the market should remain open. The nickel price move could be explained by geopolitical and macroeconomic factors, it concluded, deciding not to impose any limits on the market.

About half an hour later, Chamberlain was forwarded a market commentary from an LME broker that read, “How closely do you need to monitor a market to spot something is not quite right !!!!!!!”

To bed

And when the LME’s key decision makers went to bed, CCBI’s margin call remained unpaid. By that time, the exchange’s executives were becoming increasingly concerned.

At 8:47 p.m. Adrian Farnham, the chief executive of LME Clear, sent a WhatsApp message to Nicolas Aguzin, the chief executive of LME parent company Hong Kong Exchanges & Clearing Ltd. He asked Aguzin to try to speak to China Construction Bank, “because obviously we can’t really allow” its CCBI unit “to not pay again.”

Nonetheless, Farnham, like Chamberlain, remained optimistic. “I went to bed expecting that the nickel price would come back down,” he said in a witness statement.

Elliott, on the other hand, was preparing for prices to spike. The hedge fund’s traders sent a series of orders to their broker, Goldman Sachs Group Inc., seeking to sell nickel should the price rise to certain predetermined levels.

The nickel market opened as usual at 1 a.m. As Farnham and Chamberlain slept, the market was calm for a few hours, but then resumed its rise as panicky banks sought to reduce their exposure to Tsingshan by covering part of the short position. 

Jane Street alleges the very fact that the LME’s key decision makers were asleep was a breach of the exchange’s regulatory duties, since it meant that “no-one had been monitoring transactions in order to assess whether there were disorderly trading conditions.” The LME disputes that it was in breach.

What oversight there was came from the exchange’s trading operations team. They were in charge of operating the LME’s price bands, a form of speed bump designed to limit extreme price moves, such as in the case of “fat finger” trades.

But in the early hours of March 8, the operations team received numerous complaints from market participants that the price bands were preventing them from booking trades. At 4:49 a.m., they suspended them altogether.

Dizzying ascent

It was soon after this that nickel prices started the most dizzying part of their ascent. By the time Chamberlain woke up, at 5:30 a.m., the price was already $60,000 a ton. In the next 38 minutes, it rose another $40,000.

“The abandonment of price bands caused or at least materially contributed to the speed and scale of the increase in prices,” Jane Street said in its court filing. “Without price bands in place, the LME could not control price volatility at all.”

Chamberlain spent twenty minutes searching on his phone for a real-world explanation for the price move – browsing Bloomberg, the Financial Times and Google – before concluding that the market was disorderly. “I had never witnessed such extreme price movements in nickel (or any other metal traded on the Exchange) before,” he recalled.

Chamberlain wasn’t aware that his operations team had suspended the price bands, as he made his pivotal decision to suspend the nickel market. In his witness statement, he said that the information wouldn’t have affected the decision, as the price would have risen anyway, even if the trading curbs were still in place. 

“We are in serious difficulties”

The exchange still didn’t have a handle on the scale or the importance of Tsingshan’s position — the real reason behind the runaway rally.

Gay Huey Evans, the LME’s chair, had asked for an update on Tsingshan’s position the previous evening, but when the FCA asked that morning what was driving the nickel price, an LME staffer did not even mention the possibility of a short squeeze.

“This is, as you’d expect, related to the ongoing situation in Ukraine,” he wrote.

Chamberlain said he “was not aware of Tsingshan being in any difficulty” until later that day.

That morning, CCBI, having enlisted support from its parent company, paid its margin call from the previous day.

Panicking brokers

But now there was a new problem. Brokers on the LME would normally need to pay their first margin call of the day by 9 a.m., based on prices prevailing at around 7 a.m. If that had happened on March 8, the LME would have needed to request $19.75 billion from 28 banks and brokers – an unprecedented sum that was more than 10 times the previous daily record before March 2022.

LME executives were bombarded with calls and emails from panicking brokers. “We will not be able to meet intra-day margin calls,” one wrote, warning of their company’s imminent bankruptcy. “We are in serious difficulties and will be invoking actions to halt the business.”

Another requested a call with “someone senior” at the LME to convey their company’s “pain.”

One member, who was among roughly 10 brokers through which Tsingshan held its short position, wrote to Chamberlain saying: “You shouldn’t have opened in Asia – now you have to cancel trades and reset to the London close.”

Suspend the market

At 7:30 a.m., Chamberlain led a conference call for the senior management of LME and LME Clear, as well as several executives from its parent company HKEX. They agreed to suspend the market as soon as possible. No minutes were taken.

By now, Elliott had sold 9,660 tons of nickel at the elevated prices of March 8 via three brokers. The bulk of it was sold, in a single trade, via JPMorgan Chase & Co. – in a deal that was confirmed at 8:14 a.m.

Having sold at an average price of just over $75,000 a ton, Elliott stood to make a profit of around $50,000 a ton on its bullish bet.

“Wow,” Elliott’s contact at JPMorgan said in an instant message. “We did that at the right time.”

But the real bombshell was still to come. At 9 a.m., the LME held a 52-minute call to discuss what to do next. It considered and rejected several options, including allowing the trades of March 8 to stand, allowing them to stand but changing their price, and allowing them to stand but calling margin based on the prices of the previous day. Finally, Chamberlain made the decision to cancel the entire trading session.

On March 9, as recriminations flew and with the nickel market still closed, Chamberlain finally held his first call with Tsingshan.

The same day, Elliott’s lawyers wrote their first letter to the LME.

(By Jack Farchy, Mark Burton and Jonathan Browning)

Taiwan Invasion Would Wreck US Economy, Military Development: Report

The Arleigh Burke-class guided-missile destroyer USS Chung-Hoon is observing the Chinese PLA Navy vessel Luyang III (top) while on a transit through the Taiwan Strait with the Royal Canadian Navy's HMCS Montreal, on June 3, 2023. (Andre T. Richard/U.S. Navy/AFP/Getty Images)

The Arleigh Burke-class guided-missile destroyer USS Chung-Hoon is observing the Chinese PLA Navy vessel Luyang III (top) while on a transit through the Taiwan Strait with the Royal Canadian Navy's HMCS Montreal, on June 3, 2023. (Andre T. Richard/U.S. Navy/AFP/Getty Images) 

A Chinese communist invasion of Taiwan would wreck the United States’ economy and military development due to the nation’s reliance on the island for its advanced semiconductors, according to a new report.

The report (pdf), published jointly by the U.S.-Taiwan Business Council and the Project 2049 Institute think tank, says that any disruption in access to Taiwan’s semiconductor industry could cause cascading and catastrophic effects for the U.S. economy and national security.

Such risks have only increased, it says, due to communist China’s growing military aggression against the island and its efforts to push the United States and Taiwan apart.

“Semiconductor supply chain disruptions could … have severe repercussions for U.S. national security and U.S. critical infrastructure,” the report says.

“Potential risks to the semiconductor supply chain are especially acute in Taiwan, given its complex political situation and the challenges posed to it by China.”

Taiwan ‘Most Critical Link’ in Global Tech Ecosystem

The report warns that a disruption in Taiwan’s semiconductor manufacturing capacity could brutalize the U.S. economy and hamper military development.

It reports that some projections estimate that a loss of access to Taiwan-made chips could cause a 5–10 percent decline in U.S. gross domestic product. Based on 2022 figures, that would amount to a total loss of $1.2–2.4 trillion.

Moreover, the report notes that such a loss would also likely result in a blow to stock markets equal to or exceeding that of the COVID-19 pandemic. Those losses included a 37 percent drop to the Dow Jones and a 34 percent hit to the S&P 500.

As such, the report says that “Taiwan may be the most critical link in the entire technology ecosystem,” and warns that a disruption caused by Chinese invasion or natural disaster would wreak havoc on economies worldwide.

“A serious conflict in the Taiwan Strait could significantly and negatively impact not only Taiwan but also the rest of the world, including China,” the report says.

“Compromising Taiwan’s national security would negatively impact the global supply of semiconductors, and by extension the American, global, and Chinese economies.”

Epoch Times Photo
A visitor looks at a 300mm wafer at the booth of Taiwan Semiconductor Manufacturing Company Limited (TSMC) during the 2021 World Semiconductor Conference in Nanjing, Jiangsu Province, China, on June 9, 2021. (Long Wei/VCG via Getty Images)

Concerning the threat to U.S. military readiness, the report notes that the entirety of the United States’ most advanced semiconductors, such as those used in its advanced aircraft, are produced in Taiwan or South Korea.

Though the U.S. military engages in “lifetime buys,” purchasing all the semiconductors a weapon system will need for its lifecycle, the report says that some military systems would still require access to state-of-the-art technologies and would thus be affected by any disruption.

“Access to cutting-edge semiconductor technologies is a key driver for the weaponry that the U.S. military needs for its defensive and offensive capabilities,” the report says.

“Currently, Taiwan and South Korea account for 100 [percent] of installed capacity to mass produce high-end semiconductors … which leaves the supply to the U.S. military vulnerable.”

China Threatened by US-Taiwan Cooperation

The Chinese Communist Party (CCP), which rules China as a single-party state, claims that Taiwan is part of its territory and must be united with the mainland. Though the regime has never actually controlled any part of Taiwan, its leadership has nevertheless vowed to “start a war” to prevent Taiwan’s de facto independence from being recognized internationally.

The report notes that the CCP’s most recent five-year plan outlines its ambitions to become a world leader in semiconductor technology by 2030, perhaps giving the regime increased cause to conquer the democratic island and seize its manufactories.

To that end, the report says that Taiwanese companies reported their “biggest concern was aggressive action from China.”

“[Taiwanese leaders] were confident that they could handle almost any disruption, with armed conflict the exception,” the report says.

“In a worst-case scenario of a Chinese invasion, all flow of goods and services in and out of Taiwan are stopped, manufacturing capacity is shut down, and Taiwan’s semiconductor industry eventually comes under the control of the Chinese Communist Party.”

That presents a problem because any effort that the United States takes to secure its supply chain in Taiwan or increase ties with the island’s democratic government will necessarily be seen as a provocation by the CCP, possibly resulting in more aggression and, thus, ironically decreasing supply chain resiliency in the long term.

However the United States decides to manage this predicament, the report says, the nation must ensure that its informal alliance with Taiwan remains strong and that the two economies foster increased partnerships in order to ensure their mutual defense against disruptions, including the military interloping of the CCP.

“Almost any action taken to make the U.S.-Taiwan semiconductor supply chain more resilient will likely be seen as a threat to China,” the report says. “How China reacts to that supposed threat is hard to predict.

“Taiwan will remain a critical partner for the foreseeable future and the U.S. must do everything it can to ensure that Taiwan remains a close ally.”

Wednesday, June 21, 2023

Explained: Two new CARBON CAPTURE pipelines planned for South Dakota

Carbon Capture Pipeline Projects

Landowners seek dismissal of Summit Carbon Solutions' pipeline

 File image: Summit Carbon Solutions 

An Iowa landowner is trying to get a proposed carbon capture pipeline project halted.

On Wednesday, lawyers for George Cummins filed a motion to dismiss Summit Carbon Solutions' application to install a pipeline to transport carbon dioxide within the state of Iowa.

Cummins owns land near Charles City in Floyd County.

The petition says that the Iowa Utilities Board only has the ability to approve or deny "liquified" carbon dioxide and Summit intends to transport "supercritical" carbon dioxide.

Some Iowa landowners are upset that a final hearing deciding whether or not Summit's pipeline project will be approved has been set in August. They previously believed the hearing would take place either later in the year or early next year.

Other landowners are calling on the Iowa Utilities Board to delay the hearing.

Tuesday, June 20, 2023

World’s No. 2 gold miner is trying to get bigger in copper

 Mark Bristow, Barrick Gold's chief executive.

Mark Bristow, Barrick Gold’s chief executive. (Image by Barrick Gold, Facebook. 

For a company with “gold” in its name, Barrick Gold Corp. has become noticeably fixated on copper.

The world’s second-largest bullion producer recently approached First Quantum Minerals Ltd. to discuss a potential takeover, Bloomberg reported last week. And while the move was unsuccessful — Barrick’s informal overtures were rebuffed — its interest in buying a $17 billion copper miner provides the starkest evidence yet of a shifting focus at the company whose origins lie in Nevada’s gold veins.

Mark Bristow, Barrick’s swashbuckling chief executive, has talked for years about his desire to grow in copper. Now, the emphasis may be taking on a greater urgency: Barrick’s gold production has dropped to multi-decade lows, while longstanding industry rival Newmont Corp. recently announced a huge acquisition that will catapult it well out of Barrick’s league in gold.

While gold companies historically prided themselves on being “pure plays” for investors wanting exposure to bullion prices, Barrick sees copper as a strategic commodity underpinned by the demand for electrification. It’s often found alongside gold in orebodies, and can be processed using similar methods.

Copper is critical “if you want to be relevant” in mining, Bristow said on the company’s latest earnings call. “As a gold miner, you’re going to have to grow and include copper in your portfolio.”

Already, the Canadian miner’s biggest investment project is a $7 billion copper-gold project in Pakistan, which Barrick plans to start up in 2028 and could operate for at least four decades. It’s also studying an expansion at its Zambian copper mine, while scouring for new deposits across the Middle East, Asia and Africa.

Bristow isn’t alone in his hunt for copper. Mining executives and analysts have been sounding an alarm over growing shortages starting in the mid-2020s, as demand increases for copper in electric vehicles, wind and solar farms and high-voltage cables. The world’s biggest miners are all looking to grow in copper to take advantage of future price rises, at a time when there are few new projects being planned.

However, Barrick may have one advantage over the competition: Bristow has shown he’s willing to venture to riskier regions where many western miners are wary to invest. A geologist by training, the South African executive cultivated a reputation for building gold mines across the Democractic Republic of Congo, Ivory Coast and Mali while at Randgold Resources Ltd., the company he founded.

He brought that same approach to Barrick when the company bought Randgold in a no-premium deal in 2019. The company has revived the Reko Diq project in Pakistan after resolving a years-long dispute with the government over a 2011 decision to deny a license for the mine.

Bristow has also spoken openly about copper exploration in both Zambia and Congo. The company is currently in talks with the Congolese government about potential exploration projects, according to people familiar with the matter.

Bristow hasn’t made any big acquisitions since joining Barrick, though he has certainly tried. The company attempted a hostile, no-premium takeover bid for Newmont in 2019 that ultimately failed. He toyed publicly with the idea of a deal with copper miner Freeport-McMoRan Inc. At the same time, he’s been a vocal critic of getting bigger for the sake of it, maintaining that organic growth — not “stupid M&As” — is the best way to stay competitive in an industry with a litany of ill-timed deals.

Responding to the news of Barrick’s approach to First Quantum, analysts pointed to the difficulty in reconciling Bristow’s discipline in M&A with the likelihood that any deal would require a steep premium, given the industrywide scramble for copper assets. (By comparison, BHP Group Ltd. offered a 49% premium to OZ Minerals Ltd.’s undisturbed share price to seal a A$9.6 billion ($6.6 billion) deal for the Australian copper miner.)

Bristow has stressed that Barrick is still, at its core, a gold company. But the firm’s gold production has fallen to its lowest level since 2000 and its shares are down 5% this year. Newmont’s takeover of Newcrest Mining Ltd. would cement its position as the world’s top gold miner. The only metal output that has increased at Barrick since the Randgold merger is copper.

“It’s as strategic as gold is precious,” Bristow said recently.

(By Jacob Lorinc, with assistance from Michael J. Kavanagh, Thomas Biesheuvel, Dinesh Nair and Jack Farchy)

Column: Iron ore dances between China stimulus optimism and soft economic reality

 Iron ore price rises on improving China steel margins 

Iron ore is engaging in a familiar dance of flitting between hopes of more and effective economic stimulus in China, and the reality that the rebound in the world’s second-biggest economy is sputtering.

The spot price of iron ore has gyrated in recent weeks, driven by hopes for more stimulus from Beijing and concerns that the run of soft economic indicators is likely to extend.

China buys more than 70% of the total volume of global seaborne iron ore and produces just over half of the world’s steel, making its economic conditions key to the outlook for the main raw material for steel.

The price of iron ore contracts traded in Singapore ended at $113.42 a metric tonne on Wednesday, up marginally on the day but also up 10.8% from the low this year of $102.33 on May 5.

The immediate driver was news that China’s central bank on Wednesday lowered a key short-term lending rate for the first time in 10 months, cutting the seven-day reverse repo rate by 10 basis points to 1.90%.

That reduction, and expectations of further cuts to other lending rates, is sparking optimism that Beijing is acting to boost the flagging property sector, which consumes about one-third of China’s steel output.

The hope can be seen in the domestic iron ore price, with contracts on the Dalian Commodity Exchange outperforming Singapore futures.

The front-month Dalian contract ended at 804 yuan ($112.29) a metric tonne on Wednesday, up 1.5% on the day and about 17.8% above the closing low for the year of 682.5 yuan on May 25.

There are also some fundamental supports for the iron ore price, most noticeably declining inventories at China’s ports.

Port stockpiles monitored by consultants SteelHome dropped to 126.2 million metric tonnes in the week to June 9, down from 126.9 million the previous week and hitting their lowest level since July last year.

There is a seasonal pattern to inventories as they build over the northern winter while steel mills curb output, then drop as steel production ramps up for the summer construction season.

In the same week last year, inventories were at 128.3 million metric tonnes, or 1.6% above the current level.

Although this isn’t a huge drop on a year-on-year basis, it does indicate that there is room for steel mills to keep imports at a robust level and keep stockpiles comfortable.

Another bullish indicator is steel mills’ lifting production rates, with data from the China Iron and Steel Association showing output at its members rose to 2.23 million metric tonnes a day in the June 1-11 period, up 6.5% from the May 21-31 period.

The association also reported that steel inventories were 15.8 million metric tonnes over June 1-10, up 1.2% from the prior 10 days but down 15% from the same period in 2022.

China iron ore imports vs SGX price:
China iron ore imports vs SGX price

Soft economic data

Countering the positive indicators for iron ore demand is a raft of underwhelming economic data that shows China’s rebound after ending its strict zero-Covid policy in December has been uneven.

Industrial output grew 3.5% in May from a year earlier, the National Bureau of Statistics said on Wednesday, slowing from the 5.6% gain in April and below a 3.6% increase expected by analysts in a Reuters poll.

Retail sales, which had been the bright spot in China’s economy in the first quarter, lifted 12.7%, missing forecasts of 13.6% growth and down from April’s 18.4%.

The weak data may actually boost iron ore sentiment, as investors will expect further stimulus measures from Beijing.

But for any rally to sustain, it will be necessary for stimulus to translate into actual steel demand in coming months.

In the meantime, China’s appetite for iron ore imports is likely to remain locked within the fairly tight band of 90 million to 103 million metric tonnes per month, which has persisted since July 2022.

June’s imports are expected to be about 98 million metric tonnes by commodity analysts Kpler, which would be slightly ahead of May’s official customs figure of 96.18 million.

(The opinions expressed here are those of the author, Clyde Russell, a columnist for Reuters.)

(Editing by Gerry Doyle

Hunter Biden Reaches Plea Deal Over Tax Crimes: Report 

Hunter Biden will plead guilty to two tax crimes and admit the facts of a gun charge in a plea deal with federal prosecutors, according to a new report. 

The Washington Post reported Tuesday that Hunter, who has been facing a multi-year investigation by officials, negotiated a deal with Delaware U.S. Attorney David Weiss. Hunter will plead guilty to failing to pay about $100,000 in taxes in 2017 and 2018. The tax charges Hunter faces are misdemeanors.

He is expected to not face any jail time and to be given two years of probation.

The 53-year-old will also reportedly enter a diversion program upon admitting the illegal purchase of a firearm in 2018. The gun charge could be revoked from his record upon completion of the diversion program, according to sources who spoke with the Post. 

“The defendant has agreed to plead guilty to both counts of the tax Information,” the prosecutors said in a letter sent Tuesday. “The defendant has agreed to enter a Pretrial Diversion Agreement with respect to the firearm Information.”

The gun purchase would be illegal because he was on drugs at the time of the incident. Biden faced a five-year investigation into his taxes and gun purchase from federal prosecutors, FBI agents, and IRS investigators. 


“With the announcement of two agreements between my client, Hunter Biden, and the United States Attorney’s Office for the District of Delaware, it is my understanding that the five-year investigation into Hunter is resolved,” lawyer Chris Clark told NBC.

“Hunter will take responsibility for two instances of misdemeanor failure to file tax payments when due pursuant to a plea agreement. A firearm charge, which will be subject to a pretrial diversion agreement and will not be the subject of the plea agreement, will also be filed by the Government. I know Hunter believes it is important to take responsibility for these mistakes he made during a period of turmoil and addiction in his life. He looks forward to continuing his recovery and moving forward,” Clark added.

Previous reports had indicated that Hunter Biden’s tax liability was paid for by high-powered Hollywood lawyer Kevin Morris. Morris reportedly foot the bill for over $2 million of Biden’s taxes and worked with him on his art career.

Joe and Jill Biden reacted to the news, saying that they supported their son. “The President and First Lady love their son and support him as he continues to rebuild his life. We will have no further comment,” a statement from White House spokesman Ian Sams said.

The plea deal was criticized by conservatives, who argue that Hunter Biden was getting special treatment because he was the president’s son.

House Oversight and Accountability Committee chairman James Comer (R-KY) blasted the deal, calling it a “slap on the wrist.”

“Hunter Biden is getting away with a slap on the wrist when growing evidence uncovered by the House Oversight Committee reveals the Bidens engaged in a pattern of corruption, influence peddling, and possibly bribery,” Comer said. “These charges against Hunter Biden and sweetheart plea deal have no impact on the Oversight Committee’s investigation. We will not rest until the full extent of President Biden’s involvement in the family’s schemes are revealed.”

Brett Tolman, the former U.S. Attorney for Utah, also decried the deal.

“DOJ is violating its own internal policies on this case. The Ashcroft Memo requires they charge the ‘highest provable offense’ and seek consistent sentences with other cases brought by DOJ. This prosecution is an absolute laughable joke. Thousands have been sent to prison for long terms for the same charges,” Tolman said.

“They are ignoring decades of policy and precedent to seek felonies not misdemeanors and seek sentences within the guideline range. The diversion agreement on the felony is offensive to everyone not politically connected who sought diversions and were literally laughed at by DOJ,” he added.

The reported deal comes as Hunter, and his father, President Joe Biden, have been facing inquiries from Republican lawmakers over an alleged $5 million bribery scheme involving Ukraine. 

The allegation is contained in an FD-1023 form that the FBI created based on an interview they conducted with the FBI confidential human source in June 2020. The confidential source has been “consistently reviewed by the FBI” and has been “found to be highly credible.”

This is a breaking news story and will be updated as more information becomes available.

Saturday, June 17, 2023

US National Debt Hits All-Time High of $32 Trillion

The U.S. Capitol in Washington on March 23, 2023. (Richard Moore/The Epoch Times)

The U.S. Capitol in Washington on March 23, 2023. (Richard Moore/The Epoch Times) 

The U.S. national debt has surpassed $32 trillion for the first time in U.S. history, Treasury Department data released on June 17 showed.

The national debt as of June 16 is at an all-time high of $32.04 trillion, according to the Treasury’s daily statement (pdf).

This represents about $25 trillion in debt held by the public, and about $7 trillion in intragovernmental debt (pdf).

It comes less than two weeks after President Joe Biden signed into law the Fiscal Responsibility Act. One provision of the June 3 legislation suspends the debt ceiling for 19 months, which means the government can continue to borrow money until the end of 2024.

The debt limit was previously increased in December 2021 to $31.4 trillion.

On June 3, the total national debt was $31.47 trillion, but the business day immediately after Biden signed the bill, federal borrowing increased by nearly $400 billion.

The Congressional Budget Office projects the federal deficit for fiscal year 2023 to be $1.4 trillion.

Although the legislation Biden signed also included some $1.5 trillion in spending cuts over the next decade, under the Biden administration’s 2024 budget proposal, the gross national debt is projected to exceed $50 trillion by 2033.

That’s over $17 trillion over the next decade, which would be more than the entire national debt held by the public before COVID-19.

The federal government surpassed the $31 trillion mark on Oct. 2, 2022—just over eight months ago.

The $32 trillion mark was reached nine years sooner than what had been projected prior to the COVID-19 pandemic, largely due to trillions of dollars of congressionally-approved COVID-19-related spending.

‘Debt Addiction’

“We can’t even get through a single fiscal year anymore without adding a trillion dollars in debt, and $33 trillion is likely just around the corner,” Maya MacGuineas, president of the Committee for a Responsible Federal Budget, said in a statement.

“Our debt addiction saddles the next generation with a debt burden that only grows larger so long as we insist on ducking the hard choices of governing.

“We need a return to responsible fiscal policy if we’re ever going to get ourselves out of this mess. The formula to get there should be simple: no new borrowing—meaning fully offset all new spending or tax cuts—and better yet, hold off on them until our debt is under control; address the drivers of our runaway debt; and reform our broken budget process. It’s not rocket science—it’s pretty darn straightforward, and it’s time for our politicians to get to work before it’s too late.”

Michael A. Peterson, CEO of the Peter G. Peterson Foundation, a nonprofit that supports reducing the national debt and limiting the growth of social security and Medicare, echoed similar sentiments.

“We were fortunate to avoid a default under the debt ceiling, but the broader problem is that we keep ignoring the growing debt itself. As we race past $32 trillion with no end in sight, it’s well past time to address the fundamental drivers of our debt, which are mandatory spending growth and the lack of sufficient revenues to fund it,” he said in a statement.

“Doing nothing is not an option because critical social programs are heading to insolvency, and we’re on a path to add a staggering $127 trillion to the debt over the next 30 years. By 2053, nearly 40 percent of all federal revenues will be spent on interest alone—an unthinkable burden for us to place on future generations.”

House Republicans earlier this month unveiled a major tax cut proposal that seeks to grow jobs, bolster small businesses, and provide relief to inflation-squeezed households by leaving more of their hard-earned dollars in their wallets.

Meanwhile, Democrat lawmakers have introduced a bill that would essentially let Treasury ignore the debt cap and continue writing cheques with no limit. The Debt Ceiling Reform Act would authorize the Treasury Department to keep paying the government’s bills regardless of the statutory debt limit—unless Congress expressly says no.

Tom Ozimek contributed to this report.

How NEOM Took Over Saudi Arabia...

Chinese Hackers Breached Hundreds of Public and Private Networks, Investigation Concludes

 Attendees walk past an electronic display showing recent cyberattacks in China at the China Internet Security Conference in Beijing on Sept. 12, 2017. (Mark Schiefelbein/AP Photo)

Attendees walk past an electronic display showing recent cyberattacks in China at the China Internet Security Conference in Beijing on Sept. 12, 2017. (Mark Schiefelbein/AP Photo) 

Suspected state-backed Chinese hackers used a security hole in a popular email security appliance to break into the networks of hundreds of public and private sector organizations globally, nearly a third of them government agencies, including foreign ministries, cybersecurity firm Mandiant said Thursday.

“This is the broadest cyber espionage campaign known to be conducted by a China-nexus threat actor since the mass exploitation of Microsoft Exchange in early 2021,” Charles Carmakal, Mandiant’s chief technical officer, said.

The hack exploited a software vulnerability in Barracuda Networks’ Email Security Gateway, compromising tens of thousands of computers globally.

The hacking began on Oct. 10, 2022, but the intrusions were only discovered by Barracuda on May 19, 2023. Counter-measures were promptly taken.

In response, the hackers immediately altered their malware and employed persistent, high frequency hacking attacks, targeting a number of victims located in at least 16 different countries.

On May 23, Barracuda asked Mandiant to investigate the hacking.

On June 6, Barracuda reiterated its advice to its impacted customers to “immediately isolate and replace compromised appliances.”

In an emailed statement Thursday, Barracuda said about 5 percent of its active Email Security Gateway appliances worldwide showed evidence of potential compromise. The company stated that it was providing replacement appliances to affected customers at no cost.

Mandiant’s investigation concluded with “high confidence” that the hackers were an organized team engaged in “espionage activity in support of the People’s Republic of China,” calling the hacking team an “aggressive and highly skilled actor.”

The hackers sent emails containing malicious file attachments to gain access to targeted organizations’ devices and data, Mandiant said. Of those organizations, 55 percent were from the Americas, 22 percent from Asia Pacific, and 24 percent from Europe, the Middle East, and Africa combined. Targets included foreign ministries in Southeast Asia, foreign trade offices, and academic organizations in Taiwan and Hong Kong, the company said.

Mandiant explained the majority impact in the Americas due to it being Barracuda’s main customer base.

The hackers operated at both the organizational and individual account levels and focused on issues that are high policy priorities for China, particularly in the Asia Pacific region, Mandiant said. The hackers searched for email accounts of people working for governments of political or strategic interest to China at the time they were participating in diplomatic meetings with other countries.

Mandiant said its investigation involved cooperation with multiple governments and intelligence agencies, commended Barracuda for its “decisive actions, transparency, and information sharing,” and provided its client with further “hardening, remediation and hunting” recommendations.

The Associated Press contributed to this article.

From NTD News