Author Archive for: Rupture.Capital

More than 200,000 people died when the U.S. dropped atom bombs on Japan. For decades, those were listed as “tests”

Michael Burry.

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• Michael Burry warned surplus inventory leads to price cuts, slimmer profits, and pressure on stocks.
• Maersk just reported a shipping slowdown as customers are focused on destocking.
• The shipping giant’s earnings suggest “The Big Short” investor’s call was at least partly right.

Michael Burry warned last summer that American consumers would run short of cash and cut back on spending, leaving retailers with lots of excess inventory, which would lead to price cuts, slimmer profits, and stocks and cryptocurrencies tumbling. Maersk’s second-quarter earnings report on Friday suggests he was right on the inventory front at least.

“Shipping volumes remained weak due to continued destocking particularly in North America and Europe,” the company said. “The inventory correction observed since Q4 2022 appears to be prolonged and is now expected to last through year end.”

In other words, many of the shipping giant’s customers ordered fewer goods last quarter, and focused on offloading their bloated inventories instead. That trend fueled a 50% drop in sales within Maersk’s ocean division to $8.7 billion, which pulled its overall revenues down 40% to $13 billion.

The darkening backdrop led Maersk to slash its estimate for growth in global container volumes this year. It now expects a decline between 1% and 4%, down from a range of 0.5% growth to a 2.5% decline.

Burry, the investor of “The Big Short” fame, appears to have seen the downturn coming. He highlighted the “Bullwhip Effect” last year, which refers to an increase in consumer demand reverberating up the supply chain, causing retailers and wholesalers to overstock, and manufacturers to overproduce in preparation for a flurry of orders.

Burry also described the trend as “Just in Case” supply-chain management, or companies producing and stocking more goods in anticipation of a future surge in demand. The excessive supply results in heaps of surplus inventory, which forces retailers to cut their prices or be left with heaps of unsold goods. They also order less additional inventory to the detriment of companies like Maersk.

The Scion Asset Management chief noted last summer that American households were saving less, racking up credit-card debt, and cracking open their nest eggs to keep up with inflation and higher interest rates. He  warned they would exhaust their savings by last Christmas, hammering companies’ profits, causing a “disinflationary overstock consumer recession,” and tanking the prices of stocks and cryptocurrencies.

Households’ pandemic savings have lasted longer than he expected. But the fact that Maersk is seeing its customers cut back on shipping in order to reduce their inventories could signal that consumer spending is now under pressure as Burry predicted.

A personal project to save the world? Nothing beats land: Bill Gates is now Americas biggest farmer By Harry de Quetteville and Olivia Rutgard April 8, 2021 https://www.smh.com.au/business/markets/nothing-beats-land-bill-gates-is-now-america-s-biggest-farmer-20210408-p57hd0.html He is famous for his sensible office garb and digitally-amassed fortune, rather…

Presidential candidate Cornel West, who has spent most of his career advocating for higher taxes on the wealthy, owes the IRS more than half a million dollars in unpaid taxes.

Throughout his decades in the public eye, West, who is an academic at elite institutions and a bestselling author, has blasted the concentration of wealth at the top of U.S. society. Since announcing his run for president, first on the People’s Party ticket and currently on the Green Party’s, he has argued that taxes on the wealthiest Americans need to be “higher, much higher.”

But West hasn’t been putting his money where his mouth is—literally. An investigation by The Daily Beast, published Thursday, found that West owes $543,778.78 in unpaid taxes. The Beast cited tax filings in Mercer County, New Jersey, where West owns a house in the town of Princeton, and in Los Angeles, where West’s personal attorney is.

The IRS has filed liens against West for the years 2005, 2014, 2015, 2016, and 2017, when he failed to pay anywhere from more than $62,000 to nearly $137,000 in taxes. The liens, or federal claims against property for unpaid debts, are all still open.

Federal liens don’t officially close until 30 days after the debt has been paid, so it’s possible West has paid some of his taxes within the past few weeks or has set up a payment plan. But West offered no such explanation to the Beast. Instead, he denied that he hadn’t paid his taxes and said his accountant would provide more information. The accountant never reached out.

This is apparently not new behavior for West. By 2004, he had accumulated $724,397.26 in liens over the previous six years. He didn’t pay the balance until 2010. In 2012, he paid $34,069.93 in taxes owed for the year 2008.

Documents form California show that West owed $46,904.57 in taxes for 2011 and $112,449.79 in taxes for 2012. He didn’t resolve these liens until two months ago, about a week after he announced he was running for president.

West also has yet to pay a 2003 child support payment of $49,500.

These revelations are an important reminder to West, or anyone thinking of running for public office. Campaigning can be all fun and games, as it lets you travel around the country and spread your chosen message. Donors give you money or throw fancy parties for you.

But it also means that you are subjected to more intense scrutiny than ever before. If you have a single skeleton in your closet, it will be found.

News / 3rd August 2023

The campaign to fight U.S. inflation by upping interest rates has been going on for a year and a half — and its impacts are being felt around the world. On July 26, 2023, the Federal Reserve announced another quarter-point hike. That means U.S. rates have now gone up 5.25 percentage points over the past 18 months. While inflation is now coming down in the U.S., the aggressive monetary policy may…

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Jacob Chansley.

Brent Stirton/Getty Images

• The “QAnon Shaman” Capitol riot defendant has come to the defense of former President Donald Trump. 
• Trump was federally indicted on Tuesday in connection to the January 6 Capitol riot.
• The “shaman” slammed the indictment, telling Newsweek that Trump had “no role” in the insurrection. 

The infamous Capitol riot defendant known as the “QAnon Shaman” — whose ex-lawyer previously said felt “betrayed” by Donald Trump and was open to testifying against him — has now come to the defense of the former president over Trump’s indictment related to the deadly insurrection. 

The “shaman,” whose real name is Jacob Chansley, ripped the new federal indictment against Trump in an interview with Newsweek, saying that Trump played “no role whatsoever” when a mob of his supporters stormed the US Capitol on January 6, 2021. 

“I feel the notion of a Trump indictment related to the events of January 6th is further evidence that federal agencies have been corrupt and weaponized for decades by the DC Uniparty,” Chansley told Newsweek. 

Chansley called it “not fair at all” for Trump to be charged in the case and added that his “sympathies go out to Trump for everything he has endured for the American people due to the corruption in DC.”

Trump, who has now been indicted three times, was charged with four counts on Tuesday as part of the Justice Department’s criminal probe into 2020 election interference and the Capitol riot. 

Justice Department special counsel Jack Smith said after the indictment was released that the insurrection was “fueled by lies” from Trump.

But Chansley told Scripps News the former president “doesn’t deserve to be indicted whatsoever.”

Chansley, who has apologized for his role in the Capitol riot, was handed down one of the harshest sentences in connection with the insurrection. He was released from prison early after serving about 27 months of his 41-month sentence but recently said he regrets his guilty plea. 

Chansley told the BBC last month that statements his former lawyer made in an attempt to get him a lesser sentence were not true. 

“I never said I was duped by Trump,” Chansley told the news outlet.

An attorney for Chansley did not immediately respond to requests for comment by Insider on Tuesday. 

Elie Mystal

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