Mar 24

Today’s News 24th March 2020

  • Chinese Factories Working 24/7 To Build Ventilators For Italy, New York
    Chinese Factories Working 24/7 To Build Ventilators For Italy, New York

    Approximately 19% of those who contract coronavirus become seriously ill, according to a large Chinese study, while just under 14% fall into the ‘severe’ category, and 5% become critical – typically requiring a ventilator to breathe while suffering from multiple organ dysfunction.

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    And while the overall fatality rate is a matter of serious debate as many suspect vast underreporting of cases, for those who fall into the critical category, a shortage of respirators would logically increase fatalities among that demographic.

    Indeed there is a critical shortage of medical supplies across the United States, compounded by a drop in exports of masks, gowns, sanitizer, and other items from China as demand has surged across the world.

    To that end, there is a serious need for ventilators, which several companies – as well as Tesla CEO Elon Musk, have vowed to solve (a claim which ventilator manufacturers aren’t buying).

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    In Seattle, manufacturer Ventec Life Systems has been ramping up production to fill orders as quickly as possible.

    One Chinese company, Beijing Aeonmed Co., has been working around the clock since January 20 to crank out the life-saving machines, according to Bloomberg.

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    “There’s literally no country in the world that doesn’t want to buy a ventilator from China right now,” said company director Li Kai. “We have tens of thousands of orders waiting. The issue is how fast we can make them.”

    The company has been working three shifts to meet demand from international customers, and have been producing ventilators “non-stop” according to the report.

    As the global coronavirus death toll inches toward 15,000, doctors from Milan to New York are desperately seeking ventilators. In severe cases, the availability of a ventilator that can help a Covid-19 patient breathe can determine if he lives or dies. Late last week, New York Governor Andrew Cuomo said the state, which has about 5,000 to 6,000 ventilators, might need 30,000 of them. –Bloomberg

    “It’s ventilators, ventilators, ventilators,” NY Governor Cuomo told reporters. “That is the greatest need,” he added – saying that he has “people in China shopping for ventilators.”

    According to the Society of Critical Care Medicine, up to 960,000 patients may require ventilators due to coronavirus – however there are only around 200,000 such machines. In Italy, doctors have been forced to triage patients due to the severe shortage.

    The mad scramble for scarce medical supplies comes as China and the U.S. try to deflect blame for their handling of the disease. China has been seeking to claw back an international leadership role after early cover-ups helped the virus spread well beyond its borders. The country has sought to brand itself as Europe’s savior in the fight against the pathogen, providing masks and other supplies to the region’s virus hot spots. –Bloomberg

    “All the ventilator factories in China have reached their maximum capacity, occupied fully by foreign demand,” said director of supply chain at Vedeng.com, Wu Chuanpu. Vedeng connects medical equipment suppliers and buyers – and is receiving over 60 orders per day totaling hundreds or thousands of such machines. Many orders are from governments, he said.

    According to Wu, the factories need to remain at full capacity until May.

    “The expansion of the production line is very time-consuming and resources-intensive,” said Wu, adding that “It also involves personnel training. It is too cumbersome.”


    Tyler Durden

    Tue, 03/24/2020 – 02:45

  • COVID-19 & China's Propaganda Campaign In Europe
    COVID-19 & China’s Propaganda Campaign In Europe

    Authored by Soeren Kern via The Gatestone Institute,

    The Chinese government has been fast-tracking shipments of medical aid to Europe, which has become the epicenter of the coronavirus pandemic that first emerged in the Chinese city of Wuhan. The largesse appears to be part of a public relations effort by Chinese President Xi Jinping and his Communist Party to deflect criticism over their responsibility for the deadly outbreak.

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    Beijing’s campaign as a global benefactor may deliver results in Europe, where pandering political leaders have long been notoriously fearful of antagonizing the European Union’s second-largest trading partner. What remains unclear is if European publics, which are bearing the brunt of the suffering caused by the epidemic, will be as easily willing to overlook the malfeasance of Chinese officials.

    In what can only be described as a geopolitical humiliation, Ursula Von der Leyen, the president of the European Commission, the administrative arm of the European Union, which touts itself as the “largest economy in the world,” heaped praise on Communist China for donating an inconsequential amount of medical equipment to the bloc. On March 18, she tweeted:

    “Spoke with Chinese PM Li Keqiang who announced that China will provide 2 mil surgical masks, 200,000 N95 masks & 50,000 testing kits. In January, the European Union helped China by donating 50 tons of equipment. Today, we’re grateful for China’s support. We need each other’s support in times of need.”

    The European Union has been incapable of providing meaningful assistance to Italy, the bloc’s third-largest member, which has been especially hard hit by the virus. After Germany, the EU’s most powerful member, banned the export of medical protection gear to avoid its own supply shortages of masks, gloves and suits, China stepped in.

    On March 12, China sent to Italy a team of nine Chinese medical staff along with some 30 tons of equipment on a flight organized by the Chinese Red Cross. The head of the Italian Red Cross, Francesco Rocca, said that the shipment “revealed the power of international solidarity.” He added:

    “In this moment of great stress, of great difficulty, we are relieved to have this arrival of supplies. It is true that it will help only temporarily, but it is still important. We have a desperate need for these masks right now. We need respirators that the Red Cross will donate to the government. This is for sure a really important donation for our country.”

    In recent days, China has also sent aid to:

    • Greece, March 21. An Air China plane carrying 8 tons of medical equipment — including 550,000 surgical masks and other items such as protective equipment, glasses, gloves and shoe covers — arrived at Athens International Airport. The Chinese Ambassador to Greece, Zhang Qiyue, referred to words by Aristotle: “What is a friend? A single soul living in two bodies.” He said that “difficult times reveal true friends” and that China and Greece are “working closely together in the fight against the coronavirus.” This, he said, “confirms once again the excellent relations and friendship between the two peoples.”

    • Serbia, March 21. China flew six doctors, ventilators and medical masks to Serbia to help Belgrade halt spreading of the coronavirus infection. “A big thank you to President Xi Jinping, the Chinese Communist Party and the Chinese people,” said Serbian President Aleksandar Vucic. China’s ambassador to Belgrade, Chen Bo, said the aid was a sign of the “iron friendship” between the two countries. The Chinese news agency Xinhua reported: “President Xi attaches great importance to the development of China-Serbia relations, and believes that through the joint battle against the epidemic, the two countries’ time-tested traditional friendship will gain more hearty support from their people, and their comprehensive strategic partnership will grow deeper and rise to a higher level.

    • Spain, March 21. The founder and president of the Chinese technology company Huawei, Ren Zhengfei, donated one million face masks. They were expected to arrive at Zaragoza Airport in northeastern Spain on March 23. The masks will be stored at a warehouse belonging to the Spanish apparel retailer Zara. From there, Zara will put its logistics network at the service of the Spanish government. This shipment could be the first of several, as dozens of Chinese suppliers that have worked with Zara for years are reportedly showing a willingness to send material. The United States has warned Spain about the security risk inherent in opening its fifth-generation communications networks to Chinese mobile technology providers, including Huawei.

    • Czech Republic, March 21. A Ukrainian cargo plane reportedly carrying 100 tons of medical supplies from China arrived at the airport in Pardubice, a city situated 100 kilometers east of Prague. On March 20, a Chinese plane carrying one million masks arrived in the Czech Republic, which reportedly ordered another 5 million respirators from China along with 30 million masks and 250,000 sets of protective clothing.

    • France, March 18. China sent to France, the second-most powerful country of the European Union, a batch of medical supplies, including protective masks, surgical masks, protective suits and medical gloves. The Chinese Embassy in France tweeted: “United we will win!” The following day, China sent a second batch of supplies. The Chinese Embassy tweeted: “The Chinese people are next to the French people. Solidarity and cooperation will allow us to overcome this pandemic.”

    • The Netherlands, March 18. China Eastern Airlines, China Southern Airlines and Xiamen Airlines, codeshare partners with KLM Royal Dutch Airlines, donated 20,000 masks and 50,000 gloves. The shipment arrived at Amsterdam Airport Schiphol on a Xiamen Airlines flight. “These are extremely difficult times for our country and our company, so we are very happy with this help for KLM and for the Netherlands,” KLM CEO Pieter Elbers said. “Less than two months ago, KLM made a donation to China and now we are being helped so wonderfully and generously.”

    • Poland, March 18. The Chinese government pledged to send Poland tens of thousands of protective items and 10,000 coronavirus test kits. On March 13, the Chinese Embassy in Warsaw sponsored a videoconference during which experts from China and Central Europe shared their knowledge on tackling the coronavirus. Police Foreign Minister Jacek Czaputowicz thanked China for its support and stressed the need for continued cooperation with Beijing, including sharing experience in combating the pandemic.

    • Belgium, March 18. A Chinese cargo plane carrying 1.5 million masks landed at Liege Airport. The masks, which will be distributed to Belgium, France and Slovenia, were donated by Jack Ma, the founder of Alibaba, a Chinese ecommerce giant known as the “Amazon of China.”

    • Czech Republic, March 18. A plane carrying 150,000 test kits for coronavirus landed in Prague. The Ministry of Health paid about CZK 14 million ($550,000) for 100,000 testing kits, while another 50,000 kits were paid for by the Ministry of the Interior. Transport was provided by the Ministry of Defense.

    • Spain, March 17. A Chinese plane carrying 500,000 masks arrived at Zaragoza Airport. “The sun always rises after the rain,” Chinese President Xi Jinping told Spanish Prime Minister Pedro Sánchez. He said that the friendship between China and Spain will be stronger and bilateral ties will have a brighter future after the joint fight against the virus. Xi said that after the pandemic, both countries should intensify exchanges and cooperation in a wide range of fields.

    • Belgium, March 16. Another shipment of medical supplies donated by the Jack Ma Foundation and Alibaba Foundation for epidemic prevention in Europe arrived at Liege Airport.

    Fortune magazine explained the motivation behind China’s propaganda push:

    “For China, the outreach to Europe is part of an effort to claw back an international leadership role after early cover-ups helped the virus spread well beyond its borders. President Xi Jinping’s government has sought to silence critics, including reporters and online commentators, and also spread conspiracy theories about where the virus originated.

    “Geopolitically, China’s move to brand itself as Europe’s savior aims to improve its standing on a global stage as both spar with the Trump administration. China and the U.S. have continued a wider fight for global influence — Beijing kicked out more than a dozen American journalists this week — while also seeking to deflect blame for their handling of the disease.”

    In an interview with the UK-based newspaper Guardian, Natasha Kassam, a former Australian diplomat, said:

    “Now we see Chinese officials and state media claiming that China bought the world time to prepare for this pandemic. We know the propaganda machine within China is able to rewrite history but now we are seeing that replicated overseas. China’s victory over Covid-19 has already been written and authorities are trying very hard for that message to be received overseas.”

    In an essay for the Spanish publication Libertad Digital, commentator Emilio Campmany astutely explained:

    “The huge Chinese propaganda apparatus has been launched. In Italy they feel, with good reason, abandoned by the European Union and are grateful for the help that the Asian country is giving them. This has been suitably amplified by the Italian media.

    “This is a propaganda operation that hides various truths. The first and most important is that the culprit for this pandemic is the Chinese regime. It does not take any conspiracy theory to point it out. It was widely recognized that Chinese live animal markets are a very serious epidemic hazard. The very severe communist regime of the people’s republic, which controls everything for the welfare of the citizens, has been unable to shut them down. When the first cases emerged, it took forever for the highly efficient Communist Party to react and instead devoted its myriad resources just to hiding the truth. When it could no longer hide what was happening, it intervened brutally, and only in this way has it managed to stop the epidemic, not without first giving rise, due to its negligence, to the virus spreading throughout the world.

    “The second is that communist bestiality is not necessary to effectively combat the virus. Infinitely better results can be achieved with capitalist intelligence, as has been shown by South Korea, which, having been much more capable than China, is not dedicated to paying for items in the West. For days now, this country has shown how valuable it can be to carry out massive tests. That is the best way for now, and the incredible thing is how long it took the Italians and the Spanish to realize this. However, this delay is not a consequence of not being blessed with two communist regimes, but rather of being governed by incompetents who, above all in our case, are that, socialists and communists.

    “China wants to take advantage of this calamity to wrest global leadership from the United States. It will be the communist country that makes us the most energetic medicines to fight the virus. It will discover the vaccine before anyone else and distribute it worldwide in record time. It will buy our assets and invest in our countries to rescue our economies. Ultimately, it will claim to be our savior.“


    Tyler Durden

    Tue, 03/24/2020 – 02:00

  • UK, Europe & IMF Ramp Up Pressure For Trump To Ease Sanctions On Virus-Ravaged Iran
    UK, Europe & IMF Ramp Up Pressure For Trump To Ease Sanctions On Virus-Ravaged Iran

    Reports and in some cases video began emerging last week of mass shipments of humanitarian supplies being halted and grounded by skittish EU countries worried about violating US-led sanctions on Iran. 

    This as Iranian leaders have lashed out at Washington for ensuring a worsening coronavirus death toll through its “inhuman” sanctions. But the White House has also been coming under heightening pressures from European allies as well, including surprisingly by the UK, which has up to this point by and large stood by Trump’s “maximum pressure” campaign aimed at ousting the government in Tehran.

    “The U.K. has quietly prodded the Trump administration to ease sanctions because of the crisis, the Guardian reported, without saying where it obtained the information,” Bloomberg writes Monday. “On March 17, Iran granted temporary release to British-Iranian Nazanin Zaghari-Ratcliffe, who has been in jail in Tehran since 2016.” This is being seen as part of a significant broader thawing in UK-Iran relations amid the pandemic crisis.

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    Protests outside the Treasury Department. Image source: Medea Benjamin/Common Dreams

    Iran’s recently releasing some 85,000 minor offenders from its packed prisons across the country has resulted in the early good faith return of foreign nationals previously accused of spying.

    “On Saturday, a French scholar detained in Tehran was released after he showed signs of the coronavirus, while an Iranian engineer held in France and wanted by the U.S. was released by authorities there,” Bloomberg continues. “The apparent prisoner exchange was denounced by the U.S., which had sought the Iranian engineer’s extradition.”

    The US State Department has claimed it does have ‘humanitarian channels’ in place as well as exemptions authorizing US companies to sell and ship select medicines and hospital equipment, however, reports suggest American companies are wary of jumping in and possibly suffering punishment.

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    The pressure for some kind of dramatic blanket easing of US sanctions is only set to grow, given that Tehran has for the first time in a half-century turned to the IMF: 

    Iranians say that their economy is weak and unable to cope with the humanitarian toll because of the U.S. sanctions. Last week, Iran turned to the International Monetary Fund for the first time since the 1960s for aid, though Ali Vaez, the Crisis Group’s Iran project director, said the U.S. may try to block the IMF loan in order to keep up the pressure on the regime.

    Should Washington block such crucial aid as more and more Iranians die of Covid-19 amid a devastated health system in the country, it could be the final straw that encourages Britain to finally break from Washington’s Iran policy. 

    Washington’s growing reputation as a ‘monster’ inflicting unneeded extra punishment on the suffering Iranian people will also be further cemented in the minds of world leaders across the globe.


    Tyler Durden

    Tue, 03/24/2020 – 01:00

  • No Refunds: Costco Hoarders Discover They Can't Return Toilet Paper
    No Refunds: Costco Hoarders Discover They Can’t Return Toilet Paper

    Panic hoarders who rushed into Costco to buy years-worth of toilet paper are finding themselves out of luck when it comes to the big-box store’s typically generous return policy.

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    Those who have regrets after realizing that COVID-19 isn’t a ‘pooping disease’ were met with signs at various Costco locations informing them that they won’t be able to return all that toilet paper, paper towels, sanitizing wipes, water, rice and lysol they bought in anticipation of a societal collapse, according to brobible.

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    Costco, meanwhile, may have over-bought in anticipation of sustained demand which has petered out.

    It looks like “the whole toilet-paper craze has calmed down,” tweeted one shopper.

    Now what to do with all that TP?

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    Tyler Durden

    Tue, 03/24/2020 – 00:30

  • Sperm-19 And Egg-18: Squashing The Virus Of Death
    Sperm-19 And Egg-18: Squashing The Virus Of Death

    Authored (satirically) by Vladimir Golstein via Off-Guardian.org,

    Scientists at Michael Bloomberg School of Multiplication at Johns Hopkins University have discovered a new and highly dangerous and contagious source of death. It is called life.

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    The discovery was long in the making, with some great sages of Ancient world expounding it, but, it could not be scientifically proven, until the scientists zeroed in on a small mountainous region in Nepal, where people (average age 90) all of the sudden began to die. They were healthy before and then they began to drop like flies, reported local newspaper.

    The team of American researchers from aforementioned university began to eliminate all the possible causes of death: these guys don’t drive, they don’t drink, they practice peaceful coexistence, and they eat solely vegan food. Consequently, there was only one suspect left. It is the virus called life, caused by the two highly powerful strains of this virus, called Sperm19, and Egg18.

    Once the discovery has been made, the scientists got to work and came to the chilling discovery that explosion of life eventually leads to explosion of death: both within the species, and within the biosphere. They were helped in this discovery by the team of the intrepid reporters from two British news outlets.

    While The Guardian was updating its daily map of death – with highly vivid diagrams of new death explosions all over the planet, BBC worked very hard at creating the map of newly born. And then: Eureka. When one lonely British nerd, named White Helmet Belincat and still living in the basement of his mom’s house, had juxtaposed two maps, the uncontestable pattern began to emerge.

    But how do you convince the population, that one of the activities they so much like to get engaged into, such as making babies, leads to death?

    Leave it to CNN and the American knowhow. Hollywood actors, celebrities, the most prominent politicians and scientists began to preach all forms of non-reproductive sex. While making some inroads among gay and transgender communities, the message kept on falling on dead ears among the rest of the population.

    Until a new crusader, called Virgin Greta, was catapulted into stardom by mass media. You sentenced me to death, she began to scream to her parents, then to her local Swedish community, and eventually, she delivered her message to UN. How dare you? How dare you to send us to schools, where they teach us sex education. Just abstain, Just say no! Who needs that stupid animalistic, germ-multiplying, baby producing activity to begin with?

    With Greta onboard, the mass media, consistent of the most conscientious and most responsible members of the society began a new campaign at nipping life at the bud.

    Media began to parade the experts in the field, who demanded drastic actions from the government. Our government is doing nothing. In fact, such people like Trump and Johnson, along with former leaders, like Clinton or Kennedy, demonstrate a highly unhealthy attraction to sex with the opposite gender. Trump was clearly the worst, populating White House with attractive females, and promoting baby making even without a dialogue: just grab them by the … he preached.

    With the epidemic of deaths, occurring now all over the world, in the countries with highly old and decrepid population in particular, there was no time to waste. In comes the foremost scientist of his generation, the Director of the Institute of Immunology, and the Winner of Bloomberg Award of Excellence, Doctor Faquci, who, summarizing the finding of other scientists, begins to preach an active intervention:

    It is not enough to supply all the population with birth-control methods. Besides, our economy being prophet driven and controlled by the lobbyists of children food, and children-cloth industries, are constantly sabotaging our efforts of dressing the population in condoms. We need more active measures.

    People can’t get in groups – there is always a danger that a man can meet a woman in a cinema, bar, or dance club. People should be locked up in their rooms. Preferably individually. But in any case, no mixing of genders.

    When you lock people up, you know damn well, what they gonna do. So say yes to sex, but no to reproductive sex. The virus of death had to be conquered once and for all, and our exceptional nation is uniquely qualified to do so. We have enough cooks, zealots, maniacs, and fools with guns, to see us through the victory.

    While the president of the country, the aforementioned, evil Trump, has originally resisted the idea: he happened to like both babies and baby-making, the pressure from the media, security apparatus, and the most progressive governors, proved too much even for his thick head. The governors of two most progressive States, California and New York, declared a total lockdown with people locked in the single rooms. On odd days, males were allowed to go shopping, on even – females. Transgender and post-childbearing age adults were allowed to shop every day, at the specially designated hours. Soon, other states had followed.

    Special unit of the security apparatus, has been created to confront Russian and Chinese counter-efforts, which consisted in parading exceptionally attractive females, and happy looking families in their social media and TV. These outlets were declared, “state sponsored propaganda” and banned from all known media outlets.

    Army was introduced into the cities, to make sure that everyone follows the orders. Maternity wards of the hospitals were quickly transformed into sterilization clinics, where first celebrities, and then regular people decided to deal a deadly blow to the virus of life, sorry of death. Families who sterilized in bulk (parents and children) were given Greta awards – a condom made of gold, with the words, “how dare you” written on it. The virus of death had eventually been squashed.

    (This story had been written on a piece of paper, found in the lonely bottle, floating down the Mississippi River).


    Tyler Durden

    Tue, 03/24/2020 – 00:05

  • DOJ Orders First Shutdown Of Website Selling Fraudulent COVID-19 Cure 
    DOJ Orders First Shutdown Of Website Selling Fraudulent COVID-19 Cure 

    The US Department of Justice (DOJ) announced on Sunday that “it has taken its first action in federal court to combat fraud related to the coronavirus (COVID-19) pandemic” via the shutdown of a website offering a cure. 

    Detailed in the civil complaint filed on Saturday, the operators of the website “coronavirusmedicalkit.com,” which claimed to sell vaccine kits for COVID-19, were engaged in a “wire fraud scheme seeking to profit from the confusion and widespread fear surrounding” the virus crisis. 

    “Information published on the website claimed to offer consumers access to World Health Organization (WHO) vaccine kits in exchange for a shipping charge of $4.95, which consumers would pay by entering their credit card information on the website. In fact, there are currently no legitimate COVID-19 vaccines and the WHO is not distributing any such vaccine,” the DOJ said. 

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    US District Judge Robert Pitman ordered the site to shut down on Saturday, according to his statement. As of Monday morning, a search of the site comes up with a blank webpage with a text that reads: “Sorry… coronavirusmedicalkit.com could not be found.” 

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    Assistant Attorney General Jody Hunt of the DOJ’s Civil Division said the government will be actively monitoring the internet for other COVID-19 fraud-related websites or schemes: 

    “The Department of Justice will not tolerate criminal exploitation of this national emergency for personal gain,” said Hunt. “We will use every resource at the government’s disposal to act quickly to shut down these most despicable of scammers, whether they are defrauding consumers, committing identity theft, or delivering malware.”

    “Attorney General Barr has directed the department to prioritize fraud schemes arising out of the coronavirus emergency,” said US Attorney John F. Bash of the Western District of Texas.

    “We therefore moved very quickly to shut down this scam. We hope in the future that responsible web domain registrars will quickly and effectively shut down websites designed to facilitate these scams. My office will continue to be aggressive in targeting these sorts of despicable frauds for the duration of this emergency.”

    “At a time when we face such unprecedented challenges with the COVID-19 crisis, Americans are understandably desperate to find solutions to keep their families safe and healthy,” said Special Agent in Charge Christopher Combs of the FBI’s San Antonio Field Office.

    “Fraudsters who seek to profit from their fear and uncertainty, by selling bogus vaccines or cures, not only steal limited resources from our communities, they pose an even greater danger by spreading misinformation and creating confusion. During this difficult time, protecting our communities from these reprehensible fraud schemes will remain one of the FBI’s highest priorities.”

    The DOJ provided very few details about the scope of the fraud but said an investigation is ongoing. 

    The intervention by the DOJ comes after New York Attorney General Letitia James sent a cease-and-desist order to televangelist Jim Bakker, ordering him to stop promoting an alleged cure for the virus. 

    James has also ordered Alex Jones to stop making misleading claims about virus cure related products offered on Infowars.com.


    Tyler Durden

    Mon, 03/23/2020 – 23:45

  • The Everything Bubble, Fictitious Capital, & COVID-19
    The Everything Bubble, Fictitious Capital, & COVID-19

    Authored by Frank Lee via Off-Guardian.org,

    The years since the 1970s are unprecedented in terms of their volatility in the price of commodities, currencies, real estate and stocks. There have been 4 waves of financial crises: a large number of banks in three, four or more countries collapsed at about the same time. Each wave was followed by a recession, and the economic slowdown which began in 2008 was the most severe and most global since the great depression of the 1930s.”

    Manias, Crashes and Panics – Kindelberger and Aliber

    Interestingly enough 1971 was the year when Nixon took the world off the gold standard, which had been in effect since 1944. Fiat-bugs please note.

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    More to the point, however. Booms and busts have always been normal in a capitalist economy. But in recent years this has been a feature which has been exacerbated by and involves that part of the economy indicated by the acronym FIRE (Finance, Insurance and Real Estate) and its growing importance in the economy in both qualitative and quantitative terms.

    Financialisation is a process whereby financial markets, financial institutions, and financial elites gain greater influence over economic policy and economic outcomes. Financialisation transforms the functioning of economic systems at both the macro and micro levels. Its principal impacts are to:

    1. elevate the significance of the financial rent-seeking sector relative to the real value-producing sector

    2. transfer income from the real value-producing sector to the financial sector

    3. increase income inequality and contribute to wage stagnation

    Since 1970 this part of the economy has grown from almost nothing to 8% of US Gross Domestic Product (GDP). This means that one dollar in every ten is associated with finance. In terms of corporate profits finance’s contribution now represents around 40% of all corporate profits in the US. This is a significant figure and, moreover it does not include those overseas earnings of companies whose profits are repatriated to their countries of origin.

    Thus, the increasing presence and role of finance in overall economic activity and the increase of profits channelled to the financial sector represent the salient indicators as to what has been termed financialization. It is argued by some that financialization may put the economy at risk of debt deflation and prolonged recession.

    Financialisation operates through three different conduits:

    1. changes in the structure and operation of financial markets,

    2. changes in the behaviour of nonfinancial corporations, and

    3. changes in economic policy.

    Countering financialisation calls for a multifaceted agenda that:

    1. restores policy control over financial markets

    2. challenges the neoliberal economic policy paradigm encouraged by financialisation

    3. makes corporations responsive to interests of stakeholders other than just financial markets

    4. reforms the political process so as to diminish the influence of corporations and wealthy elites

    The rent-seeking nature of finance is common to all forms of insurance, banking, monopolistic pricing, and property. This has not always been the case, or at least wasn’t as pronounced as it is at present. There was a time when the banking system was junior partner in the relationship between banks and industry. Banks provided industry with loans for investment with a view to maximising profit for both. This is patently not the case today.

    Generally speaking, banks will lend for property purchases, stock buy-backs, and perhaps loans for dubious mergers and acquisitions. Moreover, when we speak of ‘profits’ this has now assumed a rather obscure meaning. Profits were generally understood as a realization of surplus value.

    Firms made stuff – goods and services – which had a value, which was then sold on the market at a profit. Given the competitive nature of the system, firms invested in increased capital formation and output which increased productivity, surplus value and ultimately profit.

    With regard to Investment banks like Goldman Sachs and the commercial banks they do not create value; they are purely rent-extractive. For example, commercial banks make a loan out of thin air, debit this loan to the would-be mortgagee who then becomes a source of permanent income flow to the bank for the next 25 years.

    Goldman Sachs makes year-on-year ‘profits’ by doing – what exactly? Nothing particularly useful. But then Goldman Sachs is part of the cabal of central banks and Treasury departments around the world. It is not unusual to see the interchange of the movers and shakers of the financial world who oscillate between these institutions. Hank Paulson, Mario Draghi, Steve Mnuchin, Robert Rubin … on and on it goes.

    This financialised system now moves in ever-increasing levels of instability. But what did we expect when the whole institutional structure – its rules, regulations and practises – were deregulated and finance was let off the leash.

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    Thatcher, Reagan, the ‘Big Bang’ had set the scene and there was no going back: neoliberalism and globalization had become the norm. From this point on, however, there followed a litany of crises mostly in the developing world but these disturbances were in due course to move into the developed world. Serial bubbles began to appear.

    US stock prices [which of course would only ever go up] began to decline in the Spring of 2000, and fell by 40% in the next three years. Whilst the prices of NASDAQ stocks decline by 80%.”

    Manias, Panics and Crashes – Kindleberger and Aliber

    Chastened monies moved out of this market and into property speculation. It is common knowledge what happened next. The run-up to 2008 was floated on a sea of cheap credit. The price of stocks pushed property prices to vertiginous heights until – pop, went the weasel.

    The reason was quite simple. Any boom and bust has an inflexion point where boom turns to bust. This is when buyers incomes, and borrowers inability to extend their loans could no longer support the rise in the price level. Euphoria turned to panic as borrowers who once clamoured to buy were now desperate to sell. 2008 had arrived.

    The strange thing, however, regarding the property price boom-and-bust was that it was based upon pure speculation. Prices went up, prices went down. Some – a few – made money, quite a few lost money. Investors were wondering what had happened to their gains which they had made during the up phase. Where had all that money gone?

    The short answer is – nowhere. It was never there in the first place. It was fictitious capital. Gains which had appeared and then disappeared like a will ‘o’ the wisp. As opposed to physical capital – machinery, labour and raw materials, and money capital which enabled through purchase the production of value to take place, we have fictitious capital which is a claim on future production. If my house goes up by 10% that is a capital gain, if everybody’s house goes up by 10% that is asset-price inflation

    Fictitious capital is a by-product of capitalist accumulation. It is a concept used by Karl Marx in his critique of political economy. It is introduced in chapter 25 of the third volume of Capital. Fictitious capital contrasts with what Marx calls “real capital”, which is capital actually invested in physical means of production and workers, and “money capital”, which is actual funds being held.

    The market value of fictitious capital assets (such as stocks and securities) varies according to the expected return or yield of those assets in the future, which Marx felt was only indirectly related to the growth of real production. Effectively, fictitious capital represents “accumulated claims, legal titles, to future production’’ and more specifically claims to the income generated by that production.

    The moral of the story is that it is not possible to print wealth or value. Money in its paper representation of the real thing, e.g., gold, is not wealth it is a claim on wealth.

    Of course, this would be lost on establishment economists, bankers, and financial journalists, whose view is that the policy should be QE, liquidity injections, and so forth. A one-trick pony.

    And what has all of this to do with Coronavirus? Well, everything actually.

    I take it that we all knew that the grotesquely overleveraged world economy was heading for a ‘correction’ but that’s a rather a soothing description. “Massive correction” would be a better description. That is the nature of the beast. The world was a bubble of paper money looking for a pin. It found one.

    Have a nice day all.


    Tyler Durden

    Mon, 03/23/2020 – 23:25

  • 67 Million Americans Could Miss Their Credit Payments Thanks To Virus Crisis
    67 Million Americans Could Miss Their Credit Payments Thanks To Virus Crisis

    As social gatherings are limited and businesses shutter operations to reduce the spread of COVID-19, millions of Americans could be laid off in the next couple of months as the economy dives into a depression. 

    Most of the job loss will be seen across both the services and manufacturing sectors. The National Restaurant Association estimates that five to seven million jobs could be lost in the next three months. While Treasury Secretary Steve Mnuchin said if government stimulus is not directed at businesses and households, upwards of 33 million jobs could be eliminated.

    With a depression imminent, WalletHub anticipates 67 million Americans could have difficulty servicing their credit cards due to virus impacts. As we’ve routinely pointed out, credit card usage soared to a record high in December.

    “Roughly 67 million Americans anticipate having trouble paying their credit card bills because of the coronavirus. Their struggles could easily ripple through the economy if left unaddressed, especially considering the more than $1 trillion in credit card debt currently owed by U.S. consumers,” said WalletHub CEO Odysseas Papadimitriou.

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    According to WalletHub’s survey completed on March 9-12, the virus is the most significant stressor among Americans. The second stressor is money problems, then the 2020 election, and people’s current job situation.

    “We’ve seen a lot of panic buying as a result of the coronavirus, with people purchasing things like toilet paper en masse, largely because they don’t know what else to do. Furthermore, 94 million Americans have canceled or plan to cancel travel plans due to the coronavirus,” said WalletHub analyst Jill Gonzalez.

    “Less apparent, however, is the panic saving that people are engaged in right now. Around 158 million Americans, or roughly 63% of adults, say they are saving more, as opposed to buying more, as a result of this crisis. If there’s a bright side to all of this, people saving more money than usual might just be it.”

    Credit card companies have started rolling out relief programs to affected customers.

    “Yes, credit card companies should give relief to affected customers, just like they’ve done during major natural disasters in recent years,” Papadimitriou said. 

    We wonder if the proposed stimulus checks for Americans, ranging from $1,000 to $2,000 per person, will be used for paying credit card bills or be used at Costco stores to buy toilet paper and milk?


    Tyler Durden

    Mon, 03/23/2020 – 23:05

  • COVID-19 Lesson #1 For Investors: Beware Predictions Of Market Bottoms
    COVID-19 Lesson #1 For Investors: Beware Predictions Of Market Bottoms

    Authored by Daniel Nevins via NevinsResearch.com,

    With hoops “out” and exponentials “in” (referring to March Madness, the 2020 pandemic definition), there’s a new, customary disclaimer on economics and financial sites. Mine says that I, too, knew nothing about infectious disease modeling only two months ago. But I’m catching up, just like everyone else. By now, I might have reached a “Dummies Guide” standard, and I’ll keep this article at about that level.

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    So with that preface out of the way, I’ll first offer a health warning of sorts about a type of COVID-19 chart that’s popular with market bulls. Here’s a version that appeared in the New York Times:

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    And here’s a second version that uses the same axes but with different data:

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    The second chart bounced around Twitter for awhile and then appeared on at least one financial site – to support a breezy message that people should stop panicking and start preparing for a surprise melt-up in stocks.

    And why do the charts need a health warning? The problem is the horizontal axis—showing the statistic that epidemiologists call R0—which is presented as though it’s the only information you need to understand how widely a disease spreads.

    In fact, modelers who actually use R0 stress that you can’t summarize the spread of an epidemic with that single input. They say that R0 changes with time and place—it’s not actually a constant. Also, it can approximate the spread of a disease only if the entire population is vulnerable. Critical factors such as prior immunities are handled through other model inputs, not R0.

    More to the point, we already know how widely COVID-19 is spreading, and we can readily compare that information to every other disease that’s already come and gone. So let’s stop pretending that R0—an incomplete and imprecise contagion statistic—somehow does a better job than ripping off the blindfold and watching what’s really happening, in real time.

    The reality-based approach tells us that SARS, to pick one comparable, peaked at about 8000 cases in 2003. By contrast, COVID-19 is rocketing through the hundreds of thousands, certain to hit millions and by some forecasts billions. That’s a stark difference that seems highly relevant, and yet you won’t find it on the R0 chart, no matter how many versions you conjure up.

    The eyes-open approach also says to be wary of claims that “we’re very close to a melt-up” or “the bottom may be closer than you think” or “we’ve probably seen the worst.” (Those are just a few of the bullish stock market predictions we’ve been seeing lately.) To explain why, I’ll first extend the analysis I shared in my last article.

    Case Trajectory Update

    For background, my March 2 article showed how the confirmed case trajectory could evolve if the most bearish epidemiological forecasts prove accurate. This time, I’ll set the forecasts aside and examine how the trajectory has changed in recent weeks.

    I’ll exclude both China and Iran, because their reported numbers fail to match the on-the-ground evidence. I’ll then divide everyone else into two groups:

    • South Korea and Singapore, which I’ll call the “most prepared” group (MPG). These countries implemented a variety of effective disease-containment strategies after suffering from other epidemics in recent years.

    • The rest of the world, which I’ll call the “least prepared” group (LPG). That naming might be unfair to a few other well-prepared countries, but further regrouping wouldn’t materially change the conclusions.

    Here are the confirmed cases for each group through March 21:

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    As of today, the MPG has successfully “flattened the curve,” whereas the LPG continues to see exponential growth. Here are the best-fit exponential curves for the LPG, calculated on a weekly basis from February 15 until March 21:

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    The weekly curves steepened sharply in March, probably due to increased testing. But let’s take a closer look. The next chart shows the daily evolution for the “steepness statistic,” which is the part of the exponential function that determines the trajectory:

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    According to the chart, the case trajectory has passed through two stages since late February:

    1. It steepened almost continuously as testing activity increased.

    2. It then peaked on March 14 and started to flatten.

    So that’s the past, but what about the future? How quickly, if at all, will the steepness statistic fall?

    I doubt anyone can answer that with precision, especially with countries such as the U.S. only recently ramping their testing. But it sure seems as though the overall trend should continue downwards. With the extreme containment measures currently in place, it’s hard to imagine any other result. Or maybe I just don’t want to imagine a different result.

    Either way, let’s be optimistic. Let’s agree that the March 14 peak delivers good news. It says the first derivative of the daily new case count is no longer rising day-after-day-after-day. That might be hard to conceptualize, but it’s exactly how these processes change direction. The first derivative turns downwards, and then the daily new case count turns downwards, and then the inflection point becomes apparent to all.

    Implications for Stock Prices

    Now for the bad news, which is that I’ve just exhausted my supply of good news, at least when it comes to stock prices. As the case trajectory flattens, we should see bursts of optimism that push prices higher, but probably not a market bottom. The problem is the two elephants that seem in no particular hurry to leave the room.

    1. Businesses have shut down more suddenly and completely than ever before.

    2. We have no idea when the business shutdowns will end.

    Let’s say restaurants, bars, stores, factories, offices, schools, entertainment venues and transportation hubs reopen in about eight weeks. That seems possible, but it’s probably not sustainable. If political leaders remain consistent, any newfound infections would then send businesses right back out of work. In my county, for example, all nonessential businesses were told to close just as the confirmed case count climbed from 1 to 2.

    In the meantime, we’re about to be bombarded with the worst economic data releases we’ve ever experienced. The economy is probably contracting even more sharply than it did during the 1933 national bank holiday, which is the only comparable I can think of. At a time when people withdrew cash from banks to make purchases, the bank closures brought much of the economy to a sudden halt. But the bank holiday only lasted seven days.

    Others point to the 1980 and 2008-9 recessions, but in those instances the economy shrank organically. This time, it’s literally being locked down. I fail to see how those past recessions—or any past recessions, for that matter—can shed much light on the present one. And I can say the same thing about past pandemics, which have never before triggered worldwide, government-mandated business closures.

    So instead of looking at, say, stock market returns in 1980, 2008-9 or during any other recession or major calamity, I expect the key to the market’s performance to lie in the answer to this straightforward question: At what point does our capacity to treat COVID-19 patients allow businesses to reopen?

    Notably, at least one policy maker has pledged not to restart the economy until fatality risks reach zero. That approach might not be universal, but it doesn’t seem that far from consensus within the political class. Elsewhere, though, commentators are challenging that consensus, stressing connections between economic decline and public health. See, for example, this editorial by the Wall Street Journal and this commentary by a contributor to the CFA Institute’s Enterprising Investor blog.

    Clearly, my question doesn’t have a single “correct” answer, and yet it might be the most important piece of the current policy mix. To stray briefly from financial to societal commentary, I hope policy makers develop their answers carefully. The WSJ might have summarized the predicament best when writing that “no society can safeguard public health for long at the cost of its economic health.”

    Now bringing the discussion back to stock prices, the answer to my question determines when the cloud of uncertainty finally lifts. It determines when investors can resume normal financial analysis, and when commentators predicting the next bull market might finally be onto something.

    Bottom Line

    No doubt, market volatility brings opportunities. Long-term investors are finding value as the market falls, and even short-term traders are finding buying opportunities as prices bounce wildly up and down.

    But risk tolerance is paramount. For those unable to stomach losses on new holdings, my nickel’s worth of advice is to be cautious. I’ve shared my most optimistic chart – showing a declining case trajectory – but I don’t expect it to turn the tide in the stock market. For that, we’ll need more clarity about when we can once again claim “the business of America is business.” That’s at least weeks and possibly many months away.


    Tyler Durden

    Mon, 03/23/2020 – 22:45

  • "Biggest Lockdown In World History" – India Paralyzed As COVID-19 Crisis Unfolds 
    “Biggest Lockdown In World History” – India Paralyzed As COVID-19 Crisis Unfolds 

    Indian stocks crashed on Monday, suffering their worst single-day loss on record, as domestic and foreign investors were absolutely terrified that a nationwide lockdown triggered by a COVID-19 outbreak could crash the economy. 

    The NIFTY 50 is the flagship index on the National Stock Exchange of India, plummeted 12.98% to a near four-year low of 7,610.25 on Monday. 

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    The Indian rupee hit a record low of over 76 against the dollar and puts pressure on the Narendra Modi government and the Reserve Bank of India (RBI) to ramp up emergency response efforts to protect a crashing currency and economy.  

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    Modi’s “Make-in-India” program, an attempt to revive the economy and diversify its manufacturing sector away from automobiles to bolster its aerospace and defense sectors, has miserably failed.

    The economy has come to a screeching halt as residents in 75 districts across the country, including in major cities, such as the capital New Delhi, Mumbai, and Bangalore have been forced into mandatory quarantine by the government until March 31. 

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    India is the second-largest country in the world, and has reported only 467 cases and ten deaths.

    The lack of test kits has made it virtually impossible for the Ministry of Health and Family Welfare to detect community spreading of the virus. As test kits come online, India could be staring at a pandemic. 

    Actions by the government already suggest the virus crisis is getting worse. In the last day, India launched the world’s most extensive social distancing lockdown of 1.3 billion people to flatten the pandemic curve to slow down the infection rate. 

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    Flight bans and the cancellation of all passenger trains in the country is another attempt to limit the spread. The country’s hospital system is poorly equipped and doesn’t have enough hospital beds and ICU-level treatments to handle a massive influx of virus patients.  

    “This is the biggest lockdown in world history,” said Raghu Raman, a former soldier with the Indian Army and founder of the National Intelligence Grid, an umbrella database aimed at countering terrorism.

    “This strategic pause gives decision-makers more time to arrest the exponential spread of the virus and evaluate tradeoffs.”

    Foreign investors aren’t sticking around to see if the virus crisis will abate in the near term – they’re currently dumping Indian assets at an unprecedented pace. 

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    Oxford Economics estimates India’s January-April growth forecast to be around 3%, a level not seen since the global financial crisis. 

    Bloomberg Economics says that the Indian government needs to spend at least 1% of GDP, or about $30 billion, to respond to the virus outbreak. 

    India’s manufacturing hubs have ground to a halt as companies have been forced to shutter operations for virus containment purposes. Maruti Suzuki India Ltd., Tata Motors Ltd., Toyota Kirloskar Motor, Hero MotoCorp., Samsung Electronics Co. and LG Electronics Inc., Mahindra Group, TVS Motor Co., Kia Motors Corp., Renault Nissan Automotive India Private Ltd., and Yamaha Motor India are some of the large multinationals that have recently suspended operations. 

    The government’s principal economic adviser Sanjeev Sanyal warned that “waves of default” of corporate debt could be imminent. There’s a record 5.9 trillion rupees of corporate debt maturing this year.

    Finance Minister Nirmala Sitharaman said last week that the government would announce a relief package for companies in the near term. The RBI is expected to slash interest rates and inject 1 trillion rupees into the economy on April 3. 

    We noted back in December that India’s economy was “in a very deep crisis,” which was a month before the world figured out about a virus outbreak in Wuhan, China. 

    It was only earlier this month that India organized a rescue plan for the nation’s fourth-largest private bank as a long-running crisis among shadow lenders threatened to spill over into the banking system.

    With a nationwide lockdown underway, India’s economy could be on the brink of a significant downturn that would be absolutely devastating for the Modi government.


    Tyler Durden

    Mon, 03/23/2020 – 22:25

  • Pandemic: The Invention Of A Disease Called Fear
    Pandemic: The Invention Of A Disease Called Fear

    Authored by Julain Rose via Counterpunch.org,

    The word ‘pandemic’ bears a similarity to the word ‘panic’ and indeed ‘pandemonium’. In fact ‘pandemic’ evokes an almost instant flush of fear in those easily manipulated by mass media, before any details have even touched the surface or context in which the word is being used.

    Those who plan the major moves on the chess-board of covert human control know that by leading with the word ‘pandemic’ they have an instantly effective weapon at their disposal to psychologically weaken the resistance of individuals vulnerable to irrational and impressionistic mindsets.

    So, in a world heavily conditioned by the proclamations of the mass media, the fear weapon has huge psychological power.

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    As we have all witnessed over the past months, the Coronavirus story has been unleashed with barely contained lascivious delight by news media under orders from the purveyors of malevolent missions against mankind. Pumped-up to maximum volume and dispersed globally, the deliberately designed fear message has the instant effect of making the majority of people feel powerless. The Big problem is at large – and we the people feel small. This is the beginning of entrapment which colors every aspect of daily life.

    Most of humanity has undergone a process of education which depends for its effectiveness on the perceived power of some ‘authority’ to exert an unquestioned controlling influence over the general direction of life. A source of influence that depends for its continuing effectiveness on never being subjected to rational scrutiny, or genuine examination of any kind. Such is the beguiling power of full-on indoctrination.

    In the battle now raging for ‘who controls the world’, some of the largely hidden or disguised controlling agents of planetary life – are now appearing on the surface. And that’s why chaos and fear are very much ‘flavor of the month’. The Corona Contagion is chock full of idiosyncrasies; in fact, there are so many nonsensical factors associated with media attempts to report on what’s going on, that one can only feel dazed and confused should one try and follow the script in real-time.

    However, what has become all too clear is the fact that large numbers of people are being herded – and are not resisting. The scare tactics being employed are more dangerous than the virus that is the excuse for deploying them. Under this induced state of psychosis, all manner of tricks can be perpetrated on mankind – and that is precisely what we are witnessing at this time.

    Many reading this will already be familiar with the ambitions of the controlling deep state ‘elite’ and will know that a pre-planned phase of social and economic chaos is a key factor in their attempted roll-out of totalitarian New World Order. We are now in this phase. Its success depends upon a large body of people following the instructions passed down by the political puppets of the deep state and by the cowardly repetition of these instructions by the mainstream media.

    Once again, the fear card plays a key role. This time, in keeping a constant level of anxiety and hysteria on the boil, while working to ensure that those able to recognize the true nature of the scam are coerced into not stepping out of line, thereby risking their job, security or status within the rigidly enforced master/slave relationship of the status quo.

    The whole sick edifice maintains its momentum based upon pure top-down deception and exploitation. Yet those at the receiving end largely choose to remain oblivious of the fact that they are being used and abused for the benefit of a fascist ideal. By not rebelling in the face of such treatment – but instead by complying with it – a mute populace establishes the basis of its own debasement and slavery.

    These methods have been practiced over and over again in the history of the world, and each time hind-sight reveals the motivation to have been an obsession with power and control, and the perpetrators to be a small number of psychopathic despots. Whether taking the form of military might, religious dogma or modern-day corporate and banking control freaks, provided the drama has been well stage-managed and the ‘might has produced fright’, the hegemons get their way.

    How well is the roll-out being stage-managed on this occasion – and what is the plan?

    Owing to the trans-planetary link-ups that take place today, the ‘master plan’ is no longer a regional or national affair, but a global one. The main players have hatched the plot long before any of us get to know about it and gatherings like the Davos Economic Summit and Bildergerger meetings are used to gain consensus on the timing and methods to be deployed.

    In the case of Covid-19, its appearance on the scene – or at least the spreading of the story about something nasty going under this name – is timed to divert attention from the speeding-up of the installation of what are deemed to be important spokes in the creation of a totalitarian New World Order. For example, the roll-out of 5G microwave modulated WiFi; a digitalised smart grid and ‘internet of things’; a robotic transport system; facial recognition population surveillance programmes; new strains of genetically modified organisms and vaccines, and so forth. However, the predominant game plan is to ‘re-set’ global finance so as to appear to be supporting the euphemistically named Green New Deal with its holy grail ‘Zero Carbon’.

    The fact that China has likely been the initial bio-weapon target, does not detract from a more widespread aim to disrupt the world economy as a whole.

    The effectiveness of this disruption depends upon the greater part of the populus being swept along in a bubble of blind belief in the authenticity of the ‘virtual’ story line. A line which disguises the very actual imposition of a fascist state.

    I would say that the stage-management is pretty poor this time around. The plethora of contradictory and irrational clamp-down actions being imposed in the name of containing the bogey bug stretches the credibility of the operation to the braking point. In point of fact it’s a farce; but a farce which involves actual deaths and the support of a police state, cannot simply be laughed-off.

    Instead, it can be put under the spotlight and be seen for what it is, a planned manipulation of the people and resources of this planet, whose main goading-tool consists of the well-rehearsed art of spreading fear and panic. And this, in turn, to undermine the rational and common sense based gift which we have all been blessed with from birth, and which – when in good order – can clearly see through the facade and hold the line of reason and truth.

    Many have seen this ‘order out of chaos’ drama coming for years. The chaos bit is with us right now and very visible. The ‘order’ is to follow and consists in the emergence of a peacemaker – or peace plan – that involves the lead croupiers raking the chips off the roulette board and cashing them into their temporary satisfaction. Thus allowing for a little holiday period in which the weak-kneed can rejoice at their survival and bless the emergence of the ‘new order’, under the authority of no matter who or what, so long as they can believe that the world has been saved from anarchy and ruin.

    Every one of us whose knees have not turned to jelly and whose brains have not turned to mind-controlled pulp must take this moment to declare ourselves, boldly and resolutely with these four words “We do not consent”.

    There’s a surprise in store for the cowardly imposers of chaos – it is our time that’s coming and – not theirs. For ours is the True World Order which aligns with Universal Law, not the false laws of a manipulated status quo.

    It is our re-emergent marriage with Universal Truth that is going to oust this scare loaded pandemic and all similar manifestations of dark-side deception that have gripped this planet for far too long. Our true-world-order is going to take on this obsessed and demonic dynasty, so that it stumbles, falls and fails to rise again.

    Seize this auspicious moment – and let us be joined as one in an unwavering commitment to get off our knees and stand firm in the cause of defeating the ghosts of chaos and fear.


    Tyler Durden

    Mon, 03/23/2020 – 22:05

  • "It's Selling Like Toilet Paper": If You Haven't Bought Physical Gold Yet, It's Probably Too Late
    “It’s Selling Like Toilet Paper”: If You Haven’t Bought Physical Gold Yet, It’s Probably Too Late

    Over the past decade, one of the most fascinating observations in the world of precious metals has been the bizarre decoupling in the supply/demand dynamics and thus pricing, between paper and physical gold.

    As gold became increasingly financialized in recent years – through futures, ETFs, derivatives and so on – and as the impact of “financialized” gold became the dominant price-setting factor in a world where the nominal volume of “paper gold” traded is now orders of magnitude greater than “physical”, a bizarre decoupling emerges every time there is a major market stress event. A pattern that has emerged is that during periods of “bathwater” liquidation, when levered asset managers are forced to dump paper gold to cover margin calls in different parts of their book, sending the price of gold sharply lower also happens to be when physical gold buyers step up amid concerns over the viability of either the financial system and/or the reserve currency.

    The result, as discussed last week, is that “the price of physical gold decouples from paper gold” resulting in an arbitrage that physical gold buyers, i.e., those who don’t have faith in gold ETFs such as the GDX or simply prefer to have possession of the metal, find especially delightful as it allows them to buy physical gold at lower prices than they would ordinarily have access to.

    The immediate next step is a surge in demand for physical gold that results in precious metal vendors and exchanges becoming sold out in very short notices. Take for example the largest US precious metals exchange, APMEX, where any attempt to buy gold in size, or rather weight (because the truly rich who need to park several millions can’t be bothered with individual gold coins and instead go for the 400 oz brick or 1 kilo bar), finds, well, nothing because everything is sold out, and not just for bars…

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    … but also smaller gold rounds.

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    … and even plain vanilla gold coins are now only available for pre-sale.

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    But don’t take our word for it: as that beacon of pro-fiat, anti-hard money dogma, the Financial Times, reports this morning, traders have reported and lamented a growing global shortage of gold bars, as the coronavirus outbreak both disrupts supply and stokes demand, “with one business comparing the frenzied buying of the yellow metal with the consumer rush for toilet roll.”

    Of course, the fact that gold makes for very expensive toilet paper and is thus available to a far more exclusive audience, one that can spend substantially more on the yellow metal, was lost on the FT, so here’s the recap: there is a wholesale flight out of “paper” and into physical among some of the world’s richest people.

    One thing the FT does get right is that “retail investors in Europe and the US have bought up gold and silver bars and coins over the past two weeks in an effort to protect their money from the collapse in global stock prices and many currencies.” And with the Fed now set to unleash unprecedented dollar destruction by injecting over $625 billion in freshly printed fiat into the system this week alone…

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    … concerns about the collapse of currencies will only grow.

    But what is more concerning is that it’s not just a demand problem: supply chains are also freezing, and Europe’s largest gold refineries have struggled to keep up because of the region’s widening shutdown. Valcambi, Pamp and Argor-Heraeus are all based in the Swiss town of Ticino, near the border with Italy. Local authorities announced in recent days that production in the area was to be temporarily halted.

    Unfortunately, just like everything else, gold refiners are also shutting down, ensuring that any gold shortages will persist for months at least.

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    With supply collapsing and demand soaring, one would hardly think that the price of gold would plunge, and yet that’s precisely what happened much of last week as funds dumped paper gold, leading to the abovementioned paradoxical divergence in paper and physical prices.

    And since gold vendors are constrained by the price of spot which is largely determine in the paper market, the result is that retailers are reporting shortages and delays of up to 15 days on shipments as demand has surged. Markus Krall, chief executive of German precious metals retailer Degussa, said it was struggling to meet customer appetite for gold bars and coins and had to turn to the wholesale markets. Demand is running at up to five times the normal daily amount, he said.

    “We are being creative to find new sources but what is driving it all are the measures by authorities to stop coronavirus. This is so unpredictable,” added Mr Krall.

    Rob Halliday-Stein, founder and managing director of Birmingham-based BullionbyPost, said the situation was unprecedented. “Basically we’re selling as soon as we get stock on location in secure vaults — but we’re restricted to what we can get hold of, it’s a bit like toilet roll.”

    Another irony: while London’s gold vaults are full of gold bars, they are of the 400-ounce “good delivery” variety traded (and rehypothecated) among large banks (and central banks) such as HSBC and JPMorgan, not the smaller bars that retail customers buy, which tend to be 1kg (35 ounces) or lighter.

    “I don’t think you will find a kilobar presently in Europe and the US for love nor money,” Ross Norman, a veteran gold trader, said. “It’s quite extraordinary.”

    And speaking of Apmex, its CEO Ken Lewis told the FT that in the past week that “product has become increasingly difficult to source as the market becomes more volatile day by day”.

    The company said it had purchased more than 1m ounces of silver grain and bars, more than 20,000 American Gold Eagles coins, thousands of gold bars, and “anything else we can find utilising our many partners and mint relationships”.

    And all of that gets sold out the moment it becomes available for sale.

    JM Bullion, another US-based precious metals retailer, said customer orders would be delayed by 15 days, and introduced a minimum order size (as did Apmex).

    BullionStar, a Singapore-based precious metals retailer, said it is paying a premium to buy back silver and gold coins from customers in an effort to replenish supplies, according to Ronan Manly, one of its analysts. “There’s a disconnect between prices in the physical gold market and the prices you see on your screen,” he said, repeating precisely what he wrote here several days ago.


    Tyler Durden

    Mon, 03/23/2020 – 21:45

  • Trump Is Finally Happy With Powell: "I Called Him Today And I Said 'Jerome, Good Job'"
    Trump Is Finally Happy With Powell: “I Called Him Today And I Said ‘Jerome, Good Job'”

    It finally happened.

    After the Fed cut rates to zero, launched unlimited QE, is on pace to buy $1 trillion in Treasurys and MBS in 2 weeks, backstopped pretty much every asset class and announced it would purchase bonds, loans, commercial MBS,munis as well as the LQD ETF, Trump is finally very happy with Fed Chair Jerome Powell, ironically on the same day Powell signed the dollar’s death warrant.

    Here’s what Trump said on Powell.

    “I am happy with him. I really think he’s caught up and he’s done the right thing. And I think ultimately we will be rewarded because of the decision he made over the last — he’s really stepped up over the last week.”

    “I called him today and I said ‘Jerome, good job.”

    “He was a little bit slower than what I’d have liked, in the sense of what he was doing.”

    “But today I called up Jerome Powell and I said ‘Jerome you’ve done a really good job.’ I was proud of him. It took courage. Ultimately you’re going to see the fruits — he’s not finished. He’s got other arrows in the quiver.”

    “I’m very happy with the job he did.”

    https://platform.twitter.com/widgets.js

    For those who missed it, here is how Jerome Powell finally managed to get Trump to crack a smile:

    • Today, the FOMC expanded its large scale asset purchase program by promising to purchase ‘in the amounts needed.’ One week ago, the FOMC had said it would purchase $500bn of Treasury securities and at least $200bn of agency MBS; Half of that amount was fully purchases within a week.
    • The FOMC also announced that the agency MBS purchases will include agency commercial MBS.
    • The Fed also made CPFF more generous in terms of pricing and opened CPFF and MMLF to a wider set of assets.
    • The Board of Governors relaunched the Term Asset-Backed Securities Loan Facility (TALF), providing loans in exchange for ABS.
    • The Fed also announced it would buy corporate bonds and loans in both the primary and secondary markets.
    • The Fed also said it expected to announce soon the establishment of a Main Street Business Lending Program to support eligible small-and-medium sized businesses.

    All that’s missing is for the Fed to start buying stocks and literally paradrop dollars from a helicopter. Trump will find both delightful.

    * * *

    Whoever Timestamps things, please Timestamp this post and check back in 10 years when the fiat monetary system as we know it is long gone.


    Tyler Durden

    Mon, 03/23/2020 – 21:39

  • US Prisons 'Ticking Time Bombs' For Coronavirus Explosion, Congress Members Warn
    US Prisons ‘Ticking Time Bombs’ For Coronavirus Explosion, Congress Members Warn

    Authored by Jessica Corbett via CommonDreams.org,

    Rights advocates and Democrats holding state and federal elected offices across the United States are doubling down on demands for the release of “at-risk” inmates and more preventive measures in jails and prisons to prevent mass outbreaks of the new coronavirus, which has killed at least 473 people and infected over 35,000 nationwide as of Monday morning.

    Three Democratic congressmembers from New York—Reps. Nydia Velázquez, Hakeem Jeffries, and Jerrold Nadler—joined David Patton of the Federal Defenders, Anthony Sanon of the union representing corrections officers at the Metropolitan Detention Center, correctional medical experts Dr. Brie Williams and Dr. Jonathan Giftos, and New York City Councilmember Brad Lander for a virtual press conference Sunday. “The COVID-19 pandemic has turned our nation’s jails and prisons into ticking time bombs,” said Patton during the press conference.

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    Image via Los Angeles Times

    “This is no time for business as usual. Unless federal courts and federal prosecutors take immediate and bold action to reduce our federal prison population and limit the intake of new prisoners, we will face a humanitarian crisis of enormous magnitude,” Patton added.

    A goal of the event was to pressure the Southern and Eastern Districts of New York to halt new arrests for nonviolent charges and release from federal jails inmates who are at risk of serious illness or death if they contract COVID-19.

    The press conference came after House Judiciary Chair Nadler sent a pair of letters to U.S. Attorney William Barr in recent weeks asking how the Federal Bureau of Prisons and U.S. Marshals Service is repsonding to the pandemic. In the latest letter (pdf) Thursday, Nadler and Rep. Karen Bass (D-Calif.) called for considering the release of “vulnerable” inmates, such as “persons who are pregnant, who are 50 years old and older, and who suffer from chronic illnesses like asthma, cancer, heart disease, lung disease, diabetes, HIV, or other diseases that make them vulnerable to COVID-19 infection.”

    President Donald Trump said Sunday that his administration was weighing the release of some incarcerated people following the first known COVID-19 case involving an inmate—a man at Metropolitan Detention Center in Brooklyn. California officials announced Sunday night that an inmate at California State Prison in Los Angeles County has also tested positive for the virus, after five cases among staff at three other state facilities.

    Corrections experts and rights advocates have warned for weeks that, as Maria Morris of the ACLU wrote earlier this month, “prison and jail populations are extremely vulnerable to a contagious illness like COVID-19” because “conditions in correctional facilities are highly conducive to it spreading” and many inmates “are in relatively poor health and suffer from serious chronic conditions due to lack of access to healthcare in the community, or abysmal healthcare in the correctional system.”

    Williams is a University of California San Francisco professor of medicine who focuses on healthcare in correctional settings, particularly for the elderly and chronically ill. “The possibility for accelerated transmission and poor health outcomes of COVID-19 in prisons and jails is extraordinarily high,” she warned. “Coordinated, preemptive, thoughtful, and decisive action around decreasing the population in prisons and jails with public health at its center will save lives in prisons, jails, and in our communities. Business as usual will not.”

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    Image: Los Angeles Times via Getty Images

    Noting that first known COVID-19 case involved an inmate in her district, Congresswoman Velázquez called for “rapid, proactive department-wide steps” to protect inmates and staff in correctional facilities, including the “compassionate release of incarcerated people who are elderly or have underlying health conditions, and who pose no risk to public safety.”

    Velázquez also urged federal prisons and jails “to implement streamlined procedures to release individuals who have not been convicted of any crimes and are awaiting trial in prison or jail” and pressed the U.S. Attorneys’ Offices to “exercise maximum restraint in terms of bringing additional individuals into the court and jail system.”

    As Giftos, former medical director of Correctional Health Services at Rikers Island, put it: “Jails simply cannot protect patients and staff from a viral pandemic affecting the city.” Giftos, now the medical director at Project Renewal, which treats NYC’s homeless population, added that “the only measure that will meaningfully impact the spread and harm of coronavirus in the jail-system is to depopulate—to release as many as possible to continue their cases in the community—with a focus on those at highest risk of complications.”

    Some courts and states have moved to prevent the spread of the virus in correctional settings. Cuyahoga County Court in Ohio ordered the release of certain inmates from the county jail earlier this month and the New Jersey Supreme Court on Sunday approved an agreement (pdf) among the state attorney general’s office, county prosecutor’s association, the public defender’s office, and state’s ACLU chapter to release up to 1,000 people in county jails beginning Tuesday.

    “Unprecedented times call for rethinking the normal way of doing things, and in this case, it means releasing people who pose little risk to their communities for the sake of public health and the dignity of people who are incarcerated,” ACLU-NJ executive director Amol Sinha said in a statement. “This is truly a landmark agreement, and one that should be held up for all states dealing with the current public health crisis.”

    After a Sunday announcement that a correctional officer at Cook County Jail in Chicago tested positive for COVID-19, Cook County Public Defender Amy Campanelli was scheduled to present an emergency petition Monday demanding the release of “vulnerable” detainees, according to the local ABC News affiliate. The Chicago Sun-Times reported that “several” people deemed “highly vulnerable” to the coronavirus were released from the facility last week.

    Local faith leaders planned a socially distanced prayer vigil outside the Cook County Jail for Monday morning ahead of the hearing. Rev. Rachel Birkhahn-Rommelfanger of the Northern Illinois Conference of the United Methodist Church explained in a statement from the Chicago Community Bond Fund that “our faith calls us to advocate for the release of people incarcerated in the jail whose lives are at risk because of COVID-19. We are in an unprecedented crisis that calls for unprecedented action.”


    Tyler Durden

    Mon, 03/23/2020 – 21:25

  • Stimulus Talks "Are Stalled Out" After House Democrats Unveil $2.5 Trillion Counterproposal
    Stimulus Talks “Are Stalled Out” After House Democrats Unveil $2.5 Trillion Counterproposal

    Update (1805ET): Politico’s John Bresnehan reports that Senator John Thune said stimulus talks “are stalled out.”

    Thune added:

    “My sense is we’re not making a whole lot of progress today & we’re back tomorrow.”

    Additionally, leaving Senate Majority Leader Mitch McConnell’s office, Sens. Chuck Grassley and John Cornyn said that they didn’t think there would be a vote tonight.

    *  *  *

    Update (1630ET): The new Democrat counterproposal will equate to nearly $2.5 trillion, including a $1,500 direct payment to citizens.

    It will include $150 billion in healthcare funding, $80 billion in loans, and $600 per week in unemployment benefits for those affected by the virus. $215 billion will be allocated for state and local funds.

    Via Bloomberg:

    • Includes $1.5k in aid per individual; as much as $7.5k for a family of 5
    • Would create a temporary Federal Pandemic Unemployment Compensation of $600 a week for any worker affected by the virus and eligible for unemployment compensation benefits
    • Would expand paid leave and family medical leave
    • Aims to help current borrowers with student debt
    • Seeks more than $500b in grants, interest-free loans to small businesses
    • Would provide $200b in funding for states; $15b to local govts through the Community Development Block Grant program
    • Calls to ensure states can carry out this year’s election with $4b in grant funding; includes national requirement for both 15 days of early voting and absentee vote-by-mail

    Of course, it also requires airlines to adopt strict ‘green new deal’ style emissions rules.

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    *  *  *

    Update (1535ET): House Democrats have published their counterproposal to the Senate coronavirus relief bill, which include the following provisions (among other things):

    You can read the entire thing here:

    *  *  *

    Update (1405ET): With five GOP members absent, the Senate again lacks the votes to advance the largest stimulus bill in US history aimed at fighting the economic fallout from the coronavirus pandemic.

    The vote is ongoing, however McConnell says the delays could push the stimulus package package to Friday.

    Senate Minority Leader Chuck Schumer (D-NY) says the vote is irrelevant because he is still discussing the details of the deal with Treasury Secretary Steven Mnuchin, according to Bloomberg.

    Meanwhile, Speaker Pelosi says the bill puts corporations first.

    *  *  *

    Update (1240ET): Senate Majority Leader Mitch McConnell (R-KY) slammed Congressional Democrats for holding up the stimulus bill for unrelated demands.

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    “Are you kidding me?” he asked, adding “This is the moment to debate new regulations that have nothing whatsoever to do with this crisis? That’s what they’re up to over there,” motioning to Democrats.

    “Democrats won’t let us fund hospitals or save small businesses unless they get to dust of the Green New Deal,” he said.

    McConnell has scheduled a new vote for 1:45 PM eastern.

    Meanwhile, House Democrats are set to unveil a bill introduced by Reps. Ayanna Pressley (D-MA) and Ilhan Omar (D-MN) which would cancel at least $30,000 in student debt per borrower amid the coronavirus pandemic.

    “During this unprecedented crisis, no one should have to choose between paying their student loan payment, putting food on the table or keeping themselves and their families safe and healthy,” said Pressley in a statement.

    “We must prioritize debt cancellation for the 45 million student loan borrowers who are struggling to pay off their debt during this difficult time.”

    *  *  *

    As the country slips into economic chaos, Democratic gatekeepers to a $1.8 trillion stimulus package have made several demands which have nothing to do with coronavirus before they’ll sign off on the legislation.

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    According to Town Hall‘s Guy Benson, Senate Minority Leader Chuck Schumer (D-NY) and House Speaker Nancy Pelosi (D-CA) are demanding massive collective bargaining powers for unions, more stringent fuel emissions standards for airlines, and an expansion of wind and solar tax credits.

    Benson then directs our attention to a Thursday article from The Hill, in which House Democrats indicated that they wanted to go “bigger and broader than the already massive economic stimulus package offered by Senate Republicans to blunt the coronavirus pandemic.

    “This is a tremendous opportunity to restructure things to fit our vision,” said Majority Whip James Clyburn (D-SC) on a Thursday conference call with over 200 members of the House Democratic caucus.

    Senate Majority Leader Mitch McConnell (R-KY) is not a fan.

    “Anything that doesn’t address that pandemic, it seems to me, should not be considered,” he said.

    A re-vote on the package is expected on Monday at noon.

     


    Tyler Durden

    Mon, 03/23/2020 – 21:11

  • Twitter Sells Out – Will Allow Chinese Government Propaganda About Virus Origin
    Twitter Sells Out – Will Allow Chinese Government Propaganda About Virus Origin

    Having withdrawn guidance for the rest of the year earlier in the evening, following a collapse in advertising revenue, it appears Twitter CEO Jack Dorsey has once again sold out to the Chinese government (among others).

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    At the time we mocked:

    Who knows maybe once this is all over, Twitter will be forced to lay off its pro-establishment content nazis and the platform that started off as an experiment in free speech will finally return to its roots.

    And ironically, that is almost what they did… except for one thing – if you’re an ‘average joe’, ‘blog’, or ‘Trump supporter’, you’ll still be banned; but if you’re a government official, you’re allowed to say whatever you want about the origins of COVID-19 and not get censored, suspended, or banned.

    Twitter says coronavirus is “affecting our content moderation capacities in unique ways” and it cannot “take enforcement action on every Tweet that contains incomplete or disputed information” about the virus.

    And, therefore, in a tweet this evening, Twitter announced:

    “Official government accounts engaging in conversation about the origins of the virus and global public conversation about potential emergent treatments will be permitted, unless the content contains clear incitement to take a harmful physical action.”

    As many know, following ZeroHedge’s permanent ban from the platform, it appears in recent months Twitter has taken it upon itself to become the supreme arbiter of all that is politically correct, noble and just (or at least is not frowned upon by the Chinese Communist Party) in this cruel world where readers are completely unable to make up their minds on their own without a blue bird telling them what they should or should not read, and what, in its eyes, is arbitrary fake news.

    And now, following Chinese officials completely unsubstantiated claims that the virus emerged in the US, Twitter changes its policy?

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    But, it would seem – given our permanent ban, that telling people to ask someone what happened using public info is “clear incitement to take harmful physical action” but that making completely unsubstantiated claims about another global superpower that could quite easily escalate into social unrest, xenophobia, and inevitably war – is fine if it’s done by a government?

    Ok.


    Tyler Durden

    Mon, 03/23/2020 – 21:05

  • Trump Says Coronavirus Restructions Will Be Lifted "Soon", The US "Was Not Built To Be Shut Down": Live Updates
    Trump Says Coronavirus Restructions Will Be Lifted “Soon”, The US “Was Not Built To Be Shut Down”: Live Updates

    Summary:

    • Trump says coronavirus restrictions will be lifted “soon, a lot sooner than three or four months.”
    • Japan PM Abe says world “not ready” to hold Olympics
    • Fla. Gov. DeSantis signs order requiring 14-day quarantine for all travelers from NY & NJ
    • Angela Merkel tests negative for COVID-19
    • Australia and Canada pull athletes from the games
    • UK issues stay at home order
    • Japan agrees with IOC to delay Olympics for 1 year
    • NY case total tops 20k
    • Italy sees encouraging slowdown suggesting outbreak might be peaking
    • Greece announces lockdown after reporting largest daily jump in deaths
    • UK PM Johnson to address the country as deaths hit 335
    • Hong Kong bars all foreigners for 14 days
    • Boeing shuts Puget Sound operations for 2 weeks
    • Spain reports 26% jump in deaths on Sunday
    • State Department says 13,500 stranded Americans abroad are trying to get home
    • New Jersey reports nearly 1,000 case jump
    • UK preparing to close “non-essential” shops
    • Dems hold stimulus bill hostage with last-minute demands
    • First coronavirus deaths confirmed in Zimbabwe, Gambia, and Nigeria.
    • Cuomo tourst Javits Center
    • India ban on international flights begins
    • 1.7 billion ppl in 50 countries asked to stay home, AFP says
    • Largest 2-day jump in global cases reported over the weekend
    • France announces more restrictive measures
    • 8 states have postponed primaries
    • Ireland reports largest daily jump in new cases
    • Nigeria closes borders, suspends international flights
    • Myanmar reports first cases
    • Canada reports jump in cases
    • Michigan, Indiana & Mass join stay at home states
    • Spain follows Italy by extending quarantine
    • 1 in 3 Americans begin Monday under lockdown
    • White House correspondent rumored to test positive for COVID-19
    • India shutters domestic transit even as ‘official’ cases remain low
    • Trump sends National Guard troops to New York, California & Washington
    • Fed delivers latest bazooka blast with another massive monetary stimulus
    • Senate holds second stimulus vote
    • Amazon doubles workers overtime pay

    *  *  *

    Update (2015ET):  Perhaps realizing that facing down a second great depression if the US economy is halted indefinitely as a result of the coronavirus pandemic would not improve his re-election chances, President Trump struck a defiant tone at Monday’s coronavirus press briefing when he said that the American economy can’t remain slowed for too long to fight the coronavirus, declaring that the country “was not built to be shut down.”

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    As a result, the president predicted that social distancing restrictions will be lifted “fairly soon” and that the U.S. has learned enough lessons to re-open the economy despite the ongoing pandemic.

    “I’m not looking at months, I can tell you right now. We’re going to be opening up our country,” Trump said. “Can’t keep it closed for the next, you know, for years. This is going away.”

    “America will again, and soon, be open for business. Very soon,” Trump said. “A lot sooner than three or four months.”

    Following a Sunday night tweet by former Goldman CEO Lloyd Blankfein which said that “crushing the economy, jobs and morale is also a health issue-and beyond. Within a very few weeks let those with a lower risk to the disease return to work”…

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    … Trump and some of his economic advisers appeared to be losing patience with public health experts who believe that easing restrictions and returning to normal life before “flattening the curve” could overwhelm the health system.

    Earlier on Monday, the president of the St. Louis Federal, James Bullard, said Monday that the government should consider shutting down much of the economy for three months to combat the outbreak. This is one day after the same individual said that the worst case from a lengthy shutdown would be a 50% GDP drop and a 30% surge in unemployment. It wasn’t clear if Bullard believes that a depression would serve the economy and public better than taking the risk with a shorter shutdown.

    While Trump didn’t mention Bullard, but said: “We’re not going to let the cure be worse than the problem.”

    Effectively Trump is planning on doing what China did, which after locking out a third of the country, then proceeded to forcefully restart the economy (as the Chinese economy is reliant entirely on its massive workforce). However, to do that, Beijing had to engage in some major rigging of coronavirus cases which it claimed had plateaued even though there is clear evidence China is openly manipulating the data. The question, of course, is whether the CDC will allow the US to pursue similar “data doctoring” as China engaged in.

    Otherwise, Trump may find it difficult to push the economy to restart in a week or two if the number of new cases is still soaring. And with the “resistance” press eager to do everything in its power to force a depression, leading to a Trump loss in November, it is certain that the situation as represented by the mainstream liberal media will only get more dire with time.

    In any case, the following soundbites indicate that Trump appears to have made up his mind:

    • “This is a medical problem. We are not going to let it turn into a long-lasting financial problem.”
    • “You look at automobile accidents. Which are far greater than any numbers we’re talking about. That doesn’t mean we’re going to tell everybody no more driving of cars.”
    • “If it were up to the doctors, they may say let’s keep it shut down — let’s shut down the entire world.”
    • “You can’t do that with a country — especially the No. 1 economy anywhere in the world, by far. … You can’t do that. It causes bigger problems than the original.”
    • “I will be listening to … experts. We have a lot of people who are very good at this. It’s a balancing act. You know the expression, we can do two things at one time.”

    Trump also said that if the economy is forced into a deep enough recession by social distancing measures, there could be deaths from suicides and other causes in excess of those caused by the coronavirus, and that parts of the nation might be able to resume economic activity even as others fight outbreaks.

    “You’re talking about massive depression, massive numbers of suicide,” he said. “They had a fantastic job and now they have no idea what’s going on.”

    “We can start thinking about, as an example, parts of our country are very lightly affected,” he said.

    The State Department physician who advises Vice President Mike Pence on the government’s response to the outbreak, Deborah Birx, said she did not think that Trump’s optimism about soon relaxing Centers for Disease Control and Prevention guidelines against large gatherings and eating at restaurants would discourage people from following the recommendations.

    “What we’re asking every American to do is to make those personal sacrifices for this next week, and now, so we can evaluate the impact of that sacrifice,” she said at the same news conference. Trump’s musing about easing the restrictions, she said, “strengthens the willpower” of Americans to conclude “yes, I can do this.”

    She declined to say how she would recommend that Trump proceed, saying the government was still gathering “data” on the outbreak. The number of U.S. cases grew to more than 43,000 on Monday, and the country exceeded 500 deaths, according to Johns Hopkins University.

    Asked if he would follow the advice of Birx and Anthony Fauci, the National Institute of Allergy and Infectious Diseases director who also serves on Trump’s coronavirus task force, Trump said only that he would listen to them. “I’ll be listening to them and others we have who are doing a good job,” he said.

    “He doesn’t not agree with me,” Trump declared using a double negative, asked if Dr. Fauci agrees with him that the time is nearing to reopen things.

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    * * *

    Update (1850ET): Japan is reportedly “in agreement” with the IOC to delay the Tokyo Games for up to a year.

    Germany reported 4,183 new cases of coronavirus and 29 new deaths on Monday, bringing its total to 29,056 cases and 123 deaths.

    Meanwhile, in the US, President Trump doubled down on warnings that the lockdown shouldn’t totally dismantle the economy, while AG Barr warned that price gouging of cleaning products and other scarce items is a federal crime, and Dr. Birx noted that ‘self-swab’ tests for the virus would be available to the public by the end of the week.

    Here’s more of Trump saying “we cannot let the cure be worse than the problem itself”:

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    Dr. Birx also warned during Monday night’s press conference that the viral “attack rate” in New York appears to be significantly higher than the rest of the nation.

    *  *  *

    Update (1720ET): Now that Boris Johnson has over-delivered by ordering all of Britain to undergo a strict national lockdown requiring all Britons, but especially the vulnerable, to remain inside for 3 weeks (except for certain essential shopping trips, solitary exercise and seeking medical help).

    Those who defy the new restrictions will face fines, a practice that has become commonplace in the Middle East, as well as Italy, France and Spain. US officials including Gov. Cuomo have warned about ‘consequences’ for those who violate his orders.

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    The move should be enough to quiet critics of Johnson’s heretofore hands-off approach, which experts say did too little to slow the spread of the outbreak.

    And in the US on Monday evening, Fla. Gov Ron DeSantis ordered that all travelers to his state from New York and New Jersey, two hot spots of the US outbreak, self-quarantine for 14 days on arrival, though it’s not clear how he will enforce this. DeSantis said visitors to Florida from other states, including New York, are contributing to the spread of COVID-19 in his state.

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    South Africa reports 128 new cases of coronavirus, bringing its national total to 402 cases as it prepares for a 21-day lockdown to begin on Thursday. Meanwhile, elsewhere in Africa, the first coronavirus deaths have been confirmed in Zimbabwe, Gambia, and Nigeria.

    AFP, the French newswire, reported Monday evening that 1.7 billion people – nearly 2/7th of the Earth’s population – have now been asked to stay home in more than 50 countries and territories due to the coronavirus outbreak.

    *  *  *

    Update (1645ET): During a visit to FEMA on Monday, Vice President Pence echoed President Trump’s suggestion that the federal government will ‘reevaluate’ the lockdown measures and its social-distancing recommendations for all Americans at the end of March.

    look at its social-distancing recommendations for all Americans at the end of March.

    “We thought it was important for every American to take action as tens of millions are to help us slow the spread,” Pence told reporters at FEMA. “But at the end of this 15 days, we’re going to get with our health experts, we’re going to evaluate ways in which we might be able to adjust that guidance for the American people.”

    The 15-day period is set to expire March 30.

    Earlier, health experts, including Dr. Anthony Fauci, the lead expert guiding the US response, have responded by saying it’s too early for these kinds of economic considerations, and that the US needs to see how the first few weeks go before making any determinations.

    “WE CANNOT LET THE CURE BE WORSE THAN THE PROBLEM ITSELF,” Trump said in the tweet late Sunday, while Lloyd Blankfein echoed those sentiments as well, as we noted earlier.

    *  *  *

    Update (1630ET): Following earlier reports that the UK would order all non-essential businesses to close, it looks like PM Boris Johnson has taken things one step further, and unveiled a lockdown that will see all Britons ordered to stay home at all times, except for certain ‘essential’ tasks like buying food and medicine, or visiting the doctor.

    The lockdown will begin on Tuesday and last for at least three weeks.

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    Invoking language similar to that used by German Chancellor Angela Merkel last week, Johnson insisted the outbreak was the biggest threat the UK had faced in decades. 

    “We will beat the coronavirus and we will beat it together. And therefore I urge you at this moment of national emergency to stay at home, protect our NHS and save lives.”

    In the US, the city of Denver just issued a ‘stay at home’ order, joining the growing number of cities and states telling residents to just stay home.

    Earlier on Monday, Greece has also announced a lockdown following its largest daily jump in deaths. According to Reuters, Greece confirmed 94 new cases on Sunday, its largest single-day jump, taking its total to 624, with 15 deaths, up by 2.

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    *  *  *

    Update (1615ET): As we mentioned earlier, France has tightened its lockdown, raising the fines for people who go out without a legal reason, limiting outdoor exercise even further, and closing all open-air markets.

    “The return to normal life is not happening anytime soon,” PM Edouard Philippe said in an interview on LCI news channel. “This life of confinement will last a few more weeks.” The new fines will start at €135 but can increase to €1,500 for repeat offenders. People are only allowed to play sport, walk or jog if they do so alone, no more than once a day, and within 1 kilometer of home. Local mayors can allow some open-air markets to stay open only if they are critical to a town’s food supply.

    Even more galling, for many, is the announcement that the funerals of COVID-19 victims will be limited to 20 people.

    Ireland, meanwhile, reported its largest daily increase in cases yet as deputy premier Simon Coveney said he tested negative for the coronavirus. Coveney took the test after he was contacted by a health service tracing team “to say I had been in close contact with a person who tested positive for COVID-19.” On Twitter he said he “followed all protocols & tested negative.” The deaths of two men brought the number of fatalities in Ireland to six, in addition to two in Northern Ireland, while on Monday afternoon Dublin reported a record 219 new infections, bringing Ireland’s total to 1,125.

    Additionally, anonymously sourced reports claimed the UK government would throw its support behind two ventilator models.

    *  *  *

    Update (1611ET): The UK has confirmed more deaths on Monday, bringing the national death toll to 335. Johnson led an emergency Cobra committee meeting earlier and is expected to order all shops except supermarkets, food stores and pharmacies to close.

    According to the Telegraph, Johnson’s emergency legislation to respond to the coronavirus outbreak has cleared its first hurdle in the Commons, with MPs giving the Coronavirus Bill an unopposed second reading.

    *  *  *

    Update (1520ET): As we near the end of the trading day, we’ve seen Michigan join the ranks of US states that have issued “shelter in place orders”, with Michigan’s requiring nonessential workers and businesses to stay inside or stay closed until April 13. That’s effective Monday night at midnight. Michigan Gov. Gretchen Whitmer, after being criticized for Trump 2 weeks back for not doing enough, has issued the order, which will close the state for three weeks.

    Michigan joins Indiana, which issued a similar order earlier. Both join the growing number of states ordering or strongly encouraging citizens to shelter in place. Meanwhile, as we mentioned earlier, Massachusetts Gov. Charlie Baker, meanwhile, announced a stay-at-home “advisory” for the state’s nearly seven million residents.

    Now, 14 US states have ordered residents or issued advisories calling for residents except essential workers to stay at home.

    Meanwhile, the State Department said it’s monitoring approximately 13,500 US citizens abroad who are seeking assistance in being repatriated, a senior State Department official said Monday.

    As of noon on Monday, eight US states had postponed primaries.

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    In Africa, where more countries are closing borders and restricting travel, Nigeria announced that it’s closing its land borders for four weeks to prevent the spread of coronavirus, President Muhammadu Buhari said via a spokesperson  on Monday. additionally, Nigeria’s Civil Aviation Authority has already banned all international flights except essential or emergency flights.

    As state and local officials search for more creative solutions to house coronavirus patients, the city of Chicago has partnered with five hotels to house some quarantined people and isolated coronavirus patients, as well as others who need assistance.

    Canada reported a significant increase in Covid-19 cases, especially in its largest provinces of Ontario, Quebec and British Columbia.
    Most recent data collected from each province indicates at least 2,000 cases with 23 deaths. On Monday alone, new cases spiked by nearly a third. Health officials in Ottawa said they have now tested more than 100,000 people and will be able to test as many as 10,000 people per day. As Italy reports a drop in cases, giving the country cause for optimism as the outbreak appears to be peaking, the Netherlands has banned all public gatherings until June 1.

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    Though Italy isn’t the only European country reporting a decline in new cases. After a jump across the board over the last week, Spain, France and the UK have all reported a slowdown in new cases.

    As the country tries to understand how the federal effort to aid the states will be rolled out, Defense Secretary Mark Esper said Monday that the Army can’t provide help to every state at once. Esper made the comment after speaking with 10 governors.

    “I’ve spoken with 7, 8, 9, 10 governors so far each one of them has had requests for field hospitals, those who have been along the coastline have talked about the need for ships so we clearly can’t meet everybody’s needs with what we have in our inventory so we rely on FEMA to do the assessment, validation and then the prioritization,” he said.

    Instead, the military will be used as a “front-line” aid for states, helping them during the early days of an outbreak before withdrawing and moving elsewhere as more buildings are retrofitted into hospitals for the ill. President Trump and state governors have already called up more than 6,000 national guardsmen across more than 40 states; Andrew Cuomo is scouting locations for the Army Corp of Engineers to start their renovations.

    Boeing, meanwhile, has shuttered its Puget Sound operations for two weeks.

    In France, Prime Minister Edouard Philippe announced new restrictions Monday night while warning the French people that the lockdown could last for weeks as too many have disobeyed.

    Nearly 370,000 people around the world have been confirmed positive with the virus. Notably, Myanmar announced its first 2 cases of the virus on Monday.

    *  *  *

    Update (1415ET): As more cases are confirmed in New York State, Gov. Andrew Cuomo is reportedly touring the Javits Center in Manhattan, where the Army Corp of Engineers might be converting the space into an overflow hospital.

    Cuomo is also looking at the Westchester Convention Center and two university campuses.

    *  *  *

    Update (1300ET): As more state’s update their confirmed case tallies, CNN Health is reporting that the number of confirmed cases across the US had climbed to 40,069 cases as of 1pmET. This comes as Sen. Schumer’s claim that “we are very close to a deal” has lifted stocks off their lows.

    As researchers continue to pursue treatment options for COVID-19, the WHO on Monday warned against using “untested drugs” to treat patients. This after two patients in Nigeria reportedly suffered chloroquine poisoning after President Trump praised the anti-malaria drug as a treatment for the novel coronavirus.

    Health officials are warning Nigerians against self-medicating after demand for the drug surged in Lagos.

    Maryland has just shuttered all nonessential businesses, though Gov. Larry Hogan hasn’t yet issued a ‘stay at home’ order, he strongly recommended that residents of his state remain home.

    As Germany closes its borders to all foreigners except asylum seekers, the EU has announced that it will provide more than $20 million in “humanitarian aid” to Iran, one of the hardest-hit countries, as critics blame US sanctions for the country’s failure to contain the outbreak.

    In Mexico, which still has a relatively low number of cases, the government is handing over control of hospitals to the military to prepare for them to be overrun.

    Meanwhile, Italy’s Lombardy region reported a drop in hospital patients on Monday, while the region and Milan, its largest city, reported another drop in newly confirmed cases, as Italy prepares to revise its death toll lower. Across the country, the number of new deaths reported on Monday dropped to 601, down from 651 the day before.

    And as the Army Corp of Engineers prepares to start renovating buildings into emergency hospitals, one general has offered more details on that.

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    *  *  *

    Update (1250ET): Indiana’s governor has issued a stay at home order, as leaked reports had suggested.

    The state’s lockdown won’t begin officially until Tuesday, with the governor emphasizing that the next two weeks are ‘critical’.

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    We suspect he won’t be the last.

    *  *  *

    Update 1220ET): As Chuck Schumer promises that Senate Democrats are ‘close’ to striking a deal with Treasury Secretary Steven Mnuchin on the stimulus bill, the UK just reported another 14 deaths, with the total climbing to 303, up from 289 earlier.

    *  *  *

    Update (1200ET): heading into the lunchtime hours, as thousands of traders get up from their couch to go fix themselves a sandwich, there’s some more breaking news about the growing number of lockdown orders.

    First, rumor has it that South Africa is preparing to announce a 21-day lockdown. In the US, reports claim Indiana and Massachusetts are joining the list of states who have declared mandatory lockdowns. That would add13.6 million more Americans to the lockdown total.

    New Jersey health officials just released their latest update on the number of positive tests, and the total has increased by nearly 1,000 overnight, to 2,844 from 1,914. The number of deaths in the state has climbed to 27.

    A joint statement released by the Bank of England and British banks said the country’s banks are in a strong financial position heading into the crisis and that “banks are here to help the public.”

    *  *  *

    Update (1130ET): After heading into isolation over the weekend, German Chancellor Angela Merkel has reportedly tested negative for VOID-19, sparing Europe’s largest economy from the challenge of confronting the outbreak without the country’s its longtime leader.

    NY Gov. Andrew Cuomo unveiled the latest update on confirmed cases in the state Monday morning, revealing that the number of confirmed cases in the state had climbed to 20,875 cases, up from 5,707 compared with the day before, and 157 deaths, up from 99 in NYC alone as of last night. In the city, Mayor de Blasio confirmed 12,305 positive cases, an increase of 3,260 from Sunday. Across the state, 24% of all cases requiring hospitalization were in the ICU.

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    Sen. Amy Klobuchar, who is jockeying with Elizabeth “slush fund” Warren for the VP nomination, revealed Monday that her husband has tested positive for the virus, but that she herself won’t get tested because she doesn’t spend much time around him.

    And here’s Rabobank’s Michael Every with his take on the situation in Europe, the US and Asia.

    The Democrats, meanwhile, are holding the administration’s rescue package hostage, and demanding unprecedented bargaining power for unions, hiking fuel emissions standards for airlines (at a time when governments around the world are trying to save that industry from collapse) and the expansion of tax credits for wind and solar, or they will refuse to vote for the bill, ensuring that it will take longer to pass, at the very least.

    Before the group’s latest “emergency” meeting could even begin, the G-20 was dashing hopes for coordinated action. And despite the unprecedented steps taken by monetary policy officials around the world in the last few weeks, central bankers in Italy, Spain, Portugal and France have called on eurozone finance ministers to embrace coordinated action to launch a rescue package.

    As shortages of hand sanitizer leave nursing homes and private care facilities around the country in a bind, forcing New York state to enlist its prison population to making the stuff, yet another alcoholic beverage maker has offered to donate alcohol to companies producing the stuff. That company is Diageo, which promised 2 million liters of alcohol, joining Pernod Ricard and LVMH.

    Per the FT, distillers use 96 proof alcohol as the base for alcoholic beverages such as gin and vodka but as their factories are not equipped to make gels, some are opting to make liquid sprays, while others (including Pernod and Diageo) are seeking to supply ingredients.

    *  *  *

    Update (0955ET): As CNBC just pointed out, financial services employees are exempt from New York’s stay at home order. Still, Monday marked the first day of all-electronic trading, and though it’s been a pretty interesting ride so far, the fact that we’re not down 1,000+ points on the Dow after another ‘unprecedented’ Fed intervention (just when the whole world thought they were out of ammo…) is making Monday feel…almost normal?

    In the UK, the Telegraph just reported that Boris Johnson’s government is preparing to close all non-essential shops, leaving just grocery stores, pharmacies and others open as the public continues to largely ignore the PM’s ‘social distancing’ recommendations, as many ventured outside in groups during what was a sunny mother’s day on Sunday in the UK.

    Johnson is expected to deliver the latest shutdown order shortly, although enforcement measures will need to wait for new powers in the Coronavirus Bill likely to become law on Tuesday.

    According to Sky News, Britain could be locked down to force people into self-isolation “very soon”, as the prime minister considers racing new laws through the Commons in a day. The laws would expand his powers to enforce a national ‘stay at home’ order.

    MPs are returning to parliament on Monday to debate the government’s Coronavirus Bill and pass it through all the necessary stages (the legislation is expected to pass the Commons thanks to the Conservatives’ majority), before it goes to the House of Lords, where it’s also expected to pass and become law by end of the week.

    Circling back to the US, after Lloyd Blankfein audaciously brought up the possibility that the economic fallout might be more punishing than the virus outbreak itself, President Trump has resorted to tweeting in all caps as he waits for a second Senate vote.

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    This comes as the US shunts aside Spain to become the country with the third-largest number of confirmed coronavirus cases, with 35k, leaving it on track to surpass both Italy and China by next week.

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    In other news, sorry, rich people: India’s ban on incoming international flights will also include private planes.

    *  *  *

    For millions of Americans, the full weight of the novel coronavirus outbreak, and its ensuing crisis, finally became apparent over the weekend as governors from New York, to Ohio, to Delaware warned that all “non-essential” employees will soon be required to shelter in place.

    Additionally, though hundreds of thousands of cases around the world likely remain undiagnosed, global health authorities revealed on Monday that the acceleration in new cases over the last 48 hours was the fastest on record, according to the FT’s calculations: According to the paper, the total number of confirmed cases around the world increased by a record magnitude this weekend as the situation worsened, particularly in the US.

    Health authorities reported an additional 61,872 cases over the 48-hour period, while the number of fatalities increased by 3,260 to 14,748, the largest two-day jump in new cases on record.

    The US was the hardest hit on Sunday, adding 9,339 cases, nearly 4,000 more than the 5,560 new cases that Italy added. For the first time in nearly 2 weeks, Italy saw a slowdown over the weekend. In Spain, meanwhile, the situation has been the opposite: 450 people have died in Spain over the past 24 hours after contracting the coronavirus, while there has been a surge in intensive care patients.

    The ministry of health in Madrid said on Monday that 2,172 have died, a 26% increase on Sunday’s total of 1,720. Spain, with more than 33,000 infected, is the worst-hit European country after Italy.

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    Across the US, the scale of the crisis was finally laid bare when the total number of confirmed cases surged to almost 30,000 and New York emerged as an international hotspot. As of Monday morning, the total number of cases around the world had climbed to 349,211, per Johns Hopkins.

    During a press conference on Sunday, New York State Gov. Andrew Cuomo warned that he expected up to 80% of the state’s population to ultimately contract the virus, and told residents to brace for disruptions to daily life that could last for as long as nine months.

    As more governors ordered their citizens to stay home beginning on Monday, Reuters counted that roughly one in three Americans is now under orders to stay home to slow the spread of the coronavirus pandemic as Ohio, Louisiana and Delaware became the latest states to enact broad restrictions, along with the city of Philadelphia, according to Reuters.

    We reported last night that Ohio, Louisiana and Delaware are now the latest states to enact broad restrictions (along with the city of Philadelphia), joining New York, California, Illinois, Connecticut and New Jersey, home to 101 million Americans combined.

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    Ohio’s order will go into effect at midnight EDT on Monday and stay in effect until April 6. Louisiana’s order goes into effect at 5 pm CDT on Monday and lasts through April 12. Delaware’s order begins at 8 am on Tuesday.

    Texas’s Dallas County, home to more than 2.5 million people, and Philadelphia, with 1.6 million residents, told non-essential businesses on Sunday to close and residents to stay home.

    In Kentucky, non-essential businesses must close by 8pm on Monday, but authorities stopped short of ordering residents to stay home.

    The orders come as the US cracks 35k cases, leaving it on track to surpass other developed countries given the scope of its outbreak.

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    To be more exact, as of the market open, there were 35,225 cases in the US, and 447 cases according to Johns Hopkins official data base, though numbers varied slightly between sources.

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    As the Empire State ramps up testing faster than many of its peers, thanks largely to the leadership of Gov. Andrew Cuomo, New York now comprises almost half of all diagnosed cases of COVID-19 in the US.

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    While confirming to the public that he had tested negative for the virus, Vice President Mike Pence said 254,000 Americans had been tested for the coronavirus as of Sunday, and that 10% were positive.

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    Source: Reuters

    More news from the US: As more Americans prepare to rely on e-commerce to buy goods as traveling to the grocery store becomes taboo, Amazon is doubling overtime pay as the outbreak worsens, while other companies focus on mass layoffs. Although the Fed’s latest monetary bazooka blast has pushed futures back into the green, easing the pressure on lawmakers, another vote for the Senate’s $1 trillion-plus rescue package – the third bill to confront the outbreak.

    In Asia, Hong Kong, which reported its largest jump in daily cases yet last week, imposed a controversial 14-day ban on foreign travelers entering the city state. Per the FT, Hong Kong will ban the arrival of all non-residents arriving by plane for a fortnight and all connecting flights will be cancelled from Wednesday, in the latest move by a government to tighten borders in an attempt to limit the spread of the coronavirus. Arrivals from Macau and Taiwan will also have to undergo compulsory quarantine measures like all other foreign arrivals, chief executive Carrie Lam said on Monday. Residents returning from the UK, the US and Europe will be required to undergo virus testing even if asymptomatic.

    Lam’s government is planning to propose legislation to ban restaurants and bars from selling alcohol and order all recreational facilities to close, including changing rooms and gyms.

    Last week, the New York Times reported that the virus total in India was surprisingly low, especially when factoring in the country’s endemic poverty and massive population. But as the country suspends public transit on Monday, hampering medical workers in their quest to get to work, many are beginning to wonder: If the situation in India is so optimistic, why is the government bothering with all of thee closures.

    After a total suspension of services on Sunday, city buses began running again on Monday, but are only operating infrequent skeletal services.

    “How are staff supposed to attend the hospital with no public transport,” said one doctor at a 595-bed private hospital in New Delhi.

    “Hospitals are not run by doctors alone. Doctors all reached because they have their cars. But the electrician couldn’t reach because he didn’t have a scooter. All the staff nurses were calling saying, there is no bus how do we come?”

    “Where was the planning for this?” the doctor asked.

    It’s certainly curious…considering the country is also shutting down domestic air travel on Monday.

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    In other news, Australia joined Canada in withdrawing its athletes from the Tokyo 2020 Olympics, placing further pressure on the IOC to cancel the games. Japanese Prime Minister Shinzo Abe said Monday that the Tokyo Games “cannot be held” under the current circumstances.

    Tokyo Olympic organizing committee President Yoshiro Mori said he supports the IOC’s decision to review plans to hold the Olympics.

    “If I’m asked whether we can hold the Olympics at this point in time, I would have to say that the world is not in such a condition,” Abe told a parliamentary session, adding he hopes to hold talks with International Olympic Committee President Thomas Bach over the issue.

    “It’s important that not only our country but also all the other participating countries can take part in the games fully prepared,” Abe said, according to Kyodo News.

    Spain will become the next country to expand its lockdown for 15 days as deaths and confirmed cases in the country continue to soar, while the British government on Monday ordered 1.5 million people with serious health problems to self-quarantine at home for the next 3 months, the length of time during which PM Boris Johnson believes the UK can quash the virus is enough people follow the government’s guidelines.


    Tyler Durden

    Mon, 03/23/2020 – 21:02

  • "The World You Lived In No Longer Exists" – Mike Krieger Exposes The 'Massive Power Grab'
    “The World You Lived In No Longer Exists” – Mike Krieger Exposes The ‘Massive Power Grab’

    Authored by Mike Krieger via Liberty Blitzkrieg blog,

    I met a traveller from an antique land
    Who said: Two vast and trunkless legs of stone
    Stand in the desert. Near them, on the sand,
    Half sunk, a shattered visage lies, whose frown,
    And wrinkled lip, and sneer of cold command,
    Tell that its sculptor well those passions read
    Which yet survive, stamped on these lifeless things,
    The hand that mocked them and the heart that fed:
    And on the pedestal these words appear:
    ‘My name is Ozymandias, king of kings:
    Look on my works, ye Mighty, and despair!’
    Nothing beside remains. Round the decay
    Of that colossal wreck, boundless and bare
    The lone and level sands stretch far away

    – Percy Shelley, Ozymandias

    It didn’t take long for the most opportunistic, nefarious and corrupt actors in the U.S. to turn a pandemic crisis into another massive power grab attempt. We’ve seen it before; after 9/11 and also throughout the response to the financial crisis a decade ago. The irredeemable sociopaths who always make the big, important decisions used those crises to consolidate wealth and power. They’re going for it again.

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    There are many examples, but let me list a few:

    – The EARN IT bill, by which senators are attempting to destroy widespread public use of encryption, i.e. private communications. (EFF)

    – The White House and the CDC are asking Facebook, Google and other tech giants to give them greater access to Americans’ smartphone location data. (CNBC)

    – The Justice Department has quietly asked Congress for the ability to ask chief judges to detain people indefinitely without trial during emergencies. (Politico)

    – U.S. Senators are attempting to use the crisis as an opportunity to pull off a gigantic corporate coup. (Matt Stoller, BIG)

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    Then there’s the really big one, the Federal Reserve. An institution with more unaccountable power to shape and manipulate our world than any other, yet whose actions remain subject to virtually zero public debate.

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    While we’re at it…

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    I wrote about the scam that is the Federal Reserve last year in the post, Monetary Looting, and what they’re doing now makes those repo operations look like child’s play.

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    We often get distracted debating the implications of Fed actions, and in the process lose sight of the bigger picture. The real question we need to be asking is why do we allow a handful of unelected banker welfare agents the right to shape our entire world? It’s a crazy system, and until we start questioning the underlying premises of everything about our world, we’ll remain confused and subjugated.

    That said, I remain more optimistic than ever that once we get through this crisis and a rough transition period, a far better era awaits on the other side. I say this because I believe this pandemic will shake enough people to such an extent they’ll emerge from it very different people with a more enlightened understanding of the world and their roles in it. An event like this can make people less conscious, or it can make them more conscious. I think humanity will expand its consciousness.

    Of course, the future is not written in stone. Each and every one of us needs to grow up and step up if we’re going to build a better world. We each have our skillsets, so I ask everyone reading this to think about how they can repurpose their talents to the great work of ushering in a new era. I don’t do any of this to change the world. I can’t do that. I do this to inspire as many people as possible to change their own worlds. Then everything changes.

    If I had to summarize where we’ve been and where I think we’re going, it would be with the following.

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    The world you lived in no longer exists, but the world to come has not yet been created. The worst people in society will attempt to create it in their image, but we can’t allow that. We must step up and create it ourselves. It’s entirely possible. Get to work.

    *  *  *

    Liberty Blitzkrieg is an ad-free website. If you enjoyed this post and my work in general, visit the Support Page where you can donate and contribute to my efforts.


    Tyler Durden

    Mon, 03/23/2020 – 20:45

  • SoftBank Sells $41 Billion In Assets To Finance More Stock Buybacks
    SoftBank Sells $41 Billion In Assets To Finance More Stock Buybacks

    SoftBank’s shift from long-term ‘vision’ to short-term ‘survival’ is now complete.

    After the infamous string of blowups that hammered both SoftBank’s private investments as well as its $100 billion ‘Vision Fund’, which consisted mostly of money from the Saudis and Abu Dhabi most notoriously the collapse of the WeWork IPO as the unicorn’s valuation evaporated, triggering the ouster of its founder-CEO, a string of other executives, and a sudden spiral that ended with an emergency rescue package that narrowly saved WeWork from imminent bankruptcy.

    Now, under pressure from activist Paul Singer’s Elliott Management and a handful of other investors, and with the reputation of Chairman Masa Son likely forever tarnished, it appears SoftBank is taking direct steps to shore up its plunging stock price via – what else? – share buybacks.

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    This, at a time when companies, particularly American companies, are facing tremendous public backlash against plans to buyback stock, which has even gotten tangled up in the battle over the second part of the White House’s economic plan.

    Mirroring, in an ironic way, the forced deleveraging of Chinese conglomerates like Anbang, HNA & Dalian Wanda, SoftBank announced on Monday that it would start selling off some of the crown jewels, including some of its stake in Alibaba, to shore up its balance sheet and prop up its share price.

    The company earmarked up to $18 billion for share buybacks, and another $23 billion to redeem debt and build up cash reserves on Monday, two weeks after announcing share buybacks of roughly $4.5 billion. The move would allow SoftBank to repurchase up to 45% of its shares outstanding, and the planned buyback is more than twice the size of the $20 billion or so that Elliott had pushed for.

    The action “reflects the firm and unwavering confidence we have in our business,” Son said.

    The company is also hoping to pull $3 billion of rescue capital from WeWork, claiming that investigations into WeWork allow SoftBank to pull the funds.

    Though most of the money will be used for stock buy backs, some will go down to pay the company’s massive $173 billion debt pile (though more than half of that debt sits on the books of SoftBank subsidiaries).

    SoftBank’s debtholders are getting restive as well. On a consolidated basis, SoftBank had about ¥19 trillion yen ($173 billion) in debt as of the end of last year, although more than half was held by subsidiaries like Sprint, which SoftBank said it wasn’t on the hook for.

    Soon after SoftBank announced its first share buyback on March 12, credit rater S&P Global downgraded the company’s outlook to negative, saying the move raised questions about SoftBank’s commitment to financial soundness. In recent days, as global credit markets have tanked, the prices of some of SoftBank’s bonds plummeted as well, while the price of a financial instrument offering protection against potential bankruptcy, known as a credit default swap, rose.

    SoftBank also said it has hired an outside firm to search for three new independent directors to improve transparency and governance.

    But given Masa Son’s reputation, and his still-formidable fortune and reputation, we can’t help but wonder if all of this is merely a ruse, as Masa Son, irritated by the encroachment of activists, prepares a long-shot bid to try and take the company – or at least a scaled-back version of the company a la Rupert Murdoch’s new Fox News – private.

    It’s really his only option if he ever hopes to run SoftBank with the level of autonomy he enjoyed before the WeWork fiasco.


    Tyler Durden

    Mon, 03/23/2020 – 20:25

Digest powered by RSS Digest

Mar 23

Today’s News 23rd March 2020

  • Watch: US "Successfully" Test-Launches Hypersonic Glide Body
    Watch: US “Successfully” Test-Launches Hypersonic Glide Body

    Over the years, we’ve had a lot of coverage on hypersonic developments in Russia and China, mostly because their hypersonic programs are more advanced than the US. Now it appears the US could be catching up, as a new video via the US military shows a recent test of a hypersonic weapon.

    The US Department of Defense (DoD) reported that it successfully launched a common hypersonic glide body (C-HGB) missile from the Pacific Missile Range Facility, Kauai, Hawaii, on March 19. 

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    The Missile Defense Agency (MDA) monitored the launch of the hypersonic missile as it hit speeds above Mach 5. Information gathered in this launch will further the DOD’s hypersonic program, reported Defense Blog. 

    “This test builds on the success we had with Flight Experiment 1 in October 2017, in which our C-HGB achieved sustained hypersonic glide at our target distances,” said Vice Adm. Johnny R. Wolfe, Director, Navy’s Strategic Systems Programs, which is the lead designer for the C-HGB.

    “In this test we put additional stresses on the system and it was able to handle them all, due to the phenomenal expertise of our top notch team of individuals from across government, industry and academia. Today we validated our design and are now ready to move to the next phase towards fielding a hypersonic strike capability.”

    “This test was a critical step in rapidly delivering operational hypersonic capabilities to our warfighters in support of the National Defense Strategy,” said US Army LTG L. Neil Thurgood, Director of Hypersonics, Directed Energy, Space and Rapid Acquisition, whose office is leading the Army’s Long Range Hypersonic Weapon program and joint C-HGB production.

    “We successfully executed a mission consistent with how we can apply this capability in the future. The joint team did a tremendous job in executing this test, and we will continue to move aggressively to get prototypes to the field.”

    We noted back in October that the DoD will field C-HGBs sometime in 2023. 

    Each missile is capable of achieving Mach 5 or higher, which is about 3,800 mph. 

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    Hypersonic missiles are the DoD’s top modernization effort at the moment because it is behind the hypersonic curve.

    Shown below, C-HGBs can outmaneuver the world’s most advanced missile defense shields. 

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    As a pandemic consumes the world, the global economy crashed, and President Trump already plowed $2 trillion into military modernization efforts — WWIII with Russia and or China could be much closer than anyone thinks. 


    Tyler Durden

    Mon, 03/23/2020 – 02:45

  • European Union: The End?
    European Union: The End?

    Authored by Judith Bergman via The Gatestone Institute,

    Since the outbreak of coronavirus in Italy, Italians have learned that other European Union member states do not always practice the beautiful words that they like to preach — especially solidarity.

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    Solidarity is supposedly a fundamental principle of the European Union. It is enshrined in the EU treaties and the EU refers to it as one of its goals. According to article 222 of the Treaty on the Functioning of the European Union, one of the two principal treaties of the European Union:

    “The Union and its Member States shall act jointly in a spirit of solidarity if a Member State is… the victim of a natural or man-made disaster. The Union shall mobilise all the instruments at its disposal… to assist a Member State in its territory, at the request of its political authorities, in the event of a natural or man-made disaster”.

    The EU has invoked the solidarity principle when it comes to receiving migrants: During the 2015 migrant crisis, the EU assigned each EU country a fixed quota of migrants and refugees to accept. In 2017, the EU took Hungary, Poland and the Czech Republic to the Court of Justice of the European Union (CJEU) over their refusal to take migrants. In late October 2019, the Advocate General, legal advisor to the Court, said that EU law must be followed and that the EU’s principle of solidarity “necessarily sometimes implies accepting burden-sharing”. The Court has yet to issue a ruling on the issue, but it usually follows the advice of the Advocate General.

    The EU even has a specific unit, the Emergency Response Coordination Centre (ERCC), which operates under the EU’s Civil Protection Mechanism, which helps both EU and certain non-EU states with crisis management, in accordance with the solidarity principle. This is where Italy appealed for help at the beginning of its coronavirus crisis — and received in return exactly nothing.

    “We asked for supplies of medical equipment, and the European Commission forwarded the appeal to the member states,” Italy’s permanent representative to the EU, Maurizio Massari, told Foreign Policy. “But it didn’t work.”

    In addition, Germany and France, leading EU member states, even imposed bans or limitations on the export of facemasks and protective equipment. This drew mild criticism from European Union officials, such as Stella Kyriakides, the EU’s Commissioner for Health and Food Safety, who had to remind member states, fruitlessly, that, “Solidarity is key.”

    In the past, EU member states have shown solidarity. According to its website, since its inception in 2001, the EU Civil Protection Mechanism has responded to more than 330 requests for assistance inside and outside the EU. In July 2018, for instance, when Sweden was facing widespread wildfires, primarily forest fires, EU member states sent firefighting assistance.

    The coronavirus outbreak, however, is different from geographically isolated crises, such as forest fires in a member state that can be managed by pooling firefighting or other resources. When an entire continent is in the midst of a highly contagious virus epidemic, solidarity becomes a more complex issue. Every state inevitably considers whether it can afford to send facemasks and protective equipment that might be needed for its own citizens. In other words, every state considers its own national interest first. In the case of Italy’s appeal for help, EU member states made their own interests their highest priority. This is classic state behavior and would not have caused any outrage prior to the establishment of the European Union.

    What the coronavirus crisis reveals is that the member states of the European Union will revert to national interests when extreme circumstances call for it. While such revelations may not spell the immediate end of the European Union, they certainly raise questions about the point of an organization that pledges solidarity as a founding principle, but abandons that principle the moment it is most called for.

    Coronavirus, however, is not the only recent issue to put into question the viability of the European Union.

    The current crisis on the Greek-Turkish border has shown the EU not only as unhelpful, but an actual liability: The EU left an already overwhelmed Greece to deal with the migrant crisis — manufactured by Turkish President Recep Tayyip Erdogan for political gain — on its own, despite the apparent rhetorical support by European Commission President Ursula von der Leyen, who called Greece Europe’s “shield”.

    On top of Europe’s attempts to deal with the coronavirus outbreak, the EU Commissioner for Home Affairs, Ylva Johansson, ordered that Greece must allow the migrants that Erdogan transported to the border to apply for asylum. Greek Prime Minister Kyriakos Mitsotakis had announced earlier that Greece was suspending all asylum applications based on article 78 (3) of the Treaty on the Functioning of the European Union, which states:

    “In the event of one or more Member States being confronted by an emergency situation characterised by a sudden inflow of nationals of third countries, the Council, on a proposal from the Commission, may adopt provisional measures for the benefit of the Member State(s) concerned”.

    Ylva Johansson, however, said that the commission would not propose suspending the right to asylum:

    “Individuals in the European Union have the right to apply for asylum. This is in the treaty, this is in international law. This we can’t suspend.”

    Suspending all common sense, however, is apparently something of which the EU is fully capable. As Johansson was making her irrational demands to Greece at a time when Europe was at a breaking point grappling with the coronavirus outbreak, German Chancellor Angela Merkel appeared to show signs that she might submit to Erdogan’s migrant blackmail. Less than two weeks after Erdogan had thousands of migrants transported to the border with Greece, Merkel said, according to a report by Die Welt, that she would work “with all her strength” to “take the EU-Turkey agreement to a new level”.

    The agreement to which Merkel was referring is the 2016 deal between the EU and Turkey, to hold migrants in Turkey in exchange for six billion euros. Up until now, the EU had focused less on Turkey’s other demands, also written in the 2016 deal, but Merkel’s recent statement brought the issues back into focus: Visa-free travel for Turks in the EU, duty-free movement of Turkish goods within the EU, the setting up of a “safe zone” in northern Syria, and the resumption of regular meetings between Turkey and the EU.

    If the EU were to approve visa-free travel for Turks — or whoever has the means to buy a Turkish passport — millions of Turks would be able to enter the EU legally and potentially “disappear” there. Already at breaking point, the EU would arguably become a very different kind of “European” Union with Turkey, a country of 80 million people, literally invited to enter Europe.

    Germany also pledged more money for Turkey. According to Deutsche Welle, Merkel told Erdogan that she was willing to increase EU funds for “the care of refugees in Turkey in return for Ankara stopping thousands of refugees attempting to cross the Turkish-Greek border”.

    Turkey’s migrant blackmail worked surprisingly well and surprisingly fast. “We must not allow refugees to be turned into pawns for geopolitical interests,” announced German Foreign Minister Heiko Maas at the beginning of the Greek border crisis. “No matter who tries, they must reckon with our resistance.” Germany, and the EU with it, has been exposed as a house of cards. As the house folded, the world was left in little doubt that Erdogan was running the show.

    Consequently, on March 18, Erdogan announced that the migrant crisis that he had orchestrated was officially over: Turkey was closing its borders with Greece and Bulgaria, ostensibly due to the coronavirus. The Telegraph cited reports from Turkish news website Medyascope that around 150 buses had been readied to collect migrants from the border and ferry them back to Istanbul and refugee camps. Erdogan got what he wanted.

    All Erdogan needs to do now it sit back and wait for the EU, with Merkel at the helm, to meet his demands.


    Tyler Durden

    Mon, 03/23/2020 – 02:00

  • As State Censorship Grows, VPN Usage Soars During COVID-19 Crisis
    As State Censorship Grows, VPN Usage Soars During COVID-19 Crisis

    The global COVID-19 outbreak has led to a surge in VPN usage according to Atlas VPN. The company published data from their 50,000 weekly users and during the weeks from March 2-8 and March 9-15 and, as Statista’s Niall McCarthy points out, it shows a steep rise in VPN usage in countries dealing with significant outbreaks.

    In Italy where there were close to 25,000 cases and more than 1,800 deaths on March 16, VPN use climbed 112 percent during the two weekly periods mentioned above. Likewise in Iran, it climbed 38 percent.

    Infographic: VPN Usage Surges During COVID-19 Crisis | Statista

    You will find more infographics at Statista

    Even in countries with fewer cases, VPN popularity has increased. For example, the United States had 3,802 confirmed cases at the start of this week while VPN usage climbed 53 percent over the course of the past week. In countries experiencing lockdowns in a bid to slow COVID-19’s spread, there have also been increases. In Spain, usage grew 36 percent while it climbed 29 percent in Germany and 21 percent in France.

    Atlas VPN attributes the growth to more people staying at home due to lockdowns, quarantines and social distancing. In most countries dealing with significant outbreaks, schools and malls remain closed while employees are being encouraged to work from home. That has resulted in more people spending their time online with some availing of VPN services to access geoblocked streaming content. Most companies also only allow their employees to work via a VPN connection to ensure the safety of their files and avoid hacking.


    Tyler Durden

    Mon, 03/23/2020 – 01:00

  • Chang: China's Real Disease Is Not COVID-19
    Chang: China’s Real Disease Is Not COVID-19

    Authored by Gordon Chang via The Gatestone Institute,

    Last July, five American analysts who have been consistently wrong told us “China is not an enemy.”

    Actually, this time they were technically right. China’s communism is not an enemy. It is the enemy.

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    After the coronavirus pandemic subsides, Americans should not forget Beijing’s malicious campaign against their country.

    For more than a month, the central government’s foreign ministry and the Communist Party’s Global Times have been trying to tar the Trump administration. The campaign culminated in a series of tweets from rising Beijing star Zhao Lijian, foreign ministry spokesman and deputy director general of the ministry’s Information Department.

    On March 12, in a tweet, he accused U.S. officials of being “immoral.” Hours before, he had tweeted that “patient zero” was in the U.S. and suggested that the U.S. Army had “brought the epidemic to Wuhan” — intimating that America was conducting germ warfare.

    Also that day, foreign ministry spokeswoman Hua Chunying, Zhao’s boss, twisted testimony of Robert Redfield, director of the Centers for Disease Control and Prevention, to try to show that the coronavirus outbreak had started in America.

    President Donald J. Trump, in his Rose Garden press conference the next day, March 13, downplayed the overtly hostile messages. He first noted his conversations with Chinese ruler Xi Jinping and then said, referring to Chinese leaders, “they know where it came from.”

    Actually, it is worse if Chinese officials in fact knew where the coronavirus originated. In this case, these officials, by going out of their way to blame the U.S., were demonstrating once again the inherent hostility of their system to America.

    Unfortunately, Beijing cannot be deterred. The U.S. State Department on March 13 summoned Chinese Ambassador Cui Tiankai to protest the foreign ministry’s disinformation campaign. Despite the warning, the Chinese ambassador to South Africa, Lin Songtian, on March 16 continued to promote the coronavirus-not-originated-in-China theory, with a tweet.

    From here, it looks as if relations are only going to deteriorate. For one thing, Beijing’s official Xinhua News Agency has been threatening to cut off “medical supplies,” “plunging” America into a “mighty sea of coronavirus.”

    Beijing has, according to Trump’s trade advisor Peter Navarro, already nationalized one American factory making medical masks. Moreover, Fox Business Network’s Maria Bartiromo on air repeatedly said the Chinese forced at least one ship carrying masks, gloves, and other protective gear to the United States to return to China.

    Beijing’s threat to cut off supplies and harm Americans will only encourage the U.S. to cut trade with China, or, more precisely, to not allow trade to return to pre-coronavirus levels. Reducing commerce, some believe, is the only long-term solution for the U.S. as Chinese communists have tried to use their central role as a manufacturer to spread totalitarianism and advance other geopolitical goals anathema to the Western democracies.

    The cutting of links will still leave trade at high levels, at least at first. Nonetheless, the large volume of commerce, often called the “ballast” of China-U.S. ties, probably will not stabilize relations.

    “Does trade increase or decrease the likelihood of conflict?” Samuel Huntington, the late Harvard political scientist, asked in The Clash of Civilizations and the Remaking of World Order.

    “The assumption that it reduces the probability of war between nations is, at a minimum, not proven, and much evidence exists to the contrary.”

    High levels of trade did not prevent the First World War, he pointed out in that landmark book. As Huntington, building on the work of others, noted, what is important is expectation. “Economic interdependence fosters peace,” he wrote, “only ‘when states expect that high trade levels will continue into the foreseeable future.'” If, however, trade partners “do not expect high levels of interdependence to continue, war is likely to result.”

    Trump expects trade between the two nations to increase, saying on March 13 that China will be buying $250 billion more products pursuant to the Phase One trade deal signed January 15. Beijing in that agreement generally promised within a two-year period to increase purchases of U.S. goods and services by $200 billion over 2017 levels.

    Trump’s optimism is not shared in Beijing, however. China, using the epidemic as an excuse, is now pushing to change the agreement by deferring its purchase obligations, the heart of the arrangement as far as the U.S. is concerned.

    The Global Times notes that the pandemic inhibits Chinese demand for American goods, but that is not necessarily a good reason for relief from the terms of the deal.

    Why not? Xi Jinping, after all, knew about the coronavirus epidemic long before he authorized the signing of the deal in the White House. In February, he said he had chaired a meeting of the Party’s Politburo Standing Committee on January 7 in which he issued orders to contain the epidemic. Xi’s knowledge of the outbreak on January 15 and his push for relief now, therefore, makes him look cynical. In all probability, he had no intention of honoring his side of the bargain from the beginning. Recall that Xi broke his September 2015 pledges to former President Barack Obama not to militarize China’s artificial islands and not to hack America for commercial purposes.

    In any event, this year Sino-U.S. trade will almost certainly decline. Such a delinking would be in line with Trump’s stated desire to bring manufacturing back home.

    The president has evidently been thinking about these matters for a long time. On July 21, 2017, for instance, he issued his Executive Order on Assessing and Strengthening the Manufacturing and Defense Industrial Base and Supply Chain Resiliency of the United States. The Defense Industrial Base study, as it is known, exposed American vulnerabilities and led to actions to encourage manufacturing to return home. Trump can now use his sweeping powers granted under the International Emergency Economic Powers Act of 1977 to continue this essential process.

    Of course, war does not inevitably result when countries “delink,” “decouple,” or “disengage” their economies. Yet China and the U.S. are also moving apart as Americans become wary of an increasingly belligerent Chinese state, one that already has demonstrated that it has, for instance, little reluctance to injure Americans.

    China, as we now know, allowed the coronavirus to spread for six weeks in December and January before Xi publicly acknowledged the disease. So, it is no surprise that Americans — and the Chinese people, who are now demanding fundamental political change — realize that the real disease is communism.

    Coronavirus proves that for America and the Free World, China’s communism is the enemy — the one that really counts.


    Tyler Durden

    Mon, 03/23/2020 – 00:00

  • "You're Grounded" – Visualizing COVID-19's Effect On Global Flight Capacity
    “You’re Grounded” – Visualizing COVID-19’s Effect On Global Flight Capacity

    It’s not an exaggeration to say that the COVID-19 pandemic has thrown the world into a tailspin.

    As the number of new cases continues to surge in parts of the world, numbers are beginning to decline in others as public health officials and governments tirelessly work to slow the contagion and reach of the virus.

    However, as Visual Capitalist’s Iman Ghosh notes, the potent combination of trip cancellations and country-specific restrictions on international flights has had a staggering impact on the $880 billion global airline industry. Today’s visualization highlights data from the OAG Aviation Worldwide, which tracks how global flight capacity differs from last year’s numbers.

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    Asia Faced the First Hard Landing

    Nearly all countries have some type of travel advisory in place, with many encouraging people to avoid non-essential travel even before COVID-19 was officially considered a pandemic by the World Health Organization (WHO).

    The earliest impacts of these were felt in February, as flight capacity in and out of China dropped sharply around Lunar New Year. Also, the country’s sharpest year-over-year drop was recorded on February 17, 2020, with a 71% drop in flights compared to the same date in 2019.

    Flight capacity for Hong Kong, which was already seeing its traveler numbers declining due to months-long protests, continues its slump. As of March 16, 2020, it was down by an immense 81% compared to 2019 – the most of any jurisdiction represented in the data.

    Monitoring the Situation Elsewhere

    Meanwhile in Europe, Italy saw a 22% drop in flights coinciding with the announcement of a national lockdown on March 9, 2020. Now that the situation has intensified, flights to and from Italy have plummeted 74% from their normal rates.

    On March 11, 2020, the U.S. enforced a 30-day ban on travelers from the Schengen Area, a free-travel zone consisting of 26 countries in Europe. Although the UK and Ireland were initially exempt, the ban has since been extended to include both countries as well.

    Meanwhile, as of March 17th, the U.S.-Canada border is closed for all non-essential travel. This follows a previous announcement from the Canadian government that it would be curbing entry to only Canadian citizens, family members, permanent residents, diplomats, and Americans.

    Broadly speaking, countries around the world are taking similar actions to limit the spread of the virus and “flatten the curve”:

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    More Turbulent Times Ahead?

    As both COVID-19 and the global response to it continues to evolve, here are the largest flight capacity reductions across a few more countries in the past week:

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    Naturally, the economic impact on airlines has been immense. Nearly 40% of flights impacted by the European travel bans are U.S. based, such as Delta and United Airlines, with billions in lost revenue already estimated for this year.

    Many airlines worldwide face the threat of bankruptcy in coming months, if these declining trends continue. To hedge against these domino effects of the outbreak, U.S. airlines are requesting upwards of $60 billion in bailouts and direct assistance from the government.

    COVID-19 is throwing everything up in the air—including the fate of airline companies. It’s not yet clear when these stringent travel restrictions may be lifted, but one can only hope that these airlines do not have to continue to weather the storm much longer.


    Tyler Durden

    Sun, 03/22/2020 – 23:40

  • China's Housing Bubble Bursts: Evergrande Cuts Earnings Guidance By 50%
    China’s Housing Bubble Bursts: Evergrande Cuts Earnings Guidance By 50%

    Now that the world is firmly focusing on apocalyptic forecasts about the state of the US and global economy, with St Louis Fed president James Bullard the latest to pour gasoline into the fire with his worst-case prediction of a 50% GDP drop and 30% surge in unemployment in Q2, it is easy to forget that China, which started this whole pandemic, is still in economic lockdown. And while Beijing is pretending that the Shanghai Sniffles are now firmly behind it, and forcing people back to work while openly fabricating disease numbers  – because like Lloyd Blankfein it has realized that an economic depression is an even worse outcome than millions infected – the reality is that China’s economy is facing an unprecedented crisis of its own.

    Today we got a stark reminder of that, when Evergrande Group – China’s second-largest property developer by sales – tumbled in early trading Monday after saying it expects full-year earnings to fall by half.

    As Bloomberg first reported, the residential property developer said in an exchange filing Sunday that net profit for 2019 is expected to come in it around 33.5 billion yuan ($4.7 billion), a drop of about 50% from the previous year.

    “The decrease in profit is mainly attributable to the delivery and settlement of the lower-priced clearance stock properties in 2019, which drove down the unit price of the property delivered,” Evergrande said.

    That sent the firm’s Hong Kong-traded shares down as much as 17.4% on Monday, the biggest intraday drop since July 2015. And with the stock tumbling by more than two-thirds since its late 2017 highs, Citigroup downgraded the stock to “sell” and slashed its price target by 56%, as the expected decline in core profit was far below Citigroup’s estimate of a 27% year-on-year drop.

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    To be sure, there are plenty of reasons to dump the stock: Evergrande is one of China’s most-indebted developers with net debt of $88.5 billion as of June. As Bloomberg reminds us, the company has been pouring billions of dollars into acquisitions as its Chairman and major shareholder Hui Ka Yan pursues an ambition to make Evergrande the world’s biggest maker of electric cars in the next three to five years.

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    Yet while Evergrande did everything in its power to offset the current demand plunge, embarking on an aggressive marketing campaign as the coronavirus outbreak deepened, offering discounts of up to 25% on many of its projects, get-out clauses for buyers and price-match promises, its guidance indicates that the housing bubble in China has finally burst despite laughable government official data which saw an actual increase in average housing prices in February when the economy cratered.

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    The recent price cuts followed a surprise move all the way back in March 2019, when with the economy supposedly humming, Evergrande announced it first (of many) price cuts, offering properties at a 10% discount. It’s only been downhill from there.

    In some ways, Evergrande’s liquidation campaign worked out: the firm’s contracted sales for Feburary jumped 108%, however this was achieved with firesale prices, and now that the entire Chinese house of cards is, literally, shaking it is only a matter of time before the ongoing economic malaise tears it to the ground.

    This ia problem because as we said back in 2017, the “fate of the world economy is in the hands of China’s housing bubble“, and explained that for the Chinese population, and growing middle class, to keep spending vibrant and borrowing elevated, it had to feel comfortable and confident that its wealth would keep rising.

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    However, unlike the US where the stock market is the ultimate barometer of the confidence boosting “wealth effect”, in China it has always been about housing as three quarters of Chinese household assets are parked in real estate, compared to only 28% in the US, with the remainder invested in financial assets.

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    Source: Xinhua

     

    Beijing knows this, of course, which is why China consistently reflates its housing bubble any time it feels the broader economy is slowing, hoping that any subsequent popping of the bubble, which happened in late 2011 and again in 2014, will be a controlled, “smooth landing” process.

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    Alas this time it appears to have failed, because while Beijing has been scrambling to indicate that it has again succeeded in maintaining price stability – per Beijing’s massively doctored official data – allowing the air out of the “Tier 1” home price bubble which peaked in early 2016, while preserving modest home price appreciation in secondary markets, the Evergrande profit cut clearly indicates that China’s housing market is now facing nothing short of a hard landing.

    One final though: back in the global financial crisis of 2008 it wasn’t the US fiscal stimulus, nor was it even the Fed’s QE that sparked the global recovery that pulled the developed world out of a depression: it was China, which turned on the debt afterburners and issued trillions and trillions in new money, eventually reaching the absurd point in 2017 when China accounted for half of all global debt created since 2005.

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    Needless to say, much of this credit spree was contingent on continued stability in China’s housing market. However, now that that is gone, and with Chinese debt to GDP around 300%, or an all-time high, one can forget any hope for a massive Chinese credit-fueled recovery similar to what happened in 2008. In fact, if China’s housing bubble has indeed burst, and for validation of this keep a close eye on what Evergrande will say in the coming weeks, what the world should expect is a reversal of China’s epic debt firehose, which unfortunately means that just as China managed to pull the world out of its 2008 depression, payback time has arrived and this time it is China that will ensure that the depression of 2020 is truly one for the ages.


    Tyler Durden

    Sun, 03/22/2020 – 23:28

  • Payments-Panic & The Endgame Of Fiat Currencies
    Payments-Panic & The Endgame Of Fiat Currencies

    Authored by Alasdair Macleod via GoldMoney.com,

    The unilateral response from governments to the coronavirus is to helicopter money to people and their businesses in unlimited quantities. Their priority is to keep the debt-driven Keynesian show on the road, and policy makers are approaching the task with unseemly gusto.

    There was evidence that the credit cycle was already on the turn with the global economy entering its regular period of financial and economic crisis even before the coronavirus hit. Thinking it is only a matter of dealing with the pandemic before returning to normal is therefore a common and fatal mistake. The combination of current events is leading to an infinite problem: central banks, and the Fed in particular, are trying to backstop everything and they will undoubtedly fail.

    The central issue is the dawning inability of the Fed, in charge of the world’s reserve currency, to keep financial markets under control. The quantities of money required to rescue the US economy and dollar-centric supply chains abroad are potentially far greater than anyone realises and will destroy not just the dollar, but the whole fiat money system of rigged financial markets upon which debt financing depends. The EU is in a similar but more parochial fix with the addition of a banking system visibly on the verge of collapse.

    The timescale for the demise of unsound fiat currencies is likely to be very short, by the end of 2020 – exactly three centuries since a similar fiat currency experiment failed in John Law’s Mississippi bubble.

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    Introduction

    Doubting Thomases must surely realise by now that the central banks are in danger of losing control over financial market prices, not just for a short period of time, but more drastically than that. Besides a new round of quantitative easing announced last Sunday – $500bn into Treasuries and $200bn into agency debt – the new target for the Fed funds rate was lowered to 0 – ¼ %. This 1% cut followed an earlier reduction in the funds rate of ½ % as well as last Thursday’s announcement of a $1.5 trillion cap on three-month and one-month repos. To these sums we must add the $60bn in purchases of coupon-bearing securities also announced last Thursday.

    Taken together, that is a liquidity injection into the American banking system of $2.206 trillion, which in context will be the equivalent of a 59% increase in the Fed’s balance sheet since the repo crisis started in September.

    A further source of monetary inflation is in the dollar swap lines with the Bank of Canada, Bank of England, Bank of Japan, the ECB and the Swiss National Bank.

    Clearly, the Fed is doing everything it can to achieve a number of objectives simultaneously. It needs to ensure the funding is in place for the US Government, which is dramatically increasing its spending. It must ensure the banks have sufficient reserves so as not to foreclose on its customers, thereby preventing a deflationary contraction of bank credit. It needs to inject liquidity into wholesale money markets to ensure no financial entity becomes insolvent. It is trying to anticipate future negative effects of the coronavirus, which are likely to be far greater than anyone dares admit in public. Heroically, the Fed’s public mission is to rescue the American economy single-handedly by providing the money required. And last but not least, it must retain control over financial market pricing to deliver these objectives.

    Over the last fortnight that control was demonstrably lost. Equities crashed and government bonds soared, but values of the latter were somewhat false, because in the absence of liquidity market makers increased their bid/offer spreads and reduced their size; that is to say the quantity of bonds they were prepared to deal in on the widened quote were nominal. As well as volatility, the market makers, being brokerage subsidiaries of the banks, were restricted in the amount of liquidity provided by their parents, reflecting a wider systemic shortage.

    The Fed hopes that by providing an unprecedented quantity of dollar liquidity that normality will return, and all its objectives listed in the penultimate paragraph above can be achieved. But, returning to a theme of recent Goldmoney Insights, the relationship between the dollar and financial assets has become eerily similar to that between John Law’s livres and his Mississippi bubble three-hundred years ago. The massive printing of livres and livres bank credit to support Law’s asset bubble failed, firstly by undermining the purchasing power of his livres to zero measured against gold and silver, and then by failing to prevent a collapse in the targeted financial asset, his Mississippi venture.

    Today, the situation is only different in that the Fed is trying to save the status quo rather than construct a new one. But from December 2015 the gold price began to rise from $1050 to current levels, which is the appropriate non-fiat measure of the dollar’s purchasing power. This fact says much about gold and silver’s reaction last week and this, which was to fall heavily in paper form, while physical demand led to shortages and premiums everywhere. And now we have credible reports of refinery output being curtailed, particularly in Switzerland’s Ticino canton where three of the large Swiss refiners are based.

    After the mid-eighties, gold was used as a low interest rate form of collateral for the purchase of other higher-yielding assets. In recent years that function has ceased, and it has become a plaything of bullion banks, skilled at using futures and forwards to soak up speculative demand in a highly profitable fleecing of speculative interest. The continuance of this game depended entirely on the Fed and other central banks setting the framework for prices of financial assets in the wider context by retaining an iron control over markets. Recent events have shown that that has almost certainly come to an end and increasingly the bullion banks see a logic in getting out of the gold and silver paper business by squaring their books.

    Estimating dollar liquidity requirements

    It is worth noting that the global economy as well as that of the US is on the cusp of a credit cycle that was turning into its regular contractionary stage, even before the coronavirus exploded onto the world stage. The massive expansion of both base money and bank credit since the Lehman crisis coupled with American trade protectionism replicates the situation in late-1929 when the Wall Street crash began, the Dow fell 89% and the great depression followed. The twin vectors behind those events are of different relative force today. Then, trade tariffs were jacked up 30% on average by the Smoot-Hawley Tariff Act, more than today’s American protectionism against Chinese imports. But this time, the expansion of money and bank credit over recent decades is far, far larger, and we are entitled to expect a synergistic effect between these two factors leading towards a similar result.

    That being the case, the coronavirus is an added burden on the world’s economy which was already tipping into a slump, and will be particularly damaging for its reserve currency, the dollar. The disruptions the pandemic brings to supply chains are a dramatic advancement and escalation of what would have happened over time anyway.

    Across all businesses there are those which have assets that can be sold and have cash at the bank to draw down, and there are those whose cash and liquid assets are limited or barely exist. When the former category draws down on cash reserves, deposits at the banks are reduced. The banks then have to either borrow the difference in money markets or reduce their holdings of assets, usually in the form of loans, Treasury bills, Treasury bonds, commercial bills or commercial bonds. Inevitably, the choice will devolve down to a reduction in the banks’ individual balance sheets, satisfied by reducing their loan books and by asset sales.

    On the other hand, there are businesses running on overdrafts, which will find out if their banks are still good for pre-agreed overdraft ceilings. Given the drawdowns on business deposits from their more liquid customers, it is likely they will seek to reduce overdraft ceilings to help balance their books.

    But businesses also face decisions as to whether they and their customers will survive the pandemic. Government promises to help is usually offered in loans, in which case they will have to be repaid, merely putting off the evil day. Many SMEs will choose to close in order for their owners to rescue what they can rather than face a drift into bankruptcy. Some will try to survive by cutting costs, such as airlines laying off staff on unpaid leave, or by lengthening payment times, passing the problem to their suppliers.

    The notional exposure of America’s banks to this aspect of difficulties faced by private sector businesses is illustrated in outstanding loans and leases, which according to the St Louis’s FRED database stands at $10.12 trillion.

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    FRED’s chart above shows how the last credit crisis caused a contraction in outstanding loans and leases, and we know that this crisis is bound to do so again. But what will be the scale of the developing credit crisis, given that by bunching payment issues the coronavirus has increased the impact and its suddenness?

    To estimate a ballpark figure, we should look at gross output (GO). Unlike GDP, which captures final sales value, GO includes the payments between production stages, and is illustrated in FRED’s chart below.

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    The effect of the last credit crisis in 2008-2009 was significant, knocking about $4 trillion off the total. This time, with the added burden of widespread supply chain payment failures it obviously will be far larger. We can only guess what a national shutdown will do. If, as in Italy and France, Americans end up only being able to buy pharmaceuticals and food, that would preserve only 8% of GO. Payment failures will therefore be a significant part of the remaining $36 trillion of the GO statistic.

    Not only are all goods, but services are affected as well. And supply chains are not as simple as the term might suggest with a one-dimensional series of inputs leading to a final product. Inputs from many other sources are required in each step of the way. It is no exaggeration to say that the interconnectedness of all these processes accounts for nearly all of private sector GO.

    That payment failures are beginning to have an impact is seen in the enhanced level of repo facilities daily extended by the Fed. It can only escalate from here.

    Dollar payments in supply chains are not confined to US domestic manufacturing but apply to dollar-denominated chains of imported goods in other jurisdictions, of which Apple’s iPhone manufacturing supply chain is a prime example. All it takes is one small delivery hitch and suddenly expected payments that do not materialise have to be covered all down the line, We cannot know the true extent of the likely problem, but with major economies being disrupted by the virus for more than a month or two and with everyone working on a just-in-time basis the banking system will end up with deposit drawdowns, demands for increased overdraft facilities and non-performing loans totalling as much as two or three times FRED’s total loans and leases outstanding from businesses, not just in America, but in dollar trade settlement chains abroad as well.

    No wonder there are emerging liquidity issues in the system. But with the Fed and the US government promising to underwrite all businesses facing difficulties as a consequence of the virus, the inflationary consequences for the dollar will be staggering. The responsibility of the dollar being the world’s reserve currency is that the Fed’s remit must also cover both domestic and foreign dollar settlements if it is to continue to maintain control over pricing in American financial markets.

    Realistically, the chances of success are close to nil, partly because the Fed will be slow to offer facilities to those parts of dollar-settling supply chains outside the countries with existing currency swap agreements. China, South Korea and Taiwan, and others will have to resort to liquidation of dollar reserves, including US Treasuries. And then there are those that rely on dollar funding in the broader sense: Credit Suisse’s Zoltan Pozsar highlights Scandinavia, Southeast Asia, Australia and South America, to which we can add the entire shadow banking systems in London and all other non-US financial centres.[i]

    Unless it implements Section 133.3 of the Federal Reserve Act (which allows the Fed to lend directly to non-banks) the only channel for liquidity flows is through commercial banks in the federal system. Even if the Fed makes infinite liquidity available to them, the Fed will be unable to stop banks from managing their risks as they see fit. Banks will at the margin reduce their balance sheet leverage and collectively risk descending into a cycle whereby collateral liquidation leads to falling values for financial assets, forcing further liquidation of collateral when formally secure lending becomes uncovered. This was one of the evils of fractional reserve banking identified by Irving Fisher in the great depression. And logic simply tells us liquidity provided by the Fed will be readily absorbed by the banks and not passed to many of their riskier customers, particularly in the SME sector.

    We should be in no doubt that while it is easy for the government and its central bank to promise funds to businesses so they can continue to trade, it is virtually impossible in practice for them to do so in a timely manner. But if, as hopefully this article has demonstrated, payment disruption and failure is likely to be on a scale far greater than outstanding loans and leases, the debauchment of the currency will without doubt undermine its purchasing power. As we have shown above, the total settlement chain at risk onshore in the US is captured in GO, which officially stands at $38 trillion. For comparison, the amount of money in public hands, that is cash, checkable deposits and savings deposits, is just under $14 trillion, the bulk of which is matched by bank credit, which will almost certainly contract. If the US Government and the Fed are to make good on their promise to rescue businesses from the coronavirus, they are committing themselves potentially to helicopter considerably more money through the banks than is currently held in public hands.

    It cannot happen in one hit: that would be absurd. It is more likely that it will be dispensed in tranches, of which last week’s $2.206 trillion is the first. Whether Mnuchin’s announcement of $1.2 trillion being helicoptered nationwide is part of or additional to that announced by the Fed is immaterial. Once that is absorbed, not only would markets depend on further tranches being rapidly announced and rapidly delivered, but they will begin to discount the consequences as well.

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    Given that the Fed is backstopping it all by expanding its own balance sheet, in a matter of a few months its monetary base will have to expand to unknowable multiples of the current $3.44 trillion, shown in FRED’s chart, above.

    The government funding problem

    It will be impossible for the Fed to dramatically expand the monetary base without undermining the purchasing power of the currency, particularly since it had already been expanded by an unprecedented 350% in the wake of the Lehman crisis eleven years ago. The principal method deployed is expected to be the same, that is to say quantitative easing. The advantage to the Fed is QE funds the government borrowing requirement and bolsters commercial bank reserves at the same time.

    Before the current hiatus the Congressional Budget Office forecast a Federal Government budget deficit of just over a trillion dollars. Government spending, not least on coronavirus related issues, is likely to be greater than forecast, and tax revenues, if they are not merely put into abeyance will fall considerably. Consequently, the deficit will rise, and it is conceivable it will be running at twice the forecast level. When markets settle down from recent events, traders will be asking themselves who else, other than the Fed, will buy US Treasury bonds. And then there will be a further question: with banks, non-banks and foreigners dashing for dollar liquidity, who will buy their existing holdings of Treasury debt?

    The funding problem can only be estimated in an omnibus fashion, by wrapping up government borrowing needs, bolstering bank balance sheets, dealing with global payment failures etc. into one solution. Before the coronavirus hit and began dislocating the entire financial system, credit cycle analysis assumed a slump could double the budget deficit, adding a further trillion or so to existing government funding requirements. Rarely has consideration been given to additional systemic issues because they were unknown. That is no longer the case.

    Given that through QE or asset purchase programmes all the funding and liquidity problems highlighted in this article are likely to be addressed, it is no exaggeration to say that by the year-end that could involve doubling or tripling the quantity of US Treasury bonds and bills in the secondary market, perhaps taking them from $16.7 trillion currently to over $40 trillion. Then there is a secondary problem: of the existing pile of $16.7 trillion, $9.8 trillion is owned by foreigners, likely to be forced to sell them down in the search for liquidity or simply to avoid portfolio losses.

    Since we are focused on the dollar as reserve currency, we have not even scratched the surface of problems in other currencies. The eurozone in particular has banking problems, which given the likely economic and financial effects of the coronavirus will see major bank failures in a matter of months, if not in weeks.

    Only last night the ECB announced a further €750bn stimulus to its existing asset purchase programmes, from which individual nations will fund their promises to subsidise industry and employment. The British and European governments stand ready to shower their populations with money. The British this week announced a package of support amounting to an estimated £320bn, helicoptering money and bridging loan facilities to small businesses everywhere. Echoing Mario Draghi, in the words of both Boris Johnson and his Chancellor Rishi Sunak repeated multiple times, whatever it takes.

    France announced a similar €300bn package as well, Germany has promised €500bn, and others are following suit. The ECB’s €750bn is already too little. Everywhere, the fiat currency solution is print, print, print. With interest rates at or below the zero bound it is all that central banks can do, while their governments will face declining tax revenues as well as increasing welfare commitments.

    Thus far, there is no recognition yet of the pan-European supply chain problem. The EU’s GO is similar in scale to that of US GO, additional to all announced inflationary support allocated so far.

    It is suddenly becoming clear that the global Keynesian experiment of the last ninety years faces an existential crisis. The explosion of funding requirements can only be satisfied so long as bond markets maintain current valuation levels. In other words, we have become dependent and complicit on markets rigged by the state and are facing the same fate as that of John Law’s France exactly three hundred years ago. Once the problems started, his unbacked currency became valueless in about ten months. As then, the fate of financial markets today depends entirely on fiat currencies, because their issuers are becoming the only buyers of their own debt.

    Price inflation; myth and reality

    Government statisticians have succeeded in goal-seeking a two per cent rate of price inflation by statistical method. Part of the market control mechanism has been for this and other government statistics to be accepted by investors as true. That being the case, a low-growth outlook, in other words one that does not threaten a rise in price inflation, broadly justifies the current pricing levels of government bonds. Given their personal experience that the rate of price inflation is actually considerably higher, one would think that managers of bond funds would realise the deceit, but the fact is that they are blind to it. Being prepared to ignore the reality of their own experience and accept the authorities’ version of the rate of price inflation is central to government control over price levels in financial markets. If, as independent sources such as Shadowstats.com and the Chapwood Index conclude, prices are rising at approximately a ten per cent clip then a 10-year maturity US Treasury bond should have a gross redemption yield of at least that, implying a market price below well below fifty cents on the dollar.

    A collapse in US Treasury prices of that magnitude would be a disaster for government finances, and the whole Keynesian scheme. The cost of debt funding would rapidly spiral out of control. Given our thesis that funding payment failures and other objectives will require a veritable explosion in the quantity of government debt forced on the market, it is almost certain the dollar’s value in terms of purchasing power will be fatally compromised. It will initially be reflected in the dollar price of gold, as described in the introduction to this article.

    Supplies of the basics that people buy for their day to day existence are already in short supply with supermarket shelves empty, which tells us that following the initial stages of the current economic and financial dislocation prices will rise, even before taking into account the acceleration of monetary debasement already in the works. Price rises of these staples could lead to price controls, which will only make things worse, a playbook seen throughout history from the time of Diocletian (284-305AD) onwards.

    But this inflation is different in many ways. Instead of being primarily a collapse of purchasing power driven by the public’s rejection of their state’s fiat currency, it will be driven by a matching, but slightly lagging collapse of the whole panoply of financial asset values. That at least is the lesson of the only other recorded instance of it happening, John Law’s pre-Keynesian scheme.

    The outlook for gold and silver

    The current market hiatus has seen a breakdown between financial markets and physical bullion, with supplies of coin and small bars sold out. To add to supply problems, it is rumoured that the three major Swiss refiners based in the Ticino canton are either in lockdown or having logistical problems.

    The dichotomy is between the world of financial assets and the real world of people. Events over the last few weeks have raised the possibility that the central banks, particularly the Fed in whose dollars everything is priced, are losing control over the whole financial system. Normally scared into financial submission, ordinary people are not buying the establishment’s Kool-Aid anymore. They know nothing, they do not understand what is happening, but at the margin they want precious metals at any price.

    The monetary find this behaviour unacceptable. They have routinely killed off embarrassing price rises in gold and silver as the means of subduing public interest. The prospect of monetary inflation following a coronavirus lockdown will make it impossible to repeat the exercise successfully, because of the monetary inflation involved.

    Meanwhile, bullion banks are in a bind, having far greater gold and silver obligations than their access to physical gold for cover. These obligations are overwhelmingly in paper, futures and forwards, as well as liabilities to customers with unallocated accounts. Anecdotal evidence also suggests that customers with allocated accounts have already had difficulties getting physical delivery in recent years. Therefore, while public demand for physical bullion has been increasing, the bullion establishment has become badly exposed to the monetary consequences of the coronavirus pandemic.

    Central banks and the Bank for International Settlements cannot afford to see a bullion bank blow-up, and doubtless have been working behind the scenes to prevent one. Gold is likely being leased to the bullion banks, giving them some liquidity on paper, but in practice it never leaves the central bank’s vault and therefore its possession. Futures are sold with the purpose of triggering the speculators’ stops, creating an avalanche effect on the price. The intention is for bullion banks to either get at least square in their positions or preferably long, because they know that when the suppression exercise is over, the price of gold and silver will rise dramatically in the face of fiat money expansion.

    What they don’t know yet is the fate of fiat currency. We know from analysing John Law’s experience in 1720 that in 2020 we are likely to see the end of it very soon. Conventionally expressed, that gives gold and silver prices of infinity, and moves of a hundred bucks or so are immaterial.


    Tyler Durden

    Sun, 03/22/2020 – 23:20

  • Monday Morning Coronavirus Package Re-Vote Rescheduled For Noon
    Monday Morning Coronavirus Package Re-Vote Rescheduled For Noon

    Update (0005ET): Monday’s procedural vote will not be held at Noon – several hours into the trading day, vs. the 9:45 a.m. vote McConnell originally called to ‘see if there’s a change of heart’ during the first 15 minutes of trading.

    In closing remarks, McConnell accused Democrats of “playing Russian roulette with the market.”

    Update (2335ET): With futures still flirting with limit down as of this writing, Senate Majority Leader Mitch McConnell has set a new vote on the motion for Monday morning at 9:45 a.m. – “15 minutes after the (US) markets open to see if there’s a change of heart,” he said.

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    McConnell said that the vote would be called off if a deal is reached before then on the latest virus tranche.

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    *  *  *

    Update (2115ET): Senate Democrats were able to successfully block the coronavirus stimulus package from moving forward as five GOP senators were absent due to coronavirus or precautionary self-quarantine.

    Senators voted 47-47 on advancing a “shell” bill, a placeholder that the text of the stimulus legislation would have been swapped into, falling short of the three-fifths threshold needed to advance the proposal.  

    Hopes of a quick stimulus deal quickly unraveled on Sunday as the four congressional leaders and Treasury Secretary Steven Mnuchin failed to break the impasse. Senate Majority Leader Mitch McConnell (R-Ky.) also delayed the procedural vote for three hours as they tried to get a deal. –The Hill

    Senator Rand Paul (R-KY) was not present after announcing Sunday morning that he had contracted coronavirus and would self-quarantine. Two GOP colleagues he interacted with – Utah Sens. Mitt Romney and Mike Lee, also self-quarantined.

    Meanwhile, GOP Sens. Rick Scott (FL) and Cory Gardner (CO) previously announced self-quarantines unrelated to Paul’s announcement.

    Senate Minority Leader Charles Schumer (D-N.Y.) said the bill includes “problematic” provisions and that McConnell should have made the negotiations include both chambers and the White House from the beginning. 

    “Unfortunately, the legislation has not improved enough in the past three hours,” he said. 

    McConnell appeared visibly angry as he spoke from the Senate floor after the bill failed, pledging to force the vote again. –The Hill

    “The American people are watching this spectacle. I’m told the futures market is down 5 percent. I’m also told that’s when trading stops. So the notion that we have time to play games here with the American economy and the American people is utterly absurd,” said McConnell.

    “The American people expect us to act tomorrow, and I want everybody to fully understand if we aren’t able to act tomorrow, it will be because of our colleagues on the other side continuing to dither when the country expects us to come together and address this problem,” he added.

    *  *  *

    Update (1845ET):  The coronavirus funding package failed to gain enough votes in a procedural vote Sunday evening at 6:35 p.m., however voting continued.

    Efforts to seal the deal come amid four members of Congress testing positive – including GOP Sen. Rand Paul.

    The bill was on tenuous ground throughout the day, with an earlier vote postponed because Senate Majority Leader Mitch McConnell didn’t have the votes.

    “Leader McConnell had to postpone his 3 p.m. cloture vote on the motion to proceed because, thanks to Leader Chuck Schumer and Senate Democrats, he did not have the 60 votes required,” said Speaker Nancy Pelosi (D-CA) in a Sunday statement.

    *  *  *

    Update (1815ET): And just like that, futures quickly went limit down shortly after opening.

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    Gold, meanwhile, is catching a bid and is now above $1500.

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    *  *  *

    Update (1700ET): Speaker Pelosi says that Congress is ‘finalizing’ the stimulus legislation.

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    According to the WSJ‘s Nick Timiraos, one draft of the bill would allocate $425 billion into the Treasury for the Fed to cover losses on lending facilities. This will allow the Fed to provide a new generation of emergency lending programs that could prop up markets for securitization, investment grade corporates, longer-dated munis or small business loans.

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    At the conclusion of a Sunday meeting with top congressional leaders and Treasury Secretary Steven Mnuchin, Pelosi told a staffer “We are so far apart.“

    Recall in 2008, the House’s rejection of a $700 billion bailout – when Pelosi was also speaker – sent the Dow down nearly 7%. At the time, “House minority leader John Boehner, R-Ohio, said after the vote that passage would have been possible if it had not been for Pelosi’s “partisan speech,”” according to CNN.

    *  *  *

    Update (1510ET): With talks having broken down, Senate Majority Mitch McConnell (R-KY) has delayed an initial Senate vote on the stimulus package from 3 p.m. until 6 p.m. Sunday.

    *  *  *

    Update (1254ET): Lawmakers failed to hammer out an agreement after having deadlocked on several key provisions, according to The Hill.

    “We continue to talk,” said Senate Minority Leader Chuck Schumer.

    House Speaker Nancy Pelosi (D-Calif.) said after the meeting that House Democrats would offer their own stimulus package that she hoped would be “compatible” with the Senate’s package.

    “I don’t know about Monday but we’re still talking,” Pelosi told reporters, referring to the preferred GOP timeline for passing a bill.

    The impasse comes as the Senate will hold a first procedural vote at 3 p.m., where bipartisan support will be needed to move forward.

    Democrats will meet at 1 p.m. to discuss their strategy. McConnell has given no indication that he will delay the vote, potentially forcing Democrats to either move forward with the GOP leader’s plan or block the bill from advancing. Schumer did not say as he left the meeting if Democrats would allow the bill to move forward. –The Hill

    McConnell says he still want to pass a stimulus package on Monday – describing talks as “very close,” but acknowledging that people are still “elbowing and maneuvering for room.”

    “Now we’re at a point in the discussion where people will shortly have to say yes or no,” he added.

    *  *  *

    With unemployment surging and GDP crashing, negotiations over a massive coronavirus stimulus package are coming down to the wire, as a 3 p.m. vote looms in the Senate over what is expected to cost between $1.5 – $2 trillion.

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    After blowing past two deadlines that Senate Majority Leader Mitch McConnell (R-KY) set for a deal, failure to come to an agreement could spell further disaster for the markets come Monday.

    Republicans have drafted a bill which reflects agreements they’ve reached with Democratic lawmakers, and what they believe will be acceptable compromise on areas of disagreement. However, on Saturday night a spokesman for Senate Minority Leader Chuck Schumer said that there was no agreement yet, and that Democrats would not sign on to McConnell’s proposal without negotiation.

    “We look forward to reviewing their first draft and negotiating a bipartisan compromise,” said the spokesman, according to The Hill.

    Congress’s top leaders – the so-called ‘four corners’ met at 11 a.m. today to continue negotiations; the first time House Speaker Nancy Pelosi will have sat down with McConnell to discuss the massive deal.

    After just one hour, Pelosi said that negotiations are ongoing, but that Democrats would be ‘introducing our own bill‘ and that a bipartisan agreement hasn’t yet been reached.

    Limits on firms getting loans

    A key sticking point for Democrats are enhanced worker protections using the loans as leverage, according to Schumer and Pelosi.

    One GOP draft of the bill says companies receiving loans must keep employees on staff “to the extent possible,” but Democrats want to change this provision to offer loan forgiveness only if at least 90% of the workforce is retained, according to a person familiar with the negotiations.

    Democrats took issue with the discretion that the Treasury secretary has for the money going to corporations, including which companies receive funds, the person said. Mnuchin would also have the option to waive restrictions on stock buybacks under the Republican proposal, the person said.

    Democrats also want a more than two year restriction on increasing executive pay for companies that receive federal loans, the person said. –Bloomberg

    On Sunday, Treasury Secretary Steven Mnuchin appeared on Fox News, where he outlined key provisions of the impending deal which he expects to pass on Monday – including up to $3,000 for a family of four, and a massive lending facility of up to $4 trillion to maintain liquidity.

    “Working with the Federal Reserve — we’ll have up to $4 trillion of liquidity that we can use to support the economy,” he said, adding “Those are broad-based lending programs. … We can leverage our equity working with the Federal Reserve.”

    For an overview of what could happen if this deal isn’t passed, Guggenheim Investments’ CIO Scott Minerd offered some thoughts last week (in case you missed it).

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    Needless to say, failure would sap much-needed confidence from markets which have already lost around 35% since the coronavirus spread globally last month.

    What does this mean for markets and futures? While we wait for the regular 6pm reopening, the spread-betters at IG are indicating a Dow down some 562 points as of this moment, with the Dow set to open somewhere in the mid-18,000s.

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    Tyler Durden

    Sun, 03/22/2020 – 23:15

  • Amazon Doubles Its Workers' Overtime Pay As Demand Spikes Due To Coronavirus Lockdowns
    Amazon Doubles Its Workers’ Overtime Pay As Demand Spikes Due To Coronavirus Lockdowns

    Today in “good things happen when the free market works, despite the fact that we’re facing an existential global threat” news…

    Amazon workers are getting a raise due to a rise in demand for the company’s products. Imagine that – it’s almost like allowing the market to work can bring workers benefits. Someone alert the Democratic Socialists. 

    Amazon made the announcement late last week that it’s going to be doubling its hourly wages for associates that are working overtime in the company’s U.S. warehouses as demand spikes as a result of the growing nationwide coronavirus lockdowns. 

    The company told CNBC: “All hourly associates working in the U.S. Ops network will receive double their regular hourly rate for every overtime hour worked in a workweek. This temporary increased overtime pay is effective March 15, 2020, and will continue through May 9, 2020.”

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    Amazon said that workers are eligible to receive the overtime after passing 40 hours in a week. On Monday, Amazon announced it would be hiking its hourly rate for associates from $15 to $17 until the end of April. The company also said it was going on hiring binge, looking to bring on 100,000 warehouse and delivery worker to meet its surge in demand. 

    Amazon has encouraged workers who have been laid off or furloughed elsewhere to apply for jobs: “We want those people to know we welcome them on our teams until things return to normal and their past employer is able to bring them back.”

    About one week ago, Amazon began to warn that it was running out of stock on some popular household items due to dramatic increases in demand. The company also said it would provide employees up to two weeks of pay if they were diagnosed with coronavirus.

    We wonder if the employees who just saw their pay hiked dramatically – and those who just found a new job with Amazon after being laid off else – are complaining about the fact that Jeff Bezos is a billionaire. 

    Probably not.


    Tyler Durden

    Sun, 03/22/2020 – 23:00

  • Merkel Enters Isolation, New Zealand Goes "Full Quarantine" As COVID-19 Case Total Tops 335K: Live Updates
    Merkel Enters Isolation, New Zealand Goes “Full Quarantine” As COVID-19 Case Total Tops 335K: Live Updates

    Summary:

    • UK death toll jumps ~60 to 281
    • Rand Paul tests positive
    • US case total nears 30,000
    • Ohio, Louisiana, Delaware join lockdown
    • Harvey Weinstein reportedly tests positive for COVID-19
    • Global cases top 335k
    • NYC total cases passes 9k, while New York state nears 20k
    • Merkel quarantines herself
    • 5 GOP senators are in self-isolation
    • New Zealand goes full isolation
    • US death toll hits 374
    • Italy reports slowdown in deaths, cases
    • IOC sets 4 week deadline for Tokyo Games decision
    • WHO says lockdowns “not sufficient” to stop virus
    • NY secures supplies of meds that purportedly work to combat virus
    • Mnuchin proposes $4 trillion rescue package
    • Afghanistan, Kosovo and Romania all reported their first confirmed deaths
    • Italy set to revise death totals lower
    • Cuomo says nobody can say how long outbreaks will last

    *  *  *

    Update (2000ET): Stock futures hit limit down again overnight after Senate Democrats shot down the administration’s latest economic stimulus package, New Zealand said it would issue an order calling for nationwide self-isolation, while NYC announced the closure of all non-essential businesses.

    As one twitter user pointed out…

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    Back to the antipodes, Australia’s Parliament will convene on Monday for a special sitting to pass stimulus measures to support the economy.

    Amid the growing chorus of concern about the Olympics, and calls for the Japanese government to cancel or postpone the games, Japanese Prime Minister Shinzo Abe told the Japanese Parliament on Sunday that Tokyo must consider postponing the Olympics if safety can’t be guaranteed.

    The news for airlines keeps getting worse: Singapore Airlines just announced that it’s cutting 96% of its capacity through the end of April, joining carriers around the globe slashing flights as the fast-spreading coronavirus curbs travel demand.

    Starting Monday, the company will ground 138 out of the 147 aircraft at Singapore Airlines and its SilkAir unit, according to a statement. 47 of 49 planes operating in the low-cost division will be grounded.

    Mayor Bill de Blasio announced that all non-essential businesses in NYC will be closed beginning Sunday at 8 pm.

    Grocery stores, pharmacies, internet providers, food delivery, financial institutions and mass transit may remain open. But they “must implement rules that help facilitate social distancing,” the mayor’s office said, adding that police will be in neighborhoods to “ensure compliance with these policies,” according to Bloomberg.

    In keeping with its stretch of reporting zero or almost no domestic cases, China reported 39 additional coronavirus cases for Sunday, and once again claimed that all of them were infected abroad, according to a statement from China’s NHC.

    For opera fans, Plácido Domingo, the reknowned Spanish singer and conductor, announced Sunday that he has tested positive for the coronavirus. This comes after he made a sizable payment to a charity committed to fighting sexual harrassment after resolving issues of his own related to that subject.

    As the situation in the US grows increasing precarious, Joe Biden has rejected suggestions that the November US election might be postponed amid the pandemic, saying it’s important that voting continues as it has during other crises in American history.

    Trump tweeted out a message to Rand Paul, who will be quarantined for a few weeks as he fends off the virus.

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    Meanwhile, the global case total has topped 335k as New York City reports another batch of cases. And that Navy Hospital Ship – the USS Comfort – that we’ve mentioned before has arrived in New York, per the NYP:

    A mammoth floating Navy hospital that was sent to New York after 9/11 will lend a hand to the region once again — this time to help in the battle against the coronavirus.

    President Trump on Sunday again touted the USNS Comfort and its sister ship, the USNS Mercy, which will be activated on the West Coast: “These two ships are incredible . . . They have a tremendous capacity.’’

    With an interesting twist: The Comfort will treat non-coronavirus patients, relieving the immense pressure on the city’s hospitals during the mounting crisis.

    *  *  *

    Update (1930ET): We’ve had a few updates over the course of the day that probably are worth mentioning.

    First, a local paper in New Jersey is reporting that Harvey Weinstein has tested positive for COVID-19, which is apparently the reason he was hurriedly transferred out of Rikers Island, where the virus is apparently spreading like wildfire.

    Across the US, more states are issuing mandatory quarantine orders. Ohio, Louisiana, and Delaware are ll ordering residents remain at home beginning on Monday to help stop the spread of the virus. The director of Ohio’s Department of Public Health signed the state’s order Sunday, and the shelter-in-place order goes into effect Monday night, and will continue until April 6, or possibly even longer.

    The order will of course include ‘common sense exceptions’ the governor tweeted.

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    Ohio has 250 confirmed cases of the virus, according to a Johns Hopkins University tracker, and it has had three deaths.

    Louisiana issued a similar order on Sunday, which is set to take effect Monday evening and allows residents to leave their homes only for “essential needs.”

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    And Delaware Gov. John Carney issued an order Sunday evening mandating that all non-essential businesses, and all non-essential workers, close and stay at home for a few weeks.

    *  *  *

    Update (1430ET): The IOC has set a deadline of 4 weeks to make a decision on whether or not to postpone the Tokyo Games.

    In other news, the UK death toll jump by roughly 60 cases to 281 overnight, according to the Department of Health and Social Care.

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    *  *  *

    Update (1345ET): Senator Rand Paul of Kentucky has tested positive for COVID-19, according to media reports.

    The Republican senator and perennial gadfly for both his Republican colleagues and Democratic opponents, the Kentucky senator is perhaps best known for being the son of legendary Libertarian, former presidential candidate and Texas Congressman Ron Paul, as well as for an incident where one of his neighbors back in Kentucky – a doctor, no less – lost his temper and straight up dropkicked the Senator over a lawncare-inspired property beef.

    At least two members of the House have also tested positive, but Paul is the first member of the Senate.

    Paul has a tendency for delaying critical legislation over issues of principle, since he’s one of the Senate’s last die-hard ‘deficit hawks’, a position that he still cares about from time to time, based, from what we can tell, on some arbitrary factor like which way the wind is blowing or possibly the tides, we’re not really sure.

    Whatever it is that makes Paul tick, he’s probably going to be sidelined as the administration tries to push through pt. 2 of its economic aid package to stave off a brutal depression.

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    Some on twitter seized the opportunity to slam Paul.

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    Can’t say we blame them: Paul was the sole “no” vote on the $8.3 billion coronavirus spending bill the Senate passed earlier this month, the first part of what’s expected to be a three-party rescue package, two of which have been passed into law, and one still on the way as senators argue over how much money should be given away, and to whom.

    *  *  *

    Update (1330ET): After nearly two weeks of reporting one grim record after another, Italy has finally reported a drop in new cases on Sunday. During the day before, Italy confirmed 5,560 new cases of COVID-19 and 651 new deaths. That brings the country to a total of 59,138 cases, and 5,476 deaths. That’s a slower pace of increase than yesterday’s report, though Italy’s rate of spread is still nothing short of extraordinary, and in a few days, confirmed cases in the country will surpass China’s “official” total.

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    In Milan, the number of new cases recorded over the last 24 hours halved from the day before.

    In other news, the IOC is holding an emergency board meeting on Sunday to discuss the future of the Tokyo Games, including an option to delay the event, according to Japanese media. It might take a month to reach a decision – but who knows when the leaks will begin. We suspect the Japanese press will be keeping a close eye on the behind-the-scenes talks.

    Interestingly enough, American social-media companies including Facebook and Twitter have continued their bizarre practice of censoring virus-related news, even when it’s published by “reputable” mainstream media organizations like Bloomberg and the Wall Street Journal.

    It looks like a Bloomberg article quoting SCMP warning that one-third of coronavirus cases may show no symptoms – making the virus immensely more difficult to track – has been censored.

    *  *  *

    Update (1240ET): Here are some more details from the second half of Cuomo’s Sunday press conference…

    After insisting that nobody could say for certain how long the outbreak will last, Cuomo added that there was no reason to rush to grocery stores and start hoarding supplies, adding that all essential services will continue, even as some states’ are seeing critical toiletpaper shortages entering their second week.

    “It’s going to be hard – no doubt – I’m not minimizing it and I don’t think you should either but it is going to be okay. The grocery stores are going to function…there’s going to be food…all essential services will be maintained.”

    “There’s not going to be anarchy, there’s not going to be chaos…order will be maintained.”

    Though thousands have died, Cuomo urged New Yorkers, and Americans, to try and find the strength within to make it through this crisis without putting the public welfare in jeopardy, like so many are still doing. Asked during the Q&A what he would do to stop New Yorkers from crowding into the city’s parks on a nice day, he said he would require the city to put together an action plan within a day , adding that even though he’s a life-long New Yorker, he doesn’t know the city’s operations well enough to tell them how to run the parks.

    Adding to the chorus of prominent Democrats who are criticizing President Trump for not taking advantage of the Defense Production Act to coordinate a federal response to alleviate the shortage of critical medical supplies.

    Instead of sitting around and complaining about how too much of the US supply chain is dependent on China, Cuomo urged Trump to use the DPA to develop a plan and tell factories how much of which critical items they should produce.

    This way, Cuomo said, it will end the bidding wars between states that led to New York purchasing medical masks that typically cost well under a dollar for more than $6 a mask.

    “I say forget the voluntary partnership – order the companies to produce it. Let the federal government do it so the private company doesn’t end up marketing with all these states that are competing. We paid 75 cents for a mask and now we’re paying  $7 dollars. Why? Because California will pay $6…”Let the federal government just take the power of supply and distribution,” Cuomop said.

    He added that during the testing ramp-up, it was better to give more power to the states to ramp up capacity because governors control labs and have resources to put toward this effort. But when it comes to production, supply chains are too distributed. The require coordination at the federal level.

    The governor also detailed the state’s stockpile of essential medical equipment and hospital + ICU beds, which he said he is doing everything in his power to alleviate.

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    For some unknown reason, Sunday’s press conference contained none of the optimistic references toward the Army Corp of Engineers traveling through the state setting up staging areas, while the Navy sends a hospital ship to NYC.

    *  *  *

    Update (1150ET): Gov. Andrew Cuomo’s daily press briefings have become high-priority events as the coronavirus outbreak spreads across the US. After winning early approval from the FDA to ramp up testing in state labs, Cuomo’s star has risen alongside the state’s tally of positive tests.

    He and Trump appeared to have declared a truce, with the two men acknowledging their intention to cooperate, and as the White House shifts its focus to passing the critical second installment of its economic rescue package, which is expected to include rescue packages for small businesses and helicopter money for individuals.

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    Cuomo started the press conference by chiding New Yorkers, primarily those in the city, who took advantage of nice weather over the past few days to crowd into the city’s parks, inadvertently helping to spread the virus.

    At one point, Cuomo declared that the city had confirmed 374 deaths, taking the assembled reporters by surprise. The statement was soon corrected, as a graphic on the screen displayed the updated national death toll, meaning that 14 more Americans had succumbed to the virus over the last few hours.

    Across the state, Cuomo reported 4,812 new cases, bringing the total to 15,168, with 9,045 of those in NYC.

    These new numbers have brought the US total to just shy of 30k.

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    As Trump continues to battle with the FDA, Cuomo said New York will start implementing the trial drugs to treat Coronavirus and that they have acquired 70,000 Hydroxychloroquine, 10,000 Zithromax, and 750,000 Chloroquine from the Federal Government.

    The governor then launched into a breakdown of the data that researchers have collected so far. Of those who have passed away from COVID-19-related complications, 70% are either 70 or older. Of those who passed that were under the age of 70, 80% had underlying health issues.

    Though young people have a higher chance of survival, “young people can get it, young people can get sick, young people can transfer it,” Cuomo said.

    But just because an individual catches the virus, and meets the high-risk criteria, doesn’t mean they’re doomed, Cuomo explained.

    “But even within that population the capacity of our health care system can save those lives it doesn’t mean that just because you’re 80 and you have an underlying health condition, you must pass away,” he said. Nothing is pre-ordained, and New York State’s health-care system has the capacity to save the lives of people whose lives are seriously imperiled by the infection.

    The fear, as Cuomo explained, is that the virus makes it to places like nursing homes, and other places where concentrations of high-vulnerability people.

    The importance, as has been said many times before, is that the government tries to smooth the ‘peak’ of the outbreak – which Cuomo’s models projected would arrive in roughly 45 days – as much as possible, given the shortage of beds, ICU beds and critical medical equipment, which Cuomo is scrambling to buy up for New York State, taking Trump’s advice to do what states can to secure equipment to heart.

    “Up to 80% of the population will get this virus. We will try to slow the spread but it will spread,” Cuomo said.

    As far as addressing how long the outbreak will last, and how long some level of movement restrictions might be in place, Cuomo said nobody can say for certain, adding that it could be 9 months, or possibly even longer.

    “It is going to be 4 months, 6 months. 9 months – once they really changed the trajectory – which we have not done yet – 8 months. Were in that range. Nobody has a crystal ball, nobody can tell you,” Cuomo said.

    *  *  *

    Update (1100amET): NY Gov Andrew Cuomo is delivering his daily press conference. Watch live below:

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    *  *  *

    The surge in newly confirmed cases in the US and Europe continued overnight, as roughly 7,000 new cases were reported in the US, according to Johns Hopkins data, vaunting the US total above 25k while most Americans were asleep.

    According to the latest numbers, as of 11amET on Sunday, 26,747 Americans have tested positive for COVID-19. 340 have died (and some of these were posthumously diagnosed).

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    New York State, where the Army Corp of Engineers has arrived to start outfitting school gyms and other buildings into COVID-19 hospitals, the picture of the outbreak continues to expand as testing capabilities in the state rapidly accelerate. 9 million New Jerseyans are now under ‘shelter in place’ restrictions following the mandatory lockdown order signed by Gov. Phil Murphy last night, although it’s still not exactly clear how the order will be enforced. In Connecticut, Gov. Ned Lamont has asked residents to stay at home and ordered non-essential businesses – including restaurants, gyms, theaters and the like – to close.

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    And globally, the total number of cases has passed 315,000, and is rapidly closing in on 320,000. We’ll likely hit 350,000 by noon on Monday.

    Across Europe and the Middle East, governments tightened travel restrictions and lockdowns, even as the WHO whined that these measures were now somehow not enough to contain the outbreak , when this very same organization for weeks denied that border closures were necessary to stop the spread in an obvious sop to the NGOs Chinese backers.

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    Following in Italy’s footsteps, one week after Spain adopted nationwide lockdown measures and as the number of cases soars to 28,572, with 1,720 deaths, Spanish media says the  government of PM Pedro Sanchez is planning to ask Congress to approve the nationwide lockdown for an additional 15 days.

    Afghanistan, Kosovo and Romania all reported their first confirmed deaths from COVID-19 on Sunday, while Albania closed flights as the virus continues to spread north through the Balkans from Greece, which has been turning away asylum seekers as it struggles to suppress its domestic outbreak.

    After invoking the Defense Production Act last week, one of the most useful tools in the White House arsenal, granting Trump the power to act unilaterally and marshal the nation’s factories to the “war” effort, the president has yet to use the power, even as Democratic leaders like Nancy Pelosi and Chuck Schumer hammer him on the delay.

    As it turns out, Trump might have a point. Though FEMA Administrator Peter Gaynor contradicted Trump during an appearance Sunday on CNN’s “State of the Union”, saying the administration hadn’t yet ordered factories to produce critical medical supplies, as Trump had claimed earlier in the week. But he clarified that the only reason Trump hasn’t actively used the power is because companies are voluntarily taking these steps so as to deter the administration from seizing control of their operations. He described the act as “leverage”.

    Gaynor added that companies and countries around the world are offering help and support to the US.

    With multiple officials making the Sunday show rounds, Treasury Secretary Steven Mnuchin once again upped the ante of the administration’s ‘helicopter money’ stimulus package (now that the Fed’s balance-sheet expansion is back in full swing and the administration is preparing to issue 50-year bonds to back the stimulus), raising the amount to be doled out to individuals to $3,000. As we observed yesterday, the stimulus-bill figures continue to climb faster than the number of confirmed cases.

    It’s unclear when – or even if – the plan will make it into law, but Mnuchin said it’s intended to sustain out-of-work Americans and suffering small-businesses for the next 10-12 weeks.

    And with 7k new cases confirmed since VP Pence announced to the world last night that he had tested negative, and hundreds of thousands more layoffs announced overnight, we suppose it’s only fitting.

    Last night, Italy shuttered much of the country’s industrial production (at least whatever was still operating) in a desperate attempt to contain the outbreak as it extends its national lockdown in the face of lackluster results. In Jordan, meanwhile, authorities are responding with a heavy hand, warning residents they will risk a year in jail if caught outside without permission.

    Which approach do you think would work better in the US?

    Whatever happens, any NYC-based bankers growing bored with their doomsday stash and willing to splurge on some high-quality meats can get takeout from Peter Lugar’s.

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    Tyler Durden

    Sun, 03/22/2020 – 22:51

  • Deutsche Bank: Helicopter Money Will Be "Disastrous" And Will Lead To Hyperinflation, "Buy Gold"
    Deutsche Bank: Helicopter Money Will Be “Disastrous” And Will Lead To Hyperinflation, “Buy Gold”

    “Consensus reality is like paper money. It has no value except everyone believes in it. It has no real value, only pretend value, which is fine as long as everyone keeps pretending.”

                  – Jed McKenna

    “As helicopter money becomes increasingly inevitable, the big news is that we are calling for the thawing of the Ice Age after the next recession – whenever that arrives.”

                 – Albert Edwards

    Now that helicopter money has finally arrived, and bizarrely has brought with it that blast-from-the-past idiocy that is the trillion-dollar coin – which does nothing more than remind the population that money, like any other consensus construct, is just an illusion and depends on “faith and credit” and an increasinlgy grotesque one at that reliant on such “in your face” gimmicks as minting platinum coins to bailout the world – the discussions of what the monetary endgame (with even deflation god Albert Edwards admitting that his iconic “Ice Age” is about to melt under the red-hot heat of paradropped cash) will look like have begun in earnest.

    Doing it part to kindle this debate, no pun intended, are Deutsche Bank strateigst Oliver Harvey and Robin Winkler who have published a report covering the two aspects of the helicopter money debate. And since we are confident that readers can find the happy ending version on countless other pro-paradrop forums, typically those run by socialist “island-dwelling traders” who have never actually traded (and their drug-delivery skills it turns out were also dismal) and who have no concept of how money or credit actually works, we will focus on the one that captures accurately what will happen on short notice: hyperinflation.

    So for everyone curious what the hyperinflationary endgame looks like, here it is, courtesy of DB’s Oliver Harvey.

    Helicopter money would make the coronavirus a lot worse

    The economic policy response to the coronavirus looks very similar to the last financial crisis. Central banks have responded with liquidity for the private sector through swap lines with banks and purchases of commercial paper from corporates and have lowered the cost of money through interest rate cuts and quantitative easing. Governments are announcing sizeable fiscal packages which will provide businesses and households with direct cash injections. Today, for example, the German government pledged EUR 100bn, or 3% GDP. The US has announced a similar sized fiscal stimulus. Some have called for the  government to go further, and act as a buyer of last resort for businesses, for example.

    The problem is that this crisis is very different from 2008, or for that matter 1929, where much of today’s macro playbook was written. 2008 was a classic demand shock caused by a loss of confidence in the banking sector. In a demand shock, fiscal and monetary tools should be used aggressively to bring confidence back. In Paul Krugman’s classic formulation of the Washington Baby Sitters Co-operative, for example, prospective babysitters were worried about using up their supply of baby-sitting tokens to go out because babysitting opportunities were becoming scarcer. This led to further scarcity in babysitting opportunities. The cycle was only broken by the Co-Operative issuing more baby-sitting tokens, which led to babysitters feeling confident about spending them again. This is a neat analogy for how monetary stimulus helps during a credit crunch.

    Coronavirus is not a demand shock, however. It is first and foremost a supply shock which is now spilling over to demand. Consumers did not initially stay away from shops and restaurants because they were worried about their future economic prospects, but because governments told them to stay at home. Holidays are not being canceled to shore up household finances but because countries have closed their borders. Workers have not been furloughed from factories because of insufficient orders but because employers are worried about the risk of spreading disease. It is of course true that the mass unemployment caused by these measures will result in a dramatic drop in aggregate demand. It is also true that the confidence effects caused by such measures is likely to result in cash hoarding by households and businesses – indeed such behaviour is in evidence in markets at the moment. But this is the second order response to a first order shock to aggregate supply.

    Understanding this has very important implications for the policy response to the coronavirus. It should worry us that policymakers and academics think providing massive stimulus is the solution. This is because policymakers appear to be attempting to shift demand back to where it was a couple of months ago, at the same time as holding supply fixed. To put it another way, if the government tries to keep spending at levels before lockdowns began, while at the same time keeping lockdowns in place, there will be simply more money chasing after significantly fewer goods and services. The result of this will be inflation, and a lot of it.

    This might seem like an absurd argument given that market inflation expectations – the price of inflation linked bonds – have fallen since the crisis began. But, it is perfectly consistent to say that even though this crisis ultimately originated with a supply shock, the market has up until now expected demand to fall somewhat more in response. What matters is that at present supply is inelastic – unlike in traditional Keynesian formulations – because while the government might be handing out $100 dollar bills it won’t be allowing workers to work regular days, restarting flights or reopening factories until the virus subsides.

    In figures one and two we present a graphical representation of this argument. Figure one shows a stylized version of the present equilibrium. The demand curve has shifted left and become vertical (inelastic). The demand curve has shifted left to a greater extent, meaning that the present equilibrium is likely to be slightly deflationary (p2 and i2). In figure two, the effect of fiscal and monetary stimulus shifts the demand curve back towards its position before coronavirus but the supply curve remains fixed (p3 and i2). The result is a higher price level.

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    Those worried about deflation might argue that given bleak economic prospects, cash handouts will just end up being saved by workers and businesses. But saving is all about expectations. The moment people believe prices will begin to rise in the shops for essential goods, workers will start spending those handouts. Unless the volume of goods and services available to buy increases again, this will in turn translate directly into higher prices.

    A similar point can be made about the labour market. There are a limited amount of jobs that can be done from home. According to our DB dig suvey, for example, suggests that only 55% workers will be able to work from home (figure 3). This means the supply of labour has been restricted by the coronavirus. Keeping employees in their jobs, and paying them the same wages, for doing nothing – as the Governor of the Bank of England has suggested – will result in a massive rise in unit labour costs. Presumably the government will compensate employers for doing so. But again, this money has to go somewhere – namely higher prices. In effect, there has been a huge upward shift in the Phillips curve.

    Two caveats are important. As the coronavirus has created a massive credit crunch due to the sudden evaporation of corporate revenue, it is appropriate for the government to provide enough liquidity for businesses to keep them afloat for the duration of the crisis. These businesses were profitable before restrictions were imposed and can be again when they are eventually lifted. Similarly, it is justified for the government to mitigate the impact on living standards for the recently unemployed through benefit payments. As we acknowledged, the shock to demand is likely to have been greater than the shock to supply at this stage.

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    What would be disastrous is if governments embarked on New Deal style spending program via monetary financing at a time when it is imposing stringent supply constraints on the economy. The result may be  hyperinflation, and end up doing more harm to people’s living standards than nothing at all.

    In the wake of the 2008 financial crisis, those that warned about the inflationary risks of QE and fiscal expansion were given a tough time by most professional economists – and rightly so. They predicted that inflation would result out of an expansion of the monetary base when the economy was suffering from a deficit in aggregate demand. Perhaps scarred by their experience, or perhaps due to the distressing human tragedy that is currently unfolding, they have been notably quiet this time around. That is unfortunate because, as the saying goes, policymakers always solve for the last crisis.

    We are worried that the real pain trade for markets – and the economy – is the long awaited return of inflation.

    A good hedge would be to buy gold, as well as inflation linked bonds in the US and Euro Area, which are currently trading at all time lows


    Tyler Durden

    Sun, 03/22/2020 – 22:41

  • Police In California Plan To Use Drones To Enforce Quarantine Lockdown
    Police In California Plan To Use Drones To Enforce Quarantine Lockdown

    Authored by John Vibes via The MindUnleashed.com,

    In the months since the COViD-19 pandemic began, governments around the world have been utilizing a wide range of technological devices to enforce quarantines. Advanced surveillance and tracking have been made possible by cellphone data, CCTV cameras, and drones.

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    Surveillance drones were used during the lockdown in China to monitor neighborhoods to ensure that residents were staying indoors. Drones were also used to spray disinfectants during the outbreak as well.

    The World Health Organization (WHO) has urged additional governments to use similar tactics to enforce quarantines. Police in Spain have been using drones to patrol the streets and order citizens to stay home during the lockdown.

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    Most Americans doubted that these types of measures would happen at home, but police in California have already announced a plan to use drones equipped with cameras and loudspeakers to enforce the recently imposed quarantine orders.

    In Chula Vista, a town just outside of San Diego, police purchased at least two drones from the Chinese company DJI for $11,000 each.

    Vern Sallee, one of the city’s police captains, told the Financial Times that the drones could be used to “disperse crowds” without the need for a human officer to be involved.

    “We have not traditionally mounted speakers to our drones, but . . . if we need to cover a large area to get an announcement out, or if there were a crowd somewhere that we needed to disperse – we could do it without getting police officers involved,” Sallee said.

    “The outbreak has changed my view of expanding the program as rapidly as I can,” he added.

    Sallee also suggested that the drones could be used to give homeless people updates or orders about the pandemic, since many of them may not have access to the Internet and may be unaware of the current situation.

    “We need to tell them we actually have resources for them—they are vulnerable right now. It might be impractical or unsafe for our officers to be put into those areas,” Sallee said.

    Spencer Gore, chief executive of Impossible Aerospace, a California-based maker of high-performance drones used by first responders, admitted that the idea “seems a little Orwellian,” but insisted that it could “save lives.”

    “What we saw in China, and what we’re probably going to see around the world, is using drones with cameras and loudspeakers to fly around to see if people are gathering where they shouldn’t be, and telling them to go home,” Gore said.


    Tyler Durden

    Sun, 03/22/2020 – 22:20

  • Operation 'Granite Shadow' – The US Military's Above-To-Secret Plans If COVID-19 Cripples Government
    Operation ‘Granite Shadow’ – The US Military’s Above-To-Secret Plans If COVID-19 Cripples Government

    Authored by William Arkin via NewsWeek.com,

    As President Trump says he tested negative for coronavirus, the COVID-19 pandemic raises the fear that huge swaths of the executive branch or even Congress and the Supreme Court could also be disabled, forcing the implementation of “continuity of government” plans that include evacuating Washington and “devolving” leadership to second-tier officials in remote and quarantined locations.

    But Coronavirus is also new territory, where the military itself is vulnerable and the disaster scenarios being contemplated — including the possibility of widespread domestic violence as a result of food shortages — are forcing planners to look at what are called “extraordinary circumstances”.

    Above-Top Secret contingency plans already exist for what the military is supposed to do if all the Constitutional successors are incapacitated. Standby orders were issued more than three weeks ago to ready these plans, not just to protect Washington but also to prepare for the possibility of some form of martial law.

    According to new documents and interviews with military experts, the various plans – codenamed Octagon, Freejack and Zodiac – are the underground laws to ensure government continuity. They are so secret that under these extraordinary plans, “devolution” could circumvent the normal Constitutional provisions for government succession, and military commanders could be placed in control around America.

    “We’re in new territory,” says one senior officer, the entire post-9/11 paradigm of emergency planning thrown out the window. The officer jokes, in the kind of morbid humor characteristic of this slow-moving disaster, that America had better learn who Gen. Terrence J. O’Shaughnessy is.

    He is the “combatant commander” for the United States and would in theory be in charge if Washington were eviscerated. That is, until a new civilian leader could be installed.

    ‘We’re in territory we’ve never been in before’

    What happens, government expert Norman Ornstein asked last week, if so many members of Congress come down with the coronavirus that the legislature cannot meet or cannot muster a quorum? After 9/11, Ornstein and others, alarmed by how little Washington had prepared for such possibilities, created a bipartisan Continuity of Government Commission to examine precisely these and other possibilities.

    It has been a two-decade long futile effort, Ornstein says, with Congress uninterested or unable to either pass new laws or create working procedures that would allow emergency and remote operations. The rest of the federal government equally is unprepared to operate if a pandemic were to hit the very people called upon to lead in an emergency. That is why for the first time, other than planning for the aftermath of a nuclear war, extraordinary procedures are being contemplated.

    In the past, almost every imagined contingency associated with emergency preparedness has assumed civil and military assistance coming from the outside. One military officer involved in continuity planning calls it a “cavalry” mentality: that military assistance is requested or ordered after local civil authority has been exhausted.

    “There might not be an outside,” the officer says, asking that she not be named because she is speaking about sensitive matters.

    In recognition of the equal vulnerability of military forces, the Pentagon has instituted unprecedented restrictions on off-base travel. Last Wednesday it restricted most overseas travel for 60 days, and then on Friday issued supplemental domestic guidance that essentially keeps all uniformed personnel on or near military bases. There are exceptions, including travel that is “mission-essential,” the Pentagon says.

    Mission essential in this regard applies to the maze of more than a dozen different secret assignments, most of them falling under three larger contingency plans:

    • CONPLAN 3400, or the military’s plan for “homeland defense,” if America itself is a battlefield.

    • CONPLAN 3500, “defense support of civil authorities,” where the military assists in an emergency short of armed attack on the nation.

    • CONPLAN 3600, military operations in the National Capital Region and continuation of government, under which the most-secret plans to support continuity are nested.

    All of these plans are the responsibility of U.S. Northern Command (or NORTHCOM), the homeland defense military authority created after 9/11. Air Force General O’Shaughnessy is NORTHCOM’s Colorado Springs-based commander.

    On February 1, Defense Secretary Mark T. Esper signed orders directing NORTHCOM to execute nationwide pandemic plans. Secretly, he signed Warning Orders (the WARNORD as it’s called) alerting NORTHCOM and a host of east coast units to “prepare to deploy” in support of potential extraordinary missions.

    Seven secret plans – some highly compartmented – exist to prepare for these extraordinary missions.

    • Three are transportation related, just to move and support the White House and the federal government as it evacuates and operates from alternate sites.

      • The first is called the Rescue & Evacuation of the Occupants of the Executive Mansion (or RESEM) plan, responsible for protecting President Trump, Vice President Mike Pence, and their families–whether that means moving them at the direction of the Secret Service or, in a catastrophe, digging them out of the rubble of the White House.

      • The second is called the Joint Emergency Evacuation Plan (or JEEP), and it organizes transportation for the Secretary of Defense and other national security leaders so that they can leave the Washington area.

      • The Atlas Plan is a third, moving non-military leaders – Congressional leadership, the Supreme Court and other important figures – to their emergency relocation sites. Under Atlas, a still- secret bunker would be activated and cordoned, with government operations shifting to Maryland.

    • The three most compartmented contingencies – Octagon, Freejack, and Zodiac – call upon various military units in Washington DC, North Carolina and eastern Maryland to defend government operations if there is a total breakdown.

    • The seventh plan – codenamed Granite Shadow – lays out the playbook for extraordinary domestic missions that involve weapons of mass destruction. (I disclosed the existence of this plan in 2005, and its associated “national mission force”–a force that is on alert at all times, even in peacetime, to respond to a terrorist attack or threat with the nuclear weapon.)

    Most of these plans have been quietly activated during presidential inaugurals and State of the Union addresses, the centrality of the weapons of mass destruction scenario seen in the annual Capital Shield exercise in Washington. Last year’s exercise posited a WMD attack on Metro Station. Military sources say that only the massive destruction caused by a nuclear device – or the enormous loss of life that could be caused by a biological agent – present catastrophic pressure great enough to justify movement into extra-Constitutional actions and extraordinary circumstances plans.

    “WMD is such an important scenario,” a former NORTHCOM commander told me, “not because it is the greatest risk, but because it stresses the system most severely.”

    According to another senior retired officer, who told me about Granite Shadow and is now working as a defense contractor, the national mission force goes out on its missions with “special authorities” pre-delegated by the president and the attorney general. These special authorities are needed because under regulations and the law, federal military forces can supplant civil authority or engage in law enforcement only under the strictest conditions.

    When might the military’s “emergency authority” be needed? Traditionally, it’s thought of after a nuclear device goes off in an American city. But now, planners are looking at military response to urban violence as people seek protection and fight over food. And, according to one senior officer, in the contingency of the complete evacuation of Washington.

    Under Defense department regulations, military commanders are authorized to take action on their own – in extraordinary circumstances – where “duly constituted local authorities are unable to control the situation.” The conditions include “large-scale, unexpected civil disturbances” involving “significant loss of life or wanton destruction of property.” The Joint Chiefs of Staff codified these rules in October 2018, reminding commanders that they could decide, on their own authority, to “engage temporarily” in military control in circumstances “where prior authorization by the President is impossible” or where local authorities “are unable to control the situation.” A new Trump-era Pentagon directive calls it “extreme situations.” In all cases, even where a military commander declares martial law, the directives say that civil rule has to be restored as soon as possible.

    “In scenarios where one city or one region is devastated, that’s a pretty straightforward process,” the military planner told me.

    “But with coronavirus, where the effect is nationwide, we’re in territory we’ve never been in before.”

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    Supreme Court Justices Neil Gorsuch and Brett Kavanaugh attend the State of the Union address in the chamber of the U.S. House of Representatives at the U.S. Capitol Building on February 5, 2019 in Washington, DC.POOL/GETTY

    An extended period of devolution

    Continuity of government and protection of the presidency began in the Eisenhower administration with the possibility emerging that Washington could be obliterated in an atomic attack. The need to plan for a nuclear decision-maker to survive even a direct attack led to the building of bunkers and a maze of secret procedures and exceptions, many of which are still followed to this day. Congress was also folded in – at least Congressional leadership – to ensure that there would always be a Constitutional successor. And then the Supreme Court was added.

    Before 9/11, continuity and emergency programs were broadened beyond nuclear war preparedness, particularly as hurricanes began to have such devastating effects on modern urban society. And because of the advent of pandemics, broadly beginning with the Avian Influenza, civil agencies responsible for national security, such as the Department of Health and Human Services, which is the lead agency to respond to coronavirus, were also brought into continuity protection.

    Despite well-honed plans and constant testing over 30 years, the attacks of September 11, 2001 severely tested all aspects of continuity movement and communications. Many of the procedures written down on paper were either ignored or thrown out the window. As a result, continuity had a second coming, billions spent by the new Department of Homeland and the other national security agencies to ensure that the Washington leadership could communicate and move, a whole new system established to be ready if a terrorist attack came without warning. Bunkers, many shuttered at the end of the Cold War, were reopened and expanded. Befitting the panic at the time, and the atomic legacy, the most extraordinary planning scenario posited a terrorist attack that would involve an improvised nuclear or radiological dispersal device in a major American city.

    The terrorist attack scenario dominated until 2006, when the disastrous government response to Hurricane Katrina in New Orleans shifted federal government preparedness to formally adopt an “all-hazards” system. Civil agencies, the 50 states and local communities – particularly large cities – all began to synchronize emergency preparedness with common protocols. U.S. Northern Command was created to harness military assistance in domestic disasters, it’s three overarching contingency plans the product now of 15 years of trial and error.

    Government at all levels now have extensive “continuity” programs to respond to man-made and natural disasters, a national response framework that has steadily grown and taken hold. This is the public world of emergency response, ranging from life-saving efforts to protect and restore critical infrastructure, to drills that practice the evacuation of key officials. It is a partnership created between federal government agencies and the States, carefully constructed to guard the rule of law.

    In July 2016, Barack Obama signed the classified Presidential Policy Directive 40 on “National Continuity Policy,” establishing “essential functions” that government agencies were tasked to protect and retain. At the highest level were the National Essential Functions, those that posit “the continued functioning” of government under the Constitution. In order to preserve Constitutional rule, agencies were ordered to have not just a line of succession but also one of “devolution,” a duplicate chain of individuals secreted outside Washington available in a catastrophic emergency. Federal Continuity Directive 1, issued just days before Donald Trump became president, says that devolution has to establish “procedures to transfer statutory authority and responsibilities” to this secondary designated staff to sustain essential functions.

    “Devolution may be temporary, or may endure for an extended period,” the directive states. And it further directs that the devolution staff be located at “a geographically dispersed location unaffected by the incident.” Except that in the case of coronavirus, there may be no such location. This places the plans for the extraordinary into completely uncharted territory, planners not just considering how devolution or martial law might work in a nationwide disaster but also how those earmarked to implement these very plans have to be sequestered and made ready, even while they are equally vulnerable.

    NORTHCOM stresses in almost everything it produces for public consumption that it operates only in “support” of civil authorities, in response to state requests for assistance or with the consent of local authorities. Legally, the command says, the use of federal military forces in law enforcement can only take place if those forces are used to suppress “insurrection, domestic violence, unlawful combination, or conspiracy.” A second test also has to be met, that such disturbances “hinders the execution of the laws of that State, and of the United States within the State,” that is, that the public is deprived of its legal and constitutional protections. Local civil authorities must be “unable, fail, or refuse” to protect the civilian population for military forces to be called in, Pentagon directives make clear.

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    Hurricane Katrina forced the federal government to shift from a terrorism scenario to an “all-hazards” system. A family on their porch in the Treme area of New Orleans, which lies under several feet of water after Katrina hit on August 29, 2005.RICK WILKING/REUTERS

    Since Hurricane Katrina in 2006, no emergency has triggered any state to even request federal military aid under these procedures. Part of the reason, the senior officer involved in planning says, is that local police forces have themselves become more capable, acquiring military-grade equipment and training. And part of the reason is that the governors have worked together to strengthen the National Guard, which can enforce domestic law when it is mustered under state control.

    But to give a sense of how sensitive the employment of military forces on American soil is, when the New York National Guard arrived in New Rochelle last week, even though they were operating under the control of the governor, Mayor Noam Bramson still found it necessary to assure the public that no one in military uniform would have any “policing function.”

    Local authorities around America are already expressing worries that they have insufficient equipment, particularly ventilators, to deal with a possible influx of coronavirus patients, the number of hospital beds fewer than the potential number of patients that could need them. And brawls have already broken out in stores where products are in short supply. The worst case is that shortages and violence spreads, that the federal military, isolated and kept healthy behind its own barricade, is called to take over.

    Orders have already gone out that Secretary of Defense Esper and his deputy, David Norquist, remain physically separated, to guard against both of them becoming incapacitated. Other national security agencies are following suit, and the White House continuity specialists are readying evacuation should the virus sweep through the Executive Mansion.

    The plans state that the government continues essential functions under all circumstances, even if that is with the devolved second string or under temporary military command. One of the “national essential functions”, according to Federal Continuity Directive 1 is that the government “provid[e] leadership visible to the Nation and the world … [while] maintaining the trust and confidence of the American people”

    The question is whether a faceless elite could ever provide that confidence, preserving government command but also adding to public panic. That could be a virus too.


    Tyler Durden

    Sun, 03/22/2020 – 22:00

  • BofA Calls For "War-Time Measures", Urges Near-Total Fed Takeover Of Capital Markets
    BofA Calls For “War-Time Measures”, Urges Near-Total Fed Takeover Of Capital Markets

    Last Sunday, when the Fed threw what appeared to be the kitchen sink at crashing markets, cutting rates to 0%, unveiling a $700BN QE (since expanded to include another $100BN in MBS), and enhancing G-5 central bank FX swap lines (since expanded to include numerous non-G5 banks), many wondered why the Fed withheld the one instrument considered critical in restoring market stability, preventing the commercial paper market from seizing up and preventing mutual fund runs, namely a commercial paper backstop facility. Then, just 48 hours later, the Fed did just that as stocks continue to plunge, and even though the Fed has since unveiled even more Lehman-era anti crisis measures, it has now become apparent that merely redoing what the Fed did in 2008 won’t be enough. Trying to one-up itself, and reverse the market panic, on Friday morning the Fed also announced a municipal bond bailout by including munis to the MMLF, yet even that was not sufficient to prevent stocks from crashing on quad-witching Friday.

    So here we are late on Sunday night, with S&P futures just shy of limit down, waiting for Congress to pass a massive multi-trillion bailout legislation with Democrats and Republicans putting on a good show of sticking to their ideological talking points and roadblocking the bill’s passage even though everyone knows it will pass, the only question is how much more pain will markets take before this too shall pass.

    And yet, to some – such as Bank of America which was most vocal in demanding a commercial paper facility last weekend (which now seems like years ago) – not even a massive bailout package passed by Congress, one that would grant the Fed de facto powers to buy corporate bonds, will be enough.

    Instead, as BofA’s rates strategist Marc Cabana writes, there is “growing potential for the Fed to step up its already impressive policy response as lender of last resort.” Specifically, in the coming days and weeks BofA sees a growing likelihood of:

    • Adoption of UST yield curve targeting
    • Full and unlimited backstop to the Agency MBS market
    • Addressing regulatory constraints that have plagued intermediation of Fed repo
    • Re-launch of a new TALF-like program offering senior funding on ABS, CMBS, CLOs, longer-dated munis, and investment grade corporates
    • Provide guidance on the potential resolution plan for any failing entities to avoid fire sales of less liquid, riskier assets such as high yield debt, mezzanine structured product tranches, CRTs, and MSRs. Hurdles for this may prove high.

    In short, BofA agrees with Zoltan Pozsar, who last week once again assessed the damage and said that the Fed will effectively have to backstop everyone and everything, in declaring a virtually total takeover of capital markets by the Fed, which is now in critical triage mode, designed to prevent further asset losses which from this point on, would have dire social and perhaps civilizations implications, potentially even the civil war that Time Magazine one mocked us for predicting  back in 2010 when we said that the Fed has put the US on collision course with armed social conflict.

    And so, with days, if not hours left for capital markets them before the Federal Reserve effectively takes over all risk assets, here is BofA’s note urging the Fed to go all the way, which we deem is a fitting eulogy for the free markets and capitalism.

    Without further ado, here is Marc Cabana’s note explaining why “Bolder Fed Action is Likely”, by which he means the total takover of capital markets by a group of academics who have never even held a real job in their lives:

    Time to unleash the Fed’s full arsenal

    What has started out as a health care crisis has quickly spiraled into an economic one and risks quickly becoming a housing/financial crisis. The Federal Reserve has sounded the battle cry, with Chair Powell’s guidance to “act as appropriate” followed by an emergency 50bp rate cut on 3 March 2020. This has been followed by quick action to meet the market’s most immediate needs, in a series of steps detailed in Table 1. Scheduled asset purchases have been significantly upsized as the week progressed to stem market volatility and contain the impact of deteriorating market liquidity and forced selling.

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    Despite the impressive list of Fed actions last week, ongoing rate and spread volatility are amplifying the already high systemic risks:

    • MBS investors who hedge rates, such as REITs, are finding themselves selling at distressed levels to fund margin calls on their rate hedges
    • Fed funding for Treasuries and MBS is not being intermediated by dealers to customers
    • nearly unlimited Agency and Treasury repo are effectively pushing on a string as dealer balance sheets remain constrained by regulations
    • Dealers are effectively prevented from entering into a riskless transaction of passing repo on to customers as their balance sheets balloon
    • Investors who fund overnight, or whose repo term matures, may find themselves forced to sell as dealer balance sheets are constrained.

    To keep the situation from escalating further, and avoid the continued haphazard upsizing of daily QE purchases, we believe the Fed put needs to be made explicit, unlimited in quantity, and with a well-defined strike. To that end further “war-time” measures are needed. We believe it is time for the Fed to unleash its full arsenal to prevent these conditions worsening. We think it possible the Fed takes several additional measures in coming days or weeks, including:

    Federal Reserve undertakes Yield Curve Control (YCC) by defining yield targets across the UST curve, standing ready to buy in unlimited quantities of Treasuries at those yields irrespective of settle date or off-the-run status. This can support the coming record fiscal stimulus too, although communication would need to be clear to ensure dollar reserve status is not jeopardized. We think such as measure would be very effective at reducing current Treasury illiquidity and would like only need to be temporary in nature

    Just like QE1 was temporary, just like QE2 was temporary; just like QE3 was termporary; just like the QE4 bailout of repo was temporary, etc, etc, etc…

    Yield targets can change over time, and the Fed would need to be sensitive to any breakeven inflation widening as signal over debt monetization controls. Fed YCC can be scaled back gradually as the markets stabilize and, we believe, will ultimately result in a smaller Fed balance sheet than the current policy. We discuss the historical precedent for this during WW2, rationale for YCC today, implementation criteria, and considerations.

    Eliminate limits on Agency MBS daily purchase amount, and instead lock in MBS basis versus the yield target defined under YCC. For example the Fed could offer to buy each TBA daily at a fixed price in unlimited quantity. Prices would be published daily, with initial levels set to a reasonably wide spread, for example spot. The Fed would stand ready to buy for all settlement dates, using rolls to carry adjust as needed.

    So why exactly would we need markets at this point?

    With potentially unlimited purchases, dollar rolls can get squeezed if investors find themselves short bonds on TBA settle. To alleviate, the Fed would need to report daily or even intraday what they bought. Also, just like with the early days of QE3, the Fed can occasionally roll its TBA purchases forward to ensure orderly markets.

    • Eliminate regulatory limits associated with riskless dealer balance sheet exposures, similar to MMLF. Regulatory limits that could be eased include cash reserves held at the Fed or repo loans secured by collateral that is pledged to, and funded by the Fed. These exposures should not count for purposes of capital or liquidity regulations, and should not count negatively toward SLR or any other ratio or stress test. We believe such regulatory relief would go a long way to address funding and liquidity issues witnessed in USTs and MBS. It would also help stabilize specified pools, which is what most MBS investors hold, giving some investors the option to fund losses rather than forcing sales, or ensuring ongoing funding for prospective buyers.
    • To support liquidity in asset classes where the Fed does not offer repo, we see a growing likelihood of a substantial TALF-like facility being re-introduced. Offering non-recourse term repo that is not mark-to-market would effectively limit downside to investors with respect to potential liquidity events, and would be applicable to AAA, or at even most investment grade assets, with ratings determined as of the onset of this crisis.

    This facility could face investors directly, or if #3 above is implemented, then dealers could intermediate. Asset classes could span structured products such as ABS, CMBS, CLOs, but also corporate debt and munis. Term would likely be commensurate with asset maturity, i.e. measured in years, not months. Cost and allowed leverage could be similar to TALF, or L+100, prohibitive enough to curb usage once markets stabilize.

    The Fed could gear up for potential resolution planning associated with financial entity failures. The scepter of potential disorderly liquidations is impacting liquidity, creating a vicious spiral. For riskier and less liquid assets such as MSRs and CRTs not covered under the Fed repo or TALF, Maiden Lane-type facility can be created to absorb remaining illiquid assets to prevent fire-sale liquidation. Perhaps some sort of PPIP-like structure could be utilized where money managers will effectively set prices and co-invest with the government on favorable terms. Admittedly, the hurdle for this is high.

    Some ass-kissing of Cabana’s former employer follows, along side the hilarious admission that “post-crisis regulations to improve bank capital and liquidity were meant to ensure a repeat of 2008 would not happen. However, what is exposed now is that leverage and liquidity risk had simply shifted away from banks to other sectors of the economy and investor universe…”

    The Fed has done a tremendous amount over the past 1.5 weeks but we expect there will be additional changes in coming days or weeks. Post-crisis regulations to improve bank capital and liquidity were meant to ensure a repeat of 2008 would not happen. However, what is exposed now is that leverage and liquidity risk had simply shifted away from banks to other sectors of the economy and investor universe. The corporate sector became more levered, with holdings at money managers that have quickly become sellers, as credit risk spiked and redemptions surged. mREITs, another levered sector, have been sucked into this vortex. With banks already full on liquid assets this unfortunately leaves the Fed as the only game in town, in our view.

    Now if only there were those who had warned for years and years about this “totally unexpected” shifting of leverage and liquidity away from banks to the corporate sector, and instead of being mocked relentlessly by pathological permabull cretins who couldn’t see the future beyond their EOD P&L, were actually listened to. Alas, that did not happen, and now taxpayers who indirectly funded all those $4 trillion in corporate buybacks over the past decade will be the same useful idiots who will be forced to double down and bailout these same “systematically important” companies like cruise lines and movie theaters.

    Then, when that fails, the Fed’s takeover of capital markets will go from “near-total” to “total” as the Fed starts openly buying equities to prevent the final stock market crash in one final system-saving gamble. And then, when that also fails as it has over in Japan, well that will be game over for Western civilization as we know it.


    Tyler Durden

    Sun, 03/22/2020 – 21:40

  • Canada Boycotts Tokyo Olympics
    Canada Boycotts Tokyo Olympics

    Update (2130ET): After a day of further discussions and comments, it would appear that Canada is not convinced their athletes will be safe unless the Olympics is delayed and is therefore not sending any athletes to the games.

    The Canadian Olympic Committee and Canadian Paralympic Committee will refuse to send athletes to the Tokyo Olympics if the event is not postponed. The 2020 Games are currently set to begin on July 24.

    Team Canada will not send athletes to Games in summer 2020 due to COVID-19 risks

    The Canadian Olympic Committee (COC) and Canadian Paralympic Committee (CPC), backed by their Athletes Commissions, National Sports Organizations and the Government of Canada: have made the difficult decision to not send Canadian teams to the Olympic and Paralvmpic Games in the summer of 2020.

    The COC and CPC urgently call on the International Olympic Committee (IOC), the International Paralvmpic Committee (IPC) and the World Health Organization (WHO) to postpone the Games for one year and we offer them our full support in helping navigate all the complexities that rescheduling the Games will bring_ While we recognize the inherent complexities around a postponement, nothing is more important than the health and safety of our athletes and the world community_

    This is not solely about athlete health – it is about public health. With CON-ID-19 and the associated risks: it is not safe for our athletes. and the health and safety of their families and the broader Canadian community for athletes to continue training towards these Games. In fact it runs counter to the public health advice which we urge all Canadians to follow

    The COC and CPC reviewed the letter and news release sent Sunday by the IOC.. 1,Ve are thankful to the IOC for its assurance that it will not be cancelling the Tokyo 2020 Games and appreciative that it understands the importance of accelerating its decision-making regarding a possible postponement.

    We also applaud the IOC for acknowledging that safeguarding the health and wellness of nations and containing the virus must be our paramount concern. We are in the midst of a global health crisis that is far more significant than sport

    The COC and CPC would like to thank our athletes: partners and the Canadian sport community for their patience and for lending us their voices during these unprecedented times_ We remain hopeful that the IOC and IPC will agree with the decision to postpone the Games as a part of our collective responsibility to protect our communities and work to contain the spread of the virus.

    This move by the Canadians is likely to force the hand of the rest of the G-& and soon enough, Japan will be forced to postpone or cancel.

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    The International Olympic Committee has set a deadline of four weeks to make a decision on whether they will postpone the 2020 games in Tokyo due to the Chinese coronavirus pandemic, according to the BBC.

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    The move comes after most prominent teams across from various countries have demanded a delay – including the US track and field team, the US swim team – which asked for a one-year delay, and the country of Brazil.

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    The U.S. swimming and track and field teams are two of America’s most successful Olympic teams, and their popularity is one of the main reasons Comcast Corp.’s NBC agreed to pay $2.6 billion every four years to broadcast the games, significantly more than any other global media company. At the 2016 Summer Games in Rio, they accounted for more than half of the country’s 121 medals, and 29 of the 46 golds. –National Post

    According to Ransquawk, organizers are considering a delay of up to two years, though they are hopeful it will only be a 45-day postponement. Japan has already spent $12 billion (USD) on preparations, while reports have suggested up to $3 billion of sponsorship revenue may be at rosk.

    Other plans being considered involve holding the games without spectators, and/or scaling back the games. 
    Some organisers are pushing for a decision to be made quickly, warning that cancellation fees could rise the longer the decision is pushed-back. -Ransquawk

    IOC president Thomas Bach said on Friday that “different scenarios” are being considered for the first time – including a ‘scaled-down’ event.

    UK Athletics chairman Nic Coward recently suggested that the Olympics should be postponed, while Brazil, Norway and Slovenia’s Olympic committees have also urged the IOC to take action and put the Games back to next year. –BBC

    “I do think they will be postponed, it’s inevitable. Every day is the Olympic Games,” said four-time Olympics gold medalist on Canada’s ice hockey team, and a member of the IOC. “Every day athletes cannot train, workout, it’s a day they cannot prepare.”

    We suspect they won’t need four weeks to make their decision.


    Tyler Durden

    Sun, 03/22/2020 – 21:36

  • "Widespread Panic" Hits Commercial Property Markets: Deals Implode, Renters Disappear, Businesses Shut Down
    “Widespread Panic” Hits Commercial Property Markets: Deals Implode, Renters Disappear, Businesses Shut Down

    As a result of the coronavirus outbreak, and the ensuing lockdown, the commercial property market has essentially frozen. 

    Buildings that were used for all types of purposes: offices, diners, restaurants, hotels – they’ve all been shut down. And industries like the travel industry are forgoing $1.4 billion per week in revenue, according to Bloomberg. 

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    The shutdown is also having an effect on apartment buildings and industrial properties. Nothing is off limits, and it’s sending the commercial property market into chaos.

    Alexi Panagiotakopoulos, partner at Fundamental Income, a real estate strategy firm, said: “On the investor side, there’s widespread panic. There’s downward pressure on every aspect of every asset class.”

    And there’s no way to value a market when you don’t have a bid and an offer – and you’re not sure when the market will “re-open”. Further, there’s no way to try and model the future value of such properties when everyone is unsure of what the real estate landscape will look like when everything is said and done. 

    Scott Minerd, chief investment officer at Guggenheim Partners said: “There will likely be long-lasting changes.”

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    It’s estimated that investment activity in the space could fall by 45% this year, which would be further than post-9/11 or the 2008 financial crisis. 

    The drumbeat of large deals has already gone silent. For example, Bloomberg reports that the Canada Pension Plan Investment Board’s planned sale of a 50% stake in the 900 million pound Nova development in London’s Victoria district collapsed on Friday. Similarly, Singapore-based ARA Asset Management Ltd., which was lined up to purchase the pension fund’s half of Nova, has balked on the deal.

    Viacom also announced last week that it’s suspending its plans to sell the Black Rock building in Manhattan because potential buyers can’t visit the property. Simon Property Group’s proposed acquisition of Taubman Centers, Inc., is also now up in the air. 

    More than $13 billion in funds in the UK has been frozen in property funds while appraisers warn that the virus makes it impossible to assess their value. China’s office market has been devastated with plunging rents and spiking vacancy rates, which could climb as high as 28% next year in Shanghai, according to estimates.

    REITs in the U.S. have been destroyed. Names like Brookfield Property Partners, which made a $15 billion bet on malls in 2018, expects “severe consequences” in coming weeks. The company’s CEO says it has $6 billion in undrawn credit lines and cash.

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    Matthew Saperia, an analyst at Peel Hunt, commented on the potential threat to landlords: “The implications could be far-reaching, but quantifying these is highly speculative at present.”

    As the uncertainty grows, the level of credit available begins to shrink. Financing has dried up for hotel, mall and senior living projects and it’s estimated that up to 15% of loans on commercial property could default over the next couple of years if the recession continues.  The value of commercial mortgage-backed securities is collapsing…

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    Mark Fogel, CEO of Acres Capital, commented: “Nobody knows where deals will be priced and nobody knows just how long this issue is going to affect the world and how much it’ll affect the underlying collateral.”‘

    And Minerd believes there won’t be a “back to normal” once this is all over: “I think there’s going to be a permanent change. People are more comfortable at home. Why do they need to commute?”


    Tyler Durden

    Sun, 03/22/2020 – 21:20

  • The Entire Healthcare System In The US Is About To Collapse, Doctors & Nurses Warn
    The Entire Healthcare System In The US Is About To Collapse, Doctors & Nurses Warn

    Authored by Eoin Higgins via CommonDreams.org,

    Health professionals are increaingly sounding the alarm over the U.S. healthcare system, warning that the coronavirus outbreak could quickly overwhelm unprepareed hospitals without swift action to provide equipment to nurses and doctors. 

    “This is a nationwide problem, even on the private side,” an anonymous doctor told NBC News. 

    “No clinic in this country, or hospital for that matter, is going to have enough equipment.”

    NBC News reported that around 250 doctors and nurses responded to an informal survey request and painted a bleak picture of a healthcare system already on the verge of collapse with at least a month to go before coronavirus cases peak in the U.S.—citing in particular a lack of personal protective equipment (PPE).

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    According to NBC News:

    Nearly all who responded said there were shortages of PPE in the hospitals, outpatient clinics and offices where they worked.

    Many reported being forced to ration or reuse supplies, including surgical and N95 masks, for fear of running out. Many also said they were facing shortages of basic sanitary supplies, including hand sanitizer and disinfectant wipes.

    One Philadelphia doctor interviewed by NBC News said her husband—also a doctor—is on the frontlines in the city. 

    “I am so scared,” she said. “I can’t even begin to tell you.”

    Calls for the federal government to step in and order manufacturers to produce equipment increased Friday, with the union National Nurses United issuing a demand for immediate action to protect healthcare workers. 

    “We need to act now and act fast,” Bonnie Castillo, National Nurses United executive director, said in a statement.

    “Priority number one is to protect the health and safety of our nurses and health care workers so that they can continue to take care of patients and keep our communities as healthy as possible through this pandemic. If our health facilities no longer stay as centers of healing and instead turn into disease vectors, many more people will needlessly suffer from this terrible disease.”

    It’s not just PPE. Testing kits are near-impossible to obtain for hospitals and health professionals, leading to difficult decisions on who to treat, when to treat them, and how to track the virus. In Los Angeles County, health officials are instructing doctors and nurses “to test patients only if a positive result could change how they would be treated.”

    As the Los Angeles Times reported:

    A front-line healthcare provider who was not authorized to speak to the media and requested anonymity said county doctors are interpreting Thursday’s letter and other advice coming from senior L.A. County public health officials to mean they should only test patients who are going to be hospitalized or have something unique about the way they contracted the virus.

    They are not planning to test patients who have the symptoms but are otherwise healthy enough to be sent home to self-quarantine — meaning they may never show up in official tallies of people who tested positive.

    The coming crisis, as one nurse in Michigan told NBC News, is the result of a societal failure to prioritize public health. 

    “I don’t feel like my hospital is failing us,” said the nurse. “It’s the whole system that’s failing us.”


    Tyler Durden

    Sun, 03/22/2020 – 21:20

  • "Doesn’t Even Look Real" – Los Angeles Morphs Into "Ghost Town" Amid COVID-19 Outbreak 
    “Doesn’t Even Look Real” – Los Angeles Morphs Into “Ghost Town” Amid COVID-19 Outbreak 

    Last week we documented how the Seattle Metropolitan Area morphed into a ghost town amid the Covid-19 outbreak.

    Now, the staff at the Los Angeles Times has taken out their quadcopter to record how strict distancing measures in the Los Angeles Metropolitan Area have changed the everyday life for millions of people. 

    Traffic on the 110 Freeway, heading north out of Downtown Los Angeles is usually jam-packed with cars, but with Gov. Gavin Newsom requesting all Californians to “shelter-in-place,” highways in the area have virtually no vehicles on them.

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    With nonessential gatherings banned, residents are limited to leaving their homes. Places like Pershing Square in Downtown Los Angeles is now closed off to the public. 

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    All nonessential businesses across the state have been forced to close, which includes shopping malls and entertainment centers. LA Times’ staff snapped a picture of an empty parking lot at the Westfield Topanga & The Village shopping mall. 

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    With social gatherings banned, basketball courts at the Royal Learning Center in Central Los Angeles are empty.

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    One table was occupied this weekend at the Cal Marketplace in Downtown Los Angeles. 

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    The beach in Santa Monica was deserted except for two millennials and a homeless man behind them getting rays.

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    Thanks to Twitter, here are spookier views of an empty Los Angeles as millions shelter in their homes during the virus crisis: 

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    The Washington Post shares a drone video of Downtown Los Angeles as the local economy grinds to a halt. 

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    Tyler Durden

    Sun, 03/22/2020 – 21:00

  • Embedded Inside Minecraft Is The Uncensored Library Of Articles That Can Get You Killed In Some Countries
    Embedded Inside Minecraft Is The Uncensored Library Of Articles That Can Get You Killed In Some Countries

    Authored by Jake Anderson via TheMindUnleashed.com,

    The potential of gaming platforms as revolutionary comms has been pondered for decades.

    In his young adult novel Little Brother, author Cory Doctorow imagined teenagers using their video game systems to connect to an encrypted network to evade draconian government agencies in the wake of a terror attack and in For The Win, Doctorow explored the virtual economy of MMORPGs and their potential as an organizing mechanism against corrupt state power.

    Enter one of the more interesting real-life examples of a video game platform being repurposed to fight fascist state censorship. Reporters Without Borders has tapped Minecraft to develop its new project The Uncensored Library, which is a virtual hub where users can access censored journalism from around the world.

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    Developed as a synergistic effort by the German branch of Reporters Without Borders, the German marketing agency DDB, and the UK design company Blockworks, The Uncensored Library is not a gamification of press freedoms but rather part of a series of projects based on using alternative platforms and collaborative 3D design to fight censorship.

    Reporters Without Borders specifically sought out a company that could leverage the global engagement of Minecraft, which is so ubiquitous that it would be virtually impossible for a nation’s government to shut its servers down. DDB senior creative Tobi Natterer found in his research that countries with particularly draconian press censorship – Russia, Egypt, Mexico, Saudi Arabia, Vietnam, etc. – have extremely active gaming communities. Minecraft is the largest of those communities and it happens to allow gamers to write books in-game.

    “Inside [those books],” explained senior interactive producer Robert-Jan Blonk, who worked on the library, “you can find articles and information about the journalists that are being censored in their own countries. We share these stories through the books that live in that library, and people can just openly read them, because even in the countries… where these journalists are from, you’re able to play Minecraft.”

    The Uncensored Library features special sections for certain countries like Egypt, where there are virtually no press freedoms. The library features articles from Egypt that you simply can not find anywhere else except inside the Minecraft server. In Mexico, where journalists and dissidents face routine assassination from both the government and cartels, there is widespread self-censorship that is based on fear.

    “In the Mexico room we built memorials to 12 Mexican journalists who have been murdered,” said James Delaney, managing director at Blockworks.

    “Because of the explicit danger to journalists in Mexico, there are a lot of issues they won’t talk about because it’s too dangerous.”

    The game includes a pedestal for the work of murdered journalist Javier Valdez Cárdenas.

    Behind the library’s neo-classically iconic statue of a fist holding a pen and museum-like wings of book collections, there is a world map inscribing Reporters Without Borders’ Press Freedom Index, which ranks 180 countries based on their press censorship. The rankings factor in everything from executed journalists to the online censorship of articles, algorithmic censorship of keywords and even blocking VPNs, such as in China and Russia.

    The Uncensored Library is getting plenty of attention in countries that do not blatantly censor the press, of course. The map has clocked 23,000 downloads globally and the official server has drawn 17,000 unique visitors.

    For platform-specific info on how to access the library, Gizmodo offers a breakdown.

    For a virtual tour of the Uncensored Library, check out the video below:


    Tyler Durden

    Sun, 03/22/2020 – 20:40

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Mar 22

Today’s News 22nd March 2020

  • Martial Law In The US: How Likely Is It, & What Will Happen?
    Martial Law In The US: How Likely Is It, & What Will Happen?

    Authored by Robert Richardson via OffGridSurvival.com,

    The march towards martial law is something that is often ignored by the general public, often labeled as Quackery or something belonging on conspiracy websites. But what’s happening in this country is exactly what our founders warned us about, and martial law is something they took very, very seriously.

    What is martial law?

    If you’re looking for a definition, then Martial Law basically means using state or national military force to enforce the will of the government on the people.

    Under a declaration of martial law, Constitutional freedoms and liberties are suspended, and civilians are no longer entitled to their civil rights. It basically allows the government, or a tyrannical politician, to shred the Constitution and impose its will through military force.

    History of Martial Law in the United States of America

    “Those that fail to learn from history, are doomed to repeat it.”

    – Winston Churchill

    In one way or another, there have always been tyrants who have used the power of government to suppress and control the public. But if we are looking for specific examples of Martial Law being used inside the United States, we don’t have to look very hard or far to find them.

    Using the strictest definition of the term, we can see the roots of martial law in America take hold during the lead up to the Revolutionary war. Although there were many reasons for the war, including resistance to taxes imposed by the British parliament, the main catalyst was England’s decision to use military troops to enforce everyday law throughout the colonies.

    The beginning of the end? The Civil War Ushers in a Strong Central Government through Martial Law Enforcement

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    Flash forward a hundred years, and many of the most egregious examples of martial law can be found throughout the civil war. While today’s history books largely ignore the real reasons for the war or the many atrocities committed by President Lincoln, the facts of what really happened cannot be disputed.

    The reason we have lost so many of our liberties can be tied directly to the civil war.

    On September 15, 1863, President Lincoln imposed Congressionally-authorized martial law. While history contends the war was fought to end slavery, the truth is, Lincoln by his own admission never really cared about freeing slaves. In fact, Lincoln never intended to abolish slavery, his main interest was centralizing government power and using the federal government to exert complete control over all citizens. The abolishment of slavery was only a byproduct of the war. It actually took the 13th amendment to end slavery, since Lincoln actually only freed Southern slaves, not slaves in states loyal to the Union.

    During the Civil War, Lincoln continually violated the Constitution, in some cases suspending the entire Constitution that he swore to uphold.  

    • He suspended the writ of Habeas Corpus without the consent of congress.

    • He shut down newspapers whose writers displayed any dissent to Union policy or spoke out against him.

    • He raised troops without the consent of Congress.

    • He closed courts by force.

    • He even imprisoned citizens, newspaper owners,and elected officials without cause and without a trial.

    Our founders were very wary of using the military to enforce public policy, and concerns about this type of abuse date back to, and largely influenced, the creation of the Constitution. The founders continually warned about using military force to uphold law and order; unfortunately, most Americans are rather ignorant of history and are even more ignorant to what our founders intended when they created the Constitution and the Bill of Rights.

    What will happen under Martial law?

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    The actual words martial law will probably never be used.

    The first thing you will likely see is a declaration of a “State of Emergency”. This may be done nationally, in cases of war or a large-scale terrorist attacks; or it may happen locally, as witnessed in the wake of Hurricane Katrina.

    In August of 2005, New Orleans was declared a disaster area and a state of emergency was declared by the governor. This allowed state officials to order evacuations and forcefully remove residents from their homes, suspend certain laws, confiscate firearms, and suspend the sale of items like liquor, firearms, and ammunition.

    In the aftermath of Hurricane Katrina, New Orleans police, the U.S. Marshals office, and the Louisiana National Guard forcibly confiscated over 1,000 legal firearms from law-abiding citizens.

    Depending on the reasons behind the declaration you may also see:

    • The suspension of the Constitution, probably starting with the first and second amendment.

    • Confiscation of firearms; it has happened and it will happen again.

    • Suspension of Habeas corpus: Imprisonment without due process and without a trial.

    • Travel Restrictions, including road closures and possibly, even quarantine zones.

    • Mandatory Curfews and Mandatory Identification.

    • Automatic search and seizures without a warrant.

    When can Martial Law be enacted?

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    When Martial Law can be enacted is a pretty touchy subject, largely because our founders never intended the federal government or a standing army be permitted to take such actions. Unfortunately, most people accept these unconstitutional activities and are more than willing to give up their essential liberties in exchange for peace of mind and not having to think for themselves.

    This is something Benjamin Franklin warned about when he famously wrote,
    “Those who would give up essential Liberty, to purchase a little temporary Safety, deserve neither Liberty nor Safety.”

    How likely is martial law in the United States?

    Let’s face it, this country is a ticking time bomb. From widespread social unrest, crime, and violence to a growing national debt which includes an entire subset of our population that depends on government assistance to exist, the writing is on the wall: Trouble is Coming.

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    In my opinion, we are already under a form of martial law. The founders never intended standing armies policing the citizens of the United States; sadly that is exactly what we have.

    Drones, armored vehicles with high power weapons, tanks, and battlefield helicopters are no longer something that you see on some foreign battlefield; it’s now standard operating procedure at police stations throughout the country. Our federal government has poured billions of dollars into militarizing and taking over our country’s local police forces, in what can only be described as a domestic military force or standing army meant to enforce federal law.

    President Bush Expands Martial Law Authority

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    On September 29, 2006, President George W. Bush signed the John Warner National Defense Authorization Act (NDAA) for Fiscal Year 2007 (H.R. 5122). The law expanded the President’s authority to declare Martial Law under revisions to the Insurrection Act and actually allowed the President to take charge of National Guard troops without state governor authorization.

    While certain aspects of the bill were rolled back in 2008, President Obama used the 2012 NDAA to further strengthen the Executive offices ability to declare Martial Law and added provisions that would allow military troops to detain U.S. citizens without a trial.

    President Obama Forms National Police Task Force; Uses Social unrest as Justification.

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    In March of 2015, the Obama administration put together a task force that outlined rules for our nation’s police.

    In his Task Force on 21st-century policing report, he outlined the formation of a National Policing Practices and Accountability Division within the federal government. The report went on to describe how the Department of Homeland Security could be used to “ensure that community policing tactics in state, local, and tribal law enforcement agencies are incorporated into their role in homeland security.”

    Increasing number of Joint Police/Military Drills are using American Citizens as Theoretical Threats.

    From the Jade Helm Military drills that classified Texas and Utah as hostile zones, to National Guard troops in California using crisis actors to portray “right-wing” U.S. citizens in their training exercises, there is a growing number of military-style drills that are portraying American citizens as the perceived threat.

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    Back in 2012, an army report about the future use of the military as a police force within the United States looked at theoretical situations where the U.S. Army could be used against Tea Party “insurrectionists” who take over U.S. cities. During that same time period, the Department of Homeland Security released a report titled, “Hot Spots of Terrorism and Other Crimes in the United States,” where they outlined who the federal government sees as the largest terrorist threat in the country – that threat was U.S. citizens with extreme “right-wing” views.

    The United Stated of America that our Founders created is gone; it’s been replaced by a system that has grown so powerful that most people don’t even realize they’ve become enslaved by that very system.

    So how likely is Martial Law in the United States? Well, in some form it’s already here; unfortunately, most people choose to ignore the reality of the situation. That being said, to see it fully enacted we will likely first see a major crisis – either real or manufactured – something like a large-scale terror attack, war with a rogue nation, or a major pandemic disease outbreak.

    Martial Law Preparedness Resources:

    • Prepper 101: Your Survival Guide to Getting Started: General preparedness guidelines that will help during any crisis or long-term survival situation.

    • Bugout Planning: During martial law, it’s likely that most routes of travel will be severely restricted making bugging out something you need to think about well ahead of time.

    • Pandemics and How to Prepare for a Pandemic Outbreak: We list this here because it’s one disaster situation that has the potential to scare the entire populace into accepting some form of martial law, quarantine, and military checkpoints.

    • Emergency Communication Preparedness Checklist: During times of crisis, especially a martial law situation, uncensored information will be hard to come by. In all likelihood, you will see a sort of digital quarantine on top of the physical barriers with information on the internet and digital airwaves controlled by the government. You need to have a plan to get unfiltered news and information from trusted sources.

    • Best Emergency Food: The Top Survival Food Supplies: During any type of disaster you need to make sure you have adequate supplies on hand, including food, water, medical supplies, and self-defense supplies.


    Tyler Durden

    Sat, 03/21/2020 – 23:50

  • Half Of Americans Don't Trust Mainstream Media's COVID-19 Coverage
    Half Of Americans Don’t Trust Mainstream Media’s COVID-19 Coverage

    Americans are split on whether to trust news media with information regarding the coronavirus outbreak, according to a new poll.

    As Statista’s Willem Roper notes, a joint poll conducted by NPR, PBS NewsHour and Marist, shows that 47 percent of U.S. adults responded by saying “not very much” or “not at all” when asked how much they trusted news media with coronavirus information.

    This poll also included questions asking how much Americans trusted President Donald Trump, with 60 percent saying they didn’t trust him with coronavirus information, and on public health experts, with 13 percent saying they had little to no trust.

    Unsurprisingly, Americans views on the news media were split along partisan lines. For Democrats, only 33 percent said they had little to no trust in the news media. Republicans, however, responded at a substantial 60 percent on their lack of confidence in the news media handling coronavirus information. Independents were equally high in their skepticism at 47 percent

    Infographic: Polarizing Views on Coronavirus Information from News Media | Statista

    You will find more infographics at Statista

    Democrats and Republicans have been pointing fingers at news organizations since the coronavirus outbreak began to reach the U.S. Some Republicans believed liberal-leaning news outlets were blowing the outbreak out of proportion to damage the presidency and economy, while some Democrats believed conservative-leaning outlets were endangering American lives by not taking the outbreak seriously enough.


    Tyler Durden

    Sat, 03/21/2020 – 23:25

  • A 'Made-In-China' Pandemic
    A ‘Made-In-China’ Pandemic

    Authored by Brahma Chellaney via Project Syndicate,

    The new COVID-19 coronavirus has spread to more than 100 countries – bringing social disruption, economic damage, sickness, and death – largely because authorities in China, where it emerged, initially suppressed information about it. And yet China is now acting as if its decision not to limit exports of active pharmaceutical ingredients (APIs) and medical supplies – of which it is the dominant global supplier – was a principled and generous act worthy of the world’s gratitude.

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    When the first clinical evidence of a deadly new virus emerged in Wuhan, Chinese authorities failed to warn the public for weeks and harassed, reprimanded, and detained those who did. This approach is no surprise: China has a long history of “killing” the messenger. Its leaders covered up severe acute respiratory syndrome (SARS), another coronavirus, for over a month after it emerged in 2002, and held the doctor who blew the whistle in military custody for 45 days. SARS ultimately affected more than 8,000 people in 26 countries.

    This time around, the Communist Party of China’s proclivity for secrecy was reinforced by President Xi Jinping’s eagerness to be perceived as an in-control strongman, backed by a fortified CPC. But, as with the SARS epidemic, China’s leaders could keep it under wraps for only so long. Once Wuhan-linked COVID-19 cases were detected in Thailand and South Korea, they had little choice but to acknowledge the epidemic.

    About two weeks after Xi rejected scientists’ recommendation to declare a state of emergency, the government announced heavy-handed containment measures, including putting millions on lockdown. But it was too late: many thousands of Chinese were already infected with COVID-19, and the virus was rapidly spreading internationally. US National Security Adviser Robert O’Brien has said that China’s initial cover-up “probably cost the world community two months to respond,” exacerbating the global outbreak.

    Beyond the escalating global health emergency, which has already killed thousands, the pandemic has disrupted normal trade and travel, forced many school closures, roiled the international financial system, and sunk global stock markets. With oil prices plunging, a global recession appears imminent.

    None of this would have happened had China responded quickly to evidence of the deadly new virus by warning the public and implementing containment measures. Indeed, Taiwan and Vietnam have shown the difference a proactive response can make.

    Taiwan, learning from its experience with SARS, instituted preventive measures, including flight inspections, before China’s leaders had even acknowledged the outbreak. Likewise, Vietnam quickly halted flights from China and closed all schools. Both responses recognized the need for transparency, including updates on the number and location of infections and public advisories on how to guard against COVID-19.

    Thanks to their governments’ policies, both Taiwan and Vietnam – which normally receive huge numbers of travelers from China daily – have kept total cases under 50. Neighbors that were slower to implement similar measures, such as Japan and South Korea, have been hit much harder.

    If any other country had triggered such a far-reaching, deadly, and above all preventable crisis, it would now be a global pariah. But China, with its tremendous economic clout, has largely escaped censure. Nonetheless, it will take considerable effort for Xi’s regime to restore its standing at home and abroad.

    Perhaps that is why China’s leaders are publicly congratulating themselves for not limiting exports of medical supplies and APIs used to make medicines, vitamins, and vaccines. If China decided to ban such exports to the United States, the state-run news agency Xinhua recently noted, the US would be “plunged into a mighty sea of coronavirus.” China, the article implies, would be justified in taking such a step. It would simply be retaliating against “unkind” US measures taken after COVID-19’s emergence, such as restricting entry to the US by Chinese and foreigners who had visited China. Isn’t the world lucky that China is not that petty?

    Maybe so. But that is no reason to trust that China will not be petty in the future. After all, China’s leaders have a record of halting other strategic exports (such as rare-earth minerals) to punish countries that defied them.

    Moreover, this is not the first time China has considered weaponizing its dominance in global medical supplies and APIs. Last year, Li Daokui, a prominent Chinese economist, suggested curtailing Chinese API exports to the US as a countermeasure in the trade war.

    “Once the export is reduced,” Li noted, “the medical systems of some developed countries will not work.”

    That is no exaggeration. A US Department of Commerce study found that 97% of all antibiotics sold in the US come from China.

    “If you’re the Chinese and you want to really just destroy us,” Gary Cohn, former chief economic adviser to US President Donald Trump, observed last year, “just stop sending us antibiotics.”

    If the specter of China exploiting its pharmaceutical clout for strategic ends were not enough to make the world rethink its cost-cutting outsourcing decisions, the unintended disruption of global supply chains by COVID-19 should be. In fact, China has had no choice but to fall behind in producing and exporting APIs since the outbreak – a development that has constrained global supply and driven up the prices of vital medicines.

    That has already forced India, the world’s leading supplier of generic drugs, to restrict its own exports of some commonly used medicines. Almost 70% of the APIs for medicines made in India come from China. If China’s pharmaceutical plants do not return to full capacity soon, severe global medicine shortages will become likely.

    The COVID-19 pandemic has highlighted the costs of Xi’s increasing authoritarianism. It should be a wake-up call for political and business leaders who have accepted China’s lengthening shadow over global supply chains for far too long. Only by loosening China’s grip on global supply networks – beginning with the pharmaceutical sector – can the world be kept safe from the country’s political pathologies.


    Tyler Durden

    Sat, 03/21/2020 – 23:00

  • As COVID-19 Drives People Into Isolation, Wall Street's New 'Virtual Workplace' May Become The Norm
    As COVID-19 Drives People Into Isolation, Wall Street’s New ‘Virtual Workplace’ May Become The Norm

    As governments take drastic measures to slow the spread of the Wuhan coronavirus pandemic, Wall Street – much like a plethora of other industries – has embraced the virtual workplace, according to Bloomberg.

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    In Hong Kong, bankers have learned to win stock offerings by video chat, and Morgan Stanley is hosting a virtual meeting for a thousand-plus attendees. At Swiss giant UBS Group AG, wealth management executives have realized trips to see clients weren’t as crucial as thought. In California, an investor in hedge funds said he’s pleasantly surprised by how much faster he can confer with them remotely. –Bloomberg

    And according to the report, virtual finance may outlast the coronavirus – assuming a treatment is eventually found. Bloomberg notes that there are “early signs that some of the emergency measures Wall Street is rolling out to keep employees safe in a pandemic will become a lasting practice in an industry that’s long mythologized the handshake.”

    Early reports of tele-banking success came from Asia, forcing bankers to hunker down as COVID-19 began spreading like wildfire. Many predict their colleagues in other countries will easily adapt to the changes as well – beginning with sales and trading.

    “The outbreak has created the urgency to try out new ideas,” says Morgan Stanley’s head of Asia institutional equity distribution, Mehdee Reza, who oversees the firm’s annual investor summit in Hong Kong next week. After the event moved online, reservations jumped 50% – topping estimated participation by more than 400%.

    Morgan has moved other events online as well, with one focusing on Indian financial companies seeing a surge in registrants.

    UBS, meanwhile, saw travel costs for Asia plunge 90% in February after the outbreak curtailed movement, according to one person familiar with the situation. Now, the financial firm is considering a long-term shift toward remote meetings for bankers who cover the region.

    The firm’s dealmakers recently completed at least five pitch meetings on about $2 billion of stock sales with corporate clients via Skype and Zoom as they dialed in from home or from separate rooms, the people said. Citigroup Inc. bankers have been pitching via video conference on five to 10 transactions a week this year across mergers and acquisitions, equity and debt issuance, said Jan Metzger, head of Asia Pacific banking, capital markets and advisory.

    “With today’s technology you can interact quicker with a client than ever before and this could be a model for the future even when this situation resolves itself,” Metzger said. –Bloomberg

    At UBS’s Zurich headquarters, meanwhile, wealth management officials are considering a significant reduction in travel – though executives will still fly to meet clients who prefer it, or for types of business which must be conducted in person.

    Traders and salespeople in New York and London are setting up shop in their dens and kitchens for the long haul – though some are grumbling about lack of access to the full array of resources in the office. Others are parents who have been arguing for years that it’s easy to handle transactions remotely.

    LA hedge fund investor Michael Rosen says he’s enjoying the efficiency that telecommuting brings. Instead of traveling to meetings, he uses video-conferencing programs such as Zoom to hold meetings – though he does admit that lack of face-to-face interaction makes it harder to do gut-checks before handing millions of dollars to a fund manager.

    “We will return, one day, to in-person meetings, but video technology is here to stay and will only grow in importance,” said Rosen. “I suspect it is now a core feature of how we will work in the future.”

    It’s not just small gatherings. Manulife Financial Corp. organized a virtual town hall for 800 staff in Hong Kong and has been sharing its experience with its offices in the U.S. and Canada. Vanguard Group Inc.’s chief economist for the Asia-Pacific region has been holding webcasts for clients to discuss the outlook for the economy and markets.

    Even the crucially face-to-face world of recruiting has temporarily moved virtual, according to Ilana Weinstein, the founder and chief executive officer of Wall Street headhunter IDW Group, which counts some of the world’s biggest hedge funds as clients. The market’s swings are stirring up demand for hedge fund managers who can make money in times like these, said Weinstein, who instituted a 10-foot-distance policy before taking her meetings virtual with Skype.

    “As this proves efficient, it may be utilized more frequently,” she said. Still, “there’s nothing better than in-person when convincing someone to make a move. It’s about comfort with the unknown, and a layer of distance does not help.” –Bloomberg

    According to Morgan Stanley co-chief CEO of Asia-Pacific and co-head of global equities, “There will be a change, there’s no question.”

    “I don’t know that we’re going to go all the way back to where we were. I think we will end up somewhere in the middle.”


    Tyler Durden

    Sat, 03/21/2020 – 22:35

  • COVID-19 Has Exposed Our Financial Fragility
    COVID-19 Has Exposed Our Financial Fragility

    Authored by Jonathan Tepper via Unherd.com,

    An orgy of borrowing, speculation and euphoria has left the markets on the verge of catastrophe…

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    Financial markets have experienced the fastest ever crash over the past few weeks. Even during the dotcom bust and the Lehman crisis, stocks did not fall this quickly. In less than a month, we have seen major indices fall almost 30%, and stocks in sectors such as oil and travel down by 80%. We are experiencing terrifying daily declines not seen since the 1929 stock market crash that preceded the Great Depression.

    We are at a watershed moment: the coronavirus Covid-19 is a catalyst fast bringing many long simmering problems to the boil. It is exposing the creaking financial systems around us and it will change the way economies function. Economic and financial pundits, however, have been focusing almost exclusively on the short-term effects of coronavirus and so are missing the much bigger themes at play.

    Epidemiologists tell us that when it comes to the virus, we are looking at a once in a century event. It is highly contagious and highly lethal. Experts are not comparing Covid-19 to SARS or Swine Flu, but to the Spanish influenza of 1918 that killed between 50 and 100 million people worldwide.

    We do not have good data on what the stock market did during the 1918 flu, but we do know that it led to a severe recession. The connection between influenza and recessions is well documented. Going as far back as the Russian flu in 1889-90, the Spanish flu in 1918, the Asian flu in 1957-58 and the Hong Kong flu of 1968-69 — they all led to recessions. This one will be no different.

    But this recession will not only be driven by the economic loss of able-bodied workers, it will be helped along too by the steps political leaders take to avoid the spread of the coronavirus. In medicine, the immune system’s response can often be worse than the disease. When the body goes into septic shock, the immune system overreacts, releasing what doctors refer to as a cytokine flood, which can reduce blood to vital organs and lead to death. Sepsis is common and kills more than 10 million people a year. Today, the political reaction to Covid-19 is causing something akin to a septic shock to the global economy.

    The recession is likely to be very sharp but brief. Recessions are self-regulating. De-stocking of shelves and warehouses leads to re-stocking. Collapsing low interest rates and oil prices eventually spur spending and borrowing. Government spending and central bank easing eventually feed through to the real economy. While there will be massive panic and bankruptcies today, there is little doubt that markets will be better in a year, and certainly will be in two to three years,

    But the structural changes to how our economy operates, however, will be felt for decades to come. And this is in large part because we didn’t learn the lessons of the last crash.

    *  *  *

    Over the years since the 2008 crisis, central banks have been trying to stamp out every single small fire that flares up (the European crisis in 2011-12, the Chinese slowdown in 2015-16, the slowdown last year); but suppressing volatility and risk only creates bigger fires. Risk is like energy and cannot be destroyed. It can only be transformed.

    Forest fires are a useful analogy. California has infrequent, devastating forest fires; the Mexican state of Baja California has many small frequent fires and almost no major catastrophic fires. Both states have a similar climate and vegetation, yet they have vastly different outcomes. That’s because when there are very few small fires, underbrush grows, vegetation increases and creates greater kindling for the next fire. Suppressing small risks only makes them emerge eventually as very big ones.

    In politics and economics, massive change events tend to happen not in orderly sequences, but in sudden spasms, like the Arab Spring, or the collapse of the Eastern Bloc. Watching events unfold is often like watching sand grains pile slowly on top of one another until a final, random grain causes the entire pile to collapse. People knew the Arab countries were fragile and that the Eastern Bloc might eventually fall, but predicting which grain of sand would do it precipitate either was impossible.

    Physicists call these transitions critical thresholds. Critical thresholds are everywhere in nature. Water at moderate temperatures is disorganised and free-flowing, yet at a given critical value, it has an abrupt transition to a solid. It’s the same with the sandpile: one grain too many can trigger collapse — but which one?

    In 1987 Per Bak, Chao Tang, and Kurt Wiesenfeld found that while sandpiles may be individually unpredictable, they all behave the same way. The critical finding of their experiments was that the distribution of sand avalanches obeys a mathematical power law: The frequency of avalanches is inversely proportional to their size. Much like forest fires, the less frequent they are, the more catastrophic they are.

    It’s the same with financial markets and the economy. We will experience years of quiet, interrupted by sudden avalanche. Years of slowly adding grains of sand can end abruptly — to our great surprise. Today in financial markets, many unsustainable trends have been building, and the coronavirus is merely the grain of sand that has tipped the sandpile.

    *  *  *

    It would be controversial to say that the stock market reaction to the coronavirus would not have been very big had we not been in the middle of an orgy of borrowing, speculation and euphoria. Of course, stocks would have fallen with coronavirus headlines, but it is unlikely they would have crashed the way they did without those exacerbating factors. Furthermore, without enormous underlying imbalances of high corporate debt, the prospect of poor sales would not have driven so many stocks to the verge of collapse.

    This aspect of the current crisis has so far gone unreported. But not unmentioned. A few weeks before the crash, Charlie Munger, vice chairman of Berkshire Hathaway and Warren Buffett’s longtime business partner, issued a dire warning, “I think there are lots of troubles coming,” he said at the Los Angeles-based Daily Journal annual shareholders meeting. “There’s too much wretched excess.”

    Speculative euphoria was at record highs. As Sir John Templeton once said, “Bull markets are born in pessimism, grow on skepticism, mature on optimism and die on euphoria.” Investors were all on the same side of the boat, and it capsized, as happens in market crashes.

    • Investors were buying a record amount of call options, or bets on stock prices rising further. According to SentimenTrader, by early February, “We’ve never seen this level of speculation before. Not even close.”

    • Asset managers were betting in record quantities on stock futures, which are instruments to bet on underlying indices. Positioning in S&P futures hit a new high as of February 11.

    • Hedge fund borrowing to buy stocks was at a 24-month high. They were highly confident markets would keep rising.

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    It was not a coincidence that there was such euphoria. Retail brokerages had announced over the past few months that they were eliminating all commissions on trading activity. Buying and selling stocks was suddenly “free”. It was like pouring truckloads of kerosene on a blaze. At Charles Schwab, daily average trading revenue exploded 74% after the change.

    In scenes reminiscent of the dotcom boom, stocks were doubling overnight. Virgin Galactic Holdings, with no revenue, was worth over $6 billion dollars. Tesla, which has never made money selling cars, had a market capitalisation greater than any other car manufacturer. Its stock price quadrupled in less than three months. The market was so stretched that it would have crashed due to its own absurdity — with or without coronavirus.

    The source of this “free” trading came from high frequency trading firms that are supposed to act as market makers, executing buys and sells for clients. Except that they are not really disinterested middlemen; they are running their own trading strategies to make money off retail investors. They execute the order flow of so called mom and pop investors and profit from these “dumb money” retail traders, in the words of Reuters.

    The brokerages which sell retail orders receive hundreds of millions of dollars in return from the market makers. This means that, essentially the market makers are bribing the brokerages to profit from retail traders. For example, E*Trade received $188 million for selling its customer order flow last year, while TD Ameritrade made $135 million in the fourth quarter alone. The market makers are willing to pay so much because they almost never lose money — they trade fast and know where the market is going.

    As Warren Buffet once said, “As they say in poker, ‘If you’ve been in the game 30 minutes and you don’t know who the patsy is, you’re the patsy.’” Retail is the patsy.

    Ken Griffin is the owner of Citadel Securities the biggest market-making firm, and his business is so profitable that he has gone on one of the greatest property buying sprees of all time. In 2015 Griffin paid $60 million for multiple condo units in Miami. He paid a U.S.-record $239.96 million penthouse in New York City, a $122 million mansion in London, and over $250 million in Palm Beach properties. Market making against “dumb money” is a fabulous business.

    As the mania deflated in late February, though, mom and pop were abandoned. As the crash started, market makers pulled back and provided less liquidity. Retail investors were left high and dry. It is no wonder prices fell so quickly.

    The high frequency market makers have since been pleading for more capital, and rumors swirl that many are experiencing financial difficulties. The illusion of benign market makers looking after retail investors has vanished.

    There are echoes here of the old problems from the Lehman crisis; but they have mutated into different forms. During the Lehman crisis, mortgage bonds were pooled together, and insurance companies and pension funds bought them. Today, retail investors have been buying popular funds known as Exchange Traded Funds (ETFs). These are easy to trade and cheap, but they have a fundamental problem. While ETFs have simple tickers like HYG, JNK, LQD that the average retail broker can trade on their screen, they are really holding hundreds of individual bonds inside of them that the investor is unaware of. These bonds are not easy to trade at a moment’s notice and are highly illiquid. But while the ETFs rose slowly and steadily, and investors poured more money in, lulled by a false sense of security.

    While the ETF shares trade daily by the second, the underlying bonds are not easy to trade on their own. In the old days, insurers and pension funds bought these bonds, put them away in a drawer and never traded them. Today, though, investors expect instant liquidity from an illiquid investment. Liquidity mismatches are as old as banking itself (deposits and cash are highly liquid, while mortgages and loans are often completely illiquid); the problems of ETFs have been known all along, and the outcome has been inevitable.

    As the coronavirus panic spread, the ETFs started trading at big discounts to the underlying value of the baskets of bonds. Markets are broken, and the gap is a sign of how illiquid the underlying holdings really are.

    But these ETFs should never have been allowed in the first place.

    In the words of Christopher Wood, an investment strategist at Jefferies, “they commoditise equity and bond investing in an insidious way which ultimately creates a dangerous illusion of liquidity. True, ETFs are cheap. But so is fast food.”

    While ETFs may appear technical and unrelated to the broader problems in markets, they share the same underlying problem. We have had the illusion of safety and liquidity for some time, and it is the coronavirus that has exposed the gaping holes in financial markets.

    *  *  *

    The coronavirus won’t kill companies. But it will expose their bloated, overleveraged balance sheets. Corporate debt in companies has never been higher and has now reached a record 47% of GDP.

    Rather than encouraging moderation, central bankers and policy makers have been reloading the all you can eat buffet and persuading everyone to come back for third and fourth plates. The European Central Bank and the Bank of Japan have been buying corporate bonds, and central banks have kept funding at zero rates, which has encouraged a massive increase in indebtedness over the past decade.

    Central bankers have long promoted high corporate leverage because they see it as a way to stimulate demand. Even now, many economists see no problems on the horizon. In the New York Times, Nicolas Veron, a senior fellow at the Peterson Institute for International Economics in Washington, was openly mocking anyone advocating prudence, “The prophets of doom who thought that more debt was more risk have generally been wrong for the last 12 years.” Like most central bankers for the past decade, he argued, “More debt has enabled more growth, and even if you have a bit more volatility, it’s still net positive for the economy.”

    But while debt has encouraged growth, it has also introduced much greater financial fragility, and so the growth is fundamentally unsound. We are now finding out that less debt, rather than lower rates is better for financial stability.

    According to FactSet, 17% of the world’s 45,000 public companies haven’t generated enough cash to cover interest costs for at least the past three years. Debt has been used to finance more debt in a Ponzi fashion. The Bank for International Settlements looked at similar economic measures globally and found that the proportion of zombie companies — companies that earn too little even to make interest payments on their debt, and survive only by issuing new debt — is now higher than 12%, up from 4% in the mid 1990s.

    Entire industries are zombies. The most indebted and bankruptcy prone industry has been the shale oil industry. In the last five years, over 200 oil producers filed for bankruptcy. We will see dozens if not hundreds more bankruptcies in the coming year. They were all moribund with oil at $50 dollars; they’re now guaranteed to go bust with oil at $30.

    Only now, belatedly, are groups like the IMF waking up to the scale of the problem. In a recent report they warned that central banks have encouraged companies to pursue “financial risk-taking” and gorging on debt. “Corporate leverage can also amplify shocks, as corporate deleveraging could lead to depressed investment and higher unemployment, and corporate defaults could trigger losses and curb lending by banks,” the IMF wrote.

    According to the IMF, a downturn only half as bad as 2008 would put $19 trillion of debt—nearly 40% of the corporate borrowing in major countries—at risk of default. The economic consequences would be horrific.

    Corporate debt has doubled in the decade since the financial crisis, non-financial companies now owe a record $9.6 trillion in the United States. Globally, companies have issued $13 trillion in bonds. Much of the debt is Chinese, and their companies will struggle to repay any of it given the lockdown and the breakdown in supply chains.

    We have not even begun to see the full extent of the corporate bond market meltdown. One little discussed problem is that a large proportion of the debt is “junk”, i.e. lowly rated. An astonishing $3.6 trillion in bonds are rated “BBB”, which is only one rating above junk. These borderline bonds account for 54% of investment-grade corporate bonds, up from 30% in 2008. When recessions happen, these will be downgraded and fall into junk category. Many funds that cannot own junk bonds will become forced sellers. We will see an absolute carnage of forced selling when the downgrades happen. Again, the illusion of safety and liquidity will be exposed by the coronavirus.

    *  *  *

    The average family is encouraged to save money for a rainy day, in case they are fired, or they face hardship. Saving some money is considered prudent. It’s quite different for business. Companies pocket the profits in the good years and ask Uncle Sam to bail them out in the bad years. Heads shareholders win, tails the taxpayer loses.

    Industry can’t be blamed for not expecting an act of God or force majeure, but in the past 30 years we have seen two Gulf Wars, 9/11, SARS, MERS, Swine Flu, the Great Financial Crisis, etc. Saving for a rainy day should only be expected in cyclically sensitive industries.

    But rather than do that, companies have been engaging in a rather more reckless strategy: borrowing to buyback shares. This may boost their Return on Equity (ROE), but it is not remotely prudent and makes their companies highly vulnerable. Borrowing to prop up their own shares means they have less on hand when hard times come.

    According to Barons, “Stock buybacks within the S&P 500 index totaled an estimated $729 billion in 2019, down from a record $806 billion in 2018.”

    And then along came coronavirus.

    Of those industries that are now seeking a bailout, none has saved for a rainy day. Boeing, the poster boy of financial engineering and little real engineering, bought back over $100 billion worth of stock over the past few years. Today it is asking the government for a backstop to its borrowing.

    According to Bloomberg, since 2010, the big US airlines have spent 96% of their free cash flow on stock buybacks. Today, they’re asking US taxpayers for $25 billion.

    Airline CEOs have been handsomely paid while not saving for a rainy day. Delta Airline’s CEO Ed Bastian made the most, earning nearly $15 million in total compensation. American CEO Doug Parker $12 million, while United CEO Oscar Munoz earned total compensation last year of $10.5 million.

    The cruise liners were little different. Over the past decade, Carnival Cruises paid $9.2 billion dollars in dividends to its billionaire owners and bought back $6.7 billion of shares. Royal Caribbean, which is a smaller company, paid out $2.7 billion in dividends and $1.6 billion in buybacks. And the smallest cruise liner Norwegian Cruise Line spent $1.3 billion on share buybacks.

    For years, the cruise lines have triumphally proclaimed massive dividends and buybacks. For example, Carnival proudly announced in 2018. “In just three years, we have doubled our quarterly dividend and invested $3.5 billion in Carnival stock.”

    Cruise lines have no real claim to any bailout. They pay no taxes due to a legal loophole, and all their vessels fly the flags of Liberia, Panama and the Marshall Islands. Furthermore, their owners tend to be billionaires with more than enough financial wherewithal to recapitalise their own businesses. Their shareholders are not among the 1%. They’re among the 0.01% of richest people in the world. In the worst-case scenario, the US has a highly efficient bankruptcy process. Bondholders of today become shareholders of tomorrow, and the companies can have a fresh start. Bondholders would only be more than happy to own the equity of these companies.

    Banks, too, will inevitably be asking for bailouts before this is over. Banks have among the most aggressive stock buyback programs of any industry, with some repurchasing a staggering 10% of their outstanding shares annually. The eight biggest banks have announced they will suspend their share buybacks for the next two quarters due to the COVID-19 pandemic on the global economy. In 2019, the top eight banks bought back $108 billion of their own stock.

    If any good can come of the current crisis, perhaps it is exposing the irresponsibility of share buybacks and lack of prudence of most companies.

    *  *  *

    Monetary policy was one of the mechanisms employed in response to the last crisis, in the hope its effects would trickle down to the unwashed masses. Central banks bought vast amounts of treasuries and mortgage bonds to tighten financial spreads for banks and borrowers, but none of it went directly to households. It was all intermediated by the financial system and those who had access to capital.

    The absurdity of the policy was perfectly illustrated recently in Europe. The European Central Bank has been busy buying bonds, and recently it bought bonds from LVMH, the luxury conglomerate owned by the world’s richest man Bernard Jean Étienne Arnault. The bonds had a negative yield, meaning that the ECB was paying LVMH to borrow. LVMH used the ECBs money to buy Tiffany.

    If rates are now so low that billionaires are being paid to borrow, monetary policy has reached the limits of its usefulness.

    Investors own stocks because their bond portfolios have acted like a hedge. Whenever stocks have fallen, bonds have gone up. In every downturn since the 1980s, central banks have cut rates, but most government bonds now have close to zero yields.

    Extremely low interest rates and high valuations mean that any small change in interest rates will make portfolios much more volatile. If interest rates were to rise even slightly, they would vaporise many bond and stock portfolios. The margin of safety in bonds and stocks has diminished rapidly as rates have approached zero.

    The world is now upside down. Many investors now buy stocks for current income and buy bonds to trade given how volatile they have become. Things cannot hold.

    *  *  *

    What do high frequency market making, share buybacks and high corporate debt have in common? They are supposedly tools to make trading, growth and returns on capital more efficient and cheaper, yet they have made the system more fragile and less resilient. Perhaps returns on capital and cheapness of market orders and ETFs are less important than stability and anti-fragility, i.e. designing systems that are robust in the face of stress.

    We have seen the fragility in supply chains in the recent crisis.When the coronavirus struck in China, suddenly companies everywhere found out that outsourcing all their manufacturing and even medicines and face masks to China might be a problem.

    Manufacturing has become less robust, more fragile, even if the returns on capital are better for those companies that outsource everything to China in pursuit of share buybacks.

    The lessons of history are instructive. Although planting a single, genetically uniform crop might be more efficient and increase yields in the short run, low genetic diversity increases the risk of losing it all if a new pest is introduced or rainfall levels drop.

    The Irish Potato Famine is one such cautionary tale of the danger of monocultures, or only growing one crop. The potato first arrived in Ireland in 1588, and by the 1800s, the Irish had used it to solve the problem of feeding a growing population. They planted the “lumper” potato variety. All of these potatoes were genetically identical to one another, and it was vulnerable to the pathogen Phytophthora infestans. Because Ireland was so dependent on the potato, one in eight Irish people died of starvation in three years during the Irish potato famine of the 1840s.

    The lessons from nature are dire. In the 1920s, the Gros Michel banana was almost wiped out by a fungus known as Fusarium cubense, and banana shortages became a growing problem. The widespread planting of a single corn variety contributed to the loss of over a billion dollars worth of corn in 1970, when a fungus hit the US crop. In the 1980s, dependence upon a single type of grapevine root forced California grape growers to replant approximately two million acres of vines when the pest phylloxera attacked.

    Today, China is manufacturing’s monoculture.

    *  *  *

    Against this dangerous backdrop of volatility and uncertainty, the coronavirus will now achieve the impossible. For the past few years, two ideas have floated around on the political fringes of the Left, but they have been dead on arrival. No one has seriously thought they might become government policy. Today, the Left and Right in the United States and Europe are embracing them.

    Andrew Yang, a former tech executive from New York, ran a quixotic, obscure presidential campaign in the United States based on the idea that every citizen should receive a Universal Basic Income (UBI). He advocated a “Freedom Dividend”. This would be a form of universal basic income that would provide a monthly stipend of $1,000 for all Americans between the ages of 18 and 64.

    Today, Trump, Pelosi, Romney and others are fully backing Yang’s idea. Respected think tanks such Brookings and Chatham House have advocated UBI. But once it is implemented, there will be no going back. Handouts will start small and grow.

    The other big idea has come from Stephanie Kelton, who advised Bernie Sanders and advocates for Modern Monetary Theory (MMT). Kelton argues that in any country with its own currency, budget deficits don’t matter unless they cause inflation. The government can pay for what it needs by simply printing more money — no reason to borrow by issuing bonds. Helicopter money.

    Her ideas were widely criticised across the Left and Right, ranging from Paul Krugman to Warren Buffett to Federal Reserve Chairman Jay Powell.

    Yet today, the two ideas have come together. There are no atheists in foxholes. Even libertarians on Twitter are now calling for government intervention. Investors and politicians of all stripes are calling for UBI financed by MMT money issuing.

    This is an epochal turning point, a great reset. The coronavirus is the grain of sand that will cause the avalanche.

    For once the taboo of printing money to pay citizens is broken, we can never go back. Governments will spend money with few constraints, aided by central banks. It’s a strategy that has not worked well in emerging markets, and it did not work well in the 1970s — which has conveniently been forgotten.

    Undoubtedly, the government must compensate citizens from mandatory curfews and quarantines. The short-term impacts of the lockdowns must be mitigated, but temporary policies must not become permanent political expedients.

    That’s why the danger is not today or even a year from now, it’s five to ten years away, when the crisis has past, along with the reason for UBI and monetary easing. What politican will be disciplined enough to stop spending? What central banker will raise rates when it is unpopular to do so?

    Today we are reaping the whirlwind of the last financial crisis. Rather than pursue lower leverage, less debt and more robust institutions and more responsible corporate behaviour, investors and companies instead learned that they would be bailed out in a crisis.

    Central banks became enamored of their own success as fire fighters, and they have busily been trying to put out fires by encouraging reckless behaviour, prizing low volatility above a robust financial system, viewing “risk management” as preferring no financial corrections ever.

    They should accept that sometimes putting out every single fire creates greater conflagrations. They should be humbler about the extent and limits of their power.

    It looks like they’re about to learn the hard way.


    Tyler Durden

    Sat, 03/21/2020 – 22:10

  • US Automakers Beg For Tax Cuts And Delays Implementing USMCA Amidst Economic Shock
    US Automakers Beg For Tax Cuts And Delays Implementing USMCA Amidst Economic Shock

    While the economy continues its unprecedented collapse as a result of the coronavirus and the ensuing lockdowns, there has been nary an industry that has not gone rushing directly to Uncle Sam (and the taxpayer) for a bailout and/or some type of fiscal relief. 

    The U.S. auto industry, famous for being bailed out in 2008, is no exception. 

    Trade groups that represent the industry are now pleading with Washington for tax relief and delays in implementing the USMCA trade agreement, according to Bloomberg. They are asking for the concessions in hopes of blunting some of the economic blow from the shutdown of the industry, as a result of the virus. 

    The Alliance for Automotive Innovation and Motor and Equipment Manufacturers Association has specifically asked lawmakers for a tax deduction or credit for companies that provide paid sick leave for workers related to Covid-19.

    They are also asking to delay or defer 2020 quarterly federal tax payments and for a temporary employer payroll tax holiday. 

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    Additionally, automakers are seeking to expand and extend expensing for equipment and machinery while at the same time delaying the June 1 implementation date for the USMCA. 

    The trade group said in its letter: “We are already seeing a steep drop in retail sales over the last ten days, as well as significant disruptions in production, including temporary closures of numerous manufacturing facilities, while dealers and service centers largely remain open.”

    Recall just days ago we reported that the Big 3 automakers were shuttering all domestic manufacturing over concerns about the virus. 

    All three of Detroit’s “Big 3” automakers announced around midday on Wednesday that they would shutter all domestic production. The decision follows Daimler, BMW and a handful of other carmakers in Europe and Asia shuttering factories to combat the coronavirus outbreak – and to prevent a glut of supply.


    Tyler Durden

    Sat, 03/21/2020 – 21:45

  • Why Is CrowdStrike Confused On 11 Key Details About The DNC 'Hack'?
    Why Is CrowdStrike Confused On 11 Key Details About The DNC ‘Hack’?

    Authored by Larry Johnson via Sic Semper Tyrannis blog,

    Here is the bottom-line – despite being hired in late April (or early May) of 2016 to stop an unauthorized intrusion into the DNC, CrowdStrike, the cyber firm hired by the DNC’s law firm to solve the problem, failed abysmally. More than 30,000 emails were taken from the DNC server between 22 and 25 May 2016 and given to Wikileaks. Crowdstrike blamed Russia for the intrusion but claimed that only two files were taken. And CrowdStrike inexplicably waited until 10 June 2016 to reboot the DNC network. 

    CrowdStrike, a cyber-security company hired by a Perkins Coie lawyer retained by the DNC, provided the narrative to the American public of the alledged hack of the DNC, But the Crowdstrike explanation is inconsistent, contradictory and implausible. Despite glaring oddities in the CrowdStrike account of that event, CrowdStrike subsequently traded on its fame in the investigation of the so-called Russian hack of the DNC and became a publicly traded company. Was CrowdStrike’s fame for “discovering” the alleged Russian hack of the DNC a critical factor in its subsequent launch as a publicly traded company?

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    The Crowdstrike account of the hack is very flawed. There are 11 contradictions, inconsistencies or oddities in the public narrative about CrowdStrike’s role in uncovering and allegedly mitigating a Russian intrusion (note–the underlying facts for these conclusions are found in Ellen Nakashima’s Washington Post story, Vicki Ward’s Esquire story, the Mueller Report and the blog of Crowdstrike founder Dmitri Alperovitch):

    1. Two different dates—30 April or 6 May—are reported by Nakashima and Ward respectively as the date CrowdStrike was hired to investigate an intrusion into the DNC computer network.

    2. There are on the record contradictions about who hired Crowdstrike. Nakashima reports that the DNC called Michael Sussman of the law firm, Perkins Coie, who in turn contacted Crowdtrike’s CEO Shawn Henry. Crowdstrike founder Dmitri Alperovitch tells Nakashima a different story, stating our “Incident Response group, was called by the Democratic National Committee (DNC).

    3. CrowdStrike claims it discovered within 24 hours the “Russians” were responsible for the “intrusion” into the DNC network.

    4. CrowdStrike’s installation of Falcon (its proprietary software to stop breaches) on the DNC on the 1st of May or the 6th of May would have alerted to intruders that they had been detected.

    5. CrowdStrike officials told the Washington Post’s Ellen Nakashima that they were, “not sure how the hackers got in” and didn’t “have hard evidence.”

    6. In a blog posting by CrowdStrike’s founder, Dmitri Alperovitch, on the same day that Nakashima’s article was published in the Washington Post, wrote that the intrusion into the DNC was done by two separate Russian intelligence organizations using malware identified as Fancy Bear (APT28) and Cozy Bear (APT29).

    7. But, Alperovitch admits his team found no evidence the two Russian organizations were coordinating their “attack” or even knew of each other’s presence on the DNC network.

    8. There is great confusion over what the “hackers” obtained. DNC sources claim the hackers gained access to the entire database of opposition research on GOP presidential candidate Donald Trump. DNC sources and CrowdStrike claimed the intruders, “read all email and chat traffic.” Yet, DNC officials insisted, “that no financial, donor or personal information appears to have been accessed or taken.” However, CrowdStrike states, “The hackers stole two files.”

    9. Crowdstrike’s Alperovitch, in his blog posting, does not specify whether it was Cozy Bear or Fancy Bear that took the files.

    10. Wikileaks published DNC emails in July 2016 that show the last message taken from the DNC was dated 25 May 2016. This was much more than “two files.”

    11. CrowdStrike, in complete disregard to basic security practice when confronted with an intrusion, waited five weeks to disconnect the DNC computers from the network and sanitize them.

    Let us start with the very contradictory public accounts attributed to Crowdstrke’s founder, Dmitri Alperovitch. The 14 June 2016 story by Ellen Nakashima of the Washington Post and the October 2016 piece by Vicki Ward in Esquire magazine offer two different dates for the start of the investigation: 

    When did the DNC learn of the “intrusion”?

    Ellen Nakashima claims it was the end of April: 

    “DNC leaders were tipped to the hack in late April. Chief executive Amy Dacey got a call from her operations chief saying that their information technology team had noticed some unusual network activity… That evening, she spoke with Michael Sussmann, a DNC lawyer who is a partner with Perkins Coie in Washington. Soon after, Sussmann, a former federal prosecutor who handled computer crime cases, called Henry, whom he has known for many years. Within 24 hours, CrowdStrike had installed software on the DNC’s computers so that it could analyze data that could indicate who had gained access, when and how.

    Ward’s timeline, citing Alperovitch, reports the alert came later, on 6 May 2016:

    At six o’clock on the morning of May 6, Dmitri Alperovitch woke up in a Los Angeles hotel to an alarming email. . . . late the previous night, his company had been asked by the Democratic National Committee to investigate a possible breach of its network. A CrowdStrike security expert had sent the DNC a proprietary software package, called Falcon, that monitors the networks of its clients in real time. Falcon “lit up,” the email said, within ten seconds of being installed at the DNC: Russia was in the network.

    This is a significant and troubling discrepancy because it marks the point in time when CrowdStrike installed its Falcon software on the DNC server. It is one thing to confuse the 30th of April with the 1st of May. But Alperovitch gave two different reporters two different dates. 

    What did the “hackers” take from the DNC?

    Ellen Nakashima’s reporting is contradictory and wrong. Initially, she is told that the hackers got access to the entire Donald Trump database and that all emails and chats could be read. But then she is assured that only two files were taken. This was based on Crowdstrike’s CEO’s assurance, which was proven subsequently to be spectacularly wrong when Wikileaks published 35,813 DNC emails. How did Crowdstrike miss that critical detail? Here is Nakashima’s reporting:

    Russian government hackers penetrated the computer network of the Democratic National Committee and gained access to the entire database of opposition research on GOP presidential candidate Donald Trump, according to committee officials and security experts who responded to the breach.

    The intruders so thoroughly compromised the DNC’s system that they also were able to read all email and chat traffic, said DNC officials and the security experts. . . .

    The DNC said that no financial, donor or personal information appears to have been accessed or taken, suggesting that the breach was traditional espionage, not the work of criminal hackers.

    One group, which CrowdStrike had dubbed Cozy Bear, had gained access last summer (2015) and was monitoring the DNC’s email and chat communications, Alperovitch said.

    The other, which the firm had named Fancy Bear, broke into the network in late April and targeted the opposition research files. It was this breach that set off the alarm. The hackers stole two files, Henry said. And they had access to the computers of the entire research staff — an average of about several dozen on any given day. . . .

    CrowdStrike is continuing the forensic investigation, said Sussmann, the DNC lawyer. “But at this time, it appears that no financial information or sensitive employee, donor or voter information was accessed by the Russian attackers,” he said.

    The DNC emails that are posted on the Wikileaks website and the metadata shows that these emails were removed from the DNC server starting the late on the 22nd of May and continuing thru the 23rd of May. The last tranche occurred late in the morning (Washington, DC time) of the 25th of May 2016. Crowdstrike’s CEO, Shawn Henry, insisted on the 14th of June 2016 that “ONLY TWO FILES” had been taken. This is demonstrably not true. Besides the failure of Crowdstrike to detect the removal of more than 35,000 emails, there is another important and unanswered question—why did Crowdstrike wait until the 10th of June 2016 to start disconnecting the DNC server when they allegedly knew on the 6th of May that the Russians had entered the DNC network?

    Crowdstrike accused Russia of the DNC breach but lacked concrete proof. 

    Ellen Nakashima’s report reveals that Crowdstrike relied exclusively on circumstantial evidence for its claim that the Russian Government hacked the DNC server.  According to Nakashima:

    CrowdStrike is not sure how the hackers got in. The firm suspects they may have targeted DNC employees with “spearphishing” emails. These are communications that appear legitimate — often made to look like they came from a colleague or someone trusted — but that contain links or attachments that when clicked on deploy malicious software that enables a hacker to gain access to a computer. “But we don’t have hard evidence,” Alperovitch said.

    There is a word in English for the phrases, “Not sure” and “No hard evidence”–that word is, “assumption.” Assuming that the Russians did it is not the same as proving, based on evidence, that the Russians were culpable. But that is exactly what CrowdStrike did.

    The so-called “proof” of the Russian intrusions is the presence of Fancy Bear and Cozy Bear?

    At first glance, Dmitri Alperovitch’s blog posting describing the Fancy Bear and Cozy Bear “intrusions” appears quite substantive. But cyber security professionals quickly identified a variety of shortcomings with the Alperovitch account. For example, this malware is not unique nor proprietary to Russia. Other countries and hackers have access to APT28 and have used it.

    Skip Folden offers one of the best comprehensive analyses of the problems with the Alperovitch explanation:

    No basis whatsoever:

    APT28, aka Fancy Bear, Sofacy, Strontium, Pawn Storm, Sednit, etc., and APT29, aka Cozy Bear, Cozy Duke, Monkeys, CozyCar,The Dukes, etc., are used as ‘proof’ of Russia ‘hacking’ by Russian Intelligence agencies GRU and FSB respectively.

    There is no basis whatsoever to attribute the use of known intrusion elements to Russia, not even if they were once reverse routed to Russia, which claim has never been made by NSA or any other of our IC.

    On June 15, 2016 Dmitri Alperovitch himself, in an Atlantic Council article, gave only “medium-level of confidence that Fancy Bear is GRU” and “low-level of confidence that Cozy Bear is FSB.” These assessments, from the main source himself, that either APT is Russian intelligence, averages 37%-38% [(50 + 25) / 2].

    Exclusivity:

    None of the technical indicators, e.g., intrusion tools (such as X-Agent, X-Tunnel), facilities, tactics, techniques, or procedures, etc., of the 28 and 29 APTs can be uniquely attributed to Russia, even if one or more had ever been trace routed to Russia. Once an element of a set of intrusion tools is used in the public domain it can be reverse-engineered and used by other groups which precludes the assumption of exclusivity in future use. The proof that any of these tools have never been reverse engineered and used by others is left to the student – or prosecutor.

    Using targets:

    Also, targets have been used as basis for attributing intrusions to Russia, and that is pure nonsense. Both many state and non-state players have deep interests in the same targets and have the technical expertise to launch intrusions. In Grizzly Steppe, page 2, second paragraph, beginning with, “Both groups have historically targeted …,” is there anything in that paragraph which can be claimed as unique to Russia or which excludes all other major state players in the world or any of the non-state organizations? No.

    Key-Logger Consideration:

    On the subject of naming specific GRU officers initiating specific actions on GRU Russian facilities on certain dates / times, other than via implanted ID chips under the finger tips of these named GRU officers, the logical assumption would be by installed key logger capabilities, physical or malware, on one or more GRU Russian computers.

    The GRU is a highly advanced Russian intelligence unit. It would be very surprising were the GRU open to any method used to install key logger capabilities. It would be even more surprising, if not beyond comprehension that the GRU did not scan all systems upon start-up and in real time, including key logger protection and anomalies of performance degradation and data transmissions.

    Foreign intelligence source:

    Other option would be via a foreign intelligence unit source with local GRU access. Any such would be quite anti-Russian and be another nail in the coffin of any chain of evidence / custody validity at Russian site.

    Stated simply, Dmitri Alperovitch’s conclusion that “the Russians did it” are not supported by the forensic evidence. Instead, he relies on the assumption that the presence of APT28 and APT29 prove Moscow’s covert hand. What is even more striking is that the FBI accepted this explanation without demanding forensic evidence. 

    Former FBI Director James Comey and former NSA Director Mike Rogers testified under oath before Congress that neither agency ever received access to the DNC server. All information the FBI used in its investigation was supplied by CrowdStrike. The Hill reported:

    The FBI requested direct access to the Democratic National Committee’s (DNC) hacked computer servers but was denied, Director James Comey told lawmakers on Tuesday.

    The bureau made “multiple requests at different levels,” according to Comey, but ultimately struck an agreement with the DNC that a “highly respected private company” would get access and share what it found with investigators.

    The foregoing facts raise major questions about the validity of the Crowdstrike methodology and conclusions with respect to what happened on the DNC network. This is not a conspiracy theory. It is a set of facts that, as of today, have no satisfactory explanation. The American public deserve answers.


    Tyler Durden

    Sat, 03/21/2020 – 21:20

  • 'Stay Indoors Or Risk A Year In Prison': Jordan Blows Sirens At Start Of Virus Lockdown
    ‘Stay Indoors Or Risk A Year In Prison’: Jordan Blows Sirens At Start Of Virus Lockdown

    Jordan has imposed an unprecedented nation-wide curfew on Saturday to combat the spread of coronavirus at a moment its official confirmed number of cases approaches 100. As of Friday health officials said Jordan has 85 confirmed infections while emphasizing they expect numbers to rise rapidly. 

    “Jordan blew sirens at the start of a nationwide curfew on Saturday, limiting the mobility of its 10 million citizens indefinitely to combat the spread of coronavirus, witnesses and officials said,” Reuters reports.

    The round-the-clock ban on residents going outside started at 7am with warning sirens literally sounding across Amman. The new curfew is being widely described as the most severe measure any country has imposed on a nation-wide level thus far in the crisis.

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    Jordanian soldiers in the capital Amman on March 18, 2020. Image source: AFP

    As nations across the globe move to a militarized response, and with even the United States witnessing the rare deployment of National Guard units to city streets, such as in New York and Georgia, the government of Jordan is poised to impose perhaps the most draconian penalties for violating the newly announced measures.

    The Jordanian Army announced Saturday curfew violators for all but authorized emergency personnel and vital services will face up to a year in jail. Thousands of soldiers have already been deployed to city streets and highways, especially in the sprawling capital of Amman.

    “Anyone going outside will be subjecting themselves to punishment,” Justice Minister Bassam Talhouni said in an Arabic broadcast. Already at least 400 were arrested Saturday. “Nearly 400 people have been arrested in Jordan for violating an indefinite curfew introduced on Saturday that bans people from leaving their homes even to purchase food,” The Guardian reports.

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    The stringent measures immediately resulted in the following scene, as Reuters describes: 

    Armored police vehicles roamed the streets of main cities, calling on people to heed warnings not to leave their homes, witnesses said.

    Streets across the capital and main cities were deserted, with shops shuttered as police patrolled neighborhoods and the army manned checkpoints, witnesses said.

    Amman officials say they had to take drastic measures due to the “recklessness” of some elements among the population who refuse to take the pandemic threat seriously.

    “Unfortunately we have seen recklessness in scenes of shopping and moving around in the streets. These pose a grave danger to our efforts to contain the epidemic,” Amjad Adailah, a cabinet minister and government spokesman said.

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    Similar but arguably less draconian measures have been deployed in some communities and cities in neighboring Israel and the West Bank.

    Also, Syria to the north is presenting an increasingly worrisome situation: the Assad government has ordered the closure of all schools, restaurants, theaters and public places, and has even sent many government workers home as of Saturday. Yet authorities in Damascus are still officially reporting zero cases. However, it could also be the case they acted quickly enough, with WHO officials looking on and administering tests, amid all but the Lebanese border being for years shutdown due to war.

    The potential for an outbreak inside squalid and over-crowded refugee camps in the region is also alarming international health officials. The WHO is reportedly attempting to set up urgent testing inside camps along the Syrian-Turkish border, after a handful of cases appeared in an internally displaced persons (IDP) camp in Iraq.


    Tyler Durden

    Sat, 03/21/2020 – 20:55

  • The Fed Is A One-Trick Pony
    The Fed Is A One-Trick Pony

    Authored by William Anderson via The Mises Institute,

    In slashing its key interest rate to zero in response to the economic calamities imposed by all levels of government ostensibly to fight the coronavirus, the Federal Reserve System is trying to regenerate the crashing stock market.

    At opening bell right afterward, however, the market continued to crash, and those results perhaps should be telling us that the Fed’s one-trick solution to economic crises is just that: a trick.

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    Please understand that the central bank is doing what it always does when it seems there is an emergency: print money. Now, this is not like what we see in Venezuela, with wads of printed money lying in gutters or even what was seen in Weimar Germany in the fall of 1923. In contrast, the Fed wants us to see Very Serious Central Bankers ensuring that an imploding economy has plenty of “liquidity.”

    When a proposed congressional bill caused the October 1987 stock market crash, newly appointed Fed chairman Alan Greenspan immediately promised to provide “liquidity” to Wall Street banks. When the Y2K scare loomed, the Fed was there to “provide liquidity.”

    When the Housing Bubble burst in 2008, something Austrians had predicted more than a year before, Greenspan’s successor, Ben “Helicopter” Bernanke, made good on his promise to backstop the entire financial system with “liquidity” as the Fed went on an unprecedented spree of buying near-worthless securities in order to try to prop up the system (see diagram below).

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    Despite the attempt by Time to beatify Bernanke by putting him of the cover with the title “The Man Who Saved the World,” he didn’t save anything except for the existence of those very securities that had been the guts of the financial bubble and that the market itself already had declared near worthless. From valueless mortgage securities to long-term US Treasury bonds (part of “Operation Twist”), Bernanke’s Fed supposedly breathed life into the entire economy. (Here is a more current snapshot of the trend of Fed purchases, although the diagram does not break down the various assets.)

    In reality, Bernanke was depressing the economy by propping up the economic sectors featuring massive malinvestments and keeping resources from moving from lower-valued to higher-valued uses by tying up about a fifth of GDP with underperforming assets. That most financial journalists and academic economists failed to recognize what Bernanke  was actually doing is an indictment upon their various professions and speaks volumes about the willful ignorance in newsrooms and in the halls of academe.

    (Fed chairs from Bernanke’s successor, Janet Yellen, to current Fed chairman Jerome Powell all have imbibed from the same spiked Kool-Aid and there certainly is no threat of the current crop of financial journalists and economics/finance professors exposing the scam. The beat goes on.)

    So, now we have yet another “exit stage right” performance by the central bank that is part of the long line of Fed interventions that do little more than kick the proverbial can down the road. The reasoning goes like this: the huge work stoppage imposed by various governments means that people cannot pay their bills, and ultimately that winds up depressing banking assets, and depressed banking assets threaten the entire financial system and can bring down an economy.

    What to do? Just substitute the Fed’s funny money for real payments so that at least on paper, the bank balance sheets are in the black. It is another chapter of the “Perception Over Reality” work of fiction in which virtual printed money carries the same weight and value as money earned through real live economic activity. As economist Joseph T. Salerno recently wrote:

    Printing up paper money and giving it or lending it to domestic businesses or to India will not bring about a miraculous replacement of the lost goods and services or repair broken supply chains. However, the “pandemic shock” may, and probably will, have repercussions on the demand side of the economy, likely precipitating a financial crisis. But this is due to the designed fragility of a financial system based on fractional reserve banking and propped up by governmental policies such as deposit insurance and the too-big-to-fail doctrine.

    It is both discouraging and encouraging to see the market’s response. Like all of us who have thousands (and, really, hundreds of thousands) of dollars invested, we are taking a financial hit, and I have no idea if when this crisis passes my investment portfolio is going to resemble Berlin in 1945 or not. (I suspect I will be among the walking wounded.)

    However, the encouraging part—and this is a bit of a stretch—is that markets may finally—FINALLY—have recognized that a real economy with real production is different than the house of paper that the Fed has been creating the past few decades. Whether or not Americans are willing to take a hard look at our economy is another matter. With socialists claiming that they can create paradise via fiat and higher taxes and Trump supporters saying that the market surge (at least until the coronavirus hit) was “proof” that we had a great economy, there is plenty of delusion out there. It is time to pull back the curtain and expose the Fed for the humbug it truly is.


    Tyler Durden

    Sat, 03/21/2020 – 20:30

  • Biden Plans 'Fireside Corona Chats' To Snipe At Trump Virus Response
    Biden Plans ‘Fireside Corona Chats’ To Snipe At Trump Virus Response

    Seizing on the coronavirus national emergency, Joe Biden is now planning to give regular ‘shadow briefings’ as soon as Monday to undermine President Trump’s ‘lies and failures’ in responding to COVID-19, and offer his own thoughts on how to handle the crisis, according to Politico.

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    “President Trump stop saying false things, will ya?” Biden said in a Friday preview with reporters, where he rattled off a list of statements made by the POTUS.

    Most of Biden’s time was spent lighting up Trump.

    Biden pointed out that the president said the U.S. is “very close” to making a coronavirus vaccine, but that could be a year away (and Trump confused the coronavirus with Ebola). Biden noted that Trump said two Navy ships are in “tip top shape” and on the way to help, but the Navy said one is in maintenance and the other lacks a medical crew and is being “spruced up,” according to NBC News. The 500 million respirator masks that Trump said the government ordered, Biden noted, could take 18 months to arrive. And he faulted Trump for doing too little to support state and local governments. Politico

    In other words, Biden’s team is feeding him a list of ‘gotchas’ to go after Trump leading up to the November election, assuming it happens in November.

    “People are worried they are really frightened, when these things don’t come through. He just exacerbates their concern. Stop saying false things you think make you sound like a hero and start putting the full weight of the federal government behind finding fast, safe and effective treatments.”

    Biden made his comments from his home in Wilmington, Delaware, where he has been holed up for more than a week in adherence with Centers for Disease Control guidelines that urge people to practice social distancing.

    Immediately after the initial onset of the crisis, Biden also held his fire against the president out of concern it would look too political — an accusation leveled at him anyway by Trump campaign manager Brad Parscale, who said that “Biden will take attention from real updates Americans should know just to score political points.” –Politico

    Biden has withdrawn from public following last week’s decisive primary victories against Bernie Sanders in Florida, Illinois and Arizona – and says he’s been spending time speaking with businesses, governors, health officials and members of Congress.

    He says he’s been outfitting his house with new-fangled equipment that will ‘enable him to livestream events,’ as well as have interactive ‘tele-press conferences’ as well as broadcast interviews with a network television.

    In short, Biden has joined the 21st century.

    “I would like to get in the position and we’re trying to work out so that the headquarters … to be able to accommodate my directly answering questions in front of a press that’s assigned to me,” he said, adding “We’ve hired a professional team to do that now. And excuse the expression that’s a little above my pay grade to know how to do that.”

    Because politicizing a national emergency is what America needs most right now.


    Tyler Durden

    Sat, 03/21/2020 – 20:05

  • COVID-19 – Evidence Over Hysteria
    COVID-19 – Evidence Over Hysteria

    Authored by Aaron Ginn via Medium.com,

    After watching the outbreak of COVID-19 for the past two months, I’ve followed the pace of the infection, its severity, and how our world is tackling the virus. While we should be concerned and diligent, the situation has dramatically elevated to a mob-like fear spreading faster than COVID-19 itself.

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    When 13% of Americans believe they are currently infected with COVID-19 (mathematically impossible), full-on panic is blocking our ability to think clearly and determine how to deploy our resources to stop this virus. Over three-fourths of Americans are scared of what we are doing to our society through law and hysteria, not of infection or spreading COVID-19 to those most vulnerable.

    The following article is a systematic overview of COVID-19 driven by data from medical professionals and academic articles that will help you understand what is going on (sources include CDC, WHO, NIH, NHS, University of Oxford, Stanford, Harvard, NEJM, JAMA, and several others). I’m quite experienced at understanding virality, how things grow, and data. In my vocation, I’m most known for popularizing the “growth hacking movement” in Silicon Valley that specializes in driving rapid and viral adoption of technology products. Data is data. Our focus here isn’t treatments but numbers. You don’t need a special degree to understand what the data says and doesn’t say. Numbers are universal.

    I hope you walk away with a more informed perspective on how you can help and fight back against the hysteria that is driving our country into a dark place. You can help us focus our scarce resources on those who are most vulnerable, who need our help.

    Note: The following graphs and numbers are as of mid-March 2020. Things are moving quickly, so I update this article twice a day. Most graphs are as of March 20th, 2020.

    *  *  *

    Total cases are the wrong metric

    A critical question to ask yourself when you first look at a data set is, “What is our metric for success?”.

    Let’s start at the top. How is it possible that more than 20% of Americans believe they will catch COVID-19? Here’s how. Vanity metrics — a single data point with no context. Wouldn’t this picture scare you?

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    Look at all of those large red scary circles!

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    These images come from the now infamous John Hopkins COVID-19 tracking map. What started as a data transparency effort has now molded into an unintentional tool for hysteria and panic.

    An important question to ask yourself is what do these bubbles actually mean? Each bubble represents the total number of COVID-19 cases per country. The situation looks serious, yet we know that this virus is over four months old, so how many of these cases are active?

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    Immediately, we now see that just under half of those terrifying red bubbles aren’t relevant or actionable. The total number of cases isn’t illustrative of what we should do now. This is a single vanity data point with no context; it isn’t information or knowledge. To know how to respond, we need more numbers to tell a story and to paint the full picture. As a metaphor, the daily revenue of a business doesn’t tell you a whole lot about profitability, capital structure, or overhead. The same goes for the total number of cases. The data isn’t actionable. We need to look at ratios and percentages to tell us what to do next — conversion rate, growth rate, and severity.

    Time lapsing new cases gives us perspective

    Breaking down each country by the date of the first infection helps us track the growth and impact of the virus. We can see how total cases are growing against a consistent time scale.

    Here are new cases time lapsed by country and date of first 100 total cases.

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    Here is a better picture of US confirmed case daily growth.

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    The United States is tracking with other European nations at doubling every three days or so. As we measure and test more Americans, this will continue to grow. Our time-lapse growth is lower than China, but not as good as South Korea, Japan, Singapore, or Taiwan. All are considered models of how to beat COVID-19. The United States is performing average, not great, compared to the other modern countries by this metric.

    Still, there is a massive blindspot with this type of graph. None of these charts are weighted on a per-capita basis. It treats every country as a single entity, as we will see this fails to tell us what is going on in several aspects.

    On a per-capita basis, we shouldn’t be panicking

    Every country has a different population size which skews aggregate and cumulative case comparisons. By controlling for population, you can properly weigh the number of cases in the context of the local population size. Viruses don’t acknowledge our human borders. The US population is 5.5X greater than Italy, 6X larger than South Korea, and 25% the size of China. Comparing the US total number of cases in absolute terms is rather silly.

    Rank ordering based on the total number of cases shows that the US on a per-capita basis is significantly lower than the top six nations by case volume. On a 1 million citizen per-capita basis, the US moves to above mid-pack of all countries and rising, with similar case volume as Singapore (385 cases), Cyprus (75 cases), and United Kingdom(3,983 cases). This is data as of March 20th, 2020.

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    But total cases even on a per-capita basis will always be a losing metric. The denominator (total population) is more or less fixed. We aren’t having babies at the pace of viral growth. Per-capita won’t explain how fast the virus is moving and if it is truly “exponential”.

    COVID-19 is spreading, but probably not accelerating

    Growth rates are tricky to track over time. Smaller numbers are easy to move than larger numbers. As an example, GDP growth of 3% for the US means billions of dollars while 3% for Bermuda means millions. Generally, growth rates decline over time, but the nominal increase may still be significant. This holds true of daily confirmed case increases. Daily growth rates declined over time across all countries regardless of particular policy solutions, such as shutting the borders or social distancing.

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    The daily growth data across the world is a little noisy.

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    Weighing daily growth of confirmed cases by a relative daily growth factor cleans up the picture, more than 1 is increasing and below 1 is declining. For all of March, the world has hovered around 1.1. This translates to an average daily growth rate of 10%, with ups and downs on a daily basis. This isn’t great, but it is good news as COVID-19 most likely isn’t increasing in virality. The growth rate of the growth rate is approximately 10%; however, the data is quite noisy. With inconsistent country-to-country reporting and what qualifies as a confirmed case, the more likely explanation is that we are increasing our measurement, but the virus hasn’t increased in viral capability. Recommended containment and prevention strategies are still quite effective at stopping the spread.

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    Cases globally are increasing (it is a virus after all!), but beware of believing metrics designed to intentionally scare like “cases doubling”. These are typically small numbers over small numbers and sliced on a per-country basis. Globally, COVID-19’s growth rate is rather steady. Remember, viruses ignore our national boundaries.

    Viruses though don’t grow infinitely forever and forever. As with most things in nature, viruses follow a common pattern — a bell curve.

    Watch the Bell Curve

    As COVID-19 spreads and declines (which it will decline despite what the media tells you), every country will follow a similar pattern. The following is a more detailed graph of S. Korea’s successful defeat of COVID-19 compared also to China with thousands of more cases and deaths. It is a bell curve:

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    Here is a more detailed graph of S. Korea graphed against the total number of cases.

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    Here is a graph from Italy showing a bell curve in symptom onset and number of cases, which may point to the beginning of the end for Italy —

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    JAMA — https://jamanetwork.com/journals/jama/pages/coronavirus-alert

    Bell curves is the dominant trait of outbreaks. A virus doesn’t grow linearly forever. It accelerates, plateaus, and then declines. Whether it is environmental or our own efforts, viruses accelerate and quickly decline. This fact of nature is represented in Farr’s law. CDC’s of “bend the curve” or “flatten the curve” reflects this natural reality.

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    It is important to note that in both scenarios, the total number of COVID-19 cases will be similar. “Flattening the curve”’s focus is a shock to the healthcare system which can increase fatalities due to capacity constraints. In the long-term, it isn’t infection prevention. Unfortunately, “flattening the curve” doesn’t include other downsides and costs of execution.

    Both the CDC and WHO are optimizing virality and healthcare utilization, while ignoring the economic shock to our system. Both organizations assume you are going to get infected, eventually, and it won’t be that bad.

    A low probability of catching COVID-19

    The World Health Organization (“WHO”) released a study on how China responded to COVID-19. Currently, this study is one of the most exhaustive pieces published on how the virus spreads.

    The results of their research show that COVID-19 doesn’t spread as easily as we first thought or the media had us believe (remember people abandoned their dogs out of fear of getting infected). According to their report if you come in contact with someone who tests positive for COVID-19 you have a 1–5% chance of catching it as well. The variability is large because the infection is based on the type of contact and how long.

    The majority of viral infections come from prolonged exposures in confined spaces with other infected individuals. Person-to-person and surface contact is by far the most common cause. From the WHO report, “When a cluster of several infected people occurred in China, it was most often (78–85%) caused by an infection within the family by droplets and other carriers of infection in close contact with an infected person.

    From the CDC’s study on transmission in China and Princess Cruise outbreak –

    A growing body of evidence indicates that COVID-19 transmission is facilitated in confined settings; for example, a large cluster (634 confirmed cases) of COVID-19 secondary infections occurred aboard a cruise ship in Japan, representing about one fifth of the persons aboard who were tested for the virus. This finding indicates the high transmissibility of COVID-19 in enclosed spaces

    Dr. Paul Auwaerter, the Clinical Director for the Division of Infectious Diseases at Johns Hopkins University School of Medicine echoes this finding,

    “If you have a COVID-19 patient in your household, your risk of developing the infection is about 10%….If you were casually exposed to the virus in the workplace (e.g., you were not locked up in conference room for six hours with someone who was infected [like a hospital]), your chance of infection is about 0.5%”

    According to Dr. Auwaerter, these transmission rates are very similar to the seasonal flu.

    Air-based transmission or untraceable community spread is very unlikely. According to WHO’s COVID-19 lead Maria Van Kerkhove, true community based spreading is very rare. The data from China shows that community-based spread was only a very small handful of cases. “This virus is not circulating in the community, even in the highest incidence areas across China,” Van Kerkhove said.

    “Transmission by fine aerosols in the air over long distances is not one of the main causes of spread. Most of the 2,055 infected hospital workers were either infected at home or in the early phase of the outbreak in Wuhan when hospital safeguards were not raised yet,” she said.

    True community spread involves transmission where people get infected in public spaces and there is no way to trace back the source of infection. WHO believes that is not what the Chinese data shows. If community spread was super common, it wouldn’t be possible to reduce the new cases through “social distancing”.

    “We have never seen before a respiratory pathogen that’s capable of community transmission but at the same time which can also be contained with the right measures. If this was an influenza epidemic, we would have expected to see widespread community transmission across the globe by now and efforts to slow it down or contain it would not be feasible,” said Tedros Adhanom, Director-General of WHO.

    An author of a working paper from the Department of Ecology and Evolutionary Biology at Princeton University said, “The current scientific consensus is that most transmission via respiratory secretions happens in the form of large respiratory droplets … rather than small aerosols. Droplets, fortunately, are heavy enough that they don’t travel very far and instead fall from the air after traveling only a few feet.”

    The media was put into a frenzy when the above authors released their study on COVID-19’s ability to survive in the air. The study did find the virus could survive in the air for a couple of hours; however, this study was designed as academic exercise rather than a real-world test. This study put COVID-19 into a spray bottle to “mist” it into the air. I don’t know anyone who coughs in mist form and it is unclear if the viral load was large enough to infect another individual As one doctor, who wants to remain anonymous, told me, “Corona doesn’t have wings”.

    To summarize, China, Singapore, and South Korea’s containment efforts worked because community-based and airborne transmission aren’t common. The most common form of transmission is person-to-person or surface-based.

    Common transmission surfaces

    COVID-19’s ability to live for a long period of time is limited on most surfaces and it is quite easy to kill with typical household cleaners, just like the normal flu.

    • COVID-19 be detected on copper after 4 hours and 24 hours on cardboard.

    • COVID-19 survived best on plastic and stainless steel, remaining viable for up to 72 hours

    • COVID-19 is very vulnerable to UV light and heat.

    Presence doesn’t mean infectious. The viral concentration falls significantly over time. The virus showed a half-life of about 0.8 hours on copper, 3.46 hours on cardboard, 5.6 hours on steel and 6.8 hours on plastic.

    According to Dylan Morris, one of the authors, “We do not know how much virus is actually needed to infect a human being with high probability, nor how easily the virus is transferred from the cardboard to one’s hand when touching a package”

    According to Dr. Auwaerter, “It’s thought that this virus can survive on surfaces such as hands, hard surfaces, and fabrics. Preliminary data indicates up to 72 hours on hard surfaces like steel and plastic, and up to 12 hours on fabric.”

    COVID-19 will likely “burn off” in the summer

    Due to COVID-19’s sensitivity to UV light and heat (just like the normal influenza virus), it is very likely that it will “burn off” as humidity increases and temperatures rise.

    Released on March 10th, one study mapped COVID-19 virality capability by high temperature and high humidity. It found that both significantly reduced the ability of the virus to spread from person-to-person. From the study,

    “This result is consistent with the fact that the high temperature and high humidity significantly reduce the transmission of influenza. It indicates that the arrival of summer and rainy season in the northern hemisphere can effectively reduce the transmission of the COVID-19.”

    The University of Maryland mapped severe COVID-19 outbreaks with local weather patterns around the world, from the US to China. They found that the virus thrives in a certain temperature and humidity channel. “The researchers found that all cities experiencing significant outbreaks of COVID-19 have very similar winter climates with an average temperature of 41 to 52 degrees Fahrenheit, an average humidity level of 47% to 79% with a narrow east-west distribution along the same 30–50 N” latitude”, said the University of Maryland.

    “Based on what we have documented so far, it appears that the virus has a harder time spreading between people in warmer, tropical climates,” said study leader Mohammad Sajadi, MD, Associate Professor of Medicine in the UMSOM, physician-scientist at the Institute of Human Virology and a member of GVN.

    In the image below, the zone at risk for a significant community spread in the near-term includes land areas within the green bands.

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    Children and Teens aren’t at risk

    It’s already well established that the young aren’t particularly vulnerable. In fact, there isn’t a single death reported below the age of 10 in the world and most children who test positive don’t show symptoms. As well, infection rates are lower for individuals below the age of 19, which is similar to SARS and MERS (COVID-19’s sister viruses).

    According to the WHO’s COVID-19 mission in China, only 8.1% of cases were 20-somethings, 1.2% were teens, and 0.9% were 9 or younger. As of the study date February 20th, 78% of the cases reported were ages 30 to 69. The WHO hypothesizes this is for a biological reason and isn’t related to lifestyle or exposure.

    “Even when we looked at households, we did not find a single example of a child bringing the infection into the household and transmitting to the parents. It was the other way around. And the children tend to have a mild disease,” said Van Kerkhove.

    According to a WSJ article, children have a near-zero chance of becoming ill. They are more likely to get normal flu than COVID-19.

    • A World Health Organization report on China concluded that cases of Covid-19 in children were “relatively rare and mild.” Among cases in people under age 19, only 2.5% developed severe disease while 0.2% developed critical disease. Among nearly 6,300 Covid-19 cases reported by the Korea Centers for Disease Control & Prevention on March 8, there were no reported deaths in anyone under 30. Only 0.7% of infections were in children under 9 and 4.6% of cases were in those ages 10 to 19 years old

    • Only 2% of the patients in a review of nearly 45,000 confirmed Covid-19 cases in China were children, and there were no reported deaths in children under 10, according to a study published in JAMA last month. (In contrast, there have been 136 pediatric deaths from influenza in the U.S. this flu season.)

    • About 8% of cases were in people in their 20s. Those 10 to 19 years old accounted for 1% of cases and those under 10 also accounted for only 1%.

    However even if children and teens are not suffering severe symptoms themselves, they may “shed” large amounts of virus and may do so for many days, says James Campbell, a professor of pediatrics at the University of Maryland School of Medicine.

    Children had a virus in their secretions for six to 22 days or an average of 12 days. “Shedding virus doesn’t always mean you’re able to transmit the virus”, he notes. It is still important to consider that prolonged shedding of high viral loads from children is still a risky combination within the home since the majority of transmission occurs within a home-like confined environment.

    A strong, but unknown viral effect

    While the true viral capacity is unknown at this moment, it is theorized that COVID-19 is more than the seasonal flu but less than other viruses. The average number of people to which a single infected person will transmit the virus, or Ro, range from as low as 1.5 to a high of 3.0

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    Newer analysis suggests that this viral rate is declining. According to Nobel Laureate and biophysicist Michael Levitt, the infection rate is declining –

    “Every coronavirus patient in China infected on average 2.2 people a day — spelling exponential growth that can only lead to disaster. But then it started dropping, and the number of new daily infections is now close to zero.” He compared it to interest rates again: “even if the interest rate keeps dropping, you still make money. The sum you invested does not lessen, it just grows more slowly. When discussing diseases, it frightens people a lot because they keep hearing about new cases every day. But the fact that the infection rate is slowing down means the end of the pandemic is near.”

    What about asymptomatic spread?

    The majority of cases see symptoms within a few days, not two weeks as originally believed.

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    On true asymptomatic spread, the data is still unclear but increasingly unlikely. Two studies point to a low infection rate from pre-symptomatic and asymptomatic individuals. One study said 10% of infections come from people who don’t show symptoms, yet. Another WHO study reported 1.2% of confirmed cases were truly asymptomatic. Several studies confirming asymptotic spread have ended up disproven. It is important to note there is a difference between “never showing symptoms” and “pre-symptomatic” and the media is promoting an unproven narrative. Almost all people end up in the latter camp within five days, almost never the former. It is very unlikely for individuals with COVID-19 to never show symptoms. WHO and CDC claim that asymptomatic spread isn’t a concern and quite rare.

    Iceland is leading the global in testing its entire population of ~300,000 for asymptomatic spread, not just those that show symptoms. They randomly tested 1,800 citizens who don’t show symptoms and, as far as they knew, were not exposed to positive individuals. Of this sample, only 19 tested positive for COVID-19, or 1.1% of the sample.

    Obviously, this type of viral spread is the most concerning; however based on the level of media attention and the global size of positive infections, it seems more probable we keep looking for a COVID-19 viral trait that doesn’t exist.

    Another way of looking at virality and asymptotic spread is the number of flight attendants, airport staff, or pilots that have tested positive for COVID-19. Out of the thousands of flights since November 2019, only a handful of airport and airline staff have tested positive (such as AA pilot, some BA staff, and several TSA employees).

    Outside of medical and hospital staff, these individuals are in greatest contact with infected persons in confined spaces. Despite having no protective gear and most likely these people were asymptomatic, airline and airport staff aren’t likely to catch COVID-19 compared to the rest of the population. Those employed in the travel sector are infected at a lower rate than the general population or healthcare workers.

    “We still believe, looking at the data, that the force of infection here, the major driver, is people who are symptomatic, unwell, and transmitting to others along the human-to-human route,” Dr. Mike Ryan of WHO Emergencies Program.

    If the symptoms are so close to other less fatal coronaviruses, what is the positivity rate of those tested?

    93% of people who think they are positive aren’t

    Looking at the success in S. Korea and Singapore, the important tool in our war chest is measurement. If we are concerned about the general non-infected population, what is the probability those who show symptoms actually test positive? What is the chance that the cough from your neighbor is COVID-19? This “conversion rate” will show whether or not you have a cold (another coronavirus) or heading to isolation for two weeks. Global data shows that ~95% of people who are tested aren’t positive. The positivity rate varies by country.

    • UK: 7,132 concluded tests, of which 13 positive (0.2% positivity rate).

    • UK: 48,492 tests, of which 1,950 (4.0% positivity rate)

    • Italy: 9,462 tests, of which 470 positive (at least 5.0% positivity rate).

    • Italy: 3,300 tests, of which 99 positive (3.0% positivity rate)

    • Iceland: 3,787 tests, of which 218 positive (5.7% positive rate)

    • France: 762 tests, of which 17 positive, 179 awaiting results (at least 2.2% positivity rate).

    • Austria: 321 tests, of which 2 positive, awaiting results: unknown (at least 0.6% positivity rate).

    • South Korea: 66,652 tests with 1766 positives 25,568 awaiting results (4.3% positivity rate).

    • United States: 445 concluded tests, of which 14 positive (3.1% positivity rate).

    In the US, drive-thru testing facilities are being deployed around the nation. Gov. Cuomo of NY released initial data from their drive-thru testing. Out of the 600~ that was tested in a single day, ~7% were positive. Tested individuals actively show symptoms and present a doctor’s note. This result is similar to public tracking on US nationwide positivity rate.

    University of Oxford’s Our World in Data attempts to track public reporting on individuals tested vs positive cases of COVID-19. For the US, it estimates 14.25% of those tested are positive.

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    Last week, the US was significantly behind in testing, near the bottom of all countries worldwide. As of March 20th, a week later, the US is much closer to other G8 and European countries, but there is a long way to go.

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    Based on the initial results and the results from other countries, the total number of positive COVID-19 cases will increase as testing increases, but the fatality rate will continue to fall and the severity case mix will fall.

    In general, the size of the US population infected with COVID-19 will be much smaller than originally estimated as most symptomatic individuals aren’t positive. 93% — 99% have other conditions.

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    Globally, the US has a long way to go to catch up in testing. As testing expands, the total number of cases will increase, but the mild to severe case ratio will decline dramatically.

    1% of cases will be severe

    Looking at the whole funnel from top to bottom, ~1% of everyone who is tested for COVID-19 with the US will have a severe case that will require a hospital visit or long-term admission.

    Globally, 80–85% of all cases are mild. These will not require a hospital visit and home-based treatment/ no treatment is effective.

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    As of mid-March, the US has a significantly lower case severity rate than other countries. Our current severe caseload is similar to South Korea. This data has been spotty in the past; however, lower severity is reflected in the US COVID-19 fatality rates (addressed later).

    Early reports from CDC, suggest that 12% of COVID-19 cases need some form of hospitalization, which is lower than the projected severity rate of 20%, with 80% being mild cases.

    For context, this year’s flu season has led to at least 17 million medical visits and 370,000 hospitalizations (0.1%) out of 30–50 million infections. Recalling that only comparing aggregate total cases isn’t helpful, breaking down active cases on a per-capita basis paints a different picture on severity. This is data as of March 20th, 2020.

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    Declining fatality rate

    As the US continues to expand testing, the case fatality rate will decline over the next few weeks. There is little doubt that serious and fatal cases of COVID-19 are being properly recorded. What is unclear is the total size of mild cases. WHO originally estimated a case fatality rate of 4% at the beginning of the outbreak but revised estimates downward 2.3% — 3% for all age groups. CDC estimates 0.5% — 3%, however stresses that closer to 1% is more probable. Dr. Paul Auwaerter estimated 0.5% — 2%, leaning towards the lower end. A paper released on March 19th analyzed a wider data set from China and lowered the fatality rate to 1.4%. This won’t be clear for the US until we see the broader population that is positive but with mild cases. With little doubt, the fatality rate and severity rate will decline as more people are tested and more mild cases are counted.

    Higher fatality rates in China, Iran, and Italy are more likely associated with a sudden shock to the healthcare system unable to address demands and doesn’t accurately reflect viral fatality rates. As COVID-19 spread throughout China, the fatality rate drastically fell outside of Hubei. This was attributed to the outbreak slowing spreading to several provinces with low infection rates.

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    John P.A. Ioannidis is professor of medicine, of epidemiology and population health, of biomedical data science, and of statistics at Stanford University and co-director of Stanford’s Meta-Research Innovation Center recently wrote about fatality rates and how our current instrumentation is leading to faulty policy solutions:

    “The one situation where an entire, closed population was tested was the Diamond Princess cruise ship and its quarantine passengers. The case fatality rate there was 1.0%, but this was a largely elderly population, in which the death rate from Covid-19 is much higher.

    Projecting the Diamond Princess mortality rate onto the age structure of the U.S. population, the death rate among people infected with Covid-19 would be 0.125%. But since this estimate is based on extremely thin data — there were just seven deaths among the 700 infected passengers and crew — the real death rate could stretch from five times lower (0.025%) to five times higher (0.625%). It is also possible that some of the passengers who were infected might die later, and that tourists may have different frequencies of chronic diseases — a risk factor for worse outcomes with SARS-CoV-2 infection — than the general population. Adding these extra sources of uncertainty…”

    “Reasonable estimates for the case fatality ratio in the general U.S. population vary from 0.05% to 1%.”

    Looking at the US fatality, the fatality rate is drastically declining as the number of cases increases, halving every four or five days. The fatality rate will eventually level off and plateau as the US case-mix becomes apparent.

    • 4.06% March 8 (22 deaths of 541 cases)

    • 3.69% March 9 (26 of 704)

    • 3.01% March 10 (30 of 994)

    • 2.95% March 11 (38 of 1,295)

    • 2.52% March 12 (42 of 1,695)

    • 2.27% March 13 (49 of 2,247)

    • 1.93% March 14 (57 of 2,954)

    • 1.84% March 15 (68 of 3,680)

    • 1.90% March 16 (86 of 4,503)

    • 1.76% March 17 (109 of 6,196)

    • 1.66% March 18 (150 of 9,003)

    • 1.51% March 19th (208 of 13,789)

    • 1.32% March 20th (256 of 19,383)

    Source: Worldometers.info

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    Mapped against other countries, our fatality rate and case-mix are following a similar pattern to South Korea which is a good sign, a supposed model of how to manage COVID-19.

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    Here are deaths weighted by the total number of cases as of March 20th, 2020. Ranked by the total number of cases, our death rate is closer to South Korea’s than Spain’s or Italy’s.

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    The initial higher fatality rate for the US is trending much lower than originally estimated.

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    A study of about half deaths within the US (154 of 264), almost all fit a similar demographic profile as the other global ~11,000 fatalities.

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    Another analysis by Nature, comparing the fatality rate (since revised down) and infectious rate of COVID-19 to other illnesses. COVID-19 is now within range of its other sisters of less potent coronaviruses.

    As the global health community continues to gather and report data, the claim that “COVID-19 isn’t just like the flu” (though still severe) is looking less credible as fatality rates continue to decline and measuring of mild cases increases.

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    It is important to consider case-mix when looking at fatality rates. The fatality rate is significantly higher for patients with an underlying condition.

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    The fatality rates by underling condition mimics the rise in the average fatality rate with those with underlying conditions who get the seasonal flu.

    • Pneumonia and influenza: 1.53% — 1.93%

    • Chronic lower respiratory disease: 1.48% — 1.93%

    • All respiratory causes: 3.04% — 4.14%

    • Heart disease: 3.21% — 4.4%

    • Cancer: 0.68% — 1.05%

    • Diabetes: 0.26% — 0.39%

    • For all underlying conditions: 10.17% — 13.67%.

    Comparing case-mix across countries with a wide range of fatality (China and Italy) and those with low fatality rates (S. Korea) reveals a stark difference in age; therefore, underlying conditions also vary significantly across countries. These two factors contribute the most to a country’s fatality rate.

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    Source: Goldman Sachs

    Divided by most at risk and low risk, Italy had significantly more cases of high at-risk patients than Germany or Korea

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    Source: https://medium.com/@andreasbackhausab/coronavirus-why-its-so-deadly-in-italy-c4200a15a7bf

    Based on an initial CDC study of 2,449 COVID-19 cases (almost half of current US cases have missing demographic data), the United States case-mix looks more like S. Korea and Germany rather than China or Italy. Approximately 69% of COVID-19 cases are in the lower at-risk population of under 65, while 31% are older than 65 higher risk population.

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    This suggests the US will experience a declining fatality rate; however, the US has over 100 million adults with underlying and chronic illnesses that will negatively impact our fatality rate.

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    An older population skew within the infected population explains most of the disparity in fatality rates between high and low countries. According to a study of the fatalities of COVID-19 cases in Italy, 99% of all deaths had an underlying pathology. Only 0.8% had no underlying condition.

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    Most of those infected in Italy were over the age of 60, but the median age of a fatality was 80. All of Italy’s fatality under the age of 40 were males with serious pre-existing medical conditions.

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    This doesn’t factor in a wide variance in healthcare capacity, such as hospital beds per 1,000 citizens which could affect health outcomes; however, this doesn’t seem to be highly correlated with fatality rates at this moment.

    • S. Korea — 11.5

    • Germany — 8.3

    • China — 4.2

    • Italy — 3.4

    • United States — 2.9

    • Singapore — 2.4

    So what should we do?

    The first rule of medicine is to do no harm.

    Local governments and politicians are inflicting massive harm and disruption with little evidence to support their draconian edicts. Every local government is in a mimetic race to one-up each other in authoritarian city ordinances to show us who has more “abundance of caution”. Politicians are competing, not on more evidence or more COVID-19 cures but more caution. As unemployment rises and families feel unbearably burdened already, they feel pressure to “fix” the situation they created with even more radical and “creative” policy solutions. This only creates more problems and an even larger snowball effect. The first place to start is to stop killing the patient and focus on what works.

    Start with basic hygiene

    The most effective means to reduce spread is basic hygiene. Most American’s don’t wash their hands enough and aren’t aware of how to actually wash your hands. Masks aren’t particularly effective if you touch your eyes with infected hands. Ask businesses and public places to freely distribute disinfectant wipes and hand sanitizer to the customers and patrons. If you get sick or feel sick, stay home. These are basic rules for preventing illness that doesn’t require trillions of dollars.

    More data

    The best examples of defeating COVID-19 requires lots of data. We are very behind in measuring our population and the impact of the virus but this has turned a corner the last few days. The swift change in direction should be applauded. Private companies are quickly developing and deploying tests, much faster than CDC could ever imagine. The inclusion of private businesses in developing solutions is creative and admirable. Data will calm nerves and allow us to utilize more evidence in our strategy. Once we have proper measurement implemented (the ability to test hundreds every day in a given metro), let’s add even more data into that funnel — reopen public life.

    Open schools

    Closing schools is counterproductive. The economic cost for closing schools in the U.S. for four weeks could cost between $10 and $47 billion dollars (0.1–0.3% of GDP) and lead to a reduction of 6% to 19% in key health care personnel.

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    CDC’s guidance on closing schools specifically for COVID-19 –

    Available modeling data indicate that early, short to medium closures do not impact the epi curve of COVID-19 or available health care measures (e.g., hospitalizations). There may be some impact of much longer closures (8 weeks, 20 weeks) further into community spread, but that modeling also shows that other mitigation efforts (e.g., handwashing, home isolation) have more impact on both spread of disease and health care measures. In other countries, those places who closed school (e.g., Hong Kong) have not had more success in reducing spread than those that did not (e.g., Singapore).

    Based on transmission evidence children are more likely to catch COVID-19 in the home than at school. As well, they are more likely to expose older vulnerable adults as multi-generational homes are more common. As well, the school provides a single point of testing a large population for a possible infection in the home to prevent community spread.

    Open up public spaces

    With such little evidence of prolific community spread and our guiding healthcare institutions reporting the same results, shuttering the local economy is a distraction and arbitrary with limited accretive gain outside of greatly annoying millions and bankrupting hundreds of businesses. The data is overwhelming at this point that community-based spread and airborne transmission is not a threat. We don’t have significant examples of spreading through restaurants or gyms. When you consider the environment COVID-19 prefers, isolating every family in their home is a perfect situation for infection and transmission among other family members. Evidence from South Korea and Singapore shows that it is completely possible and preferred to continue on with life while making accommodations that are data-driven, such as social distancing and regular temperature checks.

    Support business and productivity

    The data shows that the overwhelming majority of the working population will not be personally impacted, both individually or their children. This is an unnecessary burden that is distracting resources and energy away from those who need it the most. By preventing Americans from being productive and specializing at what they do best (their vocation), we are pulling resources towards unproductive tasks and damaging the economy. We will need money for this fight.

    At this rate, we will spend more money on “shelter-in-place” than if we completely rebuilt our acute care and emergency capacity.

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    Source: https://www.macrobond.com/posts/blog-central-banks-go-big-covi-19-market-crash-crisis/

    Americans won’t have the freedom to go help those who get sick, volunteer their time at a hospital, or give generously to a charity. Instead, big government came barrelling in like a bull in a china shop claiming they could solve COVID-19. The same government that continued to not test incoming passengers from Europe and who couldn’t manufacture enough test kits with two months’ notice.

    Let Americans be free to be a part of the solution, calling us to a higher civic duty to help those most in need and protect the vulnerable. Not sitting in isolation like losers.

    People fear what the government will do, not an infection

    Rampant hoarding and a volatile stock market aren’t being driven by COVID-19. An overwhelming majority of American’s don’t believe they will be infected. Rather hoarding behavior strongly demonstrates an irrational hysteria, from purchasing infective household masks to buying toilet paper in the troves. This fear is being driven by government action, fearing what the government will do next. In South Korea, most citizens didn’t fear infection but the government and public shaming. By presenting a consistent and clear plan that is targeted and specific to those who need the most help will reduce the volatility and hysteria. A sign the logic behind these government actions aren’t widely accepted, nor believed as rational by the American people is the existence itself of the volatility and hysteria. Over three-fourths of Americans are scared not of COVID-19 but what it is doing to our society.

    In CDC’s worst-case scenario, CDC expects more than 150–200 million infections within the US. This estimate is hundreds of times bigger than China’s infection rate (30% of our population compared to 0.006% in China). Does that really sound plausible to you? China has a sub-par healthcare system, attempted to suppress the news about COVID-19 early on, a lack of transparency, an authoritarian government, and millions of Chinese traveling for the Lunar Festival at the height of the outbreak. In the US, we have a significant lead time, several therapies proving successful, transparency, a top tier healthcare system, a democratic government, and media providing ample accountability.

    Infection isn’t our primary risk at this point.

    Expand medical capacity

    COVID-19 is a significant medical threat that needs to be tackled, both finding a cure and limiting spread; however, some would argue that a country’s authoritarian response to COVID-19 helped stop the spread. Probably not. In South Korea and Taiwan, I can go to the gym and eat at a restaurant which is more than I can say about San Francisco and New York, despite a significantly lower caseload on a per-capita basis.

    None of the countries the global health authorities admire for their approach issued “shelter-in-place” orders, rather they used data, measurement,and promoted common sense self-hygiene.

    Does stopping air travel have a greater impact than closing all restaurants? Does closing schools reduce the infection rate by 10%? Not one policymaker has offered evidence of any of these approaches. Typically, the argument given is “out of an abundance of caution”. I didn’t know there was such a law. Let’s be frank, these acts are emotionally driven by fear, not evidence-based thinking in the process of destroying people’s lives overnight. While all of these decisions are made by elites isolated in their castles of power and ego, the shock is utterly devastating Main Street.

    A friend who runs a guy will run out of cash in a few weeks. A friend who is a pastor let go of half of his staff as donations fell by 60%. A waitress at my favorite breakfast place told me her family will have no income in a few days as they force the closure of restaurants. While political elites twiddle their thumbs with models and projections based on faulty assumptions, people’s lives are being destroyed with Marxian vigor. The best compromise elites can come up with is $2,000.

    Does it make more sense for us to pay a tax to expand medical capacity quickly or pay the cost to our whole nation of a recession? Take the example of closing schools which will easily cost our economy $50 billion. For that single unanimous totalitarian act, we could have built 50 hospitals with 500+ beds per hospital.

    Eliminate arcane certificate of need and expand acute medical capacity to support possible higher healthcare utilization this season.

    Don’t let them forget it and vote

    These days are precarious as Governors float the idea of martial law for not following “social distancing”, as well as they liked while they violate those same rules on national TV. Remember this tone is for a virus that has impacted 0.004% of our population. Imagine if this was a truly existential threat to our Republic.

    The COVID-19 hysteria is pushing aside our protections as individual citizens and permanently harming our free, tolerant, open civil society. Data is data. Facts are facts. We should be focused on resolving COVID-19 with continued testing, measuring, and be vigilant about protecting those with underlying conditions and the elderly from exposure. We are blessed in one way, there is an election in November. Never forget what happened and vote.

    You may ask yourself. Who is this guy? Who is this author? I’m a nobody. That is also the point. The average American feels utterly powerless right now. I’m an individual American who sees his community and loved ones being decimated without given a choice, without empathy, and while the media cheers on with high ratings.

    When this is all over, look for massive confirmation bias and pyrrhic celebration by elites. There will be vain cheering in the halls of power as Main Street sits in pieces. Expect no apology, that would be political suicide. Rather, expect to be given a Jedi mind trick of “I’m the government and I helped.”

    The health of the State will be even stronger with more Americans dependent on welfare, another trillion stimulus filled with pork for powerful friends, and a bailout for companies that charged us $200 change fees for nearly a decade. Washington DC will be fine. New York will still have all of the money in the world. Our communities will be left with nothing but a shadow of the longest bull market in the history of our country.


    Tyler Durden

    Sat, 03/21/2020 – 19:40

  • Trump Rages Against Buybacks, But It Was His Policies That Unleashed The Buyback Tsunami
    Trump Rages Against Buybacks, But It Was His Policies That Unleashed The Buyback Tsunami

    There is a distinct irony in Trump raging at company executives for announcing and executing trillions in buybacks in the past few years, most of which were accompanied by a tremendous increase in debt particularly in the lowest rated investment grade space and which now threatens to crash the entire US credit market: it was Trump’s tax policies that unleashed the wave of buybacks in the first place!

    In recent days, amid the broad populist outcry against companies – such as Boeing and most US airline companies – that feasted on buybacks for years, sending their stock price and total debt to all time highs, only to demand a taxpayer buyback now that they actually need the liquidity, liquidity they would have had access to if only they had invested for a rainy day instead of making their shareholders richer by repurchasing stock, President Trump has taken the lead in the blowback against buybacks when on Thursday he said that he would not oppose barring companies that receive federal assistance during the coronavirus pandemic from conducting stock buybacks.

    “It takes many, many people in this case to tango, but as far as I’m concerned conditions like that would be okay with me,” Trump said during a White House press conference adding that “he was never happy with that.“

    https://platform.twitter.com/widgets.js

    In the meantime, many US companies scrambling to preserve cash, have already “generously” announced they would halt buybacks, such as most US banks, although in light of the current economic environment that has seen much of the US economy grind to a halt with banks such as Goldman now expecting an unprecedented 24% drop in Q2 GDP – nearly double the peak hit during the Great Depression – the reality is that most companies have no choice but to cut back on anything but absolutely critical spending to keep the lights on. Spending on buybacks and dividends certainly is not included here.

    Sensing the shift in public mood which may preclude a bailout, the CEOs of the largest US airlines asked Congress Saturday for urgent help, and used the veiled threat of laying off thousands of workers among the industry’s 750,000 employees if their demands are not met.

    “Unless worker payroll protection grants are passed immediately, many of us will be forced to take draconian measures such as furloughs,” the CEOs said in a letter to leaders of both houses of Congress distributed by the Airlines for America trade group. “The breadth and immediacy of the need to act cannot be overstated,” it said. “It is urgent and unprecedented.”

    Airlines for America represents American Airlines, United Airlines, Delta Air Lines and Southwest Airlines as well as shippers FedEx and UPS.

    “On behalf of 750,000 airline professionals and our nation’s airlines, we respectfully request Congress to continue to move expeditiously to pass a bipartisan proposal that includes a combination of worker payroll protection grants, loans and loan guarantees and tax measures. Time is running out.”

    The signatories appeared to be trying, in part, to counter recent negative publicity over reports that in recent years the airlines, while taking in billions in profits, used stock buybacks and other measures to reward shareholders rather than putting money into workers’ salaries or a rainy-day fund.

    President Donald Trump seemed to allude to those reports during Saturday’s White House briefing on the coronavirus, saying of plans to help US companies, “I want money to be used for workers and keeping businesses open, not buybacks.

    “I am strongly recommending a buyback exclusion. You cannot buy back your stock. You can’t take a billion dollars of the money and buy back your stock.”

    Ah, but just four years ago you told them something totally different…

    In late 2016, when the first glimpse of Trump’s tax plan emerged and when we learned that it would also include a foreign profit repatriation holiday allowing companies to bring back fund held offshore at a nominal tax rate, we wrote in article titled “How The S&P 500 Will Spend $2.6 Trillion In Cash Next Year” and said “Hint: Mostly On Stock Buybacks.“

    While the Trump administration’s contention was that companies would use this newly repatriated cash mostly on buybacks, R&D and hiring, we countered by warning that “stocks buybacks will account for the largest share of cash use by S&P 500 companies.” Furthermore, we used a Goldman projection that predicted that “of the $2.6 trillion in total cash spent by companies [in 2017], the largest bucket, or 30% of the total, will be on stock buybacks; this is the highest portion of corporate cash allocated to buybacks since 2007.“

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    In trying to explain to the Trump administration what this meant, we also said that “it goes without saying, that as more cash is allocated to shareholder payouts (buybacks, dividends), less goes to CapEx, and economic growth.“

    Alas, none of this was a consideration for the Trump admin at the time, when “President-elect Trump and House Republicans both expressed support for a one-time tax on untaxed foreign profits. In their “blueprint” of potential tax reform, House Republicans proposed an 8.75% tax on permanently reinvested overseas cash and a 3.5% tax on other untaxed foreign earnings. Mr. Trump also proposed similar tax reform during his Presidential election campaign.”

    We then concluded by predicting precisely what would happen in the subsequent 3 years, and culminate with the current crisis in which buybacks are demonized even though for the past 3 years repurchasing their stock is all most CFOs and Treasurers did to boost their stock price, to wit:

    In short, absent a formal directive from the Trump administration on explicit “use of repatriation proceeds”, which curbs or outright limits the $1,200 billion or so in estimated repatriated proceeds, from being spent on buybacks… there will be virtually no benefit to the broader economy, and instead corporate shareholders will once again reap the benefits as they have for the past 7 years, a time in which they levered up their companies to all-time highs, with the vast majority of the newly raised debt used to fund, drumroll, buybacks.

    We were right, because what happened then can only be described as an unprecedented shareholder-friendly bonanza, with companies splurging on buybacks and dividend like never before, and as we repeatedly warned, this would end in tears as companies for the first time since the financial crisis spent more on buybacks and dividends than they actually earned…

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    … yet which nobody dared to object to because as we showed last September, the sole buyer of US stocks were corporate buybacks, not institutions or retail investors, all of whom sold to the companies buying back their own shares, in the process lifting the S&P to all time highs.

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    And, it goes without saying, that as more and more companies joined the fray, with tech firms mostly responsible for the latest buyback push in recent years due to having the biggest balance sheet capacity to issue new debt as well as the cleanest cash flow…

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    … corporate cash plunged – as it was mostly used to buyback stocks which would life the stock price and allow management’s equity-linked options to vest deep in the money – even as the company’s debt soared, raising the prospects of a catastrophic outcome if and when a “black swan” event occurred.

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    Well the black swan is now here, and in retrospect, instead of spending trillions on buybacks, companies should have saved that money for when they truly needed it – such as an economic or financial crisis. But no, managements rushed to buyback record amounts of stock at the all time highs, as we pointed out last October…

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    … a spending spree that was funded mostly by – drumroll – debt…

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    … and not just any debt, but the debt most in danger of sparking a wholesale junk bond crisis and which would then become a wholesale credit crisis: the BBB rated future “fallen angels”:

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    And the biggest irony: corporate insiders such as CEOs and board members were selling stock hand over fist to their own companies, as they knew very well what was coming next.

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    In short, it is these same insiders that sold near record amounts of stock that now demand bailouts.

    It is these same companies that levered up astronomically and pursued in record buybacks that now demand bailouts.

    But in retrospect, none of this would have been able if Trump had not set the precedent he did back in late 2016 when he effectively gave companies the green light to unleash a buyback tsunami by allowing them to repatriate trillions in offshore cash without any guidance what to spend it on, and to nobody’s shock, they didn’t spent it on growth, or even deleveraging, they spent it on pushing up their own stock price.

    And since the interests of management, shareholders and Trump were all aligned – there is a reason why Trump took tremendous delight in pointing out every time the market hit an all time high which was mostly possible due to buybacks, just as there is a reason Trump pressured the Fed to cut rates, as that would allow companies to issue even more debt at ultra low rates and use the proceeds to buyback stocks – everyone, EVERYONE, was delighted by this record buybacks spree.

    Now, the party is over, and the fingerpointing and the blame games have begun.

    But before Trump slams those “greedy” corporate CEOs for doing merely what capitalism said was in their best interest, he should look in the mirror and consider who greenlighted this entire stock repurchasing bonanza.

    And since he won’t, here is some more advice, almost four years after we predicted to the dot that all of this would happen: do not bailout everyone as that would be the end of any last shred of capitalism as we know it. Instead, either force companies to sell stock to procure liquidity – you know, buybacks in reverse – or allow the US bankruptcy process to work.

    Yes, Chapter 11 is an amazing tool, one which allows companies to continue operating without having to pursue mass layoffs, while restructuring their liabilities and kicking out the existing equityholders who should get nothing, handing over the company instead to the bondholders. A leaner, meaner company, with no debt, one which would be far more viable in the world once the coronavirus panic fades away. As for those companies that don’t survive, well they should go out of business: thanks to the Fed there is now a record amount of zombie companies and “disruptors” that have no chance in hell of ever making a profit…

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    … corporations that should never have existed had it not been for the Fed’s insane monetary policies of the past decade.

    Let those companies that should fail, fail, and let capital finally find more productive uses than being forced to keep zombies alive and repurchasing the stock of companies that burn through billions in cash every year.

    Alas, this will never happen and just like in 2008 when the bailout of the banking sector set the blueprints for every future crisis, the government and the Fed will pursue a wholesale bailout of everyone as even the smartest financial advisors on Wall Street now (predictably) urge, because it’s the least painful (at least for now) and most politically self-serving thing to do.

    And then, in ten years, when the entire fiat system finally implodes in a world drowning in meaningless “money” filled with zombie companies where nobody makes a profit any more, and where every dollar in profit and quadrillions more in debt are used to repurchase the handful of stocks that still are traded, we will have one final “I told you so” moment.


    Tyler Durden

    Sat, 03/21/2020 – 19:15

  • Italy Goes Full "Wuhan", Orders Most Restrictive Lockdown Yet, As Global Case Total Passes 300k: Live Updates
    Italy Goes Full “Wuhan”, Orders Most Restrictive Lockdown Yet, As Global Case Total Passes 300k: Live Updates

    Summary:

    • Massive surge in number of deaths and cases in UK, Germany, Spain, Italy, and France
    • New York, New Jersey deaths, cases accelerate
    • Italy goes under full lockdown
    • Rikers outbreak worsens: 21 inmates
    • NY Gov Cuomo: “months, not weeks” to control virus
    • Ukraine declares total quarantine
    • Belgium sees 25% jump in cases
    • Saudi Arabia reports 10% spike
    • German gov’t ends years of fiscal restraint with 365 billion euro aid package
    • NYC airspace closed after positive Air Traffic Controller test
    • NJ declares full state lockdown; “will take action” for people not following precautions
    • FDA authorizes first 45-minute COVID-19 test
    • US Fiscal Aid package around $2 trillion (10% of GDP), Kudlow
    • Officials increasingly calling for the cancellation of the Tokyo Olympics

    *  *  *

    Update (0940ET): After one of his aides tested positive, VP Pence was tested, and as it turns out, has tested negative, along with his wife, Karen Pence.

    In other news, as New York emerges as America’s premier hot spot, the situation on Riker’s Island, the nation’s second-largest prison system, is growing increasingly dire. According to information from the city’s Board of Correction, 21 Rikers inmates, 12 jail employees and five correctional health workers have tested positive for COVID-19, up from just 8 the day before.

    Already, one worker at the complex has died. Just like the prison outbreaks in China, the virus spread rapidly from workers on the periphery to the corrections officers to the prisoners. According to the New York Times, It started with a jails investigator in an office three miles from Rikers Island. Then, a correction officer at a security checkpoint near the entrance to the jail complex got it. Hours later, it was an inmate in a crowded housing unit.

    Within days, the investigator had died and three more correction officers and two other staff members had tested positive for the coronavirus, confirming fears that the highly contagious disease had arrived in the nation’s second-largest jail system, endangering 5,300 inmates and twice as many guards.On Thursday, the jail system’s chief physician, Ross MacDonald, took to Twitter with a warning: “A storm is coming.”

    Civilian employees in the prison system were ordered to remain home for two weeks to limit the number of people entering the prisons. More controversially, visits by friends and family have been suspended, something that the inmates aren’t exactly thrilled about.

    Let’s hope they don’t react like some prisoners in Italy did.

    *  *  *

    Update (1835ET): Even after threatening Italians in some areas with serious criminal penalties for violating their stringent quarantine orders, it seems Italy’s coronavirus containment efforts have failed.

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    After reporting another shocking jump in deaths, the Italian government has gone full “Wuhan”, ordering a complete shutdown of industrial production for 15 days.

    In a speech delivered just before midnight on Saturday in Rome, Prime Minister Giuseppe Conte announced that he is ordering ALL non-essential businesses to be closed, and for Italians to stay home.

    These measures are slightly more restrictive than the current measures, which allow Italians more freedom to move about their towns and communities. They will also likely result in a much larger economic hit, as Italy’s industrial stalwarts are forced to pause operation.

    And just like that, an entire country – 60 million Italians – is now under ‘shelter in place.’

    Elsewhere, as Middle Eastern countries escalate their crackdowns, Kuwait announced that it would start imposing a curfew between 5pm and 4am due to what the government called “non-compliance with Ministry of Health’s instructions to stay indoors.” Meanwhile, the UAE has closed beaches and parks for two weeks.

    As the number of confirmed cases in Europe and North America soar, the total global case total has surpassed 300k on Saturday.

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    Finally, an interesting snippet from the FT: Researchers on multiple continents say an usual symptom has emerged in the majority of Covid-19 patients: a loss of the sense of smell.

    *  *  *

    Update (1510ET): Across Europe on Saturday, deaths accorded to COVID-19 soared, with Italy reporting a record 793 deaths on Friday, and Spain reporting another 300 cases, bringing their totals to 4,825 and 1,326.

    The UK also reported another string of deaths, as millions await a lockdown order on London, while hospitals and intensive care units in Italy and Spain are struggling to cope, despite some Madrid hotels being temporarily converted and of the Fair of Madrid, the capital’s main exhibition space.

    As we’ve mentioned before, now is a good time for coffinmakers and funeral homes in Italy.

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    But these weren’t the only states seeing a spike. The total number of cases of coronavirus in Belgium rose by over 500 in 24 hours, a 25% jump bringing its total number to 2,815. The government also reported deaths had risen to 67, an increase of 30 over the same time period. According to the FT, a spokesman for the Belgian government’s crisis center advised people to establish a clear daily routine to avoid mental health issues.

    In Ukraine, Arsen Avakov, the country’s interior affairs minister, called for a nationwide “total full quarantine,” warning that strict lockdowns and possibly martial law would soon be declared to stop the spread of the virus.

    As we mentioned earlier, Germany is set to abandon six years of fiscal restraint with a blow-out budget designed to save its economy from the brutal effects of the coronavirus pandemic of €356 billion .

    Even Saudi Arabia saw a 10% spike in cases announced on Saturday, with 48 new cases confirmed, bringing the total number in KSA to 392.

    *  *  *

    Update (1415ET): Just as Gov. Cuomo hinted earlier this week, New Jersey Gov. Phil Murphy has signed an executive order mandating that all non-essential workers living in the state stay home.

    Meanwhile, a group of European countries have reported new figures, including Spain, which announced that more than 5,000 new cases and ~300 new deaths were confirmed over the past day, increasing the total number of cases in the country by 25% to 24,926, according to the Spanish Ministry of Health.

    The death toll in the country is at 1,326.

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    Germany confirmed that it has agreed to take on over €150 billion of new debt as part of a €350 billion package of emergency measures to save its economy from the brutal effects of the coronavirus pandemic.

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    More devastating figures were released from Italy on Saturday, including announcing 793 new deaths, the highest total yet, bringing its total to 4,825, well above China’s total, and the latest in a grim string of records that has so far tracked the worst fears of epidemiologists. In total, more than 53,578 cases have been confirmed.

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    UK today saw total deaths reach 233 as the number of cases soared by more than 1000 to 5,015 from 3,983 on Friday. Italy was at that death figure on March 7. The UK patients were aged between 41 and 94 years old and all had underlying health conditions, according to NHS England. Earlier, two more deaths were recorded in Wales, bringing its total to five, and another death in Scotland, taking the number to seven. Northern Ireland has recorded one death.

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    Finally, France also just reported the biggest daily jump in covid cases, which soared by 1,847 to 14,459, while the number of deaths spiked the most yet, or 112 to 562 overnight.

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    Meanwhile, in Asia, Bangkok, Thailand’s capital, imposed a partial shutdown from Sunday as the number of confirmed cases surged past 400 with a rising number of people in critical condition. Malls in Bangkok will be closed, and shops offering food and essential services will be among the few allowed to remain open, Bangkok Governor Aswin Kwanmuang said during a press briefing on Saturday. The restrictions will begin Sunday, and continue until at least April 12, he said.

    *  *  *

    (1230ET): New cases are being reported out of New York State and NYC are being reported faster than we can keep up, as the state ramps up testing.

    NYC officials just announced that the total number of confirmed cases in the city has climbed to 7,530. An hour ago, Gov. Cuomo put the number at 6,211.

    By our count, this puts the new total cases in New York State at 11,675.

    Last night, de Blasio described NYC as the “epicenter” of the US outbreak.

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    *  *  *

    Update (1145ET): During Saturday’s press briefing, New York Gov. Andrew Cuomo made clear that he wasn’t waiting around for the military and FEMA to solve his state’s problems.

    After announcing new restrictions that closed all “non-essential” businesses and threatened fines and other punishments for any “non-essential” New York workers who violate his ‘stay at home’ order (though, of course, certain activities like buying food, medication and doctors appointments will be permitted).

    As state’s scramble to follow President Trump’s advice to try and acquire equipment through their own supply chains, Cuomo revealed that New York State had ordered 6,000 ventilators.

    He also announced that he would be traveling around the state on Saturday with state workers looking for appropriate staging areas for the Army Corp of Engineers, which is preparing to renovate buildings to prepare more space for COVID-19 patients.

    With a federal cost-sharing rate of 75%, New York State will be able to dole emergency funds out to counties, towns and cities, as well as the state’s Native American tribes. Nonprofits working in the state can also receive money if they meet certain criteria. Part of the money will pay for ‘crisis counseling’ for New Yorkers who are psychologically or physically impacted by the crisis.

    As Cuomo’s press conference was ending, the state reported another 3,254 new cases of the virus, bringing its total to 10,356, making New York State the first in the US to pass 10,000.

    Here’s a video from Cuomo’s press briefing:

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    In addition to ordering all nonessential businesses to cease operating outside the home, Cuomo ordered all people over 70 or with underlying health conditions to avoid public transportation and stay home except for solitary exercise.

    *  *  *

    For nearly a week now, New York Gov. Andrew Cuomo has been begging the White House or the Pentagon to send in the Army Corp of Engineers to quickly transform existing businesses into coronavirus hospitals where patients from the impending surge can be isolated and treated.

    If the state doesn’t quickly make up for its twin shortages of hospital beds and medical equipment, Cuomo warned, it could lead to thousands of preventable deaths.

    Now, a few days after President Trump and Defense Secretary Mark Esper dispatched a Navy hospital ship to New York to help with the outbreak, President Donald Trump formally approved FEMA aid to the state late Friday night after declaring New York the nation’s first “major disaster area” since the start of the national outbreak.

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    Billions of dollars in emergency funding are now available to help combat the outbreak in the state, FEMA said in a statement.

    “Federal funding is also available to state, tribal, and eligible local governments and certain private nonprofit organizations on a cost-sharing basis for emergency protective measures,” FEMA said in a statement.

    President Trump’s national emergency declaration earlier this month activated FEMA, and made a pot of $42 billion in disaster-relief funds available.

    The decision comes after New York City Mayor Bill de Blasio claimed that his city has become the epicenter of the national outbreak, as public health authorities in the city counted at least one coronavirus-linked death per hour on Friday.

    Between just 10 am and 6 pm, 14 people in NYC died from the virus, raising the death toll in America’s largest city to 43. It was the first time NYC’s daily death toll hit double-digits.

    NYC Health Commissioner Dr. Oxiris Barbot warned on Saturday morning that double-digit increases in deaths may become the new normal for New Yorkers, for at least a time.

    “I wouldn’t be surprised if we get to a day when we have double-digits new people dying every day,” she said at a City Hall press conference Friday afternoon.

    “With more and more cases confirmed here each day, it’s imperative that the federal government does everything within its power to stem the spread of the deadly coronavirus.”

    In another rare moment of political unity, Senate Minority Leader Chuck Schumer praised the president’s decision.

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    Yesterday, Cuomo ordered 100% of the state’s workforce to stay home, effective Sunday evening. Only essential businesses are allowed to stay open. And that’s not a request, that’s an order.

    “These are not helpful hints…they will be enforced,” as Cuomo said during his Friday press conference, as we reported.

    The latest data show 8,299 confirmed cases in New York State. And as the state runs out of hospital beds and precious ventilators, Trump is sending in the military, which is now working on plans to takeover hotels, college dormitories and sports arenas and turn them into ICU-like medical facilities, as the Daily Mail reports.

    According to the latest federal data, at least 19,624 people have been diagnosed with the virus, and at least 260 deaths have been recorded. So far, 147 people have recovered. Globally, there have been at least 275,000 diagnosed cases and more than 11,000 coronavirus-related deaths.

    With billions in federal funding flowing into New York, Trump’s decision to declare New York a “major disaster” will open up money available to eligible local and tribal governments and even nonprofits who meet the criteria, so long as they operate in areas affected by COVID-19 in New York State.

    Initially, it seemed like the outbreak was developing in the suburbs,

    Public health officials in New York State were gripped with anxiety earlier this month as a cluster of cases was confirmed in New Rochelle, including the town’s “patient zero”, a lawyer who commuted into Manhattan into his wife, also a lawyer. Both contracted the virus, kicking off a wave of infections in a Jewish community in and around New Rochelle.

    Now, it appears swift action in wealthy Westchester County has brought the outbreak under control (or so it seems, at least).

    The bigger problem now is an outbreak in Jewish communities in Brooklyn, based in the neighborhoods of Williamsburg and Borough Park. The clusters, though so far not explicitly acknowledged as such by the state, appear to be the biggest centers of infection in the city. De Blasio even admitted that Brooklyn is seeing the worst of the outbreak.

    Switzerland reported another batch of new cases, bringing its total to 6,100 infections and 56 deaths.

    As the global panic deepens, and the number of cases continues to multiply at an alarming rate, more officials are calling for the 2020 Tokyo Games to be postponed – an unprecedented event that would probably rattle confidence in global markets, at least momentarily, as the world grapples with the unprecedented situation at hand. The IOC chief rebutted these calls again Saturday morning, according to reports in the Japanese press, but it definitely makes one wonder: If things keep getting worse, how much longer can they hold off?


    Tyler Durden

    Sat, 03/21/2020 – 18:55

  • The Lockdown Of America Begins
    The Lockdown Of America Begins

    Authored by Daisy Luther via The Organic Prepper blog,

    On Thursday night, Governor Gavin Newsome took unprecedented action and locked down the entire state of California.  The following day, Governor Andrew Cuomo locked down the state of New York and Gov. J.B. Pritzker locked down the state of Illinois.

    Today, as of the time of publication, 70 million Americans are in mandatory isolation at home in the hopes of stopping – or at least slowing down – the Covid-19 virus that is beginning to spread exponentially across the country.

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    Borders between the US, Canada, and Mexico have also been closed by mutual consent between the three governments.

    While this may be necessary to curb the virus so as not to overwhelm the medical system, many Americans are feeling distinctly uneasy about their movements being restricted. Especially worrisome is the idea of the National Guard being brought in to enforce the lockdowns, as has been discussed. Somewhere, there’s a fine line between maintaining our constitutional rights and the need to stop a global pandemic.

    What do the lockdowns entail?

    In all three states, non-essential businesses will be closed and residents have been ordered to stay in their homes unless they must leave for “vital reasons.” Many of our largest cities are encompassed in the lockdown: New York City, Chicago, Los Angelos, San Francisco, and San Diego.

    All sorts of euphemisms are being used for the situation. Cuomo prefers to call this a “pause.” California is referring to this as “safer at home.” And Illinois is calling it “shelter in place.”

    But for all the nice-sounding words, it is what it is: a lockdown on a massive scale.

    California

    The most populous state in the country with 40 million residents, on March 19th, California was the first to lock down entirely and the situation will remain in effect “indefinitely.”

    “We’re going to keep the grocery stores open,” he said. “We’re going to make sure that you’re getting critical medical supplies. You can still take your kids outside, practicing common sense and social distancing. You can still walk your dog, you can still pick up food at one of our distribution centers, at a restaurant, at a drive-thru — all those things we will still be able to do.” (source)

    Newsom is confident that Californians will be cooperative.

    The order will not be enforced by law enforcement, he added.

    “I don’t believe the people of California need to be told through law enforcement that it’s appropriate just to home-isolate, protect themselves,” Newsom said. “We are confident that the people of the state of California will abide by it and do the right thing.” (source)

    However, Newsom instructed the National Guard to be on alert and has activated about “500 guard personnel to help with humanitarian work and food distribution.”

    New York

    Interestingly, only 3 days before locking down the state, Cuomo said that the effort would be ineffective.

    In New York, where coronavirus has killed 32 people, Gov. Andrew Cuomo said he has no plans to impose a statewide mandate.
    “My job is to make sure that the state has a coordinated plan and it works everywhere,” he said this week. “I don’t think shelter-in-place really works.” (source)

    However, on March 20th, the day after California locked down, he changed his mind, saying, “I want to be able to say to the people of New York — I did everything we could do. And if everything we do saves just one life, I’ll be happy.”

    “No, this is not life as usual,” New York Gov. Andrew Cuomo said as the death toll in the U.S. topped 200, with at least 35 in his state. “Accept it and realize it and deal with it.” (source)

    Cuomo has banned all businesses except grocery stores, hospitals, laundromats, gas stations, veterinarians, and doctor’s offices. Restaurants can operate on a take-out or delivery basis. Residents can go outside to walk their dogs or exercise but must maintain a 6-foot distance from others.

    And breaking the rules will have consequences.

    “These provisions will be enforced,” Mr. Cuomo said at a briefing in Albany. “These are not helpful hints.” (source)

    In New York City, police officers will patrol and begin giving out warnings on Sunday evening.

    Police Commissioner Dermot Shea said summonses and arrests would be issued as a “last resort.” (source)

    The state of New York has a population of close to 20 million people.

    Illinois

    In Illinois, Governor JB Pritzker instituted a “stay at home” order which will begin today, March 21st, and remain in effect until April 8.

    Pritzker has said that no matter how tight the lockdown becomes, “interstate highways, gas stations, grocery stores and pharmacies would remain open.” He asked people to keep this in mind when stocking up.

    “There is no need to run out and hoard food, gas and medicine,” the governor said Thursday. “Buy what you need within reason. There is enough to go around, as long as you do not hoard.” (source)

    Although Pritzker activated the National Guard earlier in the week, he says that they will not be taking quarantine enforcement roles.

    Instead, 60 service members will be deployed to establish drive-up testing sites, help with food delivery to disadvantaged families impacted by school closures and possibly prepare closed hospitals to reopen.

    The vast majority of currently activated troops are health care professionals — doctors, nurses, medical technicians — who would not be tapped for an law-enforcement assignment. (source)

    Illinois has a population of about 12.6 million people.

    Where and when will the lockdowns spread?

    Other states already have strict rules in place but are not quite “locked down.” Maryland was the first state to order “drastic actions.” Pennsylvania has closed down all non-essential businesses. Hoboken, New Jersey has instituted curfews. It’s really only a matter of time before this spreads across the country, whether by state mandates or on the federal level.

    Last week, I wrote an article about when the lockdowns would occur based on the patterns established by China and Italy. The first lockdowns occurred right on cue, on the 19th and 20th.

    We have already had some small regional lockdowns and people in quarantine after traveling, but the quarantining of large groups of people has not yet occurred in the US. YET. We are on day 50 since the initial case was diagnosed in the United States. However, the first case of community spread was on February 26, and this may be a more important marker than the first case in a country the size of ours. “Community spread” means the illness was not contracted through traceable means, like a family member with the virus or travel history to places where the illness was running rampant. So if we’re counting from the first day of community spread, the US is on day 15.

    If massive lockdowns are occurring on about day 22-23 in other countries, that means we may have 7-8 days before we see major lockdowns and quarantines here. That would put us at March 19th or 20th. We may see some early lockdowns of cities or regions where the virus is rapidly spreading like Seattle and New York City. The lockdowns in other countries expanded in about a week to encompass greater geographic areas and larger numbers of people. This would put us at approximately March 26-27th. (source)

    So if this pattern still holds true, we may see many more regional lockdowns coming within the next 5 or 6 days.

    States that already have restrictions in place, like Maryland, Pennsylvania, and New Jersey are likely to increase those restrictions next. Places with a large exponential spread like Washington state are also likely to mandate lockdowns.

    Is a national lockdown in the works?

    It depends on who you ask.

    President Trump has said as recently as yesterday that he doesn’t think that there will be a need for a national lockdown.

    Despite approval for the states’ actions, Trump said he does not think a national lockdown order will be needed, adding that other areas don’t have the same hotspots as California, New York and Washington.

    “We are working with the governors, and I don’t think we’ll ever find it necessary,” he said. (source)

    On the other hand, Dr. Anthony Fauci, the infectious disease expert for the National Coronavirus Task Force, has said for at least a week he believes stronger measures need to be taken and that he’d like to see a “dramatic reduction in activity” to curb the spread of the virus.

    Asked by CNN’s Brianna Keilar on “State of the Union” if he’d like a “national lockdown” where people are being told they need to stay home and out of restaurants and bars, Dr. Anthony Fauci, the director of the National Institute of Allergy and Infectious Disease, said he’d “like to see a dramatic diminution of the personal interaction that we see” in those places.

    “Whatever it takes to do that, that’s what I’d like to see,” Fauci added. (source)

    Given the speedy turnaround made by Governor Cuomo, it is certainly not impossible that we might see a lockdown mandated at the federal level. If you aren’t yet prepared for what this entails, check out this article and this PDF guide that is specific to the Covid-19 pandemic. If supplies are low in your area, you may be able to find some ideas for substitutes here. And finally, this article has some advice on how to prep for potential lockdown without spending any more money.

    The National Guard has been activated in many states and other Guard members are on “enhanced readiness” status. But don’t worry, all the governors assure us that they’re only there to help dispense supplies, not to enforce lockdowns.

    Numerous sources have reported being given “federal travel papers” over the past 48 hours. People working in food delivery, the medical field, distribution, and grocery stores have said under cover of anonymity that they’ve received papers from their employers to “show to the police” if they’re stopped during their travel to and from work.

    Whether our country is turning into one in which authority figures demand to see your “papers” remains to be seen.


    Tyler Durden

    Sat, 03/21/2020 – 18:25

  • "Rolling Natural Disaster" – COVID-19 Supply Chain Shock Could Trigger Global Depression 
    “Rolling Natural Disaster” – COVID-19 Supply Chain Shock Could Trigger Global Depression 

    Evidence of creaking global supply chains is fast emerging, at risk of triggering the next global depression amid the COVID-19 pandemic. 

    A supply chain crisis that began earlier this year, one that we warned from the very start, has now spread across Asia to the Middle East to Europe, and now to the Americas.

    “This is kind of a rolling natural disaster,” said Ethan Harris, head of global economic research at Bank of America. “In terms of the impact on global production, the shutdown outside of China will likely become bigger than the impact from China.”

    Harris warned that the shock to global supply chains is deep and broad and could easily last through the next quarter. He estimates that factory shutdowns in many regions could last until May.

    He describes a twin shock, one where a supply chain shock has been combined with a demand shock, culminating into a perfect storm, will likely tip many countries into recession, if not depression during the second quarter. 

    Bloomberg piecemeals current supply chain disruptions seen across the world: 

    Apple has had the most exposure to a China shutdown, with manufacturing plants in the country still operating well below full capacity in late March. Virus-related closings have hammered several of the company’s key suppliers operating in South Korea, Italy, Germany, and Malaysia. 

    In late January, Freeport-McMoRan’s CEO Richard Adkerson warned that the virus outbreak in China is a “real black swan event” for the global economy. The company’s mining operations in Peru have recently been halted. Other mining facilities in Chile, Canada, and Mongolia have also been shuttered. 

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    Across Europe, Airbus and Volkswagen AG have closed production plants amid severe virus outbreaks in Italy, Spain, Germany, France, Switzerland, and the UK. Major transportation networks on the continent have come to a standstill as nonessential travel has been banned in many regions. 

    Europe’s car industry has been absolutely devastated by virus disruptions in China and elsewhere. 

    Germany’s Schaeffler Group, a major supplier for European carmakers, announced this week that it would reduce hours for thousands of employees and slash production. 

    “As we have to reduce production in our plants in the light of the crisis, it was important to us that flexible solutions be quickly established,” said Juergen Wechsler, who represents Schaeffler workers for union IG Metall.

    Across the Atlantic, we noted as early as the start of March, that China’s supply chain meltdown reached US West Coast ports and was about to unleash economic doom on “the greatest economy ever.” Several weeks later, GDP estimates for the second quarter are apocalyptic via JPM’s chief economist Michael Feroli, expecting an unprecedented -14%, a drop the kinds of which have never before been seen.

    As the US economy grinds to a halt, General Motors Co., Ford Motor Co., and Fiat Chrysler Automobiles NV are shutting down plants, resulting in steel and aluminum manufacturers to reduce capacity as well. 

    “We have ships loading steel in Europe next week headed for the US, but will there be shipments beyond that with industry shutting down?” Anton Posner, CEO of supply-chain management and consulting company Mercury Resources, asked. “Who’s going to hold inventory if there’s no consumption?”

    As creaking supply chains are seen across the world, the second quarter will most likely be one of the biggest crashes in economic data the world has ever seen. 


    Tyler Durden

    Sat, 03/21/2020 – 18:00

  • The Luxury Of Apocalypticism
    The Luxury Of Apocalypticism

    Authored by Brendan O’Neill via Spiked-Online.com,

    The elites want us to panic about Covid-19 – we must absolutely refuse to do so…

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    People’s refusal to panic has been a great source of frustration for the establishment in recent years.

    ‘The planet is burning’, they lie, in relation to climate change, and yet we do not weep or wail or even pay very much attention. ‘I want you to panic’, instructs the newest mouthpiece of green apocalypticism, Greta Thunberg, and yet most of us refuse to do so. A No Deal Brexit would unleash economic mayhem, racist pogroms and even a pandemic of super-gonorrhoea, they squealed, incessantly, like millenarian preachers balking at the imminent arrival of the lightning bolt of final judgement, and yet we didn’t flinch. We went to work. We went home. We still supported Brexit.

    Our skittish elites have been so baffled, infuriated in fact, by our calm response to their hysterical warnings that they have invented pathologies to explain our unacceptable behaviour. The therapeutic language of ‘denialism’ is used to explain the masses’ refusal to fret over climate change. Environmentalists write articles on ‘the psychology of climate-change denial’, on ‘the self-deception and mass denial’ coursing through this society that refuses to flatter or engage with the hysteria of the eco-elites. Likewise, the refusal of voters to succumb to the dire, hollow warnings of the ferociously anti-Brexit wing of the establishment was interpreted by self-styled experts as a psychological disorder.

    ‘[This is] people taking action for essentially psychological reasons, irrespective of the economic cost’, said one professor.

    How curious.

    In the past it was hysteria that was seen as a malady of the mind. Now it is the reluctance to kowtow to hysteria, the preference for calm discussion over panic and dread, that is treated as a malady. Today, it is those who prefer reason over rashness, whether on climate change or Brexit, who are judged to be disordered. According to the new elites, their apocalypticism is normal, while our calm democratic commitment to a political project, such as Brexit, or our desire to treat pollution as a practical problem rather than as a swirling, cloudy hint of nature’s coming fury with man’s hubris and destructiveness, is mad, deranged, in need of treatment. Their End Times nervousness is good; our faith in moral reason is bad.

    This strange, fascinating tension between the apocalypticism of the intellectual and cultural elites and the scepticism of ordinary people is coming into play in the Covid-19 crisis. Of course, Covid-19 is very different to both No Deal Brexit and climate change. It is a serious medical and social crisis. In contrast, the idea that leaving the EU without a deal would be the greatest crisis to befall Britain since the Luftwaffe dropped its deadly cargo on us was nothing more than political propaganda invented from pure cloth. And the notion that climate change is an End Times event, rather than a practical problem that can be solved with tech, especially the rollout of nuclear power, is little more than the prejudice of Malthusian elites who view the very project of modernity as an intemperate expression of speciesist supremacy by mankind.

    Covid-19, on the other hand, is a real and pressing crisis. It poses a profound challenge to humankind. It requires seriousness and action to limit the number of deaths and to mitigate the economic and social costs of both the disease itself and of our strategies for dealing with it. But what ties Covid-19 to the other fashionable apocalypses of our nervous elites, including the green apocalypse and the Brexit apocalypse, is the interpretation of it through the language and ideology of the elites’ pre-existing dread, their pre-existing cultural skittishness and moral disarray. Predictably, and depressingly, Covid-19 has been folded into their narrative of horror, into their permanent state of cultural distress, and this is making the task of facing it down even harder.

    The media are at the forefront of stirring up apocalyptic dread over Covid-19. In Europe, there is also a performative apocalypticism in some of the more extreme clampdowns on everyday life and social engagement by the political authorities, in particular in Italy, Spain and France. Many governments seem to be driven less by a reasoned, evidence-fuelled strategy of limiting both the spread of the disease and the disorganisation of economic life, than by an urge to be seen to be taking action. They seem motivated more by an instinct to perform the role of worriers about apocalypse, for the benefit of the dread-ridden cultural elites, rather than by the responsibility to behave as true moral leaders who might galvanise the public in a collective mission against illness and a concerted effort to protect economic life.

    A key problem with this performative apocalypticism is that it fails to think through the consequences of its actions. So obsessed are today’s fashionable doom-predictors with offsetting what they see as the horrendous consequences of human behaviour – whether it’s our polluting activities or our wrong-headed voting habits – that they fail to factor in the consequences of their own agenda of fear. Greens rarely think about the devastating consequences of their anti-growth agenda on under-developed parts of the world. The Remainer elite seemed utterly impervious to warnings that their irrational contempt for the Leave vote threatened the standing of democracy itself. And likewise, the performative warriors against Covid-19 seem far too cavalier about the longer-term economic, social and political consequences of what they are doing.

    First, there is the potential health consequences. Is suppression of the disease really better than mitigation? The suppression of disease preferred by China, in very authoritarian terms, or by Italy and France, in less authoritarian terms, may look successful in the short term, but the possibility of the disease’s return, in an even more virulent form, is very real. Likewise, entire economies of everyday life have been devastated already by the severity of government action in Europe. Hundreds of thousands of people in Italy and Ireland have lost their jobs already, in the night-time, hotel and entertainment sectors in particular. That is a social and health cost, too: job loss can lead to the loss of one’s home, the breakdown of one’s marriage, and to a palpable and destructive feeling of social expediency. As to keeping elderly people indoors for months on end, as is now being proposed in the UK, it is perfectly legitimate to ask whether this poses an even greater threat to our older citizens’ sense of personal and social wellbeing than their taking their chances with a disease that is not a death sentence for older people (though it impacts on them harder than it does on the young).

    The point is, there is such a thing as doing too little and also such a thing as doing too much. Doing too little against Covid-19 would be perverse and nihilistic. Society ought to devote a huge amount of resources, even if they must be commandeered from the private sector, to the protection of human life. But doing too much, or acting under the pressure to act rather than under the aim of coherently fighting disease and protecting people’s livelihoods, is potentially destructive, too. People need jobs, security, meaning, connection. They need a sense of worth, a sense of social solidarity, a sense of belonging. To threaten those things as part of a performative ‘war’ against what ought to be treated as a health challenge rather than as an End Times event would be self-defeating and utterly antithetical to the broader aim of protecting our societies from this novel new threat. To decimate the stuff of human life in the name of saving human life is a questionable moral approach.

    That the practical challenge posed by this new sickness has been collapsed into the elites’ pre-existing culture of misanthropic dread is clear from some of the commentary on Covid-19. The language of ‘war’ gives Covid-19 a sentience it of course does not deserve, accentuating the idea that this is not just an illness but a fin-de-siècle menace. This illness is being interpreted as a warning. It has been speedily refashioned as a metaphor for our weakness in the face of nature. It ‘has come to tell us that we are not the kings of the world’, says one headline. This malady is blowback for ‘our foolishness, our rapacity’, says Fintan O’Toole. We must now ‘learn the humility of survivors’, he says, cynically using this crisis to seek to diminish the presumed specialness of humankind. ‘Coronavirus is an indictment of our way of life’, says a headline in the Washington Post, echoing the way that natural phenomena are constantly weaponised by apocalyptic greens to serve as judgements against the temerity of the modernising human race.

    Here, we cut to the heart of the apocalyptic mindset of the modern elites. Their dread over natural calamities or novel new illnesses is not driven by the actual facts about these things, far less by the desire to overcome them through the deployment of human expertise and scientific discovery. Rather, it speaks to their pre-existing moral disorientation, their deep loss of faith in the human project itself. It is their downbeat cultural convictions that draws them to apocalypticism as surely as a light draws in moths. In her essay on the AIDS panic of the late 1980s, when that sexually transmitted disease was likewise imagined as a portent of civiliational doom, Susan Sontag talked about the West’s widespread ‘sense of cultural distress or failure’ that leads it to search incessantly for an ‘apocalyptic scenario’ and for ‘fantasies of doom’. There is a ‘striking readiness of so many to envisage the most far-reaching of catastrophes’, she wrote. It wasn’t so much ‘Apocalypse Now’, said Sontag, as ‘Apocalypse From Now On’.

    How perspicacious that was. From AIDS to climate change, from swine flu to Covid-19, it has been one apocalyptic scenario after another. The irony is that the elites who readily envisage catastrophe think they are showing how seriously they take genuine social and medical challenges, such as Covid-19. In truth, they demonstrate the opposite. They confirm that they have absolved themselves of the reason and focus required for confronting threats to our society. It isn’t their apocalypticism that captures the human urge to solve genuine problems – it is our anti-apocalypticism, our calmness, our insistence that resources and attention be devoted to genuine challenges without disrupting people’s lives or the economic health of our societies.

    ‘I want you to panic’, they say. But we don’t. And we shouldn’t. Apocalypticism is a luxury of the new elites for whom crises are often little more than opportunities for the expression of their decadent disdain for modern society. To the rest of us, apocalypticism is a profound problem. It threatens to spread fear in our communities, it causes us to lose our jobs, it mitigates against economic growth, and it harms democracy itself.

    Resisting the apocalypticism of the comfortable doom-mongers who rule over us is unquestionably the first step to challenging Covid-19 and preserving society for the decades after this illness has wreaked its disgraceful impact.


    Tyler Durden

    Sat, 03/21/2020 – 17:35

  • Watch How A Coronavirus Test Is Administered: "Awful, I Wish There Was A Better Way"
    Watch How A Coronavirus Test Is Administered: “Awful, I Wish There Was A Better Way”

    The below videos of coronavirus tests being administered could be the most immediately convincing reason for every American to self-isolate and dramatically limit their potential exposure. 

    When earlier this week when President Trump was asked about his own experience being tested after potential exposure via the Brazilian presidential delegation’s March 7 visit to Mar-a-Lago, Trump said candidly it’s “not something I want to do every day.”

    But many will certainly see the remarks as significantly understated, given the test requires a no doubt deeply unpleasant ten seconds or more swab deep inside a person’s nasal cavity (sometimes multiple swabs are done). 

    At this point over 100,000 have now been tested across the US, with over 18,500 confirmed for the virus.

    The test is done with a nasopharyngeal swab, which is inserted into a patient’s nose, twisted around and then removed quickly.

    For a particularly unpleasant and disturbing description, see the following: 

    It “felt like I was being stabbed in the brain,” one TikTok user wrote in a caption of a video showing her getting tested in her car. “It’s awful. I’m sorry,” the health-care worker who administered the test says. “I wish there was a better way to do it.”

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    Though it’s actually similar to a standard Flu test, also unpleasant, the swab goes much deeper into the nose and it appears almost down the throat. 

    Watching the myriad of videos of tests now appearing on social media could be the surest way to convince most Americans to temporarily stay indoors and avoid non-essential trips to public spaces. 


    Tyler Durden

    Sat, 03/21/2020 – 17:10

  • The Debt Brake Finally Breaks: "Austere" Germany To Issue €356BN In New Debt, Amounting To 10% Of GDP
    The Debt Brake Finally Breaks: “Austere” Germany To Issue €356BN In New Debt, Amounting To 10% Of GDP

    On the same day that Larry Kudlow hinted that the US fiscal stimulus has now grown in size to $2 trillion, or around 10% of US GDP, Germany’s fascination with a balanced budget, aka the “black zero” brought about by the country’s bitter memories of Weimar hyperinflation, ended with a whimper when Angela Merkel announced on Saturday that Germany would issue or guarantee debt amounting to  €356 billion as part of the country’s emergency response to fight the coronavirus.

    The amount, which is equivalent to to 10% of the country’s GDP, is similar in size to China’s fiscal response during the global financial crisis, which at the time was 9.7% of China’s GDP.

    Finance minister Olaf Scholz will also present the German cabinet with plans to create a new €500bn bailout fund to rescue companies hit by the outbreak, according to three people familiar with the plans.

    The anchor of the fiscal stimulus package will be over €150bn in new debt issuance as part of what the FT dubbed a “sweeping package of emergency measures to save its economy from the brutal effects of the coronavirus pandemic”, in what amounts to a radical break with the strict “black zero” fiscal policies of the past for which Germany had earned the nickname of the “austere” ruler of the Eurozone, and which helped push German debt to record low yields.

    At a cabinet meeting on Monday, Scholz will present plans for a €156bn supplementary budget for 2020 and a new €100bn economic stabilisation fund, which will be known in German as the WSF, that can take direct equity stakes in impaired companies, an analog of which will soon be introduced in the US as well as part of the impending bailout of the airline/hotel/restaurant/movie theater sector. It will also be equipped with €400bn in state guarantees to underwrite the debts of companies affected by the turmoil, bringing its total firepower to €500bn.

    Finally, Scholz also plans a €100bn government loan to the state development bank, KfW, which has been empowered to provide unlimited cash to businesses struggling with the fallout from the pandemic. Taken together, the supplementary budget, plus the €100BN for the WSF and the €100BN loan to the KfW amount to €356BN — or about 10% of Germany’s GDP.

    According to the FT, the WSF will be in effect be a “reactivation” of Soffin, a government-backed vehicle set up in 2009 to bail out troubled banks. Soffin currently manages the government’s 15.6% stake in Commerzbank, which it is still holding since the bank’s rescue during the global financial crisis 12 years ago. We can only wonder what crap this fund will hold in another 12 years.

    The massive bailout fund, which will not only underwrite companies’ debts but also recapitalize those experiencing financial difficulties due to the coronavirus turmoil, effectively paving the way for a wave of partial state takeovers.

    Just as the government helped the banks after the collapse of Lehman Brothers, “we are now prepared to provide equity for the real economy,” Scholz told German radio on Friday. The state had to help companies “that employ an incredible number of men and women and which all of a sudden have no business.”

    In effect, what Germany is doing is unleashing a massive quasi nationalization of every industry, with the hope of preserving businesses and avoiding a firesale of insolvent assets, and as such the WSF could presage an extraordinary intervention by the state in the private sector. “We will not allow a bargain sale of German economic and industrial interests,” economic affairs minister Peter Altmaier said on Friday. “There should be no taboos. Temporary state aid for a limited period, up to and including shareholdings and takeovers, must be possible.”

    While it is now officially dead, Germany’s addiction to the “schwarze Null” and aversion to new debt was facing mounting  criticism even in the month before the coronavirus pandemic first struck: for months, leading economists both at home and abroad have been urging the government to take advantage of low interest rates to take on new debt and invest in Germany’s crumbling infrastructure.

    Yet since the full scale of the outbreak became clear, Merkel has stressed that the survival of the German economy was a far bigger priority to her than her commitment to the black zero.

    “We’re doing whatever is necessary,” she said on March 11. “And we won’t be asking every day what it means for our deficit.”

    In addition to passing the supplementary budget and setting up the WSF, on Monday German ministers will meet to loosen one of the country’s most important fiscal rules — the constitutional debt brake. Introduced in 2009, it limits any new government borrowing to just 0.35 per cent of GDP, adjusted for the economic cycle. But exceptions are allowed, and the constitution says the Bundestag can relax the debt brake when the country is hit by emergencies such as natural catastrophes that “significantly impact the government’s fiscal position.”  Coronavirus is a clear example of such an eventuality. A Bundestag vote will then come in the days following.

    “This essentially paves the way for unlimited borrowing,” said one of the people familiar with Mr Scholz’s plans. He said it fitted with the European Central Bank’s announcement last week that it would buy an extra €750bn of bonds in a bid to calm markets thrown into turmoil by the pandemic. “The ECB’s message to the EU member states was clear,” he said. “Fill your boots with debt.”

    The good news is that thanks to its austere ways, in recent yearsGermany managed to bring its debt-to-GDP ratio to below 60%, while France is stuck around 99%, and Italy is at the forefront with 134.8%. “Even a few weeks ago people were saying we’d gone too far, that we were too focused on husbanding our resources,” Mr Scholz said on Friday. “Now you can see we acted correctly.”

    Jens Weidmann, head of the Bundesbank and a member of the ECB’s governing council, and also a vocal proponent of living within one’s means , said that until recently there had been “passionate debate” in Germany about the wisdom of sound public finances. “Now we can see very clearly: it was exactly right that Germany consolidated its budget when the economy was doing well,” he told Die Welt on Saturday. “Now we have the latitude to deal with this crisis. Our starting position is advantageous.”

    There is just one potential snag: the bond market is notoriously fickle, and while German yields plunged when the country had no intention of taking advantage of the unprecedented demand for its debt, it is only when plans change and Germany will now clearly splurge and have to fund these massive new bailouts with hundreds of billions in new debt, that yields will finally soar. Already the yield on the 10Y Bund has soared from -0.9% to -0.2% in just the past two weeks.

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    One can only imagine what happens when Germany – poster child for monetary prudence – starts the moneycopter. Or another way of saying it: the MMTers got what they wanted. Let’s see now if the bond market will allow them to execute their plans – absent central banks monetizing every last bond – or if the bond vigilantes which we taken for dead years ago, were only hibernating.

     


    Tyler Durden

    Sat, 03/21/2020 – 16:53

  • Divided, Distracted, Downtrodden: The Social And Political Reality In America Today
    Divided, Distracted, Downtrodden: The Social And Political Reality In America Today

    Authored by W.J.Astore via Bracing Views blog,

    The American people are being kept divided, distracted, and downtrodden.  Divisions are usually based on race and class. Racial tensions and discrimination exist, of course, but they are also exploited to divide people.  Just look at the current debate on the Confederate flag flying in Charleston, South Carolina, with Republican presidential candidates refusing to take a stand against it as a way of appeasing their (White) radical activist base.  Class divisions are constantly exploited to turn the middle class, or those who fancy themselves to be in the middle class, against the working poor.

     The intent is to blame the “greedy” poor (especially those on welfare or food stamps), rather than the greedy rich, for America’s problems.  That American CEOs of top companies earn 300 times more than ordinary workers scarcely draws comment, since the rich supposedly “deserve” their money.  Indeed, in the prosperity Gospel favored by some Christians, lots of money is seen as a sign of God’s favor.

    As people are kept divided by race, class, and other “hot button” issues (abortion and guns, for example), they are kept distracted by insatiable consumerism and incessant entertainment.  People are told they can have it all, that they “deserve it” (a new car, a bigger home, and so on), that they should indulge their wants.  On HGTV and similar channels, people go shopping for new homes, carrying a long list of “must haves” with them.  I “must have” a three-car garage, a pool, a media room, surround sound, and so on.  Just tell me what mortgage I can afford, even if it puts me deeply in debt.  

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    As consumerism runs rampant, people are kept further distracted by a mainstream media that provides info-tainment rather than news. Ultimately, the media exists to sell product; indeed, it is product itself.  No news is aired that will disturb the financial bottom line, that will threaten the corporations that run the media networks, that will undermine the privileged and the powerful.

    The people, kept divided and distracted, are further rendered powerless by being kept downtrodden.  Education is often of poor quality and focused on reciting rote answers to standardized tests.  Various forms of debt (student loan debt, credit card debt, debt from health care and prescription drugs costs, and so on) work to keep the people downtrodden.  Even workers with good jobs and decent benefits are worried.  Worried that if they lose their jobs, they lose their health care. So much of personal status and identity, as well as your ability to navigate American society, is based on your position.  For many it’s lose your job, lose your life, as you’re consumed by debt you can’t repay.

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    Divided, distracted, and downtrodden: It’s a recipe for the end of democracy in America.  But it also serves as a roadmap to recovery.  To reinvigorate our democracy, we must fight against divisiveness, we must put distractions behind us, and we must organize to fight for the rights of the people, rights like a better education for all, less debt (a college education that’s largely free, better health care for everyone, and far less emphasis on consumerism as a sign of personal and societal health and wealth), and improved benefits for the workers of America, who form the backbone of our nation.

    We can’t wait for the politicians.  Most of them are already co-opted by the moneyed interests.  Meaningful change will have to come from us.  That is, after all, the way democracy is supposed to work.


    Tyler Durden

    Sat, 03/21/2020 – 16:45

Digest powered by RSS Digest

Mar 21

Today’s News 21st March 2020

  • From Quarantine To Tyranny To Rebellion: Where Is The Line In The Sand?
    From Quarantine To Tyranny To Rebellion: Where Is The Line In The Sand?

    Authored by Brandon Smith via Alt-Market.com,

    America is in a haze right now. It seems like half the country is in denial of the danger while the other half is awaking from apathy and frantically trying to prepare. This is creating a fog of confusion as one side screams “it’s nothing but the flu, stop buying up the grocery store…!”, and the other side just keeps stocking goods, though in an inexperienced way that prioritizes comfort over practicality.

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    The other day I went by the grocery store to grab a few peripheral items while they still exist on sale, and this was the first time since the Covid-19 situation began that people in my area actually seemed…different.   The usual carefree obliviousness was gone from their faces and they all had a deer-in-the-headlights look, their eyes wide as saucers as they nervously scrambled around the store.  None of them were absorbed into their cell phones.  All of them were alert as many people huddled over their cart, quickly snatching items from the shelves as if protecting themselves from potential thieves.  It seems that reality is finally hitting the masses square in the face like a sucker punch.

    Suddenly, the prepper movement doesn’t look so “crazy” after all, and average people are now turning to prepper forums and websites to ask us for information on how to plan more effectively. Instead of stacking piles of toilet paper for psychological comfort, they are now buying food supplies.  The people who used to accuse us of being “chicken littles” and “doom mongers” are eerily silent. I almost miss them. At the very least, everyone is now concerned about the situation, if not for different reasons.

    This is a far cry from the past two months, when governments around the world as well as the UN’s WHO continually downplayed the pandemic threat and offered the public nothing in terms of usable advice. The establishment consistently kept the public in the dark, not just on the virus and its capabilities but also on the vast weaknesses in the global economy. Abruptly in the past week they suggest that a threat is ahead and now millions of people are scrambling to prepare however they can.

    As I have noted in previous articles, there is a reason why the establishment refused to inform the citizenry of the instabilities inherent in the pandemic scenario; the more unknowns there are for the public the more panic will set it, chaos ensues, and it is chaos that can be exploited to push forward numerous agendas. These agendas include global centralization as well as the erasure of constitutional liberties.

    Now that a national collapse event is slowly being accepted by many as a legitimate possibility, there is a debate rising as to what measures the government should take, or should be allowed to take. Those of us in the prepper and liberty movements always knew this day was coming; a day when the public would start considering trading away an array of freedoms in exchange for promises of security.

    Even now, government officials are still trying to tell people that this event will be “short lived”.

    “Don’t worry”, they say, “It will only last a couple of weeks.” Oh, and “Don’t concern yourselves with food shortages, that’s not going to happen…” You can look at these lies in two different ways:

    1) The government is trying to stave off a “panic” by slowly easing people into the reality that the system is breaking.

    2) The government is trying to keep people passive to the danger so that when the system breaks completely they will be unprepared, desperate and easier to manipulate.

    I believe the second option is the most likely given the evidence at hand, but in either case the government is crippling the public response time to the disaster. They did this for months and they are still trying to do it now.

    So, my argument is, why should we suddenly take their advice or take orders from them when the manure hits the fan? They have FAILED in their responsibilities to inform and protect the citizenry, and they are about to violate their prime mandate, which is to protect the personal liberties that make our society worth living in. Without these freedoms, there is no point to keeping our system intact anyway.

    The establishment and its defenders will claim that we all “have to make sacrifices” today in order to have freedoms tomorrow, but that’s not how the constitution was designed to work. Our rights are MORE important during times of distress and crisis, for it is in these times that we need to know what we are fighting for, and what we are struggling for. Survival is meaningless if we have to accept tyranny to achieve it.

    Once governments see a chance to usurp freedoms from the people, they DO NOT tend to give those freedoms back later unless the people become a viable opponent that could bring the establishment down.

    There are some who will say that a forced quarantine is necessary to protect the “greater good” of the greater number. It is true that the Covid-19 virus is a danger, and I think the people who claim it’s “no worse than the flu” are fighting a losing battle as the death rate is clearly much higher than the average flu virus. They will look extremely foolish a few months from now as the virus continues to cycle through the population and the dead continue to increase. That said, I think I understand why they cling to this crumbling argument.

    They think that by arguing that the pandemic is “all hype” they can morally justify resistance to the inevitable totalitarian response from governments. They think it has to be one or the other:  Either the virus is hyped and resistance is acceptable, or the virus is real and resistance is unacceptable. I ask – Why can’t it be both? The virus is dangerous to many, but a totalitarian response is still unacceptable.

    The virus is in fact more destructive than any flu in recent memory – It’s not a plague on the level of the Black Death, but if it continues to kill at a rate of 3% to 5% as it has been then this puts a large number of human beings at risk. It is not something to be taken lightly, and those people that are actively trying to discourage others from preparing for it are truly narcissistic in their ideology. If you don’t think it’s a threat, then don’t prepare, but don’t scream at others for taking precautions just because you desperately want to be right, and don’t come around demanding food and supplies from those same people when the ceiling comes crashing down on your head.

    Also, understand that Covid-19 is only part of the problem. The bigger crisis is in the economy itself; a collapse has been baked into this cake for years now, and the virus has little to do with it.  Leftist kids are going around calling this pandemic the “boomer remover”, almost cheering the assumption that mostly older and conservative Americans will die from this.  I have to break it to them that during the economic collapse that is inevitably coming they will have to wipe the snot from their noses and put on their big-boy diapers otherwise they aren’t going to survive either; most of them have no discernible skills and no preparations to speak of.  They are essentially useless.

    If Covid-19 is a “boomer remover”, then the economic crisis is a “snowflake bake”, and they are about to get roasted.

    As I have noted time and time again over the past few years, the Everything Bubble only needed one major trigger event to fully implode, but the international banks and central banks created that precarious bubble in the first place, and they set up all the conditions which made it so dangerous. The virus is not the cause of the crash, it is just very good cover for the banks who are the real perpetrators.

    Ignore the virus if you want, but the economic collapse is undeniable. Accept that the national and global emergency is real (even if it has been financially engineered), and let’s move on to a more meaningful debate: Should governments be allowed to implement martial law measures in response?

    In my view there is no excuse for tyranny, even during a pandemic event. The majority of the public is more than capable of voluntary quarantine without government enforcement. Add government intervention into the mix and it will only make people want to do the opposite.  And beyond that, Covid-19 has such a long incubation period that ultimately most people will probably contract it anyway. Total containment is not achievable (as we have just seen in South Korea). Quarantines might slow the spread, which is good, but do not expect to avoid this virus indefinitely. Why sacrifice your freedoms for safety that is an illusion?

    Then there is the argument of “herd immunity”, which is utter nonsense and always has been. Either a person or group is immune, or they are not, and people who are not immune do not put immune people at risk. Period. The claim that the virus might “mutate” within non-vaccinated or non-immune people and put vaccinated people at risk is a propaganda argument that ignores science. Generally, when a virus does mutate, it mutates into a less deadly or infectious strain, not a more deadly strain. Viruses are programmed to survive, too. If they evolved to kill ALL potential hosts then that would be counter to their survival imperative, which is why they usually evolve in the other direction.

    In terms of Covid-19, there is no “herd immunity” by the establishment definition anyway, because it is a brand new virus. There is no vaccine and the vast majority of people have no antibodies. No one can make the argument that people need to be forcefully locked down in order to maintain a herd immunity that doesn’t exist.

    Finally, there is a question of agenda and motive behind the rising call for martial law-like measures over the pandemic. For example, Champaign, Illinois mayor Deborah Frank Feinen has given herself executive powers in response to the coronavirus infection that are outright dictatorial and Soviet in their violations. Among other things, she demands the power to enforce curfews, ban public gatherings, ban alcohol, ban or confiscate firearms, as well as confiscate supplies from any citizen if those supplies are “needed for emergency response”.

    Is this really about protecting the public? How does it protect the public to confiscate their only means of defense, or confiscate their food and supplies? This type of thing is usually done in communist countries, and it is done to protect government power, not protect the people.

    Understand also that the Champaign mayor is not the only official calling for these types of actions. From New York to LA and beyond, those of us who are paying attention have noticed a swift and quiet implementation of orders that are whittling down American freedoms. Do not expect Donald Trump to operate differently, either. Expect him to initiate martial law measures (though he may not call in “martial law”) in the next few months. Expect him to activate Executive Order 13603, which was created by Barack Obama in 2012 and allows the federal government to appropriate everything from land to food to firearms in the event of a national emergency. This is going to happen. Count on it.

    The pandemic is not an excuse for tyranny, and I for one will not comply. I and many I know will self quarantine for a time with the expectation that we will eventually contract the virus, and hopefully our immune systems are strong enough to fight it. In the meantime, I will not be allowing any government officials to confiscate my supplies or my firearms “for my own safety” or “for the greater good”.

    I will not be cooperating with census takers asking questions about how much supplies I have stocked and whether or not I am ill.  I will not sit idle while checkpoints are set up in my county to enforce travel restrictions or demand people test for symptoms. I will not be signing up for government rations in exchange for my biometric data. I will not be visiting the local FEMA center for government aid. And, I will fight anyone that tries to assert martial law tactics in my area.

    A message to the government: I know you won’t, but I suggest you leave people alone and let them self isolate in peace. Your brand of “help” is not the kind of help we need. You and the financial elites that reside over you created this mess, and we do not trust you to clean it up. At bottom, this disaster should result in your removal from power. You should be held accountable and replaced.

    The system itself needs to be rebuilt from the ground up and principles of liberty need to return to the forefront of our society. Centralization and globalization have caused untold grief and terror to humanity; this collapse only reinforces the argument that we need to try something different. They will say that the world was “not centralized enough” and that a more global (totalitarian) framework is the solution. But, of course, who really benefits from that in the end? The common man, or the elites?

    They can offer any rationalization they want in the name of public safety, but we know what the real play is here. If the line is crossed into martial law, I plan to fight. Not just for me, but for the next generation. Because if I do not, those children may grow up in the world never knowing what freedom truly is. There are fates worse than death, and a life of tyranny and slavery is one of them.

    *  *  *

    If you would like to support the work that Alt-Market does while also receiving content on advanced tactics for defeating the globalist agenda, subscribe to our exclusive newsletter The Wild Bunch Dispatch.  Learn more about it HERE.


    Tyler Durden

    Sat, 03/21/2020 – 00:05

  • China Auto Sales Continue Collapse, Plunging 50% And 44% In First And Second Week Of March, Respectively
    China Auto Sales Continue Collapse, Plunging 50% And 44% In First And Second Week Of March, Respectively

    The coronavirus has certainly wreaked havoc on an already dilapidated global auto industry – and it’s no more evident than in China, where the virus originated and home to the largest auto market in the world.

    Continuing February’s trends, auto sales in March have continued to collapse: lower by 50% during the first week of March and down 44% the second week of March. 

    And that’s if you want to believe the numbers that are coming out of China, where the optics of a recovery may mean more to the government than an actual recovery.

     

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    China Auto Sales Through March 1, 2020

    Cui Dongshu, secretary general of the China Passenger Car Association told Bloomberg that the “market is recovering” but that it is doing so at a “slower than expected pace”. He also called for the country to increase car purchase quota, lower purchasing taxes and continue to give subsidies to EV purchases, in an effort to create a tailwind for buyers.

    The country is also reportedly considering the idea of relaxing emission curbs to help struggling automakers.

    Recall, sales fell 79% in February, marking the biggest ever monthly plunge on record. We reported less than a week ago that automakers were asking the government for relief after the industry’s collapse, which occurred in the midst of an already-in-progress global recession for automakers. Specifically, they were asking at the time for cuts on the purchase tax for smaller vehicles and support for sales in rural markets, in addition to the easing of emission requirements. 

    It looks as though they may have gotten their wish. 

     

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    China Auto Sales Y/Y Change Through March 1, 2020

    Sales for February fell to just 310,000 vehicles from a year earlier, marking the 20th straight month of declines. 

    A twin shock has plagued the automobile industry in China, one where a supply shock has hit manufacturers, who can’t produce automobiles at full capacity because of labor shortages and lockdowns, along with a demand shock that has kept people away from dealerships. While supply woes could be resolved with near term factory restarts, demand woes are expected to linger through the first half of the year.

    To illustrate the plunge in business activity, Caixin China Composite Output Index plunged to 27.5 in February from 51.9 in the previous month, one of the quickest drops on record. The virus outbreak has led to company closures and travel restrictions that have ground China’s economy to a halt. 

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    Tyler Durden

    Fri, 03/20/2020 – 23:45

  • Debunking Nature Magazine's "COVID-19 Definitely Didn't Come From A Lab" China Propaganda
    Debunking Nature Magazine’s “COVID-19 Definitely Didn’t Come From A Lab” China Propaganda

    Via HarvardToTheBigHouse.com,

    Maybe you shouldn’t blindly believe everything you read? Even if the source has a pretty solid reputation?

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    Nature magazine has censored over 1,000 articles at the request of the Chinese government over the past several years. And it seems pretty clear that their recent article, “The proximal origin of SARS-CoV-2” is just one more example of their influence.

    China bought off the head of Harvard’s chemistry department, you don’t think they could buy off run-of-the-mill research scientists scrambling for tenure and funding and publication? It’s absolutely horrific that so many scientists and researchers are taking part in what’s really clearly a disinformation campaign orchestrated by the Chinese Communist Party, and willfully spreading a smokescreen about something that’s already killed thousands and is projected to kill millions more across the planet.

    And while the mainstream corporate media mindlessly regurgitates claims from the Chinese government that are falsifiable with the simplest of google searches, allowing the public to be lulled into a false sense of security and complacency, and Reddit rapidly censors and moderates anything that might indicate that this virus leaked from a Chinese lab and so the Chinese government is to blame for this pandemic  – sites like ZeroHedge, that have been at the forefront of keeping the lines of investigation open, have been banished from Twitter and marginalized.

    Below is a takedown of that article, and the good news is a much more nuanced and honest look at the origins of COVID-19, the Wuhan Strain of coronavirus is just a click away.

    Thus, the high-affinity binding of the SARS-CoV-2 spike protein to human ACE2 is most likely the result of natural selection on a human or human-like ACE2 that permits another optimal binding solution to arise. This is strong evidence that SARS-CoV-2 is not the product of purposeful manipulation.

    • As our report mentions right at the start, scientists passed the H5N1 Bird Flu through a series of ferret hosts until it gained ACE2 affinity and then became incredibly virulent, which is what’s seen with COVID-19 since its affinity to ACE2 is orders of magnitude higher than SARS. That process would leave a genome that appears “natural” and not purposeful as well since it wouldn’t leave a genomic smoking gun and would simply appear to be the result of “natural” selection. However the addition of artificial generations produced by this process of passing through ferrets in the lab would create a lot of genetic distance from any possible relatives – precisely what is seen in COVID-19: it forms its own clade and appears very distant from all other bat coronaviruses. So this is lazy research, they’re either unaware of the Bird Flu study or are willfully ignoring it.

    Given the level of genetic variation in the spike, it is likely that SARS-CoV-2-like viruses with partial or full polybasic cleavage sites will be discovered in other species.

    • This seems like pretty intentional dissimulation. It’s “likely” that other viruses with this cleavage site will be found? What? How likely? 1 in 10? 1 in 10 million? Is it likely that if my aunt grew balls she’d become my uncle? Is it “likely” that a natural intermediate animal vector will be found? Well… likely or not, until it happens it seems incredibly disingenuous to state that “likely” means a damn thing here.

    The functional consequence of the polybasic cleavage site in SARS-CoV-2 is unknown, and it will be important to determine its impact on transmissibility and pathogenesis in animal models. Experiments with SARS-CoV have shown that insertion of a furin cleavage site at the S1–S2 junction enhances cell–cell fusion without affecting viral entry14.

    • This doesn’t seem to address the virus’s provenance at all, but just as an aside it seems like a lot of the viruses with furin cleavage sites engage in ADE, which COVID-19 appears to be doing from a clinical perspective: neurological damage, the second infection is worse, and areas like Wuhan with extended infections have much higher CFRs as infections overlap.

    The acquisition of polybasic cleavage sites by HA has also been observed after repeated passage in cell culture or through animals17.

    • Exactly. Passage through a series of ferret hosts in a lab would have given COVID-19 this distinct cleavage site.

    It is improbable that SARS-CoV-2 emerged through laboratory manipulation of a related SARS-CoV-like coronavirus. As noted above, the RBD of SARS-CoV-2 is optimized for binding to human ACE2 with an efficient solution different from those previously predicted7,11.

    • Yes, again we aren’t arguing that this thing was built nucleotide-by-nucleotide as the perfect bespoke bio-weapon. This efficient solution is exactly the kind of thing that would be selected for after passage through ferrets in lab, which was already done to the Bird Flu that created a horrifically virulent strain. Isn’t it funny that no one’s mentioning that experiment? Or Baric’s work at UNC? How come every single public-facing virologist seems to be leaving these studies out? Are they really unaware of them? That seems exceedingly hard to believe when I was able to find them on the front page of a single google search. Seems a lot more likely everyone’s just covering each other’s asses since they realize the magnitude of what’s happening and how deep into the cover-up they already are.

    Furthermore, if genetic manipulation had been performed, one of the several reverse-genetic systems available for betacoronaviruses would probably have been used19

    • This is an utterly vacuous statement. Probably doesn’t mean a damn thing in science. “Okay folks, we probably won’t get an earthquake anytime soon, so no reason to prepare for one or try and detect one coming!” Seriously?

    Instead, we propose two scenarios that can plausibly explain the origin of SARS-CoV-2: (i) natural selection in an animal host before zoonotic transfer; and (ii) natural selection in humans following zoonotic transfer.

    • As we’ve explained before, there was no trace of this virus before November 2019, and full zoonotic jumps don’t just magically happen, especially not of a virus that’s so incredibly adapted to humans and able to infect us undetected and spread undetected, and then kill us after more than enough time has passed to find multiple new hosts. It’s funny so many virologists are throwing out the book of how zoonotic jumps happen… all that money in gain-of-function research must be quite blinding. Kind of amazing they don’t matter how many thousands of people are dying. As far as the intermediate animal host goes: It might as well be a unicorn at this point. Until someone finds it, it’s just conjecture.

    Malayan pangolins (Manis javanica) illegally imported into Guangdong province contain coronaviruses similar to SARS-CoV-221. Although the RaTG13 bat virus remains the closest to SARS-CoV-2 across the genome1, some pangolin coronaviruses exhibit strong similarity to SARS-CoV-2 in the RBD, including all six key RBD residues21 (Fig. 1). This clearly shows that the SARS-CoV-2 spike protein optimized for binding to human-like ACE2 is the result of natural selection.

    • The most recent study, covered in our article, that examines the neutral sites that are assumed to best show heritage found that pangolins are “very unlikely” to have served as a host at all. Their assertion that natural natural selection is clearly shown is raw steamy bullshit. Serial passage through ferrets fits the overall big picture far better than this pangolin crap.

    For a precursor virus to acquire both the polybasic cleavage site and mutations in the spike protein suitable for binding to human ACE2, an animal host would probably have to have a high population density (to allow natural selection to proceed efficiently) and an ACE2-encoding gene that is similar to the human ortholog.

    • WAIT WAIT WAIT!! You mean exactly like a bunch of ferrets, which have the same ACE2 receptor as humans, all jammed into a bunch of cages together and then infected over and over again in a lab?! That’s crazy talk!! Other than the fact it was exactly the process used to make the Bird Flu into something that “could make the 1918 pandemic look like a pesky cold.”

    It is possible that a progenitor of SARS-CoV-2 jumped into humans, acquiring the genomic features described above through adaptation during undetected human-to-human transmission. Once acquired, these adaptations would enable the pandemic to take off and produce a sufficiently large cluster of cases to trigger the surveillance system that detected it.

    Hence, this scenario presumes a period of unrecognized transmission in humans between the initial zoonotic event and the acquisition of the polybasic cleavage site. Sufficient opportunity could have arisen if there had been many prior zoonotic events that produced short chains of human-to-human transmission over an extended period.

    • Sure this would be plausible… other than the fact that, as we cover in our report, that statistical analysis shows that this thing didn’t hit humans until November of 2019, which this article agrees with. But zoonotic jumps only occur after a genomic trial-and-error process where the virus jumps to one host, spreads to a few new hosts, and then fizzles out. There is absolutely no evidence anywhere of this occurring. Every single data points to this thing hitting humans in November and being immediately adapted and dangerous. There is no trace whatsoever of it creating small clusters of infections and dying out – stating there could have been doesn’t mean it’s been seen. It hasn’t. And as our report covers, this would require sustained interaction with the intermediate host – how does that happen in the middle of a massive modern urban metropolis the size of NYC? And where is this intermediate host anyways? If an intermediate host isn’t needed, is it some magical sleep-flying bat that decided not to hibernate and fight crime in Wuhan when it’s buddies were all hibernating, creating the sustained interactions with humans as it fought for Justice? Because that’s about as plausible as what’s being proposed here.

    The presence in pangolins of an RBD very similar to that of SARS-CoV-2 means that we can infer this was also probably in the virus that jumped to humans.

    • Again, analysis of the neutral sites shows that pangolins were almost certainly not in play.

    Furthermore, a hypothetical generation of SARS-CoV-2 by cell culture or animal passage would have required prior isolation of a progenitor virus with very high genetic similarity, which has not been described

    • This means nothing. There is no open-source shared database of viruses. No one has any idea what viruses are in China’s BSL-4 lab, where they’ve been collecting these viruses for years. As mentioned, one of our persons-of-interest was the very first person to isolate a coronavirus from a bat that uses the ACE2 receptor. He also worked at UNC in Baric’s lab making the hyper-virulent bat coronavirus in 2015.

    Subsequent generation of a polybasic cleavage site would have then required repeated passage in cell culture or animals with ACE2 receptors similar to those of humans, but such work has also not previously been described.

    • The fuck it hasn’t.

    Retrospective serological studies could also be informative, and a few such studies have been conducted showing low-level exposures to SARS-CoV-like coronaviruses in certain areas of China26. Further serological studies should be conducted to determine the extent of prior human exposure to SARS-CoV-2.

    • Beyond the statistical analysis that indicates it only hit humans in November in 2019, is the fact that the version of COVID-19 found in the first few dozen hosts was exactly the same – there aren’t any variants whatsoever, just one version. This is not what would be found with the genomic trial-and-error of a full zoonotic jump, which requires sustained human-to-human transmission as different variants of the virus try and fail to adapt to human biology. Here, only one variant was found in all the initial infected humans, instead of the multiple variants that would be expected. But does fit what would happen if a virus that already had high affinity to the ACE2 receptor, which is the same in human and ferrets, leaked out of a lab. But addressing this point in particular, oh weird, the study they cite from March of 2018 was done mostly on people who live in villages barely a kilometer away from bat caves. A far cry from a massive urban city bout the size of NYC. Oh, and how many of these villagers, who live about a kilometer or less from bat caves, had antibodies indicating exposure to bat coronaviruses? Two-point-seven percent. (There is hand-waving about how long antibodies persist in humans, but I’m pretty sure it’s more than long enough.) That study actually sampled people living in Wuhan too and found… no evidence whatsoever of exposure to “SARS-CoV-like coronaviruses.”  So are these peer-reviewers just straight chugging lead paint, or are they on the take too?

    The finding of SARS-CoV-like coronaviruses from pangolins with nearly identical RBDs, however, provides a much stronger and more parsimonious explanation of how SARS-CoV-2 acquired these via recombination or mutation1

    • Again, just demonstrably false.

    Get the real story here.


    Tyler Durden

    Fri, 03/20/2020 – 23:25

  • Italian Doctor Implores Rest Of World: "Lock Your Nations Down Now… Or Face This!"
    Italian Doctor Implores Rest Of World: “Lock Your Nations Down Now… Or Face This!”

    Judging by the following extremely disturbing news story from Sky News, hedge fund billionaire Bill Ackman was on to something when he warned President Trump that “hell is coming.“

    “America will end as we know it,” warned the infamous hedge fund manager, unless President Trump shuts down the country for 30 days to contain the fast-spreading coronavirus, calling it the only option to rescue the economy.

    The crisis gripping the town at the centre of the global COVID-19 crisis in Italy has been witnessed by Sky News’ Chief Correspondent Stuart Ramsay., who exclaims: “they’re fighting a war here… and they’re losing.”

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    Italy has hit a grim milestone in its fight against the coronavirus pandemic… with deaths now soaring above China’s:

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    …and authorities there want to send a warning to the rest of the world:

    “lock your nations down now… or face this!”

     

     

     


    Tyler Durden

    Fri, 03/20/2020 – 23:05

  • From The Woke Elite To Walmart: The Surge Of 'Preferred Pronouns'
    From The Woke Elite To Walmart: The Surge Of ‘Preferred Pronouns’

    Authored by Richard Bernstein via RealClearInvestigations

    The gender identity movement has spread from elite bastions of higher learning such as Harvard and Wesleyan to the Walmart nearest you. The giant retailer announced this month that it will allow employees to wear buttons that declare their preferred pronouns.  The choices are He/Him/His, She/Her/Hers, and They/Them/Their. Those who prefer Ze/Zir, Mx, or some other variant can wear the “Ask me my pronoun” button, presumably aimed at customers who feel the need to know their salesperson’s or cashier’s gender identity. 

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    Walmart’s move is the latest sign of how “preferred pronouns” have taken root the United States, Canada, Britain, and some non-English-speaking countries. In France, for example, some people are proposing using “iel” or “ille” ‒ a combination of the masculine “il” and the feminine “elle,” to refer to non-binary people. In the United States, it’s becoming normal practice for schools and colleges, hospitals, media, and government and corporate offices to use the singular “they” or other recently coined pronouns.

    IBM is among the companies that allow employees to specify their preferred pronoun in their human resource files. Forbes magazine reports on a move to encourage everybody to use them in email signatures ‒ a good thing, as one advocate of the practice said, because “it normalizes discussions about gender.”

    Establishment institutions, from the Associated Press and The New York Times to the American Psychological Association and the New York City Commission on Human Rights, are endorsing the use of “they” in the singular to refer to individuals who may be transgender or just do not identify as either male or female. The Merriam-Webster dictionary named “they” the Word of the Year for 2019, meaning that it was the most looked-up word on the organization’s website (“quid pro quo” and “impeach” were in second and third places).

    “The singular they and its many supporters have won, and it’s here to stay,” Jen Manion, an associate professor of history at Amherst College, wrote approvingly in a recent op-ed in The Los Angeles Times.  

    In other words, yet another practice that existed for years mainly on the social and intellectual margins ‒ in places like college diversity and equity offices, avant-garde theater collectives and LGBTQ circles ‒ has very rapidly gone mainstream. And this has happened much faster than other ideas that have moved from the “woke” periphery to the center of the national consciousness, such as gay marriage, or the dismantling of Confederate monuments, or removing the names of historical figures who owned slaves from university plaques.

    Preferred pronouns have become virtually de rigueur with such remarkable velocity that much of the rest of the society hardly even noticed, much less had an opportunity to debate the trend and weigh its merits. A 2018 Pew Research Center survey found that 40% of adults agree that there should be more gender options besides just male and female.

    As the British essayist Douglas Murray points out in his book, “The Madness of Crowds,” it took decades to go from “acceptance that homosexuality existed … to the position where gay marriage was legalized.” But “trans has become something close to a dogma in record time.”

    How did this happen so fast? No doubt, one reason for the acceptance of preferred pronouns is that they are presented as a matter of common courtesy. People should be called what they wish to be called, goes the common-sense judgment, and to refuse to do so seems gratuitously rude. Store managers at Walmart or human resource personnel at IBM are probably not avatars of “wokefulness.” Their companies are simply responding to a demand, couched in the language of diversity, inclusion, and tolerance, that is difficult to resist.

    And yet the rapid acceptance of preferred pronouns tends to blur important issues, ranging from the syntactical integrity of the English sentence to freedom of expression to biological reality.

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    Douglas Murray, Libby Emmons

    “As a private matter, when it’s just me and another person, of course I’m going to use the pronoun they ask me to use, but I have a problem when it becomes a matter of public enforcement, which is a distinction that a lot of trans advocates miss,” said Libby Emmons, a writer and member of a radical feminist group, the Women’s Liberation Front, which has been the target of considerable fury from the censorious left. “This should be a matter of personal choice. I shouldn’t be forced to say or not say anything at all.”

    Emmons and others are raising essentially two questions about preferred pronouns. One is that the often intense social, and sometimes legal, pressure to use them is a coercive impingement on free speech. The second is that preferred pronouns are an ideological wedge, a seemingly innocuous way of opening the door to a set of leftist identity-politics ideas that are highly debatable.

    Although gender-neutral pronouns have flourished only recently, they have a longer history. Transgender people have been advocating alternative pronouns at least since 1996, when the writer Leslie Feinberg, in the book “Transgender Warriors,” used s/he or hir to replace the standard he or she. 

    The movement percolated through the years first inside the LGBTQ subculture, then among sexuality and gender studies departments at colleges and universities. Next, it was picked up by the equity and diversity offices that have proliferated at practically every institution, and now more widely by human rights commissions, media organizations, religious institutions, Walmart, IBM, Amazon, and many others.

    And so, for example, after a three-year discussion of the issue, the University of Minnesota Senate, not generally a bastion of leftwing radicalism, voted last fall to allow all members of the university to specify pronouns of their choice, and to have access to “university facilities that match their gender identities,” meaning bathrooms, locker rooms, and sports teams, among others. The senate, which consists of faculty, staff, and student representatives, acted on a proposal made by the university’s Office of Equal Opportunity and Affirmative Action, along with the Gender and Sexuality Center for Queer and Trans Life. 

    The debate included objections to suppressing free speech, said Joseph A. Konstan, a professor of computer science and engineering and past chairman of the executive committee of the university senate. But, he told me in a phone interview, “we also heard from students who feel that First Amendment protections are an excuse to hold people down.”

    In the end, the proposal passed when all mention of punishment, such as treating “misgendering” as a form of harassment or discrimination, was taken out of the text. “We wanted to focus on treating people with respect, addressing them the way they want to be addressed,” Konstan said.

    Or as one student put it to the Minnesota Daily newspaper, “It’s just very invalidating when you tell somebody what you want to be referred to as, and they completely ignore that. That’s obviously not a safe environment.”

    To what extent schools are obligated to make people feel “validated” and “safe,” rather than to be open to ideas that challenge assumptions, is, of course, hotly debated. That’s one reason the quick acceptance of preferred pronouns has provoked some familiar accusations ‒ that the unelected commissars of diversity, acting on behalf of an extremely small minority, have managed, again, to impose a set of restrictions and obligations on the rest of us. Surveys suggest that about 0.6% of Americans identify as transgender, but almost 2% of high school students do. It is not clear whether this disparity reflects the freedom of trans youngsters to proclaim their identity or if many are embracing it as they navigate the sexual confusion of puberty.  

    Perhaps the leading international dissenter on the issue  is Jordan B. Peterson, a clinical psychologist, best-selling author, and YouTube activist at the University of Toronto. His opposition to preferred pronouns was initially prompted about three years ago by a proposed addition to Canada’s human rights law banning discrimination based on “gender identity.” Peterson argued that the provision would require what he calls “compelled speech,” forcing people to use certain words rather than others.

    Several Canadian legal scholars said the law did not make “misgendering,” as the refusal to use preferred pronouns is sometimes called, an actual criminal offense. Still, even Peterson’s critics acknowledge that the letter sent to him by his university, warning that “misgendering” could be considered a form of discrimination under Ontario’s provincial human rights code, could reasonably be deemed intimidating.

    Peterson’s visibility on YouTube, especially, has given him veritable international celebrity status – some hail him as a global anti-political correctness warrior, while others vociferously protest his appearances, vilifying him as “transphobic” and even neo-Nazi.

    During one televised discussion on Ontario television, a fellow panelist and University of Toronto faculty member said Peterson’s refusal to use transgender pronouns was “tantamount to abusing students and violence.” Others invited on the program refused to participate, saying that would give legitimacy to Peterson’s retrograde views — in other words, that even to raise questions about the topic is morally illegitimate. In reporting this story, I spoke to one American transgender activist, who has a position in the LGBTQ equity office at a major university, who said that while nobody should be forced to say anything, the arguments against preferred pronouns are based on “hate and ignorance.”

    “They deserve to be in public as much as the KKK or neo-Nazis do,” said this person, who declined to speak for attribution. 

    Those who question the preferred pronoun movement say such harsh rhetoric seeks to silence debate about the line between feelings and science.

    “The very act of stating your preferred pronoun is a capitulation to an ideology,” Emmons said. “It is that a person can claim a biological identity based on emotion, that a person’s emotional feeling supersedes a person’s biology.” Implicitly at least, the demand for preferred pronouns, Emmons and others argue, is also a demand to recognize that a person with a penis and a beard can claim to be “non-binary” or a woman, even as some legislation is protecting that claim as a human right.

    “This is a top-down ideological enforcement situation,” Emmons continued, “and I don’t want to be forced to say that a man is a woman.”   

    This is not a mere theoretical concern. The legal guidance on gender discrimination from the New York City Commission on Human Rights, for example, “requires employees and covered entities to use the name, pronouns, and titles (e.g. Ms./Mrs./Mx.) with which a person self-identifies,” or be subject to fines that can go as high as $250,000.

    In 2018, the human rights commission brought charges against Mount Sinai Beth Israel Hospital for indirectly asking a person claiming to be a transgender woman whether he (or should that be she or maybe they?) had a penis, and, apparently suspecting that he did, insisting that he stay in a private room rather than be housed with a female patient. The hospital was fined $25,000 in “compensatory damages” paid to the transgender woman and was required to “update its system to make patients’ preferred names and pronouns visible to frontline staff.”

    There are other examples indicating that preferred pronouns are no longer an optional, personal choice. At Shawnee State University in Ohio, a 62-year-old philosophy professor, Nicholas K. Meriwether, was warned by the school administration that his refusal to use transgender pronouns was a violation of the university’s non-discrimination policies.

    At Duke University Hospital in Raleigh, N.C., emergency room physician Kendall Conger received a letter from the hospital’s committee for inclusion and diversity accusing him of creating a “negative environment” after he told a student that wearing a pronoun-identifying badge on her lapel might make some religious patients uncomfortable.

    In England a couple of years ago, a high school math teacher in Oxfordshire was suspended after he refused to refer to a transgender girl as a female on religious grounds.  

    There do not appear to be broad studies indicating whether such anecdotes are part of a larger pattern of penalties for the refusal to use the preferred pronouns. But the fact that they are imposed on a practice that only a tiny cultural subgroup had even heard of just a few years ago is a measure of the extraordinary velocity with which it has become a moral norm. A survey conducted by the Pew Research Center late in 2018 found that one in five American adults knows somebody who goes by a gender-neutral pronoun, which, given how new the trend is, seems like a rather large number.

    Pew also found that among people 18 to 30, three-quarters have heard about people wishing to be referred to by “non-binary pronouns.” And slightly more than half of Americans say they are “comfortable” with that.

    All of this is so new that some questions seem not to be getting much attention, among them, whether the ever more intense effort at a gender-diverse language is an affront both to grammar and precision. Take the sentence, “Mary had no food in the house so they got take-out for their children.” The possessive “their” to refer to one person certainly seems a bit jarring, at least to people not used to it.  It’s also ambiguous, unclear as to whether Mary got take-out by herself or was accompanied by somebody else, perhaps the children.  Using “her” might be decried by trans advocates as insulting and discriminatory to Mary, but at least it would present no such problems.

    Beyond that, how does one even know that Mary’s preferred pronoun is they/them/their? Will everybody have to keep records in their smartphone directories of each contact’s preferred pronoun?  Will people really refer to Mary as “they” when talking in Mary’s absence, as in “Mary told me they’re reading a new book and they love it”?  Will the turn to preferred pronouns require changes in legal documents? 

    None of this seems to have been thought through very carefully, even as preferred pronouns are becoming fashionable, a chic new thing, one that, from all appearances, is here to stay.


    Tyler Durden

    Fri, 03/20/2020 – 22:45

  • Confirmed: Fed Bailed Out Hedge Funds Facing Basis Trade Disaster
    Confirmed: Fed Bailed Out Hedge Funds Facing Basis Trade Disaster

    Back in December, when the world was still confused about what exactly happened before (and after) the September repocalypse – which has since exploded thousand-fold resulting in the Fed now doing daily $1 Trillion repo operations – we said that in addition to the implicit bailout of JPM (which we described here first, and subsequently others), by restarting its repo operations the Fed was also bailing out dozens of hedge funds engaging in highly levered trades involving a relative value compression trade in the Treasury cash/swap basis… almost identical to what LTCM was doing ahead of its 1998 bailout, which is also why we titled the article “The Fed Was Suddenly Facing Multiple LTCMs.”

    In a nutshell, the article explained why and how the return of the Fed’s repo ops was nothing more than the Fed preemptively bailing out all those hedge funds that would have imploded had basis trades gone haywire. Below is a key excerpt from that post:

    One increasingly popular hedge fund strategy involves buying US Treasuries while selling equivalent derivatives contracts, such as interest rate futures, and pocketing the arb, or difference in price between the two. While on its own this trade is not very profitable, given the close relationship in price between the two sides of the trade. But as LTCM knows too well, that’s what leverage is for. Lots and lots and lots of leverage.

    We also said that “hedge funds such as Millennium, Citadel and Point 72 are not only active in the repo market, they are also the most heavily leveraged multi-strat funds in the world, taking something like $20-$30 billion in net AUM and levering it up to $200 billion. They achieve said leverage using repo.”

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    Needless to say, as always when this website presents something the mainstream press hasn’t even considered, our explanation of what really happen ahead and during the September repocalypse was met with the traditional mockery and derision by the financial “intelligentsia.”

    Until today, three months later, when Bloomberg finally confirmed everything we said.

    In an article discussing how and why the Fed unleashed its March 12 repo bazooka, Bloomberg writes that “when coronavirus panic kicked off unprecedented turmoil in Treasuries last week, hedge fund leverage was lurking” and goes on to “explain” something we said back in December:

    The [hedge funds] use borrowed money from the repurchase market for the popular basis trade, which exploits price differences between cash Treasuries and futures. Though individual firms’ borrowing is a closely guarded metric, people familiar with the transactions said some of them levered up as much as 50 times their own wagers. Leveraged funds’ exposure to the basis strategy could be as much as $650 billion, JPMorgan Chase & Co. strategists said.

    Does that sound like “the Fed suddenly facing multiple LTCMs”? Because to us it sure does. And more importantly, what happened in the days ahead of last week’s credit market debacle is precisely what happened ahead of the September repo snafu, only with exponentially more destructive power.

    The catalyst for last week’s re-repocalypse was the historic surge in Treasurys that saw the 10Y drop as low as 0.31%, and the 30Y drop below 1%. As investors scrambled into Treasurys, “hedge funds got hammered” again, and the result was “a difficulty in completing trades” which as Bloomberg correctly writes “was a contributing factor to the Federal Reserve’s decision to pledge $5 trillion to keep markets running smoothly.”

    High leverage amplifies profits and losses and can be responsible for forced liquidations — and market fluctuations. This week, a sell-off in Treasury futures tied to margin calls pushed outstanding contracts to their lowest level since 2018. Many firms also get funding from money markets, whose problems have prompted the Fed to provide emergency funding

    And there it is – just as we said, the Fed’s first priority in the bailout waterfall, long before consumers and businesses were even considered, was the sanctity and stability of those multibillion hedge funds that suddenly faced a spectacular implosion… just like in the case of the original LTCM. Only it’s even more poetic, because whereas with LTCM – which blew up when an economic black swan (the Russian default and the Asian crisis of 1997) blew out the LTCM basis trades, forcing the first Fed bailout in the modern era, what happened last week may have been the very last bailout cascade in Fed history, only this time it will involve everything, not just one solitary hedge fund run by idiot Nobel-prize winners.

    “Too big to fail is back, and this time it’s not the banks, it’s levered financial institutions,” said Mark Yusko, the chief executive officer of Morgan Creek Capital. Yusko – who apparently forget to the original Fed bailout was not of a bank but of a levered financial institution (LTCM) said he supported the Fed’s stepping in, but added that hedge fund firms have gotten too big by borrowing too much. “It’s a bailout,” Yusko said, repeating what we said in December.

    And whereas Bloomberg failed to connect the dots last year, this time around it actually did some original reporting and found some of the smaller funds that would have been devastated had the Fed not stepped in with its trillion-dollar a day repos:

    • ExodusPoint Capital Management lost 4% this month through March 13, on pace for its worst month ever, according to people familiar with the situation. It was unclear how much the basis trade contributed to the loss.
    • An LMR Partners’ fund fell 12.5% in the first two weeks of this month and spurred the firm to raise new capital.
    • Capula Investment Management’s Global Relative Value Fund dropped 5.2%, people said, and Field Street Capital Management’s fixed-income relative-value flagship fund, in which the basis trade is substantial, sank 14.5% and had to reduce the size of its positions.

    That said, that’s just three macro hedge funds out of a universe of hundreds, and what is important, is that the trade was so ubiquitous (thanks to those hedge fund idea dinners) that everyone was doing it.

    “We’ve had 10 years of a perfect paradise and so people have been picking up pennies thinking there’s no risk in holding strategies like the basis trade,” said Kathryn Kaminski, chief research strategist and portfolio manager at AlphaSimplex Group. “A lot of the strategies, like the basis, that hedge funds tend to use don’t work when markets aren’t stable. You’ll see more of these types of blowouts.”

    Curiously, and contrary to totally unfounded recent rumors, some of the far bigger firms fared better: as Bloomberg notes, the market unwind had a relatively small impact on multi-strategy funds Citadel and Millennium Management, although as we reported yesterday Millennium is closing several “trading pods” after weathering a modest 2.7% drop this month through March 12, and was down 1.9% for the year. In light of the S&P’s 30% drop, that may seem like a stunning performance, but somehow Izzy Englander always manages to pull out a rabit out of hat (someone may want to check into what the HFT guys on the 6th floor of 666 Fifth are doing for the answer to that).

    But whereas the mega-levered Millennium and Citadel, whose in house risk-management lackeys are truly draconian in their position limits, managed to avert a debacle by unwinding the positions quickly after sustaining small losses – courtesy of the Fed’s massively expanded $500BN repos – others were not so lucky, and many other firms focuses on the basis trade suffered far steeper losses.

    One among them was BlueCrest Capital Management, whose trader Raymond Wang was fired on March 9, the day after that historic Sunday night when the 30Y traded bidless for hours as the S&P crashed limit down, because he couldn’t find a buyer for the investment firm’s losing positions in the basis trade. Other firms, who had less leverage on, survived until that Thursday when the Fed launched the repo bazooka, allowing all those who had the basis trade on to quietly exit stage left, bailed out by a deceiving Fed that told the world its mission was to rescue main street when in reality it was just making sure the billionaires had someone to dump their money-losing positions to.


    Tyler Durden

    Fri, 03/20/2020 – 22:24

  • National Guard Deploys In Baltimore As City Enforces Restrictive Curfew: Live Updates
    National Guard Deploys In Baltimore As City Enforces Restrictive Curfew: Live Updates

    Summary:

    • NYC Mayor de Blasio says “we are now the epicenter of the crisis.”
    • Staffer for VP Pence test positive; White House says “no close contact”
    • China reports no local infections for 2nd day in a row
    • Global case total passes 250k
    • Hong Kong reports largest daily jump in cases on record as travelers revive outbreak
    • NY rolls out restrictive new measures
    • NY case total tops 7k
    • Italy says Army will help enforce lockdown, effectively declaring martial law; might extend lockdown through early May
    • Spain death toll cracks 1,000
    • Italy reports another 627 deaths
    • National Guard spotted in Baltimore as 2nd death recorded in Baltimore County
    • Confirmed cases in US pass 14k
    • Drive thru testing site in NJ’s Bergen County has a line that’s over 1,000+ cars long
    • Switzerland bars all gatherings of more than 5 people
    • Greenwich cases spike as Darien shutters COVID-19 testing clinic
    • Trump says no plans for national lockdown
    • Germany to pass ‘shadow’ budget on Monday
    • EU suspends budget rules
    • Bavaria becomes first German state to impose ‘lockdown’
    • Johnson says UK can defeat virus in 12 weeks if ‘we work together’
    • Treasury now moving back both filing & payment deadlines for 2019
    • Novartis will donate up to 130 million doses of hydroxychloroquine to support global response
    • NBC News employee succumbs to virus
    • Dr. Fauci says social distancing should continue for several weeks
    • MTA confirms it has 23 sick workers
    • US, Mexico agree to shut southern border
    • China makes first purchase under ‘Phase 1’ trade deal
    • Altria chairman & CEO tests positive
    • Military confirms 35 American troops infected in Europe

    *  *  *

    Update (2145ET): Earlier this week, the Military Times confirmed that some 2,000 national guard soldiers had been called up across 23 states, with more on the way.

    In Baltimore, military vehicles were spotted on the street.

    After thousands of Baltimorians violated a curfew imposed by Gov. Hogan as states around the country crack down on the outbreak.

    Meanwhile, the second coronavirus death in Baltimore County (part of the suburbs north, east and west of the city) was confirmed about an hour ago, according to local media reports.

    As states crack down around the country, with increasing legal penalties for people who put the public welfare at risk by venturing outdoors for no reason, or not taking the proper precautions, Baltimore appears to be readying for a crackdown as some residents steadfastly refuse to follow curfews.

    “As the number of positive cases in Maryland continues to dramatically rise, we need everyone to take this seriously. This is a public health crisis like nothing we have ever faced before – we are all in this together, and we will get through this together,” Hogan said in a statement.

    Rumors reported on social media and elsewhere have hinted at the possibility of more restrictive measures, and, in some cases, something closely approximating martial law, with the national guard deployed in the streets. Though, to be fair, that’s already the reality in New York, Maryland and nearly two dozen other states.

    *  *  *

    Update (1940ET): CTGN reports that China reported 41 new coronavirus cases on Friday, but for the second consecutive day, all of the cases were foreigners who allegedly contracted the virus abroad and carried it to China.

    And for the third day in a row, no new cases were confirmed in Hubei Province.

    Just in case you were curious how they did it…

    …basically, President Xi harnessed the power of patriotic socialism, and led the valiant Chinese people to victory against the unseen, yet all-consuming foe. Around the world, more than 250k cases have been confirmed, and the WHO pointed out that it took more than three months to reach 100,000 cases worldwide, but only 12 days to log the next 100,000.

    As millions of Americans panic about the possibility that their governor could hand down a ‘shelter in place’ order at any moment, across the country, panic buying continued on Friday. In Connecticut, where the outbreak in Westchester County has already started to bleed across the border into wealthy suburban Fairfield County, a haven for the Wall Street elite. A local news website reports that 53 cases have been confirmed in the town of Greenwich, one of the wealthiest zip codes in the country, and an area that’s virtually synonymous with wealth and privilege.

    Too bad their neighbors closed that testing clinic.

    *  *  *

    Update (1850 ET): An official working for Vice President Pence has tested positive for the coronavirus, his office announced Friday, becoming the first known positive test to date for a White House staffer, although the admin is quick to downplay the risk to the executive branch:

    “This evening we were notified that a member of the Office of the Vice President tested positive for the Coronavirus.”

    “Neither Pres. Trump nor VP Pence had close contact with the individual. Further contact tracing is being conducted in accordance with CDC guidelines”, a spokeswoman says.

    Separately, following the tragic death of an NBC employee, Fox News Media CEO Suzanne Scott and President Jay Wallace informed staffers that a Fox Business employee in New York has also tested positive for coronavirus. Here’s the note that just went out.

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    * * 

    Update (1750ET): NYC Mayor Bill de Blasio confirmed that the city now has 5,151 confirmed cases of COVID-19 – which accounts for a third of the US cases and half of NY State’s cases (17,041 nationwide and 7,102 in New York state).

    New York City “is now the epicenter of this crisis,” exclaimed de Blasio.

    *  *  *

    Update (1320ET): As Italy’s worst outbreak spirals further and further out of control, Italy is reporting 5,986 new cases of coronavirus and 627 new deaths on Friday, raising the countrywide total to 47,021 cases and 4,032 dead, as the total number of cases in Europe surpasses the total ‘officially’ confirmed in China.

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    If you’re curious about how things are looking on the ground in Italy, this Channel 4 report is chilling.

     

    *  *  *

    Update (1240ET): In an alarming video that shows just how huge demand is for COVID-19 tests, a drive-thru testing site in Bergen County has a line that’s “several thousand cars long”.

    *  *  *

    Update (1220ET): As President Trump and the White House task force (with Dr. Fauci making an appearance today) update the country on the federal government’s efforts, Sec. of State Pompeo said that the US and Mexico had agreed to shut the southern border with Mexico..

    In other news, drug company Novartis will donate up to 130 million doses of hydroxychloroquine to support the global virus response, according to a statement.

    Trump also said that he probably won’t ever institute a national lockdown, feeling that decisions like that are better left up to the states. Across the Atlantic, the EU on Friday confirmed that it would expand its budget rules to open the floodgates to fiscal stimulus, as expected.

    *  *  *

    Update (1120ET): The morning after California laid out the most restrictive measures to combat the virus in the US, NY Gov. Andrew Cuomo on Friday laid out new measures for New York State to combat the coronavirus outbreak, imposing new restrictions like ordering “100% of the workforce” to stay home.

    During this time, Cuomo is order all businesses in the state that aren’t deemed “essential” to close, and added that though public transit will remain open for people who need it to travel to their ‘essential’ jobs, and to get to places like hospitals and doctors offices and grocery stores and pharmacies, he urged New Yorkers to only take the trains if absolutely necessary. Cuomo also clarified that bank ATMs are an ‘essential’ service.

    All non-essential businesses must close, Cuomo and NYC Mayor de Blasio have said that the state will find better ways to accommodate essential employees who need childcare or other things. But Cuomo threatened to fine businesses and individuals caught breaking the rules.

    “These are not helpful hints…they will be enforced. There will be a civil fine and mandatory closure for any business that is not in compliance. Again, your actions can affect my health, that’s where we are. There is a social compact that we have…we must make society safe for everyone,” Cuomo said about the executive action that he’s preparing to sign.

    New York reported 2,950 new cases on Friday, bringing the state-wide total to 7,102 cases, with 4,408 cases in NYC.

    As he chided the public for not taking the outbreak seriously enough, Cuomo declared that young people saying they can’t get the virus is “simply wrong,” claiming that 25% of cases are people ages 20-44.

    When it comes to exercise, though gyms will be closed, Cuomo said New Yorkers can engage in ‘solitary’ activities like jogging, but said games of pickup basketball and team sports like that won’t be permitted.

    During the press conference, Cuomo confirmed that the state had reached the capacity to test 10,000 New Yorkers a day, becoming perhaps the only state in the country to overshoot on its daily testing target of 6k tests. Along with these new ‘dramatic actions’, Cuomo announced more confirmed cases and deaths.

    Cuomo told a story about how the city governments of St. Louis and Philadelphia during the Spanish Flu epidemic dramatically impacted the outcomes for their local populations, and that Cuomo was trying to follow the better example, before bringing up the issue of mental health and the fact that his daughter was forced to isolate for 2 weeks.

    At any rate, looking at the case curve, the number of cases expected could triple the state’s capacity of beds and ventilators needed to save the lives of the sickest of patients.

    The governor, who urged New Yorkers to “blame me” if things go badly with these measures, claiming that this decision was his after careful consideration and consultation with experts. “I did everything we could do…this is about saving lives…if everything we do saves just one life, I’ll be happy,” Cuomo said.

    Moving on, Cuomo declared that he was banning evictions during the crisis, building on measures prohibiting banks from engaging in foreclosure, another unprecedented step.

    In keeping with Cuomo’s coordination with the governors of New Jersey and Connecticut, Cuomo said he would be speaking with Phil Murphy and Ned Lamont, the governors of NJ & CT, later in the day to discuss his measures and whatever can be done to continue coordinating their states’ responses. Rumors have circulated in recent days that a similar lockdown might be declared in CT.

    Asked by reporters how long to expect these circumstances to remain in place, Cuomo declared that “this could go on for months”, one day after saying researchers projected that the outbreak would peak in 45 days.

    Watch the rest of the press conference here:

    From the sound of it, Cuomo’s actions are still being well-received by New Yorkers and the country.

    Elsewhere, in Switzerland, public health officials barred all gatherings of more than 5, possibly the most strict gathering ban instituted anywhere around the world.

    *  *  *

    Update (1055ET): Meanwhile, in London…

    Boris Johnson’s government has continued to deny reports about an impending ‘lockdown’ of London. But with 10k troops on standby, we suspect that Italy might soon have some company in the ‘martial law’ department.

    *  *  *

    Update (1015ET): The Treasury has officially moved back ‘Tax Day’, by postponing both the payment deadline (which it announced earlier) and the filing deadline (which it just announced Friday morning).

    In other news, an NBC News employee has died from COVID-19.

    As an update: Confirmed cases in the US passed 14,000 Friday morning, while the number of confirmed deaths hit 160.

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    Source: WaPo

    *  *  *

    Update (0950ET): The market didn’t seem to care all that much, but Handelsblatt reported Friday that the German government is planning to pass a planned €200 billion budget to combat the crisis, as Berlin continues to facilitate mass testing and triaging that has kept its mortality rate among the lowest in Europe.

    This comes after Germany car companies said they would close more factories.

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    Barely a day has gone by over the past two new weeks that there hasn’t been some report about Germany suspending its ‘debt brake’ due to the crisis and boost fiscal spending, as Christine Lagarde and the ECB have called on them to do. Even before the outbreak, reports about Germany passing a ‘shadow budget’ to boost tepid economic growth date back to at least the fall.

    Germany’s outbreak began in the state of Bavaria, still its worst-hit region. And as governments around the world tighten restrictions on movement, Bavaria on Friday imposed new “fundamental restrictions” on public life to aid the fight against COVID-19, DW reports. The move, of course, comes less than 12 hours after the governor of California imposed similar measures. 

    “We’re shutting down public life almost completely,” Bavarian Minister President Markus Söder said.

    People will only be allowed to leave their homes for necessary purposes, such as going to work or the doctor and buying groceries or medicine.

    “It’s not easy to take these decisions,” Söder said. “We take these decisions according to the best of our knowledge and conscience. There will be a Bavaria after corona, but it will be a stronger one if we don’t look away.”

    The measures will go into effect for two weeks starting Friday evening.

    In other news, the German state of Saarland wants to shut down restaurants and restrict people from going out in public, moves that are similar, though somewhat less restrictive, than Bavaria. Saarland State Premier Tobias Hans will recommend the move to his cabinet this afternoon, the state chancellery confirmed.

    *  *  *

    Update (0945ET): Six weeks ago, many branded us ‘alarmists’ for publishing warnings by credible epidemiologists and virologists about the infectious potential of the novel coronavirus.

    If you still believe those warnings were ‘alarmist’, we wish you the best of luck during the coming weeks. You’re going to need it.

    *  *  *

    Update (0928ET): The US military just confirmed that 35 American troops in Europe have tested positive.

    Meanwhile, the FCA in the UK warned banks to ease up on repossessions and the like, issuing a statement claiming that “no responsible lender should be considering repossession as an ‘appropriate measure’ at this time. This comes after BoE Governor Bailey warned that banks should suspend foreclosures and repossessions.

    Though it’s faded into the background, tensions over whether China would be able to keep up with its ‘Phase 1’ trade deal commitments have slackened somewhat now that Beijing has made its first expected purchase of US agricultural goods.

    • CHINA BUYS 756,000 METRIC TONS OF U.S. CORN, FIRST MAJOR PURCHASE UNDER PHASE ONE TRADE DEAL

    *  *  *

    Update (0850ET): Prime Minister Giuseppe Conte blamed the Italian people earlier this week when he said he would extend Italy’s nationwide lockdown until April 3, claiming that too many were still violating the lockdown despite stiff penalties.

    As the country’s death toll passes the death toll from mainland China (or the ‘official’ death toll at least), whispers about even restrictive measures appear to have just been validated: Prime Minister Giuseppe Conte on Friday effectively declared martial law Friday morning in Italy’s worst-hit region of Lombardy, claiming that he will now be bringing in the Army to enforce the lockdown, something that the region’s governor swiftly confirmed.

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    As many members of the Italian public continue to act with no respect for protecting the public health and the massive effort underway to contain the outbreak, for the first time, many are about to learn the meaning of discipline.

    According to media reports, Conte is considering extending the lockdown until at least early May.

    • ITALY’S LOMBARDY REGIONAL HEAD SAYS GOVERNMENT HAS AGREED TO USE ARMY TO IMPOSE LOCKDOWN IN HIS REGION

    Ultimately, whether the government decides to extend the lockdown will depend on factors like the continuing spread of the virus, as well as the public’s response, and whether Italians finally start taking this seriously.

    At this point, many expect that schools will not reopen before the summer break, the that the further tightening may not only include a ban on outdoor, but might also prohibit Italians from the cherished “passeggiate,” leisurely strolls around town that allow one time to think and digest.

    While the Italian outbreak still has no end in sight, over in the US, Dr. Anthony Fauci said Friday morning that social distancing in the US should continue for ‘several’ more weeks, as officials scramble to try and discern exactly how far the virus has penetrated, as hundreds of thousands of tests arrive at labs. Last night, during an appearance on Facebook live, Dr. Fauci confirmed that more tests are being shipped as private partnerships with firms like Thermo Fisher.

    Reports claimed Friday that the Italian Treasury now expects the country’s economy to contract by 3% this year, largely because of the lockdown.

    Soldiers have already been deployed in some places to help enforce the lockdown and help with the crisis response.

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    New York’s MTA on Thursday announced that 23 workers have tested positive for the virus, this is up from just 1 worker as of early Thursday. The workers didn’t display symptoms at work and were described as being of low risk to riders.

    In other central bank news, the SNB has announced more measures, while Sweden has expanded a loan guarantee program.

    Meanwhile, as Boris Johnson’s government facilitates a policy u-turn to fight the virus, his former Chancellor is chiding the public on twitter.

    At this point, it’s almost like the more you yell at them to stop, the more panicked they become.

    *  *  *

    When historians look back at this time, we suspect that California Gov. Gavin Newsom’s landmark decision to order more than 40 million Californians to remain at home on Thursday night will be remembered as an important demarcation point – the beginning of a more heavy handed response as it becomes increasingly clear that too many Americans are simply ignoring the government.

    So far, NY Gov. Andrew Cuomo and President Trump have insisted that they have no plans to issue lockdown orders. But with the number of confirmed cases expected to soar in the coming days and over the weekend, the situation is certainly evolving rapidly, and rumors about other states considering preemptive lockdowns (remember, the whole point is to stay “ahead of the curve”) continue to circulate.

    Over the past week, central bankers around the world have slashed rates, stepped up bond buying programs, promised to expand their back-stopping of credit markets and – most importantly – urged the politicians in charge to do their part and pass massive fiscal stimulus. Late last night, the Senate unveiled a $1 trillion package that will feature direct transfers to many Americans.

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    In the US, futures are pointing higher amid mounting hopes for a second straight close in the green. The improved sentiment is ostensibly due to the latest wave of central bank interventions. But that didn’t stop a team of economists at Bank of America from releasing a new note calling for a global recession, with GDP growth dropping to 0% for the year in 2020. Explaining the shift in their thinking, the team wrote: “Our first piece on the virus shock was titled ‘Bad or worse’; now we amend that to ‘Really bad or much worse.'”

    The World breathed a sigh of relief Thursday night when China reported no new domestically-transmitted cases of the coronavirus for a second straight day. Meanwhile, Reuters just reported that the foreign ministers of South Korea, China and Japan have held a video conference on Friday to discuss cooperation on the coronavirus pandemic as concerns grow about the number of infected people arriving in their countries from overseas, threatening to set off a second wave of infection. The State Department is doing its part: It issued a ‘Level 4’ travel warning last night advising Americans not to travel abroad, and for any Americans still outside of the country to either come home, or ‘shelter in place’.

    In the UK, Prime Minister Boris Johnson said last night that the UK could quash the virus in 12 weeks if Britons simply cooperate with the government’s new efforts.

    Unfortunately, it appears the dreaded ‘second wave’ of infections is already looming over Hong Kong.

    After reporting 14 new cases in a single day earlier this week, a surprisingly large jump for a city that was widely praised for its swift and heavy handed response to the outbreak (proving that the city had retained the hard-learned lessons of SARS), Hong Kong on Friday reported a record jump in new cases as the city-state braces for a wave of new illnesses, many involving travelers from abroad and the HK residents they’ve infected.

    Friday’s surge of 48 cases is the largest daily jump since the outbreak began; it’s equivalent to roughly a quarter of all cases confirmed in the city previously, according to the SCMP.

    Even as the virus swept through parts of China and elsewhere in the region, Hong Kong managed to largely control its outbreak. Now, as life in the financial center had begun to return somewhat to normal, the wave of new cases is worrying experts who say it could lead to widespread community transmission. The city now has more than 250 confirmed infections.

    The new confirmed cases take the city’s total number to 256, and a top microbiologist said Hong Kong might be on the edge of an all-out “war” against an explosion in infections.

    The Centre for Health Protection said 36 of the latest round of infected people, aged between four and 69, had a travel history. One of the local cases is a taxi driver who had picked up passengers from the airport.

    When asked whether the government should ban non-locals from entering the city, Dr Chuang Shuk-kwan, head of the centre’s communicable disease branch, said all the fresh infections were residents, except one – an Australian who had been to the United States and Portugal. He was transiting at the airport and sent to hospital after feeling unwell.

    As SCMP explained, 1,000s of people returned to the city this week, with new asymptomatic spreaders evading checks and spreading the virus inside the city. The spike in new cases prompted the city’s government to announce new quarantine measures requiring anyone arriving from abroad to self-isolate for 14 days, measures that have also been implemented by China. Also in China, the People’s Daily reports that catering halls and shopping malls are reopening in Beijing.

    Whether you trust the Chinese numbers or not, there’s no question that the CCP leadership has reason to be cautious, now that it appears President Xi has evaded a historic embarrassment. According to Johns Hopkins, the number of confirmed cases ROW is now 2x the number from mainland China. Mandatory quarantines and outright bans for foreigners probably aren’t bad ideas.

    Meanwhile, Spanish authorities announced Friday morning that the death toll in the country has broken above 1,000 as citizens near the end of their first full week under an enforced lockdown.

    The country reported 1,903 new cases, and 169 new deaths, raising its total to 19,980 cases and 1,002 dead.

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    Meanwhile, on social media, snippets of video have circulated offering glimpses into the life on lockdown in Madrid and elsewhere around Spain.

    Since the first case of COVID-19 was confirmed in the US, there has been no shortage of bitterly ironic headlines during this outbreak (remember when Rudy Gobert licked all those microphones?). But overnight, Altria Group – one of the largest tobacco companies in the world (it was better known as Phillip Morris before it rebranded a few years back) – said Howard A. Willard III, its Chairman and CEO, has tested positive for COVID-19.

    Let’s hope he’s not a smoker.


    Tyler Durden

    Fri, 03/20/2020 – 22:08

  • How Propaganda Gets Transmitted From China To Leftist Influencers
    How Propaganda Gets Transmitted From China To Leftist Influencers

    Authored by Ian Miles Cheong via HumanEvents.com,

    COVID-19 is not the only thing that comes from China – social justice talking points do too…

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    “Donald Trump is racist.” This charge from the left is neither new or interesting anymore; it’s followed the President around since his escalator ride in 2015. So when the mass-and-social media left rallied around this marquee to challenge the Administration’s insistence that COVID-10, which originated in Wuhan, China, was Chinese, most on the right just rolled their eyes.

    I mean—what else is new? To the left, we’re all racist.

    At Wednesday’s White House press conference, reporters demanded he defend the phrase “Chinese virus.” He provided an unambiguous answer: “It’s not racist. It comes from China,” said the President. “I have great love for all of the people in our country, but China tried to say at one point that it came from American soldiers. That can’t happen. That won’t happen. Not as long as I’m president. It comes from China.”

    https://platform.twitter.com/widgets.js

    Nevertheless, American media elites seem deeply agitated by the phrase “Chinese virus.” “Why do you keep calling this the Chinese virus?” ABC News’ White House reporter Cecilia Vega asked President Trump. “There are reports of dozens of incidents of bias against Chinese Americans in this country. Your own aide, Secretary [Alex] Azar, says he does not use this term. He says ethnicity does not cause the virus. Why do you keep using this?”

    “Because it comes from China,” the President replied. “I want to be accurate.”

    To the Administration, the issue is clear: China must be held into account for the pandemic that’s currently destabilizing the global markets and causing innumerable people to die needless deaths, had they only been transparent about the outbreak and contained it.

    But to the blue checkmark baizuo, this reality falls on deaf ears. With an intensity that extends beyond Trump Derangement Syndrome, social justice thought leaders continue to defend a line that exposes an unbroken and downright dangerous line of transmission from the Chinese Communist Party to Western media, both mass and social.

    Coronavirus is not the only thing that comes from China—social justice talking points do too.

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    SINO … WESTERN PROPAGANDA?

    Chinese state media and media officials have waged a deliberate and malicious campaign to deflect blame for the pandemic, going as far as to spread lies about its origins. Even CNN couldn’t help but notice: “Parts of Chinese social media, and even the country’s government, appear to have launched a concerted campaign to question the origin of the novel coronavirus, which has infected more than 125,000 people globally.”

    Last Friday, Chinese Foreign Ministry spokesman Zhao Lijian tweeted out to his more than 300,000 followers that it was the United States military that possibly brought the disease to China.

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    Zhao republished the March 11th congressional hearing of Robert Redfield, director of the CDC, who said some influenza deaths in the U.S. were later identified as cases of COVID-19. In the clip, Redfield doesn’t mention when those people died or over what time period, but Zhao used his remarks to claim that the coronavirus did not originate in Wuhan.

    He, of course, offered no evidence to substantiate the claim. “It might be US army who brought the epidemic to Wuhan,” he wrote. “Be transparent! Make public your data! US owe us an explanation!” Zhao followed his post with another, this time linking to an article that established, he alleges, “Further Evidence that the Virus Originated in the US.” “Please read and retweet it,” he urged.

    At his urging, the conspiracy theory was republished by Chinese state media, including in the nationally broadcasted CCTV and in the Global Times. On Tuesday, China Xinhua News published a PSA titled “Racism is not the right tool to cover your own incompetence.”

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    Of course, brazen lies and misinformation from CCP officials are hardly surprising – Human Events published reporting as early as January that deception was going to be China’s state policy during the pandemic.

    What was surprising, however, was how readily Western news outlets took the bait. Blatantly uncritical of China’s attempts to dodge responsibility, American news media repeated China’s claim and presented it as evidence of a growing divide within the scientific community on the coronavirus’ origins. Reuters published the propaganda almost word for word:

    “[T]he U.S. military might have brought the coronavirus to the Chinese city of Wuhan, which has been hardest hit by the outbreak, doubling down on a war of words with Washington.”

    The whataboutism in this kind of coverage was galling. In effect, the American press published CCP propaganda.

    Other news outlets celebrated China’s efforts—before the final casualties had even been tallied. NBC News published a piece entitled “Coronavirus in China kept me under quarantine. I felt safer there than back in the U.S.” Portraying China as martyrs to the coronavirus, the New York Times published an op-ed called “China Bought the West Time. The West Squandered it.” Celebrating the CCP’s swift action, Johnson writes, “China had to contend with a nasty, sudden surprise, governments in the West have been on notice for weeks … China’s leaders did fumble at the very start, yet in short order they acted far more decisively than many democratically elected leaders have to date … There’s nothing authoritarian about checking temperatures at airports, enforcing social distancing or offering free medical care to anyone with Covid-19.”

    The final wave of media coverage ran interference for the CCP, arguing that the Trump Administration’s efforts to counter CCP propaganda was, of course, racist. “Republicans are using racism against China to try to distract from Trump’s disastrous coronavirus response,” wrote one publication. According to the New York Times, “Trump Defends Using ‘Chinese Virus’ Label, Ignoring Growing Criticism …. ‘It’s not racist at all,’ the President said. But experts warned that the term could result in xenophobia.” CNN published a piece called, “Trump’s malicious use of ‘Chinese virus’.” (It’s worth noting that both of these outlets, before enlisting in the outrage campaign, referred to the virus as the “Wuhan virus”).

    This coverage, which oscillated between both-side-ism about the facts of COVID-19’s origins to inflaming public sentiment against the President for taking steps to ensure history does not remember this pandemic as the American flu, reveals deeply troubling synchronicity between the CCP and the American press.

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    FIRST COMES THE FAILING NEW YORK TIMES, THEN COMES SJW TWITTER

    The campaign against the “Chinese virus” has shaped up to be one against the President and his efforts to combat Chinese propaganda. At the press briefing, journalists eager to flex their activist muscles by taking President Trump to task for calling the coronavirus by its place of origin. PBS and NBC News reporter Yamiche Alcindor claimed, unsourced, that “someone in the White House” was referring to the Chinese virus as the “Kung Flu.”

    This talking point continued to get circulation despite being completely unfounded.

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    And as the mainstream American media continued to flame the divisive racial politics for the past 48 hours, the social justice Twitterati fell in line.

    Yesterday, Yashar Ali tweeted that:

    “Anyone who is insisting on calling Covid-19 [sic] the ‘Chinese Virus’ will absolutely not have the courage to refer to it that way when they or their loved ones are being treated/saved by Asian doctors and nurses across the country.”

    Some even tried to get “#TrumpVirus” to take:

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    Social justice Twitter is working hard to blame Trump for the coronavirus. Instead of pulling together to ease the panic, urge social distancing and other efforts to combat the virus, and hold China accountable for putting it out in the first place—virtue signalers are unable to put politics aside for even the briefest of moments.

    The clear transmission of misinformation from the mouths of Chinese state officials to the thumbs of tweeting SJWs paints a clear, alarming picture of how placidly the left is willing to absorb and proliferate CCP propaganda.

    Of course, since 2016, the American left has been obsessed with the question of misinformation. Convinced that the election of Donald Trump can only be attributed to Ukrainian click farms, a tremendous amount of focus and money has been invested in exposing how Russia is to blame for the popularity of conservative ideas—populism be damned.

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    The irony of what we are seeing online today is not lost on us.


    Tyler Durden

    Fri, 03/20/2020 – 22:05

  • Tucker Targets Lindsey Graham – Who Wants Trump To Boost Visas To Rich Chinese Amid Corona Crisis
    Tucker Targets Lindsey Graham – Who Wants Trump To Boost Visas To Rich Chinese Amid Corona Crisis

    Tucker Carlson has a new target; Sen. Lindsey Graham (R-SC), who the Fox News host suggested was being paid by lobbyists to push for an expansion of the EB-5 visa program that lets rich Chinese people buy their way into America.

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    “At this very moment, Senator Lindsey Graham of South Carolina is pushing the White House to respond to this epidemic by passing out residency documents to rich Chinese, who by definition have ties to our enemies in the Chinese government,” Carlson said.

    “According to congressional investigators, fraud and criminal activity are rampant in the program – often it’s no more than a money laundering scheme; a few people get rich by selling a path to citizenship for Chinese nationals and their children,” he added.

    (Recall Trump son in law Jared Kushner’s family business came under fire in 2018 for pushing this exact same program.)

    Carlson – who drove three hours from his vacation home in Boca Grande, FL to Mar-a-Lago on March 7 to warn President Trump about the seriousness of coronavirus – added that Graham wants to increase the number of visas to 75,000 per year, a 7x increase, while cutting the cost of entry in half to $450,000.

    Tucker suggests “presumably he’s getting paid by donors to do it.”

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    Tyler Durden

    Fri, 03/20/2020 – 21:45

  • On FDR's Tyrannical Gold Confiscation
    On FDR’s Tyrannical Gold Confiscation

    Authored by Jacob Hornberger via The Future of Freedom Foundation,

    Sometimes people say, “I guess we’ll just have to have a major economic or monetary crisis to wake people up and cause them to want a sound monetary system.”

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    There is one big problem with that refrain, however: A crisis or emergency oftentimes induces people to move in the opposite direction —in the direction of tyranny and oppression.

    That’s because in a major crisis or emergency, people get afraid, so afraid that they are willing to sacrifice their liberty for the pretense of “safety” or “security” that government officials are offering them.

    Of course, the trade is always sold as being “temporary.” As soon as the crisis or emergency is over, government officials say, they promise to restore the rights and liberties of the people.

    A good example of this phenomenon took place in 1933, when President Franklin Roosevelt issued an executive order commanding every American to deliver his gold coins to the federal government. It would be difficult to find a better example of dictatorship and tyranny than that.

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    After all, gold coins and silver coins had been the official money of the American people for more than 125 years. That was the official money established by the Constitution, which gave the federal government the power to “coin” money, not “print” money. The Constitution had also expressly prohibited the states from making anything but gold tender and silver coins legal tender.

    America’s gold-coin, silver-coin standard

    After the Constitution called the federal government into existence, gold coins and silver coins were issued by the U.S. government. It was the soundest monetary system in history. By forsaking paper money and issuing sound, credible gold coins and silver coins, the U.S. government was precluded from plundering and looting people through inflation and monetary debasement for more than a century. America’s gold-coin, silver-coin standard was a major contributing factor of the tremendous increase in economic prosperity and people’s standard of living, especially in the late 1800s and early 1900s.

    Some college professors today teach their students that the “gold standard” was a monetary system in which paper money was backed by gold. Nothing could be further from the truth. There was no paper money. The official money of the American people, as established by their Constitution, consisted of coinage — e.g., gold coins and silver coins.

    The Constitution permitted the federal government to borrow money. Such loans came in the form of federal bills, notes, and bonds. Sometimes people used these debt instruments to transact business. But everyone knew that they were all promises to pay money — i.e., promises to pay gold and silver — not money themselves.

    The Fed and the Great Depression

    In 1929, after a decade of extreme monetary manipulation by the Federal Reserve, which had been called into existence in 1913, the stock market suffered an enormous collapse, an event that led to the crisis and emergency known as the Great Depression.

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    It was that major crisis and economic emergency that Roosevelt seized upon to confiscate the gold-coin holdings of the American people. For some reason, he chose not to also confiscate their silver coins.

    Notice something important about FDR’s action: The Constitution, which provided for a gold-coin, silver-coin monetary system, can only be amended through the process outlined in the Constitution. Roosevelt did not go through that process. Instead, he simply used the emergency to justify his nullification of the Constitution by executive decree. His action is a perfect example of how crises and emergencies can result in tyranny and oppression.

    If an American failed to comply with Roosevelt’s order, he was subject to being targeted by federal officials with arrest, prosecution, a felony conviction, and fine and imprisonment. While there were no doubt some Americans who refused to comply and kept their gold hidden, most Americans dutifully complied with FDR’s command.

    In return, they received Federal Reserve debt instruments. The problem, of course, was that while those debt instruments had previously promised to pay money (i.e., gold or silver), now they were irredeemable. That is, they now effectively promised to pay nothing.

    Moreover, shortly after people turned in their gold, Roosevelt intentionally devalued the debt instruments that people were now holding in relationship to gold. In one fell swoop, he had imposed enormous financial losses for the American people.

    Why did Americans go along with this revolutionary and illegal transformation of their monetary system and this tyrannical and communist-like nationalization of their gold holdings?

    One simple reason: The crisis had made them deathly afraid.

    And when people are overly afraid, they are willing, even eager, to trade away their liberty for the “safety” and “security” that public officials are offering them.

    The welfare-warfare state

    No doubt many Americans convinced themselves that once the crisis or emergency was over, federal officials would restore their gold-coin, silver-coin standard. It never happened. Federal officials were able to use their new paper money standard to finance the ever-burgeoning expenses of the welfare-warfare state way of life that FDR was introducing to America.

    Gradually, as a result of the debasement of paper money from ever-increasing inflation of the money supply, silver coins were driven out of circulation. Today, while Americans are once again permitted to own gold (at least for now), the official money of the American people remains paper money, notwithstanding the express terms of the Constitution.

    With his gold-confiscation scheme, FDR taught Americans a valuable lesson: Emergencies and crises are the time-honored way that people are induced to sacrifice their rights and liberties at the hands of their own government.


    Tyler Durden

    Fri, 03/20/2020 – 21:25

  • Forty Year 'Curse' Strikes Tokyo Olympics
    Forty Year ‘Curse’ Strikes Tokyo Olympics

    Update (1400ET): USA Swimming’s CEO is urging the U.S. Olympic and Paralympic Committee to push for the postponement of the Tokyo Olympics until next year.

    Tim Hinchey wrote to USOPC CEO Sarah Hirshland on Friday to advocate on behalf of his governing body’s 400,000 members.

    Hinchey said athletes’ worlds have been turned “upside down” as they struggle to find ways to continue preparing and training for the games. He wrote that “pressing forward amidst the global health crisis this summer is not the answer.”

    Because of the disruptions in training, Hinchey said going ahead with the Olympics this year “calls into question the authenticity of a level playing field for all.”

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    First, the cancellation in 1940 because of WWII. Then, the boycott in Moscow in 1980. Now a virus crisis in 2020... confirming the forty-year cycle that disrupts the Olympics. 

    Japanese Deputy Prime Minister Taro Aso told the parliamentary committee on Wednesday that the 2020 Tokyo Olympics is “cursed,” reported Reuters.

    Aso said an ominous forty-year cycle disrupts the world’s major sporting events. It started back in 1940 when Japan was preparing to host the summer and winter Olympics, but then the onset of WWII led to the cancellation. 

    Forty years later, in 1980, many countries boycotted the Olympics in Moscow as a protest against the Soviet Union’s war in Afghanistan.

    “It’s a problem that’s happened every 40 years – it’s the cursed Olympics – and that’s a fact,” Aso said.

    Now the outbreak of COVID-19 could postpone the 2020 Olympics. 

    Japan’s Chief Cabinet Secretary Yoshihide Suga stressed on Wednesday that Tokyo still intends to host the Summer Games despite the fast-spreading virus terrorizing the world.  

    Suga is working closely with the International Olympic Committee (IOC) to make sure the Games will go ahead as scheduled, starting on July 24 and continuing through August 9.

    “We’re not making any adjustments to postpone the Games,” Suga told parliament.

    His comments come after deputy head of Japan’s Olympics Committee Kozo Tashima, who is also the president of Japan’s Football Association, tested positive for the virus.

    Dozens of Olympic qualifier matches were suspended this week as top officials say the show must go on. 

    We noted earlier this week that the Spanish Olympic Committee is recommending that the games be delayed.

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    As of Thursday afternoon, Japan has 924 COVID-19 confirmed cases, with 29 deaths, and 150 people have recovered. Even if the pandemic curve is to flatten in the country by summer, the risk is other countries sending athletes from areas where the outbreak is still hard-hitting, could create another health crisis.


    Tyler Durden

    Fri, 03/20/2020 – 21:05

  • US Threatens Families Of Int'l Criminal Court Staff If They Try Americans For War Crimes
    US Threatens Families Of Int’l Criminal Court Staff If They Try Americans For War Crimes

    Authored by Ben Norton via TheGrayZone.com,

    US Secretary of State Mike Pompeo has threatened the family members of International Criminal Court staff, vowing that Washington will take punitive action against them if the court tries American soldiers for war crimes.

    Pompeo also announced an intensification of unilateral US sanctions on Iran and Syria, which are illegal under international law, and which are undermining the countries’ attempts to contain the coronavirus pandemic.

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    In March 2019, the Pompeo State Department threatened to revoke or deny visas to any International Criminal Court (ICC) personnel investigating crimes committed by American forces.

    A year later, on March 5, 2020, the ICC took a defiant step forward, officially approving an investigation into allegations of war crimes and crimes against humanity committed by the US military and CIA in Afghanistan.

    Pompeo responded by angrily condemning the court and its proceedings. His broadside was an apparent attempt at discrediting the institution, which the US government is not a party to.

    In a subsequent State Department press briefing on March 17, Pompeo launched another tirade against the ICC, belittling it as a “so-called court,” a “nakedly political body,” and an “embarrassment.” Pompeo, who previously served as director of the CIA, took the denunciations a step further, threatening the family members of ICC staff.

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    “We want to identify those responsible for this partisan investigation and their family members who may want to travel to the United States or engage in activity that’s inconsistent with making sure we protect Americans,” Pompeo said, according to the US State Department’s official transcript.

    Sarah Leah Whitson, the managing director for research and policy at the Quincy Institute for Responsible Statecraft, drew attention to the “shocking attack” on Twitter. “This isn’t just unlawful collective punishment against family members; it’s not just a disturbing attack on staff of a judiciary — where the US has voted to refer other nations for prosecution; it’s abuse of federal authority to use sanctions against actual wrongdoers,” said Whitson, who previously directed the Middle East and North Africa division at Human Rights Watch.

    Whitson called on Democratic presidential candidates Joe Biden and Bernie Sanders to “condemn this US State Department assault on the staff and FAMILIES of ICC – abuse of sanctions authority in flagrant attack on judicial independence, unlawful collective punishment.”

    This blatant US threat against the family members of International Criminal Court prosecutors is part of a longer historical pattern of Washington attacking multilateral institutions.

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    At the beginning of the George W. Bush administration’s so-called war on terror, in 2002, the US Congress passed a bill called the American Service-Members’ Protection Act — more commonly known as the “Hague Invasion Act.”

    This unprecedented piece of legislation, which has no precedent anywhere else in the world, declares that the US government unilaterally grants itself the right to militarily invade the Hague if a citizen of the United States or any allied country is tried at the court. Nor are Secretary of State Pompeo’s threats the first time US government officials have targeted the family members of international organizations.

    José Bustani, the former director of the Organization for the Prohibition of Chemical Weapons (OPCW), said hardline neoconservative John Bolton, a former under secretary of state for George W. Bush and national security adviser for Donald Trump, threatened him and his family when Bustani negotiated with the Iraqi government to allow in OPCW weapons inspectors.

    “You have 24 hours to leave the organization, and if you don’t comply with this decision by Washington, we have ways to retaliate against you,” Bolton reportedly told Bustani, according to his recollection. “We know where your kids live. You have two sons in New York.”

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    ICC, image via Reuters

    Denigrating the Iranian government as “terrorists” in his State Department press briefing, Mike Pompeo declared new sanctions on the social security investment company of Iran’s military, along with five Iranian nuclear scientists.

    Moreover, Pompeo announced State Department sanctions on nine more entities, in South Africa, Hong Kong, and China, for doing business with Iran.

    He also unveiled new sanctions on Syria’s minister of defense, citing the Syrian army’s battle to retake Idlib, the last remaining insurgent-held territory in the country, which is occupied by a rebranded al-Qaeda affiliate and other extremist Salafi-jihadists, backed by NATO member Turkey.

    US sanctions on Iran have devastated the country’s health infrastructure, greatly exacerbating the coronavirus pandemic. A new study by researchers at the Sharif University of Technology in Tehran warned that millions of people could die due to Covid-19 — which Pompeo repeatedly referred to as the “Wuhan virus” in his press briefing.

    An article by German state broadcaster DW concisely explained how US sanctions have set the stage for mass death in Iran: “Iran’s government applied for a $5 billion (€4.6 billion) loan from the International Monetary Fund (IMF) to fight the epidemic — the first time it has asked the IMF for assistance in over 50 years. Yet, even if it gets the loan, the administration won’t be able to shop for much-needed medical supplies: US sanctions make the banking transactions required to secure even medical supplies and humanitarian goods virtually impossible.”


    Tyler Durden

    Fri, 03/20/2020 – 20:45

  • "I Lost 100%" Of My Business – Seattle Transforms Into 'Ghost Town' Amid Covid-19 Crisis
    “I Lost 100%” Of My Business – Seattle Transforms Into ‘Ghost Town’ Amid Covid-19 Crisis

    An epic collapse of the gig and service economy is underway, Treasury Secretary Steve Mnuchin warned if a trillion-dollar-plus bailout for Americans isn’t seen, tens of millions of Americans could lose their jobs. This collapse is most visible in Downtown Seattle, which has transformed into a ghost town amid strict social distancing measures enforced by the government to flatten the curve to slow down the spread of the virus.

    The Seattle area has become ground zero for Covid-19. Washington state has recorded upwards of 1,000 confirmed cases with 55 deaths. As a result of the outbreak, all bars, entertainment, and recreational facilities have been closed. Restaurants have been shuttered except for take-out food.

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    Governor Jay Inslee has banned gatherings of 250 or more in three counties, including Seattle’s King County, which means all large events and sports seasons have been canceled or postponed; education systems, libraries, and zoos have been closed as well. 

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    Retail outlets, including gas stations, banks, hardware, stores, and shopping centers, will operate with a reduced workforce and shorter hours.

    What this all means is that Seattle’s economy has come to a standstill. A usually vibrant city is nothing more than a ghost town.

    “It’s a ghost town,” Melissa Paulen, 37, a gynecologist at the University of Washington Medical Center, told The Wall Street Journal. “It feels kind of eerie.”

    Using OpenTable restaurant data, customers started avoiding restaurants in early March as virus cases and deaths started to surge.

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    Downtown Seattle is home to more than 300,000 jobs, a 50% increase over the last decade. Many of these jobs are in the service and gig economy.

    One of the most famous areas of all of downtown is Pike Place Market, a farmers’ market and tourist attraction with dozens of shops, had a member of the marketplace test positive for the virus earlier this week. Foot traffic in the marketplace has collapsed in the last several weeks as many avoided the densely trafficked area.

    Traci Calderon, the owner of Atrium Kitchen in the marketplace, said all of her bookings are canceled through July.

    “Some people were talking about losing 70% of their business,” Calderon said, tearing up. “I lost 100%.”

    Near the University of Washington, public parks were full of people to start the week. Social distancing has allowed many people to work at home and take breaks outside.

    Julie Ramone and Nick Vukmer said their neighborhood is vibrant, with millennials forced to work from home.

    “Last week we went to a coffee shop, and it was packed,” Ramone, 30, said.

    Katie Enarson and her husband have spent several weeks at home with their two kids. Enarson said she’s avoiding social gatherings and has been ordering food online.

    Here are some pictures of Downtown Seattle (courtesy Politico):

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    Downtown Seattle

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    Pike Marketplace 

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    Downtown Seattle View via Drone

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    Seattle Starbucks 

    Twitter describes Seattle as a “coronapocolypse:” 

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    What’s happening in Seattle is coming to a major metro area near you…


    Tyler Durden

    Fri, 03/20/2020 – 20:25

  • The Inevitable Outcome Of The Oil Price War
    The Inevitable Outcome Of The Oil Price War

    Authored by Simon Watkins via OilPrice.com,

    One might reasonably posit that when Crown Prince Mohammed bin Salman (MbS) signalled that Saudi Arabia was once again going to produce oil to the maximum to crash oil prices in a full-scale oil price war, Russian President Vladimir Putin probably fell off the horse he was riding bare-chested somewhere in Siberia because he was laughing so much. There is a phrase in Russian intelligence circles for clueless people that are ruthlessly used without their knowledge in covert operations, which is ‘a useful idiot’, and it is hard to think of anyone more ‘useful’ in this context to the Russians than whoever came up with Saudi’s latest ‘plan’. Whichever way the oil price war pans out, Russia wins.

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    In purely basic oil economics terms, Russia has a budget breakeven price of US$40 per barrel of Brent this year: Saudi’s is US$84. Russia can produce over 11 million barrels per day (mbpd) of oil without figuratively breaking sweat; Saudi’s average from 1973 to right now is just over 8 mbpd. Russia’s major oil producer, Rosneft, has been begging President Putin to allow it to produce and sell more oil since the OPEC+ arrangement was first agreed in December 2016; Saudi’s major oil producer, Aramco, only suffers value-destruction in such a scenario. This includes for those people who were sufficiently trusting of MbS to buy shares in Aramco’s recent IPO. Russia can cope with oil prices as low as US$25 per barrel from a budget and foreign asset reserves perspective for up to 10 years; Saudi can manage 2 years at most.

    A key reason why Russia can survive for so much longer than Saudis is actually thanks to MbS himself. Underlining this – and the fact that the Russians do have a very impish sense of humour, as they do – was that Russia’s Energy Minister, Alexander Novak, last week praised the co-operation of the OPEC+ grouping over the past three years, which, he added “had earned Russia 10 trillion rubles [US$140 billion].” Presumably just to highlight the irony of this further, Russia’s Finance Ministry then helpfully chipped in that the accumulated funds from the previous OPEC+ agreements will help Russia to support the ruble and will also help Russia to cope with oil prices as low as US$25 per barrel for up to 10 years. The metaphorical icing on the cake, though, was Novak adding that “we may reach new agreements [with OPEC] if needed”. In practical terms this means that if, in fact, it takes longer than originally thought by Russia for Saudi to go bankrupt and it starts to have any negative impact on Russia, then Moscow will just click its fingers together and Riyadh will come running to sign a new OPEC+ output cap deal.

    But surely, some may say, Saudi stands no chance of going bankrupt? In fact, as highlighted above, Saudi will absolutely go bankrupt if it continues this oil price war. As Saudi Arabia’s own deputy economic minister, Mohamed Al Tuwaijri, stated unequivocally in October 2016 last time that the Saudis tried this exact same ‘strategy’ from 2014 to 2016:

    “If we [Saudi Arabia] don’t take any reform measures, and if the global economy stays the same, then we’re doomed to bankruptcy in three to four years.”

    That is to say, that if Saudi kept overproducing to push oil prices down – just as it is doing right now, yet again – then it would be bankrupt within three to four years. The timeframe has halved for a variety of reasons outlined in my recent piece on this very subject here.

    But what has Russia to gain from Saudi going bankrupt? Economically, it means that Saudi will default on sovereign and corporate debt, will not be able to service its key industries, and will be unable to meet the requirements for its major oil and gas contracts. Simply having less Saudi oil and gas competing in the same space as Russia and its allies – notably Iran and Iraq – would be benefit enough for Russia but there are even bigger added benefits too. One of these is the destruction of the already strained relationship between the U.S. and Saudi Arabia that has endured since 1945. At that time, as analysed in depth in my new book on the global oil markets, the deal that was struck between the then-U.S. President Franklin D. Roosevelt and the Saudi King at the time, Abdulaziz, onboard the U.S. Navy cruiser Quincy in the Great Bitter Lake segment of the Suez Canal was that the U.S. would receive all of the oil supplies it needed for as long as Saudi had oil in place, in return for which the U.S. would guarantee the security both of the country and of the ruling House of Saud.

    Support in the U.S. for the continuation of this relationship has already diminished markedly in the past few years. This change in attitude began in earnest when it came to the U.S. public’s attention that 15 of the 19 hijackers who flew the aeroplanes involved in the ‘9/11’ terrorist atrocity on the U.S. were Saudi nationals. The extent of the Saudi government’s involvement in funding such terrorism appeared front and centre following the overriding on 28 September 2017 by the U.S Congress of former President Barack Obama’s veto of the Justice Against Sponsors of Terrorism Act. That made it possible for families of the victims of the ‘9/11’ terrorist attack to sue the government of Saudi Arabia for damages. Within a short space of time after this reversal, there were seven major lawsuits in federal courts alleging Saudi government support and funding for the ‘9/11’ attack, and more lawsuits are expected.

    Subsequent events have not softened this negative view, with ongoing pressure from the U.S. Congress over the Saudi-led war in Yemen, the cosying up of Saudi to Russia in the OPEC+ grouping, and Lebanese President Michel Aoun’s allegation in 2017 that then-Prime Minister Saad al Hariri had been kidnapped by the Saudis and forced to resign. Matters grew worse with the murder of dissident Saudi journalist, Jamal Khashoggi, on 2 October 2018 at the Saudi consulate in Istanbul, Turkey, which even the CIA concluded was personally ordered by MbS. Such was the shift in sentiment away from Saudi over these years that the U.S. Presidential Administration has come under growing pressure to finally implement the  ‘No Oil Producing and Exporting Cartels Act’ (NOPEC). This bill – which can still be implemented, incidentally (apparently something else that MbS has not taken into consideration) – would make it illegal to artificially cap oil (and gas) production or to set prices, as OPEC and Saudi Arabia do.

    The bill would also immediately remove the sovereign immunity that presently exists in U.S. courts for OPEC as a group and for its individual member states. This would leave Saudi Arabia open to be sued under existing U.S. anti-trust legislation with its total liability being its estimated US$1 trillion of investments in the U.S. This, and all of the other aforementioned events, resulted in MbS being completely unable to find any international listing destination for the Aramco IPO. As highlighted ahead of the IPO in previous articles published in OilPrice.com, Aramco shares are now haemorrhaging value for precisely the key reason cited: that the company would be used as an instrument of government policy – however ill-considered – regardless of the considerations of shareholders.

    Moreover, at the weekend, Aramco posted figures showing a 21 per cent fall in 2019 ‘due to a drop in oil prices’ – and this is before the new price-crashing strategy was put in place by MbS! After the ‘strategy’ announcement, the shares were trading at 15 per cent less than the offer price. In addition, again making a lie of its previous statements, it emerged at the end of last week that, despite its proven ridiculous claims by the Kingdom to boost supplies to levels never before even vaguely attained. Aramco rejected at least three Asian refiners’ (one Korean, one Taiwanese, and one Chinese) requests for additional crude for April, on top of their long-term supply deal.

    So Russia, with Saudi Arabia either in the oil price war or better still bankrupt, benefits either way. The long-term goal of Russia is to control directly or indirectly all of the key players in the Shia crescent of power in the Middle East, including most immediately Lebanon, Syria, Iraq, Iran, and Yemen (via Iran). All of these countries have vast oil and gas reserves and/or useful coastlines for Russian military and commercial needs (Mediterranean access or access to the Arabian Sea). To do this, Russia’s core foreign policy strategy is to create chaos and then project Russian solutions and therefore power into that chaos. In this respect, again, MbS is being very ‘useful’ to the Russians.


    Tyler Durden

    Fri, 03/20/2020 – 20:05

  • Stocks Suffer Worst Week Since Lehman Despite Biggest Fed Bailout Ever
    Stocks Suffer Worst Week Since Lehman Despite Biggest Fed Bailout Ever

    This has been the sharpest market selloff in history…

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    This was the worst week since Lehman (and worst 4 weeks since Nov 1929) for The Dow Jones Industrial Average…(Dow was down 18% during the Lehman week and 17.35% this week)

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    Source: Bloomberg

    Despite The Fed gushing a stunning $307 billion into the markets – almost double its previous biggest liquidity injection (in March 2009)…

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    Maybe it was the ‘stock’ and not the ‘flow’ after all…

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    Source: Bloomberg

    Stocks still have a long way to go to erase all the delusion (compared to actual profits)…

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    Source: Bloomberg

    And if you think stocks already fell too much, think again… Total market cap to GDP is just now retesting the peak of the housing bubble levels!

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    Source: Bloomberg

    As @TaviCosta notes, “This puts into perspective… We truly were at absurd valuations.”

    Never Forget!!

    Chinese markets are mixed since the Wuhan flu began with tech-heavy super-leveraged ChiNext still green as the the megacaps get pummeled…

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    Source: Bloomberg

    In Europe, “Whatever it takes” wasn’t enough…

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    Source: Bloomberg

    Nasdaq remains notably higher since President Trump’s inauguration, S&P is barely higher but The Dow, Transports, and Small Caps are all underwater now (the latter two crushed)…

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    Source: Bloomberg

    And US stocks are testing a serious trendline…

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    Source: Bloomberg

    S&P 500 broke the post-crisis uptrend dramatically…

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    Source: Bloomberg

    With the Median US Stock down over 50% from its highs…

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    Source: Bloomberg

    The US Stock markets have lost almost $30 trillion in the last few weeks…

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    Source: Bloomberg

    And US stock market volatility has not been this extreme since Black Monday in 1987 and Black Monday in 1929…

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    Source: Bloomberg

    Credit markets are utterly collapsing with nothing The fed did this week helping… HY is the worst since the financial crisis, topping 1000bps for the first time since May 2009…

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    Source: Bloomberg

    And HY has a long way to go if it catches up with fundamentals…

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    Source: Bloomberg

    And investment grade credit is getting crushed at a record rate…

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    Source: Bloomberg

    Treasury bond vol has exploded – at its sharpest rate ever…

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    Source: Bloomberg

    Bonds and stocks have completely decoupled, trading down together and breaking the ‘normal’ correlation regime…

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    Source: Bloomberg

    Very volatile week in bond-land but thanks to today’s buying pressure, most of the curve ended lower in yield (dominate dby the short-end) as stocks collapsed…

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    Source: Bloomberg

    On the day, bond yields cratered – 30Y fell a stunning 37bps, the most since 2008; and 10Y fell 30bps, the most since 2009…

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    Source: Bloomberg

    10Y yields were marginally lower on the week (amid a massive 65bps intra-week range) and back below 1.00%…

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    Source: Bloomberg

    Muni yields ended up 60bps today – refusing to improve despite The Fed’s new facility…

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    Source: Bloomberg

    Amid all this carnage, negative-yielding-debt worldwide has evaporates rapidly as bonds have been dumped everywhere (sending yields higher)…

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    Source: Bloomberg

    The dollar is up a stunning 9 days in a row…as the global dollar shortage creates an unstoppable bid every day after Europe opens…

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    Source: Bloomberg

    This is the biggest 9-day surge in the dollar (a shocking 8%-plus) ever – more than when Soros broke the Bank of England…

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    Source: Bloomberg

    Cryptos had a big week, extending gains from last week…

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    Source: Bloomberg

    With Bitcoin up 85% from last week’s lows…

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    Source: Bloomberg

    Absolute carnage in commodities this week as a strong dollar and ugly fundamentals slammed copper and crude…

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    Source: Bloomberg

    Precious Metals were pummeled this week as the dollar soared with Platunum worst and gold best…

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    Source: Bloomberg

    But oil was the real headline on the week – utterly devastated and Putin’s comments today spoiled the party from yesterday’s best day ever… This was WTI’s worst week since 1991…

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    Finally, as a reminder, Santiago Capital explains why The Fed Swap Lines aren’t working… (and in fact are making things worse)…

    https://platform.twitter.com/widgets.js

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    For a month, global stock markets refused to take any notice of the virus that was taking hold in China… not our problem… we’ll be fine… Fed will rescue us… v-shaped recovery… and then…

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    Source: Bloomberg

    And the prediction market says that the Wuhan flu has done what Schiff and the Democrats couldn’t with three years of bullshit narratives…

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    Source: Bloomberg

    And what happens next?

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    Source: Bloomberg

    And this is not very reassuring – as all the chatter of helicopter money has sent USA sovereign credit risk notably higher…

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    Source: Bloomberg


    Tyler Durden

    Fri, 03/20/2020 – 20:00

  • As Iran Hits 20,000 Cases, US Says 'Coronavirus Won't Save You From Sanctions'
    As Iran Hits 20,000 Cases, US Says ‘Coronavirus Won’t Save You From Sanctions’

    Even amid a global pandemic that’s altering daily life as everyone knows it, and with borders shut, markets collapsing, and talk of mobilizing the military domestically, Secretary of State Mike Pompeo is keeping up the administration’s “maximum pressure” campaign on Iran. 

    “The United States sent Iran a blunt message this week: the spread of the coronavirus will not save it from U.S. sanctions that are choking off its oil revenues and isolating its economy,” Reuters reports. 

    Consider too the blunt headline to the report — U.S. to Iran: Coronavirus won’t save you from sanctions. This as a top Iranian health expert warned his fellow citizens to brace for “millions” possibly killed as a result of the deadly pandemic. “Our policy of maximum pressure on the regime continues,” Brian Hook, the US Special Representative for Iranian Affairs, told reporters this week.

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    But as Spencer Ackerman reports, this policy will actually make the Covid-19 spread more dangerous for us all:

    “We are not safe in any place until everyone all over the world is safe,” Paul Anatharajah Tambyah, the president of the Asia-Pacific Society of Clinical Microbiology and Infection, told the Wall Street Journal about a new wave of COVID-19 cases in east Asia.

    “You have to facilitate these medical goods. Anyone who argues otherwise, or does otherwise, is a sociopath or a moron,” [bold mine-DL] said Jarrett Blanc, a former State Department official who monitored Iran’s compliance with the nuclear deal that the Trump administration abandoned. “The U.S. should be busting its ass to make sure permissible medical exports are available to Iran. It’s in our self-interest.”

    The administration gleefully (and fanatically some would say) rolled out with new sanctions this week targeting over a dozen Iran-linked entities and individuals. 

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    There is the ‘option’ of merely temporarily suspending the sanctions, aimed to broad humanitarian aid from the outside, especially concerning badly needed medicines and equipment necessary in fighting Covid-19, which on Friday approached 20,000 confirmed cases (19,644 as of Friday).

    The American Conservative’s Daniel Larison writes:

    The “maximum pressure” campaign is unjust, but to continue it in the midst of a public health disaster is truly sick and twisted. The administration’s refusal to offer sanctions relief at a time like this shows how irrational and malevolent this policy is, and it should make us all realize how senseless and destructive the economic war has been from the start.

    It’s further worth noting that assuming the best case scenario of a quick containment of the pandemic in the rest of the world over the coming weeks or months…

    It remains that if a large country of over 80 million people can’t be allowed to get it under control (with failed efforts exacerbated by Washington imposed economic isolation and the devastating sanctions regimen), this will only continue to put the rest of the globe in danger. 


    Tyler Durden

    Fri, 03/20/2020 – 19:45

  • Boeing Suspends Buybacks And Dividends; CEO Will Work For Free Until End Of The Year
    Boeing Suspends Buybacks And Dividends; CEO Will Work For Free Until End Of The Year

    Boeing thought it could be tricky – again – and after it repurchased tens of billions in stock in the past 7 years…

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    … by issuing record corporate debt …

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    … and making its shareholders extremely rich by sending its price to all time highs, at least until the recent collapse, the company came begging, demanding a $60 billion taxpayer bailout largely to offset the consequences of the above massive debt load, with a warning that if no bailout materialized, the company may, oops, just have to fire thousands of people. And politicians wouldn’t want that, so best give Boeing the money.

    Meanwhile, we learned that even as it was making such bailout demands and implicit threats – which prompted Nikki Haley to resign in disgust at the company’s pathetic panhandling – Boeing had not yet even decided to suspend a dividend to its shareholders, nor halt the buybacks that brought it to this catastrophic place.

    Then, on Thursday, the plan appeared to derail when we learned that lawmakers were pushing back against a Boeing bailout – comparing it to AIG, which also required a rescue to save the company from the consequences of its own greedy, idiotic decisions.

    So, in a desperate attempt to mollify legislators and to avoid further antagonizing the American population which has every right to ask why Boeing should be bailed out instead of forced to raise cash by selling its stock – you know, buybacks in reverse – the company issued a press release in which it “announced several decisions to support the company as it navigates through the COVID-19 pandemic while ensuring the company is positioned for the industry’s recovery.” These include:

    • CEO Dave Calhoun and Board Chairman Larry Kellner will forgo all pay until the end of the year.

    So the company plans on filing for bankruptcy at the end of the year? Got it. Anyway, moving on:

    • The company will suspend its dividend until further notice.
    • Boeing will extend its pause of any share repurchasing until further notice.  The company previously suspended its stock buyback program in April of 2019.

    Well, yeah, of course Boeing – which just drew down on its $13BN revolver – will suspend buybacks and dividends. If it still pursued them in its current state, the whole company would literally be burned down just days before it filed for Chapter 11.

    As for the CEO and Chairman forgoing all pay, how about clawing back billions in bonuses from Boeing C-Suite, starting with Dennis Muilenburg, who not only left the company picking up the pieces on the 737 MAX debacle, a plane which nobody will ever fly so it may as well just scrap it, but whose billions in buybacks assured that he would enjoy massive bonuses year after year, and quietly exit stage left – with all his vested stock no less – just before the shit hit the fan.

    Our take: unless Muilenberg, and his closest execs, are clawed back for all the equity-linked bonuses they made since Boeing started repurchasing its stock in earnest in 2013, there should be no discussion of any bailout, period.

    And just in case legislators do that, the press release also contained the following gentle nudge that “Boeing is drawing on all of its resources to sustain operations, support its workforce and customers, and maintain supply chain continuity through the COVID-19 crisis and for the long term.”

    In other words, unless you bail us out, the “workforce” gets it. The same workforce that the company cared so much about, it decided to bury it until $25 billion in debt.


    Tyler Durden

    Fri, 03/20/2020 – 19:30

  • The Economics Of Cruise Ships (& Why They Don't Deserve A Bailout)
    The Economics Of Cruise Ships (& Why They Don’t Deserve A Bailout)

    Authored by Zachary Crockett via TheHustle.co,

    In the wake of coronavirus and tanking stocks, cruise companies have sought assistance from the US government. But for decades, the industry has done everything in its power to avoid paying into the system.

    Cruise ships are often called “monsters” of the sea.

    If you’ve ever seen one in action, you’ll understand why: A vessel like Royal Caribbean’s Symphony of the Seas is longer than 12 blue whales. At 228k gross tons, it is 5x the size of the once-formidable Titanic. It can hold 6,680 passengers and 2,200 crewmembers, the population of a small American town.

    In 2018, 28.5m passengers — the bulk of them from America — spent more than $46B on cruises globally. The biggest players see annual profits in the billions.

    But cruise companies have done more to earn the “monster” moniker than churning out huge ships and market gains.

    For decades, these companies have utilized century-old loopholes to avoid paying corporate taxes. They’ve gone to great lengths to bypass US employment laws, hiring foreign workers for less than $2/hour. They’ve sheltered themselves as foreign entities while simultaneously benefitting from US taxpayer-funded agencies and resources.

    Now, in the wake of a coronavirus crisis that has sunk cruise stocks by double digits, these companies are lobbying for federal assistance.

    To better understand the dynamics of this wild industry, we spoke with maritime lawyers, legislators, and cruise experts in 3 countries.

    The cruise industry at large

    Before we get into how cruise companies circumvent US taxes and regulations, let’s take a quick look at the major players, the money they make, and how they make it.

    The global market comprises dozens of cruise lines and more than 250 ships. But 3 players — Carnival Corporation & PLC, Royal Caribbean Cruises LTD, and Norweigan Cruise Line HLD — control roughly 75% of the market.

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    Zachary Crockett / The Hustle

    These companies, which preside over an empire of subsidiary cruise lines, collectively raked in $34.2B in revenue in 2018.

    Cruise ships make this money through two channels: Ticket sales and onboard purchases (e.g., alcoholic drinks, casino gambling, spa treatments, art auctions, and shore excursions), which passengers pay for with pre-loaded cruise cards and chip-equipped wristbands.

    On average, tickets account for 62% of total revenue and onboard purchases make up the remaining 38%.

    Though tickets represent a majority of revenue, onboard purchases account for the lion’s share of the profit, according to several experts.

    As a high fixed-cost business, a cruise ship relies on getting as many passengers as possible on the ship — even at fire-sale rates. The major cruise lines will often fill each ship to 105%-110% capacity, then upsell its captive consumers on additional services.

    “They have mastered the ability to get their hands into people’s pockets and to take out every last dollar,” says Ross A. Klein, a professor at Memorial University of Newfoundland, who has closely studied the cruise ship industry.

    “They can almost give a cabin away for free and still make a profit.”

    Despite sizeable overhead costs — which include travel agent commissions, fuel, marketing, and payroll — these large crowds yield handsome profits. Industry-wide, cruise lines enjoy net margins of 17%, nearly double the average of some comparably large hotel chains:

    • Carnival: $3.2B net profit (17% margin)

    • Royal Caribbean: $1.8B net profit (19% margin)

    • Norwegian: $955m net profit (16% margin)

    To make these figures a bit more relatable, here’s what this works out to on a per-passenger level for a 7-day cruise:

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    Zachary Crockett / The Hustle

    On average, a passenger will spend $1,060 ($151/day) on a ticket and $650 ($92/day) on onboard purchases. After subtracting overhead costs, a ship will make out with roughly $291 in net profit per passenger, per cruise.

    That means that at full capacity, a single ship like Royal Caribbean’s Symphony of the Seas might make $9.8m in revenue ($1.7m of which is profit) during one 7-day excursion. That’s $239k in profit per day at sea.

    As 50% of this money comes from American travelers, one might expect the cruise industry to be a substantial contributor to the US tax system.

    But there’s a catch: These companies aren’t technically American. And they harbor what one legal expert calls a “dirty little secret.”

    How cruise companies avoid paying US taxes

    Carnival, Royal Caribbean, and Norwegian all have headquarters in Miami, Florida, a city that brands itself as the “Cruise Capital of the World.”

    With this homeland base, a large foundation of US customers, and red, white and blue logos, these cruise lines have manufactured an identity as authentically American corporations. President Trump has even called them a “great US business.”

    Legal paperwork tells a different story.

    International law requires every ship to register with a country and fly its insignia in open waters. A ship is only subject to the laws of the country it is registered in.

    Under an obscure, 99-year-old section of the US tax code, cruise companies are able to register their ships with countries that have more lenient laws than the US — an act called flying a “flag of convenience” — and avoid paying into the US tax system.

    It’s a tax loophole big enough to drive a cruise ship through.

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    Zachary Crockett / The Hustle

    The cruise industry isn’t alone in avoiding Uncle Sam: US companies use offshore accounts to avoid paying an estimated $90B-per-year in taxes.

    But it is especially adept at the practice: Carnival is incorporated in Panama and flies the flags of Panama and the Bahamas; Norwegian is incorporated in, and flies the flag of, the Bahamas; Royal Caribbean has been incorporated in Liberia since 1985, and flies the flags of the Bahamas and Malta.

    These impoverished countries often compete with each other to offer cruise lines the cheapest services, much like many US cities groveled for Amazon’s HQ2 by offering large tax cuts.

    “Cruise lines want to register somewhere where they pay no taxes, are exempt from labor and wage statues, and don’t have to follow health and safety codes,” says Jim Walker, a Miami-based maritime lawyer.

    “They’re looking for a place that will leave them alone, not oversee their operations.”

    For the most part, that’s what cruise companies have gotten: According to annual report filings, the major cruise lines pay an average tax rate of 0.8% — for below the 21% US corporate tax rate.

    The benefits of such arrangements are nominal for the countries that register the ships.

    Cruise lines will generally pay a small head tax ($4-$15 per passenger) to call on a port. According to Klein, these countries often spend more on maintaining facilities for cruise ships than they make through the fees.

    They might also promise a boost to the economies they frequent. But Klein says they work out deals with local vendors where they take up to 70% of the onshore revenue — and studies have shown that local populations in foreign ports don’t get much out of such partnerships.

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    A cruise ship employee cleans a slot machine onboard MSC cruises’ Magnifica in Saint-Nazaire (FRANCK PERRY/AFP via Getty Images)

    Registering ships abroad also shelters cruise companies from US employment and safety laws.

    Cruise ships hire crew members from Southeast Asia, Eastern Europe, and  “anywhere else you can find people willing to work for nothing,” and demand grueling workloads in exchange for comparatively paltry wages.

    The standard contract for a crew member like a cleaner or dishwasher requires a mandatory 308 hours per month — 11 hours a day, 7 days a week, for as long as 8-10 months, with no days off — for the equivalent of $400-700 per month, or $1.62 to $2.27 per hour.

    Unprotected by labor laws and regulations, crew members who get injured on the job are swiftly replaced, like “fungible goods.”

    In its latest report, the Cruise Lines International Association, an influential trade group, argues that the cruise industry has a $52.7B “total economic impact” on the US economy and “supports” 421k American jobs. But Klein says it’s unclear what goes into calculating these figures.

    The Hustle asked several major cruise lines to comment on the concerns raised in this article. None of the companies responded.

    There is one thing the cruise industry has been expeditious about doing on US soil: Lobbying to keep its exemptions in place.

    According to the nonprofit Open Secrets, the cruise industry spent $66.2m in lobbying fees between 1998 and 2019. It also made contributions of at least $1.1m to candidates in cruise ship states, including $29.5k to a US representative from Florida who chairs the Panama Caucus, and $23.5k to a senator who fought to blockade a cruise tax.

    $813,807 for a single taxpayer-funded rescue effort

    While cruise ships avoid paying US taxes, they simultaneously benefit from the services of taxpayer-funded federal agencies.

    Professor Klein, who has testified before Congress on matters of cruise ship safety, says that in the past 25 years:

    • 361 passengers have fallen overboard on cruise ships (14 per year)

    • 353 gastrointestinal/norovirus outbreaks have broken out on cruise ships

    • 500+ environmental violations have been charged to cruise ships

    In many of these cases, US agencies have to intervene — and taxpayers, not cruise companies, usually eat the cost.

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    Rescue teams search for survivors on the Costa Concordia, which struck a rock off the Italian coast in 2012 (Target Presse Agentur Gmbh/Getty Images)

    Klein has filed open-records requests and obtained documents on the companies, which he shared with The Hustle. They show that a single cruise ship passenger rescue effort can cost the US Coast Guard and the US Navy from $500k to $1m+. One 2009 search for a woman who fell overboard off the coast of Florida set the Coast Guard back $813,807.

    When ships go dead in the water — as was the case with Carnival’s Splendor fire in 2010 and its Triumph disaster in 2013 — these costs can balloon to $5m+.

    Walker, the maritime lawyer, adds that, in certain cases, cruise ships also require the resources of taxpayer-funded agencies like the US Public Health Service, Centers for Disease Control and Prevention, United States Citizenship and Immigration Services, and US Customs and Border Protection.

    What does this all mean in the context of coronavirus?

    In the wake of a COVID-19 pandemic that has infected more than 157k and killed at least 5.8k people worldwide (as of March 14), the hospitality industry is reeling.

    Cruise ships — often called “floating petri dishes,” for their adeptness at spreading illnesses — have been hit especially hard. After at least 21 passengers tested positive for COVID-19 aboard Carnival’s Grand Princess, the State Department urged the public to “not travel by cruise ship.”

    Customers clamored to cancel trips and cruise stocks fell by 60% — the worst stock performance on record for the industry. 

    Initially, some cruise lines attempted to weather the storm by selling tickets at all costs. According to emails obtained by the Miami New Times, salespeople at Norwegian were instructed to respond to coronavirus-inquiring customers with scripted one-liners, like “The only thing you need to worry about for your cruise is do you have enough sunscreen?”

    When we called the company’s booking hotline last week, a salesperson told us that coronavirus doesn’t exist in tropical climates.

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    Zachary Crockett / The Hustle

    Some major lines have since self-imposed suspensions on cruise trips to and from US ports for up to 60 days — a move that further imperils their revenue.

    The Trump administration has hinted at a potential bailout, and the Cruise Lines International Association is urging its 43k travel agent partners to call the White House to express their support for the industry.

    Critics like Klein aren’t having it.

    “They pay no taxes and now they want taxpayer support?” he says.

    “What happened to laissez-faire capitalism?”

    But as federal aid begins to look unlikely, some cruise operators have shifted their pleas to a different set of ears.

    In a video posted to Twitter, Jan Swartz, the President of Carnival’s Princess cruise line, called on the American public to help guide the company through dark waters.

    “We ask you to book a future Princess cruise to your dream destination as a sign of encouragement for our team,” she wrote. “With your support we will emerge from this time of trial even stronger.”


    Tyler Durden

    Fri, 03/20/2020 – 19:25

  • "Unparalleled Challenge" – Inside America's First Locked-Down Major City, "Everything's Out Of Our Control"
    “Unparalleled Challenge” – Inside America’s First Locked-Down Major City, “Everything’s Out Of Our Control”

    The number of confirmed COVID-19 cases in the US has more than doubled in the last several days. California Governor Gavin Newsom has issued a state-wide “stay at home” order amid the virus outbreak – the strongest and most restrictive measure passed by a governor yet.

    On Tuesday, there were about 5,700 confirmed cases in the US. But by Thursday the number exploded to 11,500. Now, on Friday morning, confirmed cases stand at 14,000.

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    The announcement comes after San Francisco and the surrounding Bay Area issued ‘shelter in place’ orders after a surge of deaths and confirmations in the state. As of Friday morning, there are 18 virus-related deaths.

    Several days into one of the most extreme lockdowns, Bay Area residents have been forced to stay at home, only allowed to leave for essential travel, such as shopping for groceries, medications, fuel, caring for others, and exercise. 

    NBC News spoke with one resident, Trish Tracey, who had to shutter her restaurant on Tuesday in the Mission district. She laid off her entire kitchen staff of 17 employees and has tried to renegotiate her lease. 

    “Everything is out of our control,” Tracey said.

    The uncertainty of where the city is in the pandemic curve has left everyone confused. Strict social distancing rules have been enforced to slowdown infections to prevent local hospitals from becoming overburden with virus patients.

    “The goal is to get up and running again and put all my employees back to work,” Tracey said. “I wish I could say with certainty that would happen, and I’m very determined, and I lasted five years because of that, but everything is on pretty shaky ground right now.”

    The mass lockdown in San Francisco is serving as the blueprint of how other local governments in the state might have to resort to Martial law-style lockdowns. Other states, such as New York and Maryland, could be days or weeks away from a major lockdown to flatten the curve.

    Bay Area hospitals have started seeing an influx of COVID-19 patients in recent weeks:

    “This is a challenge unparalleled to any challenge I have faced in the last 28 years of my career,” Dr. Baldev Singh, a pulmonary critical care physician in nearby San Jose.

    Singh warned that the local hospital system could experience a worker shortage.

    “Protecting your teammates is as important as ever, as the number of infected individuals needing support is anticipated to exceed the number of healthy providers able to serve those in need.”

    Another problem for local hospitals is an influx of virus patients could lead to a shortage of hospital beds and ICU-level treatment for the most vulnerable, and this is the point when mortality rates could surge.

    On Thursday, Newsom estimated 56% of the state’s population, about 25.5 million people, will become infected.

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    As the local economy grinds to a halt, tens of thousands of people have already lost their jobs, grocery stores run out of food, millions forced to shelter in place and watch Netflix, and the hospital system at risk of being overrun with patients, here are some views inside America’s first locked-down city:

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    And as we’ve noted before, when a city or region misses the containment window by implementing social distancing measures too late, cases and deaths tend to surge, residents become anxious, and what happens next just like what’s about to occur in the UK, is that the Bay Area could soon see troop deployment on streets to maintain order.


    Tyler Durden

    Fri, 03/20/2020 – 19:05

Digest powered by RSS Digest

Mar 20

Today’s News 20th March 2020

  • British Doc: "Right Now, It Feels Like We're Heading Into The Abyss"
    British Doc: “Right Now, It Feels Like We’re Heading Into The Abyss”

    The UK government is now considering a partial lockdown in London to slow down the spread of COVID-19. Over 10,000 troops have been told they could deploy at any given time if social order deteriorates. The hospital system is being pushed to its “breaking point” with an influx of virus patients, all as the economy crashes.

    On March 16, we noted that the UK missed the “critical containment window” to suppress the epidemic curve. Now cases and deaths are surging. It was also said that hospital beds and ICU-level treatment were nearing full capacity, indicating that the hospital system is nearing the point of being overwhelmed, which would result in a jump of the mortality rate.

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    Dr. Jessica Potter, a respiratory specialist in the UK’s National Health Service (NHS), confirmed our thoughts in a recent New York Times op-ed piece, where she said hospitals across the UK “are overwhelmed” and “on the brink of collapse.”

    As people with the coronavirus flood our corridors, hospitals will be pushed to the breaking point. Britain is a rich country and may fare better than others. But the NHS is creaking at the seams after years of underfunding. A decade of cuts by successive Conservative governments has stripped the service of resources. Staff morale is low and retention is poor. We are already working at capacity.

    When our hospitals are overwhelmed and we have to decide how to allocate scarce resources, how do we choose whom to ventilate and whom not to? Italy is nearly at that point, and its health service has many more intensive-care beds per person than Britain’s. Will I have to tell someone we can’t treat a loved one because we’re out of ventilators, oxygen, tubes, masks, hospitals, staff? Will we then impose an age limit, as some hospitals in Italy are considering, or will some notion of “deservingness” come into play?

    Potter said there is much uncertainty surrounding where the country is in the epidemic curve:

    But I worry about how we know where we are on the epidemic curve. Have we tested enough people? What if lockdown comes too late? Will we be overwhelmed too soon? Across the NHS this winter there have been patients in corridors and canceled surgeries. How many people will die because we’ve been working on the brink of collapse for too long?

    She warned that the hospital system could struggle to treat the most vulnerable: 

    Britain has fewer intensive-care beds than most other European countries. Occupancy rates are high, and there’s a daily struggle to discharge enough people to make space for new patients. Even when a bed is available, we do not have the nurses to staff it. A decade of cuts and underfunding has left us dangerously exposed. This is the perpetual winter of the NHS.

    Potter said, “right now, it feels like we’re heading into the abyss.” And that is right because the hospital system is at near full capacity, no one knows where the country stands on the epidemic curve, and until a complete lockdown of the country is seen, the virus will continue spreading. 

    If you thought UK’s collapsing hospital system was terrible, the economy has also crashed, resulting in the Bank of England to make a statement that said it would print unlimited amounts of money. 

    A secret government document was leaked earlier this week that said 80% of Britons could be infected, and the virus would not clear out of the country until Spring 2021. 


    Tyler Durden

    Fri, 03/20/2020 – 02:45

  • How The European Union Turned The Coronavirus Into A Pandemic
    How The European Union Turned The Coronavirus Into A Pandemic

    Authored by Con Coughlin via The Gatestone Institute,

    The emergence of Europe as the new epicentre of the coronavirus pandemic has as much to do with the European Union’s inept handling of the crisis as it does with the resilience of the virus itself.

    When the world first learned about the existence of coronavirus in China at the start of the year, the EU’s response, like much of the rest of the world’s, was to adopt a wait and see approach as to how it developed.

    The problem for the EU, though, is that it has maintained this lackadaisical approach long after it became clear that the virus was going to develop into a global, rather than a specifically Chinese, issue. More pertinently, the EU’s failure to raise its game, after the rapid spread of the virus resulted in much of Europe coming to a standstill, means that the EU is now trying to play catch-up in terms of asserting a leadership role.

    After weeks of prevarication, the EU finally imposed measures to ban travellers from outside the bloc for 30 days. The measure is expected to apply to 26 EU states as well as Iceland, Liechtenstein, Norway and Switzerland. The ban will not apply to citizens from the UK and Ireland.

    “This is good,” commented European Commission President Ursula von der Leyen as she announced the new measures earlier on March 18.

    “We have a unanimous and united approach [where] the external borders are concerned.”

    That it has taken until now for the EU to act, when so many major European countries such as France, Italy and Spain are already in lockdown, illustrates the inadequacy of the EU’s response to the crisis. It also helps to explain why Europe has replaced Asia as the main epicentre of the pandemic.

    By the time Mrs von der Leyen finally got around to announcing at the start of this week that the EU was planning to impose its travel ban, most member states had already taken matters into their own hands and made their own arrangements to restrict border access.

    Moreover, by undertaking their own unilateral actions, the decision by some EU member states, such as Austria and the Czech Republic, to specifically ban citizens from other EU states, such as neighbouring Italy, represents a flagrant breach of one of the EU’s key founding principles, namely the free movement of its citizens across the borders of other member states.

    Consequently, the EU’s failure to address the coronavirus issue earlier has resulted in the Schengen Agreement, which stipulates that the citizens of any EU state can travel freely throughout the union, becoming null and void.

    The EU’s commitment to Schengen was one of the key factors that persuaded U.S. President Donald Trump to impose his initial travel ban on continental Europe, claiming — correctly — that the EU was being far too complacent in its response to tackling the virus.

    Now, thanks to the EU’s ineptitude, the union has entered a new era in which the precedent has been established whereby it is the governments of the various constituent member states, and not Brussels, that decide who can, and who cannot, cross their borders.

    The sudden imposition of new border controls in Europe is already having a serious impact on the trading arrangements between different EU member states. This week, for example, trucks trying to enter Poland from Germany have been subjected to a tailback dozens of kilometres long, as Polish border guards insisted on checking the temperatures, health and documentation of drivers seeking to enter the country.

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    Moreover, the EU’s inability to provide effective leadership in terms of responding to the coronavirus challenge has led to an increase in tensions between key member states, tensions that could ultimately threaten the survival of the EU in its current manifestation.

    Perhaps the most shameful episode concerning inter-EU relations since the start of the coronavirus outbreak was Germany’s refusal to allow the export of much-needed face masks and ventilators to Italy after the Italian government made a direct appeal to the rest of the EU for help. Instead of demonstrating the so-called solidarity that is supposed to underpin the EU’s founding ethos, the German government issued a ban on the export of the equipment to Italy.

    It was left to the Chinese government to provide the Italians with 31 tons of urgent medical supplies.

    The EU’s handling of the coronavirus has not just been incompetent. It raises serious questions as to whether it is about to become yet another victim of the deadly pandemic.


    Tyler Durden

    Fri, 03/20/2020 – 02:00

  • 50 New Infections Every Hour In Iran, One Death Per 10 Minutes: Health Ministry
    50 New Infections Every Hour In Iran, One Death Per 10 Minutes: Health Ministry

    Despite that between Tuesday and Wednesday of this week Iran witnessed its biggest ever single-day spike in Covid-19 cases, authorities are still struggling to get everyone to observe quarantine and self-isolation measures, especially after throngs of hardline Shia demonstrators have gathered to protest the closure of two of the country’s holiest shrines in the city of Qom. 

    Toward this end, Iran’s Health Ministry spokesman Kianush Jahanpur made an astounding statement to put things in perspective, saying the current soaring numbers show that—

    “In Iran, every ten minutes one person dies from the coronavirus, 50 get infected.” 

    He added in the Twitter statement “And every 10 minutes one person dies.”

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    He further urged citizens to think about this extreme risk every time they break national directives and go out to visit people or travel to other cities. 

    This as on Thursday the national number of cases climbed to 18,407 — a jump of 1,046 cases from the day prior. 

    The death toll in Iran from the coronavirus outbreak has risen to 1,284, state media reported on Thursday, among those 149 people dying of the virus in the last 24 hours, with 1,046 new cases emerging.

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    Earlier this week another top health official issued an ‘extreme scenario’ warning in order to urge citizens to stay home, saying he expects “millions” of Iranians to die of the disease.

    Among other drastic measures the country has implemented, Tehran says it’s now temporarily sent some 85,000 prisoners home to ensure the pandemic doesn’t rip through the nation’s overcrowded prisons and jails. 

    Some countries in the West, including cities across the United States, are actually considering the temporary release of non-violent offenders from local jails for the sake of preventing the spread. 


    Tyler Durden

    Fri, 03/20/2020 – 01:00

  • Escobar: China Locked In Hybrid War With US
    Escobar: China Locked In Hybrid War With US

    Authored by Pepe Escobar via The Asia Times,

    Fallout from Covid-19 outbreak puts Beijing and Washington on a collision course…

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    Among the myriad, earth-shattering geopolitical effects of coronavirus, one is already graphically evident. China has re-positioned itself. For the first time since the start of Deng Xiaoping’s reforms in 1978, Beijing openly regards the US as a threat, as stated a month ago by Foreign Minister Wang Yi at the Munich Security Conference during the peak of the fight against coronavirus.

    Beijing is carefully, incrementally shaping the narrative that, from the beginning of the coronovirus attack, the leadership knew it was under a hybrid war attack. Xi’s terminology is a major clue. He said, on the record, that this was war. And, as a counter-attack, a “people’s war” had to be launched.

    Moreover, he described the virus as a demon or devil. Xi is a Confucianist. Unlike some other ancient Chinese thinkers, Confucius was loath to discuss supernatural forces and judgment in the afterlife. However, in a Chinese cultural context, devil means “white devils” or “foreign devils”: guailo in Mandarin, gweilo in Cantonese. This was Xi delivering a powerful statement in code.

    When Zhao Lijian, a spokesman for the Chinese Foreign Ministry, voiced in an incandescent tweet the possibility that “it might be US Army who brought the epidemic to Wuhan” – the first blast to this effect to come from a top official – Beijing was sending up a trial balloon signaliing that the gloves were finally off. Zhao Lijian made a direct connection with the Military Games in Wuhan in October 2019, which included a delegation of 300 US military.

    He directly quoted US CDC director Robert Redfield who, when asked last week whether some deaths by coronavirus had been discovered posthumously in the US, replied that “some cases have actually been diagnosed this way in the US today.”

    Zhao’s explosive conclusion is that Covid-19 was already in effect in the US before being identified in Wuhan – due to the by now fully documented inability of US to test and verify differences compared with the flu.

    Adding all that to the fact that coronavirus genome variations in Iran and Italy were sequenced and it was revealed they do not belong to the variety that infected Wuhan, Chinese media are now openly asking questions and drawing a connection with the shutting down in August last year of the “unsafe” military bioweapon lab at Fort Detrick, the Military Games, and the Wuhan epidemic. Some of these questions had been asked – with no response – inside the US itself.

    Extra questions linger about the opaque Event 201 in New York on October 18, 2019: a rehearsal for a worldwide pandemic caused by a deadly virus – which happened to be coronavirus. This magnificent coincidence happened one month before the outbreak in Wuhan.

    Event 201 was sponsored by Bill & Melinda Gates Foundation, the World Economic Forum (WEF), the CIA, Bloomberg, John Hopkins Foundation and the UN. The World Military Games opened in Wuhan on the exact same day.

    Irrespective of its origin, which is still not conclusively established, as much as Trump tweets about the “Chinese virus,” Covid-19 already poses immensely serious questions about biopolitics (where’s Foucault when we need him?) and bio-terror.

    The working hypothesis of coronavirus as a very powerful but not Armageddon-provoking bio-weapon unveils it as a perfect vehicle for widespread social control – on a global scale.

    Cuba rises as a biotech power

    Just as a fully masked Xi visiting the Wuhan frontline last week was a graphic demonstration to the whole planet that China, with immense sacrifice, is winning the “people‘s war” against Covid-19, Russia, in a Sun Tzu move on Riyadh whose end result was a much cheaper barrel of oil, helped for all practical purposes to kick-start the inevitable recovery of the Chinese economy. This is how a strategic partnership works.

    The chessboard is changing at breakneck speed. Once Beijing identified coronavirus as a bio-weapon attack the “people’s war” was launched with the full force of the state. Methodically. On a “whatever it takes” basis. Now we are entering a new stage, which will be used by Beijing to substantially recalibrate the interaction with the West, and under very different frameworks when it comes to the US and the EU.

    Soft power is paramount. Beijing sent an Air China flight to Italy carrying 2,300 big boxes full of masks bearing the script, “We are waves from the same sea, leaves from the same tree, flowers from the same garden.” China also sent a hefty humanitarian package to Iran, significantly aboard eight flights from Mahan Air – an airline under illegal, unilateral Trump administration sanctions.

    Serbian President Aleksandar Vucic could not have been more explicit: “The only country that can help us is China. By now, you all understood that European solidarity does not exist. That was a fairy tale on paper.”

    Under harsh sanctions and demonized since forever, Cuba is still able to perform breakthroughs – even on biotechnology. The anti-viral Heberon – or Interferon Alpha 2b – a therapeutic, not a vaccine, has been used with great success in the treatment of coronavirus. A joint venture in China is producing an inhalable version, and at least 15 nations are already interested in importing the therapeutic.

    Now compare all of the above with the Trump administration offering $1 billion to poach German scientists working at biotech firm Curevac, based in Thuringia, on an experimental vaccine against Covid-19, to have it as a vaccine “only for the United States.”

    Social engineering psy-op?

    Sandro Mezzadra, co-author with Brett Neilson of the seminal The Politics of Operations: Excavating Contemporary Capitalism, is already trying to conceptualize where we stand now in terms of fighting Covid-19.

    We are facing a choice between a Malthusian strand – inspired by social Darwinism – “led by the Johnson-Trump-Bolsonaro axis” and, on the other side, a strand pointing to the “requalification of public health as a fundamental tool,” exemplified by China, South Korea and Italy. There are key lessons to be learned from South Korea, Taiwan and Singapore.

    The stark option, Mezzadra notes, is between a “natural population selection,” with thousands of dead, and “defending society” by employing “variable degrees of authoritarianism and social control.” It’s easy to imagine who stands to benefit from this social re-engineering, a 21st century remix of Poe’s The Masque of the Red Death.

    Amid so much doom and gloom, count on Italy to offer us Tiepolo-style shades of light. Italy chose the Wuhan option, with immensely serious consequences for its already fragile economy. Quarantined Italians remarkably reacted by singing on their balconies: a true act of metaphysical revolt.

    Not to mention the poetic justice of the actual St. Corona (“crown” in Latin) being buried in the city of Anzu since the 9th century. St. Corona was a Christian killed under Marcus Aurelius in 165 AD, and has been for centuries one of the patron saints of pandemics.

    Not even trillions of dollars raining from the sky by an act of divine Fed mercy were able to cure Covid-19. G-7 “leaders” had to resort to a videoconference to realize how clueless they are – even as China’s fight against coronavirus gave the West a head start of several weeks.

    Shanghai-based Dr. Zhang Wenhong, one of China’s top infectious disease experts, whose analyses have been spot on so far, now says China has emerged from the darkest days in the “people’s war” against Covid-19. But he does not think this will be over by summer. Now extrapolate what he’s saying to the Western world.

    It’s not even spring yet, and we already know it takes a virus to mercilessly shatter the Goddess of the Market. Last Friday, Goldman Sachs told no fewer than 1,500 corporations that there was no systemic risk. That was false.

    New York banking sources told me the truth: systemic risk became way more severe in 2020 than in 1979, 1987 or 2008 because of the hugely heightened danger that the $1.5 quadrillion derivative market would collapse.

    As the sources put it, history had never before seen anything like the Fed’s intervention via its little understood elimination of commercial bank reserve requirements, unleashing a potential unlimited expansion of credit to prevent a derivative implosion stemming from a total commodity and stock market collapse of all stocks around the world.

    Those bankers thought it would work, but as we know by now all the sound and fury signified nothing. The ghost of a derivative implosion – in this case not caused by the previous possibility, the shutting down of the Strait of Hormuz – remains.

    We are still barely starting to understand the consequences of Covid-19 for the future of neoliberal turbo-capitalism. What’s certain is that the whole global economy has been hit by an insidious, literally invisible circuit breaker. This may be just a “coincidence.” Or this may be, as some are boldly arguing, part of a possible, massive psy-op creating the perfect geopolitlcal and social engineering environment for full-spectrum dominance.

    Additionally, along the hard slog down the road, with immense, inbuilt human and economic sacrifice, with or without a reboot of the world-system, a more pressing question remains: will imperial elites still choose to keep waging full-spectrum-dominance hybrid war against China?


    Tyler Durden

    Thu, 03/19/2020 – 23:45

  • "He Must Resign From The Senate And Face Prosecution": Tucker Carlson Blasts Burr For Liquidating Stock While Downplaying COVID
    “He Must Resign From The Senate And Face Prosecution”: Tucker Carlson Blasts Burr For Liquidating Stock While Downplaying COVID

    Fox News‘s Tucker Carlson had some serious words for Sen. Richard Burr (R-NC), who sold off a significant percentage of his stocks on February 13 – raising between $628,000 and $1.72 million in 33 separate transactions.

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    Carlson noted Burr sold “more than a million dollars in stock in mid-February after learning how devastating the Chinese coronavirus could be.

    “He had inside information about what could happen to our country – which is now happening – but he didn’t  warn the public. He didn’t give a prime time address. He didn’t go on television to sound the alarm. He didn’t even disavow an op-ed he’d written just ten days before claiming America was ‘better prepared than ever for coronavirus.”

    Instead what did he  do? He dumped his shares in hotel so he wouldn’t lose money. And then he stayed silent.

    Now maybe there’s an honest explanation for what he did. If there is, he should share it with the rest of us immediately. Otherwise, he must resign from the Senate and face prosecution for insider trading. There is no greater moral crime than betraying your country in a crisis, and that appears to be what happened.”  -Tucker Carlson

    Perhaps Burr was simply reading Zero Hedge’s coronavirus coverage?

    Watch:

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    Meanwhile, a second Senator has come under fire for similarly selling stocks before the market took a dive – selling between $1,275,000 and $3,100,000 between January 24 and February 14.

    Sen. Kelly Loeffler, R-Ga., has become the second lawmaker to have reportedly sold stock weeks before the coronavirus outbreak triggered a stock market downfall.

    The Daily Beast reported on Thursday that Loeffler sold stock that was owned by her and her husband and January 24, which was the same day she sat in on a closed-door coronavirus briefing as a member of the Senate Health Committee with the Trump administration, which Dr. Anthonly Fauci was in attendance.

    According to the report, she sold stock in Resideo Technologies “worth between $50,001 and $100,000,” whose stock price “has fallen by more than half” since January. –Fox News

    27 out of 29 February transactions by Loeffler and her husband were sales. One of the buys worth $100,000 – $250,000 – Citrix, is a teleworking software company, which has risen since the pandemic has progressed.


    Tyler Durden

    Thu, 03/19/2020 – 23:25

  • BofA Says "The Bond Market Is Broken" And Only Fed Buying Bonds Can Fix It
    BofA Says “The Bond Market Is Broken” And Only Fed Buying Bonds Can Fix It

    One week ago, Bank of America’s credit strategists issues a dire assessment of the current state of the bond market: the Treasury market was no longer functioning properly.

    Fast forward to today, when Citi issued a similar warning about the overall state of the corporate bond market, noting that “order book has collapsed to 10% of historical average and trade impact cost has risen to more than x2 normal market function” pointing out that in terms of overall market liquidity “current levels are close to historical extremes.”

    Bank of America also chimed in again, only this time instead of focusing on the Treasury market, it shifted its attention to the corporate market where its take was simple: the “market is basically broken at this point.” Why would the normally non-hyperbolic BofA credit strategist Hans Mikkelsen come out with such a shocking assessment? Simple: just like Janet Yellen and Ben Bernanke the day before, BofA is now confident that the only thing that can fix the bond market – where BofA had been busy herding its clients into corporates for the past year only to see the rug pulled from under them this week – is the Fed which should not waste any time in starting to buy corporate bonds.

    Here is the section in question:

    A Financial Times article [on Wednesday] – by no less than Janet Yellen and Ben Bernanke – suggested the Fed should start buying corporate bonds. That seems a small step since they just set up a facility to buy commercial paper and, if little else, would be useful to calm a market that is basically broken at this point, with large outflows that look set to continue and pent-up issuance.

    Moral hazard? More like no-real hazard.

    Corporate credit has become a big concern for investors and, as we have seen in Europe, central banks can sharply improve pricing given illiquidity. Obviously it will take some time for the Fed to set it up but the announcement itself would be very powerful. The ECB announced corporate bond purchases in March 2016 and began buying in June that year. Their justification was for monetary policy purposes and – unlike for the Fed – the ECB has no 13.3 requirement so there was no need to seek approval. We estimate an eligible universe in the US of $4.5tn outstanding (Figure 4) plus $49bn average monthly new issuance.

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    Oh wonderful, at least there is a lot of bonds the Fed can buy.

    So sure is BofA that the Fed will come to its – and its clients’ rescue – that it is already preparing a list of bonds and monthly amounts that the central bank should buy:

    Some of the decisions the Fed would have to make include what they buy. We assume no bank bonds for example, as that would cut a little close to home with the Fed being the regulator. In other words how do you define the eligible universe? Also, while the ECB buy anything that is eligible irrespective of what the company does, the Bank of England in their program checks that every company makes a “material contribution to the UK economy”.

    The next question? How much could they purchase weekly/monthly?

    Maybe $50bn/monthly. Do they buy in primary, which would give them access to a lot more bonds and hurts secondary liquidity less. Do they buy like an ETF, i.e. in a market neutrality way? If so the Fed – like the ECB – needs no credit analysts. How do you treat Auto finance units? How much of any single security can they buy as a maximum? They need to define IG – maybe one IG rating and at least two if there are more, which is similar to Bloomberg-Barclays index and the Feds methodology for the new CPFF. What happens to downgraded bonds from IG to HY? Etc.

    And since we doubt that BofA is so dumb not to realize that a vast number of the corporate bonds the Fed buys will default in the next few months as a result of the coming global depression – as a reminder, buying a company’s securities does noting for its cash flow but merely drives an even bigger wedge between fundamentals and market prices – and will therefore be equitized post-reorg, BofA is now essentially working under the assumption that the Fed should be buying stocks, an assumption which we are confident all other banks will soon adopt, especially since Janet Yellen expressly said that the Fed should purchase stocks during the next crisis. i.e., right now.

    Which, of course, is the final step before the nationalization endgame begins, because once monetizing corporate credit fails to lift the market and bail out both BofA’s client as well as its sellside research division whose only out now is to beg the Fed for a rescue, all that’s left is for the central bank to directly enter the stock market and end price discovery as we know it.

    Come to think of it, life will be much easier when the trading day consists of just one daily press release from the Fed advising markets what the closing price is. The only possibly problem could be when just like Kuroda, the Fed chair is asked to explain how despite printing money out of thin air, the central bank is still facing trillions in paper losses.


    Tyler Durden

    Thu, 03/19/2020 – 23:16

  • NASA Warns Two Asteroids Could Cause Atmospheric Explosion Over Earth This Week
    NASA Warns Two Asteroids Could Cause Atmospheric Explosion Over Earth This Week

    Authored by Aaron Kesel via TheMindUnleashed.com,

    As if 2020 weren’t overwhelming enough, in addition to the potential start of World War 3, the massive fires in Australia, the locust plague in the Middle East and Africa, and the novel coronavirus, we are now dealing with multiple asteroids hurtling towards Earth. One of the asteroids may even collide with Earth’s atmosphere resulting in an atmospheric explosion tonight!

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    Two asteroids following Earth’s intersecting orbit known as 2020 EF and 2020 DP4 are approaching the planet, and information collected by NASA indicates the space rocks are big enough to create violent explosions in the atmosphere if they come too close to the Earth.

    The asteroids are being closely monitored by NASA’s Center for Near-Earth Object Studies (CNEOS).

    According to a report by IB Times, CNEOS estimates the 2020 EF asteroid has a diameter of 98 feet, making it a little longer than the distance between baseball diamond bases, with a velocity of 10,000 mph.

    CNEOS sates that 2020 EF is what is known as an Aten asteroid, which means the object follows a normal orbit that crosses Earth’s path. NASA’s orbit diagram for 2020 EF shows the asteroid mimics a very wide orbit around the sun and almost follows the exact same path as Earth. The good news is NASA states in their diagram that the asteroid will have multiple near-approaches between 2020 EF and our planet—but it won’t hit us.

    According to NASA, as a result of their size, 2020 EF will most likely not cause an impact event. Instead, it will break up into pieces if it enters Earth’s atmosphere. However, it will still cause an explosion in the sky that could be dangerous.

    The last asteroid atmospheric explosion took place over the city of Chelyabinsk, Russia, which produced a flash 30 times brighter than the Sun and caused 180 cases of eye pain and 70 cases of temporary flash blindness.

    So make sure you don’t stare at it with the naked eye, similar to how you shouldn’t stare directly at the sun, no matter how curious you may be.

    2020 DP4 is coming our way and will cause a similar space spectacle this week on March 22nd at 2:36 p.m EST. Compared to 2020 EF, 2020 DP4 is much larger in diameter at 180 feet wide and traveling at a faster velocity rate at 18,000 mph according to CNEOS.

    While 2020 EF is classified as an Aten asteroid, 2020 DP4 on the other hand belongs to the Apollo family of space rocks. Although the two asteroids are labeled differently, they are known to intersect Earth’s orbit as the planet makes its way around the Sun.

    CNEOS states 2020 EF is expected to fly past the Earth from a distance of 0.04241 astronomical units or approximately 4 million miles. Meanwhile, 2020 DP4 will approach Earth from a much closer distance which according to CNEOS, is only 0.00901 astronomical units or around 840,000 miles.

    While NASA has expressed that both asteroids won’t collide directly with the Earth, last year NASA and the U.S. government’s Federal Emergency Management Agency (FEMA) participated in an exercise with other international partners to deal with asteroids that could be a future impact danger. Last year, NASA also awarded SpaceX a $69 million contract to redirect an asteroid off its intended path under the Double Asteroid Redirection Test (DART) program, which uses a technique known as a kinetic impactor. The mission involves sending one or more SpaceX Falcon 9 rockets into the path of an approaching near-earth object, in this case, Didymos’ small moon in October 2022.

    The European Space Agency (ESA) is also involved in that joint mission to slam a probe into the asteroid Didymos’ small moon.

    Next month a third asteroid is expected to come close to hitting Earth called 52768 (1998 OR2). First spotted in 1998, the space rock much bigger than 2020 FE and 2020 DP4, at 1.1 – 2.5 miles wide, is expected to pass within around 4million miles—or about 17 times the distance from Earth to the Moon, moving at a velocity of 19,461 miles per hour. CNEOS states that the third asteroid will fly by the Earth on April 29, at 4:56 a.m. EST.

    According to CNN, NASA also reassures that 52768 (1998 OR2) will not hit the Earth despite worries with its classification as “potentially hazardous.” However, the asteroid is “large enough to cause global effects,” according to NASA.

    The next potential asteroid that could cause significant damage if it hit Earth is expected to fly through our solar system and pass near Earth on April 13, 2029. The giant icy space rock—known as 99942 Apophis, for the Egyptian God of Chaos—is 1,100 feet wide (340 meters) and will speed by at over 67,000 miles per hour. According to NASA, Apophis has a 2.7% chance to hit Earth—a very low probability.

    Thankfully we shouldn’t expect an Independence Day scenario any time soon.


    Tyler Durden

    Thu, 03/19/2020 – 23:05

  • "Very Intense Plunge": Top Hedge Fund Longs Suffer Historic Crash As Top Shorts Outperform… And Much More Pain Is Coming
    “Very Intense Plunge”: Top Hedge Fund Longs Suffer Historic Crash As Top Shorts Outperform… And Much More Pain Is Coming

    Total announced stimulus in the US, EU and UK this week was $4.2 trillion, and counting. But for those looking to buy this dip, the bears remain in control of a market paralyzed by its inability to decipher the true economic impact of the virus and the unprecedented dollar shortage just below the surface.

    Meanwhile, following the fastest crash from an all time high on record and the biggest VaR shock in history, hedge fund deleveraging is now accelerating (as are mutual fund redemptions) and while realized P&L volatility remains high, and hedging with options expensive, it is unlikely to stop here, at least according to Morgan Stanley. And while the stimulus creates a better backdrop for sharp/short-lived rallies now (helped by clients’ $45bn net short in SX5E futs) the bank’s view remains that we have not yet seen the bottom in index levels.

    Goldman agrees, pointing out that equity allocations were near all-time highs in February but have plummeted since the start of the bear market.  As we pointed out previously, in February, households, mutual funds, pension funds, and foreign investors — who collectively hold 84% of the total equity market — were more or less “all in”, and had notably overweight equity exposure in their portfolios relative to history.

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    In aggregate, these entities had equity allocations ranking in the 95th percentile vs. the past 30 years. In contrast, these investors had cash allocations at the very bottom of their historical allocations. However, since the all-time high on February 19, the S&P 500 has fallen by 30%, while the allocation to equities has fallen by around 10 percentage points to 37% of financial assets (36th percentile) from 47% (95th percentile). At the same time, allocation to bonds and cash have risen to 30% of assets (98th percentile) and 14% of assets (35th percentile), respectively.

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    Institutional investor positioning indicators also show a significant decrease in equity exposures, but current levels remain elevated relative to the lows in past corrections. Based on data from GS Prime Brokerage, hedge fund net exposure registered 63% this week, well below the level recorded at the February 19 equity market peak (72%). Similarly, CFTC data also show a sharp decline in net futures length. However, both of these are well above the average observed during the past decade.

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    This 37% aggregate equity allocation among major investors currently ranks in the 36th percentile since 1990 compared with the 95th percentile in February. However, there is more selling to come, because despite the steep decline, equity allocations are still above the troughs in 2001 and 2008, and cash allocations are at just the 35th percentile vs. history.

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    Similarly, Goldman’s high-frequency Sentiment Indicator and the valuations of favorite hedge fund stocks remain more elevated than the bank would expect at the trough of a major correction. As such, Goldman notes that it “expects that investors will continue to rotate away from equities in the near term, leading equity prices even lower.”

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    Of note is the sharp underperformance this week of the most popular stocks among hedge funds and mutual funds, which  suggests that institutional investor selling has accelerated. That’s putting it mildly: whereas Goldman typically takes pride in its Hedge Fund VIP basket which it frequently praises for outperforming the broader market more than 95% of the time, it is now safe to rename it to the Hedge Fund Very Intense Plunge (VIP) basket.

    Here’s why: after mostly outperforming the US stock market since the coronavirus started rattling investors in mid-February, the HF VIP basket is now down almost 29 per cent for the year, more than the S&P itself. At the same time, Goldman’s index of popular short positions has – as we have repeatedly told our readers– been far more resilient than the US stock market over the same period, declining only 13% this year. The five-day outperformance of the hedge fund shorts index versus the VIP index is the most extreme seen since Goldman Sachs started collecting the data in 2001. And it’s not just hedge funds: during the same period, the most popular Mutual Fund Overweights have lagged the largest Underweights by 700 bp (-20% vs. -13%), confirming once again that the only way to generate alpha is to do the opposite of what most people on Wall Street do.

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    And yet, hedge fund leverage curiously remains higher than typical in periods of severe market stress, and the valuations of their favorite stocks remain elevated relative to history.

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    In short, Goldman expects that the rotation away from equities will persist in the near-term as “uncertainty around the global spread and economic impact of COVID-19 remains high, volatility is at extreme levels across asset classes, and liquidity is thin.”

    In this environment, investors are likely to continue cutting portfolio risk, particularly because current aggregate equity allocation of 37% is still above the troughs in 2001 (35%) and 2008 (28%) and cash allocations are still only at the 35th percentile vs. history, despite what the BofA self-serving, and completely meaningless Fund Managers Survey says.

    To summarize, “a further decline in investor equity positioning, in concert with thin liquidity and a reduction in corporate buybacks, should cause the S&P 500 to fall” to Goldman’s estimated trough of 2000.


    Tyler Durden

    Thu, 03/19/2020 – 22:45

  • US Airlines To Burn Through $40 Billion By Year End If No Recovery
    US Airlines To Burn Through $40 Billion By Year End If No Recovery

    Most Wall Street analysts are predicting a V-shaped recovery for the US economy in the second half (even if it boggles the mind how the US economy can simply spring right back from a -14% GDP depression in Q2 without missing a beat). But if they are wrong, there will be hell to pay. Or at least 40 billion dollars to pay for the US airline industry.

    According to a new from Vertical Research, US airlines will burn through $40 billion in cash by year-end if passenger revenue plunges to nothing for the rest of 2020, and there is now second half rebound.

    “This is a dramatization, but isn’t far from the new reality as each capacity reduction far exceeds the one that preceded it,” Vertical analyst Darryl Genovesi said in a report which was seen by Bloomberg. His “no-longer-so-extreme” scenario also assumes that bookings dry up and carriers are forced to refund all advance ticket purchases.

    Genovesi expects that carriers focused on the domestic market, which have cut about 20% of available seats so far, will in the next few weeks slash capacity more along the lines of 70% as Delta has done already.

    “Passenger revenue could hit zero by the end of this quarter and stay there for the rest of the year”, he wrote, with cargo revenue disappearing in the third quarter. Annual operating income would then fall about $65 billion short of what had been expected a few months ago.

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    Major US carriers such Delta, American Airlines and United have already halted nearly all of their international operations as the virus’s spread spurred governments to restrict travel. Carriers now are making deeper cuts in domestic operations, parking planes, offering unpaid leaves to workers and securing billions in loans. Congress is considering $58 billion in loans and other financial help for the industry.

    Genovesi’s outlook, which excludes new ticket sales, government aid, new sources of capital secured and about $45 billion in existing fixed financial obligations this year,  would leave Delta and United with negative cash balances in the second quarter. American would follow in the third.

    In short, all those companies will need to find an additional source of funding or they will have to file for Chapter 11.

    “Government hasn’t completely shut down U.S. air traffic, but it may still,” Genovesi said. “And even if it doesn’t, demand is approaching zero as U.S. citizens are staying home.”


    Tyler Durden

    Thu, 03/19/2020 – 22:25

  • A Disgusted Nikki Haley Quits Boeing's Board In Protest Over Bailout Demand
    A Disgusted Nikki Haley Quits Boeing’s Board In Protest Over Bailout Demand

    While Boeing’s shareholders await to see if they will be granted a taxpayer-funded bailout, or if all those billions they greedily pocketed from the company’s stock buybacks instead of forcing the company to allocate toward a rainy day fund may have doomed if not the airplane manufacturer, which will promptly re-emerge from Chapter 11 with a clean balance sheet, then themselves, today the first casualty of the Boeing crisis emerged when Nikki Haley, the former U.S. ambassador to the United Nations, announced she was leaving Boeing’s board after less than a year, saying she opposes the planemaker’s decision to seek a U.S. bailout amid the coronavirus crisis.

    “I cannot support a move to lean on the federal government for a stimulus or bailout that prioritizes our company over others and relies on taxpayers to guarantee our financial position,” Haley said in a March 16 letter that Boeing disclosed late on Thursday, one day after it was revealed that the company is seeking a $60BN bailout.

    “I have long held strong convictions that this is not the role of government” she added.

    Whatever one thinks of Haley, she is absolutely correct on on this issue: that Boeing wasted tens of billions to push its stock artificially higher by repurchasing its stock in hopes of lifting management equity-linked comp and making its shareholders richer instead of even pretending to plan for a less than perfect future is inexcusable, and no bailout of Boeing should ever be allowed. If Boeing needs the funds, it can sell stock and raise cash – the opposite of what it did for decades. If that is insufficient, Boeing should file a prepackaged Chapter 11 where the creditors take over all the equity and the company emerges from bankruptcy debt-free in one day.  Without a dollar of debt, Boeing should be able to weather any disruption no matter how long, and once the economy normalizes it can rehire all the workers that had been laid off.

    In short, Boeing will survive but its existing shareholders will be liquidated, as they should in any system even vaguely resembling capitalism.

    “Covid-19 is the biggest threat of all time to the airline/aerospace ecosystem and augurs sharp production cuts and liquidity issues” for Boeing, said Cai von Rumohr, an analyst at Cowen & Co. “It’s hard to tell where the stock may bottom.”

    Well, if it bottoms at 0, so be it. It’s called a bankruptcy process and countless companies have emerged from it, and gone on to a prosperous, debt-free future. And with the aid of a DIP loan – whether private or public-funded – not one Boeing employee has to lose their job, especially since with a new and clean balance sheet, Boeing will no longer face an existential crisis to produce every single day.

    Haley, who was elected to two terms as South Carolina governor, is a rising star in Republican politics who is widely expected to consider a run for president herself in 2024. She is one of the few people who left President Donald Trump’s administration on good terms, finding ways to occasionally distance herself from the boss but remaining a steadfast supporter after announcing her resignation as U.N. ambassador in October 2018.


    Tyler Durden

    Thu, 03/19/2020 – 22:05

  • US Equity Futures Tumble After California State-Wide 'Stay At Home' Order
    US Equity Futures Tumble After California State-Wide ‘Stay At Home’ Order

    Having been ramped up to unchanged from post-close lows, news that CA Governor Newsom has issued a state-wide “stay at home” order, futures tumbled…

    Dow futures are down over 300 points…

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    It’s Quad Witch tomorrow so we should expect plenty of high gamma swings between now and the open tomorrow.


    Tyler Durden

    Thu, 03/19/2020 – 21:53

  • Alphabet Soup: CPFF, PDCF And MMLF Down; TAF, TSLF, MMIFF And TALF To Go
    Alphabet Soup: CPFF, PDCF And MMLF Down; TAF, TSLF, MMIFF And TALF To Go

    Authored by Phillip Marey of Rabobank

    Summary

    • On Sunday, the Fed set the discount window and the USD liquidity swap lines with 5 key central banks further open.

    • On Tuesday, the Fed relaunched the CPFF and a few hours later the PDCF.

    • On Wednesday, the Fed established the MMLF.

    • Today, the Fed reopened the USD liquidity swap lines with a wider set of central banks.

    • In this special we give an overview of the special lending facilities that are now in place, the special lending facilities from the previous financial crisis that are likely to make a comeback, and a few novel special lending facilities that could become reality.

    Introduction

    On Sunday, the Fed set the discount window and the USD liquidity swap lines with 5 key central banks further open. However, commercial paper markets were freezing up. The coronavirus outbreak is hitting the cashflow of businesses, who therefore need to raise cash. At the same time, the money market mutual funds – the regular buyers of commercial paper – are also trying to raise cash in anticipation of outflows from the mutual funds by investors. In other words, the commercial paper market had increasingly become dysfunctional. On Tuesday, the Fed relaunched two special lending facilities from the financial crisis, the Commercial Paper Funding Facility (CPFF) and the Primary Dealer Credit Facility (PDCF). While CPFF helps issuers of commercial paper, and PDCF supports primary dealers who remained stuck with large inventories of commercial paper, money market mutual funds were still in need of liquidity. So on Wednesday, the Fed established the Money Market Mutual Fund Liquidity Facility (MMLF). Today, in response to the global need for USD liquidity, the Fed reopened the USD liquidity swap lines they closed in 2010 with a range of non-G7 central banks.

    As we indicated in Crash to zero a week ago, we expected the Fed to deploy a range of special lending facilities from the financial crisis. Several were indeed deployed in recent days. In this special we give an overview of the special lending facilities that are now in place, and the special lending facilities from the previous crisis that are likely to make a comeback.

    The standard lending facility: the discount window

    The Fed is the lender of last resort in the US financial system. In normal times, the Fed operates a standard lending facility that is accessible only to depository institutions, the discount window. This excludes a range of financial institutions and all non-financial firms, but under normal  circumstances it is enough for the Fed to provide a backstop for depository institutions, who then in turn provide liquidity to other financial institutions and all non-financial businesses and households. When the US financial system comes under stress, the Fed may first try to stabilize the system by setting the discount window further open. On Sunday, the Fed extended the discount window to 90 days and slashed the primary credit rate by 150 bps to 0.25%. By providing liquidity to banks through the discount window the Fed tries to make sure that banks don’t  have to withdraw credit to their customers during times of market stress. In this way, the Fed could support the smooth flow of credit to households and businesses.

    Special lending facilities

    The discount window is the Fed’s standard lending facility. However, it is restricted to depository institutions and there is a stigma to borrowing at the discount window. On Sunday, the Fed tried to reduce this stigma by encouraging banks ‘to turn to the discount window to help meet demands for credit from households and businesses at this time.’ In order to make this more attractive the Fed slashed the primary credit rate by 150 bps to 0.25%. This means that the spread between the primary credit rate and the top of the target range for the federal funds rate was reduced from 50 bps to zero. The discount window was also extended to 90 days.

    However, when the financial system comes under stress and widening the discount window is not enough to stabilize the financial system the Fed also has the possibility to deploy special lending facilities. The special lending facilities are based on section 13(3) of the Federal Reserve Act, which is a ‘unusual and exigent circumstances’ clause. Unfortunately, after the financial crisis the US Congress – through the Dodd-Frank Act of 2010 – made it more difficult for the Fed to use this clause. The Fed needs the approval from the US Treasury Secretary. Why wasn’t CPFF included in Sunday’s emergency package when the Fed cut rates to zero, launched a new large scale asset purchase program, and set the discount window and USD swap lines wide open? Markets were screaming for CPFF. On Tuesday, Mnuchin sent a letter to Powell giving him permission  to start CPFF2020. It seems that Congress has tied the Fed’s hands and this has not been beneficial to market functioning as we found out in this week. Perhaps something to reconsider once this crisis is over.

    In this special, we try to discuss the ‘alphabet soup’ of special lending facilities in a systematic manner, by focussing on the beneficiaries of the special lending facilities. We start with the depository institutions, which even in normal circumstances have access to the Fed’s standard lending facility: the discount window. Then we look at the primary dealers, money market mutual funds, CP issuers, ABS issuers and foreign central banks.

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    Term Auction Facility (TAF)

    If it turns out that the stigma of going to the discount window is holding back depository institutions too much, the Fed may relaunch a special lending facility known as the Term Auction Facility (TAF). Through TAF the Fed provided term loans to depository institutions, collateralized by standard discount window collateral. However, the funds were allocated through an auction, so that banks would not face the stigma of going to the discount window to ask for a loan. So TAF is basically the discount window without the stigma. During the financial crisis, TAF was the first and largest special lending facility employed by the Fed.

    On Sunday, the Fed tried to make the discount window more attractive by slashing the primary credit rate to 0.25% and encouraging banks to use the discount window, but if these incentives would fail to get banks to the discount window – because of the stigma attached to it – then relaunching TAF could help alleviate bank funding strains. In fact, on Tuesday Loretta Mester (Cleveland Fed) mentioned TAF in addition to CPFF.

    Primary Dealer Credit Facility (PDCF)

    While primary dealers play a crucial role in the financial system, they have no access to the discount window if they are not part of a depository institution. The Primary Dealer Credit Facility (PDCF) provides funding to primary dealers, similar to the way the discount window provides a backup source of funding for depository institutions. On Tuesday March 17, the Fed relaunched PDCF. The PDCF will offer overnight and term funding with maturities up to 90 days. A broad range of collateral is allowed if primary dealers want to use this facility, including investment grade corporate debt securities, international agency securities, commercial paper, municipal securities, MBS, and ABS and equity securities. In case of ABS, only AAA-rated CMBS, CLOs and CDOs are accepted. In case of equity securities, ETFs, unit investment trusts, mutual funds, rights and warrants are excluded. Additional collateral may become eligible at a later date upon further analysis by the Fed. Note that PDCF supports primary dealers who remained stuck with large inventories of commercial paper in recent days when the commercial paper market became dysfunctional.

    The loans under the PDCF will be made at a rate equal to the primary credit rate. So in practice this is a ‘discount window’ for primary dealers against a broad range of collateral. In this way, the Fed acts as a lender of last resort to primary dealers, who – if not part of a depository institution – have no access to the discount window. The PDCF is established under Section 13(3) of the Federal Reserve Act, with approval of the Treasury Secretary. The PDCF will be in place for at least 6 months and may be extended as conditions warrant. Note that during the financial crisis the PDCF only offered overnight funding. However, the 2020 version of PDCF offers term funding up to 90 days.

    Term Securities Lending Facility (TSLF)

    During the financial crisis, depository institutions had access to the discount window and TAF. Analogously, the Fed created the PDCF and the TSLF for primary dealers. The roles of the discount window, TAF, PDCF and TSLF can be summarized in the following table:

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    The PDCF is a standing facility for primary dealers, while TSLF is an auction for primary dealers. In TSLF auctions the Fed loaned Treasury securities to primary dealers for one month against collateral that consisted of less liquid securities. An important difference between TSLF and TAF is that in TSLF the Fed offers securities for securities, while in TAF the Fed offers funds from the Federal Reserve in exchange for securities and loans. In combination, the PDCF and the TSLF offered the primary dealers access to funds and Treasury securities against a broad range of collateral. Following the widening of the discount window and the relaunch of the PDCF, we are likely to see a relaunch of TSLF (and TAF) in the coming days or weeks.

    Money Market Mutual Fund Liquidity Facility (MMLF)

    After discussing the Fed’s lending facilities for depository institutions and primary dealers, now we turn to the money market mutual funds. On Wednesday, March 18, 2020 the Fed established the Money Market Mutual Fund Liquidity Facility (MMLF). The Boston Fed will make loans of up to 12 months available to eligible financial institutions secured by high-quality assets purchased by the financial institution from money market mutual funds. The aim of the MMLF is to help money market mutual funds in meeting demands for redemptions by households and other investors. Note that money market funds were scrambling for liquidity in anticipation of withdrawals. This also meant that they were not buying commercial paper from businesses. By introducing CPFF the Fed helped those businesses, but money market mutual funds kept struggling. Through the MMLF the Fed is stimulating financial institutions to buy assets from the money market mutual funds, so that they don’t have to sell them at a large discount if they are forced to sell when investors withdraw their money from the mutual funds. Eligible financial institutions are all US depository institutions, US bank holding companies, US branches and agencies of foreign banks.

    Eligible collateral consists of two types with different rates at which the loan is made. The primary credit rate applies to US treasuries and fully guaranteed agencies and securities issued by US government sponsored entities. The primary credit rate plus 100 bps for ABCP or unsecured CP issued by a US issuer, rated not lower than A1, F1 or P1 if rated by at least two major rating agencies or in the top rating if rated by only one major rating agency.

    The MMLF is in structure very similar to the Asset-Backed Commercial Paper Money Market Fund Liquidity Facility (AMLF) that operated from late 2008 to early 2010. The main difference is that MMLF will purchase a broader range of assets from financial institutions. The AMLF provided funding for depository institutions purchasing asset-backed commercial paper from money market mutual funds. This facility peaked at $140bn in 2008.

    Money Market Investor Funding Facility (MMIFF)

    Related to AMLF, in 2008-2009 the Fed also established the Money Market Investor Funding Facility (MMIFF). This facility was designed to provide liquidity for money market mutual funds, stimulating them to extend the term of their money market investments. Instead of scrambling for overnight assets because of liquidity fears, this would help maintain demand for term securities in the money market. Although no loans were made under the MMIFF, the facility could still be useful this time if MMLF would not be enough to support the money market mutual funds.

    Commercial Paper Funding Facility (CPFF)

    Markets were screaming for it, but finally on Tuesday, March 17, the Fed relaunched the Commercial Paper Funding Facility (CPFF) in order to deal with the freezing up of the US commercial paper market. At present, the coronavirus outbreak is hitting the cashflow of businesses, who therefore need to raise cash. At the same time, the money market mutual funds – the regular buyers of commercial paper – are also trying to raise cash in anticipation of outflows from the MMMFs by investors. In other words, the commercial paper market had increasingly become dysfunctional. The reintroduction of the CPFF brings in the Fed as a large buyer of commercial paper and should help stabilize the market.

    Through this facility the Fed finances a special purpose vehicle (SPV) that purchases 3 month commercial paper from eligible users. In this way the Fed takes over the role of money market mutual funds and other buyers of commercial paper that stopped purchasing in recent days. This also reduces the pressure on banks providing credit to issuers unable to sell commercial paper anymore. By providing a liquidity backstop for issuers of commercial paper the Fed hopes to stabilize the commercial paper market. For more technical details we refer to our special report CPFF2020. Note that through this channel the Fed is also able to provide liquidity to businesses, not only depository institutions which already have access to the Fed’s discount window.

    During the financial crisis the Commercial Paper Funding Facility (CPFF) was the second largest special funding facility. In this way the Fed took over the role of money market mutual funds and other buyers of commercial paper that were afraid to purchase unsecured debt during the financial crisis. This stabilized the commercial paper market and provided a liquidity backstop for issuers of commercial paper.

    Term Asset-Backed Securities Loan Facility (TALF)

    Stress in the financial system may also affect the market for asset backed securities (ABS). During the financial crisis the Fed came to the rescue of issuers of ABS by establishing a special lending facility. The Term Asset-Backed Securities Loan Facility (TALF) was launched in March 2009 after interest rates on ABS rose and issuance feel sharply in late 2008. Through TALF the Fed provided loans in exchange for certain AAA-rated ABS backed by newly and recently originated consumer and small business loans. The Treasury Department provided $20bn of credit protection to the New York Fed in connection with the TALF. Through this facility the Fed tried to support the issuance of ABS. Problems in the ABS markets could lead to a relaunch of TALF. USD and foreign currency liquidity swap lines

    After discussing the Fed’s special lending facilities for US depository institutions, primary dealers, money market mutual funds, and issuers of CP and ABS we turn to the international dimension of liquidity provision. The crucial role that the USD plays in the international financial system is also reflected in the fact that the USD liquidity swap lines with 5 other central banks never went away.

    Also, the foreign currency liquidity swap lines that came in reciprocity were never used by the Fed, except for some pre-arranged small-value test operations. On Sunday, the Board of Governors enhanced the standing USD liquidity swap line arrangements with the Bank of Canada, the Bank of England, the Bank of Japan, the ECB and the Swiss National Bank by offering 84-day maturity, in addition to the 1-week maturity operations currently offered, and by reducing the pricing by 25 bps to OIS+25bps.

    On Thursday, in response to the global need for USD liquidity, the Fed reopened the swap lines they closed in 2010 with a range of central banks of non-G7 countries: the Reserve Bank of Australia, the Banco Central do Brasil, the Danmarks Nationalbank, the Bank of Korea, the Banco de Mexico, the Reserve Bank of New Zealand, the Norges Bank, the Monetary Authority of Singapore, and the Sveriges Riksbank. These USD liquidity arrangements will be in place for at least 6 months.

    In the coming days and weeks, the USD liquidity swap lines could be extended to an even wider set of central banks, longer maturities could be offered and pricing could be reduced further. Of course, the main question is whether the Fed will open a USD liquidity swap line with the People’s Bank of China.

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    What’s next?

    Now that CPFF and PDCF have been relaunched, MMLF has been established, and USD liquidity swap lines have been expanded to a range of non-G7 central banks it is only a matter of time before the rest of the Fed’s emergency toolkit from the previous financial crisis is reinstated. We may see the return of TAF, TSLF, MMIFF, TALF and the opening of new USD liquidity swap lines. We could also see new facilities, for example targeted at corporate debt, and focussed on lending to small businesses and households. After all, in contrast to the Great Recession, the current shock did not come from the financial system but from the real economy. Consequently, special lending facilities should be aimed more directly at businesses and households.


    Tyler Durden

    Thu, 03/19/2020 – 21:35

  • Newsom: 56% Of Californians To Be Infected With COVID-19 Within Eight Weeks
    Newsom: 56% Of Californians To Be Infected With COVID-19 Within Eight Weeks

    Update (2215ET): During a Thursday evening announcement that California is now under a ‘stay at home order,’ Newsom clarified that the 22.5 million infected figure is a worst case scenario in which nothing is done (in a letter to Trump asking to borrow a Navy medical ship).

    The next day he announces a major action to reduce the spread of COVID-19.

    *  *  *

    California Governor Gavin Newsom says that an estimated 56% of the state’s population – some 25.5 million people – will be infected with coronavirus within the next eight weeks.

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    Newsom made the sobering claim in a Wednesday letter to President Trump asking for the US Navy’s Mercy Hospital Ship to be stationed at the Port of Los Angeles until September in order to provide backup to the region’s healthcare system.

    “The acquisition of the Mercy here off the coast of the state of California would provide additional 1,000 bed capacity, provides support for pharmacists and other diagnostic equipment,” said Newsom, adding “This resource will help decompress the health care delivery system to allow the Los Angeles region to ensure that it has the ability to address critical acute care needs, such as heart attacks and strokes or vehicle accidents, in addition to the rapid rise of COVID-19 cases.”

    “We have community acquired transmission in 23 counties with an increase of 44 community acquired infections in 24 hours. We project that roughly 56 percent of our population – 25.5 million people – will be infected with the virus over an eight week period,” the letter continues.

    A spokesperson for the governor said the projection shows why it’s so critical that Californians take action to slow the spread of the disease – and those mitigation efforts aren’t taken into account in those numbers. The spokesperson added that the state is deploying every resource at its disposal to meet this challenge and is continuing to ask for the federal government’s assistance in this fight. –ABC 7

    Newsom is working closely with Los Angeles Mayor Eric Garcetti to try and protect the state’s enormous homeless population from the disease – particularly those with pre-existing conditions. The city is also working with the American Red Cross to open 6,000 beds at 52 recreation centers.

    California will also supply local governments with $150 million.

    “If we take these emergency shelter beds and add in our bridge shelter beds, this means we can bring 7,000 unhoused Angelenos off the streets and into emergency housing – the most in recent memory, maybe ever in the city’s history,” Garcetti said.

    Ten years ago, then-Los Angeles Police Department Chief Bill Bratton “said what would it take to clean up skid row and he actually said a pandemic,” said Any Bales, CEO of the Union Rescue Mission in downtown Los Angeles. “It’s unfortunate that that’s what it’s taken, but man am I glad to see so many people making so places for people to go.“

    Bales with skid row’s Union Rescue Mission praised all the resources that are coming together to protect the homeless population against COVID-19. Three hundred hand-washing stations and 120 mobile bathrooms have already been set up at encampments.

    “I’m hoping we don’t return to putting people on the streets,” said Bales. “That this all teaches us that we all live a better life housed than unhoused together when we immediately help people get off the streets and stay off the streets.” –ABC 7

    Newsom said that the state’s typical 2,000 unemployment insurance claims had skyrocketed to 80,000 over the last week.


    Tyler Durden

    Thu, 03/19/2020 – 21:15

  • BMO: The Market Ponders If This Is "The Spanish Flu" Or "The Great Depression"
    BMO: The Market Ponders If This Is “The Spanish Flu” Or “The Great Depression”

    For the past week, it’s been virtually non-stop: one central bank after another has fired a bazooka, rushing to frontrun its peers in hopes of big impact, only to find no response from the market, forcing it to fire another, even bigger bazooka. Consider that just over the past 24 hours we have gotten the following (via Nomura):

    • Fed announced a new emergency program (MMLF) to aid money markets

    • ECB “no limits” bazooka (“Pandemic Purchase Program w/ $820B of QE)

    • RBA 25bps cut to ELB, introduces QE and targeted YCC

    • Japan discussing $276B packed including “cash payouts” to households

    • S Korea new $40B package

    • Brazilian 50bps rate cut

    • US Senate passes 2nd stimulus bill and negotiating the 3rd ($1.3T)

    • BOE emergency rate cut to 0.1% and GBP200BN QE expansion

    And yet, as BMO’s rate strategist Ian Lyngen writes this morning, “central bank intervention continues to mount, but its effectiveness in containing the fear evident throughout financial markets appears to be diminishing.”

    The ECB has unveiled a €750 bn bond-buying program (to run at least until year-end) which will target sovereign debt, including Greek bonds, and is in direct response to this week’s spike in Italian yields. The Fed has also followed-through with another emergency effort; through the Market Mutual Fund Liquidity Facility (MMLF) “the Federal Reserve Bank of Boston will make loans available to eligible financial institutions secured by high-quality assets purchased by the financial institution from money market mutual funds.” Providing another source of liquidity for the cash market is a crucial step in assuring the stability of the broader system, even if – as with all the efforts of monetary policymakers – it is not going to flatten the Covid-19 curve.

    And, as Lyngen adds, to accomplish this objective, federal and local governments are increasingly the focus of investor angst. The initial phase of trading the official response was “wow – didn’t know things had gotten so bad. Better sell equities.” After  a few weeks of gauging the actions of governments both domestically and abroad, a second phase has emerged; “wow – there isn’t enough being done or that can be done. Better sell equities.”

    In short, the theme is clear – the market is pondering whether the situation is akin to the Spanish flu or the Great Depression, however facing this dire dilemma, BMO finds itself with a slightly different interpretation as the severity of the price action itself has given the bank pause. Here’s why:

    It’s now well-known that the first half of 2020 is going to experience dismal real economic growth; that much is certain. In fact, JPMorgan now predicts a depression-like plunge in US GDP of -14%.

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    The operating assumption is that once the coronavirus curve has finally peaked (similar to what appears to be occurring in China), cities will reopen and consumption will return anew. This is also the basis behind JPM’s very optimistic assumption of a V-shaped recovery.

    However, whether this indeed triggers a v-shaped recovery or a u-shaped one will depend on three unknowns:

    1. Fed/government liquidity measures,

    2. ability of authorities to contain or slow the spread of Covid-19 and

    3. length of the economic lockdown.

    Essentially, the first ‘unknown’ is coming into focus as Powell delivers and the White House cobbles together a fiscal package that can make it through Congress.

    The second, is even more difficult to judge because as more people are tested, more cases are discovered – the timeline of  actual infections is unlikely to be definitively established. Said differently, even a ‘perfect quarantine’ of untested individuals will see a rise in ‘known’ cases as the testing commences.

    The third element, the period of economic disruption, is the most angst inducing for investors. Every trading session that passes without either a turn in the pace of infection or a hope-inspiring development has resulted in a downward repricing of risk assets. As an alternative to the more dramatic reading of Spanish flu versus Great Depression, BMO suggests that investors are facing either Y2K (econ-ageddon that never was) or a severe v-shaped recession; akin to the 2009 financial crisis without the same degree of systemic risks.

    In the near-term, the details coming out of Washington related to the fiscal response will inform the next leg for risk assets. Helicopter money has become an assumption at this point; however, the ability of businesses to stay viable during the shutdown is even more relevant.

    To a large extent, this will depend on how money is funneled to small businesses and whether it is in the form of cheap financing or an outright grant. As an astute member of upper management highlighted, it isn’t in the best interest of firms to load up on debt owed to the government during a mandated closure only to use those moneys to pay workers. Why not simply furlough and rehire the workers; thereby creating a more direct path (via unemployment benefits) to the federal funds? Business owners could then simply negotiate with their landlords and creditors for bridge funding/forbearance until the economy reopens. Food for thought as the details slowly emerge on the >$1 trillion package. Punchline; grant and not cheap financing.

    And speaking of the stimulus package, it is worth conetmplating what form the fiscal response from Washington will take. While the details are still unknown, some combination of a direct cash infusion, extended tax payment deadlines, money fund guarantees, and various industry bailouts are on the table. Regardless of how large the spending ultimately is, it will be funded via massive increases in Treasury issuance. This will be focused in the bill market, where the historically larger volatility in offering sizes will bear the brunt of ramp-up in borrowing. Several cash management bills of substantial heft would also follow intuitively. While on the margin, such increases in supply introduce a bearish relative value risk for the front-end, this should be at least partially offset by the flood into government money funds.

    As BMO concludes, “as long as the dollar maintains its position as the global reserve currency, even with gargantuan supply sizes, a structural bid will continue to exist for Treasuries, a notion supported by 10s trading below 1.50%.”

     


    Tyler Durden

    Thu, 03/19/2020 – 20:55

  • The Median US Stock Is Now Down 50% From Its Highs As World Loses $25 Trillion In A Month
    The Median US Stock Is Now Down 50% From Its Highs As World Loses $25 Trillion In A Month

    Global stock and bond markets have seen $25 trillion of ‘paper’ wealth erased in the last month, wiping out all the gains from the Dec 2018 crash lows….

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    Source: Bloomberg

    Global bonds are actually still up around $5 trillion while global stocks have lost around $5 trillion since the Dec 2018 lows, and a lot of those losses come from the US markets where the median stock is now down 50% from its highs… (because the Value Line index below is based on a geometric average the daily change is closest to the median stock price change)

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    Source: Bloomberg

    As Washington signs and promises more and more bailouts and helicopter money drops, USA sovereign risk is starting to get a little spooked…

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    Source: Bloomberg

    Systemic risk remains extremely elevated…

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    Source: Bloomberg

    Which makes sense when the world’s largest banks are seeing their credit risk explode like it did ahead of the Lehman crisis…

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    Source: Bloomberg

    And despite the endless liquidity from global central banks and polititicians, financial conditions are tightening at their fastest rate ever…

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    Source: Bloomberg

    And the real ‘fear’ trade is now at its most extreme since the peak of the Lehman crisis…

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    Source: Bloomberg

    Policy Fail – The Dollar rallied for the 8th straight day, soaring to a new record high despite The Fed opening unlimited FX Swap Lines…

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    Source: Bloomberg

    This is the largest 8-day rally in the DXY Dollar Index… ever! Greater even than when Soros broke The Bank of England in Sept 1992…

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    Source: Bloomberg

    But The Fed will “never give in”…

    Since the COVID-19 Malrarkey began, Chinese stocks remain the leaders (down only 12%), while Europe is the laggard…

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    Source: Bloomberg

    US equity markets soared today (thanks to the biggest short-squeeze in 7 years), but failed to erase yesterday’s gains… (NOTE Nasdaq just tagged unch from Tuesday and then rolled over – algo-tom-foolery)…

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    On the week, it’s still a shitshow with The Dow worst, down 13%…

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    Today saw “Most Shorted” stocks soar 8% – the biggest short-squeeze since August 2013…

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    Source: Bloomberg

    Directly virus-affected sectors rebounded today…

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    Source: Bloomberg

    VIX fell notably today, testing below 70 ahead of tomorrow’s Quad-Witch option expiry…

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    Meanwhile, Boeing credit risk continues to soar (as questions rise about whether they should be bailed out or not)…

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    Source: Bloomberg

    And Ford suspended its dividend and withdrew its guidance sending its credit risk soaring…

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    Source: Bloomberg

    Credit markets were not buying what stocks were selling today…

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    Source: Bloomberg

    Treasury yields were mixed with the long-end higher and rest of the modestly lower (despite a huge range)… (10Y yields briefly dipped below 1.00% today)

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    Source: Bloomberg

    Another late-day purge in yields pushed 30Y to end higher on the day…

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    Source: Bloomberg

    Munis were massacred today – 10Y yield spiking 47bps!! (MUNI-BOND OUTFLOW ALMOST THREE TIMES PREVIOUS RECORD)

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    Source: Bloomberg

    EUR tumbled today to 3 year lows today in biggest loss since Jan 2001 (bigger than Jun 2016 Brexit vote loss)

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    Source: Bloomberg

    And Cable crashed to the weakest since 1985…

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    Source: Bloomberg

    Cryptos had a big day with Bitcoin Cash outperforming…

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    Source: Bloomberg

    Today’s commodity markets were dominate by oil’s biggest rally ever…however, given the carnage in crude, WTI is still down 20% on the week…

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    Source: Bloomberg

    Today was oil’s biggest daily gain… ever. Bouncing off a $20 handle and helped by talk of Trump intervention, WTI was up around 25%!! However, in context, it doesn’t look like much (apart from the insane $2 spike at settlement for a 35% surge intraday)…

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    Oil and the dollar both rallied together late on…

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    Source: Bloomberg

    Gold was modestly lower on the day but silver actually managed gains, bouncing off $12 again..

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    And on a somewhat related note, is this the other reason why gold has been sold?

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    Source: Bloomberg

    Volatile day in PMs with Palladium best and Platinum worst…

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    Source: Bloomberg

    Finally, as Bloomberg notes, anyone referring to the past month’s plunge in U.S. stocks as a crash has history on their side. The S&P 500 Index’s volatility for the 10 trading days ended Wednesday was 122%, according to data compiled by Bloomberg.

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    Source: Bloomberg

    Only two periods have produced higher readings: the aftermath of the 1929 Black Tuesday crash and the 1987 Black Monday crash. The volatility gauge climbed more than 17-fold from Feb. 19, when the S&P 500’s latest bull market ended, through Wednesday.

    The FRA-OIS spread spiked once again today signaling major tensions in the liquidity markets remain…

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    Source: Bloomberg

    And global basis swaps spiked again (led by JPY) as the dollar shortage worsened today…

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    Source: Bloomberg

    In other words – whatever The Fed is doing – “It’s Not Working!”


    Tyler Durden

    Thu, 03/19/2020 – 20:45

  • "Obey" – Covid-19 Global Lockdown & 'Disaster Capitalism'
    “Obey” – Covid-19 Global Lockdown & ‘Disaster Capitalism’

    Authored (satirically) by CJ Hopkins via Off-Guardian.org,

    Let’s try a little thought experiment. Just for fun. To pass the time while we’re indefinitely locked down inside our homes, compulsively checking the Covid-19 “active cases” and “total death” count, washing our hands every twenty minutes, and attempting not to touch our faces.

    Before we do, though, I want to make it clear that I believe this Covid-19 thing is real, and is probably the deadliest threat to humanity in the history of deadly threats to humanity.

    According to the data I’ve been seeing, it’s only a matter of days, or hours, until nearly everyone on earth is infected and is either dying in agony and alone or suffering mild, common cold-like symptoms, or absolutely no symptoms whatsoever.

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    I feel that I need to state this clearly, before we do our thought experiment, because I don’t want anyone mistakenly thinking that I’m one of those probably Russian-backed Nazis who are going around saying, “it’s just the flu,” or who are spreading dangerous conspiracy theories about bio-weapons and martial law, or who are otherwise doubting or questioning the wisdom of locking down the entire world (and likely triggering a new Great Depression) on account of the discovery of some glorified bug.

    Obviously, this is not just the flu. Thousands of people are dying from it. OK, sure, the flu kills many more than that, hundreds of thousands of people annually, but this Covid-19 virus is totally new, and not like any of the other millions of viruses that are going around all the time, and the experts are saying it will probably kill, or seriously sicken, or briefly inconvenience, millions or even billions of people if we don’t lock down entire countries and terrorize everyone into submission.

    Which, don’t get me wrong, I’m all for that… this is not the time to be questioning anything the corporate media and the authorities tell us. This is a time to pull together, turn our minds off, and follow orders. OK, sure, normally, it’s good to be skeptical, but we’re in a goddamn global state of emergency! Idris Elba is infected for Chrissakes!

    Sorry … I’m getting a little emotional. I’m a big-time Idris Elba fan. The point is, I’m not a Covid-denialist, or a conspiracy theorist, or one of those devious Chinese or Russian dissension-sowers. I know for a fact that this pandemic is real, and warrants whatever “emergency measures” our governments, global corporations, and intelligence agencies want to impose on us.

    No, I’m not an epidemiologist, but I have a close friend who knows a guy who dated a woman who dated a doctor who personally knows another doctor who works in a hospital in Italy somewhere, and she (i.e., my friend, not the doctor in Italy) posted something on Facebook yesterday that was way too long to read completely but was a gut-wrenching account of how Covid-19 is killing Kuwaiti babies in their incubators!

    Or maybe it was Italian babies. Like I said, it was too long to read.

    Also, did you see the story about the baby that was born infected?! Or the stories about the people in their 30s and 40s who were more or less in perfect health (except for, you know, cancer or whatever) who died from (or with) the Covid plague?! And what about all those charts and graphs?! And those pictures of people in hazmat suits?! And those Italians singing Turandot on their balconies?! Doesn’t that just make you want to break down and cry over the sheer humanity of it all?!

    No, there is absolutely no doubt whatsoever that Covid-19 is the deadliest global pandemic humankind has ever faced, and that we have no choice but to cancel everything, confine everyone inside their home, wreck the entire global economy, force working class people even further into debt, pour trillions into the investment banks, cancel elections, censor the Internet, and otherwise implement a global police state.

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    But what if it wasn’t? Just hypothetically.

    What if this wasn’t the deadliest global pandemic humankind has ever faced? (I’m just posing the question as a thought experiment, so please don’t report me to the WHO, or the CDC, or FEMA, or whoever.) What if this new coronavirus was just another coronavirus like all the other coronaviruses that people die from (or with) all the time? What if the fact that this one is “new” didn’t really mean all that much, or possibly anything at all, because coronaviruses are always mutating, and every year there are a lot of new variants?

    Relax, OK? I know this one is different, and totally unlike anything ever encountered by virologists in the history of virology. Remember, this is just a thought experiment. These are just hypothetical questions.

    Here’s another hypothetical question. What if all the scary statistics we’ve been seeing (e.g., the death rates, the explosion of “cases,” etc.) weren’t unquestionable scientific facts, but rather, were, like other statistics, based on things like sample groups, and dependent on a host of factors and variables, which you kind of need to know to make sense of anything?

    Say, for example, you tested everyone that died of acute respiratory failure on a given day in your Italian hospital, and you discovered that, let’s say, five of those patients had been infected with Covid-19. So you feed that number to the WHO, and they add it to the “total deaths” count, regardless of whether the folks who died had terminal cancer, or heart disease, or had also been infected with the common flu, or some other type of coronavirus. That would probably skew your “death” count, wouldn’t it?

    Or, say you wanted to test for the virus to keep track of all the “active cases” and generate an infection rate, but you can’t test hundreds of millions of people, because no one has that many tests So, you test everyone who turns up sick, or thinks they’re sick and demands to be tested, or who touched someone sick who you already tested (though you’re not even sure that your test is accurate) and you come up with, let’s say, ten positive results. So you feed that number to the WHO, and they add it to the “active cases” count, regardless of the fact that everyone knows the real number is likely twenty times higher.

    OK, so now you take your “active cases” number and your “total deaths” number and you do the math (keeping in mind that your “total deaths” include those cancer and heart failure people), and you end up grossly underestimating your “infection rate” and “active cases,” and grossly overestimating your “death rate” and the number of “total deaths.”

    Just hypothetically, you understand.

    I am not suggesting this is actually happening. I certainly don’t want to get censored by Facebook (or accidentally censored by some totally innocuous technical glitch) for posting “Covid misinformation,” or tempt the Wikipedia “editors” to rush back to my Wikipedia page and label me a dangerous “conspiracy theorist” … or, you know, get myself preventatively quarantined.

    It probably won’t come to that anyway, i.e., rounding up “infected persons,” “possibly infected persons,” and “disruptive” and “uncooperative persons,” and quarantining us in, like, “camps,” or wherever. All this state of emergency stuff, the suspension of our civil rights, the manipulation of facts and figures, the muzzling of dissent, the illegal surveillance, governments legislating by decree, the soldiers, the quarantines, and all the rest of it … all these measures are temporary, and are being taken for our own good, and purely out of an “abundance of caution.”

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    I mean, it’s not like the global capitalist empire was right in the middle of a War on Populism (a war that it has been losing up to now) and wanted to take this opportunity to crank up some disaster capitalism, terrorize the global public into a frenzy of selfish and irrational panic, and just flex its muscles to remind everybody what could happen if we all keep screwing around by voting for “populists,” tearing up Paris, leaving the European Union, and otherwise interfering with the forward march of global capitalism.

    No, it certainly isn’t like that. It is an actual plague that is probably going to kill you and your entire family if you don’t do exactly what you’re told. So, forget this little thought experiment, and prepare yourself for global lockdown. It probably won’t be so bad … unless they decide they need to run the part of exercise where it goes on too long, and people get squirrelly, and start rebelling, and looting, and otherwise not cooperating, and the military is eventually forced to deploy those Urban Unrest Suppression Vehicles, and those Anti-Domestic-Terror Forces, and …

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    OK, I’m getting all worked up again. I’d better take my pills and get back to Facebook. Oh, and … I should probably check up on Idris! And see if Berlin has gone to “Level 3,” in which case I’ll need to find whatever online application I need to fill out in order to leave my house.


    Tyler Durden

    Thu, 03/19/2020 – 20:35

  • Kyle Bass Refuses To Say "COVID-19" To Virtue-Signaling CNBC Anchor, Claims Value Investing Finally Back
    Kyle Bass Refuses To Say “COVID-19” To Virtue-Signaling CNBC Anchor, Claims Value Investing Finally Back

    Kyle Bass, founder of Hayman Capital Management, took to CNBC yesterday for an interview about the investing landscape as a result of the coronavirus outbreak and the subsequent sharp sell off in markets. Bass talked about value investing, real estate, global banks and why he refuses to call the virus “Covid-19”. 

    Bass said he was really impressed by legislators working together and getting the spending bill through congress exceptionally quickly.

    “When you think back to the financial crisis, it took months to get everyone on board with TARP. Here we’ve moved some spending bills through in light speed,” Bass said.

    Regarding he virus’ impact, Bass took a long view:

    “What’s most important is that these things do happen. Things like this Chinese virus come into the world and they ravage the world and then they leave. We develop some sort of herd immunity.”

    “The Hong Kong flu was the last real big one,” Sullivan responds, perhaps unconsciously using the location of the virus origin to indicate which one he was talking about.  

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    Bass continued with his longer term outlook: “One of the things that the U.S. does best is that we all come together during crisis and we work hard to get through it. And we’re getting through it. I don’t think the government is asking people to send their kids to battlefields. They’ere asking people to stay home for a month,” Bass says. “These spending bills should help.”

    “There are drugs out there that have worked to head off the severity of this Chinese virus,” Bass continued. 

    Bass also said he thinks you can once again be a value buyer again:

    “It feels to me like the panic is so much larger than the financial crisis of 2008 and I think calmer heads will prevail. I think the prices that some of these things are transacting at today will be buys of a lifetime.”

    When asked about whether or not its a balance sheet problem with the banks, Bass says that instead of being the center of the problem, the banks are at the center of the solution:

    “We have the strongest banking system in the world. Europe never recapitalized, so their banks are in real trouble. The US will be the anchor for the world this time.”

    He continued:

    “It was the biggest bull market in history prior to the Wuhan virus attacking our marketplace. It’s created dislocations in many companies that I think will be rectified on the back end. You can be a value buyer once again.”

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    On the housing market, Bass said he didn’t think there would be a crash: “I think with rates back to 0%, what’s likely to happen if you look forward. What you’re going to see is 0% rates, enormous amounts of liquidity, I think inflation’s going to run hot and I think it’s going to be a really interesting housing market at that time. I don’t expect housing prices to drop much in the U.S.”

    “There will be a real big surge,” he says. 

    Later in the interview, the CNBC host takes exception with Bass using the term “China virus”. 

    “Let’s just call it Covid-19,” Brian Sullivan pleads.

    “Not Wuhan or China or coronavirus. Let’s just call it Covid-19. I think that will bring us all together. Can we do that?”

    Bass pushed back:

    “Changing the naming convention for viruses that’s gone on for the last 100 years – the point of origin has always helped people understand which virus it is. The Chinese communist party has asked the world – actually, propagandized the world – with this Covid-19. If we start naming diseases after numbers, we’re never going to remember what kind of disease it is.”

    “I want to make sure we don’t take it to a country level,” Sullivan responds.

    “We call things West Nile Virus, why can’t we call it the Wuhan Flu? We can call it whatever we want to call it, I’m not going to call it what the Chinese government wants me to call it.”

    You can watch Bass’ full interview here:


    Tyler Durden

    Thu, 03/19/2020 – 20:15

  • The Problem With Pragmatism… And Inflation
    The Problem With Pragmatism… And Inflation

    Authored by Michael Lebowitz via RealInvestmentAdvice.com,

    Pragmatism is seeking immediate solutions with little to no consideration for the longer-term benefits and consequences. An excellent example of this is the Social Security system in the United States. In the Depression-era, a government-sponsored savings plan was established to “solve” for lack of retirement savings by requiring contributions to a government-sponsored savings plan.  At the time, the idea made sense as the population was greatly skewed towards younger people.  No one seriously considered whether there would always be enough workers to support benefits for retired people in the future. Now, long after those policies were enacted and those that pushed the legislation are long gone, the time is fast approaching when Social Security will be unable to pay out what the government has promised.

    Pragmatism is the common path of governments, led by politicians seeking re-election and the retention of power. Instead of considering the long-term implications of their policies, they focus on satisfying an immediate desire of their constituents.

    In his book Economics in One Lesson, Henry Hazlitt made this point very clear by elaborating on the problems that eventually transpire from imprudent monetary and fiscal policy.

    “The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups.

    Nine-tenths of the economic fallacies that are working such dreadful harm in the world today are the result of ignoring this lesson.”

    Inflation

    One of the most pernicious of these issues in our “modern and sophisticated” intellectual age is that of inflation. When asked to define inflation, most people say “rising prices,” with no appreciation for the fact that price movements are an effect, not a cause. They are a symptom of monetary circumstances. Inflation is a disequilibrium between the amounts of currency entering an economic system relative to the productive output of that same system.

    In today’s world, there is only fiat (“by decree”) currencies. In other words, the value of currencies are not backed by some physical commodity such as gold, silver, or oil. Currencies are only backed by the perceived productive capacity of the nation and the stability of the issuing government. If a government takes unreasonable measures in managing its fiscal and monetary affairs, then the standard of living in that society will deteriorate, and confidence in it erodes.

    Put another way, when the people of a nation or its global counterparts lose confidence in the fiscal and monetary policy-makers, the result is a loss of confidence in the medium of exchange, and a devaluation of the currency ensues. The influence of those in power will ultimately prove to be unsustainable.

    Inflation is an indicator of confidence in the currency as a surrogate of confidence in the policies of a government. It is a mirror. This is why James Grant is often quoted as saying, “The gold price is the reciprocal of the world’s faith in central banking.”

    Confidence in a currency may be lost in a variety of ways. The one most apparent today is creating too many dollars as a means of subsidizing the spending habits of politicians and the borrowing demands of corporations and citizens.

    Precedent

    There is plenty of modern-day historical precedent for a loss of confidence from excessive debt creation and the inevitable excessive currency creation. Weimar Germany in the 1920s remains the modern era poster child, but Zimbabwe, Argentina, and Venezuela also offer recent examples.

    Following the 2008 financial crisis, many believed that the actions of the Federal Reserve were “heroic.” Despite failing to see the warning signs of a housing bubble in the months and even years leading up to the crisis, the Fed’s perspective was that it exists to provide liquidity. As the chart below illustrates, that is precisely what they did.

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    Data Courtesy Bloomberg

    That pragmatic response failed to heed Hazlitt’s warning. What are the longer-term effects for the economy, the bailed-out banking system, and all of us? How would these policies affect the economy, markets, society, and the wealth of the nation’s citizens in five, ten, or twenty years?

    Keeping interest rates at a low level for many years following the financial crisis while the economy generally appears to have recovered raises other questions. The Fed continues to argue that inflation remains subdued. That argument goes largely undisputed despite credible evidence to the contrary. Further, it provides the Fed a rationalization for keeping rates well below normal.

    Politicians who oversee the Fed and want to retain power, consent to low-rate policies believing it will foster economic growth. While that may make sense to some, it is short-sighted and, therefore, pragmatic. The assessment does not account for a variety of other complicating factors, namely, what may transpire in the future as a result? Are seeds of excess being sown as was the case in the dot-com bubble and the housing bubble? If so, can we gauge the magnitude?

    Policy Imposition

    In the mid-1960s, President Lyndon Johnson sought to escalate U.S. involvement in the Vietnam War. In doing so, he knew he would need the help of the Fed to hold interest rates down to run the budget deficits required to fund that war. Although then-Fed Chairman William McChesney Martin was reluctant to ease monetary policy, he endured various forms of abuse from the Oval Office and finally acquiesced.

    The bullying these days comes from President Trump. Although his arguments for easier policy contradict what he said on the campaign trail in 2016, Jerome Powell is compliant. Until recently, the economy appeared to be running at full employment and all primary fundamental metrics were well above the prior peaks set in 2007.

    Additionally, Congress, at Trump’s behest and as the chart below illustrates, has deployed massive fiscal stimulus that created a yawning gap (highlighted) between fiscal deficits and the unemployment picture. This is a divergence not seen since the Johnson administration in the 1960s (also highlighted) and one of magnitude never seen. As is very quickly becoming clear, those actions both monetary and fiscal, were irresponsible to the point of negligence. Now, when we need it most as the economy shuts down, there is little or no “dry powder”.

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    Data Courtesy Bloomberg

    President Johnson got his way and was able to fund the war with abnormally low interest rates. However, what ensued over the next 15 years was a wave of inflation that destroyed the productive capacity of the economy well into the early 1980s. Interest rates eventually rose to 18%, and economic dynamism withered as did the spirits of the average American.

    The springboard for that scenario was a pragmatic policy designed to solve an immediate problem with no regard for the future. Monetary policy that suppressed interest rates and fiscal policy that took advantage of artificially low interest rates to accumulate debt at a relatively low cost went against the American public best interests. The public could not conceive that government “of, by and for the people” would act in such a short-sighted and self-serving manner.

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    Data Courtesy Bloomberg

    The Sequel

    Before the COVID-19 pandemic, the Congressional Budget Office (CBO) projections for U.S. budget deficits exceeded $1 trillion per year for the next 10-years. According to the CBO, the U.S. Treasury’s $22.5 trillion cumulative debt outstanding was set to reach $34.5 trillion by 2029, and that scenario assumed a very optimistic GDP growth of 3% per year. Further, it laughably assumed no recession will occur in the next decade, even though we are already in the longest economic expansion since the Civil War. In the event of a recession, a $1.8 trillion-dollar annual deficit would align with average historical experience. Given the severity of what is evident from the early stages of the pandemic, that forecast may be very much on the low end of reality.

    The 1960s taught us that monetary and fiscal policy is always better erring on the side of conservatism to avoid losing confidence in the currency. Members of the Fed repeatedly tell the public they know this. Yet, if that is the case, why would they be so influenced by a President focused on marketing for re-election purposes? Alternatively, maybe the policy table has been set over the past ten years in a way that prevents them from taking proper measures? Do they assume they would be rejected despite the principled nature of their actions?

     

    Summary

    Inflation currently seems to be the very least of our worries. Impeachment, Iran, North Korea and climate change were all crisis head fakes.

    The Fed was also distracted by what amounted to financial dumpster fires in the fall of 2019. After a brief respite, the Fed’s balance sheet began surging higher again and they cut the Fed Funds rate well before there was any known threat of a global pandemic. What is unclear is whether imprudent fiscal policies were forcing the Fed into imprudent monetary policy or whether the Fed’s policies, historical and current, are the enabler of fiscal imprudence. Now that the world has changed, as it has a habit of doing sometimes even radically, policymakers and the collective public are in something of a fine mess to understate the situation.

    Now we are contending with a real global financial, economic, and humanitarian threat and one that demands principled action as opposed to short-sighted pragmatism.

    The COVID-19 pandemic is clearly not a head fake nor is it a random dumpster fire. Neither is it going away any time soon. Unlike heads of state or corporate CEOs, biological threats do not have a political agenda and they do not care about the value of their stock options. There is nothing to negotiate other than the effectiveness of efforts required to protect society.

    Given the potential harm caused by the divergence between stimulus and economic fundamentals, it would be short-sighted and irresponsibly pragmatic to count out the prospect of inflation. Given the actions of the central bankers, it could also be the understatement of this new and very unusual decade.


    Tyler Durden

    Thu, 03/19/2020 – 19:55

  • The "Risk Parity-Negative Gamma-CTA" Feedback Loop
    The “Risk Parity-Negative Gamma-CTA” Feedback Loop

    Authored by Ryan Fitzmaurice of Rabobank

    Summary

    • So far 2020 is off to a volatile start with out-sized moves observed across asset-classes.
    • Many, if not all, of today’s prominent strategies utilize a volatility-adjusted position sizing method of some sort
    • Markets have been suffering from feedback loops as volatility driven portfolio rebalancing triggers CTA trend and momentum signals as well as “negative gamma” from swaps dealers

    So far 2020 is off to a volatile start for all asset-classes as virus contagion fears and global growth concerns have led to out-sized market moves. The spike in volatility has had serious implications for speculative flows across markets given the highly systematic trading regime we are in. Many, if not all, of today’s prominent strategies utilize a volatility-adjusted position sizing method of some sort. The thought being that to maintain a pre-determined portfolio volatility target, regular rebalancing of individual position sizes in conjunction with changes in market volatility is necessary. So given the heightened volatility we have witnessed, funds and asset managers have reacted accordingly by slashing position sizing across risk-assets which has unintentionally triggered selling from CTAs and Managed Futures programs as momentum and trend signals turn “bearish” on the back of the volatility inspired selling pressure.

    Crude oil is a classic example of this dynamic and was one of the first markets to be impacted by the sell-off in risk-assets. In fact, oil started the year on a very firm note with Brent crude trading above $70/bbl in early January as news of the US strike on Iranian General Soleimani in Baghdad hit the wires. Unsurprisingly, oil spiked higher on the news, as is generally the case when tensions flare in the Middle East, however, that early spike marked the high point for the year so far and prices have been falling precipitously ever since. Many analysts and traders attributed the sharp reversal to a quick de-escalation in tensions between the two long-time foes but to our minds it was more a function of risk parity funds and systematic strategies, who were big “longs” at the time, being forced to liquidate due to the spike in volatility. The selling in oil then snowballed as China went into full-lockdown and further risk-off trades were initiated, leading CTAs to flip from an out-sized “long” position to a sizable “short” position, which is where they currently sit.

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    “Risk-off” mode

    Global equity markets have experienced some sharp down-turns in recent weeks as traders and investors scramble to price in the economic impact of the coronavirus outbreak in China and beyond. Up until mid-to-late February, equity markets had mostly shrugged off the virus concerns that first arose in January, and many indices even rallied to all-time highs in February before panic hit and volatility spiked, initiating the same feedback loop that we saw impact crude oil markets.

    Initially, risk-parity funds and systematic strategies, who held sizable “long” positions in February, were forced to sell holdings as a direct result of the sharp increase in the VIX that led to volatility-driven portfolio rebalancing. This dynamic was then amplified by swap dealer “negative gamma” positions, as many banks were short “puts” below the market which are now “in the money”. This combination of forces has led to wild swings as market makers are forced to sell into weakness and buy into strength to maintain a delta-neutral portfolio. Like crude oil, this forced selling ultimately snowballed and has very rapidly flipped many of the prevalent CTA trend and momentum signals from “long” to “short”. The aggressive selling has added to market volatility as bids continue to back up as natural buyers disappear.

    The risk-off trade has also led to a “flight to safety” as investors aggressively pile into treasury bonds, a traditional safe-haven asset class. In fact, the 10 year US treasury yield fell to a new all-time low of just .3137 % in recent days. The sharp move higher has triggered a number of momentum and trend signals which has led to significant CTA buying, even as US yields approach zero. Needless to say, volatility across asset classes remains elevated as a result of the sharp virus-driven moves, albeit from a very low base. We fully expect market volatility to remain elevated in this environment and as systematic market flows shift into and out of asset classes.

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    CTA Positioning

    Commodities

    Commodity markets have suffered the brunt of the market impact from the virus contagion as the optimism surrounding Phase One of the US-China trade agreement has given way to fears of a deadly global pandemic. In fact, the diversified Bloomberg Commodity Index is down more than 20% year-to-date with precious metals being the only sub-sector hanging on to any semblance of “bullish” momentum. Energy and agricultural markets have suffered out-sized losses as China remains the key driver of commodity demand growth for those key industries. The moves have been ironic as 2020 was expected to be a strong year for commodities markets given the Phase One trade agreement between the US and China. Nevertheless, CTAs are now heavily “short” commodity markets with the exception of precious metals, although, we see risk that CTAs will start to reduce gold length in the coming days given the potential for short and medium term momentum signals to flip from “long” to “short”, as can be seen in the table below.

    For reference: red = short, green = long, number = the # of days for a potential flip in signal calculated using the Average True Range (only displayed if 3 or less)

    • Sell stops: Gold: $1500 USD/oz, $1480 USD/oz
    • Buy stops: Silver: $15.30 USD/oz; Platinum: $830 USD/oz; Palladium: $1600 USD/oz, $1540 USD/oz

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    • Sell stops: Coffee: 103 USd/lb, 97 USd/lb
    • Buy stops: Corn: 383 USd/bu, 378 USd/bu; Soymeal: 312 USD/T; Sugar: 12.84 USd/lb, 11.95 USd/lb

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    Equities

    CTAs came into 2020 with across the board “long” positions in global equity indices given the strong performance in 2019 and especially in 4Q19. As noted, global equity markets initially had a delayed reaction to the economic impact of the virus outbreak, however, that has all changed along with the rapidly deteriorating global growth outlook. Losses for the major global indices are quickly stacking up with some down more than 30% in just a couple weeks’ time. Ironically, it’s been Chinese markets that have fared the best this year despite the virus originating there. CTAs are now overwhelming “short” global equity indices as a result of the “bearish” momentum and as indices erase over a years’ worth of gains in short order.

    • Sell stops: Nasdaq: 7435 index pts, 8605 index pts
    • Buy stops: Nasdaq: 7937 index pts; S&P: 500 2847 index pts

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    Rates

    Interest rate futures started off the year with little optimism given that the US Fed was indicated to be on “pause” with respect to more cuts but also with little to no hope for hikes. This was reflected in the CTA positioning which came into the year mixed with no strong underlying trends in play. This has all changed rapidly, however, and CTAs are now overwhelmingly “long” interest rate futures as the “risk-off” trade has triggered a classic “flight to safety” trade. While the rush into bond futures has paid off thus far, the fact of the matter is CTAs are now extremely “long” yields that are already negative in Europe, zero in Japan, and not much better in the US.

    • Sell stops: Euro Bund 10yr: 171.5 points, Japan 10yr: 153 points, 152.25 points
    • Buy stops: No imminent stops

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    Foreign Exchange

    Foreign exchange markets were very dull for much of the last year with the sector even registering record low volatility but that that has all suddenly changed and we could be headed for a prolonged period of heightened volatility as we see it. This is also apparent from the mixed CTA positioning currently in play across the FX space and the fact that we are seeing the “herd” begin to reverse direction in some long-held positions such as the bearish Euro trade that has been in place now for some time. As you, can see from the table below, the “short” and “medium” term momentum signals are only two days average “up” days from flipping to “buy” signals.

    • Sell stops: US Dollar Index: 97.85; Japanese Yen: 92.67, 92.33
    • Buy stops: British Pound: 125.8; Japanese Yen: 94.12; Euro: 112.63, 112.70

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    Looking Forward

    Looking forward we see CTAs fully positioned for further “risk-off” moves given they are net “short” equities and commodities in a meaningful way while holding a sizable “long” position in interest rate futures. In our view, CTA portfolios are at risk of being whipsawed out of their current positions should things begin to improve with respect to the coronavirus and global economic growth, however, the timing of any relief is still a very big unknown. It is worth keeping an eye on the VIX and commodity market volatility levels as risk-parity funds will begin rebuilding “long” positions as volatility falls. This buying pressure could then work to trigger upside “buy-stops” just as it did “sell-stops” on the initial volatility spikes and subsequent price declines. It is also worth noting, that CTAs as a whole have fared quite well through these turbulent markets and have far outperformed the often cited S&P 500 benchmark and especially in recent days as global equity markets have collapsed. Ironically, this outperformance comes after a long period of prolonged outflows from CTA funds as investors became disillusioned with the strategy after years of poor performance, a fact we highlighted in an earlier note “CTA and Managed Futures primer”. 

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    Tyler Durden

    Thu, 03/19/2020 – 19:35

Digest powered by RSS Digest

Mar 19

Today’s News 19th March 2020

  • BoE's Bailey To Print Unlimited Money, Tells Short Sellers "Just Stop" Amid Covid-19 Chaos
    BoE’s Bailey To Print Unlimited Money, Tells Short Sellers “Just Stop” Amid Covid-19 Chaos

    BoE governor Andrew Bailey said on Wednesday that the central bank stands ready to pump unlimited amounts of money into the economy.

    Speaking to journalists on a conference call, quoted by Financial Times, Bailey said the central bank is prepared to pump liquidity into markets via its new commercial paper facility. He said this would limit economic damage produced by the virus crisis.

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    He told members of the financial community that they must stop ‘exploiting’ vulnerable business by betting against them:

    “Anybody who says, ‘I can make a load of money by shorting’ [aggressively betting on the value of specific companies continuing to fall] which might not be frankly in the interest of the economy, the interest of the people, just stop doing what you’re doing.”

    Bailey made it clear that financial markets will remain open as a sign of confidence. He said firms who are thinking of reducing staff must reconsider because support from the central bank and government can lessen the shock.

    He urged firms to “stop, look at what’s available, come and talk to us [or] the government before you take that position,” adding that support will be supplied to citizens as well.

    The hardest-hit UK industries have so far been airliners, retailers, restaurants, movie theaters, and much of the services industry, as it has completely ground to a halt as the government enforces social distancing measures to flatten the curve to slowdown infections. As of 2018, the services sector accounted for at least 80% of the UK economy.

    Baily said emergency loans have been available by the central bank to companies that have already fired employees. He told BBC News:

    “I would emphasise the point that it’s critical that we support the needs of the people in the country.”

    Baily took the reins from Mark Carney at midnight on Monday and has already faced an economic crisis on par to a decade ago as helicopter money is now needed to save the economy from crashing.

    “This is a crisis we’re all in. It’s an emergency situation,” Bailey said.

    The BoE is expected to cut interest rates from .25% to .10% and resume quantitative easing when it meets next week. Bailey isn’t a supporter of NIRP and has pushed measures to shield businesses and workers from virus impacts.


    Tyler Durden

    Thu, 03/19/2020 – 02:45

  • Covid-19 Comes For Europe
    Covid-19 Comes For Europe

    Authored by Guy Milliere via The Gatestone Institute,

    Italy’s healthcare system is in a state of almost total collapse. As of today, 31,506 people in Italy have been infected with the coronavirus; of which 2,503 people have died. The numbers continue to grow. Hospitals are overwhelmed. Doctors have to choose which sick person to save and which sick person not to save.

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    The country has almost completely shut down. Many businesses are running in slow motion or have stopped. Prisoners are staging uprisings. Millions of people have been ordered to stay home and are allowed out only briefly to buy food. Most shops are shut. All public gatherings are prohibited, even funerals. Big cities look like ghost towns.

    No other Western country has been so severely affected by the pandemic as Italy. Why?

    First, Italy has an aging population. The median age of Italians is 47.3 years; one in four Italians is over 65. In addition, the country’s birth rate is extremely low: 1.29 children per woman. Even before the coronavirus pandemic, Italy was a dying country. Sadly, the virus has accelerated the process.

    Second, the authorities and medical personnel apparently underestimated the danger. Although the Italian government had suspended flights for days from China and Hong Kong from January 31, Italian doctors were saying that the illness was just a “bad flu“. On March 9, an epidemiologist, Silvia Stringhini, wrote: “The media are reassuring, the politicians are reassuring, while there’s little to be reassured of”.

    Third, the Italian health system is in appallingly bad condition. There are not enough intensive care units and, as everywhere, the possibility of a major crisis simply was not anticipated. In Italy there are 2.62 acute-care hospital beds per 1,000 residents (by comparison, the number in Germany is 6.06 per 1,000 residents). The Italian health system is entirely run by the government. A public health care service (SSN, Servizio Sanitario Nazionale) pays the doctors directly, limits their number, and sets the maximum number of patients they can treat per year (1,500).

    Government-run healthcare always ends up being about the government trying to cut its costs rather than to help its citizens. Private clinics do exist, but represent only a small part of the care offered (the public system represents 77% of total health-care spending. (The only country in Europe where the figure is higher is the United Kingdom, where the figure is 79%.) Public hospitals must manage shortages, and when an exceptional situation occurs, rationing care leads to horrific choices. A recent report by Siaarti (Società Italiana di Anestesia Analgesia Rianimazione e Terapia Intensiva) bureaucratically offers “ethical recommendations for admission and intensive treatment in exceptional conditions of imbalance” and speaks of “consensual criteria of distributive justice” to justify not treating certain patients and leaving them to die.

    Fourth, and rarely mentioned, is that Italy today is evidently home to a large Chinese community (more than 300,000), made up of people who arrived in the past two decades and who work in the textile and leather sector. Many of the Chinese living in Italy are from Wuhan and Wenzhou, and some had just been in Wuhan and Wenzhou for the Chinese New Year on January 25, when the Chinese authorities could not hide the epidemic any longer. These Chinese had returned to Italy from China before the Italian government suspended flights from there. The epidemic emerged in Lombardy; Bergamo, one of the capitals of the Italian textile industry, was one of the first cities affected.

    Before the pandemic, the Italian economy was already in a state of stagnation; now, as people stay home and shops shut, it will probably plunge into a recession. Italian banks, since mid-February, have lost 40% of their market value. Major financial upheavals seem on the way.

    The Italian government was hoping for help from the European Union, but neither the other member states nor the European Union itself has given any at all. Maurizio Massari, Italy’s ambassador to the European Union, said at a recent European summit on the pandemic, that Brussels should go beyond “engagement and consultations”, and that Italy needed “quick, concrete and effective actions”. He got nothing.

    Christine Lagarde, president of the European Central Bank, refused to lower interest rates to help Italy; it was a statement Italian leaders took as a demonstration of contempt. Italian President Sergio Mattarella said that Italy expected “solidarity from the EU institutions,” not “moves that could hinder Italy’s actions”. “Italy,” said Matteo Salvini, leader of the Lega party, “has been given a slap in the face”.

    The dismissive attitude of the EU and the other members states seems to have been dictated by the fear of sliding into a situation as calamitous as that of Italy.

    All European countries have an aging population, even if less than Italy’s (the median age in Germany is 46.8; in France it is 41.2; in Spain it is 42.3). No country in the European Union has taken a clear, hard look at the danger Europe is facing.

    “The coronavirus is very contagious,” France’s minister of health, Agnes Buzyn, said on January 26, “but much less serious than we thought”.

    The borders between France and Italy were not closed in time (only Austria and Slovenia closed their borders with Italy early), and Italians who wished to go to France were not stopped. The health systems of other European countries are not better prepared than the Italian one was. In Spain, Insalud (Instituto Nacional de Gestion Sanitaria), an organization equivalent to the Italian system, exists, and shortages and rationed care are the rule. The German (Krankenkassen) and the French (Sécurité Sociale) health insurance systems also operate on the same principles as those in Italy and Spain, and produce similar results. The economies of the main countries of the European Union were in a state of stagnation before the pandemic, and, like the Italian economy, are likely to plunge into a recession soon, too.

    At the time of publication, 11,826 people were infected in Spain, 7,695 in France, and 9,360 in Germany. In Spain, 533 people have died; in France, 148 people, and in Germany only 26. As in Italy, the numbers escalate fast.

    On March 11, German Chancellor Angela Merkel said to journalists who were accusing her of doing nothing, “60 to 70% of Germans will be infected with the coronavirus”. Lothar Wieler, President of the Robert Koch Institute, the German government agency in charge of disease prevention and control, added that it was necessary to “avoid overloading hospitals” and to let the epidemic gain ground slowly over time.

    An adviser to French President Emmanuel Macron told a journalist at Le Figaro that the strategy of France was the same as in Germany: the decision was made to “let the epidemic run its course and not try brutally to stop it”. He suggested that the official will was to create “herd immunity“, a term first used in the United Kingdom by Sir Patrick Vallance, the UK government’s chief science adviser. He had said that the aim of the British government was to accept that a significant number of the citizens of a country would be infected, recover, and therefore be immunized. The French and German authorities evidently found inspiration in Sir Patrick’s remarks.

    The British government, faced with criticism from the World Health Organization, replied that “herd immunity” was not a stated policy, but no statement by the German or French governments said that “herd immunity” was not the policy they chose.

    Umair Haque, the British Director of the Havas Media Lab, wrote:

    “Herd immunity describes how a population is protected from a disease after vaccination by stopping the germ responsible for the infection being transmitted between people. Letting an entire nation be rampaged by a lethal virus for which there’s no vaccine? How much death and mayhem would that cause, by the way?”

    “Europe has now become the epicentre of the pandemic, with more reported cases and deaths than the rest of the world combined, apart from China,” noted Tedros Adhanom Ghebreyesus, director general of the World Health Organization. “More cases are now being reported every day than were reported in China at the height of its epidemic.” Sadly, all available data show that he is right.

    On March 11, President Donald Trump announced that the US was suspending all flights between the United States and Europe, a decision fully justifiable to save American lives. The next day, nevertheless, the heads of the European Union could not resist trying to maul the president: “The EU disapproves of the fact that the U.S. decision to impose a travel ban was taken unilaterally and without consultation,” they said.

    It is to be hoped that by now notions of ​​”herd immunity” have been abandoned, and that the EU gets back to salvaging for Europe whatever it can.


    Tyler Durden

    Thu, 03/19/2020 – 02:00

  • China Takes Axe To Alternative Energy Funding, Slashing Subsidies For Solar And Wind
    China Takes Axe To Alternative Energy Funding, Slashing Subsidies For Solar And Wind

    Things might be going from bad to worse for Elon Musk and his merry band of alternative energy cultists in China. While Musk is currently in the midst of criticism from the Chinese government related to a bait and switch he is pulling on vehicle hardware (while blaming the coronavirus), the Chinese government appears to be set on slashing additional alternative energy subsidies in 2020. 

    China is going to cut its budget for new solar power plants in half this year and plans on completely ending handouts for offshore wind farms, according to Caixin. 

    It is the latest in a string of moves by the Chinese government to cut support for renewable energy. The attitude has shifted in recent years as manufacturing costs have dropped. The government now seems focused on getting renewable energy to stand on its own. 

    On Tuesday, China’s National Energy Administration (NEA) announced it had cut this year’s subsidies for new solar power projects by 50% to 1.5 billion yuan ($215.8 million). “Of the total, it has earmarked 1 billion yuan for large solar projects, which will be divvied out through auctions. The remainder will be used for residential solar systems,” Caixin reports.

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    China is also doing away with subsidies for new offshore wind farms this year and is ending subsidies for new onshore projects in 20201. 

    Shi Jingli, a professor at a research institute under China’s top economic planner said: “Cutting subsidies for new renewable energy projects is a reasonable measure to allocate funds more wisely. The generous subsidies given to offshore wind farms over the past few years have weighed on the central government’s finances and caused severe deficits in subsidy funding.”

    Jingli continued: “Considering the damage that the coronavirus outbreak has done to businesses, the NEA has extended the application period for the auctions until mid-June. It has also given solar and wind farm operators an additional month to apply to connect their projects to the country’s power grid, which is necessary for a power plant to start selling electricity.”

    Meanwhile, new installations of solar power capacity plunged 40% last year after the country installed 26.81 gigawatts of new capacity. Numerous other projects underway have already hit major delays due to the coronavirus outbreak and supply chain disruptions. 

    Could EVs be next?


    Tyler Durden

    Thu, 03/19/2020 – 00:50

  • Standing At The Precipice Of A Financial Collapse: Time For A 21st Century Pecora Commission
    Standing At The Precipice Of A Financial Collapse: Time For A 21st Century Pecora Commission

    Authored by Matthew Ehret via The Strategic Culture Foundation,

    As Republican and democrat politicians hold emergency meetings to decide how to avoid a meltdown of Wall Street, the smell of hyperinflation looms in the air as much today as it did in Germany during the opening months of 1922. This week, markets were propped up by a record breaking offering of $1.5 Trillion in liquidity injections over the coming months (added to the $9 trillion already injected over the past six months), and rather than deal with the real reasons for this oncoming financial collapse, the media has brainwashed the west that everything would have been just fine, “if only coronavirus had not become a pandemic”.

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    But what is really being bailed out here exactly and why? Is this money actually making it to the real economy? Is it being invested to rebuild America’s farms, businesses and industry?

    The reality is that the only thing being saved are the “Too Big to Fail” banks that are sitting atop a $1.5 quadrillion of derivatives bomb. Of the most bankrupt of America’s speculators are JPMorgan Chase, Citigroup and Goldman Sachs, whose derivatives exposure hit $48 trillion, $47 trillion and $42 trillion respectively in recent years.

    It is my contention that Trump is genuine in his desire to “drain the swamp” and rebuild America’s lost industrial base. I also genuinely believe that Trump wishes to establish positive relations with Russia, China and other sovereign nation states which has drawn the ire of the international deep state. However Trump’s potentially fatal blind spot appears to be his tendency to believe the lie that Wall Street’s wellbeing is somehow indicative of America’s wellbeing.

    If Trump is intelligent, (and his previous calls for Glass-Steagall’s restoration, and American System practices imply that he knows a thing or two), then rather than bailing out Wall Street by unleashing more gasoline onto the fire, it were better that he took the lessons of 1933 and established a new Pecora Commission for 2020.

    What was the Pecora Commission?

    Many are aware of the economic meltdown of October 24,1929 that ushered in four years of depression onto America (and much of the western world). However not many people are aware of the intense fight that was launched by patriots in both parties against the Wall Street/deep state parasite of that age which prevented both a fascist coup against the newly elected Franklin Roosevelt while also crippling Wall Street’s command of American life. In spite of whitewashing revisionist history books that contaminated the past 70 years, America’s recovery from the depression never occurred without a life or death struggle and this struggle was made possible, in large measure by the courageous work of an Italian lawyer from New York. This man’s name was Ferdinand Pecora.

    By 1932, when Senators Peter Norbeck (R-SD) and George Norris (R-NB) spearheaded the establishment of the U.S. Committee on Banking and Currency, the American economy was on life support and the people were so desperate that a fascist dictatorship in America would have been welcomed with open arms if only bread could be put on the table. Unemployment had reached 25%, while over 40% of banks had gone bankrupt and 25% of the population had lost their savings. Thousands of tent cities called ‘Hoovervilles’ were spread across the USA and over 50% of America’s industrial capacity had shut down. Thousands of farms had been foreclosed and the engines of American industry had grinded to a screeching halt.

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    Across the ocean, the fascist regimes of Germany, Italy and Spain were growing more powerful by the day fed by injections of hundreds of millions of dollars of capital by London and Wall Street bankers. Notable among these pro-fascist financiers was none other than Bush family patriarch Prescott, who provided millions in loans to Hitler’s bankrupt Nazi party in 1932 (and continued doing business with the party through 1942- having only stopped after being found guilty for “trading with the enemy”).

    The Committee on Banking and Currency was a relatively impotent body when it began in 1932, but when Senator Norbeck called in Ferdinand Pecora to lead it in April 1932, everything began to change. A first generation Italian-American, Pecora was forced to quit high school after his father was injured in order to support his family. Years later, the young man found work as a clerk in a law firm, and managed to work his way through law school, passing the bar in 1911. His unimpeachable reputation earned him the animosity of powerful NY financiers who ensured that his successes in prosecuting brokers never resulted in attaining Attorney General, where he made a name for himself shutting down over 100 illegal brokerage houses that speculated on fraudulent securities during the depression.

    Within days of accepting the Washington job as Chief Council of Norbeck’s committee (for the meager salary of $250/month), Pecora was granted broad subpoena powers to audit banks and drag the most powerful men in America to testify in the committee’s hearings.

    In his first two weeks, Pecora made headlines by auditing the books of major Wall Street banks and pulled in pro-fascist National City President Charles Mitchell (then preparing to advise Benito Mussolini) to testify. Within days, Mitchell’s team of expensive defense attorneys could do nothing but watch in despair as the powerful financier admitted to short selling his own bank’s stocks during the depression, scamming depositors with purchases of Cuban junk debt and avoiding taxes for years. Mitchell was forced to resign in shame followed days later by NY Stock Exchange Chair Dick Whitney- who left the court in handcuffs.

    This crackdown on Wall Street’s abuses were highly publicized and put the spotlight on the criminal schemes used to gamble with savings and commercial bank deposits on securities and futures markets which led to the orchestrated collapse of the bubble economy in 1929 (ironically much of the bubble built up during the “easy-money days” of the “roaring 20s” was centered in the housing market). Pecora’s crackdown also set the tone for the incoming Roosevelt administration.

    Unlike the previous 1911 Pujo Commission led by Senator Charles Lindberg Sr. which also exposed Wall Street’s abuses of power, the Pecora Commission was supported by a President who actually cared about the Constitution and amplified Pecora’s powers even further. When FDR was told that supporting Pecora’s exposures of financial crimes would hurt the economy, the President famously responded with “they should have thought of that when they did the things that are being exposed now.” FDR followed up that warning by encouraging the attorney to take on John Pierpont Morgan Jr.

    Rather than controlling an American institution as many believed 70 years ago and today, J.P. Morgan Jr. was actually running an operation that had earlier been created in the mid-19th century as part of a British infiltration of America. As historian John Hoefle pointed out in a 2009 EIR study:

    “The House of Morgan was, in truth, a British operation from its inception. It began life as George Peabody & Co., a bank founded in London in 1851 by American George Peabody. A few years later, another American, Junius S. Morgan, joined the firm, and upon Peabody’s death the firm became J.S. Morgan & Co. Junius Morgan brought in his son, J. Pierpont Morgan, to head the New York office of J.S. Morgan, and the New York office became J.P. Morgan & Co. From its original role in helping the British gain control of American railroads, the Morgan bank became a leading force in the oligarchy’s war against the American System, using the deep pockets of its imperial masters to become a powerhouse in not only finance but steel, automobiles, railroads, electricity generation, and other industries.”

    By 1933, the House of Morgan grew into a multi-headed hydra controlling utilities, holding companies, banks and countless other subsidiaries.

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    Senator George Norris showcasing a chart of Wall Street power

    When J.P. Morgan jr. was called to testify, the banker carried a midget on his lap in mockery of the “circus of the commission”. As the questions began however, the arrogant banker was caught off guard by Pecora’s proof of Morgan’s secret “preferred clients lists” of politicians whom the banker owned and who received stock offerings at discount rates. Named among the thousands of traitors on this list, Pecora revealed former president Calvin Coolidge, Coolidge’s Treasury Secretary Andrew Mellon (a Schacht-Hitler supporter from the start), financier Bernard Baruch, Supreme Court Justice Owen Roberts and Democratic Party controller John Jacob Raskob. Raskob was not only a major speculator but was also the leader of the American Liberty League which tried repeatedly to overthrow FDR between 1933-1939 and worked to ally America with axis powers from 1939-1941.

    Morgan’s god-like ego was brought down to the level of mortals when the flustered banker was only able to answer “I can’t remember” repeatedly when asked if he had paid taxes over the past 5 years. As it turned out, by the end of the trial, it was revealed that NONE of the subsidiaries of the House of Morgan paid any taxes during the entire period of the depression, and were caught gambling with depositors assets from commercial accounts. These revelations didn’t sit well with a population dying of starvation across the streets of America.

    Similar displays of corruption were made of the heads of Kohn Loeb, Chase Bank, Brown Brothers Harriman and others.

    Faced with these revelations, The Nation magazine famously reported “If you steel $25, you’re a thief. If you steal $250 000, you’re an embezzler. If you steal $2.5 million, you’re a financier.”

    Pecora’s ally Sen. Burton Wheeler said “the best way to restore confidence in our banks is to take these crooked presidents out of the banks and treat them the same as we treated Al Capone.”

    FDR Drains the Swamp

    With the light cast firmly upon the dark shadows where vile creatures like J.P. Morgan and other financial gremlins reside, the population was finally able to start making sense of what injustices befell them during the years of post-1929 despair. While not every banker went to prison as Wheeler or Pecora would have liked, examples were made of dozens who did and many more whose careers were shamefully ended. Most importantly however, this exposure gave Franklin Roosevelt the support needed to drain the swamp and impose sweeping reforms upon the banks.

    In the first hundred days, FDR was able to:

    1) Impose Glass-Steagall banking separation (forcing Wall Street banks to break up their functions and preventing speculators from gambling with productive assets)

    2) Create the Federal Deposit Insurance Corporation (FDIC) that protected citizens’ savings from future crises

    3) Create the Securities Exchange Commission to provide oversight to Wall Street’s activities and on whose body Pecora was appointed commissioner in 1934.

    4) Unleash broad credit through the Reconstruction Finance Corporation (RFC) which acted as a national bank bypassing the private Federal Reserve, channeling $33 billion to the real economy by 1945 (more than all private commercial banks combined)

    5) Impose protective tariffs on agriculture, metals and industrial goods to stop dumping of cheap products in America and rebuild America’s physical economy

    6) Create vast public works, like the Tennessee Valley Authority, Grand Coulee dams, Hoover dams, St Laurence development and countless other projects, hospitals, schools, bridges, roads and rail under the New Deal that acted in many ways then as China’s Belt and Road Initiative has in our modern age. Unfortunately, Roosevelt died before this new form of political economy could be internationalized abroad in the post-war years as an anti-colonial program.

    A beautiful outline of FDR’s struggle is showcased in the 2008 film ‘1932: Speak not of Parties but of Universal Principles’.

    Subverting a Fascist Coup Then and Now

    Ferdinand Pecora’s Commission shaped the dynamics of America so intensely by its simple power of speaking the truth, that efforts to run a fascist coup against FDR using a general named Smedley Butler also came undone before it could succeed. Butler played along with Wall Street’s plans for some months before deciding to publicly blow the whistle in congress. Butler exposed the intension to use him as a “puppet dictator” leading thousands of American legionnaires in a storming of the White House displacing FDR.

    It is often forgotten today, but in the early days of the 1920s-1930s, the Legion was modeled on Mussolini’s fascist squadristi and even its leader Alvin Owsley made explicit in 1921 saying:

    “If need be the American Legion is ready to protect the institutions of this country and its ideals, in the same way as the Fascists have treated the destructive forces threatening Italy. Don’t forget that the Fascists are for today’s Italy what the American Legion is for the United States.”

    Butler’s startling revelations amplified FDR’s popular support and inoculated much of the population from the fake news pouring out of Wall Street propaganda agencies spread across the media.

    In 1939, Pecora wrote a book called ‘Wall Street Under Oath: The Story of our Modern Money Changers’ where the attorney prophetically said:

     “Under the surface of the governmental regulation of the securities market, the same forces that produced the riotous speculative excesses of the ‘wild bull market’ of 1929 still give evidence of their existence and influence. Though repressed for the present, it cannot be doubted that, given a suitable opportunity, they would spring back to their pernicious activity.”

    Pecora went onto deliver one more warning which current generations should take seriously “Had there been full disclosure of what has been done in furtherance of these schemes, they could not long have survived the fierce light of publicity and criticism. Legal chicanery and pitch darkness were the bankers’ stoutest allies.”

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    Today’s oncoming economic meltdown can only be prevented if the lessons of 1933 are taken seriously and patriots who actually care about their nations and people stop legitimizing the casino economy of fictitious capital, derivatives, debt slavery and anti-humanism that has become so commonplace across the governing strata of the technocratic and banking elite today trying to control the world. This elite, just like the financiers of the 1920s, doesn’t care ultimately for money as an end but sees it merely as a means for imposing fascist forms of governance onto the world population. In the same way that FDR’s Wall Street/London enemies sought a world government under Nazi enforcers then, today’s heirs to that anti-human legacy are driven by a religious-like commitment to “manage” a new collapse of world civilization under a Green New Deal and World Government.

    So why accept that dystopic future when a brighter one is offered us by the Multipolar alliance today led by Russia and China?


    Tyler Durden

    Wed, 03/18/2020 – 23:40

  • 100 Iranians Die By Alcohol Poisoning After Ethanol Consumption For Virus "Cure"
    100 Iranians Die By Alcohol Poisoning After Ethanol Consumption For Virus “Cure”

    As the world grapples with this once in a century pandemic, bizarre stories and sometimes extremely dangerous examples of people’s ‘home remedy’ attempts at combating the virus are popping up more and more. 

    Yesterday we detailed the story of the South Korean church which infected 46 people by the strange “remedy” of spraying salt water into their mouths thinking it would “kill” the virus; however, they used the same spray bottle, not bothering to disinfect it.

    And now a new one from hard-hit Iran, which Tuesday saw state TV issue an alarming prediction that “millions” of its citizens could die: some Iranians are turning to ingesting industrial-grade ethanol and methanol thinking this can disinfect them and mitigate exposure. This has led to mass alcohol poisoning, state media has reported.

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    Methyl Alcohol file image

    “More than a hundred Iranians have died from alcohol poisoning in recent weeks in the mistaken belief that industrial-grade ethanol and methanol will help ward off the coronavirus ravaging the country, according to local media reports,” writes Bloomberg.

    The reports note that nationwide over 1,000 have been treated for alcohol poisoning related to ‘home remedy’ attempts to disinfect themselves. The ‘treatment’ reportedly began as a rumor, which authorities have lately sought to combat. 

    And the semi-official Iranian Students News Agency has reported 61 deaths in Fars province alone by this method, which adds up to five times more fatalities than official confirmed coronavirus deaths in that area.

    Other deaths from consumption of the potentially fatal substances were also reported throughout the country. Bloomberg tallies it at 100 or more, citing state sources. 

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    Iran on Wednesday reported a huge single-day jump in fatalities, reportedly the biggest within a single 24-hour period thus far in the country as another 147 people died. 

    This brings the official death toll in Iran to 1,135 and a total of 17,361 confirmed cases, amid dire reports that “millions” are expected to be infected before the pandemic dissipates. 


    Tyler Durden

    Wed, 03/18/2020 – 23:20

  • Dow Futures Crash Near Limit-Down As Global Dollar Buying Panic Sparks AsiaPac FX Collapse
    Dow Futures Crash Near Limit-Down As Global Dollar Buying Panic Sparks AsiaPac FX Collapse

    Update (2305ET): Dow futures losses have accelerated, plunging over 1000 points limit-down…

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    S&P and Nasdaq futures are also crashing…

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    Additionally, South Korea’s KOSPI is halted after triggered circuit-breakers down 8% on the day.

    And Copper has succumbed to the liquidation…

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    *  *  *

    The global scramble for dollars amid a massive shortage has rolled around the AsiaPac time-zone and is leaving a bloody trail across every asset-class.

    FX is in freefall with Aussie collapsing at the fastest rate since Lehman…

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    Source: Bloomberg

    Kiwi is back to its weakest since 2009…

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    Source: Bloomberg

    Yen is tumbling once again…

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    Source: Bloomberg

    Won is getting whacked…

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    Source: Bloomberg

    And Aussie has crashed to its weakest against the offshore yuan ever and weakest against onshore yuan since Dec 1993…

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    Source: Bloomberg

    And overall, AsiaPac FX is crashing to its weakest against the USDollar since 2004…

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    Source: Bloomberg

    And the liquidation continues in US equity markets with Dow futures down over 800 points, erasing the after ramp in stocks…

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    And losses in AsiaPac stocks are accelerating…down 27% from January highs

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    Source: Bloomberg

    And JPY Basis-Swaps are signaling extreme dollar shortage continues…

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    Source: Bloomberg

    This all has the smell of a massive global macro fund liquidation and the contagious impact of that leveraged unwind across the global risk markets.

    As Bloomberg’s Stephen Spratt details, desks continue to speak of the “sell everything” mentality in markets with huge liquidations and de-leveraging taking place everywhere.

    The data stacks up. Looking at the three-day change in open interest across major June bond futures as of close of play Tuesday, the reduction in positions is the equivalent to $150 billion in 10-year cash Treasury bonds ($140m/dv01*). Here’s 3-day open interest change:

    • Schatz: -135,295

    • Bobl: -45,931

    • Bund: -178,221

    • Buxl: -17,566

    • OATs: -41,475

    • BTPs: -41,176

    • Gilts: -28,055

    • US 2y: -158,991

    • US 5y: -44,059

    • US 10y: -129,381

    • US 20y: -60,865

    • US 30y: -26,798

    • JGBs: -36,534

    As one veteran Aussie trader exclaimed (who happened to be on the right side of the collapse in the currency):

    “I love the smell of global macro fund liquidations in the morning…”

    With currencies flash crashing across Asia on Thursday, central bankers may be looking back at the remedies used then.

    As Bloomberg’s Mike Wilson suggests, the tear the U.S. dollar was on back in 1985 was brought to an end when five central banks gathered in New York’s Plaza Hotel and came up with what became known as The Plaza Accord.

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    Source: Bloomberg

    That sent the dollar into a steep slide that lasted until about the end of 1987.

    With the Aussie, kiwi and won just free-falling, it looks like a similar sort of coordinated intervention may be needed to stop the dollar now, especially until the world is deemed free of coronavirus impacts.


    Tyler Durden

    Wed, 03/18/2020 – 23:14

  • The Journey To Monetary Gold And Silver
    The Journey To Monetary Gold And Silver

    Authored by Alasdair Macleod via GoldMoney.com,

    Markets are just beginning to latch on to the economic consequences of the coronavirus. Central banks are slashing interest rates and beginning to throw new money into the mix and governments are increasing deficit spending.

    Few analysts have yet to understand the enormous consequences of the coronavirus for missed payments and accumulating current debt, which is and will rapidly drain liquidity from wholesale money markets. It is increasingly certain that the eurozone’s banking system will require rescuing from insolvency with knock-on consequences for the global monetary system. Concern over the consequences for the $640 trillion OTC notional derivative market, particularly for $26 trillion of fx swaps, is so far absent.

    Continuing on our theme that the fates of the dollar and US Treasury values are closely bound, the extraordinary overvaluation of the bond market will translate into a collapse for both. This article charts how the collapse of the dollar and financial asset values is likely to progress and concludes that we are witnessing the end of the neo-Keynesian fiat currency fantasy, which will be done and dusted with surprising rapidity.

    Only then will sound money, after varying time periods for different nations, return.

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    Setting the scene…

    This week we got into the red meat of Scene One of the final Act of the financial tragedy currently staged in global markets. It is a drama that has run on the air of hope for a hundred years, with an ending that now appears to be unexpectedly sudden. We face no less than the destruction of a financial system whose twin pillars are fiat currencies and financial assets, built on the sands of monetary expansion and debt financing. The evidence of its commencement is best encapsulated in Figure 1, of the world’s reserve currency. This is where everyone was meant to seek sanctuary from lesser currencies, in order to have the liquidity to pay the coupons on their dollar debts.

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    It is turning out not to be so, with the dollar suddenly appearing to enter a new bear market. Meanwhile, this week saw the entire US Treasury yield curve briefly submerged under 1%, an event bifurcated from the collapsing dollar.

    There is no doubt that the coronavirus is having a serious economic impact. Much has been written about the disruption of supply chains, and clearly people are staying at home and stockpiling necessities. Sales of automobiles and other durable goods have crashed. Now the politicians are falling ill. Investors have reacted by dumping equities and buying government bonds, a flight to safety by Keynesian investment managers seeking the comfort of Nurse for fear of something worse. Consequently, government bond prices have become even more detached from the true reality of where financial risk resides.

    Amazingly, almost no investment manager has bought physical gold for his or her clients: gold-backed ETFs and derivatives are only paper claims on gold, so by having counterparty risk and the lack of true possession don’t count as true safety. Physical gold has been effectively banned from managed portfolios, being classified as unregulated, deterring investment managers from having to justify buying gold to their compliance officers. The related asset class is so downgraded that gold and silver mining shares remain unfashionable, with the Amex gold bugs index (HUI) standing at about one third of its 2011 peak while the gold price is in new high ground against nearly all fiat currencies.

    Monetary debasement will really accelerate from here…

    Monetary and market distortions could have persisted for longer if it were not for the fact that the coronavirus disruption is accompanied by considerable payment dislocation. Companies still have fixed costs when they have no sales, either because customers are not turning up or their supply chains have stopped delivering products. Where companies have cash at their banks, they will draw it down, forcing their banks to go into the money markets, either through LIBOR or repos to make up the balance, sell government bonds, or foreclose on borrowers. Where companies do not have cash, they will test their working capital facilities, likely to force their banks to cover increased lending in wholesale money markets. Where banks experience drawdowns on both sides of their balance sheets, outstanding bank credit contracts, sending the sort of signal that terrifies central bankers.

    The situation will be increasingly reflected by central banks having to back-stop both liquidity and bank reserves through repos and new rounds of quantitative easing. In an interesting paper, Zoltan Pozsar of Credit Suisse describes the process that leads to what he terms deficit agents in supply chains (businesses experiencing payment failures) turning their banks into deficit agents as well.

    Pozsar demonstrates that a reluctant Fed will have to backstop not just escalating domestic dollar deficits but global ones as well, and he assumes for the purpose of clarity that foreign central banks will manage the payment crises in their own currencies. Being a money market technician, he does not address the debasement issue because that is not his brief. But clearly, he describes a process where the dollar will have to be debased if financial asset values, particularly of government bonds, are to be maintained.

    We see unfolding the process whereby both the dollar and financial assets are losing value, with the dollar losing it first. And while a weakening dollar may from time to time lend support to financial asset prices, measured in sound money their combined values will decline.

    The second scene in the final act of our financial tragedy will be wholesale liquidation of US Treasury holdings by banks in New York and also by foreign governments to obtain dollars to satisfy their liquidity demands. The Fed will have to supply as much liquidity as it takes to accommodate the American banks and will reduce the Fed funds rate to discourage them from selling Treasury bills and bonds. As for foreigners, they are not the Fed’s first priority.

    Let us assume liquidity problems should not become acute for the few foreign central banks with existing USD liquidity swap lines with the Fed. Under the existing 2013 agreement, these are only the ECB, Bank of England, Swiss National Bank, Bank of Canada and Bank of Japan. While additional temporary swap agreements might be arranged with others, it is only likely to happen in a response to liquidity stresses rather than in anticipation.

    China, Korea and Taiwan as well as other nations with dollar-centric supply chains in their domains will probably have to unwind their long-dollar fx swap positions and sell T-bills and Treasuries in order to release the necessary liquidity. The end result is that in funding the US deficit, the Fed will have to not only absorb significant new debt through quantitative easing, but it will have to buy up existing debt sold by foreign holders if it is to maintain US Treasury yields at anything like current levels.

    In this, mainstream opinion has been wrongfooted: foreigners certainly have dollar obligations to satisfy in an economic slump, but they already own the dollars. The thirst of foreigners for dollar liquidity will not be satisfied by the purchase of more dollars, but by the liquidation of their existing dollar assets. And to the extent that this leads to a contraction in bank credit the Fed will have no alternative but to sacrifice the dollar by increasing the base money quantity in order to absorb it all.

    Furthermore, there is an unknown quantity of fx swaps taken out by US hedge funds to strip out interest rate differentials between euros and yen on one side, and the dollar on the other. It is a trade that will have built in quantity but deteriorating in quality since April 2018, when it first became clear to American based investors and speculators that the euro and yen were seemingly stuck with negative interest rates in perpetuity, while the Trump stimulus would likely lead to higher dollar rates. Now that the Fed is closing down the rate differential by cutting its funds rate these arbitrages need to be unwound, leading to substantial liquidation of T-bills, USTs and dollars to repay obligations in euros and yen. No wonder the chart of the dollar’s trade weighted index is so bearish.

    Hopefully, the hedge fund problem will not replicate the crisis in September 1998, when the Long-Term Capital Management hedge fund failed. But even if that risk is contained, there will be a significant contraction of outstanding bank credit in dollar markets. Being sold on Irving Fisher’s description of how contracting bank credit led to the 1930s depression, the Fed is likely to respond by turning its liquidity taps full on.

    The fiscal position is not good either. The current year US budget deficit, estimated by the CBO to be over a trillion dollars, will begin to look like running at an annualised rate of nearly twice that. The Fed could also find itself monetising not only the bulk of new Treasury flows but absorbing sales by foreigners of UST bonds, T-bills and agency debt as well. If so, it will end up increasing its balance sheet by many trillions, unless, that is, the Fed adjusts its priorities to protect the dollar. But the cost of doing so would be the inevitable destruction of US Government finances when the Fed refuses to monetise its debt. That simply won’t happen.

    The sacrifice of the dollar as the Fed inevitably fails to maintain financial asset values will truly mark the end of the fiat currency era, since no other fiat currency can exist with the world’s reserve currency thoroughly debased and its financial assets in a state of collapse. This is a simple statement with complex issues behind it, including but not limited to the following:

    • The valuations placed on government bonds are so divorced from economic reality that after the initial shock in equity markets has passed, they will be exposed to a seismic downwards adjustment in prices.

    • Corporate bond markets will face an even greater collapse as risk premiums widen, leading to a spate of bankruptcies in the private sector and losses on collateralised loan obligations held by the banks on a systemically threatening scale.

    • Hedge funds which have taken out fx swaps have already lost the interest rate arbitrage opportunity following the Fed’s recent cut in the funds rate. Furthermore, with T-bills yielding only 0.37%, further cuts in the funds rate are a racing certainty. Unwinding these fx swaps is one factor that will put significant downward pressure on the dollar.

    • A reduction in outstanding derivatives will be the consequence of banks desperate to free up liquidity for their own balance sheets. The cost of hedging risk will increase significantly and in many instances become unavailable. Hedge funds and the like will be forced to restrict their activities, raising the possibility of widespread losses and potential failures in financial asset markets.

    • A glance at their share prices confirms that major European banks are already in trouble and they have long been at severe risk of failure, a fact which has been concealed by the ECB’s provision of liquidity. If nothing else, a new escalation of non-performing loans brought about by the coronavirus now threatens to collapse Italian, French, German, Spanish and other eurozone nations’ commercial banks despite the ECB’s efforts. A coordinated G-20 global bank rescue scheme involving open-ended monetary expansion by central banks is likely to be instigated in a widespread act of currency inflation.

    • A general liquidation of foreign-owned dollar assets and selling of dollars is likely to follow.

    • Only then will the wider public begin to realise the full faith and credit in their governments and currencies which they take for granted are worthless.

    The confluence of these threats to financial assets and the world’s reserve currency makes it almost certain that this time attempts to rescue the world from another financial crisis will fail. The twin pillars in the Keynesian endgame, whereby the future of financial assets has become tightly bound to the purchasing power of currencies, will both be destroyed by market forces acting like Sampson pushing the pillars apart until the temple’s collapse killed all the Philistines.

    Comparing fiat to sound money

    Figure 2 shows that since the gold pool failed in the late 1960s the four major currencies (including the euro’s components prior to 1999) have lost substantially all of their purchasing power, compared with that of gold. The most debased is sterling, which retains only 1.19% of its 1969 purchasing power, followed by the euro at 1.56%, the dollar at 2.22% and the yen at 7.4%.

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    The failure of the gold pool and the subsequent abandonment of the post-war Bretton Woods agreement was the last significant monetary failure. The first in modern times was the 1934 devaluation of the dollar from $20.67 to $35 per ounce of gold, thirty-five years before. On this timeline the next failure appears to be overdue.

    The current situation has the makings of leading into an even greater monetary event, as government spending spirals beyond control without the means to fund it, except by monetary inflation. It has already been anticipated by a renewal in the bear market in the major currencies measured in gold terms, dating from late-2015 and is illustrated in Figure 3.

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    These represent significant losses ahead of the currency debasement which is now becoming increasingly certain in the coming months. It is extraordinary that this marked devaluation of currencies has occurred with very few commentators noticing.

    If we refer back to John Law’s Mississippi bubble, which is the best model for what is now unfolding, the loss of all purchasing power for his fiat currency happened in less than a year. Law’s livre began the final phase of its decline in November or December 1719 and by the following September there was no exchange rate against sterling, indicating it was worthless. From November 1719 Law accelerated his purchases of shares in his Mississippi venture ahead of its merger with his bank, the Banque Royale, paid for by issuing unbacked paper livres which began to noticeably undermine its purchasing power.

    Sticking with Law’s failure as a template for ours today, we can similarly expect the Fed on behalf of the US Government to issue new money for the purpose of maintaining financial asset values, mainly of US Treasury bonds, but by extension of equity prices as well.

    Following the current panic into perceived safety, a second phase will likely evolve, being driven by the collapse of government bond prices. Currently, they are over-valued on a combination of unrecognised price inflation, which based on independent estimates is probably closer to ten per cent than two, and a flight to perceived safety from other financial assets. That process will come to an end, and the condition of government finances, which ultimately depend upon the wealth and health of the productive economy, are bound to be reassessed in the light of the slump in business activity and a more realistic assessment of price inflation.

    To sum up, the following developments are likely in the coming months in approximate order, with some running concurrently:

    • Base money will be increased substantially to offset a contraction in bank credit and to give banks extra liquidity to compensate for becoming deficit agents as supply chains dislocate and retail sales of non-essentials goods and services collapse. We have already seen daily repos by the Fed increasing from about $40bn in recent weeks to between $130bn to $200bn currently.

    • “Helicopter money” in various guises, such as deferral of tax payments and business rates to help provide liquidity, will shift to governments some of the deficits building up in businesses. Mortgage payment holidays are offered in some countries. Helicopter money is already being provided to investors through share support operations, such as the Bank of Japan’s purchases of ETFs, which is likely to be expanded. In Hong Kong, each citizen is being given HK$10,000.

    • Within a month or two there will almost certainly have to be bank bailouts in Europe, which will require additional monetary commitments by the ECB and the national central banks. This will likely lead in turn to widespread liquidation of euro commitments for speculation and arbitrage. Loans in the trillions have been taken out in euros as the counterpart in fx swaps to the dollar. As these positions are squared the euro will rise and the dollar will fall, transmitting a eurozone banking crisis into liquidation of UST-bills and short-term US Government coupon debt by US hedge funds. A heightened risk of counterparty failure in fx swaps could spread to other derivative markets, requiring bailouts of non-banks, including major hedge funds. Failure to do so or a bungled operation such as tinkering with mandated bail-ins could hasten the collapse of stocks and other financial assets.

    • A declining dollar will increase portfolio liquidation pressures on foreigners, leading to indiscriminate offerings of US Treasuries, agency debt and equities. The Fed will have to take on not only the financing of an increasing budget deficit, but also absorb foreign sales of dollar-denominated securities if it is to retain control of prices.

    • At this stage it will become increasingly obvious to domestic bank deposit holders that the dollar’s purchasing power is being destroyed by the Fed’s escalating asset support commitments. In effect, the Fed will be the only significant buyer of financial assets, paid for through quantitative easing on a far greater scale than that which followed the Lehman crisis.

    • In the absence of other buyers of US Treasuries and the loss of purchasing power for the dollar, bond prices will sink, which will make it virtually impossible for the US Treasury to fund a ballooning deficit. An election year creates extra difficulties leading to uncertain political outcomes. But by the time President Trump is due to stand for re-election, over a million elderly and poor Americans might have died from the coronavirus, socialist Democrats might be in the ascendant and the dollar could become worthless.

    • With the dollar as the world’s reserve currency and nearly all other fiat currencies having taken their cue from it since the Nixon shock in 1971, they also seem doomed to failure with the dollar.

    Where will the money go?

    In the three months before the collapse of his scheme, sellers of shares in his Mississippi venture required John Law to replace them with new buyers, and when they could not be found he substituted them by buying shares with new livres issued for the purpose. Today’s price support system which rigs government bond prices is exactly the same concept as that deployed by John Law, except it is on a global scale.

    Law’s experience showed that in an asset and monetary collapse, apparent wealth simply vanishes, destroyed along with the medium of exchange. Theoretically, if there are no buyers at any price the collapse to zero is immediate and no one extracts any value to be redeployed elsewhere. The Mississippi bubble also showed that the purchasing power of sound money, always gold or silver, is at least retained. For this reason, it is more than likely a rising price for monetary gold will happen without very much gold needing to be purchased.

    Being dominated by mathematical economists, current thinking in financial asset markets does not often admit to this. But as the central banks show increasing difficulty in maintaining the combined values of currency and bonds, the price of gold and silver in fiat currency terms will rise significantly. More correctly described, the ratios of fiat currencies to gold will fall, as illustrated in Figures 2 and 3 above.

    Gold and silver are reliable money, chosen by the people as economic actors. The journey to their reinstatement will require the destruction of the unsound currency issued by the state, which is simply a distorting monopolist and therefore a distorter and destroyer of economic values. Only then can gold and silver re-emerge as circulating money, or more practically, reliable and trusted paper and electronic substitutes for them. Gold and silver are emblems of economic freedom, and while the transition will only be very reluctantly accepted by the state, a better monetary future will beckon.

    It is in this light we should anticipate the money to replace dollars, euros, yen and pounds. In Asia they will be better placed than western nations to return to sound money, with Russia having substantially replaced its reserve dollars with gold, which could easily be legislated into a gold exchange standard for the rouble. China will be in a position to do the same for the yuan. In theory, getting to the point where monetary stability returns will be easier for some governments than for others. The capitalist nations, and China perhaps to a lesser extent, have subsumed Keynesian economics deep into their collective psyche, so deep that it has replaced entirely an understanding of free market economics.

    Governments with extensive welfare obligations will find it an enormous challenge to maintain the balanced budgets required to ensure that a new monetary system will endure. They have been socialising wealth for too long to understand the simple fact that if you wish your nation to be prosperous you must allow the people to create and retain it. You must also make them responsible for their own affairs and make it clear to them that no one individual, lobbyist or interest has a right to government intervention. The function of government must be limited to making and administering criminal and contract law and protecting the realm, with strictly limited welfare provision.

    A government that works in a sound money environment absorbs and administers only a minor part of its national economy. The loss of political power is always widely resisted, but the redeployment of national resources from a wealth-destroying state to free-market production has been shown to produce remarkable benefits in surprisingly little time. If, that is, the political class is wisely led by statesmen not in thrall to the common economic fallacies of John Maynard Keynes and John Law.


    Tyler Durden

    Wed, 03/18/2020 – 23:00

  • Nearly 20% Of Households Have Already Lost Work Due To Pandemic-Shutdowns
    Nearly 20% Of Households Have Already Lost Work Due To Pandemic-Shutdowns

    The arrival of helicopter money in the form of two $1,000 checks to most Americans is the government’s acknowledgment that the economy crashed, and upwards of 30 million people could be unemployed due to the Covid-19 outbreak shutting down cities and towns across America.

    A new NPR/PBS NewsHour/Marist poll has shown that 1 in 5 households have already experienced a layoff or reduction in work hours thanks to social distancing measures enforced by the government that is grinding local economies to a halt.

    People across the country are staying home, avoiding large crowds, and ordering food on Amazon, as the fast-spreading virus is rapidly infecting people in New York, Washington state, and California. Confirmed cases have now been recorded in all 50 states. 

    The federal government missed containment windows to implement social distancing policies by nearly a month, and this means cases are likely to be exponential in the days or weeks ahead. Deaths have stayed low at this point because ICU treatment capacity at major hospitals has yet to be overwhelmed, but when they do, America could be the next Italy.

    Bill Gates said on Wednesday that virus shutdowns could last upwards of ten weeks. The most affected industries have so far been restaurants, bars, hotels, casinos, cruise ships, and airlines, but as we noted last week, the ripple effect has collapsed the entire gig and service economy. 

    The poll was conducted on March 13-14, shows layoffs and reduced hours had already hit 18% of households. Lower-income households were hit the hardest, at least a quarter of them were making $50,000 per year had the most hours cut or experienced the most significant amount of job losses. It also showed a third of households had at least one person who had a significant change in work routine associated with the virus impact. College students were the most susceptible to job disruption.

    Most of the jobs that experienced reduced hours or have been entirely cut have been blue-collar and service or retail jobs, which cannot be conducted remotely. 

    We noted last week that the virus crisis was expected to crash the gig and service economy. With more than 50 million Americans, or about 44% of all US workers, aged 18-64, are considered low-wage and low-skilled, have insurmountable debts (with limited savings), including auto, student, and credit card debts, are working in the gig-economy via side hustles and are most vulnerable to job losses as Covid-19 has likely triggered the next recession.

    What’s about to happen next could be absolutely terrifying, as Treasury Secretary Steve Mnuchin warned the US unemployment rate could spike to a stunning 20% without stimulus directed at businesses and households. 

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    With a total labor force of around 160 million, this would mean virus-related impacts on the gig and service economy could lead to a sudden spike to over 30 million unemployed without policy action. 

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    Those are depression-era levels of job losses… which is prompting the Trump administration to resort to helicopter money. 

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    New York’s unemployment claims website crashed earlier this week, search trends for “unemployment benefits” surged across the country as well, as chief economist of a multi-billion macro hedge fund said that they are now modeling approximately 10 million job losses over the next two to three months.

    Maybe the real reason why the National Guard is being deployed across the country is the possibility that a Covid-19 pandemic could lead to social destabilization as millions lose their jobs and supermarkets run out of food. Who would’ve thought America is transforming into the next Venezuela?


    Tyler Durden

    Wed, 03/18/2020 – 22:40

  • Bailout Nation: US Movie Theaters Join Airlines, Hotels And Restaurants In Demanding A Taxpayer Bailout
    Bailout Nation: US Movie Theaters Join Airlines, Hotels And Restaurants In Demanding A Taxpayer Bailout

    Back in 2008, when the US government bailed out the US banking sector, it became clear that virtually any industry in America’s $18 trillion economy could pass off for “too big to fail.” So fast forward to today when the longest expansion in history has mutated in under a month into the biggest market crash since the Great Depression, and sure enough, virtually any industry is trying to get bailed out.

    Consider this – until today, the US government and by implication US taxpayers, had received bailout requests both direct or indirect from:

    • The Airline Industry
    • The Public transportation industry
    • The Hotel and lodging industry
    • The Restaurant Industry
    • And, of course, Boeing.

    And now, demonstrating just how fucked up everything has become once the government has opened the Pandora’s Box of government bailouts, US movie theaters are also demanding a bailout.

    That’s right: movie theaters are now somehow a systemically important industry, one which deserves billions in taxpayer funds. And even if it doesn’t, well everyone else is getting bailed out so why not them too.

    According to AP, the National Association of Theater Owners (also known as NATO, but definitely not to be confused with that other NATO), the trade group that represents most of the industry’s cinemas, said Wednesday that it’s asking for immediate federal help for its chains and its 150,000 employees. The theaters are requesting loan guarantees for exhibitors, tax benefits for employees and funds to compensate for lost ticket sales and concessions.

    Just because that’s how things are done in the US where moral hazard is the name of the game. Every game.

    The organization said the movie theater industry is “uniquely vulnerable” to the crisis, and needs assistance to weather a near total shutdown of two to three months. It wasn’t clear how society would collapse if there were no movie theaters after three months, especially with most Americans now having a streaming service pumping non-stop crap into their TV 24/7, but we are confident McKinsey will be hired soon to come up with a pretty slideshow explaining it all.

    “This is an unprecedented challenge to the business,” said John Fithian, president and chief executive of NATO. “We’re looking to Congress and White House to understand this is a cultural institution where people gather.”

    Ah… so any “cultural institution where people gather” is now eligible for a bailout. At least back in 2008 one could make a case that banks actually are important. After all they hold your money. But now, well, the collapse of theaters threatens to tear society apart.

    Fithian didn’t give a specific dollar amount for what the industry is seeking but said theaters could be saved for a fraction of what the airline industry is requesting, because if airlines deserve a bailout, theaters certainly do too. For less than the cost of one airline company, Fithian said, movie theaters could be kept afloat.

    In short: just show me the damn money.

    “We want our policy makers to know that at the end of this thing, when people have been cooped up in their house for several months, they’ll need a break to go out and do something collectively that’s affordable and fun and away from what they’ve just been through,” he said. “But we still need to be viable.”

    In other words, when this is all over, we want to be sitting on a beach, earning 20%, or rather -20% in this day and age, on the money the idiot taxpayers threw at us.

    NATO also said it will supply $1 million in aid for out-of-work movie theater employees, the majority of whom are paid hourly. It wasn’t clear if he demanded $1 billion for the privilege of passing on 0.1% to his customers. “Starting tomorrow, most of them won’t be paid anything,” said Fithian, which ironically describes something once upon a time known as capitalism.

    Earlier this week, US movie theaters closed nationwide, shuttering nearly all of the country’s cinemas including its largest chains, AMC Theaters and Regal Cinemas. The closures followed federal guidelines against gatherings of more than 10 people. Hollywood has postponed nearly all March and April releases, and many May ones, too.

    In the meantime, some studios have moved their new releases to on-demand platforms, a rare breaking of the traditional 90-day theatrical window. Universal earlier announced that “The Hunt,” “Invisible Man” and “Emma” will be released for home viewing on Friday. On Wednesday, Sony Pictures said the Vin Diesel sci-fi thriller “Bloodshot,” which opened in theaters last Friday, will be available for digital purchase Tuesday.

    “Sony Pictures is firmly committed to theatrical exhibition and we support windowing,” Sony Pictures chairman Tom Rothman said in a statement. “This is a unique and exceedingly rare circumstance where theaters have been required to close nationwide for the greater good.”

    This means that a far bigger risk for theaters – which no taxpayer in their right mind will ever agree to subsidize, let alone bailout – is not that Americans don’t frequent them for the next 2-3 months due to the pandemic, but that studios realize that they stand to make far more money by “collapsing the window” entirely and transitioning to a “Straight to streaming” service across the industry. Because in case NATO (the other NATO) failed to notice, “cultural institutions where people gather” died years ago courtesy of Mark Zuckerberg and other Silicon Valley oligarchs who have made society optional.


    Tyler Durden

    Wed, 03/18/2020 – 22:20

  • Is This The Next Big Headache For Global Economy?
    Is This The Next Big Headache For Global Economy?

    The events of the last several weeks have ominously demonstrated that dollar shortage has returned with a vengeance, as new headaches for virus-battered emerging markets will find it hard to cope with falling local currencies and demand. 

    The dollar shortage was confirmed last week in both the Bloomberg Dollar index and the FRA/OIS spread, a closely followed indicator of interbank dollar funding availability that has spiked higher, indicating rising stress. 

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    The Federal Reserve’s massive monetary “bazooka” including trillions of dollars for repo markets and the launch of $700 billion QE5 and return to ZIRP, as well as an emergency six POMO operations last week has failed to boost risk sentiment, and the FRA/OIS has yet to show any signs of relief, as it has surged to the highest level since the financial crisis. 

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    The Fed’s monetary cannon may have solved the corporate liquidity crisis for the time being. Still, the dollar/liquidity shortage in the global financial system continues to worsen as investors are dumping emerging markets in record numbers and scrambling for dollars. 

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    Marrying the supply chain disruption triggered by the Covid-19 crisis in China with the oil price war, this has crippled the petrodollar exchange system by sending the price of oil sharply lower and exacerbating the global dollar funding shock.

    We’ve pointed out, the world is facing an unprecedented dollar margin call, as a result of the $12 trillion synthetic dollar short, some 60% of US GDP. With the dollar rising, the cost of servicing dollar debt for businesses and governments becomes more expensive as their local currencies plunge amid the barrage of rate cuts by global central banks. 

    “The surge in the dollar is another blow to emerging markets,” said Mitul Kotecha, senior emerging markets strategist at TD Securities in Singapore.

    “The demand for the dollar has outweighed any hit to the US currency from sharply lower Fed rates. EM assets will continue to struggle as investors steer clear of relatively risky assets and maintain a bias for safe havens.”

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    The Fed’s panic rate cuts on Sunday, welcoming the US back to ZIRP, has led to South Korea, Chile, Vietnam, Sri Lanka, Turkey, and Pakistan to cut rates as well. South Africa, Brazil, and Indonesia are expected to slash short-term interest rates later this week. 

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    On top of dollar funding pressures, world trade growth is collapsing, and the tighter financial conditions on emerging markets have triggered a $30 billion outflow in 45 days since the virus crisis started, Bloomberg notes. The dollar reigns supreme in a crashing global economy and pandemic. For instance, the Mexican peso and Russian ruble have dropped by 20%. 

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    Khoon Goh, the Singapore-based head of Asia research at Australia & New Zealand Banking Group Ltd., says emerging market economies are deploying rate cuts to cushion a hard landing but are using FX reserves for currency stabilization.

    “They will continue to utilize their FX reserves to smooth currency volatility but will not seek to stem the trend or defend any particular levels,” said Goh.

    “In the current environment, when external demand is very weak, allowing some currency weakness alongside lowering interest rates is the best way to try and ease overall financial conditions.”

    The Australian dollar has tumbled to its weakest levels since 2003, a move that will increase import costs. Norway’s krone has fallen 15% this year, plunging to an all-time low as Brent tags the 27-handle this week. 

    Central bankers are making sure dollars continue to flow around the world. The Fed’s Sunday announcement called for reduced rates on its dollar-swap lines with five other central banks, a similar policy seen during the 2008 financial crisis. 

    “A strong dollar is typically a headwind for emerging-market currencies and even more so for countries that are reliant on offshore dollar funding and have floating exchange-rate regimes,” said Todd Schubert, head of fixed-income research at Bank of Singapore Ltd.

    As the dollar shortage continues, tightening financial conditions in emerging markets, it’s only a matter of time before something breaks.


    Tyler Durden

    Wed, 03/18/2020 – 22:00

  • BOJ Admits It Has Lost 3 Trillion Yen On Its Equity Purchases Despite Literally Printing Money Out Of Thin Air
    BOJ Admits It Has Lost 3 Trillion Yen On Its Equity Purchases Despite Literally Printing Money Out Of Thin Air

    Long gone are the days when central banks pretended they aren’t in the business of propping up the stock market.

    A week after we reported that the BOJ had bought a record amount of ETFs in a desperate attempt to stabilize its illiquid stock market, where the central bank now owns over 73% of all ETFs, Kuroda bought a whopping 121.6BN yen of ETFs on Tuesday, the most on record, and just one day after the BOJ doubled the upper limit of ETFs it can purchase to 12 trillion yen, without however answering where it will get all those ETFs from.

    The purchases in its core ETF program jumped by 20% to 120.4BN yen from the previous record of 100.2BN yen; while ETFs bought in the BOJ’s “physical and human capital” program – whereby the BOJ directly admits it is rewarding companies for pursuing policies that it finds appealing such as higher jobs – remain at 1.2b yen. Finally, the BOJ’s J-REIT purchases rose to 1.5BN yen from 1.2BN yen.

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    The unprecedented creeping nationalization of Japan’s stock market – which has made even the USSR spin in its grave – can be seen in the chart below:

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    Of course, none of the above is a problem as long as the market keeps levitating higher and higher, however once the crash arrives, people are bound to start asking question.

    And as we noted last week, the crash did arrive…

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    … and the questions emerged. Like for example now that the Nikkei has plunged below the BOJ’s cost basis on its ETF purchases, how big are the losses for all taxpayers.

    Answering just this question on Wednesday, Kuroda said that the amount of losses on exchange-traded funds held by the central bank is estimated at 2 trillion to 3 trillion yen as a result of the current crash.

    The estimate is based on the current levels of Nikkei225, Kuroda said at a meeting of the Financial Affairs Committee of the House of Councillors, the upper chamber of the Diet, the country’s parliament.

    And as noted above, the BOJ decided to double down, literally, on its market propping activities, and earlier this week it announced it would double its annual purchases of ETFs to 12 trillion yen as part of its additional monetary easing measures adopted Monday.

    Kuroda also stressed that stepped-up ETF buying by the central bank has “certain effects as a monetary easing step”, which in addition to more gibberish by the 75-year-old, simply meant that the BOJ is doubling down on its purchases because it is now underwater on all of its purchases to date!

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    It gets better: unwilling to admit the truth until the bitter end of what the BOJ really does , which for the BOJ would mean that moment when its paper losses surpass its capital bases, Kuroda said that ETF purchases aren’t designed to buoy stock prices – something they most clearly are designed to do – but instead to prevent “risk premiums from rising”, whatever that means: perhaps as part of her daily discussions with out daytraders, inbetween discussions of K-Pop, what bread is especially stale today, and whether Fukushima’s gamma radiation will kill off the coronavirus before the coronavirus kills all the participants at the 2020 Olympics, Mrs Watanabe also wants to know the daily risk premium level is.

    Somehow we doubt it, and for a good reason: this is just Kuroda’s typical way evading a question by answering some totally non-sequitur gibberish which nobody dares to question afraid to look dumb, when in fact the dumbest person in the room is that one who now has a 3 trillion yen paper loss despite literally being about to print money out of thin air at a moment’s notice and buying whatever he wants. 


    Tyler Durden

    Wed, 03/18/2020 – 21:40

  • 'Please Stop Shooting Each Other': Baltimore Mayor Begs Residents To Keep Hospital Beds Clear For Coronavirus Patients
    ‘Please Stop Shooting Each Other’: Baltimore Mayor Begs Residents To Keep Hospital Beds Clear For Coronavirus Patients

    The mayor of Baltimore has asked residents to please stop shooting each other so that local hospital beds are free for coronavirus patients, according to WJZ 13 Baltimore.

    “I want to reiterate how completely unacceptable the level of violence is that we have seen recently,” said Mayor Jack Young after seven people were shot Tuesday night in the Madison Park neighborhood. “We will not stand for mass shootings and an increase in crime.”

    “For those of you who want to continue to shoot and kill people of this city, we’re not going to tolerate it, Young added. “We’re going to come after you and we’re going to get you.”

    He urged people to put down their guns because “we cannot clog up our hospitals and their beds with people that are being shot senselessly because we’re going to need those beds for people infected with the coronavirus. And it could be your mother, your grandmother or one of your relatives. So take that into consideration.”

    Commissioner Michael Harrison said the city has seen an uptick in violent crimes since Friday, including a mass shooting Tuesday night — where seven people were shot. Five people were transported to area hospitals via medics and two took private cars to the hospitals for treatment. All seven are in serious but stable condition. –WJZ 13

    A local officer who was on patrol at the time traded fire with one of the shooting suspects as the man was fleeing the scene, but he was not able to match the man’s “deadly firepower” according to the report. The officer sustained minor injuries, and the incident “remains open and under investigation,” according to Commissioner Harrison.


    Tyler Durden

    Wed, 03/18/2020 – 21:20

  • JPMorgan Now Expects A Global Depression In The Second Quarter
    JPMorgan Now Expects A Global Depression In The Second Quarter

    Earlier we reported that in a report titled “the lamps are going out all across the economy”, JPMorgan’s chief US economist, Michael Feroli slashed his Q2 US GDP forecast to a staggering -14%, which he optimistically expects to form the bottom of a V-shaped recovery that then lifts the US economy by +8% and +4% in Q3 and Q4, respectively (at least until the next downward revision in his forecast).

    We doubt the V-shaped recovery will take place, in fact if there is any “recovery” it will be L-shaped especially if medical experts are correct that the pandemic will take 12-18 months to full clear out. That said, the Q2 prediction alone is catastrophic, and if that slowdown persists the US is facing not only a recession, but probably a second Great Depression.

    However, if JPM’s forecast revision for the US was catastrophic, than its latest global outlook is downright apocalyptic.

    In a separate note by JPM’s Bruce Kasman, has also taken a flamethrower to his global economic forecasts, and the bank’s head of economic policy now anticipates Europe to implode an unprecedented 22%, the UK to crater by a depressionary and with the US plunging 14%, he sees the global economy ex China contracting by a whopping -13.7%. In short, JPM now expects no less than a global depression in the second quarter. This will follow a Q1 quarter in which China is expected to collapse by -40.8%, which however will somehow surge by 57.4% in the second quarter.

    This is how Kasman lays out his latest forecast:

    Last week we concluded that the COVID-19 shock would produce a global recession as nearly all of the world contracts over the three months between February and April. This week’s reports, which show a collapse in China’s activity in February and in survey readings for March elsewhere in the world, validate this view. There is no longer doubt that the longest global expansion on record will end this quarter. The key outlook issue now is gauging the depth and the duration of the 2020 recession.

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    Here are some more details on the timing of the upcoming depressionary collapse:

    As the virus spreads rapidly across the globe, we have also been rapidly adjusting our estimates of the impact on 1H20 growth. This week we have again lowered forecasts. For China this quarter and the rest of the world next quarter, these GDP declines represent the biggest quarterly contractions recorded over the past 50 years at least. These contractions will be sufficient to tip 2020 global GDP growth down 1.1% on a year average basis (0.5% 4Q/4Q). Of particular note (Table 1):

    • China collapses this quarter. We have reduced 1Q20 China GDP growth to -40%q/q, saar. Economies closely tied to the China supply-chain (such as Korea and Taiwan) will directionally follow China’s growth path. Forecasts there have also been lowered.
    • The US and Europe follows next. For the US and Western Europe, the COVID-19 shock will likely straddle the first two quarters of the year. The stall in activity in March is likely sufficient to tip both economies into contraction this quarter but the shock’s impact is expected to be concentrated next quarter, where both regions are expected to contract at a double-digit annualized pace. These outcomes are worse than were recorded during the global financial crisis or the European sovereign crisis.
    • The EM is not immune. While the COVID-19 shock is moving more slowly through EM countries outside Asia, their vulnerability is increasing along a number of fronts. In addition to their heightened sensitivity to falling DM demand for manufactured goods and commodities, they are experiencing a significant tightening in financial conditions. Oil producers are experiencing concentrated terms-of-trade losses. Finally, their relatively weak public health

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    With these outcomes representing an unprecedented seizing up in activity across a wide range of sectors, JPM warns to brace for a “disturbing” set of economic releases in March and April, arguably as soon as tomorrow’s jobless claims report which according to some, may surge by over a million newly unemployed workers (!). Commensurate with the projected sharp decline in GDP, February-March global industrial production is now expected plunge by more than 10% and US and Euro area PMIs may test their global financial crisis lows.

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    Yet while JPM expects the crash in industrial production to normalize swiftly, it anticipates a much more extended hit to the unemployment rates, as a result of what it now sees as a much deeper downturn: for the DM as a whole the bank now forecasts the unemployment rate to rise 1.6%-pts in the next two quarters. As was the case during 2008-9, this move reflects a much sharper rise in the US than in the Euro area, even if smaller in magnitude (Figure 3). Most immediately, US initial jobless claims should spike above 400,000 in the coming weeks (Figure 4).

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    And so with every Wall Street bank having given up on the first half, and certainly on Q2, the only hope is that the coming massive depression will also be the shortest on record. That may be an overly aggressive assumption.

    For his part, this is how Kasman does his best to put an optimistic twist on depressionary data:

    As this disturbing news rolls in, it will be natural to extrapolate that the global recession will extend well into 2H20. However, our baseline forecast continues to see the dynamics of the March-April dive laying the foundation for a strong rebound in 2H20 global growth. This outcome, which projects 9% ar global GDP growth over the final two quarters of the year, does not ignore the likely lasting damage from the COVID-19 shock.

    And yet, in the very next sentence the JPM economist refutes his own optimistic take: “With the income shock from lost first-half growth revenue unlikely to be reversed and tighter financial conditions expected to linger, our forecasts see the level of global GDP growth ending 2020 2.1%-pts below the baseline path before the outbreak.”

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    More importantly, JPMorgan admits that its V-shaped recovery is contingent on three catalysts all playing out as expected:

    • The relaxation of social distancing policies before mid-year. Implicit in the forecast is the view that the imposition of aggressive containment measures will cause the number of active infections to peak around 10 weeks after the confirmation of cases in individual countries. The fading of the virus threat, alongside a growing recognition that the economic costs of maintaining aggressive containment policies are very large, should then begin a process of selective removal of containment measures.
    • The success of targeted, coordinated policies. One of the consequences of the global financial crisis is that policymakers have experience in dealing with acute financial sector stress. As such, they are moving rapidly to attempt to ameliorate the threat to financial market functioning and are working to cushion the blow to corporates and households most impacted by the shock. Ensuring that credit will be provided by banks, deferring (or cancelling) tax payments, and subsidies for short-time work have been key areas of focus.
    • Fiscal and monetary policy stimulus is building. Usually it is monetary easing that provides the initial line of defense in responding to an economic slowdown. However, the constraints facing central banks and the flexibility provided to fiscal authorities in an extremely low interest rate environment suggest that fiscal easing will be delivered earlier in this episode.

    JPMorgan’s summary:

    “If a normalization in activity from depressed levels takes hold midyear alongside building policy stimulus, the depth of the current downturn can be seen as a springboard for a strong snapback in growth. However, there is a significant risk that the virus outbreak persists and activity remains restricted for a longer time. In this environment, risks rise that the depth of the initial shock unleashes negative forces that magnify the hit to activity into 2H20. Notably, firms that had been hovering on the margins of viability pre-crisis may not have sufficient equity to justify even a subsidized extension of credit and may close. The longer the duration of the interruption to activity, the deeper into the population of firms likely closures will occur, and the greater the feedback into consumer incomes and expectations.”

    In short, the world is facing an assured economic depression in Q2, and the only question is whether this depression persists into the second half and 2021 or reverses in Q3. The answer will depend on a combination of “price to perfection” events all turning out just as hoped for. Which, in a world of record political polarization, ascendant nationalism, and a torn social fabric, is recipe for not only disappointment but also disaster.


    Tyler Durden

    Wed, 03/18/2020 – 21:00

  • Second US Congressman Tests Positive For Covid-19: Live Updates
    Second US Congressman Tests Positive For Covid-19: Live Updates

    Summary:

    • US deaths hit 114
    • Senate to vote on 2nd economic rescue bill
    • Iran reports another 147 deaths
    • Hong Kong reported 14 new confirmed cases
    • Brazil Senate Chief tests postiive
    • France case total nears 2,000, death toll passes 250
    • NYSE to close floor trading
    • McConnell promises vote on 2nd economic bailout package by Friday
    • Two Congresswomen tests positive
    • Conn. reports first fatality
    • Kudlow says US might capitalize troubled companies by buying stock
    • WHO declares virus “enemy of humanity”
    • State Department suspends visa services
    • Germany sees 1k new cases as total nears 10k
    • Kudlow says stimulus package should be $1.3 trillion
    • Merkel warns country facing biggest challenge since WWII
    • European Union seals borders
    • PM Johnson prepares ‘London Lockdown’ plan
    • Trump says China hasn’t asked the US to suspend tariffs
    • UAW succeeds in pushing Detroit automakers to shut down factories
    • UK reportedly about to close schools as Boris scrambles to catch up with policy U-turn
    • ECB holding emergency call over virus response
    • Facebook launches coronavirus website information center
    • France follows Germany by eliminating bank capital buffers
    • HUD suspends evictions
    • Cuomo bars NY companies from having more than 50%
    • Wal-Mart shares hit record high
    • US, Canada agree to close border
    • Cuomo says state “looking into” reports of Covid-19 cluster in Borough Park
    • White House now pushing to send 2 $1,000 checks to every American
    • Spanish Olympic Committee head says Tokyo Games should be postponed

    *  *  *

    Update (2040ET): Utah Congressman Ben McAdams has become the second member of the House of Representatives to test positive.

    “Today I learned that I tested positive,” he said in a statement.

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    Both Congressmen are Republicans.

    *  *  *

    Update (1845ET): In another alarming development, Connecticut Gov. Ned Lamont on Wednesday confirmed the state’s first death linked to Covid-19: An 88 year old man who was recently admitted to a hospital in Danbury.

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    The first fatality “really brings it home”, Lamont said during an interview on MSNBC. “We don’t want Italy to happen in Connecticut,” Lamont said, explaining that this is why he moved early to close schools, restaurants, gyms and other public areas.

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    If the state doesn’t move quickly, it could be faced with its own Kirkland-style crisis, as WTNH reports that a patient in a nursing home in Stafford Springs, the town that hosts Connecticut’s only major airport, Bradley, has also tested positive. The rest of the residents in the facility are in the process of being tested.

    After more than half a dozen lawmakers self-quarantined over the past few weeks,  Florida Rep. Mario Diaz-Balart has become the first member of the US Congress to test positive for the coronavirus. Diaz-Balart announced the diagnosis in a tweeted statement, where he explained that he had decided to self-quarantine in Washington after votes on March 13 because his wife had conditions that made her a high-risk patient. Diaz-Balart presumably met with one of the many Brazilian officials who has now tested positive for the virus (or maybe one of those defiant spring breakers putting the health of the nation at risk to party on the beach, as is their god-given right as Americans). The problem of political officials catching the virus has been a problem from Iran, to Italy to many other countries the virus has traveled.

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    It’s only fitting that he’s from Florida…

    Meanwhile, in Spain, where the prime minister has instituted a ‘shelter in place’ crackdown after his wife also caught the virus, health officials reported 2,943 new cases of the virus, bringing the total to 14,769, along with 105 new deaths, bringing the total to 638.

    *  *  *

    Update (1740ET): NYC Mayor Bill de Blasio insisted that there are nearly 2k case sin NYC alone as of Wednesday afternoon, and that 11 NYC residents had died from the virus. That 1,871 number is up from 1,339 this morning.

    • DE BLASIO: NUMBERS GROWING REALLY RAPIDLY, 1871 CASES IN NYC
    • DE BLASIO: 11 NYC RESIDENTS HAVE DIED FROM VIRUS

    *  *  *

    Update (1715ET): Despite myriad misgivings, the Senate passed the first economy-focused coronavirus relief package on Wednesday. A couple hours later, Senate Majority Leader Mitch McConnell said a second stimulus bill (the third bill dedicated to fighting the virus) could be passed as soon as Friday, even as Mnuchin and Pelosi continue to haggle over the details.

    That bill could include $500 billion in direct payments to Americans, another $100 billion for industries in need of rescue, $300 billion in small and medium business loans, and possibly more. The dollar-amount, which keeps moving higher (Kudlow most recently put it at $1.3 trillion) is intended to shock and awe the public and quiet the panic as millions of Americans file for unemployment.

    Yesterday, Mnuchin told lawmakers that if they didn’t pass the bill, that unemployment in this country could hit 20% – though Trump said that’s an “absolute, worst-case scenario”, and “we’re nowhere near it.”

    We suspect sentiment regarding the bill’s chances is going to start having an impact on equity prices.

    Meanwhile, the total number of global coronavirus cases has climbed to $214,000.

    *  *  *

    Update (1655ET): Trump economic advisor Larry Kudlow made some more bullish comments after his interview with Fox News, telling reporters with the White House pool that the administration could even resort to direct purchases of equities – a de facto nationalization – as part of its bailout package.

    “Whatever it takes,” Kudlow said, at one point.

    Meanwhile, after a handful of futures exchanges closed floor trading, the NYSE has decided to follow suit, closing floor trading (aka the CNBC live set) and move to only electronic trading beginning on Monday, according to NYSE owner IntercontinentalExchange.

    In other news, the president of the Brazilian Senate has tested positive for Covid-19.

    *  *  *

    Update (1540ET): With Larry Kudlow has taken to Fox Business to try and jawbone the market higher as the Senate begins its vote on the ‘Part 2’ economic stimulus package for small businesses, which we suspect will pass following last night’s meeting with Mnuchin.

    During the interview, Kudlow said the total value of the third economic stimulus package should be $1.3 trillion, and if it takes more than $1.3 trillion worth of stimulus for ‘Phase 3’, “we will do more than that”.

    Yesterday, Mnuchin said the stimulus would include $1 trillion in direct aid to Americans (checks in mailboxes), and another $300 billion in tax relief for small businesses. As one twitter wit pointed out…

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    A word of advice, guys: the stimulus conversation is starting to sound a little desperate. The market wanted this done last week. The longer it takes from here on out, the further we will fall.

    *  *  *

    Update (1530ET): A State Department spokeswoman just said that the US is suspending visa services in most countries worldwide as the world turns inward to combat the coronavirus.

    French Finance Minister Bruno Le Maire revealed an aid package on Wednesday, following in the footsteps of Germany by allowing French banks to ignore capital buffers to tap an additional €8 billion in capital. He also called on the ECB to follow up with a “massive” intervention, as the ECB governing council is reportedly holding an “emergency call” on virus response.

    The US Air Force’s National Guard unit has transported 500,000 nasopharyngeal swabs for coronavirus tests from Italy to Memphis, Pentagon officials said.

    In a worrying sign for the banks, JPM just reported that it will be closing 1,000 Chase branches out of the more than 5,100 across the US. This comes just one day after Treasury Secretary Mnuchin insisted that no banks were considering closures.

    Facebook denied a WaPo report claiming the company was working with the government to build an app to help track the spread of coronavirus by exploiting sensitive personal data. Instead, the company announced a new website to help provide coroanvirus information – news, testing info, treatment, prevention – to all of FB’s 2 billion+ users.

    *  *  *

    Update (1420ET): Telegraph editor Steven Swinford reports that Boris Johnson – who was evasive when asked about the possibility earlier – has asked the government to draw up plans for a total London lockdown.

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    In the US, the only areas that have been really locked down are New Rochelle and the area near the nursing home in Kirkland Washington where dozens of patients have died. The lockdown of London would be essentially unprecedented in the West, since it’s larger than any city in Italy, Spain or Paris.

    Johnson has pivoted in his approach to the virus in recent days after experts determined that the UK government’s approach, which left businesses and schools open, while encouraging everybody exhibiting symptoms to quarantine as soon as they emerged, risks killing hundreds of thousands, while some have accused Johnson of embracing a ‘herd immunity’ approach, which the administration has denied.

    Earlier this week, Johnson advised all Britons – especially those working in the capitol – to work from home and avoid going out if possible, yet tube ridership has only declined 19%.

    Additionally, officials said, the Johnson administration isn’t planning on adopting the measures within the next 48 hours. But they’re worried that as more individuals ignore the government’s advice, they might need to take a heavy handed approach.

    Boris Johnson has asked government departments to draw up plans for a lockdown of London to help stop the spread of coronavirus.

    The Cabinet Office has written to departments asking for recommendations about restrictions, how they could be implemented and how to ensure “compliance.”

    The measures, which are being described as a “shielding plan for London”, could be introduced as soon as next week and see businesses closed and restrictions placed on travel. Robert Jenrick, the housing minister, is taking the lead on the policy.

    Under new emergency powers the government will be able to “close premises” and “restrict or prohibit events and gatherings” including halting cars, buses, trains and planes.

    The issue of ‘enforcement’ came up several times.

    Across the channel, France reported a total of 9,135 cases on Wednesday, a jump of 1,404 cases from Tuesday, according to Director General for Health Jerome Salomon, who released the figures during a daily briefing.  Deaths rose to 264 from 175 the day before.

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    Earlier, the WHO branded the virus an “enemy against humanity,” and urged a collective response to fight the global outbreak.

    “This coronavirus is presenting us with an unprecedented threat,” WHO chief Tedros Adhanom Ghebreyesus said Wednesday.

    As expected, the EU on Wednesday barred travelers from outside the bloc for 30 days to try to slow the rapid spread of the virus. Though it estimated that there are still 80,000 EU citizens abroad who must return home.

    Europe has now recorded 4,023 deaths, including 2,978 in Italy which recorded its highest single day toll Wednesday, surpassing 3,384 deaths in Asia.  Across the Continent, more than 84,000 cases have been confirmed, with Italy, Spain and France leading in both infections and fatalities.

    While Italy, France, the UK and Spain suffer, Germany has had slightly more success in containing the virus, as cases and deaths have remained muted while testing has always been high. As of Feb. 24, Germany had 16 confirmed cases.

    On Wednesday, Chancellor Angela Merkel delivered a major televised address – a format typically saved for her new years’ address – warning the country that it’s facing its most serious challenge since World War II where “solidarity” was critical. Cases in the country jumped by more than 1,000 overnight to a total of 8,198, while the German death toll has been steady at 12 for days. If effective measures aren’t taken, 10 million Germans could be infected in the next three months, Germany’s top health authorities have warned.

    “The coronavirus is currently changing life in our country dramatically,” Merkel said. “Our expectations of normality, of public life, of community – all that is being tested like never before.” She called on all Germans to “do their part” in limiting the damage.

    Schools have been closed in some areas (particularly in hard-hit Bavaria), and restaurants and bars across the country have shuttered or reduced their hours, though no blanket bans or closures have been adopted by federal officials.

    *  *  *

    Update (1350ET): UK PM Johnson just ordered all schools across the UK to close, and promised to “do more” after passing a massive stimulus package yesterday.

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    The prime minister promised nervous students that “exams will not take place as planned in May and June” and that schools would ‘remain open’ on some level to accommodate the children of emergency workers as well as ‘vulnerable pupils’.  To lessen the financial blow to families, Johnson added that the government will provide vouchers for free school meals for those eligible.

    *  *  *

    Update (1330ET): Italy has reported another record jump in deaths on Wednesday: 475 new deaths were confirmed, bringing total to 2,978. Meanwhile, the total number of confirmed cases has climbed to 35,713 from 31,506, with a total of 2,978 deaths.

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    UK also reported its largest jump in deaths, reporting an additional 37 fatalities, bringing its total to 104, while it’s case total lingers below 3,000, while government epidemiologists project that the true number infected is likely closer to 50k, given the death toll.

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    Schools in Scotland and Wales are set to close on Friday, with PM Boris Johnson and his education secretary Gavin Williamson hinting that the situation in schools is getting harder to control, and with ensuring safety becoming more difficult, it’s about time to close up shop.

    *  *  *

    Update (1255ET): The UAW has reportedly succeeded in convincing Detroit automakers to shut down all US factories, following similar decisions by German and South Korean car companies.

    As the reporters in the briefing room chew over Trump’s insistence on blaming China while maintaining a 4ft perimeter of personal space, we’d like to highlight the results of a study by the University of Southampton showing there could have been a 95% reduction in cases world wide if China had acted to contain the virus 3 weeks earlier.

    The UK is reportedly about to close schools across the country as PM Boris Johnson continues his policy about-face after the experts advising the administration’s shifted their view and warned that if Johnson were to stay the course – ignoring the quarantines and closures being implemented everywhere else – it would likely result in “hundreds of thousands” of deaths.

    The education secretary has said that the situation for schools has become “increasingly challenging” and that the circumstances are “shifting.”

    *  *  *

    Update (1250ET): Trump said China hasn’t asked the US for any leeway on the ‘Phase 1’ trade pact, though he speculated that they might thanks to the enormous economic hit they are taking. 

    Regarding Mexico, Trump said he’s not closing the border, but is invoking a “provision” giving him greater latitude.

    In unrelated, but encouraging, news for some of the most vulnerable Americans during this time of crisis, HUD has suspended all foreclosures/evictions until the end of April, Trump said.

    *  *  *

    Update (1220ET): President Trump has invoked the Defense Production Act and deploys FEMA to all regions of the country.

    After once again calling on Americans to heed the governments guidance, Dr. Birx said she has seen some preliminary data suggesting that young people are being infected at much higher rates because of their indifference to the virus – which would explain the unusually large number of young people in serious condition in Italy and other parts of the country.

    With tests about to become widely available, the US could see numbers of cases rise pretty swiftly, potentially provoking claims that the US is “worse than Italy”. She advised the public to ignore this, adding that Roche and Thermo-Fisher have really stepped up in providing tests.

    Unsurprisingly, one of the first questions posed to Trump was an inquiry about why he keeps referring to the virus as the “Chinese virus”, with the reporter snarkily noting that more Europeans now have the virus than Chinese people.

    “Because it comes from China,” Trump calmly replied, before going on to explain that “China was saying that US soldiers spread the virus to China…I can’t have that.”

    Trump also said that the economy is “nowhere close” to the 20% unemployment number that has been bandied about since Mnuchin reportedly brought it up during a meeting with Republican lawmakers.

    Notably, Dr Anthony Fauci, who is nearly 80 and technically in the “high risk” contingent for the virus, was absent from today’s briefing. Maybe that’s why markets were so unimpressed.

    *  *  *

    Update (1200ET): Mitch McConnell has called a vote on the second part of the federal coronavirus response package for 2 pm. The bill was stalled after some GOP lawmakers insisted on making ‘technical alterations’.

    In a series of tweets, McConnell says he will support the bill, though he feels it doesn’t go far enough to help small business owners. Of course, in the middle of a crisis, we suspect the small businesses McConnell is championing would rather have something concrete, than all the empty soundbites in the world.

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    The market is moved higher in recent trade. Is the Trump Administration about to show investors that it has the capacity to step up in times of crisis? Stay tuned…

    *  *  *

    Update (1150ET): Cuomo and NY public health officials just confirmed that they’re “looking into” reports about a “cluster” of cases in Borough Park, Brooklyn, a neighborhood that’s overwhelmingly populated by ultra-orthodox Jews, stirring up memories of last year’s measles outbreak.

    In other news, the total cases diagnosed in Europe has now passed the total from China.

    *  *  *

    Update (1140ET): As we wait for the inevitably tardy White House task force, accompanied by President Trump, to deliver Wednesday’s briefing, here are a few more updates:

    Companies in NY shouldn’t have no more than 50% of their workforce in their facilities at any time, NY Gov Andrew Cuomo said, as his daily presser began.

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    After initially proposing a $50 billion airline bailout, Trump is reportedly proposing lending to air carriers from the Exchange Stabilization Fund, a pool of capital at the Treasury used for direct FX-market interventions. The administration is also reportedly planning to set aside another $150 billion for other industry bailouts.

    With NY still leading the country in testing thanks to a handful of ‘drive thru’ testing centers that have opened in the southern part of the state, Cuomo said the state has now confirmed 2,382 cases in the state, up 1,008 since yesterday, slightly larger than yesterday;’s jump. That’s a larger total than all but 10 countries.

    In Norway, lawmakers passed a bill granting the country’s executive emergency powers, what appears to be a first in Europe.

    *  *  *

    Update (1110ET): The EU has reportedly decided on a plan that will ‘pave the way’ for the ECB to make the bond purchases that it has promised.

    In other news: Amid the market carnage, Wal-Mart shares climbed 6.1% higher on Wednesday to hit a fresh record high. In Canada, PM Trudeau confirmed that the decision to close the northern border was a mutual decision.

    And once after again trashing President Trump’s fiscal plan of giving every American $1,000, Senate Minority Leader Chuck Schumer said Wednesday that the payments to Americans need to be “bigger” and “more frequent”. He’s not the only one: Bernie Sanders said he would double the amount to $2,000 per adult American during a post-primary announcement on Tuesday. Even Andrew Yang tweeted that he was “consulted” about his infamous ‘freedom dividend’ policy.

    Like a teenager intent on acing that first job interview, when it comes to the market chaos, the White House simply won’t take ‘no’ for an answer, and has repeatedly tried to jawbone us out of this crisis, even as the reaction has made plain that only concrete action from the Trump Administration and Congress can save us from this meltdown.

    Steve Mnuchin was in the middle of an interview with CNBC Wednesday morning when the Washington Post reported that the White House now intends to send two $1,000 checks to adult Americans, in addition to the $300 billion in ’emergency liquidity’ (ie zero-interest loans) it’s also promising.

    Here’s a few headlines from the Mnuchin interview.

    • MNUCHIN PROPOSES $500B IN AID CHECKS PAID IN TWO INSTALLMENTS
    • MNUCHIN SUMMARIZES VIRUS AID PROPOSAL IN FACT SHEET
    • U.S ALSO OUTLINES $200B IN CORPORATE AID, $300B SMALL BUSINESS
    • CHECKS TO AMERICANS WOULD COME ON APRIL 6, MAY 18 IF APPROVE

    In a few minutes, we’re bound to hear more from the White House task force.

    *  *  *

    Update (1000ET): In a statement released by the Pentagon, 49 American members of the American military have now tested positive for the virus, 13 more than Tuesday.

    Three of them have been hospitalized.

    In addition, 14 DoD contractors have tested positive, 19 spouses of service members and 7 contractors.

    *  *  *

    Update (0940ET): President Trump just tweeted that the US will be closing the 5,500-mile Canadian border “by mutual consent” – adding that trade and other “essential” traffic wouldn’t be interrupted.

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    Since the order comes via “mutual consent”, American citizens won’t be able to cross into Canada. This comes after PM Trudeau closed the country’s borders to all foreigners except Americans earlier this week.

    In other news, NYC Mayor de Blasio said the city needs the military’s help to combat the virus, eliciting mental images of phalanxes of soldiers walking down Fifth Avenue, like something out of a disaster movie.

    As we wait to see if the rest of the Olympic Committee will take the advice of Spanish Olympic Committee head Alejandro Blanco and push to cancel the games…especially as quarantines make it impossible for athletes to train.

    In the UK, a reporter for the London-based ‘City AM’ business newspaper said she’d heard that the government is planning in order to ban nonessential traffic in and out of London. The quarantine order would also shutter all stores besides groceries and pharmacies.

    Additionally, the Eurovision 2020 contest has been cancelled.

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    *  *  *

    With US equity futures limit-down again overnight, the novel coronavirus outbreak is beginning to feel like ‘Groundhog Day’.

    And if the market’s performance isn’t enough to get readers doubting their own sanity, some of the novel coronavirus headlines hitting in the early morning and overnight just might do the trick. One day after Chinese health officials reported just a single case of Covid-19 that was transmitted domestically, President Xi has warned that “inbound” cases of the virus – ie foreigners traveling to China who are already infected – are placing China at risk for reinfection. So, after China infected the world, President Xi is warning that the world might soon reinfect China.

    Overnight, Hong Kong reported 14 new confirmed cases – its largest single-day jump – after new cases slowed to a trickle in recent weeks. According to the SCMP, all except one of those cases was a foreigner bringing the virus back to HK.

    Singapore and Taiwan, which were widely praised for acting swiftly to stamp out the virus via mandatory closures, travel restrictions and – as the NYT explained in a story published Wednesday morning – swiftly tracing and isolating contacts of the recently diagnosed. In South Korea, a spate of new clusters around densely populated Seoul has raised fears about another runaway outbreak, per the SCMP.

    The KCDC reported 93 new cases on Wednesday, up from 84 a day earlier and 74 on Monday. The new cases took the total infection caseload to 8,413.

    As Republican “deficit-hawks” like Lindsey Graham pushed back against the Trump Administration’s latest ‘helicopter money’ stimulus plan yesterday that will inject $1 trillion into the economy (on top of $300 billion in deferred tax payments), Treasury Secretary Steven Mnuchin took a page out of the ‘TARP’ playbook and warned a group of GOP senators during a closed-door meeting on Tuesday that the unemployment rate in the US could soar to depression levels of around 20% if they failed to pass the legislation, then promptly leaked his comments to Reuters, with the stipulation that Mnuchin’s comments didn’t represent an official “forecast”, merely one of many worst-case scenarios that could come to pass if the federal government continues to sit on its hands.

    In the Middle East, Iran reported another 147 deaths from the virus on Wednesday, bringing its death toll to 1,135. Elsewhere, the Sultanate of Oman entered an almost full lockdown beginning at noon local time on Wednesday as the sultanate imposes the most restrictive measures across the Gulf states to limit the spread of coronavirus after the region recorded its first death outside Iran two days ago.

    In the UK, Sainsbury’s supermarket chain said Wednesday that it would begin limiting customer purchases to between 2-3 items to combat hoarding.

    As suddenly unemployed workers in the US crash state benefit websites, the ILO has warned that the pandemic could leave up to 25 million more out of work, and drastically slash incomes.

    Globally, the total number of Covid-19 cases passed 200,000 overnight – more than doubling over two weeks – after health officials around the world reported the largest jump in cases yet, with an additional 15,615 confirmed on Tuesday, and even more confirmations following overnight.

    So far, the US has confirmed 6,496 cases, including 114 deaths. In Italy, the second worst-hit country after China (and likely Iran, which lags Italy on the official death toll but likely has thousands of dead or deathly ill who aren’t being counted. In Italy, infections topped 31,500 and deaths reached 2,503 by Wednesday morning.


    Tyler Durden

    Wed, 03/18/2020 – 20:45

  • "It's Rather Devastating": The Coronavirus Outbreak Cost One NYC Caterer Half A Million Dollars
    “It’s Rather Devastating”: The Coronavirus Outbreak Cost One NYC Caterer Half A Million Dollars

    The coronavirus outbreak is lopping severe pressure on businesses globally. In the last 72 hours alone, we have covered New York City restaurants that have been decimated and executives in the airline and travel industry who have cut their salaries as a response.

    One businessperson, New York city caterer David Turk, shared with Bloomberg how the outbreak has cost him $500,000 – and that’s only so far.

    Just hours after we reported about the mass cancellations that were happening across the city, we are now privy to the financial mayhem it is wreaking. Turk said: “There was a deposit paid but the balance of it was what we were counting on, and of course it’s gone. Virtually everything that was on the books is either canceled or going to be rescheduled for a later time.”

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    New York City has taken drastic measures to stop the spread of the virus, including cancelling the St. Patrick’s Day parade, events at Madison Square Garden and shutting down Broadway. 

    Businesses in the city are bracing for major disruption, the length and severity of which many are still unsure of.

    Turk says about 10 events that he was scheduled to work have been cancelled. He also said that others in the catering industry are already laying people off. He plans on asking his landlord for a rent concession to try and prevent laying off his own workers. 

    He concluded: “It’s rather devastating. This is going to be horrible for the New York economy. horrible. There’s going to be a lot of people who are going to need help.”


      Tyler Durden

      Wed, 03/18/2020 – 20:40

    1. Lehman Playbook Continues: Fed Unveils Another Bailout Fund To Avoid Money Market Funds 'Breaking The Buck'
      Lehman Playbook Continues: Fed Unveils Another Bailout Fund To Avoid Money Market Funds ‘Breaking The Buck’

      The four-letter acronyms for ‘bailout’ continue to play out exactly like during the Lehman crisis (as we previewed here), as The Fed desperately tries to hold the backbone of the entire global financial markets together with whack-a-mole buying programs to avoid investors seeing behind the curtain of the whole Potemkin Village.

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      Earlier this week we previewed all this, noting that, in addition to the revival of the PDCF, we may also see the return of AMLF and MMIFF…

      The second (MMIFF) was designed to provide liquidity for money market mutual funds, stimulating them to extend the term of their money market investments.

      Instead of scrambling for overnight assets because of liquidity fears, this would help maintain demand for term securities in the money market. Although no loans were made under the MMIFF, the facility could be useful this time. While CPFF helps issuers of commercial paper, money market mutual funds are still in need of liquidity.

      A related facility, which peaked at $140bn in 2008, was the Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility (AMLF) which provided funding for depository institutions purchasing asset-backed commercial paper from money market mutual funds.

      As if one needs reminding, one of the more dramatic events from the 2008 crisis was the sight of mutual funds trading below $1 – so-called ‘breaking the buck’.

      When money-market investors fear they won’t get back their capital it will make a bad situation into a real crisis.

      The Fed has enough to deal with without a run on mutual funds by retail investors, and so, sure enough, in addition to unlimited repo, CPFF, TALF, and PDCF, The Fed has just announced  the establishment of a Money Market Mutual Fund Liquidity Facility, or MMLF.

      As the biggest buyers of commercial paper, this bailout facility is clearly aimed, once again, at being another effort to reduce the spiking risks (and freeze) in the critical short-term liquidity markets.

      While yields did compress a little (positive) today, risk increased notably despite CPFF…

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      And so, paging through the “OMFG, what do we do now that didn’t work in the past”-playbook, this new facility will  make loans available to eligible financial institutions secured by high-quality assets purchased by the financial institution from money market mutual funds.

      We wait to see how effective this latest four-letter-word will be in calming the savage beast of a global dollar shortage.

      *  *  *

      Full Details below:

      The Federal Reserve Board on Wednesday broadened its program of support for the flow of credit to households and businesses by taking steps to enhance the liquidity and functioning of crucial money markets.

      Through the establishment of a Money Market Mutual Fund Liquidity Facility, or MMLF, the Federal Reserve Bank of Boston will make loans available to eligible financial institutions secured by high-quality assets purchased by the financial institution from money market mutual funds.

      Money market funds are common investment tools for families, businesses, and a range of companies. The MMLF will assist money market funds in meeting demands for redemptions by households and other investors, enhancing overall market functioning and credit provision to the broader economy.

      The term sheet below details the types of assets, including unsecured and secured commercial paper, agency securities, and Treasury securities, that are eligible, as well as additional information. The MMLF program will purchase a broader range of assets, but its structure is very similar to the Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility, or AMLF, that operated from late 2008 to early 2010. The MMLF is established by the Federal Reserve under the authority of Section 13(3) of the Federal Reserve Act, with approval of the Treasury Secretary. The Department of the Treasury will provide $10 billion of credit protection to the Federal Reserve in connection with the MMLF from the Treasury’s Exchange Stabilization Fund.

      Term Sheet:

      Money Market Mutual Fund Liquidity Facility

      Facility: To provide liquidity to Money Market Mutual Funds (“Funds”), the Federal Reserve Bank of Boston
      (“Reserve Bank”) would lend to eligible borrowers, taking as collateral certain types of assets purchased by
      the borrower from Funds (i) concurrently with the borrowing; or (ii) on or after March 18, 2020, but before
      the opening of the Facility.

      Borrower Eligibility: All U.S. depository institutions, U.S. bank holding companies (parent companies
      incorporated in the United States or their U.S. broker-dealer subsidiaries), or U.S. branches and agencies of
      foreign banks are eligible to borrow under the Facility.

      Funds: A Fund must identify itself as a prime money market fund under item A.10 of Securities and Exchange
      Commission Form N-MFP.

      Advance Maturity: The maturity date of an advance will equal the maturity date of the eligible collateral
      pledged to secure the advance made under this Facility except in no case will the maturity date of an advance
      exceed 12 months.

      Eligible Collateral: Collateral that is eligible for pledge under the Facility must be one of the following types:

      1) U.S. Treasuries & Fully Guaranteed Agencies;

      2) Securities issued by U.S. Government Sponsored Entities;

      3) Asset-backed commercial paper that is issued by a U.S. issuer, is rated at the time purchased from the
      Fund or pledged to the Reserve Bank not lower than A1, F1, or P1 by at least two major rating agencies
      or, if rated by only one major rating agency, is rated within the top rating category by that agency; or

      4) Unsecured commercial paper that is issued by a U.S. issuer, is rated at the time purchased from the
      Fund or pledged to the Reserve Bank not lower than A1, F1, or P1 by at least two major rating agencies
      or, if rated by only one major rating agency, is rated within the top rating category by that agency.

      In addition, the facility may accept receivables from certain repurchase agreements.

      Rate: Advances made under the Facility that are secured by U.S. Treasuries & Fully Guaranteed Agencies or
      Securities issued by U.S. Government Sponsored Entities will be made at a rate equal to the primary credit
      rate in effect at the Reserve Bank that is offered to depository institutions at the time the advance is made.
      All other advances will be made at a rate equal to the primary credit rate in effect at the Reserve Bank that is
      offered to depository institutions at the time the advance is made plus 100 bps.

      Fees: There are no special fees associated with the Facility.

      Collateral Valuation: The collateral valuation will either be amortized cost or fair value. For asset-backed
      and unsecured commercial paper, the valuation will be amortized cost.

      Credit Protection by Department of the Treasury: The Department of the Treasury, using the Exchange
      Stabilization Fund, will provide $10 billion as credit protection to the Reserve Bank.

      Non-Recourse: Advances made under the Facility are made without recourse to the Borrower, provided the
      requirements of the Facility are met. For avoidance of doubt, borrowers under the MMLF will bear no credit
      risk.

      Regulatory Capital Treatment: Separately and consistent with the purposes of the MMLF, the Board, the
      OCC, and FDIC will act to fully neutralize the impact of a depository institution holding company or depository
      institution’s participation in the facility for purposes of regulatory capital requirements, including risk-based
      capital and leverage requirements. The Board, OCC, and FDIC will fully exempt from risk-based capital and
      leverage requirements (i) any asset pledged to the MMLF and (ii) any asset purchased from a Fund on or after
      March 18, 2020 that the firm intends to pledge to the MMLF upon opening of the Facility.

      Program Termination: No new credit extensions will be made after September 30, 2020, unless the Facility is
      extended by the Board of Governors of the Federal Reserve System.

      *  *  *

      So this better all be fixed by September?

      The market for now was completely unimpressed by this latest effort:

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      Tyler Durden

      Wed, 03/18/2020 – 20:40

    2. Johnstone: 9 Surreal Thoughts About Covid-19 & What's Coming Next
      Johnstone: 9 Surreal Thoughts About Covid-19 & What’s Coming Next

      Authored by Caitlin Johnstone via Medium.com,

      This gig is kinda weird at the moment. I write about what’s going on in the world for a living, and there’s certainly plenty going on in the world to be written about. But also there’s this acute awareness that anything I write about today is going to look petty and insignificant in the very near future.

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      I mean, we’re in the first moments of an unfolding pandemic which, from what I can tell just looking at the numbers, is about to change the world in some pretty significant ways. Governmental faceplant after governmental faceplant after missed opportunity after missed opportunity all around the world appears to have set us on a trajectory toward overburdened healthcare systems, severe economic downturns, and, of course, mass deaths.

      And maybe chaos. And maybe healing. And maybe, when all is said and done, a total restructuring of power and the way we do things.

      Standing on the precipice of that, how the hell am I supposed to write about how Bernie didn’t go hard enough at Biden in the last debate or whatever? So many of the arguments we’ve been placing so much importance on lately could easily look irrelevant in a matter of weeks.

      Anyway, here are nine thoughts on COVID-19 and what’s coming.

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      1 – Everyone in conspiracy circles has strong opinions about what’s going on, so anything I could possibly say about this is going to get a ton of pushback from some faction or another. That’s fine. In my opinion the fears that the ruling class will seize this opportunity to advance preexisting authoritarian agendas are well-founded, and people are right to have suspicions about the official narrative on the origins of the virus, but people who are still saying the whole thing is fake from top to bottom and it’s just another flu/no big deal have been proved wrong by facts in evidence. People should minimize social contact to avoid overburdening healthcare systems and thereby killing people. No matter how certain you are that this is all fake, you’re not certain enough to justify needlessly risking lives.

      2 – Google-owned YouTube has just announced that they’re going to be censoring a lot more videos during the pandemic, citing the need to rely on automated censorship as they scale back workers’ presence at the office. No attempt has been made to explain why YouTube staff can’t just review the material working from home. Definitely worth keeping an eye on; if widespread authoritarian measures are going to be implemented during this time, increasing internet censorship will likely be the first step.

      3 – I think this is going to hit America much harder than other countries, unfortunately. Combine a literal joke of a healthcare system with a president who up until just today has been dismissive of the threat the virus poses, the fact that the majority of Americans can’t afford a $1,000 emergency expense at a time of mounting layoffs while being chronically uninsured or underinsured, an inability to make anything happen without massive corporations voluntarily going against their own profit margins, a culture of rugged individualism with a reflexive distaste for collectivist organization for the good of the whole, and a highly religious population with many preachers telling their underinsured parishioners to demonstrate their faith by gathering at the megachurch and shaking hands with everyone, and you’ve got a recipe for disaster.

      Please stay as safe as you can.

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      4 – Meanwhile China is having success getting the pandemic under control on its end, with its government’s ability to build hospitals and crank out brand new tech solutions with astonishing swiftness, and of course to clamp down on the public’s free movement as soon as it was deemed necessary. Now Beijing is moving into a world leadership position in tackling the pandemic, stepping in to aid nations which can’t get help elsewhere like Italy and Serbia.

      5 – The US became a superpower after being left intact while competing nations were stuck rebuilding themselves from two devastating world wars, allowing it to surge ahead of the competition. China, as we’ve discussed here many times, has been poised to overtake America as the dominant world power, so it’s possible we’ll see China’s relative success and America’s relative failure on this front dance in a way which gives a significant boost in that direction in the same way the US was given a boost by the world wars. It’s very likely China comes out of this notably further along in its agenda to create a multipolar world than before this all began.

      6 – And the US of course realizes this threat, which is why my social media notifications right now are full of propagandized human livestock bleating about China being the Latest Official Bad Guy who I absolutely must believe very bad things about. A dying empire knows it’s going to need to take some drastic, dangerous measures to secure world dominance in the face of a surging contender, and it knows it needs to manufacture consent for those drastic, dangerous measures. Anti-China propaganda has been pouring into mainstream consciousness with more and more aggression lately, first and foremost within right-wing echo chambers but also within mainstream liberal ones — Joe Biden compared the Chinese government to Jack the Ripper just last night.

      The result has been rank-and-file westerners beginning to lose their minds about China, which has looked exactly like a right-wing mirror of the Russia hysteria we watched unfold throughout late 2016 and early 2017. I have been encountering far more hysterical anti-China sentiment online than I was even a week or two ago; a poll published at the beginning of this month reports US anti-China sentiment is at a 20-year high, and I’ll wager if they took it again today it would be significantly worse.

      People are now constantly shrieking about how authoritarian the Chinese government is, which is stupid, because China has always had an authoritarian government. It hasn’t changed; the only thing that’s changed is the narrative management, with glaring adjustments like the mass media reporting on the Hong Kong protests vastly more than the anti-government demonstrations in US empire-aligned nations like France. All this irrelevant emphasis on where the virus originated isn’t there to protect you from the virus, it’s there to make China look bad. China is no more of a threat to you than it was two years ago; the only thing that’s changed is you’re now being hammered with narratives about how threatening it is. Mass media converging upon a single empire-targeted nation is never a good thing.

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      7 — It’s interesting how the virus which might knock down the most powerful government in the world behaves so much like that government: dominating world affairs and killing the most vulnerable members of the populations it attacks. Nations which are being smashed with US sanctions have already been watching their frail and elderly die of inadequate medical care and malnutrition, and now with the coronavirus they’re experiencing those same exact effects squared. Which is why places like Iran are being hit so uniquely hard. America is like if COVID-19 was a country.

      8 — Also interesting is watching people react to the way so many of the corporate and government policies which have been causing ordinary human beings to suffer great pains are now simply being canceled all around the world in response to the pandemic. This Slate article documents a number of the changes which have been made just in America, like how for people being thrown in jail for minor offenses, “San Antonio is one of many jurisdictions to announce that, to keep jails from being crowded with sick citizens, they’ll stop doing that. Why were they doing it in the first place?” Or how “Trump has instructed government agencies who administer loans to waive interest accrual for the duration of the crisis. But why on earth is our government charging its own citizens interest anyway?”

      We’re seeing immense burdens lifted from people with an easy “Oh, that’s making the pandemic worse? Okay we’ll stop that then.” And we’re seeing people react with fully justified indignation with, “Well why were you doing that to me in the first place??”

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      And the answer is very simple: because until now, your suffering wasn’t exacerbating a virus which does not discriminate on the basis of class. Politicians and billionaires are just as capable of losing their lives and loved ones to this virus as anyone else, as the CEO of Universal Music Group just learned with his COVID-19 hospitalization. Simply not causing needless human suffering wasn’t enough to get them to stop crushing people; it had to actually show up on their doorstep to make a difference.

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      9 — I have long thought that it would be awesome if the world could just take a nap for a minute. Capitalism is built around the glorification of busyness. We’re going to find out how many jobs we can do from home, how many jobs are only busywork, how many jobs we can comfortably consolidate or do without completely, and how many jobs are actually harmful. A big chunk of jobs have nothing to do with feeding, housing or caring for us, and everything to do with persuading people that they are deficient in some imaginary way and require this placebo tonic snake-oil to make us better again. Religion is one such job. Advertising, marketing, and most media are others. If we redesign the economy, we could do away with those altogether and have all that creative effort go toward healthy things.

      Primarily though, we all need a big rest from constantly doing such soul-draining things. Having to do this while under the worry that we won’t be able to pay our rent and bills is not ideal, but do as my Mum always says — worry about the things you can change, and for the things you can’t change right now, leave them for the birds. Leave the bills for the birds for now. We will work out something; we always do. But for now, you are safe and you have everything you need. Notice that. Once you’ve established that you’re solid in this moment at least, take this time to really dig as deeply in to relaxation as you can. Watch some stand-up and get yourself laughing, sing to some youtube karaokes, nap often and deeply, take showers and baths, really taste your food and enjoy your breath, yawn and stretch and cuddle and shake it all out. Forget about cleaning out the cupboards or learning that instrument or reading that book or whatever cute thing you decided you really should do now that you have the time — let your animal body lead the way, and give your brain a rest from all the shoulds and shouldn’ts. You’re fine just to do nothing at all. Sink in to that.

      *  *  *

      Thanks for reading! The best way to get around the internet censors and make sure you see the stuff I publish is to subscribe to the mailing list for my website, which will get you an email notification for everything I publish. My work is entirely reader-supported, so if you enjoyed this piece please consider sharing it around, liking me on Facebook, following my antics onTwitter, checking out my podcast on either Youtube, soundcloud, Apple podcasts or Spotify, following me on Steemit, throwing some money into my hat on Patreon orPaypalpurchasing some of my sweet merchandise, buying my books Rogue Nation: Psychonautical Adventures With Caitlin Johnstone and Woke: A Field Guide for Utopia Preppers. For more info on who I am, where I stand, and what I’m trying to do with this platform, click here. Everyone, racist platforms excluded, has my permission to republish, use or translate any part of this work (or anything else I’ve written) in any way they like free of charge.

      Bitcoin donations:1Ac7PCQXoQoLA9Sh8fhAgiU3PHA2EX5Zm2


      Tyler Durden

      Wed, 03/18/2020 – 20:20

    3. Organized Crime? Robberies By Suspects Wearing Virus Masks Reported Across East Coast
      Organized Crime? Robberies By Suspects Wearing Virus Masks Reported Across East Coast

      The virus crisis in America is leading towards the unraveling of the social fabric. A string of robberies has been reported across the East Coast with suspects wearing medical masks. 

      The Hill reports that the robberies appear unrelated, but as we’ve noted before, organized crime gangs could be on the prowl.

      Medical masks are perfect covers to shield one’s identity. That’s what happened late last month when two men robbed a bank in the Atlanta suburb of Smyrna. 

      Earlier this month, two men wearing medical masks robbed three workers transporting $200,000 at the Aqueduct Racetrack in Queens, New York. 

      Last week, a medical mask-wearing man robbed a Boston bank, then the same thing happened in New Jersey. 

      People wearing medical masks in public settings are becoming the norm these days, as a fast-spreading virus has so far infected 3,802 people and killed 69. Education systems, restaurants, bars, shops, and gyms have been asked to shut down in New York and California. Mass gatherings are starting to be banned or at least limited in some regions across the country as social distancing is in an attempt to flatten the curve and keep infections down to prevent hospital systems from being overwhelmed. 

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      The National Guard was called up Friday and is deploying 1,000 troops across six states. A new risk is developing, one where organized crime gangs could start targeting shops and or communities during a nationwide shutdown. 

      To sum up, the virus crisis sweeping across America could lead to a surge in crime. Also, when the economy experiences below-trend growth, an increase in crime usually follows. And now it makes sense, why instead of food, people are loading up on weapons… 

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      Tyler Durden

      Wed, 03/18/2020 – 20:00

    4. Visualizing Central Bank Gold Buying And Gold Repatriation
      Visualizing Central Bank Gold Buying And Gold Repatriation

      Submitted by BullionStar.com,

      Gold buying by the worlds’ central banks is now at a 50 year high, with sovereign gold buyers having added a net 650 tonnes of physical gold to their strategic monetary reserves in each of the years 2018 and 2019.

      Central banks purchase gold for a number of reasons, chief among them being that gold provides protection in times of acute market crisis and stress.

      Gold is “a major line of defense under extreme market conditions”, says the Hungarian central bank.

      “Gold provides a kind of anchor of trust, especially in times of stress and crisis”, states the Polish central bank.

      According to the German Bundesbank, “gold is a type of emergency reserve which can also be used in crisis situations”.

      With the entire financial and monetary system currently undergoing monumental dislocations across all asset classes, the gold accumulation and holding strategies of these central banks look more shrewd now than ever. If/when the monetary system is collapsing, gold will most likely be the anchor in the monetary reset stemming from the collapse.

      Many influential central banks have also been withdrawing thousands of tonnes of gold from the Bank of England and US Federal Reserve vaults and flying it back to the security and safety of their home countries.

      But why are central banks buying more gold bars than at any time since 1971? And what has spooked countries such as Germany, the Netherlands, Poland and Hungary that they no longer have confidence in holding their sovereign gold reserves at custodian vaults in London and New York?

      With this visually impressive new infographic from BullionStar, you can now find the answers, including:

      • Which central banks in the world are leading the gold buying scramble?

      • How central bank gold buying mirrors the flow of gold from west to east?

      • What are the motivations of these countries in buying vast quantities of gold?

      • Which leading central banks have airlifted gold back to their home countries?

      • How much gold in total have these repatriating central banks brought back?

      • Why has trust eroded towards the Bank of England and New York Fed vaults?

      • Why gold is likely the strategic anchor of a new future monetary system?

      To embed this infographic on your site, copy and paste the code below

      This infographic from BullionStar.com was originally published on the BullionStar website under the same title “Infographic: Central Bank Gold Buying and Gold Repatriation“.

       


      Tyler Durden

      Wed, 03/18/2020 – 19:40

    Digest powered by RSS Digest

    Mar 18

    Today’s News 18th March 2020

    • US Army Halts Deployment Of Troops And Tanks To NATO's War Game Due To Pandemic Threat 
      US Army Halts Deployment Of Troops And Tanks To NATO’s War Game Due To Pandemic Threat 

       NATO was on the cusp of initiating a massive war drill called Defender-Europe 20. The 40,000 solider war game would have included 20,000 US troops and accompanied by heavy weaponry but was called off on Monday amid the Covid-19 outbreak across Europe.

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      “As of March 13, all movement of personnel and equipment from the United States to Europe has ceased. The health, safety, and readiness of our military, civilians, and family members is our primary concern,” US Army European Command said in a press release.

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      The exercise would’ve been the most massive deployment of US troops to Europe since the 1983 Operation Re-forger exercise at the height of the Cold War.

      US Army European Command said, “many details still being worked and discussed with our Allies and partners.” With a scaled-down exercise, the Army still “anticipates the armored brigade combat team already deployed to Europe will conduct gunnery and other combined training events with Allies as part of a modified Allied Spirit exercise.”

      The release said, “forces already deployed to Europe for other linked exercises will return to the United States.”

      We noted at the initial stages of Defender 20 at the Strategic Command Centre in Nebraska, with participation from US Defense Sect. Esper last month, conducted computer simulations of nuclear war between the US and Russia.

      The biggest war drill in decades was set to take place after the nuclear war simulation against Russia. Simultaneously, a Covid-19 pandemic is sweeping across Europe and crashing the global economy. Talk about unprecedented times… 

      So why did NATO pull the plug on the full-scale drill at the very last minute?

      The reason could be due to large troop movements across Europe that would’ve led to a further spread of the virus. 

      NATO could’ve been on the verge of an armed conflict with Russia, positioning troops and armored vehicles, under the guise of an exercise. 


      Tyler Durden

      Wed, 03/18/2020 – 02:45

    • Europe's 'Open Borders' System Faces Collapse Amid Covid-19 Outbreak
      Europe’s ‘Open Borders’ System Faces Collapse Amid Covid-19 Outbreak

      Update (0200ET): Leaders of the 26 European countries that are part of what is normally a free-movement zone also agreed Tuesday to shut their external borders to most nonresidents for the first time.

      “We are faced with a serious crisis, an exceptional one in terms of magnitude and nature,” European Council President Charles Michel said late Tuesday.

      “We want to push back this threat. We want to slow down the spread of this virus.”

      Other leaders phrased it in martial terms: “We are at war,” French President Emmanuel Macron said Monday.

      Until last week, citizens of the E.U. could move across the continent with ease, even as the virus slowly spread across its population. Just as a resident of Maryland can easily pack bags and head to Virginia, so, too, could a Pole cross into Germany.

      But no more.

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      *  *  *

      As The Gatestone Institute’s Soeren Kern detailed earlier, as a growing number of countries close their borders to fight the coronavirus pandemic, the European system of open internal borders – a cornerstone of European integration – is on the brink of collapse.

      The so-called Schengen Area, which comprises 26 European countries, entered into effect in 1995 and abolishes the need for passports and other types of control at mutual borders. It is a key practical and symbolic achievement of European integration and is now falling apart.

      In a move packed with political significance, Germany, the largest and most powerful country in the European Union, on March 16 introduced controls on its borders with Austria, Denmark, France, Luxembourg and Switzerland after it registered 1,000 new cases of Coronavirus Disease 2019 (COVID-19) in just one day.

      Anyone without a valid reason to travel, German Interior Minister Horst Seehofer said, would be turned away at the borders. Travelers with symptoms of COVID-19 would be refused entry as well. German citizens and anyone with a residence permit, however, will be allowed to reenter Germany.

      “Protecting our population also requires measures to reduce the risk of infection from global travel,” Seehofer said.

      “We are dealing with a very aggressive and fast-spreading virus. We will have to deal with it for months. As long as there is no European solution, you have to act in the interest of your own people.”

      The decision to impose border controls represents a major reversal by the German government. Just a few days earlier, on March 11, German Chancellor Angela Merkel said, “In Germany, we believe that border closings are not the answer to fight the spread of the Covid-19 epidemic.” Her sentiment was echoed later that day by German Health Minister Jens Spahn, who stated, “We are not going to get rid of the virus by closing our borders. The virus is already with us and we have to get used to the idea.”

      On March 15, the German newspaper Bild reported that Merkel was still blocking all attempts by members of her cabinet to impose border controls. The infighting, however, had cost Germany valuable time in trying to contain the spread of the virus.

      Writing for the influential German blog Tichys Einblick, commentator Ferdinand Knauss, explained that Merkel was blocking border controls because the dogma of open borders is an ideological pillar of Merkelism:

      “In the face of the corona crisis, there were apparently discussions in the Federal Government about what most of our neighboring countries had long since done: consistent protective measures at the borders. Several of our neighboring countries — Denmark, Poland, Czech Republic, Austria — have largely closed their borders. In most countries, people from at-risk areas are strictly controlled upon entry. Not in Germany. You do not have to guess very long who prevents this. Only the Chancellor can do that. But why is she doing it?

      “In that fateful year of 2015, the ‘open borders’ became a conditio sine qua non [indispensable condition] for the continuation of Merkelism. That is why the dogma must be maintained. Merkel knows that the instruction to close the border, in general to take consistent national measures to protect her own citizens, would be tantamount to her own declaration of political bankruptcy.

      “So, as citizens become aware of the threat and their demand for protection increases, the corona crisis also becomes a crisis of Merkelism. It already is, as Merkel’s rejection of border protection measures shows. One of the decisive questions will be how the media, which are still largely loyal to Merkel, and the political and social establishment weigh in: The morality of openness to the world versus the protection from threats. The greater and more painful the risk of corona, the harder it will be to neglect the need for protection.

      “Merkel is now fighting. But as always in her chancellorship, she is not fighting for her country and its citizens, for which she is responsible. She is fighting for her power, for her legacy. When the citizens come to understand this, the corona crisis will have been Merkel’s last fight in the political arena.”

      Merkel’s stance had left Germany increasingly isolated, as a growing number of Schengen countries have introduced border controls:

      • Austria. On March 10, Chancellor Sebastian Kurz announced controls along the border with Italy and a ban on the entry of most travelers from there. Kurz said, “The utmost priority is to prevent the spread and thus the importing of the illness into our society. There is therefore a ban on entry for people from Italy into Austria, with the exception of people who have a doctor’s note certifying that they are healthy.” Interior Minister Karl Nehammer also announced a ban on all air or rail travel to Italy.

      • Slovenia. On March 11, Health Minister Ales Sabeder stated that the government had closed some border crossings with Italy and started making health checks at those remaining open in order to combat the spread of the coronavirus. He said that citizens would only be able to cross the border in six places while all other roads that crossed the border would be closed. Normally more than 20 crossings are open. Passenger train transport between the two countries has also been stopped and most bus companies have canceled routes to Italy. Sabeder said that foreigners with Slovenian residence permits would be allowed to enter Slovenia if they had a certificate that they have tested negative for coronavirus during the previous three days.

      • Poland. On March 13, Prime Minister Mateusz Morawiecki announced that, as of March 15, only Polish citizens or people with a Polish residence permit would be allowed to enter the country. Everyone returning home from abroad would be quarantined for 14 days. All international inbound passenger flights or trains are banned, but freight transport is not affected. “The state will not abandon its citizens,” Morawiecki said. “In the current situation, however, we cannot allow ourselves to keep borders open to foreigners.”

      • Switzerland. On March 13, the Swiss government reimposed border controls with other European countries. Switzerland, although not a member of the European Union, is part of the Schengen zone. Justice Minister Karin Keller-Sutter said that travel restrictions from Italy were aimed at preventing Italian patients from seeking access to Swiss hospitals. Asylum seekers were also subject to the restrictions. Swiss citizens, holders of a resident permit as well as cross-border workers and people transiting through Switzerland are still allowed to enter the country.

      • Denmark. On March 14, Prime Minister Mette Frederiksen imposed border controls on all traffic by air, land and sea until at least April 13. Danish citizens are allowed to enter but any non-Dane without a valid reason for travel will be denied entry. “We stand on uncharted territory,” Frederiksen said. “We are in a situation that looks nothing like what any of us have experienced before. It is going to cost us all. If we do not do this, we risk that the costs, human, health and financial, will be far, far greater.”

      • Hungary. On March 16, Prime Minister Viktor Orbán announced that, effective immediately, all passenger traffic into Hungary would be halted and only Hungarian citizens allowed to enter the country. Previously, the government had imposed controls on the country’s borders with Austria and Slovenia. All train travel was halted between Hungary and Croatia, Slovenia and Ukraine.

      • Spain. On March 16, Interior Minister Fernando Grande-Marlaska decreed the reestablishment of controls at all land borders. Only Spanish citizens, people with Spanish residency and cross-border workers will be allowed to enter national territory by land. The measure does not affect the transport of goods.

      The Czech Republic, Estonia, Greece, Latvia, Lithuania and Slovakia, in a bid to combat the spread of the coronavirus, also imposed border controls. Other European countries that are not part of the Schengen system, including Albania, Bulgaria, Romania, Serbia and the Republic of North Macedonia also introduced border controls.

      The Bulgarian Foreign Ministry, which advised its citizens to avoid travelling abroad, described the current state of affairs:

      “The situation at the land borders of European countries is constantly and drastically changing, which makes it impossible to travel to or from Bulgaria with all modes of transport.

      “With regard to the prevention of the spread of the coronavirus, there is almost no country in Europe that has not at the moment introduced restrictive measures — border closures or separate border crossing points, enhanced border controls, shutdown of flights, closure of airports.”

      The break-down of Europe’s system of open borders has been met with anger by those in favor of European integration. During a March 13 press conference in Brussels, Ursula von der Leyen, head of the European Commission, the administrative arm of the European Union, warned member states not unilaterally to close their borders:

      “The Single Market has to function. It is not good when Member States take unilateral action. Because it always causes a domino effect. And that prevents the urgently needed equipment from reaching patients, from reaching hospitals and the medical personnel. Ultimately, it amounts to reintroducing internal borders at a time when solidarity between Member States is needed.”

      In a desperate effort to save the Schengen system, Von der Leyen on March 16 proposed a 30-day entry ban into the European Union. The idea apparently was that if the EU’s borders were closed to the outside world, individual member states would not have to close theirs.

      Ironically, just a few days earlier, Von der Leyen had condemned the March 11 decision by U.S. President Donald J. Trump to impose a 30-day ban on continental Europeans traveling to the United States. “The European Union failed to take the same precautions and restrict travel from China and other hotspots,” Trump said. “As a result, a large number of new clusters in the United States were seeded by travelers from Europe.”

      On March 12, Von der Leyen issued an angry statement:

      “The Coronavirus is a global crisis, not limited to any continent and it requires cooperation rather than unilateral action.

      “The European Union disapproves of the fact that the U.S. decision to impose a travel ban was taken unilaterally and without consultation.”

      Von der Leyen now says that she will present the EU heads of state with a proposal to ban “unnecessary trips” to the Union. The entry ban would initially be for 30 days but could be extended if necessary. “The fewer trips there are, the more we can contain the virus,” she said.

      Anja Krüger, the pro-EU business editor for the German newspaper Tagesspiegel, noted:

      “It is breathtaking how the borders in Europe are closed in the wake of the corona crisis, how one country after another seals itself off. The pandemic shows how fragile the European Union is….

      “After the pandemic subsides, will everything be the same as before, as if nothing had happened? The question is how far the corona crisis is capable of an ad hoc destruction of a slowly growing European awareness among the people in the EU member countries over the years.

      “Much will depend on how the crisis is managed. However, the fact that the return to nationalism was carried out quickly and firmly will arouse desires among opponents of European unification. What goes once, goes again and again.”

      In a March 13 press conference, the president of Italy’s hard-hit Veneto region, Luca Zaia, said that Europe’s borderless zone was “disappearing as we speak.” He noted that the stringent border controls imposed by Austria shows that Schengen “no longer exists and will be remembered in the history books.”


      Tyler Durden

      Wed, 03/18/2020 – 02:00

    • Watch: Hardliners Storm Popular Iran Shrine After It's Belatedly Shuttered Amid Outbreak
      Watch: Hardliners Storm Popular Iran Shrine After It’s Belatedly Shuttered Amid Outbreak

      We previously reported on how despite Qom being at the epicenter of Iran’s deadly Covid-19 outbreak, the powerful Shia clerics overseeing the Iranian ‘holy city’ have fiercely resisted closing its key shrines. 

      In normal times, millions of pilgrims per week flock to the crowded shrines, most especially the shrine of Fatima Masoumeh, named after the sister of the eighth Imam of Shia Muslims. Throughout the crisis, even as the number of confirmed cases recently soared past 10,000 days ago, hardliners still resisted the Masoumeh shrine’s closure.

      But even though up to last week the shrine was still receiving thousands of people, it appears local authorities have moved to enforce a final closure Monday. But as multiple Middle East correspondents reported, this immediately brought rioters out, enraged that one of the holiest sites in Shia Islam has been shuttered.

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      New York Times journalist Farnaz Fassihi reported Monday: “Iran finally shuts down Shia shrines today as coronavirus peaked in those cities.”

      “Mobs of ultra hardliners break the doors in Mashhad & Qom, bypass the police & storm the shrines. This appears organized,” she wrote.

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      President Rouhani had long resisted openly backing its closure despite much of Qom being shut down and in quarantine. 

      However, the province’s governor urged Tehran to finally impose a full quarantine due to the dramatically rising number of infected and dead. 

      A number of Shia clerics have backed Qom’s complete closure, even to religious pilgrims; however, they’ve faced attack and continued resistance from other top clerics which see it as a compromise of Islam.


      Tyler Durden

      Wed, 03/18/2020 – 01:00

    • Visualizing The Secret History Of A Coronavirus Bioweapon
      Visualizing The Secret History Of A Coronavirus Bioweapon

      The below visualization The Secret History of Coronavirus Bioweapon is based on GreatGameIndia‘s exclusive report Coronavirus Bioweapon – How China Stole Coronavirus From Canada And Weaponized It

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      The Saudi SARS Sample

      On June 13, 2012 a 60-year-old Saudi man was admitted to a private hospital in Jeddah, Saudi Arabia, with a 7-day history of fever, cough, expectoration, and shortness of breath. He had no history of cardiopulmonary or renal disease, was receiving no long-term medications, and did not smoke.

      The Canadian Lab

      On May 4, 2013, a sample of this Saudi SARS (aka novel Coronavirus) from the very first infected Saudi patient arrived in Canada’s National Microbiology Laboratory in Winnipeg via Ron Fouchier of Erasmus Medical Center in Rotterdam, Netherlands who sequenced the virus sample.

      Chinese Biological Espionage

      In March 2019, in mysterious event a shipment of exceptionally virulent viruses from Canada’s NML ended up in China. The event caused a major scandal with Bio-warfare experts questioning why Canada was sending lethal viruses to China.

      Four months later in July 2019, a group of Chinese virologists were forcibly dispatched from the Canadian lab – the only level-4 facility equipped to handle the world’s deadliest diseases where Coronavirus sample from the first Saudi patient was being examined.

      Xiangguo Qiu

      The scientist who was escorted out of the Canadian lab along with members of her research team is believed to be a Chinese Bio-Warfare agent Xiangguo Qiu.

      Dr. Xiangguo Qiu is married to another Chinese scientist Dr. Keding Cheng – the couple is responsible for infiltrating Canada’s NML with many Chinese agents posing as students from a range of Chinese scientific facilities directly tied to China’s Biological Warfare Program.

      Dr. Xiangguo Qiu made at least five trips to the Wuhan National Biosafety Laboratory located only 20 miles away from the Huanan Seafood Market which is the epicenter of the outbreak.

      The Canadian investigation is ongoing and questions remain whether previous shipments to China of other viruses or other essential preparations, took place from 2006 to 2018, one way or another.

      Frank Plummer Assassination

      Meanwhile, in a very strange turn of events, renowned scientist Frank Plummer who received Saudi SARS Coronavirus sample and was working on Coronavirus (HIV) vaccine in the Winnipeg based Canadian lab from where the virus was smuggled by Chinese Biowarfare agents has died in mysterious conditions in Nigeria.

      Scholars or Spies

      The Thousand Talents Plan or Thousand Talents Program was established in 2008 by the central government of China to recognize and recruit leading international experts in scientific research, innovation, and entrepreneurship – in other words to steal western technology.

      Weaponizing Biotech

      China’s national strategy of military-civil fusion has highlighted biology as a priority, and the People’s Liberation Army could be at the forefront of expanding and exploiting this knowledge. Chinese military’s interest in biology as an emerging domain of warfare is guided by strategists who talk about potential “genetic weapons” and the possibility of a “bloodless victory.”


      Tyler Durden

      Tue, 03/17/2020 – 23:50

    • Ohio Unemployment Skyrockets By 600% After All Bars & Restaurants Shuttered
      Ohio Unemployment Skyrockets By 600% After All Bars & Restaurants Shuttered

      Is a global recession already beginning as the vast majority of the US and other countries’ workforce grinds to a halt while large cities begin to receive ‘shelter in place’ directives? Yes, says Goldman; and more and more top economists are saying Tuesday it’s a near-certainty. State unemployment numbers are about to bear that out.

      A new Marist poll this week for NPR/PBS News found 18% of US adults responding they’d already either been laid off or had significant reduction of hours due to the ripple effect of the pandemic.

      For an indicator of just how high national unemployment may skyrocket, look no further than Ohio, which on Sunday night declared a ‘health emergency’ and shut down all bars and restaurants state-wide. Journalist Liz Skalka for The Toledo Blade reports that Ohio Senator Rob Portman (R) received “new data on Ohio’s unemployment claims today: 45,000 claims this week compared to 6,500 last week.”

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      Image via The Century Bar in Dayton, Ohio, Facebook.

      The state-wide ordered shutdown of dining and drink establishments by Ohio Governor Mike DeWine on Sunday night impacted about 10% of the state’s workforce, some 500,000 people. 

      A 45,000 unemployment claims number jump from 6,500 means a whopping one-week increase of 592%, and surely now already to soar past 600% into next week.

      Likely, Ohio is the canary in the coal-mine at a moment restaurants and bars across New York, California, and other large states are also fast being ordered to shutter their doors.

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      As of Tuesday Ohio announced 67 confirmed Covid-19 cases across 16 counties, resulting in 17 hospitalizations thus far.

      Federal data issued in February counts 11,674,000 employees in restaurants in bars across the nation. These jobs are about to be decimated, assuming the latest breaking Ohio numbers of just the past week sets the trend.  

      “I think that the odds of a global recession are close to 100 percent right now,” Kevin Hassett, Trump’s former chair of the Council of Economic Advisers told CNN on Tuesday. “I think in the US, we’re going to have a very terrible second quarter.”

      “You’re looking at one of the biggest negative jobs numbers that we’ve ever seen,” he added, warning further the US is set to shed 1 million jobs in March.


      Tyler Durden

      Tue, 03/17/2020 – 23:30

    • Detect, Deter, & Annihilate: How The American Police State Will Deal With The Outbreak
      Detect, Deter, & Annihilate: How The American Police State Will Deal With The Outbreak

      Authored by John Whitehead via The Rutherford Institute,

      “Fear is a primitive impulse, brainless as hunger, and because the aim of horror fiction is the production of the deepest kinds of fears, the genre tends to reinforce some remarkably uncivilized ideas about self-protection. In the current crop of zombie stories, the prevailing value for the beleaguered survivors is a sort of siege mentality, a vigilance so constant and unremitting that it’s indistinguishable from the purest paranoia.”

      – Terrence Rafferty, New York Times

      What do zombies have to do with the U.S. government’s plans for dealing with a coronavirus outbreak?

      Read on, and I’ll tell you.

      The zombie narrative was popularized by the hit television series The Walking Dead, in which a small group of Americans attempt to survive in a zombie-ridden, post-apocalyptic world where they’re not only fighting off flesh-eating ghouls but cannibalistic humans.

      For a while there, zombies could be found lurking around every corner: wreaking havoc at gun shows, battling corsets in movies such as Pride and Prejudice and Zombies, and running for their lives in 5K charity races.

      Understandably, zombie fiction plays to our fears and paranoia, while allowing us to “envision how we and our own would thrive if everything went to hell and we lost all our societal supports.” Yet as journalist Syreeta McFadden points out, while dystopian stories used to reflect our anxieties, now they reflect our reality, mirroring how we as a nation view the world around us, how we as citizens view each other, and most of all how our government views us.

      Indeed, the U.S. government has spent a lot of time and energy in recent years using zombies as the models for a variety of crisis scenarios not too dissimilar from what we are currently experiencing.

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      For instance, back in 2015, the Centers for Disease Control and Prevention put together a zombie apocalypse preparation kit “that details everything you would need to have on hand in the event the living dead showed up at your front door.” The CDC, in conjunction with the Dept. of Defense, even used zombies to put government agents through their paces in mock military drills.

      Fear the Walking Dead—AMC’s spinoff of its popular Walking Dead series—drove this point home by dialing back the clock to when the zombie outbreak first appears and setting viewers down in the midst of societal unrest not unlike our own experiences of recent years (“a bunch of weird incidents, police protests, riots, and … rapid social entropy”). Then, as Forbes reports, “the military showed up and we fast-forwarded into an ad hoc police state with no glimpse at what was happening in the world around our main cast of hapless survivors.”

      Forbes found Fear’s quick shift into a police state to be far-fetched, but anyone who has been paying attention in recent years knows that the groundwork was laid long ago for the government—i.e., the military—to intervene and lock down the nation in the event of a national disaster.

      We’re seeing this play out now as the coronavirus contagion spreads.

      What we have yet to experience (although it may only be a matter of time) is that the government through the imposition of martial law could pose a greater threat to our safety (and our freedoms) than any virus.

      As the Atlantic noted about Fear the Walking Dead: “The villains aren’t the zombies, who rarely appear, but the U.S. military, who sweep into an L.A. suburb to quarantine the survivors. Zombies are, after all, a recognizable threat—but Fear plumbs drama and horror from the betrayal by institutions designed to keep people safe.”

      Indeed, zombie fiction perfectly embodies the government’s paranoia about the citizenry as potential threats that need to be monitored, tracked, surveilled, sequestered, deterred, vanquished and rendered impotent.

      Why else would the government feel the need to monitor our communications, track our movements, criminalize our every action, treat us like suspects, and strip us of any means of defense while equipping its own personnel with an amazing arsenal of weapons?

      For years now, the government has been carrying out military training drills with zombies as the enemy. In 2011, the DOD created a 31-page instruction manual for how to protect America from a terrorist attack carried out by zombie forces. In 2012, the CDC released a guide for surviving a zombie plague. That was followed by training drills for members of the military, police officers and first responders.

      As journalist Andrea Peyser reports:

      Coinciding with Halloween 2012, a five-day national conference was put on by the HALO Corp. in San Diego for more than 1,000 first responders, military personnel and law enforcement types. It included workshops produced by a Hollywood-affiliated firm in…overcoming a zombie invasion. Actors were made up to look like flesh-chomping monsters. The Department of Homeland Security even paid the $1,000 entry fees for an unknown number of participants…

      “Zombie disaster” drills were held in October 2012 and ’13 at California’s Sutter Roseville Medical Center. The exercises allowed medical center staff “to test response to a deadly infectious disease, a mass-casualty event, terrorism event and security procedures”… 

      [In October 2014], REI outdoor-gear stores in Soho and around the country are to hold free classes in zombie preparedness, which the stores have been providing for about three years.

      The zombie exercises appeared to be kitschy and fun—government agents running around trying to put down a zombie rebellion—but what if the zombies in the exercises were us, the citizenry, viewed by those in power as mindless, voracious, zombie hordes?

      Consider this: the government started playing around with the idea of using zombies as stand-ins for enemy combatants in its training drills right around the time the Army War College issued its 2008 report, warning that an economic crisis in the U.S. could lead to massive civil unrest that would require the military to intervene and restore order.

      That same year, it was revealed that the government had amassed more than 8 million names of Americans considered a threat to national security, to be used “by the military in the event of a national catastrophe, a suspension of the Constitution or the imposition of martial law.” The program’s name, Main Core, refers to the fact that it contains “copies of the ‘main core’ or essence of each item of intelligence information on Americans produced by the FBI and the other agencies of the U.S. intelligence community.”

      Also in 2008, the Pentagon launched the Minerva Initiative, a $75 million military-driven research project focused on studying social behavior in order to determine how best to cope with mass civil disobedience or uprisings. The Minerva Initiative has funded projects such as “Who Does Not Become a Terrorist, and Why?” which “conflates peaceful activists with ‘supporters of political violence’ who are different from terrorists only in that they do not embark on ‘armed militancy’ themselves.”

      In 2009, the Dept. of Homeland Security issued its reports on Rightwing and Leftwing Extremism, in which the terms “extremist” and “terrorist” were used interchangeably to describe citizens they perceived to be disgruntled or anti-government.

      Meanwhile, a government campaign was underway to spy on Americans’ mail, email and cell phone communications. News reports indicate that the U.S. Postal Service has handled more than 150,000 requests by federal and state law enforcement agencies to monitor Americans’ mail, in addition to photographing every piece of mail sent through the postal system.

      Fast forward a few years more and local police were being transformed into extensions of the military, taught to view members of their community as suspects, trained to shoot first and ask questions later, and equipped with all of the technology and weaponry of a soldier on a battlefield.

      The Obama administration then hired a domestic terrorism czar whose job is to focus on anti-government American “extremists” who have been designated a greater threat to America than ISIS or al Qaeda. As part of the government’s so-called war on right-wing extremism, the Obama administration agreed to partner with the United Nations to take part in its Strong Cities Network program, which is training local police agencies across America in how to identify, fight and prevent extremism.

      Nothing has changed for the better under the Trump Administration.

      Those who believe in and exercise their rights under the Constitution (namely, the right to speak freely, worship freely, associate with like-minded individuals who share their political views, criticize the government, own a weapon, demand a warrant before being questioned or searched, or any other activity viewed as potentially anti-government, racist, bigoted, anarchic or sovereign), continue to be promoted to the top of the government’s terrorism watch list.

      “We the people” or, more appropriately, “we the zombies” are the enemy in the eyes of the government. This coronavirus merely ups the ante.

      So when presented with the Defense Department’s battle plan for defeating an army of the walking dead, you might find yourself tempted to giggle over the fact that a taxpayer-funded government bureaucrat actually took the time to research and write about vegetarian zombies, evil magic zombies, chicken zombies, space zombies, bio-engineered weaponized zombies, radiation zombies, symbiant-induced zombies, and pathogenic zombies.

      However, in an age of extreme government paranoia, this is no laughing matter.

      The DOD’s strategy for dealing with a zombie uprising, outlined in “CONOP 8888,” is for all intents and purposes a training manual for the government in how to put down a citizen uprising or at least an uprising of individuals “infected” with a dangerous disease or dangerous ideas about freedom.

      Rest assured that the tactics and difficulties outlined in the “fictional training scenario” are all too real, beginning with martial law.

      As the DOD training manual states:

      “zombies [stand-ins for “we the people”] are horribly dangerous to all human life and zombie infections have the potential to seriously undermine national security and economic activities that sustain our way of life. Therefore having a population that is not composed of zombies or at risk from their malign influence is vital to U.S. and Allied national interests.”

      So how does the military plan to put down a zombie (a.k.a. citizen) uprising?

      The strategy manual outlines five phases necessary for a counter-offensive: shape, deter, seize initiative, dominate, stabilize and restore civil authority. Here are a few details:

      • Phase 0 (Shape): Conduct general zombie awareness training. Monitor increased threats (i.e., surveillance). Carry out military drills. Synchronize contingency plans between federal and state agencies. Anticipate and prepare for a breakdown in law and order.

      • Phase 1 (Deter): Recognize that zombies cannot be deterred or reasoned with. Carry out training drills to discourage other countries from developing or deploying attack zombies and publicly reinforce the government’s ability to combat a zombie threat. Initiate intelligence sharing between federal and state agencies. Assist the Dept. of Homeland Security in identifying or discouraging immigrants from areas where zombie-related diseases originate.

      • Phase 2 (Seize initiative): Recall all military personal to their duty stations. Fortify all military outposts. Deploy air and ground forces for at least 35 days. Carry out confidence-building measures with nuclear-armed peers such as Russia and China to ensure they do not misinterpret the government’s zombie countermeasures as preparations for war. Establish quarantine zones. Distribute explosion-resistant protective equipment. Place the military on red alert. Begin limited scale military operations to combat zombie threats. Carry out combat operations against zombie populations within the United States that were “previously” U.S. citizens.

      • Phase 3 (Dominate): Lock down all military bases for 30 days. Shelter all essential government personnel for at least 40 days. Equip all government agents with military protective gear. Issue orders for military to kill all non-human life on sight. Initiate bomber and missile strikes against targeted sources of zombie infection, including the infrastructure. Burn all zombie corpses. Deploy military to lock down the beaches and waterways.

      • Phase 4 (Stabilize): Send out recon teams to check for remaining threats and survey the status of basic services (water, power, sewage infrastructure, air, and lines of communication). Execute a counter-zombie ISR plan to ID holdout pockets of zombie resistance. Use all military resources to target any remaining regions of zombie holdouts and influence. Continue all actions from the Dominate phase.

      • Phase 5 (Restore civil authority): Deploy military personnel to assist any surviving civil authorities in disaster zones. Reconstitute combat capabilities at various military bases. Prepare to redeploy military forces to attack surviving zombie holdouts. Restore basic services in disaster areas.

      Notice the similarities?

      Surveillance. Military drills. Awareness training. Militarized police forces. Martial law.

      As I point out in my book, Battlefield America: The War on the American People, if there is any lesson to be learned, it is simply this: whether the threat to national security comes in the form of imaginary zombies, actual terrorists, American citizens infected with the coronavirus, or disgruntled American citizens infected with dangerous ideas about freedom, the government’s response to such threats remains the same: detect, deter and annihilate.


      Tyler Durden

      Tue, 03/17/2020 – 23:10

    • State TV Issues Most Dire Prediction To Date: Virus Could Kill "Millions" Of Iranians
      State TV Issues Most Dire Prediction To Date: Virus Could Kill “Millions” Of Iranians

      In the course of a month Iran has gone from downplaying its coronavirus outbreak to now issuing its most dire warning yet. It first must be remembered that it was only on Feb. 19 that the Islamic Republic announced its first two confirmed cases originating in Qom (both of which died), the Iranian outbreak epicenter.

      On Tuesday Iranian state TV journalist, Dr. Afruz Eslami, captured headlines in announcing to the country that Iran could see “millions” of deaths from the Covid-19 virus before the pandemic subsides.

      His ‘maximalist’ prediction was geared toward urging people to take the threat seriously, at a moment there is <a href="

      https://platform.twitter.com/widgets.js“>popular unrest in the religious city of Qom over the new closure of an important Shia shrine. 

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      People outside the closed doors of the Fatima Masumeh shrine in Iran’s holy city of Qom Monday night, via AFP.

      The Associated Pres reports: “The death toll in Iran saw another 13% increase Tuesday. Health Ministry spokesman Kianoush Jahanpour said the virus had killed 135 more people to raise the total to 988 amid over 16,000 cases.”

      More countries are also imposing emergency measures across the Middle East, with Syria having days ago shuttered universities and many public spaces – despite not reporting any official confirmed cases, and Jordan Tuesday banning gatherings of more that ten people. 

      But Iran has taken the most drastic measures as the virus’ spread has continued unabated, with daily rising numbers. Tehran says it’s now temporarily sent some 85,000 prisoners home to ensure the pandemic doesn’t rip through the nation’s overcrowded prisons and jails. 

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      The AP reports further of Dr. Eslami’s dire warning: 

      A state TV journalist who also is a medical doctor gave the warning only hours after hard-line Shiite faithful on Monday night pushed their way into the courtyards of two major shrines that were finally closed due to the virus. Supreme Leader Ayatollah Ali Khamenei issued a religious ruling prohibiting “unnecessary” travel.

      Roughly 9 out of 10 of the over 18,000 confirmed cases of the virus in the Middle East come from Iran, where authorities denied for days the risk the outbreak posed. Officials have implemented new checks for people trying to leave major cities ahead of Nowruz, the Persian New Year, on Friday, but have hesitated to quarantine the areas.

      For comparison, if state TV’s latest extreme warnings predicting over a million deaths is anywhere close to accurate, it would surpass the total casualty toll from the most devastating war in modern Middle East history: the Iran-Iraq war.

      On Monday authorities finally ordered the closure of the Masoumeh shrine in Qom, after which Shia hardliners outraged at the decision stormed the shrine’s courtyard:

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      Estimates from the 1980-1988 Iran-Iraq war commonly range from 1,000,000 to twice that number. However, conservative estimates put it at 500,000 deaths – with the Iranian side suffering the greatest losses. 


      Tyler Durden

      Tue, 03/17/2020 – 22:50

    • Nine Meals From Anarchy…
      Nine Meals From Anarchy…

      Authored by Jeff Thomas via Doug Casey’s InternationalMan.com,

      In 1906, Alfred Henry Lewis stated, “There are only nine meals between mankind and anarchy.” Since then, his observation has been echoed by people as disparate as Robert Heinlein and Leon Trotsky.

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      The key here is that, unlike all other commodities, food is the one essential that cannot be postponed. If there were a shortage of, say, shoes, we could make do for months or even years. A shortage of gasoline would be worse, but we could survive it, through mass transport or even walking, if necessary.

      But food is different. If there were an interruption in the supply of food, fear would set in immediately. And, if the resumption of the food supply were uncertain, the fear would become pronounced. After only nine missed meals, it’s not unlikely that we’d panic and be prepared to commit a crime to acquire food. If we were to see our neighbour with a loaf of bread, and we owned a gun, we might well say, “I’m sorry, you’re a good neighbour and we’ve been friends for years, but my children haven’t eaten today – I have to have that bread – even if I have to shoot you.”

      But surely, there’s no need to speculate on this concern. There’s nothing on the evening news to suggest that such a problem even might be on the horizon. So, let’s have a closer look at the actual food distribution industry, compare it to the present direction of the economy, and see whether there might be reason for concern.

      The food industry typically operates on very small margins – often below 2%. Traditionally, wholesalers and retailers have relied on a two-week turnaround of supply and anywhere up to a 30-day payment plan. But an increasing tightening of the economic system for the last eight years has resulted in a turnaround time of just three days for both supply and payment for many in the industry. This a system that’s still fully operative, but with no further wiggle room, should it take a significant further hit.

      If there were a month where significant inflation took place (say, 3%), all profits would be lost for the month for both suppliers and retailers, but goods could still be replaced and sold for a higher price next month. But, if there were three or more consecutive months of inflation, the industry would be unable to bridge the gap, even if better conditions were expected to develop in future months. A failure to pay in full for several months would mean smaller orders by those who could not pay. That would mean fewer goods on the shelves. The longer the inflationary trend continued, the more quickly prices would rise to hopefully offset the inflation. And ever-fewer items on the shelves.

      From Germany in 1922, to Argentina in 2000, and to Venezuela in 2016, this has been the pattern whenever inflation has become systemic, rather than sporadic. Each month, some stores close, beginning with those that are the most poorly capitalised.

      In good economic times, this would mean more business for those stores that were still solvent, but in an inflationary situation, they would be in no position to take on more unprofitable business. The result is that the volume of food on offer at retailers would decrease at a pace with the severity of the inflation.

      However, the demand for food would not decrease by a single loaf of bread. Store closings would be felt most immediately in inner cities, when one closing would send customers to the next neighbourhood seeking food. The real danger would come when that store also closes and both neighbourhoods descended on a third store in yet another neighbourhood. That’s when one loaf of bread for every three potential purchasers would become worth killing over. Virtually no one would long tolerate seeing his children go without food because others had “invaded” his local supermarket.

      In addition to retailers, the entire industry would be impacted and, as retailers disappeared, so would suppliers, and so on, up the food chain. This would not occur in an orderly fashion, or in one specific area. The problem would be a national one. Closures would be all over the map, seemingly at random, affecting all areas. Food riots would take place, first in the inner cities then spread to other communities. Buyers, fearful of shortages, would clean out the shelves.

      Importantly, it’s the very unpredictability of food delivery that increases fear, creating panic and violence. And, again, none of the above is speculation; it’s a historical pattern – a reaction based upon human nature whenever systemic inflation occurs.

      Then … unfortunately … the cavalry arrives

      At that point, it would be very likely that the central government would step in and issue controls to the food industry that served political needs rather than business needs, greatly exacerbating the problem. Suppliers would be ordered to deliver to those neighbourhoods where the riots are the worst, even if those retailers are unable to pay. This would increase the number of closings of suppliers.

      Along the way, truckers would begin to refuse to enter troubled neighbourhoods, and the military might well be brought in to force deliveries to take place.

      But why worry about the above? After all, inflation is contained at present and, although governments fudge the numbers, the present level of inflation is not sufficient to create the above scenario, as it has in so many other countries.

      So, what would it take for the above to occur? Well, historically, it has always begun with excessive debt. We know that the debt level is now the highest it has ever been in world history. In addition, the stock and bond markets are in bubbles of historic proportions. They will most certainly pop.

      With a crash in the markets, deflation always follows as people try to unload assets to cover for their losses. The Federal Reserve (and other central banks) has stated that it will unquestionably print as much money as it takes to counter deflation. Unfortunately, inflation has a far greater effect on the price of commodities than assets. Therefore, the prices of commodities will rise dramatically, further squeezing the purchasing power of the consumer, thereby decreasing the likelihood that he will buy assets, even if they’re bargain priced. Therefore, asset holders will drop their prices repeatedly as they become more desperate. The Fed then prints more to counter the deeper deflation and we enter a period when deflation and inflation are increasing concurrently.

      Historically, when this point has been reached, no government has ever done the right thing. They have, instead, done the very opposite – keep printing. A by-product of this conundrum is reflected in the photo above. Food still exists, but retailers shut down because they cannot pay for goods. Suppliers shut down because they’re not receiving payments from retailers. Producers cut production because sales are plummeting.

      In every country that has passed through such a period, the government has eventually gotten out of the way and the free market has prevailed, re-energizing the industry and creating a return to normal. The question is not whether civilization will come to an end. (It will not.) The question is the liveability of a society that is experiencing a food crisis, as even the best of people are likely to panic and become a potential threat to anyone who is known to store a case of soup in his cellar.

      Fear of starvation is fundamentally different from other fears of shortages. Even good people panic. In such times, it’s advantageous to be living in a rural setting, as far from the centre of panic as possible. It’s also advantageous to store food in advance that will last for several months, if necessary. However, even these measures are no guarantee, as, today, modern highways and efficient cars make it easy for anyone to travel quickly to where the goods are. The ideal is to be prepared to sit out the crisis in a country that will be less likely to be impacted by dramatic inflation – where the likelihood of a food crisis is low and basic safety is more assured.

      *  *  *

      In the days ahead, there will likely be much less stability of any kind. With so many momentous events unfolding—including the crashing stock market, domestic political turmoil, rising tensions with China, a potential geopolitical shock in the Middle East, the coronavirus, and many others—it’s absolutely crucial to act right NOW. That’s precisely why, Doug Casey just released an urgent new report on how to can play your cards—both for prudence and profit. Click here for all the details.


      Tyler Durden

      Tue, 03/17/2020 – 22:30

    • Spring-Breakers Pack Florida & Texas Beaches As Pandemic Threatens Societal Collapse
      Spring-Breakers Pack Florida & Texas Beaches As Pandemic Threatens Societal Collapse

      Borders shut, markets in nose-dive, restaurants and bars closed in some major American cities, super market shelves empty, professional sports canceled, and even the Las Vegas Strip shuttered — and yet many beaches and bars which typically serve as popular Spring Break destinations are still packed with oblivious college students determined to party till the end.

      While yes it’s true that Miami Beach and Fort Lauderdale are closed, other water front areas across Florida as well as Texas and southern states are packed out with young revelers, many entering their second week of “extended” break given university closures across the US. 

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      Image source: ABC Action News

      The party will go on, undaunted by the deadly coronavirus pandemic that has seen much of the country grind to a halt, apparently.

      Previously in announcing temporary closures in his areas, Miami Beach Mayor Dan Gelber said, “We cannot become a petri dish for a very dangerous virus.” He declared: “Spring break is over. The party is over.”

      But clearly many other areas didn’t get the memo and witnessed an influx of bikini clad, beer guzzling partyers to their towns and beaches. 

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      “As cities and states across the country shutter bars, restaurants and other gathering places, Pinellas County plans to keep beaches open until state emergency officials request the popular destinations to close,” Tampa Bay Times reports.

      The scene just before Fort Lauderdale closed its beaches early this week:

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      And further, the report notes at a time that the White House and CDC has urged that gatherings should be limited to no more than ten people: 

      “We are minimizing interactions and encouraging people to keep social distance,” Pinellas County Administrator Barry Burton said Monday afternoon.

      Officials are monitoring the beaches to make sure crowds don’t swell. 

      Also Daytona Beach was determined to keep reservations and beaches open as of the start of the week. Scott Edwards, manager at Daytona Beach Welcome Center, said: “We’re holding our own this week, but next week does not look good.”

      Thus far it looks like local officials at many Spring Break destinations are actually on the side of the youthful and seemingly blasé beach revelers, with Pinellas County Sheriff Bob Gualtieri cited as saying that given the large-scale event cancellations and business closures, people are “going to need some sort of an outlet.”

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      Meanwhile it’s the same scene at what’s been dubbed the “Spring Break Mecca of southern Texas” – South Padre Island.

      This is where among the masses of carefree college students “the deadly coronavirus is barely an afterthought” — as Bloomberg describes:

      The tightly packed throng lingered for hours Thursday, soaking up the sun and other typical Spring Break fare, including bikini and push-up contests and free music shows, seemingly oblivious to the market upheaval and the warnings from health experts to practice social distancing.

      The previous day, as the World Health Organization declared the coronavirus a global pandemic, hundreds of them had partied for hours at a nearby nightclub where rapper Silento performed. And on Sunday, many headed to a massive pool party at a beachside resort.

      According to local reports, many town residents are increasingly outraged that events haven’t been canceled; instead, “students are coming here from the Midwest, Mid-Atlantic, the West Coast for several weeks.”

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      But in a move that appears too-little-too-late, South Padre as of late Monday issued a Local State of Disaster for the area, and while it cancelled remaining “large-stage events,” the beach and other major popular spots are reportedly still open. 

      Elsewhere around the country as colleges and universities canceled classes, many going to an on-line remote learning format for the rest of the semester, students treated the whole thing as a “snow day” – and flooded local bars. 

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      And this surreal scene played out on Bourbon street end of last week and into early this week…

      Reported journalist Darren Rovell: “3 p.m. Friday: Louisiana Gov. John Bel Edwards announces the closing of all schools for a month to help prevent the spread of the Coronavirus. 8 hours later…Bourbon Street.”

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      “Your actions are jeopardizing public health,” police bullhorns blared to drunk and oblivious should-to-should crowds at New Orleans’ most famous and historic party spot.

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      The brazen disregard for what’s happening all around them is perhaps driven by a widespread perception and media reports that younger and healthier individuals are much less likely to get seriously ill by Covid-19. 

      But given the rising rates of infection and even hospitalization among young adults in places like Italy, this is far from confirmed at this point, and of course misses the point altogether of community-wide efforts to contain to the spread. 


      Tyler Durden

      Tue, 03/17/2020 – 22:10

    • Oil Plunges To 17 Year Low As One Bank Predicts Negative Prices
      Oil Plunges To 17 Year Low As One Bank Predicts Negative Prices

      Late on Tuesday, WTI plunged as low as $26.20 taking out the lows from the 2015/2016 oil recession, and sending it to a level last seen when US president was George W. Bush, people were listening to Get Busy by Sean Paul and Dogville was one of the most popular movies: May 2003.

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      While there was no immediately clear catalyst, earlier in the day, Goldman’s commodities team published a report in which they discuss the need for commodity prices to drop below cash costs to generate supply curtailments as demand losses across the complex are now unprecedented, as Goldman now believes oil use is down an unprecedented 8 million b/d:

      Large commitments from core-OPEC for April/May deliveries pushes the net supply increase near c.3m b/d, which, when combined with the demand losses, results in an April/May surplus of 7mb/d, which will likely breach system capacity during 2Q20.

      As Goldman’s Jeffrey Currie wrote, “the system strain creates a physical end, even though when COVID-19 will end is unknown, pushing our forecasts to shut-in economics. We now forecast 3m GSCI -25%.” As a result of price wars in oil and gas and uncertain policy responses in bulks and base metals, all a direct result of the sharp fall in demand resulting from the COVID-19 containment measures, Goldman has cut its 2Q Brent price target to just $20/bbl from $30/bbl.

      But that was not the worst of it for what little is left of oil bulls.

      Outdoing not only Goldman, but virtually every single bearish oil analyst in existence, Mizuho’s Paul Sankey not only estimated that Goldman is too optimistic by half, calculating a whopping 15MM b/d in oversupply currently, but that crude prices could go negative – yes, as in you would be paid to take delivery – as Saudi and Russian barrels enter the market.

      According to Sankey, much of the US 4MM bpd in crude exports will be curtailed as prices fall and tanker rates soar. And with US storage roughly 50% full, and able to take another 135MM bbl more, assuming a build rate of 2MM b/d, the US can add 14MM bbl/week for 10 weeks until full. 

      As a result, there is a now race between filling storage and negative pricing “unless U.S. decline rates can outpace inventory builds, which we very much doubt.”

      Said otherwise, absent dramatic changes, in roughly 3 months, energy merchants will be paying you if you generously take a couple million barrels of crude off their hands.

      Which is why despite its low price, oil may still have at least 100% (or more) to drop.


      Tyler Durden

      Tue, 03/17/2020 – 22:06

    • Californians Calling Cops On Neighbors If They Hear Them Coughing
      Californians Calling Cops On Neighbors If They Hear Them Coughing

      Authored by Paul Joseph Watson via Summit News,

      Some Californians are calling 911 if they hear their neighbors loudly coughing or sneezing, with paramedics being dispatched to homes in some cases.

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      Yes, really.

      “Coachella Valley police departments say they’ve started fielding 911 reports from concerned callers convinced a neighbor’s overly loud sneeze or hacking cough is proof the person has the virus,” reports the Desert Sun.

      With millions of people across the state under a quarantine that mandates isolation except for essential travel, it appears as though some Californians are passing the time by grassing up their own neighbors to medical authorities.

      Instead of telling them to reserve 911 calls for emergencies only, police are actually responding by sending out paramedics to test the cougher and even remove them from their home.

      “In many cases, the calls are forwarded to the fire department where paramedics are also dispatched to directly provide any needed medical attention before transporting the person to an area hospital,” according to the report.

      “Presumably, the ride to the hospital is still voluntary for now, even in hyperstatist California. Or maybe they are setting up quarantine camps,” comments Dave Blount.

      There have been 486 confirmed cases of coronavirus in the state of California, which has a population of nearly 40 million. Six people have died.

      *  *  *

      My voice is being silenced by free speech-hating Silicon Valley behemoths who want me disappeared forever. It is CRUCIAL that you support me. Please sign up for the free newsletter here. Donate to me on SubscribeStar here. Support my sponsor – Turbo Force – a supercharged boost of clean energy without the comedown.


      Tyler Durden

      Tue, 03/17/2020 – 21:50

    • South Korean Church Infects 46 Parishioners After Spraying Salt Water In Their Mouths To Prevent The Virus
      South Korean Church Infects 46 Parishioners After Spraying Salt Water In Their Mouths To Prevent The Virus

      A South Korean church is doing its part in helping humanity take two giant steps backward in fighting the coronavirus.

      River Grace Community church in Gyeonggi Province, South Korea, told its parishioners that they could help stop the spread of the virus by spraying salt water into their mouths. But the church used a spray bottle that it didn’t disinfect between people and instead wound up spreading the virus to 46 different people, according to the South China Morning Post.

      Video out of the church shows a church official sticking the nozzle of the spray bottle deep into one person’s mouth after another. The pastor and his wife also became infected.

      Lee Hee-young, head of Gyeonggi Province’s coronavirus task force said: “It’s been confirmed that they put the nozzle of the spray bottle inside the mouth of a follower who was later confirmed as a patient, before they did likewise for other followers as well, without disinfecting the sprayer. This made it inevitable for the virus to spread. They did so out of the false belief that salt water kills the virus.”

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      The church has since closed and everyone who attended the prayer session is being tested.

      The new cases have motivated the South Korean government to work at identifying new clusters, especially in cities, even though it has slowed the virus in the country. 

      South Korea said on Monday it had 74 new cases, which bring’s the country’s total to 8,236. The number of new cases was below 100 for the second day in a row, showing that the country is making progress in blunting the blow of the virus. 

      Prime Minister Chung Sye Kyun said: “It is still too early to relax. The government will concentrate its efforts on preventing cluster infections.”

      Lee concluded: “We again call for proactive participation by churches in preventing further spread of the virus, including changes to their ways of worshipping.”

      Yeah. If you could go ahead and not physically remove the virus from one person’s mouth and place it into another’s. 

      That’d be great. 

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      Tyler Durden

      Tue, 03/17/2020 – 21:30

    • Fed Launches Primary Dealer Credit Facility Which Will Accept Stocks As Collateral
      Fed Launches Primary Dealer Credit Facility Which Will Accept Stocks As Collateral

      Earlier today, when discussing the launch of the “Lehman crisis playbook” in response to the Global Covid Crisis, we listed the alphabet soup of measures the Fed may launch which are a replica of the measures adopted in the aftermath of the Lehman collapse. These included the AMFL, the MMIFF, the TAF and last but not least, the PDCF, or Primary Dealer Credit Facility, which as Rabobank said “would provide overnight funding to primary dealers, similar to the way the discount window provides a backup source of funding for depository institutions.”

      Just three hours later, at 6pm ET, the Fed, as expected, announced the establishment of a Primary Dealer Credit Facility (PDCF) “to support the credit needs of households and businesses.” What the Fed really meant is that it is now launching a way for dealers to monetize the stocks they own, as the facility will be collateralized, among others, by “equity securities.”

      As the Fed announced, the PDCF “will offer overnight and term funding with maturities up to 90 days and will be available on March 20, 2020” and will be in place for at least six months and may be extended as conditions warrant.

      But here is the punchline:

      Credit extended to primary dealers under this facility may be collateralized by a broad range of investment grade debt securities, including commercial paper and municipal bonds, and a broad range of equity securities.

      This means that as of this moment, equities – which are worth zero in a worst case scenario – are eligible collateral for Fed liquidity.

      Here are some more details on the eligible collateral:

      Collateral eligible for pledge under the PDCF includes all collateral eligible for pledge in open market operations (OMO); plus investment grade corporate debt securities, international agency securities, commercial paper, municipal securities, mortgage-backed securities, and asset-backed securities; plus equity securities.

      Who will determine the value of the soon-to-be-bankrupt stocks pledged as collateral?

      The pledged collateral will be valued by Bank of New York Mellon according to a schedule designed to be similar to the margin schedule for lending by the Discount Window, to the extent possible.

      This means that dealers can now buy stocks at what are still massively overinflated valuations thanks to trillions in central bank liquidity, knowing they can then turn around and pledge them to the Fed at a collateral value that is determined after several rounds of single malt between the fund and some NY Mellon back-office lackey who will write down pretty much anything in exchange for a free dinner, and even if the stocks crashes the Fed will still assign whatever value BNY Mellon decides it is “worth”, basically giving the dealers not only a costless purchase but also a free put option!

      That said not all equities are eligible as collateral: “the following equities would not be eligible: exchange traded funds (ETFs), unit investment trusts, mutual funds, rights and warrants”

      For those who many not remember, the PDCF was one of the biggest bailout abortions of the financial crisis, one which we discussed extensively in describing how dealers abused the Fed as they pledged totally worthless stocks for which they got “par” value. For more see:

      We now look forward to Congress never asking Powell the only question that matters: how on earth are stocks “money good” securities and hard value collateral.

      We also look forward to the market asking just which Primary Dealer(s) is in such dire financial straits that it now needs what is effectively a bailout from the Fed (we have a few ideas).

      The 2-page term sheet of the PDCF is below (pdf link).


      Tyler Durden

      Tue, 03/17/2020 – 21:15

    • Market Bottom Indicators #2 – Financials To Utilities Ratio
      Market Bottom Indicators #2 – Financials To Utilities Ratio

      Submitted by Peter Garnry, head of equity strategy at Saxo Bank

      Summary: The current financials to utilities ratio has actually bounced off recent lows but given the recent volatility and bad liquidity in US Treasuries investors should be careful drawing conclusions just yet that the equity market has bottomed.

      This is our second turning point indicators research notes. In our first research note we looked at the VIX futures term structure and volatility markets can help indicate market bottoms. In this research note we look at the financials to utilities spread ratio. Why is this spread interesting and relevant?

      Financials and utilities are interesting against each other because both sectors are the most sensitive to changes and levels in interest rates, but importantly they react opposite to interest rates. Higher interest rates are negative for utilities as their long-term and very predictable cash flows get a lower present value. Financials gain from higher long-term interest rates as it steepens the yield curve and thus help banks expand their net interest margin improving profitability. Because these two sectors are so sensitive to interest rates but with the opposite force the spread ratio provides a very fast signal to investors from policy changes and their impact on interest rates and markets.

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      The current ratio is a bit higher than the recent bottom and could suggest a bottom in equities. However, with the extreme volatility and liquidity issues in the US Treasuries market we would be hesitant in drawing conclusions. A good sign would be to see an improvement in the volatility market. In the SaxoTraderGO the financials to utilities spread can be tracked by adding two instruments tracking the two sectors and then create a “Ratio” under the “Indicators” menu.

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      Tyler Durden

      Tue, 03/17/2020 – 21:10

    • Show Stopper: Alameda Sheriff Says Tesla "Not An Essential Business", Must Abide By County Lockdown Order
      Show Stopper: Alameda Sheriff Says Tesla “Not An Essential Business”, Must Abide By County Lockdown Order

      Update (2040ET): For those not following the story, Alameda County, where Tesla’s Fremont factory resides, has been on lockdown but for “essential businesses” due to the coronavirus outbreak.

      But rather than close Fremont (likely recognizing that companies who have already taken billions in subsidy money and burn billions more a year would not be on the short list for a government bailout) Elon Musk decided keep his doors open and keep production going in defiance of the order.

      Well, that party is now over.

      Tonight, the Alameda County sheriff has responded to Musk’s decision, warning them that:

      “Tesla is not an essential business as defined in the Alameda County Health Order.”

      The sheriff instead said the company can “maintain minimum basic operations per the Alameda County Health Order”, which basically means that the company can only maintain its inventory, ensure security and make payroll.

      It does not mean fire up the production line and have everyone come into work.

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      Tesla had argued earlier in the day that they were exempt from shutdowns because they are a “national critical infrastructure”.

      We’ll pause for laughter.

      Earlier in the day, according to Electrek, Tesla HR had e-mailed the following to its employees:

      “National Critical Infrastructure are business sectors crucial to the economic prosperity and continuity of the United States, and includes auto manufacturing and energy infrastructure as defined by the Department of Homeland Security. People need access to transportation and energy, and we are essential to providing it. We have also been in close communication with the State of California, Alameda County, and the City of Fremont, regarding the federal government’s guidance.”

      As a result, Tesla and our supplier network will continue operations that directly support factory production, vehicle deliveries, and service. If you work in these areas, you should continue to report to work, and if you don’t you should work from home until further notice.

      *  *  *

      We already know that Elon Musk thinks the coronavirus panic is “dumb”.

      We also know Tesla’s track record for keeping a safe work environment is less than stellar. 

      But apparently not satisfied unless his workers are directly in the line of harm, Elon Musk is once again creating a new set of rules for himself – just as he has done with the SEC and the NHTSA – and is defying an Alameda County coronavirus lockdown by keeping Tesla’s Fremont factory open and running in the midst of a global pandemic.

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      The quick spread of coronavirus in the Bay Area has led to lockdowns and the shuttering off all non-essential businesses. Businesses in Alameda County are required to “cease all non-essential operations” at physical locations there, according to Bloomberg. 

      Alameda County has declared Tesla an “essential business” that is allowed to remain in operation, the LA Times reports.

      When an Alameda County official was asked what makes Tesla “essential”, he responded: “That’s a good question. We’re in uncharted waters right now.”

      When short seller Nathan Anderson of Hindenburg Research e-mailed Alameda County last night, asking if Tesla would stay open, they punted, telling Anderson he had to direct his question to Tesla. So, it looks like we know who is really running Alameda County. 

      Musk apparently wrote to his staff in an e-mail Monday: “First, I’d like to be super clear that if you feel the slightest bit ill or even uncomfortable, please do not feel obligated to come to work. I will personally be at work, but that’s just me. Totally [OK] if you want to stay home for any reason.”

      He continued: “My frank opinion remains that the harm from the coronavirus panic far exceeds that of the virus itself. If there is a massive redirection of medical resources out of proportion to the danger, it will result in less available care to those with critical medical needs, which does not serve the greater good.”

       

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      Tyler Durden

      Tue, 03/17/2020 – 20:51

    • Washington Post Columnist Jennifer Rubin Says "There Will Be Less Democrat Deaths" Than Republican
      Washington Post Columnist Jennifer Rubin Says “There Will Be Less Democrat Deaths” Than Republican

      Washington Post columnist Jennifer Rubin says that more Republicans than Democrats will die from coronavirus due to misinformation by President Trump and Fox News, according to the Washington Times.

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      “There is a particular cruelty, irony that it is their core viewers, the Republican older viewers, who are the most at risk,” Rubin said during a Sunday morning discussion on MSNBC‘s “AM Joy.”

      Ms. Rubin credited the Democrats with being the first to cancel political rallies in the wake of the coronavirus outbreak, whereas Mr. Trump initially bucked the idea before canceling several rallies Wednesday. –Washington Times

      “So, I hate to put it this way, but there will be less Democrat deaths because there will be less mass gatherings, there will be less opportunities for people to congregate and share this horrible disease,” Rubin continued. “So it is really a very short-sighted strategy.”

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      Rubin, a self-described conservative, says that the biggest challenge will be getting Trump supporters “back on planet Earth,” after Fox News has been “brainwashing” them to believe that Trump has been proactive on coronavirus.

      ““They will contort themselves to kind of get in line and get in sync,” she said, adding “And, you know, we’re always saying ‘but, but, but,’ pointing to the past. They don’t. They simply move with the flow. Every day is a new day. Every day is a new storyline, and they’re gonna stick with it.”

      “I think the problem will be what happens unfortunately if we start to follow that Italian model where we have mass casualties, and our lives are not disrupted for a week or two, but we’re talking months,” she continued. “And that is going to be some serious stuff. And I don’t know if their brainwashing is so strong as to carry on and make excuses for Trump during that. But this is going to be some serious stuff.”


      Tyler Durden

      Tue, 03/17/2020 – 20:50

    • Biden Wins!?: Illinois News Station Airs Election Results Day Before Primary
      Biden Wins!?: Illinois News Station Airs Election Results Day Before Primary

      Update (2030ET): Surprise! AP is reporting that Joe Biden has won the Illinois Democratic Primary… just as WCIA reported… yesterday

      *  *  *

      An Illinois news station accidentally aired election day results on Monday showing former Vice President Joe Biden winning Tuesday‘s primary election.

      Station WCIA aired the results during a Monday showing of The Price Is Right, indicating Biden defeating Sen. Bernie Sanders (I-VT) by over 93,000 votes.

      “While watching The Price is Right our station accidentally runs tomorrow’s election results … its [sic] Monday our election in Illinois is tomorrow,” said Sherry Daughtery, who posted a video of the incident. 

      Station Bureau Chief Mark Maxwell said that it was nothing more than a “routine test” rehearsal, and that airing the dry run was an error, according to Breitbart News.

      We do routine test rehearsals before every election to make sure the graphics work properly and to give directors some practice. The error was in putting the dry run on air. That shouldn’t have happened and we’re looking into it. Obviously, we never intended to give the wrong information or wrong impression. None of those numbers were based on any real polling returns. Since your post is being widely shared, I’d appreciate it if you would consider updating the original post so people don’t get the wrong idea. -Mark Maxwell via Sherry Daughtery

       Why does this seem to happen just about every election?


      Tyler Durden

      Tue, 03/17/2020 – 20:26

    • Boeing Seeks "A Minimum $60 Billion" Govt Bailout After Fully Drawing-Down $13Bn Credit Line
      Boeing Seeks “A Minimum $60 Billion” Govt Bailout After Fully Drawing-Down $13Bn Credit Line

      Update (2000ET): Boeing – unsurprisingly – has issued a statement fully backing the idea of free money handouts from the government to save itself.

      We appreciate the support of the President and the Administration for the 2.5 million jobs and 17,000 suppliers that Boeing relies on to remain the number one US exporter, and we look forward to working with the Administration and Congress as they consider legislation and the appropriate policies.
       
      Boeing supports a minimum of $60 billion in access to public and private liquidity, including loan guarantees, for the aerospace manufacturing industry.  This will be one of the most important ways for airlines, airports, suppliers and manufacturers to bridge to recovery. Funds would support the health of the broader aviation industry, because much of any liquidity support to Boeing will be used for payments to suppliers to maintain the health of the supply chain. The long term outlook for the industry is still strong, but until global passenger traffic resumes to normal levels, these measures are needed to manage the pressure on the aviation sector and the economy as a whole.  
       
      We’re leveraging all our resources to sustain our operations and supply chain.  We continue to assess additional levers as we navigate the current challenges and position the industry for the long term. As reported last week, drawing on our delayed draw loan term was a prudent step to increase our liquidity and ease some of the significant near-term pressures on our business. We filed an 8-K today to formally disclose that draw down.

      The $80 billion market cap company may consider selling some stock before demanding that taxpayers foot the bill of its greed which translates into tens of billions in buybacks funded by tens of billions in debt.

      *  *  *

      A new disclosure on Tuesday afternoon details yet another troubling development for Boeing.

      In its latest 8K, the plunging planemaker has completely drawn down its $13.8 billion credit line that it entered in October 2018 as it “navigates current business challenges” exposing just how fast this company is burning through cash.

      “As of March 13, 2020, Boeing has fully drawn on the Credit Agreement, consisting of approximately $13.8 billion, which amount includes additional commitments made subsequent to the initial closing date.  

      For additional information on the terms and conditions of the Credit Agreement, see Boeing’s Current Report on Form 8-K dated February 6, 2020.

      We continue to have access to revolving credit agreements entered into on October 30, 2019, which have also been disclosed. These facilities, which to date have not been drawn upon, provide us with additional liquidity as we navigate the current business challenges. For additional information on these credit facilities, see Boeing’s Current Report on Form 8-K dated October 30, 2019.” 

      This comes just hours after sources told Reuters that Boeing is seeking a bailout of ‘tens of billions’ in US government loan guarantees amid the Covid-19 crisis.

      President Trump has already been on record telling airlines that his administration is prepared to pledge $50 billion in support after passenger activity has fallen off a cliff due to the virus scare.

      Boeing was struggling before the virus outbreak, dealing with 737 Max groundings, production halts, and cancellation orders.

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      Boeing shares have dropped 64% in the last 23 sessions.

      As we raged previously, this bailout demand comes after the company blew nearly $100 billion on  stock buybacks since 2013 helping push its stock to all-time highs not that long ago, and instead of selling stock to get liquidity, they’re asking the Trump administration for a massive bailout.

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      So, no, nobody in their right minds should give Boeing even one penny in “short term aid”. Instead, management and the board should be ordered to sell as much stock as they need – you know, the opposite of buying it back – to maintain the business, even it means sending the stock price crashing far lower.

      Because it’s called capitalism, and because there is no reason why taxpayers should foot the bill for a company which instead of saving cash when times were good, was handing it out to shareholders and a handful of executives, and which should now for some insane reason be eligible for a bailout when times suddenly go bad.

      No: force Boeing – and others like it that spent billions repurchasing its stock while incurring massive amounts of debt – to sell its stock. After all that’s what a public company’s stock is – a currency – and just as Boeing could repurchase it when it had cash, and lifted its stock price to all time highs, it should now sell its stock and use the proceeds to fund itself, like any other corporation does when it needs funding. Last time we checked, Boeing’s market cap was $73 billion, and it certainly afford to drop much more as the company now does the buyback in reverse.

      This is also a warning to Congress and the White House: if chronic stock repurchasers such as Boeing, are bailed out instead of ordered to find their own sources of liquidity, there will be a mutiny in America and rightfully so, because it was Boeing’s shareholders that got rich on the way up, and now it is somehow up to taxpayers to make sure the company, loaded up with record amounts of debt used to fund buybacks, survives one more quarter.

      That, in a word, is bullshit.


      Tyler Durden

      Tue, 03/17/2020 – 20:04

    • US Equity Futures Are Plunging… Again
      US Equity Futures Are Plunging… Again

      It is unclear what the immediate catalyst is this time – aside from the fact that we are now outside of the stock-trading-machines reach – but US equity futures are plunging in early Asia trading.

      Dow futures are down 650 points…

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      Erasing most of the day’s gains…

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      “…and suddenly millions of bailout-demanding voices cried out in terror and were suddenly silenced. I fear something terrible has happened.”

      Some have suggested that Treasury Secretary Mnuchin’s warning of 20% unemployment spooked some traders.

       


      Tyler Durden

      Tue, 03/17/2020 – 19:56

    Digest powered by RSS Digest

    Mar 17

    Today’s News 17th March 2020

    • UK Covid-19 Could Last Until Spring 2021 With Millions Hospitalized
      UK Covid-19 Could Last Until Spring 2021 With Millions Hospitalized

      A public health document viewed by The Guardian says the Covid-19 outbreak could last until spring 2021 and lead to millions hospitalized. 

      The secret document was written by the Public Health England (PHE) reveals the virus crisis could be sticking around for another 12 months and infect upwards as 80% of Britons over time.

      The document says that: “As many as 80% of the population are expected to be infected with Covid-19 in the next 12 months, and up to 15% (7.9 million people) may require hospitalisation.”

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      UK Covid-19 Cases And Deaths (as of March 15)  

      Chief Medical Officer Professor Chris Whitty recently said the worst-case scenario has modeled 80% of the population “are expected” to contract the virus.

      Paul Hunter, a professor of medicine at the University of East Anglia, told The Guardian that if the public were to hear that the virus would be disrupting their lives for one year, then they would be “really upset” and “pretty worried about that.” 

      “A year is entirely plausible. But that figure isn’t well appreciated or understood,” added Hunter. 

      “I think it will dip in the summer, towards the end of June, and come back in November, in the way that usual seasonal flu does. I think it will be around forever, but become less severe over time, as immunity builds up,” he added.

      As we noted Sunday, the UK likely missed the containment window to implement social distancing policies that would flatten the curve to slowdown infections, suggesting the country could see an exponential rise in Covid-19 cases over the next month, sort of like what’s happening in Italy at the moment. 

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      It’s becoming increasingly apparent that the military could be deployed to keep order at supermarkets, hospitals, and in the streets, as Britons could soon find out that virus disruptions may extend into early 2021. 


      Tyler Durden

      Tue, 03/17/2020 – 02:45

    • War Games, Covid-19, And NATO's Dis-jointed Flight Forward
      War Games, Covid-19, And NATO’s Dis-jointed Flight Forward

      Authored by Brian Gray via The Canadian Patriot,

      Presently NATO is in the initial stages of military operations called Defender-Europe 20. The 40,000 soldier strong war game exercise includes roughly 20,000 American troops and accompanying weaponry. This witnesses the largest deployment of US personnel in Europe since 1983 Operation Re-forger exercises in the height of the Cold War era. Dutifully, Canadian forces based in Latvia are poised to play their willing role in this exercise. Despite some amusing logistical glitches in Poland (no re-fuelling stations, no bivouac for US troops) Operation Defender is scheduled to run into June. There is some speculation that the contagion of the COVID-19 virus, much to the chagrin of the NATO brass, may cause some re-assessment of this operation.

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      So why exactly do the brain trusts of this British/US-led bully boy global army deem this silly stomping of boots and rattling of sabres necessary?

      Because of course… as the leaders of the desperate, morally and financially bankrupt so-called rules-based western liberal democracies and the lying legacy media have been shouting for the last two decades… that evil thug and dictator Vladimir Putin and his “Red Army” is intent on invading and conquering Europe and world domination.

      In a press service sidebar blurb found in sundry print media, according to NORAD commander US General Terrence O’Shaughnessy, Mad Vlad and his evil Kremlin cohorts have designs of military dominance of the arctic and thus “…an avenue through which Russia can quickly attack…” US targets.

      O’Shaughnessy should cause Irish folk everywhere to be embarrassed.

      In the initial stages of Defender 20 at the Strategic Command Centre in Nebraska, US Defence Sect. Esper participated in computer scenarios simulating nuclear exchanges between the U.S. and Russia.

      In statements made to the US Senate earlier this month, General Tod Wolters, the commander of US European Command and head of all NATO armed forces has fully embraced what he defined as a “flexible first strike” doctrine which exposes the US and allies’ “nuclear deterrence” policy a sham.

      When the commander of NATO makes such insane statements at the same time that NATO is flexing its military muscle on Russia’s border, the risk of inadvertent nuclear war is real.

      The Russian enclave of Kaliningrad is NATO’s main target. All economic, geopolitical and military policy that both Russia and China have adopted over the last two decades, have been a direct reaction to unwarranted and unjustified British/US/NATO aggression.

      In an interview on a Russian TV station Putin stated,

       “We are not going to fight against anyone. We are going to create conditions so that nobody wants to fight against us.”

      The YouTube video of Vladimir Putin’s comments made at the 2007 Munich Security Conference should be earnestly heeded.


      Tyler Durden

      Tue, 03/17/2020 – 02:00

    • Execs At Over 20 Companies Agree To Forfeit, Freeze, Or Cut Salaries Or Bonuses Amid Virus Fallout
      Execs At Over 20 Companies Agree To Forfeit, Freeze, Or Cut Salaries Or Bonuses Amid Virus Fallout

      Believe it or not, corporate executives are reportedly slashing some of their pay as a result of the coronavirus. 

      Despite what Elizabeth Warren and Bernie Sanders would have you believe about the rich, they apparently have at least some sympathy for other human beings: executives and boards at more than 20 companies agreed to cut, freeze or forfeit their salaries or bonuses in recent weeks.

      The companies include those who work in travel, airport baggage and jewelry sales, among others, according to Bloomberg. 

      Some cuts were made as part of broader cuts due to industries like travel collapsing – but other executives cut voluntarily as a show of solidarity with their employees. 

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      Michael Maslansky, CEO of communications advisory firm maslansky + partners said: “Whenever a CEO asks for concessions in times of financial strain, the first question is almost always: ‘Are you feeling the pain, too?’ The only way to make an employee-wide pay cut possible is if management leads by example.”

      The most prominent reductions have come from airlines. Thai airways said senior executives would surrender 25% of their salaries for 6 months. El Al Israel Airlines, Singapore Airlines, Air New Zealand, Australia’s Qantas Airways, U.K.-based Virgin Atlantic, Sweden’s SAS and Cebu Air have all followed suit. 

      United will see its top two executives give up their salaries until midyear and Southwest’s CEO will take a cut of 10%. Robin Hayes of JetBlue will surrender 20% of base pay. Delta’s CEO is also reportedly considering a reduction.

      The concessions won’t have a major impact on each company’s financials, nor will they have a profound impact for most executives’ quality of life. 

      Robin Ferracone, CEO of executive-compensation advisory firm Farient Advisors said: “Widespread cuts probably hurt people lower down in the organization more than the people at the top since a significant part of compensation at the top is comprised of incentives, which presumably are not cut.”

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      JetBlue’s Robin Hayes

      And it’s not just airlines feeling the pain. Singapore’s national post office will cut and freeze pay for upper lever managers and Hong Kong based jeweler Chow Tai Fook is making its directors take a 30% pay cut through April.

      Travel agencies in Australia, like Helloworld Travel, are following suit. Along with Webjet, they are cutting pay for their top executives as much as 30%. 

      Senior executives at two companies in Singapore that provide baggage handling and airport security are also taking cuts of up to 15%. 

      Anheuser-Busch InBev CEO Carlos Brito was denied a bonus in the second half of 2019 due to coronavirus zapping the company’s profit growth. He commented: “If you own a bakery and don’t make any money one year, you don’t get a bonus — this is the same thing. After a bad year, that’s when you see leaders rising to the occasion.”

      Maslansky conlcuded: “CEOs are acutely aware of how the market and public react to their peers. So when the first one goes, others quickly follow.”


      Tyler Durden

      Tue, 03/17/2020 – 01:00

    • Event 201 Unfolds: Covid-19 Action Platform = Global Government
      Event 201 Unfolds: Covid-19 Action Platform = Global Government

      In late January we noted Event 201’s significance: 

      Only three months ago, John Hopkins, the Bill and Melinda Gates Foundation and the World Economic Forum (a hive of self-professed globalists) ran a “pandemic simulation” called “Event 201” specifically focused on Coronavirus.  Not Ebola, or Swine Flu or even Avian Flu – but CORONAVIRUS.  The simulation features the spread of coronavirus in South America, blamed on animal to human transmission (pigs).  The conclusion of the exercise was that national governments were nowhere near ready, scoring 40 out of 100 on their preparedness scale.  The simulation projected over 65 million deaths worldwide.

      Event 201 played out almost exactly as it has been in China today.  Some very disingenuous or perhaps rather stupid people have been arguing that this kind of thing is “normal”, claiming that we are “lucky” that the elites have been running simulations in advance in order to “save us” from a coronavirus outbreak.  I assert that Event 201 was not a simulation but a war-game to study the possible outcomes of an event the globalists already knew was coming.  Set aside the fact that before almost every major crisis event and terrorist attack for the past few decades authorities were running simulations for that exact event right before it happened; does anyone really believe that Event 201 is pure coincidence?

      And warned that while it was still hard to say with certainty, this appears to be the “black swan” that the globalists were waiting for (or planning) all along. 

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      In the discussion below, Derrick Broze discusses a recent announcement by the World Health Organization, the U.S. Food and Drug Administration, the U.S. Centers for Disease Prevention and Control regarding the Event 201 pandemic exercise and the new COVID Action Platform. What does this mean for liberty?

      But what do globalists have to gain directly from a coronavirus pandemic beyond simple chaos that can be exploited?

      As Max Parry asks and answers below, is the global pandemic a product of the elites’ Mathusian agenda and US biowarfare?

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      On March 11th, the World Health Organization (WHO) officially declared the ongoing outbreak of the coronavirus disease (COVID-19) to be a global pandemic, the first since the H1N1 swine flu in 2009. Initially reported in the city of Wuhan in Central China in December, just four months later there are now over 150,000 cases in more than 130 countries which has put many on total lockdown while the world economy has been brought to a virtual standstill. While the People’s Republic of China was the first country to report COVID-19, there has been a widespread presumption that the coronavirus (SARS-CoV-2) must have emerged in the capital of Hubei province that has not been held under sufficient scrutiny by Western corporate media.

      The question of whether the COVID-19 coronavirus could have come from the U.S. army was controversially raised by China’s Foreign Ministry spokesman, Liljian Zhao, who tweeted an article from the Center for Research on Globalization website which subsequently went viral. Feigning concern over the spread of “disinformation”, Western media coverage uniformly avoided sourcing the article Zhao had shared on social media while predictably dismissing the claim as a “conspiracy theory.” Meanwhile, Iran’s Civil Defense Chief also said the coronavirus could be a biological attack on China and Iran, as the Islamic Republic has been the third-most impacted nation with more than 12,000 cases including many at the highest levels of its government with multiple senior officials infected. Contrary to such mainstream media scaremongering, it is completely reasonable and should be permitted to speculate about the origins of the virus. That Zhao’s posing of the theory received such a hostile response from the U.S. establishment is telling of how delicate their propaganda echo chamber is.

      ‬Although the disease is widely assumed to have been first transmitted through zoonosis because the earliest grouping of cases were linked to a Wuhan seafood market trading exotic wildlife in late December, the actual first known case was traced to the beginning of the month and may not have been originally passed through an animal. Many on the political right have even suggested the coronavirus is an effect of Chinese biological warfare which unexpectedly leaked from a lab in Wuhan, a theory disseminated in the pages of propaganda rags like The Washington Times, a newspaper owned by the founder of the right-wing Korean Unification Church cult, Sun Myung Moon, as well as The Epoch Times of the similarly fascistic religious sect of Chinese expatriates, the CIA-linked Falun Gong. In spite of that, it is true that the Wuhan Institute of Virology has close ties to the Galveston National Laboratory in the University of Texas, one of the Pentagon’s largest biological defense lab programs. Whereas no evidence exists that the Chinese government is responsible for COVID-19, nor does the PRC have a history of engaging in bio-warfare, there is an abundance of proof that the U.S. government has long been involved in the manufacturing and use of biological weapons since the Korean war.

      When the accusations were first made by North Korea and China that the U.S. was using biological and germ warfare in the 1950–1953 Korean War, they were rejected outright by Washington as a hoax and rebuffed by the Western-biased WHO. In the decades since, the U.S. has maintained its denial while scholarly debate on the subject is divided. However, an unredacted report from 1952 from an investigation sponsored by the World Peace Council and conducted by an International Scientific Commission headed by Sir Joseph Needham, a highly reputable British biochemist of his era, was unearthed in 2018 and presents ample substantiation of the allegations, including eyewitness testimony, photographic evidence and documented confessions by American POWs. More disturbingly, the investigation indicates direct links between the U.S. biological warfare program and the germ warfare program of Unit 731, a clandestine bio and chemical warfare unit of Imperial Japan during World War II. During the Cold War, the Japanese researchers were secretly given immunity and recruited by the U.S. in exchange for their knowledge in human experimentation, along with many “former” Nazi scientists in Operation Paperclip.

      Unit 731 of the Japanese Imperial Army collected data not only through performing deadly experiments on humans but environmentally testing “plague bombs” by dropping them on Chinese cities to see whether they could start disease outbreaks. Many of these tactics were continued by the U.S. in the Korean War. According to Stephen Kinzer, journalist and author of Poisoner in Chief: Sidney Gottlieb and the CIA Search for Mind Control, the CIA’s Project MK-ULTRA which was coordinated with the U.S. Army Biological Warfare Laboratories was:

      “…Essentially a continuation of work that began in Japanese and Nazi concentration camps. Not only was it roughly based on those experiments, but the CIA actually hired the vivisectionists and the torturers who had worked in Japan and in Nazi concentration camps to come and explain what they had found out so that we could build on their research.”

      Frank Olson , one of the biowarfare scientists and CIA employees in the program who died under mysterious circumstances in 1953, is the subject of the Netflix docu-drama series Wormwood, directed by Errol Morris and featuring renowned journalist Seymour Hersh, which reveals Olson may have been a potential government whistleblower on the CIA’s activities and U.S. bio-war crimes. It is worth noting that the usage of such agents in the Korean War included Chinese targets, the last and only major armed conflict between the U.S. and China, so if the COVID-19 pandemic were proven to be a product of U.S. biowarfare against Beijing, it would not be the first time.

      Officially, the U.S. is said to have abandoned its bioweapons program in 1969, but its installation in Fort Detrick, Maryland, has continued conducting research into deadly pathogens and viruses on the stated purpose of bio-defense, as well as fighting disease outbreaks, developing vaccines, and other public health concerns. Yet just last year, research into fatal viruses and bioweapons were suspended amid concerns they could be accidentally be released. The last time Fort Detrick’s germ warfare research was suspended was in 2009 after the Pentagon found discrepancies in the inventory of its infectious agents, the same year as the last pandemic of the H1N1 swine flu outbreak.

      Fort Detrick has been under tighter restrictions since the 2001 anthrax attacks were traced to Bruce Ivins, a senior biodefense researcher at the facility. The suspected perpetrator and army biologist committed suicide in 2008 after learning the FBI was going to charge him with terrorism, which if proven to be true would mean that the Pentagon’s own biodefense research itself had led to rather than protected the American public from bioterrorism — though there is plenty of evidence suggesting Ivins was framed by the feds. As journalist Whitney Webb uncovered, the U.S. Army’s Medical Research branch headquartered in Maryland has cooperated with the Wuhan Institute of Virology mentioned previously for decades.

      Toying around with organisms that can produce disease is a regular practice for the Pentagon. In 2005, U.S. scientists announced that they had even successfully recreated the avian influenza flu virus in a lab which killed at least 50 million people worldwide in 1918, widely known as the ‘Spanish flu.’ The name is actually a misnomer, as it was disproportionately attributed to Spain which was neutral in World War I and was not subject to the same wartime censorship of the press to upkeep morale like in Germany, the UK, France and the U.S. whose media initially underreported the pandemic’s effects in their respective countries. The geographic source of the Spanish flu is still the subject of much debate, but the first observation of the disease was at a U.S. military installation in Fort Riley, Kansas in 1918. Needless to say, the risks involved with resurrecting a disease that wiped out more than a quarter of the world’s population are not trivial, but this did not prevent the U.S. Armed Forces Institute of Pathology from extracting the genetic coding of the Spanish flu from the exhumed corpse of a Native Alaskan woman frozen in the ground who died of the disease in an Inuit town in 1918.

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      Soldiers ill with the Spanish flu at Fort Riley, Kansas, in 1918

      There is no direct evidence showing that the 2009 swine flu said to have originated in Mexico through zoonosis from pigs was any leak of the restored Spanish flu, but the previous swine flu outbreak of 1976 began at a U.S. army base in Fort Dix, New Jersey, just like the Spanish flu of 1918. After the Gerald R. Ford administration jumped the gun and announced a flu epidemic was pending following the death of a single soldier, a subsequent mass immunization program without proper testing for side effects was administered to a staggering 45 million people, exactly a quarter of the entire U.S. population at the time, which ended up killing more Americans than the disease itself. The scandal forever sowed the seeds of public distrust regarding inoculation after more than 450 people developed Guillain-Barré Syndrome and 25 died from the immunization before it was halted.

      If such a mandatory vaccination program were to be implemented again in the U.S. for COVID-19, the government would have to reassure the public its previous negligence of such side effects would not be repeated, an unlikely scenario after the corporate breach of trust exposed on Wall Street in recent years involving large pharmaceutical firms. Regardless, Big Pharma is already partnering with the U.S. army to develop a vaccine for the coronavirus which would have to be tested and evaluated before licensing by the Food and Drug Administration (FDA) and recommended for use by the Centers for Disease Control and Prevention (CDC), both of which partner with the WHO whose largest financial contributor is the U.S. government.

      One of the WHO’s other largest benefactors is the Bill and Melinda Gates Foundation with whom it has a partnership on vaccinations. The billionaire Microsoft Corporation founder has used his enormous wealth to dodge paying taxes under the guise of philanthropy and his ‘charitable’ private ventures have mostly focused on producing vaccines for developing countries and purportedly tackling global poverty, especially in Africa. On the surface this may appear to be benevolent work, but like many so-called altruistic projects it is a scheme which allows ultra-wealthy plutocrats like Gates to influence global policy and obtain political power with no accountability by investing in “fixing” the social problems caused by the very system which made them rich, with the expansion of neoliberalism as their real agenda. The consequences of this can be seen with charitable projects involving Gates in the Congo which forced its local agribusiness into using GMO seeds which only benefited private companies like Monsanto.

      More disturbing is that in regards to environmental concerns about man-made climate change, Gates has made public his views on curbing human population growth as a solution. At a 2010 TED Conference, Gates stated:

      “First we got population. The world today has 6.8 billion people. That’s headed up to about 9 billion. Now if we do a really great job on new vaccines, health care, reproductive health services, we lower that by perhaps 10 or 15 percent.”

      To put it another way, one of the world’s wealthiest men admitted in public he believes vaccines should be used for depopulation, just as he is financially investing in both developing and delivering them to countries in the global south. The misanthropic myth of ‘overpopulation’ pushed by Gates and the elite not only suggests that depopulation is a solution for slowing the warming of the climate but retains the logic of an essential component of eugenics with the implicit idea that the quality of life for the human species can be improved by discouraging human reproduction. Since developing countries have the highest child mortality rates, families are more likely to be larger because children are less likely to survive. Hence, the inherent racism and classism in such a misconception.

      Given that the vast majority of carbon emissions are produced by a short list of fossil fuel companies and the world’s largest polluter is the U.S. military, promoting this dangerous fallacy is the perfect way for the ruling elite to shift the responsibility for climate change onto the world’s poor. Unfortunately, this dangerous falsehood has been popularized in the mainstream environmental movement and pseudo-left with examples such as BirthStrike, a group of mostly female activists protesting the lack of regulations on the ecological crisis by refusing to bear children that has been irresponsibly endorsed by popular “progressive” politicians such as U.S. Congresswoman Alexandria Ocasio-Cortez (D-NY). ‘AOC’ is also the face of the Democratic Party’s Green New Deal which has troubling ties to the United Nations Agenda 21 sustainable development program that calls for “achieving a more sustainable population.”

      The false notion of “overpopulation” became a misguided cornerstone of the modern day environmental movement thanks to the publication of German scientist Paul Ehrlich’s best-selling book The Population Bomb in 1968 , an alarmist diatribe that has in the years since become famous for its inaccurate doomsday predictions as a result of the mistaken belief which never came to fruition. Today’s doom merchants regarding the climate, no doubt a serious issue, are in many respects channeling Ehrlich’s false prophecies which are considered a modern rehash of the influential 18th century British economist and philosopher, Thomas Malthus. No single scholar was more loathed by Karl Marx and and the working class movement than Malthus, whose pseudo-scientific theories about demography were thought to have been intellectually defeated until they found new life in Ehrlich’s eco-fascism. As much as today’s ‘population bombers’ like Bill Gates may shun the more explicitly racist Malthusian ideas that the global north should contain the population of developing countries, they still tacitly endorse them by arguing that the size of the population itself is a source a poverty and climate change.

      Bill Gates has cited business tycoon John D. Rockefeller, the richest man in American history who had an even greater monopoly on the oil business as Gates had at one time on the computer industry, as an inspiration in using his wealth to invest in medical research as a focus of his philanthropy. However, Gates has something else in common with the Rockefeller family in his views on population, as the Rockefeller Foundation was the single largest donor to the American eugenics movement in the 1920s and 30s and helped establish its German branch, even subsidizing the Kaiser Wilhelm Institute of Anthropology, Human Heredity, and Eugenics that Nazi physician Josef Mengele worked in prior to his wartime experiments. Despite the fact that a line can be traced from the American eugenics movement to the Nazi regime’s programs, which Nuremberg defendants even tried to use as justification for their atrocities in court, Rockefeller’s grandson John Rockefeller III continued the family legacy of interest in demography with the founding of the Population Council NGO which conducts research in “reproductive health” (sterilization) in developing countries. The Nazi government was also the first to ever pass legislation safeguarding the environment which they equated with German national identity, another unexpected intersection between brown and green politics.

      In an astonishing coincidence, the Gates Foundation hosted an event just last October with the Johns Hopkins Center for Health Security and the World Economic Forum called Event 201, a pandemic simulation which gathered elite figures in government, business and health expertise to plan for the possibility of a worldwide outbreak. Gates himself has warned of pandemics for years and ominously wrote that the world should “prepare for epidemics the way the military prepares for war.” The Event 201 fictional scenario just so happened to be a coronavirus called CAPS from Brazilian pigs which infected people globally and after a year and half in the exercise caused tens of millions of deaths and set off a worldwide financial crash. Since the outset of the real COVID-19 coronavirus, Gates himself has stepped down from Microsoft to focus on his philanthropy while his foundation is busy working on a vaccine.

      Many have observed that some characteristics of COVID-19 bear a resemblance to HIV that could not have happened organically. The recent documentary Cold Case Hammarskjöld, which won an award at last year’s Sundance film festival , puts forth a chilling theory that a South African white supremacist organization deliberately spread HIV/AIDS among black Africans through vaccines in previous decades. The film begins as an investigation of the mysterious plane crash in Northern Rhodesia which killed Swedish diplomat and United Nations Secretary General Dag Hammarskjöld in 1961. In 1998, a document authored by a shadowy paramilitary organization called the South African Institute for Maritime Research (SAIMR) was uncovered by the Truth and Reconciliation Commission justice assembly in post-apartheid South Africa which indicated that Hammarskjöld was the victim of an assassination. Not only do the filmmakers discover in their inquiry the distinct likelihood that the plane was shot down by a Belgian mercenary employed by SAIMR which was operating under orders from MI6 and the CIA, but the more stunning revelation is a recorded confessionfrom a former SAIMR soldier to having deliberately spread HIV/AIDS to black Africans through immunization. If what is claimed about SAIMR is true and that they were connected with Western intelligence, that the COVID-19 virus could be something deliberately spread is not outside the realm of possibility.

      Maybe it will prove to be the case that the yellow press’s version of the coronavirus beginning with the zoonotic transfer of the disease after the consumption of a pangolin or wild bat by a ‘patient zero’ in Wuhan is accurate. Nevertheless, the pandemic should be a chilling reminder of the elite’s eco-fascist agenda and the continuous danger that the military-industrial complex puts the world’s population in by continuing to conduct dangerous research into deadly pathogens where the risk vastly outweighs the benefits. If the outbreak has led many to be suspicious of the official story, it is exactly because of the history of U.S. biological warfare and the elite’s potentially genocidal and pessimistic worldview that the only way to prevent the demise of humanity is by thinning the herd.


      Tyler Durden

      Mon, 03/16/2020 – 23:50

    • "I Apologize" – Money Managers Sorry For Losing Clients' Money Amid Brazilian Bloodbath
      “I Apologize” – Money Managers Sorry For Losing Clients’ Money Amid Brazilian Bloodbath

      While American asset-gatherers and commission-rakers were busy demanding investors ‘buy the dip for the long-term’ this week as each leg down just went further down (until Friday, of course), Brazilian money-managers were a little more frank with their clients.

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      Although US markets were a bloodbath, Brazil was worse with shocking moves intraday – including a high to low drop of 20% on Thursday – leaving a trail of red in Brazil’s fund industry.

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      And, as Bloomberg reports, the best-performing money managers are reeling after the nation’s markets were especially hard hit by the global selloff. Some took to social media to try to appease anxious investors.

      One apologized outright:

      “Unfortunately, we were unable to defend ourselves from this fall like we did in 2015, or in the drawdowns of 2016 or in May 2018 and in other moments,” Joao Braga, co-head of equities at XP Asset Management tweeted on Wednesday.

      “I apologize and we will work hard to recover.”

      He has some apologizing to do as the XP Long Biased fund is suffering its worst monthly loss since its 2013 inception, down 30% through March 11, according to data compiled by Bloomberg. The fund, with about 2 billion reais ($425 million) under management, still has the best five-year return among 100 peers.

      Another discussed his sleep patterns:

      Alaska Asset Management’s Henrique Bredda and Luiz Alves Paes de Barros took to social media to explain their losses. Their Alaska Black Master fund, one of the nation’s best performers, is down 43% year to date through March 11. Barros says moments of massive stress can take a toll on how much he sleeps, but so far he’s fine.

      “I’ve been sleeping like a prince,“ he said.

      “I wake up very satisfied willing to start buying.“

      And a last manager admitted his mistakes and promised to do better:

      After posting a return of 155% in 2019 – more than three times its peers’ average – Logos Capital posted a 51% loss this year through March 11. Assets have dropped to about 170 million reais from a peak of 333.7 million reais in early January.

      “Moments like this have happened to us before and we usually manage to recover,” Luiz Guerra, the Sao Paulo-based chief investment officer at Logos Capital, said in an interview, saying the firm also made a mistake with banking stocks, which it scrapped, and is now focusing on utilities, telecom companies and exporters.

      This humility in the face of collapse should be worth more than the permabull BTFD hubris of every other talking head on business media.


      Tyler Durden

      Mon, 03/16/2020 – 23:30

    • Central Banking Is Socialism
      Central Banking Is Socialism

      Authored by Ron Paul via The Ron Paul Institute for Peace & Prosperity,

      Last week, the Federal Reserve responded to Wall Street’s coronavirus panic with an “emergency” interest rate cut. This emergency cut failed to revive the stock market, leading to predictions that the Fed will again cut rates later this month.

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      More rate cuts would drive interest rates to near, or even below, zero. Lowering interest rates punishes people for saving, thus encouraging consumers and businesses to spend every penny they make. This may give the economy a short-term boost. But, it inhibits long-term economic growth by depleting the savings necessary for investments in businesses and jobs. The result of this policy will be more pressure on the Fed to indefinitely maintain low interest rates and on the Congress and president to create another explosion of government “stimulus” spending.

      Boston Federal Reserve President Eric Rosengren has suggested that Congress allow the Federal Reserve to add assets of private companies to the Fed’s already large balance sheet. Allowing the central bank to buy assets of, and thus assume a partial ownership interest in, private companies would give the Federal Reserve even greater influence over the economy. It could also allow the Fed to advance a political agenda by, for example, favoring investment in “green energy” companies over other companies or refusing to purchase assets of retailers who sell firearms or tobacco products.

      Mr. Rosengren’s proposal to allow the central bank to “invest,” in private companies seems like something one would hear from democratic socialists like Senator Bernie Sanders. This is not surprising since the entire Federal Reserve system is a textbook example of socialism.

      The essence of socialist economics is government allocation of resources either by seizing direct control of the “means of production” or by setting prices business can charge. Federal Reserve manipulation of interest rates is an attempt to set the price of money. Federal Reserve attempts to set interest rates distort the signals sent by the rates to investors and business. This results in a Fed-created boom, which is inevitably followed by a Fed-created bust.

      Economic elites benefit when the Federal Reserve pumps new money into the economy because they have access to the money created before there are widespread price increases. Artificially low interest rates also facilitate the growth of the welfare-warfare state.

      The Federal Reserve’s inflationary policies harm the average American by eroding the dollar’s purchasing power. This forces consumers to rely on credit cards and other forms of debt to maintain their standard of living. Many Americans are unable to afford their own homes because they are saddled with student loan debt that can even exceed their income.

      Since the bailouts of 2008, there has been a growing understanding that the current system is rigged in favor of the elites and against the average American. Unfortunately, popular confusion of our system of Keynesian neoliberalism with a free-market economy, combined with a widespread entitlement mentality, has led many Americans to support increasing government control of our economy.

      The key to beating back the rising support for socialism on both the left and right is helping more people understand that big government and central banking are the cause of their problems and that free markets in all areas – and especially in money — is the solution. It is important that the liberty movement put pressure on Congress to cut spending and rein in or, better yet, end the Fed.


      Tyler Durden

      Mon, 03/16/2020 – 23:10

    • Here Come The Mass Layoffs: New York Unemployment Site Goes Down After "Tens Of Thousands" Lose Their Jobs
      Here Come The Mass Layoffs: New York Unemployment Site Goes Down After “Tens Of Thousands” Lose Their Jobs

      In many ways the US economy is currently in the eye of the coronavirus storm: cities and states are under quarantine lockdown, the CDC has prohibited any groupings of more than 50 people; stores, clubs, restaurants, bars and hotels are voluntarily shuttering indefinitely as the economy grinds to a halt and yet besides a tapestry of ghost cities across the nation, the immediate impact of the devastating viral storm on the service economy has yet to manifest itself.

      But the hurricane is about to hit front and center, and the service-industry mecca of New York City is leading the way.

      As the Daily News reports, New York’s unemployment website was overwhelmed Monday as the coronavirus pandemic put tens of thousands of people across the state out of work.

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      Screenshot of crashed Department of Labor website

      The flood of suddenly jobless workers hitting the Department of Labor website with applications for unemployment benefits was unleashed by a drastic move by Gov. Cuomo, who announced all of the state’s restaurants, bars, movie theaters, gyms and casinos would close by 8 p.m. Monday to contain the corona outbreak.

      So many people tried to apply that the website crashed several times throughout the day, while the DOL’s hotline was so jammed up that callers seeking aid could not get through to someone who could handle their claim.

      The unemployed can apply from 7:30 a.m. to 5 p.m. on weekdays. DOL spokeswoman Deanna Cohen said the department saw a “spike in volume comparable to post 9/11,” adding there are more than 700 staffers assigned to handle the high demand.

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      Gabe Friedman, a drag queen who performs under the name Kiki Ball-Change

      “I’m completely unable to log in and apply” said 26-year-old Gabe Friedman, a drag queen who performs under the name Kiki Ball-Change. “Me and so many other drag queens are completely out of work for at least two months. If I pay rent at the end of April, I would be broke.”

      It’s not just the drag queens that find themselves with zero demand for their unique “skills”: tens of thousands of workers across New York’s service industries have already been, or are about to be let go as their employers are forced to either shut down permanently or hibernate until the economy recovers.

      The DOL on Sunday waived a seven-day waiting period on unemployment benefits for people out of work due to coronavirus — but that concession proved to be moot as many people could not apply at all.

      Rita Lee, 57, who works in the film industry (hopefully not as a drag king), said she started to apply Sunday night after movie productions shut down across the city. She hit a wall once applications opened Monday.

      From 11 a.m. to 3 p.m. Lee tried and failed to apply on the website, saying she kept “getting either a system or server error message, or the page will never load.”

      “I’ve called all the toll-free numbers, which are recordings that redirect you to a main menu or a message saying that all the operators are overloaded now and to call back,” said Lee. “Can’t reach a human to help.”

      David Stollings, a sound engineer at a now-shuttered Broadway theater, called the situation a doozy. “I got the site to load once,” said Stollings. “Before this it was just not loading at all.”

      Marnia Halasa, a Manhattan-based figure skating coach, said she was also unable to apply and became worried about paying rent. “What if I have to blow the New York popsicle joint and run back to Ohio to live with my father?,” asked Halasa, who’s lived in the city for 28 years.

      * * *

      While it is not clear how many New Yorkers will lose their jobs due to the pandemic, Empire Center founder E.J. McMahon told the NYDN the hit could be worse than the Great Recession of the late 2000s when roughly 370,000 people lost their jobs in a more than two-year span.

      “The website crashed, that’s evidence that there has never been anything like this so quickly,” said McMahon. “You can fix a computer glitch. But I don’t think the problem is how the safety net operates. I think the problem is how the economy operates in the future for all these people.”

      Incidentally, the chief economist of a multi-billion macro hedge fund advised us that they are now modeling approximately 10 million job losses over the next two to three months. We leave it up to readers to decide if that’s too little, too much or just right.


      Tyler Durden

      Mon, 03/16/2020 – 22:50

    • Watch: CBS Argues That Any Term With The Word "Black" In It Is Racist
      Watch: CBS Argues That Any Term With The Word “Black” In It Is Racist

      Authored by Steve Watson via Summit News,

      CBS News wants to reeducate America on how racist everyone is by policing their language and making them understand that the country’s founding fathers were really awful bigots.

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      That’s the overriding message that emerged from a Tuesday segment on This Morning where the anchors and their guests attempted to convince viewers that everyday terms with zero racial context are proof of how “the roots of racism” are deeply embedded in the US.

      The segment promoted a new book aimed at children titled ‘Stamped From the Beginning: The Definitive History of Racist Ideas in America’, by CBS News contributor Ibram X. Kendi and co-author Jason Reynolds.

      Anchor Tony Dokoupil announced that “Many headlines referred to the stock market plunge yesterday as ‘Black Monday,’ and that is just one of the subtle and not-so-subtle ways that racism has been braided into our everyday culture.”

      Co-host Anthony Mason then listed more terms with the word ‘black’ in them, ridiculously suggesting that they are all really racist.

      “Terms like ‘Black Monday,’ ‘Black Sheep,’ can be freighted with a negative connotation that sometimes we don’t even realize.” he said, with the other co-host Michelle Miller chiming in that the terms are “baked into the vocabulary.”

      A graphic (see picture above) then appeared on screen “Words With Negative Connotations: Black Monday, Black Sheep, Blackballing, Blackmail, Blacklisting.”

      “Yeah, and I don’t think we even realize when you have a skin color and regular color and we’re connoting both in a negative fashion. There are relationships between the two and I think we have to break not only the relationship, but those negative connotations.” Kendi suggested.

      Miller had earlier argued that children need to be reeducated about how racist the founding fathers were, saying that there are “so many misconceptions and truly lies throughout the history of what children are taught about their history.”

      “I hate to put it that directly, but, you know, when you go back and you look at people like a Thomas Jefferson, George Washington, these founding fathers who were so revered, how do you re-teach that?” she worried.

      So, just to summarise, even saying the word ‘black’ is now racist, terms that have no racial context, and refer specifically to the colour black are racist, and children need to be re-educated about how racist everyone is.


      Tyler Durden

      Mon, 03/16/2020 – 22:30

    • Netanyahu Gives Himself Broad Phone Tapping Powers To Fight "Invisible Enemy" Coronavirus
      Netanyahu Gives Himself Broad Phone Tapping Powers To Fight “Invisible Enemy” Coronavirus

      Over the weekend we noted with alarm that the Israeli government under Prime Minister Benjamin Netanyahu is now tapping counter-terror forces and technology to fight the “invisible enemy” of the coronavorus – as Netanyahu put it in a Saturday address.

      “We will very soon begin using technology… digital means that we have been using in order to fight terrorism,” Netanyahu had said. Among these new “emergency measures” include broader domestic phone tapping powers as part of the counter-terror technology initiative, as AP reports: 

      Netanyahu’s Cabinet on Sunday authorized the Shin Bet security agency to use its phone-snooping tactics on coronavirus patients, an official confirmed, despite concerns from civil-liberties advocates that the practice would raise serious privacy issues. The official spoke on condition of anonymity pending an official announcement.

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      Via Reuters: Netanyahu called coronavirus the “invisible enemy that must be located.”

      Ironically enough the outbreak scare has emboldened Netanyahu to admit that much of his plan will “entail a certain degree of violation of privacy.” This extreme overstep action comes as Israel has reached over 200 confirmed Covid-19 cases and has thousands in mandated quarantine. 

      The technology, which according to the prime minister has “never been used on civilians” – a highly doubtful claim – will help track an infected person’s history of past interactions as well as current whereabouts, ensuring they don’t break isolation, according to the plan.

      “They are not minor measures. They entail a certain degree of violation of the privacy of those same people, who we will check to see whom they came into contact with while sick and what preceded that. This is an effective tool for locating the virus,” Netanyahu said.

      Well at the very least he was honest about taking Israeli society down the road of Orwellian police state in the name of “protection” from the pandemic. However, we would note that it’s the first we’ve heard of a country openly touting its counter-terror technology and domestic spying as being used to fight the virus, with the exception of China.

      Netanyahu said these are “means that until today I have refrained from using among the civilian population.”

      https://platform.twitter.com/widgets.js

      In a clear understatement, yet deeply disturbing nonetheless, one opposition party leader from Meretz party, Nitzan Horowitz noted that tracking citizens “using databases and sophisticated technological means are liable to result in a severe violation of privacy and basic civil liberties.” 

      Meanwhile, former US special forces soldier and now journalist Jack Murphy put it more bluntly: 

      Once these “emergency measures” are implemented, they will never ever be repealed. 

      Likely soon to come to your country, and a neighborhood near you.


      Tyler Durden

      Mon, 03/16/2020 – 22:10

    • Coronavirus Bill Stalls As GOP Lawmakers Demand Corrections, Transparency
      Coronavirus Bill Stalls As GOP Lawmakers Demand Corrections, Transparency

      House Democrats’ coronavirus package which was passed on Saturday has become a point of contention, as Republican lawmakers continue to pick apart the bill negotiated between Treasury Secretary Steven Mnuchin and Speaker Nancy Pelosi which garnered a late endorsement from President Trump, according to The Hill.

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      The bill faces two primary hurdles. First, technical changes had to be dealt with between House Democratic leadership and the White House – which they had hoped to have hammered out on Monday to no avail.

      Second, with House lawmakers on a vacation of indefinite length over coronavirus concerns, any agreement will need to clear the house by consent – which isn’t guaranteed at this point. 

      Republicans have also demanded more transparency, with Rep. Louie Gohmert (R-TX) insisting that the technical corrections be read on the House floor before he’ll let it move to the upper chamber, according to House aides on both sides of the aisle.

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      “He’s concerned and wants all of the changes to be made public before the vote,” one GOP aide told The Hill.

      If Gohmert isn’t satisfied, he could stall the revamped House coronavirus bill until Pelosi is able to bring the chamber back to Washington to vote a second time.

      “I cannot in good conscience give my consent to something that has not been finished or made available to members of Congress before it is up for a vote,” Gohmert told CNN about the holdup.

      The measure, which passed 363-40 on Saturday, includes provisions that would ensure some workers can take paid sick or family leave, bolster unemployment insurance, and guarantee that all Americans can get free diagnostic testing for the coronavirus. –The Hill

      GOP Senators have criticized the bill for not doing enough to protect small businesses, or help struggling Americans cover short-term costs while the coronavirus epidemic takes a toll on the economy.

      “I and a lot of the other senators who I’ve spoken to over the weekend are worried that we’re not doing enough to get cash in the hands of affected workers and families quickly, so we’re going to be focused this week on how to do just that,” Sen. Tom Cotton (R-Arkansas) told Fox News in a Monday interview.

      Sen. Ron Johnson (R-Wisconsin) also pushed back against the House bill during a Monday interview with Wisconsin radio station WTMJ, according to The Hill. “Nancy Pelosi is going to make businesses give paid leave when people aren’t working. The businesses are going to pay for that.”

      Sen. Marco Rubio (R-FL) also signaled opposition, saying he wants to insert additional protections for small businesses into the House bill.

      Another potential roadblock was removed on Monday after Senate GOP leaders cut a deal to extend three USA Freedom Act provisions for 77 days, along with allowing a handful of amendment votes once they adopt the deal passed by the House last week.

      The House bill pairs an extension of the intelligence programs with certain changes to the court created by the Foreign Intelligence Surveillance Act (FISA). Recall this is the same court which the Obama FBI tricked into granting a surveillance warrant on a Trump adviser during the 2016 US election, only to issue slaps on the wrist all around and carry on with business as usual.

      “We’re working on trying to process both of these measures. Those discussions have been underway over the weekend, and we’re hoping to move with dispatch on both the House-passed bill, once we get it, and some way to move forward with the FISA issue as well,” Senate Majority Leader Mitch McConnell told reporters.

      Senators have urged leadership to agree to a short-term extension so they can turn their immediate attention to the coronavirus legislation.

      Senators in both parties had urged leadership to agree to a short-term extension so they can focus on the coronavirus package.

      “The FISA program can also be extended with Senator [Mike] Lee’s [R-Utah] proposal for a 45-day extension and future consideration of the House bill with six amendment votes. That could all be done by [unanimous consent] as well. Given this pandemic, time is of the essence and we should not delay,” Sen. Dick Durbin (D-Ill.) said in a statement.

      Sen. Mark Warner (D-Va.), the vice chairman of the Senate Intelligence Committee, indicated that he could support a short-term extension.

      “If the alternative is staying dark, I’ll take an extension,” Warner said. 

      Sen. Josh Hawley (R-Mo.) added that the FISA program needs broader reviews and that the Senate should instead pivot to the coronavirus legislation.

      “FISA needs to be carefully reviewed. That takes time. That can wait. The emergency response to #coronavirus should be the first order of business in the Senate tomorrow. There is no reason for this to take days & days,” Hawley tweeted on Sunday. –The Hill

      McConnell faces greater pressure from within his own party over the coronavirus legislation – as any amendments would mean the bill is bounced back to the House, which is now on the aforementioned indefinite break.


      Tyler Durden

      Mon, 03/16/2020 – 21:50

    • McDonald's Closes Dining Rooms, Play Areas To Protect Customers From Covid-19
      McDonald’s Closes Dining Rooms, Play Areas To Protect Customers From Covid-19

      Even after President Trump explicitly said he was not asking restaurants to close, though many have as state and local officials bar large gatherings and – in some cases – explicitly order restaurants, bars, gyms, venues etc. to close, McDonald’s has apparently decided to stay “ahead of the curve” by closing the dining and play areas of its company-owned restaurants, and strongly encouraging its franchisees to do the same, CBS 2 Chicago reports.

      Many readers might not realize it, but McDonald’s dining rooms serve an important function in society: they provide a gathering place for people who have nowhere else to go, or are living on a fixed income. Retirees often congregate in McDonald’s restaurants in the US, and homeless people often depend on McDonald’s for myriad reasons, most of which we’d rather not get into, though you can read more about that here.

      For these reasons, Micky D’s dining rooms are often referred to as a “poor man’s lounge”, or a “crossroads of humanity.”

      Perhaps because so many of McDonald’s most loyal customers are elderly or poor (both high risk groups), the company’s decision is understandable. In a statement, it said protecting customers’ safety is the company’s “highest priority.”

      “Ensuring the health and safety of our people and our communities is our highest priority as the United States quickly mobilizes to slow the spread of COVID-19. Our decisions are guided by expert local and national health authority guidance. Additionally, we are complying with all local and state restaurant restrictions, where applicable,” the company announced in a news release on Monday.

      Another reason for the decision: most of the company’s directly-owned restaurants are in Illinois (McDoanld’s corporate headquarters relocated to Chicago a few years back from nearby Oak Brook), they will need to comply with Gov. JB Pritzker’s order to close all restaurants and bars in the state at the end of business.

      In addition to the dining area, the company is closing all beverage and service kiosks. Restaurants will continue to serve food through drive-through windows, walk-in take-out, and McDelivery through Uber Eats.

      “We believe this temporary change is the right decision for our consumers, our communities, and our business and will continue to evaluate our operations as the situation evolves,” the company said in a statement.

      McDonald’s franchisees are being “strongly encouraged” to do the same, and the company says it expects “most” to follow suit.

      “Franchisee leadership completely supports the decision to adhere to social distancing guidelines and ensure that large groups of customers are not gathered together inside our restaurants. We are committed to our role in supporting the communities in which we do business and protecting the public’s health by shifting our operations to Drive-Thru, walk-in take-out and McDelivery,” said Mark Salebra, National Franchisee Leadership Alliance Chair for McDonald’s

      McDonald’s employs 517,000 people in a full or part time capacity in the US, most of whom will not receive benefits – though its corporate employees and restaurant managers typically receive benefits including PTO and sick pay).


      Tyler Durden

      Mon, 03/16/2020 – 21:30

    • Nasdaq, Dow, S&P Futures Surge Limit-Up, Erasing Trump Presser Melt-down
      Nasdaq, Dow, S&P Futures Surge Limit-Up, Erasing Trump Presser Melt-down

      Another overnight session that reverses trend entirely from the day session… and another limit-up futures halt…

      Nasdaq futures are limit-up… once again…

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      S&P futures are limit-up…

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      And for context, Dow futures (are limit-up) have erased the late-day melt-down during Trump’s presser, up almost 1000 off the lows…

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      Tyler Durden

      Mon, 03/16/2020 – 21:26

    • Oregon Police: 'Don't Call 911 Just Because You Ran Out Of Toilet Paper'
      Oregon Police: ‘Don’t Call 911 Just Because You Ran Out Of Toilet Paper’

      In an almost hard to believe story which proves people are taking the “shit hit the fan” description of the current state of things way too literally, an Oregon police department had to warn people in a public announcement against calling 911 because they were out of toilet paper.

      “It’s hard to believe that we even have to post this,” police in Newport, Oregon stated in an official Facebook message. “Do not call 9-1-1 just because you ran out of toilet paper. You will survive without our assistance.”

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      The national phenomena of panic-buying toilet paper is the one thing in all of this that makes least sense, unless perhaps given that markets are in nose-dive — and who knows if currencies could be next down the line — people are viewing TP as the next currency of the post-apocalypse, giving new meaning to ‘dirty money’. 

      The Newport police statement urged people to “Be resourceful. Be patient. There is a TP shortage. This too shall pass. Just don’t call 9-1-1. We cannot bring you toilet paper.” And it went so far as to offer ideas as using grocery store receipts, torn magazine pages, cotton balls, and even corn cobs as apparently the Mayans and some among Colonial Americans did. 

      “History offers many other options for you in your time of need if you cannot find a roll of your favorite soft, ultra plush two-ply citrus scented tissue,” the department wrote. 

      The local police department posted the below after apparently receiving multiple 911 calls:

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      Meanwhile, it seems as much of the nation settles in for a possibly lengthy self-isolation mode, Facebook and other social media sites have been inundated by a deluge of toilet paper hording memes.

      This is so much so that mainstream media has begun reporting on the accompanying meme craze, noting that their consistent message is: “Go urgently and buy toilet paper. Don’t worry how much you need, buy as much as you can.”

      https://platform.twitter.com/widgets.js

      Of course, given stores like HEB and Kroger have begun cutting back on hours, and as more cities declare states of emergencies, with San Francisco and the Bay area issuing a ‘shelter in place’ emergency on Monday, we could soon see a situation where the very places selling the valuable TP simply shut down.

      https://platform.twitter.com/widgets.js

      And then those who didn’t stock up could be shit out of luck.


      Tyler Durden

      Mon, 03/16/2020 – 21:10

    • Is The Bottom Finally In: Bridgewater Puts On $14 Billion Short
      Is The Bottom Finally In: Bridgewater Puts On $14 Billion Short

      2020 has been a bizarre year: not only did stocks finally crash after the longest and most artificial “bull market” in history, sending an entire generation of clueless traders who had never seen more than a 10% correction puking into their toilet paper-free bathrooms as the Fed finally ran out of ammo to artificially prop up markets, but the metaphorical demise of Dennis Gartman meant a replacement had to be found for the market’s biggest counter-indicator, and how refreshingly surreal is it that the new Gartman turned out to be none other than Ray “Cash is Trash” Dalio.

      You see, back in late January when stocks were melting up to new record highs every single day, Ray Dalio speaking from the Coronavirus-free billionaire boondoggle of Davos, put on his best momentum extrapolation hat on, and predicted that “cash is trash.”

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      Little did Dalio know that just a few months earlier some Chinaman had bitten off the head of a typhoid bat, in the process setting off the apocalypse, and as the world literally ground to a halt amid a cascade of sovereign quarantines, global stocks suffered their biggest crash since Black Monday.

      It got so bad that Dalio’s own macro fund suffered its worst start to a year in history, losing an epic 20%  in just a few weeks (we are still waiting for confirmation that the Bridgewater risk parity fund still exists). Speaking to the FT, as if compelled to explain why his performance was so dismal to the general public, Dalio said “we did not know how to navigate the virus and chose not to because we didn’t think we had an edge in trading it. So, we stayed in our positions and in retrospect we should have cut all risk. We’re disappointed because we should have made money rather than lost money in this move the way we did in 2008.“

      And while Dalio didn’t specify “in what terms” he should have made money, just like that the new Dennis Gartman was not only born but baptized in blood, er bat.

      Which is great new for all the bulls who have just suffered through the most painful three weeks of their careers, because if Dalio is indeed the new Gartman, his turning bearish would mean the bottom is in… which according to media reports, that’s just what the billionaire Bridgewater founder is now. Bloomberg writes that Dalio – perhaps disgusted from seeing his reputation sink to the level of a newsletter author – has built up a $14 billion short position in European companies, expecting they will “continue to sink amid the worsening coronavirus outbreak.”

      According to the report, Bridgewater has made a string of wagers-against stocks in countries from Germany to Italy, according to filings between March 9 and 12 compiled by Bloomberg. They include a $1 billion bet against software company SAP SE and a $715 million wager against semiconductor equipment maker ASML Holding NV, with France and Germany at the top, responsible for roughly $5 billion in short positions each.

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      And while the value of Bridgewater’s European shorts has been rising this month as European stocks – well, really all stocks – got crushed, it appears the fund still has more than an offsetting amount of longs as the fund already lost about 12% in just the first two weeks of March.

      Naturally, it’s not clear whether the bet is an outright wager on a fall in shares or part of a broader hedging strategy of the firm that manages about $160 billion. Ironically, a similar report published by the WSJ last November suggesting Dalio had developed a “bearish view on the stock market”, was met with harsh criticism by Dalio and a barrage of petulant LinkedIn posts. Ironically, if only Dalio had been bearish, he would be on top of the world now instead of being the butt of watercooler jokes about cash somehow being trash at a time when the Fed just backstopped or injected over $6 trillion in, drumroll, cash.

      However suggesting that this time Dalio was indeed bearish was his latest LinkedIn post in which he said that the Fed’s decision to cut rates to almost zero puts the markets in an even more precarious position.

      “Long-term interest rates hitting the hard 0% floor means that virtually all asset classes go down because the positive effects of interest rates falling won’t exist (at least not much).”

      “Hitting this 0% floor also means that virtually all the reserve country central banks’ interest rate stimulation tools (including cutting them and yield curve guidance) won’t work.”

      So yeah, it looks like Dalio has indeed gone to the dark side which in this bizarro world, in which the founder of the world’s (formerly) biggest hedge funds is now also the market’s most reliable contrarian indicator, is probably the best news the steamrolled bulls could hope for.

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      Tyler Durden

      Mon, 03/16/2020 – 20:52

    • Boeing, Which Repurchased Over $100BN In Stock, Is Downgraded To BBB, Seeks "Short-Term" Bailout
      Boeing, Which Repurchased Over $100BN In Stock, Is Downgraded To BBB, Seeks “Short-Term” Bailout

      Just hours after S&P took the machete to Exxon’s long standing AA+ credit rating, moments ago the rating agency went after the company which until just a few weeks ago seems invincible, and whose stock price has crashed from $350 to $130 in a little over a month after it announced it was fully drawing down its revolver: Boeing.

      S&P cut Boeing’s credit rating by two notches late on Monday, to BBB from A-, as its “cash flows for the next two years are going to be much weaker than we had expected, due to the 737 MAX grounding, resulting in worse credit ratios than we had forecast.” In addition, S&P notes, “the significant reduction in global air travel due to the coronavirus will likely result in an increase in aircraft order deferrals, further pressuring cash flows.”

      And worst of all, Boeing will likely be downgraded again, as S&P kept it on Credit Watch negative, meaning it may be just a matter of time before Boeing is downgraded to junk, making it the world’s most iconic fallen angel.

      More details from the downgrade:

      Cash flow and credit ratios will likely be much weaker than we had expected for the next two years.   We now expect free cash flow to be an outflow of $11 billion-$12 billion in 2020 and an inflow of $13 billion-$14 billion in 2021. This compares to our previous expectation of positive $2 billion in 2020 and $22 billion in 2021.

      The significant difference is due to an absence of MAX predelivery payments (PDP) into 2021, higher and more front-loaded cash compensation to airlines, additional cash costs related to the production halt (including supplier support), and lower MAX production rates and deliveries than previously expected.

      We are also now expecting weaker cash flow from the rest of the business due to cuts to 787 production (including lower PDPs), delays to the first 777-9 delivery, and lower cash flows at the defense and aftermarket segments.

      This results in higher debt levels in 2020 (with balance sheet debt peaking at more than $46 billion, including the debt from the Embraer joint venture) and a weaker improvement in 2021, with funds from operations (FFO) to debt in 2020 now likely to be only about 5% (previous expectation was 29%) and about 30% in 2021 (previous expectation was 75%). This forecast remains highly uncertain with the potential for increased downside from the coronavirus.

      Why is S&P really taking this draconian action, which could topple one of the beacons of US manufacturing into junk status? Simple: in the past two years, Boeing feasted on cheap debt, doubling its debt load in one year.

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      But wait there’s more.

      Just a few days after drawing down on its revolver, Bloomberg reported moments ago that Boeing is now also seeking “short-term aid” in talks with the White House and lawmakers; in other words a “bailout.”

      • *BOEING SEEKS SHORT-TERM AID IN TALKS W/WHITE HOUSE, LAWMAKERS
      • *BOEING AID WOULD BE FOR ITSELF, SUPPLIERS, AIRLINES AMID VIRUS
      • *BOEING TRYING TO AVOID LAYOFFS, SUPPLIER MELTDOWN

      Some more details from Boeing:

      Boeing Co. has asked White House and Congressional officials for short-term aid for itself, suppliers and airlines as the outlook for the travel industry worsens by the day, said people familiar with the matter.

      The U.S. planemaker is seeking to avoid layoffs and damage to hundreds of smaller companies that make parts and systems for its aircraft, said the people, who asked not to be named because the talks are private. Boeing has also been buffeted by the grounding of its best-selling 737 Max, which awaits regulatory clearance to resume flights after two deadly crashes.

      We have one small problem with that: while Boeing was perfectly happy to load up on as much debt as it could over the past decade, the bulk of the proceeds was used for none other than enriching its shareholders and management, with zero consideration for those same employees and suppliers that the company suddenly cares so much about now. And Boeing certainly didn’t care about its passengers when it cut every corner it could find, to design the 737 MAX as cheaply as possible, a plane that was “designed by clowns, who are in turn supervised by monkeys“, even if it meant the airplane would become a deathtrap.

      As the chart below shows, Boeing has repurchased over $100 billion in stocks since 2013, helping push its stock to all-time highs not that long ago.

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      So, no, nobody in their right minds should give Boeing even one penny in “short term aid”. Instead, management and the board should be ordered to sell as much stock as they need – you know, the opposite of buying it back – to maintain the business, even it means sending the stock price crashing far lower.

      Because it’s called capitalism, and because there is no reason why taxpayers should foot the bill for a company which instead of saving cash when times were good, was handing it out to shareholders and a handful of executives, and which should now for some insane reason be eligible for a bailout when times suddenly go bad.

      No: force Boeing – and others like it that spent billions repurchasing its stock while incurring massive amounts of debt – to sell its stock. After all that’s what a public company’s stock is – a currency – and just as Boeing could repurchase it when it had cash, and lifted its stock price to all time highs, it should now sell its stock and use the proceeds to fund itself, like any other corporation does when it needs funding. Last time we checked, Boeing’s market cap was $73 billion, and it certainly afford to drop much more as the company now does the buyback in reverse.

      This is also a warning to Congress and the White House: if chronic stock repurchasers such as Boeing, are bailed out instead of ordered to find their own sources of liquidity, there will be a mutiny in America and rightfully so, because it was Boeing’s shareholders that got rich on the way up, and now it is somehow up to taxpayers to make sure the company, loaded up with record amounts of debt used to fund buybacks, survives one more quarter.

      That, in a word, is bullshit.


      Tyler Durden

      Mon, 03/16/2020 – 20:45

    • The World Must Not Forget The Fight For The Saudi Crown Amid Virus Panic
      The World Must Not Forget The Fight For The Saudi Crown Amid Virus Panic

      Authored by Patrick Cockburn via The Independent,

      The fear caused by the coronavirus outbreak is greater than that provoked by a serious war because everybody is in the front line and everybody knows that they are a potential casualty. The best parallel is the terror felt by people facing occupation by a hostile foreign army; even if, in the present case, the invader comes in the form of a minuscule virus.

      The political consequences of the Covid-19 pandemic are already vast because its advance, and the desperate measures taken to combat it, entirely dominate the news agenda and will go on doing so for the foreseeable future, although it is in the nature of this unprecedented event that nothing can be foreseen.

      History has not come to a full stop because of the virus, however: crucial events go on happening, even if they are being ignored by people wholly absorbed by the struggle for survival in the face of a new disease. Many of these unrecognised but very real crises are taking place in the Middle East, the arena where great powers traditionally stage confrontations fought out by their local proxies.

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      Top of the list of critical new conflicts that have been overshadowed by the pandemic is the battle for the throne of Saudi Arabia: Crown Prince Mohammed bin Salman (MbS), whose dwindling band of admirers describe him as “mercurial”, this month launched a sort of palace coup by arresting his uncle, Prince Ahmed bin Abdulaziz, and his cousin, Prince Mohammed bin Nayef, whom he displaced as crown prince in 2017.

      The new purge of close relatives by MbS may be motivated by his wish to eliminate any potential rivals for the crown who might step forward upon the death of King Salman, his 84-year-old father. This need to settle the royal succession has become more urgent in the past few weeks because the US presidential election in November might see the crown prince lose an essential ally: Donald Trump, a man who has become increasingly discredited by his shambolic response to Covid-19, and who faces Joe Biden’s emergence as the likely Democratic candidate for the presidency.

      Trump has been a vital prop for MbS, standing by him despite his role in starting an unwinnable war in Yemen in 2015 and his alleged responsibility for the gruesome murder of Saudi journalist Jamal Khashoggi in Istanbul in 2018. MbS has denied personal involvement in the killing, but told PBS last year: “It happened under my watch. I get all the responsibility, because it happened under my watch.”

      The record of misjudgements by MbS after he established himself as the de facto ruler of Saudi Arabia five years ago makes Inspector Clouseau seem like a strategist of Napoleonic stature by comparison. Every one of his initiatives at home and abroad has stalled or failed, from the endless and calamitous war in Yemen to the escalating confrontation with Iran that culminated in Tehran’s drone and missile attack on Saudi oil facilities last September.

      The latest gamble by MbS is to break with Russia and flood the market with Saudi crude oil just as world demand is collapsing because of the pandemic’s economic impact. In living memory in the Middle East, only Saddam Hussein displayed a similar combination of hubris and erratic performance that inspired disastrous ventures such as the Iraqi invasion of Iran in 1980 and of Kuwait in 1990.

      I once asked a Russian diplomat knowledgeable about the workings of the Iraqi ruler’s inner circle why none of his senior lieutenants, some of whom were intelligent and well informed, had warned him against taking such idiotic decisions. “Because the only safe thing to do in those circles was to be 10 per cent tougher than the boss,” explained the diplomat. MbS reportedly shows similar impatience towards anybody critical of the latest cunning plan.

      When it comes to the oil price war, the likelihood is that the Kremlin will have thought this through and Riyadh will not. Russian financial reserves are high and its reliance on imports less than during the last price conflict five years ago between the two biggest oil exporters. Inevitably, all the oil states in the Middle East are going to be destabilised, Iraq being a prime example because of its complete reliance on oil revenues. Iran, suffering from the worst outbreak of Covid-19 in the region, was already staggering under the impact of US sanctions.

      In time, the Russians may overplay their hand in the region – as all foreign players appear to do when over-encouraged by temporary successes. For the moment, however, they are doing nicely: in Syria, the Russian-backed offensive of President Assad’s forces has squeezed the rebel enclave in Idlib without Turkey, despite all the belligerent threats of President Erdogan, being able to do much about it.

      These developments might have provoked a stronger international reaction two months ago, but they are now treated as irrelevant sideshows by countries bracing themselves for the onset of the pandemic. It is easy to forget that only 10 weeks ago, the US and Iran were teetering on the edge of all-out war after the Iranian general Qassem Soleimani was assassinated at Baghdad airport in a US drone strike. After ritualistic Iranian retaliation against two US bases, both sides de-escalated their rhetoric and their actions. Rather than drastically changing course, however, the Iranians were probably re-evaluating their strategy of pinprick guerrilla attacks by proxies on the US and its allies: this week, the US accused an Iranian-backed paramilitary group of firing rockets at an American base north of Baghdad, killing two Americans and one Briton. Iran has evidently decided that it can once again take the risk of harassing US forces.

      Covid-19 is already changing political calculations in the Middle East and the rest of the world: a second term for President Trump looks much less likely than it did in February. The election of Biden, an archetypal member of the Washington establishment, might not change things much for the better, but it would restore a degree of normality.

      Trump’s foreign policy in the Middle East and elsewhere has always been less innovative in practice than his supporters and critics have claimed. Often, in Iraq and Afghanistan, it was surprisingly similar to that of Barack Obama. The biggest difference was Trump’s abandonment of the nuclear deal with Iran, but even there Trump relied on the “maximum pressure” of economic sanctions to compel the Iranians to negotiate. For all Trump’s bombast and jingoism, he has never actually started a war.

      However, this is now changing in a way that nobody could have predicted, because in its political impact the pandemic is very like a war. The political landscape is being transformed everywhere by this modern version of the Great Plague. By failing to respond coherently to the threat and blaming foreigners for its spread, Trump is visibly self-isolating the US and undermining the hegemonic role it has played since the Second World War. Even if Biden is elected as the next president, the US will have lost its undisputed primacy in a post-pandemic world.


      Tyler Durden

      Mon, 03/16/2020 – 20:30

    • Global Deaths From Covid-19 Pass 7,000; Silicon Valley Shuts Down: Virus Updates
      Global Deaths From Covid-19 Pass 7,000; Silicon Valley Shuts Down: Virus Updates

      Summary:

      • Australia prepares 2nd stimulus package
      • Canada closes borders to foreign travelers
      • New York State closes schools for 2 weeks
      • Dutch PM says experts believe ‘most’ citizens will catch virus
      • House leaders postpone return to Washington ‘indefinitely’
      • US airports seek $10B in gov’t assistance, per CNN
      • Trump tweets US will “powerfully support” industries life airlines
      • MLB opening day ‘indefinitely delayed’
      • New Jersey reports 80% jump in cases
      • Italy reports another 3,233 cases, 349 deaths
      • France orders people to stay home for 15 days
      • CDC says employee has tested positive
      • EU finance ministers announce ‘coordinated fiscal response’ worth 1% of GDP
      • White House releases new ‘national guidelines’ to stop virus
      • San Francisco earmarks $10M for those who miss work due to outbreak
      • El Salvador and Mexico spar over flight out of Mexico City:
      • Maryland governor bars utilities for turning off service for non payment
      • Barr tells American prosecutors to crack down on any virus-related fraud:
      • SF mayor orders residents to shelter in place beginning at midnight
      • 6 Bay Area counties to issue ‘shelter in place’ order
      • Actor Idris Elba tests positive
      • WH conference set for 3:30pmET
      • G-7 releases communique about ‘coordinated’ virus response
      • Trump tells governors to try and get their own respirators
      • Washington State shuts down bars, restaurants for 2 weeks
      • McDonald’s closes dining areas at company owned restaurants, asks franchisees to do the same
      • First cases confirmed in Tanzania, Somalia
      • Ohio requests to delay primary until June 2
      • Russia ‘limits’ entry of foreigners
      • Roche starts shipment of 400,000 tests
      • UK reports 18 new deaths, asks citizens to avoid all non-essential contact and travel, but avoids public closures
      • S&P cuts Boeing’s credit rating 2 notches
      • Chile tightens borders, bans foreigners from entry
      • Kudlow teases helicopter money; Romney pushes plan to hand every US adult $1,000
      • Cuomo warns US might not succeed in flattening the curve enough
      • Lombardy reports smallest jump in new cases since beginning of outbreak
      • Greenland reports first case
      • Google’s virus website booked up on first day of operation
      • Moscow bans all events with more than 50 people
      • Top Iranian cleric dies
      • Germany closes restaurants, bars, gyms and nightclubs until further notice.
      • EU Commission bars “non-EU citizens” from entering the area, but refuses to cave on internal controls
      • NY, NJ, Conn bar large gatherings
      • Israel mulls national lockdown

      *  *  *

      Update (2030ET): Testing began on Monday for the first Covid-19 vaccine human trial in the US. The NIH has been fast-tracking work with biotech company Moderna to develop a vaccine using the genetic sequence of the new coronavirus. Other trials are also ongoing, including one run by Gilead in Wuhan.

      Meanwhile, the Trump Administration can finally confirm some good news about its supply of tests, which it has been promising to swiftly ramp up to more than 1 million.

      Roche, the Swiss drug company that is one of several companies working with the administration to increase the supply of tests, has started shipping tests to labs across the US.

      • ROCHE STARTS SHIPMENTS OF COVID-19 TESTS TO LABS ACROSS U.S.
      • ROCHE BEGINS SHIPMENTS OF FIRST 400,000 COVID-19 TESTS TO LABS
      • ROCHE: PLANS TO SHIP AN ADDED 400,000 TESTS PER WEEK
      • ROCHE: SHIPPING OF INITIAL 400,000 TEST KITS BEGAN MARCH 13

      *  *  *

      Update (2000ET): There have been a few more notable Covid-19 related developments as we move into Monday evening and US futures lurch higher, according to the FT.

      Barr tells American prosecutors to crack down on any virus-related fraud:

      Prosecutors have been ordered to prosecute sellers of fake cures and online fraudsters who target vulnerable and unsuspecting internet users with promises of information about the virus.

      S&P cuts Boeing’s credit rating 2 notches

      S&P cuts Boeing’s credit rating two notches. The big new problem looming for Boeing is the fact that the coronavirus’s impact on airlines (putting them out of business) could impact deliveries, especially now that the company’s order flow has been delayed, and many sales contracts offer outs for airlines in financial distress.

      El Salvador and Mexico spar over flight out of Mexico City:

      The coronavirus ‘nightmare at sea’ almost became a ‘nightmare in the sky’. An Avianca flight due to depart Mexico City bound for El Salvador was cancelled after the president of El Salvador, the smallest country in Latin America, tweeted that it was not welcome because of 12 passengers who had purportedly been confirmed positive for Covid-19. Mexican diplomats denied this, and said the source of the president’s information was unclear.

      Meanwhile, down in Florida, college students aren’t letting some stupid virus get in the way of spring break. Quarantine? OK, Boomer.

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      *  *  *

      Update (1910ET): Seeming to confirm reports that the airlines are in talks with the government about a bailout (just like the shale drillers, Boeing, gig economy workers…) President Trump tweeted that the US would “powerfully support” American industry like the airlines through the outbreak.

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      Liberal critics will undoubtedly take umbrage at the phrasing “Chinese virus”, despite the fact that it’s 100% true, because not only is it ‘racist’, but it runs counter to their narrative that the outbreak is somehow Trump’s fault.

      *  *  *

      Update (1850ET): Maryland Gov. Larry Hogan, the Republican governor of a blue state, was one of the first governors in the country to call up the National Guard, and he announced unprecedented measures earlier that “may sound extreme” but might be needed to “save hundreds of thousands of lives”.

      In addition to the usual closures and orders to increase hospital capacity, he’s also prohibiting utility providers from turning off power, water, heat etc. for nonpayment.

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      When you’re a Republican governor in Maryland, you definitely need to stay “ahead of the curve.”

      And at least energy is cheap and getting cheaper…

      *  *  *

      Update (1820ET): Gov. Cuomo has ordered schools in his state to close for two weeks, a decision he telegraphed long in advance, leaving another ~1 million kids in the state without anything to do during the day.

      In other news, US airports are seeking $10 billion in government assistance, Reuters reports. The $10 billion figure is in line with expected losses.

      ACI-NA President and CEO Kevin M. Burke confirmed the talks with lawmakers.

      “The swift drop in air travel has forced airports to get creative by cutting budgets and lowering their operating costs as quickly as possible, all while stepping up their efforts to clean facilities and ensure the health and safety of passengers and employees alike,” he said in a statement. “We appreciate the leadership of the administration and members of Congress to ensure this immediate financial hardship does not permanently cripple a critical component of the country’s transportation infrastructure.”

      Airlines, and now, Boeing, are also in talks with the government over a bailout (the coronavirus represents something of a double-whammy for Boeing, which is still reeling from the 737 MAX 8 debacle).

      Apropos of nothing, as more photos of empty shelves flood the internet, here’s a photo from Sydney, where hoarding is also ramping up as the government weighs another economic package.

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      *  *  *

      Update (1745ET): As Dr. Fauci explained earlier, if the warnings out of the government seem dire, and if the measures state and local governments (along with the Feds) are taking seem extreme, that’s because it’s critical that we “stay ahead” of the virus, as he explained during the press conference earlier.

      So when the Surgeon General says something like “when you look at the projections, there’s every chance that we could be Italy” it’s meant to be taken with a grain of salt, and as  a warning: If you don’t obey the recommendations, you’re putting yourself and – more importantly – other, potentially more vulnerable people, at risk.

      Apparently, the reason Trump’s comment about the ventilators and respirators earlier – asking states to try and find their own through their own supply chains, as Trump said during the press conference – touched such a nerve among the governors is because there’s some kind of nationwide “problem” with supplies, according to Maryland Gov. Larry Hogan, who discussed the issue with the Washington Post.

      “There is a problem with supplies and ventilators,” Hogan said. “There’s not enough supplies. The states don’t have enough. The federal government doesn’t have enough. They’re not getting distributed fast enough. And that’s a problem for all of us.

      Hogan added that some of the governors “were pretty upset” that Trump had the gall to make the request.

      Meanwhile, more cases have been confirmed across the US. In sleepy Connecticut, state health officials announced moments ago that the number of confirmed infections in the state had increased by 15 to 41.

      Meanwhile, the number of confirmed cases across the US has surpassed 4,000, yet another grim milestone.

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      Per WaPo, which keeps the most up-to-date count of both confirmed and “presumptive” cases, put the total in the US at 4,287 as of Monday evening, with 69 deaths. Washington State still has the most deaths, with 42 – most of whom were residents of a nursing home in Kirkland.

      Coupled with a rash of deaths in Europe (mostly Italy, but some in Germany, France and the UK too), the global death total surpassed 7,000 on Monday, nearly equivalent to the number of people who were infected during the entire SARS outbreak.

      New York State came in second with 7.

      For weeks now, experts have been waiting for more data to try and answer an important question about the virus: Can children – who seem to be unusually resistant to symptoms – easily spread the virus? It’s a question that will need to be answered eventually, or the public education system in this country could face some very serious disruption.

      Following President Trump’s amusing fumble when asked by a reporter what it was like taking the Covid-19 test, the Telegraph reported that Brazil’s foreign trade secretary, who was part of Jair Bolsonaro’s delegation to the US, has also tested positive. Though at this rate, if Trump did have the virus, he’d be showing more symptoms (it’s likely that Trump’s longstanding and widely acknowledged germophobia helped him avoid catching the virus if he was indeed exposed).

      MLB has postponed opening day ‘indefinitely’, moving beyond the initial two week delay and suspension of spring training.

      The best case scenario now has baseball starting back up around the second week in May.

      According to the Washington Post, the last time Opening Day was delayed, in 1995, teams conducted a condensed, two-week spring training before launching into an abbreviated, 144-game season. The only problem this time around is that baseball teams were already well into spring training – and pitchers were well into the necessary arm-strengthening exercises that are one of the most important reasons for the spring training ritual.

      Since delaying the baseball season into November raises complications due to the weather (though games could be moved to a neutral, domed stadium, something that would be unprecedented in the sport’s history).

      In a statement, Commissioner Bob Manfred said that following a phone call with the 30 MLB clubs on Monday, the League decided to suspend play, though it remains committed to playing “as many games as possible” this season.

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      In other news, McDonald’s said it will close all seating areas at its company owned restaurants and “strongly encourage ” franchisees to do the same.

      *  *  *

      Update (1603ET): After the market completely unraveled at the close, we’re getting even more bad news about the second federal compromise bill. The Hill reports that House Democratic leaders have indefinitely postponed their return to Washington as a precautionary measure, as Pelosi continues to haggle with Mnuchin, while the Senate mulls over the possibility of ‘reopening’ the House legislation.

      Of course, if the second aid package fails to pass, it will be absolute pandemonium in markets this week, and President Trump could risk losing control of the narrative and the outbreak.

      The House was scheduled to return to the Capitol on March 23, but Pelosi and Majority Leader Steny Hoyer told rank-and-file Democrats on a conference call Monday that they will postpone that date.

      “Hoyer said for sure not Monday, and he will update them about the rest of the week,” one aide said, noting that potential cancellations of domestic flights may also play a role. “This is all pending domestic travel situation too.”

      House leaders are also exploring the possibility of staggering future votes so that all 435 members (most of whom are in the ‘high-risk’ group of the population) won’t need to be on the floor at the same time.

      *  *  *

      Update (1555ET): The CDC just confirmed that one of its employees has tested positive for the coronavirus.

      Trump just added that the White House is looking into using the Army Engineers “very strongly”, an idea floated by NY Gov. Andrew Cuomo.

      *  *  *

      Update (1535ET): Trump said the US is currently not considering a nation-wide quarantine akin to what’s happening in Europe and certain parts of the country. He did say he might consider lockdowns in certain “hot spots”, but in most cases, governors and county-level leaders have already ordered locals to shelter in place before the White House told them too.

      Per the guidelines, the White House is advising people to avoid gatherings of more than 10 people. Trump added that he’s looking at expanding unemployment benefits, and promised to get back to reporters with exact numbers of critical equipment like ventilators and respirators.

      Trump acknowledged that the virus may cause a recession in the US, when asked directly when he think a recession might hit, Trump refused to offer a projection, saying projecting recessions isn’t is responsibility (Trump can only project economic booms), and said he was focusing on getting rid of the problem, and that “once we do that, everything else will fall into place.”

      He also insisted the White House would “back the airlines 100%”.

      “They were having record seasons before this came out of nowhere,” Trump said.

      *  *  *

      Update (1530ET): After saying it would follow Spain with a strict lockdown order over the weekend, French President Emmanuel Macron on Monday ordered all of France to stay home for 15 days, with people leaving only for “essential duties”.

      “We are in a health war,” Macron said, and added that anybody caught disobeying the order would be punished. He said he was taking steps to limit people’s movements to save the lives of French citizens.

      This comes after the G-7 promises it will do “whatever is necessary” to fight the outbreak.

      *  *  *

      Update (1520ET): During this afternoon’s press conference, the White House task force has released a set of ‘national guidelines’ that it asks all Americans to follow over the next 15 days, including avoiding gatherings of more than 10 people, and that states with community spread must close bars, gyms, restaurants and other public areas, as well as schools.

      Across the Atlantic, EU Finance ministers have reportedly agreed to a ‘coordinated fiscal response’ equivalent to 1% of GDP to stop the economic fallout from the virus. Christine Lagarde must be thrilled. And Mario Draghi probably can’t help but feel a little slighted.

      *  *   *

      Update (1515ET): As we previewed earlier, San Fran Mayor London Breed has put the city on lockdown until April 7, requiring residents to stay home as of midnight.

      Essential stores will remain open.

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      A total of 6 Bay Area counties will also adopt these same shelter in place measures, as we noted earlier.

      Earlier, the mayor introduced a $10 million fund to help workers who pay because of the virus.

      *  *  *

      Update (1500ET): Earlier this afternoon, the Washington Post managed to get its hands on leaked comments from President Trump’s call with state governors (that the Democratic governors on the call would leak a damaging, out-of-context comment to undermine the president during a national crisis is hardly surprising).

      After President Trump repeatedly promised that the ‘private-industry partnerships’ negotiated by the administration would help alleviate shortages of medical supplies across the country, the president reportedly told the governors to try and get ventilators and other equipment on their own if they can.

      Instead, states should try to work on obtaining respirators, ventilators and other equipment on their own, according to two officials briefed on the call who spoke on the condition of anonymity to discuss the private teleconference.

      Trump tweeted on Monday that he had a good call with the governors.

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      In response to Trump’s alleged ‘request’, NY Gov. Andrew Cuomo, who has taken steps to maximize camera time since the outbreak began, holding multiple daily press conferences and appearing on CNN and other news channels, took a swipe at the president, demanding that he ‘do something’.

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      Meanwhile, after Louisiana delayed its primary, Ohio is now seeking to delay its primary to June 2.

      *  *  *

      Update (1450ET): The San Francisco Chronicle reports that six San Francisco Bay Area counties are about to declare a “shelter in place” order, asking residents not to leave their homes and stay away from others as much as possible for the next three weeks.

      The directive is set to begin at 12:01 a.m. Tuesday and will include San Francisco, Santa Clara, San Mateo, Marin, Contra Costa and Alameda counties – a combined population of more than 6.7 million.

      The order falls just short of a full-on lockdown – the order doesn’t explicitly forbid people from leaving their homes without permission – and it’s unclear how it will be enforced, and to what degree.

      *  *  *

      Update (1435ET): Actor Idris Elba, the “Luther” star once rumored to be the next James Bond, has tested positive for the virus, he revealed in a tweet a few minutes ago.

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      At this point, the fact that tourist attractions are closing down is hardly a surprise. But on Monday, the National Parks Service announced that the Statue of Liberty and Ellis Island would be closing ‘temporarily’.

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      In New Jersey, health officials revealed an 80% spike in cases on Sunday, bringing the state’s total confirmed cases to 176. Watch the rest of Murphy’s press conference here.

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      *  *  *

      Update (1422ET): One day after closing its border (and sealed off the state of Bavaria, the epicenter of its outbreak) and just a few hours after Chancellor Angela Merkel closed bars, cinemas, gyms, brothels and other public spaces, Germany has reported another ~1,100 cases, bringing its national total to 6,012. It also reported an additional death, bringing its total to 13.

       

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      Washington State just announced that it’s closing bars and restaurants for 2 weeks, the latest state to jump on that bandwagon, while Russia said it would “limit” entry of non-citizens as Moscow scrambles to limit the spread of the virus, which has been surprisingly mild in Russia.

      As we noted earlier, as the outbreak in Iran continues to rage out of control, a top Iranian cleric has also died.

      *  *  *

      Update (1400ET): Just like they did following the lockdown in Wuhan, CNN has flown its trusty camera drone over Northern Italy and captured some chilling footage.

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      Italy reported another 3,233 cases on Monday, and nearly 350 deaths, even as new cases reported in Lombardy leveled off.

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      UK officials have reported 18 new deaths, bringing the national total to 53.

      Meanwhile, in the Netherlands, PM Mark Rutte said experts suspect a large portion of the Dutch population will contract the virus.

      *  *  *

      Update (1345ET): After facing criticism for not doing enough to stop coronavirus-carrying travelers from entering Canada, Prime Minister Justin Trudeau, who is currently running the country from home after his wife contracted the virus, announced Monday that he will be closing Canada’s borders to non-citizens and non-residents due to the coronavirus pandemc.

      There will be some exceptions – for instance, travelers from the US can still visit Canada. Trudeau said the “window is closing” to combat the outbreak of the virus.

      Air Canada sunk even lower, trading down 30% on the day, off the headline.

      In other news, the G-7 has released a statement following Monday’s tele-conference:

      We, the Leaders of the Group of Seven, acknowledge that the COVID-19 pandemic is a human tragedy and a global health crisis, which also poses major risks for the world economy.  We are committed to doing whatever is necessary to ensure a strong global response through closer cooperation and enhanced coordination of our efforts.  While current challenges may require national emergency measures, we remain committed to the stability of the global economy.  We express our conviction that current challenges related to the COVID-19 pandemic need a strongly coordinated international approach, based on science and evidence, consistent with our democratic values, and utilizing the strengths of private enterprise.

      We are committed to marshalling the full power of our governments to:

      Coordinate on necessary public health measures to protect people at risk from COVID-19;

      Restore confidence, growth, and protect jobs;

      Support global trade and investment;

      Encourage science, research, and technology cooperation.

      By acting together, we will work to resolve the health and economic risks caused by the COVID-19 pandemic and set the stage for a strong recovery of strong, sustainable economic growth and prosperity.

      Accelerate Our Response to COVID-19

      We will work hard to protect the health and safety of everyone in our countries.  Stepping up the response to the outbreak remains our foremost priority.  We will coordinate our efforts to delay the spread of the virus, including through appropriate border management measures.

      We will enhance our efforts to strengthen health systems in our countries and globally.  We fully support the World Health Organization in its global mandate to lead on disease outbreaks and emergencies with health consequences, leaving no geographical vacuum, and encourage all countries, international organizations, and the private sector to assist global efforts such as the Global Preparedness and Response Plan.

      We stress the value of real-time information sharing to ensure access to the best and latest intelligence, improving prevention strategies and mitigation measures.

      We will pool epidemiologic and other data to better understand and fight the virus.

      We will increase coordinated research efforts, including through voluntary support for the global alliance Coalition for Epidemic Preparedness and Innovation.  We will support the launch of joint research projects funded by both public and private resources, and the sharing of facilities, towards rapid development, manufacture and distribution of treatments and a vaccine, adhering to the principles of efficacy, safety, and accessibility.

      We will make efforts to increase the availability of medical equipment where it is most needed.

      We will coordinate with online platforms to maximize public access to the latest correct and relevant official information, in recognition that millions of citizens receive information and news via social media.

      To implement these objectives, and adapt measures if necessary, will require efforts across all parts of our governments, and we ask our health ministers to continue to coordinate on a weekly basis.

      Forcefully Address the Economic Impact of the Outbreak

      We resolve to coordinate measures and do whatever it takes, using all policy tools, to achieve strong growth in the G7 economies, and to safeguard against downside risks.

      To this end, we are mobilizing the full range of instruments, including monetary and fiscal measures, as well as targeted actions, to support immediately and as much as necessary the workers, companies, and sectors most affected.  This is particularly important for small and medium businesses and working families. We also ask our central banks to continue to coordinate to provide the necessary monetary measures in order to support economic and financial stability, and to promote recovery and growth.

      We ask our finance ministers to coordinate on a weekly basis on the implementation of those measures and to develop further timely and effective actions.

      We reinforce the importance of coordination among international organizations even in the face of challenges to business continuity.  We call on the International Monetary Fund and the World Bank Group and other International Organizations to further support countries worldwide as part of a coordinated global response, focused on this specific challenge.  We also ask our finance ministers to work closely with International Organizations to design and implement swiftly the international financial assistance that is appropriate to help countries, including emerging and developing economies, face the health and economic shock of COVID-19.

      We will address disturbances to international supply chains and continue our work to facilitate international trade.

      Restore and Expand Growth

      We will continue to work together with resolve to implement these measures to respond to this global emergency.  In facing the economic challenge, we are determined not only to restore the level of growth anticipated before the COVID-19 pandemic but also to build the foundation for stronger future growth.  We will continue to coordinate through the G7 Presidency including at the G7 Leaders’ Summit and call upon the G20 to support and amplify these efforts.

      *  *  *

      Update (1235ET): Larry Kudlow’s attempt to jawbone the market higher with promises of sugarplums and helicopter money failed to spark a rally in stocks, as did a report claiming the administration is drafting an aid package for airlines.

      With markets still deep in the red into the afternoon, Google’s new virus-screening website that features information about the outbreak and testing, while helping individuals figure out if they qualify for testing, has reportedly been booked up on its first day.

      Some tech journos are complaining about Google’s demands that users create an account, potentially giving Google access to a list of people with the virus, or who have been tested.

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      Meanwhile, in other news, Malaysia has reported 138 new cases of coronavirus on Monday, bringing its national total to 566 cases in total. Portugal has reported its first death.

      Finally, UK PM Boris Johnson warned that cases of the virus could double every five days if the government doesn’t take more stringent measures. To prevent this, Johnson asked the public to stop all “non-essential” contact and travel, with Johnson recommending 12 weeks of shielding for those most at risk.

      However, the government stopped short of closing schools, though the administration’s chief scientific adviser said they could close schools if they felt it necessary. Hundreds of thousands of children across the country have been staying home.

      *  *  *

      Update (1140ET): Here’s a quick rundown of everything that has been announced so far during Gov. Cuomo’s daily press conference, courtesy of Fox 5 New York.

      NYS has confirmed 950 cases of the virus, along with 7 deaths, 158 hospitalizations, 463 cases in NYC. Outside NYC, Cuomo said NYS schools would be cancelled for two weeks (many schools in the state have closed already). Cases in Nassau have climbed to 101, and in Suffolk, they’ve hit 60.

      The state might also cancel all elective surgeries. NY has opened more drive-thru testing sights on Staten Island and Rockland County.

      Perhaps most importantly: The state liquor authority said it would allow wineries, distilleries and bars to sell liquor via delivery during the shutdown.

      Officials in Moscow, meanwhile, have just announced a ban of all gatherings over 50 people. Moscow has also closed schools for 3 weeks.

      *  *  *

      Update (1130ET): More bad news: Greenland has confirmed its first case of the coronavirus, per the FT.

      Greenland has recorded its first case of coronavirus after a person in the capital of the self-governing Arctic nation tested positive. Authorities in Nuuk said the infected person had been placed in self-isolation at home and warned of further potential infection from tourists. However, Greenland, which is part of the kingdom of Denmark, has followed Copenhagen’s lead and barred foreigners from entering the world’s largest island from Monday. 

      There goes Trump’s deal…

      Meanwhile, the German Finance Ministry has reportedly said it expects its GDP to “shrink this year” thanks to the coronavirus outbreak…hardly surprising. A more formal draft of the budget expected in June will likely take into account the emergency fiscal measures to combat the virus.

      *  *  *

      Update (1120ET): Gov. Andrew Cuomo delivered his latest press update at 11:20 on Monday, and opened by warning “I don’t believe we’re going to be able to flatten the curve enough” before calling on the federal government to take drastic steps to expand hospital capacity in places that are being hard hit by the virus.

      He complained that states have been forced to take a “hodgepodge” approach to combating the crisis, and called on the federal government to display “more leadership.”

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      Cuomo reiterated some of his claims from an NYT op-ed published yesterday. While NYC is facing a complete shutdown, the broader tri-state area has banned all large gatherings with more than 50 people.

      *  *  *

      Update (1057ET): Traders feasted on a morsel of good news Monday morning when health officials in Lombardy reported the smallest jump in newly confirmed cases in a week.

      The drop suggests that the spread of the virus in the region is no longer exponential, said Lombardy Regional President Attilio Fontana. Cases in Lombardy climbed by 1,587 on Monday to 13,272, which is lower than the 1,865 reported the prior day.

      Meanwhile, the number of deaths reported in the region climbed to 1420 from 1,218 the prior day.

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      Meanwhile, European Commission President Ursula von der Leyen has finally proposed a ban on all “non-essential” travel to the EU (though she continues to oppose plans by members to shut out foreigners and other Europeans). The news isn’t a surprise: the ban was previewed earlier, which we mentioned below.

      And Charles Michel said that G-7 leaders have “agreed to work more together” during Monday’s video call. A ‘formal’ teleconference between members of the group is now scheduled for tomorrow.

      In Germany, Chancellor Merkel said theaters, museums, restaurants and other public venues must all close until further notice.

      *  *  *

      Update (1048ET): The White House has denied a CNN report claiming that a ‘national 8 pm curfew’ is being discussed.

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      Update (1000ET): The UK has report nearly 200 new confirmed cases of the virus on Monday, raising the national total between England, Scotland, Wales & Northern Ireland to 1,543, from 1,372, while the death toll held steady at 35.

      Earlier, Dominic Cummings, Boris Johnson’s top advisor, said the administration didn’t intend for its policy of targeted quarantines while leaving restaurants, shops and the broader economy open.

      According to Reuters, PM Boris Johnson is asking manufacturers like Unipart Group, which supplies parts for jet engines and heavy machinery, to start producing ventilators and other emergency medical gear for Britain’s NHS. Though it wasn’t immediately clear how manufacturers like Rolls Royce, Unipart would accomplish this shift, Johnson is reportedly planning to hold a press conference on Monday to explain everything.

      “The prime minister will speak to British manufacturers including Unipart Group to ask them to support production of essential medical equipment for the NHS,” a Downing Street spokesman said.

      “He will stress the vital role of Britain’s manufacturers in preparing the country for a significant spread of coronavirus and call on them to step up and support the nationwide effort to fight the virus.”

      Britain has taken a “distinctly different” approach to tackling the virus, Reuters said, including shunning widespread lockdowns.

      Over in the US, NY, NJ and Connecticut have all decided to ban gatherings of 50 or more people, after the CDC asked that all large gatherings and events be ‘postponed’ until the crisis is over. New Jersey Gov. Phil Murphy has also announced a curfew for all “nonessential” businesses to close by 8 pm.

      While the outbreak in Mexico isn’t nearly as large as the outbreaks in Canada and the US, that didn’t stop Mexican President AMLO from greeting supporters on Sunday with handshakes and hugs.

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      As we mentioned earlier, Hungary PM Viktor Orban announced on Monday that he would close his country’s borders until further notice. Per Reuters, Orban has also temporarily prohibited cultural and sporting events.

      Orban added that all shops must be shut except groceries and pharmacies, and asked people over the age of 70 to stay at home. He said all events should be canceled except for family gatherings, and restaurants must close at 3 pm local time.

      In South America, Chile has announced plans to close its borders to foreigners beginning on Wednesday, Chilean President Sebastian Pinera said. There are 155 confirmed cases of the virus in Chile, he said.

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      The number of coronavirus cases in Pakistan have increased to 122, with 76 of those among people who were released following a 14-day quarantine in Taftan on the Pakistan-Iran border. A sudden jump in cases raised concerns about a possible quarantine over the weekend.

      Somalia, Tanzania and Liberia all reported their first cases of the virus on Monday.

      The number of confirmed cases in the Netherlands climbed by 278 to 1,413, the National Institute for Public Health said on Monday, after the country unveiled plans to close schools and bars yesterday, before

      Finally, CNN reports that the White House is considering a national curfew that would force all “non-essential” businesses to close by 8 pm. The European-style measure is expected to come up during the president’s phone call with the nation’s governors on Monday, where CNN’s sources said it has been ‘strongly encouraged’ at the state level.

      *  *  *

      Update (0800ET): The IMF just tried firing a “bazooka” of its own on Monday morning, when Director Kristalina Georgieva revealed that the NGO sees global economic conditions deteriorating “by the hour”

      “The case for a coordinated and synchronized global fiscal stimulus is becoming stronger by the hour,” IMF Director Kristalina Georgieva wrote in a recent blog post.

      Meanwhile, Sanofi and Regeneron meanwhile are beginning a US-based trial for patients with severe coronavirus symptoms in New York, one of the epicenters of America’s outbreak.

      *  *  *

      Update (0735ET): European newswires are reporting that European Commission President Ursula von der Leyen and European Council President Charles Michel have agreed on measures to potentially close or tighten the EU border. Those measures will be released in the coming hours.

      So Brussels is finally throwing in the towel…

      *  *  *

      Update (0730ET): US Surgeon General Jerry Adams said Monday that the country will likely need 6-8 weeks for the virus to run its course.

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      If Europeans have anybody to blame for the continent-wide spread of the novel coronavirus, the European Commission should be pretty high on that list. Since the beginning, Brussels has advised member states to leave their borders open, arguing that closures within the Schengen Area are not the answer.

      Unfortunately, the absurdity of this open-borders-at-all-costs philosophy has finally been exposed as Spain and France joined Italy in imposing a national lockdown, and Germany, Austria and Denmark joined the Czech Republic, Hungary (which announced its border closure just minutes ago) and Poland – where populists hold outsize sway – in closing their borders. The Czech Republic has also joined in the mass quarantine movement, sealing off some towns entirely.

      In a leaked statement on Monday, Brussels doubled-down on its stance, saying that border closures are not the answer as France mulls shutting its borders after Germany announced its border closures on Sunday.

      Italy’s neighbors have mostly shut their borders with the literal ‘sick man of Europe’.

      Meanwhile, in China, health officials suspiciously warned on Monday that ‘imported’ cases of the virus are creating ‘uncertainties’ as the outbreak comes to an end.

      So get ready for Beijing to blame foreigners for re-starting the epidemic (giving it fodder to reject international calls for Beijing to acknowledge some accountability for the outbreak) as doctors suddenly “discover” another 100,000 ill.

      In the UK, Boris Johnson’s senior advisor Dominic Cummings insisted that the government’s plan doesn’t rely on building so-called “herd immunity” to an outbreak. The UK is taking a different approach, leaving businesses open while advising any ill persons to immediately stay home in quarantine.

      *  *  *

      Those who spent their weekend on one last bar crawl may not have noticed that millions of people are waking up to a fundamentally different situation on Monday than they saw on Friday. In the US, more than one million students in NYC schools – including ~100,000 homeless students with no regular access to shelter or hot meals – are waking up to the first of many school-free days. Some of their parents are scrambling to find childcare, others, left at home because of the mass closures of restaurants, gyms (just in LA), concert venues, nightclubs, cafes, plus myriad other closures, are desperately hoping that government check lands soon.

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      In Italy, Italians are heading into a second week of nationwide lockdown, while citizens in Spain and France are facing these measures for the first time.

      In Washington’s King County, Executive Director Dow Constantine said late Sunday night that “it’s time, right now, for people to assume that they and everyone they meet is infected.”

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      In the Philippines, which acted early to bar visitors from China, infections have repeatedly doubled over the past week, leading the government on Sunday to prepare to lock down the entire island of Luzon, according to the Rappler.

      President Duterte said earlier that his ultimate goal with the country’s virus-containment measures is to “save ourselves from ourselves”.

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      In some places, neighborhoods are banding together to coordinate child care…though in other communities, dangerous levels of hoarding continue.

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      In China, the government is expanding its crack down on foreign arrivals by threatening to “probe and punish” anyone who violates rules on mandatory 14-day quarantines for foreign travelers arriving in the country, especially “those who plan to lie about whether or not thy are infected,” according to a Bloomberg report.

      The global outbreak reached a grim milestone on Sunday: the number of coronavirus cases confirmed outside China has now surpassed the mainland total. Last night, China’s NHC reported 16 new confirmed cases, extending their streak of near-zero infection figures into its second week. Though few ever trusted the Chinese data, there’s now little doubt that the outbreak that originated in the city of Wuhan is now mostly under control.

      Then, in the early hours of Monday morning, Johns Hopkins University reported that the number of deaths outside mainland China had also surpassed the number of deaths (at least the number of officially disclosed deaths) in mainland China.

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      Nearby in Australia, the conservative government led by PM Scott Morrison is considering a second round of economic stimulus, Reuters reports, as Canberra accelerats efforts to contain the spread of the coronavirus that has now killed five people in the country.

      The situation in Australia is especially concerning, because, as Harvard epidemiologist Dr. Eric Feigl-Ding reports:

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      Back in the US, after several governors on the east coast joined in the national emergency, closing schools etc., VP Pence and the rest of the White House coronavirus response team again promised to have testing on-line and paid for by the end of the week, with millions of tests and up to 2,000 labs across the country expected to come online this week, now that the CDC has revised its strict standards that allegedly surrounded the testing process with red tape. After Trump tested negative on Sunday, the media was quick to lash out at him again after he said that the virus is “something we have tremendous control of” during last night’s press conference.

      During the press conference, Pence and the team promised to release federal guidelines on ‘social distancing’ some time on Monday.

      Five governors have now closed bars and restaurants, including California, and mayors in Nashville and New Orleans announced restrictions in those cities, too, with more cities expected to join in the coming days. In Las Vegas, Wynn Resorts and MGM closed their casinos. Casinos in Massachusetts also closed over the weekend. At this point, more than 30 US states have closed schools, with many not set to reopen for at least two weeks, with schools in NYC closed until April 20.

      Before we go, here are a few quick updates on the state of the epidemic around the world.

      Canada:

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      The US:

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      The Americas:

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       Europe:

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      In Africa, more cases are beginning to crop up as South Africa, which reported its first case last week, begins the process of closing its borders with several neighboring states.

      Brazil reports 79 new cases of coronavirus, 200 cases in total, with 136 cases in Sao Paulo alone. Offering another jarring stat, one twitter user pointed out that 50% of coronavirus patients in intensive care in the Netherlands, which has like many other European countries seen cases spike last week, are younger than 50. In Bavaria, the hardest-hit German state, the governor has also closed schools and bars. The government of Ireland has shut pubs across the country (just in time for St. Paddy’s Day).

      On Monday, Iran reported 1,053 new cases of coronavirus and 129 new deaths, bringing its total case load to 14,991, and the ‘official’ death toll to 853.

      And finally, we’d like to leave off with a bit of levity.

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      Tyler Durden

      Mon, 03/16/2020 – 20:27

    • US Food Industry Scrambles To Resupply Stores Amid Apocalyptic Surge In Demand
      US Food Industry Scrambles To Resupply Stores Amid Apocalyptic Surge In Demand

      As coronavirus spreads throughout the United States, millions of panicked Americans have been hoarding everything from canned food to absurd amounts of toilet paper. Images of empty store shelves are compounding the situation, as worries over shortages amid a potential quarantine have added to the surge in purchases.

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      According to the nation’s largest retailers, meat producers and dairy farmers however, there’s plenty of food in the country; the problem is that the supply chain wasn’t designed to handle this type of nation-wide surge in purchases and is now scrambling to catch up, reports the New York Times.

      Industries that are calibrated to supply consumers with just enough of what they need on a given day cannot keep up with a nationwide surge of relentless shopping fueled in large part by fear. –NYT

      As distributors and retailers struggle to restock shelves with a sudden demand for canned soup and oat milk, industry officials insist that these are temporary problems.

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      “There is food being produced. There is food in warehouses,” said North American Meat Institute CEO, Julie Anna Potts. “There is plenty of food in the country.”

      Costco COO Ron Vachris said in a Saturday interview “Our stores are getting stocked every day,” adding “Transportation is functioning, our suppliers are working around the clock and the flow of goods is strong.”

      Notably, hot dog orders at Costco and Walmart have increased by as much as 300% according to meat suppliers – with some hot dog plants adding Saturday and Sunday shifts, and are shipping Memorial Day stockpiles to meet the surge in demand. Hot dog makers say they have a year’s supply of ingredients such as garlic, according to the report.

      Meanwhile, the National Chicken Council says they aren’t seeing any disruptions in production – and that “ample surplus supplies of chicken” are currently in cold storage – 950 million pounds worth, according to government data.

      None of this matters to shoppers facing empty shelves right now, however.

      The panicky buying is testing the food system’s capacity in the near term. Over the past few weeks, sales of rice have increased more than 50 percent, according to data from the research firm Nielsen. Canned meat is up more than 40 percent. And sales of other essentials like beans, pasta, peanut butter and bottled water have also risen substantially, with a sharp spike this month. Kroger told its suppliers that demand had surged 30 percent across all categories in recent days. (For comparison, the company’s sales for all of last year rose about 2 percent.) –NYT

      Another factor in helping to restock store shelves is shifting the food supply from closed restaurants, school cafeterias and college campuses.

      “The food is there. It’s just going into different spots,” according to FreshDirect CEO David McInerney. “Cruise ships are not using up all of the avocados. We have a giant surge of avocados.”

      The hoarding began around two weeks ago. According to the Times, shortages in hand sanitizers and wipes “set off a wave of panic buying that spread in recent days to include bread, canned goods, milk and frozen food.” Perhaps a more plausible explanation is that the reality of a potentially protracted home-quarantine combined with people who don’t want to shop at a store with aerosolized, three-hour hang-time coronavirus in the aisles has driven Americans to stock up before it hits en masse.

      Ramping up

      Despite there being ‘enough food’ – there are logistical issues to increasing production, such as the 50-days or longer it takes for chickens to go from egg to mature bird to store shelves.

      For some chicken suppliers, the process takes even longer, depending on the type of bird.

      Across the industry, “you’re talking about 50 days to get to a customer,” said Matthew Wadiak, who runs Cooks Venture, a chicken supplier based in Arkansas and Oklahoma. “Fifty days ago, we didn’t know this was even on the horizon. There was essentially no way to plan for it.”

      …

      “It’s clear that the modern supply chain, for all its efficiency and speed, is not equipped to deal with this kind of surge.” –NYT

      Amazon’s algorithms, for example, have been designed to provide near-perfect estimations of exactly how much inventory warehouses or particular stores must keep on hand during a typical week – but they’re unable to cope with this type of exogenous event leading to bare shelves in such a short period of time.

      “When the shelf is emptied in the course of 24 hours and the safety stock was built intent upon protecting a week or two of demand, you get this tremendous dislocation,” said Columbia Business School director of retail studies Mark Cohen.

      “The trouble is that the hoarding hasn’t abated. We’re just seeing the very beginning of this kind of behavior,” he added. “The question is: How long will it take for industry to catch up?“


      Tyler Durden

      Mon, 03/16/2020 – 20:10

    • Why The Covid-19 Rescue Plan Should Be Vehemently Opposed
      Why The Covid-19 Rescue Plan Should Be Vehemently Opposed

      Authored by Bruce Wilds via Advancing Time blog,

      More than a few reasons exist to vehemently oppose the federal covid-19 economic rescue package. This is the hastily drawn up package, which Trump said he fully supports and is rapidly working its way through Washington on its way to becoming law. The two major reasons for strongly objecting to this bill are, we have no idea what it will cost and it will totally miss its target while dealing a crushing blow to small businesses across America. Still, because of politics, the measure passed in an overwhelming 363-40 vote in the House soon after Speaker Nancy Pelosi, and Treasury Secretary Steven Mnuchin reached an agreement.

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      Politics And Grandstanding For The Masses

      The 110-page bill is being painted as proof lawmakers could work together during a crisis after being sharply divided over party lines during the failed impeachment of President Trump.  By framing the poorly and hastily crafted pork-packed bill this way promoters are positioned to demonize those unwilling to support it. The chamber approved the bill less than an hour after the text was released. This bill is aimed at assisting millions of Americans directly and is in addition to the $8.3 billion emergency spending bill already approved to curb the spread of covid-19.

      Jim Banks, a congressman from northeast Indiana was among 40 Republicans who opposed the bill. Interestingly, the rest of Indiana’s nine-member delegation, six Republicans and two Democrats, voted in favor of the act which has been named “Families First Coronavirus Response Act.” Banks claimed it was because “Some language will mean major harm for small businesses and our economy.” Bank’s office referred to a message sent to House leaders from the National Federation of Independent Business, which objected to a provision of the legislation that would require employers with fewer than 500 workers to provide paid medical and family leave. The question is, how many struggling businesses with two to twenty workers have the resources to weather this storm.

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      90% Of Businesses Are Small

      The bill scheduled to go to the Senate will provide free testing for the virus, expand unemployment assistance and increase spending on nutrition programs. Banks tweeted: “There is much in this bill we need to pass, but as the NFIB said in their letter of opposition, the bill would impose potentially unsustainable mandates on small businesses’ hurting not helping the backbone of our local economies.”

      The NFIB correctly contends that “many small business owners simply cannot afford the cost of the new mandate at the same time as they experience increasingly slower sales.” The advocacy organization said that many businesses “may not stay afloat” long enough to claim quarterly tax credits provided by the paid-leave provision. According to the bill, employers would have to provide 14 days of paid sick leave for at least two-thirds of a worker’s pay. This applies to employees who have the coronavirus, are caring for a family member who has it or who need to care for children due to facilities being closed. For those now forced to take on this burden, this is enough to make their heads spin, unlike government agencies small business owners cannot turn to taxpayers when they can’t pay their bills.

      Below is a list of what this legislation promises to do:

      • Requires private health plans to cover covid-19 testing at no cost, and allocates $1 billion for testing for uninsured Americans

      • Ensures employers with fewer than 500 employees and government employers offer two weeks of paid sick leave through 2020.

      • Requires those same employers to provide up to 3 months of paid family and medical leave for people forced to quarantine due to the virus or care for family because of the outbreak

      • Offers payroll tax credits for employers providing those leave benefits

      • Puts $1 billion into emergency state grants for providing unemployment insurance benefits. It includes $500 million for staffing and logistical costs for states, with an additional $500 million reserved for states that see a 10% increase in unemployment

      • Puts $500 million into food assistance for low-income pregnant women and mothers with young children, $400 million into local food banks and $250 million into a senior nutrition program

      • Suspends the Supplemental Nutrition Assistance Program work requirements for the duration of the crisis

      In an effort to silence GOP opposition Trump wrote this bill “will follow my direction for free CoronaVirus tests, and paid sick leave for our impacted American workers.” He also said he directed Mnuchin and Labor Secretary Eugene Scalia “to issue regulations that will provide flexibility so that in no way will Small Businesses be hurt.” Many political pundits see Trump’s declaration of a national emergency on Friday and his endorsement of this package as an effort to mitigate damage from his administration’s initially weak response to the crisis.

      In what appeared a contrived stunt to rally stocks, Trump declared a national emergency, 15 minutes before the market closed on Friday. In his declaration, Trump said he would temporarily waive the interest on federal student loans but more importantly directed his administration to buy oil for its strategic reserve. This caused oil and stocks to soar. The reality and fears of widespread economic disruption with workers, either sick or laid off has resulted in all major U.S. stock indexes dropping by more than 8% for the week despite rising on Friday.

      As expected, in a series of tweets, the president said “I fully support” the legislation negotiated by Pelosi and Treasury Secretary Steven Mnuchin and said he looks forward to signing it “ASAP!” The Senate has canceled its recess plans and is expected to take it up Monday. Senate Majority Leader Mitch McConnell said senators “will need to carefully review” the proposal. “But I believe the vast majority of Senators in both parties will agree we should act swiftly to secure relief for American workers, families, and small businesses,” he said.

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      4,000 Queue For Hours At Chicago O’Hare

      It is difficult to think the incompetent clowns in Washington have a handle on the cost of this bill or that the Congressional Budget Office has had time it asset it. The information is so sparse few of us are able to get details about the language it contains but one thing is certain, the politicians are rushing to pander and pour forth “free stuff.” Sadly, few are considering the unintended consequences that will flow from their so-called efforts to blunt the economic damage of the global pandemic.

      Never underestimate the stupidity of government. An example of their lack of competence can be seen at the 16 US airports approved to handle Americans returning to the country. At these airports, unimaginable long lines of people crowd together for hours and hours without masks. This is also playing out in other airports, a passenger arriving at JFK confirmed that they were told to share pens and there was no hand sanitizer. “So if we didn’t have the virus before, we have a great chance of getting it now!” one passenger stated.

      The reason to vehemently oppose the “Families First Coronavirus Response Act.” is that it is ill-conceived. Why will anyone want to work, especially government workers when they can get paid to stay home? How do you staff healthcare facilities when nobody comes to work? The greatest irony of this farce is that small business owners will be the first to take it on the chin. Privately-owned companies with fewer than 20 are the backbone of America and what makes it work. This means Trump may not understand at what point a small business becomes a medium or large business or simply doesn’t care. Ironically, the members of the NFIB strongly supported this same President that is throwing them under the bus.


      Tyler Durden

      Mon, 03/16/2020 – 19:50

    Digest powered by RSS Digest

    Mar 16

    Today’s News 16th March 2020

    • World's Most Powerful Supercomputer Tasked With Finding Covid-19 Cure
      World’s Most Powerful Supercomputer Tasked With Finding Covid-19 Cure

      Researchers at the Department of Energy’s Oak Ridge National Laboratory have used the world’s most powerful supercomputer to identify 77 drug compounds that could lead to scientific breakthroughs to combat Covid-19.  

      The supercomputer, dubbed Summit, has been tasked to run complex computation across existing databases of drug compounds to see which combinations could thwart Covid-19 from infecting cells. 

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      Summit has been able to “simulate 8,000 compounds in a matter of days to model which could impact that infection process by binding to the virus’s spike, and have identified 77 small-molecule compounds, such as medications and natural compounds, that have shown the potential to impair COVID-19′s ability to dock with and infect host cells,” read an IBM press release, whose technology is present in Summit.

      “Summit was needed to rapidly get the simulation results we needed. It took us a day or two whereas it would have taken months on a normal computer,” said Jeremy Smith, Governor’s Chair at the University of Tennessee, director of the UT/ORNL Center for Molecular Biophysics, and principal researcher in the study. 

      “Our results don’t mean that we have found a cure or treatment for COVID-19. We are very hopeful, though, that our computational findings will both inform future studies and provide a framework that experimentalists will use to further investigate these compounds. Only then will we know whether any of them exhibit the characteristics needed to mitigate this virus.”

      Smith’s team is expected to pass on the findings to others in the scientific community, who will then begin to experiment on Summit’s 77 compounds to see which one is the most effective against Covid-19. 

       “Our hope is that, by using a database of known compounds, we can greatly reduce the time it takes to make an effective drug publicly available, but there is no guarantee,” Smith said.

      Once scientists find the right compound, then human testing would likely be next. Trials could take upwards of a year to conduct, suggesting that a vaccine is likely in 2021. As for now, prepare for an exponential rise in virus cases and deaths in the US. 


      Tyler Durden

      Mon, 03/16/2020 – 02:45

    • UK Missed Containment Window, Unprepared For Virus Crisis, Troops Could Be Deployed
      UK Missed Containment Window, Unprepared For Virus Crisis, Troops Could Be Deployed

      The UK has missed the critical containment window to implement social distancing policies that would flatten the curve and slowdown infections, suggesting the country could see an exponential rise in Covid-19 cases over the next month, sort of like what’s happening in Italy at the moment. 

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      The Guardian spoke with a senior consultant at a top hospital in the UK, who warned hospital beds are already 98% full, and the patients who need ICU-level treatment might not be able to receive it. 

      The senior consultant said hospitals across the UK don’t have enough protective gear like N-95 masks and goggles, and the entire National Health Service (NHS) healthcare system is understaffed to handle a virus outbreak. 

      If cases and deaths were to increase exponentially over the next 2-4 weeks, there wouldn’t be enough hospital beds and ventilators for the severely ill, which would imply the mortality rate would increase. 

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      The consultant said plans to increase ICU capacity are underway though trained medical staff would remain in a shortage.

      “I’m worried that the NHS is completely ill-equipped to handle Covid-19,” the person said, adding that, “when Boris Johnson talks about our wonderful NHS and how well-prepared it is, that’s bullshit. He either doesn’t have a clue or is trying to falsely reassure people. The NHS has been hit hard before, by underfunding, terrorist attacks and tough winters. But usually crises are stretched over a period of time. With coronavirus it will all come at once.” 

      The consultant suggested that the government missed the containment window: 

      “I’m amazed it has taken the NHS and the government so long to get ready to deal with a crisis. We need to free up doctors and NHS staff to prepare for what’s coming. We should be cancelling outpatient clinics, suspending waiting-time targets, like the four-hour A&E wait and the 18-week target for outpatient treatment, until this is all over – and be open with the public about why this is happening. Soon the NHS is going to be faced with a huge amount people with Covid-19.”

      With an influx of patients expected to overwhelm the UK hospital system in the weeks ahead, the consultant fears that “we are going to end up in the same situation as Iran and Italy, where health services have struggled to cope.”

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      If an Italy-style scenario were to happen, then the military would likely be deployed at hospitals, supermarkets, and on streets.

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      Defense sources told The Sun that troops would build tented field hospitals, deep-clean public buildings, and keep the order during a virus outbreak. 


      Tyler Durden

      Mon, 03/16/2020 – 02:00

    • Chinese Tycoon Mysteriously Disappears After Criticizing Xi's Virus Response
      Chinese Tycoon Mysteriously Disappears After Criticizing Xi’s Virus Response

      A Chinese real estate tycoon has gone missing over the weekend after his latest commentary was highly critical of President Xi Jinping’s response to the Covid-19 outbreak that originated in Wuhan, China, in December.  

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      The New York Times reported on Saturday that friends of Ren Zhiqiang, known as “The Cannon,” went missing on early Saturday morning. 

      “We’re very worried about him,” said Wang Ying, a retired businessman, and friend of Ren’s. “I will continue to look for him.”

      Ren’s disappearance comes after his scathing blog post criticized Xi’s response to the virus crisis. He called Xi a power-hungry “clown” and said the ruling Communist Party’s censoring of speech made the crisis worst:

      This outbreak of the Wuhan pneumonia epidemic has verified the reality: when all media took on the “surname of the Party” the people “were abandoned” indeed [a reference to a forecast Ren made in his response to Xi’s declaration that the media should “bear the Party surname”]. Without a media representing the interests of the people by publishing the actual facts, the people’s lives are being ravaged by both the virus and the major illness of the system.

      I too am curiously and conscientiously studying [Xi’s teleconferenced February 23] speech, but what I saw in it was the complete opposite of the “importance” reported by all types of media and online. I saw not an emperor standing there exhibiting his “new clothes,” but a clown who stripped naked and insisted on continuing being emperor. Despite holding a series of loincloths up in an attempt to cover the reality of your nakedness, you don’t in the slightest hide your resolute ambition to be an emperor, or the determination to let anyone who won’t let you be destroyed.

      Ren, a communist party member, has been critical of Xi for years. In 2016, he denounced Xi and was then placed on a year’s probation. 

      The government has monitored Ren’s movements, and his social media accounts have been suspended. 

      It appears the party has moved swiftly to censor Ren, as family and friends have been searching for him over the weekend. 

      We noted earlier this year that the government censored the Chinese doctor who tried to raise the alarm about the novel coronavirus before it was even identified. Li Wenliang warned people in December about the virus and has since died of an infection. 

      China is known for its strict censorship of non-government approved narratives. If someone criticizes the government about their virus response, it appears the party has no other choice than to silence those individuals. 

      It’s much of the same in the US, where companies like Facebook, Twitter, Google, and YouTube are censoring coronavirus information that isn’t government-approved. 


      Tyler Durden

      Mon, 03/16/2020 – 01:00

    • Panic Will End But Tyranny Will Not
      Panic Will End But Tyranny Will Not

      Authored by Gary Barnett via LewRockwell.com,

      “Our contemporaries are constantly excited by two conflicting passions; they want to be led, and they wish to remain free: as they cannot destroy either one or the other of these contrary propensities, they strive to satisfy them both at once. They devise a sole, tutelary, and all-powerful form of government, but elected by the people. They combine the principle of centralization and that of popular sovereignty; this gives them a respite: they console themselves for being in tutelage by the reflection that they have chosen their own guardians. Every man allows himself to be put in leading-strings, because he sees that it is not a person or a class of persons, but the people at large that holds the end of his chain.

      By this system the people shake off their state of dependence just long enough to select their master, and then relapse into it again. A great many persons at the present day are quite contented with this sort of compromise between administrative despotism and the sovereignty of the people; and they think they have done enough for the protection of individual freedom when they have surrendered it to the power of the nation at large. This does not satisfy me: the nature of him I am to obey signifies less to me than the fact of extorted obedience.”

        ~ Alexis de Tocqueville, Democracy in America

      Any real state of fear will bring panic, and once panic is the prevailing attitude of society at large, the herd seeks safety at all cost. Seeking safety under these circumstances allows for tyranny by the ruling class, and when the restrictive consequences of that tyranny are in place, escape from mass servitude is almost impossible to achieve. It must be understood that decisions made under stress due to fear end with a loss of freedom, and when freedom is compromised, what is left is slavery.

      We have been told that a pandemic is upon us, and that we must sacrifice for the good of all, and for the sake of the nation. If the people at large accept this premise, individual sovereignty is not only compromised, but also permanently damaged. When the masses as a group seek shelter from harm, and agree to temporarily relinquish some or all of their freedoms, oppression is the result. That is why panic is so perilous, and why hasty decisions should never be made during a real or supposed crisis.

      As I write this, it is obvious that none of these suggestions have been followed, and the herd has acquiesced to most all commands from on high in order to gain what will most likely turn out to be false hope at the expense of accepted domination. At this point, it is not too late to reverse part of the damage, but any continuation of mass subservience will only end in oppressive misery.

      There is no certainty that this new coronavirus called COVID-19 is any more dangerous than any other virus in the past, but the ruling class and their minions in the mainstream media and beyond, are screaming at the top of their lungs that this is the scourge of mankind, and that tens of millions of Americans will become infected, and that millions might die.

      This is being promulgated by government at every level, by so-called national and world health organizations, and by a complicit media that seemingly does as it is told by those holding political power. This is being done regardless of the fact that no one knows much about this so-called virus, knows little or nothing about its true origin, and knows little about its mutations. Also, politicians, claimed authorities, and alleged experts are in the dark as to how particular cultures have been more susceptible than others, and are unwilling to discuss that the probable cause of this is due to a man-made strain created in a bio-weapons lab, even though a preponderance of evidence points in that direction. All possibilities should be discussed.

      Current headlines today:

      Trump To Declare National Emergency

      Complete shutdown On Table

      This government is now taking total control over our lives, and will take full advantage of this situation to bring draconian anti-liberty measures to all that live in this country.  This is an atrocity, and one that will change the face of this nation. Current risk includes the implementing of medical martial law as well as the possibility of total martial law with any major resistance from those not willing to accept being in a captured society. I outlined the measures that have been implemented by at least 40 states to affect medical martial law recently in this article. The act that has been adopted is the Model State Emergency Health Powers Act (MSEHPA), and the included language is dictatorial in nature.

      Besides the sheer tyranny of these measures being planned and implemented as I write this, the certain economic devastation to come is unimaginable. No one will be spared economic harm, and many will be completely destroyed by the government’s response to this manufactured panic. In addition, when the virus scare is over, and it will be, the economic destruction will remain, and it could take years for any recovery to take place.

      Has all this panic been planned? The impending economic collapse caused by the Federal Reserve and its massive money printing is most likely going to be falsely blamed on the coronavirus, so what is the connection? Was this virus created for the purpose of covering up responsibility for an economic meltdown? Was it created to harm the economy of China and Iran? If not, is it being purposely used for these purposes? Is population control due to all these factors mentioned sought by the ruling class, and is this virus the impetus for gaining that control?

      What is next on the agenda due to this panic? Will there be total lockdowns? Will there be universal travel restrictions, even at the local level? Will there be forced vaccinations? Will there be mandatory testing and inspections? Will there be food shortages? Will this lead to concentration camps for dissenters? Will the National Guard and military be patrolling the streets of your town?

      There are many unanswered questions, and much uncertainty about this virus, so what is the real danger?

      The real danger to America is the U.S. government and its dictatorial response to what appears to be an orchestrated hysteria. The solutions offered by Trump and this government, regardless of who is pulling the strings of these puppets, are far more dangerous than any manufactured pandemic. Fear and panic allow for control, and those in power understand this truth, and use it to their advantage. Panic is worthless, and can only lead to the acceptance of authoritative rule. This is the real risk; this is the real danger. If the people allow a takeover of their lives due to this panic, they will not only have lost their liberty and all they own, they will have also lost their sanity.


      Tyler Durden

      Mon, 03/16/2020 – 00:00

    • Illinois Mayor Grants Herself Power To Ban Gun Sales And Alcohol During Coronavirus Epidemic
      Illinois Mayor Grants Herself Power To Ban Gun Sales And Alcohol During Coronavirus Epidemic

      Champaign, Illinois mayor Deborah Frank Feinen signed an executive order on Thursday declaring a state of emergency to address the coronavirus.

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      Among the sweeping powers she gained after signing the executive order was the ability to ban the sale of guns, ammunition, alcohol and gasoline – as well as the power to cut off access to individuals’ gas, water or electricity, according to the Washington Examiner.

      The city can also “take possession of private property” and order the temporary closing of all liquor stores and bars.

      “The executive order allows the city to be flexible to properly respond to the emergency needs of our community. None of the options will necessarily be implemented but are available in order to protect the welfare and safety of our community if needed,” city manager Jeff Hamilton told WAND.

      On Friday, the Champaign City Council met to discuss concerns over the sweeping powers granted to Feinen, with Deputy Mayor Tom Bruno noting that each ordinance considered under the executive order would be ratified by the council. Additionally, the city said Feinen would only take steps “necessary to ensure the health, safety, and welfare” of the city.

      “The City will keep the public’s best interest in mind as we continue to work alongside public health officials and countywide leaders,” reads the council’s statement. “We understand this is a challenging time but working collaboratively as a community is the best approach to combating this virus.”

      Illinois has 64 confirmed cases of coronavirus as of this writing.

      On Monday, Gov. J.B. Pritzker announced a statewide disaster proclamation to address the situation.

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      Tyler Durden

      Sun, 03/15/2020 – 23:35

    • Covid-19 & The Sun: A Lesson From The 1918 Influenza Pandemic
      Covid-19 & The Sun: A Lesson From The 1918 Influenza Pandemic

      Authored by Richard Hobday via Medium.com,

      Fresh air, sunlight and improvised face masks seemed to work a century ago; and they might help us now.

      When new, virulent diseases emerge, such SARS and Covid-19, the race begins to find new vaccines and treatments for those affected. As the current crisis unfolds, governments are enforcing quarantine and isolation, and public gatherings are being discouraged. Health officials took the same approach 100 years ago, when influenza was spreading around the world. The results were mixed. But records from the 1918 pandemic suggest one technique for dealing with influenza — little-known today — was effective. Some hard-won experience from the greatest pandemic in recorded history could help us in the weeks and months ahead.

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      Influenza patients getting sunlight at the Camp Brooks emergency open-air hospital in Boston. Medical staff were not supposed to remove their masks. (National Archives)

      Put simply, medics found that severely ill flu patients nursed outdoors recovered better than those treated indoors. A combination of fresh air and sunlight seems to have prevented deaths among patients; and infections among medical staff. There is scientific support for this. Research shows that outdoor air is a natural disinfectant. Fresh air can kill the flu virus and other harmful germs. Equally, sunlight is germicidal and there is now evidence it can kill the flu virus.

      `Open-Air’ Treatment in 1918

      During the great pandemic, two of the worst places to be were military barracks and troop-ships. Overcrowding and bad ventilation put soldiers and sailors at high risk of catching influenza and the other infections that often followed it. As with the current Covid-19 outbreak, most of the victims of so-called `Spanish flu’ did not die from influenza: they died of pneumonia and other complications.

      When the influenza pandemic reached the East coast of the United States in 1918, the city of Boston was particularly badly hit. So the State Guard set up an emergency hospital. They took in the worst cases among sailors on ships in Boston harbour. The hospital’s medical officer had noticed the most seriously ill sailors had been in badly-ventilated spaces. So he gave them as much fresh air as possible by putting them in tents. And in good weather they were taken out of their tents and put in the sun. At this time, it was common practice to put sick soldiers outdoors. Open-air therapy, as it was known, was widely used on casualties from the Western Front. And it became the treatment of choice for another common and often deadly respiratory infection of the time; tuberculosis. Patients were put outside in their beds to breathe fresh outdoor air. Or they were nursed in cross-ventilated wards with the windows open day and night. The open-air regimen remained popular until antibiotics replaced it in the 1950s.

      Doctors who had first-hand experience of open-air therapy at the hospital in Boston were convinced the regimen was effective. It was adopted elsewhere. If one report is correct, it reduced deaths among hospital patients from 40 per cent to about 13 per cent. According to the Surgeon General of the Massachusetts State Guard:

      `The efficacy of open air treatment has been absolutely proven, and one has only to try it to discover its value.’

      Fresh Air is a Disinfectant

      Patients treated outdoors were less likely to be exposed to the infectious germs that are often present in conventional hospital wards. They were breathing clean air in what must have been a largely sterile environment. We know this because, in the 1960s, Ministry of Defence scientists proved that fresh air is a natural disinfectant. Something in it, which they called the Open Air Factor, is far more harmful to airborne bacteria — and the influenza virus — than indoor air. They couldn’t identify exactly what the Open Air Factor is. But they found it was effective both at night and during the daytime.

      Their research also revealed that the Open Air Factor’s disinfecting powers can be preserved in enclosures — if ventilation rates are kept high enough. Significantly, the rates they identified are the same ones that cross-ventilated hospital wards, with high ceilings and big windows, were designed for. But by the time the scientists made their discoveries, antibiotic therapy had replaced open-air treatment. Since then the germicidal effects of fresh air have not featured in infection control, or hospital design. Yet harmful bacteria have become increasingly resistant to antibiotics.

      Sunlight and Influenza Infection

      Putting infected patients out in the sun may have helped because it inactivates the influenza virus. It also kills bacteria that cause lung and other infections in hospitals. During the First World War, military surgeons routinely used sunlight to heal infected wounds. They knew it was a disinfectant. What they didn’t know is that one advantage of placing patients outside in the sun is they can synthesise vitamin D in their skin if sunlight is strong enough. This was not discovered until the 1920s. Low vitamin D levels are now linked to respiratory infections and may increase susceptibility to influenza. Also, our body’s biological rhythms appear to influence how we resist infections. New research suggests they can alter our inflammatory response to the flu virus. As with vitamin D, at the time of the 1918 pandemic, the important part played by sunlight in synchronizing these rhythms was not known.

      Face Masks Coronavirus and Flu

      Surgical masks are currently in short supply in China and elsewhere. They were worn 100 years ago, during the great pandemic, to try and stop the influenza virus spreading. While surgical masks may offer some protection from infection they do not seal around the face. So they don’t filter out small airborne particles. In 1918, anyone at the emergency hospital in Boston who had contact with patients had to wear an improvised face mask. This comprised five layers of gauze fitted to a wire frame which covered the nose and mouth. The frame was shaped to fit the face of the wearer and prevent the gauze filter touching the mouth and nostrils. The masks were replaced every two hours; properly sterilized and with fresh gauze put on. They were a forerunner of the N95 respirators in use in hospitals today to protect medical staff against airborne infection.

      Temporary Hospitals

      Staff at the hospital kept up high standards of personal and environmental hygiene. No doubt this played a big part in the relatively low rates of infection and deaths reported there. The speed with which their hospital and other temporary open-air facilities were erected to cope with the surge in pneumonia patients was another factor. Today, many countries are not prepared for a severe influenza pandemic. Their health services will be overwhelmed if there is one. Vaccines and antiviral drugs might help. Antibiotics may be effective for pneumonia and other complications. But much of the world’s population will not have access to them. If another 1918 comes, or the Covid-19 crisis gets worse, history suggests it might be prudent to have tents and pre-fabricated wards ready to deal with large numbers of seriously ill cases. Plenty of fresh air and a little sunlight might help too.


      Tyler Durden

      Sun, 03/15/2020 – 23:10

    • NIRP Arrives: Treasuries Trade With Negative Yield
      NIRP Arrives: Treasuries Trade With Negative Yield

      With the Fed’s cutting rates three days ahead of the regular Wednesday FOMC announcement by 100bps to 0%-25bps, while also announcing a fresh $700BN QE as well as enhanced FX swaps, panic is in the air as reflected in the S&P futures which have been locked limit down since the open, and with equity traders frozen out and unable to do anything all the attention has shifted to rates where all hell is breaking loose.

      As BMO’s Ian Lyngen wrote in his Fed post-mortem “it is not inconceivable that we see negative Treasury yields in the front end when Asia comes back on line”, and that’s precisely what has happened, when yields on several Treasury bonds expiring in the next three months are getting quoted at slightly negative levels during Asia hours following the Fed’s 100bps rate cut.

      One such example is the US govt bond maturing April 23, or in five weeks, which briefly dipped below zero, touching -0.01% after trading at 1.50% just two weeks ago.

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      And while so far NIRP is confined to short-dated maturities, expect to see negative rates migrating further right on the yield curve with every passing day, and as IG Markets’ analyst Kyle Rodda notes “everywhere effectively could see their yields under pressure and turn negative – you’ve got the Fed coming in cutting rates to near zero, and the Reserve Bank of New Zealand slashing to ensure liquidity in markets.”

      As Rodda correctly notes, “it’s all about keeping financial conditions and liquidity as supported as they can, and investors might take this as another reason to just pile into safety.”

      “It’s a sign the Fed and other central banks are doing whatever it takes to keep liquidity ticking, especially when we saw Treasuries trading almost like equities last week when all people wanted to do was hoard cash.”

      Then there is the question of the Fed’s ad hoc QE announcement which, as Powell’s press conference made clear, is being made up as we go along, with the Fed simply stating that “to support the smooth functioning of markets for Treasury securities and agency mortgage-backed securities that are central to the flow of credit to households and businesses, over coming months the Committee will increase its holdings of Treasury securities by at least $500 billion and its holdings of agency mortgage-backed securities by at least $200 billion. The Committee will also reinvest all principal payments from the Federal Reserve’s holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities.”

      Purchases will begin Monday on the below schedule, similar to Friday’s QE shocker:

      • 10:15 – 10:30 am: Treasury Coupons 0 to 2.25 year sector, for around $10 billion
      • 11:00 – 11:15 am: Treasury Coupons 2.25 to 4.5 year sector, for around $8 billion
      • 11:45 am – 12:00 pm: Treasury Coupons 4.5 to 7 year sector, for around $9 billion
      • 12:30 – 12:45 pm: Treasury Coupons 7 to 20 year sector, for around $5 billion
      • 1:15 – 1:30 pm: Treasury Coupons 20 to 30 year sector, for around $5 billion
      • 2:00 – 2:15 pm: TIPS 7.5 to 30 year sector, for around $3 billion

      It is this likelihood that the Fed will monetize anything and everything at far higher prices than market, coupled with a non-trivial probability that the Fed’s next move will, in fact, be to cut below zero, that will keep yields depressed, pushing them ever lower, especially if equities are locked out, until most of the curve eventually drops below zero.


      Tyler Durden

      Sun, 03/15/2020 – 22:45

    • February China Economic Data Collapses Massively More Than Expected
      February China Economic Data Collapses Massively More Than Expected

      While it may not be a surprise to too many people in the real world that Chinese macro-economic data for February was a disaster, it appears it was a massive shock to analysts and economists who forecast this data.

      • Chinese Retail Sales crashed 20.5% YTD YoY – the first annual drop on record and four times worse than the -4.0% expectation

      • Chinese Industrial Production collapsed 13.5% YTD YOY – the first annual drop on record and more than four times worse than the -3.0% expectation

      • Fixed Asset Investment plunged 24.5% YTD YoY – the first annual drop and more than twelve times worse than the expected 2.% contraction.

      And to go with those stunning numbers, Property Investment puked 16.3% YTD YoY and the Surveyed Jobless Rate exploded to a record 6.2%.

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      The retail collapse was across the board – restaurants and catering down 43.1%, clothing down 30.9%, jewelry down 41.1% are some of the bigger drops.

       

      But… just wait for the recovery! Oh wait, you mean this recovery?

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      As HSBC’s Julien Zhu told Bloomberg Television, this is “unprecedented” adding that the recovery is pretty cautious so far, warning “it will be a Herculean task to completely reverse everything this month.”

      Of course, with US futures already limit-down, we can’t really gauge any reaction yet though yuan is modestly weaker on the data.


      Tyler Durden

      Sun, 03/15/2020 – 22:21

    • Visualizing The History Of Pandemics… By Death Toll
      Visualizing The History Of Pandemics… By Death Toll

      Pan·dem·ic /panˈdemik/ (of a disease) prevalent over a whole country or the world.

      As humans have spread across the world, so have infectious diseases. In fact, as Visual Cpitalist’s Nicholas LePan notes, even in this modern era, outbreaks are nearly constant, though not every outbreak reaches pandemic level as the Novel Coronavirus (COVID-19) has.

      Today’s visualization outlines some of history’s most deadly pandemics, from the Antonine Plague to the current COVID-19 event.

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      A Timeline of Historical Pandemics

      Disease and illnesses have plagued humanity since the earliest days, our mortal flaw. However, it was not until the marked shift to agrarian communities that the scale and spread of these diseases increased dramatically.

      Widespread trade created new opportunities for human and animal interactions that sped up such epidemics. Malaria, tuberculosis, leprosy, influenza, smallpox, and others first appeared during these early years.

      The more civilized humans became – with larger cities, more exotic trade routes, and increased contact with different populations of people, animals, and ecosystems – the more likely pandemics would occur.

      Here are some of the major pandemics that have occurred over time:

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      Note: Many of the death toll numbers listed above are best estimates based on available research. Some, such as the Plague of Justinian, are subject to debate based on new evidence.

      Despite the persistence of disease and pandemics throughout history, there’s one consistent trend over time – a gradual reduction in the death rate. Healthcare improvements and understanding the factors that incubate pandemics have been powerful tools in mitigating their impact.

      Wrath of the Gods

      In many ancient societies, people believed that spirits and gods inflicted disease and destruction upon those that deserved their wrath. This unscientific perception often led to disastrous responses that resulted in the deaths of thousands, if not millions.

      In the case of Justinian’s plague, the Byzantine historian Procopius of Caesarea traced the origins of the plague (the Yersinia pestis bacteria) to China and northeast India, via land and sea trade routes to Egypt where it entered the Byzantine Empire through Mediterranean ports.

      Despite his apparent knowledge of the role geography and trade played in this spread, Procopius laid blame for the outbreak on the Emperor Justinian, declaring him to be either a devil, or invoking God’s punishment for his evil ways. Some historians found that this event could have dashed Emperor Justinian’s efforts to reunite the Western and Eastern remnants of the Roman Empire, and marked the beginning of the Dark Ages.

      Luckily, humanity’s understanding of the causes of disease has improved, and this is resulting in a drastic improvement in the response to modern pandemics, albeit slow and incomplete.

      Importing Disease

      The practice of quarantine began during the 14th century, in an effort to protect coastal cities from plague epidemics. Cautious port authorities required ships arriving in Venice from infected ports to sit at anchor for 40 days before landing — the origin of the word quarantine from the Italian “quaranta giorni”, or 40 days.

      One of the first instances of relying on geography and statistical analysis was in mid-19th century London, during a cholera outbreak. In 1854, Dr. John Snow came to the conclusion that cholera was spreading via tainted water and decided to display neighborhood mortality data directly on a map. This method revealed a cluster of cases around a specific pump from which people were drawing their water from.

      While the interactions created through trade and urban life play a pivotal role, it is also the virulent nature of particular diseases that indicate the trajectory of a pandemic.

      Tracking Infectiousness

      Scientists use a basic measure to track the infectiousness of a disease called the reproduction number — also known as R0 or “R naught.” This number tells us how many susceptible people, on average, each sick person will in turn infect.

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      Measles tops the list, being the most contagious with a R0 range of 12-18. This means a single person can infect, on average, 12 to 18 people in an unvaccinated population.

      While measles may be the most virulent, vaccination efforts and herd immunity can curb its spread. The more people are immune to a disease, the less likely it is to proliferate, making vaccinations critical to prevent the resurgence of known and treatable diseases.

      It’s hard to calculate and forecast the true impact of COVID-19, as the outbreak is still ongoing and researchers are still learning about this new form of coronavirus.

      Urbanization and the Spread of Disease

      We arrive at where we began, with rising global connections and interactions as a driving force behind pandemics. From small hunting and gathering tribes to the metropolis, humanity’s reliance on one another has also sparked opportunities for disease to spread.

      Urbanization in the developing world is bringing more and more rural residents into denser neighborhoods, while population increases are putting greater pressure on the environment. At the same time, passenger air traffic nearly doubled in the past decade. These macro trends are having a profound impact on the spread of infectious disease.

      As organizations and governments around the world ask for citizens to practice social distancing to help reduce the rate of infection, the digital world is allowing people to maintain connections and commerce like never before.

      Editor’s Note: The COVID-19 pandemic is in its early stages and it is obviously impossible to predict its future impact. This post and infographic are meant to provide historical context, and we will continue to update it as time goes on to maintain its accuracy.


      Tyler Durden

      Sun, 03/15/2020 – 22:15

    • 5 Times China Changed The Narrative, Tried To Blame The US For Covid-19
      5 Times China Changed The Narrative, Tried To Blame The US For Covid-19

      Authored by Jennie Taer via SaraACarter.com,

      The source of the Covid-19 global pandemic being Wuhan, China has become a problem for the Chinese Communist Party, who’s now trying to do everything they can to shift the blame.

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      With the level of control the Party has over its people, there’s no doubt Chinese citizens are falling prey to conspiracy theories promoting the lie that the U.S. is covering up their essential role in the pandemic.

      Here are five examples of that:

      1. Chinese official Lijian Zhao condemns U.S. officials 

      Lijian, Zhao, Foreign Ministry Spokesman & Deputy Director General of China’s Information Department, has criticized U.S. officials for making, what he says, are false accusations about the genesis of the virus.

      https://platform.twitter.com/widgets.js

      When translated to English, Zhao’s recent Tweet reads,

      “Q: Could it be that the US government’s position that the US military brought the virus to Wuhan?

      A: There have been some recent discussions about the source of the new coronavirus.”

      He continued, “We are firmly opposed to the various false and irresponsible remarks made by some senior US government officials and members of Congress. The international community, including the United States, has different views on the source of the virus. China always believes that this is a scientific issue and requires scientific and professional advice.”

      https://platform.twitter.com/widgets.js

      2. China Publishes multilingual book, A Battle Against Epidemic

      Publisher “China Book International” released a book praising the Chinese government under President Xi Jinping for it’s handling of the coronavirus outbreak.

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      “The book is compiled to show the strength of the Communist Party of China (CPC) leadership and China’s socialist system, as well as China’s efforts in strengthening cooperation with the international community to jointly safeguard global and regional public health security,” a press release stated.

      The book is also available in several languages including English, French, Spanish, Russian and Arabic. It’s currently available on Amazon, a global retailer.

      3. U.S. Blame on China is ‘immoral and irresponsible’

      A Chinese Foreign Ministry spokesperson Geng Shuang told CCTV Thursday that the U.S blame for the pandemic is ‘immoral and irresponsible.’

      “We urge the U.S. official to respect facts and the common understanding of the international community,” Geng told a press briefing.

      “Every minute wasted on smearing and complaining would be better spent on enhancing domestic response and international cooperation.”

      4. China’s State-run media calls for U.S. apology

      China’s state-run media outlet, Xinhua is one of the government’s strongest allies in pushing propaganda for public consumption. A recent piece published by the site calls on the U.S. to apologize to China.

      “We should say righteously that the U.S. owes China an apology, the world owes China a thank you,” an editorial in the outlet read.

      5. China’s manipulation of U.S. media

      On Twitter, a user reported seeing an altered CNN chyron, they say was changed by Chinese officials, that read “CDC confirms first Coronavirus case of ‘unknown’ origin in U.S.”

      https://platform.twitter.com/widgets.js

      The people of China on the receiving end of this information are spreading it like wildfire in WeChat groups. Further, they are warning others to a conspiracy that the U.S. government is orchestrating a coverup of a virus that they say, started in the U.S.


      Tyler Durden

      Sun, 03/15/2020 – 21:50

    • BOJ Announces It Will Bring Thursday's Policy Meeting To Noon Monday: Nikkei Jumps, Yen Drops
      BOJ Announces It Will Bring Thursday’s Policy Meeting To Noon Monday: Nikkei Jumps, Yen Drops

      With the Fed telegraphing an all out capital markets panic as the Fed could not wait a mere three days until the scheduled FOMC meeting to rush out the biggest monetary bazooka in history which proved to not be enough, the rest of the developed world’s central banks had no choice but to fall in line – after all if, one panics, all must panic. And sure enough, early on Sunday, the Bank of Japan announced it will hold an emergency meeting at noon local time, raising investor sentiment about global policy coordination amid the spread of the new coronavirus, and helping spike the Nikkei 225 up 1.6% on Monday morning, although the index has since given up much of the gains.

      The Bank of Japan announced on Monday morning that like the Fed, it too will move its policy meeting up to Monday afternoon rather than on Thursday as initially planned, as part of concerted efforts worldwide to shore up the global economy.

      Tokyo’s Nikkei Stock Average jumped nearly 300 points to 17,726, its first rise in four days after a turbulent week that sent global stock markets crashing over fears of a global economic slowdown, as the coronavirus pandemic hits global supply chains while cases continue to surge in Europe and the U.S. However it then quickly pared all gains before dipping modestly in the green.

      After the BOJ’s announcement, the yen declined 0.92 yen to 106.92 after surging as highas 105.80 per U.S. dollar as investors pinned hopes on monetary easing, driving demand for the dollar. However, in light of the $12 trillion dollar global margin call, we expect to see the yen, a global risk-off proxy, surge much, much higher before the day is done.

      While it is unclear just what additional credible steps the BOJ can offer, Takahide Kiuchi, a former BOJ policy board member writes that Kuroda will likely raise its annual purchase of ETFs funds to 9 trln yen from the current 6 trln yen, which however means that the central bank will simply end up nationalizing the market much faster than previously scheduled. The central bank could also theoretically lower its short-term interest rate target to minus 0.2% from minus 0.1% according to Kiuchi, now executive economist at Nomura Research Institute, although with Japan’s banks already screaming at the torture of years of NIRP, all this action will do is bring forward the demise of Japan’s banking sector.

      Which is precisely why Japan’s Kuroda is now completely trapped.

       

       

       


      Tyler Durden

      Sun, 03/15/2020 – 21:34

    • Half Of Young American Democrats Believe Billionaires Do More Harm Than Good
      Half Of Young American Democrats Believe Billionaires Do More Harm Than Good

      With income inequality the political hot potato du-jour and wealth concentration at its most extreme since the roaring twenties, is it any wonder that even Americans’ view of what used to be called ‘success’ is now tainted with the ugly taste of partisan ‘not-fair’-ism.

      Income inequality is roaring…

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      Wealth concentration is extreme to say the least…

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      But still, according to Pew Research’s latest survey, when asked about the impact of billionaires on the country, nearly four-in-ten adults under age 30 (39%) say the fact that some have fortunes of a billion dollars or more is a bad thing…

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      …with 50% of young Democrats.

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      “The recent reigning conventional wisdom over the last several decades of what I call the ‘Age of Capital’ is that [billionaires] are ‘up there’ because they are smarter than us,” said Anand Giridharadas, author of “Winners Take All: The Elite Charade of Changing the World.”

      But the Pew data, he says, suggest that young Americans are concluding that billionaires have amassed their wealth “through their rigging of the tax code, through legal political bribery, through their tax avoidance in shelters like the Cayman Islands, and through lobbying for public policy that benefits them privately.“

      “Bernie Sanders taught a lot of people [about wealth inequality], including people who did not vote for him,” Giridharadas said.

      “The billionaire class is ‘up there’ because they are standing on our backs pinning us down.”

      The good news – for the rest of America’s “capitalists” – is that a majority (58%) say the impact of billionaires on America is neither bad nor good.

      Finally, one quick question – where were all these under-30s when Bernie needed them the most in the Primaries? Was it all just virtue-signaling pro-socialist bullshit after all?


      Tyler Durden

      Sun, 03/15/2020 – 21:25

    • Not The Onion: ISIS Bans Followers From Jihad In "Plague" Hit Europe
      Not The Onion: ISIS Bans Followers From Jihad In “Plague” Hit Europe

      Via AlmasdarNews.com,

      The Islamic State (ISIS/ISIL/IS/Daesh) has issued a travel warning to its fighters this past week, urging them to avoid countries that have coronavirus outbreaks.

      According to scholar Aymenn Al-Tamimi, the Islamic State’s Al-Naba newsletter published a list of directives on how to handle this latest epidemic.

      The terrorist group has advised supporters to stay away from “the land of the epidemic”, and instead has offered tips for them to follow like washing their hands frequently and “cover the mouth when yawning and sneezing”.

      In the group’s latest al-Naba newsletter, instead of urging members to attack European cities, ISIS advises the healthy to not enter coronavirus-stricken areas in case they become infected, and “the afflicted should not exit from it”…

      The newsletter refers to a “plague” described as a “torment sent by God on whomsoever He wills”. — Yahoo News

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      The newsletter included various Hadiths on how to deal with illness: “On the authority of Abu Huraira… the messenger said: “And flee from the one afflicted with leprosy as you flee from the lion.”

      Some of the Hadiths mentioned ways to deal with the illness like placing your hand on your mouth when sneezing: “On the authority of Abu Huraira… he said: the Messenger of God would place his hand or clothing on his mouth when he sneezed, and in this way reduced or diminished his voice.”

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      Furthermore, Al-Arabiya reported that ISIS called on its fighters to avoid these countries where the coronavirus has broken out: “healthy people should refrain from entering virus-hit states, and infected people should not exit them.”

      While ISIS does not control large areas in Iraq, Syria, and Libya, they do maintain several sleeper cells in these countries that they occasionally activate to carry out sporadic attacks throughout these nations.


      Tyler Durden

      Sun, 03/15/2020 – 21:00

    • Global GDP Growth Estimates Are Plummeting
      Global GDP Growth Estimates Are Plummeting

      Authored by Daniel Lacalle,

      In February, the general consensus between large investment banks and supranational entities was that there would be a one-time hit on GDP in the first quarter from the coronavirus impact, followed by a stronger, V-shaped recovery. IMF expected a modest correction of global GDP of 0.1%, and the largest cut on estimates for 2020 growth was 0.4%.

      Those days are gone.

      The latest round of global growth revisions includes a slash of growth estimates for the first and second quarters and a very modest recovery in the third and fourth.

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      Average GDP estimates are now down 0.7%, and JP Morgan expects the eurozone to enter into a deep recession in the next two quarters (-1.8% and -3.3% in the first and second quarters) followed by a very poor recovery that would still leave the full-year 2020 estimate in contraction. The investment bank also assumes a slump in the United States of 2% and 3% respectively, but a full-year modest growth. Capital Economics estimates a hit on the U.S. economy for the full-year that would cut 0.8% off previous estimates, with the U.S. still growing, but a larger impact on the eurozone, with full-year 2020 growth at -1.2%, led by a -2% in Italy. This, unfortunately, looks like just the beginning of a downgrade cycle that adds to an already slowing economy in 2019.

      The decision to shut down air travel and close all non-essential businesses is now a reality in major global economies. The United States has banned all European flights at the same time as Italy enters into a complete lockdown, Spain declares state of emergency and France closes all non-essential activity. These decisions are key to contain the spread of the virus and try to prevent the collapse of healthcare systems, and our thoughts are with all of those infected and the victims. Shutting down travel and businesses generates a negative ripple effect on the economy. It is an important measure to avoid rapid spread and there will be more cancellations of events and activity.

      By now, we can at least get a clearer picture of the severity of the pandemic and in this blog we discuss economic consequences, so I believe it is important to remind of a few important factors:

      1. We cannot assume that the above-mentioned estimates are too pessimistic. If we have learned anything from the history of global growth estimates is that most of us tend to be more optimistic than realistic even in crisis periods. Most analysts did not see a crisis in 2008 and, even more importantly, a majority still did not see it in 2009, when it was evident. It is true that 80% of estimates at the beginning of any given year have to be revised, but not because they are too pessimistic, rather the opposite.

      2. Calls for large fiscal packages to offset the pandemic may be useless Allen-Reynolds at Capital Economics warned that “even if governments agreed on a larger tax and spending package, the economic impact would be much smaller than it would have been in the past, particularly if the fiscal stimulus was concentrated in Germany”, because output gaps are almost inexistent. This is not a demand problem, it is a supply shock, and you don’t address supply shocks with bricks, mortar and deficit spending.

      3. A third-quarter rapid recovery is now virtually impossible. The shutdown of developed economies is now granted and will likely take us more than a couple of weeks. The shutdown of emerging economies is likely to start in May, and impact 2020 and 2021 estimates. Every analysis we have seen so far only factors a 2020 recession, not a crisis and even less a 2021 large hit to the economy, but the financial implications in an already over-leveraged world add a strong of credit events to an economic shutdown.

      4. The latest wave of downgrades already assumes a large-scale stimulus, rate cuts, and quantitative easing. The diminishing returns of monetary easing were already evident in 2018 and especially in 2019, with global manufacturing PMIs in contraction and growth estimates that came down significantly throughout the year. Average growth downward revisions by country averaged 20% between January and December in the middle of a massive coordinated central bank injection operation that injected up to 170 billion USD a month in the economy (considering PBOC, BOJ, ECB, and Fed) and saw widespread rate cuts.

      5. The economic implications of a pandemic are not solved with massive spending increases. Governments will implement large demand-side policies that are the wrong answer to a shutdown of the economy. Most businesses will suffer from the collapse in sales and subsequent working capital build and none of that will be solved with deficit spending. You cannot mitigate a supply shock with demand policies, which increase debt and overcapacity in the already indebted and bloated sectors and do not help the sectors that suffer an abrupt collapse in activity.

      6. A forced temporary shutdown must also include a shutdown of the tax collection system. Governments already finance themselves at negative rates. They must eliminate (not defer) tax payments for companies in the period of crisis to avoid a massive unemployment increase and a domino of bankruptcies, and facilitate working capital lines at zero rates to allow businesses and self-employed workers to navigate a shutdown. Governments that make the mistake of maintaining the current tax structure or just prolong the payment period for six months will see the massive negative consequences of a shutdown in the next nine months.

      If, as expected, the shutdown is extended to more countries every week, the negative effects on the economy will be longer and exponential, and the mirage of a third-quarter recovery even more difficult.

      It is very likely that the shutdown of the major developed economies will be followed by a shutdown of emerging markets, creating a supply shock as we have not seen in decades. Taking massive inflationary and demand-driven measures in a supply shock is not only a mistake, it is the recipe for stagflation and guarantee of a multi-year negative impact generated by rising debt, weakening productivity, rising inflation in non-replicable goods while deflation creeps in official headlines, and economic stagnation.


      Tyler Durden

      Sun, 03/15/2020 – 20:35

    • 2nd Congressional Staffer Tests Positive; More Capitol Hill Offices Work Remotely
      2nd Congressional Staffer Tests Positive; More Capitol Hill Offices Work Remotely

      Sunday evening The Hill reports that a second Congressional aide has tested positive for Covid-19. 

      “A staff member in Rep. David Schweikert’s (R-Ariz.) D.C. office has tested positive for COVID-19, the congressman said Sunday,” according to the report.

      The individual is resting “comfortably at home and following guidance from local health officials,” Schweikert said in a statement. 

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      The Capitol visitor’s center stands empty. Image source: Reuters.

      This follows the first known instance of a congressional aide getting the virus after on Thursday Washington state Democratic Senator Maria Cantwell announced the immediate closure of her office due to a confirmed case on her staff.

      The Capitol building also closed to all external visitors and the public at that time, amid more and more Congress members announcing they would be working from home.

      As Vox describes: 

      Capitol hallways, usually bustling with visitors at this time of year, are mostly empty as public tours have been canceled. Some members of Congress, including Sens. Lindsey Graham and Ted Cruz, are self-quarantining after coming into contact with individuals diagnosed with Covid-19, the disease caused by the coronavirus, and they’re now waiting for the results of their own tests. A handful of House and Senate offices are also making the decision to close down their DC offices and directing staff to work remotely.

      At least 16 cases of Covid-19 were confirmed in DC as of Saturday after days before the mayor declared a state of emergency in the city, also with newly announced restrictions on bars and restaurants starting Sunday.

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      Rep. Schweikert announced his office will be closing until further notice as staff members work remotely. His office in Scottsdale, Arizona is also preparing to work from home out “an abundance of caution.” 

      Many more such announcements for Capitol Hill staffers to “go remote” are expected this week as the crisis continues, and as more confirmed positive cases emerge. 

      However, House Speaker Nancy Pelosi previously pledged to lawmakers that as “captains of the ship” they would be “the last to leave.”


      Tyler Durden

      Sun, 03/15/2020 – 20:10

    • Bernie Vs. Biden In 11th Democratic Debate
      Bernie Vs. Biden In 11th Democratic Debate

      Joe Biden will face off with Sen. Bernie Sanders (I-VT) during tonight’s Democratic debate.

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      The former Vice President will need to remain calm and focused after several recent gaffes – including telling a Detroit autoworker that he’s “full of shit” for criticizing him over his plans for the Second Amendment, causing some to question his mental fitness to be president.

      Watch live:

      Snippets and hot-takes:

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      Tyler Durden

      Sun, 03/15/2020 – 19:55

    • With All Eyes On Outbreak, Putin Signs Law That Could See Him In Power To 2036
      With All Eyes On Outbreak, Putin Signs Law That Could See Him In Power To 2036

      With the world focused on combating the deadly coronavirus pandemic, and whole societies across the West hunkering down in quarantine mode, President Putin authorized a controversial law on constitutional changes that could theoretically allow him to be president until 2036. 

      The 67-year old Russian president signed the measure Saturday, which barely made a blip in world headlines considering highly impacted Covid-19 countries are simply now fighting to survive and stabilize their economies through the outbreak. The proposed change to the Russian constitution is still subject to a national vote, however.

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      Russian President Vladimir Putin, via the AP.

      First the Constitutional Court must rule on the legality of the changes, which would lead to the next step, a planned nationwide vote on April 22. It passed easily through Russian parliament last week with a mere single vote against it.

      Currently, Putin is barred from running for president again when his term expires in 2024, given term limits, but the new law would reset this. A single presidential term is 6 years.

      Speaking at the State Duma last Tuesday, Putin appealed the stability of the nation during chaotic and uncertain times of enemies both within and without:

      It’s important, he said, for a president to ensure the country’s “evolutionary development.” Now, he said, is not the time to move too quickly to change how Russian state power operates: “We have had enough revolutions.”

      Perhaps most interesting was that he actually appealed to the historical development of the same issue in the United States:

      Putin told lawmakers on Tuesday that he did not endorse completely eliminating presidential term limits, one element of the proposal by Tereshkova. But he strongly backed the idea of resetting the number of terms for which he could run.

      In his appeal to parliament, Putin also pointed to other countries that have no restrictions on presidential terms. Even in the United States, he said, the two-term limit has only been in place since the 22nd Amendment was ratified in 1951.

      Among other constitutional changes authorized by Putin are a permanent constitutional outlawing of same-sex marriage, as well as inclusion in “a belief in God” named as one of Russia’s traditional values.

      All of this follows Putin’s major January shake-up which led to the resignation of the government. Though Putin touted the move as giving more power to parliament and democratic institutions, critics in the West saw it as ultimately leading to his solidifying his further rule and hold across other Russian branches of government.


      Tyler Durden

      Sun, 03/15/2020 – 19:45

    • Chaos As 'Enhanced Screening' Airports Overwhelmed; US Citizens Scramble Back From Europe
      Chaos As ‘Enhanced Screening’ Airports Overwhelmed; US Citizens Scramble Back From Europe

      Since Trump’s Europe travel ban went into effect, Americans returning home have been diverted through just thirteen US airports, also as new federal travel requirements and coronavirus ‘enhanced’ screening instituted by President Trump are implemented.

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      Videos and photos posted to social media reveal a weekend of insanity and packed airport queues in an increasingly ‘high risk’ health crisis.

      Chicago’s O’Hare International Airport revealed the most chaotic scenes: thousands standing should-to-shoulder in an airport corridor amid a deadly pandemic, reportedly for at least seven hours before entering the screening area and airport exit.

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      Airports authorized to receive return flights from Europe, and which are set up for Covid-19 screening, include the following according to the advisory:

      • Atlanta: Hartsfield–Jackson Atlanta International Airport (ATL)
      • Boston: Boston Logan International Airport (BOS)
      • Chicago: Chicago O’Hare International Airport (ORD)
      • Dallas/Fort Worth: Dallas/Fort Worth International Airport (DFW)
      • Detroit: Detroit Metropolitan Airport (DTW)
      • Honolulu: Daniel K. Inouye International Airport (HNL)
      • Los Angeles: Los Angeles International Airport (LAX)
      • Miami: Miami International Airport (MIA)
      • New York City: John F. Kennedy International Airport (JFK)
      • Newark, N.J.: Newark Liberty International Airport (EWR)
      • San Francisco: San Francisco International Airport (SFO)
      • Seattle: Seattle-Tacoma International Airport (SEA)
      • Washington, D.C.: Washington-Dulles International Airport (IAD)

      O’Hare Airport acknowledged Saturday in a public statement that screening and control areas were taking “longer than usual”. The ‘enhanced screening’ includes a temperature check and questions about flyers’ recent travel history.

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      The airport chaos led to a response from Illinois Gov. J.B. Pritzker who tweeted that the situation at O’Hare and the massive crowds were “unacceptable”.

      Other officials slammed the intensifying situation as creating a serious health risk. 

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      Airport staff at O’Hare and other airports were seen handing out snacks, water, hand sanitizer and disinfectant wipes to the anxious crowds. 

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      The WSJ interviewed one frustrated passenger who described the Covid-19 screening measures: 

      Lonnie Corpus was returning from Iceland with friends—retired teachers from Wisconsin. Their flight landed at 6:40 p.m. They made it out at about 11 p.m. The questioning itself, and a quick temperature check, didn’t take long once they made it to the front of the line that snaked around corners.

      State and local officials are now urging the federal government to step in and assist with the massive delays and airport infrastructure strain, but whatever drastic action might be taken increasingly looks too little too late. 


      Tyler Durden

      Sun, 03/15/2020 – 19:20

    • Listen Live: Fed's Powell Holds Emergency Phone Conference Explaining Why Nothing Is F**ked Here
      Listen Live: Fed’s Powell Holds Emergency Phone Conference Explaining Why Nothing Is F**ked Here

      Powell better explain why the market’s reaction is wrong or else…

      Here are the highlights from Bloomberg:

      • *POWELL: FED’S ROLE IS GUIDED BY OUR MANDATE
      • *POWELL: U.S. ECONOMY WAS ON A SOLID FOOTING BEFORE VIRUS STRUCK
      • *POWELL: WEAKNESS ABROAD WILL WEIGH ON U.S. EXPORTS
      • *POWELL: POLICY MAKERS MUST DO WHAT WE CAN TO EASE HARDSHIP
      • *POWELL: INFLATION WILL LIKELY BE HELD DOWN THIS YEAR BY VIRUS
      • *POWELL: VIRUS PRESENTS SIGNIFICANT ECONOMIC CHALLENGES
      • *POWELL: VIRUS WILL MEAN LOWER ECONOMIC ACTIVITY FOR PERIOD
      • *POWELL: SEVERAL FINANCIAL MARKETS HAVE SHOWN SIGNS OF STRESS
      • *POWELL: WE ENCOURAGE BANKS TO TURN TO THE DISCOUNT WINDOW
      • *POWELL: 2Q ECONOMY IS PROBABLY GOING TO BE WEAK
      • *POWELL: TODAY’S FOMC’S MEETING IN LIEU OF THE TUES/WED MEETING
      • *POWELL SAYS FOMC WON’T HOLD ITS PLANNED MEETING THIS WEEK
      • *POWELL: FORWARD GUIDANCE, ASSET PURCHASES ARE OUR BASIC TOOLKIT
      • *POWELL: ASSET PURCHASES ARE AIMED AT RESTORING MARKET FUNCTION
      • *POWELL: BOND BUYING WILL FOSTER MORE ACCOMMODATIVE CONDITIONS
      • *POWELL: WHAT WE DID TODAY WILL BE BENEFICIAL TO FINANCIAL MKTS
      • *POWELL: 2Q ECONOMY IS PROBABLY GOING TO BE WEAK
      • *POWELL: HARD TO SAY HOW BIG EFFECTS WILL BE, HOW LONG WILL LAST
      • *POWELL: WE WILL CONTINUE CLOSELY MONITOR DEVELOPMENT
      • *POWELL: WE DON’T HAVE THE TOOLS TO REACH INDIVIDUALS, SMALL BIZ
      • *POWELL: DON’T SEE NEGATIVE RATES AS APPROPRIATE POLICY IN U.S.
      • *POWELL: FISCAL POLICY IS A WAY TO DIRECT MORE TARGETED RELIEF
      • *POWELL: WE DO THINK FISCAL RESPONSE IS CRITICAL
      • *POWELL: RESTORING MARKET FUNCTION SUPPORTS ECONOMIC ACTIVITY
      • *POWELL: ASSET BUYS AIMED AT SUPPORTING CREDIT AVAILABILITY
      • *POWELL: FED NOT SEEKING PERMISSION TO BUY OTHER SECURITIES
      • *POWELL: ASSET BUYS AIMED AT SUPPORTING CREDIT AVAILABILITY
      • *POWELL: FED IS GOING TO BUY SECURITIES AT A STRONG RATE
      • *POWELL: THAT LANGUAGE IS OPEN ENDED, SENDING SIGNAL TO MARKET
      • *POWELL: WE’RE GOING IN STRONG STARTING TOMORROW, ACROSS CURVE
      • *POWELL: WE’LL WILLING TO BE PATIENT ON RATES
      • *POWELL: WATCHING TO DETERMINE IF ECONOMY HAS WEATHERED VIRUS
      • *POWELL SAYS HE FEELS FINE, VERY WELL, NO REASON TO BE TESTED
      • *POWELL: LOT OF POWER IN OUR LIQUIDITY TOOLS, FORWARD GUIDANCE
      • *POWELL: WE HAVE PLENTY OF SPACE TO ADJUST OUT POLICY
      • *POWELL: DECIDED THURSDAY TO MOVE THE MEETING UP BY THREE DAYS
      • *POWELL: MAKING A FORECAST IN CURRENT CLIMATE DIDN’T SEEM USEFUL
      • *POWELL: U.S. ECONOMY STARTED FROM STRONG POSITION
      • *POWELL: 2Q WILL BE WEAKER, HARD TO SAY WHAT WILL HAPPEN IN 2H
      • *POWELL: NO FED FORECASTS THIS MONTH, NEXT LIKELY IN JUNE
      • *POWELL: FISCAL POLICY CAN REACH DIRECTLY TO AFFECTED SECTORS
      • *POWELL: BROADER FISCAL STIMULUS WILL DEPEND ON PATH OF ECONOMY
      • *POWELL: HARD TO SAY WHAT WILL HAPPEN BUT MAY BE NEED FOR THAT
      • *POWELL: WILL WATCH TREASURY MARKETS FOR RETURN TO NORMAL
      • *POWELL: WILL USE TOOLS TO SUPPORT MARKET FUNCTION, CREDIT FLOW
      • *POWELL: ECONOMIC DATA WILL FOLLOW THE SPREAD OF THE VIRUS
      • *POWELL: DURATION OF VIRUS EFFECTS WILL HINGE ON MEASURES TAKEN
      • *POWELL: WE HAVE PLENTY OF POWER LEFT IN OUR TOOLS, POLICY SPACE
      • *POWELL: THERE IS ROOM FOR US TO DO WHAT WE NEED TO DO
      • *POWELL: FISCAL POLICY TYPICALLY PLAYS A MAJOR ROLE IN DOWNTURNS
      • *POWELL: BANKS ARE HIGHLY CAPITALIZED, SYSTEM IS RESILIENT
      • *POWELL: WE’RE IN ONGOING CONTACT WITH MAJOR CENTRAL BANKS


      Tyler Durden

      Sun, 03/15/2020 – 18:48

    Digest powered by RSS Digest

    Mar 15

    Today’s News 15th March 2020

    • A 70-Year War On "Propaganda" Built By The CIA
      A 70-Year War On “Propaganda” Built By The CIA

      Authored by Cynthia Chung via The Strategic Culture Foundation,

      “Hell is empty and all the devils are here”

      – William Shakespeare (The Tempest Act 1 Scene 2)

      War has always depended on a reliable system to spread its propaganda. The Arthashastra written by Chankya (350-283 BCE) who was chief advisor to the Emperor Chandragupta (the first ruler of the Mauryan Empire) discusses propaganda and how to disperse and apply it in warfare. It is one of the oldest accounts of the essentialism of propaganda in warfare.

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      Propaganda is vital in times of war because it is absolutely imperative that the people, who often need to make the greatest sacrifices and suffer the most, believe that such a war is justified and that such a war will provide them security. To the degree that they believe this to be true, the greater the degree of sacrifice and suffering they are willing to submit themselves for said “promised security”.

      It is crucial that when the people look at the “enemy” they see something sub-human, for if they recognise that said “enemy” has in fact humanity, the jig is up so to speak.

      And thus we are bombarded day after day, hour after hour of reminders as to why the “enemy” is not human like us, not compassionate like us, not patient, just and wise like us.

      No doubt, war has been a necessary response when tyranny has formed an army to fight for its cause, but I would put forth that most wars have been rather unnecessary and downright manipulated for the design of a small group of people.

      During WWI, on Dec 25th 1914, something rather unexpected occurred and a series of widespread unofficial ceasefires along the Western Front took place between the French/British soldiers and the German soldiers. Some even ventured into “no man’s land”, given its name since none left it alive, to mingle with the “enemy” and exchange food and souvenirs. There were joint burial ceremonies and prisoner swaps. A game of football took place as well. It is said that these truces were not unique to the Christmas period but that they were much more widespread during the holiday season.

      These fraternisations would understandably make it quite difficult to return to combat against one another…for no apparently good reason. Some units needed to be relocated since they had developed friendships with the opposing side and now refused to fight them.

      The lesson was quickly learned and propaganda was heavily pumped down the throats of the Allied countries, and by the course of just a few years, they no longer viewed the Germans as human.

      The CIA’s Family Jewels and Operation Mockingbird

      For us to understand the implications of modern propaganda and how it is used in warfare today, our story starts post-WWII with Churchill’s announcement of the “Iron Curtain” which launched the Cold War and has kept the East and West divided to this day.

      Quickly after the Cold War was announced by Churchill, it was necessary to create a fervor of fear and paranoia amongst the American people in order to have them quickly forget the fact that the Russians were their greatest allies during both WWI and WWII, and to replace it with the image of a ghoulish race of boogeymen.

      If Americans were to remember that the Russians had fought valiantly during WWII and had paid by far the largest sacrifice to the cause, that they had in fact been their comrades in arms against the brutality of fascism, if this were remembered then the Cold War division could never occur, and that was something that could not be tolerated by Churchill and the Empire. Thus terror was unleashed on the American people and McCarthyism was given precedence over the people’s right to question and form conclusions for themselves. That sort of thing could not be tolerated when the “enemy” could be anywhere; they could be your neighbour, your child’s teacher, your co-worker…your partner.

      In order to combat the “threat” of Soviet “propaganda” entering the U.S. and seducing Americans, Operation Mockingbird was created as a form of “control” over information dissemination during the period of McCarthyism. Operation Mockingbird was an “alleged” CIA program that was started in the early 1950s in order to control the narrative of the news. Though this role has never been confirmed entirely, in the CIA Family Jewels report compiled in the mid-1970s, it is confirmed that Project Mockingbird did exist as a CIA operation and that it was guilty of wire-tapping journalists in Washington.

      At the helm of this project was none other than CIA Director Allen Dulles, an enemy of JFK, who by the early 1950s “allegedly” oversaw the media network and had major influence over 25 newspapers and wire agencies. Its function was to have the CIA write reports that would be used by a network of cooperating “credible” reporters. By these “credible” reporters spreading the CIA dictated narrative, it would be parroted by unwitting reporters (mockingbirds) and a successful echo chamber would be created across the world.

      The Office of Policy Coordination (OPC), originally named Office of Special Projects but that was thought to conspicuous, was a covert operation wing of the CIA and was created by the United States National Security Council (NSC). For those who are unfamiliar with the origins of the NSC and its close relationship with the CIA, who was born on the same day, refer to my paper on the subject.

      According to Deborah Davis’ biography of Katherine Graham (the owner of Washington Post), the OPC created Operation Mockingbird in response to addressing Soviet propaganda and included as part of its CIA contingency respected members from Washington Post, The New York Times, Newsweek, CBS and others.

      The Family Jewels report was an investigation made by the CIA to investigate…the CIA, spurred in response to the Watergate Scandal and the CIA’s unconstitutional role in the whole affair. The investigation of the CIA would include any other actions that were deemed illegal or inappropriate spanning from the 1950s-mid 1970s.

      We are told “most” of the report was declassified on June 25, 2007 (30 years later) hoping that people would have lost interest in the whole brouhaha. Along with the release of the redacted report was included a six-page summary with the following introduction:

      “The Central Intelligence Agency violated its charter for 25 years until revelations of illegal wiretapping, domestic surveillance, assassination plots, and human experimentation led to official investigations and reforms in the 1970s.”

      The most extensive investigation of the CIA relations with news media was conducted by the Church Committee, a U.S. Senate select committee in 1975 that investigated the abuses committed by the CIA, NSA, FBI, and IRS. The Church Committee report confirmed abundant CIA ties in both foreign and domestic news media.

      It is very useful that there exists an official recognition that false news was not only being encouraged by the CIA under the overseeing of the NSC during the Cold War period, but that the CIA was complicit in actually detailing the specific narrative that they wanted disseminated, and often going so far as to write the narrative and have a “credible” reporter’s name stamped on it.

      But the question begs, “Did the Cold War ever end?” and if not, why should we believe that the CIA’s involvement in such activities is buried in its past and that it has “reformed” its old ways?

      Western Journalists for Hire: How the CIA Buys News

      In order to answer this question, let us visit the sad case of Udo Ulfkotte. Udo Ulfkotte is a well-known German journalist and author of numerous books. He worked for 25 years as a journalist, 17 of which were for Frankfurter Allgemeine Zeitung (FAZ), including his role as editor. In his 2014 book “Journalists for Hire: How the CIA Buys News” Ulfkotte goes over how the CIA along with German Intelligence (BND) were guilty of bribing journalists to write articles that either spun the truth or were completely fictitious in order to promote a pro-western, pro-NATO bent, and that he was one of those bought journalists.

      In an interview, Ulfkotte describes how he finally built up the nerve to publish the book, after years of it collecting dust, in response to the erupting crisis in Ukraine stating “I felt that the right time had come to finish it and publish it, because I am deeply worried about the Ukrainian crisis and the possible devastating consequences for all of Europe and all of us…I am not at all pro-Russia, but it is clear that many journalists blindly follow and publish whatever the NATO press office provides. And this type of information and reports are completely one-sided”.

      In another interview Ulfkotte stated:

      “it is clear as daylight that the agents of various Services were in the central offices of the FAZ, the place where I worked for 17 years. The articles appeared under my name several times, but they were not my intellectual product. I was once approached by someone from German Intelligence and the CIA, who told me that I should write about Gaddafi and report how he was trying to secretly build a chemical weapons factory in Libya. I had no information on any of this, but they showed me various documents, I just had to put my name on the article. Do you think this can be called journalism? I don’t think so.”

      Ulfkotte has publicly stated: “I am ashamed of it. The people I worked for knew from the get-go everything I did. And the truth must come out. It’s not just about FAZ, this is the whole system that’s corrupt all the way.”

      Udo Ulfkotte has since passed away. He died January 2017, found dead in his home, it is said by a hear t attack. His body was quickly after cremated and thus prevented any possibility of an autopsy occurring.

      You Can’t Teach An Old Dog New Tricks

      The Countering Foreign Propaganda and Disinformation Act is a bipartisan bill that was passed into law in December 2016, it was initially called Countering Information Warfare Act. It was included together with the National Defense Authorization Act (NDAA). This bill was brought into effect just weeks before Trump was to enter office….hmmm, foreshadowing much?

      Soon after the 2016 U.S. election, the Washington Post led the charge asserting that it was due to Russian propaganda that the U.S. elections turned out the way it did, that is, that Hillary had somehow, inconceivably, lost to Donald Trump and that the American people had been turned against her like a child caught in the middle of a messy divorce case. But there is no need here to set the record straight on Hillary, when Hillary herself has done suffice damage to any illusion of credibility she once had. That ultimately not even Hillary could hide the fact that her closet full of skeletons turned out to be the size of a catacomb.

      But we are told that citizens do not know what is best for one’s self. That they cannot be trusted with “sensitive” information and in accordance act in a “responsible” manner, that is, to have a strong enough stomach to do what is “best” for their country.

      And therefore, fear not subjects of the land, for the Global Engagement Center (GEC) is here to make those hard decisions for you. Don’t know what to think about a complicated subject? GEC will tell you the right way!

      The National Defense Authorization Act (NDAA) would allow for the Secretary of State to collaborate with the Secretary of Defense, and other Federal agencies in the year 2017 to create the Global Engagement Center (GEC). The GEC’s purpose in life is to fight propaganda from foreign governments and publicize the nature of ongoing foreign propaganda and disinformation operations against the U.S. and other countries.

      Let us all take a moment to thank the GEC for such a massive task in the cause for justice all around the world.

      The GEC had a very slow start in its first year, however, it has been gaining momentum in the last year under Secretary of State Mike Pompeo, who seems especially excited over the hiring of Lea Gabrielle as special envoy and coordinator of GEC.

      Mike Pompeo was the CIA Director from 2017-2018. On April 15, 2019, Pompeo participated in a discussion at the Texas A&M University where he voluntarily offered the admission that though West Points’ cadet motto is “You will not lie, cheat, or steal, or tolerate those who do.”, his training under the CIA was the very opposite, stating “I was the CIA Director. We lied, we cheated, we stole. It was like we had entire training courses. (long pause) It reminds you of the glory of the American experiment”.

      This is apparently the man for the job of dealing with matters of “truth” and “justice”.

      Lea Gabrielle was approved for her position by Mike Pompeo, what are her “qualifications”? Well, Gabrielle is also CIA trained, and while assigned to the Defense Intelligence Agency (DIA), she “directed and conducted global clandestine strategic intelligence collection operations.” Gabrielle also “deployed in tactical anti-terrorist operations in hostile environments”. After 12 years of active duty service, Lea Gabrielle became a television news journalist, who worked at NBC and FOX News.

      Noticing a pattern?

      The CIA really does not have the best track record for their role in “managing” foreign wars and counter-insurgency activities. In fact, they have been caught rather red handed in fueling such crisis situations. And these are the people who are deciding what information is fit for the American public, and western public in general, and what is not fit for their ears.

      Hear No Evil, Speak No Evil, See No Evil

      On March 5, 2020, Lea Gabrielle testified on the role of GEC in countering state-sponsored and non-state propaganda and disinformation. Gabrielle states: “We have the full support of Secretary Pompeo who is committed to deploying a broad suite of tools to stop America’s adversaries from using disinformation, malign propaganda, and other tools to undermine free societies.” She goes on to acknowledge that the hearing is focused on countering Russian government and CCP disinformation and propaganda. She then goes on to outline her criticisms of both governments with no factual detail or evidence but rather generalised accusations and criticisms, obviously pulling from her experience as a news journalist for NBC.

      Following this, Gabrielle proceeds to outline her “rules of engagement” in countering this offensive with what seems to be the beginnings of McCarthyism 2.0, amounting to a threat to anyone who dares not take a hard stance against Russia and China, that such a person will be considered complicit in essentially committing treason. Hell, if Bernie Sanders and Tulsi Gabbard (who was unconstitutionally prohibited from participating in the final democratic presidential debates) have both already been accused of being a Russian agent, what can we expect for the average Joe?

      Gabrielle concludes, “Both the Russian government and the CCP view censorship, media manipulation, and propaganda as appropriate tools to control public opinion. Both exploit open, democratic societies to further their own ends while tightening controls around their own countries.”

      Don’t worry, the CIA will eventually admit that they are elbow deep in all of the above, it just won’t be released until 30 years from now…In the meantime, I wouldn’t believe everything you read in the newspaper to stoke the fires for another war.


      Tyler Durden

      Sun, 03/15/2020 – 00:20

    • Covid-19 Pandemic To Crash Sex Worker Income
      Covid-19 Pandemic To Crash Sex Worker Income

      The world has already transitioned into panic about Covid-19. Widespread social, political, and economic disruptions have developed. Hard-hit countries, as we noted last week, have responded with a similar blueprint of shutting down their economies for virus containment purposes. 

      Social distancing has been one of the most widely enforced policies by governments, imposed on their citizens to mitigate the spread of the highly contagious disease. As a result, sex workers in many countries have seen their incomes crash as clients abide by the new public health policies, reported Vice News. 

      Let’s first start with defining social distancing. It’s a public health practice that aims to reduce disease transmission, including canceling large public gatherings, closing public spaces, working from home, and avoiding other people. The purpose is to slow down the outbreak to reduce the rate of infections and to reduce overwhelming the health care system. 

      Sex workers, many of which depend on the intimate physical interaction of their clients to get paid, are warning that social distancing could leave them penniless in the near term: 

      “A lot of sex workers are freaking out right now,” said Andrea Werhun, 30, a stripper based in Toronto.

      Multiple sex workers told VICE their clientele volumes at clubs had seen a notable drop since social distancing policies have been implemented across North America.

      “I feel like my career as a dancer is in jeopardy as it becomes increasingly less viable to hang out in crowds, which is kind of what I do every Friday and Saturday night in order to make money,” Werhun said.

      Werhun said businessmen are a considerable part of her client book. Still, since corporations have told employees to work remotely and restrict travel – this has led to the decline in her business. She said strippers don’t have the luxury of a salary or sick days: 

      “It’s a big, big blow,” she said. “Locals and regulars are keeping sex workers afloat right now.”

      Werhun has thought about diversifying to live streaming performances at home if a nationwide lockdown was seen. 

      She has yet to screen clients who could be carriers of the disease. Community spreading has already taken place in major metro areas in North America; the true extent of the spread is still unknown as test kits lack. 

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      Americas Covid-19 Virus Map 

      Amanda Winters, 27, a stripper based in Miami, told VICE she started stripping to pay off student loans, and now she’s struggling to make ends meet as clients avoid clubs out of fear, they might contract the virus.

      “I am getting more concerned about my financial situation,” Winters said. “On a stable schedule, I often would have two to four good clients a night…the past week—going on two now—I have had one full client.”

      Winters said if the business at the Miami club remains low – she might be forced to live stream at home. 

      Taylor Stevens, 29, a diversified stripper bouncing between Toronto and Las Vegas, has live stream shows that are doing well. She said in recent weeks, traffic volume from Italy was off the charts. 

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      Taylor Stevens

      Toronto dominatrix Lady Pim told Vice she’s preparing for a Covid-19 downturn and has diversified her sex work. 

      “It’s kind of looking like parts of Canada could go into a time where we aren’t going to be able to leave our houses—then, your livelihood might be threatened, like, I’m not on salary, I don’t have sick days,” said Lady Pim. 

      “My sex work is diversified. I will still make a portion of my income doing it from home with Skype sessions, texting dominations, and phone call dominations, so a quarantine wouldn’t lead to a complete loss in income,” she said.

      Lady Pim said quarantines would drive people to pay for online sex: 

      https://platform.twitter.com/widgets.js

      “If we’re in lockdown—just by ourselves, don’t have a partner, and don’t have any sex or kink outlets—then I can 100 percent see people turning around to do a Skype session or phone session.”

      Smart strippers are now diversifying their sex work before a “coronavirus winter” leads to mass quarantines and an economic crash. 


      Tyler Durden

      Sat, 03/14/2020 – 23:55

    • The S**t Might Actually Be Hitting The Fan But Somehow It Doesn't Feel Real
      The S**t Might Actually Be Hitting The Fan But Somehow It Doesn’t Feel Real

      Authored by Daisy Luther via The Organic Prepper blog,

      So here we are. Right on the cusp of that SHTF event that we’ve been prepping for all these years.

      A global pandemic.

      A breakdown in the supply chain.

      Shoppers who are already becoming agitated and even violent.

      We’re watching it all unfold in our hometowns and across our nation right now.

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      Yet, somehow, it still doesn’t feel real to me. Is it just me who finds this hard to fathom? Am I the only one who still thinks doubtful thoughts? Like “No way. It’s going to be okay. You’re overreacting. It’s a little scare, just like Ebola and MERS and SARS.”

      I’ve researched and written about this stuff for years. I always knew it could happen. I was whole-heartedly convinced of these possibilities and yet when this situation began to move irrevocably toward disaster, I find myself, somehow, shocked.

      I can’t be the only one who has prepared for this yet still feels stuck in normalcy bias, thinking “this isn’t going to get as bad as you think” even as I watch the events unfold around us pretty much like we in the survival community always predicted. There’s still that doubtful voice in my head, making me wonder about spending even more money on another “last” shopping trip.

      Heck, maybe this makes me a bad prepper. A fake survivalist. A fraud.

      Or maybe it’s only natural to think that life will keep moving on pretty much like it always has.

      Will Covid-19 really be the thing that brings us down? Will the nation devolve into chaos? I’d like to say no with firm conviction. After all, there have been close calls before. But the rational part of me won’t allow that firm conviction, despite the part that says, don’t be silly, everything will be just fine after a brief blip.

      I believe it’s okay to feel this way as long as you don’t allow it to get in the way of your preparations or of your acceptance of the disaster when it actually unfolds in all its shocking reality.

      Maybe I’m oversharing here and a whole bunch of folks will unsubscribe. I don’t know. But if others are feeling the same way, I want you to know that you aren’t alone.

      Instincts vs. Normalcy Bias

      I think people have come down on one of two sides since the Covid-19 virus first came onto our radar back in late December or early January. Some people have thought, “This is the next plague” while others have thought, “So what? The flu is more deadly.” Now that we’re down to the wire, we’ll soon find out which line of thinking was the most accurate.

      A lot of this goes down to a decision. Are you going to believe your gut or are you going to believe the logical normalcy bias that tells you this isn’t how things go in the United States of America?

      My gut has been telling me since mid-January that this thing is a major event. After all, would China have tanked its economy and locked down a city of 20 million people, welding their doors closed in many cases, if this novel coronavirus was no big deal? Would Italy have locked down their entire country and begun turning away patients over the age of 65 to funnel resources to those more likely to survive if this was just another common, everyday flu?

      But the logical side of me says, “This is the US. We will be just fine.” Because we’ve always been just fine in my lifetime. We were bruised and shaken, but bounced back with fierce resolve on 9/11. We were fine when Ebola reached our shores back in 2014. We recovered after Hurricane Katrina and Superstorm Sandy and all the other named storms that have hit. We’re Americans. We are resilient. It’s who we are.

      However, our resilience may not be enough to conquer a crisis that was badly mishandled from the get-go. It may not be enough to overcome less than a million hospital beds in a country with more than 327 million people. The enemy is a virus we know hardly anything about and we can’t even believe the numbers out there from China or our own government.

      People are getting tense.

      This afternoon when I heard there was a press conference in the Rose Garden at 3 pm, I had a bad feeling. I wondered if my calculations were off when I figured that we could begin to see major quarantines in about a week. I headed to the store with my 19-year-old daughter to get there ahead of the crowds that would certainly be imminent if such an announcement was made. We picked up extra cat litter, extra pet food, some hardware, and extra frozen vegetables.

      When I went to the grocery store, I saw that frozen veggies were on sale 10 for $10. I grabbed 10 bags of frozen spinach and saw a rotund angry-looking woman glaring at me. I gave her a “what?” look and she said, “Aren’t you going to leave any for other people?”

      I said politely, “I’m sorry. Did you want some of the spinach?” I picked up 3 bags from my cart and offered them to her.

      She said, “No, I don’t want any spinach. A$$hole.”

      I replied calmly, “Okay, well, have a nice day” and left with my spinach. I wasn’t about to get into an altercation at Kroger over a one-dollar bag of spinach the other woman didn’t even want. It looks like that de-escalation course I took paid off because my first instinct was not to be pleasant and disregard her insults.

      I saw the tension on people’s faces as they pushed their carts quickly up and down the aisles, the tunnel vision obvious. If someone stopped in an aisle – a common thing to do at the grocery store – the folks behind them would give a loud sigh of annoyance. I even saw a couple of people bumping into others with their carts – whether it was carelessness or deliberately done, I couldn’t tell.

      I left the store with my purchases, happy to get out of there and content with what I had. I know that I’m as well-stocked as I can get with the money that I have. If it’s not enough, then we’ll move through plans B, C, and the rest of the alphabet.

      The official response

      I can’t be the only person who finds the official response to be much too little, far too late.

      To be perfectly clear, I don’t really blame the President or the Vice President. They’re in a rather impossible situation in which no matter what they do, the outcome is bad. If they shut everything down completely, there would be panic the likes of which we’ve never seen. And the economic fallout would be exponentially worse than it already is.

      This also impairs their ability to be totally forthcoming. While people in the preparedness community would prefer brutal facts over soothing fiction, most people really don’t want to know how bad things are or how bad they’ll become. So the government will continue to dance around the subject until they can dance no more and we reach a point where the truth is obvious to even the most obvious clinger to normalcy.

      On the other hand, the press conference at the White House left me feeling even more uneasy than I had felt before.

      Parading a bunch of CEOs before us and showing that ridiculous flow chart that looked like something a 4th grader might hand in for a school project certainly did nothing to make me feel like things were “under control.” I don’t care at all what the head of CVS pharmacies thinks about the outbreak or his ability to keep stores running.

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      In fact, the main thing I gathered from that is that CVS, Walmart, and Target will be the distribution points that remain open during the crisis. Mom and Pop stores may not have access to warehouses or supplies. This way it will be easier for the government to ration things out and enforce rules like “one bag of rice per household” should it come to that. I actually posted an article about this topic a few months back.

      I thought that President Trump looked and sounded unwell during the press conference. Whether that is the effect of stress or he’s become ill, it’s impossible to say.

      All in all, I was not reassured by anything in that press conference.

      What is exponential growth?

      Rationally, I’m aware that with the increase in confirmed cases and the exponential spread of this virus, we’ve probably passed the point of no return. The New York Times explains exponential growth with this chart. These are the number of cases confirmed on certain dates.

      • Jan. 21 — 1

      • Jan. 28 — 5

      • Feb. 4 — 11

      • Feb. 11 — 14

      • Feb. 18 — 25

      • Feb. 25 — 59

      • Mar. 3 — 125

      • Mar. 10 — 1,004

      And on the morning of March 14, we’re up to 2175 cases.

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      As the “drive-through” testing facilities open up with free tests, we can expect that number to grow quite a lot.

      The magnitude of the outbreak creeps up on you; it doesn’t look like things are growing very much, and then suddenly they are. Today, the U.S. is up to at least 1,714 known cases and we’re only a couple of days on from when it was 1,004. It’s going to be 4,000 by Monday, and then it’s going to be 8,000 by next Wednesday, and then it’s…. Exponential growth is staggering when it takes over.

      Exponential growth is a classic pattern in which numbers stay small initially, but then you end up with very large numbers very quickly. If you start with a certain number, and then multiply that number by a growth factor every day, depending on what that growth rate is, you’ll see the cumulative number doubling over a certain time period.

      What really matters is how high that growth rate is. In the U.S. right now, according to Our World in Data, confirmed Covid-19 cases are increasing by about 30 to 40 percent per day and the total number is doubling about every two days. (source)

      This is exactly the situation that China, Italy, Iran, and all the other countries with massive outbreaks have found themselves in and the United States is probably next.

      Is the SHTF really happening?

      We are still at a stage in a shell game and nobody knows which shell the SHTF is hiding under. Nobody knows if we can reel things in and gain control of the situation. Nobody knows if we’re going to go the way of Italy, where an entire nation is locked down and singing from their balconies to raise morale in a desperate situation.

      I wonder if people who have lived through horrible situations ever imagined in their wildest dreams how bad things would get. I know that in Selco’s book, SHTF Survival Stories, he wrote about this. Nobody ever truly expected things to happen the way they did. There was a period of adjustment and all the rules changed but a lot of folks didn’t accept the changes soon enough and they did not survive.

      When I silence the part of my mind that says, this can’t be happening, I’m only left with the realistic part that says, “Yes. It is.”

      While we don’t 100% know how this pandemic will play out in our country, we have to be ready for things to go badly. In her book, The Covid-19 Survival Manual, Cat Ellis talked about the inability of our hospitals to handle thousands of patients. We have less than a million beds in a country of 327 million people. And most of those beds are not in places equipped to handle highly contagious sick people. And what about the people with other health issues? Our medical system won’t be able to handle exponential growth no matter how hard they try or how much they want to help.

      When I look at how grocery stores and discount stores across the country look like a horde of locusts went through and decimated the inventory, I know this is a bad sign. When a friend who manages a large grocery store says to me, “Our truck was only half full today. If buying and inventory continue like this, we will be out of food by Monday,” I can only imagine the havoc that stores out of food will wreak.

      It’s going to be like Black Friday times a thousand, something I’ve written about for years.

      This entire thing is surreal, isn’t it?

      If I’ve written about and prepared for the SHTF for years and am having trouble wrapping my head around the fact that we’re in the early stages of it, what must it feel like for someone who is brand new to the concept?

      It’s one thing to watch it happen someplace far away from the screen of our laptops or televisions but entirely another to watch it unfold at home. However, we have to accept it and we have to act quickly and decisively. One of the most important things I’ve learned from Selco is about accepting the new rules.

      One of the most important things he taught me is to adapt quickly (immediately) to the “new rules” that apply when the SHTF. And to do that, you need to know what it’s like so you won’t be shocked…frozen…paralyzed by the things taking place right in front of you. When there is a new set of rules, the old rules no longer apply. The rules about waiting patiently for the government to save you? The rules about how people won’t walk up and steal from you in broad daylight because they’ll be arrested? The rules that you will get paid for your work and then you can go to the store and buy what you need?

      Those rules will be gone. And when you start seeing these new rules appear you will know that the sh*t has hit the oscillating device and the world as you knew it has changed.

      I know this and yet I still think (hope) in one part of my mind that it won’t happen that way here. That’s the most dangerous misconception in survival.

      The other part of my mind knows that it could. And that’s the part which propels me through getting prepared despite what the doubtful side whispers.

      It’s not just you.

      So if you’ve found yourself not quite believing what you’re seeing, not quite believing that all hell could break loose in America at any point now, you aren’t alone. If you look at everything heading to hell on a greasy slide and think it doesn’t feel real, it’s not just you. I’m feeling that way myself.

      I’m sharing this because I bet a lot of people are feeling the same way. Second-guessing themselves. Doubting themselves. Feeling like they aren’t good preppers. You aren’t alone and I’ll bet a whole lot of folks who won’t admit it feel this way too.

      We don’t believe it because we don’t want to believe it. We never actually wanted to be right when we stockpiled and learned skills and bought more supplies that we actually had room to house.

      But the thing that puts us ahead in this situation is that we prepared anyway. We learned anyway. And when we see the more obvious signs of a societal breakdown we will be able to accept it a lot faster than those who never even considered it.


      Tyler Durden

      Sat, 03/14/2020 – 23:30

    • Enterprising Opportunists Confronted At Costco For Lysol Wipe Profiteering
      Enterprising Opportunists Confronted At Costco For Lysol Wipe Profiteering

      A Vancouver couple has come under fire for buying up literal truck-loads of Lysol disinfecting wipes from a local Costco and reselling them for a significant markup, according to Toronto Star reporter Douglas Quan.

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      Quan was on-scene to report on people stocking up on supplies when he ran into the couple, Manny Ranga and Violeta Perez, who told Quan they were buying in bulk and reselling on Amazon.

      “Before I even got to the front entrance, I stumbled across this couple who were loading up the back of their Ford pick-up truck with these stacks and stacks of Lysol disinfecting wipes,” Quan said. “Naturally that piqued my curiosity, and so I approached them and started chatting with them.”

      The pair explained to Quan how they hit several Costco locations every day in Vancouver, Richmond and Burnaby, buy up all the Lysol wipes and cleaning liquid on hand, then turn them around for re-sale on their Amazon store Violeta & Sons Trading Ltd.

      “It’s a big opportunity with all these products,” Ranga told the Star.

      Quan says they had what appeared to be hundreds of cases stacked up on Costco pallets — enough that Ranga had to take two trips to get them all home.

      “They were attracting a fair amount of attention from shoppers going in and out of the store. I wasn’t the only person there that, you know, couldn’t help but stop and stare,” he said.

      “One woman came up and remarked, ‘Gosh, is that all for you?‘ And another woman later on came by and said, ‘Wow, someone’s making a lot of money today.'” –CBC

      A six-pack of wipes sells for around $20 at Costco, but goes for around $80 online, according to the c ouple. Ranga told Quan they’d spent around $70,000 on bulk buys and raked in around $100,000 in sales.

      Amazon has since suspended the couple’s account, according to CBC.

      Other profiteers have also been cut-off from online selling platforms. The New York Times is out with a Saturday piece on Tennessee brothers Matt and Noah Colvin, who set out on a 1,300 mile journey in a U-Haul truck to buy thousands of bottles of hand sanitizer and antibacterial wipes, mostly from “little hole-in-the-wall dollar stores in the backwoods,” as “The major metro areas were cleaned out.”

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      An Amazon merchant, Matt Colvin, with an overflow stock of cleaning and sanitizing supplies in his garage in Hixson, Tenn.Credit…Doug Strickland for The New York Times

      Matt Colvin stayed home near Chattanooga, preparing for pallets of even more wipes and sanitizer he had ordered, and starting to list them on Amazon. Mr. Colvin said he had posted 300 bottles of hand sanitizer and immediately sold them all for between $8 and $70 each, multiples higher than what he had bought them for. To him, “it was crazy money.” To many others, it was profiteering from a pandemic. –New York Times

      Then, Amazon pulled his items along with thousands of other listings for sanitizer, wipes and face masks – suspending sellers and warning others that if they continue to price-gouge they’ll lose their accounts.

      Ebay has followed suit with even stricter measures which prohibit the US sale of masks or sanitizer.

      In early February, as headlines announced the coronavirus’s spread in China, Mr. Colvin spotted a chance to capitalize. A nearby liquidation firm was selling 2,000 “pandemic packs,” leftovers from a defunct company. Each came with 50 face masks, four small bottles of hand sanitizer and a thermometer. The price was $5 a pack. Mr. Colvin haggled it to $3.50 and bought them all.

      He quickly sold all 2,000 of the 50-packs of masks on eBay, pricing them from $40 to $50 each, and sometimes higher. He declined to disclose his profit on the record but said it was substantial.

      The success stoked his appetite. When he saw the panicked public starting to pounce on sanitizer and wipes, he and his brother set out to stock up. -NYT

      Now, Colvin is sitting on 17,700 bottles of sanitizer with no idea where to sell them.

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      Hand sanitizer that Mr. Colvin is keeping in a storage locker.Credit…Doug Strickland for The New York Times

      “It’s been a huge amount of whiplash,” he said. “From being in a situation where what I’ve got coming and going could potentially put my family in a really good place financially to ‘What the heck am I going to do with all of this?'”

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      Blowback

      Massachusetts nurse Mikeala Kozlowski had some harsh words for disinfectant profiteers as she continues a fruitless search for sanitizer since before she gave birth to her first child on March 5.

      “You’re being selfish, hoarding resources for your own personal gain,” she said.

      Meanwhile, companies like Amazon have justified their crackdown as violating their policies.

      “Price gouging is a clear violation of our policies, unethical, and in some areas, illegal,” said Amazon in a statement. “In addition to terminating these third party accounts, we welcome the opportunity to work directly with states attorneys general to prosecute bad actors.”

      Read the rest of the report here.


      Tyler Durden

      Sat, 03/14/2020 – 23:05

    • The Pandemic Stress Test
      The Pandemic Stress Test

      Authored by Raghuram Rajan via Project Syndicate,

      The coronavirus pandemic has taken the world by surprise and will now expose underlying economic weaknesses wherever they lie. But the crisis also reminds us that we live in a deeply interconnected world. If the pandemic has any silver lining, it is the possibility of a much-needed reset in public dialogue that focuses attention on the most vulnerable in society, on the need for global cooperation, and on the importance of professional leadership and expertise.

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      Apart from the direct impact on public health, a crisis of this magnitude can trigger at least two direct kinds of economic shock.

      • The first is a shock to production, owing to disrupted global supply chains. Suspending the production of basic pharmaceutical chemicals in China disrupts the production of generic drugs in India, which in turn reduces drug shipments to the United States.

      • The second shock is to demand: as people and governments take steps to slow the spread of the coronavirus, spending in restaurants, shopping malls, and tourist destinations collapses.

      But there is also the potential for indirect aftershocks, such as the recent plunge in oil prices following Russia and Saudi Arabia’s failure to agree on coordinated output cuts. As these and other shocks propagate, already stressed small- and medium-size businesses could be forced to shut down, leading to layoffs, lost consumer confidence, and further reductions in consumption and aggregate demand.

      Moreover, downgrades to, or defaults by, highly leveraged entities (shale-energy producers in the US; commodity-dependent developing countries) could lead to wider losses in the global financial system. That would curtail liquidity and credit, and trigger a dramatic tightening of the financial conditions that have hitherto been so supportive of growth.

      The parade of horrible possibilities could go on. The more fundamental point to remember is that the world economy never fully recovered from the 2008 global financial crisis, nor were the underlying problems that produced that disaster ever fully addressed. On the contrary, governments, businesses, and households around the world have piled on more debt, and policymakers have undermined trust in the global trading and investment system.

      But even though the world started with a weak hand, our response to the COVID-19 crisis could be far better than it has been. The immediate task is to limit the spread of the virus through widespread testing, rigorous quarantines, and social distancing. Most developed countries should be well-positioned to implement such measures; yet, Italy has been overwhelmed by the epidemic, and the US response has not exactly inspired confidence.

      Looking ahead, unless the coronavirus is eradicated globally, it could always return, or even become a seasonal disruption. If an effective treatment is not discovered soon (Gilead’s antiviral drug remdesivir currently shows some promise), all countries will face a choice between walling themselves off entirely and pushing for a global effort to eradicate the virus. Given that the former is an impossibility, the latter seems the natural choice. But it would require a degree of global leadership and cooperation that is sorely lacking. The presidency of the G20 is currently held by Saudi Arabia, which is mired in internal and external disputes; and US President Donald Trump’s administration has repudiated multilateral action from the outset.

      Still, some key countries could accomplish much if they stepped up to lead a global response, including by persuading more countries of the value of cooperation. For example, countries that have been relatively successful in managing the epidemic, such as China and South Korea, could share best practices. And as individual countries bring the coronavirus under control within their own borders, they could dispatch spare resources to countries that need more experienced medical personnel, respirators, testing kits, masks, and the like.

      Moreover, China and the US might finally be cajoled into reversing recent tariff increases and dispensing with threats of new ones (such as on cars). While a temporary reduction in tariffs would do little to enhance cross-border investment, it would at least offer a slight boost to trade. Moreover, an accord could enhance business sentiment about the post-pandemic recovery.

      Within countries, the immediate task – after implementing measures to contain the virus – is to support those in the informal or gig economy whose livelihoods will be disrupted by quarantines and social distancing. Those who are most vulnerable economically also tend to be those who lack access to medical care. Hence, at a minimum, governments should offer cash transfers to these individuals – or to everyone, if vulnerable populations are hard to identify – as well as coverage for virus-related medical expenses. Similarly, a moratorium on some tax payments may be necessary to help small- and medium-sized businesses, as would partial loan guarantees and other measures to keep credit flowing.

      In developed countries, in particular, the pandemic will soon reveal just how many people have joined the ranks of the precariat in recent years. This cohort skews young and includes many of those living in “left-behind” places. By definition, the precariat’s members lack the skills or education needed to secure stable jobs with benefits, and thus have little stake in “the system.” Cash transfers would send a message that the system still cares. But, of course, far more will need to be done to expand the social safety net and extend new opportunities to the economically marginalized.

      Populist parties and leaders have capitalized politically on the plight of the precariat, but they have failed to live up to their promises – even where they actually hold power. The pandemic may have a silver lining here, too. Governments that have undermined established disaster-preparedness agencies and early-warning protocols are now finding that they need the professionals and experts after all. COVID-19 has been quick to expose amateurism and incompetence. If the professionals are allowed to do their jobs, they can restore some of the public’s lost trust in the establishment.

      In the political arena, a more credible professional establishment will have an opportunity to advance sensible policies that address the problems facing the precariat without ushering in class warfare. But these openings won’t last forever. If the professionals fail to capitalize on them, the pandemic will offer no silver linings – only more dread, division, chaos, and misery.


      Tyler Durden

      Sat, 03/14/2020 – 22:40

    • California Governor Issues Executive Order Allowing State To Commandeer Hotels, Motels For Coronavirus Patients
      California Governor Issues Executive Order Allowing State To Commandeer Hotels, Motels For Coronavirus Patients

      California Governor Gavin Newsom (D) issued an executive order on Thursday that allows the state to take over hotels and motels in order to convert them into medical housing for coronavirus patients, according to the Palm Springs Desert Sun. 

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      According to the report, patients from the Grand Princess cruise ship have already been moved to such facilities, such as a 120-room hotel in San Carlos located near San Francisco. Officials are also looking for potential patient housing in “mothballed” facilities that could be cleaned up and repurposed.

      “As you can imagine, under our pandemic planning, we’re also looking to secure additional assets,” said Newsom.

      Under the executive order, the state’s Health and Human Services Agency and the Office of Emergency Services can commandeer private property for coronavirus treatment, as well as offer economic relief for residents, Fox News reports.

      “This is where we need to go next, and to make sure we fully implement those procedures and protocols to slow down the spread to get through a peak and to get through the next few months, so we don’t overwhelm our healthcare delivery system,” Newsom said, according to the LA Times.

      The executive order also eliminates a one-week waiting period for unemployment benefits. In Sacramento, meanwhile, the City Council approved a $1 million economic relief package in a Friday night vote which will provide zero-interest loans of up to $25,000 to restaurants, retail, daycare and other businesses which are being affected by coronavirus precautions.

      Meanwhile in Los Angeles, Mayor Eric Garcetti closed City Hall to the public along with banning all events or conferences on city-owned property which will have over 50 people. Meetings will be conducted via teleconference.

      “We are entering a critical period,” said Garcetti, adding “These are common-sense measures.”

      There are currently 282 known cases of COVID-19 in California, which is home to around 40 million people.

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      Tyler Durden

      Sat, 03/14/2020 – 22:15

    • The Good Luck Ran Out Because The Dollars Did
      The Good Luck Ran Out Because The Dollars Did

      Authored by Jeffrey Snider via Alhambra Investments,

      Jay Powell has a lot of catching up to do, and very little time to do it. He’s squandered so much already. First his emergency rate cut blew up in his face and now his dud of a bazooka. Before the market got going, officials had already added a 25-day allotment (of bank reserves, of course) on top of the usual overnight and 14-day terms.

      Obviously, it wasn’t enough; or, more accurately, it wasn’t the right thing. Undeterred, Powell’s Fed decided at some point during the disastrous morning to just say, screw it, and raise the roof. In a matter of hours, a 3-month (84-day) “repo” auction was announced, conducted, and closed.

      The scale of the thing was supposed to wow you and all the suddenly impatient sellers on the NYSE (not intended as much for the repo market, as you’ll see). Half a trillion, baby! That’s the amount of “liquidity” authorities put up for bidding on this day of days.

      Dealers ended up taking in all of $78.4 billion, or about 16% of what was possible. Either things aren’t nearly as bad as they seem (literally no one is buying that scenario), or something is wrong in bank reserve-land. Perhaps dealers just don’t want them, or maybe they don’t have the spare collateral to post for them.

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      Even the stock market (THE STOCK MARKET!!!) wasn’t impressed. It is maybe starting to dawn on folks the central truth in all this – the central bank just isn’t central. The monetary world is so much more complicated than the simple model employed by both classroom Economics and the technically deficient policymakers these days struggling just to get by on a daily basis.

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      The theoretical issue, much of it, stems from a misreading of the Great “Moderation.” The pre-crisis era had been written down as the product of several factors, including Greenspan’s allegedly maestro-like performance.

      The Economists who coined the term Great “Moderation” weren’t actually so sure. In their groundbreaking 2002 paper, James Stock and Mark Watson pointed to one unknown factor. Unable to determine what it was, they gave up trying and just declared it random good luck.

      Seriously, that’s what they concluded. That, among other factors, had for several decades kept the US system (because that’s what they studied, not the global system) fortunate enough to have been spared the plague of financial crises that used to be regular features of the economic landscape.

      What these two concluded should have made monetary officials’ blood run cold:

      But because most of the reduction seems to be due to good luck in the form of smaller economic disturbances, we are left with the unsettling conclusion that the quiescence of the past fifteen years could well be a hiatus before a return to more turbulent economic times.

      Ben Bernanke read the piece and immediately went on a determined road-show to hog all the credit. Nonsense, he declared, it was the brand-new (the eighties) monetary policy regime (interest rate targeting, meaning expectations) that was responsible. No good luck, just Economists. Geniuses, every one.

      Looking back at it now, it is much easier to see for those who honestly seek some answers. Stepping outside the central bank cult, we find that Bernanke was right – it wasn’t good luck, after all – but desperately wrong in assigning the Fed its celebratory parade. A premature parade, obviously, as he would find out, but not figure out, just a few years later.

      Even 2007 had been forewarned. Though the US had been steered clear of financial crisis, the world hadn’t during this period. Smaller crises were still relatively common, and then a much bigger one in 1998. The Asian financial crisis was a regional dollar shortage, and contained, largely, within a region that wasn’t so enormous and important at the time, a test of the system that had developed from the seventies forward.

      It was this new global monetary arrangement that had kept the world within narrow tolerances, the US most of all. Not Greenspan and his ridiculous show of quarter-point fed funds adjustments, instead the supremacy of global eurodollar banks that had stapled LIBOR to fed funds and policed the entire hierarchy.

      The banks did the heavy money lifting for which central bankers like Greenspan and Bernanke were only too happy to take credit – while they could. So long as that hidden shadow money system in the world’s vast offshore spaces kept expanding it kept the forces of domestic and global monetary crashes at bay; not good luck but blindness.

      But the Asian flu had also been a key warning for what could happen. It showed the downside of a globalized economy dependent upon the quick and easy accessibility of (euro)dollars. So long as they are available, meaning banks not central banks, everything was hunky dory; Great Moderation and whatnot.

      Once they started to disappear in sufficient numbers, look the hell out!

      The warning, of course, went completely unheeded; Greenspan then Bernanke more interested in the vanity of interest rate targeting and all the media and academic adulation that came with it – one pattern, at least, unbroken all the way to Jay Powell, a curious trait of incuriosity about how nothing seems to work as planned ever since, oh, 2008 or so. No one bothered to check the assumptions, even after 1998 as well as Japan’s failures with QE in the early 2000’s.

      The world’s luck didn’t run out on August 9, 2007, the eurodollars did. Global dollar shortage. Ever since, it has been one global headache after another, some worse, some relatively mild. But scarcely a year has been put into the books without the words “global” “dollar” “shortage” and it hasn’t mattered one bit what the level of bank reserves were or had become during any of them.

      Rising dollar means dollar shortage (see below; particularly Norway’s currency).

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      As Europe’s ill-fated LTRO’s (which were exactly alike these Fed “repo” operations), the Fed doesn’t plug in to this system. They don’t even speak the right language.

      As I wrote back in 2017, amidst the hysteria and hype of the inflation globally synchronized growth was going to bring and the apparent return of good luck for that one year:

      It was never monetary policy that created the Great “Moderation”, and outside of the narrow confines of orthodox definitions that period was never so moderate to begin with. As the eurodollar system built up, it only appeared that way because output was stable so long as what was hidden far out of view remained drastically immoderate. Now that is no longer the case, where the eurodollar system reverses, decays, and acts as an anchor upon global output, there is no stability anywhere. Suddenly exogenous shocks (like “global turmoil”) are the rule rather than the exception where even the US economy is concerned.

      That about sums up 2020 so far, including the hapless Fed’s increasingly absurd flailing. Did the puppet show finally disappoint the last of its audience?


      Tyler Durden

      Sat, 03/14/2020 – 21:50

    • Attention NHTSA: Second Tesla In A Week Has Plowed Through Storefront In Coachella Valley
      Attention NHTSA: Second Tesla In A Week Has Plowed Through Storefront In Coachella Valley

      We’re not sure what it’s going to take the NHTSA to establish some sort of pattern, but sadly, if they haven’t “gotten it” by now we’re not sure that they’re ever going to. And when people start dying from these types of accidents, there’s going to be a lot of blame to go around.

      Yet another Tesla has somehow wound up buried in yet another storefront. 

      In Palm Springs late last week a driver suffered minor injuries after “crashing a Tesla into a building”, according to the Palm Spring Desert Sun. Stop us if you’ve seen a photograph like this one before:

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      The car plowed through the front of Desert Vision Optometry, also causing minor injuries to an employee. The cause of the crash remains under investigation. The car crashed through the “front of the building” and “stopped in the lobby” according to reports. Workers in the building said that no one else was injured. 

      But even more noteworthy is the fact that this is the second time in a week that a Tesla has crashed through the front of the building in the Coachella Valley.

      On March 4, another driver, an elderly woman, plowed her Tesla through the front of Mastro’s Steakhouse in Palm Desert. 

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      The Palm Springs Fire Department Tweeted out video of the latest incident, showing the Tesla lodged in the storefront: 

      https://platform.twitter.com/widgets.js

      While the cause of the first accident is still under investigation, what exactly is it going to take for regulators to start to notice this pattern, which is becoming egregious, and begin to ask pointed questions about why, every time we see a vehicle crash through a storefront in the United States, it just happens to be a Tesla. 

      We won’t hold our breath waiting for that to happen. 

       


      Tyler Durden

      Sat, 03/14/2020 – 21:25

    • Price Of Physical Gold Decouples From Paper Gold
      Price Of Physical Gold Decouples From Paper Gold

      Submitted by BullionStar.com

      In the last month, from 14 February 2020 to 14 March 2020, we have seen a record number of orders, record order revenue and a record number of visits to our newly renovated and extended bullion centre at 45 New Bridge Road in Singapore.

      For the above-mentioned period, we have served 2,626 customers with a sales revenue of more than SGD 50 M, which is 477% higher compared to the same period last year.

      The last few days have been our busiest days of all time. Our staff members have been doing a fantastic job in going out of their way to serve as many customers as possible.

      With order volume increasing to this magnitude, it’s difficult for us to timely answer all phone and support requests but we are doing our very best to keep response times down.

      Gold & Silver Shortages – Supply Squeeze

      The enormous increase in demand is straining our supply chains. BullionStar has supplier relations with most of the major refineries, mints and wholesalers around the world. Most of our suppliers don’t have any stock of precious metals and are not taking orders currently. The U.S. Mint for example announced just this Thursday that American Silver Eagle coins are sold out. The large wholesalers in the U.S. are completely sold out of ALL gold and ALL silver and are not able to replenish.

      We are already sold out of several products and will sell out of additional products shortly if this supply squeeze continues. All products listed as “In Stock” on our website are available for immediate delivery. For items listed as “Pre-Sale”, the items have been ordered and paid by us with incoming shipments on the way to us.

      Paper Gold vs. Physical Gold

      As we have repeated frequently over the years, only physical gold is a safe haven.

      It’s noteworthy that the paper price of gold, although up 5.7% Year-to-Date denominated in SGD, has been trading downward in the last few days.

      Paper gold is traded on the unallocated OTC gold spot market in London and on the COMEX futures market in New York. Both of these markets are derivative markets and neither is connected to the physical gold market.

      This means that the physical gold market is a price taker, inheriting the price from the paper market, and that the derivative markets are the exclusive and dominant price makers. The entire market structure of this financialized gold trading is flawed. So while there is unprecedented demand for physical gold, this is not reflected in the gold price as derived by COMEX and the London unallocated spot market.

      By now it is abundantly clear that the physical gold market and paper gold market will disconnect.

      If the paper market does not correct this imbalance, widespread physical shortages of precious metals will be prolonged and may lead to the entire monetary system imploding.

      And with progressive central banks in Eastern Europe and Asia having stocked up on gold in the last three years, gold will likely be the anchor of the new monetary system arising out of the ashes.

      Mainstream media assertions that “Gold has been stripped of its Safe Haven Status” are utterly ridiculous and distorted beyond belief, when in fact the complete opposite is true. Unbacked paper gold and silver may be stripped of safe haven status, but certainly not real physical gold bullion.

      Physical Premiums & Spreads

      The current supply squeeze and physical bullion shortage has caused and is causing an increase in price premiums. It’s currently difficult and expensive for us to acquire any inventory. We have therefore had to increase premiums on products to compensate for the constraints. We have endeavoured to also raise our prices offered to customers selling to us, but with the extreme volatility and wild price fluctuations, the spread between the buy and sell price may temporarily be larger than normal. It is regrettable that premiums and spreads are larger than normal but it is outside our control that the paper market is not reflecting the demand and supply of the physical market. As many of you know, we are one of the largest critical voices of the LBMA run paper market and its bullion bank members in London.

      Please note that premiums are likely to be higher on weekends when the markets are closed compared to weekdays.

      We do not take lightly the decision to alter premiums but feel that it is a better alternative than to stop accepting orders altogether during weekends. Likewise it is a better alternative than to stop accepting orders when the paper gold market is in turmoil and failing to reflect the demand and supply realities of the physical bullion market.

      Currently, we are completely sold out on BullionStar Gold Bars, BullionStar Silver Bars and are running low on several other products which we are not able to replenish for now. Several stock items will therefore likely go out of stock shortly. This is despite us having been aggressively buying bullion to create a buffer reserve inventory.


      Tyler Durden

      Sat, 03/14/2020 – 21:00

    • Mexico Mulls Shutting Northern Border Over Virus Spread Threat
      Mexico Mulls Shutting Northern Border Over Virus Spread Threat

      Mexican Deputy Health Secretary Hugo Lopez-Gatell has considered shutting down its northern border with the US to limit the spread of Covid-19, reported Reuters. 

      “The possible flow of coronavirus would come from the north to the south. If it were technically necessary, we would consider mechanisms of restriction or stronger surveillance,” Lopez-Gatell told reporters on Thursday.

      The lack of test kits in Mexico and the US have made it difficult to get an accurate reading of community spreading in both countries. So far, Mexico has confirmed 16 cases and no deaths. The US has 2,174 cases and 47 deaths. 

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      Americas Covid-19 Virus Map 

      The World Health Organization declared Covid-19 a global pandemic last week, which has rapidly spread to more than 147,000 people from Asia to the Middle East, Europe, and now to the Americas. The virus has transformed the usual US-Mexico border dispute into another crisis, not because of migrants and drugs, but rather the fear of virus transmission. 

      Mexican health officials pointed out the fast-spreading virus in California could make its way through several land port of entries south of San Diego. In particular, the San Ysidro Land Port of Entry, the busiest land port in the Western Hemisphere. 

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      San Ysidro Port of Entry 

      President Trump tweeted last week, “We need the Wall more than ever!” Trump made similar comments during a political rally in South Carolina last month:

      “One of the reasons the numbers are so good: We will do everything in our power to keep the infection and those carrying the infection from entering our country,” he said. “You’ve all seen the wall has gone up like magic.”

      Last week, Trump tweeted, “because we have had a very strong border policy, we have had 40 deaths related to CoronaVirus. If we had weak or open borders, that number would be many times higher!”

      US ambassador to Mexico Christopher Landau said Thursday the virus outbreak is another reason for stricter border controls. 

      “For both countries, it doesn’t benefit us to have completely open borders,” Landau said. “We see it now with the virus, and hopefully we can work closely together because in health issues, political parties and borders aren’t important.”

      As virus cases and deaths rise in the US, the probabilities increase of a border shutdown or at least reduced travel through major land ports between both countries.


      Tyler Durden

      Sat, 03/14/2020 – 20:35

    • Doug Casey: The "Greater Depression" Is Coming
      Doug Casey: The “Greater Depression” Is Coming

      You’ve no doubt seen the headlines on CNN and Bloomberg.

      “Coronavirus Pandemic Could Spark a Global Depression.”

      “Will China Virus Trigger New Great Depression?”

      There’s plenty of concern that the coronavirus outbreak is pushing us toward a crash. And after the market’s recent dive, the panic is only growing. 

      Regular readers know Casey Research founder Doug Casey sees the next depression around the corner. But as he explains below, “government coercion” planted the seeds for a downturn long before the coronavirus appeared.

      And Doug’s predicting this “Greater Depression” will break records…

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      Authored by Doug Casey via CaseyResearch.com,

      Just because society experiences turmoil doesn’t mean your personal life has to. And a depression doesn’t have to be depressing. Most of the real wealth in the world will still exist – it will just change ownership.

      What is a depression?

      We’re now at the tail end of a very long, but in many ways a very weak and artificial, economic expansion. At the same time, we’ve had one of the strongest securities bull markets in history. Both are the result of trillions of new dollars created over the last decade. Right now, very few people are willing to consider the possibility of tough times – let alone The Greater Depression.

      But, perverse though it may seem, this is the very best time to think about it. The U.S. economy is a house of cards, built on quicksand, with a tsunami on the way. I urge everyone to read up on the topic. For now, I’ll only briefly touch on the nature of depressions. There are at least three good definitions of the term:

      1. A period of time when most people’s standard of living drops significantly.

      2. A period of time when distortions and misallocations of capital are liquidated.

      3. A period of time when the business cycle climaxes.

      Using the first definition, any natural disaster can cause a depression. So can living above your means for long enough. But the worst kind of depression has not just economic effects, but economic causes. That’s where definitions two and three come in.

      What can cause distortions in the way the market operates, causing people to do things they’d otherwise consider unreasonable or uneconomic? Only government action, i.e., coercion. This takes the form of regulation, taxes, and currency inflation.

      Always under noble pretexts, government is constantly directly and indirectly inducing people to buy and sell things they otherwise wouldn’t, to do things they’d prefer not to, and to invest in things that make no sense.

      These misallocations of capital subtly reduce a society’s general standard of living, but the serious trouble happens when such misallocations build up to an unsustainable degree and reality forces them into liquidation. The result is bankrupted companies, defaulted debt, and unemployed workers.

      The business cycle is caused mainly by currency inflation, which is accomplished today by the monetization of government debt through the banking system; essentially, when the government runs a deficit, the Federal Reserve buys its debt, and credits the government’s account at a commercial bank with dollars. Using the printing press to create new money is largely passé in today’s electronic world.

      Either way, inflation sends false signals to businessmen (especially those who get the money early on, as it filters through the economy), making them overestimate demand for their products. That causes them to hire more workers and make capital investments – often with borrowed money. This is called “stimulating the economy.”

      Inflating the currency can actually drive down interest rates for a while, because the price of money (interest) is lowered by the increased supply of money. This causes people to save less and borrow more, just as Americans have been doing for years. A lot of that newly created money goes into the stock market, driving it higher.

      It all looks pretty good, until retail prices start rising as a delayed consequence of the increased money supply, and interest rates skyrocket to reflect the depreciation of the currency.

      That’s when businesses start failing. Stocks fall. Bond prices collapse. Large numbers of workers lose employment.

      Rather than let the market adjust itself, government typically starts the process all over again with a new and larger “stimulus package.” The more often this happens, the more ingrained become the distortions in the way people consume and invest, and the nastier the eventual depression.

      This is why I predict the Greater Depression will be… well… greater. This is going to be one for the record books. Much different, much longer lasting, and much worse than the unpleasantness of 1929-1946.

      *  *  *

      As Doug said, the Greater Depression is on the horizon. Smart investors should start preparing now… and gold offers one of the best ways to protect your portfolio. That’s why you need to watch this short video, where Doug lays out exactly what’s happening in the gold market right now. And a shocking new rule – the first of its kind in 45 years – that’s putting gold back in international headlines. It’s already setting off a buying frenzy… a “gold panic” unlike anything we’ve seen since the early 1970s. Go here for the full story… including details on the five explosive gold stocks that are the best way to play this boom.


      Tyler Durden

      Sat, 03/14/2020 – 20:10

    • "More Violent, More Persistent": Market Fear Worse Now Than In 2008, Man Who Inspired VIX Says
      “More Violent, More Persistent”: Market Fear Worse Now Than In 2008, Man Who Inspired VIX Says

      The academic best known for coming up with the idea of the VIX – also know as Wall Street’s fear gauge – says that the fear looming over the markets now is far greater than the fear we faced in 2008. 

      Dan Galai, a professor at the Hebrew University of Jerusalem told Bloomberg:

       “The level of uncertainty is even beyond what we saw in 2008 immediately after Lehman Brothers collapsed.”

      Galai continued: 

      “If you look at 2008, it spiked and then within a day or two, it was going down very fast. Here, it’s been steadily going up instead of going down. It’s more violent, and it’s more persistent.”

      The VIX is an indicator of expected near-term swings in the S&P 500 and has closed above 45 for four days in a row, which is the longest streak of this kind since 2009. It closed on Friday at 63, despite stocks spiking during the last half hour of trading. The VIX spiked up to 76 on Thursday, as stocks experienced the largest one day drop since October 1987.

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      Galai notes that monetary response likely won’t do much to stave off the problem.

       “I don’t think interest rates have any effect right now. Monetary steps, in my view, are completely redundant,” he said.

        Galai had proposed using gauges to measure volatility in 1989 and his proposal led to the CBOE VIX. Galai likens strategies that short volatility – including one that buried a Credit Suisse short-volatility note in 2018, as a “substitute for Las Vegas”. 

        Now you tell us…


        Tyler Durden

        Sat, 03/14/2020 – 19:45

      1. Tverberg: It Is Easy To Overdo Covid-19 Quarantines
        Tverberg: It Is Easy To Overdo Covid-19 Quarantines

        Authored by Gail Tverberg via Our Finite World blog,

        We have learned historically that if we can isolate sick people, we can often keep a communicable disease from spreading.

        Unfortunately, the situation with the new coronavirus causing COVID-19 is different: We can’t reliability determine which people are spreading the disease. Furthermore, the disease seems to transmit in many different ways simultaneously.

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        Politicians and health organizations like to show that they are “doing something.” Because of the strange nature of COVID-19, however, doing something is mostly a time-shifting exercise: With quarantines and other containment efforts, there will be fewer cases now, but this will be mostly or entirely offset by more cases later. Whether time-shifting reduces deaths and eases hospital care depends upon whether medical advances are sufficiently great during the time gained to improve outcomes.

        We tend to lose sight of the fact that an economy cannot simply be shut down for a period and then start up again at close to its former level of production. China seems to have seriously overdone its use of quarantines. It seems likely that its economy can never fully recover. The permanent loss of a significant part of China’s productive output seems likely to send the world economy into a tailspin, regardless of what other economies do.

        Before undertaking containment efforts of any kind, decision-makers need to look carefully at several issues:

        • Laying-off workers, even for a short time, severely adversely affects the economy.

        • The expected length of delay in cases made possible by quarantines is likely to be very short, sometimes lasting not much longer than the quarantines themselves.

        • We seem to need a very rapid improvement in our ability to treat COVID-19 cases for containment efforts to make sense, if we cannot stamp out the disease completely.

        Because of these issues, it is very easy to overdo quarantines and other containment efforts.

        In the sections below, I explain some parts of this problem.

        [1] The aim of coronavirus quarantines is mostly to slow down the spread of the virus, not to stop its spread.

        As a practical matter, it is virtually impossible to stop the spread of the new coronavirus.

        In order to completely stop its spread, we would need to separate each person from every other person, as well as from possible animal carriers, for something like a month. In this way, people who are carriers for the disease or actually have the disease would hopefully have time to get over their illnesses. Perhaps airborne viruses would dissipate and viruses on solid surfaces would have time to deteriorate.

        This clearly could not work. People would need to be separated from their children and pets. All businesses, including food sales, would have to stop. Electricity would likely stop, especially in areas where storms bring down power lines. No fuel would be available for vehicles of any kind. If a home catches fire, the fire would need to burn until a lack of material to burn stops it. If a baby needs to be delivered, there would be no midwife or hospital services available. If a person happened to have an appendicitis, it would simply need to resolve itself at home, however that worked out.

        Bigger groups could in theory be quarantined together, but then the length of time for the quarantine would need to be greatly lengthened, to account for the possibility that one person might catch the disease from someone else in the group. The bigger the group; the longer the chain might continue. A group might be a single family sharing a home; it could also be a group of people in an apartment building that shares a common ventilating system.

        [2] An economy is in many ways like a human being or other animal. Its operation cannot be stopped for a month or more, without bringing the economy to an end. 

        I sometimes write about the economy being a self-organizing networked system that is powered by energy. In physics terms, the name for such a system is a dissipative structure. Human beings are dissipative structures, as are hurricanes and stars, such as the sun.

        Human beings cannot stop eating and breathing for a month. They cannot have sleep apnea for an hour at a time, and function afterward.

        Economies cannot stop functioning for a month and afterward resume operations at their previous level. Too many people will have lost their jobs; too many businesses will have failed in the meantime. If the closures continue for two or three months, the problem becomes very serious. We are probably kidding ourselves if we think that China can come back to the same level that it was at before the new coronavirus hit.

        In a way, keeping an economy operating is as important as preventing deaths from COVID-19. Without food, water and wage-producing jobs (which allow people to buy necessary goods and services), the deaths from the loss of the economy would be far greater than the direct deaths from the coronavirus.

        [3] A reasonable guess is that nearly all of us will face multiple exposures to the new coronavirus. 

        Many people are hoping that this wave of the coronavirus will be stopped by warmer weather, perhaps in May or June. We don’t know whether this will happen or not. If the coronavirus does stop, there is a good chance the same virus, or a close variation of it, will be back again this fall. It is likely to come back in waves later, for at least one more year. In fact, if no vaccine is found, it is possible that it could come back, in various variations, indefinitely. There are many things we simply don’t know with certainty at this time.

        Epidemiologists talk about the spread of a virus being stopped at the community immunity level. Harvard epidemiologist Marc Lipsitch originally estimated that 40% to 70% of the world’s population would come down with COVID-19 within the first year. He has revised this and now states that it is plausible that 20% to 60% of the world’s population will catch the disease in that timeframe. He also indicates that if the virus cannot be contained, the only way to get it under control is for 50% of the world’s population to become immune to it.

        The big issue with containing the coronavirus is that we cannot really tell who has it and who does not. The tests available for COVID-19 are expensive, so giving the test to everyone, frequently, makes no sense. The tests tend to give a many false negatives, so even when they are given, they don’t necessarily detect people with the disease. There are also many people who seem to spread the disease without symptoms. Without testing everyone, these people will never be found.

        We hear limited statements such as “The United States surgeon general said Sunday that he thinks the coronavirus outbreak is being contained in certain areas of the country as cases of the virus rise across the United States.” Unfortunately, containment of the virus in a few parts of the world does not solve the general problem. There are lots and lots of uncontained cases around the world. These uncontained cases will continue to spread, regardless of the steps taken elsewhere.

        Furthermore, even when we think the virus is contained, there are likely to be missed cases, especially among people who seem to be well, but who really are carriers. Getting rid of the virus is likely to be a major challenge.

        [4] There is an advantage to delaying citizens from catching COVID-19. The delay allows doctors to learn which existing medications can be used to help treat the symptoms of the disease.

        There seem to be multiple drugs and multiple therapies that work to some limited extent.

        For example, plasma containing antibodies from a person who has already had the illness can be injected into a person with the disease, helping to fight the disease. It is not clear, however, whether such a treatment will protect against future attacks of the virus since the patient is being cured without his own immune system producing adequate antibodies.

        Some HIV drugs are being examined to see whether they work well enough for it to make sense to ramp up production of them. The antiviral drug remdesivir by Gilead Sciences also seems to have promise. For these drugs to be useful in fighting COVID-19, production would need to be ramped up greatly.

        In theory, there is also a possibility that a vaccine can be brought to market that will get rid of the virus. Our past experience with vaccine-making has not been very good, however. Out of 200+ virus-caused diseases that affect humans, only about 20 have vaccines. These vaccines generally need to be updated frequently, because viruses tend to mutate over time.

        With some viruses, such as Dengue Fever, people don’t ever build up adequate immunity to the many disease variations that exist. Instead a person who catches Dengue Fever a second time is likely to be sicker than the first time. Finding a vaccine for such diseases seems to be almost impossible.

        Even if we can actually succeed in making a vaccine that works, the expectation seems to be that this will take at least 12 to 18 months. By this time, the world may have experienced multiple waves of COVID-19.

        [5] There are multiple questions regarding how well European Countries, Japan and the United States will really be able to treat coronavirus.

        There are several issues involved:

        (a) Even if medicines are identified, can they be ramped up adequately in the short time available?

        (b) China’s exports have dropped significantly. Required medical goods that we normally import from China may not be available. The missing items could be as simple as rubbing alcohol, masks and other protective wear. The missing items could also be antibiotics, antidepressants, and blood pressure medications that are needed for both COVID-19 patients and other patients.

        (c) Based on my calculations, the number of hospital beds and ICU beds needed will likely exceed those available (without kicking out other patients) by at least a factor of 10, if the size of the epidemic grows. There will also be a need for more medical staff. Medical staff may be fewer, rather than more, because many of them will be out sick with the virus. Because of these issues, the amount of hospital-based care that can actually be provided to COVID-19 patients is likely to be fairly limited.

        (d) One reason for time-shifting of illnesses has been to try to better match illnesses with medical care available. The main benefit I can see is the fact that many health care workers will have contracted the illness in the first wave of the disease, so will be more available to give care in later waves of the disease. Apart from this difference, the system will be badly overwhelmed, regardless of when COVID-19 cases occur.

        [6] A major issue, both with COVID-19 illnesses and with quarantines arising out of fear of illness, is wage loss. 

        If schools and day care centers are closed because of COVID-19 fears, many of the parents will have to take off time from work to care for the children. These parent will likely lose wages.

        Wage loss will also be a problem if quarantines are required for people returning from an area that might be affected. For example, immigrant workers in China wanting to return to work in major cities after the New Year’s holiday have been quarantined for 14 days after they return.

        Clearly, expenses (such as rent, food and auto payments) will continue, both for the mother of the child who is at home because a child’s school is closed and for the migrant worker who wants to return to a job in the city. Their lack of wages will mean that these people will make fewer discretionary purchases, such as visiting restaurants and making trips to visit relatives. In fact, migrant workers, when faced with a 14 day quarantine, may decide to stay in the countryside. If they don’t earn very much in the best of times, and they are required to go 14 days without pay after they return, there may not be much incentive to return to work.

        If I am correct that the illness COVID-19 will strike in several waves, these same people participating in quarantines will have another “opportunity” for wage loss when they actually contract the disease, during one of these later rounds. Unless there is a real reduction in the number of people who ultimately get COVID-19 because of quarantines, a person would expect that the total wage loss would be greater with quarantines than without, because the wage loss occurs twice instead of once.

        Furthermore, businesses will suffer financially when their workers are out. With fewer working employees, businesses will likely be able to produce fewer finished goods and services than in the past. At the same time, their fixed expenses (such as mortgage payments, insurance payments, and the cost of heating buildings) will continue. This mismatch is likely to lead to lower profits at two different times: (a) when workers are out because of quarantines and (b) when they are out because they are ill.

        [7] We likely can expect a great deal more COVID-19 around the world, including in China and in Italy, in the next two years.

        The number of reported COVID-19 cases to date is tiny, compared to the number that is expected based on estimates by epidemiologists. China reports about 81,000 COVID-19 cases to date, while its population is roughly 1.4 billion. If epidemiologists tell us to expect 20% to 60% of a country’s population to be affected by the end of the first year of the epidemic, this would correspond to a range of 280 million to 840 million cases. The difference between reported cases and expected cases is huge. Reported cases to date are less than 0.01% of the population.

        We know that China’s reported number of cases is an optimistically low number, but we don’t know how low. Many, many more cases are expected in the year ahead if workers go back to work. In fact, there have been recent reports of a COVID-19 outbreak in Shenzhen and Guangzhou, near Hong Kong. Such an outbreak would adversely affect China’s manufactured exports.

        Italy has a similar situation. It is currently reported to have somewhat more than 10,000 cases. Its total population is about 60 million. Thus, its number of cases amounts to about 0.02% of the population. If Epidemiologist Lipsitch is correct regarding the percentage of the population that is ultimately likely to be affected, the number of cases in Italy, too, can be expected to be much higher within the next year. Twenty percent of a population of 60 million would amount to 12 million cases; 60% of the population would amount to 36 million cases.

        [8] When decisions about quarantines are made, the expected wage loss when workers lose their jobs needs to be considered as well. 

        Let’s calculate the amount of wage loss from actually having COVID-19. If workers generally work for 50 weeks a year and are out sick for an average of 2 weeks because of COVID-19, the average worker would lose 4% (=2/50) of his annual wages. If workers are out sick for an average of three weeks, this would increase the loss to 6% (3/50) of the worker’s annual wages.

        Of course, not all workers will be affected by the new coronavirus. If we are expecting 20% to 60% of the workers to be out sick during the first year of the that the epidemic cycles through the economy, the expected overall wage loss for the population as a whole would amount to 0.8% (=20% times 4%) to 3.6% (=60% times 6%) of total wages.

        Let’s now calculate the wage loss from a quarantine. A week of wage loss during a quarantine of the entire population, while nearly everyone is well, would lead to a wage loss equal to 2% of the population’s total wages. Two weeks of wage loss during quarantine would lead to wage loss equal to 4% of the population’s total wages.

        Is it possible to reduce overall wage loss and deaths by using quarantines? This approach works for diseases which can actually be stopped through isolating sick members, but I don’t think it works well at all for COVID-19. Mostly, it provides a time-shifting feature. There are fewer illnesses earlier, but to a very significant extent, this is offset by more illnesses later.  This time-shifting feature might be helpful if there really is a substantial improvement in prevention or treatment that is quickly available. For example, if a vaccine that really works can be found quickly, such a vaccine might help prevent some of the illnesses and deaths in 2021 and following years.

        If there really isn’t an improvement in preventing the disease, then we get back to the situation where the virus needs to be stopped based on community immunity. According to Lipsitch, to stop the virus based on community immunity, at least 50% of the population would need to become immune. This implies that somewhat more than 50% of the population would need to catch the new coronavirus, because some people would catch the new virus and die, either of COVID-19 or of another diseases.

        Let’s suppose that 55% would need to catch the COVID-19 to allow the population immunity to rise to 50%. The virus would likely need to keep cycling around until at least this percentage of the population has caught the disease. This is not much of a decrease from the upper limit of 60% during the first year. This suggests that moving illnesses to a later year may not help much at all with respect to the expected number of illnesses and deaths. Hospitals will be practically equally overwhelmed regardless, unless we can somehow change the typical seasonality of viruses and move some of the winter illnesses to summertime.

        If there is no improvement in COVID-19 prevention/treatment during the time-shift of cases created by the quarantine, any quarantine wage loss can be thought of as being simply in addition to wage loss from having the virus itself. Thus, a country that opts for a two week quarantine of all workers (costing 4% of workers’ wages) may be more than doubling the direct wage loss from COVID-19 (equivalent to 0.8% to 3.6% of workers’ wages).

        [9] China’s shutdown in response to COVID-19 doesn’t seem to make much rational sense.

        It is hard to understand exactly how much China has shut down, but the shutdown has gone on for about six weeks. At this point, it is not clear that China can ever come back to the level it was at previously. Clearly, the combination of wage loss for individuals and profit loss for companies is very high. The long shutdown is likely to lead to widespread debt defaults. With less wages, there is likely to be less demand for goods such as cars and cell phones during 2020.

        China was having difficulty before the new coronavirus was discovered to be a problem. Its energy production has slowed greatly, starting about 2012-2013, making it necessary for China to start shifting from a goods-producing nation to a country that is more of a services-producer (Figure 1).

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        Figure 1. China energy production by fuel, based on 2019 BP Statistical Review of World Energy data. “Other Ren” stands for “Renewables other than hydroelectric.” This category includes wind, solar, and other miscellaneous types, such as sawdust burned for electricity.

        For example, China’s workers now put together iPhones using parts made in other countries, rather than making iPhones from start to finish. This part of the production chain requires relatively little fuel, so it is in some sense more like a service than the manufacturing of parts for the phone.

        The rest of the world has been depending upon China to be a major supplier within its supply lines. Perhaps many of these supply lines will be broken indefinitely. Instead of China helping pull the world economy along faster, we may be faced with a situation in which China’s reduced output leads to worldwide economic contraction rather than economic growth.

        Without medicines from China, our ability to fight COVID-19 may get worse over time, rather than better. In such a case, it would be better to get the illness now, rather than later.

        [10] We need to be examining proposed solutions closely, in the light of the particulars of the new coronavirus, rather than simply assuming that fighting COVID-19 to the death is appropriate.

        The instructions we hear today seem to suggest using disinfectants everywhere, to try to prevent COVID-19. This is yet another way to try to push off infections caused by the coronavirus into the future. We know, however, that there are good microbes as well as bad ones. The ecosystem requires a balance of microbes. Dumping disinfectants everywhere has its downside, as well as the possibility of an upside of killing the current round of coronaviruses. In fact, to the extent that the virus is airborne, the disinfectants may not really be very helpful in wiping out COVID-19.

        It is very easy to believe that if some diseases can be subdued by quarantines, the same approach will work everywhere. This really isn’t true. We need to be examining the current situation closely, based on whatever information is available, before decisions are made regarding how to deal with the COVID-19 outbreak. Perhaps any quarantines used need to be small and targeted.

        We also need to be looking for new approaches for fighting COVID-19. One approach that is not being used significantly to date is trying to strengthen people’s own immune systems. Such an approach might help people’s own immune system to fight off the disease, thereby lowering death rates. Nutrition experts recommend supplementing diets with Vitamins A, C, E, antioxidants and selenium. Other experts say zinc, Vitamin D and elderberry may be helpful. Staying away from cold temperatures also seems to be important. Drinking plenty of water after coming down with the disease may be beneficial as well. If we can help people’s own bodies fight the disease, the burden on the medical system will be lower.


        Tyler Durden

        Sat, 03/14/2020 – 19:20

      2. Brawls Erupt As Americans Panic Hoard Supplies Amid Pandemic  
        Brawls Erupt As Americans Panic Hoard Supplies Amid Pandemic  

        So, this week, panic hoarding at Costco stores and other big-box retailers got a little more serious when it started on Thursday. Mostly because confirmed Covid-19 cases and deaths are surging across the country, as many fear, increasing coronavirus test kits made available to the public would reveal the true extent of the outbreak. Mass gatherings in many states are starting to be limited, education systems are closing down, and the federal government is now starting to enforce social distancing policies for all citizens, this all suggests, that an Italy-style lockdown could be on the horizon.

        Anxieties are increasing this week as brawls have been reported at several big-box retailers. It was unclear what customers were fighting about. 

        Here’s footage on Thursday of a fight between two customers at a Brooklyn Costco.   

         A Sam’s Club customer on Thursday was stabbed with a wine bottle over a pack of water in Hiram, Georgia. 

        Local police at a Costco in Lynnwood, Washington, were keeping order on Saturday as hundreds of customers wrapped around the building, due to new social distancing policies that only allowed a certain amount of people in the store at one given time. 

        A longline developed outside the Ann Arbor, Michigan Costco on Saturday. 

        Now, this is crazy, a huge line extending down a street of people trying to get into La Habra, California Costco. 

        At an undisclosed Costco, apparently all the chicken is gone. 

        Shelves are bare at a Walmart.

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        A Target in Cincinnati, Ohio, limited customers to products on Saturday morning. 

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        Toilet paper supply at a Cincinnati, Ohio was out on Friday evening. 

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        All the fruit is gone at a supermarket in New Jersey around 5 pm Saturday. 

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        Customers clearing shelves at another Costco in California. 

        Once the food runs out at grocery stores, consumers will start panic hoarding guns – oh wait, that’s already happening… 

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        Tyler Durden

        Sat, 03/14/2020 – 18:55

      3. Covid-19 Impacting US Defense Readiness As Pentagon Announces "Minimal Staffing"
        Covid-19 Impacting US Defense Readiness As Pentagon Announces “Minimal Staffing”

        The Pentagon on Saturday afternoon said it has moved toward “minimal staffing” over coronavirus fears a day after President Trump formally declared a national emergency. CBS national security correspondent Cami McCormick broke the news, describing: 

        Defense Dept. officials have raised alert level at the Pentagon to Bravo. There will now be “minimal staffing” at the Pentagon due to coronavirus.

        Crucially this alert level refers to staffing levels and virus precautionary measures only and is not a reference to DEFCON, which is the national defense readiness condition used to gauge military threats. 

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        AFP via Getty

        However, as we reported earlier there’s growing concern that the Covid-19 pandemic could significantly impact US defense readiness.

        Indeed it appears this is already occurring. Pentagon correspondent for Al Monitor Jack Detsch reports there’s growing confirmed cases among the military and DoD ranks: 

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        CBS’ McCormick additionally reported based on Pentagon officials that “in the next couple of days, the Pentagon may limit the exposure to take out food…tables, buffet lines, etc. inside the Pentagon” over virus outbreak fears. 

        Approximately 23,000 military and civilian DoD employees work at the Pentagon daily, which includes offices of the top generals among combined branches and the Secretary of Defense. The building famously has five ring corridors per floor which make for a total of 17.5 miles of hallways with endless offices lining each side. 

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        This comes on the heels of late Friday the Department of Defense restricting all US troop movement in the United States to the “local area” of their assigned bases effective Monday. 

        “This restriction will halt all domestic travel, including Permanent Change of Station, and Temporary Duty,” said a press statement released with the memo as reported by Defense One. “Additionally, service members will be authorized local leave only.”

        The new directives come among broader national efforts to slow the spread of Covid-19 which included Trump’s national ‘State of Emergency’ declared Friday, but at a moment of concern that the virus could devastate densely-packed military barracks and severely impact US defense readiness. 

        The novel virus “could knock units out of commission for weeks,” writes Army Special Forces veteran and national security journalist Jack Murphy. However, he also adds: “The military is unlikely to be hit by COVID-19 as hard as the general population because the virus particularly affects the sick and elderly according to the Center for Disease Control.”

        Currently, some National Guard units have begun deploying in ‘hot zones’ like a community in New Rochelle, in order to assist with quarantines and food and medical supplies delivery.


        Tyler Durden

        Sat, 03/14/2020 – 18:30

      4. "No State Is Prepared" – Mapping Where Hospitals Will Run Out Of Beds First If Virus Cases Spike
        “No State Is Prepared” – Mapping Where Hospitals Will Run Out Of Beds First If Virus Cases Spike

        A USA Today analysis of American Hospital Association (AHA) hospital bed data shows that if confirmed Covid-19 cases and deaths follow similar growth curves as in China, Italy, and Iran, there could be six patients for every existing hospital bed. This means that no hospital system in the US is prepared for a pandemic. 

        “Unless we are able to implement dramatic isolation measures like some places in China, we’ll be presented with overwhelming numbers of coronavirus patients – two to 10 times as we see at peak influenza times,” said Dr. James Lawler, an infectious disease researcher at the University of Nebraska Medical Center. 

        Lawler warned that “no hospital has the current capacity to absorb” a massive surge of Covid-19 infections.

        USA Today estimates that 23.8 million Americans could be infected. That number is based on an infection rate of 7.4%, similar to the common flu. Some experts say the infection rate could be much higher.

        The Johns Hopkins Center for Health Security says infections could hit 38 million, including 9.6 million who will need to be hospitalized, and about 33% of whom would need ICU-level care.

        With an infection rate unclear, USA Today’s analysis used that of a mild flu season. It said if everyone in the US who gets infected is hospitalized, that would be 4.7 million patients, which is about 6 per every hospital bed.

        The fast-spreading virus could overwhelm the US’ healthcare system if confirmed cases and deaths surge in a 2-3-week period, as it did in China, Italy, and Iran. Currently, Italy’s health care system has been crippled with the lack of hospital beds and respirators. The result of not providing ICU-level treatment to the most critical patients has resulted in the country’s extraordinarily high 6.8% mortality rate. 

        The doomsday scenario that could play out in the US is an overburden healthcare system, where the most vulnerable cannot get ICU-level treatment, leading to a mortality rate comparable to Italy.

        “When hospitals become much more crowded, literally stretched beyond capacity, if I have a heart attack, will I be able to get care? If I have an auto accident, will I get care? How do we triage that?” said Michael Osterholm, director of the Center for Infectious Disease Research and Policy at the University of Minnesota. “We can’t approach this like I approach a game of checkers with my 10-year-old grandson,” he added. “We have to approach this like a chess master thinking 10 to 15 moves down the board.”

        Many hospital systems across the US aren’t designed to handle a mass influx of patients from a viral outbreak, indicating that no state is ready for a pandemic.

        During the next outbreak, USA Today notes that many West Coast states would experience 20-24 seriously ill patients per available hospital bed. The odds of getting a bed are significantly higher in Rocky Mountain and Plains states. As for the East Coast, sick patients in Maryland and Connecticut would have the most difficulty in obtaining a bed.

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        When it comes to the rest of the world, the US ranks very low in the number of hospital beds per 1000. 

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        As for ICU beds per 100,000, the US ranks the highest among the global community. 

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        USA Today’s analysis assumes confirmed cases would happen over time, but if observing data from China, Italy, and Iran, Covid-19 outbreaks tend to strike hard and quick. Considering confirmed cases in the US are a little over 2,500 on Saturday afternoon, containment measures for all major metro areas have been missed by over a month. It’s only now preventive strategies to mitigate community spreading are being implemented, and even then, most people are ignoring the warnings to conduct social distancing, which all means cases are likely to increase in the coming weeks. 

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        “Whenever you have an outbreak that you can start seeing community spread … when you have enough of that, then it becomes a situation where you’re not going to be able to effectively and efficiently contain it,” Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, told a House committee Wednesday. “Bottom line, it’s going to get worse,” Fauci said.

        How much worse is the billion-dollar question. As far as what we can see, the peak crisis has yet to arrive. Containment windows have been missed across major metros, implying that hospital systems could begin experiencing an influx of cases in the weeks ahead. If hospitals get overwhelmed, the US could be the next Italy with high mortality rates. 


        Tyler Durden

        Sat, 03/14/2020 – 18:05

      5. Governments Fast Reverting To Wartime Tactics & Rhetoric For Coronavirus
        Governments Fast Reverting To Wartime Tactics & Rhetoric For Coronavirus

        Authored by Jason Ditz via AntiWar.com,

        A global pandemic of the coronavirus is hitting nations the world over, and facing a challenge unprecedented in recent history, officials are falling back on wartime tactics, and particularly rhetoric, with promises of grand emergency measures to try to keep things under control.

        Emergency measures are mostly in the form of travel control, banning flights to and from certain places. There have been talks of mobilizing militaries, in practice efforts are centered on enforcing quarantines that were already declared. Deeper measures as yet don’t seem to be happening.

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        Via ABC News

        France’s President Macron typified the rhetoric of the hour, saying that national greatness meant “women and men able to put the collective interest above all,” while encouraging solidarity and fraternity.

        In the US too this state of emergency is mostly just travel bans, though the Pentagon has halted domestic travel beyond local areas for both troops and their dependents. The US is also scaling back involvement in European operations to come.

        Today, National Guard soldiers deployed inside New Rochelle’s coronavirus containment zone will receive their operations order, issuing further instructors on how to proceed in the coming days. 

        Currently, National Guard Military Police and other support units are inside the containment zone providing food and assisting with cleaning public areas inside the zone.

        On Tuesday Gov. Andrew Cuomo of New York announced a one-mile containment zone around the Young Israel of New Rochelle synagogue in New Rochelle where there has been a cluster of COVID-19 cases. — Connecting Vets

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        Those operations, a multinational exercise, was meant to be the biggest US involvement there in decades. Officials are now citing “health protection” as a reason to dial back involvement.

        For the US, the military isn’t exactly in a position to lead by example. In Afghanistan, the Pentagon is conceding that there are US troops with symptoms, but none have been tested. The reason why is simple: the Pentagon doesn’t have tests to administer.


        Tyler Durden

        Sat, 03/14/2020 – 17:40

      6. Ed Snowden: "Social Distancing Is Underrated"
        Ed Snowden: “Social Distancing Is Underrated”

        In light of the World Health Organization (WHO) finally designating the Covid-19 outbreak seen in 113 countries and territories around the world as a pandemic, the debate this week of “social distancing” has erupted across social media and on Western mainstream media outlets..

        The idea is that by canceling schools and large public gatherings, coupled with workers working online from home, there will be a reduction of coronavirus community spread, reducing the peak in the number of cases and put less stress on the limited resources of the medical community.  This is illustrated by the figures below.  You notice the number of cases doesn’t change (the area under the curve). 

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        But, it has another issue:  it greatly extends the period in which society is affected by the disease.

        However, NSA whistleblower Edward Snowden tweeted Wednesday that “Social distancing is underrated,” as it appears this life-saving measure could be implemented across the US as confirmed virus cases and deaths soar. 

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        Experts at the Centers for Disease Control and Prevention (CDC) have suggested social distancing could be a very effective way to limit exposure to the fast-spreading virus. 

        The CDC’s recommendation for what social distancing involves is to avoid mass gatherings, stay out of heavily-trafficked areas, and maintain a safe distance from one another to limit transmission. This is different than quarantine or isolation that completely bans people from public places. Social distancing is more of a behavioral practice to limit transmission probabilities while out in public, rather than a location constraint seen under a quarantine. 

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        “Social distancing is a very general term, so there are a bunch of different types of measures that can fall under it,” Dr. Susy Hota, an Infectious Diseases Specialist and Hospital Epidemiologist at the University of Toronto’s research hospital University Health Network told the Time. 

        Hota said people choosing to work at home instead of the office would be considered social distancing. “All of these measures are trying to achieve the same thing… but [with] slightly different tactics and slightly different nuances.”

        She said social distancing does have its problems, including when traveling on public transportation, accessing public services like post offices, going to the grocery store, and even attending worship service. Though even then, if social distancing and good hygiene practices are implemented, they can easily cut down their probabilities of contracting the airborne virus without too much disruption in life. 

        “Those are behaviors we all have to start practicing now in parts [of the world] where we don’t have to enact additional measures,” she said.

        As government officials urge Americans this week to exercise social distancing measures to mitigate virus spread. The search interest on the internet for “social distancing” has erupted: 

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        Max Brooks, the author of a zombie apocalypse book, argued in The New York Times that the “best way to prevent ‘community spread’ is to spread out the community. That means keeping people apart.” 

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        KING 5 News Seattle’s Michelle Li tweeted that the best way to avoid spreading is to keep the distance from everyone. 

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        Snowden’s support for social distancing is strongly supported by evidence from the Spanish Flu Epidemic. A little over one hundred years ago, during the Spanish flu, Philadelphia held a massive parade across the city – ignoring warnings from health officials of a virus outbreak. Three days later, thousands were infected, and in a few short days, 4,500 were dead. It was a different story in St. Louis, just 900 miles away, where local officials listened to health experts and told people to keep their distance from one another and avoid public places. 

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        Which looks eerily similar to the current virus spread with China limited (full social distancing) vs the Rest of the World (which has been slow to enact such authoritarian measures).

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        However, there’s a problem developing with today’s coronavirus outbreak in the US – as per Dr. Michael Osterholm, the director of the Center for Infectious Disease Research and Policy (CIDRAP) at the University of Minnesota, who warned on CNBC earlier this week, that the window of suppressing the virus in hardest-hit areas, such as King County, Washington; Santa Clara, California; Los Angeles; and the Tri-state area, has likely passed, suggesting that maybe social distancing isn’t going to be enough – but rather lockdowns are imminent.


        Tyler Durden

        Sat, 03/14/2020 – 17:15

      7. "The Damage Is Not Theoretical" – It's Deep, Global, & Pervasive
        “The Damage Is Not Theoretical” – It’s Deep, Global, & Pervasive

        Authored by Sven Henrich via NorthmanTrader.com,

        We just witnessed a global collapse in asset prices the likes we haven’t seen before. Not even in 2008 or 2000. All these prior beginnings of bear markets happened over time, relatively slowly at first, then accelerating to the downside.

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        This collapse here has come from some of the historically most stretched valuations ever setting the stage for the biggest bull trap ever. The coronavirus that no one could have predicted is brutally punishing investors that complacently bought into the multiple expansion story that was sold to them by Wall Street. Technical signals that outlined trouble way in advance were ignored while the Big Short 2 was already calling for a massive explosion in $VIX way before anybody ever heard of corona virus.

        Worse, there is zero visibility going forward as nobody knows how to price in collapsing revenues and earnings amid entire countries shutting down virtually all public gatherings and activities. Denmark just shut down all of its borders on Friday, flight cancellations everywhere, the planet is literally shutting down in unprecedented fashion.

        The message is clear:

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        The question is not if, but how long and deep:

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        The damage is not theoretical, it’s real as we just saw the fasted collapse in asset prices in history:

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        And it’s global, deep and pervasive.

        $FTSE collapse to lows from 8 years ago:

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        $DAX collapsed from all time highs to the lows from 2016:

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        The US broader $NYSE dropped to below the US election lows of 2016:

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        Absolute carnage to investor portfolios who can only be assumed to have caught by total surprise by the severity of the 2020 market crash. The buy the dip mentality so pervasive over the last 11 years have come to a sudden end: Death by impact.

        The damage is pervasive and structurally impacting. Trapped longs looking for rescue and salvation with confidence taking a major hit. And the only hope now are technically massive oversold readings, a Fed desperate trying to regain control and a desperate search for signs that the coronavirus situation can be brought under control.

        Central bank efforts over the past 2 weeks have been a miserable failure and emergency rate cuts have not been able to stem the tide of system selling and liquidations. Until Friday that is perhaps. The Fed resorted to unprecedented and some may say pathetically desperate efforts to stem the bleeding by announcing $500B repos including a $1 trillion repo on Friday.

        To put these numbers in perspective:

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        There is no precedence for the situation we are facing now. An epic battle of humanity trying to combat a new virus for which there is no cure and still no all clear signal, a global asset price collapse at the end of an aging and highly indebted business cycle and central banks with limited ammunition desperately trying to regain and maintain control.

        And this week the Fed is on tap to prove it can still reassert control. Already now expected to cut rates to zero large scale asset purchases and a relaunch of full QE is perhaps only a question of when and not if. Given the current state of markets perhaps the Fed can’t afford to wait. So this coming week is key for markets and a Fed whose credibility is already on the ropes.

        It’s a very difficult environment for investors and traders as the action is whipsawing more intensely than we’ve ever seen before.

        But technicals help us to guide us through the challenge. Even Friday’s record bounce rally was in the technical picture.

        What are the risks of a major bear market yet to come and what are the rally opportunities?

        For our analysis please see this weekend’s market review video:

        *  *  *

        Please be sure to watch it in HD for clarity. To get notified of future videos feel free to subscribe to our YouTube Channel. For the latest public analysis please visit NorthmanTrader. To subscribe to our market products please visit Services.


        Tyler Durden

        Sat, 03/14/2020 – 16:50

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