Feb 25

Today’s News 25th February 2020

  • Netanyahu Threatens All-Out War After 90 Rockets Fired From Gaza
    Netanyahu Threatens All-Out War After 90 Rockets Fired From Gaza

    Monday witnessed significant escalation over Gaza as Palestinian Islamic Jihad sought to avenge the deaths of three commanders killed in Israeli air strikes on Gaza and Damascus the day before. 

    Israeli media counted some 90 total rockets fired at Israel from the Gaza Strip throughout the day since the attacks began Sunday night, with the IDF claiming its Iron Dome defense system had intercepted the vast majority which came near populated areas.

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    Israeli airstrike on Gaza City on Monday, February 24, via AFP/The Times of Israel.

    Prime Minister Benjamin Netanyahu had earlier threatened to initiate broader war if the rocket fire didn’t cease. Despite an Islamic Jihad spokesman announcing a unilateral cease-fire by the early evening, the rocket fire was reported as continuing later into the night Monday. 

    “We are now hitting with planes, tanks, and helicopters,” Netanyahu said while inspecting an Iron Dome unit in the south. “I’m talking about a war,” Netanyahu, who is entering a final week of campaigning before Israeli national elections, had further told Israel’s Army Radio station. “I only go to war as a last option, but we have prepared something you can’t even imagine.”

    He also appeared to threaten to kill the heads of Hamas and Islamic Jihad if the rockets continued, saying:

    “We will continue to strike until the calm returns. If there isn’t quiet, you’ll be next.”

    Some 30 rockets were initially fired out of the Gaza Strip on Sunday night, and it continued to escalate through Monday.

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    In a developing stand-off, Islamic Jihad appeared to threaten its own continuation and step up of attacks, blaming Israel for not stopping its aggression. 

    “The enemy did not commit itself into stopping its aggression we we resumed based on the fire-for-fire principle,” Islamic Jihad spokesman Abu Hamza, said. 

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    Pundits were quick to point the finger at Iran for allegedly supplying increasingly sophisticated rockets to militant groups in the strip, which are reaching deeper into Israel.

    Meanwhile, Israel is reportedly sending tanks, armored vehicles and troops to its southern border in what could become the next round of major fighting at a politically sensitive moment ahead of next week’s election.


    Tyler Durden

    Tue, 02/25/2020 – 01:00

  • American Gun Ownership: The Positive Impacts Of Law-Abiding Citizens Owning Firearms
    American Gun Ownership: The Positive Impacts Of Law-Abiding Citizens Owning Firearms

    Authored by Molly Carter via Ammo.com,

    It’s no secret that mainstream press coverage of gun ownership in the United States tends to be in favor of gun control – especially when those reporting on the topic are not firearm owners themselves. Journalists focus on how many people are killed by guns, how many children get their hands on improperly stored firearms, and how many deranged individuals go on shooting sprees.

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    This anti-gun news bias is widespread among the “urban elite” who have very little personal experience with guns and yet write for influential newspapers like The New York Times, Washington Post, etc. Despite this bias, law-abiding private citizens owning guns does have positive impacts on American society that often go unreported – many of which are significant.

    Criminals and the Armed Citizen

    Perhaps the most notable impact of gun ownership on American society is how it influences the behavior of criminals.

    The fact is, criminals fear armed citizens more than they do the police. There’s many reasons for this, but here are the most prominent:

    • Police are rarely onsite during a crime.

    • Police are bound by policy and procedures, and are trained to only use their firearms if it’s absolutely necessary.

    • Civilians are also less trained.

    In a research study sponsored by the United States Department of Justice, James Wright and Peter Rossi interviewed over 1,800 incarcerated felons, asking how they felt about civilians and gun ownership. Thirty-three percent of these criminals admitted to being scared off, shot at, wounded, or captured by a gun-owning victim. Sixty-nine percent of them knew at least one other criminal who had similar experiences. Nearly 80 percent of felons also claimed that they intentionally avoid victims and homes that they believe may be armed.

    This shows that at least one in three criminals has been deterred because of an armed citizen, and that four out five avoid victimizing people that have guns.

    Law-Abiding Gun Owners & Defensive Gun Use

    Advocates of civilian disarmament tend to scoff at the capabilities of everyday gun owners. Many believe that guns in the hands of normal people are crimes waiting to happen. However, thanks to the research of individuals such as John Lott, we now have evidence showing that gun owners are some of the most law-abiding segments of the American population.

    Lott drew the example of concealed license holders when compared to law enforcement:

    “Concealed-handgun permit holders are also much more law-abiding than the rest of the population. In fact, they are convicted at an even lower rate than police officers. According to a study in Police Quarterly, from 2005 to 2007, police committed 703 crimes annually on average. Of those, there were 113 firearms violations on average.

    With 683,396 full-time law enforcement employees nationwide in 2006, we can infer that there were about 102 crimes by police per 100,000 officers. Among the U.S. population as a whole, the crime rate was 37 times higher than the police crime rate over those years – 3,813 per 100,000 people.”

    Not only are gun owners very law-abiding, they are also quite capable of defending themselves against criminals. Criminologists Dr. Gary Kleck and Dr. Marc Gertz carried out a study that found 2.2 to 2.5 million cases of defensive gun use (DGU). Around 1.5 to 1.9 million of these cases involved handguns. There is reason to believe that DGU numbers completely overshadow the criminal use cases of guns.

    However, in today’s era of outrage politics, many incidents of DGU go under the radar because of their lack of shock appeal that does not make for good headlines.

    A Sense of Security

    Most people realize that law enforcement cannot be everywhere, yet so many rely on nothing but a 911 call to protect both their home and those inside it. For those who live in remote areas, it can take an hour or more for first responders to arrive after an emergency call, but in most cases, even five minutes is too long. But when a homeowner is armed and trained, the sense of security increases.

    Thanks to modern psychology, we know that people need this sense of security in order to grow and develop into healthy adults. Not surprisingly, privately owned guns provide that. Sixty-three percent of Americans now believe that having a gun in the house increases safety. While some may dismiss the importance of feeling secure and safe, or claim that another person’s desire for safety makes them feel unsafe, it is by far the most basic of human needs. And without it, people are left feeling frightened, angry, and defensive – often unable to reach, or even focus on, higher goals.

    Gun Ownership and Public Safety

    Concerning public safety, the media often portrays guns as the primary problem – stating things like, “Guns kill people” or “Guns are not the answer.” But gun control and restrictions are also not the answer. Whenever a community, city, state, or country has imposed a ban on guns, regardless if it was all guns or simply handguns, it has experienced an increase in murder rates. In 1997, Wales and England saw a nearly 50 percent increase in homicides immediately after implementing a ban on handguns.

    Gun control advocates promote the idea that more gun policies and regulations make Americans safer, but it’s naive to believe that any type of law will stop someone set on murder or other criminal activity. The individuals that engage in these types of criminal behaviors do not obey laws, and are therefore rarely impacted by policies and procedures. But these implemented gun control laws do impact the law-abiding citizens who are only trying to protect themselves and those they care about.

    The fact is, widespread gun ownership does reduce crime. Here are some of the ways:

    Home and Business Protection

    Every year, one million American home and business owners utilize a privately owned firearm to protect their property and lives. And when it comes to protection, resisting a crime with a gun is the safest route for victims. It’s associated with lower rates of both victim injury and crime completion than any other victim action.

    American criminals are also less likely to burglarize an occupied home due to fear of the homeowner being armed. In England, where only around four percent of the general population legally own a handgun due to heavy restrictions, 59 percent of homes are occupied when the burglar breaks in, compared to approximately 28 percent in the U.S. Even if the homeowner did own a gun, he or she would have to unlock it from its safe, then unlock another safe where the ammunition is kept, then load the weapon before self defense would be possible. In 2009, 13 years after the country’s handgun ban began, its handgun crime levels had nearly doubled.

    Public Shootings

    After personal and home protection, the biggest impact of gun ownership on American society is mass shootings. Since 1950, all but just over one percent of mass public shootings occurred in gun-free zones. That means perpetrators are likely to know they’re safe and could intentionally be choosing these places to act out their massacres.

    Also, immediately after right to carry concealed laws are put in place, the amount of mass public shootings fall dramatically. Not only does their frequency fall, but because people have the ability to carry firearms, they therefore can stop the perpetrator – limiting the impact of violence and destruction. Within the last two decades, this has happened numerous times across the country, including at a middle school dance in Edinboro, Pennsylvania and the Trolley Square Mall in Salt Lake City, Utah.

    What’s more, when police were interviewed regarding their position on gun control legislation, around 90 percent stated they believed that during an active shooter incident, having well-trained, armed citizens present would decrease the casualties. More than 28 percent agreed that more permissive carry concealed policies would be beneficial to the public, especially when it comes to large-scale public shootings.

    For the counter-argument that states an armed civilian is likely to increase the causalities of a mass shooter incident, there is a risk of this – just as there is an increased risk any time police are involved in a shoot-out. But remember, if there’s an armed shooter, things are already bad. And without interference, things are going to get worse. While the philosophy for protection during one of these situations is always run, hide, fight, if you’re fighting for your life, having a gun on your side is more beneficial than anything else.

    The Exponential Impact

    Because criminals fear citizens with firearms, gun ownership does have a dampening effect on crime. Not only is it a deterrent, but every time an intruder is shot, injured, or captured by a civilian, he or she is less likely to commit another crime.

    Consider this: In 1966, 2,500 women in Orlando, Florida, went through a specific, highly publicized handgun training. Without anything else happening, the prevalence of rapes fell substantially from almost 36 rapes per 100,000 women to four. Other crimes, such as home burglaries, also fell – demonstrating that the private ownership of guns does deter crimes.

    Protecting Constitutional Rights

    In 2014, America saw a switch in how people thought about gun control. For the first time since gun control became an issue, more Americans believed that protecting gun rights was more important than controlling gun ownership, 52 to 46 percent.

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    That’s important because according to the U.S. Constitution, the right to bear arms is an inalienable right and an inherent part of the right to life. Once this right is violated by either another individual or the state, the ability to protect oneself from danger and even tyranny is impeded on. And when that happens, the ability of private citizens to protect the Constitution and the rights it enshrines for all Americans is threatened.

    Having the ability to forcefully fight back against a tyrannical leader with guns – not just words – is what gave the colonists the ability to overthrow British control of the American colonies. Without guns, we would not have become the United States of America. The Founding Fathers understood this, and wanted to ensure that future generations of Americans could defend themselves against all threats both foreign and domestic.

    Restraining the Power of Government

    It may seem ridiculous to think that in today’s world, citizens could rise up against the government simply because of privately owned guns. Yet the argument stands that citizens having guns does restrain the power of government. History has shown that when gun restrictions and bans are implemented, it leads to tyranny.

    Here are a few examples:

    • 1911: In Turkey, the Ottoman Empire killed 1.5 million Armenians.

    • 1929: Soviet Union implemented gun control, and after 20 years, killed over 20 million dissidents.

    • 1935: After 17 years of gun control laws, 20 million dissidents were killed in China.

    • 1938: Nazi Germany enacted gun control laws for Jews and by 1945, had murdered 13 million Jewish people.

    • 1956: In just two years after gun control laws were enacted, one million people were killed in Cambodia.

    • 1964: In a nine-year span after gun control, Guatemala killed over 100,000 Mayan Indians.

    • 1970: In Uganda, 300,000 Christians were killed after gun control was implemented.

    • 1994: The government of Rwanda disarmed the Tutsi people, and executed almost one million of them.

    What has the 20th Century shown us about gun control? That an unarmed country is not a safe country. That when citizens don’t have the right to bear arms, governments can and do grow too large and become a threat to their people. That in the 20th Century, governments murdered four times as many people as those that were killed in all the world’s wars during that same time period. That millions more people were killed by their own governments than by criminals.

    Truth Behind the Anti-Gun Rhetoric

    Arguments in support of the anti-gun campaign can seem strong. After all, they talk about gun control saving the lives of children, stopping school shootings, and putting an end to terrorist attacks. But the fact is, this is just rhetoric and much of it is exaggerated and skewed.

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    Here’s the truth behind the most common anti-gun arguments, especially when it comes to individual and public safety.

    Suicide

    Yes, civilian-owned guns often play a role in suicides. And yes, gun control policies do seem to lower the prevalence of gun suicides. But gun control does not impact the number of people who commit suicide nor the total number that occur. Research shows that when guns are not available, those intent on hurting themselves find other, just as fatal ways to do it. More gun regulation does not lessen these numbers.

    43 to One

    A favorite statistic used by those in favor of gun control is that when a person has a gun in the home, he or she is 43 times more likely to shoot and kill a family member than an intruder. This statistic is based off of one study done in Seattle in 1986. Shooting of a family member included firearm murders, suicides, and fatal accidents and was compared to court-ruled justifiable homicides.

    Of these 43 deaths, most were suicides. As already discussed, gun restrictions do not impact the number of suicides. Eliminate these deaths from the numbers, and it drops to 2.39 deaths to one.

    Now, of those 2.39 family deaths, some are accidents and some are murders. Just like the absence of guns doesn’t reduce the risk of suicide, when someone is bent on murder, chances are he or she is going to follow through regardless if it’s with a firearm, a knife, poison, or other means.

    Lastly, these are deaths compared to deaths, and when discussing self defense and protecting both yourself and home, it often doesn’t lead to death. Wielding a firearm alone is enough to turn many criminals away. And many who use a firearm in self defense shoot to injure, not kill. The study also didn’t account for those cases when a homeowner was acquitted on grounds of self-defense. Therefore, this number represents the number of dead criminals, not those that were captured or deterred.

    So what does this mean for America? It means that guns and the law-abiding citizens who carry them make and keep it a safer country. It means when a criminal knows you’re carrying a firearm, you’re less likely to become a victim. It means that there are positive benefits of gun ownership for Americans and that gun legislation is not the best way to safer streets.

    *  *  *

    *If you know that someone in your home is severely depressed or having suicidal idealizations, access to firearms should be completely restricted. This is also true for knives, ropes, and all medications – including those that can be purchased over the counter. Seek medical assistance as soon as possible.


    Tyler Durden

    Tue, 02/25/2020 – 00:10

  • Meet Naomi Seibt – The 19-Year-Old, Blond Antidote To Greta Thunberg
    Meet Naomi Seibt – The 19-Year-Old, Blond Antidote To Greta Thunberg

    In what is a somewhat shocking lead article, the Washington Post has written a feature on Naomi Seibt, a German climate skeptic and YouTuber that WaPo describes as “…19-year-old German who, like Greta, is blond, eloquent and European.”

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    WaPo introduces the teen:

    Naomi denounces “climate alarmism,” calls climate consciousness “a despicably anti-human ideology,” and has even deployed Greta’s now famous “How dare you?” line to take on the mainstream German media.

    Of course, there is a reason why WaPo decided to show Naomi to the world… to set the narrative – that she is a climate-denying, right-wing racist…

    In addition to climate change, Naomi echoes far-right skepticism about feminism and immigration.

    The German media have described her as sympathetic to the nationalist Alternative for Germany (AfD), the biggest opposition party in parliament, whose leaders have spoken of fighting “an invasion of foreigners.”

    Naomi says she is not a member of AfD – she describes herself as libertarian – but acknowledges speaking at a recent AfD event.

    Seibt was interviewed by Sky News Australia last week to discuss her story.

    “What the climate skeptics, or climate realists say, makes a lot of sense to me, scientifically,” Seibt said in the interview.

    “And that’s how I became really passionate about the topic.”

    “I think this entire climate mainstream narrative is not about science at all. Because I would say that more than 90% of the people, especially the young people, who go to those Fridays for Future protests, they have no clue what they’re actually talking about. They don’t know anything about the science behind it. All they know is, this is the mainstream, and they are actually scared many of them I think that the planet is going to end like 12 years from now. And so, this is not about science. This is about politics. This is about controlling us.”

    As WaPo reports, Naomi said her political activism was sparked a few years ago when she began asking questions in school about Germany’s liberal immigration policies. She said the backlash from teachers and other students hardened her skepticism about mainstream German thinking. More recently, she said that watching young people joining weekly “Fridays For Future” protests inspired by Greta helped spur her opposition to climate change activism.

    “I get chills when I see those young people, especially at Fridays for Future. They are screaming and shouting and they’re generally terrified,” she said in an interview.

    “They don’t want the world to end.”

    Later this week, Naomi is set to make her American debut at the Conservative Political Action Conference, or CPAC, a high-profile annual gathering just outside Washington of right-leaning activists.

    “She’s a fantastic voice for free markets and for climate realism,” James Taylor, director of the Arthur B Robinson Centre for Climate and Environmental Policy at The Heartland Institute, told The Washington Post. 


    Tyler Durden

    Mon, 02/24/2020 – 23:50

  • How To Know If America Is Your Enemy
    How To Know If America Is Your Enemy

    Authored by Eric Zuesse via The Strategic Culture Foundation,

    If your country is friendly toward Russia, China, or Iran, then today’s American Government is probably applying subversion, economic sanctions, or maybe even planning a coup, or (if none of those will succeed) probably is war-gaming now for a possible military invasion and permanent military occupation, of your country.

    These things have been done to Russia, Iran, China, Yugoslavia, Venezuela, Bolivia, Ecuador, Cuba, Ukraine, Georgia, Indonesia, Vietnam, Iraq, Libya, Syria, Lebanon, Yemen, and some other countries.

    However, after the 9/11 attacks in America, the U.S. Government has added another system for selecting countries to immiserate, and those are mainly the countries that already suffer the most misery – some of them are countries that were listed above, but others (many others) are not, and are selected instead largely because they are already in misery, and also because America – that is, the Deep State which controls it, America’s hundreds of billionaires, who control international corporations and the press in America, and not just control the politicians who win public offices – wants to control the given target country in order to extract its natural resources or simply in order to place some of U.S. military bases there so as to be better able to invade other countries.

    This relatively new category of America’s targeted enemies was invented, mainly, in 2003 and 2004, by Thomas P. M. Barnett, a Professor at the U.S. Naval College and columnist and writer for various popular magazines, as well as of best-selling books. His 2004 book The Pentagon’s New Map, presents that map, to show the areas, mainly around the Equator and including all of Central America; plus all of South America except Chile, Argentina, and Brazil; plus all of Africa except South Africa, all countries of which are supposedly not connected to globalization — i.e., they are Third World instead of First World — and he says that they are unstable and therefore need to be policed by the world’s policeman, which is the U.S. Government, to serve there as the judge, jury, and executioner, of anyone who lives there and who resists that judge, jury, and executioner. His key statement is on page 227,

    “A country’s potential to warrant a U.S. military response is inversely related to its globalization connectivity.”

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    Here is the map, which shows which countries are supposedly high globalization connectivity and therefore inappropriate for America to sanction, coup, or invade and occupy; and which countries are supposedly low globalization connectivity and therefore appropriate for America to sanction, coup, or invade and occupy:

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    http://archive.is/2Pjqp

    As can be seen there, the following countries are not to be policed by the U.S. Government: Canada, U.S., Mexico, Chile, Argentina, Brazil, UK, Greenland, Iceland, EU, Switzerland, Ukraine, Georgia, South Africa, Russia, Mongolia, China, India, Japan, South Korea, Australia, N.Z.

    He calls those the “Globalized Functioning Core.”

    All others are “the Non-Integrated Gap” countries, America’s virtual free-fire zones, to control so as to ‘prevent terrorism’.

    Instead of international law being what the United Nations says it is, this “new map” theory says that international law in the “Non-Integrated Gap” countries should be what the U.S. Government says it is.

    According to Barnett’s theory, as he expressed it in its original version in an Esquire magazine article titled “Why the Pentagon Changes Its Maps: And why we’ll keep going to war,” he listed these countries as “THE GAP” or third-world countries, “My list of real trouble for the world in the 1990s, today, and tomorrow, starting in our own backyard” (and these are listed here by the names that he gave to them): Haiti, Colombia, Brazil and Argentina, Former Yugoslavia, Congo and Rwanda/Burundi, Angola, South Africa, Israel-Palestine, Saudi Arabia, Iraq, Somalia, Iran, Afghanistan, Pakistan, North Korea, Indonesia. Then he listed “CORE MEMBERS I WORRY WE MAY LOSE:” China, Russia, India.

    So, if you live in any of those countries, then Barnett, and the many U.S. generals who respect his theory, and the U.S. billionaires, who want the resources in those countries or else just want military bases there, view you as an enemy, not as a citizen of a sovereign foreign country. His Esquire article says, “it is always possible to fall off this bandwagon called globalization. And when you do, bloodshed will follow. If you are lucky, so will American troops.” He assumes that you need a “policeman” from America because what your own country provides is too primitive. And, “Conversely, if a country is largely functioning within globalization, we tend not to have to send our forces there to restore order or eradicate threats.”

    On 22 August 2017, Thierry Meyssan at Voltairenet headlined “The US military project for the world” and gave his progressive critical interpretation of Barnett’s theory by placing it into the long-term evolution of U.S. geostrategy. On 26 September 2004, Razib Khan gave his admiring racist-fascist or ideologically nazi interpretation of it, under the headline “IQ And The Non-Integrating Gap”. He assumed there that lower-income countries are “lower IQ” and therefore need to be directed according to the master’s whip, not as sovereign countries.

    The book’s publisher places online an informative excerpt from the work. under the headline “An Operating Theory of the World” and Barnett says there:

    As the “vision guy,” my job was to generate and deliver a compelling brief that would mobilize the Defense Department toward generating the future fighting force demanded by the post-9/11 strategic environment. Over the next two years I gave that brief well over a hundred times to several thousand Defense Department officials. Through this intense give-and-take, my material grew far beyond my original inputs to include the insider logic driving all of the major policy decisions promulgated by the department’s senior leadership. Over time, senior military officials began citing the brief as a Rosetta stone for the Bush Administration’s new national security strategy.

    The strategy remains in force, though there now is a return to focusing on the main enemies being Russia, China, and Iran. The “gap” countries are currently viewed not only according to the “gap” but also according to their relationships to Russia, China, and Iran.


    Tyler Durden

    Mon, 02/24/2020 – 23:30

  • Uncertainty Surrounds Fate Of 2020 Tokyo Games As Covid-19 Outbreak Broadens
    Uncertainty Surrounds Fate Of 2020 Tokyo Games As Covid-19 Outbreak Broadens

    The 2020 Tokyo Summer Olympics are scheduled to begin on July 24, and with about five months to go before the games start, the Covid-19 outbreak continues to worsen, with rising risks the Olympics could be delayed or canceled, reported The Times.

    As of February 24, the deadly virus has infected more than 79,524, killed 2,626 and prompted more than 50 countries and territories to close their borders with China. The virus has spread uncontrollably in South Korea, Japan, and now in Europe, with cases, ex-China increasing.

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    Japan has the second-highest confirmed cases, with a total of 838 cases including four deaths, most of them are from a cruise ship docked in Yokohama, Japan.

    Japanese public broadcaster NHK reported that Tokyo Olympic organizing committee CEO Toshiro Muto recently said he was “extremely worried that the spread of the infectious disease could throw cold water on the momentum toward the Games.”

    Tokyo 2020 President Yoshiro Mori said last week, “we are not considering a cancelation or postponement of the Games—let me make that clear.”

    However, Dr. Hitoshi Oshitani, a professor of virology at Tohoku University Graduate School of Medicine in Sendai, warned that the Olympics couldn’t take place tomorrow, considering the outbreak situation continues to worsen. 

    “I’m not sure of the situation at the end of July,” Oshitani said. He said it would be “difficult to have the Olympics (now).” 

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    With an expanding list of Tokyo events being postponed ahead of the Olympics, it suggests some form of disruption could be seen in the months ahead.

    Unpaid volunteer training for the event has been delayed until May or even weeks before the event. Organizers acknowledge the games cannot operate without these volunteers.

    The Tokyo Marathon on March 1 will exclude hundreds of elite runners for fear they may contract the deadly airborne virus.

    Some Olympic qualifying events outside of Tokyo have been shifted to different regions or postponed until further notice.

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    On Monday, the first board meeting for the Milan-Cortina 2026 Olympics committee opted for a video conference call after an outbreak of the virus prompted several towns in northern Italy to close.

    Some sporting events in Italy are being held behind closed doors: “Playing all sports behind closed doors for the next week could be possible, because then fans can more easily stay at home,” said Maurizio Casasco, the president of the Italian federation for sports physicians

    This could suggest as the crisis spreads across the world, the 2020 Olympic games might not be canceled, delayed, or relocated this summer, but rather a closed event that will be televised.

    Since 1896, the Olympics have only been canceled during wartime. And in 1976, 1980 and 1984 faced boycotts.

    The longer the outbreak continues, the more uncertainty it could create for Olympic organizers.

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    But there’s good news for Prime Minister Shinzo Abe, if whatever reason the event is canceled or at least closed off to the public, his administration can blame the collapsing economy on the virus.


    Tyler Durden

    Mon, 02/24/2020 – 23:10

  • Sabotaging Kabul's Multipolar Revolution With China And Russia
    Sabotaging Kabul’s Multipolar Revolution With China And Russia

    Authored by Federico Pieraccini via The Strategic Culture Foundation,

    Nineteen years after September 11, 2001 and 17 years after launching its war against the Taliban in Afghanistan, the U.S. seems ready to cut a deal with the Taliban in order to freeze out its Eurasian rivals.

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    The central government in Kabul has in recent years granted a leading role to Moscow and Beijing in efforts to pacify the country by bringing all parties to the negotiating table. A successful outcome would allow Afghanistan to reap the benefits of its geographical position vis-a-vis Sino-Russian infrastructure projects.

    The entry into Afghanistan’s dynamics of China’s economic power and Russia’s military weight promises to spark a multipolar revolution in the country and beyond that would spread to neighbors like India, Pakistan and Iran.

    Moscow had even initiated historical negotiations with Taliban representatives, culminating in a visit to Moscow. U.S. sources at the time voiced doubts about the success of any peace plan and tensions between the U.S. and Iran were high, with sanctions imposed on Iran and pressure placed on U.S. allies in the region like India to boycott Iranian oil.

    Moscow and Beijing must have seen it as opportune to renew extended talks on Afghanistan that included regional countries but excluded the U.S.

    Washington’s countermove took place shortly thereafter, calling into service the Taliban, an old geopolitical tool of theirs. This faction of Afghan politics served as a handy expedient to justify Washington’s initial invasion of Afghanistan and will now be employed to obviate Washington’s exclusion from any peace accords.

    The CIA wielded the Taliban as a weapon against the USSR, arming and supporting it since the 1980s. The blowback from this strategy came 20 years later with the terrorist attacks of September 11, 2001 that was carried out by al Qaeda with the Taliban regime in Afghanistan giving them aid and comfort, or so the State Department has officially been telling us.

    As geopolitics never gets boring, Washington will now, 20 years after entering the country, try and use an agreement with the Taliban to scupper the regional plans of Kabul, Moscow and Beijing as well as to justify its continued existence in the country.

    The Taliban (influenced by the Muslim Brotherhood, whose military strength lies in Turkey and economic strength in Qatar) entering into negotiations with the U.S. means betraying its initial determination to remove any foreign presence in Afghanistan. But this has not stopped it from unofficially negotiating with Washington in Qatar for more than a year.

    Washington’s primary goal is to remain in the country militarily in order to position itself in what is a geopolitically strategic location, the intention always being to slow down the integration and economic union of Eurasia, in the knowledge that Afghanistan is a central pivot both for China’s Belt and Road Initiative and Russia’s North-South corridor to connect Moscow and New Delhi. Afghanistan is also the gateway and intersection between North Africa, the Middle East, the Persian Gulf and South Asia.

    It is therefore not surprising that Afghanistan is a country that attracts great-power competition involving the likes of the U.S., Russia, India and China.

    Washington’s deal with the Taliban may be based on the avowed need to fight against the terrorist threat posed by ISIS. We must pause for a moment to point out that the presence of ISIS in Afghanistan is quite recent, leading to all sorts of questions as to how they came to be there in the first place and of what assistance they may have received from foreign intelligence agencies in getting there. ISIS in Iraq and Syria has been used by foreign powers opposed to the central government in Damascus as a bludgeon with which to devastate the country.

    It seems the same modus operandi will be applied to Afghanistan, with the putative struggle between ISIS and the Taliban serving as the perfect blessing for this strange marriage of convenience between the U.S. and the Taliban and a justification for a continued presence by the U.S. in Afghanistan.

    Washington’s continued presence will not only destabilize Afghanistan but also neighboring countries like Pakistan and India that have suffered from the consequences of U.S. military occupation in the region for 17 years.

    Washington’s agreement with the Taliban will only further cement the role of the U.S. in the valiant fight against international terrorism, reflecting similar roles played by Saudi Arabia and Turkey in Yemen and Syria respectively, the former a U.S. ally and the latter a prominent NATO member.

    The aim of China, Russia and Iran is to drive the U.S. out of the Middle East and Eurasia and thereby bring about peace, stability and prosperity to the region. Afghanistan and Iran are two countries critical in the expansion of the Belt and Road Initiative and all that it entails for Western Asia. The possibility of expelling Washington from the heart of Eurasia is an opportunity that Russia and China cannot afford to waste.


    Tyler Durden

    Mon, 02/24/2020 – 22:50

  • Turmoil In Malaysia After Prime Minister Mahathir's Shock Resignation
    Turmoil In Malaysia After Prime Minister Mahathir’s Shock Resignation

    It’s being described a shock resignation by the world’s oldest elected leader. The 94-year old Prime Minister of Malaysia, Mahathir Mohamad, who returned to power in 2018, announced his resignation on Monday in a mere two-line statement offering no details.

    He was asked to stay on as interim leader by the country’s king upon his resignation at 1pm local time. It follows a weekend of political turmoil, which will now continue this week as the question of a new government remains hanging in the balance. As Al Jazeera reports: 

    Mahathir’s decision follows a weekend of political wrangling, after it was reported on Sunday night that his party was planning to form a new government that would exclude his anointed successor, Anwar Ibrahim.

    …Anwar also said that Mahathir has no plans to join with anyone from the previous ruling coalition he defeated to try to form a new government.

    When asked if Mahathir was responsible for the current political turmoil, Anwar blamed “those within my party and outside using his name.”

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    Malaysia’s Prime Minister Mahathir Mohamad has submitted his resignation to the king, via Bangkok Post.

    The crisis was sparked reportedly upon Mahathir’s supporters within his own “Pact of Hope” coalition attempting to form a new coalition allegedly aimed to prevent the appointment of his agreed successor, Anwar Ibrahim.

    Anwar and Mahathir had in 2018 joined forces despite their rocky political relations to defeat a notoriously corruption-plagued government in the polls.

    For the time being it’s expected that Malaysia’s constitutional monarch will play a key role, with options to invite a leader to form a new administration, or alternately call for a fresh general election.

    There’s rumors that Mahathir himself may be behind the drive to form a new coalition in order to later more firmly solidify his power. 

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    Anwar and Mahathir, via CNN

    The immediate effect of the surprise resignation was felt by the country’s stock markets, which plunged on the news. 

    Meanwhile, director of the Asia Institute Tasmania at the University of Tasmania Prof James Chin, told The Guardian of future prospects for the country’s politics: “The possible outcome is that you have a much stronger Malay-centric government with a much more Islamic outlook. This is very bad news for non-Malays – the Chinese and Indian communities in Malaysia make up more than 30% of the population.”


    Tyler Durden

    Mon, 02/24/2020 – 22:30

  • Shocking State Media Report Exposes Widespread Undercounting Of Coronavirus Deaths In Wuhan's Nursing Homes
    Shocking State Media Report Exposes Widespread Undercounting Of Coronavirus Deaths In Wuhan’s Nursing Homes

    Despite the WHO’s refusal to even consider the question during its press conference on Monday, evidence continues to mount that officials in Beijing and Hubei are seriously massaging the stats to conform to Beijing’s narrative that the outbreak is under control, and is finally starting to recede.

    Yesterday, we shared the story of a doctor in Hunan who said out of 50 deaths at his hospital that day, authorities only counted one in the official stats.

    Then in the early hours of Tuesday morning, state-controlled business publication Caixin published a shocking scoop that exposed officials’ undercounting, and also suggested that the exaggerations are about as bad as critics feared.

    It’s hard to image that this wasn’t a deliberate act of defiance by a journalist who was finally fed up with official lies. The death of Dr. Li Wenliang earlier this month inspired a nascent free-speech movement that just might outlast the outbreak, unless authorities move to brutally crush it.

    The reporters claim that a pattern of discrepancies that has emerged in the official statistics surrounding cases tied to nursing homes and other facilities specializing in elder care. The elderly are, of course, one of several vulnerable populations singled out by the WHO and the governor of Hubei for special care.

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    But after it came to light late last week that Chinese authorities missed 500 cases in several prisons in and outside of Hubei, journalists and local officials got curious to see what else was being overlooked.

    One nursing home situated just blocks from the seafood market where the outbreak allegedly began reported 19 deaths recently all of which are believed to have been caused by the virus. However, a doctor told the paper that only one death was counted in the official statistics.

    Unexplained deaths from lung ailments among the elderly at the Wuhan Social Welfare Institute and similar facilities suggest that nursing homes may be another blind spot as the government’s epidemic-fighting efforts have focused on hospitals and other communities. Last week it came to light that Chinese prisons reported more than 500 previously uncounted Covid-19 cases among guards and inmates.

    The situation was complicated by the quarantine, which cut off many family members from their loved ones. Once elderly patients were moved into quarantines, it only became more difficult to track them.

    After Wuhan tightened quarantine measures to restrict people from leaving their homes and to send the sick into makeshift quarantine quarters, many people lost contact with elderly family members in nursing homes. Family members of people in nursing homes say they have been trying to find out how many residents may be infected, where the elderly are quarantined, whether there are caregivers, what test results show and whether the government can send more medical and care staff to institutions.

    Given all the staff shortages, and the staggering number of health-care professionals who caught the virus, family members accused the state of failing to provide sufficient protections for elderly family members who died of the virus.

    Some family members of deceased seniors told Caixin that the nursing home didn’t take sufficient protective measures and residents were not even asked to wear masks.

    The doctor at the infirmary said the nursing home wasn’t sealed off until Jan. 21, when the outbreak was already spreading quickly in the city. Because it was close to the Lunar New Year, there were many visitors at the nursing home every day. It hasn’t been ruled out that visiting family members might have brought the virus into the nursing home, the doctor said.

    A medical worker at the nursing home said it’s also difficult to implement quarantine measures because of staff shortages and residents with dementia.

    Apparently, Caixin managed to obtain official documents proving the discrepancy: A register of the deceased from the nursing home where they lived showed 15 deaths between Dec. 23 and Feb. 15, and four more on Feb. 18 for a total of 19.

    But only one death, that of an 83-year-old male who had lived at the facility, was recorded in the official stats. The others were assigned ambiguous causes of death, like “pneumonia”, a strategy that we’ve reported on previously.

    A list of the dead at the social welfare facility obtained by Caixin showed 15 fatalities between Dec. 23 and Feb. 11 and four more Feb. 18. Of the total of 19 fatalities, only the death of an 83-year-old male Feb. 15 was clearly linked to Covid-19. Eight others were attributed to infections, including six to lung infections and two deaths from shock caused by infection. The remaining 10 fatalities were reportedly from other causes, and five of them took place before Feb. 11 when the nursing home started testing for Covid-19.

    The nursing home never before had so many deaths in such a short time, according to a staff member who has worked there many years. Except for one 27-year-old female with cholecystitis, all of the 18 others on the fatalities list were in their 80s and 90s and most had diabetes, high blood pressure, stroke or disabilities, according to the list.

    It’s also notable that the facility is just a few hundred yards from the seamarket alleged to be ‘ground zero’ for the outbreak.

    The facility, just a few hundred yards from the seafood market that may have been the starting point of the outbreak, is a combination senior hospital and nursing home. It is home to 458 senior residents with 190 staff, 21 property management personnel and eight care workers. The facility has been sealed off since Jan. 21 as local authorities stepped up efforts to contain the outbreak. All staff have been asked to stay in the facility.

    One doctor who purportedly worked at the facility said he treated a man with a high fever who eventually died of “septic shock” back in December. But given the time that has passed, there would be no way to prove the virus was the cause.

    A doctor in the welfare facility’s infirmary said he participated in the treatment of a patient in late December who had a fever as high as 107.6 degrees Fahrenheit (42 degrees Celsius). The patient died from septic shock possibly caused by infection, but the cause of infection was unknown because no virus check was done, according to the doctor, who was later confirmed infected with Covid-19 himself.

    But even without the tests, the symptoms combined with the sharp increase in deaths suggests that dozens are going undercounted in Wuhan’s nursing homes.

    The doctor said he treated three seniors who died since late December. Several doctors, nurses and attendants have also shown symptoms of lung infection, the doctor said.

    A care worker said more than 10 seniors died during the Lunar New Year holiday. At first, they had fever and lost appetite. Those with recurrent fevers were transferred to quarantine rooms but died after a couple of days, the worker said.

    “Since they were never confirmed with tests, we don’t know whether they died from the virus,” the worker said. “But before the outbreak, even though many of the seniors at the nursing home have chronic diseases, we have never seen so many deaths in such a short time.”

    And if they’re being undercounted in Wuhan, which reportedly had relatively lax controls on who could visit these ‘vulnerable’ facilities, that means they’re likely undercounting deaths in hot-spot nursing homes across the country.


    Tyler Durden

    Mon, 02/24/2020 – 22:10

  • Did ISS Live-Feed Accidentally Capture "Top Secret" Hypersonic Vehicle Test?
    Did ISS Live-Feed Accidentally Capture “Top Secret” Hypersonic Vehicle Test?

    Scott C. Waring, the founder of UFO Sightings Daily, claims he has come across a strange video recorded from the International Space Station’s (ISS) NASA Space Cam that shows the moment an unidentified flying object rockets into orbit.  

     “I was watching the NASA live space station cam when I noticed the camera zooming in on a strange object coming from below the space station. At first I thought it was a capsule or satellite, but its speed increased and after 22 minutes it shot up and into deep space. I believed if it was a capsule it would have gone into low earth orbit then lower to land. But when this object shot upward into deep space, it literally blew my mind. This could be USAF top-secret alien tech fused craft, but I don’t think so, the person on the camera seemed dismayed and unprepared for its sudden appearance,” Waring said in a blog post. 

    Waring operates the YouTube channel ET Data Base and judging by his past videos and commentaries – he’s a tinfoil hat conspiracy theorist. 

    He told tabloid newspaper Daily Express, that at one point, the NASA live camera suddenly “notices something down there and begins to zoom in on it.”

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    Waring said NASA was the one zooming in on the object in the video, “not me.” 

    He said the ISS crew is as “baffled by it as I am. They don’t know what it is or why it is there.” 

    “It doesn’t like any kind of object I have seen before. If it is military, then it is a top-secret US air force technology,” he said. 

    One video commenter said, “Reminds me of the Defense Advanced Research Projects Agency’s (DARPA) Falcon Hypersonic Technology Vehicle 2 (HTV-2). Capable of Mach 20 (13,000 miles/hr). What fascinates me in this video, though, is that it travels upwards away from Earth’s orbit! Amazing video.”

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    While the authenticity of the video remains of a question, the probabilities of an alien spaceship are slim to none, but instead could be a top-secret DARPA hypersonic vehicle.

    As we’ve explained on several occasions, DARPA is actively testing these vehicles that can fly between Mach 5 (3,836 mph) and Mach 10 (7,672 mph).


    Tyler Durden

    Mon, 02/24/2020 – 21:50

  • Manhattan DA Who Declined To Prosecute Weinstein Years Ago Celebrates Demise Of "Vicious Sexual Predator"
    Manhattan DA Who Declined To Prosecute Weinstein Years Ago Celebrates Demise Of “Vicious Sexual Predator”

    Authored by Matt Nathan via LawAndCrime.com,

    Manhattan District Attorney Cyrus Vance, a Democrat who has been in office for more than a decade now, briefly addressed the media after prosecutors secured a conviction against prominent Democratic Party donor and Hollywood bigwig Harvey Weinstein on counts of rape and criminal sexual act.

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    Vance credited eight women–victims and prosecutors–for “pull[ing] our justice system into the 21st Century by declaring that rape is rape, and sexual assault is sexual assault no matter what,” and no matter who committed the crimes.

    “This is the new landscape for survivors of sexual assault in America, I believe, and this is a new day,” he said. “It’s a new day because Harvey Weinstein has finally been held accountable for crimes he committed.” Vance said their bravery proved that rape is rape “even if there is no physical evidence.”

    You know who had an opportunity to hold “vicious sexual predator” Weinstein–and others–accountable years ago but didn’t? 

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    Cy Vance.

    Remember this from 2017 about something that didn’t happen in 2015?

    Just months after the Manhattan District Attorney’s office declined to prosecute Weinstein over sexual assault allegations, the Hollywood producer’s lawyer, Daid Boies, donated $10,000 to Vance’s re-election campaign.

    First broken by journalists David Sirota and Jay Cassano, here’s a condensed version of that story: In April, 2015, Italian model Ambra Battilana Gutierrez accused Weinstein of groping her breasts and shoving his hands up her skirt. She contacted the NYPD and wanted to press charges. There was no lack of evidence in this case either. An audio recording made at the NYPD’s request–and available to Vance’s office–reveals that Weinstein admitted the initial unwanted contact and that he had a sordid history of making such contact.

    Many people clearly did remember this.

    Numerous articles were written after news about this got out, and other high-profile sexual assault cases Vance oversaw (and dismissed) started receiving additional scrutiny. As memorialized by the New Yorker:

    Vance’s stomach for high-profile prosecution was tested early on, in the 2011 sexual-assault case against the French politician Dominique Strauss-Kahn, who, before his arrest, was the head of the International Monetary Fund. A maid who was cleaning the Sofitel New York hotel suite where Strauss-Kahn was staying reported to police that he had emerged naked from the bathroom and forced her to perform oral sex. The D.A.’s office indicted Strauss-Kahn and trumpeted the strength of the case. But the office later disclosed credibility problems with the complaining witness. Vance reversed course and decided to dismiss all criminal charges, announcing that his office was “unable to credit her version of events beyond a reasonable doubt, what ever the truth may be about the encounter.”

    The last line of the blockquote above illustrates what Vance was referring to when he mentioned a “new landscape” in light of #MeToo.

    But the questions about Vance and his office’s decision-making when it comes to rich and powerful men accused of sex crimes do not end here. As recently as January, several survivors demanded his resignation when highlighting a sweetheart deal gifted to Columbia University gynecologist Dr. Robert Hadden.

    The disgraced OB/GYN was accused of sexually assaulting no less than 19 of his former patients—including Evelyn Yang, wife of 2020 Democratic Party presidential candidate and entrepreneur Andrew Yang.

    “Most women don’t know what you’re supposed to get when you’re pregnant,” Yang recently said in an interview—adding that she was initially unsure about what happened and that she only decided to open up about Hadden after other survivors came forward.

    “I feel like I put up with some inappropriate behavior that I didn’t know at the time was straight-up sexual abuse slash sexual assault until much later,” Yang continued, saying those doubts eventually dissipated. “I knew it was wrong. I knew I was being assaulted.”

    One of those additional survivors is Marissa Hoechstetter, who led the protest against Vance. Hoechstetter was the first woman to come forward about Hadden’s abuse. She claims he conducted unwarranted breast exams, made lewd comments about her looks and licked her vagina during a postpartum examination several years ago. Several additional woman have since come forward to register similar accusations.

    Hadden eventually pleaded out on various charges. There was no jail time, but Hadden was forced to give up his medical license. Vance also argued against placing Hadden on a sex offender registry.

    “For 10 years, Vance has repeatedly favored the wealthy and connected over justice for victims of sexual assault,” Hoechstetter said, noting that Hadden was actually first arrested in 2012 for licking another woman.

    But Vance’s office cut him loose. Hadden went on to abuse more women after that brief encounter with Manhattan justice.

    “Vance allowed that to happen,” Hoechstetter said. “It’s on him, and he must resign immediately.”

    The very same Manhattan District Attorney office run by Vance, it cannot be forgotten, once shocked a judge by requesting that the infamous dead pedophile Jeffrey Epstein’s sex offender status be lowered to the lowest possible ranking.

    Back in 2011, Assistant Manhattan DA Jennifer Gaffney argued in court that Esptein’s sex offender status should be lowered from level 3 to level 1. If this was granted, Esptein would have been kept off the online sex offender database. This was after Epstein pleaded guilty to state charges of soliciting prostitution from a minor as part of a secretive, sweetheart plea deal that continues to garner intense scrutiny to this day. In reality, Esptein was accused of sexually abusing dozens of underage girls and ended up dodging federal charges. That changed in July 2019 Esptein was arrested for sex trafficking and conspiracy to commit sex trafficking. Epstein died the following month before he could stand trial.

    Per the New York Post on the judge’s response to an argument in favor of Epstein:

    “I have never seen the prosecutor’s office do anything like this,” Manhattan Supreme Court Justice Ruth Pickholz told Gaffney. “I have done many [cases] much less troubling than this one where [prosecutors] would never make a downward argument like this.”

    Pressed by the judge, Gaffney admitted that she never spoke to the Florida U.S. Attorney who handled a sprawling sex-crime investigation into the financier.

    “I don’t think you did much of an investigation here,” Pickholz said. “I am shocked.”

    Vance later admitted a mistake was made. Victims have said otherwise.

    It was also alleged that the Manhattan DA’s office was aware that Epstein was allowed to skip mandatory check-ins for sex offenders of his status–meaning Epstein was allowed to do something that others would be imprisoned for.

    “Our office vigorously prosecutes all failure-to-verify cases,” a Vance spokesman said at the time. “Our prosecutors did not and would not discourage the NYPD from making an arrest.”


    Tyler Durden

    Mon, 02/24/2020 – 21:30

  • Disruption Escalates: Proctor And Gamble Says Over 17,000 Products Potentially Impacted By Coronavirus
    Disruption Escalates: Proctor And Gamble Says Over 17,000 Products Potentially Impacted By Coronavirus

    While mom and dad on Main St. still aren’t getting the dire warning that the coronavirus has been offering up to Asia and the rest of the Eastern world over the last several weeks, perhaps a lightbulb will finally go off when Jane Q. Public heads to the grocery store and is unable to buy shampoo and toothpaste.  

    Proctor and Gamble, one of the world’s biggest “everyday product” manufacturers, has now officially warned that 17,600 of its products could be affected and disrupted by the coronavirus. The company’s CFO, Jon Moeller, said at a recent conference that P&G used 387 suppliers across China, shipping more than 9,000 materials, according to CIPS.org.

    Moeller said: “Each of these suppliers faces their own challenges in resuming operations.”

    And it’s not just everyday consumer goods that are going to feel the impact of the virus. 

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    Smartphones and cars are so far among the consumer products that have been hardest hit from the virus. In fact, according to TrendForce, “forecasts for product shipments from China for the first quarter of 2020 had been slashed, by 16% for smartwatches (to 12.1m units), 12.3% for notebooks (30.7m units) and 10.4% for smartphones (275m units). Cars have dropped 8.1% (19.3m units).”

    Their report states: “The outbreak has made a relatively high impact on the smartphone industry because the smartphone supply chain is highly labor-intensive. Although automakers can compensate for material shortage through overseas factories, the process of capacity expansion and shipping of goods is still expected to create gaps in the overall manufacturing process.”

    A separate coronavirus analysis by Mintec says that “Chinese demand for copper (it has hitherto been responsible for consuming half the world’s output), will fall by 500,000 tonnes this year, and falls in demand have already impacted prices. From December to January the price of copper fell 9.6%.”

    The report notes: “Millions of people have been affected by the travel lockdown in Hubei province, the centre of the outbreak. This has been responsible for a glut of jet fuel and diesel on global markets at a time when petroleum supplies were already abundant.” 

    Other products that have been negatively affected so far include pork, which is up 11% this month, chicken, garlic and dried ginger. 

    Product supply chain issues could eventually compound hysteria at supermarkets if coronavirus becomes widespread in western countries. Northern Italy, which has seen a small outbreak of coronavirus cases over the last 48 hours, is already experiencing long lines and sold out store shelves. 


    Tyler Durden

    Mon, 02/24/2020 – 21:10

  • It Begins: Chinese Business Conditions Crash Most On Record
    It Begins: Chinese Business Conditions Crash Most On Record

    For the past two weeks, even as the market took delight in China’s doctored and fabricated numbers showing the coronavirus spread was “slowing”, we warned again and again that not only was this not the case (which was confirmed by the latest data out of South Korea, Japan and now Italy), but that for all its assertions to the contrary, China’s workers simply refused to go back to work (even with FoxConn offering its workers extra bonuses just to return to the factory) and as a result the domestic economy had ground to a halt, something we described previously in:

    Unfortunately, one month after the start of the Lunar New Year it’s not getting any better, as the latest high frequency updates out of China, courtesy of Goldman Sachs, demonstrate.

    First, here is China’s daily coal consumption which have barely pushed off the lows, and are roughly 50% where they were a year ago this time.

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    With coal demand in the doldrums, it is also to be expected that coal supply is depressed as well, and indeed coal volumes over the past week remain 25% lower than the past 3 years’ average, and roughly 33% below the 2019 level.

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    One of the better indicators of real-time commerce, traffic congestion, remains virtually unchanged, and substantially below where it was in previous years.

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    Yet, hilariously, this being China even with no transport, no commerce, and virtually no power plant use, pollution is finally starting to ramp up. One wonders what is causing this if it’s not coal demand, or transportation: maybe all those crematoriums working overtime?

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    And speaking of not transport, the number of passengers carried after the New Year is barely above 10 million, almost 50 million below last year’s levels.

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    Meanwhile, a brief silver lining in the economy was promptly snuffed out last week, when the property sales volume in 30 major cities crashed back to earth and remains well below 25% of the seasonal norm.

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    And with no end market demand, it is hardly a surprise that steel demand has continued to crater, and was below half the normal level from the past 3 years.

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    Last but not least, and perhaps most ominous of all, the earlier semi-official data print in the form of the February survey on business conditions showed a depression level plunge, with the index crashing more than 18 points, the most on record, to 37.3, which confirms Nomura’s expectation of a manufacturing PMI print later this week which may have a 30-handle.

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    Tyler Durden

    Mon, 02/24/2020 – 20:50

  • More Turkish Troop Deaths In Idlib Bring Russia & Turkey To Breaking Point
    More Turkish Troop Deaths In Idlib Bring Russia & Turkey To Breaking Point

    After on Monday there were new unconfirmed reports of several Turkish Army soldiers killed or wounded in a Russian air strike on a Turkish convoy, already tense relations between Moscow and Ankara are at a breaking point. 

    “Several soldiers from the Turkish Army were reportedly killed or wounded this afternoon following the joint airstrikes launched by the Syrian and Russian air forces in the Idlib Governorate,” Beirut-based Al Masdar News reports. “According to pro-opposition media, as many as ten Turkish soldiers were killed or wounded as a result of the joint Russian-Syrian airstrikes near the town of Kansafra.”

    And British-Syrian journalist Danny Makki, who reports from inside Syria lists “10 Turkish casualties between killed and wounded in the Russian airstrikes today sources suggest, 4 armoured vehicles also purportedly destroyed.” However, there’s yet to be official confirmation out of Turkey of these new alleged casualties. Ankara did previously confirm at least one soldier killed in fighting on Sunday.

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    Turkish military post in Idlib, via Anadolu Agency.

    Turkey’s Defense Ministry has in total acknowledged 16 of its soldiers killed amid the renewed Syrian-Russian offensive to take back Idlib, which began early December. 

    These increasingly direct clashes between Syrian-Russian allied forces and Turkish national troops have led to renewed urgent talks announced Monday between Russian and Turkish officials.

    Russian FM Sergey Lavrov announced Monday that “Another series of consultations is now being prepared and we hope it will help us reach an agreement on how to ensure that this really becomes a de-escalation zone and terrorists don’t boss around there.” 

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    “I hope that the ongoing contacts between our military and the Turkish military, with the participation of diplomats and security services, will end positively, and we will be able to make sure that terrorists do not take over this part of Syria, as, in fact, they should not take over anywhere else,” Lavrov added.

    The Kremlin is further trying to downplay what Turkish officials are describing as a “crisis” — also given President Erdogan has lately vowed to not allow Idlib to be taken by pro-Assad forces. “Russian-Turkish relations should not be depicted as in crisis even after an escalation in political tensions over Syria’s last rebel-held enclave of Idlib, Presidential Spokesman Dmitry Peskov said on Sunday,” according to TASS news agency.

    “Certainly, we would not like to plunge into this gloomy mood and in fact to make extremely negative scenarios, but the week has really happened to be absolutely restless,” Peskov commented in a televised interview.

    Sixteen Turkish military personnel have been killed in shelling by Syrian government forces over the past two weeks, prompting Turkey to tell Russia to “stand aside” while its forces bombard dozens of Syrian army targets in retaliation.

    Moscow has warned Ankara to fulfil pledges made to disarm Islamist fighters it depicts as terrorists. The two sides held talks in the Russian capital last week to help diffuse tensions. — Ahval News

    Turkey has sent thousands of troops into Idlib while sealing off the border with the northwest province, also hoping to prevent some one million more refugees from flooding in, adding to already some three million plus refugees Turkey says it’s hosting. 


    Tyler Durden

    Mon, 02/24/2020 – 20:30

  • Most Americans Are Not Taking This Coronavirus Outbreak Seriously, And That Is Potentially Very Dangerous
    Most Americans Are Not Taking This Coronavirus Outbreak Seriously, And That Is Potentially Very Dangerous

    Authored by Michael Snyder via The Economic Collapse blog,

    We still don’t know if this coronavirus outbreak will become a horrific worldwide pandemic or not, but what we have seen so far is definitely very alarming.  People have literally been dropping dead in the streets, the Chinese government has locked down major city after major city, and the virus kept spreading very rapidly on a cruise ship off the coast of Japan even though a strict quarantine was instituted.  Scientists that have studied the virus are telling us that it “could be 20 times more lethal than the flu”, and it binds to human cell receptors much more easily than the SARS virus did.  Unfortunately, because the epicenter of this crisis is on the other side of the globe, most Americans are simply not paying much attention to it.  In fact, most of the people that my wife and I have been talking to and hearing from don’t think that the coronavirus is much of a threat to the United States at all.

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    And if the coronavirus does start to become a problem in this country, a new survey has found that most Americans are quite confident that the government can handle it…

    More than three in four Americans say they are very confident or somewhat confident in the US federal government’s ability to handle a coronavirus outbreak, a Gallup poll has found, a higher level of confidence than in previous health scares.

    Gallup said the results were from a February 3 to February 16 poll that began just days after the Trump administration announced it would suspend entry of foreign nationals who had been to China in the previous two weeks.

    Hopefully this coronavirus outbreak will not explode in North America and our normal lives will not be disrupted.

    But considering what is happening over in Asia, it would definitely be prudent to take some precautions.  Unfortunately, most Americans are not really doing much of anything to prepare for a potential pandemic at this point.

    If a pandemic does not materialize, that won’t be a problem.  But if this virus starts spreading like wildfire in the U.S., we are going to have a massive crisis on our hands.

    The time to stop an outbreak from happening is at the very beginning, and the lack of urgency about this virus that we are witnessing from local health officials around the country is absolutely stunning.

    According to NBC News, there are thousands of Americans that are currently “under voluntary self-quarantine”.  These individuals have either recently traveled to China or they have recently had contact with someone that was infected.

    As you might assume, a “voluntary self-quarantine” is not mandatory.  Instead, NBC News says that it is “strongly encouraged”…

    Self-quarantining isn’t mandatory, but it is strongly encouraged.

    It’s up to the state and local health departments to decide how to manage residents under self-quarantine.

    So anyone that doesn’t want to participate can feel free to mix with the general public as much as they want.

    Isn’t that great?

    And since it is “up to the state and local health departments to decide how to manage residents under self-quarantine”, there is no single set of standards that is being followed.

    In other words, state and local health officials are free to make things up as they go along.

    We aren’t talking about a small number of people either.  In fact, more than 5,000 people are under self-quarantine in California alone…

    The California Public Health Department said there are more than 5,400 such people in the state. In Washington state, 745 people have been asked to self-quarantine. Georgia health officials identified about 200 travelers.

    The Michigan Department of Health and Human Services said more than 300 people were referred for monitoring.

    All it takes is a couple of “super spreaders” to get a real good outbreak going, and to see such a lack of concern about preventing the spread of this disease is quite disheartening.

    And this lackadaisical attitude has even extended to actual victims that have been confirmed to have the virus.  The CDC specifically warned against putting infected people on the same flight with non-infected people, but the U.S. government did it anyway…

    Fourteen Americans who tested positive for the Coronavirus were flown back to the US on a flight with over 300 people who were not infected, despite objections from the Centers for Disease Control and Prevention.

    The flight was filled with people who were evacuated from the Diamond Princess cruise ship in Japan, which had been quarantined due to an outbreak of the virus.

    Reading this sort of thing makes you want to tear your hair out.

    Despite such extreme negligence, hopefully everything will be okay.  But it should be noted that the CDC is telling hospitals that now “is the time to open up your pandemic plans and see that things are in order”…

    “This is the time to open up your pandemic plans and see that things are in order,” Dr. Anne Schuchat, a top official of the Centers for Disease Control and Prevention, urged hospitals last week as an outbreak of a deadly new coronavirus ravaged much of China.

    “For instance,” she continued, health-care providers need to plan for a “surge at a hospital, the ability to provide personal protective equipment for your workforce, the administrative controls and so forth that you might put place in a health care setting.”

    Anyone that assumed that this crisis would be largely confined to China has been proven wrong.  At this point, we have already seen significant outbreaks erupt in several other countries in Asia.  In fact, there are now eight other nations where “community spread” is taking place…

    • Japan

    • Singapore

    • South Korea

    • Taiwan

    • Thailand

    • Vietnam

    • Italy

    • France

    Perhaps the most notable outbreak on that list is in South Korea.  According to the Guardian, 31 brand new cases were announced on Thursday…

    The South Korean city of Daegu was facing an “unprecedented crisis” after coronavirus infections that centred on a controversial “cult” church surged to 38 cases, accounting for nearly half of the country’s total.

    The city of 2.5 million people, which is two hours south of the capital Seoul, was turned into a ghost town after health officials said the bulk of country’s 31 new cases announced on Thursday were linked to a branch of the Shincheonji Church of Jesus.

    If we don’t want the same thing to happen here, we need to take this virus very seriously.

    Unfortunately, that is simply not happening, and all of us could end up paying a great price as a result.


    Tyler Durden

    Mon, 02/24/2020 – 20:10

  • Israel Takes Out Islamic Jihad Militants In Damascus & Gaza In Rare Simultaneous Air Strikes
    Israel Takes Out Islamic Jihad Militants In Damascus & Gaza In Rare Simultaneous Air Strikes

    Damascus once again was rocked by Israeli airstrikes Sunday night, with Syria saying its anti-air defenses were active in confronting a wave of “enemy rockets” from the direction of the Israeli-occupied Golan Heights.

    In a rare acknowledgement of the attack, Israel confirmed in was behind it, and linked it to rocket fire from the Palestinian territory, Gaza. The Israeli army said in a statement that it targeted Islamic Jihad leaders living in Damascus. 

    “In the Adeliyah region, outside of Damascus, an Islamic Jihad compound was struck, used as a hub of Islamic Jihad’s activity in Syria,” the statement said. “Israeli military planes targeted Islamic Jihad targets in Gaza” it said further. 

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    Israeli air strike in the southern Gaza Strip on Sunday, on a night which also saw attacks on the Syrian capital. Image source: Reuters. 

    Palestinian Islamic Jihad confirmed that two of its members were killed in Damascus Sunday night, in a relatively brief attack which war monitors say killed a total of six people. The other four were alleged to be members of a pro-Iranian militia.  

    But Syrian state-run SANA said the country’s air defenses were effective, noting they “caused the missiles to deviate from their path, destroying most of the remainder before reaching their goals, and the results of the aggression are still being examined.”

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    Like with prior attacks over the past two years, Israeli jets were said to have fired from outside of Syrian airspace — most of the time from over neighboring Lebanon. Historically, wanted or exiled leaders of Palestinian militant and “resistance” groups have had headquarters in Damascus.  

    Islamic Jihad’s military wing, promised retaliation, saying in a statement: “The Israeli aggression in Damascus and killing two of our fighters is an event that cannot be ignored and will not pass quietly,” according to Haaretz.

    Israel simultaneously launched airstrikes on Gaza in response to earlier rocket fire:

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    This particular attack is notable not only because it was essentially an assassination of Palestinian commanders related to Gaza, but also because Tel Aviv owned up to it immediately. Prior attacks have been focused on preventing Iranian expansion and entrenchment inside Syria. 

    Israel’s Defense chief Naftali Bennett vowed last week to step up offensive attacks in Syria to stop Iran. “We will go from preventive action to offensive action — the only measure that guarantees us the expulsion of Iran out of Syria,” he said.

    “We are warning them (the Iranians), we will turn Syria into an Iranian Vietnam, and you will continue to bleed until the last Iranian soldier leaves Syrian territory,” the nation’s defense chief threatened. 


    Tyler Durden

    Mon, 02/24/2020 – 19:50

  • Harvey Weinstein Ambulance To Rikers Diverts To Hospital For Unknown Reason
    Harvey Weinstein Ambulance To Rikers Diverts To Hospital For Unknown Reason

    Update (19:35 ET): Weinstein’s ambulance was redirected from Rikers Island to Bellvue hospital for an unknown reason, according to his spokesperson Juda Engelmayer.

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    Perhaps he was struck with a sudden bout of affluenza?

    * * *

    Harvey Weinstein was convicted of third degree rape and a criminal sexual act by a New York jury of seven men and five women, who took five days to reach their verdict. He faces up to 25 years in prison, and will remain in custody until his March 11 sentencing.

    Weinstein was acquitted of predatory sexual assault, the most serious charge, and first degree rape.

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    The jury was deadlocked on the charge of predatory sexual assault, the most serious accusation against the disgraced 67-year-old Hollywood mogul, offering a glimpse into disagreements between jurors who had been deliberating in New York City over four days.

    Jurors had told Judge James Burke in a note, “We the jury request to understand if we can be hung on 1 and or 3 but unanimous on the others.”

    Counts 1 and 3 are charges of predatory sexual assault.

    Count 2 is criminal sexual act in the first degree, count 4 is rape in the first degree, and count 5 is rape in the third degree.

    Burke told jurors that any verdict that they returned must be unanimous and that if they cannot be unanimous on a specific criminal count then they cannot return a verdict for that count. –CNBC

    According to the Wall Street Journal, “Predatory sexual assault requires jurors to agree that Mr. Weinstein carried out more than one sex crime and carries a sentence of up to life in prison.”

    Weinstein was charged with one count of criminal sex act for allegedly forcible performing oral sex on former film-production assistant Miriam Haley in 2006, as well as first and third degree rape charges for allegedly forcing himself upon aspiring actress Jessica Mann in a Manhattan hotel room in 2013.


    Tyler Durden

    Mon, 02/24/2020 – 19:36

  • Are We Seriously Debating Capitalism Vs. Socialism Again?
    Are We Seriously Debating Capitalism Vs. Socialism Again?

    Authored by Jeffrey Tucker via The American Institute for Economic Research,

    The answer is yes, we are seriously debating capitalism vs. socialism again. As it should be. And herein lies the silver lining in one of the most alarming trends in public life: a self-described socialist is leading in the polls to win the Democratic nomination. 

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    For nearly 100 years, public figures in America have dabbled in socialist ideology, learned from it, practiced it on a limited scale, imposed policies rooted in its logic, and been inspired by its conflict ethos that imagines markets to be inherently exploitative, unfair, and unjust.

    It makes some kind of weird sense that finally at the highest (?) levels of American public life, they would just finally come out and say it: we are all kind of socialist now. 

    To contradict that claim requires that you see the problem with socialism, and to see that problem leads one to think through the logic of markets and economics, which in turn leads one to see the virtues of commercial freedom. But doing that, taking those hard steps to understand scarcity, creativity, prices, and exchange threatens to undermine the ideological infrastructure of the Democratic Party itself. What has emerged instead is a “no enemies to the left” ethos that allows the extremists to control the messaging. 

    David Brooks, writing for the New York Times, makes the very compelling point that the reason Bernie Sanders is coming out on top is that he offers a clear (if utterly unrealistic) worldview that the others tacitly accept, so therefore they are not really in a position to shatter his presumptions:

    Over the past five years Sanders and his fellow progressives have induced large parts of the Democratic Party to see through the Bernie lens. You can tell because every candidate on that stage has the categories and mental equipment to carve up a billionaire like Bloomberg. None have the categories or mental equipment to take down a socialist like Sanders.

    Sanders goes untouched in these debates because the other candidates don’t have a mythic platform from which to launch an attack. Saying his plans cost too much is a pathetic response to a successful myth.

    Myth is right, and it was too much for Michael Bloomberg, who called him out for favoring socialism in a country in which the most famous socialist owns three homes. To be sure, to someone like Sanders, there is nothing contradictory here. The dictatorship of the proletariat always needs a vanguard elite to channel the interests and energies of the working classes; it stands to reason that they should live well, in this way of thinking. Such has it always been. 

    Socialism is a movement not of the working classes but of the elites, born of arrogance, snobbery, and preposterous pretense, kept alive not from lived experience but the astonishing capacity of an ideologically soaked brain to live in denial of reality. 

    But what about this term capitalism? The case against it as a description of the market economy is that it was an invention of the Marxists, and for a reason: it was supposed to describe an economy ruled by the capitalists. In fact, capitalism is nothing more than the working out of the advanced stage of a society that respects private property, peace, and freedom of association and trade. It is not an imposition or even a system; it is a description of what happens when violent actors bow out of the process of social evolution. 

    For this reason, many of my classically liberal friends would just as soon get rid of the term. 

    On the other hand, the term does zero in on the main debate: whether and to what extent should the produced means of production (capital) be unmolested by public authority and accumulated by successful companies. The non-capitalists of the political class want to bust up and pillage businesses just because they are big and tax the rich just because they are rich. The problem is that this is the path to impoverishment. 

    Capital, on the other hand, is institutionally essential for complex production structures and the division of labor. There is no doing without, though many societies have tried. 

    What’s more, socialists will tell you that they aren’t against private property as such, just private ownership in the means of production. So there is a sense in which framing the debate over the future of freedom really is an argument about capitalism vs. socialism. The logic of this demand trends toward finding a stable truth: there is freedom and private property or there is not. We need to have this debate. Probably it should never stop. 

    I personally recall that after 1989, I was pretty sure that the argument had been settled for all time and eternity. Part of me was disappointed because I had cut my teeth on this issue during the Cold War. Maybe all my knowledge would now be of historical interest only. Not so: the very next issue of a Marxian academic periodical headlined “the collapse of Stalinism” – announcing this only 40 years too late. 

    So yes, the intellectual battle continues. Watch the movie and buy the two books: The Best of Marx and the Best of Mises. 


    Tyler Durden

    Mon, 02/24/2020 – 19:30

  • Retail Investors Steamrolled By Monday Mauling After Berserker Buying Spree
    Retail Investors Steamrolled By Monday Mauling After Berserker Buying Spree

    Retail investors are legendary for chasing market momentum into a market meltup, buying stocks indiscriminately at all time highs with the confidence that a greater retail fool will buy the same stock from them at an even higher price. They are also notoriously fickle and dump stocks just as the momentum reverses, selling at lows. And following the biggest one-day market drop in years, we are about to find out if the record retail volume surge, and retail outperformance from the past few months is about to disintegrate with a bang.

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    Remarkably, it was just two days ago that we musedhow, ever since the launch of the Fed’s QE4, in October, retail investors had trounced hedge funds.

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    Curiously, the case can be made that the biggest reason why hedge funds did not do even worse in the YTD period, where the equity hedge fund cohort placed dead last in the list of assets tracked by Goldman…

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    … is because retail investors ended up buying a substantial number of the same stocks that comprise the 50 most popular, aka hedge fund VIP stocks, from tech giants to small-caps.

    Yet while they have their similarities, the two baskets of most preferred stocks by retail and hedge fund investors, also have their differences, and as we said on Saturday, “ultimately it all really boils down to the far higher beta of the retail basket compared to the hedge fund VIPs: which means that while retail investors tend to win big, they also lose big when stocks tumble.”

    We then concludes by noting that “while it is certainly a novelty to see retail investors outperform hedge funds, we doubt this divergence will last long.“

    Sure enough, just as fast as momentum giveth, momentum taketh away, and one day after we discussed the remarkable, if fleeting outperformance of retail investors, the group was steamrolled by the Monday’s furious selloff which sent the S&P tumbling 3.35%, with the Goldman basket of retail favorites – among which Tesla, Spring PG&E and SPCE – tumbling the most in nine months, and catching down to the hedge fund VIP basket, with the two sets of stocks now neck and neck in their performance over the past 6 months.

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    As shown above, Goldman’s basket of 50 most-popular stocks among individual (i.e. retail) investors fell 3.9%, its biggest one-day drop since last May, with all but two of the 50 stocks sliding, and as recent darlings Tesla and Plug Power each sank more than 6%. As Bloomberg notes, “it has been a decisive turnaround for retail investors”, whose picks we first noted last Friday had surged 13% in 2020 before this week, outperforming the S&P 500 by a factor of four as retail investors bought not only high beta, momentum stocks but also a record amount of calls on stocks…

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    … which mature within a week.

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    The question is what happens next: will retail investors just double down and BTFD, or – as they have traditionally done in the past – scatter at the first sign of a momentum reversal?

    “A lot of that money does tend to be hot money,” FTSE Russell managing director Alec Young told Bloomberg: “It’s very sensitive to near-term losses” of which there have been a lot in just the past three days, because shortly after the S&P hit a new all time high less five days ago, the S&P 500 has dropped almost 5% from its record close, the bull market’s biggest slilde in six months, amid fears of a global coronavirus pandemic.

    Desperate to preserve their reputation as Wall Street insiders – because what good is their job, and their 7 figure comp if amateur mom and pop can outperform their stock picsk – some strategists took offense at the outperformance of retail investors, who they claim are buying bonds not stocks, and that equity markets are the realm of institutions and other “smart money.”

    “A lot of what is happening with bonds has to do with demographics,” said Baird strategist Michael Antonelli. “Baby Boomers are retiring, the world is starved for yields.” The equity market, on the other hand, “is really controlled by institutions. This up-and-down price action, that’s not retail money,” he said, although nobody who has seen the ridiculous moves in some momo stocks in the past month actually believes him.

    A simple counter to Antonelli’s argument is who panic buys stocks at all time high valuations, which is where the market has been trading in recent weeks. There is just one group that does: as Bloomberg notes, when pointing to last week’s 19x P/E multiple for the S&P, the highest since the dot-com era, “no other investor group than retail has a greater propensity to chase winners regardless of valuations and company fundamentals. Among retail’s darling stocks, 10 scored year-to-date gains exceeding 20%, including Plug Power, Tesla and Virgin Galactic. Yet only two made profits in 2019.”

    Yet while retail investors are legendary for their late cycle euphoria, and their desire to participate in distributions, in which the rich sell to the poor just before a recession hits…

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    … hedge funds were just as happy to capitalize on retail investor euphoria: as we said last Friday, retail infatuation with such hedge fund darlings as Apple, Amazon.com, Facebook and Microsoft has contributed to the top-heavy market that some strategists have warned is becoming hard to sustain, as today’s selloff clearly demonstrated.

    Of course, such a retail buying frenzy, which as shown in the chart below was also facilitated by the recent decision by online brokers E*Trade, Schwab and TD Ameritrade to cut commissions to zero which in turn double the daily average number of trades…

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    … is not new, and reminds Peter Cecchini of the retail over-involvement in the late 1990s that marked the end of the golden age of equities and foreshadowed the crash.

    “While retail involvement in and of itself is not always a sign of frothy markets, when that involvement generally appears to be based on a fear of missing out or otherwise uniformed decision-making, as now, then it is cautionary,” said Cecchini, chief market strategist at Cantor Fitzgerald.

    The problem, as Cecchini adds, is that “the coronavirus may help demonstrate how quickly it can all come unraveled when fundamentals disconnect from the narrative hype.”

    And in a world in which retail investors have outperformed both the market and hedge funds, it would not be surprising if everyone looks at what Joe Sixpack does tomorrow to determine whether the post-QE4 meltup is now over, or if the coronavirus scare was merely the latest blip, whose dip was quickly bought.


    Tyler Durden

    Mon, 02/24/2020 – 19:10

  • US Claims Russia Spreading Disinfo Blaming America For Coronavirus Outbreak
    US Claims Russia Spreading Disinfo Blaming America For Coronavirus Outbreak

    US officials are claiming that thousands of ‘Russian-linked’ social media accounts have launched a coordinated effort to promote disinformation about coronavirus – including a theory that the US is behind the outbreak, according to The Guardian, which calls it an “apparent bid to damage America’s image around the world.”

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    The accounts in question have popped up on Facebook, Twitter and Instagram, according to State department officials – with some of the suspected bad actors claiming that the United States is waging “economic war on China,” and that the virus is a CIA-manufactured biological weapon.

    Several thousand online accounts – previously identified for airing Russian-backed messages on major events such as the war in Syria, the Yellow Vest protests in France and Chile’s mass demonstrations – are posting “near identical” messages about the coronavirus, according to a report prepared for the state department’s Global Engagement Center and seen by the AFP.

    The accounts are run by humans, not bots, and post at similar times in English, Spanish, Italian, German and French. They can be linked back to Russian proxies, or carry messages similar to Russian-backed outlets such as RT and Sputnik, the report said.

    “In this case, we were able to see their full disinformation ecosystem in effect, including state TV, proxy websites and thousands of false social media personas all pushing the same themes,” said Lea Gabrielle, the head of the Global Engagement Center, which is tasked with tracking and exposing propaganda and disinformation. –The Guardian

    “Russia’s intent is to sow discord and undermine US institutions and alliances from within, including through covert and coercive malign influence campaigns,” said Philip Reeker, acting assistant secretary of state for Europe and Eurasia.

    “By spreading disinformation about coronavirus, Russian malign actors are once again choosing to threaten public safety by distracting from the global health response,” Reeker added.

    We would note that The Guardian, nor their sources, have provided any direct evidence of these claims.

    The Guardian then does its job to calm the masses – noting that the World Health Organization (WHO) says 80% of people who contract COVID-19 come down with a ‘mild respiratory illness,’ and likens it to the 2003 Sars virus, “which was thought to have come from bats.”

    In four out of five people, Covid-19 causes only mild respiratory illness, the World Health Organization (WHO) has said. But in some, the virus can cause severe respiratory illness including pneumonia. In the worst cases, it can cause respiratory failure.

    Covid-19 has killed more than 2,340 people, mostly in China, and infected more than 76,000. The US has tested more than 400 people and found 14 confirmed cases, mostly linked to travelers.

    A similar outbreak in 2003 involved the Sars virus, which was thought to have come from bats.

    Of course, The Guardian makes no mention of the Wuhan, China level-4 bioweapons lab located less than a mile from the wet market where the first cluster of cases was traced to – so looks like they’re going with the ‘naturally occurring’ bat theory.

    According to the report, the Russia-linked coronavirus disinformation campaign “has parallels with previous conspiracy theories traced to Moscow, including a KGB disinformation campaign in the 1980s that convinced many around the world that US scientists created the HIV virus that causes Aids.”

    The Guardian reports that US officials believe the alleged Russian disinfo campaign is complicating efforts to respond to the epidemic – particularly in Asia and Africa, as people have become suspicious of the West.


    Tyler Durden

    Mon, 02/24/2020 – 18:50

Digest powered by RSS Digest

Feb 24

Today’s News 24th February 2020

  • How The "Interpreter" Scam Brought 75,000 Iraqis And Afghans To America
    How The “Interpreter” Scam Brought 75,000 Iraqis And Afghans To America

    Authored by Daniel Greenfield via Sultan Knish blog,

    The latest battle over Special Immigrant Visas pitted Stephen Miller, President Trump’s senior advisor, against the Pentagon. The military brass was lobbying for 6,000 special immigrant visas for Iraqis who worked for American forces in the country. These visas were once again billed as helping “interpreters”.

    That’s a lot of interpreters considering that there were only 5,200 American troops in Iraq.

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    How could there be more Iraqi interpreters for American troops than there are troops?

    The Special Immigrant Visa scam has been sold for over a decade using the same claim that it’s needed to save the lives of Iraqi and Afghan interpreters who are risking death by helping American soldiers.

    In one decade, the United States has handed out 75,250 of these visas to Iraqi and Afghan employees, and their dependents. Between 2007 and 2017, they represented 1 percent of all immigrant visas.

    The truth is that the military brass has wrongly used the incentive of Special Immigrant Visas to recruit local personnel and cut costs by promising them resettlement in the United States. Considering the costs of resettling even the nicest Iraqi or Afghan families, it would have been cheaper to pay each of them a six-figure salary. But that would have come out of the defense budget. The SIV scam passes the buck to local cities and states, to ordinary taxpayers and communities who have to hire interpreters who speak Pashto to interact with the children of the interpreters who are swamping local school systems.

    One Iraqi or Afghan employee brings a lot more dependents and expenses with him. In 2017, the 4,677 Iraqi and Afghan employees brought 13,713 dependents with them for a total of 18,390 refugees.

    Those were the worst numbers since before Obama took office.

    While conventional refugee numbers have been slashed, the number of Special Immigrant Visas for Iraqis and Afghans drastically shot up because the Pentagon was getting its way on immigration. Few of these visas were for actual interpreters. That number tends to be capped at 50 a year. Most of the SIV applicants coming in had to have only worked for a few years in often vaguely defined capacities.

    Some were actual interpreters. Many more were cultural advisors and linguists.

    All they have to do is claim that they received threats over their work for the US or the ISAF, the multinational force in Afghanistan, and they are resettled in the United States as refugees.

    While the media has repeatedly accused President Trump of stopping interpreters from coming to this country even though they, allegedly, risked their lives, the number of SIV visas for Afghans and Iraqis shot up from 10,681 in 2014, to 14,383 in 2016, to 18,390 in 2017.

    That’s when Stephen Miller tried to slam on the brakes.

    The media complains that visa processing isn’t fast enough. And that the lives of SIV applicants are at risk every day they’re living in their own country. But bypassing vetting puts American lives at risk.

    As a measure of how bad the vetting is, Ali Yousif Ahmed Al-Nouri, the Emir of an Al Qaeda group in Fallujah, entered this country as a refugee and applied for disability. He then went to work as a military contractor on a California base, teaching soldiers deploying to Iraq about the local culture. That’s the typical sort of task that many SIV visas are provided for which require little more than English skills.

    Was an Al Qaeda Emir employed by the US military in Iraq? Did Al-Nouri come here on an SIV visa? The answer is he probably did, but no one seems to be especially willing to ask or answer that question.

    Bilal Abood came to the United States on an SIV visa. Like many SIV applicants, he had worked as a contract linguist in Iraq. Like most SIV applicants, he claimed to have faced threats because of his work.

    Once in the United States, Abood began viewing ISIS beheading videos and tweeted, “I pledge obedience to the Caliphate Abu Bakr al-Baghdadi.” That was the leader of ISIS.

    “The United States is the enemy of Allah,” he had said.

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    Jasim Mohammed Hasin Ramadon and Ali Mohammed Hasan Al Juboori, Mustafa Sataar Al Feraji, Ali Mohammed Hasan Al Juboori, and Yasir Jabbar Jasim, 5 Iraqis who who came to America on SIV visas, took part in the rape of an American woman in Colorado Springs who was abused so badly that there was blood splattered on the wall. Her mistake was sympathizing with the poor hapless refugees.

    That’s our mistake as a country.

    Ramadon, like the other SIV applicants celebrated by the media, had an NCO lobby for him. He appeared on Oprah, was featured in a book, and became a celebrity. Then he was hit with a restraining order for choking and threatening to kill his girlfriend. His crimes ended with the brutal rape of an older woman.

    But the SIV lobby doesn’t care about the woman he nearly killed. Or the threat to Americans.

    District Court Judge Tanya Chutkan, an Obama appointee involved in controversial decisions, like inventing a right to taxpayer-funded abortions for illegal migrants, ruled that the Trump administration must immediately start processing visa applications for SIV migrants and bring them to America.

    Meanwhile the National Defense Authorization Act of 2020 provided 4,000 more SIV slots for Afghans.

    Shutting down the SIV pipeline has been painfully difficult because the refugee program has broad bipartisan support from both Democrats and Republicans in Congress, and from military brass.

    In this case, it’s actually the bureaucracy that has saved American lives by slowing SIV visa processing.

    The United States has spent years figuring out exactly how to throw in the towel in Afghanistan through some sort of meaningless deal with the Taliban, even as we continue passing out SIV visas to Afghan employees in a country we may be leaving at any time. And we are handing out SIV visas like candy to Iraqis even though we have a very limited military presence there that is not expected to last for long.

    But facts have never stopped the SIV express from barreling through America at an incredible cost.

    85% of SIV recipients have received refugee resettlement benefits. Over 17,000 have been dumped in California, over 10,000 in Texas, and over 7,000 in Virginia. In Virginia, that meant that over 800 Iraqi children and almost 2,000 Afghan children became part of the system. In Northern Virginia, SIV holders increased tenfold and doubled in just one year, putting a potential terrorist population close to the center of government, to top terror targets, including the headquarters of the CIA in Fairfax County.

    Meanwhile a GAO report found that 60% of SIV refugees were unemployed after three months and 94% were on food stamps.

    70% of Iraqi SIVs were unemployed.

    In one single year, SIV refugees racked up $80 million in federal aid from two agencies alone. That doesn’t account for some federal refugee assistance programs that go on for as long as 5 years.

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    How many American soldiers could have been trained to speak Arabic or Pashto for that money?

    As their number has grown, so has the monumental expense of subsidizing them. In 2008, SIV refugees accounted for only 1% of resettlement assistance. By 2017, SIV refugees made up a quarter of costs.

    After 75,000 Iraqi and Afghan SIV recipients, maybe it’s time that we shut down the SIV scam, instead of expanding it, as politicians from both parties and Pentagon brass, keep insisting that we must do.

    We currently have 14,000 troops in Afghanistan and over 55,000 Afghans here through the SIV program. There are 5,200 American military personnel in Iraq and over 20,000 Iraqis through the SIV program in America. We’ve resettled enough “interpreters” to fill Kalamazoo, Wilmington, or Boca Raton.

    America is all “interpreted” out.

    The US Army began deploying the Machine Foreign Language Translation System (MFLTS) in 2011. Millions of dollars have been signed in contracts for MFLTS systems that can provide automatic translations of Arabic, Pashto, Urdu, and many other languages. The system was deployed in 2017.

    MFLTS is no doubt inferior to living translators. But software doesn’t shoot our soldiers in the back, rape women in Colorado Springs, demand food stamps, swamp social services in Virginia, or join ISIS.


    Tyler Durden

    Sun, 02/23/2020 – 23:30

  • "Sick People" – Russian Lawmakers Blast US For Nuclear War Exercise 
    “Sick People” – Russian Lawmakers Blast US For Nuclear War Exercise 

    US Defense Secretary Mark Esper participated in a war exercise late last week at the United States Strategic Command (USSTRATCOM) HQ in Omaha, Nebraska, which featured how the Pentagon would respond to a Russian nuclear attack on Europe, reported Defense One. 

    “We conducted a mini-exercise,” a senior defense official said, speaking on the condition of anonymity. “The scenario included a European contingency where you are conducting a war with Russia and Russia decides to use a low-yield limited nuclear weapon against the site on NATO territory, and then you go through the conversation that you would have with the secretary of defense and then with the president ultimately to decide how to respond.”

    “During the exercise, we simulated responding with a nuclear weapon,” the official said.

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    News of the “mini-exercise” immediately traveled to Moscow. Russian lawmakers called the Pentagon’s nuclear war simulation completely outrageous: 

    Senator Sergei Tsekov called organizers and participants of the exercise “sick people,” telling RBC News on Saturday, that he was “very surprised, frankly, very much, that they are doing this and also declare it. Although, on the other hand, judging by their current state and current actions, why be surprised?” 

    Alexander Sherin, the deputy head of the Duma’s defense committee, told HCH news on Saturday that the US’ nuclear war simulation with Russia has several objectives: 

    “Firstly, the population is getting used to such an incredible scenario for resolving the conflict as a nuclear strike between the Russian Federation and the NATO bloc. Secondly, an attempt to intimidate the population of Europe and justify the presence of American bases in European countries as guarantors of security and defenders in the event of a nuclear attack from Russia,” Sherin said.

    He said it would be foolish for Moscow to launch nuclear strikes on European countries because the fallout would flow back into Russia.

    Sherin says the reason the US nonchalantly leaks its nuclear war exercises to the media is because it has never had a major war on its soil, unlike Europe and Russia. 

    The latest drill comes as President Trump’s gargantuan military budget of more than $740 billion has allocated a whopping $44 billion for nuclear weapons. 

    Peter Kuznick, the director of the American University’s Nuclear Studies Institute, told RT News there is no such thing of limited nuclear war. 

    Kuznick said how these things play out is that both sides will continue shooting atomic weapons at one another until the human civilization is completely wiped out.

    The exercise comes weeks after we reported the US added a ‘low yield’ nuclear weapon to its submarine arsenal in a controversial first in decades.  

    Trump’s soaring military budget has led to the most significant increase in global military spending in more than a decade suggests governments across the world are preparing for the next big conflict.  


    Tyler Durden

    Sun, 02/23/2020 – 23:05

  • Bloomberg "Tried To Ruin Me For Speaking Out" On China
    Bloomberg “Tried To Ruin Me For Speaking Out” On China

    Authored by Leta Hong Fincher via The Intercept,

    I am one of the many women Mike Bloomberg’s company tried to silence through nondisclosure agreements. The funny thing is, I never even worked for Bloomberg.

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    But my story shows the lengths that the Bloomberg machine will go to in order to avoid offending Beijing. Bloomberg’s company, Bloomberg LP, is so dependent on the vast China market for its business that its lawyers threatened to devastate my family financially if I didn’t sign an NDA silencing me about how Bloomberg News killed a story critical of Chinese Communist Party leaders. It was only when I hired Edward Snowden’s lawyers in Hong Kong that Bloomberg LP eventually called off their hounds after many attempts to intimidate me.

    In 2012, I was working toward a Ph.D. in sociology at Tsinghua University in Beijing, and my husband, Michael Forsythe, was a lead writer on a Bloomberg News article about the vast accumulation of wealth by relatives of Chinese President Xi Jinping, part of an award-winning “Revolution to Riches” series about Chinese leaders.

    Soon after Bloomberg published the article on Xi’s family wealth in June 2012, my husband received death threats conveyed by a woman who told him she represented a relative of Xi. The woman conveying the threats specifically mentioned the danger to our whole family; our two children were 6 and 8 years old at the time. The New Yorker’s Evan Osnos reports a similar encounter in his award-winning book, “Age of Ambition: Chasing Fortune, Truth and Faith in the New China,” when the same woman told Osnos’s wife: “He [Forsythe] and his family can’t stay in China. It’s no longer safe,” she said. “Something will happen. It will look like an accident. Nobody will know what happened. He’ll just be found dead.”

    The experience was especially terrifying because it came just months after the murder of a British businessman, Neil Heywood, who was poisoned by the wife of a senior Chinese leader, Bo Xilai, according to Chinese state media. His body was reportedly discovered in a hotel in the southwestern Chinese city of Chongqing. While our family spent the kids’ summer vacation in 2012 outside of China, Bloomberg executives kept my husband busy in nonstop conference calls about how to maintain our security. I had recurring nightmares about my young children getting beaten up or killed. I desperately wanted to speak publicly about the death threats, feeling it would give us stronger protection, but Bloomberg News wanted us not to say anything about it while the company conducted its own internal investigation. I had been loyal to the company ever since my husband and I married in 2002, and I didn’t want to jeopardize his job. I stayed silent until October 26, 2012, when another (unrelated) story was published in defiance of the Chinese government. I decided to tweet that we had received death threats after the Bloomberg story on Xi Jinping.

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    Screenshot: Leta Hong Fincher

    Within hours of my tweets — the original and my replies to questions — a Bloomberg manager called my husband and said, “Get your wife to delete her tweets.” I did not delete them, but I also did not tweet or speak publicly about the death threats again. I did not want to anger the company because we needed it to relocate us to Hong Kong, where our children would be safe. As we finished the remainder of our time in Beijing, applying for schools in Hong Kong and preparing for our move, I lived in constant fear. Would someone get to our children while they were on their way to or from school? Who was watching and listening to us? I obsessively pulled down all our window blinds at night in case Chinese security agents were watching us. I was careful not to speak loudly about our plans in our home or on my phone in case we were bugged.

    In August 2013, I finally relaxed as we flew out of Beijing and moved to a temporary apartment in Hong Kong. I thought that our yearlong nightmare had ended. But things would soon get even worse.

    My husband had been working for many months on another investigative report for Bloomberg about financial ties between one of China’s richest men, Wang Jianlin, and the families of senior Communist Party officials, including relatives of Xi. Bloomberg editors had thus far backed the story. A Bloomberg managing editor, Jonathan Kaufman, said in an email in late September 2013, “I am in awe of the way you tracked down and deciphered the financial holdings and the players. … It’s a real revelation. Looking forward to pushing it up the line,” according to an account published by the Financial Times.

    Then Bloomberg killed the story at the last minute, and the company fired my husband in November after comments by Bloomberg News editor-in-chief Matt Winkler were leaked.

    “If we run the story, we’ll be kicked out of China,” Winkler reportedly said on a company call.

    Mike Bloomberg, then New York City mayor and majority owner of Bloomberg LP, was asked on November 12, 2013, about reports that his company had self-censored out of fear of offending the Chinese government and he dismissed the question.

    “Nobody thinks that we’re wusses and not willing to stand up and write stories that are of interest to the public and that are factually correct,” Bloomberg told a press conference.

    Yet, days after Bloomberg made those comments to reporters in New York, Bloomberg lawyers in Hong Kong threatened to devastate my family financially by forcing us to repay the company for our relocation fees to Hong Kong from Beijing and the advance on my husband’s salary that we took out, leave us with no health insurance or income, and take me to court if I did not sign a nondisclosure agreement — even though I had never been a Bloomberg employee.

    The law firm representing Bloomberg, Mayer Brown JSM, sent a letter to my lawyer on December 6, 2013, threatening a court injunction if I didn’t agree to their confidentiality terms within seven days.

    I told my husband’s lawyer that I did not want to sign a gag order, so Bloomberg summoned me and my husband to a meeting on December 16 at Mayer Brown JSM’s office in central Hong Kong. We sat around a fancy conference table with some Bloomberg senior editors and Mayer Brown lawyers and spoke via videoconference with a lawyer from Willkie, Farr & Gallagher, representing Bloomberg in New York. My husband’s lawyer said that I did not possess any recordings or emails that might be damaging evidence about the company’s practices.

    “But what about all the evidence that is in her head?” said the outsized man on the video screen. When Bloomberg’s lawyer in New York uttered those words, I suddenly pictured him holding a giant vacuum cleaner, trying to suck all the memories out of my brain. I told everyone that I needed to leave the room and I walked out of the building, determined to go down fighting.

    On December 20, they sent a letter to my husband demanding that I sign a nondisclosure agreement. If I didn’t agree, we might owe the company thousands of dollars. I might even have had to pay Bloomberg’s legal bills. The thought of Bloomberg possibly ruining our family financially if I didn’t give in to their threats made me sick, but I was also infuriated that they had kept us in harm’s way after we received threats, forbidden me from speaking publicly about the death threats we received in Beijing, and now were trying to take away my freedom of speech forever.

    It was only when I hired Snowden’s lawyers in Hong Kong — Albert Ho and Jonathan Man offered me a low rate because it was a “good cause” — that Bloomberg finally backed off. In the meantime, they had sent me several more threatening letters. One letter from Mayer Brown JSM on January 8, 2014, spelled out that “by virtue of the knowledge that she retains (in her head) of our client’s [Bloomberg’s] Confidential Information she has an ongoing duty of confidentiality to our client.” They demanded that I sign away my right to speak out about things such as “unpublished drafts of an article prepared for our client; documents concerning our client’s newsgathering, editorial processes and editorial judgment …; any emails and other communications (including oral discussions) between and among our client’s employees concerning our client’s newsgathering editorial processes and editorial judgment.”

    Ho, a veteran Hong Kong pro-democracy legislator and activist who has been assaulted twice over the years, told me that if Bloomberg didn’t back down, we could hold a press conference to shame them. Fortunately, it didn’t come to that and in February 2014, Bloomberg finally stopped sending me legal threats. I returned to Tsinghua University to finish my Ph.D. and published my first book about women in China. My husband joined the New York Times, re-reported the entire story on the Chinese businessman, Wang, which Bloomberg claimed was “not ready for publication,” and his story was published on the front page of the New York Times in late April 2015.

    I never wanted to seek publicity about Bloomberg’s threatening behavior and was genuinely terrified of financial ruin, so in spite of preserving my freedom of speech, I have never written about my experience before. I am speaking out now because unlike so many other women, I am not bound by a nondisclosure agreement. Given the large number of women silenced by NDAs, it’s clear that there has been an environment of sexism at Bloomberg’s company. Bloomberg managers and lawyers treated me as though I were a piece of company property, an appendage of my husband, using intimidation and threats to try to bully me into submission. I agonized over whether to sign the NDA and I remember feeling physically suffocated, as though my mouth were stuffed with cotton balls. I haven’t met any of the other women, but I imagine that they, too, may have experienced the same terror of being threatened by a multibillion-dollar corporation, which could ruin their lives if they did not comply. Even now, I am nervous about the consequences of speaking out. But the more of us speak out, the stronger we are.


    Tyler Durden

    Sun, 02/23/2020 – 22:40

  • "Range Beyond 1,000 Miles" – Leaked Images Reveal US Army Super Cannon 
    “Range Beyond 1,000 Miles” – Leaked Images Reveal US Army Super Cannon 

    We noted last Oct. the US Army was developing a “powerful cannon that can fire a projectile over a distance of more than 1,150 nautical miles,” or about the distance from New York City to Tennessee. 

    The Strategic Long-Range Cannon (SLRC) is a “game-changing” weapon to counter China and Russia at great distances enters the first round of live-testing in 2023. 

    Over the weekend, Defense Blog published a piece detailing how the Army “accidentally revealed the first images” of the new super cannon during a US-UK Modernization Demonstration Event.

    The alleged pictures of the new cannon were shared by the US Army CCDC Army Research Laboratory at an event on Feb. 20 at Aberdeen Proving Ground, Maryland. 

    “The @USArmy hosted a US-UK Modernization Demonstration Event Feb. 20 at @USAGAPG to identify capability collaboration to the British Army. Officials from @ArmyFutures @USArmyCCDC , the centers and the lab, briefed interoperability to minimize risks of #modernization divergence.,” @ArmyResearchLab tweeted.

    Other photos posted on Twitter detailed how the projectile can travel more than 1,000 nautical miles. Here’s one of the leaked images: 

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    And another:

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    It seems that the GI. Joe brand owned by the toy company Hasbro has already created a futuristic toy called the “Thurnderclap,” which looks very similar to the super cannon.

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    However, super cannon is nothing new. The V-3 was a German World War II large-caliber cannon that filed projectiles upwards of 102 miles. 

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    A bloated national defense budget has given the Army the ability to develop their wildest weapons – such as a super cannon. More government waste as war spending will bankrupt the nation. 


    Tyler Durden

    Sun, 02/23/2020 – 22:15

  • Political Bias And Anti-Americanism On College Campuses
    Political Bias And Anti-Americanism On College Campuses

    Authored by Walter Williams, op-ed via Townhall.com,

    A recent Pew Research Center survey finds that only half of American adults think colleges and universities are having a positive effect on our nation. The leftward political bias, held by faculty members affiliated with the Democratic Party, at most institutions of higher education explains a lot of that disappointment. Professors Mitchell Langbert and Sean Stevens document this bias in “Partisan Registration and Contributions of Faculty in Flagship Colleges.”

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    Langbert and Stevens conducted a new study of the political affiliation of 12,372 professors in the two leading private and two leading public colleges in 31 states.

    • For party registration, they found a Democratic to Republican (D:R) ratio of 8.5:1, which varied by rank of institution and region.

    • For donations to political candidates (using the Federal Election Commission database), they found a D:R ratio of 95:1, with only 22 Republican donors, compared with 2,081 Democratic donors.

    Several consistent findings have emerged from Langbert and Stevens’ study. The ratio of faculty who identify as or are registered as Democratic versus Republican almost always favors the Democratic Party. Democratic professors outnumber their Republican counterparts most in the humanities and social sciences, compared with the natural sciences and engineering.

    The ratio is 42:1 in anthropology, 27:1 in sociology and 27:1 in English. In the social sciences, Democratic registered faculty outnumber their Republican counterparts the least in economics 3:1. The partisan political slant is most extreme at the most highly rated institutions.

    The leftist bias at our colleges and universities has many harmful effects. Let’s look at a few.

    • At University of California, Davis, last month, a mathematics professor faced considerable backlash over her opposition to the requirement for faculty “diversity statements.”

    • University of California, San Diego, requires job applicants to admit to the “barriers” preventing women and minorities from full participation in campus life.

    • At American University, a history professor recently wrote a book in which he advocates repealing the Second Amendment.

    • A Rutgers University professor said, “Watching the Iowa Caucus is a sickening display of the over-representation of whiteness.”

    • University of California, Berkeley, professor and former Secretary of Labor Robert Reich chimed in to say: “Think about this: Iowa is 90.7% white. Iowa is now the only state with a lifetime voting ban for people with a felony conviction. Black people make up 4% of Iowa’s population but 26% of the prison population. How is this representative of our electorate?”

    • A Williams College professor said he would advocate for social justice to be included in math textbooks.

    • Students at Wayne State University no longer have to take a single math course to graduate; however, they may soon be required to take a diversity course.

    Then there’s a question about loyalty to our nation.

    Charles Lieber, former chairman of the Department of Chemistry and Chemical Biology at Harvard, was arrested earlier this year on accusations that he made a materially false, fictitious and fraudulent statement about work he did for a program run by the Chinese government that seeks to lure American talent to China.

    He was paid $50,000 a month and up to $158,000 in living expenses for his work, which involved cultivating young teachers and students, according to court documents. According to the Department of Justice, Lieber helped China “cultivate high-level scientific talent in furtherance of China’s scientific development, economic prosperity and national security.”

    It’s not just Harvard professors.

    • Newly found court records reveal that Emory University neuroscientist Li Xiao-Jiang was fired in late 2019 after being charged with lying about his own ties to China. Li was part of the same Chinese program as Lieber.

    • A jury found a University of California, Los Angeles, professor guilty of exporting stolen U.S. military technology to China. Newsweek reported that he was convicted June 26 on 18 federal charges.

    • Meanwhile, NBC reported that federal prosecutors say that University of Texas professor Bo Mao attempted to steal U.S. technology by using his position as a professor to obtain access to protected circuitry and then handing it over to the Chinese telecommunications giant, Huawei.

    The true tragedy is that so many Americans are blind to the fact that today’s colleges and universities pose a threat on several fronts to the well-being of our nation.


    Tyler Durden

    Sun, 02/23/2020 – 21:50

  • "Tsunami-Like" Coronavirus Floods South Korea With New Cases; Europe Begins To Isolate Italy: Live Updates
    “Tsunami-Like” Coronavirus Floods South Korea With New Cases; Europe Begins To Isolate Italy: Live Updates

    Summary:

    • In a report that was 4 hours “late”, China reported an additional 409 coronavirus cases across the entire nation, and 150 additional deaths as of February 23 compared to 648 additional cases and 97 deaths on February 22; this brought total China cases to 77150 and total deaths 2592
      • China’s Hubei province said it has 398 New Coronavirus Cases As Of Feb 23 and 149 New Coronavirus Deaths.
    • South Korea raised its national threat level to “red alert” for the first time since the H1N1 swine flu outbreak in 2009. The total number of confirmed cases in the country reached 763, a jump of 161 overnight, and a 25-fold increase in the past week.
    • The Italian government said it has 152 confirmed cases, up from three in a matter of days. Three people have died. Authorities have locked down about a dozen small towns and canceled events across the north, including Venice’s Carnival.
    • Iran has confirmed eight deaths related to the coronavirus, the most outside of China, media reported Sunday. South Korea confirmed its seventh death.
    • 4 more cases confirmed in UK
    • 200 Israelis quarantined
    • Japan confirms more cases; Japanese Emperor expresses hope for Tokyo Games
    • Trump says US has everything ‘under control’ as he asks Congress for more money
    • EU’s Gentiloni says he has ‘full confidence’ In Italian health officials
    • Turkey, Pakistan close borders with Iran as confirmed cases soar
    • Global Times says virus may not have originated at Hunan seafood market
    • Axios reports shortages of 150 essential drugs likely.

    * * *

    Update (2200ET): In a release that was about 4 hours late, China’s Hubei province said it has 398 New Coronavirus Cases As Of Feb 23 and 149 New Coronavirus Deaths. Overall, China reported an additional 409 coronavirus cases across the entire nation, and 150 additional deaths as of February 23 vs. 648 additional cases and 97 deaths on February 22. This brings the total number of cases across China to 77,150, and total deaths to 2592.

    None of these numbers are even remotely credible any more, and serve merely the propaganda purpose of giving the impression that Beijing is winning the war against the spread of the Coronavirus, when in reality nobody has any idea anymore what is going on on the ground in China, and is why workers refuse to show up to their place of business. Consider this: two days ago, WaPo reporters pointed to a clear case of manipulation where the authorities suppressed the true number of cases.

    Authorities in Hubei province reported good news Thursday: There were only 349 new coronavirus cases the previous day, the lowest tally in weeks. The bad – and puzzling – news? Wuhan, the capital of Hubei, reported 615 new cases all by itself.

    And then there was the Hunan doctor who said he had treated no less than 50 patients with coronavirus on the same day official data reported just one new case.

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    * * *

    Update (2015 ET): The epidemic in South Korea is accelerating exponentially, with the country reporting 161 additional virus cases, bringing the total of 763, a 25-fold increase in cases in one week, along with two more deaths bringing the death toll there to seven. The Kospi is continuing its decline and is down 3.0% and approached the 2100 level on the downside.

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    More ominously, the number of cases under inspection is nearly 10,000.

    Earlier in the day, S.Korea elevated the virus alert level to “red”, the highest in its four-tier system. According to Yonhap, in escalating the virus alert level, President Moon said, “a few days from now is a watershed moment.” In the first 30 days, S. Korea seemed to have been effectively combating the Covid-19. But within the past few days, the number of confirmed cases spiked, first linked to a religious sect and now starting to spread across the country. Yet, the city of Daegu and the Gyeongbuk area have a higher concentration of virus cases – representing 84% of the total number of infections – than other regions. Tied to this, the Korea Centers for Disease Control and Prevention (KCDC) estimates 329 cases, accounting for more than half of the total cases, to be related to the church services.

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    Medics in protective gear spray disinfectant at a market in the South Korean city of Daegu on Sunday

    The following chart shows the geometric spread of new cases in several countries, including Italy, Japan, South Korea and Iran.

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    * * *

    Update (1915ET): Austria’s state railroad has halted at least three trains traveling from Italy via the Brenner Pass in response to a rash of virus cases in its southern neighbor, officials said.

    Meanwhile, Hong Kong warned that the “Tsunami-like” event from the virus in Hong Kong is devastating businesses already hobbled by months of anti-government protests. As Bloomberg notes, unlike in the U.S. and rival Singapore, businesses in Hong Kong don’t have recourse to any corporate rescue procedure. The lack of a proper legal framework for bankruptcy protection means companies are forced into liquidation, according to Johnson Kong, the president of the Hong Kong Institute of Certified Public Accountants.

    * * *

    Update (1820ET): White House trade adviser Peter Navarro says the crisis shows, “not surprisingly,” that the U.S. has offshored too much of its supply chain. Navarro expressed confidence on Fox’s Sunday Morning Futures, saying the “American economy is exceedingly strong and not particularly vulnerable to what happens in China.” He emphasized his goal to bring more of the U.S. supply chain home. “A lot of it is in China, some of it is in India, some in Europe, but we’ve got to get that back on shore,” he said.

    * * *

    Update (1615ET): The Italian government said it has 152 confirmed cases, up from three in a matter of days. Three people have died. Authorities have locked down about a dozen small towns and canceled events across the north, including Venice’s Carnival. Italian authorities reported cases in three regions: 110 in Lombardy; 21 in Veneto and nine in Emilia Romagna. Of those, 25 are in intensive care.

    * * *

    Update (1415ET): The Epoch Times Jennifer Zeng reporting once again that the crematoriums in Wuhan are working overtime.

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    Still believe those official numbers?

    * * *

    Update (1345ET): G-20 finance ministers and central bankers who met in Riyadh yesterday for the latest G-20 summit said their countries stand ready to take action if the outbreak drags on the global economy. At this point, a massive hit to global GDP is looking inevitable.

    Meanwhile, Bloomberg reports that Zhou Dewen, the chairman of the Small and Medium Business Development Association in the city of Wenzhou, believes the coronavirus outbreak is the worst public health crisis he’s seen in his 40 years since China started its economic liberalization.

    In fact, he said, it is “the most severe” of any crisis in the 40 years since China embarked on major economic reforms. He sees not a double but a “triple whammy,” factoring in the economic slowdown the country was experiencing even before the trade conflict and the virus.

    That sounds about right. And now we’re finding patients can go 27 days without showing symptoms.

    * * *

    Update (1230ET): The number of new coronavirus cases in Japan has risen to 135, while 57 new ‘Diamond Princess’ cases have been confirmed days after hundreds were released from a two-week quarantine. As we mentioned earlier, a third passenger has also died, according to Japan’s NHK.

    One of the cases, according to the Japan Times, is a woman who was reportedly let off the cruise ship as the quarantine ended. Of course, every expert in the world including the CDC warned Japan that this would happen since health officials didn’t seem to have m much of an after-care plan. Alas, here we are.

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    Three boys who have been confirmed to be infected with the virus are now Japan’s youngest cases. They include a preschooler in Saitama and two brothers in a Hokkaido elementary school. It’s the first time people under the age of 10 have caught the virus in Japan. While the younger boy had recently traveled to Wuhan with his father, authorities have no explanation for how the two brothers in Hokkaido became infected.

    Emperor Naruhito cancelled a public event on Sunday, and also reportedly expressed some alarm about the virus and the Tokyo Olympics. Naruhito, who turned 60 on Sunday, ascended to the throne last spring after his father became the first Japanese emperor in 2 centuries to abdicate.

    He said he was looking forward to this summer’s games, adding that the ’64 Tokyo games were a special memory in his childhood, Reuters reports.

    “This new coronavirus is a concern. I would like to send my sympathies to those who are infected and their families,” he said.

    “At the same time, my thoughts are with the efforts of those who are treating them and working hard to prevent the spread of the infection. I hope their efforts will bear fruit soon.”

    Tokyo will host the Summer Olympics from July 24 for the second time, and Naruhito said the first Tokyo games, held in October 1964 when he was four years old, were one of the highlights of his childhood.

    The Tokyo Olympics are the major barometer right now. If they get cancelled, then the world will know: This outbreak is out of control.

    * * *

    Update (1220ET): Let’s check in with one country that we neglected to mention earlier in today’s roundup of outbreak-related news.

    Haaertz reports that 200 Israelis are under quarantine after nine Korean tourists tested positive for the virus following a return trip from Israel. Yesterday, Tel Aviv issued travel warnings for South Korea and Japan (they’ve also barred foreigners who’ve recently been to either country from entering Israel).

    Those under quarantine include people who came into contact with the Koreans.

    * * *

    Update (1145ET): Italian authorities have confirmed a third coronavirus-linked death in northern Italy. Officials confirmed that 50,000 remain under lockdown across 12 villages in the north.

    As a reminder, Italy’s first cases surfaced in early February, when a Chinese couple on vacation in Rome fell ill. Now, priests celebrating mass on Sunday across Italy have been ordered by the bishops to make a few changes to procedure, for safety’s sake.

    Bishops in several dioceses in northern Italy issued directives that holy water fonts be kept empty, that communion wafers be placed in the hands of the faithful and not directly into their mouths by priests celebrating Mass and that congregants refrain from shaking hands or exchanging kisses during the symbolic Sign of the Peace ritual.

    * * *

    Update (1130ET): The BBC reports that four of the 32 British passengers aboard the ‘Diamond Princess’ cruise ship that have been taken to the quarantine at Arrowe Park have tested positive for the virus, the UK’s Chief Medical Officer said.

    This brings the UK’s total case number to 13.

    * * *

    Bernie Sanders has won the Nevada caucus, and coronavirus outbreaks are taking root in a handful of countries outside China, threatening a genuine pandemic and threatening to pop the market’s dismissive bubble by proving unequivocally that this is not ‘just another flu’.

    We’re starting our Sunday roundup with South Korea which, along with Italy and Japan, is one of a handful of countries outside China that is genuinely in crisis. On Sunday, the South Korean government raised the national threat level to “red alert”, its highest threat level (like, North Korean troops on the move to Seoul-level) after 169 new cases were confirmed on Sunday, raising the national toll total to 602.

    South Korean President Moon Jae-in warned on Sunday that the outbreak had reached a “critical watershed” moment, and that “the next few days will be a very important critical moment.” He then asked health authorities to take “unprecedented, powerful” steps to contain the virus – and it appears they’re already starting to do just that, as the FT reports.

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    As one can see from this chart, the bulk of new cases confirmed over the weekend have been in the ex-China, ex-Diamond Princess category:

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    The Italian government is taking similar steps after confirming 133 cases, up from just three less than 72 hours ago. In that time, Italy has become host to the largest coronavirus outbreak outside Asia.

    As Rome scrambles to contain the outbreak, authorities on Sunday banned all public gatherings, including Venice’s famed carnival celebrations that honor the beginning of Lent. The last two days of the carnival have been cancelled as fashion week in Milan was also cancelled, forcing the cancellation of the famed Giorgio Armani show, which had been scheduled for Sunday afternoon.

    Carnivale drew tens of thousands of revelers to the region which unfortunately is home to one of several clusters of outbreaks in Northern Italy.

    While Italy’s impoverished south has so far done little to prepare for the outbreak, in the north, museums, schools, universities and other public venues will be closed in Venice, as well as the rest of the Veneto region, through March 1.

    According to ABC, three patients in Venice have tested positive for the COVID-19 virus, all of them in their late 80s and who are hospitalized in critical condition.

    Most of Italy’s cases are clustered in the north, where the most extreme lockdowns are being implemented. 25 cases have been isolated in Veneto, and the rest in Lombardy, with authorities still unable to track down the source of the virus. The first case was discovered last week when an Italian man in Codogno in his late 30s became seriously ill.

    In Turin, the biggest and most economically vital city of the Piedmont region, three cases have now been diagnosed, and a family of three are being tested, according to authorities.

    “The health officials haven’t been yet able to pinpoint Patient Zero,”Angelo Borrelli, head of the national Civil Protection agency, told reporters in Rome.

    Initially, authorities believed this man was infected by an Italian friend with whom he had recently dined, and who also had just returned from Shanghai.  When the friend tested negative for the virus, attention turned to several Chinese who live in town and who frequent the same restaurant. Regional Gov. Attilio Fontana said they tested negative, too.

    And they’re still not sure if he’s ‘patient zero’.

    Across Italy, millions of Italians are preparing to be on lockdown for weeks, as many are hoarding essential supplies.

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    With 90 confirmed cases in Lombardy, the region has closed schools and universities, sporting events, other public events – and even catholic mass.

    More bad news out of Hubei followed on Sunday, as Wuhan’s Union Jiangbei Hospital confirmed the death of a 29-year-old doctor.  That’s the second death of a young doctor in Hubei in a matter of days (another doctor died late last week). Their deaths have stirred up memories of Dr. Li, a martyr of the virus and symbol of Beijing’s missteps.

    As we noted last night, Hubei reported ~600 new cases on Saturday but nobody really believes the Chinese numbers anymore.

    As Beijing tries to convince the world and its population that everything is under control, European Commission finance chief Paolo Gentiloni said the EU recently delivered 25 tonnes of protective equipment to China to help it contain the outbreak.

    Looking inward, Gentiloni warned there is “no need to panic” about the outbreak in Italy, even though 2 people have died and more than 100 have been confirmed to be infected. “The EU has full confidence in the Italian authorities and the decisions they are taking,” he said.

    “We share concern for possible contagion, but there is no need to panic.”

    We suspect he will soon eat those words.

    As the Trump administration confronts the unavoidable reality that it badly miscalculated by bringing those 14 sick passengers on the evacuation flight with ~300 seemingly healthy Americans from the Diamond Princess, Japanese officials confirmed on Sunday the third death among the ~2,600 passengers who traveled on the ship (along with another 1,000+ crew).

    The ‘Diamond Princes’ remains the largest outbreak outside mainland China – but South Korea has probably already surpassed it, health authorities just haven’t been able to test sick patients fast enough.

    Meanwhile, President Trump assured the public that the virus is “under control” in the US just as he reportedly asked Congress to authorize federal funds to combat the virus as the CDC warns only three states are truly prepared. This after 25 Senate Dems sent him a letter demanding that he act – a superficial political ploy – some are worried that the $1 billion Trump is asking for is ‘too small’. Seems to us that it makes sense to start small, then increase the ask as the situation evolves.

    Elsewhere in the US, reports on Sunday claimed 325 People in Michigan were being monitored, all of whom had recently been to mainland China, according to local health authorities.

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    Nearly all of South Korea’s coronavirus cases have been linked to two clusters at a church in southern city of Daegu and a nearby hospital in Cheongdo County – though cases have popped up seemingly without explanation, a phenomenon that is unnerving health officials around the world (Japan has faced a similar problem).

    Yonhap reports scenes familiar to those who watched Wuhan’s initial virus response: Exhausted health-care workers sleeping on benches outside hospitals.

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    The South Korean government has declared ‘special management zones’ in both areas – a kind of voluntary lockdown order. From what observers can tell, it seems to be working, because Daegu’s streets are abandoned, according to seemingly every report.

    As the public searches for somebody to blame for the outbreak, the public fury appears to be pointed at the cult-like church where a ‘super-spreader member who thought she just had a bad cold infected dozens of others, kicking of the outbreak in earnest.

    Rumors and reports are circulating claiming the church isn’t cooperating with the South Korean government.

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    But nowhere outside of Hubei is the outbreak worse than in Iran. The country’s utter lack of health-care resources combined with a bitter and oppressive regime already struggling with an US-manufactured economic crisis and a leadership that just accidentally killed ~200 innocent people, including dozens of students, has left it completely vulnerable.

    Alarmed by their neighbors’ outbreak, Turkey and Pakistan have closed their borders with Iran in an effort to stop the spread.

    In just a matter of days, the death toll in Iran has climbed to 8 on Sunday. Assuming a mortality rate of 2%, that would imply Iran had ~400 cases one month ago when these patients were likely infected. That means there could be thousands of cases roaming around the country already. The biggest clusters so far have been reported in Qoms and in Tehran, the capital. In response, all schools in Tehran have been shuttered until further notice, and the government is telling citizens to avoid any gatherings or leaving their homes at all, if possible.

    As medical workers literally throw everything they have at the virus, using AIDS drugs that have been found to be effective as well as therapies that work on flu patients, Axios reports that the global outbreak could soon cause shortages of 150 prescription drugs.

    Before we go, we’d like to point out one interesting piece that we found in the Global Times – literally the most unlikeliest of places. As Beijing begins to push a narrative blaming the US for the outbreak (we know, we know), Chinese propaganda is already sowing the seeds of doubt. The virus didn’t originate in the Hunan seafood market where an illegal wildlife trade helped it pass from bats or snakes to humans. No, it was ‘introduced’ to workers at the market via human-to-human transmission via an unknown third party.

    This according to Chinese “researchers”.

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    So much for Mike Bloomberg’s insistence that nothing can stop the inexorable march of globalization.

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    We’ll see about that.


    Tyler Durden

    Sun, 02/23/2020 – 21:28

  • High-Income Taxpayers Now Confronted At Home By IRS Agents
    High-Income Taxpayers Now Confronted At Home By IRS Agents

    The IRS announced Wednesday that it would increase at-home visitations to high-income taxpayers who haven’t filed tax returns on time. 

    Remember when the IRS under the Obama administration targeted conservative groups? Now it appears this anti-wealth attitude extends to anyone earning over $100,000 that hasn’t filed a return since 2018 or prior years. 

    During an at-home visit, IRS agents will inform the non-compliant taxpayer how to file returns and show them a pathway of regaining compliant status. 

    Uncle Sam wants his goddamn money! 

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    “The IRS is committed to fairness in the tax system, and we want to remind people across all income categories that they need to file their taxes,” said Paul Mamo, Director of Collection Operations, Small Business/Self Employed Division. “These visits focusing on high-income taxpayers will be taking place across the country.”

    Visitations have already started this month and will continue through March for severe cases of high-income taxpayers not filing. 

    In the last year, the agency started aggressively targeting low-income families who neglected to pay their taxes. These struggling folks in the “greatest economy ever” are barely surviving on depressed wages, insurmountable debts, and soaring housing and healthcare inflation, have no money left over to pay taxes. 

    If you’re rich or poor and haven’t paid your taxes in the last several years, watch out because Big Brother is now dispatching its agents to hunt you down. 

    And in case an agent confronts a non-compliant taxpayer – they will offer several options if the tax bill cannot be paid in full, such as a payment plan. But if a non-compliant taxpayer declines to pay, the IRS will inform the individual that they will pursue them in court. 

    Land of the free? Not when it comes to debt…

    And here’s the most bizarre move the IRS made before they launched a massive campaign across the country to confront rich and poor non-compliant taxpayers. The agency bought 5,000 guns, some automatic weapons, and 5 million rounds of ammunition. 

     “Among the agencies being supplied with night-vision equipment, body armor, hollow-point bullets, shotguns, drones, assault rifles, and LP gas cannons are the Smithsonian, U.S. Mint, Health and Human Services, IRS, FDA, Small Business Administration, Social Security Administration, National Oceanic and Atmospheric Administration, Education Department, Energy Department, Bureau of Engraving and Printing and an assortment of public universities,” said john Whitehead via The Rutherford Institute. 

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    The militarization of the IRS? 

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    Seriously, why do IRS agents need AR-15 rifles?  To collect all the money that is owed, of course! 


    Tyler Durden

    Sun, 02/23/2020 – 21:25

  • Chinese Workers Refuse To Go Back To Work Despite Beijing's Demands
    Chinese Workers Refuse To Go Back To Work Despite Beijing’s Demands

    When we commented earlier that the coronavirus pandemic means that the vast majority of Chinese small and medium enterprises (SMEs) have at most 2-3 months of cash left, a potentially catastrophic outcome that will not only crippled China’s economy but its $40 trillion financial system, we summarized the circular quandary in which Beijing finds itself, to wit:

    … unless China reboots its economy, it faces an economic shock the likes of which it has never seen before in modern times. Yet it can’t reboot the economy unless it truly stops the viral pandemic, something it will never be able to do if it lies to the population that the pandemic is almost over in hopes of forcing people to get back to work. Hence the most diabolic Catch 22 for China’s social and economic system, because whereas until now China could easily lie its way out of any problem, in this case lying will only make the underlying (viral pandemic) problem worse as sick people return to work, only to infect even more co-workers, forcing even more businesses to be quarantined.

    Shockingly (or perhaps not at all in light of China’s tremendous human rights record), Beijing has picked output over life expectancy, and in a furious scramble to restart its economy, which as we showed earlier remains flatlined…

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    … according to most high-frequency metrics, it has been “advising” people to get back to work, even as new coronavirus cases are still coming in, in the process threatening to blow out the current epidemic with orders of magnitude more cases as places of employment become the new hubs of viral distribution.

    As Bloomberg picked up late on Sunday, following what we said earlier namely that “local governments around the country face a daunting question of whether to focus on staving off the virus or encourage factory reopenings” China’s central and local governments are one again easing the criteria for factories to resume operations “as they walk a tightrope between containing a virus that has killed more than 2,400 people and preventing a slump in the world’s second-largest economy.” This schizophrenic dilemma for a government which faces two equally terrible choices, was best summarized by the following two banners observed in China:

    • Banner 1 says: “If you go out messing around now, expect grass on your grave to grow soon.“
    • Banner 2 says, “Sitting at home eats up all your have, hurry up go out & find a job.”

    Indeed, a perfectly schizophrenic message from the government to the people:

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    And yet, even with both options equally terrible, Beijing also has no choice but to pick one. As a result, as Bloomberg writes, “the rush to restart has been propelled by China’s leader Xi Jinping and top leaders, who are urging companies to resume production so the country can continue to meet lofty goals for growth and economic development in 2020.”

    Regular Zero Hedge readers know the rest: with most of Chinese economic output paralyzed, officials in China’s provinces have taken up Xi’s call, with one region after another relaxing rules that had kept more than half the nation’s industrial base idle following the Lunar New Year holiday.

    So as China undergoes a wholesale push to reboot its economy, there is certainly some success. AS Bloomberg notes, “about 600 kilometers east of the virus epicenter of Wuhan, vendors and customers at the Yiwu wholesale market in Zhejiang province are having their body temperature tested at the entrances after the vast complex that wholesales manufactured goods reopened on Tuesday, three days earlier than expected. Power demand has also started to pick up in China, with six major generators reporting that coal consumption – while still below pre-holiday levels – rose 7% on Feb. 20 from the previous day.”

    Well, “pick up” may be a bit of an exageration but here it is: the smallest possible increment, yet still more than 50% below where it was on previous years, suggesting China’s economy is running at half of its capacity, which in GDP terms means an epic collapse, a lifetime away from the traditional 6%-7% Y/Y increase.

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    Ultimately, the core problem China is facing as we explained earlier today, is one of trust: trust by workers that their employers, and certainly the government, has their best interest in mind when it is urging everyone to get back to work. Or lack thereof.

    “Our factory is still missing quite a lot of workers, so we can only resume limited production,” said Dong Liu, vice president of a textile manufacturer in Fujian, southeastern China, that employs more than 400 workers. Dong said he applied to the government on Feb. 17 to restart and the inspector came the next day and gave permission. “More and more factories are allowed to reopen this week,” he said, although as they reopen, they find the problem mentioned before: nobody is gullible enough to go back to work. After all why risk it if a return to the place of work with the pandemic still raging means a material chance of a death sentence?

    Naturally, China’s massive population – while bombarded by propaganda on a daily basis – is hardly naive, and is very well attuned to what is really going on. And what is going on is that China’s economy has ground to a halt because nobody trusts the government anymore!

    Even Bloomberg admits it: “the push to get production rolling again risks a renewed spread of the virus, about which much is still not yet known” (it’s certainly not known where it came from after Chinese scientists disproved the widely held propaganda narrative that it miraculously emerged from some bat at the Wuhan seafood market during the peak of bat hibernation season).

    “A peak may come at the end of this month for the whole country but it won’t necessarily indicate a turning point,” Zhong Nanshan, a respiratory disease expert who led research into a treatment for SARS, told reporters in Guangzhou earlier this week. “The epidemic could have a new peak after people travel back to work.”

    The last sentence is predicated on two major assumptions:

    1. that workers will decide they want to return to work; and
    2. that they will consider the outsized risk to their lives from returning to work as lesser than the threat to their livelihood from not receiving a salary.

    And what happens if they all refuse to come back? What if China, sick of the lies and fabrications of its government, creates the largest, if completely unexpected, labor union in history and one which refuses to work and demands handouts from the government until the coronavirus pandemic is well and truly halted, something which can not be ascertained for a long, long time in light of the government’s flagrant and ongoing lies?

    Meanwhile, the government schizophrenic, contradictory instructions continue:

    “Every day several government departments send representatives to spot check our efforts to curb the virus,” said Melissa Shu, the company’s export manager. “They come from the district government, the center for disease control, the city government, at different times of day and check if we disinfect in time, whether we test the temperature of workers, whether workers have masks, whether one person has a separate lunch seat, whether lunch is properly arranged, etc, etc.”

    Shu said at lunchtime, workers need to sit at least one meter apart (about three feet).

    “As a result, we can’t ask all the workers to come to work even when they’re in town ready to work,” she said, adding that the plant has about 40-50 staff working in rotation, about half the number employed before the virus.

    Ironically, some Chinese factories already have plenty of space, thanks to the long-running trade war with the U.S.

    “Compared with the virus, that was much worse” said Hui Zhuo, founder of a wooden furniture manufacturer in Zhongshan, in the Pearl River Delta. “We’ve cut a lot of workers in the last two years — so I’m not too worried this time because the space in my factory is big enough to avoid being crowded.”

    And speaking of trade war, if the long-running feud between the US and China wasn’t enough for Chinese customers to seek alternative supply chains, the coronavirus fiasco is sure to be the tipping point:

    In the longer term, the outbreak is likely to exacerbate the damage wrought on China’s factories by the trade war. For some overseas customers in fast-moving industries like fashion, the factory shutdown amid the virus has been another wake-up call that may spur them to reduce their reliance on Chinese suppliers.

    “I think for the next season or the next year’s goods, retailers would be looking at sourcing more from other countries,” said AJ Mak, CEO of Chain of Demand, which provides artificial-intelligence systems to retailers in Asia and the U.S. to predict product demand. “I think those conversations which started from the trade war would be definitely accelerated.”

    The irony is that by the time most Chinese workers do return to their jobs, those jobs may not exist anymore.

    Meanwhile China’s push to salvage its growth targets won’t be complete until the virus is fully under control – something that is impossible to predict, and will in fact be delayed the more China pushes to restore full factory staffing:

    “When can everyone come back to work? No one knows,” said Shu at the Zhenjiang LED factory. “Logistics is still not yet fully resumed, inter-city transportation is still restricted. Only after the epidemic is fully controlled, we can truly return to normal work and life.“

    What we do know, is that for now, when given the choice of the carrot or the stick, Chinese employers and the government are picking the carrot… for now. As China’s Global Times reported, fabrication giants such as Apple supplier Foxconn have rolled out incentives to encourage workers to return to their posts amid the coronavirus pandemic. In fact, the company’s factory in Zhengzhou said it would award 7000 yuan to back-to-work staff and give bonuses in stages to workers who clock in for up to 55 days.

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    So far such “carrot” approaches have failed to yield results, which leads us to think that a far worse eventuality is next: the stick.

    And if China’s population was already furious at the inept response to the coronavirus pandemic, the information blackout, the self-serving lies by the communist party over the past two months, and the general lack of respect for ordinary people by China’s billionaire oligarchs, one can only imagine what happens to the mood across China’s workforce – the largest in the world – once the entire nation becomes one giant gulag, where everyone is forced to work for the greater good, or else…


    Tyler Durden

    Sun, 02/23/2020 – 20:55

  • 10-Year Treasury Yield Plunges To Just 1 Basis Point Away From Recession "Tipping Point"
    10-Year Treasury Yield Plunges To Just 1 Basis Point Away From Recession “Tipping Point”

    After more than a month of shocking complacency (because what, central banks will somehow print antibodies and “fix” the covid pandemic which will restore collapsing global supply chains?) traders are “suddenly” realizing that the coronavirus outbreak contains a significant likelihood of impact to the global economy and the potential to become a black bat, pardon, black swan type event. An event which could quickly spiral into a US – and global – recession.

    How to determine if a recession is coming? One place to watch is the NY ‘sFed recession probability indicator, which is a function of the slope of the curve between 3m bills and the 10y rate and was developed using a logistic regression technique. As BofA writes, going back to 1960, there have been 8 recessions, but comparisons with the last 3 recession are likely more relevant. Chart 1 shows that within a 12-month window prior to each of the last 3 recessions, the probability exceeded 30%. If we look at all 8 recessions since 1960, we find that the critical 30% threshold remains relevant back to 1969 (7 recessions), but provided a false positive in 1967 and was not reached in the 1960 recession.

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    Yet while a 30% recession probability is still a gray zone, once the NY Fed’s indicator reached a level of 40% it has not provided any historical false positives.

    Why is this notable? Because in the Fed’s framework, the 40% level corresponds to a slope of -45bp between 3m bills and the 10y rate.

    Looking at the current cycle, not only is the current probability above 30%, but it was above 40% in August of 2019, when the world was flooded with recession fears and sent a record $17 trillion in global sovereign debt into negative yielding territory. The probability indicator declined post-August as the Fed’s 3 cuts steepened the curve, but given the current reading – and the August reading – versus the critical 30% level of the past 3 recessions, BofA warns that we “have to view the recession outcome as significant enough to consider hedging against.”

    Furthermore, when looking for recession proxy signals, BofA focuses squarely on the probability of a zero lower bound (i.e. fed funds rate cut to 0%) in 18 months (this is shown in chart 2 below). With this approach, BofA obtains roughly one in three chance of seeing the Fed at the ZLB by mid-2021, corroborating the above.

    What does all this mean for the 10Year Treasury as a recessionary signal?

    According to BofA, recent mini-cycle troughs have coincided with bottoms on 10y Treasury yields around 1.4% (as shown in chart 3 below for The Conference Board Leading Indicators and 10yT yields since the great recession).

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    More importantly, breaking through this “tipping point” level requires more than 50% probability priced for the Fed cutting rates back to 0%! This means that breaking 1.4% in an on-hold context for the Fed creates a significant inversion of the curve, pushes recession signals higher, and pressures a further inversion of the FF1/FF6 spread which we found in Pricing cuts ahead of the Fed to have no false positives for Fed cuts following a -30bp inversion (currently -16bp).

    As of open of trading on Sunday evening, the implied 10Y yield is 1.41%, or just 1 basis point above this critical “tipping point” below which trapdoors to both a recession and the Zero Lower Bound are open.

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    What this means in practical terms from a duration perspective is that “the market may gap lower on a break below 1.4% for the 10Y Treasury”, as this corresponds to phase transition higher in recession probabilities and a clear challenge to the on-hold Fed stance, “particularly as convexity flows add to what would likely be a broader risk-off move. “

    Finally, while the threshold for cuts is high – especially if a slowdown is driven by pandemic fears – and considering the Fed’s recent rhetoric which has sought to allay expectations of a rate cut as soon as June, once the Fed commits to cuts, BofA finds it unlikely that they will be the insurance style of 2019, and instead the Fed will proceed to cut all the way to zero to avert the coming recession. For the curve, this implies some scope for further bull flattening, but limited beyond 1.4% in the 10Y, as the Fed is likely to be more significantly priced in beyond this level.

    And while BofA goes on to list several ways to hedge this eventuality, the simple take home here is that if the 10Y tips below 1.40%, it will proceeds to plunge straight down, which in turn will force the Fed to change its “reaction function” again, and announce that an aggressive rate cut phase is coming, one which will be meant to offset what the market is now saying is a virtually assured recession. It also means that anyone hoping the Fed will further taper its QE4 in coming months is in for a rude awakening.


    Tyler Durden

    Sun, 02/23/2020 – 20:44

  • Pizza Hut's Largest Franchisee Is On The Brink Of Bankruptcy
    Pizza Hut’s Largest Franchisee Is On The Brink Of Bankruptcy

    NPC International, better known as Pizza Hut’s largest franchisee, is on the brink of bankruptcy.

    The company is reportedly exploring restructuring options for its more than 1,200 Pizza Hut locations and 400 Wendy’s locations. The franchise secured $35 million in loans earlier this year to help bolster its liquidity, but also recently defaulted on $800 million of its $1 billion in debt, according to Restaurant Dive.

    NPC reportedly skipped loan payments and entered into a forebearance agreement with lenders to allow time to weigh options for restructuring. The company is working with advisers at Greenhill & Co., AlixPartners LLP and Eldridge Industries LLC to weigh its restructuring options. 

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    A bankruptcy could help the company re-negotiate agreements with landlords and the company is reportedly still weighing options that will keep it out of court. 

    The company’s woes are partially attributable to lack of delivery, which is a consumer trend that other fast food companies have been able to embrace with services like Uber Eats and DoorDash. The company has also experienced headwinds from rising food and labor costs – and domestic same store sales that slipped 2% during Q4. 

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    Chris Tuner, Yum Brands CFO, said last week: “There is potential for choppiness in near-term results of Pizza Hut U.S., primarily related to our largest franchisee.”

    The chain has tried to adapt to other ideas, like self-service pickup cubbies and in-store kiosks. Pizza Hut is considering rolling these ideas out to all stores, pending the results of a pilot test in two Texas restaurants. Meanwhile, Yum Brands has leveraged a delivery partnership with Grubhub to try and compete with other delivery names and competitors like Domino’s. 

    Pizza Hut announced last year it could temporarily close up to 500 underperforming restaurants for remodeling. 

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    Recall, just weeks ago, we reported about the epidemic of small restaurants going bankrupt due to lack of traffic in areas where they are situated. 

    In that piece, that noted that names like Bar Louie and American Blue Ribbon Holdings, which owns Village Inn and Bakers Square, both filed for bankruptcy earlier this month and that both both cited lower foot traffic in the U.S. as the reason for their downfall. 

    Bar Louie’s Chief Restructuring Officer Howard Meitiner said at the time: “This inconsistent brand experience, coupled with increased competition and the general decline in customer traffic visiting traditional shopping locations and malls, resulted in less traffic at the company’s locations proximate to shopping locations and malls.”


    Tyler Durden

    Sun, 02/23/2020 – 20:35

  • The Atlantic: Trump Is Going To Cheat
    The Atlantic: Trump Is Going To Cheat

    Authored by Jeff Charles via LibertyNation.com,

    It isn’t even March yet, and progressives are already making their excuses for why they may lose to Trump in 2020. In a piece written for The Atlantic, Sarada Peri – a former senior speechwriter for President Barack Obama – launched the latest in a long line of arguments explaining why their loss would be unfair.

    The piece, titled “Trump Is Going to Cheat,” is the usual Democratic fare.

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    The author insists that the president is going to somehow use underhanded means to sway the election in his direction. Unfortunately for her, the argument doesn’t pass the smell test.

    President Trump Is Going To “Lie” To Win In 2020

    Peri begins by pointing out that the Democrats are currently in a heated contest to determine which one of them is the most electable. It doesn’t take long, however, for her to identify the real challenge any nominee will face: “He or she will need to run against a president seemingly prepared, and empowered, to lie and cheat his way to reelection.”

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    The author claims that President Trump would seek another win by lying and saying “absolutely anything necessary to attract and maintain support.” She also points to the so-called list of Trump’s lies as president. If the newspaper responsible for this particular curation is to be believed, he has rattled off over 15,000 since taking office. Of course, even a cursory glance shows that most of the statements in the fib collection are either Trump’s opinions, hyperbole, or even simple mistakes.

    Moreover, the notion that the Democrats — and their close friends and allies in the press — are somehow the epitome of honesty is laughable given their constant caterwauling about Russiagate conspiracy theories. But, according to Peri, President Trump is going to do far worse when it comes to winning in November.

    Trump Is Going To “Cheat!”

    Just in case bending the truth a little doesn’t quite cut it, the president will find a way to cheat, somehow. Peri is sure of it. She recalls an observation made by journalist Katy Tur during a discussion about the challenges involved in covering the president:

    “She said that what made covering Trump as a reporter and running against him as a candidate so difficult was the way that scandals stuck—or didn’t stick—to him. Hillary Clinton’s use of a private email server as secretary of state was like a stain on her shirt that people couldn’t get past, because it was the only mark on an otherwise clean shirt. But Trump had so many stains that ‘you couldn’t tell if it was a stained shirt or if it was just supposed to be that way.’”

    The author goes on to cite the controversy over Trump’s phone call with Ukrainian President Volodymyr Zelensky as an example of how he will break the rules to defeat his opponent. Of course, she forgets to mention that the Democrats failed to prove that Trump’s motivation in his dealings with Ukraine was specifically to hurt former Vice President Joe Biden.

    Peri also seems to forget the fact that Hillary Clinton’s campaign brazenly paid money to have a former British spy dig up dirt on Trump using Russian and Ukrainian sources. A little bit of “good for me, but not for thee,” perhaps? But that’s not the worst of it. It seems employing the Democrats’ tactic of using foreign powers to gain an edge in the election isn’t the only card up Trump’s sleeve.

    Trump Will Use Media To Cheat!

    In her effort to convince readers that Trump will use unfair means to keep his position in the Oval Office, Peri makes one of the most laughable arguments a progressive could suggest in this type of conversation: She blames the media. That’s right — she actually complains that right-wing media would support Trump and influence the masses:

    “Perhaps the most troubling form of cheating is the most diffuse, and therefore the hardest to grasp. Trump’s reelection campaign, abetted by right-wing media and companies like Facebook that have absolved themselves of any democratic responsibility, is waging a disinformation war modeled on the efforts of dictators and unprecedented in its scale. As reported by this magazine, the campaign is prepared to spend $1 billion to harness digital media to the president’s advantage, including bot attacks, viral conspiracy theories, doctored videos, and microtargeted ads that distort reality.”

    Trump Ain’t Leaving!

    Just when you think the author’s arguments couldn’t get any more ridiculous, she makes her final assertion: If Trump’s lying and cheating don’t secure his position, he will simply refuse to leave. Now, she is not the first to put forth such a silly idea, but, as proof, she cites the fact that he has made jokes about remaining in office past his term.

    “He retweeted Jerry Falwell Jr.’s suggestion that he ought to have two years added to his term and ‘joked’ about staying in office longer than eight years,” she wrote.

    “If he loses in November, the litigious showman might claim that the election was rigged against him and theatrically contest the results in court.”

    The Democrat Delusion

    According to Google, the definition of the word “delusional” is as follows:

    “Characterized by or holding idiosyncratic beliefs or impressions that are contradicted by reality or rational argument, typically as a symptom of mental disorder.”

    Peri’s piece is chock full of the delusional talking points the corporate press has bandied about since Trump took office. But it is far more than that. It is a stellar example of a tactic that is all too relevant nowadays: Always accuse your opponent of that which you are doing.

    Most of the accusations that one hears from Peri and her ilk have a ring of familiarity to them – but that’s because they describe the behavior and tactics the left tries to use against Trump…

    And as The Wall Street Journal’s Editorial Board notes,

    Democrats now know how millions of Republicans felt in 2016. A populist with devoted plurality support charges through the primary and caucus states, racking up delegates against multiple “establishment” candidates who all want to be the last alternative standing. Before the media knew it, Donald Trump could not be stopped.

    …

    Democrats are waking to the prospect of a nominee who wants to eliminate private health insurance, raise taxes on the middle class, ban fracking and put government in charge of energy production, make college a taxpayer entitlement, offer free health care to illegal immigrants, raise spending by $50 trillion, and tag every down-ballot Democrat with the socialist label.


    Tyler Durden

    Sun, 02/23/2020 – 20:10

  •  "Big Hit" – Xi Warns Of Economic Fallout From Covid-19 Outbreak 
     “Big Hit” – Xi Warns Of Economic Fallout From Covid-19 Outbreak 

    China’s top leader, Xi Jinping, told officials at a Communist Party meeting on Sunday that the Covid-19 outbreak is a “big test” for the country, and policy adjustments would cushion the economy for a downturn. Xi acknowledged “obvious shortcomings in response to the epidemic,” warning that short-term financial stress could be imminent.

    We’ve noted on several occasions that China’s economy is completely paralyzed. 

    Just take a look at Goldman’s Adam Gillard’s recent commodity report that suggests full country apparent demand is down a massive -66% y/y.

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    Or better yet, Nomura’s Chief China economist Ting Lu noted that China’s Emerging Industries PMI (EPMI), which gauges momentum in the country’s high-tech industries and is closely correlated with official manufacturing PMI slumped to 29.9 in February (from 50.1 in January!). 

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    So, it’s apparent that the closely followed China manufacturing PMI could print in 30-40 range this month, suggesting the current growth slump triggered by the virus is collapsing the Chinese economy. 

    Xi said Sunday the “the epidemic situation is still severe and complex, and prevention and control work is in the most difficult and critical stage.” 

    He warned: 

    “The outbreak of novel coronavirus pneumonia will inevitably have a relatively big impact on the economy and society.” 

    Beijing has deployed several rounds of monetary policy to support the economy, as a twin shock (demand and supply) is having devastating impacts on first-quarter growth. 

    Xi said low-risk provinces should restart production monetarily, areas with medium-level risks should restart production on an orderly timeline, and high-risk regions should focus on virus containment strategies. 

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    For more color on China’s plunging economic output, we noted last week several “alternative” economic indicators such as real-time measurements of air pollution (a proxy for industrial output), daily coal consumption (a proxy for electricity usage and manufacturing) and traffic congestion levels (a proxy for commerce and mobility), concluding that China’s economy appears to have ground to a halt.

    These observations were subsequently reaffirmed when we showed that steel demand, property sales, and passenger traffic had all failed to rebound from the “dead zone” hit during China’s Lunar New Year hibernation.

    No matter the policy support Beijing deploys to stabilize the economy, economic paralysis is already visible, with 750 million people in lockdown, where people are becoming irritable at Beijing’s now openly over propaganda to downplay the epidemic. The shuttering of factories will lead to countless workers being fired and companies running out of funds, as the next big bankruptcy wave will hit smaller to medium-sized operations. To make matters worse, the price of food is surging for the most volatile combination possible, a collapse of the economy mixed with social unrest, one which, if not arrested soon could lead a new violent phase in the virus outbreak. 

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    Putting it all together, the most significant economic shock to hit China’s economy in nearly a decade is unfolding, and it could also tilt the global economy into recession. 

    For weeks, investors have been gobbling up stocks, convinced that more stimuli from Beijing could force a V-shaped rebound in China’s economy in Q2 – but as the pandemic spreads across the world, now shutting down parts of South Korea, Japan, Iran, and Italy, the whole containment narrative has broken down – and the global economy could be nearing a prolonged period of below-trend growth. 


    Tyler Durden

    Sun, 02/23/2020 – 19:45

  • "It Will Be Really, Really Bad": China Faces Financial Armageddon With 85% Of Businesses Set To Run Out Of Cash In 3 Months
    “It Will Be Really, Really Bad”: China Faces Financial Armageddon With 85% Of Businesses Set To Run Out Of Cash In 3 Months

    For the past two weeks, even as the market took delight in China’s doctored and fabricated numbers showing the coronavirus spread was “slowing”, we warned again and again that not only was this not the case (which recent data out of South Korea, Japan and now Italy has confirmed), but that for all its assertions to the contrary, China’s workers simply refused to go back to work (even with FoxConn offering its workers extra bonuses just to return to the factory) and as a result the domestic economy had ground to a halt as we described in:

    Unfortunately, it’s not getting any better as the latest high frequency updates out of China demonstrate:

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    Also unfortunately, it is getting worse, because as we explained several weeks ago, China is now fighting against time to reboot its economy, and the longer the paralysis continues, the more dire the outcome for both China’s banks and local companies. And since it is no longer just “scaremongering” by “conspiracy blogs”, but rather conventional wisdom that China may implode, here is a summary of how the narrative that “it will all be over by mid-March” is dramatically changing.

    Let’s start with Chinese businesses: while China’s giant state-owned SOEs will likely have enough of a liquidity lifeblood to last them for 2-3 quarters, it is the country’s small businesses that are facing a head on collision with an iceberg, because according to the Nikkei, over 85% of small businesses – which employ 80% of China’s population – expect to run out of cash within three months, and a third expect the cash to be all gone within a month.

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    Should this happen, not only will China’s economy collapse, but China’s $40 trillion financial system will disintegrate, as it is suddenly flooded with trillions in bad loans.

    Take the case of Danny Lau who last week reopened his aluminum facade panel factory in China’s southern city of Dongguan after an extended Lunar New Year break. To his shock, less than a third of its roughly 200 migrant workers showed up.

    “They couldn’t make their way back,” the Hong Kong businessman said. Most of his workers hail from central-western China, including 11 from Hubei Province, the epicenter of the coronavirus outbreak that has killed more than 2,000 people. Many said they had been banned from leaving their villages as authorities race to contain the epidemic.

    Lau’s business had already been hurt by the 25% tariff on aluminum products the U.S. imposed in its tit-for-tat trade war with China. Now he worries the production constraints will give American customers another reason to cancel orders and switch to Southeast Asian suppliers. The virus is making a bad situation “worse,” he said.

    Lau is not alone: this same double blow is hitting small and midsize enterprises across China, prompting a growing chorus of calls for the government to step in and offer lifelines. The stakes could not be higher: These smaller employers account for 99.8% of registered companies in China and employ 79.4% of workers, according to the latest official statistics. They contribute more than 60% of gross domestic product and, for the government, more than 50% of tax revenue. In short: they are the beating heart of China’s economy.

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    Companies like Lau’s that have resumed some production are the lucky ones. Many factories and other businesses remain completely stalled due to the virus. Many owners have no other choice but pray that things return to normal before they careen off a financial cliff.

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    Chinese street vendor transacting at more than an arm’s length basis.

    And here is the stark reality of China’s T-minus 3 months countdown: 85% of 1,506 SMEs surveyed in early February said they expect to run out of cash within three months, according to a report by Tsinghua University and Peking University. And forget about profits for the foreseeable future: one-third of the respondents said the outbreak is likely to cut into their full-year revenue by more than 50%, according to the Nikkei.

    “Most SMEs in China rely on operating revenue and they have fewer sources for funding” than large companies and state-owned enterprises, said Zhu Wuxiang, a professor at Tsinghua University’s School of Economics and Management and a lead author of the report.

    The problem with sequential supply chains is that these also apply to the transfer of liquidity: employers need to pay landlords, workers, suppliers and creditors – regardless of whether they can regain full production capacity anytime soon. Any abrupt and lasting delays will wreak havoc on China’s economic ecosystem.

    “The longer the epidemic lasts, the larger the cash gap drain will be,” Zhu said, adding that companies affected by the trade war face a greater danger of bankruptcy because many are already heavily indebted.  “Self-rescue will not be enough. The government will need to lend help.”

    So where are we nearly two months after the epidemic started? Wwll, as of last Monday, only about 25% of people had returned to work in China’s tier-one cities, according to an estimate by Japanese brokerage Nomura, based on data from China’s Baidu. By the same time last year, 93% were back on the job.

    And making matters worse, as we first noted several weeks ago, local governments around the country face a daunting question of whether to focus on staving off the virus or encourage factory reopenings, as the following tweet perfectly captures.

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    As long as the national logistics network “is still in shambles,” Nomura’s chief China economist, Lu Ting said, there might be little to gain from rushing restarts, whereas “the cost of a rebound in infections might be quite high.” He expects economic activity to pick up again in a couple of months, although the longer Beijing fails to confidently put an end to the pandemic, the longer it will take for activity to return to normal. Meanwhile the 3 month countdown clock is ticking…

    Don’t tell that to Zhou Dewen, the chairman of the Small and Medium Business Development Association in the city of Wenzhou, who knows this and agrees that this crisis is worse than SARS. Far, far worse. In fact, he said, it is “the most severe” of any crisis in the 40 years since China embarked on major economic reforms. He sees not a double but a “triple whammy,” factoring in the economic slowdown the country was experiencing even before the trade conflict and the virus.

    Wenzhou, on the coast of Zhejiang Province, was the first city outside Hubei put into full lockdown in an attempt to stop the pathogen. As of last week, Zhou said, only factories that produce medical supplies had been allowed to resume work.

    “What entrepreneurs need is confidence,” Zhou said. “But first they need to survive.” He is hoping the government will offer fiscal support and tax breaks to buy more time for small businesses. Some local governments have already responded to such pleas by waiving electric bills and delaying taxes, social security payments and loans. But for some businesses, such relief measures are little consolation.

    Worse, last Sunday the communist party’s mouthpiece, the Global Times, suggested that instead of waiting for fiscal bailouts, Beijing will have no choice but to cut spending and unleash austerity, a move that would have catastrophic consequences for China.  But even if Beijing does ease fiscally, it is unclear just what it can do short of printing money and handing it out to everyone. “A tax reduction doesn’t help if you don’t even have income,” said Zhu, who must somehow scrape together around 700,000 yuan ($100,000) for rent and the salaries of about 40 employees.

    Zhu reckons her company will lose about 3 million yuan in profit over the two months. Besides the postponements, couples that were looking at wedding options before the outbreak have put their planning on hold. There is little room, it seems, to think about love in the time of the coronavirus.

    “This is the most difficult time I have ever experienced” after 11 years of running the company, Zhu said. The worst part might be the uncertainty: She has no idea when the authorities might lift the ban or whether she can make it that long. “All of this is unknown to us,” Zhu said.

    She is not alone: Wu Hai, owner of Mei KTV, a chain of 100 Karaoke bars across China, took to the nation’s premier outlet of discontent, social media platform WeChat, to voice his despair. KTV’s bars have been closed by the government because of the virus, choking off its cash flow. The special loans from the authorities will be of little help and no bank will provide a loan without enough collateral and cash flow, he said on his official WeChat account earlier this month. On WeChat , Wu gave himself two months before he has to shutter his business.

    * * *

    It’s not just Japan’s flagship financial publication and owner of the Financial Times, the Nikkei, that is dramatically changing the narrative away from “all shall be well.” In its headline article today, Bloomberg writes that “Millions of Chinese Firms Face Collapse If Banks Don’t Act Fast” and described the plight of Brigita, a director at one of China’s largest car dealers, who is also running out of options. Her firm’s 100 outlets have been closed for about a month because of the coronavirus, cash reserves are dwindling and banks are reluctant to extend deadlines on billions of yuan in debt coming due over the next few months. There are also other creditors to think about.

    “If we can’t pay back the bonds, it will be very, very bad,” said Brigita, whose company has 10,000 employees and sells mid- to high-end car brands such as BMWs. She asked that only her first name be used and that her firm not be identified because she isn’t authorized to speak to the press. With much of China’s economy still idled as authorities try to contain an epidemic that has infected more than 75,000 people, millions of companies across the country are in a race against the clock to stay afloat.

    The irony, of course, is that all this is happening even as China has in fact eased dramatically in recent weeks, from cutting rates, to engaging in a barrage of mini stimulus measures, to injecting massive amounts of liquidity, to cutting taxes, to supporting virus-stricken companies…

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    … to flooding the economy with a record 5 trilion in loans and shadow debt in the last month.

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    Yet while China’s government has cut interest rates, ordered banks to boost lending and loosened criteria for companies to restart operations, many of the nation’s private businesses say they’ve been unable to access the funding they need to meet upcoming deadlines for debt and salary payments. Without more financial support or a sudden rebound in China’s economy, some may have to shut for good.

    “If China fails to contain the virus in the first quarter, I expect a vast number of small businesses would go under,” said Lv Changshun, an analyst at Beijing Zhonghe Yingtai Management Consultant company.

    Said otherwise, unless China reboots its economy, it faces an economic shock the likes of which it has never seen before. Yet it can’t reboot the economy unless it truly stops the viral pandemic, something it will never be able to do if it lies to the population that the pandemic is almost over in hopes of forcing people to get back to work. Hence the most diabolic Catch 22 for China’s social and economic system, because whereas until now China could easily lie its way out of any problem, in this case lying will only make the underlying (viral pandemic) problem worse as sick people return to work, only to infect even more co-workers, forcing even more businesses to be quarantined.

    Some, like Bloomberg, blame the banks.

    As a group, Chinese banks had offered about 254 billion yuan in loans related to the containment effort as of Feb. 9, according to the banking industry association, with foreign lenders such as Citigroup Inc. also lowering rates. To put that into perspective, China’s small businesses typically face interest payments on about 36.9 trillion yuan of loans every quarter.

    In an emailed response to questions from Bloomberg News, ICBC said it has allocated 5.4 billion yuan ($770 million) to help companies fight the virus. “We approve qualified small businesses’ loan applications as soon as they arrive,” the bank said

    Alas, it is not that simple: as we explained two weeks ago in “China’s Banks Face $6 Trillion Coronavirus Cataclysm If Epidemic Is Not Contained Soon“, China’s banks are rapidly retrenching well-aware that they face an explosion in bad debt as the bulk of Chinese companies face collapse. As such, it makes little sense for them to throw good money after bad, and instead most are hunkering down in anticipation of the coming shock. 

    Indeed, as even Bloomberg concedes, banks are hardly any better off themselves: “Many are under-capitalized and on the ropes after two years of record debt defaults. Rating firm S&P Global has estimated that a prolonged emergency could cause the banking system’s bad loan ratio to more than triple to about 6.3%, amounting to an increase of 5.6 trillion yuan.”

    The bottom line is that for both companies and their bank lenders (and sources of potential rescue financing), there is one commodity in very short supply: trust. Trust that the counterparty will do the right thing; trust that the government will treat everyone fairly instead of just bailing out a handful of connected politicians. Trust, which in China in general has been lacking for years, as the formerly communist country succumbed to crony hypercapitalism with Chinese characteristics, one in which knowing who to bribe and who to lie to meant the difference between success and failure. Trust was never cultivated. And now that lack of trust is about to cost China dearly.

    In any case, the lack of far more funding means that China’s smaller businesses whose revenue have suddenly collapsed, have just weeks if not days of liquidity left. Brigita, whose firm owes money to dozens of banks, said she has so far only reached an agreement with a handful to extend payment deadlines by two months. For now, the company is still paying salaries. But those will stop too.

    And that’s when the real crisis begins as hundreds of millions of workers suddenly find themselves unemployed.

    For some the crisis has already begun. Wang Qiang, a 23-year-old migrant worker, has been unable to find work in Shenzhen after three weeks of searching. On top of the limited factory job openings, the Nikkei notes that he faces another major obstacle: his identification labels him a native of Hubei.

    His home province, where the virus originated, accounts for the vast majority of the 74,000-plus mainland infections and most of the deaths. “The labor dispatch companies told me that the factories don’t want people from Hubei,” he said. The fact that he did not go home for the Lunar New Year holidays seems to make no difference.

    Wang spends his nights sleeping on the floor of an uncompleted building. “I’ll wait and see if the situation gets better when companies restart work on Feb. 24.”

    In a few short hours Wang will be greatly disappointed. He won’t be the last one, however, and if China’s doesn’t find some miraculous solution to the current coronavirus crisis, in two months China will face a financial, economic and social cataclysm the likes of which it has never seen in its modern history.


    Tyler Durden

    Sun, 02/23/2020 – 19:44

  • World's Biggest Oil Hedge Fund Plunges 8% In January Following Two Years Of Losses
    World’s Biggest Oil Hedge Fund Plunges 8% In January Following Two Years Of Losses

    Back in 2008 Forbes Magazine placed Pierre Andurand in its list of the top 20 highest-earning hedge-fund managers. That was the year after the French commodity trader co-founded the hedge-fund BlueGold with $300 million AUM. In June of 2008, just before oil crashed, BlueGold’s returns were described by the New York Post as “eye-popping” and “monstrous”. although it was a very different story just a few months later when oil plunged from $145 to $40. In any case, riding the dramatic recovery in the price of oil from 2009 to 2011 helped BlueGold cement its position as one of the largest oil-focused hedge funds, with AUM hitting $2.4 billion after returning 210% in 2008, 55% in 2009, 13% in 2010, and -34% in 2011.

    Then, after BlueGold shuttered in April 2012, Andurand launched a new hedge fund: Andurand Capital, which once again invested mostly in oil but also has a secondary focus on other commodities such as metals and as of May 2018, the firm managed $1.2bn in assets.

    And while Andurand timed the 2014 oil crash perfectly, returning 38% the year when the near OPEC-breakup sent oil plunging from above $100 to $30, it has been a challenging time for the commodity investor who turned bullish on oil in 2016, only to suffer a very choppy oil market for the past several years. So choppy, in fact, that after two years of losses, Andurand suffered another dramatic loss in January, when oil prices once again tumbled, this time on fears the coronavirus was hurting global economic growth, which in turn hit demand for oil and roiled global commodity markets.

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    The furious January drop was so unexpected that the Andurand Commodities Fund, dubbed by Bloomberg as “one of the oil market’s last remaining hedge funds”, plunged 8.4% last month, according to Bloomberg. The loss was the fund’s biggest monthly decline since October 2018 when it plunged 21% as global stocks swooned amid fears the Fed was hiking rates into a recession. Last month’s loss followed two prior painful years for Andurand who was down 7.1% in 2019 and 20% a year earlier.

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    So is another name for “brilliant hedge fund investor” just “that guy who uses a ton of leverage to boost his beta” and picked the right side of the coin toss? What about picking the wrong side for three years in a row? If so, one wonders if an even better description for someone like Andurand is just “lucky”, something has has not been for the past three years when he desperately hoped that oil prices would skyrocket higher even as China’s economic slowdown meant that oil demand would suffer so much even OPEC now agrees.

    As Bloomberg notes, oil had its worst start to a year since 1991 on concern the spread of the coronavirus will curb demand in China for energy. Brent fell 16% in January as China, the world’s largest oil importer, locked down its cities in a bid to prevent the spread of the virus.

    According to various sources from Goldman to commodities trading giant Vitol, the market is facing a 200 million-barrel demand loss in the first quarter, culminating in a 4 million-barrels-a-day decrease in China currently as the virus hits economic activity and restricts travel.


    Tyler Durden

    Sun, 02/23/2020 – 18:55

  • Syria Stands As A Mega-Embarrassment For America
    Syria Stands As A Mega-Embarrassment For America

    Authored by Bruce Wilds via Advancing Time blog,

    For a long time, America has tried to ignore and distance itself from its role in making Syria the disaster it is today. Syria stands as a mega-embarrassment that shines a spotlight on America’s failed foreign policy. To say President Obama blew it is an understatement. His inexperience took us down a rabbit hole with each turn revealing more ugliness than the one before. Both Obama and Trump pledged to reduce America’s role in Afghanistan and Iraq but it has proven easier said than done, it has also had massive far-reaching ramifications.

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    Aleppo Is Just One Of The Many Cities Destroyed

    By reassuring and almost encouraging the people of Syria to rise up and overthrow their brutal leader Obama started a series of events that has taken countless lives and destroyed millions of others. Three of the most damaging developments flowing from this are the development of ISIS, the flow of millions of refugees into Europe, and the bombing and destruction of cities and innocent civilians.

     Continued violence in the region over the last decade has spurred the destabilizing mass migration of millions of people from the area.

    Many people do not realize the formation of ISIS is rooted in this mess and flowed out of America’s meddling. A failed attempt to build an army to fight Syrian President Bashar al-Assad backfired.  A report published by Reuters claimed that 200 men were trained and that over 1200 were to be added in a plan to prepare to free Syria from the rule of President Bashar but General Ibrahim al-Douri. who had been on the US most-wanted list since the second Gulf War took over control. This left the group with a problematic leader and a huge war chest at his disposal. Most of the money had come from US allies, including Kuwait, Qatar, and Saudi Arabia, all are Sunni-based countries that originally supported ISIS.

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    The Middle East Is Ready To Kill

    For years, day after day, week after week, month after month, the American people have busied themselves with ignoring the Pandora’s box of misery Obama opened and unleashed is his arrogance. Please don’t take this as an Obama bashing, he didn’t do it alone. The same old group of clowns that have infected American foreign policy for years weighed in and helped bring us to where we are today. America simply can’t mind its own business.

    While it could be argued a great deal of this is a continuation of President Bush’s folly, anyone making such a case should concede that Obama widened the conflict destabilizing the situation even more. In 2011, he and then-Secretary of State Hillary Clinton decided to undertake a “military intervention ” in Libya. Years later in a 2016 Fox interview, Obama said the handling of the military intervention in Libya was his “worst mistake” Today, oil-rich Libya is a violent mess split between rival governments, each backed by an array of foreign countries jockeying for influence and control of Libya’s resources. According to a statement from the UN, the failed country is continuing its long efforts to reach a lasting cease-fire. 

    Looking back at President Obama’s legacy in early 2017, The Guardian reported that in 2016 alone, the Obama administration dropped at least 26,171 bombs. Most of these air attacks were in Syria and Iraq but US bombs were also dropped in Afghanistan, Libya, Yemen, Somalia, and Pakistan. All seven of these countries have populations where a majority of the people are Muslim. as for the numbers of civilians killed by these bombs it could be in the thousands. We will never know because both the administration and mainstream media remained nearly silent about the civilian toll of the administration’s failed interventions.

    Returning to the issue of Syria, currently, around a million Syrians have their backs against the wall in the northern Syrian province of Idlib. The UN Office for the Coordination of Humanitarian Affairs reports the number of civilians displaced since December 1 at 700,000. These civilians are trapped, the population is caught under the bombs of a three-way war which now involves the Syrian-Russian alliance fighting Turkey, as well as Turkish proxy jihadists as well as terror group Hayat Tahrir al-Sham.

    The Syrian and Russian armies are bombing these people while Turkey refuses to let them cross the border partly because once there they become Turkey’s problem. Adding to the problem is that the European Union has signaled they don’t want them either. The situation has degraded into an almost bizarre state where America and the Trump administration are backing Turkey and its President Tayyip Erdoğan. This is definitely not a marriage made in heaven. Over the last few years, Turkey has bashed the Kurds and played Russia against America while constantly leaning on Greece and the Euro-zone.

    People Have Fled To Horrible Camps

    Those that have fled the fighting are suffering horrible conditions. A YouTube video is linked to the picture to the right. Clicking on the picture brings up drone footage showing the horrible conditions in a refugee camp covered in snow. Snow blankets the countryside while mothers and their children live in flimsy tents without heat or enough to eat.

    Living in the mud, cold and hungry without proper sanitation is far from ideal. The children have no real schools and people have little to do except to suffer. To make matters worse the men have little or no work or any way to make money. Life in the refugee camps is a case of just trying to survive until things get better. It is important to remember most of these were happy middle-class people simply wanting to go about their lives before we stirred the pot.

    I started writing about Syria back in 2012. At the time I predicted the country had passed the tipping point and was facing a civil war. That was at a time forces were lining up to supply weapons to both sides of the Syrian conflict. This fueled the fire and turned the Syrian people into pawns in a very dangerous and deadly game. As in Libya, a parade of foreign countries jockeying for influence and control have poured weapons and fighters into the area and it is the people of the region that are paying the price.

    Was their government perfect? No, but they were not living under the conditions under which they are currently forced to exist. To make matters worse the vice is expected to tighten. Syria is only one example of how meddling in the affairs of other countries has consequences. Unfortunately, America’s history of intruding in the affairs of others has been widespread. To say these people face a bleak future is most likely an understatement because the world is doing little to help them. It could be said that with friends like us these counties don’t need more enemies.


    Tyler Durden

    Sun, 02/23/2020 – 18:30

  • Futures Plunge, Gold Soars As Covid-19 Contagion Craters Complacency
    Futures Plunge, Gold Soars As Covid-19 Contagion Craters Complacency

    After a weekend in which attention is now firmly focused on the accelerating spread of the coronavirus outside of China (whose epidemic numbers have become a bigger joke than the country’s GDP), with Italy now a supercluster of new cases that has sealed off Northern Italy and threatens to shut down Schengen…

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    …traders are back to their desks and for once, it appears they are realizing that central bankers can’t print their way out of this particular pandemic mess.

    US equity futures are accelerating their catch down to reality…

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    Dow Futures are down 400 points…

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    Spot gold is up over 2%, breaking $1680…

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    WTI Crude is also plunging, back to a $51 handle…

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    And after JPY’s recent collapse, Nikkei futures are down 500 points in early trading…

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    And therefore, as always, The BoJ is out with its standard boiler-plate  – we’ll puke more money and buy more of everything – plan…

    The Bank of Japan will be fully prepared to take necessary action to mitigate the impact of the coronavirus on the world’s third-largest economy, its Governor Haruhiko Kuroda said. Kuroda said there was no major change to the BOJ’s projection that Japan’s economy would keep recovering moderately thanks to an expected rebound in global growth around mid-year.

    He also repeated the view that, while the central bank stands ready to ease monetary policy further “without hesitation”, it saw no immediate need to act.

    But Kuroda said the BOJ would scrutinize developments on the virus outbreak carefully, since the damage to Japan’s economy could be profound if the epidemic is prolonged and disrupts supply chains.

    First of all, just how is printing money going to fix the virus; and second, what is this “moderate recovery” he is talking about after the -1.6% GDP print?!

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    Finally, we do note that Japan is closed for the Emperor’s Birthday celebration so markets are especially illiquid… and cash bond trading remains closed. However, 10Y bond futures are surging, implying a  1.41% yield…

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    Nevertheless, it appears, as we noted above, investors are starting to wake up to the fact that central bankers can’t print vaccines… and you can only swallow so many blue pills before the red one becomes too tempting.

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    Time for a phone call…

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    Tyler Durden

    Sun, 02/23/2020 – 18:28

  • China's 'Fake' Coronavirus Numbers Exposed: Doctor In Hunan Confirms 50 New Cases, Only One Reported
    China’s ‘Fake’ Coronavirus Numbers Exposed: Doctor In Hunan Confirms 50 New Cases, Only One Reported

    In one of many shocking videos circulating on Twitter, a recent clip of a doctor in Hunan that was widely shared by credible journalists covering the outbreak has caught our attention because it supports our theory – which has become increasingly widely adopted among the western press – that Chinese health officials are seriously undercounting the number of cases and deaths.

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    As the Washington Post wrote in a piece published earlier this week: “Chinese leaders and state media strike a coordinated note this week about the government’s ability to contain the outbreak, inconsistencies and sudden changes in official data are leaving experts — and journalists — struggling to plot meaningful trends, or even place any confidence in the figures coming from government.”

    The WaPo reporters pointed to a clear case of manipulation where the authorities suppressed the true number of cases.

    Authorities in Hubei province reported good news Thursday: There were only 349 new coronavirus cases the previous day, the lowest tally in weeks.

    The bad – and puzzling – news? Wuhan, the capital of Hubei, reported 615 new cases all by itself.

    Hubei authorities have changed their criteria for counting cases three times over the past week or so.

    Hubei officials explained that they deducted cases that have not been confirmed through genetic tests from their total reported number of cases. Since this mistake was very, very public, we also reported on it.

    But we’ve been reporting on this for weeks. The mainstream press in the US has since caught on, as the WaPo post shows. As its reporters claim, though there is no obvious smoking gun, most experts still believe China is underreporting cases based on mathematical algorithms and other methods used to project the rate of infection.

    There is no smoking gun suggesting that Chinese officials fabricate numbers – at least not since late January. But many researchers say the official figures probably underestimate the true numbers because of limited testing capacity and the prevalence of cases with mild or no symptoms. That is why having case numbers collected with consistent methodology would help scholars chart the general contours, if not the precise values, of how the epidemic is unfolding.

    We could go back all the way to the first “shift” in China’s reporting methodology on Feb. 12, when officials reported the first major spike in cases, shaking market confidence in the process, until Beijing axed two senior local officials in one of many obvious scapegoatings by Beijing.

    China’s numbers have consistently kept the fatality rate from the virus at around 2%. But given the exponential rate of spread outside China, and evidence that it acted too late with its quarantine’s to really blunt the outbreak, some suspect that this number, too, will rise once researchers get a fuller picture of what’s happening on the ground.


    Tyler Durden

    Sun, 02/23/2020 – 18:05

  • Obama DHS Whistleblower Found Dead On Side Of California Highway, Police Rule Suicide
    Obama DHS Whistleblower Found Dead On Side Of California Highway, Police Rule Suicide

    Department of Homeland Security (DHS) whistleblower Philip Haney was found dead on the side of a desolate California highway on Friday with a single gunshot would to the head, according to local authorities.

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    Haney’s death has been ruled a suicide by an Amador County coroner, who noted that a firearm was observed next to the 66-year-old, who was found lying next to his vehicle.

    “Upon their arrival, they located and identified 66-year-old Philip Haney, who was deceased and appeared to have suffered a single, self-inflicted gunshot wound. A firearm was located next to Haney and his vehicle. This investigation is active and ongoing. No further details will be released at this time,” reads the report.

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    So, Haney supposedly parked his car on the side of the road and shot himself in the head just after 10 a.m. on Friday. And while his death is clearly suspicious to some, it should be noted that his wife, Francesca, passed away eight months ago in June 2019 following a battle with cancer. The couple had one daughter named Sara, an ordained minister who previously served as the chaplain for the Cobb Detention Center according to Francesca’s Facebook page (via Heavy).

    Haney lived in Plymouth, California – approximately 40 miles east of Sacramento.

    He notably authored “See Something, Say Nothing: A Homeland Security Officer Exposes the Government’s Submission to Jihad,” a scathing criticism of the Obama administration’s handling of radical Islamic terrorism. In 2016, he testified that the Obama administration could have prevented the Pulse nightclub shooting in Orlando, Florida if they had not acted in favor of “political correctness.”

    Haney, who retired in 2015, studied Arabic culture and language while working as a scientist in the Middle East before becoming a founding member of the Department of Homeland Security in 2002 as a Customs & Border Protection (CBP) agriculture officer.

    After serving as an armed CBP officer, he was promoted to its Advanced Targeting Team. He specialized in Islamic theology and the strategy and tactics of the global Islamic movement. –Fox News

    Haney, a founding member of DHS, described his work at the agency like dealing with bugs – saying he “followed the trail and found the nest.”

    News of Haney’s death rocked those who knew him.

    “Somebody I deeply respected and considered a friend Phil Haney – a DHS whistleblower during the Obama Admin was apparently killed yesterday in Southern California,” wrote journalist Sara Carter in a Saturday tweet. “Pray for his family and pray they find the person who murdered him. Still trying to get confirmation on details.”

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    Tyler Durden

    Sun, 02/23/2020 – 17:44

  • The Bogus Big Brother-Big Tech Brawl Over Backdoors
    The Bogus Big Brother-Big Tech Brawl Over Backdoors

    Authored by Bill Blunden via TheAmericanConservative.com,

    The law can already get into your phone anytime. But Apple needs you to think it isn’t helping them…

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    In the wake of this year’s Munich Security Conference, members of the European Union are pushing back against warnings by the United States about networking gear sold by Chinese telecom giant Huawei. American officials have alleged that Huawei can covertly access its equipment through backdoors designed for law enforcement, and voiced concerns about the risk associated with installing hardware that could give the Chinese government the ability to remotely monitor or even disable other nation’s networks.    

    The insistence of countries like Britain and Germany on integrating technology from a police state directly into their digital infrastructure is definitely curious. But it’s not like supply chain subversion hasn’t already transpired on an industrial scale. For example, we know now, thanks to a recent Washington Post report, that during the early days of the Cold War, the Central Intelligence Agency succeeded in secretly compromising encryption technology used by over 120 different countries. For years, American spies were tapping lines and pilfering secrets from all over the globe.  

    Back to 2020. American officials are sounding alarms about Huawei having backdoors, though that hasn’t stopped them from supporting U.S. law enforcement getting their own access to everyone’s data whenever they want. But theirs is a “noble” cause: high ranking members of the political establishment are warning that they won’t be able to protect us against terrorists, drug cartels, and child pornographers unless Silicon Valley allows in American security services. 

    The tech industry has responded by assuming a defiant stance that seems to side with user privacy. Yet history informs us that this Manichean soap opera is not always what it appears to be. Concealed behind the headlines is a choreographed routine in which executives and politicians confront each other across the table while secretly shaking hands underneath.    

    The “Going Dark” Narrative 

    At the core of the matter is encryption technology. This past summer, Attorney General William Barr complained that encryption “allows criminals to operate with impunity, hiding their activities under an impenetrable cloak of secrecy.” Such that the government’s ability to discern illegal conduct online is “going dark.” The Five Eyes intelligence alliance (consisting of the United States, the United Kingdom, Canada, Australia, and New Zealand) publicly proposed weakening cryptographic protocols so they could engage in “lawful interception” of digital communications.

    Upping the ante, in December, Senator Lindsey Graham issued an ultimatum to business leaders at a Judiciary Committee hearing. He asserted that “this time next year, if you haven’t found a way that you can live with it, we will impose our will on you.” Graham has begun drafting a bill to this end.  

    It goes without saying that the tech industry opposes this strategy of government-imposed backdoors. That’s mainly because security boosts brand, and that in turn boosts sales. Not to mention that standing up to the big bad government provides street cred and scads of free publicity. When Barr presented his case for mandated backdoors, Facebook replied that his scheme “would be a gift to criminals, hackers and repressive regimes.” Apple likewise protested that “Backdoors can also be exploited by those who threaten our national security and the data security of our customers…encryption is vital to protecting our country and our users’ data.”

    Of course, there’s something missing from this debate. Something that merits careful attention.  

    Strong Crypto as a Speed Bump  

    It just so happens that strong encryption isn’t the cure-all that it’s cracked up to be. This is an inconvenient truth that’s confirmed on a daily basis. For example, in mid-October of 2019, the Department of Justice announced the takedown of a massive online repository of child pornography. The portal resided on the dark net, leveraging both the Tor anonymity suite as well as Bitcoin to conceal the identities of its user base. Yet in spite of these countermeasures, federal agents unearthed terabytes of evidence. The ensuing crackdown led to charges against more than 300 people. 

    And this isn’t the first time the feds succeeded in collectively unmasking large swathes of presumably nameless users. In 2015, the Federal Bureau of Investigation launched Operation Pacifier, which used a “court-approved network investigative technique” (e.g. hacking) to track down and arrest over 350 members of yet another website that was hosting child pornography.  

    Suddenly the dark net doesn’t seem so dark. 

    The public record indicates that there’s a whole industry devoted to sidestepping device encryption, catering primarily to the intelligence community. Companies like Israel’s NSO Group have garnered substantial media attention. The NSO Group has openly boasted that “it developed a hacking tool that can break into just about any smartphone on Earth.” 

    Please rewind and ponder the implications of that previous sentence. Then perhaps reassess the risk associated with allegedly secure messaging software like WhatsApp or seemingly impregnable devices like the iPhone. Glenn Greenwald himself may be having second thoughts after Brazilian security services intercepted messages he exchanged with hackers.  

    There are countless vendors in this space, companies like Hacking Team and Gamma International whose surveillance tools have garnered media attention. Wade around in this shadowy milieu long enough and the underlying subtext becomes clear: encrypt confidential data all you want; it doesn’t matter if someone can hack your computer and make off with the data inside.   

    Backdoors and Backroom Deals 

    These spyware companies thrive because the backdoors that everyone is arguing about are already out there, wide open in the field. They exist in the form of plausibly deniable technical flaws, aka bugs. These bugs are legion because market incentives favor low costs over security. And also because industry titans like RSA have been known to secretly cooperate with spy chiefs while vocally rebuffing their agendas in the press. 

    During the crypto wars of the 1990s, the president of RSA proudly announced that “for almost 10 years, I’ve been going toe to toe with these people at Fort Meade. The success of this company is the worst thing that can happen to them. To them, we’re the real enemy, we’re the real target.” Pay no heed to the backdoor that they planted for the NSA.   

    Sound familiar? That’s the kayfabe in action. Feud in public and fraternize in private. Coquettishly wink at spies while making noise for rubes. 

    Apple has likewise shown a propensity for quiet cooperation. A couple of years ago, they decided against encrypted iCloud backups after the FBI balked. And when the FBI initially requested help accessing the iPhone used by one of the San Bernardino shooters, Apple was perfectly happy to help them so long as the FBI quietly submitted the request under seal. Only after the request went public did Tim Cook adopt a more antagonistic posture. For users in Russia, Apple discreetly adjusted its maps and weather apps so that Crimea appears to be a part of Russian territory.  

    Pity the Overworked Bureaucrat

    This obviously raises a question. With the abundant supply of commercial tools and the ongoing success against dark nets, why are officials so keen to paint their investigative programs as “going dark”? 

    One answer pivots on the nature of bureaucracies, a world where budgets are fixed and overworked apparatchiks are under pressure from above to get results with limited resources. In a nutshell, state-sanctioned backdoors are convenient. They don’t require the resources necessary to launch and maintain an extended hacking campaign. Clandestine cyber ops can involve multiple teams of technical specialists working around the clock in conjunction with field officers and support staff. Faced with a towering case load and impatient bosses, the typical civil servant will understandably opt for whatever solution makes their job easier. 

    To use an analogy, why spend hours to break into a bank vault, lugging around heavy equipment and making a huge mess, when you can nonchalantly walk up and swing it open with the factory-enabled bypass combination? 

    Legally mandated cryptographic backdoors are the path of least resistance, a surveillance geodesic compliments of the justice system. While you can’t necessarily fault government officials for wanting to take the easy route, it’s important to recognize when they’re wielding imperfect metaphors to justify their demands. Thanks to clandestine arrangements, perpetually buggy code, and cheap gear, American security services aren’t going dark anytime soon. 


    Tyler Durden

    Sun, 02/23/2020 – 17:40

Digest powered by RSS Digest

Feb 23

Today’s News 23rd February 2020

  • Where Have You Gone, Smedley Butler? The Last General To Criticize US Imperialism
    Where Have You Gone, Smedley Butler? The Last General To Criticize US Imperialism

    Authored by Danny Sjursen via TomDispatch.com,

    There once lived an odd little man – five feet nine inches tall and barely 140 pounds sopping wet – who rocked the lecture circuit and the nation itself. For all but a few activist insiders and scholars, U.S. Marine Corps Major General Smedley Darlington Butler is now lost to history. Yet more than a century ago, this strange contradiction of a man would become a national war hero, celebrated in pulp adventure novels, and then, 30 years later, as one of this country’s most prominent antiwar and anti-imperialist dissidents.

    Raised in West Chester, Pennsylvania, and educated in Quaker (pacifist) schools, the son of an influential congressman, he would end up serving in nearly all of America’s “Banana Wars” from 1898 to 1931. Wounded in combat and a rare recipient of two Congressional Medals of Honor, he would retire as the youngest, most decorated major general in the Marines.

    A teenage officer and a certified hero during an international intervention in the Chinese Boxer Rebellion of 1900, he would later become a constabulary leader of the Haitian gendarme, the police chief of Philadelphia (while on an approved absence from the military), and a proponent of Marine Corps football. In more standard fashion, he would serve in battle as well as in what might today be labeled peacekeeping, counterinsurgency, and advise-and-assist missions in Cuba, China, the Philippines, Panama, Nicaragua, Mexico, Haiti, France, and China (again). While he showed early signs of skepticism about some of those imperial campaigns or, as they were sardonically called by critics at the time, “Dollar Diplomacy” operations — that is, military campaigns waged on behalf of U.S. corporate business interests — until he retired he remained the prototypical loyal Marine.

    But after retirement, Smedley Butler changed his tune. He began to blast the imperialist foreign policy and interventionist bullying in which he’d only recently played such a prominent part. Eventually, in 1935 during the Great Depression, in what became a classic passage in his memoir, which he titled “War Is a Racket,” he wrote:

    “I spent thirty-three years and four months in active military service… And during that period, I spent most of my time being a high class muscle-man for Big Business, for Wall Street, and for the Bankers.”

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    Seemingly overnight, the famous war hero transformed himself into an equally acclaimed antiwar speaker and activist in a politically turbulent era. Those were, admittedly, uncommonly anti-interventionist years, in which veterans and politicians alike promoted what (for America, at least) had been fringe ideas. This was, after all, the height of what later pro-war interventionists would pejoratively label American “isolationism.”

    Nonetheless, Butler was unique (for that moment and certainly for our own) in his unapologetic amenability to left-wing domestic politics and materialist critiques of American militarism. In the last years of his life, he would face increasing criticism from his former admirer, President Franklin D. Roosevelt, the military establishment, and the interventionist press. This was particularly true after Adolf Hitler’s Nazi Germany invaded Poland and later France. Given the severity of the Nazi threat to mankind, hindsight undoubtedly proved Butler’s virulent opposition to U.S. intervention in World War II wrong.

    Nevertheless, the long-term erasure of his decade of antiwar and anti-imperialist activism and the assumption that all his assertions were irrelevant has proven historically deeply misguided. In the wake of America’s brief but bloody entry into the First World War, the skepticism of Butler (and a significant part of an entire generation of veterans) about intervention in a new European bloodbath should have been understandable. Above all, however, his critique of American militarism of an earlier imperial era in the Pacific and in Latin America remains prescient and all too timely today, especially coming as it did from one of the most decorated and high-ranking general officers of his time. (In the era of the never-ending war on terror, such a phenomenon is quite literally inconceivable.)

    Smedley Butler’s Marine Corps and the military of his day was, in certain ways, a different sort of organization than today’s highly professionalized armed forces. History rarely repeats itself, not in a literal sense anyway. Still, there are some disturbing similarities between the careers of Butler and today’s generation of forever-war fighters. All of them served repeated tours of duty in (mostly) unsanctioned wars around the world. Butler’s conflicts may have stretched west from Haiti across the oceans to China, whereas today’s generals mostly lead missions from West Africa east to Central Asia, but both sets of conflicts seemed perpetual in their day and were motivated by barely concealed economic and imperial interests.

    Nonetheless, whereas this country’s imperial campaigns of the first third of the twentieth century generated a Smedley Butler, the hyper-interventionism of the first decades of this century hasn’t produced a single even faintly comparable figure. Not one. Zero. Zilch. Why that is matters and illustrates much about the U.S. military establishment and contemporary national culture, none of it particularly encouraging.

    Why No Antiwar Generals

    When Smedley Butler retired in 1931, he was one of three Marine Corps major generals holding a rank just below that of only the Marine commandant and the Army chief of staff. Today, with about 900 generals and admirals currently serving on active duty, including 24 major generals in the Marine Corps alone, and with scores of flag officers retiring annually, not a single one has offered genuine public opposition to almost 19 years worth of ill-advised, remarkably unsuccessful American wars. As for the most senior officers, the 40 four-star generals and admirals whose vocal antimilitarism might make the biggest splash, there are more of them today than there were even at the height of the Vietnam War, although the active military is now about half the size it was then. Adulated as many of them may be, however, not one qualifies as a public critic of today’s failing wars.

    Instead, the principal patriotic dissent against those terror wars has come from retired colonels, lieutenant colonels, and occasionally more junior officers (like me), as well as enlisted service members. Not that there are many of us to speak of either. I consider it disturbing (and so should you) that I personally know just about every one of the retired military figures who has spoken out against America’s forever wars.

    The big three are Secretary of State Colin Powell’s former chief of staff, retired Colonel Lawrence Wilkerson; Vietnam veteran and onetime West Point history instructor, retired Colonel Andrew Bacevich; and Iraq veteran and Afghan War whistleblower, retired Lieutenant Colonel Danny Davis. All three have proven to be genuine public servants, poignant voices, and — on some level — cherished personal mentors. For better or worse, however, none carry the potential clout of a retired senior theater commander or prominent four-star general offering the same critiques.

    Something must account for veteran dissenters topping out at the level of colonel. Obviously, there are personal reasons why individual officers chose early retirement or didn’t make general or admiral. Still, the system for selecting flag officers should raise at least a few questions when it comes to the lack of antiwar voices among retired commanders. In fact, a selection committee of top generals and admirals is appointed each year to choose the next colonels to earn their first star. And perhaps you won’t be surprised to learn that, according to numerous reports, “the members of this board are inclined, if not explicitly motivated, to seek candidates in their own image — officers whose careers look like theirs.” At a minimal level, such a system is hardly built to foster free thinkers, no less breed potential dissidents.

    Consider it an irony of sorts that this system first received criticism in our era of forever wars when General David Petraeus, then commanding the highly publicized “surge” in Iraq, had to leave that theater of war in 2007 to serve as the chair of that selection committee. The reason: he wanted to ensure that a twice passed-over colonel, a protégé of his — future Trump National Security Advisor H.R. McMaster — earned his star.

    Mainstream national security analysts reported on this affair at the time as if it were a major scandal, since most of them were convinced that Petraeus and his vaunted counterinsurgency or “COINdinista” protégés and their “new” war-fighting doctrine had the magic touch that would turn around the failing wars in Iraq and Afghanistan. In fact, Petraeus tried to apply those very tactics twice — once in each country — as did acolytes of his later, and you know the results of that.

    But here’s the point: it took an eleventh-hour intervention by America’s most acclaimed general of that moment to get new stars handed out to prominent colonels who had, until then, been stonewalled by Cold War-bred flag officers because they were promoting different (but also strangely familiar) tactics in this country’s wars. Imagine, then, how likely it would be for such a leadership system to produce genuine dissenters with stars of any serious sort, no less a crew of future Smedley Butlers.

    At the roots of this system lay the obsession of the American officer corps with “professionalization” after the Vietnam War debacle. This first manifested itself in a decision to ditch the citizen-soldier tradition, end the draft, and create an “all-volunteer force.” The elimination of conscription, as predicted by critics at the time, created an ever-growing civil-military divide, even as it increased public apathy regarding America’s wars by erasing whatever “skin in the game” most citizens had.

    More than just helping to squelch civilian antiwar activism, though, the professionalization of the military, and of the officer corps in particular, ensured that any future Smedley Butlers would be left in the dust (or in retirement at the level of lieutenant colonel or colonel) by a system geared to producing faux warrior-monks. Typical of such figures is current chairman of the Joint Chiefs of Staff Army General Mark Milley. He may speak gruffly and look like a man with a head of his own, but typically he’s turned out to be just another yes-man for another war-power-hungry president.

    One group of generals, however, reportedly now does have it out for President Trump — but not because they’re opposed to endless war. Rather, they reportedly think that The Donald doesn’t “listen enough to military advice” on, you know, how to wage war forever and a day.

    What Would Smedley Butler Think Today?

    In his years of retirement, Smedley Butler regularly focused on the economic component of America’s imperial war policies. He saw clearly that the conflicts he had fought in, the elections he had helped rig, the coups he had supported, and the constabularies he had formed and empowered in faraway lands had all served the interests of U.S. corporate investors. Though less overtly the case today, this still remains a reality in America’s post-9/11 conflicts, even on occasion embarrassingly so (as when the Iraqi ministry of oil was essentially the only public building protected by American troops as looters tore apart the Iraqi capital, Baghdad, in the post-invasion chaos of April 2003). Mostly, however, such influence plays out far more subtly than that, both abroad and here at home where those wars help maintain the record profits of the top weapons makers of the military-industrial complex.

    That beast, first identified by President Dwight D. Eisenhower, is now on steroids as American commanders in retirement regularly move directly from the military onto the boards of the giant defense contractors, a reality which only contributes to the dearth of Butlers in the military retiree community. For all the corruption of his time, the Pentagon didn’t yet exist and the path from the military to, say, United Fruit Company, Standard Oil, or other typical corporate giants of that moment had yet to be normalized for retiring generals and admirals. Imagine what Butler would have had to say about the modern phenomenon of the “revolving door” in Washington.

    Of course, he served in a very different moment, one in which military funding and troop levels were still contested in Congress. As a longtime critic of capitalist excesses who wrote for leftist publications and supported the Socialist Party candidate in the 1936 presidential elections, Butler would have found today’s nearly trillion-dollar annual defense budgets beyond belief. What the grizzled former Marine long ago identified as a treacherous nexus between warfare and capital “in which the profits are reckoned in dollars and the losses in lives” seems to have reached its natural end point in the twenty-first century. Case in point: the record (and still rising) “defense” spending of the present moment, including — to please a president — the creation of a whole new military service aimed at the full-scale militarization of space.

    Sadly enough, in the age of Trump, as numerous polls demonstrate, the U.S. military is the only public institution Americans still truly trust. Under the circumstances, how useful it would be to have a high-ranking, highly decorated, charismatic retired general in the Butler mold galvanize an apathetic public around those forever wars of ours. Unfortunately, the likelihood of that is practically nil, given the military system of our moment.

    Of course, Butler didn’t exactly end his life triumphantly. In late May 1940, having lost 25 pounds due to illness and exhaustion — and demonized as a leftist, isolationist crank but still maintaining a whirlwind speaking schedule — he checked himself into the Philadelphia Navy Yard Hospital for a “rest.” He died there, probably of some sort of cancer, four weeks later. Working himself to death in his 10-year retirement and second career as a born-again antiwar activist, however, might just have constituted the very best service that the two-time Medal of Honor winner could have given the nation he loved to the very end.

    Someone of his credibility, character, and candor is needed more than ever today. Unfortunately, this military generation is unlikely to produce such a figure. In retirement, Butler himself boldly confessed that, “like all the members of the military profession, I never had a thought of my own until I left the service. My mental faculties remained in suspended animation while I obeyed the orders of higher-ups. This is typical…”

    Today, generals don’t seem to have a thought of their own even in retirement. And more’s the pity…


    Tyler Durden

    Sat, 02/22/2020 – 23:30

  • Nevada Berning: Sanders Wins Nevada Caucuses
    Nevada Berning: Sanders Wins Nevada Caucuses

    Update (23:15): With 27% of precincts reporting, Sanders has retained a 46.6% lead over Biden (22.8), with Pete Buttigieg in third at 14.4%.

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    Sen. Bernie Sanders (I-VT) is projected to win the Nevada caucuses after early reports suggest a landslide victory, according to Fox News, which named Sanders the winner.

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    While just four percent of the results are in, Sanders has 56% of the delegates, followed by Biden at 18.8% and Warren at 8.5%.

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    The closely-watched process began with Nevada Democrats optimistic that they would avoid a repeat of the technical glitches that plagued the caucuses in Iowa. Those fears led the state Democratic Party to decide to rely on traditional reporting by phone, rather than an app made by the same developer that created the app blamed for the debacle in Iowa. It has also scrapped a plan to use a Google Forms app loaded onto iPads. –Fox News

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    “Nevada Democrats have learned important lessons from Iowa, and we’re confident they’re implementing these best practices into their preparations,” said DNC spokeswoman Xochitl Hinojosa. “We’ve deployed staff to help them across the board, from technical assistance to volunteer recruitment.”

    On Saturday, DNC Chairman Tom Perez told Fox News that the party is in “great shape,” adding “We have all of the early vote results distributed to the caucus sites. People are checking now…. I think it’s going to be a really exciting day.”

    This story is developing, check back for updates.

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    Tyler Durden

    Sat, 02/22/2020 – 23:18

  • Visualizing The Cost And Composition Of America's Nuclear Weapons Arsenal
    Visualizing The Cost And Composition Of America’s Nuclear Weapons Arsenal

    The American nuclear weapons arsenal is nowhere near its 1960s peak, but, as Visual Capitalist’s Nick Routley details below, there are still thousands of warheads in the stockpile today.

    The U.S. nuclear program is comprised of a complex network of facilities and weaponry, and of course the actual warheads themselves. Let’s look at the location of warheads, how they’re deployed, and the costs associated with running and refurbishing an aging nuclear program.

    Let’s launch into the data.

    Nuclear Weapons Map

    As of 2019, the U.S. Department of Defense maintained an estimated stockpile of 3,800 nuclear warheads for delivery by more than 800 ballistic missiles and aircraft. Roughly 1,300 warheads are actually deployed, while most of the remaining inventory is either held in reserve (as a hedge against “technical or geopolitical surprises”) or is destined to be dismantled.

    These weapons are thought to be stored across 11 U.S. states, with the vast majority residing in New Mexico, Washington, and Georgia.

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    Source

    Over 1,500 of the warheads in New Mexico are retired and are destined to be dismantled at the Pantex facility in Texas.

    The United States also maintains a small amount of nuclear inventory in and around Europe as well. Turkey’s Incirlik Air Base likely holds the biggest supply of warheads outside the U.S., and a few weapons are also located in storage vaults in Belgium, Italy, Germany, and the Netherlands.

    Deployment Data

    Nuclear warheads, while devastatingly powerful, are nothing without a delivery mechanism. In simple terms, there are three primary methods for actually launching missiles: Silos, bombers, and submarines.

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    The most common deployment of nuclear weapons is under the sea. The U.S. Navy is thought to operate 14 ballistic missile submarines, with each carrying as many as 24 Trident II missiles.

    Missile silos are not as popular as they once were, but the U.S. Air Force still maintains 400 silo-based missiles, and another 50 are kept “warm” in the event of an emergency.

    America’s Nuclear Weapons Budget

    The Congressional Budget Office (CBO) is required to project the 10-year costs of nuclear forces every two years.

    Though much of the program is shrouded in secrecy, the budget below provides an overview of the costs of running America’s nuclear weapons arsenal.

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    Costs in the budget are split between the Department of Energy (DoE) and the Department of Defense (DoD), which handle different parts of the process.

    On one hand, the DoD takes care of the delivery systems for warheads. Those submarines, bombers, and missile silos spread around the country will add up to a projected $249 billion in costs over the next decade. Another large portion of the DoD budget accounts for operational aspects of the program, such as funding facilities, control, and early warning systems.

    On the other hand, the DoE is responsible for building and maintaining the actual warheads themselves. The U.S. stopped producing new warheads in the 1990s, but all that changed last year.

    Back in the Bomb Business

    Generally, we think of nuclear weapons stockpiles as a sunsetting resource, slowly being dismantled; however, since the treaty that ended the arms race collapsed in mid-2019, the flood gates may be opening once again.

    New warheads are reportedly rolling off the production line, and in the beginning of this year, Lockheed Martin was tapped by the U.S. Navy to manufacture low yield submarine-based nuclear missiles.

    The development of lower yield nuclear weapons appears to be a response to efforts by Russia to modernize their arsenal.

    Recent Russian statements […] appear to lower the threshold for Moscow’s first-use of nuclear weapons.

    – Nuclear Posture Review (2018)

    With this new weapons development, the U.S. is aiming to create “tailored response options” to any potential conflict. By eliminating the perceived advantages that adversaries may have, the U.S. is hoping to lower the likelihood of a nuclear conflict.

    Arms control advocates warn that new lower-yield warheads entering production will lower the threshold for a nuclear conflict.

    While advocates and critics of nuclear weapons debate the merits of new weapons, we appear to be entering a new era of weapons proliferation.


    Tyler Durden

    Sat, 02/22/2020 – 23:00

  • Fat Women Are Not A National Priority
    Fat Women Are Not A National Priority

    Authored by Eric Margolis via The Unz Review,

    Good work, Democrats! In the Las Vegas debate, you blasted every target but Donald Trump. Instead of quivering in his Gucci loafers, the man who would be king was left dancing on air.

    The man who should have been king, newcomer Mike Bloomberg, was left looking like a beaten-up cigar store Indian. He had not prepped for the debate and failed to dodge the obvious incoming missile attacks on him launched by a hissing Elizabeth Warren and Pete Buttigieg.

    Many veteran Republicans fear that TV promoter Trump will steamroll Warren, Buttigieg, Biden and Amy Klobuchar. They may be right. Trump had to be delighted by the no-prisoners Democratic debate that bloodied his opponents before he could even get to them. Bloomberg was totally unprepared for the savage attacks launched against him. He looked like a neophyte suffering from camera fright.

    I got a good read on Bloomberg when I had an intimate dinner with him some years ago. Rather than the stiff, unsmiling man we saw on TV in Las Vegas, in real life Bloomberg is clearly brilliant yet understated, charming, and endowed with a sharp sense of humor and quick wit.

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    Bernie Sanders, who has three homes, blasted Bloomberg for being ‘rich.’ This is a big sin to the Democrats who, like Hillary Clinton, pocketed millions in political support from big banks, unions and businesses under the cover of night or via bogus speaking fees and her fake foundation – a scam emulated by Trump.

    The deeply corrupt Democratic National Committee, controlled by Hillary Clinton, rigged the vote that blocked Bernie Sanders during the last election. When news of this scandal emerged, Hillary kicked off the anti-Russian hysteria to divert attention from her chicanery.

    Yes, Bloomberg may be the 9th or 10th richest man in the world. But his net worth comes from ownership of one of our most successful and reliable financial news organizations that he built up from nothing, and that employs important numbers of men and women. The use of Bloomberg terminals saves forests of trees.

    Ignore Elizabeth Warren’s cheap shots about women being called names like ‘horse-faced lesbians’ or ‘fat’ at his firm. Many men speak this way to one-another in casual talk. Women often do the same regarding men. The answer to this is to totally segregate the sexes, as in Saudi Arabia. Trying to whip up a war of the sexes is not going to make angry Elizabeth Warren president. She should stick to her commendable work with banking and voting rights.

    It’s pretty clear after the shootout in Vegas that Joe Biden has used up his last chance. Black voters and unions won’t save him. He looked old and very tired. But not as tired or off the mark as Mike Bloomberg. By contrast Bernie looked old, to be sure, but was full of beans.

    As a foreign affairs specialist, what really dismayed me was that there was only one significant mention of international policy. That’s when the abrasive, loud-mouthed Sen. Amy Klobuchar could not remember the name of the president of Mexico. For God’s sake, she on a senate committee that deals with Mexico.

    While our presidential debate focuses on overweight women and health care, the US and Russia have come terrifyingly close to open war in the Mideast.

    But barely any mention of this in the debates. Trump and his big money men from New York and Las Vegas are trying to push Iran into an air war. The US is seeking to overthrow the governments of Venezuela, Cuba, Syria, and Iran. Clashes between China and the US are a major danger. Former defense chief Sam Nunn warns the US and Russia are closer to a nuclear conflict than any time since the 1960’s Cuban missile crisis. No matter.

    Americans want entertainers for their made-for-TV politicians. Poor, dignified Mr. Bloomberg didn’t know he would face professional actors, not legislators.


    Tyler Durden

    Sat, 02/22/2020 – 22:30

  • Unfriendly Skies: Southwest Airlines Wants You To Call Out Bad Behavior
    Unfriendly Skies: Southwest Airlines Wants You To Call Out Bad Behavior

    Perhaps we can expect a lot more delayed flights and passenger infighting and general craziness over this next year as Southwest airlines has just implemented a controversial new policy. 

    As part of its required pre-flight emergency briefing, Southwest Airlines will now encourage passengers to report any “unwelcome behavior” that occurs to the flight attendants. 

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    Image via CNN

    The policy went into effect January 22, and the statement comes immediately after instructions over operating the oxygen masks. CNN recorded an announcement at Hartsfield-Jackson Atlanta International Airport as saying: “We are here for your comfort and safety. Please report any unwelcome behavior to your flight attendant. Thank you for your attention.”

    Southwest spokesman Brian Parrish told CNN: “This change reflects Southwest’s commitment to ensuring a safe and welcoming environment at all times.” He added that passengers should see the flight attendants as “an approachable, professional resource for reporting any unwelcome behaviors or conduct during a flight.”

    However, in these times of heightened paranoia, there’s a hundred ways this could go wrong, given the hundred different interpretations and thresholds different people have for what’s deemed vaguely as “unwelcome behavior” (won’t share an elbow rest? talking too loud? bad breath? someone merely doesn’t like that there’s a Muslim on board?).

    Recently an American Airlines flight was delayed when a man who boarded wearing a gas mask (and not merely a surgical mask), made neighboring passengers uncomfortable to the point of causing enough of a panic to significantly delay the flight. And in a Southwest Airlines incident which made national news, a dad and his toddler were kicked off a flight because the 2-year old threw a minor tantrum upon boarding. This happened even after the child had calmed down. 

    There have also been multiple instances over the past years of flights canceled or delayed simply because passengers and crew members felt “uncomfortable” upon seeing men wearing Muslim garb on board. 

    The new Southwest Airlines policy appears aimed at preventing in-flight sexual assaults or harassment, which authorities say have been on the rise. According to FBI figures cited by CNN:

    FBI investigations into midair sexual assaults increased by 66% over a four-year period, from fiscal year 2014 to 2017. The bureau reported that it had opened 63 investigations into sexual assault on aircraft in 2017, compared with 57 in 2016, 40 in 2015 and 38 in 2014.

    If notified of an assault or harassment, the airline says its crew members have been given a variety of options depending on the situation — from demanding the offending passenger stop their behavior to notifying the captain, or to alerting law enforcement on the ground should a significant incident take place. 


    Tyler Durden

    Sat, 02/22/2020 – 22:00

  • Behold The "Green" Scam: Here Are The Most Popular ESG Fund Holdings
    Behold The “Green” Scam: Here Are The Most Popular ESG Fund Holdings

    Every several years it’s same old: not long after the start of the post-crisis era, the investing craze du jour was 3D printers; when that fizzled it was replaced with craft burgers/sandwiches which then morphed into the biotech bubble; when that burst blockchain companies were the bubble darlings of the day, which in turn were replaced by cannabis stocks. Not longer after, the pot bubble burst, leaving a void to be filled.

    That’s when the virtue-signaling tour de force that is ESG, or Environmental, Social, and Governance, made its first appearance, which just happened to coincide with the oh so obviously staged anti-global warming crusade spearheaded by a 16-year-old child (whose words are ghost-written by its publicity-starved parents) as well as central banks, politicians, the UN, the IMF, the World Bank, countless “green” corporations and NGOs, and pretty much everyone in the crumbling establishment.

    After all, who can possibly be against fixing the climate, even if it costs quadrillions… or rather especially if it costs quadrillions – because in one fell swoop, central banks assured themselves a carte blanche to print as much money as they would ever need, because who evil egotistical bastard would refuse the monetization of, well, everything if it was to make sure future generations – the same generations these same central banks have doomed to a life of record wealth and income inequality – had a better life (compared to some imaginary baseline that doesn’t really exist).

    And since the green movement was here to stay, so was the wave of pro-ESG investing which every single bank has been pitching to its clients because, well you know, it’s the socially, environmentally and financially responsible thing.

    There is just one problem. Instead of finding companies that, well, care for the environment, for society or are for a progressive governance movement, it turns out that the most popular holdings of all those virtue signaling ESG funds are companies such as…. Microsoft, Alphabet, Apple and Amazon, which one would be hard pressed to explain how their actions do anything that is of benefit for the environment, or whatever the S and G stand for. It gets better: among the other most popular ESG companies are consulting company Accenture (?), Procter & Gamble (??), and… drumroll, JPMorgan (!!?!!!?!).

    Yes, for all those who are speechless by the fact that the latest virtue-signaling investing farce is nothing more than the pure cristalized hypocrisy of Wall Street and America’s most valuable corporations, who have all risen above the $1 trillion market cap bogey because they found a brilliant hook with which to attract the world’s most gullible, bleeding-heart liberals and frankly everybody else into believing they are fixing the world by investing in “ESG” when instead they are just making Jeff Bezos and Jamie Dimon richer beyond their wildest dreams, here is Credit Suisse’s summary of the 108 most popular ESG funds. Please try hard not to laugh when reading what “socially responsible, environmentally safe, aggressively progressive” companies that one buys when one investing into the “Green”, aka ESG scam.

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    Impossible, you say. Nobody can be that hypocritical… surely Credit Suisse has made an error? Well, no. As confirmation here are the Top 10 Holdings of the purest ESG ETF available: the FlexShares ESGG fund. Below we present, without further commentary, its Top 10 holdings.

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    Tyler Durden

    Sat, 02/22/2020 – 21:52

  • The US Is World Leader In Bio-Weapons Research, Production, & Use Against Mankind
    The US Is World Leader In Bio-Weapons Research, Production, & Use Against Mankind

    Authored by Gary Barnett via LewRockwell.com,

    Those that prevent disease and expose virus creation are heroic, but those that create and purposely spread disease and virus are inhuman.

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    Given the history of the United States government and its military industrial complex concerning biological and germ warfare, the use of these agents against large populations, and the desire to create agents that are race specific strains, these powerful entities have become compassionless purveyors of death to the innocent. Manmade viruses meant for warfare, whether for economic destruction, starvation, or mass death, are the workings of the truly evil among us. Predation at this level is relegated to those in power; a president for example, could give the order to wipe out millions due to his inability to control a problem he caused and perpetuated, and then lay blame on the victims.

    Who would ever have believed that modern warfare could be more brutal, more torturous, more painful, and more harmful to innocents, especially children, than past atrocities committed in war. Memories of millions sent to their deaths fighting in trenches, cities obliterated by atomic bombs, entire countries destroyed, and millions purposely left to starve in order to appease some tyrant or elected “leader.” I once thought that nuclear war would signal the end of life as we know it, but considering modern warfare and technology, I now think that uncontrolled and deadly viruses may consume the world population, as one after another poisons are released as acts of hidden war. There can be no end to this madness, as any retaliation in kind will result in the spread of worldwide disease; all created by man.

    The new Coronavirus, Covid-19, is one in a line of many that were not just likely but most certainly produced by man in laboratories, is affecting almost exclusively the Chinese at this point. This has seemingly opened the floodgates to speculation as to its exact origin. This virus has unique characteristics that have happened before with SARS and MERS, and has genetic material that has never been identified, and is not tied to any animal or human known virus. This should be troubling to all, because if this is manmade, it was manufactured as a weapon of war. So who is responsible for its release in China? It is possible that this virus was created in China and was “accidentally” released into the population, but that does not sound credible at any level. Do any think that the Chinese government would create a Chinese race specific virus and release it in their country?

    Interestingly, in the past, U.S. universities and NGOs went to China specifically to do illegal biological experimentation, and this was so egregious to Chinese officials, that forcible removal of these people was the result. Harvard University, one of the major players in this scandal, stole the DNA samples of hundreds of thousands of Chinese citizens, left China with those samples, and continued illegal bio-research in the U.S. It is thought that the U.S. military, which puts a completely different spin on the conversation, had commissioned the research in China at the time. This is more than suspicious.

    The U.S. has, according to this article at Global Research, had a massive biological warfare program since at least the early 1940s, but has used toxic agents against this country and others since the 1860s. This is no secret, regardless of the propaganda spread by the government and its partners in criminal bio-weapon research and production.

    As of 1999, the U.S. government had deployed its Chemical and Biological Weapons (CBW) arsenal against the Philippines, Puerto Rico, Vietnam, China, North Korea, Laos, Cambodia, Cuba, Haitian boat people, and our neighbor Canada according to this article at Counter Punch. Of course, U.S. citizens have been used as guinea pigs many times as well, and exposed to toxic germ agents and deadly chemicals by government. Keep in mind that this is a short list, as the U.S. is well known for also using proxies to spread its toxic chemicals and germ agents, such as happened in Iraq and Syria. Since 1999 there have been continued incidences of several different viruses, most of which are presumed to be manmade, including the current Coronavirus that is affecting China today.

    There is also much evidence of the research and development of race-specific bio-warfare agents. This is very troubling. One would think, given the idiotic race arguments by post-modern Marxists, that this would consume the mainstream news, and any participants in these atrocious race-specific poisons would be outed at every level. That is not happening, but I believe it is due to obvious reasons, including government cover-up, hypocrisy at all levels, and leftist agenda driven objectives that would not gain ground with the exposure of this government-funded anti-race science.

    I will say that it is not just the U.S. that is developing and producing bio-warfare agents and viruses, but many developed countries around the globe do so as well. But the United States, as is the case in every area of war and killing, is by far the world leader in its inhuman desire to be able to kill entire populations through biological and chemical warfare means. Because these agents are extremely dangerous and uncontrollable, and can spread wildly, the risk to not only isolated populations, but also the entire world is evident. Consider that a deadly virus created by the U.S. and used against another country was found out and verified, and in retaliation, that country or others decided to strike back with other toxic agents against America. Where would this end, and over time, how many billions could be affected in such a scenario?

    All indications point to the fact that the most toxic, poisonous, and deadly viruses ever known are being created in labs around the world. In the U.S. think of Fort Detrick, Maryland, Pine Bluff Arsenal, Arkansas, Horn Island, Mississippi, Dugway Proving Ground, Utah, Vigo Ordinance Plant, Indiana, and many others. Think of the fascist partnerships between this government and the pharmaceutical industry. Think of the U.S. military installations positioned all around the globe. Nothing good can come from this, as it is not about finding cures for disease, or about discovering vaccines, but is done for one reason only, and that is for the purpose of bio-warfare for mass killing.

    The drive to find biological weapons that will sicken and kill millions at a time is not only a travesty, but is beyond evil. This power is held by the few, but the potential victims of this madness include everyone on earth. How can such insanity at this level be allowed to continue? If any issue could ever unite the masses, governments participating in biological and germ warfare, race-specific killing, and creating viruses with the potential to affect disease and death worldwide, should cause many to stand together against it. The first step is to expose that governments, the most likely culprit being the U.S. government, are planting these viruses purposely to cause great harm. Once that is proven, the unbelievable risk to all will be known, and then people everywhere should put their divisiveness aside, stand together, and stop this assault on mankind.

    “In vast laboratories in the Ministry of Peace, and in experimental stations, teams of experts are indefatigably at work searching for new and deadlier gases; or for soluble poisons capable of being produced in such quantities as to destroy the vegetation of whole continents; or for breeds of disease germs immunised against all possible antibodies.” ~ George Orwell – 1984

    Additional notes: here, here, here, here, here and here.


    Tyler Durden

    Sat, 02/22/2020 – 21:30

  • Google Says Apps No Longer Work On New Huawei Phones, Warns Users Not To "Sideload"
    Google Says Apps No Longer Work On New Huawei Phones, Warns Users Not To “Sideload”

    Last year, the U.S. government banned companies in the U.S. from working with Huawei – with Google being one of the notable names that would have to cease and desist, given its popular Android operating system and Google Play app store.

    At the time, Trump had signed “executive order declaring a national emergency banning sales and use of telecom equipment that poses ‘unacceptable’ risks to national security, including critical infrastructure and the online economy,” according to Engadget. Huawei was obviously on that list. China was called the “primary target” of the order. 

    But there’s still confusion about what’s going on and which products are subject to the services ban, according to The Verge. This is mainly due to the fact that there are still updates and services available for older Huawei devices, but that newer phones like the Mate 30 Pro (below), don’t have access to its services. 

    To clarify, Google published a note on its Android forums on Friday, explaining its stance with Huawei phones and reminding its users not to try and “sideload” apps onto a phone where they shouldn’t be. The note from Google says that the company can only work with device models available to the public before May 16,2019:

    “Our focus has been protecting the security of Google users on the millions of existing Huawei devices around the world.  We have continued to work with Huawei, in compliance with government regulations, to provide security updates and updates to Google’s apps and services on existing devices, and we will continue to do so as long as it is permitted. To be clear: US law currently allows Google to only work with Huawei on device models available to the public on or before May 16, 2019.”

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    The note also makes it crystal clear that Google apps and services are simply not available “for preload or sideload” on Huawei’s new devices:

    We have continued to receive a number of questions about new Huawei devices (e.g., new models launching now, or earlier models launched after May 16, 2019 but now becoming available in new regions of the world) and whether Google’s apps and services can be used on these devices.  We wanted to provide clear guidance to those asking these important questions. 

    Due to government restrictions, Google’s apps and services are not available for preload or sideload on new Huawei devices.

    The note says that sideloaded apps on newer devices, despite the warning, “will not work reliably because [Google] does not allow these services to run on uncertified devices where security may be compromised.”

    “Sideloading Google’s apps also carries a high risk of installing an app that has been altered or tampered with in ways that can compromise user security,” the note says. 

    Google also offers users a way to check and verify whether or not their phone is certified for its apps: 

    To check if your device is certified, open the Google Play Store app on your Android phone, tap “Menu” and look for “Settings.” You will see if your device is certified under “Play Protect certification.” You can learn more on android.com/certified.

    While it seems as though Google is trying to sidestep the political implications of these rule changes, it is also stern in reminding its users from using backdoor access to load Google apps onto to Huawei phones. 

    Meanwhile, China has much bigger problems than Huawei on their hands right now. And the U.S.? Perhaps they should consider quarantining not just Huawei, but anything that comes out of China at the moment.


    Tyler Durden

    Sat, 02/22/2020 – 21:00

  • South Korea Reports 123 New Coronavirus Cases; Italy Declares State Of Emergency: Virus Updates
    South Korea Reports 123 New Coronavirus Cases; Italy Declares State Of Emergency: Virus Updates

    Summary:

    • South Korea reports 123 new cases, 1 new death
    • Italy announces 79 cases, declares “national emergency”; Nothern Italy put on lockdown.
    • Japan cases triple in a week to 121
    • Japan confirms “seriously ill” patient in Tokyo
    • Hubei reports daily numbers
    • Chinese scientists find virus in urine
    • Experts propose 27 day quarantine, say 14 days likely not long enough
    • Cases outside China go exponential
    • 32 UK and European citizens arrive back in UK on evac flight
    • Outbreak reported in South Korean psychiatric ward
    • WHO team visits Wuhan; will give Monday press conference
    • Iran reports 10 new cases, deaths climb to 6
    • San Diego says 200 under ‘medical observation’
    • Young woman infected five relatives without ever showing symptoms
    • South Korea cases surge 8-fold in 4 days to 433; country reports third death

    * * *

    Update (2105ET): China’s National Health Commission has reported 18 new cases of Covid-19 and one new death outside of Hubei province. 

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    * * *

    Update (2040ET): South Korea has finally released its numbers for Saturday. Authorities recorded an additional death, bringing the total to four, and another 123 confirmed cases, bringing the total to 556.

    Weekend futures took a dive on the news, dropping 40 points. Another 6,039 cases are being tested.

    • S.KOREA REPORTS 123 ADDITIONAL CORONAVIRUS CASES, BRINGING TOTAL TO 556 – YONHAP
    • FOURTH S.KOREAN CORONAVIRUS PATIENT DIES – KOREA’S CDC
    • S.KOREA REPORTS 123 ADDITIONAL CORONAVIRUS CASES, BRINGING TOTAL TO 556 – YONHAP

    Here’s a breakdown of the new data:

    • 123 new cases, 1 new death
    • 75 new cases linked to church
    • 48 others with unknown link
    • Total: 556 cases, 4 deaths
    •  6,039 people being tested

    That’s a more than ten-fold increase in cases in a week…

    * * *

    Update (1940ET): Health officials from two South Korean provinces have reported a total of 28 new cases ahead of a national update, according to BNO.

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    * * *

    Update (1920ET): NHK reports another case of a “seriously ill” patient in Tokyo. The man allegedly traveled to Indonesia – one of the few countries in the region that hasn’t confirmed a single case – while he was sick.

    * * *

    Update (1820ET): Officials in Hubei have reported their latest figures on the outbreak, with the number of new cases doubling compared to yesterday (630 on Saturday new cases vs. 366 on Friday), while the number of confirmed deaths dipped (96 vs 106). 

    Perhaps officials figured they could only fudge the number of new cases by so much since the WHO team was in Wuhan on Saturday. Who knows. But it’s notable that cases doubled, the latest sign that China’s policy of quarantine and containment doesn’t seem to be working. At this point, whatever the numbers coming out of China, they almost are no longer relevant, since nobody believes them anyway.

    • CHINA’S HUBEI PROVINCE, EPICENTRE OF CORONAVIRUS OUTBREAK, REPORTS 630 NEW CASES ON FEB 22 VS 366 ON FEB 21
    • CHINA’S HUBEI PROVINCE, EPICENTRE OF CORONAVIRUS OUTBREAK, REPORTS 96 NEW DEATHS ON FEB 22 VS 106 ON FEB 21
    • DEATH TOLL FROM CORONAVIRUS OUTBREAK IN CHINA’S HUBEI AT 2,346 AS OF END-FEB 22

    And here’s just one more reason why: In a video recently posted to twitter, a doctor from a hospital in Hunan confirms that he counted 50 new patients the other day and submitted those numbers to health officials. In turn, they included only 1 case in the official count.

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    Mainstream American news organizations including the Washington Post are now questioning China’s numbers, as we noted earlier.

    Meanwhile, it looks like Italian health officials have confirmed 3 new cases, bringing the total to 79.

    * * *

    Update (1730ET): The first offshore coronavirus cluster was the Diamond Offshore cruise ship, where it now appears hundreds of infected passengers mingled with healthy tourists (and it now appears that Japan lied that it had tested passengers) with many returning to their country of origin now that the quarantine has been broken; the second cluster and third clusters are South Korea and Japan; the former has seen cases doubling every day for the past four, hitting 433 on Saturday in an exponential increase in new cases (see chart below), while Japan is said to have hundreds of cases as well.

    And while the recent surge in Iranian cases has put much of the middle east on notice over the possibility that the embargo-crippled nation may have emerged as a middle eastern hub of Coronavirus cases, the latest confirmed offshore cluster to emerge IS Italy, where late on Saturday prime minister Conte announced that a total of 76 cases have been confirmed in 5 regions, declaring the Coronavirus situation a “National Emergency.” The Prime Minister also said that Italy has implemented a law decree to fight the coronavirus, and is committed to limiting the spread of the Coronavirus.

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    And while Conte said that Italy won’t ask for a suspension of the Shengen pact (yet) which allows customs-free travel across Europe, but will adopt a decree to support the economy in certain areas, Italy’s Ansa reported that virtually all of Northern Italy is being put on lockdown and that all schools and universities in the affected areas to be closed until the end of the month.

    • NORTHERN ITALY WHERE CORONAVIRUS CASES REPORTED ON LOCKDOWN – ANSA NEWS
    • ITALY TO BAN TRAVEL FROM CERTAIN VIRUS AFFECTED AREAS: CONTE
    • ALL SCHOOLS AND UNIVERSITIES IN AFFECTED AREAS TO BE CLOSED UNTIL THE END OF THE MONTH, SCHOOL TRIPS ABROAD ALSO CANCELLED – ANSA NEWS

    Elsewhere, as the global pandemic spreads, Israel’s Ministry of Health said that it expected soon to close borders for non-residents.

    Meanwhile, on Saturday afternoon, the Centers for Disease Control and Prevention raised its alert level for travel in Japan to Level 2. That level warns of “sustained community transmission” and calls for “precautions for high-risk travelers,” such as those with chronic medical conditions.

    Though Japan has reported only one death – amid nearly 80,000 cases and almost 2,400 deaths worldwide – it has a relatively large number of cases, 121, largely due to the spread of the virus on the Diamond Princess cruise ship which it facilitated.

    To summarize, Iran, Italy and South Korea reported new deaths Saturday. In total, there are some 77,000 cases worldwide, with over 2,300 deaths, almost all in China, but that imbalance is set to shift dramatically in the coming days.

    * * *

    Update (1330ET): News reports claim that roughly half of the latest batch of confirmed cases in South Korea which doubled the country’s total confirmed came from a hospital near Daegu in Cheongdo County, where 11 cases were confirmed. 109 of those infected found to be in the psychiatric ward, either as patients or staff, according to the director of the South Korean CDCP. Nine of them were doctors.

    The Blue House has asked South Korean citizens to avoid group activities and assemblies, and recommended that events be replaced with online gatherings. If its guidelines aren’t followed voluntarily, the government warned that it would resort to “strict measures” to contain the outbreak if its guidelines aren’t followed by the public.

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    Medical workers carried a patient infected with coronavirus to a hospital in Chuncheon, South Korea on Saturday.

    In yet another sign of Japan’s shortcomings when attempting to contain the virus, an officer who worked at an airport quarantine in northern Japan has reportedly tested positive for the virus.

    Britain’s Foreign Officer confirmed Saturday that 32 British and European citizens had landed back in the UK, and would soon be quarantined. 

    In Italy, the government has confirmed the first case in Milan, a city of 1.8 million that’s a center of Italian industry and fashion. 

    Iran has reported another death, bringing its total to 6.

    The latest total for Japan puts cases at 738, including some passengers and crew from the “Diamond Princess” as the number of confirmed cases ex-China continues to climb.

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    Just looking at new cases from the top 7 infected countries is alarming:

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    * * *

    Update (1100ET): Italian health officials have confirmed nearly two dozen more cases across Lombardy and Veneto, according to Bloomberg.

    The Lombardy region has 39 coronavirus cases with another 12 cases in the Veneto, regional officials said in a press conference Saturday in Milan. Most of the cases are in the Codogno area, 60 kilometers (37 miles) from Milan. A woman who was found dead in her home subsequently tested positive, the health secretary said. Earlier, three tourists in Rome were diagnosed with the virus.

    * * *

    When WHO Director-General Dr. Tedros was asked on Thursday whether the COVID-19 virus was at a tipping point, he replied that the window to stop the outbreak from growing exponentially worse was rapidly closing.

    Though by Friday night, it certainly seemed like that window had slammed shut. In South Korea, cases went exponential, soaring by 70% in one day.

    Overnight, the country reported another rash of confirmed cases, bringing the total to 433, with 352 in Daegu, presumably members of the cult-like church where a ‘super-spreader’ worshipped. That marks an eight-fold increase in cases in just four days for South Korea, as the AP reported.

    SK also reported its third death, a man in his 40s who was found dead in his apartment and posthumously tested.

    South Korean health officials warned they could soon see a rash of deaths as several patients are in serious condition. Virus patients with signs of pneumonia or other serious conditions at the Cheongdo hospital were transferred elsewhere as 17 of them are in critical condition, according to SK Vice Health Minister Kim Gang-lip told reporters.

    The country has followed China in imposing quarantines (everyone is too terrified to go outside anyway) and they’re hoping to prevent a national outbreak, despite a few cases in Seoul that weren’t immediately traceable to an obvious source, which is sort of discouraging.

    “Although we are beginning to see some more cases nationwide, infections are still sporadic outside of the special management zone of Daegu and North Gyeongsang Province,” Kim said during a briefing. He called for maintaining strong border controls to prevent infections from China and elsewhere from entering South Korea.

    In Italy, a seemingly minor outbreak went exponential. By day’s end, Italian health authorities had confirmed their first virus-related fatality, and 12 towns in Lombardy were under strict quarantine orders with residents huddling terrified inside their homes, a tableau that has become all too familiar by now. Another fatality followed overnight, as a couple more towns joined in the lockdown. This marked Italy as the first European country to see its own nationals succumb to the virus, according to Euronews.

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    Across Italy, there are 32 cases in Codogno, Lombardy, and seven in Veneto, according to the AFP and Sky Italia television. Many of the new cases represented the first infections in Italy acquired through secondary contagion.

    In Iran, 10 more cases, and one more death, were recorded overnight. That brings the total number of confirmed cases to 28, including cases in Qom and Tehran. So far, five Iranians have died.

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    As we await more information out of China, CNBC’s Eunice Yoon reports that the team would hold a press briefing on Monday at 6 am ET.

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    Meanwhile, as we noted yesterday, the team has arrived in Wuhan, where it’s gathering information and observing the situation on the ground.

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    The team has already been to three Chinese provinces, Beijing, Sichuan and Guangdong, but are only now just visiting the city at the heart of the outbreak. Dr. Tedros confirmed the trip during public comments on Saturday, where he once again shared some familiar words.

    “We have to take advantage of the window of opportunity we have, to attack the virus outbreak with a sense of urgency,” Dr. Tedros told the leaders, who had gathered for an emergency meeting on the response to the coronavirus in the continent.

    President Xi said Saturday that the situation in Wuhan remains ‘grim and complex’ – which means the WHO team should be in for an eye-opening experience.

    As of Saturday morning in the US, 1,200 cases of COVID-19 have been diagnosed outside China. More than 200 cases have been confirmed in South Korea, more than 30 in Italy, roughly a dozen in Iran, and one in Egypt, the first to be confirmed in Africa. China has reported over 76,000 cases, including over 2,300 deaths.

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    Confirmed cases in Japan rose to 121 on Saturday, having more than tripled in a week.

    Meanwhile, the Washington Post reports that health officials and the cruise line are continuing to test crew members aboard the Diamond Princess. So far, 74 crew have been confirmed to have the virus, but they have been included in the toll already.

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    SCMP

    So far, China has reported only 397 new cases Saturday, as the rate of increase continued to decline, but another 109 have died. And even the Washington Post acknowledges that there is a “great deal of skepticism” about China’s numbers, according to a new case study seen by Reuters.

    Cases where patients didn’t show signs of infection for longer than two weeks have prompted some epidemiologists to suggest a 27 day quarantine period instead of just a 14 day. Also on Saturday scientists in China revealed that they had discovered a strain of the virus in a patient’s urine, raising new and uncomfortable questions about the virus’s ability to spread through sewer systems.

    There have also been several new indications that the virus’s incubation period might be longer than the 14 days currently believed. A woman in Wuhan with no symptoms infected five relatives without every showing signs of infection.

    In the US, health officials are scrambling to contain the fallout from the evacuation of 300 Americans from the ‘Diamond Princess’. It appears that the decision to transport 14 infected passengers along with the rest of the group was a disaster. Dozens of others appear to have been infected either during the trip, or shortly before.

    But in San Diego, officials announced that they’re monitoring some 200 cases, none of which had anything to do with the ship.

    After confirmed US cases more than doubled to 34 on Friday, officials in San Diego on Saturday confirmed that more than 200 people are currently being monitored over virus concerns, according to ABC News 10.

    Officials said everyone being monitored had either come in contact with one of the three confirmed cases, or others under suspicion. Health officials didn’t exactly offer specific details.

    They’re among more than 300 people who have been, or are being, ‘monitored’ by the county.

    The 204 people under county supervision include those deemed at risk of having been exposed to the virus due to close contact with confirmed cases or because of travel to China in the past 14 days, the county said.

    Those individuals are monitoring their health under the supervision of county health officials.

    So far, 338 people in all have been monitored by the county, with 134 people completing their time under supervision.

    Health officials say the CDC is conducting screening for those landing at one of 11 U.S. airports from China. From there, if a patient shows no symptoms they are self-quarantined at home for self-monitoring with public health supervision.

    Keep in mind: These individuals aren’t being held in isolation or a mandatory quarantine. Instead, they’ve been asked to self-quarantine, and immediately report any suspicious symptoms.

    San Diego has had two confirmed cases of coronavirus, or COVID-19, among the evacuees who were flown out of Wuhan a few weeks ago. One patient has since recovered from the virus and has been released. The second patient is still receiving care. A third patient, reportedly a child, is still awaiting test results, but has been said to be showing symptoms.

    When they extended a coronavirus-related emergency declaration for another 30 days, officials said there were no signs the virus was spreading around San Diego. But it never hurts to be cautious.

    Before we go, we wanted to remind readers of a chart we first shared a couple of days ago:

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    Terrifying indeed.


    Tyler Durden

    Sat, 02/22/2020 – 20:42

  • Who Is Funding The Anti-Bernie Sanders Super PAC?
    Who Is Funding The Anti-Bernie Sanders Super PAC?

    Authored by Ilma Hasan via OpenSecrets.org

    Several outside groups are trying to slow the momentum of current Democratic presidential frontrunner Sen. Bernie Sanders’ (I-Vt.) by spending millions on ad buys, as he continues to dominate the polls. 

    The campaign against Sanders originated with hybrid PAC Democratic Majority for Israel, a pro-Israel moderate group, that spent over $1.4 million against Sanders. The group spent over $800,000 running ads against the frontrunning Democratic presidential candidate in Iowa and it’s spending $600,000 in Nevada, according to recent filings with the Federal Election Commission. 

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    Sanders campaign file image via Der Spiegel 

    Most of the PAC’s contributors have a clear history of giving money to candidates on both sides of the aisle. Its biggest donor is Stacy Schusterman, CEO of Samson Resources, an oil and gas company, who donated $1 million to the group in 2019. Schusterman has a long history of donating to Democratic candidates, except in 2016 when she contributed almost $130,000 to 25 Republican lawmakers including $2,700 to House Speaker Paul Ryan (R-Wis.).

    Venture capitalist Gary Mark Lauder was the second highest donor to the hybrid PAC giving $500,000. New York businessman Milton Cooper was the next highest at $150,000. Active in donating to various Democrats, he also contributed $4,000 to Sen. Lindsey Graham (R-S.C.) and $2,000 to Sen. Bill Cassidy (R-La.) in 2019.

    Ron Zeff, founder and CEO of Carmel Partners, a real estate investment firm, gave the group $100,000. He previously contributed over $70,000 to the GOP. Zeff also donated to Republican presidential candidate Mitt Romney’s campaign in 2012 against President Barack Obama. 

    The Sanders campaign said it raised $1.3 million within a day of the super PAC ads airing. Of the non-billionaires in the race, Sanders is the only candidate to report substantial cash on hand through January. 

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    On Wednesday, Mark Mellman, president of Democratic Majority for Israel, announced the group will no longer be running any ads against Sanders or contribute in the presidential race after its ad buys in Nevada run out. The group will focus on Democratic congressional races instead, Jewish Insider reported. 

    “We will be involved in congressional races and in some cases those are Democrats running against Republican and in some case, those are pro-Israel champions running against anti-Israel challengers,” Mellman reportedly said.

    The pro-Israel super PAC is closely affiliated with the American Israel Public Affairs Committee and some of it’s largest donors are top members of the group, according to The Intercept.

    While Mellman’s group will be taking a backseat, the committee has been running an anti-Sanders campaign through Facebook ads since last year. It recently came under scrutiny for accusing “radicals” in the Democratic Party of “pushing their anti-Semitic and anti-Israel policies down the throats of the American people.” The group later apologized for “the ad’s imprecise wording (that) distorted our message and offended many.”

    Another group meant to boost moderates, The Big Tent Project, reportedly has a budget of $1 million to run ads against Sanders. Big Tent has spent $200,000 of the budget running two test ads in Nevada and South Carolina, as both states will hold upcoming primaries. Sanders is projected to win both states according to FiveThirtyEight’s average of polls. 

    While one ad accuses the frontrunner of dumping waste in Latino communities, the other criticizes his healthcare policy. “The cost? Another four years of Trump,” the ad says. Run by Jonathan Kott, a former top aide to Sen. Joe Manchin (D-W.Va.), Big Tent is classified as a 501(c)(4) and is not required to disclose its donors. 

    Sanders has long questioned American policy toward Israel and advocates an approach that addresses both Israeli security and a “pro-Palestinian” perspective. His criticism has made pro-Israel Democrats and supporters anxious, resulting in a surge of anti-Sanders ads. 

    As Sanders is projected to win the upcoming contests, big Democratic donors have concerns about him being the presidential candidate, Politico reported. The concern within democrats is that an anti-Sanders campaign could result in boosting his contributions from an already devoted support base. For others, it’s about Sanders’ possible inability to woo moderate and Republican voters. 


    Tyler Durden

    Sat, 02/22/2020 – 20:30

  • Researchers Find 61.5% Of Coronavirus Patients With Severe Pneumonia Won't Survive
    Researchers Find 61.5% Of Coronavirus Patients With Severe Pneumonia Won’t Survive

    Since the Wuhan coronavirus first appeared late last year, researchers have been studying it, though for the first month or so, only Chinese scientists had access to the data.

    But now that China has shared its data with the world, research has been appearing more quickly, with more opportunities for peer review.

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    According to a study published in the Lancet on Friday, patients who are especially vulnerable to severe COVID-19 infections – a group that includes the very old, very young and those with co-occurring conditions – die at a higher rate from COVID-19 than they did from SARS and MERS.

    A study of 52 critically ill adults at Wuhan Jin Yin-tan hospital found that 61.5% of patients requiring hospitalization and intense monitoring ended up becoming “non-survivors”, to borrow some of the researchers’ terminology.

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    The researchers concluded that COVID-19 – or SARS-CoV-2, as they call it – is more lethal for vulnerable patients than SARS or MERS was.

    Like SARS-CoV and Middle Eastern respiratory syndrome (MERS)-CoV, SARS-CoV-2 is a coronavirus that can be transmitted to humans, and these viruses are all related to high mortality in critically ill patients.12 However, the mortality rate in patients with SARS-CoV-2 infection in our cohort is higher than that previously seen in critically ill patients with SARS. In a cohort of 38 critically ill patients with SARS from 13 hospitals in Canada, 29 (76%) patients required mechanical ventilation, 13 (43%) patients had died at 28 days, and six (16%) patients remained on mechanical ventilation. 17 (38%) of 45 patients and 14 (26%) of 54 patients who were critically ill with SARS infection were also reported to have died at 28 days in a Singapore cohort13 and a Hong Kong cohort,14 respectively. The mortality rate in our cohort is likely to be higher than that seen in critically ill patients with MERS infection. In a cohort of 12 patients with MERS from two hospitals in Saudi Arabia, seven (58%) patients had died at 90 days.15 Since the follow-up time is shorter in our cohort, we postulate that the mortality rate would be higher after 28 days than that seen in patients with MERS-CoV.

    Researchers presented their findings in a series of tables which clearly broke down each patient’s symptoms and path to recovery (or death).

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    The mean age of the 52 patients who participated in the study was 59 years old. 35 (67%) were men, 21 (40%) had been diagnosed with some kind of chronic illness, and 51 (98%)were found to have a fever.

    Readers can find the whole article below:

    s 2213260020300795 by Zerohedge on Scribd

    We expect to learn more about the virus when the team of WHO experts, which includes 2 Americans, delivers their press conference on Monday.


    Tyler Durden

    Sat, 02/22/2020 – 20:00

  • Watch: Turkish-Backed Jihadists Attempt To Down Russian Jet Over Idlib With MANPADS
    Watch: Turkish-Backed Jihadists Attempt To Down Russian Jet Over Idlib With MANPADS

    Via AlmasdarNews.com,

    A new video released on Friday showed the Turkish military and their allied militants attempting to hit a Russian aircraft with an anti-aircraft missile in the Idlib Governorate yesterday.

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    In the short video, the Turkish forces and their allies militants can be seen on the roof of a building, where they later attempted to shoot down the Russian aircraft in the skies of the Idlib Governorate.

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    As shown in the video, however, the anti-aircraft missile fails to hit the Russian aircraft that had just flown over their positions in what is presumably the eastern countryside of Idlib.

    The Russian jet is seen deploying counter-measures seconds after the surface-to-air missile is fired.

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    Prior to the release of this video, another film was released on Thursday that showed the militant forces in the Idlib Governorate trying to shoot down a Russian Su-24 aircraft that had just got done bombing their positions.

    Below is the video that was released on Friday of the attempted downing of the Russian aircraft:


    Tyler Durden

    Sat, 02/22/2020 – 19:30

  • 401(k) Millionaires Surge To Record Level Under Trump
    401(k) Millionaires Surge To Record Level Under Trump

    A Fidelity Investments press release on Thursday said the number of customers with more than $1 million in their 409k  401k soared to record levels in 4Q19 fueled by higher savings rates and surging stock markets. 

    There’s a reason why President Trump touted 401k growth during his State of the Union address last week, because balances are increasing, and it will help him win the election. 

    Fidelity noted that 401k millionaires soared last quarter, reaching a record level. Customers with the brokerage house that have over one million dollars in their 401k hit 233,000, up from 200,000 in Q3, a 17% jump M/M. 

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    The number of IRA millionaires increased to 208,000, also a record high and an increase from 182,400 in Q3. 

    All of these new 401k and IRA millionaires were created through President Trump’s pressure on the Federal Reserve to unleash easy money policies to boost the stock market.

    And, of course, as we all know, JPM’s drain of liquidity via Money Markets and reserves parked at the Fed promoted a liquidity crisis that resulted in “Not QE,” which allowed even more liquidity to flow into the stock market starting last September, the same period when all of these investment accounts soared in value. Coincidence? 

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    Kevin Barry, president of Workplace Investing at Fidelity Investments, noted in the release that “growth in savings levels over the last 10 years demonstrates the positive impact of taking a long-term approach to retirement, and recent Fidelity research demonstrates workers who do so have reason to feel increasingly confident about their retirement readiness.”

    “However, as we enter a new decade and continue to see markets rise and fall, it’s more important than ever to remember some of the important elements of a successful retirement strategy – these include maintaining positive savings habits, ensuring your account has the right balance of stocks, bonds, and cash, and continuing to focus on your long-term savings goals,” Barry added.

    Sven Henrich via NorthmanTrader.com recently discussed the topic of soaring investment accounts, called it: “FOMO by executive order I called it.”

    Every chance Trump gets, he tweets or tells everyone that their 409k 401k is performing great. 

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    Raoul Pal of Real Vision had a good take on it:

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

    It seems that the Fed’s easy money policies over the last year, juicing markets to all-time highs, could be a vote of confidence by the central bank to get Trump reelected.


    Tyler Durden

    Sat, 02/22/2020 – 19:00

  • Luongo: We Don't Need A Ministry Of Truth To Protect Us From The Bad People
    Luongo: We Don’t Need A Ministry Of Truth To Protect Us From The Bad People

    Authored by Tom Luongo via Gold, Goats, ‘n Guns,

    Don’t Be Fooled by the Deplatforming of Facebook

    The push for speech control escalates. There is now a concentration of stories concerning social media companies and their role in shaping political thought.

    We are nine months from a pivotal presidential election in the U.S. and the push is on to ensure that the outcome goes the way those in power want it to.

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    Three times in as many weeks billionaire busybody George Soros has attacked Facebook CEO Mark Zuckerberg, demanding he be removed because he is working to re-elect Donald Trump.

    This seems like an absurdity. But it isn’t. It’s all part of the game plan.

    Create a controversy that isn’t real to seed a narrative that there’s a problem in need of a solution. Facebook has been the center of this controversy to inflame passions on both sides of the political aisle to ensure the desired outcome.

    They want regulation of all social media companies to create unscalable barriers to entry for new ones while curtailing free speech on the existing ones.

    Warren Buffet would call that a moat. I call it tyranny.

    Enter Attorney General William Barr.

    He weighed in recently that we need to have a conversation about Facebook et.al. in relation to their Section 230 immunity under the Communications Decency Act.

    Section 230 grants immunity to companies like Facebook and Google from prosecution for content hosted on their services as they argue they are not publishers but rather just pass-through entities or platforms of user-generated content.

    Now, it’s pretty clear for the past few years the social media companies have been acting with open editorial bias to deplatform undesirables. They rewrite broadly defined terms of services and EULAs (End-User Licence Agreements) which they use to justify controlling what content they are willing to host.

    And that’s where the Section 230 immunity comes into play. The big tech companies want to have it both ways, be a neutral platform legally but self-define ‘neutrality’ in such a way that benefits them politically, economically and socially while insulating themselves from breaching contracts with their customers.

    What’s clear from Barr’s comments he’s approaching this from a law enforcement perspective.

    “We are concerned that internet services, under the guise of Section 230, can not only block access to law enforcement — even when officials have secured a court-authorized warrant — but also prevent victims from civil recovery,” Barr said. “Giving broad immunity to platforms that purposefully blind themselves — and law enforcers — to illegal conduct on their services does not create incentives to make the online world safer for children.”

    And this clearly doesn’t address the real issue. That’s your sign there’s something wrong here.

    Both political parties are unhappy with the current situation and that should be your red flag that a great stitch-up is in progress. Because the end goal here is government oversight that has bipartisan support.

    That support has to be manufactured from both sides. The left wants protection from ‘fake news’ and ‘Russian meddling’ while the right wants a level playing field to air ideas in the public square.

    Didn’t you all notice how both of these things became issues right after the wrong person won the 2016 presidential election and the British people made the wrong decision about EU Membership?

    I’m sure you noticed the blatant bias exhibited by Facebook, Google, YouTube, Twitter, Reddit and the rest of these protected platforms and wondered why they were allowed to act so egregiously with seemingly no recourse?

    The big tech companies don’t want more government oversight, they simply want to continue to have their have their editorial take and enforce it too while taking your money and suppressing your voice.

    Government intervention is not the solution here. In fact, it is the goal of the entire exercise.

    I don’t want the government coming in and further defining the rules by which Facebook can deplatform everyone who tells inconvenient truths.

    Because that’s all government does. And then it empowers a bureaucracy to enforce those rules.

    I don’t need a Ministry of Truth to protect me from the bad people. I know where the bad people are and, in your heart, so do you.

    So the question isn’t whether Barr should strip these companies of their Section 230 immunity. Of course he should if they exhibit any kind of editorial behavior.

    But, in typical Swamp fashion, Barr isn’t concerned about that. He’s concerned with using Facebook to track down criminals; the implication being drug runners, murderers, etc.

    That’s a sop to law and order conservatives to get their support politically.

    But the real criminals are in the bowels of the compliance departments and algorithm factories of these social media companies pushing the bounds of indecency by trying to protect us from fake news to control the flow of information.

    They’ve already done a great deal of this, altering search algorithms to ensure only approved news sources show up in the results.

    We know they are all working in cahoots with the intelligence agencies here in the U.S. but no one will admit it publicly. The EU and China are more honest about their tyrannical impulses using their anti-democratic structure to create rules which they force onto these multi-national companies.

    Now Twitter is testing new flagging abilities for verified accounts to act as community censors, creating the illusion of a user-controlled public space. It’ll only be for those that get blue check marks. And that’s a system clearly gamed to reflect a particular ideological bias as no one who dissents from the approved globalist message gets one of those anymore.

    So, only journalists from official news outlets will have this ability to fact-check in real time the pronouncements of important influencers.

    If you don’t think this is simply a means by which to make it seem fair to suppress the king of Twitter, Donald Trump, then you clearly haven’t had your morning coffee.

    For a couple of years now I’ve been warning you that the elites are desperate to regain control over what I call The Wire. What is The Wire?

    The Wire is simply a metaphor for the transmission of information.  The Wire takes many forms.  And if you aren’t sure whether something is The Wire just ask if you have control over it or not.

    The Internet?  The Wire.

    Electricity?  The Wire

    Roads?  The Wire.

    Media?  The Wire.

    Money?  The Wire.

    In short, The Wire is the main conduit through which we communicate with each other.  Money?  Really?  Yes, really.  What are prices if not information about what we are willing to part with your money in exchange for?

    Without The Wire modern society fails.  So, government can’t shut it down but neither can it allow unrenstrained access to it.

    Electricity, commerce, communications, everything, goes over The Wire.  

    Control of The Wire is everything. Soros is desperately trying to hold onto control over the social media companies he’s invested so heavily in to influence their influence.

    And it’s clear we’ve entered the next phase of regaining control over it.

    The solution to the Section 230 Immunity issue for these companies is to remove it and open them up to civil liabilities for their inconsistent enforcement of their own policies.

    Because once you do that they have no protection under commercial contract law.

    Those users that use these platforms for commercial purposes are materially harmed by the ever-changing rules of these platforms.

    They entered into an agreement with YouTube or Facebook in good faith expectation of a certain level of service.

    Facebook’s business is built on the implicit guarantee of that service. In turn, Facebook was built on the backs of those using the platform.

    Unilaterally taking away that access without compensation simply because Facebook said so is a perversion of contract law. Why should Facebook be allowed to do that? Why hasn’t this clear inequity between parties to a contract been addressed by the courts?

    And that’s what we should be addressing here.

    And I’m not just talking about Facebook here. Remember when the social network Gab had its internet access revoked by GoDaddy? How does GoDaddy escape paying damages for unilaterally denying service?

    There is clear opportunity for them to be sued into submission by the millions of users whose businesses and reputations have been destroyed due to arbitrary enforcement of company rules.

    At the end of the day these companies create and use as excuses broad powers which have almost no precedent in contract law. Their EULAs are contracts the user signs which grants them no rights or guarantees of service in any way. They can be abrogated, updated and changed to suit the company’s whim with no redress for the breach of contract from the other party.

    This is outrageous, unacceptable and flies in the face of hundreds of years of contract law.

    And they should be challenged in court and thrown out as illegal Contracts of Adhesion. This is settled contract law.

    If Facebook wants to ban Alex Jones from their platform fine. I have zero problem with that. If they want to act as a private business which is protected under the First Amendment’s protection of Freedom of Association, great!

    I’m all for re-establishing that in this society.

    Let’s open up that can of worms.

    It would finally be an honest conversation. Because we are rapidly approaching the moment of reverse racism, whereby Facebook doesn’t want to host racist or sexist content.

    And I’m fine with that. But I’m also fine then with restaurants not serving black people or people baking wedding cakes for gay couples.

    Freedom OF association is also Freedom FROM association, folks.

    The shit-libs and the oligarchs want it both ways. They want you to be forced to associate with others on their terms but deny you a place in society because you disagree with them.

    That is, in a word, tyrannical.

    So, in a just world, Facebook owes Alex Jones millions for lost revenue and damages to Jones’ business as well as, one could argue, a portion of Facebook’s revenue it generated during the time it hosted Jones’ content which brought the company users, revenue and market share.

    Multiply that lawsuit by ten for the number of platforms Alex Jones has been banned from. Then multiply that number by the millions for everyone else these platforms have materially harmed.

    And then we’ll see what the market cap of the NASDAQ 100 would truly be.

    And that’s one way we should fight this, not by empowering more bureaucrats to police everyone’s speech on Twitter, but to sue Twitter for non-fulfillment of obligations under the reasonable expectation of service they are to provide as a party to a legal contract.

    This is what I wanted to hear William Barr was focusing on in working on. But that is exactly what will not happen.

    The other is to develop technology which resists the centralizing power of these companies to control our speech, democratizing it at the incentive level, through projects like Brave and other blockchain-based systems, which empower the user, not the platform to decide which content has value and which doesn’t.

    *  *  *

    Beware the deplatforming of Facebook, it’s just another brick in the wall.  Join my Patreon if you believe in free and open exchange of ideas.

    Install the Brave Browser if you want to help disempower Google and Facebook from controlling it.


    Tyler Durden

    Sat, 02/22/2020 – 18:30

  • Libya Asks US To Establish Military Base To Combat Russian Presence
    Libya Asks US To Establish Military Base To Combat Russian Presence

    This is all we need: another American base located smack dab in the middle of yet another civil war we had a big hand in causing in the first place. 

    “Libya’s security chief called on the U.S. to set up a base in the North African country to counter Russia’s expanding influence in Africa,” Bloomberg reports. 

    It appears a desperate effort on the part of the Tripoli-based Government of National Accord (GNA) to gain Washington’s attention after Trump last year seemed to switch his preference to Gen. Khalifa Haftar.

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    File image, US Army/Air Force Magazine

    The US president famously said last Spring that Haftar, who holds dual citizenship after living outside D.C. for two decades and is said to be close to the CIA, is “securing the oil”. 

    Haftar is being politically supported by Moscow, and it should be noted has Russian mercenaries in the ranks of his Libyan National Army, or LNA. 

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    So naturally Tripoli is playing “Russian influence” in Libya card to lure the Trump administration back into the GNA camp.

    The GNA’s interior minister Fathi Bashagha told Bloomberg that “The Russians aren’t in Libya just for Haftar.”

    The top Libyan security chief added of the Russia’s assumed ambitions there, “They have a big strategy in Libya and Africa.”

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    Russian Foreign Minister Sergey Lavrov with LNA commander Khalif Haftar, file image.

    And Bloomberg explains further:

    The oil-rich nation across the Mediterranean from Europe has been one of the main stages for Russia’s push for influence over the past year. More than a thousand mercenaries deployed by a confidant of President Vladimir Putin have backed Haftar’s offensive to capture the capital from the internationally recognized government.

    Bashagha warned that Russia’s backing of Haftar was part of a broader push for influence.

    Pro-Haftar forces have been laying siege to the capital of Tripoli for months now, displacing tens of thousands of civilians, in what’s fast shaping up to be a major North African proxy war, given the UAE, Egypt and Russia have taken Haftar’s side, while Turkey and most major UN countries have stuck by Tripoli under Prime Minister Fayez al-Sarraj.

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    Khalifa Haftar is greeted on a 2017 trip to Russia, via AFP/Getty.

    Though AFRICOM has been expanding rapidly over the past decade across the African continent, it doesn’t look as if the Trump administration is ready to commit any level of American troops to the Libyan War 2.0 any time soon. 


    Tyler Durden

    Sat, 02/22/2020 – 18:05

  • The Cost Of Covid-19 Quarantine: Will You Be Financially Prepared?
    The Cost Of Covid-19 Quarantine: Will You Be Financially Prepared?

    Authored by Daisy Luther via The Organic Prepper blog,

    As the world tries frantically to contain a rapidly spreading outbreak of Covid-19, schools, public venues, tourist attractions, and workplaces are being closed in an attempt to keep even more people from contracting the illness. Quarantines and self-isolation protocols are also being instituted across the globe for those who may have been exposed.

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    Of course, everyone knows that millions of people in China have been in lockdown for more than a month. People are told to stay home, many businesses have ceased to operate, and Chinese New Year celebrations simply didn’t happen this year. China’s debts are all coming due now, at the worst possible time as the financial loss for the country has been astronomical. For example, car sales are down 92% and Lunar New Year celebrations and travel that usually earn a billion dollars were canceled.

    And that tourism hit affects far more than just China. In 2017, Chinese outbound tourists spent $258 billion around the world. The airline industry is bracing for a $29 billion dollar hit. All in all, this virus could end up costing the global economy more than 1.1 trillion dollars, a number that is practically unfathomable.

    While the numbers cited here are outrageously large, obviously, these losses aren’t only going to affect “the economy” and “the businesses.” They’re going to have devastating effects on normal folks who just want to go to work, pay their bills, and keep living their lives normally.

    A great deal has been written about the economic hits on a global scale as well as the shortages we could soon expect as production in China grinds to a halt, but what about simply being able to pay your rent when your workplace or business is ordered to shut its doors?

    Something nobody is really talking about is the financial hit that people will be taking during such closures. This is a very real concern, and for families who already live paycheck to paycheck, the loss of income could prove devastating.

    How will containment efforts affect average folks financially?

    All over the world, cities are frantically attempting to contain the virus.

    Yesterday came the news that 10 cities in northern Italy had closed all public venues due to a new cluster of coronavirus patients. The towns, in the Lombardy region, have shuttered restaurants, stores, and schools. Public gatherings like carnival celebrations, church masses, and sporting events have been banned for at least a week. In one town, Casalpusterlengo, an electric sign reads, “Coronavirus: the population is invited to remain indoors as a precaution.” Seventeen people in the region have tested positive for Covid-19, and two have perished there from the illness.

    Millions of people in South Korea have been told to stay at home. Preschools have been closed and public gatherings and demonstrations have been banned.

    Thousands of people in the United States are under voluntary self-quarantine, not to mention the hundreds who have been repatriated and put into mandatory quarantine. Obviously, unless these folks have jobs to which they can telecommute, they’re not working.

    All of these containment measures are certainly wise and in the best interest of peoples’ health. But what about their bank accounts?

    Here’s a scenario that’s seeming less and less farfetched.

    If you’re the owner of a physical business like a store or restaurant, you’re going to have to shut down under any of the kind of mandates mentioned above. When you’re closed, of course, you’re not making money. It’s the same thing with factories (who will be there to produce the goods?) and offices. Your business will grind to a rapid halt.

    And what about employees? Obviously, if you don’t go to work, you’re not going to get paid. And this isn’t just a case of “evil capitalists” who are too stingy to give their employees paid leave. If the business is not running, there is no revenue coming in. That means that even if the business owners were the most generous people alive, they probably couldn’t afford to maintain payrolls for very long.

    So how are you going to pay your bills? It’s safe to expect that the mortgage company, the credit card companies, the utility companies, and all those other businesses with their hands out each month are still going to want their money. And their businesses could potentially carry on to some degree, remotely. That stuff isn’t just going to magically disappear. You’re going to owe that money. Even if companies try to work with folks as they did during the most recent government shutdown, the money will still be owed and you’ll still be unpaid for a week, a month, or however long you were out of work.

    This doesn’t include the cost of food, medication, general expenses, and medical bills – heaven help you if you do get sick.

    What can you do to prepare for this financially?

    Here’s where the situation becomes even more difficult.

    I strongly, adamantly advise getting prepared for being home for a period of time whether that quarantine is official or self-imposed. I advise also that you get prepared for other ramifications of a potential global pandemic, too. And if you aren’t already pretty well-prepped, that is going to cost money.

    That leaves us in a quandary.

    Do you save your money for the possibility of being without work or do you spend your money to feed your family while you’re without work? It’s like a choice between the rock or the hard place.

    If you have an emergency fund, avoid cracking into it for supplies. This will be your cushion for bills if you go for a period of time without work. If you do not have an emergency fund and you’ve been struggling with a paycheck to paycheck lifestyle, things will be a lot tougher.

    Temporarily halt your efforts to pay off debt faster. Pay only the minimum payment for a month or two while we see how this plays out. Put that extra money into your savings account and you can build a small emergency cushion. And if things don’t get bad, you can use it for debt later when things settle down. People always like to say I’m wrong when I suggest that paying off debt isn’t your first priority, but in this situation, keeping your utilities on and a roof over your head is more important than paying some extra interest.

    Raise some money. Now’s the time to try and raise a bit of extra money. Do you have anything you can sell for a chunk of change? Is there a possibility of getting a second job temporarily? Put an ad on Craigslist for that exercise bike being used as a clothes-hanger in the basement. Sell a piece of unwanted jewelry. Get rid of the car nobody drives. Use this money for your emergency fund or for supplies. You will have a lot more difficulty selling it after a crisis because then everyone is going to be broke. If you’re going to do it, do it now.

    If you’re flat broke, things will be more difficult. This isn’t news to you if you’re in this situation. Please know I’m not judging – I’ve been there, so broke that I literally cried over a gallon of spilled milk because it was a week until payday and I couldn’t afford to get more for my children. But this isn’t about emotional responses – it’s about practicality. If you have only a limited amount of money, you’re going to have to prioritize where you spend it. Your credit is most likely already shot if things are this tight, so don’t worry about that right now. Keep a roof over your head, utilities on, food in the kitchen, and a car in your driveway if your job depends on it. Credit card debt should be the last thing you pay in a situation like this. Go read this article, How to Survive When You Can’t Pay Your Bills, for more detailed information.

    Prioritize your supply purchases. While people are frantically buying up N95 masks and PPE, spend your money on the things you need to have on hand during a month or more at home. Sure, I think it’s great to have medical supplies for a possible pandemic, but these measures are to be used if you go out into the germy masses. And your goal should be to avoid doing that. Other reasons you’d need these supplies would be if a family member became ill – you’d want to do your best to avoid contracting the illness yourself while you care for them and you’d want to protect your other family members. The more I learn about this virus though, the less convinced I am that gloves and masks are going to be preventative enough if you’re living in close quarters with an infected person. Look at the rapid rates of transmission aboard the Diamond Princess cruise ship for more information on that. While of course, it is best to have both medical supplies and food, if you can only get one type of supply or the other, focus most of your money on food and other essentials – not PPE.

    Use some of the money coming in for supplies you need to buy. Think about what you would need if you couldn’t leave your house for a month, two months, etc. (It’s pretty difficult to put a time on something like this. China has had people in some areas locked down for a month with no real end in sight.) Here’s some of the stuff I bought to top up our supplies and be prepared for lockdown. Use my list only as a general guideline – you know what your family needs and it will be different from mine. Be sure to include plenty of nutrients in your supplies – you want your immune system to remain highly functional when you could be at risk of contracting an illness.

    At the same time, go for quantity over quality if money is an issue. Get some stuff that is cheap yet filling as the last resort of your pantry. Remember, you want to be able to stay home and not send someone out to be exposed while trying to acquire food. So if that means some peanut butter and crackers or mac and cheese in the back of your pantry, it’s better than getting sick to go out and seek fresh veggies. (And you most likely wouldn’t even be able to find them – expect the supply chain to break down pretty quickly.)

    Talk to the people to whom you owe money. Contact utility companies, mortgage companies, banks, credit card companies, etc., and let them know about your situation. Everyone will be in a similar boat and these businesses may have some suggestions for you. Mortgage companies may be able to offer you a month of grace, credit card companies may make arrangements with you, etc. Do this early on and it will help you plan where your money is going to go during the crisis.

    Prioritize your bills. You need a place to live (although I doubt they’re going to be running around evicting people during a pandemic, you could lose your house afterward unless you can work something out.). You need to keep your utilities on. You may have some other essential spending, too – this will be very individual. Credit card debt and unsecured loans come dead-last in bill-paying during a crisis like this. Other things that are not essential? Cable, which seems like a great option for whiling away the hours when you’re cooped up in the house, is not a priority. Nobody in your family will die without television although some people may act like they’re going to perish from the very idea of it. Each family member having an operable cell phone? Not a priority. Extreme situations may call for measures that people find less than pleasant. Make these decisions early on. A monthly cable bill of $120 would buy you quite a bit of non-perishable food.

    Be frugal. Let’s assume you’re able to work out a deal with the utility companies to pay your overdue bill a month after the crisis has resolved. These aren’t going to be the only bills you are behind on. It would behoove you to be as frugal as possible with utility usage. Don’t leave on every light in the house, don’t crank your heat or air conditioner, and try to keep your bills low so that the amount you pay when things go back to normal isn’t quite as daunting. Trust me, paying 2-3 electric bills at a time will still be a big chunk of money, regardless of how careful you are. Don’t make it worse by acting like you’re in a hotel where you don’t pay for the power used.

    Be ready for the long haul.

    This is a crisis that could have snowballing repercussions and they could last for a very long time. Hopefully, it gets contained and blows over without affecting us too badly. Hopefully, we get lucky and in a few years, the Covid-19 outbreak warrants the same eye-roll that the 2014 Ebola scare does.

    But if it doesn’t – if the scenario described in this article comes to pass – you need to be prepared for a long-haul. You need to be ready for your lifestyle to change fairly dramatically. A loss of more than a trillion dollars from the global economy isn’t something that we’ll bounce back from with “business as usual.”

    • Jobs will be cut as businesses struggle to stay afloat.

    • Businesses will fail.

    • Properties will not sell.

    • Shortages of food and other supplies will occur.

    • If people are unable to pay back debt, expect a banking crisis that makes 2008 look like a rainy Sunday afternoon.

    The same measures taken to contain the virus can cause these economic effects.

    …experts like Richard Schabas, Ontario’s former chief medical officer, worry that draconian measures that stoke fear in the population do more harm than good.

    “Recessions kill people, in fact will probably kill more people than this virus does,” he told CBC News host Michael Serapio last week…

    …”Our world has become so interconnected,” says Jia Wang, deputy director of the University of Alberta’s China Institute.

    Wang suggests that the next few weeks will be critical, showing whether the epidemic, with its global economic impact, is moderating or getting worse…

    …Fear and government restrictions mean people in China have been staying home, slashing the business of retailers and restaurants. Some reports say property sales are down by more than 80 per cent, affecting a business that represents about one-quarter of China’s gross domestic product.

    Wang says that while the country’s giant companies are big enough to outlast the crisis, especially with government help, a significant and dynamic part of China’s economy is based on much smaller businesses that could disappear, leading to lingering economic effects.

    “If the quarantines and shutdowns of many cities around China continue for a few more months or even just one month, many of the smaller companies may not survive,” she said.

    Wang says there are also worries that the coronavirus and its economic effect will spread outside China. Last Friday, Singapore’s president, Lee Hsien Loong. warned the disease could push that country into recession.

    Putting a figure on the global impact is not easy, and estimates of the damage vary widely. Oxford Economics says global growth will fall to 2.3 percent in 2020, the lowest level in more than 10 years and below the IMF’s global recession level. (source)

    Currently, it’s impossible to predict how far this will spread and how bad it will be. There’s no way to know how long quarantine and containment measures will be put into place, or even if they’ll be necessary.

    But be ready for anything, economically speaking. Covid-19 is the wild card that nobody expected.


    Tyler Durden

    Sat, 02/22/2020 – 17:40

  • Girl Who Sued To Stop Biological Males From Running Girls' Track Defeats Trans-Runner For Championship
    Girl Who Sued To Stop Biological Males From Running Girls’ Track Defeats Trans-Runner For Championship

    Now this is a story about actual “girl power”…

    It was only two days after filing a lawsuit against the Connecticut Interscholastic Athletic Conference (CIAC) that Chelsea Mitchell made a much bigger statement than one she could have made in the courtroom. 

    She had sued because the CIAC was permitting biological males to compete in women’s sports, leading one trans runner to win “numerous titles” in women’s events, according to The Daily Wire. 

    So Mitchell decided not just to make a statement in court – but also to make one on the track. She defeated trans runner Terry Miller in the Class S 55-meter dash with a time of 7.18 seconds in the state championships.

    “Mitchell also came first in the 300-meter dash, while Miller was 16th, and Mitchell won the long jump,” according to The Daily Mail. 

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    And there didn’t appear to be any pleasantries exchanged between the two runners after the race, either. The Harford Courant stated: “There was no interaction between the two before or after the race.”

    Mitchell didn’t think her win could negatively affect her lawsuit: “I don’t think it could go against, there’s still tons of girls that lose on a daily basis,” she said.

    Mitchell is a senior at Glastonbury High School. Along with another athlete, Alanna Smith, she filed a Federal lawsuit with their families after the CIAC allowed two biological males to compete in girls’ athletic competitions. Those males went on to take a collective 15 women’s state championship titles, formerly held by 9 different girls. The males took more than 85 opportunities to participate in higher level women’s competitions between 2017 and 2019. 

    “The three plaintiffs have competed directly against them, almost always losing to Miller and usually behind Yearwood. Mitchell finished third in the 2019 state championship in the girls 55-meter indoor track competition behind Miller and Yearwood,” The Daily Mail said. 

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    Mitchell is currently ranked the fastest biological girl in Connecticut and had lost four girls’ state championships and two all New England awards to the males.

    She stated: “I knew that I was the fastest girl here, one of the fastest in the state. I remembered all my training and everything I had been taught on how to maximize my performance … I thought of all the times that other girls have lost. I could feel the adrenaline in my blood and hope that wafted from me. That just possibly, I could win this. Then, the gun went off. And I lost.”

    Biological male Miller had stated in 2019: “I have faced discrimination in every aspect of my life and I no longer want to remain silent. I am a girl and I am a runner. I participate in athletics just like my peers to excel, find community, and meaning in my life. It is both unfair and painful that my victories have to be attacked and my hard work ignored.”


    Tyler Durden

    Sat, 02/22/2020 – 17:15

  • Bizarro Market: Retail Investors Are Now Crushing Hedge Funds
    Bizarro Market: Retail Investors Are Now Crushing Hedge Funds

    As if financial markets needed one more reason to boycott the “smart money” and stop paying 2 and 20 for the “privilege” of underperforming the free S&P500 for the 10th straight year – an S&P which is now actively managed by central banks who step in any time there is even a modest 5% drop in stock prices  – here it is: Retail investors are now crushing the smartest money on Wall Street.

    Yesterday we reported that 2020 has started off dismally for equity hedge funds, whose short books and unwillingness to chase the rally crippled their YTD performance, which is at the very bottom of asset classes tracked by Goldman…

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    … yet it was the impressive outperformance of the most popular longs, also known as the Goldman Sachs Hedge Fund VIP basket of stocks…

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    … that has saved the day for hedge funds, whose performance would have been far worse had it not been for the handful of stocks owned by most hedge funds.

    During the last few months, the most popular hedge fund positions have enjoyed one of their strongest rallies on record. Our Hedge Fund VIP basket, which tracks the most popular hedge fund long positions has returned 24% since the start of 4Q 2019, sharply outperforming both the S&P 500 (+14%) and our basket of the largest short positions. The basket’s return relative to its realized volatility and its outperformance versus the largest shorts each rank as the strongest in the basket’s history. The outperformance of VIPs has continued in early 2020 (+9% YTD), contributing to a 1% YTD return for the average hedge fund.

    And not just hedge funds have piled into the same small group of mega cap stocks: as we pointed out yesterday, it was retail investors, i.e., the “dumb money” that saved the day for the “smartest guys in the room” as they scrambled  to buy the names most widely held by the hedge fund community.

    Recall that the YTD period has been most notable because after a long absence, retail investors finally stormed back into the market with a bang, buying not just stocks, but call options – highly levered bets typically with a 1 week maturity  – on stocks at a time when nothing seemed like it could go down, in the process creating a self-reinforcing tidal wave of buying that has risen all boats, especially those owned by hedge funds.

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    To be sure, it wasn’t just single-stocks as index and ETF options volumes have also soared to record highs…

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    … but yes, a handful of stocks were the biggest benficiaries.

    Goldman confirmed as much, when Ben Snider and David Kostin said that “the most popular hedge fund stocks have also been bolstered by a surge in retail trading activity. The sharp increase in retail trading has lifted a basket of popular retail stocks by 14% YTD and 25% since the start of 4Q 2019.”

    Which brings us to the most remarkable chart we showed yesterday in our recap of the latest quarterly Goldman Hedge Fund Monitor: retail investors, i.e., the “dumb money” has now trounced the performance of hedge funds, incorrectly known as “the smart money” not only YTD, as the 50 most-popular stocks among retail investors rallied 13% so far in 2020, nearly double the 8.7% return for the hedge fund favorites but since the start of 2018.

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    It’s not just the breadth of returns that has diverged between the two investor classes. Picking up on where we left off yesterday, Bloomberg writes on Saturday morning that retail investors have also been far better pickers of blockbuster stocks in 2020: “Only two of their popular holdings have gained at least 50%: Tesla Inc. and PG&E Corp. By contrast, individual investors scored seven such wins. Besides Tesla and PG&E, they reaped big pay-offs from Virgin Galactic Holdings Inc., Plug Power Inc., Sprint Corp., Vivint Solar Inc. and Beyond Meat Inc.”

    These, of course, as the berserker momo names that went parabolic as an army of retail investors staged a call buying spree in one momo name after another, orchestrated out of a peculiar source: the wallstreetbets section on reddit.

    We also know the enabler, of course: the retail investing hordes have the Fed’s QE4 which was launched in October 2019 to thank for the outperformance. It was then that hedge funds had hunkered down and turned short, when Powell instead of allowing the market to drop, injected hundreds of billions in liquidity into the market, bailing out not hedge funds – he did that back in September with the return of repo operations, but retail investors.

    “Retail investors tend to buy what’s just done well, and in a market like we’ve been in the last several years, that’s worked very well,” said Rich Weiss, CIO of multi-asset strategies at American Century Investments told Bloomberg, adding that “if that type of outperformance by the retail basket over the hedge fund basket would persist for another year or longer, that makes quite a statement, if not an indictment, on professional money managers.”

    Rich is right, but only partially: it would make an even bigger statement on the Federal Reserve, which now finds it imperative to intervene in the market to rescue all investors, not just a given wealthy subset.

    But what is worse, is that this intervention by the Fed, and the tremendous outperformance of retail investors over hedge funds, will further bolster optimism among small investors, who are rushing back to the market with the conviction that they are investing geniuses further facilitated after some brokerages eliminated commissions on trades. According to the latest sentiment reading from the Conference Board, the share of respondents expecting stocks to rise in the next year advanced to 43.1% in January, the highest since October 2018.

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    Some additional observations on the two stocks baskets.

    Among the 50 favorite stocks for both hedge funds and retail investors, 13 overlap, with tech giants – Apple Inc., Amazon.com Inc., Facebook Inc. and Microsoft Corp – at the top of both lists. That said, retail investors have gravitated more toward smaller companies, with sixteen of the top 50 picks having a market value of less than $10 billion, compared with six for hedge funds.

    Ultimately it all really boils down to the far higher beta of the retail basket compared to the hedge fund VIPs: which means that while retail investors tend to win big, they also lose big when stocks tumble. As Bloomberg notes, seven of the top retail stocks have fallen at least 10% this year, including Chesapeake and Groupon. Meanwhile, all of the hedge funds’ top selections have fared better.

    For those wondering, here is the full list of the Top 50 “VIP” hedge fund names as of Dec. 31…

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    … and the same list for retail investors.

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    And while it is certainly a novelty to see retail investors outperform hedge funds, we doubt this divergence will last long, especially once the Fed is forced to taper its QE4 in the coming months, at which point the retail panic will be a sight to behold, as will be the length of the list of those furious at Chair Powell.

    Which is why the only thing that matters, in our view, is the list of Top 50 most shorted names. As discussed extensively here in the past, it is the 50 or so most shorted – or hated by hedge fund – names that has year after year been and a far better source of alpha (for those who buy them) as they have significantly outperformed the braoder market due to periodic and vicious short squeezes year after year…

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    … especially in this day and age when the link between fundamentals and asset prices has been terminally severed by central banks, something we described most recently in “Going Against The Wall Street Crowd Has Been The Most Profitable In 5 Years.”

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    Tyler Durden

    Sat, 02/22/2020 – 16:50

  • Bernie Tells "Autocrat" & "Thug" Putin To "Stay Out" Of US Elections, But Also Slams WaPo For Hit Job
    Bernie Tells “Autocrat” & “Thug” Putin To “Stay Out” Of US Elections, But Also Slams WaPo For Hit Job

    The newest evidence-free anonymously sourced claims of Russian interference ahead of the 2020 election is a return to and new twist on Trump and Putin’s supposed three-dimensional chess playing, this latest version which goes something like this:

    …the Kremlin wants Trump for four more years, so the best way to do this is elevate Bernie Sanders as the Democratic nominee — ensuring a Trump win. 

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    Sanders said he’s been briefed on the matter, however, The Washington Post admitted revealingly, “It is not clear what form that Russian assistance has taken.”

    As we noted earlier this seemingly by design puts the Democratic front-runner in a difficult spot, given he runs the risk of being attacked for disbelieving (even disloyalty to) U.S. intelligence, and, by default, defending the Kremlin.

    Naturally, he had to go full anti-Putin to satisfy the Russia-obsessed Democratic base, warning the “autocrat” and “thug” to “stay out out US elections”. 

    “Mr. Putin is a thug. He is an autocrat. He may be a friend of Donald Trump —  he’s not a friend of mine,” Sanders said while in California.

    “Let me tell Mr. Putin: The American people, whether you’re Republicans, Democrats, independents, are sick and tired of seeing Russia and other countries interfering in our elections.”

    He also took the timing of The Washington Post’s reporting to task. Sanders’ intelligence briefing was about a month ago, but has only been made public a day before the crucial Nevada vote.

    “I’ll let you guess, about one day before the Nevada caucus. Why do you think it came out?” he told reporters. “It was The Washington Post? Good friends,” he added sarcastically.

    Sanders had previously questioned of the new allegations, “Show me the proof that Russia is trying to help me” — because, well… zero evidence has actually been presented. Sanders said additionally:

    “I don’t care, frankly, who Putin wants to be president. My message to Putin is clear: Stay out of American elections, and as president I will make sure that you do. In 2016, Russia used Internet propaganda to sow division in our country, and my understanding is that they are doing it again in 2020.”

    But his opponents have predictably already seized on what appears a carefully timed and calibrated smear.

    Joe Biden immediately on the heels of the Post report told a Las Vegas crowd that Russia is “engaged again, right now as we speak, trying to affect not only the general election but who becomes the nominee of the Democratic Party.”

    Elizabeth Warren also chimed in, questioning why the “Russian efforts” were not made public earlier, saying further the Russians “continue to have too much influence”. 

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    Though this is all clearly part of the Democratic establishment’s well-documented ongoing war to prevent a Bernie Sanders nomination, it must be remembered that Sanders himself for years added his own fuel to the Russiagate conspiracy fire when it came to Trump and the Republicans.

    It’s now been repackaged and is coming back to bite him. 


    Tyler Durden

    Sat, 02/22/2020 – 16:25

Digest powered by RSS Digest

Feb 22

Today’s News 22nd February 2020

  • Compliance 101: Gun-Toting Cops Endanger Students And Turn Schools Into Prisons
    Compliance 101: Gun-Toting Cops Endanger Students And Turn Schools Into Prisons

    Authored by John Whitehead via The Rutherford Institute,

    “Every day in communities across the United States, children and adolescents spend the majority of their waking hours in schools that have increasingly come to resemble places of detention more than places of learning.”

    – Investigative journalist Annette Fuentes

    Just when you thought the government couldn’t get any more tone-deaf about civil liberties and the growing need to protect “we the people” against an overreaching, overbearing police state, the Trump Administration ushers in even more strident zero tolerance policies that treat children like suspects and criminals, greater numbers of school cops, and all the trappings of a prison complex (unsurmountable fences, entrapment areas, no windows or trees, etc.).

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    The fallout has been what you’d expect, with the nation’s young people treated like hardened criminals: handcuffed, arrested, tasered, tackled and taught the painful lesson that the Constitution (especially the Fourth Amendment) doesn’t mean much in the American police state.

    For example, in Florida, a cop assigned to River Ridge High School as a school resource officer, threatened to shoot a student attempting to leave school for a morning orthodontist appointment.

    In Pennsylvania, school officials called in the cops after a 6-year-old with Down syndrome pointed a finger gun at her teacher.

    In Kentucky, a school resource officer with the sheriff’s office handcuffed two elementary school children with disabilities, ages 8 and 9. A federal judge made the sheriff’s office pay more than $300,000 (of taxpayer money) to the families, ruling that the handcuffing of  the students “was an unconstitutional seizure and excessive force.”

    Welcome to Compliance 101: the police state’s primer in how to churn out compliant citizens and transform the nation’s school’s into quasi-prisons through the use of surveillance cameras, metal detectors, police patrols, zero tolerance policies, lock downs, drug sniffing dogs, strip searches and active shooter drills.

    If you were wondering, these police state tactics have not made the schools any safer.

    Rather, they’ve turned the schools into authoritarian microcosms of the police state, containing almost every aspect of the militarized, intolerant, senseless, overcriminalized, legalistic, surveillance-riddled, totalitarian landscape that plagues those of us on the “outside.”

    Two years after President Trump announced his intention to “harden” the schools, our nation’s children are reaping the ill effects of gun-toting, taser-wielding cops in government-run schools that bear an uncomfortable resemblance to prisons.

    America’s schools are about as authoritarian as they come.

    From the moment a child enters one of the nation’s 98,000 public schools to the moment he or she graduates, they will be exposed to a steady diet of:

    • draconian zero tolerance policies that criminalize childish behavior,

    • overreaching anti-bullying statutes that criminalize speech,

    • school resource officers (police) tasked with disciplining and/or arresting so-called “disorderly” students,

    • standardized testing that emphasizes rote answers over critical thinking,

    • politically correct mindsets that teach young people to censor themselves and those around them,

    • and extensive biometric and surveillance systems that, coupled with the rest, acclimate young people to a world in which they have no freedom of thought, speech or movement.

    Young people in America are now first in line to be searched, surveilled, spied on, threatened, tied up, locked down, treated like criminals for non-criminal behavior, tasered and in some cases shot.

    In my day, if you talked back to a teacher, or played a prank on a classmate, or just failed to do your homework, you might find yourself in detention or doing an extra writing assignment after school.

    That is no longer the case.

    Nowadays, students are not only punished for minor transgressions such as playing cops and robbers on the playground, bringing LEGOs to school, or having a food fight, but the punishments have become far more severe, shifting from detention and visits to the principal’s office into misdemeanor tickets, juvenile court, handcuffs, tasers and even prison terms.

    Students have been suspended under school zero tolerance policies for bringing to school “look alike substances” such as oregano, breath mints, birth control pills and powdered sugar.

    Look-alike weapons (toy guns—even Lego-sized ones, hand-drawn pictures of guns, pencils twirled in a “threatening” manner, imaginary bows and arrows, even fingers positioned like guns) can also land a student in hot water.

    Even good deeds do not go unpunished.

    One 13-year-old was given detention for exposing the school to “liability” by sharing his lunch with a hungry friend. A third grader was suspended for shaving her head in sympathy for a friend who had lost her hair to chemotherapy. And then there was the high school senior who was suspended for saying “bless you” after a fellow classmate sneezed.

    In South Carolina, where it’s against the law to disturb a school, more than a thousand students a year—some as young as 7 years old—“face criminal charges for not following directions, loitering, cursing, or the vague allegation of acting ‘obnoxiously.’ If charged as adults, they can be held in jail for up to 90 days.”

    These outrageous incidents are exactly what you’ll see more of if the Trump Administration gets its way.

    Increasing the number of cops in the schools only adds to the problem.

    Thanks to a combination of media hype, political pandering and financial incentives, the use of armed police officers (a.k.a. school resource officers) to patrol school hallways has risen dramatically in the years since the Columbine school shooting.

    Indeed, the growing presence of police in the nation’s schools is resulting in greater police “involvement in routine discipline matters that principals and parents used to address without involvement from law enforcement officers.”

    Funded by the U.S. Department of Justice, these school resource officers (SRO) have become de facto wardens in elementary, middle and high schools, doling out their own brand of justice to the so-called “criminals” in their midst with the help of tasers, pepper spray, batons and brute force.

    In the absence of school-appropriate guidelines, police are more and more “stepping in to deal with minor rulebreaking: sagging pants, disrespectful comments, brief physical skirmishes. What previously might have resulted in a detention or a visit to the principal’s office was replaced with excruciating pain and temporary blindness, often followed by a trip to the courthouse.”

    The horror stories are legion.

    One SRO was accused of punching a 13-year-old student in the face for cutting the cafeteria line.

    That same cop put another student in a chokehold a week later, allegedly knocking the student unconscious and causing a brain injury.

    In Pennsylvania, a student was tasered after ignoring an order to put his cell phone away.

    When 13-year-old Kevens Jean Baptiste failed to follow a school bus driver’s direction to keep the bus windows closed (Kevens, who suffers from asthma, opened the window after a fellow student sprayed perfume, causing him to cough and wheeze), he was handcuffed by police, removed from the bus, and while still handcuffed, had his legs swept out from under him by an officer, causing him to crash to the ground.

    Young Alex Stone didn’t even make it past the first week of school before he became a victim of the police state. Directed by his teacher to do a creative writing assignment involving a series of fictional Facebook statuses, Stone wrote, “I killed my neighbor’s pet dinosaur. I bought the gun to take care of the business.” Despite the fact that dinosaurs are extinct, the status fabricated, and the South Carolina student was merely following orders, his teacher reported him to school administrators, who in turn called the police.

    What followed is par for the course in schools today: students were locked down in their classrooms while armed police searched the 16-year-old’s locker and bookbag, handcuffed him, charged him with disorderly conduct disturbing the school, arrested him, detained him, and then he was suspended from school.

    Not even the younger, elementary school-aged kids are being spared these “hardening” tactics.

    On any given day when school is in session, kids who “act up” in class are pinned facedown on the floor, locked in dark closets, tied up with straps, bungee cords and duct tape, handcuffed, leg shackled, tasered or otherwise restrained, immobilized or placed in solitary confinement in order to bring them under “control.”

    In almost every case, these undeniably harsh methods are used to punish kids—some as young as 4 and 5 years old—for simply failing to follow directions or throwing tantrums.

    Very rarely do the kids pose any credible danger to themselves or others.

    Unbelievably, these tactics are all legal, at least when employed by school officials or school resource officers in the nation’s public schools.

    This is what happens when you introduce police and police tactics into the schools.

    Paradoxically, by the time you add in the lockdowns and active shooter drills, instead of making the schools safer, school officials have succeeded in creating an environment in which children are so traumatized that they suffer from post-traumatic stress disorder, nightmares, anxiety, mistrust of adults in authority, as well as feelings of anger, depression, humiliation, despair and delusion.

    For example, a middle school in Washington State went on lockdown after a student brought a toy gun to class. A Boston high school went into lockdown for four hours after a bullet was discovered in a classroom. A North Carolina elementary school locked down and called in police after a fifth grader reported seeing an unfamiliar man in the school (it turned out to be a parent).

    Police officers at a Florida middle school carried out an active shooter drill in an effort to educate students about how to respond in the event of an actual shooting crisis. Two armed officers, guns loaded and drawn, burst into classrooms, terrorizing the students and placing the school into lockdown mode.

    If these exercises are intended to instill fear and compliance into young people, they’re working.

    As journalist Dahlia Lithwick points out: “I don’t recall any serious national public dialogue about lockdown protocols or how they became the norm. It seems simply to have begun, modeling itself on the lockdowns that occur during prison riots, and then spread until school lockdowns and lockdown drills are as common for our children as fire drills, and as routine as duck-and-cover drills were in the 1950s.”

    The toll such incidents take on adults can be life-altering, but when such police brutality is perpetrated on young people, the end result is nothing less than complete indoctrination into becoming compliant citizens of a totalitarian state.

    Schools acting like prisons.

    School officials acting like wardens.

    Students treated like inmates and punished like hardened criminals.

    This is the end product of all those so-called school “safety” policies, which run the gamut from zero tolerance policies that punish all infractions harshly to surveillance cameras, metal detectors, random searches, drug-sniffing dogs, school-wide lockdowns, active-shooter drills and militarized police officers.

    Unfortunately, advocates for such harsh police tactics and weaponry like to trot out the line that school safety should be our first priority lest we find ourselves with another Sandy Hook.

    What they will not tell you is that such shootings are rare.

    As one congressional report found, the schools are, generally speaking, safe places for children.

    In their zeal to crack down on guns and lock down the schools, these cheerleaders for police state tactics in the schools might also fail to mention the lucrative, multi-million dollar deals being cut with military contractors such as Taser International to equip these school cops with tasers, tanks, rifles and $100,000 shooting detection systems.

    Indeed, the transformation of hometown police departments into extensions of the military has been mirrored in the public schools, where school police have been gifted with high-powered M16 rifles, MRAP armored vehicles, grenade launchers, and other military gear. One Texas school district even boasts its own 12-member SWAT team.

    According to one law review article on the school-to-prison pipeline, “Many school districts have formed their own police departments, some so large they rival the forces of major United States cities in size. For example, the safety division in New York City’s public schools is so large that if it were a local police department, it would be the fifth-largest police force in the country.”

    The ramifications are far-reaching.

    There can be no avoiding the hands-on lessons being taught in the schools about the role of police in our lives, ranging from active shooter drills and school-wide lockdowns to incidents in which children engaging in typically childlike behavior are suspended (for shooting an imaginary “arrow” at a fellow classmate), handcuffed (for being disruptive at school), arrested (for throwing water balloons as part of a school prank), and even tasered (for not obeying instructions).

    Instead of raising up a generation of freedom fighters—which one would hope would be the objective of the schools—government officials seem determined to churn out newly minted citizens of the American police state who are being taught the hard way what it means to comply, fear and march in lockstep with the government’s dictates.

    So what’s the answer, not only for the here-and-now—the children growing up in these quasi-prisons—but for the future of this country?

    How do you convince a child who has been routinely handcuffed, shackled, tied down, locked up, and immobilized by government officials—all before he reaches the age of adulthood—that he has any rights at all, let alone the right to challenge wrongdoing, resist oppression and defend himself against injustice?

    Most of all, how do you persuade a fellow American that the government works for him when, for most of his young life, he has been incarcerated in an institution that teaches young people to be obedient and compliant citizens who don’t talk back, don’t question and don’t challenge authority?

    Peter Gray, a professor of psychology at Boston College, believes that school is a prison that is damaging our kids, and it’s hard to disagree, especially with the numbers of police officers being assigned to schools on the rise.

    Students, in turn, are not only finding themselves subjected to police tactics such as handcuffs, leg shackles, tasers and excessive force for “acting up” but are also being ticketed, fined and sent to court for behavior perceived as defiant, disruptive or disorderly such as spraying perfume and writing on a desk.

    Clearly, the pathology that characterizes the American police state has passed down to the schools.

    Now in addition to the government and its agents viewing the citizenry as suspects to be probed, poked, pinched, tasered, searched, seized, stripped and generally manhandled, all with the general blessing of the courts, our children in the public schools are also fair game for school resource officers who taser teenagers and handcuff kindergartners, school officials who have criminalized childhood behavior, school lockdowns and terror drills that teach your children to fear and comply, and a police state mindset that has transformed the schools into quasi-prisons.

    Don’t even get me started on the “school-to-prison pipeline,” the phenomenon in which children who are suspended or expelled from school have a greater likelihood of ending up in jail. One study found that “being suspended or expelled made a student nearly three times more likely to come into contact with the juvenile justice system within the next year.”

    By the time the average young person in America finishes their public school education, nearly one out of every three of them will have been arrested. Nearly 40 percent of those young people who are arrested will serve time in a private prison, where the emphasis is on making profits for large megacorporations above all else.

    Indeed, this profit-driven system of incarceration has also given rise to a growth in juvenile prisons and financial incentives for jailing young people. In this way, young people have become easy targets for the private prison industry, which profits from criminalizing childish behavior and jailing young people.

    None of these tactics are making our communities or schools any safer, and they’re certainly not contributing to environments in which learning flourishes. Incredibly, despite the fact that the U.S. invests more money in public education (roughly $13,000 per child per year) than many other developed countries, we rank around the middle of the pack in science, math and reading, and behind many other advanced industrial nations.

    Without a doubt, change is needed, but that will mean taking on the teachers’ unions, the school unions, the educators’ associations, and the police unions, not to mention the politicians dependent on their votes and all of the corporations that profit mightily from an industrial school complex.

    As we’ve seen with other issues, any significant reforms will have to start locally and trickle upwards.

    For starters, parents need to be vocal, visible and organized and demand that school officials 1) adopt a policy of positive reinforcement in dealing with behavior issues; 2) minimize the presence in the schools of police officers and cease involving them in student discipline; and 3) insist that all behavioral issues be addressed first and foremost with a child’s parents, before any other disciplinary tactics are attempted.

    As I make clear in my book Battlefield America: The War on the American People, if you want a nation of criminals, treat the citizenry like criminals.

    If you want young people who grow up seeing themselves as prisoners, run the schools like prisons.

    If, on the other hand, you want to raise up a generation of freedom fighters, who will actually operate with justice, fairness, accountability and equality towards each other and their government, then run the schools like freedom forums.

    Remove the metal detectors and surveillance cameras, re-assign the cops elsewhere, and start treating our nation’s young people like citizens of a republic and not inmates in a police state penitentiary.


    Tyler Durden

    Sat, 02/22/2020 – 00:05

  • Trump Not Giving Up On "Military Options" For Maduro's Ouster, Considers Naval Blockade
    Trump Not Giving Up On “Military Options” For Maduro’s Ouster, Considers Naval Blockade

    Despite Venezuelan President Nicolas Maduro emerging victorious after last year’s tumultuous events, which included a US assisted coup attempt by a faction of the military last Spring, out of which Washington also maintained a diplomatic fiction that opposition leader Juan Guaidó is actually the president, it appears the White House is still considering military options against Maduro. 

    Bloomberg reports “President Donald Trump is frustrated that pressure is building too slowly on Venezuelan President Nicolas Maduro and is still considering military options in the country, including a naval blockade, a senior administration official said.”

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    Image via CNN

    Apparently the current sanctions regimen and attempt to block all oil exports, which has seen the US go after major oil companies still doing business with state-run PDVSA (most recently sanctioning a subsidiary of Russian state oil major Rosneft), is not putting swift or severe enough pressure on the Maduro government. 

    The goal remains, the unnamed top official told Bloomberg, “securing free and fair elections in Venezuela” — which in Washington-speak really means ensuring US-backed Guaidó secures loyalty of the military and thereby leadership over the country. “The U.S. doesn’t believe that free elections are possible with Maduro in power,” the official said further.

    The report names Spain as a key European barrier to the US and EU campaign to ouster Maduro. Several new initiatives are being undertaken keep keep up and increase the pressure, however, as Bloomberg notes: 

    The U.S. has put several companies that continue to do business in Venezuela on notice, the official said, including India’s Reliance Industries, Spain’s Repsol, Chevron and Greek shippers. Trump is likely to raise the issue of India’s oil imports from Venezuela with Indian Prime Minister Narendra Modi during a two-day visit next week, the official said Friday in a briefing for reporters.

    Trump’s perhaps most aggressive plan of action remains a “naval blockade” of all goods going in and out of the country, which gained a lot of media coverage last August. 

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    The president had frequently vocalized the idea of a naval embargo which would involve multiple warships stationed up and down the South American country’s coastline. 

    But top US military officers were said to have consistently opposed the plan, saying it was impractical and would take away already stretched naval resources busy engaging Iran and China. 

    The White House has further been deeply frustrated that the Venezuelan opposition, which failed to deliver results after a months-long standoff last year and with full Washington support that even likely included covert aid via the CIA. 


    Tyler Durden

    Fri, 02/21/2020 – 23:45

  • Lady Justice Spurns Her Blinders For Trump Associates
    Lady Justice Spurns Her Blinders For Trump Associates

    Authored by Julie Kelly via AmGreatness.com,

    People like Justice Amy Berman Jackson, who claim to hold the greatest devotion to our institutions, who purport to cherish the rule of law above all else, are the ones responsible for systematically demolishing it all.

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    She claim sounded like something from Representative Adam Schiff (D-Calif.) or Rachel Maddow or any number of Russian collusion propagandists:

    “He was not prosecuted for standing up for the president. He was prosecuted for covering up for the president.”

    Those words, however, were not uttered on MSNBC but rather in a federal courtroom by Amy Berman Jackson, a U.S. district court judge seated in the nation’s capital, whose job is to ensure the fair administration of justice based on the rule of law.

    The “he” Jackson was referring to is Roger Stone, a Trump confidant; the “president,” of course, is Donald Trump. 

    Now, Stone wasn’t charged with covering up for the president nor did the indictment against him suggest as much. There was nothing to “cover up” as election collusion is a fantasy concocted by the Democrats and the news media. But the Obama-appointee was on a roll; facts, at that point, didn’t matter to Jackson. (In a tweet Thursday morning, Schiff echoed Jackson’s evidence-free remark, claiming Stone “did it to cover up for Trump.”)

    Her absurd and blatantly political accusation from the bench was just part of Jackson’s 40-minute monologue Thursday morning prior to sentencing Stone to 40 months in prison for lying to Congress, obstructing justice, and witness tampering. (The loquacious judge doesn’t like competition; she put a gag order on Stone last year that is still in effect.)

    The seven charges against Stone stemmed from Robert Mueller’s investigation into nonexistent collusion between the Trump campaign and the Kremlin to sway the outcome of the 2016 presidential election. The Justice Department accused Stone of thwarting a similar investigation conducted by the House Intelligence Committee, then headed by Rep. Devin Nunes (R-Calif.).

    The case against Stone is rooted in the claim that the Russians hacked the email system of the Democratic National Committee—an intrusion, it’s important to note, that is backed up solely by an analysis conducted by CrowdStrike, a private cybersecurity firm. The politically connected company was hired to investigate the breach in the spring of 2016 by Perkins Coie, the same law firm that hired Fusion GPS to do opposition research on Trump. The DNC refused to surrender any devices or data to the FBI, despite several requests by then-director James Comey.

    Stone allegedly, in no small measure due to his own boasting, was in touch with WikiLeaks, the website that eventually leaked the DNC’s hacked emails. His concealment of communications related to WikiLeaks earned Stone and his wife an early-morning FBI raid at their home in January 2019 as the CNN news cameras rolled.

    Former prosecutor Andrew McCarthy wrote this of the government’s case against the eccentric political gadfly prior to his sentencing Thursday: 

    The Stone prosecution is more politics than law enforcement. It was the Mueller probe’s last gasp at pretending there might be something to the Russia-collusion narrative. Notwithstanding that, when the “gee, it sure feels like there could be some collusion here” indictment was filed, over a year and a half after special counsel Robert Mueller was appointed, it had long been manifest that there was no Trump–Russia conspiracy.

    It appears that Jackson, like so many Trump-haters in the Beltway, still clings to the fantasy that the collusion hoax is legitimate.

    Evidently, in the judge’s mind, bad actors like Stone are the only reason why Team Mueller and congressional investigators failed to find what Schiff repeatedly assured the public was convincing evidence of collusion. Jackson told the courtroom prior to her ruling that Stone’s deception “led to an inaccurate, incomplete and incorrect report,” by the Republican-led House Intelligence Committee.

    But there is no evidence to support Judge Jackson’s accusation, nor did she offer any explanation. The lengthy report issued in March 2018—one month after Nunes released his memo revealing for the first time how the FBI deceived the Foreign Intelligence Surveillance Court—details the committee’s yearlong investigation into the matter. The report concluded that while the Russians attempted to interfere in the election, there was no coordination to do so with members of the Trump campaign.

    Jackson’s purpose was clear:

    To assist the Democrats’ nonstop crusade to undermine the credibility of Nunes and his report, and to suggest that if only Trump’s lackeys hadn’t hampered the work of dozens of super-smart investigators working with unlimited resources, proof of the secret conspiracy would have been uncovered and Trump would have been ousted from the White House.

    In a statement by email, Jack Langer, a spokesman for Nunes, told me:

    “Our 240-page report has precisely one sentence that may be inaccurate information provided by Stone. That line had no impact on any of the report’s findings whatsoever. For the judge to use that to characterize our report as inaccurate and incomplete is absurd. Then again, a lot of the judge’s sentencing speech seemed to be regurgitating the Democrats’ debunked talking points about Russian collusion.”

    That was not Jackson’s only impersonation of Adam Schiff; she went full drama queen mode warning that Stone poses an insidious danger to the very foundation of our nation. 

    “The truth still exists, the truth still matters,” Jackson lectured. (This is exactly why we need cameras in federal courtrooms so the public is privy to these sort of self-indulgent performances.)

    “Roger Stone’s insistence that it doesn’t, his belligerence, his pride in his own lies are a threat to our most fundamental institutions. If it goes unpunished it will not be a victory for one party or another. Everyone loses.”

    And it isn’t just enough for the judge to express her outrage about how Roger Stone almost single-handedly destroyed the work of our founding fathers by misleading lawmakers pursuing a concocted crime. No, we all need to rise up to signal our collective “dismay and disgust” at the American menace with a Nixon tattoo—and it must, the judge ordered, “transcend party.”

    Jackson rattled off all the parties who “cared” about making sure Stone paid for his crimes against humanity, including Congress and the American people. (It’s a safe bet most Americans were paying no attention to this trial or could even identify Stone in a lineup.) She took more potshots at Stone; perhaps without being ironic, Jackson called Stone an “insecure” person who craves attention.

    Jackson’s grandstanding might have been met with shrugs (or ignored altogether) in any other political climate but her dire warnings about the necessary consequences for committing perjury and obstructing justice and covering up for political pals demonstrate an astonishing level of hypocrisy if not flat-out complicity in the selective application of the law. 

    The president and his supporters can hardly tolerate lectures about fairness when Trump foes such as Andrew McCabe, James Comey, Hillary Clinton, John Brennan, James Clapper, and others continue to escape justice for far worse crimes.

    Further, unlike Stone, those offenders held positions of power and influence—and abused both in service of achieving their mutual goal that Jackson so dramatically endorsed today: The sabotage of Donald Trump and anyone associated with him. 

    The people, like Jackson, who claim to hold the greatest devotion to our institutions, who purport to cherish the rule of law above all else, are the ones responsible for systematically demolishing it all.


    Tyler Durden

    Fri, 02/21/2020 – 23:25

  • 77-Year-Old Man Pummels Thief After Parking Lot Sneak Attack
    77-Year-Old Man Pummels Thief After Parking Lot Sneak Attack

    Who doesn’t enjoy a fun video where a seemingly elderly looking man beats the shit out of some young punk who tried to steal his cash?

    A behatted old man was minding his own business standing in front of a surveillance camera near a parking lot when a young masked punk in a bright-colored vest suddenly rushes him and tries to rob him.

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    The man pushes back the young lad, then throws up his fists and clocks him right in the jaw. They dance for a bit, eventually moving out of frame. As the video ends, its clear the would-be thief has run away.

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    But why stop there? You know how liberals refuse to believe that armed citizens actually foil crimes? We suspect it’s because they couldn’t imagine showing that kind of courage, but for one southern couple, a pair of off-duty police officers, the ‘good guy with a gun myth’ became a reality.

    The pair foiled a robbery when they chased off a masked suspect who tried to hold up the restaurant.

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    According to ABC, the couple were the only ones eating at the restaurant when the thief approached. The would-be thief was identified and, later, arrested.

    That incident could have played out much differently if it weren’t for Kentucky’s generous 2nd amendment protections.


    Tyler Durden

    Fri, 02/21/2020 – 23:05

  • Subcomandante Bloomberg It Is, "Another 'Obama' Won't Cut It… Folks Ain't Buying That Con Anymore"
    Subcomandante Bloomberg It Is, “Another ‘Obama’ Won’t Cut It… Folks Ain’t Buying That Con Anymore”

    Authored (satirically) by CJ Hopkins, via The Unz Review,

    Break out the pussyhats and vuvuzelas, folks, because the neoliberal Resistance is back, and this time they’re not playing around. No more impeachments and investigations. It’s time to go mano-a-mano with Trump, and they’ve finally got just the bad hombre to do it. No, not Bernie Sanders, you commies. A battle-hardened Resistance fighter. El Caballo Pequeño! El Jefe Mínimo! Subcomandante Michael Bloomberg!

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    Yes, that’s right, Michael Bloomberg, multi-billionaire Republicrat oligarch, has mobilized a guerilla army of overpaid PR professionals, Wall Street sociopaths, liberal racists, and anti-outdoor-smoking fanatics, and is steamrolling toward the Democratic convention to buy a brokered nomination and save America from “Putinism.” He’s had it with you sugary-soft-drink-drinking, chain-smoking, gun-toting, Oxy-gobbling, Hitler-loving, Putinist peasants and your infatuation with Donald Trump. So he’s decided to transform the entire country into a sterile, upscale, fascist themepark where you can rent a studio for $3,000 a month and the cops keep “the darkies” in their place, like he successfully did to New York City.

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    Although his campaign seemed to come out of nowhere (and sort of resembles a desperate attempt to prevent a Bernie Sanders nomination), the Resistance have been planning this corporatist Tet Offensive for quite some time. Apparently, Subcomandante Bloomberg and his inner circle of sub-subcomandantes have been hiding out deep in the mountainous jungles of Manhattan’s affluent Upper East Side (or in the Hamptons, or London, or in one of El Jefe’s other multi-million-dollar homes) since Trump and the Russians invaded the country, waiting for the perfect moment to start inundating the American people with television commercials and social media posts informing them of his “electability.”

    Clearly, that moment has now arrived.

    Bloomberg has spent over $400 million on TV, radio, and digital ads, and it isn’t even Super Tuesday yet. He bought the Democratic National Committee and had them change the rules so he could join the debates (which, based on his poor performance in Las Vegas, might not have been the most brilliant strategy). He has been buying politicians, community organizers, journalists, pundits, his opponents’ campaign staff, Instagram and Facebook influencers, and everyone else he can possibly buy to support his campaign to buy the presidency … which is totally legal, and the American way, and is our only hope of overthrowing the Putin-Nazi Occupation Government and regaining our God-given capitalist freedom!

    Sure, to some folks, it looks … well, unseemly (not to mention decidedly undemocratic), this Wall Street oligarch attempting to bribe and bully his way into the White House, but, given the stakes, what choice do we have? As the corporate media and intelligence agencies have been telling us for the last three years, the country is under occupation by an evil conspiracy of Russian-backed Nazis personally controlled by Vladimir Putin! More or less any moment now, Putin is going to order Trump to nullify the U.S. Constitution, declare martial law, appoint himself Führer, and start rounding up and murdering the Jews … or investigating Hunter Biden, or the spooks who have been trying to force him out of office.

    This Putin-Nazism cannot continue! Trump must be deposed, no matter the cost. As Robert Reich put it in this piece in The Guardian:

    “If the only way we can get rid of the sociopathic tyrant named Trump is with an oligarch named Bloomberg, we will have to choose the oligarch.”

    There you have it, folks. We’ll have to choose Bloomberg, or else his golf buddy, Literal Hitler, will destroy the fabric of democracy, or whatever.

    Another op-ed in The Washington Post, It Might Be Time to Take Bloomberg Seriously, wondered, if it comes down to Bloomberg versus Bernie:

    “Do you choose socialism or capitalism? An ideologue or an executive? Are you really going to ask Americans to trade one extreme for the other, or do you want to offer them a certified, electable moderate?”

    Vox, in its “Case for Michael Bloomberg — Mike Bloomberg and His Billions Are What Democrats Need to Beat Trump,” observes that, sure, Bloomberg has drawbacks, like his history of racist remarks and policies, abusing women, oppressing the poor, and just generally being an arrogant little authoritarian corporatist creep, but hey, he’s apologized for all that stuff, and he’ll probably never do it again.

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    Plus, according to this piece in …uh, Bloomberg Opinion (which “does not necessarily reflect the views and opinions of Bloomberg LP and its owners”), The 2020 Election Is a Choice Between Democracy and Putinism! At the end of the day, once the dust has settled:

    “It will come down to rule of law. In November, Americans will decide whether they will fight for the foundation of liberal democracy and democratic capitalism or whether they will accede to Putinism.”

    You’ll be hearing variations of this message over and over, and over again, as we approach election day in November … that is, assuming Bloomberg and the rest of the Resistance can buy, bribe, badger, and bamboozle enough Democratic voters into nominating him. First, they need to deal with Bernie Sanders and his swarm of kill-crazy commie terrorists (who rumor has it are also being remotely controlled by Vladimir Putin). To do this, all they will need to do is deny Sanders a first ballot win in Milwaukee, which shouldn’t be too hard to accomplish. Sure, a brokered convention will be ugly, but, as Robert Reich said, they’ll have to do it, or else … well, you know, end of democracy.

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    Yes, I’m aware that Subcomandante Bloomberg blew his first debate (prompting Twitter pundits to pronounce him DOA) and that millions of “progressive” Democrats hate him, and that the corporate media are running a lot of “Bloomberg’s Nasty Past” pieces now (in order to maintain the appearance of journalism), but, make no mistake, if he secures the nomination, they’ll be lining up to “reluctantly” endorse him, because the alternative will be Russian Hitler!

    Look, it’s easy to get distracted by the day-to-day ups and downs of the horse race (which is the primary purpose of the horse race, after all) and forget that we are in the middle of a global capitalist War on Populism … a war that GloboCap intends to win. Sure, they will survive another four years of Trump (or even four years of Sanders if they have to), but, at some point, in order to restore “normality,” or “democratic capitalism,” or whatever, they are probably going to need to stop dicking around and install a bona fide global capitalist oligarch in the Oval Office. They are going to need to do this in order to crush the hopes of the populist insurgency that erupted in the Spring of 2016, and led to the rise of Donald Trump, Bernie Sanders, Jeremy Corbyn, the Brexit, the ongoing protests in France, the downfall of Angela Merkel, etc.

    Another Obama is not going to cut it … people aren’t buying that con anymore. No, if the empire is going to reestablish control, it is going to need to take its liberal mask off, and shove a blatant corporatist oligarch like Bloomberg down the public’s throat in order to remind everyone who’s boss. It may not be Michael Bloomberg this time, but it is going to be someone like Bloomberg eventually. Someone powerful, and extremely unpleasant, who will be sold to us as the only one who can save the world from the “Nazis” and the “Russians” … which will necessitate taking some very extreme measures, like the ones we took during the War on Terror. You remember the measures we took back then, don’t you?

    Or what, you think that GloboCap has been manufacturing all this mass hysteria over “Russian election interference” and “Nazi terrorism” for their own amusement? Yeah, that’s probably all it is. It’s probably not a prelude to anything.


    Tyler Durden

    Fri, 02/21/2020 – 22:45

  • Watch Mexican Army Raid Cartel Bunker Found Near US Border City 
    Watch Mexican Army Raid Cartel Bunker Found Near US Border City 

    The number of murders continues to rise under the Andrés Manuel López Obrador (AMLO) government. More than 36,000 people lost their lives in 2019 amid a deepening of Mexico’s drug war. 

    We have routinely shared deteriorating conditions of Mexico in the last half-decade, and the warzones that have developed on many border towns. 

    Last month, the US consulate in Mexico’s border city of Nuevo Laredo issued a warning as intense gunfire broke out across the city. Here’s the audio from the epic gun battle that unfolded (audio is from US side): 

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    Now it appears the Mexican Army has stumbled across a large bunker used by cartels. 

    Breitbart said the “bunker was previously discovered in 2018 and was only used to store damaged vehicles.” 

    Here’s a video of Mexico’s Army entering the structure only to find a charred SUV and bullet casings. 

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    The bunker is located in Vista Hermosa neighborhood of Reynosa, was previously discovered by the Mexican Army in 2018 during a raid that was littered with Claymore mines and had a treasure trove of weapons. 

    Breitbart notes that the bunker was used to store weapons, armored vehicles, and other combat materials for cartels.

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    Why is this concerning? Well, the bunker is just miles away from Texas. The border region is a hotspot for cartel violence that is at risk of spilling over onto US soil and could engender Americans. 

    Some of the most recent gun battles on the border have seen cartel members using machine guns, armored vehicles, explosives, .50 caliber rifles, and other devices that would generally be found in a warzone. 

    All of the above suggests AMLO has lost control of his own country, as his policies are failing to curb violence and arrest cartel gun battles that are routinely occurring on the border. 

    AMLO’s recent deployment of an elite marine force to fight drug cartels on the border was most likely due to pressure by the Trump administration, who cited the total Mexican murder count in 2019 exceeded the 2018 record of 36,685. 

    Trump began increasing pressure on Mexico in November following the murders of three mothers and six of their children in a fundamentalist Mormon compound in the northern state of Sonora. Cartel gunman reportedly ambushed the families while fighting for control of the area where the victims lived.

    It’s only a matter of time before Trump sends in the military to clear out cartels on the border. 


    Tyler Durden

    Fri, 02/21/2020 – 22:25

  • Pope Francis The Taxman
    Pope Francis The Taxman

    Authored by Antonius Aquinas via AnotoniusAquinas.com,

    On the heels of calling for a Marxist economic conference this coming March (“Economy of Francesco”), Jorge Bergoglio (a.k.a. “Pope Francis”) has once again opined on financial matters.  The purported head of the Catholic Church has now designated “tax cuts” as sinful behavior on a par, apparently, with stealing, lying, and adultery:

    Today’s structures of sin include repeated tax cuts for the richest people, often justified in the name of investment and development.

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    Bergoglio did not mention what category of sin advocacy for tax cuts falls under – venial or mortal. 

    Maybe the details of how such a policy ranks in offending Divine Justice will be hammered out at the upcoming Economy of Francesco Commie confab!

    In Bergoglio’s collectivist mind, those who try and keep their wealth from the ravenous demands of the State are somehow denying the poor their just due:

    Every year hundreds of billions of dollars, which should be paid in taxes to fund health care and education, accumulate in tax haven accounts, thus impeding the possibility of the dignified and sustained development of all social agents.

    What Bergoglio and his fellow socialists do not understand is that tax cuts lead to economic growth, whether they are for higher or lower income groups.  The less wealth that the State confiscates, the more is available to be used for saving and investment – two keys to economic growth.  The rich do not horde their money but expand and create businesses which leads to more and better paying jobs for lower income groups who supposedly Bergoglio wants to help.

    The poor will only be uplifted by greater production where more goods and services are available at lower prices.  Redistribution of income via taxation does not create new wealth, but simply transfers existing wealth from the productive class.  Moreover, taxation has the deleterious effect of making individuals produce less since their efforts are siphoned off at the point of a gun.  More taxation means less production and, thus, less and more expensive goods for the poor.

    Of course, this is basic economic theory that any sane person can understand unless one has matriculated to a Western university or college or pays attention to economic ignoramuses like Jorge Bergoglio!

    Bergoglio’s constant attention to the plight of the poor along with other social issues (“climate change,” the environment, immigration) does not align with the vision that the Entity, which created the office that Bergoglio currently holds, had in mind.  On at least two occasions, He counseled His followers to focus their attention on spreading the “good news” instead of earthly concerns:

    For the poor you have always with you:  but me you have not always.  [Mt. 26:11]

    Let the dead bury their dead, but go thou, and preach the kingdom of God.  [Lk. 9: 60]

    While the Church has always sought to protect and help the poor, widows, orphans, and the downtrodden, its primary mission is to preach the Gospel.  Since the time of the Second Vatican Anti-Council, 1962-65, and especially during the “reign” of Pope Francis, evangelization has been condemned and, like tax cuts, is now considered sinful activity.

    Bergoglio’s criticism of tax reduction is, no doubt, aimed at the Trump Administration’s plan for an additional round of tax cuts.  Tax reduction, however, without cuts in government spending will further explode budget deficits which are now even beyond sustainable.

    Without corresponding spending reduction, tax cuts will mean that the Federal Reserve will have to make up for the short fall with further money printing.  One cannot have Big Government and tax cuts simultaneously.  The inevitable monetary crisis will, unfortunately, be blamed on tax cuts and will play into the hands of Bergoglio and his fellow travelers.

    That Bergoglio spends most of his time as a social justice warrior instead of the supposed “vicar of Christ” on earth shows the state of the modern Church.  Worse, when he does speak on matters of faith, his words and actions are riddled with heresy.

    For all those concerned, it is best that “Pope Francis” should be ignored not only for the falsehoods he spreads about Christianity, but also as a social theorist.  His pronouncements on the latter will only lead to further impoverishment of the poor and the rest of society while inciting class conflict between those who seek to keep their wealth and those who want to confiscate more of it.


    Tyler Durden

    Fri, 02/21/2020 – 22:05

  • "The Human Race Could Go Extinct": JPMorgan Fearmongers Climate Change Impact In Leaked Report
    “The Human Race Could Go Extinct”: JPMorgan Fearmongers Climate Change Impact In Leaked Report

    A new explosive report from JP Morgan was leaked out this week titled “Risky business: the climate and the macroeconomy” warns climate change poses a significant macroeconomic risk to the world economy and could result in a “catastrophic” event. 

    “The response to climate change should be motivated not only by central estimates of outcomes but also by the likelihood of extreme events (from the tails of the probability distribution). We cannot rule out catastrophic outcomes where human life as we know it is threatened,” the report advised its top clients. 

    JPM’s David Mackie and Jessica Murray, the authors of the report, said: “climate change would not only impact GDP and welfare directly but would also have indirect effects via morbidity, mortality, famine, water stress, conflict, and migration.”

    They said the impact of climate had been underestimated by governments, adding:

    “Something will have to change at some point if the human race is going to survive.”

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    A “global carbon tax should be introduced immediately” to curb climate change and prevent an epic meltdown of the global economy, the economists warned. 

    JPM has so far been reserved in their language about climate change. Still, the new report offers some insight into fearmongering by the investment bank of how global warming could crash the economy, and how a carte blanch approach is needed to solve the crisis. 

    The so-called climate crisis is a guise for the introduction of green bonds, unlimited fiscal deficits, and MMT, a move that would be orchestrated by central banks, governments, and financial elites to fire up the printing presses once more.

    Financial elites have already crafted a narrative for the average bloke, that governments need to fight climate change immediately through spending vast amounts of money for a green transformation of the economy, or risk economic implosion and loss of life.

    So the illusionary emergency of climate change is nothing more than fearmongering by financial elites who understand that after decades of money printing via central banks risks a global reset in financial assets, and the only way to solve this upcoming crisis is to create another crisis, called the climate change crisis, to trick everyone into believing more money printing is needed to save the world from rising temperatures (but really more money printing shore up financial assets in hopes the everything bubble doesn’t implode in the next recession).

    The reason for this elaborate scheme is that after the 2008 financial crisis, where financial elites were bailed out and the middle class was left to rot, convincing the average person that money printing is needed once more would be a difficult task.  

    So again, financial elites created a fake climate change crisis to offer a policy prescription of money printing to protect their asset bubbles, but simultaneously, make everyone believe that it’s to transform the global economy into a much greener trajectory to save the planet.

    And if you care to read JPM’s leaked report, here it is: 


    Tyler Durden

    Fri, 02/21/2020 – 21:45

  • Escobar: No Weapon Left Behind – The American Hybrid War On China
    Escobar: No Weapon Left Behind – The American Hybrid War On China

    Authored by Pepe Escobar via The Strategic Culture Foundation,

    The New Silk Roads – or Belt and Road Initiative (BRI) – were launched by President Xi Jinping in 2013, first in Central Asia (Nur-Sultan) and then Southeast Asia (Jakarta).

    One year later, the Chinese economy overtook the U.S. on a PPP basis. Inexorably, year after year since the start of the millennium, the U.S. share of the global economy shrinks while China’s increases.

    China is already the key hub of the global economy and the leading trade partner of nearly 130 nations.

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    While the U.S. economy is hollowed out, and the casino financing of the U.S. government – repo markets and all – reads as a dystopian nightmare, the civilization-state steps ahead in myriad areas of technological research, not least because of Made in China 2025.

    China largely beats the U.S. on patent filings and produces at least 8 times as many STEM graduates a year than the U.S., earning the status of top contributor to global science.

    A vast array of nations across the Global South signed on to be part of BRI, which is planned for completion in 2049. Last year alone, Chinese companies signed contracts worth up to $128 billion in large-scale infrastructure projects in dozen of nations.

    The only economic competitor to the U.S. is busy reconnecting most of the world to a 21st century, fully networked version of a trade system that was at its peak for over a millennia: the Eurasian Silk Roads.

    Inevitably this state of things is something interlocking sectors of the U.S. ruling class simply would not accept.

    Branding BRI as a “pandemic”

    As the usual suspects fret over the “stability” of the Chinese Communist Party (CCP) and the Xi Jinping administration, the fact is the Beijing leadership has had to deal with an accumulation of extremely severe issues: a swine-flu epidemic killing half the stock; the Trump-concocted trade war; Huawei accused of racketeering and about to be prevented from buying U.S. made chips; bird flu; coronavirus virtually shutting down half of China.

    Add to it the incessant United States government Hybrid War propaganda barrage, trespassed by acute Sinophobia; everyone from sociopathic “officials” to self-titled councilors are either advising corporate businesses to divert global supply chains out of China or concocting outright calls for regime change – with every possible demonization in between.

    There are no holds barred in the all-out offensive to kick the Chinese government while it’s down.

    A Pentagon cipher at the Munich Security Conference once again declares China as the greatest threat, economically and militarily, to the U.S. – and by extension the West, forcing a wobbly EU already subordinated to NATO to be subservient to Washington on this remixed Cold War 2.0.

    The whole U.S. corporate media complex repeats to exhaustion that Beijing is “lying” and losing control. Descending to sub-gutter, racist levels, hacks even accuse BRI itself of being a pandemic, with China “impossible to quarantine”.

    All that is quite rich, to say the least, oozing from lavishly rewarded slaves of an unscrupulous, monopolistic, extractive, destructive, depraved, lawless oligarchy which uses debt offensively to boost their unlimited wealth and power while the lowly U.S. and global masses use debt defensively to barely survive. As Thomas Piketty has conclusively shown, inequality always relies on ideology.

    We’re deep into a vicious intel war. From the point of view of Chinese intelligence, the current toxic cocktail simply cannot be attributed to just a random series of coincidences. Beijing has serial motives to piece this extraordinary chain of events as part of a coordinated Hybrid War, Full Spectrum Dominance attack on China.

    Enter the Dragon Killer working hypothesis: a bio-weapon attack capable of causing immense economic damage but protected by plausible deniability. The only possible move by the “indispensable nation” on the New Great Game chessboard, considering that the U.S. cannot win a conventional war on China, and cannot win a nuclear war on China.

    A biological warfare weapon?

    On the surface, coronavirus is a dream bio-weapon for those fixated on wreaking havoc across China and praying for regime change.

    Yet it’s complicated. This report is a decent effort trying to track the origins of coronavirus. Now compare it with the insights by Dr. Francis Boyle, international law professor at the University of Illinois and author, among others, of Biowarfare and Terrorism. He’s the man who drafted the U.S. Biological Weapons Anti-Terrorism Act of 1989 signed into law by George H. W. Bush.

    Dr. Boyle is convinced coronavirus is an “offensive biological warfare weapon” that leaped out of the Wuhan BSL-4 laboratory, although he’s “not saying it was done deliberately.”

    Dr. Boyle adds, “all these BSL-4 labs by United States, Europe, Russia, China, Israel are all there to research, develop, test biological warfare agents. There’s really no legitimate scientific reason to have BSL-4 labs.” His own research led to a whopping $100 billion, by 2015, spent by the United States government on bio-warfare research: “We have well over 13,000 alleged life science scientists… testing biological weapons here in the United States. Actually this goes back and it even precedes 9/11.”

    Dr. Boyle directly accuses “the Chinese government under Xi and his comrades” of a cover up “from the get-go. The first reported case was December 1, so they’d been sitting on this until they couldn’t anymore. And everything they’re telling you is a lie. It’s propaganda.”

    The World Health Organization (WHO), for Dr. Boyle, is also on it: “They’ve approved many of these BSL-4 labs (…) Can’t trust anything the WHO says because they’re all bought and paid for by Big Pharma and they work in cahoots with the CDC, which is the United States government, they work in cahoots with Fort Detrick.” Fort Detrick, now a cutting-edge bio-warfare lab, previously was a notorious CIA den of mind control “experiments”.

    Relying on decades of research in bio-warfare, the U.S. Deep State is totally familiar with all bio-weapon overtones. From Dresden, Hiroshima and Nagasaki to Korea, Vietnam and Fallujah, the historical record shows the United States government does not blink when it comes to unleashing weapons of mass destruction on innocent civilians.

    For its part, the Pentagon’s Defense Advanced Research Project Agency (DARPA) has spent a fortune researching bats, coronaviruses and gene-editing bio-weapons. Now, conveniently – as if this was a form of divine intervention – DARPA’s “strategic allies” have been chosen to develop a genetic vaccine.

    The 1996 neocon Bible, the Project for a New American Century (PNAC), unambiguously stated, “advanced forms of biological warfare that can “target” specific genotypes may transform biological warfare from the realm of terror to a politically useful tool.”

    There’s no question coronavirus, so far, has been a Heaven-sent politically useful tool, reaching, with minimum investment, the desired targets of maximized U.S. global power – even if fleetingly, enhanced by a non-stop propaganda offensive – and China relatively isolated with its economy semi paralyzed.

    Yet perspective is in order. The CDC estimated that up to 42.9 million people got sick during the 2018-2019 flu season in the U.S. No less than 647,000 people were hospitalized. And 61,200 died.

    This report details the Chinese “people’s war” against coronavirus.

    It’s up to Chinese virologists to decode its arguably synthetic origin. How China reacts, depending on the findings, will have earth-shattering consequences – literally.

    Setting the stage for the Raging Twenties

    After managing to reroute trade supply chains across Eurasia to its own advantage and hollow out the Heartland, American – and subordinated Western – elites are now staring into a void. And the void is staring back. A “West” ruled by the U.S. is now faced with irrelevance. BRI is in the process of reversing at least two centuries of Western dominance.

    There’s no way the West and especially the “system leader” U.S. will allow it. It all started with dirty ops stirring trouble across the periphery of Eurasia – from Ukraine to Syria to Myanmar.

    Now it’s when the going really gets tough. The targeted assassination of Maj. Gen. Soleimani plus coronavirus – the Wuhan flu – have really set up the stage for the Raging Twenties. The designation of choice should actually be WARS – Wuhan Acute Respiratory Syndrome. That would instantly give the game away as a War against Humanity – irrespective of where it came from.


    Tyler Durden

    Fri, 02/21/2020 – 21:25

  • "Ilhan Omar Did Marry Her Brother", Explosive New Report Confirms
    “Ilhan Omar Did Marry Her Brother”, Explosive New Report Confirms

    The question of whether or not congresswoman Ilhan Omar (yes, the same Ilhan Omar who is constantly bickering about President Trump breaking the law) married her own brother to skirt immigration laws appears to now finally have an answer: yes.

    In fact, Omar told friends “years ago” that the man who went on to become her second husband was, in fact, her brother, according to the Daily Mail. One of those friends has now come forward to reveal how Omar and Ahmed Elmi “scandalized the Somali community in Minneapolis.”

    That friend, Abdihakim Osman, has claimed that Omar said she wanted to get her brother papers so he could stay in the U.S. at the same time she was married to her first husband, Ahmed Hirsi. 

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    Omar and Hirsi

    “No one knew there had been a wedding until the media turned up the marriage certificate years later,” Osman told the Daily Mail. 

    Omar had first been married to Hirsi in 2002 in a private ceremony that was not registered with the state. They had two children. In the late 2000s, however, Elmi began turning up in Minneapolis. 

    Osman said: “People began noticing that Ilhan and Hirsi were often with a very effeminate young guy.”

    He continued: “He was very feminine in the way he dressed — he would wear light lipstick and pink clothes and very, very, short shorts in the summer. People started whispering about him. ‘[Hirsi] and Ilhan both told me it was Ilhan’s brother and he had been living in London but he was mixing with what were seen as bad influences that the family did not like. So they sent him to Minneapolis as ‘rehab’.”

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    Elmi, on the right

    Osman also said: “When [Hirsi] and Ilhan got married, a lot of people were invited. It was a big Islamic wedding uniting two large clans in the Minneapolis community. I would say there were 100-150 people there. When she married Elmi, no one even knew about it.”

    Elmi and Omar married on February 12, 2009 at a Hennepin County office in Eden Prairie, Minnesota. Omar claims she separated with Hirsi in 2008, but because the marriage was “under the table”, so was the alleged separation. Osman claims that while Omar and Elmi moved to Fargo after their marriage, that Omar and Hirsi were still together as husband and wife.

    Osman continued: “She said she needed to get papers for her brother to go to school. We all thought she was just getting papers together to allow him to stay in this country. Once she had the papers they could apply for student loans. They both moved to North Dakota to go to school but she was still married to [Hirsi]. In the Somali way, the only marriage that mattered was the one in the mosque.”

    The lack of paperwork in Somalia has made it difficult to confirm the link as to whether or not Elmi and Omar are truly related. 

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    Omar and Elmi divorced in 2017 before Omar re-married Hirsi, before having her third child with him. Osman “scoffed” at the idea of Omar’s marriage to Elmi being real. Omar then went on to have an affair with her chief fundraiser, Tim Mynett, a married father of one whose company receive more than half a million dollars from Omar’s campaign last year. 

    Omar’s spokeswoman refused comment to the Daily Mail. Instead, he said: “The Congresswoman is focused on the work her constituents sent her to Washington to accomplish.”

    The New York Post said last month that the FBI was investigating the marriage and had met with a source in Minneapolis who handed over a trove of documents related to the marriage. The penalty for marriage fraud is up to five years in jail and a fine of up to $250,000. 

    Hopefully, the new revelations make it clear enough for a formal investigation into Omar to be opened, as she has repeatedly refused to answer questions relating to her marriage. She originally called the allegations “baseless, absurd rumors” and accused journalists of Islamophobia.

    Because, when in doubt, play the victim, right?

     


    Tyler Durden

    Fri, 02/21/2020 – 21:05

  • China's Debts Are Coming Due At The Worst Possible Time
    China’s Debts Are Coming Due At The Worst Possible Time

    Authored by MN Gordon via EconomicPrism.com,

    The economic consequences of coronavirus are quickly piling up like garbage along the streets of Los Angeles.  Breaking supply chains, closed Chinese factories, iPhone disruptions, and massive shortages of Chinese made products.  These developments will most definitely get worse before they get better.

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    The economic impacts will be devastating.  As China flatlines, and first quarter GDP growth approaches zero, the global economy, including the U.S., will also be greatly disrupted.  Perhaps many low-cost, Made in China products will go on indefinite hiatus.  What then?

    Quite frankly, the global economy’s overdue for a synchronized downturn.  Coronavirus may mark the turning point.  But it would have arrived sooner or later, with or without the threat of a burgeoning pandemic.

    Still, the prospect of a great plague makes people all the more excitable.  A run-of-the-mill recession and bear market is one thing.  But add the rapid spread of a hyper contagious virus to the mix, and the human animal is inclined to go mad in unison.

    In the meantime, and despite yesterday’s moderate selloff, the major U.S. stock market indexes are near record highs.  The expectation of ever more Fed intervention has pacified investors.  But that’s not all…

    The yield on the 10-Year Treasury note has slid down to 1.50 percent; near the lower limit of the federal funds rate, which is currently between 1.5 and 1.75 percent.  In other words, the Fed’s next policy move has already been decided by Treasury investors.  Similarly, gold investors, which have pushed the price of gold above $1,620 per ounce, have also preempted the Fed.

    But what’s really going on?  Moreover, should you panic, yet?

    Should You Panic, Yet?

    The answer, no doubt, depends on whether you’re a borrower or a lender.  By this, some context is in order…

    Assuming a financial agreement is made in good faith, both parties stand to benefit.  The lender, having loaned money to a creditworthy borrower, can count on steady coupon payments.  At the same time, the borrower can put the money to a resourceful undertaking; ideally, something that produces a return that’s greater than the loan.

    However, when the borrower doesn’t live up to their terms of the agreement things quickly get ugly.  The borrower may seek relief through bankruptcy court.  The lender may take possession of collateral.  Each case is different.

    Still, when an economy is growing and loans are generally performing, the occasional bad loan can easily be absorbed.  But the longer an economy’s growth run extends, the more complacent lenders become.  Debts pile up higher and higher.  At the same time, the perception of risk diminishes.

    By the top end of the credit cycle, capacity has far outpaced demand.  Businesses and individuals have overextended themselves with the expectation that continued growth will mask their mistakes.  The boom then always ends at the worst possible time.

    At the peak, the financial system has become highly unstable.  Any triggering event will serve to topple it.

    “Neither a borrower nor a lender be,” counseled Polonius in Shakespeare’s Hamlet.  If we had to choose, most of the time it’s preferable to be a lender.  But not always.  For example, after a massive and broad reaching credit binge, borrowers and lenders are both equally screwed…

    China’s Debts are Coming Due at the Worst Possible Time

    Booms and busts fueled by cheap credit are incredibly destructive.  What’s more, they’re exacerbated by central bank efforts to smooth out the business cycle.  Rather than rounding the peaks and tapering the bottoms, stimulative fiscal and monetary policy has the unfavorable effect of magnifying them.

    Coincidence.  Fate.  Serendipity.  Providence.  Destiny.  Karma.  Fortuity.  Kismet.  Or just plain chance.  There is something both eerie and poetic about the genesis of the coronavirus outbreak being China…and at this precise moment in time.

    One of the more reckless examples of destructive stimulus over the last decade is China’s mass concrete binge.  Pumping credit to stimulate construction in China has had the ill-effect of compelling the country to do something extraordinarily incredible.  In short, they’ve mixed up massive amounts of concrete and splattered it across the landscape.

    Specifically, China’s economy used 6.6 gigatons of cement between 2011 and 2014.  What a gigaton is we don’t really know.  But we assume it is something unfathomable heavy.  To put this in perspective, the U.S. used 4.5 gigatons of cement over the last 100 years.

    What in the world compelled an entire nation to behave like utter blockheads?  Unsurprisingly, misguided stimulus policies pushed everyone beyond the absurd.  This mass malinvestment and overbuilt capacity may never realign with the real economy.

    Over the last decade, China has borrowed massive amounts of money to finance one of the biggest infrastructure binges in history.  Roads, bridges, airports, and entire ghost cities were constructed.  The boom was spectacular.  It was also an epic disaster in the making.  Because the debt’s coming due at the worst possible time:

    “More than 2 trillion yuan ($283 billion) of local-government notes will mature in 2020, according to Bloomberg-compiled data — a record and 58 percent more than [2019] level.”

    How will local governments pay their debts when their economy’s on coronavirus lockdown?  Alas, for borrowers and lenders alike, they won’t.


    Tyler Durden

    Fri, 02/21/2020 – 20:45

  • Twitter Tool Could See 'Verified' Users Given Power To Label "Lies" & "Harmful" Tweets
    Twitter Tool Could See ‘Verified’ Users Given Power To Label “Lies” & “Harmful” Tweets

    Twitter is preparing to roll out more ways it intends to censor and “label” speech. The company is also experimenting with giving only blue checkmark “verified” fact-checkers and journalists the power to identify “lies” and label and edit accordingly. What could possibly go wrong? 

    “Twitter is experimenting with adding brightly colored labels directly beneath lies and misinformation posted by politicians and other public figures, according to a leaked demo of new features” obtained by NBC, which first broke the story Thursday. 

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    Twitter CEO and co-founder Jack Dorsey. Image via AFP

    “We’re exploring a number of ways to address misinformation and provide more context for tweets on Twitter,” a Twitter spokesperson said. “Misinformation is a critical issue and we will be testing many different ways to address it.”

    Get ready for a potential new Twitter where essentially all utterances and perspectives on controversial events and data will have to pass through blue checkmark gatekeepers. 

    This is an astounding and Orwellian section from the NBC report: 

    In this version, disinformation or misleading information posted by public figures would be corrected directly beneath a tweet by fact-checkers and journalists who are verified on the platform and possibly by other users who would participate in a new “community reports” feature, which the demo claims is “like Wikipedia.”

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

    Tweets marked as ‘disinformation’ could then be reduced in visibility on the platform. 

    The company said it is only in the early stages of research and work with the demo, and there’s as yet no confirmation of exactly what will be included in the new roll out, expected on March 5th.

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    An image capture of the leaked demo which illustrates how it works, via NBC. Verified community members can flag tweets by public figures or other accounts as “Harmfully Misleading”. 

    Perhaps even more disturbing is that one experimental version of the feature sets up moderating and labeling false information as if it’s a competition among accepted “community members”. 

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

    The NBC report explains: 

    In one iteration of the demo, Twitter users could earn “points” and a “community badge” if they “contribute in good faith and act like a good neighbor” and “provide critical context to help people understand information they see.”

    Supposedly this is to prevent trolls or “ideologues” from inundating the platform as moderators. 

    Twitter, Facebook and other social media giants have been under increased pressure to curtail misleading political information, but no doubt as the above demonstrates the “solution” will only result in severe censorship and a purge of ‘unacceptable opinions’ by establishment gatekeepers — something Twitter has certainly already long been engaged in, as we’ve recently experienced. 

    Groupthink will now be programmed permanently into the platform’s architecture. 


    Tyler Durden

    Fri, 02/21/2020 – 20:25

  • When US Hospitals And Military Publicly Brace For A Pandemic, You Should Pay Attention
    When US Hospitals And Military Publicly Brace For A Pandemic, You Should Pay Attention

    Authored by Daisy Luther via The Organic Prepper blog,

    If you trust the numbers coming out of China (I don’t) it appears that they’re getting their coronavirus epidemic contained. Yesterday they reported the lowest number of new cases in ages, with 349 newly confirmed patients, in a dramatic drop of more than 1300 fewer cases than Tuesday.

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    Xinhuanet, the official Chinese government propaganda news outlet reported:

    NHC spokesperson Mi Feng made the remarks at a press conference in Beijing Wednesday, citing the epidemic data in the province over the past week.

    The daily count of newly cured and discharged cases in Hubei, excluding the capital city of Wuhan, has exceeded the number of newly confirmed cases for four consecutive days as of Wednesday, said Mi.

    He also noted that the number of newly confirmed cases has decreased significantly since Feb. 13 in areas besides Wuhan, and the increase in the cumulative number of confirmed cases has remained flat. (source)

    Of course, there’s plenty of evidence that China has toyed with the numbers all along, so it’s difficult not to take this “good news” with a grain of salt.

    Particularly when hundreds of potentially infected people disembarked the Diamond Princess yesterday to make their ways home to 50 different countries via a wide variety of public transportation options.

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    And particularly when our own government is busily (and visibly) preparing for the potential of a massive outbreak in the United States.

    We didn’t even see these kinds of preparations when we were being warned by the CDC to get ready for an Ebola outbreak back in 2014. Mercifully, we dodged the bullet on that one but it certainly wasn’t because of well-thought-out protocols and procedures. The entire thing was handled so poorly that it could have resulted in disaster. Perhaps we learned from that?

    CDC warned American hospitals are warned to prepare

    Anyone who is a prepper knows that medical items like gloves, N-95 masks, and other PPE are in short supply right now, and hospitals are also concerned about shortages. The CDC issued a warning last week:

    “This is the time to open up your pandemic plans and see that things are in order,” Dr. Anne Schuchat, a top official of the Centers for Disease Control and Prevention, urged hospitals last week.

    “For instance,” she continued, health-care providers need to plan for a “surge at a hospital, the ability to provide personal protective equipment for your workforce, the administrative controls and so forth that you might put place in a health care setting.” (source)

    In a separate interview, Dr. Nancy Messonnier, director of the CDC’s National Center for Immunization and Respiratory Diseases, told reporters, “At some point, we are likely to see community spread in the U.S. or in other countries.”

    How are hospitals bracing for impact?

    Across the country, hospitals are taking steps to prepare for an onslaught of patients who may or may not have the infectious disease. Considering that it’s influenza season and many of the symptoms are similar to those of Covid-19, surge capacity could be reached very quickly.

    Here’s how some hospitals are preparing, according to a CNBC article:

    • San Diego-based Scripps Health is consolidating medical supplies such as masks, gloves, and gowns and backups have been ordered. (Expect that orders to healthcare facilities will be shipped long before ours.) Health-care workers are being taught how to safely reuse N95 respirator masks, in the event of shortages
    • Northside Hospital in Atlanta is watching patients for clinical symptoms and potential exposure to the virus. If they suspect a patent could have been exposed, they will be given a mask and be immediately moved to an airborne isolation room, where they will remain while in the hospital. “Infection control and prevention measures are always a priority,” spokeswoman Katherine Watson said.
    • NYU Langone Health in New York City has classified Covid-19 as a “Level 1 Priority.” A  level 2 or 3 scenario would be when “there is transmission in the city and it begins to impact hospital operations. The health-care system has implemented a conservation plan and medical supplies, especially respirator masks, are only given to staff as needed.”

    Cat Ellis, the author of The Wuhan Coronavirus Survival Manual, warns that hospitals could reach surge capacity very quickly and that it will impact more than people with potential cases of Coronavirus.

    The latest data I could find for how many hospital beds are available in the United States is for 2018 from the American Hospital Association. They put the total number of hospital beds in 2018 at 924,107. This is similar to the data from Stastisca.com, and it confirms that there was still a downward trend in the number of available hospital beds in 2018.

    Assuming the downward trend has continued since 2018, we have less than 924 thousand available beds for every sick person from all causes in the United States. We are facing the potential worst-case scenario of 2,697,300 hospitalizations for Wuhan coronavirus alone.

    This would raise the death toll from all causes as hospitals reach surge capacity. Surge capacity occurs when there is a sudden influx of patients that a hospital becomes overwhelmed and cannot treat any additional sick people.

    In this situation, there are no more beds, and there is not enough hospital staff to treat any more patients.

    Often, during a pandemic, it is not the pandemic illness itself that will kill a person. During the 2014 Ebola pandemic, it was common for people to die of some other health problem, and not Ebola, simply because doctors and nurses were too afraid to come to work. In other places, health care workers also became sick and unable to care for patients, as they were now patients themselves.

    Imagine going into labor in the middle of a pandemic crisis. While homebirth attended by a skilled midwife has consistently proven to be safe and have better outcomes than hospital births, things can and still do go wrong. What if that were to happen during a pandemic with no beds available? What if you or a loved one experienced a heart attack or stroke? What if you were in a car accident or injured in a mob trying to get the last supplies off a grocery store shelf and needed emergency room care? (source)

    Being prepared to treat minor issues at home is very important when hospitals are overflowing with people who may or may not have a potentially deadly illness.

    The US Military is preparing as well.

    An executive order was issued by the Joint Staff and approved by Defense Secretary Mark Esper to officially initiate pandemic plans, the Military Times reports. On Feb. 1, U.S. Northern Command was directed the Joint Staff “to commence prudent planning in their assigned role synchronizing the department’s plans for pandemic flu and disease.”

    However, Navy Lt. Cmdr. Mike Hatfield says that in no way “does the planning indicate a greater likelihood of an event developing. As military professionals, planning for a range of contingencies is something we owe the American people.”

    But in other military news, the Department of Defense has announced that eleven military bases near major airports across the country have set up quarantine camps for possible coronavirus patients. Before you panic and scream “FEMA CAMPS – THEY’RE ROUNDING US UP!” relax. These quarantine areas, at this point, are meant to house only 20 patients.

    The DOD installations and the airports they could support as tertiary backups are:

    • JB Pearl Harbor-Hickam, HI (HNL)
    • Great Lakes Training Center Navy Base, IL (ORD)
    • Naval Air Station Joint Reserve Base, TX (DFW)
    • March ARB, CA (LAX)
    • Travis AFB, CA (SFO)
    • Dobbins ARB, GA (ATL)
    • Fort Hamilton, NY (JFK)
    • Naval Base Kitsap, WA (SEA)
    • Joint Base Anacostia, DC (IAD)
    • Joint Base McGuire-Dix-Lakehurst, NJ (EWR)
    • Fort Custer Training Center (DTW)

    Under the request, DOD support at each location will be limited to providing housing support for up to 20 people as they undergo a period of quarantined observation.  The department will also provide office space for several HHS personnel and their equipment through February 22, 2020. (source)

    Of course, as the situation evolves, these facilities could always be expanded. There are already DoD quarantine facilities for up to a thousand patients.

    Defense Secretary Mark Esper on Saturday approved a request from the Department of Health and Human Services for the possible use of military facilities to accommodate 1,000 people who may have to be quarantined upon arrival from overseas due to a new virus.

    A Defense Department statement said HHS officials requested the use of several facilities capable of housing at least 250 people in individual rooms through Feb. 29. HHS would be responsible for all care, transportation and security of the evacuees, according to the statement. (source)

    The locations for these quarantine facilities are the 168th Regiment, Regional Training Institute, Fort Carson, Colorado; Travis Air Force Base, California; Lackland Air Force Base, Texas; Marine Corps Air Station Miramar, California. These bases are where recently evacuated from Wuhan and from the ill-fated Diamond Princess cruise ship are waiting out their quarantines.

    What does it all mean?

    First of all, it doesn’t mean that you should panic. Let’s get that out of the way first. Panic, as Selco writes, does not lead to good decision-making. You can be aware of what is going on and add it to your arsenal of information to help you make the best choices in the future.

    What it does mean is that the US government is taking this outbreak extremely seriously. Since generally, the party line is “everything will be just fine,” recent actions taken publicly should definitely spark some awareness that this could become serious.

    Preparing for the potential of a Covid-19 pandemic is strongly advisable. (Learn more here.) You have to keep in mind all the other things that could go wrong during a long-term siege of illness. The panic of other people; the fall of systems like utilities, police, fire, and hospitals; and shortages of supplies are all things you should take into account.

    Personally, I’m glad they’re taking it seriously because the handling of the Ebola threat was a near-disaster.

    It’s impossible to say whether this virus will be contained before it becomes widespread in the United States and elsewhere, and it’s also very difficult to predict the ramifications if it does. Viruses mutate, different health systems may handle it better than others, and containment efforts in different areas may be more successful than others – or less.

    But I’d say that the preparations being undertaken by hospitals across the nation and by our own military are a blinking neon sign that we’d be foolish to ignore.


    Tyler Durden

    Fri, 02/21/2020 – 20:05

  • Wall Street Sets Up Scapegoat For Next Market Crash: 'Free Trades' Enticing Retail To Panic-Buy Stocks
    Wall Street Sets Up Scapegoat For Next Market Crash: ‘Free Trades’ Enticing Retail To Panic-Buy Stocks

    Bloomberg’s narrative this morning of why stocks have been racing higher isn’t because central banks are pushing global yields into negative territory thus providing lift for growth stocks, or the dozens of rate cuts in the last year, or the Federal Reserve’s ‘Not QE’ leading to an abundance of liquidity, or record stock buybacks, but as the mainstream financial press states: “Small investors are back. In a big way.” 

    So apparently broke American consumers with insurmountable debts, including auto loans, credit card debt, and student loans, along with virtually no savings, are responsible for the recent rip roar in Tesla, Virgin Galactic, and Apple. 

    Sure… But let’s hear out what Bloomberg has to say. They mention since Ameritrade Holding Corp. offered free trading in October, trading volume from mom and pop brokerage accounts soared. 

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    Ameritrade wasn’t the only one canceling trading fees, and this was seen industry-wide, an attempt by Wall Street to sucker in retail into a spectacular blow-off top that, as we explained above, has been produced by the Federal Reserve. 

    “When you take a bull market and juice it with zero commission trading, we can expect it to generate interest among retail accounts. That, it did,” said Jason Goepfert, president of Sundial. “Retail traders have become manic.”

    Since the start of October, when E*Trade, TD Ameritrade, Charles Schwab slashed trading fees to zero, the S&P500 has soared 13%, and the Nasdaq 100 jumped 24%. 

    Bloomberg fails to mention, and why would they, that rapid growth in the Fed’s balance sheet exploded during the same time. So the perfect narrative to cover up the Fed’s massive money printing to lift stocks, we mentioned here: “One Bank Finally Explains How The Fed’s Balance Sheet Expansion Pushes Stocks Higher” – is to blame retail speculation for the next blow-off top in the stock market. 

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    Enticed by President Trump’s stock market pumping tweets and soaring stock prices, Matt Hermansen, 23, who is a blue-collar worker employed at a concrete company in Oakland, California, said zero trading fees had made him an avid trader. 

    “I’ll invest smaller amounts. Before I never really invested anything less than $1,000, $500 minimum,” he told Bloomberg in a phone interview. “Now, if I have enough to buy an extra share, I’ll do it. I’ll do like $300.”

    TD Ameritrade’s interim president and CEO Steve Boyle said there were 38 days where the number of trades topped 1 million in 4Q, up from 23 days in all of 2019. 

    It’s “a new world in discount brokerage where price no longer clouds the comparison for trades,” Boyle said last month. TD’s monthly volume had already risen 40% from a year ago, averaging 1.4 million trades per day.

    Randy Frederick, a vice president of trading and derivatives at Charles Schwab, said increased trading by retail accounts represents confidence in the bull market. 

    “It’s partially driven by free commissions, but I don’t think it’s just that, because not everyone is offering free commissions,” Frederick said. “The fact that we have been in a bull market for a long time, people are just optimistic. Things are going up and they continue to go up.”

    But again, there are no mentions of the Fed-induced rally – just more white-collar Wall Street execs indicating that it’s retail driving the bull market – not balance sheet expansion and stock buybacks. 

    And hiding at the bottom of the Bloomberg article, a quote via Peter Cecchini, chief global market strategist at Cantor Fitzgerald LP, who says retail investors flooding the market is “creating flashbacks to the internet frenzy in the late 1990s.” 

    “There’s sometimes no fundamental reason for it. It just is based on perception — a perception based on narratives that run only an inch deep,” he said in note. “Let’s see how much longer it persists. This kind of activity often unwinds much faster than the wind up.”

    The chart below illustrates the irrational exubernace in retail traders, betting on a one way market. Though this trend never ends well. 

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    And it’s the aggressive money printing via the Fed, which is the missing link and why many on Wall Street can’t comprehend the latest melt-up in stocks. Nevertheless, the narrative of retail fueling the stock market has already begun, so when the bubble does pop, the Fed and Wall Street can scapegoat retail traders. Funny how things work. 


    Tyler Durden

    Fri, 02/21/2020 – 19:45

  • Woke Irrationality Is Undermining Civilization
    Woke Irrationality Is Undermining Civilization

    Authored by Andrew Fillat and Henry Miller via HumanEvents.com,

    The Seattle School Board recently deemed inequality – too few minorities – in their gifted children program to be more important than nurturing the abilities of these intellectually talented kids. They propose to consign these high achievers to classes that will fail to challenge or engross them, and potentially show them the futility of achievement.

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    “What are they thinking?” we wonder. Presumably, this school board is not comprised of stupid, corrupt, or ill-intentioned people. But what could motivate this kind of policy change?

    Of course, people have a right to be ignorant and to make bad decisions. Just as we can choose to damage our health by overeating, smoking cigarettes, and neglecting to take prescribed medications, we can also choose to remain uninformed on policy issues. Sometimes, it might even make sense to do so.

    According to economists, “rational ignorance” comes into play when the “cost” (usually meaning the effort) of gaining enough understanding of an issue to be able to make an informed decision relating to it outweighs the benefit that one could reasonably expect from doing so. For example, many who are preoccupied with family, school, work, and mortgages may not consider it worthwhile to sift through a mass of arcane data to understand, say, the risks and benefits of nuclear power, plasticizers in children’s toys, or genetically engineered crops.

    A quarter century ago, the cosmologist Carl Sagan expressed concern about the trend toward a society in which, “clutching our crystals and religiously consulting our horoscopes, our critical faculties in steep decline … we slide, almost without noticing, into superstition and darkness.”

    More recently, British polymath Dick Taverne warned that, “in the practice of medicine, popular approaches to farming and food, policies to reduce hunger and disease, and many other practical issues, there is an undercurrent of irrationality that threatens science-dependent progress, and even the civilized basis of our democracy.”

    In everyday life, public policy, and even in the decisions made by elite universities, we are seeing such dire predictions validated.

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    Climate change protesters.

    MISSING THE FOREST FOR THE TREES

    A variation on these ponderous themes is the kind of thing we recently encountered in an article published by Stanford University’s news service that seems a perfect example of largely symbolic idealism: “simple, but meaningful steps [people on campus] can take to reduce their environmental footprint.” Those steps consist of actions like converting lights to LEDs, updating aerators to save water, and reducing the use of disposable packaging and utensils.

    Those actions are aimed at addressing climate change at the micro level, and there’s nothing wrong with them, to be sure. Certainly, small contributions can make a difference if they’re aggregated across a large population. But at Stanford, they seem to be missing the forest for the trees. At the same time the university encourages those baby steps, it embraces and encourages organic farming, which is wasteful of water and arable land. The university’s organic gardens prohibit the cultivation of plants crafted with modern genetic engineering technologies (including a groundbreaking one that was co-invented by a Stanford professor), and, incredibly, invited Vandana Shiva, an aggressively anti-science and anti-technology activist, to lecture to its students. Her rejection of modern agricultural technologies and encouragement of primitive farming methods in poor countries leads to low yields, vulnerability to pests and diseases, under-nutrition, and diminished longevity.

    The dissonance between Stanford’s ostensible priorities – preeminence in science and technological innovation, and environmental stewardship – and its actions is a prime example of the schizophrenia of much of America’s liberal intelligentsia.

    Too often, even when small actions make sense, the attempts to generalize and expand the good intentions to a larger scale go wildly awry. We could go on and on about the wrong-headed, proposed remedies for climate change, but consider the following examples:

    • The U.S. has only around 2-3% (and dropping) of the world’s coal generating capacity. Disrupting the coal industry by governmental fiat makes little sense because it is already shrinking from free market forces like the availability of cheap natural gas. Even if every plant were to close tomorrow, there would be no discernible impact on climate change  (Note: Japan, on the other hand, is planning to build 22 new, coal-fired power plants).

    • Speaking of natural gas, why would we want to block pipelines, exploration, and the use of a resource that makes our country energy independent and reduces carbon emissions? Emissions began to decline significantly in 2005, coincident with the shale gas revolution, which ended our dependence on foreign suppliers of energy.

    • Wind power is no salvation. The cost and pollution involved in building the monster wind turbines offset any real benefit (in terms of dollars and environmental effects) many years into the future—if ever. And that doesn’t include the negative effects of building the massive batteries needed to make this form of power compatible with the realities of demand and distribution.

    • Nuclear power continues to be largely ignored, although it is the only purely manmade form of zero-emissions energy.

    The broader point is that, echoing Professor Sagan and Lord Taverne, we are increasingly sacrificing common sense and rationality to a kind of mindless idealism.

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    Climate change protesters.

    THE LIMITS OF QUIXOTIC THINKING

    The most likely explanation for the policy shift the Seattle School Board is considering is that they, too, have capitulated to idealism and have been blinded by identity politics into believing that all people are, literally, created equal—not just in the eyes of the law, but in innate characteristics including intelligence. According to this view, differentiating people by accomplishments is hurtful if the outcome does not precisely mirror the racial, gender, ethnic, and cultural dimensions through which everyone can be categorized. Any underrepresented cohort in these political categorization schemes is, by default, considered to be victimized, and the system must, ipso facto, be racist, sexist, homophobic, etc.

    But if this is a valid viewpoint, we would ask, “Why isn’t everybody athletically talented enough to play professional sports if they choose?” and, “Why can’t everybody become a coloratura soprano or a published poet?”

    Those questions are fundamentally no different than, “Why can’t everybody solve complex math and engineering problems like the smartest kids at M.I.T.?”

    The ideal of perfect equality fails in the real world, so why distort policy to try to achieve the impossible?

    This situation has been a long time coming. It began when parents somehow acquired the notion that disappointment or hurt feelings was something their kids should, and could, be entirely spared. But that fails to distinguish between learning opportunities, where disappointment is constructive – every child must at some point learn that he can’t always win the spelling bee or get all A’s – and the kind of damage to self-esteem that might justify protection.

    This trend has led to “participation trophies,” safe spaces, crying booths, protection from micro-aggressions and “trigger words,” and, more recently, the “right” not to be made to feel uncomfortable.  British writer and TV personality Piers Morgan has called it the “snowflake and victimhood culture.”

    This new entitlement is a major contributor to the adoption of feelings-based policies that reject the need to seek rational validation. Fact-based debate no longer seems necessary, if passion and good intentions suffice. Unwelcome facts can be ignored, repudiated, or “cancelled,” if social media condemns them.

    Entitlement is everywhere. Identity is everything. Measures of merit are no longer a crucial factor for judging people’s status. Virtuous ideas and virtue-signaling are sacrosanct, regardless of their grounding in reality.

    Although individuals are entitled to believe in horoscopes, trust in crystals to bring good luck, or buy into quack medical cures, such irrationality becomes a serious threat to society when it is allowed to influence public policy. For that reason, we need to choose political leaders who understand the limits of quixotic thinking, or we will continue to confront financial albatrosses like the Green New Deal and California High Speed Rail Consortium (aka the Train to Nowhere). If we tolerate the dominance of ideological purity and good intentions over reason, perils lie ahead.


    Tyler Durden

    Fri, 02/21/2020 – 19:25

  • "They're Traumatized": Governments Ignore Plight Of Foreign Students Trapped In Wuhan
    “They’re Traumatized”: Governments Ignore Plight Of Foreign Students Trapped In Wuhan

    Beijing wasn’t thrilled last month when the US, UK, Japan, South Korea and a bevy of other developed nations demanded they be allowed to evacuate their citizens from virus-stricken Wuhan, instead of leaving them to survive or die of the plague or starvation as essentials run low in a city of 11 million on lockdown.

    It accused foreign governments of being alarmist and acting hysterical. Interestingly, many countries, mostly in Africa, that had large numbers of students and others either studying or working in the city, opted not to pursue to evacuation route, pledging to find some other way to meet their peoples’ needs.

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    That was a month ago.

    Now, many young African students are exasperated by their governments, which they claim have basically abandoned them either to avoid straining ties with Beijing, or simply because they can’t risk introducing the virus to their impoverished and deeply unprepared health-care systems.

    According to Reuters, one Ugandan student in Wuhan is living in a crowded dorm. With no money, she survives on one meal a day. The student’s mother, who wakes up at 3 am Uganda time every day to talk with her daughter on WeChat, told Reuters that the young students have been “traumatized” by the experience.

    “They are traumatised,” said Namusisi, who wakes up at 3 a.m. every day to talk to her daughters over the Chinese messaging service WeChat. “They ask, has Uganda given up on us?”

    Not a single sub-Saharan country has flown their citizens home from Wuhan. And neither has Pakistan, which relies on China’s support in its eternal struggle against India, especially as tensions between the two have run especially high in recent years.

    According to DW, there are around 1,300 Pakistani students currently in Hubei province, 800 of them in Wuhan, the province’s capital, and epicenter of the virus, which has been under lockdown for weeks. Their families gathered in Islamabad on Thursday to demand the government do something to rescue their children.

    A group of Pakistani students studying in Beijing were allowed to leave the country earlier this month. But for the students in Wuhan, the government is only in intermittent contact with them and their families. The consensus is that the students will be left to wait out the outbreak.

    Not only are the students living in “constant fear” of catching the virus, they are also struggling against food shortages.

    Some of the students told DW that they are living under the constant fear of catching the virus. Asif Sajjad, a student at Wuhan University, said that many of them are suffering from psychological stress.

    “We have been confined to our rooms for weeks. If anyone coughs or sneezes, it sends a shiver down our spines to think the person may have caught the virus,” he said.

    “There are food shortages, and even if we go out on the balcony, we have to cover our face. We want to know why the government does not bring us back.”

    The Chinese government says it has taken adequate measures to protect foreign students in Wuhan and elsewhere in Hubei.

    But one student complained that he didn’t even have the “recommended” facemasks mandated by health officials in China amid a widespread shortage in China. He claimed the government could have at least helped him and students like him obtain supplies.

    “In addition to that we have not been provided with the recommended masks, but only the simple masks,” he said, adding that the proximity of hospitals to the campus was also a concern.

    “It seems the Pakistani government is not concerned about us at all. Even poor countries like the Maldives have taken out their students but we are still stuck here living in constant fear.”

    After telling Reuters that she had gone to the Ugandan parliament seeking help, but come up empty handed, the Ugandan mother we mentioned above recounted the story about how she told her daughters to run and go shopping as soon as they told her about the quarantine.

    When Margaret Ntale Namusisi’s three daughters called her in Uganda to say they were being quarantined at their university in Wuhan, China, because of the coronavirus outbreak, she sent money and told them: “Run very fast and do shopping.”

    At this point, there appears to be little their families can do. Their governments have kowtowed to Beijing, which has refused to publicly acknowledge that it isn’t winning the fight against the virus, and that the outbreak should be cleared up by springtime, as President Trump once said.

    But pretty soon, the biggest concern for these students won’t just be evading the virus. It’ll be about survival as food stocks run out and millions begin to starve.

    At least, that would be the worst-case scenario…


    Tyler Durden

    Fri, 02/21/2020 – 19:05

  • UK Suspects All Kids Using Chat App Are Hackers, Should Be Reported By Parents
    UK Suspects All Kids Using Chat App Are Hackers, Should Be Reported By Parents

    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.

    UK urges parents to report their kids to police for using normal technology

    Police in the UK are distributing a flyer to teachers in public schools, to be passed on to parents.

    The poster warns parents to check their children’s computers for certain technology, as it could be a sign that their child is a hacker.

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    The flyer names anonymous browser TOR, voice chat service Discord, computer operating system Kali Linux, and Virtual Machines used to run different operating systems on the same computer.

    These are all, by the way, perfectly legal. And they are useful for plenty of activities besides hacking.

    The poster says Discord is “often used to share hacking tips.” But you’re more likely to find a teen using Discord to chat while playing Fortnite.

    Kali Linux is useful for penetration testing used to boost cyber security and protect against hacking threats. It should be encouraged among teens if parents want them to train for the modern economy, and protect themselves against hackers.

    And worst of all, the flyer encourages parents to CALL THE POLICE on their own children, for using these perfectly legal computer programs.

    Click here for the full story.

    *  *  *

    IRS warns Fortnite users to pay tax on their virtual currency

    Until last week, the IRS website advised players of the video game Fortnite that their pretend money could face a real tax.

    The IRS used the in-game virtual currency V-bucks as an example of a potentially taxable convertible currency.

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    V-bucks are purchased with real dollars but used only in the game to buy upgrades. They aren’t actually convertible back to dollars.

    Now the IRS has clarified that if the money stays in the game, it is not taxable.

    But if a video game currency were to leave the game, it triggers a potentially taxable event.

    Just like Bitcoin or other cryptocurrencies, the IRS treats all virtual currencies–including video game money– like property.

    That means if you make money on the sale of the currency– or if you spend the currency after it has increased in value– that is a capital gain.

    Click here for the full story.

    *  *  *

    New York Judge orders removal of 20 stories from NYC skyscraper

    New York City has a lot of zoning rules, but plenty of exceptions.

    For instance, builders can buy the unused zoning rights of adjacent properties.

    Say the zoning laws limit a property to 20 floors, but a building is only 15 stories tall. A next-door property could buy the rights to the remaining five floors, and make their own building 25 stories.

    One particular project used this loophole aggressively to gain permission to build a 51 story building. They got all the necessary permits from the city for the build.

    But activists weren’t happy. They sued the builders over what they called a “gerrymandered” zoning lot. But the builders had permission, so they kept building.

    Now the structure of the building is already completed, but a New York Judge just ruled for the activists.

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    He ordered the city to revoke the building permit, and ordered the builders to REMOVE at least 20 floors from the building.

    Click here for the full story. 

    *  *  *

    5 years and $2 million later, city still hasn’t finished building a bike rack

    Falls Church, Virginia planned to spend $600,000 each for covered bike racks at two of the city’s Metro stations.

    The 92-bike racks were supposed to be completed in 2015.

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    Now, five year later, the cost of the bike racks has reached $1.9 million EACH… but they still aren’t finished.

    This city spent over $20,000 per bike parking spot, and has nothing to show for it.

    But we should totally trust the government with more responsibility and control over our lives.

    Click here for the full story.

    *  *  *

    NYC’s ‘serial subway robber’ praises the elimination of bail

    A new bail reform law in New York prevents judges from requiring bail for most misdemeanors, and some non-violent felonies.

    After a suspect is processed, they are released without having to pay anything.

    And it’s great to see fewer people being locked in cages for victimless crimes like smoking a plant.

    But there is always someone waiting to abuse the system.

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    Case in point, Charles Barry has been arrested six times since the law went into effect on January 1st. He likes to hang out in the subway and snatch money from a hand, pickpocket, or pose as a subway worker.

    Now every time he is arrested, Barry is quickly back on the streets to steal again.

    Leaving the courthouse the last time, he praised the new law, yelling to reporters, “Bail reform, it’s lit! You can’t touch me, I can’t be stopped…I take $200, $300 a day of your money… It’s a great thing. It’s a beautiful thing.”

    Barry also has a habit of missing court dates, which requiring bail is supposed to prevent.

    We’re no strangers to writing about people being arrested for the most trivial reasons. So I’d rather see a few guys like Barry walk free in exchange for countless innocent people spared from sitting in a cell.

    But it’s just frustrating that legislators couldn’t be bothered to insert a couple of lines of text into the bill to prevent actual criminals like Charles Barry from taking advantage of much needed reform.

    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, 02/21/2020 – 18:45

  • US Will No Longer Tolerate Russia's "Non-Compliance" Of Open Skies Treaty: Esper
    US Will No Longer Tolerate Russia’s “Non-Compliance” Of Open Skies Treaty: Esper

    US Secretary of Defense Mark Esper has slammed Russia’s longtime “non-compliance” to the Open Skies treaty, months after the Trump administration expressed a desire to nix it along with the recently defunct Intermediate-Range Nuclear Forces Treaty (INF).

    Esper told reporters at US Strategic Command on Thursday that the US has yet to finally determine whether it will stay the course with the treaty, but underscored that Washington “can’t continue” to tolerate Russian “noncompliance” with the treaty.

    “So far, no formal final decision has been made. In due course we will be getting together to do that, to decide the best path forward for our nation,” Esper said.

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    ‘Open Skies’ flight file image, via the European Council on Foreign Relations.

    “I take no view one way or the other with regard to arms control in general. They should be in our national interests if we’re going to enter an agreement or continue an agreement. The place where we begin is compliance with what’s happening on those agreements.” Esper continued. 

    The Trump administration notified NATO in late November that the US is mulling pulling out of the treaty unless Russian non-compliance issues are rectified.

    The Americans and Russians have for years quarrelled over specifics, including what reconnaissance cameras and equipment should be allowed, but more importantly Russia’s restriction of US overflights near Kaliningrad and Georgia, as detailed in the following: 

    U.S. critics of the treaty have raised concerns about Russian compliance with the treaty, citing, in particular, Russia’s refusal to allow observation flights within 500 kilometers of Kaliningrad or within a 10-kilometer corridor along Russia’s border with the Georgian border-conflict regions of South Ossetia and Abkhazia. The United States has reciprocated by restricting flights over the Pacific Fleet in Hawaii and the missile defense interceptor fields in Fort Greely, Alaska.

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    Secretary of Defense Mark Esper, via the AP.

    The post Cold War treaty, ratified in 2002, allows its 34 member states to conduct short-notice, unarmed observation flights to monitor other countries’ military operations in mutual verification of arms-control agreements. 

    The treaty even allows Russian recon flights over tightly restricted Washington D.C. airspace — in past years Russian Tupolev Tu-154s have even flown at low altitude over such sensitive sites as Andrews Air Force Base in Maryland, the US Capitol, the Pentagon, and CIA headquarters in Langley. 

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    A senior administration official previously said of Open Skies, “This is a U.S. position—that we think this treaty is a danger to our national security. We get nothing out of it. Our allies get nothing out of it, and it is our intention to withdraw.”


    Tyler Durden

    Fri, 02/21/2020 – 18:25

  • Trump Slams Oscars For Giving Best Picture Award To A Foreign Movie
    Trump Slams Oscars For Giving Best Picture Award To A Foreign Movie

    Authored by Paul Joseph Watson via Summit News,

    President Trump went off last night on the Oscars for giving its top prize to a foreign movie.

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    During a speech to a crowd in Colorado Springs, Colorado, Trump asked why an American film wasn’t given the award.

    “By the way, how bad were the Academy Awards this year — did you see?” he asked.

    “‘And the winner is a movie from South Korea’ — what the hell was that all about? We got enough problems with South Korea with trade. On top of it, they give them the best movie of the year? Was it good? I don’t know.”

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    The president was referring to Parasite, a South Korean black comedy thriller.

    “Let’s get Gone With the Wind — can we get, like, Gone With the Wind back, please?” asked Trump.

    The president also said he was never a fan of Brad Pitt, who used his speech at the Oscars to attack Trump over the impeachment process.

    Neon, the film company that distributed Parasite, responded to Trump by tweeting, “Understandable, he can’t read,” yet another “Orange man stupid, orange man bad” sick burn that earned nearly 150,000 likes.

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    As we highlighted yesterday, if you thought Hollywood wasn’t ‘woke’ enough, it’s about to get a whole lot more politically correct.

    Major Hollywood studios are set to use a new tool that scans movie & TV scripts and flags up any examples where “diversity” is not portrayed positively or “gender roles” are not adequately represented.

    The tool bears some hallmarks to Soviet realism, where every piece of art had to mimic the criteria of a prescribed style in order to “educate citizens on how to be the perfect Soviets” and “limit popular culture to a specific, highly regulated faction of emotional expression that promoted Soviet ideals.”

    *  *  *

    My voice is being silenced by free speech-hating Silicon Valley behemoths who want me disappeared forever. It is CRUCIAL that you support me. Please sign up for the free newsletter here. Donate to me on SubscribeStar here. Support my sponsor – Emergency Survival Foods – delicious dishes & a 25 year shelf life!


    Tyler Durden

    Fri, 02/21/2020 – 18:05

Digest powered by RSS Digest

Feb 21

Today’s News 21st February 2020

  • Escobar: 'Westlessness' As A Cover For US Vs. China
    Escobar: ‘Westlessness’ As A Cover For US Vs. China

    Authored by Pepe Escobar via The Asia Times,

    Few postmodern political pantomimes have been more revealing than the hundreds of so-called “international decision-makers,” mostly Western, waxing lyrical, disgusted or nostalgic over “Westlessness” at the Munich Security Conference. 

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    “Westlessness” sounds like one of those constipated concepts issued from a post-party bad hangover at the Rive Gauche during the 1970s. In theory (but not French Theory) Westlessness in the age of Whatsapp should mean a deficit of multiparty action to address the most pressing threats to the “international order” – or (dis)order – as nationalism, derided as a narrow-minded populist wave, prevails.  

    Yet what Munich actually unveiled was some deep – Western – longing for those effervescent days of humanitarian imperialism, with nationalism in all its strands being cast as the villain impeding the relentless advance of profitable, neocolonial Forever Wars. 

    As much as the MSC organizers – a hefty Atlanticist bunch – tried to spin the discussions as emphasizing the need for multilateralism, a basket case of ills ranging from uncontrolled migration to “brain dead” NATO got billed as a direct consequence of “the rise of an illiberal and nationalist camp within the Western world.” As if this were a rampage perpetrated by an all-powerful Hydra featuring Bannon-Bolsonaro-Orban heads.  

    Far from those West-is-More heads in Munich is the courage to admit that assorted nationalist counter-coups also qualify as blowback for the relentless Western plunder of the Global South via wars – hot, cold, financial, corporate-exploitative. 

    For what it is worth, here’s the MSC report. Only two sentences would be enough to give away the MSC game:

    “In the post-Cold War era, Western-led coalitions were free to intervene almost anywhere. Most of the time, there was support in the UN Security Council, and whenever a military intervention was launched, the West enjoyed almost uncontested freedom of military movement.”

    There you go. Those were the days when NATO, with full impunity, could bomb Serbia, miserably lose a war on Afghanistan, turn Libya into a militia hell and plot myriad interventions across the Global South. And of course none of that had any connection whatsoever with the bombed and the invaded being forced into becoming refugees in Europe.

    West is more

    In Munich, South Korean Foreign Minister Kang Kyung-wha got closer to the point when she said she found “Westlessness” quite insular as a theme. She made sure to stress that multilateralism is very much an Asian feature, expanding on the theme of ASEAN centrality.

    Russian Foreign Minister Sergey Lavrov, with his customary finesse, was sharper, noting how “the structure of the Cold War rivalry is being recreated” in Europe. Lavrov was a prodigy of euphemism when he noted how “escalating tensions, NATO’s military infrastructure advancing to the East, exercises of unprecedented scope near the Russian borders, the pumping of defense budgets beyond measure – all this generates unpredictability.”

    Yet it was Chinese State Councilor and Foreign Minister Wang Yi who really got to the  heart of the matter. While stressing that “strengthening global governance and international coordination is urgent right now,” Wang said, “We need to get rid of the division of the East and the West and go beyond the difference between the South and the North, in a bid to build a community with a shared future for mankind.”

    “Community with a shared future” may be standard Beijing terminology, but it does carry a profound meaning as it embodies the Chinese concept of multilateralism as meaning no single state has priority and all nations share the same rights.

    Wang went farther:

    The West – with or without Westlessness– should get rid of its subconscious mentality of civilization supremacy; give up its bias against China; and “accept and welcome the development and revitalization of a nation from the East with a system different from that of the West.” Wang is a sophisticated enough diplomat to know this is not going to happen.

    Wang also could not fail to raise the Westlessness crowd’s eyebrows to alarming heights when he stressed, once again, that the Russia-China strategic partnership will be deepened – alongside exploring “ways of peaceful coexistence” with the US and deeper cooperation with Europe.

    What to expect from the so-called “system leader” in Munich was quite predictable. And it was delivered, true to script, by current Pentagon head Mark Esper, yet another Washington revolving door practitioner.

    21st Century threat

    All Pentagon talking points were on display.

    China is nothing but a rising threat to the world order – as in “order” dictated by Washington. China steals Western know-how; intimidates all its smaller and weaker neighbors; seeks an “advantage by any means and at any cost.”

    As if any reminder to this well-informed audience was needed, China was once again placed at the top of the Pentagon’s “threats,” followed by Russia, “rogue states” Iran and North Korea, and “extremist groups.” No one asked whether al-Qaeda in Syria is part of the list.

    The “Communist Party and its associated organs, including the People’s Liberation Army,” were accused of “increasingly operating in theaters outside China’s borders, including in Europe.” Everyone knows only one “indispensable nation” is self-authorized to operate “in theaters outside its borders” to bomb others into democracy.

    No wonder Wang was forced to qualify all of the above as “lies”: “The root cause of all these problems and issues is that the US does not want to see the rapid development and rejuvenation of China, and still less would they want to accept the success of a socialist country.”

    So in the end Munich did disintegrate into the catfight that will dominate the rest of the century. With Europe de facto irrelevant and the EU subordinated to NATO’s designs, Westlessness is indeed just an empty, constipated concept: all reality is conditioned by the toxic dynamics of China ascension and US decline.

    The irrepressible Maria Zakharova once again nailed it:

    “They spoke about that country [China] as a threat to entire humankind. They said that China’s policy is the threat of the 21st century. I have a feeling that we are witnessing, through the speeches delivered at the Munich conference in particular, the revival of new colonial approaches, as though the West no longer thinks it shameful to reincarnate the spirit of colonialism by means of dividing people, nations and countries.”

    An absolute highlight of the MSC was when diplomat Fu Ying, the chairperson on foreign affairs for the National People’s Congress, reduced US House Speaker Nancy Pelosi to dust with a simple question:

    “Do you really think the democratic system is so fragile” that it can be threatened by Huawei?


    Tyler Durden

    Thu, 02/20/2020 – 23:45

  • U.S. Taxpayers Face $200 Billion Bill From Student Loan Forgiveness Plans
    U.S. Taxpayers Face $200 Billion Bill From Student Loan Forgiveness Plans

    The student loan bubble continues to inflate. 

    It’s now a $1.64 trillion problem that has increased over 120% since 2009. Student loan balances equate to 7.6% of GDP. That’s up from 5.1% a decade ago.

    Much of the millennial generation has insurmountable student debts that have prevented them from family formation, home buying, and growing savings. This has severely weighed on the economy, but it appears relief could be on the way, paid for by the U.S. taxpayer.

    The Congressional Budget Office (CBO) said this week that a $207.4 billion student loan forgiveness program would help Americans who are unable to pay their debt through 2029.

    The CBO said borrowers who attend graduate or professional schooling would benefit from the program the most.

    The government is expected to forgive $167.1 billion of the total amount, and this includes the original loan amount and unpaid interest for borrowers over the period.

    The CBO estimates that the government will forgive $40.3 billion on new loans made from 2020-2029, or about 21% of the original amount.

    There are more than 50 million Americans with student loan debt. The CBO estimates that most of the borrowers are stuck in low wage and low skilled jobs with large balances that may never be paid pack. Many of these folks are millennials, stuck in a renting society with absolutely no economic mobility. 

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    The student loan bubble is another imbalance that will correct and end very badly when the next recession strikes, hence why the government has created a new program to fund student debt forgiveness. 

    Let’s call the program for what it really is: a massive bailout of the millennial generation.

    Like all bubbles, this one will eventually pop. And when it does, it will end very badly.

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    But in the meantime, some millennials are flipping stocks and making money in “COLLEGE (in class)” to have “NO MORE student loans.”


    Tyler Durden

    Thu, 02/20/2020 – 23:25

  • Easily Overlooked Issues Regarding COVID-19
    Easily Overlooked Issues Regarding COVID-19

    Authored by Gail Tverberg via Our Finite World,

    We read a lot in the news about the new Wuhan coronavirus and the illness it causes (COVID-19), but some important points often get left out.

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    [1] COVID-19 is incredibly contagious.

    COVID-19 transmits extremely easily from person to person. Interpersonal contact doesn’t need to be very long; a taxi driver can get the virus from a passenger, for example. The virus may be transmissible even before an infected person develops symptoms. It may also be transmissible for a few days after a person seems to be over the virus; it is possible to get positive virus tests, even after symptoms disappear. Some people may have the disease, but never show symptoms.

    [2] The virus likely remains active on inanimate surfaces such as paper, plastic, or metal for many days.

    There haven’t been tests on the COVID-19 virus per se, but studies on similar viruses suggest that human pathogens may remain infectious for up to eight days. Some viruses that only infect animals can survive for more than 28 days. China is reported to be destroying paper currency from the hardest hit area, because people do not want to accept money which may have viruses on it. Clearly, surfaces in airplanes, trains and buses may also harbor viruses, long after a passenger with the virus has left, unless they have been thoroughly wiped down with disinfectant.

    [3] Given Issues [1] and [2], about the only way to avoid spreading COVID-19 seems to be geographic isolation. 

    With all of today’s travel, geographic isolation doesn’t work very well in practice. People need food and medical supplies. They need to keep basic services such as electricity and garbage collection operating. Suppliers of food and other services need to come and leave the area and that tends to spread COVID-19. Also, the longer a geographic area is isolated, the larger the percentage of the people within the area that is likely to get COVID-19. The problem is that the people need to have contact with others in the area for purposes such as buying food, and that tends to spread the disease.

    [4] The real story regarding the number of deaths and illnesses seems to be far worse than the story China is telling its own people and the world.

    The real story seems to be that the number of deaths is far greater than the number reported–perhaps 10 times as high as being reported. The number of illnesses is also much higher. At one point, facilities doing cremations in the Wuhan area were reported to be doing four to five times the normal number of cremations. Some of the bodies in the Wuhan area now need to be sent to other areas of China because there is not enough local cremation capacity.

    China doesn’t dare tell its people how bad the situation really is, for fear of panic. They want to tell a story of being in control and handling the situation well. The news media in the West repeat the stories that the government-controlled publications of China provide, even though they seem to present a much more favorable situation than really seems to be the case.

    [5] Our ability to identify who has the new coronavirus is poor.

    While there is a test for the coronavirus, it costs hundreds of dollars to administer. Even with this high cost, the results of the tests aren’t very reliable. The test tends to produce many false negatives. The virus may be present somewhere inside the person being tested, but not in the areas touched by swabs of the throat and nose.

    [6] Some people get much more severe symptoms from COVID-19 than others.

    Most people, perhaps 80% of people, seem to get a fairly light form of the COVID-19 illness. Groups that seem particularly prone to adverse outcomes include the elderly, smokers, those who are obese, and those with high blood pressure, diabetes, or poor immune systems. Males seem to have worse outcomes than females.

    Strangely enough, people with East Asian ancestry (Chinese, Japanese, or Vietnamese) may have a higher risk of adverse outcomes than those of European or African ancestry. One of the things that is targeted by the disease is the ACE2 receptor. The 1000 Genome Project studied expected differences in ACE2 receptors among various groups. Based on this analysis, some researchers predict that those of European or African ancestry will tend to get lighter forms of the disease.

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    Figure 1. Chart from Coronavirus risk for Asians, Africans, Caucasians revealed.

    Bolstering this view is the fact that the SARS, which also tends to target the ACE2 receptor, tended to stay primarily in China, Hong Kong, Taiwan, and Singapore. While there were cases elsewhere, they tended to have few deaths.

    [7] China has been using geographical quarantine to try to hold down the number of COVID-19 cases. The danger with such a quarantine is that once the economy is down, it is very difficult to come back to the pre-quarantine state.

    Data shows that China’s economy is not reopening quickly after the extended New Year holiday finished.

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    Figure 2. China daily passenger flows, relative to Chinese New Year. Amounts are now down more than 80% and have not increased, even as some businesses are theoretically reopening. Chart by ANZ, copied by WSJ Daily Shot Feb. 17, 2020.

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    Figure 3. China property transactions, before and after Chinese New Year. Chart by Goldman Sachs. Reprinted by WSJ Daily Shot, Feb. 17, 2020.

    All businesses will be adversely affected by a lack of sales if they need to continue to pay overhead expenses. Small and medium-sized business will be especially adversely affected. Bloomberg reports that if a shutdown lasts for three months, there is a substantial chance that these businesses will run through their savings and fail. Thus, these businesses may be permanently lost if the economy is down for several months.

    Also, restarting after a shut-down is more difficult than it might appear. Take, for example, a mother who wants to go back to work. She will likely need:

    • Public transportation to be operating, so she has a way to get to work;

    • School to be open, so she doesn’t need to worry about her child while she is at work;

    • Masks to be available, so that she and her child can comply with requirements to wear them;

    • Stores providing necessities such as food to be open, or she may be too hungry to work

    If anything is missing, the mother is likely not to go back to work. Required masks seem to be a problem right now, but other pieces could be missing as well.

    Businesses, too, need a full range of workers to restart their operations. If the inspector doing the final inspection is not available, the business may not really be able to ship finished products, even if most of the workers are back.

    [8] A shutdown of as little as three months is likely to be damaging to the world economy.

    Multiple things are likely to go wrong:

    (a) Commodity prices are likely to fall steeply, because of low demand from China. Oil prices, in particular, are likely to fall steeply, perhaps to $30 to $35 per barrel. Besides cutbacks in oil demand from China, there is the issue of a general reduction in long distance travel, because of fear of traveling with other passengers with COVID-19.

    (b) US businesses, such as Apple, will find their supply chains broken. They won’t know when, and if, they can ship products.

    (c) Debt defaults are likely to become more common, especially in China. The longer the slowdown/shutdown lasts, the greater the extent to which debt defaults are likely to spread around the world.

    (d) The world economy is likely to be pushed into recession, without an easy way to get out again.

    [9] The longer the shutdown lasts, the more likely there is to be a major collapse of the Chinese economy. 

    In the event of a long-term shutdown, it would seem likely that, at a minimum, a new leader would take over. In fact, there would seem to be a significant chance of major changes within the economy. For example, the provinces of China that are able to restart might attempt to restart, leaving the more damaged areas behind. In such a case, instead of having a single Chinese government to deal with, there might be multiple governmental units to deal with.

    Each governmental unit might consist of a few provinces trying to provide services such as they are able, without the benefit of the parts of the economy that are still shut down. Each governmental unit might have its own currency. If this should happen, China will be able to provide far fewer goods and services than it has in the recent past.

    [10] Planners everywhere have been guilty of “putting too many eggs in one basket.”

    Planners today look for efficiency. For example, placing a large share of the world’s industry in China looks like it is an efficient approach. Unfortunately, we are asking for trouble if the Chinese economy hits a bump in the road. Using just-in-time supply lines looks like a good idea as well, but if a major supplier cannot provide parts for a while, then having inventory on hand would have been a better approach.

    If we want systems to be sustainable, they really need a lot of redundancy. Redundant systems are not as efficient, but they are much more likely to sustainable through difficult times. There is a recent article in Nature that talks about this issue. One of the things it says is,

    A system with a single cycle is the most unstable because the deletion of any cycle-node or link breaks the sustaining feedback mechanism.

    “A system with a single cycle” is basically similar to “putting all of our eggs in one basket.” “Deletion of any cycle-node or link” is something like China running into coronavirus problems. We probably need a world economy that consists of many nearly separate local economies to be certain of long-term world economy stability. Alternatively, we need a great deal of redundancy built into our systems. For example, we need large inventories to work around the possibility of missing contributions from one country, in the case of a problem such as a major epidemic.

    Conclusion

    The world economy may become very different, simply because of COVID-19. The new virus doesn’t even need to directly affect the rest of the world very much to create a problem. The United States, Europe, and the rest of the world are very much dependent on the continued operation of China. The world economy has effectively put way too many eggs in one basket, and this basket is not now functioning as expected.

    If China is barely producing anything for world markets, the rest of the world will suddenly discover that long supply chains weren’t such a good idea. There will be a big scramble to try to fill in the missing pieces of supply chains, but many goods are likely to be less available. We may discover quickly how much we depend upon China for everything from shoes to automobiles to furniture to electronics. World carbon dioxide emissions are likely to fall dramatically because of China’s problems, but will the accompanying issues be ones that the world economy can tolerate?

    The thing that is ironic is that it is possible that the West’s fear of the new coronavirus may be overblown–we really won’t know what the impact will be with respect to people of European or of African descent until we have had a better chance to examine how the virus affects different populations. The next few weeks and months are likely to be quite instructive. For example, how will the Americans and Australians who caught COVID-19 on the cruise ships fare? What will the health outcomes be of non-Asians being brought back from Wuhan to their native countries on special planes?


    Tyler Durden

    Thu, 02/20/2020 – 23:05

  • "Devastating Impact": One Bank Expects China's PMI To Crater As Low As 30
    “Devastating Impact”: One Bank Expects China’s PMI To Crater As Low As 30

    To those who have been following our series of high-frequency, daily indicators of China’s economy, it will probably not come as a surprise that the world’s second biggest economy has ground to a halt, its GDP set to post the first negative print in modern history. To everyone else who is just now catching up, we have some news: it’s going to be bad.

    Ahead of official Chinese economic data which will soon start capturing the period when the coronavirus hit the nation, Nomura’s Chief China economist Ting Lu noted that China’s Emerging Industries PMI (EPMI), which gauges momentum in the country’s high-tech industries and is closely correlated with official manufacturing PMI, slumped to 29.9 in February (from 50.1 in January!), its lowest-print on record (introduced Jan ’14), which as Nomura’s Charlie McElligott writes “is pure reflection of the devastating impact of the COVID-19 outbreak.“

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    What does this mean for the closely followed China manufacturing PMI? As McElligott writes, “even adjusting for seasonality and expected progress in business resumption in the coming week, we estimate the official manufacturing PMI could drop to a range of 30-40 in Feb.”

    And the punchline from Ting:

    “We believe markets might underestimate the scale of the current growth slump. Due to a slower-than-expected rate of business resumption, we have cut our year-on-year Q1 real GDP growth forecast to 3.0% and expect Beijing to ramp up policy easing measures in coming months. That said, the likelihood of another round of massive stimulus appears low as policy space remains limited.”

    The last bolded sentence confirms what we said on Sunday, and even though China has already launched what has been a generous deployment of various stimuli

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    … it explains why some were disappointed after the PBOC only incrementally eased policy overnight, lowering the benchmark 1Y Loan Prime Rate to 4.05% (from 4.15%) and the 5Y rate to 4.75% (from 4.80%) – not pursuing a full-blown overnight rate cut as some had expected – while at the same time stating that it will work to promote consumption and investment to boost domestic demand; the PBOC did offset some of this disappointment with the biggest ever monthly injection in Total Social Financing  credit as discussed earlier…

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    … but as McElligott concludes, “the negligible decline in the 5Y rate shows that authorities remain concerned about easing property policy and that, for now, they are attempting to maneuver within “conventional” policy.”

    In other words, while the market remains convinced that Beijing with unleash even more stimulus to force the V-shaped rebound that has been priced in for Q2 and onward, also explaining the relentless bid for risk assets, this appears unlikely to happen any time soon, especially while China is still battling to contain the coronavirus, because as Jefferies strategist Sean Darby warned, “markets have taken a step back because the authorities won’t do any major stimulus until they are completely sure the virus has stopped, because there’s no point in doing it when people are sitting at home.”


    Tyler Durden

    Thu, 02/20/2020 – 22:45

  • Global Crop Failures Continue: In Australia This Is Going To Be The Worst Harvest Ever Recorded
    Global Crop Failures Continue: In Australia This Is Going To Be The Worst Harvest Ever Recorded

    Authored by Michael Snyder via The Economic Collapse blog,

    Global food production is being hit from seemingly every side.  Thanks to absolutely crazy weather patterns, giant locust armies in Africa and the Middle East, and an unprecedented outbreak of African Swine Fever in China, a lot less food is being produced around the world than originally anticipated.  Even during the best of years we really struggle to feed everyone on the planet, and so a lot of people are wondering what is going to happen as global food supplies become tighter and tighter.  The mainstream media in the United States is so obsessed with politics right now that they haven’t been paying much attention to this emerging crisis, but the truth is that this growing nightmare is only going to intensify in the months ahead.

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    In Australia, conditions have been extremely hot and extremely dry, and that helped to fuel the horrific wildfires that we recently witnessed.

    And everyone knew that agricultural production in Australia was going to be disappointing this year, but it turns out that it is actually going to be the worst ever recorded…

    Australia’s hottest and driest year on record has slashed crop production, with summer output expected to fall to the lowest levels on record, according to official projections released Tuesday.

    The country’s agriculture department said it expects production of crops like sorghum, cotton and rice to fall 66 percent — the lowest levels since records began in 1980-81.

    The continent of Australia is considered to be one of the breadbaskets of the world.  According to the U.S. Department of Agriculture, in 2018/19 Australia exported over 9 million tons of wheat to the rest of the world.

    But thanks to relentless crop failures, Australia has started to import wheat, and that is likely to continue for the foreseeable future.

    So instead of helping to feed the rest of the world, Australia is now relying on the rest of us to help feed them.

    And what is happening this year didn’t just barely break the old records.  In fact, one senior economist says that this will be the worst summer crop production the country has ever seen “by a large margin”…

    “It is the lowest summer crop production in this period by a large margin,” Peter Collins, a senior economist with the department’s statistical body ABARES told AFP.

    Of course if the rest of the world was doing great we could certainly survive a downturn in Australia.

    Unfortunately, that is definitely not the case.

    Right now, billions upon billions of locusts are voraciously devouring farms in eastern Africa and the Middle East.  As I detailed the other day, giant armies of locusts the size of large cities are traveling up to 100 miles per day as they search for food.  When they descend on a farm, all the crops can be consumed literally within 30 seconds.  It is a nightmare of epic proportions, and UN officials are telling us that this crisis is only going to get worse over the next couple of months.

    In Uganda, the army has been called out to help fight this locust plague, but it is making very little difference…

    Under a warm morning sun scores of weary soldiers stare as millions of yellow locusts rise into the northern Ugandan sky, despite hours spent spraying vegetation with chemicals in an attempt to kill them.

    From the tops of shea trees, fields of pea plants and tall grass savanna, the insects rise in a hypnotic murmuration, disappearing quickly to wreak devastation elsewhere.

    The most effective way of fighting these locust swarms is to spray insecticide on them from the air, but even that only produces very limited results.

    However, at least it is better than doing nothing.

    The UN is trying to raise a lot more money to get more planes into the air, because if nothing is done the number of locusts “could grow up to 500 times by June”…

    The U.N. has said $76 million is needed immediately. On Tuesday, U.S. Secretary of State Mike Pompeo during a visit to Ethiopia said the U.S. would donate another $8 million to the effort. That follows an earlier $800,000.

    The number of overall locusts could grow up to 500 times by June, when drier weather begins, experts have said. Until then, the fear is that more rains in the coming weeks will bring fresh vegetation to feed a new generation of the voracious insects.

    Overall, these locusts are affecting nations “with a combined population of nearly 2 billion”, and the amount of food that these locusts are destroying is unprecedented.

    Meanwhile, China has been dealing with the worst outbreak of African Swine Fever in history.

    African Swine Fever does not affect humans, but it sweeps through herds of pigs like wildfire.  There is no vaccine, there is no cure, and once African Swine Fever starts infecting pigs in a certain area the only thing that can be done is to kill the rest of the pigs to keep it from spreading anywhere else.

    Unfortunately, China has not been able to get this outbreak under control, and the losses have been staggering.

    According to the New York Times, the number of pigs that have been wiped out in China already is equivalent to “nearly one-quarter of all the world’s pigs”…

    The disease was first reported in Shenyang, Liaoning Province, in early August 2018. By the end of August 2019, the entire pig population of China had dropped by about 40 percent. China accounted for more than half of the global pig population in 2018, and the epidemic there alone has killed nearly one-quarter of all the world’s pigs.

    But of course China is not the only one dealing with African Swine Fever.

    In fact, cases of African Swine Fever have now been identified “in 50 countries”, and U.S. pig farmers are deathly afraid of what would happen if this disease starts spreading here.

    As a result of this crisis, pork prices in China have gone through the roof, and many families are no longer able to eat pork at all.

    Never before in the modern era have we seen so many major threats to global food production emerge simultaneously.

    There are more than 7 billion people living on our planet today, and we need to be able to grow enough food to feed everyone.

    If we aren’t able to do that, food prices will start to get really high, and people in the poorest areas simply will not have enough food to feed their families.


    Tyler Durden

    Thu, 02/20/2020 – 22:25

  • China Deploys Agricultural Robots And Drones To Fight Virus Outbreak
    China Deploys Agricultural Robots And Drones To Fight Virus Outbreak

    XAG Co., Ltd. was selected by the Chinese government late last month for the deployment of its ground-based robots and unmanned aerial vehicles (UAV) to spray powerful disinfectants across public places in cities where the Covid-19 outbreak is the worse. 

    XAG is using a fleet of R80 Agricultural Utility Vehicle robots with 80-liter (21 gallons) sprayers for ground-based disinfectant operations across public places. 

    The company tweeted several pictures of the R80 in action, spraying disinfectant across a “parking lot outside the office block in Guangzhou.” 

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    Here’s a video of the robot spraying disinfectant in an ambulance, which presumably had a virus-infected patient beforehand. The robots are used to spray disinfectants in areas where it’s too dangerous for humans, considering the virus is airborne and extremely contagious.

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    XAG also deployed the “first-ever ground-to-air disinfection solution.”

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    Justin Gong, vice president and co-founder of XAG, said the ground-based drones and UAVs had established a “three dimensional and integrated” disinfection system.

    Gong said the robots and UAVs offer a unique advantage to cover a wide area while leaving first responders out of harm’s way.   

    He said virus containment operations would be mainly across outdoor public places and those communities that have confirmed or suspected cases of the virus.

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    Gong said operations would also include disinfecting medical and epidemic prevention vehicles, hospitals, and other areas where virus-infected people are being housed.

    Last month, we noted how China was using DJI drones with front-mounted speakers, to fly around towns and yell at anyone who wasn’t wearing a mask. 

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    Other reports included Chinese towns deploying agriculture drones with 19 liters (5 gallons) sprayers. 

    China is using advanced technology to fight a virus that could wind up collapsing its economy. 


    Tyler Durden

    Thu, 02/20/2020 – 22:05

  • South Korean Coronavirus Cases Explode After "Super Spreader" Event
    South Korean Coronavirus Cases Explode After “Super Spreader” Event

    One day after South Korea reported its first coronavirus death and shortly after all of Daegu city’s 2.5 million residents were put on lock-down, the number of covid-19 cases in South Korea has exploded, with 52 new cases reported overnight, representing a third of all the nation’s cases.

    After four largely uneventful weeks in which South Korea had confirmed just 30 cases, the number of cases has soared five fold in just three days, rising from 31 cases on Tuesday  to 156 on Friday (local time), in what appears to be a very aggressive exponential increase.

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    Notably, thirty-nine of the cases are related to a cluster at a church in Daegu, the city that “looks like a zombie apocalypse“,  according to a statement from Korea Centers for Disease Control.

    Earlier in the day, officials said the city of Daegu was facing an “unprecedented crisis” after coronavirus infections that centred on a controversial “cult” church, linked to a branch of the Shincheonji Church of Jesus, surged over the past two days. The city of 2.5 million people, which is two hours south of the capital Seoul, was turned into a ghost town after health officials said the bulk of country’s 31 new cases announced on Thursday were linked to a branch of the Shincheonji Church of Jesus (and now another 39).

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    Mayor Kwon Young-jin made a televised address, urging citizens to wear masks and remain indoors while revealing his concerns that the contagion could rapidly overwhelm the city’s health infrastructure. “We are in an unprecedented crisis,” the mayor told reporters, unaware that the last thing he can afford to do in times like these is tell the truth.

    He ordered the shutdown of all kindergartens and public libraries, according to Yonhap. Schools in the city were considering postponing the beginning of the spring term scheduled for early March. Shopping malls and movie theaters were also empty and the usually busy city streets were quiet. A concert featuring BTS and other K-pop stars that was set for Daegu Stadium on 8 March has been postponed.

    The defense ministry banned troops stationed in Daegu from leaving their barracks and receiving guests. The US military imposed similar restrictions on its army base in the city, which houses thousands of troops, family members and civilian employees, curbing travel and closing schools and child care centers.

    In what the Korean center for disease control called a “super spreader” event, almost half of the country’s total of 82 infections have been linked to a 61-year-old woman who worships at the Daegu church, which has often accused of being a cult.

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    Medical staff move a patient infected with the coronavirus in Daegu. Photograph: AP

    She first developed a fever on 10 February but reportedly twice refused to be tested for the coronavirus on the grounds that she had not recently travelled abroad. She attended at least four services before being diagnosed. So far, almost 40 other members of the church have been confirmed as infected.

    Shincheonji claims that its founder, Lee Man-hee, has donned the mantle of Jesus Christ and will take 144,000 people with him to Heaven, body and soul, on Judgement Day. And if the number of cases continues to grow exponentially, Judgment Day may be in early March.

    Daegu’s municipal government said there were 1,001 Shincheonji members in the city, all of whom had been asked to self-quarantine, with 90 of them currently showing symptoms. Those who have symptoms “will be tested as soon as possible”, Kwon Young-jin said, urging stronger action from the government in Seoul and calling the national response “inadequate”.

    “We plan to test all believers of that church and have asked them to stay at home isolated from their families.”

    The situation was “very grave”, South Korean vice health minister Kim Kang-lip said at a separate briefing.

    Shincheonji said on Thursday that it had closed down all its facilities nationwide.

    “We are deeply sorry that because of one of our members, who thought of her condition as a cold because she had not travelled abroad, led to many in our church being infected and thereby caused concern to the local community,” it said in a statement.

    Separately a man in his 60s from the neighboring Cheongdo county tested positive for the coronavirus after dying Wednesday following symptoms of pneumonia, authorities said. He was among 15 people found to be infected at a hospital.

    * * *

    Meanwhile, a few hundred kilometers west, China continues to pretend it is successfully containing the virus, although it apparently can’t even do that. One week after Beijing reported nearly 15,000 new cases after a change in the definition of “infection”, China reverted back to the original definition in hopes of drastically reducing the number of new cases and boosting people’s confidence it was successfully containing the pandemic. The result was that the number of new cases on Feb 19 was just 391, one of the lowest since the start of the pandemic, and a far cry from the 15,000 new cases reported a week earlier. Alas, in its ambition to get people back to work, the case number was too low and nobody believed it, resulting in even greater self-quarantining as China’s population increasingly believes that Beijing is no longer telling it the truth and is willing to sacrifice the population just so some factories can resume production,

    Meanwhile, as China bounces around between one definition and another, in hopes of finding some “just right” middle ground between reporting too many cases and sparking a market crash, or too few cases and leading to social violence as people on the ground certainly know just how bad it truly is, Beijing is now losing all credibility and even China’s best friend in the US, Bloomberg, writes that “Hubei Changes Virus Count Method With Data Mistrust Growing.” This happened after on Thursday China reported that it had just 349 additional confirmed cases, compared with almost 1,700 additional cases from the day before; the number then doubled to 889 on Friday as China appears to have given up on any pretense at reporting data objectively.

    The outcome appears to be a recreating of the famous surgery scene from Spice Like Us, where China comes up with some made up number, gauges the market’s and media’s reaction, and then China offers a totally opposite number on the next day as it scramble to give everyone what they want while creating the fiction that it is in control.

    The irony, of course, is that the more China manipulates the data, the less anyone will believe a positive outcome for the epidemic and will instead claim that this is just the result of Chinese propaganda: “It points to a rather concerning confusion over how best to officially report the number of cases, leading to a loss of confidence in the true numbers,” said Jeffrey Halley, a Singapore-based senior market analyst with Oanda Asia Pacific Pte. “That could mean that internationally, the rest of the world keeps China in lockdown for longer, which will not be good for the ‘V-shaped recovery’ projections.”

    As reported previously, the latest changes cast doubt over whether the drop in new cases – a positive sign that the epidemic is coming under control at the epicenter – is actually happening. In recent days, China’s leaders have scrambled to project optimism over the outbreak, which has shut down large parts of its economy and plunged industries from retail to aviation into crisis. Companies and factories across China are now being urged to re-start economic activity, while Chinese premier Li Keqiang said on Monday that the outbreak is on “a positive trend.”

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    What Li meant is that Beijing is willing to sacrifice healthy citizens by commingling them with potentially infected ones, if it means that China’s GDP, already set for a record plunge, can be pushed up just a bit. Of course, none of this is lost on the people, and in a country where the biggest morbid fear is one where the middle class rises up and overthrows the communist parasites in charge, there is a distinct possibility that by telegraphing to the people just how worthless their lives are to Beijing, the instead of delivering a “positive trend” for the outbreak, China’s ruthless rulers may soon be on the receiving end of what happens when 1.4 billion Chinese grab the pitchforks and go after those who are willing to risk their lives if only it means that the “quota met” bonus payment for 2020 is made.


    Tyler Durden

    Thu, 02/20/2020 – 21:48

  • After Twitter Poll Goes Badly Awry, Christian Group Blames Satan
    After Twitter Poll Goes Badly Awry, Christian Group Blames Satan

    Authored by Elias Marat via TheMindUnleashed.com,

    An organization that claims to represent Christian lawmakers in the U.S. is crying foul after a Twitter poll asking if the country would be better with more elected officials of the Christian faith went hilariously off the rails.

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    While the group only has a humble 277 followers on Twitter, it still decided to put the question to a vote among the broader Twitterverse – opening itself to the certainty that it would fall victim to a good old-fashioned “poll-jacking” which happens when a large group on social media intentionally subverts an attempt to gather an online opinion.

    When all was said and done, over 106,000 people had replied with an overwhelming 93.7 percent of the vote responding with a decisive “no.”

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    Seemingly not content with simply moving forward discreetly or perhaps just deleting the failed poll, the group decided to step it up a notch with complaints of outright oppression and persecution at the hands of the unkind online hordes.

    The group initially responded with a complaint that “Satanists and Atheists” had subverted the poll, warning the alleged nonbelievers that “God loves everyone and forgives all who ask Him … Salvation is available only through His Son Jesus Christ. John 3:16.”

    In a later post, the group added:

    “View the comments on this thread to see what religious persecution and anti-Christian bigotry looks like in America. Satanists and Atheists piled on this poll and have begun leaving vile messages as well.”

    The claim is an especially strange one for the group to make, especially considering the fact that according to a Pew survey, the U.S. Congress is nearly 90 percent Christian compared to 65 percent of the United States as a whole.

    The National Association of Christian Lawmakers was formed last year by far-right Arkansas Sen. Jason Rapert (R), a politician who warned constituents about the rise of witches in a recruitment email. The group includes former Arkansas Gov. Mike Huckabee and anti-gay extremist Tony Perkins on its board of advisers.

    Senator Rapert also went to war with a popular local pizzeria last February after the pizza place advertised a concert for sludge metal band EyeHateGod with a photoshopped flyer depicting the senator devouring an infant. Rapert complained that the image depicting him “’biting a baby’ with my mouth” was an “affront” to him “as an ordained minister of the gospel and a well known pro-life advocate.”

    At the time, the senator’s social media page was swarmed by both curious supporters and detractors commenters who offered bemused comments about the lawmaker’s alleged taste for eating children, including one commenter who asked:

    “Senator, why do you claim to have a pro life stance but this photo clearly depicts you eating a live baby?”


    Tyler Durden

    Thu, 02/20/2020 – 21:45

  • Wine Prices To Plunge As Millennials Spark Imminent Vineyard Bust
    Wine Prices To Plunge As Millennials Spark Imminent Vineyard Bust

    Rob McMillan, the founder of Silicon Valley Bank’s Wine Division, writes in the 19th annual State of the Wine Industry Report that the US wine industry is “past the tipping point and starting a phase of declining growth in volume.”

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    McMillan said an oversupply of wine would lead to premium juice priced at better levels could be an incentive to reverse declining consumption trends among millennials.

    He noted a bust in the industry is imminent and will lead to “vineyard removals.” The consolidation of the industry is required to curb oversupply consolidations and let the market find a natural equilibrium in prices. The current environment is unhealthy, he added, with wine prices at a five year low.

    Here is McMillan’s perspective of why the wine industry is headed for a hard landing: 

    “…our current oversupply in California and Washington isn’t due to speculative overplanting. It’s due to the wine industry’s growing miss in not providing consumers what they want. That’s not an adverse statement about the quality of what our industry produces. We’ve never made better wine. But based on the industry’s current results, making great wine isn’t good enough for the consumer today. We are increasingly missing the mark on consumer expectations, and our results show it.”

    McMillan warned that the industry must prepare for “a low-growth environment in 2020.”

    “In a low-growth environment, there are likely to be winners and losers, and you want to be on the correct side of that ledger.” 

    In 2018, McMillan said:

    “Sales growth forecasts for the next five years should be tempered. The fundamental underpinnings that created the industry growth are changing, which means the tactics that were relied upon to ride this wave of success to this point will slowly prove flawed without business adaptation.”

    Trends in industry sentiment show that for the first time in four years – a decelerating economy is starting to weigh on producers. 

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    The rapid growth of the last twenty years is coming to an end. Here are the seven industry headwinds developing:

    1. Baby boomers, who control 70 percent of US discretionary income and half of the net worth in the US, are moving into retirement and declining in both their numbers and per capita consumption, while millennials aren’t yet embracing wine consumption as many had predicted.

    2. The industry has reached the point of acute oversupply due to diminishing volumes sold. That will lead to vineyard removals — and fallowing in some cases — and reduced returns for growers.

    3. Absent offsetting promotion of the health benefits of moderate wine consumption, the cumulative impact of negative health messaging will continue to cast a shadow over consumption, particularly for the young consumer.

    4. Wine imports and substitutes are a real and growing threat for mindshare among emerging wine consumers.

    5. A lag in innovating alternative DTC strategies beyond the tasting room and club models is limiting DTC growth for family wineries.

    6. Wine companies aren’t addressing the values of the young consumer in their marketing. We aren’t giving them a reason to buy wine over spirits.

    7. Labor availability is limited, and the price for labor is increasing.

    McMillan predicts that “sales value growth range between 3 percent and 7 percent for the premium wine segment, down about 1 percent from the 2019 sales growth estimate. For the off-premise retail store channel, value will fall between negative 2 percent and 0 percent. Volume will fall in a range between negative 1 percent and negative 3 percent.”

    It appears in the early 2020s, as vineyards go bust – the supply of crush wine grapes will level off and start to decline.

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    The bust of the wine industry is great news for oenophiles, who will now be able to purchase bottles at a reduced cost.

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    However, bad news for vineyards as growth rates in sales has been declining since 2017. Blame the millennials, of course.

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    Millennials have limited interest in wine – that’s why the industry is freaking out because their largest clients are baby boomers – and those folks are getting ready to keel over.

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    To summarize, a perfect storm of forces from an evolving economy is already triggering a wine bust.  However, interest rates via the Federal Reserve could be slammed to zero ahead of the next recession that would almost guarantee zombie vineyards would exacerbate an imbalance in the industry for an extended period. The good news are deflationary pressures leads to lower prices that would lead to more consumption among broke millennials.

    The other thing, baby boomers are nearing their final decades of life, and with millennials shunning wine for seltzer and marijuana – the wine industry must be trembling in their shoes. What’s to come is an entire industry must convince millennials wine is good. Maybe that is done through lower prices and letting the industry go bust. 


    Tyler Durden

    Thu, 02/20/2020 – 21:25

  • Is China Secretly Shipping Nuclear Arms To Pakistan?
    Is China Secretly Shipping Nuclear Arms To Pakistan?

    Submitted by Great Game India,

    On February 12, 2020, GreatGameIndia issued an alert regarding a suspicious shipment off the western coast of India. The ship belonged to a Chinese shipping company blacklisted by the Americans last year and was destined to Pakistan. Further investigation revealed the seized shipment carried launching gear for missiles and that China was secretly shipping nuclear arms to Pakistan, now being examined by two different teams of Indian nuclear scientists. Sources in Coastal intelligence told GreatGameIndia the intercept was based on a tip-off from the Americans who were monitoring the entire fleet of the shipping line believed to be a front of Chinese intelligence.

    COSCO Shipping blacklisted by Americans

    In September last year, the US Treasury department blacklisted two oil tanker subsidiaries of China Ocean Shipping Company (COSCO), a leading Chinese shipping and logistics company for shipping Iranian oil. China Concord Petroleum, Pegasus 88 Limited, Kunlun Shipping Company and Kunlun Holding Company were also sanctioned. The sanctions came just 11 days after drone attacks on the heart of Saudi Arabia’s oil production ARAMCO facility that Washington blamed on Iran.

    The Trump administration was tracking the movement of tankers linked to Bank of Kunlun, a subsidiary of China’s biggest state-run oil company China National Petroleum Corporation, amid signs that the vessels are helping to transport Iranian crude to China in defiance of US sanctions against Tehran.

    The move sent shockwaves through the tanker markets disrupting global shipping trade putting dozens of supertankers off limits to energy traders including Indian Oil Corporation whose charted tanker Da Yuan Hu lifting 145,000 tonnes of Mexican Isthumus oil to Paradip port in eastern India got stranded off Cape Town halting its journey to Dos Bocas Port Mexico from the Port of Singapore.

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    On January 31, 2020, the sanctions against one of the two units of COSCO Shipping were lifted after “Phase One” trade talks with the Chinese in a move to balance the marketplace “without devastating world trade”. Americans hope the sanctions will also limit Tehran’s ballistic missile program and influence across the Middle East. However, recent developments along the Indian coast would force American analysts to think otherwise.

    Military Grade Aircraft launching gears mysteriously land in India

    In December last year, two military-grade aircraft launching gears to assist takeoff of jets from the deck meant for the ‘Royal Saudi Land Forces’ illegally landed at a private port in Kutch district of Gujarat through Pakistan, sending security forces into a tizzy.

    Security sources said the military-grade aircraft launching gears found at the Mundra port were manufactured by only two corporate giants, Boeing (based in the US) and Airbus (headquartered in Europe).

    During the initial probe, custom officials realized that the bill of lading procured from the shipper clearly stated that the consignee was ‘Royal Saudi Land Forces’ and the gears were to reach: ‘Prince Sultan Road, HWY 156 Jizan Saudi Arabia’.

    The most puzzling part was that the Saudis do not have an aircraft carrier in their fleet and diplomats at the Saudi Arabia embassy shied away from making any comments. The issue was hushed up. However, yet another suspicious shipment was intercepted just two months later which revealed the entire plot.

    China secretly shipping nuclear arms to Pakistan

    On February 12, 2020, GreatGameIndia issued an alert regarding a suspicious shipment off the western coast of India. A cargo ship Da Cui Yun operated by COSCO Shipping line carrying missile like machinery and arms was seized and searched by Indian intelligence agencies. The ship arrived at Deendayal Port, Kandla, western India from Jiangyin Port, China and its next destination was Port Qasim in Karachi, Pakistan.

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    Two different teams of nuclear scientists from the Defense Research and Development Organization (DRDO) were flown in to examine the cargo – a large industrial autoclave used for manufacturing composite lining for the solid-fuel ballistic missiles, a dual-use technology that can be used for the production of nuclear warheads as well.

    The ship almost escaped the local port authorities who even issued the crucial “no-objection certificate” after verifying it had no dues as per the norm. The customs authorities were about to issue final clearance for the vessel to set sail when a team of officials entrusted with national security swooped in.

    “Suddenly, however, there was a flurry of activity. Senior Kandla Port officials got calls from New Delhi. Officials of the Directorate of Revenue Intelligence (DRI) and other security agencies reached Kandla,” said a local port official on condition of anonymity.

    Significantly, the destination of the ship was Port Qasim in Karachi, where the Space and Upper Atmosphere Research Commission (SUPARCO), responsible for Pakistan ballistic missile programme, is based. These point to the continuing Pak-China proliferation activities with impunity.

    This is not the first time that a Pak bound ship was detected carrying missile material and wrongly declaring them to avoid detection. During the Kargil conflict, the North Korean ship Ku Wol San was seized at the Kangla port. This ship was carrying missile components, metal casings and Scud missile manuals to Pakistan, which were declared as the water purifying equipment.

    Turkey’s role in Sino-Pak Nuclear Proliferation

    A study by the London based think tank International Institute for Strategic Studies had brought out that A Q Khan network was assisted by the Turkish companies, which imported nuclear related material from Europe, manufactured centrifuge parts and shipped them to Pakistan and other countries. It is strongly believed that Turkey could be possessing a number of centrifuges, with the assistance from Pakistan.

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    When last year, Recep Tayyip Erdogan President of Turkey spoke in favour of producing nuclear weapons at a party convention, the US media pointed out the possibility of Turkey having a nuclear bomb project. The Pak-Turkey clandestine collaboration in nuclear and missile fields appears to be growing very fast. The role appears to have been reversed. While earlier Turkish companies were importing material from Europe and providing them to Pakistan, now Pak is illegally importing nuclear related material from China for Turkey.

    Sources in Coastal intelligence told GreatGameIndia the intercept of the Chinese ship Da Cui Yun was based on a tip-off from the Americans who were monitoring the shipment since it left the Chinese port of Jiangyin. The incident exposed how China was secretly shipping nuclear arms to Pakistan. However, this is not the first time China was caught smuggling arms to foreign nations using the COSCO Shipping line known to be a front of Chinese intelligence.

    COSCO – A front of Chinese Intelligence

    The Chinese navy was linked in 1985 to illegal smuggling in foreign cars, vans, TVs and VCRs out of Hainan island in the South China Sea.

    A COSCO ship was involved in the failed 1996 attempt by China to smuggle 2,000 dismantled AK-47 assault rifles in San Francisco to California street gangs. The smugglers were not COSCO employees — they used a fraudulent American import license and were later jailed by the government in Beijing — but it took American agents posing as Miami crime figures to unravel the operation.

    In 1998, federal lawmakers troubled by COSCO’s reported connections to the Chinese military prevented the company from leasing a former U.S. naval base adjacent to the Port of Long Beach. The same year U.S. intelligence agencies tracked a COSCO freighter from Shanghai to Karachi, Pakistan, with a load of weapons-related goods, including specialty metals and electronics used in the production of Chinese-designed Baktar Shikha anti-tank missiles. The shipment was carried aboard a vessel owned by the company subsidiary COSCO Tianjin.

    Based on information contained in the Cox Report (chaired by California Rep. Christopher Cox, the committee looked into the activities of companies linked to Chinese military and intelligence agencies), CalPERS (California Public Employees Retirement System) had invested millions of dollars in so-called “Red Chip” companies, firms headquartered outside of China but believed to be closely tied to Chinese military or intelligence operations. One of them was COSCO Shipping.

    The Cox Report observed, the Securities and Exchange Commission, the federal agency chiefly responsible for safeguarding the integrity of the nation’s financial markets, “collects little information helpful in monitoring PRC commercial activities in the United States.” What pertinent information might be collected by the Central Intelligence Agency or the National Security Agency is not routinely disseminated outside of the core intelligence community.

    In 2001, China was caught secretly shipping arms and explosives to Cuba. All the arms were aboard vessels belonging to COSCO. At least three arms shipments were traced from China to the Cuban port of Mariel. One of the cargoes was described as dual-use explosives and detonation cord. The explosives were said to be “military-grade” material.

    The Chinese Communist Party’s military organ approved the establishment of COSCO as an arm of the Chinese Navy in 1985. Mr. James Mulvenon stated in his book “Soldiers of Fortune” that COSCO’s establishment “legitimized the use of navy ships for civilian shipping and thus provided a legal cover for the navy’s smuggling.”

    China Ocean Shipping Company, or COSCO, was deemed by the US House of Representatives Task Force on Terrorism and Unconventional Warfare to be a military related entity. According to the Task Force report, “Although presented as a commercial entity, COSCO is actually an arm of the Chinese Military.”


    Tyler Durden

    Thu, 02/20/2020 – 21:05

  • Hackers Trick Tesla Into Breaking Speed Limit By 50MPH With 2 Inches Of Tape
    Hackers Trick Tesla Into Breaking Speed Limit By 50MPH With 2 Inches Of Tape

    Welcome to the future we deserve.

    Technicians at McAfee, Inc. wanted to test out exactly how well Tesla’s Autopilot system worked. So they decided to take a strip of electrical tape and put it across the middle of the “3” in a “35 mile per hour” speed limit sign, tricking the car into thinking the sign said “85 miles per hour”. 

    The test concludes 18 months of research, according to Bloomberg, that illustrate weaknesses in machine learning systems used for automated driving. Steve Povolny, head of advanced threat research at McAfee, says changes in the physical world can “confuse” these systems.

    For the test, McAfee’s researchers used a 2016 Model S and Model X that had camera systems supplied by Mobileye under Tesla’s old agreement with the company that ended in 2016. Tests performed on Mobileye’s newest camera system didn’t reveal the same vulnerabilities.

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    Mobileye defended their technology in a statement to Bloomberg, claiming humans could have also been fooled by the same type of sign modification. 

    “Autonomous vehicle technology will not rely on sensing alone, but will also be supported by various other technologies and data, such as crowd sourced mapping, to ensure the reliability of the information received from the camera sensor and offer more robust redundancies and safety,” Mobileye said.

    Also according to McAfee technicians, Teslas don’t rely on traffic sign recognition.

    Povolny commented: 

    “Manufacturers and vendors are aware of the problem and they’re learning from the problem. But it doesn’t change the fact that there are a lot of blind spots in this industry.”

    The real-world threats of something similar happening are relatively low. Self-driving cars remain in development stage and are mostly being tested with safety drivers behind the wheel. That is, of course, unless you’re one of the “lucky” beta testers driving around with your Tesla on Autopilot. 

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    McAfee’s researchers say they were only able to trick the system by duplicating a “sequence involving when a driver-assist function was turned on and encountered the altered speed limit sign.”

    “It’s quite improbable that we’ll ever see this in the wild or that attackers will try to leverage this until we have truly autonomous vehicles, and by that point we hope that these kinds of flaws are addressed earlier on,” Povolny concluded.

    The weakness isn’t just specific to Tesla or Mobileye technology: it’s inherent in all self-driving systems. 

    Missy Cummings, a Duke University robotics professor and autonomous vehicle expert, summed it up: “And that’s why it’s so dangerous, because you don’t have to access the system to hack it, you just have to access the world that we’re in.”


    Tyler Durden

    Thu, 02/20/2020 – 20:45

  • China Reports Spike In Cases Outside Wuhan & 118 New Deaths
    China Reports Spike In Cases Outside Wuhan & 118 New Deaths

    Summary:

    • Iran confirms 5 cases of COVID-19
    • Daegu, Cheongdo declared ‘special management zones’
    • South Korean soldier tests positive
    • Hubei reports 411 new cases, 115 deaths
    • China reports an additional 3 deaths outside Wuhan and 889 other cases
    • US CDC slaps Japan with L1 travel advisory
    • Seoul mayor orders “cult” church associated with SK outbreak closed
    • Japanese officials defend their handling of ‘Diamond Princess’ quarantine
    • Beijing tightens lockdown after dozens more cases reported
    • As outbreak ex-China accelerates, WHO warns case #s “won’t stay low for long.”
    • Hong Kongers evacuated from ‘Diamond Princess’ after Japanese government confirms 2 deaths
    • Researchers confirm COVID-19 more contagious than SARS and MERS
    • Tim Cook welcomes back employees, customers as Apple reopens some China stores

    * * *

    Update (2020ET): It’s 8:20 am in Beijing, and officials at the NHC have just released coronavirus figures for Thursday.

    Across the country, officials recorded an additional 889 cases, and another 3 deaths. bringing the global total for cases north of 77,000.

    • CHINA REPORTS 889 ADDITIONAL CORONAVIRUS CASES FEB. 20
    • CHINA REPORTS 118 NEW CORONAVIRUS DEATHS FEB. 20
    • CHINA SAYS CORONAVIRUS DEATH TOLL RISES TO 2,236

    CNBC’s Eunice Yoon reporting live from Beijing showed that the capital city’s streets were practically deserted.

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    Meanwhile, in Seoul, the mayor has ordered the closure of a local branch of Shincheonji Church, the Christian “cult” to which the ‘super-spreader’ responsible for infecting dozens in Daegu allegedly belonged.

    • SEOUL MAYOR: TO CLOSE SEOUL UNIT OF SHINCHEONJI CHURCH: YONHAP

    In the US, the CDC has issued a ‘Phase 1’ travel advisory for Japan, a couple days after issuing a similar warning for Hong Kong.

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    To sum up, cases in China outside Wuhan are finally starting to spike; cases in South Korea have more than tripled in three days, and Japan just got slapped with its first travel advisory by the US.

    Still ‘Just the flu’? (For the record, epidemiologists have concluded in the first batch of peer reviewed research that the virus is more contagious than both SARS and MERS).

    * * *

    Update (1900ET): As COVID-19 hysteria descends on South Korea, the Blue House has reportedly designated Cheongdo and Daegu “special management zones”.

    Daegu is the center of the outbreak, which is centered around a cultish church with roughly 1,000 members, most of whom are being tested for the virus after potentially coming in contact with a ‘super-spreader’ – a Korean woman who attended several church services after evading earlier controls.

    As for the meaning of ‘special management zones’, well, Yonhap doesn’t have anything on that yet. But we suspect it’ll be something close to ‘martial law’ as mass quarantines officially become the strategy of choice for dealing with COVID-19 outbreaks.

    The chart isn’t exactly reassuring…

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    * * *

    Update (1820ET): Speak of the devil…

    Just minutes after we posted our last update, where we pointed out that officials in Hubei were late with their nightly numbers, they finally arrived.

    Hubei reported another 411 new ‘confirmed’ cases, along with 115 new deaths, slightly higher than the average from the last few days. Another1,451 patients were discharged, allowing Beijing to stick with its narrative that more patients are recovering than catching the virus, a sign that the outbreak is abating.

    • HUBEI REPORTS 411 NEW CORONAVIRUS CASES, 115 DEATHS FEB. 20
    • CHINA’S HUBEI TOTAL CORONAVIRUS CONFIRMED CASES RISE TO 62,442
    • CHINA’S HUBEI SAYS 1,451 PATIENTS DISCHARGED FEB. 20

    Not like it matters. After China changed its criteria for which cases are counted in the official total for the second time in a week yesterday, the world has shifted its focus to the outbreak outside China, specifically South Korea and Japan.

    The new numbers bring the global total of confirmed cases north of 76,000, with 2,147 deaths.

    * * *

    Update (1815ET): Yonhap is reporting that the first case of coronavirus among a member of the South Korean military has been detected.

    That’s bad news, mostly because soldiers tend to live in crowded barracks, typically in close proximity to other soldiers.

    Which is exactly what Yonhap reported. They also reported that the soldier likely picked up the virus during a visit to his hometown of Daegu, the city at the center of South Korea’s outbreak. 

    A Navy sailor on the southern island of Jeju was confirmed Friday to have contracted the new coronavirus in the first confirmed case among service personnel in South Korea, officials said.

    The sailor, 22, tested positive for COVID-19 in the initial examination the previous day and was finally confirmed earlier in the day, according to the officials.

    He visited his hometown, Daegu, 300 kilometers southeast of Seoul, from Feb. 13 to Tuesday. Upon returning to the base, he showed symptoms, such as coughing, prompting the authorities to immediately quarantine him at the base. He is now at a Jeju hospital.

    It is yet to be known exactly how he contracted the virus. But South Korea has seen a surge in patients in Daegu and the surrounding North Gyeongsang Province in recent days, as the country’s 31st patient attended a church service, along with around 1,000 others. As of late Thursday, the total number of confirmed cases stood at 104, according to health authorities.

    In the wake of high chances of the first coronavirus case among service personnel, the defense ministry decided late Thursday to restrict all enlisted soldiers from vacationing and staying outside their base to meet visitors starting Saturday.

    Over in Beijing and Wuhan, the world is eagerly awaiting the latest round of numbers. The usually arrive around 5:30 ET – meaning that they’re already officially late.

    With all the attention paid to yesterday’s decision to once again change their criteria for counting virus cases, officials must be taking their time making up the numbers tonight.

    * * *

    Update (1420ET): WSJ reports that Japan’s top health officials have defended their handling of the ‘Diamond Princess’ quarantine during a statement to Japan’s parliament, the Diet.

    Japan’s Health Minister Katsunobu Kato told Parliament the two people from the Diamond Princess cruise ship who died had “received the best medical treatment” but couldn’t be saved after catching the novel coronavirus on board. As of Thursday, 634 passengers and crew members were diagnosed with the virus out of 3,063 tested. Slightly more than half have no symptoms at all, officials said, and many of the remainder have only mild fever or a cough. Among patients who tested positive for the virus, 28 were reported in serious condition Thursday.

    Doctors have said the virus can be particularly harmful in elderly patients, and one of the two fatal cases from the Diamond Princess, a Japanese man in his 80s, had pre-existing bronchial asthma and had been treated for angina. The other, a Japanese woman in her 80s without underlying illnesses, came down with a fever on Feb. 5, the same day passengers were told they would be quarantined in their cabins for two weeks, according to health ministry officials. The next day, she started suffering from diarrhea and saw a doctor on board.

    She wasn’t taken to a hospital until Feb. 12 when she started suffering shortness of breath. Her virus test came back positive the following day, and despite treatment with antiviral drugs normally used to treat HIV infection, she died Thursday.

    Asked about the woman’s case, health ministry official Hiroshi Umeda said, “I believe it was handled promptly.” He said the ship was a difficult environment for medical staff but they worked day and night and tried to prioritize the most serious cases.

    The country has been widely criticized for appearing to break quarantine on the cruise ship, which was home to the largest COVID-19 outbreak outside China. More than 700 passengers who tested negative for the virus disembarked the ship on Wednesday and Thursday.

    * * *

    Update (1415ET): A group of 59 Hong Kong police officers has been quarantined after a fellow officer tested positive for the virus, according to a statement released publicly by the city’s police.

    * * *

    Update (1250ET): Less than an hour ago, we mentioned that Beijing’s heavy-handed virus-fighting measures had become the subject of an intense “public debate” about whether they were doing more harm than good.

    Well, according to an unconfirmed report from the Epoch Times’ Jennifer Zeng, party officials in Beijing are upgrading its “epidemic prevention” status to “Wuhan-level” – meaning a complete lockdown where residents aren’t allowed to leave their homes without specific permission.

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    Another tweet sent earlier in the day reported new restrictions being imposed at a Beijing apartment complex.

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    How much longer can the party keep this up before it damages public confidence to a degree that can’t be repaired.

    * * *

    Update (1200ET): In what appears to be yet another consequence of Beijing’s rushed push to get all of China “back to work” nearly two weeks ago, the Global Times, a Chinese tabloid that also publishes in English.

    A hospital in Central Beijing has reported 36 novel coronavirus cases as of Thursday, a sharp increase in the number of cases reported in the capital city. The new cases bring Beijing’s total to 45, stoking fears that the outbreak could accelerate.

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    Among the infected at Fuxing Hospital in Beijing’s Xicheng district were eight medical workers, nine cleaning staff and 19 patients, along with members of their families.

    These confirmations follow reports that Beijing officials quarantined whole office buildings following after some employees were suspected of having the virus.

    “Considering 36 confirmed cases were found in Fuxing Hospital, it is more about one case of multiple infections rather than an epidemic of the whole area,” Wang Guangfa, director of the department of respiratory and critical care medicine at Peking University First Hospital, told the Global Times on Thursday.

    “This coronavirus issue is big. It will effect a lot of companies, and I think the market’s have underestimated what a big supply-side shock this is,” said Mohammad El-Erian, Bill Gross’s former No. 2 man at PIMCO and a widely watched economist who works now with PIMCO parent Allianz.

    Peking University People’s Hospital, another major hospital in Beijing, confirmed that it had received three patients carrying the virus earlier this week on Feb. 17. Already, a total of 164 medical workers at the hospital have been placed under close medical observation after they had “close contact” with the patients – something that seems almost unavoidable for nurses and doctors.

    A total of 164 people including medical staff at People’s Hospital who have had close contact with the patients have been put under close The hospital said it had conducted coronavirus tests on 251 personnel, and so far, they’ve all been negative.

    In other news, another analyst has told the GT that Apple’s iPhone sales in China will shrink 40% to 50% in the near term after the company closed all its retail stores in the country earlier this month. Those stores have only just started to reopen.

    Liang Zhenpeng, a senior industry expert, told the Global Times on Thursday the COVID-19 outbreak has dealt a heavy blow to the sales of all mobile phone suppliers in China, including Apple.

    “The iPhone’s sales in the first quarter of this year are likely to be less than half of the same quarter in 2019,” he said. “Mobile phone sales, both online or offline, are very difficult during this period, because the supply chains can hardly be normalized.”

    Apple CEO Tim Cook said on his Sina Weibo account, China’s Twitter-like social media, that the company is welcoming back employees and customers and is looking to work closely with their manufacturing partners to get everything back on track.

    We suspect this is what triggered the market plunge over the last 30 minutes.

    Circling back to Beijing, the municipal officials said that all hospitals in Beijing should “accelerate hospitalization of patients and try their best to diagnose suspected cases to treat the infected patients at the earliest time.”

    So far, the confirmed cases in the city have been scattered around 15 of its 16 districts.

    The hysteria surrounding the outbreak across China has actually sparked an interesting public debate – something you don’t see much in China – about whether all of the heavy-handed government measures – the quarantines and lockdowns and roadblocks – and the work stoppages are really necessary.

    Some even contend that by impoverishing regular Chinese people via work stoppages that damage the economy, the government might be doing more harm to the population than the virus has, according to the New York Times.

    With hundreds of millions of people in China now essentially living in isolation and its economy nearly at a standstill, experts in the country are increasingly arguing that Beijing’s efforts to fight the coronavirus are hurting people’s lives and livelihoods while doing little to the stop the virus’s spread.

    If the country becomes poorer because of emergency health measures, they say, that drop might hurt public health more than the virus itself.

    The debate – including questions about whether mandatory 14-day quarantines, roadblocks and checkpoints are really necessary in areas where there have been few cases – is unusual in a country where dissent is usually censored.

    It comes as China reported a significant decrease in new coronavirus infections on Thursday, as health officials changed the way they counted confirmed cases for the second time in over a week.

    Of course, President Xi and China’s senior economic officials claim that there won’t be any economic pullback, since Beijing is obviously winning the ‘People’s War’.

    * * *

    Update (1010ET): Talk about a spike in deaths: Iran is now reporting 9 deaths after shocking the world by revealing that two Chinese nationals infected with the virus had died in the city of Qoms earlier this week.

    The Iranian regime has reportedly imposed a China-style crackdown on Qoms, deploying military and crowd-control police across the city.

    It’s just the latest sign that the cases and deaths ex-China are accelerating.

    CNBC’s Eunice Yoon reports that Beijing has warned Hubei not to allow people back to work before March 10.

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    Local leaders said yesterday that they would launch a special financing vehicle to help struggling companies in the province survive the outbreak.

    Following the WHO’s daily press conference, Director General Dr. Tedros said the WHO had confirmed 1,000 cases outside mainland China (with more than half of them infected aboard the ‘Diamond Princess’), and 7 deaths, likely excludes some of the deaths announced over the past 12 hours. Though he added that the data coming out of China “appeared to show a decline in new cases.”

    “Outside China, we have seen a steady drip of new cases, but we have not yet seen sustained local transmission, except in specific circumstances like the Diamond Princess cruise ship,” he added.

    More ominously, Dr. Tedros exclaimed that the outbreak is far from over, and if governments don’t take adequate steps to fight the virus, the number of cases outside China “won’t stay low for very long.”

    Worried about more shortages of personal protective equipment like facemasks, Dr. Tedros pleaded with a dozen different manufacturers to do whatever they can to keep up appropriate global supplies.

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    The director said the WHO expects to have more data from two clinical trials for treatments in roughly 3 weeks.

    Since we haven’t posted a breakdown of new cases yet today, we figured we’d share this list of countries, cases and deaths courtesy of the Associated Press:

    According to the Associated Press, the latest figures provided by each government’s health authority as of Thursday in Beijing are:

    • Mainland China: 2,118 deaths among 74,576 cases, mostly in the central province of Hubei
    • Hong Kong: 65 cases, 2 deaths
    • Macao: 10
    • Japan: 727 cases, including 634 from a cruise ship docked in Yokohama, 3 deaths
    • Singapore: 84
    • South Korea: 51, 1 death
    • Thailand: 35
    • Taiwan: 24 cases, 1 death
    • Malaysia: 22
    • Vietnam: 16
    • Germany: 16
    • United States: 15 cases; separately, 1 U.S. citizen died in China
    • Australia: 14
    • France: 12 cases, 1 death
    • United Kingdom: 9
    • United Arab Emirates: 9
    • Canada: 8
    • Iran: 5 cases, 2 deaths
    • Philippines: 3 cases, 1 death
    • India: 3
    • Italy: 3
    • Russia: 2
    • Spain: 2
    • Belgium: 1
    • Nepal: 1
    • Sri Lanka: 1
    • Sweden: 1
    • Cambodia: 1
    • Finland: 1
    • Egypt: 1

    In other news, UK passengers aboard the ‘Diamond Princess’ will be evacuated by their government on Friday. The chartered evacuation flights (following the standard template) will land at Boscombe Down airbase in Wiltshire. Elsewhere in the anglosphere, Australia has extended its travel ban for arrivals from China into a fourth week. It will last until Feb. 29, the Guardian reported.

    * * *

    Hours after Japanese press reports claimed that two passengers who contracted COVID-19 aboard the ‘Diamond Princess’ died yesterday – news that was later confirmed by Japanese authorities – South Korea reported its first fatality while one of its major cities asked citizens to stay inside and avoid venturing outdoors, according to the Washington Post.

    According to Japanese government officials, both of the virus-related fatalities were Japanese citizens in their 80s who had been moved off the ship more than a week ago for treatment in a Japanese hospital, though the government has so far declined to release names.

    The latest reports Thursday morning confirmed another 13 cases aboard the DP bringing the total to 634. The odds that individuals being released from the 2 week quarantine on Thursday and Friday might have contracted the virus, but have yet to show symptoms, remains high. The death in South Korea raised the death toll ex-China to 10.

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    The speed is hardly a surprise for those who have been paying attention to all of the new research, instead of dismissing it for being ‘alarmist’ and ‘not peer reviewed’.

    Finally, earlier this week, researchers published the largest study yet of the outbreak, which confirmed that COVID-19 is more contagious than SARS and MERS, leaving it on par with seasonal influenza.

    Still, experts insist that the virus’s fatality rate is probably around 2%, meaning that it’s less deadly than SARS, but the wider spread will result in more deaths, CNN reports.

    “My sense and the sense of many of my colleagues, is that the ultimate case fatality rate … is less than 2%,” Dr. Anthony Fauci, director of the National Institute for Allergy and Infectious Diseases, told CNN’s Jim Sciutto on “New Day” Tuesday. “What is likely not getting counted is a large number of people who are either asymptomatic or minimally symptomatic, so the denominator of your equation is likely much much larger.”

    “So I would think at tops it’s 2% and it likely will go down when all the counting gets done to 1% or less. That’s still considerable if you look at the possibility that you’re dealing with a global pandemic,” he added.

    Even as President Xi does everything in his power to present an image of success to the Chinese people – in his speeches, he claims the Chinese government’s strict quarantines have been an unmitigated success – global experts, including the WHO, have warned that the disease will continue to spread globally, and that the end of this crisis is still far from certain.

    And as new confirmed cases dropped substantially on Wednesday in Hubei, everywhere else, the rate of new infections is accelerating.

    In South Korea, the number of cases soared by almost two-thirds to 104 overnight, further emphasizing our observation that the number of cases ex-China has started to accelerate notably as the curve starts to resemble an exponential progression.

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    One WHO health expert told a Japanese TV station on Thursday that the virus is “a moving target” making it difficult to collect information and treat people: “Nobody has ever had to deal with this situation before, this is a new virus on a ship with 4,000 people, there are no guidelines for that.” He added that he suspects there was a substantial amount of transmission before it arrived in Yokohama, adding that it was “not possible” to isolate everybody individually.

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    The WHO senior epidemiologist was responding to claims made by another expert in infectious disease that the Japanese had failed to observer proper quarantine protocols.

    Back in Korea, the mayor of Daegu, a city of 2.5 million where 10 South Koreans contracted the disease from a church service, asked residents to stay indoors. Iran also reported two infected that then died.

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    Experts suspect that one woman in Daegu may have infected at least 40 others by going to her Christian church, according to Yonhap. The alleged ‘superspreader’ is the reason for the huge jump in new cases on Thursday. Experts say the city is now facing an “unprecedented crisis” following the spike in cases.

    “We are in an unprecedented crisis,” Daegu’s mayor, Kwon Young-jin, told the press.

    Cases are also surging in Singapore, where Deutsche Bank confirmed that an employee in its Singapore office had contracted the virus.

    Adding to its woes, Iran reported three new cases on Thursday a day after it confirmed two virus-related deaths in the city of Qoms.

    Warnings about the virus’s economic blowback are increasing, as Goldman said Thursday that stocks aren’t completely pricing in the risks from the virus.

    Meanwhile, Air France-KLM, Qantas, and the global container shipping giant Maersk became the latest companies to warn about the financial impact from the continued spread of the coronavirus.

    As President Xi balances the risks to tens of thousands of lives on one hand, and keeping his promise to double the size of China’s economy by 2020 on the other, it seems the leadership in Beijing are beginning to believe their own propaganda. Premier Li Keqiang, Xi’s No. 2 who is in charge of the committee managing the crisis, local governments should seek to increase the rate of resumed production and work, according to China Central Television.

    Put another way: Come on in, the water’s fine, and if you get the virus and die, we’ll cremate your body and tell your family you died of “pneumonia.”

    China’s smartphone shipment declined 50%-60% during the 2020 Spring Festival holidays due to the coronavirus outbreak. About 60 million smartphones remain unsold.

    Chinese officials are pulling out all the fiscal and monetary stops to protect China’s damaged economy, and on Thursday local officials from Hubei announced a new lending scheme – a “special financing vehicle” – worth 50 billion yuan (more than $7 billion) to stabilize financing for local companies.

    To be sure, the drop in new cases last night was largely caused by health officials reversing their decision to include “clinically diagnosed” patients – i.e. those who haven’t yet tested positive due to a shortage of effective tests – in the case totals.

    The spate of deaths rattled investors overnight, and US equity futures are pointing to a lower open on Thursday, and a rush of risk-off trading in Asia has pushed the BBG dollar index to a 4-month high following the latest piece of evidence that the coronavirus isn’t simply “another flu”.


    Tyler Durden

    Thu, 02/20/2020 – 20:31

  • Houthi Missiles Target Aramco Facility Just After Pompeo Arrives In Saudi Arabia
    Houthi Missiles Target Aramco Facility Just After Pompeo Arrives In Saudi Arabia

    Saudi Arabia’s air defense Patriot missile systems were active at the coastal city of Yanbu in the early Friday morning hours after ballistic missiles were inbound, believed launched by Shia Houthi rebels out of Yemen. 

    Crucially, the Red Sea city of Yanbu is site of a large state-owned Saudi Aramco oil refinery, the likely intended target given the prior Sept.14 large scale attack on Aramco facilities which was also claimed by the Houthis. 

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    Yanbu is nearly 600 miles from Yemen, meaning sophisticated missile systems were used – likely the Burkan 2 – which in the past Washington has accused Iran of supplying. 

    Spokesman for the Saudi-led coalition, Col. Turki Al-Maliki, was cited in the Saudi Press Agency as saying the launch originated in Yemen’s capital of Sanaa, but that Patriot anti-air missiles intercepted the rockets. 

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    Al-Maliki furhter blamed the Houthi rebels for targeting “cities and civilians”. Sanaa remains under control of the Houthis after years of civil war which has witnessed Saudi and US military intervention against them since 2015. 

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    “The Royal Saudi Air Defense intercepted ballistic missiles launched by the terrorist Iran-backed Houthi militia towards Saudi cities,” the kingdom said in the statement.

    “The missiles were launched in a systematic, deliberate manner to target cities and civilians, which is a flagrant defiance of the International Humanitarian Law.”

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    Crucially, earlier in the day US Secretary of State Mike Pompeo arrived in Saudi Arabia where he met with King Salman and Crown Prince Mohammed bin Salman to discuss deterring Iran’s regional ambitions. 

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    Pompeo had reportedly just wrapped up his last meeting of the night with MbS when the attack happened. 

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    No doubt, the US will take the timing of the launch to be a deliberate message and will likely ultimately point the finger at Tehran. 


    Tyler Durden

    Thu, 02/20/2020 – 20:25

  • In First Visit To Libya, US Ambassador Meets Only With Haftar While Ignoring Tripoli
    In First Visit To Libya, US Ambassador Meets Only With Haftar While Ignoring Tripoli

    This is hugely revealing of where Washington stands on the now nine year old Libya conflict, which has recently seen former CIA asset Gen. Khalifa Haftar attempt to force the country under his control by his months-long assault on the capital of Tripoli. 

    US Ambassador to Libya Richard Norland, who had set up the embassy outside the country in neighboring Tunisia, for the first time this week visited the war-torn country which was thrown into chaos by the 2011 US-NATO intervention against Gaddafi. 

    Ambassador Norland met only with Gen. Haftar, head of the Libyan National Army (LNA), in Benghazi and reportedly didn’t even go to Tripoli. 

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    US Ambassador to Libya Richard Norland met with Khalifa Hafter this week. Image via Libya Review.

    On paper at least, Washington still officially supports the UN-recognized Government of National Accord (GNA) in Tripoli under Prime Minister Fayez al-Serraj. However, starting last April President Trump caught many in his own administration off guard when he unexpectedly thanked the renegade general for “securing Libya’s oil resources” at a moment he attempted to wrest control of the country from the GNA in Tripoli.

    Turkey and other backers of Tripoli will no doubt take note. Erdogan is the GNA and Serraj’s main military backer, and on Wednesday vowed that “if international efforts do not lead to a solution, we will support the reconciliation government until it controls the whole country.” He further stressed that “the European Union has no authority to make a decision on Libya,” after the EU announced it would send warships to enforce a UN arms embargo on the country.

    A US embassy statement claimed Norland met with Hafter as part of ongoing efforts to secure a ceasefire and ‘‘to reaffirm the importance of a negotiated settlement’’.

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    It said that the Ambassador ‘‘noted General Haftar’s stated commitment to a permanent ceasefire and reiterated the commitment of the Berlin participants to de-escalation, the arms embargo, and a political solution to the conflict’’.

    But perhaps most telling is that Norland has yet to even set a date to meet with Prime Minister Serraj, only saying it would happen “as soon as security conditions permit”.


    Tyler Durden

    Thu, 02/20/2020 – 20:05

  • Moscow Mules: NYT Secret Sources Claim Russia Backing Trump Re-Election
    Moscow Mules: NYT Secret Sources Claim Russia Backing Trump Re-Election

    The New York Times would like everyone to know that if Trump is re-elected in November, it wasn’t because of his accomplishments, the economy, or packed stadiums full of dedicated supporters.

    Nope – Putin’s at it again!

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    In an unbelievable Thursday report, the Times claims that five anonymous sources leaked the details of a Feb. 13 briefing to House Lawmakers by intelligence officials warning that Russia has already been interfering in the 2020 election.

    So – the Kremlin wants the president who, according to political analyst Ian Bremmer, has been tough on Russia – instead of, say, Bernie Sanders – the Democratic socialist who honeymooned in Moscow and would likely crash the US economy, thus weakening it, with his draconian socialist policies.

    The Times report gets better; the House briefing reportedly angered President Trump so much that he berated outgoing director of national intelligence, Joseph Maguire, and that he was particularly irritated that Rep. Adam Schiff (D-CA) was included in the session. The report implies that Maguire was replaced with pro-Trump ambassador to Germany, Richard Grenell, as a result of the incident. 

    During the briefing to the House Intelligence Committee, Mr. Trump’s allies challenged the conclusions, arguing that Mr. Trump has been tough on Russia and strengthened European security. Some intelligence officials viewed the briefing as a tactical error, saying that had the official who delivered the conclusion spoken less pointedly or left it out, they would have avoided angering the Republicans.

    That intelligence official, Shelby Pierson, is an aide to Mr. Maguire who has a reputation of delivering intelligence in somewhat blunt terms. The president announced on Wednesday that he was replacing Mr. Maguire with Richard Grenell, the ambassador to Germany and long an aggressively vocal Trump supporter. –New York Times

    Moments after the Times report was published, CNN immediately picked it up for their dozens of viewers.

    And of course, the hot-takes:

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    https://www.zerohedge.com/political/moscow-mules-nyt-secret-sources-cla…


    Tyler Durden

    Thu, 02/20/2020 – 19:45

  • "A Bond Yield Soars Over 1,000%": Lebanon Bonds Savaged Ahead Of Imminent Maturity
    “A Bond Yield Soars Over 1,000%”: Lebanon Bonds Savaged Ahead Of Imminent Maturity

    Though international financial press has tended to pay little attention to distressed Lebanon, this week was different as the country’s dollar-denominated bonds maturing next month were savaged in their worst day on record. 

    “A bond yield soars to more than 1,000%? It just happened with Lebanon,” Bloomberg reported. It’s next maturing Eurobond, $1.2 billion of notes due on March 9, plunged 17 cents on the dollar Wednesday to 55 cents, which sent its yield to maturity (which is in less than 3 weeks) soaring above 1,700%.

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    Beirut, Lebanon. Image source: Alamy/The Guardian

    The tiny and still protest-racked Middle East country further has a $700m Eurobond due to mature in April, and an additional $600m repayment due in June.

    “Most of Lebanon’s other Eurobonds have fallen to below 35 cents, while its five-year credit-default swaps hover around 12,730 basis points, the highest in the world,” Bloomberg reported further. 

    Given foreign currency deposit inflows have dried up, and a shortfall of dollars has fueled the crisis — even preventing banks from allowing clients to access their cash for the past months, defaulting on the eurobonds for the first time increasingly looks to be the only option as Lebanon continues to precariously defy financial gravity.

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    Bloomberg also said Beirut is now looking into the sale of bonds by local banks to foreign investors.  Lebanese Parliament Speaker Nabih Berri has further floated debt restructuring as the best solution for looming Eurobond maturities.

    Lebanon’s banking association urged Lebanese President Michel Aoun on Thursday to approach the crisis in “technical way far from politics” — as losses and piling pressure continues on banks.

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    Lebanon’s Al-Akhbar newspaper reported this week that banks including Citigroup Inc., Rothschild & Co. and JPMorgan Chase & Co. are being reached out to for technical advice on how the country should handle the imminent crisis.

    An International Monetary Fund team is also now in Beirut for consultations and to advise on a way forward in the crisis. If the IMF’s recent “experience” with handling Argentina’s ongoing pre-default crisis is any indication, expect disaster.


    Tyler Durden

    Thu, 02/20/2020 – 19:25

  • Why Is Maduro Still Pushing The Petro?
    Why Is Maduro Still Pushing The Petro?

    Authored by William Luther via The American Institute for Economic Research,

    In a recent Wall Street Journal article, Mary Anastasia O’Grady writes that Venezuela’s “National Superintendency for the Defense of Socio-Economic Rights is reportedly pressuring stores to accept the government’s new digital fiat currency, the petro.” The Venezuelan government claims its digital currency, which launched in early 2018, is backed one-for-one by a barrel of oil. The petro is also intended to circulate at a fixed exchange rate with the bolívar soberano, the latest iteration of Venezuela’s fledgling currency. 

    Ms. O’Grady quotes me summarizing some of the work I have done with Josh Hendrickson and Thomas Hogan, which shows that a government can get its citizens to use its preferred money so long as it is sufficiently big or is willing to levy sufficiently large punishments. But she leaves another question unanswered: why would the Venezuelan government prefer the petro?

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    Three reasons stand out.

    1. Avoiding U.S. Sanctions

    Venezuela relies heavily on oil revenues. According to OPEC, oil revenues typically account for around 99 percent of Venezuela’s total export revenues. And, historically, much of those oil exports have gone to the U.S. However, its oil exports fell by a third in 2019, in large part because of economic sanctions levied by the U.S.

    To fully appreciate the nature of the problem, it is useful to make a distinction between primary and secondary sanctions. Primary economic sanctions levied by the U.S. government prevent Americans from purchasing oil from Venezuela. However, the U.S. government has also announced that it will impose sanctions on anyone else trading with Venezuela. And these secondary sanctions have been pretty effective.

    Why are U.S. secondary sanctions so effective? J.P. Koning is certainly correct when he writes that most companies and countries do not want to risk losing access to U.S. markets. But he probably goes too far in claiming this “has very little to do with the U.S. dollar” functioning as the world’s reserve currency. The U.S. government has a much easier time monitoring international transactions executed in U.S. dollars.

    International transactions executed in U.S. dollars are typically cleared in a New York bank. Those banks know their customers and are obliged to hand over transactions data to the U.S. government when subpoenaed or if they suspect a crime is being committed.

    If the international transaction is executed in some other currency, like euros, the information is a little more difficult for the U.S. government to access. Of course, most European banks will refuse to clear the transaction as well since the U.S. government can require they hand over the relevant transactions data, in which case they would be found to have violated sanctions by processing the transaction, or they would lose access to U.S. markets on grounds of non-compliance; and, since most international transactions are executed in U.S. dollars, a European bank that cannot transfer money to and from U.S. banks will struggle to serve its international transactions-making customers. 

    Nonetheless, the risk of detection is probably a little lower than it would be if the transaction were made in U.S. dollars. And, as a result, the transaction is more likely to be executed.

    The international financial plumbing has a lot of pipes running to and from the U.S. And that gives the U.S. a lot of power to levy sanctions, not just on its own citizens, but also on citizens and companies of other countries interested in international trade.

    You can probably see where this is going. If Venezuela were able to create a parallel financial system, one with no pipes going to and from the U.S., it could make and receive international transactions with even less risk of detection than is afforded by other national currencies, like the euro, ruble, or renminbi.

    That’s where the petro comes in. As a digital currency, it enables one to send or receive funds virtually anywhere around the world. And, to the extent that those transactions are disconnected from the U.S. financial system, they are much less likely to be detected by the U.S. government. 

    Again: the sanctions still apply. But, by conducting transactions in petros, they are easier to get around.

    Why, then, does Venezuela push the petro at home? Why not just require it for international transactions? For one, few will be willing to accept the petro if there isn’t a very big market for petros. Hence, by increasing the demand for petros at home, Venezuela makes it less risky for foreigners to accept them — if only for a short period of time.

    2. Internal Monitoring

    For international transactions, the petro offers those interested in skirting U.S. sanctions some financial privacy not afforded by traditional cross-border electronic transfers. For internal transactions, in contrast, it almost certainly offers far less financial privacy than hand-to-hand currency.

    As Josh Hendrickson and I explain in a recent working paper, hand-to-hand currency — cash — affords a lot of financial privacy. There are drawbacks to using cash, to be sure. 

    Cash does not bear interest. It is easier to lose and easier to steal than balances held at a bank — and less likely to be insured due to loss or theft. It is more cumbersome for high-valued transactions, since one must carry many notes, and odd-amount transactions, since one must provide the correct denominations. And it typically requires the sender and receiver to be physically present in the same location when funds are transferred.

    But, for relatively small, local transactions where financial privacy is important, cash is still king.

    It is easy to imagine, then, why the Venezuelan government might want to push its citizens to swap physical bolivares for digital petros even in the absence of international sanctions. The petro makes it much easier to monitor transactions — and punish those conducting transactions inconsistent with the prevailing government’s objectives. 

    It is difficult to mount much opposition without funding. And it is difficult to raise funds for an opposition movement if would-be contributors worry they will be caught and punished. By requiring petro use, the Maduro regime tightens its grip on power.

    3. Cash Shortages

    Finally, widespread petro use would presumably help Venezuela with another one of its self-inflicted problems: cash shortages.

    When the money supply (i.e., cash and deposit balances) increases, as it tends to do quite rapidly in Venezuela, the purchasing power of that money falls. As a result, more cash is needed to make routine transactions. But Venezuela does not print its bolivares notes. And, for obvious reasons, the private companies willing to crank out its ever-increasing supply of bolivares notes are not willing to receive payment in bolivares.

    This has led to some amusing headlines. In April 2016, Bloomberg reported that Venezuela Doesn’t Have Enough Money to Pay for Its Money. In July 2018, the Economist reported that Venezuelan cash is almost worthless, but also scarce. The reality on the ground is far from amusing, though. The inability to make routine transactions leads to a decline in production, leaving ordinary Venezuelans even poorer than they already were.

    There are two solutions to this problem.

    • The first (and probably more benevolent) solution is to manage your money well. In the absence of hyperinflation, you don’t have to continuously print up vast quantities of ever-larger denomination notes. But managing your money well first requires getting your fiscal house in order. And that can be difficult to do when you are trying to maintain a populist winning coalition.

    • The second solution is to convert transactions executed in cash into those conducted with digital balances. By reducing the reliance on cash in normal times, you also reduce the absolute increase in demand for cash balances as the broader money supply increases. In the limit, where no one uses cash, you eliminate the need to print notes altogether.

    If the National Superintendency for the Defense of Socio-Economic Rights is successful in pressuring stores to accept the petro, it would serve the Maduro regime well. By making it easier to avoid sanctions, the petro enables the government to regain some of its lost oil revenues. By making it easier to monitor domestic transactions, the petro aids efforts to stamp out political opposition. And, by reducing the need to print up so many new notes during periods of hyperinflation, the petro reduces the likelihood and magnitude of cash shortages. 

    Alas, in helping the Maduro regime maintain power, the petro seems unlikely to improve the lives of ordinary Venezuelans.


    Tyler Durden

    Thu, 02/20/2020 – 19:05

  • US Agency Which Secures President's Communications Says Its Systems Were "Breached" 
    US Agency Which Secures President’s Communications Says Its Systems Were “Breached” 

    A US defense agency responsible for securing the communications of the president and senior officials has said it believes personal data from its systems were “compromised” during a 2019 data breach. 

    Reuters broke the story Thursday, based on a letter sent from the Defense Information Systems Agency (DISA) to potential victims of the high level breach: 

    The U.S. defense agency responsible for secure communications for the U.S. president and other high-level officials said social security numbers and other personal data in its network may have been “compromised”, in a letter seen by Reuters that was sent to potential victims.

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    Image source: Bloomberg

    The letter identifies the breach as occurring between May and July 2019, and involved personal data possibly compromised “in a data breach on a system hosted by” the agency.

    The agency employs some 8,000 military and civilian employees and is under the Department of Defense. 

    It’s believed that among sensitive data leaked are Social Security numbers and other personnel information; however, it’s as yet uncertain whether the data was stored on a classified system.

    A follow-up statement by a DISA spokesperson confirmed that, “The Defense Information Systems Agency has begun issuing letters to people whose personally identifiable information may have been compromised in a data breach on a system hosted by the agency.”

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    It noted further: “While there is no evidence to suggest that any of the potentially compromised PII was misused, DISA policy requires the agency to notify individuals whose personal data may have been compromised,” according to Tech Crunch.

    While there’s no indicator or evidence shared thus far as to who or what entity may have been behind the breach, one report highlights that “Last week, the Justice Department charged four members of the Chinese military with hacking into Equifax, the credit rating agency, which saw more than 147 million credit reports stolen.”

    Chinese state-linked hackers are also believed behind broader efforts to breach US federal systems such as the Office of Personnel Management.


    Tyler Durden

    Thu, 02/20/2020 – 18:45

  • The Rate Of Diamond Princess Infections Suggest Worldwide Infections Are Much Higher Than Official Reports
    The Rate Of Diamond Princess Infections Suggest Worldwide Infections Are Much Higher Than Official Reports

    Submitted by Eric Ross, Chief Investment Strategist of Cascend

    Summary: The Diamond Princess cruise ship is the largest controlled COVID-19 coronavirus infected population outside of China

    • 20% of the ship were infected over three weeks
    • From this, it suggests the rate of official reported infections (largely in China) is likely too low
    • This corroborates well with what our models have been saying: official reported infections are likely too low
    • From our models, far more people have likely been infected, but the death rate is also (thankfully) coming in lower than expected – worse than the flu, but perhaps in-line or lower than SARS, and definitely not a death sentence
    • Two passengers died last night from the Diamond Princess (male 87 and female 84) after being airlifted from the ship to a hospital a week ago, which implies a 1-2% death rate
    • And 14 days might not be long enough to conclusively prevent COVID-19 transmission, from the Diamond Princess experience, although passengers have now been released

    The rate of Diamond Princess infections suggest worldwide infections are likely much higher than official reports

    • From the log scale chart below, the rate of Diamond Princess infections is much higher than infections suggested by official data (on log charts, lines with the same slope have the same growth rates)
    • Additionally, the Diamond Princess growth is very stable along the growth line versus the official data which doesn’t seem to follow a growth trend
    • Extending the fitted Diamond Princess line back to Patient Zero shows the first patient likely occurred on 21 January 2020 – in very good agreement with the actual assumed Patient Zero arriving on the cruise on the afternoon of 20 January
    • There is a slight possibility that massive quarantines in Hubei and China overall have dramatically slowed the infections rate, but we believe other possibilities are more likely

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    Cruise ships give us some of the best looks of the COVID-19 coronavirus

    • This is as close to a clinical trial as we will likely get
    • We can study rates of infections directly
    • An isolated, fixed-number population
    • No interaction with other populations (different from, say, Wuhan where 5m people were said to have fled before quarantine)
    • And free from lack of testing kits, medical staff, Chinese government determinations of “acceptable diagnosis techniques”, self-treating patients, and other data influences (organic or political)

    Actually, the Diamond Princess cruise infection rates should be much lower than in normal cities

    • Passengers who have tested positive for COVID-19 have been evacuated to onshore quarantined medical facilities (so only spread before symptoms manifest)
    • Cruise passengers have been largely quarantined in their rooms (except for short breaks for fresh air, much like prison), thus likely keeping measured spread rates much lower than in a city where there are many modes of interactions (and thus transmission)
    • Passengers can’t get off the ship without permission (unlike in Wuhan where 5m people were said to have left just before quarantine)
    • Everyone on the ship is being closely monitored
    • And passengers and staff are keenly aware of any slight symptoms, and quick to report
    • Additionally, passengers with medical need are quickly ferried off the ship to an onshore quarantined medical facility

    Several medical professionals have criticized the Japanese efforts on the Diamond Princess

    • The World Health Organization (WHO) and the U.S. Centers for Disease Control (CDC) both commended Japan’s handling of the cruise ship quarantine
    • As of 12 February 2020 all infections (174 at that point) were deemed to have been contracted BEFORE quarantine
    • However no update to this has been provided
    • Did the next 447 infections occur from a longer infectious timeframe? (i.e longer than 14 days?)
    • Or did these infections occur because of a breakdown of quarantine
    • Kentaro Iwata (an infectious diseases expert at Kobe University) visited the ship and assessed the quarantined process was flawed
    • David Shu-Cheong Hui (director of the Stanley Ho Centre for Emerging Infections Diseases in Hong Kong) suggested a far better quarantine would be to have moved all passengers and staff to an onshore quarantine, rather than keep everyone in close quarters
    • Anthony Fauci (director of the U.S. National Institute of Allergy and Infectious Diseases) stated that the quarantine process had failed

    From our model we see the number of infections are likely much higher than official reports (for a variety of reasons)

    • But the death rate is likely not very high either; We expect the number of infections to crest in late March 2020 and subside from there
    • With careful measures, the outbreak will be contained mainly in China
    • Although we caution it is still very early in this outbreak to have an absolute answer

    Why could China’s numbers be much lower than the actual infections?

    • China’s Hubei province acknowledged there methods for classifying infections was not counting many infections
    • They relied only on a nucleotide analysis and most of China is short of nucleotide tests
    • Hubei is the ONLY province which has announced an official change in diagnosis techniques
    • Medical staff and CT scans are below demand as well
    • For those taking the tests, there are false negatives for these tests (a normal issue)
    • Many patients are unwilling or unable to go to the hospitals to be tested – fear of being quarantined, or of catching the virus there
    • Many people who are infected will ride it out and be fine, regardless if they show up to be tested (this doesn’t seem to be like Ebola where 60+% of patients die, and even more without medical intervention)
    • Additionally it could be intentional:
      • It is possible many infected patients are not being tested to keep official numbers low
      • And there is little incentive for Chinese officials (who want to portray a sense of calm) to test patients who have already died (although this would be wise to help learn more about the virus)

    About the Diamond Princess cruise ship

    • 2,670 passengers and 1,100 crew for a total of 3,770
    • Diamond Princess travels mainly between Japan, South Korea, Singapore, Vietnam, Taiwan and Malaysia
    • Plans to maintain this route through early 2021 (via cruise schedules)

    Timeline of events

    • On 20 January 2020 an 80-year-old guest from Hong Kong embarked in Yokohama and disembarked in Hong Kong on 25 January – this guest tested positive for COVID-19 on 1 February 2020 and is suspected to be “Patient Zero” of the ship
    • 3 February the ship was quarantined in Japanese waters – it had stopped in 14 ports over the prior month
    • On 4 February 2020 when 10 passengers were diagnosed with COVID-19
    • 3,700 passengers and crew were then quarantined by the Japanese Ministry of Health, Labour and Welfare for 14 days, moored off the Port of Yokohama
    • On 11 February 2020 a quarantine officer was diagnosed
    • On 18 February 2020 the U.S. government 300 American passengers to the U.S., and quarantined them at military bases in California and Texas (except 14 of them who tested positive for COVID-19 are in hospitals)
    • On 19 February 2020 quarantine lifted and another 300 passengers left the Diamond Princess cruise ship


    Tyler Durden

    Thu, 02/20/2020 – 18:25

Digest powered by RSS Digest

Feb 20

Today’s News 20th February 2020

  • UK Hospitals To Deny Care To "Racist" Or "Homophobic" Patients
    UK Hospitals To Deny Care To “Racist” Or “Homophobic” Patients

    Authored by Paul Joseph Watson via Summit News,

    Patients deemed to be “racist” or “homophobic” will be denied care in NHS Trust hospitals under new rules set to take effect in April.

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    “Currently, staff can refuse to treat non-critical patients who are verbally aggressive or physically violent towards them,” reports Sky News.

    “But these protections will extend to any harassment, bullying or discrimination, including homophobic, sexist or racist remarks.”

    Police will also be given new powers to prosecute “hate crimes” committed against NHS staff.

    What is determined to be “racist” or “homophobic” is anyone’s guess, since many elderly patients will be totally unfamiliar with modern politically correct speech codes and could be deemed to have behaved in a racist or homophobic way even if they didn’t maliciously intend to.

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    As Jack Montgomery highlights, “In late 2017 an NHS patient who requested a female nurse to carry out a cervical smear complained when the hospital sent a person with “an obviously male appearance… close-cropped hair, a male facial appearance and voice, large number of tattoos and facial stubble” who insisted “My gender is not male. I’m a transsexual.”

    The line between critical and non-critcal care is also up for debate. Will refusal to treat a patient because they said something someone deems offensive result in accidental deaths?

    This is even worse than China’s social credit score, which hasn’t yet gone so far as to punish people by withdrawing medical treatment if they engage in wrongthink.

    First it was deplatforming people from social media websites, then it was deplatforming people from bank accounts and mortgages. Now it’s deplatforming people from hospital treatment. Literally eliminating people’s right to basic health care because of their political or social opinions.

    It’s also important to emphasize that these changes are coming in under a supposedly “conservative” government.

    Respondents poked fun at the new rules.

    “This is going to be hilarious when a boomer is denied his double bypass cause he called someone coloured on Facebook,” remarked one.

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    “Don’t get sick in the UK if you’ve ever posted “Grooming gang” statistics,” commented another.

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    *  *  *

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    Tyler Durden

    Thu, 02/20/2020 – 02:00

  • Global Centralization Is The Cause Of Crisis – Not The Cure
    Global Centralization Is The Cause Of Crisis – Not The Cure

    Authored by Brandon Smith via Alt-Market.com,

    Once you understand the globalist mindset, almost everything they do becomes rather robotic and predictable.  It should not be surprising that the World Health Organization (WHO), a branch of the United Nations, has been so aggressive in cheerleading for the Chinese government and its response to the coronavirus outbreak. After all, China’s communist surveillance state model is a beta test for the type of centralization that the UN wants for the entire planet. They certainly aren’t going to point out that it was China’s totalitarian system that allowed the outbreak to spread from the very beginning.

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    Even now Xi Jinping is trying to rewrite history, claiming that he had been swift in responding to the crisis more than a month before he actually did.  The lie that the coronavirus mutated naturally in a food and animal market in Wuhan continues to be peddled by the mainstream media even though no evidence supporting this claim exists.  And China is still releasing rigged death and infection numbers while they have over 600 million people under martial law lockdown and their crematoriums continue pumping out the fumes of the dead 24 hours a day 7 days a week.

    Brave health workers like Li Wenliang, who was punished by the government for warning about the virus in December, have died in the process of trying to fight against the centralized behemoth just to get vital information to the world, but that never happened, right? It was actually president Xi and the CPC that saved the day. The WHO and the CPC say so. You’ll never hear the UN praise the efforts of Li Wenliang; they want his name to disappear down the memory hole as much as the Chinese government does.

    The developing narrative is a familiar one – Local officials “stifled” the response to the outbreak while the centralized national leadership put things back on track with extreme control measures that have turned the Hubei province into a veritable internment camp. Whatever you do, don’t point out that it was the national government’s habit of imprisoning health officials that release “false information” that led to the delayed reaction on the coronavirus. Also, don’t point out that ground zero for the outbreak is just down the road from the largest Level 4 Biohazard Lab in Asia, because that would make you a “conspiracy theorist”.

    The message being pounded into the public consciousness is clear: “Shut up and accept that Centralization works”. Even when it fails miserably, it is still the answer to all our problems. All we have to do is “adjust” the historical record a little bit every time the system breaks and then institute even MORE centralization in response.

    In other words, if the interdependent and draconian top-down structure of the globalist state leads to crisis, then it is because it was not centralized ENOUGH. Centralization always begets more centralization.

    The financial fascist system of central banking and corporate oligarchy leads to the socialist welfare state, and the socialist welfare state leads to the surveillance state, the surveillance state leads to the martial law state, and the martial law state leads to full-on global governance; an endless elitist empire.

    The failings of centralization have caused numerous problems long before it led to a potential pandemic. The pandemic simply clarifies the issue. For example, the breakdown in the global supply chain is becoming a bigger threat by the day.  The Baltic Dry Index a measure of shipping rates as well as global demand for goods, has essentially collapsed.  This should have been the first warning sign that the supply chain was in trouble, but the mainstream doesn’t pay attention to the fundamentals, only stock markets.  Enter Apple, one of the largest companies in the world, which has now abandoned its projections for 2020 and finally admitted that the shutdown of Chinese factories may just be a problem. 

    Some mentally challenged people out there are scoffing sarcastically at this issue, saying “Oh no, whatever will we do without i-Phones…?”.  They don’t grasp the wider implications.  If Apple’s production is going down because of the supply chain disruption then this is a signal that multiple companies and most of the economy are also going down because of supply chain disruptions. It’s not about i-Phones, it’s about the bigger picture.

    Globalism has led to interdependent economies and nation states that no longer have redundancies in production. We have been forced to rely on production centers on the other side of the world for a vast majority of our goods.

    When China shuts down, the US economy loses almost 20% of its supply chain. When Japan, Singapore, Taiwan, Hong Kong and Vietnam shut down from the virus, you can add another 10% to 15% on top of that. Retailers in the US represent around 70% of GDP. Cut off the supply chain in Asia and retailers lose a vast array of goods to sell. The US economy eventually shuts down also, even if the virus never spreads here.

    Some people will argue that we don’t need all the “cheap plastic crap” from Asia anyway, and this situation is a “good thing”. Sorry to break it to you, but America’s economy is built on the selling of cheap plastic crap (along with the selling of the fiat dollar as the world reserve currency). Walmart (Chinamart if you discount agricultural products) is the largest employer in the US and the world, after all. Right or wrong, our economic system is so globalized that the fall of the Chinese dominoes will eventually knock down our own dominoes.

    But when this disaster occurs and numerous national economies suffer from enforced globalist integration, guess what will happen next? The globalists will ride to our “rescue” with even greater centralization. This was their agenda all along.

    Many people in the liberty movement are now aware of the Event 201 simulation, a war game run by globalists in the Bill and Melinda Gates Foundation and the World Economic Forum on a “theoretical” coronavirus pandemic that kills 65 million people. This simulation took place only a couple of months before the real thing exploded in China in December. But hey, maybe that’s all just amazing coincidence. What concerns me even more is the solution that was presented at the end of Event 201 – the creation of a centralized global financial body that would manage the international response to the outbreak.

    Isn’t it amazing how every major catastrophe caused by globalism seems to lead to more globalism? One might start to wonder if some of these events were triggered by incompetence, or if they were deliberately engineered. At the very least, crisis events have been allowed to fester unchecked by organizations like the WHO as they continue to write off the coronavirus as a non-issue that is “well under control” by a Chinese government that caused it to spread in the first place.

    So here is what is going to happen next:

    Best case scenario is that the Western world is mostly unscathed by the virus itself but the economic supply chain suffers major setbacks. The global economy, which was already crashing over the past year due to historic levels of corporate and consumer debt, not to mention faltering exports and freight, is finally tipped over the edge. The massive Everything Bubble, fueled by a decade of inflationary central bank stimulus, implodes. Governments respond with totalitarian measures in the name of “protecting the public”.

    Globalist institutions like the IMF step in and suggest that frail national monetary systems come under the management of their Special Drawing Rights basket in order to mitigate the debt crisis. Essentially, this is the first step to global governance.

    Worst case scenario, the virus spreads throughout the US and Europe and governments respond the same way China’s government has; martial law and full blown concentration camp culture. This would lead to civil war in the US because we are armed and many people will shoot anyone trying to put us into quarantine camps. Europe is mostly screwed.

    The establishment then suggests that paper money be removed from the system because it is a viral spreader. China is already pushing this solution now. Magically, we find ourselves in a cashless society in a matter of a year or two; which is what the globalists have been demanding for years. Everything goes digital, and thus even local economies become completely centralized as private trade dies.

    Again, this might be an engineered event, or it might simply be that the globalists are exploiting a natural outbreak. Either way, they are not going to let a good crisis go to waste. Whether or not they succeed is dependent on several factors, but mostly, its dependent on us. How many people will buy into the notion that centralization is the answer to out problems? How many people will realize that centralization is the CAUSE of all our problems? And how many people will fight to prevent ultimate centralization under a psychopathic globalist cult?

    A viral outbreak is a significant danger to us all, but an even greater threat is the supposed cure. Trading our economic and social freedom in the name of stopping the coronavirus?  No matter how deadly the bug, it’s just not worth it.

    *  *  *

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    Tyler Durden

    Wed, 02/19/2020 – 23:45

  • New Estimates Suggest Chinese Tech Shipments Are About To Crash
    New Estimates Suggest Chinese Tech Shipments Are About To Crash

    Now that Apple has opened the floodgates and made it entirely clear that China’s economic collapse will slash revenue guidance on the year and lead to production woes through April, an onslaughter of earnings downgrades from other top technology companies with significant operations in China could be imminent. 

    Evidence grows by the day of supply chains grinding to a halt as the second-largest economy in the world falters (as described here last week)…

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    We’ve described how China’s economic output remains frozen, and even if supply chains were able to restart, companies don’t have enough capital to cover wages, or have delayed or stopped paying workers, suggesting that the Covid-19 outbreak has left businesses on the brink of disaster. Worse, workers can’t freely move around the country, and many are subjected to travel restrictions and quarantines, which has forced a massive labor shortage.

    This is creating a perfect storm that could lead to an extended period of depressed factory output, triggering future shortages of products destined for Eastern and Western markets, and even more ripples across global supply chains.

    As we’ve routinely noted in the last several weeks, the most exposed sector to the continued crunch across Chinese factories is technology. 

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    Putting what we’ve already summarized together, there’s no way that full production can be seen by the end of this month or in early March, which means a massive reduction in shipments and product shortages are imminent. This will ultimately force many tech companies with exposure to China to revise their full-year earnings on the year.  

    TrendForce published a report earlier this week that serves as a preview of what’s to come for technology shipments. 

    The research firm said shipments of smartwatches, smartphones, computers, monitors, TVs, video game consoles, smart speakers, and automobiles, will take a big hit in the first quarter. 

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    Here’s what the firm said about shipments for smartwatches, smart bracelets, and TWS Bluetooth earphones: 

    “In spite of the projected mid-February work resumption date, work stoppages, labor shortages, and material shortages can bring about a decline in 1Q20 production volume, with deferred releases of new products originally scheduled for 1H20 release.

    In terms of the Chinese market, Chinese-branded wearables are mainly aimed at domestic sales and therefore expected to suffer more losses in 1H20 compared to international brands. In particular, competitive-priced generic brands and new brands may be even more affected by the outbreak because component suppliers and production capacities are prioritized to fulfill orders from established brands first, and consumers will have reduced willingness to buy in the short term.”

    TrendForce said the virus outbreak is having a “high impact on the smartphone industry because the smartphone supply chain is highly labor-intensive. 1Q20 smartphone production is projected to decline by 12% YoY, making it the quarter with the lowest output within the past five years.” 

    “Parts in the upstream supply chain, including passive components and camera modules, are also showing shortages, which can potentially continue to negatively affect smartphone production in 2Q20, if the outbreak is not contained by the end of February. Should the outbreak intensify, TrendForce considers market need to be the most important consideration in the long-term analysis of the smartphone industry. Because of the interconnectedness of the global economy, the progression of China’s outbreak damages not only China’s GDP, but also the overall global economy, leading to a reduction of consumer purchasing power and subsequently presenting a difficult challenge for the overall smartphone industry. 2020 smartphone production is projected to reach 1.381 billion units, a 1.3% decline YoY and the lowest output since 2016. Still, due to the outbreak’s mercurial nature, it is entirely possible for 2020 smartphone production to fall below this forecast.”

    As for notebooks, LCD monitors, and LCD TVs, these supply chains have been “undoubtedly hit the most by the coronavirus outbreak.” 

    “These companies lost precious working days after work resumption was postponed. After their production is resumed, on a whole, operators’ work resumption rate is low. Besides, all types of materials and components are in shortage. Hence, productivity plummets. For TVs and monitors, their manufacturing processes and demand for materials are similar. Therefore, according to TrendForce, in 1Q20, the TV set shipment is predicted to fall from previous prediction (48.8 million units) to 46.6 million units because of the outbreak. The monitor set shipment is projected to decrease from previous prediction (29 million units) to 27.5 million units. To assemble a NB set requires complicated key components. At the current stage, NB’s batteries, hinge, and PCB already experienced shortage or out of stock. This factor might cause some brands’ shipment quantity to remarkably drop from previous prediction (35 million units) to 30.7 million units in 1Q20.

    The pandemic not only negatively affected the production’s supply chain, but it also hurts China’s consumer confidence and reduces end-market demand in the short and long run, respectively. Considering the pestilence’s potentially negative impact to China market’s demand, TrendForce moved down the top 3 application categories’ shipment scales for the year 2020. TVs’ shipment scale was reduced from previous prediction (219.6 million units) to 218.0 million units, down by 0.7 percentage point. Monitors’ shipment was reduced from previous prediction (125.8 million units) to 124.5 million units, down by 1.0 percentage point. Notebooks’ shipment was moved down from previous prediction (162.4 million units) to 160.2 million units, down by 1.4 percentage points.”

    We expect a waterfall of negative earnings preannouncements to start for many technology companies with modest exposure to Chinese output. Apple’s downgrade on Monday was only the beginning… 

    Wall Street has priced the stock market for perfection while ignoring China’s virus crisis as one of the biggest shocks to hit the global economy since a decade ago. 

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    Is the virus outbreak in China about to pop the Fed-induced stock market bubble?


    Tyler Durden

    Wed, 02/19/2020 – 23:25

  • The Intolerance Of The "Tolerant" Left: The End Of Liberal Democracy?
    The Intolerance Of The “Tolerant” Left: The End Of Liberal Democracy?

    Authored by Elisabeth Sabaditsch-Wolff  via The Gatestone Institute,

    We recently witnessed two events that indicated the possible demise of liberal democracy. The implications should frighten supporters of democratic forms of government in which individual rights and freedoms are officially recognized and protected, and the exercise of political power is limited by the rule of law.

    The growing intolerance of many “left-wing” groups is apparent in the uproar of the democratic election of the state premier of the German state of Thuringia as well as in the performance of the Speaker of the US House of Representatives, Nancy Pelosi, publicly ripping up US President Donald J. Trump’s State of the Union address. It was an official document that belongs not to her but to the public, and of which she was merely its custodian.

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    That does not even start to mention the entire sham “impeachment” of President Trump, in which centuries of accepted due process were thrown in the gutter. The Senate “trial,” which probably should have been dismissed from the get-go as the “fruit of the poisonous tree” — a legal metaphor meaning that if any evidence is found to be tainted or violates a defendant’s constitutional rights, whatever “fruit” follows from it must be thrown out. The House, however, like the Inquisition, is allowed make up its own rules, and make them up it did. Another central problem seemed to be that a US president is obligated by law — under Ukraine (12978) – Treaty on Mutual Legal Assistance in Criminal Matters, signed in 1998 — not to hand taxpayer money over to the Ukraine without first checking to see that there is no corruption. Trump did, there was not, case closed. Trump was not only totally acquitted in a show trial that should not have existed in the first place, but his accusers seemed more guilty of what he was accused of — the non-crimes of “abuse of power” and “obstruction of Congress” — than he was.

    Currently, there is growing concern on both sides of the Atlantic that the ability of many on the political “left” to accept the democratic process and the rights of those with whom one disagrees is becoming increasingly rare. According to Andreas Unterberger, Austria’s most widely read political blogger:

    “The left exhibits mocking scorn or even aggressive violence. If a relevant part of the population is unwilling to respect democracy and those with dissenting opinions, then the constitutional state will necessarily implode.”

    Sometimes it seems as if the underlying intention is actually to dismantle democratic norms and replace them with authoritarian ones. The thinking seems to be: If you vote any way other than for what we want, the result is automatically illegitimate and need not be accepted. In the US, this view had been evident in the three-year refusal to accept the election of President Trump by the “wrong” people”, as well as a refusal by many last year to accept the vindication of US Supreme Court Justice Brett Kavanaugh in yet another show trial devoid of evidence , and most recently warnings about a refusal to accept President Trump’s acquittal. The title of the latest book by the noted defense Attorney Alan M. Dershowitz, Guilt by Accusation, seems to be fast becoming the norm.

    In Germany, the media establishment as well as Chancellor Angela Merkel were shocked to the point of demanding the reversal of the vote for the “wrong” premier of the state of Thuringia because the election came as a result of the “wrong” votes, namely those from the Alternative for Germany party (AfD). Baron Bodissey of the blog Gates of Vienna provided background information:

    “The FDP (Freie Demokratische Partei, Free Democratic Party) is a relatively minor conservative business-oriented party in Germany. Nowadays it would be described as “classical liberal” if it were in an American context. In last fall’s state elections in Thuringia, the FDP just barely surpassed the threshold to seat representatives in the state parliament. The Left (Die Linke) gained the greatest share of the vote, but the constellation of leftist parties did not have enough seats to automatically form a government.

    “Since then there has been wheeling and dealing by all parties in an effort to establish a viable coalition. Yesterday came a big surprise: with the support of the CDU (Christlich Demokratische Union, Christian Democratic Union) and the AfD (Alternative für Deutschland, Alternative for Germany), Thomas Kemmerich of the FDP was elected minister president (the equivalent of premier or governor) of the state of Thuringia…

    [I]t seemed the cordon sanitaire against the AfD had been breached. Up until now, all across Western Europe the major immigration-critical populist parties had been kept out of government: the Sweden Democrats, the PVV in the Netherlands, Vlaams Belang in Belgium, and the AfD in Germany. Even though those “xenophobic” parties are quite popular, they have yet to obtain a majority of the vote in their respective countries, and the other parties simply agree never to join a coalition with them. Did yesterday’s events in Thuringia signal a change?”

    Not quite. The cordon shuddered a little bit, but remained intact. It seems the FDP never asked for the support of the AfD, and received it unexpectedly. Mr. Kemmerich and his party were just as appalled by the AfD as [the] leftist parties were. And Mr. Kemmerich announced he would resign his position to force new elections.

    Mr. Kemmerich’s announcement of resignation came as a result of massive intimidation against his family, his children requiring police protection, and “Antifa” protests outside Thuringia’s parliament building. In this context, it is important to note the irony of the political left. The Left Party (“Die Linke”), the successor party of the SED, the Socialist Unity party of the communist German Democratic Republic (DDR), accused the Free Democrats of believing that it was “better to rule with fascists than not to rule at all.” Indeed, there are grounds to argue that it is the Left Party, exhibiting the intolerance of fascists as the predecessors of the Left Party, that was responsible for the cold-blooded murder of Germans trying to escape East Berlin by breaching the Berlin Wall. Even more ironic, it was on the 31st anniversary of the execution of 17-year-old Chris Gueffroy, guilty in the eyes of the ruling elite of wanting to leave the DDR, that the German mainstream media began its campaign of hatred against a democratically elected official.

    Adding insult to injury, the strategist of the Left Party had the gall openly to insinuate that Mr. Kemmerich was voted into office “by the grace of those who murdered liberals, commoners, leftists and millions more in Buchenwald [concentration camp] and elsewhere.” In saying this, the strategist and others used what is currently the most potent weapon in political discourse: the instrumentalization of Nazi crimes as a weapon against political competitors. According to the German political analyst Vera Lengsfeld, politicians and media are employing psychological terror by igniting the “Nazi nuclear bomb” and by suggesting that the election of Mr. Kemmerich occurred thanks to a “Nazi party”, namely the AfD. Lengsfeld adds:

    “What has taken place in Germany in the past three days can be considered a breach of the dam. Germany is witnessing the gradual erosion of democracy and the rule of law, a process that began in 2015 [during the migrant crisis] and which has become even more visible since and has ended in putsch against democracy.

    “Overnight, Germany has turned into an open dictatorship of convictions. Unless true democrats display resistance and firmly defend democracy and the rule of law, it will once again become cold and dark in Germany.”

    Dushan Wegner, another political commentator, asks whether a country can call itself a democracy if its chancellor demands the annulment of the election and the Free Democrats buckle in the face of disagreement, only because of the election of a state minister with the help of votes of a party behind a cordon sanitaire. Wegner argues:

    “From faraway South Africa, Chancellor Angela Merkel said something very painful and simultaneously very frightening and shocking: ‘The election of the state minister was unforgivable and the vote must be reversed.’

    “The chancellor openly demands the annulment of a democratic vote, one that she is unhappy about, and politics remains silent. I find it difficult to call those democrats that do not use all democratic and legal means to remove the chancellor from office.

    “Germany currently fluctuates between democracy and absolutism thanks to Angela Merkel. Why bother exercising the right to vote when the ‘wrong’ choice can be annulled by the media and the chancellor through propaganda and veto?

    “A Chinese proverb says: ‘May you live in interesting times.’ Yes, these are interesting times, and yes, it is a curse. What is positive about interesting times is that they force us to define our stance. Do we stand for democracy or for elections until the results suit the ruler?”

    Josef Hueber explains in a commentary how in a pseudo-democracy, elections mean voting until the result is “correct.” Moreover, it is important to use the right words: the undesirable democratic election is a “political Fukushima”, a breach of the dam, a catastrophe. The consequence of elections can be an “undesirable” or unexpected result for one political side; some will be elated, others disappointed. One could argue that this is democracy; this is how it is supposed to be. The understanding of democratic processes was unveiled with what recently transpired in the Thuringian parliament.

    The situation in the United States is not much different. Th recent State of Union (SOTU) address demonstrated clearly what the Democrats’ view of tolerance and respect for the office of the president looks like. What began with the absence of self-avowed democratic socialist Alexandria Ocasio-Cortez, Ayanna Pressley, Maxine Waters and others ended in Speaker of the House Nancy Pelosi ripping up a copy of the speech at the end of the State of the Union address delivered by democratically elected President Donald Trump. By doing so, Pelosi disdained all America, not just the president.

    Pelosi disdained the president’s supporters as well as a black girl who wants nothing more than a choice in education; she disdained the Tuskegee airman honored by the president; she disdained the great economic performance of the country. She acted in a petty and classless manner, unfitting for someone holding one of the highest offices in the United States. When asked by a reporter why she tore up Trump’s speech, Pelosi shot back, “Because it was the courteous thing to do considering the alternatives.” What are the alternatives, Madam Speaker? The legal scholar Jonathan Turley, who disagreed with some aspects of the SOTU, said:

    “She represents the House as an institution — both Republicans and Democrats. Instead, she decided to become little more than a partisan troll from an elevated position. The protests of the Democratic members also reached a new low for the House. Pelosi did not gavel out the protest. She seemed to join it.

    “It was the tradition of the House that a speaker must remain in stone-faced neutrality no matter what comes off that podium. The tradition ended last night with one of the more shameful and inglorious moments of the House in its history. Rather than wait until she left the floor, she decided to demonstrate against the President as part of the State of the Union and from the Speaker’s chair. That made it a statement not of Pelosi but of the House.”

    Pelosi’s behavior shows a disappointing lack of argumentative abilities. If tolerance is to mean anything, Pelosi and her fellow Democrats should have exhibited just that. Instead, she, as a role model, did the opposite by engaging in petty and irresponsible behavior, followed by days futilely trying to have her outburst scrubbed from social media.

    The entire episode fits seamlessly into a series of illiberal actions by the left in recent times. Consider the shutting down of debates on college campuses, thereby restricting freedom of speech. Or the attack on people wearing MAGA (Make America Great Again) hats. The author Kim R. Holmes explains the left’s increasing intolerance as follows:

    “What we call a ‘liberal’ today is not historically a liberal at all but a progressive social democrat, someone who clings to the old liberal notion of individual liberty when it is convenient (as in supporting abortion or decrying the ‘national security’ state), but who more often finds individual liberties and freedom of conscience to be barriers to building the progressive welfare state.”

    Seldom has the left on both sides of the Atlantic exhibited its increasing intolerance of dissenting opinions in a more concentrated manner than these past weeks. The foundations of liberal democracy are shaking noticeably. We are presently faced with yet more politically-based show trials: of the parliamentarian Geert Wilders in The Netherlands and of Matteo Salvini in Italy. It is up to the population and voters to decide whether liberal democracy is worth fighting for.


    Tyler Durden

    Wed, 02/19/2020 – 23:05

  • Two Years After Handing It The Biggest Ever Bailout Loan, IMF Finds Argentina Debt Levels Are "Unsustainable"
    Two Years After Handing It The Biggest Ever Bailout Loan, IMF Finds Argentina Debt Levels Are “Unsustainable”

    Back in the summer of 2018, when the IMF handed Argentina an unprecedented $56 billion bailout loan, the largest in IMF history, some warned that this is a case of deja vu similar to the 2001/2002 precedent when Argentina eventually defaulted on its foreign creditors, while humiliating the IMF which had signed off on Argentina’s economic policies that ended up in bankruptcy court. The IMF, however, was confident that this time would be different, and rushed – under now-ECB head Christine Lagarde – to hand to Argentina the greatest amount of money the IMF had ever disbursed to a struggling nation.

    It turned out that this time wasn’t different, and after completing a week of meetings in Argentine, the IMF – which so generously handed out other people’s money to prop up the crumbling, corrupt Latin American nation less than two years aqo – finally threw in the towel and admitted that Argentina’s debt load is unsustainable, paving the way for the government to ask private bondholders to take on losses as it prepares to renegotiate its obligations.

    The last time IMF officials commented on Argentina’s debt was in the fourth review of the credit line in July 2019, when they called it “sustainable, but not with a high probability.”

    Oops. But it gets better.

    A “meaningful contribution” will be necessary from private bondholders to restore the country’s debt sustainability, the IMF wrote in a statement Wednesday following talks with Argentine officials during its first technical mission in Buenos Aires under Alberto Fernandez’s presidency.

    “The primary surplus that would be needed to reduce public debt and gross financing needs to levels consistent with manageable rollover risk and satisfactory potential growth is not  economically nor politically feasible,” the Fund said, in what may be the most embarrassing moment in the Fund’s history.

    Why embarrassing? Because as Hector Torres, a former executive director at the Fund who represented South American countries, said last summer, “The IMF has put a lot in — not just money, but prestige,” to avoid a default. “The fact that the arrangement is not performing well right now is an embarrassment,” he said. Little did he know just how embarrassing it would get.

    As discussed previously, Fernandez is seeking to renegotiate billions of dollars in debt with private creditors, including the infamous $56 billion loan with the Washington-based organization.

    Argentina’s record IMF loan has been on hold since August after Fernandez pulled off a shock upset of incumbent Mauricio Macri in a presidential primary vote, sending markets reeling.

    “IMF staff emphasized the importance of continuing a collaborative process of engagement with private creditors to maximize their participation in the debt operation,” according to the statement. Meanwhile, Argentina’s economy has collapsed, the currency has plunged, bonds prices have been in freefall and debt rose to nearly 90% of GDP at the end of 2019, the Fund said.

    But the biggest pain now await bondholders, some of whom were so dumb to actually buy 100 year bonds from Argentina. Guzman warned investors (or at least their replacement since those who made the original investment were surely summarily fired) last week they’ll probably be frustrated with negotiations, which he intends to wrap up by the end of March. South America’s second-largest nation owes over $38.7 billion to bondholders just this year, and payments peak in May. There is no way it can make those payments without magic.


    Tyler Durden

    Wed, 02/19/2020 – 22:45

  • The Cracks In US Households' Finances
    The Cracks In US Households’ Finances

    Submitted by Micro Hive; authored by Dominique Dwor-Frecaut is a macro strategist based in Southern California. She has worked on EM and DMs at hedge funds, on the sell side, the NY Fed , the IMF and the World Bank. She publishes the blog Macro Sis that discusses the drivers of macro returns.

    US credit scoring is facing a revamp. Fair Isaac (FICO) recently announced changes to consumer credit scoring that will raise the credit core of highly-rated borrowers and lower that of lower-rated consumers.  While lenders have a choice of ratings methodologies and could take time to adopt the new FICO scoring, Fed surveys show a gradual, but steady, tightening of consumer loans standards is already underway.  With household balance sheets starting to show signs of strain, this trend could have a negative and significant impact on consumption, the main, and already-slowing, engine of US growth.

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    Healthy consumer balance sheets are often cited as one of the strengths of the US economy.  Average household leverage ratios look good: relative to the crisis peak, debt is down by more than 20 percentage points of GDP and continues to slide lower (chart 1).  The debt service ratio is lower than before the crisis and default rates are back to their pre-crisis levels.  The one–well known– exception to this positive picture, is auto loans, about 9% of total household debt, where delinquencies are nearly back to their crisis peak.

    Yet, a detailed look at consumer finances shows cracks starting to appear.  While average mortgage delinquencies are still falling, credit card delinquencies have been rising since 2016 (chart 2). 

    At small banks, accounting for about 20% of consumer lending, credit card delinquencies are now well above their crisis peak.  In addition, Discover, the US largest independent credit card network,  has seen a 10% decline in its stock price caused by investor concerns over its classification of compromised loans.  The performance of Fintechs, small but fast growing, could also come under pressure.  Fintechs offer mainly unsecured personal loans,  the fastest growing segment of the consumer credit market, that are used largely to repay or consolidate other debts, especially credit card debt.   Lastly, personal bankruptcy filings increased in 2019 for the first time since 2010.  These weaknesses are puzzling in view of the decline in unemployment to a 50-year low.

    Raghuram Rajan, Chicago professor and former Governor of the Reserve Bank of India, who famously predicted the crisis, asserts that widening income inequalities were a major driver of the unsustainable leveraging of low-income US households before the crisis.  Since then, income inequalities have increased, with most of the income and wealth gains accruing to higher-income households (table 1). 

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    Indeed Federal Reserve and Census Bureau data on income and debt distribution show that a large share of American households cannot cover their basic expenses out of income (table 2).  For instance, one-third of Americans in the lowest income quintile cannot pay all their bills, even after skipping needed medical care.  This income shortfall could explain low income households high leverage.

    Of course, relative to the crisis the scale of bad consumer debt seems much more limited.  In addition, regulatory tightening since the crisis has pushed risk out of the banking sector.  Risks however are more likely to have been displaced than eliminated altogether.  It may well turn out that consumer credit risks are now concentrated in fintechs.  In any event, those are less systemically important than large deposit taking institutions.

    The cracks in household balance sheets are still likely to add to downside risks to growth.  The pre-crisis household debt overhang and subsequent deleveraging were major causes of the recession and weak recovery.   This time around, while the debt overhang is smaller, it also seems concentrated within low income households that have a higher propensity to consume.  Against this backdrop, a continued tightening of consumer credit standards could force low income households to increase their savings.  Consumption growth, that is already slowing and is the US economy main growth engine, could slow further and bring GDP growth below potential.


    Tyler Durden

    Wed, 02/19/2020 – 22:25

  • Turkey Threatens "Imminent" Large Scale Invasion Of Idlib To Halt Syrian-Russian Advance
    Turkey Threatens “Imminent” Large Scale Invasion Of Idlib To Halt Syrian-Russian Advance

    New threats related to Idlib this week could see the Russian and Turkish armies on a direct collision course. 

    Turkey’s President Recep Tayyip Erdogan on Wednesday threatened a full-scale military invasion of the war torn province after the Syrian Army and its Russian ally refused to halt their ongoing offensive. 

    “An operation in Idlib is imminent,” Erdogan told Turkish parliament of preparations for NATO’s second largest army. “We are counting down, we are making our final warnings”.

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    Turkish tank in the town of Binnish in Syria’s northwestern province of Idlib, via AFP.

    “Turkey has completed preparations for the implementation of its plan on Idlib, just like we did with previous operations. Frankly speaking, an operation in Idlib is only a matter of time,” Erdogan said.

    He further emphasized that Turkey “is determined to pay any price to ensure security in both Idlib and Turkey.” The Syrian and Turkish armies have been engaged in sporadic fierce clashes for the past two weeks in Idlib, resulting in scores dead and wounded on each side, though specific numbers are disputed. Turkey has acknowledged at least 13 of its national troops killed.

    “We will not leave Idlib to the [Syrian] regime, which does not understand our country’s determination, and to those encouraging it,” said Erdogan. Turkey has thus far sent limited deployments of troops and armored convoys into the northwest Syrian province to support and defend a dozen observation posts. 

    The Kremlin was quick to respond to such a threat of major escalation, pointing out that any Turkish offensive against Syrian forces in Idlib would be the “worst case scenario”.

    “If it will be an operation against terrorist forces in Idlib, that would certainly be within the spirit” of Russia’s agreements with Turkey, Kremlin spokesman Dmitry Peskov said before adding: “But if it is about an operation against legitimate Syrian armed forces, that would certainly be the worst case scenario.”

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    Talks between Turkish and Russian officials earlier this week related to Idlib failed to reach any agreement. This after Erdogan and Trump held a phone call wherein both leaders agreed the Syrian-Russian offensive must be halted “immediately”. 

    Mainstream media has also begun to again put Idlib coverage front and center as hundreds of thousands of civilians are said to be fleeing. Erdogan has long expressed fears that a million or more refugees could flood across the Turkish border, adding to the already some three million Turkey says it’s hosting. 

    UN figures state that at least 700,000 people have been displaced in Idlib since fighting was renewed in early December. 


    Tyler Durden

    Wed, 02/19/2020 – 22:05

  • 2 'Diamond Princess' Passengers Die Of Coronavirus
    2 ‘Diamond Princess’ Passengers Die Of Coronavirus

    As Japanese health officials begin the second day of offloading passengers and crew from the ‘Diamond Princess’ cruise ship that has been under quarantine in Yokohama for the last two weeks, the Japanese press is reporting that two passengers from the ship have died.

    The report cites unidentified government officials.

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    Even as roughly 600 passengers disembarked on Wednesday, Japanese officials announced 79 more confirmed cases aboard the ship on Wednesday, bringing the total number of infected to 621 – the largest outbreak outside mainland China.

    In the US, the CDC has questioned the wisdom of Japanese officials, and accused them of failing to properly quarantine the ship, particularly after 14 passengers found to be carrying the virus were allowed onto a US evacuation flight.

    All of the passengers leaving the ship have reportedly been tested for the COVID-19, according to the cruise line. Several hundred other passengers who aren’t taking repatriation flights to their home countries are expected to leave the ship on Thursday, and it’s unclear what will happen to them after that. Most of the passengers will be ferried back to their home countries, where they will face another two weeks of quarantine.

    Japanese health officials are expected to begin offloading more passengers shortly (since it’s already mid-morning on Thursday in Tokyo). It’s not clear how these deaths will affect the process, if at all.

    These are the first deaths since Hong Kong reported its second death and Iran reported two virus-related deaths. It brings the death toll ex-China to 9. They marked the second and thirds deaths in Japan, respectively.

    Details about the deceased haven’t been released.


    Tyler Durden

    Wed, 02/19/2020 – 21:53

  • China's "Mandate Of Heaven" Is In Jeopardy
    China’s “Mandate Of Heaven” Is In Jeopardy

    Authored by James Rickards via The Daily Reckoning,

    One event is taking center stage in the world that affects not only basic survival for millions of people, but the health of the global economy overall.

    Of course, I’m talking about the coronavirus outbreak currently playing out before our eyes in China.

    China’s economy was slowing substantially before the outbreak of the highly contagious and deadly virus last fall.

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    This slowing was the predictable result of excessive debt levels, Trump’s retaliation in the trade wars, and China’s encounter with what development economists call the “middle-income trap.”

    Developing economies can grow at double-digit rates as they move from low-income (about $3,000 annual per capita income) to middle-income (about $10,000 annual per capita income).

    The main requirements are limits on corruption, a large pool of available labor, and an attractive legal environment for foreign direct investment. Once investment is used for infrastructure and labor is mobilized, large-scale basic manufacturing can commence.

    This powers growth and the accumulation of hard currency reserves from export earnings.

    The difficulty begins when an economy tries to move from middle-income to high-income (about $18,000 annual per capita income). That move requires more than cheap labor and infrastructure investment. It requires applied technology to produce high-value added products.

    Only Taiwan, South Korea and Singapore have made this transition, (excluding Japan after World War II, and oil-exporting nations).

    This explains why China has been so focused on stealing U.S. intellectual property.

    Trump has been closing that avenue. China cannot generate the needed technology through its own R&D. China is stuck in the middle-income trap and a slowdown in growth is the inevitable result.

    The story gets worse for China.

    As of Friday, the total reported number of people infected by the coronavirus was 64,435. And the death toll was up to 1,383, including three people outside of China.

    Those figures are official statistics released by China and other countries around the world where the virus has spread.

    However, there is substantial medical, anecdotal, and model-based evidence that the actual infection rate and death rate may be ten to twenty times higher than those official statistics.

    Over 60 million Chinese in several major cities are under “lock-down” where individuals are confined to their homes and may only leave once every three days to buy groceries.

    Streets are empty, stores are closed, trains and planes are not moving, and factories are shut. The Chinese economy is slowly grinding to a halt.

    This not only affects China’s economy as a whole, but the contagion filters down into individual companies that are dependent on China both for supply chain inputs and final sales.

    And it will have a rippling effect on the U.S. economy also. This story has a long way to run.


    Tyler Durden

    Wed, 02/19/2020 – 21:45

  • Ayatollah Tweets "Wealthy Zionists" Control America Amid Push To Get Him Banned From Twitter
    Ayatollah Tweets “Wealthy Zionists” Control America Amid Push To Get Him Banned From Twitter

    Iranian Supreme Leader Ayatollah Khamenei has marked the latest national event commemorating the death of IRGC Quds Force commander Qasem Soleimani by tweeting a deeply provocative statement asserting that “wealthy Zionists” control America.

    The United States has reached the “peak of arrogance,” and is controlled by “wealthy Zionists and their corporate owners,” which makes it a “manifestation of oppression, abhorred by the world,” he said further, as reported in The Jerusalem Post. 

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    Now deceased Iran’s Quds Force commander Qassem Soleimani (left) with Iranian Supreme Leader Ali Khamenei, via Times of Israel/Wiki Commons.

    The statement comes after the Islamic Republic’s top cleric and head of the regime previously slammed Trump’s Mideast peace plan “Deal of the Century” as  “satanic” because it ultimately represents the “Jewishization” of Jerusalem and the suppression of Islamic identity. 

    “To the dismay of US politicians, the satanic, evil US policy about Palestine — the so-called Deal Of The Century— will never bear fruit, by the grace of God,” Khamenei wrote on his official Twitter account in late January. 

    Such inflammatory and religiously charged rhetoric will likely only fuel an ongoing initiative of hawkish Republican Senators to get Khamenei and other top Iranian leaders banned from Twitter and other US social media platforms. 

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    Earlier this month the group of Republicans including Ted Cruz (Tx.), Tom Cotton (Ark.) Marsha Blackburn (Tenn.) and Marco Rubio (Fla.) wrote in the letter to Twitter: “While the First Amendment protects the free speech rights of Americans — and Twitter should not be censoring the political speech of Americans — the Ayatollah enjoys zero protection from the United States Bill of Rights.”

    “And, as the leader of the world’s leading state sponsor of terrorism — directly responsible for the murder of hundreds of U.S. citizens — the Ayatollah and any American companies providing him assistance are entirely subject to U.S. sanctions laws,” they added.

    Twitter has long defended its position of never banning heads of state from the platform, given the need to publicly articulate a country’s positions. 

    Israeli media has carefully documented Khamenei’s recent history of lashing out at “Zionists and Jews” on Twitter; however, as The Jerusalem Post notes, he’s long underscored a distinction between political Zionism and adherents of the Jewish religion: 

    Last year, the ayatollah said Iran is not antisemitic and that Jews live safely in Iran. In June 2019, he contrasted Iran’s treatment of Jews with “certain old Arab leaders who believed Jews should be thrown into the sea.”He says Iran is only opposed to the “Zionist” regime.

    Regardless, American politicians and pundits typically view any and all disparaging remarks about ‘Zionists’ – especially coming out of Iran or the Islamic world in general – as an anti-Semitic trope. 


    Tyler Durden

    Wed, 02/19/2020 – 21:25

  • Russia Is Defeating The U.S. In The Middle East Oil Game
    Russia Is Defeating The U.S. In The Middle East Oil Game

    Authored by Simon Watkins via OilPrice.com,

    Historically, Russia goes to great lengths to hide or disguise its strategic intentions but it clearly feels empowered enough in the Middle East to very obviously stake its claim in the region – excluding, for the time being only, Saudi Arabia – by stating that a slew of Russian companies are to spend up to US$20 billion on oil projects in Iraq in the near term.

    “Since [U.S. President Donald] Trump outlined the new U.S. foreign policy of not engaging in conflicts abroad unless they were directly aligned with U.S. interests [October 2019], and then effectively withdrawing from Syria and from supporting the Kurds, Russia and China have felt that they can bring forward their plans to bring Iraq within their geopolitical arc of influence,” a senior source who works closely with Iraq’s Oil Ministry told OilPrice.com last week.

    “They know that provided that they do not impinge on Saudi Arabia and, at a pinch the UAE and Kuwait, or launch attacks against U.S. personnel, then they can basically do whatever they want anywhere else, hence this announcement from Russia last week,” he added.

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    Before this announcement – which specifically mentioned Zarubezhneft, Tatneft, and Rosneftegaz as companies interested in pursuing specific but as yet unnamed projects, in addition to those Russia companies already active in the country (including Lukoil, Bashneft, and GazpromNeft) – Russia had adopted its usual stealth approach to building up its presence in Iraq.

    “It is incremental colonialism, beginning one day with one relatively small contract being taken up by some Russian company nobody has heard of, then more Russian companies turn up in the same place under ‘contractor’ terms having been engaged by the company you gave the original contact to, then security companies turn up to guard all of the personnel, and suddenly you have a major Russian occupation of part of your key oil and gas infrastructure,” the Iraq source underlined.

    The oil and gas prize for the Russians in Iraq is, of course, huge, but many in the industry do not realise that it is still underestimated. The official figures for oil are that Iraq has around 149 billion barrels of reserves (18 per cent of the Middle East total and 9 per cent of the global total) and is currently the second-largest oil supplier in OPEC, after Saudi Arabia. All of this oil coming at a mean average ‘lifting cost’ per barrel in Iraq of US$2 to US$3 per barrel, according to the IEA, at least as competitive as Saudi Arabia. For gas, the official figures are slightly less impressive, but they are likely even more underestimated than the oil figures, with Iraq having about 135 trillion cubic feet of reserves (the 12th largest in the world), mostly associated at the moment with oil fields in the supergiant fields in the south of the country. However, despite the occasional increase in reserves estimates over the past few years – extremely modest by the standards of its neighbours, incidentally – much of Iraq still remains unexplored or under-explored compared with other major oil-producing countries.

    According to the International Energy Agency (IEA), and derived from the landmark United States Geological Survey (USGS) 2000 assessment and subsequent updates, the level of ultimately recoverable resources at that time was around 232 billion barrels of crude and natural gas liquids. Even this, though, might prove on the low side, added the IEA, as a detailed study by Petrolog around that time reached a similar figure but did not include the parts of northern Iraq in the KRG area or examination of the geological anomalies prevalent in the central and western regions of the country. Even using the much more conservative USGS number, Iraq had just a decade ago only produced around 15 per cent of its ultimately recoverable resources, compared with 23 per cent for the Middle East as a whole at that time. At that point, of the 530 potential hydrocarbon-bearing geological prospects identified by – only – geophysical means in Iraq only 113 had been drilled, with oil being found in 73 of them, a success rate of 65 per cent. Although more of these geophysically-identified sites have now been drilled many more new ones have arisen due to identification by more sophisticated analysis of seismic and historical data.

    “The Russians have done their own testing of potential oil and gas reserves over the years and they think it is about double the current official estimates on both of those [oil and gas],” the Iraq source told OilPrice.com last week.

    This is one of two key reasons why Russia has exploited every opportunity to expand its footprint in the north and south of Iraq. In the north it has been extremely successful so far in using its corporate proxy, Rosneft, to gain control over key elements of the region’s oil and gas infrastructure while in the south it had been forced by the U.S.’s own former ambitions to tread more stealthily. Although it has always been able to rely on being able to use Iran’s political and military over Iraq for its own purposes, these had to be sidelined for a while, at least whilst the real power in Iraq – Moqtada al-Sadr – was getting settled in to his power-broking role. As this was initially founded on the ultra-nationalist message (‘Iraq for the Iraqis, with no undue foreign influence’, in essence) of his election-winning ‘Sairoon’ power bloc, Moscow was able to tinker only the edges.

    In such strategies, though, Russia is a master, and the influence it can ultimately wield starting from such a tiny access point is absolutely extraordinary. The most recent example of this – and a template for such strategies for any aspiring superpower, frankly – was the ‘awarding’ of a hitherto unknown development block in the middle of a wasteland by a hitherto unknown Russian company at a time when no one else was aware that anything was due to be awarded. As highlighted in-depth by OilPrice.com at the time, Russia’s Stroytransgaz (an almost unknown Russian oil and gas company – except by the U.S. whose Office of Foreign Assets Control extensively sanctioned it in 2014) signed a preliminary contract with the oil ministry in Baghdad for oil and gas exploration in Anbar province (a wasteland as far as Iraq’s oil and gas sector development goes). On the face of it, there was – and is – no real prospect of any substantial amounts of oil or gas being recovered from its Block 17 and additionally stationing any normal oil and gas workers there would be perilous to say the least, as it is an area torn by warring tribal communities, which even Islamic State avoided where possible.

    The key to this, though – and vital in understanding the purpose behind the announcement of a doubling (possibly tripling) of Russian overt investment into Iraq – is that the area is critical in Russia fortifying its presence in the central Middle East and being able to secure a warm water multi-layered military presence in the Mediterranean.

    “Russia risked full-on military confrontation with the U.S. to get a full-scale Black Sea port [Sevastopol] with access into the Mediterranean when it annexed Crimea in 2014, so there’s nothing it won’t do to build out its foothold in Syria and in the transit and supply route to Syria, which includes Iraq,” said the Iraq source.

    In this context, then, Block 17 in Anbar – and the US$20 billion investment announced last week – makes perfect sense for the Russians, as it intends to secure what the U.S. military used to call ‘the spine’ of Islamic State where the Euphrates flows westwards into Syria and eastwards into the Persian Gulf. Along the spine running from east to west are the historical ultra-nationalist and ultra-anti-West cities of Falluja, Ramadi, Hit and Haditha, and then there is Syria, with its key strategic ports of Banias and Tartus. By happy ‘coincidence’ both Banias and Tartus are also extremely close to the massive Russian Khmeimim Air Base and the S-400 Triumf missile system. Although the base only came in to operation in 2015 supposedly to help in the fight against Islamic State, Russia appears to have changed its tactical plans for it, having also signed a 49 year lease on it, with the option for another 25 year extension. A short flight away is Russia’s Latakia intelligence-gathering listening station.


    Tyler Durden

    Wed, 02/19/2020 – 21:05

  • Watch Live: Bernie Battles "Billionaire" Bloomberg In Critical Las Vegas Debate
    Watch Live: Bernie Battles “Billionaire” Bloomberg In Critical Las Vegas Debate

    Americans will get a glimpse of the great ‘revolutionary class war’ over the soul of the Democratic Party Wednesday night as Democratic Primary frontrunner Bernie Sanders, a self-proclaimed “Democratic Socialist” who once proposed that no American be allowed to earn more than $1 million per year, faces off against latecomer Mike Bloomberg.

    Bloomberg has shot up in the polls in recent weeks after leveraging his $62.8 billion fortune to build a massive campaign operation and finance a deluge of ad buys. The former NYC mayors participation in tonight’s debate is controversial: He only qualified yesterday, and his name isn’t even on the ballot in Nevada.

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    After skipping the first four contests, Bloomberg won’t officially enter the running until March 3 – better known as “Super Tuesday” – where it looks like he has a strong shot at winning several delegate-heavy states.

    Bloomberg campaign manager Kevin Sheekey said in a statement Tuesday that the candidate is “looking forward to joining the other Democratic candidates on stage and making the case for why he’s the best candidate to defeat Donald Trump and unite the country. The opportunity to discuss his workable and achievable plans for the challenges facing this country is an important part of the campaign process.”

    Polls aren’t the only arena where Bloomberg has recently clocked a major advance: Ahead of the debate, online betting markets also placed Bloomberg in second to Sanders via the odds.

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    But, as Bernie has soared into the bookies’ odds lead, so the odds of a Trump win has surged…

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    Courtesy of PredictIt

    If Bloomberg performs well tonight, parrying Sanders’ ad hominem attacks and slanders about billionaires, perhaps he’ll win over the rest of the doubters from his fellow moderates, and solidify his position as one true alternative to Sanders, especially as the Biden campaign implodes, Warren drops behind Klobuchar (with neither garnering much support) and Pete Buttigieg still can’t seem to convince much of the public that he’d be a trustworthy keeper of the nuclear codes.

    Here is what The Hill sees as the five key things to watch for tonight…

    How will Bloomberg combat attacks? 

    Bloomberg will walk onto Wednesday night’s debate stage with a target on his back as a result of his ascendance in the polls.  The forum will give voters a new view of Bloomberg, who has not yet been on a debate stage this cycle and has given only a few sit-down interviews since announcing his candidacy. The self-funded candidate is set to make the stage in Nevada after the Democratic National Committee dropped a previous donor threshold.  The biggest attacks Bloomberg has received from the Democratic field this cycle have been from Sanders. The senator has repeatedly accused Bloomberg of looking to buy his way into the Democratic nomination after spending hundreds of millions of dollars on ads.  The war of words escalated further on Monday when Bloomberg accused Sanders of not doing enough to call out the behavior and rhetoric of a segment of his supporters.  Biden and Klobuchar have both also signaled their eagerness to hit Bloomberg on the debate stage, including over comments the former New York City mayor made about stop-and-frisk policing and housing policy for low-income buyers. “I am also an advocate for him coming on the debate stage. I know that I’m not going to be able to beat him on the airwaves, but I can beat him on the debate stage,” Klobuchar said. 

    How will Sanders fend off attacks on ‘Medicare for All’? 

    Sanders’s Medicare for All proposal, a hallmark of his campaign, came under fire in Nevada last week after the state’s powerful Culinary Union warned that the plan would “end culinary health care” by replacing private plans with government-run insurance. Klobuchar, Buttigieg and Biden have all questioned how Sanders would pay for his Medicare for All plan. Warren faced similar questions earlier in the race.  The recent developments regarding the Culinary Union, which ended up not endorsing a candidate, have put a newfound scrutiny on Sanders’s proposed plan.  “It is striking that there’s been no explanation of how this is supposed to work when it could be one of the biggest things done to the American economy in a generation,” Buttigieg said, referring to Sanders’s plan, in January.  Sanders has argued that health care costs will be more expensive over the next decade without a Medicare for All system. Sanders also came under pressure after the Culinary Union denounced the candidate’s supporters for “viciously” attacking union members online. Sanders urged supporters of all campaigns to stop online attacks, saying “harassment of all forms is unacceptable to me.”

    Can Biden and Warren have their debate moment? 

    Biden and Warren were both seen as front-runners earlier in the race but have both seen a decline in support in the polls after less-than-stellar performances in Iowa and New Hampshire.  Critics say Biden’s debate performances have been weak, which could be an impediment to him on Wednesday as he looks to revamp his campaign. Biden is banking on the support of Latinos and African Americans in Nevada and could use Wednesday’s debate stage as an opportunity to tout his ties with those communities across the country.  Warren, who has had a number of strong debate performances, will also be looking for a breakout moment as she looks to hit the reset button on her campaign. The senator will likely be looking to reclaim her spot as the race’s top progressive from Sanders, while also looking for opportunities to hit Bloomberg.  Klobuchar showed this month that strong debate performances matter after a good showing by the Minnesota senator ahead of the New Hampshire primary was widely seen as having contributed to her better-than-expected third-place finish in the Granite State.

    How will Buttigieg, Klobuchar pitch to a more diverse electorate? 

    Buttigieg and Klobuchar have emerged from contests in Iowa and New Hampshire with momentum, but they will be addressing a vastly different audience in Nevada.  The two Midwesterners have struggled throughout the campaign to appeal to voters of color, which threatens to hurt them in Nevada. The two have also not spent as much time in Nevada compared to Iowa and New Hampshire, so Wednesday could be critical in terms of making their case to voters.  Buttigieg and Klobuchar will likely have to answer questions about their past careers as a mayor and prosecutor, respectively, and how they affected minority communities in their roles.  Buttigieg has come under scrutiny for his handling of the aftermath of a police-involved shooting of a black man, as well as questions about the disproportionate arrests of black people for marijuana possession during his mayoral tenure and the firing of a black police chief. Klobuchar has come under fire for prosecuting a black teenager who was found guilty of murder in 2002 despite a number of flaws in the case uncovered by an Associated Press story. The senator has called for all evidence in the case to be reviewed.

    Which candidates besides Bloomberg are most likely to clash or take fire? 

    Aside from Bloomberg, there are a number of other candidate clashes that could take place on Wednesday night. Buttigieg and Sanders have gone head-to-head over their differences in policies, often showcasing the division between moderates and progressives within the party. Biden also attacked Buttigieg over his experience as the former mayor narrowly won more delegates in the Iowa caucuses, effectively replacing Biden as the standard-bearer for the moderate wing of the party. Klobuchar could see dividends in attacking Sanders, billing herself as the more pragmatic candidate. However, she could also look to go after the moderates on stage in an effort to break further out of the crowded centrist lane. Warren, whose attacks on Sanders have fallen flat in the past, could also set her sights on the moderates in the race in an effort to contrast her more progressive ideas. 

    Reportedly, according to campaign officials, Bloomberg will not be standing on a box for the duration of the debate.

    Watch the debate live below. It begins at 9 pm ET:


    Tyler Durden

    Wed, 02/19/2020 – 20:45

  • 'You Are Here' – The Stages Of Collapse Exposed
    ‘You Are Here’ – The Stages Of Collapse Exposed

    Authored by Tumoas Malinen via GnS Economics,

    Could the coronavirus act as a catalyst for a new global economic crisis? It certainly has that potential – but how would the crisis proceed?

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    In the December 2018 issue of our Q-Review, we laid out the likely scenarios of an approaching global economic collapse. But, like most things in life, such a dramatic event is unlikely to proceed in a linear fashion. There will be different stages within it.

    In December 2019 we outlined these stages, which are likely five: the onset, counter-attack, flood, calamity and recovery. Here, we briefly define the characteristics of each.

    The onset

    Currently, there seems to be two possible ignition points for the collapse: the credit market and the European banking sector.

    At the onset, stresses that have been building in the credit markets since the summer of 2019 will explode, shrinking if not eliminating entirely the exits from many parts of that market. Downgrades of corporate debt in the U.S. and peripheral sovereign debt in the Eurozone will push large fixed-income investors, including pension funds, into higher-rated bonds, leading to large-scale selling of lower-rated bonds, forcing wider spreads and even more selling.

    Panic will build first in the junk bond market, then in the “investment-grade” corporate bond market, and then rapidly metastasize to engulf the stock market. A frantic retreat to ‘safe-haven’ assets, including U.S. Treasuries, German Bunds and U.K. Gilts as well as cash and precious metals will commence.

    Cascading banking troubles in Europe will have the same destabilizing effects on the global stock and bond markets.

    The counterattack

    The second phase of the collapse will be the desperate efforts of authorities to stop the crisis by a counterattack.

    These are likely to include the restarting and acceleration of QE-programs and other market support programs, gigantic fiscal stimulus, increasing trade protectionism and possibly even calls for direct debt monetization (see Q-Review 3/2019 for an explanation).

    However, the plummeting yields on safe-haven bonds will make reflexive central bank QE-programs utterly ineffective, while any central bank stock purchase programs will provide little relief from the panic gripping investors. Central banks will also be unable to ameliorate a massive reduction in market liquidity.

    Most of the governments of the Eurozone are too indebted to engage in any meaningful stimulus, especially when confronted with cascading bank problems and eventual failures. China will desperately try to enact even more fiscal stimulus, but due to the collapse of global economic demand and the probable implosion of the housing and financial system bubbles in China, such attempts will be wholly inadequate.  The Chinese economy will slam to earth in a hard landing.

    The flood

    The crack-up in the credit and stock markets will be followed by a flood of corporate bankruptcies.

    So-called “zombie” corporations, faced with collapsing economic demand and exploding interest rates—due to the banking crisis and crashing credit markets—will fail on a scale unseen in decades. The value of the holdings of pension funds, charitable endowments, trust funds, insurance company variable accounts, and stock and bond mutual funds will crash in short order.  Even lowly money-market funds may be at risk, just as they were in the Financial Crisis.

    If the European banking sector has not ‘cracked’ by this point, this tsunami of corporate bankruptcies will wash it over the edge. As Europe holds the largest concentration of Global Systemically Important Banks, or G-SIBs, the European banking crisis will “go global” in an instant.

    Massive global deflation will follow, led by an ugly chain of bank and corporate failures. Global liquidity will collapse. An utter economic crash will follow.

    The calamity

    Due to both crashing capital markets and banking sector bankruptcies, joblessness and poverty are likely to explode.  Simultaneously, government tax revenues will collapse as incomes retreat and capital gains evaporate.  As governments spending skyrockets in an orgy of Keynesian counter-cyclicality, national deficits will hit all-time highs on both an absolute and relative basis.

    Governments will try to save critically-important banks, which will require large-scale funding many countries—such as those in the Eurozone—cannot afford and will not be able to finance in paralyzed  capital markets. This economic reality makes depositor bail-ins the only, if politically-unpalatable option.

    Confronted by new and harsh fiscal realities, pensions and other social security programs are likely to face serious cutbacks by desperate governments. An economic calamity sets in.

    The recovery

    We expect the global depression to last 4-5 years. The initial collapse is likely to be over within three years.

    The path to recovery will depend crucially on how far the ‘cleansing’ of the economy, markets and financial sector is allowed to go. If the banking sector implodes completely, the economic deficit will naturally be made much deeper leading to a systemic crisis.

    However, if the essential functions of the banking sector are sustained, especially in Europe, we would avoid the deepest malaise. Moreover, if unsound banks and “zombie” corporations are allowed to go-under or are wound-down methodically, it will clear much of the malinvestment from the economy, creating the foundation for a strong and sustained recovery.

    So, if we manage to return to the principles of the market economy including, most crucially, a return to undistorted price discovery in the capital markets, we are likely to see one of the most powerful recoveries in global economic history. It would be led by robotization and general technological innovation, which hard economic times tend to foster.

    However, debt monetization, Modern Monetary Theory (“MMT”) and other money-conjuring schemes would corrupt the economy further making a sustained recovery impossible (see more from Q-Review 4/2019).

    Moreover, with the governments and the central banks assuming a much bigger role in the economy and society in this darker scenario, some form of fascism (which is, by definition, the merger of state and corporate power) would be the likely end-result of these developments.

    We can do nothing more than hope that wise, courageous and far-sighted political leadership will spare us from that horrible fate.

    When?

    After the Fed launched its desperate repo-market bailout operations in September and October of last year, stresses in the credit markets eased-up and stock markets rallied. Following the coronavirus outbreak, junk bond yield-spreads shot-up, but they were quickly tamed by the massive support operations launched, once again, by major central banks (see Figure 1).

    It’s truly interesting to see, how long the artificial liquidity can keep the stock markets up, when the economy slows.

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    Figure 1. The daily closing value of the S&P 500 index and the option-adjusted spread of the ICE BofAML US corporate C index over the spot Treasury curve. Source: GnS economicss, Fed St. Louis, Yahoo Finance

    Now, everything depends on China, and the impact of the coronavirus. How bad will the situation get? Do we anticipate a global pandemic, which at this point appears increasingly likely? Can China restore production quickly, which currently looks unlike?

    The virus is so hazardous for the Chinese economy, because the virus itself and the draconian measures adopted to contain it disrupt production and the incomes of millions of highly-indebted firms and households. The longer that this broad economic stress continues, the higher the likelihood of corporate defaults and bankruptcies.

    China’s banking system is extremely levered (see Figure 2).  As we explained in Q-Review 4/2019, China’s banking system will be unable to cope with any longer slowing down of growth, not to speak of a recession.

    Large-scale defaults and bankruptcies caused by the reasons just discussed would hit the Chinese banking sector especially hard. The virus can in this way easily act as a catalyst for a deep and severe banking crisis in China. It would guarantee a global recession.

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    Figure 2. Asset of the shadow banking sector and the credit issued to the non-financial sector in China. Source: GnS Economics, PBoC, BIS, Fed St. Louis

    Most importantly, if the coronavirus pushes the Eurozone into a recession within the next few months, which seems very likely, our weak banking sector is unlikely to be able to cope with that (see Q-Review 4/2019 for a detailed explanation). And, that would imply the beginning of a global banking crisis, as explained above.

    This is to say that by summer, we may be at the onset.


    Tyler Durden

    Wed, 02/19/2020 – 20:25

  • Terrifying Charts Show China's Economy Remains Completely Paralyzed
    Terrifying Charts Show China’s Economy Remains Completely Paralyzed

    In our ongoing attempts to glean some objective insight into what is actually happening “on the ground” in the notoriously opaque China, whose economy has been hammered by the Coronavirus epidemic, last week we showed several “alternative” economic indicators such as real-time measurements of air pollution (a proxy for industrial output), daily coal consumption (a proxy for electricity usage and manufacturing) and traffic congestion levels (a proxy for commerce and mobility), before concluding that China’s economy appears to have ground to a halt. These observations were subsequently reaffirmed when we showed that steel demand, property sales, and passenger traffic had all failed to rebound from the “dead zone” hit during China’s Lunar New Year hibernation.

    Meanwhile, as every investor scrambles for clues to find the upward inflection point in China’s economic output which would at least partially validated the unbridled euphoria in the stock – and, ironically, the bond market – we have some unpleasant news: more than one week after our initial report on “alternative” high-frequency (read daily) indicators in China’s economy, any tangible improvement in China’s economy has yet to be observed.

    We start with some base commodity market observations courtesy of Goldman Sachs, which when looking at preliminary weekly demand data, finds that:

    • Finished product production -7.4% w/w
    • Mill stocks +18% w/w
    • Trader stocks -19% w/w

    According to Goldman’s Adam Gillard, the above implies full country apparent demand is down a massive -66% y/y.

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    Picking up where Goldman (and we) left off, UBS writes that while there are official announcements for each province or cities to end the extended Chinese New Year (CNY) holidays, “the actual work resumption faces many constraints and is hard to track.” And so, piggybacking on what Capital Economics did previously, UBS constructed a China Daily Activity Tracker to assess real time development, which covers many of the same indicators we have already noted previously including:

    1. daily average transport congestion index for 100 cities,
    2. daily coal consumption of 6 large independent power plants (IPPs);
    3. daily property sales in 30 major cities;
    4. daily passenger volume; and
    5. weekly steel furnace operating rates.

    Alas, as we have noted previously and as Goldman shows above, UBS’ indicators show that “China’s activities remain very subdued vs the same time after previous CNYs.”

    Here are some of the Swiss bank’s key observations:

    Coal consumption and property sales: Daily coal consumption of 6 large IPPs has been only 60% of average level of that in the same period in 2017-2019 (Fig 3). The daily property sales volume of 30 major cities is currently only around 10% of 2017-2019 average, but already up from a week earlier (Fig 4).

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    Transport congestion index: The index is measured as actual transport time relative to the theoretical time at free-flow speeds. 100-city average transport congestion index is below 1.2 of late, much lower than around 1.6 for the same period of 2017-2019.

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    UBS also constructs a Heat Map by province in Fig 5 to show each province’s index change compared with their previous low on Jan 25-26 (CNY day). As one would expect, there has been virtually no rebound for the vast majority of cities.

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    Passenger volume: Latest daily passenger volume is only 19% of that in the same period during CNY travel season in 2019 (Fig 12). Overall, total numbers of passengers carried has been around 18%, or 82% below, the 2019 level!

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    Accumulated passenger volume since the CNY day is 308mn person*time, 18% of 1.7bn person*time one year ago. While the drop is partly due to cancelled trips, a big part is likely due to delayed returns of workers, who will eventually come back over the coming weeks, assuming of course China manages to contain the coronavirus and the population believes the communist government.

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    We then move to a similar daily-activity tracker, this time from Goldman which confirmed the terrifying paralysis China’s economy finds itself in:

    Daily coal consumption of major electricity producers was still 33% weaker in the first 18 days of February this year than normal seasonality would suggest. Needless to say, one can’t claim there is even a remote possibility of a return to normal if electricity output (and demand) is running almost half compared to where it was this time last year.

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    The real estate market remains frozen. As Goldman notes, daily property sales volume in 30 major cities over the past week has climbed up to 13% of the average level in the previous 5 years. It was better than the 0% it was for much of the previous week.

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    Last but not least, while hardly coming as a surprise, movie box office revenues have been unchanged for the past three weeks, and remain frozen… at zero!

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    And, as we noted previously, one can argue that the most ominous chart is not what is frozen in China right now – which is almost everything – but what is soaring. Thanks to Capital Economics we know what that is: food prices.

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    As we warned previously, a paralyzed economy, with 750 million people in some form of lock down, where the people are becoming increasingly angry at Beijing’s now openly over propaganda, where countless workers will soon be fired as companies run out of funds, and even more companies will soon be bankrupt due to lack of ongoing operations, and where the price of food is surging makes for the most volatile combination possible, one which if not arrested soon could lead to a very violent climax.

    * * *

    Putting it all together, one may ask why are global stocks not only not falling but are in fact soaring to record highs? The answer, as Goldman accurately puts it, is that “rightly or wrong, it just doesn’t matter because investors continue to price policy support.“

    Market sentiment is still on. Most clients have priced in that more loosening in liquidity and property will come. Tomorrow the Feb LPR data will be out and consensus is 10bps cut as MLF rate cut. Treasury futures may see some correction unless the rate cuts is greater in magnitude. But my survey shows that the short term sentiment will not be hurt. From retail wise, we have seen craze from retail subscription of mutual funds recently and Foresight, an all-star PFM, has raised Rmb12bn within 8hours which made the new record high in history.

    In short, don’t worry about a thing, the Fed’s got this.

    Once upon a time we used to joke that if the world is facing an apocalyptic situation, stocks may hit “limit up” because all traders would ask is when the Fed will start buying stocks, as Janet Yellen said last week the central bank will probably do in the next crisis. Unfortunately, it is no longer a joke.


    Tyler Durden

    Wed, 02/19/2020 – 20:15

  • Israel To Step Up "Offensive Action" – Will Turn Syria Into "Iranian Vietnam": Israeli Defense Chief
    Israel To Step Up “Offensive Action” – Will Turn Syria Into “Iranian Vietnam”: Israeli Defense Chief

    After over two years of sporadic Israeli air and missile attacks inside Syria, which Syria’s military has been more aggressive in responding to of late, Israel has issued a rare statement revealing its medium to long-term strategy, saying it will soon step up “offensive action” in the country to ensure Iranian fighters depart. 

    Speaking to Ynet News on Wednesday the new Israeli Defense Minister, Naftali Bennett said, “We will go from preventive action to offensive action — the only measure that guarantees us the expulsion of Iran out of Syria.”

    “We are warning them (the Iranians), we will turn Syria into an Iranian Vietnam, and you will continue to bleed until the last Iranian soldier leaves Syrian territory,” the nation’s defense chief threatened. 

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    Prime Minister Benjamin Netanyahu and Defense Minister Naftali Bennett visit Golan Heights base overlooking Syria last year. Image source: GPO/Haaretz

    Israel’s latest attack on Damascus occurred last Thursday, which resulted in heavy damage at the Syrian capital’s international airport, which media reports claim was used for Iranian weapons storage. Satellite imagery analysis source ImageSat said one of the more severely damaged buildings was “probably used for storing ammunition or [surface-to-air missiles].” 

    Syrian opposition media claimed that four members of Iran’s elite Islamic Revolutionary Guard Corps (IRGC) and three Syrian soldiers were killed in the airstrikes. Israel has throughout the war often conducted attacks from over Lebanese airspace, targeting what it claims are Iranian assets inside Syria. Israel almost never provides confirmation it was behind these attacks, with Netanyahu quipping to reporters when asked about it: “I don’t know what happened at night. Maybe it was the Belgian air force.”

    With the final battle for Idlib province now underway in the northwest, Assad has clearly emerged victorious in the war, making Tel Aviv increasingly anxious about Iran’s continued entrenched presence in support of its ally. 

    In separate prior comments delivered on Tuesday, Defense Minister Bennett said Iran is changing its thinking inside Syria. “I can tell you that we are seeing the initial indications of Iran weakening and considering a new tack in Syria,” he told a military technology conference in Tel Aviv. 

    “[The Iranians] are sending forces in order to establish a presence there to exhaust us, but we are turning this disadvantage into an advantage. We have intelligence and operational superiority, and we are telling the Iranians clearly: Get out of Syria. There’s nothing for you here.”

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    “We are moving from a defensive position to an offensive position — to weaken, to exhaust, to tire and wear out the head of the octopus in order to weaken its arms,” Bennett said, using an analogy he employs frequently.

    He also said recent anti-government demonstrations in Iran were a sign that the Iranian people were growing tired of the Ayatollah’s “foreign adventurism” in places like Syria, and that they are telling their leaders “Stop wasting money and our blood on adventures”.


    Tyler Durden

    Wed, 02/19/2020 – 20:05

  • "Greater Idaho": Conservatives In Oregon Want 22 Rural Counties To Secede And Become Part Of Idaho
    “Greater Idaho”: Conservatives In Oregon Want 22 Rural Counties To Secede And Become Part Of Idaho

    Authored by Michael Snyder via The Economic Collapse blog,

    Is the state of Idaho going to get a whole lot bigger?  A group known as Greater Idaho is pushing for rural counties in Oregon and northern California to secede and become part of the state of Idaho.  In fact, as you will see below, this effort has actually been endorsed by some of the top Republicans in the Oregon legislature.  Today, the Oregon state government is completely and utterly dominated by the left, and due to the demographics of the state that is not likely to change any time soon.  So conservatives in rural areas that are deeply upset over the direction of the state essentially have just two options.  They can either move to a more conservative state, or they can attempt to redraw state lines.

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    Of course attempting to redraw state lines is a very complicated process, but at this point conservatives in Oregon are so fed up with the state legislature that they have decided to push ahead with this effort.

    In fact, it is being reported that signatures are being collected right now in order to “put the proposal on ballots in November”…

    Frustrated by liberal policies, some Oregon residents petitioned to leave the state – by moving the border with Idaho westward.

    The movement secured initial approval from two counties and aims to get enough signatures to put the proposal on ballots in November, according to the group called Greater Idaho.

    This is a very viable political movement, and it will be quite interesting to see where this goes.

    For years, rural counties in Oregon have felt shortchanged by a state legislature that is dominated by the Portland area, and things have finally come to a breaking point.  One of the chief organizers of this movement, Mike McCarter, says that this secession push “is our last resort”…

    “Rural counties have become increasingly outraged by laws coming out of the Oregon Legislature that threaten our livelihoods, our industries, our wallet, our gun rights, and our values,” Mike McCarter, one of the chief petitioners, said in a news release. “We tried voting those legislators out, but rural Oregon is outnumbered and our voices are now ignored. This is our last resort.”

    Initial efforts are focused on just a few counties, but eventually the goal of Greater Idaho is to get dozens of counties in Oregon and northern California to secede.

    The following comes from Greater Idaho’s official website…

    We are trying to change the present borders of Idaho, Oregon & Northern California so that certain counties & communities presently in Oregon & Northern California will become part of the State of Idaho.

    Out of Oregon’s existing 36 counties, only 14 would remain in the state if Greater Idaho is able to achieve their goals, and a big chunk of northern California would become Idaho territory as well.

    But getting this accomplished will not be easy.  Approval would be needed from the state legislatures of Oregon, California and Idaho, and that would be a real challenge.

    On top of that, the U.S. Congress would have to approve any plan, and getting that to happen would probably require a miracle.

    But one thing that this movement has going for it is the fact that it has been endorsed by some big name state lawmakers in Oregon, and that includes the top Republican in the state Senate…

    The Republican leader in the state Senate, Sen. Herman Baertschiger, supports the idea and told CNN he’d even help write the secession legislation.

    “Democrats should be paying attention to how unhappy these Oregonians are with the current regime to seek secession from Oregon. I would welcome the idea to serve on the Greater Idaho legislature!” he said.

    And Representative Gary Leif actually has a map of “Greater Idaho” hanging in his office…

    Rep. Gary Leif, a Republican in the Oregon House of Representatives, has a poster of the “Greater Idaho” map hanging in his office.

    “The Greater Idaho would then be the only West Coast state that is a conservative red coastal state. We would then truly be representing conservative values with rural constituents,” Leif explained.

    It is certainly encouraging to see people take a really big idea and try to run with it.

    But of course the liberals in Oregon are not exactly thrilled with the idea that most of their state could be ripped away from them and given to someone else.  And as long as they are in firm control of the state legislature, it is going to be exceedingly difficult for this plan to get too far.

    A similar scenario is playing out in Virginia.  The Democrats have taken control of the state government, and the state continues to drift left with each passing year.

    Obviously many of those living in rural Virginia counties do not like this one bit, and the recent attacks on Second Amendment rights brought things to a boiling point.

    There has been a lot of talk that rural countries in Virginia could try to secede and join West Virginia, and West Virginia’s governor Jim Justice has publicly said that he would welcome those counties “with open arms”…

    In an unlikely bid, West Virginia Gov. Jim Justice says he would welcome neighboring Virginia counties to join his state amid Democrats’ control of Virginia’s government.

    “If you’re not truly happy where you are, we stand with open arms to take you from Virginia or anywhere where you may be,” said Justice, a Republican. “We stand strongly behind the Second Amendment, and we stand strongly for the unborn.”

    But once again, this effort in Virginia is facing the same sorts of obstacles that the Greater Idaho movement is facing.

    Of course anything that is worth doing in life is going to require effort.  And those that are trying to secure a better future for themselves, their families and their communities should be greatly applauded for doing so.

    Ultimately, this is yet another sign of how incredibly divided we have become as a nation.  In recent years we have seen multitudes of conservatives move to “red states” and multitudes of liberals move to “blue states”, and that trend is likely to accelerate in the years ahead.

    It has gotten to the point where many of us literally do not even want to live in an area that is controlled by the other side, and the 2020 election is going to deepen our existing political divisions no matter who ends up winning.


    Tyler Durden

    Wed, 02/19/2020 – 19:45

  • "They Completely Dropped The Ball": Critics Bash Japan's Government
    “They Completely Dropped The Ball”: Critics Bash Japan’s Government

    Japan has become the country that’s perhaps most at risk of a major outbreak of COVID-19. It’s also the country with arguably the most to lose, in terms of its reputation, if it’s forced to call off the Summer Olympics in Tokyo.

    As we’ve noted several times over the past few days, from allowing the US to break its quarantine of the ‘Diamond Princess’ to releasing thousands of passengers and crew as new cases are still being identified, Japan’s public health officials seem to have repeatedly dropped the ball in suppressing an outbreak that isn’t very forgiving of mistakes.

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    In  an uncharacteristically brusque statement, the CDC, which is coordinating the US response to the virus, claimed that Japan had “failed” with the ‘Diamond Princess’ quarantine. And on Wednesday, Bloomberg reported that experts around the world feel the same way.

    Even though most countries have promised to quarantine passengers and crew from the DP once they return home, Japan is simply letting thousands of potentially infected individuals out into the streets of Tokyo. The UK has advised Britons on board the ship to remain aboard until Friday, when it can organize an evacuation flight.

    Given Japan’s elderly population, an outbreak of COVID-19 could be particularly deadly. Researchers have said that patients over the age of 80, and those with co-occurring health issues are at the highest risk of death upon infection.

    For what it’s worth, Japan has taken some positive steps, as Japanese companies have ordered thousands to work from home, a policy the government has supported.

    But while some events have been cancelled and some companies have told workers not to come into the office, the rush-hour trains in Tokyo are still packed with workers, and there has been little government discussion of a wider lockdown.

    A top economist at Nomura, a Japanese bank, said PM Shinzo Abe’s government embarrassed itself by waiting for the WHO to declare a global pandemic before taking the outbreak seriously.

    “The Japanese government’s decision to wait for the China-friendly WHO to make its much-delayed declaration of a global health emergency led to the first cases of domestic person-to-person transmission and tarnished the country’s international reputation,” Richard Koo, chief economist at Nomura Research Institute, wrote in a report.

    Outside of the ‘Diamond Princess’, Japan has only confirmed 74 cases. But Koo suspects it’s already too late for the administration to stave off a severe economic shock.

    “The coronavirus will probably cause a substantial amount of economic damage in Japan,” Koo wrote. The Abe administration, he says, “managed to completely drop the ball on this issue.”

    And Roo isn’t the only economist who’s worried about Japan: A Bloomberg survey released Wednesday showed that the economists see Japan falling into recession as the coronavirus pummels an economy already reeling from a recent unpopular sales tax hike.

    Earlier, we shared a rant from Professor Kentaro Iwata of the Faculty of Infectious Diseases at Kobe University, who claimed that the conditions aboard the ship were “completely chaotic.”

    “The cruise ship was completely inadequate in terms of controlling infections,” he said in one of them.

    “There was not a single infection control professional on the ship, nor anyone professionally involved in infection prevention. The bureaucrats were in charge of everything.”

    “There is no clear distinction between the green (healthy) zones and the red (potentially infected) zones. And the staff is running back and forth,” Iwata reported.

    Researchers tracking the virus haven’t been able to ascertain how many of the patients were infected – they seemingly picked up the virus out of thin air. Though one notable exception was a hospital worker who was infected by one of the passengers aboard the ‘Diamond Princess.’

    Japan isn’t the only government that was caught flat-footed by the outbreak. In reality, governments across the region failed to predict that it would have such a huge impact.

    “This virus spread very, very fast. Not only China, not only Japan, but also many other countries cannot catch up with the speed of this virus,” Hitoshi Oshitani, a professor of virology at Tohoku University, told reporters in Tokyo. Oshitani also sits on the government panel tackling the virus. “Even if they implemented a travel ban to all of China, it was too late.”

    Of course, the outbreak would need to get pretty damn bad for Japan and the Olympic Committee to actually cancel or postpone the games. Japan says all passengers and crew from the DP have been tested, and that anybody released will have tested negative and shown no symptoms of infection. Still, there’s a solid chance that many who have only just been infected don’t show symptoms for weeks, despite being contagious. Right now, it seems like Japan is planning to release hundreds of potentially infected people into the streets without a backup plan in case things go awry, or the worst case – that dozens of people contracted the virus in the closing days of the quarantine, and slipped through the inspection – becomes a reality.


    Tyler Durden

    Wed, 02/19/2020 – 19:25

  • The Mind Behind The "World Computer": Ethereum's Vitalik Buterin
    The Mind Behind The “World Computer”: Ethereum’s Vitalik Buterin

    Authored by Horus Hughes via CoinTelegraph.com,

    Cryptocurrencies and blockchain technology were meant to liberate the oppressed, bank the unbanked and democratize countries with opaque authoritarian governments. Whether or not the crypto sector has actually achieved these goals remains a topic of debate, but it is fair to say that a surprising number of crypto startups, initial coin offerings and blockchain companies have either missed the mark or proven to be outright scams.

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    image courtesy of CoinTelegraph

    But Ethereum co-founder Vitalik Buterin has been unassailable in his mission to build the “World Computer.” Since piecing together a revolutionary white paper in 2013, the soft-spoken genius behind the Ethereum project and Ether cryptocurrency has been a steady advocate for the democratizing capacity of decentralized networks.

    Born on Jan. 31, 1991, Buterin lived the first six years of his life in the Russian city of Kolomna – roughly 62 miles away from Moscow – before he and his parents relocated to Canada in search of better employment opportunities. Buterin performed well in school, attending The Abelard School in Toronto and displaying an uncanny aptitude for mathematics and science. Buterin finished one year at the University of Waterloo before dropping out in 2013, as his passion for blockchain technology could not wait for finishing his studies.

    Although Buterin had been an active participant in the Bitcoin community since 2011, as a co-founder of Bitcoin Magazine, he is better known as the man responsible for the seminal Ethereum white paper.

    As an active participant and contributor to numerous Bitcoin communities, Buterin frequently proposed building a more fluid version of the Bitcoin core network that would support the swift creation of decentralized apps without functionality-layering procedures. Eventually, after a succession of failed proposals, Buterin decided to develop a new blockchain with built-in support for smart contracts; and the rest is history.

    Ethereum in the post-ICO era

    Initial coin offerings, made possible in large part by the ERC-20 token standard, came to the end of their era after the 2017 hype. The Ethereum project at times seemed to have lost its way, and both average observers and Ether advocates will likely agree that the development team is more focused on network upgrades and hard forks than stabilizing the value of the altcoin. For some speculators, that could be a negative, but most of Ethereum’s true believers would say the explicit desire to focus on the network’s functionality instead of Ether’s price is a net positive in the long term.

    Recently, the network successfully implemented the Istanbul hard fork – the eighth to date – and the developers still intend for the network to shift to ETH 2.0, dubbed Serenity, in 2020.

    Buterin provides a steady hand

    What sets Vitalik Buterin apart from some of his peers is his approach to decentralization and his desire to preserve democratic principles in the crypto space. According to Buterin, the future of cryptocurrency is “diverse and pluralist,” and during times when the network’s decentralization has come under question, Buterin has stepped in to espouse the value of ensuring that all perspectives are heard and the collective desire is acted upon.

    In August 2018, Buterin told Forbes: 

    “Recently, I am spending a lot of time working on the proof-of-stake and sharding protocols. This is what the Ethereum research community is focusing on more than anything else at this point. We think that proof-of-stake and scaling are both really important and there has been a lot of progress on improving the algorithms and the development of multiple limitations over the last couple of months. I’ve also been looking at the economic analysis of transaction fees and how transaction fee algorithms can be improved to basically cut fees down and make the protocol alignment centers better and more efficient.”

    Buterin further explained that cryptocurrency needs to be easy enough to use that one could “walk into a convenience store, get a card, pay $5 and get $5, minus some small fee of like Bitcoin, Bitcoin Cash, Ether, etc and start using it.”

    What’s in store for 2020?

    Now that 2020 is underway, the general focus within the crypto space has shifted to the upcoming Bitcoin reward halving as well as the maneuvering of large institutional investors into cryptocurrencies. Rather than obsessing over Etheruem’s valuation in its Bitcoin and USD pairings, Buterin is deeply focused on pushing the network toward its transition to Ethereum 2.0.

    If implemented successfully, many in the sector believe the network upgrade will have a significant impact on the entire sector, including other networks like Tron, Cardano, EOS and Ontology — all of which claim to be superior to Ethereum.

    Ethereum’s status as the most popular smart contract platform underlies the significance of the upcoming Ethereum 2.0 upgrade. Proof of the network’s popularity is shown by the frequent overloads, where transaction times slow to a snail’s crawl and transaction fees rise to the point of rendering the network’s use less than sensible.

    This congestion shows that demand for the network is steady, and if Ethereum 2.0 successfully launches, the network would be in even higher demand. According to Buterin, Ethereum 2.0 would stand as a serious competitor to other networks, and once fully implemented, transaction times could drop from minutes to approximately three seconds.

    As Buterin said during the first sharding workshop in Taipei in 2018:

    “Ethereum 1.0 is a couple of peoples’ scrappy attempt to build the world computer; Ethereum 2.0 will actually be the world computer.”


    Tyler Durden

    Wed, 02/19/2020 – 19:05

  • Bizarre 'Road Rage Among Superpowers' Incident In Syria Caught On Film
    Bizarre ‘Road Rage Among Superpowers’ Incident In Syria Caught On Film

    A bizarre incident was captured on film Wednesday involving American and Russian military patrols. 

    The dangerous encounter took place in northeastern Syria near the town of Qamishli, site of prior recent stand-offs involving US special forces attempting to block Russian military patrols from going near oil fields in the region. 

    In the now viral video, a US armored vehicle is seen veering aggressively at a Russian military vehicle as it attempts to speed past the Americans. 

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    As the Russian vehicle careens off the side of the road, a Syrian bystander appears to be almost hit.

    Analysis of the “crazy” road rage among superpowers footage offered by The Drive notes that the two vehicles actually hit each other during the high speed incident: 

    It’s not entirely clear why, but the Russian Tigr also makes to pass the Americans on the right at the same time, deliberately going offroad, and then wedges itself between the American M-ATV and the MaxxPro vehicles. The crew of the M-ATV responds by first attempting to block the Russians from passing any further and then drives them off the road. The two vehicles appear to actually hit each other at one point. 

    A civilian bystander on the roadside is seen leaping out of the way of the Tigr just in time. The Russian and American vehicles then come to a stop as the vehicle carrying the camera drives by.

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    The whole thing took place on a roadway in the same area of an exchange of gunfire between Syrian villagers and a US patrol that took place a week ago.

    Local villagers were demanding the American occupiers depart, and blamed them for the prior death of a teenager.

    The exchange of fire, later confirmed by the Pentagon, left a Syrian dead and resulted in the minor injury of one US soldier. 


    Tyler Durden

    Wed, 02/19/2020 – 18:45

Digest powered by RSS Digest

Feb 19

Today’s News 19th February 2020

  • NATO Top Military Officer: 'Defender 20' Is Facing Problems
    NATO Top Military Officer: ‘Defender 20’ Is Facing Problems

    Authored by Belit Onay via TheDuran.com,

    Defender 20 is a large-scale military exercise that has gotten under way in recent weeks. This year in February Americans will deploy 37,000 soldiers to Germany, Poland and the Baltic States. U.S. Army Europe’s Chief of Staff German Brig. Gen. Hartmut Renk gives a few remarks for DW.

    “Defender-Europe 20 is slated to be the largest deployment of U.S.-based soldiers for an exercise to Europe in 25 years. This will be a massive exercise that will send U.S. soldiers to the continent next spring to conduct force projection and readiness training to deter potential adversaries,” stressed the German general.

    Defender 20 is a US-led multinational exercise that involves 19 countries.

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    Germany will serve as the logistics hub for moving equipment and supplies. Defender 2020 will also validate that German infrastructure is up to the task. The units participating in the exercise will be supported by the German Bundeswehr.

    It is also critical for Germans to test their own physical infrastructure – roads and bridges. These can be seriously threatened as the weight of a tank transported on a trailer can exceed 130 tons. Military equipment will also be transported by rail and river.

    The German general also mentioned that three so-called convoy support centers have been set up for the military convoys on the military training area Bergen in the Lüneburg Heath. There’s also a fuel tanker there. Some US units will bring their own equipment whereas others will use the equipment inventory already stored in Europe.

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    Commenting on possible Polish cooperation during Defender 20, Brig. Gen. Hartmut Renk estimated that Germany is ready for the upcoming maneuvers whereas the preparations of the Polish Army look like a real disaster. The security system, locations and technical support structures of allied forces in Poland during Defender 20 do not match the exercise requirements.

    According to the German general, the worst situation is at the training grounds at Ustka and Drawsko Pomorskie.

    “It’s terrible that American soldiers will live in such conditions. The barracks look like ruined stables. Mice and rats are prowling the concrete floor. It’s cold and wet. In Germany pigs are kept in better conditions. Technical support is at the level of “crowbars and hammers,” said general Renk.

    It’s worth mentioning that Poland will be one of the epicentres of one of those smaller, linked exercises – exercise Allied Spirit. This will be a division-size exercise led by the United States Army 1st Cavalry Division.

    Allied Spirit features a live wet gap crossing, in other words a river crossing that will take place at the Drawsko Pomorskie Training Area in north-western Poland. This time the task will be accomplished by a multinational bridging team (German and British soldiers) including rotary and fixed-wing support coming from the US and the Czech armed forces. Unfortunately, during the exercise Anakonda-18, in this instance, soldiers of the Polish Army failed to build a pontoon bridge, and flights and artillery firing were canceled.

    “Lack of professionalism and complete irresponsibility which the command of the Polish Army keeps demonstrating from year to year, may be a reason to cancel the planned actions during exercise Defender 20…” – summarized Brig. Gen. Hartmut Renk.

    Maj. Gen. Jeffrey Kramer, who leads EUCOM exercise programs, said DEFENDER-Europe 20 is the most massive exercise since the Cold War.


    Tyler Durden

    Wed, 02/19/2020 – 02:00

  • The Betrayal Of The Elites
    The Betrayal Of The Elites

    Authored by Paul Adams via The Epoch Times,

    In an important new book, political scientist Yuval Levin argues that we have lost faith in our institutions—public, private, civic, and political.

    We need institutions, including families, associations, churches, corporations, trade unions, political parties, professions such as law and medicine, as well as the formal institutions of government such as Congress, the presidency, and the courts.

    They are, as Levin puts it, “the durable forms of our common life.” They serve purposes or missions, like educating the young, resolving disputes, or defending the country. They give life meaning by assigning roles, teaching self-control, and enforcing standards. In the process, they form the character of those who participate in them.

    But we no longer trust them. What went wrong?

    From Molds to Platforms

    There has been a big shift in the way elites, those who play a leadership role in our institutions, treat them. Instead of seeing their institution as a mold that forms and shapes their character and behavior, they treat them as platforms for promoting their own.

    Think of a new member of Congress, who is less interested in learning and conforming to the traditions and expectations of the House than using it as a platform for gaining fame and celebrity. Congress—by its own will, Levin argues—has become increasingly weak and ineffectual. Its members seek publicity and fame through social media and other avenues even before learning or accomplishing anything of substance in Congress itself.

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    Indeed, Levin notes, political leaders often appeal to their outsider status—claiming not to be part of the Washington bubble or swamp themselves—as a way to enhance their own power. Even as leaders, they criticize their own institutions as if they were not themselves responsible or in charge of them.

    The one exception to the breakdown of confidence in institutions is the military. In that case, the formation of character—fitting those serving with the sense of duty, mission, and self-effacement of one’s own interest—is recognized and primary. It’s rare for a soldier in uniform to use the military as a platform to promote himself, not, anyway, until resigning or retiring from duty. We trust the military, beyond other institutions, to do its job of forming those who serve.

    Levin shows the need to rebuild institutions and to form elites who can better lead them. He spends much space criticizing anti-elite populism.

    But Elites Are the Problem

    The problem with all this is that it underplays the extent to which our most important institutions have been undermined systematically by the very elites who are supposed to lead and represent them.

    President Donald Trump, a performer rather than a self-effacing institution-builder, tapped into the loss of confidence in our institutions and promised to shift policy in ways that would strengthen them. He talked of draining the swamp of the federal bureaucracy, which had become an “administrative state” pursuing its own interests and policies.

    In the case of Trump’s presidency, deep hostility has been evident not only in the violent demonstrations of Antifa, but also in all the leading institutions of society. The administrative state itself has been a center of resistance to the elected president—running its own unelected government even as it asserted its own professionalism and commitment to the Constitution.

    We see this from the start in Trump’s White House itself. An opinion column by a senior official in the Trump administration in the New York Times makes the position clear. It’s called “I Am Part of the Resistance Inside the Trump Administration.”

    The author, writing under the name, Anonymous, boasts of working diligently to thwart the president’s policies even while working for him. Trump, the author says, is unaware of the extent to which “many of the senior officials in his own administration are working diligently from within to frustrate parts of his agenda.”

    The point is that Trump was elected and is supported by tens of millions in order to carry out his agenda, not that of establishment Republicans or “Never-Trumpers,” or of Obama holdovers still in his administration.

    The Wall Street Journal recently carried an opinion piece from one of those rare figures, a (former) official within the Trump administration who was a director of strategic planning in the National Security Council (NSC), who supported Trump’s policies.

    The author, Rich Higgins, confirms but deplores the overwhelming opposition to the president among executive branch staffers. As he portrays the situation on the NSC staff, those who faithfully sought to implement the president’s policies were thwarted by more senior officials on the NSC who were Obama holdovers. Those who attempted to carry out the sitting president’s policies, Higgins among them, were isolated or fired for their loyalty.

    Liberal media denounced what it called the firing of Lt. Col. Alexander Vindman, the army officer detailed to serve the NSC, as retaliation for his testifying to the House about Trump’s Ukrainian phone call. Higgins takes a different view. His point is not that Vindman was not in fact fired or investigated, but that he was disloyal.

    Vindman’s duty, he argues, “was to serve loyally until he felt he no longer could, then resign. Resistance while in uniform undermines good order and discipline and is especially dishonorable.” It was not Higgins but Vindman, lauded by the liberal media as he was, who undermined the institutions he was sworn to serve.

    Elites as Institution-Wreckers

    But the problem is wider and deeper than the kind of internal “resistance” described from one side by Anonymous, another by Higgins, and the very existence of which progressives dismiss as a “deep state conspiracy theory.”

    Levin begins his analysis with the institutions of our national government and works his way down to the foundational institution that involves us all, the family. But suppose we look at the problem the other way round.

    No institution is more fundamental or important than the family in molding us from birth on. A large body of research from scholars across the political spectrum has established the importance of family structure, of growing up in a married two-parent family, as a protective factor for every social indicator—our health and longevity, life expectancy, involvement with the criminal justice system, education, earnings, and marital success.

    Recent research indicates that family and faith (attending church or other place of worship and defining oneself as a very religious person) play a larger role in educational achievement than school-based efforts to close the gaps among racial and ethnic groups.

    A meta-analysis (study of studies) examined 30 studies of attempts to bridge the achievement gap between white students on one hand and Black and Latino students on the other. It “revealed that, if an African American or Latino student was a person of faith and came from a two-biological-parent family, the achievement gap totally disappeared, even when adjusting for socioeconomic status.” [emphasis added]

    Yet progressive elites beyond the administrative state—in academia, law, media, sports, big business, and entertainment—have targeted, unrelentingly, just those institutions that are most important in the lives of ordinary people.

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    It is the advocates of identity politics who have attacked the institutions of marriage and family, not the populists. These ideologues have used their own institutions as platforms to train others, in psychology, social work, and other fields. The aim is not to support those they serve by helping them strengthen families and marriages, but to liberate individuals from the grip of those institutions.

    The sexual revolution has gone far beyond seeking legal recognition for alternative forms and definitions of marriage and family. Its adherents seek to stigmatize and expel from public life those—individuals, parents, businesses, and faith communities—that defend those foundational institutions.

    They attack as bigots and haters those whose views were the common sense of almost all communities everywhere just a few decades ago. Such people, according to the new orthodoxy, are unworthy of the right to free speech, free exercise of religion, or the right to pursue in peace their professional vocation or conduct their business enterprise.

    Looked at this way, it’s the progressive elites who are destroying our institutions, opposing their purposes and missions, and so the meaning and structure of our lives. It is Trump, a performer unmolded and unintimidated by the ways and customs of political institutions and offices, who is leading the defense of our basic institutions.

    His policies aim to defend families and their rights, to uphold school choice, religious freedom and protection of conscience, and the right of children in the womb, the most vulnerable and innocent of all the human family, not to be killed.

    Trump and his policies provide at least a moment of respite from, and pushback against, the totalitarian impulses of progressives who seek to politicize and control every aspect of life.


    Tyler Durden

    Wed, 02/19/2020 – 00:05

  • EU Will Deploy Warships Off Libya's Coast To Enforce UN Arms Embargo
    EU Will Deploy Warships Off Libya’s Coast To Enforce UN Arms Embargo

    Just after the EU’s foreign policy chief Joseph Borrell urged Europe to “develop an appetite for power” to better chart its own independent course in solving various international crises impacting Europe, the EU has agreed to deploy warships in order to enforce a United Nations arms embargo on the war-torn country. 

    The EU has stressed, however, that this is not an extension of its prior controversial mission to rescue migrants and refugees in the Mediterranean: 

    Josep Borrell, the EU’s chief diplomat, announced that 27 foreign ministers had agreed to launch a new operation with naval ships, planes and satellites in order to enforce the UN arms embargo on Libya.

    To counter objections that the operation could morph into a rescue mission, Borrell promised the ships would be withdrawn if they became “a pull factor” that encouraged people to attempt the risky crossing from Libya to Europe. This commitment helped lift opposition to the mission from Italy and Austria, whose governments had blocked an earlier compromise.

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    The EU has established a new naval mission in the Mediterranean, via EPA/Al Jazeera

    Going all the way back to the 2011 US-NATO intervention to topple Gaddafi, the north African country has existed in a state of anarchy with multiple governments and factions vying for control, and now Benghazi-based strongman Khalif Haftar is attempting to bring the country by force under his control in his bid to seize the capital. 

    This has set the stage for a major proxy war involving the UAE as the prime weapons supplier of Haftar, and Turkey as supplying weapons, drones, and even troops to the Tripoli Government of National Accord (GNA). Russia has also reportedly supplied Haftar’s army with mercenaries from the Wagner group. 

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    The fighting in Libya as well as the external arms supplies fueling both sides of the conflict has become so bad that the United Nations has called an arms embargo recently in place “a joke”. 

    “The arms embargo has become a joke, we all really need to step up here,” U.N. Deputy Special Representative to Libya Stephanie Williams said days ago at an international security conference in Munich.

    “It’s complicated because there are violations by land, sea and air, but it needs to be monitored and there needs to be accountability,” Williams added, and noted further that Libya has over the past multiple months of fighting been flooded with advanced weapons.

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    Migrant boat in the Mediterranean, image via Creative Commons

    This newest EU operation appear’s the bloc’s attempt at a more muscular response in the wake of frustration over “not doing anything”. 

    Austria’s foreign minister, Alexander Schallenberg was quoted in The Guardian Tuesday as saying, “There is a basic consensus that we now want a military operation and not a humanitarian mission.”

    The details of the new mission to block all arms going into Libya, dubbed Operation EU Active Surveillance, are as follows: 

    Ships under the new mission – to be known as Operation EU Active Surveillance – will patrol about 60 miles (100km) off the coast of Libya, an area of the Mediterranean that is the main route for weapons into the country.

    An internal EU memo, released by the London-based civil liberties group Statewatch, underscores that the EU does not expect to be involved in rescuing people. “Naval assets can be deployed in the areas most relevant to the implementation of the arms embargo, in the eastern part of the area of operation or at least 100km off the Libyan coast, where chances to conduct rescue operations are lower,” it says.

    It’s widely believed that should ‘mission creep’ occur and the European military ships get pulled into a costly ‘rescue mission’ upon possibly encountering stuck migrant ships in the area, the whole operation will lose political backing and momentum. 

    There’s also concern that the mere presence of EU ships will only serve to encourage more migrants to attempt the dangerous Mediterranean crossing. 


    Tyler Durden

    Tue, 02/18/2020 – 23:45

  • Financial Feudalism – The New American 'Dream'
    Financial Feudalism – The New American ‘Dream’

    Authored by Mike Krieger via Liberty Blitzkrieg blog,

    “Happy 18th Birthday! Meet your new Daddy,” read one website advertisement. “Do you have strong oral skills? We’ve got a job for you!” cooed another.

    A message on another billboard directed at the “daddies” was more blunt: “The alternative to escorts. Desperate women will do anything”…

    SeekingArrangement was founded by Las Vegas tech tycoon Brandon Wade. Wade is apparently worth somewhere in the neighborhood of $40 million. His motto is, “Love is a concept invented by poor people”…

    SA also markets itself as an antidote to student debt. In the U.S. and elsewhere, college students are enduring financial instability and hardship. Because of rising college fees and rent, and the lack of time available for work during studies, many women are extremely vulnerable to exploitation.

    “SeekingArrangement.com has helped facilitate hundreds of thousands, if not millions, of arrangements that have helped students graduate debt-free,” Wade boasts on the website. Promotional videos show young, beautiful women enrolled in “Sugar Baby University” — in classrooms, holding wads of cash, driving luxury cars, and discussing the pleasure and ease of being a sugar baby.

    When signing up for an account, potential sugar babies are told, “Tip: Using a .edu email address earns you a free upgrade!”

    – TruthDig: Sugar-Coated Pimping

    When plunder becomes a way of life for a group of men in a society, over the course of time they create for themselves a legal system that authorizes it and a moral code that glorifies it.

    – Frédéric Bastiat

    Watching politics unfold in the post-financial crisis era has been extraordinarily frustrating. While it’s been refreshing to observe the emergence of grassroots populism over the last few years, there’s a problematic lack of depth and clarity embedded in these burgeoning mass movements. Tens if not hundreds of millions of Americans now acknowledge that something’s deeply broken within the current paradigm, but we remain focused on identifying symptoms as opposed to understanding and rectifying the systemic nature of the problem.

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    Of course, there are numerous complexities when it comes to the administration of an imperial oligarchy, and our system didn’t emerge overnight. Perhaps the most fundamental mutation of the post WW2 era came in 1971 when the international convertibility of U.S. dollars into gold was severed. This is when the country began its long transformation from a largely industrial empire to a financial one. I’ve often highlighted how the purely fiat USD reserve currency is the most powerful weapon ever invented, and how the U.S. control of the global financial system is the true backbone of empire, but it’s equally important to understand how the predatory financial system is also used to subjugate Americans in their own country.

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    In order to understand how this works we need to dig into the most fundamentally important four letter word in any modern economy: Debt.

    When most people consider the debilitating societal effects of excessive debt they tend to see it from one basic level. How the bottom half of the population essentially has no choice but to borrow in order to participate in the economy as constructed. This is because the cost of so many things has been inflated way beyond the capacity of most people to purchase them outright. Specifically, wage growth has failed to keep up with the soaring costs of fundamental things such as shelter, healthcare and higher education.

    For instance, home prices have been rising faster than wages in 80% of U.S. markets, which means the higher cost tends to offset historically low mortgage rates. Low interest rates don’t really help such people, it just lets them maybe, barely purchase an intentionally inflated asset to live in by taking on a huge chunk of debt. An asset that could quickly become completely unaffordable should the economy turn down as it did a decade ago.

    As such, you have multitudes taking on debt defensively just to keep going and avoid falling further down the socioeconomic scale. Debt doesn’t empower such people, rather, it turns them into modern day indentured servants endlessly stuck on a hamster wheel with little to no hope of getting off. This is not an accident, it’s a tried and tested tool which, when combined with incessant mass media propaganda, is an effective way of creating a submissive, confused and desperate underclass.

    Many people understand this by now, but what’s far less understood, yet potentially more significant, is how the wealthy use debt.

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    When you own your primary home outright and you’ve got enough savings that healthcare premiums and paying for your kids college in cash doesn’t make a dent, debt becomes something else entirely. Debt’s no longer an albatross around your neck, instead it becomes a tool to increase wealth. Debt becomes leverage.

    Much of the explosion in wealth inequality over the past several decades can be traced back to this systemic interclass weaponization of debt. If you’re very wealthy and connected, access to extremely cheap debt is virtually unlimited, and this access is used to make leveraged bets on all sorts of stuff, but primarily real estate and financial assets such as stocks and bonds. Hasn’t this always been the case you ask? Aren’t those with capital always extremely advantaged over those without it? Isn’t that the history of capitalism and America since the beginning? My answer would be yes and no.

    The main difference between prior periods of history and, let’s say the 21st century, has been the vast increase in power of the financial services sector thanks to the Federal Reserve’s willingness to encourage and enable the insatiable reckless behavior of the speculator class. It’s no secret the Fed has been intentionally boosting assets across the FIRE sector such as real estate, stocks and bonds since the crisis. Those with the capital to ride the coattails of this irresponsible and undemocratic central planning rushed out to take on debt to buy these assets, thus multiplying the return on investment.

    While the white-collar cubicle worker with enough extra income to diligently add to their retirement account over the past decade has done fine, bankers or hedge fund managers who took on massive leverage to amplify such bets made generational fortunes while creating nothing of value. It’s the way debt works for the financial services sector versus how it works for the average person in a world dominated by big finance and the central bankers who provide them unlimited welfare.

    The same thing occurs within the corporate suite, as executives across industries have used access to extremely cheap debt to buyback stock and reward themselves handsomely despite creating nothing of societal value while doing so. It’s pure financial engineering. Nobody should become generationally wealthy this way, but it’s exactly what’s been happening. So you see, debt’s not just a means to subjugate a desperate bottom half of the population, it’s concurrently an effective tool to expand wealth and power at the top. 

    Then there’s this.

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    When was the last time the bond market paid you to make an acquisition? As Max Keiser so eloquently puts it, this is interest rate apartheid.

    But it’s even more pernicious than that. It’s still possible for regular wealthy people to take on too much leverage, make a mistake, and lose their fortunes — unless of course you’re an executive at major financial services firm. In that case you simply can’t lose, which was the primary lesson learned from the response to the financial crisis.

    Not only were the titans of this industry not jailed, they walked away with their fortunes intact. The Federal Reserve and the U.S. government made this happen. It wasn’t an accident and it wasn’t to “save the economy;” that’s just nonsense talk for the confused masses. The entire point was to consolidate and further entrench the unaccountable power of those at the very top of the finance feudalism paradigm and signal they’ll also be bailed out for any future catastrophe they create.

    Significantly, financial feudalism isn’t just interclass, t’s also intergenerational. The stock market and real estate crash of a decade ago was the market’s attempt to reset those assets more in line with median incomes, but central banks would have none of that. They determined asset prices needed to be re-inflated as much as possible as fast as possible, and these unelected banker stooges went about implementing this major policy decision of central economic planning with zero public debate. Young people entering the workforce had no savings and poor wage growth, so a generation was quickly priced out of homeownership while simultaneously stuck with an enormous pile of student debt. The results of all this are unsurprising.

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    The crisis facing this country is simmering and metastasizing under the surface of misleading aggregate economic data and record stock markets. While it’s tempting to focus on the symptoms, we’ll never confront and tackle any of this properly unless we understand the structure and how the game is really played. The system you’re living in isn’t capitalism or socialism, it’s financial feudalism.

    *  *  *

    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, 02/18/2020 – 23:25

  • Chinese Cities Begin Subsidizing Car Purchases To Resurrect Auto Market From The Dead
    Chinese Cities Begin Subsidizing Car Purchases To Resurrect Auto Market From The Dead

    As nearly the entire country of China remains on lockdown – and the country’s auto industry, which was already mired in recession prior to the coronavirus fiasco, gets thrashed even further – some Chinese cities are doing what governments do best: inefficiently throwing money they don’t have at their problems.

    The Chinese city of Foshan is the first in what we guess is going to be a long line of cities to start subsidizing car purchases, according to a Bloomberg report out Monday. 

    Consumers who trade in old models are going to be given 3,000 yuan (about $430 USD) of subsidies. Buyers of new vehicles without trade ins will be entitled to 2,000 yuan.

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    The move comes after President Xi Jinping has urged local officials to help boost auto sales.

    Recall, we wrote just days ago that auto sales in China were crushed in January, declining 20.2% on a year over year basis, according to the government-backed China Association of Automobile Manufacturers. The country sold 1.94 million vehicles, according to the CAAM. 

    The decline is attributable, obviously, to the coronavirus outbreak in the country, combined with the lunar new year falling in late January, as opposed to early February, this year.

    And, unfortunately, there is literally no reason for optimism in February, as it was the end of January and early February when China was placed essentially on a full lockdown due to the outbreak of the virus.

    In fact, we just wrote  a couple weeks ago that auto industry executives are admitting that the virus could “wreak havoc” on sales and production for the first quarter, according to the Asia Times. Automakers across the country have been forced to cancel sales targets and offer subsidies to hold over dealers during the outbreak.

     

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    The coronavirus has now killed over 1,700 people (if you are to believe the CCP’s likely understated numbers) and more than 70,000 people are now confirmed to be infected in China. 780 million people in China are now living under travel restrictions. 

    Just days ago, we reported about a major inventory glut looming in the Chinese auto market, as well.

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    Wuhan has become a ghost town

    Accordingly, we noted, traffic to showrooms has collapsed across the country since late January. A China Automobile Dealer’s association poll shows that dealers predict a drastic drop in sales of 50% to 80% this month, compared to February 2019. 70% of dealers have said they have seen “almost no customers” since the end of January. 


    Tyler Durden

    Tue, 02/18/2020 – 23:05

  • If Duterte Wants Us Out, Let's Go
    If Duterte Wants Us Out, Let’s Go

    Authored by Pat Buchanan via Buchanan.org,

    Philippines President Rodrigo Duterte has just given us notice he will be terminating the Visiting Forces Agreement that governs U.S. military personnel in the islands.

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    His notification starts the clock running on a six-month deadline. If no new agreement is negotiated, the VFA is dissolved.

    What triggered the decision?

    Duterte was offended that one of his political allies who led his anti-drug campaign in the islands, which involves extrajudicial killings of drug dealers, had been denied a U.S. visa.

    Yet, Duterte has never been an enthusiast of the U.S. presence. In 2016, he told his Chinese hosts in Beijing: “I want, maybe in the next two years, my country free of the presence of foreign military troops. I want them out.”

    The Pentagon is shaken. If there is no VFA, how do we continue to move forces in and out to guarantee our ability to honor the 1951 Mutual Defense Treaty? Defense Secretary Mark Esper called Duterte’s action “a step in the wrong direction.”

    President Donald Trump openly disagreed: “If they would like to do that, that’s fine. We’ll save a lot of money.”

    The Philippine Islands are among the largest recipients of foreign aid in East Asia, and we’ve provided $1.3 billion in military assistance over the last two decades. But money shouldn’t be the largest consideration here.

    Trump has been given a historic opportunity to reshape U.S. and Asia policy along the lines he ran on in 2016.

    He should tell Duterte that we accept his decision and that we, too, are giving notice of our decision to let the 1951 treaty lapse. And following expiration of that treaty, the U.S. will be absolved of any legal obligation to come to the defense of the Philippines.

    Time for Manila to take charge of its own defense. Indeed, what is the argument for a treaty that virtually dictates U.S. involvement in any future war in 7,600 islands 8,000 miles from the United States?

    When we negotiated the 1951 treaty, it was a different world.

    We had entered a Cold War with Stalin’s USSR. We were in a hot war in Korea that would cost 37,000 U.S. lives. Gen. Douglas MacArthur had just been relieved of his command of U.S. forces in Korea by Harry Truman. A disarmed Japan had not fully recovered from World War II.

    The Communist armies of Chairman Mao had overrun China and driven our Nationalist allies off the mainland. The Viet Minh were five years into a guerrilla war to drive the French out of Indochina.

    Today, the Cold War is long over. Vladimir Putin’s Russia is no threat to the Philippines. Nor is China, though Xi Jinping has occupied and fortified islets like Mischief Reef in the South China Sea that are within the exclusive economic zone of the Philippines.

    There is no U.S. vital interest at risk in these islands to justify an eternal war guarantee or treaty commitment to fight Beijing over rocks and reefs in the South China Sea.

    Trump should seize this opportunity to tell Duterte that when the VFA, which guarantees immunity for U.S. forces in the Philippines, is dissolved, the 1951 Mutual Defense Treaty is dissolved.

    A message would be sent to Asia, and the world, that Trump was serious when he said that he intends to revisit and review all the defense alliances and war guarantees entered into 60 and 70 years ago, to address threats that no longer exist in a world that no longer exists.

    The U.S. has a long history with the Philippines, beginning in the War of 1898 with Spain, when Admiral George’s Dewey’s Asian squadron sank a Spanish fleet in Manila harbor, and we invaded, occupied and colonized the islands, thus emulating Europe’s imperial powers and abandoning the anti-colonial legacy of the Founding Fathers.

    “Take up the White Man’s burden,” Rudyard Kipling admonished us.

    After Filipino patriots fought for nearly four years to liberate their islands from the Americans, as they had from the Spanish, inflicting on U.S. soldiers and Marines thousands of casualties, the New York Herald replied to the Poet of Empire:

    “We’ve taken up the white man’s burden/Of ebony and brown/Now, will you tell, Rudyard/How we may put it down.”

    After Pearl Harbor in December 1941, the Japanese invaded and occupied the islands, until Gen. MacArthur made good in on his famous pledge on leaving Corregidor, “I shall return.”

    In 1944, we liberated the islands.

    A year after Japan’s surrender, on July 4, 1946, we granted the Philippines full independence. And that nation and people, far more populous and prosperous than in 1946, should take full custody of the defense of their own sovereignty and independence.

    At the end of the Cold War, nationalists in Manila ordered the U.S. to vacate the great naval base we had built at Subic Bay. We should have used that expulsion to let the 1951 security treaty lapse.

    Trump should not miss this opportunity.


    Tyler Durden

    Tue, 02/18/2020 – 22:45

  • Stunning Video: Dubai Shows Off Human Jet Pack That Does 150MPH
    Stunning Video: Dubai Shows Off Human Jet Pack That Does 150MPH

    It was just days ago that we reported about Disney’s new dystopian flying robotic acrobats that were taking the place of stunt actors and were capable of performing flips and changing body positioning in mid-flight.

    Today, we move a step closer to human superheroes. Pilot Vince Reffe, who is referred to as Jetman Dubai, was recently videotaped flying around the city in a human jetpack that draws comparisons to comic book characters like Iron Man. 

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    In a video that has been going around on Twitter Monday that originated with The Crown Prince Hamdan Mohammed, Reffe is seen hovering with his jetpack over the water outside the city of Dubai.

    He then turns the jetpack toward the city and blasts off at what appears to be well over 100 miles per hour, at one point flying straight up into the sky, mimicking fighter jet moves.

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    It was estimated that he reached “as much as 1,800 meters” in the air in a matter of seconds, according to TMZ. The pilot then performs some acrobatics, before coming back down to land using a parachute.

    And the jetpack doesn’t just look badass, either.

    It sounds like a small jet engine aircraft. You’ll want to turn the sound on for this video. 

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    Tyler Durden

    Tue, 02/18/2020 – 22:25

  • Iran Says US Must Fix Own 'Nontransparent' Undemocratic Elections Before Lecturing Others
    Iran Says US Must Fix Own ‘Nontransparent’ Undemocratic Elections Before Lecturing Others

    Authored by Jake Johnson via CommonDreams.org,

    The Iranian Foreign Ministry on Monday urged U.S. officials to focus on fixing their own country’s “nontransparent” and undemocratic system before calling into question the legitimacy of elections in other nations.

    Abbas Mousavi, spokesperson for Iran’s Foreign Ministry, told reporters that the U.S. system “ignores the vote of the majority of people” and said “American officials had better address questions” about the country’s elections from the U.S. public.

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    Iranian Foreign Ministry spokesman Abbas Mousavi. Image source: Xinhua/Ahmad Halabisaz via Getty Images)

    Mousavi appeared to be referring to the Electoral College, the archaic system the U.S. uses to elect its president every four years. Two of the last three presidents — George W. Bush and Donald Trump — have lost the popular vote yet won the presidential election thanks to the Electoral College.

    Democratic presidential candidates Sen. Bernie Sanders (I-Vt.), Tom Steyer, Sen. Elizabeth Warren (D-Mass.), and Pete Buttigieg have all expressed support for abolishing the Electoral College.

    Mousavi’s remarks came in response to a video released last Friday by the U.S. State Department characterizing Iran’s upcoming Feb. 21 parliamentary elections as fraudulent.

    “The regime would have you believe that these are free and fair elections,” U.S. Special Representative for Iran Brian Hook said in the video. “But the real voting takes place in secret and long before Feb. 21. The clerics pick the winners and losers before the ballots are even cast.”

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    Democratic presidential campaigns and activists in the U.S. are voicing concerns that this week’s Nevada caucuses could be plagued by the same issues — from technology failures to lack of preparation — that threw the Iowa caucus into chaos earlier this month.

    One Democratic volunteer warned based on training sessions hosted by the Nevada Democratic Party that the caucus could be a “complete disaster,” pointing to the iPads the party plans to use to record and submit results.

    An anonymous aide to a Democratic presidential campaign told the Washington Post Sunday that “it feels like the [Nevada State Democratic Party is] making it up as they go along.”

    “That’s not how we need to be running an election,” the aide said.


    Tyler Durden

    Tue, 02/18/2020 – 22:05

  • "It's The Biggest Sex-Abuse Bankruptcy Of All Time" – Facing 100s Of Lawsuits, Boy Scouts Of America Goes Chapter 11
    “It’s The Biggest Sex-Abuse Bankruptcy Of All Time” – Facing 100s Of Lawsuits, Boy Scouts Of America Goes Chapter 11

    When we last checked in on the Boy Scouts of America, the organization was reeling from a deluge of sex-abuse lawsuits that was soaking up all of its financial resources and attention, raising the possibility of a bankruptcy filing to help the organization escape the hefty penalties and allow the 110-year-old nonprofit to survive.

    This strategy should be familiar to Zero Hedge readers by now: it’s the same playbook used by opioid maker Purdue Pharma and troubled wildfire-starting California utility PG&E.

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    And on Tuesday, the organization finally followed through: According to Fox News, the BSA filed for Chapter 11 bankruptcy protection early Tuesday following decades of sex abuse claims by troop leaders.

    The petition was filed in Delaware bankruptcy court, and will halt the hundreds of lawsuits that the organization is facing after several states passed laws allowing abuse lawsuits based on allegations stretching back to the 1960s to proceed against the organization.

    In response to the bankruptcy filing, an attorney who is representing some 300 alleged victims said that the bankruptcy would be “bigger in scale than any other sex abuse bankruptcy.”

    “You’re talking about thousands of perpetrators,” Seattle-based lawyer Michael Pfau, who has represented more than 300 Boy Scout victims in 34 states, told the New York Daily News. “You’re talking about tens of thousands of victims. This will be the largest bankruptcy the country has ever seen, and likely one of the largest corporate bankruptcies.”

    The scouts organization said it’s filing for bankruptcy to guarantee that victims are fairly compensated for any abuse suffered during their time in scouting. A Victims’ Compensation Trust will be set up during the bankruptcy process, which the organization says will allow for “equitable compensation.”

    The organization added that it wants scouting to survive:

    “The BSA cares deeply about all victims of abuse and sincerely apologizes to anyone who was harmed during their time in Scouting. We are outraged that there have been times when individuals took advantage of our programs to harm innocent children,” said Roger Mosby, president and chief executive officer of the BSA.

    “While we know nothing can undo the tragic abuse that victims suffered, we believe the Chapter 11 process – with the proposed Trust structure – will provide equitable.”

    The BSA has also published an “open letter to victims”, which be found online, or as a full-page ad in the Feb. 19 edition of USA Today.

    We bring you the full text below:

    Any incident of child abuse is one too many.

    As a father, a former Scout, and the National Chair of the Boy Scouts of America, I am truly heartbroken that you were harmed during your time in Scouting and that you carry unfathomable pain.

    I am outraged that individuals took advantage of our programs to commit these heinous acts.

    I am also outraged that there were times when volunteers and employees ignored our procedures or forgave transgressions that are unforgivable. In some cases, this led to tragic acts of abuse. While those instances were limited, they mean we didn’t do enough to protect the children in our care – to protect you.

    On behalf of myself and the entire Scouting community: I am sorry. I am devastated that there were times in the past when we failed the very children we were supposed to protect.

    Please know we have worked consistently over many years to implement multilayered policies to keep kids safe. As knowledge on child sexual abuse prevention has advanced, so have our expert-informed policies, including mandatory background checks and trainings, a ban on one-on-one interactions between youth and adults, and mandatory reporting of any suspicion of abuse to law enforcement. Today, we believe the BSA’s youth safety measures are the strongest and most effective policies found in any youth-serving organization.

    I regret that these measures weren’t always in place or weren’t always enough. The fact is that predators harmed innocent children in Scouting programs, and for this I am deeply sorry.

    The BSA cannot undo what happened to you, but we are committed to supporting you and to doing everything in our power to prevent it from happening to others. It is a social and moral responsibility that I and the entire organization take extremely seriously. We believe that all victims should receive our support and compensation – and we have taken decisive action to make that possible.

    Specifically, the national organization of the Boy Scouts of America has initiated a voluntary financial restructuring to ensure we can equitably compensate all victims of past abuse in our programs, through a proposed Victim’s Compensation Trust.

    I encourage you, and all victims to come forward and file claims so you can receive compensation from this Trust. We will provide clear notices about how to do so.

    I want you to know that we believe you, we believe in compensating you, and we have programs in place to pay for counseling for you and your family by a provider of your choice.

    We have also partnered with 1in6, a trusted national resource for male survivors, to expand their services so that you are able to anonymously access vital support from trained advocates when and how you need it. You can access these services at www.1in6.org/BSA.

    The abuse you suffered weighs on us all every day. But your courage also motivates us to do more for the children we are entrusted to protect. We will do better – for you, for kids today, and for kids tomorrow.

    Yours in Scouting, Jim Turley, National Chair, Boy Scouts of America

    Sadly, as we learned from the Catholic Church and numerous other examples in recent decades, institutions can survive allegations of widespread sex abuse.

    A bigger threat for the Boy Scouts is the advent of social media and video games, which encourage kids to stay home with their screens, far away from nature. To a tech-addicted pre-teen, there’s probably nothing that sounds more nightmarish then a weekend out in the woods with your weird classmate’s dad.


    Tyler Durden

    Tue, 02/18/2020 – 21:45

  • US Engaged In "Shameless, Impudent Pillage Of Wealth" In Syria: Russia
    US Engaged In “Shameless, Impudent Pillage Of Wealth” In Syria: Russia

    Western mainstream media is once again putting Idlib at the center of their coverage, with emotive and hugely exaggerated headlines like “Bombed as they flee: A million Syrians try to escape Assad’s onslaught” — however with no mention that a US designated terrorist organization, al-Qaeda’s Hayat Tahrir al-Sham, has for years brutally held Idlib territory, suppressing the civilian population.

    With the Syrian Army and its Russian allied force now again feeling US pressure over the ongoing offensive, the Kremlin has hit back, slamming the US for its occupation and resource plunder of Syria. 

    Russia’s Defense Minister Sergey Shoigu while on a state visit to Rome on Tuesday charged American forces with a “shameless, impudent pillage of the wealth,” according to Russian state sources. 

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    US armored vehicles on the key M4 highway in Syria’s northeast, via AFP.

    “The oil fields… are controlled by the US. There’s shameless, impudent pillage of the wealth that belongs to Syria and the Syrian people taking place,” Shoigu said.

    He pointed out that this resource theft combined with an extreme US sanctions regimen is creating horrific conditions among the civilian populace facing freezing winter temperatures. “Most of the people, who are now suffering in Syria, are in need of heat, hot water and electricity, which — as we understand it — come from hydrocarbons that are forbidden to be supplied there,” the minister said further.

    Over the past two weeks US and Russian convoys have had dangerous run-ins in Syria’s northeast anytime Russian forces get too close to Syrian oil fields. Though no exchanges of fire have resulted, the two superpowers’ militaries are coming dangerously close to engaging in a major incident. 

    Meanwhile in separate statements a top Syrian official has confirmed that Russia is helping the Syrian state and its people to counter the West’s economic blockade. 

    Syria’s ambassador to Russia, Riyad Haddad, said at an event hosted in Siberia that “Russia together with the Syrians is fighting the economic blockade imposed by Western powers and is also providing our people with all kinds of support and humanitarian assistance.”

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    Russian bomber over Idlib file image, via Al Masdar News.

    Over the past months President Trump has articulated in a provocatively blunt manner that US troops will remain in Syria “to secure the oil”. There’s been nothing in the way of a timetable or specified goal in terms of when the mission might be ‘accomplished’ or the troops might come home. 

    And last Saturday President Trump held a much anticipated phone call with his Turkish counterpart Tayyip Erdogan at a moment tensions continue soaring over Idlib, and after a week of direct confrontations between the Syrian and Turkish armies left scores dead and wounded on either side.

    The two leaders condemned the Syrian Army advance into Idlib, calling the military offensive with Russian support “unacceptable”. This after last week the US dispatched special envoy for the region James Jeffrey to Ankara, where the diplomat verbalized full support to “our NATO ally Turkey”.

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    “Stressing that the regime’s most recent attacks are unacceptable, the president and Trump exchanged views on ways to end the crisis in Idlib without further delay,” the Turkish presidency said in a statement.

    At the start of this week the Russian Defense and Foreign ministries expressed they will not heed the US call to halt the offensive, reaffirming that Russian forces are assisting in a legitimate counter-terror operation. 


    Tyler Durden

    Tue, 02/18/2020 – 21:25

  • "Absolutely Unacceptable" – Leaked Boeing Memo Shows 'Debris' Found In 737 MAX Fuel-Tanks
    “Absolutely Unacceptable” – Leaked Boeing Memo Shows ‘Debris’ Found In 737 MAX Fuel-Tanks

    With airline after airline pushing back their ‘return-to-service’ dates based on Boeing’s total lack of clarity on the path forward for the 737 MAX, the troubled aircraft maker (and the troubled aircraft) now faces more problems.

     

    According to an internal memo, seen by Reuters, Boeing found debris that could pose potential safety risks in the fuel tanks of several 737 MAX aircraft that are in storage and waiting to be delivered to airlines.

    To be clear about what ‘debris’ means, Reuters  details that:

    “an industrial term for rags, tools, metal shavings and other materials left behind by workers during the production process.”

    And notes that this ‘debris’ problem has been a quality control issue for various Boeing aircraft, such as its KC-46 tankers.

    Foreign-object debris (FOD) “is absolutely unacceptable. One escape is one too many,” Mark Jenks, a Boeing vice president and general manager of the 737 program, said in a message to employees that was viewed by Reuters.

    “With your help and focus, we will eliminate FOD from our production system,”

    The FOD problem on the MAX was first reported Tuesday on Scott Hamilton’s Leeham.net aviation site:

    “There’s a systemic issue with Boeing’s quality control that hasn’t been corralled yet,” said Hamilton in an interview.

    “This is not related to the MAX crashes or exclusively a MAX issue. Boeing has these FOD issues on other airplane programs.”

    A Boeing spokesman confirmed the memo’s authenticity; and Boeing now having to inspect more than 400 stored 737 Max jets, but Bernard Choi said “it’s still undecided if we will inspect the rest” of the MAX fleet – another 385 aircraft that were delivered to customers but have been grounded for almost a year and are parked at airfields around the world.

    “Obviously, we’ll do what’s right for safety,” Choi added.

    Boeing spokesman Chaz Bickers was, however, careful to claim that the company does not see the debris as contributing to delays in the jet’s return to service. (The inspections will take two to three days per aircraft. Fuel must be drained from the wings before a mechanic can go in and do a thorough check.).

    The Federal Aviation Administration said it was aware that Boeing “is conducting a voluntary” inspection for debris in the undelivered aircraft “as part of the company’s ongoing efforts to ensure manufacturing quality.”

    It may delay the airlines’ decision to accept delivery of the jets though (as its not exactly reassuring to crew members and passengers of the company’s commitment to manufacturing quality and safety!)

     


    Tyler Durden

    Tue, 02/18/2020 – 21:05

  • Yellen Says Fed Should Buy Stocks In The Next Crisis
    Yellen Says Fed Should Buy Stocks In The Next Crisis

    Back in June 2017, there were several odd moment of bizarre honesty coupled with schizophrenic confusion under Janet Yellen’s Fed.

    First there was San Fran Fed president John Williams, who would eventually on to become the Fed’s #2 when he took over as head of the NY Fed in 2019, who said that “there seems to be a priced-to-perfection attitude out there” and that the stock market rally “still seems to be running very much on fumes.” Williams added that “we are seeing some reach for yield, and some, maybe, excess risk-taking in the financial system with very low rates. As we move interest rates back to more-normal, I think that that will, people will pull back on that.”

    Then it was then-Fed vice chairman Stan Fischer’s turn, who echoed Williams in saying that “the increase in prices of risky assets in most asset markets over the past six months points to a notable uptick in risk appetites…. Measures of earnings strength, such as the return on assets, continue to approach pre-crisis levels at most banks, although with interest rates being so low, the return on assets might be expected to have declined relative to their pre-crisis levels–and that fact is also a cause for concern.” Fischer then also said that the corporate sector is “notably leveraged”, that it would be foolish to think that all risks have been eliminated, and called for “close monitoring” of rising risk appetites.

    Finally, none other than then-Fed Chair Janet Yellen said that some asset prices had become “somewhat rich” although like Fischer, she hedged that prices are fine… if only assumes record low rates in perpetuity: “Asset valuations are somewhat rich if you use some traditional metrics like price earnings ratios, but I wouldn’t try to comment on appropriate valuations, and those ratios ought to depend on long-term interest rates.”

    But while these three moments of rare honesty prompted surprised stares among investors – as a reminder, back then the S&P was trading at “only” 2,400, the Fed was only starting to hike rates and QE4 was more than two years ago – it is what Yellen said next that shocked virtually everyone.

    Responding to a question on financial system stability, Yellen said post-crisis regulations had made financial institutions much “safer and sounder”, and as a result she went on to predict that there would never again be a financial crisis “in our lifetimes” to wit:

    “Will I say there will never, ever be another financial crisis? No, probably that would be going too far. But I do think we’re much safer and I hope that it will not be in our lifetimes and I don’t believe it will.”

    While some were quick to compare this statement by Yellen (who then was 70–ears old) to Neville Chamberlain infamous – and very, very wrong – 1938 prediction of “peace in our time”, perhaps she was hiding a trump card all along… A trump card which she revealed only now, almost three years later.

    Speaking via video conference with bankers in Kansas City, Yellen said that the Fed would take a page out of the SNB and BOJ playbook, and “might be able to help the U.S. economy in a future downturn if it could buy stocks and corporate bonds.” Of course, by “US economy” she meant the “top 1%” and their political cronies.

    And while Yellen was quick to walk back this “hypothetical” scenario, saying that “the issue was not a pressing one right now” and pointed out the U.S. central bank is currently barred by law from buying corporate assets, the idea was already “incepted” in the heads of America’s political rulers (whose fate is just as tied to the vagaries of the stock market) and the law can be changed literally overnight. And after all, it is only a matter of time before a crisis does hit, and now Yellen has explained has to happen to avoid an all out social catastrophe in a country where financial assets account for nearly 6x of GDP.

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    To validate her point, Yellen said that the Fed’s current toolkit might be insufficient in a downturn if it were to “reach the limits in terms of purchasing safe assets like longer-term government bonds.”

    “It could be useful to be able to intervene directly in assets where the prices have a more direct link to spending decisions,” she said, adding that buying equities and corporate bonds could have costs and benefits…. But mostly benefits, if only for the Fed, the politicians and the very, very rich.

    Keep in mind that what Yellen said was merely a paraphrase of Ben Bernanke’s famous April 2010 WaPo oped in which he defended easy monetary policy is facilitating higher stock prices, which would  “boost consumer wealth and help increase confidence, which can also spur spending. Increased spending will lead to higher incomes and profits that, in a virtuous circle, will further support economic expansion.”

    Of course, none of this “trickle-down” ever happened, and instead what did happen is that the top 10% of US society who own 93% of all equities got fantastically rich…

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    … while the bottom 90% who own virtually no stocks and owe most of the debt, got very, very angry as they watched how the Fed plundered their future and hopes to become wealthy, and resulted first in the election of Trump, and the upcoming election of a socialist candidate as America goes full-on populist in response to the Fed’s catastrophic policies.

    However, thanks to Yellen we now know that the Fed won’t go down without a fight… or at least without monetizing everything before the Marriner Eccles building is finally burned down.

    Last month, Yellen told a conference the Fed would fight a future recession by buying government debt and jaw boning interest rates lower with pledges on future policy. But she said other tools might be necessary, including expanding the range of assets it would purchase.

    And so, thanks to Janet Yellen, we now we know that before the current fiat regime of central banks finally ends and before stocks go limits up as the revolution starts, the Fed will order a POMO of, well, everything in one final, last ditch effort to keep social stability by creating the impression that stocks are stable and rising even as society implodes.

    Will it be successful? Normally we would say “not a chance.” But when one considers that that’s precisely what has happened for the past decade, and one has to think really hard just how much further the Fed can keep kicking the can before it all comes crashing down.


    Tyler Durden

    Tue, 02/18/2020 – 20:45

  • Which Supply Chains Are Most At Risk: The Answer In One Chart
    Which Supply Chains Are Most At Risk: The Answer In One Chart

    Now that Apple has broken the seal and made it abundantly clear that China’s economic collapse which could push its Q1 GDP negative according to Goldman as the second largest world economy grinds to a halt (as described here last week)…

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    … will have an adverse impact on countless supply-chains, which in today’s “just in time” delivery environment, are absolutely critical for keeping the global economy running smoothly (for a quick reminder of what happens when JIT supply chains stop functioning read our article from 2012 “”Trade-Off”: A Study In Global Systemic Collapse“), attention on Wall Street has turned to which other US sectors stand to be adversely impacted should the coronavirus pandemic not be contained on short notice and China’s economy crisis transforms into a supply shock.

    Conveniently, Goldman Sachs just did this analysis.

    In a report looking at the impact of Chinese factory shutdowns on the US consumer, Goldman’s Spencer Hill first looks at historical precedent and finds that a somewhat similar supply shock emerged in the winter 2014-15—a four-month labor dispute affecting West Coast ports— which appeared to meaningfully affect retail spending on consumer goods in the first quarter of 2015 (though snowy weather was likely a factor as well). This is shown in the chart below.

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    Indeed, the March 2015 Beige Book noted that consumer spending in the San Francisco Fed district would have been stronger “if not for delays receiving merchandise caused by labor disputes at West Coast ports.”

    Extrapolating this historical pattern, Goldman notes that “long shipping times to the US (generally 1 month or more by sea) imply the supply-chain effects of Chinese production shortfalls may not fully materialize until future quarters—at which point above-trend Chinese production or import substitution from other counties could offset some of the impact.”

    However, analyzing granular international trade data from the Census Bureau, Goldman finds that nearly a third of Chinese products arrive by air (by value, including over 75% of telecom hardware), with these goods representing 3.6% of US retail sales and just under 1% of personal consumption expenditures. The composition of these products (and their wholesale value) are shown in the left panel of the chart below, and represent the sector most likely to be impacted as China remains paralyzed. Unsurprisingly, airfreight imports are skewed towards high-value, light-weight products such as smartphones, laptops, and consumer electronics, representing a perfect storm for a company such as Apple which is reliant on all three. Additionally, a significant share of apparel and footwear (10%) also arrives from China by plane.

    To summarize, here are the sectors more at risk from a continued crunch across Chinese factories:

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    Illustratively, Goldman notes that if air freight from Mainland China falls by 50% in February and returns to roughly normal in March, forgone sales could reduce monthly retail control by as much as 1.8%. Assuming only half of these spending dollars are used to purchase other goods and services, February retail spending would be depressed by 0.9%, lowering Q1 consumption growth by 0.3% (qoq ar).

    The good news, until last night at least, is that virtually no companies had disclosed an immediate adverse impact emerging due to Chinese supply chains, sparking some hopes that most if not all had found alternative supply chain substitutes to offset the Chinese crisis. However, with Apple’s guidance cut, it now appears that US companies had merely hoped to delay as long as possible the guidance cuts. As a result we now expect a waterfall of negative earnings preannouncements from most companies that have even a modest exposure to Chinese output, which also means that Q1 earnings are looking increasingly gloomy after the modest EPS rebound in Q4, which as we detailed previously was entirely on the back of the “Big 5” FAAMG tech megacaps.


    Tyler Durden

    Tue, 02/18/2020 – 20:25

  • Watch: SpaceX Falcon 9 Misses Landing After Delivering 60 Starlink Satellites
    Watch: SpaceX Falcon 9 Misses Landing After Delivering 60 Starlink Satellites

    In what is being called a “successful mission on Monday morning, SpaceX launched a Falcon 9 rocket as part of its fifth Starlink satellite mission. Not so much of a success was the rocket’s ability to “stick the landing” after the mission had ended. 

    Streaming the mission live via the internet, the Falcon 9 first stage appeared to miss the drone ship it was supposed to be landing on in the Atlantic Ocean. In the livestream, smoke can be seen on one side of the ship before water splashes the camera. 

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    “We clearly did not make the landing this time,” says Starlink engineer Lauren Lyons on the livestream.

    Another commentator on the webcast also said: “Unfortunately we did not land the first stage on our drone ship, but it did make a soft landing on the water right next to the drone ship so it does look like it might be in one piece.”

    The primary mission of the launch, however, was a success. The mission was to put Starlink satellites in orbit that will join SpaceX’s existing network. It hopes to grow that network to over 10,000 satellites to be able to deliver high-speed internet across the Earth, according to Mashable.

    SpaceX has failed 11 out of 65 landings, according to the company, though they have not publicly commented on Monday’s miss. 

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    And after he has control of the entire planet’s WiFi, we guess that Musk will probably use that power to ban access to anyone who makes a snide remark or offers criticism about any of his companies on the web.


    Tyler Durden

    Tue, 02/18/2020 – 20:05

  • Thousands Ordered To Work From Home As Experts Warn Japan Is "On The Cusp Of A Large Outbreak"
    Thousands Ordered To Work From Home As Experts Warn Japan Is “On The Cusp Of A Large Outbreak”

    With half of China’s population facing some level of travel restriction due to the coronavirus outbreak, the Politburo’s attempt to get the country back to work has been slow going and fraught with setbacks.

    Much of the coverage so far has lingered on Apple’s supply woes and warnings by companies as diverse as automakers and textiles firms about supply chain disruptions tied to factory closures in China. But China isn’t the only country facing serious economic blowback from the outbreak.

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    Tens of thousands of professional workers in Japan have been asked to work from home in a government-supported policy to contain a possible outbreak in Tokyo.

    With 66 confirmed cases outside the 542 infected aboard the ‘Diamond Princess’, Japan has the largest number of cases outside China.

    As the government advises people to avoid crowded area, many companies have instructed employees to either work from home or minimize their time in-office. According to Nikkei, they include: Soy, Fujitsu, Toshiba, Takeda, NEC, KDDI and SoftBank.

    To keep employees out of large crowds, Sony urged staffers Tuesday to telework and avoid commuting during rush hour. It is suspending its usual 10-day monthly cap for working from home.

    For those who must physically be on-site, Sony is offering a flexible schedule with shorter mandatory hours of noon to 3:30 p.m., compared with the usual start time of 9:30 a.m. Bypassing rush-hour commutes will minimize the risk of contracting the coronavirus, the thinking goes.

    Fujitsu is letting employees who are pregnant or have underlying health conditions to work from home for as many full days as needed, scrapping its usual weekly and monthly limits. Toshiba told all subsidiaries Tuesday to introduce telecommuting to all workers.

    Takeda also urged its 5,200-plus workers to stay off and avoid commute during rush hour if they must come in at all. Among other companies advocating telework are NEC, KDDI and SoftBank Corp.

    Shinzo Abe’s government, eager to do everything it can to ensure that the Summer Olympics in Tokyo go off without a hitch, is backing the work-from-home policy for as long as necessary to prevent the virus from spreading.

    The government has embraced such efforts. “It’s important to create an environment where students and workers feel like they can stay home, and I ask for your cooperation,” Japanese Prime Minister Shinzo Abe said at a response meeting Tuesday.

    “Teleworking is an effective solution,” he said.

    “People must not go to school or work if they have coldlike symptoms, such as a fever, and avoid leaving the house,” said Abe, who also discouraged large-scale events that could lead to widespread infection.

    Tokyo Gov. Yuriko Koike on Monday threw her support behind teleworking and staggered commutes. “We need to start with what we can, and we’ll come up with a detailed plan as soon as we can,” she said.

    Abe is especially concerned as infectious disease experts warn about the possibility of a China-style outbreak in Japan, as former FDA Director Scott Gottlieb said the country looked to be on the verge of a major outbreak.

    The Tokyo Metropolitan Government decided that day to distribute roughly 150,000 protective masks to bus and taxi drivers in response to a request by industry groups.

    The world is watching to see if Japan will see the first major outbreak outside China. Japan appears “on the cusp of a large outbreak and maybe epidemic growth,” former U.S. Food and Drug Administration Commissioner Scott Gottlieb told CNBC on Tuesday. The country’s patient count has doubled in four days, he said.

    “If you start to see this become epidemic in other nations or have other nations experiencing large outbreaks that’s going to be extremely worrisome that we’re not going to control this globally,” Gottlieb said.

    But with a stampede of passengers and crewmembers of the ‘Diamond Princess’ about to be released from a two-week quarantine tomorrow through Friday, even as the number of newly diagnosed cases continues to rise, Abe should probably pray that his government’s top public health officials know what they’re doing.


    Tyler Durden

    Tue, 02/18/2020 – 19:50

  • Japan Releases First 500 'Diamond Princess' Passengers As 14-Day Quarantine Ends
    Japan Releases First 500 ‘Diamond Princess’ Passengers As 14-Day Quarantine Ends

    Summary:

    • Death toll passes 2,000 as Hubei reports 132 deaths for Tuesday

    • Japan to release first wave of 500 passengers + crew at 10:30 am in Tokyo

    • Florida health officials mysteriously refuse to share virus info with reporters

    • Russia bars all Chinese from entering

    • NYT notes signs of impending economic distress

    • South Korea announces “emergency steps” to prepare for outbreak.

    • South Korea announces 15 new cases

    * * *

    Update (1940ET): It’s Wednesday morning in Yokohama. So you know what that means.

    Japanese health authorities are beginning the process of offloading the remaining 2,000+ passengers and crew aboard the ‘Diamond Princess’, a ship that has been under quarantine for 14 days.

    The offloading will take place in phases over three days, finally wrapping up on Friday. The first 500 people are set to leave at around 10:30 am Tokyo time on Wednesday. There will be no preference given to different nationalities, according to Japan’s Ministry of Health.

    Many who depart will be subject to another 14 days of quarantine, including any Americans who elected to stay on the ship instead of traveling back to the US on the evac flight. Roughly 40 Americans were also excluded from that flight because they were being treated for the virus in a Japanese hospital.

    So far, 542 people – including at least 14 of the 300 or so Americans who traveled back to the US on Monday in Japan – have tested positive for the virus. And while Japan says it has tested everybody aboard, doctors and experts say there’s no way to certain that people being released won’t be carrying the virus – hence the quarantines when they return home.

    But where will they go between now and then? And with no immediate after-care plans – at least none that have been publicly disclosed, it looks like Japan is about to set thousands of people aboard the most infected environment outside China loose in Tokyo.

    Of course, Japanese authorities are so paranoid about the Olympics, one would think they would be doing everything in their power to stop an outbreak in Tokyo, especially at such a sensitive time.

    About 500 people are set to leave the ship from around 10:30 a.m. Tokyo time on Wednesday, with no preference given to any particular nationality, Japan’s Health Ministry said.

    Hopefully, health officials will manage to convince the world that they successfully screened for the virus.

    The ship was first quarantined on Feb. 5 more than a week after a man who tested positive for the virus in Hong Kong disembarked. Journalists have shared stories of desperation and paranoia from those trapped on the ship, making it sound like such a nightmare that many who read those stories may never want to travel on a cruise.

    In other news, Yonhap reported minutes ago that South Korea has another 15 cases, increasing the countries total by roughly one-third to 46 one day after the country’s president warned of an “economic emergency” as companies like Hyundai suffer from supply shortages from China. The South Korean government has already announced a fiscal stimulus package to help companies hurt by the virus.

    * * *

    Update (1720ET): Health officials in Hubei reported a big jump in deaths on Tuesday, shattering the state’s narrative that the virus is being beaten because the number of confirmed cases and deaths were falling.

    And with the new figures, the China death toll has hit 2,000 exactly, up from 1,868 deaths as of the end of Monday, according to China’s NHC.

    • HUBEI REPORTS 1,693 NEW CORONAVIRUS CASES, 132 DEATHS FEB. 18
    • CHINA’S CORONAVIRUS DEATH TOLL HITS 2,000

    Meanwhile, state officials in Florida are refusing to release any information about the state’s efforts to contain a coronavirus outbreak, including data about the number of patients who have been tested for the virus, according to the Tampa Bay Times.

    “The goal of this public health response is containment,” said state Surgeon General Scott Rivkees, who presented to the Senate Health Policy committee Tuesday. “And if there’s a confirmed case, it will absolutely be reported.”

    Rivkees added that the state wasn’t allowed to release the information because of “privacy concerns” – likely a rule about patient confidentiality codified in the federal HIPPA guidelines.

    However, veteran journalists in the state pressed the surgeon general: These numbers were shared with the public during Zika, and since the numbers don’t include any personalized details, there shouldn’t be any conflict with HIPPA.

    Despite their protests, the state simply deferred to the Department of Health, which has created a 700-person incident management team to liaise with states and help the country prepare for the potential outbreak. Certain protocols have been shared with officials in every state.

    Though if not sharing this information is part of some kind of federal ‘protocol’, then how come Washington State is sharing some of this information directly on a Department of Public Health website?

    Also in the US: the CDC said earlier that the State Department is planning to bar any Americans who were aboard the Diamond Princess but didn’t return with the evacuees from returning to the country until next month.

    * * *

    Update (1600ET): Writing in the latest update to its coronavirus live blog, the New York Times points out that more signs of economic pain from the outbreak have emerged on Tuesday. It cites HSBC’s bloodletting, Jaguar’s warning about looming production problems and Apple’s latest production warning as worrying signs of corporate blowback even as the Nasdaq closed at a record high.

    Economic fallout from the new coronavirus epidemic continued to spread on Tuesday, with new evidence emerging in manufacturing, financial markets, commodities, banking and other sectors.

    HSBC, one of the most important banks in Hong Kong, said it plans to cut 35,000 jobs and $4.5 billion in costs as it faces headwinds that include the coronavirus outbreak and months of political strife in Hong Kong. The bank, based in London, had come to depend increasingly on China for growth.

    Jaguar Land Rover warned that the coronavirus could soon begin to create production problems at its assembly plants in Britain. Like many carmakers, Jaguar Land Rover uses parts made in China, where many factories have shut down or slowed production; Fiat Chrysler, Renault and Hyundai have already reported interruptions as a result.

    U.S. stocks declined on Tuesday, a day after Apple warned that it would miss its sales forecasts due to disruption in China, as concerns about the impact of the outbreak weighed on the outlook for the global economy.

    Stocks tied to the near-term ups and downs of the economy slumped, with energy, financials and industrial shares the leading losers. The S&P 500 index was down 0.5 percent at midafternoon in New York trading.

    Bond yields declined, with the 10-year Treasury note yielding 1.55 percent, suggesting  investors are lowering their expectations for economic growth and inflation. With much of the Chinese economy stalled, demand for oil has fallen and prices were down on Tuesday, with a barrel of West Texas Intermediate selling for roughly $52.

    In Germany, where the economy depends heavily on global demand for machinery and automobiles, a key indicator showed economic sentiment has tumbled this month, as the economic outlook has weakened.

    You know it’s bad when CNBC’s unspoken economics ‘Word of the Day’ is ‘one-off’.

    Meanwhile, America’s ‘paper of record’ reported that at least 150 million people in China are living under severe lockdown restrictions confining them largely to their homes. That’s one-tenth of China’s population, and 1% of the global population.

    Kind of hard to work and consume when you can’t leave the house.

    * * *

    Update (1410ET): In an interview with Fox News, the CDC’s Dr. Anthony Fauci said the risk to Americans of contracting COVID-19 is relatively low right now, but that “could change” given the chaotic and unpredictable situation.

    “The risk clearly is relatively low right now, but that could change. So we’re telling our American citizens to not be fearful, to not be afraid, but to keep an eye on it.”

    Dr. Fauci added that the federal government has quarantined every known case of the virus.

    “The people in this country that were aware of being infected they’ve been contacted, isolated and made aware that this is the case.”

    Just in case any get through, the US is starting ‘sentinel surveillance’ of patients around the country who go to the hospital to report flu-like symptoms, as we reported yesterday.

    “That will give us a better idea of whether there are any cases that we haven’t identified or noticed,” the doctor added.

    Watch the clip below:

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    * * *

    Update (1300ET): In a landmark decision, Russia has temporarily banned Chinese from entry as of Feb. 20, becoming the first country to ban all Chinese from entry in response to the coronavirus outbreak, according to Russian news agency TASS.

    This is only the latest step from Russia, which has already closed most entry points along its 4,200-kilometer border, suspended e-visas and work visas for Chinese nationals.

    Russia has already reported two cases of coronavirus – the only cases confirmed in the country so far – both involving Chinese nationals.

    Though there haven’t been many cases, there have been a number of interesting virus-related headlines out of Russia in recent weeks. Two men in the city of Chelyabinsk were fined for hooliganism after they filmed a prank video where they pretended to shoot a man infected with the virus in a park. The men wore white hazmat suits and face masks while simulating the shooting of the third person, who wasn’t actually infected.

    — Russia discharged a Chinese national from the hospital in the Siberian city of Chita on Wednesday after he recovered from a coronavirus infection, the second of Russia’s two confirmed cases of coronavirus to recover. The other victim, also a Chinese national, was also said by authorities to have recovered and been released from quarantine in Siberia’s Tyumen region.

    Meanwhile,apropos of nothing, BNO News shared one of the latest videos out of Hubei Province, which we’d like to now share with you.

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    This could be an Olympic Sport (if they don’t cancel the Olympics, that is).

    As a handful of brave foreign correspondents continue to report on the outbreak inside mainland China, the Epoch Times’ reporter Jennifer Zeng revealed on Tuesday that 71 people from one workplace in Beijing have been placed under quarantine after one employee was infected by COVID-19.

    We’re glad to see China’s shift back to work is going so well.

    * * *

    Update (0840ET): Global Times editor Hu Xijin, a government mouthpiece whose tweets were closely followed during the ‘Phase 1’ trade-deal negotiations, is touting China’s dubious data as a sign that the Communist Party is winning the ‘People’s War’ against COVID-19.

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    * * *

    Last night, the western press exposed the Americans for breaking Japan’s quarantine on the ‘Diamond Princess’ by ferrying some 14 infected individuals to the US. But with one day left to go before the Japanese government ends its quarantine and releases thousands of terrified and paranoid passengers into the streets of Tokyo.

    On Tuesday, another 88 passengers from the Diamond Princess were diagnosed with the virus, bringing the total to 542.

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    Japan has completed tests for all passengers and crew aboard the ship as of Monday, but the results for the last batch of tests aren’t expected until Wednesday, the day that the quarantine is slated to end. So far, results are back for 2,404 passengers and crew, out of the 3,711 who were  on board the ship when the quarantine began on Feb. 5.

    Japanese Health Minister Katsunobu Kato said Tuesday that people who have tested negative for the virus would start leaving on Wednesday, but that the process of releasing passengers and crew won’t be finished until Friday, according to the Washington Post.

    The remaining 61 American passengers on the DP who opted not to join the evacuation will not be allowed to return to the US until March 4, according to the American embassy in Tokyo. The governments of Australia, Hong Kong and Canada have also said they would evacuate passengers.

    Elsewhere, Japan confirmed three more cases of the virus. This time, they were confirmed in Wakayama, a prefecture in eastern Japan.

    In the latest indication that the 14-day quarantine simply wasn’t enough to kill the virus, a British couple has tested positive for the virus just one day before Japanese authorities are set to release everybody from quarantine, according to the Guardian.

    “David and Sally Abel, a British couple onboard the Diamond Princess cruise liner in Japan, have tested positive for coronavirus, a day before passengers who tested negative were due to start leaving the ship after spending two weeks in quarantine.”

    Including all of the cases announced overnight, there are now 73,336 confirmed cases of the virus worldwide, compared with 1,874 deaths.

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    Johns Hopkins

    As the battle against the virus rages in Wuhan, Liu Zhiming, 51, a neurosurgeon and the director of the Wuchang Hospital in Wuhan, became the latest high-profile medical worker to succumb to the virus, as we noted last night. Late last week, China confirmed that nearly 2,000 medical workers had been infected.

    The Commission overseeing China’s virus response has released a statement commemorating Liu’s life and honoring his death.

    “From the start of the outbreak, Comrade Liu Zhiming, without regard to his personal safety, led the medical staff of Wuchang Hospital at the front lines of the fight against the epidemic,” the commission said. Dr. Liu “made significant contributions to our city’s fight to prevent and control the novel coronavirus,” it added.

    In Beijing, senior officials including President Xi continued to play down the economic blowback from the virus. During remarks on Tuesday, Xi insisted that China could still meet its 2020 economic targets – which called for a doubling of the size of the Chinese economy in 10 years – despite the outbreak.

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    Of course, China’ goalseeked economic data has never offered a truly accurate reflection of the world’s second-largest economy. And a report by PitchBook warns that Chinese startups are struggling to raise money as the epidemic complicates deal talks an deals a serious blow to the country’s ‘venture capital’ scene.

    From the start of the year through Feb. 12, venture capital activity in China fell from 381 to 137 deals, and the capital raised declined from $4.05 billion to $1.37 billion, compared to the same period last year.

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    Prior outbreaks like SARS and swine flu also weighed on investment activity.

    Moving south to Seoul, South Korean President Moon Jae-in called for South Korea to take “emergency steps” to prepare for a more widespread outbreak of COVID-19.

    In contrast to Xi, Moon warned the coronavirus could have a “bigger and longer-lasting impact” on his country’s economy than the 2015 MERS outbreak, which prompted South Korea to roll out a supplemental budget while the central bank cut rates, WaPo reports. Speculators are now betting on a rate cut at the Bank of Korea’s meeting next week. Singapore also announced on Tuesday that it had earmarked $2.8 billion for virus relief measures to help stabilize its economy and assist workers.

    Over in the Philippines, 25,000 stranded workers can now return to work.

    French Health Minister Olivier Veran said Tuesday there was a “credible risk” that the virus could transform into a pandemic, Reuters reports.

    “This is both a working assumption and a credible risk,” Veran told France Info radio, when asked about the possibility of the coronavirus spreading globally.

    Taking a brief break from the news, our disturbing video of the day comes from Xinjiang, the far-flung province that’s home to millions of Uyghur Muslims.

    In this video, shared by the Epoch Times’ Jennifer Zeng, a police officer suddenly collapses while walking. His current status is unknown.

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    Offering a lesson in contrasts, the Global Times, a mainland tabloid, has continued to tweet lighthearted human interest stories from the heart of the outbreak. Today’s story: A health-care worker getting married in the heart of the outbreak.

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    The GT also reported that officials in Hubei are continuing with a “comprehensive search” for patients with fevers, and have even started tracking down every individual who has purchased fever or cough medicine since Jan. 20.

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    As we reported last night, Apple published a press release admitting it “does not expect to meet the revenue guidance we provided for the March quarter” due to coronavirus-related issues.

    Since we haven’t reported a full breakdown of cases in a while, here’s a complete list and breakdown of infections by country and territory, courtesy of the AP:

    Mainland China: 1,868 deaths among 72,436 cases, chiefly in Hubei
    Hong Kong: 58 cases, 1 death
    Macao: 10
    Japan: 607 cases, including 542 from a cruise ship docked in Yokohama, 1 death
    Singapore: 77 cases
    Thailand: 35
    South Korea: 31
    Malaysia: 22
    Taiwan: 22 cases, 1 death
    Vietnam: 16 cases
    Germany: 16
    United States: 15 cases; separately, 1 US citizen died in China
    Australia: 14 cases
    France: 12 cases, 1 death
    United Kingdom: 9 cases
    United Arab Emirates: 9
    Canada: 8
    Philippines: 3 cases, 1 death
    India: 3 cases
    Italy: 3
    Russia: 2
    Spain: 2
    Belgium: 1
    Nepal: 1
    Sri Lanka: 1
    Sweden: 1
    Cambodia: 1
    Finland: 1
    Egypt: 1

    In a recent study, China’s CCDC found that the virus’s fatality rate – 14.8% – is for people aged 80 or older with co-occurring medical conditions. Young and healthy people, meanwhile, typically experience much more mild symptoms, according to the BBC. Along those same lines, the WHO confirmed on Tuesday that the virus manifests as only a minor infection in four out of five people who contract it, according to the Guardian.

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    For everybody still saying that the virus is no more dangerous than the annual flu outbreak, here’s some food for thought: An analysis of 44,672 coronavirus patients in China whose diagnoses were confirmed by laboratory testing has found that 1,023 had died by Feb. 11, a fatality rate of 2.3%. That’s far higher than the mortality rate for the seasonal flu.

    Finally, the New York Times has reviewed lockdown conditions across China, and confirmed that more than 760 million people are living in neighborhoods or villages with at least some imposed strictures regulating residents’ comings and goings. That represents half of China’s population, and one out of every ten people on the planet.

    Some neighborhoods only require residents to show ID, sign in and have their temperature checked. Other villages prohibit bringing in guests. In places with more stringent restrictions, households are only allowed to send one person out at a time – and often not even every day.

    Last night, Zeng reported that in some parts of Wuhan the lockdown has become so strict that people aren’t allowed to come outside at all.


    Tyler Durden

    Tue, 02/18/2020 – 19:49

  • Mississippi Welfare Director Arrested For Largest Embezzlement In State History
    Mississippi Welfare Director Arrested For Largest Embezzlement In State History

    Submitted by Sovereign Man Explorer

    Mississippi welfare director arrested for largest embezzlement in state history

    What happened:

    The former director of Mississippi’s Department of Human Services, John Davis, was arrested for embezzling millions of dollars from welfare funds. Some of the funds went to a former WWE wrestler who was allegedly being paid to give classes on drug abuse. In reality, the money was paying for the wrestler’s own posh drug rehab.

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    Former head of Department of Human Services, John Davis

    He never taught a class. According to the auditor’s office, Davis and another DHS employee made fake invoices to pay Brett DiBiase — a former pro wrestler who later became a DHS employee — with money intended to help poor families. DiBiase is the son of well-known former pro wrestler Ted DiBiase.

    Embezzled funds were also funneled to other co-conspirators through their businesses, using fake documents and forged signatures.

    What this means:

    The stolen money came from a federal grant for state welfare programs, so this doesn’t just affect Mississipians.

    It’s unclear right now exactly how much money was stolen. But over $30 million tax dollars were granted to the Mississippi Community Education Center, which is owned and operated by a mother-son team who have been arrested and charged in the fraud. Just makes you wonder how many of these types of schemes go under the radar.

    When the government has so much of your money to give away, it’s bound to happen.

    * * *

    Texas Supreme Court to decide if mom’s boyfriend has same rights as biological dad

    What happened:

    A divorced Texas couple split custody of their young daughter. Tragically, the girl’s mother died in a car accident.

    But rather than award custody to the girl’s father, the courts split custody between the biological father and the deceased mother’s boyfriend. Everyone agreed – including the courts and the boyfriend – that the father was a perfectly fit parent.

    But the daughter had lived with her mother’s boyfriend for about 50% of the time over an 11-month period. So the courts decided he had just as much standing as the biological father to seek custody.

    In contrast, the girl’s maternal grandparents were denied custody, because they could not prove that leaving the biological father as sole custodian of his daughter would be harmful to her.

    Now the case is headed to the Texas Supreme Court.

    What this means:

    This is a sad case. And it’s possible or even likely that the boyfriend actually cares about this girl. But she is not his daughter. And it is concerning for a state to take away the right of the biological father to make decisions regarding his daughter’s life.

    If the ruling goes the wrong way, it could set a precedent that courts can simply overrule parental rights, and grant custody to people unrelated to the child, based on any number of criteria.

    * * *

    Man goes to court for using phone while riding a horse

    What happened:

    In New South Wales, Australia a man was riding his horse down the road. That’s perfectly legal. But he was also talking on his phone. And he did not have a hands-free device attached to his horse. So the local police ticketed him for operating a vehicle while using a mobile phone.

    This guy was actually forced to go to court and plead guilty, just to resolve the matter.

    What this means:

    Apparently Australia has cleared up  all violent crime, doesn’t have any theft, and has run out of criminals. Otherwise, what cop in his right mind is going around ticketing horse riders for talking on their phones, on a rural road with light traffic?

    Unlike cars, horses can actually steer themselves.

    * * *

    Cop who passed out drunk in his patrol car on the job won’t be charged

    What happened:

    A local cop in Colorado was in his patrol car, armed, and passed out, when another stumbled upon the scene. The cop who found him called it in, and said that it appeared the passed out officer was drunk. But an internal affairs investigation found there wasn’t enough evidence to prosecute.

    The District Attorney finds that hard to believe. The DA said he was frustrated that he was not given enough evidence to charge the officer with drunk driving, or other crimes related to being drunk on the job.

    What this means:

    Every week it seems we highlight some case of an overzealous cop arresting someone for something ridiculous and petty.

    But then when it comes to actual crimes and public danger caused by officers, suddenly the state isn’t so heavy handed.

    The rules are for thee, not for me.


    Tyler Durden

    Tue, 02/18/2020 – 19:30

  • Wall Street Tears Up The Reflationary Playbook, "Capitulates Into Deflationary Assets" As Growth Optimism Fades
    Wall Street Tears Up The Reflationary Playbook, “Capitulates Into Deflationary Assets” As Growth Optimism Fades

    So much can change in one month.

    Back in January, when following a brief burst of reflationary euphoria Bank of America conducted its first Fund Manager Survey for the decade, it found a burst in optimism and investor euphoria, with concerns about a recession a distant memory as professional investors – unable to grasp that the market surge was entirely on the back of the Fed’s QE4 and nothing to do with actual economic growth – turned irrationally exuberant on growth.

    It did not last long: just one month later, in the latest just released survey of 221 panelists who collectively manage $676BN in AUM, the mood has turned sharply lower as global growth expectations fell to just net 18% of investors surveyed believing the global economy will improve in the next 12 months (48% of respondents expect stronger growth vs. 29% expecting weaker growth) down from net 36% in January if still well above 2019 lows.

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    A big reason for the dour mood was rising COVID-19 fears, notably around Chinese growth, which led to the first cut in FMS global growth, global profits & global inflation expectations since Oct’19.

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    FMS investors also slashed their expectations for inflation 17ppt with only net 40% expecting higher global CPI in the next year; when asked what would increase inflation expectations, 26% of those surveyed said Modern Monetary Theory – also known as helicopter money and which is inevitably coming at some point, the only question is when – while 24% selected a G7 commitment to infrastructure spending.

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    In the same vein, 67% of investors surveyed expect below-trend growth and inflation over the next year, up 5ppt from January.

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    And with the brief renaissance of value stocks that lasted for all of a few weeks last September now a distant memory, Wall Street once again expects growth stocks to outperform value stocks over the next 12 months, according to net 6% of investors surveyed; this marks the biggest jump in favor of growth since December 2014 and the highest overall reading since July 2008. So much for JPMorgan’s “once in a decade” opportunity to buy value stocks.

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    As a result of this reversal in sentiment, inflationary trades have once again been cast aside, and amid the combo of tepid macro, the spread of the COVID-19 virus, oil plunge offset by QE-forever consensus, BofA’s chief equity strategist Michael Hartnett sees a full capitulation into “deflation assets”, with the most “crowded trade” once again long US tech/growth stocks to an even greater extent than in January …

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    … followed by Treasuries, IG bonds, and short vol, i.e., all the popular “QE trades”…

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    … while positioning and flows saw a big Feb rotation into US stocks (especially tech), bonds and EM, out of banks, energy, value…

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    … and highest expectations of growth sectors to outperform value since July’08.

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    As one would expect, Wall Street investors cut their long-term rate expectations this month, substantiaing their conviction in owning deflation winners.

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    Looking at sectors, allocation to technology rose 9% to net 40% overweight, the highest level since October 2016, with Tech sector allocation the highest among FMS investors.

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    What about regions? Here allocation to emerging markets equities rises 3% to net 36% overweight, the highest since March 2019, making EM equities the most preferred region for the fourth consecutive month.

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    As for currencies, a net 54% of those surveyed say the US dollar is overvalued, the second highest level since 2002… which is ironic with the dollar continuing to surge (at least against other fiat currencies, if not so much gold).

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    “Investor sentiment is less bullish than last month and shows full capitulation into deflation assets,” said Michael Hartnett, chief investment strategist. “We stay irrationally bullish.”

    Hartnett’s “irrational bullishness” is hardly unique, because despite this deflationary capitulation, allocations to global equities rose by 1 percentage point to net 33% overweight, a 20-month high, as US equity allocation rose 16ppt to net 19% overweight, the highest since Sept. 2018.

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    So can anything ever break markets out of their infatuation with deflationary assets? Yes: one thing – helicopter money. According to FMS respondents, MMT (Modern Monetary Theory, aka Magic Money Tree) is most likely to increase global inflation expectations (26%), followed by G7 infrastructure spending plan (24%) & “election of progressive liberal” as US president (18%). These are also the three biggest risks to the longest “bull market” of all time:

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    Hilariously, it is now the end of QE in Europe and Japan that markets believe will push inflation expectations higher. Which means that central banks have totally failed in their mission which is to stimulate inflation through monetary intervention, and in reality every central bank stimulus is now deflationary. We doubt anyone in the mainstream economic profession will touch this stunning observation with a ten foot pole.


    Tyler Durden

    Tue, 02/18/2020 – 19:10

  • 10 'Plagues' That Are Hitting Our Planet Simultaneously
    10 ‘Plagues’ That Are Hitting Our Planet Simultaneously

    Authored by Michael Snyder via The End of The American Dream blog,

    All of a sudden, really crazy things are starting to happen all over the world.  Giant swarms of locusts are absolutely devastating entire regions, extremely unusual storms are confounding meteorologists, earthquake and volcanic activity are both on the rise, and five very dangerous diseases are sweeping across the globe.  So far in 2020, it has just been one thing after another, and many are speculating about what could be ahead if events continue to escalate.  The other day my wife mentioned that one of her friends suggested that I should put together a list of all the weird stuff that has been taking place, and so that is what I have decided to do. 

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    The following is a list of 10 plagues that are hitting our planet simultaneously…

    #1 Armies Of Locusts – As I detailed the other day, swarms of locusts the size of major cities have been devouring entire farms in Africa in as little as 30 seconds.  These swarms have also been spreading throughout the Middle East, and now we have learned that they have even reached China…

    A gigantic swarm of locusts that belong to a plague that has ravaged millions of acres of crops across east Africa has been spotted reaching the Chinese border.

    Billions of the insects have destroyed food supplies across Kenya, Somalia and Ethiopia in what has been described as the worst plague for decades.

    #2 Extremely Bizarre Weather Patterns – It is almost as if virtually all of the old rules have suddenly been thrown out the window.  An all-time record 209 mph wind gust just hit Calfiornia, and absolutely crazy storms are happening all over the planet.  For example, just check out what just took place in Australia…

    Sydney has been thrown into chaos by a devastating storm that saw two months of rainfall in just two days – forcing mass evacuations, leaving 150,000 homes without power, and prompted warnings not to drive to work. The storm dumped 400mm of rain on the city over the weekend, causing mayhem for commuters on Monday morning with roads blocked, ferries canceled and trains suffering major delays across the network.

    #3 Unprecedented Flooding – We are seeing unusual flooding all over the world right now, and the flooding that is devastating the southern U.S. at this moment is being called “unprecedented”…

    In Jackson, Mississippi, hundreds of residents either watched their homes flood over the weekend or worried their residence would soon be drenched as the Pearl River crested Monday at 36.8 feet, its third-highest level ever recorded – behind only 1979 and 1983.

    Calling the Jackson floods “historic” and “unprecedented,” Mississippi Gov. Tate Reeves said in a Sunday press conference that “we do not anticipate this situation to end anytime soon. It will be days before we are out of the woods and the waters recede.”

    #4 Major Earthquakes – Really big earthquakes are happening with such frequency now that it is very difficult for me to write about them all.  For example, a magnitude 7.7 quake recently struck off of the coast of Jamaica, but I have been so busy writing about other disasters that I have not even mentioned it until now…

    A magnitude 7.7 earthquake struck Tuesday about 80 miles from Jamaica, shaking people in the Caribbean and as far away as Miami.

    A tsunami of 0.4 feet was recorded in the Cayman Islands at George Town, but no tsunami was observed at Port Royal, Jamaica, or Puerto Plata, Dominican Republic.

    #5 Unusual Volcanic Eruptions – Seismic activity has been rising all over the globe, and over the past couple of months we have seen volcanoes all over the world pop off like firecrackers.  One of the most notable eruptions that we have seen in recent days was the most powerful eruption of Mount Merapi in 90 years…

    One of Indonesia’s most active volcanoes, Mount Merapi just experienced its most powerful eruption since 1930! The eruption reportedly took place on Thursday and was caught on video displaying a powerful and terrifying eruption showing the moment the crater exploded and launched lava and ash an estimated 2,000 meters into the air forcing local residents to stay outside of the designated no-go zone 3km (1.8 miles) from the crater.

    #6 The Coronavirus – Needless to say, the coronavirus outbreak in China has been getting more headlines than anything else on this list.  The numbers continue to rise, and many are speculating that this could potentially become the worst global pandemic since the Spanish Flu pandemic of 1918.  In a desperate attempt to keep the truth from getting out, the World Health Organization is asking the major social media companies to censor their users…

    The World Health Organization has held talks with tech giants to stop the spread of coronavirus “misinformation,” despite the fact that some things once labeled “misinformation” have since turned out to be true.

    The meeting was organized by the WHO but hosted by Facebook at its Menlo Park campus in California. Attendees included representatives from Amazon, Twilio, Dropbox, Google, Verizon, Salesforce, Twitter, YouTube, Airbnb, Kinsa and Mapbox.

    #7 The African Swine Fever – “Pig Ebola” has already wiped out millions upon millions of pigs in China, and it has now spread to more than 40 other countries.  The price of pork is absolutely skyrocketing in China right now, and to help fill the demand the Chinese are increasingly importing pork from U.S. sources…

    Tyson Foods Inc. says it’s just starting to see the benefits of the African swine fever outbreak in China, which includes a 600% year-over-year increase in pork orders to China in the fiscal first quarter.

    #8 The H1N1 Swine Flu – Unlike the African Swine Fever, the H1N1 Swine Flu can actually kill humans.  In fact, it has already killed more people outside of China than the coronavirus outbreak has.  For instance, 13 people in Taiwan died from the virus in one recent week alone…

    As of now, the H1N1 virus is posing a great threat once again as it has claimed 13 lives in Taiwan in the last week. This virus is highly contagious and is known to spread from human to human. It is especially dangerous for those with a compromised immune system like those suffering from chronic medical conditions and long-term health conditions.

    #9 The H5N1 Bird Flu – This strain of the bird flu caused a massive global scare a number of years ago, and now it is experiencing a stunning resurgence.  China has had to kill thousands of chickens so far, and experts are warning that this outbreak could be just getting started…

    China also is reportedly dealing with an outbreak of the deadly H5N1 bird flu in chickens in the Hunan province, an area that borders the province where the coronavirus emerged, according to the South China Morning Post.

    As of Feb. 1, local authorities had culled 17,828 poultry after the H5NI outbreak, according to a statement by China’s Ministry of Agriculture and Rural Affairs.

    #10 The H5N8 Bird Flu – This strain is different from the H5N1 bird flu, but many believe that it is even more frightening.  It has started to pop up in numerous places around the globe, and experts were really surprised when it recently made an appearance in Germany…

    Germany has reported an outbreak of the highly pathogenic H5N8 bird flu virus in a backyard in the southwestern part of the country, the World Organisation for Animal Health (OIE) said on Monday.

    The virus killed 44 birds out of a flock of 69 in Bretzfeld, in the Baden-Wurttemberg region, the Paris-based OIE said, citing a report from Germany’s food and agriculture ministry.

    Can any of you remember a time when we have been hit by crisis after crisis like this all at once?

    2020 has certainly started off with quite a bang, and many expect global events to continue to accelerate.

    So hold on to your hats, because things are likely to get even crazier in the months ahead.


    Tyler Durden

    Tue, 02/18/2020 – 18:50

Digest powered by RSS Digest

Feb 18

Today’s News 18th February 2020

  • The Silent War On "Q" Continues
    The Silent War On "Q" Continues

    Authored by Deborah Franklin via AmericanThinker.com,

    We’re living in dramatic times that are difficult to understand. One way to try to interpret them is through the cryptic clues provided by Q, which appear on an anonymous online forum and imply top-secret knowledge of upcoming events.

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    As I wrote in my article “An Introduction to Q,”

    “Q’s followers believe that Q is a military intelligence operation, the first of its kind, whose goal is to provide the public with secret information… Q is a new weapon in the game of information warfare, bypassing a hostile media and corrupt government to communicate directly with the public.”

    It’s interesting to note that shortly after my article was published here, American Thinker suffered a series of unprecedented hacking attempts. Also noteworthy is that Twitter permanently shut down the account of Zero Hedge, a popular finance blog, two weeks after it posted my article.

    President Trump continues to bring attention to Q, repeatedly retweeting Q followers, featuring Q fans in his ad campaign, and making a public display of a “Q baby” at a rally. Yet the media never asks Trump the obvious question: What do you think about Q?

    Instead, the media keeps ratcheting up its attacks on Q and the ever-growing worldwide movement that Q inspires. On February 9, both the AP and New York Times published blistering anti-Q articles, claiming that Q promotes baseless, debunked far right conspiracies and accusing Q of inciting violence in deranged followers. The day before this latest media ambush, a massive cyber assault temporarily brought down 8kun, the message board on which Q posts. Ron Watkins, 8kun’s administrator, tweeted,

    “Attacks have been coming in all day. Very sophisticated and expensive attacks; the person paying for this likely has deep pockets.”

    At the same time that 8kun was attacked, X22 Report, which covers Q postings, also was bombarded. On its Twitter feed, the site wrote it was “being attacked from 54 different countries using hundreds of different IP addresses, I have never seen anything like it.”

    On February 12, in response to these events, Q posted,

    “Highly sophisticated ‘State-level’ attacks [v 8kun] followed by FAKE NEWS attacks [v Q] the next day? Coordinated? Ask yourself a simple question… why? It’s time to wake up.”

    In almost 4,000 posts, Q has painted a disturbing, multi-faceted portrait of a global crime syndicate that operates with impunity. In recent weeks, President Trump has grown more explicit about some of the syndicate’s crimes. Speaking to the National Governors Association, President Trump stated, in an almost casual, offhand manner, why the United States had recently upgraded its nuclear missile technology at great expense. “…we’re buying new, we have the super-fast missiles, tremendous number of the super-fast. We call them super-fast where they’re four, five, six, or even seven times faster than ordinary missiles. We need that because again, Russia has some. I won’t tell you how they got it. They got it supposedly from the Obama Administration when we weren’t doing it. And that’s too bad. It’s not good. But that’s how it happened.”

    The President’s lawyer, Rudy Giuliani, has also grown more specific in his accusations, tweeting “The Biden Family Enterprise has been selling his office for years. The corrupt media has been covering up. It was handed to me and I had the courage to reveal it knowing the Swamp would try to destroy me. I served my country. They are betraying it. I will not stop.”

    Q followers were not surprised by President Trump’s remarks or Giuliani’s charges, since they have probed into Q’s numerous clues about the treachery of America’s elite. The Q Army reads the headlines through a different lens than those who rely on the mainstream media for information. For instance, Q followers expected Jussie Smollett’s recent arrest on charges related to his alleged staging of a hate crime, and they anticipate his hoax will be tied directly to two failed presidential candidates and their political strategies.

    I would like to offer some Q references that may help to illuminate recent events and prepare us for future developments. With the defeat of the impeachment threat, President Trump appears to be launching significant countermoves against those he accuses of plotting a coup. Q followers anticipate that he will declassify sensitive government documents, revealing shocking crimes and collaborations. The exposed criminals are likely to respond with dangerous counterattacks, most of which are unseen by the public. As Q recently wrote, the silent war continues.

    Let’s take a look at some recent events, in light of Q’s messages.

    Trump Acquitted of Impeachment Charges: When Republicans lost the House of Representatives in 2018, many Q followers were dismayed. They feared the Democrats would use their new power to unleash disruptive investigations and push impeachment. Q responded several times that the Senate was the target, emphasizing that the Q team’s midterm election strategy centered on strengthening the Senate as part of a long-term plan. With President Trump emerging from the impeachment ordeal at his political zenith, Q’s confidence in the midterm election results continues to resonate.

    The Best Is Yet To Come: Trump’s New Reelection Theme: President Trump ended his recent State of the Union address by declaring, “The best is yet to come.” This statement, with its inherent optimism, appears to be central to his reelection message, and he and his team have deployed it several times.

    The President debuted this message on January 28 by concluding his massive rally in Wildwood, New Jersey with these exact words. However, Q followers were already familiar with the slogan, because Q had dropped it at 2:26 that same afternoon.

    Trump Hints at Tarmac Meeting Deal: On June 27, 2016, Bill Clinton and then-Attorney General Loretta Lynch held a supposedly impromptu meeting on her plane at Phoenix Airport, where they discussed (according to them) golf and grandchildren. Skeptics have long suspected that Clinton and Lynch were working out a deal in which Lynch agreed to drop the probe into Hillary Clinton’s email scandal in exchange for a payoff.

    On January 14, at his Milwaukee rally, President Trump offered some insight into the nature of the payoff, when he suggested that Bill Clinton promised Lynch a Supreme Court appointment, which would be conferred after Hillary’s expected victory.

    Q followers were already familiar with this scenario, because on February 6, 2018, Q had posted the following message about the Tarmac meeting: SC/LL deal > AS 187

    Here’s how some Q followers interpreted that message: The Supreme Court/Loretta Lynch deal was connected to the purported murder of Supreme Court Justice Antonin Scalia. (Note: 187 is police code for murder. Q often uses this term when discussing alleged Deep State murders.) Scalia died suddenly at a Texas ranch on February 13, 2016, and was declared dead of natural causes over the phone. No coroner or medical examiner ever saw him and no autopsy was performed.

    Trump accuses Adam Schiff of being “a very sick man.” President Trump has accused House Intelligence Chairman Adam Schiff of various acts of political chicanery, but in a January 26 tweet, he raised his criticism to another level: “Shifty Adam Schiff is a CORRUPT POLITICIAN, and probably a very sick man. He has not paid the price, yet, for what he has done to our Country!”

    The president’s words immediately evoked one of Q’s signature phrases, which Trump himself has also said: “These people are sick.” But moving from “these people” to the specific person of “Adam Schiff” marks another phase of disclosure. On January 31, 2018, Q dropped hints that Schiff committed serious criminal acts that connected to the Standard Hotel chain. Q directed attention to a California helicopter crash that had just killed Kimberly Watzman, General Manager of the Standard Hotel in West Hollywood, and asked: “What happened @ those hotels?” Perhaps some context for these potential criminal acts may be inferred from Schiff’s close friendship with Ed Buck, a major Democratic donor who was arrested in October 2019 for killing two men with drug overdoses in his apartment and almost killing a third. Schiff has also publicly praised his friend, Dr. Bruce Hensel, the NBC medical correspondent, who was arrested in 2019 for sex charges involving a 9-year-old girl.

    
Q has named this extraordinary time “The Great Awakening,” in which the world moves from “dark to light.” As the darkness of horrific elite secrets gives way to the light of public scrutiny, our fortitude will be tested. But Q assures us, “You are watching the systematic destruction of the OLD GUARD.” And when the news gets too frightening, it’s worth remembering Q’s oft-repeated directive: “Pray.” 


    Q posts are compiled here…


    Tyler Durden

    Mon, 02/17/2020 – 23:40

  • "Doomed To Failure": Bolton Excoriates Trump On Iran, N.Korea In First Post-Impeachment Appearance
    "Doomed To Failure": Bolton Excoriates Trump On Iran, N.Korea In First Post-Impeachment Appearance

    Trump’s former national security adviser John Bolton took his former boss’s foreign policy to task during comments made at Duke University Monday night — in his first public speech since the impeachment inquiry wrapped up, and at a sensitive moment his lawyers are still wrangling over the contents of his soon to published book. On this latter point, he briefly expressed simply that “I hope my book is not suppressed” and later said more sharply, “This is an effort to write history. We’ll see what comes out of censorship.”

    Evaluating the success of the administration’s Iran policy, Bolton said: “I think it’s failing because i don’t think it lives up to its bumper sticker slogan of maximum pressure. I don’t think we’re applying maximum pressure to Iran.” 

    However, he did hail the Soleimani strike in saying the now deceased IRGC Quds Force chief “deserved exactly what he got” but added, “The only quibble I have is it should’ve happened sooner.” But he cited as among significant “failures” the administration’s response or lack thereof to the IRGC’s accidental downing of Ukraine International Airlines Flight 752.

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    Image source: ABC

    Bolton also emphasized during the speech entitled “The National Security Challenge of 2020” his familiar theme going back to the Bush White House that “weapons of mass destruction” remain the most “severe” threat to US — especially those possessed by Iran and North Korea. 

    Specifically on North Korea, Bolton called the president’s attempts to bring Pyongyang in from the cold with direct negotiations “doomed to failure”. 

    Bolton viewed the whole initiative (for which he was largely sidelined from during the last months of his tenure as national security adviser) as having ultimately “wasted two years” and which simultaneously gave North Korea “two year pass.”

    Referring to the administration’s North Korea policy, Bolton told the audience that “it was perfectly evident it was going to fail.”

    “There is not a single piece of evidence that the government of North Korea has made a strategic decision to give up the pursuit of nuclear weapons,” he added

    On Iran, Bolton made clear he wanted the administration to take further steps.

    “I don’t think we are applying maximum pressure,” Bolton said.

    He said the sanctions enacted by the Trump administration have had “a very significant effect” but made clear he would like the US to explicitly push for regime change in the country. — CNN

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    Image source: AFP via Getty

    Of course, the Duke University audience was no doubt hoping for more personal anecdotes dishing on Trump and the prospect of addressing the Ukraine angle to the prior impeachment proceedings.

    As expected, Bolton spoke sparingly on this:

    Asked about Trump’s tweets about him, Bolton is reported to have said he could not comment, pending a White House review of the manuscript for his forthcoming book. “He tweets, but I can’t talk about it. How fair is that?” he said, according to one reporter present.

    When asked on Monday what it was like to staff Trump’s 2018 meeting with Putin in Helsinki, Bolton reportedly said: “To pursue the right policies for America, I was willing to put up with a lot.”

    “I’m not asking for martyrdom,” he added. “I knew, I think I knew, what I was getting into.”

    “For all the focus on Ukraine and impeachment trial: to me there are portions of the manuscript that deal with Ukraine — I view that as the sprinkles on an ice cream sundae, in terms of the book. This is an effort to write history. I did the best I can… We’ll see what happens with the censorship,” Bolton said.


    Tyler Durden

    Mon, 02/17/2020 – 23:15

  • Dominos Are Falling – China Shutdown To Crush India’s Already-Crumbling Economy
    Dominos Are Falling – China Shutdown To Crush India’s Already-Crumbling Economy

    The supply chain shock emanating from China to other Asia Pacific countries and Europe, could become a major headache for India.

    Bloomberg focuses on how an industrial shutdown of China’s economy has already had a profound effect on India’s economy and could get worse.

    Pankaj R. Patel, chairman of Zydus Cadila, said prices of medicine in India have exponentially jumped in the last several weeks, thanks to much of the medicine is sourced from China.

    The Indian pharmaceutical industry is experiencing massive disruptions that could face shortages starting in April if supplies aren’t replenished in the next couple weeks, Patel warned.

    He said prices of paracetamol, a common analgesic, have risen 40% in India, while some antibiotic medicines have soared 70% since Covid-19 broke out in China last month.

    Manufacturers in China have idled plants, and at least two-thirds of the economy is halted. Some factories came online last week with promises of full production by the end of the month, but for most factories, their resumption will likely be delayed. This will undoubtedly lead to medicine shortages in India in the coming months ahead.

    A new theme is developing from all this mayhem – that is the reorganization of complex supply chains out of China to a more localized approach to avoid severing. But in the meantime, these complex supply chains in India and across the world will experience massive disruption caused by the shutdown. All of this points to ugly end of globalization:

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    Pankaj Mahindroo, chairman of the India Cellular and Electronics Association (ICEA), said the wrecking of supply chains in China could soon have a devastating impact on India’s smartphone production. 

    Mahindroo represents companies including Foxconn, Apple Inc., Micromax Informatics Ltd., and Salcomp India, warned the “impact is already visible… If things don’t improve soon, production will have to be stopped.” 

    Already, the production of iPhones and Airpods has been reduced in China because of factory shutdowns.

    The closure of Foxconn plants in India would be absolutely devastating for Apple. 

    Apple produces iPhone XR in India. If the production of affordable smartphones is halted or reduced, the Californian based company could see full-year earnings guidance slashed. 

    Mohnidroo said if things don’t improve in the next couple of weeks, smartphone factories in India could start running out of “critical components like printed circuit boards, camera modules, semiconductors, resistors, and capacitors.” 

    A spokesperson for Xiaomi Corp.’s India unit said alternative sourcing attempts are underway to mitigate any supply chain disruption from China. 

    Even before all of this, India’s economy is rapidly decelerating into an economic crisis. 

    Former Indian Finance Minister Yashwant Sinha warned several months ago that the country is in a “very deep crisis,” witnessing “death of demand,” and the government is “befooling people” with its economic distortions  of how growth is around the corner. 

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    Supply chain disruptions are moving from East to West. It’s only a matter of time before production lines are halted in the US because sourcing of Chinese parts is offline. The disruptions of supply chains is the shock that could tilt the global economy into recession.  


    Tyler Durden

    Mon, 02/17/2020 – 22:50

  • US & China Lead Biggest Jump In World Defense Spending In 10 Years
    US & China Lead Biggest Jump In World Defense Spending In 10 Years

    Authored by Jason Ditz via AntiWar.com,

    New data from the International Institute for Strategic Studies (IISS) has shown a roughly 4% increase in military spending for 2019, the single largest rate of growth seen in the past 10 years.

    The increase is being driven in large part by the two largest military spenders in the world, the United States and China. Both nations increased their respective spending by 6.6%. The US alone increased spending $53.4 billion, which is itself almost as much as other major nations, like Britain, spend on their entire national defense budget.

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    Since the US is by far the biggest single spender on the military, it makes sense that their increase would drive an increase worldwide. China, though a distant second, appears to be trying to keep up with America in increasing their spending. Still, the US spends nearly three times as much as China annually.

    Spending was also on the rise across Europe, up 4.2% from the previous year, and at the highest levels since before 2008. The NATO spending increases which are driving this are the result of US demands.

    In this regard, the impulse to keep spending on the US front probably is not so shared in NATO, with many of the big economies in Europe, particularly Germany, resistant to surge spending to meet US expectations, with the public in such nations preferring to focus on their economy.

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    China’s People’s Liberation Army (PLA) at a military ceremony at Tiananmen Square.

    It’s hard to blame the public for resisting such spending increases, as most of Europe is not bordering any specific enemies, or even rivals, and has no reason to believe their military would have to engage in defensive operations.

    In NATO, the more likely result of such spending is to get convinced to send more troops to the Russian frontier, and then spend more money, continuing that cycle of escalation.

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    President Trump demands more spending out of NATO, however, and many nations are trying to placate him with their own modest increases. Where that ends is anyone’s guess, but the US long-term goal is to get Europe to spend vastly more, with the presumption they’ll be buying US made weapons.

    China’s own increases are driven primarily by tensions with the US, as the Pentagon makes much of challenging China in the South China Sea, and the surrounding area. China seems determined to deter any overt US actions, and so far the Pentagon just sends ships to make nominal challenges to Chinese claims.


    Tyler Durden

    Mon, 02/17/2020 – 22:25

  • "The Situation Is Evolving" – Apple Cuts Guidance Due To Virus Disruptions
    "The Situation Is Evolving" – Apple Cuts Guidance Due To Virus Disruptions

    Update (1830ET): Nasdaq Futures have re-opened and are trading down around 80 points…

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    *  *  *

    Surprise!

    Apple has issued a press released, admitting it does “not expect to meet the revenue guidance we provided for the March quarter” due to coronavirus related issues.

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    In other words, the guidance we issued 19 days ago – blowing off any impact from the virus – is completely worthless.

    Full Statement Below:

    As the public health response to COVID-19 continues, our thoughts remain with the communities and individuals most deeply affected by the disease, and with those working around the clock to contain its spread and to treat the ill. Apple® is more than doubling our previously announced donation to support this historic public health effort.

    Our quarterly guidance issued on January 28, 2020 reflected the best information available at the time as well as our best estimates about the pace of return to work following the end of the extended Chinese New Year holiday on February 10. Work is starting to resume around the country, but we are experiencing a slower return to normal conditions than we had anticipated. As a result, we do not expect to meet the revenue guidance we provided for the March quarter due to two main factors.

    • The first is that worldwide iPhone® supply will be temporarily constrained. While our iPhone manufacturing partner sites are located outside the Hubei province — and while all of these facilities have reopened — they are ramping up more slowly than we had anticipated. The health and well-being of every person who helps make these products possible is our paramount priority, and we are working in close consultation with our suppliers and public health experts as this ramp continues. These iPhone supply shortages will temporarily affect revenues worldwide.

    • The second is that demand for our products within China has been affected. All of our stores in China and many of our partner stores have been closed. Additionally, stores that are open have been operating at reduced hours and with very low customer traffic. We are gradually reopening our retail stores and will continue to do so as steadily and safely as we can. Our corporate offices and contact centers in China are open, and our online stores have remained open throughout.

    Outside of China, customer demand across our product and service categories has been strong to date and in line with our expectations.

    The situation is evolving, and we will provide more information during our next earnings call in April. Apple is fundamentally strong, and this disruption to our business is only temporary. Our first priority — now and always — is the health and safety of our employees, supply chain partners, customers and the communities in which we operate. Our profound gratitude is with those on the front lines of confronting this public health emergency.

    What is notable is the absence of a “but we’ll increase out share buyback program” rescue package for shareholders to rely on.

    Finally we note that the timing of this statement is anything but coincidence – on a market holiday in the US – as it gives the analyst community enough time to script their narrative for why this can all be discounted… or is more than priced in already… and/or will be erased thanks to an imminent v-shaped recovery or some such completely unknowable bullshit.

    Of course this is all great news for the stock – consider what happened the last time AAPL cut guidance…

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    The stock price doubled!

    With most markets still closed, we look to USDJPY for some idea of a reaction…

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    And it appears, Nasdaq Futs will open lower – but not dramatically so.


    Tyler Durden

    Mon, 02/17/2020 – 22:03

  • Beijing Cracks Down On VPNs Amid Growing Popular Backlash To CCP Censorship
    Beijing Cracks Down On VPNs Amid Growing Popular Backlash To CCP Censorship

    It looks like Beijing has finally grown tired of journalists like Epoch Times’ Jennifer Zeng circulating shocking videos depicting the true depth of the crisis on the ground in China – and the government’s almost unbelievably heavy handed response.

    For an example, see this video which Zeng tweeted yesterday: It’s relatively mild by outbreak standards.

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

    Weeks after Beijing ended its brief experiment with Internet “transparency” in the name of disseminating accurate info about the outbreak, the Financial Times reports that Beijing is once again trying to restrict its citizens’ access to the uncensored global internet.

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    China’s most popular VPN services, which allow foreign businesses and locals to circumvent internet censorship, have faced an avalanche of state-backed attacks in recent weeks, which is why many Chinese are finding it difficult to access sites like Google.

    Beijing’s “Great Firewall” typically automatically restricts VPN usage during “politically sensitive” periods like the anniversary of the “June 4th Incident.” And right on schedule, VPN provides have reported “an uptick of restrictions” in recent weeks.

    “We are aware of a new escalation in blocks in China, and our team is working around the clock to address the impact on connectivity,” according to ExpressVPN, which published a notice on its website Monday.

    Following the death of whistleblower Dr. Li Wenliang, a frustrated Chinese public demanded the government ease restrictions on speech. For a brief moment, the outpouring of frustration and rage directed at the Communist Party and its thuggish local enforcers threatened to inspire a Hong Kong-style protest movement, until a few well-placed scapegoatings helped the Politburo redirect public scorn at hapless local officials.

    First hand reports like this one have become increasingly rare in the Western press now that Beijing has restricted access for most western media organizations while flooding the region with 300 “journalists” dedicated to propagating the official narrative.

    Still, millions of Chinese are finding workarounds: Daily traffic to GreatFire’s FreeBrowser.org, a website that allows Chinese users to read foreign news websites, has roughly doubled since Jan. 25, two days after the great lockdown of Wuhan began.

    According to GreatFire’s Circumvention Central, the stability of Astrill, another big VPN service used in China, tumbled to a four-year low in January, another sign that Beijing has been increasing the pressure on VPNs.

    The number of people testing their VPNs using Circumvention Central has also increased in the last month, usually a sign that VPN users are experiencing problems. Astrill did not respond immediately to a request for comment.

    Of course, this is hardly the first time that China has cracked down on the use of unauthorized VPNs. Crackdowns were reported throughout the course of 2018 and 2017, according to ZDNet. Back in 2018, a crackdown crested with the removal of all VPN apps from Apple’s China App store that summer, while Beijing has ordered state-owned ISPs to “block” all VPN-related activity.

    Fortunately, in this tech savvy age, motivated people can typically find a way around these restrictions. But at the same time, there are millions of Chinese who are already too brainwashed by the propaganda to care.


    Tyler Durden

    Mon, 02/17/2020 – 22:00

  • IceCap Asset Management: The Invisible Zombie
    IceCap Asset Management: The Invisible Zombie

    Submitted by Keith Dicker of IceCap Asset Management

    “I’ll show you who I am”

    And with that one line – the world of invisibility was born.

    The 1933 blockbuster film, “The Invisible Man” launched a genre that would span decades, producing many enjoyable and many unenjoyable movies of things and people we can’t see. Next up was “The Invisible Man Returns”, followed by “The Invisible Man’s Revenge”, “The Invisible Boy”, “The Invisible Mom”, “The Invisible Mom 2”, and let’s not forget the Chevy Chase classic “Memoirs of an Invisible Man.”

    Through the humour, terror, and mystery, the one thing that was constant throughout these stories was – consistency.

    The consistency was in the way the story was told, the path it took and the usual predictable ending.

    Unseen and definitely unappreciated by most investors today, the global financial world is missing an important factor that is crucial to keeping the world humming along in a predictable pattern. A pattern that rewards success, punishes failure and then sets the scene to begin the cycle all over again.

    This missing factor is none other than the Invisible Hand.

    Unfortunately, the Invisible Hand is hard to see. It’s never discussed by the media, big banks, and certainly never discussed by the central banks – after all, they’re the ones who caused it to go missing in the first place.

    As you sit back to enjoy and appreciate this latest edition of the IceCap Global Outlook, we ask you to use your vision to see and understand why today’s markets have been displaced, and what happens with the next great story – The Return of the Invisible Hand.

    * * *

    The Recession

    Since 1967, the United States has experienced 7 different recessions. And since 1967, the Survey of Professional Forecasters collectively, have predicted exactly zero recessions.

    This 0% batting average can be interpreted two ways:

    1) Collectively, this group isn’t very good at their job.

    2) Forecasting or predicting recessions is next to impossible.

    Yet, the beat goes on.

    Recessions can be measured in different ways. The Professional Forecasters focus on a collective decline in industrial production, employment, real personal income and sales. A more common definition used by the big box banks and mainstream media is two consecutive quarters of negative GDP growth.

    Meanwhile the most popular definition of a recession is when YOU lose your job.

    What we do know, is that a normal economy moves in a cycle where there are highs and lows.

    The highs are the good times. While the lows are the bad times.

    Good times are followed by bad times

    To illustrate the typical economic cycle, consider the below chart. What’s really neat about the business cycle is that over time, it flows in a logical and somewhat predictable direction.

    When the good times roll, they really roll. Yet eventually, momentum runs out of the economy and the good times gradually slow to a point where good times turn into bad times. But then, slowly the bad times end, and a recovery and the beginning of the next good times begins again.

    Of course, to be more technical, the global economy is simply a function of changes in money supply and demand for credit.

    Yet, everyone who has ever studied economics eventually comes to the same realization – the economy absolutely moves in ebbs and flows, and eventually it is always guided by an invisible hand.

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    Now, those with an interest in economics are quick to recognize this “Invisible Hand” as the discovery by Scottish economist Adam Smith, as a way to describe how an economy will function if governments left people alone to buy and sell freely amongst themselves.

    If left alone, the prices of most goods and services would be determined by what people are willing (or able ) to pay. As an example, if all pizzerias are charging $20 for a pie eventually someone will enter the market and make the equivalent quality pizza and charge $15.

    This enterprising pizzeria will take customers away from everyone else, until they too decrease their prices to match the  $15. Alternatively, another new pizzeria might look at this market and determine they can make a significantly better pie and charge $25. This enterprising pizzeria will take customers away from everyone else until they begin to match the higher quality.

    This movement of people making and eating pizza is being guided by an invisible hand – and it works.

    Now, let’s consider what happens to the invisible hand if our dear governments saw what was happening and for whatever reason declared by law that no pizza could ever be sold for more than $10.

    In this case, several things happen.

    For starters, the pizzerias will have to find ways to reduce their costs to compensate for the lost revenues per pizza sold.Some will succeed but by only using even lower quality ingredients. Others will simply take a bow and close up shop.

    What happens next, is similar to what is happening in the financial world today.

    Now, as governments eat pizza like everyone else, eventually they realize that the quality of pizza has deteriorated and there are less pizzerias than what previously existed.

    Never to let a crisis go to waste, governments next announce they’ll pay each pizzeria $10 per pizza to compensate them for the lost revenues from not being able to charge the original price of $20.

    Two things have now happened.

    First, government involvement in setting prices has completely distorted the pizza industry. Second, the “invisible hand” has been completely blocked out and unable to keep the market in balance.

    Today, the exact same story is playing out in the world of interest rates.

    When the financial world blew-up in 2008-09, governments and central banks around the world made a coordinated decision to become involved in uncountable ways to affect the monetary system.

    And in its most simplest forms – central banks have decided that instead of letting Adam Smith’s invisible hand determine the correct price of money (ie. interest rates), they would set the price of money. This price of money has ranged from NEGATIVE % across Europe and Japan, to near ZERO % across everywhere else.

    This crowding out effect is having two effects on our money world:

    One – the economic cycle has been temporarily suspended.

    Two – zombie companies and governments now roam the lands.

    Recall how on page 5 we showed how a regular economic cycle weaves and bobs over time.

    The interference in interest rates by central banks has completely flattened cyclical economic movements and instead has changed the economic cycle to appear as a flat line – one characterized as having no growth and no contractions.

    Some might say this is a good thing. After all, it would mean steady eddy economies, one characterized by consistency in everything. Yet, a successful flat-lined economy is one that doesn’t exist now, it hasn’t existed in the past and will not exist in the future.

    For those in disagreement, note that this kind of a controlled economy has been tried numerous times over the years. Those that tried include:

    • The Soviet Union (Marxism-Leninism)
    • Germany (Nazi National Socialism)
    • China (Maoism Communism)
    • Cuba (Communism)
    • Venezuela (National Socialism)

    Each of these failed states attempted to eliminate the invisible hand from doing what it does best – rewarding economic  success, or put another way, not rewarding economic failure.

    Unknown to most today, the global financial system has taken on economic characteristics of socialism/communism. And it is happening right before your eyes in the form of central banks setting interest rates at zero % and negative %, as well as their policies of printing money to help stimulate the economy.

    These monetary policies have been ongoing now globally for 10 years and while the creators of these policies hail them as a resounding success – others declare the opposite has happened.

    The Invisible Zombie

    From an economic perspective, 10 years of zero/negative rates combined with trillions in money printing has only achieved muted economic growth.

    • Europe is unable to achieve consistent growth >1.5%.
    • America is unable to achieve consistent growth >2.5%.
    • Japan is unable to achieve consistent growth >1%.
    • China is unable to achieve consistent “official” growth >6%.

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    But this attempt to break the invisible hand is also having another far more devasting effect that is never discussed by the big box banks, the mainstream medias and the mutual fund salespeople – 1000s of companies and governments have turned into financial zombies.

    From a corporate perspective, the lack of growth is causing many companies the inability to generate enough revenues and profits to not only pay off their debt, but to simply pay the interest on their debt. The only reason they remain alive is due to interest rates being so low, that interest owed can be met by borrowing even more. Once the invisible hand returns (it always does), interest rates will surge higher, making it impossible for most of these companies to operate with their debt loads.

    And in case you’re wondering – these borrowings by these zombie companies are actually bonds.

    And guess who owns these bonds from these zombie companies – many of the new bond funds like those described on page 3. Put another way, bonds from zombie companies are also known as junk bonds which are wrapped up nice and neat and sold to investors as high yield bonds.

    Other forms of bonds at risk include leveraged loans, and private credit. Beware – bond market risk comes in several forms.

    The absence of the invisible hand is not only setting up the most conservative investors with unrecoverable future losses, but it’s also wreaking havoc within the sharpest and brightest minds on Wall Street.

    As you can imagine – the world of finance is complicated.

    There are many markets, in many currencies with all trading in either public or private transactions.

    And within each of these many markets, there are many factors that have either a material or immaterial impact on pricing. And to make matters even more confounding, there are times when the material factors are material and other times when these very same factors are immaterial.

    However – there is always one factor that plays a significant role in helping market participants (and the invisible hand) determine an appropriate price.

    This factor is interest rates.

    Read the full report below.


    Tyler Durden

    Mon, 02/17/2020 – 21:35

  • Over 2,000 Former DOJ Officials Call On Barr To Resign Over Roger Stone Case
    Over 2,000 Former DOJ Officials Call On Barr To Resign Over Roger Stone Case

    Over 2,000 former Justice Department officials have called on Attorney General William Barr to step down after he stepped in last week to rescind a sentencing recommendation of 7-9 years filed by four anti-Trump career prosecutors, resulting in their resignations.

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    “It is unheard of for the Department’s top leaders to overrule line prosecutors, who are following established policies, in order to give preferential treatment to a close associate of the President, as Attorney General Barr did in the Stone case,” wrote the former DOJ officials in a Sunday letter. “It is even more outrageous for the Attorney General to intervene as he did here — after the President publicly condemned the sentencing recommendation that line prosecutors had already filed in court.”

    “Each of us strongly condemns President Trump’s and Attorney General Barr’s interference in the fair administration of justice,” the letter continues, adding that those actions “require Mr. Barr to resign.”

    Last Tuesday, AP reported that the Justice Department would “take the extraordinary step of lowering the recommended prison time for Roger Stone, an ally of President Donald Trump, a federal official said Tuesday.”

    According to  a Fox News source, however, the DOJ felt the original recommendation was “extreme, excessive, and grossly disproportionate” to Stone’s crimes.

     


    Tyler Durden

    Mon, 02/17/2020 – 21:09

  • Would We Still Have Power & Water If We Had A Massive Coronavirus Quarantine In The US?
    Would We Still Have Power & Water If We Had A Massive Coronavirus Quarantine In The US?

    Authored by Selco Begovic and Daisy Luther via The Organic Prepper blog,

    How long do you think a pandemic quarantine could go on with power, running water, the internet, and trash pick-up continuing to run as normal?

    If Covid-19 (also known as the Wuhan coronavirus or nCoV-2019) were to spread where you live as it has in China, it’s possible that extreme measures could be taken. Possibly even a China-style lockdown, where people are told to stay in their homes and where businesses are closed. I’m referring to something much more extreme than just a handful of us self-isolating. 

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    While I certainly hope such a situation is unlikely, it’s something we should all consider a possibility and get  prepared for, just in case. Considering whether or not this would be an off-grid scenario would play an extremely important part in your preparations.

    Selco and I had a very interesting chat about this after I’d raised the point in a group discussion. I thought you might be interested in our thoughts. Of course, there’s no way to know exactly how this might go down, so it’s pure speculation on our part based on the research of similar situations, knowledge of our systems, and personal experiences.

    Would we have utilities and services during a quarantine scenario?

    Daisy’s Thoughts

    A lot of things are automated, which makes me believe we could potentially have a month or two of relative normalcy with regard to utilities, even if folks aren’t going to work. Garbage pickup would be another matter.

    First things first, electrical power, natural gas, water, and the internet could run a long time automatically or with just a bit of input from someone on a computer. A pandemic isn’t going to fry our circuitry like an EMP would, for example. There’s nothing general-infrastructure-wise that would immediately compromise these utilities.

    But this assumes that everything besides the pandemic is smooth sailing – that we won’t have any tornadoes, any hurricanes, any blizzards, any earthquakes, unfortunate bolts of lightning, or accidents. And it also omits manmade problems like riots that damage the infrastructure or even deliberate sabotage.

    In a full-on pandemic, there’s likely going to be nobody to go out there and repair potential damage. And it’s possible that even if people were willing, they might not have access to the necessary supplies or equipment if these are items that they get on a “just-in-time” basis.

    As for water, it could run for a long time but it might not be safe to drink. We’d need to be alert that there’s nobody there testing the tap water and adding chemicals. I don’t love chemicals like fluoride in my water but I do love essential chemicals better than I like amoebic dysentery and shigellosis and cholera. That being said, even if the water wasn’t drinkable right from the tap, it would certainly make life easier if folks not on septic systems could still flush their toilets, and water could be purified in a multitude of different ways.

    The government would want utilities to remain functional.

    Also, the government is going to WANT people to have utilities in the event of any kind of quarantine. People who can zone out in front of the television or play video games are going to be a lot tamer and easier to manage than people who are detoxing from their cell phones and Facebook and 24-7 television. If there’s a way to keep the lights on, I feel fairly confident the government would prefer that.

    Karl Marx once said religion was the opiate of the masses. These days, I think television and Netflix wear that crown.

    It also makes it easier for them to whisper sweet nothings of propaganda into our homes. “Don’t worrrryyyyy. It’s going to be okaaayyyyy. We’re here to heeelllppp.”

    Governments love stuff like that.

    Garbage pick-up

    Garbage pick-up is another matter, and a very worrisome one. If we’re all confined to our homes, who is going to pick up the trash? Will garbage collectors be issued protective suits? It’s even possible that the military would be called in to perform tasks like this due to the risk of trash that could spread disease.

    I’d imagine that out of all things, garbage would be one of the most likely to contain infectious materials – tissues from runny noses, paper plates folks have eaten from, all the stuff possible infected people had touched.

    In videos from China, I haven’t seen a lot of trash piling up, so there, it appears that particular system is still running.

    However, trash pick-up is what I would expect to be the first thing to go.

    Will it come to this?

    This is not a question that anyone could definitively answer.

    It’s just like the utilities. What are the concurrent factors? What would have to happen for this to blow up and explode across the US as it has in China? What would have to happen to stop it from doing that? What are the wild card events that could hasten the spread? (Mutation, the holidays, another illness spreading that weakens immune systems, a disaster that compromises us to the point we can’t shelter in place?)

    Because of the potential for this, we should focus on being prepared. (This book is an excellent resource specific to the Wuhan coronavirus.)

    Could it happen? Yes.

    Will it happen? Nobody knows.

    Would we have utilities and services during a quarantine scenario?

    Selco’s Thoughts

    A good question is what would happen with electric power and all other utilities once the SHTF.

    And yes answer is not simple. It is based on type of event and severity of the event, but I think we can have some good guesses about it.

    Utilities

    Power, running water, communications (internet, cell phones…) and similar utilities up to waste management in all modern societies are brought to an advanced level of functioning.

    All that is so “modernized” in a way that most of us usually do not notice or actually do not care how it is being delivered to us. People don’t care how these things work.

    I also do not know in depth how all that works, but I know that most of the utilities today are being brought to us in a very automated and interconnected way.

    So, as a result, it works good, until it does not.

    I think the price for that is the fact that when ONE thing goes out soon another thing will go out too. Even if something goes out FAR from you, it may still mean it easily may go out at your home.

    Maintenance

    Do not forget, things (services) no matter how modernized need to be maintained, so, if there are no people around to do maintenance, services will not work.

    It depends on how bad the event is, and the control the government has over the event, and the society in which the event happening. It is a question of are people gonna be there to maintain services.

    As an example, if some serious event is happening, are people willing to go maintain services or they are more willing to go home and protect their loved ones? They are all just humans, do not forget.

    People

    Also, if there is still a system functioning, the government or some kind of system, does it have enough power to FORCE people to maintain services? People will want to go home to their families.

    The important fact is: if the event happening here is serious enough to bring problems to utility services, it is probably serious enough to make other services like the police force or medical services no longer working. So, as a result, the security situation will be deteriorated, so that is another obvious reason why people would want to be more with their families instead of at their job.

    A deteriorating situation with utilities will usually go with a deteriorating situation in behavior between people, so it is not like our only problem will be city services and everything else will be fine at home (and safe).

    Now, this all may be different in different scenarios, I am talking about a complete or partial collapse of system.

    The system

    In what kind of system you are living?

    Is that system going to implement very harsh measures in order to maintain “things going on”?

    You can not compare a probable situation in your country with a situation happening in another country if the systems are completely different.

    If you are living in a system where you were raised to trust blindly in it, without too many freedoms (or any), with very hard punishments for not obeying, it may result in a very disciplined response in hard situations, both because of mentality of people and also because of fear from punishment. China has that kind of system.

    In the end, I  do not have a clue how long utilities would last in your case wherever you are. I know in my case, the system and utilities would fall apart in a matter of a few weeks, and people would simply go home to their families because through experience, they know our system is fragile. They know it does not care for people, and it can turn against us very fast. And also people are kinda ready to survive without the help of the system. Or at least they are ready to try.

    You alone can figure that how things would work in your case.


    Tyler Durden

    Mon, 02/17/2020 – 20:45

  • Pier 1 Files For Bankruptcy After Last-Ditch Effort To Cut Costs Fails
    Pier 1 Files For Bankruptcy After Last-Ditch Effort To Cut Costs Fails

    Another retailer has failed in the “greatest economy ever,” as more than 12,000 stores closed in 2019, and mall vacancy rates across the country hit 8-year highs. 

    Home decor and furniture retailer Pier 1 Imports closed 450 out of 942 stores last month, a last-ditch effort to save itself from collapse. Fast forward one month, the retailer has filed for Chapter 11 bankruptcy and has prepared for a sale. 

    The retailer has struggled to adapt to an evolving retail market with new dominance seen by e-commerce giants Amazon and Wayfair. A weakening consumer base with insurmountable debts has weighed on home goods purchases. 

    Pier 1 CEO and CFO Robert Riesbeck said in a statement released on Monday that the decision to file for Chapter 11 will give the company “time and financial flexibility” to prepare the company for a sale.

    “We are moving ahead in this process with the support of our lenders and are pleased with the initial interest as we engage in discussions with potential buyers,” Riesbeck said. 

    Pier 1 intends to have a “court-supervised sale process and complete the sale through a Chapter 11 plan” by March 23. 

    Pier 1 listed assets and liabilities of about $500 million and has secured $256 million of debtor-in-possession financing from Bank of America Corp., Wells Fargo & Co., and Pathlight Capital LP.

    The retail apocalypse is expected to gain momentum in 2020 as mall vacancy rates are already at 8-year highs. Last year, retailers shuttered a record number of stores, nearly 12,000 by 4Q. 

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    Mapping out the retail chain chapter 11 filings in terms of aggregate liabilities for 2019, one can see how bankruptcies soared in 1Q and then erupted again in the back half of the year (data via Reorg First Day). 

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    Retail bankrupticies over the last half decade have been nothing short of astonishing. 

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    Talking points from the Trump administration have said since unemployment is low, the consumer is healthy, and this means the economy is roaring. But we all know the consumer is taking on record amounts of debt at a time when the economy is quickly decelerating. The jobs market is slowing, and consumer trends suggest a period of weakness is ahead. 

    To sum up, the retail apocalypse has yet to peak, store closings and bankruptcies are expected to continue through the year. 


    Tyler Durden

    Mon, 02/17/2020 – 20:20

  • US Operational Weather Prediction Is Crippled By Inadequate Computer Resources
    US Operational Weather Prediction Is Crippled By Inadequate Computer Resources

    Via Cliff Mass Weather Blog,

    U.S. global numerical weather prediction has now fallen into fourth place, with national and regional prediction capabilities a shadow of what they could be.

    There are several reasons for these lagging numerical weather prediction capabilities, including lack of strategic planning, inadequate cooperation between the research and operational communities, and too many sub-optimal prediction efforts.

    But there is another reason of equal importance: a profound lack of computer resources dedicated to numerical weather prediction, both for  operations and research.

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    The bottom line:  U.S. operational numerical weather prediction resources used by the National Weather Service must be increased 10 times to catch up with leading efforts around the world and 100 times to reach state of the science. 

    Why does the National Weather Service require very large computer resources to provide the nation with world-leading weather prediction?

    Immense computer resources are required for modern numerical weather prediction.  For example, NOAA/NWS TODAY is responsible for running:

    • A global atmospheric model (the GFS/FV-3) running at 13-km resolution out to 384 hours.

    • Global ensembles (GEFS) of many (21 forecasts) forecasts at 35 km resolution

    • The high-resolution Rapid Refresh and RAP models out 36 h.

    • The atmosphere/ocean Climate Forecast System model out 9 month.s

    • The National Water Model (combined WRF and hydrological modeling)

    • Hurricane models during the season

    • Reanalysis runs (rerunning past decades to provide calibration information)

    • Running the North American mesoscale model (NAM)

    • Running the Short-Range Ensemble Forecast System (SREF)

    This is not a comprehensive list.  And then there is the need for research runs to support development of the next generation systems.  As suggested by the world-leading European Center for Medium Range Weather Prediction, research computer resources should be at least five times greater than the operational requirements to be effective.

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    NY Times Magazine: 10/23/2016

    How Lack of Computing Resources is Undermining NWS  Numerical Weather Prediction

    The current modeling systems (some described above) used by the National Weather Service are generally less capable then they should be because of insufficient computer resources.  Some examples.

    1.  Data Assimilation.  The key reason the U.S. global model is behind the European Center and the other leaders is because they use an approach called 4DVAR, a resource-demanding technique that involves running the modeling systems forward and backward in time multiple times.  Inadequate computer resources has prevented the NWS from doing this.

    2.  High-resolution ensembles.   One National Academy report after another, one national workshop committee after another, and one advisory committee after another has told NWS management that the U.S. must have a large high-resolution ensemble system (at least 4-km grid spacing, 30-50 members) to deal with convection (e.g., thunderstorms) and other high-resolution weather features.  But the necessary computer power is not available.

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    European Center Supercomputer

    3.  Global ensembles.  A key capability of any first-rate global prediction center is to run a large global ensemble (50 members at more), with sufficient resolution to realistically simulate storms and the major impacts of terrain (20 km grid spacing or better).  The European Center has a 52 members ensemble run at 18-km grid spacing.  The U.S. National Weather Service?  21 members at 35-km resolution.  Not in the same league.

    I spend a lot of time with NOAA and National Weather Service model developers and group leaders.  They complain continuously how they lack computer resources for development and testing.  They tell me that such resource deficiency prevents them from doing the job they know they could. These are good people, who want to do a state-of-the-art job, but they can’t do to inadequate computer resources.

    NOAA/NWS computer resources are so limited that university researchers with good ideas cannot test them on NOAA computers or in facsimiles of the operational computing environment.  NOAA grant proposal documents make it clear:  NOAA/NWS cannot supply the critical computer resources university investigators need to test their innovations (below is quote from a recent NOAA grant document):

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    So if a researcher has a good idea that could improve U.S. operational weather prediction, they are out of luck:  NOAA/NWS doesn’t have the computer resources to help.  Just sad.

    U.S. Weather Prediction Computer Resources Stagnate While the European Center Zooms Ahead

    The NOAA/NWS computer resources available for operational weather prediction is limited to roughly 5 petaflops (pflops).   Until Hurricane Sandy (2010), National Weather Service management was content to possess one tenth of the computer resources of the European Center, but after the scandalous situation went public after that storm (including coverage on the NBC nightly news), NOAA/NWS management managed to get a major increment to the current level–which is just under what is available to the European Center.

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    Image courtesy of Rebecca Cosgrove, NCEP Central Operations

    But the situation is actually much worse than it appears.   The NWS computer resources are split between operational and backup machines and is dependent on an inefficient collection of machines of differing architectures (Dell, IBM, and Cray).  There is a bottleneck of I/O (input/output) from these machines (which means they can’t get information into and out of them efficiently), and storage capabilities are inadequate.

    There is no real plan for seriously upgrading these machines, other than a 10-20% enhancement over the next few years.

    In contrast, the European Center now has two machines with a total of roughly 10 pflop peak performance, with far more storage, and better communication channels into and out of the machine.

    And keep in mind that ECMWP computers have far few responsibilities than the NCEP machines.  NCEP computers have to do EVERYTHING from global to local modeling, for hydrological prediction to seasonal time scales.  The ECMWF computers only have to deal with global model computing.

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    To make things even more lopsided, the European Center is now building a new computer center in Italy and they recently signed an agreement to purchase a new computer system FIVE TIMES as capable as their current one.

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    They are going to leave NOAA/NWS weather prediction capabilities in the dust.  And it did not have to happen.

    Fixing the Problem

    Past NOAA/NWS management bear substantial responsibility for this disaster, with Congress sharing some blame for not being attentive to this failure.  Congress has supplied substantial funding to NOAA/NWS in the past for model development, but such funding has not been used effectively.

    Importantly, there IS bipartisan support in Congress to improve weather prediction, something that was obvious when I testified at a hearing for the House Environment Subcommittee last November.  They know there is a problem and want to help.

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    There is bipartisan support in Congress for better weather modeling

    A major positive is that NOAA is now led by two individuals (Neil Jacobs and Tim Gallaudet), who understand the problem and want to fix it. And the President’s Science Adviser, Kelvin Droegemeier,  is a weather modeler, who understands the problem.

    So what must be done now?

    (1)  U.S. numerical prediction modeling must be reorganized, since it is clear that the legacy structure, which inefficiently spreads responsibility and support activities, does not work.  The proposal of NOAA administrator Neal Jacobs to build a new EPIC center to be the centerpiece of U.S. model development should be followed (see my blog on EPIC here).

    (2) NOAA/NWS must develop a detailed strategic plan that not only makes the case for more computer resources, but demonstrates how such resources will improve weather prediction.  Amazingly, they have never done this.  In fact, NOAA/NWS does not even have a document describing in detail the computer resources they have now (I know, I asked a number of NOAA/NWS managers for it–they admitted to me it doesn’t exist).

    (3)  With such a plan Congress should invest in the kind of computer resources that would enable U.S. weather prediction to become first rate.  Ten times the computer resources (costing about 100 million dollars) would bring us up to parity, 100 times would allow us to be state of the science (including such things as running global models at convection-permitting resolution, something I have been working on in my research).

    Keep in mind that a new weather prediction computer system would be no more expensive that a single, high tech jet fighter.  Which do you think would provide more benefit to U.S. citizens?  And remember, excellent weather prediction is the first line of defense from severe weather that might be produced by global warming.

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    82 million dollars a piece

    (4)  Future computer resources should divided between high-demand operational forecasting, which requires dedicated large machines, and less time-sensitive research/development runs, which could make use of cloud computing.  Thus, future NOAA computer resources will be a hybrid.

    (5)  Current operational numerical prediction in the National Weather Service has been completed at the NCEP Central Operations Center.  This center has not been effective, has unnecessarily slowed the transition to operations of important changes, and must be reorganized or replaced with more facile, responsive entity.

    U.S. citizens can enjoy far better weather forecasts, saving many lives and tens of billions of dollars per year.   But to do so will require that NOAA/NWS secure vastly increased computer resources, and reorganize weather model development and operations to take advantage of them.


    Tyler Durden

    Mon, 02/17/2020 – 19:55

  • China's Latest Data Fabrication: Home Prices "Increased" Even As Largest Home Developer Offers 25% Discounts
    China's Latest Data Fabrication: Home Prices "Increased" Even As Largest Home Developer Offers 25% Discounts

    There has been a slew of openly bizarre, if not outright ridiculously manipulated and fabricated data out of China in the past month – which is to be expected by an authoritarian regime that for much of January arrested anyone who “leaked” the facts about the deadly coronavirus pandemic which Beijing was hoping to cover up until it simply became far too big – but the latest house price “data” may have been the straw that broke the camel’s back.

    Overnight, the National Bureau of Statistics reported that the latest 70-city housing price data showed that in January, the average home price appreciation in the primary market was 0.4% in January, the identical same pace as December, despite tens of millions of Chinese citizens living under quarantine or some form of lock down. Even more surreal, the number of cities with housing price increases was higher in January – which China’s economy ground to a halt ahead of both the Lunar New Year and the subsequent coronavirus chaos – than in December.

    Here are the details according to Beijing: Commercial housing prices in the primary market in the 70 cities tracked by China’s National Bureau of Statistics (NBS) (weighted by population) rose 0.4% month-over-month in January after seasonal adjustment, same as December. Property price appreciation was faster in tier 1 cities and unchanged in tier 2/3 cities, while price declines narrowed in tier 4 cities.

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    It gets better: out of the 70 cities monitored, 60 cities saw seasonally adjusted housing prices increase in January (53 cities saw price increase in December last year.) On a year-over-year, population-weighted basis, in the primary market, housing price appreciation was 6.2% in January in the 70 cities, slower than 6.5% in December.

    That, in a nutshell, is the official version.

    Meanwhile, in the real world outside of Beijing’s excel spreadsheets and goalseek models (as a reminder, and as we wrote three years ago, “the Fate Of The World Economy Is In The Hands Of China’s Housing Bubble“, as the bulk of China’s net worth is not in the financial market but in real estate), China’s biggest property developer Evergrande Group announced on Sunday that amid tumbling demand, it would launch “great incentives” to lure domestic consumers via online subscriptions starting Tuesday, a “self-rescue” promotion which analysts said would help shore up the sluggish domestic housing market in February amid the novel coronavirus outbreak.

    Paradoxically, even as Beijing reports a sequential increase in home prices, Evergrande will offer a 25 percent discount for consumers who purchase housing units, including apartments and office buildings, from Tuesday to February 29. The discounts will continue and be adjusted to 22% off from March 1 to 31.

    Putting the move in context, “it will be the largest incentives the firm has offered in its business history, Liu Xuefei, vice president in charge of sales with Evergrande, told an online meeting on Sunday”, according to the Global Times.

    But why offer the biggest incentive in firm history if the housing market is firing on all cylinders as China’s NBS reported, even as tens of millions of people are threatened with arrest if they so much as exit their apartments?

    Don’t answer: that’s rhetorical.

    Some more details on Evergrande’s panicked sales promotion via the Global Times:

    Since Evergrande started online sales promotion Thursday amid the novel coronavirus outbreak, the number of apartments subscribed online was 47,500 units from more than 600 housing projects the company has nationwide, worth 58 billion yuan ($8.3 billion), according to the company.

    Consumers who pay 5,000 yuan ($715.6) down payments and sign subscription books on the company’s online platform Hengfangtong, can preorder housing resources from projects the company has across the country, said Evergrande.

    From the day that consumers sign contracts until May 10, they can enjoy a right to buy at the lowest price – if the price on the home they buy goes down, they can obtain the difference and can return the apartment.

    “Online promotions by real estate companies do not affect the domestic housing market that much, but if one can preorder an apartment with a 5,000-yuan down payment, the stimulus will be quite large and will attract many first home buyers who have rigid demand,” Yan Yuejin, research director at Shanghai-based E-house China R&D Institute, told the Global Times on Sunday.

    “I found Evergrande’s promotion ad on WeChat moments and the incentives are quite attractive. I cannot remember such large discounts a Chinese developer offered in recent years,” a Beijing resident surnamed Lei in her 30s told the Global Times on Sunday.

    One would almost think that Evergrande would not be offering such a giant discount if the housing market was doing as well as China’s official indicated. Almost.

    As the Global Times concludes, Evergrande’s incentives “will help it drive sales volume and many other domestic housing developers are more likely to follow suit, experts said.”

    Of course, the communist party’s populist mouthpiece is correct, but a familiar question emerges: just what will be the full extent of the coronavirus damage on China’s housing market, when as even Goldman admits, “the outbreak of coronavirus suppressed property transaction volumes in February” and “daily property transaction volume remained low in top tier cities in the first half of February, and total transaction volume in 30 major cities were less than 10% of what the usual seasonal pattern would suggest after the Chinese New Year.”

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    Speaking to the Global Times, Yan Yuejin, research director at Shanghai-based E-house China R&D Institute, who described Evergrande’s new policy as “self rescuing,” noted that instead of waiting for government support policies, domestic real estate companies should take the initiative to actively reduce housing inventories and stabilize their cash flow.

    Is that a tacit admission that China will not be bailing out the housing market this time around?

    In any case, in light of the above data one can see why Beijing is in such a rush to force the country’s 1.4 billion residents and countless (zombie) businesses to pretend that the epidemic is over (which ifs one believes China’s fake infection data, it almost is) and for people to get back to business as usual. The alternative is not only banks being flooded with trillions in bad loans, but China’s biggest household asset, real estate, getting a crash course in price discovery under a severe crisis. We already know that with the Chinese economy on lock down for two weeks after the Lunar new year, the clearing price is now roughly 25% below where it was just a month ago (and a far cry from the 0.4% sequential increase according to the NBS). Will it be 50% in another two weeks, then 75% two more weeks after that, and so on?

    For the sake of Xi Jinping’s dictatorship, one can only hope that if the coronavirus epidemic persists – and any fake news that the virus is no longer a threat will be promptly refuted as new cases break out in work places across the country – that Beijing can find the tens of trillions in dollars, yuan or both it will need to bail out not only China’s banking system, but the country’s housing market as well.


    Tyler Durden

    Mon, 02/17/2020 – 19:30

  • US Breaks Cruise Ship Quarantine, Flies 13 Infected Americans To Omaha Facility
    US Breaks Cruise Ship Quarantine, Flies 13 Infected Americans To Omaha Facility

    While China does everything in its power do demonstrate that the number of new cases in both Hubei province where the coronavirus epicenter of Wuhan is located, and across China, is declining with every passing day in a sign that the epidemic is being ringfenced and is gradually coming under control – whether people on the ground actually believe the government which for at least the first three weeks of the breakout was lying and arresting anyone who spread facts about the deadly disease is a different matter entirely and will manifest itself in how quickly China can return to normal – attention has gradually moved to the spread of the virus offshore, where the number of new cases is starting to turn exponential.

    As the chart below shows, after growing at a modest pace, the number of people infected outside of the mainland is now accelerating at an alarming pace.

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    But one rather stunning fact when analyzing the offshore progression of the disease, is that there are now more cumulative coronavirus cases on just one cruise ship – the infamous Diamond Princess which has been quarantined in Japan for the past two weeks – then there are in all other localities outside of China (which begs the question just how many people are infected around the globe and have so far avoided detection).

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    As a reminder, the Princess Cruises ship was carrying 2,666 guests and 1,045 crew when it set sail and was quarantined after 10 cases of coronavirus were reported Feb. 4. Since then the number of cases on board has exploded, and on Monday alone, Japan announced an additional 99 infections on the Diamond Princess, raising the ship’s total number of cases to 454. And since most of the people on the ship have yet to be tested, the real number of infections may not be known for days.

    Where things gets problematic, is that whereas until now most of those on board the cruise ship had remained in isolation, the self-imposed quarantine is now over, and on Sunday, fourteen evacuees from the Diamond Princess were allowed to fly back to the United States Sunday despite testing positive for coronavirus, the U.S. State Department and Health and Human Services said in a joint statement. Why were they released? Because supposedly they were not symptomatic, and in a very ominous twist, they had tested negative initially!

    “These individuals were moved in the most expeditious and safe manner to a specialized containment area on the evacuation aircraft to isolate them in accordance with standard protocols,” the statement, published Sunday, read.

    The State Department was unaware the individuals had coronavirus when they were being removed from the ship; they had tested negative just a few days before, Robert Kadlec, the assistant secretary for preparedness and response at the U.S. Department of Health & Human Services, said on a phone call with reporters.

    “If those results had come back four hours earlier before we’d started to disembark the ship and before these people were evacuees within an evacuation system, then it would’ve been a different discussion.” Dr. William Walters, director of operational medicine at the U.S. Department of State, said on the call.

    In other words, the quarantine that had isolated the biggest incubator of coronavirus cases outside of Wuhan was broken simply because an initial test had given a false negative, and subsequents test confirmed that at least 14 indeed had the coronavirus.

    Kadlec said that individuals received multiple screenings when moving from ship to bus to plane and a more extensive medical assessment upon arrival.

    In any case, the Diamond Princess quarantine is now broken, and two charter flights carrying at least 14 infected passengers landed at military bases in California and Texas overnight, starting the clock on a 14-day quarantine period to ensure those passengers don’t have coronavirus. In total, approximately 380 Americans were on board the Diamond Princess ship for the duration of the cruise and quarantine at sea.

    One plane carrying American passengers touched down at Travis Air Force Base in northern California just before 11:30 p.m. Sunday local time. A second flight arrived at Lackland Air Force Base in Texas around 2½ hours later, early Monday.

    The California flight had 177 people on it, seven of whom tested positive for coronavirus, Walters said. An additional three people were isolated during the flight for fever. Upon arrival, 171 stayed in Travis while six traveled to Omaha.

    The Texas flight had 151 people board and included the other seven who tested positive for coronavirus. Two additional passengers were isolated on account of fever. All passengers who tested positive for coronavirus then moved on to Omaha.

    How did all those Americans who were flying alongside the infected feel? Well, according to USA Today, “the aircraft design allowed passengers to sit in isolation thanks to a plastic divider at the tail of the aircraft.”  We can only hope that “plastic divider” was enough to keep the virus confined to its own class aboard the aircraft.

    * * *

    Anyway, now that hundreds of passengers were locked up in that ship for almost two weeks for nothing with the US rushing to break quarantine without waiting to verify the initial “all clear” test, officials from the University of Nebraska Medical Center and Nebraska Medicine confirmed that they are assessing 13 adults at their quarantine and biocontainment facility in Omaha.

    “Late last night at about 2 or 3 a.m., we were asked to bring some individuals here who had either tested positive or had a high likelihood of testing positive because of symptoms they were exhibiting,” said Dr. Chris Kratochvil, the executive director at the University of Nebraska Medical Center’s Global Center for Health Security.

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    The Nebraska Medical Center’s Global Center for Health Security

    Twelve of them are housed in the quarantine center while one man was transferred to the hospital’s biocontainment unit for testing and observation because of symptoms including cough, fever, shortness of breath, lightheadedness and an undisclosed chronic condition that would make him particularly vulnerable to the COVID-19 virus, the USA Today reported.

    “He is doing good and in stable condition at this time,” reported Shelly Schwedhelm, Nebraska Medicine’s executive director of emergency management and biopreparedness. She went on to note that “the folks in the quarantine center have all been tested, and we’re waiting for those results.” She added that the other 12 are isolated in “very nice rooms with WiFi, TV and a small refrigerator – a lot of the amenities at hotels but with engineering controls” to prevent contaminated air from escaping.

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    Inside the Nebraska Medical Center’s Global Center for Health Security

    Their test results, which are due back any moment (Monday afternoon), will determine whether the patients will be allowed to see their spouses or leave their rooms. Regardless of whether they test positive or negative, all of the new arrivals will spend at least 14 days in the facility, and any who test positive will likely stay longer, said Dr. Mike Wadman, the co-medical director of the National Quarantine Unit without a trace of irony.

    Kratochvil says it’s possible that they may be asked to take more patients should more of the Diamond Princess passengers now in quarantine at the airbases test positive.

    Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases at the National Institutes of Health, told the USA TODAY editorial board and reporters Monday that the original idea to keep people safely quarantined on the ship wasn’t unreasonable. Yet where the entire story falls on its face is that even with the quarantine process on the ship, virus transmission still occurred. One can only hope that there are proper precaution pathways in place to prevent transmission now that at least 13 infected cruise passengers are now on US soil.

    “The quarantine process failed,” Fauci said. “I’d like to sugarcoat it and try to be diplomatic about it, but it failed. People were getting infected on that ship. Something went awry in the process of the quarantining on that ship. I don’t know what it was, but a lot of people got infected on that ship.”

    What might have gotten awry is that the virus is airborne and spread via the air conditioning system. But before we get banned from another social network, we will wait for someone “more credible” to make that claim.

    Unfortunately, since the Diamond Princess was the single biggest incubator of coronavirus cases outside of Wuhan, and since nobody still seems to have a full grasp on how to contain the infection, we have a nagging feeling that this breach of quarantine will come back to haunt the US.

    * * *

    Separately, Holland America said that 255 passengers and 747 crew members remained on the MS Westerdam, which docked in Sihanoukville, Cambodia, Friday, after being turned away from ports in Japan, Thailand and Guam. One female American passenger tested positive for coronavirus at a Malaysian hospital over the weekend. She remains stable, and her travel companion tested negative, the cruise line said.

    It was unclear if quarantine on that cruise ship had also been broken, as the cruise line stated that at least some passengers had been transported to a local hotel: the cruise line said Cambodian health officials tested those on board Monday, a process expected to last several more days.

    “Guests at a hotel in Phnom Penh have all completed the COVID-19 screening,” the cruise line said. “Results are being returned when completed, with the first batch of 406 all being negative. Cleared guests may travel home, and arrangements are being made for those guests. Guests in both locations are being very well cared for, including assisting with any medications needed.” 

    * * *

    Finally, some good news: in keeping with its daily attempts to minimize the threat from the coronavirus pandemic, JPMorgan’s inhouse virologist insurance strategist, MW Kim, said that even as attention shifts to cases outside of China, “at this stage, we see the virus contagion risk remaining relatively small, considering hospital capacity and strong local efforts to minimize the outbreak.” Yet even here, the bank sounded decidedly unsure of its cheerful prediction (this is the same bank whose credibility was shattered last week when China unexpectedly hiked the total number of cases by 15,000 in one day, crushing JPMorgan’s “epidemiological model”), to wit:

    Mapping the virus spread scenario outside China. Our epidemiology model forecasts the virus outbreak in mainland China. However, we are observing early signs of community spread, as local infected toll without travel history to China is growing in Singapore, Japan, South Korea, and a few European countries. We intend to add mini-epidemic scenarios for each country once the infected toll exceeds the 100-200 level (depending on population/density).

    The following table from JPM lists the number of international cases, excluding the 454 infected on the Diamond Princess, and excluding the 60 cases reported in Hong Kong. Expect the numbers to surge as more thorough testing reveals just how extensively the virus has spread.

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    Tyler Durden

    Mon, 02/17/2020 – 19:07

  • No One Gets Out Of Here Alive
    No One Gets Out Of Here Alive

    Authored by Jim Quinn via The Burning Platform blog,

    “The seasons of time offer no guarantees. For modern societies, no less than for all forms of life, transformative change is discontinuous. For what seems an eternity, history goes nowhere – and then it suddenly flings us forward across some vast chaos that defies any mortal effort to plan our way there. The Fourth Turning will try our souls – and the saecular rhythm tells us that much will depend on how we face up to that trial. The saeculum does not reveal whether the story will have a happy ending, but it does tell us how and when our choices will make a difference.”  – Strauss & Howe – The Fourth Turning

    As we wander through the fog of history in the making, unsure who is lying and who is telling the truth, seemingly blind to what comes next, I look to previous Fourth Turnings for a map of what might materialize during the 2nd half of this current Fourth Turning. After a tumultuous, harrowing inception to this Crisis in 2008/2009, we have been told all is well and are in the midst of an eleven-year economic expansion, with the stock market hitting all-time highs.

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    History seemed to stop and we’ve been treading water for over a decade. Outwardly, the establishment has convinced the masses, through propaganda and money printing, the world has returned to normal and the future is bright. I haven’t bought into this provable falsehood. Looking back to the Great Depression, we can get some perspective on our current position historically.

    The Dow is up 450% since its 2009 low, which is the metric used by the establishment to prove their money printing solutions have succeeded in lifting the country from the depths of despair and depression. The narrative peddled to the plebs by the lords of the manor through their fake news media mouthpieces for the past decade is one of solid recovery, as the cancer of debt proliferates through the global intestines, thrusting the patient towards a terminal fate.

    Looking back to the previous Fourth Turning it seems the Dow went up 450% from its 1932 low in just five years, making this bull market look like a calf. It seems the ruling class did quite well in the midst of the Great Depression, while the masses lined up in soup lines. History may not repeat, but it certainly seems to be rhyming during this Fourth Turning, as the Wall Street cabal have been enriched while senior citizens have been impoverished by the Federal Reserve ZIRP and QE to infinity. This is proof depressionary conditions can prevail for the majority even as the stock market skyrockets to new heights.

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    Trump consistently touts our economy as the best ever. Obama crowed about bringing the country out of the depths of recession. How many of today’s historically challenged iGadget addicted morons know GDP grew by 63% between 1933 and 1937, in the midst of the Great Depression? Meanwhile, GDP has only grown by 48% since the 2009 low, over a ten-year period. And this has only been achieved through a 100% increase in the national debt, a 450% increase in the Federal Reserve balance sheet, a decade of zero interest rates, and trillion-dollar annual deficits.

    The blizzard of lies obfuscating the reality of our economic decline has been so persistent, critical thinking Americans have lost all trust in the existing social order. The fabric of our nation has been torn asunder through the machinations and criminality of the Deep State players and their apparatchiks disseminated throughout our political, financial, government and media structures.

    I do contemplate what future historians (if our egomaniacal leaders don’t blow up the planet) will write about this profoundly abnormal period in world history. Rational sober minded people will wonder “what were they thinking?”. How did mass delusion sweep across the globe and convince hundreds of millions to believe debt equaled wealth and prosperity could be generated by central bankers printing money at hyper-speed. How could supposedly highly educated financial professionals convince themselves it was rational to pay $900 per share for a company losing hundreds of millions per year?

    The irrational exuberance exhibited by the big swinging dicks on Wall Street during the dot.com bubble, the subprime mortgage induced bubble, and the current everything bubble has been encouraged and inspired by the reckless actions of the Federal Reserve and their fellow feckless central bank heroine dealers around the world. Their arrogance is only exceeded by their greed and myopia. Their grasp of history reaches to last Wednesday. No one is heeding the wisdom of great men. That’s why they will be blind-sided by the coming total catastrophe, once again.

    “There is no means of avoiding the final collapse of a boom brought about by credit expansion.  The alternative is only whether the crisis should come sooner as the result of voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.” – Ludwig von Mises, Human Action [1949]

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    I spent countless hours during the Obama administration poking holes in the false narrative of the unemployment figures produced by the BLS and GDP numbers produced by the BEA. The Obama haters were completely onboard with my counter-factual arguments, backed up with rational arguments that these government drones were doing nothing more than peddling lies to keep the serfs in the dark.

    Even Donald Trump openly scorned and ridiculed the fake data pumped out month after month. But it seems Donald now believes every economic data point his governmental agencies produce on a monthly basis. The recent jobs report was a perfect example. The mainstream media all blasted the same headline that 225,000 jobs were added in January, much higher than expected. This proved the economy is doing wonderfully, in their eyes.

    It’s funny, but the Trump acolytes ignored the 520,000 downward revision of jobs created in the prior year, making his State of the Union boasts provably false. I’ve trashed the birth/death adjustments made by the BLS for years, but now Trump and his supporters ignore its falsity. The 225,000 increase in jobs came from the establishment survey. I heard no one point out the household survey showed the number of employed Americans fell by 89,000 in January and the number of unemployed jumped by 139,000. There are still almost 101,000 million working age Americans not working, the same number not working at this point in Obama’s presidency.

    The overall employment situation has improved in the last three years, but Trump touting this as a blue-collar recovery is laughable. Real median weekly earnings for full-time workers is $362 ($18,824 annually), up a phenomenal 2.8% over the 3 years of Trump’s presidency. Real wages did fall 2.9% over the first three years of Obama’s presidency, but let’s not get carried away with less than 1% real wage growth per year under Trump. And remember, using a true inflation figure north of 5% would show real wages are actually in decline.

    None of the current narrative fanboys pointed out only 1.93 million private industry jobs were created in 2019, the lowest level since 2010. Not exactly robust. And not consistent with the “greatest economy ever” narrative being promoted to the masses. The Fed reporting consumer debt soaring by $22 billion in December, with credit card debt growing by the most in over two decades (just prior to the dot.com debacle), is surely a sign of a healthy consumer. Right?

    Consumer credit as a percentage of GDP reaching all-time highs as their real wages are stagnant isn’t a sign of middle-class desperation. Right? We also know 40% of American adults don’t have $400 of savings to cover an emergency expense, like a normal car repair or medical expense. It is clear to any critical thinking individual that credit card debt has risen to new all-time highs because the average family is treading water by paying utilities, rent, taxes, food and medical bills with their credit cards.

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    The foolishness of consumers, corporations, politicians and government bureaucrats is borne out in the chart below. The Federal Reserve created loose monetary policy, started under Greenspan in the 1980s, has convinced Wall Street titans the Fed will always have their back, bailing them out after they take excessive risks and push the financial system to the brink of collapse. The hubris of the ruling oligarchs, exhibited by issuing debt at hyper-speed to “solve” a crisis caused by excessive debt, knows no bounds.

    Just the leveling off of debt in 2008/2009 threatened to bring the house of cards down. The issuance of another $17 trillion of debt, a 30% increase in ten years, has barely budged GDP. The fallacy that debt doesn’t matter because we owe it to ourselves has been proven false time and again. Consumers and corporations have to service their immense debt or go bankrupt. Interest on the national debt is already crowding out spending on real priorities like our infrastructure. Borrowing to pay interest on the debt is a pathway to destruction. An unsustainable trend will not be sustained. It’s just a matter of time.

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    So, who benefits from this hyperbolic increase in debt? Certainly not the average working stiff who has been propagandized into buying shit they don’t need with pretend money (debt) they don’t have, in order to keep up with the Joneses. As clearly demonstrated over the last decade, the beneficiaries of this stratospheric issuance of debt have been Wall Street shysters, mega-corporation executives, corrupt politicians, billionaire oligarchs, media titans, the military industrial complex, and the Deep State.

    Why is it that Wall Street bankers were able to borrow for free from the Federal Reserve for a decade, while paying .15% to senior citizens and reaping billions in ill-gotten profits? As the Federal Reserve chairman lies that keeping interest rates low is to benefit the average American, why are interest rates on credit cards at an all-time high? I wonder who is benefitting from this interesting development. If the average American hasn’t figured out ZIRP, QE to infinity, and trillion-dollar deficits aren’t for their benefit, then they are just willfully ignorant or plain stupid.

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    After what has seemed an eternity with this Fourth Turning not appearing to intensify, the last few months, and particularly since the start of 2020, it seems like we are about to be flung forward into a coming storm of chaos, with no way to plan for the challenges awaiting. The ruling oligarchs recognized their attempt to try and normalize our economic system by slowly weaning it from ever expanding debt during 2019 was headed towards a cliff.

    Their actions over the last six or so months reveal an air of desperation. The sudden reversal from methodically slow interest rate increases to three cuts in succession exposes the Fed as being trapped, with no way out. Normalization is impossible. Then the repo market began to implode, with overnight rates soaring to 10%. The ongoing hundreds of billions in funding provided by the Fed every day divulges the rot underlying the financial system, requiring never ending emergency measures to keep it alive.

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    “The worship of the state is the worship of force. There is no more dangerous menace to civilization than a government of incompetent, corrupt, or vile men. The worst evils which mankind ever had to endure were inflicted by bad governments. The state can be and has often been in the course of history the main source of mischief and disaster.” ― Ludwig von Mises

    The masses have been trained through decades in government gulags (aka public schools) to worship the state and propagandized through the corporate media to believe government and the politicians picked for us by men in backrooms are working on our behalf. Nothing could be further from the truth. The Deep State is inhabited by a myriad of corrupt, vile men who are the source of the mischief and disasters being inflicted on honest hard-working people across the land.

    Central bankers and their Wall Street puppet masters have been making billions as they blow bubbles, then use their power and control over politicians to shift their losses to the ignorant masses when their bubbles burst. When it happens over and over again, it clearly isn’t due to mistakes or misunderstandings. The pillaging of your wealth, rigged markets, fraud, and buying off the regulatory system is now the standard operating procedure in our outlaw surveillance state.

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    In Part Two of this article I will examine the earth moving events which have already happened in 2020 and ponder what will catalyze the rest of this year and the second half of this ongoing Fourth Turning.

    *  *  *
    The corrupt establishment will do anything to suppress sites like the Burning Platform from revealing the truth. The corporate media does this by demonetizing sites like mine by blackballing the site from advertising revenue. If you get value from this site, please keep it running with a donation.


    Tyler Durden

    Mon, 02/17/2020 – 19:05

  • Los Alamos Experts Warn Covid-19 "Almost Certainly Cannot Be Contained", Project Up To 4.4 Million Dead
    Los Alamos Experts Warn Covid-19 "Almost Certainly Cannot Be Contained", Project Up To 4.4 Million Dead

    Authored by Sharon Begley via StatNews.com,

    At least 550,000 cases. Maybe 4.4 million. Or something in between.

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    Like weather forecasters, researchers who use mathematical equations to project how bad a disease outbreak might become are used to uncertainties and incomplete data, and Covid-19, the disease caused by the new-to-humans coronavirus that began circulating in Wuhan, China, late last year, has those everywhere you look. That can make the mathematical models of outbreaks, with their wide range of forecasts, seem like guesswork gussied up with differential equations; the eightfold difference in projected Covid-19 cases in Wuhan, calculated by a team from the U.S. and Canada, isn’t unusual for the early weeks of an outbreak of a never-before-seen illness.

    But infectious-disease models have been approximating reality better and better in recent years, thanks to a better understanding of everything from how germs behave to how much time people spend on buses.

    “Year by year there have been improvements in forecasting models and the way they are combined to provide forecasts,” said physicist Alessandro Vespignani of Northeastern University, a leading infectious-disease modeler.

    That’s not to say there’s not room for improvement. The key variables of most models are mostly the same ones epidemiologists have used for decades to predict the course of outbreaks. But with greater computer power now at their disposal, modelers are incorporating more fine-grained data to better reflect the reality of how people live their lives and interact in the modern world — from commuting to work to jetting around the world. These more detailed models can take weeks to spit out their conclusions, but they can better inform public health officials on the likely impact of disease-control measures.

    Models are not intended to be scare machines, projecting worst-case possibilities. (Modelers prefer “project” to “predict,” to indicate that the outcomes they describe are predicated on numerous assumptions.) The idea is to calculate numerous what-ifs: What if schools and workplaces closed? What if public transit stopped? What if there were a 90% effective vaccine and half the population received it in a month?

    “Our overarching goal is to minimize the spread and burden of infectious disease,” said Sara Del Valle, an applied mathematician and disease modeler at Los Alamos National Laboratory. By calculating the effects of countermeasures such as social isolation, travel bans, vaccination, and using face masks, modelers can “understand what’s going on and inform policymakers,” she said.

    For instance, although many face masks are too porous to keep viral particles out (or in), their message of possible contagion here! “keeps people away from you” and reduces disease spread, Del Valle said. “I’m a fan of face masks.”

    The clearest sign of the progress in modeling comes from flu forecasts in the U.S. Every year, about two dozen labs try to model the flu season, and have been coming ever closer to accurately forecasting its timing, peak, and short-term intensity. The U.S. Centers for Disease Control and Prevention determines which model did the best; for 2018-2019, it was one from Los Alamos.

    Los Alamos also nailed the course of the 2003 outbreak of SARS in Toronto, including when it would peak. “And it was spot on in the number of people who would be infected,” said Del Valle: just under 400 in that city, of a global total of about 8,000.

    The Covid-19 outbreak in China is quickly spreading worldwide, sparking quick calculations on how deadly this new disease is. One measure is called a case fatality rate. While the formula is simple, it’s difficult to get a precise answer.HYACINTH EMPINADO/STAT

    The computers that run disease models grind through calculations that reflect researchers’ best estimates of factors that two Scottish researchers identified a century ago as shaping the course of an outbreak: how many people are susceptible, how many are infectious, and how many are recovered (or dead) and presumably immune.

    That sounds simple, but errors in any of those estimates can send a model wildly off course. In the autumn of 2014, modelers at CDC projected that the Ebola outbreak in West Africa could reach 550,000 to 1.4 million cases in Liberia and Sierra Leone by late January if nothing changed. As it happened, heroic efforts to isolate patients, trace contacts, and stop unsafe burial practices kept the number of cases to 28,600 (and 11,325 deaths).

    To calculate how people move from “susceptible” to “infectious” to “recovered,” modelers write equations that include such factors as the number of secondary infections each infected person typically causes and how long it takes from when one person gets sick to when the people she infects does. “These two numbers define the growth rate of an epidemic,” Vespignani said.

    The first number is called the basic reproduction number. Written R0 (“R naught”), it varies by virus; a strain that spreads more easily through the air, as by aerosols rather than heavier droplets released when an infected person sneezes or coughs, has a higher R0. It has been a central focus of infectious disease experts in the current outbreak because a value above 1 portends sustained transmission. When the R0 of Covid-19 was estimated several weeks ago to be above 2, social media exploded with “pandemic is coming!” hysteria.

    But while important, worshipping at the shrine of R0 “belies the complexity that two different pathogens can exhibit, even when they have the same R0,” the Canadian-U.S. team argues in a paper posted to the preprint site medRxiv. Said senior author Antoine Allard of Laval University in Quebec, “the relation between R0, the risk of an epidemic, and its potential size becomes less straightforward, and sometimes counterintuitive in more realistic models.”

    To make models more realistic, he and his colleagues argue, they should abandon the simplistic assumption that everyone has the same likelihood of getting sick from Covid-19 after coming in contact with someone already infected. For SARS, for instance, that likelihood clearly varied.

    “Bodies may react differently to an infection, which in turn can facilitate or inhibit the transmission of the pathogen to others,” Allard said.

    “The behavioral component is also very important. Can you afford to stay at home a few days or do you go to work even if you are sick? How many people do you meet every day? Do you live alone? Do you commute by car or public transportation?”

    When people’s chances of becoming infected vary, an outbreak is more likely to be eventually contained (by tracing contacts and isolating cases); it might reach a cumulative 550,000 cases in Wuhan, Allard and his colleagues concluded. If everyone has the same chance, as with flu (absent vaccination), the probability of containment is significantly lower and could reach 4.4 million there.

    Or as the researchers warn, “the outbreak almost certainly cannot be contained and we must prepare for a pandemic ….”

    Modelers are also incorporating the time between when one person becomes ill and someone she infects does. If every case infects two people and that takes two days, then the epidemic doubles every two days. If every case infects two people and they get sick four days after the first, then the epidemic doubles every four days.

    This “serial time” is related to how quickly a virus multiplies, and it can have a big effect. For a study published this month in Annals of Internal Medicine, researchers at the University of Toronto created an interactive tool that instantly updates projections based on different values of R0 and serial interval.

    Using an R0 of 2.3 and serial interval of seven days, they project 300,000 cases by next week. If the serial interval is even one day less, the number of cases blasts past 1.5 million by then. But if the countermeasures that China introduced in January, including isolating patients, encouraging people to wear face masks, and of course quarantining Wuhan, reduce the effective reproduction number, as has almost certainly happened, those astronomical numbers would plummet: to 100,000 and 350,000 cases, respectively.

    Just as public health officials care how long someone can be infected without showing symptoms (so they know how long to monitor people), so do modelers. “When people are exposed but not infected, they tend to travel and can’t be detected,” Vespignani said. “The more realistic you want your model to be, the more you should incorporate” the exposed-but-not-ill population. This “E” has lately become a fourth category in disease models, joining susceptible, infectious, and recovered.

    At Los Alamos, Del Valle and her colleagues are using alternatives to the century-old susceptible/infectious/recovered models in hopes of getting a more realistic picture of an outbreak’s likely course. A bedrock assumption of the traditional models is “homogeneous mixing,” Del Valle said, meaning everyone has an equal chance of encountering anyone. That isn’t what happens in the real world, where people are more likely to encounter others of similar income, education, age, and even religion (church pews can get crowded).

    “Ideally, you’d break the population into many groups” and estimate the likelihood of each one’s members interacting with each other and with every kind of outsider, Del Valle said.

    “Your model would become more accurate.”

    Called “agent-based models,” they simulate hypothetical individuals, sometimes tens of millions of them, as they go about their day. That requires knowing things like how many people commute from where to where for work or school, how they travel, where and how often they shop, whether it’s customary to visit the sick, and other key details. Computers then simulate everyone’s movements and interactions, for instance by starting with one infected person leaving home in the morning, chatting with other parents at school drop-off, continuing to work on a bus, standing 2 feet from customers and colleagues, and visiting a pharmacy for her migraine prescription.

    The models keep track of people second by second, said Los Alamos computer scientist Geoff Fairchild, “and let you assess the impact of different decisions, like closing schools during flu season.” (Some research shows that can dampen an outbreak.) Although “agent-based models can simulate reality better,” he said, they are less widely used because they require enormous computing power. Even on the Los Alamos supercomputer, a single run of a complicated model can take days or even weeks — not counting the weeks of work modelers spend writing equations to feed the computer.

    The Los Alamos researchers are still wrestling with their Covid-19 model, which is showing – incorrectly – the outbreak “exploding quite quickly in China,” Del Valle said. It is overestimating how many susceptible people become infected, probably because it’s not accurately accounting for social isolation and other countermeasures. Those seem to have reduced R0 toward the lower range of 2-to-5 that most modelers are using, she said.

    In the current outbreak, researchers are building models not only to peek into the future but also to reality-check the present. Working backwards from confirmed infections in countries other than mainland China, researchers at Imperial College London who advise the World Health Organization estimated that Wuhan had 1,000 to 9,700 symptomatic cases as of Jan. 18. Three days later, all of mainland China had officially reported 440 cases, supporting the concerns of global health officials that China was undercounting.

    In a more recent model run, Jonathan Read of England’s University of Lancaster and his colleagues estimated “that only about 1 in 20 infections were being detected” in late January, Read said: There were probably 11,090 to 33,490 infections in Wuhan as of Jan. 22, when China reported 547 cases.

    “It highlights how difficult it is to track down and identify this virus,” Read said, especially with residents of quarantined Wuhan being turned away from overwhelmed hospitals and clinics without being tested for the virus. Using a similar approach, modelers led by Dr. Wai-Kit Ming of Jinan University in Guangzhou estimated that through Jan. 31, China probably had 88,000 cases, not the 11,200 reported.

    Read’s group is updating its model to estimate the fraction of true cases in February; China’s cumulative cases topped 60,000 on Thursday.

    For modelers, a huge undercount can corrupt the data they base their equations on. But even with that disadvantage the Covid-19 models “are doing quite well, despite a lot of complicated dynamics on the ground,” said Los Alamos’s Fairchild. While it’s not clear yet if they’ve nailed the true numbers of cases, they are correctly projecting the outbreak’s basic shape: increasing exponentially, the number of cases growing more quickly the more cases there are.


    Tyler Durden

    Mon, 02/17/2020 – 18:55

  • Chicago Records Coldest Valentine's Day In Half A Century; The Brunt Of Winter Is Likely Over – Hello Spring?
    Chicago Records Coldest Valentine's Day In Half A Century; The Brunt Of Winter Is Likely Over – Hello Spring?

    Last week’s Arctic blast was very noticeable in Chicago. Residents woke up to subzero temperatures on Valentine’s Day, one of the coldest days in nearly five decades.

    O’Hare International Airport recorded minus 2 degrees on Feb 14, according to the National Weather Service (NWS).

    The cold spell last Friday was one degree shy of minus 3 degrees recorded in 1943. Still 5 degrees from the coldest low ever recorded of minus 8 degrees in 1905.

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    Minus 2 degrees was undoubtedly the coldest day in the city so far this year, considering much of North America has had a relatively mild 2019-20 winter season.

    The risk of another Arctic blast for the Midwest for the next 10-15 days appears to be low, and temperatures should recover.

    Midwest Heating degree day (HDD) trends will be elevated through the end of the month but are expected to decline into March, suggesting that the brunt of winter could be coming to a close.

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    US-Lower 48 HDD also shows elevated reading through the end of the month with a drop off through March.

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    And considering the US is the only country in the world that uses a groundhog to time cyclical trends in seasonal shifts – maybe this unorthodox way in weather prediction is right this year, as Punxsutawney Phil did not see his shadow several weeks ago, indicating that an early spring is coming.


    Tyler Durden

    Mon, 02/17/2020 – 18:40

  • Why You Shouldn't Borrow Too Much Money, China Edition
    Why You Shouldn't Borrow Too Much Money, China Edition

    Authored by John Rubino via DollarCollapse.com,

    When the US housing bubble burst in 2007, most observers were focused on the threat to Wall Street banks and their massive derivative books. This was a legitimate fear, since the worst case scenarios involved the death of Goldman Sachs and JP Morgan Chase, with all the stock market carnage that that implied.

    But for China the stakes were a lot higher – picture half a billion people taking to the streets and demanding an end to a government whose only claim to legitimacy was its ability to provide millions of ever-more-lucrative jobs.

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    So while the US was bailing out every bank in sight with lower interest rates and loan guarantees, China upped the ante by ordering pretty much every sector if its economy start building things with borrowed money. The result was the biggest infrastructure binge in history, in which roads, bridges, airports, and — hey, why not — entire new cities sprang up in just a few years, providing jobs for millions of would-be rioters and a torrent of cash flow for foreign suppliers of iron ore, copper, cement, steel, lumber, and pretty much every other industrial commodity you can name.

    China boomed, the rest of the world recovered, and today’s longest-ever economic expansion was born. And Chinese debt-to-GDP soared to record-high levels.

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    Now dial back the perspective to that of a single hypothetical family. Say one of the breadwinners loses their job and the family’s income is cut in half. They can chose to scale back their spending to match their newly-diminished circumstances and accept the resulting turmoil of fewer cars, smaller house, public rather than private schools, etc. Or they can max out a series of credit cards and just go on as before, avoiding stress in the moment at the cost of bigger bills — and greater fragility — in the future.

    The second strategy will work if the unemployed breadwinner gets a new job reasonably soon and — crucially — if no other crisis pops up that requires (now nonexistent) resources. No illness, no new job loss, no leaky roof, no wrecked car … and things might work out.

    Now zoom back out to China, which chose strategy number two and is currently “rich” but also way too leveraged to handle another shock to the system. Just in time for a pandemic that shuts down half the country. From today’s South China Morning Post:

    Forget Sars, the new coronavirus threatens a meltdown in China’s economy

    Never before has China paid such an economic price for an epidemic as it has done already with the coronavirus, which originated in the Chinese city of Wuhan and causes the disease now officially known as Covid-19. And the damage is spreading.

    It is obvious that the economic impact of Covid-19 will be far more severe than that of Sars, or any other previous epidemic.

    Whole cities have been locked down, effectively grinding some local economies to a halt since Beijing declared all-out war on January 23. Currently, 30 of China’s 31 provinces have declared a top-level public health emergency, with all major cities and economic hubs effectively shut for weeks. The government has locked down 56 million people in quarantine in Hubei, banned tens of millions more from travelling across the nation, and imposed restrictions on activities in most urban areas. The Lunar New Year holiday has been extended for one or two weeks for most of the country. At the peak, provinces accounting for almost 69 per cent of China’s GDP were closed for business, according to Bloomberg Economics.

    For the millions of small and medium-sized enterprises (SMEs) in China, the nightmare may be just beginning. Many small manufacturers fear foreign customers will shift orders to other countries due to disruptions in production and delivery. In a survey of 995 SMEs by academics from Tsinghua and Peking universities, 85 per cent said they would be unable to survive for more than three months under the current conditions. If the disruption goes on long enough, it could trigger a wave of bankruptcy among SMEs, which contribute more than 60 per cent of China’s GDP, 70 per cent of its patents and account for 80 per cent of jobs nationwide.

    A financially solid country might be able to weather this kind of crisis by drawing down reserves and using its stellar credit to take on new, temporary debt. But an already over-leveraged system may not have those options.

    As for what part of China’s economy blows up first, check out the repayment schedule of municipal debt. These are the cities and states that borrowed immense amounts of money — much of it in US dollars — to build the previously mentioned roads, bridges, etc. Much of this infrastructure was already failing to generate cash flow sufficient to cover the related debt. Now those cash flows are drying up.

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    China, in short, is providing a life lesson for the rest of us in how to respond to a crisis. Remember it next time you think about maxing out a credit card.


    Tyler Durden

    Mon, 02/17/2020 – 18:15

  • Hubei Reports 1,807 New Coronavirus Cases, And 93 Deaths
    Hubei Reports 1,807 New Coronavirus Cases, And 93 Deaths

    Summary:

    • China finally allows US experts inside
    • Hubei reports 1,807 new cases, and 93 deaths
    • Singapore reports 3 new cases, DP reports 90
    • Hubei reports new cases fall for the
    • Beijing weighs postponing National Congress
    • Japan delays Tokyo Marathon, raising concerns about the Olympics
    • 14 Americans aboard evacuation flight found to have virus
    • 5 virus-linked deaths rumored in Tibet
    • WHO reiterates that signs of slowdown in new China cases doesn’t mean outbreak is slowing
    • Wuhan hospital boss dies

    * * *

    Update (1800ET): According to the latest data released by Hubei health officials, the number of confirmed cases and deaths in Hubei Province has declined again on Feb. 17.

    • HUBEI REPORTS 1,807 NEW CORONAVIRUS CASES, 93 DEATHS FEB. 17

    According to Live Squawk’s calculations, deaths from the virus in Hubei rose 5.5.% on the day, compared with a 6.3% increase yesterday.

    Another 1,223 patients were released from the hospital on Feb. 17.

    The total number of confirmed cases in the province – including those who have recovered – now stands at 59,989.

    But for anybody who believes that the outbreak is slowing or that Hubei’s new provincial governor is easing up, keep in mind: The Province ordered 58 million people to stay inside on Sunday, part of the province’s wartime lockdown.

    Even more alarming: Chinese media reported one patient was diagnosed with COVID-19 42 days after returning home from Wuhan. “Such a long incubation period would undoubtedly present a larger challenge to the whole public health effort,” Dr. William Schaffner, an infectious disease specialist, said.

    Whatever they say is going on in Hubei, the pace of confirmations ex-china accelerating…

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    Meanwhile, there’s an update on the condition of the American evacuees from the ‘Diamond Princess’ who arrived back in the US earlier today, courtesy of USA Today, which reported that six of the arrivals have been moved to Omaha, while 171 stayed in Travis, Texas.

    An additional three people were isolated during the flight for fever. Upon arrival, 171 stayed in Travis while six traveled to Omaha.

    The Texas flight had 151 people board and included the other seven who tested positive for coronavirus. Two additional passengers were isolated on account of fever. All passengers who tested positive for coronavirus then moved on to Omaha.

    * * *

    Update (1715ET): Just one of many rumors floating around the Internet…but one we felt obliged to share.

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    It’s easy to be suspicious.

    * * *

    Update (1515ET): State media reports have confirmed that Liu Zhiming, the boss of one of the Wuhan hospitals battling the coronavirus, has died.

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    It’s the first death of a major figure on the front lines of the epidemic since Dr. Li Wanliang succumbed to the virus last week.

    * * *

    Update (1030ET): For what seemed like weeks after the outbreak began, Tibet repeatedly reported that it had zero confirmed cases of the virus, even after it had spread to every other Chinese province (there are 31 in total).

    Now, online rumors might shed some light on why: It’s not that the virus hadn’t arrived, it’s that party leaders in Tibet – for whatever reason (lack of resources, a motivation to impress Beijing) – didn’t report the full breadth of the problem.

    Unconfirmed reports claim 5 have died in Tibet from the virus.

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    It’s just another reminder that…

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    We wonder what the ‘real’ North Korea numbers are looking like?

    Meanwhile, WHO Director-General Dr. Tedros reiterated on Monday a sentiment he first expressed over the weekend: That though Chinese data appear to show a decline in the number of new cases, this isn’t necessarily a guarantee that the virus is slowing: “Every scenario is still on the table.”

    * * *

    Update (1000ET): As the velocity of the outbreak moves toward ‘exponential’ territory – it’s doubling every six days…

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    …here are some updates on the latest cases confirmed outside of China.

    First, we’d just like to comment on the numbers above and explain why we think they’re important for investors and the general public to keep in mind.

    Though deaths and confirmed cases outside China are still far below the number confirmed inside China, since nobody trust’s China’s numbers given the current state of the economy (why would so many people – 760 million – need to be on lockdown for a problem that’s mostly localized to Hubei?) the trajectory of these numbers is probably the best barometer for how the outbreak is going.

    It’s just the latest sign that it will be up to the international community to ascertain how bad this outbreak could really get, despite the WHO’s praises of China, which – surprise, surprise – likely were motivated by an “ulterior motive” (like China’s enormous contribution to the annual WHO budget).

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    Singapore has reported two additional confirmed cases, taking the country’s total to 77.

    Japan says 454 passengers and crew from the ‘Diamond Princess’ have been confirmed infected – that’s another 90 cases.

    Last night, Reuters reported that police across China have carried out raids on homes, restaurants and makeshift markets and arrested more than 700 people accused of violating the nationwide ban on the selling or consumption of wild animals. This is part of the reason why Beijing wants to reconsider its regulations on the trade and consumption of wildlife.

    Though leftists denounced criticisms of food items like “bat soup” and “three squeaks” as racist, the Chinese government and the bulk of the Chinese people now view the consumption of animals like reptiles, civet cats and hedgehogs as “fundamentally unsafe,” per the NYT.

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    Beijing is considering postponing its annual meeting of top Communist Party officials, sources said.

    In Cambodia, health authorities have stopped more passengers from disembarking from the Westerdam cruise ship after one elderly passenger was found to be infected with the virus.

    The Politburo Standing Committee, the highest authority in the country, will meet on Feb. 24 to discuss whether to delay the National People’s Congress, an annual meeting of 3,000 party leaders from across the country descend on Beijing to pass new laws and discuss government plans and the national budget. The meeting typically takes place in early March “like clockwork” and postponing it would be a gesture packed with symbolism for the Chinese people. The NYT said the delay is now “virtually certain.”

    After a host of unsettling outbreak-related developments, the PBOC swooped in to rescue markets on Monday by cutting a key medium-term lending rate as it attempts to prop up the economy. China’s yuan climbed on the news for the first time in four sessions.

    Finally, the SCMP reports that a WHO team of medical experts set to depart for China to assist in research and response to the crisis will include several Americans, though no exact numbers were given.

    Many suspected that Beijing’s refusal to allow Americans to help with the epidemic was a sign that the government was hiding something about the virus, probably the true number of cases and deaths, which many feared might be much higher than the official numbers.

    Here’s the latest count on global cases/deaths from the SCMP:

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    * * *

    It’s like the ‘Alien’ franchise: The evacuation ship always carries the monster.

    Unfortunately, in this instance, the monster is an invisible, inaudible yet highly infectious virus. And instead of the Nostromo, we have two chartered Boeing 747s.

    According to the New York Post, 14 Americans among the more than 300 US citizen passengers being evacuated from the cruise ship ‘Diamond Princess’ after nearly two weeks of quarantine have tested positive for the virus. Officials said they didn’t learn of the positive tests until the flight was about to take off.

    Ahead of the flight, the State Department said that 40 Americans who had tested positive wouldn’t be eligible for the evacuation flight, and would instead be entrusted to Japanese authorities. Of course, all of the Americans who traveled on the evacuation flights had to agree to a two week quarantine after returning to the US.

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    The sick individuals were reportedly “isolated” during the flight (but in a closed environment like an airplane during flight, how secure could they possibly be?).

    “These individuals were moved in the most expeditious and safe manner to a specialized containment area on the evacuation aircraft to isolate them in accordance with standard protocols,” the statement said. “During the flights, these individuals will continue to be isolated from the other passengers.”

    One of the evacuation flights is headed to Travis Air Force Base in California, and another for Lackland Air Force Base in Texas. At this time, it’s unclear which plane the infected are traveling on, where they are going, or where they’ll be treated.

    In other news, Japanese health authorities have decided to cancel a major public sporting event despite there only being 65 confirmed cases of the virus in Japan (outside the Diamond Princess): The Tokyo Marathon, which was set to begin later this month, has been cancelled

    The annual event attracts hundreds of thousands of spectators to watch more than 20,000 runners compete in one of the six ‘World Marathon Majors’.

    Many international events and trade shows have been cancelled because of the outbreak, including events like the Mobile world Conference in Barcelona, an area with zero confirmed COVID-19 infections, and the Beijing Autoshow, which was cancelled Monday morning, according to Reuters.

    But the Tokyo Marathon is an important attraction for Tokyo’s tourism industry. Furthermore, it doesn’t bode well for another high-profile sporting event: The 2020 Summer Olympics in Tokyo.

    At this point, we suspect the biggest tail risk for global markets involving Japan would be a decision to cancel or postpone the Olympics (it’s not like they can simply pick another venue). That would ignite a wave of hysteria and uproar that even these Fed-assisted markets likely wouldn’t be able to withstand.


    Tyler Durden

    Mon, 02/17/2020 – 18:11

  • 'Black And Latino Males Don't Know How To Behave In The Workplace': Bloomberg Flashback
    'Black And Latino Males Don't Know How To Behave In The Workplace': Bloomberg Flashback

    Another Mike Bloomberg sound byte is coming back to haunt the Democratic presidential candidate after a 2011 clip from when he was mayor of New York City has resurfaced in which he said “enormous cohorts” of young black and Latino men “don’t know how to behave in the workplace where they have to work collaboratively and collectively.”

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    Presciently, The Onion joked that Bloomberg was “tracking poorly among 18- to 25-year-old African Americans,” and “

    hired thousands of canvassers Friday to stop black men on the street and force them to hear his campaign pitch.”

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    Meanwhile, this isn’t the first time Bloomberg’s past words have come back to haunt him.

    Last week, the out-of-touch billionaire apologized to a black megachurch for his controversial “stop-and-frisk” program, saying “I was wrong. And I am sorry.” The program was successful at reducing crime, however opponents felt it violated the Fourth Amendment’s prohibition on unreasonable searches despite a 1968 Supreme Court ruling that it does not.

    On Friday, a former Bloomberg employee corroborated an accusation that he told a woman to “kill it” when she announced her pregnancy, according to the Washington Post.

    And in a 2016 speech at Oxford University, Bloomberg framed farmers as primitive idiots whose job he could teach just about anybody.

     Maybe this is why ol’ Mike doesn’t want to debate?

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    Tyler Durden

    Mon, 02/17/2020 – 17:50

Digest powered by RSS Digest

Feb 17

Today’s News 17th February 2020

  • The Geopolitics Of Biological Weapons, Part 3: Population Control & The Doomsday Vault
    The Geopolitics Of Biological Weapons, Part 3: Population Control & The Doomsday Vault

    Authored by Larry Romanoff via GlobalResearch.ca,

    Read Part 1 here…

    Read Part 2 here…

    GM seeds and GM food carry great risks for all nations, so much so that for many reasons it is probably imperative these foods be banned outright. This subject is too large to be discussed here, but one aspect requires brief notice. If we were to ask about the origin of GM seeds, how the idea was conceived and developed, who did the research and who provided the funding, how would we reply? We might reasonably suggest that perhaps the concept originated in the Biology or Agricultural Department of some university, or that a government lab doing research on food supplies might have conceived and pursued the idea. Or, we might suggest a private company in the agricultural field was looking for more productive varieties of grains and stumbled on this process.

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    We might suggest all those answers, but in each case we would be wrong. GM seed was conceived, promoted, researched and funded by the US Department of Defense – the American War Department. GM seed was never meant as a way to feed the hungry, but was instead conceived and developed as a weapon or, more precisely, as a weapons-delivery system. Genetically-Modified seed was never intended to support human life, but to eliminate it.

    GM seed is neither more productive nor healthier than traditional heritage crops, and is far more expensive and destructive, but it presents almost irresistible military advantages against any nation that becomes dependent on this source of food grains. One is that the US can use it as a political weapon, refusing to supply seed to a disfavored nation, perhaps causing widespread famine and dislocation. The other is more sinister, in that many groups have experimented with gene-splicing technology, inserting unrelated DNA into various seeds.

    In one case in Canada, a government department discovered an “anti-freeze” gene contained in the blood of fish living in Arctic waters, permitting them to survive in waters of sub-zero temperature. The scientists spliced this gene into Canadian wheat crops, permitting the wheat to withstand freezing temperatures without damage. Monsanto also forced these genes into tomatoes, resulting in the first GMO tomato. An American research lab spliced the genes from fireflies into tobacco plants, producing a tobacco field that glowed in the dark.

    These examples may be harmless, but others are much less so. The US Defense Department has invested huge sums in research directed to splicing lethal genes into these GM crop seeds, including smallpox, bird and swine flu viruses, coronaviruses, the plague, AIDS, and more. As a military weapon, such science is priceless. Why begin a shooting war when Monsanto or Cargill can sell rice, corn and soybeans that contain smallpox, H5N1, or a coronavirus? When the seed is harvested and passes into the nation’s food supply it could, within weeks, exterminate 50% or more of the population without firing a single shot.

    And this was precisely the reason GM seed was conceived and developed by the Americans. It is a weapon of war, designed and meant to deliver to a nation’s entire population a lethal virus or other disease, to literally exterminate an enemy with no risk to the aggressor. Many scientists and US military documents have demonstrated that seeds are far cheaper and much more effective than bombs in the search for military domination. One such military document I’ve discussed elsewhere stated the cost per death of an enemy population by nuclear, conventional and biological weapons, the latter being orders of magnitude less than the former.

    In 2001 scientists at the Epicyte bio-lab in San Diego created a GM contraceptive corn, having discovered a rare class of human antibodies that attack sperm. Their researchers isolated the genes that regulate the manufacture of these antibodies and inserted them into corn plants, creating horticultural factories that make contraceptives. Shortly after the 2001 Epicyte press release, all discussion of the breakthrough vanished. The company was taken over by Biolex and nothing more was heard in any media about the development of spermicidal corn. Epicyte, DuPont and Syngenta (sponsors of the Svalbard Seed Vault) had a joint venture to share and use this technology. Silvia Ribeiro, of the NGO ETC Group, warned in a column in the Mexican daily La Jornada, that “The potential of spermicidal corn as a biological weapon is very high”, and reminisced about the use of forced sterilizations against indigenous peoples.

    The Doomsday Seed Vault at Svalbard

    A new and serious cause for concern is the recently-announced seed vault built on a piece of barren rock named Svalbard, which is owned by Norway, is very remote near the North Pole, and virtually inaccessible. According to press releases, this seed vault has dual blast-proof doors with motion sensors, two airlocks, and walls of steel-reinforced concrete one meter thick. There are no full-time staff, but the vault’s relative inaccessibility will facilitate monitoring any human activity. The stated purpose is to store the entire world’s heritage seeds so that crop diversity can be saved for the future, but that crop diversity is already “saved”, stored in vaults all around the world. What do these people foresee, that such a remote and secure facility should be developed?

    The promoters and financiers of this venture are the same people who control the world’s GM seeds and who have been among the most outspoken proponents of drastically reducing the world’s population: the Rockefeller and Gates Foundations, Syngenta, DuPont, Monsanto and CGIAR. These are the same people who are actively destroying crop diversity all over the planet. Why would they suddenly get religion and decide to save in Norway the same seeds they are destroying everywhere else?

    Some time ago, William Engdahl wrote an excellently researched article on this subject of the seed vault and arrived at the same conclusion, that the vault was created as a storehouse for lethal biological pathogens, the DNA of which can be combined with GM seed and unleashed anywhere with the help of these same seed companies. No other use would explain the list of participants or the need for the remote location and virtually nuclear-proof security. Engdahl asked, “Is it a coincidence that these same organizations, from Norway to the Rockefeller Foundation to the World Bank are also involved in the Svalbard seed bank project?” 


    Tyler Durden

    Mon, 02/17/2020 – 00:00

  • "This Is Just Chauvinism": Oklahoma Woman Upset After Being Thrown Out Of All-Male Barbershop
    “This Is Just Chauvinism”: Oklahoma Woman Upset After Being Thrown Out Of All-Male Barbershop

    Today in “private business owners are allowed to do whatever they want at their own business and tough sh*t if you don’t like it” news…

    An Oklahoma woman took her story to the media when she was asked to leave an all-male barbershop in Ponca City, Oklahoma last week. The barbershop, called Kings Kuts, says it has a “strict no girlfriends or wives policy”, according to ABC. 

    Maliki Skowronski and her husband came into the shop to get him a haircut and beard trim when the owner informed her that she had to leave. 

    “The man kind of ignores my husband, directly approaches me and says, ‘I’m sorry, but we have a strict no women policy. You can’t be here,'” she said. She was kicked out before her husband had a chance to sit in the chair, she said.

    Barbershop owner Daxton Nichols admitted that some people have trouble understanding his rules, but compares it to many women-only salons. 

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    Nichols said: 

    “In New York City, there’s over 17 women’s only clubs where women can go and do the salon thing. They can go get their nails done, hair done, talk business amongst each other, and do that whole women’s power hear me roar stuff.”

    Nichols says he considers his barbershop a “private club”. When a reporter asked him if men paid a membership fee to get their haircut there, Nichols responded: “Yeah, when they pay a $20 fee.” 

    Nichols says people get offended at his rule just “because they can”. The barber who asked Skowronski to leave, Scott Seagraves, said he threw her out to “preserve the shop’s ‘man cave’ environment”.

    He continued:

    “We want guys to be able to come in here and be guys and not have to worry what they say or what they talk about because there’s a lady present.”

    Skowronski called it chauvinism: “It’s not cute, no matter how you describe it. It’s not cute, you can’t treat people that way.”


    Tyler Durden

    Sun, 02/16/2020 – 23:30

  • Mapping Out The Banking Elite's Goal For A Cashless Monetary System, Part 1
    Mapping Out The Banking Elite’s Goal For A Cashless Monetary System, Part 1

    Authored by Steven Guinness,

    Back in 2014 the Bank of England became the first central bank to publish research on digital currencies through their quarterly bulletin (Innovations in payment technologies and the emergence of digital currencies). A leading focus was on the use of distributed ledger technology, with the research declaring that ‘the key innovation of digital currencies is the ‘distributed ledger’ which allows a payment system to operate in an entirely decentralised
    way, without intermediaries such as banks‘.

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    One of the main draws of this technology is the belief that cryptocurrency and stablecoins offer a genuine route out of the traditional centralised model of banking that epitomises fiat currency. But is bypassing central banks and being able to make and receive payments independent of these institutions really what the rise in digital currencies is all about?

    Six years on from the BOE’s research, the digital currency agenda has advanced significantly in the face of increased geopolitical instability. An area of interest that has garnered scant attention is the ‘utility settlement coin‘ (USC) project that several global banks have been heavily invested in. It is a project that has now evolved through the inception of Fnality International, a consortium of shareholders that includes UBS, Barclays and Lloyds Banking Group.

    Here is a breakdown of some of the key events which have taken place in regards to USC since the BOE’s research was published:

    2015

    In September of 2015 a partnership consisting of Swiss bank UBS and UK based blockchain firm Clearmatics was announced that officially launched the concept of a Utility Settlement Coin. As detailed by Bitcoin Magazine,  USC would be utilised for ‘post-trade settlements between financial institutions on private financial platforms built on blockchain technology.’

    With blockchain underpinning the foundations of USC, payments would be settled in a matter of seconds rather than days. It would operate using a ‘permissioned‘ blockchain network, meaning access to the network must be granted by participants. This is in contrast to the likes of Bitcoin which uses a permissionless network that anyone can access. As discussed in previous articles, central banks openly advocate permissioned blockchain for the future development of digital currencies. 

    2016

    A year on from the original announcement on USC,  Santander, BNY Mellon and Deutsche Bank all issued press releases to confirm that they had gone into partnership with UBS and Clearmatics to develop the Utility Settlement Coin.

    Reacting to the news, Julio Faura, head of Blockchain R&D at Santander, said:

    Recent discussion of digital currencies by central banks and regulators has confirmed their potential significance. The USC is an essential step towards a future financial market on distributed ledger technologies.

    Expanding on the definition of USC, Deutsche Bank’s press release stated:

    USC is an asset-backed digital cash instrument implemented on distributed ledger technology for use within global institutional financial markets. USC is a series of cash assets, with a version for each of the major currencies (USD, EUR, GBP, CHF, etc.) and USC is convertible at parity with a bank deposit in the corresponding currency. USC is fully backed by cash assets held at a central bank.

    The Financial Times quoted David Treat, head of Accenture’s capital markets blockchain practice, as saying the technology behind USC would be ‘three to five years before we get things adopted at scale and several more years before it goes mainstream.’

    2017

    Exactly twelve months after Santander, BNY Mellon and Deutsche Bank announced their involvement in USC, more banks came on board in the shape of Barclays, Credit Suisse, HSBC, the Canadian Imperial Bank of Commerce (CIBC), Mitsubishi UFJ Financial Group (MUFG) and State Street.

    It was here where links were made between USC and the future development of central bank digital currencies. Speaking to CoinDesk, Hyder Jaffrey, the director of strategic investment and fintech innovation at UBS, said:

    It may well inform the way central banks choose to move things forward. We see it as a stepping stone to a future where central banks issue their own [cryptocurrency] at some point.

    Head of fintech partnerships and strategy at HSBC, Kaushalya Somasundaram, added to Jaffrey’s comments:

    It is a very good step forward in terms of going for more ambitious projects such as central bank digital currencies in the future.

    In September of 2017 the Bank for International Settlements released their quarterly review that contained a section titled, ‘Central bank cryptocurrencies‘. It was here where the BIS presented an illustration called ‘The Money Flower: a taxonomy of money‘, which consisted of a mix of universally accessible money, electronic money, central bank issued money and peer to peer transactions. Located in the middle of the flower was the Utility Settlement Coin, this despite how relatively under advanced the venture was at the time. The review did not present any details for why USC was included, other than to reaffirm the definition of the term by linking to a press release issued by UBS in August 2016.

    Nonetheless, for the BIS to take notice of USC shows that the technology was being actively considered at the highest levels of central banking.

    2019

    With the USC project progressing, in February 2019 JP Morgan announced that they had become the first U.S. bank to create and test a digital coin (known as JPM Coin). Characterised as a stablecoin, the JPM Coin is underpinned by blockchain technology and runs on a permissioned blockchain network. For the time being it is restricted to ‘institutional clients‘ only. As with other stablecoins, the value of one JPM Coin is equivalent to one U.S. Dollar, but the plan is to extend the use of the coin beyond the dollar and encompass other leading currencies around the world.

    Far from being averse to the technology, JP Morgan are fully behind cryprocurrencies, provided they are ‘properly controlled and regulated.’

    A few months later and the first soundings began to emerge of the Utility Settlement Coin entering a new phase of development. In May Reuters reported that some of the largest banks in the world were in the process of investing up to $50 million to ‘create a digital system using blockchain technology to settle financial transactions.’ A spokeswoman from Barclays confirmed at the time that the research and development phase of USC was ‘coming to an end.’

    The $50 million in funds would make up a new entity called ‘Fnality‘, which would be tasked with running the project.

    In June came confirmation of the evolvement of USC into ‘Fnality International‘.  In a subsequent press release the founding shareholders of Fnality were listed as:

    • Banco Santander

    • BNY Mellon

    • Barclays

    • Canadian Imperial Bank of Commerce (CIBC)

    • Commerzbank

    • Credit Suisse

    • ING

    • KBC Group

    • Lloyds Banking Group

    • MUFG Bank

    • Nasdaq

    • Sumitomo Mitsui Banking Corporation

    • State Street Corporation

    • UBS

    UK Blockchain firm Clearmatics were confirmed as maintaining their role as the technology partner to the project.

    Here is an extract from the press release:

    The focus for Fnality is now to create and deploy a solution incorporating legal, regulatory, operational. and technical aspects to create a regulated network of distributed Financial Market Infrastructures (dFMIs) to support global exchange of value transactions. Initially, five currencies are in scope: USD, EUR, GBP, JPY, and CAD. Further currencies will likely be added in due course.

    USC envisages being 100% backed by fiat currency held at the respective central bank with convertibility into fiat currency at par guaranteed at all times.

    The CEO of Fnality, Rhomaios Ram, stated that the launch of Fnality was ‘the commercial realisation of the USC Project‘, and that ‘USC will be an enabler for tokenised markets.’ Speaking a few months later, Ram said that one of the main areas of interest was in ‘establishing a digital currency capability in each currency‘. This is why Fnality is preparing to open accounts with all the major central banks, with the aim of having one account operational in early 2020 and for a digital currency to go live by the summer.

    The potential significance of Fnality was illustrated in September when senior officials from public authorities gathered at the Bank for International Settlements in Basel, Switzerland. Up for discussion during the ‘Conference on global stablecoins‘ was ‘the regulatory issues posed by the emergence of ‘stablecoin’ initiatives backed by financial institutions and large technology companies.’

    Recall how two years previously the BIS quarterly report included ‘The Money Flower‘ with USC as part of the network. Now as Fnality International, they were invited to give a presentation hosted by the BIS. JP Morgan and the Libra Association also gave their own presentations.

    This was an event convened by the Group of Seven Working Group on stablecoins, which at the time was chaired by Benoit Coeure. Having been chair of the Committee on Payments and Market Infrastructures, Coeure is now head of the BIS Innovation Hub.

    The BIS have since run two other conferences on digital money, the first being in September 2019 – ‘Fintech and Digital Currencies‘ – in conjunction with the Asian Bureau of Finance and Economic Research (ABFER) and the Centre for Economic Policy Research based in Britain. The second was in October – ‘Digital currencies, central banks and the blockchain: policy implications‘ – and was co sponsored by the Oesterreichische Nationalbank (central bank of Austria) and the Central Bank Research Association (CEBRA).

    As I have written about before, the BIS are central to the agenda of digitising money at the expense of tangible assets. Exactly how instrumental Fnality could be to that agenda is something we will look at in part two of this series.


    Tyler Durden

    Sun, 02/16/2020 – 23:00

  • Buzzkill: Many Public Marijuana Companies Have Just Several Months Worth Of Cash Left
    Buzzkill: Many Public Marijuana Companies Have Just Several Months Worth Of Cash Left

    While the idea of marijuana companies has certainly been a hot topic in the public market space – especially since Tilray’s epic short squeeze in late 2018 – companies in the sector have been silently burning through their war chests of cash, leaving many just months away from being completely out of cash altogether. 

    Large Canadian pot producers have a median of just 6.5 months of cash left, according to Bloomberg. This compares to 14.4 months for most U.S. multi-state operators. For operators in both countries, the clock is ticking for them to raise capital and likely cut costs. 

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    Names like Aurora Cannabis are going to have to address the problem sooner, rather than later. The company has the worst cash position of Canadian producers with just 2.3 months of liquidity remaining. Tilray isn’t far behind, with just 3.7 months of liquidity. 

    Aurora announced this week that it was going to be cutting 500 jobs as part of a major cost cutting effort. It also announced that its CEO would be stepping down. Regardless of the changes internally, the reality of the situation is that the company is still going to be in dire need of cash soon.

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    Another option for cannabis companies that don’t want to go to the market and raise cash is to merge or find a partner in the future. Investors may be more likely to deploy capital to marijuana names under better circumstances than traditional equity raises or bond issues. And there has undoubtedly been an appetite for mergers and acquisitions in the space, with names like Altria taking a $1.8 billion stake in Cronos Group in 2019. 

    Hershel Gerson, chief executive officer of Ello Capital, said: “I think people are looking for quality management teams that can effectuate a turnaround and have experience operating in a tighter environment than some of these early C-level teams.”

    “There’s a switch going on related to the management teams that is potentially going to benefit the industry going forward,” he concluded. 

    The clock is officially ticking and we’ll check back in several months to see just how beneficial these changes really are…


      Tyler Durden

      Sun, 02/16/2020 – 22:30

    1. Are Web Traffic Trends The Best Way To See What's Happening In The World?
      Are Web Traffic Trends The Best Way To See What’s Happening In The World?

      Submitted by Market Crumbs

      For most people, it’s hard to imagine a day going by without using the internet. Without it, you wouldn’t be reading this. It’s estimated that nearly 4.8 billion people, or about 61% of the world’s population, currently have internet access.

      With such a large portion of the world depending on the internet for so many aspects of their lives, studying trends in web traffic can provide a lot of valuable insights. Web analytics company SimilarWeb has done just that in its recently released 2020 Digital Trends report. Many of the top digital trends aren’t too surprising, but are interesting to analyze further nonetheless.

      Global web traffic continues its steady increase, with the total traffic to the top 100 websites averaging 223 billion monthly visits last year. This represents growth of 8.0% and 11.8% from 2018 and 2017, respectively. Mobile traffic continues to outgrow desktop traffic, with mobile traffic now representing 52% of total traffic. Mobile traffic has grown 30% since 2017, while desktop traffic has declined 3% over the same period.

      Just like the gains in the S&P 500 are increasingly driven by a few stocks, the same can be said about web traffic for the top 100 websites. The top ten websites saw a 10.7% increase in traffic last year compared to a 2.3% increase for the remaining 90. Google, YouTube, Facebook, Baidu and Wikipedia are the top five most popular websites, with Amazon, Twitter and Instagram following. Thankfully for Facebook it acquired Instagram, because Facebook’s traffic fell 7% from 2018 and nearly 20% from 2017. 

      As United States total household debt surpassed $14 trillion last year for the first time, web traffic to shopping websites shows that’s not all too surprising. All nine online shopping categories showed growth last year, with Amazon receiving 69% of total shopping traffic since 2017. After jumping nearly 12% from 2017 to 2018, daily web traffic during the week of Black Friday actually declined 0.1% over the last year. Interestingly, daily web traffic during the week of Amazon’s Prime Day, which is in July, jumped more than 8% over the last year after declining by 4% from 2017 to 2018. 

      One of the not-so-surprising findings in the report is that news publishers are having a very difficult time. Traffic to the top 100 media websites dropped 5.3% over the last year and 7% since 2017. Finance and Business and Women’s Interest are the only two categories that have seen increases in web traffic. Interestingly, websites that are left- or right-leaning have seen traffic grow while those that are politically centered have seen traffic fall.

      Web traffic to the top 100 finance websites was essentially flat last year. Traffic to cryptocurrency websites jumped in 2017 as they hit all-time highs, only to subsequently fall the last two years. While “too big to fail” banks have shown essentially flat web traffic, which is expected, there’s been a notable increase in traffic to fintech companies such as mobile only banks, personal financial management apps and payment apps.

      With so much time spent on the internet these days, analyzing web traffic trends is an invaluable resource to see what is going on in the world. It will be interesting to see how these trends change in the years to come and the implications they’ll have on society and the economy.


      Tyler Durden

      Sun, 02/16/2020 – 22:00

    2. "It's Winter-Time For Capital Flow" – Outbreak Sparks Collapse In Chinese Tech Venture Funding 
      “It’s Winter-Time For Capital Flow” – Outbreak Sparks Collapse In Chinese Tech Venture Funding 

      Hundreds of startups in China failed in 2019 as macroeconomic headwinds flourished. But now, the Covid-19 outbreak in the country crippled the already deteriorating venture capital industry, as funding freezes last month, according to Bloomberg, citing a new report from London-based consultancy Preqin. 

      Tech companies in China faced a “capital winter” last year, where funding shortages increased as the global economy continued to decelerate. The implosion of WeWork in Sept 2019, as it attempted to IPO and subsequently ran out of cash, sent jitters through the global startup industry. 

      Startups in China, just like the ones in the U.S., had trouble last year supporting their lofty valuations, driven sky-high after global central banks printed an obscene amount of money, which allowed speculators to bet in greater size in these companies. With macroeconomic headwinds mounting, and the global IPO market faltering last year, it was a sign that investors were turning to the exits, out of trash unicorns, and into cash or defensive plays, such as value companies, or ones that had stable cash flows. 

      By the time 2020 turned the corner, the Covid-19 outbreak in China delivered a deadly blow to startups. 

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       Preqin estimates that venture capital firms slashed investments in money-losing startups by 60% in January from a year ago. This means all the startups with negative cash flows and high burn rates, who are currently not operating at the moment because two-thirds of China’s economy is halted for virus containment purposes, could undergo a severe cash crunch in the near term. 

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      Without proper funding, there could be a surge of companies that could start failing, driving up non-preforming loans for banks, and lead to the next big financial crisis. 

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      Neil Shen, the founding partner of Sequoia Capital China, told Bloomberg that “we will fully stand by to provide help and support to the companies we backed in any way possible,” which he outlined some firms could undergo a cash crunch because the economy is shutdown. 

      Ee Fai Kam, head of Preqin Asian operations, said the setback in the venture capital industry is “coming on the back of a bruising 2019 when trade and tech tensions with the U.S. caused investors to exercise an abundance of caution.” 

      The bust of the global venture capital industry was likely accelerated by the blowup of WeWork last Sept. 

      Last fall, a month or so after WeWork’s IPO attempt ended in disaster, which resulted in a valuation collapse and was bailed out by its largest investor, SoftBank; top U.S. venture capitalists called an emergency meeting of startups in Oct to discuss the evolving and downshifting industry. 

      C.B. Insights and PWC noted last month that venture capital-backed companies in the U.S. raised $23 billion in 4Q19, down 42.5% over the prior year. 

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      Wang Jun, chief financial officer for Chinese fresh produce delivery firm Missfresh, warned that early 2020 would be a challenging time for startups to obtain liquidity. Jun said, “It’s winter time for capital flow,” he added that “companies need to produce blood on their own to become cash-positive.”

      To sum up, the venture capital industry across the world is headed for a possible bust cycle. An exogenous shock, like the trade war or a virus outbreak, is crippling startups from China to the U.S. The funding taps for these companies are shutting off; this is evident on both sides of the world as investors plow into defensive assets. 


      Tyler Durden

      Sun, 02/16/2020 – 21:30

    3. Fedophilia: The Intellectual Disease And Cure
      Fedophilia: The Intellectual Disease And Cure

      Authored by George Selgin via Alt-M.org,

      Although the movement to “End the Fed” has a considerable popular following, only a very tiny number of economists—our illustrious contributors amongst them—take the possibility seriously. For the rest, the Federal Reserve System is, not an ideal currency system to be sure (for who would dare to call it that?), but, implicitly at least, the best of all possible systems. And while there’s no shortage of proposals for reforming it almost all of them call only for mere tinkering. Tough though their love may be, the fact remains that most economists are stuck on the Fed.

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      This veneration of the Fed has long struck me as perverse. Its record can hardly be said, after all, to supply grounds for complacency, much less for the belief that no other system could possibly do better. (Indeed that record, as Bill Lastrapes, Larry White and I have shown, even makes it difficult to claim that the Fed has improved upon the evidently flawed National Currency system it replaced.) Further, as the Fed is both a monopoly and a central planning agency, one would expect economists’ general opposition to monopolies and to central planning, as informed by their welfare theorems and by the general collapse of socialism, to prejudice them against it. Yet instead of ganging up to look into market-based alternatives to the Fed, the profession, for the most part, has relegated such inquiries to its fringe.

      Why? The question warrants an answer from those of us who insist that exploring alternatives to the Fed is worthwhile, if only to counter people’s natural but nevertheless mistaken inclination to assume that the rest of the profession isn’t interested in such alternatives because it has already carefully considered—and rejected—them.

      It’s tempting to blame Fedophilia, and the more general phenomenon of what Larry White calls “status quo” bias in monetary research, on the Fed’s direct influence upon the economics profession. According to White, in 2005 the Fed employed about 27 percent more full-time macro- and monetary (including banking) economists than the top 50 US academic economics departments combined, while disseminating much of their research gratis through various in-house publications or as working papers. Perhaps not surprisingly, despite a thorough review of such publications, White could not find “a single Fed-published article that calls for eliminating, privatizing, or even restructuring the Fed.” That professional monetary economics journals are not much better may, in turn, reflect the fact, also documented by White, that Fed-affiliated economists also dominate those journals’ editorial boards.

      But I doubt that a reluctance to bite the hand that feeds them is the only, or even the most important, reason why most economists seldom question the Fed’s desirability.

      Another reason, I suppose, is their desire to distance themselves from… kooks. Let’s face it: more than a few persons who’d like to “End the Fed” want to do so because they think the Rothschilds run it, that it had JFK killed because he planned to revive the silver dollar, and that the basic plan for it was hatched not by the Congressional Committee in charge of monetary reform but by a cabal of Wall Street bankers at a top-secret meeting on Jekyll Island.

      Oh, wait: the last claim is actually true. But claims like the others give reasonable and well-informed Fed critics a bad name, while giving others reason for wishing to put as much space as possible between themselves and the anti-Fed fringe.

      I’m convinced that imagination, or the lack of it, also plays a part. To some extent, the problem is too much rather than too little imagination. With fiat money, and a discretionary central bank, it’s always theoretically possible to have the money stock (or some other nominal variable) behave just like it ought to, according to whichever macroeconomic theory or model one prefers. In other words, a modern central bank is always technically capable of doing the right thing, just as a chimpanzee jumping on a keyboard is technically capable of typing-out War and Peace.

      Just as obviously, any conceivable alternative to a discretionary central bank, whether based on competition and a commodity standard or frozen fiat base or on some other “automatic” mechanisms, is bound to be imperfect, judged relative to some—indeed any—theoretical ideal. Consequently, an economist need only imagine that a central bank might somehow be managed according to his or her own particular monetary policy ideals to reckon it worthwhile to try and nudge it in that direction, but not to consider other conceivable arrangements.

      That there’s a fallacy of composition of sorts at play here should be obvious, for a dozen economists might hold as many completely different monetary policy ideals; yet every one might be a Fedophile simply because the Fed could cater to his or her beliefs. In actual fact, of course, the Fed’s conduct can at most satisfy only one of them, and is indeed likely to satisfy none at all, and so might actually prove distinctly inferior to what some non-central bank alternative would achieve. So in letting their imaginations get the best of them, all twelve economists end up endorsing what’s really the inferior option.

      If you don’t think economists are really capable of such naivete, I refer you to the literature on currency boards, in which one routinely encounters arguments to the effect that central banks are always better than currency boards because they might be better. Or how about those critics of the gold standard who, having first observed how, under such a standard, gold discoveries will cause inflation, go on to conclude, triumphantly, that a fiat-money issuing central-bank is better because it might keep prices stable?

      But if economists let their imaginations run wild in having their ideal central banks stand in for the real McCoys, those same imaginations tend to run dry when it comes to contemplating radical alternatives to the monetary status quo. Regarding conventional beliefs concerning the need for government-run coin factories, which he (rightly) dismissed as so much poppycock, Herbert Spencer observed, “So much more does a realized fact influence us than an imagined one, that had the baking of bread been hitherto carried on by government agents, probably the supply of bread by private enterprise would scarcely be conceived possible, much less advantageous.” Economists who haven’t put any effort into imagining how non-central bank based monetary systems might work find it all too easy to simply suppose that they can’t work, or at least that they can’t work at all well. The workings of decentralized markets are often subtle; while such markets’ ability to solve many difficult coordination problems is, not only mysterious to untrained observers, but often difficult if not impossible even for experts to fathom except by means of painstaking investigations. In comparison monetary central planning is duck soup—on paper, anyway.

      Nor does the way monetary economics is taught help. In other subjects, the welfare theorems are taken seriously. In classes on international trade, for example, time is always spent, early on, on the implications of free trade: never mind that the world has never witnessed perfectly free trade, and probably never will; it’s understood that the consequences of tariffs and other sorts of state interference can only be properly assessed by comparing them to the free trade alternative, and no one who hasn’t studied that alternative can expect to have his or her pronouncements about the virtues of protectionism taken seriously.

      In classes in monetary economics, on the other hand, the presence of a central bank—a monetary central planner, that is—is assumed from the get-go, and no serious attention is given to the implications of “free trade in money and banking.” Consequently, when most monetary economists talk about the virtues of this or that central bank, they’re mostly talking through their hats, because they haven’t a clue concerning what other institutions might be present, and what they might be up to if the central bank wasn’t there.

      Since monetary systems not managed by central banks, including some very successful ones, have in fact existed, economists’ inability to envision such systems is also evidence of their ignorance of economic history. That ignorance in turn, among younger economists at least, is a predictable consequence of the now-orthodox view that history can be safely boiled down to a bunch of correlation coefficients, so that they need only gather enough numbers and run enough regressions to discover everything worth knowing about the past.

      Those who’ve been spared such “training,” on the other hand, often have a purblind view of the history of money and banks—one that brings to mind Saul Steinberg’s famous New Yorker cover depicting a 9th-Avenuer’s view of the world, with its almost uninhabited desert between the Hudson and the Pacific, and China, Japan, and Russia barely visible on the horizon. If he or she knows any monetary history at all, the typical (which is to say American) economist knows something about that history in the U.S., and perhaps considerably less about events in Great Britain. Theirs is, in short, just the right amount of knowledge to be very dangerous indeed.

      And dangerous it has been. In particular, because the U.S. before 1914, and England before the Bank of England began acting as a lender of last resort, happened to suffer frequent financial crises, economists’ historical nearsightedness has given rise to the conventional wisdom that any fractional-reserve banking system lacking a lender of last resort must be crisis-prone, and two clever (if utterly fantastic) formal models serving to illustrate the same view (or, according to economists’ twisted rhetoric, to “prove” it “rigorously”). It has, correspondingly, led economists to ignore or at least to underestimate the extent to which legal restrictions, including unit banking laws in the U.S. and the six-partner rule in England, contributed to the deficiencies of those countries’ banking systems. Finally, and most regrettably, it has caused economists to overlook altogether the possibility that the monopolization of paper currency has itself been more a cause of than a cure for financial instability.

      The good news is that Fedophilia is curable. Milton Friedman, for one, was a recovering Fedophile: later in his career, he repudiated the mostly-conventional arguments he’d once put forward in defense of a currency monopoly. Friedman, of course, was a special case: a famous proponent of free markets, he had more reason than most economists do to view claims of market failure with skepticism, even if he’d once subscribed to them himself. Even so, his was only a half-hearted change of heart, in part (I believe) because he still hadn’t drawn the lessons he might have from the banking experiences of countries other than the U.S. and England.

      Friedman’s case suggests that it will take some pretty intense therapy to deprogram other Fed inamoratos, including a regimen of required readings.

      Charles Conant’s History of Modern Banks of Issue will help them to overcome their historical parochialism.

      Vera Smith’s The Rationale of Central Banking will do more of the same, while also exposing them to the lively debates that took place between advocates and opponents of currency monopolies before the former (supported by their governments’ ravenous Treasuries) swept the field. 

      The Experience of Free Banking, edited by Kevin Dowd (with contributions by several Alt-M contributors including yours truly) gathers studies of a number of past, decentralized currency systems, showing how they tended to be more stable than their more centralized counterparts, while another collection, Rondo Cameron’s Banking in the Early Stages of Industrialization, shows that less centralized systems were also better at fostering economic development. Finally, instead of being allowed to merely pay lip service to Walter Bagehot’s Lombard Street, Fedophile’s should be forced, first to read it from cover to cover, and then to re-read out-loud those passages (there are several) in which Bagehot explains that there’d be no need for lenders of last resort had unwise legislation not created centralized (“one reserve”) currency systems in the first place. The last step works especially well in group therapy.

      Of course, even the most vigorous deprogramming regimen is unlikely to alter the habits of hard-core Fed enthusiasts. But it might at the very least make them more inclined to engage in serious debate with the Fed’s critics, instead of allowing the Fed’s apologists to go on believing that they answer those critics convincingly simply by rolling their eyes.


      Tyler Durden

      Sun, 02/16/2020 – 21:00

    4. China Central Bank Orders Lenders To "Tolerate" Higher Bad Debt Levels To Avoid Financial Cataclysm
      China Central Bank Orders Lenders To “Tolerate” Higher Bad Debt Levels To Avoid Financial Cataclysm

      Last week we reminded readers that unless Beijing manages to contain the coronavirus epidemic, China faces a fate far worse than just reported its first ever 0% (or negative) GDP print in history. For those who missed it, here it is again: back in November, we reported that as part of a stress test conducted by China’s central bank in the first half of 2019, 30 medium- and large-sized banks were tested; In the base-case scenario, assuming GDP growth dropped to 5.3% – nine out of 30 major banks failed and saw their capital adequacy ratio drop to 13.47% from 14.43%. In the worst-case scenario, assuming GDP growth dropped to 4.15%, some 2% below the latest official GDP print, more than half of China’s banks, or 17 out of the 30 major banks failed the test. Needless to say, the implications for a Chinese financial system – whose size is roughly $41 trillion – having over $20 trillion in “problematic” bank assets, would be dire.

      Well, with GDP set to print negative if Goldman is right (with risk clearly to the downside as China’s economy remains completely paralyzed)…

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      … every single Chinese bank is set to fail a “hypothetical” stress test, and the immediate result is an exponential surge in bad debt. The result, as we discussed in detail last week, is that the bad loan ratio at the nation’s 30 biggest banks would soar at least five-fold, and potentially far, far more, flooding the country with trillions in non-performing loans, and unleashing a tsunami of bank defaults.

      Of course, regular readers are well aware that China’s banks are already suffering record loan defaults as the economy last year expanded at the slowest pace in three decades while bankruptcies soared. As extensively covered here previously, the slump tore through the nation’s $41 trillion banking system, forcing not only the first bank seizure in two decades as Baoshang Bank was nationalized , but also bailouts at  Bank of Jinzhou, China’s Heng Feng Bank, as well as two very troubling bank runs at China’s Henan Yichuan Rural Commercial Bank at the start of the month, and then more recently at Yingkou Coastal Bank.

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      All that may be a walk in the park compared to what is coming next.

      “The banking industry is taking a big hit,” You Chun, a Shanghai-based analyst at National Institution for Finance & Development told Bloomberg. “The outbreak has already damaged China’s most vibrant small businesses and if it prolongs, many firms will go under and be unable to repay their loans.”

      According to a recent Bloomberg report, S&P estimates that a worst-case scenario (one which however saw GDP remain well in positive territory) would cause bad debt to balloon by 5.6 trillion yuan ($800 billion), for an NPL ratio of about 6.3%, adding to the already daunting 2.4 trillion yuan of non-performing loans China’s banks are sitting on (a number which, like the details of the viral epidemic, is largely massaged lower and the real number is far higher according to even conservative skeptics).

      S&P also expects that banks with operations concentrated in Hubei province and its capital city of Wuhan, the epicenter and the region worst hit by the virus, will likely see the greatest increase in problem loans. The region had 4.6 trillion yuan of outstanding loans held by 160 local and foreign banks at the end of 2018, with more than half in Wuhan. The five big state banks had 2.6 trillion yuan of exposure in the region, followed by 78 local rural lenders, according to official data.

      Meanwhile, exposing the plight of small bushiness, most of which are indebted to China’s banks, a recent nationwide survey showed that about 30% said they expect to see revenue plunge more than 50% this year because of the virus and 85% said they are unable to maintain operations for more than three months with cash currently available. Perhaps they were exaggerating in hopes of garnering enough sympathy from Beijing for a blanket bailout; or perhaps they were just telling the truth.

      Finally, the market is increasingly worried that all this bad debt will have a dire impact on bank assets: consider that the “big four” state-owned lenders, which together control more than $14 trillion of assets, currently trade at an average 0.6 times their forecast book value, near a record low. This also means that in the eyes of the market, as much as $6 trillion in bank assets are currently worthless.

      All of this led us to conclude last week that “nothing short of a coronavirus cataclysm faces both China’s banks and small businesses if the coronavirus isn’t contained in the coming weeks.”

      In retrospect, there is one thing we forgot to footnote, and that is that China could buy some extra time if the central bank suspend financial rules and moves the goalposts once again.

      And so, just three days after our first article on China’s looming bad debt catastrophe, that’s precisely what the PBOC has opted to do, because as Reuters writes, on Saturday the PBOC said that the country’s lenders will tolerate higher levels of bad loans, part of efforts to support firms hit by the coronavirus epidemic.

      “We will support qualified firms so that they can resume work and production as soon as possible, helping maintain stable operations of the economy and minimizing the epidemic’s impact,” Fan Yifei, a vice governor at the People’s Bank of China, told a news conference.

      He added that the problem will be manageable as China has a relatively low bad loan ratio.

      What the PBOC really means is that China’s zombie companies are about to take zombification to a preciously unseen level, as neither the central bank nor its SOE-commercial bank proxies will demand cash payments amounting to billions if not trillions of dollars from debtors, who will plead “force majeure” as part of their debt default explanation. In other words, we may be about to see the biggest “under the table” debt jubilee in history, as thousands of companies are absolved from the consequences of having too much debt.

      Separately, during the same briefing, Liang Tao, vice chairman of the China Banking and Insurance Regulatory Commission, said that lending for key investment projects will be sped up, while Xuan Changneng, vice head of the country’s foreign exchange regulator, said China was expected to maintain a small current account surplus and keep a basic balance in international payments. We wouldn’t hold our breath for a surplus if China is indeed producing nothing as real-time indicators suggest.

      And just so the message that debt will flow no matter what is heard loud and clear, on Friday, said Liang Tao, vice-chairman of the China Banking and Insurance Regulatory Commission said that financial institutions in the banking sector had provided more than 537 billion yuan ($77 billion) in credit to fight against the novel coronavirus outbreak as of noon on Friday.

      “The regulator will soon launch more measures to give stronger credit support to various industries,” said Liang at a news conference held by the State Council Information Office on Saturday. “It will continue to lead banks’ efforts on increasing loans to small and micro enterprises, making loans accessible to a larger number of small businesses, and further lowering their lending costs.”

      Hilariously, Liang highlighted the importance for banks to take accurate measures to renew loans for small businesses to reduce their financial pressure. It wasn’t clear just how burdening the small businesses with even more debt they will never be able to repay reduces financial pressure, but we can only assume that this is what is known as financial strategy with Chinese characteristics.

      The bottom line is simple: no matter how or when the coronavirus epidemic ends, the outcome for China – which already toils under an gargantuan 300% debt/GDP burden…

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      … will be devastating as more companies are encumbered by even more debt which they will never be able to repay, and once rates jump or the Chinese economy hits another pothole – viral or otherwise – the avalanche in defaults will be a sight to behold.


      Tyler Durden

      Sun, 02/16/2020 – 20:30

    5. Japan Unexpectedly Reports Terrible GDP As It Slides Into Recession
      Japan Unexpectedly Reports Terrible GDP As It Slides Into Recession

      One look at the latest GDP print out of Japan, and one would think the country’s economy was already being ravaged by the coronavirus: at -1.6% Q/Q and a whopping -6.3% annualized – nearly double the 3.8% estimated drop – this was the second worst GDP print since the financial crisis and the second-worst quarter of the Shinzo Abe era, surpassing even the drop in the aftermath of the Fukushima disaster.

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      Of course, the latest plunge in Japan’s GDP has nothing to do with the coronavirus as it took place in Q4, and the drop was largely a byproduct of the sale tax hike, which led to a similar collapse in Q2 2014 GDP, following the first such tax hike.

      One look at the GDP components confirms that the plunge was largely the result of collapsing consumption, with Houshehold Consumption plunging at an 11.5% annualized pace, the second biggest drop that Private Demand plummeted at an -11.1% annualized basis…

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      … the second worst on record, and also just behind the -18.1% drop recorded after the first sales tax hike in 2014.

      It wasn’t just households who retrenched, however, and as the following breakdown from Japan’s cabinet office reveals, in Q4, Japan’s capex fell fore the first time in 3 quarters, dragged down by construction and production machinery. Finally, the economic misery was complete as a result of a second consecutive drop in exports led by cars, as the global automotive sector remains mired in the deepest recession since the financial crisis.

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      And since Q1 GDP will likely be even worse due to the paralysis in Chinese supply chains which have knocked out a good part of Japanese domestic manufacturing indefinitely, today’s bleak GDP report means that a Japanese recession – definied as two quarters of negative GDP – is now just a matter of time.

      The unexpected plunge in Japan’s GDP triggered a kneejerk reaction of selling on the Topix, which slid more than 1% in early trading, though bond yields and the yen showed little reaction to the worst nominal GDP performance since Prime Minister Shinzo Abe took office (U.S. futures were of course higher, because the closer the world gets to depression, the more likely central bankers are to start buying, well, everything).

       


      Tyler Durden

      Sun, 02/16/2020 – 20:22

    6. Why Wasn't Andrew McCabe Charged?
      Why Wasn’t Andrew McCabe Charged?

      Authored by Andrew McCarthy via National Review.com,

      The proof that he willfully deceived investigators appears strong, but the Justice Department likely felt there were too many obstacles to convicting him.

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      The Justice Department announced Friday that it is closing its investigation of Andrew McCabe, the FBI’s former deputy director, over his false statements to investigators probing an unauthorized leak that McCabe had orchestrated. McCabe was fired in March 2018, shortly after a blistering Justice Department inspector general (IG) report concluded that he repeatedly and blatantly lied — or, as the Bureau lexicon puts it, “lacked candor” — when questioned, including under oath.

      Why not indict McCabe on felony false-statements charges? That is the question being pressed by incensed Trump supporters. After all, the constitutional guarantee of equal justice under the law is supposed to mean that McCabe gets the same quality of justice afforded to the sad sacks pursued with unseemly zeal by McCabe’s FBI and Robert Mueller’s prosecutors.

      George Papadopoulos was convicted of making a trivial false statement about the date of a meeting.

      Roger Stone was convicted of obstruction long after the special counsel knew there was no Trump–Russia conspiracy, even though his meanderings did not impede the investigation in any meaningful way.

      And in the case of Michael Flynn’s false-statements conviction, as McCabe himself acknowledged to the House Intelligence Committee, even the agents who interviewed him did not believe he intentionally misled them.

      I emphasize Flynn’s intent because purported lack of intent is McCabe’s principal defense, too. Even McCabe himself, to say nothing of his lawyers and his apologists in the anti-Trump network of bureaucrats-turned-pundits, cannot deny that he made false statements to FBI agents and the IG. Rather, they argue that the 21-year senior law-enforcement official did not mean to lie, that he was too distracted by his high-level responsibilities to focus on anything as mundane as a leak — even though he seemed pretty damned focused on the leak while he was orchestrating it.

      The “he did not believe he intentionally misled them” defense is not just implausible; it proved unavailing on McCabe’s watch, at least in General Flynn’s case. Hence, McCabe has a back-up plan: To argue that it would be extraordinary — and thus unconstitutionally selective and retaliatory — for the Justice Department to prosecute a former official for false statements in a “mere” administrative inquiry (which the leak probe was), as opposed to a criminal investigation. Again, tell that to Flynn, with whom the FBI conducted a brace-style interview — at the White House, without his counsel present, and in blithe disregard of procedures for FBI interviews of the president’s staff — despite the absence of a sound investigative basis for doing so, and whom Mueller’s maulers squeezed into a guilty plea anyway.

      It will be a while before we learn the whole story of why the Justice Department walked away from the McCabe case, if we ever do. I have some supposition to offer on that score. First, however, it is worth revisiting the case against McCabe as outlined by the meticulous and highly regarded IG, Michael Horowitz.

      If you want to know why people are so angry, and why they are increasingly convinced that, for all President Trump’s “drain the swamp” rhetoric, a two-tiered justice system that rewards the well-connected is alive and well, consider the following.

      In October 2016, McCabe directed his counsel, Lisa Page, to leak investigative information about the FBI’s Clinton Foundation probe to reporter Devlin Barrett, then of the Wall Street Journal. The leak had the effect of confirming the existence of the investigation, something the FBI is supposed to resist. While his high rank gave him the power to authorize such a disclosure if it were in the public interest, the IG found that McCabe’s leak “was clearly not within the public interest.”

      In fact, the Bureau’s then-director, James Comey, had tried to keep the Clinton Foundation probe under wraps, refusing to confirm or deny its existence even to the House Judiciary Committee. Comey had been right to stay mum: Public revelation would have harmed the probe and thrust the FBI deeper into the politics of the then-imminent 2016 presidential election, in which Hillary Clinton was the Democratic candidate and her investigation by the Bureau was an explosive campaign issue.

      Notwithstanding these concerns, according to Horowitz’s report, McCabe orchestrated the leak “to advance his personal interests” — to paint himself in a favorable light in comparison to Justice Department officials amid an internal dispute about the Clinton Foundation probe (specifically, about the Obama Justice Department’s pressure on the Bureau to drop it). As the IG put it: “McCabe’s disclosure was an attempt to make himself look good by making senior department leadership . . . look bad.”

      McCabe’s account has been contradicted by Comey, a witness who is otherwise sympathetic to him and hostile to the Trump Justice Department, and whose actions — like his — are being examined in prosecutor John Durham’s probe of the Trump-Russia investigation. Comey’s testimony is directly at odds with McCabe’s version of events, and the IG painstakingly explained why the former director’s version was credible while his deputy’s was not. (Comey was, nevertheless, exceedingly complimentary of McCabe after the IG report was published.)

      Page is regarded by McCabe backers as key to his defense. She reportedly told the grand jury that, because McCabe had authority to approve media disclosures, he had no motive to lie about the leak. That’s laughable. McCabe did serially mislead investigators, so plainly he had some reason for doing so. But even putting that aside, the IG’s conclusion was not that McCabe lacked authority to leak; it was that he lacked a public-interest justification for exercising that authority. He leaked for self-promotion purposes, and then he lied about it because it was humiliating to be caught putting his personal interests ahead of the Bureau’s investigative integrity. That said, Page’s account does illuminate a problem for prosecutors: It’s tough to win a case when your witnesses are spinning for the defendant. (Oh, and have you seen Page’s tweet toasting McCabe in the aftermath of the news that the DOJ had closed the investigation?)

      McCabe’s Multiple False Statements

      Barrett’s Journal article appeared on October 30, 2016. The very next day, McCabe deceived Comey about it, indicating that he had not authorized the leak and had no idea who its source was. In Comey’s telling, credited by the IG, McCabe “definitely” did not acknowledge that he had approved the leak.

      Thereafter, the FBI’s Inspection Division (INSD) opened an investigation of the leak. On May 9, 2017, McCabe denied to two INSD investigators that he knew the source of the leak. This was not a fleeting conversation. McCabe was placed under oath, and the INSD agents provided him with a copy of Barrett’s article. He read it and initialed it to acknowledge that he had done so. He was questioned about it by the agents, who took contemporaneous notes. McCabe told the agents that he had “no idea where [the leaked information] came from” or “who the source was.”

      On July 28, 2017, McCabe was interviewed by the IG’s office — under oath and recorded on tape. In that session, he preposterously claimed to be unaware that Page, his FBI counsel, was directed to speak to reporters around the time of the October 30 Journal report. McCabe added that he was out of town then, and thus unaware of what Page had been up to. In point of fact, McCabe had consulted closely with Page about the leak. A paper trail of their texts and phone contacts evinced his keen interest in Page’s communications with Barrett. Consequently, the IG concluded that McCabe’s denials were “demonstrably false.”

      Clearly concerned about the hole he had dug for himself, McCabe called the IG’s office four days later, on August 1, 2017, to say that, shucks, come to think of it, he just might have kinda, sorta told Page to speak with Barrett after all. He might even have told her to coordinate with Mike Kortan, then the Bureau’s top media liaison, and follow-up with the Journal about some of its prior reporting.

      As the IG observed, this “attempt to correct his prior false testimony” was the “appropriate” thing for McCabe to do. Alas, when he was given an opportunity to come in and explain himself, he compounded his misconduct by making more false statements while under oath: In an interview with investigators on November 29, 2017, McCabe purported to recall informing Comey that he, McCabe, had authorized the leak, and that Comey had responded that the leak was a good idea.

      These were quite stunning recollections, given that the deputy director had previously disclaimed any knowledge about the source of the leak. But McCabe took care of that little hiccup by simply denying his prior denial. That is, he insisted that he had not feigned ignorance about the leak when INSD interviewed him on May 9. Indeed, McCabe even denied that the May 9 interview had been a real interview. To the contrary, he claimed that agents had casually pulled him aside at the conclusion of a meeting on an unrelated topic, and peppered him out of the blue with a question or two about the Journal leak. As General Flynn could tell you, that sort of thing can be tough on a busy top U.S. government official . . . although Flynn did not get much sympathy for it when McCabe was running the FBI.

      Again, the IG concluded that McCabe’s version of events was “demonstrably false.”

      McCabe Covers His Tracks

      As an old trial lawyer, I’d be remiss if I failed to rehearse my favorite part of the IG’s report — the part that would tell a jury everything they needed to know about good ol’ Andy McCabe.

      Again, the Journal story generated by McCabe’s leak was published on October 30, a Sunday. Late that afternoon, McCabe called the head of the FBI’s Manhattan office. Why? Well . . . to ream him out over media leaks, that’s why. McCabe railed that New York agents must be the culprits. He also made a similar call to the Bureau’s Washington field office, warning its chief to “get his house in order” and stop these terribly damaging leaks.

      It is worth remembering McCabe’s October 30 scolding of subordinates when you think about how he later claimed that, on the very next day, he’d freely admitted to his superior, Comey, that he himself was the source of the leak. Quite the piece of work, this guy: To throw the scent off himself after carefully arranging the leak, McCabe dressed down the FBI’s two premier field offices, knowing they were completely innocent, and then pretended for months that he knew nothing about the leak.

      This is the second-highest-ranking officer of the nation’s top law-enforcement agency we’re talking about, here.

      The Non-Prosecution Decision

      We may never get a satisfying explanation for the Justice Department’s decision to drop the McCabe probe. That’s the way it is when such complicated reasons and motives are at play.

      The aforementioned challenge of hostile witnesses is not to be underestimated. In addition, there are growing indications that the Justice Department had lost confidence in the U.S. attorney who was overseeing the probe, Jesse Liu. As I noted this week, while Liu was once seen as a rising Trump administration star, she was quietly edged out of her post last month, and the White House just pulled her nomination to fill an important Treasury Department post.

      There have been rumblings that the McCabe investigation was botched. Kamil Shields, a prosecutor who reportedly grew frustrated by her supervisors’ inordinate delays in making decisions about the McCabe probe, ultimately left the Justice Department to take a private-practice job. Another prosecutor, David Kent, quit last summer as DOJ dithered over the decision on whether to prosecute. Things became so drawn out that the investigating grand jury’s term lapsed. Meanwhile, the Justice Department endorsed Liu’s aggressive decision to bring a thin, politically fraught false-statements case against former Obama White House counsel Greg Craig, in connection with lobbying for a foreign country — the sort of crime that is rarely prosecuted. Craig was swiftly acquitted. Reportedly, Liu advocated charging McCabe, but the DOJ may have harbored doubts about her judgment.

      No matter the outcome, the Justice Department stood to take some hits if McCabe had been charged. Focus on McCabe’s leak would have drawn attention to pressure DOJ officials had put on the Bureau over the Clinton Foundation investigation (which, reportedly, is likely to be closed without charges). It would also renew interest in the question of whether the FBI improperly allowed McCabe to play a role in Clinton-related investigations when his wife, as a political candidate, got major funding from Clinton-tied sources.

      Moreover, new Freedom of Information Act disclosures — made to meet a deadline set by District Judge Reggie Walton, which may explain the timing of the non-prosecution announcement — indicate that the Justice Department and FBI did not comply with regulations in what appears to be the rushed termination of McCabe, adding heft to the former deputy director’s claim that he was being singled out for abusive treatment, potentially including prosecution, because of vengeful politics.

      On that score, Judge Walton took pains to decry the fusillade of tweets directed at McCabe by President Trump. I must note here that if a district U.S. attorney publicly labeled as a liar a suspect the Justice Department had indicted for false statements, that U.S. attorney would be sanctioned by the court. The U.S. attorneys, like the rest of the Justice Department, work for Trump. The president is correct when he insists, as he did this week, that he has the constitutional power to intervene in Justice Department matters. But that means he is subject to the same legal obligations that inhibit his Justice Department subordinates. Those obligations include protecting McCabe’s right to a fair trial — a duty the president may chafe at, but which is part of the deal when you take an oath to preserve the Constitution and execute the laws faithfully.

      If you envision Judge Walton as part of the Obama-appointed robed resistance, check your premises. He is a no-nonsense jurist originally named to the D.C. Superior Court by President Reagan, and then to the federal district court by President George W. Bush. As Politico reports, he had this to say about President Trump’s commentary on the McCabe investigation:

      The public is listening to what’s going on, and I don’t think people like the fact that you got somebody at the top basically trying to dictate whether somebody should be prosecuted. . . . I just think it’s a banana republic when we go down that road. . . . I think there are a lot of people on the outside who perceive that there is undo inappropriate pressure being brought to bear. . . . It’s just, it’s very disturbing that we’re in the mess that we’re in in that regard. . . . I just think the integrity of the process is being unduly undermined by inappropriate comments and actions on the part of people at the top of our government. . . . I think it’s very unfortunate. And I think as a government and as a society we’re going to pay a price at some point for this.

      If you want to know why Attorney General Barr was warning this week that the president’s tweets are undermining the Justice Department’s pursuit of its law-enforcement mission, Judge Walton’s words are worth heeding. I have been making this point since the start of the Trump presidency. If you want people held accountable for their crimes, you have to ensure their fundamental right to due process. When the government poisons the well, the bad guys reap the benefits.

      Finally, we must note that when the District of Columbia is the venue for any prosecution with political overtones, Justice Department charging decisions must factor in the jury pool, which is solidly anti-Trump.

      The proof that McCabe willfully deceived investigators appears strong — it is noteworthy that IG Horowitz, who has strained to give the FBI the benefit of the doubt in many dubious contexts, was unequivocal in slamming McCabe. Nevertheless, a D.C. jury would be weighing that evidence, as discounted by whatever pro-McCabe slant reluctant prosecution witnesses put on it. And the jury would be weighing against that evidence (a) whatever problems caused prosecutors at the U.S. attorney’s office to beg off, and more significantly, (b) defense arguments that McCabe would not have been fired or prosecuted if not for the fact that he had gotten crosswise with a president of the United States whom at least some of the jurors are apt to dislike.

      Looking at all that baggage, the Justice Department must not have liked its chances.

      McCabe is not out of the woods yet, of course: The Durham investigation is a separate matter, and it is continuing. But it is unclear whether he will face any criminal charges arising from that inquiry, whereas the now-dead-and-buried false-statements case against him looked cut-and-dried.

      The FBI’s former deputy director, though he undeniably misled investigators, remains a commentator at CNN. In the meantime, Papadopoulos is a felon convicted and briefly imprisoned for misleading investigators, while Flynn and Stone are awaiting sentencing on their false-statements charges. That covers both tiers of our justice system.


      Tyler Durden

      Sun, 02/16/2020 – 20:00

    7. Venezuela Stages Massive Live-Fire War Drill Amid Invasion Threats
      Venezuela Stages Massive Live-Fire War Drill Amid Invasion Threats

      A week after President Trump met with Venezuelan opposition leader Juan Guaidó at the White House and reiterated his support to remove President Nicolás Maduro from power, Venezuela’s armed forces and civilian militias staged a massive war drill over the weekend, reported Telesur. 

      The meeting between Trump and Guaidó on Feb 5 was nothing short of historic, suggests that the US could support a future military intervention to remove the Maduro regime. 

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      The Trump administration has been tightening political, diplomatic, and economic screws on Maduro, but despite a crashed economy and hyperinflation, the regime continues to survive. 

      Back in 2017, Trump said he is “not going to rule out a military option” to confront the Venezuelan president.

      Tensions in 2019 ran high after Guaido’s failed attempt to overthrow the regime. 

      Last month, Guaido was denied entry into the country’s National Assembly for his re-election as head of Congress, only to be reelected for a second term as speaker of parliament hours later.

      The country continues to descend into chaos, and it appears that Maduro understands military intervention by Washington, or at least maybe a proxy force of some sort, could be imminent. 

      Maduro’s response to this lingering threat was to launch one of the most massive war drills the country has seen in years this weekend, called Bolivarian Shield 2020.

      The objected of the exercise is to strengthen national defenses against armed aggressions: 

      “We started the Bolivarian Shield 2020 Exercise, with the deployment of our glorious FANB (Bolivarian National Armed Forces) in a Civic Military Union, with more than 2 million 300 thousand combatants mobilized to defend territorial integrity, independence and national sovereignty. We will preserve the Peace!” Maduro said. 

      Venezuelan Minister of Defense Vladimir Padrino tweeted that Bolivarian Shield 2020 Exercise will be conducted through the weekend and across the country. It will help Maduro prepare and face future threats of “aggression” from Washington.

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      Padrino tweeted another video of the drills that shows an assortment of weapons being used, from small arms to surface to air missiles. 

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      AFP’s Yuri Cortez tweets pictures of an infantry battalion securing streets in Caracas. 

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      Ahead of this weekend’s mass military exercises across the country, CNW tweeted pictures of heavy military equipment being deployed. 

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      So, could a military intervention in Venezuela to rid Maduro of power be the next big distraction from a recession-prone US economy? 


      Tyler Durden

      Sun, 02/16/2020 – 19:30

    8. Real Energy Independence Is An Illusion
      Real Energy Independence Is An Illusion

      Authored by Anes Alic via OilPrice.com,

      Ultimately, energy independence is an illusion in the era of globalization because the hyper connectedness of the market makes it impossible. Still, it’s a never-ending battle cry that ends up being an argument of semantics, the outcome of which depends on how you define “independence”.  

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      America’s ongoing oil and shale boom has reignited the debate about something that the nation had long come to consider a far-off dream: energy independence.

      The notion that the country could become self-sufficient by producing enough energy to sustain the entirety of its population and industries was first floated by Nixon when he declared war on foreign oil during the oil crisis of the 1970s. 

      It was later popularized by Bush in a state of the union address in February 2006 when he decried United States’ addiction to oil, which is often imported from unstable parts of the world before announcing plans to break this addiction by developing several alternatives, including a multibillion-dollar subsidized ramp-up of biofuels. 

      Bush went on to boldly declare that by 2025, America would “…make our dependence on Middle Eastern oil a thing of the past” by cutting imports from Gulf states by three-quarters.

      Well, it turns out the former president was prescient on some key predictions, which in hindsight appears quite remarkable when you consider that back then, the shale industry was barely on its feet. The shale era now is in full swing, with Trump, uncharacteristically, preferring to describe it using the somewhat less boisterous moniker of a “new era of American energy dominance”.

      But the devil is in the details in any discussion as to whether America is any closer to true energy independence than during Nixon’s time or whether it is a populist charade masquerading as an energy strategy. There’s a third option, too: It’s simply misunderstood. 

      Net Oil Exporter

      For many years, the United States has been the leader in the $6 trillion global energy market, and is currently the world’s largest oil producer accounting for about 18 percent of global oil supply. But it has also been a leading importer of energy with foreign markets supplying about 20 percent of its needs.

      However, the country recently achieved a key tenet of energy independence: becoming a net exporter of petroleum – which includes crude oil and petroleum products. In 2019, the US became a net petroleum exporting nation for the first time in 75 years with the latest data by U.S. Department of Energy (November 2019) showing that the country exported around 750,000 b/d more than it imported – the third consecutive month it did so.

      But this ‘net exporter’ tag comes with an asterisk: US crude oil imports, specifically, averaged 5.8 million b/d in November vs. 3.0 million b/d for exports with the US Gulf Coast being the only region that exports more crude oil than it imports.

      Indeed, US crude imports have remained stubbornly high even during the shale boom thanks to healthy domestic demand. US crude oil production has shot up 160 percent to over 13 million b/d since the advent of the shale era; meanwhile, domestic demand has remained flat but very high at 19-21 million b/d.

      In 2019, the country still imported 9.1 million b/d of petroleum and other liquids, with 6.8 million b/d of those being crude oil, due to constraints such as regional supply/demand imbalances, infrastructural challenges and other factors. Further, many of the refineries in the United States optimized to process the heavier crude grades from Canada, Venezuela, and Mexico instead of the lighter, sweeter oil crude from its own shale fields. 

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      Source: EIA

      The main consolation here is that a bigger proportion of its oil imports have been coming from its northern ally with crude imports from Canada clocking in at 134 million barrels in 2019 from 76 million in 2008. As Bush predicted, the United States is no longer as heavily reliant on OPEC for its oil, with the cartel supplying less than 30 percent of imports.

      Sensitivity To World Oil Price Swings

      True energy independence, however, goes beyond the mere supply-demand equation.

      True energy independence means that the United States not only supplies all its oil needs but also that its oil markets are inured from disruptions by events in foreign markets. In other words, the Department of Defense and the American consumer should no longer be at the mercy of global energy price swings.

      The reality here, however, is very different. This often hits home when major supply/demand shocks, such as the Saudi drone attacks, occur. 

      Although one could certainly argue that the shale boom has watered down OPEC’s influence, offering a level of insulation against price shocks when OPEC restricts output, the United States has hardly separated itself from the world’s energy stage.

      Oil prices spiked 20 percent in the aftermath of the attacks and remained 10 percent higher for weeks despite Saudi Arabia having enough reserves to last several weeks and quickly restoring production. As the Times noted, had this attack happened a decade ago, oil prices would probably have spiked way higher and rocked the global economy. Still, it was a stark reminder that energy sources like oil, coal and natural gas just cannot hide from global fluctuations.

      The basic problem here is fungibility. Whereas there are no shortages of barriers to free trade across the globe ranging from tariffs and legal sanctions to the more practical problems of price and infrastructure, consumers of fossil fuels are generally able to access them from producers from all over the globe. The US produces 18 percent of the world’s oil and as such, it has some clout to sway global markets, but it is only one moving part that affects the remaining 82 percent of the world’s oil supply.

      The only way to be truly independent of these risks is by not using these energy sources at all – by going green.

      Renewable energy sources such as solar have their limitations, too, since they require special elements and metals such as gallium, indium, tellurium, neodymium, europium, yttrium, terbium and dysprosium that frequently have to be imported or mined domestically at great environmental costs. But unlike fossil fuels, these elements are not the energy source itself but rather part of the tech that makes them possible and can therefore be substituted and replaced through innovation.

      In the final analysis, all this talk of “energy independence” and ” energy dominance” is all about becoming the masters of our own fate. This is something that we clearly cannot achieve when still relying on fossil fuels for the bulk of our energy, and going entirely green is the closest we will ever get to true energy independence.


      Tyler Durden

      Sun, 02/16/2020 – 19:05

    9. It's "The 1%" vs Everyone Else: FAAMG Earnings Soar As Russell 2000 EPS Growth Craters
      It’s “The 1%” vs Everyone Else: FAAMG Earnings Soar As Russell 2000 EPS Growth Craters

      The earnings recession which lasted for all of 2019, is finally coming to an end. According to Factset, with a majority of companies reproting, the blended earnings growth rate for the S&P 500 for the fourth quarter is 0.7% as of February 7. This growth rate is above the estimated earnings decline of -1.7% at the end of the quarter (December 31).

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      More importantly, if 0.7% remains the actual growth rate for Q4 after all companies have reported, it will mark the first time the index has reported year-over-year growth in earnings since Q4 2018 (13.3%), and will represent an end to the earnings recession that lasted for all of 2019. As such, it is not surprising that the index is now reporting earnings growth for the fourth quarter.

      This long-awaited rebound in EPS – which is mostly a byproduct of the ravenous stock buybacks unleashed by tech companies – comes at a key time, just as the world asks what the economic growth impact in China and pass-through to
      the US economy will be as a result of the coronavirus pandemic.

      So back to the actual earnings season, where as Goldman’s David Kostin writes, 49% of S&P 500 companies beat consensus EPS estimates by more than one standard deviation, slightly above the long-term average of 46%. The Goldman strategist observes that companies that beat EPS estimates outperformed the S&P 500 by +113 bp the day after reporting, consistent with history. However, investors punished companies missing consensus estimates; firms that missed lagged the S&P 500 by -334 bp, underperforming by much more than the long-term average of -211 bp. This suggests that with stocks priced to perfection, even modest deviations from expectations are promptly punished by the market.

      Unlike Factset, which sees earnings growth of just 0.7%, Goldman’s calculations find that S&P EPS will grow by 2%, after they were expected to fall by 1% at the start of the season.

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      Much of the earnings disappointment is due to energy companies: excluding the 40% drop in Energy EPS, S&P 500 EPS grew by an even stronger 5% in the quarter, while overall S&P 500 sales grew by 6%, in line with the 6% forecast, and while net profit margins fell by 68 bp in the fourth quarter, the decline was less than originally anticipated (-100 bp). Finally, the main reason why companies are beating is Trump himself: i.e., a much lower effective tax rate than expected (17% vs. 20%) aided in company margin beats, even as overall margins contracted in every sector in the S&P 500 and declined in aggregate for the fourth consecutive quarter.

      Which brings us to the most fascinating aspect of Q4 earnings season, namely the impact of what Morgan Stanley previously called “The other 1 percent“: the outsized influence of the five biggest companies in the S&P.

      As Goldman notes, results were disparate across the size spectrum, with the 5 largest stocks (FB, AMZN, AAPL, MSFT, GOOGL) disproportionately boosting aggregate S&P 500 results in 4Q. As Morgan Stanley first noted a month ago, FAAMG account for 18% of S&P 500 market cap and 14% of S&P 500 earnings.

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      During the fourth quarter, these 5 stocks posted an average earnings surprise of +20%, compared with just 4% for the average S&P 500 company. And the most striking conclusion from earnings season: the “other 1%”, i.e., FAAMG, grew EPS by 16%, compared with 0% for the S&P 500 excluding these five stocks, or as Goldman puts it, “mega-cap earnings strength contrasts with small-cap earnings weakness.”

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      As shown in the chart above, while the 5 biggest companies are just getting bigger as they stretch their monopolistic wings, scorching EPS growth of 16% Y/Y, the rest of the market is suffering, and the Russell 2000 experienced a whopping 7% earnings drop during the fourth quarter, as many smaller firms posted weak top-line growth and had difficulty absorbing rising wages and other input costs. The Russell 2000 has lagged the S&P 500 by 175 bp since the start of earnings season (+1% vs. +3%).

      So what happens next as investors turn their attention to Q1 earnings which will be adversely affected by the Coronavirus impact?

      Here, as Goldman writes, consensus 2020 EPS estimates have been revised lower since the start of earnings season, matching the historical pattern, after initially suggesting a sharp EPS growth reacceleration.

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      Of course, consensus estimates are typically too optimistic, and since 1985, during the entire estimate period, bottom-up estimates have been revised higher during just 7 years. The 2020 EPS estimate has been cut by 0.7% during the past month and 1.2% during the past 3 months. The magnitude of revisions is roughly in line with the historical trend.

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      And while the macro environment today appears broadly consistent with Goldman’s baseline assumptions, the bank admits that earnings risks are tilted to the downside. In part due to the impact of the coronavirus, Goldman economists expect US and world GDP growth to average 2.3% and 3.2% in 2020, below its modeled baseline. In addition, the 15% decline in oil prices YTD (to $56 per barrel) could threaten the Energy EPS rebound in consensus estimates. However, there is some evidence that analysts have started to incorporate these downside risks. Earnings revisions in the commodity-exposed Energy sector have been the most negative across sectors. Some stocks likely to be affected by the coronavirus outbreak, such as airlines, cruises, and stocks with high China sales, have also experienced more negative EPS revisions than sector peers. As expected, stocks with high exposure to China have lagged the S&P 500 by 360 bp since late January, although so far the one sector most exposed to China, namely tech…

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      … has been virtually immune to any selling largely thanks to the wave of buybacks these tech companies deploy any time there is even a modest pullback.

      Finally, margins remain a risk for investors and Goldman expects only limited margin expansion through 2021. Although part of the 65 bp of margin contraction in 2019 was due to a few large Energy and Semiconductor companies, rising input costs also weighed on corporate profitability. The US economy is in the 11th year of the economic expansion and the unemployment rate stands near its lowest level since 1969. The tight labor market has pushed the Goldman Wage Tracker to 3.4%, the highest level this cycle, and average hourly earnings growth has risen by 3%+ in each of the last 18 months. As an example, the share of NABE respondents reporting rising wage and input costs has been much higher than the share reporting higher prices charged to consumers, illustrating margin pressures.

      The bottom line is that while tech managed to salvage Q4 earnings, unless the coronavirus epidemic is contained and China’s economy reboots itself and goes back to normal in the coming days, the earnings recession will promptly return with a vengeance, and this time it will be the tech companies who are hardest hit, potentially triggering the first bear market since the brief “2018 Christmas Eve” massacre, which ended with one phone call from Steven Mnuchin to the banks. Alas, if techs tank this time, no amount of calls will have any impact on the market.

       


      Tyler Durden

      Sun, 02/16/2020 – 18:48

    10. Pento: Maniacal Money Printers Have Gone Mad Fighting China Virus
      Pento: Maniacal Money Printers Have Gone Mad Fighting China Virus

      Via Greg Hunter’s USAWatchdog.com,

      Money manager Michael Pento has long warned about China’s rapid accumulation of debt that now stands at $40 trillion. The coronavirus coming out of China is only going to make China’s problems far worse.

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      Pento explains, “China has the biggest amassing of debt the world has ever seen and at the fastest pace never before matched in history…”

      “This is a country teetering on meltdown. Multinational companies like Nike, Apple and Google…

      major U.S. corporations are saying we cannot give accurate readings for what’s going to happen in all of 2020, and yet Wall Street doesn’t care.  It is because China, the United States and all the other central banks are printing money like never before trying to mollify the effects of this virus…

      We are going to have a global recession in the first quarter of 2020. U.S. GDP will be lucky if it gets to 1%. Singapore is warning about a recession. Australia is warning about a recession. The Eurozone, which is China’s biggest customer, is going to be in a recession.

      Nobody cares because the maniac money printers have gone mad….

      China is a country with $40 trillion in destabilizing debt. David Stockman calls it the Red Ponzi, and I could not agree more. Then you are taking a country that is already decelerating rapidly from before… Their stock market has already been cut in half, and then you throw into this the coronavirus, which has virtually shut down the entire nation. It’s the second biggest economy on planet Earth, and Wall Street doesn’t care. ”

      Pento also points out, “If they keep aggressively printing all of this money, and clearly Jerome Powell (Fed Head) told you they are going to print money aggressively and never let interest rates rise…and if the next recession appears, ‘we are going to aggressively go back into quantitative easing.’ That is a quote…

      How much longer can the markets still deem the fiat currencies to hold their purchasing power? Eventually, that bubble, the faith in the purchasing power of all fiat currencies, is going to explode. That’s when you see gold become untethered.”

      Pento also says,

      “Central banks are impotent because the only thing they can do is print more money. You cannot tell a market that has lost faith in currencies, and has lost faith in the ability to service debt, that you are going to solve the problem by creating more inflation. That is coming. That’s going to be the real problem, and that is going to be the real threat.”

      In closing, Pento predicts, “The economic data for the next few weeks, at a minimum, is going to be rancid beyond belief...”

      “I would be very cautious in thinking that the trading algorithms and the tape reading machines on Wall Street are going to ignore all of that, especially if this virus starts to spread to other nations in a more significant manner. Then it’s going to be game over.”

      Pento likes gold and silver and recommends some in every portfolio. Pento is overweight gold between the two metals. Pento is on record here predicting a “global recession in 2020” if the China virus does not get fixed soon.

      Join Greg Hunter as he goes One-on-One with money manager Michael Pento.

      To Donate to USAWatchdog.com Click Here  This video has been demonetized so it must have important information.  Enjoy!!


      Tyler Durden

      Sun, 02/16/2020 – 18:15

    11. China Adopts 'Cultural Revolution-Style' Social Controls To Crush Outbreak As Death Toll Nears 2,000
      China Adopts ‘Cultural Revolution-Style’ Social Controls To Crush Outbreak As Death Toll Nears 2,000

      Summary:

      • Taiwan reports 1st coronavirus death
      • Hubei reports 1,933 new cases, 100 deaths
      • Hubei health officials report 1,933 new cases, 100 new deaths
      • Taiwan taxi driver who died from virus carried passengers from mainland, Hong Kong, Macau
      • Singapore reports 3 more cases
      • Total cases aboard ‘Diamond Princess’ climbs to 355 as US prepares to evacuate citizens
      • Indonesia says 6 passengers from Westerdam cruise ship tested negative
      • There are now at least 68,500 cases worldwide, and at least 1,665 deaths from the Covid-19 virus
      • Japan found 70 more cases aboard the Diamond Princess cruise ship
      • Second African confirms suspected coronavirus case
      • Hubei province, the outbreak’s epicenter, reported fewer new infections for the second day
      • Bill Gates warns “10 million deaths” possible in Africa
      • China’s facemask shortage likely won’t be over anytime soon
      • WHO says Beijing’s actions bought the world time, but “we don’t know how much time”

      * * *

      Update (1750ET): Health officials from Hubei Province have released the latest round of figures from Sunday. They announced 1,933 new confirmed cases and 100 new deaths for Feb. 16.

      The new figures bring the totals for the province to 58,182 cases, and 1696 deaths in the province. These data bring total cases around the globe north of 71,000, while the death toll rapidly approaches 2,000.

      As the Communist Party tries to get the country back to work, 760 million people are now under quarantine.

      In the latest NYT story chronicling the situation on the ground in the areas worst-hit by the virus, the paper notes that the virus response has revived a type of Cultural Revolution-era social controls – relying on everyday citizens to spy and inform on their neighbors, and report anybody not in compliance with government guidelines.

      China has flooded cities and villages with battalions of neighborhood busybodies, uniformed volunteers and Communist Party representatives to carry out one of the biggest social control campaigns in history.

      The goal: to keep hundreds of millions of people away from everyone but their closest kin.

      The nation is battling the coronavirus outbreak with a grass-roots mobilization reminiscent of Mao-style mass crusades not seen in China in decades, essentially entrusting front line epidemic prevention to a supercharged version of a neighborhood watch.

      Venture outside without your facemask at your own risk.

      * * *

      Update (1600ET): The US has reportedly chartered 2 Boeing 747s to evacuated hundreds of desperate and terrified passengers aboard the ‘Diamond Princess’ cruise ship under quarantine in Yokohama. The ships have just landed in Tokyo, according to CNN.

      As the Americans scrambled to prepare for takeoff, Japanese health officials confirmed another 70 cases of coronavirus among the ship’s passengers and crew. The number of confirmed cases has climbed to 355.

      “Can’t get off here fast enough,” Sarah Arana, 52, a medical social worker from Paso Robles, Calif., told the NYT.

      Passengers have been told that there will be no room for carry-on luggage, so all baggage needed to fit under the seat.

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      Late in the afternoon, as buses lined up on the pier, American officials dressed in protective suits knocked on the cabin doors of American citizens to inform them that they needed to put their luggage out at 6 p.m. to prepare for the 9 p.m. transfer.

      Japan has recorded the highest number of infections from the new coronavirus outside mainland China: 414, if one includes the ‘Diamond Princess’ cases.

      It’s worth noting that the US evacuation is taking place just days before the end of the quarantine, on Feb. 19. At that point, anybody still aboard the ship who hasn’t contracted the virus will be free to leave. Some Americans who initially signed up for the evacuation flight have changed their minds.

      Some remained hesitant about whether to take the charter flight. Linda Tsukamoto, 63, a retired retail manager from Marina del Rey, Calif., said she had signed up for the evacuation flight, but changed her mind at the last minute.

      Ms. Tsukamoto stuck a Post-it note on her door reading: “I’m staying.” Three military doctors came to her door and advised her to go. Their emphatic tone, she said, was “scary,” but she is standing her ground.

      “I’d rather go home first class on United Airlines than a cold, noisy military charter when the Japanese Ministry of Health releases us,” she said. “I refuse to be fearful but respect the U.S. government to help others who feel more comfortable rushing home.”

      As we mentioned earlier, 40 Americans who have contracted the virus will be left behind in a Japanese hospital under quarantine. But we must admit:  Tsukamoto has a point.

      Meanwhile, Italy’s foreign minister said Sunday the Italian government is planning to rescue the 35 Italians still aboard the ship.

      * * *

      Update (1140ET): It’s almost Monday in China. Here’s a smattering of updates from the region as the number of confirmed cases ex-China is starting to go exponential. If these cases continue accelerating, it will soon become impossible for the Chinese government to continue rigging their data.

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      First, Malaysia reports that six passengers who have been quarantined since arriving in the country from Cambodia after disembarking from the Westerdam cruise ship have tested negative for the virus. Yesterday, we reported that an 83-year-old American woman tested positive for the virus after flying to Kuala Lumpur.

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      As we noted earlier, the Taiwanese man who succumbed to the virus was a taxi driver who apparently carried three fares all returning from China, Hong Kong and Macau. The three fares are being tracked very closely by the government in Taiwan. The man also had a history of diabetes and hep B.

      Singapore’s ministry of health reported three new cases, two of which appear to be linked to a cluster of cases at the Grace Assembly of God church, Bloomberg reports.

      Following reports that one of Wuhan’s hastily constructed hospitals is already falling down, a hospital head in the city appeared on state television to insist that a “turning point has been reached” in the government’s fight to suppress the virus. ‘Experts’ speaking to Xinhua on Sunday parroted the message from the regime and insisted that the outbreak will only leave a slight dent in the economy.

      * * *

      As we move into the late evening hours of Sunday on mainland China, Taiwan has become the latest country or territory to report a virus-related fatality, the SCMP reports. They join Hong Kong, Japan and the Philippines in having reported virus-related deaths outside China.

      Here are the latest global totals from SCMP:

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      Island says fatality was a 60-year-old unlicensed taxi driver with chronic health problems.

      Meanwhile, in the latest statement from the WHO, the international health organization seemed to back away from its newly hostile tone toward China, saying Beijing’s actions bought the world time, but “we don’t know how much time.”

      As the world’s greatest minds examine the epidemic, it’s worth remembering that Bill Gates has repeatedly  warned us that humanity isn’t ready for the next pandemic.

      Now, he’s repeating those warnings to an even larger crowd – but this time, with far more gravitas.

      The Microsoft founder warned everyone during a speaking engagement at a conference on Friday that a Covid-19 outbreak in Africa could overwhelm the continent’s health services and trigger “10 million deaths,” reported The Telegraph.

      Gates’ warning at the 2020 American Association for the Advancement of Science (AAAS) Annual Meeting in Seattle on Friday came hours before Egypt’s ministry of health confirmed that a 33-year-old male foreigner who flew into Cairo International Airport had tested positive for the virus. Authorities said the infected man had 17 contacts and many interactions at the airport before testing positive.

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      Gates said: “This is a huge challenge. We’ve always known the potential for a naturally caused, or intentionally caused, pandemic is one if the few things that could disrupt health systems and economies and cause more than 10 million excess deaths.”

      “This could be particularly if it spreads in areas like sub-Saharan Africa and some Asia, it could be very, very dramatic.”

      He added that Covid-19 is more concerning than Ebola because the rate of which the disease spreads is far faster.

      “Ebola is terrible, but it’s not like a lightning flu,” he said.

      “This coronavirus has a lot of similarities to a very bad flu, in terms of the death rate, so far more like the 1957 flu outbreak,” Gates said.

      “This disease, if it’s in Africa it’s more dramatic than if it’s in China, even though I’m not trying to minimize what’s going on in China in any way,” he said.  

      The risk, as Gates points out, is that the virus could spread to Africa next, where governments, even governments that have been bracing for an outbreak by readying beds and quarantines while stockpiling supplies, might still risk a rapid transmission that could lead to a health crisis far worse than China.

      On Saturday, Africa Centers for Disease Control and Prevention’s (Africa CDC) director Dr. John Nkengasong said Africa CDC has been working with African countries “in preparedness and response to the disease.” 

      The Health Ministry in Eswatini, a tiny southern African country, identified its first suspected case of the deadly on Friday. 

      Director of Health Services in Eswatini, Dr. Vusi Magagula, said the person had been placed in quarantine, and blood samples have been taken for further analysis, reported SABC News. 

      “She presented with a fever and was at the hospital, then the rapid response team took over and took up the case. She came through the Ngwenya Port of Entry on February 6 having arrived from the Republic of South Africa. I don’t think she was presenting with any symptoms, we only picked her up on the 14th because she was already now in hospital, ill and had to be admitted to the isolation ward. So I guess when she passed through or even through Ngwenya border post, she didn’t have the symptoms.”

      Meanwhile, the Chinese Ambassador to South Africa warned South African nationals in China to not return for fear the virus could spread. 

      The African continent does not need another crisis, already battling locust plagues and food shortages. 

      But still the close economic ties between China and Africa are difficult to ignore.

      Africa is home to nearly one million Chinese, health officials across the continent are extremely worried that it’s only a matter of time before the breakout begins.

      As we detailed previously, Ethiopia’s Bole International airport is the leading African gateway to and from China. On average, 1500 passengers per day arrive from China. Ethiopia scans all passengers from Asia for symptoms, which essentially means taking their temperature.

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      Many of those passengers then fly on to other parts of Africa, where Chinese companies are doing business, and inadvertently spreading the virus to nations along the BRI (the Belt & Road Initiative). These are 2018 figures courtesy of Brookings.

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      The question of why no infections have been reported in Africa was raised via twitter by Jim Bianco, of Bianco Research, earlier this month: “did anyone on the continent actually get a testing kits to look for infected people?” he asked.

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      Fast forward one week: As we noted above, a case has already been confirmed in Egypt with a suspected case in Eswatini. With the understanding that Ethiopia international airport is a continental gateway for the Chinese.

      This could mean super-spreaders, during the incubation period, undetected by temperature readings or showing no symptoms, have likely invaded Africa from China via Ethiopia’s main airport, as it’s only a matter of time before cases on the continent could start increasing. 

      1000 Genomes Project has published a list of various types of people with the highest risks of contracting the virus. Several countries in Africa are seen on the list: 

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      And oddly enough, Gates has been warning about how the world needs to “prepare for pandemics in the same serious way it prepares for war.” 

      At the 2017 Munich Security Conference, Gates asked world leaders to “imagine that somewhere in the world a new weapon exists or could emerge that is capable of killing millions of people, bringing economies to a standstill, and casting nations into chaos. If it were a military weapon, the response would be to do everything possible to develop countermeasures,” he said at the 2017 event, adding that a “sense of urgency is lacking” when it comes to biologic threats.

      The outbreak continues to worsen over the weekend, despite China’s National Health Commission’s optically pleasing phony statistics of how confirmed cases and deaths declined for the third straight day. There were 2,009 new cases in mainland China on Sunday, bringing the total to 68,500. 

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      The government of Hubei province, the center of China’s virus outbreak, told residents on Sunday evening that a ban on vehicle traffic across the region will go into immediate effect to prevent further transmission of the virus. 

      According to the new conditions, only police cars, ambulances, military vehicles, and cars hauling essential goods are permitted on roads. Local authorities told companies not to resume work unless they have approval from officials, which will undoubtedly throw a wrench in the factories who were planning to open facilities last Monday. They could now be delayed even longer, which would start creating shortages of goods destined for the West for the spring and summer retail season. 

      Meanwhile, health officials on mainland China recently reported 2,009 new infections and 142 deaths from the coronavirus on Sunday. Hong Kong said it now had 57 cases of infection in the city after another man tested positive, while Hongkongers stranded on the Diamond Princess cruise ship in Japan learned they will face another 14 days quarantine when they arrive home.

      Meanwhile, as the US prepares its evacuation, 40 US passengers who have been infected have opted to go to a Japanese hospital rather than take the State Department flight. Anthony Fauci with the CDC said anyone showing symptoms of the virus will be blocked from the flight

       

      On Sunday, the SCMP, one of the most reliable chroniclers of the outbreak, published a story that investors might want to take note of: The facemask shortage in China – a big component of the general shortage of medical supplies – likely won’t be over any time soon, and will likely spread to other countries.

      Why? Because most of the big facemask makers are based in China, and their operations have been badly restricted by the outbreak.

      China’s dominance in the global supply chain as a result of competitive pricing has come back to bite the country where it currently hurts the most – in the manufacturing of medical facial masks, a shortage of which is intensifying as the coronavirus continues to spread across the country and around the world.

      Demand for masks has surged in recent weeks, exhausting not just China’s stockpile, but emptying shelves from Bangkok to Boston. In China, it is now mandatory to wear facial masks in public areas in many cities.

      China, which accounts for about half of the world’s mask production, is scrambling to snap excess supply from overseas, both through official diplomatic channels, and buyers like Cai.

      An update on the Diamond Princess, a virus- stricken cruise ship, held under quarantine in the Japanese port of Yokohama: Several countries with citizens aboard the ship have announced plans for an emergency evacuation following reports that passengers are literally going mad with paranoia.

      Among them, the US is scheduling a charter plane for its 380 citizens aboard the ship. On Sunday, South Korea said it’s planning to evacuate 355 of its people from the vessel. It was noted by Japanese authorities that anyone testing positive for the virus would not be able to leave.

      However, the Hong Kongers, Americans and others among them will likely be less-than-pleased to learn that the clocks will restart and they will face another 14 day quarantine when they return.

      As for the cruise ship docked in Cambodia, an American passenger tested positive for the virus on Sunday. The 83-year-old woman has been aboard the MS Westerdam, operated by Carnival Corp. The ship is carrying 1,455 passengers and 802 crew. 

      In Taiwan, it was confirmed on Sunday night that the first death related to the virus was seen, Health Minister Chen Shih-Chung told reporters. 

      The island’s health minister said the deceased man was in his sixties, had not traveled to China, and had diabetes and hepatitis B. This is the first death in the country with at least 20 confirmed cases.

      It appears the World Health Organization (WHO) finally admitting the COVID-19 outbreak is a global pandemic, along with the announcement last week that there’s no vaccine for at least 12-18 months, is more than enough to recognize their “contained” narrative is bullsh*t, with new risks emerging of an outbreak in Africa. 

      Simultaneously, China’s economy is disintegrating at the seams, producing one of the most massive economic shocks not seen since the 2008/09 financial crisis, as nearly two-thirds of its economy has ground to a halt. China was responsible for over half of the world’s credit creation in the last decade, and if China decelerates, so does the world. 


      Tyler Durden

      Sun, 02/16/2020 – 18:00

    12. "There's Just Too Many White People In Here": Black Student Lectures Whites In "Multicultural" University Area
      “There’s Just Too Many White People In Here”: Black Student Lectures Whites In “Multicultural” University Area

      Nothing says “multi-culturalism” quite like singling out people of one race and telling them that they don’t belong in a common area. Such was the case in a video that has been making its rounds on Reddit.

      The video, called “Black girl tells whites to leave multicultural student center”, shows a student at the University of Virginia asking white people to leave what appears to be a University common area, where they are sitting and working.

      “Public service announcement,” she starts by saying. “If y’all didn’t know this is the MSC. And frankly there’s just too many white people in here and this is a space for people of color. So just be really cognizant of the space that you’re taking up because it does make some of us POCs [people of color] feel uncomfortable when you see too many white people in here.”

      She continues: “It’s only been open for four days. And frankly there’s the whole University for a lot of ya’ll to be at. And there’s very few spaces for us.”

      There doesn’t seem to be any reaction from other students in in the video, one of whom appears to be an Asian student working on a laptop in the background. The person taking the video then applauds. 

      As one blogger noted, the video was originally tweeted by a student with the username WUF (@WafaFlofa_Flame), who referred to white students as “a bunch of infiltrators” before deleting her Twitter account.

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      The University issued a statement shortly thereafter, stating that the centers “are open to all members of the University community.”

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      Tyler Durden

      Sun, 02/16/2020 – 17:50

    13. Can Sanders Beat Trump In Capitalist America?
      Can Sanders Beat Trump In Capitalist America?

      Authored by Bruce Wilds via Advancing Time blog,

      The Democrats are searching for the candidate best able to defeat Trump in the forthcoming Presidential race. The question on the mind of many democrats is whether Bernie Sanders can beat Trump in a capitalist America? Considering the surge in inequality the answer is, yes. It is difficult to underestimate the anger building under the surface as Trump makes his rounds declaring this the “best economy ever.”

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      The reason for the discontent is many Americans are not feeling all that blessed. Wealth inequality has soared in recent years and now stands at the worst it has been during the entire U.S. post-war period. Simply put, statistics show many Americans lack the money to pay for a $500 repair. Driving a decent car doesn’t make a person middle-class or economically equal, especially if they are up to their eyeballs in debt to do so.

      As for whether Sanders could beat Trump, a couple of issues rapidly come to mind.

      • First, Trump is not as loved as he indicates, matter of fact  the President has a way of ruffling the feathers of both friends and foes. The word braggadocios has been used to describe Donald Trump, synonyms for this word according to thesaurus.com are blowhard, boaster, bragger, show-off, and windbag. None of these are very flattering and over time such behavior has a way of wearing on people. This has caused many of his supporters to indicate they would like him to stop tweeting and shut-up.

      • The second fact is that by flipping a couple of swing states to blue it would be all over for the republicans.  

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      Like Always The Swing States Decide

      Much of Sander’s appeal comes from his promises he can deliver a more just society by transferring wealth to those embracing his long-held socialistic values. This highlights a glaring weakness in the democratic system, and that is, a highly motivated minority can overwhelm an unmotivated majority. History shows the promises of generous programs have proven to be a great motivator. It does not hurt that Sanders comes across as sincere and passionate. Those wielding the power to bring about change are often sheltered from the pain inequality and a broken justice system cause. This means they are out of touch with what many people are forced to go through every day. Because of this, the thorny problems of the day become a low priority. Sanders on the other hands seems to relish the challenge of attacking these issues.

      The reality that a vast majority of people face diminishing prospects is a concerning trend. This was highlighted by the IMF in a report focused on data showing how middle-income households have continued to move downward. The U.S. middle class has never recovered after being “hollowed out” when manufacturing jobs fled America and incomes fell. Current trends indicate the “equality gap” is not expected to narrow in the future. This comes at a time when the American worker is being told robots are here and more are being deployed each day. This means millions of jobs will soon vanish due to automation. This is a huge threat and could prove to be a big deal. Growing income inequality is not just an American problem but it is an issue across the globe and no magic or silver bullet exists to address the conundrum brought about by this concentration of power and wealth.

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      A More Recent Chart Hard To Find!

      In a piece titled; “The Morass That Swallowed the Middle Class” Matthew Shaw delves into how much of the inequality debate focuses on the gains of “the 1%,” and less attention has been paid to the economic well-being of what is broadly termed the middle class. These people are all too often just lumped into a diverse group labeled the 99%. Some of these people do very well for themselves but many are dirt poor. Much of this centers around just how out of touch our “professional elite” are with the general population and the economy. By our professional elite, I refer to those who make the rules and their minions, their aids, the academics, the financial institutions, economists and the media, all of which have tied their wagon to the status quo. Conflict and corruption also enter into this because we often find those setting the rules also tend to want a bigger piece of the pie.

      Trump’s trickle-down economics and tax cuts may sound good but they have not worked for all of America. Trump is very comfortable with economic manipulation and has displayed a surprisingly short-term view in his economic policies. This means he often appears more worried about today than the future. His “damn tomorrow” attitude is reflected in deficit spending, his calls for lower interest rates, and by embracing MMT. The Trump economy which is based on huge deficit spending can only take the economy so far and carries with it a fair amount of negatives. Trump’s delusion that his stock market can go straight up forever is not based on years of stock trading but rather his years in real estate where inflation treated him well as prices rose ever higher.

      The structural issues that haunt America’s competitiveness and far outweigh the benefits of lower taxes. If you are one of the many Americans that pay no taxes this subject only means the government will have less to transfer your way. Healthcare remains a huge issue for most voters and Trump’s failure to move healthcare reform forward coupled with Republicans’ pathetic excuse for an answer to improve healthcare was short of inspiring. While Trump predicted that Democrats will own ObamaCare if it falls apart reality may not support his view. A recent poll from the Kaiser Family Foundation shows a majority of voters, 61 percent said they now blame Trump and Republicans for “future problems” with the healthcare law.

      Trump’s narrative that tomorrow will be brighter is not being heard everywhere, in fact, some people are downright fearful of where he is taking the country. Many Americans balk at the idea their children will enjoy a better life partly because the system has become so unfair. Moreover, a slew of important emotionally charged issues such as immigration and climate change are still being ignored. In fact, Trump often shows a lack of respect and mocks those concerned about these matters  In addition to exorbitant healthcare America has a broken justice system that it is both expensive and often unjust.  As more Americans retire and become dependent on government anxiety will continue to grow. Also, there is the issue of continuing expensive wars, something Trump pledged to end, not only has he failed to do so but he seems to agitate and inflame discontent where ever he goes.

      Just like in the previous elections voters should be prepared to be given a less than inspiring choice for a President to lead us forward. Even though he has been acquitted on impeachment charges Trump still has a reputation of being a schmuck which is something he most likely not be able to shake. Expect both these men to be supported by motivated bases with demographics favoring the Democrats but it is the disaffected independents that will decide this election. Do not be surprised if the decision comes down to who these independents dislike the least, at this point, it is a toss-up. The argument that socialism doesn’t work and that all countries that have attempted to institute it have miserably failed may not be enough to turn voters away from seeking new answers.

      While I have strong reservations as to the argument Sanders can trump the Don I must say Sanders is clearly shining a spotlight on growing inequality and the unrest bubbling beneath the surface. If Sanders can tap into this feeling it may become more about a kinder more compassionate America than socialism or Trump. This means watching how women and the elderly weigh in. Whether Sanders could win the election without increasing polarization and hatred is questionable but it would be wise for those in power not to get overly comfortable or to underestimate the resentment brewing under the surface.

      *  *  *

      This is an exercise based on Sanders becoming the Democratic party nominee. It should be noted this has not yet occurred. A big wildcard in the 2020 election would be a third party candidate drawing off just enough votes to spoil everyone’s plans. Remember 1992 and Ross Perot!.


      Tyler Durden

      Sun, 02/16/2020 – 17:25

    14. Beijing Crashes The Party: Chinese Media Warns Austerity Is Coming After FinMin Says "Proactive Fiscal Policy" No Longer Feasible
      Beijing Crashes The Party: Chinese Media Warns Austerity Is Coming After FinMin Says “Proactive Fiscal Policy” No Longer Feasible

      One of the top reasons why stocks have continued to hit new all time highs despite the ongoing economic shock that has crippled China’s economy, which according to Goldman will push its GDP to zero (or lower)…

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      … and frayed global supply chains, is the investing public’s absolute certainty that China will unleash an unprecedented fiscal stimulus to offset the collapse in economic output (which to those who mistakenly claim that this is “contrarian view” we urge you to carefully review the definition of contrarian when everyone is convinced it will happen).

      And in all honesty, until today there was little reason to believe otherwise. After all, with China’s economy disintegrating, as we showed on Friday, courtesy of real-time indicators that show there has been zero economic uptick since the lunar new year as the economy remains paralyzed, it would appear Beijing has little choice but to unleash the proverbial stimulus flood, or rather continue unleashing stimulus, as shown in the timeline below.

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      Furthermore, with articles such as this one in Bloomberg “China Vows More Fiscal Support as Virus Roils a Slowing Economy“, a stimulus appears a done deal.

      There is just one problem: none of it is true based on what China’s finance minister Liu Kin actually wrote today in Qiushi, the Communist Party of China’s flagship magazine.

      First, a quick look at what the misleadingly titled Bloomberg article, which cited Liu, says it is far from the blanket “vow” of unconditional fiscal stimulus that one would conclude based on just reading the headline, as just two paragraphs in we read that “the nation will further perfect and implement measures this year to reduce corporate taxes and cut unnecessary government expenses.“

      For those confused, “cutting unnecessary government spending” is the opposite of the unlimited stimulus most investors hope for; in fact one can almost interpret it as a form austerity with Chinese characteristics.

      And as further confirmation that China may be about to shock the stock market and its stimulus junkies, China’s Global Times propaganda outlet wrote on Sunday that “with the Chinese economy taking a major hit from the outbreak of the novel coronavirus pneumonia (COVID-19), the central government appears to pursue fiscal austerity as part of the efforts to pull through the difficult times.“

      Crushing the “unlimited fiscal support” argument pushed by Bloomberg, and which is propping up the entire market, the Global Times warns that while it is generally expected that fiscal stimulus and monetary easing will undoubtedly be the two main tools of central authorities for alleviating downward pressure on the economy and for maintaining macroeconomic stability, “given the past experience and the financial risks currently facing China, a flood of spending programs seems no longer on the financial regulators’ list of choices for stimulating the economy.”

      And here is why one can no longer even trust Bloomberg for objective and accurate, reporting of news: according to the Global Times’ report of what the Chinese finance minister said, instead of “vowing more fiscal support”, China’s top financier actually urged local government to brace for “belt-tightening”, to wit:

      “China will face decreased fiscal revenues and increased expenditures for some time to come, and the fiscal operation will maintain a state of ‘tight balance.’, Chinese Finance Minister Liu Kun wrote in an article published on Qiushi, a magazine affiliated with the Communist Party of China Central Committee. In this situation, it won’t be feasible to adopt a proactive fiscal policy by expanding the fiscal expenditure scale. I, and instead, policies and capital must be used in a more effective, precise and targeted way,”  Liu said. Chinese Finance Minister Liu Kun wrote in an article published on Qiushi, a magazine affiliated with the Communist Party of China Central Committee.

      Much to the chagrin of anyone betting that Beijing will do anything to offset the economic decline about to slam the economy, the Global Times said that “Liu’s article sent a clear signal that China would not stimulate the economy by rolling out another massive monetary stimulus.”

      Which is not to say that China won’t do anything, it just won’t do as much as many hope: due to the dire impact of the coronavirus outbreak on businesses across the country, the Ministry of Finance has already made it clear that it would continue to reduce the tax burden on enterprises, which will undoubtedly weigh down the already slowing fiscal income. However, a potential decrease in fiscal revenues directly points to the limited room for splashing out on unnecessary programs. China’s fiscal revenues grew 3.8 percent in 2019, the slowest growth since 1987, while fiscal expenditures during the same year gained 8.1 percent compared with the previous year, outpacing economic growth.

      Therefore, to maintain a “tight balance,” the Chinese economy will have to tighten its belt by curbing non-essential expenditures while expanding investment in a precise and targeted manner, as the Global Times said, which as a reminder is under the auspices of the Chinese Communist Party’s People’s Daily newspaper and thus represents the message China’s communist party wants to convey to the world.

      While there has been a consensus among economists and investors for the fiscal deficit ratio to break the 3% GDP mark temporarily so that more space could be given to fiscal expenditures to stabilize the economy amid the epidemic, the Global Times says that the fiscal space constraint is not the key reason for belt-tightening. Instead, China appears to now be learning from the past, when massive stimulus has showed that “a flood of investments could lead to many consequences like high levels of local government debts, and to the detriment of high-quality economic growth.”

      The Global Times’ conclusion is ominous: the pain will be equally felt by everyone:

      In 2019, China’s fiscal expenditures reached 23.9 trillion yuan ($3.4 trillion), of which only 3.5 trillion yuan was spent by the central government, and the rest by local governments.  In this sense, governments at all levels should be prepared for belt-tightening in the future to come.

      The question is whether US investors, who have so far ignored all the adverse newsflow betting Beijing would bail them out – and with the S&P at all time highs, they have yet to be proven wrong – will join them.


      Tyler Durden

      Sun, 02/16/2020 – 17:09

    15. Record Highs And Raging Risks – The Mother Of All Head-Scratchers
      Record Highs And Raging Risks – The Mother Of All Head-Scratchers

      Excerpted from Doug Noland’s Credit Bubble Bulletin blog,

      Confirmed coronavirus cases almost doubled over the past week to 67,000. Part of the spike was the result of including a group diagnosed through CT imaging scans rather than with typical coronavirus testing. The ballooning number of patients with viral symptoms has overwhelmed the capacity for normal testing. Troubling news came Friday of 1,700 Chinese healthcare workers having been infected (with 25,000 deployed to Hubei Province). Also, quarantines were further tightened in Wuhan and Beijing. Returning Beijing residents are to remain isolated in their homes for 14 days. As the NYT put it, “It was the latest sign that China’s leaders were still struggling to set the right balance between restarting the economy and continuing to fight the coronavirus outbreak.”

      Staring at a rapidly unfolding economic and financial crisis, Beijing has made the decision to move forward with efforts to get their faltering economy up and running. This comes with significant risk. Global markets, by now fully enamored with aggressive monetary and fiscal stimulus, are predisposed to fixate on potential reward (keen to disregard risk). That future students of this era will be more than a little confounded has been a long-standing theme of my contemporaneous weekly chronicle. Booming market optimism in the face of what has been unfolding in China will ensure years and even decades of head-scratching.

      China is definitely not alone in gambling with aggressive late-cycle stimulus, as it desperately tries to postpone the unavoidable dreadful downside after historic Bubble Inflations. Coming at this key juncture of end-of-cycle fragilities, it’s a challenge to envisage more delicate timing for such an outbreak – in China and globally.

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      Clearly, when global markets hear “stimulus” they immediately salivate over the thought of bubbling liquidity and ever higher securities prices. Critical nuances of global Inflation Dynamics go unappreciated.

      February 9 – Bloomberg: “China’s consumer prices rose the fastest in more than eight years last month, with the outbreak of the coronavirus and subsequent shutdowns of transport links across the country making further gains in the coming months likely. Consumer prices rose 5.4%, with food prices jumping the most since 2008 in January. Even before the coronavirus, prices were likely to have risen sharply due to the normal spike in demand around the Lunar New Year and the effects of the African Swine Fever outbreak which has killed millions of pigs and damaged pork supplies. Pork prices gained the most on record.”

      China has an escalating consumer price inflation problem, one manifestation of intensifying Monetary Disorder. It’s a fundamental Credit Bubble Analytical Postulate that inflationary fuel will gravitate to areas already demonstrating the strongest inflationary biases. As we’ve been witnessing globally, dump stimulus into a backdrop of powerful securities market inflationary psychology and the upshot will be more intense speculation, acute asset price inflation and increasingly destabilizing market Bubbles. China, facing its own particular Inflationary Dynamics, has now embarked on a course that never ends well: aggressive fiscal and monetary stimulus in an environment of rising consumer inflation and general monetary and economic instability.

      China’s CPI Food Index posted a 20.6% y-o-y increase in January, the highest rate since March 2008. For many of its citizens, food purchases make up a significant percentage of monthly expenditures (some estimates as high as 30%). While the doubling of pork prices is inflating price aggregates, even vegetable prices were up a notable 17% y-o-y. And this was before the escalation of the coronavirus outbreak. Beijing has acknowledged the risk to social stability from the coronavirus. Policymakers, as well, face a challenge in trying to stimulate a faltering maladjusted economy without exacerbating the hardship inflicted upon much of its population from surging consumer prices.

      Stimulus measures are working well for global market participants. For Chinese citizens, the jury is out.

      Meanwhile, China’s Credit mechanism is in disarray. Over the past two years in particular, stimulus measures stoked China’s consumer borrowing and spending boom. This upsurge was integral in sustaining China’s Bubble economy in the face of mounting manufacturing overcapacity and associated corporate Credit issues. It comes at a steep cost. In particular, China’s apartment Bubble went to even more precarious extremes.

      February 10 – Bloomberg: “Home sales in China have been dealt a huge blow by the spreading coronavirus with figures showing transactions plunged in the first week of February. New apartment sales dropped 90% from the same period of 2019, according to preliminary data on 36 cities compiled by China Merchants Securities Co. Sales of existing homes plummeted 91% in eight cities where data is available. ‘The sector is bracing for a worse impact than the 2003 SARS pandemic,’ said Bai Yanjun, an analyst at property-consulting firm China Index Holdings Ltd. ‘In 2003, the home market was on a cyclical rise. Now, it’s already reeling from an adjustment.’”

      The above “apartment sales dropped 90%” Bloomberg article was confirmation of the dramatic upheaval the coronavirus is having both on China’s economy and Credit system. And while Beijing stimulus will surely have significant economic impact, it will not easily replace the flow of household mortgage finance that evolved into a powerful force for Chinese and global economies.

      China’s aged apartment Bubble was increasingly vulnerable prior to the coronavirus. At this point, it would appear there is a clear catalyst for the piercing of one of history’s greatest Bubbles. I’ll assume easier lending terms and additional borrowings will bolster the gargantuan – and highly indebted – Chinese homebuilders. Yet sustaining China’s highly inflated apartment prices will prove a much greater challenge. Estimates have as many as 60 million unoccupied apartment units throughout China. Homes for “living in and not speculation”? When risk aversion begins to take hold generally in Chinese housing (a break in inflationary psychology), there is potential for far-reaching economic and financial disruption.

      China will inevitably face its first housing and mortgage finance bust, a painful bursting Bubble episode made much worse by Beijing repeatedly resorting to stimulus measures. It’s difficult to overstate ramifications for China’s economy, financial system and social stability.

      February 9 – Bloomberg: “Just as it looked like Beijing was starting to get a handle on its regional banking crisis, a much more severe threat is engulfing the world’s largest banking system as a deadly new virus hits the country’s economy. The impact of the spreading coronavirus risks bringing to life the worst-case economic scenarios contained in China’s annual banking stress tests. Last year’s exercise envisaged annual economic growth slowing to as low as 4.15% — a scenario which showed that the bad loan ratio at the nation’s 30 biggest banks would rise five-fold. Analysts now say that the outbreak could send first-quarter growth to as little as 3.8%. Banks are already suffering record loan defaults as the economy last year expanded at the slowest pace in three decades. The slump tore through the nation’s $41 trillion banking system, forcing the first bank seizure in two decades and bailouts of two other key lenders.”

      China’s protracted Bubble aroused delusions of grandeur – within the communist party as well as throughout its population. It’s incredible to ponder what’s at stake. Beijing is in no way willing to cede its global ambitions. An assertive American administration only strengthens their resolve. Communist leadership will reject any challenge to its control and dominance. Meanwhile, a bursting Bubble throws everything into disarray.

      Beijing has declared a “people’s war” against the forces of Bubble deflation. And this explains why markets so confidently operate under the assumption a bust won’t be tolerated. Extraordinary fragilities only ensure epic stimulus; Chinese and global Punchbowls Runneth Over. “Washington will never allow a U.S. housing bust.” “The West will never allow Russia to collapse.” There are monumental presumptions that underpin historic boom and bust cycles. “The Beijing meritocracy has everything under control.”

      February 12 – Associated Press (Joe McDonald): “China’s auto sales plunged in January, deepening a painful downturn in the industry’s biggest global market and adding to economic pressures as the country fights a virus outbreak. Sales of SUVs, sedans and minivans fell 20.2% from a year earlier to 1.6 million, an industry group, the China Association of Automobile Manufacturers, reported… ‘Enterprises are under huge pressure,’ it said…”

      Over the past decade, China’s domestic auto industry grew into a behemoth. It is another critical sector both from economic and financial standpoints. And while I don’t view it in the same context as the vulnerable apartment Bubble, it is another market that could suffer lingering effects.

      I am well aware of the market’s view that the coronavirus crisis will soon pass. We can expect Beijing stimulus measures to help shore up GDP figures and stock prices. At least in the near-term, it will support confidence. Hopefully the outbreak has peaked, with stimulus measures and an accommodative banking system helping China’s economy to muddle through. Global equities markets have been content to “look across the valley.” Disregarded are China’s acute financial and economic fragilities, the of risk stimulus measures exacerbating Monetary Disorder and mounting risks to social stability. How quickly does the Chinese population bounce back – again eagerly taking on debt, buying apartments and autos and dreaming of a bright and prosperous future?

      That equities can run higher in the face of mounting risks is not as confounding as it might first appear. Credit drives the global Bubble – and Credit in the near-term is further benefiting from the outbreak. Overheated securities (speculative) Credit is really benefited. Global monetary stimulus is further assured – rate cuts and more QE. One can now add aggressive PBOC liquidity injections to the Fed and global central bank QE throwing gas on a speculative fire raging throughout global fixed-income markets.

      February 13 – Bloomberg (Gregor Stuart Hunter): “Investors who poured money into bond funds last year are showing little sign of stopping in 2020… Inflow to fixed-income assets nearly doubled last year to $1 trillion, according to… Morningstar Inc. With fears about the coronavirus outbreak dimming growth prospects for the global economy and prompting a search for haven assets, bond funds are on track to exceed this haul in 2020. ‘We’re in uncharted territory,’ Nikolaos Panigirtzoglou, a JPMorgan… strategist, said… ‘Based on January flows, it’s going to be another very strong year for bond fund flows.’”

      Equities at record prices garner all the attention. Yet the manic behavior in global bond markets is more extraordinary and consequential. U.S. fixed income ETFs attracted another $7.3bn this week (ETF.com), as “money” keeps rolling in. The $64 TN question is how much speculative leverage continues to accumulate throughout global bond and derivatives markets. Here again, the timing of the coronavirus outbreak is of great consequence – inciting speculative excess and attendant leverage when global fixed-income was already engulfed by powerful Inflationary Biases. Added leveraging works to inject additional liquidity into already over-liquefied global markets. And the last thing overheated global risk markets – with such powerful Inflationary Biases – needed at this point was additional liquidity.

      I view the equities Bubble as an offshoot of the greater Bubble that continues to inflate in global debt, securities Credit and derivatives markets. On the one hand, it is extraordinary to see equities markets essentially dismiss such consequential developments in China. It does, however, present important support for the Bubble Thesis. Equities rallied to record highs just months before the LTCM/Russia collapse in 1998. Stocks rallied to record highs in 2007 even as the mortgage finance Bubble faltered.

      It’s only fitting that global stocks rally to record highs as the faltering China Bubble places the global Bubble in serious jeopardy. If the coronavirus stabilizes over the coming weeks and months, attention can then shift to November U.S. elections. It’s poised to be One Extraordinary Year. A Friday CNBC headline: “White House Considering Tax Incentive for More Americans to Buy Stocks, Sources Say.” A strong equities market boosts optimism for a Trump reelection – bullishness that spurs further stock gains.

      Yet there is potential for self-reinforcing dynamics to the downside. A break in stock prices would incite election nervousness and heightened market risk aversion. Can this game sustain for another nine months?


      Tyler Durden

      Sun, 02/16/2020 – 16:35

    Digest powered by RSS Digest

    Feb 16

    Today’s News 16th February 2020

    • The Geopolitics Of Biological Weapons, Part 2: Efficiency & Deployment
      The Geopolitics Of Biological Weapons, Part 2: Efficiency & Deployment

      Authored by Larry Romanoff via GlobalResearch.ca,

      Read Part 1 here…

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      It should be apparent that the launching of bio-warfare, as with conventional warfare, is considerably eased by locating military bases, offensive weapons and delivery systems as physically close as possible to one’s potential enemies. This is one reason the US has established its nearly 1,000 foreign military bases – to ensure the capability of putting an enemy under attack within 30 minutes anywhere in the world. Clearly, the same strategy applies to biological warfare, the US military having created scores of these labs euphemistically defined as “health-security infrastructure” in foreign countries.

      It is frightening to learn that many of these foreign bio-installations are classified as so “Top-Secret” they are outside the knowledge and control of even the local governments in the nations where they are built. It is also frightening to learn that the Ebola outbreaks all occurred in close proximity to several of these well-known (and top-secret) US bio-weapons labs in Africa.

      There were great fears a few years ago when American scientists recreated the Spanish flu virus that killed around 50 million people in 1918. They spent nine years on this effort before succeeding, and now large quantities of this virus are stored in a high-security government laboratory in Atlanta, Georgia. More recently, scientists have created a mutated super-strain of the deadly H5N1 bird flu virus that is directly transmissible among humans and would have at least a 50% kill rate, spawning fears in 2005 of a global pandemic that might kill hundreds of millions.

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      In late 2013, more than 50 of the world’s most eminent scientists severely criticised the research Ron Fouchier and colleagues at the Erasmus Medical Centre in Rotterdam, who have been developing mutant varieties of the H5N1 bird-flu virus that are far more dangerous to humans. The scientists wrote that the research was designed to make the virus fully transmissible between humans, and clearly had a dual civil-military function. This engineered flu could kill half the world’s population, and not by accident. The US military funded this research with more than $400 million.

      The Korean War

      During and after the Korean War, China produced considerable evidence that the US military was employing biological pathogens against both the Chinese and the North Koreans. More than 25 US POWs supported Chinese claims – and provided further, and very detailed, corroborating evidence  of anthrax, various insects such as mosquitoes and fleas carrying Yellow Fever, and even propaganda leaflets infected with cholera, over the entire North-East of China and virtually all of North Korea. The US government immediately filed charges of sedition against the soldiers who told their stories of these illegal activities, applying enormous pressure to silence them, even threatening defending lawyers with unspecified retribution. As a final desperate attempt to silence these former POWs, the US military relied on the CIA to subject them to extensive treatments with a newly-discovered and dangerous drug called Metrazol, in attempts to totally erase all memories of their activities in Korea, apparently destroying the mens’ minds in the process.

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      Global Research published an article on September 07, 2015 by David Swanson which provided some detail on American attempts to flood North Korea with the Bubonic Plague, beginning with the statement, “This happened some 63 years ago, but as the U.S. government has never stopped lying about it, and it’s generally known only outside the United States, I’m going to treat it as news.”

      Correct on all counts. Curtis LeMay not only conducted his sincere attempts to exterminate the entire civilian population of North Korea by bombing virtually every house in the country, but there is now a huge and still emerging volume of indisputable evidence the Americans dropped on both North Korea and China insects and materials carrying anthrax, cholera, encephalitis, and bubonic plague.

      Then on September 10, 2012, the Los Angeles Times ran an article discussing the topic of doctors “still trying to diagnose mysteries of the Hantavirus” more than 20 years after this deadly pathogen was first identified in the US in 1993.  In this case, the virus appeared to attack only native Indians – the infections concentrated in a four-state area – who developed sudden respiratory problems and were often dead within hours. Most victims reported “not feeling well” one day, and were dead the next, from what appeared as a very mysterious pathogen with an undeterminable source. But then, “a lucky clue” arose from a television viewer, a physician who stated this illness seemed very similar to that caused by a virus he had observed the US military using in Korea in the 1950s. And sure enough, tests proved the illness to be caused by a variation of the same Hantavirus that attacked troops in Korea.

      The virus attracted attention because some American troops were accidentally exposed to it in Korea, most of whom died very suddenly. Two facts that were eliminated from the public reports of the time: (1) the virus attacked North Koreans and Chinese in greater numbers, and (2) this Hantavirus was one item in the treasure trove of biological weapons the Americans inherited from Dr. Ishii and his Unit 731. The Japanese were light-years ahead of the Americans and the Western Allies in virus research and had isolated the lethal Hantavirus by the late 1930s, with much evidence it was used against China by the Japanese and later against both China and North Korea by the Americans. It seems that some of this weaponised material escaped containment and exposed American and South Korean soldiers to their own handiwork.

      US Biowarfare on Cuba

      One of the commonly-known (outside the US) biological warfare programs conducted by the US, remarkable for its longevity, is the decades-long offensive attack on Cuba. The US military and CIA conducted so many of these biological assaults that there is a museum in Havana that provides substantial evidence of the many years of biological warfare against this small country. Jeffrey St. Clair noted in an article a few of these events, as follows:

      “In 1971 the first documented cases of swine fever in the western hemisphere showed up in Cuba, resulting in the deaths of more than 500,000 hogs. Cuba accused the US of importing that virus into the country, and a CIA agent later admitted that he delivered the virus to Cuban exiles in Panama, who carried the virus into Cuba. The news was public, but the US media ignored it. In 1981, Fidel Castro blamed an outbreak of dengue fever in Cuba on the CIA. The fever killed 188 people, including 88 children. In 1988, a Cuban exile leader named Eduardo Arocena admitted bringing some germs into Cuba in 1980. Another occasion involved an outbreak of thrips palmi, an insect that kills potato crops, palm trees and other vegetation. Thrips first showed up in Cuba on December 12, 1996, following low-level flights over the island by US government spray planes. The US was able to quash a United Nations investigation of the incident.”

      This was only a small part of America’s biological aggression against Cuba. In 1979, the Washington Post published reports on a long-standing American bio-warfare program against Cuban agriculture that had existed at least since 1962, by the CIA’s biological warfare section. And in 1980, the US believed it had discovered a biological agent that would target ethnic Russians, and sent a ship from Florida to Cuba on a mission to “carry some germs to Cuba to be used against the Soviets”. And as recently as 1996 and 1997, the Cuban government was again accusing the US of engaging in biological warfare by spraying Cuban crops with biological pathogens during illegal “reconnaissance flights”. It was also definitively reported that during the Cuban missile crisis, large numbers of chemical and biological weapons were loaded on American military aircraft in preparation for use on Cuba.

      American bio-warfare efforts have also been launched on at least several other nations in Central and South America, involving a number of viral pathogens, cancers and chemicals. In his article, St. Clair referred to an epidemic of dengue fever that erupted in Managua, Nicaragua, where about 50,000 people became seriously ill and many died. The attack occurred during the CIA’s war against the Sandinista government, where the outbreak immediately followed a series of low-level so-called “reconnaissance flights” conducted by the Americans over Managua.

      It has also been reliably reported by several sources that the US military has used Haiti as a kind of “open season” biological lab, exposing the local population to almost everything imaginable, with the US media keeping a very tight lid on information leakage. Even more reprehensible was the treatment awarded to those Haitians who made the serious mistake of becoming “boat people”, i.e. escaping their American pathology lab by emigrating in small boats to the US. The US government deported most to Puerto Rico to be used as guinea pigs and lab rats, where they would be out of view of Congress and the media and, according to reports, having contained them in concentration camps to inflict upon them whatever ‘scientific tests’ they avoided at home. In one case as recently as 1980, hundreds of Haitian men in these detention camps developed full-size female breasts after being injected repeatedly with unknown hormones by US military physicians. The historical record tells us the same was done to the same people in a publicly off-limits military base in Florida.

      Along with Cuba, there is the strange case of the more or less simultaneous occurrence of cancers among the leaders of South American countries, coincidentally in each case, the infection of a national leader the US despised and had tried to remove by several other means. We had Hugo Chávez, the President of Venezuela, Argentina’s president Cristina Fernández de Kirchner, Brazil’s president, Dilma Rousseff, Paraguay’s Fernando Lugo, and the former Brazilian President, Luiz Inácio Lula da Silva. A former Brazilian President, speaking of these cancers, said in an interview,

      “It is very hard to explain, even with the law of probabilities, what has been happening to some leaders in Latin America. It’s at the very least strange, very strange.”

      The Secret WW II US-Japan Bio-Partnership

      When Japanese troops invaded North-East China in 1932, Dr. Shiro Ishii began his notorious biological warfare experimentation program in a sector near Harbin disguised as a water-purification unit, then known as Unit 731. He began with various poisonous gases including mustard gas, then used aircraft to distribute cotton and rice husks contaminated with the bubonic plague, in various parts of Central China. His unit collected Chinese resisting the Japanese occupation, using them for unlimited medical atrocities including live vivisection. The New York Times reported one instance of a Japanese physician describing his experience there:

      “I cut him open from the chest to the stomach and he screamed terribly and his face was all twisted in agony. He made this unimaginable sound, he was screaming so horribly. But then finally he stopped. This was all in a day’s work for the surgeons, but it really left an impression on me because it was my first time.”

      Ishii would first have his teams infect the victims with anthrax, cholera, typhoid, tetanus, dysentery, syphilis, the bubonic plague and other pathogens, then dissect them while still alive to examine the results, followed by cremation of the evidence. The US military’s Surgeon-General’s Department estimated that 580,000 Chinese were killed in this manner, with atrocities committed by some of Japan’s most distinguished physicians.

      At the end of the war when it became clear Japan was losing and would have to evacuate China, Ishii ordered all the remaining Chinese in custody to be killed and their bodies burned, then destroyed with explosives the entire Unit 731 compound to hide all traces of his experiments. General Douglas MacArthur, then Commander of the Allied Powers in Japan, made a secret deal with Ishii and the entire staff of Unit 731 to transfer to the US military all records of the biowarfare and vivisections for US military study, in exchange for a complete cover-up of all evidence of the existence of these activities, and a promise of immunity from war-crimes prosecution.

      Ishii turned over to the US military on one occasion alone more than 10,000 pages of his “research findings”, after which the Americans re-wrote Japan’s history books, which is why neither the Japanese nor the world know of the massive atrocities committed in China, and which is where the American military gained much of its expertise and know-how in chemical and biological weapons and the methods of human experimentation it would later apply so freely in Korea and Vietnam and to American citizens.

      On 6 May 1947, MacArthur wrote to Washington that “additional data, possibly some statements from Ishii probably can be obtained by informing Japanese involved that information will be retained in intelligence channels and will not be employed as ‘War Crimes’ evidence.” Some Japanese were arrested by Soviet forces for their biological crimes against Russians, and tried at the Khabarovsk War Crime Trials in 1949 but, to cover their own tracks, the Americans dismissed all surviving victim testimony and Russia’s war-crimes trials of Japanese as “communist propaganda”.

      Not only did the US government and military provide Dr. Ishii and his staff total immunity from prosecution, they imported the entire group to the US, all secretly stationed on US military bases and on the US Army payroll. Ishii was for years a frequent guest lecturer at the US military’s bio-warfare school at Fort Detrick, and given a lucrative post as full professor and supervisor of biological research at the University of Maryland until he died decades later. It was only in 1995 that the US military finally admitted it had offered immunity, secret identities, and good jobs with high salaries, to these Japanese scientists and physicians in exchange for their work on biological warfare research and human experimentation. These people were recruited not only by the military, but by the CDC, the US State Department, military intelligence, the CIA, and the US Department of Agriculture, all for work on “secret government projects”.

      Epilogue

      From the very earliest days of America’s bio-warfare experiments, US political and military leaders, as well as CIA officials, made no effort to hide their interest in developing methods of infecting individuals with cancer as a method of ridding themselves of national leaders they didn’t like, a method with perfect deniability. The US record of having assassinated by various means about 150 political leaders in other nations will attest to this assertion.

      “The attraction is that bio-weapons are not only very efficient mass killers but are quite cost-effective compared to shooting wars. As well, genetic weapons can be dispersed in a multitude of ways, using virus-infected insects or bacteria, or spliced into GM seeds. These weapons are difficult to detect and identify, and often a treatment or vaccine could be years in the making.”

      Dr. Leonard Horowitz, the famed pharma industry whistleblower, quoted one expert as saying he would plan a bio-attack

      “with subtle finesse, to make it look like a natural outbreak. That would delay the response and lock up the decision-making process. Even if you suspect biological terrorism, it’s hard to prove. It’s equally hard to disprove . . . You can trace an arms shipment, but it’s almost impossible to trace the origins of a virus that comes from a bug.”

      One author noted that a properly-done release of an infectious agent would make diagnosis and treatment difficult, adding that this kind of bio-warfare cannot be traced to its source and might be considered an “act of God”.

      Many recent disease outbreaks would seem to properly qualify as potential bio-warfare agents: AIDS, SARS, MERS, Bird Flu, Swine Flu, Hantavirus, Lyme Disease, West Nile Virus, Ebola, Polio (Syria), Foot and Mouth Disease, the Gulf War Syndrome and ZIKA.

      The Western mass media have ignored all of this, censoring this entire portion of history, and even the Internet has been scrubbed with Google and Bing unable to find the truth which is out there. Once again, freedom of speech depends entirely on who controls the microphone.


      Tyler Durden

      Sat, 02/15/2020 – 23:30

    • Planet-Killer? NASA On Alert For 'Potentially Hazardous' Asteroid Fast-Approaching Earth
      Planet-Killer? NASA On Alert For ‘Potentially Hazardous’ Asteroid Fast-Approaching Earth

      NASA has confirmed that a potentially hazardous asteroid is traveling towards Earth at a mind-numbing 34,000 mph this weekend, the International Business Times reported.

      NASA’s Center for Near-Earth Object Studies (CNEOS) detected the incoming asteroid as 163373 (2002 PZ39), measures about 3,250 feet across, and is expected to pass over Earth on Saturday. 

      “Potentially Hazardous Asteroids (PHAs) are currently defined based on parameters that measure the asteroid’s potential to make threatening close approaches to the Earth,” NASA said in a statement.  

      NASA has been simulating for an “asteroid apocalypse” to help the space agency better prepare for an asteroid strike. But don’t be alarmed, this weekend’s extremely close pass over will miss Earth by a distance 0.03860 astronomical units, or about 3.6 million miles.

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      With a near-miss expected this weekend, there’s another asteroid lurking above that measures a mile long and could threaten human civilization. 

      Japanese scientists warned last month, “the potential breakup of the rock could be dangerous to life on Earth. Those resulting asteroids could hit the Earth in the next 10 million years or so.”

      And it makes complete sense, why not just NASA, but Zerohedge readers are really going to like this, the Federal Emergency Management Agency (FEMA) has also been preparing for a possible disaster of an asteroid strike. 

      The European Space Agency (ESA) recently ran simulations of an asteroid strikes on Earth, indicating that it too is preparing for a future catastrophic event.

      And why are government agencies around the world preparing for asteroid strikes? 

      Well, it could be due to the “God of Chaos” asteroid, which is slated to skim past the Earth in 2029, could be what ends life as we know it.  


      Tyler Durden

      Sat, 02/15/2020 – 23:00

    • Socialism: A Brief Taxonomy
      Socialism: A Brief Taxonomy

      Authored by Allen Gindler via The Mises Institute,

      There are myriads of words written about socialism, and yet lots of misconceptions about it still exist even in the minds of those who are on the opposite side of the political spectrum. The most striking and frequent blunders are the identification of socialism exclusively with Marxism, the confusion between the concepts of socialism and communism, and the claim that fascism and National Socialism belong to the right, to name a few.

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      It is necessary to give a comprehensive definition of socialism, determine the principal attributes that indicate belonging to socialism, and to classify the socialist trends on these grounds to clarify the concept once and for all.

      The contemporary meaning of socialism often runs along the lines that it is a politico-economic theory in which the means of production, wealth distribution, and exchange are supposed to be owned and regulated by the community as a whole. This characterization of socialism emphasizes its important economic features; however, it cannot be considered a comprehensive definition. The wording implies a narrow understanding of socialism from the point of view of materialist and positivist currents of socialism but does not fully encompass the features exhibited in antimaterialist, anti-Cartesian, and Kantian members of the socialist family.

      It seems to me that the most inclusive definition of socialism is as follows:

      Socialism is a set of artificial socioeconomic systems that are characterized by varying degrees of collectivization of property, or consciousness, or the redistribution of wealth.

      Notice that socialism is designated as an artificial entity, meaning that it does not occur naturally during the evolution of human society but is imposed on nations coarsely through the actions of activists.

      This definition derives from the parsimonious solution of qualitative comparative analysis (QCA) of the twelve most relevant currents of socialism, and it meets the criterion of necessity and sufficiency. In other words, socialization of property, collectivization of consciousness, and wealth redistribution are necessary and sufficient causative factors that taken separately or in combination unambiguously define an ideology as socialistic and designate preferred paths to socialism.

      Given these three main causative conditions, it is easy to identify and classify socialist movements in the universe of political philosophies. The nuanced distinction between socialist movements is explained by attributes that seem essential but not general enough to influence the grouping of political philosophy in one direction or another. At the same time, any of the following ideologies has at least one causative factor that fully characterizes the doctrine as socialist.

      The generic realm of socialism comprises several ideologies, which, more often than not, have historically been hostile to each other:

      Marxism is the particular and extreme case of socialism named communism. Marx did not invent the notion of socialism. The ideas of socialism were known long before Marx and indisputably influenced his worldview. Instead, Marx created the theory of “scientific communism.” Communism is characterized by the complete socialization of property and the total collectivization of consciousness. The orthodox Marxism has never been materialized.

      Marxism-Leninism, also known as Bolshevism, is a revision of Marxism regarding the scope and driving forces of the communist revolution. If, as according to Marx, the revolution should be brought on simultaneously in developed industrialized countries by the mass proletarian movement, then, for Lenin, the Bolshevik revolution might take place in a single agrarian country under the leadership of the vanguard of revolutionaries. Nevertheless, the goal of Marxism-Leninism was communism, implying total collectivization of everything and everyone. A Bolshevik coup succeeded in the Russian Empire, and the communist regime existed from 1917 to 1991.

      Trotskyism is, in essence, genuine Marxism-Leninism, which tries politically to preserve its theoretical purity. Trotsky was a founder of the theory of “permanent revolution,” which posits that a proletarian revolution in one country should spread to neighboring nations until communist revolutionary transformations embrace the whole world. He criticized Stalin’s policy from the left, arguing that building communism in one separate country was a deviation from the original intent, that the expropriation of peasant property should have been completed immediately, and that the proletariat had been deceived and continued to be exploited but this time by the Soviet nomenclature. In general, Trotsky accused Stalin of betraying the ideals of the proletarian revolution.

      Anarcho-communism also implies the complete collectivization of property and consciousness. However, the doctrine does not accept the Marxist idea of the dictatorship of the proletariat, the appointment of the working class as the sole agent of the revolution, and two stages on the path to a communist society. The anarcho-communists hoped to build a stateless communist society as soon as they gained power during the revolutionary war. Anarcho-communism was briefly institutionalized on the free territory of southeastern Ukraine from 1918 to 1921, during the revolution and the civil war in the Russian Empire.

      Reformism or Social Democracy (Europe), also known as Democratic Socialism in the USA, is a significant revision to Marxism, which practically does not leave even the foundation of genuine Marxist principles. Reformism has been a mainstream form of socialist ideology and practice since the end of the nineteenth century. Redistribution of wealth and partial socialization of consciousness are the main paths being utilized by the doctrine. Socialism is supposed to be gradually built within a capitalistic society by methodically changing the socioeconomic laws of the land using parliamentary procedures. Great importance is also attached to the mental transformation of members of the society through the indoctrination of the population in educational institutions and the propaganda of the socialistic ideals in the mass media, social networks, and materials of pop culture.

      Revolutionary Syndicalism (in Italy, France), Anarcho-syndicalism (in Spain), and Guild Socialism (in Great Britain) are non-Marxian currents of socialism, meaning that they did not adhere to the tenets of scientific communism. The main path to socialism is the expropriation of private property from its rightful owners, with its subsequent collectivization and transfer to the management of the labor collective. It was assumed that the fruits of labor would be exchanged in the market between various producers as well as between the villages and the cities. Anarcho-syndicalists managed to gain political power in Aragon, Andalusia, and Catalonia during the Spanish Civil War (1936–39).

      Fascism (Italy) is a non-Marxian, antimaterialist, antipositivist current of socialism. Italian fascism envisioned a new type of society that would supersede both communism and classical liberalism; it was conceived as neither on the right nor the left. However, the practical implementation of fascism was the complete socialization of the consciousness, the partial collectivization of the means of production, and unprecedented wealth redistribution. The means of production de jure remained in possession of the owners, but de facto they could not freely dispose of them. Fascism was imposed on Italian society from 1922 to 1945.

      National Socialism (Germany) is a non-Marxian flavor of socialism, based on the racial and pseudo-scientific theory of the superiority of Aryans. National Socialism pursued complete collectivization of the consciousness, partial socialization of the means of production, and aggressive wealth redistribution as a method of achieving a socialist paradise for das Volk. As in any other totalitarian society, the state was the ultimate owner of the means of production, despite a de jure allowance of private ownership. Contrary to fascism, National Socialism did not believe in the antagonism between labor and capital and insisted on the unity of the nation in the face of socioeconomic and military challenges. National Socialism materialized in Germany and lasted from 1933 to 1945.

      It should be noted that if a socialist current of any flavor is given sufficient run time, then, regardless of the chosen path, all causative factors will reach their maximum value.

      That is, in the limit, as mathematicians say, all means of production will inevitably be socialized, and the individual will be coercively subjugated to the collective. In this sense, such a seemingly mild current like democratic socialism is just as dangerous as all the other members of the socialist family.


      Tyler Durden

      Sat, 02/15/2020 – 22:30

    • Dan Loeb's Luxury Yacht Slams Into "The Most Remarkable Reef In The West Indies" Near Belize
      Dan Loeb’s Luxury Yacht Slams Into “The Most Remarkable Reef In The West Indies” Near Belize

      When you become a billionaire, you run into a whole new class of problems that you sometimes have to deal with.

      For instance, those making minimum wage at a Burger King somewhere, while honorable work, may not have the luxuries of the billionaire lifestyle – but at least they never have to worry about slamming their super-yacht into the side of a prized coral reef off the coast of Belize. 

      Because that’s the problem that hedge fund manager Daniel Loeb is being forced to deal with this week. Loeb’s yacht damaged what is being called a “pristine reef” near the famous Great Blue Hole outside of Belize, according to Bloomberg.

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      Loeb’s 200 foot yacht was filmed last Sunday anchored at Belize’s Lighthouse Reef Atoll. Spokespeople say Loeb was not on the yacht at the time and the Financial Times has reported there will be an official investigation. 

      A spokesperson for Belize’s department of the environment said Loeb’s yacht caused the damage: “Samadhi on Sunday lowered the anchor in a very sensitive area of Belize. Officers are doing an investigation. We know that damage was done,” the spokesperson to FT. 

      Loeb responded:

       “As a life-long surfer and someone who loves the ocean, I was horrified to hear about this incident in Belize. We promptly contacted the Belize Audubon Society (a conservation group) and are committed to working together to restore the reef.”


      Tyler Durden

      Sat, 02/15/2020 – 22:00

    • The Koch-Soros Quincy Project: A Train Wreck Of Neocon And 'Humanitarian' Interventionists
      The Koch-Soros Quincy Project: A Train Wreck Of Neocon And ‘Humanitarian’ Interventionists

      Authored by Daniel McAdams via The Ron Paul Institute for Peace & Prosperity,

      Those hoping the non-interventionist cause would be given some real muscle if a couple of oligarchs who’ve made fortunes from global interventionism team up and pump millions into Washington think tanks will be sorely disappointed by the train wreck that is the Koch/Soros alliance.

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      The result thus far has not been a tectonic shift in favor of a new direction, with new faces and new ideas, but rather an opportunity for these same old Washington think tanks, now flush with even more money, to re-brand their pet interventionisms as “restraint.”

      The flagship of this new alliance, the Quincy Institute for Responsible Statecraft, was sold as an earth-shattering breakthrough – an “odd couple” of “left-wing” Soros and “right-wing” Koch boldly tossing differences aside to join together and “end the endless wars.”

      That organization is now up and running and it isn’t pretty.

      To begin with, the whole premise is deeply flawed. George Soros is no “left-winger” and Koch is no “right-winger.” It’s false marketing, like the claim that drinking Diet Coke will make you skinny. Both are globalist oligarchs who continue to invest hundreds of millions of dollars to create the kind of world where the elites govern with no accountability except to themselves, and “the interagency,” rather than an elected President of the US, makes US foreign policy.

      As libertarian intellectual Tom Woods once famously quipped, “No matter whom you vote for, you always wind up getting John McCain.” That is exactly the world Koch and Soros want. It’s a world of Davos with fangs, not Mainstreet, USA.

      A ‘New Vision’?

      Anyone doubting that Quincy is just a mass re-branding effort for the same failed foreign policies of the past two decades need look no further than that organization’s first big public event, a February 26th conference with Foreign Policy Magazine, to explore “A New Vision for America in the World.”

      Like pouring old wine into new bottles, this “new vision” is being presented by the very same people and institutions who gave us the “old vision” – you know, the one they pretend to oppose.

      How should anyone interested in restraining foreign policy – let alone actual non-interventionism – react to the kick-off presentation of the Quincy Institute’s conference, “Perspective on U.S. Global Leadership in the 21st Century,” going to disgraced US General David Petraeus?

      Petraeus is, among many other things, an architect of the disastrous and failed “surge” policy in Iraq. He is still convinced (at least as of a few years ago) that “we won” in Iraq…but that we dare not end the occupation lest we lose what we “won.” How’s that for “restraint”?

      While head of the CIA, he teamed up with then-Secretary of State Hillary Clinton to develop and push the brilliant idea of directly and overtly training and equipping al-Qaeda and other jihadists to overthrow the secular government of Bashar Assad. How’s that for “restraint”?

      When a tape leaked of Fox News contributor Kathleen T. McFarland meeting with Petraeus at the behest of then-Fox Chairman Roger Ailes to convince him to run for US president, Petraeus told her that the CIA in his view is “a national asset…a treasure.” He then went on to speak favorably of the CIA’s role in Libya.

      But the absurdity of leading the conference with such an unreconstructed warmongering interventionist is only the beginning of the trip down the Quincy conference rabbit hole.

      Rogues’ Gallery of Washington’s Worst

      Shortly following the disgraced general is a senior official from the German Marshal Fund, Julianne Smith, to give us “A New Vision for America’s Role in the World.” Her organization, readers will recall, is responsible for some of the most egregious warmongering propaganda.

      The German Marshal Fund launched and funds the Alliance for Securing Democracy, an organization led by such notable proponents of “restraint” as neoconservative icon William Kristol, John McCain Institute head David Kramer, Michael “Trump is an agent of Putin” Morell, and, among others, the guy who made millions out of scaring the hell out of Americans, former Homeland-Security-chief-turned-airport-scanner-salesman Michael Chertoff.

      The Alliance for Securing Democracy was responsible for the discredited “Hamilton 68 Dashboard,” a magic tool they claimed would seek and destroy “Russian bots” in the social media. After the propaganda value of such a farce had been reaped, Alliance fellow Clint Watts admitted the whole thing was bogus.

      Moving along, so as not to cherry pick the atrocities in this conference, moderating the section on the Middle East is one “scholar,” Mehdi Hasan, who actually sent a letter to Facebook demanding that the social media company censor more political speech! He has attacked what he calls “free speech fundamentalists.”

      Joining the “Regional Spotlight: Asia-Pacific” is Patrick Cronin of the thoroughly – and proudly – neoconservative Hudson Institute. Cronin’s entire professional career consists of position after position at the center of Washington’s various “regime change” factories. From a directorial position at the mis-named US Institute for Peace to “third-ranking position” at the US Agency for International Development to “senior director of the Asia-Pacific Security Program at the [neoconservative] Center for a New American Security.” This is a voice of “restraint”?

      Later, the segment on “Ending Endless War” features at least two speakers who absolutely oppose the idea. Rosa Brooks, Senior Fellow at the “liberal interventionist” New America Foundation, wrote not long ago that, “There’s No Such Thing as Peacetime.” In the article she argued the benefits of “abandon[ing] the effort to draw increasingly arbitrary lines between peacetime and wartime and instead focus[ing] on developing institutions and norms capable of protecting rights and rule-of-law values at all times.” In other words, war is endless so man up and get used to it.

      This may be the key for how you end endless war. Just stop calling it “war.”

      Brooks’ fellow panelist, Tom Wright, hails from the epicenter of liberal interventionism, the Brookings Institution, where he is director of the “Center on the United States and Europe.” Brookings loves “humanitarian interventions” and has published pieces attempting to convince us that the attack on Libya was not a mistake.

      Wright himself is featured in the current edition of the Council on Foreign Relations’ publication Foreign Affairs arguing that old interventionist shibboleth that the disaster in Iraq was not caused by the US invasion, but rather by Obama’s withdrawal.

      This Quincy Institute champion of “restraint” concludes his latest piece arguing that:

      Now is not the time for a revolution in U.S. strategy. The United States should continue to play a leading role as a security provider in global affairs. 

      How revolutionary!

      The moderator of that final panel in the upcoming Quincy Institute first conference is Loren DeJonge Schulman, a deputy director at the above-named Center for a New American Security. Before joining that neoconservative think tank, Schulman served as Senior Advisor to National Security Advisor Susan Rice! Among her other international crimes, readers will recall that Rice was a chief architect of the US attack on Libya.

      Schulman’s entire career is, again, in the service of, alternatively, the war machine and the regime change machine.

      The Quincy Institute’s first big event, which it bills as a showcase for a new foreign policy of “restraint,” is in fact just another gathering of Washington’s usual warmongers, neocons, and “humanitarian” interventionists.

      Quincy has been received with gushing praise from people who should know better. Any of those gushers who look at this first Quincy conference and continue to maintain that a revolution in foreign policy is afoot are either lying to us or lying to themselves.

      But Wait…There’s More!

      Sadly, the fallout extends beyond just this particular new institute and this particular event.

      Those who continue to push the claim that Koch and Soros are changing their spots and now supporting restraint and non-interventionism should be made to explain why the most egregiously warmongering and interventionist organizations are finding themselves on the receiving end of oligarch largese.

      Just days ago a glowing article in Politico detailed the recipients of millions of Koch dollars to promote “restraint.” Who is leading the Koch brigades in the battle for a non-interventionist, “restrained” foreign policy?

      Politico reveals:

      Libertarian business tycoon Charles Koch is handing out $10 million in new grants to promote voices of military restraint at American think tanks, part of a growing effort by Koch to change the U.S. foreign policy conversation.

      The grants, details of which were shared exclusively with POLITICO, are being split among four institutions: the Atlantic Council; the Center for the National Interest; the Chicago Council on Global Affairs; and the RAND Corporation.

      The Atlantic Council has been pushing US foreign policy toward war with Russia for years, pumping endless false propaganda and neocon lies to fuel the idea that Russia is engaged in an “asymmetric battle” against the US, that the mess in Ukraine was the result of a Russian out-of-the-blue invasion rather than an Obama Administration coup d’etat, that Russia threw the elections to Putin’s agent Trump, and that Moscow is seeking to to sap and impurify all of our precious bodily fluids.

      The Atlantic Council’s “Disinfo Portal,” a self-described “one-stop interactive online portal and guide to the Kremlin’s information war,” is raw, overt war propaganda. It is precisely the kind of war propaganda that has fueled three years of mass hysteria called “Russiagate,” which though proven definitively to be an utter fraud, continues to animate most of Washington’s thinking on the Left and Right to this day.

      The Atlantic Council, through something it calls a “Digital Forensic Research Lab,” works with giant social media outlets to identify and ban any independent or alternative news outlets who deviate from the view that the US is besieged by enemies, from Syria to Iran to Russia to China and beyond, and that therefore it must continue spending a trillion dollars per year to maintain its role as the unipolar hyperpower. Thus, the Atlantic Council – a US government funded entity – colludes with social media to silence any deviation from US government approved foreign policy positions.

      And these are the kinds of organizations that Koch and Soros claim are going to save us from Washington’s interventionist foreign policy?

      Equally upsetting is the “collateral damage” that the Koch/Soros alliance and its love child Quincy hath wrought. To see once-vibrant and reliably non-interventionist upstarts like The American Conservative Magazine (TAC) lured away from the vision of its founders, Pat Buchanan and Taki Theodoracopulos, to slip into the warm Hegelian embrace of well-funded compromise is truly heartbreaking. It is to witness the soiling of that once-brave publication’s vindication for being right about Iraq War 2.0 while virtually all of Washington was wrong.

      Incidentally, and to add insult to injury, it is precisely these kinds of Washington institutions who most viciously attacked TAC in those days who now find themselves trusted partners and even “expert” sources!

      TAC! Beware! It’s not too late to wake up and smell the deception!

      How to End Endless Wars (The Easy Way)

      If a Soros-Koch alliance was actually interested in ending endless US wars and re-orienting our currently hyper-interventionist foreign policy toward “restraint,” it would simply announce that not another penny in campaign contributions would go to any candidate for House, Senate, or President who did not vow publicly in writing to vote against or veto any legislation that did not reduce military spending, that imposed sanctions overseas, that threatened governments overseas, that appropriated funds in secret or overtly to destabilize or overthrow governments overseas, or that sent foreign “aid” to any government overseas.

      It would cost pennies to make such an announcement and stick to it, and the result would be a massive shift in the American body politic toward what the current alliance advertises itself as promoting.

      But Koch/Soros don’t really want to end endless US interventions overseas. They want to fund the same old think tanks who are responsible for the disaster that is US foreign policy, re-brand interventionism as non-interventionism, and hope none of us rubes in flyover country notices.

      To paraphrase what Pat Buchanan said about Democrats in his historic 1992 convention speech, the whitewashing of Washington’s most egregiously interventionist institutions and experts as “restrained” non-interventionists is “the greatest single exhibition of cross-dressing in American political history.”


      Tyler Durden

      Sat, 02/15/2020 – 21:30

    • Senate Dems Question Trump's Response To Virus: "Very Grave Threat To The World"
      Senate Dems Question Trump’s Response To Virus: “Very Grave Threat To The World”

      In what will likely come as absolutely no surprise to anyone who has been capable of fogging a mirror for the last few years, Senate Democrats have decided to write a sternly-worded email to the Trump administration questioning their response to the Covid-19 outbreak, demanding they increase spending immediately.

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      26 Democrats including Patty Murray, ranking member of the Health, Education, Labor & Pensions Committee, Minority Leader Charles Schumer, and Presidential candidates Elizabeth Warren and Amy Klobuchar signed the letter claiming Alex Azar (secretary of the Health and Human Services Department) and Office of Management and Budget Director Mick Mulvaney are skimping on efforts to contain the coronavirus and should immediately request additional funds.

      “We remain deeply concerned,” the Senators begin, “that the virus is not only a serious emergency for China, but a very grave threat for the rest of the world.”

      And while they “appreciate” the efforts underway, the Democrats question the resources allocated and claim that “pulling funds from other critical  programs with HHS is not the solution,” preferring instead that big government gets bigger and an additional supplemental budget be requested to cover the escalating costs of travel screening, isolation and quarantine, staffing, and equipment for the response.

      Officials from the agencies involved have told Congress they have enough money to handle the crisis, and haven’t made a supplemental funding request.

      *  *  *

      Full letter below:

      Will the President be impeached for not demanding more money to fund a fearmongering national quarantine against Covid-19?

      Or, as Jim Kunstler recently noted, is there an ulterior motive for Democrats to make more of this than it already is?

      What if the Corona virus turns out to be a genuine pandemic with legs, not some punk-ass, flash-in-the-pan bug like SARS… and infects hundreds of millions around the world…? And what if it happens to go logarithmic in the USA, as in China now…? And what if takes a few months, or half a year, to do that…? And what if Americans will not get on airplanes when that happens…? Or gather together in large numbers…? Or if government imposes quarantines …?

      Will the parties hold their nominating conventions? Might the November election have to be postponed?

      Might that be the Democrats’ easiest route to not losing in November?


      Tyler Durden

      Sat, 02/15/2020 – 21:00

    • The Philippines Want The US Out… And They're Not Alone
      The Philippines Want The US Out… And They’re Not Alone

      Authored by Tim Kirby via The Strategic Culture Foundation,

      The pawns of the Grand Chessboard are starting to move much more boldly – in an unpredicted by the punditry decision the Philippines have asked U.S. forces to leave their islands indefinitely. It was impossible to think even 10 or 15 years ago that a country as completely militarily helpless as the Philippines would dare to stand up to Uncle Sam, but now this has become a reality. In a microcosm this move could be blamed on Duterte’s fiery personal character, or as some sort of fluke, but this is a growing trend that will probably continue for at least the next few years, in which ideology actually plays a major unseen role.

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      The Philippines are a poor troubled island nation that is starting to get its house in order thanks mostly to a powerful charismatic central figure, but if we look at the country through the lens of “Geopolitics 101” then we can see that this nation has more value than one would think due to its location.

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      Souce: Foreign Policy Research Institute

      If we can believe the maps of U.S. base locations presented to us via various forms of media then we can see that even without Manila’s blessing the U.S. still dominates the Pacific Ocean as a whole. Total control of the Atlantic and the Pacific thanks to the Allied victory in WWII has been very good for America to say the least and they need to continue to maintain it. The thing that makes losing the Philippines bad for the U.S. is that it could seriously erode the U.S.’s ability to create a naval blockade around China.

      Although not stated explicitly one of the key reasons for China’s Belt and Road Initiative is the fact that at any moment Washington could completely cut off China’s sea trade. One of the reasons why Chinese goods have come to dominate the global market is due to the rise of cheap shipping costs. Loading a massive boat with cheap goods allows China to make things on the other half of the world for far less, than American workers can in their own country. But without waterways (cheap shipping), the Chinese advantage would be smashed and China as we know it today could be shattered.

      The Philippines are located in the region of a potential Naval blockade, meaning that without them suffocating the Chinese from a naval standpoint becomes much more difficult and perhaps impossible. Not surprisingly, Duterte has been accused of making a pivot to China so perhaps his motivations for getting rid of the U.S. are not entirely morality based, but then again as a weak country the only way for the Philippines to matter is by playing great powers against themselves (or perhaps Chinese bribe money is sweeter). It is very possible that for this group of islands to have any sovereignty it needs bigger players to be fighting over it.

      It may be too early to say because of Duterte’s bold move “the dominos are falling” but this is not the only nation that is trying to or has successfully removed U.S./NATO forces. The Kyrgyz ended foreign operations in their country most of which used their largest airport in Bishkek. (On a personal note it was very odd and humiliating to see an international airport with more foreign military planes in Bishkek than civilian, there were also many accusations of bad behavior towards locals including one alleged murder). Surprisingly even the Iraqi government which was essentially built by the U.S. has asked their forces to leave the country after the assassination of Iranian General Soleimani. Even the Mainstream Media admits that tens of thousands of Japanese have protested against U.S. bases in other country (again due to alleged abuse of locals). However, the government of Japan has made no formal requests to have U.S. forces leave, but quietly the constitutional ban on having a real military is being worn away by Tokyo as it has seen its first round of military expansion in decades.

      In order for the U.S. to maintain its global military presence it needs to take a look at cases in which occupation has been seen as a positive by locals – South Korea. No matter what one’s personal feelings are about the North and South, the simple fact of the matter is that the Korean Peninsula is an all or nothing game. If the U.S. were to give up on Seoul then the North (with Chinese support) would come down and “unify” the nation. Many South Koreans are happy with the status quo and without the USA being around their lives are going to change quickly violently (and from their perspective) for the worse. This American necessity is not felt in Iraq, the Philippines or Kyrgyzstan, but if Washington wants to remain in these places they need to create it. The Cold War is over and America’s classic strategy of “side with Capitalism and you’ll get jeans and cars” is longer an option as the Chinese and to a lesser extent the Russians can also offer up plenty of Materialism.

      A key factor in the Cold War division of the world was ideology. This allowed the U.S. and USSR to put foreign bases all over the planet. The collapse of America’s ideological strength will continue to allow uppity nations to one-by-one say good-bye forever. “The Russian are bad” or “we’ll give you Materialism” are no longer enough to justify foreign occupation. Washington needs to come up with a new ideological strategy and the Russians and Chinese need to be ready for this and at the same time continue to chip away at the failing Monopolar World. When locals see people they perceive as foreigners dominated their country, walking around with guns and occasionally abusing locals there needs to be some sort of grand justification for this.

      In the Philippines there is not such justification. There is no reason from Manila’s or the man-on-the-street’s perspective that American troops should be in their country. The ideological erosion of American values after the U.S. victory in the Cold War must be stopped if the U.S. wants to remain the only global hyperpower.


      Tyler Durden

      Sat, 02/15/2020 – 20:30

    • Bernie Sanders Punk'd By Russians Posing As Greta Thunberg
      Bernie Sanders Punk’d By Russians Posing As Greta Thunberg

      Two Russian pranksters duped U.S. Democratic presidential candidate Bernie Sanders into believing they were climate change activist Greta Thunberg and her father, Svante. 

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      Vladimir Kuznetsov and Alexey Stolyarov told A.P. News they fooled Sanders in an 11-minute call, all recorded and uploaded to YouTube on Friday. 

      The call was allegedly recorded in early December, over a Skype interview with Stolyarov taking the role of Svante while an unknown woman pretends to be Greta.

      The imitators started with the possibility of “Greta” endorsing Sanders’ presidential campaign. 

      “Let us continue to talk and when you come to the United States I will bring some people together and we can do some interesting things, and if you wanted to make a statement in support of my candidacy and the program we have outlined for climate change, I would be very very appreciative,” Sanders said.

      The pranksters then suggested that “Greta” would record a hip-hop song in support of Sanders together with singer Billie Eilish and rapper Kanye West. They said there would be luxury sports cars and hot women dancing while Sanders wears “gold jewelry.” The senator thought it was funny and laughed it off, but apparently, “Greta” was serious. 

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      Sanders said the best way for “Greta” to get involved with his campaign was to release a statement of support, along with, if she was in the U.S., could visit him on the campaign trail. 

      The YouTube video is absolutely hilarious, until it all went downhill after “Greta” asked the Vermont senator about his 1988 visit to the Soviet Union. 

      “In the Soviet Union in 1988, after you were recruited, you were programmed to work for Russia, and your memory was erased so the CIA wouldn’t track you down,” she said.

      “This is what you believe?” Sanders responded. “Yes, you became a sleeper agent of the KGB. Now it’s time to wake up and fulfill your mission, become president of the United States, build communism in the United States, and work for Russia!”

      And it was at that very moment, a little after ten minutes on the call, Sanders hung up after he realized he was punk’d.

      Kuznetsov and Stolyarov have fooled other high-profile victims around the world, including Democratic Rep. Maxine Waters, former U.S. Ambassador to the UN Nikki Haley, actor Joaquin Phoenix, singer Elton John, and President Emmanuel Macron. 


      Tyler Durden

      Sat, 02/15/2020 – 20:00

    • Is Political Change Coming To China?
      Is Political Change Coming To China?

      Authored by Yuen Yuen Ang via Project Syndicate,

      In contemporary China, profound political transformation can – and has – taken place in the absence of regime change or Western-style democratization. The starkest example is the period of “reform and opening” that began in 1978 under Deng Xiaoping’s charge. Although Deng rejected multiparty elections, he fundamentally changed the direction of the Communist Party of China (CPC), as well as the distribution of power within it.

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      The coronavirus epidemic that began in Wuhan in December 2019 may augur a similar historic turning point. The outbreak of what is now called COVID-19 represents more than just a passing moment of stress for the CPC. The world should be prepared for what could come next.

      Normally, a single epidemic, even if mishandled, would not break the Chinese regime. Over the past four decades, the CPC has weathered numerous crises, from the 1989 Tiananmen tragedy and the 2002-03 SARS epidemic to the 2008 global financial crisis. Some of the regime’s critics have long predicted its imminent demise, only to be proven wrong. Before President Xi Jinping, the Chinese style of governance was adaptive and decentralized, or what I call “directed improvisation.” In addition, civil society, including muckraking journalism, expanded rapidly.

      This time is different. Since coming to power in 2012, Xi has tightened political control at home and projected superpower ambitions abroad. These policies have unnerved Chinese private investors, alarmed Western powers, and sharpened tensions with the United States, all of which have contributed to a broader economic slowdown.

      The COVID-19 outbreak has added an additional source of stress and unpredictability to the regime’s mounting challenges. As the epidemic persists, China will struggle to reopen for business, bringing even stiffer economic headwinds as small- and medium-size enterprises fail, workers lose jobs, and inflation picks up. While the Chinese leadership is highly adept at solving one crisis at a time, it has rarely had to confront so many near-existential crises at once.

      In a recent commentary, Kevin Rudd, a former Australian prime minister who is now president of the Asia Society, argued that “the crisis, once resolved, will not change how China is governed in the future.” But that prognosis is too optimistic. Indeed, cracks are already appearing in Xi’s supreme leadership.

      For example, at the peak of the public outrage over the government’s initial cover-up of the outbreak, Xi disappeared from public view. After his meeting with the director-general of the World Health Organization, Tedros Adhanom Ghebreyesus, on January 28, he didn’t resurface until his state meeting with Cambodian Prime Minister Hun Sen on February 5. For a leader who normally dominates China’s news cycle every day, Xi’s absence amid a national panic was conspicuous, and led some Chinese observers to speculate that his grip on power may be in peril.

      If that seems unthinkable, it is worth remembering that the past years have produced events that few anticipated. Who predicted, for example, that an American real-estate mogul would face off with a Chinese princeling in an earth-shaking superpower rivalry, or that China might replace the United States as a champion for capitalist globalization? The current moment of precariousness could well give way to more profound political change.

      Three possibilities stand out.

      The most extreme, worst-case scenario is regime collapse.

      China bashers who read that sentence should not gloat, because the sudden dissolution of an authoritarian regime does not necessarily lead to democratization; in many cases, it leads to civil war, as we saw in Iraq after the United States forcibly removed Saddam Hussein and as we see today in post-Qaddafi Libya. A violent power struggle within China would be catastrophic for the entire world.

      Fortunately, this scenario is unlikely. Although China is under unprecedented stress, its economy has not come to a standstill. As Shang-Jin Wei of Columbia University pointed out, China’s highly developed e-commerce industry allows residents to continue shopping from home. And while tens of thousands of Chinese are infected with the virus and many more are furious at the government, the vast majority of the population is nowhere near desperation.

      The second scenario is a change in leadership at the highest level.

      Xi cannot avoid blame for the backlash against his restrictive domestic policies and assertive actions abroad, which had already begun to undercut support for him even before the COVID-19 epidemic. With the death of Li Wenliang, a doctor who was rebuked by state authorities for warning others about the virus, the failings of Xi’s top-down approach have been laid bare. News of Li’s passing unleashed a firestorm of online criticism of the government, and Xi’s failure to appear on the frontlines of the fight has further diminished his credibility as a populist leader.

      In principle, Xi’s abolition of constitutional term limits allows him to stay on as president for life. But whether he actually will remain in office after his current term ends in 2022 is now an open question.

      Owing to the concentration of power in the Chinese system, the paramount leader has an outsize impact on all spheres of society, as well as foreign policy. If a new leader were to take over in 2022 – or even before then – the most likely outcome would be a reset of all of Xi’s policy priorities, forcing the rest of the world to revisit its thinking about China and its global role.

      In the third scenario, Xi clings to his post, but it is hollowed out and power shifts over to various other competing factions.

      Such an arrangement would not be without precedent. After the Great Leap Forward, Mao Zedong’s fanatical campaign in 1958-62 to “catch up with Britain in ten years,” killed 30 million peasants, Mao was forced into retirement but remained paramount leader in name. (Later, he would stage a comeback, ushering in another decade-long disaster: the Cultural Revolution).

      It is already clear that Chinese politics and governance will not be the same after the COVID-19 outbreak. The myth that Xi and his supporters have sustained about the virtues of centralized control has been demolished. Li’s parting words – “A healthy society should not have only one voice” – will remain etched in the minds of hundreds of millions of Chinese, who have seen for themselves that censorship can endanger their lives. 


      Tyler Durden

      Sat, 02/15/2020 – 19:30

    • "Tankers, Tankers. Everywhere!" – Virus Causes Historic' Traffic Jam' Across Asian Supply Lines
      “Tankers, Tankers. Everywhere!” – Virus Causes Historic’ Traffic Jam’ Across Asian Supply Lines

      Covid-19’s effect on global energy markets has been disastrous. OPEC slashed its oil demand forecast last week, and Goldman Sachs doubled down on its bearish oil take and has cut its oil price target by $10 to $53 for the year, as a result of a “demand shock” that is set to collapse Chinese oil consumption by 20%, or as much as 4 million barrels per day.

      The sharp decline in demand in China, which by the way, is the world’s largest oil importer, is now stranding oil cargoes off the country’s coast and across Asia.

      Bloomberg’s Stephen Stapczynski records footage of an impressive parking lot of tankers and other vessels off the coast of the anchorages of the port of Singapore, one of the largest freight hubs and busiest ports in the world. 

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      Much of the oil consumption decline is because, as we reported on Friday, China’s economy is faltering as its industrial hubs remain shuttered.

      Take a look at the chart below, in the Feb 7-13 week, steel apparent demand is down a whopping 40%, but that’s only because flat steel is down “only” 12% Y/Y as some car plants have ordered their employee to return to work.

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      Real-time measurements of air pollution (a proxy for industrial output), daily coal consumption (a proxy for electricity usage and manufacturing), and traffic congestion levels (a proxy for commerce and mobility) suggest that the second-largest economy in the world has frozen. This all indicates the demand for energy products to power machines and vehicles has abruptly stopped.

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      A significant bottleneck for Very Large Crude Carriers (VLCCs) deliveries to China is developing, forcing some ports to reject new tanker loads, contributing to a parking lot of tankers sitting off the coast and in other regions in Asia. 

      Some cargos have been diverted to Singapore, Malaysia, South Korea, but even in those regions, tanker traffic jams are building. 

      Crude storage in China filled up near full capacity last summer, mostly due to declining demand thanks to a decelerating economy.

      China’s overall crude storage is around 760 million barrels, versus a peak of 780 million barrels last June. 

      Middle East traders who export crude via VLCCs to China reported weaker demand. VLCC rates from the Middle East to China have plunged since the virus outbreak began early last month.

      “In gas markets, a one Chinese company declared force majeure, potentially allowing it to walk away from contractual commitments. The measure was rejected by Total SA and Royal Dutch Shell Plc. There are now 12 empty liquefied gas carriers sitting off the coast of Qatar, one of the world’s biggest producers. While the precise reasons for the idling vessels aren’t known, the timing coincides with ship diversions, cargo cancellations and reduced demand in Asia since the virus took hold. Oil tankers have been dawdling off China,” reported Bloomberg. 

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      The parking lot of tankers developing off the coast of not just China but other countries in the region have forced some traders to transfer crude to less expensive tankers to save on demurrage costs, over the fear cargos could be moored offshore for an extended period as an economic crisis in China unfolds. 

      And to summarize what we know so far: China’s economy is collapsing, crude consumption is plunging, which has forced refiners to cut runs as a glut is developing, has now led to tanker parking lots moored off the shores of many countries in Asia. 

      What is also known is that bunker fuel prices at major ports in Asia, including Singapore, Hong Kong, South Korea, Taiwan, and Japan, have been declining since the virus outbreak began early last month.

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      The world is bracing for a huge virus shock from China, not seen in over a decade – this could easily tilt the world into recession.


      Tyler Durden

      Sat, 02/15/2020 – 19:00

    • Is Poetic Justice Coming For The 1%?
      Is Poetic Justice Coming For The 1%?

      Authored by John Rubino via DollarCollapse.com,

      To understand just how grim the coming decade is likely to be for the world’s super-rich, let’s start with three premises:

      1) Capitalist democracy — defined as free individuals managing their own property and periodically electing new leaders — is the only system of social organization that’s consistent with human nature and is, therefore, sustainable.

      2) Capitalism inevitably produces inequality as a few participants — through energy, creativity, and (frequently) luck — do extremely well while the vast majority do okay and a few do very badly.

      3) Since the big winners — now commonly known as the 1% — are vastly outnumbered by the rest of society, they can only keep their exulted position if they convince the 99% to let them be. If the rich fail to make their case, everyone else will simply vote to expropriate the most visible fortunes.

      If you accept these assertions, it follows that enlightened elites would be all about fostering upward mobility, because when people on the lower rungs of the economic ladder know that by working hard and following the rules they can move their families to the next higher rung in a reasonable amount of time, they focus on their on improving prospects and don’t much care if a few billionaires live like princes and kings.

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      But that’s emphatically not the case these days. The current generation of corporate and political winners have blatantly and systematically exploited nearly everyone else. Amazon, for instance, staffs its hellscape warehouses with RV caravans of migrant senior citizens working long, hard days for subsistence wages. Apple makes its high-margin phones in Chinese sweatshop factories where suicide is the biggest occupational health hazard.

      Manufacturing company CEOs close their domestic factories and ship the jobs overseas, then pay themselves massive year-end bonuses to reflect the resulting slight uptick in profit margins. Banks hijack the political process to get themselves deregulated and then pass laws that make borrowers lifetime slaves of creditors. Politicians enter public life with modest bank accounts and retire multi-millionaires. Pretty much the entire political/corporate class favors more-or-less open borders, guaranteeing themselves cheap nannies and gardeners while American wages stagnate.

      And they do all this publicly, apparently so sure of their virtue that they see no need to hide their predation.

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      And now, as debts mount and anger builds, the typical response of this “breakaway civilization” is to buy compounds in New Zealand in which to weather the end of the financial world.

      Populism becomes the new normal

      Why would any voting majority put up with the above? Well, they wouldn’t if they have alternatives. And now the political system is offering plenty, in the form of left and right-wing populism. In virtually every major country there are movements, parties and individual politicians who point out that the system is rigged in favor of the rich an promise to claw back what was stolen. And they’re doing well. Donald Trump, Brexit, France’s Yellow Vest protesters and Bernie Sanders are examples of this process in action, but they’re just the beginning. Every major country will have its Trump or Sanders in the coming decade, which means globalism will be dismantled, marginal tax rates will soar, fortunes will be expropriated, and borders will be closed to free movement of people and/or capital. It will, in short, be open season on the aristocracy.

      Imagine, for instance, President Bernie Sanders’ reaction to a mass migration of mega-fortunes to overseas end-of-the-world bunkers: “Oh, you’re leaving? Fine. Go. But your mansions, bank accounts and stock portfolios stay here to fund health care. And we’re talking to New Zealand about a bunker tax. Bon voyage.”

      This of course will lead to an implosion of capitalist wealth creation right out of Atlas Shrugged. Which is to say the 1% will lose twice, first when governments take big chunks of their fortunes, and then when whatever is left evaporates in a global financial crisis.

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      To sum up, the coming decade will be bad for just about everyone except gold bugs. But it will be the fault of the people who should have seen it coming and could have prevented it.


      Tyler Durden

      Sat, 02/15/2020 – 18:30

    • Investors Agree To Unprecedented 95% "Gate" As They Hand $3 Billion To Englander's Millennium
      Investors Agree To Unprecedented 95% “Gate” As They Hand $3 Billion To Englander’s Millennium

      Back in 2014, we speculated that as the market rose ever higher on ever lower liquidity and ever more central bank intervention, if and when the moment came that price discovery was permitted again, the avalanche of selling would be unstoppable and the entire market would be halted indefinitely, very much as what happened to 2014’s high flying penny stock CYNK.

      Yet while a marketwide halt would not surprise us, what we find remarkable, is just how many investors now seem resigned, even if subconsciously, to never getting their money back after the next crash.

      Case in point, Izzy Englander’s multi-billion “pod-based” fund, Millennium Management, which according to Bloomberg has managed to raise $3 billion without batting an eyelid, a remarkable achievement for a hedge fund at a time when its peers suffered nearly $100 billion in outflows in 2019, just shy of the biggest annual outflow since the financial crisis.

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      Yet while Millennium’s ease at raising money is indeed impressive (the $40+ billion fund returned less than 10% last year, a third of the S&P, but has been consistently profitable for the past decade), what we find fascinating is not only the ease with which investors handed over their money to the 72-year-old former options guru Englander, but their willingness to be constrained by one of the most draconian locks up in hedge fund history.

      According to Bloomberg, which read a Feb 12 letter from the fund to investors, the share class open to new investments limits the amount clients can pull to 5% of their money each quarter, meaning it would take them five years to fully cash out. The 5% quarterly redemption limit means that in a quarter in which markets tank and investors want to pull their money, they will only be allowed to pull just 5%. In other words, Millennium investors have pre-emptively agreed to be gated to at least 95% of their capital following a “market event.” And all this just to be allowed to invest in the vaunted Englander’s hedge fund.

      “The 5% quarterly share class will be the primary form of any new investment,” Englander wrote in the letter. A spokesman for the New York-based firm declined to comment.

      One reason why Millennium has pushed such draconian terms on new investors is that it already has a line of people waiting to give it money: the hedge fund raised $4.1 billion in 2019, when it opened to new capital for the first time in two years. Now, it expects that to reach $7.1 billion by March, according to a Feb. 12 letter to investors. The total would push its total AUM to roughly $50 billion, even as its regulatory assets under management surpass $200 billion (MLP is one of “those” hedge funds that rely a lot on bank repo arrangements)

      Millennium’s remarkably long lock up, one which puts some private equity funds to shame, comes as Hedge funds are increasingly trying to secure investor capital over longer periods to avoid sudden mass redemptions if markets turn volatile. Millennium had withdrawals of at least $1 billion in 2008 as investors found themselves in need of capital during the financial crisis. One can argue that by effecting pre-emptive “gates” that allow investors to pull just 5% of their capital, Englander is telegraphing that the party is about to end and that investors will rush for the exits. The only problem: they won’t be able to as the fine print in their contract now says.

      To be sure, Millennium’s brazen lock up is something that only a handful of stellar hedge funds can afford: as Bloomberg notes, “the firm’s growth shows that some big-name hedge funds with solid track records still have committed clients even as investors remain skeptical toward the industry. High fees and mediocre returns sparked accelerating redemptions industrywide last year.”

      The firm returned profits to investors in 2019 for the second year in a row, according to a person with knowledge of the matter, who asked not to be identified because the information isn’t public.

      Ironically, most of Millennium’s new capital will come from existing clients either reinvesting gains or adding fresh cash; in other words the nearly 11 year long bull market has made investors forget what happens when there is a market crash and a panicked flight for exits. And Millennium is capitalizing on just that.

      Other highlights from the letter:

      • After a hiring spree, Millennium ended 2019 with “the largest number of portfolio managers in our history” — more than 230. Much of the activity was in Europe and Asia.
      • Millennium is pursuing “new types of quantitatively driven trading strategies.” As technology has advanced, the firm has worked to hire a wider array of quant managers.
      • The firm has built up its infrastructure to “ingest, cleanse and curate data.” It manages more than 2,000 data sets across almost 400 providers, more than 10 trillion records of ready-to-use data and 2,000-plus terabytes of compressed stored data.


      Tyler Durden

      Sat, 02/15/2020 – 18:00

    • The Gold-Silver Ratio
      The Gold-Silver Ratio

      Authored by ‘mickeyman’ via The World Complex blog,

      A couple of weeks ago, Wheaton Precious Metals released a very useful study on the gold-silver ratio.

      Today I would like to take a look at some of its implications.

      The most important implication is one that everyone needs a little time to absorb. That is that there is no characteristic value for the gold-silver ratio (GSR).

      That means that there is no “true north”, or no mythic value (16, for instance) to which it is attracted, and to which it would return if only the world stopped manipulating its price.

      The Wheaton conclusions are quite definite.

      • The gold-silver rises during deflationary periods and disinflationary periods (we’ll look at this distinction shortly).

      • The gold-silver ratio falls during inflationary periods.

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      What is unclear is whether a rising GSR causes deflation, or deflation causes a rising GSR. I know which one I believe.

      Let’s test this against some measures I’ve used for deflation/inflation. I’ll use the weekly chart of USDX vs gold price, weekly, going back to the beginning of 2008.

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      It is a busy visual, but what we want to do is look at longer-scale variations.

      • Intervals when both the USDX index and the gold price rise are considered deflationary.

      • If gold rises and the US dollar index falls, we have inflation (hence inflation and deflation are not opposites).

      • Gold falling and the dollar rising will be disinflation, and I suppose that

      • if both gold and the US dollar fall, we must have disdeflation, although I have never seen that word anywhere. It’s a little hard to say, so it might be best to leave it nameless, and remember that if it ever happens, you should be shorting gold stocks.

      Through most of 2008, the graph above suggests we were experiencing disinflation, and over that interval, GSR rises from 55.7 to 77.1

      Much of 2009 was characterized by inflation, and the GSR fell from 77.1 to 63.3.

      Until the middle of 2010, we had disinflation, and the GSR rose slightly.

      The big inflationary pulse into late 2011 saw the GSR falling to 40.8. The final blow-off in the gold price did not see any movement in the US dollar index, so it technically lies between inflation and deflation, but I don’t know what to call it. The GSR actually rose during that interval, which makes some sense as the gold price rose over $200 in that time.

      The following disinflationary episode that lasted through 2013 saw the GSR rise to 65.9.

      Since then, the dominant trend has been deflationary, although realistically there have only been two deflationary pulses–through early 2015 (GSR 74.5) and over the past 18 months (GSR at 88.6). Most of the time has been consumed by short inflation-disinflation cycles, with slight rises and falls of the GSR without significant trend.

      Over the entire chart (twelve years) the big picture is deflation, but most of that has been accommodated through cycles of inflation and disinflation.

      So long as deflationary conditions persist, the GSR may rise without limit. As long as debts are created beyond any ability to repay them, deflationary conditions will rule. Under such conditions, despite the GSR being pretty much the highest in history, gold remains a better investment than silver.

      However, as much of the actual deflationary effect is brought about by cycles of inflation and disinflation, there are  brief intervals where silver makes a better investment than gold. But rather than using the level of the GSR as your selection criterion, you need to look closely at monetary policy instead.


      Tyler Durden

      Sat, 02/15/2020 – 17:30

    • Trump & Erdogan Discuss Ending "Unacceptable" Syrian Offensive To Take Back Idlib
      Trump & Erdogan Discuss Ending “Unacceptable” Syrian Offensive To Take Back Idlib

      On Saturday President Trump held a much anticipated and crucial phone call with his Turkish counterpart Tayyip Erdogan at a moment tensions are soaring over Idlib, and after a week of direct confrontations between the Syrian and Turkish armies left scores dead and wounded on either side. 

      Turkey’s foreign minister said the two leaders discussed the unfolding crises in Syria and Libya — both places where Turkey is controversially intervening militarily — as well as the White House’s peace plan for the Israel-Palestine conflict, which Erdogan in no uncertain terms has rejected. And though few details were given, the two reportedly agreed for the resumption of US-Turkey trade talks. 

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      File image: AFP

      As expected the two condemned the Syrian Army advance into Idlib, calling the military offensive with Russian support “unacceptable”. This after last week the US dispatched special envoy for the region James Jeffrey to Ankara, where the diplomat verbalized full support to “our NATO ally Turkey”.

      “Stressing that the regime’s most recent attacks are unacceptable, the president and Trump exchanged views on ways to end the crisis in Idlib without further delay,” the Turkish presidency said in a statement.

      Turkey is worried about record-number refugee displacement as hundreds of thousands are reportedly now fleeing to the border, while Damascus and Moscow have charged Turkey with protection terrorists operating in Idlib. They expressed their desire for an immediate halt to the fighting. 

      On the issue of Trump’s ‘Deal of the Century,’ Erdogan reiterated during a separate remarks to reporters on Saturday:

      “I would like to state once again that this so-called peace plan is nothing but a dream that threatens the regional peace and tranquility,” Erdogan told reporters upon his return to Turkey after his Pakistan visit.

      He said Turkey would never allow for the “legitimization of invasion, annexation and destruction” of the Palestinian state and its people.

      Immediately after the January roll-out of the plan with Israeli PM Benjamin Netanyahu, Turkey was the first country to slam it as merely justifying “Israeli occupation and annexation of Jerusalem and the West Bank.”

      Foreign Minister Mevlut Cavusoglu revealed some of the details of the Erdogan-Trump phone call after meeting with his Russian counterpart at the Munich Security Conference.


      Tyler Durden

      Sat, 02/15/2020 – 17:00

    • Senate Attacks Judy Shelton For Sin Of Being Outside The Mainstream
      Senate Attacks Judy Shelton For Sin Of Being Outside The Mainstream

      Authored by Tho Bishop via The Mises Institute,

      Earlier this week, the Senate Banking Committee held a hearing for President Trump’s two most recent Federal Reserve nominees.

      In one chair sat Christopher Waller, vice president and director of research at the Federal Reserve Bank of St. Louis, whose dreadfully dull answers could have been the product of a bot forced to watch one thousand hours of central bank testimony.

      Luckily for those watching, most of the questions were directed towards the far more intriguing – and controversial – Judy Shelton.

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      Although by no means an Austrian, Judy Shelton’s record includes public support for a modern gold standard, criticism of the Fed’s response to the financial crisis, and even a comparison of America’s central bank to Soviet central planners. On the topic of competing currencies, Ms. Shelton once referred to Bernard von NotHaus, a man arrested by the US government for the production of silver “Liberty Dollars,” as the “Rosa Parks of monetary policy” for his willingness to challenge the Fed. Beyond monetary policy, she cited government deposit insurance as a program that risks creating moral hazard, suggested that the US could pay off its public debts by selling off assets such as the US Postal Service and federally held public lands, and even publicly questioned the accuracy of government inflation measures.

      The recounting of the greatest hits of Judy Shelton offered a glimpse of what it would look like to actually drain the swamp of central bankers.

      Of course, all of this was sharply – and at times uncivilly – criticized by duly elected economic midwits who sought to lecture to Shelton while desperately relying upon the prepared questions of legislative aides.

      Senator Richard Shelby, at one point the chairman of the banking committee, was particularly appalled at the notion of nominating a Federal Reserve candidate so outside the mainstream. His grilling of Ms. Shelton included sagely pointing out that the amount of gold in the world is worth less than the American GDP and suggesting that the gold standard was a product of the days when the US was a “barter economy.”

      Of course, it is a reflection of the dilapidated state of modern economics that Shelby’s ignorance would make him a safer choice for the Federal Reserve than either Shelton or her friend James Grant.

      It is also sad to see Shelton, obviously a very intelligent woman, take the strategy of trying to sing from a more traditional script rather than take the opportunity of the hearing to defend the ideas she has long supported. Although there were times when she offered clever outs to her testimony, such as declaring that she would never want to “go back” to any previously existing monetary system (which is not the same thing as seeing a potential use for a newly priced gold backing in the future), for the most part Shelton attempted to try to present herself as a more status quo figure.

      In one of the more entertaining exchanges, Senator John Kennedy of Louisiana pushed Ms. Shelton on what she would recommend if faced with an abrupt financial crisis. Her response, unfortunately, was more of the same – taking interest rates to 0, more QE. It was an answer so uninspired that it was basically repeated by Mr. Waller.

      Shelton was also attacked for apparent changes in her policy prescriptions during the Trump regime.

      Although she once (accurately) blasted the Obama administration for monetary and fiscal recklessness, she has advocated for more accommodative policy in recent years. One could perhaps forgive Shelton for the sin of identifying the Federal Reserve for what it really is – a political institution – but her nomination is likely to be killed by senators who prefer to maintain that the illusion it is anything but.

      In fact, shortly after the hearing, Washington was already filled with whispers about her nomination already being dead.

      If true, Congress will miss the opportunity to actually act on the goal that is so often given lip service on the Hill—increasing diversity on the Fed. Beyond the irrelevant point of her gender, Judy Shelton would have brought a heterodox economic perspective from well beyond the echo chamber of modern central banking. Having received her PhD in business administration from Utah State University, she is far removed from the elite institutions that are quite effective at wiping out common sense.

      At least the Fed will have the addition of Mr. Waller, who can offer such pearls of wisdom as:

      The fiat monetary system we have around the world works well as long as it is managed well by the central bank.

      Where would America be without such invaluable insight!


      Tyler Durden

      Sat, 02/15/2020 – 16:30

    • Wuhan's Hastily-Constructed 1,000-Bed Coronavirus Hospital Is Already Falling Apart
      Wuhan’s Hastily-Constructed 1,000-Bed Coronavirus Hospital Is Already Falling Apart

      The 1,000-bed hospital constructed in about a week to handle the Covid-19 outbreak in Wuhan, China, opened its doors about 13 days ago, or around Feb 03, has already experienced a massive water leak that has flooded hallways, according to an alleged video posted by Twitter handle Harry Chen PhD on Saturday.

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      Chen tweeted another video of water falling from the ceiling on hospital beds for virus-infected patients. 

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      We noted earlier this month that Wuhan’s new 25,000-square-meter hospital, one of two new facilities commissioned in response to the virus outbreak, was completed around the first of the month. Here’s a time-lapse video of the construction: 

      The building of the hospital, and the news headlines that surrounded it, was nothing more than propaganda spread by the Communist Party of China to Western media outlets to obtain the image that everything was under control. However, that narrative of “contained” collapsed last week as confirmed cases in China skyrocketed, and deaths soared, leaving many to believe that the virus crisis is worsening. 

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      What a disaster the virus outbreak has become. Governments and their corporate media counterparts are failing to control the narrative that everything is “contained” as we close out the second week of Feb.

      The virus is going global, and there’s no vaccine for at least 12-18 months. 


      Tyler Durden

      Sat, 02/15/2020 – 16:00

    • The Four Coronavirus Scenarios: The Bad; The Worse; The Ugly; And The Unthinkable
      The Four Coronavirus Scenarios: The Bad; The Worse; The Ugly; And The Unthinkable

      Submitted by Michael Every of Rabobank

      Summary

      • The Covid-19 coronavirus could be more disruptive than markets are currently pricing in. Not in the least because the ‘true’ number of infected people remains uncertain, as the recent surge in cases exemplifies

      • We outline four scenarios in which the virus increasingly becomes severe: The Bad; The Worse; The Ugly; and The Unthinkable

      • We provide rough estimates for China’s growth trajectory in these scenarios although we stress that these are not our official forecasts since we are still working out the details

      • The three main channels through which Covid-19 will affect the global economy are tourism, net exports, and intermediate goods

      • In the ‘Bad’ scenario the virus outbreak does not last far beyond Q1. China’s GDP growth for 2020 could drop to below 5%, with production taking the biggest hit and a catch up in Q3 and Q4. This is our base case scenario, although with the recent surge in mind, the second scenario is becoming increasingly likely

      • In the ‘Worse’ scenario, the virus outbreak lasts beyond Q1. In that case China’s GDP growth could end up below 4% in 2020

      • In this scenario, next to China, Asia will bear the brunt of the prolonged outbreak due to its dependence on Chinas as an export market and intermediate imports as well as for tourism

      • In China itself, defaults of non-financial corporates in China could start to rise rapidly

      • This will lead to a decline in China’s long-term growth potential as private companies will suffer most, while less efficient SOEs will likely be bailed out. As a result, debt levels will balloon further, leaving China more vulnerable in the future

      • There will also be downwards pressure on the Chinese currency as extra CNY liquidity is made available

      • In the Ugly scenario, the virus spreads beyond China, and spreads to Asia as well as developed economies. Its effects will likely resemble the Global Financial Crisis of 2008/2009 more than the SARS outbreak in 2003

      • The Unthinkable scenario is a far left tail scenario, in which the virus mutates and becomes a truly global pandemic

      Risk on?

      Financial markets have been on a roller-coaster ride since the Novel coronavirus Covid-19 stole the headlines – albeit mainly on the ascent phase (bar today’s reaction) of the ride so far in terms of equities at least. At this stage, it’s still too early to tell whether or not Covid-19 is ‘under control’ or not. Especially given that the most surge in cases (due to a new counting methodology) shows that we don’t really know the actual number of infected cases (Figure 1).

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      In a research report published end-January we discussed the ‘most likely’ outcome for the global economy and markets based on what we knew at the time. But the huge uncertainty surrounding the spread of the virus as well as its impact on economic behaviour implies that we are still dealing with a wide range of possibilities from a relatively quick stabilization of the situation to a full-blown pandemic with far far-reaching consequences.

      This report will therefore examine what the potential impact of the virus will be on the Chinese, Asian, and global economies under four different scenarios. As shall be seen, none of these are positive, in contra-distinction to the relative optimism shown by equity markets at present. In fact, all of them are negative to varying degrees such that we dub them: The Bad; The Worse; The Ugly; and The Unthinkable.

      The Bad

      This scenario is actually the ‘good’ one that markets are apparently pricing for, which would see a quick stabilization of the situation in China and assumes that the international spread of the virus remains limited to a number of countries, notably in the Asian region, but with no repeat of the swift spread we initially saw on mainland China.

      This is a relatively benign scenario with the economic effects mostly concentrated in Q1 and part of Q2 2020. Regardless, we still envisage that China’s Q1 growth rate in this scenario could fall to 2.9% y-o-y, which is 3% lower than our previous forecast of 5.9%. Assuming the most draconian containment measures are gradually withdrawn during Q2, the impact on Q2 growth is likely to be smaller but still negative. Only in H2 would we expect a partial rebound. For 2020, our ballpark growth figure is 4.8% – 5.6% y/y GDP growth, and then and between 5.5% – 6.3% for 2021. (These are not our official forecasts. We are still working out the details and will present them in our upcoming quarterly outlook).

      We expect Chinese industrial production to take the biggest hit near-term as factories remain mostly closed in Q1. Production growth in this scenario will drop to 2.2% y-o-y in the quarter, which is 4% below its 3-year average (6.1% y/y). However, there will likely be some catch-up growth in production in Q3 and Q4.

      Services will take the second largest hit, slowing to 3.5% y-o-y, which is 3 percentage points below its 3-year average (7.5% y/y). Services will rebound too in H2, albeit partially. We say partially because while industrial production may “catch-up”, consumer spending is less likely to do so. People will not get an extra haircut or go on vacation twice to catch up on missed haircuts and vacations. Crucially, the services sector now comprises more than half of China’s economy (52%); in 2003 this was just 42%.

      In terms of stimulus, we can naturally expect both fiscal and monetary policy to play a large role. The PBOC has already injected a significant quantity of liquidity via various channels, including reverse repo, totalling CNY2.9 trillion (USD 414 bn) at the time of writing (although a large part of this injection is for refinancing of previously ending contracts). More will be forthcoming, in their own words. Interest rates, such as where they matter in a quantity-driven credit economy like China, will also be lowered.

      At the same time, the fiscal taps will have to open. We are again already seeing accelerated issuance of local government special bonds, and the central government fiscal deficit will also widen as needed to ensure the economy gets back on track as soon as possible.

      However this is not a cost-free exercise. Already-high debt-ratios of corporates and the state in China will rise even higher. The narrative of deleveraging, which we did not subscribe to, will be comprehensively debunked. China will have to carry that debt with it in the future.

      Concurrently, this new stimulus runs counter to China’s ambition to make its financial system more stable. Chinese banks already face rising non-performing loan (NPL) levels. For example, S&P estimate that in a growth slow-down these could multiple five or six fold, into the hundreds of USD billions. The actual, rather than realised, figure is likely to be far worse.
      Crucially, China’s banks are also already capital constrained. Having to step in and support so much of the economy will almost certainly see them having to raise capital or rely on the PBOC. Indeed, in almost all scenarios the PBOC will be doing much more ahead.

      In which case, a combination of increased CNY liquidity and lower Chinese rates, to say nothing of a drop in capital inflows, is likely to place significant downwards pressure on CNY. Might this even limit the PBOC’s room for action given China’s commitment to the US under the Phase One Trade Deal not to weaken its currency? Notably, the US is already recognising that there will be delays in China meeting its other promise, of huge US goods purchases.

      For the global economy this scenario is also painful as China has become a critical driver of global economic growth. The sensitivity of the world economy to China’s growth rate was 0.17 between the 1980s and 2000, which has almost tripled to 0.47 in the last 15 years. Thus each percentage point of Chinese GDP growth coincides (we don’t say ‘leads to’) with about half a percentage point in world GDP growth (Figure 2). This scenario will see 2020 world GDP growth -0.2ppts lower than our current estimate of 2.9%.

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      The economic transmission mechanisms are as clear as those of the virus.

      Automatic transmission

      On the demand side, China is responsible for more than 25% of tourists in a host of countries such as South Korea, Vietnam and Thailand, but also Australia, New Zealand, and Hong Kong (Figure 3). It also sends millions of tourists further afield, to Europe and the US, for example. Naturally, a decline in Chinese tourists will hit hardest for the countries where tourism is largest as a share of GDP.

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      Thai tourism, for example, constitutes 20% of GDP and employs about 10% of the workforce. Chinese tourists alone account for about 6% of Thai GDP. Indeed, the virus is already hitting Thailand hard as seen from anecdotal reports from Thai resorts and Bangkok, which is a popular destination for visitors from Wuhan.

      The second channel of demand-based transmission is exports. For Australia, New Zealand, Taiwan, and South Korea, more than 25% of exports go to China; for Hong Kong this figure is as high as 78% (Figure 4).

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      Even Europe cannot escape: 7% of Germany’s exports (EUR 96 bln) go to China, a quarter of which are cars. The rest of Asia constitutes 11% of German exports. Thus a full 18% of German exports will be hit directly or indirectly be less demand from China as well as disruption of transport routes. With German automotive output already at its lowest level since 2010 (Figure 5), significant weakness in Chinese demand could be a serious headwind for Germany.

      The third transmission channel is indirect, and potentially just as disruptive: a supply shock. China is a vital part of international value chains and international firms rely on Chinese intermediate goods to produce their end products. Thus, a disruption in Chinese output means these companies are unable to produce their final goods, or at least face delays in production, depending on when production in China can be re-started.

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      On a macro level countries such as Vietnam, South Korea and Indonesia are especially prone to this (Figure 6), and in Europe so is Germany: about 9% of Germany’s total import of intermediate goods is from China. Germany’s car sector could thus feel the effects of the coronavirus via its exports to China, which will be hit, as well as in the difficulty getting of getting key imports from China in order to produce the cars.

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      Indeed, we have already seen several major Korean firms such as Hyundai and Kia shut down some local production due to lack of inputs from China, with consequent spill-over effects on to their own national supply-chains.

      It should also go without saying that this trend is also playing out within China itself: China is vastly more correlated with China than it is with the rest of the world! Indeed, the under-appreciated risks of long- and China-centric supply chains are being underlined by the current crisis.

      Longer-term impact

      One also needs to consider the longer-term structural damage that will be seen the longer the virus is present for. The Chinese government will naturally aim to bail out its large State-Owned Entities (SOEs) if they suffer; but could it really do the same for private companies, SMEs, or for indebted households? That seems far less achievable. How far can the state really prop up the domino effect of cascading small and medium firm failures? How can it make households good short of suspending mortgage payments, for example, or huge increases in welfare spending, which China does not currently have systems in place for?

      As such, Chinese GDP growth may only be sustained by a deepening of state activity and PBOC activism. The long-term effects of this kind of bail-out at a time when China is ostensibly supposed to be reforming would be that the Chinese economy as whole becomes less efficient in terms of its investment, which is already a key problem. This would mean a short-term stimulus sitting alongside a reduction China’s long term growth potential.

      In addition, and as we already noted, either China’s government debt will balloon because of large bailouts of even-more indebted firms and households, at a time when this is already becoming an issue of concern. Note that the combined debt of non-financial corporates, the government and households has already reached 260% of GDP (Figure 7).

      The Chinese currency could come under increased downwards pressure in financial markets as well, due to the massive extra CNY liquidity and matching lower Chinese rates.

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      The Worse

      In ‘The Worse’ scenario the virus spreads further within China and lasts longer than in the previous scenario (6-9 months).

      Within China, the economic impact will naturally be amplified, with only a partial bounce-back in H2 2020. The pressures on the Chinese government, corporates, and households if nobody is able to work for an extended period, and then on its banks and through to CNY, would increase by orders of magnitude.

      In order to ascertain how likely this outcome is, one can arguably track real-time day-to-day air quality data looking at Nitrous Dioxide (NO2) levels in major Chinese cities, as a proxy for the polluting effects of economic activity. What can be seen at time of writing matches anecdotal descriptions of a property market in deep-freeze, ghost cities, and shuttered factories.

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      Assuming a longer, deeper virus impact we see China’s GDP growth for 2020 in a 3.8%-4.6% y/y range. Again production will take the largest hit because factories will be shut down longer. Services will take the secondary hit. Moreover, the global effect will be far stronger: global growth could decline by a full 1% in 2020. However, we do expect some rebound in late Q3 and in Q4, although the recovery in services will be relatively less due to an extended period of negative sentiment.

      The Ugly

      This ‘Ugly’ scenario would see the virus continue to rage in China, spread to ASEAN, Australia and New Zealand, and the cluster of cases in the US and Europe snowball at an exponential growth rate from their currently low base. In other words, developed economies would also be hit.

      If the virus spreads in the West public panic would naturally be the immediate response. Just as seen in China today, people would stop going out and shopping to stay safe at home, or make panic purchases on fears of supply shortages and then stay at home. In short, the economy would largely grind to a halt.

      Naturally, the services sector on which the West relies far more than China would be smashed: restaurants; pubs; bars; cinemas; concerts; conferences would all grind to a halt. International travel bans would be put in place. Supply chains would be broken. International trade would collapse along with domestic demand.

      The government would immediately start to institute similar quarantine steps as seen in China. Regardless of the differences in political systems, quarantine is quarantine (and the word originates from Venice, after all). Presuming this was ineffective due to earlier symptom-free transmission then the quarantine would have to be expanded. We could expect a mirror of the Chinese villages building barriers around themselves to keep strangers out.

      In this kind of scenario it is impossible to estimate the precise impact on the global economy – because there would be little *global* economy to speak of. Suffice to say, it would be a true depression: a sharp downturn like in 2008-09 that grinds on – and a recovery based on medical breakthroughs rather than monetary-policy ones.

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      Nonetheless, interest rates would obviously be slashed, where they can, and emergency government spending on anti-virus measures would be stepped up regardless of the size of fiscal deficits. At the same time banks would be told by central banks to keep supporting all firms, especially SMEs, that are facing bankruptcy as their revenues evaporate.

      Yet would banks listen to their new orders to lend? Which staff would be doing this, if nobody is in the office? Banks haven’t done much real-economy lending under QE liquidity and no virus conditions, for example. Firms themselves would be told to keep paying their workers even if they can’t do any work – but as in China, would SMEs be able to afford to? And what about the gig economy and the huge number of self-employed?

      As such, the state would be forced to expand its role markedly in order to stop a total economic collapse – once again, as in China. This would be akin to current populist arguments for a fiscal-QE-driven ‘Green New Deal’, but in this case wrapped up in biosecurity terms. However, our health and armed forces (which would be needed to keep control) are arguably over-stretched and under-resourced already in many countries, and are not something that can be turned on/off quickly like a switch.

      The Unthinkable

      This scenario is very short. The virus spreads globally and also mutates, with its transmissibility increasing and its lethality  increasing too. The numbers infected would skyrocket, as would casualties. We could be looking at a global pandemic, and at scenarios more akin to dystopian Hollywood films than the realms of economic analysis. Let’s all pray it does not come to pass and just remains a very fat tail risk.

      However, one can see that in each of these four scenarios things are ugly, even in the first two ones. As such, the relative financial market optimism still seems to be based on the belief that central-bank liquidity supersedes virus transmissibility. That’s still quite optimistic given the uprise in uncertainty about the coronavirus.


      Tyler Durden

      Sat, 02/15/2020 – 15:55

    • Using '1984'-Style Propaganda, Communist Party Claims President Xi Acted To Suppress Virus Earlier Than Previously Believed
      Using ‘1984’-Style Propaganda, Communist Party Claims President Xi Acted To Suppress Virus Earlier Than Previously Believed

      Summary:

      • First COVID-19 death in Europe
      • More cases reported in Africa
      • COVID-19 case confirmed on cruise ship offered safe harbor in Cambodia.
      • “Leaked” speech suggests Xi involved in fighting coronavirus earlier than previously known
      • More than 200 cases reported aboard ‘Diamond Princess’
      • France confirms 12th case as virus spreads in Europe

      * * *

      Update (1540ET): Who controls the present, controls the past.

      Beijing’s whitewashing of the Politburo Standing Committee’s stumbles during the early days of the outbreak progressed on Saturday with reports about President Xi claiming in a speech that he issued “secret orders” related to fighting the outbreak on Jan. 7, two weeks before the Party came forward and informed the international community and the rest of the Chinese people.

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      This narrative was picked up by western media outlets, including the New York Times.

      According to the report, Xi didn’t say anything specific about the orders. There’s only the implication that Hubei’s leaders, who were fired on Thursday and scapegoated with responsibility for the outbreak, should have known the leadership was paying attention to the outbreak, and they should have taken more aggressive steps.

      Per the NYT, Xi “leaked” the speech, which was made to senior party officials, to craft a narrative that President Xi commanded the “People’s War” against one of the most ferociously infectious viruses to emerge in modern times.

      Ironically, the NYT says the initial reports of the speech were published by “Seeking Truth”, a Communist Party “doctrinal journal”.

      * * *

      Remember the cruise ship that was refused entry by four countries, despite having zero confirmed cases of COVID-19? In hindsight, those countries might have had a point.

      Because Reuters reports that the first case of coronavirus has been detected among the ship’s passengers, who docked in Cambodia on Friday.

      Remember when the whole region applauded Cambodia for its heroism in accepting the ship, which was close to running out of food and other essential supplies?

      What’s more: the patient is an 83-year-old American woman. Health authorities in Malaysia confirmed the infection after the woman tested positive on Saturday.

      Wait, but didn’t the ship dock in Cambodia? Why is this woman being tested in Malaysia.

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      Well, first – yes, it did.

      Second, it appears that the Cambodian authorities allowed 144 passengers to fly to Malaysia after disembarking on Friday, apparently without even screening them thoroughly.

      According to Reuters, the passengers were tested regularly on board and Cambodia also tested 20 passengers after the ship docked. But it’s not clear what kind of tests they were using – swab tests have proved notoriously unreliable.

      And clearly, whatever they did, it wasn’t thorough enough, because this woman got through.

      At some point, the woman’s symptoms were noted, she was tested, and is now being quarantined.

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      But if there’s one thing we’ve learned about COVID-19, it’s that there’s never just one case in a group. And Malaysia has already reported dozens of cases.

      Also, as we’ve seen with the ‘Diamond Princess’ cases, cruises are extremely susceptible to widespread outbreaks, which means there could be dozens of others infected.

      The Westerdam was carrying 1,455 passengers and 802 crew, and it spent two weeks at sea.

      After reading a story in today’s South China Morning Post, we realized that President Xi’s immediate economic priority is making sure he can present a believable vision of China having ‘contained’ the outbreak so that the Chinese people and the global community will accept his government’s growth-rate targets laid out in the Party’s ‘Annual Work Report’, which is expected to be released at the next National People’s Congress in early March.

      Here’s SCMP’s latest global tally for cases and deaths; it’s missing cases in Singapore that were reported earlier Saturday morning.

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      Delaying the release could be construed as a sign of weakness, so we suspect Xi will make sure to pad it with some of China’s famously goalseeked stats. Still, like any other form of propaganda, goalseeking is a strategy, and it only works if at least some of the target audience finds it believable.

      Elsewhere, there was an interesting COVID-19 develop in North Korea overnight: Yonhap has reportedly confirmed that a North Korean coronavirus patient escaped quarantine and traveled to a public area before being apprehend and…immediately executed. Over in Europe, France on Saturday confirmed a 12th case of the virus, and the sixth confirmed case in Contamines-Montjoie.

      Circling back to “Diamond Princess”, another 67 people have tested positive on Saturday, as we mentioned earlier, bringing the total above 200.

      Some 400 American passengers have been stuck on the ship, and the US government is hoping to evacuate them on Sunday.

      The State Department has said it wants to help North Korea deal with the outbreak, though Kim Jong Un and his government continue to insist that there is no outbreak (though of course Kim would probably rather watch 1 million North Koreans suffocate to death from pneumonia before allowing the US to play white knight).

      We’ve already noted some other interesting developments that were reported early Saturday, including the first coronavirus death in Europe, while cases aboard the ‘Diamond Princess’ spike 30%.


      Tyler Durden

      Sat, 02/15/2020 – 15:53

    • Five Signs That Ethereum's Moment Has Come
      Five Signs That Ethereum’s Moment Has Come

      Authored by Andrew Fenton via CoinTelegraph.com,

      Ether has more than doubled in value so far this year, with strong fundamentals and increasing numbers of projects being built on the network.

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      image courtesy of CoinTelegraph

      Here are five signs from this week that Ethereum’s time may have finally come.

      1. Institutional investors are now paying a 220% premium

      Accredited investors are currently paying a 220% premium to buy Ether through Grayscale’s Ethereum Trust.

      The price of a single share in the Ethereum Trust is currently trading for $81.50 even though one share represents Ether worth just $25.46. Yesterday the premium was even higher, at 312%.

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      The Grayscale Ethereum Trust has $154.5 million in assets under management and is aimed at institutional investors who are willing to pay a premium to avoid investing directly in cryptocurrency with its attendant custody and regulatory issues.

      Some retail investors are also paying over the odds. Coinbase, a major fiat gateway used by  retail investors, has seen Ether trading at a $1 to $1.50 premium over non-fiat exchanges recently, which may indicate additional fiat coming into the market. 

      2. Study finds Ether is a hedge and safe haven asset

      The first study to examine Ether’s potential as a “hedge, diversifier or a safe haven asset” on an intraday basis has been released by San Jose State University. It examined the data between December 2017 and December 2018 and concludes that:

      “Ethereum crypto-currency is a hedge against the U.S. stock and gold markets. Also, Ethereum tends to behave as a safe haven for gold markets. When currency markets are concerned, we document that Ethereum is a diversifier for the US Dollar.”

      More research over longer time periods is needed to confirm the findings in other scenarios, but the news will be noticed by investors looking to diversify from stocks, gold or Bitcoin (BTC).

      3. JPMorgan looks to merge blockchain division with Consensys

      JPMorgan, the largest bank in the United States, is in talks to merge its Quorum blockchain division with development studio ConsenSys — founded by Ethereum co-founder, Joe Lubin.

      The bank built its private Quorum blockchain using the Ethereum network. It is used for the Interbank Information Network of 365 banks, and was mooted as the backbone for the JPMorgan digital currency.   

      If successful, the deal is likely to be announced within six months, with speculation it could see the bank investing further in the Ethereum ecosystem.

      4. Ether price is at a seven month high

      The Ether price has risen for seven weeks in a row to peak around $274 yesterday — the highest price since July last year.

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      The longest weekly winning streak for Ether was from January to March 2017. If the Ether price closes green this week and next, it’ll cap a record breaking run (even though it has risen far more sharply in the past).

      The price rise has been accompanied by increased network usage. According to Glassnode data, the total daily gas usage has just hit the highest point since September last year. 

      The number of active Ethereum addresses has grown by 21.5% over the past week, and transactions have increased by 13.2%.

      5. DeFi tops $1 billion

      The amount of funds staked in Decentralized Finance applications has just topped $1 billion for the first time (and is currently at $1.15 billion). Ether accounts for about 70% of the total, and Bitcoin’s Lightning Network is the only project in the top 20 not built on the Ethereum blockchain

      Kain Warwick, founder of the third largest DeFi project, Synthetix told Cointelegraph that DeFi’s success has helped people understand Ethereum’s potential and the large number projects being built on the blockchain, which helped combat “mispricing in the market.”

      “The idea that Ethereum is replicating these traditional financial applications on a decentralized platform has finally crossed the chasm and got to the point where people understand it,” he said.

      “Once you start looking it becomes obvious just how much stuff is happening on Ethereum. When you compare it to something like Bitcoin it’s just orders of magnitude larger.”

      Warwick quickly added that he’s also bullish on Bitcoin and thinks it’s a very valuable asset.

      “But in terms of what is the thing facilitating all this activity that’s getting people excited about crypto again? It’s Ethereum. That’s where everything is happening. All of the cool projects and interesting applications are emerging out of Ethereum and it’s hard to see how that doesn’t drive awareness and this reassessment of the value proposition.”

       


      Tyler Durden

      Sat, 02/15/2020 – 15:35

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