- The one-year anniversary of “de-banking” in Canada
- Truckers and post ipso facto due process
- CAT: A massive database of all stock trades
- The right to privacy gets bum rushed (again)
- The breathtaking bank crisis in Lebanon… The (Ukrainian) heart of darkness… Making “virtue signalers irate”… And more!
It was a year ago this week when a Western government took the unprecedented step of “de-banking” some of its citizens with no due process.
“All of my bank accounts, person[al] and corporate, and all my credit cards have been frozen,” said B.J. Dichter. “It feels like being banished from the medieval village, left to die.”
Dichter was among the leaders of the trucker convoy protesting Canada’s COVID vaccine mandates.
To shut down the protest, the government in Ottawa invoked the Emergencies Act of 1988 — imposing a sort of financial martial law. According to the Royal Canadian Mounted Police, financial institutions froze over 200 accounts belonging to individuals. Banks, brokerages, insurance companies — they were all deputized in the crackdown.
The people who were “de-banked” were “re-banked” a few days later, once the protest had been broken up. Prime Minister Justin Trudeau and Finance Minister Chrystia Freeland evidently felt they’d made their point.
Justin Trudeau, or as he’s known to some Canadians, “Prime Minister Zoolander”
Later in the year, the Canadian government convened an inquiry called the Public Order Emergency Commission — headed up by Justice Paul Rouleau of the Ontario Court of Appeal. If the de-banked didn’t get any due process, at least there would be hearings after the fact about whether they should have.
Rouleau issued his findings a few days ago — concluding “with reluctance” that Trudeau’s invocation of the Emergencies Act was legal.
Rouleau was conflicted, to be sure: Yes, he condemned the protesters on the grounds that “the government did not have a realistic prospect of productively engaging” with those who “believed COVID-19 vaccines were part of a vast global conspiracy to depopulate the planet.”
But he didn’t hold the government blameless: “Protest organizers’ mistrust of government officials was reinforced by unfair generalizations from some public officials that suggested all protesters were extremists.”
We remember that well — especially the member of parliament from Trudeau’s Liberal Party who said “Honk Honk” was code for “Heil Hitler.”
“The fact that protesters could be at once both the victims and perpetrators of misinformation,” Rouleau lamented, “simply shows how pernicious misinformation is in modern society.”
That nuance, however, was missing from most corporate media accounts of Rouleau’s findings: Among the folks who read only headlines, all they know is that he found the de-banking was “justified” and it “met the threshold” of the Emergencies Act. Case closed.
Nothing quite so draconian on the horizon stateside (at least not this morning, anyway) — but the Securities and Exchange Commission is about to launch a massive database of every stock trade.
Yes, your online brokerage already keeps extensive records under the (totally misnamed) Bank Secrecy Act of 1970. But starting next month, your broker will report all your trades — along with your name, address and year of birth — to the SEC.
The SEC says its motives are totally pure. The idea was first hatched after the “flash crash” of May 6, 2010 — when the Dow Industrials crashed 9% in a matter of minutes, only to recover most of those losses a couple of hours later. Obama’s SEC chair Mary Schapiro said regulators need the “data and means to exponentially enhance [their] abilities to oversee a highly complex market structure.”
And so was born the Consolidated Audit Trail, or CAT. The system started collecting trading data in 2020. Starting four weeks from today, it will collect customer info too.
“The Consolidated Audit Trail is intended to collect and accurately identify every order, cancellation, modification and trade execution for all exchange-listed equities and options across all U.S. markets,” writes Jennifer Schulp at Reason, “allowing the Securities and Exchange Commission (SEC) to track orders and identify who made them.”
By some estimates, the CAT will be the biggest database in the world — and thus perhaps the most attractive target for hackers in the world.
Chilling when you consider the SEC itself was hacked in 2016, no?
“Thousands of users (not just at the SEC) will have access to the CAT,” Schulp continues, “with vague standards guiding their use of the data accessed, creating even more security gaps.”
But even if the CAT works as advertised… and even if it doesn’t pose a massive security risk… doesn’t privacy count for anything?
“The non-financial costs of being surveilled reach to the very core of our humanity,” wrote SEC commissioner Hester Peirce in 2020. “Freedom of thought, expression and action are key to unlocking each person’s unique potential to contribute to society. Untargeted government surveillance programs, even well-intentioned ones, threaten that freedom. A fundamental expectation of a free people is to not be subject to unwarranted monitoring.”
Alas, Peirce was in the minority on the day the SEC adopted the final rules governing CAT.
You don’t need a wild imagination to see how the bureaucrats might abuse such detailed data — every trade you make, with your name on it. Invest in too many of the “wrong” companies or industries… and you might find yourself on a watchlist. And that’s a best-case scenario.
Nor is CAT the only threat the feds pose to your portfolio right now.
Last night during his exclusive Counterstrike Summit, Paradigm’s Jim Rickards revealed how the Biden administration has been conniving with “woke” Wall Street bigwigs to impose crushing new regulations on every publicly traded company.
If you missed this event, we urge you to watch the replay immediately at this link.
The short trading week is off to a rotten start — with all the major U.S. indexes down at least 1.6% as we write.
The mainstream takes are fatuous: “Higher Rates Rattle Wall Street,” says CNBC. “Concerns Over Fed Rate Policy,” frets The Wall Street Journal. Seriously? For the last several months, you could say that about any day in which the markets were down.
In any event, the Dow is down 545 points; 300 more and the Big Board will be below 33,000. The S&P 500 is only 12 points above the 4,000 level. The Nasdaq is down 2% at 11,549.
Walmart’s quarterly numbers were great, but its forecasts for the rest of the year, not so much; still, WMT shares are slightly in the green. Home Depot, on the other hand, is down 5.6% after missing on revenue and also issuing a glum outlook.
Gold keeps sinking, now $1,833. But silver’s up a nickel to $21.83. Crude is steady after last week’s beat-down, now $76.25.
The day’s economic data are a mixed bag…
- The “flash PMI” for February rings in at 50.2 — barely above the 50 dividing line between a growing economy and a shrinking one. Manufacturing is still in contraction territory at 47.8… but the service sector surprised to the upside at 50.5
- Existing home sales shrank 0.7% month-over-month and collapsed 36.9% year-over-year. Inventory is still tight at 2.9 months’ worth, but that compares with only 1.6 months a year ago. The median home price sits at $359,000, up barely from a year ago.
So… it doesn’t look as if the bank crisis in Lebanon is getting any better.
Lebanon has been in a nonstop economic meltdown since 2019. That year, the banking industry imposed limits on withdrawals.
At first, depositors resorted to the courts for redress; then they started taking matters in their own hands. Six months ago, we told you how a guy walked into a bank and took the staff hostage — threatening to set himself on fire unless he was allowed to withdraw $5,500 of his own savings.
This gambit became a thing; one day last September, five Lebanese banks were held up by depositors. The bank industry responded by imposing a bank holiday.
As hope continues to wither, folks are now simply torching the banks: As Reuters reports, “At least six banks had been targeted as the Lebanese pound hit a new record low on Thursday, a spokesperson for Depositors Outcry, a lobby representing depositors with money stuck in the country’s banking sector, said.”
The Lebanese pound has collapsed 98% against the U.S. dollar since 2019. Breathtaking…
A reader believes he’s caught us in a contradiction…
On Friday, I observed in relation to both Vietnam and the American Revolution that “It’s mighty hard to win a war on someone else’s home turf if those someone elses don’t want you around.”
The reader’s riposte: “And yet you published a prediction by Jim Rickards earlier in the week that ‘Russia will defeat Ukraine militarily…’
“A bit of a contradiction, no? So which do you really believe? Would you mind clarifying?”
The 5: Don’t forget one of the key issues at the heart of the conflict — the Ukrainian government’s repression of ethnic Russians and Russian speakers in the east of the country.
Here’s a map we ran shortly after Washington engineered regime change in Ukraine in 2014. The deeper the shade of red, the more Russian speakers…
Given a choice between living under the Ukrainian regime or living under the Russian regime, a lot of folks in the red parts of that map would probably opt for Russia. Indeed, leaders in the province of Donetsk petitioned to join Russia in 2014, and at that time Moscow turned them down.
“Victory” for Putin does not entail ruling over the whole of Ukraine; Putin wants nothing to do with, for instance, the Galician nationalists in the west who still swear allegiance to the Nazi war criminal Stepan Bandera. Moscow imposing its will on them would surely lead to a guerrilla-style quagmire on the order of what Washington faced in Iraq and Afghanistan.
Heck, victory for Putin might even entail a rump Ukraine in the west joining NATO — as long as there’s a large demilitarized zone in the middle…
After a reader voiced his distress at the thought of “profiting off the misery of others,” we heard from one of our longest of longtimers with a scathing take…
“More virtue signaling by someone who wants to elevate, or hide, their own lowly view of themselves by attempting to make others look worse.
“By warning others of a possible bad situation, the person who compassionately warns others is the problem? Rather than the fools who created the problem?
“The best way to prevent a problem is through raising awareness, which is what Jim Rickards did. If everyone knows the risk, action can be taken by those who heed it and reduce the impact on everyone, even those virtue signalers who are only worried about their own image.
“And if someone does make tons of money off of the idea, why is that evil? You can use that money to ease the suffering and help fellow citizens. But virtue signals aren’t about helping others, but are all about themselves and their image. That is what evil looks like! Let others suffer, as long as my image is raised.
“This is the typical decayed ‘thinking’ that has our country in such a mess and manifests itself in ESG-virtue-signaling busybodies who aren’t satisfied with simply managing their own lives, but insist on telling you how to think and manage yours.
“I’m going to buy some more ‘sin stocks,’ including cigarette and oil stocks, and use their large dividends to adopt even more kids from Africa as I know this will make virtue signalers irate that I am invested in sin stocks, rather than see the good that is being done.”
The 5: If you really wanna make ’em mad, make sure those kids are mining cobalt for their electric vehicle batteries!
Best regards,
Dave Gonigam
The 5 Min. Forecast
