May 04

Today’s News 4th May 2020

  • Greek Brothels To Reopen But Hookers And Clients Required To Wear Masks And Gloves
    Greek Brothels To Reopen But Hookers And Clients Required To Wear Masks And Gloves

    In Greece the discussion about “essential businesses” appears to have gone in a different direction than in the United States. While Americans are bickering over when to reopen malls, restaurants and casinos, Greece has managed to get its “most essential” businesses up – so to speak – and running. By which we of course mean brothels. 

    Brothels in Greece – where a global pandemic can’t possibly stop the local men from getting their dose of sex-for-sale – are set to re-open soon, however with a set of new laughably absurd protection measures, on top of the precautions one would already expect when visiting a brothel, according to The Newspaper.

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    Customers at brothels will be required to wear plastic masks and gloves while having sex, according to the Greek press. And in addition to the robust security already needed in a brothel, the additions of thermometers, disposable sheets and “frequent periodic disinfection” of the business will all be a part of post-coronavirus brothel life (it wasn’t immediately clear how s temperatures of both hookers and clients would be taken).

    It does however beg the question: why weren’t disposable sheets and “frequent periodic disinfection” used to begin with?

    But, we digress. This is just another example that no matter what the circumstances, sex sells and capitalism adapts. Back in March, we noted that one company had launched a “solution” to the loneliness of quarantine by offering antibacterial sex dolls.

    The lesson for the US? If the Greeks are this insistent on going back to work, maybe there’s a win/win scenario: convert all those vacant WeWork offices into brothels and get all those millions of women “seeking arrangements” with wealthy sugar daddies to “work” legally: who knows, it could be the basis for a truly modern “New Deal” aimed at pulling the US out of its current depression.


    Tyler Durden

    Mon, 05/04/2020 – 02:45

  • Three Reasons Why The Eurozone Recovery Will Be Poor
    Three Reasons Why The Eurozone Recovery Will Be Poor

    Authored by Daniel Lacalle,

    The Eurozone economy is expected to collapse in 2020. In countries like Spain and Italy, the decline, more than 9%, will likely be much larger then emerging market economies. However, the key is to understand how and when will the eurozone economies recover.

    There are three reasons why we should be concerned:

    1. The eurozone was already in a severe slowdown in 2019. Despite massive fiscal and monetary stimulus, negative rates, and the ECB balance sheet above 40% of GDP, France and Italy showed stagnation in the fourth quarter and Germany narrowly escaped recession. The eurozone weakness started already in 2017 and disappointing economic figures continued throughout the next years. Many governments blamed the weakness on the Brexit and Trade War cards, but it was significantly more structural. The eurozone abandoned all structural reforms in 2014 when the ECB started its quantitative easing program (QE) and expanded the balance sheet to record-levels. Manufacturing PMIs were already in contraction, government spending remained too high and the elevated tax wedge weighed on growth and jobs. In 2019, almost 22% of the eurozone GDP gross added value came from Travel & Leisure, a sector that will unlikely come back anytime soon, while the exporting sector is also likely to suffer a prolonged weakness.

    2. The banking sector is still weak. In the eurozone, 80% of the real economy is financed via the banking channel (compared to less than 15% in the United States). Eurozone banks still have more than 600 billion euro in non-performing loans (3.3% of total assets vs 1% in the U.S.), an almost unprofitable business with a poor return on tangible assets (ROTE) due to negative rates, and a significant challenge ahead, as most of the growth investments, in LatAm in particular, may reduce capital strength significantly in the next months. Most of the eurozone governments are relying on leveraging the banks’ balance sheets in their “recovery plans”. A massive increase in loans, even with some form of state guarantee, is likely to cause significant strains on lending capacity and solvency in the next years, even with massive TLTROs and capital requirement reductions.

    3. Most of the recovery plans go to government current spending, and tax increases will surely impact growth and jobs. The eurozone tax wedge on jobs and investment is already very high. According to the Paying Taxes 2019 report, the majority of eurozone economies show widely uncompetitive taxation levels. As most governments will massively increase deficits to combat the Covid-19 crisis, there is a high likelihood of a massive increase in taxes that will make it more difficult to attract investment growth and jobs. Most of the recovery plans are also aimed at bailing out the past and letting the future die. There are massive bailout packages for traditional conglomerates and industries, but investment in technology and R&D continues to have high burdens and no support. Considering that the eurozone was already in contraction in the middle of the massive Juncker plan (that mobilized more than 400 billion euro in investments) and the large green policies implemented, it is safe to say that relying on a Green New Deal will unlikely boost growth or reduce debt. The main problem of these large investment plans is that they are politically directed and, as such, have a large tendency to fail, as we saw with the Jobs and Growth Plan of 2009.

    Almost 30% of the eurozone labor force is expected to be under some form of unemployment scheme, be it temporary, permanent, or self-employed cessation of activity. After a decade of recovery from the past crisis, the eurozone still had almost double the unemployment rate of its large peers, the US, or China. Germany may recover jobs fast, but France, Spain or Italy, with important rigidities and tax burdens on job creation may suffer large unemployment levels for longer.

    The eurozone also faces important challenges into a recovery due to its lack of technological and intellectual property leadership. Those two factors will help China and the U.S. recover faster, as well as the reality of having more flexible jobs market and higher support for entrepreneurial activity through attractive taxation. Considering the severity of the crisis, the eurozone is likely to need at last 10% of its GDP o rebuild the economy, but that figure is almost completely absorbed by the traditional sectors (airlines, autos, agriculture, tourism). Furthermore, the New Green deal initiative includes severe restrictions to travel and energy-intensive industries that may act as a brake on future growth.

    The ECB policy was already unnecessarily expansionary in the past years, and now it runs out of tools to address the unprecedented challenge of recovery post-Covid-19. With negative rates, targetted liquidity programs, asset purchases of private and public debt, and a balance sheet that exceeds 42% of GDP of the eurozone, the best it can do is to disguise some risk, not eliminate it. We should also warn of adding massive monetary imbalances when demand for euros globally is acceptable but shrinking according to the Bank of International Settlements, and risk of redenomination remains in a politically unstable eurozone.

    Our estimates show that, even with large fiscal and monetary stimulus, the eurozone economy will not recover its output and jobs until 2023, and rising debt to record highs as well as monetary imbalances due to massive supply of euros in a diminishing demand environment, may cause significant problems for the stability of the eurozone.

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    The eurozone needs to understand that if it decides to increase taxes to address the rising debt due to the Covid-19 response, its ability to recover will be irreparably damaged.


    Tyler Durden

    Mon, 05/04/2020 – 02:00

  • China Faces "Economic Reckoning" As COVID-19 Turns World Against Globalisation
    China Faces “Economic Reckoning” As COVID-19 Turns World Against Globalisation

    Authored by Cary Huang, op-ed via The South China Morning Post,

    • Trump, Brexit, trade war… the forces against globalisation have been gathering pace since 2008. Now the coronavirus threatens the knockout blow

    • That’s bad news for an economic giant that is one of its biggest beneficiaries

    One of the more worrying consequences of the  coronavirus is that it looks likely to become a catalyst for deglobalisation.

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    At the centre of this will be the decoupling of the Chinese economy with developed economies and the US in particular. The world’s three largest free economies – the European Union, the  United States  and  Japan – are all drawing up separate plans to lure their companies out of China.

    European Union trade commissioner Phil Hogan has called on companies to consider moving away from China; US President  Donald Trump’s top economic adviser Larry Kudlow has said the government should pay the costs of American firms moving manufacturing back from China onto US soil; and Tokyo has unveiled a US$2.2 billion fund to tempt Japanese manufacturers back to Japan or even to Southeast Asia.

    Coronavirus: Can China overcome global mistrust to lead the fight against Covid-19

    Meanwhile, bills are piling up in the US Congress aimed at reducing America’s reliance on Chinese supply chains and pushing for a decoupling of the world’s two largest economies.

    While these are recent moves, the truth is the debate on globalisation – and deglobalisation – began more than a decade ago in the wake of the global financial crisis of 2008.

    After decades of globalisation in trade, capital flows and even people-to-people exchanges, the trend has reversed over the past decade as trade and financial integration stalled.

    Protectionist tendencies are on the rise. Since 2008, G20 countries have added more than 1,200 restrictions on exports and imports.  Britain’s decision to leave the EU, the election of Trump on a protectionist agenda, and the rising popularity of right-wing political parties in France, Italy and elsewhere are all examples of rising public discontent with the status quo.

    Deglobalisation gained steam when Trump launched tariff wars against many of American’s trade partners, China in particular. Since the advent of the  US-China trade war in the past two years there has been growing evidence of a sharp decrease in merchandise, capital and people-to-people flows.

    Conventional wisdom suggests globalisation makes the world a better place to live as a whole, as free trade generally promotes global economic growth. Economic liberalisation creates jobs, makes companies more competitive, and lowers prices for consumers. Advances in technology and communications have made it easier than ever for people and businesses to stay connected.

    Chinese farmers see livelihoods threatened by coronavirus pandemic and related economic slump

    But globalisation is a complicated issue and its benefits and disadvantages are not equally shared. Globalisation is good for multinational corporations and Wall Street as it opens up opportunities to sell goods and services to much larger markets with greater profits. They also benefit from moving assembly lines to developing countries where production costs are lower.

    The biggest problem for developed countries is that jobs are lost in the process. Supporters of globalisation point out that it has brought about cheaper imported goods. But this benefit does not offset the decline of jobs and therefore wages.

    Another problem for developed countries is that they lose domestic fiscal revenue when countries move production elsewhere. In the US, the process has cost not only many jobs but also steadily increased the trade deficit and debt.

    China has been the biggest beneficiary as its economic rise has come hand in hand with globalisation.

    Since it joined the World Trade Organisation in 2001, China has leapfrogged France (in 2005), Britain (in 2006), Germany (in 2007) and Japan (in 2010) to become the world’s second-largest economy. This rise was thanks largely to open access to international markets and billions of dollars of foreign direct investment (FDI). China has for some years been the world’s top destination for FDI and this has played a critical role in making the country a global economic powerhouse, turning an agricultural backwater into the world’s manufacturing hub and largest merchandised goods exporter in just a few decades.

    The flip side is that deglobalisation poses a very real risk for China, as its economic prospects have become so deeply intertwined with world markets.

    US colleges face US$15 billion hit as Chinese students stay away amid coronavirus pandemic

    Exports of goods and services accounted for 19.51 per cent of China’s GDP last year, according to the World Bank. While that figure is declining, it is still sizeable. Based on this, a 10-percentage-point decline in China’s exports might mean a decline of about 2 percentage points in GDP growth on average.

    Exports employ 180 million workers, so any hit to the sector would also have a knock-on effect on investment, incomes, consumption and employment.

    The outbreak of Covid-19 has further convinced the sceptics of globalisation by highlighting a flaw in supply chains. Developed economies have been made painfully aware that decades of deindustrialisation have resulted in greater risks in the areas of public health, national security and geopolitics.

    Politicians, policymakers and business executives in developed economies have come to realise the hazard involved in overreliance on China for critical supplies, particularly for medical equipment, pharmaceuticals and medicines.

    What has upset many in the West is the realisation that they were wrong to assume globalisation and democracy would go hand in hand. China’s meteoric economic rise, its pivot to more authoritarian rule and a more assertive stance on the international stage in recent years have proved such assumptions completely wrong.

    Coronavirus: How badly is Covid-19 disrupting the oil industry in the US and beyond?

    For China hawks in the West, the globalisation of the past few decades has seen the free West help create a communist monster, one that now poses the most severe challenge to established universal values and the global order.

    That is why the Trump administration’s December 2017 National Security Strategy classified China as a strategic rival that aimed to “undermine the American economy, values and interests”. The EU has made a similar policy statement, identifying China as a “systemic rival”

    The global economy as a whole will suffer from deglobalisation and the decoupling of the world’s largest economies if the flow of capital, investment and trade becomes less dynamic. But the escalating trade war and rising strategic competition between the US and China were fostering the deglobalisation trend even before the outbreak of the coronavirus pandemic. Covid-19 is only likely to accelerate the decoupling and therefore may well prove to be a historic turning point.

    It seems unavoidable that the coronavirus will usher in a new era of economic development, both for China and the rest of the world. 


    Tyler Durden

    Mon, 05/04/2020 – 00:00

  • Majority Of Americans Don't Trust Tech Companies With Contact-Tracing
    Majority Of Americans Don’t Trust Tech Companies With Contact-Tracing

    With the idea of contact tracing as a plan to help re-open businesses and stop the spread of the COVID-19 virus, many Americans are skeptical about their privacy and how much data these tracing tools will collect on their lives.

    In a joint survey between the Washington Post and the University of Maryland, only 43 percent of respondents said they trust the tech companies responsible for creating these contact tracing tools – specifically Apple and Google.

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    Health insurance companies didn’t fare much better at 47 percent, while universities and public health agencies held a majority of trust with 56 percent and 57 percent, respectively.

    Infographic: Who Americans Trust with Contact Tracing | Statista

    You will find more infographics at Statista

    As Statista’s Willen Roper notes, contact-tracing has been touted as one of the only plans that would allow people in the U.S. to begin re-opening measures without causing further outbreaks. Experts suggest around 60 percent of the population would need to participate in contact tracing in order to stop the spread of the virus. But in the same survey, only 50 percent of respondents said they would use a contact tracing app, with only 17 percent of those people saying they would definitely use it.

    Many are weary of privacy concerns surrounding companies having access to location data and health records, despite Google and Apple creating strict privacy guidelines around their contact tracing tools. Encrypted data and a plethora of safeguards are said to exist within these contact tracing tools, but with large data breaches occurring almost annually with top tech companies, many are still cautious.


    Tyler Durden

    Sun, 05/03/2020 – 23:35

  • Dems' Rehabilitated Hero: Online Disgust Follows Glowing Praise For George W. Bush's COVID-19 Message
    Dems’ Rehabilitated Hero: Online Disgust Follows Glowing Praise For George W. Bush’s COVID-19 Message

    Authored by Andrea Germanos via CommonDreams.org,

    George W. Bush’s record in office became the subject of numerous tweets after a video message released Saturday from the former president elicited praise from some Democrats.

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    In the video statement, shared on Twitter by the George W. Bush Presidential Center, Bush called on people to come together to face the “shared threat” of the coronavirus pandemic.

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    The former president said “we have faced times of testing before,” referencing the post 9/11 period when he said the nation rose “as one to grieve with the grieving” — a time period his administration rolled out its war on terror, which included a torture program.

    Various progressive journalists pushed back, however, against those who appeared to be sanitizing Bush’s record and suggesting he was preferable to President Donald Trump.

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    Writing in 2018, Andy Worthington, investigative journalist and author of The Guantanamo Files, criticized…

    “the bizarre propensity, on the part of those in the center and on the left of U.S. political life, to seek to rehabilitate the previous Republican president, George W. Bush.”

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    Worthington pointed to a Pew poll as Trump took office showing that 48% of American backed the use of torture in some circumstances, saying it was “a sign of the enduring power of the Bush administration’s bellicose pro-torture maneuverings in the wake of the 9/11 attacks.”

    * * *

    And Trump himself joined in the pile-on, but for different reasons.

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    Tyler Durden

    Sun, 05/03/2020 – 23:10

  • Future Economy Class Cabins In Post-Corona World Could Look like This…
    Future Economy Class Cabins In Post-Corona World Could Look like This…

    The future of economy class cabins on commercial jets could be reshaped because of the COVID-19 pandemic. New cabin seating arrangements have already been conceptualized by an Italian design firm this week that shows plastic shields and backward seats.

    Aviointeriors has designed a “hygienic screen to cocoon passengers and keep them separate from their neighbors. Let’s take a look at Glassafe, a potential post-COVID-19 economy cabin modification,” reported Simple Flying.

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    Glassafe is a kit-level solution for airlines that can be installed on existing seats to make close passenger seating a reality while abiding by social distancing rules.

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    The company has also rolled out another concept. It is called Janus, a row of three seats where every middle seat is positioned backwards.

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    As shown in this view, Janus has a “wrap-around transparent barrier envelopes each passenger, providing a big plastic cocoon that protects from germs, bad breath, and fights for the armrest,” said Simple Flying.

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    The biggest challenge at the moment for major airlines is to make customers feel safe in a closed environment. And perhaps by restructuring the cabin with social distancing in mind, plastic shields and backwards seats could be the solution.

    We noted on Friday morning that Ryanair CEO Michael O’Leary was unhappy with “idiotic” in-flight social distancing rules. He said Irish authorities forced his planes to eliminate the middle seat to comply with new regulations.

    Perhaps O’Leary should give Aviointeriors a call about the Janus seating arrangement…


    Tyler Durden

    Sun, 05/03/2020 – 22:45

  • Leftists Fume As Michael Moore Turns On Fraudulent "Green" Movement In Latest Movie
    Leftists Fume As Michael Moore Turns On Fraudulent “Green” Movement In Latest Movie

    Executive produced by activist and filmmaker Michael Moore, 21stCentureWire.com points out that the new documentary Planet of the Humans, dares to say what no one else will say on this Earth Day – the leading ‘green’ environmental activists, including Al Gore, have taken their followers down the wrong road – selling out the real environmental movement to some of wealthy corporate interests in America and he world.

    This film is the wake-up call to the reality we are afraid to face: the mainstream environmental movement is pushing lies in the form of various techno-fixes and band-aids – all of which are reliant and use large quantities of fossil fuels and rare earth minerals. Have environmentalists fallen for a “green” illusion? More than any other documentary to date, this film exposes the wholesale fraud behind subsidized industries like biomass fuels, wind turbines, and even not-so ‘green’ electric car…

    …and that is why Moore’s typical leftist cult following has turned on him so aggressively – facts don’t fit their narratives and cognitive dissonance is not a safe space.

    In fact, as 21stCenturyWire.com reports, ever since Moore released the new documentary, leftwing green activists have leveled a furious attack against the filmmaker for daring to blow the whistle on the “green energy scam.” Moore, a hero of the political left, has now cast serious doubt over the efficacy of ‘renewables’, including solar and wind energy. Incredibly, many green groups and political operatives are now trying to get the film banned.

    A recent report from Sky News in Australia talks about how the new film presents a number of inconvenient truths. 

    Watch:

    As VoxDay notes, who would have expected Michael Moore would take on one of the biggest shibboleths of the Left, the so-called Green movement and its massive globo-corporate charade of “renewable energy”:

    Examples include a zoo that claims to power itself on ‘renewable’ elephant dung but only produces enough to heat the elephant house.

    They film a supposedly solar-powered music festival that quietly plugs into the grid and a similar arrangement at General Motors’ HQ at the launch of a hybrid, plug-in car, where the electricity grid powering the vehicle is ’95 per cent’ fed by coal.

    The film also takes issue with solar panels, highlighting their limited shelf-life and that they are made from non-renewable quartz and coal.

    In another sequence, joshua trees are chopped down in California so a huge solar facility can be built.

    Moore’s documentary is particularly damning of ‘biomass’, the supposedly-renewable energy created by burning organic matter. The film shows huge piles of trees that have been chopped down to feed a power plant, its chimney belching out smoke that appears far from environmentally sound.

    Viewers are told biomass is the biggest single source of renewable energy around the world, and – nonsensically given it is supposed to be about energy conservation – has involved wood chips being shipped to Europe from North America, Brazil and Indonesia.

    ‘Our anxiety over [global] warming has panicked us into embracing anything green or alternative without actually looking too closely at what is involved,’ the film states. With plans to turn animal fat into biomass fuel, the film asks: ‘Is there anything too terrible to qualify as green energy?’

    The film suggests that mega-rich businessmen – including Sir Richard Branson and British timber investor Jeremy Grantham – and banks such as Goldman Sachs – are keen to invest in green energy because they want to make a quick buck rather than because they are worried for the planet. According to Moore, Toyota, Citibank and bulldozer giant Caterpillar becoming sponsors of Earth Day provided final confirmation that Big Business has taken over the green movement.

    When they had picked their jaws off the floor, the first response from some of the climate scientists and environmental campaigners who have been enthusiasts for renewable energy delighted their opponents – they wanted to ban it.

    Finally, while this documentary is groundbreaking in the sense that it is one of the first ever comprehensive exposures of the environmental fraud which underpins ‘sustainable energy’ and the much celebrated Green New Deal, we note 21stCenturyWire.com’s warns that towards the end of the film director Jeff Gibbs veers into extremist ‘depopulation’ rhetoric, and infers that a radical social engineering agenda must be pursued in order to achieve population control – which he believes will somehow stop a ‘human-caused extinction event’ due to man-made CO2-induced ‘climate change.’ 

    Putting aside that radical ideological segue by Gibbs, on balance, the film remains a powerful piece of investigative journalism which goes a long way towards challenging the green orthodoxy on widely held assumptions surrounding ‘green’ energy and sustainable development – which is crucial in advancing a fact-based discussion on how the world will realistically meet its energy needs in the future, as well as shining a light on the transnational profiteers who are pushing Wall Street’s ‘Green New Deal’ speculative energy market.


    Tyler Durden

    Sun, 05/03/2020 – 22:20

  • "We Had 2 Customers All Weekend" – Georgia's Small Businesses Gripe About "Disastrous" Reopening
    “We Had 2 Customers All Weekend” – Georgia’s Small Businesses Gripe About “Disastrous” Reopening

    A few days back, we shared an interesting piece of “real time” data suggesting an increase in foot traffic to retail “hot spots” across Georgia last weekend, the first that certain businesses in the state were allowed to reopen.

    But since the “anonymized” cellphone location data didn’t offer any indication of spending, we speculated that consumers desperate for freedom after being cooped up inside for weeks might simply be taking advantage of the excuse to ramble and roam the retail landscape and window-shop, even if most of the stores in any given strip mall remained closed. Since consumer spending drives 70% of the American economy – an oft-quoted stat – if nobody was buying, then no economically productive activity was occurring and the “green shoots” were really just a mirage.

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    Over the weekend, we learned Warren Buffett has jettisoned his airline stocks and decided to sit this crisis out (laying most of the blame for his decision at the Fed’s doorstep). A report in Bisnow looking back on the first week of Georgia’s reopening found that it was mostly “a disaster” for small businesses.

    Bad Axe CEO Mario Zelaya expected business to be bad, maybe 10% of the hundreds of customers he would expect to see throw axes and drink beer on a typical weekend. “That was the worst-case scenario, especially with all the marketing we did,” Zelaya said. “The reopening weekend was a disaster. We had two customers all weekend.”

    Despite the public health and political debate, one thing is clear: The longer retailers and restaurants stay closed, the harder it will be for them to survive. “I think every small-business owner is in the same position as we are where they’re nervous, and they’re worried, and they’re scared of public backlash,” Zelaya said. “Our only decision right now is to survive. We’ll take measures to ensure that.”

    Commercial landlords mostly confirmed that about 50% of the rent from their retail tenants has been collected since the crisis began. And in states like Georgia and Texas, landlords have been mostly understanding with small businesses and even smaller chains, allowing them enough wiggle room to wait to reopen until they have a better shop at operating profitably.

    Atlanta-based real estate firm Ackerman & Co. collected about 50% of its rents from its retailers in April. Retail President Leo Wiener said he doesn’t expect May to be much different. Wiener said Ackerman continues to be understanding with tenants who choose not to open despite Kemp’s decree that they can legally do so. “At this point, it just doesn’t make business sense to push a tenant open. I’ve got to trust that the restaurateur knows their customer,” he said. “I just think it’s too early for landlords to start pushing tenants.” Bob Prosen, the CEO of small to midsized business crisis consultant The Prosen Center for Business Advancement, said many mom-and-pops don’t have enough revenue to remain shuttered much longer.  “It certainly is not their landlords that are driving this. I understand it’s a problem, but that’s not the primary driver,” Prosen said. “They are going to lose their businesses.” About a third of Atlanta-based Coro Realty Advisor’s retail tenants reopened over the past weekend, Coro President Robert Fransen said. Most others expect to reopen over the next two weeks, he said. But even with the lifting of the shelter-at-home order, Coro hasn’t demanded any of its tenants turn the lights back on. “We don’t want to treat our tenants that way. Our personal opinion from the company is [the reopen decree] was too soon,” Fransen said. “So we did feel it was unfair to box tenants in on a decision we didn’t agree with.”

    Because otherwise, businesses – who aren’t getting the same relief that employees get when they’re laid off (employees collect unemployment whereas small businesses are getting zero-interest loans, though at least most of the ‘PPP’ loans should convert to grants) – are just adding to the “L” tab that they’re going to need to pay back later.

    Zelaya said his Atlanta Bad Axe Throwing location is a “canary in a coal mine” to see how things may return for the chain once other locations open. This weekend, it plans to reopen in Oklahoma City and soon after, it plans to restart locations in Texas. His landlords have put little pressure on him to open before he is ready, let alone permitted by state law. Zelaya said he has been given rent concessions on many of his locations. “Our [Atlanta] landlord is an extremely phenomenal person. From the very beginning when it all went down, essentially his words were, ‘I feel for you man, we’ll figure it out. Just be safe,’” he said of Gartland Long, who owns Bad Axe’s location at 1257 Marietta Blvd. NW. “He’s been arguably the easiest landlord we have to work with.” But when Zelaya can, he is trying to reopen locations in hopes of just making some money again. Not only did Bad Axe lose revenue from walk-in customers, but it had to refund money from groups that booked events ahead of time. “When someone on staff gets laid off, they get unemployment insurance and they get relief from the government. When a small business is forced to shut down, we get offered loans. We don’t get the relief,” Zelaya said. “It’s not like we’re vicious, money-hungry large corporations. We have families to feed, too.”

    Even the businesses that are allowed to reopen won’t be be running at full capacity for months. In other words, investors might want to wait for a few more weeks of spending data before making any conclusions about what letter this rebound will most closely resemble.


    Tyler Durden

    Sun, 05/03/2020 – 21:55

  • QE Defender – Stop The QE Insanity: Helicopter Money And The Risk Of Hyperinflation
    QE Defender – Stop The QE Insanity: Helicopter Money And The Risk Of Hyperinflation

    Submitted by BullionStar.com,

    In 2016 at FreedomFest in Las Vegas, BullionStar first launched the QE Defender game.

    With the central banks going all in on debasement of money by all means of quantitative easing and money printing, the QE Defender Game is more relevant than ever. We have therefore updated the characters of the game which can be played for free without registration here.

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    “There’s an infinite amount of cash in the Federal Reserve” – Minneapolis Fed President Neel Kashkari, March 23

    “When it comes to this lending, we’re not going to run out of ammunition, that doesn’t happen” – Federal Reserve Chairman Jerome Powell, March 26

    QE COVID

    Over the last two months, major central banks and governments across the globe have unleashed a series of monetary and fiscal interventions on markets and economies which are unprecedented in their magnitude and which are bordering on the destruction of the current financial system.

    While the global spread of coronavirus COVID-19 provided the trigger and the pretext for the current full-spectrum quantitative easing, money printing, asset purchases and economic bailouts, the size and scope of the current assault on free markets makes all previous central bank and government interventions look insignificance in comparison.

    Markets are now officially broken. In some cases, the US Federal Reserve and the European Central Bank have become the markets, such is the scale of their asset buying, and their actions are making the bailouts of 2008 and 1998’s Long Term Capital Management (LTCM) look like a walk in the park.

    From quantitative easing to zero bound interest rate cuts and beyond, from helicopter money to economy wide bailouts, the combined monetary and fiscal interference in markets and economies over recent weeks has now distorted everything from market prices to risk preferences to the time value of money, while shattering the concept of freely trading markets and free enterprise.

    All of this in an environment of locked down economies, minimal economic activity, huge job losses, shrinking tax revenue and economic stagnation, as well as the impending approach of an unprecedented global recession, that if long lasting, will become a depression.

    On the monetary side, the renewed and limitless quantitative easing – with central banks creating money out of thin air to buy up financial assets across all risk categories – combined with interest rate distortions, is both prolonging the very asset bubbles that the same central banks themselves created, while also leading to explosive increases in money supply. This in turn is leading to the destruction of currency values, and most worryingly, setting the scene for the real possibility of hyperinflation.

    On the fiscal side, government stimulus packages of direct payments and loan and tax write-offs across vast swathes of economic sectors is not only creating a future dependence on income support and a pretext for the introduction of direct transfers to individuals, but is burdening the very same workforces with future tax burdens and even more debt.

    Helicopter Drops

    In this scenario, helicopter money, analogous to a helicopter dropping cash directly to the population, comes into play. Essentially helicopter cash represents direct methods of boosting consumer demand by the distribution of currency directly to the public into their bank accounts and into their pockets. Like quantitative easing, direct cash drops pave the way for destruction of currencies and can be the touch-paper to trigger hyperinflation.

    Importantly, on both the monetary and fiscal fronts, the sheer flood of official interventions across markets and economies is now creating the largest moral hazard problem the world has ever seen, with investors and economic actors being conditioned to the expectation that central banks and governments will always come to the rescue by propping up asset prices and bailing out entire sectors (think banks, airlines and real estate), thus creating an environment that encourages a lack of individual consequences for future risky behavior, but at the same time creating dire consequences for the collective financial and economic system.

    While the scale of what is happening right is daunting and difficult to keep track of, a ballpark estimate suggests that the total size of interventions from just some of the world’s largest monetary and fiscal authorities is currently more than US $10 trillion and counting. For a taste for how uncharted and dangerous this QE is becoming, a quick look at the US and Europe is instructive.

    Quantifying QE – USA: Whatever it takes

    After cutting interest rates to zero via two emergency decisions during March (March 3 here and March 15 here), the US Federal Reserve then announced on 15 March that over the coming months it would ramp up QE by buying at least $500 billion of US Treasury securities and at least $200 billion of agency mortgage-backed securities.

    That’s $700 billion of Fed debt buying from banks and the Treasury across a cross section of widening of risk categories. At the same time, the Fed begun flooding the Fed system with credit in an attempt to boost liquidity, including $1 trillion in repurchase operations per day.

    When this didn’t placate markets, the Fed then went ‘all in’ on 23 March and announced the start of open-ended quantitative easing (QE) in unlimited amounts, to buy an even wider range of debt from low to much higher risk classes, promising to:

     “purchase Treasury securities and agency mortgage-backed securities in the amounts needed…including purchases of corporate and municipal bonds.”

    The Fed then also established swap lines with a whole range of major central banks around the world, providing these central banks with dollar funding in exchange for US Treasuries. This in essence expands the money supply of US dollars all over the world.

    Then on 9 April the Fed was back, announcing another $2.3 trillion in QE, in the form of $600 billion purchases of bank loans of individuals and businesses, $500 billion buying of municipal bonds and loans (states, cities etc), and $850 billion in QE related to credit facilities of US corporates and asset-backed vehicles. Incredibly, this includes junk bonds and junk bond ETFs, with such market euphemisms as high yield, extended yield, and beyond investment grade. There is therefore, it seems, no limit to the depths the US Fed will go in its quest to prop up prices, bail out Wall St banks and hedge funds, and destroy financial markets.

    Not surprisingly, this new unprecedented and unlimited QE by the Fed over March and April can already be seen in the huge explosion in US money supply, where the monetary aggregate measure M2 (which includes cash, demand deposits, time deposits and money market mutual funds) has rocketed higher from the new money “out of thin air” that has no bearing on underlying economic growth. This can be seen in the below Federal Reserve chart. As a closely watched indicator in forecasting future inflation, this M2 chart speaks volumes.

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    M2  – A broad money supply measure –  Date range 2016 -2020 – To infinity and beyond Q 1 2020. Source – Fed St Louis  

    In the same vein, as architect of this rampant QE, the money out of thin air hits the Fed’s bottom line,showing up in the rapid expansion of the Fed’s balance sheet, which has ballooned from $ 4.17 trillion at the end of February to $6.4 trillion now. That’s an insane $2.2 trillion added since the start of March, or in other words, a 50% expansion in the Fed’s balance sheet since the end of February. This is neatly illustrated in the blow out of the Fed’s total assets since early March.

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    Balance sheet (total asset) of the US Federal Reserve – last 5 years. Source: Fed St Louis

    Turning to US fiscal interventions, at the end of March the US federal government pushed through a staggering $2.2 trillion economic bailout package titled the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), an intervention so large that it’s equivalent to 10% of US GDP. This CARES Act (which was ready and waiting in the wings) covers everything from loans to large and small corporations ($750 billion), the bailout of the US airline industry ($26 billion), loans to states and local governments ($340 billion), and most controversially, direct payments to individuals ($300 billion).

    This last category is literally ‘helicopter money’, with every taxpayer in the US set to receive a $1200 payment, plus an additional $500 per child, with the transfers being made via stimulus checks (cheques) and direct deposits to bank accounts. The US IRS calls these Economic Impact Payments, but they are really direct cash injections, literally the long predicted helicopter cash drops. This money is printed out of thin air, directly distributed to the population, and most importantly raises the money supply while diluting the purchasing power of all existing currency.

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    An image from the original version of BullionStar’s “QE Defender’ video game launched in 2016 and featuring the Fed chairs Ben Bernanke and Janet Yellen  

     

    Quantifying QE: Europe – ECB 

    After cutting one of its key refinancing rates to -0.75% in early March, the European Central Bank (ECB) then announced new monetary QE interventions on 12 March in the form of €120 billion of bond buying (quantitative easing) to complement its existing bond buying programme. On the same day, the ECB also announced an intent to flood cheap liquidity to European banks using longer-term refinancing operations (LTROs).

    A week later on 18 March, the ECB ramped up the QE and went practically unlimited, announcing an enormous €750 billion Pandemic Emergency Purchase Programme (PEPP), a fancy name for even more QE that aims to buy government and corporate bonds (debt), including non-financial commercial paper (short-term loans). In total, that’s €870 billion in monetary QE interventions from the ECB.

    On the fiscal side, Europe is leading the way with the largest fiscal bailout by any economic bloc so far,  totaling a massive €3.2 trillion in fiscal bailouts across the continent. This includes emergency packages of individual European countries such as Germany, Spain and France,  but also an EU wide bailout fund of €540 billion to which the European Union has agreed, consisting of €240 billion in credit for Eurozone countries via the European Stability Mechanism (ESM), €200 billion in loans for small businesses via the European Investment bank, and €100 billion in loans for job support.

    The sheer scale and unprecedented nature of these European union interventions motivated one of its countless bodies, the European Economic and Social Committee, to proudly comment on 16 April that:

    “In less than 4 weeks, the EU has done more than in the four years following the 2008 crisis, with interventions already decided that are estimated at over EUR 3 trillions.”

    As to how the EU will pay for all of these bailouts, the EU Commission claims to have the answer, saying that it will, surprise, surprise, “propose borrowing to finance the recovery plan“.

    With the US government introducing helicopter money, can Europe be far behind? While the European Central Bank claims that helicopter money is not an option that’s being considered, would you believe them? In a recent letter responding to a member of the European Parliament (dated 21 April), the ECB’s Christine Lagarde avoids the question of whether helicopter money is a fiscal or monetary in nature, only saying that it has never been discussed by the ECB’s Governing Council. But in the infamous words of another fellow Europhile Jean-Claude Juncker, “When it becomes serious you have to lie.“

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    Helipad – Letter dated 21 April 2020 from Christine Lagarde, president of the European Central Bank, about helicopter money

    Beyond the Fed and the ECB, all other major monetary authorities and governments around the globe are also engaging in massive QE and economic bailouts, from the Bank of Japan and Bank of England to the Chinese and the International Monetary Fund (IMF), from Australia to Brazil and from South Korea to Singapore.  For example, the Bank of England has its own £645 billion QE programme buying UK government bonds and sterling corporate bonds, and has now moved to directly finance the spending the UK Treasury, a form of helicopter money.

    Meanwhile, the Bank of Japan has just announced that it will now consider unlimited bond buying of government and corporate bonds – “Bank of Japan mulling unlimited bond buying at next meeting: Nikkei“. Everywhere one looks, the evidence is there, it’s QE to infinity, buying up all debt of all types and all risk categories at any price, in the process destroying the financial system and setting the scene for hyperinflation.

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    100 trillion Zimbabwean dollars

    Hyperinflation

    In an interview in 2010, then Fed chairman Ben Bernanke tried to dissuade concerns over Fed money printing, QE and market interventions, saying that:

    “This fear of inflation I think is way overstated …What we’re doing is lowering interest rates by buying Treasury securities. And by lowering interest rates, we hope to stimulate the economy to grow faster.

    The trick is to find the appropriate moment when to begin to unwind this policy. And that’s what we’re going to do.”

    Fake words then from Bernanke, fake words now. There was no real unwind. Tapering was trick and a distraction. This is the same Bernanke who explained how the Fed’s lending is merely electronic printing, creating money out of thin air, and in so doing, inflating the money supply.

    Quantitative easing, despite the complicated name, is a simple case of massively expanding the money supply. Helicopter money ditto, is also a simple case of massively expanding the money supply.

    By artificially boosting demand in a scenario of lower production and constrained supply using the printing press and its electronic equivalent (QE and helicopter money), more fiat currency is entering the existing system. This can lead to product shortages, hoarding, and higher consumer prices, i.e. rising inflation, which is the economic textbook situation of too much money chasing too few goods.

    Rising inflation in turn leads to lower purchasing poor and eroding value for a paper currency, loss of confidence in that currency, and in a downward spiral, faster spending to get rid of the increasingly worthless currency, which in turn leads to even higher prices, hoarding and inflation. And all this in an environment of economic stagnation and recession. This then leads to higher inflation expectations, and ultimately hyperinflation.

    And what are we seeing right now in the global economy, led by the large central banks and the largest economies? Explosions in money supply brought on by quantitative easing. Increasing experiments of directly transferred helicopter money to artificially boost consumer demand. Supply side shortages and hoarding. Economic turmoil and economies in stagnation due to covid-19 lock downs with massive unemployment and economies slipping into recession and possible depression.

    Hyperinflation is essentially a rapid and accelerating inflation amid a collapsing currency value, and it can arrive rapidly in an environment where frequent price rises have already begun to take hold.  In such scenarios, national cash becomes worthless and precious metals and reserve currencies become stores of values. For some of the more prominent hyperinflationary events in recent times just look at the hyper inflationary experiences of Argentina, Zimbabwe and Venezuela. See “The Power of Gold in Times of Crisis” for details.

    For example, in 1989, prices in Argentina rose by an annualized 500 percent. In 2008, Zimbabwe’s annual inflation rate at one point reached 231 million percent. Annual inflation in Venezuela, which is still in the midst of hyperinflation, is currently over 2300%.

    But what if hyperinflation hits major economics such as the US and Europe and their  ‘strong’ fiat currencies in the form of the US dollar and Euro? In the current environment of full-scale quantitative easing and the emerging popularity of helicopter money, this is something which populations may soon be about to find out.

    Under this possible scenario, physical gold will become one of the few trusted assets to remain a secure store of value and wealth preservation when paper currencies crash and burn. Universally trusted as a safe harbor in times of crisis and emergency, physical gold is both the proven last man standing and the go to asset in a world at risk of hyperinflation.

    This article was originally published on the BullionStar.com website under the same title “QE Defender – Stop the QE Insanity | Helicopter Money and the Risk of Hyperinflation”


    Tyler Durden

    Sun, 05/03/2020 – 21:30

  • Watch: Video Of NYPD Officer Brutalizing Bystander During 'Social Distancing' Arrest Sparks Outrage
    Watch: Video Of NYPD Officer Brutalizing Bystander During ‘Social Distancing’ Arrest Sparks Outrage

    We’ve been covering the NYPD’s ‘War on Barbecuing’ since news first broke that the NYPD – presumably at the behest of Mayor de Blasio – was ordering 1,000 more cops to patrol the city’s parks and public space to crack down on any ‘social distancing’ violations with tickets, summonses and arrests.

    The same mayor who once dismissed the threat posed by the virus is flexing his muscles after the ultra-orthodox Jewish community in Williamsburg openly defied him last week by gathering for the funeral of a Rabbi, prompting Hizzoner to threaten a crackdown (eliciting an immediate backlash and accusations of anti-semitism).

    On Sunday, ABC 6 shared a video of a New York City cop arresting a man and violently taking him down over an alleged social distancing violation.

    The video, filmed by a bystander, showed the plainclothes officer, who was not wearing a protective face mask, slapping 33-year-old Donni Wright in the face, punching him in the shoulder and dragging him to a sidewalk after leveling him in a crosswalk in Manhattan’s East Village.

    Wright was allegedly filming the officer making an arrest for a social-distancing violation before he turned on the bystander instead and threatened to taze him then attacked him, while another bystander filmed the incident.

    De Blasio called the video “unacceptable” and said the officer involved has been placed on “modified duty” while internal affairs investigates

    NYC is of course the hardest hit area in the entire US, with as many as 20% of the city’s population suspected of having been infected with the virus. We suspect the mayor will announce tomorrow that he plans to “ease up” on ticketing and arrests for these types of violations.


    Tyler Durden

    Sun, 05/03/2020 – 21:05

  • Epstein Had Extensive Ties With Harvard University
    Epstein Had Extensive Ties With Harvard University

    Authored by Zachary Stieber via The Epoch Times,

    Sex offender Jeffrey Epstein had extensive ties with Harvard University, which admitted him as a Visiting Fellow and later gave him his own office, according to a review conducted by Harvard attorneys and an outside law firm.

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    Epstein was awarded the title of Visiting Fellow, which goes to independent researchers, in 2005 despite the fact he “lacked the academic qualifications Visiting Fellows typically possess and his application proposed a course of study Epstein was unqualified to pursue,” according to the review (pdf).

    Dr. Stephen Kosslyn, the chair of the Psychology Department at the time, recommended Epstein’s admission. Epstein donated $200,000 to support Kosslyn’s work between 1998 and 2002.

    Epstein told the university in his application that he wanted to “study the reasons behind group behavior, such as ‘social prosthetic systems,’ and their relationship to a changing environment,” using a term invented by Kosslyn.

    “That is, other people can act as ‘prosthetics’ insofar as they augment our cognitive abilities and help us to regulate our emotions—and thereby essentially serve as extensions of ourselves. I wish to understand how the brain both allows such relationships to develop and how those relationships in turn take advantage of key properties of the brain,” Epstein wrote.

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    Jeffrey Epstein appears in court in West Palm Beach, Fla., on July 30, 2008. (Uma Sanghvi/Palm Beach Post via AP)

    Epstein paid tuition and fees to become a Visiting Fellow but “did very little to pursue his course of study,” according to the review. He was readmitted for a second year after saying in an application he wished to “find a derivation of ‘power’ (Why does everybody want it?) in an ecological social system” but withdrew following his arrest in 2006.

    Epstein was accused of molesting dozens of underage girls that year. He ended up pleading guilty to one count of soliciting minors for prostitution in 2008.

    Kosslyn admitted to the attorneys conducting the review that Epstein wasn’t qualified to conduct the research outlined in the application. Epstein’s educational background, lacking a college degree, was highly unusual for a Visiting Fellow.

    Kosslyn in his recommendation for Epstein called the financier “extraordinarily intelligent, broadly read, and very curious.”

    “Jeffrey has been a spectacular success in business, and it is clear why: He’s not just intelligent and well-informed, he’s creative, deep, extraordinarily analytic, and capable of working extremely hard,” he added.

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    Harvard University in Cambridge, Massachusetts, on April 22, 2020. (Maddie Meyer/Getty Images)

    Had His Own Office

    Epstein’s involvement with Harvard didn’t stop with his criminal conviction.

    The sex offender was given an office with his own telephone line in Harvard’s Program for Evolutionary Dynamics (PED), which he helped establish in 2003 with a $6.5 million donation. He also received a keycard and passcode access to the program’s offices.

    Epstein is believed to have visited Harvard offices dozens of times between 2010 and 2018 after being released from jail.

    “Epstein was routinely accompanied on these visits by young women, described as being in their 20s, who acted as his assistants,” the review states. According to prosecutors, many women who spent time with Epstein were underage.

    Epstein would give Martin Andreas Nowak, a professor of biology and mathematics, the name of professors he wanted to meet with. Either Epstein or Nowak would invite the academics to meet with Epstein at the PED offices.

    The meetings usually took place on weekends.

    “Taken as a whole, the documents suggest that Epstein viewed the PED offices as available for his use whenever he wished to gather academics together to hear scholars talk about subjects Epstein found interesting,” lawyers wrote in the review.

    Nowak, who lawyers said took no steps to conceal Epstein’s activities, was placed on paid administrative leave on May 1 after the review was published. Officials are probing whether Nowak violated university rules.

    The visits came to an end only after a number of PED researchers objected to the situation.

    Not only Epstein, but his “assistants” received cards and keypad codes that let them access PED buildings whenever they wanted. When Harvard tightened security in 2017 by installing a different card reader system, several cards designated for temporary visitors were mailed to an assistant of Epstein.

    Nowak’s chief administrative officer (CAO) informed the professor of the arrangement, calling it “easier” because Epstein “would have go go get photo [sic] taken” if he instead was given different, more specific type of card.

    “Epstein’s permanent possession of a visitor keycard; his knowledge of the passcode to the PED offices; and his possession of a key to an individual Harvard office all gave him unlimited access to PED. It appears that this circumvented rules designed to limit access to Harvard space to individuals with legitimate reasons to be there,” the review stated.

    “In effect, Professor Nowak and his CAO permitted Epstein to use PED’s offices as his own whenever he came to campus. Moreover, they did so without due regard for Harvard’s security rules.”

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    A protest group called “Hot Mess” hold up signs of Jeffrey Epstein in front of the federal courthouse in New York City on July 8, 2019. (Stephanie Keith/Getty Images)

    Gifts, Links

    Harvard accepted four gifts after Epstein’s arrest but no further donations were accepted after his conviction, under a decision by President Drew Faust. Several faculty members, including Nowak, tried to convince Faust to revise the order.

    Epstein bypassed the order by getting others to donate to the university. Those donations included $7.5 million to support the work of Nowak. Leon Black, who donated millions with his wife or through their foundation, told lawyers he was introduced to the professor through Epstein.

    Nowak also allowed links to the websites of Epstein’s foundations on PED’s website at the request of Epstein’s publicist. A full page featuring Epstein was also published on PED’s website. It was removed in 2014 after complaints from a sexual assault survivor’s group.

    Epstein also regularly received communications from Harvard’s development offices, including an invitation to attend the start of the university’s Capital Campaign in 2013.

    The review of Epstein’s ties with Harvard was conducted by Diane Lopez, the university’s general counsel, Ara Gershengorn, a Harvard attorney, and Martin Murphy of Foley Hoag LLP.

    They recommended to Harvard President Lawrence Bacow that Harvard develop clearer procedures for reviewing potentially controversial donations, revise its procedures for appointing Visiting Fellows, and consider whether any further actions should be taken based on Epstein’s unfettered access to PED.

    Bacow said in a letter to the Harvard community that he’s instructed members of his team to begin implementing the recommendations “as soon as possible.”

    “The report issued today describes principled decision-making but also reveals institutional and individual shortcomings that must be addressed—not only for the sake of the University but also in recognition of the courageous individuals who sought to bring Epstein to justice,” he concluded.


    Tyler Durden

    Sun, 05/03/2020 – 20:40

  • China Hid Severity Of Coronavirus To Hoard Supplies, New Intelligence Shows: Live Updates
    China Hid Severity Of Coronavirus To Hoard Supplies, New Intelligence Shows: Live Updates

    Summary:

    • Russia reports 4th straight record new cases
    • Spain sees lowest deaths since March 18
    • Zimbabwe asks IMF for $2 billion rescue loan
    • Moscow Mayor warns 2% of city likely already infected
    • NYPD issue ‘dozens’ of summonses, make several arrests for ‘social distancing’ violations
    • New York case total: 316,415
    • Roche receives emergency auth from FDA for COVID-19 tests
    • MIT study says only 1/3 Chinese KN95 masks work as well as US N95s
    • New Intel leak says US believes China lied about the virus to buy time to grab up PPE
    • New Jersey reports another~200 deaths
    • Northeastern states join together to buy PPE
    • LA County coronavirus cases pass 25k
    • Pompeo doubles-down in a tweet
    • Niger reports polio outbreak as vaccinations halted
    • UK, NY see lowest deaths in weeks
    • France’s controversial ‘StopCovid’ app nearly ready
    • Boris Johnson names son after doctors who saved his life
    • Global COVID-19 confirmed cases passes 3.5 million

    *        *        *

    Update (2000ET): Though the number has no actual bearing on reality, President Trump said Sunday evening that he expects between 75,000 and 100k deaths from COVID-19 in the US, goal posts that have been steadily moved higher, eliciting howls of anger from liberals, even as the rate of doubling slows and states begin reopening.

    *        *        *

    Update (1750ET): Across the five boroughs, police are busy writing tickets, issuing summonses and – in at least a few cases, we’re told – making arrests.

    While the Americans who are able enjoy a beautiful Sunday in the sun, here are a handful of the most important coronavirus-related headlines from the last few hours;

    The number of coronavirus cases in LA County surged past 25,000 Sunday as public health officials confirmed another 791 cases, along with another 21 deaths, the Baldwin Park, CA Patch reports.

    There are now 25,662 cases of COVID-19 and 1,229 deaths related to the disease caused by the virus, according to the Los Angeles County Department of Public Health.

    “The people lost to COVID-19 are mourned by all of us in L.A. County, and to their loved ones, we wish you peace and healing,” Barbara Ferrer, the county’s public health director, said Sunday.

    As has been the case throughout the pandemic, 92% of the people who died from the virus had underlying health conditions, and the virus continued to have a slightly disproportionate impact on communities of color.

    For the 1,121 deaths for which data was available, 38% were Latinx, 29% white, 19% Asian, 13% black and 1% Native Hawaiian or Pacific Islander, according to the Los Angeles County Department of Public Health.

    The confirmed cases include 745 in Long Beach and 417 in Pasadena, which have their own health departments.

    Los Angeles County continues to represent about half of the cases and deaths across the state. Officials in Sacramento reported Saturday that the state had 53,616 cases and 2,215 deaths.

    New York on Sunday reported another 3,438 new cases of coronavirus, slightly higher than the recent average, as well as the 280 new deaths we mentioned earlier (the lowest single-day total in weeks). That brought New York’s total to 316,415 cases and 19,189 deaths.

    And as more states prepare to reopen during the coming week, Mississippi Gov. Tate Reeves on Sunday defended the steps his state has taken to reopen its economy despite not meeting the White House guidelines recommendation of 2 weeks of declining cases. Mississippi reported its largest single-day total of new cases on Friday, with 397. Gov Tate argued this was an “anomaly” and that his state simply hasn’t seen enough cases to warrant continuing with the lockdown.

    “You have to understand that Mississippi is different than New York and New Jersey,” Reeves said on “Fox News Sunday.” “What we have seen is for the last 35-40 days, we’ve been between 200 and 300 cases without a spike. Our hospital system is not stressed, we have less than 100 people in our state on ventilators.”

    Watch a clip from the show below:

    The governors of NJ, Conn., NY and several other northeastern states (remember that whole alliance thing?) announced on Sunday that they were forming a consortium to buy PPE together.

    New Jersey Gov Phil Murphy congratulated New Jerseyans for “behaving” this weekend after he opened the parks for what was expected to be a beautiful day. However, Murphy said if he gets reports of “bad behavior” or if cases spike over the next 2 weeks, he “won’t hesitate” to close the parks again.

    Across the state, hospitalizations continued to decrease while the rate of doubling of new cases continued to slow.

    On Sunday, health officials in Beijing reported just 2 new cases for the entire country over the last 24 hours – one of which was imported. That was great news for China, but you know what wasn’t so great? The results of an MIT study, published Sunday, finding only one-third of Chinese KN95 masks work as effectively as N95 masks.

    All this comes following another US intel leak to the AP claiming something many already widely suspected: Chinese leaders lied about the outbreak during the early days to buy time to grab up all the PPE and other critical supplies to ensure the safety of the Chinese people, while leaving the rest of the world to fend for itself.

    This hoarding behavior was behind the global shortages of PPE that left hundreds of thousands of medical professionals working with garbage bags instead of gowns and ineffective clothe masks. Thousands contracted the virus and hundreds of health-care workers died unnecessarily all around the world because China chose to hoard supplies.

    Which also means Beijing could have said a lot more than they did about how widespread the virus might already be, which is why we’re only just now finding out that there was community spread in the US as early as January.

    China didn’t just stock up on PPE being produced in the country; officials ordered PPE being manufactured all across Asia and cleaned them out.

    U.S. officials believe China covered up the extent of the coronavirus outbreak — and how contagious the disease is — to stock up on medical supplies needed to respond to it, intelligence documents show.

    Chinese leaders “intentionally concealed the severity” of the pandemic from the world in early January, according to a four-page Department of Homeland Security intelligence report dated May 1 and obtained by The Associated Press. The revelation comes as the Trump administration has intensified its criticism of China, with Secretary of State Mike Pompeo saying Sunday that that country was responsible for the spread of disease and must be held accountable.

    The sharper rhetoric coincides with administration critics saying the government’s response to the virus was slow and inadequate. President Donald Trump’s political opponents have accused him of lashing out at China, a geopolitical foe but critical U.S. trade partner, in an attempt to deflect criticism at home.

    Not classified but marked “for official use only,” the DHS analysis states that, while downplaying the severity of the coronavirus, China increased imports and decreased exports of medical supplies. It attempted to cover up doing so by “denying there were export restrictions and obfuscating and delaying provision of its trade data,” the analysis states.

    The report also says China held off informing the World Health Organization that the coronavirus “was a contagion” for much of January so it could order medical supplies from abroad — and that its imports of face masks and surgical gowns and gloves increased sharply.

    All of this comes as Beijing once again trades rhetorical barbs with Secretary of State Pompeo, who told ABC on Sunday that US intel agencies have “enormous evidence” that SARS-CoV-2 likely leaked from a biolab in Wuhan.

    The secretary doubled down in a tweet sent 3 hours ago from his official account.

    Watch the latest video at foxnews.com

    More Republicans have embraced the “China hawk” position since the advent of the outbreak…for obvious reasons. Speaking Sunday on Fox News Channel’s “Sunday Morning Futures” with Maria Bartiromo Ted Cruz said he believes China “is the most significant geopolitical threat to the United States for the next century.”

    Watch the latest video at foxnews.com

    China’s efforts to fabricate its economic resurgence narrative has come under a lot of pressure this weekend. In Italy, the Italian press has been pushing back against reports in Chinese press claiming Italians have been chanting “Grazie Cina” over Beijing’s “donations” of PPE and other assistance in fighting the virus.

    Finally, Bloomberg reports that the EU Commission will not unveil its proposal for a recovery fund this week as expected…extending the interminable delay for a recovery package that Christine Lagarde warns was needed yesterday.

    Just imagine what will happen to the euro area when there are no tourists across the periphery nations this summer and fall?

    *        *        *

    Update (1345ET): The UK Department of Health and Social Care just confirmed the death-toll figures we reported earlier, as well as the latest batch of new cases.

    Update (1312ET): As we reported yesterday, the NYPD dispatched some 1,000 additional officers to patrol city parks on Saturday and issue tickets to anyone found barbecuing, drinking and violating social distancing rules prohibiting “crowds”.

    And while the chief of police said he hoped no summonses would be issued, given the vast drop in city coffers, it appears the cops went on a ticketing frenzy, issuing dozens of summonses for lax social-distancing in city parks on Saturday, the nicest day of the year so far, as shell-shocked New Yorkers emerged from their shells.

    “In parks specifically yesterday, we issued 43 summonses,” Shea said Sunday in a joint press briefing with Mayor Bill de Blasio.

    An additional eight summonses were issued outside of parks for a total of 51, said Shea, who noted that while “not every single one” of the write-ups was for failing to maintain a social distance “the majority were.”

    In addition to the summonses, the NY Post reported that three arrests were made citywide.

    Meanwhile, although JHU hasn’t gotten there yet, at least one tally of international confirmed cases is saying we’ve passed the 3.5 million mark.

    *        *        *

    Update (1200ET): The UK reported 315 new coronavirus deaths on Sunday, its smallest daily increase in more than a month, bringing its countrywide total to 28,446.

    In NYC, Mayor de Blasio said during his Sunday briefing that the “vast majority” of New Yorkers are complying with social distancing rules (obeying social-distancing rules, despite flocks of people who went outside this weekend to enjoy the early spring weather. The city issued a total of 43 summonses in parks and eight outside.

    The city is a step closer to performing its own coronavirus tests, the mayor said. He said that by Friday 30,000 swabs for testing would be ready, ramping up to 50,000 full tests later this month.

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    In Albany, Gov Cuomo is starting his Sunday press briefing by reporting 280 new deaths over the last 24 hours, the lowest number since March 30. The hospitalization rate has also fallen again.

    The governor announced plans to sign a law requiring all hospitals in the state to have 90 days worth of PPE on hand at all times.

    Italy also saw some good numbers today, reporting its lowest number of deaths since early March.

    Continuing the trend of both deaths and new cases declining, along with net hospitalizations and…

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    …yet another day where the number of recovered patients outnumbered the newly diagnosed.

    Singapore reported a good number.

    And Portugal also reported its best numbers in 6 weeks as it prepares to reopen on Monday.

    As more doctors around the world warn about the dangers of halting vaccination campaigns – particularly in impoverished parts of the developing world – to focus on the coronavirus, Niger has reported its first outbreak of polio this year as vaccinations were rolled back.

    Letting its vaccination programs lapse is just the latest blow to the WHO’s credibility.

    Before we go: According to JHU, we;re only about 50k confirmed cases away from the 3.5 million mark. The latest number was 3,452,285.

    *        *        *

    Every day, it seems, Russia sets a new record for the largest number of new COVID-19 cases confirmed in a day. As we reported yesterday, Health officials in Moscow announced more than 9k new cases. On Sunday, they announced more than 10k new cases, another record sum. In the span of just two weeks, Russia has gone from having a relatively inconsequential number of positive cases to housing one of the largest outbreaks in the world. Of course, the infections didn’t just happen overnight. It’s merely the latest evidence that by the time Russia closed its Far Eastern border back in January the seeds of domestic transmission may have already been planted.

    That would jive with evidence that the first COVID-19 death in the US might have occurred as early as Feb. 6, meaning parts of New York, California and Washington were probably already suffering from local human-to-human transmission.

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    Russia added 10,633 cases of Covid-19, the highest daily number for the nation so far, increasing for a fifth day in a row. The total number of cases has risen to 134,687, according to the government’s virus response center. Around a half of the new cases are asymptomatic and Moscow accounts for nearly 56% of new infections. Russia’s total Covid-19 fatalities rose to 1,280.

    As the Guardian reported, Moscow’s mayor warned on Saturday that up to 2% of Moscow’s population may be infected, as hospitals in the Russian capital were overwhelmed and another top government tested positive. If Mayor Sergei Sobyanin’s projection is correct, that would mean more than 240,000 Muscovites have already been infected, 4x the official number.

     

    Russia confirmed 10,633 new coronavirus infections Sunday, bringing its countrywide total to 134,687and marking a new one-day record increase. Russia is now the seventh most-affected country in terms of infections, having surpassed China, Turkey and Iran last week. Roughly 1,280 deaths have been confirmed countrywide. More than half of the confirmed cases are in Moscow or the surrounding area. Sunday’s increase was Russia’s fourth record-day jump in a row.

    After announcing that Russian PM Mikhail Mishustin, on Friday authorities announced the housing minister was the latest top official to test positive. Vladimir Putin has not been pictured in public for nearly a month and is working from his residence outside Moscow.

    Hospitals in the capital are already at capacity, with television footage showing ambulances forced to wait for hours to deliver the infected.

    As Moscow’s hospital system groans, anger is rising across Russia. Recently, the government shuttered two dozen hospitals for quarantines, with many doctors falling sick. Russian independent media and non-governmental organizations have reported anonymous pleas from outraged medical workers who said they had been ordered to the frontlines without adequate protection.

    Across the world, the number of ‘confirmed’ coronavirus cases has climbed to 3.5 million, with hundreds of thousands – potentially even millions – of cases likely uncounted. The number of deaths, meanwhile, is slowly approaching 250,000 (it stood at 244,239 as of Sunday morning). During it annual meeting, the IMF said it had set aside $1 trillion of lending capacity to help emerging-market member states particularly hard hit by the pandemic and some of the ramifications for global financial conditions (negative prices on oil futures, the rapidly strengthening greenback, etc.). 189 countries are members of the IMF, and so far, mostly South American states like Ecuador have asked for large bailouts.

    But on Sunday, the FT reported that Zimbabwe had asked for a loan to help clear billions of dollars in debt and avoid an economic collapse. The FT cited a letter from Finance Minister Mthuli Ncube to the IMF.

    Zimbabwe is about $2 billion behind on payments to lenders, including the World Bank and African Development Bank, and has been excluded from emergency loans from international institutions, the newspaper said.

    Following reports that it planned to roll back some lockdown measures, Singapore said Sunday that companies with employees who can work from home will probably be asked to continue doing so even after the country’s partial lockdown ends on June 1, while sectors like manufacturing should prepare for a gradual reopening in the coming weeks, Singapore’s Trade and Industry Minister said.

    After successfully blocking the president’s businesses from receiving any government assistance, political opponents of President Trump have now succeeded in preventing Trump’s friends and associates – no matter how tenuous the connection – from benefiting from the program. For example, Texas hotelier Monty Bennett, whose companies are among the biggest known recipients of rescue loans for small businesses hurt by the pandemic, said he will return the money. Bennett is a major Trump donor.

    On the pharmaceutical front, as the debate over remdesivir’s effectiveness rages, Roche said it received authorization from the FDA for its Elecsys coronavirus antibody test. The test, designed to determine if a patient has developed antibodies against the virus, has a specificity greater than 99.8%.

    There were 164 new fatalities, bringing total deaths to 25,264, according to Health Ministry data. That compared with 276 daily fatalities reported Saturday. Total infections rose by 838 to 217,466, down from the previous increase of 1,147. The figures include adjustment on how previous new cases were counted in certain regions, the ministry said.

    During a Sunday morning interview with CNN’s Jake Tapper – building on Fed Chairman Jay Powell’s exhortation for the federal government to push through more stimulus – on its “State of the Union” program, Larry Kudlow was pressed to explain why Congress doesn’t just plow ahead with more stimulus.

    “Waiting any further – does it make any sense?…There’s a real need, we need more money in that program,” Tapper said. The confrontational interview followed a CNN report claiming the second round of the ‘PPP’ had delivered 2.2 million small business loans worth an aggregate $175 billion.

    Circling back to Europe, the controversial app – known as StopCovid – that France is developing to trace those who could be infected, known as StopCovid, could be ready by the end of May, the government spokeswoman Sibeth Ndiaye told France Inter Sunday. That would be after France starts lifting its lockdown, from May 11, though the government also announced plans to try and extend its ‘state of emergency’ order until July.

    Aside from a few one-off spikes, France has seen deaths and new cases mostly flatten in recent weeks. The country’s total case number stands at 130,979 while its death toll is less than 2k at 1,953.

    Having returned to work after his struggle with the virus, UK PM Boris Johnson sent a message of encouragement to his supporters… ‘We will beat this together’.

    He also announced that he would be naming his newborn son after the two doctors who saved his life during his struggle with the coronavirus.

    Johnson’s fiancee Carrie Symonds announced their child’s name, Wilfred Lawrie Nicholas Johnson, in an Instagram post on Saturday. The baby was born last Wednesday.

    Finally, Spain reported 164 new fatalities over the last 24 hours, compared with 276 for the prior day, bringing the country’s death toll to 25,264, according to Health Ministry data. That marked the country’s lowest single-day death toll since March 18. Spain counted 838 new cases, bringing its total to 217,466. According to Bloomberg, the figures reflect adjustments made to older cases.


    Tyler Durden

    Sun, 05/03/2020 – 20:22

  • Data Shows World Rejecting Governments' Shelter-In-Place Tyranny
    Data Shows World Rejecting Governments’ Shelter-In-Place Tyranny

    People across the Western world have already started to revolt against government-enforced lockdowns that have now continued for at least the seventh week in some places. Apple’s Mobility Trends and Foursquare payments data illustrates how shelter-in-place is becoming a distant memory for some as they try to restore their lives to what it was in pre-corona times. 

    The latest data from Apple’s Mobility Trends shows iPhone users in the US, Germany, UK, and Italy began to ignore stay-at-home orders around mid-April. While activity is still well below average trends from January 13, the recent rebound suggests more people are violating the orders 

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    Apple’s Mobility data shows driving and walking in the US has surged since mid-April but still below average. Public transportation use remains troughed and has yet to rebound. 

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    While mobility tracking data shows an uptick, payments company Foursquare is also showing increased visitations at stores. 

    “People are feeling the itch to get back to the real world. As officials begin the process of relaxing some business restrictions, we’re starting to see upticks in foot traffic to various places. This is true across regions, regardless of state-specific policies,” Foursquare said in a blog post. 

    In the second half of April, Foursquare notes that foot traffic at various types of stores started to move higher. Here’s what they found: 

    • Fast food and gas station visits have returned to pre-COVID-19 levels in the Midwest, and in rural areas across the nation. Though still below ‘normal’, visits in suburban and urban areas have shown substantial growth (>15%) since their end of March lows. Even casual dining restaurants are starting to show recent upticks, likely driven by new delivery and curbside options.

    • Men — and generally people between the ages of 35-64 — have shown more moderate declines across different types of places, and are also showing greater propensity to return

    • Visits to trails and home improvement stores — both allowable destinations in most states — are up substantially versus our February benchmark (31% and 56% respectively). While some portion of this is certainly seasonality, the growth in the last two weeks has been particularly notable; home improvement store visits, for instance, are up nearly ~20% in the last two weeks versus just ~6% in the period prior.

    • The midwest and rural areas across the country have shown more moderate declines across different types of places, and are also showing a stronger inclination to get back to normal.

    Foursquare shows foot traffic at fast-food chains across all major US regions have bounced back to around baseline. 

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    Gas station visits have also reverted in all regions to near baseline, slightly higher in the Midwest. 

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    Note the mid-March surge in traffic at grocery stores was the panic hoarding period. 

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    People in all regions are returning to big box stores, but as we all know, they’re wearing masks and gloves. 

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    Slow return to convenience stores in all regions. 

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    A surge in traffic to warehouse stores has been seen in the second half of April.

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    And while in lockdown, Americans in all regions rushed to hardware stores in late April to buy things for their homes – may be spring remodeling? 

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    Liquor stores in all areas remained somewhat above trend during the lockdowns. 

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    One place people aren’t going to is restaurants. 

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    Dozens of states are attempting to reopen. Americans are panic searching “when can I leave my house.” 

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    Apple and Foursquare data suggests many Americans are fed up with stay-at-home orders as they now venture out into a post-corona world. Such activity could be enough to spark a second coronavirus wave, and with a record amount of deaths seen on Friday, the virus crisis could be worsening.


    Tyler Durden

    Sun, 05/03/2020 – 20:15

  • The Fed's Balance Sheet Will Expand By 38% Of GDP, More Than Double QE1, 2 And 3 Combined
    The Fed’s Balance Sheet Will Expand By 38% Of GDP, More Than Double QE1, 2 And 3 Combined

    Authored by Chetan Ahya, chief Morgan Stanley economist and global head of economics

    The 1Q GDP data releases for the US and euro area this week provide official confirmation of what we have known for some time – the recession has started. However, we remain of the view that this downturn will be sharper but shorter than the GFC.

    To begin with, the trigger for this recession is an exogenous shock in the form of a public health crisis, rather than the classic, endogenous adjustment triggered by rising imbalances. This also did not start out as a financial crisis, and the banking system is in better shape today than prior to the GFC. Moreover, this recession has prompted the most coordinated and aggressive monetary and fiscal easing that we have witnessed in modern times. For the G4 and China combined, fiscal deficits as a percentage of GDP will be 1.5 times GFC levels. Similarly, G4 central banks are aggressively expanding their balance sheets. The Fed’s balance sheet will expand by 38 percentage points of GDP, more than the 20 percentage points during QE1, 2 and 3 combined.

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    Hence, while global growth will trough at -7.5%Y in 2Q20 on our estimates (far below the -2.4%Y in 1Q09), global and DM output will reach pre-recession levels in four and eight quarters, respectively, as compared with six and fourteen quarters during the GFC.

    A number of the high-frequency indicators we track suggest that the global economy is in the process of bottoming out. Consumers’ future expectations have improved, mobility trends have moved up from their troughs and consumer spending is contracting more slowly than in the early weeks of the outbreak. In the US, our IT services & payments analyst James Faucette highlights that credit card transactions data indicate that both transactions and sales have picked up in the past two weeks. Our read is that China’s economy bottomed in February, and we think the euro area has likely troughed in April with the US following suit from late April. Other regions such as CEEMEA and LatAm will bottom out later.

    As economies reopen, allowing more workers to return to work, mobility trends and production levels will likely improve further, as should end demand with a lag. A phased reopening in the US and Europe is in the works for the coming weeks. In the US, some states have begun to reopen, and our US economics and biotechnology teams estimate that, by mid-May, 54% of the economy will be in a meaningful reopening phase. This estimate assumes that states will be able to reopen 28 days (Phase 2) after the peak in new confirmed coronavirus cases. European economies will also progressively reopen from early May onwards.

    As we move towards this gradual reopening in parts of the world outside China, we have been closely observing developments in China to see how various sectors of the economy are normalising and how this experience may inform our outlook for the rest of the world. To be sure, our views are shaped by the path but not the duration and magnitude of recovery, considering the differences in the severity of the outbreak as well as the underlying composition of economic activity between the US, Europe and China.

    In China, the manufacturing, infrastructure and construction sectors recovered relatively quickly. The manufacturing PMI is back in expansionary territory, while steel and cement demand and property sales are growing again in year-over-year terms, just ten weeks after the peak in new cases. Supply-side disruptions have eased quickly, and production levels have experienced a V-shaped recovery, which suggests that the manufacturing sectors in the US and Europe should be on a similar path post-reopening.

    However, as the US and Europe are more consumption-based economies, it is the experience of the Chinese consumer that is drawing the most investor attention. Consumption in China is also showing signs of progress, but the pace of recovery has varied across different segments, and the phased relaxation of social distancing measures has dampened the overall pace to some extent.

    As you might expect, sales in China’s online retail channels (which account for 30% of total sales) are back in positive territory YoY, while traffic to shopping malls sits at 70% of normal levels (even though malls are now fully open). Smartphone sales have seen a V-shaped recovery and demand for tech products has improved on a broad front according to our Asia technology analyst Shawn Kim, but spending on other consumer discretionary products is still lagging somewhat. Consumer goods (staples, home appliances and apparel) companies expect normalisation by the end of June (i.e., moving back towards normal levels of YoY growth in 2H20). Restaurants have 50-80% of their customer base back, but night life venues are still closed in Tier 1 cities and cinemas remain dark until early June. Our China consumer analyst Lillian Lou expects these channels to fully reopen by the end of June/beginning of July, and traffic to normalise in 3Q20. For the US, our branded apparel & retail analyst Kimberly Greenberger expects that some US retail discretionary spending stores will open in May but a full reopening is likely only in June. She expects a 78-85% decline for the discretionary retail segment in April, but this will materially improve to a 30-45%Y decline for the May-July period and further to a 10-15%Y decline in August-October.

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    The reopening of economies has prompted concerns about a second wave of infections and potential double dip in the economy. We readily admit that many unknowns concerning the virus remain, but we do expect additional waves of infections to occur. However, we take comfort that the phased reopening, the scaling up of public health authorities’ ability to test and trace on a meaningful level, the development of medical solutions to treat and prevent the disease and the awareness of the population at large mean we have a much better chance to reduce the size and scope of future outbreaks.


    Tyler Durden

    Sun, 05/03/2020 – 19:50

  • There Is Now A Record 375 Million Barrels Of Oil Stored On Tankers
    There Is Now A Record 375 Million Barrels Of Oil Stored On Tankers

    Last weekend we showed that as oil storage on land was rapidly filling up, a familiar sight was seen off the coast of Asia’s oil hub in Singapore: a record surge in tankers on anchor used as seaborne storage, and taking advantage of the supercontango just waiting for oil prices to rebound so they can deliver their (formerly) precious cargo.

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    So as more and more storage moves offshore, here is an update from Bank of America on the current status of the oil market as the “oil glut moves from tanks to tankers.”

    In the last five weeks, onshore inventories held in floating top tanks climbed 180mn bbl, suggesting that builds have averaged roughly 4.3mn b/d since mid-March. These inventory increases reduce BofA’s estimates for available onshore crude storage capacity from roughly 910mn bbl to 730 mn bbl (Chart 2), although the bank still believes that this capacity is unlikely to be fully utilized due to logistical constraints and other issues.

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    How did we get here? As has been extensively reported here and elsewhere, WTI timespreads signalled a massive build in Cushing inventories and stocks would likely reach their operational limits within a few weeks (Chart 3). More recently, the expiration of the May WTI contract demonstrated the lack of available capacity at the hub. Cushing inventory builds are set to slow dramatically as much of the remaining capacity may be needed as an operational backstop for pipeline issues and blending needs (Chart 4). Over the coming weeks and months, US inventory trends could even reverse as producers in Canada and the Bakken shut-in output and refiners increase runs on the back of the re-opening of the economy.

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    As Bank of America adds, land based crude oil inventories first surged in China, where the coronavirus outbreak originated (Chart 5). Since then, China’s inventories have stagnated while stocks in the US and elsewhere ticked higher. There is room for incremental builds in China going forward, especially if the government uses more commercial tank space for strategic petroleum reserves (Chart 6). Elsewhere, inventories in Europe and the Middle East remain relatively lower. In Europe, this may be due to the mothballing of some tank storage at refiners and terminals. So, actual storage utilization rates may be higher than the data suggests. In the Middle East, inventories have climbed in GCC countries but may also remain lower on average as these countries prefer to sell oil as exports before storing domestically. In the US, producers have leased 23mn bbl of the roughly 70mn bbl of available SPR capacity and added 1.1mn bbl to SPR storage last week.

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    Of course, in addition to land based storage, the market also uses tankers for crude oil storage as a spillover outlet. Crude oil on the water has risen by roughly 150mn bbl since the start of the year, to more than 1.2bn bbl (Chart 7). This is due to a combination of higher crude in transit stemming from OPEC’s oil price war and from increases in crude oil floating storage. Since mid-March, crude oil floating storage has grown by an estimated 91mn bbl, or roughly 2.2mn b/d (Chart 8). Asia and Europe saw the largest increases in floating storage, climbing 36mn bbl and 20mn bbl respectively over the same period.

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    According to data from Clarksons, there are more than 350 vessels currently being used for floating oil (crude and product) storage globally (Chart 9). Of this total, roughly 100 are very large crude carriers (VLCC) and ultra-large crude carriers (ULCC). Total oil held in floating storage has risen to 375mn bbl, up 220mn bbl from mid-March and 230mn bbl from the start of the year (Chart 10). A majority of this storage has occurred on VLCCs and ULCCs, followed by Suezmax and Aframax vessels.

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    The first vessels booked for floating storage were primarily VLCCs and ULCCs, but demand for Suezmax and Aframax vessels has also increased dramatically since April (Chart 11). As traders utilize more of the smaller vessels, the average amount of floating storage per vessel has decreased, implying an increase in the average cost for floating storage. Since the beginning of the year, the average level of storage per vessel have collapsed from more than 1.5mn bbl to just 1mn bbl. (Chart 12). This rise in tanker rates for each ship type, combined with crude increasingly being stored on smaller vessels at the margin, is a double positive whammy on the marginal cost of crude storage and thus on the contango in the crude curves.

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    The abrupt demand contraction has forced crude oil forward curves into steep contango (Chart 13), with Brent 1-13 spreads widening to -$16/bbl at times to facilitate floating storage. As demand for freight picked up, dirty tanker rates spiked. The shape of the forward curve for the TD3 dirty tanker route (Middle East to Japan) was very flat just eight weeks ago (Chart 14), but the increase in demand from Saudi Arabia and from floating storage pushed front month rates up nearly 400%. More recently, rates have subsided somewhat but still remain exceptionally high compared to historical levels.

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    Freight rates have been exceptionally volatile, with VLCC 12 month time charters spiking to $80,000/day in early April and falling to around $65,000/day recently (Chart 15). The increase in smaller vessels has been less dramatic, with Suezmax and Aframax vessels peaking at $45,000/day and $34,000/day respectively. The very steep contango in the front of the Brent curve (e.g. 1-3m) has allowed for floating storage to be economical. Yet the 12 month contango in Brent was recently lower than the going rate for 12 month time charters for Suezmax and Aframax vessels. Additional pressure on Brent timespreads will be needed in order to encourage more floating storage using these types of vessels (Chart 16).

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    Refining margins have been exceptionally volatile since lockdowns began on a global scale (Chart 17). As refiners cut runs or shut down completely, margins experienced short term rebounds, but margins continue to trend towards zero on a spot basis as refined product inventories surge. In the US, product inventories have risen counter-seasonally and are now nearly 70mn bbl above year ago levels and 26mn bbl above previous five-year highs from 2016. It is no surprise that refined product markets have also developed their own supercontango (Chart 18), as prompt prices plummeted. Refiners have attempted to take advantage of the significant price improvement for forward product prices by storing products on land on and the water.

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    Estimates for floating storage vary depending on methodology. Some trackers classify floating storage as vessels that have remained idle for 10 days and others assume 14 days. The types of vessels tracked may also vary, leading to higher or lower floating storage levels. Nonetheless, all estimates point to rising volume on the water (Chart 19). Refined product floating storage is not well tracked, but Clarksons does track total tankers used for floating storage. Combining Clarksons data with other crude oil only floating storage data from Vortexa implies that refined product builds have been exceptional (Chart 20). Even if total levels of implied refined product floating storage are off, there is little doubt that product storage is on the rise.

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    The oil surplus was initially visible in dirty tanker freight rates, but clean tanker rates are now beginning to surge as refiners and traders seek to float unsold product volumes (Chart 21). With refined product prices like Singapore gasoline falling to $0.50/gal, shipping has become a disproportionately large component of the all-in cost of delivered fuel, making fuel movements exceptionally expensive. The economics for floating product storage varies dramatically depending on the contango of each product market and on the density of individual products. The recent surge in clean product tanker rates has challenged floating storage economics (Chart 22), but volatility in product forward curves should continue to offer opportunities for traders to float cargoes.

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    Another round of run cuts could bring renewed crude weakness. The global oil rout likely peaked in April as oil demand contracted by nearly 25mn b/d YoY. Now, countries are emerging from lockdown, boosting oil demand just when OPEC+ cuts are kicking in and producers elsewhere are cutting output. Even so, the market should remain in surplus for the remainder of 2Q20, resulting in continued, albeit slower crude oil and product builds. The oil market is forward looking and market balances look much better in 2H20 which should be supporting of prices. That said, with so much product moving into floating storage, we see risk of additional pressure on refining margins, even as global refinery outages hit record levels (Chart 23). Any further reduction in refinery demand for crude could ultimately result in renewed weakness for crude oil prices (Chart 24) and would likely warrant steeper contango.

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    Tyler Durden

    Sun, 05/03/2020 – 19:25

  • Stocks, Yuan, Oil Are All Tumbling As Asia Opens
    Stocks, Yuan, Oil Are All Tumbling As Asia Opens

    No Buffett buying spree, and no Federal bailout #4 (or is it 6?)… and the result – in admittedly thin liquidity – is US equity futures, crude oil futures, and offshore yuan are all dumping as Asian markets open…

    Dow futures are down over 350 points…

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    WTI Crude is down over 5%…

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    And offshore yuan is ugly…

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    Gold is also under pressure and the dollar rallies, with futures testing $1700…

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    But, Bonds are modestly bid (futures open, cash closed)…

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    Somebody wake up Kudlow… stat!


    Tyler Durden

    Sun, 05/03/2020 – 19:01

  • "Passive Aggressive Flows": The Oil Whale
    “Passive Aggressive Flows”: The Oil Whale

    Authored by Ryan Fitzmaurice of Rabobank

    Passive aggressive flows

    Summary

    • The recent and erratic moves in oil prices have highlighted the growing influence and significant impact passive funds can have on commodity and financial markets
    • The rise of commodity ETFs over the past decade has led to a surge in retail participation in what was once difficult to access commodity futures markets
    • The USO fund has attracted a great deal of regulatory scrutiny in the wake of the negative oil price settlement given its whale-like status in nearby Nymex WTI futures contracts
    • USO, the exchange traded fund was forced to restructure its holdings in an effort to reduce systemic risk to markets

    The rise of commodity ETFs

    This year is off to an unbelievable start on so many fronts and across all asset classes. While most of our time and effort is spent tracking and modelling the directionally dynamic money flows of CTA and managed futures strategies – the recent and erratic moves in oil prices – has shifted our attention back to the ever growing influence and significant impact passive funds are having on markets. This phenomenon has been long in the making and the last decade has witnessed the rise of more and more financial commodity products in the market place. In fact, the rise of commodity exchange traded funds (ETFs) and even exchange traded notes (ETNs) has led to a surge in retail participation in what was once difficult to access commodity futures markets. For clarity, these commodity products trade on various stock exchanges throughout the day and provide wide ranging access to underlying futures contracts but without the need for a futures trading account. Many of these passive funds simply go out and buy the equivalent notional amount of futures contracts per dollar that is invested and then roll those contracts on a predetermined schedule to avoid taking physical delivery. The futures contract roll is transacted in a very transparent manner but without any work on the investors’ part which is one of the huge benefits ETFs provide to institutional investors. On the flip side, this dynamic can also result in retail investors piling into a product they don’t fully understand the mechanics of. This issue is playing out in real time as a surge of investment dollars have poured into passive oil ETFs but without fully understanding key dynamics. This has led to significant losses and even unprecedented regulatory intervention in the wake of last month’s negative WTI oil settlement.

    USO: Fund Details

    The publicly traded USO fund has attracted a great deal of regulatory scrutiny in the wake of last month’s negative oil price settlement given its whale-like status in nearby Nymex WTI futures contracts. For readers unfamiliar with the fund, the USO oil ETF is traded on the New York Stock Exchange and available to pretty much anyone with a standard stock trading account. The exchange traded fund is a packaged up version of an underlying futures based index with key details listed here:

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    The oil whale

    The speculative retail interest in USO, the supposedly passive oil fund, has shot up dramatically in recent weeks and months as crude prices have cratered to all-time lows and even unheard of negative spot prices. In fact, the fund currently has net assets north of 3.5 billion USD after starting the year with 1.2 billion USD. The exchange traded fund caught the ire of US regulators last week though due to its out-sized share of open interest in the Jun-20 WTI contract which was fast approaching 30% of open positions. This raised a lot of eyebrows given that the May-20 WTI contract had just settled in negative territory. For clarity, USO was not in the May-20 Nymex WTI contract when it settled in negative territory last week as it has already rolled to the Jun-20 contract but nonetheless the risk of negative prices occurring again in the Jun-20 contract was and is very real and apparent. This scenario posed a real threat to the market as potential losses on the ETF holdings could dwarf the net assets of the fund if prices were to fall deeply into negative territory again while USO was invested. Who would be on the hook in this case? Well, the regulators and exchanges did not want to wait to find out the hard way and instead took decisive action to greatly reduce ETF and investor products holdings of nearby crude oil contracts.

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    Too big to fail

    While we all know there are plenty of fundamental drivers pressuring crude prices at the moment, it’s really been money flows that have been driving the price action in recent days. In fact, we learned that last Tuesday’s major collapse in the Jun-20 WTI contract was largely a result of the USO fund liquidating a large portion of its holdings in the Jun-20 contract and shifting further out the curve into the Jul-20 and Aug-20 contracts to avoid the risk of prices going negative again as expiration approaches. The publicly traded fund reported that is had sold roughly 90k contracts of Jun-20 Nymex WTI on Tuesday as a result of orders from the exchange and regulatory bodies to roll contracts away from spot. This forced liquidation had serious market implications and the overwhelming selling pressure was enough to send the Jun-20 WTI contract nearly $10/bbl lower, losing over half of its value in a single trading day. The move took the ETF share of open interest for the Jun-20 Nymex WTI from roughly 25% to just over 10%, a much more manageable level but the story doesn’t end there. The fund was forced to sell even more in subsequent days until its entire Jun-20 position was liquidated. The selling pressure clearly pushed the Jun-20 contract lower and we have even seen the Jun-20 rally in recent days as the forced liquidation ended. The same footprint can be seen when looking at the calendar spread price action. Ironically, the USO fund was only able to buy roughly half the equivalent exposure in Jul-20, Aug-20, and beyond given how steep the curve is at the moment and the fact that the fund invests on a dollar basis. While the situation is still fluid, the near-term risk to the system appears to have been sufficiently reduced as USO and others have taken action to reduce position sizes and stay out of nearby expiring futures contracts, at least for the foreseeable future. On top of that, USO can no longer issue new shares until otherwise notified which should prevent it from growing too big again.

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    Looking Forward

    The recent oil price dynamics have certainly challenged conventional wisdom leading into this year which assumed oil prices had a zero floor bound. The move into negative commodity prices has also highlighted the systemic risk that ETFs and passive funds can pose to overall markets during periods of market stress. In this case, the risk of a worst case scenario occurring has been greatly reduced but not totally eliminated. Furthermore, the disorderly May-20 pre-expiry liquidation resulted in massive retail losses which has shined a light on the dangers of financial engineering derivative products for retail clients. It has been reported that retail clients at a Chinese bank lost over 1 billion USD in a product linked to WTI crude oil. There are also reports of significant losses for retail clients of a well-known US trading platform. Perhaps more than anything though, this recent liquidation driven price action in oil markets has highlighted the importance of understanding money flows and in this case what was supposed to be “passive” flows turning into “active” flows, at least temporarily.


    Tyler Durden

    Sun, 05/03/2020 – 19:00

  • Watch: Park Ranger Thrown Into Lake In Texas Over 'Social Distancing' Enforcement
    Watch: Park Ranger Thrown Into Lake In Texas Over ‘Social Distancing’ Enforcement

    There’s been an increasing number of incidents between law enforcement and antsy Americans eager to get back outdoors after being sick of ‘stay at home’ and state-wide lockdown measures. But often individuals’ desire for a rapid return to normal is butting up against continuing social distance requirements still in place in most states, even those already opening up their economies. 

    A viral video showed one such recent tense encounter in Texas, when a park ranger attempted to break-up a large group of young partiers at a large city park and nature area. It happened at the Commons Ford Metropolitan Park in Austin, Texas. A group on Lake Austin was reportedly unlawfully drinking and smoking on the grounds when a ranger approached and ordered them to “disperse” also due to people apparently not standing six feet apart.

    That’s when things got physical, resulting in the officer being pushed or thrown into the water, according to widely circulating footage:

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    Though the laughing group of what appeared to be college students took it as a prank, police later apprehended and arrested a 25-year old man for assault on the ranger. The man initially tried to run away as the ranger struggled to get out of the water.

    It illustrates a rising trend of frustrated citizens coming up against local law enforcement eager to see safe distancing between patrons. 

    The Austin-American Statesman described the scene: 

    “Keep that 6 feet of distance with each other,” the ranger says.

    Some in the crowd are heard saying “will do” and “I got you, man” before the ranger is pushed into the water.

    Hicks could have “caused the ranger to strike his head on the dock as he was falling,” the affidavit says.

    Other onlookers came to the ranger’s aid and even apologized for the young man’s behavior.

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    The culprit was later charged with a felony for assault on a law enforcement officer.

    Likely there will be many more such encounters in various contexts across states in the coming days, as more and more Americans begin taking matters into their own hands and defying state and local distancing orders. 

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    Though we might also note that fiercely independent Texans typically lead the way when it comes to such drastic actions signaling anger and defiance. 

    Local reports said the park actually temporarily closed again after the incident, due to crowds failing to heed social distancing warnings in general.


    Tyler Durden

    Sun, 05/03/2020 – 18:35

  • David Stockman On The Three Nations Of COVID, & A Windbag Named Fauci
    David Stockman On The Three Nations Of COVID, & A Windbag Named Fauci

    Authored by David Stockman via Contra Corner blog,

    If you don’t think our so-called mainstream rulers has gone off the deep end, just consider New York Mayor Bill de Blasio’s recent menacing tweets to the orthodox Jewish community in Brooklyn, which has insisted on holding funerals, including one Monday for a revered 73-year old Rabbi attended by upwards of 2,000 mourners:

    “Something absolutely unacceptable happened in Williamsburg tonite: a large funeral gathering in the middle of this pandemic,” the mayor said in one post. “When I heard, I went there myself to ensure the crowd was dispersed. And what I saw WILL NOT be tolerated so long as we are fighting the Coronavirus.”

    My message to the Jewish community, and all communities, is this simple: the time for warnings has passed. I have instructed the NYPD to proceed immediately to summons or even arrest those who gather in large groups. This is about stopping this disease and saving lives. Period.

    Well, NYC is nearly a ghost town and now its idiotic ruling pols are suggesting that, apparently, only ghosts may attend funerals without governmental permission!

    But actually, this photo from the offending funeral is another picture worth a thousand words.

    That’s because by now, everyone, and we mean everyone, knows that the Covid-19 strikes the elderly, the frail and the already disease-afflicted; and that these vulnerable populations need to not only “social distance”, but actually stay home and keep out of harm’s way completely.

    That appears to be exactly what happened at Rabbi Mertz’ funeral. If you can spot an octogenarian in this crowd, or even a grandfather, your eyesight is better than Clark Kent’s.

    And besides being preponderantly way under 50-somethings, they congregated outdoors and virtually all were wearing masks. Yet claiming to speak for some latter day “Committee of Public Safety”, Mayor Robespierre actually threatened to bring in the gendarmes.

    Hundreds of people gathered in Williamsburg, Brooklyn, for a massive funeral Tuesday evening

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    As to whether the above pictured citizens should be jailed or fined, let’s start with a tale of two Lockdown Nations – New York City and the semi-socialist Republic of California.

    Both have imposed severe stay-at-home and business shutdown orders almost from the day the Donald issued his unfortunate March 16 guidelines. Yet here are the results 45 days later with respect to their mortality rates, which is ostensibly the reason officialdom issued these draconian “cease and desist” orders in the first place.

    To wit, the mortality rate as of April 28 was 143 per 100,000 in New York City and 4.6 per 100,000 in the state of California. Essentially the same public health policy lockdown, but night and day differences in the outcome.

    Yes, New York is more dense than California on average, but that doesn’t even remotely explain the difference. That’s because by now there is overwhelming evidence that the severity of the quarantine regime has essentially zero impact on the mortality metrics.

    And folks, even the Virus Patrol hardliners don’t claim their lockdown orders are designed to prevent 3-day hospital stays by people who get an unusually stubborn case of the winter flu. This is about death prevention and that’s why they run the Chyron of Death across the CNN screen day and night.

    But there is zero correlation:

    • California: Heavy lockdown, 4.6 deaths per 100,000;

    • Iowa: No lockdown, 4.3 deaths per 100,000;

    • Texas: Light lockdown, 2.4 deaths per 100,000;

    • Washington state: Heavy lockdown, 10.0 deaths per 100,000;

    • Colorado: Inconsistent lockdown, 12.2 deaths per 100,000;

    • Georgia: Late Lockdown now lifted, 10.0 deaths per 100,000;

    • Maine: Heavy Lockdown, 3.8 deaths per 100,000;

    • Massachusetts: Heavy Lockdown, 45.7 deaths per 100,000.

    We call attention to Washington state, Maine and Massachusetts especially because even though they all have severe statewide lockdown regimes and their overall mortality rates very widely, from 3.8 per 100,000 in Maine to 45.7 per 100,000 in Massachusetts, they do share one thing in common. To wit, 40-60% of their Covid-fatalities have been in nursing homes.

    In Maine, 53% of Covid deaths were in nursing homes, meaning that the actual Covid-mortality rate for the general population is just 1.8 per 100,000 and in Massachusetts 56% are nursing home fatalities, meaning the general rate is 21 per 100,000.

    Ironically, Sweden has one of the least restrictive lockdown regimes in the world – schools, businesses, restaurants and retail remain open–yet its mortality rate of 22 per 100,000 is virtually the same as the lockdown state of Massachusetts.

    Self-evidently, what matters is not how economically suicidal the lockdown regime is from one jurisdiction to the next, but the age, health status and general frailty/vulnerability of the populations at issue. In the case of Washington state where the first corona cases occurred, upwards of 40% of the 690 deaths to date have been in nursing homes, meaning that its general population mortality is just 6.0 per 100,000.

    As we amplify below, these single-digit rates are rounding errors on the scheme of things, even as all deaths are both regrettable and inevitable. But by what rational calculation does Governor Inslee insist on keeping the state in Lockdown and its economy heading into the the drink?

    Someone might dare inform him that the general mortality rate from all causes for his citizens is 900 per 100,000 annually, and that, therefore, he is imposing the economic mayhem evident in these charts below owing to a risk of Covid death for the general population of his state that so far has been 0.7% of the normal average.

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    Stated differently, had Patient Zero (aka the Donald) not been the victim of malpractice by his doctors led by Fauci and the Scarf Lady, he might have been advised to dial in on day #1 to the heart of the Covid-threat. Namely, the 15,600 nursing homes in America, which domicile some 1.5 million residents, of which one-quarter (425,00) are over the age of 80 years.

    In the case of Massachusetts, where the majority of deaths have occurred in nursing homes, the average age of Covid-deaths has been 82 years.

    Needless to say, you did not need to be entombed in the infectious disease tunnel at the NIH for 52 years like Dr. Fauci, a pretentious 79-year old windbag who should have himself been put in a retirement home years ago, to realize that nursing homes are dense-packed with the frail, disease-afflicted elderly.

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    So rather than wipe out $4 trillion of GDP via Lockdown Nation they might have started with say $25 billion of incremental money for Medicare/Medicaid and the state public health agencies to zero-in on protecting, isolating and treating the nursing home residents.

    After all, we find it easy to believe that spending $20,000 per nursing home resident might have saved or extended a lot more lives than the WHO/CDC/DR. Fauci blunderbuss assault on the entire US economy.

    Indeed, with each passing update, the CDC data itself becomes an ever more dispositive indictment of the madness the Donald’s doctors have imposed on the nation. It is now strikingly clear, in fact, that when it comes to Covid-19 there are three nations in America, and that the attempt to shoe-horn them into a one-size fits all regime of state control is tantamount to insane.

    There is first the Kids Nation of some 61 million persons under 15 years, where even by the CDCs elastic definitions there have been just 5 WITH Covid deaths thru April 28. You needn’t even bother with the zero-ridden fraction of 1 per 100,000 (its actually 0.008) to make the point.

    That is to say, last year there were about 44,000 deaths among the Kids Nation – so corona-virus accounts for just 0.011% of the total, and in no sane world would it be a reason for shutting down the schools.

    Of course, the Virus Patrol insists that the school closures are an unfortunate necessity because otherwise the Kids Nation would take the virus home to the Parents/Workers Nation. That is the 215 million citizens between 15 and 64, who account for the overwhelming share of commerce, jobholders and GDP.

    Yet according to the CDC, there have been just 8,267 deaths WITH Covid in this massive expanse of the population, which figure represents a mortality rate of, well, 3.6 per 100,000.

    But here’s the thing. The normal total mortality rate for the 15-64 years old population is 335 per 100,000. So we are talking about shutting down the entire economy owing to a death rate to date which amounts to 1.1% of normal mortality in the Parents/Workers nation.

    Finally, we have Grandparents/Great Grandparents Nation, comprised of 52 million citizens. But they account for 32,000 or nearly 80% of the WITH Covid deaths as of April 28 – with 15,000 of these being among those 85 years and older.

    By way of computation, that’s 61 deaths per 100,000 for the group as a whole and 230 per 100,000 for the 85 years and older.

    Stated differently, the risk of death posed by Covid-19 is 7,600X greater for Grandparents/Great Grandparents Nation overall than for Kids Nation, and 29,000 times greater for the several million Great-Grandparents afflicted with severe comorbidity and likely as not to be in the care of a nursing home.

    Needless to say, it did not take a catastrophic experiment with Lockdown Nation to figure this out. It was already known from China and the history of other coronaviruses.

    If there were any reason or justice left in America, Dr. Fauci and the Scarf Lady and the whole CDC/WHO lobby that brought about this disaster would actually be headed for their own quarantine – the kind that doesn’t happen at home and which can’t be lifted by the whims of the Cuomo brothers or Mayor Robespierre.


    Tyler Durden

    Sun, 05/03/2020 – 18:10

Digest powered by RSS Digest

May 03

Today’s News 3rd May 2020

  • China's Exploiting The COVID-19 Pandemic To Expand In Asia
    China’s Exploiting The COVID-19 Pandemic To Expand In Asia

    Authored by Con Coughlin via The Gatestone Institute,

    While the rest of the world is preoccupied with tackling the coronavirus pandemic, China is intensifying its efforts to extend its influence in the South China Sea by intimidating its Asian neighbours.

    The arrival of China’s Liaoning aircraft carrier, together with five accompanying warships, in the South China Sea earlier this month has resulted in a significant increase in tensions in the Asia-Pacific region as Beijing seeks to take advantage of the coronavirus pandemic to flex its muscles.

    So far in April, there were claims that a Chinese coast guard vessel deliberately rammed and sank a Vietnamese fishing boat operating close to the disputed Paracel Islands. All the fishermen survived and were transferred to two other Vietnamese fishing vessels operating nearby.

    The incident prompted a furious response from the Vietnamese government, which accused Beijing of violating its sovereignty and threatening the lives of its fishermen. The US State Department said it was “seriously concerned” about the incident and called on Beijing “to remain focused on supporting international efforts to combat the global pandemic, and to stop exploiting the distraction or vulnerability of other states to expand its unlawful claims in the South China Sea.”

    In other incidents, Chinese vessels have been accused of harassing Indonesian fishing boats, as well as tailing Malaysian oil-exploration boats.

    At the same time, China has provoked a diplomatic dispute with the Philippines following Beijing’s declaration that a region over which Manila claims sovereignty in the South China Sea is Chinese territory.

    The dispute concerns China’s recent announcement that it intends to administer two disputed groups of islands and reefs in the waterway. One district covers the Paracel Islands, and the other has jurisdiction over the Spratlys, where China has built a network of fortified man-made islands. The Philippines has a presence of its own on at least nine islands and islets in the area, and bitterly opposes Chinese attempts to extend its influence.

    Beijing has long claimed control over the South China Sea and the surrounding area because of its strategic significance as one of the world’s busiest waterways. Around one third of the world’s shipping passes through it and carries trade worth around $3 trillion. In addition, the waters contain lucrative fisheries, and huge oil and gas reserves are believed to lie beneath its seabed.

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    China’s gradual encroachment on the area has been resisted by other countries in the region such as Vietnam, the Philippines, Taiwan, Malaysia and Brunei, which all have competing claims of their own.

    As the region’s dominant power, China has shown little interest in seeking to resolve these conflicting claims peacefully. Instead, it has resorted to brute force, using its increasingly powerful navy to assert its dominance by harassing the shipping of rival states, even, at times, in their own territorial waters.

    China’s increasingly aggressive action, known in Beijing as “Wolf Warrior diplomacy”, has prompted US Secretary of State Mike Pompeo to warn that China is taking advantage of the world’s preoccupation with the coronavirus pandemic to push its territorial ambitions in the South China Sea. At a recent briefing to foreign ministers of the 10-member Association of Southeast Asian Nations (ASEAN), Mr Pompeo stated:

    “Beijing has moved to take advantage of the distraction [over Covid-19], from China’s new unilateral announcement of administrative districts over disputed islands and maritime areas in the South China Sea, its sinking of a Vietnamese fishing vessel earlier this month, and its ‘research stations’ on Fiery Cross Reef and Subi Reef.”

    Despite the Trump administration’s preoccupation with tackling the coronavirus pandemic, Washington is not prepared to tolerate China’s aggressive actions. Three ships from the US Seventh Fleet, together with an Australian frigate, have responded by sailing through the disputed waters in a show of force.

    China’s communist leadership may believe that they can take advantage of the coronavirus pandemic to bully their Asian neighbours. But this show of force by the US Navy should send a timely reminder to Beijing as to which country is the real military power in the region.


    Tyler Durden

    Sat, 05/02/2020 – 23:50

  • These Are The 10 Most Expensive (And Cheapest) Cities In The World
    These Are The 10 Most Expensive (And Cheapest) Cities In The World

    Where personal wealth is concerned, there are two sides to every story.

    The first of which is the amount of money a person earns, and the other is what they choose to spend their money on. As Visual Capitalist’s Katie Jones notes, the latter is influenced by the cost of living in the city where they reside – an ever-changing metric that is driven by a wide variety of factors, such as currency, population growth, or external market movements.

    Today’s graphic visualizes the findings from the 2020 Worldwide Cost of Living report and uses data from 133 cities to rank the most expensive cities in the world.

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    Note: Report research was conducted towards the end of 2019, before the COVID-19 outbreak.

    Asia Dominates the Ranking

    Globally, the cost of living has fallen by an average of 4% over the last year, with much of the movement up and down the ranking being driven by currency fluctuations.

    The locations with the highest cost of living are largely split between Europe and Asia. For the second time in the report’s 30-year history, three cities are tied as the top spot—Singapore, Hong Kong, and Osaka.

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    Source: EIU. New York City is index baseline (score = 100). Ties in index score values are denoted by (t).

    Osaka is a newcomer to the top spot, climbing four places over the last year to join cost of living heavyweight champions, Singapore and Hong Kong. As Japan’s third-largest city, Osaka is a major financial hub and a breeding ground for emerging startups, with relatively low real estate costs compared to Singapore and Hong Kong.

    Three European cities (Paris, Zurich, and Geneva) sit atop the most expensive city rankings, compared to seven cities only 10 years ago. Similarly, 31 of the 37 European cities have seen a decrease in cost of living overall—largely as a result of the Euro or local currencies losing value relative to the U.S. dollar.

    Finally, the top 10 is rounded out with two cities from the United States (New York, Los Angeles) and one from Israel (Tel Aviv).

    The Cheapest Cities

    While East Asia is home to many of the world’s most expensive cities, South Asia hosts the largest grouping of cities with the lowest cost of living.

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    Source: EIU. New York City is index baseline (score = 100). Ties in index score values are denoted by (t).

    Three Indian cities dominate the cheapest cities ranking due to a combination of low wages and high levels of income inequality, preventing any price increases.

    Meanwhile, political and economic turmoil is a common denominator among the cheapest cities outside of South Asia. For example, the Syrian Civil War resulted in an economic collapse, leading to high inflation and a downward spiral in value for the Syrian pound.

    A Spanner in the Works

    The COVID-19 pandemic is estimated to cost the global economy up to $2 trillion in 2020, so while governments attempt to boost the economy, many are concerned about higher inflation rates spreading across the world.

    With a recession becoming more likely, uncertainty around real estate prices will heighten for every city, regardless of their cost of living ranking.

    As we navigate chaotic and uncertain times, the next cost of living survey could look very different to today—the most important question will be how permanent the damaging effects of the pandemic will be.


    Tyler Durden

    Sat, 05/02/2020 – 23:25

  • Johnstone: Biden Is Everything The Democrats Are
    Johnstone: Biden Is Everything The Democrats Are

    Authored by Caitlin Johnstone via Medium.com,

    Joe Biden is not an “imperfect candidate” for the Democrats.

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    He is the perfect candidate, because he’s everything the party is: Demented. Decrepit. Bloodthirsty. Corrupt. Cronyistic. Authoritarian. Reactionary. Rapey.

    He is exactly what they deserve. He is exactly what they are.

    Joe Biden is the Democrat’s Democrat. He is the perfect representative of the party. They should even take it a step further and replace that donkey with Joe Biden.

    Biden is to the Democrats as Trump is to the Republicans. Everyone’s just wearing their true face now.

    ~

    If you’re willing to sacrifice all principles, all sanity and all morality to get rid of Trump, what exactly is the point of getting rid of Trump?

    ~

    We know Biden is a liar. He’s been pinged for lying his whole career. Everyone is trying to undermine the victim’s character in order to discredit her while ignoring Joe’s character. We know he lies. He also has a history of unwanted sexual advances. His story is not credible.

    ~

    Nobody actually believes that Biden didn’t sexually assault Tara Reade. Nobody’s actually confident that Creepy Uncle Hair Sniffer isn’t a rapist, they’re just pretending they are. I can understand saying “It’s possible but unproven”, but saying it’s false is so gross and dishonest.

    They’re accusing Reade of lying for partisan reasons, when in reality that’s exactly what they are doing: they’re pretending they believe Handsy Joe Biden is incapable of shoving his fingers into a woman without her consent, and they are lying. Out of pure partisan loyalty.

    ~

    It’s funny how refusing to support a literal dementia patient who has been credibly accused of rape for the world’s most powerful elected office is a very, very normal thing to do, yet people are acting like it’s bizarre and freakish.

    ~

    Which looks more likely to you? (A) That Reade seeded a bunch of vicious lies about Senator Joe Biden in the 1990s with the intention of someday sabotaging his presidential bid in the distant future for some reason, or (B) that a powerful man sexually assaulted a woman?

    ~

    It’s so weird how Joe Biden is a spent piece of leftover 1970s beltway flotsam made of plastic donor class dinner parties and AIPAC lobbying but everyone’s all pretending they like him as a person and stuff.

    ~

    There are no fact-based and intellectually robust arguments for working within the establishment to manifest revolutionary agendas, but there are a lot of highly effective intellectually dishonest arguments for why it’s okay for you to pretend otherwise and go back to sleep.

    ~

    “They destroyed the economy over a virus, but the narrative about the virus is completely fake!”

    Perhaps. But so is the narrative about “the economy”.

    ~

    Terence McKenna once said “We are led by the least among us. The least intelligent, the least noble, the least visionary.” Can’t think of a better illustration of this than having Donald Trump versus Joe Biden competing for the most powerful elected office on the planet.

    ~

    Hey remember when Trump provoked a missile retaliation that led to scores of injured US soldiers by assassinating Iran’s top military commander for no legitimate reason, lied about the whole thing, and then suffered no consequences or political repercussions of any kind? Good times.

    ~

    Democrats are so fucking stupid and ridiculous that the Krassenstein brothers are still a thing.

    ~

    All of humanity’s worst atrocities have been legal. Genocide. Slavery. Torture. The fact that you can squint at the imprisonment and extradition of a journalist for exposing US war crimes in such a way that makes it look “legal” does not mean it isn’t unforgivably evil.

    ~

    It’s always about power. Power comes before everything, including profit, which is why you see escalations against nations who’d be very profitable to continue trading with and why critics of US foreign policy are attacked far more aggressively than critics of its domestic policy.

    Manipulators understand that wealth control is a means to power and not an end in itself; that’s why you see things like Zuckerberg hurting his own profit margins by making changes to Facebook which make the platform less fun to use but shore up establishment narrative control.

    Power trumps profit every time. Manipulators are driven ultimately by the desire to control as many humans as possible to the greatest extent possible. Money is a useful tool for accomplishing that, but in a pinch they’ll swap it out for military/police force or censorship etc.

    Wealth is a narrative construct and can be gained or lost or made obsolete in a new narrative paradigm. Elite manipulators understand that it’s hard, nonconceptual control over hard, nonconceptual objects that gives them their actual alpha status over the rest of the humans.

    ~

    “A newly democratized media environment has made it difficult for people to distinguish fact from fiction.”

    ‘Oh no! What do we do?’

    “Censor everyone except authoritative news sources.”

    ‘Authoritative news sources? Like who?’

    “The ones who lied about Russiagate and all the wars.”

    ~

    As a general rule, indie media should not attack other indie media. If you’re not punching up, you’re punching down.

    ~

    People ask me “Well, what should we do? How do we fix this thing?” And of course my only possible answer is, “Do what I’m doing! Or your version of it.” Of course I’m doing the thing I think we should do to solve the problems of our species. Why would I be doing anything else?

    ~

    Revolution is an inside job. This is not an egoically pleasing fact, but it is a fact. It’s much more fun for egoic mind to believe both the problem and the solution exists in other people, but in reality the changes you can make in yourself will have far greater effects on the world.

    There are vast, vast depths within all of us, and we are capable of making vast, vast changes to those depths. We are in fact far more capable of doing this than we are of changing the outside world through force of will. And interestingly when we do this, we do change the world. And we do it far more efficaciously than we can by trying to will it to conform with the noises in our babbling thinky brain.

    *  *  *

    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 or Paypal, purchasing 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

    Sat, 05/02/2020 – 23:00

  • Get Ready For Slaughterhouse Robots To Ease America's Meat Processing Crisis 
    Get Ready For Slaughterhouse Robots To Ease America’s Meat Processing Crisis 

    America’s meat processing crisis, mainly triggered by labor shortages and plant closings due to coronavirus spread, is set to unleash a new wave of automation across plants to ease labor and health woes.  

    Bloomberg Law reports JBS SA, the world’s largest meat producer, is preparing to install robots in slaughterhouses to mitigate the spread of COVID-19 among human employees working on the production line. 

    JBS SA CFO Guilherme Cavalcanti recently said the Brazilian processing company expects to expand automation at its facilities across the world.  

    Cavalcanti said the adoption of automation started before the pandemic as labor tightened at US plants due to a decline in immigration sparked by the Trump administration. He said labor shortages have developed in the US as the virus infects workers and shutters plants. 

    Watch this video of meatpacking robots already in a JBS SA plant:

    The fast-spreading virus has so far infected 4,900 workers (across the entire industry) and left 20 dead at 115 meatpacking plants across 19 states, according to CDC data from April 9-27.

    In a JBS SA webinar on how it has handled its pandemic response, Cavalcanti said automation is more important than ever considering labor and health issues. 

    JBS SA has closed two US meatpacking plants due to the virus outbreak. There have been at least 22 plant closings in the US. We’ve noted, the closures have resulted in a 25% reduction in pork-processing capacity and beef by 10%. This has crushed farmers with overcapacity as they have limited options in selling livestock, resulting in mass cullings and plunging livestock spot prices. As for the consumer, soaring food inflation and shortages have been the result of plants reducing output or closing. 

    <!–[if IE 9]><![endif]–>

    And at Zero Hedge, we have not been shy at telling you how things might pan out when it comes to a nation that is becoming automated, which means millions of jobs will be eliminated entirely by 2030. And, for some more uncomfortable truths, corporate America will speed up their adoption of automation and artificial intelligence, because robots can’t be infected by coronavirus.  


    Tyler Durden

    Sat, 05/02/2020 – 22:35

  • "Go Buy Guns First" – John McAfee Warns Governments "Are Deceiving You" About Virus
    “Go Buy Guns First” – John McAfee Warns Governments “Are Deceiving You” About Virus

    Authored by Amy Castor via DeCrypt.co,

    The government is deceiving you. The pandemic is a ploy spread by the fake-news media, and if you care about your lives, go out and buy guns now. 

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    That was the message of John McAfee. Between evil laughs and dark chucklings, the tech guru, tax fugitive, and general wild man shared his suspect views on the “state of the world” during COVID-19 last night at Virtual Blockchain Week.

    “We are living in a paradigm the world has never seen before,” the 74-year-old crypto advocate and antivirus-software pioneer said, speaking from God knows where.

    (He’s kept his whereabouts a secret since fleeing Belize in 2012 after suspicions grew that he killed his neighbor.)

    “One-third of the planet is in lockdown,” he said, adding that most of those people are sitting at home, watching TV, and not doing much of anything, while the US government “pulls money out of thin air.” The situation is not sustainable, he argued.

    He was especially disturbed by a recent $2 trillion stimulus package in the US, which appears to be backed by nothing other than the good graces of the US government.

    “You can’t pull money out of the air and expect everything to be okay. Money is based on something called industry, production, service. We haven’t increased any of that,” he said, with a deep, unsettling chuckle. He predicted the money-printing will lead to a collapse of the US dollar. 

    It’s too late for crypto

    Bitcoin and blockchain were meant to “save us from financial slavery, and from the overburdened government that creates the fiat currency that we are forced to use,” McAfee said.

    But he doesn’t think crypto will save us this time. 

    “We are not going to jump into crypto,” he said, because it’s not easy enough to use.

    “It is not like opening a bank account. You have to spend days understanding what it is and how it works.” 

    But as far as the markets go, he predicts that the price of Bitcoin will spike ahead of the halving event on May 12. He recalled that in 2016, the last halving event, there was a huge rise in the price of Bitcoin, and then a huge drop. And he believes history will repeat because the same people populate the cryptosphere, and they’re just as greedy as they were four years ago. 

    More people die of diarrhea

    As far as the threat of COVID19, McAfee thinks the number of deaths are skewed because they are presented out of context. It is certainly not worth shutting down entire economies, he believes.  

    Repeatedly, he said more people die of diarrhea and of the flu. But both comparisons, common attempts to downplay the severity of the virus, have been widely dismissed as reckless by leading epidemiologists. 

    But the way McAfee, who is known for his drug use and paranoia, sees it—just before opening his talk, he jokingly commented he was getting ready to shoot up with heroin—we are being lied to by the government and stirred up by the media.

    “If you use your head and common sense, you can see you are being deceived,” he said.

    Due to the global shut down and the money printing, he believes dark times ahead for our species.

    The solution? 

    “Go buy guns, and guns first,” he said.

    “Because if you just have the food and you don’t have the guns, your neighbors are going to take it because your neighbors have the guns.”

    And then McAfee, who appears to enjoy it when people think he is on edge, pulled out an AK-47 assault rifle and began praising its sturdiness.

    “This sucker will always fire,” he said. 


    Tyler Durden

    Sat, 05/02/2020 – 22:10

  • "The US Doesn't Own The UN" – Furious Beijing Blasts UN Mission's Taiwan Tweets As "Political Manipulation"
    “The US Doesn’t Own The UN” – Furious Beijing Blasts UN Mission’s Taiwan Tweets As “Political Manipulation”

    President Trump is going all-in on antagonizing China as a crux of his 2020 campaign strategy (since clearly a large segment of his base, and many undecided voters, blame China for unleashing the virus on the world whether it came from a lab or not). And in keeping with the stepped-up antagonisms – since President Trump’s agreement to “cooperate” with President Xi to fight the virus is 100% meaningless – the US late Friday tweeted its support for Taiwan’s participation in the UN.

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    Kelly Craft

    The tweet, sent by the US Mission to the UN, said the 193-member organization should allow space for “all voices” and welcome “a diversity of views and perspectives” to promote human rights. “Barring #Taiwan from setting foot on UN grounds is an affront not just to the proud Taïwanese people, but to UN principles,” it continued. It was retweeted by US Ambassador Kelly Craft, who succeeded Nikki Haley as US ambassador to the UN.

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    Sympathy for Taiwan has been running high since the country masterfully handled the coronavirus outbreak. Another boost came when eporters exposed the WHO’s bias toward Taiwan and refusal to even acknowledge the de facto independent state (legally viewed in China as an errant province).

    Never one to mince words, President Xi has threatened retaliatory violence against any nation state that dares assist Taiwan on the road to sovereignty, a role that the US under President Trump has consistently flirted with. Trump’s overall hawkishness toward China – a huge component of his political appeal – is why there’s little doubt that China is actively trying to hurt Trump’s election chances (we suspect their intelligence indicates Joe Biden’s level of cognitive decline is more serious than most Americans realize).

    Unsurprisingly, China’s Mission to the UN – a body where China enjoys tremendous clout as a permanent voting member of the UN Security Council – responded that the US Mission was way out of line and should probably calm the fuck down before these twitter fingers turn to trigger fingers.

    The spokesperson for China’s U.N. Mission called the U.S. Mission tweet “a serious violation” of the General Assembly resolution that gave China the U.N. seat, three U.S.-China joint communiques and China’s sovereignty and territorial integrity.

    “It gravely interferes with China’s internal affairs and deeply hurts the feelings of the 1.4 billion Chinese people,” said the spokesperon, who was not named. “There is only one China in the world. The government of the People’s Republic China is the sole legal government representing the whole of China, and Taiwan is an inalienable part of China.”

    China’s mission accused the United States of ”hypocrisy” for citing the U.N.’s welcome of diverse views while repeatedly using its power to issue visas to block or delay U.N. member states and civil society organizations from attending activities at the United Nations.

    China strongly urged the United States to abide by the one-China principle, the three joint communiques between the two countries and the General Assembly resolution “and immediately stop backing the Taiwan region, politicizing, and undermining international response to the pandemic.”

    “While the coronavirus is raging across the world, people of all countries are calling for international solidarity in fighting the pandemic,” the Chinese spokesperson said. “Political manipulation by the United States on an issue concerning China’s core interests will poison the atmosphere for cooperation of member states at a time when unity and solidarity is needed the most.”

    And the icing on the cake: Global Times editor Hu Xijin whining that the US “doesn’t own” the UN.

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    Now get ready to do this all again tomorrow when the Pentagon sends a US carrier strike force through the Strait of Taiwan (we’re joking of course…but on a more serious note…it wouldn’t be so far-fetched).


    Tyler Durden

    Sat, 05/02/2020 – 21:45

  • Brace For A Monday Massacre: Buffett Liquidates All Airline Holdings As Berkshire Sees Another Leg Lower
    Brace For A Monday Massacre: Buffett Liquidates All Airline Holdings As Berkshire Sees Another Leg Lower

    Well, it’s official: there won’t be any “Buy American” op-eds by the Oracle of Omaha this time around. In fact, if anything, they will be titled simply “Sell.“

    Warren Buffett, who turns 90 in 4 months, had an unpleasant surprise for the permabullish Berkshire faithful during their annual pilgrimage to Omaha live-stream of Berkshire’s annual meeting: one month after Berkshire surprised investors by selling parts of its Delta and Southwest Airlines stakes – both of which had previously been above a 10% ownership level and speculation was rife that Berkshire could purchase an airline outright in the near future – the Oracle of Omaha said that, 4 years after Berkshire took major stakes in the four largest US airlines, he had liquidated the sold the entirety of its equity position in the U.S. airline industry which included $6.5 billion worth of stock in United, American, Southwest and Delta Airlines.

    Assuring that Monday will be a bloodbath for Trannies (that would be the transportation stocks you perverts), Buffett justified his decision as follows: “The world has changed for the airlines. And I don’t know how it’s changed and I hope it corrects itself in a reasonably prompt way,” he said. “I don’t know if Americans have now changed their habits or will change their habits because of the extended period.”

    But “I think there are certain industries, and unfortunately, I think that the airline industry, among others, that are really hurt by a forced shutdown by events that are far beyond our control.”

    “When we bought [airlines], we were getting an attractive amount for our money when investing across the airlines,” he said. “It turned out I was wrong about that business because of something that was not in any way the fault of four excellent CEOs. Believe me. No joy of being a CEO of an airline.”

    ““I don’t know that 3-4 years from now people will fly as many passenger miles as they did last year …. you’ve got too many planes.”

    Realizing that he won’t be alive by the time a turnaround eventually happens, he clarified that he made the decision and that he lost money on his investments. “That was my mistake.”

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    Asked by CNBC’s Becky Quick to clarify if Berkshire had sold all of its airline holdings, Buffett answered “yes” and explained: “When we sell something, very often it’s going to be our entire stake: We don’t trim positions. That’s just not the way we approach it any more than if we buy 100% of a business. We’re going to sell it down to 90% or 80%.”

    “The airline business — and I may be wrong and I hope I’m wrong — but I think it’s changed in a very major way,” Buffett said. “The future is much less clear to me.”

    As Bloomberg reminds us, Buffett has had a complicated relationship with the airline industry over the years. After a troublesome investment in USAir, Buffett joked that he would call an 800 number to declare he was an “air-o-holic” if he ever got the urge to invest in airlines again. Then in 2016, Berkshire dove into the industry again, amassing stakes in the four largest airlines. His renewed faith in the industry prompted speculation that he might one day own one of the carriers.

    There is a more simplistic explanation of Buffett’s style of investing at least in recent years: he will buy the stock of companies that engage in massive buybacks, such as Apple, even though his annual letter bashes companies that buybacks stocks, and he will dump all companies that halt buybacks, of which IBM is the most famous example. And since the quasi-bailed out airlines won’t be repurchasing stock for years and years to come, it was only a matter of time before Buffett dumped them.

    It also means that Buffett may soon liquidate many more sector holdings, starting with the banks which have also suspended buybacks for the near future and may be forced to extend said suspension indefinitely unless there is a V-shaped recovery in the global economy. The banks will then be followed by consumer discretionary, railroads, and many more. In fact, it would explain why unlike 2008, Buffett has not only not been buying any stocks despite major “bargains” but has actually been aggressive in liquidating his holdings, hardly an endorsement of the broader market.

    Amusingly, after wasting much digital ink bashing buybacks in his annual letters, Buffett went off on a rant defending buybacks during the annual videocast: “It’s very politically correct to be against buybacks now,” he said. “There’s a lot of crazy things being said about buybacks. Buybacks are so simple. It’s a way of distributing cash to shareholders,” especially when that shareholders is Warren Buffett. The “oracle” then noted that share repurchase programs should be executed in a price and need-sensitive manner, but “when the conditions are right, it should also be obvious to repurchase shares and there shouldn’t be the slightest taint to it anymore than there is to dividends.” Yes, well, good luck with all that Warren because for the next 2 years, you can kiss buybacks goodbye from all companies except perhaps the FAAMGs.

    For those curious what Buffett will sell next, here is a full summary of Berkshire’s most recent equity holdings:

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    “If we like a business, we’re going to buy as much of it as we can and keep it as long as we can,” he added. “And when we change our mind we don’t take half measures.”

    His comments Saturday afternoon came after Berkshire reported a $50 billion Q1 loss and only nibbled at equities during the violent stock market rout in March, mostly on his investment portfolio, even as the conglomerate’s cash stockpile rose to a record $137BN (more net cash than AAPL has) and up $10 billion from the $127 billion it reported at the end of 2019.

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    As we reported earlier, the company spent just $1.8 billion buying stocks and just $1.7 billion repurchasing Berkshire Hathaway shares during the first quarter of 2020, suggesting not only that Buffett could not find any of his hallmark bargain, value opportunities in the market sell-off, which took the S&P 500 down more than 30%, but that Buffett sees the current market rebound as nothing more than a dead cat bounce as he prepares to snap up the real bargains after the next crash.

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    Explaining why he didn’t repurchase more Berkshire Hathaway shares during the sell-off in the first quarter, Buffett said “the price has not been at a level where it really feels way better to us than other things, including the option value of money, to step up in a big way.” Which is a long way of saying it remains too expensive.

    Worse, explaining why he still hasn’t made a major acquisition despite the recent 35% drop in the market, the billionaire investor said “we have not done anything because we haven’t seen anything that attractive,” adding that “we are not doing anything big obviously. We are willing to do something very big. I mean you could come to me on Monday morning with something that involved $30, or $40 billion or $50 billion. And if we really like what we are seeing, we would do it.”

    The fact that he hasn’t done it yet means one thing: Buffett, or rather the banks that advise the soon-to-be-90 year old investor are convinced that a next leg lower in stocks is coming, and he should conserve his ‘dry powder’ for when it comes.

    And what may be scariest for the bulls, is that in justifying his lack of buying, Buffett practically blamed the Fed, saying that “the Fed acted too quickly and too strongly for Berkshire to may any big deals right now.” Not only that, but even Buffett – whose entire fortune is the result of enjoying sequential bailouts from either governments or central banks time and again – appears to be becoming a measured Fed skeptic: “you can look at the Fed’s balance sheet and you will see some extraordinary changes there in the last 6 or 7 weeks. And we don’t know the consequences of that.” And while he adds that Powell took Draghi’s “whatever it takes squared… we are prepared at Berkshire that maybe the Fed will not have a chairman that acts like that” which explains Berkshire’s $137 billion in cash, which in other words is a hedge for when the Fed finally fails to prop up stocks.

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    Translation: according to none other than the most admired investor in the world, the Fed’s unprecedented bailout of capital markets has not only disconnected prices from fundamentals but has led to a market so overvalued that there are still no bargains despite the recent crash (and subsequent dead cat bounce).

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    And now we prepare for the Monday bloodbath in the trannies, and perhaps across the entire market, as investors – notorious for being unable to think for themselves and always blindly following the actions of a 90-year-old man – furiously imitate what Berkshire has already done. And, if the bulls are unlucky, the selling could be the catalyst for the next major market drop… which would of course be delightfully ironic if Buffett’s own actions catalyze the crash that he hopes to benefit from and finally put his record cash hoard to use.


    Tyler Durden

    Sat, 05/02/2020 – 21:25

  • "Remdesivir Is Probably Worthless" – A Trauma Surgeon Exposes "Drug Company's Shenanigans"
    “Remdesivir Is Probably Worthless” – A Trauma Surgeon Exposes “Drug Company’s Shenanigans”

    Markets got very excited (briefly) this week about a study finding a Gilead Sciences drug helped coronavirus patients heal a little more quickly.

    But that was all the trial found: remdesivir isn’t the miracle cure that will get us all out of lockdowns tomorrow, unfortunately.

    Worse, as Bloomberg’s Faye Flam writes, the trial was rushed to get quick FDA approval, without getting helpful information on what kinds of patients it helps or hurts the most; and now that the study is over, we’ve forever lost a chance to help doctors treat virus patients better.

    All of which raises a significant number of questions and Acute Care Surgeon (and Asst Professor of Surgery at Wash U.) Mark Hoofnagle warns “I am truly sorry to say, Remdesivir is probably worthless…”

    In an excellent Twitter thread, Hoofnagle details what he calls “some fascinating drug company shenanigans.”

    First, the pre-test probability that an infused, small-molecule inhibitor of a virus would improve mortality in symptomatic patients was already pretty low. Unfortunately, antivirals work poorly in acute disease. This has to do with their mechanism of action, and host response. 

    Antivirals usually target some aspect of viral replication/assembly/transmission. Remdesivir is a clever pharmacologic prodrug that inhibits a key piece of RNA viruses that mammals don’t have – the RNA-dependent RNA polymerase, and inhibits viral replication. 

    Unfortunately, by the time you are symptomatic with a virus, you are usually already high/peak viral load. So, when you give an antiviral to someone who is already ill, the damage from the virus is largely done.

    It’s there in big numbers and in the cells. 

    Consistent with this, the Lancet paper on the remdesivir trial in China shows no impact on viral load clinically.

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    Pick your metaphor. The cat is out of the bag. The damage is done. At this point the host response to virus is activated, and your body is suppressing replication through a variety of mechanisms (which also make you feel terrible). 

    So how could inhibiting RDRP after the fact help? The answer is, it probably doesnt. It certainly didn’t in this trial – no difference, not even a trend in mortality, but in subgroup analysis maybe shortened disease duration in early/mild disease.

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    Now, critics of stupid drugs that should never have been stockpiled by govts say, “sounds like Tamiflu!”

    Yes. This is the same as Tamiflu, which also maybe shortens flu by a day, but otherwise is a largely useless antiviral (and actually harmful with bad side effect profile). 

    Fortunately, side effects of remdesivir did not seem severe in this trial with only about 3x as many patients stopping than placebo, some rashes, nothing life threatening.

    Where do the Shenanigans come in?

    Well, remember how maybe this Chinese trial showed a shortened course in a subset of patients? Like tamiflu? But didn’t change mortality?

    Well a month ago the NIAID trial changed their endpoints to remove death and instead look at dz duration.

    No really.

    They changed the destination half way through the race to match the only positive outcome of another trial, that they (or Gilead at least) certainly had a copy of the paper once it was submitted to Lancet.

    Shenanigans! Get a broom!

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    This is like declaring a race and then when you realize you’re not going to win, declaring the destination was actually wherever you are standing at the moment. 

    Then, even more fishy, *the same day* as this Lancet trial is release, Gilead and NIAID claim a “positive trial” and they’ve “shortened the course of the disease significantly”. Notably, the mortality benefit did not reach significance.

    By the end of the day, reports that FDA is going to emergently approve remdesivir for treatment of COVID.

    Gilead gets what they want. No one will want to be in a control arm in further trials and they will argue all future trials must be non-inferiority. 

    Before we have the answer whether this drug actually changes anyone’s destiny, it’s going to become the gold standard therapy. We will likely now never know if (the unlikely possibility) it changes mortality. 

    Absolute genius. You have to salute them. On the day a negative trial of their drug is reported, based on a press release they took over the news cycle, and with some midstream edits to their endpoints their now “positive” trial wins them FDA approval and a halted trial. 

    It’s an infusion, once symptomatic, you need an admission, a test, etc., really even symptoms are probably too late a goal for such a therapy to work. Prophylaxis (like Gilead’s Truvada/PreP) would be better – but unworkable in its current form. 

    Either way, a big win for Gilead, but I’m unimpressed with any if the evidence presented so far that this is a game changer.

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    How long before Hoofnagle is banned from Twitter?

    Hoofnagle is not alone in his skepticism.

    Naked Capitalism’s Yves Smith exclaims, it is disturbing to watch the push to con the public into seeing remdesivir as the only promising treatment for coronavirus, and points to a new study that found and tested 47 old drugs that might treat the coronavirus: Results show promising leads and a whole new way to fight COVID-19

     


    Tyler Durden

    Sat, 05/02/2020 – 20:55

  • 6 Reasons Why This Is (Or Isn't) The Worst Economy Since The Great Depression
    6 Reasons Why This Is (Or Isn’t) The Worst Economy Since The Great Depression

    Authored by Daniel Nevins via Nevins Research,

    When the NBER’s Business Cycle Dating Committee draws the boundaries on the current recession, it’s unlikely to stand out as an especially long one. In fact, by the time the committee publishes the official start date, it could be past its end date.

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    Why?

    Because it’s front-loaded. Spending has dropped so sharply in such a large portion of the economy that many types of activity have nowhere to go but up. And once activity starts increasing, even from nothing, that’s expansion, not recession.

    But the eventual business-cycle dates tell us little about our current situation. We could hit bottom in 2020 but then expand so weakly that we don’t restore vitality for several years. So let’s consider how the economy might unfold over a fixed horizon—say, three years from 2020 to 2022—rather than fixating on business-cycle dates.

    First, I’ll look at the reasons why our situation is really, really bad, and then I’ll consider why it might not be that bad, after all. I’ll benchmark my calculations against the post–World War II period, but especially against the economic destruction from 2008 to 2010.

    Why this is the worst economy since the Great Depression

    I have six reasons.

    Reason #1: This is a “double-recession.”

    Consider that our last ten recessions were shaped mostly by four categories of spending: business equipment, commercial real estate, home building and consumer durables. If you isolate only the ups and downs of those four categories (but throw in changes in inventories to account for milder, inventory recessions), your partial business-cycle history would be almost indistinguishable from the actual history.

    Moreover, those four categories typically amount to less than a quarter of the economy. In 2019, they composed 19.5% of GDP, as shown below:

    • Business equipment:  5.8%

    • Commercial real estate:  2.9%

    • Home building:  3.7%

    • Consumer durables:  7.1%

    So a 19.5% chunk of the economy explains the first part of the double-recession, and we know it’s currently recessionary because the usual precursors are back—collapsing business profits, tightening loan standards, widespread job losses and rising delinquencies. With the usual precursors in place, we can expect a sharp contraction in all four categories noted above.

    But the second part of the double-recession is separate. Consider the 2019 GDP weights for the additional spending categories below, totaling 11.3%:

    • Transportation services:  2.2%

    • Recreation services:  2.7%

    • Food services and accommodations:  4.8%

    • Gasoline and other energy goods:  1.6%

    Now we’ve reached the piece that’s completely new—it has no precedent in past business cycles. Each of the four categories shown above has contracted far more than ever before. In each case, activity is only a fraction of what it was just three months ago—probably less than half, and maybe even less than a quarter. Considering the severity of the contraction, together with the GDP weights, the destruction in these items alone is enough to establish a recession, even without the usual fixed investment and consumer durables categories discussed earlier.

    So that’s what I mean by a double-recession. The first part includes the fixed investment and consumer durables categories (totaling 19.5% of GDP). The second part includes the additional categories (totaling 11.3% of GDP) that imploded during the last two months, even as they’re normally only bit players in the business cycle.

    Reason #2: Pandemic-related business costs could last for years.

    Businesses will have to manage through some combination of the following:

    • Migration to more secure but higher cost suppliers (in response to supply chain fragilities exposed by the pandemic)

    • Measures to facilitate social distancing, including larger business premises in some cases

    • More frequent and thorough cleaning of business premises

    • Personal protection equipment for employees and, in some cases, customers

    • COVID-19 testing costs

    • Potentially greater contributions to employee health insurance (when insurance companies build COVID-19 into their cost structures, premiums can only go up)

    • Potentially greater absenteeism (employees being told to stay home with even mild illnesses, employees relying on public transportation facing greater challenges getting to work safely)

    • Potential work stoppages when employees test positive

    • Potential hazard pay

    We can only guess how widespread and persistent these costs will be. But across the whole economy, they’ll surely add to a significant, positive number. They’re bad news for business profits, inflation and probably both (more on inflation in a moment).

    Reason #3: The Fed only had two bullets in the interest-rate chamber (the two March rate cuts).

    After cutting the fed funds rate in March from 1.6% to just above zero, the Fed can’t reduce it further without entering the Twilight Zone of negative rates. (Sure, other countries have tried negative rates, but it’s still the Twilight Zone.) By comparison, here are the fed funds rate changes during the last five recessions, from business-cycle peak to business-cycle trough: –4.8%, –9.8%, –2.0%, –3.2% and –4.1%. So this year’s change of –1.5% is only a fraction of the interest rate stimulus we normally see in recessions.

    Reason #4: Bankruptcies could be more severe than in any other post-WW2 recession.

    I wrote “could be” because we don’t know for sure, but record bankruptcies seem consistent with three things we do know.

    • First, business shutdowns within the 11.3% of GDP noted above (the second part of the double-recession) will surely result in record destruction in that particular portion of the economy.

    • Second, activity has already contracted more sharply than at any time since the 1933 national bank holiday, and in that instance, widespread business stoppages only lasted a week.

    • Third, nonfinancial businesses are loaded up with record amounts of debt. As of Q4 2019 and relative to GDP, nonfinancial businesses were more indebted than ever before on a gross basis (74% of GDP), and they also carried more debt than in any prior expansion after netting out interest-earning assets and cash (55% of GDP). In short, nonfinancial businesses could hardly have entered this crisis with a riskier aggregate balance sheet.

    Reason #5: Meet the zombies—next generation.

    Stimulus programs are helping forestall economic destruction, but they’re also propping up companies that wouldn’t be viable without cheap financing backed by the Federal Reserve and Treasury Department. Some of those companies will still go bust, despite public support. Others will become zombies, dependent on loans that can only be paid back by obtaining more loans. To those who pointed to the zombie companies of the last decade as one reason for a less-than-vibrant global expansion, you haven’t seen anything yet.

    Reason #6: Inflation risks are unusually high for a recession.

    As noted above, the pandemic has lifted business costs by adding procedures and complexities that didn’t exist before. Rising business costs damage profitability, at first, but should eventually have some effect on inflation. And that’s not all. Inflation is normally a policy choice (either intentional or inadvertent), and policy makers are more inclined to risk it than at any time in the last four decades. Notably, current policies include direct injections of Fed-financed spending power into the Main Street economy. Moreover, those injections appear to be augmenting rather than just supplanting spending power supplied by commercial banks. (I’ve shown several times that past QE programs merely substituted Fed financing for commercial bank financing, without having a significant effect on the total.)

    Note that I’m not using the flawed logic of monetarist economists who predicted rising inflation during the Fed’s earlier QE programs, nor did I join those predictions (just the opposite, as shown here, for example). Also, the inflation outlook is hardly one-directional, since certain items, such as housing costs, are now less likely to inflate than they are to deflate or remain stable.

    But the factors discussed above should threaten the benign inflation of recent decades. After remaining below 3% for the last 24 years, an increase in core inflation to just 4% would be a major event. And if we get there, fiscal and monetary policies would become more challenging, to say the least. After many years of disinflation, policy makers would again be forced to choose between snuffing out inflation and sustaining growth.

    Why this isn’t the worst economy since the Great Depression

    I have six reasons, once again, the first three of which compare 2020 to 2008.

    Reason #1: The big-4 “home” risks—home prices, home mortgage debt, home building and home equity extraction—are relatively nonthreatening.

    The mid-2000s housing bubble brought unsustainable prices alongside unsustainable growth in mortgage debt, home building and home equity extraction. Just before the pandemic, by comparison, house prices and housing activity appeared sustainable. Here’s a rundown of 2019 data versus “peak” housing boom data:

    • Home prices:  Grew 3% in 2019 versus –19% in 2008 (after peaking in mid-2006)

    • Home mortgage debt:  49% of GDP in 2019 versus 72% in 2007

    • Home building:  3.7% of GDP in 2019 versus 6.6% in 2005

    • Home equity extraction:  1% of DPI in 2019 versus 8% in early 2006 (according to Bill McBride’s calculations)

    We can link each of the items above to a significant drop in household spending power or housing activity in the 2008-9 recession and the years that followed, whereas the data show much lower risks today. Clearly, the big-4 home risks are unlikely to wreak as much destruction in the current recession as the destruction caused by the housing bubble.

    Reason #2: Sterilization? What’s that?

    In 2008, the FOMC fretted for months before dropping long-established central banking orthodoxies. But such lengthy deliberations have long since gone out of style. The committee now crams money without hesitation into every financial-sector crevice that appears to be leaking. The new policy “normal” invites both moral hazard and zombification of wide swathes of the economy, as noted above. But the immediate upside is significant—the Fed’s interventions short-circuited the financial crisis that appeared to be unfolding in March.

    Reason #3: Banks have more capital than they did in 2008.

    We’ve all heard the story about the better capitalized banking system, and it’s true. But higher capital ratios won’t stop banks from slowing or even shuttering their lending operations. (They’ve already done that.) So the capital cushion is larger, and that’s nice to have, but it won’t save the economy. The main benefit is that measures to bail out the banks won’t need to be as large as they would otherwise be.

    Reason #4: Some areas of the economy are seeing stellar demand.

    I noted above that spending has evaporated like never before in portions of the economy that total 11.3% of GDP. Now consider three other types of spending:

    • Food and beverages purchased for off-premises consumption (4.8% of GDP)

    • Other consumer nondurables (5.6% of GDP)

    • Health care (11.5% of GDP)

    Solid spending in these areas, which total 22% of GDP, doesn’t negate the destruction in the transportation, recreation, restaurant, hotel and energy sectors. But it’s important to recognize that some of the spending lost through health fears and business shutdowns is being redirected, not extinguished. It’s flowing strongly into other parts of the economy. And the jobs market demonstrates that point—many recently jobless workers are finding new positions at Amazon, Instacart, CVS or one of a smattering of other companies whose outlook has brightened. So the double-recession I noted above might net out to more like a recession-and-a-half.

    Reason #5: Furloughs, not layoffs.

    Of the newly jobless workers who don’t find jobs elsewhere, many remain on their employers’ payrolls, retaining certain benefits but not working or receiving wages. One survey shows that 78% of employees who lost their wages due to the coronavirus expect to return to their former jobs. That might prove more hopeful than realistic, but it’s a less bearish recession story than the more typical story of companies slashing labor unconditionally.

    Reason #6: Helicopter money!

    Now for the elephant in the room. Fiscal policy makers are intent on providing “what it takes” to overcome the crisis. For that, they’re tapping into the Fed’s unlimited capacity to finance government spending with newly created money. They’re tapping it like never before. To highlight just two data points:

    • Roughly half of unemployment claimants will have more income than they had while working (through July, at least), thanks to an extra $600 weekly of CARES Act benefits on top of their normal state benefits.

    • Millions of working Americans will also make more than they would have without COVID-19, thanks to CARES Act stimulus payments.

    It shouldn’t be surprising that the survey linked above shows people feeling better about their finances than they did a month ago, despite weekly unemployment claims averaging over five million between the two survey dates.

    So helicopter money gives us yet another surreal and unprecedented development to ponder. In the short-term, it’s certain to blunt the pandemic’s economic impact. In the long-term, we’ll face consequences, but I won’t delve into that in this article. I’ll only suggest tuning out pundits who claim that “advanced” nations with their own currencies can drop helicopter money without repercussions. In fact, the advanced nations of today reached their advanced status long ago after enduring tumultuous periods of fiscal profligacy, learning from those experiences, and then maintaining relatively sound finances thereafter. And if they didn’t learn from experience? Well, that’s one of the biggest reasons that many countries fail to advance.

    (My book supports that argument with an examination of every recorded instance of governments accumulating a higher debt-to-GDP ratio than America’s debt-to-GDP as of 2018. For anyone interested in the general idea without the historical detail, I published an excerpt here.)

    Conclusions

    The eventual COVID-19 wreckage pivots on many unknowns, and future policies are among them. But the biggest unanswered question—at least when it comes to the economy—is this:

    For how much longer will the pandemic prevent vulnerable businesses from operating profitably (or operating at all)?

    Optimistically, new COVID-19 cases will descend downward until they hit bottom in a few months, allowing businesses to restore profitability. That’s the scenario the President’s task force includes in its slideshows—it shows virtually no new cases by July. And the more political voices on the task force have reinforced that message, playing up the idea that we’ll be back to normal by this summer. If their prediction proves accurate, the economy should perform better in 2020–22 than it did in 2008–10, for these reasons:

    • With a COVID-19 resolution in the summer, the housing market would be in far better shape than it was in 2008.

    • The financial sector would recover relatively quickly—banks would still be cautious but not as cautious as they were during and after the Global Financial Crisis.

    • Many depressed businesses would bounce back at least partially and rehire furloughed employees.

    • Some businesses boosted by the pandemic would continue to thrive.

    • Exiting the recession, household spending power would be unusually strong, thanks to the recession’s short duration as well as generous government handouts.

    So that’s the outcome we’re hoping to see, but it has an obvious weakness. That is, it presumes the coronavirus remains dormant after the economy restarts. A different theory says the virus revives whenever it finds an opening. Evidently, that’s a common feature. Epidemics tend to attack in waves. Until vaccines become available, the challenge in snuffing out this epidemic is that it only takes a handful of infected people going about their normal lives to reseed it.

    In other words, a future resurgence of COVID-19 seems the most likely outcome. It’s the scenario many experts warn us to expect, and not just any experts but the ones who’ve been most accurate to date.

    Where does that leave the economy?

    The worst case combines a historically deep recession with a disappointing recovery that feels more like continued recession. If future COVID-19 waves prove as dangerous as the first wave, the recession could be an early 1980s–style double-dip. But other possibilities are less severe. For example, medical discoveries could make the virus less risky, restoring confidence in normal business activities. (Note that Dr. Fauci was citing “quite good news” on remdesivir trials as I write this.)

    So the possibilities run from one extreme to the other. We need to be ready for anything, unfortunately, from a mid-2020 rebound to a prolonged crisis more severe than any since the Great Depression.


    Tyler Durden

    Sat, 05/02/2020 – 20:30

  • 50 Dead, 60 Wounded After Venezuela Prison Uprising: Live Updates
    50 Dead, 60 Wounded After Venezuela Prison Uprising: Live Updates

    Summary:

    • Italy sees 76% surge in new COVID-19 deaths as single-day total hits 11-day high

    • New York sees first rebound in deaths since April 25th.

    • 12.3% of New York state tested positive for COVID-19 antibodies

    • Spain allows outdoor exercise

    • Russia reports another record jump in cases

    • Video shows Mexican hospitals hiding bodies of COVID-19 patients as hallways packed with the sick

    • More EU countries back plan to waive law requiring airlines give cash refunds

    • IMF lends another $642 million to Ecuador as coronavirus ravages country

    • France extends state of emergency order until July 24

    • Singapore eases some lockdown measures as domestic cases decline

    • US case total tops 1.1 million

    • Japan joins US in fast-tracking remdesivir

    *  *  *

    Update (1725ET): In what has been a relatively quiet day for virus news, South American newspapers are reporting on a prison riot in Venezuela that has left almost 50 prisoners dead. The riot reportedly started on Friday, according to local newspaper Ultimas Noticias and Reuters.

    Prison riots have occurred in Italy, China and elsewhere as prisoners, forced to live in crowded conditions, rebel over prohibitions against visitors while outbreaks are virtually left unchecked.

    Opposition lawmakers reportedly blamed the riots on new rules banning visitors from bringing food for the inmates. The riot took place at Los Llanos Penitentiary Center in Guanare in the western state of Portuguesa.

    To date, Venezuela has confirmed 335 coronavirus cases and 10 deaths from the virus, but the outbreak is believed to be much more widespread. And the further plunge in oil prices caused by the outbreak has only exacerbated one of the world’s worst humanitarian crises.

    At least  46 prisoners are believed to have died, along with another 60 who were injured, many seriously.

    In a local media interview, Prisons Minister Iris Varela said the riot resulted from an escape attempt. On twitter, local accounts claimed guns and grenades were used by the prisoners, and that the Warden of the prison had been shot and badly wounded.

    The Venezuela Prisons Observatory posted photos of what appeared to be bodies lying on a blood-stained concrete patio.

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    It said there were 2,500 prisoners in the jail, which is designed to hold 750.

     

    *  *  *

    Update (1325ET): As Italy and Spain continue to tiptoe toward reopening, France has decided to take a U-turn and extend its “State of Emergency” – an order that undergirds the strict legally-enforced lockdown in France – until July 24, an unprecedented two-month extension that will almost certainly infuriate thousands of French citizens.

    Though, to be sure, fear of the virus runs deep in France, just like it does in Italy and Spain where many residents – especially the vulnerable – express trepidation about reopening. But French Health Minister Olivier Véran said Saturday that the a bill to extend the deadline will be put to France’s parliament on Monday.

    “We are going to have to live with the virus for a while,” Interior Minister Christophe Castaner said after a cabinet meeting.

    Travellers to France, including French citizens returning home, will face a compulsory two-week quarantine and possible isolation when they arrive in the country to help slow the spread of coronavirus, the health minister said.

    Véran said the duration and conditions of the quarantine would be defined in a decree to be published. Decisions to isolate people would be scrutinised by judges to ensure they are justified and fair, he added.

    To be sure, France is still planning on easing some conditions on May 11, and then some more on May 17. But some measures – like ensuring restaurants and retailers don’t allow the number of customers to reach full capacity – will likely persist for a couple more months, according to France 24.

    President Macron said Friday during a ‘May Day’ address that the French people shouldn’t expect life to go back to normal immediately after the first restrictions are lifted on May 11.

    Norway recently announced plans to extend a ban on large gatherings through the summer until summer, and many officials, including NYC Mayor de Blasio and NY Gov. Cuomo have warned that concerts, shows and music festivals might not return for some time.

    In other news, Reuters reports that Germany, Italy and Spain have joined a call by 12 EU governments to suspend rules requiring airlines to offer full cash refunds as more airlines – including Ryanair –  implement mass layoffs or file for bankruptcy.

    “I’m glad a very large majority of member states are supporting my request to authorise airlines and maritime groups to temporarily use vouchers when trips are cancelled, so as to relieve their cash reserves while protecting passengers’ rights to a refund,” French transport minister Jean-Baptiste Djebbari told Reuters in a statement.

    Finally, the IMF said Saturday it would lend another $643 billion to Ecuador as it grapples with one of the deadliest outbreaks in the region while also struggling with the financial whiplash caused by the global drop in oil prices.

    *  *  *

    Update (1130ET): New York suffered its first rebound (to 299) in COVID-19 deaths since April 25th. Governor Cuomo says this is “bad news”  though added optimistically that hospitalizations declined further.

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    Additionally, 12.3% of New York state has tested positive for novel coronavirus antibodies, Gov. Andrew Cuomo said at a briefing on Saturday.

    As a whole, 19.9% of New York City has tested positive for antibodies, the preliminary study found. At 27.6%, the Bronx is reporting the highest rate of infection, which Cuomo said the state would further investigate.

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    Italy also suffered a surprise resurgence in COVID-19 deaths…adding 474, the most since April 21st.

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    *  *  *

    For the first time in seven weeks, adult Spaniards are enjoying a jog or a bike ride outdoors as PM Pedro Sanchez lifted restrictions on outdoor exercise.

    Spain’s death toll and case count have been trending lower (interspersed with a handful of one-day spikes) for more than two weeks. A week ago, the government lifted restrictions requiring children to remain indoors, allowing young children to leave their homes (accompanied by an adult) for the first time in a month and a half.

    Spain’s lockdown has been among the most strict in the world (in some ways, it approximated the lockdown faced by the tens of millions of Chinese residents of Hubei).

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    Of course, that remains to be seen: One of the biggest stories of the past week has been the uptick in Germany’s ‘infection rate’ – known as “R” – which approximates the average number of people infected by an infected patient. So long as the ratio stays below 1, then the outbreak is slowing. But mid-week, Germany revealed that its ‘R’ rate had jumped from 0.70 to 0.96 in the week since some more shops were allowed to reopen.

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    However, now that people are back out and about, Spain is imposing a new restriction: the government is requiring masks to be work on all public transport as of Monday, the prime minister said earlier this week as he outlined plans to relax the lockdown.

    To ensure that nobody is unable to comply, the government will hand out millions of masks to reduce the risk of contagion, Pedro Sánchez said in an address to the nation on Saturday afternoon. He pleaded with Spaniards to exercise responsibility when the next phase towards ending the lockdown begins on Monday.

    Sánchez said Saturday that 6 million masks would be handed out at transport hubs, while 7 million would be handed out by local councils, and 1.5 million would be distributed by the Red Cross and other NGOs. He added that the success of Spain’s phased emergence from lockdown would depend on “social and personal responsibility,” adding, “the key to the de-escalation isn’t just about personal decisions. The key will be tens of thousands of decisions taken at home, on public transport, at work, and in free time.”

    Spain’s Health Ministry said Saturday there have been 216,582 confirmed cases of the virus in the country, and 25,100 deaths.

    In Italy, concerns about the reopening are intensifying have led to deep political divisions about how the process should be conducted, as millions worry about another devastating spike in deaths.

    As Spain and Italy prepare to lift all remaining restrictions, Russia is finding that its national lockdown, which was extended to mid-March last month by President Putin, might not be long, or strict, enough.

    It’s becoming increasingly clear that the virus has already deeply penetrated Moscow society, and spread far and wide enough to create a serious problem in the massive country of 144 million. New daily nfections in Russia have risen by 20% as officials worry that hospitals across the country – but particularly in Moscow – might be overrun.

    More than 9,000 new infections were reported on Saturday, another daily record. Once again, they were mostly in Moscow, where the mayor said earlier this week that the government might establish temporary hospitals in sporting arenas or shopping centers to help manage the flow of seriously ill patients, following several other European countries, including Spain and the UK.

    Russia has 124,054 confirmed cases, including Prime Minister Mikhail Mishustin, who had been charged with leading the country’s response. Russia’s death toll stood at 1,222.

    Its death toll stood at 1,222 as of Saturday morning, although many suspect that the true number of cases is likely much larger, as is the number of deaths.

    Over in North America, the government of AMLO, the far-left anti-establishment leader who has been skeptical of the virus from the beginning, has just been exposed for actively trying to cover up the extent of the crisis.

    In the US, the number of confirmed cases climbed to 1,104,345 as of Saturday morning, while the number of deaths hit 239,236.

    And here’s a rundown of where every country stands re: ‘the virus curve’.

    Relatives of patients burst into a Mexican hospital on Friday night and discovered bodies in bags on stretchers crammed into a room. Several of the families discovered the bodies of their loved ones, deaths that hadn’t officially been reported in Mexico’s numbers.

    Watch the video below:

    Finally, Singapore said it will start easing some of its distancing measures after reporting a drop in locally transmitted coronavirus cases. The average daily number, excluding migrant workers living in dormitories, of locally transmitted cases has dropped to 12 in the past week from 25 the week before, as the country’s outbreak has been almost entirely confined to impoverished migrant workers who represent a kind of second-class caste in Singaporean society.

    As more scientists question the wisdom of the US going all in on remdesivir, Japan said Saturday that it woud fasttrack a review of the antiviral drug remdesivir so that it can hopefully be approved for domestic COVID-19 patients. We suspect US investors will be watching for results of that study.


    Tyler Durden

    Sat, 05/02/2020 – 20:22

  • US Embassy: Israeli West Bank Annexation Can Move Forward Without A Palestinian State
    US Embassy: Israeli West Bank Annexation Can Move Forward Without A Palestinian State

    The recently established US Embassy in Jerusalem (moved from Tel Aviv last year as part of Trump’s plan) has confirmed that the world will soon see the most controversial element of Trump’s peace plan put into effect: Israeli annexation over broad swathes of the West Bank, particularly the Jordan Valley.

    “As we have made consistently clear, we are prepared to recognize Israeli actions to extend Israeli sovereignty and the application of Israeli law to areas of the West Bank that the [Trump peace plan] foresees as being part of the State of Israel,” a top US Embassy official told the Times of Israel on Friday.

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    Prime Minister Benjamin Netanyahu with US Ambassador to Israel David Friedman (center). Image source: US Embassy/Times of Israel.

    The statement made clear that “Israeli actions” will be validated with or without recognition of a Palestinian state, something which on paper at least Trump’s ‘deal of the century’ offered. 

    Though the deal offers statehood, the Palestinians have rejected the US-Israeli brokered Trump peace plan from the start, given they simply had no involvement or were not fundamentally consulted. 

    Ultimately such a brazen annexation, which as we noted before PM Netanyahu said will take place as early as within two months, or likely early summer, will essentially end the path to statehood.

    But maybe this was the whole point to begin with: design and orchestrate a ‘peace plan’ which ultimately preempts any real path to statehood all while charging the Palestinian side with not being on board, or as has been heard many times before: the Israelis can claim “we don’t have a partner for peace”. 

    Should Israeli annexation indeed move forward by this summer, as Netanyahu envisions, it could potentially unleash protests and violence on the level of a third Intifiada. Palestinian Authority leaders as well as Hamas have vowed that such an extensive new Israeli land grab will be resisted by call costs. 


    Tyler Durden

    Sat, 05/02/2020 – 20:05

  • SpaceX: Camel's Nose Under The Tent Of Rapid Space Militarization
    SpaceX: Camel’s Nose Under The Tent Of Rapid Space Militarization

    Via Southfront.org,

    In the last several decades, and certainly in the post-9/11 environment in which the previous restrictions on the militarization of the American society largely disappeared, the US national security establishment has expand not only by creating new programs and agencies, but also by co-opting non-state actors. Many a US think-tank is now little more than an extension of some US government agency, conducting research to validate previously arrived-at conclusions in furtherance of a specific institutional agenda. Likewise many corporations have gone beyond being mere defense or intelligence contractors. Rather, their business activities are from the outset designed to be readily weaponizable, meshing seamlessly with the armed services and intelligence agencies.

    It is not entirely clear how the process works, for there does not appear to be a system of contract awards for specific deliverables. Rather, it seems these capabilities are developed on the initiative of specific businesses which speculate their efforts will be utilized by the US national security establishment ever on the lookout for technological “game-changers”. Moreover, given the unchecked growth of the US national security budget, these entrepreneurs can operate in high confidence their efforts will also be financially rewarded by the intelligence and defense establishments, even if they are not commercially viable.

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    Falcon 9 launch in November 2019, which carried 60 Starlink satellites, via SpaceX.

    There have been numerous examples of initially civilian applications being put to use for the benefit of US national security institutions. Facebook has made its databases available to various agencies to test facial recognition technologies, for example. Google and Amazon make their cloud capabilities available to the Pentagon and the intelligence communities. The opposition to China’s Huawei 5G networks and cell phones appears to be motivated by the concern these systems do not have backdoors installed for the benefit of US national security state.

    Elon Musk’s business empire has benefited from its proximity to the US national security state. Musk, an immigrant from the Republic of South Africa, has made his initial fortune by creating PayPal. While Musk has sold his remaining interest in PayPal in 2002, that entity has since then engaged in furthering US national security agendas by blocking payments to organizations which were critical of US policies. This, however, is probably more of a reflection of the subservience of US tech firms to the US government than of Musk’s original intent.

    Nevertheless, the timing of Musk’s departure from PayPal and the entry into the space business is noteworthy. Already in the late 1990s, there were rumblings in the United States about the desirability of militarizing space and building up anti-ballistic missile defenses, ostensibly against the so-called “rogue states” of North Korea and Iran. These initiatives gained considerable impetus in 2001, following the election of the Bush-Cheney administration which promptly moved to end the ABM Treaty as the first step toward the future of weaponization of space.

    Space-X’s establishment in 2002, the same year the ABM Treaty collapsed due to the Bush Administration abrogation, seems entirely too convenient to be a mere coincidence, even though the stated aims of the company are mainly commercial. Still, it is easy to imagine why a firm focused on the development of low-cost, possibly reusable, space launch vehicles would be useful to the Pentagon. Creating a government program with the same objective would have attracted unnecessary attention. There would be budget appropriations battles, congressional testimony, various forms of oversight, and the inevitable domestic and international opposition to such destabilizing and provocative initiatives.

    Providing Space-X with technological assistance, allowing it to hire government specialists, then giving it access to lucrative government space launch orders, is a far more attractive proposition. Moreover, the bypassing of the normal defense contracting system actually meant considerable cost savings, thanks to Musk’s red tape-cutting techniques. It’s design bureau functioned in a fashion akin to Lockheed’s famous “skunk works” which developed extremely ambitious projects such as the U-2 and SR-71 in large part thanks to being able to fly “under the radar” (no pun intended). However, since that time Lockheed ballooned into a massive “too big to fail” defense contractor which delivers costly and poorly performing aircraft.

    Musk’s fantasies about colonizing Mars and selling seats on orbital space flights proved a very effective cover for the corporation’s core military applications. Moreover, Space-X’s status as a private corporation allows it to defray some of the research and development costs through genuine commercial activities. Yet one has to wonder whether SpaceX success would have been as spectacular if it weren’t for privileged access to government facilities. SpaceX has been able to piggy-back on the massive US government investment in space launch facilities. It is able to operate out of not only Cape Canaveral and the Kennedy Space Center, but even from the Vandenberg Air Force Base. The speed with which SpaceX was able to develop, test, and deploy several different new rocket engine design of the Kestrel, Merlin, Raptor, and Draco families also may be due to privileged access to technologies developed for NASA and military space programs.

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    Even though SpaceX was founded in 2002, it won a $100 million USAF space launch contract in 2005 and the NASA Commercial Orbital Transportation Services (COTS) contract in 2006, even though the first orbital mission of the Falcon I rocket would not take place until 2008. USAF awarded another $1 billion contract to SpaceX in early 2008, even before the first Falcon I flight. SpaceX has become the de-facto research and development branch of NASA when it comes to manned spaceflight. The 2014 NASA contract for the Crew Dragon has so far resulted in one successful docking with the International Space Station, though without a crew on board, and was followed by a successful splashdown. The larger Starship reusable heavy manned spacecraft is expected to start flying in the 2020s.

    Competition from United Launch Services and even Boeing notwithstanding, there is little doubt SpaceX is to US manned spaceflight what Boeing is to heavy commercial aircraft and Lockheed-Martin to “fifth-generation” fighters. It has become the primary go-to contractor of such systems for both commercial and military US government applications, with the competitors being maintained in existence with occasional contracts largely as insurance against spectacular failure of SpaceX.

    SpaceX portfolio of reusable space launch vehicles, manned spacecraft, and most recently also satellites means that the company is well positioned to serve as a one-stop shopping center for the newly created branch of the US armed forces. Given the United States’ desire to weaponize space as part of its effort to undermine strategic nuclear deterrence of rival powers, namely the Russian Federation and the People’s Republic of China, there is every reason to expect SpaceX will be a recipient of considerable financial largesse from the USSF.

    Arguably the most intriguing project SpaceX is pursuing is Starlink, a proposed network of over four thousand miniature satellites whose ostensible aim is to provide broadband internet service to the entire planet. However, the interest in Starlink demonstrated by the US military suggests that, once again, this is at the very least a dual-use project. Articles discussing the military’s interest in Starlink cite the possibility of it becoming the replacement for the aging J-STARS airborne ground target acquisition radars, suggesting these satellites’ emissions can be used to track moving land objects.. If that is indeed the case, they could also serve the role of anti-ballistic missile warning satellites, and even be used to track stealth aircraft, since the constellation of satellites would function as a massive distributed multi-static radar array.

    The mad pace of SpaceX has not been without mishaps. The Crew Dragon, in particular, suffered a number of embarrassing failures, and it may yet be that the corner-cutting hell-for-leather approach the corporation may yet lead to disaster when applied to the considerably more demanding problem of manned spaceflight. Other private entrepreneurs, such as Burt Rutan’s Scaled Composites and Richard Branson’s Virgin Galactic, either suffered fatal accidents that greatly delayed their respective programs or prompted their shut-down. G_7 SpaceX, however, differs from them in that its main customer is the US government that is greatly interested in having the USSF dominate the Earth’s orbit in the same way as the USN dominates the global ocean by establishing large-scale permanent presence of US military personnel in space. The US government has gambled SpaceX will deliver products necessary for such domination. Whether it can do that still remains to be seen.


    Tyler Durden

    Sat, 05/02/2020 – 19:40

  • Ex-Green Beret Was Behind Failed Attempt At 'Armed Invasion' Of Venezuela Funded By US Billionaires
    Ex-Green Beret Was Behind Failed Attempt At ‘Armed Invasion’ Of Venezuela Funded By US Billionaires

    As we’ve recently observed, Washington’s push to oust Maduro is by no means over, even if seemingly less intensified as well and central to media coverage. Currently for example, there’s some level of build-up of US naval ships in the Caribbean ordered by the administration off Venezuela’s coast for what the White House had described early last month as “counter-narcotics operations”.

    And now the Associated Press has unearthed the stunning details of a prior failed coup attempt that seem straight out of a Hollywood script, given it involved a plot centered on about 300 “heavily armed volunteers” who unsuccessfully tried to topple Nicolas Maduro in a “private coup” allegedly funded by US billionaires.

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    Former Green Beret Jordan Goudreau (center). Image via Silvercorp USA/Instagram/Daily Mail.

    The American overseer of the whole operation was a former Green Beret who ran secret training camps in neighboring Colombia, with the aim to infiltrate the group into Venezuela in order to fuel momentum for a broader ‘armed popular uprising’ à la covert CIA-style Syria regime change ops. 

    The details are as follows according to the AP:

    The plan was simple, but perilous. Some 300 heavily armed volunteers would sneak into Venezuela from the northern tip of South America. Along the way, they would raid military bases in the socialist country and ignite a popular rebellion that would end in President Nicolás Maduro’s arrest.

    What could go wrong? As it turns out, pretty much everything.

    The ringleader of the plot is now jailed in the U.S. on narcotics charges. Authorities in the U.S. and Colombia are asking questions about the role of his muscular American adviser, a former Green Beret. And dozens of desperate combatants who flocked to secret training camps in Colombia said they have been left to fend for themselves amid the coronavirus pandemic.

    And like other more recent disastrous failed plots to oust the socialist strongman in Caracas, such as last year’s short-lived rebellion a small group of Juan Guaido loyal officers, AP reports the “The failed attempt to start an uprising collapsed under the collective weight of skimpy planning, feuding among opposition politicians and a poorly trained force that stood little chance of beating the Venezuelan military.”

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    After leaving the Army in 2016, Goudreau worked as a private security contractor in Puerto Rico and set up Silvercorp USA in 2018. Image via SilvercorpsUSA/Daily Mail.

    It’s unclear the extent to which it had the official backing or coordination with US intelligence, or the degree to which it was an entirely private, ‘rogue’ undertaking, though Venezuelan state media has slammed the newly emerged plot as another failed CIA coup attempt.

    Though at times while pitching and discussing his plan, ex-Green Beret Goudrea — who in 2018 established his private security firm Silvercorp USA — had contact with individuals linked to President Trump (such as a veteran personal bodyguard of Trump’s) as well as a who’s who of shady defected Venezuelan military officers, the AP report claims that any Washington officials or people of influence who caught a whiff of his bizarre plan rejected it and distanced themselves from it.

    lt all began, according to the AP, after April 2019 with what’s colorfully described as a “Star Wars summit of anti-Maduro goofballs”. The report details:

    Planning for the incursion began after an April 30, 2019, barracks revolt by a cadre of soldiers who swore loyalty to Maduro’s would-be replacement, Juan Guaidó, the opposition leader recognized by the U.S. and some 60 other nations as Venezuela’s rightful leader. Contrary to U.S. expectations at the time, key Maduro aides never joined with the opposition and the government quickly quashed the uprising.

    A few weeks later, some soldiers and politicians involved in the failed rebellion retreated to the JW Marriott in Bogota, Colombia. The hotel was a center of intrigue among Venezuelan exiles. For this occasion, conference rooms were reserved for what one participant described as the “Star Wars summit of anti-Maduro goofballs” — military deserters accused of drug trafficking, shady financiers and former Maduro officials seeking redemption.

    Among those angling in the open lobby was Jordan Goudreau, an American citizen and three-time Bronze Star recipient for bravery in Iraq and Afghanistan, where he served as a medic in U.S. Army special forces, according to five people who met with the former soldier.

    Those he interacted with in the U.S. and Colombia described him in interviews alternately as a freedom-loving patriot, a mercenary and a gifted warrior scarred by battle and in way over his head.

    The 43-year old Goudreau soon landed a spot helping to organize security for the February 2019 controversial ‘Live Aid freedom-type’ opposition supporting concert put on by British billionaire Richard Branson, held on the Venezuelan-Colombian border.

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    British billionaire Richard Branson on the Venezuelan-Colombian border at his concern in support of opposition leader Juan Guaido, via Getty Images/Daily Mail.

    Goudreau had later written of the event: “Controlling chaos on the Venezuela border where a dictator looks on with apprehension,” according to an Instagram post showing him working the concert, which attempted to gem up popular support for ousting Maduro.

    The invasion plans involving 300 trained and armed rebel soldiers hinged on Goudreau working closely with a ringleader of the Venezuelan military deserters, Cliver Alcalá, previously a retired major general in Venezuela’s army, as AP continues:

    Goudreau told Alcalá his company could prepare the men for battle, according to the three sources. The two sides discussed weapons and equipment for the volunteer army, with Goudreau estimating a budget of around $1.5 million for a rapid strike operation.

    Goudreau told participants at the meeting that he had high-level contacts in the Trump administration who could assist the effort, although he offered few details, the three people said. Over time, many of the people involved in the plan to overthrow Maduro would come to doubt his word.

    From the outset, the audacious plan split an opposition coalition already sharply divided by egos and strategy. There were concerns that Alcalá, with a murky past and ties to the regime through a brother who was Maduro’s ambassador to Iran, couldn’t be trusted. Others worried about going behind the backs of their Colombian allies and the U.S. government.

    However, training camps along the border appeared spartan and ill-prepared, with recruits sleeping in barren conditions with lack of enough food and weaponry.

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    Goudreau marketing himself as a slick head of a multi-national contractor firm, via SilvercorpUSA/Daily Mail.

    But documented evidence shows plans for major weapons shipments, some of which reportedly did arrive and were later recovered inside Venezuela’s borders by Maduro’s military: 

    The volunteers also shared with Mattos a three-page document listing supplies needed for a three-week operation, which he provided to AP. Items included 320 M4 assault rifles, an anti-tank rocket launcher, Zodiac boats, $1 million in cash and state-of-the-art night vision goggles. The document’s metadata indicates it was created by Goudreau on June 16.

    “Unfortunately, there’s a lot of cowboys in this business who try to peddle their military credentials into a big pay day,” said Mattos.

    The CIA among other US agencies would deny ever having anything to do with Goudreau and the ultimately failed plan. 

    However, the report emphasizes it had the support of particular American billionaire businessmen. AP describes: 

    When the Colombians checked with their CIA counterparts in Bogota, they were told that the former Green Beret was never an agent. Alcalá was then told by his hosts to stop talking about an invasion or face expulsion, the former Colombian official said.

    It’s unclear where Alcalá and Goudreau got their backing, and whatever money was collected for the initiative appears to have been meager. One person who allegedly promised support was Roen Kraft, an eccentric descendant of the cheese-making family who — along with former Trump bodyguard Schiller — was among those meeting with opposition envoys in Miami and Washington.

    At some point, Kraft started raising money among his own circle of fellow trust-fund friends for what he described as a “private coup” to be carried out by Silvercorp, according to two businessmen whom he asked for money.

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    Getty images

    The ragtag poorly planned ‘invasion’ was thwarted by the Venezuelan military essentially at the border from the start:

    The plot quickly crumbled in early March when one of the volunteer combatants was arrested after sneaking across the border into Venezuela from Colombia.

    Shortly after, Colombian police stopped a truck transporting a cache of brand new weapons and tactical equipment worth around $150,000, including spotting scopes, night vision goggles, two-way radios and 26 American-made assault rifles with the serial numbers rubbed off. Fifteen brown-colored helmets were manufactured by High-End Defense Solutions, a Miami-based military equipment vendor owned by a Venezuelan immigrant family.

    Currently, the main organizers, including Alcalá and Goudreau himself, are in prison. The ex-Green Beret is now in US federal custody reportedly on narcotic charges, but the details remain unclear. 


    Tyler Durden

    Sat, 05/02/2020 – 19:15

  • We Need to Shut Them Down…
    We Need to Shut Them Down…

    Authored by Robert Wright via The American Institute for Economic Research,

    We need to shut them down… Governments that is.

    At least the ones that cannot pay their bills because of unnecessary economic lockdown orders.

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    I have tried just about everything in these pages to induce politicians to see that they are pushing the worst policies since at least the New Deal and are not going to get reelected if they continue their lockdown policies, which could end in bloody revolt if the power or another essential system goes out. 

    I’ve also tried to induce Americans to sue for their freedom on both civil and Constitutional grounds. I’ve tried to stir their patriotism, and to shame them into rising above the status of mindless test subjects or medieval peasants. I’ve tried to get “Progressives” to see that they can’t have both Social Security and government health insurance simultaneously without increasing the probability of future fiascos. 

    I have also proffered two separate ways out of this mess, one recently implicitly endorsed by Elon Musk, and another that no self-respecting social scientist could dispute. And I suggested that COVID-19 life insurance would help Americans to face death more like their brave ancestors, or younger selves, did at Woodstock.

    But oh the powers that be, be a mighty whale some doth call Leviathan, with the magical power of creating something out of nothing, or rather, like the Wizard of Oz, appearing to create something out of nothing! So the money doth spew forth from the whale’s blow hole in mighty bursts to assuage and calm those who might wish it ill. And worked so far it has.

    That the beast might spew forth again, some state and local governments complain of pecuniary distress. But to satiate their greed for power and lucre will be our undoing. The best that our ship’s captain, Ishmael Trump, can do right now is to make clear that state and local governments that remain locked down shall never hear “Thar she blows!”

    The penultimate power, before resorting to the harpoon, be the power of the purse, an old expression not so much about money per se as the real resources that money can command. Typically tyrants try to seize resources to strengthen their tyranny. Today, we are faced with tyrants who are deliberately destroying resources despite ample evidence from Sweden and the five free states that they need not do so to successfully slow the spread of the novel coronavirus.

    In fact, as I predicted, the New York Times-Columbia “we are all going to get COVID and die” model has been way off, even in the five free states. South Dakota’s cases and deaths, for example, are about 7 percent of those predicted and some counties expected to be overrun by now haven’t had any reported cases, most of which have occurred in Minnehaha and Lincoln counties, which share parts of Sioux Falls, the state’s eastern metropolis of 190,000. A big hunk of those cases stemmed from the infamous but super essential Smithfield pork processing plant.

    I do not have a ready explanation for why places that imposed less extreme mandatory restrictions have fared about as well on “flattening the curve” as those that have locked down. It could be self-selection but Stockholm and Omaha are real cities, not one stop sign hamlets, and even there infections and deaths have not run rampant. 

    Something like the Peltzman Effect could be at play, meaning that people in free areas take fewer unnecessary risks because they know that they may be interacting with infected people while the poor souls in locked down areas assume, often wrongly, that they can crowd into a Walmart because everybody is on lock down and the government is “doing something,” even if that something is utterly irrational, like keeping beaches open while closing beach parking lots. That bit of brilliance had Floridians parking in the lots of shuttered businesses across A1A and then congregating at the few crosswalks!

    In fact, in retrospect, a 99 percent 3-week shelter-in-place for everyone (except COVID-19 HCPs and first responders) for any reason except dire emergency (and I don’t mean the dog needing to defecate) would have been preferable to what has evolved. A simple stay law deferring all debts for three weeks would have been far preferable to seemingly endless bailouts. 

    That approach would have been unconstitutional too, and people would have died, but America would have been rid of COVID-19 by early April and thereafter could have concentrated on border controls and testing/tracing a la South Korea for any new outbreaks. The economy would have experienced a shock but one that it would already be rebounding from because of the certainty of the policy. That “nuclear” option is now off the table as we are too weak to suffer such a shock now.

    For whatever reason, many governments persist in destroying resources and fundamental liberties on the basis of a debunked epidemiological model.

    The national government should actively intercede, as it did to protect Americans’ rights during the Civil War and Civil Rights Movement, neither of which were very civil. But even if it doesn’t want to interfere with states’ rights today, under no circumstances should it FUND their oppression.

    Verily, I believe any attempt to do so will lead to a tax revolt, probably of the quiet variety at first.

    There is just no way Americans in the free states are going to fund the continued subjugation of their fellow Americans in California, Michigan, and elsewhere, which have essentially been invaded and occupied by their own governments. 

    But what then shall the poor state and municipal governments do? Obviously, they need to lift most economic restrictions so that taxes again begin to flow in. And they also need to cut their “nonessential” workers, which is essentially most of them. In the short term anyway, we need courts and police officers and other first responders. (Ultimately, we do not need any of them but this is no time for novelty, even if we have rich comparative and historical examples from which to draw.) But teachers, recorders, prothonotaries, and all sorts of other bureaucrats need to be furloughed immediately. (If you think that many will then join the ranks of protesters, you’re starting to understand the power of the purse! They can arrest some protestors, but not all of them, especially with their budgets so tight.)

    There is no reason to exclude national government employees from furloughs either. The bailouts and other forms of hush money already paid out has to be repaid somehow, through higher taxes or lower expenditures. Why do we need parts of the SEC if no corporations are issuing securities? What good is the EPA if factories are shuttered? The USDA if meat processors are closed? What does the Department of Education do even in normal times? Surely most of the Department of the Interior can be let go. 

    Is furloughing 75 percent of government workers a draconian suggestion? Absolutely, but why shouldn’t government employees suffer along with the rest of us? You can’t expect civvies to bear all the burden of flattening an already pretty flat curve indefinitely. Plus, unlike the private sector, which is all “essential” or it wouldn’t exist, we know from budget battle government shutdowns that much of the national government is nonessential. Life goes on, and some think improves, without it. 

    The nonpartisan Congressional Budget Office (CBO) estimated the deadweight loss of the 35-day partial federal government shutdown in early 2019 at only $3 billion. We will be lucky to get out of the current mess for $3 trillion in deadweight losses.

    Governments messed up by botching testing, then not stopping the spread of the virus when it was still manageable, then did so again by shutting down too much of the economy for too long to cover their incompetence, and now they want to be rewarded with continued nonessential employment, and the forced redistribution of wealth from all Americans to Constitution-smashing state governments? Where is the last straw?


    Tyler Durden

    Sat, 05/02/2020 – 18:50

  • Andy Hall Says "Unlikely" We See Negative WTI Again, But Doubtful On "V-Shaped" Recovery In Oil
    Andy Hall Says “Unlikely” We See Negative WTI Again, But Doubtful On “V-Shaped” Recovery In Oil

    Longtime oil investor Andy Hall says he thinks it is “unlikely” that we ever wind up seeing negative WTI pricing again, calling the move in the commodity “pretty shocking” in a Bloomberg TV interview on Friday. 

    The main question, he contends, is whether or not the industry is going to see a “V” shape recovery from here. And he doesn’t seem to be confident that it’s going to be anytime soon.

    “How quickly are people going to go back to their prime behavior, I mean, maybe in some respects the answer is never,” Hall said, talking about a potential recovery. Instead, Hall says he sees a major recalibration of demand for oil globally.

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    “There’s a thought now with production being shut in, rig counts falling, investment in future supply being reduced, that we’re potentially setting ourselves up for a potential future supply shock, but all this production is not going away, it’s all potentially there, and can be brought back fairly rapidly,” he continued.

    He then urged investors away from oil: “Personally, I think there are better ways to invest one’s money than trying to predict these chaotic movements.”

    Recall, on April 20, the May WTI contract made history after it settled at negative $37.63. On the same day, the June contract finished the day down 18%.

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    We took the time on April 20 to explain why we thought the negative oil prices had happened in the first place.

    “This happens when a physical futures contract find no buyers close to or at expiry,” we wrote. 

    A physical contract such as the NYMEX WTI has a delivery point at Cushing, OK, & date, in this occurrence May.  So people who hold the contract at the end of the trading window have to take physical delivery of the oil they bought on the futures market.  This is very rare.

    It means that in the last few days of the futures trading cycle, (which is tomorrow for this one) speculative or paper futures positions start rolling over to the next contract. This is normally a pretty undramatic affair.

    What is happening today is trades or speculators who had bought the contract are finding themselves unable to resell it, and have no storage booked to get delivered the crude in Cushing, OK, where the delivery is specified in the contract.

    This means that all the storage in Cushing is booked, and there is no price they can pay to store it, or they are totally inexperienced in this game and are caught holding a contract they did not understand the full physical aspect of as the time clock expires.

    You can watch Hall’s interview with Bloomberg here:


    Tyler Durden

    Sat, 05/02/2020 – 18:25

  • What Caused The New York Vs. London Gold Price Spread And Why It Persists
    What Caused The New York Vs. London Gold Price Spread And Why It Persists

    Written by Jan Nieuwenhuijs for Voima Insight,

    The spread between the New York futures and London spot gold price was initially caused by logistics and manufacturing constraints, and likely persists because of credit restrictions.

    If you read into the economics of commodities, much of it is about geography. The Corona crisis and its effects on global aviation has disrupted large shipments of gold, and created price discrepancies geographically. Normally, bullion is transported in passenger planes, but as those have stopped flying, there is more friction in bullion logistics. Partially, this created the spread between the futures gold price in New York and the London spot price. In my view, the spread persists because arbitragers don’t have enough access to funding, and demand in New York remains elevated.

    How it Started

    On March 14, 2020, President Trump started curbing passenger flights between Europe and the US. Including those from Switzerland, where the four largest gold refineries of the world are located. This didn’t happen in isolation. Passenger flights all over the world were being curbed. One of the most important airports in London—home of the largest gold spot market by trading volume—is Heathrow. Since March 10, 2020, arrivals at Heathrow started declining from 600 flights per day, to 250 two weeks later.

    On March 23, 2020, three refineries in Switzerland where temporarily shut down due to the coronavirus. Reuters reported:

    Three of the world’s largest gold refineries said on Monday they had suspended production in Switzerland for at least a week after local authorities ordered the closure of non-essential industry to curtail the spread of the coronavirus.

    The refineries – Valcambi, Argor-Heraeus and PAMP – are in the Swiss canton of Ticino bordering Italy, where the virus has killed more than 5,000 people in Europe’s worst outbreak.

    Normally, airlines transporting gold and refineries manufacturing small bars from big bars, or vice versa, keep the price of gold products across the globe in sync. If supply and demand for gold in one region is out of whack relative to another, arbitragers step in (buy low, sell high). But with planes not flying and refinery capacity crippled, everything changed.

    Making delivery at the New York futures market, the COMEX, wasn’t that simple anymore. As we all know, shorts and longs on the COMEX are mostly naked. They either don’t have the metal to make delivery (shorts), or don’t have the money to take delivery (longs). In normal circumstances this isn’t a problem because neither shorts or longs are interested in physical delivery. They trade futures to hedge themselves or speculate. However, when sourcing small bars from Switzerland—only 100-ounce and kilobars are eligible for delivery of the most commonly traded COMEX futures contract—became “more difficult,” the shorts became nervous.

    Likely, after the refineries closed, shorts wanted to close their positions as soon as possible to avoid making delivery. Closing a short position is done by buying long futures to offset one’s position. These trades were driving up the price in New York, and the spread was born.

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    The white line is London spot, blue is New York futures. Normally, the spread is close to $1.5 dollars; on March 25, 2020, the spread was $60 dollars per troy ounce.

    Usually, such a spread is closed by arbitragers (often banks). They buy spot (London) and sell futures (New York) until the gap is closed. If necessary, these arbitragers hold their position until maturity of the futures contracts, and make delivery to lock in their profit. But because flights were cancelled and refineries were shut down, the “arb” was risky and the spread didn’t close.

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    Bullion Banks Losing Money Through EFPs

    Bullion banks often have a long spot position in London and are short futures on the COMEX. When a refinery in Switzerland, for example, casts big bars (400-ounce) and sells them to a bullion bank in London, the bank hedges itself on the COMEX. This makes the bank long spot and short futures.

    “Exchange For Physical” (EFP) is an OTC swap. On the COMEX website it reads:

    Exchange For Physical (EFP) allows traders to switch Gold futures positions to and from physical [spot], unallocated accounts. Quoted as dollar basis, relative the current futures prices, EFP is a key component in pricing OTC spot gold.

    (The London Bullion Market is an OTC market.)

    An EFP is usually a swap between a futures and a spot position. In banking jargon the word “EFP” also refers to, (i) having a position in both markets, and (ii) the spread in general (because the price of the EFP is equal to the difference in price between New York futures and London spot). A bullion bank that is “short EFP” is long spot and short futures.

    As mentioned, banks are most of the time short EFP. When the spread widened their short EFP starting bleeding. To avoid further losses, some banks “were forced to cover,” which added fuel to the fire. (It can also be the banks themselves started the spread to widen.) Many banks suffered severe losses.

    Currently, most refineries in Switzerland have reopened. So, why does the spread persist? After all, arbitragers can hire planes to transport gold to wherever. On April 30, 2020, the spread was still $15 dollars per troy ounce.

    Because I couldn’t figure this out myself, I asked John Reade, Chief Market Strategist of the World Gold Council, and Ole Hansen, Head of Commodity Strategy at Saxo Bank, for their views.

    Reade wrote me:

    I guess for two reasons: firstly, banks and traders probably still have large EFP positions that they haven’t been able to cover. And secondly, I doubt that risk officers and banks are prepared to allow large EFP positions to be run, so the usual arbitragers of this market cannot add to their positions, flattening the spread.

    Which is in line with what Hansen wrote me:

    While COMEX has now allowed the delivery of 400oz bars (the most popular bar size in London) and raised spot positions limits the problem has not gone away. This means that the mechanism that should balance the gold market still isn’t functioning correctly despite improving underlying physical conditions.

    Market makers [banks] have suffered major losses last month and as they tend to natural short the EFP (long OTC, short futures) the risk appetite and ability to drive it back to neutral has for now been disrupted.

    Banks lost so much money, they are cautious not to lose more. They don’t access funds to close the spread.

    Conclusion

    Generally, just the threat of delivery keeps markets in line as well. Any trader that sees an arbitrage opportunity can take position without the intention of making/taking delivery, in the knowledge that New York futures and London spot will converge. Now this certainty doesn’t prevail, traders are cautious. If they take positions but the spread widens, they lose.

    Another reason why the spread can persist, is because of strong demand in New York. Speculators that reckon the price of gold will go up will buy long futures, increasing the spread. Normally, this type of demand is smoothly translated into the spot market by arbitragers without increasing the spread. But not now.

    In a nutshell, I think that logistics and credit restrictions prevent the spread to close. However, if anyone has a better analysis please comment below.

    Addendum

    It can be, as John Reade wrote me, “banks and traders probably still have large EFP positions that they haven’t been able to cover.” I noticed on Nick Laird’s website Goldchartrus.com that EFP volume cleared through CME’s ClearPort is decreasing since early March, to levels not seen in a long time.

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    Perhaps this is a reflection of a market that is slowly trying to heal itself. Perhaps when all losses have been crystalized, banks, or other financial entities with sufficient firepower to hire planes etc., will close the spread.

    Another possibility is that when the new COMEX futures contract—that can be delivered in 400-ounce bars—becomes active, the spread closes. At the time of writing, the open interest of this contract is virtually zero. Time will tell.


    Tyler Durden

    Sat, 05/02/2020 – 18:00

  • "The Whole Thing's A Farce" – 'Conspiracy Theories' Thrive As Texans Flock Back To Shopping Malls
    “The Whole Thing’s A Farce” – ‘Conspiracy Theories’ Thrive As Texans Flock Back To Shopping Malls

    Texas is the largest US state to allow a substantial number of retailers and other businesses to reopen for the first time on Friday, even as many of the state’s Democratic big-city mayors urged residents and business owners to ignore the governor’s advice.

    To try and get a sense of how the beating heart of Texas retail – the Barton Creek Square in Austin – was faring during its first day back in business, the dogged reporters at the Texas Tribune ventured out to the capital city’s biggest mall to commiserate with shoppers bold enough to risk infection over a pair of sneakers, as the TT piece put it.

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    What the reporters found was hardly surprising: stores barely managing to meet the 25% max-capacity threshold set by the governor, a threshold at which most businesses simply cannot operate profitably. As a result, only a handful of Barton Creek’s smaller stores were open; all of the mall’s anchor tenants – department stores that have been particularly hard hit by the downturn – remained closed.

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    By the time the mall opened at 11am local time yesterday, lines of shoppers had formed, with everyone standing six feet apart, and lines forming outside stores allowing only a handful of shoppers to enter at a time.

    Most of the patrons were there to shop, it seemed – little things mostly; shoes, swimsuits etc. At least one told the TT that she was just out to get some exercise. They ranged from young couples to older singletons.

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    No temperature-checkers were present when the doors opened; no masks, nor sanitizing wipes, were handed out. Shoppers were basically left to look after themselves

    John Whitton and Marina Oneill stood by their car outside wearing face masks – Oneill’s a DIY mask made by her roommate from a bra cup – waiting to buy a swimsuit (for Oneill) and shoes (for Whitton).

    “I think I’m going to buy a pair of skate shoes and take it back to 2002,” Whitton said.

    One thing that caught our attention: the surprising number of individuals interviewed by the TT to expressed doubt about the virus (one called the outbreak “a farce”) or endorsed some other conspiratorially-oriented view.

    By 10:58, a line had formed outside an entrance adjacent to the Cheesecake Factory. Patrons, many wearing masks, kept a 6-foot distance from one another, aided by blue tape pressed onto the concrete to direct them where to stand.

    The line included an avid mall-walker hoping to exercise away from the Texas heat, a mother whose young kids — each no older than 10 — all wore face masks and an Austin-area teacher convinced the coronavirus was cooked up by President Donald Trump, Russia’s President Vladimir Putin and North Korean leader Kim Jong-un.

    Though most customers wore masks, as mandated by law, only a handful of patrons wore gloves.

    Shoppers were antsy. Resigned, too.

    “I think it’s all a big farce. I believe there’s a virus, but we have bird flu and pneumonia and I’ve had several shots,” said Charlene Franz, 65, who came to the mall to fix the cracked screen on her Cricket cellphone and return a broken pair of sunglasses purchased from Loft.

    Friday was the first day that shopping malls, restaurants, retail outlets and movie theaters were allowed to reopen in Texas after being closed since the beginning of April. According to Gov Abbot’s order, stores can open, but must limit occupancy to 25% of capacity.

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    As several mall employees eagerly told the TT (speaking anonymously for fear of losing their jobs), the governor’s order was actually making it harder on most small businesses, as they’re essentially being forced to operate at a loss, and employees are being called back in to work, despite the fact that both the business and the employees were probably better served with the ‘PPP’ loan-to-grant scheme and of course the beefed-up unemployment checks that, combined with the stimulus, have left many hourly workers with more in their pocket than they would otherwise have.

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    It’s just something to think about: Why would anybody want to push for a reopening if it would only seal the fate of thousands of small businesses?

    Some employees returned to work reluctantly. A 42-year-old who helps operate two phone kiosks at Barton Creek said there’s “no use” reopening the mall at only a 25% occupancy.

    “None of the businesses can survive on 25% business,” said the employee, who spoke under the condition of anonymity because he wasn’t licensed by the mall to talk to the press.

    “All the major stores are closed. We get business when people come to the major stores, and then it all flows and comes to the kiosk,” he said. “We do want to get back to work, but the governor should’ve waited until we were at 50-75% so we have a chance to survive or not open at all.”

    Remember, if small businesses don’t make enough money after reopening, they’re going to need to shut down again – but this time, it might be forever.

    Yanick Almeida, 23, who works as a jeweler at one of the mall’s kiosks, said the business usually takes in several thousand dollars on a typical Friday.

    “That was before corona,” he said. Around noon, he hadn’t made a single sale.

    “If we don’t make any money, we’re going to have to shut down,” he said. “But I don’t think we’re going to go anywhere because we’ve been shut down for about two months, and so far we’re still good.”

    It’s worth wondering: Who benefits from the wholesale destruction of small business (or, in this case, the death of American malls, and the implosion of any securities backed by their debt)?

    Who benefits?


    Tyler Durden

    Sat, 05/02/2020 – 17:35

  • Fauci Links & Virus-Lab Leaks: Newsweek Report Raises Urgent, Important Questions
    Fauci Links & Virus-Lab Leaks: Newsweek Report Raises Urgent, Important Questions

    Via PeakProsperity.com,

    One of the more acutely-asked questions since the covid-19 pandemic broke out has been: Is the virus man-made?

    Debate on the matter has been wild and furious. After much investigation, Chris is now weighing in on the heels of an explosive Newsweek report.

    Newsweek reveals that as recently as last year, the US funded scientists at the Wuhan Institute of Virology focused on conducting ‘gain of function’ research on bat coronaviruses.

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    The source of that funding?

    The National Institute for Allergy and Infectious Disease, headed by… (drumroll please)… Dr Anthony Fauci, lead medical expert for America’s Covid-19 presidential task force.

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    Now, this doesn’t mean the virus was lab-engineered as a bio-weapon. But it does suggest a naturally-occuring bat virus could have been artificially accelerated along certain vectors.

    Of course, this raises an awfully lot of urgent and important questions:

    So far, Fauci has not commented on the Newsweek report. You can be certain we will be keeping close tabs on developments from here…

    *  *  *

    Don’t forget to get your free download of Peak Prosperity’s book Prosper!. Given its relevance to preparing for any kind of crisis, pandemic or otherwise, Chris and Adam are now making it available to the world for free. To get your own copy, click here.


    Tyler Durden

    Sat, 05/02/2020 – 17:10

  • Here Is Hugh Hendry's 3-Step Plan To Save The World From Financial Collapse
    Here Is Hugh Hendry’s 3-Step Plan To Save The World From Financial Collapse

    It’s official: despite still technically retired in St Barts where he is a “luxury real-estate, mentor, advisor, paddle-surfer” according to his twitter profile, last week’s markets tweetstorm appears to have awoken if not the investing, then at least the analytical “primal urge” in the Scottish investor, who ran the Eclectica macro hedge fund for 15 years until he shuttered it in September 2017 (his farewell letter can be found is here) disgusted with how broken and impossible to navigate capital markets had become as a result of central bank intervention.

    And in case it wasn’t clear that after a three year hiatus Hendry suddenly finds himself having much more to say, late on Friday the macro investor followed up last week’s “inaugural” commentary with another massive tweetstorm (Hugh: it may be easier to just write a blog post or alternatively, send it here and we will post it), spanning hundreds of tweets, discussing – in far more whimsical, if typically Hendrian terms – what is arguably the most important concept: when does money printing become inflationary (i.e., the catalyst that will make David Einhorn’s long-term forecast correct).

    But first, as a reminder last Friday, Hugh Hendry reverted to his investor roots, discussing the fate of gold and the dollar in the helicopter money regime, what it would take for the S&P to hit 10,000, whether the entire VIX regime is now inverted due to central bank backstops, and asks the “two key questions”: are we transcending from a bull market in fear to a bull market in WTF!? And will QE infinity differ from its previous vintages by driving risk asset volatility levels higher??

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    Hendry also touches on an old favorite topic, namely hyperinflation, a thesis which he thinks “needs stock prices to fall further and vol to rise in the conventional manner.”  But his most topical observation is what are the core criteria that will allow MMT – i.e., that fusion of the Fed and Treasury known as “helicopter money”…

    you can print as many dollars as you damn well please, as long as the yield curve doesn’t steepen and the dollar doesn’t rally precipitously…you’re good to go and MMT is dope.

    … as the alternative is game over. As usual, his stream of consciousness answers, right or wrong, were fascinating and could be read in their entirety here.

    Fast forward one week later when we got “part two” from the Scottish investor – perhaps best known for his 2010 full-frontal assault on Jeffrey Sachs and the immortal words “I recommend you panic“, when Hendry explained accurately why the current central planning takeover would lead to much more pain in the future…

    “Let’s purge this system of its rottenness. Let’s take on a recession. It’s going to be tough, people are gonna lose their jobs. They are going to lose their jobs anyway. We can spread this over 20 years, or we can get rid of it over 3 years.

    … something which was clearly correct now that we are 10 years through Hendry’s 20 year forecast, and as we can observe in real time, to keep the system from imploding due to the accumulated “rottenness”, the Fed was forced to inject and backstop a record $12 trillion in just a few short weeks.

    Below is the full stream of twitter consciousness which as expected is just as disjointed, as it is insightful, and every bit the Hugh Hendry we had grown to admire (and periodically criticize, especially after his odd “conversion” phase) over the past decade.

    In it, Hendry – and this is our best attempt at actually grasping what he is trying to say – proposes a 3 Step mechanism for fixing the broken world, one which revolves around the following i) undoing capital limitations that would enable banks to lend much more aggressively while phasing away concerns about “moral hazard” and the great bank bailout of 2008; ii) end negative rates and force positive rates across the globe; and iii) “reintroduce central bank Window Guidance” giving banks a quota for their loan book and a targeted growth rate.

    Now, we don’t necessarily agree with Hendry’s proposal – after all there is now so much debt in the world that artificially hiking rates far above r-star (which according to Deutsche Bank is now -1% in the US so one can imagine what it is in Europe and Japan) would lead to an immediate and catastrophic collapse in bond prices. On the other hand with central banks now monetizing virtually all securities, and bond markets no longer signaling anything, one would not have an incentive to sell bonds even if yields were to spike – since central banks would backstop everything. And so, in a perverted way Hendry’s proposal may actually work.

    On the other hand, and we will discuss this later, there also needs to be loan demand instead of just supply. And the fact that the government’s PPP program is not based on loans at all but forgiveable grants, is precisely what there has been over $600BN in demand for the Paycheck Protection Program. If these funding facilities were structured as plain vanillla loans at slightly punitive rates (to invoke Bagehot), there would be virtually no demand and none of the money the government and Fed had created would flow through to the economy.

    Long story, short, for there to be loan demand in the future, loans may all have to be structured as grants, which is possible for a government that can just print money but is impossible for banks which obviously can only take so many loan losses.

    In any case, the reality is that the current status quo is also completely unsustainable – as the recent bailout of everything has shown – and so it may be that trying anything would be better than merely enforcing the same broken policies that have led the entire world to the edge of hyper(deflationary/inflationary) collapse.

    And with that, without further ado, here is Hugh Hendry’s 3-step plan to save the world, as tweeted late on a Friday night..

    We’ve never seen the phenomenon of simultaneously higher equity prices and a shift higher in the VIX curve without a state of hyperinflation; except at the start of Abenomics for 1-2 months in 2012 and maybe now…

    But it’s a HUGE ask to imagine that April’s moves in VIX and SPX, allied to promises of further gigantic central bank printing, will prove a precursor to runaway inflation. But heck, let’s give it a go…

    Crudely put, it seems more likely that this 2020 helicopter money is simply filling the great landfill dump left behind by the furloughing of the global labour market this year; that the CBs have replaced the normal monetisation that would emanate from an active labour force.

    What might deliver a tipping point – where bank printing outweighs every other factor and we experience runaway prices? Clue: the answer is always in what I don’t write.

    I’m going to attempt this thought exercise tonight

    But first, let’s look at the abysmal chart of French bank lending

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    If you have the 50y data series, please share. But it kind of looks like a GOLD/SPX chart from the 1990s. Right? Hey to a man with a hammer, everything looks like a nail

    Loans were expanding @ < 2pc p.a. before the pandemic. Looking forward, I think they are going to take off; or rather, this is an absolute requisite if we are to stave of the march to serfdom and prevent political extremists attaining the highest offices of government

    But having lost so much precious time dithering, we may have to experience runaway prices as the quid pro quo. Hey! Shit happens. I really can’t imagine a scenario where a Hank Reardon saves the day. Can You?

    Ok hold that thought! Cause first we got to remember that before this calamity, Macron, decided to shake up France’s overly generous state pension system. Quelle bêtise.

    Imagine, we’ve had a 50y cycle that allocated more and more of the economic spoils to creditors and a FRENCH President just announced an attack on the proletariat. Hold on! Wait a minute? It’s like handing the DJ a cassette player…

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    But then this is the country that elected the ultra-leftie Mitterrand as President of the First Republique and he invited the Communist Party to join his government at the beginning of this cycle in 1981. I mean 1931 and the guy is a forward-thinking master of the universe but 1981 with the proletariat in it’s ascendancy and downtrodden creditors having retreated to the ghettos? It’s like a bully who can only find his courage in a crowd.

    As contrarian signals go the French are a perfect indicator of where we are in the 50y cycle of wealth redistribution. The last adopter surely must always be the President of the Republique. Right?  After 50y of this we all know that you only fight when the economy is set to boom.

    The global dream of an endless arc of rising economic prosperity is in jeopardy and this is no longer happening. Since the GFC, our Wesley Mouch type policymakers have consistently “mouched” their way through the manual of how to remedy an economy made vulnerable from a shock

    It didn’t have to be like this.

    The valedictory sound of “mission complete” first sounded along this bureaucratic blunder-path to radicalism when, and for good reason, they bought private debts at way above face value through regimes such as TARP I & II

    Normally a sure-fire thing way to restore vitality to a devastated post-shock economy. Helpful. Relevant. On point. Courageous. I loved this!

    But no bank-boom; no huge lift in GDP.

    Again, and for good, sound reasons, they declared, “mission complete”, when they really went for it and  loaded up on radicalism and opted to return huge flows of money to the private sector. Subterfuge for sure but QE enabled the banks to make significant profits – the classic market cornering -where your independent, some might say lawless, central bank buys with the objective of creating a Hunt Brothers’ Bubble in Treasuries where private banks invest heavily.

    Controversial to many for sure but no complaints from me. I give them an A+ for this exemplary move. But bank boom? Explosive GDP growth? Nada…So 2 textbook steps forward but little payback. What gives?

    They have been undone by a collective failure to grasp the principle that GDP growth rates are determined by the momentum, the mojo, the VELOCITY, if you will, that only comes from an expansion of private sector bank balance sheets.

    And hence my deliberate omission from earlier. Changes in money supply equal changes in central bank plus commercial bank assets. But moral hazard busted this equation…

    In the frenzy of fear and recriminations that was 2008-9, centrist parties whimsically determined that as taxpayers were not responsible for the GFC (really?) then they – the State – did not have a mandate to foot the recovery bill. Caution: Ideology Alert!

    As a consequence, it became preordained that all of the rise in the money supply had to come from the expansion in public or central bank balance sheets. A great depression averted but at the cost of economic dynamism. Bash them banks all you want but no loan growth begets no loan growth begets a fossilising economy were GDP can’t grow nowhere near damn fast enough to right ‘em wrongs.

    Japan anyone?

    All the central bank money printing in the world isn’t going to generate runaway prices if private sector banks are not expanding credit!!

    So what has to happen?

    It is not difficult to nudge the economy back into action. Ideology brought us here. Drop the dogma and we recover. Heck there’s even a manual residing somewhere in every government treasury department that explains exactly how to do it. Otherwise, appoint HughHendryOfficial to advise your sovereign Treasury and I promise that my team and I will generate “dynamic” GDP growth. Just tell me the number you desire cause I’m your supplier.

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    Step I: First things first, on the first day of my appointment, I’m going to ditch this moral hazard nonsense and rescind the longest suicide note in economic history a.k.a., Basel III: International Regulatory Framework for Bank Supervision.

    Let me read directly from the macro manual. Rule no.1 clearly stipulates that accounting changes should be introduced to improve bank profitability which will beget more capital strength and more risk appetite; vigorous loan growth will ensue. I scream, you scream, we all need ice-cream! These bozos implemented the reverse!!!

    However, it’s just possible that the legacy of the pandemic a.k.a the phantom menace, may allow scope to reverse this idiotic regulation; let’s hope so.

    Step II, I’m going to reverse negative official interest rates in Europe and Japan. I’m not smart enough to understand everything. But I watch, listen and I try to improve. And those voices in my head keep telling me that those neg rates are counter-productive. How else do you explain the disparate performance of US banks vs. their Japanese and European cousins? Can someone chart and share this please? So I’m gonna raise rates folks; Volker, anybody?

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    Shorn of ideology deflation can be averted.

    But  to return to the future we most likely have to visit the past. To conceive of this, I want you to try the following mental exercise. Think of a glossy Steve Jobs, promo video showcasing not the latest iphone but instead the economic milestones of the last 50 years.

    Volker raising rates to tame inflation, quantitative restriction of the money supply, independent CBs, less powerful unions, liberalisation of the capital account, no unemployment, rising profits, risk taking, entrepreneurship, dynamic economies, the liberation of billions from the tyranny of state planning…

    Done that? OK, now I want you to replay that same movie but only in reverse, and in slow motion, with interest rates being cut to negative, with market rates determined by the public sector, with the loss of CB independence, with quantitative expansions of the money supply. With less and less risk taking and lower rates of prosperity, less technology breakthroughs, less free markets and more government-set prices. An economy where everyone is on the payroll of the State.

    It’s a dirty business but who ya gonna call? If it’s HughHendryOfficial then…

    Step III will see us quietly, and without pomp or ceremony, reintroduce central bank Window Guidance whereby commercial banks will be given a quota for their loan book and a targeted growth rate.

    The Princes of the Yen describes this technique well. The political imperative in Japan in the late 1980s was to stoke a domestic boom to deflect international pressure from the US regarding the Japanese trade surplus. Japan’s commercial banks grew their risk assets by 15pc pa between 1986 and 1989 and everything boomed.

    Normally the circuit breaker is you and me. It’s we who work out the unsustainable nature of a fiat directed bank loan expansion. It is we who see the tower of riskier and riskier loans and its power to generate reflexively even riskier loans and huge unproductive investment.

    Because, You & Me, we see things differently. It is us who head to the exit first and that’s why it’s You & Me who are going to live forever!

    Sorry, I digress, where were we? The ensuing currency crisis. It usually puts a brake on the expansion. However, Japan, with a capital account of more than $200bn, rivalling the firepower of the IMF at the time, had no currency crisis; you want to pick a fight with a monster?

    The hammer when it fell was simply an ideological change by the policymakers. Revolted by “les noveaux riches” and with a titanic battle of egos raging between MoF and the BoJ, policymakers chose to reverse their loan program. And, lacking a bid, risk assets crashed. It wasn’t about super sky high equity valuations. It was simply a change in bureaucratic ideology…damn dogmas.

    Anyway, put me in charge of the ECB and I’ll deliver 3pc GDP growth across the continent by 2023ish; it will be easy. I’ll raise official policy rates, abolish Basel III and by re-introducing window guidance, I can command that European banks expand their balance sheets by 10pc.

    Failure will be punishable by loss of quota. You wanna misbehave?

    Not convinced? I hear you: the macro community are going to see a bozzo like me coming from miles away. Rapid private sector bank lending, riskier and riskier lending, debt fuelled asset purchases, bubbles – the €uro will plummet, and my German paymasters will kick me out.

    Or will they? Is it inevitable that the €uro crashes under this scenario? I don’t think so because the U.S. Treasury has my back. Bitch!

    Remember they promised to stop at nothing to prevent a sharp deflationary rise in the external value of the $. And so, like my brethren at the BoJ, so many years ago, I think I‘ve got job security. Just don’t re-introduce moral-hazard cause I’m the guy who’s gonna take you higher

    I know you think this is fanciful, and for sure I won’t argue, but hear me out just a little longer. I promise I’m nearing the end. Let’s talk about me. Like the film, The Truman Show, I’m an investor living inside my investment. Weird, huh?

    To the un-initiated, my Vol @ the End of the World Trade is to own client financed, one-of-a-kind, real estate on the tiny island of St Barts, funded by €uro matched, fixed, 20-year money at 2 or less percent. Recently my phone has never stopped ringing. It’s my French bank; they called to ask whether I wanted to defer my payments for 6 months? Those friendly officials from the French government are keen to help-out. God bless them…of course, I accepted their generosity.

    Last week, same thing. It transpired that officials from the Treasury had put their heads together and come up with another great idea. They could propose an interest-only 5y loan equivalent to 20pc of my outstanding debt. Is that something I might be interested in? You sure bet!

    The political centre ground is collapsing under a systematic ideological failure to forgive the banks. The malaise of the banking sector is preventing the cyclical propensity of GDP to rebound and deliver prosperity to the many.

    Centrists must resolve their own moral hazard or face extinction. Make Banks Great (again)! Give me a call at hughhendryofficial

    Or we’re destined to remain trapped in the serfdom of perpetual deflation

    Well, since we’ve tried everything else and it has failed, why not give Hendry a try too before making the last leap to full fiat collapse?

     


    Tyler Durden

    Sat, 05/02/2020 – 16:45

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May 02

Today’s News 2nd May 2020

  • Why Didn't The Constitution Stop This?
    Why Didn't The Constitution Stop This?

    Authored by Robert Wright via The American Institute for Economic Research,

    The genius of the U.S. Constitution is that the Framers, especially James Madison and Alexander Hamilton, saw it as a constraint on bad policymaking.

    Given the number of really bad policies that various US governments and officials, from school boards to POTUS, have implemented, especially recently, it is high time to restore weakened or lost Constitutional restraints against arbitrary rule.

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    Five forces threaten Americans with destruction:

    1) nature;

    2) foreign powers;

    3) the national government;

    4) state and local governments;

    5) themselves.

    The threat from 3, 4, and 5 is double-edged, meaning that Americans can be harmed by the actions of those forces as well as by their inaction.

    The national government, for example, can harm Americans by being insufficiently prepared for natural catastrophes and foreign incursions, as with Hurricanes Katrina and Rita and the 9/11 attacks. It can also harm Americans, though, by doing too much, as with the invasion of Iraq and the way-too-long occupation of Afghanistan. (Relying too much on FEMA instead of states or private initiatives may be another example, but less clear cut than the needless wars.)

    The national and state governments are supposed to check each other’s power, so that if one overreaches, the other can thwart it. We usually think about this in terms of “states’ rights” but in fact federalism, as the concept is sometimes called, runs both ways: the states should check the national government when necessary but the national government should also check the power of the states when they overreach, as they sometimes do.

    Advocates of states’ rights often cite the Tenth Amendment, which reads in its entirety “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.” Because the word “expressly” does not occur before “delegated” in the ratified version of the amendment, however, it is among the weakest parts of the Constitution.

    Traditionally, though, the states retained primary control of so-called “police powers,” the powers that form the legal basis for the economic lockdowns that have imprisoned most Americans for over a month now. Books have been written about this stuff so obviously I cannot relate all the details and nuances involved but ultimately they matter little in the present case. The key point is that police powers, national, state, or local, do not provide carte blanche to governments. Specifically, the Constitution constrains state police powers in numerous ways.

    Importantly, courts see Constitutional rights as tradeoffs between conflicting interests. So while the Constitution says that the national and state governments cannot infringe individual speech rights, they can pass laws that make it illegal for an individual, for example, to falsely yell “fire” in a crowded theater. The notion is that the property and natural rights of the theatergoers trump the free speech rights of the liar.

    Similar restrictions apply to the right of assembly. All Americans have the right to assemble with other Americans for any lawful purpose but state police powers, the positive duty of states to protect the physical safety of assemblers and non-assemblers, mean that governments may restrict assemblies through permit systems.

    Similar arguments are made to defend the pistol permit systems common in many states. They are bogus but show how far courts go to balance one person’s rights with those of others. If you believe that gun control laws should be followed because they are laws passed by democratically elected representatives you have missed the point of the Constitution, which, again, is to constrain policymakers, to protect individual Americans from the national and state governments and also other Americans.

    Just because a majority wants some policy doesn’t mean that that policy is a good idea, after all. I imagine at one point in March 2020 a majority of Americans might have thought it a good idea to deport, tax, infect, or maybe even kill Chinese-Americans in order to make “them” pay for what “they” did to “us.” (I don’t want to link to evidence of that … just look at your social media feeds if you need evidence.) That is a typically ugly human reaction to trauma but one that would have been proven empirically wrong as well as morally bankrupt and economically inane (sunk costs). Thankfully, the Constitution remained strong enough to prevent that horror.

    It did not, however, prove strong enough to prevent state governments from taking their police powers too far. They engaged in fancy word play to hide the fact that they acted without a shred of precedent. What they imposed is not a quarantine, which constrains the movement of sick people, nor a cordon sanitaire, which locks people into an afflicted area, nor a protective sequestration, which locks people out of an unafflicted area. Instead, they have implemented partial martial law (military rule essentially) by imprisoning Americans in their own homes without due process of law and stolen their property by shuttering their businesses. (Some recompense has been attempted but of course only bluntly and at a cost to all taxpayers, including those in states that did not shutter most businesses.)

    Remember, just because a state has general police powers doesn’t mean it can do whatever it wants, whenever it wants, simply because its actions are popular, or passed into law, or urged by some scientist. Imagine, for example, if some executive thought everyone ought to drink bleach, crazy as that seems, and actually mandated it. Would you do it? (Hint: Don’t do it! Even if some guy in a suit or lab coat tells you that you must.) What if some leader believed that the coronavirus is spread primarily by clothing and mandated that we all go naked in public, except for our masks and gloves of course? Or if one thought an EMP (electromagnetic pulse) would solve the problem (and destroy all computers in the process)?

    Any promulgation that violates the Constitution, in any way, shape, or form, is null and void. A federal judge has the authority to declare any state law or executive order unconstitutional and demand that it be revoked. Judges generally give governments broad leeway to protect “public health” but the policies must be rational and they must weigh the rights of all involved parties. Historically, many government epidemic responses never got litigated because the crises passed before suits could be brought and because quarantines, cordons, and sequestrations can make rational sense in specific situations. But, again, state governments for some reason have tried to combat the novel coronavirus with novel policies that come with huge negative side effects for everyone — workers, consumers, and taxpayers — and that have and will continue to cause deaths, minimization of which is the ostensible goal of lockdown policies.

    Why draconian lockdown rules have not yet been deemed unconstitutional I still do not know, but the fact that a former federal judge who teaches at Harvard apparently does not know the difference between a quarantine and a lockdown might provide a clue.

    Another clue might come from the fact that the courts, like the rest of the country, are run by the people most at risk of dying from COVID-19. But at least lawsuits have finally begun to be filed in significant numbers. 

    Once a federal court (especially SCOTUS, from which there is no appeal) declares a law unconstitutional, as SCOTUS has often done to state laws throughout US history, the political dynamic changes dramatically. States must comply or face that other side of federalism, where the U.S. government has the duty to protect American citizens from their own state governments under the 14th Amendment, one of the Constitution’s strongest.

    The national government has intervened before, most dramatically during the Civil War, but as recently as the Civil Rights Movement. In 1957, President Dwight D. Eisenhower federalized the National Guard of Arkansas in order to enforce federal court rulings in Little Rock. Arkansas duly passed laws, highly popular laws, mandating the “social distancing” of people with different skin tones, but that did not matter because the federal government has to weigh all the Constitutional rights of all Americans. No matter what.

    Similarly, President Lyndon B. Johnson federalized the Alabama National Guard in 1965 to protect peaceful protestors marching from Selma to Montgomery from Alabama state troopers. No joke, look it up.

    Federalization of state military forces has plenty of precedent: Trump has already federalized some national guard units to help with coronavirus relief efforts in Washington, California, and New York (not to enforce lockdowns) and to “protect” the southern border, something that every president since Ronald Reagan, including President Barack Obama, has done. Richard Nixon federalized some units too, in 1970 in response to a US postal strike. President George Washington himself led federalized militia troops to put down a federal tax rebellion in western Pennsylvania in 1794.

    If National Guard troops refused to follow the President’s orders, things could get ugly very quickly but hopefully matters will not come to that. After all, nobody (yet) wants to drag people from their homes, only to allow those who wish to engage in lawful commercial intercourse to do so, just like those students in Little Rock only wanted an equal education and those marchers simply wanted to exercise their First Amendment rights.

    In a sense, then, Trump was right when he claimed that he has the authority to force states to re-open their economies, provided a federal judge declares state lockdowns unconstitutional and state governments refuse to comply with his or her order. 

    In that scenario, the Constitution itself can be blamed for causing a spike in COVID-19 deaths should one occur after reopening.

    We will not be trading off lives for lucre at that point, we will be trading off lives for liberty, just as I argued at the outset of the crisis. Now, let a politician say that we must give up the Constitution to save one life. I dare him or her!


    Tyler Durden

    Sat, 05/02/2020 – 00:00

  • Macau Gaming Revenues Down 97% As Travel Restrictions Take Toll
    Macau Gaming Revenues Down 97% As Travel Restrictions Take Toll

    April gross gaming revenues at Macau casinos are down a staggering 96.8% year-on-year to MOP$754 million (US$87 million), as tourism to the gambling mecca has virtually disappeared due to travel restrictions barring the entry of all non-residents aside from those from mainland China, Hong Kong and Taiwan.

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    Meanwhile, China’s Guangdong Province introduced a mandatory 14-day quarantine for anyone returning from Macau, including Guangdong residents, according to Inside Asian Gaming.

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    An attendant checks the temperature of a tourist at the entrance to the Galaxy Macau casino and hotel

    For the first four months of 2020, Macau’s GGR is down 68.7% year-on-year to MOP$31.24 billion compared with MOP$99.74 billion over the same period in 2019.

    Empty casinos

    As IAG notes in a separate Friday report, Macau casinos are virtual ghost towns – with the MGM Macau seeing the most foot traffic for the third week in a row out of 11 properties surveyed.

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    On average, each gaming floor had around five players (37%) on tables and nine players (63%) on slots. MGM Macau was by far the busiest with 23 players at the tables and eight on slots, while The Venetian Macao came in second best with eight at the tables and 15 on slots. Once again, Sands Cotai Central was quietest with only a single slots player. –Inside Asian Gaming

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    Macau has had 45 confirmed COVID-19 cases,  3,792 suspected cases, 37 recoveries, and zero deaths.


    Tyler Durden

    Fri, 05/01/2020 – 23:40

  • There Is No Exit From COVID-19, Only Containment
    There Is No Exit From COVID-19, Only Containment

    Authored by M.K.Bhadrakumar via The Indian Punchline blog,

    From this point, the buck stops with the Modi government, as the country trudges along the Covid highway. The political move to tap into the residual spirit of Indian federalism in our highly polarised polity helped so far, as the central government could inject into its decisions a look of national consensus. Whereas, the central government took all major decisions and most minor decisions. 

    However, the physical or material conditions vary from state to state while on the other hand, the time is approaching for the central government to make a thorny decision — when or how to restart the economy that was shut down almost overnight. 

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    Clearly, an economy of India’s size won’t start back up simply because the government so decided. The refrain is that the restart will be gradual. But the devil lies in the details. Under what circumstances will businesses be allowed to reopen? It seems certain regions and businesses / industries may be put on a fast track. The MSME sector, which employs 12 crore workers need special attention.

    However, defining a yardstick will be difficult because the economy is a complex web of supply chains and interlocking pieces with a dynamics of their own. In an interview with the BBC Radio last week, the owner of Mahindra & Mahindra said he just couldn’t see any possibility of his company becoming operational before May 2021, since, amongst other things, it doesn’t make sense to make cars without the numerous suppliers and sales outlets first reviving and, importantly, until consumer confidence revives. 

    Clearly, epidemiologists’ recommendations or the government’s decisions will not be the last word. If a manufacturer in Chennai depends on a part made in Ahmedabad, for example, where the virus is still spreading, a government fiat to start production becomes meaningless. Simply put, it is going to take much longer to thaw the economy than it took to freeze it. 

    Then, there is the co-relation between a phased reopening of the economy and public health benchmarks. The best that can be said about the lockdown is that it probably slowed down the spread of the virus. But we’re chasing a chimera here. The authenticity of the figures available is in serious doubt. No one is to blame because tracking the coronavirus is difficult in such abnormal conditions of lockout.

    Today’s New York Times reported that the coronavirus death toll in the US is actually far higher than reported. The FT also came out with a stunning report today that Britain’s actual death toll could be plausibly in the region of 41000, as against hospital death data that show 17,337 people having died.

    The plain truth is that there is no “exit strategy” possible out of the lockdown in the absence of a vaccine or a proven therapy.

    “We will have to learn to live with the virus,” French Prime Minister Édouard Philippe put it starkly on April 28, while outlining his plan to start reopening the country at the National Assembly in Paris, until a vaccine or effective treatment is available.

    This stark reality ought to leave with the Indian states a free hand to develop their own road maps and decide either to persist in lockdown or pull themselves out in different ways and at different speed. What cannot be overlooked is that all this is taking place under the threat of a second global wave or outbreak — a disaster scenario.

    Epidemics come in waves. In the Spanish flu pandemic of 1918, the deadliest in history, the first wave was nothing in comparison with the virulent second wave, which left a horrific trail. No doubt, this is a Catch-22 situation — whether suppressing the virus further to stall a repeat outbreak or the lifting of restrictions quicker to limit the economic fallout should take precedence. The biggest risk is that you open too fast, too broadly. 

    The warning from Germany on lockdown easing conveys a sombre message. Only a week since the easing began in Germany with the reopening of shops (with all conceivable precautions put in place with characteristic Teutonic efficiency and thoroughness), it appears that Berlin may have to re-tighten its lockdown because the virus is spreading too fast.

    The virus reproduction rate – measuring how many the average person with Covid-19 infects – increased to 1.0. (Any value above 1.0 is seen as leading to exponential increase in infections.) Chancellor Angela Merkel is on record that a rise to 1.2 ( of the so-called “RE number”) could mean hospitals reach a crisis point in July: “If we get to 1.2 people, so everyone is infecting 20 per cent more, out of five people one infects two and the rest one, then we will reach the limit of our healthcare system in July”.

    Remember, this is one of the richest countries in the world — and a social democracy with a well developed healthcare system. It is a worrying sign. Surely, there are many variables swirling in the ether, and epidemiology is a complex business.

    The bottom line is that with no vaccine or cure insight, the government will have to decide how many deaths would be acceptable to restore a shattered economy. If the “RE” number lifts after an easing of restrictions on 3rd May and we’re forced to back-pedal, the economic damage will be amplified, leave aside the potential to demoralise the public’s resolve. 

    Mass testing of asymptomatic people appears to be the defining measure of success globally in tackling the virus, but in India, we lack the infrastructure for it. Time and testing are key and the longer a quarantine can be extended the better, and the more testing made available, the easier it would be to properly calibrate a reopening and respond to any new outbreak. No doubt, waiting until comprehensive testing provides a better map of where the infection has spread. 

    Devi Sridhar, the chair of global public health at Edinburgh Medical School and director of the Global Health Governance program, recently tweeted on the three options open. Sridhar wrote:

    “There are few short-term options.

    1: Let the virus go and thousands die.

    2: Lockdown and release cycles which will destroy economy and society.

    3: Aggressive test, trace, isolate strategy supported with soft physical distancing.”

    Having said that, the horrifying twin-reality still remains to be that an end to lockdown will by no means represent a return to normality, and, equally, a second, far more destructive wave is virtually an unavoidable possibility, notwithstanding the infection-reducing social distancing as a “new normal” in our daily life. 

    Under the circumstances, while dampening public expectations may not be the best option in politics, public morale is best sustained on the basis of transparent, realistic communication. This is a long haul. Make no mistake that in the absence of a safe and effective vaccine and/or a safe and effective drug to eliminate the COVID-19 infection once it has occurred, our narrative narrows down to a containment strategy attuned to Indian conditions, quintessentially – which, by no means, becomes an exit strategy.  


    Tyler Durden

    Fri, 05/01/2020 – 23:20

  • New Coronavirus Study Claims Outbreak Will Last Longer Than 2 Years As 2/3rds Of Humanity Infected
    New Coronavirus Study Claims Outbreak Will Last Longer Than 2 Years As 2/3rds Of Humanity Infected

    It’s been a while since we saw a study projecting an extremely dire endgame for the coronavirus outbreak.

    Yet, as the battle over whether to reopen immediately or wait a few more weeks becomes almost universally-partisan, a non-peer-reviewed study out of the midwest projected that the virus could kick around for another 2 years, and that the outbreak won’t subside until more than 60% of the global population is immune, Bloomberg reports.

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    According to the research from the Center for Infectious Disease Research and Policy at the University of Minnesota, the coronavirus pandemic is likely to last as long as two years and won’t be controlled until about two-thirds of the world’s population is immune.

    The report was written by CIDRAP director Michael Osterholm and medical director Kristen Moore, Tulane University public health historian John Barry, and Harvard epidemiologist Marc Lipsitch, whose name has appeared on other important coronavirus research and commentary.

    Furthermore, because so many of those infected by the virus are asymptomatic or mostly asymptomatic, lockdowns and other aggressive measures might not be enough to stamp it out completely. This ‘invisibility’ is what makes SARS-CoV-2 such a challenging virus to contain.

    This might help explain why Sweden’s approach has been so popular, while offering perhaps the best argument yet for why states might as well reopen. According to the researchers, the virus will likely keep on coming in waves perhaps until the end of 2022, or even longer, as drug companies scramble to develop a vaccine, or a cure.

    Because of its ability to spread from person to person without the presence of symptoms, the virus will likely be much harder to control than the flu. The virus is deadlier than the flu, too – and certain mutated strains have been found to be significantly more virulent.

    According to the report, people might actually be at their most infectious before symptoms even start to appear.

    “Risk communication messaging from government officials should incorporate the concept that this pandemic will not be over soon,” they said, “and that people need to be prepared for possible periodic resurgences of disease over the next two years.”

    That’s the last thing equity traders probably want to hear on Friday.


    Tyler Durden

    Fri, 05/01/2020 – 23:00

  • Oregon County Says "No Whites Allowed"
    Oregon County Says "No Whites Allowed"

    Authored by Simon Black via SovereignMan.com,

    Are you ready for this week’s absurdity? Here’s our Friday roll-up of the most ridiculous stories from around the world that are threats to your liberty, your finances, and your prosperity… and on occasion, poetic justice.

    “No whites allowed” safe space for employees of Oregon county

    Do you know what’s been missing from the government’s response to coronavirus?

    You might think– ‘more testing kits’, or ‘honest information’.

    Nope. According to at least one county in the US state of Oregon, the biggest issue right now is establishing “safe spaces” where no white people are allowed.

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    This is how Multnomah County, Oregon is rewarding its employees who are working during the pandemic: the county government announced that one of their departments will host “a grounding space for Black, Indigenous, and People of Color (BIPOC) employees to share, heal, connect, and get grounded in a space that is not dominated by whiteness.”

    The safe-space was announced in a daily report to county employees fighting coronavirus.

    When asked, a county spokesperson assured the public that it is perfectly legal to discriminate against their white employees.

    She explained, “The space excludes no one. It is based on shared lived experience not identity. The same way our employee resource groups for veterans, parents, and people with a disability are based on life experience and not identity. All are welcome here.”

    Except white people.

    Try to wrap your mind around that double-speak.

    Click here to read the full story.

    *  *  *

    Police testing “Pandemic Drones”

    Connecticut police will be testing a new “pandemic drone.”

    It is so named because the drone is “equipped with a specialized sensor and vision systems that can display fever/temperature, heart and respiratory rates, as well as detect people sneezing and coughing in crowds, and wherever groups of people may work or congregate.”

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    The company that builds the drones announced the partnership with police.

    “The technology can accurately detect infectious conditions from a distance of 190 feet as well as measure social distancing for proactive public safety practices.”

    If you already think the government expansion of power and surveillance has gone too far, just wait until Robocop gets involved.

    Click here for the full story.

    *  *  *

    Shocking: China loves the World Health Organization

    We have been talking about the World Health Organization a lot over the past couple weeks.

    Now, China decided to send an extra $30 million to the World Health Organization after the US announced a temporary funding freeze due to its missteps.

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    A Chinese official said the gift to WHO “reflects the support and trust of the Chinese government and people for the WHO”.

    Just in case you needed another reason NOT to trust the World Health Organization.

    Click here for the full story.

    *  *  *

    Congressional Budget Office sees a $3.7 trillion deficit this year alone

    Tax revenue is drying up from a locked-down economy, at the same time spending is massively ballooning,

    Over the past years we’ve asked rhetorically: if the US runs trillion dollar deficits during the best of times, what happens during the tough times?

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    Now that the world has hit the tough times, and the answer to that question is no surprise:The Congressional Budget Office estimates that this year’s budget deficit will be $3.7 trillion.

    That means the government will spend $3.7 trillion dollars more than they take in from taxes.

    To put that number in context, $3.7 trillion constitutes almost 20% of the entire US economy.

    Click here for the full story.

    *  *  *

    And to continue learning how to ensure you thrive no matter what happens next in the world, I encourage you to download our free Perfect Plan B Guide.


    Tyler Durden

    Fri, 05/01/2020 – 22:40

  • China Revives Centuries-Old Social Distancing Hat For Students
    China Revives Centuries-Old Social Distancing Hat For Students

    Students in eastern China wore social distancing hats as they returned to school following the coronavirus outbreak. 

    Images and videos have surfaced on popular Chinese social media platforms of students wearing self-made airplane winged hats on their heads and face masks in a classroom. 

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    “The longest ever winter vacation for Hangzhou’s elementary students ended this week, as first to third grades returned to the classroom. One school in the city, Yangzheng Primary School, gave its students an early assignment: fashion their own homemade “one-meter hats,” to remind the youngsters to stay a meter apart at all times,” reported RT News. 

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    Social distancing hats were only to be taken off during lunchtime, local media said. While walking through doorways and narrow hallways, students had to navigate carefully. These hats have become mandatory in Hangzhou for all students. 

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    About two hours north up the coast, Shanghai welcomed back middle and high school students. Schools across China have reopened in the last several weeks. Wuhan, the hardest-hit area in China, reopened earlier this month. 

    It seems like social distancing hats have been around for centuries. Possible revival? 

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

    Someone has made a social distancing hat with lasers. 

    American educators are studying how China is reopening schools amid the threats of another coronavirus wave. Social distancing hats are likely coming to the US when schools open. 


    Tyler Durden

    Fri, 05/01/2020 – 22:20

  • Why Michael Flynn Was Set Up
    Why Michael Flynn Was Set Up

    Authored by Roger Simon via The Epoch Times,

    The more we learn about the evils done to Michael Flynn, and they increase day by day, the more the FBI comes to resemble the KGB.

    Or is it the earlier version, the NKVD, whose leader Lavrentiy Beria famously declared “Show me the man and I’ll find you the crime.”

    James Comey – the head of the FBI during this period of extraordinary moral turpitude – never said anything anywhere near that pithy or memorable but he did Beria one better. He, with Peter Strzok, whose feckless emails to his paramour continue to amaze, and various other bit players – some revealed others yet to be revealed – of this sorry saga, didn’t just find a crime, they invented one.

    In all fairness, the Soviets, pre and post-Beria, often did the same, putting the darkness in “Darkness at Noon” with forced confessions as in the Metro-Vickers Affair (1933) when innocent Brits took the hit for the failure of Stalin’s “Five-Year Plan.”

    What was really going on with what was essentially the “forced confession” of Michael Flynn?

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    Attorney Andrew C. McCarthy said on Tucker Carlson Thursday night that Flynn wasn’t the target. It was Trump. Flynn was just a “seasoned intelligence professional” (McCarthy’s words) who had to be implicated and put out of the way in order to reach the president, the real bull’s eye.

    That’s likely true, but it’s also likely that wasn’t the only reason. Flynn was by himself a target.

    During the transition, it is said Obama gave Trump two pieces of advice on whom he considered to be the current greatest threats to the United States, so the new president could be forearmed—Kim Jong-un and Michael Flynn.

    Michael Flynn? (I’d add several exclamation points and question marks, but it’s tacky.). Why would he be of anywhere near that importance to be put in the same conversation as the nuclear-armed dictator of North Korea?

    The answer, I believe, is a four letter word: Iran.

    The Iran Deal (Joint Comprehensive Plan of Action or JCPOA) was, with the Affordable Care Act, one of the twin pillars of Obama’s presidency on which he wanted to base his legacy.

    I’m not going into here the many theories of why, beyond that legacy, Obama was so attached to the JCPOA, but, by the time Trump was elected, it was already under heavy criticism due to the Islamic Republic’s violent activities in the Syrian civil war and elsewhere, arming Hezbollah, Hamas, the Houthis and other proxies with moneys that came via America and—naive as it now sounds—were supposed to be for the improvement of the lives of the Iranian people.

    Flynn was known to have been one of the most adamant opponents of the Iran Deal within the Obama administration in the first place and, with his military record as a three-star general plus aforementioned intelligence expertise, perhaps the most powerful one.

    So bringing down Flynn was a two-for, striking a blow at the new president while hopefully helping to preserve the Iran Deal. The second part didn’t work, but the first did… for a while.

    It’s therefore not totally surprising—what is these days?—that the newly-revealed documents have “SCO “ (Special Counsels Office) scrawled on them, among other incriminating notes indicating a “setup” was in the cards for Flynn.

    That means these statements exculpating Trump’s newly-appointed National Security Adviser went to Mueller’s office where someone (Mueller? Weissman?) ignored them and continued with what Trump has colloquially, and I think too loosely, branded a “hoax.” It was far more than that. It was a form of defenestration.

    When we look for the Mr. Big in all this, as we are tempted to do as—we can be more confident now— more rolls out, we should not settle for James Comey, as culpable as he may be. This bizarre character who self-identified on Twitter as the theologian Reinhold Niebuhr is not the end to the story.

    We are looking at a Netflix series with a plot that gets increasingly complicated. It goes past Comey and into the intelligence agencies and the State Department—a real life version of “Scandal” with, I regret to tell show runner Shonda Rhymes, the liberals and progressives almost always the villains.

    When it reaches Brennan and Obama, it may not even end there. Maybe even John Durham doesn’t know. (Kidding. I hope.)


    Tyler Durden

    Fri, 05/01/2020 – 22:00

  • "Gone In 60 Seconds" – 19 Children In North Carolina Steal 46 Cars From Dealerships 
    "Gone In 60 Seconds" – 19 Children In North Carolina Steal 46 Cars From Dealerships 

    Crime has increased during every recession since the 1950s. As people lose their jobs, they sometimes resort to theft and robbery to compensate for lost income. As a depression unfolds across America, a group of 19 kids, ages 19 to 16, have been accused by law enforcement for stealing over a million dollars in vehicles from dealerships under the cover of the pandemic. 

    The thefts began on March 17, and occurred across numerous auto dealerships in Winston-Salem, North Carolina, reported WXII NBC.

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    Winston-Salem Police said 18 break-ins were reported at dealerships in the region, along with two in Kernersville. 

    In total, 46 vehicles were stolen, worth about $1.14 million. Police said all but three were recovered. 

    It appears these kids were just shy of the 50 mark, something that movies buffs would know if they’ve seen the movie “Gone in 60 Seconds,” where Nicolas Cage had to steal 50 luxury cars in one night to save his brother from a crime lord. Now there were no reports suggesting the kids were working for an organized crime organization, that would take the cars and part them out or load them up in sea containers for overseas clients. 

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    But there’s something that is troubling to us. How the heck did they kids get a hold of the technology, remember, most cars today need key fobs or laser cut keys – to start these vehicles?

    Police have been denied custody orders from the Forsyth County Department of Juvenile Justice for the children. They said one adult was arrested, 19, Mekeal Binns, was charged with possession of a stolen motor vehicle, and remains in Forsyth County Detention Center.

    Here are some of the dealerships the kids targeted: 

    • Flow Honda, 2600 Peters Creek Parkway
    • Flow Lexus, 801 Jonestown Road
    • Enterprise Rentals, 3080 University Parkway
    • Parkway Ford, 3150 University Parkway
    • Flow Audi, 465 Silas Creek Parkway
    • Modern Infinity, 1500 Peters Creek Parkway
    • Bob King Kia, 1725 Link Road
    • Modern Toyota, 3178 Peters Creek Parkway
    • Volvo, 701 Peters Creek Parkway
    • Parkway Ford, 2104 Peters Creek Parkway
    • Flow Subaru, 425 Silas Creek Parkway
    • Flow Chevrolet, S. Stratford Road

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    Map of dealerships that saw thefts 

    Authorities have asked the dealerships to better secure cars during the virus lockdowns. Looting was also seen in South Carolina in early April during statewide stay-at-home orders.


    Tyler Durden

    Fri, 05/01/2020 – 21:40

  • Johnstone: The Way Liberals Smear Tara Reade Is Everything Rape Survivors Fear
    Johnstone: The Way Liberals Smear Tara Reade Is Everything Rape Survivors Fear

    Authored by Caitlin Johnstone via Medium.com,

    Former Georgia state congresswoman and gubernatorial candidate Stacey Abrams, who is on the Joe Biden running mate short list and making no secret of her desire for the job, said on CNN Tuesday night that she did not believe rape allegations against Biden to be credible.

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    “The New York Times did a deep investigation and they found that the accusation was not credible. I believe Joe Biden,” Abrams said when pressed on further corroborating evidence that Biden’s accuser Tara Reade had been talking about a sexual assault by the then-senator way back in the nineties.

    CNN’s Don Lemon pressed Abrams on the contradiction between her earlier “believe women” rhetoric about conservative Supreme Court Justice Brett Kavanaugh’s accuser, to which Abrams responded that Kavanaugh’s accuser was not given a fair hearing but Tara Reade was. Past tense. Over and done with now.

    Lemon did not ask why Abrams considers The New York Times the official arbiter of who was and was not raped. He did not challenge her false assertion that The New York Times concluded Reade’s accusation was “not credible”. He did not point out that the investigation by the The New York Times took place prior to the emergence of the corroborating evidence in question. Abrams was allowed to coolly insert a false, baseless narrative into public consciousness and move on.

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

    In reality, The New York Times is not the authority on who has and has not been sexually assaulted. That’s not a thing.

    In reality, The New York Times did not conclude that Reade’s accusation is not credible, only that they “found no pattern of sexual misconduct by Mr. Biden, beyond the hugs, kisses and touching that women previously said made them uncomfortable” (which they later quietly edited down to “found no pattern of sexual misconduct by Mr. Biden” at the instruction of the Biden campaign, a very blatant act of journalistic malpractice).

    In reality, The New York Times has smeared Reade with a scandalous hit piece dismissing her allegations because she has written approvingly of Russian president Vladimir Putin, implying that either:

    (A) Reade is a Russian agent fabricating the allegations to help Trump, or

    (B) that it’s okay to rape women if they disagree with beltway consensus foreign policy.

    In reality, two new corroborating pieces of evidence have been added to the growing pile since The New York Times published its “investigation” into Reade’s allegations: footage of Reade’s mother anonymously calling in to Larry King Live in 1993 during Reade’s last month of employment with Biden saying that her daughter was considering going to the press with a very serious allegation against a very prominent senator, and a former neighbor saying that Reade had told her about the sexual assault in the mid-nineties.

    I have never been in the “always believe all women” camp; it’s a narrative that’s too easy to manipulate once you get enough people believing it. But at this point there are basically only two possibilities: either:

    (A) Tara Reade was going around lying to her closest confidants in the 1990s with the very long-term goal of one day thwarting Biden’s third presidential bid decades later, or

    (B) a powerful man sexually assaulted a woman. One of these, in my opinion, is a lot more probable than the other.

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

    I’ve been avoiding writing much about Tara Reade, for a lot of reasons. Firstly I’m a survivor of multiple rapes and it brings up a lot of ouch for me, especially since whenever I write about rape as a problem I always get a deluge of highly triggered men (and sometimes one or two highly traumatized women) calling me a man-hater and saying all kinds of nasty things to me. Secondly I’ve been trying not to spend too much time on the details of an election we all know is fake anyway between two establishment candidates we already know are deeply depraved.

    But mostly I avoid the subject because it’s just so goddamn gross. It’s gross to watch liberals going around pretending they believe that Handsy Uncle Hair Sniffer would never dream of shoving his fingers into a woman without her consent. It’s gross watching the language of leftism being borrowed to defend pure, relentless victim smearing. It’s gross watching people who’ve built their political identities around pretending to care about women try to spin these allegations as Reade being dishonest for partisan reasons, when in reality that’s exactly what they themselves are doing.

    Due to my experiences with and sensitivity to the subject matter, going through this stuff feels kind of like getting punched in the privates over and over again. There are smears everywhere, from the establishment narrative managers to their brainwashed rank-and-file herd.

    Yesterday some “KHive” asshole told me that Reade is mentally ill and talking about her experience will probably drive her to suicide, citing a baseless smear by McResistance pundit Sally Albright as his evidence. There’s a Twitter thread with thousands of shares going around right now where some liberal combed through all Reade’s old tweets highlighting typos she made and claiming they show Reade tweeting “in a Russian accent”.

    It’s really, really gross.

    And it hurts.

    And there are definitely a whole lot of rape survivors experiencing the same thing about this story right now.

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    This is exactly the nightmare scenario that sexual assault survivors imagine when they contemplate coming forward. It’s why so many of them don’t. Especially when their attacker is powerful.

    Nobody wants to have their name dragged through the mud by widely esteemed mainstream news media outlets. Nobody wants to have their entire past and entire social media history dug through to find anything that can be spun in the most negative light possible. Nobody wants to be told over and over again that they’re a liar, that they’re crazy, that they’re confused, all because they know they were sexually assaulted and said so. Nobody wants what can easily be the most traumatic experience of their life turned into a weapon to bludgeon them with before jeering crowds of millions all around the country.

    And that sucks.

    It sucks because if we’re to build a healthy world we’re going to have to get rid of all the people who shouldn’t be in power, and the very first lot we should eliminate are the ones who abuse their power to assault the sexuality of other human beings. If you use your power to rape people, you will with absolute certainty use it to do other unconscionable things as well, so eliminating those who do so is the first step toward health. That’s step one, and we can’t even get there, because blind partisan hackery turns pussyhat-wearing liberals into a bunch of snarling male supremacists.

    I was 19 the first time I was raped. The last time I was 39. I never reported my attackers, for reasons the specifics of which I’m not interested in explaining or defending, but let’s just say that there are many messages you get sent by society telling you that if you report your rapist you are ruining a man’s life, destroying his family, career and future over one “mistake”. That it’s better just to suck it up because you’re strong and you can handle it.

    You are taught that if you report your rape, you will be treated like the criminal, and the “investigation” that will take place will not put its spotlight on the accused, but on you, the accuser. You will have to defend your life choices and your character when you’re in the process of attempting to recover from a deeply harmful assault. You are taught that if you report these things that it’s you that will be shunned and shamed by members of your own tribe. And if the person is powerful, then you also know that this will likely end your career.

    All these things are happening to Tara Reade right now. None of that has changed. Millions of young girls are being sent that message, once again, all across America, on screens large and small. They are being shown that if you accuse someone who has power over you of rape, you will be demonized and attacked, even by people who say they care about you, about a profoundly sensitive matter involving the most traumatic thing you’ve ever experienced.

    And the thing is, that message is not a false message. You absolutely can be made the subject of vicious attacks if you accuse the wrong person of raping you. Attacks which press all your most painful buttons. Attacks which will try to convince you that you are insane. Attacks which will try to drive you insane.

    And that sucks.

    And I don’t know what can be done about it.

    *  *  *

    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 or Paypal, purchasing 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

    Fri, 05/01/2020 – 21:20

  • Newsom "Put Politics Over Data" With Beach Closure Order, Newport Mayor Says
    Newsom "Put Politics Over Data" With Beach Closure Order, Newport Mayor Says

    Update: It’s not just Newport Beach…

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    *  *  *

    Authored by Ivan Pentchoukov via The Epoch Times,

    A mayor in California’s Newport Beach has accused Gov. Gavin Newsom of placing politics over data with the decision to close the beaches in Orange County.

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    Mayor Will O’Neill pointed to data showing that every beach community in Los Angeles County – where the beaches have been closed for a month – had higher rates of infection than Orange County’s open beach communities.

    “Without speaking to a single local official in Newport Beach, Governor Newsom has put politics over data, and substituted his will for our judgment from 428 miles away in Sacramento,” O’Neill wrote on Twitter.

    “Los Angeles County closed their beaches over a month ago and data now shows that every single Los Angeles County beach community has a higher per capita COVID infection rate than Orange County’s open beach communities.”

    “Any restriction that invokes health and safety to shut down freedom of movement needs to be grounded in data to show that such activities are direct threats to health and safety. That showing was not made today. OC’s forty-two miles of beaches can and should be safely opened,” O’Neill added.

    Newsom ordered all beaches in Orange County to be closed on April 30, explaining that “we’re guided by health.”

    “We’re guided by your health and the health of others,” Newsom said.

    Newport Beach City Council earlier this week voted to reject an ordinance that would have closed beaches for the next three weekends.

    There were over 1,000 emails sent to city officials expressing views on the matter before the vote, including 664 asking for beaches to stay open and 391 wanting them closed.

    The council asked city workers to ramp up enforcement of social distancing measures, which include people staying six feet from individuals they don’t live with. More police officers and lifeguards will be on the beaches in the coming days, the city said in a press release.

    “The vast majority of the beach visitors this weekend were practicing social distancing, but many were not,” the city said in its statement.

    According to statistics shared during the council meeting, some 90,000 people went to beaches over the past weekend.

    San Clemente, where some beaches are also open, delayed taking action on a similar proposal. The city announced beaches were reopening on April 25.

    Crowds gathered on the beaches on April 25 and 26 as temperatures soared and many beaches nearby remained closed, including Los Angeles County beaches and most in San Diego County.

    Newsom, a Democrat, reacted to photographs showing throngs enjoying the sand, calling them “an example of what not to see” and “what not to do” if state residents want to continue making progress against the CCP (Chinese Communist Party) virus.

    “The reality is we are just a few weeks away, not months away, from making measurable and meaningful changes to our stay-at-home order,” the governor said, referring to his harsh mandate that has largely kept people confined in their homes since mid-March.

    “This virus doesn’t take the weekends off. This virus doesn’t go home because it’s a beautiful sunny day around our coasts,” he added.


    Tyler Durden

    Fri, 05/01/2020 – 21:00

  • What You Need To Know About Govt. Grants, Loans, & Forbearance To Survive The Pandemic Economy
    What You Need To Know About Govt. Grants, Loans, & Forbearance To Survive The Pandemic Economy

    Authored by Diane Kennedy via The Organic Prepper blog,

    We learned a lot from the 2008-2009 Great Recession. As a CPA and real estate investor, I learned that sometimes there was absolutely nothing you can do to save a bad deal. I learned that people often hang on to an old way of life much too long, putting their future in jeopardy. I learned that some people never recover, emotionally, from a financial loss while others bounce back, stronger than ever.

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    It might be too early to make your walk-away plan, but it’s never too soon to look at your options. Where are you right now?

    Your goal right now is to look at how you can have more money coming in and less money going out. There are some government programs and lender programs to help. Remember, though, that these are only temporary fixes. But as a taxpayer, you may be eligible to get this money and it may help you survive the pandemic financially.

    (Editor’s Note: I’m well aware that many people have no interest whatsoever in taking help from the government. This being said, you may be eligible for certain programs that have recently been introduced. This money may help you survive if you’ve lost your job or lost income due to the pandemic. Nobody is twisting your arm and forcing you to take this money but if you are struggling to survive financially, here’s what you need to know about these temporary fixes. ~ Daisy)

    As we move into a new economy, you’re most likely going to need new strategies. For now, let’s get you through the next couple of months. Then, look at what’s next for you and your family.

    Let’s start with the money that comes into your household. Cash flow in.

    The Government Economic Stimulus Payment

    The economic stimulus payments have begun to be distributed, but it’s an uneven roll-out.

    If the IRS doesn’t have your direct deposit information, they’re going to mail a check to the address you used on the last tax return you filed. But it could take a while. They’ve estimated it will take 5 weeks to get all of the checks mailed that they know about.

    If you want your payment faster, go to the irs.gov portal. If you haven’t filed 2018 or 2019 because the amount of taxable income you had was under the income threshold ($12,200) click on the “non-filer” button. If you have filed 2018 or 2019 and the IRS doesn’t have your direct deposit information, click on “Get My Money.” This is also the portal you’ll use to find out the status of your payment.

    If they can’t find your record, it could be because they think you weren’t due a payment, because you have SSI (social security disability), VA benefits, or because of some glitch in their system. Just keep checking back at irs.gov.

    The stimulus payments are not a lot and, at this point, it’s just a one-time thing. But it is something.

    Pandemic Unemployment Insurance (PUI)

    A more interesting program is the Pandemic Unemployment Insurance (PUI) addition to regular unemployment. Under PUI there are some important changes:

    • The waiting period for unemployment is gone,

    • The federal government will give you an additional $600 per week on top of what the state gives you.

    • The additional $600/week will last from 3/29/2020 -7/25/2020,

    • Self-employed persons and people who didn’t work the minimum amount that is normally required for unemployment will qualify,

    • General unemployment insurance payments will last for 39 weeks.

    The states are responsible for making this happen and most of them have not done so yet. It doesn’t mean you won’t get the money. It just means you have to wait a little longer.

    Reduce the cash going out

    Now, let’s look at what you can do to reduce the cash going out of your house.

    The most common forms of debt payments in the American household are home mortgage, car payments, and credit card payments. There are some options to reduce or delay some of your current payments.

    It doesn’t mean less debt. In fact, it usually means more debt because of additional interest costs, But at least you don’t have to pay right now.

    Mortgage payments

    The term for not paying your mortgage is forbearance. That means your mortgage payments are not currently due. Currently, government-backed loans are mandatory 3-12 months forbearance periods.

    If you have a Fannie Mae or Freddie Mac backed loan, the lender is required to give you several options for paying back the missed payments. This is important! The last thing you want is to skip 3 months of payments through forbearance, and then find out the lender is going to collect all 4 payments in the next month or start foreclosure right away.

    These options they are now told they have to offer are:

    • A loan extension so that the missed payments are added to the end of the mortgage

    • A loan modification so that the monthly mortgage payments are reduced

    • A repayment plan so that the forborne amount is spread out over several months’ time

    • A full lump sum repayment

    For more information on these new rules, go to this article.

    If you’re not sure what type of loan you have, you can contact Fannie or Freddie directly to see if your loan qualifies.

    • Fannie Mae. 1-800-2FANNIE (8am to 8pm EST) KnowYourOptions.com/loanlookup › …

    • Freddie Mac. 1-800-FREDDIE (8am to 8pm EST) FreddieMac.com/mymortgage ›

    Please note these rules only apply to government-backed mortgages.  Private mortgages don’t have these required options and may demand payment in full after the forbearance period ends.

    Car payments

    Do you have a car payment that you can’t make? A number of car loan companies and leasing companies have programs in place to delay or extend the term of your contract.

    Check in at https://cars.usnews.com/cars-trucks/coronavirus-payment-relief to see if your lender is offering such a deal. Communication is always best in cases like this. Here’s an article about talking to creditors.

    Credit cards

    Many credit card companies are coming forward with forbearance programs as well. They may allow you to put off making a payment, make a smaller payment, reduce your interest rate or eliminate late fees. Some credit card issuers have also agreed to not report the late payments to credit bureaus. That means your credit score wouldn’t be impacted, at least not by this.

    You can find out more information on these programs at https://www.foxbusiness.com/money/credit-card-forbearance-programs-bills

    What happens next?

    Now that you’ve got the next few months at least settled down, the question is, now what?

    First – don’t depend on the government, but be prepared to get the money they’re offering. The new coronavirus economic stimulus and tax acts have created a whole new group of grants, loans, and tax breaks. We call these CoronaTax.

    Congress has given us four CoronaTax bills. The first one dealt mainly with funding for important health agencies. The gold is in the next two bills.

    From the book, CoronaTax: Free Money! New Opportunities!, the purpose of these next two bills is:

    • Keeping you employed (if you currently have a job),

    • Keeping your employees working (assuming you have a business)

    • If you can’t work now (or your business can’t), getting you some income fast,

    • Providing sick & paid leave for your employees, with the government’s help, and

    • Giving businesses special tax breaks. (source)

    Get your family stable financially. Then learn about what’s possible for the next step. Form a strategy and implement perspective.

    We’ve got a new economy coming. Be prepared with knowledge, strategies, and action.


    Tyler Durden

    Fri, 05/01/2020 – 20:40

  • "The Last Ship": US Navy Keeping COVID-19 "Clean" Carrier Out At Sea Indefinitely 
    "The Last Ship": US Navy Keeping COVID-19 "Clean" Carrier Out At Sea Indefinitely 

    The US Navy is keeping warships with crew deemed “clean” — that is, completely free of coronavirus cases — deployed for an additional length of time with no port calls and no deployment end date amid a worsening crisis aboard other ships, as Reuters reports:

    On any given day, the U.S. aircraft carrier Harry S. Truman can be found off the Atlantic coast of the United States, probably somewhere between Virginia and Florida. Its crew would love to come home to their families. But they can’t. They’re just too valuable right now.

    That’s because the Truman is a “clean” ship, free from the coronavirus thanks to a longer-than-expected deployment at sea that started in November. The deployment has kept its battle-ready 4,500 crew out of reach of a pandemic that is wreaking havoc elsewhere in the Navy.

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    The Norfolk, Va-based Harry S. Truman in Atlantic Ocean. US Navy image

    At this point at least four US Navy aircraft carriers — the USS Theodore Roosevelt, the USS Ronald Reagan, the USS Carl Vinson and the USS Nimitz — have reported cases of coronavirus, crimping their operations. Most notably the Roosevelt had over a month ago been diverted from its original mission in the West Pacific, and now has 1,102 sailors that have tested positive for COVID-19.

    Reuters further reports US officials have confirmed more than two dozen warships now have crew with coronavirus infections while at port.

    And this week the guided-missile USS Kidd which arrived in San Diego Tuesday at least 78 active cases out of a 330-person crew, or about 25% of total personnel on board, reports the San Diego Union-Tribune. 

    We noted last month that Chinese state media appeared gleeful that US carriers and battle ships are seeing operations increasingly hampered by COVID-19, with the PLA Navy recently boasting it’s own missions are “not impacted”.

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    Guided-missile destroyer USS Kidd (DDG 100) arrives in San Diego, April 28, 2020. U.S. Navy Photo

    “This is a really weird situation for us,” USS Truman ship commander Captain Kavon Hakimzadeh told Reuters in a phone interview. Anxiety is growing among the crew over what’s essentially become an ‘indefinite’ deployment with uncertainty over when they’ll return to port, as their families at home and on shore navigate local lockdown orders, given the Navy has put no date on the ship’s return.

    “The crew members interviewed said they understood why the Truman needed to remain offshore to ensure combat readiness,” Reuters continues. “The virus ripped through another carrier, the Theodore Roosevelt, infecting more than 1,100 sailors.”

    And further, “Being so close to home is a constant reminder for sailors of the strain on their families in the United States, where in just months coronavirus-related deaths have reached at least 62,800, surpassing the number of Americans killed in the Vietnam War.”

    If this bizarre scenario of a whole crew stuck indefinitely adrift at sea due to a pandemic devastating civilization on land sounds familiar, the report includes this somewhat eerie reminder from Hollywood:

    In a world awash with dark Hollywood dramas, one television show that’s been popular among the Truman crew is “The Last Ship.” It imagined a U.S. Navy destroyer that was at sea, in radio silence, when a deadly pandemic devastated the world.

    Senior Chief Petty Officer Kevin Dublynn said one of his shipmates had mentioned it to him.

    “He felt like, ‘Oh, man. This is just like ‘The Last Ship’ show,’” Dublynn said. “I was like, ‘No, it’s not,’” adding the Navy had plenty of ships.

    Steven Kane, the TV show’s co-creator and executive producer, said the 2014-2018 TNT drama explored how ill-intentioned people could exploit a pandemic and how easily a virus could wipe out a ship.

    An outbreak wipes out civilization on land while a “last ship” is at sea:

    No doubt there are other “clean” Navy ships out there, so it’s very likely the number of ‘indefinite’ deployments at sea will grow. 

    This as America’s rivals look on closely, especially China and Russia, eager to see just how severely operations and military readiness will be impacted across the Navy and Department of Defense. 


    Tyler Durden

    Fri, 05/01/2020 – 20:20

  • Venezuela's Gold Vaults Empty As Iran Takes Bullion For Oil Services Rendered
    Venezuela's Gold Vaults Empty As Iran Takes Bullion For Oil Services Rendered

    With cash levels dwindling and its once mighty oil sector on its knees and needing help desperately, OilPrice.com’s Tsvetana Paraskova reports that Nicolas Maduro’s regime in Venezuela is paying Iran in gold for help with Venezuela’s crumbling oil industry, U.S. Special Representative for Venezuela Elliott Abrams said at a conversation with Washington-based think tank Hudson Institute this week.

    Venezuela’s oil output is at record lows…

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    And, its cash reserves are at record lows

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    And since, over the past few weeks, Iran has been sending more and more planes to Venezuela, Abrams said that “our guess is that they are being paid in gold,” he said.

    “Those planes that are coming in from Iran that are bringing things for the oil industry are returning with the payments for those things: gold,” Abrams said.

    In April alone, Venezuela loaded 9 tons of gold, worth around US$500 million, on airplanes for Iran, in exchange for Iranian help for repairing Venezuela’s crumbling refineries, sources with direct knowledge of the matter told Bloomberg this week.

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    We suspect Venezuela’s gold vaults are running extremely dry. At last count, in August 2019, it was around 100 tons…

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    But that was before Maduro started to dramatically increase his sales of Venezuelan Gold around the world.

    [ZH: It makes perfect sense for Iran to demand payment in gold since even the official Bolivar is utterly worthless. For a sense of just how gold is supposed to behave in a hyperinflationary environment, we note that in January 2010, a Venezuelan could by an ounce of gold for 1000 so-called “Strong”-Bolivars.

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    Today, that same ounce of yellow metal costs your average Venezuelan 300 billion “strong”-Bolivars (which were devalued by 1000:1 in March 2018) or 300 million ‘new’- Bolivars…]

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    On Thursday, U.S. Secretary of State Mike Pompeo also mentioned the Iranian-Venezuelan cooperation, saying, “We are deeply concerned about Iran’s destabilizing behavior in Venezuela- over the last few days, Iranian aircraft have transferred unknown support to the regime.”

    “Over the last few days, multiple aircraft belonging to Mahan Air have transferred unknown support to the Maduro regime. Birds of a feather. This is the same terrorist airline that Iran uses to move weapons and fighters around the Middle East. These flights must stop, and countries should do their part to deny overflights, just as many have already denied landing rights to this sanctioned airline,” Secretary Pompeo said at a press conference earlier this week.

    The U.S. has stepped up pressure on the Maduro regime in recent months, the latest being ordering U.S. supermajor Chevron to wind down its Venezuelan operations by the end of the year. Halliburton has also said it will suspend most of its operations in Venezuela, after Washington tightened the noose around Caracas by banning U.S. oil companies operating in the country from drilling for oil, transporting it, or providing any equipment for use in Venezuela.


    Tyler Durden

    Fri, 05/01/2020 – 20:00

  • Gundlach Stunned To Learn Fed Hasn't Purchased A Single Corporate Bond Yet
    Gundlach Stunned To Learn Fed Hasn't Purchased A Single Corporate Bond Yet

    Yesterday, when discussing the Fed’s latest $6.66 trillion balance sheet, we said that more than one month after the Fed announced its backstop for investment grade bonds and ETFs (followed shortly after by an expansion into fallen angel junk bonds), “what is most interesting is that so far the Fed has not yet purchased a single corporate bond, whether investment grade of fallen angel junk. In other words, without lifting a finger, the Fed’s “whatever it takes” jawboning managed to inject trillions “in value” in countless debt and credit products.”

    Today, none other than the bond king Jeff Gundlach made this discovery, tweeting that “the Fed has not actually bought any Corporate Bonds via the shell company set up to circumvent the restrictions of the Federal Reserve Act of 1913.  Must be the most effective jawboning success in Fed history if that is true.”

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    He’s right: the Fed – or rather Blackrock which is doing the Fed’s bidding in the open market as part of operation Covid bailout- has indeed not purchased a single bond, whether IG or HY.

    And why should the Fed get its hands dirty and enter the corporate bond market if all it takes is a promise that it could enter the market. There is just one problem: if the lack of purchases comes as a surprise to Gundlach, what about the rest of the market, where the majority of investors appear rather confident that they are merely flipping bonds to the Fed when in reality they are just trading among each other in piece of paper that are already massively overvalued as we discussed last weekend in “Unprecedented Pace Of Corporate Debt Issuance Has Crippled Corporate Fundamentals“, and where as Morgan Stanley pointed out, leverage is already exploding even as bond prices soar!

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    However, now that the Fed’s unwillingness to enter the market is a “thing”, it may leave Powell with no other choice than to start buying.

    In fact, as Bank of America writes today in “A Note To Fed” – a report apparently meant to precipitate the Fed’s decision to get off the fence and to start waving it in “a lot of investors (including non-credit ones) have bought IG corporate bonds the past two months on the expectation they can sell to you. So would be helpful if you soon began buying broadly and in size.”

    The problem, if the Fed does not start “buying broadly and in size” is that the bond market may soon suffer from a very painful indigestion of the record IG bond issuance that has taken place in the past two months, first profiled here.

    And, as BofA updates, new investment grade issuance reached another monthly record of $296.6bn in April following a $261.4bn tally in March – significantly above the previous record of $175.5bn from January 2017 – bringing the YTD cumulative to $807.1bn, the fastest start to the year ever and 82% ahead of the pace in 2019.

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    Some more details on what all this new debt is being put to use for:

    Refinancing-related issuance remains high at $100.6bn, including $52.4bn going towards commercial paper and credit revolver repayments. In addition we estimate $104.1bn of COVID-19 liquidity-related issuance from banks and companies that drew credit lines or mentioned liquidity in the use of proceeds language, and $58.6bn of frontloaded issuance for M&A, share buybacks, dividends, and capex (some deals fit multiple categories). New issue performance improved in April. With $59.4bn of redemptions in April, net issuance totaled $237.2bn when defined as gross issuance minus maturities, calls, tenders and open market repurchases.

    Use of funds notwithstanding, the bigger issue is that so far the record supply glut has only been made possible due to the seemingly endless IG demand that has enabled this unprecedented issuance flood. However, if investors start asking when and how they will be able to flip all this massively overpriced paper to the dumbest, price-indiscriminate buyer in the room – i.e., the Fed – first the demand and then the supply could collapse.

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    Which begs the question: while Mario Draghi managed to get away for years with merely vowing to do “whatever it takes” to restore confidence in the euro, will Powell be able to repeat the ECB veteran’s record and cause another massive bond bubble a la what Boeing has managed to do in just a few short weeks with its latest $25BN bond issuance…

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    … without lifting a finger, and instead let his successor deal with the even bigger debt crisis that is guaranteed to follow as the average IG credit metric is now smack in the middle of what was one junk bond territory?


    Tyler Durden

    Fri, 05/01/2020 – 19:59

  • Maryland Deploys National Guard To Protect Covid Tests From Feds
    Maryland Deploys National Guard To Protect Covid Tests From Feds

    Maryland Gov. Larry Hogan told the Washington Post in a live interview on Thursday that thousands of COVID-19 tests obtained by the state from South Korea are protected in a secret location by the National Gaurd. 

    “The National Guard and the State Police are both guarding these tests at an undisclosed location,” Hogan said. 

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    Maryland Gov. Larry Hogan

    “There had been reports of, for example in Massachusetts, Gov. Charlie Baker told the story of his planeload …with masks was basically confiscated by the federal government,” he said, adding that, “it was a little bit of a concern” knowing the federal government would attempt to seize the tests. 

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    “We spent about 22 days and nights dealing with this whole transaction with Korea. We dealt with the Korean Embassy, folks at the State Department … and our scientists on both sides trying to, you know, figure out these tests,” Hogan said, noting that the purchase of the tests was also in coordination with the Food and Drug Administration (FDA).

    “And then at the last moment, I think 24 hours before, we got the sign-off from the FDA and Border and Customs, to try to make sure that we landed this plane safely,” he continued.

    According to Hogan, the plane was instructed to land at Baltimore/Washington International Thurgood Marshall Airport rather than airports in Washington because it would be harder for the federal government to seize the tests:

    “We landed it there with a large contingent of Maryland National Guard and Maryland State Police, because this was an enormously valuable payload. It was like Fort Knox to us, because it’s going to save the lives of thousands of our citizens,””he said.

    Hogan said National Guard troops are currently protecting the tests at an undisclosed location. “These things are being distributed; they’re [National Guard] helping us distribute the tests,” he said. We showed in March how the National Guard was deployed across the Baltimore Metropolitan Area as cases and deaths continued to soar in the state. 

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    Baltimore City COVID-19 Dashboard

    It was noted in the interview that Maryland received upwards of 500,000 tests from South Korea. It was reported last month that China continues to flood the world with defective medical equipment. Washington state purchased thousands of tests from China, which some turned out to be “contaminated.” 


    Tyler Durden

    Fri, 05/01/2020 – 19:40

  • Get Russian…
    Get Russian…

    Authored by Caitlin Johnstone via Medium.com,

    Dissent is Russian, or haven’t you heard?

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    Dissent is Russian.

    Peace activism is Russian.

    Exposing war crimes is Russian.

    Inconveniencing Democrats is Russian.

    Tara Reade? Russian.

    Julian Assange? Russian.

    Jill Stein? Russian.

    Tulsi Gabbard? Russian.

    Russia? You bet your sweet ass that’s Russian.

    Conspiracy theories are Russian.

    Alternative media are Russian.

    It’s Russian to ask questions.

    It’s Russian to reveal objective facts.

    It’s Russian to tell the truth.

    Truth is Russian in an empire of lies.

    If truth is Russian, I don’t want to be Australian.

    If truth is Russian, you can call me Svetlana.

    If truth is Russian, then I will ascend to the clouds by climbing a Tolstoy novel, kicking my feet out in front of me with my bum low to the ground balancing a bottle of vodka atop a fur hat whilst shouting “Stallone was the bad guy in Rocky IV” until my voice is hoarse.

    If truth is Russian, then let’s all get Russian.

    Get as Russian as possible.

    Get aggressively Russian.

    Get offensively Russian.

    Get Russianly Russian.

    Get so Russian it hurts.

    Get so Russian they write Palmer Report articles about you.

    Get so Russian that Rachel Maddow spits your name like it’s poison.

    Get so Russian that Putin calls you and says tone it down.

    Get so Russian that Khabib Nurmagomedov has nightmares about fighting you.

    Camus said “The only way to deal with an unfree world is to become so absolutely Russian that your very existence is an act of  rebellion,” or something like that.

    So get Russian, baby.

    Fold your arms and get low on the dance floor.

    Get low, shorty,

    get low, low, low.

    Get low,

    get low,

    and get Russian…

    *  *  *

    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 or Paypal, purchasing 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

    Fri, 05/01/2020 – 19:20

  • Kroger Begins Limiting Purchases On Ground Beef And Pork In Some Stores
    Kroger Begins Limiting Purchases On Ground Beef And Pork In Some Stores

    From bank run to bacon run.

    In an ominous confirmation of the just published article “Why The Meat Shortages Are Going To Be Much Worse Than Most Americans Are Anticipating“, the slowdown at meat processing plants from the coronavirus outbreak has led to a wave of panic-shopping at supermarkets, and some grocery stores are now imposing limits on meat purchases.

    In a Friday email, supermarket chain Kroger said that it has put “purchase limits” on ground beef and fresh pork at some of its stores following growing concerns over meat shortages due to coronavirus-induced supply disruptions. Other large grocers say they expect to be out of stock on different types of cuts soon.

    The world’s biggest meat companies, including Smithfield Foods, Cargill, Conagra, JBS and Tyson Foods have halted operations at about 20 slaughterhouses and processing plants in North America as workers fall ill, stoking global fears of a meat shortage.

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    The United Food and Commercial Workers International Union estimated on April 28 that 20 meatpacking and food processing workers have died so far, and just today at least 180 workers tested positive for the virus at a Tyson plant in Washington. The union said last week the closures have resulted in a 25% reduction in pork slaughter capacity and a 10 percent reduction in beef slaughter, the Epoch Times reported.

    Earlier this week, President Trump signed an executive order compelling meat plants to stay open during the crisis, which however was met with stiff resistance by labor unions, due to the lack of proper health standards at the plants.

    Adding to the challenge, meat sales are up around 40% on recent weeks, according to data from grocery industry trade group FMI. “The demand for product also makes it difficult to keep the store shelves stocked as they were at pre-pandemic levels,” said a group spokesperson.

    While grocers don’t expect meat shortages – yet – they say they are adjusting to the spike in demand and the difficulties securing supply, similar to McDonalds which said on Thursday it had started to ration meet amid supply chain “concerns.”

    “We feel good about our ability to maintain a broad assortment of meat and seafood for our customers because we purchase protein from a diverse network of suppliers,” said a Kroger representative. “There is plenty of protein in the supply chain. However, some processors are experiencing challenges.”

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    A spokesperson for Wegman’s said, “we may not have every product cut or variety available for the next few weeks,” but the company does not anticipate any shortages. We’ll check back in a few weeks to see if the shortages have begun.

    The slowdown is also hitting smaller chains: New York City grocery chain Morton Williams’ co-owner Avi Kaner said the “most severe shortages have been with packaged cold cuts,” because consumers want pre-packaged items right now instead of meat from the deli counter. “Beef prices have increased the most, followed less so by pork and poultry.”

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    Worker cleans an empty display for eggs inside a Ralphs supermarket in Los Angeles, Calif., on March 15, 2020

    At Karns Food in Pennsylvania, the chain has put limits on ground beef and some fresh chicken. “We do anticipate periodic out of stocks and higher prices in the coming weeks,” said Andrea Karns, a representative of Karns Food in Pennsylvania.

    While meat may be harder to find, Karns is using the shortage as an opportunity to expand its seafood selection, including fresh lobsters from Maine and Maryland crabs. Now if only the vast majority of America’s population which hasn’t worked in over a month could afford lobsters and crabs…


    Tyler Durden

    Fri, 05/01/2020 – 19:10

  • Biden Bumbles Over Tara Reade Answers During Tense MSNBC Interview
    Biden Bumbles Over Tara Reade Answers During Tense MSNBC Interview

    Joe Biden’s personnel records from his days in the Senate have come under the microscope after former staffer Tara Reade says she filed a formal sexual assault complaint against him – an allegation he officially denied on Friday.

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    Biden, who graduated from the University of Delaware and served as Delaware’s senator, transferred the records to the university in 2011 – which announced a change to their expected unsealing shortly before Biden announced his bid for the White House. Meanwhile, Biden has refused to allow a search of the roughly 1,875 boxes of documents and 415 gigabytes of electronic records, as detailed yesterday by Jonathan Turley.

    Biden’s excuse? That the records could expose unrelated things he’s said or done which could be ‘taken out of context’ and used against him before the November election.

    On Friday, however, Biden stammered through an awkward MSNBC interview in which host Mika Brzezinski pressed him on whether he would allow a narrow search for records only pertaining to Tara Reade.

    Brzezinski: Personnel records aside, are you certain there was nothing about Tara Reade in those records – and if so, why not approve a search of her name in those records?

    Biden: Approve a search of her name?

    Brzezinski: Yes, and reveal anything that might be related to Tara Reade in the University of Delaware records?

    Biden: There is nothing. They wouldn’t… They’re not there. And I, I, I… you know, I don’t understand the point you’re trying to make! There are no personnel records by definition.

    …

    Brzezinski: I’m just talking about her name, not anybody else in those records – a search for that. [awkward silence] Why not do a search for Tara Reade’s name in the University of Delaware records.

    Biden: Look, I mean, who does that search?

    Brzezinski: Perhaps the University of Delaware?

    Watch (University of Delaware question starts at 55 seconds):

    Turley weighs in:

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    Tyler Durden

    Fri, 05/01/2020 – 18:55

  • SUVs Are Being Parked In The Middle Of The Ocean As Auto Inventory Crisis Deepens
    SUVs Are Being Parked In The Middle Of The Ocean As Auto Inventory Crisis Deepens

    What happens when you have an auto glut that simply won’t go away? What do you do with all of those unsold cars? It’s a question we first explored way back in 2014 in an article called “Where the World’s Unsold Cars Go to Die”. In that piece, we highlighted images from around the world of various places unsold cars were being stored. 

    Back then, we could have never predicted that a pandemic would be the black swan that would have caused the next historic buildup of auto inventory. But now, with ports at capacity, tankers carrying automobiles – at least those tanker that aren’t carrying oil – are being told to stay out at sea.

    Such was the case on April 24 when a cargo of 2,000 Nissan SUVs was approaching the port of Los Angeles. They were told to drop anchor about a mile from the port and remain there. The port was full and the glut is indicative of just how the industry has collapsed in the U.S. 

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    John Felitto, a senior vice president for the U.S. unit of Norwegian shipping company Wallenius Wilhelmsen told Bloomberg: “Dealers aren’t really accepting cars and fleet sales are down because rental-car and fleet operators aren’t taking delivery either. This is different from anything we’ve seen before. Everyone is full to the brim.”

    Though the Nissan shipment was eventually received 5 days later, Kipling Louttit, executive director of the Marine Exchange of Southern California said: “It is very abnormal for a container ship, a car carrier or a cruise ship not to go right to the berth, discharge and be on their way.”

    The Long Beach terminal south of LA is capable of storing several thousand vehicles. Cars usually spend a short amount of time there before being relocated to lots 5 to 8 miles away. Then, they’re sent to dealers. 

    But the collapse in sales last month caused a backlog buildup. Ships had to divert to other ports and others had to wait to discharge cargo. The Port of Hueneme needed to find space for an additional 6,000 surplus cars. Kristin Decas, the port’s director and chief executive officer said: “You can’t stack cars. We even looked at using the Ventura County Fairgrounds.”

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    Toyota has gone as far as to lease additional space at a sports venue in California. Hyundai also found additional space and has said that its West Coast inventories were “elevated”. 

    Nissan spokesman Chris Keeffe said: “The company is optimizing the flow of the vehicles and positioning them closer to dealers for quick availability when the market recovers and customers return to showrooms.”

    Demand for cars and trucks in the U.S. is expected to drop 27% to 12.5 million vehicles this year, according to Bloomberg. Recall, we wrote just yesterday that Edmunds shared those sentiments: April is slated to be the worst month on record for U.S. auto sales. 

    Edmunds forecasts that just 633,260 new cars and trucks will be sold in the U.S. for an estimated seasonally adjusted annual rate (SAAR) of 7.7 million. This reflects a 52.5% decrease in sales from April 2019, and a 36.6% decrease from March 2020.

     

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    Edmunds analysts note that this would be the lowest-volume sales month on record; the second worst month for sales in the past 30 years was January of 2009, when 655,000 vehicles were sold.

    “April auto sales took the biggest hit we’ve seen in decades,” said Jessica Caldwell, Edmunds’ executive director of insights.

    “These bleak figures aren’t just because consumers are holding back on their purchases — fleet sales are seeing an even more dramatic drop as daily rental business has dried up. Like many other industries, the entire automotive sector is struggling as the coronavirus crisis continues to cripple the economy.”


    Tyler Durden

    Fri, 05/01/2020 – 18:45

Digest powered by RSS Digest

May 01

Today’s News 1st May 2020

  • Swiss Health & Tranquility Law Sparks "Desperate" Snitching To Counter Lockdown-Deniers
    Swiss Health & Tranquility Law Sparks “Desperate” Snitching To Counter Lockdown-Deniers

    A post-corona world has given rise to corona-moral shaming is translating into people snooping and snitching on their neighbors who break social distancing rules to police and town authorities.

    Folks in Switzerland have taken snooping and snitching to an entirely different level during lockdowns, as many have used private detectives to do their dirty work, reported Reuters. 

    Christian Sideris, the founder of Seeclop, a Geneva-based private eye, has said requests for snooping on neighbors have been extraordinary, considering people have been confined to their homes for at least a month, many are living in frustrations of others around them.  

    “We have a lot of these types of cases because people are confined and on top of each other all day,” Sideris said, describing some callers as “desperate.”

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    He said requests to snoop on neighbors in pre-corona times was generally 2-4 times per year, but since the lockdown, he said his phone has been ringing non-stop. 

    “The Swiss are known for complaining about their neighbors, often using rules designed to keep the noise down. These are rigorously enforced in Geneva, where 16th Century protestant reformer John Calvin banned instrumental music when he was in charge,” Reuters noted. 

    Geneva’s Public Health and Tranquility Law are relatively strict, and people generally use these rules to enforce peace and quiet among neighborhoods. In some cases, playing a musical instrument or doing home construction after 9 pm can result in a $10,000 fine. 

    Police said noise complaints have doubled in April to 1,233 during the lockdowns. People have called the cops on their neighbors for kids playing soccer inside and late-night home improvements. It was even to the point, police said that someone called them as a neighborhood choir, intended to lift spirits, was singing to loud.

    Snooping and snitching are not just limited to parts of Europe, but we have explained before, the US government has asked citizens to do the spying for them. We have covered this topic on several occasions, read “Concerned Citizens Or Rats? Americans Snitch On Local Businesses & Neighbors Amid Shutdowns” and “”Just Snap A Photo” – De Blasio Explains How To Snitch On Fellow New Yorkers Breaking Social Distancing Rules.” 


    Tyler Durden

    Fri, 05/01/2020 – 02:35

  • A Protest From France: "Rule By Experts" Is A Grave Error
    A Protest From France: “Rule By Experts” Is A Grave Error

    Authored by Jörg Guido Hülsmann via The Mises Institute,

    After WWI, the distinguished British economist Edwin Cannan was asked, somewhat reproachfully, what he did during the terrible war years. He replied: “I protested.” The present article is a similar protest against the current lockdown policies put into place in most countries of the Western world to confront the current coronavirus pandemic.

    Here in France, where I live and work, President Macron announced on Thursday, March 12, that all schools and universities would be shut down on the following Monday. On that Monday, then, he appeared on TV again and announced that the entire population would be confined starting the very next day. The only exceptions would be “necessary” activities, especially medical services, energy production, security, and food production and distribution. This policy response was apparently coordinated with other European governments. Italy, Germany, and Spain have applied essentially the same measures.

    I think that these policies are understandable and well intentioned. Like many other commentators, I also think that they are wrongheaded, harmful, and potentially disastrous. An old French proverb says that the way to hell is plastered with good intentions. Unfortunately, it seems as though the present policies are no exception.

    My protest concerns the basic ideas that have motivated these policies. They were clearly enunciated by President Macron in his TV address of March 12. Here he made three claims that I found most intriguing.

    • The first one was that his government was going to apply drastic measures to “save lives” because the country was “at war” with the COVID-19 virus. He repeatedly used the phrase “we are at war” (nous sommes en guerre) throughout his talk.

    • Secondly, he insisted right at the very beginning that it was imperative to heed the advice of “the experts.” Monsieur Macron literally said that we all should have to listen to and follow the advice of the people “who know”—meaning who know the problem and who know how best to deal with it.

    • His third major point was that this emergency situation had revealed how important it was to enjoy a state-run system of public healthcare. How lucky are we to have such a system and to be able to rely on it, now, in the heat of the war against the virus! Unsurprisingly, the president insinuated that this system would be reinforced in the future.

    Now, these are not the private ideas of Monsieur Macron. They are shared by all major governments in the EU and by many governments in other parts of the world. They are also shared by all major political parties here in France, as well as by President Macron’s predecessors. Therefore, the purpose of the following remarks is not to criticise the president of this beautiful country, or his government, or any person in particular. The purpose is to criticise the ideas on which the current policy is based.

    I do not have any epidemiological knowledge or expertise. But I do have some acquaintance with questions of social organisation, and I am also intimately familiar with scientific research and with the organisation of scientific research. My protest does not concern the medical assessment of the COVID-19 virus and its propagation. It concerns the public policies designed to confront this problem.

    As far as I can see, these policies are based on one extraordinary claim and two fundamental errors. I will discuss them in turn.

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    An Extraordinary Claim

    The extraordinary claim is that wartime measures such as confinement and shutdowns of commercial activity are justified by the objective of “saving lives” that are at risk because of the burgeoning coronavirus pandemic.

    Over here in Europe, we have heard American presidents use such expressions since the 1960s, as in “the war on poverty” or the “war on drugs” or “the war on terrorism” or more recently “the war on climate change.” Odd language of this sort seemed to be one of America’s many eccentricities. It also did not escape our notice that none of these would-be wars have ever been won. Despite the great sums of money that the US government has spent to fight them, despite the new state institutions that were put in place, and despite the great and growing infringements on the economic and civil liberties of ordinary Americans, the problems themselves never went away. Quite the opposite; they were perpetuated and aggravated.

    Most of the European governments have now joined ranks with the Americans and consider that they, too, are at war—with a virus. It is therefore appropriate to insist that this is metaphorical language. A war is a military conflict designed to protect the state—and thus of the very institution that is commonly held to guarantee the lives and liberties of the citizens—against malicious attack from an outside power, usually another state. In a war, the very existence of the state is under attack. Clearly, this is not so in the present case.

    Moreover, there can be no war with a virus, simply because a virus does not act. At most, therefore, the word “war” can be used here metaphorically. It then serves as a cover and justification of infringements of the very civil and economic liberties that the state is supposed to protect.

    Now, in the traditional conception, the state is supposed to protect and promote the common good. Protecting the lives of the citizens might therefore, arguably, justify massive state interventions. But then the very first question should be: How many lives are at stake? Government epidemiologists, in their most dire estimates—whose factual basis is still not solidly established—have considered that about 10 percent of the infected persons might be in need of hospital care and that a large part of those would die. It was also already known by mid-March that this mortal threat in the great majority of cases concerned very old people, the average COVID-19 victim being around eighty years of age.

    The claim that wartime measures, which threaten the economic livelihood of the great majority of the population and also the lives of the poorest and most fragile people of the world economy—a point on which I will say more below—are in order to save the lives of a few, most of whom are close to death anyway, is an extraordinary claim, to say the least.

    Without going into any detail, let me just highlight that this contention squarely contradicts the abortion policies that Western governments have applied since the 1970s. There, the reasoning was exactly the other way around. The personal liberty and comfort of the women who wished to abort their children was given priority over the right to lives of these yet unborn children. According to World Health Organization (WHO) figures, each and every year, some 40–50 million babies are aborted worldwide. In 2018 alone, more than 224,000 babies have been aborted in France. However serious the current COVID-19 pandemic may yet become, it will remain a small fraction of these casualties. Not only have governments neglected to “save lives” when it comes to abortions. They have in point of fact condoned and funded the killing of human beings on a massive scale.

    They still do so now. Here in France, all hospital services have been run down to free up capacity for the treatment of COVID-19 victims—all except one. Abortion services run unabated and have recently been reinforced by the legal obligation for hospital staff to provide abortions (previously it was possible for individual doctors to refuse this out of personal conviction).

    The pretention that drastic policies are justified in order to “save lives” also flies into face of past policy in other areas. In the past, too, it would have been possible to “save lives” by allocating a greater chunk of the government’s budget to state-run hospitals, by further reducing speed limits on highways, by increasing foreign aid to countries on the brink of starvation, by outlawing smoking, etc. To be sure, I do not wish to make a case for such policies. My point is that it has never been the sole or highest goal of government policy to “save lives” or to extend them as much as possible. In fact, such a policy would be utterly absurd and impractical, as I will explain further below.

    It is difficult to avoid the impression that the “war to save lives” is a farce. The truth seems to be that the COVID-19 crisis has been used to extend the powers of the state. The government obtains the power to control and paralyse all other human concerns in the name of prolonging the lives of a select few. Never has this principle been admitted in a free country. Few tyrannies have managed to extend their power this far.

    The current beneficiaries of these new powers are the elder citizens and a few others. But make no mistake. It is likely that their destinies only serve as a pretext to justify the creation of new and unheard-of powers for the state. Once these new powers are firmly established, there is no reason why the elderly should remain especially dear to those in power. It must be feared that the very opposite will be the case.

    Now, in order to avoid any misunderstanding, I do not claim that the present French government seeks to grab power over life-and-death decisions, or dictatorial powers to introduce socialism through the backdoor under the cover of COVID-19. In fact, I cannot imagine that Monsieur Macron and his government are driven by sinister motivations. I think they have the best of all intentions. But the point here is precisely that there is a difference between doing good and wishing to do good.

    A Grave Error: Rule by Experts

    So far, I have commented on a political issue. But there are also matters of fact. And this brings me to the two aforementioned errors.

    The first fundamental error is to hold that is that the experts know and all the rest of us should trust them and do as they tell us.

    The truth is that even the most brilliant academics and practitioners have in-depth knowledge only in a very narrow field; that they have no particular expertise when it comes to devising new practical solutions; and that their professional biases are likely to induce them into various errors when it comes to solving large-scale social problems such as the current pandemic. This is patent in my own discipline, economics, but not really different in other academic fields. Let me explain this in some more detail.

    The kind of knowledge that can be acquired by scientific research is just a preliminary to action. Research gathers facts and yields partial knowledge of causal connections. Economics tells us, for example, that the size of the money stock is positively related to the level of unit prices. But this is not the whole picture. Other causes come into play as well. Real-world decision-making cannot just rely on facts and other bits of partial knowledge. It must weigh the influence of a multitude of circumstances, not all of which are well known, and not all of which are directly related to the problem at stake. It must come to balanced conclusions, sometimes under rapidly changing circumstances.

    In this respect, the typical expert is no expert at all. How many laureates of the Nobel Prize in economics have earned any significant money by investing their savings? How many virologists or epidemiologists have established and operated a privately run clinic or laboratory? I would never trust a colleague who had the folly to volunteer to direct a central planning board. I do not trust an epidemiologist who has the temerity to parade as a COVID-19 czar. I do not believe a government that tells me that it somehow knows “the experts” who know best how to protect and run an entire country.

    Furthermore, consider that scientific knowledge is, at best, a state of the art. The precious thing about science is not to be seen in the results, which are hardly ever final. What is crucial is the scientific process, which is a competitive process based on disagreements about the validity and relevance of different research hypotheses. This process is especially important when it comes to new problems—such as a new virus which spreads in unheard-of ways and has unheard-of effects. It is precisely in such circumstances, when the stakes are high, that the impartial confrontation and competitive exploration of different points of view is of paramount importance. Research czars and central planners are here of no use at all. They are part of the problem, not part of the solution.

    A government which bets the house on one horse and hands the management of a pandemic over to a single person or institution achieves, at best, only one thing: that all citizens receive the same treatment. But it thereby slows down the very process which leads to the discovery of the best treatments, and which makes these treatments rapidly available to the greatest number of patients.

    It is also important to keep in mind that academics—and this includes epidemiologists just as much as economists and lawyers—are typically government employees and that this colours their approach to any practical problem. They are likely to think that serious problems, especially large-scale problems touching most or all citizens, should be solved by state intervention. Many of them are in fact incapable of imagining anything else.

    This problem is reinforced through a nefarious selection bias. Indeed, those academics who opt for an administrative or political career, and who make it into the higher ranks of the civil service, cannot fail to be convinced that state action is suitable and necessary to solve the most important problems. Otherwise they would hardly have chosen such careers, and it would also be virtually out of the question that for them to end up in leadership positions. A good example among many others is the current WHO director Tedros Adhanom, who I understand is a former member of a communist organisation. The point is not that a WHO director should have no political opinions or that Dr. Adhanom is an evil or incompetent person. The point is that it is unsurprising that men like him occupy leadership positions in state-run organisations, and that the approach he envisions to deal with a pandemic is likely to be coloured by his personal political preconceptions, not only by medical information and good intentions.

    Another Momentous Error: Neglect of Economics

    Along with such selection bias comes a peculiar ignorance in regard to the functioning of complex social orders. This brings me to the second fundamental error that vitiates the COVID-19 policies. It consists in thinking that civil and economic liberties are some sort of a consumers’ good—maybe even a luxury good—that can only be allowed and enjoyed in good times. When the going gets tough, the government needs to take over and all others should step back—into confinement if necessary.

    This error is typical for people who have spent too much time among politicians and in public administrations. The truth is that civil and economic liberty is the most powerful vehicle to confront virtually any problem. (The notable exception is that liberty does not help to consolidate political power.) And the reverse side of the same truth is that governments typically fail whenever they set out to solve social problems, even very ordinary problems. Think of state-run education or housing projects. I will return to this point further below.

    Because of the mechanics of the political process, governments are liable to overreact to any problem that is big enough to make it into the news and to become an issue for voters. Governments will then typically zoom in on this one problem. In their perception, it becomes the most important of all problems that humanity has to solve. If such a government has no clue about economics, it is liable to propose one-plan technical solutions that completely neglect the social and political dimension of what it means to solve a problem. In the present case, the “experts” have blithely proposed to shut down the entire economy because this is what “works.”

    Now, I do not contest that shutdowns are effective in slowing down the transmission speed of a pandemic. I have no opinion at all on the most suitable way to deal with pandemics or other problems of virology or medicine. But as an economist I know the crucial importance of the fact that there is never ever only one single goal in human life. There is always a great and diverse array of objectives that each of us pursues. The practical problem for each person is to strike the right balance, most notably to act in the right temporal sequence. Translated to the level of the economy as a whole, the problem is to allocate the right amounts of time and material resources to the different objectives.

    For most people, protecting their own lives and the lives of their families has a very high importance. But irrespective of how important this objective is, in practice it cannot be perfectly achieved. To protect my life, I need food. Thus, I need to work. Thus, I need to expose myself to all kinds of risks that are associated with leaving the safe space of my house and encountering nature and other humans. In short, human lives cannot be perfectly protected, even by those who are ready to subordinate everything else to doing so. It is a practical impossibility. When it comes to protecting lives, the only question is: how much am I willing to risk my life and the lives of those who depend on me? And it more than often turns out that by risking much one protects best. What holds true for the eternal life of one’s soul also holds true for the mundane material life down here on earth: “For whoever wishes to save his life will lose it, but whoever loses his life for my sake will find it” (Matt 16:25).

    Now, most people do not actually cherish the preservation of their lives, or the extension of their life spans, as the single highest goals. Smokers, meat eaters, drinkers prefer a shorter, more joyful life, to a longer life of abstinence. Policemen, soldiers, and many citizens are more than often driven by the love of their country and by a love of justice. They would rather die than live under slavery or tyranny. Priests would risk their lives rather than forsake their commitment. A believer in Christ would rather risk death than apostasy. Sailors risk their own lives to provide for their families. Medical doctors and nurses are willing to risk their lives to help patients with infectious diseases. Rugby players and racecar drivers risk their lives not only for the glory of winning, but also for the excitement and satisfaction that comes with performing well under danger. Many young men and women gladly trade the excitement of dance for the risk of catching COVID-19.

    All of these people, in one way or another, make material contributions to the livelihood of all others. Smokers and drinkers ultimately pay for their consumption, not with money (which serves them only as a tool for exchange with others), but with the goods and services that they themselves provide to others. If they could not indulge in their consumption, their motivation to help others would diminish or vanish altogether. If policemen, soldiers, sailors, and nurses did not have a relatively low risk-aversion, their services would be provided only at much higher cost, and possibly not at all.

    The preferences and activities of all market participants are interdependent. In the market order, each one helps all others in pursuing their goals, even if these goals may ultimately contradict his own. The meat eater might be a mechanic who repairs the cars of vegetarians, or an accountant who does the bookkeeping for a vegetarian NGO. The soldier also protects pacifists. Among the pacifists may be farmers who grow the food consumed by soldiers, etc.

    It is impossible to disentangle all of these connections, and it is not necessary. The point is that in a market economy the factors determining the production of any economic good are not just technical. Through exchange, through the division of labour, all production processes are interrelated. The effectiveness of doctors and nurses and their assistants does not only depend on the people who directly supply them with the materials that they need. Indirectly, it also depends on the activities of all other producers who do not have the slightest thing to do with medical services in hospitals. Even in an emergency situation, it is therefore necessary to respect the needs and priorities of these others. Locking them away, locking them down, far from facilitating the operation of hospitals, will eventually come to haunt the latter as well when supply chains wither and consumer staples start lacking.

    Now one might contend that such consequences only obtain in the longer run and that a government confronted with an emergency situation needs to neglect long-run issues and focus on the short-run emergency. This sounds reasonable, which is why governments have appealed to arguments of this sort with great regularity in other areas, most notably to justify expansionary macroeconomic policies, which also trade off the present against the future.

    But the reasoning is flawed in the present case. The root of the error is to consider the COVID-19 virus an immediate threat to human lives whereas the lockdown policies are not. But this is not the case. How many people have committed suicide because the lockdown measures have driven them to depression and insanity? How many did not receive life-saving treatments because hospital beds and staff were restricted to COVID-19 victims? How many have become victims at home because of the lockdown-induced aggression of their spouses? How many have lost their jobs, their companies, their wealth, and will be driven to suicide and aggression in the months to come? How many people in the poorest countries of the world economy are now driven to starvation because households and firms in the developed world have cut back demand for their products?

    The inevitable conclusion is that, even in the short run, lockdown policies are costing the lives of many people who would not otherwise have died. In the short and in the long run, the current lockdown policy does not serve to “save lives,” but to save the lives of some people at the expense of the lives of others.

    Conclusion

    The lockdown policies are understandable as a panic reaction of political leaders who want to do the right thing and who have to make decisions with incomplete information. But upon reflection—and certainly in hindsight—they are not good policy. The lockdowns of the past month have not been conducive to the common good. Although they have saved the lives of many people, they have also endangered—and are still endangering—the lives and livelihoods of many others. They have created a new and dangerous political precedent. They have reinforced the political regime uncertainty—to use Robert Higgs’s felicitous phrase—that bears on the choices of individuals, families, communities, and firms in the years to come.

    The right thing to do now is to abandon these policies swiftly and entirely. The citizens of free countries are able to protect themselves. They can act individually and collectively. They cannot act well when they are locked down. They will greet any honest and competent advice on what they can and should do, upon which they will proceed responsibly, whether alone or in coordination with others.

    The greatest danger right now is in the perpetuation of the ill-conceived lockdowns, most notably under the pretext of “managing the transition” or other spurious justifications. Is it really necessary to walk through the endless list of management failures of government agents? Is it necessary to remind ourselves that people who have no skin in the game are irresponsible in the true sense of the word? These would-be managers should have stayed out of the picture from the very beginning. Instead, so far, they have managed to get everybody else out of the picture. If they are allowed to go on, they might very well turn the present calamity—big as it is—into a true disaster.

    The historical precedent that comes to mind is the Great Depression of the 1930s. Then, too, the free world was confronted with a painful recession, when the implosion of the stock market bubble entailed a deflationary meltdown of the financialised economy, along with massive unemployment. This recession, dire as it was, could have remained short, as all the previous recessions in the US and elsewhere had been. Instead it was turned into a multiyear depression, thanks to folly of FDR and his government, who had the pretention of managing the recovery with government spending, nationalisations, and price controls.

    It is not too late. It is never too late to recognise an honest error and correct a wrong course of action. Let us hope that President Macron, President Trump, and all other people of goodwill may rapidly come to their senses.


    Tyler Durden

    Fri, 05/01/2020 – 02:00

  • China's 'Belt And Road' Partners Beg Beijing For Bilateral Bailouts
    China’s ‘Belt And Road’ Partners Beg Beijing For Bilateral Bailouts

    China’s cash-strapped partners in their “Belt and Road” (BRI) global development project have been begging Beijing for debt relief amid the coronavirus pandemic, according to the Financial Times.

    And according to Chinese policy advisers, the Xi regime is considering several options – including suspending interest payments on loans from the country’s financial institutions. That said, outright debt forgiveness is unlikely.

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    According to Washington-based consultancy RWR Advisory, Chinese financial institutions have lent an estimated $461bn for BRI projects since 2013 – making it the largest development initiative in the world.

    “We understand a lot of countries are looking to renegotiate loan terms,” said one researcher at China Development Bank, which spearheads hundreds of billions of dollars in BRI projects globally along with the Export-Import Bank of China.

    “But it takes time to strike a new deal and we cannot even travel abroad right now. The BRI loans are not foreign aid. We need to at least recoup principal and a moderate interest,” said the researcher on condition of anonymity.

    “It is OK for 20 per cent of our portfolio projects to have problems,” they added, “But we can’t tolerate half of them going under. We might consider extending loans and giving interest relief. But in general our loans are issued according to market principles.”

    The BRI, which was launched in 2013 as the signature foreign policy initiative of President Xi Jinping, is aimed at building infrastructure and boosting China’s influence around the world. Most of the 138 countries that have officially signed up to the BRI are developing nations, many with the weakest credit ratings in the world. -Financial Times

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    In particular, BRI partners in several African nations – which have received approximately $143bn in BRI loans between 2000 and 2017 – are understood to have applied for debt relief.

    A policy adviser to the Chinese government, who declined to be identified, said that Beijing’s preferred option in dealing with national requests for debt relief would be to “suspend interest payments” on loans.

    However, some borrowers with “good market order” may be allowed to reschedule their loans. Forgiving debt permanently would be a “last option”, the adviser said. -Financial Times

    Earlier this month China agreed to freeze bilateral loan repayments for low-income countries until the end of the year, agreeing to a G20 initiative which covered “all official bilateral creditors,” including lending from Chinese policy banks.

    That said, diplomats say that the process of sifting through which loans from various countries would be eligible, while negotiations are being undertaken with China on a bilateral basis. According to the FT, China consequently has a ton of leverage.

    According to researcher Mei Guanqun of the Beijing think-tank China Center for International Economic Exchanges, China has yet to solidify plans for dealing with the mounting debt-relief requests.

    “But there are a few rules of thumb,” he said. “First, China’s commercial banks like [Bank of China] and [Industrial and Commercial Bank of China] are unlikely to forgive loans because they are under pressure from Beijing to meet financial targets.”

    “Second, China Development Bank and China ExIm Bank may provide sovereign loan relief to countries that are friendly with us,” added Mei. “We may cut interest rates by a few percentage points or have it removed. We could also reduce principal payment by a moderate amount. The idea is to keep borrowers from going under, which may undermine our interest.”

    According to Andrew Davenport, COO of RWR Advisory, Beijing is concerned that BRI will be interpreted to have resulted in “predatory economic behavior” by which China will be able to claim valuable assets as collateral when countries can’t pay their debts.

    “The narrative certainly matters and indeed they seem to worry about it,” said Davenport. “If they can persuade people not to always be looking at what mischief Beijing is up to but rather to see the ‘goodness’ on offer, that’s a winning formula for China.“


    Tyler Durden

    Fri, 05/01/2020 – 01:10

  • Escobar: Thinking Beyond Planet-Lockdown
    Escobar: Thinking Beyond Planet-Lockdown

    Authored by Pepe Escobar via The Asia Times,

    Between the unaccountability of elites and total fragmentation of civil society, Covid-19 as a circuit breaker is showing how the king – systemic design – is naked. 

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    We are being sucked into a danse macabre of multiple complex systems “colliding into one another,” producing all kinds of mostly negative feedback loops.   

    What we already know for sure, as Shoshana Zuboff detailed in “The Age of Surveillance Capitalism,” is that “industrial capitalism followed its own logic of shock and awe” to conquer nature. But now surveillance capitalism “has human nature in its sights.” 

    In “The Human Planet: How We Created the Anthropocene,” analyzing the explosion in population growth, increasing energy consumption  and a tsunami of information “driven by the positive feedback loops of reinvestment and profit,” Simon Lewis and Mark Maslin of University College, London, suggest that our current mode of living is the “least probable” among several options. “A collapse or a switch to a new mode of living is more likely.” 

    With dystopia and mass paranoia seemingly the law of the (bewildered) land, Michel Foucault’s analyses of biopolitics have never been so timely, as states across the world take over biopower – the control of people’s life and bodies. 

    David Harvey, once again, shows how prophetic  was Marx, not only in his analyses of industrial capitalism but somehow – in “Grundrisse: Foundations of the Critique of Political Economy” – even forecasting the mechanics of digital capitalism: 

    Marx, Harvey writes, “talks about the way that new technologies and knowledge become embedded in the machine: they’re no longer in the laborer’s brain, and the laborer is pushed to one side to become an appendage of the machine, a mere machine-minder. All of the intelligence and all of the knowledge, which used to belong to the laborers, and which conferred upon them a certain monopoly power vis-à-vis capital, disappear.”

    Thus, adds Harvey, “the capitalist who once needed the skills of the laborer is now freed from that constraint, and the skill is embodied in the machine. The knowledge produced through science and technology flows into the machine, and the machine becomes ‘the soul’ of capitalist dynamism.” 

    Living in ‘Psycho-Deflation’

    An immediate – economic – effect of the collision of complex systems is the approaching New Great Depression. Meanwhile, very few are attempting to understand Planet Lockdown in depth – and that goes, most of all, for post-Planet Lockdown. Yet a few concepts already stand out. State of exception. Necropolitics. A new brutalism. And, as we will see, the new viral paradigm.

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    So, let’s review some the best and the brightest at the forefront of Covid-19 thinking. An excellent road map is provided by “Sopa de Wuhan” (“Wuhan Soup’), an independent collection assembled in Spanish, featuring essays by, among others, Giorgio Agamben, Slavoj Zizek, Judith Butler, David Harvey, South Korean Byung-Chul Han and Spaniard Paul Preciado.

    The last two, along with Agamben, were referenced in previous essays in this running series, on the Stoics,  Heraclitus,  Confucius, Buddha and Lao Tzu, and contemporary philosophy examining The City under The Plague. 

    Franco Berardi, a 1968 student icon now professor of philosophy in Bologna, offers the concept of “psycho-deflation” to explain our current predicament. We are living a “psychic epidemic … generated by a virus as the Earth has reached a stage of extreme irritation, and society’s collective body suffers for quite a while a state of intolerable stress: the illness manifests itself at this stage, devastating in the social and psychic spheres, as a self-defense reaction of the planetary body.” 

    Thus, as Berardi argues, a “semiotic virus in the psycho-sphere blocks the abstract functioning of the economy, subtracting bodies from it.” Only a virus would be able to stop accumulation of capital dead in its tracks: “Capitalism is axiomatic, works on a non-verified premise (the necessity of unlimited growth which makes possible capital accumulation). 

    Every logical and economic concatenation is coherent with this axiom, and nothing can be tried outside of this axiom. There is no political way out of axiomatic Capital, there’s no possibility of destroying the system,” because even language is a hostage of this axiom and does not allow the possibility of anything “efficiently extra-systemic.”

    So what’s left? “The only way out is death, as we learned from Baudrillard.” The late, great grandmaster of simulacrum was already forecasting a systemic stall back in the post-modernist 1980s.  

    Croatian philosopher Srecko Horvat , in contrast, offers a less conceptual and more realist hypothesis about the immediate future: “The fear of a pandemic is more dangerous than the virus itself. The apocalyptic images of the mass media hide a deep nexus between the extreme right and the capitalist economy. Like a virus that needs a living cell to reproduce itself, capitalism will adapt itself to the new 21st century biopolitics.”   

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    Workers disinfecting street in Tehran during Covid-19 pandemic, March 19, 2020. (Tasnim News Agency, CC BY 4.0, Wikimedia Commons)

    For the Catalan chemist and philosopher Santiago Lopez Petit, coronavirus can be seen as a declaration of war: “Neoliberalism unabashedly dresses up as a war state. Capital is scared,” even as “uncertainty and insecurity invalidate the necessity of the same state.” Yet there may be creative possibilities when “obscure and paroxistic life, incalculable in its ambivalence, escapes algorithm.” 

    Our Normalized Exception 

    Giorgio Agamben caused immense controversy in Italy and across Europe when he published a column in late February on “the invention of an epidemic.” He later had to explain  what he meant. But his main insight remains valid: The state of exception has been completely normalized. 

    And it gets worse: “A new despotism, which in terms of pervasive controls and cessation of every political activity, will be worse that the totalitarianisms we have known so far.”  

    Agamben redoubles his analyses of science as the religion of our time: “The analogy with religion is taken literally; theologians declared that they could not clearly define what is God, but in his name they dictated rules of conduct to men and did not hesitate to burn heretics. Virologists admit they don’t know exactly what is a virus, but in its name they pretend to decide how human beings shall live.”     

    Cameroonian philosopher and historian Achille Mbembe, author of two indispensable books, “Necropolitics” and “Brutalisme,”has identified the paradox of our time: “The abyss between the increasing globalization of problems of human existence and the retreat of states inside their own, old-fashioned borders.”   

    Mbembe delves into the end of a certain world, “dominated by giant calculation devices,” a “mobile world in the most polymorphous, viral and near cinematic sense,” referring to the ubiquity of screens (Baudrillard again, already in the 1980s) and the lexicography, “which reveals not only a change of language but the end of the word.” 

    Here we have Mbembe dialoguing with Berardi – but Membe takes it much farther: “This end of the word, this definitive triumph of the gesture and artificial organs over the word, the fact that the history of the word ends under our eyes, that for me is the historical development par excellence, the one that Covid-19 unveils.” 

    The political consequences are, inevitably, dire: “Part of the power politics of great nations does not lie in the dream of an automated organization of the world thanks to the manufacturing of a New Man that would be the product of physiological assemblage, a synthetic and electronic assemblage, and a biological assemblage? Let’s call it techno-libertarianism.”

    This is not exclusive to the West: “China is also on it, vertiginously.” 

    This new paradigm of a plethora of automated systems and algorithmic decisions “where history and the word don’t exist anymore is in frontal shock with the reality of bodies in flesh and bones, microbes, bacteria and liquids of all sorts, blood included.”

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    Rendering of Open Cobalt 3D hyperlinks connecting five virtual spaces. (Julian Lombardi, CC BY-SA 3.0, Wikimedia Commons)

    The West, argues Mbembe, chose a long time ago to “imprint a Dionysiac course to its history and take the rest of the world with it, even if it doesn’t understand it. The West does not know anymore the difference between beginning and ending. China is also on it. The world has been plunged into a vast process of dilaceration where no one can predict the consequences.”      

    Mbembe is terrified by the proliferation of “live manifestations of the bestial and viral part of humanity,” including racism and tribalism. 

    This, he adds, conforms our new viral paradigm. 

    His analysis certainly dovetails with Agamben’s: “I have a feeling that brutalism is going to intensify under the techno-libertarianism drive, be it under China or hidden under the accoutrements of liberal democracy. Just like 9/11 opened the way to a generalized state of exception, and its normalization, the fight against Covid-19 will be used as a pretext to move the political even more towards the domain of security.”

    “But this time”, Mbembe adds, “it will be a security almost biological, bearing with new forms of segregation between the ‘immunity bodies’ and ‘viral bodies’. Viralism will become the new theatre for fractioning populations, now identified as distinct species.”

    It does feel like neo-medievalism, a digital re-enacting of the fabulous “Triumph of Death” fresco in Palermo. 

    Poets, Not Politicians 

    It’s useful to contrast such doom and gloom with the perspective of a geographer. Christian Grataloup, who excels in geo-history, insists on the common destiny of humanity (here he’s echoing Xi Jinping and the Chinese concept of “community of shared destiny”): “There’s an unprecedented feeling of identity. The world is not simply an economic and demographic spatial system, it becomes a territory. Since the Great Discoveries, what was global was shrinking, solving a lot of contradictions; now we must learn to build it up again, give it more consistence as we run the risk of letting it rot under international tensions.”        

    It’s not the Covid-19 crisis that will lead to another world – but society’s reaction to the crisis. There won’t be a magical night – complete with performances by “international community” pop stars – when “victory “will be announced to the former Planet Lockdown. 

    What really matters is a long, arduous political combat to take us to the next level. Extreme conservatives and techno-libertarians have already taken the initiative – from refusal of any taxes on the wealthy to support the victims of the New Great Depression to the debt obsession that prevents more, necessary public spending.   

    In this framework, I propose to go one step beyond Foucault’s biopolitics. Gilles Deleuze can be the conceptualizer of a new, radical freedom. Here is a delightful British series that can be enjoyed as if it were a serious Monty Python-ish approach to Deleuze. 

    Foucault excelled in the description of how meaning and frames of social truth change over time, constituting new realities conditioned by power and knowledge. 

    Deleuze, on the other hand, focused on how things change. Movement. Nothing is stable. Nothing is eternal. He conceptualized flux – in a very Heraclitean way. 

    New species (even the new, AI-created Ubermensch) evolve in relation with their environment. It’s by using Deleuze that we can investigate how spaces between things create possibilities for The Shock of the New. 

    More than ever, we now know how everything is connected (thank you, Spinoza). The (digital) world is so complicated, connected and mysterious that this opens an infinite number of possibilities.

    Already in the 1970s, Deleuze was saying the new map – the innate potentially of newness – should be called “the virtual.” The more living matter gets more complex, the more it transforms this virtual into spontaneous action and unforeseen movements. 

    Deleuze posed a dilemma that now confronts us all in even starker terms. The choice is between “the poet, who speaks in the name of a creative power, capable of overturning all orders and representations in order to affirm difference in the state of permanent revolution which characterizes eternal return: and that of the politician, who is above all concerned to deny that which ‘differs,’ so as to conserve or prolong an established historical order, or to establish a historical order which already calls forth in the world the forms of its representation.”    

    The time calls for acting as poets instead of politicians.

    The methodology may be offered by Deleuze and Guattari’s formidable “A Thousand Plateaus” – significantly subtitled “Capitalism and Schizophrenia,” where the drive is non-linear. We’re talking about philosophy, psychology, politics connected by ideas running at different speeds, a dizzying non-stop movement mingling lines of articulation, in different strata, directed into lines of flight, movements of deterritorialization. 

    The concept of “lines of flight” is essential for this new virtual landscape, because the virtual is conformed by lines of flight between differences, in a continual process of change and freedom. 

    All this frenzy, though, must have roots – as in the roots of a tree (of knowledge). And that brings us to Deleuze’s central metaphor; the rhizome, which is not just a root, but a mass of roots springing up in new directions. 

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    All this frenzy must have roots. (StockSnap from Pixabay)

    Deleuze showed how the rhizome connects assemblies of linguistic codes, power relations, the arts – and, crucially, biology. The hyperlink is a rhizome. It used to represent a symbol of the delightful absence of order in the internet, until it became debased as Google started imposing its algorithms. Links, by definition, always should lead us to unexpected destinations. 

    Rhizomes are the antitheses of those Western liberal “democracy” standard traits – the parliament and the senate. By contrast, trails – as in the Ho Chi Minh trail – are rhizomes. There’s no masterplan. Multiple entryways and multiple possibilities. No beginning and no end. As Deleuze described it, “the rhizome operates by variation, expansion, conquest, capture, offshoot.” 

    This can work out as the blueprint for a new form of political engagement –as the systemic design collapses. It does embody a methodology, an ideology, an epistemology and it’s also a metaphor. The rhizome is inherently progressive, while traditions are static. As a metaphor, the rhizome can replace our conception of history as linear and singular, offering different histories moving at different speeds. TINA (“There is no alternative”) is dead: there are multiple alternatives. 

    And that brings us back to David Harvey inspired by Marx. In order to embark onto a new, emancipatory path, we first have to emancipate ourselves to see that a new imaginary is possible, alongside a new complex systems reality.

    So let’s chill – and de-territorialize. If we learn how to do it, the advent of the New Techno Man in voluntary servitude, remote-controlled by an all-powerful, all-seeing security state, won’t be a given.  

    Deleuze: a great writer is always like a foreigner in the language through which he expresses himself, even if it’s his native tongue. He does not mix another language with his own language; he carves out a non pre-existent foreign language within his own language. “He makes the language itself scream, stammer, murmur. A thought should shoot off rhizomatically – in many directions. 

    I have a cold. The virus is a rhizome. 

    Remember when Trump said this was a “foreign virus?”

    All viruses are foreign – by definition. 

    But Trump, of course, never read “Naked Lunch” by Grandmaster William Burroughs. 

    Burroughs: “The word is a virus.”


    Tyler Durden

    Fri, 05/01/2020 – 00:20

  • CDC Extends Social Distancing Guidelines To Apply To Pets
    CDC Extends Social Distancing Guidelines To Apply To Pets

    Now that the first domesticated dog has tested positive for for the novel coronavirus, joining at least one tiger at the Bronx Zoo, it’s probably worth noting that the CDC earlier this month extended America’s social distancing guidelines to include pets.

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    To be clear: there’s no evidence of pets infecting humans, but that doesn’t mean it can’t happen. So far, tests suggested that the viral strains found in animals weren’t concentrated enough to cause infection in humans, but nobody can say for certain.

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    Instead of allowing your dog to run around the neighborhood without a leash, sniffing the anus of every fellow canine, the new guidelines advise Americans to “treat pets as you would other human family members.”

    “Do not let pets interact with animals or people outside the household,” the CDC said.

    Dog owners should avoid taking their fur-babies to dog parks, or any places where they might risk infection.

    More importantly, the guidelines recommend that “if a person inside the household becomes sick, isolate that person from everyone else, including pets.”

    While the CDC acknowledged that much research still needs to be done, there’s enough evidence now to suggest that pets can be infected by humans.

    Outside the US, a handful of other house pets, including both cats and dogs, have been infected in Japan and in China, according to unconfirmed reports.

     

     


    Tyler Durden

    Fri, 05/01/2020 – 00:00

  • How Fanatics Hack Our Minds (And Why We Let Them)
    How Fanatics Hack Our Minds (And Why We Let Them)

    Authored by Barry Brownstein via The American Institute for Economic Research,

    In his 1841 book Extraordinary Popular Delusions and the Madness of Crowds, Charles MacKay wrote, “During seasons of great pestilence men have often believed the prophecies of crazed fanatics, that the end of the world was coming. Credulity is always greatest in times of calamity.”

    During the COVID-19 crisis, there has been no shortage of “crazed fanatics.”

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    In a recent interview, Bill Gates claimed that “normalcy will only return when we’ve vaccinated the entire global population.” Acknowledging that the “economic hit” will be immense, he proclaimed, “but [we] don’t have a choice.” That is, no choice other than to go down the path Gates prescribes.  

    Then, to deflect criticism from his prescribed path, Gates sets up a mystical strawman opponent who wants to “ignore what’s going on here.” 

    Dr. Ezekiel Emanuel was an architect of Obamacare. Emanuel too proclaimed, “We will not be able to return to normalcy until we find a vaccine or effective medications.” 

    Rhetorically, Emanuel asked, “How are people supposed to find work if this goes on in some form for a year and a half? Is all that economic pain worth trying to stop COVID-19?”

    Emmanuel didn’t invite a dialogue on his questions. He answered his questions with the cry of every other fanatic, “The truth is we have no choice.”

    Fanatics proclaim their way is the only way forward and want us to believe “we have no choice.” 

    Notice, Gates and Emmanuel present a false dilemma, two alternatives: shut down the economy for many months to come or do nothing. You either support the lockdowns, or you’re a threat to public health.

    Gates and Emmanuel refuse to acknowledge other possibilities. They fail to see the limitless possibilities that arise from voluntary adjustments by businesses and individuals.

    Through this COVID-19 crisis, fanatics have weaponized the false dilemma logical fallacy to obscure “rational, honest debate.” “This insidious tactic has the appearance of forming a logical argument, but under closer scrutiny it becomes evident that there are more possibilities than the either/or choice that is presented.”

    You may recognize this tactic in various other forms. You either want educational spending by government to increase, or you’re against education. You either want higher taxes on the “wealthy,” or you want the poor to go without healthcare.

    Foxes and Hedgehogs

    Those who use the false dilemma tactic and think in black and white terms have the worst records as forecasters. In his book, Enlightenment Now, Steven Pinker reports on the research of University of Pennsylvania professor Philip Tetlock, who interviewed 284 forecasters to understand the makeup of an accurate forecaster from the many more who are “often mistaken but never in doubt.”

    Tetlock metaphorically drew on the Greek poet Archilochus who wrote, “The fox knows many things, but the hedgehog knows one big thing.” “The hedgehogs are more the big idea people, more decisive,” Tetlock observes. For forecasters, decisiveness is not a good quality. Don’t rely on the forecasts of hedgehogs.

    A physician with the mindset of a hedgehog might remove your tonsils to cure repeated sore throats. Medical hedgehogs wouldn’t be knowledgeable of dietary and lifestyle changes that could support your health. 

    Pinker warns, those “with Big Ideas—left-wing or right-wing, optimistic or pessimistic—which they held with an inspiring (but misguided) confidence” were the worst forecasters. Having a narrow focus, hedgehogs can’t see the big picture beyond their specialization. In the words of Nobel laureate Daniel Kahneman, they labor under “an enhanced illusion of their skill.” Their forecasts, Kahneman adds, “produce poorer predictions than dart-throwing monkeys who would have distributed their choices evenly over the options.”

    The black-or-white thinking of these poor forecasters stems from their desire “to squeeze complex problems into the preferred cause-effect templates.” Ideas and evidence that don’t fit their theories are treated as “irrelevant distractions.”

    Fame leads to arrogance. Kahneman writes, “The more famous the forecaster the more flamboyant the forecasts.” Tetlock observes, “Experts in demand were more overconfident than their colleagues who eked out existences far from the limelight.”

    Pinker adds that poor forecasters are allergic to the ambiguities of life and “to wishy-washy answers.” Rather than looking for evidence that contradicts their position, they pile “up reasons why they were right and others wrong.” Such experts “were unusually confident and likelier to declare things ‘impossible’ or ‘certain.’ Committed to their conclusions, they were reluctant to change their minds even when their predictions clearly failed. They would tell us, ‘Just wait.’”

    We already hear the “just wait” threat from experts who assure us that if we don’t keep following their advice, the second wave of COVID-19 will inevitably be “far more dire” and the “potentially overwhelming outbreak.”  

    Foxes are the “superforecasters.” Pinker instructs that they are “not necessarily brilliant,” but “they have personality traits that psychologists call ‘openness to experience’ (intellectual curiosity and a taste for variety), ‘need for cognition’ (pleasure taken in intellectual activity), and ‘integrative complexity’ (appreciating uncertainty and seeing multiple sides).”

    Superforecasters are actively looking for their mindset biases. Pinker writes of the best forecasters, “They constantly ask themselves, ‘Are there holes in this reasoning? Should I be looking for something else to fill this in? Would I be convinced by this if I were somebody else?’”

    Politicians and central planners listen to fanatical hedgehogs who insist their way is the only way. The hedgehogs may be decisive, but their forecasts are often spectacularly wrong. 

    Why Hysteria is Contagious 

    Jonathan Sumption, a former UK Supreme Court Justice, recently warned, “When human societies lose their freedom, it’s not usually because tyrants have taken it away. It’s usually because people willingly surrender their freedom in return for protection against some external threat.”

    Sumption blames the public for demanding draconian actions. Most “don’t pause to ask whether the action will work. They don’t ask themselves whether the cost will be worth paying.” 

    Because of herding behavior, “hysteria is infectious.”

    If you were handed two cards with lines on each, one clearly shorter than the other, could you tell the difference? If you think this is a ridiculous question, think again.   

    In one of psychology’s most famous experiments, Solomon Asch showed that if you’re in a group and most of the group members claim the shorter line is longer, you might just go along. In his book You Are Not So Smart, David McRaney reports, “In Asch’s experiments, 75 percent of the subjects caved in on at least one question [about the length of the lines]. They looked at the lines, knew the answer everyone else was agreeing to was wrong, and went with it anyway.” 

    Perhaps even worse, those who changed their correct answers to conform with others “seemed oblivious to their own conformity. When the experimenter told them they had made an error, they came up with excuses as to why they made mistakes instead of blaming the others.”

    If you’re sure you would go against the grain, consider this: “The percentage of people who conformed grew proportionally with the number of people who joined in consensus against them.” 

    Imagine you are in a meeting, and a significant decision is to be made. You think your manager’s plan is ditzy. You are ready to speak out when you see everyone else in the meeting is agreeing with your manager. Would you behave like a mouse and go along? If you’ve ever gone along with a poor decision, don’t beat up on yourself; it’s tough to go against the herd.

    Perhaps you think Asch’s experiments merely show there is no reason to dispute the crowd when the situation is trivial. Sadly, research shows when something significant is on the line, fewer people will buck the herd. 

    In his book The Science of Fear, Dan Gardner reports on experiments by psychologists Robert Baron, Joseph Vandello, and Bethany Brunsman found that conformity goes up “so long as the judgments are difficult or ambiguous, and the influencing agents are united and confident.” 

    Gardner wondered, would new evidence “make us doubt our opinions?” The answer, Gardner found, is, “Once we have formed a view, we embrace information that supports that view while ignoring, rejecting, or harshly scrutinizing information that casts doubt on it.” Confirmation bias trips us up from changing our mind.

    The latest evidence suggests COVID-19 is not as high a risk as initially thought. If you think such evidence will convince your neighbors or Facebook friends that it’s time to end the lockdowns, you will be endlessly frustrated. Our neighbors care what other people think. If you live in an area where support for the lockdowns is widespread, your neighbor will likely go along. Remember, the more nuanced an issue is, and the more critical the problem, the more the desire to conform goes up. 

    We are living through both a pandemic and a contagious madness of global proportions.

    Politicians who led us down this destructive lockdown path won’t be changing their view until their “solution” is politically untenable.

    In his conclusion to The Road to Serfdom, Hayek warns, “We shall not grow wiser before we learn that much that we have done was very foolish.” To grow wiser, we first need to “free ourselves” from a mindset that obscures our errors. We will continue to make errors as long as we continue to believe “what we have done in the recent past was all either wise or inevitable.” 

    We have become a nation of professional victims. We are not victimized by the coronavirus or by politicians and “experts.” We are victims of our choice to conform in support of their policies. Stephen Covey has observed, “It’s easy to take responsibility for the good things in our lives, but the real test comes when things aren’t going well.” 

    Today, we can take responsibility for changing our minds. We are each 100% responsible for how we choose to interpret our experience of life. In her timeless book, The Discovery of Freedom Rose Wilder Lane explained why some prefer to turn over responsibility to authority. When something goes wrong, they proclaim I am an innocent victim of forces beyond my control. Pretending we are innocent is a steep price we pay for losing our freedom.

    Writes Mackay, “Men, it has been well said, think in herds; it will be seen that they go mad in herds, while they only recover their senses slowly, one by one.”

    When we choose to see beyond the “we have no choice” mindset, limitless solutions will begin to come into view. The future of America depends, not upon bailouts or a fast-tracked vaccine, but upon individuals choosing to recover their senses.   


    Tyler Durden

    Thu, 04/30/2020 – 23:40

  • China Refuses WHO Request To Take Part In Coronavirus Origin Probe
    China Refuses WHO Request To Take Part In Coronavirus Origin Probe

    At a time when President Trump has officially accused the Wuhan Institute Of Virology of being the cause for the worst pandemic in modern history (as we did first all the way back in January), claiming he has seen evidence that the lab is in fact the origin, potentially exposing China to trillions in global damages and reparations, not to mention the ire of millions of people around the globe who have lost family or loved ones to the Wuhan Virus, one would think – if indeed it was as innocent as it claims – that China would do everything in its power to open up the Institute for the entire world to inspect and prove its innocence. In fact, one would even think China would even make Peng Zhou – whom we singled out in January and who is now being investigated by “the Five Eyes‘ for his role in the Wu Flu epidemic – accessible to the world to remove even the smallest trace of doubt his lab had anything to do with the coronavirus release.

    One would be wrong.

    As Reuters reports, the World Health Organization (WHO) – which as has already been demonstrated has been doing China’s bidding, PR and damage control ever since the pandemic emerged – has been refused an invitation to take part in a Chinese investigation into the origins of COVID-19. Almost as if China has something to hide even from the organization that it so explicitly control each and every day.

    Sky News spoke to Dr Gauden Galea, the WHO’s representative in China, on Thursday who reported that China refused requests by WHO officials to participate in an investigation.

    “We know that some national investigation is happening but, at this stage, we have not been invited to join,” Dr Galea was quoted as saying.

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    Gauden Galea, WHO representative in China

    “WHO is making requests of the health commission and of the authorities… The origins of virus are very important, the animal-human interface is extremely important and needs to be studied.

    He is right. And yet, even though the WHO has been exposed as China’s lapdog, China refuses to grant the only international health organization access. For some odd reason the WHO never bothered to ask “why”?

    He said it was crucial to know “as much as possible” in order to prevent a “reoccurrence”. When asked by Sky News whether there was a good reason for the WHO to not be included in the investigation, Dr Galea said: “From our point of view, no”.

    But from China’s… yes.

    Dr Galea told Sky News that while WHO was confident the virus was “naturally occurring” – and once again, the WHO shows that it can’t even approach this most critical of tasks with an open mind and is already prejudicted by the pro-China position even though the US president himself today said he has seen evidence that virus indeed originated in the Wuhan lab – the laboratory’s logs would need to be “part of any full report, any full look at the story of the origins”. So far, WHO has not been able to investigate the logs, he said.

    The WHO representative also said China would have to explain why no new cases of COVID-19 were reported in the country for a significant period of time in early January. Not that China would ever answer.

    So while the “establishment” of pro-China healthcare workers and faux Facebook “fact checkers” such as the grotesque case of the borderline criminally conflicted Danielle Anderson, among those who have pushed the “conspiracy theory” that China knows more than its letting on about the virus – some three months after this website of course – are US President Donald Trump, French President Emmanuel Macron and German Chancellor Angela Merkel, who said the more transparent China is, the better.

    Meanwhile, Trump has withdrawn funding from the WHO over concerns about its transparency and for placing too much trust in China.

    As for China, the bigger question is not if Beijing is lying but when, if ever, it is telling the truth: even the pro-establishemnt, anti-Trump Associated Press reported earlier this month that China was aware of the virus’ seriousness and the possibility of human-to-human transmission days before warning citizens. But China maintains it acted swiftly to deal with the virus and has been transparent with both the WHO and other countries.

    Australia’s Foreign Minister Marise Payne has been one of the strongest advocates for a global inquiry into the virus, saying mid-April that Australia would “insist” on one. However, as we reported previously, demonstrating that Beijing won’t even accept being questioned let alone probed, China took offense to that, saying Australia was just parroting the views of the United States, while France, Britain and the European Union and threatened an import boycott.

    Even tiny New Zealand, whose real estate market is largely at the whim of Chinese oligarchs, has expressed an interest in looking into how the pandemic occurred, but hasn’t specifically singled out reviewing China’s role. New Zealand Prime Minister Jacinda Ardern also signalled an inquiry should happen once the pandemic was over.

    “There have been politicians around the world who have said, ‘Look, in the aftermath of this, we do need to look at what happened and whether or not there are areas we could as a global community improve our response’,” she explained last week. “I think that’s common sense. Of course, we want to make sure we learn from what has been a global pandemic that has shaken the globe in a way that none other has for many decades” she said in her most politically correct tone, desperate not to offend China.

    Finally, confirming just how political any potential probe would be, a terrified NZ Foreign Minister Winston Peters said on Tuesday that he trusted China wouldn’t punish New Zealand for taking part in an inquiry.

    “It is very hard to conceive, no matter what country it is, of there not being a desire from every country around the world – including the country of origin – for an investigation to find out how this happened,” he said, adding laughably “I’m not worried about [potential ramifications] because China has promised me they don’t behave that way.”

    The funniest part about the bolded sentence is that he actually wasn’t kidding.


    Tyler Durden

    Thu, 04/30/2020 – 23:34

  • Time For A Gap Year: Harvard Tells Students Prepare For Likelihood Of Online Only Fall Courses
    Time For A Gap Year: Harvard Tells Students Prepare For Likelihood Of Online Only Fall Courses

    In what could be a precedent-setting move by arguably the world’s most prestigious academic institution, Harvard University announced Monday that the extreme uncertainty surrounding the coronavirus pandemic and accompanying economic shutdowns means the school is mulling the possibility of going to online only classes for the Fall semester.

    “We cannot be certain that it will be safe to resume all usual activities” by autumn, university provost Alan Garber wrote in a school-wide memo on Monday, reports the WSJ. “Consequently, we will need to prepare for a scenario in which much or all learning will be conducted remotely.”

    And in a statement sure to be met with collective eye-rolling among a student body prepared to drop some $70,000+ only to kick the year off with months or possibly more of sub-par ‘remote learning’ courses, school spokesman Jason Newton added in an email, “The primary message is that the University is moving forward with the fall semester, rather than delaying it.”

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    Harvard University, file image via Flickr

    We doubt the students and families, many of which are likely going into debt to get that top-rate and in most cases out-of-state education, will see it that way (though in Harvard’s case – an exception to the norm – its massive endowment and extremely selective acceptance rate means at least 70% of students receive typically massive financial aid, tuition breaks and scholarships via the school’s ample means). 

    Last week Harvard announced it has cancelled freshman pre-orientation programs set to take place in August, suggesting further that the Fall semester just won’t happen like it normally would in physical classrooms and on campus.

    As we detailed earlier, more broadly across the nation college administrations have remained aloof to student demands either for refunds from this year or greatly reduced tuition for online format classes in the future, given it’s just not the same. But these institutions naturally aren’t feeling generous given most are in mere survival mode, making both budget and in some cases staff cuts. 

    Schools are already losing tens of millions in campus and summer fees given shutdowns, not to mention sports programs being shuttered, also as the the question of whether in-person instruction will even happen next Fall remains the biggest anxiety-inducing huge unknown, potentially delivering a financial fatal blow to a number of already struggling schools. Endowment values have plunged along with markets to boot. And then there’s a no doubt a greatly diminished incoming freshman class, and with that severely declining numbers of tuition checks coming in.

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    Getty images

    Last week The Washington Post summarized the crisis quite well: “The coronavirus crisis is forcing a reckoning over the price and value of higher education” — given that at the root of this, WaPo noted, is this: “Schools geared toward full-time students… offer, in normal times, academic programs with a personal touch, including seminars, laboratory classes, office hours and research opportunities with faculty.”

    If Harvard eventually announces an online-only Fall semester, it’s most likely many others will follow suit, leaving tuition-paying families to ponder the increasingly attractive possibility of taking a well-timed gap year. As Forbes comments on this trend:

    College students, but particularly current high school seniors, are considering taking a gap year while they wait for campus life to resume… This year, students will have to think outside of the box of the traditional gap year occupations. Rather than begin their college career through online classes, students will be dipping their toes into various nontraditional and professional opportunities.

    After all, who wants to drop an initial $40K to $60K or more to potentially sit in the family living room for Fall 2020 and take online classes?

    Should this ‘domino effect’ happen, the financial blow to many higher-ed institutions (though not Harvard or wealthy Ivy League schools it should be noted) could prove irreversible and even fatal to continuing operations.


    Tyler Durden

    Thu, 04/30/2020 – 23:20

  • America The Victim: Are Enemies Lining Up For Revenge In The Wake Of COVID-19?
    America The Victim: Are Enemies Lining Up For Revenge In The Wake Of COVID-19?

    Authored by Philip Giraldi via The Strategic Culture Foundation,

    When in trouble politically, governments have traditionally conjured up a foreign enemy to explain why things are going wrong.

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    Whatever one chooses to believe about the coronavirus, the fact is that it has resulted in considerable political backlash against a number of governments whose behavior has been perceived as either too extreme or too dilatory. Donald Trump’s White House has taken shots from both directions and the response to the disease has also been pilloried due to repeated gaffes by the president himself. The latest mis-spoke, now being framed by Trump’s press secretary as sarcasm, involved a presidential suggestion that one might consider injecting or imbibing disinfectant to treat the disease, either of which could easily prove lethal.

    So, the administration is desperate to change the narrative and has decided to hit on the old expedient, namely seeking out a foreign enemy to distract from what is going on in the nation’s hospitals. The tale of malevolent foreigners has been picked up by a number of mainstream media outlets and has proven especially titillating because there is not just one bad guy, but instead at least four: China, Russia, North Korea and Iran.

    The accepted narrative is that America’s enemies are now taking advantage of a moment of weakness due to the lockdown response to the coronavirus and have stepped up their attacks, both physical and metaphorical, on the Exceptional Nation Under God.

    The most recent claim that the United States is being targeted involves an incident in mid-April during which a swarm of Iranian gunboats allegedly harassed a group of American warships conducting a training exercise in the Persian Gulf by crossing the bows and sterns of the U.S. vessels at close range. The maneuvers were described by the Navy as “unsafe and unprofessional” but the tiny speedboats in no way threatened the much larger warships (note the photo in the link which illustrates the disparity in size between the two vessels).

    Donald Trump characteristically responded to the incident with a tweet last Wednesday: “I have instructed the United States Navy to shoot down and destroy any and all Iranian gunboats if they harass our ships at sea.” Although no context was provided, the president commands the armed forces and the tweet essentially defined the rules of engagement, meaning that it would be up to the ships’ commanders to determine whether or not they are being harassed. If so, the would be able to open fire and destroy the Iranian boats. Of course, there might be a physical problem in “shooting down” a gunboat that is in the water rather than in the air.

    In the Mediterranean the threat against the U.S. consisted of two Russian jet fighters flying close to a Navy P8-A submarine surveillance plane. The Russian fighters were scrambled from Hmeymim air base in Syria after the U.S. aircraft approached Syrian airspace and Russian military facilities. One of the fighters, a SU-35 carried out an “unsafe” maneuver when it flew upside down at high-speed 25 feet in front of the Navy plane.

    Also in mid-April, North Korea meanwhile fired cruise missiles into the Sea of Japan amidst rumors that its head of state Kim Jong Un might be dead or dying after major surgery. President Trump was unconcerned about the missiles and also commented that he had received a “nice note” from the North Korean leader.

    Wars and rumors of wars notwithstanding, China continues to be the principal target for Democrats and Republicans alike on Capitol Hill. GOP congressmen are reportedly urging sanctions against China while there are already a number of coronavirus lawsuits targeting Chinese assets in U.S. courts, at least one of which has a trillion dollar price tag. Theories about the deliberate weaponization of the Wuhan virus abound and they are also mixed in with stories of how Beijing unleashed the weapons and is now engaged in Russia style social media intervention to promote the notion that the United States has proven incapable of handling what has become a major medical emergency. However, those who are pushing the idea that the Chinese communist party has declared war by other means fail to explain why the government in Beijing is so keen on destroying its largest export market. If the U.S. economy goes down a large part of the Chinese economy will go with it, particularly if China’s second largest export market Europe is also suffering.

    The craziness of what is going on in the context of the disruption caused by the coronavirus has apparently increased the normal paranoia level at the top levels of the U.S. government. Pentagon plans to fight a war with Russia and China simultaneously, first mooted in 2018, are still a work in progress in spite of the fact that Washington has fewer cards to play currently than it did two years ago. The economy is down and prospects for recovery are speculative at best, but the war machine rolls on. Many Americans tired of the perpetual warfare are hoping that the virus aftermath will include demands for a genuine national health system that will perforce gut the Pentagon budget, leading to an eventual withdrawal from empire.

    In spite of the hysteria, it is important to note that no Americans have been killed or injured as a result of recent Iranian, Russian, Chinese and North Korean actions. When you station ships and planes close to or even on the borders of countries that you have labeled as enemies it would be reasonable to expect that there will be pushback. And as for taking advantage of the virus, it is the United States that has suggested that it would do so in the cases of Iran and Venezuela, exerting “maximum pressure” on both countries in their times of troubles to bring about regime change.

    If those countries that are accustomed to being regularly targeted by the United States are taking advantage of an opportunity to diminish America’s ability to intervene globally, no one should be surprised, but it is a fantasy to make the hysterical claim that the United States has now become the victim of some kind of vast international conspiracy.


    Tyler Durden

    Thu, 04/30/2020 – 23:00

  • Yuan Crashes After Trump Weighs Blocking Retirement Fund Access To Chinese Stocks As War Of Words Escalates
    Yuan Crashes After Trump Weighs Blocking Retirement Fund Access To Chinese Stocks As War Of Words Escalates

    Having tumbled yesterday on the first set of headlines reporting on the Trump administration’s plans to seek ‘COVID reparations’ amid accusations of Chinese ‘meddling’ in the US election (obviously not in favor of Trump), the Chinese yuan legged dramatically lower in this evening’s illiquid session which sees most of Asia closed for May Day, after Bloomberg reports that Trump is exploring blocking a government retirement fund from investing in Chinese equities considered a national security risk.

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    Trump made his initial threats from the Rose Garden at the White House Monday after he was pressed by a reporter over a German newspaper report suggesting that China should be issued a $160 billion invoice for the impact on Europe’s economy.

    The president responded he had a “much easier” idea:

    “We have ways of doing things a lot easier than that,” Trump told the coronavirus press briefing. “Germany’s looking at things, and we’re looking at things, and we’re talking about a lot more money than Germany’s talking about.”

    “We haven’t determined the final amount yet. It’s very substantial,” Trump added, suggesting it would be significantly more than the $160 billion floated in German media.

    Asked whether he was considering the use of tariffs or even a debt write-offs for China (something which Larry Kudlow vehemently rejected earlier on Thursday), Trump would not offer specifics.

    “There are many things I can do,” he said. “We’re looking for what happened.”

    Since then various plans have been proposed, but Trump escalated the war of words further, during an Oval Office interview with Reuters  published Wednesday night,  saying that he thinks that China is determined to see him lose the November election based on Beijing’s response to the coronavirus, and that he is considering various ways to punish the Chinese government which he he again blamed for allowing the virus to spread across the world.

    “China will do anything they can to have me lose this race,” Trump said in the interview and said he was looking at different options in terms of consequences for Beijing over the virus. “I can do a lot,” he said.

    Which was quickly followed by denials from Chinese Foreign Ministry spokesman Geng Shuang, saying that China has no interest in interfering in internal U.S. affairs (unless of course that ‘affair’ involves investigating the origin of COVID-19). China hopes some people in U.S. won’t drag country into its internal processes, Geng said.

    And tonight, Bloomberg reports that, after months of pressure from concerned lawmakers, according to a person familiar with the internal deliberations, the Trump admin is planning an executive order to block a 2017 decision that The Thrift Savings Plan, the federal government’s retirement savings fund, would transfer a massive $50 billion to an international fund which would mirror the MSCI All-Country World Index.

    The issue being China’s addition to the index, and thus the fund being forced to allocate significant capital to the Chinese stock markets, at a time when the gloves between the two nations are clearly off.

    Needless to say, the optics of the US halting capital from entering China would be staggering and could result in a reversion of China-bound capital flows across all Western countries until the current war of words between Trump and Xi rages. The only problem is that, as we noted yesterday, this particular war of words could last a long time, since there is no longer any impetus to kiss and make up, and if anything, Trump will only escalate the anti-China sentiment into the election (and after), to keep pounding that the collapse resulting from the coronavirus pandemic is not his fault, but rather’s Beijing, even as China pursues a mirror image approach, blaming the US for launching the pandemic.

    The most obvious market reaction for now is in Offshore Yuan which has collapsed in the last two days, extending losses tonight…

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    Source: Bloomberg

    Of course, much of Asia is on May-Day holiday so liquidity is low, but Yuan’s move is significant nevertheless…

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    Source: Bloomberg

    Bloomberg reports that Senator Marco Rubio, a Florida Republican, applauded reports of the move in a statement Thursday.

    “It’s outrageous that five unelected bureaucrats appointed by the previous administration have ignored bipartisan calls from Congress to reverse this short-sighted decision, and I applaud President Trump for directing his administration to take swift action preventing this from going forward,” he said.

    We would expect China to be furious at this discussion and wonder what they will do to stall this move – one suggestion, given the weakness in US equity futures overnight, is to push volatility back into US markets – to shake the faith in the dramatic market rebound (that The Fed enabled).


    Tyler Durden

    Thu, 04/30/2020 – 22:52

  • Restaurant Recovery Begins As Money Spent On Dining Posts First Increase In Weeks
    Restaurant Recovery Begins As Money Spent On Dining Posts First Increase In Weeks

    Today’s -4.8% GDP print was dire, but it would have been even worse had it not been for a spike in discretionary spending as Americans found themselves under house arrest for the second half of March. Given the importance of consumer spending on GDP, we looked at trends in the restaurant space amidst Covid-19 related headwinds, courtesy of Clover data compiled by Morgan Stanley. What we found is that for the first time in weeks there was a clear WoW improvement in dining spend, an indication that the worst is over for the restaurant industry. 

    Here are some observations from the dining trends chart below:

    • Small business food and drink saw a slight WoW improvement, with volumes down 21% the week ending April 19th vs a normalized level, compared to the prior week’s down 25%.
    • Broader restaurant trends also improved WoW, with restaurant sales now down 49% YoY the week ending April 19th (vs. -60% YoY the week prior). QSR continues to perform better than restaurants,now down 14% YoY (vs. down 31% YoY the week prior)

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    Confirming the above observations, a new survey from Hospitality Trends indicates that pent-up demand for restaurants is elevated, even as many consumers maintain their off-premises frequency.

    While takeout and delivery are the only restaurant options available for the vast majority of consumers across the country, based on weekly surveys conducted by the National Restaurant Association beginning in late-February, the proportion of consumers using these off-premises options remained remarkably consistent throughout the coronavirus crisis.

    In fact, six in 10 adults say they ordered takeout or delivery from a restaurant for a dinner meal last week – a level that has held relatively steady during the past two months. In addition, an off-premises lunch purchase was made by roughly four in 10 adults during each of the last nine weeks. 20% of consumers say they picked up a breakfast meal, snack or beverage in the morning from a coffee shop or restaurant last week. This is down from roughly three in 10 adults who reported similarly in late-February.

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    For restaurants that are offering off-premises options, the good news is that many consumers want more. 52% of adults say they are not ordering takeout or delivery from restaurants as often as they would like. As a point of comparison, 44% reported similarly when the Association fielded the same question in mid-January.

    58% percent of baby boomers say they would like to order takeout or delivery more frequently right now. This is roughly 10% points higher than their counterparts in the younger generations.

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    Not surprisingly, a strong majority of consumers say they would like to be dining out at restaurants more frequently – as this option is largely unavailable throughout most of the country. 83% of adults say they are not eating on the premises at restaurants as often as they would like. This is up from 45% who reported similarly in mid-January, and by far the highest level in the two decades that the Association has been fielding this survey question.

    Baby boomers (90%) are the most likely to report that they would like to be eating at restaurants more often, though at least three in four adults in each age group want to increase their frequency. This suggests that as dining room doors being to reopen, pent-up demand among consumers will be strong.

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    Tyler Durden

    Thu, 04/30/2020 – 22:40

  • Deutsche Bank Capitulates: Starts Charging Negative Rate On All New Deposit Accounts Over €100,000
    Deutsche Bank Capitulates: Starts Charging Negative Rate On All New Deposit Accounts Over €100,000

    It has been a long time coming and it’s finally here.

    When the ECB first unleashed negative rates across Europe in 2014, banks were loathe to match the central bank’s deposit rates for their clients to those charged by the ECB over fears depositors would simply take their money and go elsewhere. After all, the premise of paying a bank for the privilege of holding your money is still absolutely insane to most normal people.

    However, as the years went by, and as the ECB’s negative rates kept rising – or rather dropping – banks were forced to quietly admit they had no choice and starting at the very top, targeting only corporate clients and the biggest depositors, European banks started imposing negative deposit rates while hoping they could avoid going all the way to the smaller savers.

    Indeed, just last November, Deutsche Bank vowed that it would pass on negative interest rates only to larger corporate customers or the deposits of wealthy individuals and spare most retail clients, Deputy Chief Executive Officer Karl von Rohr said, explaining that German banks have already paid several billion euros in penalty rates for their deposits with the European Central Bank and Deutsche Bank’s payments amount to “several hundred million euros for 2019.”

    Now, less than half a year later, the Frankfurt-based bank – which itself is in dire financial straits – has capitulated and to avoid paying the ECB’s punitive rate will soon introduce negative interest rates for even its medium depositors.

    A Deutsche Bank spokesman told Handelsblatt that “The ongoing pressure from negative interest rates makes it necessary for Deutsche Bank to charge custody fees for new accounts exceeding €100,000 starting May 18, 2020.” The “deposit rate” of -0.5% is equal to the rate the ECB charges banks for money parked there.

    “This helps us on the earnings side, but above all it helps to prevent further inflows of particularly high deposits that cost us money,” wrote Manfred Knof, head of the bank’s German private customer business, to his employees. This applies “especially in the event that other banks further adjust their conditions and their customers are looking for an alternative for their deposits with us.”

    In other words, with the ECB flooding the European financial system with a tsunami of liquidity – one which it expanded today with yet another meaningless long-term refi operation as if that will do anything to help banks who can  no longer earn a net interest margin arb become solvent – Europe’s banks no longer need deposits, and in fact will do everything they can to push away all but the smallest depositors. The good news, for now, is that “existing account contracts are not affected” however we expect that to change soon.

    So with European banks finally cracking down on the bulk of their depositors instead of just the top 1% and corporate clients, what happens next?

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    Well, savers who collectively owns trillions in European bank deposits that are now non grata have two options: either pull the money out, convert it to cash and store it in a safe (something Germany has a lot of experience with especially in late 2016 when Deutsche Bank was on the verge of collapse, sparking a rush to buy safes) where it is outside of the financial system – this is precisely the alternative the ECB prepared for several years ago when it stopped printing the €500 banknote, or more likely, buy alternative physical assets which – in a time of pervasive deflation and negative rates – do not charge a penalty rate, such as gold or even cryptos.

    So if over the next few months a wave of “mysterious” buying emerges and lifts all non-traditional assets which prevent central banks from imposing penalty rates, we will know why: the real great rotation has finally begun.


    Tyler Durden

    Thu, 04/30/2020 – 22:20

  • LatAm Bailout Veteran Says Emerging Market Crisis Is The "Worst He's Ever Seen"
    LatAm Bailout Veteran Says Emerging Market Crisis Is The “Worst He’s Ever Seen”

    With the Nasdaq set to erase all of its 2020 losses after strong earnings from the tech giants, and stocks generally surging on the assumption that, as UBS put it, “lockdowns are lifted by the end of June and do not need to be re-imposed”, especially with today’s favorable if conflicting remdesivir news, it is easy to forget that emerging markets are facing their private hell as a result of widespread economic shutdowns, poor healthcare conditions which will only exacerbate the coronavirus pandemic, the dollar’s relentless strength, and trillions in dollar-denominated debt maturing in the next few years which the chronically strong US dollar will make prohibitively impossible to repay.

    But don’t take our word for it: according to Bill Rhodes, CEO of Rhodes Global Advisors and a veteran of countless international bailouts in the 1980s and 1990s, the debt crisis that’s erupted across the world’s emerging markets is “the worst he’s ever seen.”

    Rhodes, 84, is perhaps the world’s foremost expert on emerging markets in peril: the former Citigroup executive is a veteran of the 1980s Brady Plan that re-set the clock for Latin America’s struggling economies by creating a new debt structure for developing nations that’s largely in place to this day.

    “It’s going to be difficult,” Rhodes said in an interview with Bloomberg discussing the coming EM crisis. “You need to have some sort of coordination between the private and the public sectors.”

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    Pedestrian walks through the deserted Plaza de Mayo in Buenos Aires on March 20. Photographer: Sarah Pabst/Bloomberg

    The problem: three decades after a coordinated rescue of emerging markets orchestrated by US Treasury Secretary Nicholas Brady (the person responsible for the term Brady Bonds) the global pandemic is again challenging the world for a solution, and this time a raft of private bondholders must also be on board. More than 90 nations have already asked the IMF for help amid the pandemic.

    The first challenge is that the $160 billion debt renegotiated during the Brady Plan pales next to the $730 billion that the Institute of International Finance says must be restructured by the end of 2020; the final number could be far greater.

    Adding to the difficulties of the next global bailout, unlike 1989, when the loans were mostly held by banks and defaults had already happened, now it’s split between hundreds of creditors ranging from New York hedge funds to Middle Eastern sovereign wealth funds and Asian pension funds. Getting them all in the same room will be a challenge, forget about getting them all to agree on one outcome.

    Following in the footsteps of forbearance protocols enabled across the US, academics and officials are pushing for steps that would allow developing nations to pause bond payments through at least 2020, if not even longer, until the coronavirus fades and economies stabilize enough to analyze debt sustainability. And since one’s debt is always someone else’s asset, that proposal is upsetting creditors on Wall Street who depend on those funds to keep their portfolios afloat and to generate current income.

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    Meanwhile, G-20 leaders and multilateral organizations are already working toward relief for nations to stay current on debt. The IMF and Paris Club asked the Washington-based IIF to coordinate a standstill, and the United Nations is calling for a new global debt body.

    The other big challenge is that bureaucrats have to not only reach a solution, they have a strict time limit in which to do so: dollar-denominated debt from 18 developing nations already trades at spreads of at least 1,000 basis points over U.S. Treasuries. While the top three insolvent outliers – Venezuela, Argentina and Lebanon – were grappling with their own problems before the pandemic, others are fast approaching those levels amid currency sell-offs and record-shattering outflows.

    Rhodes’ dire warning echoes that of another EM expert: Anna Stupnytska, Fidelity International’s head of global macro and investment strategy, told Bloomberg “I’m really worried about emerging markets,” adding that Brazil, Mexico, Colombia, South Africa, India and Indonesia may be among the most vulnerable to a virus-related crisis. She expects the coming months to be critical.

    Stupnytska, who isn’t expecting a V-shaped economic recovery anywhere, said that weak public health systems, political worries and doubts on central bank independence are “really unhelpful” for EM nations, and that other than parts of Asia, large sections of developing nations are yet to see a peak in coronavirus cases.

    “So we are potentially looking at some emerging markets crisis even over the next few months.”

    With the clocking ticking, some sort of forbearance on debt payments – currently the most popular idea to help emerging markets – has to be agreed upon and soon; it would also need to extend beyond 2020, according to Anna Gelpern, a law professor at Georgetown University who spent six years at the Treasury. A coordination group could offer standardized terms to all of a country’s creditors that automatically push out payments, however how all creditors will get on the same page is unclear. After all, with memories still fresh of the massive profits Elliott Management earned by holding out on the Argentina debt restructuring early this century, what is to prevent all creditors to pursue this path?

    Bloomberg agrees, noting that “it will be no easy task to convince private creditors, especially those with large emerging-market exposure, to take a hit by deferring debt payments.”

    Zambia has started talks to postpone its arrears, while Argentina has proposed a plan to restructure its debt that includes a three-year payment moratorium. Neither country has found much traction with its creditors who demand a payment and in full upon maturity.

    “Countries that look to markets and are willing to engage market participants have found success in bridging the Covid financial shock,” said an optimistic Hans Humes, CEO of Greylock Capital Management, which has been involved in most emerging-market restructurings over the past quarter-century. Many would disagree with his cheerful assumption.

    Then again maybe creditors will find it in their bank accounts, if not hearts, to grant a reprieve: bondholders already granted Ecuador a delay on coupon payments until August, which may save the government as much as $1.35 billion this year, as it deals with one of the region’s worst virus outbreaks and a sell-off in oil.

    Alternatively, “the time and resource costs of pursuing market debt relief may outweigh the benefits,” especially if a country plans to default anyway, Goldman’s Dylan Smith wrote in an April 17 note. Plus, “it is not clear that the fiduciary duties of large bondholders toward their investors would allow them to provide lenience to debtors, even if they privately support the initiative.”

    And you thought OPEC deals were complicated.

    Lee Buchheit, a four-decade veteran of the restructuring world, said forcing each nation to renegotiate on its own would only exacerbate the pain. “Here we have a planet-wide phenomenon that is going to make a number of countries have to face unsustainable debt positions.”


    Tyler Durden

    Thu, 04/30/2020 – 22:00

  • "Don't Close RAZOR": Flynn FBI Setup Continues To Unravel As Texts Reveal Strzok Went Off The Rails
    “Don’t Close RAZOR”: Flynn FBI Setup Continues To Unravel As Texts Reveal Strzok Went Off The Rails

    Update (1745ET): President Trump said at a press conference today that he would consider bringing Michael Flynn back into the administration, saying that his former national security adviser is “essentially exonerated.”

    *  *  *

    After a US District Court Judge unsealed four pages of FBI emails and handwritten notes which provided the strongest evidence of a perjury trap, attorney and journalist @Techno_Fog has just connected two more damning dots.

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    According to a new filing in Flynn’s case, the FBI investigation into Trump’s former National Security Adviser was called “Crossfire Razor.”

    Notably, on January 1, 2017, the FBI’s Washington DC field office recommended closing the case against Flynn after finding “no derogatory information” against him.

    “The goal of the investigation was to determine whether [Flynn], associated with the Trump campaign, was directed and controlled by and/or coordinated activities with the Russian Federation in a manner which is a threat to the national security and/or possibly a violation of the Foreign Agents Registration Act,” reads an FBI memorandum.

    “Following the initiation of captioned case, the [Crossfire Hurricane] team conducted a check of logical databases for any derogatory information on [Flynn],” it continues, concluding: “No derogatory information was identified in FBI holdings.”

    Text messages sent by former FBI official Peter Strzok the same day reveal his intent to continue his pursuit of Flynn.

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    To review, as Sara Carter detailed last night, the FBI emails and handwritten notes revealed that the retired three-star general was being targeted for prosecution according to Flynn’s attorney, Sidney Powell.

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    As we noted earlier Thursday:

    ***

    In one of the emails dated Jan. 23, 2017, FBI lawyer Lisa Page, who at the time was having an affair with Strzok and who worked closely with him on the case discussed the charges the bureau would bring on Flynn before the actual interview at the White House took place. Those email exchanges were prepared for former FBI Deputy Director Andrew McCabe, who was fired by the DOJ for lying multiple times to investigators with DOJ Inspector General Michael Horowitz’s office.

    Former FBI Director James Comey, who was fired by President Trump for his conduct, revealed during an interview with Nicolle Wallace last year that he sent the FBI agents to interview Flynn at the White House under circumstances he would have never done to another administration.

    “I probably wouldn’t have done or maybe gotten away with in a more organized investigation, a more organized administration,” Comey said. “In the George W. Bush administration … or the Obama administration, two men that all of us, perhaps, have increased appreciation for over the last two years.”

    In the Jan 23, email Page asks Strzok the day before he interviews Flynn at the White House:

    “I have a question for you. Could the admonition re 1001 be given at the beginning at the interview? Or does it have to come following a statement which agents believe to be false? Does the policy speak to that? (I feel bad that I don’t know this but I don’t remember ever having to do this! Plus I’ve only charged it once in the context of lying to a federal probation officer). It seems to be if the former, then it would be an easy way to just casually slip that in.

    “Of course as you know sir, federal law makes it a crime to…”

    Strzok’s response:

    I haven’t read the policy lately, but if I recall correctly, you can say it at any time. I’m 90 percent sure about that, but I can check in the am.

    In the motion filed earlier this week, Powell stated “since August 2016 at the latest, partisan FBI and DOJ leaders conspired to destroy Mr. Flynn. These documents show in their own handwriting and emails that they intended either to create an offense they could prosecute or at least get him fired. Then came the incredible malfeasance of Mr. Van Grack’s and the SCO’s prosecution despite their knowledge there was no crime by Mr. Flynn.”

    Attached to the email is handwritten notes regarding Flynn that are stunning on their face. It is lists of how the agents will guide him in an effort to get him to trip up on his answers during their questioning and what charges they could bring against him.

    “If we get him to admit to breaking the Logan Act, give facts to DOJ & have them decide,” state the handwritten notes.

    “Or if he initially lies, then we present him (not legible) & he admits it, document for DOJ, & let them decide how to address it.”

    The next two points reveal that the agents were concerned about how their interview with Flynn would be perceived saying “if we’re seen as playing games, WH (White House) will be furious.”

    “Protect our institution by not playing games,” the last point on the first half of the hand written notes state.

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    From the handwritten note:

    Afterwards:

    • interview

    • I agreed yesterday that we shouldn’t show Flynn (redacted) if he didn’t admit

    • I thought @ it last night, I believe we should rethink this

    • What is (not legible) ? Truth/admission or to get him to lie, so we can prosecute him or get him fired?

    • we regularly show subjects evidence, with the goal of getting them to admit their wrongdoing

    • I don’t see how getting someone to admit their wrongdoing is going easy on him

    • If we get him to admit to breaking the Logan Act, give facts to DOJ & have them decide

    • Or if he initially lies, then we present him (not legible) & he admits it, document for DOJ, & let them decide how to address it

    • If we’re seen as playing games, WH will be furious

    • Protect our institution by not playing games

    (Left column)

    • we have case on Flynn & Russians

    • Our goal is to (not legible)

    • Our goal is to determine if Mike Flynn is going to tell the truth or if he lies @ relationship w/ Russians

    • can quote (redacted)

    • Shouldn’t (redacted

    Review (not legible) stand alone

    It appears evident from an email from former FBI agent Strzok, who interviewed Flynn at the White House to then FBI General Counsel James Baker, who is no longer with the FBI and was himself under investigation for leaking alleged national security information to the media.


    Tyler Durden

    Thu, 04/30/2020 – 21:55

  • Silver Hasn't Been This Cheap In 5,000 Years Of Human History
    Silver Hasn’t Been This Cheap In 5,000 Years Of Human History

    Authored by Simon Black via SovereignMan.com,

    More than 4,000 years ago, the city of Kanesh was quickly becoming an important commercial trading hub within the ancient Assyrian Empire.

    Kanesh was located in the dead center of modern day Turkey, so it was perfectly situated on the route between the Mediterranean and the Black Sea, and between Europe and Asia Minor.

    As a result, Kanesh became a popular trading post. And merchants, scribes, and moneylenders from all over the Assyrian Empire traveled there to profit from the boom in copper, tin, and textiles.

    What’s extraordinary about this period of history is how many records remain from those day-to-day transactions.

    The Assyrians borrowed the writing system from ancient Mesopotamia and routinely chiseled their commercial trades on clay ‘cuneiform’ tablets.

    Tens of thousands of these tablets have been discovered by modern archaeologists, so we have an incredible amount of detail about ancient financial transactions.

    For example, one tablet on display at the Met in New York City documents the terms of a loan that originated in Kanesh some time in the 19th century BC.

    According to the table, an Assyrian merchant named Ashur-idi loaned 3kg of silver to two traders, with 1/3 of the amount to be repaid in one year’s time.

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    This was fairly common back then: gold and silver were both used as a medium of exchange in ancient times. But this was before coins existed, so transactions would be settled based on weight.

    In ancient Babylonia, for instance (which rose to power after the Assyrian Empire faded), the cuneiform tablets from that era tell us that the price of barley averaged about 17 grams of silver per 100 quarts.

    And merchants would use elaborate scales to weigh gold and silver when exchanging their goods.

    Gold and silver were also exchangeable for each other. Another tablet from ancient Babylonia during the time of Nebuchadnezzer states that 5 shekels of silver were worth ½ shekel of gold.

    (A shekel in ancient times was a unit of weight, equivalent to about 8.33 grams.)

    This implies a 10:1 ratio between silver and gold.

    We’ve discussed this ratio several times; the gold/silver ratio has existed for thousands of years, and up until the 20th century, it remained within that ancient range of between 10 to 20 units of silver per unit of gold.

    In modern times, gold and silver are no longer used as a medium of exchange. But there’s still been a long-standing ratio that has persisted for decades.

    One ounce of gold has typically been valued at 50 to 80 ounces of silver. Rarely does the ratio go higher (or lower). And when it has, prices have always corrected.

    As of this morning the ratio is 112, meaning it now takes 112 ounces of silver to buy one ounce of gold; and today’s level is spitting distance from the ratio’s all-time high of 120, which it reached last month.

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    And when I say “all-time high,” I mean it. Ancient cuneiform tablets prove that silver has never been so cheap relative to gold in literally thousands of years of human history.

    If history is any guide, this means that the ratio should eventually narrow, i.e. the price of silver should rise and/or the price of gold should fall, bringing the ratio back to its more normal range.

    And there are plenty of ways to potentially make money from this.

    The Chicago Mercantile Exchange, for example, offers a financially-settled futures contract for traders to speculate on the Gold/Silver ratio.

    But the CME’s gold/silver ratio contract is very thinly traded and difficult to purchase, so it might not be the best approach.

    In theory, one way to speculate that the gold/silver ratio will return to historic norms would be to ‘short’ gold contracts and go ‘long’ silver contracts, i.e. speculate that the price of gold will fall while the price of silver will rise.

    But, personally, there’s no chance I would bet against gold right now.

    I’ve written for the past several weeks that I approach this entire pandemic from a position of ignorance and uncertainty.

    EVERY possible scenario is on the table, and no one can say for sure what’s going to happen next.

    There are very few things that are clear. But in my view, one thing that has become clear is that western governments will print as much money as it takes to bail everyone out.

    According to the Congressional Budget Office, the US federal government will post a $3.6 TRILLION deficit this Fiscal Year due to all the bailouts. Plus the Federal Reserve has already printed $2 trillion.

    Frankly I think they’re just getting started.

    With this incomprehensible tsunami of government debt and paper money flooding the system, real assets are a historically great bet.

    We’ve talked about this before: real assets are things that cannot be engineered by politicians and central banks– assets like productive land, well-managed businesses, and yes, precious metals.

    And they all tend to do very well when central banks print tons of money.

    Farmland, for example, was one of the best performing assets during the stagflation of the 1970s.

    And financial data over the past several decades shows that whenever they print lots of money, the price of gold tends to increase.

    Right now, in fact, the price of gold is relatively cheap compared to the current money supply.

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    And the price of silver is ridiculously cheap compared to gold. Again, silver has never been cheaper in 5,000 years.

    This is why I’d rather just own physical silver. I’m not interested in betting against gold because I expect they’ll continue to print money. In fact I’m happy to buy more gold.

    And while we cannot be certain about anything, there’s a strong case to be made that the price of silver could soar.

    And to continue learning how to ensure you thrive no matter what happens next in the world, I encourage you to download our free Perfect Plan B Guide.


    Tyler Durden

    Thu, 04/30/2020 – 21:40

  • Pompeo Demands Countries Block Airspace To Iran's 'Terrorist Airline' After Venezuela Deliveries
    Pompeo Demands Countries Block Airspace To Iran’s ‘Terrorist Airline’ After Venezuela Deliveries

    The US is going on the offensive once again against Venezuela, this time attempting to break up growing Iranian cooperation and assistance to Caracas. The two so-called ‘rogue states’ recently targeted for US-imposed regime change are helping each other fight coronavirus as well as Washington-led sanctions. Specifically Tehran has ramped up cargo deliveries related getting Venezuela’s derelict oil refineries fully operational.

    Secretary of State Mike Pompeo in new statements has called on international allies to block airspace specifically for Iran’s Mahan Air, currently under US sanctions, and which has in recent days delivered cargoes of “unknown support” to the Venezuelan government, according to Pompeo’s words. 

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    Last year Mahan Air officially announced direct flights to Venezuela. Image via AFP

    Late last week it was revealed Venezuela received a huge boost in the form of oil refinery materials and chemicals to fix the catalytic cracking unit at the 310,000 barrels-per-day Cardon refinery, essential to the nation’s gas production.

    Repair of the refinery is considered essential to domestic gasoline consumption, the shortage of which has recently driven unrest amid general food and fuel shortages, especially in the rural area. 

    Mahan Air is considered to have close ties to the Islamic Revolutionary Guard Corps (IRGC), and its deliveries to Caracas are expected to continue.

    “This is the same terrorist airline that Iran used to move weapons and fighters around the Middle East,” Pompeo asserted in his Wednesday remarks.

    Pompeo demanded the flights “must stop” and called on all countries to halt sanctioned aircraft from flying through their airspace, and to further refuse access to their airports.

    Mahan Air first came under sanctions in 2011 as Washington alleged it provided financial and non-financial support to the IRGC.


    Tyler Durden

    Thu, 04/30/2020 – 21:20

  • McDonalds Starts To Ration Meat Amid Supply Chain "Concerns"
    McDonalds Starts To Ration Meat Amid Supply Chain “Concerns”

    Just days after the CEO of Tyson Foods warned that the “food supply chain is breaking”, the disruptions due to the coronavirus are starting to surface not only in households and grocery stores, but also across corporate America, and even McDonald’s has now said it is changing how it is doling out beef and pork to its restaurants as a result.

    The company has placed items like burgers, bacon and sausage on “controlled allocation,” according to Business Insider. Additionally, the company’s distribution centers have been placed on “managed supply”.

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    This means that the company is now going to be rationing meat supplies based on demand, instead of just ordering what the company thought was necessary. And while it doesn’t yet mean the company is facing shortages, it does suggest that even the largest US fast food restaurant believes further scrutiny of its inventory is warranted as the next may very well be shortages.

    Two key McDonald’s suppliers are Smithfield and Tyson – names we have covered extensively (here  and here) over the last month as they grapple with the coronavirus causing significant production bottlenecks. More than 5,000 factory workers have contracted the coronavirus, with at least 20 of those dying. 

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    McDonald’s executives said mid-week that major production reductions were expected through “at least” the first half of May. McDonald’s CEO said on Thursday that the company, so far, had not had a supply chain break. 

    He also admitted, however, the state of the meat industry was “concerning” and that the company was “monitoring it, literally, hour by hour.”

    Tyson chairman John Tyson said last weekend: “As pork, beef and chicken plants are being forced to close, even for short periods of time, millions of pounds of meat will disappear from the supply chain. As a result, there will be limited supply of our products available in grocery stores until we are able to reopen our facilities that are currently closed.”

    Meanwhile, reflecting the growing supply scarcity, we previously reported that wholesale American beef prices had jumped 6% to a record high of $330.82 per 100 pounds, a 62% increase from the lows in February.

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    Tyler Durden

    Thu, 04/30/2020 – 21:08

  • April Will Be The Worst Month On Record For Auto Sales
    April Will Be The Worst Month On Record For Auto Sales

    In a world breaking economic records left and right, we can add one more: April is set to be the worst month ever for auto sales.

    According to the car shopping experts at Edmunds, April will be a record down month for the auto industry – for obvious reasons – forecasting that just 633,260 new cars and trucks will be sold in the U.S. for an estimated seasonally adjusted annual rate (SAAR) of 7.7 million. This reflects a 52.5% decrease in sales from April 2019, and a 36.6% decrease from March 2020.

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    Edmunds analysts note that this would be the lowest-volume sales month on record; the second worst month for sales in the past 30 years was January of 2009, when 655,000 vehicles were sold.

    “April auto sales took the biggest hit we’ve seen in decades,” said Jessica Caldwell, Edmunds’ executive director of insights. “These bleak figures aren’t just because consumers are holding back on their purchases — fleet sales are seeing an even more dramatic drop as daily rental business has dried up. Like many other industries, the entire automotive sector is struggling as the coronavirus crisis continues to cripple the economy.”

    Edmunds experts note that plans for easing shelter-in-place orders across the country in May could open up opportunities for automakers and dealers to capture some deferred demand, but there is still economic uncertainty ahead.

    “April is likely the bottom for auto sales, so hopefully there’s only room for improvement from here,” said Caldwell. “But with employment and consumer confidence at new lows, the question remains: Will people be in the position to purchase new cars? Although automakers are doing their part by offering landmark incentives, those might not be enough if consumers cannot recover financially from this crisis.”

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    Edmunds estimates that retail SAAR will come in at 6.7 million vehicles in April 2020, with fleet transactions accounting for 13.0% of total sales.

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    Tyler Durden

    Thu, 04/30/2020 – 20:40

  • Berman: Game Over For Oil… The Economy Is Next
    Berman: Game Over For Oil… The Economy Is Next

    Authored by Art Berman,

    It’s game-over for most of the U.S. oil industry.

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    Prices have collapsed and storage is nearly full. The only option for many producers is to shut in their wells. That means no income. Most have considerable debt so bankruptcy is next.

    Peggy Noonan wrote in her column recently that “this is a never-before-seen level of national economic calamity; history doesn’t get bigger than this.” That is the superficial view.

    Coronavirus has changed everything. The longer it lasts, the less the future will look anything like the past.

    Most people, policy makers and economists are energy blind and cannot, therefore, fully grasp the gravity or the consequences of what is happening.

    Energy is the economy and oil is the most important and productive portion of energy. U.S. oil consumption is at its lowest level since 1971 when production was only about 78% of what it was in 2019. As goes oil, so goes the economy…down.

    The old oil industry and the old economy are gone. The energy mix that underlies the economy will be different now. Oil production and price are unlikely to regain late 2018 levels. Renewable sources will fall behind along with efforts to mitigate climate change.

    It’s Really Bad

    2020 global liquids demand may average 20 mmb/d less than in 2019 (Figure 1). This estimate is really a thought experiment because it is impossible to know what supply and demand are in the present much less in the next quarter or beyond. This is a time of unimaginable flux and uncertainty because no one knows how long economic activity will be depressed, how long it will take to recover or if it will recover.

    The estimate in Figure 1 differs from most forecasts in two important ways. First, I believe that supply will fall much faster than most other sources. That is because storage will soon be full and shutting in production will be the only option for many producers.

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    Figure 1. 2020 global oil demand may average 20 million barrels per day lower than in 2019.
    Source: OPEC, IEA, Vitol, Trafigura, Goldman Sachs and Labyrinth Consulting Services, Inc.

    Second, I doubt that there will be a demand recovery in the third quarter despite the re-opening of businesses in the second. That is because we are in a global depression. Unemployment will remain high and consumers will be damaged from lack of income over the months of quarantine. The truth is that I doubt that demand will ever recover.

    Economies will re-start slowly. A useful analogy is being at a traffic light behind 25 stopped cars. The light will change from green to red before your car begins to move. It may take several light changes before you get to the other side of the intersection.

    U.S. consumption has fallen about 30% from 20 mmb/d in January to 14 mmb/d in April. Refinery intakes are already 25% lower than in the first quarter of the year and will fall further as consumption decreases. Refineries will close.

    Most U.S. refineries require intermediate and heavy crude oil that must be imported. Few U.S. grades of oil can be used to produce diesel without blending them with imported oil. That is because they are too light to contain the organic compounds need to make diesel. Redesigning refineries will not change this.

    The world’s natural resource extraction, shipping and distribution system relies on diesel. As refineries close and less diesel is produced, there will be lower levels of natural resource extraction, less manufacturing and less buying of goods.

    Diesel cannot be produced without first producing gasoline. The U.S. has had a gasoline surplus since late 2014 and the current surplus is the highest in 5 years (Figure 2).

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    Figure 2. U.S. gasoline comparative inventory has increased 30 million barrels since March 20 to a record level of 28.4 million barrels more than the five-year average. Source: EIA and Labyrinth Consulting Services, Inc.

    Diesel demand is less elastic than gasoline demand because of its critical role in heavy transport. What will happen to the excess produced gasoline if storage is full? Will it be burned?

    Those who see an opportunity for renewable energy in the demise of oil need to think again. The manufacture of solar panels, wind turbines and electric cars depend on diesel all along the supply chain from extraction to distribution of finished products. A world in economic depression will default to the cheapest and most productive fuels. Oil will be cheap and abundant for a long time. There will be little money or appetite for the massive equipment changes that renewable sources require. Climate change will not be high in the consciousness of people struggling to survive.

    Figure 3 is another thought experiment in which I use tight oil rig count and output to estimate forward levels of U.S. production. The normal trajectory is an estimate of how production might decline as rigs are idled from lack of capital investment. It suggests that tight oil production might decrease by about 50% from 7 to 3.5 mmb/d by July 2021.

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    Figure 3. Thought experiment based on rig count through April 2020 and 12-month lagged production.
    Source: Baker Hughes, EIA DPR, Drilling Info and Labyrinth Consulting Services, Inc.

    The shut-in trajectory suggests that tight oil production may fall below 3 mmb/d by June of this year. Since tight oil accounts for about 55% of U.S. output, total crude oil and condensate production could decline from 12 mmb/d to 5.5 mmb/d by the end of the first half of 2020. This estimate is much more aggressive than EIA forecasts because EIA hasn’t adequately modeled the speed of shut in production with full storage levels.

    Energy is the Economy

    Gross domestic product (GDP) is proportional to oil consumption (Figure 4). That’s because oil is the economy. Every aspect of production and use of goods and services requires burning fossil energy. There are approximately 4.5 years of human labor in a barrel of oil (N. J. Hagens, personal communication and The Oil Drum). No other energy source comes close to that level of energy density.

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    Figure 4. Gross domestic product (GDP) is proportional to oil consumption
    Source: EIA, World Bank and Labyrinth Consulting Services, Inc.

    Those who believe that the world will function the same on lower energy density sources like wind and solar should review their old physics text books. You cannot fit 4.5 years of work from sunlight or wind into the 5.6 cubic feet space of a barrel of oil.

    Seventeen investment analysts recently estimated that U.S. GDP would contract an average of 30-35% in 2020 (Figure 5) within a range of 9-50%. The correlation shown in Figure 4 suggests it will decrease by about 20-25% based on estimated decrease in U.S. oil consumption. Any value within this spectrum is catastrophic.

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    Figure 5. U.S. GDP to contract 30-35% in 2020 based on estimates by seventeen investment analysts
    Source: Charles Schwab and Labyrinth Consulting Services, Inc.

    Economist Lawrence Summers has warned that the U.S. financial system may collapse because of cascading defaults. Approximately 25% of U.S. renters did not pay their landlords and 23% of Americans did not make their mortgage payment in April. When people don’t pay their creditors, creditors in turn cannot pay their creditors. For comparison, a 28% mortgage default rate contributed to the 2008 financial collapse.

    Joseph Stiglitz recently explained that the current pandemic will affect the developing world more severely than it has developed countries. It might lead to mass migration problems that could dwarf the dislocations of the last six years out of Africa and the Middle East.

    Slouching Toward Bethlehem

    Many will probably find my analysis overly pessimistic. Crude oil markets do not. Negative WTI futures prices last week could not have sent a stronger signal for producers to cease and desist.

    Large segments of the U.S. oil industry will have to be nationalized before the year is over. The price of oil is too low to justify the cost of extraction even if storage were available. The value of a barrel of oil, however, is 4.5 man-years of work and that productivity multiplier will be essential if the U.S. economy is to avoid collapse or for it to recover if collapse is unavoidable.

    The United States has engaged in the foolish practice of draining America first since the beginning of tight oil production a decade ago. There was value up to the point that domestic oil substituted for imported light oil but exporting more was dumb. That is true especially now that someone else’s oil will be cheap to buy for years.

    There are few moments when we may truly say that things are different now. This is one of those moments. We do not know what awful form the future may take, what rough beast slouches toward Bethlehem to be born.

    The game is over for oil. We should place all of our attention on saving the economy.

    I hope that we learn to view what is happening as a chance to simplify and to learn to be satisfied with no more than what we need. It is unlikely that we will have much choice.


    Tyler Durden

    Thu, 04/30/2020 – 20:20

Digest powered by RSS Digest

Apr 30

Today’s News 30th April 2020

  • As Italian Crime Drops By 66.6% During Lockdown, Loan Sharks Focus Lasers
    As Italian Crime Drops By 66.6% During Lockdown, Loan Sharks Focus Lasers

    After the Italian government placed the entire country under a coronavirus lockdown, the crime rate dropped by 2/3 (or 66.6%, as Reuters reports) vs. the same month last year, according to a Wednesday statement by the interior ministry.

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    There were 68,069 crimes registered across the country in March vs. 203,723 the previous year.

    The ministry did not provide details, noting only that domestic violence fell 37.4%, a smaller drop than the overall crime rate, while robberies at pharmacies, one of the few businesses allowed to stay open, dropped 28.2%. –Reuters

    That said, the ministry also warned that once restrictions are lifted – which could be as soon as Monday – organized gangs could try to take advantage of struggling Italians.

    To that end, reports of criminal loan-sharking jumped 9.1% according to the report, indicating that those who cannot obtain traditional financing are turning to illegal lending networks to make ends meet.

    Earlier this month, prosecutors told Reuters that Italian mafia clans were taking advantage of the coronavirus outbreak to ingratiate themselves with low income families, while The Guardian reported nearly three weeks ago that videos have surfaced of known Mafia gangs distributing free food to quarantined families who have run out of cash.

    “For over a month, shops, cafés, restaurants and pubs have been closed,” said Nicola Gratteri – head of the Catanzaro prosecutor’s office and antimafia investigator according to The Guardian. “Millions of people work in the grey economy, which means that they haven’t received any income in more than a month and have no idea when they might return to work. The government is issuing so-called shopping vouchers to support people. If the state doesn’t step in soon to help these families, the mafia will provide its services, imposing their control over people’s lives.“

    To date, Italy has suffered more than 27,000 deaths and over 200,000 infections.

    The Interior Ministry also warned that the mafia would try to tap into recovery funds offered by the EU to revive the death-spiraling economy, which Reuters notes is expected to be the worst recession wince WWII.

    “This may favor corruption and illicit relations between entrepreneurs, public officials and criminal organizations,” the Ministry said, adding that it had beefed up police monitoring to try and prevent the mafia from taking advantage of the situation. In particular, ” the agro-food chain, health infrastructure, the supply of medical equipment, the hotel tourism sector, catering and the retail distribution sectors of small and medium-sized companies” will be kept under close watch.


    Tyler Durden

    Thu, 04/30/2020 – 02:35

  • 77th Brigade: Is British Military Waging An Information War On Its Own Population?
    77th Brigade: Is British Military Waging An Information War On Its Own Population?

    Authored by Mike Robinson via 21stCenturyWire.com,

    Last Wednesday, during the daily UK Government Coronavirus livestream, the head of the British Army, General Sir Nick Carter, bragged:

    We’ve been involved with the Cabinet Office Rapid Response Unit, with our 77th Brigade helping to quash rumours from misinformation, but also to counter disinformation. Between three and four thousand of our people have been involved, with around twenty thousand available the whole time at high readiness.

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    To understand the implications of this statement, we have to go back to 2018, when Carter gave a speech to the Royal United Services Institute.

    “In our 77th Brigade,” he said, “… we have got some remarkable talent when it comes to social media, production design, and indeed Arabic poetry. Those sorts of skills we can’t afford to retain in the Regular component but they are the means of us delivering capability in a much more imaginative way than we might have been able to do in the past.”

    77th Brigade

    Previously known as the ‘Security Assistance Group’, 77th Brigade was stood up in 2015 as part of ‘Army 2020’. The Security Assistance Group had been established following the amalgamation of the Media Operations Group, 15 Psychological Operations Group, Security Capacity Building Team, and the Military Stabilisation and Support Group.

    77th Brigade is described on their website as being about ‘information and outreach’. But what does that mean? General Carter again:

    We also, though, need to continue to improve our ability to fight on this new battlefield, and I think it’s important that we build on the excellent foundation we’ve created for Information Warfare through our 77th Brigade, which is now giving us the capability to compete in the war of narratives at the tactical level. [Emphasis mine]

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    It is in this context, then, that Carter’s words from last week’s livestream should be viewed. Carter has acknowledged that the British military is waging war on a section of its own population.

    ‘Rapid Response Unit’

    Carter mentioned working with the Cabinet Office’s ‘Rapid Response Unit’. Established in April 2018 and also known as the ‘fake news unit’, the Rapid Response Unit was given an initial six months’ funding. It brought together a “team of analysts, data scientists and media and digital experts,” armed with cutting-edge software, to “work round the clock to monitor online breaking news stories and social media discussion.”

    According to the RRU’s head, Alex Aiken:

    The unit’s round the clock monitoring service has identified several stories of concern during the pilot, ranging from the chemical weapons attack in Syria to domestic stories relating to the NHS and crime.

    For example, following the Syria airstrikes, the unit identified that a number of false narratives from alternative news sources were gaining traction online. These “alt-news” sources are biased and rely on sensationalism rather than facts to pique readers’ interest.

    Due to the way that search engine algorithms work, when people searched for information on the strikes, these unreliable sources were appearing above official UK government information. In fact, no government information was appearing on the first 15 pages of Google results. We know that search is an excellent indicator of intention. It can reflect bias in information received from elsewhere.

    The unit therefore ensured those using search terms that indicated bias – such as ‘false flag’ – were presented with factual information on the UK’s response. The RRU improved the ranking from below 200 to number 1 within a matter of hours.

    The Rapid Response Unit was given permanent funding in February 2019.

    Three months following the establishment of the Rapid Response Unit, Theresa May attended the G7 summit in Quebec, Canada.

    There she announced the establishment of “a new Rapid Response Mechanism“, following Britain’s proposal for “a new, more formalised approach to tackling foreign interference across the G7” at the G7 Foreign Minister’s meeting the previous month.

    The agreement sends “a strong message that interference by Russia and other foreign states would not be tolerated,” she said.

    “The Rapid Response Mechanism,” she continued, “will support preventative and protective cooperation between G7 countries, as well as post-incident responses”, including:

    • Co-ordinated attribution of hostile activity

    • Joint work to assert a common narrative and response

    The UK government’s Rapid Response, then, is to create international agreement on a common narrative (via the ‘mechanism’), and then wage an information war on its own people to make sure that narrative is protected in the media (via the ‘unit’).

    Fusion

    During Carter’s 2018 RUSI speech, he explained the role of the mainstream press in “setting up a well-informed public debate”. He spoke about “political warfare” being war by other means, and he said that winning that war would require a “fusion” approach.

    Here, he is referring to the Fusion Doctrine, which was launched during the Theresa May regime, as part of the 2015 National Security Capability Review.

    “Many capabilities,” it said, “that can contribute to national security lie outside traditional national security departments and so we need stronger partnerships across government and with the private and third sectors.”

    It should come as no surprise, then, that the Cabinet Office’s Rapid Response Unit is not only working with the military’s 77th Brigade, but is “leading on the ‘rebuttal of false narratives’ as part of the unit … [that also] involves the Home Office, DCMS, Number 10 and other agencies.”

    The Corona-Narrative

    General Carter said his 77th Brigade is “helping to quash rumours from misinformation, but also to counter disinformation.”

    What misinformation and disinformation is 77th Brigade helping to quash? How much of the ‘disinformation’ originates from 77th Brigade in the first place?

    Part of 77th Brigade’s role is:

    ‘Monitoring and evaluating the information environment within boundaries or operational area’

    They not only ‘counter’ disinformation, but also watch social media, analysing how disinformation, including their own, spreads; mapping the internet and the networks of people sharing content between each other.

    And for that, they have thousands deployed, and tens of thousands in reserve, not only in 77th Brigade directly, but right across government and the third sector.


    Tyler Durden

    Thu, 04/30/2020 – 02:00

  • Your Freedoms Don't Have To Be Muzzled Just Because You're Wearing A Mask
    Your Freedoms Don’t Have To Be Muzzled Just Because You’re Wearing A Mask

    Authored by John Whitehead via The Rutherford Institute,

    “If 2019 was the year of the street protest, of tear gas and rubber bullets, 2020 might be the year the street protest died, or perhaps fell into a deep sleep, and went online.”

    – Journalist Christopher Miller

    Despite all appearances to the contrary, martial law has not been declared in America.

    We still have rights.

    Technically, at least.

    The government may act as if its police state powers suppress individual liberties during this COVID-19 pandemic, but for all intents and purposes, the Constitution – especially the battered, besieged Bill of Rights – still stands in theory, if not in practice.

    Indeed, while federal and state governments have adopted specific restrictive measures in an effort to lockdown the nation and decelerate the spread of the COVID-19 virus, the current public health situation has not resulted in the suspension of fundamental constitutional rights such as freedom of speech and the right of assembly.

    Mind you, that’s not to say that the government has not tried its best to weaponize this crisis as it has weaponized so many other crises in order to expand its powers and silence its critics.

    All over the country, government officials are using COVID-19 restrictions to muzzle protesters.

    It doesn’t matter what the protest is about (church assemblies, the right to work, the timing for re-opening the country, discontent over police brutality, etc.): this is activity the First Amendment protects vociferously with only one qualification—that it be peaceful.

    Yet even peaceful protesters mindful of the need to adhere to social distancing guidelines because of this COVID-19 are being muzzled, arrested and fined.

    For example, a Maryland family was reportedly threatened with up to a year in jail and a $5000 fine if they dared to publicly protest the injustice of their son’s execution by a SWAT team.

    If anyone had a legitimate reason to get out in the streets and protest, it’s the Lemp family, whose 21-year-old son Duncan was gunned down in his bedroom during an early morning, no-knock SWAT team raid on his family’s home.

    Imagine it.

    It was 4:30 a.m. on March 12, 2020, in the midst of a COVID-19 pandemic that has most of the country under a partial lockdown and sheltering at home, when this masked SWAT team—deployed to execute a “high risk” search warrant for unauthorized firearms—stormed the suburban house where 21-year-old Duncan, a software engineer and Second Amendment advocate, lived with his parents and 19-year-old brother.

    The entire household, including Lemp and his girlfriend, was reportedly asleep when the SWAT team directed flash bang grenades and gunfire through Lemp’s bedroom window.

    Lemp was killed and his girlfriend injured.

    No one in the house that morning, including Lemp, had a criminal record.

    No one in the house that morning, including Lemp, was considered an “imminent threat” to law enforcement or the public, at least not according to the search warrant.

    Now what was so urgent that militarized police felt compelled to employ battlefield tactics in the pre-dawn hours of a day when most people are asleep in bed, not to mention stuck at home as part of a nationwide lockdown?

    According to police, they were tipped off that Lemp was in possession of “firearms.”

    So instead of approaching the house by the front door at a reasonable hour in order to investigate this complaint—which is what the Fourth Amendment requires—police instead strapped on their guns, loaded up their flash bang grenades and acted like battle-crazed warriors.

    This is the blowback from all that military weaponry flowing to domestic police departments.

    This is what happens when you use SWAT teams to carry out routine search warrants.

    This is what happens when you adopt red flag gun laws, which Maryland did in 2018, painting anyone who might be in possession of a gun—legal or otherwise—as a threat that must be neutralized.

    These red flag gun laws allow the police to remove guns from people merely suspected of being threats.

    While in theory it appears perfectly reasonable to want to “stop dangerous people before they act,” where the problem arises is when you put the power to determine who is a potential danger in the hands of government agencies, the courts and the police.

    Remember, this is the same government that uses the words “anti-government,” “extremist” and “terrorist” interchangeably.

    This is the same government whose agents are spinning a sticky spider-web of threat assessments, behavioral sensing warnings, flagged “words,” and “suspicious” activity reports using automated eyes and ears, social media, behavior sensing software, and citizen spies to identify potential threats.

    This is the same government that keeps re-upping the National Defense Authorization Act (NDAA), which allows the military to arrest and detain American citizens with no access to friends, family or the courts if the government believes them to be a threat.

    This is the same government that has a growing list—shared with fusion centers and law enforcement agencies—of ideologies, behaviors, affiliations and other characteristics that could flag someone as suspicious and result in their being labeled potential enemies of the state.

    Let that sink in a moment.

    If you believe in and exercise your rights under the Constitution (namely, your right to speak freely, worship freely, associate with like-minded individuals who share your 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), you are most likely at the top of the government’s terrorism watch list.

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    Moreover, as a New York Times editorial warns, you may be an anti-government extremist (a.k.a. domestic terrorist) in the eyes of the police if you are afraid that the government is plotting to confiscate your firearms, if you believe the economy is about to collapse and the government will soon declare martial law, or if you display an unusual number of political and/or ideological bumper stickers on your car.

    Needless to say, if you happen to be passionate about the Constitution and a vocal critic of government corruption, you’ve already been flagged in a government database somewhere.

    Likely, Lemp was, too.

    Now Lemp is dead and his family is devastated, outraged and desperate to make sense of what appears to be an insensible act of violence resulting in an inexcusable loss of life.

    As usual in these kinds of shootings, government officials have not been forthcoming with details about the shooting: police have refused to meet with family members, the contents of the warrant supporting the raid have not been revealed, and bodycam footage of the raid has not been disclosed.

    So in order to voice their objections to police violence and demand answers about the shooting, Lemp’s family and friends planned to conduct an outdoor public demonstration—adhering to social distancing guidelines—only to be threatened with arrest, a year in jail and a $5000 fine for violating Maryland’s stay at home orders.

    Yet here’s the thing: we don’t have to be muzzled and remain silent about government corruption, violence and misconduct just because we’re wearing masks and social distancing.

    That’s not the point of this whole COVID-19 exercise, or is it?

    While there is a moral responsibility to not endanger other lives with our actions, that does not mean relinquishing all of our freedoms.  

    Be responsible in how you exercise your freedoms, but don’t allow yourselves to be muzzled or your individual freedoms to be undermined.

    Understandably, no one wants to talk about individual freedoms when tens of thousands of people the world over are dying, and yet we must.

    The decisions we make right now—about freedom, commerce, free will, how we care for the least of these in our communities, what it means to provide individuals and businesses with a safety net, how far we allow the government to go in “protecting” us against this virus, etc.—will haunt us for a long time to come.

    At times like these, when emotions are heightened, fear dominates, common sense is in short supply, liberty takes a backseat to public safety, and democratic societies approach the tipping point towards mob rule, there is a tendency to cast those who exercise their individual freedoms (to freely speak, associate, assemble, protest, pursue a living, engage in commerce, etc.) as foolishly reckless, criminally selfish, or outright villains.

    Sometimes that is true, but not always.

    As I make clear in my book Battlefield America: The War on the American People, there is always a balancing test between individual freedoms and the communal good.

    What we must figure out is how to strike a balance that allows us to protect those who need protecting without leaving us chained and in bondage to the police state.

    We must find ways to mitigate against this contagion needlessly claiming any more lives and crippling any more communities, but let’s not lose our heads: blindly following the path of least resistance—acquiescing without question to whatever the government dictates—can only lead to more misery, suffering and the erection of a totalitarian regime in which there is no balance.


    Tyler Durden

    Thu, 04/30/2020 – 00:05

  • Portland To Ban Cars On 100 Miles Of Roadway To Promote Safe Distancing
    Portland To Ban Cars On 100 Miles Of Roadway To Promote Safe Distancing

    The city of Portland, Oregon will ban cars from 100 miles of roadway in order to encourage social distancing for people walking, biking or running during the coronavirus pandemic.

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    Photo: Will Vanlue

    They closures will primarily affect streets along designated neighborhoods which have lower car traffic in general, according to KGW8. Temporary barricades and signage will be installed to alert drivers of the closures.

    The plan also includes expanding space for pedestrians along streets that are “narrow or missing sidewalks,” and provide more room with pop-up walking and biking lanes.

    In business districts, PBOT said they’ll establish space so customers can line up with enough physical distance, and create dedicated loading zones for pickup and delivery.

    The city of Portland has seen a dramatic spike in speeding since the pandemic began and a major decrease in traffic congestion. 

    Further details about the plan can be found online. It’s unclear when the closures will begin. –KGW8

    “When we reach the point that we can re-open, we want to make sure our transportation system is ready,” announced Portland Bureau of Transportation Director Chris Warner.

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    Portland residents attend the annual ‘World Naked Bike Ride,” 2019

    “Portlanders have made great use of their neighborhood streets to walk, bike, and roll during the pandemic. We’ve designed the Slow Streets|Safe Streets initiative to make sure they can continue to do this safely as we get back closer to normal.”


    Tyler Durden

    Wed, 04/29/2020 – 23:45

  • Being Afraid & Eliminating Exposure To Germs Leads To Death by Fear & Germs…
    Being Afraid & Eliminating Exposure To Germs Leads To Death by Fear & Germs…

    Authored by Gary Barnett via LewRockwell.com,

    “Do you begin to see, then, what kind of world we are creating? It is the exact opposite of the stupid hedonistic Utopias that the old reformers imagined. A world of fear and treachery and torment, a world of trampling and being trampled upon, a world which will grow not less but more merciless as it refines itself. Progress in our world will be progress toward more pain.”

    ~ George Orwell (1961). “1984”

    Death is inevitable, so never hide from life, and never allow a moment of life to be taken from you by tyrants. All government is tyrannical, and all government seeks power and control, and today it is using a purposely-created crisis in order to gain that control. We are being told by false rulers to abandon our lives, and hide away from those we care about in order to stop a virus. This is the highest form of deception, and is only meant to divide us so sinister agendas can be accomplished in the shadows.

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    It has been forgotten in this day and age of total fear that our bodies, not governments, are our defense against viral agents. Maybe a few will learn from this fakery that germs are our friends. Unless our bodies are exposed to germs and viruses, natural defenses against sickness disappear, leaving the body vulnerable to every sort of germ and virus. Listening to these political trimmers therefore is detrimental to our health.

    Coronaviruses are not a threat to healthy humans with strong immune systems. Viruses cannot replicate in that environment, which means symptoms and sickness are rarely present. In addition, sunshine and high vitamin D levels are of great importance, as is diet, exercise, sleep, and relaxing calm. What this means is that government and its idiotic mandates are actually killing many people, and those deaths are due to the very governing body that is lying about how to protect your health. They are in fact causing much death, much more so than this so-called Covid-19.

    Virtually everything mandated by government to combat this virus is extremely detrimental to life, and this may be by design. As more deaths are falsely attributed to this coronavirus, more power and control will be concentrated in the hands of the State. One major factor in helping a virus to replicate and cause harm is stress. The more stress evident, the weaker the immune system of its host. When the immune system has to go into action in order to alleviate mental and physical symptoms due to stress on the body, this leaves the body undefended, and viruses take immediate advantage of this opportunity. In other words, people will get sick simply because of undue stress, stress now intentionally caused by this incompetent government.

    Unemployment causes stress, fear causes stress, financial problems cause stress, foreign agents in the form of vaccines causes stress, hunger causes stress, worry, isolation, and lack of physical activity causes stress, self-imprisonment causes stress, and any relationship or family problems due to these factors causes extreme stress.

    In addition, wearing a mask causes immediate stress to the body due to restricting airflow, and anyone with a weak immune system or with any respiratory issues whatsoever, is very susceptible to harm in this circumstance. Also, the state and health idiots claim that one should not touch their face, but wearing a mask vastly increases that touching due to the many obvious reasons to do so. Since viruses do not have the ability to jump from one person to another, masks then are not only ineffective, but may actually cause more viral spread than if not worn at all.

    Then there is the ventilator issue, which is very suspect. Ventilators are actually killing those that have a viral infection.

    “Some hospitals have reported unusually high death rates for coronavirus patients on ventilators, and some doctors worry that the machines could be harming certain patients. Mechanical ventilators push oxygen into patients whose lungs are failing. Using the machines involves sedating a patient and sticking a tube in the throat. Deaths in such sick patients are common, no matter the reason they need the breathing help. Generally speaking, 40% to 50% of patients with severe respiratory distress die while on ventilators, experts say. But 80% or more of coronavirus patients placed on the machines in New York City have died, state and city officials say.

    That is quite a statistic, given that the state and its so-called health “experts” in the administration, at the WHO, and at the CDC, have been pushing the use of ventilators since the beginning, and have used massive resources not only to greatly step up production and purchase of such machines, but have propagated far and wide on a daily basis the effectiveness of these machines in treating coronavirus patients. But with 80% of those patients dying while on ventilators, is another agenda being worked forward? Are hospitals gaining a financial advantage for putting patients on these ventilators? Is this a way to increase the death count, just as is coding any and every death as Covid, regardless whether the patient died due to other factors?

    All of the federal and state mandates to supposedly combat this virus have caused more undue death and sickness. While the extreme stress caused by these government mandates has been devastating as far as virus susceptibility is concerned, many more sicknesses, disease, and deaths are occurring simply due to government action. Stress and isolation cause any number of adverse problems, and many of those cause higher death rates than normal. The psychological harm alone is alarming and has been felt nationwide, and due to this harm, suicides have increased as well. While suicide has been increasing every year, with the onslaught of government interventions due to coronavirus, many risk factors that cause suicide have been greatly enhanced, and this will most likely not only lead to many more suicides this year, but will also lead to higher suicide rates for years to come. How many more will kill themselves in the future due to measures initiated by government during this so-called crisis? There is no way to know for certain, but indications are that it will far exceed the deaths of this 2020 virus scam.

    The bottom line is this; sickness and death due to the government response to this manufactured pandemic will be multiple times greater than the death toll due to this coronavirus. But it is much worse than that, because the deaths due to this response will continue to rise for years to come, as people struggle to stay afloat in a country whose economy has been destroyed. Early and unnecessary death, suicide, family abuse, violence, despair, starvation, and loneliness will continue to reek havoc on Americans, causing any number of continuing health problems and death.

    Population control through higher mortality and sterilization is evident in the government’s agenda, and distancing, isolation, forced vaccination, and undue stress are sought in order to facilitate this plan. The only viable solution as I see it is to eliminate government at every level possible.

    “The state lies in all the tongues of good and evil, and whatever it says is lies, and whatever it has, it has stolen, everything it is, is false, it bites with stolen teeth, and it bites often, it is false down to its bowels.”

    ~ Friedrich Wilhelm Nietzsche, Thus Spoke Zarathustra [1896]


    Tyler Durden

    Wed, 04/29/2020 – 23:25

  • New Report Reveals DaVita Engaged In "Lobbying Scheme" To Target Legislation Threatening Billing Loophole
    New Report Reveals DaVita Engaged In “Lobbying Scheme” To Target Legislation Threatening Billing Loophole

    One more iron has been thrown into the fire in the ongoing skepticism of kidney dialysis company and Buffett portfolio name DaVita, which has already drawn criticism from well known short sellers like Jim Chanos and media outlets like the New York Times.

    Critics have raised numerous questions about DaVita’s business practices, but none more important than the company’s relationship with the American Kidney Fund, who has been accused of helping DaVita intentionally steer dialysis patients from lower cost government insurance to high cost commercial payors – a move that has had a profoundly positive effect on DaVita’s bottom line.

    This morning, research firm Hindenburg Research released a new investigative report highlighting that DaVita also appears to be the main funding entity behind a powerful lobbying group in California that has been set up to oppose state legislation targeting the AKF loophole. The report also exposes that many groups whose names are being used, allegedly in support of voting down the bill, had little to no knowledge that they were involved.

    The report states:

    “DaVita’s most lucrative scheme is finally becoming obvious to insurers, patients and legislators following multiple media exposés. As a result, legislation is starting to specifically target the company’s primary remaining profit center. We intend to highlight the legislative challenges currently facing DaVita at both the state and national level that we believe will persist until the loophole driving this scheme has been closed.

    As DaVita works against one of its main legislative challenges of the moment, California Assembly Bill 290, we sought to understand the company’s lobbying effort. We found that DaVita is, in characteristic fashion, engaging in what looks to be underhanded lobbying tactics in order to defend its charity scheme.”

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    The report highlights that the state of California is estimated to account for 15-20% of the company’s dialysis business and that the assemblyman who introduced the California bill “called DaVita’s charity loophole a ‘self-serving scam’ and ‘a scheme to bankroll patients’ healthcare premiums'”.

    A coalition that was formed to oppose the bill claims the support of many groups in California, but the report says, of these groups: “most readily admitted to not knowing anything about the bill and/or simply taking their cues from lobbyists or other organizations. Some didn’t even know they opposed it at all.”

    For instance, the Commander of the State of California American GI Forum told Hindenburg:

    “As far as I’m concerned, I haven’t been informed about anything that’s out there or stance that we take, etc., so I can’t really say why are we opposed to it.”

    The report also reveals that about 90% of the funding for the lobbying group has come from large for-profit dialysis corporations such as DaVita and Fresenius. DaVita is said to have represented about 60% of the group’s funding over the last 2 years, having donated over $67 million to the group in that period.

    Hindenburg writes that despite not having a position in the company’s stock, they “thought it would be important to shed light on the ridiculous abuse of the medical system that continues under a cloak of legitimate lobbying efforts.”

    You can read the full report here:

     


    Tyler Durden

    Wed, 04/29/2020 – 23:05

  • No Tanks For Old Marines – Why America's Most Powerful Fighting Force Is Restructuring
    No Tanks For Old Marines – Why America’s Most Powerful Fighting Force Is Restructuring

    Authored by Tim Kirby via The Strategic Culture Foundation,

    By 2030 the U.S. Marine Corps will have gone through a major restructuring, most notably eliminating tanks from usage all together and reducing its total number of men. America’s military at home has gone from an expensive but mostly unseen protector during the Cold War to a post 9/11 icon of mandatory worship by the Mainstream Media. So it is very surprising just how little attention this massive restructure is getting outside the veteran blogosphere. The elite of the largest, most expensive and arguably most powerful military in the World is rethinking its strategy, but why and where is this all going?

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    There is NO conspiracy

    One of the natural reactions to the U.S. government “downsizing” a branch of the military and cutting tanks will be the usual panic-based reaction that “the end is nigh” and that this “is a sign” of the end of America. This is highly unlikely to be the case. The Armed Forces have gotten from Trump everything that they want and the “checks are going through”. There is currently no lack of funding for the U.S. military so we shouldn’t pretend this is the first sign of it. Furthermore, the new 173,000 man force is only slightly smaller than its 2010 record of 200,000+ men. So is a reduction in manpower of roughly 13% a sign of an upcoming collapse? No. Does this save a massive amount of money for the military budget? No.

    The same is true for tanks, they are not being cut for financial reasons. Even with a safe overestimate of the cost of one M1 Abrams tank being $10 million there is plenty of room in the $750+ billion dollar budget for them. Cost is not the issue.

    Sorry accelerationists but this is not a sign of an upcoming collapse.

    The Cold War is finally dead

    The cliché that we are always planning to fight our “father’s war” is proven be true time and again over the course of history. The conservatively-minded well-trained generals of the Confederacy expected a purely Napoleonic campaign of musket and bayonet, and what they got was the dawn of industrialized war. The French were sure that WWI would involve volley fire and cavalry looking sharp in their bright red “pantaloons”. And, the U.S. entered Vietnam with the mindset and strategies of fighting the Axis powers, “if we just drop enough bombs, they’ll surrender for sure”.

    This is all an aspect of simple human nature as we plan for what we know and understand, not something theoretical. However, this restructure of the Marines could be the exception to the rule.

    During the Iraq War(s) it became apparent that the U.S. with forces designed to fight a Cold War were perfect for crushing Saddam Hussein’s traditional army within days. Now holding the very same country during an insurgency with those forces, that is another story.

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    Photo: The Abrams is a good soldier but terrible policeman.

    The Abrams which performed brilliantly against Iraq’s tanks became a sitting duck in tight urban environments where it could be hit and crippled by local yokels with primitive RPGs. Urban environments provide opportunities to strike a tank from angles that reduce the effectiveness of its armor. Similar musings have been made about the U.S. Navy with its big brilliant ships that could be easily sunk by missiles or attacks from garbage quality boats crewed by those willing to take casualties.

    Essentially, big armored targets are not is useful for war in the 21st century, when the offensive weapons that can take them out are extremely cheap by comparison, and new generations of cheap(er) anti-tank weapons continue to be developed.

    So, dumping tanks is probably a logical step. To be honest we should all give the men who made these plans a round of applause for not repeating the same mistakes of history by continuing to fight ISIS with a force designed to break the Warsaw Pact. Except, there remains one issue…

    Video: A great explanation of what the new Marine Corps is going to look like from “Matsimus”.

    China, really?

    The official logic for the restructuring claims that the real threat the Marine Corps is being designed to fight is actually China and by extension Russia, not the Taliban/Al Nusra/ISIS etc. Perhaps because hating China has become the hip cool thing to do under the Trump administration it is was easier to sell these reforms as a means to counter the dragon, but an infantry focused force with some new-fangled drones and tech is not going to be what brings down China. Infantry is what is needed to hold positions, but good luck trying to Guangzhou on foot like some Hollywood D-Day fantasy.

    What they probably mean, when stating Beijing as the real target, is that they want to counter China in some proxy conflicts in fights with small numbers where tanks are weak to today’s long range weaponry. This logic makes much more sense.

    The core of the decision to restructure seems to have come from wargames in 2018-2019. These exercises played out a proxy style conflict between the U.S. and other entities in the sands of the Middle-East. The Marine Times broke down the results of the wargames as follows…

    “But tanks and armored vehicles have had trouble surviving against the threat of precision strike and the plethora of drone and reconnaissance systems flooding conflict zones across the Middle East.”

    They also presented experience from Turkey’s moves in Syria that support the theory that tanks are going out of fashion quickly…

    “Turkey posted videos highlighting a mixed role of drones, Paladin artillery systems and aircraft pounding Syrian armor from the skies over the course of several days. The Syrian army appeared helpless to defend from the onslaught of long range systems. Even tanks camouflaged by buildings and bushes were no match for sensors and thermal imaging watching from the skies.”

    These exercises probably were the nail in the coffin for the Abrams and a big motivation to buy more drones. The Marine Times sums it up this way…

    The Corps instead is looking for mobile systems and units that can survive within the reach of precision fires to “attrit adversary forces,” create dilemmas for the enemy and “consume adversary ISR resources,” according to the report.

    In summation what does this restructure mean?

    It is not part of some way to mask the fall of the “American Empire” as the military is still well funded and the reduction of troops is minor. Tanks’ costs will be replaced by drones and other tech.

    The Marine Corps is actually trying structure itself to fight today’s war and today’s enemy.

    Based on recent wargames, the Iraq/Afghanistan Conflicts and the Syrian Civil War tanks are becoming obsolete quickly and this move to dump them may be copied by other nations.

    A 170,000+ mostly infantry force with drones will not scare China, but it will have better chances at success in occupational actions against insurgents/terrorists, or in proxy conflicts against China.

    For the contingent that believes that non-military people cannot write about the military I’d like to remind you that the governments that send armies off to die generally don’t serve, yet they make all the big military decisions. I await your hate mail.


    Tyler Durden

    Wed, 04/29/2020 – 22:45

  • "The Truce Is Over": Trump Considering Ways To Punish China, Convinced Beijing "Will Do Anything" To Make Him Lose Re-election
    “The Truce Is Over”: Trump Considering Ways To Punish China, Convinced Beijing “Will Do Anything” To Make Him Lose Re-election

    And to think just three months ago things between the US and China, which had just signed ‘Phase 1’ of the long-awaited trade deal were going “so well.”

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    In an Oval Office interview with Reuters published Wednesday night, Trump said he thinks that China is determined to see him lose the November election based on Beijing’s response to the coronavirus, and that he is considering various ways to punish the Chinese government which he he again blamed for allowing the virus to spread across the world.

    “China will do anything they can to have me lose this race,” Trump said in the interview and said he was looking at different options in terms of consequences for Beijing over the virus. “I can do a lot,” he said.

    Trump has heaped blame on China for a global pandemic that has killed at least 60,000 people in the United States and thrown the U.S. economy into a deep recession, putting in jeopardy Trump’s hopes for another four-year term.

    Worried that an attempt to reopen the economy would be hindered by a second infection wave in the fall, forcing the US to shutter again and sending the economy into an even deeper depression, Trump said he believed China should have been more active in letting the world know about the coronavirus much sooner.

    Asked whether he was considering the use of tariffs or even debt write-offs for China, Trump would not offer specifics. “There are many things I can do,” he said. “We’re looking for what happened.”

    “They’re constantly using public relations to try to make it like they’re innocent parties,” he said of Chinese officials.

    One example is Global Times Editor in Chief who is engaged in a daily stream of propaganda on twitter, vilifying Trump and the US as the following example demonstrates:

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

    “China will do anything they can to have me lose this race,” said Trump. He said he believes Beijing wants Joe Biden to win the race to ease the pressure Trump has placed on China over trade and other issues.

    A senior Trump administration official told Reuters that an informal “truce” in the war of words that Trump and Xi essentially agreed to in a phone call in late March now appeared to be over.

    Earlier Wednesday, Secretary of State Michael Pompeo said that China posed a threat to the world by hiding information about the origin of the coronavirus: “The Chinese Communist Party now has a responsibility to tell the world how this pandemic got out of China and all across the world, causing such global economic devastation,” Pompeo told Fox News on Wednesday morning, during an interview in which he repeatedly criticized China’s government. “America needs to hold them accountable.”

    The comments came after China Central Television’s top evening news program on Wednesday questioned the transparency and accuracy of U.S. data on Covid-19 infections; they also followed a US government report which concluded that the Wuhan lab is the “most likely source” of the coronavirus outbreak.

     


    Tyler Durden

    Wed, 04/29/2020 – 22:30

  • Watch: 'Underground Hazard' Exposed As NYC Homeless Fill Up Subway Cars Amid Pandemic
    Watch: ‘Underground Hazard’ Exposed As NYC Homeless Fill Up Subway Cars Amid Pandemic

    “I got to send this to the governor, let him see this shit,” a 25-year veteran of New York City’s Metropolitan Transportation Authority said when posting an now viral video clip depicting a growing crisis in the city’s subways.

    The employee, subsequently confirmed in media reports as Torry Chalmers, offered video proof that throngs of the city’s homeless are now filling up empty train cars on a regular basis. 

    Chalmers and other employees are demanding “hazard pay” given that the rising number of homeless filling the subways they interact with are a huge risk amid the coronavirus pandemic, also given the Big Apple has for weeks now been the global epicenter. 

    “This is what I got to do. I got to go to work in this,” he said in the video. “It’s not making any sense. It’s nasty, nasty.”

    “People are scared when the train comes in the station,” Chalmers added. “If one car looks bad, they’ll run to another — but it’s the same problem in every car.”

    “We’re out there every day putting our lives on the line… We should get hazard pay,” he asserted.

    New York Gov. Andrew Cuomo addressed the growing crisis in the wake of growing outrage over the alarming underground hazard conditions, calling the situation “disrespectful to the essential workers who need to ride the subway system.”

    Cuomo said Tuesday, “We have to have a public transportation system that is clean, where the trains are disinfected,” and added: “It’s not even safe for the homeless people to be on trains,” Cuomo added.

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    “We’re concerned about homeless people so we let them stay on the trains without protection in this epidemic of the COVID virus? No, we have to do better than that and we will,” the governor said.

    New York and other cities, especially L.A. and San Francisco have for weeks been attempting to get a handle on the homeless crisis amid the pandemic. Recently photos of Las Vegas casino parking lots which served as makeshift homeless ‘social distancing’ outdoor sleeping venues went viral. 

    NY Mayor Bill de Blasio has this week called on the MTA to close subway terminals to ensure homeless don’t congregate there, and for the purpose of nightly deep disinfecting. 

    And Interim New York City Transit President Sarah Feinberg commented: 

    “Our customers shouldn’t have to board a car that multiple people using it as a shelter and as a trash receptacle or toilet.”

    Since the crisis began the MTA has greatly reduced its service, also as hundreds of its personnel have been out sick with coronavirus, compounding the risk to the mass transit service and broader public; however, it’s considered that the city’s subway system which has never completely closed in the century of its existence is vital for daily transporting ‘essential’ workers. 


    Tyler Durden

    Wed, 04/29/2020 – 22:30

  • "What The F**k": In Expletive-Laced Rant, Elon Musk Blasts "Fascist, Undemocratic" Shelter-In-Place Orders
    “What The F**k”: In Expletive-Laced Rant, Elon Musk Blasts “Fascist, Undemocratic” Shelter-In-Place Orders

    It has been almost exactly two years since Elon Musk’s infamous conference call meltdown when the Tesla CEO snapped at RBC analyst Joseph Spak for asking “boring bonehead questions” during the Q1 2018 earnings call. Today, Musk did it again only this time instead of raging at a “bonehead” question, the notoriously volatile CEO went off on a bizarre tirade, hammering an issue he has expressed substantial displeasure with in recent days: the inability to open up the Tesla Fremont factory Calilfornia’s shelter-in-place orders.

    Just hours after the Tesla CEO tweeted his best Donald Trump impression to date, screaming “FREE AMERICA NOW” clearly displeased with the ongoing state of affairs in the US virus-stricken nation…

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

    … Elon held the Tesla earnings call where toward the end, increasingly angry, Musk unleashed a 5-minute rant complete with an f-bomb in which the CEO doubled down on his stance against the shelter-in-place orders that have gripped the United States economy in recent weeks, warning that the factory shutdowns are a “serious risk” to the electric automaker’s business.

    “It will cause great harm, not just to Tesla, but to many companies,” Musk said on the call. “And while Tesla will weather the storm, there are many companies that will not. Everything people have worked for their whole life is being destroyed in real time.”

    “It’s breaking people’s freedoms in ways that are horrible and wrong and not why they came to America or built this country. What the fuck. Excuse me. Outrage. Outrage.”

    “Frankly, I would call it forcible imprisoning of people in their homes against all of, their constitutional rights, in my opinion” he said, and then slammed the government imposed shutdown of all non-essential businesses as undemocratic and downright “fascist.”

    “If somebody wants to stay in their house, that’s great and they should be able to,” he said. “But to say that they cannot leave their house and they will be arrested if they do, this is fascist.  This is not democratic, this is not freedom, give people back their goddamn freedom.”

    Of course, neither the California or federal shelter-in-place guidelines penalize those who go outside with arrest. That did not prevent Musk from concluding that “the people are going to be very angry about this and are very angry.” What he meant is that he is angry because orders prevent Tesla from building cars at the Fremont facility while the shelter in place order is active.

    The billionaire first said panic about the coronavirus “is dumb” on March 6, as the US first began reporting cases that have now topped 1 million. His eagerness to return back to business reemerged on March 19 when he said that “based on current trends, probably close to zero new cases in US too by end of April.”

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

    Then on Tuesday, hours before today’s TSLA earnings call Musk escalated his complaints on Twitter, and just as he yelled at someone to “FREE AMERICA NOW”, he praised Texas’ relaxation of rules starting Friday.

    The irony, of course, is that Musk is calling the US government response to COVID-19 “fascist” while not only not criticizing but praising China on the same day he held a private conference call with the Chinese owners of the Shanghai Tesla plant…

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

    … the same China which put hundreds of millions of people into forced quarantine, and those who violated the non-stop curfew “disappeared” forever.

    The even bigger irony is that Musk could care less about US freedoms and what is democratic or fascist, when all he is truly raging about is the forced shuttering of his Fremont auto plant which he has repeatedly violated city ordinances just to keep running – while putting workers’ lived in jeopardy – in hopes of beating Wall Street estimates, just so he can keep the stock price elevated above $100 billion entitling him to a $720 million payout.

    The full rant can be heard in the clip below. It begins 38:30 into the clip and lasts about 5 minutes


    Tyler Durden

    Wed, 04/29/2020 – 22:26

  • The White House's Most Influential China Hawk Suspects COVID-19 Leaked From Wuhan Lab
    The White House’s Most Influential China Hawk Suspects COVID-19 Leaked From Wuhan Lab

    Casual readers of American political reporting probably wouldn’t recognize the name, but Washington reporters and other “insiders” almost certainly know not only his name, but his reputation for being perhaps the most influential White House figure that most Americans haven’t heard of.

    His name is Matthew Pottinger, and in addition to serving as Deputy National Security Advisor in the Trump Administration, he has served as a top advisor on China policy and “the White Houses foremost China expert”, an expertise Pottinger honed while reporting for the Wall Street Journal from Beijing, where he learned the perfected his language skills.

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    And in a profile published in Wednesday’s paper, the Washington Post explored Pottinger’s rise to becoming one of the most influential foreign policy voices in the West Wing began in the late 1990s, when he moved to Beijing to cover a rising China as a foreign correspondent.

    After 9/11 and the start of the wars in Iraq and Afghanistan, Pottinger decided to leave WSJ  at the age of 31 to enlist in the Marines.

    He was modestly older than many of his fellow recruits, but in an op-ed published explaining his decision, Pottinger recounted how seeing up close how Beijing treats its citizens helped instill in him a newfound respect for the US, and an intense wariness of the CCP. In one incident, Pottinger said, he was punched in the face by a government goon who attacked him while he was reporting on some sketchy business dealings involving a Chinese company.

    He also covered the SARS outbreak in 2003-2004.

    But living in China also shows you what a nondemocratic country can do to its citizens. I’ve seen protesters tackled and beaten by plainclothes police in Tiananmen Square, and I’ve been videotaped by government agents while I was talking to a source. I’ve been arrested and forced to flush my notes down a toilet to keep the police from getting them, and I’ve been punched in the face in a Beijing Starbucks by a government goon who was trying to keep me from investigating a Chinese company’s sale of nuclear fuel to other countries.

    To give credit where credit is due, WaPo was one of the first MSM organizations to seriously consider the possibility that the novel coronavirus could have leaked from a lab in Wuhan, a theory that Pottinger has been investigating since the outbreak began. Surprisingly, the paper reports that Pottinger was one of the first Trump Administration officials to push the president to call the virus the “Wuhan Virus” instead of the coronavirus, a move that was blasted as “racist” by both China and many American leftists. That recommendation, WaPo said, was based on intel obtained by Pottinger claiming Beijing was in the early stages of a misinformation campaign to try and deflect blame for the outbreak to the US.

    Pottinger’s push to use the term “Wuhan virus” has reverberated. Trump, eager to deflect blame of his own handling of the virus, escalated the rhetoric by using “Chinese virus.” Secretary of State Mike Pompeo angered allies in March when he pressured Group of Seven nations to sign a collective statement employing “Wuhan virus,” a demand they refused. Liberals called the language racist.

    To Pottinger, the critics missed the point: China’s state media had named the virus for Wuhan for weeks before suddenly pressuring the World Health Organization to formally name it covid-19. Beijing needed to own it.

    And while Pete Navarro is still unquestionably the administration’s most visible China hawk, Pottinger is heavily involved in the Trump Administration’s plan to chart a new course for the US-China relationship that would take us closer to a “decoupling”. Globalists cringe at the thought of untangling the complicated web of interconnected economic interests tying the two countries together. But the virus has undermined the view that globalization is inevitable and de-globalization would be inherently catastrophic.

    When asked who is responsible for the severity of the global coronavirus outbreak, Pottinger insists that China is to blame. Because by the time the US was receiving the first information about the virus from China in January, it was already likely too late – something that surveillance testing, as well as reports that the earliest COVID-19 death might have happened as early as Feb. 6, seem to suggest.

    Pottinger believes Beijing’s handling of the virus has been “catastrophic” and “the whole world is the collateral damage of China’s internal governance problems,” said a person familiar with his thinking, who, like others, spoke on the condition of anonymity to discuss his views.

    After first joining the Trump administration in 2017 as senior director of the National Security Council’s Asia division, Pottinger, 46, is now a pivotal player in the Trump administration’s attempts to reorient U.S. policy on China toward a more confrontational approach, according to multiple people familiar with his role.

    WaPo noted in a lengthy piece explaining the ‘failings’ of the Trump Administration during the early days of the outbreak that Pottinger was the first to push for travel bans from China and Europe. Trump’s decision to drag his feet on the European bans might have directly contributed to the explosion of cases in New York. One study found similarities between the coronavirus strain spreading in New York, and a strain spreading in Northern Italy that researchers said could explain the excessive mortality in both areas.

    Most importantly, Pottinger has pushed intelligence agencies to explore the theory that the virus may have been accidentally released from a Wuhan lab, a suspicion that was borne out in a recent government report.

    Behind the scenes, Pottinger has pushed intelligence agencies to explore the theory, popular among conservatives, that the pathogen was accidentally released by a virology lab in Wuhan, rather than a wild animal market. So far, that theory has not been proved, but Pottinger believes there is more circumstantial evidence in favor of the lab explanation, said people with knowledge of his views.

    He and like-minded State Department aides have warned outside China experts, who had criticized the administration’s use of “Wuhan virus,” that they should remain skeptical of Beijing’s motives. Their message amounted to a warning that more damaging information would come out about Beijing’s handling of the pandemic, according to four people on the calls.

    Long before the outbreak, Pottinger reportedly kept a ‘scorecard’ in his office with a ‘highly detailed’ accounting of all the ways China is undermining the US.

    As Asia director, Pottinger kept in his office a large whiteboard mapped out with a highly detailed accounting of China’s growing global influence. The diagram was labeled with military-style buzzwords such as “Lines of Effort” and “Strategic Goals,” according to people who saw it.

    A former NSC colleague called it a scorecard of all the ways “the Chinese Communist Party was attacking the West — and how we could fight back.”

    During a recent security forum, Pottinger was asked to explain why he supports ‘decoupling’ the US and China. His answer:

    “Decoupling,” he replied, “is when you have a Great Firewall where not a single Western Internet company has been able to prosper or survive in China, by design. When Christian churches are torn down and ethnic minorities are put into reeducation camps, that’s ‘decoupling.’ So the ‘decoupling’ is something that’s been underway for quite a long time – and it is not driven by the United States.”

    For all the pro-China liberals in the US, the message from Pottinger is clear: If you spend more time criticizing ‘oppression’ by the US government, you should try living in Beijing for a few years. That should be enough to change your mind.


    Tyler Durden

    Wed, 04/29/2020 – 22:25

  • 6 Central Banks & The Ponzi Scheme That Will Bankrupt The World
    6 Central Banks & The Ponzi Scheme That Will Bankrupt The World

    Authored by Egon von Greyerz via GoldSwitzerland.com,

    The destiny of the world is now in the hands of 6 central banks, Fed, ECB, BoE (England), PBOC (China), BoJ (Japan), SNB (Swiss). This in itself bodes extremely badly for the global financial system. This is like putting the villains in charge of the judicial system. For decades these central banks have totally abused their power and taken control of the world monetary system for the benefit of their banker friends and in some cases their private shareholders. 

    The central banks have totally corrupted and destroyed the financial system, by printing money and extending credit that doesn’t exist. Everyone knows that creating money out of thin air makes the money totally worthless. These bankers know, that if you stand next to the printing press and get the money first, it does have some value before it circulates. And this is exactly what they have done. Once the money reaches the people, it devalues rapidly. As Mayer Amschel Rothschild said over 200 years ago: 

    “Permit me to issue and control the money of a nation, and I care not who makes its laws.”

    WORTHLESS MONEY PRINTING LEADS TO WORTHLESS ASSETS 

    But the bankers are not just in charge of the printing press, they are also in control of the cost of money in the form of interest rates. By manipulating rates, they are setting aside the natural laws of supply and demand. So they can print unlimited amounts of money and price it at 0%. The effect of this is a debt bubble that can never be repaid and an asset bubble that is so fake that not a single asset is worth a fraction of the value it is priced at. 

    The central banks are now panicking and are creating trillions of dollars, euros etc. Add to that additional bank lending and government debt and we are in the tens of trillions.

    Just looking at the 6 biggest banks mentioned above, their balance sheets have gone  up by $3 trillion from $21 trillion at the end of February 2020 to $24T today. 

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    But this is just the beginning. We must remember that it wasn’t the Coronavirus that started the money printing. It all began back in late July 2019 when the ECB warned the world that something was seriously wrong by saying, we will do whatever it takes. A few weeks later the Fed started daily Repos of $100s of billions. This was the time when serious problems in the financial system started. 

    $5 TRILLION CREATED WITH ZERO INTRINSIC VALUE

    At the end of Sep 2019, the Fed balance sheet was $3.8T and today it is $6.6T, an increase of $2.8T most of which occurred since March 2020. During the same period (Sep 2019-April 2020) US debt grew by $2T from $22.7T to $24.7T. 

    So between the Fed and the US government, they have created almost $5T since the end of Sep 2019. Most of this increase has taken place in April 2020. Remember that this is not real money but just money fabricated out of thin air. It involved no work, no service in return and no production of goods. Thus this money has ZERO intrinsic value. It is just a computer entry of one 5 and 12 zeros. Therefore the recipients of these funds are getting fake and worthless money. 

    WHY DOESN’T THE FED JUST PRINT THE ANNUAL US GDP OF $21.5T

    If the Fed or the US government claims that they are issuing real money that has a real value, why don’t they just print $21.5 trillion annually. This equates to US annual GDP. So instead of having to work and produce goods, every US adult and child is just given $65,000 each. ($21.5T divided by 331 million population). Nobody would need to work and everyone can just spend the money as they like and live in total bliss just like in Shangri-La. Obviously someone would need to produce food and provide essential services but that could all be bought in from low cost countries.

    If the US government and the Fed really believe that they are solving all problems by printing money, why don’t they then go full out and print the annual GDP. But why then stop at $21.5T which is the current GDP? Why not print $43T to double the standard of living. Or why not go to $100T so everyone can really get wealthy. If the current system of printing $ trillions or even $10s of trillions works, I would like the Fed and the government to explain why they can’t print $100s of trillions. Are they saying that printing $10T represents real money but not $100T which would be fake? Can any serious observer believe that these 6 central banks will save the world by printing worthless money?  How far do they think they can take their Ponzi scheme before the world discovers their bluff?

    FED TO PRINT $9.5 TRILLION AND BUY ALL THE GOLD IN THE WORLD

    To test the value of the printed money, I suggest that the Fed prints $9.5 trillion and buys all the gold in the world, including jewellery, of 170,000 tonnes at the current price of $55.6 million per tonne. If they don’t understand what will happen, I can tell them. They would have real problems getting hold of 1 tonne of physical gold at that price. By the time they buy the second tonne, the market will value the dollar at its intrinsic value of ZERO and gold measured in worthless dollars will go to infinity. 

    THE END OF THE DOLLAR

    The Fed is of course not stupid. They understand the consequences of their actions. They know they are playing a very dangerous game that could fail at any time. They are also aware that the dollar since 1971 has fallen 98% in real terms, which is versus gold. By introducing the Petrodollar combined with policing the global financial system, the US has managed to maintain an artificially high value of their currency for decades. But that is now coming to an end. The combination of collapsing oil prices and countries like China and Russia abandoning the dollar will start the dollar ball rolling. Also, the unlimited printing that the US has started will soon accelerate as companies and financial institutions default, leading to a dollar crash.

    THE CURRENCY RACE TO THE BOTTOM

    In a few months time, nobody will want to hold dollars as the greenback collapses. The problem is that there is not a single solid currency today. The Euro is toast and so is the Yen and the Pound. These countries are all into massive money printing as a result of the current global crisis. So what about the Swiss franc. It has always been seen as a safehaven in periods of crisis. Well, the Swiss might be a currency to flee to for a very brief period. But if we analyse Switzerland’s National Bank, the SNB, as well as the Swiss banking system we will find big problems here like anywhere else in the world. 

    As Swiss I don’t like criticising a country which has the best political system in the world and has had very sound finances and a strong currency. But sadly the conservative Swiss banker is gone and the SNB and the whole Swiss banking system are taking risks that are hair-raising. 

    SWISS NATIONAL BANK – THE WORLD’S BIGGEST HEDGE FUND

    If we start with the SNB, it has a balance sheet which is CHF 852B ($878B) or 122% of Swiss GDP. This is the most leveraged balance sheet of any major central bank. But not only that, if we analyse the holdings of the SNB, we find that it is the biggest hedge fund in the world. Just over 76% of the holdings are in US dollars and Yen with 24% in other currencies like Yen, GBP and CAD. Almost $100B are in US stocks like Apple, Microsoft, Google etc. 

    So we find that the SNB is a massive speculator in currencies with 92% of the assets in non Swiss franc investments. This is a massive bet by a national bank against its own currency. The official reason why they are doing it is to keep the Swiss franc low against its main trading nations, the EU and the US. But it is extremely dangerous and irresponsible against the country and the shareholders to leverage the balance sheet to this extent. The biggest shareholders are the Cantons (local States) who own 55%. In Q1 2020, the SNB lost CHF38B ($39B) on its investments, mainly in the US stock market. The Cantons are dependent on the dividends from the SNB so this is a big blow. 

    But this is just the beginning for the SNB. When the US stock market falls another 30% or more, which is likely, the losses will mount. But still worse are the currency positions. For every 10% the dollar and euro fall against the Swiss, it means another $80B loss for the SNB. That will of course lead to more Swiss money printing and the Swiss franc weakening which in theory could offset the currency losses. But it is difficult to predict who wins the currency race to the bottom. Most likely is that the dollar will win closely followed by the euro and yen. And if that will be the case, the SNB will incur substantial losses before the Swiss franc loses value. 

    It is not only the SNB which is a timebomb. So is the Swiss banking system which is 5x Swiss GDP.  That is too big for a small country when debt markets come under pressure, which is already starting to happen. Relative to the size of the country the SNB will have to print massive amounts of Swiss francs which will have zero value just like all printed money. 

    The conclusion is clear. No banking system in the world is safe, including Switzerland’s. So anyone who holds major assets within the financial system be it cash or securities, is exposed to an unacceptable risk in coming months and years. 

    MARKETS

    Stocks are in a correction up in a secular downtrend which started in February. In the Dow we might be near the end of this correction or it could last slightly longer. But the risk is to the downside and anyone invested in the stock markets is likely to lose the majority of his wealth in coming months and years.

    Bonds are extremely vulnerable as credit deteriorates on a daily basis. All debt will come under pressure including Sovereign. Central banks will do what they can to hold rates down but in the end the market will win as bonds sell off and rates climb rapidly. 

    GOLD

    Gold (and silver) will be the obvious winner as currency debasement accelerates. My 18 year old target of $10,000 in today’s money is virtually guaranteed. 

    The chart below shows gold against US money supply (FMQ – Fiat Money Quantity). It shows that gold is as cheap today as it was in 1970 when the price was $35 or in 2000 when gold was $290. 

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    With massive pressure in the physical market where both the LBMA bullion banks and Comex are unable to meet their obligations to deliver physical gold, it is only a matter of time before gold breaks out properly. I don’t like making sensational forecasts of the gold price since that attracts the wrong buyers. Still 10x today’s price or $17,000 is certainly realistic with just normal inflation. The attached chart by goldchartsrus confirms that level. Gold adjusted for real inflation would be at $18,100 to be equal to the 1980 top of $850.

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    Hyperinflation will of course add many zeros to the gold price even though that price would be meaningless since it would only reflect the debasement of currencies. But it won’t be meaningless to the people who are still holding on to worthless dollars or euros instead of holding the only money that has survived in history which is gold. 

    Just speak to people who have lived in Venezuela, Zimbabwe, Hungary or Yugoslavia to take recent hyperinflationary examples. These people lost all their money and so will the ones who are not protected against the coming hyperinflation.

    Remember that hyperinflation does not arise as a result of demand led increases in prices but as a result of collapsing currencies. And as I have explained above, this is what we will see next as money printing accelerates. 

    Physical gold must not be seen as a speculative investment but as the only money that has survived throughout history and maintained its purchasing power. So gold is insurance and gold is wealth protection. That is why we must hold gold against a financial system and currency system which will not survive in their present form. 


    Tyler Durden

    Wed, 04/29/2020 – 22:05

  • China PMIs Expand For 2nd Month After February Crash, But Real-Time Indicators Paint Different Picture
    China PMIs Expand For 2nd Month After February Crash, But Real-Time Indicators Paint Different Picture

    And just like that, China’s February swoon is ancient history.

    After Beijing reported a dramatic rebound in March PMIs from the February crash which saw both the manufacturing and service PMIs tumble to record lows, it was virtually guaranteed that the April data would confirm a continuation of China’s “solid recovery” trend.

    After all, it has now become a political race between China and the US over whose economy is more unscathed as a result of the coronavirus pandemic as the Global Times editor in chief Hu Xijin made abundantly clear today when in response to the latest US GDP print, tweeted “Already fell 4.8% in Q1, will definitely be worse in Q2. How will President Trump explain? I guess he would say the figure is better than expected and is so much better than any other country in the world.When China sees positive growth rate in Q2,he would say the number is fake.”

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    Well, Trump certainly wouldn’t be the first to accuse China of fabricating numbers, especially in light of the latest official PMI numbers of out China which showed manufacturing dip from 52.0 to 50.8, missing expectations of 51.0 yet still in expansion territory; at the same time the Nonmanufacturing PMI printed at 53.2, up from 52.3, and well above the 52.5 consensus estimate.

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    But would Trump be right if accusing China of also fabricating its PMIs which show the economy now well in expansion territory for a second month? For the answer we go to real-time activity trackers which have become so popular ever since the breakout of the coronavirus pandemic. What they show is anything but an economy that is expanding.

    First, according to channel checks, we can clearly see that the latest activity in such sectors are hotels, catering and entertanment is running far below indicative 2019 levels, with just mining and real estate roughly comparable to year ago levels.

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    To be sure, while daily coal consumption is indeed on par with 2019…

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    … transportation – both ground and by air – across China remains a pale shadow of 2019 levels.

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    More ominously, the all-important for China’s trade economy container throughput at major port appears to still be far below last year levels.

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    And most concerning of all for the country that still barely has a functioning bankruptcy process, is that the number of bankruptcies filings is surging:

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    Superimposing China and the US in industrial and consumer activity shows that while China is well ahead in terms of activity recovery, it has a ways to go before it catches up to 2019 levels. As for the US, it certainly has a ways to go.

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    The final proof that China has a ways to go before it recovers, let alone is in “expansion”, come from a handful of other high-frequency indicators as shown below.

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    Conclusion: China’s official PMI numbers are about as credible as its coronavirus “data.”


    Tyler Durden

    Wed, 04/29/2020 – 21:42

  • 'War On Cash' Is Kicking Into Overdrive
    ‘War On Cash’ Is Kicking Into Overdrive

    Authored by James Rickards via The Daily Reckoning,

    In the depths of the 2008–09 financial crisis, Obama’s first chief of staff, Rahm Emanuel, remarked that one should never let a good crisis go to waste. You probably recall him saying that.

    He was referring to the fact that crises may be temporary but hidden agendas are permanent.

    The global elites and deep state actors always have a laundry list of programs and regulations they can’t wait to put into practice. They know that most of these are deeply unpopular and they could never get away with putting them into practice during ordinary times.

    Yet when a crisis hits, citizens are desperate for fast action and quick solutions. The elites bring forward their rescue packages but then use these as Trojan horses to sneak their wish list inside.

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    The War on Cash Is Decades Old

    The USA Patriot Act that passed after 9/11 is a good example. Some counterterrorist measures were needed, of course. But the Treasury had a long-standing wish list involving reporting cash transactions and limiting citizens’ ability to get cash.

    They plugged that wish list into the Patriot Act and we’ve been living with the results ever since, even though 9/11 is long in the past.

    Obviously, the effort to eliminate cash is hardly new. It has been going on for many years and in many forms.

    The U.S. discontinued the use of large-denomination bills in the late 1960s. Until 1969, $500, $1,000, $5,000 and even $10,000 bills were issued, even though they were printed decades earlier.

    Today the largest bill is a $100 bill, but it has lost 80% of its purchasing power since 1968, so it’s really just a $20 bill from those days. Europe has ended the 500-euro note and today the largest note in euros is 200 euros.

    Ignore the Official Reasons

    Harvard professor Ken Rogoff has a book called The Curse of Cash, which calls for the complete elimination of cash. Many Bitcoin groupies say the same thing. Central banks and the IMF are all working on new digital currencies today.

    The reasons for this are said to include attacks on tax evasion, terrorism and criminal activity. There’s some truth to these claims. Cash is anonymous, so it can’t be tracked.

    But the real reason is because the elimination of cash would allow elites to impose negative interest rates, account freezes and confiscation.

    They can’t do that as long as you can go to your bank and withdraw your cash. That’s the key.

    In other words, it’s much easier for them to control your money if they first herd you into a digital cattle pen. That’s their true objective and all the other reasons are just a smokescreen.

    And now, predictably, the latest attack on cash comes courtesy of the COVID-19 pandemic.

    Crisis Meets Opportunity

    This crisis is even larger and scarier than the 2008 crisis, which gives elites even more opportunity to ram their agendas through without serious opposition. They don’t intend to let it go to waste.

    Sure enough, government agents and tech vendors are now claiming that cash is “dangerous” because it could contain traces of the coronavirus.

    While that’s not impossible, it’s highly unlikely and no more likely than getting the virus from 100 other sources including package deliveries and shopping carts.

    Should we ban cardboard boxes and shopping carts too?

    If you’re really concerned about getting coronavirus from cash, it’s simple to wear sanitary gloves during any transactions (I do). Then put the cash to one side. The virus cannot live more than 10 hours or so on an inorganic surface. After a while, your cash is safe.

    But if you get scared into giving up cash because of COVID-19, then don’t complain when you find that your financial freedom is also gone when the world moves to 100% digital money.

    Because that’s the endgame here.

    How to Protect Your Wealth

    The time to protect yourself is now. The best way is to keep a portion of your wealth outside of the banking system.

    I strongly recommend that you own physical gold (and silver). I recommend you allocate 10% of your investable assets to gold. If you really wanted to be aggressive, maybe 20%. But no more.

    Just make sure you don’t store it in a bank, because it would be subject to confiscation. That defeats the whole purpose of having this sort of protection in the first place.

    One Small Positive

    As bad as the COVID-19 crisis is, and it is that bad, there’s one small positive to come out of it: It’s finally snapped investors out of their complacency regarding gold.

    I recommended gold at $1,100 per ounce, $1,200 per ounce, $1,300 per ounce, $1,400 per ounce, $1,500 per ounce and so on… you get the picture.

    But few people cared. They just yawned. Now that gold is $1,750 per ounce (up 75% since 2015), everyone wants gold!

    There’s only one problem. You may not be able to get any.

    That’s also something I predicted. I said years ago that when you most want your gold, you won’t be able to get it because everyone will want it at the same time and the dealers will be back-ordered and the mints and refiners will shut down.

    Now it appears that’s exactly what’s happening.

    The U.S. Mint at West Point is closing. That mint produces 1-ounce American Gold Eagle coins, so this will add to the shortage of Gold Eagles. The Royal Canadian Mint also closed for coin production temporarily a few weeks ago.

    Gold refiners in Switzerland are either closed or are operating on reduced hours. Gold logistics firms like Brink’s are also cutting back hours and reducing distribution of gold bullion.

    You Still Have a Chance

    It’s still possible to find some gold bars or coins from dealers who have inventory, but delays are long and commissions are high. The scarcity factor will only get worse as gold prices continue their rally in this third great bull market in history that began in 2015.

    Gold is difficult to get now but not impossible. If you don’t have yours yet, don’t wait any longer.

    If you have to pay a bit of a premium for physical gold over the officially listed gold price, don’t worry about that. It means nothing in the long run.

    I see gold going to at least $10,000 an ounce ultimately, so paying a little more right now is not an issue. It’s just an indication of the skyrocketing demand for physical gold right now.

    When the next panic hits, and it will hit, there won’t be any gold available at any price.


    Tyler Durden

    Wed, 04/29/2020 – 21:25

  • COVID-19 Rips Through Marine Boot Camp, Dozens Of New Infections
    COVID-19 Rips Through Marine Boot Camp, Dozens Of New Infections

    We previously reported on the growing controversy over US defense readiness as relates to continuing US armed services boot camps across the country. 

    Top Pentagon brass last month said keeping entry-level recruit training operational is essential to national security amid growing concerns the COVID-19 pandemic could spread at the military training centers:

    The Pentagon has decided that keeping all the services’ entry-level training camps up and running is critical to national security. The decision was reportedly at odds with what some service leaders recommended: a temporary pause on recruit shipping until the threat of the coronavirus lessened.

    Defense Department officials overrode the recommendations from senior military leaders to halt training for 30 days, The Washington Post reported March 16.

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    Recruits and drill instructors wearing face masks at Marine Corps Recruit Depot, San Diego. Image source: US Marine Corps/Marine Corps Times.

    However, beginning early this month the main military branches, starting with the Army and Marines, began “pausing” the shipping of new incoming recruits to boot camps on the East and West coasts. 

    But current ongoing boot camps would continue on, according to the late March decision, with the Pentagon saying it would frequently revisit the “pause” in additional trainees. Since then, the national Marine boot camps in San Diego and Parris Island, South Carolina have resumed receiving new Marine recruits, but with a mandatory 14-day isolation period upon arrival. 

    But as military analysis news site Connecting Vets Radio reports, COVID-19 has now hit Marine Corps Recruit Depot San Diego hard:  

    Almost four dozen recruits in San Diego have tested positive for the virus and have been quarantined for two weeks, according to the Marine Corps.

    The increase in COVID-19 positive recruits is related to the Marine Corps conducting more testing for the virus.  

    “We are experiencing challenging and unprecedented times…,” a video message from the Marine Corps top command said.

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    All new COVID-19 cases are in one Marine “company” but training has still been halted broadly, nor is there a current pause in new incoming recruits, making for an increasingly dangerous and tense situation concerning the potentially deadly disease.

    Spokesman for the recruit depot, Capt. Martin Harris told Marine Corps Times, “While these positive cases are currently isolated to one company and in quarantine, the increase of asymptomatic positive tests has prompted the testing of all personnel in quarantine and all recruits that arrive on the depot in the future, whether or not they present symptoms,” he explained.


    Tyler Durden

    Wed, 04/29/2020 – 21:05

  • Unsealed FBI Handwritten Notes, Emails Reveal Agents Plotted Perjury Trap On Flynn
    Unsealed FBI Handwritten Notes, Emails Reveal Agents Plotted Perjury Trap On Flynn

    Update (2030ET): Are we finally going to see some consequences for a deep state lackey?

    Shortly after the post below was completed, US Congresswoman Elise Stefanik tweeted the following:

    Devastating flashback clip of Comey just aired on @marthamaccallum show.

    When asked who went around the protocol of going through the WH Counsel’s office and instead decided to send the FBI agents into White House for the Flynn perjury trap…

    …Comey smugly responds “I sent them.”

    Here is the clip:

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    Will Comey do time?

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    Via SaraACarter.com,

    U.S. District Court Judge Emmet G. Sullivan unsealed four pages of stunning FBI emails and handwritten notes Wednesday, regarding former Trump National Security Advisor Michael Flynn, which allegedly reveal the retired three star general was targeted by senior FBI officials for prosecution, stated Flynn’s defense attorney Sidney Powell. Those notes and emails revealed that the retired three-star general appeared to be set up for a perjury trap by the senior members of the bureau and agents charged with investigating the now-debunked allegations that President Donald Trump’s campaign colluded with Russia, said Sidney Powell, the defense lawyer representing Flynn.

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    Moreover, the Department of Justice release 11 more pages of documents Wednesday afternoon, according to Powell.

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    “What is especially terrifying is that without the integrity of Attorney General Bill Barr and U.S. Attorney Jensen, we still would not have this clear exculpatory information as Mr. Van Grack and the prosecutors have opposed every request we have made,” said Powell.

    It appears, based on the notes and emails that the Department of Justice was determined at the time to prosecute Flynn, regardless of what they found, Powell said.

    “The FBI pre-planned a deliberate attack on Gen. Flynn and willfully chose to ignore mention of Section 1001 in the interview despite full knowledge of that practice,” Powell said in a statement.

    “The FBI planned it as a perjury trap at best and in so doing put it in writing stating ‘what is our goal? Truth/ Admission or to get him to lie so we can prosecute him or get him fired.”

    The documents, reviewed and obtained by SaraACarter.com, reveal that senior FBI officials discussed strategies for targeting and setting up Flynn, prior to interviewing him at the White House on Jan. 24, 2017. It was that interview at the White House with former FBI Special Agent Peter Strzok and FBI Special Agent Joe Pientka that led Flynn, now 61, to plead guilty after months of pressure by prosecutors, financial strain and threats to prosecute his son.

    Powell filed a motion earlier this year to withdraw Flynn’s guilty plea and to dismiss his case for egregious government misconduct. Flynn pleaded guilty in December 2017, under duress by government prosecutors, to lying to investigators about his conversations with Russian diplomat Sergey Kislyak about sanctions on Russia. This January, however, he withdrew his guilty plea in the U.S. District Court in Washington, D.C. He stated that he was “innocent of this crime” and was coerced by the FBI and prosecutors under threats that would charge his son with a crime. He filed to withdraw his guilty plea after DOJ prosecutors went back on their word and asked the judge to sentence Flynn to up to six months in prison, accusing him of not cooperating in another case against his former partner. Then prosecutors backtracked and said probation would be fine but by then Powell, his attorney, had already filed to withdraw his guilty plea.

    The documents reveal that prior to the interview with Flynn in January, 2017 the FBI had already come to the conclusion that Flynn was guilty and beyond that the officials were working together to see how best to corner the 33-year military veteran and former head of the Defense Intelligence Agency. The bureau deliberately chose not to show him the evidence of his phone conversation to help him in his recollection of events, which is standard procedure. Even stranger, the agents that interviewed Flynn later admitted that they didn’t believe he lied during the interview with them.

    Powell told this reporter last week that the documents produced by the government are “stunning Brady evidence’ proving Flynn was deliberately set up and framed by corrupt agents at the top of the FBI to target President Trump.

    She noted earlier this week in her motion that the evidence “also defeats any argument that the interview of Mr. Flynn on January 24 was material to any ‘investigation.’ The government has deliberately suppressed this evidence from the inception of this prosecution—knowing there was no crime by Mr. Flynn.”

    Powell told this reporter Wednesday that the order by Sullivan to unseal the documents in Exhibit 3 in the supplement to Flynn’s motion to dismiss for egregious government conduct is exposing the truth to the public. She said it’s “easy to see that he was set up and that Mr. Flynn was the insurance policy for the FBI.” Powell’s reference to the ‘insurance policy,’ is based on one of the thousands of texts exchanged by former FBI lawyer Lisa Page and her then-lover former FBI Special Agent Peter Strzok.

    In an Aug. 15, 2016, text from Strzok to Page he states, “I want to believe the path you threw out for consideration in Andy’s (former Deputy Director Andrew McCabe) office — that there’s no way he gets elected — but I’m afraid we can’t take that risk. It’s like an insurance policy in the unlikely event you die before 40.”

    The new documents were turned over to Powell, by U.S. Attorney Timothy Shea. They were discovered after an extensive review by the attorneys appointed by U.S. Attorney General William Barr to review Flynn’s case, which includes U.S. Attorney of St. Louis, Jeff Jensen.

    In one of the emails dated Jan. 23, 2017, FBI lawyer Lisa Page, who at the time was having an affair with Strzok and who worked closely with him on the case discussed the charges the bureau would bring on Flynn before the actual interview at the White House took place. Those email exchanges were prepared for former FBI Deputy Director Andrew McCabe, who was fired by the DOJ for lying multiple times to investigators with DOJ Inspector General Michael Horowitz’s office.

    Former FBI Director James Comey, who was fired by President Trump for his conduct, revealed during an interview with Nicolle Wallace last year that he sent the FBI agents to interview Flynn at the White House under circumstances he would have never done to another administration.

    “I probably wouldn’t have done or maybe gotten away with in a more organized investigation, a more organized administration,” Comey said. “In the George W. Bush administration … or the Obama administration, two men that all of us, perhaps, have increased appreciation for over the last two years.”

    In the Jan 23, email Page asks Strzok the day before he interviews Flynn at the White House:

    “I have a question for you. Could the admonition re 1001 be given at the beginning at the interview? Or does it have to come following a statement which agents believe to be false? Does the policy speak to that? (I feel bad that I don’t know this but I don’t remember ever having to do this! Plus I’ve only charged it once in the context of lying to a federal probation officer). It seems to be if the former, then it would be an easy way to just casually slip that in.

    “Of course as you know sir, federal law makes it a crime to…”

    Strzok’s response:

    I haven’t read the policy lately, but if I recall correctly, you can say it at any time. I’m 90 percent sure about that, but I can check in the am.

    In the motion filed earlier this week, Powell stated “since August 2016 at the latest, partisan FBI and DOJ leaders conspired to destroy Mr. Flynn. These documents show in their own handwriting and emails that they intended either to create an offense they could prosecute or at least get him fired. Then came the incredible malfeasance of Mr. Van Grack’s and the SCO’s prosecution despite their knowledge there was no crime by Mr. Flynn.”

    Attached to the email is handwritten notes regarding Flynn that are stunning on their face. It is lists of how the agents will guide him in an effort to get him to trip up on his answers during their questioning and what charges they could bring against him.

    “If we get him to admit to breaking the Logan Act, give facts to DOJ & have them decide,” state the handwritten notes.

    “Or if he initially lies, then we present him (not legible) & he admits it, document for DOJ, & let them decide how to address it.”

    The next two points reveal that the agents were concerned about how their interview with Flynn would be perceived saying “if we’re seen as playing games, WH (White House) will be furious.”

    “Protect our institution by not playing games,” the last point on the first half of the hand written notes state.

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    From the handwritten note:

    Afterwards:

    • interview

    • I agreed yesterday that we shouldn’t show Flynn (redacted) if he didn’t admit

    • I thought @ it last night, I believe we should rethink this

    • What is (not legible) ? Truth/admission or to get him to lie, so we can prosecute him or get him fired?

    • we regularly show subjects evidence, with the goal of getting them to admit their wrongdoing

    • I don’t see how getting someone to admit their wrongdoing is going easy on him

    • If we get him to admit to breaking the Logan Act, give facts to DOJ & have them decide

    • Or if he initially lies, then we present him (not legible) & he admits it, document for DOJ, & let them decide how to address it

    • If we’re seen as playing games, WH will be furious

    • Protect our institution by not playing games

    (Left column)

    • we have case on Flynn & Russians

    • Our goal is to (not legible)

    • Our goal is to determine if Mike Flynn is going to tell the truth or if he lies @ relationship w/ Russians

    • can quote (redacted)

    • Shouldn’t (redacted

    Review (not legible) stand alone

    It appears evident from an email from former FBI agent Strzok, who interviewed Flynn at the White House to then FBI General Counsel James Baker, who is no longer with the FBI and was himself under investigation for leaking alleged national security information to the media.

    The email was a series of questions to prepare McCabe for his phone conversation with Flynn on the day the agents went to interview him at the White House. These questions would be questions that Flynn may ask McCabe before sending the agents over to interview  him.

    Email from Peter Strzok, cc’d to FBI General Counsel James Baker: (January 24, 2017)

    I’m sure he’s thought through these, but for DD’s (referencing Deputy Director Andrew McCabe) consideration about how to answer in advance of his call with Flynn:

    Am I in trouble?

    Am I the subject of an investigation?

    Is it a criminal investigation?

    Is it an espionage investigation? Do I need an attorney? Do I need to tell Priebus? The President?

    Will you tell Priebus? The President? Will you tell the WH what I tell you?

    What happens to the information/who will you tell what I tell you? Will you need to interview other people?

    Will our interview be released publically? Will the substance of our interview be released?

    How long will this take (depends on his cooperation – I’d plan 45 minutes)? Can we do this over the phone?

    I can explain all this right now, I did this, this, this [do you shut him down? Hear him out? Conduct the interview if he starts talking? Do you want another agent/witness standing by in case he starts doing this?]

    Thanks,
    Pete


    Tyler Durden

    Wed, 04/29/2020 – 20:45

  • "Holy God. We're About To Lose Everything" – Pandemic Crushes Overleveraged Airbnb Superhosts 
    “Holy God. We’re About To Lose Everything” – Pandemic Crushes Overleveraged Airbnb Superhosts 

    “History doesn’t repeat itself, but it often rhymes,” as Mark Twain is often reputed to have said. Before the 2007-2008 GFC, people built real estate portfolios based around renters. We all know what happened there; once consumers got pinched in the GFC, rent payments couldn’t be made, and it rippled down the chain and resulted in landlords foreclosing on properties. Now a similar event is underway, that is, overleveraged Airbnb Superhosts, who own portfolios of rental properties built on debt, are now starting to blow up after the pandemic has left them incomeless for months and unable to service mortgage debt. 

    We have described the financial troubles that were ahead for Superhosts in late March after noticing nationwide lockdowns led to a crash not just in the tourism and hospitality industries, but also a plunge in Airbnb bookings. It was to our surprise that Airbnb’s management understood many of their Superhosts were overleveraged and insolvent, which forced the company to quickly erect a bailout fund for Superhosts that would cover part of their mortgage payments in April. 

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    The Wall Street Journal has done the groundwork by interviewing Superhosts that are seeing their mini-empires of short-term rental properties built on debt implode as the “magic money” dries up. 

    Cheryl Dopp,54, has a small portfolio of Airbnb properties with monthly mortgage payments totaling around $22,000. She said the increasing rental income of adding properties to the portfolio would offset the growing debt. When the pandemic struck, she said $10,000 in rental income evaporated overnight. 

    “I made a bargain with the devil,” she said while referring to her financial misery of being overleveraged and incomeless. 

    Dopp said when the pandemic lockdowns began, “I thought, ‘Holy God. We’re about to lose everything.'”

    Market-research firm AirDNA LLC said $1.5 billion in bookings have vanished since mid-March. Airbnb gave all hosts a refund, along with Superhosts, a bailout (in Airbnb terms they called it a “grant”). 

    “Hosts should’ve always been prepared for this income to go away,” said Gina Marotta, a principal at Argentia Group Inc., which does credit analysis on real estate loans. “Instead, they built an expensive lifestyle feeding off of it.”

    We noted that last month, “Of the four million Airbnb hosts across the world, 10% are considered “Superhosts,” and many have taken out mortgages to accumulate properties to build rental portfolios.”  

    Airbnb spokesman Nick Papas said the decline in bookings and slump in the tourism and travel industry is “temporary: Travel will bounce back and Airbnb hosts—the vast majority of whom have just one listing—will continue to welcome guests and generate income.”

    Papas’ optimism about a V-shaped recovery has certainly not been echoed in the petroleum and aviation industry. Boeing CEO Dave Calhoun warned on Tuesday that air travel growth might not return to pre-corona levels for years. Fewer people traveling is more bad news for Airbnb hosts that a slump could persist for years, leading to the eventual deleveraging of properties. 

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    AirDNA has determined that a third of Airbnb’s US hosts have one property. Another third have two and 24 properties and get ready for this: a third have more than 24.  

    Startups such as Sonder Corp. and Lyric Hospitality Inc. manage properties for hosts that have 25+ properties. Many of these companies have furloughed or laid off staff in April. 

    Jennifer Kelleher-Hazlett of Clawson, Michigan, spent $380,000 on two properties in 2018. She and her husband borrowed $100,000 to furnish each. Rental income would net up to $7,000 per month from Airbnb after mortgage payments, which would supplement her income as a part-time pharmacist and husband’s work in academia. 

    Before the virus struck, both were expecting to buy more homes – now they can’t make the payments on their Airbnb properties because rental income has collapsed. “We’re either borrowing more or defaulting,” she said.

    Here’s another Airbnb horror story via The Journal:  

    “That sum would provide little relief to hosts such as Jennifer and David Landrum of Atlanta. In 2016, they started a company named Local, renting the 18 apartments they leased and 21 apartments they managed to corporate travelers and film-industry workers. They spent more than $14,000 per apartment to outfit them with rugs, throw pillows, art and chandeliers. They grossed about $1.5 million annually, mostly through Airbnb, Ms. Landrum said.

    They spend about $50,000 annually with cleaning services, about $25,000 on an inspector and $30,000 a year on maintenance staff and landscapers, Ms. Landrum said, not to mention spending on furnishings.

    When Airbnb began refunding guests March 14, the Landrums had nearly $40,000 in cancellations, she said. The couple has been able to pay only a portion of April rent on the 18 apartments they lease and can’t fulfill their obligations to pay three months’ rent unless bookings resume. They have reduced pay to cleaning staff and others. Adding to the stress, Georgia banned short-term rentals through April.

    “It’s scary,” said Ms. Landrum, who said she has discounted some units three times since mid-March. The Landrums have negotiated to get some leniency from apartment owners on their leases. If not, Ms. Landrum said, they would have to sell their house.”

    To make matters worse, and this is exactly what we warned about last month, Airbnb Superhosts are now panic selling properties: 

    Greg Hague, who runs a Phoenix real-estate firm, said Airbnb hosts are “desperate to sell properties” in April. 

    “There’s been a flood of people. You have people coming to us saying, ‘I’m a month or two away from foreclosure. What’s it going to take to get it sold now?'” Hague said.

    And here’s what we said in March: “We might have discovered the next big seller that could ruin the real estate market: Airbnb Superhosts that need to get liquid.” 


    Tyler Durden

    Wed, 04/29/2020 – 20:11

  • JPMorgan: "If There Is Any Good News In This Report, Don't Believe It"
    JPMorgan: “If There Is Any Good News In This Report, Don’t Believe It”

    It’s perfectly fitting that in an economy which – as of tomorrow morning – will have 30 million newly unemployed workers (and perhaps as many as 50 million), and where the recession officially began after the biggest GDP plunge since the financial crisis (soon to be followed by an even worse collapse in Q2 growth) that stocks would soar almost 3% and tech names are now flat for the year.

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    Some would call it a depression; others a new bull market.

    But maybe we are somehow misreading today’s GDP print? Maybe, hidden somewhere deep between the lines there was just the right amount of good news the algos were looking for and the economic crash was really a catalyst to send stocks surging? Maybe we are deluding ourselves, and it wasn’t that bad? Well, according to JPM the answer is…

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    Nope, it looks like that the data was indeed bad. So bad, in fact, that stocks exploded because thanks to central planning, the worse the news for the ordinary man on the street, the richer Wall Street gets, courtesy of Powell. Here are the details from JPM:

    US GDP growth for 1Q fell 4.8% q/q saar. If there is any good news in this report, don’t believe it. These data are ugly, and are set to get much worse.

    While the outturn was not as bad as we had feared (-11.2%ar), it was modestly worse than consensus (-4.0%ar) and the largest decline since 2008. Moreover, given the likely hit to hard-to-measure service sector activity late in the quarter, there is a high likelihood of downward revisions. Notably, we have not changed our call for a 40%ar plunge in current-quarter GDP—but we lowered our 3Q20 projection so as to leave the level of GDP by 4Q20 unchanged at a huge 7% below its 4Q19 level.

    So now that we are in a quarter when the US economy is expected to shrink by 40%, or about $2 trillion, stocks are now just 10% below their all time highs, and at the current pace of levitation, will surpass the previous records in a few days.

    Incidentally, when Jerome Powell was asked what he thinks of this absolute idiocy, and if he is guilty of encouraging moral hazard and pushing stocks higher, he said that “we want markets to work, we are not focused on asset prices”, to which he added that “it’s been good to see markets working.” Which by implication means that when markets are down, they no longer “work.”


    Tyler Durden

    Wed, 04/29/2020 – 19:57

  • "It's A Weapon For The US" – China Official Renews Calls To Dethrone The Dollar
    “It’s A Weapon For The US” – China Official Renews Calls To Dethrone The Dollar

    Via SchiffGold.com,

    Last year, we reported extensively on a push toward de-dollarization by countries like Russia and China and their desire to undermine the ability of the US to weaponize the dollar as a foreign policy tool. Europe was even starting to push to dethrone the dollar as the reserve currency.

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    With the Federal Reserve running the dollar printing press at full speed and the US government expanding the national debt into the stratosphere, there are renewed calls for a currency to replace the dollar as the world reserve.

    This week, Shanghai Gold Exchange (SGE) President Wang Zhenying called for a new super-sovereign currency to replace the greenback.

    Reuters reports:

    Concern has mounted among some market participants over the dollar-denominated system as the US Federal Reserve cut interest rates to near-zero and embarked on unlimited quantitative easing to contain the economic damage of the coronavirus pandemic.”

    Wang said that the Fed’s monetary policy in response to COVID-19 would eventually tank the dollar even though the current crisis has triggered a scramble for greenbacks.

    When the Fed turns on the liquidity tap, the US dollar will, in theory, be in a long-term depreciatory trend.”

    Peter Schiff has been predicting that the dollar is going to tank for quite some time. It’s a matter of when, not if.  As the coronavirus crisis began to unfold and the Fed fired up the printing press, Peter said that with the central bank and government response to the coronavirus, hyperinflation has gone from being the worst-case scenario to the most likely scenario.

    Peter has also said he thinks people will eventually start dumping dollars.

    Nobody can hold dollars. Nobody can hold any bonds denominated in dollars. This is now like a game of musical chairs where nobody wants to get caught with dollars when the music stops playing.”

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    Wang not only expressed concern about the long-term stability of the dollar; he also echoed an oft-repeated criticism of the US controlling the reserve currency. America uses the privilege as a foreign policy tool. For instance, in 2014 and 2015, the blocked several Russian banks from SWIFT as relations between the two countries deteriorated. Last fall, the US threatened to lock China out of the dollar system if it didn’t follow UN sanctions on North Korea. Wang said this needs to end.

    It is a weapon for the US, but a source of insecurity for other countries. The currency the world ultimately chooses for global trade must not be one that gives someone privilege, while exposing others to insecurity.”

    A gold standard that prevented central banks from manipulating the money supply would be ideal. Peter has said that the US went off the gold standard in 1971, but he thinks the world is going to go back on it.

    The days where the dollar is the reserve currency are numbered and we’re going back to basics. You know, everything old is new again. Gold was money in the past and it will be money again in the future.”

    Regardless of what form it takes, it seems likely that efforts to push the dollar off its perch will only increase. The powers that be in America should be concerned about their currencies future as the world reserve. And Americans should be concerned about the future purchasing power of their dollars.


    Tyler Durden

    Wed, 04/29/2020 – 19:45

Digest powered by RSS Digest

Apr 29

Today’s News 29th April 2020

  • Italian Car Sales Plunged 98% In April
    Italian Car Sales Plunged 98% In April

    You can’t get much more of a “worse case scenario” in auto sales than watching numbers plunge an astounding 98%. But that’s exactly what has happened with new car sales in Italy, which remains mostly on lockdown, for the first 24 days of April for this year. 

    Across all sales channels in Italy, there were only 2,182 registrations, down from 107,930 the year prior, according to Automotive News Europe. 

    The numbers out of Italy likely provide foreshadowing for what the rest of Europe’s numbers will look like for the month of April. In Italy, showrooms closed during the beginning of March and those who had automobiles on order already were unable to take delivery of their new vehicles. March sales had already fallen 85%.

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    Dealers in Italy are going to be able to start re-opening May 4, after being shut down alongside of dealers in the UK, France and Spain. Germany has already allowed some of its showrooms to re-open. 

    The body that represents foreign automakers in Italy, UNRAE, reported that it expected car registrations to fall by up to 98% for the month. The Italy foreign carmakers’ association is pleading with the government to approve measures to boost car demand as soon as activities reopen, according to Bloomberg. 

    Estimates are for Italy to finish the month with total sales of between 2,500 and 2,600 units, compared to 175,654 in 2019. The total would have been even lower had Renault not registered 317 EVs in one day for a rental car company. 

    Recall, we reported that U.S. auto sales plunged to their worst numbers in a decade for March, with April numbers expected in just days. “The whole world is turned upside down right now,” one U.S. auto market researcher said in late March. 

    “There are basically no U.S. auto sales right now,” analyst Adam Jonas had commented.


    Tyler Durden

    Wed, 04/29/2020 – 02:35

  • EU Self-Censors As China's Global Intimidation Campaign Grows
    EU Self-Censors As China’s Global Intimidation Campaign Grows

    Authored by Soeren Kern via The Gatestone Institute,

    The European Union has caved in to pressure from China and has watered down a report on Chinese efforts to deflect blame for the coronavirus pandemic. Officials in Beijing reportedly threatened to block the export of medical supplies to Europe if the report was published in its original form.

    The revelations come as Chinese diplomats around the world are waging an aggressive disinformation campaign — described as a “Wolf Warrior” style of diplomacy, named after a Chinese nationalist action film series — aimed at controlling the narrative about the origins of the coronavirus.

    Chinese envoys have been especially aggressive on Twitter, which they are using to attack, intimidate and silence Western journalists, lawmakers and think tank scholars — essentially anyone who contradicts China’s official version of events.

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    Over the past year, more than 60 Chinese diplomats and diplomatic missions set up Twitter or Facebook accounts, according to the Reuters news agency, even though both platforms are banned in China, and have been using them to attack Beijing’s critics around the world.

    On April 21, the Brussels-based news outlet Politico Europe reported that it had received an advance copy of an EU report about Chinese and Russian disinformation activities related to the coronavirus disease (Covid-19). The report, which the EU was planning to publish that same day, included the following paragraph:

    “China has continued to run a global disinformation campaign to deflect blame for the outbreak of the pandemic and improve its international image. Both overt and covert tactics have been observed.”

    Chinese officials quickly contacted the European Union’s representatives in Beijing to try to kill the report, according to the New York Times, which also received an original version of it.

    The EU’s External Action Service eventually published the report — Covid-19 Disinformation — on April 24 but the language on China was heavily toned-down. The New York Times explained:

    “The original report cited Beijing’s efforts to curtail mentions of the virus’s origins in China, in part by blaming the United States for spreading the disease internationally. It noted that Beijing had criticized France as slow to respond to the pandemic and had pushed false accusations that French politicians used racist slurs against the head of the World Health Organization….

    “But China moved quickly to block the document’s release, and the European Union pulled back. The report had been on the verge of publication, until senior officials ordered revisions to soften the language….

    “The sentence about China’s ‘global disinformation’ campaign was removed, as was any mention of the dispute between China and France. Other language was toned down….”

    Under pressure from Chinese officials, Esther Osorio, a communications adviser to Josep Borrell, the head of the EU diplomatic service, personally intervened to delay the release of the initial report. The New York Times wrote:

    “Ms. Osorio, the aide to Mr. Borrell, asked analysts to revise the document to focus less explicitly on China and Russia to avoid accusations of bias, according to an email and interviews. She asked analysts to differentiate between pushing disinformation and aggressively pushing a narrative, and to document each ‘as we already see heavy pushback from CN’ — an abbreviation for China.”

    The EU was reportedly hoping to get better treatment for European companies in China. On April 25, however, the South China Morning Post, which also obtained a copy of the original report, revealed that Beijing had threatened to withhold medical supplies from Europe if the section on China was not removed.

    The Indian geopolitical analyst Brahma Chellaney summed up the broader implications of the EU’s actions:

    “EU self-censors its report after pressure from China. Diluting its report, EU removed references to China’s pandemic-related ‘disinformation campaign.’ EU remains a weak link in building a concert of democracies against China’s muscular authoritarianism.”

    Meanwhile, Chinese diplomats around the world, led by Foreign Minister Wang Yi, have been lashing out at governments and individuals they feel have insulted China. Some analysts say this reflects China’s growing influence in international affairs. “China wants other countries to know who’s boss,” wrote China watcher Bethany Allen-Ebrahimian.

    Other analysts argue that China’s intransigence reflects the fragility of the Chinese Communist Party and that Chinese President Xi Jinping is fueling nationalism to consolidate his control amid growing domestic anger over his mishandling of the coronavirus crisis. “All governments worry how they’ll survive this plague, but for a one-party authoritarian government, the fears are existential,” noted Kevin Libin, columnist and managing editor of Canada’s National Post.

    In any event, Chinese pressure tactics have worked in some instances — including with the European Union and the Philippines. With others, China’s bullying has backfired spectacularly.

    On April 15, Germany’s most popular newspaper, Bild, published an article titled, “What China Owes Us So Far,” which suggested that China should pay Germany €150 billion ($162 billion) in reparations for the coronavirus pandemic. The article included an itemized list of economic damage, including €50 billion for losses to small businesses and €24 billion for lost tourism.

    The Chinese Embassy in Berlin responded by accusing Bild of racism. In a letter, embassy spokesperson Tao Lili wrote:

    “Your report not only lacks essential facts and precise timelines, but also a minimum of journalistic due diligence and fairness. Those who do as you did with today’s newspaper article fuel nationalism, prejudice, xenophobia and animosity against China. It does not do justice to the traditional friendship between our two peoples or a serious understanding of journalism. Against this background, I ask myself, where in your editorial office does the dislike of our people and our state come from?”

    Rather than being cowed into submission, Bild’s editor-in-chief, Julian Reichelt, countered with his own letter: “You Are Endangering the Entire World.” It was published in German and English and addressed directly to President Xi Jinping. Reichelt wrote:

    “You rule by surveillance. You wouldn’t be president without surveillance. You monitor everything, every citizen, but you refuse to monitor the diseased wet markets in your country.

    “You shut down every newspaper and website that is critical of your rule, but not the stalls where bat soup is sold. You are not only monitoring your people, you are endangering them — and with them, the rest of the world.

    “Surveillance is a denial of freedom. And a nation that is not free, is not creative. A nation that is not innovative, does not invent anything. This is why you have made your country the world champion in intellectual property theft.

    “China enriches itself with the inventions of others, instead of inventing on its own. The reason China does not innovate and invent is that you don’t let the young people in your country think freely. China’s greatest export hit (that nobody wanted to have, but which has nevertheless gone around the world) is Corona….

    “You have created an inscrutable, non-transparent China. Before Corona, China was known as a surveillance state. Now, China is known as a surveillance state that infected the world with a deadly disease. That is your political legacy.

    “Your embassy tells me that I am not living up to the ‘traditional friendship of our peoples.’ I suppose you consider it a great ‘friendship’ when you now generously send masks around the world. This isn’t friendship, I would call it imperialism hidden behind a smile — a Trojan Horse.

    “You plan to strengthen China through a plague that you exported. You will not succeed. Corona will be your political end, sooner or later.”

    Other recent examples of efforts by Chinese diplomats to intimidate and silence those abroad who challenge the Chinese government include:

    Australia

    On April 23, Australia’s Prime Minister Scott Morrison called on all countries that are members of the World Health Organization (WHO) to support an independent inquiry into the coronavirus pandemic. He said that all members of the WHO should be obliged to participate in a review and added that Australia would push for the inquiry during the WHO Assembly on May 17.

    China’s foreign ministry spokesman, Geng Shuang, replied: “The so-called independent inquiry proposed by Australia is in reality political manipulation. We advise Australia to give up its ideological prejudices.”

    Brazil

    China’s Ambassador to Brazil, Yang Wanming, shared a tweet, later deleted, calling the family of President Jair Bolsonaro a “huge poison” after his son Eduardo blamed the “Chinese dictatorship” for the coronavirus pandemic. The tweet drew a rebuke from Brazilian Foreign Minister Ernesto Araújo, who said the tweet was inappropriate behavior for an ambassador.

    Canada

    On April 19, the Chinese Embassy in Ottawa denounced the Macdonald-Laurier Institute (MLI), a leading Canadian think tank, after it published an open letter accusing Chinese authorities of covering up the pandemic. The Chinese Embassy wrote:

    “Recently, the Macdonald-Laurier Institute published the so-called open letter, falsely claimed that the roots of the pandemic are in a cover-up by China, carried out malicious slander and attacks on the Communist Party of China and the Chinese government, and grossly interfered in China’s internal affairs. The Chinese side expresses its firm opposition over such actions by the MLI…. We urge the MLI to abide by the professional ethics, focus on the work a think tank is supposed to do, refrain from politicizing the research work, and give up anti-China nonsense.”

    A scholar at the MLI, Kaveh Shahrooz, tweeted:

    “The Chinese embassy in Canada has issued a statement attacking the @MLInstitute, where I serve as a Senior Fellow. We are a thorn in the side of the governments like those of China, Iran, and Russia. I am immensely proud of this fact.”

    Another MLI scholar, Shuvaloy Majumdar, tweeted:

    “I would like to congratulate the PRC Embassy-Ottawa for helping draw more scrutiny to the Communist Party’s intimidation of its own people, and its continued abuse abroad.”

    The Canadian government has remained silent on the issue. Charles Burton, a senior fellow and China expert at the MLI, said that Ottawa’s silence will only embolden Beijing to make further attempts to stifle free speech in Canada:

    “One would expect that the government of Canada would engage with the Chinese embassy about such a statement. It’s clearly an attempt to interfere with freedom of expression by a Canadian think tank and make allegations against the think tank that are clearly without basis whatsoever.”

    On April 19, Alberta Premier Jason Kenney tweeted:

    “Shocked to learn that my longtime friend Martin Lee, founder of the Hong Kong Democratic Party, was arrested today together with many of #HongKong’s most prominent citizens. Martin is the elder statesman of Hong Kong democracy. I hope for his immediate release.”

    The Chinese Consulate General in Calgary responded:

    “The Premier of Alberta commented on Twitter on the lawful arrest of an anti-China rioter by the Hong Kong police. No one stays out of the law. Ignoring the facts and openly advocating for the rioters can only undermine the rule of law, which is not in Canada’s own interests. We urge local politicians to abide by the basic norms governing international relations, respect the Hong Kong SAR law enforcement, and immediately stop interfering in China’s internal affairs.”

    Kenney replied:

    “I acknowledge that Alberta doesn’t have a foreign policy and I don’t freelance in foreign policy, but I’ll just say this — when a personal friend of mine is arrested as a political prisoner, I cannot in good conscience remain silent.”

    When China regained sovereignty over Hong Kong from the British in 1997, Beijing agreed to allow Hong Kong to enjoy its freedoms until 2047, in an arrangement known as “one country, two systems.”

    On April 14, The Globe and Mail, the most widely-read newspaper in Canada, published an opinion article titled, “The Chinese Communist Party’s Culture of Corruption and Repression has Cost Lives around the World.” The article accused the CCP of concealing, destroying, falsifying, fabricating, suppressing, misrepresenting information about the epidemic; of silencing and criminalizing dissent; and of disappearing whistleblowers, “all of which reflect the breadth of criminality and corruption in the party.” The article called on the international community to hold Chinese authorities accountable for their roles in creating “one of the greatest humanitarian crises in history.”

    The Chinese Embassy in Ottawa replied that the article was “full of hatred and prejudice” against the Communist Party of China (CPC):

    “How could anyone speak of such a thing as accountability? The ‘political virus’ of stigma is more dangerous than the disease itself. Those who try to ascribe so-called ‘criminality’ to the CPC are viewing China with ideological prejudice, and the ‘political motive’ behind that is doubtful.

    “We advise those persons to focus on their domestic epidemic prevention and control efforts. To shift blames won’t help mitigate the epidemic at home, nor will it help the international cooperation in prevention and control of the pandemic.”

    On April 1, The Globe and Mail published an opinion article, “Why Would We Trust China’s Official COVID-19 Numbers?” It asked:

    “The Chinese government’s first instinct has always been to hide the facts, especially if they reveal its own failures, so why would anyone believe the data coming out of China now on COVID-19? …. The Communist government owes its very legitimacy to persuading Chinese citizens that it does a better job than democratically elected administrations in protecting their interests. To that end, it has long inflated the country’s economic growth statistics and underreported its greenhouse-gas emissions. Why would anyone expect it to be straight about its own COVID-19 epidemic?”

    The Chinese Embassy in Ottawa replied:

    “The article views that the United States is a democratic state and China is a country led by the Communist government, leading to a ridiculous conclusion that the data of the U.S. is more transparent than that of China…. This is a naked double standard. We urge The Globe and Mail to abandon prejudice, respect facts, and stop making irresponsible remarks against China’s efforts to fight against COVID-19.”

    France

    On April 14, French Foreign Minister Jean-Yves Le Drian summoned the Chinese Ambassador to France, Lu Shaye, to express his disagreement with certain recent remarks by Chinese representatives in France as part of the coronavirus pandemic. “Some recent public statements by representatives of the Chinese Embassy in France do not conform to the quality of the bilateral relationship between our two countries,” he said.

    In a series of recent media statements, Lu accused “a certain French press” of besmirching China’s image by means of “lies” about its role in the current coronavirus pandemic. These media — which he never named but which seem, in his view, to represent the entire French press — have “mocked China” in violation of “all media ethics and the most elementary good faith” with an approach which, in Lu’s words, “borders on paranoia.”

    Speaking on the cable TV channel Mandarin TV on March 15, Lu accused the media of using “propaganda” methods to “brainwash” the public. In statements posted on the embassy website on February 14 and 29, he condemned the “irresponsible” comments and “absurdities” being said in the French media about China.

    The secretary-general of Reporters Without Borders (RSF), Christophe Deloire said:

    “This ‘lesson in journalism’ for the French press is inappropriate coming from a representative of the People’s Republic of China, a country that is ranked 177th out of 180 countries in RSF’s World Press Freedom Index and is one of the world’s biggest jailers of journalists. Beijing’s censorship of the Chinese media had a very negative impact by delaying the regime’s response at the outset of the coronavirus epidemic.”

    RSF added in a press release:

    “The ambassador’s statements reflect a policy concerted at the highest level of the Chinese government that aims to control international media coverage, as RSF demonstrated in a report entitled ‘China’s Pursuit of a New World Media Order’ in 2019.”

    Germany

    On April 12, the newspaper Welt am Sonntag reported that it had received leaked documents from the German Foreign Ministry which revealed that Chinese officials had directly contacted officials and employees at several federal ministries and asked them to “express themselves positively” about China’s management of the coronavirus crisis. Chinese officials also “engaged decision-makers from the political environment including lobbyists” to use them “for Chinese interests in Germany to promote the political agenda of the Communist Party.” The Chinese Embassy in Berlin responded by accusing Welt am Sonntag of being “keen to slander and smear” China. “All kinds of stigmatization of China should be stopped.”

    India

    The Chinese Ambassador to India, Ji Rong, has repeatedly lashed out at Indian officials and media outlets. On April 8, he tweeted:

    “So-called complaint by certain Indian organizations to UNHRC asking China compensate for losses caused by #COVID19 is ridiculous & eyeball-catching nonsense. At this difficult time, we need to work together instead of stigmatizing others & shifting blame.”

    On April 10, Ji tweeted:

    “It is regrettable some Indian media published articles referring #COVID19 again as ‘WuhanVirus’,’ChineseVirus’. It is clear consensus by international community that a virus should not be linked to any specific country, region or ethnic group. Such stigmatization is unacceptable.”

    Philippines

    On March 29, the Department of Health apologized for comments it made a day earlier that two batches of coronavirus test kits provided by China were substandard. Undersecretary for Health Maria Rosario Vergeire had said that kits made by Chinese manufacturers BGI Group and Sansure Biotech were only 40% accurate in diagnosing Covid-19 and that some of them would have to be discarded. The Chinese Embassy in Manila tweeted:

    “The Chinese Embassy firmly rejects any irresponsible remarks and any attempts to undermine our cooperation in this regard.”

    Sweden

    On January 18, Swedish Foreign Minister Ann Linde summoned the Chinese Ambassador to Sweden, Gui Congyou, after compared Swedish media coverage of China to a lightweight boxer who “provokes a feud” with a heavyweight. Congyou, who has become well-known for his outspoken attacks, told the state broadcaster SVT that the “frequent vicious attacks on the Chinese Communist Party and the Chinese government by some Swedish media” were comparable to a 48kg light featherweight boxer taking on a fighter almost twice his size:

    “The 86kg boxer, out of good will to protect the lightweight boxer, advises him to leave and mind his own business, but the latter refuses to listen, and even breaks into the home of the heavyweight boxer. What choice do you expect the heavyweight boxer to have?”

    Utgivarna, a group which represents Sweden’s private and public sector media, in a statement said:

    “Time and again, China’s ambassador Gui Congyou has tried to undermine the freedom of the press and the freedom of expression under the Swedish constitution with false statements and threats. It is unacceptable that the world’s largest dictatorship is trying to prevent free and independent journalism in a democracy like Sweden. These repeated attacks must cease immediately.”

    Venezuela

    On March 18, the Chinese Embassy in Venezuela posted an angry “declaration” consisting of 17 tweets after unidentified Venezuelan lawmakers referred to the coronavirus as the “Chinese Coronavirus” or the “Wuhan Coronavirus.” The Chinese Embassy said the lawmakers were afflicted with a “political virus” and recommended they “seek treatment.” A first step, it tweeted, would be for them to “put on a mask and shut up.”


    Tyler Durden

    Wed, 04/29/2020 – 02:00

  • US Navy Takes Delivery Of Futuristic Stealth Destroyer (7 Years Late)
    US Navy Takes Delivery Of Futuristic Stealth Destroyer (7 Years Late)

    After years of delays, the US Navy has finally taken delivery of its next-generation guided-missile stealth destroyer on Friday (April 24) for the next phase of developmental and integrated at-sea testing, reports Naval Today. 

    For the USS Zumwalt (DDG-1000), a 16,000-ton stealth destroyer, the construction timetable in July 2008 was:

    • October 2008: DDG-1000 starts construction at Bath Iron Works

    • September 2009: DDG-1001 starts construction at Bath Iron Works.

    • April 2012: DDG-1002 starts construction at Bath Iron Works

    • April 2013: DDG-1000 initial delivery

    And so, just seven years later… here it is…

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    The stealth destroyer has operational combat systems and will conduct sea trials, according to a statement from Naval Sea Systems Command. The ship was built at Bath Iron Works in Maine and commissioned in 2016. It transited through the Panama Canal shortly after, on its way to San Diego, when it experienced propulsion issues, had to be towed back to port.

    To bring the vessel back to combat-ready, the Navy has had to pour an additional $4 billion into upgrades. We noted in March 2019, DDG 1000 departed San Diego on the first operational cruise.

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    “Delivery is an important milestone for the Navy, as DDG 1000 continues more advanced at-sea testing of the Zumwalt combat system,” said Capt. Kevin Smith, DDG 1000 program manager, Program Executive Office, Ships.

     “The combat test team, consisting of the DDG 1000 sailors, Raytheon engineers, and Navy field activity teams, have worked diligently to get USS Zumwalt ready for more complex, multi-mission at-sea testing. I am excited to begin demonstrating the performance of this incredible ship.”

    By late 2019, there was talk within the ranks of the Navy that DDG 1000 could be fitted with hypersonic missiles.

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    DDG 1000 is the first of the Zumwalt-class destroyers. The USS Michael Monsoor (DDG 1001) is currently being outfitted with combat systems. The SS Lyndon B. Johnson (DDG 1002) is under construction at Bath Iron Works. 

    DDG 1000 is expected to join the US Pacific fleet, where it could be soon sent to the South China Sea in a show of force against the Chinese.  


    Tyler Durden

    Wed, 04/29/2020 – 01:00

  • China's Religious Persecution In The Age Of COVID-19
    China’s Religious Persecution In The Age Of COVID-19

    Authored by Susan Crabtree via RealClearPolitics.com,

    It’s a portrait of contrasts in the age of pandemic…

    In the United States, small but passionate protests have broken out in recent weeks as some workers and worshipers chafe at being quarantined – even as most federal and state governments caution against full and abrupt re-openings.

    Meanwhile, in the People’s Republic of China, where the coronavirus originated, citizens live in abject fear over voicing the mildest of criticism about their government’s response to the outbreak and aftermath, including government actions designed to place ethnic and religious minorities in harm’s way.

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    Among the abuses:

    Chinese authorities are continuing to operate some factories by forcing Uyghurs, Muslims from a Central Asian ethnic group, to fill in for workers sidelined by COVID-19. To groups monitoring religious freedom, this was merely the latest example of official persecution of the Uyghurs, predominantly Turkic-speaking Sunni Muslims who number more than 10 million and live in the northwest area of the country known as Xinjiang Uyghur Autonomous region. Uyghurs consider Beijing as a colonizing power and have pushed for a separate homeland or, at least, greater autonomy for their region. In recent years, China has tightened its grip on the region, forcing at least 1 million Uyghurs into 85 identified detention camps.

    The pandemic has also increased levels of mistreatment against other groups. African residents of Guangzhou, a manufacturing hub, have been force-tested for the virus, evicted from their homes and hotels, and corralled into quarantined areas with few resources. Images on social media have showed groups of black residents sleeping on a sidewalk, visibly shaking from the cold and wearing surgical masks to protect themselves. Several African ambassadors wrote a letter to China’s foreign minister earlier this month complaining that these people were being mistreated and falsely blamed for the spread of the virus to China.

    “The Group of African Ambassadors in Beijing immediately demands the cessation of forceful testing, quarantine and other inhuman treatments meted out to Africans,” they wrote.

    Beijing has also used the pandemic as an excuse to crack down on churches that aren’t officially sanctioned by the government. In some regions, officials have removed crosses from Christian church rooftops on the pretext that religious symbols cannot be “higher” than the national flag. In December, as China’s began dealing with the coronavirus outbreak, church leaders reported that government officials told them the crosses were “too eye-catching” and would attract groups of people to gather, undermining the strict lockdowns in place.

    Pastor Jian Zhu, who was raised in China and now serves as the director of the China Institute at Lincoln Christian University in Illinois, said persecution against unsanctioned Christian churches in China is “now the worst” he has seen since the late 1970s. The systematic harassment, according to Zhu, has included asking neighbors to spy on one another as well as pressuring schoolteachers, professors and students to sign a statement denouncing their faith.

    “They are trying to eliminate Christianity from public life,” he told The Christian Post in mid-April. “Cameras are all over to watch church and Christians go to Sunday services. Families are threatened not to go to church or they will be punished or their relatives could be in trouble.”

    Since the reports about forcing Uyghurs into factories began leaking two months ago, China’s systematic efforts to cover up the origins of the coronavirus and sow disinformation about it have sparked international outrage. But neither that indignation, nor the stepped-up persecution of religious and ethnic minorities, stopped the United Nations’ Asia-Pacific group from selecting China to represent the region on the United Nations Human Rights Council Consultative Group. The consultative body consists of five member states tasked with screening applicants to become independent U.N. human rights experts.

    China’s selection on April 1 drew immediate condemnation from U.S. human rights advocates.

    “The Chinese government is one of the worst abusers of religious freedom and other human rights,” said Gary Bauer of the U.S. Commission on International Religious Freedom, a bipartisan federal government entity that monitors international threats to religious freedom. In its 2019 annual report, USCIRF called on the Trump administration to impose targeted sanctions on Chinese officials responsible for severe religious freedom violations, especially Chen Quanguo, the current Communist Party secretary of Xinjiang region.

    Other Washington officials see the pandemic as a warning against the natural tendency by those with autocratic impulses to impose top-down, heavy-handed controls.

    Police in places as disparate as Kenya and India have beaten citizens avoiding curfew; nations such as Iran and North Korea are believed by health experts to have followed China’s example in vastly underreporting COVID-19 cases; and Philippines strongman Rodrigo Duterte has used the crisis to threaten declaring martial law.

    But the United States has not been immune from these impulses. Michigan Gov. Gretchen Whitmer was widely criticized for a sweeping stay-at-home order that precluded residents from driving from one house to another and for closing off entire sections of large stores that sell gardening supplies, include plant seeds. And when President Trump said he had “absolute power” over states to determine how and when to re-open their governments, the backslash from both conservatives and liberals was fast and furious. The president quickly backtracked and has allowed governors to make their own decisions, even as Trump has publicly second-guessed Georgia Gov. Brian Kemp’s statewide re-opening of salons, gyms, and bowling alleys.

    Secretary of State Mike Pompeo in early April warned that autocracies will use the crisis “to become more aggressive, deny people their rights,” and “lie more.” He said that “in the end, they do enormous harm to the people of their nation and put the rest of the world at risk as well.” 

    In Washington, most of the fury at China so far has focused on the government’s delay and dissembling over the source and extent of the epidemic and its unseemly sway over the World Health Organization, which initially minimized the effects the outbreak. Former U.S. Ambassador to the United Nations Nikki Haley, through her advocacy group Stand for America, last week launched a petition to Congress urging lawmakers to investigate Beijing for its role in the coronavirus crisis and pass measures to halt China’s influence in the U.S. and around the world.

    But China’s religious persecution amid the pandemic is also spurring congressional scrutiny.

    Sen. Ted Cruz, who has sought to shed a light on the China’s oppression of religious minorities and political dissidents throughout his career, said he planned to amplify the need for several bills he has written aimed at punishing China for the forced Uyghur labor, along with other measures addressing Beijing’s ongoing suppression of medical experts, journalists and political dissidents.

    “Those atrocities must be confronted, not just for their own sake but because, as we have now seen through the global spread of COVID-19, they are a direct threat to America’s national security and global public health,” Cruz spokeswoman Jessica Skaggs told RealClearPolitics.

    “Once we defeat this pandemic, Sen. Cruz will continue fighting to hold China accountable for its religious persecution of minorities and its broader repression on free expression and medical information.”

    Rep. Michael McCaul, the ranking GOP member on the House Foreign Affairs Committee, said China’s and the WHO’s handling of the coronavirus crisis enabled a regional epidemic to become a global pandemic  resulting in innumerous deaths in China and around the world. McCaul, along with 16 other House Republicans, sent a letter to the White House last week asking the president to condition future funding of the WHO on Director-General Tedros Adhanom Ghebreyesus’ resignation.

    “This malfeasance is another example of the CCP’s treatment of their own people and reminds us this is the same regime who puts millions of their own citizens in ‘concentration camps’ and uses them for forced labor,” he said.

    “The international community cannot let these appalling abuses go unpunished,” he told RCP.

    “We must work together to hold the CCP accountable for these egregious human rights violations, especially amid this public health emergency that they exacerbated.” 

    This is not solely a Republican concern. Rep. James McGovern, who chairs the bipartisan Congressional-Executive Commission on China, is calling on the international community to investigate Beijing’s efforts to repress religious and ethnic minorities in the midst of a pandemic. McGovern in March sponsored a bill that would bar the U.S. from importing any goods made in the Xinjiang factories and has urged all American companies, including Amazon, Nike, Apple and Calvin Klein, to investigate their supply chains in China and cease operation if they cannot definitively rule out the use of forced labor. Republican Sen. Marco Rubio wrote a similar Senate bill.

    “Forcing Uyghurs and others to work in factories while the risk of infection is high, tearing down Christian symbols and crosses, or condoning discrimination against African migrants is completely unacceptable an should be roundly condemned by the administration and investigated by the international community,” the Massachusetts Democrat said in a statement to RCP.

    “The virus exposed what we already knew: The Chinese government is all too willing to violate the human rights of the Chinese people, and its policies pose a real risk to the world’s health as well,” McGovern added.


    Tyler Durden

    Wed, 04/29/2020 – 00:05

  • Visualizing How COVID-19 Consumer Spending Is Impacting Industries
    Visualizing How COVID-19 Consumer Spending Is Impacting Industries

    Consumer spending is one of the most important driving forces for global economic growth.

    Beyond impacting some of the factors that determine consumer spend – such as consumer confidence, unemployment levels, or the cost of living – Visual Capitalist’s Katie Jones notes that the COVID-19 pandemic has also drastically altered how and where consumers choose to spend their hard-earned cash.

    Today’s graphic pulls data from a global survey by McKinsey & Company that analyzes how consumers are reining in their spending, causing upheaval across every industry imaginable.

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    While some industries are in a better position to weather the impact of this storm, others could struggle to survive.

    The Link Between Sentiment and Intent to Spend

    As consumers grapple with uncertainty, their buying behavior becomes more erratic. What is clear however, is that they have reduced spending on all non-essential products and services.

    But as each country moves along the COVID-19 curve, we can see a glimmer of increasing optimism levels, which in turn is linked to higher spending.

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    India’s consumers, for example, are displaying higher levels of optimism, with more households planning to increase spend—a trend that is also evident in China, Indonesia, and Nigeria.

    Meanwhile, American consumers are still more optimistic about the future than Europeans. 37% of Americans believe the country will recover in 2 or 3 months—albeit with optimism levels at the highest for people who earn over $100K.

    Strategic Consumer Spending

    Globally, consumers continue to spend—and in some cases, spend more compared to pre-pandemic levels—on some necessities such as groceries and household supplies.

    Due to changes in media consumption habits, consumers in almost all countries surveyed say they will increase their spend on at-home entertainment. This is especially true for Korea, a country that already boasts a massive gaming culture.

    As restrictions in China lift, many categories such as gasoline, wellness, and pet-care services appear to be bouncing back, which could be a positive sign for other countries following a similar trajectory. But while consumers amp up their spending on the things they need, they also anticipate spending less in other categories.

    The Industries in the Red

    Categories showing an alarming decline include restaurants and out-of-home entertainment.

    However, there are two particularly hard-hit industries worth noting that are showing declines across every category and country:

    Travel and Transport

    The inevitable decline in the travel and transportation industry is a reflection of mass social isolation levels and tightening travel restrictions.

    In fact, the U.S. travel industry can expect to see an average decline in revenue of 81% for April and May. Throughout 2020, losses will equate to roughly $519 billion—translating to a broader $1.2 trillion contraction in total economic impact.

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    According to the World Travel and Tourism Council, a staggering 50 million jobs are at risk in the industry, with 30 million of those jobs belonging to employees in Asia.

    Considering the travel and tourism industry accounts for 10.4% of global GDP, a slow recovery could have serious ramifications.

    Apparel

    Apparel is experiencing a similarly worrying slowdown, with consumption 40-50% lower in China compared to pre-pandemic levels. Both online and offline sales for businesses the world over are also taking a major hit.

    As consumers hold back on their spending, clothing brands of all shapes and sizes are forced to scale back production, and reimagine how they position themselves.

    “It’s an unprecedented interruption of an industry that has relied on speeding from one season’s sales to the next. And it is bringing with it a new sense of connectedness, responsibility and empathy.”

    – Tamsin Blanchard, The Guardian

    Towards an Uncertain Future

    Clearly the force majeure that is COVID-19 has not impacted every industry equally.

    For some, rebuilding their customer experience by appealing to changing values could result in a profitable, and perhaps much-needed revival. For other companies, there is no other choice but to play the waiting game.

    Regardless, every industry faces one universal truth: life after the pandemic will look significantly different.


    Tyler Durden

    Tue, 04/28/2020 – 23:45

  • If This Is What "The New Normal" Is Going To Look Like, It's Going To Be Horrible
    If This Is What “The New Normal” Is Going To Look Like, It’s Going To Be Horrible

    Authored by Michael Snyder via TheMostImportantNews.com,

    Are we going to allow fear of COVID-19 to fundamentally reshape social behavior for many years to come? 

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    It is hard to imagine a world where we are all afraid to shake hands with one another and where getting close enough to someone to actually have a conversation is deemed a “major risk”. 

    Yes, this virus spreads incredibly easily, but eventually this pandemic will fade and hopefully a lot of the measures that were instituted to help prevent the spread of COVID-19 will fade away too.  For example, I really don’t want Walmart telling me which direction I have to go down the aisle.  If I am in serious shopping mode, I want to be able to go up and down a particular aisle as much as I please. 

    If I get kicked out of a store someday for “going against the arrows” I am going to be really upset. 

    And I really, really don’t want to have my temperature checked when I go to eat at a restaurant, but that is apparently starting to happen all over the nation…

    With staff wearing masks, checking customers’ temperatures and using disposable paper place mats, some of the nation’s restaurants reopened for dine-in service Monday as states loosened more coronavirus restrictions. But many eateries remained closed amid safety concerns and community backlash.

    Checking temperatures is not going to stop the spread of this virus, because people can spread it long before they are showing any symptoms at all.

    So that needs to stop right now.  If you try to check my temperature when I enter your establishment, I will promptly turn around and go get a burger somewhere else.

    And it isn’t just businesses that are giving in to the hysteria.

    For example, a North Carolina woman named Erin Strine burst into tears when she realized that people would be sitting next to her on a flight that she was taking…

    Strine said she was alarmed by how little social distancing was taking place on the packed flight. She expressed concern for her health when she realized she was placed in a middle seat.

    ‘I really felt like my life and the life of everyone around me was at risk,’ she said. ‘I just sat there silently crying into my mask because I was really overwhelmed by how unsafe I felt.’

    I have a really easy solution for her.

    If you feel your life is at risk, don’t get on the plane.

    This isn’t rocket science.

    Her story caused me to recall one particular horrid flight that I once had to endure.  Like her, I was in the middle seat, and two extremely overweight individuals were stationed on either side of me.  And just when I thought it couldn’t get any worse, the person directly in front of me decided to recline their seat all the way.

    But instead of whining like a baby, I took my ordeal like a man.

    Look, I am not trying to minimize the threat of COVID-19 one bit.

    In fact, I was warning about the danger that this virus posed all the way back when the very first reports were coming out of China.  Anyone that follows my work on a regular basis can easily verify this.

    At this point, there are more than a million confirmed cases in the United States and more than 56,000 people have died.

    That is serious.

    And things have been particularly nightmarish in New York…

    Nearly half of all New Yorkers say they know somebody who has died of coronavirus, a new poll finds, shedding a stunning light on just how deeply the pandemic has hit the Big Apple.

    The state-wide survey, carried out by Siena College, discovered that 46 percent of New York City residents personally knew someone killed by COVID-19, as do 36 percent of respondents living in the suburbs, and 13 percent of those living upstate.

    Other areas of the country have been hit very hard as well.  In fact, the Boston Globe published 21 pages of obituaries on Sunday…

    As the total confirmed COVID-19 cases approach one million this week, including over 55,000 deaths — the vast majority of these concentrated in American east coast cities, especially in the tri-state area — newspaper obituaries in the same cities are expanding to unheard of numbers of pages.

    As a stunning case in point, The Boston Globe on Sunday included an unprecedented 21 total pages of death notices due to the coronavirus pandemic.

    The newspaper said its archives showed on the same day last year, the obit section was at its usual seven pages.

    This is the biggest public health crisis that our generation has experienced so far, and anyone that is not taking it seriously is just being stupid.

    But it isn’t the end of the world.  Much, much worse things are coming, and it is important to understand that.

    If we are not able to handle this pandemic, how are we possibly going to deal with all of the stuff that we are going to have to face in the future?

    On Monday, I was absolutely horrified to learn that a top emergency room doctor in New York City had committed suicide…

    The head of the emergency department at a Manhattan hospital committed suicide after spending days on the front lines of the coronavirus battle, her family said Monday.

    “She tried to do her job, and it killed her,’’ Dr. Philip Breen told the New York Times of his physician daughter, Dr. Lorna Breen, who had been medical director of the NewYork-Presbyterian Allen Hospital amid the pandemic.

    I can’t even imagine the horrors that she witnessed on a daily basis, but suicide is never, ever, ever the answer to anything.

    And nothing is ever so bad that it should make you want to kill yourself.

    No matter how difficult it was to deal with dying patients, her story never should have ended this way…

    In the days leading up to her death, the 48-year-old reportedly recounted to family members a series of traumatic scenes she’d witnessed working in the Manhattan hospital, including an onslaught of patients dying in front of her before they could even be removed from ambulances.

    Breen had recently contracted COVID-19 but had returned to work at Allen after a week-and-a-half of rest. After the hospital sent her home, she re-located to Charlottesville to recuperate under the instructions of her father, Dr. Philip C. Breen.

    There is always hope.  And in her case, she could have certainly walked away from being a doctor and done something else.

    Life is such a precious gift, and to see it thrown away so needlessly is absolutely heartbreaking.

    Yes, this pandemic is going to be with us for a while.

    And yes, a lot more Americans are going to get sick and a lot more Americans are going to die.

    But at this point nothing that we can do will be able to prevent the virus from spreading, and an increasing number of Americans are simply not going to follow restrictions anyway…

    Data shows that Americans are suffering from ‘quarantine fatigue’ and are venturing out of the house more often as the coronavirus pandemic continues – as researchers say that 44 states are actually going backwards when it comes to social distancing.

    A COVID‑19 mobility trends tool created by Apple shows that an increasing number of people in various major cities are now leaving the house more compared to the beginning of the month.

    If you are elderly, have a compromised immune system or are in some other high risk group, you will need to quarantine yourself for the foreseeable future.  But the rest of us are going to have to try to start resuming normal activities.

    Unfortunately, the “new normal” is likely to look a whole lot different from the “old normal”, and many people are not going to like that at all.


    Tyler Durden

    Tue, 04/28/2020 – 23:25

  • "Corona-Killing" UV Bots Could Be Deployed At Military Bases
    “Corona-Killing” UV Bots Could Be Deployed At Military Bases

    Last week President Trump suggested that injecting ultraviolet light into the body could be one method in killing COVID-19. Then, a biotech company, with unproven science, touted it could send a catheter into the throat of a patient, emitting UV rays into the body to defeat the virus.

    The push for UV products in today’s public health crisis is expected to increase, thanks to President Trump’s comments. A search trend for “does UV light kill coronavirus” has recently soared: 

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    Now a robotics company is retrofitting war robots with a UV disinfection system to kill the virus in enclosed spaces. 

    Ralph Petroff, president of the North America branch of Marathon Targets, spoke with Military.com about the four-wheeled autonomous robots that could soon be deployed at military bases for UV disinfecting operations.

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    “If you need them for target practice, you use them for target practice; if you need them for corona-killing, you use them for corona-killing,” Petroff said.

    He said his company has been acquiring UV disinfecting panels. Retrofitting each robot takes a matter of hours, and he said military installations had expressed interest. 

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    Marathon’s specifications of the robot show that it emits 110 watts via a vertical UV mount light fixture. The light takes about one minute to disinfect a surface one foot away and a little over six minutes to sterilize from five feet away.

    The science behind UV lights killing COVID-19 is still questionable. Petroff said he has plans to double the wattage of the light fixture to ensure effectiveness.

    The market for UV disinfection has been small over the years, but since President Trump touted UVs last week, the market could rapidly grow.

    “The UV part is the easy part,” he said. “Trying to get an autonomous robot to walk around without bumping into things and knowing where it is at all times is the hard part. We mastered that a long time ago.”

    We mentioned in March that “COVID-19 is very vulnerable to UV light and heat.” If UV light is proven effective against the virus, we suspect there will be a lot more interest in UV products. 


    Tyler Durden

    Tue, 04/28/2020 – 23:05

  • Triumph Of The Woke Oligarchs
    Triumph Of The Woke Oligarchs

    Authored by Joel Kotkin via RealClearEnergy.org,

    Like the rest of the country, although far less than New York, California is suffering through the Covid-19 crisis. But in California, the pandemic seems likely to give the state’s political and corporate elites a new license to increase their dominion while continuing to keep the middle and working classes down.

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    Perhaps nothing spells the triumph of California’s progressive oligarchy more than Governor Gavin Newsom’s decision to off-load the state’s recovery strategy to a task force co-chaired by hedge-fund billionaire Tom Steyer. A recently failed presidential candidate, Steyer stands as a progressive funder. He is as zealous as he is rich. Steyer sometimes even found the policies adopted by climate-obsessed former governor Jerry Brown not extreme enough for his tastes.

    Some conservatives wistfully hope that the pandemic will push the climate crusaders to the side. In California, at least, the corporate aristocrats, the governmental apparat, and the progressive nonprofits have  the momentum to impose their ultra-green vision on the state’s residents. Steyer may have made much of his fortune on fossil fuels, including coal, but now, approvingly described as “a reverent Christian,” the Bay Area mogul seems to be eager to repent, both through his political largesse and as operator of a fulsomely organic ranch down the coast from his San Francisco manse.

    What Kind of Recovery Will the Oligarchy Allow?

    Steyer’s failed, self-funded presidential run was full of extreme notions, such as imposing a “state of emergency” to address climate issues, essentially shutting down fossil fuels; and, as a kind of bonus for those who still can find work, promoting a $22 an hour minimum wage while offering alms for the soon-to-be-eliminated legions of miners and energy workers.

    If this is what he wants for the recovery, Steyer will simply accelerate the state’s already poor performance in creating higher-wage middle- and working-class jobs outside those created or subsidized by government. Over the past decade, according to Chapman University’s Marshall Toplansky, the vast majority of jobs being produced in California pay under the median wage, and 40% pay under $40,000 a year. Since 2008, the state has created five times as many low-wage jobs as high-wage jobs.

    California’s climate regulatory regime, notes relocation expert Joe Vranich, has been particularly hard on manufacturing. Over the past decade, according to BLS data, California has fallen into the bottom half of states in manufacturing-sector employment growth, ranking 44th last year; its industrial new job creation has been negative, compared with gains from competitors such as Nevada, Kentucky, Michigan, and Florida. Even without adjusting for costs, no California metro ranks in the US top ten in terms of well-paying blue-collar jobs; but four metro areas—Ventura, Los Angeles, San Jose, and San Diego—sit among the bottom ten.

    Perhaps nowhere will the pain be worse than in Bakersfield, capital of California’s once-vibrant oil industry. That industry is now slated for extinction by policymakers, even as the state has emerged as the largest US importer of energy and oil, much of it from Saudi Arabia. This ultimate effort at “virtue signaling” will cost California as many as 300,000 generally high-paying jobs, roughly half held by minorities, and will particularly devastate the San Joaquin Valley, where 40,000 jobs depend on the industry.

    “Imagine that the state dictated that the entertainment industry be eliminated from Los Angeles, or the tech industry be eliminated from Silicon Valley. That is what removing the oil and agriculture industries from Bakersfield is like. It is an existential threat to the entire area,” says Rob Ball of the Kern County Council of Governments.

    Poverty and Denial

    In California today, anyone who dissents—even a scientist or respected economist—with the green party line is dismissed as a heretic who is not worth listening to. This treatment is facilitated by a media that tends to embrace the most apocalyptic projections of, for example, coastal erosion, with little attempt to ascertain the facts or look at alternative analyses.

    The predictably pious Steyer and his fellow commissioners will no doubt claim devotion to the interests of average citizen. But, as a new lawsuit filed by some 300 civil rights leaders asserts, the policies being backed by Steyer and his fellow commissioners have already had produced disastrous results for millions of Californians. The real collective badge of shame is not California’s GHG emissions but the prevalence of poverty amid enormous affluence.

    Critically, economic growth, at least outside asset- and iPhone-price inflation, is itself considered a threat to the planet within the environmental community, which largely hails the Covid lockdowns as a “fire drill” for future actions to promote “de-growth.” The open hope, as a Psychology Today writer puts it, would be to tame “the human beast” by imposing low-consumption lifestyles on hoi polloi, including in developing countries. Such policies might not affect the prospects for social media, search, or import-dependent firms like Apple, but they have already been beastly for millions of Californians.

    Even before the lockdowns, which could last until summer, California’s cost-adjusted poverty level was among the highest of any state and remained higher in 2019 than in 2007. Nearly one in five Californians—many who are working—lives in poverty (using a cost-of-living adjusted poverty rate), the highest rate of any state; the Public Policy Institute of California estimates that another 20% live in near-poverty—roughly 15 million people in total.

    The lack of upwardly mobile jobs has created poverty rates for California’s Latinos and African Americans, most of them working, and has made them poorer than their counterparts elsewhere, including in Texas, California’s primary competitor for talent, jobs and company locations and a state with a similarly diverse population. More than half of all California Latino households, now a plurality in the state, can barely pay their bills, according to a United Way study. “For Latinos,” notes longtime political consultant Mike Madrid, “the California Dream is becoming an unattainable fantasy.”

    The loss of jobs, particularly in hospitality and retail, from the coronavirus crisis could further exacerbate this situation further. The most extreme and, most obvious expression of pervasive inequality and economic dysfunction lies is evident on our streets. Indeed, even as homelessness has been reduced in much of the country, it has continued to swell in California. Roughly half the nation’s homeless population lives in the Golden State, many concentrated in disease- and crime-ridden tent cities in either its largest urban region, greater Los Angeles, (its largest urban region) or in iconic San Francisco.

    And for Our Next Act: Making the State More Vulnerable to the Next Pandemic

    When Steyer and other members of the task force—one can’t help but compare them to the crime commission run in New York City by Charles “Lucky” Luciano—decide to open the economy, they will no doubt claim, as with their climate pieties, that they are acting purely on the basis of “science”—as long as it agrees with their conclusions.

    Logic is not a strong point here, since the green lobbies and their developer allies keep pushing density and getting people out of the relative safety of their cars and into mass transit, which, along with entrenched poverty, has done much to deepen the crisis in New York, as the Manhattan Institute’s Howard Husock observes.

    As of April 26, Los Angeles County, with almost 2 million more residents than New York’s five boroughs, had suffered 913 Covid deaths, compared to 12,067 in New York City. The Big Apple accounts for over two-fifths of all US transit ridership, and its subways have repeatedly been singled out, including in a recent MIT report, as incubators of the pandemic.

    The key here may be what demographer Wendell Cox has described as “exposure density.” Compared with Angelenos, Cox suggests, New Yorkers tend to work in large, crowded workplaces and are far more mass-transit-dependent. On an average workday, more than 5 million people jostle onto the city’s subway trains – nearly 40 times as many as ride LA’s subway lines and 15 times as many when the lower-capacity light rail lines are added in. The rates of infection and death are far lower in the surrounding areas – even in more dispersed, car-dependent Orange, Riverside, and San Bernardino Counties.

    Even San Francisco, the nation’s second-densest municipality, with more than 500,000 residents, has been far more successful in controlling the virus’s spread. The city is somewhat less car-centric than greater Los Angeles; and the Bay Area transit commuting rate is about 60 percent lower than that of New York (combined statistical areas, or CSA). San Francisco has a vehicle ownership rate at least 85% higher than in the four most dense New York boroughs (Manhattan, Brooklyn, the Bronx, and Queens) and is a much smaller city; San Franciscans are far more able to cab, Uber, or drive their own vehicles, avoiding crowded public transit.

    Clearly, some ways to reduce exposure, as well as GHG emissions, would embrace telecommuting, which had been expanding and seems certain to grow in the future. But California, unlike other states, has no interest in adopting telecommuting as a key strategy; instead, it seems eager to embrace the viral formula of New York, which is driving a new exodus from the country’s premier urban center.

    They continue to push their transit and density strategy despite concerns about social distancing and a profound resistance from hoi polloi. As in many areas, the greens have no real interest in actual data: despite state climate policies designed to push people onto buses and trains, transit ridership has lagged—in Los Angeles, it is lower than in 1985—and virtually all population growth has taken place on the periphery of large metropolitan agglomerations.

    California’s problems won’t end with this pandemic.

    Under the leadership of politicians like Newsom and Steyer, however promising the future is for the tech oligarchs and green energy speculators, the Golden State seems determined to offer ever less opportunity for the state’s already struggling middle- and working-class families—except, perhaps, to get sicker when the next pandemic comes along.


    Tyler Durden

    Tue, 04/28/2020 – 22:45

  • Study Finds 'Historic' Drop In Math, Reading Scores Since Adoption Of Common Core
    Study Finds ‘Historic’ Drop In Math, Reading Scores Since Adoption Of Common Core

    Reading and math scores in the US have suffered ‘historic’ declines since most states implemented the Common Core curriculum standard six years ago, according to a new study from the Pioneer Institute.

    While Common Core was promoted as improving the international competitiveness of U.S. students in math, our international standing has remained low while the skills of average and lower performing American students have dropped in both math and reading. –Pioneer Institute

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    The study notes that in the years leading up to common core, fourth and eight-grade reading and math scores on the National Assessment of Educational Progress (NAEP) were rising gradually (2003-2013). After Common Core was implemented, scores for both grades have fallen – with eighth grade falling nearly as fast as it had been rising.

    The declines were most severe among the lowest-achieving students, which the Pioneer Institute suggests increases inequality.

    Scores for students at the 90th percentile have mostly continued their pre-Common Core trend of gradual improvement. But the farther behind students were, the more substantial the declines, with the biggest drops occurring for those at the 25th and 10th percentiles. –Pioneer Institute

    So, Common Core requires more diligence and effort?

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    “The sustained decline we’re now seeing, especially among our most vulnerable students, simply cannot be allowed to continue,” said Theodor Rebarber, author of “The Common Core Debacle.”

    According to the Pioneer Institute, Common Core is the product of ‘misguided progressive pedagogies and biases of the education establishment that developed it.’

    “Several of us allied with Pioneer Institute have been pointing out, ever since it was introduced, the deeply flawed educational assumptions that permeate the Common Core and the many ways in which it is at odds with curriculum standards in top-achieving countries,” said the institute in a statement.

    According to the report lower scores as a result of Common Core were predicted a decade ago.

    “Nearly a decade after states adopted Common Core, the empirical evidence makes it clear that these national standards have yielded underwhelming results for students,” said Pioneer Executive Director Jim Stergios. “The proponents of this expensive, legally questionable policy initiative have much to answer for”

    “It’s time for federal law to change to allow states as well as local school districts to try a broader range of approaches to reform,” Rebarber added. “With a more bottom-up approach, more school systems will have the opportunity to choose curricula consistent with our international competitors and many decades of research on effective classroom teaching”


    Tyler Durden

    Tue, 04/28/2020 – 22:25

  • Good News America – Old (Spending) Habits Die Hard
    Good News America – Old (Spending) Habits Die Hard

    Via DataTrekResearch.com,

    “Everything’s going to be different” is a pretty popular phrase these days. Implicit in that idea, at least in part, is the notion that our day-to-day habits are changing as we work from home, shop more online, Zoom call with colleagues and friends, and order delivery rather than going to restaurants. New normals with new habits have replaced our old routines.

    But exactly how long does it actually take for freshly acquired behaviors to really settle in? With capital markets volatility on the wane and a healthy rally today we will spare a few moments to consider the science behind habitualization.

    Our starting point: a plastic surgeon named Maxwell Maltz who trained in post-World War I Europe and had a successful practice in 1950s New York. In 1960 he published a book called “Psycho-Cybernetics: A New Way of Getting More Out of Life”. In that work he stated that, by his reckoning, it took about 21 days for most patients to get used to their new faces after surgery. And because the book was a best seller and inspired the likes of Tony Robbins and others, the idea that “21 days makes a new habit” is a popular one to this day.

    Since most Americans/Europeans have been in some form of lockdown for 3-5 weeks (we’re on Week 6 here in NYC), the 21-day rule says we should be at least somewhat habitualized to a whole range of new behaviors. Yes, once things loosen up we’ll reassemble whatever parts of our old life that can be safely recovered. But we’ll have gotten used to many new activities as well.

    Now, if you’re skeptical of the “21 days to a better life” rule, you actually have some good science on your side. The most widely cited academic paper on the topic (+1,200 citations) is titled “How are habits formed: modelling habit formation in the real world” (Lally, Jaarsveld, Potts and Wardle, 2009). Here’s the structure of the research and what it found:

    • 96 students at University College London agreed to take part in a study which asked them to pick a new healthy habit to incorporate into their daily lives. Examples: eating a piece of fruit with lunch or exercising daily.
    • Subjects kept a log for 84 days, measuring whether they had performed the new habit the prior day and how automatic it was to do so.
    • Finding #1: progress towards making a new behavior a habit is not linear. At first, you really have to force yourself to do it. It is far from natural and requires real discipline to get past the initial inertia.
    • Finding #2: it takes and average of 66 days to make a new habit essentially “automatic” and among the subjects of the study the range was anywhere from 18 to +84 days.

    The bottom line is that new habits take more like 66 days rather than 21, which is basically the difference between consumer behaviors changing dramatically and durably post-COVID versus only when required for safety reasons. Expanding on this point:

    • Emotion and fear can certainly alter behavior faster and more permanently. In New York City, I have personally witnessed loud arguments among my neighbors over mask wearing and social distancing. That’s because people have a wide array of risk tolerances and those dictate the speed/depth of new habit acquisition.
    • As US states and countries around the world reopen, we may not see dramatically new consumer behaviors versus pre-COVID life. The study we cited above showed how long it takes to develop just ONE new habit; not a whole slew of them.
    • The intersection of these 2 ideas: as long as businesses can assuage consumer fear with sensible precautions, they should be able to rely on the fact that consumers have not actually formed many new habits.

    Final thought: all this is comforting but we’d be remiss if we did not consider the current economic reality of 15-20% unemployment. There will be many people who want to return to their January 2020 habits but are unable to do so. The good news is that consumers with discretionary spending power should return to their old habits as much as they can. As they do, the US economy should be able to find its footing and rehire many of those recently furloughed, laid off or separated.

    In short, it is a very good thing indeed that old habits die hard and new ones are so difficult to develop.


    Tyler Durden

    Tue, 04/28/2020 – 22:05

  • Meet 'Salus' – The Pentagon's New COVID-Hotspot, Panic-Buying Predicting AI
    Meet ‘Salus’ – The Pentagon’s New COVID-Hotspot, Panic-Buying Predicting AI

    A new predictive technology developed by the Pentagon can anticipate product shortages could help military personnel move supplies to retailers or hospitals with geographical precision before a shortage develops during a public health crisis. 

    The Joint Artificial Intelligence Center (JAIC) developed the new prototype artificial intelligence tool that predicts and addresses shortages of food, water, medicine, and other essential goods in a geographical region during crisis times. “You have to be looking a little in the future,” said Nand Mulchandani, chief technical officer at the JAIC, who recently spoke with Defense One. 

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    Called Salus, the new tool combines data from the Census Bureau, Medicare, hospitals, and can forecast community spreading of a virus in a geographical region, as well as pulling data from retailers and warehouses of product inventories, and develop a predictive model of where shortages could potentially be seen, right down to specific zip codes or even stores. 

    The military is working toward a “common view and a predictive capability to truly understand where the next problem sets are going to be and bringing to bear all of the logistical capability,” said Mulchandani, who spoke with Roll Call in early April. 

    The new tool has already been field test with communication systems of Northern Command and National Guard, which are both supporting FEMA’s efforts in combating the coronavirus spread. 

    Mulchandani told Defense One that the AI tool is flexible in determining different types of problems that could occur by altering the data that is piped in. 

    He said Salus was first tested by determining and developing a model of where shortages of ventilators, masks, and other medical supplies could be seen. 

    “The next question really was resource allocation like food,” he said

    It’s a given that JAIC is working on a predictive model to determine where food shortages could develop because our reporting over the last month suggests shortages could start in May.

    The tool gives the Pentagon and the government the ease of mind that during a public health emergency, supply disruptions could be addressed quickly and even preemptively. All in the effort to contain or completely mitigate the consequences of what disruptions can trigger, such as social unrest. 

    Is this the rise of Skynet? 


    Tyler Durden

    Tue, 04/28/2020 – 21:45

  • Watch: Pentagon Releases US Navy Footage Of UFOs, Confirms The Videos Are "Real"
    Watch: Pentagon Releases US Navy Footage Of UFOs, Confirms The Videos Are “Real”

    Via SaraACarter.com,

    The Department of Defense released Monday three unclassified videos showing the U.S. Navy’s encounters with “unidentified aerial phenomena” in an attempt to “clear up any misconceptions” regarding whether the videos – which have been circulating for years – are real. 

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    As AP reports, the three videos, the first of which was leaked in 2007 and discovered by the U.S. Navy in 2009, show small, flying objects.

    Two of the videos were recorded in January 2015, according to the Department of Defense. The other was taken in November 2004.

    In a statement, the Defense Department said the Navy “previously acknowledged” the videos were Navy videos.

    “The U.S. Navy previously acknowledged that these videos circulating in the public domain were indeed Navy videos. After a thorough review, the department has determined that the authorized release of these unclassified videos does not reveal any sensitive capabilities or systems, and does not impinge on any subsequent investigations of military air space incursions by unidentified aerial phenomena,” DOD said in a statement.

    In one of the videos, a person exclaims, “What the (expletive) is that?!”

    “The aerial phenomena observed in the videos remain characterized as ‘unidentified,'” the DOD said in Monday’s statement.. 


    Tyler Durden

    Tue, 04/28/2020 – 21:25

  • Mnuchin Says Dead People Aren't Eligible For Stimulus Checks
    Mnuchin Says Dead People Aren’t Eligible For Stimulus Checks

    Two weeks ago we reported that in the rush to flood the population with plastic trinkets (i.e., $1,200 checks) just so the natives don’t get restless and realize that while they are getting scraps corporations, hedge funds, banks and PE firms are again getting billions, the Treasury has mistakenly mailed checks to deceased people.

    As Republican Congressman from Kentucky Thomas Massie — who one recalls was a ‘lone voice in the wilderness’ seeking to torpedo the multi-trillion bailout bill as it added to the national debt and increased Federal Reserve secrecy and power, among other things — ranted on Twitter two weeks ago just as some 80 million Americans received their direct deposits: “Ok this is insane, but just the tip of the iceberg.”

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    It now appears the Treasury Secretary agrees: on Wednesday Steven Mnuchin confirmed – just in case there is any confusion – that dead people aren’t eligible for the $1,200 stimulus payments some of them have been getting, and that their relatives and estates should pay the money back to the government.

    “You’re not supposed to keep that payment,” Mnuchin told the WSJ in an interview. “We’re checking the databases, but there could be a scenario where we missed something, and yes, the heirs should be returning that money.”

    Yes, you certainly missed something: since the payment is based on those past tax returns, some people who died in 2018 or 2019 have received money, either by direct deposit or by mail (their survivors haven’t been sure about what to do with it). The CDC estimated that just over 2.8 million Americans died in 2017 (the last year data is currently available) – which suggests the possibility that all totaled almost $3.4 billion in stimulus money could have gone to dead people (assuming each got a check for $1,200 and that their family estates filed taxes).

    Technically, the payment is a new tax credit for tax year 2020 of $1,200 per adult and $500 per child, and the payments now are based on 2018 or 2019 tax filings. That said, it isn’t clear how many payments the Treasury Department has sent to dead people or what efforts the IRS will take to claw back any payments it deems erroneous.

    The economic-relief law passed by Congress – the first of many as the US transitions to a Universal Basic Income society, i.e., free money for everyone – created a $292 billion program of payments to Americans to cushion the economic blow from the coronavirus outbreak. Already, the government has made more than 89 million payments totaling over $160 billion, with another wave hitting bank accounts and mailboxes this week. Tax experts have been puzzling over the payments to dead people since they started appearing in bank accounts earlier this month.

    “My [dead] husband was a wonderful money manager, and I think he would be happy to know he was still getting a stimulus payment,” said Heather Frazier of Wilmington, N.C., who received a $1,200 direct-deposit payment for her husband, Rob, who died in June 2018. “If they want the money back or whatever, I’ll pay it back.”

    As the Journal explains, other parts of the law contemplate a situation in which someone gets a payment now that’s larger than what they would ultimately be able to claim on their 2020 tax return. That can happen if the person’s income goes up into the range where the benefit is reduced. In those cases, the government won’t reclaim any of the money. But the dead are different because they would have been ineligible for any money to start with.

    Mnuchin didn’t differentiate between people who died in 2018 and 2019 and those who passed away or will die in 2020. People who die this year still may have a tax-filing obligation for 2020, so a case could be made that they are eligible even if those who died before this year weren’t. One hopes that doesn’t also mean that one has to file their taxes even if one is dead.

    The IRS has yet to offer written guidance to taxpayers on this issue. In practice it may prove difficult for the government to get the money back. It may be easier for some paper checks; the envelope for some payments includes a box to check and return if the recipient is deceased.

    On April president Trump said that the U.S. would get the money back: “Everything we’re going to get back. But it’s a tiny amount.”


    Tyler Durden

    Tue, 04/28/2020 – 21:05

  • Trump Invokes Defense Production Act: Who Will Be Forced To Work At Meat Plants?
    Trump Invokes Defense Production Act: Who Will Be Forced To Work At Meat Plants?

    Submitted by Daisy Luther of The Organic Prepper

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    Over the past few weeks, nearly a dozen large meat processing plants have closed their doors due to widespread coronavirus among employees. Thousands of workers have become infected and at the time of publication, at least 20 have died. As a result, President Trump has invoked the Defense Production Act and just signed an executive order keeping meat processing plants open during the coronavirus outbreak.

    What is the Defense Production Act?

    The act, which was officially passed in the 1950s, give the government power over private industries.

    The Act gives the federal government broad authority to direct private companies to meet the needs of the national defense.

    Over the decades, the law’s powers have been understood to encompass not only times of war but also domestic emergency preparedness and recovery from terrorist attacks and natural disasters.

    The act authorizes the president to require companies to prioritize government contracts and orders seen as necessary for the national defense, with the goal of ensuring that the private sector is producing enough goods needed to meet a war effort or other national emergency.

    It also authorizes the president to use loans, direct purchases and other incentives to boost the production of critical goods and essential materials.

    Other provisions authorize the federal government to establish voluntary agreements with private industry and to block foreign mergers and acquisitions seen as harmful to national security. (source)

    Reports say that President Trump, who refers to himself as a wartime president, is invoking the act over deep concerns about our supply chain.

    What does this mean?

    According to Bloomberg, the President will order the facilities will remain open due to a quickly evolving breakdown of our food supply chain.

    President Donald Trump plans to order meat-processing plants to remain open as the nation confronts growing food-supply disruptions from the coronavirus outbreak, a person familiar with the matter said.

    Trump plans to use the Defense Production Act to order the companies to stay open as critical infrastructure, and the government will provide additional protective gear for employees as well as guidance, according to the person. (source)

    This is the spirit of how the Act was designed to be used. President Truman signed it into law over concerns about supplies and equipment during the Korean war and it has subsequently been used during disasters like hurricanes and other wars. Presidents Clinton and Bush both used it to supply California utilities during an energy crisis there. It was also used in early April to compel 3M to make N95 respirators.  So its use is not unprecedented.

    Unions are not pleased about this order.

    Trump’s order sets the stage for a showdown between industry giants and labor unions.

    Trump signaled the executive action at the White House on Tuesday, saying he planned to sign an order aimed at Tyson Foods Inc.’s liability, which had become “a road block” for the company. He didn’t elaborate.

    The order, though, will not be limited to Tyson, the person said. It will affect many processing plants supplying beef, chicken, eggs and pork…

    …The White House decided to make the move amid estimates that as much as 80% of U.S. meat production capacity could shut down. (source)

    Union representatives are concerned about the lack “meaningful safety requirements” for workers who will be compelled to return to plants that have been shut down due to the spread of COVID-19.

    “We only wish that this administration cared as much about the lives of working people as it does about meat, pork and poultry products,” said Stuart Appelbaum, President of the Retail, Wholesale and Department Store Union. (source)

    The White House source said that safety measures were being considered.

    The White House has been discussing the order with meatpacking executives to determine what they need to operate safely and stay open, in order to prevent shortages, the person said.

    White House General Counsel Pat Cipollone worked with private companies to design a federal mandate to keep the plants open and to provide them additional virus testing capacity as well as protective gear. (source)

    Who will be manning the factories?

    So, the question is, will workers return voluntarily to a job that Union representatives tell them is unsafe? Will these workers be mandated to return under the Defense Production Act even though many have become ill working during the pandemic?

    The United Food and Commercial Workers International Union, which represents 1.3 million food and retail workers, said Tuesday that 20 U.S. food-processing and meatpacking union workers in the U.S. have died and that an estimated 6,500 are sick or have been exposed to the virus while working near someone who tested positive.

    COVID-19, the disease caused by the virus, has infected hundreds of workers at meat-processing plants and forced some of the largest to close and others to slow production. While the output at beef and poultry plants has diminished, pork plants in the Midwest have been hit especially hard. The viral outbreaks have persisted despite efforts by the meat companies to keep workers at home with pay if they become sick. (source)

    Obviously, people have to be present to keep the plants running. What happens if current employees and union members refuse to return to the plants? Will people who have been cleared as immune by the much-touted but elusive antibody tests be pressed to work there?

    It’s clear we’re currently living through a time during which unusual things are happening and our constitutional rights no longer seem as solid as they once did. So, if the plants are mandated to be open, this leaves some pretty big questions.

    Will people return to work voluntarily? Or will we see civilians facing forced labor right here on American soil?


    Tyler Durden

    Tue, 04/28/2020 – 20:45

  • 'Infodemic': Seoul Takes Aim At CNN "Fake News" Report About Kim Jong Un's Failed Heart Surgery 
    ‘Infodemic’: Seoul Takes Aim At CNN “Fake News” Report About Kim Jong Un’s Failed Heart Surgery 

    Last week’s avalanche of headlines regarding Kim Jong Un’s ‘disappearance’ and possible death triggered initially by a report in Seoul-based outlet Daily NK, but then amplified by a CNN suggesting the North Korean leader is in “grave danger” following heart surgery, has been addressed in candid terms with fresh statements of South Korea’s Unification Minister Kim Yeon-chul.

    He rejected the unconfirmed reports as “fake news” and an “infodemic,” insisting that South Korean intelligence is “confident” that there are no unusual signs regarding Kim Jong Un’s health, according to the South’s state-run Yonhap news agency.

    “It is true that he had never missed the anniversary for Kim Il Sung’s birthday since he took power, but many anniversary events including celebrations and a banquet had been canceled because of coronavirus concerns,” Kim Yeon-chul said during a parliament session.

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    AP photo

    He described that Pyongyang appears to be exercising extreme caution related to the coronavirus pandemic, canceling Kim’s appearance at all public commemorations; however, North Korean media continues to report on near daily official messages sent from the leader to workers, the military, and other sectors.

    “It can be seen as a phenomenon of infodemic,” Minister Kim added in reference to the deluge of rumors surrounding the NK leader’s health. “We have intelligence capacity that allows us to say confidently that there are no unusual signs.”

    In a rare moment, the top South Korean minister took direct aim at CNN, saying, “I know that the CNN report is based on the Daily NK report, which said that (Kim) received surgery at the Hyangsan Medical Center.”

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    ROK Unification Minister Kim Yeon-chul, via AFP.

    “That cannot make sense logically. … The Hyangsan Medical Center is like a clinic, a facility incapable of performing surgery or medical procedures,” he explained.

    Speaking during the same parliamentary assembly, Foreign Minister Kang Kyung-wha also sought to quash the pervasive reports: “Despite a series of recent media reports, no unusual signs have been detected inside North Korea,” she asserted.

    As we described in our own initial reporting on the matter last week: First, it should be noted that the Western mainstream press often gets North Korea completely wrong — and in the case of the latest speculation a high degree of critical skepticism is warranted further given the initial source for the heart surgery claims was a US state-funded media outlet based in South Korea, the Daily NK website.

    This is appearing to be the case once again.


    Tyler Durden

    Tue, 04/28/2020 – 20:25

  • Chinagate Is The New Russiagate… And Is Far More Dangerous
    Chinagate Is The New Russiagate… And Is Far More Dangerous

    Authored by Mike Krieger via Liberty Blitzkrieg blog,

    I’ve become convinced the next major event that’ll be used to further centralize power and escalate domestic authoritarianism will center around U.S.-China tensions. We haven’t witnessed this “event” yet, but there’s a good chance it’ll occur within the next year or two. Currently, the front runner appears to be a major aggressive move by China into Hong Kong, but it could be anything really. Taiwan, the South China Sea, currency, economic or cyber warfare; the flash points are numerous and growing by the day. Something is going to snap and when it does we better be prepared to not act like mindless imbeciles for the fourth time this century.

    When that day arrives, and it’s likely not too far off, certain factions will try to sell you on the monstrous idea that we must become more like China to defeat China. We’ll be told we need more centralization, more authoritarianism, and less freedom and civil liberties or China will win. Such talk is nonsense and the wise way to respond is to reject the worst aspects of the Chinese system and head the other way.

    – From my 2019 piece: Two Paths Forward with China – The Good and The Bad

    As the clownish farce that is Russiagate slinks back into the psyop dumpster from which it emerged, an even more destructive narrative has metastasized following the U.S. government’s incompetent response to covid-19.

    It was clear to me from the start that Russiagate was a nonsensical narrative wildly embraced by a variety of powerful people in the wake of Trump’s election merely to serve their own ends. For establishment Democrats, it was a way to pretend Hillary Clinton didn’t actually lose because she was a wretched status quo candidate with a destructive track record, but she lost due to “foreign meddling.” This allowed those involved in her campaign to deflect blame, but it also short-circuited any discussion of the merits of populism and widespread voter dissatisfaction (within both parties) percolating throughout the land. It was a fairytale invented by people intentionally putting their heads in the sand in order to avoid confrontation with political reality and to keep their cushy gravy-train of entrenched corruption going.

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    Russiagate was likewise embraced by the national security state (imperial apparatus) for similar reasons. Like establishment Democrats, the national security state also wanted to prevent the narrative that the status quo was rejected in the 2016 election from spreading. It was incentivized to pretend Hillary’s loss was the result of gullible Americans being duped by crafty Russians in order to manufacture the idea that U.S. society was healthy and normal if not for some external enemy.

    Another primary driver for the national security state was to punish Russia for acting like a sovereign state as opposed to a colony of U.S. empire in recent years. Russia has been an increasingly serious thorn in the side of unipolarism advocates over the past decade by performing acts such as buying gold, providing safe harbor for Edward Snowden, and thwarting the dreams of regime change in Syria. Such acts could not go unpunished.

    So Russiagate served its purpose. It wasted our time for much of Trump’s first term and it helped prevent Bernie Sanders from winning the Democratic nomination. Now we get Chinagate.

    When the premier empire on the planet starts blaming external enemies for its internal problems, you know it’s almost always an excuse to let your own elites off the hook and further erode civil liberties. While it appears the novel coronavirus covid-19 did in fact come from China, and China tried to discourage other countries from taking decisive action in the early days, our internal political actors blaming China for their own lack of preparation and timely reaction is patently ridiculous.

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    If Stacy and myself were able to see the situation clearly and respond early, why couldn’t our government? This isn’t rocket science. The Chinese were acting as if the world had ended in cities across the country and we’re supposed to believe U.S. leaders simply listened to what the CCP was saying as opposed to what they were doing? How does that make any sense?

    It makes even less sense considering the Trump administration has been in an explicit cold war with China for almost two years. This concept that the American national security state just took China’s word for what was going on in the early days is preposterous. So what’s going on here? Similar to Russiagate, the increased focus on directing our ten minutes of hate at the Chinese provides cover for the elites, but Chinagate is far more dangerous because the narrative will prove far more convincing for many Americans.

    Although Russiagate was rapidly embraced by people with severe Trump Derangement Syndrome, most people just didn’t buy into it or care. Only the most dimwitted amongst us actually believed the Russians were responsible for our major problems at home, but when it comes to China the argument can be far more persuasive because many aspects of the economic relationship between the U.S. and China are in fact problematic. Specifically, the U.S. transformed itself from a nation of producers and builders into a nation of debt-driven consumption slaves over the past five decades. While China played a key role in this process, it wasn’t the driver.

    Did China force the U.S. to abandon gold convertibility in 1971, thus beginning the transition from an industrial empire into a financial one? Did China convince us to repeal Glass-Steagall, or lie about WMD in Iraq? Did China put a gun to our manufacturing executives’ heads and force them to offshore manufacturing, or did the executives do that with greed filled eyes while earning billions upon billions from labor arbitrage? China may have directly benefited from five decades of avarice-driven policy crimes committed by American “elites,” but they didn’t cause them. They are entirely homegrown.

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    Chinagate is far more dangerous than Russiagate because very serious fundamental problems within the U.S.-China economic relationship do exist. I don’t deny this, and I’m in favor of actual policies that would incentivize the American people to become producers and builders as opposed to castrated debt zombies. The problem is many of the people ratcheting up the volume on the evils of China (I don’t deny the abundance of evil) aren’t interested in bringing liberty and production back to America. Rather, they’re trying to take away more of your freedoms, economically and politically.

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    The same people who’ve been in charge of the country for the entire 21st century remain in charge. Presidential politics is pure theater in an empire. Think about it, the same people who brought you endless war, the surveillance panopticon and perpetual Wall Street crime and bailouts are supposed to take on China? The same China that made so many of them fabulously wealthy? Give me a fucking break.

    The elitist agenda isn’t to use anger at China to bring freedom and production to our shores, but to use heightened emotional fear to tighten their domestic power grip. The idea is to use Chinese authoritarianism as a model for the U.S.

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    Unsurprisingly, the usual suspects are already coming out of their snake holes to advocate for exactly that. We saw this a few days ago when Harvard Law Professor and former George W. Bush administration lawyer, Jack Goldsmith, explicitly called for Chinese-like censorship of speech on the internet.

    In the great debate of the past two decades about freedom versus control of the network, China was largely right and the United States was largely wrong. Significant monitoring and speech control are inevitable components of a mature and flourishing internet, and governments must play a large role in these practices to ensure that the internet is compatible with a society’s norms and values.

    By all means advocate for a reshuffling of the relationship between the U.S. and China that will lead to more freedom, resilience and economic vitality at home and I’ll support it, but don’t tell me we need to become China in order to defeat China. If we’re dumb enough to fall for that, we’ll get exactly what we deserve. Good and hard.

    *  *  *

    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

    Tue, 04/28/2020 – 20:05

  • Survey Finds 50 Million Americans Have Lost Their Job In Past 6 Weeks
    Survey Finds 50 Million Americans Have Lost Their Job In Past 6 Weeks

    When Thursday’s initial claims report is published at 830am on Thursday, the Dept of Labor will confirm that the current depression is unlike any seen before, with approximately 30 million Americans losing their jobs in the past 6 weeks alone. That, however, may be underestimating the full number of Americans who have lost their jobs by as much as 50%.

    According to an online poll by the left-wing Economic Policy Institute, millions of Americans who have been thrown out of work during the coronavirus pandemic have been unable to register for unemployment benefits. The poll found that for every 10 people who have successfully filed unemployment claims, three or four people have been unable to register and another two people have not tried to apply at a time of acute economic crisis.

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    Official statistics show that 26.5 million people have applied for unemployment benefits since mid-March, wiping out all of the jobs gained during the longest employment boom in U.S. history, and another 3.5 million initial claims are expected to be filed this week.

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    However, EPI’s survey indicates that an additional 8.9 million to 13.9 million people have been shut out of the system, said Ben Zipperer, the study’s lead author, which means that as of this week, just shy of 50 million American have lost their job since the start of March. “This study validates the anecdotes and news reports we’re seeing about people having trouble filing for benefits they need and deserve,” Zipperer said.

    Among the reasons why idled workers have been unable to get in the “pipeline”, they claim they have encountered downed websites and clogged phone lines, as the state governments that administer the program have been overwhelmed by applicants.

    “It’s a shame how you work for so many years and then when you need it, you can’t get it,” said Jim Hewes, 48, who said he was unable to file a claim online for more than two weeks after he was furloughed from his job at an Orlando, Florida, second-hand store in March. Hewes said he mailed off a paper application on April 9 but had not heard back from the state.

    “It’s almost set up to fail. It was made complicated so people would get discouraged and give up.”

    EPI surveyed 24,607 adult internet users using Google Surveys between April 13 and April 24. The poll has a confidence interval, an indicator of accuracy, of plus or minus 1%. 9.4% of poll respondents said they had successfully applied for unemployment benefits, while 3.4% said they tried but could not get through. A further 1.9% said they did not apply because the process was too difficult.

    * * *

    Among the reasons for the continuing technical challenges listed by Reuters, is that states like New Jersey and Georgia have struggled to find staffers who know how to update computer systems that run on decades-old technology. Others that have moved to newer technology have also encountered technical woes. States have also had to incorporate enhanced federal benefits that provide an extra $600 per week and extend coverage to Uber drivers and other independent contractors.

    On top of that, many states entered the crisis with fewer workers to handle unemployment claims as an improving economy had allowed them to cut staff.

    States had the equivalent of 26,360 full-time workers in their unemployment offices in the 2018 fiscal year, according to the U.S. Labor Department, down 30% from staffing levels during the peak of the Great Recession in 2009 and 2010. Many Americans who managed to file claims have yet to receive payments weeks after they lost their jobs.

    Labor Department statistics show that 71% who apply are getting payments, although that figure varies significantly by state. Florida, for example, said on Saturday it had sent payments to roughly one in five of those who had successfully submitted claims. Among those waiting are Rachel Alvarez, 44, who says she now hides snacks in her bedroom so her three children cannot eat them too quickly. The former restaurant server in Naples, Florida, says she has run through her savings since she was laid off on March 25.

    “I have nothing,” she said. “As much as I don’t want my kids to see me stress out, each one has seen me cry.”


    Tyler Durden

    Tue, 04/28/2020 – 19:45

  • Trump Could Use "Nuclear Option" To Make Saudi Arabia Pay For Oil War
    Trump Could Use “Nuclear Option” To Make Saudi Arabia Pay For Oil War

    Authored by Simon Watkins via OilPrice.com,

    President Donald Trump is considering all options available to him to make the Saudis pay for the oil price war as the crash that followed has done significant damage to the U.S. oil industry.

    With last month having seen the indignity of the principal U.S. oil benchmark, West Texas Intermediate (WTI), having fallen into negative pricing territory, U.S. President Donald Trump is considering all options available to him to make the Saudis pay for the oil price war that it started, according to senior figures close to the Presidential Administration spoken to by OilPrice.com last week. It is not just the likelihood that exactly the same price action will occur to each front-month WTI futures contract just before expiry until major new oil production cuts come from OPEC+ that incenses the U.S. nor the economic damage that is being done to its shale oil sector but also it is the fact that Saudi is widely seen in Washington as having betrayed the long-standing relationship between the two countries. Right now, many senior members on Trump’s closest advisory circle want the Saudis to pay for its actions, in every way, OilPrice.com understands.

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    This relationship was established in 1945 between the U.S. President Franklin D. Roosevelt and the Saudi King at the time, Abdulaziz, on board the U.S. Navy cruiser Quincy in the Great Bitter Lake segment of the Suez Canal and has defined the relationship between the two countries ever since. As analysed in depth in my new book on the global oil markets, the deal that was struck between the two men at that time was that the U.S. would receive all of the oil supplies it needed for as long as Saudi Arabia had oil in place, in return for which the U.S. would guarantee the security of the ruling House of Saud. The deal has altered slightly since the rise of the U.S. shale oil industry and Saudi Arabia’s attempt to destroy it from 2014 to 2016 in that the U.S. also expects the House of Saud to ensure that Saudi Arabia not only supplies the U.S. with whatever oil it needs for as long as it can but also that it also allows the U.S. shale industry to continue to function and to grow.

    For the U.S., if this means that Saudi Arabia loses out to U.S. shale producers by keeping oil prices up but losing out on export opportunities to U.S. firms then that is just the price that the House of Saud must pay for the continued protection of the U.S. – politically, economically, and militarily. As U.S. President Donald Trump has made clear whenever he has sensed a lack of understanding on the part of Saudi Arabia for the huge benefit that the U.S. is doing the ruling family:

    “He [Saudi King Salman] would not last in power for two weeks without the backing of the U.S. military.”

    Trump has a very good point, as it is fair to say that without U.S. protection, either Israel or Iran and its proxy operatives and supporters would very soon indeed end the rule of the House of Saud.

    Aside from just withdrawing all such support from the Saud family right now, there are other options available to the U.S. as interim measures, although some are more practical than others. Early in the oil price war, Trump stated that “I will do whatever I have to do… to protect… tens of thousands of energy workers and our great companies,” and added that plans to impose tariffs on Saudi Arabia’s oil exports into the U.S. were “certainly a tool in the toolbox.”

    From a practical volumes perspective, putting tariffs on Saudi oil rather than Russian oil would make sense from three key perspectives.

    First, the U.S. imports around 95 per cent more oil from Saudi than it does from Russia, so sanctioning Russian oil would have little effect on the U.S.’s supply glut that is overhanging its already-stretched domestic storage facilities.

    Second, Russia is in much better economic shape than Saudi to handle any shocks to its oil-related streams of revenue, with a budget breakeven oil price of US$40 per barrel of Brent rather than Saudi’s US$84 per barrel point.

    Third, there is also the fact that Saudi currently provides one of the few large-scale sources of sour crude (including the benchmark Arab Heavy) that is available to the U.S., which is essential to its production of diesel, and to which purpose WTI is less suited. Certainly much of the U.S.’s Gulf Coast refinery system is geared towards using sourer crude, having invested heavily in coking systems and other infrastructure to better handle heavier crudes from the Middle East in recent decades. The other major historical sources of this for the U.S. are not in a position to fill the gap, with U.S. sanctions still imposed on oil imports from Venezuela, Mexican flows unreliable, and Canada’s pipeline capacity to the U.S. not able to handle any more more exports south until the long-delayed Keystone pipeline is up and running at some point in 2023.

    In a U.S. presidential election year, the last thing that a U.S. president wants is increasing diesel prices or shortages making a coronavirus-hit economy even worse. It is a fact that since the end of the First World War, the sitting U.S. president has won re-election 11 times out of 11 if the U.S. economy was not in recession within two calendar years ahead of an election whilst presidents who went into a re-election campaign with the economy in recession over the same time-frame won only once out of seven.

    This said, it may be that Trump will use the threat of such tariffs on Saudi Arabia, as his mercurial reputation may work to convince the Saudis that he is unpredictable enough to impose such taxes, regardless of the short-term economic consequences. Even as it stands, he needs to do something as around 44 million barrels of Saudi crude are expected to reach the U.S. over the next four weeks, according to oil industry and shipping data. This is around four times the most recent four-week average, according to EIA records, and it is mostly due to be delivered to the already overwhelmed Cushing delivery point. Republican Senator Kevin Cramer of North Dakota, who has advised Trump on energy issues, has been calling on the White House to take action to stop the very large crude carriers from unloading, and several senators and congressmen have threatened to vote to withhold military aid to Saudi Arabia. Trump, for his part, has so far only said that he will “look at it,” referring to stopping these new imports.

    Given the burgeoning ill-feeling towards the Saudis amongst the U.S.’s two legislative houses – from an already high base – sources in the Presidential Administration say that a forceful, but private, reiteration of the threat of the ‘No Oil Producing and Exporting Cartels Act’ (NOPEC) Bill direct to King Salman, circumventing his son Crown Prince Mohammed bin Salman, might do the trick in convincing the Saudis to dramatically increase the contextually paltry output cut last agreed with the Russians. As highlighted by OilPrice.com, the pressure for Trump to finally sign off the NOPEC Bill has been growing from the second that the Saudis began the latest oil price war.

    Specifically, the NOPEC Bill would make it illegal to artificially cap oil (and gas) production or to set prices, as OPEC, 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 each and every one of its individual member states. This would leave Saudi Arabia open to being sued under existing U.S. anti-trust legislation, with its total liability being its estimated US$1 trillion of investments in the U.S. alone. The U.S. would then be legally entitled to freeze all Saudi bank accounts in the U.S., seize its assets in the country, and halt all use of U.S. dollars by the Saudis anywhere in the world (oil, of course, to begin with, is denominated in U.S. dollars). It would also allow the U.S. to go after Saudi Aramco and its assets and funds, as it is still a majority state-owned production and trading vehicle, and would mean that Aramco could be ordered to break itself up into smaller, constituent companies that are not deemed to break competition rules in the oil, gas, and petrochemicals sectors or to influence the oil price.

    The Bill came very close indeed to being passed into law when in February of last year, the House Judiciary Committee passed the NOPEC Act, which cleared the way for a vote on the Bill before the full House of Representatives. On the same day, Democrats Patrick Leahy and Amy Klobuchar and – most remarkably – two Republicans, Chuck Grassley and Mike Lee, introduced the NOPEC Bill to the Senate. Its progress was only halted after President Trump stepped in and vetoed it when the Saudis did what he told them to do (at that point, to produce more to keep oil prices under US$70 per barrel of Brent), but the option is still available for a relatively quick turnaround on turning it into law.


    Tyler Durden

    Tue, 04/28/2020 – 19:25

  • Has The Recovery Started Already? What Real-TIme Coronavirus Activity Trackers Are Showing
    Has The Recovery Started Already? What Real-TIme Coronavirus Activity Trackers Are Showing

    There was some good news in the latest coronavirus activity tracker from Goldman: signs of life amid an unprecedented collapse in aggregate demand.

    As the following chart tracking daily consumer prices shows, after cratering by as much as 50% into the middle of April, consumer prices have rebounded in the past week to -31%, which while still clearly ugly, indicates that some demand is coming back (in this case rising airfare prices).

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    That said, other real-time activity trackers are showing the opposite, namely a downward inflection point such as for example the recent decline in China Industrial Activity which has backtracked in the past two weeks, while the US Industrial Activity Tracker clearly hovered at post crisis lows of -19%. This suggests that after a forced rebound in the past month, China may be again relapsing to the global industrial malaise, even as the US has still to find the lows.

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    At the same time, a more optimistic picture for China emerges when tracking consumer activity, which tracks spending in categories of consumption that are likely to be disproportionately affected by the virus, which continued to rise in China, even as it remains unchanged at -73% yoy in the US.

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    Real-time indicators across other sectors and countries show conflicting trends, with China clearly rebounding in real estate transactions and stabilizing for electricity consumption, while continuing to contract for weekend box office movie revenue, arguably the clearest indicator in the broader population’s confidence that the pandemic has been contained.

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    Sentiment remained dismal when viewed through the perspective of social networks, in this case economic sentiment as expressed on twitter.

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    There was more bad news when one looked at the US economy regionally, with the Seattle area showing little sign of recovery…

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    … while “unemployment” searches remain at all time highs, indicating we have yet to hit a peak in the deterioration in the labor market.

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    The silver lining: for now, at least, bankruptcies remain subdued in both the US and China, suggesting this could be the next big show to drop.

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    Tyler Durden

    Tue, 04/28/2020 – 19:05

Digest powered by RSS Digest

Apr 28

Today’s News 28th April 2020

  • First Negative Oil Prices, Now Sicily Will Pay Tourists To Visit
    First Negative Oil Prices, Now Sicily Will Pay Tourists To Visit

    Everything is upside down. First, it was oil long paying “buyers” to take delivery of oil that nobody could store; now it’s popular tourism destinations paying tourists to come visit.

    It is only appropriate that the birthplace of the Italian mafia has come up with the tourism equivalent of the WTI deliverable contract: according to The Times, Sicily is offering to pay tourists half of their plane ticket, as well as a night at a hotel an attraction entry fees in a bid to encourage tourists to return.

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    Sicily, located off the south of Italy, most famous perhaps for giving the world the Cosa Nostra mafia, is attempting to lure foreign visitors back to the island after the lockdown ends on May 4. The offers, first reported by The Times, will be available on the island’s tourism website. They include a free night at a hotel for every three, as well as museum and archaeological entry tickets. The Government will use €50 million to fund the scheme, with losses of €1 billion ($1.6 billion) reported from March and April.

    Italy generates 13% of its GDP from tourism and is desperate to restart inbound tourism as soon as the country is reopened.

    According to News.com, it’s not the first time the island has offered cheap deals to entice people to visit. Last year, the towns of Mussomeli and Sambuca in Sicily offered houses for just $1.60 as local numbers dwindled. The catch was that new owners had to fork out up to $25,000 to renovate the houses within the first year of buying them.

    The rest of Italy is also looking at ways to restart the tourism industry after being the hotspot of coronavirus in Europe. One region has even drawn up plans for tourists to use “plexiglass boxes” while relaxing on the beach to reduce the spread of coronavirus.

    Italy is not alone in a bid to reboot tourism following a total collapse in global travel: hotels elsewhere in the world are offering guests free upgrades and extra night to encourage them to stay, as coronavirus causes bookings to plummet.


    Tyler Durden

    Tue, 04/28/2020 – 02:45

  • What The COVID-19 Crisis Means For Europe & The Eurozone
    What The COVID-19 Crisis Means For Europe & The Eurozone

    [An interview with Dr. Hulsmann, originally published in German by Die Freie Welt.]

    As a result of the corona crisis, economic life was severely restricted in many countries. How long can the economy take this?

    As long as stocks last. In other words: as long as you can allow yourself to live off previous savings. There is no difference between a family and the overall economy in this regard.

    The German federal government has passed a bailout fund of around €750 billion to stabilise the economy and save companies from bankruptcy. Can such measures mitigate the economic downturn?

    No. Such measures have two very different effects, which only give the brief appearance of a cushion.

    On the one hand, income and wealth will be massively redistributed and, on the other hand, the future will be sacrificed on the altar of contemporary concerns.

    Let me describe that in a little more detail.

    The federal government’s bailout fund generates additional income or income of €750 billion. Where does this money come from? There are three main sources to consider: taxes, public debt, and the music press. In all three cases, it is by no means the state that conjures up 750 billion out of nothing. It is the citizens who are robbed of this sum in one form or another. Taxes are not supposed to be raised this time. I therefore conclude that the citizens will be expropriated, as in the past, by devaluing their financial assets. Interest income is pushed down even further. Savings are taxed with negative interest rates, and price inflation gnaws at what is left.

    As in the past, this redistribution is justified by the fact that there would otherwise be a collapse in the financial markets, which would also severely damage the real economy. Without the manna of the rescue umbrella, many companies would go bankrupt and lay off their workers. Loans could not be reimbursed, causing the banking industry to collapse, which would affect other companies. In a word, there would be a downward spiral, standstill, and mass unemployment. The citizens would be asked to foot the bill one way or another. Either they have to fund the rescue package or they have to suffer the collapse of the entire economy. All in all, therefore, it would be much better to fleece the citizens a little bit now, rather than to expose them to even greater losses.

    This argument is correct insofar as rescue packages can prevent a short-term collapse.

    This is exactly why the appearance of a cushion is created.

    Why only apparently?

    Because this short-term success comes at the expense of the future. The downturn is mitigated in the short term, but is reinforced in the long term. With the 750 billion, companies are now being saved that have not done what companies are supposed to do. They did not manage their own savings and other people’s savings sustainably. They had a run at short-term profits and funded their ventures with loans. It is these very firms, whose incompetence has become apparent through the crisis, that are now artificially kept alive. And those who have wisely foregone credit-financed adventures will again be asked to foot the bill. Hence, the real effect of the rescue package is to bring even more funds into projects that are already on shaky feet and are led by adventurers. It is obvious what that means for the future.

    The whole thing is compounded by the fact that government spending is notoriously inefficient and corrupt anyway. Unfortunately, there is no reason to hope that people who fail in all other areas of responsibility (education, healthcare, airport construction, housing construction, national defence, etc.) will find their first-class form right now.

    Let me conclude on this question with an even more fundamental consideration. It is wrong to always avoid short-term inconveniences at the expense of the future, especially with taxpayers’ money. But that’s exactly what we’ve been doing for many decades. This little game was previously limited to banking and finance, and as a result it was only noticed by experts. It has been played on a large scale since 2008 and as a result is becoming the focus of the general public. Anyway, it’s a very stupid game. Some government-related agents benefit, but ordinary citizens cannot gain anything here in the long run.

    It would be much more sensible to seek solutions in a fundamentally different way. You can actually make a good case for taking a short-term collapse of the entire economy “on the chin”—in Boris Johnson’s memorable words—so that the economy be cured and put on a healthier basis in the long term. After all, until recently, Germans were ready to leave their homes during the winter flu season and take the risk of catching a cold. If you do not want to accept any risks and inconveniences now, you’ll get plenty of both in the long term.

    What about the monetary system? Do you expect the eurozone to fall apart or inflation to rise?

    Higher price inflation, yes, but not a disintegration of the eurozone.

    Rising price inflation is unavoidable as government and central banks do anything to prevent that less money be spent overall in the economy. Since they have the printing press, they will probably succeed. In this case, price inflation is inevitable, since the supply of goods decreases due to the curfews.

    The eurozone will stay together as long as there are no better alternatives for national governments. The Italians grumble, but just like the Greeks back then, they will be wondering what loans they will get if they give up the euro.

    We have not heard of eurobonds for a long time. Now there are calls for corona bonds. What do you think of this idea?

    Nothing at all.

    They would exacerbate the basic problems of the eurozone: even more debt, more fragility, more irresponsibility by the immediate beneficiaries in politics and finance. Corona bonds would be a disservice not only to German, but also to Italian taxpayers. In the medium and long run, they would also be a disservice to the people who are dependent on medical services in Italy. The Italian state is alone responsible for its financial calamities and for the overwhelming burden on its state-owned and state-run hospitals. But even in the current mess, it could bring substantial relief in a fairly short time, simply by immediately liberating the private sector in the healthcare services. But that’s exactly what the state doesn’t want to do. Corona bonds are intended to ensure that nothing has to change, so that in fact nothing changes in the state’s mismanagement and shortage economy. Government representatives raise their fingers and contend: “If you Germans don’t do anything for us, then people will die over here.”

    The truth is that they themselves do not want to do anything that could question Italy’s inefficient welfare state. They take the Germans into moral custody, but accept that Italians will remain underserved because they do not wish them to be provided for outside the welfare state.

    If the shutdown is lifted, how long will it take for the economy to recover? Is this just a temporary slump or is the economic crisis going on for a long time?

    Basically, the recovery can take place very quickly. My main concern is government intervention, which can prolong and increase the current difficulties. The classic example from economic history is the Great Depression of the 1930s in the USA. At that time, a simple stock market crash was so badly managed by ever new and increasingly rigid state intervention that it expanded into a long-standing economic crisis.

    How do you rate the crisis management in the different countries? The United Kingdom and the Netherlands have opted for mass immunisation, France for curfews. Which reaction do you think is the right one?

    I am not an immunologist and do not presume to define the best solution from a medical point of view. As an economist, however, I know the following: it is fundamentally wrong to put the entire economy at the service of a single goal and to commit to a single solution. Human action always involves weighing up different goals and different means. Of course, maintaining health can be of paramount importance in the short run. But even then, it is never the sole goal and there are always different means. Free competition is essential, particularly when it comes to the efficient selection of ways and means. I therefore believe that the countries that respond best are those which give citizens and families the greatest possible freedom and responsibility, and which also do not centralise political responsibility, as here in France, but hand it over to the town halls and other local authorities. Examples would be Switzerland and the Netherlands.

    Which countries will emerge from the crisis as losers and which as winners?

    That’s difficult to say at the moment, because we are not through this yet. As I said, the greatest imponderability lies in state action.

    In any case, I do not see France, Italy, and Spain among the winners, since in these countries the crisis is “used” by circles close to the state to secure and expand their own privileges, if possible with the help of corona bonds.


    Tyler Durden

    Tue, 04/28/2020 – 02:00

  • China Threatens Australia Over 'Dangerous' Investigation Into Coronavirus
    China Threatens Australia Over ‘Dangerous’ Investigation Into Coronavirus

    China has threatened Australia with an economic hit if it doesn’t stop investigating the CCP’s handling of the coronavirus, according to Sky News.

    Chinese Ambassador Cheng Jingye told the outlet on Monday that while China’s response may not have been “perfect,” Australia’s inquiry was “dangerous,” and could lead to Chinese consumers avoiding Chinese exports and travel.

    “So what is being done by the Australia side?” asked Cheng. “The proposition is a kind of teaming up with those forces in Washington and to launch a kind of political campaign against China.”

    “The Chinese public is frustrated, dismayed and disappointed with what Australia is doing now,” said Cheng. “I think in the long term… if the mood is going from bad to worse, people would think ‘Why should we go to such a country that is not so friendly to China?’ The tourists may have second thoughts.“

    “The parents of the students would also think whether this place which they found is not so friendly, even hostile, whether this is the best place to send their kids here,” Cheng continued (via the Daily Wire). “It is up to the people to decide. Maybe the ordinary people will say ‘Why should we drink Australian wine? Eat Australian beef?’“

    Australia’s Foreign Minister Marise Payne hit back against the call for an independent inquiry, saying “Australia has made a principled call for an independent review of the COVID-19 outbreak, an unprecedented global crisis with severe health, economic and social impacts.”

    “We reject any suggestion that economic coercion is an appropriate response to a call for such an assessment, when what we need is global co-operation.”

    According to Sky News reporter Tom Connell, Australian politicians are in agreement over the need for a “global independent” investigation into the Wuhan coronavirus, adding that “China’s response, of course, has been to push back and the stakes did increase today from the Chinese ambassador in this interview with the Australian Financial Review.”

    China’s opposition to an Australian investigation comes after the United States reportedly launched a “full-scale investigation” into whether COVID-19 escaped from a biolab in Wuhan, China, according to Fox News.

    According to the report, US intelligence operatives are gathering information regarding the laboratory and the initial outbreak of the virus, which was found in a horseshoe bat specimen collected by scientists from the Wuhan Institute of Virology in 2013 in a cave in Yunnan, China.


    Tyler Durden

    Tue, 04/28/2020 – 01:00

  • A Locked-Down Country Is Vulnerable To Attack
    A Locked-Down Country Is Vulnerable To Attack

    Authored by Peter Earle via The American Institute for Economic Research,

    Right now, hundreds of thousands of businesses are closed, and countless American streets are empty. Individuals, families, and businesses are rapidly burning through their savings, supply chains are atrophying, and every economic indicator is revealing a rapid retrenchment from healthy levels just one month ago. We have had a stock market crash, an oil price crash, inverted yield curves, and many other warnings revealing an economy in serious distress.

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    What if, in this state of worsening economic vulnerability, the once-unthinkable were to happen yet again? 

    What would tomorrow look like if today were September 10, 2001?

    It’s true that, presently, aircraft are hardly flying and most office buildings are operating with skeleton crews, and thus the mechanics of an attack of the sort perpetrated on September 11th, 2001, are unlikely. But for all they lack, the enemies of the United States are surely not short of ideas or a terrifying form of homicidal entrepreneurialism. Propriety resists speculation as to other ways that such a thing could take place, but as a wealthy nation with many major cities, ports, and other critical points, America has and will always have vulnerabilities.

    In a state of lockdown, we are more vulnerable than ever. People are prisoners in their homes, with private firms shuttered and inert. America is in a recession, and perhaps in a depression. Government resources are depleted, and a sizable portion of the population is wandering around their home demoralized, confused, and depressed. 

    Straight talk: the United States is tremendously vulnerable right now.  

    Despite Trump’s campaign pledge to end American’s “endless wars,” soldiers, sailors, airmen, Marines, and government contractors in military roles are active every second of every day worldwide. Whether one believes that America’s foreign engagements are wholly justified or that they are an incredibly unsustainable exercise in imperial overreach – Americans in combat in four or five countries; another 150,000 troops in 800 bases spanning 150 countries; and entangling alliances in most of the remainder – the idea that these interventions don’t create new enemies, some of whom are likely to be innovative in the most sinister of ways, is both gullible and irresponsible. 

    The Congressional Research Service’s September 2002 Report “The Economic Effects of 9/11: A Retrospective Assessment” makes clear that one of the major factors blunting the full impact of the attacks was the Fed’s immediate action. 

    The economy was contracting when 9/11 occurred… The terrorist attacks did cause some severe localized effects, especially in and around the target areas, and that may have muted the magnitude of growth in the 4th quarter. The fairly modest effect may have been due to assurances given by the Federal Reserve within hours of the attack that it was still in business and that sufficient liquidity would be available for the financial community. Over the next three days the Federal Reserve added some $100 billion per day in liquidity. 

    And that only takes into account the days and weeks after the attacks. There were, of course, longer-term effects of the attacks in the tourism, airline, insurance, and food/agriculture sectors, as well as to some 18,000 small businesses near the World Trade Center, and in both New York City and Washington, D. C. more broadly. We live today with much of the legacy of that awful day, where I personally saw and experienced the devastation first-hand. 

    Fast forward to today, and we are facing a nationwide, politically-imposed economic standstill wherein the Federal Reserve has already extended massive programs of historic size and scope. The Fed Funds rate is, once again, effectively at zero. It seems doubtful that, were another such tragedy to occur, they would have much dry powder left other than unconventional monetary policy options. 

    It would be naive to think that the squeamishness and knee-jerk policy response demonstrated in the face of COVID-19 hasn’t been noticed by adversaries of the United States: most of all by those with whom any conflict is likely to be asymmetric in nature. Many of the same people who advocate for “readiness” in a military sense haven’t or don’t seem to have considered how politicians shutting down the entire US economy have increased our exposure to risk in a very short amount of time. 

    If we know that we’re vulnerable, “they” surely do as well. It is especially ironic that the Trump Administration has labeled Bitcoin and cryptocurrencies a “national security issue,” but for all we can tell either hasn’t considered or has chosen to neglect the risks posed by a prostrate economy. 

    Which points to another, more immediate fragility exposed by recent policy choices: kinetic attacks are one thing, but if the enemies of the United States know that the government will shut down our entire economy in the face of spreading disease, will the long-conjectured possibilities of more subtle but lethal assaults – the purposeful spreading of smallpox, measles, or other highly contagious diseases – appear? Will microbes be the new WMDs?

    We are now at the trough of a self-inflicted economic collapse. If military adventurism is to remain a core (if unfortunate) facet of America’s foreign policy gadgetry, I would argue for a rapid reprioritization of the economic aspects of national security. The revealed propensity to lock the U.S. economy down in the face of uncommon but not existential uncertainty represents an Achilles heel that will likely not be overlooked, at least not for long.

    Even, sadly, if arguments about liberty, prosperity, and quality of life do not resonate with many Americans, the basic notion of civil continuity should. These are admittedly uncomfortable topics which require discussion as a nation: discourse about policy, foreign and domestic, and about what we as a people are willing to bear for the doubtful benefits and already soaring costs of global interventionism. 


    Tyler Durden

    Tue, 04/28/2020 – 00:00

  • Secret 'COVID-19 Manhattan Project' Led By Billionaires Seeking To Influence Trump Admin
    Secret ‘COVID-19 Manhattan Project’ Led By Billionaires Seeking To Influence Trump Admin

    Last month Massachusetts Senator Ed Markey called for the bold and urgent launch of what he called “a Manhattan Project-type approach” to fight the coronavirus pandemic given the enormity of the health and economic impact, increasingly even harming US defense readiness.

    Apparently there has been such a group operating behind the scenes, but very unlike the original Manhattan Project it’s a private sector initiative, funded by a tiny network of ultra-rich industry titans working closely with government contacts. Meet “the secret group of scientists and billionaires pushing Trump on a Covid-19 plan” profiled in a lengthy Wall Street Journal investigation Monday:

    These scientists and their backers describe their work as a lockdown-era Manhattan Project, a nod to the World War II group of scientists who helped develop the atomic bomb. This time around, the scientists are marshaling brains and money to distill unorthodox ideas gleaned from around the globe.

    They call themselves Scientists to Stop Covid-19, and they include chemical biologists, an immunobiologist, a neurobiologist, a chronobiologist, an oncologist, a gastroenterologist, an epidemiologist and a nuclear scientist. Of the scientists at the center of the project, biologist Michael Rosbash, a 2017 Nobel Prize winner, said, “There’s no question that I’m the least qualified.”

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    Getty Images

    The until now secretive group is led by a 33-year-old physician-turned-venture capitalist, Tom Cahill, and is described as an elite go-between the pharmaceutical industry and Trump administration decision-makers, or an “ad hoc review board” of sorts pursuing cutting edge outside the box ideas.

    The scientists include a dozen world renowned researchers, pathology experts and inventors closely networked at institutions ranging from The Scripps Research Lab in La Jolla, California, to Yale University School of Medicine to Harvard to MIT’s Laboratory for Nuclear Security and Policy to private companies and labs like Merck and others.

    Recommendations and ideas floated by Scientists to Stop Covid-19 have already reportedly had far-reaching influence, including affecting policy inside FDA and the Department of Veterans Affairs, and the group is reportedly advising close Pence aide Nick Ayers.

    Among other billionaire influencers and backers to the private initiative include Peter Thiel, Jim Palotta, Michael Milken, Brian Sheth, and Steve Pagliuca, among others.

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    As an example of how the group was previously able to get a confidential 17-page report (since published by the WSJ) recommending various introductory unorthodox approaches to fighting and treating the pandemic, the WSJ details :

    “Steve Pagliuca, co-owner of the Boston Celtics and the co-chairman of Bain Capital — as well as one of Dr. Cahill’s investors — helped copy edit drafts of their report, and he passed a version to Goldman Sachs Group Inc. Chief Executive David Solomon. Mr. Solomon got it to Treasury Secretary Steven Mnuchin.”

    “Much of the early work involved divvying up hundreds of scientific papers on the crisis from around the world,” the report describes of the team’s daily communications. 

    “They separated promising ideas from dubious ones. Each member blazed through as many as 20 papers a day, around 10 times the pace they would in their day jobs. They gathered to debate via videoconference, text messages — ‘like a bunch of teenagers,’ Mr. Rosbash said — and phone calls.”

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    Brian Sheth, co-founder of private-equity firm Vista Equity Partners, via Bloomberg/WSJ.

    Among the ‘big ideas’ described by the network of researchers led by scientist-investor Dr. Cahill, who first gained the attention of aides within the Trump administration when they listened on an early March conference call tailored toward answering investors’ questions, include the following: 

    • Experimenting with treatments utilizing powerful anti-Ebola drugs in heavier dosages. 
    • The possibility of renaming the virus “SARS-2,” after the 2003 China animal virus, so that the connection is better made in the public mind with a deadly disease: “the name sounded scarier and might get more people to wear face masks. They dropped it.”
    • The group considers Hydroxychloroquine, long a focus of interest and debate in Trump administration circles, to be “a long shot at best”. 
    • The team has looked negatively on recent efforts to push antibody testing and ‘immunity passports’ that show recovery from the virus. 
    • They’ve sought to reduce FDA hurdles and red tape in order to get potential successful drugs out faster, especially to streamline hoped-for ‘miracle’ cures. 
    • The WSJ emphasizes further: “The scientists had in their research identified monoclonal antibody drugs that latch onto virus cells as the most promising treatment.”
    • A saliva test which is easy to administer with ultra-fast results is being pursued, one that offices and companies could utilize to make sure employees come into work virus-free each day.
    • Tech like smartphone apps to help track and gauge symptoms is a major focus. 
    • The scientists are also helping to craft state and national reopening strategies for the near and long-term.

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    * * *

    Read a copy of the 17-page report drafted by the Scientists to Stop COVID-19 here.


    Tyler Durden

    Mon, 04/27/2020 – 23:40

  • Narrative Managers Argue China-Like Internet Censorship Is Needed
    Narrative Managers Argue China-Like Internet Censorship Is Needed

    Authored by Caitlin Johnstone via Medium.com,

    Neoconservative publication The Atlantic has published an article authored by two university professors titled “Internet Speech Will Never Go Back to Normal”, subtitled “In the debate over freedom versus control of the global network, China was largely correct, and the U.S. was wrong.”

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    The article is actually worth reading in full, not just because it’s outrage porn for anyone who values human communication that is unregulated by oligarchs and government agencies, but because it’s actually packed full of extensively sourced information about the way Silicon Valley tech giants are collaborating with western governments to censor speech. The only difference between this article and something you might read on some libertarian website is that this article argues that all of these regulations on speech are a good thing.

    Here’s an archive of the article if you don’t want to give clicks to The Atlantic, whose editor-in-chief Jeffrey Goldberg once assured the world that “the coming invasion of Iraq will be remembered as an act of profound morality.” Do give it a look if this interests you and you have time.

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    “In the great debate of the past two decades about freedom versus control of the network, China was largely right and the United States was largely wrong,” argue the article’s authors, one of whom is a former Bush administration lawyer.

    “Significant monitoring and speech control are inevitable components of a mature and flourishing internet, and governments must play a large role in these practices to ensure that the internet is compatible with a society’s norms and values.”

    The article paints an accurate picture of the ways in which supposedly independent social media platforms have been collaborating with governments and with each other to regulate speech and have increased that collaboration during the Covid-19 pandemic, noting how “In March 2019, Zuckerberg invited the government to regulate ‘harmful content’ on his platform” and how “As in other contexts, Facebook relies on fact-checking organizations and ‘authorities’ (from the World Health Organization to the governments of U.S. states) to ascertain which content to downgrade or remove.”

    “These platforms have engaged in ‘strategic collaboration’ with the federal government, including by sharing information, to fight foreign electoral interference,” The Atlantic reports after outlining ways in which Facebook, Twitter and Youtube have been censoring speech in “aggressive but still imperfect steps to fend off foreign adversaries.”

    “The harms from digital speech will also continue to grow, as will speech controls on these networks,” the article’s authors assert. “And invariably, government involvement will grow. At the moment, the private sector is making most of the important decisions, though often under government pressure. But as Zuckerberg has pleaded, the firms may not be able to regulate speech legitimately without heavier government guidance and involvement. It is also unclear whether, for example, the companies can adequately contain foreign misinformation and prevent digital tampering with voting mechanisms without more government surveillance.”

    This article comes out days after journalist Whitney Webb published another article worth reading titled “Techno-Tyranny: How The US National Security State Is Using Coronavirus To Fulfill An Orwellian Vision”.

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    Webb details how FOIA-obtained document by a US government organization called the National Security Commission on Artificial Intelligence (NSCAI) argues for the need to implement authoritarian measures like increased surveillance more in line with those used in China, in order to prevent the PRC from technologically surpassing the United States.

    Webb notes for example how the document “cites the use of mass surveillance on China’s ‘huge population base’ is an example of how China’s ‘scale of consumer market’ advantage allowing ‘China to leap ahead’ in the fields of related technologies, like facial recognition.”

    We’re also seeing an increase in surveillance being pushed for in a new report by the think tank Tony Blair Institute for Global Change, arguing that a drastic increase in tech surveillance is “a price worth paying” in order to fight Covid-19. Which is of course hilarious, because having the think tank of a Bush lapdog Prime Minister argue that more surveillance is a price worth paying to stop coronavirus is a lot like a bunch of muggers arguing that time saved by cutting through dark alleyways is worth the increased risk of mugging.

    So that’s great. We’re seeing mainstream narrative managers shriek about the need for new cold war escalations against China’s bad, bad authoritarian government, while simultaneously arguing that western governments should espouse Beijing’s worst authoritarian impulses. This as we’ve discussed previously is because consent needs to be manufactured in order for the US-centralized empire to take drastic steps to prevent China from surpassing it and creating a multipolar world, and the freer people are to think and act and organize, the harder that’s going to be.

    Oligarchs have no business controlling what we can and cannot say to each other. Governments have no business bringing more and more transparency to us while bringing more and more opacity to themselves. This is ugly, it is abusive, and it must end.

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    Freedom of speech is actually about freedom of thought. Speech is the carrying agent of thought; controlling human communication is actually about controlling the spread of ideas. Censorship is about controlling the thoughts that the public think in their heads. Speech control is mind control.

    *  *  *

    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 or Paypal, purchasing 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

    Mon, 04/27/2020 – 23:20

  • The US Will Sell $4 Trillion In Debt This Year, A 300% Increase: This Is What It Will Look Like
    The US Will Sell $4 Trillion In Debt This Year, A 300% Increase: This Is What It Will Look Like

    Don’t look now, but just weeks after it passed the biggest fiscal stimulus in US history, Congress passed an additional round of fiscal measures totaling $484bn. This raises Goldman’s estimated 2020 US deficit financing need to ~$3.5 trillion. But there’s more: the bank does not think the latest measure is the final word here, and its economists expect another round totaling $550bn to pay for items such as aid to state and local governments, that haven’t been fully addressed thus far.

    On the whole, this would translate to between $3.8-$4 trillion in financing needs for 2020, almost a trillion dollar increment Goldman’s prior deficit estimate, and 300% more than the US sold in calendar 2019. Financing such a massive gap, amounting to 20% of GDP, will require a broad-based increase across maturities and product types.

    So how will the US pay for this massive financing hole. Below Goldman lays out what it believes to be a “sensible strategy” to  raise these funds. In the subsequent two years, Goldman turns optimistic and sees the deficit declining to $2.4tn in FY2021 and $1.65tn in FY2022, and reversing some of this year’s increases. We doubt it: once you go helicopter money, you never go back, just look at Japan.

    Exhibit 1 shows Goldman’s latest split for CY2020 funding. Bills are still the dominant venue for raising funds, with net supply from April to year-end coming in at around $2.1tn (and about $2.3tn for the calendar year), a magnitude large enough to mean that the bills market will have nearly doubled in size this year. That projection isn’t as far-fetched as it might seem—just in the month of April, Treasury has issued roughly $1.26tn of bills.

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    This heavy near term reliance on bills is even more visible when looking at split on a fiscal year basis. Exhibit 2 shows Goldman’s projections for net bill and coupon issuance for FY2020, FY2021, and FY2022. As can be seen, as financing needs drop from nearly $4tn this year to about $2.6tn and $1.7tn in the next two years, bills again adjust as the shock absorber. This pattern should be very similar to issuance around the 2008-2009 recession, when bills outstanding shot up to over 30% of USTs outstanding, only to decline to between 15-20% over the subsequent two years.

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    Such an initial surge in bill issuance makes sense, according to Goldman, only when there’s reason to believe a sizable portion of the funding gap is temporary and likely to fade quickly (it would take a huge optimist to believe that’s the case now). That way, coupon auction size changes can be more gradual, and absorb less of the uncertainty/volatility in deficits. Still, given the large amount that has to be raised, even with bills doing the heavy lifting, Goldman estimates Treasury will have to fund about $1.4tn in FY2020 from coupon issuance.

    Exhibit 3 shows Goldman’s best guess of the auction sizes that would be required to raise this amount. As can be seen, auction sizes will have to be lifted fairly aggressively across the spectrum—a conservative estimates sees increases of $12-$15bn in monthly auction sizes across the front and belly, and a more conservative $5-$8bn in longer maturities. Goldman also expects the introduction of both the 20y bond at the upcoming refunding, and a 1y SOFR-linked FRN in summer. For most of the maturities, the auction sizes will hit their peak levels later this year or early next year.

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    On the demand side, Goldman expects – for obvious reasons – that the Fed will remain the largest player in the market, as Helicopter money goes BRRRRR. In the bank’s most recent analysis, it had estimated that the Fed would have to absorb slightly more than $2tn of the issuance this year to maintain “normal functioning”; with the upsized deficits, the bank now believes that number is now closer to $2.4-$2.6 trillion.


    Tyler Durden

    Mon, 04/27/2020 – 23:08

  • Crude Carnage Continues Across Asia As Another Futures Contract Roll Looms
    Crude Carnage Continues Across Asia As Another Futures Contract Roll Looms

    Following last week’s bloodbathery in WTI as its May contract expired and the biggest oil ETF (US-Oh!) wreaked havoc between spot and futures markets, it appears we are set for deja vu all over again this week – except this time it’s the Brent contract that may suffer.

    “Some of this downward pressure particularly in the June contract is an increasing lack of liquidity,” said John Kilduff, a partner at hedge fund Again Capital LLC.

    This is not coming only from the USO, but also due to brokerage firms, like Marex Spectron and TD Ameritrade, restricting client’s abilities to add new positions to certain crude contracts, according to Kilduff.

    “It’s going to exacerbate the whole marrying of the June contract with the over supplied physical conditions and the lack of storage,” Kilduff said.

    As Bloomberg notes, With the Brent contract for June settlement expiring Thursday, any contracts that haven’t been closed out by then will be cash settled at a price set by the Intercontinental Exchange based on cash sales of North Sea crude on the day. Right now, physical prices are trading well below futures – Dated Brent was $16.01 a barrel on Friday.

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    Source: Bloomberg

    But it appears the unwinds in US-Oh! are also weighing more on the heavier-weighted (in the ETF) WTI contract – most notably June…

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    …which is down 15% further after settlement today, trading back at a $10 handle…

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    As a reminder, the ETF has changed its investment policy five times in the last two weeks, as shown in the following chart which depicted the ETF’s holdings as of Friday’s close:

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    Source: Bloomberg’s Laura Cooper

    It also warned investors its valuation may deviate significantly from the underlying oil price, in effect acknowledging that it’s momentarily less focused on the price of WTI crude.

    “While it is USO’s expectation that at some point in the future it will be able to return to primarily investing in the Benchmark Futures Contract or other similar futures contracts of the same tenor based on light, sweet crude oil, there can be no guarantee of when, if ever, that will occur,” it said in the filing, adding that USO investors “should expect that there will be continued deviations between the performance of USO’s investments and the Benchmark Oil Futures Contract, and that USO may not be able to track the Benchmark Oil Futures Contract or meet its investment objective.”

    All of which suggests we have crossed the eye of the hurricane as Goldman expects the market to test global storage capacity in the next 3-4 weeks – unlike WTI which was merely a Cushing event – which will likely create substantial volatility with more spikes to the downside until supply finally equals demand, as with nowhere to store the oil, supply has no other option but to be shut-in down in-line with the expected demand losses.

    Alternatively, we could see another “Monday massacre” with producers of oil willing to pay buyers to take physical possession right around the time all global capacity is full, unless of course US shale producers drastically cut output in the coming days, not weeks.


    Tyler Durden

    Mon, 04/27/2020 – 23:00

  • Sen. Tom Cotton Calls To Ban Chinese Students From Studying Science In The US
    Sen. Tom Cotton Calls To Ban Chinese Students From Studying Science In The US

    For the most part, Senator Tom Cotton has been on the ball: he was one of the first to raise objections about how China has reported their coronavirus data and was calling for investigations and accountability months before others in government even knew that the virus was a threat to the U.S. 

    Cotton is now calling for Chinese students to no longer be able to study science and technology in the U.S. and also claims that China is likely trying to steal a vaccine from the U.S. 

    On Fox News Sunday morning, Cotton said: “In the middle of a pandemic, what’s the most valuable intellectual property in the world? It’s the research that our great laboratories and life science companies are doing on prophylactic drugs, therapeutic drugs, and ultimately a vaccine.” 

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    He continued: “So I have little doubt that the Chinese intelligence services are actively trying to steal America’s intellectual property as it relates to the virus that they unleashed on the world, because, of course, they want to be the country that claims credit for finding those drugs or finding a vaccine, and then use it as leverage against the rest of the world.”

    He referred to the fact that U.S. education has trained “so many of the Chinese Communist Party’s brightest minds” as a scandal, according to the NY Post. 

    Cotton continued: “So I think we need to take a very hard look at the visas that we give the Chinese nationals to come to the United States to study, especially at the post-graduate level in advanced scientific and technological fields.”

    “If Chinese students want to come here and study Shakespeare and the Federalist Papers, that’s what they need to learn from America. They don’t need to learn quantum computing and artificial intelligence from America,” he concluded.

    Cotton has said that the CCP is “both criminally negligent and incompetent” in reacting the virus, which has now spread across the world.

    You can watch his full appearance with Maria Bartiromo here: 


    Tyler Durden

    Mon, 04/27/2020 – 22:40

  • Pelosi Pitches Universal Basic Income To Cope With Pandemic
    Pelosi Pitches Universal Basic Income To Cope With Pandemic

    After holding up aid to small business owners before rushing to bail out horribly managed blue states, House Speaker Nancy Pelosi is now pushing a guaranteed minimum income for Americans struggling due to the pandemic. 

    “Let’s see what works, what is operational and what needs attention,” said Pelosi during a Monday interview with MSNBC, adding “Others have suggested a minimum income, a guaranteed income for people. Is that worthy of attention now? Perhaps so. Because there are many more people than just in small business and hired by small business … that may need some assistance as well.” 

    More via CNBC:

    The idea of a government-guaranteed minimum income has gained attention in the past year thanks largely to Andrew Yang, who ran in the 2020 Democratic presidential primary on a platform built around universal basic income. Yang failed to win any delegates in the primary, but he built a devoted campaign following and raised the issue of UBI onto the national debate stage. 

    More recently, as the coronavirus pandemic has ravaged the U.S. economy and forced more than 25 million Americans to seek unemployment benefits, the idea of guaranteed income has reemerged as a possible way to stabilize the economy and help people meet their basic needs while millions of businesses are under forced closures.

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    Supporters of UBI such as Yang and Bernie Sanders (I-VT) have noted that the $1,200 cash payment for guaranteed income for those making under $90,000 per year is quite similar.


    Tyler Durden

    Mon, 04/27/2020 – 22:22

  • "Playing Into Putin's Hands" – Critics Lash-Out At Joint US-Russia Declaration On Historic Elbe Meeting
    “Playing Into Putin’s Hands” – Critics Lash-Out At Joint US-Russia Declaration On Historic Elbe Meeting

    Authored by Jason Ditz via AntiWar.com,

    In what seems a very innocuous statement, the US and Russia issued a joint commemoration this weekend of the 1945 meeting of US and Russian troops on the Elbe River, saying it showed the nations “overcoming their differences in pursuit of a greater cause.”

    The intention is to liken the common enemy, Nazi Germany in 1945, to the current foe of the coronavirus pandemic, and suggest that the US and Russia could once again put aside differences to work together in this new crisis.

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    Russian President Vladimir Putin, Kremlin file photo.

    But because this is 2020, and the statement involves Russia, it necessarily became a political row almost immediately, with the statement panned both by President Trump’s political rivals as a sign of his being too close to Russia, and by anti-Russia hawks who see this as Vladimir Putin trying to trick the US in some way into being less hostile.

    “The ‘Spirit of the Elbe’ is an example of how our countries can put aside differences, build trust, and cooperate in pursuit of a greater cause,” U.S. President Donald Trump and Russian President Vladimir Putin said in a joint statement on April 25. —RFE/RL

    “I am sure this was a Russian initiative,” said former official Angela Stent, while Rep. Eliott Engel (D-NY) chalked it up to Trump’s “bizarre infatuation with Russia’s autocratic leader” and said he was “playing into Putin’s hands.”

    Yet the coronavirus really is an opportunity for nations to put differences aside to address mutual threats. Everywhere else in the world such initiatives are being put forward, with the UN even calling for a global ceasefire to address the pandemic. It’s only natural for the US and Russia to also address that possibility.

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    US and Soviet soldiers greet each other on the Elbe in Germany on April 25, 1945. Via RFE/RL

    And typical grousing about that notwithstanding, a rapprochement between the US and Russia to focus on coronavirus would only be a good thing, bringing the world’s two biggest nuclear powers away from tensions and seeing if there are ways to cooperate.

    It is also noteworthy that the US and Russia are the two major parties to resist the UN call for a global ceasefire for the pandemic, but may still find some common ground with one another. This may suggest that the entire call for unity may not be lost on them, even if it takes some outside their comfort zone.


    Tyler Durden

    Mon, 04/27/2020 – 22:20

  • Macro Strategist: "Major Bond Markets Are Now The Most Worthless Indicators"
    Macro Strategist: “Major Bond Markets Are Now The Most Worthless Indicators”

    Exactly one month ago, when commenting on the Fed’s unlimited QE, we summarized Jerome Powell’s unprecedented nationalization of what was formerly the world’s deepest and most important market as follows: “the Fed’s takeover of bond markets (and soon all capital markets), means that any signaling function fixed income securities have historically conveyed, is now gone, probably for ever.”

    Now, with the mandatory cool down period to allow “objective contemplation”, others are starting to admit that this was the right assessment. Here is Bloomberg’s macro commentator Mark Cudmore admitting that “Interest Rates Are Past Their Sell-By Date as Guide.”

    His full note is below:

    Long considered the purest macro instrument, major bond markets are now among the most worthless of indicators.

    Conviction is hard to come by right now. It doesn’t help that our established navigation tools are broken.

    Free markets are an endangered species. Extraordinary monetary policy measures are now ordinary and bonds are the most distorted markets as a result.

    It used to be that a 10 basis point move in U.S. 10-year yields indicated a major shift in market thinking. Now? Who cares.

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    The only sure message from DM bond markets is that liquidity is abundant. Even the corollary that money is cheap isn’t always strictly true for everyone, precisely because what interest rate you pay on any loan is now far more dependent on who or what you are, rather than what the base rate is in the market.

    The Fed and the ECB both meet this week. Never mind not caring about what the policy rate is, we no longer care about their interest rate guidance. Even the banks’ mutterings on inflation are largely a side-show.

    Almost everywhere, benchmark rates are near zero and will be staying that way for some time. And those policy rates are almost irrelevant to the inflation story, which is instead a narrative about when a resurgence in global economic demand will potentially clash with supply-side destruction.

    What matters from policy makers are the lending and asset-purchase programs. Even there, the message is seeping through that there are no taboos left. “Moral hazard” is an antiquated concept among the supposed stewards of the financial system. With limits removed, the marginal impact of each new measure is diminishing rapidly.

    Will stimulus solve the health crisis? Will financial market manipulation solve the real economic problems on Main Street? Does coronavirus infection provide you with subsequent immunity? When will a vaccine be widely available? Good luck working out the answers to these questions from anything 10-yr government bond yields tell you.

    So with what should we replace Treasury yields as the ultimate macro guide? Funny you should ask — I’d really appreciate it if you could let me know the answer when you find out.


    Tyler Durden

    Mon, 04/27/2020 – 22:19

  • Petition To Oust WHO's Dr. Tedros Attracts More Than 1 Million Signatures
    Petition To Oust WHO’s Dr. Tedros Attracts More Than 1 Million Signatures

    A petition demanding the immediate resignation of World Health Organization Director-General Dr. Tedros Adhanom Ghebreyesus over his handling of the coronavirus pandemic has gathered more than 1 million signatures, according to the Korean Times.

    The petition, which was started by an individual using the handle ‘Osuka Yip’ on Jan. 31, blamed Tedros and his ‘poor leadership’ for the spread of the pandemic, which has killed more than 200k people around the world. And as the FT noted last night, the true death toll could be more than 350k.

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    The exact timeline of when the virus first began spreading from person to person in Wuhan remains unclear, as China has withheld reams of critical information about the early days of the pandemic. The Dr. Tedros-led WHO initially tried to help with the coverup by praising China’s response and claiming Beijing’s handling of the situation should be a “model” for countries all over the world.

    In reality, Chinese officials suppressed news about the virus, punished doctors who initially warned about the outbreak, grabbed up all the PPE and other vital equipment, while unleashing the virus on the world by failing to stop millions of Chinese travelers from leaving the country, and hundreds of thousands of people from leaving Wuhan and Hubei.

    Over the weekend, the WHO endured its latest gaffe when it said that ‘immunity passports’ wouldn’t be helpful because it’s unclear whether those who have recovered from the virus are truly immune. The WHO the next day offered a clarification, saying that the exact levels of immunity for former COVID-19 patients have yet to be closely studied. Dr. Scott Gottlieb said on CNBC Monday morning that almost every coronavirus patient would develop some level of immunity, despite preliminary research suggesting that some patients can quickly become reinfected because their bodies don’t produce enough antibodies.

    President Donald Trump accused the WHO of failing in its basic duty to warn the world of the virus and suspended US funding to the WHO – technically an arm of the UN – earlier this month. Two days later, 17 other Republicans on the House Foreign Affairs Committee backed Trump’s decision, saying they had also lost faith in Tedros.

    Disapproval of Dr. Tedros over his kowtowing to Beijing is particularly intense in Taiwan, as the government and the people accuse the WHO of ignoring the great accomplishments of local public health officials in suppressing the outbreak in the ‘renegade province’.

    The petition to oust Dr. Tedros had garnered more than 1,018,453 signature as of Monday morning.

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    After announcing his plans to cut US funding for the WHO, Trump was asked at a White House press briefing whether he would reconsider the decision if Dr. Tedros was forced out. Trump refused to answer, though one of his aids called it a “good question.”


    Tyler Durden

    Mon, 04/27/2020 – 22:00

  • Life After COVID: A Look At The New Economy
    Life After COVID: A Look At The New Economy

    Authored by Daisy Luther via The Organic Prepper blog,

    Many Americans have been locked down in their homes for more than a month now, and they’re anxiously awaiting the day when things “get back to normal.”

    I regret to inform you, as I wrote previously, that we’re never going “back to normal.”

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    The world After COVID will not be like the world Before COVID.

    It’s very important to understand what lies ahead so we can prepare for it.

    Two reasons that the world After COVID will be so different are problems with the economy and the supply chain. Let’s take a look at both and see where we’re headed.

    The After-COVID economy for businesses

    The government stepped in fairly quickly after lockdowns began to approve a massive number of small business loans. These loans were to be distributed by the institution with which the small business does their banking.

    Unfortunately, the outcome would be laughable if it wasn’t so tragic.

    Here’s an example: Chase Bank gaveRuth’s Chris Steak House a $20 million forgivable loan meant for small businesses by dividing it up by locations instead of treating the company like the large corporation that it is. Incidentally, Chase “earned” $100K for processing the loan.  After everyone rightly lost their marbles over this, Ruth’s Chris is returning the 20 mill. Chase and Ruth’s Chris aren’t the only culprits. There were all sorts of shenanigans that meant the fund ran out of money before the legitimate small businesses could even complete their applications. For example, big banks earned ten billion dollars in fees for processing the loans and here’s a list of big companies that played around with this system and drained it of millions.

    Another round of small business loans has been approved by Congress but I’m not really holding my breath that any of this will happen in the way we’ve been told it will.

    So to summarize, a lot of the small businesses who need the money to survive haven’t gotten it yet and may never get it, but big banks and big businesses are sitting pretty with the help of their cronies in Congress. It isn’t a stretch of the imagination to say that the longer a small business stays closed, paying their expenses and holding inventory while not being able to earn income, the less likely they are to reopen successfully (or at all) once the all-clear is given.

    And if they can’t reopen? All those folks they used to employ will be out of a job.

    The After-COVID economy for individuals

    Despite seemingly generous government offerings of stimulus payments and higher-than-normal unemployment payments, getting by is about to get a whole lot harder. First of all, many people haven’t yet received their stimulus payments. Some states still haven’t rolled out their COVID unemployment registration websites, so we have unemployed folks who still haven’t gotten one thin dime.

    It isn’t going to be long before that stimulus money is gone and if unemployment hasn’t yet kicked in, the first week of May is not looking pretty. A lot of folks were unable to make rent or mortgage payments in April, and of the ones who managed to hack together last month’s payments won’t be able to pay rent and mortgages.

    It isn’t just a roof over their heads that people are worried about. The use of food banks has soared over the past month. People who were barely making ends meet before are in a hole from which they may never dig out. And this isn’t out of laziness or any other lack of “virtue” – people can’t go to work because their workplace is closed.

    And it’s a perfect storm. If people are not allowed to work and the government is not following through with its promises of aid, there will be a response – most likely in the form of civil unrest and crime waves.

    At the same time, many of those who have gotten their COVID unemployment are refusing to go back to work. Why would they go back to getting minimum wage when with unemployment and the extra $600 per week, they’re getting close the $3000 a month? Businesses can’t reopen without employees. Unfortunately, when the COVID unemployment is over (it’s currently good for a total of 3-4 months), people may not have jobs to come back to, because, as I mentioned above, the longer a business is closed while still facing expenses, the less likely that business is to survive.

    It’s very likely that even once we’re “open” again, unemployment numbers will remain extraordinarily high.

    Prices are going up.

    Meanwhile, what money people are able to scrape together isn’t going to go nearly as far as it did Before-COVID.

    A lot of folks haven’t been to the store in a month or so. When they do go back they’re going to be in for one hell of a surprise. Prices have increased on just about everything. On the products with no price increase, many companies have reverted to the rather deceptive practice of selling a smaller container for the same price as before. (We found this to be true on both peanut butter and coffee, to name two examples.) You’re going to pay more for things like meat, eggs, canned goods, pasta, frozen pizza, and other popular lockdown foods.

    As well, food manufacturers are halting promotions – so things won’t be going on sale like they used to. Of course, they’re doing this to “help”  us out by making it more expensive, thus keeping people from being able to buy as much.

    “But the tactical dynamic is that we’re in daily discussions with our customers on how to help them meet the needs of their shoppers. And many customers are looking to pull back on promotions as they try to manage the basics of just keeping their shelves stocked.” (source)

    In a given month, “22% of food on store shelves is discounted, according to the companies under its coverage, and the average discount is 23%.” According to Market Watch, getting rid of the discounts will lead to a 5% increase in sales. This means, of course, a 5% increase in what consumers are paying will occur. And that’s just for certain items. Eggs have actually tripled in price since early March and many readers have reported seeing the price of their commonly purchased items increase by 25% all the way up to double the Before-COVID price.

    Then there are the supply chain issues.

    And this isn’t the worst of the news. Shortages are appearing to occur across the country – shortages that stores struggle to hide by spreading out the inventory and filling in gaps with items that are more plentiful.

    Some of the things that are missing are products that originate in China – see this list.

    Other items, like paper products, are also sparse even though many of these things are made in the USA. It isn’t just because of so-called “hoarders” either, as the media wants us to believe. There have been shortages of TP across the globe and the main reason is the fact that everyone is now at home most of the time now. Previously, a lot of a person’s toilet paper usage was outside the home – so everyone was using those giant janitorial supply rolls. Most households are now using 40% more toilet paper than before. This interesting article goes into detail about why there isn’t a quick and easy fix for this.

    Then there are food “shortages.” Interestingly, this problem isn’t necessarily about actual shortages as much as it is processing and distribution.

    Processing plants across the country are shutting down as more and more employees become ill. At least ten large meat processing plants have closed due to the virus. Distribution issues have farmers dumping thousands of gallons of milk, plowing under vegetables in the fields, and leaving potatoes to rot.

    A lot of the food being produced was destined for restaurants, hotels, and cruise ships. Diverting it to grocery stores and the millions of people using food banks right now (because they didn’t get their money from unemployment yet, remember?) is unfortunately not as easy as it should be. This article explains some of the issues with getting food to hungry people.

    One of the issues processing. With meat, in particular, this is difficult – most folks aren’t even going to be willing to process their own chickens and it’s wildly unrealistic to imagine a family in the city processing a cow or a pig. With produce, it becomes a little bit easier – anyone can wash fruits and vegetables – but employees are still needed to harvest the food.

    A lot of that scarcity could be remedied if we could reallocate things – if janitorial supplies could be sold to the general public, if farmers could sell directly to stores or consumers, and if farmers could donate unpurchased items to food banks.

    To summarize, farmers are losing billions of dollars and people are going without food, while the food we have is left to rot. Hopefully, President Trump’s new 19 billion dollar plan will allow the federal government to play matchmaker between frustrated farmers and hungry families.

    Introducing another run at UBI

    Let’s put all this information together. Here’s the TL;dr version:

    Trillions of dollars were created from thin air to “help” us through the crisis. Unfortunately, a lot of that money is now lining the pockets of massive businesses that would survive regardless.  Many small businesses will never reopen. Many jobs will never come back.

    People who are getting COVID unemployment would have to take a massive pay cut – for many, more than two thousand dollars a month – to go back to work so they have no interest in returning to their jobs. Why would they when they’re more financially secure sitting at home? But they’re not thinking ahead – these new-found riches are only coming in for 3-4 months.

    People who are not getting money are going to run out very soon (if they haven’t already) and this will result in an uptick of crime and civil unrest. Meanwhile, the money that folks have will buy less as the cost of just about everything goes up and scarcity continues.

    This all leads nowhere good. I’m not saying that COVID-19 itself was a big conspiracy but more a case of “never let a good crisis go to waste.”

    One possible outcome is Universal Basic Income.

    We’re being told we’ve got no place to go except giving away a lot of free money – although they’re calling it something different: the Emergency Money for the People Act. (I previously wrote about UBI here but I thought the trigger would be different).

    This fund would give everyone 16 and over $2000 per month for at least the next six months.

    The bill is called the Emergency Money for the People Act and would provide $2,000 a month for a guaranteed six months or until “employment returns to pre-COVID-19 levels.”

    “Pre-COVID-19 levels” mean the employment to population ratio for people ages 16 and older is greater than 60%. The monthly cash payments would not count as income.

    You could still apply for income-based federal or state assistance programs, such as assistance with purchasing food.

    Who would be eligible for the money?

    • Everyone 16 and older making less than $130,000 annually would receive $2,000 a month;

    • Married couples earning less than $260,000 would receive at $4,000 per month;

    • Qualifying families with children will also receive an additional $500 per child for up to three children.

    So a family of four with two children earning income up to $260,000 a year would receive $5,000. A single tax filer would get $2,000.

    • If you are unemployed, you are eligible for the money, as well.

    • College students will be eligible for the money. They were not eligible for the stimulus payment sent out this week if they were claimed on their parent’s income tax as a dependent.

    • Adults with disabilities were also left out of the stimulus payment since they could be claimed as dependents on others’ tax returns. They would be eligible for the Emergency Money for the People Act. (source)

    What could possibly go wrong with “free money,” right?

    Plenty. Hyperinflation is one major factor nobody’s talking about – this money they want to give away does not exist and is backed by nothing. If you think prices are super-high now, just wait.

    And then there’s the other cost.

    Trust me when I tell you there will be a high price tag for that “free” money and the cost will be liberty. Maybe it will be your freedom to decide where you work. Maybe it will be your freedom to choose what you buy. Maybe it will be mandatory vaccines or microchips or ID cards but it will cost you something that you’ll never get back.

    UBI Emergency Money for the People isn’t a done deal yet. But the government is going to feel that they’re obligated to take some kind of measures to maintain order. (Back to that civil unrest and crime again). And to some degree, they’re right – the current straits Americans are finding themselves in can be chalked up to decisions made by the government. But I can’t imagine that in this direction lies liberty.

    What can you do?

    The answer, as always, lies in self-reliance. The less you need, the better off you’ll be. I’ll go more in-depth later but below, find some general guidelines.

    1. Produce or acquire food as much as possible. Gardening; sprouting; raising livestock for meat, eggs, and dairy; hunting; and foraging are all ways to put food on the table yourself.

    2. Learn to preserve food. When food is plentiful, putting it back by canning, dehydrating, and freezing.

    3. Localize your supply chain. Find local farmers and purchase directly from them. Visit pick-your-own farms, get CSA shares, or hit up your farmer’s market. Buy in as much quantity as you can for the best prices.

    4. Slash your budget. Get spending down to a bare minimum right now while we wait to see how things pan out.

    5. Mend and repair. Instead of throwing things away and buying new when something breaks or gets damaged, learn how to fix things like clothing and household items.

    6. Make do. There are a lot of things we get that we don’t need: upgraded phones, new clothing, decorative items, updated vehicles, newer tools, and small kitchen appliances. Whenever possible, make do with the things that you already have.

    7. Make things last. Use everything to the last drop. Squeeze out that last little bit of toothpaste. Add some water to your dish soap. Use a little less detergent in the laundry. These are tiny changes that can really add up over time.

    8. Be prepared for a lack of services. At some point, as income tax revenue continues to decrease, we’ll start to see cuts in services like garbage pick-up and first responders. Start thinking now about your solutions should these things happen.

    9. Continue building your stockpile. Even though prices have gone up, continue adding food and supplies to your pantry as you can.

    10. Participate in a barter economy. If you have eggs and your neighbor has honey, see if they’re interested in a trade. Do the same with skills – swap yardwork for haircuts, repair something in return for someone else’s used item that you need, supply manual labor in return for part of someone’s harvest. If you run a small business, be open to barter within your local community.

    We’ll talk a lot more about handling these issues in upcoming articles. (Sign up here for the daily newsletter.) A shift in mindset will be essential to survive and thrive in the After-COVID world.


    Tyler Durden

    Mon, 04/27/2020 – 21:40

  • Detroit Democrats Cast Out Fellow Lawmaker Who Had Audacity To Credit Trump For HCQ COVID Cure
    Detroit Democrats Cast Out Fellow Lawmaker Who Had Audacity To Credit Trump For HCQ COVID Cure

    A Detroit Democratic lawmaker was officially censured by her party colleagues last weekend after she credited President Trump with for promoting hydroxychloroquine, which she says saved her life after she contracted COVID-19.

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    According to The Detroit News, State Rep. Karen Whitsett of Detroit ‘broke protocol’ by meeting with President Trump and VP Mike Pence during an April 14 meeting of coronavirus survivors.

    “Thank you for everything that you have done,” Whitsett told Trump at the meeting. “I did not know that saying thank you had a political line. … I’m telling my story and my truth, and this how I feel and these are my words,” she said during the meeting.

    Whitsett’s penalty? She was cast out by the 13th Congressional District Democratic Party organization, which unanimously voted via Zoom on Saturday to oust the first-term lawmaker representing Michigan’s 9th House District.

    “We have the ability to be the referee when we see our leaders out there attacking and not being willing to have a discussion to find common ground,” said chairman Jonathan Kinloch. “Based on her actions and recent statements, she’s chosen to be a stand-alone Democrat with the goals of a Republican.”

    According to the resolution, Whitsett has “misrepresented the needs and priorities” of Democrats to the President and public, and that she participated in events with the Republican Women’s Federation of Michigan to express her thanks to Trump.

    Whitsett “has repeatedly and publicly praised the president’s delayed and misguided COVID-19 response efforts in contradiction with the scientifically based and action-oriented response” from Michigan’s Democratic leadership, “endangering the health, safety and welfare of her constituents, the city of Detroit and the state of Michigan.”

    The admonition means she will not get the group’s endorsement for this year nor will she be able to engage in the group’s activities for the next two election cycles. 

    Trump appeared to offer his support for the state representative late Thursday, tweeting, “Disgraceful. (Whitsett) Should join the Republican Party!” 

    The president also tweeted Friday morning about the controversy: “The Fake and totally corrupt News is after her as a means of getting to me. She’s smart and strong, knows the truth. Already a heroine to many!“

    Until March, Kinloch was Democratic Gov. Gretchen Whitmer’s community liaison to southeast Michigan. He saidthe censure “speaks to the heart of Democratic representation” and should she wish, Whitsett has seven days to appeal.

    “This is done with unless she appeals,” he said. “We will begin screening someone else to support that district.” –The Detroit News

    Whitsett says she won’t engage in the “pettiness politics” of the Michigan Democratic organization, telling the Detroit News that she’s raised $450,000 in four days for resources for her district.

    “I was asked to speak about my COVID experience,” she said. “The board has various issues and I don’t understand what this censure is this censure supposed to do?“

    “We are in the middle of a pandemic if anyone has forgotten, which is what Jonathan and the governor should be concerned about,” she said, while stating that she had no involvement with the Republican women’s group.


    Tyler Durden

    Mon, 04/27/2020 – 21:20

  • China Brokerage Forced To Retract Report Admitting Unemployment Rate Is 20%
    China Brokerage Forced To Retract Report Admitting Unemployment Rate Is 20%

    Is China’s unemployment rate 4 times higher than the official one?

    While we would be the last to accuse China of lying about anything – and Jack Dorsey would agree – a Chinese securities brokerage may have been foolish enough to admit the truth about China’s dismal economic reality… followed by promptly retracting an analyst report Monday that put the country’s real jobless rate above 20%, far greater than the official number.

    According to an April 24 report by analysts from Shandong-based Zhongtai Securities, as many as 70 million people could have lost their jobs due to the economic fallout from the coronavirus pandemic, translating into an actual unemployment rate of around 20.5%. The surge in unemployment, according to Bloomberg which saw the report, was due to the outsize impact of the pandemic on services and small businesses, which provide the bulk of job opportunities, they said.

    “The urban surveyed unemployment rate is obviously flawed in depicting the unemployment situation, because of China’s special condition that there is a very large group of migrant workers and that the urban surveyed unemployment rate couldn’t truly reflect the employment situation of migrant workers,” the analysts admitted.

    There were about 50 million fewer working migrant workers in the first quarter compared to last year, part of whom were not included in the survey, according to the 11-page original report.

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    The problem: if accurate, this means that China is not only lying about the source of the coronavirus, and the number of casualties, but also about its unprecedented fallout on the economy. And to preserve confidence, Beijing is pretending that tens of millions of workers are employed when they are, in fact, jobless.

    The official unemployment rate was 5.9% in March, down from the “record-high” 6.2% in the first two months of the year, according to data from the National Bureau of Statistics, but of course that number is fabricated just like everything else in China. Like every other economic “data” point, the employment reading has been goalseeked in a tight range of around 5% since the series was first introduced in 2016, similar to GDP which had barely budged more than 0.1% vs the consensus number until the coronacrisis.

    In any case, telling the truth was a huge mistake because just like everything else, in mainland China it is verbotten for economists to critique the official job data, a topic of extremely political sensitivity to the Communist Party leadership, especially if the truth is that China is this close to the social disorder that results from tens of millions of jobless people.

    And sure enough, almost immediately after the report was published, it became inaccessible according to Bloomberg. One of the report’s authors, Zhang Chen, said by phone that it had been retracted: “Zhongtai’s attitude is that we should go by the official figures for unemployment,” Zhang said, confirming indirectly that China is lying about the official data and will censor anyone who dares to tell the truth.


    Tyler Durden

    Mon, 04/27/2020 – 21:00

  • Top Manhattan ER Doctor Commits Suicide After Treating Coronavirus Patients
    Top Manhattan ER Doctor Commits Suicide After Treating Coronavirus Patients

    In a shocking example of the psychic toll that those fighting on the front lines of the coronavirus outbreak endure, a top emergency room doctor who treated coronavirus patients at a hospital in Manhattan has committed suicide, the New York Times reports.

    Dr. Lorna M. Breen, the medical director of the emergency department at New York-Presbyterian Allen Hospital, died in Virginia on Sunday, where she was staying with family, according to her father who discussed her death with the Times.

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    Her father said she had described to him “devastating scenes of the toll the coronavirus took on patients,” the NYT reported.

    “She tried to do her job, and it killed her,” he said.

    Breen’s father, also an MD, said his daughter had contracted the virus, but had gone back to work after recuperating for about a week and a half. Then, the hospital sent her home again, but at this point her family moved to bring her back to Charlottesville, Va.

    Breen, 49, had no history of mental illness, but when she last spoke with her father, she reportedly described a horrifying onslaught of patients found DOA in ambulances, all of them COVID-19 patients.

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    Dr. Breen

    Her father asked the NYT to “make sure [Breen] is treated like a hero,” since she died doing her job and protecting this country from a devastating health care epidemic.

    “She was truly in the trenches of the front line,” he said. “She’s a casualty just as much as anyone else who has died.”

    Dr. Lawrence A. Melniker, the vice chair for quality care at the NewYork-Presbyterian Brooklyn Methodist Hospital, told the NYT that Dr. Breen was well-respected and well-liked in their hospital system.

    “You don’t get to a position like that at Allen without being very talented,” he said.

    The coronavirus has presented unusual mental health challenges for emergency physicians throughout New York, the epicenter of the crisis in the United States. As the paper added, while ER doctors are inured to treating patients will all kinds of grisly injuries, they’re not accustomed to being at risk of infection themselves, or of passing it to their colleagues.


    Tyler Durden

    Mon, 04/27/2020 – 20:44

  • WHO Mysteriously Deletes Tweet About Reinfection As 'Immunity Passports' Being Debated
    WHO Mysteriously Deletes Tweet About Reinfection As ‘Immunity Passports’ Being Debated

    The World Health Organization (WHO) on Sunday deleted an alarming tweet for unknown reasons suggesting COVID-19 infected persons could catch the disease a second time.

    The tweet was live long enough to be picked up in the media — some of which reported the information as “misleading” — before its quiet deletion later in the day.

    The tweet garnered well over ten thousand retweets and tens of thousands of “likes” before it disappeared. 

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    The controversial statement said: “There is currently no evidence that people who have recovered from #COVID19 and have antibodies are protected from a second infection.”

    Health experts and some publications immediately took issue with the phraseology, pointing out that “no evidence” will be taken broadly taken as ‘confirmation’ that people are not protected via antibodies. 

    Most epidemiologists believe COVID-19 survivors do build up some immunity, but still admit the virus is so new it hasn’t been studied enough to come to definitive conclusions.

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    Drive-thru coronavirus testing site in the UK, via The Guardian/Shutterstock.

    As Reason pointed out, the controversy comes as the idea of so-called “immunity passports” is being hotly debated: 

    On Friday, the WHO published a scientific brief on “immunity passports” — the idea that governments should grant special documents to citizens who test positive for COVID-19 antibodies, allowing them to move about freely. The WHO warned that this is premature, since “no study has evaluated whether the presence of antibodies to SARS-CoV-2 confers immunity to subsequent infection by this virus in humans.”

    The WHO is correct that scientists have not determined the degree of immunity enjoyed by COVID-19 survivors.

    One critic, statistician Nate Silver said in a tweet pushing back against the WHO’s Sunday Tweet, saying: 

    …“no evidence” means “something like ‘no definitive proof, yet’… But the average person is going to read it as ‘there’s no immunity to coronavirus,’ which is likely false and not a good summation of the evidence.”

    It appears the WHO deleted the tweet out of concern that it could be misleading to the general public, however, it’s ultimately unclear why they made this decision, instead of just updating it with more nuanced information.


    Tyler Durden

    Mon, 04/27/2020 – 20:40

  • A Federal Bailout Won't Fix States' Finances
    A Federal Bailout Won’t Fix States’ Finances

    Authored by Kevin William son via National Review.com,

    Bailing out the Illinois state pension system is the worst idea from a week in which we were discussing the health benefits of mainlining Lysol. (Please do not mainline Lysol. It will kill you.)

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    Irresponsible state and local governments are attempting to exploit the fear and disruption of the coronavirus epidemic to push off the consequences of their decades of reckless and culpably dishonest policies onto the federal government. This will inspire a great deal of conversation about “moral hazard” and “fairness,” but the fundamental problem is something else: Such a bailout would not work because it would not actually solve the real-world problems that threaten to cripple state and local finances.

    Contra Mitch McConnell, the Senate majority leader, this is not exclusively a “blue state” problem.

    State and local governments are facing short-term financial problems that are tied to the epidemic and the imposition of social distancing, lost tax revenue prominent among them. With businesses forcibly closed and unemployment soaring, there is less money coming into state, county, and city tax coffers. Some states are better prepared for this than others: Wyoming maintains a “rainy-day” fund that has socked away in it funds equal to 109 percent of the state’s annual government expenditures. Alaska has more than half a year’s expenditures tucked away, North Dakota 30 percent, New Mexico 27 percent. Most states have a good deal less, and some have very little: New York has only 3 percent, Pennsylvania 1 percent, and Senator McConnell’s home state of Kentucky less than 3 percent. Illinois, to nobody’s great surprise, comes in at 0.0 percent, no doubt from spending all its money on Chicago-style avocado toast.

    Conservatives often have been critical of these funds, characterizing the reserves as excessive and arguing that the funds should be drawn down to finance tax cuts. In uncertain times, Wyoming’s big fat fund looks pretty smart.

    Illinois still looks like Illinois.

    The thing about unforeseeable circumstances is, they’re unforeseeable. Nobody knows which days are going to be rainy, though we do know with a reasonable degree of confidence how many rainy days there will be in a year or a five-year period. Responsible people and governments save up for emergencies — even if they do not know what the emergency is going to be.

    Or they used to. But when credit is cheap, the ability to use debt in lieu of emergency savings can be very alluring. And it even may make financial sense on a limited fiscal horizon.

    Because the United States has for so long relied on driving down interest rates as a form of economic stimulus, carrying lots of debt and very little cash savings may make financial sense on any given day or in any given week. If you can get a 3.5 percent mortgage with inflation at 2 percent, then it makes more sense to keep your money invested than to drain your brokerage account to buy a house or make a big down payment. If you are the federal government and can get your money for nothing, then there’s a certain sort of logic to running big deficits. State and local governments can’t usually borrow quite as cheaply as Washington can, but the incentives are much the same.

    The political incentives are even more powerful than the financial ones. A few curmudgeons and your favorite scold aside, everybody likes spending. Nobody likes paying taxes. If you can get an extra $1 trillion a year to throw at the voters without taxing them an extra $1 trillion a year, then that has strong appeal.

    But the shenanigans get more complicated than that. One of the largest problems facing state and local governments, from Illinois to Oklahoma and from Los Angeles to Dallas, is “unfunded liabilities,” meaning the differences between the promises governments have made to their employees and the money they have set aside to pay for those things.

    This mostly has to do with pensions and medical benefits in retirement. Government workers are a powerful political constituency — they run California — and they want the same thing everybody else does: more. In order to keep them happy, governments may give them bigger salaries, but these have to be paid for on an ongoing basis, which means putting these expenditures in the budget and collecting taxes to pay for them. Those taxes are not very popular with the people who have to pay them. So what governments do instead is ask their employees to forgo larger increases in salary today in exchange for more-generous pensions and retirement benefits in the future. But instead of saving the money they’ll need to pay those future benefits, irresponsible state and local governments spend that money in the here and now, shortchanging their pension funds.

    The short-term problem for ailing state and local governments is diminished tax revenue from the epidemic. That is precisely the kind of problem that can be mitigated through ordinary fiscal responsibility: Don’t take on debt in good times, carry reserves when possible, diversify revenue streams. State and local governments have long experience riding the revenue roller-coaster. In California, much of the state’s revenue comes from capital-gains taxes, while in Texas much comes from energy, and both of those states maintain rainy-day funds precisely because of their experience with the volatility of their important revenue streams. States should carry larger reserves. It is true that it is easier for Alaska to do this than it is for New York State, because Alaska has all that oil revenue, but New York State lacks oil revenue because of Governor Andrew Cuomo’s fracking ban — not because of a lack of oil.

    (What’s your excuse, Pennsylvania?)

    If you doubt that the pension issue is central here, consider Illinois’s request for a federal bailout, which proposes $10 billion in pension aid but only $1 billion to help provide health care to poor people. It also seeks $15 billion in unrestricted assistance to the state and $9.6 billion in direct aid for the cities. This proposal was put together by the Democratic state-senate leader in Illinois, Don Harmon, who knows that current and retired employees are 35 times more important to him and his party than are poor people who need health care — and he did the numbers accordingly.

    Congress cannot solve the problems in Springfield or in any other state capital — even if it knew how, and even if it wanted to. If Washington were to dump a few billion dollars into the lap of the feckless cartwheeling goobers who run Illinois, the underlying problem of chronic underfunding of future pension liabilities would remain, and Illinois would be right back where it is today in a year or two. A bailout would not solve the problem — it would keep the problem from being solved.

    Under our Constitution, Congress cannot simply dictate to Illinois how it organizes its own affairs, and those affairs are going to have to be reorganized. Specifically, Illinois is at some point going to have to enter into negotiations with its pensioners and current employees and get them to agree to accept substantially reduced benefits. The state cannot tax its way out of this hole. Illinois’s unfunded liabilities right now are $137 billion. Another way of saying that is that Illinois has about 15 years’ worth of pension contributions to make up for. Given that making up this deficit would cost Illinois 100 percent of its tax revenues for about four years, it is unlikely to be able to make up the shortfall even if it wanted to. The state already is running chronic deficits as it is.

    When it comes to the question of aid to state and local governments, Washington has to distinguish the short-term problems from the long-term problems. And the long-term problems will not — and cannot — be solved in Congress.

    Illinois and other states with similar problems have a few tools for addressing them: higher taxes, lower spending, reduced benefits, and a few outside possibilities such as asset sales, something Illinois governor J. B. Pritzker has sought to explore. How to mix and combine those approaches is a question of politics. That is has to be done is a question of math.

    And there is no sense in trying to bail out these states until they address the real problem: the epidemic of irresponsible government.


    Tyler Durden

    Mon, 04/27/2020 – 20:20

Digest powered by RSS Digest

Apr 27

Today’s News 27th April 2020

  • Norges Bank Considers Revoking Offer To Incoming Wealth Fund CEO After Left Wing Outrage Campaign
    Norges Bank Considers Revoking Offer To Incoming Wealth Fund CEO After Left Wing Outrage Campaign

    The scandal unfolding at Norway’s $1 trillion sovereign wealth fund, one of the largest piles of oil capital in the world, is beginning to look less like an unseemly glimpse into the incestuous world of Norway’s elite, and more like a textbook case of a cynical tabloid press emboldening critics on the far left.

    On Friday, outgoing fund CEO Yngve Slyngstad’s delivered an apology that surprised even the financial press with its seeming sincerity. In it, Slyngstad mused about how one bone-headed decision had destroyed the public trust he had carefully built over two decades.

    Julie Brodtkorb, chair of the supervisory council of Norges Bank, has said the central bank will decide by Tuesday whether to hold an extraordinary meeting to look into whether the executive board of the central bank followed the proper protocols in appointing Tangen. But we suspect they will find that the proper procedures were, in fact, followed, since Tangen’s explanation of how he ended up with the job has been widely corroborated, and clearly rules out a quid-pro-quo, an idea that was, as we said, pretty tenuous to begin with.

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    The fact is, Tangen is making an enormous financial sacrifice to accept the position to lead the sovereign wealth fund. He will take a huge pay cut, and will also be forced to pay Norway’s onermous wealth tax, something his annual salary won’t even cover. He’s essentially paying to hold the job, something Tangen – a native Norwegian – once called “a dream.”

    However, the press and Norway’s political establishment are all furious at Tangen for organizing an extravagant seminar at his alma mater, the University of Pennsylvania’s Wharton School, where Slyngstad and several other Norwegian power players (including the country’s attorney general) attended. Slyngstad attended the seminar shortly after announcing his decision to step down from the leadership of the sovereign wealth fund, a decision that triggered a scramble by the central bank to find a successor who was as well-qualified as Slyngstad.

    Details about the seminar (which included performances by Sting and Gregory Porter) were published by a Norwegian tabloid, which kicked off the scandal. Many on the left raised an eyebrow when the central bank announced that it had appointed Tangen to take over the fund. The staid Norwegian culture leaves little room for Tangen’s flashy hedge funder lifestyle. Bloomberg reported that many Norwegians might “struggle to regard Tangen as a public servant” because of the coverage.

    The crux of the scandal at the central bank is that Tangen’s decision to invite Slyngstad, and then fly him back to Oslo on a private jet, a decision that he said was made to save Slyngstad the trouble of taking a train back to New York from Pennsylvania to catch a flight back to Norway, was read as a possible quid pro quo. However, that’s a pretty tenuous connection to begin with: the gift, while seemingly excessive to the common man, is merely a rounding error for Tangen.

    Plus, the timeline of events, as well as the explanations supplied by Tangen and Slyngstad, appear to support their claims that there was no quid pro quo, and that Slyngstad didn’t have much, if any, role in selecting Tangen as his replacement.

    Tangen said he didn’t apply for the position of leading the sovereign wealth fund; instead, he was contacted by head hunters from executive recruitment firm Russel Reynolds. That story has been corroborated by everybody involved.

    In an effort to “make things right,” the Norges Bank has insisted on reimbursing Tangen for the cost of Slyngstad’s flight and seminar attendance. What we want to know is: How is sticking the Norwegian taxpayer with the tab for these extravagances supposed to quell their anger? Then again, we aren’t Norwegian, and don’t have any first-hand experience with the culture.

    Still, the affair has dominated Norwegian media, thanks largely to left-wing politicians and union leaders who are now insisting that the central bank reconsider Tangen’s appointment, arguing that the ‘jetsetter’ isn’t the right candidate for Norway. Norges Bank’s Supervisory Council, the wealth fund’s watchdog, has given the central bank until April 29 to answer a list of questions surrounding the recruitment process.

    These criticisms, however, fail to take several important factors into account: As we mentioned above, Tangen is making personal sacrifices in terms of his wealth just to accept the decision, which undermines the quid-pro-quo argument, since Tangen has nothing to gain – reputationally or financially – from taking the job. He says it’s a personal dream of his to run the fund. There’s no reason to doubt this.

    In reality, these outraged left-wingers are hurting Norway: Knut Kjaer, the founding CEO of the wealth fund, told the FT that hiring Tangen was “a stroke of luck” for the fund. As we mentioned above, many feared that someone as qualified as Tangen wouldn’t emerge, despite the fund’s largess.


    Tyler Durden

    Mon, 04/27/2020 – 02:35

  • Even The EU Are A Bunch Of 'Karens': Barnier Complains About Brexit Negotiations
    Even The EU Are A Bunch Of ‘Karens’: Barnier Complains About Brexit Negotiations

    Authored by Tom Luongo via Gold, Goats, ‘n Guns blog,

    So, this happened...

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    EU lead negotiator for the free trade agreement with the United Kingdom is complaining in the press again.

    “The United Kingdom cannot refuse to extend the transition and at the same time slow down progress in important areas,” Barnier said, expressing concern that Britain has not presented concrete proposals for certain contentious issues, but did not name the areas, according to DPA news agency.

    H/T TO FORT RUSS

    For once someone is treating the EU the way it treats everyone else and they don’t like it. I guess Michel should change his name to Karen.

    Except the problem here is there’s no manager to talk to because Prime Minister Boris Johnson isn’t listening.

    The typical EU negotiations looks like this, according to former Greek Finance Minister Yanis Varoufakis.

    You walk in with a well thought out proposal, present it in detail thinking it’s the beginning of a negotiation only to find they aren’t listening at all and look at you like you’ve just sung the Swedish National Anthem.

    Well it looks like Boris Johnson and the Brits are treating Barnier and the EU with the same vague contempt that he and the EU treat everyone else and guess what?

    Karen doesn’t like it.

    Remember, the Brits have ask for an extension by June 30th to extend this transition period they are in for another two years or negotiations end on December 31st.

    If no trade deal is agreed to by the two sides by then, trade between them on WTO terms commences. Given the current state of EU politics and its sinking economic conditions the likelihood of the U.K. giving Barnier even the time of day at this point is pretty low.

    He’s behaved appallingly at every stage of these discussions, going back three years, treating the Brits like a bunch of wayward children and the EU the assuming the role of the abusive, distant father.

    If, at this late date, Barnier is accusing the Brits of stalling and complaining about it publicly then there is no deal and Johnson is dead set on a hard Brexit.

    Because while Boris may look like a buffoon, he’s as shrewd a political operator as there is.

    Because we all know what the real story is here, the EU wants to soak the U.K. for the next two and a half years while making them liable for hundreds of billions of pounds to bail out the European banking system.

    That’s why they are pushing for an extension. That’s why they are putting non-starter proposals on the table, if any at all.

    And there’s zero political will in the U.K. to give the EU another shilling.

    Moreover, with Germany ascendant within the EU at the moment, since Chancellor Angela Merkel won the latest round against the Euro-integrationists resisting the call for debt mutualization and Eurobonds, Germany needs exports to the U.K. a whole lot more than the U.K. needs exports to Germany.

    And that provides the dynamic to ensure there will be no tariffs put in place in the event of a hard Brexit. Because if they do it will gut what’s left of German exports to the U.K. and its now-suffocating automobile industry.

    It means the Germans will set a ruthless agenda in the second half of this year in budget talks while it has the Presidency of the European Commission.

    However, it also means that Italy will have a lot of leverage since the Germans don’t want to go back to the Deutschemark anymore than Italy wants to stay in the euro under the current arrangement. A new mark would be far stronger than the euro would be without Germany in it.

    And that would also crush German exports.

    I have to wonder at this point whether Merkel will reverse course on all of the terrible things she’s done to the German economy in the next six months. She has to realize, with her now commanding lead in the polls, she no longer needs the Greens to govern and doesn’t need to encourage them anymore.

    Because their agenda is toxic in the post-COVID-19 world economy. German industry is now severely disadvantaged in a world of $15-20 per barrel oil and $1.50 mcf Natural gas.

    Today the Green energy agenda makes zero sense.

    No amount of stimulus or green spending as championed by ECB President Christine Lagarde will save the European economy and political system. Moreover, the harder ball the Brits play with Barnier over a trade deal, the more they play the Swedish National Anthem game the more countries like Italy will see Brussels for the inept, dysfunctional paper tiger it is.

    And everyone may just get all those funny ideas the Brits had in 2016.

    *  *  *

    Join My Patreon if you think Wall St. spends too much time singing their own praises. Install the Brave Browser to avoid the Karens of the EU.


    Tyler Durden

    Mon, 04/27/2020 – 02:00

  • A Navy Destroyer Is Heading To Port, Crippled By Another COVID-19 Outbreak At Sea
    A Navy Destroyer Is Heading To Port, Crippled By Another COVID-19 Outbreak At Sea

    Will yet another major US Navy warship be disabled by the coronavirus pandemic like the USS Theodore Roosevelt carrier fiasco? 

    The Navy now reports its Arleigh Burke-class guided-missile destroyer, the USS Kidd has at least 33 confirmed COVID-19 cases among the crew, nearly doubling in the last few days from an initial 18 cases reported last Thursday.

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    Arleigh Burke-class guided-missile destroyer USS Kidd transits the Pacific Ocean last July, via AFP/DoD.

    The destroyer has a total crew of 350 and is currently off the Pacific coast of South America. Its mission is reportedly related to US counter-narcotics operations off coastal waters of South America.

    At least two sailors have been medically evacuated from the ship to military hospitals in San Antonio, and the destroyer has since begun returning to port for deep a disinfecting cleaning and further testing of crew.

    “The first patient transported is already improving and will self-isolate. We are taking every precaution to ensure we identify, isolate, and prevent any further spread onboard the ship,” commander US Naval Forces Southern Command and 4th Fleet, Rear Admiral Don Gabrielson, said.

    The Navy also indicated all crew have donned N95 masks and other personal protective equipment in efforts to contain the spread. 

    Furthermore an amphibious assault ship identified as the USS Makin Island has been sent to aid the USS Kidd at sea. The Makin Island reportedly has a team of naval doctors aboard, including intensive care capacity and ventilators.

    The USS Kidd plans to ramp up testing of all its crew as fears mount of another possible USS Roosevelt catastrophe. In that ongoing crisis the nuclear carrier starting late last month into April was stricken with over 850 coronavirus cases, among a crew of almost 5,000 – forcing it to dock at Guam and cut short its mission in the West Pacific.


    Tyler Durden

    Mon, 04/27/2020 – 01:05

  • Here's "Polyamory": Multi-Partner Sexual-Rights Crusade On The Horizon
    Here’s “Polyamory”: Multi-Partner Sexual-Rights Crusade On The Horizon

    Authored by John Murawski via RealClearInvestigations.com,

    It was only a few months ago that someone last treated Cassie Johns like a freak.

    During a doctor’s office visit in February, she was asked to list her emergency contacts. Johns, a preschool teacher in Seattle, wrote down two people — Chris and Joan — and identified both as her “partners.” They are two of the four romantic interests Johns has been involved with for many years.

    “‘Oh, that’s so dirty,’” Johns recalled the receptionist saying.

    “And the receptionist literally stepped back from me, in a doctor’s office.”

    Johns, 58, is a polyamorist. She follows a non-monogamous lifestyle in which multiple partners give each other consent to date and have sex with others. Johns’s longest polyamorous relationship has lasted 36 years, twice as long as her former marriage to a polyamorous man. She talks openly about her partners to her preschool students and others.

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    Scene from a recent TV episode of “House Hunters” featuring three adults searching for a home to build their polyamorous nest. Freepik/Wikimedia. Top Credit: YouTube/People TV/ HGTV

    But her forthrightness has a price.

    “I have lost jobs, I’ve lost an apartment, I’ve lost a car loan,” because of her lifestyle, Johns said.

    “I’ve lost friendly relations with neighbors.”

    Despite the acceptance of campus hook-up culture and Tinder-arranged trysts, more intentional forms of consensual non-monogamy – which can include polygamy, polyamory, open marriages, group marriages, swinging and “relationship anarchy” – are highly stigmatized. Such behavior is widely considered to be abusive, immoral, or emotionally stunted. People in such relationships not only face rudeness and public shaming, they also lack legal protections against discrimination in employment, housing and child custody disputes.

    Polyamorists distinguish their lifestyle from cheating and adultery because, they say, it hinges on the consent of all parties, and can involve unmarried people. Activists say such behavior is more common than many people presume. Some studies suggest that as many as a fifth of Americans have engaged in consensual non-monogamy at some point in their lives. The studies show that at any given time, an estimated 4% to 5% of the population is in a consensually non-monogamous relationship.

    While the coronavirus pandemic and social distancing are expected to put a temporary damper on polyamory, those numbers could rise if the social disincentives were removed – in part because some adulterers and cheaters could become consensual non-monogamists.

    Activists are moving to dismantle the legal and social barriers, and say their goals are beginning to take shape.

    They are laying the groundwork to have their cause become the next domino to fall in a long line of civil rights victories secured by trans people, gays, lesbians, women and blacks. Not too long ago, those marginalized groups were also viewed as unnatural, depraved or inferior, until negative judgments became socially unacceptable and often illegal.

    The aspirations of non-monogamists don’t sound like such a moonshot in an increasingly tolerant society where a transgender man can menstruate and experience childbirth, and Pete Buttigieg, a gay man married to another man, can make a serious run for U.S. president.

    As the topic breaks into the mainstream, some churches are beginning to grapple with the issue, and polyamorous students are forming university clubs and organizing events. Last fall polyamory got attention, some of it sympathetic, when California Rep. Katie Hill, was forced to resign over allegations she was having an affair with a campaign staffer in a “throuple” with her then-husband. A recent TV episode of “House Hunters” featured three adults searching for a home to build their polyamorous nest, and Hollywood celebrities are opening up about their polyamorous lifestyles as well.

    “There is plenty of evidence that consensual non-monogamy is an emerging civil rights movement,” said Heath Schechinger, a counseling psychologist at the University of California, Berkeley, and co-chair of the Consensual Non-Monogamy Task Force, recently created within  the American Psychological Association.

    “I’ve heard from a number of people advocating for relationship structure diversity over the past 20 years who are elated about this issue finally gaining traction.”

    Activists are already working with elected officials in more than a dozen local governments, especially in California, to expand local anti-discrimination ordinances to include a new protected class, “relationship structure,” said Berkeley psychologist and poly activist Dave Doleshal.

    Most efforts are at the informal stage but the city of Berkeley did consider a formal proposal to extend protections in housing, employment, business practices, city facilities or education to swingers, polyamorists and other non-monogamists. The proposal stalled last year amid concerns that it would have required employers to provide health insurance to numerous sexual and romantic partners outside of marriage.

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    Pro-polyamory marchers in San Francisco in 2004. Especially in California, there are moves afoot to expand local anti-discrimination ordinances to include a new protected class: “relationship structure.” Pretzelpaws/Wikimedia

    Undaunted by that setback, advocates continue to generate a body of ideas and theories that normalize non-monogamy as a form of positive sexuality — and possibly an identity — following a script followed by other marginalized groups. Their efforts have led to reassessments of non-monogamy in the psychological and legal fields, contending the relationships are emotionally healthy and ethical, and thus forging a social movement with a shared identity, shared vocabulary, shared history and a shared desire for full recognition.

    And, yes, there is already a polyamory pride flag.

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    Over the past two decades, nearly 600 academic papers have been written on the subject of non-monogamy, according to one count, including an assessment of the benefits to children in polyamorous families. Such research creates a body of scholarship to counteract ingrained social attitudes that poly advocates call prejudices and misconceptions. At the same time, the field has spawned more than 50 books, mostly written by women, said Kenneth Haslam, 85, a retired anesthesiologist and polyamorist in Durham, N.C., who helped create the polyamory history archive at the Kinsey Institute in Bloomington, Ind.

    Brian Watson, author of “Annals of Pornographie: How Porn Became ‘Bad’” (2016), is co-authoring a book on non-monogamy throughout history. He said it will feature 50 to 100 prominent figures, such as Victor Hugo and Virginia Woolf, and is deliberately modeled on earlier works about famous gay people.

    Just as women’s rights grew from feminist legal theory and LGBTQ rights from queer theory, non-monogamy is also developing its own historiography, scholarship and theoretical frameworks.

    Still, it’s not easy to pinpoint a polyamorist profile. They are less likely to identify as heterosexual or to conform to gender norms, but academic studies and anecdotal evidence don’t tell a single story. While some non-monogamists consider themselves neo-pagans, anarchists or socialists, others are libertarians or outwardly conventional suburbanites. Some studies say the lifestyle attracts more men, others say more women; some say it appeals to affluent whites, others say a polyamorist’s average annual income is under $40,000.

    In the legal arena, sympathetic scholars are arguing for the extension of legal reforms adopted in family law in recent decades in response to the continued erosion of the nuclear family, which is no longer America’s dominant family structure.

    At least a dozen states now recognize or allow for the possibility of a child having more than two parents, an accommodation for surrogate parents, grandparents, stepparents and other nontraditional families, according to a February legal article by Edward Stein, a professor at the Benjamin N. Cardozo School of Law at Yeshiva University in New York.

    These expansions of the legal concept of family are potential pathways for non-monogamous families to win legal rights of their own, Stein said. Another potential legal opening could be the existing precedents in domestic partnerships and civil unions that were set up locally for gays and lesbians before same-sex marriage was legalized nationwide in 2015. In both cases, legal victories for one group could be extended to another group, a common way that legal developments happen, he said.

    The first steps would likely have to be decriminalizing of adultery in the 38 states that don’t distinguish between consensual and non-consensual non-monogamy. The prohibition of adultery is comparable to anti-sodomy laws whose repeal by the Supreme Court in 2003 cleared an obstacle for recognizing gay marriage, Stein said.

    “I think what we will see is a lot of chipping away at the edges of some of the restrictions we put on what a family is and what a family does,” said Janet W. Hardy, who has written on polyamory for more than 20 years.

    “When the legal challenge comes – and it will – I don’t think it will be from people who identify themselves as poly. I think it will come from blended families and some of the other ways that we are reforming around the idea of family that are legally challenging.”

    One such example was a recent effort by Hartford, Conn., authorities to evict eight adults and three children living as a single family in a 6,000-square-foot mansion.

    The combined family was not polyamorous, said their lawyer, Peter Goselin, but shared financial, domestic and child-rearing responsibilities. In 2014 the city alleged a violation of its zoning rules for single-family homes, but after two years of litigation, the city dropped its case.

    The joint owners and residents of the home claimed a constitutional right to define a family. The octet’s lawsuit against the city includes a brief history of communal family living, from Iroquois longhouses, which housed up to 20 family units, to the communes, cooperatives and collective households of the 19th and 20th centuries.

    “They saw the implications of it,” Goselin said. “Privately they said to me we know this would be encouraging to a lot of people who are in polyamorous relationships.”

    Advocates say that the warnings against the perils of non-monogamy echo the now-debunked concerns about same-sex marriage.

    “All of the well-known objections made against multi-person intimate relationships can be made against same- or opposite-sex monogamy as well, resulting in an indefensible double standard,” Ronald C. Den Otter, a political science professor at California Polytechnic Institute wrote in a 2015 article in the Emory Law Review.

    “Sadly, many two-person intimate relationships are dysfunctional, and a closer, more brutally honest look at them should not inspire confidence in their superiority.”

    Once changes get under way, things can move quickly. The rise of the modern gay rights movement in the mid-20th century led to a decision by the American Psychiatric Association in 1973 to remove homosexuality from its list of mental disorders (gender dysphoria was de-pathologized in 2012). Those medical reversals are seen as analogous to the American Psychological Association’s creation last year of its Consensual Non-Monogamy Task Force, formed to destigmatize such relationships and explore changes in public policy.

    Schechinger, the task force co-chair, said it’s much easier to stereotype and hate a marginalized group when people in the normative majority operate by stereotypes and misinformation.

    “That’s part of what the task force is seeking to accomplish – to gather empirical data, promote accurate information about CNM relationships, and ask if these relationships are causing harm or are not,” he said. “And what are the implications on society for promoting a one-size-fits-all model versus promoting people being in touch with what’s the good fit for them.”

    As with the debates over human nature during the gay rights struggle, non-monogamy advocates are also raising the possibility that desiring multiple sexual partners is less a lifestyle choice and more of a sexual orientation. But there can be little doubt that non-monogamy, the norm in the animal kingdom, is natural, and that monogamy is a cultural ideal that developed in humans. 

    But the yen for sexual variety and adventure competes with an equally insistent bugbear: jealousy. And some believe that “green-eyed monster of jealousy” is the more powerful force, making it unlikely that most people could tolerate consensual non-monogamy for their partners and accept it is a social norm.

    “In the long run there’s going to be some resistance because it’s threatening to everybody else, because they recognize the desire for multiple partners is something they have, too,” said David Barash, a zoologist and a professor emeritus of psychology at the University of Washington in Seattle, and author of “The Myth of Monogamy: Fidelity and Infidelity in Animals and People” (2001).

    “They recognize it touches something within themselves that they’d rather keep hidden. And something in their partner that they don’t want to acknowledge, either.”

    Kay Hymowitz, a scholar at the conservative Manhattan Institute, is also skeptical. Her concern is the unintended harmful consequences of disrupting long-established social norms developed to ensure that men commit to rearing their own children, and that powerful, wealthy men don’t hoard women and create a deficit of available options for other males. “Normalizing consensual non-monogamy will become yet another way to ‘privilege’ male desire,” she said. “I know, I know: There are women who believe strongly in consensual non-monogamy [and who] may truly be happier in those relationships than they would be in vanilla relationships. Good for them. But they are a small minority.”

    Hymowitz said that the individual rights of polyamorists, swingers and commune members have to be weighed against the greater social interest, and that case has yet to be made.

    “You’re creating one more arrangement that will be less stable for children and less permanent,” she said. We have enough problems as it is keeping couples together.”

    Nonetheless, longer life expectancies, greater personal freedoms for women, dating apps and the internet are transforming sexual expectations and sexual opportunities, said Elisabeth “Eli” Sheff, CEO of Sheff Consulting in Chattanooga, Tenn., which specializes in sex and gender minorities, and provides expert witness services and relationship coaching. She’s also the author of the 2014 book, “The Polyamorists Next Door: Inside Multiple-Partner Relationships and Families,” based on a longitudinal study of more than 500 polyamorists.

    “We don’t live in a monogamous society. We live in a society in which people pretend monogamy is the norm,” said Johns, the Seattle polyamorist who offered the poly mantra that it’s possible to romantically love more than one friend just as it’s possible to love more than one child.

    Non-monogamy has a long history, more ancient than King David’s multiple wives and concubines in the Old Testament. Today’s non-monogamists often cite as their inspiration novelist Robert Heinlein’s treatment of the subject in his 1961 sci-fi classic “Stranger in a Strange Land.” Gay men are sometimes hailed as trend setters because they are accustomed to flexible “monogamish” marital arrangements that allow for outside dalliances.

    One of the primary texts associated with the contemporary movement is Janet W. Hardy and Dossie Easton’s 1997 “The Ethical Slut” which lays out the best practices for what advocates hold up as consensual, ethical and responsible non-monogamy.

    “I don’t think it has ever had the groundswell that it has now,” said Hardy, who now is running into polyamorous adults brought up by polyamorous parents. “A lot of us are second-generation now.”

    Poly activists point to many parallels between earlier movements that were born underground and operated under the radar: secret clubs, insider argot, referral networks for poly-friendly therapists, doctors and lawyers. The National Coalition for Sexual Freedom‘s Kink and Poly Aware Professionals referral list includes about 300 lawyers, said Susan Wright, the Baltimore-based organization’s executive director.

    The world of polyamory overlaps with the subculture of kink and BDSM, which refers to the erotic practices of bondage, domination, submission and sadomasochism. As a sign of the movement’s maturation, some now embrace the kind of middle-class respectability that made gay marriage palatable to mainstream society.

    “We’re a very boring and respectable couple!” polyamorist Carrie Ichikawa Jenkins beamed to The Chronicle of Higher Education in 2017. Jenkins, a University of British Columbia philosophy professor, has a husband and a boyfriend, both of whom teach at UBC. The Chronicle article paints a portrait of the polyamorous triad in domestic hues befitting Norman Rockwell: “On the wall hang sepia-toned photographs of someone’s relatives. On the front porch are a swing and a coffee table with an ashtray on it.”

    The civil rights concerns of the non-monogamous and other minorities are dissimilar in some ways. Unlike earlier civil rights movements, non-monogamy has the potential of affecting a majority of the population, since membership in the group is theoretically open to everyone.

    “In a way, poly is a deeper threat to the dominant culture than gay culture,” said Geoffrey Miller, a polyamorist in an open marriage and a psychology professor at the University of New Mexico.

    Miller, a member of the APA task force, compares the state of non-monogamy movement to gay rights in 1966, in the calm before the storm of the Stonewall Riots, the 1969 protests that launched the modern gay rights movement. The closeted movement had about 50 organizations in the late 1960s but exploded to 1,000 by the mid-1970s, said John D’Emilio, a retired professor at the University of Illinois, Chicago, who taught on the history of sexuality and the LGBTQ movement, and is co-author of “Intimate Matters: A History of Sexuality in America” (1988).

    Conservatives had long warned that redefining marriage to allow same-sex unions would throw open the door to allowing any kind of marriage, from polygamy to incest. Those arguments reached a crescendo when gay marriage was winding its way through the legal system, en route to the 2015 ruling by the U.S. Supreme Court to legalize same-sex marriage. In that 5-4 decision, Chief Justice John Roberts wrote a dissenting opinion warning of what was to come.

    “It is striking how much of the majority’s reasoning would apply with equal force to the claim of a fundamental right to plural marriage,” Roberts wrote.

    “Why would there be any less dignity in the bond between three people who, in exercising their autonomy, seek to make the profound choice to marry?” 

    Princeton professor of jurisprudence Robert George was among those who warned of the slippery slope. In a 2015 article, he predicted that the civil rights challenges were inevitable, but initially judges would “swat away on procedural grounds the first few constitutional challenges to marriage laws.” Gradually the legal objections will give way to the force of logical consistency.

    He told RealClearInvestigations in an email that this process is often characterized by indignant dismissal of the logical implications, followed by total capitulation.

    “Of course, advocates of revising the law denounced us not only as ‘bigots’ but as ‘scare-mongers,’” George said.

    “There was, they insisted, no ‘slippery slope’ from same-sex marriage to polyamory. The two concepts had nothing to do with each other.

    “I could see that this was nonsense — often disingenuous nonsense,” George said. “So I am not in the least surprised to see what is happening now. We have quickly gone from, ‘It will never happen,’ to ‘You’re a bigot for thinking there is anything wrong with it.’”


    Tyler Durden

    Mon, 04/27/2020 – 00:15

  • Japan Printer Go Brrr As BOJ Launches Unlimited QE, Expands Corporate Bond Buying
    Japan Printer Go Brrr As BOJ Launches Unlimited QE, Expands Corporate Bond Buying

    As was purposefully leaked last week to avoid any chance of market surprise, that giant monetary chemistry lab that is the Bank of Japan did precisely as had been reported, and on Monday morning the BOJ joined the Fed’s and announced it would launch unlimited QE, or rather that it would purchase “a necessary amount of JGBs without setting an upper limit so that 10-year JGB yields will remain at around zero percent.” Previously, the BOJ’s guideline on government debt was to increase holdings by around 80 trillion yen ($743 billion) per year, which is ironic as the BOJ was having trouble monetizing a far smaller percentage of this amount.

    While we wish Kuroda the best of luck in overtaking the Fed and ECB in nationalizing the market, we will remind the central banker that it is not an issue of monetization demand, but rather supply, that has shrank the impact of Japan’s QE on devaluing the Japanese Yen, with the annual amount of bonds purchased by the central bank declining consistently every year as there are simply not enough bonds available in the open market for the central bank to buy, and is also one of the reasons why Japan has been urged by various entities to boost its fiscal stimulus to provide the BOJ with the “helicopter money” ammo it so desperately needs to keep the Japanese economy running.

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    Monday’s decision signals that the BOJ’s concern over the pandemic has intensified quickly with Bloomberg reporting that “unlimited bond buying was not an ideal option to take, in the view of some officials, as it further narrows bank’s policy choices at a time of heightened uncertainty.” On the other hand, it underscores that central banks are now fresh out of any original ideas and will keep doubling down on policies that crashed the system until the entire fiat edifice crashes.

    As was also leaked before, the central bank also increased its scope for buying corporate bond and commercial paper by raising its ceiling on holdings to 20 trillion yen, according to its statement Monday in Tokyo.

    In keeping with the now default gibberish of the past few years, Kuroda’s central bank said it will “conduct further active purchases of both JGBs and T-Bills for the time being, with a view to maintaining stability in the bond market and stabilizing the entire yield curve at a low level.”

    The BOJ said that it would keep negative rate and yield target for 10-year JGB unchanged, and added that it will continue to closely monitor the impact of coronavirus and won’t hesitate to take additional easing measures if necessary although what the BOJ can do after launching unlimited QE while it is also massively monetizing the entire stock market- short of actively starting short squeezes – was unclear.

    As Bloomberg notes, a return to relative stability in stock markets and reduced concern over the possibility of a sudden strengthening of the yen have given the BOJ some breathing space to leave its main interest rate policy levers untouched. Furthermore, the BOJ also likely saw a need to take action before the Fed and the European Central Bank meet later this week, so as not to be seen lagging behind its peers, which too have become deranged chemical labs.

    The bank had come under increasing pressure to take more action as the declaration of a nationwide state of emergency this month brought more shutdowns and a growing need for financial support.

    The central bank also said it “expects short- and long-term policy interest rates to remain at their present or lower levels,” removing a reference to a need to “pay close attention to the possibility that the momentum toward achieving the price stability target will be lost.”

    In short, the BOJ isn’t even pretending any more that it is pursuing a “stable” 2% inflation, a goal which is now – for all intents and purposes until the arrival of currency collapse and hyperinflation – impossible to achieve. Instead the only goal now is spraying helicopter money on as much of the population as possible.

    The additional measures announced by Governor Haruhiko Kuroda also show a greater degree of fiscal-monetary policy coordination, with Prime Minister Shinzo Abe unveiling more than $1 trillion in stimulus this month and an accompanying plan to issue more bonds.

    “The BOJ must be aggressive as Japan’s virus situation is getting worse,” Yoshimasa Maruyama, chief market economist at SMBC Nikko Securities, said before today’s decision. “The BOJ will continue to be walking on a tight rope with few tools left.”

    And speaking of few tools, with the BOJ decision leaked so far in advance today’s announcement was just a formality, there wasn’t even a trace of a reaction in the market.


    Tyler Durden

    Mon, 04/27/2020 – 00:14

  • "Driving The Gringos In The White House Crazy": Iran & Venezuela Deepen Sanctions-Busting Cooperation
    “Driving The Gringos In The White House Crazy”: Iran & Venezuela Deepen Sanctions-Busting Cooperation

    Two so-called ‘rogue states’ recently targeted for US-imposed regime change are helping each other fight coronavirus as well as Washington-led sanctions. 

    Late last week it was revealed Venezuela received a huge boost in the form of oil refinery materials and chemicals to fix the catalytic cracking unit at the 310,000 barrels-per-day Cardon refinery, essential to the nation’s gas supply.

    This as a fuel and food shortage crisis has driven protests and clashes with police, especially in hard-hit rural areas, over the past month.

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    Iran’s Mahan Air jet previously seen at Simon Bolivar International Airport, Reuters/VOA.

    “Thanks to the support of our allies in the Islamic Republic of Iran… We will overcome our difficulties,” Erling Rojas, vice minister for refining and petrochemicals in Venezuela’s Oil Ministry, stated when the much-needed refinery parts arrived last Thursday.

    He further underscored in colorfully provocative rhetoric that Iran’s support is “driving the gringos in the White House crazy.”

    It’s expected such sanctions-busting cooperation will continue between the two countries, as there’s also been an uptick in planes flying directly between capitals, as Reuters reported:

    Planes flying from Tehran landed at the Las Piedras airport on the Paraguana peninsula in western Venezuela, where Cardon is located, on Wednesday and Thursday, according to data on flight-tracking service FlightRadar24 reviewed by Reuters. The planes were operated by private Iranian airline Mahan Air.

    Washington imposed sanctions on Mahan Air in 2011, saying it provided financial and other support to Iran’s Islamic Revolutionary Guards.

    Venezuela is also busy attempting to restore operations at the 146,000-barrels-per-day El Palito refinery in central Venezuela as well.

    The two sides are further said to be deepening cooperation in terms of response to the coronavirus pandemic. It’s hit the Islamic Republic far worse over the past months, while Venezuela’s numbers are deeply uncertain given what’s attributed to lack of widespread testing and transparency. 

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    The Amuay-Cardon refinery in Paraguana, located about 350 miles West of Caracas, has in recent years suffered repeat power outages, major explosion accidents, and inability to update operational equipment due to US sanctions. Image via AFP/PRI.

    Iranian state media described a major conference call between top Iranian and Venezuelean health officials where the two sides “exchanged experiences, clinical protocols and COVID-19 preventive measures in the context of the World Health Organization’s recommendations.” It followed agreements for deepening ties amid the crisis made between Presidents Hassan Rouhani and Nicolás Maduro during an April 13 phone call.

    Iran’s COVID-19 count is a over 90,000 confirmed cases, including nearly 6,000 deaths, while Venezulea officially has 323 confirmed cases and ten deaths.


    Tyler Durden

    Sun, 04/26/2020 – 23:50

  • COVID-19 Color-Revolution: California Declares Nation Statehood As Trump Moves To Quell 'Mutiny'
    COVID-19 Color-Revolution: California Declares Nation Statehood As Trump Moves To Quell ‘Mutiny’

    Authored by Joaquin Flores via The Strategic Culture Foundation,

    Bloomberg published a stunning piece on April 9th promoting the secession of California from the U.S., in an op-ed by Francis Wilkinson titled Gavin Newsom Declares California a ‘Nation-State’, which resurrected John C. Calhoun in a neo-confederate argument favoring nullification.

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    Bloomberg is part a strategy to prevent Trump from a second term by way of legal means (election), and has now brought to the fore the spectre of secession or nullification. This does not mean we should normally expect some announcement by Governor Newsom that ‘The California Republic is an independent nation-state ’. Yet amazingly, it has been almost verbatim said in this way.

    The Bloomberg article details how California Governor Newsom has begun using that term and also related legal constructions in discussing how California will manage the coronavirus response on its own.

    Imagine an alternate timeline where Trump denied there was a significant threat posed by the coronavirus and adjusted policy to reflect that. After all, the mortality rate appeared very low compared to the infection rate. Then imagine that governors Cuomo and Newsom behaved similarly to how we’ve seen them perform over the past month or so. In fact, their behavior makes even more sense in our hypothetical, alternate reality. But imagine if their punches could land because there was some semblance of a reality that could support the barrage.

    As we have made the point to communicate numerous times, 25% of Americans would like their state to secede from the United States peacefully.

    In the Event 201 exercise which appears to have been made public on YouTube, the situation of Arab Springs being a result of political blow-back from coronavirus measures, is discussed briefly using the precise phrase ‘Arab Spring’. Dealing with destabilization and messaging in that context, consumes most of the last several stages of the simulation conducted in October 2019.

    Those already familiar with the Arab Spring phenomenon as intentionally created ‘Color Revolutions’, will understand the connection between what appear as ‘bottom-up’ or grass-roots activism being coordinated covertly with dual-power structures within a country which is being targeted for regime-change. Given that the original Arab Spring was not only a Color Revolution, but used the ‘too-big-to-fail’ bailout money in 2008 to corner a market on perishable goods – prices affecting targeted countries were jacked-up, causing bread-riots and public protests. Regime-change was rarely a demand of protests, rather these related to the price of food. Foreign media like CNN and Al-Jazeera appeared to put words in the mouths of protestors and talked of revolution.

    The take-away point here is that the ‘original’ Arab Spring was a concocted development, and so references to these in what many see in Event 201 as a descriptor of allegedly ‘concocted’ events now underway, as Mike Pompeo quipped is a ‘live exercise’, are quite apt. Because these are not simply matters of what we might read into the Event 201 proceedings, but how those involved in the event understood themselves and each other.

    Having seen the repeated attempts to nullify the outcome of the 2016 election raises serious questions about the scope of the aims of the current presidency. The current president seems to provoke a highly unusual, extra-partisan and extra-political conflict that occurs no more than two or three times in a century, where it seems that sacrosanct geopolitical allegiances and long-reaching security policies risk being overturned. In our alternate time-line, we may see California moving further on the secession road and Joe Biden ‘talking sense and unity’ to California ‘President’ Newsom.

    Bloomberg Hails Calhoun’s Nullification Argument

    Here are some of the key fragments from the article which are particularly revealing:

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    We could also point to either the daily coronavirus press conferences headed by New York Governor Cuomo which have been broadcast nationally – positioning Cuomo as a sort of ‘anti-Trump’ or ‘alternate president’ – or we could point to the Atlantic’s fair treatment of the Texas secession movement in December of 2019. That piece deserves our attention, because it pins both the Texas and California secession movements as having had some Russian attention. The leader of the Texas movement makes an apology for having gone to Russia and attended a conference relating to Texas secession.

    That part is critical in terms of a broader strategy being used now against the American president. This is one where ostensibly foreign tactics used in fourth-generation warfare (4GW) to destabilize power in the U.S., or alternatively, 4GW tactics used by the U.S. to destabilize a foreign power – can be used also by a power-structure from within the U.S. to destabilize a particular and opposing other vector in the same country – in this case, the presidency.

    In a piece I authored at the Ron Paul Institute for Peace when such a tactic was tried and failed in Armenia, in what was called the ‘Electric Yerevan’, we explain how 4GW uses thousands of years-old hybrid warfare tactics combined with Baudrillardian hyper-reality simulation, and Freudian psychoanalysis to manipulate mass psychology. These are adapted to Gene Sharp and his student Srdjan Popovic’s developments on some of the ideas of Saul Alinksy on Color Revolution. With a federal government unresponsive to a public which is increasingly panicked over life and death questions, such as for example Covid-19, then a combination of conscious and subconscious themes are visible, leading towards destabilization and, in this case, secession.

    But how could such a potentially foreign-backed project like California (or Texas) seceding from the United States operate under the radar screen of the NSA?

    In short: insulating a country from foreign destabilization campaigns would reasonably involve taking over leadership of those campaigns. This means that intelligence would involve more than observation and intel gathering, but would also involve leading the organization – assumedly to frustration. But such an endeavor would equally well serve as a cover for actually operating the secession campaign towards success, if the aim was for the operating power-structure to leverage it against an opposing other vector such as the Trump presidency.

    This is how the U.S. intel was able to explain-away organizing, recruiting, and administering aspects of the Al Qaeda/ISIS project when journalists or intel officers without a need to know, would encounter evidence that this was indeed occurring.

    What we can understand from this Bloomberg piece in the broader context to be discussed in brief, is that this secessionist article is a fragment or artifact of another possible reality that appears to have been planned.

    Trump’s Counter-Strategy

    Trump showed signs as late as the end of February that he would continue to deny the reality of Covid-19 by calling some aspect of the public hype around it a DNC hoax, as we already h ad. In so doing, his political line was apparently predicted by the Deep State actors whom we may call team nullification. It seemed that Prime Minister Johnson’s ‘herd immunity’ approach and Brazil’s Bolsonaro’s  ‘hands-off’ attitude would soon be mirrored by Russia. Given that Russia now has just 47,000 cases and just three-hundred and sixty related deaths, and this is following a variation of the ‘internationally accepted’, symptoms-only method of determining Covid-19 (without an anti-bodies test), it would have made sense back then that Russia would down-play coronavirus following more realistic projections, if it would have the adverse effect of compounding economic woes and create problems for Putin.

    Just as the tanking of the economy would work against Trump, the coronavirus pandemic appeared a ‘lose-lose’ scenario for him provided that the public had a restored confidence in mainstream media reporting, stemming from its handling of the epidemic, which could be weaponized against Trump. In other words, Americans would listen to the media and what the WHO said, as orchestrated by team nullification, and lay serious blame on the ‘science-denying right-wing’ of Trump, Bolsonaro, Johnson, and Putin.

    That’s why the pre-coronavirus attacks on Trump as a ‘science-denier’ had much farther reaching designs than simply a manufactured public debate with Greta Thunberg over global warming. Remember that in the film Contagion it is deforestation that causes a bat to take residence at a pig-farm, where the novel coronavirus is born.

    What happened as things played out?

    Bolsonaro stayed with his version, and was ultimately removed from actual power by the military. This serves as a critical reminder by itself of what our ‘alternate timeline’ may have had in store for Trump, if we consider the ramifications of California making bolder moves to secede.

    Boris Johnson apparently became so ill that he ‘saw the light’ and changed UK policy towards a strict quarantine.

    Putin, however, never went for the predicted script and instead used the very low numbers relating to covid-19 to nevertheless issue a quarantine. This was a policy that somehow dovetailed with Trump’s, and was interestingly reinforced in the aftermath of their widely discussed phone call.

    History as told through FOIA may someday reveal what team nullification, pairing up with never-Trumper Bill Gates, may have tried to pull off. It really brings us back to Pompeo’s statement.  More to the point what he knew – when he knew it was a live exercise, and under what conditions it was discovered, planned, or allowed to play out – and to what degree. ‘Deep State’ Department Mike is an interesting being who can appear to act as a diplomat and consensus builder on policy between the Deep State and Trump.

    Trump bucked the probable response model that team nullification planned around.

    Instead he was very available to the needs of New York and California, and he approached his media strategy with three precise attacks.

    One, he made a commercial showing various state leaders including Cuomo and Newsom thanking the president for his availability and the scope of his response. This is shown in contrast with recent attacks disputing that the president has the authority to ‘open the country’.

    Two, he made a press-conference video showing how it was the WHO themselves who initially down-played the threat. This particular part shines in brilliance because leading up to and after Easter weekend, the vast majority of Trump supporters are what the mainstream media will no doubt soon be calling ‘covid-deniers’. This seemed to be leading up to some big announcement right after Easter from Trump that Covid-19 was a hoax, and attack WHO and defund it. But instead he was able to justify defunding WHO and bucking their predictive model, by showing how they underestimated the impact of the novel coronavirus.

    Three, he took to twitter and openly called out the Newsom/Cuomo ‘mutiny’.

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    None of these three moves happened randomly the week after Easter, but rather were aimed at countering moves on team nullification and on the part of Newsom and Cuomo, to declare that the president did not have authority over the states.

    This all happened immediately during the week of April 13th, and so the timing of the April 9th Bloomberg piece preparing the public for pro-secessionist talking points, was not random. Almost nothing is random.

    While we enter May with an in-tact government, future transpiring events will no doubt become ‘interestinger and interestinger’ as we venture further down the rabbit hole.


    Tyler Durden

    Sun, 04/26/2020 – 23:25

  • Goldman Sees Imminent "Momentum" Crash As All S&P Gains Come From Just 5 Stocks
    Goldman Sees Imminent “Momentum” Crash As All S&P Gains Come From Just 5 Stocks

    With a third of companies having reported Q1 results so far, earnings season has proven to be neither a spoiler nor a catalyst, with modest market reaction to some truly horrific numbers as investors are now ready to ignore earnings until well into 2021 when a V or U-shaped recovery is expected to kick in.

    That said, the numbers have been mixed, for anyone monitoring rather than looking through them because they are the fuzziest figures since Q1 2009 just after Lehman’s bankruptcy. While 65% of US companies that have reported beat estimates (vs 50% in Europe and Japan), this represents the worst margin in a decade.

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    Meanwhile, those hoping for some guidance will have to keep waiting as visibility from the C-suite is so poor that almost 90% of reporting companies have withdrawn guidance. Worse, the actual numbers for Q1 which caught the tail end of March as much of corporate America shut down, are coming in horrendous with US EPS of -24% yoy is coming in some 9% lower than consensus expectations, which raises questions about whether a prevailing view for rapid earnings recovery in H2 are too optimistic, as JPM cautions. On a rolling four-quarter basis, the consensus has S&P earnings surpassing pre-crisis levels by Q4 2020, which would be tough to reconcile with the JPM Economics view that GDP will not return to pre-crisis levels until after 2021, even though JPM’s Marko Kolanovic now expects new S&P500 all time highs in the first half of 2021 (using a rather ornate DCF of the entire S&P500 to justify his view).

    Which in turn brings us to something we showed two weeks ago when we noted that the “the S&P is now just a handful of mega stocks, because as the chart below shows the largest 5 stocks in S&P500 now account for 22% of market cap, even higher than during the dot com bubble.”

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    Picking up on this observation, Goldman’s David Kostin in his latest Weekly Kickstart writes that the fundamental volatility captured in 1Q earnings reports explains why stock return dispersion has jumped to the highest level since the Financial Crisis. According to the Goldman strategist, “the gap between the three month returns of the S&P 500 stock one standard deviation above the average vs. one standard deviation below the average has registered 40%, nearly twice the 10-year average of 23%.”

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    What is bizarre, is that this split in the market has occurred despite average stock correlations reaching the highest levels on record, a dynamic that would normally reduce return dispersion. One explanation for this paradoxical confluence is that record correlations have been outweighed by extreme price volatility and a wide gap between the outlooks for stocks perceived to be most vulnerable to the current economic shock (virtually all stocks except the 10 biggest ones) and those with the most resilient balance sheets and business models (mostly Microsoft, Apple, Amazon, Alphabet and Facebook).

    To validate this observation, Kostin notes that Goldman’s Strong Balance Sheet basket has returned -5% YTD while the Weak Balance Sheet basket has returned -27%.

    More confounding for so-called “stock pickers” is that not only did return dispersion rise during the market sell-off, but it has also increased during the market rebound. AS a result, many stocks that outperformed during the market sell-off have continued to outperform even with the S&P 500 retracing half of its drawdown, and nowhere is this more obvious than in the steamrolling of value stocks by “growth” names…

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    … and also of large-caps over small-caps… 

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    where the divergence is now unprecedented.

    Indeed, as shown above, as the market swooned in late February and March, investors rotated to strong balance sheets, large-caps, Technology companies, and other “quality” stocks viewed as safe havens. These stocks lagged during the first two weeks of the market rebound following its March 23 bottom but have resumed their outperformance more recently as investors remain concerned about the outlook for corporate earnings despite the boost to valuations from extraordinary policy support.

    Which brings us to what is the one concern more often cited among Goldman clients. According to Kostin, the persistent outperformance of a handful of mega-cap stocks has supported the level of the S&P 500 index but raised investor concerns about narrow market breadth.

    As Kostin puts it, “many market participants – ourselves included – have expressed incredulity at the fact that the S&P 500 trades just 17% below its all-time high amid the largest economic shock in nearly a century.”

    However, below the surface of the market, the median S&P 500 constituent trades 28% below its record high. This 11
    percentage point gap is one measure of market breadth…

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    … which now stands roughly a standard deviation below its historical average.

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    Going back to our thesis that “The Market Is Now Just 5 Stocks“, Kostin next notes that because many of the recent  outperformers had also been market leaders prior to the coronacrisis, their recent gains have led to a surge in already- elevated market concentration. While coming into 2020, the five largest S&P 500 stocks accounted for 18% of index market cap, matching the share at the peak of the Tech Bubble in March 2000, since then, those stocks (MSFT, AAPL, AMZN, GOOGL, FB) have risen to account for 20% of market cap, representing the highest concentration on record.

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    Which brings us to Goldman’s ominous warning #1: “We opined in January that the earnings power and valuations of the top five stocks suggested they could avoid the fate of the top stocks in 2000. However, the further market concentration rises, the harder it will be for the S&P 500 index to keep rising without more broad-based participation.” In other words, if the dispersion continues to soar, and if the entire upside in the S&P500 is thanks to just five stocks, not even Goldman can see a happy ending.

    If that wasn’t enough, Goldman also has an ominous warning #2, namely that sharp declines in market breadth in the past, of the kind we see now, have often signaled large market drawdowns. For example, in addition to the Tech Bubble, breadth narrowed ahead of the recessions in 1990 and 2008 and the economic slowdowns of 2011 and 2016.  This is also observed empirically, as historically sharply narrowing breadth has signaled below-average 1-, 3-, and 6-month S&P 500 returns as well as larger-than-average prospective drawdowns.

    That said, Goldman refuses to put a timeline to its dour outlook, and notes that periods of narrow market breadth can last for extended periods. Since 1980, the breadth measure charted in Exhibit 2 has indicated 14 episodes of breadth narrowing more than one standard deviation, as it does today. The median episode persisted for three months, with the longest lasting 27 months from 1998-2000.

    However, eventually, “narrow market breadth is always resolved the same way. Often, narrow rallies lead to large drawdowns as the handful of market leaders ultimately fail to generate enough fundamental earnings strength to justify elevated valuations and investor crowding. In these cases, the market leaders “catch down” to weaker peers.” This is the scenario laid out by Nomura last week in our post “Spectacular Momentum Crash” Imminent As Record Human Hedge Fund Selling Meets Furious Robot CTAs Buying.” In other cases, an improving economic outlook and strengthening investor sentiment help laggards “catch up” to the market leaders, which also results in a violent drawdown as the leaders get repriced sharply lower.

    The bottom line, however, is that in both cases, “on a relative basis the outperformance of market leaders eventually gives way to underperformance.”

    What does this mean in practical terms? As Goldman concludes, since 1980, its long/short Momentum factor has generated a median unconditional 12-month return of +400 bp “but a 12-month return of -300 bp following periods of narrow market breadth like today.” In short, while it may not necessarily be “spectacular”, Goldman agrees with Nomura that a momentum crash is dead ahead.  And with that pessimistic view, Goldman – which just two weeks ago called the “bottom” in the S&P500, has joined Morgan Stanley’s “notorious bear-turned-bull” Michael Wilson in warning that stocks are now overbought and that a “correction will begin soon.”

    Finally, Goldman has a word of hope for all those who have been crushed by the growth-over-value and large-over-small cap steamrolling: first, small-caps and laggards have outperformed coming out of every bear market and major market correction during the last 40 year. Furthermore, “in the past, wide valuation dispersion has been a strong signal for value stock outperformance over 2- and 3-year horizons but has been a much weaker indicator for short-term returns.”

    Now if only we had the same level of comfort as Goldman, that we are coming out of a major market correction instead of just enjoying a record bear market rally as shown in this chart from Deutsche Bank…

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    … before we enter the next one.


    Tyler Durden

    Sun, 04/26/2020 – 23:20

  • "We Haven't Had A Crisis Like This": Tom Barrack Says US Property Market Is In "Chaos"
    “We Haven’t Had A Crisis Like This”: Tom Barrack Says US Property Market Is In “Chaos”

    If there is one person who knows real estate, it’s Tom Barrack, and if what Tom Barrack sees in the US real estate market is accurate, a real estate crash worse than 2008 is coming.

    Speaking to Bloomberg TV, Barrack – whose Colony Capital owns a $50 billion real estate portfolio – said the US property market is in “chaos” and still on the verge of collapse because the federal government and local authorities are allowing renters and homeowners to skip payments because of the coronavirus.

    “We haven’t had a crisis like this,” Barrack said in an interview Friday on Bloomberg Television. “We’ve never had one where we just have a government taking of revenue.”

    In a move that prompted Moody’s to predict that up to 30% of all mortgages will default in the near future – one which we said presages the next crisis – the stimulus bill passed by Congress last month included a provision allowing borrowers to defer payments for as long as a year without penalty on federally backed mortgages. Meanwhile, cash flows have further collapsed as cities and states throughout the country have suspended evictions and foreclosures to help the tens of millions of Americans who’ve lost their jobs in the past 5 weeks.

    While lenders and landlords can normally use the legal system to enforce rent and interest obligations, “all those options are out the window”, Barrack said. One month ago, the Colony CEO was the first big real estate investor to warn publicly about the perilous state of the industry and to call for government intervention. He proposed an orchestrated forbearance, a “time out” in which any payments could be accrued onto leases and loans.

    And now that got much of what he was expecting, Barrack is suddenly getting second thoughts.

    Many of the measures he sought then, including market liquidity from the Federal Reserve and delays in new accounting rules, were adopted. Others, such as a halt on margin calls by banks and a suspension of mark-to-market requirements on financing arrangements, weren’t. One can imagine which ones were far more important to Colony Capital, whose portfolio – when marked to market – is imploding as a result of the sudden halt in inbound cash.

    Federal efforts such as the Paycheck Protection Program and Main Street Lending Program are “difficult to utilize” for companies like Colony, which is structured as a real estate investment trust, Barrack said. “We’re not using those,” he said. “We’re encouraging many of our borrowers and our users to rely on whatever subsidies they can get to continue to make their payments.”

    Looking at Colony’s real-estate portfolio, Barrack said its digital infrastructure investments – cell towers, data-storage facilities and fiber-optic networks – are holding up best. Retail and hospitality assets are the worst performers.

    Somewhat paradoxically, and refuting Barrack’s apocalyptic outlook, in April the number of Colony tenants who made rent payments was “amazingly good,” dropping only 3% to 5% from normal levels, Barrack said. But he expects fewer will remain current next month. 

    Barrack, who first saw property prices collapse during the savings and loan crisis of the 1980s, predicted that big companies like Colony, which he said still has “plenty of liquidity,” will survive the recession and real estate shakeout.

    “The people who’ll be crushed are the people who own the equity, the people who own bonds and debt, the pensioners,” he said. But it was his gloomy conclusion that was most jarring:

    “At the end of the day, the government is going to have to step in and subsidize it all if people don’t go back to work.”

    In other words, just like the government re-nationalized the housing sector in 2008 when it took over Fannie and Freddie, this time the government will have to do the same.


    Tyler Durden

    Sun, 04/26/2020 – 23:00

  • Pandemic Opportunities Arise For Trump But Will He Take Them?
    Pandemic Opportunities Arise For Trump But Will He Take Them?

    Authored by Tim Kriby via The Strategic Culture Foundation,

    The Coronavirus Pandemic much like any crisis, in a political sense, opens the doors for new opportunities. It seems as though governments cannot make major changes without a strong boot in the rear from some set of rough circumstances. Like it or not, political action requires a catalyst. Trump, the man who dreamt of Making America Great Again now has the big overarching excuse he needs to push his agenda onto the nation, but the question is just how can the President of the United States use this pandemic to his advantage?

    Firstly, it is important to note that there is nothing inherently morally evil in exploiting a crisis for political gains, unless you were the one who created the crisis in the first place. Again it cannot be understated, crisis is the catalyst for sweeping political action, and we shouldn’t blame anyone for striking while the iron is hot. Most people who do all the loud virtue signaling about tragedies being exploited by politicians seem to always go silent when the exploitation serves their interest.

    Let’s all put on our big boy pants and accept that politicians, can, will and probably should use opportunities from dark days so long as they were not the ones who darkened them in the first place.

    A Borderful World

    The same people who yesterday argued for an open world with no borders are the same ones who will beg for totalitarian levels of protection to “save” their lives from even the most minor of threats. This is probably why the heavy restrictions on international travel that are being put into place have so far met little to no resistance. 2020 feels like a trip back in time to a far less globalized and more local world that seems to have arisen at least semi-willingly. In this context, now is the perfect time for Trump to attack illegal immigration and migrant workers.

    Migrant labor is often very damaging to the host country, and is more often than not, also bad for the migrants themselves. It undercuts the cost of labor making locals lose their jobs only to have them given to an exploitable/expendable group of people to do them like slaves. This also allows the governments of the nations they came from to continue their sloth and ineptitude as their young/active populace has a means of finding work elsewhere and not fighting for change at home. This a lose/lose situation and Trump knows it.

    However, there is a persistent belief on the Left, that migrant labor is some kind of necessity and cannot be avoided. Some of the most extreme Liberals in America fear that the U.S. might starve without migrant labor helping out down on the farm, but is this really the case? Can America really starve to death in the 21st century without exploitable semi-slave labor?

    Apparently not, as about half of people who work on U.S. farms are still surprisingly American-born. Upping salaries to attract U.S. citizen farm hands would probably not drive up food costs anywhere near what the pro-migrant crowd would suggest. Modern farming does not require hordes of hands to get the corn on store shelves. Paying Americans a lot more to do the same job would seem to some to be non-viable under normal economic conditions, but this is a crisis, so the normal rules go out the window.

    Trump right now (especially with extremely cheap oil to compensate for labor cost increases) can prove that migrant workers were never really needed. Foreign, mostly illegal grunt workers, used to be a victim in the public’s eyes, but now they are plague carriers that can be removed with the free hand of a regulated market forcing Americans into their stead. A large part of Making America Great Again is a Living Wage and paying U.S. citizens $20 an hour to deal with beets would sure help move the country back towards greatness.

    Additionally, due to this panic, Trump could attack those who are trying to give birth to anchor babies, and increase the severity of travel bans from countries he doesn’t like. Both of these options are on the table at the moment while the virus is hot. Migrant labor was a key focus of Trump’s campaign, but there are many other aspects to closed borders that he could work with right now. A globalized America seems to be a much poorer and weaker one, this is the chance for Trump to put up the right economic “walls” to restore the country.

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    Photo: Pen strokes are much more powerful and easy to do during a national crisis.

    In Case of Fire Break China

    Trump blamed “Chy-nuh” for the virus outbreak, and he can thus blame them for America’s economic downturn, which means he is justified by bureaucratic logic to do anything he can to rid of American dependence on China. Trump has wanted to do this from day one of his presidential campaign but only now does he really have the political inertia.

    Trump says America is “winning (the) war” on the Coronavirus, which really doesn’t make any sense. How do you wage war on a virus? Then again, let him call it whatever he wants if it is going to be an excuse to re-industrialize America as if a real war was going on. Eliminating dependence on China is good for the U.S. if the virus provides the catalyst to start this process then so be it.

    It Isn’t “Welfare” If You Are Responsible For It

    Trump has already stolen some of Andrew Yang’s thunder by deciding to give money back to the taxpayers to help them survive the Covid-19 Crisis. For Conservatives, like the kind Trump claims to be, handouts and Roosevelt Era Welfare policies are seen as the devil. But, if the President were to shove Universal Basic Income down the throats of the nation it would be a massive win for the Right as it would absolve the government of many of its duties and pointless programs, and be a fantastic excuse for “small government” to be ushered in.

    If everyone gets back a $1000 or so from the government per month, then it can be legally/logically assumed that as long as the person receiving the money is sane then they have the means to take care of themselves without the State being involved. This strategy could eliminate the need for all sorts of bulky inefficient bureaucratic monstrosities like food stamps, vouchers and various forms of “assistance”. This would allow the government to vastly reduce its size as it would just throw monthly checks at the populace and let them deal with their own problems themselves, which just so happens to be part of the American Way – Personal Responsibility. And for those who waste their money, well too bad, you had your chance, the government gave you the bootstraps, you chose not to pull yourself up.

    Celebrities are Non-Essential

    Many of the media elites who hate Trump for reasons that they cannot put into cohesive arguments have found themselves to be “Non-Essential” during the crisis and have to stay home. Furthermore, the Coronavirus has helped remind society that doctors and the guys who work at grocery stores do more for society than rappers with the prefix “lil” in front of their names.

    This new glaring divide between Essential and Non-Essential labor could be very exploitable by Trump as a means to focus positive government attention on the Essentials as the backbone of his MAGA vision. It would not be surprising at all for them to receive some support from the President in the near future, especially in an election year. Two new dividing groups in American society have emerged due to the pandemic and this divide, like all divides, is exploitable and will surely be exploited by politicians.

    Taxation Is Theft Says Robin Trump

    Trump and the Republican Right hate taxes and blame them for economic stagnation. Well, the economy of the U.S. is stagnating due to the Coronavirus, so Trump really has carte blanche to go on an executive order tax slaying spree or at least propose one to his boys in Congress for them to fight for in a more constitutional way.

    It is very surprising that Trump hasn’t jumped on the “taxation is theft” mantra, but now would be a good time, any excuse to ease bureaucracy and keep Americans’ money in their pockets is urgent and justified thanks to the pandemic. Trump has the justification to kill pretty much any taxation that he sees fit.

    MAGA Time Is Now

    Obviously, real human lives have been lost to this disease internationally and that is a tragedy. No one wants their life, or the lives of their friends and family to be cut short. But the situation the world is in has the potential to create some very MAGA-ish transformations in American society if Trump is actually willing to jump on the wave and ride it out. Right now the crisis is glowing hot, the economy needs help/action, borders are now trendy again, and despite it all the U.S. is still the most powerful nation on Earth. Oh, what a lovely time it is for a charismatic President to push forward some pro-American objectives.


    Tyler Durden

    Sun, 04/26/2020 – 22:35

  • Gov. Newsom Urges "Stay Home" As Heatwave Sends Desperate Californians To Open Beaches
    Gov. Newsom Urges “Stay Home” As Heatwave Sends Desperate Californians To Open Beaches

    Tens of thousands of people flooded beaches in Southern California over the weekend as the first major heatwave of the year strikes, even as Gov. Gavin Newsom pleaded with everyone to stay home to flatten the pandemic curve. 

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    Newsom tweeted Friday: “It’s going to be nice outside this weekend. You might be feeling cooped up. Ready for life to go back to “normal.” But can’t stress this enough: CA can only keep flattening the curve if we stay home and practice physical distancing. You have the power to literally save lives.”

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    Photos and videos emerged on social media over the weekend showing Huntington Beach and Newport Beach packed with thousands of people, many of whom were ignoring social distancing rules. AP News reported at least 40,000 people visited Newport Beach on Friday alone. 

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    The influx of beachgoers comes at a time when beaches remained closed in Los Angeles and San Diego counties. Mandatory stay-at-home orders have been in place since March 19. 

    Orange Country reopened its beaches with no access to parking lots and piers amid the influx of tourists rushing to resort towns. Ventura County, about 70 miles north of Los Angeles, recently reopened beaches with no access to parking lots. 

    Brian O’Rourke, a lifeguard chief at Newport Beach, told NBC News the beach was extremely crowded this weekend.

    “We haven’t had too many issues with [social distancing] as lifeguards. Our primary mission is watching the water. We’ve had dozens of ocean rescues and hundreds of preventative actions.”

    According to a tweet from the Los Angeles Police Department Chief Michel Moore, Malibu, Santa Monica, Venice, and Dockweiler beaches were absent of people on Saturday as police enforced strict closure rules. 

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    San Diego County officials said beaches would reopen Monday to swimming, surfing, paddleboarding, and kayaking. Strict social distancing rules will be enforced, which means no sitting or lying down on the beach.

    All other beaches operated by the state will remain closed. 

    Newsom has yet to issue any plan on reopening the state’s economy and or lifting lockdown measures. 

    We noted not too long ago that resort towns in Italy could implement “plexiglass cages” on the beaches to enforce social distancing. 

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    Californians are fed up with Newsom’s plea to stay during the pandemic as the season’s first heatwave strikes. Could this be the makings of the second coronavirus wave? 


    Tyler Durden

    Sun, 04/26/2020 – 22:10

  • Diamond Offshore Files For Bankruptcy
    Diamond Offshore Files For Bankruptcy

    Once upon a time, it was the most admired offshore drilling company in the US, and a perennial LBO candidate due to its rock-solid cashflows. A little over a decade later, the cashflows are gone, and Houston’s Diamond Offshore Drilling has just filed for bankruptcy listing debts of more than $2.6 billion, blaming the “unprecedented” impact of an oil price war and the coronavirus pandemic. It joins a list of other companies that have cited the coronavirus in recent chapter 11s filings.

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

    The implosion of the company comes 10 days after it missed an interest payment on $500 million worth of bonds and said it was working with advisers on various options for its future.

    In its Chapter 11 filing filed with Houston’s bankruptcy court, the company listed $5.8 billion of assets and $2.6 billion of debt, as well as $434.9 million of cash on hand. Diamond said conditions in its “highly competitive and cyclical industry” had “worsened precipitously in recent months” and while the company had taken “various actions” to shore up its finances, including borrowing $400MM under a revolving credit facility in March, Chapter 11 bankruptcy represented the best return to stakeholders.

    Well, maybe the bondholders, as we somehow doubt the equity, which last traded at 93 cents will be delighted. Major equity holders include NYSE-listed Loews Corporation, which owns 53% of Diamond, 2,500 staff who work there, and bondholders who are owed more than $2BN.

    Diamond owns deepwater rigs that can drill in water more than two miles deep. But offshore oil is among the most expensive to produce, putting the company at a disadvantage when prices plunged to less than $30 a barrel. While newer deepwater projects are less expensive, they still take longer to develop than shale wells and they still can’t compete on costs.

    In an April 16 note downgrading Diamond’s debt to the deep junky Ca2, Moody’s said the oilfield services sector would be “one of the sectors most significantly affected” by the “severe and extensive” shock from the coronavirus pandemic, falling oil pries and asset price declines.

    “There is a high likelihood that the company restructures its debts, either through an out-of-court settlement with its creditors or through the bankruptcy process,” Moody’s analysts stressed and they were right. S&P also downgraded the company on the same day, citing “the strong likelihood the outcome will result in a selective default or Chapter 11 bankruptcy.”

    Diamond Offshore adds to the more than 200 oilpatch bankruptcies dating from 2015, according to a tally by the Haynes & Boone law firm.

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    About 2,500 jobs could be at stake at Diamond. The case is Diamond Offshore Drilling Inc., 20-32307, U.S. Bankruptcy Court for the Southern District of Texas (Houston).


    Tyler Durden

    Sun, 04/26/2020 – 21:50

  • Kadish: The US Needs To "Stop Playing The Chump"
    Kadish: The US Needs To “Stop Playing The Chump”

    Authored by Lawrence Kadish via The Gatestone Institute,

    The United States needs to stop playing the chump… For generations America has fattened up the very nations that would seek to destroy us.

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    Prior to Tokyo’s attack on Pearl Harbor, Americans bought Japanese goods, helping pay for the bombs and torpedoes that would sink the American fleet at anchor on December 7th, 1941. Japan’s sneak attack would be paid back with two nuclear strikes on Japanese cities four years later.

    Our addiction to Middle East oil helped fund the terrorists who would hijack airliners, turning them into flying missiles on the morning of September 11th. Our nation’s smart use of fracking to access enormous reserves of oil hidden under our own feet finally broke that stranglehold.

    Despite these hard won lessons, over the last twenty years America has handed China hundreds of billions of dollars every year to buy cheap goods, watched American firms ship their jobs and factories to China, and provided the Chinese with the means to create technology that threatens to eclipse our future. In the meantime, the money we sent there is allowing the Chinese to grow their nuclear arsenal and strengthen their military. In return, China has shipped us Covid-19.

    But the people of the United States are beginning to catch on to the Chinese ploy of using our money to buy their global dominance.

    A national poll finds the vast majority of Americans no longer trust Beijing. Seventy percent (70%) think the Chinese kept their Coronavirus data a secret from international healthcare professionals. In addition, 6 of 10 voters, or 59%, agree “As a result of the coronavirus pandemic, America should withdraw its manufacturing presence from China”. One-third of all voters, 31%, “strongly agree” with this statement. Only 10% “strongly disagree

    What this means is that Covid-19 has alerted Americans to the threat that faces our nation and our economic recovery. We need to suspend imports from Civilization Abusers and all enemies of democracy. We need to become and remain self- sufficient – from technology to medical supplies — so that we are never again dependent on nations that would seek to destroy us.

    It is time to stop playing the chump.

    *  *  *

    Lawrence Kadish is a real estate developer, entrepreneur, and founder and president of the Museum of American Armor.


    Tyler Durden

    Sun, 04/26/2020 – 21:45

  • US Beefs Up Gunship Presence In Gulf Ready To Back Trump's Iran 'Red Line'
    US Beefs Up Gunship Presence In Gulf Ready To Back Trump’s Iran ‘Red Line’

    American forces in the Persian Gulf have greatly bolstered their ability to respond to Iran at a moment President Trump has renewed trading threats and barbs with the Islamic Republic, ordering the US Navy “to shoot down and destroy any and all Iranian gunboats if they harass our ships at sea.”

    This includes the Pentagon bolstering its AC-130 gunships and Apache attack helicopters to target and destroy small surface threats in the Arabian Sea. Tehran has meanwhile responded with its own threats to ‘destroy’ American vessels of course.

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    Air Force AC-130W Stinger II. Image source: US Air Force

    It was apparently this beefed up presence that led to the April 15 confrontation about which Trump was responding by ordering destruction of boats that “harass” American vessels.

    Bloomberg explains that while the Pentagon has been closely monitoring Iran’s growing fleet of over 1,000 small boats in the gulf and Hormuz Strait, the US has in turn been provocatively beefing up its own presence. March and April US Navy exercises didn’t go unnoticed by Iran, however:

    The live-fire gunship exercises began in March as a first-time effort at coordination between Navy patrol coastal ships, the service’s P-8A Poseidon reconnaissance aircraft and the Air Force’s special operations AC-130 gunships, which are capable of nighttime attacks. Armed with a 30mm Gatling gun and precision-guided munitions, the famed gunships have been used to attack ground targets — but not naval targets — from Vietnam to Grenada, Panama, Bosnia, Iraq and Afghanistan.

    The US Navy is further deploying what it dubs a ‘Lily Pad’ approach, in order to better go on the attack against Iran’s expanding fleet of fast boats:

    Under the new approach, the Apaches can be stationed on the Puller, the Navy’s first specially designed floating sea base. The Puller, a destroyer and other, smaller U.S. vessels were practicing spotting targets for the Apaches and transmitting the information. The exercises continued through April 19.

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    Army AH-64 Apache helicopter during an exercise in the Persian Gulf, US Navy file image.

    One military analyst and former special assistant to naval operations, the Hudson Institute’s Bryan Clark, told Bloomberg the approach is specifically designed to “to go on the offensive against Iranian small boats, rather than simply defending against them.”

    This is as opposed to the former preferred by less effective strategy of relying purely on “deck guns and onboard helicopters, which can be overwhelmed by a large boat swarm.”

    Typically such US assets are deployed against land targets in offensive operations, but will now be used to pick off smaller targets in the contested gulf region.


    Tyler Durden

    Sun, 04/26/2020 – 21:20

  • "Coronacide"
    “Coronacide”

    Authored by Robert Gore via Straight Line Logic,

    Grasping the obvious… this was all planned beforehand.

    As the totalitarian horror unfolds before our eyes, only the willfully blind will ignore it. Only those who refuse to think will fail to grasp its implications. Only the irretrievably corrupt will embrace it.

    “The Last Gasp,” Straight Line Logic, 3/24/20

    There are a lot of blind, unthinking, and corrupt people out there. Start with virus basics.

    Viruses typically show exponential growth early on, but that cannot continue or eventually the virus would take over the entire planet and then the entire universe.

    “Basic Math,” Straight Line Logic, 3/25/20

    The Experts offered projections based on exponential growth even as their own statistics showed that growth curves were becoming non-exponential.

    Which means that many of the projections both globally and for the US, based as they are on exponential growth that no longer exists, will be off the mark by orders of magnitude. As this becomes clearer, the dictatorial types will panic and try to enact still more dictatorial measures.

    “Basic Math”

    It looks like it will be two orders of magnitude—globally from tens of millions of deaths down to hundreds of thousands and in the US from millions of deaths down to tens of thousands. If you were charitably inclined toward the Ruling Caste, you could offer the excuse that they realized their own mathematical and scientific ignorance and illiteracy and so accepted the Expert projections.

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    That is not just misplaced charity; it’s downright delusional. The Ruling Caste accepted the projections because they were the avenue to what they wanted, those “dictatorial measures.”

    So now we’re supposed to believe that the powers are regretfully eliminating what’s left of our freedoms and destroying our economy to protect us from this scourge that might kill five one-hundredths of 1 percent of our population? The notion is idiotic on its face, and could only work on a docile, emasculated, and brain-dead populace who yearns for the sterile safety of a rubber room, straight jacket, and ball gag, removed three times a day when the nice nurse spoons them their gruel. They’ll be free of want and fear…and everything else.

    ***

    The powers want absolute power, period. Their panic and police states are designed to instill and further the want and fear they say they deplore. Their stocks in trade are want and fear; they’d never eliminate them even if they could….

    “The Last Gasp”

    Mission accomplished—they have certainly instilled and furthered want and fear, allowing them to consolidate and extend their power.

    From fearful, compliant automatons the silence was deafening. Even much of the alternative media failed to ask the most basic questions, working off of medical establishment, government, and mainstream media assumptions, projections, and scare tactics.

    Perhaps the most distressing aspect of this whole ordeal is that Americans have surrendered to panic and propaganda without a shot.

    “Surrendered Without A Shot,” Straight Line Logic, 4/6/20

    The strongest and most cogent objections came from a few doctors and epidemiologists. Stanford epidemiologist John P.A. Ionnidis was one of the first. Dr. Ron Paul early on called out the coronavirus hoax.

    Unfortunately, doctors and epidemiologists also were responsible for many of the scariest projections and much of the agitation for police state measures. It’s as if the world’s auto mechanics decided that cars’ useful lives would be meaningfully extended and public safety enhanced if everyone was forced to drive 25 mph. Probably true, but think of the costs in time and money if we had to drive that slowly. The mechanics have their perspective, and doctors and epidemiologists have theirs. What’s been lacking is broader perspectives that reckon, or even acknowledge the response’s staggering costs to liberty and the economy.

    Fast forward to now. If you predict that governments’ response to the coronavirus outbreak will reveal not so hidden agendas of globalist power and domination (Why do you think they keep saying, “The world will never go back to the way it was”?), terminate the last vestiges of freedom, destroy the economy and financial markets, kill far more people than the virus itself, and set precedents for everything from enforced confinement to martial law to mandatory vaccinations to electronic money to compelled microchipped identification and surveillance whenever a group of experts makes scary projections about lethal microbes—which from now on will be almost always—you’re well on your way to being proved right on all counts.

    “Surrendered Without A Shot”

    If you still doubt that coronavirus response is intended to “terminate the last vestiges of freedom,” check out “Techno-Tyranny: How The US National Security Is Using Coronavirus To Fulfill An Orwellian Vision” by Whitney Webb.

    The tide has turned on coronavirus projections and the officially ginned up numbers. Unfortunately, it’s just going out on the economic damage from the response to the coronavirus. There’s a widespread propaganda ploy when the media refers to the carnage: they attribute it to the coronavirus and not the draconian measures enacted to address the coronavirus. So 26.5 million Americans filing jobless claims in five weeks is due to the coronavirus and not the decrees destroying the economy, closing businesses, and putting millions under house arrest. As if 26.5 million Americans are out sick rather than forcibly prevented from earning a living.

    It’s not like these measures even work. There is not an inverse relationship between the severity of isolation policies and severity of the disease. Keeping those with the disease isolated (the true definition of quarantine) makes sense, house arrest (the true definition of lockdown) doesn’t. Some countries that do not house arrest have death rates per million far lower than countries that do. Confining people to their homes keeps them away from sunlight and fresh air, whose therapeutic benefits have been known since the Spanish flu a century ago and were used to fight it. House arrest also makes it more difficult to exercise, another proven immune system and health builder.

    Isolation of the healthy also slows the development of herd immunity. Most people who are infected by the coronavirus will have few or no symptoms and will develop antibodies to it. To the extent home confinement actually prevents exposure, it also prevents herd immunity, potentially setting up a second wave of new cases during next autumn and winter’s flu season. The coronavirus will be a gift that keeps on giving to the Ruling Caste.

    For every thousand mentions of vaccines and potential vaccines against the coronavirus in the media, there is one mention of nature’s most potent defenses against viruses—the immune system and naturally acquired immunity. There’s only the tangential reference when they note that a disproportionate number of coronavirus deaths befall people with compromised immune systems.

    The logical, albeit unstated inference is that bolstering your immune system may be a more effective strategy for dealing with the coronavirus than trying to hide from it. Vitamins C and D, zinc, sunlight, fresh air, exercise, a healthy diet, and sleep are all proven immunity boosters, but there’s not much money in promoting them. The voices in the alternative media boosting those boosters—Bill Sardi, Dr. David Brownstein, Dr. Joseph Mercola—do far more good than the mainstream’s endless admonitions to stay indoors, wear face masks, and socially distance until Bill and Melinda find a profitable vaccine. Too bad the former don’t get a tenth of the attention the latter does.

    Now that the global numbers are headed the right direction, there are fewer stories reporting, analyzing, or putting them in any kind of context. Instead, we get personal interest stories to divert attention—patients and their loved ones struggling with the disease, medical heroes, and how celebrities are coping with enforced isolation and idleness. Most of the numbers stories are about spikes up in new cases or deaths in various localities and countries. There are few personal interest stories about the newly unemployed, food line standees, or the heroes trying to keep their small businesses afloat.

    The coronavirus response is infecting a global economy whose immune system is severely compromised by its addiction to debt. Like many of the coronavirus victims before infection, the economy was already on death’s door. The apparent economic growth during the recovery since the 2008-2009 financial crisis was bought with huge expansions of government, business, and personal debt, facilitated by all manner of central bank sleight of hand—quantitative easing, low or negative interests rates, and monetizing government debt. Its akin to a terminal patient kept alive by a constant drip feed of drugs.

    Interest compounds exponentially, leaving aside the central-bank created abomination of negative interest rates. Debt must be paid back or rolled over, it’s the debtor’s liability and the creditor’s asset, and it’s ultimately a claim on, and is often secured by, real assets and production. World debt is over 2.8 times world GDP. That number has been on a steady ascent, so the world is well past the point where additional debt buys growth greater than the debt. Most debt has funded consumption, which generates no economic return. Debt service was exacting its ever-increasing toll on a slowing global economy before the coronavirus made its appearance.

    And let’s not forget derivatives. The Bank of International Settlements puts the notional amount at $640 trillion—a conservative estimates, others are much higher—as of last June, or over 7.2 times world GDP. It’s often claimed that the true picture is nowhere as worrisome as suggested by the notional amount because many derivatives are offset by opposite positions. Netted out derivatives exposure is much less, more than 90 percent less. That’s all well and good until major counterparties start failing, as they did in the 2008-2009 financial crisis. Positions that were supposedly offset no longer are, and all hell breaks loose. The risk is then measured by the notional, not the netted, total, the one that’s at least 7.2 times world GDP.

    The impending financial and economic collapse as the debt and derivative daisy chains break is both obvious and inevitable. There will be no quick bounce back when we’re paroled from our pandemic prisons. The world needs all the production it can get simply to pay debt service, but the global production shut down and piles of new debt put us that much deeper in the hole. The Ruling Caste knows that debt and bailouts of parasitic but politically connected individuals and corporations make the collapse that much worse, but that’s part of the plan.

    In the Ruling Caste’s perfect world, there are two castes: theirs and everybody else—call it the untouchables, or better yet, the deplorables—impoverished, dependent, and subservient. A thriving, independent middle class—one of capitalism’s greatest creations—simply has no right to exist. It doesn’t need a Ruling Caste—reason enough to hate it—and must be eliminated. The global depression will eliminate it, as well as many of its former members. That a slave society may not be much fun for the masters has seemingly not entered into Ruling Caste calculations.

    The Ruling Caste has fine-tuned fear. It worked well with 9/11, but nineteen years later it’s obvious there aren’t terrorists under every bed. They couldn’t get what they wanted from their global warming doomsday scenarios and garbage science. Their models kept yielding erroneous predictions and they had to keep shoving the dire consequences farther into the future. The integrity of the research was severely compromised by committee science and so-called consensus conclusions, ad hoc and unexplained data adjustments, opacity where transparency was required, and private communications that undercut public pronouncements. Global warning just hasn’t lit any fires.

    Ah, but tell the public they’re at risk from an unseen virus, even if the risk of death is comparable to other viruses and is smaller for healthy people than risks we run everyday, and there you have something. They’ll let you: confine them to their houses, close their businesses, eliminate their jobs, prevent contact and communication with other people, encourage them to spy on and report their neighbors, stop them from going to church and other gatherings, and mandate social distancing and mask-wearing.

    One thing global warming has taught the Ruling Caste: confer payola, positions, and prestige on the Scientific Caste and you can get whatever Science you want. So roll out scary pandemic predictions from bought and paid for Experts and Voilà! people will hand you their livelihoods and their freedom. In that Ruling Caste perfect world, we’d grant them permission to execute us if the Experts recommended it, docilely lining up for the firing squad or gas chamber. Who are we to argue with the Experts?

    The coronavirus will fade, not even within field goal range (remember football?) of its advance billing. Expect no embarrassment from the Ruling Caste or its Experts. This is another giant step in their project to “Make the Truth Irrelevant.” They’ve found a special kind of fear. By vastly inflating a health risk, you can make people so afraid for their own safety that they’ll ignore skepticism, pertinent questions, contrary facts, any nonconforming science, other obvious truths, and their own imprisonment and ruin. All the precedents are now in place, and the Ruling Caste just has to make sure the next virus is more lethal than this one (but of course not so lethal or resistant to vaccination that it poses a danger to the Ruling Caste).

    When you can’t love, you hate. When you can’t build, you destroy. When you’re ignored, you scream. When you can’t tell the truth, you lie. When you can’t reason, you panic. When no one will follow you out of admiration or respect, you compel. When you can’t live, you kill.

    “The Last Gasp”

    As a general rule, the earlier you recognize someone is trying to kill you, the better off you’ll be.


    Tyler Durden

    Sun, 04/26/2020 – 20:55

  • "We'll Pay You To Leave" – Hawaii Wants Visitors Gone As COVID Cases Mount 
    “We’ll Pay You To Leave” – Hawaii Wants Visitors Gone As COVID Cases Mount 

    Over the last 4-6 weeks, Hawaiians have become increasingly frustrated with tourists visiting the islands during the pandemic. Many visitors are ignoring quarantine rules and have put locals at risk of contracting COVID-19. 

    Some residents have already organized protests near the Maui airport, holding signs that said: “TOURIST GO HOME,” “LEAVE OUR AINA!,” “TIME TO GO,” and “GO HOME.”

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    Now the Hawaii Tourism Authority has issued a $25,000 grant to nonprofit Visitor Aloha Society of Hawaii (VASH) to fund a program that will pay tourists who violate quarantine rules with a one-way ticket back to their home airport, reported The New York Times. 

    Since the start of April, VASH has provided 20 tourists with one-way tickets away from Hawaii, sending travelers back to Guam, Alabama, and Colorado. Many of these folks were violating quarantine rules. 

    “The majority of travelers we have sent back, in my opinion, have been irresponsible in traveling to Hawaii during the Covid-19 pandemic when they know we are trying to keep Hawaii safe from the spread of this disease,” said Jessica Lani Rich, the president and chief executive of VASH.

    With beaches closed and the tourism industry ground to a halt, new tourist arrivals have plunged 99%. Many locals are riding out the virus storm at their homes while tourists are playing on beaches and hiking trails. 

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    “They either don’t get or are ignoring the message,” Lynne Matusow, a Honolulu resident told The Times. “We have locals, in masks, scolding them for sitting on beaches, with towels, umbrellas, coolers, etc. That is forbidden.”

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    Rich said many of those who VASH returned home were taking advantage of pandemic pricing for airfare that was super cheap. She said a roundtrip ticket from Oakland, California, to Honolulu was around $238. 

    “I see maybe one or two tourists a day,” said Ryan Houser, a restaurant “fish sommelier” and Waikiki resident, saying, “it’s a little offensive” when tourists go on the beach and ignore social distancing rules while locals stay at home. 

    “Our residents had to close their businesses and have financial hardships and to have people come here right now and want to vacation, it is reckless,” said Rich.

    Hawaii’s economy collapsed when the tourism industry shut down on March 17 to mitigate the spread of the virus. On Saturday, quarantines in Hawaii were extended through the end of May. 

    Strict social distancing rules in the state have kept cases lower versus other states. On Sunday, there were 604 cases with 14 death.


    Tyler Durden

    Sun, 04/26/2020 – 20:30

  • "China Did A Lot Of Things Right": Bill Gates Defends CCP, Slams America Over Handling Of Coronavirus
    “China Did A Lot Of Things Right”: Bill Gates Defends CCP, Slams America Over Handling Of Coronavirus

    Bill Gates vehemently defended China’s initial response to the coronavirus outbreak on Sunday, telling CNN’s Fareed Zakaria that the communist country – which silenced whistleblowers and lied about transmissibility – “did a lot of things right.”

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    “How would you respond to the charge that hte Chinese covered this up. They’ve essentially deceived the rest of the world, and as a result, they should be held in some way responsible for this?” asked Zakaria.

    To which Gates responded: “Well, I don’t think that’s a timely thing because it doesn’t affect how we act today. You know, China did a lot of things right. At the beginning, like any country where a virus first shows up, they can look back and say that they missed some things,” Gates said, adding “Some countries did respond very quickly and get their testing in place, and they avoided the incredible economic pain – and it’s sad that even the US that you would have expected to do this well, did it particularly poorly – but it’s not time to talk about that.“

    Gates then suggested that this is the time “to take the great science we have, the fact that we’re in this together, fix testing and treatments and get that vaccine, and minimize the trillions in dollars and many things that you can’t even dimensionalize in economic terms that are awful about the situation that we’re in.

    “That’s a distraction,” Gates added, regarding placing the blame on China. “I think there’s a lot of incorrect and unfair things said.“

    Watch:

    We wonder why Bill Gates – one of the largest donors to the World Health Organization – is similarly defending China, which is also one of the WHO’s largest contributors.

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    Tyler Durden

    Sun, 04/26/2020 – 20:21

  • "We Are Moving Into The End-Game": 27 Tankers Anchored Off California, Hundreds Off Singapore As Oil Industry Shuts Down
    “We Are Moving Into The End-Game”: 27 Tankers Anchored Off California, Hundreds Off Singapore As Oil Industry Shuts Down

    Back in the late fall of 2014, when Saudi Arabia broke up OPEC for the first time and unleashed a torrent of crude oil on the world despite the protests of its fellow cartel members, oil prices crashed as a result of what then seemed to be a “calculated” move by Riyadh which hoped to put US shale out of business amid a flawed gamble betting that shale breakeven prices were around $60-80. They, however, turned out to be much lower, which coupled with Saudi misreading of the willingness of junk bond investors to keep funding US shale producers, meant that despite a 3 years stretch of low oil prices, US shale emerged stronger than ever before, with the US eventually eclipsing both Saudi Arabia and Russia as the world’s biggest crude oil producer.

    Fast forward to March 2020, when Saudi Arabia doubled down in its attempt to crush shale, only to avoid angering long-time ally Donald Trump, the Crown Prince pretended that the latest flood of oil was an oil price war aimed at Moscow not Midland. And this time, unlike 2014, with the benefit of the global economic shutdown resulting from the coronavirus pandemic, the Saudis may have finally lucked out in the ongoing crusade against US oil, because as Bloomberg writes with “negative oil prices, ships dawdling at sea with unwanted cargoes, and traders getting creative about where to stash oil”, the next chapter in the oil crisis is now inevitable: “great swathes of the petroleum industry are about to start shutting down.”

    As the recent OPEC summit so vividly demonstrated, the marginal price of oil is no longer determined by supply or cuts thereof (such as the recently announced agreement by OPEC+ for a 9.7mmb/d output cut), but rather by demand, or the lack thereof, which according to some estimate is as much as 36mmb/d lower, or roughly a third of the global oil market every day, as billions of people are stuck at home instead of driving, while major corporations mothball production in a world where major economies have ground to a halt.

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    The economic impact of the coronavirus has ripped through the oil industry in dramatic phases, Bloomberg’s Javier Blas writes. First it destroyed demand as lockdowns shut factories and kept drivers at home. Then storage started filling up and traders resorted to ocean-going tankers to store crude in the hope of better prices ahead.

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    Now shipping prices are surging to stratospheric levels as the industry runs out of tankers, a sign of just how distorted the market has become.

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    Ironically, in its latest attempt to kill off shale, Saudi Arabia may have gone a step too far, as “the specter of production shut-downs – and the impact they will have on jobs, companies, their banks, and local economies – was one of the reasons that spurred world leaders to join forces to cut production in an orderly way. But as the scale of the crisis dwarfed their efforts, failing to stop prices diving below zero last week, shut-downs are now a reality. It’s the worst-case scenario for producers and refiners.“

    In short, the entire oil production industry is shutting down, not because it wants to – of course – but because it has no choice. According to Goldman, in as little as three weeks there will be literally no place left on earth to store oil, and unless oil producers want to pay “buyers” to hold the oil as happened on that historic date of April 20, they have no choice but to shut in output. 

    “We are moving into the end-game,” said Torbjorn Tornqvist, head of commodity trading giant Gunvor Group. “Early-to-mid May could be the peak. We are weeks, not months, away from it.”

    Which brings us back to why in 2020 Riyadh has succeeded where it failed in 2014: as Bloomberg writes “in theory, the first oil output cuts should have come from the OPEC+ alliance, which earlier this month agreed to reduce production from May 1. Yet after the catastrophic price plunge on Monday, when West Texas Intermediate fell to -$40 a barrel, it’s the U.S. shale patch that is leading”

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    The best indicator of how the shale industry is reacting is the sudden collapse in the number of oil rigs in operation, which last week fell to a four-year low: “Before the coronavirus crisis hit, oil companies ran about 650 rigs in the US. By Friday, more than 40% of them had stopped working, with only 378 left.”

    And while there is a delay between total US oil production and the rig count, it is now obvious that US production is set to collapse next:

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    “Monday really focused people’s minds that production needs to slow down,” said the co-head of oil trading at commodity merchant Trafigura. “It’s the smack in the face the market needed to realize this is serious.” Incidentally, Trafigura, one of the largest exporters of US crude from the U.S. Gulf of Mexico, believes that output in Texas, New Mexico, North Dakota and other states will now fall much faster than expected as companies react to negative prices…

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    … evidence US commercial storage space for physical at Cushing has run out with what inventory is left having been called for – which have persisted for several days last week in the physical market.

    Until prices collapsed on Monday, the consensus was that output would drop by about 1.5MM barrels a day by December. Now market watchers see that loss by late June. “The severity of the price pressure is likely to act as a catalyst for the immediate turndown in activity and shut-ins,” said Roger Diwan, oil analyst at consultant IHS Markit Ltd.

    As detailed last week, this price shock has been especially acute in the physical market where producers of crude streams such as South Texas Sour and Eastern Kansas Common had to pay more than $50 a barrel to offload their output last week.

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    And so the US industry is finally shutting down as ConocoPhillips and shale producer Continental Resources have all announced plans to shut in output. Regulators in Oklahoma voted to allow oil drillers to shut wells without losing leases; New Mexico made a similar decision. Even North Dakota, which for years was synonymous with the U.S. shale revolution, is witnessing a rapid retrenchment, as Bloomberg notes that “oil producers have already closed more than 6,000 wells, curtailing about 405,000 barrels a day in production, or about 30% of the state’s total.”

    However, it won’t be just the US: output cuts can be seen from Chad, a poor and landlocked country in Africa, to Vietnam and Brazil, producers are now either reducing output or making plans to do so. “I wouldn’t want to get sensational about it but yes, clearly there must be a risk of shut-ins,” Mitch Flegg, the head of North Sea oil company Serica Energy, said in an interview. “In certain parts of the world it is a real and present risk.”

    In emergency board meetings last week, oil companies small and large discussed an outlook that’s the most somber any oil executive has ever witnessed. For the small firms, the next few weeks will be all about staying afloat. But even for the bigger ones, like Exxon Mobil Corp. and BP Plc, it’s a challenge. Big Oil will offer an insight into the crisis when companies report earnings this week.

    Then on Friday, May 1, Saudi Arabia, Russia and the rest of OPEC+ will join the output cuts, slashing their output by 23%, or 9.7 million barrels a day. Saudi Aramco, the state-owned company has already cut production, and Russian oil companies have announced exports of their flagship Urals crude would drop in May to a 10-year low.

    And yet, as warned here repeatedly, it may still not be enough, as every week, another 50 million barrels of crude are going into storage, enough to fuel Germany, France, Italy, Spain, and the U.K. combined, with estimates that the world will run out of land-based storage some time in late May or early June. Meanwhile, what’s not stored onshore, is stashed in tankers. As Bloomberg’s Blas points out, the U.S. Coast Guard on Friday said there were so many tankers at anchor off California that it was keeping an eye on the situation.

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    But if the two dozen or so tankers piled up off the coast of California is bad…

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    … and those next to Galveston, TX is worse…

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    … what is going on in that tanker parking lot off of Singapore is absolutely insane.

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    There is some good news: oil traders say after plunging by a third, US oil consumption has probably hit a bottom, and will start a very gentle recovery, although that also depends on how fast the US economy can reopen from the coronavirus coma.

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    But before even a modest recovery takes hold, the great shutdown will spread through oil refining too. Over the past week, Marathon Petroleum, one of the biggest U.S. refiners, announced it would stop production at a plant near San Francisco. Royal Dutch Shell has idled several units in three U.S. refineries in Alabama and Louisiana. And across Europe and Asia, many refineries are running at half rate. U.S. oil refiners processed just 12.45 million barrels a day on the week to April 17, the lowest amount in at least 30 years, except for hurricane-related closures.

    The closures have already sent thousands packing: the oil and gas industry shed nearly 51,000 drilling and refining jobs in March, a 9% reduction that will only get worse in April. March’s job losses rise by 15,000 when ancillary jobs such as construction, manufacturing of drilling equipment and shipping are included, according to BW Research Partnership, a research consultancy, which analyzed Department of Labor data combined with the firm’s own survey data of about 30,000 energy companies.

    “We’re looking at anywhere between five and seven years of job growth wiped out in a month,” Philip Jordan, the company’s vice president said in an interview. “What makes it sort of scary is this really is just the beginning. April is not looking good for oil and gas.”

    And so, as the oil industry shuts down – at least for a few weeks (or perhaps months) – more refinery shutdowns are coming, oil traders and consultants said, particularly in the U.S. where lockdowns started later than in Europe and demand is still contracting. Steve Sawyer, director of refining at Facts Global Energy, said that global refineries could halt as much as 25% of total capacity in May.

    “No one is going to be able to dodge this bullet.”


    Tyler Durden

    Sun, 04/26/2020 – 20:05

  • Coronavirus Deaths Likely 60% Higher Than Official Numbers Reflect, FT Finds
    Coronavirus Deaths Likely 60% Higher Than Official Numbers Reflect, FT Finds

    As experts try to model the true number of coronavirus deaths, and some random ‘surveillance’ studies have suggested that – at least in some badly hit areas – the number of confirmed coronavirus cases might be many multiples of the official count, the FT has published its latest attempt at trying to ‘model’ the true coronavirus death toll.

    The FT used a fairly straightforward methodology: the paper took data on national death tolls over a certain stretch of time going back five years, calculated the mean for each country, then compared that figure to the number of deaths reported during the same time period in 2020.

    To calculate excess deaths, the FT has compared deaths from all causes in the weeks of a location’s outbreak in March and April 2020 to the average for the same period between 2015 and 2019. The total of 122,000 amounts to a 50 per cent rise in overall mortality relative to the historical average for the locations studied.

    The difference between the average from the past five years and the 2020 number is, roughly, the number of deaths caused by the coronavirus (by far the biggest differentiating factor). Across countries in the developed world, the FT found 122,000 deaths ‘in excess’ of normal levels. That’s compared with ~77k reported coronavirus deaths. If the FT’s methodolgy checks out, that would mean coronavirus deaths have been 60% higher than official statics reflect – at least in the developed world.

    The death toll from coronavirus may be almost 60 per cent higher than reported in official counts, according to an FT analysis of overall fatalities during the pandemic in 14 countries. Mortality statistics show 122,000 deaths in excess of normal levels across these locations, considerably higher than the 77,000 official Covid-19 deaths reported for the same places and time periods. If the same level of underreporting observed in these countries was happening worldwide, the global Covid-19 death toll would rise from the current official total of 201,000 to as high as 318,000.

    The only country that showed almost now deviation between ‘excess deaths’ and the number of confirmed coronavirus cases was Denmark.

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    Source: FT

    The gulf between the ‘official’ coronavirus death toll and the ‘excess mortality’ rate tabulated by the FT. was widest in the emerging world. In some places, the difference was ~100x (that’s 100x not 100%). Officials reported roughly 250 deaths due to the virus, but the number of ‘excess’ deaths was 10,200 in Ecuador’s Guayas Province.

    In Ecuador’s Guayas province, just 245 official COVID-19-related deaths were reported between March 1 and April 15, but data on total deaths show that about 10,200 more people died during this period than in a typical year – an increase of 350 per cent.

    If we assume that every single ‘excess’ case calculated by the FT is representative of a single case of COVID-19 (not exactly a scientific assumption, but fair enough for an estimate…), then we can compare which provinces, states and countries were most badly impacted. According to the FT, the region surrounding the Italian city of Bergamo suffered a much more severe outbreak than New York State.

    In the northern Italian region of Lombardy, the heart of Europe’s worst outbreak, there are more than 13,000 excess deaths in the official statistics for the nearly 1,700 municipalities for which data is available. This is an uptick of 155 per cent on the historical average and far higher than the 4,348 reported Covid deaths in the region. The region surrounding the Italian city of Bergamo registered the worst increase internationally with a 464 per cent rise in deaths above normal levels, followed by New York City with a 200 per cent increase, and Madrid, Spain, with a 161 per cent increase.

    The FT isn’t the only financial news organization to try and determine by how much some countries are underreporting cases and deaths linked to the novel coronavirus.

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    Source: FT

    Bloomberg on Sunday reported that the number of severe respiratory infections reported in Mexico over the past two months, coinciding with the end of flu season, were up more than 50% compared with last year. Experts working for the Mexican government quietly told Bloomberg that the increase is likely 100% attributable to the virus.

    Severe acute respiratory infections in Mexico spiked 50% this season compared with a year ago, almost certainly all due to coronavirus, suggesting that government figures on Covid-19 cases are far too low.

    In the most recent week, health ministry data show, Mexico registered 12,000 new cases of such respiratory infections, versus 671 in the same period a year ago.

    “Of course that jump in cases is Covid-19, because influenza is on its way out this time of year,” said Alejandro Macías, the former national commissioner for influenza in Mexico during the H1N1 outbreak. “There’s no doubt.”

    To be sure, the FT doesn’t question the general trends displayed in global data – well, at least not in developed countries like the US and Italy. But it’s just the latest reminder that armchair experts claiming that the true mortality rate for the virus is actually a small fraction of a percent are likely also gravely underestimating the total number of deaths that have gone underreported.

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    This just means that the grainy videos released by brave Wuhanese during the early days of the outbreak remain the most reliable indicators of what the novel coronavirus is capable of if left unchecked.

    Though they’ve been wiped from the Chinese Internet, millions around the world witnessed the videos of dead bodies of the elderly in the streets, hospital hallways packed with the doomed, pandemonium, chaos – and Party officials firing up the crematorium out back.


    Tyler Durden

    Sun, 04/26/2020 – 19:40

Digest powered by RSS Digest

Apr 26

Today’s News 26th April 2020

  • Pandemic Exposes Liberalism's Free Trade, Open Borders Road To National Suicide
    Pandemic Exposes Liberalism’s Free Trade, Open Borders Road To National Suicide

    Authored by Martin Sieff via The Strategic Culture Foundation,

    Open Borders and Free Trade induce national suicide slowly and gradually, without the victims waking up to what is going on until it is too late. But the coronavirus has brought home with global clarity that human societies need governments and regulated borders for their own survival.

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    The bottom line is clear, societies that have had open borders to previous major centers of infection and transmission, like Iran and Italy which kept open strong flows of people to and from China in the early stages of pandemic, suffered exceptionally badly.

    Countries obsessed with maintaining liberal values and open borders like France, Germany, the United Kingdom and the U.S. also suffered disproportionately.

    Countries that have allowed their domestic industry to decay have found they cannot now produce the crucial equipment they need, from respirators to gas masks. Countries with strong manufacturing bases like China, or with a prudent nationalist sense of preparing ahead for emergencies like Russia, have done far better. The shortage of respirators in Britain has become more than a national scandal: It is a national shame. That is another inexorable consequence of the pernicious doctrine of Free Trade.

    I documented this history in some detail in my 2012 book “That Should Still Be Us“.

    There, I showed how even the French Revolution of 1789 was in fact triggered by the catastrophic Free Trade Treaty that hapless King Louis XVI approved with England only three years before. It led immediately to the worst economic depression in French history which triggered revolution. In three years, liberal Free Trade succeeded in destroying a society that had flourished for a thousand years and the most powerful state Europe had known since the fall of the Roman Empire.

    In his classic television series and accompanying book “How the Universe Changed”, the great British broadcaster and historian James Burke showed how the discipline of statistics was responsible for discovering the way the cholera bacteria spread through contaminated water in 19th Century London, then the largest urban area ever experienced.

    Today, we see a similar pattern in the spread of the coronavirus: While half the counties in the United States remain so far virtually free of the virus, infections have soared in most major metropolitan areas, especially in so-called Sanctuary cities. Invariably these centers are ruled by liberal Democrats where illegal immigrants congregate. They are the places where the values and consequences of Free Trade and Open Borders most clearly flourish. And they ar ealso the places where the terrifying costs of those policies are most evident as well. The chickens have come home to roost.

    Countries like Russia and China itself, which have reacted most quickly and decisively to shut down international and domestic travel, have been able to keep their numbers of infections and rates of spread down.

    In Europe, by contrast, the impact of the virus has been appalling, The European Union has been as useless as New York City Mayor Bill de Blasio,. Pro-EU liberal national leaders like President Emmanuel Macron in France and the venerable Chancellor Angela Merkel in Germany (Berlin’s version of Nancy Pelosi) just sat back in bemused silence till it was too late. In Italy and Spain, the political splintering of societies has woefully added to the chaos.

    This is in fact a very old lesson indeed: The ruling elites of the world should not have had to relearn it.

    But for more than 225 years, the ruling elites of the West have mindlessly embraced Open Borders and Free Trade. Yet these have always been mere assertions of prejudice and mindless faith: They have never been proven to be true in any scientific manner.

    Instead, when we look at the factual evidence of economic history over the past two centuries, it has always been the case that developing industrial societies which protect their manufactures behind strong tariff barriers flourish with enormous foreign trade and balance of payments surpluses. Then the living standards of their people soar.

    In contrast, free market societies too powerless, or just too plain dumb to protect their economic borders get swamped by cheap manufactures and their domestic industries get decimated. This was the case with liberal free market Britain caught between the rising Protectionist powers of the United States, Japan and Germany for the next century.

    It has been true for the decline of American industry since the 1950s, the more the United States embraced global free trade, the more its own domestic manufactures and their dependent populations suffered. This never bothered the liberal intellectual elites of the East and West Coast at all. It still doesn’t. Having inflicted lasting ruin and despair on hundreds of millions of people for generations, they despise their victims as “deplorables”  for crying out in pain and seeking to end the disastrous policies.

    Russia suffered the full horrors of the merciless laissez-faire, unregulated Free Market policies of the liberal West in the 1990s. Boris Yeltsin never woke up to the catastrophe that Bill Clinton and Larry Summers were inflicting on his country. Over the past two decades, Russia’s recovery from that Abyss under President Vladimir Putin has been miraculous. National social responsibility has succeeded where the crazed, simplistic theories of Adam Smith, David Ricardo and Ayn Rand all palpably failed.

    The coronavirus pandemic therefore should serve as a wake up call to the peoples of the West, what Thomas Jefferson memorably called “A Fire Bell in the Night.” They need to start following Russia’s examples of self reliance, prudent preparation and maintaining strong borders.

    The ravages of Liberalism – its Open Borders and Free Markets – have already stripped the West of all its defenses, social, demographic, industrial and economic.

    The West is out of time: The Audit of Pandemic has been taken, and the reckoning is now due.


    Tyler Durden

    Sun, 04/26/2020 – 00:00

  • Unprecedented Pace Of Corporate Debt Issuance Has Crippled Corporate Fundamentals
    Unprecedented Pace Of Corporate Debt Issuance Has Crippled Corporate Fundamentals

    When the Fed breached a monetary taboo even Ben Bernanke did not violate when Jerome Powell announced last month he would buy investment grade bonds, it was clear that the Fed’s only solution to avoiding the bursting of the corporate debt bubble was to make it even bigger. And sure enough, the Fed’s explicit backstop of the bond market has meant the supply of IG bonds has set a record pace in 2020. According to Morgan Stanley, IG supply has totaled $693 billion through mid-April, up a staggering 63% y/y…

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    … with $435 billion pricing since the beginning of March alone. March supply set an all-time record at $264 billion, breaking the prior record by over $80 billion and a further $170 billion in the first half of April. To put that in perspective, the March total surpasses the prior record for the busiest month (January 2017) by over $80 billion. Issuance just in the first half of April already ranks in the top five busiest months on record. Four of the top 10 busiest weeks on record have occurred since the beginning of March, with the week of March 30 ranking as the busiest ever, at $118 billion of issuance.

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    All to say that this was truly an unprecedented pace. Year-to-date through April 17, total supply of $693 billion is tracking 63% ahead of last year.

    And confirming what we said a month ago in “Bond Market Tears In Two“, issuance has been heavily skewed toward high-quality issuers, with issuance rated “A” making up 57% of supply from the beginning of March onwards, for obvious reasons: these are the bonds that will find a willing buyer in the Fed via Blackrock’s purchases of the LQD ETF. Drilling down, consumer Discretionary companies have raised the most new debt financing when combined with revolver draws.

    Of course, the Fed’s enabling of this epic bond bubble burst would have been impossible without the coronavirus crisis: the pandemic has produced an unprecedented market shock, with issuers experiencing an extremely sharp drop in earnings, without clarity on when the economy will begin to recover. Indeed, IG issuers have tapped financing wherever possible, including drawing on revolvers. Through April 20, IG issuers had tapped $134 billion in revolvers, putting combined bond issuance and revolver draws at $568 billion since the beginning of March.

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    And while trends in the use of those proceeds point to companies using debt issuance to shore up liquidity, the IG issuance momentum has been so powerful, companies have been using corporate bonds to refi some of the revolver draws in recent weeks, as we reported last week.

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    So while it is obvious by now that the Fed’s actions have triggered a tidal wave of new corporate debt issuance, one which will make the corporate sector scream for a bailout during the next, even bigger crisis, and the Fed will gladly bend over backwards yet again, what is perhaps more interesting is the fact that IG issuance tends to spike before or right at the
    start of a recession, according to Morgan Stanley.

    Looking at the period right before the early 2000s recession, trailing three-month issuance spiked in the same quarter that the recession started (1Q01). Similarly, issuance rose in the first-half of the recession surrounding the global financial crisis (peaking in 2Q08). As shown in the next two charts, in both instances issuance from “problem” sectors rose – Telecom in the early 2000s and Financials during the crisis. In the early 2000s recession, Consumer Discretionary issuance also rose sharply in the first quarter. However, in both cases, issuance did slow meaningfully from the peak for the remainder of the downturn, before returning to a more normal run-rate as the economy recovered.

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    All of which leads us to the last question: what impact will all this issuance have on corporate fundamentals? Net of maturities, calls,and tenders, Morgan Stanley estimates net bond issuance for 2020 YTD to be about $400 billion. Including the draws that IG issuers have made on their revolvers, net issuance rises to ~$535 billion. To estimate how this level of issuance could impact leverage, the bank then takes its usual subset of US, non-financial companies in the IG index with publicly available data,and extrapolate from 4Q19 fundamentals. Across this subset of ~375 companies, net issuance has totaled about $314 billion when including revolver draws. These issuers had median leverage of 2.38x at the end of 2019.

    Assuming flat EBITDA, the increase in debt alone could push gross leverage +0.13x higher. However, a severe shock to the EBITDA of these companies is now assured. As such, incorporating shocks to LTM EBITDA of 10-25% shows leverage could increase by +0.41x, to nearly 1.0x year. Overall, these results suggest that leverage peaks during or after a recession when earnings fall.

    In summary, leverage is likely to rise across sectors.

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    The Consumer sectors could see the largest increase in leverage, followed by Materials and Industrials sectors. Health Care is the least impacted sector, with significantly less net issuance YTD than the others.

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    And so, as companies flood the market with new debt, they plant the seeds of their own overlevered demise, because while the Fed has made it frightfully easy for IG corporations to issue an unprecedented amount of debt, by doing so it has merely doomed even the most solid credits to a painful day of reckoning, one where they will have more net debt than ever, effectively assuring another avalanche of downgrades – many straight to junk – either in the current crisis, should its duration persist beyond worst case estimates, or in the next one, when the Fed will have no choice but to buy all the outstanding corporate debt.


    Tyler Durden

    Sat, 04/25/2020 – 23:33

  • Visualizing How COVID-19 Has Impacted Media Consumption, By Generation
    Visualizing How COVID-19 Has Impacted Media Consumption, By Generation

    As the coronavirus outbreak continues to wreak havoc across the globe, people’s time that would have otherwise been spent perusing malls or going to live events, is now being spent on the sofa.

    During this period of pandemic-induced social isolation, Visual Capitalist’s Katie Jones notes it’s no surprise that people are consuming vast amounts of media. Today’s graphics use data from a Global Web Index report to explore how people have increased their media consumption as a result of the outbreak, and how it differs across each generation.

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    More Time to Kill

    Global Web Index found that over 80% of consumers in the U.S. and UK say they consume more content since the outbreak, with broadcast TV and online videos (YouTube, TikTok) being the primary mediums across all generations and genders.

    Unsurprisingly, 68% of consumers are seeking out pandemic updates online over any other activity. Gen Zers however, have other plans, as they are the only generation more likely to be listening to music than searching for news.

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    Overall, younger generations are more likely to entertain themselves by playing games on their mobile or computer. Millennials also stand out as the foodie generation, as they are the most likely to be searching for cooking recipes or reading up on healthy eating.

    Leaning on a Pillar of Trust

    Across the board, consumers view the World Health Organization (WHO) as the most trusted source of information for any COVID-19 related updates.

    This isn’t true everywhere on a regional basis, however. For example, while U.S. consumers trust WHO the most, UK consumers view their government as their most trusted news source overall.

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    Trust in information shared on social media is higher than word of mouth from friends and family, and even foreign government websites. That said, it is lower than information shared on the radio or news websites.

    The Need for Pandemic Positivity

    While staying abreast of pandemic updates is important, ultimately, a positive mindset and the ability to switch off will help people cope better day-to-day.

    Therefore, it seems reasonable that people are more inclined to invest in new subscription services since they have been in isolation, with almost one-third of Gen Zers considering purchasing Netflix, followed by Disney+.

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    Understandably, people are becoming increasingly worried about how much time they are dedicating to their screens. However, research suggests that screen time itself is no cause for concern. Rather, it’s the content we choose to consume that could have a significant impact our psychological well-being.

    Perhaps most intriguingly, the TV shows and movies that are increasing in popularity on Netflix are about pandemics – which could signify the need for people to fictionalize the chaos we find ourselves in.

    Regardless of what type of content we are consuming, the fact is that every generation is relying on their devices during this pandemic to inform and distract more than ever before, creating a huge opportunity for media companies to engage a captive audience.


    Tyler Durden

    Sat, 04/25/2020 – 23:30

  • Twitter CEO Unveils Feature To "Editorialize" Trump's Tweets As Election Looms
    Twitter CEO Unveils Feature To “Editorialize” Trump’s Tweets As Election Looms

    Authored by Cindy Harper via ReclaimTheNet.org,

    A handful of companies are controlling the majority of the world’s conversations, subtly introducing rules to close the gap of what ideas they find acceptable and slowly edging out those they don’t.

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    One of the most prominent ways that tech companies have been doing that, of late, is the result of realizing that they get ample media support and can stay in the good graces of legacy media outlets when they censor content for being “misinformation.”

    The guise of protecting the world from “misinformation” is fast becoming the easiest justification for censorship online right now.

    Twitter has been one of those companies most accused of negatively impacting the public conversation and pushing for censorship.

    Twitter CEO Jack Dorsey talked about this in a livestream with Showtime hosts Desus Nice and The Kid Mero.

    “Misleading information is like the challenge of our industry right now,” Dorsey said in the Periscoped stream.

    The hosts were eager to discuss what Dorsey had in mind for punishing those who say things that is deemed to be “misinformation.”

    The example they gave is, what would happen if President Trump tweeted “potentially harmful” statements about the coronavirus?

    Dorsey responded that “labeling would come in really handy,” and talked about Twitter’s recent policy announcement that is aimed to tackle the tweets of public leaders.

    “When it’s broadcast on television, you have no ability to talk back,” Dorsey said, and while you may not think it based on Twitter’s recent actions, the ability for users to comment and disagree is an important part of Twitter, Dorsey at least says he believes.

    Dorsey said that instead of removing the tweets of world leaders, Twitter will instead introduce an “interstitial.”

    “Anything that we can do to interstitial a lot of this and provide context that is credible and might show a disagreement or a debate around the topic, I think, would be helpful,” Dorsey said.

    “The team is working on a great experiment to do just that, that we hope to launch as quickly as possible to give people a broader context for a particular tweet… I think we’ll disarm a bunch of it.”

    The details are sparse so far but it appears that Dorsey plans to introduce a feature that comes in when Twitter finds a statement that a world leader makes and wants to challenge it.

    In other words, Twitter feels brave enough to place some kind of editorialized interstitial between a world leader and the reader, that alters the way the reader perceives the tweet.

    Dorsey said that Twitter’s number one focus right now is dealing with misinformation.

    “The ability to create deep fakes is moving much faster and with much higher quality than the ability to detect it. So this is going to be a race, just like security is. You can never build a perfect system. You just have to be 10 steps ahead of the attackers,” he said during the stream.

    It could end up being similar to the way Facebook has decided it wants to fact-check certain statements on the platform – and has been putting an overlay on content with a link to a fact-check.

    It’s worth mentioning that Facebook’s fact-check has several times in the last month alone, “debunked” something that turned out to actually be true – so Twitter, if it too decides to play this game, must be feeling pretty confident they’re going to get it right.

    Or, perhaps, they’re just happy to brazenly wield the power anyway.


    Tyler Durden

    Sat, 04/25/2020 – 23:00

  • Singapore Man Jailed For 6 Weeks After Violating Quarantine Over "Irresistible Urge" For Pork Soup
    Singapore Man Jailed For 6 Weeks After Violating Quarantine Over “Irresistible Urge” For Pork Soup

    Sometimes, you just want a bowl of pork soup, or bak kut teh, as it’s called in Singapore. And sometimes, that is an itch that overrides all common sense until you can scratch it accordingly.

    Nobody knows this better than Alan Tham Xiang Shen of Singapore, who pleaded guilty on April 16 to violating a Stay-at-Home (SAH) order to fulfill an “irresistible urge” for the soup. In doing so, he was charged with an offense under the country’s Infectious Diseases Act, according to The Straits Times.

    Senior District Judge Ong Hian Sun called his violation of the order “socially reprehensible”, before handing him down a 6 week sentence.

    Tham arrived in Singapore from Myanmar on March 23 and was directed via SAH order to stay home at all times until April 6. He also signed a slip to acknowledge he had received the order. But instead of going home on the date he was given the order, he instead met up with his girlfriend and went to a foodcourt at Terminal 3 of Changi Airport. They then hired a private car to take them to a money changer and then to Tham’s house. 

    About two hours later – after who knows what – the couple had worked up an appetite, so they boarded a bus and went out to get the soup. The couple posted about the meal on social media. They then went to a supermarket, and finally went home.

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    On March 25, Tham was paid a visit from the Immigration and Checkpoints Authority who informed him that he did not go straight home after the order was issued to him on the 23rd.

    Despite being found not to have the virus, Deputy Public Prosecutor Kenneth Chin recommended 10 to 12 weeks jail for Tham. Chin’s office said that the law is there “to prohibit socially irresponsible conduct regardless of whether any person is infected by the offender or not”. 

    Tham’s lawyers asked for either a maximum fine of $10,000 or two weeks jail. They argued that the SAH did not specify he had to go directly home after receiving it. 

    “The SAH does not impose any movement restrictions before going home, such as you must take away your meal and are not allowed to eat at the food outlet itself,” his lawyer argued, as only a lawyer can do.

    But the judge didn’t see it that way and sentenced Tham to 6 weeks of hard time. He is expected to surrender himself at the State Courts on April 30 to begin serving his time.

    All for bowl of pork soup.


    Tyler Durden

    Sat, 04/25/2020 – 22:30

  • What War Between The US & Iran Could Look Like
    What War Between The US & Iran Could Look Like

    Via Southfront.org,

    The US-Iranian standoff in the Persian Gulf has once again entered an acute phase...

    On April 22, US President Donald Trump announced that he had ordered the US Navy to “shoot down and destroy” Iranian gunboats that follow or harass US ships. In response, Commander-in-chief of the Islamic Revolution Guards Corps, Major General Hossein Salami declared on April 23 that Iran will provide a swift, “decisive” and “effective” response to US forces if they threaten Iranian “vessels or warships”.

    One of the reasons behind the escalation is the consistent and strengthening anti-Iranian rhetoric of the White House as a part of Trump’s presidential campaign. Another driving force of the US actions is likely the sharpening global economic crisis and the turmoil on the energy market that has led to the dramatic collapse of oil prices. Indeed, a new conflict in the Persian Gulf could theoretically return the oil prices to $50-60 per barrel.

    In the current situation, Iran is not interested in an escalation of the conflict with the United States. The escalation could, however, be instigated by the US military:

    • A warship or a group of warships could enter Iranian territorial waters;

    • A US military aircraft could violate Iranian airspace;

    • US forces could block for Iran the civilian maritime traffic through the Strait of Hormuz, or detain an Iranian oil tanker;

    • Warships of the US Navy could imitate an attack on an Iranian submarine;

    Iranian forces would have to respond to such a provocation. Thus, a military confrontation could start. After initiating a localized military incident, the White House would accuse Iran of aggressive actions against US forces and the US navy could carry out a demonstrative missile strike on a target or several targets inside Iran. Such an attack would prompt an Iranian response that would involve both its regular and irregular warfare capabilities.

    The IRGC Navy doctrine reflects irregular warfare principles that include the use of surprise, deception, speed, flexibility and adaptability, decentralization and highly mobile and maneuverable units,  all of which are used at sea. These include hit-and-run style surprise attacks or the amassing of large numbers of means and measures to overwhelm the enemies’ defenses. In this scenario the employed naval forces might be described as a mosquito-like swarm of small boats using their size and maneuverability to track and hunt down enemy warships.

    The IRGCN’s mosquito-fleet concept enables rapid formation of tactical groups of small crafts to carry out a surprise strike at any given time from different directions in a particular area of the offshore zone. Such groups can deploy in attack formation immediately prior to reaching the area of the attack.

    Crafts from the formation reach their assault line position either independently or in small groups. This is the way the Iranian Navy would employ the swarm concept. It is important to note the high motivation and ideological training of the mariners involved, who well understand the high level of threat to them personally in the event of the employment of this tactical scheme. IRGCN personnel are motivated and ready to accomplish any feat to defend their homeland. This factor (the high motivation of the personnel) makes a mosquito-fleet armed with missile, torpedo and anti-air weapons especially dangerous to naval forces of the US.

    The aircraft carriers and large warships of the US naval group would become the main priority target of the Iranian response. In the event that the Iranian attack succeeds, the US would have to carry out a massive strike on Iranian infrastructure objects or political and military command centers. Tehran would have either to accept their defeat in this limited confrontation or to respond with another attack on US forces in the region.

    Current US military doctrine dictates the prior employment of mobile interoperable forces, unmanned and robotized systems, as well as massive strikes with high precision weapons in conjunction with the maximum usage of electronic warfare and information warfare. If the confrontation develops further the US would be forced to conduct a limited landing operation on key parts of the Iranian coast. The success of such a limited operation under the likely condition of a strong Iranian military response is improbable. Furthermore, the move would be hampered by the weak psychological condition of US service members caused by current developments inside the US.

    The US military would have to either retreat or venture on to a large-scale military operation in the Persian Gulf region. If the number of forces involved does not allow Washington to deliver a devastating blow to Iran within 1-2 weeks, China or Russia could intervene in some form likely turning the military standoff into a frozen conflict.

    It is likely that despite all difficulties, the US would be able to create an occupation zone inside Iran, likely in the coastal area near the Strait of Hormuz.

    The Iranian oil trade would be fully blocked and the US shale industry would be rescued. At the same time, Washington would have to deal with a permanent insurgency in the occupied area.

    Another possible scenario is the defeat of the United States in this limited conflict because of significant losses in warships, aviation and service members of the involved interoperable forces.

    In this case, US influence in the region would be drastically undermined and the White House would start drawing up plans of revenge.


    Tyler Durden

    Sat, 04/25/2020 – 22:00

  • Even Warren Buffett's Portfolio Isn't "Immune" To The COVID-19 Shutdown
    Even Warren Buffett’s Portfolio Isn’t “Immune” To The COVID-19 Shutdown

    When Warren Buffett has been mentioned over the last 2 months, it’s been in the context of wondering when he’s going to deploy some of the $128 billion in (depreciating) cash he has sitting around. So far, he has yet to do that.

    At the same time, Berkshire’s portfolio has hardly been immune to the coronavirus shutdown. Names like See’s Candies and Precision Castparts are all taking hits as the global economy grinds to a halt. Buffett’s portfolio was on a run rate of churning out more than $20 billion in profit annually. That number is likely to come under pressure, according to Bloomberg. 

    “We’ve got a few businesses, small ones, we won’t reopen when this is over,” Charlie Munger said of the portfolio.

    While Buffett was able to navigate 2008 with his rock solid balance sheet and diversification, there has been little said from Berkshire about the recent financial crisis. 

    Buffett’s companies are undeniably tethered to the overall economy. See’s Candies, for instance, has furloughed its retail workers. Justin Brands shut down its outlets in Missouri. BNSF will likely report a decline in rail traffic. Precision Castparts temporarily halted some of its operations in April. Lawrence Cunningham, a professor at George Washington University Law School said: “There’s no fortress that’s immune to that right now.”

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    Some of Buffett’s names, like Geico and Lubrizol have been able to weather most of the storm. Geico is dealing with fewer accidents as a result of less driving and Lubrizol said social distancing and work-from-home measures have become customary. Lubrizol has not cut any of its workers. 

    CEO Eric Schnur said: “It’s nowhere near business as usual, of course. But keeping people safe in a potentially unsafe situation is something we think about every day whether or not there’s a coronavirus pandemic.”

    Buffett has promised in the past that Berkshire would “forever remain a financial fortress”. But investors have been left wondering exactly what that means in terms of Buffett potentially deploying capital going forward. Berkshire underperformed the S&P 500 during the last bull market and people are wondering if Buffett will take advantage of the recent pullback (if you can even call it that) in valuations. 

    Buffett did exceptionally well during the 2008 crisis after making preferred stock/warrant deals with names like Bank of America and Goldman Sachs. Munger said the company is proceeding with caution. Berkshire is set to report earnings in May, which could shed some light into the company’s capital allocation strategies. 

    Buffett said in his 2017 shareholder letter: “Every decade or so, dark clouds will fill the economic skies, and they will briefly rain gold. When downpours of that sort occur, it’s imperative that we rush outdoors carrying washtubs, not teaspoons. And that we will do.”

    Shareholder Thomas Russo said simply of Buffett: “He’s patient. One of the best features is that he is able to see opportunities broadly.”


    Tyler Durden

    Sat, 04/25/2020 – 21:30

  • China Continues To Flood The World With Defective Medical Supplies
    China Continues To Flood The World With Defective Medical Supplies

    Authored by Soeren Kern via The Gatestone Institute,

    More than a dozen countries on four continents recently disclosed problems with Chinese-made coronavirus tests and personal protective equipment. The problems range from test kits tainted with the coronavirus to medical garments contaminated with insects. Defective Chinese face masks, purchased by Spain’s Ministry of Health, were distributed to hospitals and nursing homes across the country, and more than 100 healthcare workers who used them tested positive for Covid-19.

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    A shipment from China of 8.6 million protective face masks and 150 tons of sanitary equipment arrives at Paris-Vatry Airport in France, on April 19, 2020. (Photo by Francois Nascimbeni/AFP via Getty Images)

    Gatestone Institute recently reported that millions of pieces of medical equipment purchased from China by European governments to combat the coronavirus pandemic are defective and unusable.

    Since that report, more than a dozen countries on four continents have disclosed problems with Chinese-made coronavirus tests and personal protective equipment. The problems range from test kits tainted with the coronavirus to medical garments contaminated with insects.

    Chinese authorities have refused to take responsibility for the defective equipment and in many instances have cast blame on the countries that purchased the material. They have also called on nations of the world to stop “politicizing” the problem — at the same time that Chinese President Xi Jinping and his Communist Party have sought to leverage the pandemic to assert a claim to global leadership.

    Spain, the epicenter of the coronavirus crisis in Europe, has experienced the greatest number of problems with medical equipment purchased from China.

    After the epidemic hit Spain, the Spanish government purchased medical supplies from China in the amount of €432 million ($470 million). Chinese vendors demanded they be paid up front before making any deliveries. It now appears that much of the material being supplied by China is substandard.

    In late March, for instance, the Spanish Ministry of Health revealed that more than a half million coronavirus tests it had purchased from a Chinese vendor were defective. The tests, manufactured by Shenzhen Bioeasy Biotechnology, a company based in China’s Guangdong Province, had an accurate detection rate of less than 30%. Bioeasy had claimed, in writing, that its tests had an accurate detection rate of 92%.

    After the swindle made international headlines, Bioeasy agreed to replace the tests. On April 21, however, the Spanish newspaper El País reported that all 640,000 replacement tests were also useless. The Spanish government is now seeking a refund.

    The Chinese Embassy in Madrid blamed the Spanish government for purchasing the tests from an unauthorized vendor. Bioeasy, apparently, does not have a license to sell coronavirus tests. Spain, however, has also reported problems with material purchased from vendors that are authorized by the Chinese government.

    On April 15, Spain’s Ministry of Health recalled 350,000 so-called FFP2 masks after laboratory tests determined that they were substandard. The defective masks were manufactured by Garry Galaxy Biotechnology, a company included on the Chinese government’s list of approved manufacturers of personal protective equipment. FFP2 masks are required to filter at least 94% of aerosols, but those delivered to Spain filtered only between 71% and 82% of aerosols.

    The defective masks were purchased by the Spanish Ministry of Health and distributed to hospitals and nursing homes across the country. After the defective masks were recalled, more than a hundred healthcare workers who had used them tested positive for coronavirus disease (Covid-19).

    In the northeastern Spanish region of Catalonia, local health officials on April 18 recalled 180,000 Covid-19 antibody tests — also known as serological tests — because of their low rate of detection. The tests, produced by the Chinese manufacturer Guangzhou Wondfo Biotech, were purchased by the central government in Madrid and distributed to regional health authorities to detect Covid-19 in two priority groups: healthcare personnel and elderly people in nursing homes. The Wondfo tests reportedly gave negative results to people who had previously tested positive for Covid-19, and also failed to distinguish between two types of antibodies, including those that confer immunity.

    In the eastern city of Alicante, the General Hospital recalled 640 disposable medical garments after one of the boxes from China contained cockroaches. The hospital said that it had received a total of 3,000 garments in 75 boxes and that it found two insects inside one of the boxes. It added that given the shortage of medical supplies, the garments would be sterilized, not destroyed.

    Other countries — in Europe and beyond — have also criticized the quality of Chinese medical supplies:

    • Australia. On April 1, the Australian Broadcasting Corporation (ABC) reported that the Australian Border Force (ABF) had seized nearly one million Chinese-made faulty face masks and other protective clothing that was exported to Australia to help halt the spread of coronavirus. The material was valued at A$1.2 million (US$760,000). “We started seeing this stuff arriving roughly three weeks ago when news of the pandemic was really taking off,” an ABF official told ABC. “The dodgy material is coming via air cargo because there is a backlog of sea freight at Australian ports.”

    • Austria. On April 6, the Ministry of Economic Affairs confirmed that 500,000 masks ordered from China for use in South Tyrol were “completely unusable” because they did not meet safety standards: “The result of the quality control check showed that the masks do not meet an FFP standard. When putting on the masks, it is impossible to obtain a tight fit in the area of ​​the chin and cheeks.” Minister of Economics Margarete Schramböck complained that international providers of the urgently needed FFP2 and FFP3 masks had not delivered the required quality in nine out of ten cases. On April 9, Austrian media reported that the defective mask problem was far greater than initially thought. The Austrian Red Cross ordered 20 million masks from the same Chinese manufacturer that made the defective masks for South Tyrol.

    • Belgium. On March 31, the University Hospital of Leuven rejected a shipment of 3,000 masks from China because the equipment was substandard.

    • Canada. On April 7, the City of Toronto recalled more than 60,000 surgical masks made in China. The masks, valued at more than $200,000, were provided to staff at long-term care facilities. Toronto health authorities were investigating whether caregivers were exposed to Covid-19 while wearing the equipment. The masks represented around 50% of Toronto’s inventory of surgical masks, according to Matthew Pegg, Toronto’s fire chief and general manager of emergency management.

    • Czech Republic. On March 23, the Czech news site iRozhlas reported that 300,000 coronavirus test kits delivered by China had an error rate of 80%. The Czech Ministry of Interior had paid $2.1 million for the defective kits.

    • Finland. On April 10, the Managing Director of Finland’s National Emergency Supply Agency, Tomi Lounema, resigned after he admitted to spending €10 million ($11 million) on defective protective equipment from China.

    • Georgia. On March 27, Health Minister Ekaterine Tikaradze cancelled an order for 200,000 coronavirus tests manufactured by the China-based Shenzhen Bioeasy Biotechnology Company. The move came after Spain reported that 640,000 tests that it purchased from the company were defective. She said: “Georgia had a contract with this company, but today it has been canceled. The money has not been transferred. We are negotiating with another company and at first, they will send two thousand tests. If the reliability of those is approved by us, we will purchase an additional quantity.”

    • India. On April 16, the Mumbai-based Economic Times reported that 50,000 pieces of personal protective equipment donated by China were defective and unusable.

    • Ireland. On April 6, the Health Service Executive (HSE) revealed that a large portion of the €200 million delivery of personal protective equipment supplied by China was found to be unusable for health care workers. The HSE told the Chinese company responsible for the delivery that unless the quality of the equipment being sent is guaranteed, there will not be any more deals between the two nations with regards to PPE. The government said that it was seeking a refund.

    • Malaysia. On April 16, Malaysian authorities approved the use of coronavirus test kits from South Korea after similar kits from China were found to be defective. A senior official in the Ministry of Health, Noor Hisham Abdullah, said that the accuracy of the Chinese tests was “not very good.” He expressed optimism over the South Korean tests: “Now that we have a test kit that is fast, portable and is cheap, that will make the difference.”

    • Netherlands. On March 28, the Netherlands recalled 1.3 million face masks produced in China because they did not meet the minimum safety standards for medical personnel. The so-called KN95 masks are a less expensive Chinese alternative to the American-standard N95 mask, which currently is in short supply around the world. The KN95 does not fit on the face as tightly as the N95, thus potentially exposing medical personnel to the coronavirus.

    • Philippines. On March 29, the Department of Health apologized for comments it made a day earlier that two batches of coronavirus test kits provided by China were substandard. Undersecretary for Health Maria Rosario Vergeire had said that kits made by Chinese manufacturers BGI Group and Sansure Biotech were only 40% accurate in diagnosing Covid-19 and that some of them would have to be discarded. The Chinese Embassy in Manila rejected those accusations and claimed that the kits complied with standards established by the World Health Organization. “The Chinese Embassy firmly rejects any irresponsible remarks and any attempts to undermine our cooperation in this regard,” a spokesman tweeted.

    • Slovakia. On April 1, Prime Minister Igor Matovič disclosed that more than a million coronavirus tests supplied by China for a cash payment of €15 million ($16 million) were inaccurate and unable to detect Covid-19. “We have a ton of tests and no use for them,” he said. “They should just be thrown straight into the Danube.” China accused Slovakian medical personnel of using the tests incorrectly.

    • Turkey. On March 27, Health Minister Fahrettin Koca said that Turkey had tried Chinese-made coronavirus tests but authorities “weren’t happy about them.” Professor Ateş Kara, a member of the Turkish Health Ministry’s coronavirus task force, added that the batch of testing kits were only 30 to 35% accurate: “We have tried them. They don’t work. Spain has made a huge mistake by using them.”

    • United Kingdom. On April 6, the London-based newspaper The Times reported that 17.5 million coronavirus antibody tests supplied by China were defective. The Chinese manufacturers of the tests blamed British officials and politicians for misunderstanding or exaggerating the utility of the tests. The British government, which reportedly paid at least $20 million (£16 million) for the tests, said that it was seeking a refund. Meanwhile, other coronavirus tests destined for the UK were found to be tainted with coronavirus.

    • United States. On April 17, the director of the Missouri Department of Public Safety, Sandy Karsten, revealed that 3.9 million KN95 masks manufactured in China were defective. The State of Missouri had signed a $16.5 million contract with an unidentified vendor for the masks and paid half in advance. The vendor is refusing to return the $8.25 million. Missouri Governor Mike Parson said: “We got cheated here in this state and we are going to go out there and try to get our money back and hold people accountable.” In neighboring Illinois, Governor J.B. Pritzker said that the state had spent $17 million on KN95 masks that may be unusable: “You know things come in shipments of a million — you can’t go through one mask at a time and so you try to take samples from the shipments that come in, make sure you got what you are paying for.” In Washington State, 12,000 coronavirus testing kits produced in China were recalled after some of them were found to be contaminated with the coronavirus.

    On March 30, China urged European countries not to “politicize” concerns about the quality of medical supplies from China. “Problems should be properly solved based on facts, not political interpretations,” Foreign Ministry spokeswoman Hua Chunying said.

    On April 1, the Chinese government reversed course and announced that it was increasing its oversight of exports of coronavirus test kits made in China. Chinese exporters of coronavirus tests must now obtain a certificate from the National Medical Products Administration (NMPA) in order to be cleared by China’s customs agency.

    On April 16, the Wall Street Journal reported that millions of pieces of medical equipment destined for the United States were being held in warehouses in China due to the new export restrictions imposed by the Chinese government. “We appreciate the efforts to ensure quality control,” the U.S. State Department said. “But we do not want this to serve as an obstacle for the timely export of important supplies.”

    U.S. Senator Kelly Loeffler from Georgia accused China of holding up shipments of test kits: “Testing is core to opening our country back up. I’m concerned that China’s holding up test kits. They’re playing games with trade policy to prevent us, the United States, from getting the testing that we need.”

    The coronavirus pandemic has exposed the flaws of globalization by laying bare how the West has allowed itself to become dangerously dependent on Communist China for the supply of essential health care and medical products.

    Andrew Michta, Dean of the College of International and Security Studies at the George C. Marshall European Center for Security Studies, explained:

    “The Wuhan Virus and the attendant misery that the Chinese communist state has unleashed upon the world (very much including its own people) has laid bare a core structural flaw in the assumptions underpinning globalization. It turns out that the radical interweaving of markets — which was supposed to lead to the ‘complex interdependence’ that international relations theorists have been predicting for the better part of the century would lead to an increase in global stability… has instead created an inherently fragile and teetering structure that is exacerbating uncertainty in a time of crisis….

    “If there is any good to come from the devastating impact on our nation of this pandemic brought about by the Chinese communist regime through its malice and incompetence, it will be the likely demise of enthusiasm for globalization as we know it across the West. After three decades of intellectual gymnastics aimed at convincing Americans that the off-shoring of manufacturing and the attendant deindustrialization of the country are good for us, the time has come for a reckoning.

    “Since the end of the Cold War, Western elites seem to have been in thrall to the idea that various ‘natural forces’ in the economy and politics were propelling us forward to a digitally interconnected brave new world, one in which traditional considerations of national interest, national economic policy, national security, and national culture would soon be eclipsed by an emergent peaceful global reality. This virus crisis is a wake-up call, and while some argue we are waking up too late to effectively counter current trends, my money is on the ability of the American people to rally in a crisis and on the resilience of Western democratic institutions.

    “Today, while battling the Wuhan Virus consumes the attention of our government agencies and health care systems, we should not lose sight of the foundational strategic challenge confronting the West in the emerging post-globalization era: We are in a long twilight competition with the Chinese communist regime, a struggle we cannot escape, whether we like it or not. Now is the time to wake up, develop a new strategy for victory, and to move forward.”


    Tyler Durden

    Sat, 04/25/2020 – 21:00

  • Goldman Was Furiously Buying Mortgage Bonds In The Days Before The Fed's Massive Bailout
    Goldman Was Furiously Buying Mortgage Bonds In The Days Before The Fed’s Massive Bailout

    Goldman Sachs had itself one of those patented bouts of good luck that you only see on Wall Street – for one reason or another. 

    The investment banking giant reportedly was in the market buying up mortgage bonds during the panic selling that hit markets last month, ostensibly before the Fed came out and said they were going to backstop every industry and every market.

    The bet has “certainly made money since the Federal Reserve unveiled massive stimulus turning a crash into a rally,” according to Bloomberg. 

    Goldman was buying mortgage backed securities from funds that were deleveraging and were being forced to sell. Goldman charged a fee for helping other banks and funds exit their positions, as the bank was offering other parties in distress a quick way to free up cash and “escape margin calls”.

    Goldman was able to stock its coffers because of how leveraged the mortgage bond market is. Sharp drops in asset values lead to quick margin calls and forced liquidations. The move was so sharp over the last two months that some margin calls couldn’t be met, resulting in several REITs asking counterparties for forbearance agreements.

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    Goldman swears that all it was doing was making a market and that it would have been able to find buyers for the bonds in relatively short order. The only question is whether or not they thought that “buyer” would be the Fed.

    Goldman Sachs said in a statement: “Making markets — buying from or selling to our clients — is the core activity of our Global Markets division, and we do it regardless of markets conditions. We had no advance knowledge of any of the facilities the Fed announced and assumed risk when we bought securities from clients during this period.”

    For now, the bet just looks to have been “well timed”. The Fed stepped in soon thereafter and calmed the markets when it committed to buying unlimited amounts of Treasury bonds and mortgage securities. Goldman, in turn, sold some notes to the Fed. 

    One Bloomberg index shows theses mortgage bonds rising 3% over the last month. A Markit iBoxx benchmark of non-agency securities rose 14%.

    Goldman also reportedly executed several large trades with key clients and approached several other structured credit hedge funds to seek out trades. The bank has seen a trading increase of about 75% as of early April. 


    Tyler Durden

    Sat, 04/25/2020 – 20:30

  • More From The "New Normal" (In 50 'Darker' Headlines)
    More From The “New Normal” (In 50 ‘Darker’ Headlines)

    Via Off-Guardian.org,

    Despite the concise, well-intentioned and unavoidably ubiquitous nature of our previous Message, it seems some are still withholding their consent for necessary change.

    Though all our Responsible Media Outlets are doing their duty, it appears some members of the public do not yet understand the reality of our situation. More distressing are the efforts of a Criminal Minority to misrepresent Policy, subvert The Message and engage in dangerous questions.

    We hope the following collection – once again compiled by the good citizens at the Consent Factory – makes the nature of this new reality quite clear to all those who aren’t yet aware their lives will never be the same.

    Remember, resisting the new normal will endanger your life.

    One area of concern is that the powers detailed under the bill, as published, remain in force for two years … among the most draconian possible powers is for police, public health and immigration officers to detain people suspected of having Covid-19.”

    UK’s emergency coronavirus bill ‘will put vulnerable at risk’, The Guardian (23rd March 2020)

    People who intentionally spread the coronavirus could face criminal charges under federal terrorism laws, the Justice Department’s No. 2 official said Tuesday […] “Threats or attempts to use COVID-19 as a weapon against Americans will not be tolerated.””

    Those who intentionally spread coronavirus could be charged as terrorists, Politico, (24th March 2020)

    A police force has defended using a drone camera to shame people into not driving into a national park during the lockdown, while another force said it was introducing roadblocks to stop drivers heading to tourist hotspots.”

    UK police use drones and roadblocks to enforce lockdown, The Guardian, (26th March 2020)

    Humberside Police has created an online reporting portal where people can send details of those not following social distancing rules.”

    Humberside police creates online report portal for people not social distancing, ITV news (26th March 2020)

    An Austin, Texas based technology company is launching ‘artificially intelligent thermal cameras’ that it claims will be able to detect fevers in people, and in turn send an alert that they may be carrying the coronavirus.”

    Surveillance Company Says It’s Deploying ‘Coronavirus-Detecting’ Cameras in US, VICE, (18th March 2020)

    As the jogger struggled with police, screaming for help, she was filmed by residents who had absolutely zero sympathy for her plight. ‘What’s not fair is that you go out running, you bloody idiot!’, shouted the woman apparently filming the encounter.”

    Coronavirus lockdown: Jogger resists arrest in Spain and is abused by onlookers, AS.com, (21st March 2020)

    Gordon Brown has urged world leaders to create a temporary form of global government to tackle the Covid-19 pandemic … involving world leaders, health experts and international organisations that would have executive powers to coordinate the response.”

    Gordon Brown calls for global government to tackle coronavirus, The Guardian, (26th March 2020)

    South African police enforcing a coronavirus lockdown have fired rubber bullets towards hundreds of shoppers queueing outside a supermarket in Johannesburg … the police used whips to get the shoppers to observe social distancing rules.”

    South African police fire rubber bullets at shoppers amid lockdown, The Guardian, (28th March 2020)

    President Trump said Saturday he may announce later in the day a federally mandated quarantine on the New York metro region, placing “enforceable” travel restrictions on people planning to leave the New York tri-state area because of the coronavirus.”

    U.S. coronavirus-related deaths double in two days, The Washington Post, (March 28th 2020)

    Rhode Island police began stopping cars with New York plates Friday. On Saturday, the National Guard will help them conduct house-to-house searches to find people who traveled from New York and demand 14 days of self-quarantine.”

    Rhode Island Police to Hunt Down New Yorkers Seeking Refuge, Bloomberg, (27th March 2020)

    A Police force has had a surge in calls from people reporting neighbours for “going out for a second run” and “gathering in their back gardens.” … “We are getting (dozens of) calls from people who say ‘I want you to come and arrest them’.

    Coronavirus: Exercise rule-breakers spark surge in police calls, BBC News, (26th March 2020)

    Police with batons and guns have moved in to protect supermarkets on the Italian island of Sicily after reports of looting by locals who could no longer afford food.”

    ‘We have to eat’: Sicilian police crackdown on locals looting supermarkets, The Local, (29th March 2020)

    The National Guard will be deployed to enforce a mile-radius coronavirus “containment area” in overwhelmed New Rochelle … the National Guard will enforce the mandated closure of ‘large gathering areas’ — including schools and houses of worship.”

    National Guard deployed to NY community with nation’s ‘largest cluster’ of coronavirus, New York Post, (10th March 2020)

    New York City residents who break social distancing rules will be subject to fines up to $500, Mayor de Blasio said Sunday … he also announced that NYPD and MTA workers would do checks of subway cars and force riders off cars that are too crowded.”

    New Yorkers who break social distancing rules will now face fines up to $500, Politico, 29th March 2020)

    Anyone who leaves their house without a reasonable excuse could spend up to 6 months in prison and face an $11,000 fine under a directive [that] gives police sweeping power to enforce restrictions designed to limit the spread of coronavirus in Australia.”

    Six months in jail, $11,000 fine for leaving home without a ‘reasonable excuse’, Sydney Morning Herald, (31st March 2020)

    A coronavirus app that alerts people if they have recently been in contact with someone testing positive for the virus “could play a critical role” in limiting lockdowns … but the academics say no-one should be forced to enroll – at least initially.’

    Coronavirus: UK considers virus-tracing app to ease lockdown, BBC News, (3st March 2020)

    As coronavirus lockdowns have been expanded globally, police across the world have been given licence to control behaviour in a way that would normally be extreme even for an authoritarian state.”

    Teargas, beatings and bleach: the most extreme Covid-19 lockdown controls around the world, The Guardian, (1st April 2020)

    It is likely that we are not heading towards a general deconfinement in one go and for everyone,” Prime Minister Philippe told parliament … the interior minister noted 359,000 fines for violating the lockdown had been issued since lockdown began.”

    French PM warns lockdown will not be lifted ‘in one go’, France24, (1st April 2020)

    Philippine President Rodrigo Duterte has warned he would order the country’s police and military to shoot dead anyone “who creates trouble” during a month-long lockdown of the island of Luzon enforced to halt the spread of the coronavirus.’

    ‘Shoot them dead’: Duterte warns against violating lockdown, Al Jazeera, (2nd April 2020)

    French interior minister Christophe Castaner warned that “roadblocks would be set up on major highways and axes and extra police, gendarmes or soldiers dispatched to train stations and airports to verify the documents of anyone stopped out and about.”‘

    Confirmed cases pass 1 million – as it happened, The Guardian, (2nd April 2020)

    Around the world, police forces are testing how far to go in punishing ordinary behavior.”

    How Far Should Police Go in Enforcing Coronavirus Lockdowns?, New York Times (2nd April 2020)

    Western governments aiming to relax restrictions on movement are turning to unprecedented surveillance to track people infected with the new coronavirus and identify those with whom they have been in contact.”

    U.S. and Europe Turn to Phone-Tracking Strategies to Slow Spread of Coronavirus, Wall Street Journal, (3rd April 2020)

    If a person becomes infected, the app will automatically send a push notification to anyone they have crossed paths with in the past two weeks, to warn them of the risk of infection.”

    Privacy-mad Germany turns to app to track coronavirus spread, The Local, (2nd April 2020)

    Google will use its mammoth collection of mobile location data to measure whether people across the globe are following government directives …”

    Google wielding its vast troves of phone-tracking data in virus fight, Politico, (4th April 2020)

    A 70-year-old township man was arrested twice on Saturday after police alleged he tried to enter two different Wawa convenience stores without a mask and became belligerent … he was charged with second-degree terroristic threats during an emergency.”

    Coronavirus NJ: Unmasked Toms River man, 70, arrested twice in one day at Wawa stores, app.com, (13th April 2020)

    Residents in Riverside County, CA, are now required to wear face coverings and could face a fine of $1,000 per violation per day if the mandate is ignored. ‘This is a valid order and enforceable by fine, imprisonment or both,’ said Sheriff Chad Bianco.”

    CALIFORNIA COUNTY FINING RESIDENTS $1,000 FOR NOT WEARING FACE MASKS IN PUBLIC, Newsweek, (7th April 2020)

    A family claimed a 500-mile round Lake District trip was acceptable if they wore masks and gloves, police said. The family were criticised as “absolute idiots” and called “clowns” after the force posted about it on Twitter.’

    Coronavirus: Police stop family on 500-mile Lake District trip, BBC News, (14th April 2020)

    A woman in Victoria says she was left feeling “heartbroken” and like a criminal after uniformed police officers carrying weapons interrupted her father’s funeral over the Easter long weekend to enforce social distancing rules.’

    ‘Totally disrespectful’: police interrupt funeral while enforcing social distancing rules over Easter weekend, The Guardian, (13th April 2020)

    The coronavirus pandemic has led to an unprecedented global surge in digital surveillance, researchers and privacy advocates around the world have said, with billions of people facing enhanced monitoring that may prove difficult to roll back.’

    Growth in surveillance may be hard to scale back after pandemic, experts say, The Guardian, (14th April 2020)

    Protesters rallied to reopen North Carolina … at least one was arrested. “You are in violation of the executive order,” said police. “You are posing a risk to public health. If you do not disperse, you will be taken and processed at Wake County jail.”

    Protesters rally for NC to reopen. One woman arrested for violating governor’s order., New Observer, (14th April 2020)

    Officers have become public health police, breaking up crowds at stores … the department has mobilized the Citywide All-Out Task Force, which is usually assembled to flood high-crime areas and other assignments.”

    New Role for New York Police: Breaking Up Crowds at Trader Joe’s, New York Times, (14th April 2020)

    A South Australian couple was hit with a hefty fine from cops for nonessential travel amid the pandemic after the pair posted vacation snaps from 2019 on Facebook … the couple was warned that if they ‘posted any more photos,’ they would “be arrested.”

    Couple mistakenly fined for posting old vacation photos during coronavirus lockdown, New York Post, (14th April 2020)

    Attorney Beate Bahner challenged Germany’s coronavirus regulations in the Constitutional Court and failed. Now she has been taken to a psychiatric facility.”

    Coronavirus: Anwältin Beate Bahner will gegen Verordnung klagen – und landet selbst vor Gericht, Heidelberg24.com, (24th April 2020)

    Ms Bahner submitted a 36-page urgent motion to the Constitutional Court regarding the unlawfulness of all 16 German federal states’ Coronavirus measures … [her] interview for “incitement to commit criminal acts” is scheduled for Wednesday 15 April.

    Coronavirus lockdown: German lawyer detained for opposition, UK Column, (14th April 2020)

    Police in Berlin broke up a large birthday gathering in the early hours of Monday … a 16-year-old girl was celebrating with 31 other people … all 32 party attendees [are] being investigated for criminal offenses.”

    Berlin police bust 16th birthday party amid coronavirus lockdown, DW, (13th April 2020)

    Extraordinary times require extraordinary measures and it is about protecting the public.”

    Federal government open to new law to fight pandemic misinformation, CBC.com, 15th April 2020)

    The UK’s health secretary, Matt Hancock, has suggested “something like an immunity certificate or a wristband” in the future.’

    Coronavirus: Could biometric ID cards offer the UK a lockdown exit strategy?, Sky News, (10th April 2020)

    Attempting to issue some kind of immunity certificate to millions of Americans would be unprecedented.”

    What are ‘immunity passports’ and could they help us end the coronavirus lockdown?, The Hill, (10th April 2020)

    The COVID-19 Credentials Initiative (CCI) is working on a digital certificate, [that] lets individuals prove (and request proof from others) they’ve recovered from the novel coronavirus or have received a vaccination, once one is available.”

    COVID-19 ‘Immunity Passport’ Unites 60 Firms on Self-Sovereign ID Project, coindesk.com, (13th April 2020)

    [T]he drones use computer vision systems to monitor temperatures and heart and respiratory rates of people from above and single out people sneezing or coughing … Draganfly also sees a possible security use around borders or critical infrastructure.”

    ‘Pandemic drones’ could single people out in a crowd for coughing, sneezing, or running a temperature, Business Insider, (11th April 2020)

    Mobile phone tracking software could be compulsory if not enough Australians voluntarily download the application to help in coronavirus case tracing.”

    Coronavirus: Mobile tracking app could be compulsory, Morrison says, 9 News, (17th April 2020)

    The three-page document, entitled “what constitutes a reasonable excuse to leave the place where you live”, is designed to help police enforce the emergency restrictions that came into effect three weeks ago and are set to be extended.’

    Coronavirus lockdown: Police guidelines give ‘reasonable excuses’ to go out, BBC News, (16th April 2020)

    [T]here is a danger that these new, often highly invasive, measures will become the norm around the world …”

    Compulsory selfies and contact-tracing: Authorities everywhere are using smartphones to track the coronavirus, Business Insider (14th April 2020)

    Norway unveiled its Smittestop app, which will notify users if they have been less than 2 metres from an infected person for more than 15 minutes. “To get back to a more normal life … we all have to make an effort and use this app,” PM Solberg said. […] Developers in several European countries are working on similar apps to inform people quickly when they have been in contact with someone who is infected with the virus, as part of a pan-European privacy-preserving proximity tracing (Pepp-PT) initiative.

    Coronavirus ‘under control’ in Germany, as some countries plan to relax lockdowns, The Guardian, (17th April 2020)

    Officials say they routinely saw people visit the skatepark, even children accompanied by their parents, according to the San Clemente Times … city officials followed in the footsteps of other cities and filled the skatepark with 37 tons of sand.”

    Coronavirus: San Clemente Fills Skatepark With 37 Tons Of Sand After Skaters Ignore ‘No Trespassing’ Signs, CBS Local, (17th April 2020)

    In one [Michigan] county, anyone deemed a ‘carrier and health threat’ can be detained by police and taken to an Involuntary Isolation Facility.”

    Michigan judge authorizes arresting people on suspicion of COVID-19 illness, Life Site News, (16th April 2020)

    Technology firms are processing confidential UK patient information in a data-mining operation […] Palantir, founded by rightwing billionaire Peter Thiel, is working with Faculty, a UK artificial intelligence startup, to consolidate government databases.”

    UK government using confidential patient data in coronavirus response, The Guardian, (12th April 2020)

    ‘Imagine an America divided into two classes […] “It will be a frightening schism,” a World Health Organization special envoy on Covid-19 predicted. “Those with antibodies will be able to travel and work, and the rest will be discriminated against.”’

    The Coronavirus in America: The Year Ahead, The New York Times, 18th April 2020

    Riots have broken out in Paris amid anger over police ‘heavy-handed’ treatment of ethnic minorities during the coronavirus lockdown.”

    Riots break out in Paris amid anger at police ‘heavy-handed’ treatment of minorities during lockdown, The Daily Mail, (20th April 2020)

    … law enforcers have killed 18 people in Nigeria since lockdowns began on 30 March. Coronavirus has killed 12 people, according to health ministry data.”

    Coronavirus: Security forces kill more Nigerians than Covid-19, BBC News, (16th April 2020)

    We call upon the degenerate few to cease endangering our new social order.

    REMEMBER TO REPORT ANYONE DISPERSING ON ENDORSING MISINFORMATION OR CRITICISING THE STATE

    The world is different now. Unfettered expression is a luxury of the pre-Covid society. Doubt is the weapon of the virus spreader.

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    Pro-Infection propaganda will not be tolerated.

    Have a nice day.


    Tyler Durden

    Sat, 04/25/2020 – 20:00

  • In 2020 Oil-Exporters' Income Will Plunge By Over $1 Trillion, Forcing Widespread Stock Liquidations
    In 2020 Oil-Exporters’ Income Will Plunge By Over $1 Trillion, Forcing Widespread Stock Liquidations

    While any other time the plunge of WTI prices into negative territory last Monday would have been the story of the year, the fact that the financial press has already moved on and is focusing on whatever 100-sigma event du jour has hit, merely shows just how insane 2020 has been as a decade of central planning slowly comes unglued thanks to a black swan bat trigger that has shut down the global economy and cash flows while keeping stocks just shy of all time highs.

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    However, before we relegate the historic oil move that sent the May WTI future as low as -$40 on Monday to the dustbin of history, there are some critical considerations that have to be considered, namely what are the implications of much lower oil prices this year for other asset classes? To address this question we will revisit some prior analyses on the shifts in flows and incomes resulting from oil price changes, especially those looking at the consequences stemming from the collapse of petrodollar mercantilism in 2016 when oil exporting nations saw their oil-linked income crater.

    By itself the decline in oil prices is generating a big shift in flows and incomes across the world, albeit – at least for now – smaller than the previous big shift seen between 2014 and 2016. According to JPMorgan calculations, oil consumers had spent around $2.2tr in 2019 on crude and related products with an average oil price of $64 per barrel, and in 2020 they are likely to spend less than half of that, i.e. around $1tr with an average oil price of $34 and an assumed big reduction in demand.

    This represents a hit to oil producing countries’ incomes of $1.1tr, or 1.4% of global GDP, from the combined effects of an income transfer from the oil price declines and a hit to oil demand. In contrast, in 2014, oil consumers had spent $3.4tr on crude and related products with an average oil price of $100 per barrel, and in 2016 they had spent less than half of that, i.e. $1.6tr with an average oil price of $45 per barrel during 2016. In other words there was a bigger $1.8tr or 2.2% of global GDP income transfer between oil consumers and oil producers between 2014 and 2016.

    As we discussed extensively in 2016, the massive and abrupt loss of income for oil producers during the 2015/2016 OPEC crisis had an profound impact on their behavior, especially on their saving and spending. As JPM’s Nick Panigirtzoglou writes, oil exporting countries, i.e. the countries which on net export oil (Middle East, Norway, Russia, African and LatAm), had received $1.6tr from their oil exports in 2014 and saw their oil revenue being more than halved to $770bn in 2016.

    These oil exporters’ revenues are typically recycled via two channels: via imports of goods and services from the rest of the world and via accumulation of financial assets mostly through SWFs and FX reserves. And since all of these transactions are mediated via the US Dollar, the resulting cycle has been known as the petrodollar mechanism (or petrodollar mercantilism), one which helped cement the dollar’s role as the global reserve currency.

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    Some more stats via JPMorgan: In 2014, around 84% or $1.34tr of the $1.6tr oil revenue was recycled via imports and the remaining 16% or $260bn was recycled via SWFs and FX reserves, mostly SWFs. In 2016, 117% or $900bn of the $770bn of  oil exporters’ revenues was recycled via imports of goods and services from the rest of the world, $130bn of which was funded by SWF and FX reserve decumulation.

    So, between 2014 and 2016, there was not only a substantial $440bn decline in spending of goods and services by oil exporters, but also a similar decline in SWF and FX reserve accumulation. The implications for SWF/FX reserve manager asset purchases were dramatic: previous equity and bond purchases via the SWF and FX reserve managers’ vehicles of oil exporters during 2014 turned into outright sales during 2015 and 2016 as shown in Figure 4.

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    Well, get ready for round 2.

    In 2019 oil exporting countries received around $1.1tr from their oil exports and are likely to see their revenue halved this year. Their imports of goods and services from the rest of the world would certainly decline also, but by a lot less given their already low level after severe declines during 2015 and 2016.

    As a result, JPMorgan now expects that these oil exporting countries would have to sell almost $300bn of SWFs and FX reserves, or issue significant amounts of debt to fund a shortfall in oil revenues, this year to prevent their imports from falling below the $800bn level. This implies significant selling of both bonds and equities as shown in the chart above for various scenarios/assumptions about the average oil price for this year.

    Said otherwise, not only will stock buybacks tumble by as much as 50% (according to Goldman and JPM estimates), but there will likely be roughly $200 billion in forced equity selling this year.

    As Panigirtzoglou explains further, the impact from oil income shifts should also be felt in oil companies’ financial and capital investment. Consider that oil companies had spent close to $600bn on capital equipment in 2014, falling to $410bn in 2015 and $280bn in 2016, and then recovering to around $300bn in 2017/2018 and $330bn in 2019. JPM projects at least 20% decline in 2020 to $260bn or lower, a number that is even more aggressive than a similar forecast from Goldman Sachs, which as we noted last week, expect a roughly expects an $200BN drop in capex and a $850BN plunge in overall corporate cash spending.

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    As a tangent, it is easier to cut share buybacks as financial investment than capital investment. The Oil and Gas industry had spent $57bn on share buybacks in 2013, but since then buybacks were muted, averaging below $30bn per year in the years after up until 2017. The previous long retrenchment in oil companies share buybacks started reversing in 2018 by share buybacks rising to around $74bn before moderating to $65bn in 2019. It is hardly surprising that JPMorgan projects that share buybacks by oil companies will evaporate this year, thus implying a drag of around $65bn for equity markets relative to last year.

    What about the flows emanating from oil consumers (i.e., the benefit from lower oil prices)?  On previous occasions JPM had noted that the previous $1.8tr windfall seen between 2014 and 2016 was most likely equally split between the residential sector, the industrial sector and the transportation sector. These economic agents had spent a portion of their total $1.1tr oil expenditure windfall eventually but with a lag, meaning that most of that windfall was saved during 2015/2016. These savings most likely took the form of bank deposits which eventually supported bond markets via the banking system deploying these excess deposits into bond markets. As a result, the oil income windfall to oil consuming industries had likely created a bullish flow into fixed income during 2015 and 2016, bigger in size than the fixed income flows resulting from the decumulation of SWF/FX reserves of oil exporting countries during these two years.

    However, according to the JPM strategist, these positive bond flow dynamics emanating from oil consumers are unlikely to be repeated in the current conjuncture given the severe cash flow disruption and declines in incomes and with the  transportation sector in crisis. But even if these positive bond flow dynamics were to materialize, they would have been less significant relative to 2015/2016 given the current backdrop of unlimited central bank QE.

    In summary, the decline in oil prices creates a negative flow for equity markets this year via SWF decumulation and reduced share buybacks by oil companies. That said, the material negative equity flow impulse associated with the latest unwind of petrodollar recycling, is in JPM’s view of secondary importance and is outweighed in size by other institutional or retail investor equity flows, which according to the bank are likely to increase by more than $3 trillion during the last three quarters of 2020 vs. the first quarter. Here, we disagree violently with JPM as the last thing the vast majority of the population – and even the wealthiest 0.1% – will care about is putting their money in the market when they have no idea if they will have a job or what the future holds. Needless to say, if JPMorgan is wrong and this $3 trillion in incremental purchases from institutional and retail sources fails to materialize, the bank’s forecast for new all time highs in early 2021 will be a dream that is as clogged as any pipe heading into Cushing.


    Tyler Durden

    Sat, 04/25/2020 – 19:30

  • "This Is The Final Leg": Hugh Hendry Takes A Break From Retirement To Reveal His Latest Market Thoughts
    “This Is The Final Leg”: Hugh Hendry Takes A Break From Retirement To Reveal His Latest Market Thoughts

    In September 2017, Hugh Hendry stunned the world when, out of the blue one of the best investors of his generation shut down his hedge fund Eclectica (his farewell letter can be found is here) disgusted with how broken and impossible to navigate capital markets had become as a result of central bank intervention and retired to the warm embrace of St Barts, even though it was clear he still had much left to say about the investing process.

    And so, after keeping a low profile for nearly three years, overnight the contrarian investor penned a lengthy tweetstorm from his his brand new twitter account, touching on all the latest market development and laying out some of his latest investing ideas. Below, we have aggregated his thoughts for the benefit of all those curious what the Scotsman thinks about when he is not pursuing his retirement interests which according to this twitter profile include “luxury real-estate, mentoring, and paddle-surfing.”

    Never one to disappoint, Hendry reverts to his macro roots, discussing the fate of gold and the dollar in the helicopter money regime, what it would take for the S&P to hit 10,000, whether the entire VIX regime is now inverted due to central bank backstops, and asks the “two key questions”: are we transcending from a bull market in fear to a bull market in WTF!? And will QE infinity differ from its previous vintages by driving risk asset volatility levels higher??

    Hendry also touches on an old favorite topic, namely hyperinflation, a thesis which he thinks “needs stock prices to fall further and vol to rise in the conventional manner.”  But his most topical observation is what are the core criteria that will allow MMT – i.e., that fusion of the Fed and Treasury known as “helicopter money”…

    you can print as many dollars as you damn well please, as long as the yield curve doesn’t steepen and the dollar doesn’t rally precipitously…you’re good to go and MMT is dope.

    … as the alternative is game over. As usual, his stream of consciousness answers, right or wrong, are fascinating.

    The full stream is reproduced below:

    I have spent last few weeks reminiscing about the launch of The Eclectica Fund way back in 2002. Our principal objective back then was to secure the flexibility of a macro mandate to capture the emerging bull market in gold. The chart is not vol. adjusted but provides context.

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    It’s remarkable how little time i allocated to the trade. We did make 50pc in the first calendar year, 2003, but then retreated as it traded flat vs the total return from the SPX 2004/6. But I do kick myself at missing the final explosive moves to the all time high 2009/12.

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    I’ve had a long sabbatical. If you remember my mantra from 2005 became, “if you fear inflation, buy bonds!” The reasoning being that gold would lack an explosive pulse higher without first an economic calamnity. 2008 proved our thesis and our bond-like positioning hit jackpot.

    Today however, “if you fear inflation then you should buy more gold”. It is simple. The Fed is trying to debase the $ to help the economy. Will it help? Maybe. Will it help the stock market? Probably. Will it help gold? Definitely. This is the final leg that i envisaged in 2002.

    So gold’s got your back. My only grumble is that it reverts to a short volatility asset at the most inopportune moments like October 2008. Many good men, myself included, then missed the real action. So don’t underestimate the emotional energy you’re gonna need to hold onto this.

    I say this because unusual things are happening and I’m saying “what if the bull market in fear has peaked and we find ourselves in a bull market of WTF!?” I traded at start of April a long Aug / Short Oct Vix. I’m small offside. But a 12pc equity rally and vol is up! WTF!?

    I’m fomenting the idea that negative interest rates beget negative oil prices beget negative volatility. The causation is of course totally false but its a cute thing to say nevertheless. Let’s see if i can do better?

    The probabilities are high that gold proves rewarding as long as you can carry it for the duration of the journey. If you are willing to accept lower, much lower probabilities, then maybe there are even better trades that are insanely convex and have no counterparty risk.

    What I want to say is that 2 universal truths might be in the process of changing or flipping around. First, that option skew might change – deep OTM equity puts are typically 2x more expensive than their call equivalents; always have been but not ordained to stay that way. I think today’s policy response could create the opposite dynamic. Difficult trade to structure selling deep OTM SPX puts to buy 2x more calls without risking bankruptcy. Sure trade at cash SPX 1700 but naked and have to experience the nightmare of every point below 1700…no way

    I traded this in Japan in 2013 Sold deep OTM Nikkei put, bought an even deeper OTM put, sold an ATM call spread and bought 15pc OTM call. Or at least I think i did. But the older vintages of QE encouraged volatility to fall, not rise, and we never burst through the inertia.

    The trade was therefore before its time but I am probably one of the few risk managers anywhere with the experience of running a big options/futures book that was seeking higher equity prices and higher volatility – just ask all the Japanese vol traders that I enriched…

    Second, I think the futures curve for VIX is going to trade in backwardation; that the carry from short selling future volatility versus spot to a gullible public that was only too willing to pay almost anything to protect themselves against the next deflationary event has gone.

    The key questions: are we transcending from a bull market in fear to a bull market in WTF!? And will QE infinity differ from its previous vintages by driving risk asset volatility levels higher??

    The key is the dollar. It is to the Fed what the punitive gold reparations of the 1920 Paris Peace Accord were to the German Reichsbank and German stock prices. Which is to say that the Fed are going to have to issue many more trillions of dollars to stop the USD moving higher.

    We were wrong. All of us. It was never going to be about soulless creditors rolling over and simply enriching debtors via paying them higher and higher wages like Henry Ford. No; changes, BIG changes, in major price regimes always begin with currency debasements.

    And, remember that the dollar short is ALWAYS the largest short position. Foreign mismatching of dollar asset/liabilities is always the imperative justification to devalue the dollar to bail-out the rest-of-the-world and it always sets the stage for risk asset prices to recover.

    It’s just that a 35% fall from the highs of the greatest bull market ever has precipitated c. $8trillion in global fiscal response and probably 5x that in its monetary equivalent if we consider swap lines etc with not a day passing where that figure seems like an understatement. And then you look at the charts and to quote Raoul Pal, who else cause he seems omnipresent, but the blinking dollar hasn’t blinked; not an inch, its barely sold off at all…that’s downright frightening.

    And so here is where it gets really cookie for I believe you can’t forecast a risk recovery that witnesses the SPX reclaim its all time high. No. If that’s your mindset you have to imagine 2x or why not 3x? The SPX at 10,000 now that is a WTF idea!?

    And I’m tiring now but I just don’t see that outcome materialising unless we see another profound, I want to say debilitating, decline in the SPX below 1700. That’s why I don’t like the gold trade on its own without some kind of long vol trade to cushion if not enrich the journey.

    So maybe sell dollar cross or treasury vol as these are the naval plimsoll lines of MMT: you can print as many dollars as you damn well please, as long as the yield curve doesn’t steepen and the dollar doesn’t rally precipitously…you’re good to go and MMT is dope.

    So we know the critical lines, the levels that absolutely must not be crossed, they, the authorities, and us, we all know it. The Fed has to, and will do, everything in its powers to flatten the yield curve and prevent the dollar appreciating from here.

    And the consequences of their actions will be to becalm volatility in these assets making them a good source to fund, in the first instance, equity volatility, as I think the hyperinflation thesis needs stock prices to fall further and vol to rise in the conventional manner.

    But should this happen I would want to buy those incredibly cheap Dec 21 3000 calls and forget about funding via selling OTM puts; but I’m getting way to far ahead of myself…you see what confinement does?

    Hendry concludes with some “regional” observations, including what Hendry’s “macro volatility trade at World’s End for years” has been, and which nonetheless are just as interesting:

    Where are all the customers’ yachts? I got to tell you that they seem to be en-route to St Barts. No cases of the virus in over a month on the island and from my vantage point, over-looking the sea, there isn’t a day that passes without another mega yacht sailing past my house.

    The island is hard, almost impossible, to reach, unless you can charter a boat or your very own private jet. But where else would you rather stay if money is no option? The island is on the same time zone as NYC and it has the holy trinity of no debt, no taxes and no crime,

    And you can still finance the purchase of properties here with 20 year €uro loans fixed for less than 2%! That’s not going to last forever…St Barts has been my macro volatility trade at World’s End for years

    Like my German industrialist forefathers – I have no German ancestry ! although my name is derived from the German word hug meaning heart, mind and spirit – but markets, bankers and investors are always slow to recognise a transition to higher prices caused by currency debasement/

    When i was younger i read all  those stories of international investors – the smart ones – hoovering up hard, cash producing German assets, funded by bankers who severely underestimated the potential for increases in interest rates that would make their loan books worthless…

    Yet here we are 100 years later and my friend, who works in a restaurant, just secured 1.35PC fixed for 20 years! These loans are sure to become worthless as the pendulum finally  swings from the creditor to the debtor community. Maybe we’re all bank robbers now…WTF!!

    Still want more? Then listen to the following 12 minute podcast Hendry recorded last week, and where every sentence seems to seep with nostalgia for the Scott’s  glory investing days.

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    Who knows, maybe if the market remains volatile enough, Hugh will come emergy from retirement for another try?

     

     

     


    Tyler Durden

    Sat, 04/25/2020 – 19:04

  • 'Capitalism' On Life Support… Time For A Cure
    ‘Capitalism’ On Life Support… Time For A Cure

    Via The Strategic Culture Foundation,

    The Covid-19 pandemic is unleashing obscene bailouts of Western industries and companies, as well as lifelines for billionaire business magnates.

    It is grotesque that millions of workers are being laid off by corporations which are in turn receiving taxpayer funds. Many of these corporations have stashed trillions of dollars away in tax havens and have contributed zero to the public treasury. Yet they are being bailed out due to shutdowns in the economy over the Covid-19 crisis.

    Why aren’t the banks and corporations being forced by governments to pay for their workers on sick leave or in lockdown?

    It’s because the governments are bought and paid-for servants of the top one per cent. Some political leaders are the embodiment of the one per cent, like Donald Trump and senior members of the U.S. Congress.

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    The biggest orgy of funny money is seen in the U.S. where the Trump administration and Congress have approved the printing of trillions of dollars to prop up corporations and banks. Meanwhile crumbs are being thrown at millions of workers and their families.

    In just five weeks, unemployment has hit a staggering 26.4 million people in the U.S. – and that’s the official figure. The real level is doubtless much higher. It is reported that the job losses have wiped out all the employment gains made over the past decade since the last financial crisis in 2008. As with the present crisis, the U.S. government arranged trillion-dollar bailouts for banks and industries back in 2008-2009. It didn’t last long until the next binge.

    In truth is this is a familiar pattern over the past century where the economy is continually salvaged from ruin by the government at the expense of ordinary workers, small businesses and taxpayers.

    The recurring rescue is proof that the system of private capital and supposed free markets is a myth.

    The system typically privatizes profit for an elite while socializing the losses for the mass of people. It has always been a version of “socialism for the rich”.

    In the distant past the salvaging of broken-down capitalism was at least conducted with a certain degree of democratization and social progress. In the New Deal era of Roosevelt in the 1930s at least government intervention went a long way to restoring workers and their rights, despite bitter opposition from capitalists. Over recent decades, however, the rescuing of capitalism has seen an ever-increasing emphasis on plying money and loans to corporations and investors while ordinary workers are neglected. This process of embezzlement reached new heights in the 2008 crash. Now under Trump the larceny has become legendary. It should be underscored though that the corruption has bipartisan endorsement from Republicans and Democrats. They are really one party beholden to big business.

    As Eric Zuesse commented in an-depth analysis published in our journal this week, the Covid-19 “top-down bailout” in the U.S. will result in even more social inequality and ultimately more dysfunction in the American economy going forward.

    “The outcome will therefore be economic collapse, and perhaps even revolution,” notes Zuesse.

    It is indisputable that capitalism is a failed system both in the U.S. and Europe. The Covid-19 pandemic and its disastrous social impact of sickness and deaths shows that such an economy cannot organize societies based on satisfying human needs. Instead, it functions to continually enrich the already wealthy while creating ever-greater numbers of impoverished and deprived. This chronic polarization of wealth has been pointed out by many critics of capitalism, including Karl Marx, and more contemporaneously by progressive economists like Richard Wolff and Thomas Picketty.

    It is fair to describe corporate capitalism (or socialism for the rich) as a pathology which produces many other pathologies, including deprivation, crime, insecurity, ecological damage, militarism, imperialism and ultimately war.

    Ironically, a virus is exposing the pathological system. And it is, inevitably, forcing a cure to arise.

    It’s time to abolish the parasitical system and implement something more civilized, effective, sustainable and democratic. That is the task of people organized to fight for their interests. The delusion of bailing out a failed and sick system must be shaken off once and for all.


    Tyler Durden

    Sat, 04/25/2020 – 19:00

  • Every Landlord Needs To See This Shocking Chart Before May 1st
    Every Landlord Needs To See This Shocking Chart Before May 1st

    Last week we identified a potential rent strike brewing among the working poor in New York City. Many of these folks are planning to skip out on May 01’s rent payment to their landlords:

    “With so many New Yorkers unable to pay rent for the foreseeable future, the current crisis is unsustainable and demands action,” Housing Justice for All and New York Communities for Change said in a recent statement. “Many tenants have no ability to pay rent, and landlords can’t collect rent from tenants who are broke.”

    Lena Melendez, a rent strike activist, said landlords “have gotten taken care of” by the government, suggesting that poor people who are quarantined in their apartments or homes do not need to pay rent because they have no money.

    And of course, the virus pandemic, triggering mass quarantines and economic depression, has exposed America’s second housing crisis. We recently noted that as many as 30% of Americans with home loans – about 15 million households – could stop paying if lockdowns continued through summer. 

    What’s more important at the moment is that landlords expecting May’s rent next week could be for a rude awakening. Mostly because “rent strike” searches across the internet have exploded in April. 

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    Many of the searches surged in Oregon, New York, Washington, Colorado, and Vermont. 

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    When it comes to subregions, Monterey-Salinas, California; Boise, Idaho; Lansing, Michigan; Savannah, Georgia; and Lexington, Kentucky, saw increased “rent strike” searches over the month. 

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    And so it begins? Rent strikes across America? Or maybe at least starting in New York City first? 


    Tyler Durden

    Sat, 04/25/2020 – 18:30

  • An Egregious Statistical Horror Story
    An Egregious Statistical Horror Story

    Authored by George Gilder via The American Institute for Economic Research,

    With the latest reports of plummeting death rates from all causes, this crisis is over. The pandemic of doom erupted as a panic of pols and is now a comedy of Mash-minded med admins and stooges, covering their ifs, ands, and butts with ever more morbid and distorted statistics.

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    The crisis now will hit the politicians and political Doctor Faucis who gullibly accepted and trumpeted what statistician William Briggs calls “the most colossal and costly blown forecast of all time.”

    An egregious statistical horror story of millions of projected deaths, suffused with incense and lugubrious accents from Imperial College of London to Harvard School of Public Health, prompted the pols to impose a vandalistic lockdown on the economy. It would have been an outrage even if the assumptions were not wildly astronomically wrong.

    Flattening the curve was always a fool’s errand that widened the damage.

    President Trump had better take notice. He will soon own this gigantic botch of policy and leadership. No one will notice that his opponents urged even more panicky blunders.

    The latest figures on overall death rates from all causes show no increase at all. Deaths are lower than in 2019, 2018, 2017 and 2015, slightly higher than in 2016. Any upward bias is imparted by population growth.

    Now writing a book on the crisis with bestselling author Jay Richards, Briggs concludes:

    “Since pneumonia deaths are up, yet all deaths are down, it must mean people are being recorded as dying from other things at smaller rates than usual.”

    Deaths from other causes are simply being ascribed to the coronavirus.

    As usual every year, deaths began trending downward in January. It’s an annual pattern. Look it up. Since the lockdown began in mid-March, the politicians cannot claim that their policies had anything to do with the declining death rate.

    A global study published in Israel by Professor Isaac Ben-Israel, chairman of the Israeli Space Agency and Council on Research and Development, shows that “the spread of the coronavirus declines to almost zero after 70 days—no matter where it strikes, and no matter what measures governments impose to try to thwart it.”

    In fact, by impeding herd immunity, particularly among students and other non-susceptible young people, the lockdown in the U.S. has prolonged and exacerbated the medical problem. As Briggs concludes, “People need to get out into virus-killing sunshine and germicidal air.”

    This flu like all previous viral flues will give way only to herd immunity, whether through natural propagation of an extremely infectious pathogen, or through the success of one of the hundreds of vaccine projects.

    No evidence indicates that this flu was exceptionally dangerous. On March 20th, the French published a major controlled study that shows no excess mortality at all from coronavirus compared to other flues. SARS and Mers were both much more lethal and did not occasion what Briggs’ reader “Uncle Dave” described as “taking a hammer and sickle to the economy.”

    We now know that the crisis was a comedy of errors.

    The Chinese let it get going in the raw bat markets of Wuhan. But together with the Koreans, the Chinese dithered and demurred and allowed six weeks of rampant propagation to create herd immunity before they began locking everyone up.

    Therefore, the Chinese and Koreans were among the first to recover.

    The Italians scared everybody with their haphazard health system and smoking fogies.

    Crammed together in subways and tenements, the New Yorkers registered a brief blip of extreme cases.

    Intubations and ventilators turned out not to help (80 percent died).

    This sowed fear and frustration among medical personnel slow to see that the problem was impaired hemogloblin in the blood rather than lung damage.

    The New York media piled on with panic, with bogus reports of rising deaths. “Coronavirus deaths” soared by assuming that people dying with the virus were dying from it and then by ascribing to the coronavirus other deaths among people with symptoms of pulmonary distress, even without being tested.

    Now jacking up the case rate will be further pointless testing. As Briggs points out,

    “Fauci is calling for ‘tripling’ of testing, which can only boost these dailies [case totals]. And make it seem like there’s a genuine increase occurring. Oh my! The daily reported cases are up! It must mean the disease is spreading!

    “No. It could also mean, and probably does given all the other evidence we now have from sampling, that the disease was already there, and we just now have measured it.”

    The death rate rises with further reclassification of pneumonia and other pulmonary deaths. When we reach herd immunity, and nearly everyone has the antigen, nearly all deaths can be chalked up to COVID19. Hey, it will be Quod Erat Demonstrandum for the panic mongers.

    In a fascinating open letter to German Prime Minister Angela Merkel, epidemiologist Mihai Grigoriu concludes that with the French study, corroborated by findings from a Stanford antibody seroprevalence study in Santa Clara county, “the case for extreme measures collapses like a house of cards.” Grigoriu says that since the virus has already spread widely in the general population, efforts to stop further spread are both futile and destructive.

    So let’s stop pretending that our policies have been rational and need to be phased out, as if they once had a purpose. They should be reversed summarily and acknowledged to be a mistake, perpetrated by statisticians with erroneous computer models.

    Perhaps then we can learn from this experience with the flaws of expertise not to shut down the economy again for the totally bogus “crisis” of climate change.


    Tyler Durden

    Sat, 04/25/2020 – 18:00

  • "They've Got To Feed Their Children" – Cash-Strapped Businesses Reopen In Georgia As 16 States Join Push To End Lockdowns
    “They’ve Got To Feed Their Children” – Cash-Strapped Businesses Reopen In Georgia As 16 States Join Push To End Lockdowns

    Across the US, 16 states are moving to reopen more nonessential businesses as thousands protest around the country demanding that the country be reopened now, even as governors like Andrew Cuomo advise that a recent slowdown in deaths and diagnoses suggests the lockdown is working well.

    Of these, Georgia has emerged as the most aggressive, with Gov. Brian Kemp allowing the first ‘nonessential’ businesses – a group including salons, bowling allies, tattoo parlors and gyms – to reopen.  Even President Trump is now denying that he supported Kemp’s plan, a disavowal that was reportedly news to Kemp.

    Mayors from the across state have warned residents that it’s too soon to return to some semblance of normal, and have urged businesses to remain close, and people to remain indoors. In many areas, as the Washington Post reported Saturday, businesses appear to be following this advice.

    And even the businesses that have opened aren’t operating at anything approaching full capacity, employees don masks and take other steps to ensure social distancing is maintained.

    Atlanta Mayor Keisha Lance Bottoms appeared on CNN to clear up the “confusion” that she was was putting her voters’ lives at risk: Instead, she said that businesses and individuals should ignore Kemp’s order, adding that “nothing has changed.” 

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    She declared that the 37% increase in Georgia’s mortality rate over the last week is a clear indication that the state ‘isn’t ready’ to reopen.

    “We are not on the other side of this,” Bottoms said. “It’s like we are in a tunnel, and rather than walking straight toward the light, we’re spinning around in circles. We’ll never get to the light if we don’t continue to do what we’ve done thus far, and that’s to separate ourselves socially from one another.”

    In Waycross, the county seat of Ware County, one salon owner told WaPo that the only people working on Friday and Saturday were those who absolutely needed to.

    Only a handful of the 18 hairdressers who work at Salon Cheveux came in on Friday. They donned masks, spaced their workstations apart and screened inbound customers by phone with the dedication of hospital admission nurses: Any fever recently? Or contact with someone sick? Can you wear a mask?

    It was the first day businesses reopened in Georgia, which is moving faster than any other state to ease restrictions amid the novel coronavirus pandemic. As a result, Georgia has become a flash point in the battle over whether it is time to remove the shutdown orders that have kept much of the country indoors.

    Jamie McQuaig glanced at the two cosmetologists, clad in masks, coloring customers’ hair and wondered whether coming back to work was the right decision for her family, her salon or her state.

    “I do feel like it’s too soon, but it will probably always feel like it’s too soon because we’re all scared of the virus,” she said. The nation’s response to the pandemic has left many in her shop with difficult choices. “The ones that are going back to work right now are the ones that have got to. They’ve got to feed their children. They’ve got to pay their mortgage.”

    Local officials in one particularly hard hit county have been begging Kemp to carve out an exemption for them, but he has so far refused.

    If he doesn’t, those ‘hot spots’ could swiftly reinfect the entire state. In Albany, Georgia, a small city with an extraordinarily high number of cases per capita, the mayor, Bo Dorough said he continues to warn residents to stay inside and practice social distancing. 

    The worst outbreak in the state is still raging in Dougherty County, where Albany is located. The county has a population of about 88,000, and the Georgia Department of Health has reported 1,465 confirmed cases of the virus and 108 deaths as of Friday evening. That means more than 1% of the county’s population is currently infected.

    For a time, Dougherty County had the unwelcome distinction of having one of the highest number of per capita cases in the country.

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    The virus ripped across the county after two widely attended funerals. One attendee, a 67-year-old man, who was at both funerals, later tested positive, setting off what’s called the “domino effect,” according to CNN.

    Those Georgians who are returning to work have apparently accepted that they’re guinea pigs in a great national experiment with incredibly high stakes.

    After weeks of unemployment, often with uneven government help, some said they were happy to be earning paychecks but worry about the ultimate costs of abandoning isolation too soon, according to the Washington Post.

    But they won’t be the only ones for long. Tennessee’s governor has said he will allow many businesses to reopen after his shelter-in-place order expires next week. The governor of South Carolina has already said he will allow some retail stores to reopen this week. People have been walking on the beaches near Jacksonville, Fla., for a week, and on Friday, Iowa and Mississippi became the latest states to announce plans to reopen.

    As of Saturday, there were nearly 4,500 confirmed in Iowa, and yet, Gov. Kim Reynolds has said she will consider reopening more businesses, while reversing a ban on hospitals performing non-essential surgeries. And in Mississippi, which has more than 5,400 confirmed Covid-19 cases, Gov. Tate Reeves has traded the4 state’s lockdown order for a “safer-at-home” order, which will remain in effect for two weeks, beginning Monday.

    Across Georgia, more than 22,000 people have tested positive and nearly 900 have died. The state has tested < 1% of its residents.

    Trump was correct when he said on Thursday that Georgia hasn’t met the benchmarks released by the White House. They include a downward trajectory of confirmed cases over 14 days.

    Here’s a map of the US breaking down what various states are planning, courtesy of the NYT:

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    The big question looking ahead: Will Georgia’s decision make the state look like Sweden, or Wuhan?

    Because it’s extremely likely that it’ll be one, or the other.


    Tyler Durden

    Sat, 04/25/2020 – 17:35

  • Global Coronavirus Deaths Top 200k: Live Updates
    Global Coronavirus Deaths Top 200k: Live Updates

    Summary:

    • WHO warns against “immunity passports”
    • Global case total nears 2.8 million, deaths near 200k
    • Brussels relaxes rules on state financing for companies
    • Global Times editor continues to dunk on the president
    • US death toll passes 50k while total cases passes 900k 
    • Trump admin decides against participating in global vaccine and drug initiative organized by the WHO
    • 107-year-old Spanish woman who survived Spanish flu also beat coronavirus
    • Oregon finds its distancing measures may have prevented 70k infections
    • New York reports 437 deaths as Cuomo signs order to start testing in pharmacies
    • UK deaths surpass 20k
    • Trump slams WSJ editorial board
    • Global single-day deaths declined for third-straight day on Friday
    • Internet traffic is up 20% across Europe and US as lockdowns drag on
    • Spain sees promising decline in deaths
    • Former UK Chancellor urges gov’t to share plan for reopening with the people

    *       *       *

    Update (1615ET): Illinois just reported its latest numbers:

    • ILLINOIS REPORTS 80 ADDITIONAL CORONAVIRUS DEATHS TO TOTAL OF 1,874 – STATE OFFICIAL

    Update (1540ET): After Spain reported yet another batch of promising numbers suggesting Europe’s deadliest outbreak is truly waning, PM Pedro Sanchez announced Saturday that his government would loosen the lockdown to allow for more outdoor exercise by May 2 if the numbers continue to fall.

    Meanwhile, a Spanish woman who who is 107 years old and reportedly survived the Spanish flu in 1918 has now also beaten the coronvirus in the latest example of a centenarian being infected and surviving.

    The Spanish Flu was known to also infect children and infants – something that scientists aren’t sure about in regards to the coronavirus. Actually, research continues to try and determine if closing schools is worthwhile in terms of the disruptive impact it has on the economy.

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    And in the latest report about young people either exhibiting strange reactions to the virus, or facing strange and sometimes lethal afflictions that have little to do with the cardiovascular system, WaPo says that a surprising number of COVID-19 patients in their 30s and 40s have been dying of strokes.

    *       *       *

    Update (1400ET): In the latest global milestone, the number of coronavirus deaths has surpassed 200k.

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    Meanwhile, GT editor Hu Xijin continues to dunk on the president.

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    Update (1345ET): In a decision that will undoubtedly outrage liberals, the US has decided against taking part in a global initiative on Friday to speed the development, production and distribution of drugs and vaccines against COVID-19, a spokesman for the U.S. mission in Geneva told Reuters.

    “There will be no U.S. official participation,” he said in an email reply to a query. “We look forward to learning more about this initiative in support of international cooperation to develop a vaccine for COVID-19 as soon as possible.”

    In other news, for every American European with cabin fever, this is what Causeway Bay in Hong Kong looked like on Saturday.

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    Update (1340ET): The UK Department of Health and Social Care just released the latest figures from the battle against COVID-19, confirming what was widely expected: The UK has become the latest country to see its death toll surpass 20k as another 813 deaths, bringing the total to 20,380. All told, the UK has reported 149,554 cases.

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    As one FT reporter explains, roughly 150 of these deaths occurred before April 6, but are only just now being counted.

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    Watch the latest coronavirus presser below:

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    During the briefing, Home Secretary Priti Patel described the country’s latest grim milestone as “deeply tragic and moving moment” and warned that “we are not out of the woods yet.” The Home Secretary also used the daily press briefing at Downing Street to warn criminals that “our outstanding police and law enforcement agencies are absolutely on to you.”

    *       *       *

    Update (1220ET): As Italians everywhere celebrate italy’s “Liberation Day” – the date of the Italians’ victory over fascism – the Civil Protection Service reports another decline in new cases and deaths. The total number of confirmed cases in Italy climbed to 195,351 on Friday, up +1,22%, or 2,357, roughly even with the average pace from the last few days, while the death toll climbed 1.6% to 26,384 after breaking above the 25k mark a day earlier.

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    The number of hospitalizations, and the number of patients in intensive care, both continued to fall, with the number of patients listed as officially recovered once again nearly equaling the number of day yesterday.

    In Washington, President Trump has apparently taken umbrage with a recent WSJ editorial that failed to make it completely clear that Trump did not approve of the governor’s decision to reopen.

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    Something that was news to the governor when Trump first said it Thursday night.

    *       *       *

    Update (1200ET): New York Governor Andrew Cuomo started his Saturday press briefing by announcing his plans to sign an executive order allowing independent pharmacists to carry out coronavirus tests, making New York State the first in the country to embrace technology and protocols allowing more tests to be conducted outside hospital and clinical care settings.

    It’s all part of Cuomo’s attempt to implement mass surveillance testing in the state, a long-term strategy to keep numbers down.

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    Cuomo also reported 437 deaths over the last 24 hours, a slight increase over the prior day, but still in keeping with the recent trend of fewer than 500 deaths per day, roughly half the level from the ‘peak’ earlier this month.

    • NEW YORK GOVERNOR CUOMO SAYS TO SIGN EXECUTIVE ORDER ALLOWING INDEPENDENT PHARMACISTS TO CONDUCT CORONAVIRUS TESTS
    • NEW YORK STATEWIDE TOTAL CORONAVIRUS HOSPITALIZATIONS FALL TO SAME LEVEL AS 21 DAYS AGO – GOVERNOR CUOMO
    • NEW YORK STATEWIDE CORONAVIRUS DEATHS RISE BY 437 ON APRIL 24, VS INCREASE OF 422 A DAY EARLIER – GOVERNOR CUOMO
    • NEW YORK NEW COVID-19 HOSPITAL PATIENTS HAS FALLEN TO ABOUT 1,100 PER DAY, VS AROUND 1,300 PREVIOUSLY
    • NEW YORK GOVERNOR SAYS TO EXPAND TESTING CRITERIA TO INCLUDE MORE NEW YORKERS, STARTING WITH FIRST RESPONDERS AND OTHER ESSENTIAL WORKERS

    Hospitalizations also continued to decline, as capacity increased to its highest level in 3 weeks.

    Watch Cuomo live:

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    Bill Gates might want to rethink his decision to firmly defend the WHO against President Trump’s decision to defund the organization – technically an arm of the UN – over allegations that it aided China’s initial dissembling about the virus.

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    Gates and others have loudly cheered the expansion of surveillance methods to aid in efforts like ‘contact tracing’ and other advanced techniques to try and track who may or may not have been exposed to the virus. Many proponents of civil liberties, meanwhile, have argued that some of the more extreme measures in play offer little benefit in exchange for such a dramatic expansion of the security state.

    One of this movement’s favorite proposals is the “immunity passport”, which would, in theory, allow those who are theoretically immune go about their lives while everybody else remains stuck inside.

    In an announcement early Saturday in Europe, the WHO warned members against issuing so-called “immunity passports”, essentially a document allowing individuals who test positive for coronavirus antibodies to return to work. The organization explained that – as we’ve noted numerous times over the past few months – there’s no actual evidence that patients with antibodies – including those who’ve recovered from the virus, a group that includes at least 800,000 people – will be immune to reinfection.

    “There is currently no evidence that people who have recovered from Covid-19 and have antibodies are protected from a second infection,” the WHO said. The health agency said it is reviewing the evidence on whether people who recover from Covid-19 become immune, but that there are no studies on whether the presence of antibodies indicates immunity in humans. It said giving people who have antibodies special rights to travel or work “may therefore increase the risks of continued transmission.”

    Of course, that’s bad news for everybody who hoped that ‘anitbody testing’ would save us from the ‘rona.

    Meanwhile, the number of confirmed coronavirus cases continues to expand at a roughly steady pace. Thankfully, the surge in daily fatalities observed over the past 2 weeks has finally begun to subside.

    The FT reports that the worldwide COVID-19 death toll has risen by 6,182 on Friday to stand at 182,690. This is the third consecutive day where the number of new deaths has been lower than the previous day.

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    Still, if this pace of expansion continues, we should expect to see the global total pass the 3 million mark by Tuesday, if not earlier. Public health authorities from around the world reported 105,825 new cases yesterday, bringing the total to 2.76 million, according to data from Worldometers.

    The global death toll is rapidly approaching 200k, with the US is responsible for 25% of them. As businesses in Georgia continue to reopen, the White House is debating a new legal liability shield for American businesses to prevent them from being sued over the coronavirus.

    In the US, the number of deaths passed 50k on Friday while the case total passed 900k early Saturday, leaving the country well on the way to the 1 million case mark. The US would be the first country to report 1 million confirmed cases. 

    In Brussels, bureaucrats have rushed to relax state aid rules, and regulators have approved a series of multi-billion-euro schemes to allow member states to extend financing to companies – in some cases via direct equity injections – to help them weather the pandemic. Although leaders of both factions have told reporters that important progress was made at Thursday’s virtual summit to work out the details of a massive pan-European relief program to help the worst-hit governments in the bloc. As one might expect, German and a handful of wealthy northern states have gotten into an intense disagreement with the poorer, worst-hit southern states (Spain, Italy joined in this instance by Emmanuel Macron’s France) over how the program should be financed, and whether the loans should come in the form of loans, or outright grants.

    As the country with the highest mortality rate in Europe, Spain has eased its lockdown measures only slightly, while warning that the current target date to begin reopening is May 9. But in a promising bit of news, the country reported fewer than 400 fatalities for the second consecutive day on Saturday (the count was accurate as of 9pm Madrid Time Friday) while the spread of new cases has also slowed.

    Across Europe and the US, Internet traffic is up 20%, according to the FT and Media analytics group ComScore, which measured the number of unique page views and compared it with an “average” benchmark across several key markets.

    With no end to a strict national lockdown in sight, millions of Britons are starting to get a little squirrely. To try to assuage these anxieties, former UK Chancellor Philip Hammond has suggested that No. 10 share its plan for reopening the economy with the public.

    “The reality is that we have to start reopening the economy but we have to do it living with Covid,” Mr Hammond told BBC’s Today. “We can’t wait until a vaccine is developed… and rolled out across the population. The economy won’t survive that long.”

    Now that the pace of new cases and deaths has slowed, it’s clear that lockdowns and social distancing measures are pretty effective at slowing the virus’s spread, which – remember – is the whole point of this: Eventually, scientists say, much of the global population will be exposed to this virus. It’s just a question of whether that’s going to happen over a few years, or a few months. In the latest positive indication, Oregon health officials have found that their state’s aggressive social distancing measures may have prevented more than 70,000 cases since early March.


    Tyler Durden

    Sat, 04/25/2020 – 17:25

  • How Shutdowns Will Keep Killing The Economy, Even When They're Over
    How Shutdowns Will Keep Killing The Economy, Even When They’re Over

    Authored by Ryan McMaken via The Mises Institute,

    Imagine what it is like right now to plan for the future as a business owner. The owner doesn’t know if he or she will even be allowed to be open for business two weeks from now, or a month from now.

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    Indeed, politicians and their unelected (and unaccountable) health advisors keep insisting that they might elect to close down businesses or impose new restrictions on large portions of the economy at any time.

    The uncertainly associated with all this is immense. Consider some examples: thanks to moratoria on evictions in many cities, renters who can’t pay rent — thanks in part to government-forced lockdowns — can stay in their rental units indefinitely. Landlords have no idea when they will next be able to actually collect revenues again from paying customers. Meanwhile, “elective” healthcare services like eye care and dental care have been deemed “unessential” by bureaucrats and governors in many states. These offices will be closed and collecting little-to-no revenue. Restaurants, of course, aren’t permitted to do business beyond take-out service in places with lockdowns. (Although these restaurants still have to pay rent for their dining rooms.)

    Even beyond the short term, business owners have no way to plan. If a business owner is allowed to actually conduct business during the summertime this year, it may still be that politicians will later elect to shut businesses whenever it is decided the risk of spreading viruses demands another “shutdown.” We’re even told this could go on for years.

    One would have to be impressively naive and deeply ignorant about how businesses work to think that commerce, investment, and entrepreneurship would just continue as usual under these conditions. In reality,  the threat of a government-mandated lockdown hanging over the heads of countless business owners and entrepreneurs will mean there will be far less willingness and ability to invest in businesses, offer products and services, or employ people.

    The Problem with Regime Uncertainty

    This problem has a name: “regime uncertainty.” Economic historian Robert Higgs defines it as “a pervasive lack of confidence among investors in their ability to foresee the extent to which future government actions will alter their private-property rights.”

    Broadly understood, of course, “investing” isn’t just a matter of people putting money in mutual funds or buying municipal bonds. “Investors” are people who buy and manage apartment buildings. Investors include doctors and dentists who invest enormous amounts of time and money into a private healthcare office. Investors are people who put their life savings into starting a new restaurant or tavern.

    As Higgs has shown, when the legal environment and property rights can be so radically altered so quickly, economic growth slows and economic depressions are drawn out and made worse.

    Specifically, Higgs has illustrated that regime uncertainty was a significant factor in making the Great Depression such a long and unpleasant affair. The Roosevelt administration’s numerous and enormous changes to the legal regime — through new taxes, regulations, and labor laws — made the Depression far worse than it needed to be. Higgs explains how thanks to a multitude of state interventions during the Depression:

    the Roosevelt administration “abruptly and dramatically altered the institutional framework within which private business decisions were made, not just once but several times” … with the result that regime uncertainty was heightened and recovery substantially retarded.

    As one investor at the time observed:

    Uncertainty rules the tax situation, the labor situation, the monetary situation, and practically every legal condition under which industry must operate. Are taxes to go higher, lower or stay where they are? We don’t know. Is labor to be union or nonunion?… Are we to have inflation or deflation, more government spending or less?… Are new restrictions to be placed on capital, new limits on profits?… It is impossible to even guess at the answers.

    The result was “the New Deal prolonged the Great Depression by creating an extraordinarily high degree of regime uncertainty in the minds of investors.”

    The recovery was slowed, of course, because investing, building businesses, and engaging in innovation became far riskier and unpredictable thanks to the chances that governments might once again impose draconian new restrictions on businesses. This changed the calculus completely.

    Regime Uncertainty vs. Regular Uncertainty

    Admittedly, even in a laissez-faire policy regime, it is more difficult for investors to calculate risk and future conditions when consumers and employees become far more fearful about an outbreak of disease. But, as Brendan Brown notes, private firms are likely to adjust quickly to attempt to address the needs of consumers who may now demand less crowded rooms and more “precautions.” Uncertainty is always a problem for investors and entrepreneurs. But regime uncertainty is worse because it limits the ability of property owners to adapt. Regime uncertainty also tends to be done in a haphazard and arbitrary way across a multitude of markets. 

    Consumers will still drive some owners out of business because consumers constantly change their demands and values.  On a whim, consumers may decide to spend their money elsewhere.  But in an unhampered market, businesses and investors can learn from watching others, plan for the future in their specific markets, and adjust accordingly. Unlike governments in the business of ruling by decree, investors and business owners seek to serve as wide a swath of the public as possible.

    But this sort of flexibility is destroyed when governments impose lockdowns. There is no learning and no adjusting. Statewide lockdowns don’t take into account diversity in health, demographics, and market conditions.  Instead economic activity is halted in a one-size-fits-all fashion based on what politicians — not consumers, mind you — deem to be “essential.” Even worse, changes can be be quickly imposed by a small handful of policymakers without public debate or consultation. There is no time for businesses to adjust.

    This is far worse than any ordinary market shock.

    Wall Street vs. Main Street, Again

    Ultimately, this process will also accelerate wealth inequality by contributing to the further financialization of the economy. Thanks to the maximization of the “too big to fail” narrative at the Fed and in Washington, the financial sector continues to grow as the safe go-to place for investment. Why invest in community businesses and small medical firms when it is much lower risk to invest in a bank or a financial firm that’s sure to be bailed out? The constant threat of forced shutdowns makes this risk assessment even more stark: non-financial firms can be shut down and destroyed at any time. But Wall Street will be bailed out.

    Since the financial sector employs a relatively small number of people, this shutdown-bailout dichotomy means employment will suffer. It means the working class and the middle class will suffer. It means people with sizable Wall Street portfolios will benefit while Main Street businesses go bankrupt.

    But even Wall Street will eventually suffer because an economy cannot survive on bailouts forever. At some point, people have to produce actual goods and services. This requires capital. It requires planning. It requires many things that arbitrary shutdowns make far more difficult to find.


    Tyler Durden

    Sat, 04/25/2020 – 17:10

  • "It's '08 All Over Again" – Carl Icahn Warns Investors "Be Extremely Careful"
    “It’s ’08 All Over Again” – Carl Icahn Warns Investors “Be Extremely Careful”

    Some people are intentionally hoarding toilet paper; others are stockpiling hand sanitizers and masks; and the glut of oil around world grows concerningly higher day after day. But, while stock markets rebound by the most ever (after their fastest collapse ever), there is (at least) one billionaire investor who is not buying it and instead is hoarding something else in readiness for what comes next… 

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    In an insightful (and unusual for mainstream business media) interview with Bloomberg TV, Carl Icahn isn’t buying stocks right now. He’s hoarding cash, shorting commercial real estate and preparing for COVID-19 to wreak more havoc.

    This is a time to be “extremely careful,” Icahn said in an interview Friday on Bloomberg Television.

    The 84-year-old’s reasoning is simple – and terrifying for the average commission-raker and asset-gatherer – having traded through every stock-market crash since the Great Depression, the future is just too unpredictable for the S&P 500 to be trading at almost 20 times next 12m earnings estimates…

    “You cannot really justify that multiple,” Icahn said.

    “Short-term, you may have some big downdrafts.”

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    Source: Bloomberg

    Unlike Boeing, IBM, and, the airlines, and cruise lines, the veteran investors hasn’t blown through his cash in recent years chasing dreams, he has instead been preparing and building cash positions – what he says he always keeps for “a stormy day.”

    His thesis is straight forward – he disagrees with the market’s apparent belief that we will ‘return to normal’ sometime soon and everything that was will be again.

    Having donated over $200 million to the medical school at Mount Sinai Hospital in New York, the 1980s corporate raider says he has been talking to “some of the smartest guys in this area” and formed an opinion of the virus that doesn’t leave him optimistic.

    He’s concerned about recurrences of infection and believes the economy will reopen in “spurts.”

    “It’s not like turning on a spigot,” he said.

    However, there are opportunities amid the carnage as Icahn took advantage of the recent collapse in crude oil prices with a secondary trade, as Bloomberg details:

    Because refiner CVR constantly needs oil to supply its two refineries, Icahn realized he could use it to profit from the frenzy. He said he instructed the Sugar Land, Texas-based company to make space in its storage tanks and put in orders for 1 million to 2 million barrels at negative prices he doesn’t expect ever to see again.

    We made some money on it,” Icahn said in an interview Friday with Bloomberg Television.

    “We did get a fair amount.”

    You’ll never see that again in history,” Icahn said.

    But, while that opportunistic position was quickly taken advantage of, Icahn’s largest position is a multibillion bet he initiated in mid-2019 against the CMBX 6, an index of commercial real estate mortgage-backed securities that should be very familiar to ZeroHedge readers:

    Back in March 2017, a bearish trade emerged which quickly gained popularity on Wall Street, and promptly received the moniker “The Next Big Short.”

    As we reported at the time, similar to the run-up to the housing debacle, a small number of bearish funds were positioning to profit from a “retail apocalypse” that could spur a wave of defaults. Their target: securities backed not by subprime mortgages, but by loans taken out by beleaguered mall and shopping center operators which had fallen victim to the Amazon juggernaut. And as bad news piled up for anchor chains like Macy’s and J.C. Penney, bearish bets against commercial mortgage-backed securities kept rising.

    The trade was simple: shorting malls by going long default risk via CMBX 6 (BBB- or BB) or otherwise shorting the CMBS complex. For those who have not read our previous reports (here, here, here, here, here, here and here) on the second Big Short, here is a brief rundown via the Journal:

    each side of the trade is speculating on the direction of an index, called CMBX 6, which tracks the value of 25 commercial-mortgage-backed securities, or CMBS. The index has grabbed investor attention because it has significant exposure to loans made in 2012 to malls that lately have been running into difficulties. Bulls profit when the index rises and shorts make money when it falls.

    The various CMBX series are shown in the chart below, with the notorious CMBX 6 most notable for its substantial, 40% exposure to retail properties.

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    One of the firms that had put on the “Big Short 2” trade back in late 2016 was hedge fund Alder Hill Management – an outfit started by protégés of hedge-fund billionaire David Tepper – which ramped up wagers against the mall bonds. Alder Hill joined other traders which in early 2017 bought a net $985 million contracts that targeted the two riskiest types of CMBS.

    “These malls are dying, and we see very limited prospect of a turnaround in performance,” said a January 2017 report from Alder Hill, which began shorting the securities.

    “We expect 2017 to be a tipping point.”

    Alas, Alder Hill was wrong, because while the deluge of retail bankruptcies…

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    … and mall vacancies accelerated since then, hitting an all time high in 2019…

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    …  not only was 2017 not a tipping point, but the trade failed to generate the kinds of desired mass defaults that the shorters were betting on, while the negative carry associated with the short hurt many of those who were hoping for quick riches.

    One of them was investing legend Carl Icahn who as we reported last November, emerged as one of the big fans of the “Big Short 2“, although as even he found out, CMBX was a very painful short as it was not reflecting fundamentals, but merely the overall euphoria sweeping the market and record Fed bubble (very much like most other shorts in the past decade). The result was what we said four months ago was “tens if not hundreds of millions in losses so far” for the storied corporate raider.

    That said, while Carl Icahn was far from shutting down his family office because one particular trade has gone against him, this trade put him on a collision course with two of the largest money managers, including Putnam Investments and AllianceBernstein, which for the past few years had a bullish view on malls and had taken the other side of the Big Short/CMBX trade, the WSJ reports. This face-off, in the words of Dan McNamara a principal at the NY-based MP Securitized Credit Partners, was “the biggest battle in the mortgage bond market today” adding that the showdown is the talk of this corner of the bond market, where more than $10 billion of potential profits are at stake on an obscure index.

    However, as they say, good things come to those who wait, and are willing to shoulder big losses as they wait for a massive payoffs, and for the likes of Carl Icahn, McNamara and others who were short the CMBX, payday has just arrived.

    Behold the CMBX as it stands now: 

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    That, in the parlance of our times, is what traders call a “jackpot.”

    The epic crash in the CMBX 6 BBB (the junk-rated BB tranche has fallen 25% in the past fortnight) meant all those shorts who for years suffered the slings and stones of outrageous margin calls but held on to this “big short”, are about to get very rich (and in the case of Icahn, even richer) it has also means the pain is just starting for all those “superstar” funds on the other side of the trade who were long CMBX over the past few years, collecting pennies and clipping coupons in front of a P&L mauling steamroller.

    One of them, as noted above, is mutual fund giant AllianceBernstein, which has suffered massive paper losses on the trade, amid soaring fears that the coronavirus pandemic is the straw on the camel’s back that will finally cripple US shopping malls whose debt is now expected to default en masse.

    According to the FT, more than two dozen funds managed by AllianceBernstein have sold over $4 billion worth of CMBX protection to the likes of Icahn. One among them is AllianceBernstein’s $29 billion American Income Portfolio, which is down 15% since the beginning of March, having written $1.9bn of protection on CMBX 6, while some of the group’s smaller funds have higher concentrations.

    The trade reflected AB’s conviction that American malls are “evolving, not dying,” as the firm put it last October, in a paper entitled “The Real Story Behind the CMBX. 6: Debunking the Next ‘Big Short’” (reader can get some cheap laughs courtesy of Brian Philips, AB’s CRE Credit Research Director, at this link).

    Hilariously, that paper quietly “disappeared” from AllianceBernstein’s website, but magically reappeared on Friday, shortly after the Financial Times asked about it.

    “We definitely still like this,” said Gershon Distenfeld, AllianceBernstein’s co-head of fixed income. “You can expect this will be on the potential list of things we might buy [more of].”

    Sure, quadruple down, why not. Meanwhile, one of America’s biggest mall operators, Simon Property Group, has closed all its US properties until March 29, and it is unclear not only when it will reopen but what viable tenants it will still have that are able and willing to pay rent. For a broader perspective on what Simon has to look forward to when it reopens, read “Widespread Panic” Hits Commercial Property Markets: Deals Implode, Renters Disappear, Businesses Shut Down”.

    Good luck on the quadruple down – as Icahn notes of the “mall short” – the more the pandemic slows economic activity and drives consumers to shop online, the greater the chances that some of those loans will default.

    “It’s ‘08 all over again,” Icahn said, likening the trade to wagers that paid off massively when subprime mortgage debt collapsed more than a decade ago.

    In which case, as we noted at the very beginning, Icahn’s warning to investors to be “extremely careful” would seem very timely.


    Tyler Durden

    Sat, 04/25/2020 – 16:45

Digest powered by RSS Digest

Apr 25

Today’s News 25th April 2020

  • How The "West Point Mafia" Runs Washington
    How The “West Point Mafia” Runs Washington

    Authored by Danny Sjursen via TomDispatch.com,

    Every West Point class votes on an official motto. Most are then inscribed on their class rings. Hence, the pejorative West Point label “ring knocker.” (As legend has it, at military meetings a West Pointer “need only knock his large ring on the table and all Pointers present are obliged to rally to his point of view.”) Last August, the class of 2023 announced theirs: “Freedom Is Not Free.” Mine from the class of 2005 was “Keeping Freedom Alive.” Each class takes pride in its motto and, at least theoretically, aspires to live according to its sentiments, while championing the accomplishments of fellow graduates.

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    But some cohorts do stand out. Take the class of 1986 (“Courage Never Quits”). As it happens, both Secretary of Defense Mark Esper and Secretary of State Mike Pompeo are members of that very class, as are a surprisingly wide range of influential leaders in Congress, corporate America, the Pentagon, the defense industry, lobbying firms, big pharma, high-end financial services, and even security-consulting firms. Still, given their striking hawkishness on the subject of American war-making, Esper and Pompeo rise above the rest. Even in a pandemic, they are as good as their class motto. When it comes to this country’s wars, neither of them ever quits.

    Once upon a time, retired Lt. Gen. Douglas Lute (Class of ’75), a former US Ambassador to NATO and a senior commander in Iraq and Afghanistan, taught both Esper and Pompeo in his West Point social sciences class. However, it was Pompeo, the class of ’86 valedictorian, whom Lute singled out for praise, remembering him as “a very strong student—fastidious, deliberate.” Of course, as the Afghanistan Papers, released by The Washington Post late last year, so starkly revealed, Lute told an interviewer that, like so many US officials, he “didn’t have the foggiest notion of what we were undertaking in Afghanistan.” Though at one point he was President George W. Bush’s “Afghan war czar,” the general never expressed such doubts publicly and his record of dissent is hardly an impressive one. Still, on one point at least, Lute was on target: Esper and Pompeo are smart, and that’s what worries me (as in the phrase “too smart for their own good”).

    Esper, a former Raytheon lobbyist, had particularly hawkish views on Russia and China before he ever took over at the Pentagon and he wasn’t alone when it came to the urge to continue America’s wars. Pompeo, then a congressman, exhibited a striking pre–Trump era foreign policy pugnacity, particularly vis-à-vis the Islamic world. It has since solidified into a veritable obsession with toppling the Iranian regime.

    Their militarized obsessions have recently taken striking form in two ways: The secretary of defense instructed US commanders to prepare plans to escalate combat against Iranian-backed militias in Iraq, an order the mission’s senior leader there, Lt. Gen. Robert “Pat” White, reportedly resisted; meanwhile, the secretary of state evidently is eager to convince President Trump to use the Covid-19 pandemic, now devastating Iran, to bomb that country and further strangle it with sanctions. Worse yet, Pompeo might be just cunning enough to convince his ill-informed, insecure boss (so open to clever flattery) that war is the answer.

    The militarism of both men matters greatly, but they hardly pilot the ship of state alone, any more than Trump does (whatever he thinks). Would that it were the case. Sadly, even if voters threw them all out, the disease runs much deeper than them. Enter the rest of the illustrative class of ’86.

    As it happens, Pompeo’s and Esper’s classmates permeate the deeper structure of imperial America. And let’s admit it, they are, by the numbers, an impressive crew. As another ’86 alumnus, Congressman Mark Green (R-TN), bragged on the House floor in 2019, “My class [has] produced 18 general officers…22-plus presidents and CEOs of major corporations…two state legislators…[and] three judges,” as well as “at least four deans and chancellors of universities.” He closed his remarks by exclaiming, “Courage never quits, ’86!”

    However, for all his gushing, Green’s list conceals much. It illuminates neither the mechanics nor the motives of his illustrious classmates; that is, what they’re actually doing and why. Many are key players in a corporate-military machine bent on, and reliant on, endless war for profit and professional advancement. A brief look at key ’86ers offers insight into President Dwight D. Eisenhower’s military-industrial complex in 2020—and it should take your breath away.

    THE WEST POINT MAFIA

    The core group of ’86 grads cheekily refer to themselves as “the West Point Mafia.” And for some, that’s an uplifting thought. Take Joe DePinto, CEO of 7-Eleven. He says that he’s “someone who sleeps better at night knowing that those guys are in the positions they’re in.” Of course, he’s an ’86 grad, too.

    Back when I called the academy home, we branded such self-important cadets “toolbags.” More than a decade later, when I taught there, I found my students still using the term. Face facts, however: those “toolbags,” thick as thieves today, now run the show in Washington (and despite their busy schedules, they still find time to socialize as a group).

    Given Donald Trump’s shady past—one doesn’t build an Atlantic City casino-and-hotel empire without “mobbing it up“—that “Mafia” moniker is actually fitting. So perhaps it’s worth thinking of Mike Pompeo as the president’s latest consigliere. And since gangsters rarely countenance a challenge without striking back, Lieutenant General White should watch his back after his prudent attempt to stop the further escalation of America’s wars in Iraq and Iran in the midst of a deadly global pandemic. Worse yet for him, he’s not a West Pointer (though he did, oddly enough, earn his Army commission on the very day that class of ’86 graduated). White’s once promising career is unlikely to be long for this world.

    In addition to Esper and Pompeo, other Class of ’86 alums serve in key executive branch roles. They include Vice Chief of Staff of the Army Gen. Joseph Martin, the director of the Army National Guard, the commander of NATO’s Allied Land Command, the deputy commanding general of Army Forces Command, and the deputy commanding general of Army Cyber Command. Civilian-side classmates in the Pentagon serve as: deputy assistant secretary of the Army for installations, energy, and environment; a civilian aide to the secretary of the Army; and the director of stabilization and peace operations policy for the secretary of defense. These Pentagon career civil servants aren’t, strictly speaking, part of the “Mafia” itself, but two Pompeo loyalists are indeed charter members.

    Pompeo brought Ulrich Brechbuhl and Brian Butalao, two of his closest cadet friends, in from the corporate world. The three of them had, at one point, served as CEO, CFO, and COO of Thayer Aerospace, named for the “father” of West Point, Colonel Sylvanus Thayer, and started with Koch Industries seed money. Among other things, that corporation sold the Pentagon military aircraft components.

    Brechbuhl and Butalao were given senior positions at the CIA when Pompeo was its director. Currently, Brechbuhl is the State Department’s counselor (and reportedly Pompeo’s de facto chief of staff), while Butalao serves as under secretary for management. According to his official bio, Butalao is responsible “for managing the State Department on a day-to-day basis and [serving as its] Chief Operating Officer.” Funny, that was his exact position under Pompeo at that aerospace company.

    Still, this Mafia trio can’t run the show by themselves. The national security structure’s tentacles are so much longer than that. They reach all the way to K Street and Capitol Hill.

    FROM CONGRESS TO K STREET: THE ENABLERS

    Before Trump tapped Pompeo to head the CIA and then the State Department, he represented Wichita, Kansas, home to Koch Industries, in the House of Representatives. In fact, Pompeo rode his ample funding from the political action committee of the billionaire Koch brothers straight to the Hill. So linked was he to those fraternal right-wing energy tycoons and so protective of their interests that he was dubbed “the congressman from Koch.” The relationship was mutually beneficial. Pompeo’s selection as secretary of state solidified the previously strained relationship of the brothers with President Trump.

    The ’86 Mafia’s current congressional heavyweight, however, is Mark Green. An early Trump supporter, he regularly tried to shield the president from impeachment as a minority member of the House Oversight and Reform Committee. The Tennessee representative nearly became Trump’s secretary of the Army, but ultimately withdrew his nomination because of controversies that included his sponsoring gender-discrimination bills and commenting that “transgender is a disease.”

    Legislators like Green, in turn, take their foreign policy marching orders from the military’s corporate suppliers. Among those, Esper, of course, represents the gold standard when it comes to “revolving door” defense lobbying. Just before ascending the Pentagon summit, pressed by Senator Elizabeth Warren during his confirmation hearings, he patently refused to “recuse himself from all matters related to” Raytheon, his former employer and the nation’s third-largest defense contractor. (And that was even before its recent merger with United Technologies Corporation, which once employed another Esper classmate as a senior vice president.) Incidentally, one of Raytheon’s “biggest franchises” is the Patriot missile defense system, the very weapon being rushed to Iraq as I write, ostensibly as a check on Pompeo’s favored villain, Iran.

    Less well known is the handiwork of another ’86 grad, longtime lobbyist and CNN paid contributor David Urban, who first met the president in 2012 and still recalls how “we clicked immediately.” The consummate Washington insider, he backed Trump “when nobody else thought he stood a chance” and in 2016 was his senior campaign adviser in the pivotal swing state of Pennsylvania.

    Esper and Urban have been close for more than 30 years. As cadets, they served in the same unit during the Persian Gulf War. It was Urban who introduced Esper to his wife. Both later graced The Hill’s list of Washington’s top lobbyists. Since 2002, Urban has been a partner and is now president of a consulting giant, the American Continental Group. Among its clients: Raytheon and 7-Eleven.

    It’s hard to overstate Urban’s role. He seems to have landed Pompeo and Esper their jobs in the Trump administration and was a key go-between in marrying class of ’86 backbenchers and moneymen to that bridegroom of our moment, The Donald.

    GREASING THE MACHINE: THE MONEYMEN

    Another ’86er also passed through that famed military-industrial revolving door. Retired Col. Dan Sauter left his position as chief of staff of the 32nd Army Air and Missile Defense Command for one at giant weapons maker Lockheed Martin as business developer for the very systems his old unit employed. Since May 2019, he’s directed Lockheed’s $1.5 billion Terminal High Altitude Area Defense (THAAD) program in Saudi Arabia. Lockheed’s THAAD systems have streamed into that country to protect the kingdom, even as Pompeo continually threatens Iran.

    If such corporate figures are doing the selling, it’s the Pentagon, naturally, that’s doing the buying. Luckily, there are ’86 alumni in key positions on the purchasing end as well, including a retired brigadier general who now serves as the Pentagon’s principal adviser to the under secretary for acquisition, technology, and logistics.

    Finally, there are other key consultants linked to the military-industrial complex who are also graduates of the class of ’86. They include a senior vice president of Hillwood—a massive domestic and international real estate development company, chaired by Ross Perot Jr.—formerly a consultant to the government of the United Arab Emirates. The Emiratis are US allies in the fight against Pompeo’s Iranian nemesis and, in 2019, awarded Raytheon a $1.5 billion contract to supply key components for its Air Force missile launchers.

    Another classmate is a managing partner for Patriot Strategies, which consults for corporations and the government but also separately lands hefty defense contracts itself. His previous “ventures” included “work in telecommunications in the Middle East…and technical security upgrades at U.S. embassies worldwide.”

    Yet another grad, Rick Minicozzi, is the founder and CEO of Thayer Leader Development Group (TLDG), which prides itself on “building” corporate leaders. TLDG clients include: 7-Eleven, Cardinal Glass, EMCOR, and Mercedes-Benz. All either have or had ’86ers at the helm. The company’s CEO also owns the Thayer Hotel located right on West Point’s grounds, which hosts many of the company’s lectures and other events. Then there’s the retired colonel who, like me, taught on the West Point history faculty. He’s now the CEO of Battlefield Leadership, which helps corporate leaders “learn from the past” in order to “prepare for an ever-changing business landscape.”

    A CLASS-WIDE CONFLICT OF INTEREST

    Don’t for a moment think these are all “bad” people. That’s not faintly my point. One prominent ’86 grad, for instance, is Lt. Gen. Eric Wesley, the deputy of Army Futures Command. He was my brigade commander at Fort Riley, Kansas, in 2009 and I found him competent, exceptionally empathetic, and a decidedly decent man, which is probably true of plenty of ’86ers.

    So what exactly is my point here? I’m not for a second charging conspiracy or even criminal corruption. The lion’s share of what all these figures do is perfectly legal. In reality, the way the class of ’86 has permeated the power structure only reflects the nature of the carefully crafted, distinctly undemocratic systems through which the military-industrial complex and our political world operate by design. Most of what they do couldn’t, in fact, be more legal in a world of never-ending American wars and national security budgets that eternally go through the roof. After all, if any of these figures had acted in anything but a perfectly legal fashion, they might have run into a classmate of theirs who recently led the FBI’s corruption unit in New Jersey—before, that is, he retired and became CEO of a global security consulting firm. (Sound familiar?)

    And that’s my point, really. We have a system in Washington that couldn’t be more lawful and yet, by any definition, the class of ’86 represents one giant conflict of interest (and they don’t stand alone). Alums from that year are now ensconced in every level of the national security state: from the White House to the Pentagon to Congress to K Street to corporate boardrooms. And they have both power and a deep stake, financial or otherwise, in maintaining or expanding the (forever) warfare state.

    They benefit from America’s permanent military mobilization, its never-ending economic war footing, and all that comes with it. Ironically, this will inevitably include the blood of future West Point graduates, doomed to serve in their hopeless crusades. Think of it all as a macabre inversion of their class motto in which it’s not their courage but that of younger graduates sent off to this country’s hopeless wars that they will never allow to “quit.”

    Speaking of true courage, lately the only exemplar we’ve had of it in those wars is Gen. “Pat” White. It seems that he, at least, refused to kiss the proverbial rings of those Mafia men of ’86.

    But of course, he’s not part of their “family,” is he?

    *  *  *

    Danny Sjursen is a retired U.S. Army major and former history instructor at West Point. He served tours in Iraq and Afghanistan, and now lives in Lawrence, Kansas. He has written a memoir of the Iraq War, Ghost Riders of Baghdad: Soldiers, Civilians, and the Myth of the Surge, and his forthcoming book, Patriotic Dissent: America in the Age of Endless War, is available for pre-order. Follow him on Twitter at @SkepticalVet and check out his podcast “Fortress on a Hill.”


    Tyler Durden

    Fri, 04/24/2020 – 23:55

  • Clubbing Under Quarantine: People Are Paying To Log On To Zoom And Attend Virtual Concerts And Raves
    Clubbing Under Quarantine: People Are Paying To Log On To Zoom And Attend Virtual Concerts And Raves

    With actual clubs shut down, how are insecure ravers going to get their fix of attention, booze and music that sounds like pneumatic drills hooked up to amplifiers? Meet virtual nightlife.

    Following in the lead of Asia during the outbreak, livestreaming has now made its way onto the club scene. U.S. musicians across all genres are logging on, instead of packing seats, to perform. And it isn’t just the newfound acoustic singer-songwriter you went to high school with appearing on your Facebook timeline performing. Major DJs like Diplo and A-Trak have been performing, often times to raise money for Covid-19 relief. 

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    Eryka Badu has put on livestream concerts for $1 and $2 per person

    The virus has hit the nightlife and the $27.9 billion live music industry hard. For many working musicians, performing online is a way for them to raise money. But it’s not showing impressive results, according to Bloomberg. Artist and tech researcher Mat Dryhurst calls it “e-busking”. “The tech isn’t there to make it more engaging than, say, radio. Even in this charitable climate, it isn’t producing impressive financial results.”

    While smaller artists may only make $50 per stream, artists like Erykah Badu have had more success. She pulled in 10,000 viewers – at $1 per person – for a performance she did on March 23 from her home. She did a second one, charging $2, to help support her and her band. 

    And the spillover into dance music and rave culture was inevitable. At a Zoom party called Club Quarantee, guests buy tickets for $10 or can pay $80 for a private room to party with Instagram-famous DJs and burlesque dancers. Bloomberg said: “On a recent weekend, the party is full of European models and bearded men in fedoras, dancing along to Macarena.”

    Sounds like it’s definitely worth $80.

    Club Quarantee’s founder said: “A bottle-service club is a symbol of exclusivity and high-quality entertainment. Of course, we can’t sell bottles, but we try to deliver this vibe.”

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    A former NYC celebrity hang-out host, he says he has lost about $10,000 in income since the city has shut down. His first virtual party brought in about 300 people, covering half of his costs, which included talent, a videographer and staffers. On his second try, he broke even.

    “The main objective is to create a space where promoters can maintain important relationships with our clients and keep them entertained during this time. People are longing for social interactions, and we can offer an important part of the club experience: the emotional connection,” he said.

    Then there’s Club Q, a “safe space” for the LGBTQ community recently called the “hottest club on Zoom”. It has 40,000 followers on Instagram. One of its founders said: “We have access to people who can’t attend clubs because they have children, social anxiety, disabilities, or live in places that don’t have clubs. We want to maintain this equality, with no elitism.”

    And Club Q is starting to look into branding opportunities. Companies remain skittish in spending, however. “Without knowing how long the quarantine will be, brands don’t know if they should throw money and commit to this as something for the future,” co-founder Brad Allen said.

    “There’s a learning process. At first, people were not willing to spend money on Netflix; they were used to streaming movies illegally. It takes a while to be accepted and for people to understand it’s not a scam,” Club Quarantee’s founder concluded.

    The digital parties being pitched look like this:

     
     
     
     
     
     
     
     
     
     
     
     
     

    Keep the vibe alive! Every Saturday we meet on our digital dancefloor to groove, move, and stay connected ❣️Cuz Zoom parties are totally a thing now!? THANK YOU to everyone who has joined the party so far – the next one goes down tonight at 8pm EST!! We’re also doing a Bottomless Brunch party on Sunday at 3pm EST 🍑 ⠀ Extra special thanks to @davidk1ss for providing the jams and mastering the broadcast setup 🙏🏽 ⠀ 🎥 @1986ph 🎶 Todd Terje ‘Alfonso Muskedunder’ Cameos by @rawblane @captaincerf @kd_kinetic @dance.heals.all @theteaganlee @costumejim @kaeburke @shenryxshmenry @amyvandoran @lalolacarter @little.cinema @kmora11 @jonesywine @pixelwitchadventures @davidjamesmountain @chiquitabrujita @ugretchen @gutter.face @lovelivingart @kylemcmahonworks @chop_suiie @eyeroll.gif @sabdiee @subtleaesthetics ⠀ #houseofyes #socialdisdance

    A post shared by Circus • Performance • Club (@houseofyesnyc) on Apr 4, 2020 at 9:09am PDT

    //www.instagram.com/embed.js


    Tyler Durden

    Fri, 04/24/2020 – 23:35

  • A Real New Deal & Debt Jubilee Or A Green New Deal & Global Dictatorship?
    A Real New Deal & Debt Jubilee Or A Green New Deal & Global Dictatorship?

    Authored by Mathew Ehret via The Strategic Culture Foundation,

    As scary as it is for some to admit even at this stage of the game, the current financial system sits precariously on the edge of a meltdown beyond anything ever recorded in human history. Normally, such a systemic meltdown would generate such turbulence and panic that the masses of complacent subjects would be induced to action in defense of their families and nations, however under current circumstances, the coronavirus pandemic has ensured that no such mass movement, or policy fight has taken shape.

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    As I wrote in a February 27th editorial Why the Coming Economic Collapse Will NOT be Caused by Coronavirus, the inevitability of the meltdown has been well known to all leading central bankers and highly placed officials in “a position to know” for a very long time. This fact was known even before the new wave of emergency bailouts were begun in September 2019 starting with $50 billion/night of overnight repo loans. It was known even before the age of bailout was created to postpone the 2008-09 collapse of the system under threat of Martial Law. It was known before Glass-Steagall was repealed in 1999 and over-the-counter derivatives were deregulated in 2001. Let’s just say it’s been a part of a very ugly plan for a very long time.

    But make no mistake, you didn’t have to be a “highly placed” banker or technocratic social engineer to know this collapse was going to happen. No crystal ball was ever needed.

    All a thinking person had to do was assess the observable underpinnings of the post-1971 financial order and look with unbiased eyes upon the consistent rate of collapse of the PHYSICAL economic platform that supports life while taking note of the paradoxical hyperbolic increase of monetary assets, and speculative claims in the system every year since the age of “deregulation” was ushered in (and the post WWII paradigm of industrial growth economics was thrown in the trash). Outsourcing of vital manufacturing, decay of infrastructure maintenance and improvement, privatization of public goods, and loss of machine tool powers simply resulted in the transfer of wealth into the hands of a small elite, and the stripping of nation states from the economic sovereignty they once enjoyed.

    Where monetary growth used to be tied to the measurable growth of physical economic variables mentioned above, the post-1971 world order demanded that money could only grow according to debts that were ever more disassociated from reality. Instead of justifying the growth of infrastructure, and improvements in the productive powers of labor, debts became tied to mere speculative activities setting in place a time bomb in the form of a new bubble economy. Whether artificially induced or left to their own devices, bubbles by their very nature ALWAYS pop

    Since the chaos of the collapse of the trans-Atlantic bubbles has not yet occurred, we still have a choice.

    Hyperinflation 101: How NOT to Run an Economy

    Either we can break up the banks with Glass-Steagall bank separation, and a total bankruptcy reorganization (aka: Debt Jubilees) or we can pump more money into the zombie banks in order to accelerate hyperinflation and fascism following the 1923 German model.

    Sadly, up until the present moment, the playbook used was published in 1923.

    In response to the collapse, and precipitated by the covid-19 pandemic which has been used to justify the shutdown of the economies of the world, the NY Federal Reserve has been converted into a giant Hedge Fund designed to purchase trillions of dollars of junk debts from private banks to the tune of $6.13 trillion as of April 13. This represents a 42% increase in only one month from the $4.31 trillion balance sheet on March 11. Most of these assets take the form of Special purchase vehicles authorized to purchase over $4.5 trillion of toxic debt under the secret supervision of Blackrock, as well as tranches of Collateralized Loan Obligations (CLOs) which are highly toxic derivatives tied to leveraged corporate junk debt to the scale of $2.2 trillion.

    Former banker and author of Planet Ponzi, Mitchel Feierstein recently wrote an RT editorial on April 10 that put it succinctly: “The fed is socializing hedge fund investments gone bad placing tax payers at risk.”

    Unlike too many analysts who prefer to merely opinionate about the crisis, Feierstein happily strikes the nail on the head by zeroing in on the conceptual issue of good vs false standards of value and debt. Is all debt evil? Of course not. If a farmer wishes to take out a debt to buy a better tractor which will improve his productivity then it will extinguish itself over time. If a heroine addict wishes to take out a debt to feed his addiction then that debt would obviously be destructive.

    In this vein Feierstein states: “Debt is never a bad thing if it is used to create organic growth or fund infrastructure development that creates opportunities and employment. Debt is dangerous when used to develop grotesque weapons of financial destruction by structuring synthetic derivatives products that use leverage of 300 to 1 or more- meaning that $1 million can control $300 million in assets.”

    The system of derivatives products and leverage referred to by Fierstein has now attained levels which “officially” amount to $700 trillion, but which most expert economists claim runs as high as $1.5 quadrillion of fictitious capital. World GDP is no greater than $80 trillion. This is the bubble that threatens to tear apart the nations of the world now.

    The Importance of a Debt Jubilee

    Feierstein is joined by a surge in Ibero-American voices who have loudly begun calling for a debt jubilee in the face of the oncoming blowout. Founded by Latin American leaders, including Argentina’s current president Alberto Fernandez in July 2019, the Puebla Group has now come out calling for a total write off of the unplayable IMF and World Bank debts that have held Latin America hostage for decades under the weight of conditionalities and usury. After a 3 hour conference call with its 40 members, the group published a declaration stating that “the priorities of the [existing] global model led to the abandonment of social policies, especially those related to healthcare systems” and that “health, research, and public policy cannot be subordinated to the interests of the market.” Other founders of the Pueblo Group include former presidents Fernando Lugo (Paraguay), Rafael Correa (Ecuador), Dilma Rousseff (Brazil), and former cabinet ministers, diplomats and senators.

    This dovetails the March 20 call by the Latin American Center for Geopolitics (CELAG) to support a new multipolar system and a cancelation of all usurious Ibero-American debts. A director of CELAG named Alfredo Serrano wrote that “after the tsunami”, hopefully “a kind of New Deal, a new social and economic contract will emerge, in which health and other basic rights will be at the center of the economy and that the financial economy will be at the service of the real economy and not the other way around.”

    While not going as far as the Pueblo Group or CELAG, Mexico’s President Lopez Obrador, made headlines on April 8 by stating the fact that the crisis will require a new system and that said system must be based upon the total rejection of neoliberalism. In his speech, Obrador stated “that the neo-liberal model is collapsing. That is what is happening; that is, the coronavirus precipitated the fall of a failed model….“How is it possible that the pandemic has such a huge effect, economically and socially? … Among other things, social investment was stopped; healthcare was privatized. There are countries today which do not have public services for the population. They are the ones worst hit.”

    Although he did not explicitly state that a debt cancellation must occur, Obrador called for a New Deal solution to the crisis asking:

    “What did President Roosevelt do in a situation like this? Reactivate the economy with investment; employment for everyone; a minimum salary for everyone, especially the youth. Reactivate the construction industry. That is how he lifted up the United States and returned tranquility, happiness to his people…. So, why not do the same thing today?”

    Real New Deal NOT Green New Deal

    As I wrote in my previous paper How to Crush a Bankers’ Dictatorship: A Lesson from 1933, Franklin Roosevelt’s New Deal was NOTHING like the “Green New Deal” which many leading central bankers have been promoting as a replacement to the dying neo-liberal order. When Sir Michael Bloomberg (yes he was made a knight of the British Empire in 2014) or the Bank of England’s Mark Carney, or some other Malthusian technocrat call for a Global Green New Deal it is important to recognize that this is a trap and similar to the original in name only. Since this fact is still not widely known, a few words on this must be stated.

    Carbon taxes, cap and trade schemes, biofuels (to burn the food supplies), or inefficient windmill and solar energy infrastructure may create a momentary spike in jobs that would satisfy Keynesian economists who think economic progress comes from individual “bottom up” purchasing power, but the longer term EFFECT will be the opposite of that attained during the New Deal of the 1930s and the needed remedies to support today’s nearly 8 billion people.

    Rather than increasing industrial activity, large scale infrastructure and ultimately sustain social safety nets the way FDR achieved, the Green New Deal will crush nations’ abilities to produce for themselves, sustain their people or even maintain global populations at current levels which this author developed in a 2014 lecture entitled “The Imperial Fraud of Entropy” featured below. As sick a fact as this is, depopulation is considered a “utilitarian necessity” for certain oligarchical social engineers attempting to manage humanity as a system from the top.

    The real New Deal, as Obrador desires, or as China, Russia and other pro-Belt and Road nations demand, must be anti-Malthusian as well as anti-neoliberal. It must be based upon activities that increase human life both quantitatively as well as qualitatively on every level: material, intellectual and spiritual. Long term infrastructure projects funded by low interest/conditionality-free loans made the original New Deal work and it would have ended colonialism if FDR hadn’t died pre-maturely months into his fourth term under conditions which Stalin stated in an interview with FDR’s son Elliot, was the effect of poisoning by “Churchill’s gang”.

    These principles worked then, and they continue to work today as China and 135 nations working together under the Belt and Road Initiative framework have demonstrated beautifully.

    This growth of humanity as a species made in the image of a Creator is what the Malthusian technocrats hate and fear, and this is why the Trump-Putin-Xi commitment to asteroid defense, lunar, mars and asteroid mining and cooperation on space exploration more generally is so necessary to fuel the sort of anti-Malthusian, open system discussion for a genuine Global New Deal which must govern the transition from the age of parasitic globalization and empire to a new Multipolar age of cooperation and creative reason.


    Tyler Durden

    Fri, 04/24/2020 – 23:15

  • Will Coronavirus Wreck The Classic Car Market? 
    Will Coronavirus Wreck The Classic Car Market? 

    In August 2019, we suggested how it might be a good time to thin out the classic car collection. Now vintage automobile prices are moving lower, which could result in a sharp correction. 

    With an economic depression unfolding in the second quarter, the classic car market could see downward pressure. Understanding how deep a correction would be is anyone’s guess at the moment, but what is evident is that a record number of Americans were just laid off and will need to sell assets to build cash. Some of those assets include, as this piece is centered around, classic cars, as well as art, wine, etc… 

    To show automobile prices, we are sourcing Hagerty Market Rating, which provides a variety of classic car indexes. 

    Hagerty’s Muscle Car Index appears to have “recorded the largest drop” of any automobile index for the “second time in a row, falling 7 percent to a five-year low” in January, said Hagerty valuation editor Andrew Newton. 

    “While more than three-quarters of the index’s component cars recorded no change at all, another large drop for the 1970 Hemi Cuda convertible (among the most valuable muscle cars of all) and a 4 percent decrease for the 1964 Impala SS were more than enough to pull the overall score down,” Newton said. 

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    Next is 1950s American Hagerty Index that slumped 5% in 2019, and now sits at a 5-year low in January. 

    “The 1950s American Index continued its slide to close out 2019 with a 5 percent drop, and now sits at a 5-year low. While the 1954 Buick Skylark notched a significant gain of 5 percent, more than half the index’s component cars recorded a serious loss. The 1955 Packard Caribbean took an especially serious blow with a 21 percent drop. The index’s most expensive car, the 1953 Cadillac Eldorado, dropped 13 percent,” Newton said. 

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    Hagerty’s British Car Index remains at an all-time high but has hit resistance over the last several years. 

    “Half of this group’s component cars recorded a loss over the past four months, and just one car—the 1972 Triumph TR6—recorded a gain. That increase was a minor 1 percent,” Newton said. 

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    Hagerty’s German Car Index remains slightly off the all-time high. 

    “Nearly three-quarters of the component cars recorded no movement at all. Three of them dropped, including previously red-hot Porsches like the 1973 911 Carrera RS Touring (one of the more expensive cars in the index) with a 12 percent decrease and the 1979 930, which continued its gradual slide with a 6 percent decrease. The only serious gain of any car in the index this past period was for the Mercedes-Benz 280SL, which bounced back with a 17 percent surge after two years of continuous drops,” Newton said. 

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    Hagerty’s Blue Chip Index, consisting of the top 25 most sought-after post-war era cars in the world, was down 6% in January over the prior 12 months, one of the most significant slides since January 2010. 

    “Upper echelon cars have faced headwinds for the last four years, and buyers at this level are increasingly selective with their purchases. Seven-figure cars with excellent history and specifications that are carefully represented are still achieving steady prices, but any car with less than the best story is a tough sell at the moment. Several years in, owners are still coming to terms with this dynamic.” 

    “Five Blue Chip component cars fell more than 10 percent since September 2019, including the Aston Martin DB5, the Ferrari 275 GTB/4, the Jaguar D-Type, the Plymouth Hemi Cuda convertible, and the 1973 Porsche 911 Carrera RS. The Cuda excluded, most of these cars have historically seen strong interest among European buyers, and many of those buyers are hesitating due to unfavorable currency exchange rates and other macro-economic concerns,” said Hagerty valuation editor Brian Rabold. 

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    Hagerty’s Ferrari Index “fell 3 percent to close out 2019. This slip leaves the group 6 percent down year over year. More importantly, the index is now 2 percent below where it was five years ago, effectively rolling prices back to 2014 levels. Ferrari Index,” Rabold said. 

    “The biggest culprits in this period’s change are the 250 GT SWB, which dropped 15 percent, and the 275 GTB/4, which fell 13 percent. Meanwhile, Daytona coupes and 246 Dinos both seem to have stabilized with two consecutive periods of unchanged prices,” he said. 

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    With classic car auctions, shows, and meets canceled for the first half of the year because of the COVID-19 pandemic, this is an unprecedented period to own classic cars as the global economy stumbles into a recession, if not depression, which could result in a sharp correction in the overall classic car market in 2020. 


    Tyler Durden

    Fri, 04/24/2020 – 22:55

  • A Handful Of Cops Are Standing Up To Tyranny With The People
    A Handful Of Cops Are Standing Up To Tyranny With The People

    Authored by Mac Slavo via SHTFplan.com,

    Some police officers have awoken to the world they are leaving for their children and are standing with the people against tyranny.  While these instances are still few and far between, it’s a good sign that at least a few may be realizing what kind of world they are enforcing at this point in human history.

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    For a long time, police officers and the military have done nothing more than blindly obey the commands of politicians and enforce even the most immoral of laws on the public.  That seems to be changing, and we can always hope it will change more rapidly in the coming days.

    According to a report from the Federalist, police chiefs from Texas to Washington are standing up against the draconian orders from local power-hunger tyrants demanding strict adherence to extreme social distancing measures to curb the spread of the novel coronavirus. Even with manipulated statics designed to strike fear into the masses being blasted all over the news, there is no excuse for the tyranny we are seeing spread all over the planet at a much more rapid rate than this virus could ever hope to achieve. People, by and large, have started looking beyond the falsified “facts” provided by those who don’t care about your health, only about controlling you.

    The following are examples of police standing against tyranny:

    The Houston Police Officers’ Union declared Wednesday that its members would refrain from enforcing local County Judge Lina Hidalgo’s ruling deeming it mandatory for any individual over the age of 10 to wear a mask in public.

    –The Federalist

    In Washington, Snohomish County Sheriff Adam Fortney announced Tuesday that his officers would also abstain from enforcement of lockdown orders, joining Franklin County Sheriff J.D. Raymond who said he would not stop churches and business from opening with reasonable distancing measures in place.

    – The Federalist

    Further east in Michigan, four sheriffs in the northwest part of the mitten also announced last week that they would refuse to enforce Democratic Gov. Gretchen Whitmer’s lockdown orders which have been the most extreme in the country.

    – The Federalist

    For every one story about cops defying the orders to enforce tyranny, there are ten about cops following the commands of tyrants and arresting peaceful people. The mainstream media has quickly done an about-face when it comes to their views of the police. Force and violence used against “anti-vaxxers” and those who value freedom more than security are fine. Police brutality before COVID-19, however, was bad.  The hypocrisy is unbelievable. It’s apparent that the media is working hard to keep your mind locked in the fearful slave mentality.

    We need more order followers to just stop at this point.  There is a big wall of violence created by the police state and the huge military that can be used to forcibly “keep people in line.” Once that dissolves, the elitists have no way to control the public any longer.  True justice, peace, and freedom is within our reach if more and more police officers and service members wake up to realize what kind of a world they are enforcing.

    Just because it’s legal, it isn’t necessarily right, and just because it’s right doesn’t necessarily mean it’s legal. It appears that even a few police officers have figured it out at this point. Perhaps they know people are standing up and they don’t want to be on the wrong side of history, or perhaps they really do care about the kind of world they are enforcing and leaving to their children.


    Tyler Durden

    Fri, 04/24/2020 – 22:35

  • Surprise Cruise Ship Outbreak In Nagasaki Exposes Staggering Negligence
    Surprise Cruise Ship Outbreak In Nagasaki Exposes Staggering Negligence

    The story of the outbreak aboard the “Costa Atlantica” has left many readers amazed by the staggering negligence of both local officials in Nagasaki, as well as the Japanese and Italian governments. After the dozens of deaths and thousands of infections reported aboard cruise ships around the world, the notion that more than 600 crewmembers were left to live on-board this ship for months while it was being repaired is simply mind-blowing, given the obvious risk.

    Then again, governments around the world from Europe to the US to Asia have largely failed to protect the most vulnerable in society, that being, in this case, patients in nursing homes. But as Bloomberg pointed out in a Friday update on the situation, there’s another familiar player involved – one that really has no excuse for allowing this to happen.

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    That’s right. Somehow,  the “Costa Atlantica” is a Carnival Corp ship (owned by a subsidiary). Carnival has been far and away the worst offender in the travel and leisure industry in terms of its management of the many crises and outbreaks that have unfolded aboard its cruises. It failed to act fast enough to shut down operations, and even after it did, the company and personnel made many decisions which suggested they blithely placed the company’s bottom line before the well-being of customers.

    Australia has already launched a criminal investigation into Carnival over the “Ruby Princess” fiasco…

    The number of confirmed Covid-19 infections on the Costa Atlantica had climbed to 91 as of Thursday from 48 a day earlier, the Nagasaki prefecture said.

    The Atlantica is operated by CSSC Carnival Cruise Shipping, a partnership between Carnival Corp. and state-owned China State Shipbuilding Corp. The Chinese entity is the majority owner.

    Coronavirus cases at sea forced the industry to suspend new sailings in mid-March. Many ships were caught mid-voyage, leading to weeks of drama as companies hustled to get passengers to ports.

    Even now, ships around the world still have crew on board.

    The episode has captured the attention of Japan’s government, which already faced widespread Covid-19 on Carnival’s Diamond Princess, at one point the largest concentration of coronavirus outside of mainland China.

    Japan’s Health Minister Katsunobu Kato said Thursday that all crew will now be tested on the Costa Atlantica.

    Since the first case was confirmed on Monday, authorities have been investigating how the outbreak began, since the ship has been at port without passengers for weeks, and crew members weren’t supposed to have left the vessel.

    Kato said some of the crew apparently got off the vessel at some point.

    …will Japan, or perhaps Italy, be next to join in?

    And yet, somehow, hundreds maybe thousands of crew members continue to live onboard hastily recalled cruise ships all around the world, apparently.

    Let’s hope they’re at least getting some hazard pay.


    Tyler Durden

    Fri, 04/24/2020 – 22:15

  • Here Is The Missing Manual For Defending Yourself Against Deplatforming And Cancel Culture
    Here Is The Missing Manual For Defending Yourself Against Deplatforming And Cancel Culture

    Submitted by Mark Jeftovic of Guerrilla-Capitalism; co-founder & CEO, easyDNS Technologies Inc. and author of Unassailable: Protect Yourself From Deplatform Attacks and Cancel Culture

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    Things are moving quickly.

    In the old adage “Never let a crisis go to waste”, governments everywhere are using the pandemic opportunity to:

    • Rule by decree
    • Stifle freedoms guaranteed under various rights and charters
    • Enact mandatory surveillance
    • Silence dissenting speech

    Their enablers in this are the mainstream media and Big Tech, who have formed an ideological simpatico to form and control public opinion. You may have heard the expression Overton Window, which defines the allowable spectrum of opinion and the limits beyond which public discourse is not permissible. When the institutional scaffolding of a system begins to buckle, and when the credibility of traditional sources of mainstream news go into secular decline, the Overton Window constricts.

    Of the Government / Mainstream Media / Big Tech triumvirate, only Big Tech is on the ascendency. It seeks to carve out an indispensable role of one manner or another in the next world order which has been emerging for over a decade, and is now accelerating amid the pandemic.

    The components of The Triumvirate do understand viscerally, what has been known by those who seek to retain power since Edward Bernays wrote his blueprints for controlling the public mind back in 1920s (those were “Propaganda”, “Public Relations” and “Crystallizing Public Opinion“)

    “The conscious and intelligent manipulation of the organized habits and opinions of the masses is an important element in democratic society. Those who manipulate this unseen mechanism of society constitute an invisible government which is the true ruling power of our country. …We are governed, our minds are molded, our tastes formed, our ideas suggested, largely by men we have never heard of.

    This is a logical result of the way in which our democratic society is organized. Vast numbers of human beings must cooperate in this manner if they are to live together as a smoothly functioning society. …In almost every act of our daily lives, whether in the sphere of politics or business, in our social conduct or our ethical thinking, we are dominated by the relatively small number of persons…who understand the mental processes and social patterns of the masses. It is they who pull the wires which control the public mind.”
    – Propaganda, Chapter 1: Ordering Chaos

    Not to put too fine a point on it,

    There are invisible rulers who control the destinies of millions. It is not generally realized to what extent the words and actions of our most influential public men are dictated by shrewd persons operating behind the scenes.

    Now, what is still more important, to the extent to which our thoughts and habits are modified by authorities.

    In departments of our daily life, in which we imagine ourselves free agents, we are ruled by dictators exercising great power”.

    — Propaganda, Chapter 3: The New Propagandists

    The narrative must be controlled, it must be shaped and deviations from it must be curtailed and marginalized. As I say in my book, Unassailable (now free, see below),

    “The ramifications of successfully asserting one [narrative] trajectory over any other challengers may never be fully grasped by the public at large.”

    This occurs through repeated accusations of  the “conspiracy theory” monicker, or blaming everything that goes wrong on Russian meddling, white nationalists and the like. It even looks like narrative enforcers even go so far as to cherry pick the most absurd elements and participants out of a given area of concern and amplify those, so as to “poison the well’, so to speak against an entire stream of debate around a given concern:

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    Via The Guardian

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    Thus, nobody respectable will ever take a serious look at possible concerns around any debatable  aspects of COVID-19, 5G, or anything that doesn’t originate from an official source like the WHO. Because from here on in if you even talk about an “off-limits” topic you will have your name linked to the most reviled and ostracized elements of society via negative branding:

    “One of the most favored propaganda tactics of establishment elites and [those] they employ … is to relabel or redefine an opponent before they can solidly define themselves. In other words, elites [and their media] will seek to “brand” you (just as corporations use branding) in the minds of the masses so that they can take away your ability to define yourself as anything else.” (emphasis added)

    — Brandon Smith, Alt-Market.

    We see a similar dynamic among evangelical environmentalists, where anybody who expresses any skepticism toward computer models that are put forward as incontrovertible truths, or that the “New Green Deal”-style remedies proffered are the only possible course of action are labeled “deniers” and witch-hunted. (If you’re curious as to what a New Green Deal, Greta Thunberg-style radical decarbonization program looks like, what is happening now is just a modest hint of what that would be like. I would recommend Alex Epstein’s “The Moral Case for Fossil Fuels” to get an example of  alternative approaches around how to think about environmental issues. I say this as someone who believes the medium-to-long-term trajectory of humanity is away from fossil fuels. Paradoxically, one of the most viable near term substitutes available to us, nuclear and thorium energy, is also off limits for serious discussion).

    If the marginalization doesn’t work, if the public seems resistant to mainstream media gaslighting, if the construct of hypernormalisation is in danger of being challenged or outright debunked, then matters get taken to the next level.

    That’s when deplatforming and cancel culture come into play

    As I mentioned in Unassailable,

    propaganda comprises techniques and strategies to push elite approved narratives into the public mind and to have them accepted. Bernays deemed this a necessity of a smooth operating society. The other side of controlling the narrative necessitates the suppression of any contending streams of thought. That’s where deplatforming comes in.

    As I’ve said elsewhere, and I’ll say it again here:

    It doesn’t matter if you believe Coronavirus is real, fake, caused by 5G, a full moon, in a lab or eating batshit sandwiches, you should be able to believe any of those things and still behave civilly without disturbing anyone. What your beliefs induce you to do in the real world brings their own consequences and you should be prepared to deal with that.

    But what anybody says online has to be sacrosanct. If you really want to protect the world from bad conspiracy theories then write a crash course in developing critical thinking skills and personal responsibility. Then give that away far and wide.

    The fact is the internet is a type of gas release valve. People discharge angst, frustration, fear and sexual tension out through the internet because they think it’s a safe release. And it should be.

    There are too many initiatives seeking to control that release and infringe upon real world liberties.

    Right now things are extraordinarily tense and brittle. The global economy has all but ceased operating, essentially by decree. Millions of people have lost their jobs, countless businesses have shut down, many to never reopen.

    To now step into the open forum of discourse and into the marketplace of ideas and tell people what is and isn’t permissible to believe and think is just adding more fuel to an already building pressure cooker that is primed to foment social unrest.

    Unassailable: The anti-dote to Cancel-Culture and Deplatforming is now free

    After being contacted earlier this week on behalf people who were deplatformed from Facebook who are trying to organize anti-lockdown protests and online dissent, I’ve decided to make my latest book, Unassailable: Defend Yourself from Deplatform Attacks, Cancel-Culture and Other Online Disasters free for download, for anybody.

    This book is the missing manual for defending your content and your free speech online. It will step you through each component of your online presence: from web hosting, email, e-commerce models, social media and domain names and show you where your weak spots are and how to fortify them against the ideological pronouncements of other people. The foreword is by Charles Hugh Smith, and part one looks at the ideological and philosophical underpinnings of cancel culture.

    I bent my own rule a bit and set it up on BookFunnel, the download link can be accessed here.

    If you don’t want the book and just want to get on the AxisOfEasy mailing list, sign up here, or follow the Axis on Mastodon or (if you’re woke), on Twitter.

    I also write more about economics and business from Guerrilla Capitalism which you can join here.


    Tyler Durden

    Fri, 04/24/2020 – 22:09

  • "The Ripple-Effects Of The Government Lockdown Are Only Starting To Take Shape…"
    “The Ripple-Effects Of The Government Lockdown Are Only Starting To Take Shape…”

    Via Doug Casey’s InternationalMan.com,

    David Stockman on the Real Reason Why the Government Shutdown Caused an Economic Collapse

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    International Man: Is the government’s reaction to COVID-19 worse than the virus itself? What are your thoughts?

    David Stockman: I think for once, Donald Trump was right when he worried out loud the other day that the cure may be far worse than the disease.

    Governors – mostly Democratic governors and mayors of major areas of the country – have imposed Lockdown Nation. It’s a complete economic disaster.

    It’s a wrong policy from a public health point of view and an economic point of view.

    It is hitting, like a ton of bricks, a highly fragile and vulnerable economy that was living hand to mouth anyway because of the kind of highly counterproductive monetary and fiscal policies and debt build-up we’ve had over the last 30 years.

    If you look at the data for New York—which is the epicenter of the whole COVID-19 pandemic—it is abundantly clear that COVID is not some kind of latter-day Black Death plague that takes down the young, the old, the healthy, the sick, and everyone in between.

    It is a kind of super winter flu that strikes fatally, almost entirely, the elderly population that is already afflicted with many life-threatening medical conditions—or what the technicians call comorbidities.

    The shutdown, which I call the “plenary lockdown policy,” is wrong. Closing all the businesses except a tiny, arbitrary set of essential operations is courting disaster for no good reason.

    Here’s what the New York data showed us recently.

    New York is ground zero and the epicenter. But if you look at the breakdown of that number by age and by medical condition, it’s startling.

    For those under 50 years of age in the state of New York, the death rate is slightly under 5 per 100,000.

    That isn’t a disaster. That isn’t a plague or a calamity.

    Five per 100,000 is half the rate of suicides per 100,000 annually among the 50 and under population. It is a small fraction of the 90 deaths per 100,000 annually that occur for all kinds of reasons: accidents and illnesses—including suicide.

    You would not, in the slightest, in any kind of sane world, shut down an entire economy and lock down everything when you have a 5 per 100,000 death rate for the overwhelming share of the population.

    On the other hand, if you look at the population 80 years and older in New York state—the death rate is 1,086 deaths per 100,000. In other words, it’s night and day.

    The virus is not a fatal problem for the overwhelming share of the population.

    Lots of people get infected. Most are asymptomatic. Some get sick and stay in bed for a couple of days, and they recover. A tiny fraction of the under-50-years population gets seriously ill and is hospitalized for treatment, and an infinitesimal number end up as fatalities. That’s the case for the healthy population under 50.

    It’s in the over-70 age group, and especially in the over-80 age group, that the overwhelming share of these severe cases has developed.

    The strategy shouldn’t be a plenary lockdown. The right approach is to trace, identify, isolate, support, and treat the vulnerable population that already has many illnesses.

    If we look at New York again, of those deaths among the elderly population, 60% had hypertension or high blood pressure, 31% had diabetes, etc. All of them, almost overwhelmingly, had one, two, or three comorbidities.

    We don’t need Governor Cuomo to shut down the state. We need Governor Cuomo to tell the health department to mobilize the doctors and the healthcare apparatus of New York to identify the vulnerable elderly population. This population is already being treated in many cases for serious respiratory problems, heart ailments, and other diseases—and we are making sure that they’re as isolated and protected from this bad winter flu as they possibly can be. 

    It’s not merely a matter of degree. It’s that they’ve got it ass-backward. 

    You don’t lock down the population. You target the sub-population, the small minority of very vulnerable people, and do everything you can to shield them from this virus until it passes into the summer temperatures and the normal herd immunity that eventually will make it go away.

    International Man: Those are excellent points. That’s not to mention that in the US, two out of three Americans are overweight or obese and have a pre-chronic or chronic condition. And of those people, the risk goes up substantially for those who have two or more conditions. It puts them at higher risk for something like COVID-19 to take them down.

    David Stockman: I think that’s true, but even if you look at the New York data, again, it’s startling.

    For the under-50-year-old population, I can’t emphasize it enough—it’s 5 per 100,000. That’s a rounding error in the scheme of things. 

    You can’t run a society based on the risk of 5 out of 100,000 people. 

    So, I think you’re hitting it right on the head.

    What we need to think about is how much longer—and we’re not talking about months and quarters, we’re talking about days and weeks—we can possibly stand a shutdown that has already put 22 million people on unemployment claims in four weeks.

    Let’s compare this to the worst four weeks of the Great Recession, which is the worst economic calamity that we’ve had since the Great Depression.

    During the worst three-week period in the winter of 2008/2009, the cumulative new unemployment claims were 2.7 million, not 22 million. So, this is eight times worse.

    We might add that it’s going to be 30 million, or close to that, very soon. 

    We have an economy that’s in free fall, unlike anything we’ve ever seen before, and we have a government that’s in total hysteria, trying to compensate for the economic collapse that is being ordered by the government itself. 

    What I’m talking about is the Everything Bailout that was signed without a record vote in the house, with no hearings—$2.2 trillion, on top of two or three other bills that had passed earlier. There’s another trillion that they’re talking about in the pipeline as a sort of a replenishment bill.

    Even beyond that, then they’re talking about a stimulus and infrastructure bill, where the bidding starts at $2 billion. It is insanity. 

    Let’s just look at what’s happening in the here and now.

    What the government is trying to do is hold everyone in America harmless, and every business in America harmless, for the massive dislocation, disruption of business cash flow, and interruption of paychecks that have resulted from these lockdown orders. 

    Where is it taking us? 

    This year alone—and these are not my numbers; they come from the most credible Washington DC agency, which I’m a part of, The Committee for a Responsible Federal Budget. That’s kind of an oxymoron, but it exists.

    They had projected that during the fiscal year underway—which was half over before the whole COVID lockdown even got started—that the deficit is going to total $3.8 trillion. 

    I’m not talking about total spending. I’m talking about just the deficit. It’s roughly 19% of GDP.

    It’s a deficit in the same order of magnitude as we had during the darkest days of World War II. During that time, the whole economy was producing military material and weapons, and nobody could spend any money on anything except necessities because everything else was rationed or wasn’t being produced. So they bought a lot of government war bonds.

    So where we are right now, suddenly, overnight, is in a disastrous fiscal situation. 

    This self-inflicted shock has transformed the Trump-Republican trillion dollar per year deficits at the top of the business cycle.

    It has transformed a terrible situation into a catastrophic situation, where they’re going to borrow $3.8 trillion this year alone. The number for fiscal 2021—which starts in October—is going to be another $2.5 trillion at minimum, or probably more. 

    Now the reason I bring this up is because we’re looking at a two-year period in which the combined deficits are likely to exceed $6 trillion in two years. These numbers are so humongous that they’re almost impossible for ordinary people—or even people who study this subject regularly—to grasp.

    I think the best way to look at it is to see that $6 trillion of new debt in two years is equivalent to what it took 213 years and 43 presidents to produce—that’s how long it took to get to the first $6 trillion of public debt. 

    That’s how bad this has gotten, and it will destroy any remaining semblance of market capitalism we have in this country. 

    When you have a coast-to-coast soup line, with the government underwriting 100% of what everybody was getting in January 2020 by merely piling it onto the public debt, and then having the Fed printing money to fund it, you’re asking for a calamity—a financial and economic disaster of biblical proportions.

    *  *  *

    The ripple effects of the government lock down are only stating to take shape. That’s not to mention the unprecedented amount of money the that is being pumped into every corner of the economy by the Federal Reserve. The consequences of which could be crippling to the the average person. That’s exactly why Legendary speculator Doug Casey and David Stockman have just released this urgent new video which outlines exactly what’s happening and how it will impact retirees, savers, and investors. It reveals what you could do to prevent becoming financial roadkill. Click here to watch it now.


    Tyler Durden

    Fri, 04/24/2020 – 21:55

  • Japanese Mayor: Men Should Do Shopping Since Women Are 'Indecisive And Take Forever'
    Japanese Mayor: Men Should Do Shopping Since Women Are ‘Indecisive And Take Forever’

    The mayor of Osaka, Japan is taking heat after suggesting that men should do the grocery shopping amid the coronavirus pandemic because women are indecisive and “take a long time.”

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    Residents in certain parts of the island nation have been asked to shop less frequently and only send one family member to the store for supplies in order to to minimize the spread of COVID-19, according to CNA.

    Osaka Mayor Ichiro Matsui told reporters on Thursday (Apr 23) that men should be entrusted with grocery runs because women “take a long time as they browse around and hesitate about this and that”, Kyodo news agency reported.

    “Men can snap up things they are told (to buy) and go, so I think it’s good that they go shopping, avoiding human contact,” the 56-year-old added.

    When challenged by a reporter, he acknowledged his remarks might be viewed as out-of-touch, but said they were true in his family.

    As one might expect, the mayor is now the focus of angry feminists, as Twitter users called him ‘full of prejudice against women,’ and ‘disrespectful to women and men.’

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    Osaka Mayor Ichiro Matsui

    “There are indecisive men and nimble and sharp women,” said one user.

    “Does he think (shoppers) like to take time?” added a third. “They are thinking about menus and prices.”

    Others, perhaps those who have lived with a woman, supported the mayor.

    “That’s right. Elderly women, in particular, are always chatting away, unconcerned about shopping,” wrote another user.
     


    Tyler Durden

    Fri, 04/24/2020 – 21:35

  • Stop Thinking!!! The Russians & Chinese Are Your Enemy
    Stop Thinking!!! The Russians & Chinese Are Your Enemy

    Authored by Caitlin Johnstone via Medium.com,

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    The Russians and the Chinese are your enemy.
    Not the oligarchic class in your own country that has been exploiting, propagandizing, deceiving, oppressing and robbing you every moment of your life since you were born.
    The Russians and the Chinese.

    The Russians and the Chinese are your enemy.
    Not the people who have been engineering and advancing endless bloodbaths around the world at no benefit to you using your money and your resources and your political energy.
    The Russians and the Chinese.

    The Russians and the Chinese are your enemy.
    Not the political/media class and their plutocratic puppeteers who’ve been manipulating your mind to accept omnicide, ecocide, austerity and increasingly Orwellian dystopia as normal and not to be opposed.
    The Russians and the Chinese.

    The Russians and the Chinese are your enemy.
    Not the sociopathic manipulators who give you two thieving, warmongering, power-worshipping sock puppets to choose from in fake election after fake election to give you the illusion of control.
    The Russians and the Chinese.

    The Russians and the Chinese are your enemy.
    Not the people who pour vast troves of treasure into convincing your countrymen that it’d be evil and insane to demand the same social safety nets afforded to everyone else in every major country on earth.
    The Russians and the Chinese.

    The Russians and the Chinese are your enemy.
    Not the people who could have paid you a living wage to stay home safely but instead chose to give you $1200 and tell you to fuck off while transferring trillions to the plutocratic class.
    The Russians and the Chinese.

    The Russians and the Chinese are your enemy.
    Not the war profiteers and ecocidal devourers who are destroying your ecosystem and endangering the life of every organism on this planet.
    The Russians and the Chinese.

    The Russians and the Chinese are your enemy.
    Not the billionaire class who has a vested interest in making sure you stay poor in a system where money equals power and power is relative.
    The Russians and the Chinese.

    The Russians and the Chinese are your enemy.
    Not the people who are doing everything they can to roll out systems of internet censorship, surveillance and police militarization as quickly as possible in your own country.
    The Russians and the Chinese.

    The Russians and the Chinese are your enemy.
    Not the authoritarian rulers who demand complete control over what substances you put in your body while creating the largest prison population in the history of human civilization.
    The Russians and the Chinese.

    The Russians and the Chinese are your enemy.
    Not the two-headed one-party system which repeatedly threatens to destroy the rights and lives of marginalized groups if you don’t give at least one of those heads your full unbridled support.
    The Russians and the Chinese.

    The Russians and the Chinese are your enemy.
    Not the nationless alliance of oligarchs who use your resources to encircle the planet with military bases, wage countless undeclared wars and destroy any nation which refuses to bow to their empire.
    The Russians and the Chinese.

    The Russians and the Chinese are your enemy.
    Not the people who infiltrate, undermine, sabotage and smear any political movement which tries to help ordinary people the moment it begins gaining any traction.
    The Russians and the Chinese.

    The Russians and the Chinese are your enemy.
    Not the people who are working to normalize the extradition and life imprisonment of any journalist anywhere in the world who exposes the war crimes of your government.
    The Russians and the Chinese.

    The Russians and the Chinese are your enemy.
    Not the thugs who demand the unthinking loyalty of not just you and your countrymen but everyone in the world on pain of violent retribution.
    The Russians and the Chinese.

    The Russians and the Chinese are your enemy.
    Not the media-owning class who uses their unrivaled narrative control to sow division among your brothers and sisters at home and around the world so you don’t realize who’s really been fucking you over.
    The Russians and the Chinese.

    *  *  *

    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 or Paypal, purchasing 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

    Fri, 04/24/2020 – 21:15

  • China Sent Medical Expert Team To Attend To North Korea's Kim Jong Un
    China Sent Medical Expert Team To Attend To North Korea’s Kim Jong Un

    Update: Following an earlier report that North Korean leader Kim Jong Un may have been evacuated from Pyongyang (as he was nowhere to be seen during the national holiday celebration of his grandfather’s birthday on April 15) amid speculation about his failing health following a report from a Seoul-based website that Kim was recovering after undergoing a cardiovascular procedure on April 12, late on Friday Reuters reported that China has “dispatched a team to North Korea including medical experts to advise on North Korean leader Kim Jong Un.”

    Citing “three people familiar with the situation”, Reuters writes that a delegation led by a senior member of the Chinese  Communist Party’s International Liaison Department – which is the main Chinese body dealing with North Korea – left Beijing for North Korea on Thursday.

    Meanwhile, both South Korean government officials and a Chinese official with the Liaison Department challenged subsequent reports suggesting that Kim was in grave danger after surgery, while South Korean officials said they had detected no signs of unusual activity in North Korea. On Thursday, President Donald Trump also downplayed earlier reports that Kim was gravely ill. “I think the report was incorrect,” Trump told reporters, but he declined to say if he had been in touch with North Korean officials.

    One day later, on Friday, a South Korean source told Reuters their intelligence was that Kim was alive and would likely make an appearance soon. The person said he did not have any comment on Kim’s current condition or any Chinese involvement. An official familiar with U.S. intelligence said that Kim was known to have health problems but they had no reason to conclude he was seriously ill or unable eventually to reappear in public.

    Secretary of State, Mike Pompeo, when asked about Kim’s health on Fox News after Trump spoke said, “I don’t have anything I can share with you tonight, but the American people should know we’re watching the situation very keenly.”

    The last time North Korea’s state media reported on Kim’s whereabouts was when he presided over a meeting on April 11. However, as noted above, state media did not report that he was in attendance at an event to mark the birthday of his grandfather, Kim Il Sung, on April 15, an important anniversary in North Korea.

    Kim, believed to be 36, has disappeared from coverage in North Korean state media before. In 2014, he vanished for more than a month and North Korean state TV later showed him walking with a limp. Speculation about his health has been fanned by his heavy smoking, apparent weight gain since taking power and family history of cardiovascular problems.

    When Kim Jong Un’s father, Kim Jong Il, suffered a stroke in 2008, South Korean media reported at the time that Chinese doctors were involved in his treatment along with French physicians.

     

    Earlier:

    Kim Jong Un was last seen publicly on the weekend of April 11th, but after he was nowhere in sight during the national holiday celebration of his grandfather’s birthday on April 15 — highly unusual for the important “Day of the Sun” commemorations, this triggered multiple unconfirmed reports that the North Korean leader was in critical condition after receiving heart surgery.

    First, it should be noted that the Western mainstream press often gets North Korea completely wrong — and in the case of the latest speculation a high degree of critical skepticism is warranted further given the initial source for the heart surgery claims was a US state-funded media outlet based in South Korea, the Daily NK website.

    South Korean officials also downplayed the news, which had initially riled markets at the start of the week, suggesting he was “touring provincial areas”. President Trump also during the regular White House briefing Thursday evening called rumors of Kim’s ill health “fake news”.

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    North Korean leader Kim Jong Un, via KCNA.

    While there’s been lots of questions and speculation, it still remains no satisfactory answers have been given.

    Instead, more contradictory reports out of Seoul based on intelligence sources, which suggest he’s been “evacuated” from Pyongyang to a coastal city. The new reports say he’s on the move and out of the public eye primarily due to COVID-19 outbreaks among key sectors of the country, also which Pyongyang officials have sought to downplay. 

    UPI outlines the latest reports as follows:

    Kim may have been evacuated to the coastal city of Wonsan, Kangwon Province, where he may have been providing field guidance at a resort construction site, South Korean news service Newsis reported Friday, citing Seoul’s national intelligence sources.

    According to Newsis, movement has been observed among “dedicated vehicles” for Kim that suggest he may have been evacuated from Pyongyang. A special train for Kim’s use was stationed in Wonsan, but Kim’s private plane remained in Pyongyang, the report says.

    And further, “In the new location, Kim may be carrying out field guidance activities, at Tanchon Hydroelectric Power Plant, or visiting a North Korean artillery unit in Sondok, where short-range projectiles were fired in March,” the report speculates based on official sources.

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    If he does make an appearance anytime soon, it’s likely to be related to North Korea’s Military Foundation Day events on Saturday, though reports and official photographs could still take days to be released. 

    Assuming he is rapidly moving to different locations of the country, it’s unlikely his condition would be “gravely ill” as the initial dire headlines speculated. US intelligence is said to be monitoring the situation. 

    Meanwhile, joint US-South Korea military drills have just wrapped up. The five-day long regularly scheduled air exercise came following the North launching at least five missile tests so far this year, and as Pyongyang’s anger and frustration over stalled nuclear talks with Washington is increasingly on display.


    Tyler Durden

    Fri, 04/24/2020 – 21:00

  • Violent Food & Fuel Shortage Riots Grip Venezuela Amid COVID-19 Lockdown
    Violent Food & Fuel Shortage Riots Grip Venezuela Amid COVID-19 Lockdown

    Despite a six week mandated nationwide coronavirus lockdown, broad protests have once again gripped parts of Venezuela amid crippling food and fuel shortages. Citizens are being asked to stay home, yet can’t get enough food to survive. 

    New reporting by Bloomberg counts at least 500 protests across 15 states so far this month, which has included multiple killed and scores wounded and arrested in often violent clashes with police, also as protests turn to looting.

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    Riot and looting scene in Venezuela this week.

    Riots have also reportedly erupted in some instances over police attempting to enforce quarantine rules, such as the wearing of masks being enforced in all public spaces. This as only 311 cases of coronavirus and 10 deaths have been reported nationwide according to official government figures.

    However, in part thanks to US-led sanctions, what little personal protective gear was available flew off the shelves last month, with few options available for most citizens other than sewing their own masks. 

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    While most families in North America have Amazon and Walmart deliveries of food and vital items coming to their door, also amid an abundance of cheap gas, Venezuleans are forced to venture out of self-isolation seeking out needed resources to survive.

    “Stocking up and hunkering down isn’t an option for many people who are too poor to buy enough food in advance,” as Bloomberg notes.

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    Bloomberg further emphasizes the situation is only set to continue spiraling downward, possibly into political unrest: 

    Vast gasoline shortages are taking a toll on already fragile supply chains, disrupting food deliveries and public transportation everywhere. The situation is likely to continue: there are few signs of long-term relief for local refineries. In the meantime, crops in rural states have gone to waste as farmers are unable to collect fruit and grains on empty tanks. 

    Dozens of Venezuelans clashed with police forces in the countryside of southern Bolivar state on Thursday.

    Looting has also been observed as the poor get desperate. They find themselves in a dangerous Catch-22: on the one hand risking arrest for going outside in town streets, but on the other risking their family’s starvation if they don’t venture far out for food and vital supplies.

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    The food and fuel crises are directly intertwined, exacerbated by American sanctions which especially seek to choke Venezuelan oil exports, refining and operations, as Reuters describes: 

    Irrigation systems are halted in the western Andean highlands and laborers cannot get to fields for harvest. The fuel shortages have worsened in recent weeks as Washington has tightened sanctions on the socialist government of President Nicolas Maduro.

    Even before the coronavirus crisis, some 9 million Venezuelans already were suffering from malnutrition, according to the U.N. World Food Programme, and the latest developments may make it increasingly difficult to keep the country in quarantine.

    Simply put, vast stores of food are rotting as producers lack the means to get them to market. 

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    It was a crisis already in the making, sent hurling over the edge by Caracas’ stay-at-home orders. As Reuters details further: 

    The OPEC country’s decrepit refineries are in near collapse and the U.S. State Department has pressured companies not to sell gasoline to Venezuela, according to sources, creating long lines at service stations around the country.

    Maduro blames the fuel shortages and the economic problems on U.S. sanctions.

    Venezuela’s heavy fuel subsidies have made it so cheap that drivers rarely bother paying for it when they fill up at PDVSA service stations.

    “This is what humanitarian activists hoped to never see: a sanitary crisis on top of a nutritional crisis,” a Venezuelan health expert, Susana Raffalli, said of the accelerating crisis. 

    In the town of Calabozo this week, a local police station was attacked reportedly after mass arrests over violating the mask mandate and ‘stay at home’ orders. Angry crowds could be seen attempting to break in to the police station to free relatives. 

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    “It hits us as the country does not have gasoline, protective equipment or a clear response to COVID-19,” Raffalli added.


    Tyler Durden

    Fri, 04/24/2020 – 20:55

  • Reopen The Economy While Protecting Those Truly At Risk… Or Risk Another Great Depression
    Reopen The Economy While Protecting Those Truly At Risk… Or Risk Another Great Depression

    Authored by Mark Glennon via Wirepoints.org,

    Please, please, wake up. A calamity far worse than COVID-19 itself is at hand.

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    Frightening as the death toll from the virus is, a more terrifying consequence looms: a depression, and a major one.

    If you think that’s exaggeration, it’s because expert opinion and news on the economy is drowned out by “frightening, click-bait headlines” that are “not useful” on meaningless numbers.

    The assessments from sources of all political stripes are everywhere, though you won’t see them mentioned by politicians or most of the media the general public reads. Here are a few:

    “We are experiencing an economic contraction that is faster and deeper than anything we have seen in the past century, or possibly several centuries,” Bank of England interest-rate setter Jan Vlieghe said. [Emphasis added.]

    The coronavirus collapse has the ingredients to surpass the disaster of the 1930s…. Let’s hope this depression won’t last a decade, but an unprecedented slump followed by years of pain seems inevitable, said a Bloomberg commentary.

    From economist Nouriel Roubini: “The best economic outcome that anyone can hope for is a recession deeper than that following the 2008 financial crisis. But given the flailing policy response so far, the chances of a far worse outcome are increasing by the day.”

    “Forget recession, this is a depression,” says the left wing Guardian.

    The coronavirus pandemic will push the global economy into the deepest recession since the Great Depression, with the world’s poorest countries suffering the most, the head of the International Monetary Fund said Thursday.

    “The expectation of market participants is that we’re in the Great Depression and that in a sense, the news can’t get much worse,” said BNY Mellon chief strategist Alicia Levine.

    “At this point it would take a miracle to keep this recession from turning into the Great Depression II,” says Chris Rupkey, of Mitsubishi’s economic unit.

    We are fighting the last war. Politicians and most of the press talk incessantly about “the curve” on virus infections, the point of which was to ensure that hospital capacity wasn’t exceeded. But we already won that, having excess capacity that is growing every day.

    It’s time to bend different, more terrifying curves. Here’s one. It’s unemployment claims, from the St. Louis Federal Reserve Bank:

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    Unemployment is likely already at Great Depression-era highs.

    And take no solace from the stock market, which has held up quite well. It’s artificially pumped up by Federal Reserve Bank stimulants. The reality for most Americans is very different, which was captured beautifully on a screenshot from earlier this month showing the market soaring while unemployment surged:

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    To contain or head off the looming depression, our policy on the Wuhan Virus must change immediately. Two Stanford experts summarized the right approach as follows:

    The appropriate policy, based on fundamental biology and the evidence already in hand, is to institute a more focused strategy like some outlined in the first place: Strictly protect the known vulnerable, self-isolate the mildly sick and open most workplaces and small businesses with some prudent large-group precautions. This would allow the essential socializing to generate immunity among those with minimal risk of serious consequence, while saving lives, preventing overcrowding of hospitals and limiting the enormous harms compounded by continued total isolation. Let’s stop underemphasizing empirical evidence while instead doubling down on hypothetical models. Facts matter.

    Please, please wake up.


    Tyler Durden

    Fri, 04/24/2020 – 20:35

  • EU Leaders Rewrite Document On Government Coronavirus Disinfo After China's Government Freaks Out
    EU Leaders Rewrite Document On Government Coronavirus Disinfo After China’s Government Freaks Out

    EU leaders bowed to China this week, softening their criticism of the communist regime in a report documenting how governments have pushed disinformation about the coronavirus pandemic.

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    Illustration: Aïda Amer/Axios

    “China has continued to run a global disinformation campaign to deflect blame for the outbreak of the pandemic and improve its international image,” read the initial report, according to a copy seen by the New York Times. “Both overt and covert tactics have been observed.”

    It cited Beijing’s efforts to curtail mentions of the virus’s origins in China, in part by blaming the United States for spreading the disease internationally. It noted that Beijing had criticized France as slow to respond to the pandemic and had pushed false accusations that French politicians used racist slurs against the head of the World Health Organization. The report also highlighted Russian efforts to promote false health information and sow distrust in Western institutions. –NYT

    But after China ‘moved quickly to block the document’s release,’ European officials immediately delayed – and then rewrote the document which “diluted the focus on China, a vital trading partner.“

    “The Chinese are already threatening with reactions if the report comes out,” said EU diplomat Lutz Güllner in a Tuesday email seen by The Times.

    The original report said that European analysts had assessed a “continued and coordinated push by official Chinese sources to deflect any blame.” That wording now says: “We see continued and coordinated push by some actors, including Chinese sources, to deflect any blame.” –NYT

    Notably, the sentence about China’s “global disinformation” campaign was shelved, as well as the claims made against France, along with other language.

    It’s near-universal knowledge (outside of China) that the CCP muzzled doctors and journalists who were reporting facts about the Wuhan coronavirus as the virus began to spread out of control late last year – while the Trump administration has consistently blamed China for their poor handling of the outbreak, as well as spreading false information about the disease, such as whether it was transmissible between humans.

    President Trump said last week that his government was trying to figure out whether the virus came from a Chinese lab, while China has accused the American government of trying to distract the public from its own mistakes. –NYT

    The European Union, meanwhile, was set to issue its report on Tuesday – until Chinese officials “quickly contacted the European Union’s representatives in Beijing to try to kill the report,” according to two diplomats.

    The Times notes that the report’s alteration comes at a time when the EU is trying to get better treatment for its companies in China, with two-way trade estimated at over $1.6 billion per day before the pandemic. Both German automakers and French farmers are among the EU industries which heavily rely on Chinese exports, according to the report.

    EU spokesman Peter Stano said on Friday that the report hadn’t been delayed, saying “It is ready once it is complete, cleared in an editorial process and ready to be uploaded.”

    Except on Tuesday morning, an email which circulated within the disinformation task force with the subject line: “READY for publication.” The report was reportedly approved and a summary was moments away from publication after it was ordered held by Esther Osorio – a senior adviser to the EU’s top diplomat, Josep Borrell, according to the Journal, citing an email.

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    Esther Osorio (Twitter profile)

    Central and Eastern Europe, in particular, are a hotbed for disinformation tactics, diplomats say. “Poland is the petri dish for Russia and China to try out their disinformation, their trolls and bots,” the American ambassador in Poland, Georgette Mosbacher, said in an interview on Thursday.

    As officials in Brussels delayed publishing their report, Chinese officials in Beijing kept up the pressure with at least two high-level calls to the European representatives there, according to emails and interviews with diplomats. Chinese officials expressed alarm at the news of a coming report and urged the bloc not to release the document. –NYT

    According to the report, Osorio asked analysts to revise the document and lighten up on China and Russia to avoid accusations of bias – making sure they differentiated between ‘pushing disinformation and aggressively pushing a narrative.’

    “Such appeasement will set a terrible precedent and encourage similar coercion in the future,” said analyst Monika Richter, adding that EU diplomats are “self-censoring to appease the Chinese Communist Party.“


    Tyler Durden

    Fri, 04/24/2020 – 20:15

  • Daily Briefing – April 24, 2020
    Daily Briefing – April 24, 2020

    a


    Tyler Durden

    Fri, 04/24/2020 – 20:00

  • "It Will All End Badly" – The Coming Economic End-Game
    “It Will All End Badly” – The Coming Economic End-Game

    Authored by Bruce Wilds via Advancing Time blog,

    The wonderful thing about numbers is that when they are not jockeyed, jerked around, and falsified they tend to tell the truth. Continuing on this thought looking down the road the numbers do not work. This is where the late, Allen Meltzer, recognized for his wisdom and achievements in economics, enters the story. Meltzer was a professor of political economy at Carnegie Mellon University and a visiting fellow at the Hoover Institution.

    He authored the three-volume “A History of the Federal Reserve” and for over 25 years he chaired the Shadow Open Market Committee, a group that meets regularly to discuss the policy of the Federal Reserve.

    To say Meltzer was not a fan of the economic policies that have unfolded since 2008 is an understatement.

    “We’re in the biggest mess we’ve been in since the 1930s,” he has been quoted as saying, before he went on to claim that, “We’ve never had a more problematic future.” 

    This is about a person born in 1928 that while viewed by many economists as America’s foremost expert in monetary policy is little known by the masses. Meltzer was not been a fan of recent economic policy.

    In a Wall Street Journal opinion piece on June 30, 2010, titled “Why Obamanomics Has Failed” Meltzer wrote about how uncertainty about future taxes and regulations was the biggest enemy facing future economic growth. He goes on to say that the administration’s stimulus program failed. Two overreaching reasons explain the failure of Obamanomics.

    • First, administration economists and their outside supporters neglected the longer-term costs and consequences of their actions.

    • Second, the administration and Congress have through their deeds and words heightened uncertainty about the economic future.

    Meltzer said most of the earlier spending was a very short-term response to long-term problems. Part of the money financed temporary tax cuts, this was a mistake because it ignores the role of expectations in the economy. Unless tax cuts are expected to last, consumers save the proceeds and pay down debt. Another large part of the stimulus went to relieve state and local governments of their budget deficits. Transferring a deficit from the state to the federal government changes very little. Some teachers and police got an additional year of employment, but their gain is temporary. Any benefits to them must be balanced against the negative effect of the increased public debt and the temporary nature of the transfer.

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    Soaring National Debt

    This seems to coincide with what Peter Schiff says, printing money is to the economy what taking drugs is to a drug addict. In the short term, it makes the economy feel good, but in the long run, it is much worse off. What was once the “long-run” or “distant future” may be getting very near. Soon the dollar and the American economy will be nearly dead. I recently reviewed a book I read years ago, in his book “A Time For Action” written in 1980 William Simon, a former Secretary of the Treasury tells how he was “frightened and angry”.  In short, he was sounding the trumpet about how he saw the country was heading down the wrong path. Looking back, it is hard to imagine how we have made it this long without addressing the concerns that Simon wrote about so many years ago. Back then it was about billions of dollars of debt, today it is about trillions of dollars.

    People have been forced into riskier assets because of low-interest rates. When interest rates rise, as they will at some point, the value of these risky investments will decline, and these investors will be hurt. Making things worse is the fact that interest payments on the public debt will rise increasing the budget deficit which has grown massively in past years. It is clear that prices in some sectors of the economy have been rising rapidly and major distortions exist within the marketplace. When the large “too big to fail” banks like Goldman and Bank of America report they made profits in the market on roughly 95% of trading days in 2012 we have to raise an eyebrow. This is an indication that the game is manipulated as no trader is that good.

    Returning to Allen Meltzer he penned a piece that appeared in the Wall Street Journal in May of 2014, in the article Meltzer gives his take on where the economy is headed. I highly value his opinion, not only because it is based on his long developed work and studies, but he seems to have far less motivation to lie than many of those currently involved in forming policies today. Meltzer wrote;

    The U.S. Department of Agriculture forecasts that food prices will rise as much as 3.5% this year, the biggest annual increase in three years. Over the past 12 months from March, the consumer-price index increased 1.5% before seasonal adjustment. These are warnings. Never in history has a country that financed big budget deficits with large amounts of central-bank money avoided inflation. Yet the U.S. has been printing money—and in a reckless fashion—for years.

    The Obama administration has run huge budget deficits every year, which, together with the Bush administration, has amounted to $6.7 trillion from 2006 to 2013. The Federal Reserve financed almost $3 trillion of these deficits by purchasing Treasury bonds and notes. The Fed has also purchased massive amounts of mortgage-backed securities. Today, with more than $2.5 trillion of idle reserves on bank balance sheets, there is enormous fuel for greater inflation once lending and money growth rises

    To avoid the kind of damaging inflation the U.S. experienced in the 1970s and early ’80s, the Fed could raise interest rates, including the interest it pays banks on reserves, inducing banks to hold most of the $2.5 trillion of reserves idle. But interest rates high enough to discourage borrowing and lending would likely send the economy into another damaging recession

    Fed Chairwoman Janet Yellen recently admitted that the central bank doesn’t have a good model of inflation. It relies on the Phillips Curve, which charts what economist Alban William Phillips in the late 1950s saw as a tendency for inflation to rise when unemployment is low and to fall when unemployment is high. Two of the most successful Fed chairmen, Paul Volcker and Alan Greenspan, considered the Phillips Curve unreliable. The Fed’s forecasts of inflation ignore Milton Friedman’s dictum that “inflation is always and everywhere” a result of excessive money growth relative to the growth of real output.

    The Fed focuses far too much attention on distracting monthly and quarterly data while ignoring the longer-term effects of money growth. The country’s present dilemma originated in 2008 when the Fed properly and forcefully prevented a collapse of the payments system. But long before idle reserves reached $2.5 trillion, the Fed didn’t ask itself: What can we do by adding more reserves that banks cannot do by using their massive idle reserves? The fact that the reserves sat idle to earn one-quarter of a percent a year should have been a clear signal that banks didn’t see demand to borrow by prudent borrowers.

    The Fed’s unprecedented quantitative easing since 2008 failed to lead to a robust recovery. The unemployment rate has gradually declined, but the main reason is that workers have withdrawn from the labor force. The stock market boomed, bringing support from traders, but the rise in asset prices of equities didn’t stimulate growth by inducing investment in new capital. Investment continues to be sluggish.

    And some side effects of the Fed policies have had ugly consequences. One of the worst is that ultra-low interest rates induced retired citizens to take substantially greater risk than the bank CDs that many of them relied on in the past. Decisions of this kind end in tears. Another is the loss that bondholders cannot avoid when interest rates rise, as they have started to do.

    Accumulating data from the sluggish loan market and the weak responses of employment and investment should have alerted the Fed that the growth of reserves and the low interest rates haven’t been achieving much. Similarly, the Fed should have noticed in recent years that instead of a strong housing-market recovery, not many individuals were taking out first mortgages. Many of the sales were to real-estate speculators who financed their purchases without mortgages and are now renting the houses, planning to resell them later.

    Most of all the Fed years ago should have recognized that the country’s economic problems weren’t arising from monetary factors. Instead of keeping interest rates low to finance deficits, the Fed should have explained that costly regulation, increased health-care costs, wasteful spending and repeated threats to raise tax rates were holding back the recovery.

    Broadly speaking, the Obama administration has pursued a course the opposite of that taken by the Kennedy and Johnson administrations in the 1960s (and the Reagan administration in the 1980s). Kennedy-Johnson enacted across-the-board tax cuts: Promoting growth came first, redistribution later. By putting redistribution first and sacrificing growth, the Obama administration got neither.

    Ironically, despite often repeated demands for increased redistribution to favor middle- and lower-income groups, the policies pursued by the Obama administration and supported by the Federal Reserve have accomplished the opposite.

    When the president campaigns in the midterm election, he will talk about the relative gains by the 1%. Voters should recognize that goosing the stock market through very low interest rates, not to mention the subsidies and handouts to cronies, have contributed to that result. We are now left with the overhang. Inflation is in our future. Food prices are leading off, as they did in the mid-1960s before the “stagflation” of the 1970s. Other prices will follow.

    The point of this post is to clarify that just because we have muddled along putting band-aids on our economy does not mean that we have accomplished a great deal. The Trump economy has been a continuation of deficit spending. We have postponed the day of reckoning but most likely made it far worse. Allen Meltzer was a true old school economist that understood this. The time the Federal Reserve has bought for the country to come to terms with its many problems has been squandered at a great cost. While many people claim the American economy was great before covid-19 hit, others like me who work on Main Street beg to differ. For years, an ugly reality has been masked by easy money and deficit spending. While it is difficult to time when our false economy will finally give up the ghost, it is clear this will all end badly.

    *  *  *

    This has become a two-part article because of its length. The second part which focuses on where all the is likely to lead will be published soon. 


    Tyler Durden

    Fri, 04/24/2020 – 19:55

  • Goldman CEO David "DJ D-Sol" Solomon Will Appear In Upcoming Season Of "Billions"
    Goldman CEO David “DJ D-Sol” Solomon Will Appear In Upcoming Season Of “Billions”

    Goldman CEO David Solomon was called a Wall Street “trendsetter” for embracing his favorite hobby, DJing under the stagename “DJ D-Sol.”

    Now, Solomon has once again found himself a step ahead of the curve: While millions of Americans open LetGo accounts, sign up for ride-share apps amid a desperate scramble to compensate for hours/wages lost during the shutdown, Solomon is taking up another another side-hustle, too.

    The longtime Goldman executive, whose bank recently settled the 1MDB case with the DoJ in what some might all a ‘sweetheart’ deal, will make a cameo appearance during the upcoming season of the Showtime hit “Billions”, a taught, sexy corporate thriller about a hero hedge fund manager’s unsolicited oppression at the hands of a federal prosecutor/pisspig.

    The Goldman Sachs CEO filmed a guest appearance for the latest season of “Billions” – the Showtime series chronicling fictional hedge fund outlaw Bobby Axelrod that’s drawn a cult viewership in the real industry. Solomon was roped into the gig at the end of last year and shot his cameo, playing himself, in early March.

    It’s another way the 58-year-old is striking an unusually public persona atop the historically staid investment bank. Predecessors for generations have tried to separate themselves from Wall Street’s flashier impulses. Solomon, in contrast, is famous for his side-gigs as DJ D-Sol, finding himself at a ritzy Super Bowl party in February on a lineup alongside the Black Eyed Peas, Marshmello, and the rapper DaBaby.

    “Billions” is known for its Wall Street cameos, including the likes of Omeed Malik, Marc Lasry and Mark Cuban. The next season premieres in May. Showtime wouldn’t confirm or deny Solomon’s part. And in showbiz, there’s always a chance he might not make the final cut.

    Solomon has a relatively low-stress role for his first turn in front of the camera: he will be playing a fictionalized version of himself. But given Solomon’s relatively low public profile relative to his successor, we can’t help but wonder if the producers tried to phone in a favor with the former ‘most powerful man on Wall Street’.

    We’d imagine Lloyd was probably too busy hanging out on David Geffen’s yacht to give a shit.


    Tyler Durden

    Fri, 04/24/2020 – 19:35

  • 6 Obnoxious Spending Habits Of The 'Sheltering In Place' Rich & Famous
    6 Obnoxious Spending Habits Of The ‘Sheltering In Place’ Rich & Famous

    Authored by Josh Owens via SafeHaven.com,

    In the American economic shutdown, the poor are suffering loss of jobs because they’re not benefitting from wealthy spending sprees amid COVID-19, while the rich… well, they’re just on an extended vacation. 

    Celebrities are making fools of themselves as they try to play the everyman, and the non-celebrity wealthy are obnoxiously bingeing on things that will make the not-so-wealthy cringe at a time when hard-working people are wondering how much longer they can hold out. 

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    They don’t necessarily want hand-outs, and there’s no place in their world for sushi-to-go that costs nearly as much as rent, nor do they have the option of buying their own private island to wait it out.

    Here’s the SafeHaven.com list of top wealthy buys on their COVID-19 vacations:

    #1 Private Chefs for an Expensive One-Off Meal

    The wealthy are under quarantine like everybody else, but it seems they’ve realized they are not cut for cooking, even if their long-lost inner baker is calling them. 

    During the pandemic, inquiries to hire in-house chefs have surged and several new companies have emerged as a result across New York City and California, connecting prospective clients with private, recently unemployed, home chefs.

    For instance, the private cooking company the Culinistas charges as much as $250 a meal, not including the cost of groceries. The chefs procure the necessary groceries and bring them to cook in the client’s kitchen, and they clean up afterwards, too. 

    #2 We’re All In Food Delivery Together (Not Really)

    “We’re all in this together,” many marketers and celebrities are telling on TV. But it is clear that we are “togethering” in a different way. Since the start of the pandemic, food delivery services and apps are experiencing a surge in demand, but the super-rich are doing it differently.

    Those quarantined are reporting weeks-long waits on Instacart, Shipt and other leading platforms as demand is far outpacing supply. But for the wealthy, the wait is much shorter. That’s primarily because they use special grocery delivery services that cater specifically to the rich. 

    For instance, with orders of $275 or more, Regalis Foods will throw in a free ounce of caviar. The company, which catered upscale restaurants before the pandemic, is now delivering to peoples’ homes, and it’s not just when you run out of flour or toilet paper: They’ll even deliver live king crab for $395.

    Sushi eatery Masa, one of the priciest restaurants in the country, which was closed down in wake of the COVID-19 pandemic, has begun selling takeout meals for the price of $800. Only 20 box-sets are available per week.

    The price appears to be a bargain, as the restaurant explained that it box feeds up to four people, making it about $200 per person, compared to the regular price which runs for $595 per person.

    #3 Can’t Travel Safely? Book An Entire Hotel/Motel

    Vacation rental platforms have seen the majority of their bookings canceled in a trend that has already been dubbed “AirBnB Apocalypse”. Several cities in the US and Canada have also  banned short-term rentals. However, there are few lucky hosts who have managed to lure in the wealthy by renting out their entire complex. 

    While overall reservations have dropped between 50% and 60% a week since the outbreak, reservations in more remote areas have still been consistent.

    CNN Travel reported that wealthy families are booking out entire hotels to wait out the quarantine. One of them is the Blantyre Country Resort, available for a small group or a single family for $38,000 a day. Several other hotels and inns across the country are offering unique packages for families. 

    #4 Private Islands, Why Not?

    In the last two months, upscale real estate agencies have been reporting a massive increase in inquiries for private islands for sale or rent in the Caribbean.  

    One agency reported receiving a lot of “desperate” inquiries from people on yachts, who after being “stranded” offshore for weeks, are circling islands “trying to find a safe place to go and are willing to pay a premium”. 

    #5 Survival Condos for Wealthy 

    The rich are literally hunkering down.

    Bunker and bomb shelter manufacturers have seen business increase fourfold compared to the same period last year. U.S.-based bunker maker Survival Condo offers several models and the unit prices range from around $500,000 to $2.4 million and include facilities such as indoor pools, gyms and even rock climbing walls.

    #6 The Travel Bag You Simply Must Have

    Hand sanitizer is in short supply. People are piling toilet paper even if they aren’t sure why. And every household should have an air purifier. But hunkering down and isolation is nothing without the ultimate survival bag. 

    Anyone with an extra $5000 can now bug out in style. Emergency kit maker Preppi, whose sales increased 5,000% last month, is offering a bag that includes a satellite phone, night vision glasses, sleeping bags…and a Caviar Cooler Case and serving set. The basic model costs only $445.

    For a more sober take, the Centers for Disease Control and Prevention (CDC) recommends having at least one gallon of water per person per day, and a three-day supply of food–no caviar necessary. 

    Earlier this week, the CDC warned that the novel coronavirus could have a second wave – which could be even more catastrophic than the last. According to historians, the 1918 pandemic also came in two waves. The first wave hits the poor, the second wave hits the rich, according to the academic research. 


    Tyler Durden

    Fri, 04/24/2020 – 19:15

  • The Data Is In… Stop The Panic & End The Total Isolation
    The Data Is In… Stop The Panic & End The Total Isolation

    Authored by Scott Atlas, M.D., op-ed via The Hill,

    The tragedy of the COVID-19 pandemic appears to be entering the containment phase. Tens of thousands of Americans have died, and Americans are now desperate for sensible policymakers who have the courage to ignore the panic and rely on facts. Leaders must examine accumulated data to see what has actually happened, rather than keep emphasizing hypothetical projections; combine that empirical evidence with fundamental principles of biology established for decades; and then thoughtfully restore the country to function.

    Five key facts are being ignored by those calling for continuing the near-total lockdown.

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    Fact 1: The overwhelming majority of people do not have any significant risk of dying from COVID-19.

    The recent Stanford University antibody study now estimates that the fatality rate if infected is likely 0.1 to 0.2 percent, a risk far lower than previous World Health Organization estimates that were 20 to 30 times higher and that motivated isolation policies.  

    In New York City, an epicenter of the pandemic with more than one-third of all U.S. deaths, the rate of death for people 18 to 45 years old is 0.01 percent, or 11 per 100,000 in the population. On the other hand, people aged 75 and over have a death rate 80 times that. For people under 18 years old, the rate of death is zero per 100,000. 

    Of all fatal cases in New York state, two-thirds were in patients over 70 years of age; more than 95 percent were over 50 years of age; and about 90 percent of all fatal cases had an underlying illness. Of 6,570 confirmed COVID-19 deaths fully investigated for underlying conditions to date, 6,520, or 99.2 percent, had an underlying illness. If you do not already have an underlying chronic condition, your chances of dying are small, regardless of age. And young adults and children in normal health have almost no risk of any serious illness from COVID-19.

    Fact 2: Protecting older, at-risk people eliminates hospital overcrowding.

    We can learn about hospital utilization from data from New York City, the hotbed of COVID-19 with more than 34,600 hospitalizations to date. For those under 18 years of age, hospitalization from the virus is 0.01 percent per 100,000 people; for those 18 to 44 years old, hospitalization is 0.1 percent per 100,000. Even for people ages 65 to 74, only 1.7 percent were hospitalized. Of 4,103 confirmed COVID-19 patients with symptoms bad enough to seek medical care, Dr. Leora Horwitz of NYU Medical Center concluded “age is far and away the strongest risk factor for hospitalization.” Even early WHO reports noted that 80 percent of all cases were mild, and more recent studies show a far more widespread rate of infection and lower rate of serious illness. Half of all people testing positive for infection have no symptoms at all. The vast majority of younger, otherwise healthy people do not need significant medical care if they catch this infection.

    Fact 3: Vital population immunity is prevented by total isolation policies, prolonging the problem.

    We know from decades of medical science that infection itself allows people to generate an immune response — antibodies — so that the infection is controlled throughout the population by “herd immunity.” Indeed, that is the main purpose of widespread immunization in other viral diseases — to assist with population immunity. In this virus, we know that medical care is not even necessary for the vast majority of people who are infected. It is so mild that half of infected people are asymptomatic, shown in early data from the Diamond Princess ship, and then in Iceland and Italy. That has been falsely portrayed as a problem requiring mass isolation. In fact, infected people without severe illness are the immediately available vehicle for establishing widespread immunity. By transmitting the virus to others in the low-risk group who then generate antibodies, they block the network of pathways toward the most vulnerable people, ultimately ending the threat. Extending whole-population isolation would directly prevent that widespread immunity from developing.

    Fact 4: People are dying because other medical care is not getting done due to hypothetical projections.

    Critical health care for millions of Americans is being ignored and people are dying to accommodate “potential” COVID-19 patients and for fear of spreading the disease. Most states and many hospitals abruptly stopped “nonessential” procedures and surgery. That prevented diagnoses of life-threatening diseases, like cancer screening, biopsies of tumors now undiscovered and potentially deadly brain aneurysms. Treatments, including emergency care, for the most serious illnesses were also missed. Cancer patients deferred chemotherapy. An estimated 80 percent of brain surgery cases were skipped. Acute stroke and heart attack patients missed their only chances for treatment, some dying and many now facing permanent disability.

    Fact 5: We have a clearly defined population at risk who can be protected with targeted measures.

    The overwhelming evidence all over the world consistently shows that a clearly defined group — older people and others with underlying conditions — is more likely to have a serious illness requiring hospitalization and more likely to die from COVID-19. Knowing that, it is a commonsense, achievable goal to target isolation policy to that group, including strictly monitoring those who interact with them. Nursing home residents, the highest risk, should be the most straightforward to systematically protect from infected people, given that they already live in confined places with highly restricted entry.

    The appropriate policy, based on fundamental biology and the evidence already in hand, is to institute a more focused strategy like some outlined in the first place: 

    • Strictly protect the known vulnerable,

    • self-isolate the mildly sick, and 

    • open most workplaces and small businesses with some prudent large-group precautions. 

    This would allow the essential socializing to generate immunity among those with minimal risk of serious consequence, while saving lives, preventing overcrowding of hospitals and limiting the enormous harms compounded by continued total isolation. Let’s stop underemphasizing empirical evidence while instead doubling down on hypothetical models. Facts matter.

    *  *  *

    Scott W. Atlas, MD, is the David and Joan Traitel Senior Fellow at Stanford University’s Hoover Institution and the former chief of neuroradiology at Stanford University Medical Center.


    Tyler Durden

    Fri, 04/24/2020 – 18:55

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