90 Miles From Tyranny

Tuesday, March 8, 2022

Quick Hits Of Wisdom, Knowledge And Snark #281

Quick Hits Of Wisdom, Knowledge And Snark #280

Tech Trojan Horse: How the Senate is Poised to Codify Censorship of Social Media

Beware of politicians bearing reforms. Since the Trojans first wheeled a wooden horse into their fortified city, many are leery about “gifts” that may be heavily laden with dangers. That is true with the Trojan horse legislation just offered by Sen. Amy Klobuchar (D-Minn.). In the name of “reforming” the internet and bringing tech monopolies to heel, Klobuchar has penned a “Nudge Act” that would expand corporate censorship and speech controls.

Even the name is designed to be non-threatening. After all, who could oppose an act titled “Nudging Users to Drive Good Experiences on Social Media”? It is enough to garner the support of Sen. Cynthia Lummis (R-Wyo.). The act, however, is less of a nudge and more of a shove toward approved content and choices.

For years, President Joe Biden and Democratic members of Congress have pushed for greater and greater censorship on the internet and on social media. Liberals have found a winning strategy in using corporate censorship to circumvent constitutional limits on governmental speech controls. Senators like Richard Blumenthal (D-Conn.) warned social media companies that they would not tolerate any “backsliding or retrenching” by “failing to take action against dangerous disinformation,” and demanded “robust content modification” to block disfavored views on subjects ranging from climate control to elections to the pandemic.

The Nudge Act is arguably the most insidious of these efforts. Under the Act, Congress would enlist the National Academy of Sciences, Engineering and Medicine (NAS) to recommend sweeping design changes to Big Tech platforms like Facebook, Instagram and YouTube to “reduce the harms of algorithmic amplification and social media addiction.”

The Act is a masterpiece of doublespeak. It refers to developing “content-agnostic interventions” that could ultimately be enforced by a commission and the Federal Trade Commission (FTC). That sounds great; after all, many of us have called for years for a return to content neutrality on social media where sites function more as communication platforms, similar to telephone companies. However, that is clearly not the intent of the bill’s sponsors, who see it as a weapon against...

Amid widespread concerns of cascading Russian defaults, Gazprom creditors breathed a sigh of relief this morning on the news that the Russian energy giant had made a coupon payment on bonds due today. According to Bloomberg, some holders of a $1.3 billion Gazprom PJSC bond due Monday said they received payment in dollars, even after Russian President Vladimir Putin gave issuers the option of repaying foreign-currency debt in rubles.

Bondholders said they received cash to pay off the bonds Monday, according to the people with knowledge of the payments, who declined to be identified because they aren’t authorized to speak publicly about the matter.

News of the coupon payment sent the price of the bond sharply higher after crashing to 50% of par last week and was repaid at par today.

However, the hopeful mood was promptly dashed following a report from Morgan Stanley's Simon Waever who wrote that the odds of Russia making its foreign debt payments is diminishing as bond prices fall, recession in the nation looms and various payment restrictions pile up after the invasion of Ukraine.

“We see a default as the most likely scenario,” Simon Waever, the firm’s global co-head of emerging-market sovereign credit strategy, wrote in a Monday note. “In case of default, it is unlikely to be like a normal one, with Venezuela instead perhaps the most relevant comparison.”

Waever believes that the default may come as soon as April 15, which will mark the end of a 30-day grace period on coupon payments the Russian government owes on dollar bonds due in 2023 and 2043.

According to Bloomberg, Russian bonds due 2023 are trading at around 29 cents on the U.S. dollar, though there appears to have been no trades at those levels. In the days before Russia invaded Ukraine last month, both bonds were trading above par.

While it is rare for sovereign debt to tumble to the single digits, Morgan Stanley said Russia’s bonds “could get close.” Lebanon and Venezuela are the only recent examples of a country’s debt slipping so low.

“The potential for significant further selling will put additional downside pressure on...