The botched Iowa caucuses have raised many legitimate questions about the Democratic establishment, but to understand the point we’re at now, it’s necessary to think back several years. According to Grayzone journalist and editor Max Blumenthal, Truthdig Editor in Chief Robert Scheer’s guest on the latest installment of “Scheer Intelligence,” part of the backlash Bernie Sanders is currently experiencing as he attempts to transform the Democratic Party dates back to Bill Clinton’s presidency.
“[Bill and Hillary Clinton] set up a machine that was really a juggernaut with all this corporate money they brought in through the Democratic Leadership Committee,” says Blumenthal.
“It was a very different structure than we’d seen with previous Democratic candidates who relied heavily on unions and the civil rights coalition.
“And that machine never went away,” the journalist goes on.
“It kept growing, kind of like this amoeba that began to engulf the party and politics itself. So that when Bill Clinton was out of power, the machine was passed to Hillary Clinton, and the machine followed her into the Senate. And the machine grew into the Clinton Global Initiative.”
Speaking of his personal experience with the Clintons, Blumenthal tells Scheer he once met Chelsea Clinton and thought of her as an “admirable figure at that time” who had undergone humiliation and bullying on a national scale as she went through an “awkward phase” as a child. His memory of the child he once met made what followed all the more devastating to watch, Blumenthal laments.
“I’ve watched her grow into adulthood and become a complete kind of replication of the monstrous political apparatus that her family has set up, without really charting her own path,” he says.
“She just basically inherited the reign of the Clinton Foundation and Clinton Global Initiative. She does paid talks for Israel. Her husband, Marc Mezvinsky, he gambled on Greece’s debt along with Lloyd Blankfein, the CEO of Goldman Sachs.
“I mean, as a young person,” Blumenthal adds, “seeing someone of my generation grow up and follow that path, do nothing to carve out her own space — it just absolutely disgusts me.”
The conversation between Blumenthal and Scheer centers largely on two subjects that overlap with the current presidential election and primaries: the rightward shift of the Democratic Party and Israeli politics. Partly the two subjects converge in talking about Sanders, the man who could very well become the first Jewish president of the United States. Scheer asks Blumenthal to draw on his experiences growing up close to the Clintons, due to the ties of his parents, Sidney and Jacqueline Blumenthal, to the administration, and is linked to Blumenthal’s most recent book, “The Management of Savagery: How America’s National Security State Fueled the Rise of Al Qaeda, Isis, and Donald Trump.”
“It seems to me [there is] a real contradiction [in] the Democratic Party, which you know quite a bit about,” when it comes to Israel, says Scheer.
“There’s this great loathsome feeling about Donald Trump. And many of these people don’t really like [Israeli Prime Minister Benjamin] Netanyahu. You know, the polling data shows that Jews are, you know, just about as open to the concern for the Palestinians as any other group. And Bernie Sanders, the one Jewish candidate, is the one who dared to bring up the Palestinians — that they have rights also, that they’re human beings. He’s being attacked for it as, like you, a self-hating Jew.”
Blumenthal, whose 2013 book, “Goliath: Life and Loathing in Greater Israel,” touches upon many questions absent in the American conversation about Israel, points out how the Vermont senator’s own position on Palestine has shifted over time.
“Bernie Sanders [is] better than most of the other [Democratic] candidates on this issue,” says the Grayzone reporter. “After we put a lot of pressure on him in the left-wing grassroots — I mean, I personally protested him at a 2016 event for his position on Palestinians, and we shamed him until he took at least a slightly better position, where you acknowledge the humanity of Palestinians.”
The two journalists discuss what some of the main reasons are that Sanders is facing so much resistance within the Democratic Party, in addition to his views on Palestine. Blumenthal believes there will be a repeat of what happened in 1972 when George McGovern ran for president.
“I think that if Bernie Sanders gets the nomination, there will be an effort to ‘McGovern’ him,” he posits. The Democratic Party will “hope that Bernie Sanders gets destroyed by Donald Trump, and then wag their fingers at the left for the next 20 years until they get another Bill Clinton.
“I think that they don’t know how to stop him at this point, but they’re willing to let him be the nominee and go down to Donald Trump, because Bernie Sanders threatens their interests, and the movement behind him particularly, more than Donald Trump does.”
Listen to the full discussion between Blumenthal and Scheer, which took place aptly on the eve of the Iowa caucuses that, at the time, Blumenthal assumed would be a landslide win for Sanders. You can also read a transcript of the interview below the media player and find past episodes of “Scheer Intelligence” here.
ROBERT SCHEER: Hi, this is Robert Scheer with another edition of “Scheer Intelligence,” where the intelligence comes from my guests. In this case Max Blumenthal, who I must say is one of the gutsiest journalists we have in the United States, and have had for the last five years or so. He’s, in addition to having considerable courage and [going] out on these third-rail issues — like Israel, being one of the more prominent ones — and challenging some of the major conceits of even liberal politics in the United States about our virtue, our constant virtue, he’s done just great journalism. I really loved his book, “Goliath: Life and Loathing in Greater Israel,” which came out in 2013, because it was based on just good, solid journalism of interviewing people and trying to figure out what’s going on.
I’d done something a half century earlier, or not quite that long ago, during the Six-Day War in Israel, where I went over when I was the editor of Ramparts. And I know how difficult it is to deal with that issue, because I put Ramparts into bankruptcy over the controversy about it. [Laughter] So maybe that’s a good place to begin. You know, you dared touch this issue of Israel, and it didn’t help that you are Jewish. I guess you are Jewish, right? Do you have a background, did you practice any aspect of Judaism? Literature, culture, religion?
MAX BLUMENTHAL: I’m a Jew who had a bar mitzvah, and I even had a bris.
RS: Oh. [Laughs]
MB: And you know, I’ve continued to pop in in synagogues here and there on High Holy Days. I guess you could say, you know, when the rabbi asked, you know, asked me to join the army of God, I tell him I’m in the Secret Service. But I’m definitely Jewish, you know, and it’s a big part of who I am and why I do what I do.
RS: Well, and I thought your writing on that, and your journalism, was informed by that. Because after all, a very important part of the whole experience of Jewish people as victims, as people forced into refugee status, living in the diaspora, was to develop a sense of universal values, and of decency and obligation to the other. And I think your reporting reflected that. However, my goodness, you got a lot of heat over it. And it’s the heat I want to talk about. I want to talk about the difficulty, in this post-Cold War world, of actually writing about the U.S. imperial presence, or writing critically about what our government does, and some of its allies.
And I think Israel is a really good case in point, because we have one narrative that said in the last election we had foreign interference, mostly coming from Russia. And we talk about Russia as if it’s the old communist Soviet Union, with a top-down, big, organized party — forgetting that [Vladimir] Putin actually defeated the Communist Party, and even though he had been in the KGB, and most Russians had been in some kind of official connection with society or another. Nonetheless, Russia really has gotten very little out of whatever interference it did. Israel, that is very rarely talked about, interfered in the election in a very open, blatant way in the presence of Netanyahu, who denounced Barack Obama’s major foreign policy achievement, the deal with Iran, and has focused U.S. policy mostly against the enemy being Iran, and ignoring Saudi Arabia and everything else.
And the interesting thing is that Israel’s interference in the election, and Netanyahu, has been rewarded over and over — the embassy got shifted, the settlers got more validation, now there’s a big peace plan that gives the hawks in Israel everything they want. So why don’t we begin with that, and your own writing about U.S.-Israel relations. It’s kind of odd that there’s — or maybe not odd, maybe it’s just because it is the third rail — that there’s been so little discussion about Donald Trump’s relation to Israel and his payoff to Netanyahu.
MB: Yeah, I mean, there’s a lot to chew on there. I would first start with just an observation, because you mentioned that we’re in a post-Cold War world — well, we’re not in a post-Cold War world anymore, we’re in a new Cold War. And for all the attacks I got over Israel, which were absolutely vicious, personalized, you know, framed through emotional blackmail, attacking my identity as a Jew, calling me a Jewish anti-Semite — the Simon Wiesenthal Center, which is this right-wing racket over there in L.A., made me the No. 4 anti-Semite of 2015. You know, I was right behind Ayatollah Khomeini. But you know, the worst attacks, the most vicious attacks I’ve received have actually been from centrists and liberal elements over my criticism of the Russiagate narrative that they foisted on the American public starting in 2016, and also on the dirty war that the U.S. has been waging on Syria, and how we at the site that I edit, the Grayzone, started unpacking a lot of the deceptions and lies that were used to try to stimulate support among middle-class liberals in the west for this proxy war on Syria, for regime change in Syria. This was absolutely forbidden, and that attack actually turned out to be more vicious and is ongoing.
With Israel, you have a situation where you have, not maybe a plurality, but maybe a majority of secular Jewish Americans, progressive Jews, who have completely turned their back on the whole Zionist project. And it has a lot to do with Netanyahu. Netanyahu is someone who came out of the American — out of American life. He went to high school in suburban Philadelphia, he went to MIT, he was at Boston Consulting with Mitt Romney. His father ended his life in upstate New York as Jabotinsky’s press secretary, the press secretary for the revisionist wing of the Zionist movement that inspired the Likud party. So Netanyahu is really kind of an American figure, number one; number two, he’s a Republican figure. He’s like a card-carrying neoconservative Republican.
So a lot of Jews who’ve historically aligned themselves with the Democratic Party, who see being a Democrat as almost synonymous with being Jewish in American life, just absolutely revile Netanyahu. And here he is, basically the longest-serving prime minister in Israel; he’s completely redefined the face of Israel and what it is. And he’s provoked — I wouldn’t say provoked, but he’s accelerated the civil war in American Jewish life over Zionism. And what I did was come in at a time when it wasn’t entirely popular, to not just challenge Israel as a kind of occupying entity, but to actually challenge it at its core, to challenge the entire philosophy of Zionism, and to analyze the Israeli occupation as the byproduct of a system of apartheid which has been in place from the beginning, since 1948, which was a product of a settler colonial movement.
That really upset a lot of people who kind of reflect the same elements that I’m getting, who are attacking me on Syria or Russia. People like Eric Alterman at The Nation. He wrote 11 very personal attack pieces on me when my book “Goliath” came out in 2013. Truthdig, you, Chris Hedges, it was a great source of support. And you, you know, you opened up the debate at Truthdig, you allowed people to come in and criticize the book, but kind of in a principled, constructive way. Whereas Eric Alterman was demanding that The Nation censor me, blacklist me, ban me for life, and was comparing me to a neo-Nazi by the end, and claiming I was secretly in league with David Duke. And that was because he had simply no response to my reporting and my analysis of the kind of, the inner contradictions of Zionism.
And so to me, it was really a sign of the success of the book, that someone like Alterman was sort of dispatched, or took it upon himself to wage this really self-destructive attack. And in the end, he really had nothing to show for himself; he wasn’t arguing on the merits. And that’s just what I find time and again with my reporting is, you know, you get these personal attacks and people try to dissuade you from going and touching these third-rail issues, but ultimately there’s no substance to the attacks. I mean, if they really wanted to nail me and take me down, they would address the facts, and they really haven’t been able to do that.
RS: Right. But Max, if I can, let’s focus on the power of your analysis in that book, which is that it is a settler colonialism. And Netanyahu actually is — we can talk about the old labor Zionists, you know, and what was meant by progressive Zionism and so forth. Even at the time of the Six-Day War when I interviewed people like Moshe Dayan and Ya’alon and these people, they all were against a full occupation of the West Bank. They didn’t act on that, unfortunately. But they were aware of the dangers of a colonial model. But right now you have a figure in Israel in Netanyahu, who is, very clearly embodies a racialized view, a jingoistic view of the other, which is really, you know, very troubling. And he’s embraced by this troubling American figure.
And so what your book really predicted is that the settler colonialism was a rot at the center of the Israeli enterprise — and historically, one could justify that enterprise. I don’t know if you would agree. But even the old Soviet Union, I think, was the second, if not the first country to recognize Israel. There was vast worldwide support for some sort of refuge for the Jewish people after such horrible, you know, genocidal policies visited upon them. But what we’re really talking about now is something very different. And that is whether political leadership, and interference and so forth comes mainly for Democrats, very often; obviously, for republicans and Bible-belters and all that, who seem to like this image of the end of time coming in Israel. But really what’s happening — and it’s not discussed in this election, except to attack Bernie Sanders, who dared make some criticisms of Israel in some of these debates — you have a very weird notion of the Jewish experience, as identified with a very hardline, as you say, sort of South African settler colonialist mentality.
And so I want to ask you the question as someone–and we’ll get to it later — you grew up sort of within the Democratic liberal establishment in Washington. Your parents both worked for the Clinton administration, were close to it. How do you explain this blind eye toward Trump’s relationship to Netanyahu? And ironically, for all the Russia-bashing, Netanyahu and Putin seem to get along splendidly, you know. And that doesn’t bother people as far as criticizing Netanyahu. So why don’t we visit that a little bit, and forget about Eric Alterman for a while.
MB: [Laughs] Well, he’s already forgotten, so we don’t have much work to do there. But there’s a lot, again, a lot to chew on, a lot of questions packed into that. You know, just starting with your mention of Moshe Dayan — who is a seminal figure in the Nakba, the initial ethnic cleansing of the Palestinian population in 1948 to establish Israel — he was the southern commander of the Israeli military. And he later kind of became a kind of schizophrenic figure in Israeli politics; he would sometimes offer some kind of left-wing opinions, and then be extremely militaristic. But you know, when it came down to it, Moshe Dayan — like every other member of the Israeli Labor Party — was absolutely opposed to a viable Palestinian state. He even said that we cannot have a Palestinian state because it will connect psychologically, in the minds of the Palestinian public who are citizens of Israel — that 20% of Israel who are indigenous Palestinians — it will connect them to Nablus in the West Bank, and it will provide them with a basis for rebelling against the Israeli state to expand the Palestinian state.
The other labor leaders spoke in terms of the kind of, with the racist language of the demographic time bomb that, you know, we need to give Palestinians a state, otherwise we will be overwhelmed demographically. And so the state that they were proposed was what Yitzhak Rabin, in his final address before the Israeli Knesset, the Israeli parliament, called “less than a state.” He promised Israel that at Oslo, he would deliver the Palestinians less than a state. And if you look at the actual plan that the Palestinians were handed at Oslo — which Yasser Arafat, the Palestinian Authority chairman, didn’t even review before signing — the map was not that different from the map that Donald Trump has offered with the “ultimate deal.” And they’d say, oh, you get 97% of what was, you know, offered in U.N. Resolution 242 in 1967. But it really just isn’t the case when you get down to the details. What the strategy has been with the Labor Party, and with successive Israeli administrations — and with Netanyahu until he got Trump in — was to kind of kick the can down the road with the so-called peace process, so that Israel could keep putting more facts on the ground.
So it was actually Ehud Barak of the Labor Party, Yitzhak Rabin’s successor, who moved more settlers into the West Bank, by a landslide, than Netanyahu did. Ehud Barak actually campaigned on his connection to the settlers. And then Netanyahu capitalizes on the strength of the settlement movement to build this kind of Titanic rock of a right-wing coalition that’s kept him in power for so long. And if you look at who the leading figures are in Israeli life — Naftali Bennett, who was from the Jewish Home Party, he comes out of the Likud party and he’s someone who was an assistant to Netanyahu. Avigdor Lieberman, who was for a long time the leader of the Russian Party. Yisrael Beiteinu, this is someone who came out of the Likud Party, who helped Netanyahu rustle up Russian votes. It’s a Likud one-party state — but then you have, culturally, a dynamic where starting with 1967, the public just becomes more infused with religious Messianism.
The West Bank is the site of the real, emotionally potent Jewish historical sites, particularly in a city like Hebron. And the public becomes attached to it and attains its dynamism through this expansionist project, and the public changes. A lot of people from the kind of liberal labor wing became religious Messianists, started wearing kippot, wearing yarmulkes, the kind of cloth yarmulkes that the modern orthodox settlers where.
RS: OK, but —
MB: Today you not only have that, you have a new movement called the temple movement, which aims to actually replace Jewish prayer at the Western Wall with animal sacrifice, as Jews supposedly practiced thousands of years ago, and to destroy the Al-Aqsa mosque, and practice Jewish prayer there. This is not just a messianic movement, but an apocalyptic movement that is actually gaining strength in the Likud party. So when you mentioned Donald Trump’s “ultimate deal,” there’s one detail that everyone seems to have missed there, which is prayer for all at the Dome of the Rock, at Al-Aqsa. That means there will be Jewish prayer there, officially, that Palestinians must be forced to accept that and destroy the status quo, which has prevailed since 1967.
RS: I know, but Max, before I lose this whole interview here — because I think that’s all really interesting; people should read your book, “Goliath: Life and Loathing in Greater Israel.” That’s not the focus of this discussion I want to have with you.
MB: OK.
RS: And I want to discuss, in this aspect, the whole idea of Israel as a third-rail issue for American politics.
MB: Yeah.
RS: American politics. And the reason I want to do that is there’s obviously a contradiction in the Jewish experience, because Jews — as much or more so than any other group of people in the world — understand what settler colonialism does. They understand what oppression does, they’ve been under the thumb of oppressors. And so I would argue the major part of the Jewish experience was one of revolt against oppression, and recognition of the danger of unbridled power. And that represents a very important force in liberal politics in the United States: a fear of coercive power, a desire for tolerance, and so forth. And we know that Jews have, in the United States and elsewhere in the world, been a source of concern for the other, and tolerance, and criticism of power.
And the reason I’m bringing that up is it seems to me it’s a real contradiction for the Democratic Party, which you know quite a bit about. And in this Democratic Party, there’s this great loathsome feeling about Donald Trump. And many of these people don’t really like Netanyahu. You know, the polling data shows that Jews are, you know, just about as open to the concern for the Palestinians as any other group. And Bernie Sanders, the one Jewish candidate, is the one who dared to bring up the Palestinians — that they have rights also, that they’re human beings. He’s being attacked for it as, like you, a self-hating Jew. And so I want to get at that contradiction. And, you know, full confession, as a Jewish person I believe it’s an honorable tradition of dissent, and concern for the others, and respect for individual freedom. And I think it’s sullied by the identification of the Jewish experience with a colonialist experience. It is a reality that we have to deal with, but that’s not the whole tradition. And I daresay your own family, whatever your contradiction — and I should mention here your father and mother both were quite active in the Clinton administration, right.
And your father, a well-known journalist, Sidney Blumenthal, and your mother, Jacqueline Blumenthal, was I think a White House fellow or something in the Clinton administration? I forget what her job was, but has been active. And they certainly come out of a more liberal Jewish experience, as do most well-known Jewish writers and journalists in the United States. That’s the contradiction that I don’t see being dealt with here. Because after all, it’s easy to blast Putin and his interference, but as I say, Netanyahu interfered very openly, but in a really unseemly way, in the American election by attacking a sitting American president in an appearance before the Congress, and attacking his major foreign-policy initiative. And there’s hardly a word ever said about it. It doesn’t come up in the democratic debates. You know, and the — as I say, there was this incredible moment where Netanyahu, after coming over here and praising Trump for his peace deal, as did his opponent, then he goes off and meets with Putin. And so suddenly it’s OK, and yet the Democrats who want to blast Putin don’t mention Netanyahu, and they don’t mention his relation to Trump.
MB: Well, yeah, I was trying to illustrate kind of the reality of Israel, which just, it’s gotten so extreme that it repels people who even come out of the kind of Democratic Party mainstream. And the Democratic Party was the original bastion in the U.S. for supporting Israel. So my father actually held a book party for my book, “Goliath,” back in 2013. It’s the kind of thing that, you know, a parent who had been a journalist would do for a son or daughter who’s a journalist. And he was harshly attacked when word got out that he had held that party in a neoconservative publication called the Free Beacon, which is kind of part of Netanyahu’s PR operation in D.C. You know, it was like my father had supported, provided material support for terrorism by having a book party for his son.
But the interesting part about that party was who showed up. I didn’t actually know what it was going to be like, and it was absolutely packed. I mean, they live in a pretty small townhouse in D.C, and there just was nowhere to walk, there was nowhere to move. And I found myself in the corner of their dining room shouting through the house to kind of explain what my book was about and answer questions. And a lot of the people there were people who were in or around Hillary’s State Department, people who worked for kind of Democratic Party-linked organizations — just a lot of mainstream Democrat people. And they were giving me a wink and a nod, shaking my hand, giving me a pat on the back, and saying thank you, thank God you did this. Because they cannot stand the Israel lobby, they despise Netanyahu, and they’re disgusted with what Israel’s become.
And we had reached a point by 2013 where it was pretty obvious there was not going to be a two-state solution, and that whole project, the liberal Zionist project, wasn’t going to work out. You know, and the fact that they just could give me a wink and a nod shows also how cowardly a lot of people are in Washington. They weren’t even stepping up to the level my father had, where when his emails with Hillary Clinton were exposed, it became clear that he was sending her my work. And he was actually trying to move people within the State Department toward a more, maybe you could say a more humanistic view, but also a more realistic view of Israel, Palestine and the Netanyahu operation in Washington. Working through [Sheldon] Adelson, using this fraud hack of a rabbi, Shmuley Boteach, has kind of their front man. They ran like a full-page ad in the New York Times painting me and my father as Hillary Clinton’s secret Middle East advisers.
And then one day in the middle of the campaign, Elie Wiesel died. You know, someone who is supposed to be this patron saint of Judaism and the kind of secular theology of Auschwitz, who had spent the last years of his life as part of Sheldon Adelson’s political network. Basically, he had lost all his money to Bernie Madoff, and so he was getting paid off by Adelson. He got half a million dollars from this Christian Zionist, apocalyptic, rapture-ready fanatic, Pastor John Hagee. He was going around with Ted Cruz giving talks. And so when he died, I went on Twitter and tweeted a few photos of Elie Wiesel with these extremist characters.
And I said, you know, here are photos of Elie Wiesel palling around with fascists. And the kind of Netanyahu-Adelson network activated to attack me. And ultimately it led — I actually, within a matter of a few days, it led to Hillary Clinton’s campaign officially denouncing me and demanding that I cease and desist. And so, you know, I looked at the debate on Twitter, and a lot of people were actually supporting me. And it was clear Elie Wiesel, this person who was supposed to be a saint, was actually no longer seen as stainless, that the whole debate had been opened up by 2016.
And now when we look at the Democratic Party and we look at the Democratic field, you know, Bernie Sanders — he’s better than most of the other candidates, or the other candidates, on this issue. After we put a lot of pressure on him in the left wing-grassroots — I mean, I personally protested him at a 2016 event for his position on Palestinians, and we shamed him until he took at least a slightly better position, where you acknowledge the humanity of Palestinians. But what we’re hearing, even from Bernie Sanders, doesn’t even reflect where the grassroots of the Democratic Party — particularly all those young people who are coming out and delivering him a landslide victory tonight in Iowa — are. The Democratic Party is not democratic on Israel, but it’s no longer a third-rail issue. You can talk about it, and the only way that you can be stopped is through legislation, like the legislation we see in statehouses to actually outlaw people who support the Palestinian boycott of Israel. So we’re just in an amazing time where all of the contradictions are completely out in the open.
RS: OK, let me just take a quick break so public radio stations like KCRW that make this available can stick in some advertisements for themselves, which is a good cause. And we’ll be right back with Max Blumenthal. Back with Max Blumenthal, who has written — I mean, I only mentioned one of his books. He wrote a very important book on the right wing in America that was a bestseller; he has been honored in many ways, and yet is a source of great controversy. And I must say, I respect your ability to create this controversy, because it’s controversy about issues people don’t want to deal with. You know, they want to deal with them in sort of feel-good slogans, and it doesn’t work, because people get hurt. And including Jewish people, in the case of Israel. If you develop a settler, colonialist society, and that stands for the Jewish position, and you’re oppressing large numbers of people, be they Palestinian or others, that’s hardly an advertisement for what has been really great about the Jewish experience, which I will argue until my death.
It was represented by people like my mother, who were in the Jewish socialist bund, and two of her sisters were killed by the Czar’s police in Russia. And they believed in Universalist values, an idea of being Jewish as standing for the values of the oppressed, and concern for the oppressed. And most of their experience in the shtetls, and out there in the diaspora, had been being oppressed.
And so I don’t want to lose that there. But I wanted to get now to the last part of this, to what I think is the hypocrisy of the liberal wing of American politics, or so-called. And now they call themselves more progressive. And it really kind of centers around Hillary Clinton. And whatever you want to say about Bernie Sanders — you know, Hillary Clinton’s recent attack on Bernie Sanders, that no one likes him and he stands for nothing and he gets nothing done. And I think this is a, you know, a person that I thought, you know, at one point — despite her starting out as a Goldwater girl and being quite conservative — I thought was, you know, somewhat decent.
And I’m going to make this personal now. I was brought to a more favorable view of Bill and Hillary Clinton, in considerable measure, by your father, as a journalist at the Washington Post, and then working in the administration. And I respect your father and mother, you know, and Sidney Blumenthal and Jacqueline Blumenthal, I think are intelligent people. And I once, you know, went through a White House dinner; I think I only got in because your father put me on the list, and Hillary Clinton said I was her favorite columnist in America — no, the whole world — and it was very flattering. But I look back on it now — Hillary Clinton has really represented a kind of loathsome, interventionist, aggressive, America-first politics that in some ways is even more offensive than Trump. When Trump said he’s going to make America great again, Hillary Clinton said, America’s always been great. What?
MB: Yeah.
RS: What? Slavery, segregation, killing the Native Americans — always been great? You grew up with these people, right? You were in that world. What — so yes, they can come up to you at a book party and say, yes, it’s about time somebody said that. But what are they really about? That they — you know, you mentioned Syria. You know, their great achievement, they created a mess of that society. And she’s the one who went to, said about Libya, oh, we came, we saw, and he’s dead. You know, sodomized to death. So take me into the heart of the so-called liberal experience.
MB: Well, first of all, since you invoke Sidney Blumenthal so frequently, he has a — I think his fourth book in a five-part series on Abraham Lincoln out. And you know, these books address Lincoln almost as if he were a contemporary politician. It’s a completely new contribution to the history of Lincoln, and if you invite him on, be sure —
RS: I’m familiar with it, and I’ll endorse it —
MB: If you invite him on, you can ask him, I would love to hear that debate —
RS: I certainly would, and I have — as I said, I have a lot of respect for your father and mother. I’m asking a different question. Why do good people look the other way? Or how does it work? Just, you know, to the degree you can, take me inside that Washington culture. And where there’s a certain arrogance in it, that they are always, even when they do the wrong things, they’re just always accidents. They’re always mistakes. You know, it never comes out of their ideology, their aggression. So I want to know more about that.
MB: I mean, I saw all these — so many different sides of Washington. And so — and I was always supported by my parents, no matter what view I took. So I don’t feel like I have to live in my father’s shadow or something like that. They remain really supportive of me. I have a new book out — it’s not really new, it came out last April. It’s called “The Management of Savagery,” and it deals substantially with my view of the bipartisan foreign policy establishment, but particularly the Hillary State Department, the Obama foreign policy team, and the destruction they wrought in Libya and Syria. So, you know, I put everything I knew about Washington and foreign policy into that book. And so I really would recommend that as well.
But, you know, how does it work with the Clintons? They were — they set up a machine that was really a juggernaut with all this corporate money they brought in through the DLC, the Democratic Leadership Committee. It was a very different structure than we’d seen with previous Democratic candidates who built — who relied heavily on unions and, you know, the civil rights coalition. And that machine never went away. It kept growing like this — kind of like this amoeba that began to engulf the party and politics itself. So that when Bill Clinton was out of power, the machine was passed to Hillary Clinton, and the machine followed her into the Senate. And the machine grew into the Clinton Global Initiative, which was this giant influence-peddling scam that just cashed in on disasters in Haiti, brought in tons of money, tens of millions of dollars from Gulf monarchies, and big oil and the arms industry — everything that funds all the repulsive think tanks on K Street through the Clinton Foundation.
And everyone who was trying to get close to the Clinton Foundation, whether they were in Clinton’s inner circle or not, was just trying to gather influence. That’s why you saw at Chelsea Clinton’s wedding, behind her, Ghislaine Maxwell, who was basically Jeffrey Epstein’s personal child sex trafficker, just trying to cultivate influence with people who have this gigantic political machine.
So that’s why so many people, I think, have stayed loyal to this odious project, and have looked the other way as entire countries were destroyed under the direct watch of Hillary Clinton. Libya today — where Hillary Clinton took personal credit for destroying this country, which was at the time before its destruction, I think the wealthiest African nation with the highest quality of life — is now in, still in civil war. We’ve seen footage of open-air slave auctions taking place, and large parts of the country for years were occupied by affiliates of Al Qaeda or ISIS, including Muammar Gaddafi’s hometown of Sirte. It was immediately transformed into a haven for the Islamic State.
This is the legacy of Hillary Clinton. There would have been no Benghazi scandal if she hadn’t gone into Libya to come, see, and kill, as she bragged that she did. And in Syria, she attempted the same thing; fortunately failed, thanks to assistance from Iran and Russia. But this was, it consisted of a billion dollars, multibillion-dollar operation to arm and equip some of the most dangerous, psychotic fanatics on the face of the planet in Al Qaeda and 31 flavors of Salafi jihadi. Hillary Clinton said we can’t be negotiating with the Syrian government; the hard men with guns will solve this problem. She said that in an interview, and that’s her legacy.
Beyond that, you know, I in Washington grew up in a very complex situation. I don’t know what view people have of me, but I grew up in what was – D.C. when D.C. was known as C.C., or Chocolate City. It was a mostly black city, run by a local black power structure with a strong black middle class, and I grew up in a black neighborhood. And I kind of saw apartheid firsthand, where I saw how a small white minority actually controlled the city from behind the scenes. And then, you know, and I saw that reality, and then I went to school across town in the one white ward to a private school, and I got to know some of the children of the kind of mostly Democratic Party elite. And so I saw both sides of the city. And it was through that other side, and also my parents’ connection to the Clintons, that I — I mean, I barely interacted with the Clintons. I’ve had very minimal interaction with them ever.
But I did get to meet Chelsea Clinton once. And you know, for all my reservations about the Clintons or what they were, I thought you know, she was kind of an admirable figure at that time. She was a — she was a kid, she was an adolescent who was being mocked on “Saturday Night Live” because she was going through an awkward phase. She went to school down the street at Sidwell Friends, and I met her at a White House Christmas party; she was really friendly and personable. And you know, since then, I’ve watched her grow into adulthood and become a complete kind of replication of the monstrous political apparatus that her family has set up, without really charting her own path. She just basically inherited the reign of the Clinton Foundation and Clinton Global Initiative. She does paid talks for Israel. Her husband Marc Mezvinsky, he gambled on Greece’s debt along with Lloyd Blankfein, the CEO of Goldman Sachs. You know, the squid fish. I mean, there’s just — I mean, as a young person, seeing someone of my generation grow up and follow that path, do nothing to carve out her own space — it just absolutely disgusts me.
And now Hillary Clinton is still there! She won’t go away! She’s not only helped fuel this Russiagate hysteria that’s plunged us into a new Cold War, but she’s trying to destroy the hopes and dreams of millions of young people who are saddled with endless debt by destroying Bernie Sanders. And it’s because she sees her own legacy being smashed to pieces, not by any right-wing, vast conspiracy, but by the electorate, the new electorate of the Democratic Party. And I absolutely welcome that. I think, you know, tonight in Iowa, a landslide Bernie victory, one of the takeaways is this will be the end of Clintonism. It’s time to move on and hand things over to a new generation. They had their chance, and they not only failed, they caused disasters across the world.
RS: So this is — we’re going to wind this up, but I think we’ve hit a really important subject. And I want to take a little bit more time on it. And I thought you expressed it quite powerfully. But the error, if you’ll permit me, is to center it on the personality, or the family. And I don’t think Clintonism is going to go away. Because what it represents — and I know you —
MB: It could be become Bloombergism, you know?
RS: Well, that’s where I’m going. I think what Clintonism represents is this triangulation, this new Democrat. And I interviewed him when he was governor, just when he was campaigning. And I did a lot of writing on the Financial Services Modernization Act and on welfare reform, and all of these ingredients of this policy. And what it really represents — no wonder they’re rewarded by the super wealthy. But the Democratic Party lost its organizational base with the destruction of the labor movement and weakening of other sources of progressive class-based politics, concern about working people and ordinary people.
And what Clinton did is he came along, and he had a sort of variation of Nixon’s Southern Strategy, how he got the Republicans to be so important in the South. And it was this new politics, this redefinition. And it’s not going away, because it’s the cover for Wall Street. It’s the cover for exploitation. And the main thing that happened from when you were young — or born, actually; you’re 42 years — it’s 42 years of, since Clinton really, and you can blame Reagan, you can blame the first President Bush, you can blame other people, and certainly blame the whole bloody Republican Party. I’m not going to give them a pass.
But the fact is, what the Clinton revolution did was it made class warfare for the rich fashionable, in a way that no one else was able to do it, no other movement. And it said these thieves on Wall Street, these people who are going to rip you off 20 different ways to Sunday — they’re good people, and they support good causes. And you mentioned Lloyd Blankfein, you know; “government” Goldman Sachs, you know. Robert Rubin came from Goldman Sachs; he was Clinton’s treasury secretary. And the whole thing of unleashing Wall Street and getting, destroying the New Deal — that was a serious program to basically betray the average American and betray their interest. And that’s why we’ve had this growing income inequality since that time. That’s the Clinton legacy in this world, really, is the billionaire coup, the billionaire culture.
MB: Yep, the oligarchy was put on fast-forward by the new politics of the Clintons. What they promised wasn’t, you know, a break from Reaganism, although there was certainly a cultural difference. They promised continuity, and that’s what we saw through the Obama administration. Obama presided over the biggest decline in black home ownership in the United States since, I think, prior to World War II. You mentioned Glass-Steagall; this set the stage for the financial crisis; NAFTA, destroyed the unions, shipped American jobs first to Mexico and then to China, and destabilized northern Mexico along with the drug war that Clinton put on overdrive, creating the immigration crisis that helped fuel the rise of Donald Trump.
Welfare reform — all of these policies were just, were odious to me and so many people at the time, but there was just this desire to just beat the Republicans and out-triangulate them. Now that we’ve seen the effects on them and so many people have felt the effects, you have an entire generation that sees no future, that realizes they’re living in an oligarchy, realizes that the alternative to Bernie Sanders is a literal oligarch, this miniature Scrooge McDuck in Mike Bloomberg, and they’re just not having it.
I don’t know if Hillary Clinton understands this history; I don’t think she sees it in context. She just blames Russian boogeyman and fake news for everything. But the rest of us who’ve lived through it really do, and it’s the continuity that is so dangerous, especially on foreign policy. I mean, the Libya proxy war and the Syria proxy war, the stage was set in Yugoslavia with NATO’s war that destroyed a socialist country and unleashed hell on a large part of its population. And we still don’t debate that war. The stage for the Iraq invasion was set in 1998 with Bill Clinton passing the Iraqi Liberation Act, which sent $90 million into the pocket of the con-man Ahmed Chalabi and made regime change the official policy of the United States.
It’s tragic that Bernie Sanders voted for that. But we have to see the cause and the effect to understand why so many people are in open revolt against that legacy. And you’re right, it goes well beyond the Clintons. It’s a program that markets right-wing economics and a right-wing foreign policy in a sort of progressive bottle. Now what they’re trying to do with the label on that progressive bottle, the way they’re trying to preserve it — we see it a lot through the [Elizabeth] Warren campaign — is through a kind of neoliberal identity politics that divorces class from race and gender, and attempts to basically distract people with needless arguments about Bernie Sanders saying a woman couldn’t have gotten elected in a private conversation that only Elizabeth Warren was party to.
So I’m really encouraged, I guess, by the results that we’re seeing. We’re talking tonight on the eve of the Iowa caucus. I’m encouraged by those results, just because I see them as a repudiation of the politics that have just dominated my life as a 42-year-old, and just been so absolutely cynical and destructive at their core. But I would just remind anyone who is supporting Bernie Sanders and listening to this — he’s not just running for president. He’s running for the next target of a deep state coup, and the deep state exists, and will respond with more force and viciousness than it did to Donald Trump, who actually has much more in common with them than Bernie Sanders.
RS: I didn’t quite get the grammar of that last paragraph, not any fault of yours. You said he’s not just running — can you —
MB: He’s running for the next target of a deep state coup, the forces of Wall Street. You know, the —
RS: Oh, you mean he will be the target.
MB: He will be the target.
RS: Yeah, you know, it’s — you just said something really — OK, I know we have to wrap this up, but it’s actually just getting interesting for me. [Laughs]
MB: Sorry about that.
RS: No, no, no, come on, come on. [Laughter] What I mean is, I do these things because I learn, and I think, and you know, my selfish interests. And really the question right now, I did a wonderful interview with Chomsky on this podcast, and he took me to school for not appreciating the importance of the lesser evil. And I’ve lost sleep over it since. You know, well — and we always fall for that, you know. On the other hand, some of the things you’ve been talking about, you know — and this is going to get me in big trouble — but you know, Trump is so blatant. He’s so out there in favor of greed and corruption.
He’s so obnoxious. And actually, in terms of his policy impact — not his rhetoric, but his policy impact — is he really that much worse? Well, for instance, you mentioned NAFTA. The rewrite of NAFTA, even before, you know, some progressives got involved in it, it was a substantially better trade agreement than the first NAFTA. You know, he hasn’t gotten us into Syria-type, Iraq-type wars.
He actually — so I’m not — you know, yes, I consider him a neofascist; rhetoric can be very dangerous. He’s obviously spread very evil, poisonous ideas about immigrants and what have you, you know, I can go down the list. But the people that you’ve been talking about, that–you know, and I voted for all of them, and I’ve supported them — are they really the lesser evil? You know, or are they a more effective form of evil?
MB: I mean, to understand Trump, we just have to see him as the apotheosis of an oligarchy. In its most unsheathed, unvarnished form, he’s just lifted the mask off the corruption, the legal corruption that’s prevailed, and been completely unabashed about it. Donald Trump was targeted with this kind of Russiagate campaign, which was partly run by Clintonite dead-enders who wanted to blame Russia for her loss, and to attack Donald Trump with this kind of McCarthyite rhetoric. But it was also being influenced by the intelligence services — figures like John Brennan and James Comey, and neoconservative hardliners who could easily jump back into the Democratic Party. And they were just seeking a new Cold War, to justify the budgets of the intelligence services, and the defense budget and so on.
But at his core, Donald Trump, what he’s actually done, especially domestically, I think outside of the immigration stuff, is he’s been kind of a traditional Republican. And he won a lot of consent from Republicans in Congress when he passed a trillion-dollar tax cut. He’s given corporate America everything he wanted after kind of campaigning with this populist, Bannonite tone. So in a lot of ways, Donald Trump does share more in common with the Democratic Party elite — with a lot of the figures who’ve been nominated to serve on the DNC platform committee, who are just from the Beltway blob and the Beltway bandits — than they do with Bernie Sanders.
And I think that if Bernie Sanders gets the nomination, there will be an effort to McGovern him. To just kind of turn him — turn this whole process into McGovern ’72, hope that Bernie Sanders gets destroyed by Donald Trump, and then wag their fingers at the left for the next 20 years until they get another Bill Clinton. I think that they don’t know how to stop him at this point, but they’re willing to let him be the nominee and go down to Donald Trump, because Bernie Sanders threatens their interests, and the movement behind him particularly, more than Donald Trump does.
RS: You know, they will stop Bernie Sanders, and they will do it by the argument of lesser evilism. And you see the line developing —
MB: But who is the lesser evil, Bob? I mean, Joe Biden is like this doddering wreck. There is no other candidate who seems even remotely viable against Trump.
RS: No, no, no — I understand that. I’m telling you what — well, it seems to me there’s — you know, you want to talk about fake news, the, misreporting of Bernie Sanders — in fact, the misreporting of what democratic socialism is. I mean, he’s now branded in the mainstream media as some hopeless fanatic because he dared to defend democratic socialism. Democratic socialism has been the norm for the most successful economies in the world, even to a degree when we’ve been successful. That was the legacy of Roosevelt, after all, is to try to save capitalism from itself. That’s why you had some enlightened government programs, you know, right down the list, and that’s what saved Germany after the war, and that’s what France and England and so forth, that’s why they have health care systems.
But the mainstream media has actually taken a very moderate figure, Bernie Sanders, and demonized him as some kind of hopeless ideologue, right? And as you point out, Bernie Sanders is hardly a radical thinker on issues — particularly, as you mentioned, about the Mideast and so forth. What he is, is somebody who actually is honoring the best side of Franklin Delano Roosevelt: you can’t let these greed merchants control everything, you have to worry about some compensation for ordinary people. That’s what Bernie Sanders is all about. And it should be an argument that has great appeal to people of power, otherwise they’re going to come after you with the pitchforks. Instead the mainstream media, in its hysteria, you know, has taken this word “democratic socialist” and used it to vilify him.
But the point that I want — and we will end on this, but I’d like to get your reaction — that came up in my discussion with Chomsky, who I have great admiration for. But it is this lesser evilism. And I think while, yes, people in their vote can think about that, they can vote that way — I’ve done it much of my life; I’ve voted for all sorts of evil people because they were lesser. But as a journalist — and I want to end about your journalism — as a journalist, I think we have to get that idea out of our head. And it means being able to be objective about a Donald Trump when he comes up with his NAFTA rewrite, and say hey, there are some good things in it, including the fact that you have to pay $16 an hour to people in Mexico who are working on cars that are going to be sold in the United States, OK. And what the liberal community has been able to do in the mainstream media, MSNBC, is Trumpwash everything.
Which brings us back to your critique. They’ve been able to say — they’ve made warmongering liberal and fashionable. They’ve taken the — they’ve made the CIA now a wonderful institution, the FBI a wonderful institution, [John] Bolton a wonderful hero. And I want to take my hat off to your journalism, because you have — and I do recommend that people go to your website, the Grayzone. Because you have had the courage to say, wait a minute, what’s called a lesser evil can’t be given a pass. Because in fact, maybe in some ways, or in many ways, it’s a more effective evil. We know what Trump is; he stands exposed every hour of every day.
But you know, Bill Clinton, Hillary Clinton — and I’m not trying to pick on them, but you know, they represented this embrace of the Wall Street center — they were much more effective in redistributing income to the rich. You know, you can talk about Trump’s tax break, but the real redistribution came with letting Wall Street do its collateralized debt obligations and credit default swaps that caused the destruction of 70% of black wealth in America, 60% of brown wealth in America, according to the Federal Reserve. So really, in this election, people have to think — you know, yes, I’ll hold my nose and I’ll vote for the lesser evil. But what’s that going to get us? Does it get us a more effective evil, a better-packaged evil? Last word from you?
MB: Well, I mean, one of the things that we do at the Grayzone.com, our mission is to oppose this policy of regime change that the U.S. imposes across the world against any state that seeks some independence from the U.S. sphere of influence that wants to craft its own economic policies in a socialist way, like Venezuela, Nicaragua. We, you know, we exposed a lot of the deceptions that were trying to stimulate public support for regime change in Syria, that would have been absolutely disastrous. And in all of these situations, we don’t stand alone, but we stand among a really, really small group of alternative outlets who don’t play the lesser-evil game on regime change.
Where we say, well, this leader or that leader are horrible, and they are evil dictators, but we should also be kind of suspicious of the, you know, of the war that the U.S. might wage. Or we should be critical of these brutal economic sanctions that have killed tens of thousands of Venezuelans through excess deaths. We say — we actually look at the alternative to the current government and show that there actually isn’t the lesser evil, that the alternative is far worse. In Syria it was Al Qaeda and the Syrian Muslim Brotherhood; in Venezuela it’s Juan Guaidó’s right-wing, white collar mafia, which is a front for Exxon Mobil. Same thing in Nicaragua.
And you know, as much as I respect and I’ve learned from Noam Chomsky, he plays that lesser-evil game on regime change. He’s trashed all of the, all of these governments. He celebrated the collapse of the Soviet Union, and we saw what happened to Russia after that. So it’s important to look at lesser evilism through a historical context, and then we can apply it to the United States as well. Look at who’s been sold to us as the lesser evil that we had to support. Well, we’ve been talking about them, Bob, for the last half hour, and they’ve subjected Americans to the same evil the Republican Party has, for the most part. Maybe they’ve limited it to some degree. But now there’s actually an option for something that I’d say is moderate in the United States.
You’re right — Bernie Sanders does nothing, and proposes nothing, outside the framework of the New Deal and LBJ’s Great Society. I don’t even think he’s a democratic socialist. I don’t know what that term really means. He’s a social democrat. And he is someone who at least offers a change from the consensus where the government actually starts to intervene to prevent people from dying excess deaths across the country, from the opioid crisis, from poverty, from homelessness. Eighty percent of new homes that have been built in the U.S. in the past two years are luxury housing. And you know who else is supporting Bernie Sanders besides all these debt-saddled youth? Active duty U.S. military veterans who are sick of permanent war. $160,000 in campaign contributions have been given to Bernie by active duty vets. That’s something like eight times more than have gone to Joe Biden, who is involved at the forefront of almost every American war since Gulf War I.
And we’re really capitalizing on that at the Grayzone. We understand the American public and the western public are sick of being lied into war, and they’re sick of being pushed into lesser evilism, whether it’s abroad in countries that are targeted by the U.S., or at home. And so we’re just there providing balance and exposing whatever the lie is of the day.
RS: Let me, as an older person, end with a little editorial about what — and I agree with the thrust of what you’ve been saying — but why I think this word “democratic socialism” is important, not just social democrat. Because it acknowledges the vast harm that has been done by the left in human history. It’s not just the right, it’s not just the corporate elite, and it’s not just the oligarchs. That people got hold of a message of concern for the ordinary person. It happened in religion too, after all, you know; structures were developed, people who claimed they were following the message of Christ, and they ended up building edifices to the exploitation of ordinary people.
I think what Bernie Sanders represents — and I’ll ask your response, but what I think he represents, the reason he’s so authentic — he actually believes in the grassroots. He actually believes that an ordinary person in Vermont can make intelligent decisions about the human condition, and about justice and freedom. And I think the reason Bernie Sanders can survive the rhetorical assaults on his leftism or his socialism, is that what people of power in the capitalist world have managed to do is identify this cause of social justice, a notion of democratic socialism with totalitarianism, with elitism. And Bernie Sanders — and this is a good night to celebrate Bernie Sanders, if it’s true; I hadn’t caught up with the news, but if he’s really doing that well in Iowa. Because I thought he would get 1% of the vote four years ago when he started; I never thought this would happen.
I think what makes Bernie Sanders authentic is his respect for the ordinary person. He is the opposite of that leftist elitist–and you have them as well as rightist elitists — who thinks they have to distort history to protect the average person from reality. And Bernie Sanders is — he speaks truth about what’s going on. And at a time when people on the right and the left have nothing but contempt for most of the politicians, and journalistic leaders and everything else, for having betrayed them. So I think Bernie Sanders is a ray of hope. I wish he would be around a lot longer, but then again, I wish I’d be around a lot longer. But it’s nice to run into Max Blumenthal, who’s half my age and has all of that spirit that I’d like to see in journalism. So thanks, Max, for doing this.
MB: Thank you, Bob. It’s a real honor.
RS: And by the way, I ignored that last book of yours. Could you give the title again and how people get it?
MB: It’s called “The Management of Savagery.” And let me pull it off the shelf so I can actually read the subheader. You can edit this. It’s called “The Management of Savagery: How America’s National Security State Fueled the Rise of Al Qaeda, ISIS, and Donald Trump.” And it’s really kind of my look at the, sort of how the politics of my lifetime and my generation has been shaped by foreign policy disasters that an unelected foreign-policy establishment has subjected us to.
RS: Full disclosure, I actually have not read it, and I will get it as soon as I can.
MB: I’ll send you a copy —
RS: No, no, no, you got — it’s hard enough to make a living as a writer. I don’t think you should give these things away for nothing. I’ll get myself a copy. And I want to thank you again. I’ve been talking to Max Blumenthal, check out his work, check out the Grayzone. These podcasts are done basically for KCRW, the public radio station in Santa Monica, where Christopher Ho is the engineer who gets it up on the air.
At Truthdig, Natasha Hakimi Zapata writes the brilliant intros and overview of these things and posts them up there. Here at USC, Sebastian Grubaugh, the Annenberg School for Communication and Journalism, really gets the whole thing going and hooks up everyone, thanks to him. And finally, there’d be no “Scheer Intelligence” without the main Scheer, Joshua Scheer, who’s the show’s producer. And we’ll see you next week with another edition of “Scheer Intelligence.”
Which Stock Sector Has The Highest Revenue Exposure To China
Earlier this week, when discussing Goldman’s latest downgrade to global GDP which the bank now expects to be cut as much as 2% in Q1 as a result of the coronavirus pandemic, only to rebound in subsequent quarters as the spread of the virus is contained…
… we asked why Goldman ignored the hit to corporate profitability, saying that “we are curious why Goldman did not account for the crunch that global supply chains are already sustaining: while Chinese tourism and exports are certainly important economic pathways, we wonder what will happen to both vendors and customers of intermediate goods that rely on Chinese factory tolling for output and for downstream products. Or perhaps that will be the topic of a subsequent Goldman report looking at how badly corporate earnings will be hit as the GDP hit impacts the corporate top and bottom line. We eagerly await such a report not only from Goldman but the other banks who have been oddly mute on the topic. Perhaps they are just waiting for the wave of guidance cuts that will inevitably be unleashed in the coming weeks by S&P500 member companies.”
Well, we didn’t have long to wait, because just two days later, Goldman’s chief equity strategist, David Kostin did a report looking at the “fundamental impacts of the coronavirus” on US companies.
Clearly, this was long overdue, because as we remarked earlier, “the crisis in China is creating havoc in global business: when commerce is interrupted, slowed or idled completely company revenues and profits drop hard. Analysts and investors have been viewing the developments in China as if business is merely deferred, not lost. That might be true for some of the businesses that deal with large-scale products, but for a number of businesses a large portion of sales are lost forever. For example, a lot of regular business and leisure travel that has been postponed is probably lost, so too are the sales at a number of consumer-related companies – there is no pent up demand for a hotel room, a coffee or a burger. And no one is considering the loss of labor income – due to the idling of production lost travel as well as the complete closure of sales offices – on all sides of the ocean that could reduce consumer spending in current and coming quarters.”
Indeed, the list of companies that so far have indicated that Q1 business operations will be impacted cut across a number of industries, and includes Delta, American, United, GM, Ford, Tesla, Google, Starbucks, McDonalds, Boeing, Nike, Wynn Resorts, Hilton Hyatt and Marriott – and the list will undoubtedly grow in coming months.
So what does Goldman think?
Well, curiously, to Kostin the coronavirus’s main impact on the US equity market will come through valuation changes rather than earnings, which is bizarre because if there is one thing that China’s economy grinding a halt in Q1 will do, is send earnings in free fall as copper producers around the globe have already found out. And while we think this is ludicrous, to Kostin what matters is just the multiple, specifically he writes that “S&P 500 NTM P/E peaked at 18.7x on January 17, traded down to a low of 18.1x (January 31) as coronavirus concerns intensified, and has rebounded to 19.1x as the market has become more sanguine on the economic reverberations of the spreading illness.”
Paradoxically, Kostin ignores all the evidence to the contrary and predicts that “the impact of lower global and US economic activity on 2020 S&P 500 EPS will be limited.” Well, that’s now timestamped, and we will certainly revisit it in three months time. In any case, Kostin justifies his cheerful prediction based on Goldman’s forecast that the overall impact on full-year global GDP growth is expected to be -0.1 to -0.2 pp, which would result in a $0.30 to $0.60 reduction in the bank’s full-year EPS estimate of $174 (20 to 40 bp decline in 2020E growth of 6%).
While Goldman’s big picture assessment is suspiciously optimistic, the bank does note – correctly – that the impact of coronavirus on US equities will likely be focused on select firms with the most exposure to China (which is obvious in a day and age when virtually every firm has some exposure to China).
It also goes without saying, that those most exposed to China are Chinese firms: since January 13, Chinese stock indices have plummeted: CSI 300 has declined by 7% and Shanghai Shenzhen Composite by 8%. During that same period, a basket of US firms with high China sales exposure has underperformed the S&P 500 by 5 pp (-3% vs. +2%). Basket constituents with the highest sales exposure to Greater China are YUMC (100%), WYNN (75%), and QRVO (74%).
Here are some additional observations from Kostin on which sectors will be hit the hardest:
Many consumer-facing US firms have halted operations in select Chinese locations. For example, CCL and RCL temporarily suspended cruise operations in China. SBUX has closed more than half of stores in China, which amounts to more than 13% of its global, company-operated storefronts. MCD closed hundreds of restaurants in the Hubei province, a small portion of the firm’s 37,000 global restaurants. Major airlines AAL, UAL, and DAL announced that they would suspend all flights to and from mainland China through March 27, March 28, and April 30, respectively. After reporting promising results from its new streaming service, DIS announced that it would close its parks in both Shanghai and Hong Kong. The expected income headwind of $175 million from those closures represents over 30% of the firm’s annual operating income from international parks.
Airlines and Gaming are among the industries that will be most affected by the coronavirus. GS airlines analysts highlighted that UAL had more than two times the capacity exposure to China than AAL or DAL. The coronavirus will also have a significant impact on the gaming industry. Many US casinos have operations in Macau, which will be affected by venue closures and by potential extended travel restrictions even after the casinos reopen. According to their most recent annual filings, WYNN has the largest exposure to Greater China (75% of revenues; 46% of assets), followed by LVS (62%; 54%) and MGM (22%; 20%). For the profitability of these firms, the halt in operations comes at an inopportune moment because the Chinese New Year is typically the most lucrative time of year for Macao gaming.
Amusingly, even as it lays out its confusingly bullish take on how modest the Coronavirus impact will be, Goldman admits that nobody really knows anything, and that managements have given only limited guidance regarding the likely impact of coronavirus on business activity. And while most managements elected not to provide guidance due to the uncertainty surrounding the virus – and the longer the pandemic goes on, the greater the guidance cut will eventually be – a few firms with significant exposure to China estimated the potential impact to 1Q 2020 results. And here is where things start to make some sense, because of the 58 S&P 500 firms that guided on 1Q 2020 EPS, 67% provided EPS guidance below the prevailing consensus expectations, roughly in line with the historical average. Firms including ALGN, AVY, NKE, PH, and ITW explicitly cited the coronavirus as a factor contributing to reduced EPS guidance.
What are Goldman’s recommendations? According to Kostin, investors who believe the economic consequences of the coronavirus will be limited should increase exposure to cyclicals and value stocks. Despite above-average dividend yields, the bank’s Dividend Growth basket has declined sharply alongside cyclicals and currently trades with depressed valuations. The sector-neutral basket of 50 stocks offers an annualized dividend yield of 3.5% (vs. 1.9% for S&P 500) and is expected to grow dividends 9% annually during the next several years (compared with 5% for the S&P 500). The median constituent currently trades at a nearly 40% discount to the market (forward P/E of 12x vs. 19x for S&P 500).
In short, if fears of global pandemic are allayed, the basket should outperform. Basket constituents with the highest market betas are SWKS (1.77), DXC (1.74), WYNN (1.57), AVGO (1.55), and CAT (1.49).
On the other hand, if Goldman – which is legendary for its irrational bullishness and in Dec 2018 predicted 4 rate hikes, even as the Fed ended up cutting rates 3 times – is once again wrong, and the coronavirus breakout is more serious than expected, then all bets are clearly off not just for the dividend growth basket, but all stocks, although one sector stands out. As we wrote last week in “Is Tech About To Suffer A “Dot Com” Bubble Collapse? It’s Suddenly All In China’s Hands”, the one sector with the greatest exposure to Greater China and Asia Pacific in general, is also the sector that has outperformed the most in recent months. Tech.
Barely into the New Year, 2020 vision has brought many revelations into better focus, making several ongoing observations perfectly clear. Although there are those who’ve been watching the dots of The Matrix assemble into the big picture for decades now, the election of Donald Trump has increasingly exposed what was hidden in plain sight for so long.
The awakening for many Americans could be compared to that of actor Jim Carrey’s character in the 1998 film “The Truman Show”. In that narrative, the unsuspecting star of a global reality television program came to the realization his entire worldview was formed within a bubble; a literal bubble that generated bubblevision in Carrey’s character as all of those around (and above) him performed right on cue.
Truly, it feels like that now in America. The times have become surreal.
And there is a great percentage of Americans who still live within the bubble. They are everywhere: In the workplace, in schools and colleges and at restaurants and in bars. They vigorously debate each other on who would make a better president between Bernie Sanders, Elizabeth Warren, Andrew Yang, or Joe Biden. They LOVE the fact that Trump was impeached and consider Adam Schiff, Nancy Pelosi, and the Devil’s butler (Chuck Schumer) to be American heroes.
Those in the bottom of the bubble are also concerned about Syria’s chemical weapons and patriotically desire bombs to fall on Iran. Of course the pundits and politicians cajoling these played plebeians are all part of the act. The Establishment’s middle managers know exactly what they are doing, and they know they’d have zero leverage if not for the dupes. It’s why they use carefully crafted language to conceal their motives and lies.
There also remains the possibility of an even grander deception that involves Donald J. Trump directly, or indirectly. This prospect has caused many, including this skeptical blogger, to question if everything we are now witnessing in American politics is occurring naturally or if is there something else going on. In any event, it seems the ongoing left-right dialectics have become a diversion as the Surveillance State expands unabated.
Furthermore, it appears the Democratic Party is fracturing down the middle, with moderates to the left of us and socialists to the even further left. The warfare was front and center during the recent Iowa Caucuses. For the first time in 76 years, the Des Moines Register canceled the release of its “gold-standard” Iowa Poll after a respondent “raised concerns”. Then an app caused a coding error that tarnished the Democratic Party results in Iowa on the day of the nation’s first caucus. What were the odds of both of these occurrences happening right on cue? And the tech-firm behind the “screw-up” on Iowa’s caucus day was run by “former staffers for Hillary Clinton’s 2016 campaign, Obama’s presidential campaign, as well as Google, Apple and former DNC employees”.
Obviously, the Iowa Caucus fiasco was rigged to diminish Bernie Claus while raising Joe Biden’s stake to the minimum viability – because, just like in 2016, the Democratic National Committee will attempt to steal the election away from Sanders. Evidently, the Democratic Party elites still don’t trust a socialist to win the U.S. Presidency.
Pass the popcorn.
And, by the way, isn’t the following interesting:
– A gay guy who is running for president has the word “butt” in his name.
– Operation Ukraine/Impeachment CIA “whistleblower” Eric Ciaramella’s surname contains the letters C-I-A and in the correct order.
– The name of the tech firm who “botched” the Iowa Caucus results (and run by former Clinton and Obama staffers) is called “Shadow, Inc”
– While, at every turn, a former reality TV star will “Trump” them all
It isn’t ALL just made for TV, right? Because it really is happening, right?
Right?
In any event, like true versus false, or life versus death, or cold versus hot, perhaps Conservative versus Swamp Rat is a valid ideological construct upon which we can expound.
With that in mind, here are seven (7) facts that have become completely obvious since Trump’s election in 2016:
1.) The Swamp Prefers Power over Justice
If The Swamp could be defined as the political establishment, the corporatocracy, globalists, elite bankers, and unelected bureaucrats or the Military-Industrial Complex – then those aligned with The Swamp currently would include RiNOs (Republicans in Name Only), Neocons, the Democratic Party, the Mainstream Media, the Loony Left, social media propagandists and censors, Marxists, liberals, globalists, elderly hippies, welfare moochers, unicorn chasers, transgendered bathroom rights crusaders, rabid feminists, rainbow chasing socialists, Black Lives Matter racists, Antifa agitators, Never Trumpers, Millennial snowflakes, and ALL who subvert the U.S. Constitution for their taxpayer-subsidized paychecks.
Indeed. The value systems of conservative Americans are quite different than those of The Swamp. This is why words like “liberty” and “equality” and “fairness” hold separate meanings for each. In the example of the former, these concepts are the result of natural law. In the latter, they derive more from Friedrich Nietzsche’s “Will to Power”; an idea for which the German philosopher also claimed was demonstrated in Darwinism as the “Will to Survive”.
Accordingly, the survival instinct can add entirely new dimensions to the consequences of political power and its inherently fictitious exculpation: “The ends justify the means”. It’s why The Swamp propagates the illusions of narratives over facts; and, in so doing, they have constructed a veritable panopticon of power – a literal bubble where We the People are constantly surveilled, enslaved by debt, and fed a steady diet of falsehoods and opiates; while being selectively censored on YouTube and Twitter, no less.
Pursuant to being tricked by FBI agents, Trump’s former National Security Advisor Michael Flynn pleaded guilty to a process crime during Special Counsel Mueller’s investigation in 2017. Just then former FBI Director James Comey tweeted the following Bible scripture:
“But justice roll down like waters and righteousness like an ever-flowing stream”
– Amos 5:24
Paradoxically, Senate Minority Leader Chuck Schumer cited the same verse in the well of the U.S. Senate during the closing arguments of Trump’s impeachment trial. Of course, James Comey and Chuck Schumer referencing Biblical justice is a joke because they know full well what they have done. But, to them, it’s an act put on for the bubbleheads who swallow it all because they believe Trump to be a xenophobic, misogynistic, and racist hater.
Truly, The Swamp has manufactured its own “reality” in the bubble. It’s why race and gender and sexual preference are prioritized over such lofty conceptions of constitutional law and due process. It’s also why open borders and the phony presidential impeachment debacle have taken precedence over routing out corruption from the highest offices of American government.
For over three years, the public has been told President Trump is an illegitimate president because he colluded with the Russians to win in 2016. It was not true, but, in spite of the fact that Democrats actually DID conspire with foreign agents in the 2016 Presidential Election, the Russiagate falsehood was used by the same Democrats to win the U.S. House in the 2018 Midterm Elections so they could, in turn, launch a sham impeachment of the president in order to hack the 2020 Election.
Sadly, today, most Americans are more concerned regarding abortion rights, climate change, and racism than constitutional law and the collapse of longstanding American institutions.
Social Justice and Political Correctness are codes of faux justice that has subverted genuine law and impartiality in the bubble; it is how the New Morality empowers those at the top of the pyramid while enslaving those below. The system will never fix itself. Why would it?
2.) Deception, Legal Gimmicks, and Political Chicanery are Tools The Swamp Uses as Means to its Ends
As witnessed during the Mueller investigation following the 2016 Presidential Election, the Kavanaugh hearings before the 2018 Midterm Elections, and the recent Ukrainegate Impeachment circus prior to the 2020 Presidential Election, the Swamp Rats will say or do anything to achieve political leverage.
Just as a dirty-dossier was used to launch Operation Russiagate against Trump and his supporters, a “whistleblower” was used to launch the Operation Ukrainian Impeachment. Furthermore, Operation Ukraine’s whistleblower complaint was most certainly crafted by Lawfare, LLC. – the same firm that has successfully indicted Team Trump for process crimes while successfully defending the likes of Brennan, Clapper, Comey, McCabe, Rice, Lynch, Strzok, Page, the Ohr’s, Bill & Hill, et al.
Just as The Swamp delivered Judge Kavanaugh’s alleged rape victims right on cue, so, too did they have Trump’s National Security Advisor, John Bolton, served up on a platter for a subpoena surprise in the waning days of their fading impeachment.
To be sure, the impeachment process in the U.S. House was a wholly politically partisan affair, and quite unfair – even to the point of refusing witnesses on behalf of Team Trump. Still, coordinated efforts to sustain the initiative were persistently availed: The Government Accountability Office (GAO) ruled that Trump illegally withheld aid to Ukraine as the House Democrats additionally released a “cache of notes and texts from Lev Parnas, a former associate of Trump lawyer Rudy Giuliani.
In fact, President Trump’s former advisor Steve Bannon called for an investigation into “coordination between Congressional Democrats and members of the media” regarding the timely release of various last-minute impeachment “bombshells”.
And just days before the final impeachment vote in the U.S. Senate, George Conway, the husband of presidential advisor Kellyanne Conway, projected the bias and fears of Lawfare, LLC onto Senate Republicans for not allowing John Bolton to testify. In an opinion piece, he wrote:
Fear of Trump drives the actions of the spineless GOP caucus, as does fear of the truth, and fear of a partisan base to which none dare speak the truth.
Yet, in Conway’s brazenly partisan advocacy for the US Constitution, and truth, he failed to equally demand the testimonies of faux whistleblower Eric Ciaramella or unofficial Ukrainian lottery winner Hunter Biden.
See how that works? The Swamp remains consistently and completely shameless even as We the People are perfectly captivated by high slimes and intervenors.
3.) There are No Moderates in The Swamp
When all elected politicians represent bipartisan constituencies to varying degrees, then why are the Democrats always unified while a percentage of Republicans consistently strive to reach across the political aisle? Why? Perhaps because only some U.S. Republicans and ALL U.S. Democrats solely serve The Swamp. And, although the myth of moderates in The Swamp continues inside the bubble, the truth is that there are none.
Consider the recent impeachment trial of President Trump: The Senate Democrats, and Republican Mitt Romney, fully understand the high crimes of the Obama administration in Ukraine that were projected onto President Trump. They cannot deny the FISA abuse as outlined within Inspector General Michael Horowitz’s report, the fact that House Manager Adam Schiff’s office colluded with the “whistleblower” and then submitted weakly contrived articles of impeachment after a third-world sham process in the U.S. House.
Yet every single Democrat senator voted to overturn the presidency of Donald J. Trump. In so doing, they demonstrated their willingness to disenfranchise over 60 million American voters via illicit articles advanced by a kangaroo court.
Indeed. The allegorical curtain has been torn away, the wizards have been completely exposed, and, Dorothy, we’re not in Kansas anymore.
Even Minnesota’s first elected female U.S. Senator, Amy Klobuchar, as a Democratic Party presidential candidate, claims to be a Midwestern moderate – but she voted in the U.S. Senate to honor and uphold the impeachment fraud. And, certainly, that came as no surprise because she once fooled Judge Brett Kavanaugh when, early in his Supreme Court nomination process, he “expressed appreciation for the way Klobuchar asked probing but respectful questions”; just before she voted to ruin his life without evidence, of course. This, from a University of Chicago Law School graduate who later become a county attorney. But, obviously, not a moderate.
Because there are no moderates in The Swamp.
4.) The Swamp Desires to Disarm the American Public
As established in the paragraphs above, The Swamp seeks power over justice with certain fanaticism. In so doing, the Swamp Rats utilize deception, illusions, and political chicanery. Then what, you may ask, stands in the way of their ultimate goal of global tyranny?
One way to address that question would be to consider what has stalled their nefarious plans for America during the past two centuries. The answer, so far, has been the United States Constitution. Although it’s been badly twisted and bent into its current shape, it has not yet been entirely broken. And why is that? Because the Second Amendment has, by and large, secured constitutional liberties against would-be tyrants and their encroaching totalitarianism.
So far.
But know this: The wolves are in the house.
In his 1991 book, “Behold a Pale Horse”, former United States Naval Intelligence Briefing Team member William Cooper warned of a secret initiative by the U.S. Central Intelligence Agency whereby drugs and hypnosis were to be used on mental patients coerced into shooting children in schools.
The government encouraged the manufacture and importation of military firearms for the criminals to use. This is intended to foster a feeling of insecurity, which would lead the American people to voluntarily disarm themselves by passing laws against firearms. Using drugs and hypnosis on mental patients in a process called Orion, the CIA inculcated the desire in these people to open fire on schoolyards and thus inflame the antigun lobby. This plan is well under way, and so far is working perfectly. The middle class is begging the government to do away with the 2nd amendment.
– Cooper, Milton William. (1991). “Behold a Pale Horse”, Light Technology Publications, page 225
Years later Cooper was shot and killed at his home in Eagar, Arizona while resisting arrest.
Now consider the United Kingdom where, for more than a century, various laws restricting firearms were passed until handguns were completely banned in the wake of the 1996 Dunblane School Massacre. After 16 children were shot in that mass shooting, the U.K. passed the Firearms Act 1997 in order to save the children. Except, now, those same children can be knifed at whim in London and even incarcerated for verbally challenging the false precepts of the foreign religion behind such medieval barbarism.
And over the decades in America, mass shootings have continued to occur with certain similarities: First, there is some sort of an active drill, either scheduled or ongoing, and then shots are fired, followed by eyewitness accounts of more than one shooter. Soon, the YouTube videos of those reporting on multiple attackers are scrubbed from the internet. Within hours, the murderer is reported to be extremely troubled, if not insane, and likely on psychotropic drugs, as several people claim they all “saw it coming”, or, in some instances, saying they are completely surprised that the person they knew could massacre so many.
Accordingly, manifestos and/or prophetic postings on social media by the shooter are revealed and, sadly, they are always discovered too late. Most commonly, of course, an AR-type weapon, handgun, or other semi-automatic firearm will have been used with the necessary large-capacity magazines. It is all quite convenient because these are highly coveted targets in the sites of politicians and globalists convening behind armed security on Capitol Hill or at the United Nations.
Finally, like the sun rising after a long dark night, the political establishment crows like roosters about “doing something” so “it never happens again”.
In the aftermath of the Sandyhook shooting in Newtown, Connecticut, President Obama issued 23 executive actions and proposed 19 legislative actions. After the Virginia Tech shooting new rules were passed that allowed the Social Security Administration to provide information to the gun background check system of people with “mental disabilities”. After Vegas and Parkland, it was bump-stocks and Red Flag Laws.
Following more recent mass events, such as the Isla Vista California, Gilroy Garlic Festival, El Paso, and Dayton Ohio shootings, the push for federal Red Flag Gun legislation has gained increasing bipartisan support. And if one wants to understand where it’s all going, look no further than what is being proposed and passed in the Democratic-Party-controlled state of Virginia: Universal background checks, gun registry, limitations of AR-type rifles and large-capacity magazines, limits on the number of guns purchased over specific periods of time, and suppressor bans.
All of these measures are labeled as “common sense” initiatives by those deciding how We the People might defend our families in the bottom of the bubble. Common sense? For The Swamp, maybe.
In truth, incremental gun control measures are a spider’s web of encroaching tyranny constructed by The Swamp and prosecuted by Lawfare, LLC; all in accordance to #’s 1, 2, and 3 above.
5.) The Mainstream Media Promotes the Propaganda of The Swamp
Be assured the deception, illusions, and political chicanery utilized by The Swamp would NOT be possible without the complicity of the handful of corporations that comprise the Orwellian Media. Not only does the Mainstream Media misinform the public, but it blatantly deceives the entire world. Truly, the election of Donald Trump has exposed the activist media to all but the most moronic of the morons stumbling around in the bubble.
Undeniably, The Swamp could be drained if not for the endless propagandic spin spewed forth by the modern-day purveyors of bubblevision. Just as the fictional Ministry of Truth in George Orwell’s book “1984” rewrote history to realign it with Swamp doctrine and make The Swamp look infallible, it also promoted war hysteria designed to manufacture consensus; and unite citizens against whatever, or whomever, The Swamp deemed culpable.
Orwell’s writings proved prophetic. Because, not only did the corporate media most recently promote The Swamp’s false narratives behind the Russiagate and Ukraine political operations, it specifically targeted Donald Trump and Russian President Vladimir Putin as modern-day incarnations of Orwell’s infamous scapegoat, Emmanuel Goldstein. In fact, it has been reported that television networks spent “more than twice as much airtime on the Ukraine probe as they did on the Russia probe” and with “93% negativity toward President Trump”.
Additionally, just before American patriots rallied in Virginia’s capital to protest Democrat Governor Ralph Northam’s draconian gun control proposals, the activist media breathlessly reported on the FBI arresting “three alleged members of a white-supremacist group on federal gun and alien-harboring charges, amid growing concerns about safety surrounding planned gun rights protests in Virginia’s capital…”
Furthermore, as the propagandic press promoted “Hail Mary” bombshells meant to “jolt” Trump’s impeachment trial in the Senate, it also memory-holed portions of the president’s address to the nation after the airstrike that killed Iran’s General Qassem Soleimani.
Mr. Trump didn’t propose negotiations with Iran and fanned partisan fires in Washington by blaming the Obama administration for signing onto a 2015 nuclear deal that freed up Iran’s access to billions of dollars, asserting those funds paid for weapons used in the attack [on Iraqi bases housing American and allied military forces].
Yet many Americans who didn’t see the address live, will never know.
The Orwellian Media’s mission is NOT to inform the public, but, instead, its purpose is to propagandize the people. Its false narratives are undeniably designed to expedite the downfall of the republic.
6.) Identity Politics and Climate Change are the Twin Pillars of the New Religion
If Trump was elected on the twin platforms of immigration and trade, The Resistance has countered back with melanin, genitalia, and the weather.
Identity politics and the legislation of social justice policies have stifled the rights of free speech and freedom of association throughout the democratic nations of the western world. And they materialized as the result of language manipulation. Remember when gender used to represent male or female? Yet, in that example, the word “identity” was added after “gender” thus opening a verifiable Pandora’s Box of Orwellian Newspeak.
Today in formerly free societies, men and women are forced to navigate Genderqueer and Non-Binary Identities, consisting of an entirely new lexicon including neo-designations such as Agender, Cisgender, Ceterosexual, Ceteroromantic, Demigender, Enby, and Epicene; just to name a few.
Political Correctness is a means of thought control in the bubble, designed to protect imaginary victims from the societal sins of xenophobia, sexism, homophobism, and racism.
And climate change is a means for global regulation and taxation.
The Swamp has implemented both schemes in order to unite the world via social justice and open borders illegal immigration. It works because many people in the bubble acknowledge the wisdom of loving others while caring for Mother Earth. Moreover, many others must believe in the new morality as atonement for their guilt.
It is a new religion. Or, perhaps, an old one with new names.
Nevertheless, the new morality has NOT waned since the election of Donald Trump. On the contrary, The Swamp has translated Trump into a veritable orange-haired devil in order to agitate the bubbleheads, thus breathing new life into the social justice movement. It’s why Deplorables now think twice before wearing MAGA caps in public and why climate change has a new prophetess in Greta Thunberg®.
Advertising works best when emotions run high; because all consensus is manufactured in a bubble.
7.) The Technocratic Surveillance State Grows Unabated
In the wake of September 11, 2001, the passing of the Patriot Act, and the revelations of former government contractor, Edward Snowden, the concerns of Americans regarding violations to the Fourth Amendment of the U.S. Constitution have not mattered to The Swamp.
As a result of what became known as Edward Snowden’s 2013 Global Surveillance Disclosures, American and British initiatives were exposed including PRISM and Tempora that revealed cooperation with governments around the world working in connection with multi-national corporations including Microsoft, Facebook, Apple, Google, British Telecommunications, and Verizon. Moreover, backdoor data-gathering programs such as XKeyscore were unveiled along with other various ways by which government spooks could intercept phone calls, text messages, and private data from commonly used internet platforms like Yahoo.
Just as technological breakthroughs in computing and the proliferation of “smart” communication and entertainment devices gave rise to government spying, it was not a very large leap of understanding to see how easy it would be to blackmail and control not only citizens, but government administrators, politicians, officials, and even judges, around the world.
This is why Senator Chuck Schumer said the following in an MSNBC interview on January 3rd, 2017:
Let me tell you, you take on the intelligence community, they have six ways from Sunday to get back at you.
Although Donald Trump appears to have survived attempts by the Five Eyes to take down his presidency, his administration has not slowed the development of the Surveillance State. Not in the least. There is no denying that “Big Tech is bigger than ever” and “the five most valuable U.S. tech companies now account for over 17% of the S&P 500, up from 11% in 2015”.
To the sounds of mouse-clicks, once free people have “accepted” the “terms” of their surrender and have forfeited their liberty in the name of convenience. Like buzzing insects, the citizens of modern societies are caught in silicon honey traps mortgaged with plastic and electronically powered via USB cable nooses wrapped tightly around their collective throats.
The Technocratic Powers That Be wield weapons far more powerful than any time prior in history and soon, people will wake up to realize the electronic buzzing sound ringing in their ears was not emanating from their own wings, but rather, it was merely the sound of drones over their heads.
And it doesn’t take a whole lot of imagination to see where the trends are leading:
In truth, the charade is that all political theater plays out on a stage constructed by the surveillance state. It means, over time, selective pressure can be applied, at will, during the show.
When Trump tweeted that we’d be on World War 6 if he listened to his disgruntled former national security advisor, John Bolton, it was quite brilliant on several levels – the least of which was putting the Democrats in the position of defending a warmongering Neocon they used to hate; a civil-war era appearing Caucasian who the president fired, no less.
It was riveting bubblevision. No doubt.
And now, top GOP Senators have claimed the Horowitz Report actually misled the public and are demanding Attorney General William Barr declassify some footnotes. But, sadly, it will likely make little difference because television has programmed our generation into sheep. And social media has further progressed a percentage of plebes into robotic puppets in the bubble. They’ve been psychologically programmed for one world under power.
Although Trump may appear invincible at the time of this writing, ask yourselves who controls the helium to the biggest economic balloons. The stock market is the pressure release valve. But when the bond market blows, the USD is toast. And, as supply chains snap and the bankers foreclose on the world, there will be ever-expanding pain for everyone to varying degrees, as the earth exhales.
Therefore, all current global trends, including especially Coronavirus®, are about establishing control prior to the advent of a new order. Although the immediate future will be anarchy, out of that chaos will come order administered by technological switches and gates. And the future will be cashless because slavery is rooted in economics.
Until then, expect The Swamp to continuously spin electronic and digital visions like dreamweavers casting a cabled web of anima mundi over the earth. Be assured, they will propagandize the orthodoxies of human secularism and social justice on behalf of Earth’s children as they anxiously await the arrival of Bernie Claus riding on his glorious unicorn down a vibrantly shining rainbow.
Confusion After Nikkei Denies Reuters Story That Foxconn Will Restart Production At Key Plant
Update: after futures sprinted into the green following a Reuters report that Foxconn had received Chinese government approval to resume production at a key plant in the northern China city of Zhengzhou, Nikkei now denies this, reporting that “Foxconn’s plan to resume production on Monday has been called off by the Chinese authorities due to worries surrounding the coronavirus outbreak”
The Japanese publication adds that “the action further worsens the supply chain disruption for global electronics companies, including Apple, Amazon, Google and Huawei. Foxconn is the world’s biggest iPhone assembler, and it makes Huawei smartphones and Amazon Kindle tablets as well as echo speakers, while it also supplies HP, Dell and most the major electronics brands.”
Public health experts in Shenzhen informed Foxconn, which trades as Hon Hai Precision Industry, that its factories there face “high risks of coronavirus infection” after conducting on-site inspections and therefore are not suitable to restart work, four people familiar with the matter told Nikkei.
“Violation of epidemic prevention and control could potentially face the death penalty,” the internal meeting memo seen by the Nikkei Asian Review said. More importantly, Foxconn’s Zhengzhou complex, which according to Reuters would reopen on Monday, also canceled plans to resume work on Monday, they said.
As for S&P futures, they continue to trade in the green, and far above overnight lows of 3303.50, refusing to believe the denial of the report that sent them higher.
* * *
With traders anxiously eyeing the surge in overnight coronavirus deaths in China as evidence the pandemic is far from contained, amid fears that China will not be able to reopen for business tomorrow despite the government’s assurance that somehow everything will be ok on Feb 10 and supply chains will once again be humming as before, futures slumped in early trading, but promptly erased losses of as much as 0.7%…
… after Reuters reported that Apple’s main iPhone production partner and fab, Taiwan’s Foxconn, also known as Hon Hai Precision Industry, had received Chinese government approval to resume production at a key plant in the northern China city of Zhengzhou, where half of the world’s iPhones are made.
Earlier in the day, Bloomberg reported that Foxconn’s factories worldwide are coordinating with authorities in carrying out virus protection and are preparing safety measures with the approval of local governments.
“Our group hasn’t received any client requests to move production resumption earlier,” Foxconn said in a statement Saturday, adding that operating schedules will be arranged according to local governments’ requirements.
But as Reuters notes it’s not all clear, and the company is still in talks with the government to resume production at another plant in the southern Chinese city of Shenzhen, confirming a Bloomberg report that Foxconn had asked Shenzhen employees not to return to work when the extended Lunar New Year break ends on Monday.
On Saturday, Nikkei reported that China blocked a plan by Foxconn to resume production in China from Monday amid concerns about the spread of the new coronavirus.
As such, the greenlighting of at least some work by Foxconn – so critical for Apple’s production schedule – was seen by the market as a vote of confidence in Beijing’s ability to contain the virus from the giant Zhengzhou facility, which employs about 350,000 of Foxconn’s 1.3 million employees in China.
But is that indeed the case, or is China merely being cavaliers with the lives of hundreds of thousands of workers? The answer will emerge in the news few days, when either there is a confirmed infection among Foxconn’s massive worker army, or there isn’t. Or maybe even sooner, if faith in the containment of the virus among Foxconn’s workers is non-existent and nobody shows up to work on Monday despite the company’s reopening…
Ford's Lending Arm Does The Dirty Work For Parent Company, Generating More Profit Now Than Ever
At a time when the global automotive market is mired in deep recession – and things likely aren’t going to be getting any better, with China in the midst of an epidemic – Ford’s lending arm is acting as the profit backbone for the company, generating more profit now than it ever has for the company.
Amid an epic loss, and the resignation of the company’s president, Ford credit now generates a remarkable half of the automaker’s profit, according to Bloomberg, which is up from 15% to 20% in the past. The company’s credit arm makes loans to dealers stocking vehicles and then the consumers who buy them. Ford is relying on its financing unit to help it fund “multi-billion outlays on electric and self-driving cars” now.
The parent corporation, however, is dealing with $11 billion in charges from a restructuring that “could take years”.
Lawrence Orlowski, an analyst at S&P Global Ratings said of Ford’s credit arm: “It’s like the ballast that keeps the ship steady. It’s a balancing act.”
The amount of vehicles that Ford has been selling has been on the decline for the last three years and the company is losing money in China.
But the company would be “far worse off” without its Ford Motor Credit unit, which is paying for the company’s capex by borrowing in the debt markets and paying a dividend back to the parent company. Expectations are for the credit arm to contribute nearly $3 billion annually to Ford over the next 2 years. In 2017, that contribution was just $400 million.
The company’s credit arm borrowed about $10 billion in the U.S. investment grade bond market over the last 12 months. Meanwhile, it has been over 3 years since Ford itself has issued bonds. Moody’s downgraded Ford to junk in September and S&P cut its rating on the company to its lowest investment grade rating in October. Another downgrade from S&P could remove Ford out of some major indices, which has weighed on the minds of investors for the better part of the last year.
All eyes are on the credit division now, especially, as the global automotive market continues to falter. Ford is going to be rolling out a new line of SUVs and redesigning its F-150 as part of its recent restructuring, as well.
Analysts are wary of both cost risk and execution risk.
David Whiston, an equity strategist with Morningstar said: “It’s quite clear Ford is not where it should be, but the finance arm is a bright spot. Obviously you want the whole company operating at full power, which you don’t have right now.”
Ford credit is also responsible for protecting the parent company’s dividend. The $2.4 billion it paid back to its parent in 2019 may be “unsustainable” in the future, analysts say, because Ford’s dividend consumers a much greater percentage of its cash flow than peers.
In fact, Bloomberg notes how further important the credit arm would become/is during a recession:
In a recession, Ford Credit’s role becomes even more important. It doesn’t play much in the subprime market, so the ratio of its losses to total customer bills outstanding stayed below 2% during the Great Recession, a low level. Its repossession rate never got higher than 3.2%.
Those strong metrics allowed Ford’s captive finance unit to generate a dividend for the parent even in 2009, when U.S. auto sales slumped to a 27-year low.
Tim Stone, Ford’s chief financial officer, said during a November interview: “With a healthy portfolio, a captive balance sheet in an economic downturn actually starts generating and kicking off a bunch of cash flow. We take a very thoughtful approach to that business.”
Ford Credit has sent $28 billion over the last two decades to Ford.
WUHAN (CAIXIN GLOBAL) – In the coronavirus epidemic, doctors on the front lines take on the greatest risk and best understand the situation. Dr Peng Zhiyong, director of acute medicine at the Wuhan University South Central Hospital, is one of those doctors.
In an interview on Tuesday with Caixin, Dr Peng described his personal experiences in first encountering the disease in early January and quickly grasping its virulent potential and the need for stringent quarantine measures.
As the contagion spread and flooded his ICU, the doctor observed that three weeks seemed to determine the difference between life and death. Patients with stronger immune systems would start to recover in a couple of weeks, but in the second week, some cases would take a turn for the worse.
In the third week, keeping some of these acute patients alive might require extraordinary intervention. For this group, the death rate seems to be 4 per cent to 5 per cent, Dr Peng said. After working his 12-hour daytime shifts, the doctor spends his evenings researching the disease and has summarised his observations in a thesis.
The doctors and nurses at his hospital are overwhelmed with patients. Once they don protective hazmat suits, they go without food, drink and bathroom breaks for their entire shifts. That’s because there aren’t enough of the suits for a mid-shift change, he said.
Exclusive: #Wuhan funeral home staffer reveals real death toll of #coronavirus
Over the past month on the front lines of the coronavirus battle, Dr Peng has been brought to tears many times when forced to turn away patients for lack of staffing and beds. He said what really got to him, though, was the death of an acutely ill pregnant woman when treatment stopped for lack of money – the day before the government decided to pick up the costs of all coronavirus treatments.
Here’s our interview with the ICU doctor:
Caixin: When did you encounter your first novel coronavirus patient?
Dr Peng Zhiyong: Jan 6, 2020. There was a patient from Huanggang who had been refused by multiple hospitals, who was sent to the South Central Hospital emergency room. I attended the consultation. At the time, the patient’s illness was already severe, and he had difficulty breathing. I knew right then that he contracted this disease. We debated at length whether to accept the patient. If we didn’t, he had nowhere to go; if we did, there was a high likelihood the disease would infect others. We had to do a very stringent quarantine. We decided to take the patient in the end.
I called the hospital director and told him the story, including the fact that we had to clear the hospital room of other patients and to remodel it after Sars standards by setting up a contamination area, buffer area, cleaning area, and separate the living areas of the hospital staff from the patients’.
On Jan 6, with the patient in the emergency room, we did quarantine remodelling in the emergency room and did major renovations to the ICU (intensive care unit). South Central Hospital’s ICU has 66 beds in total. We kept a space dedicated to coronavirus patients. I knew the infectiousness of the disease. There were bound to be more people coming in, so we set aside 16 beds. We did quarantine renovations on the infectious diseases area because respiratory illnesses are transmitted through the air, so even air has to be quarantined so that inside the rooms the air can’t escape. At the time, some said that the ICU had a limited number of beds and 16 was excessive. I said it wasn’t excessive at all.
Caixin: You predicted back in January that there would be person-to-person transmission and even took quarantine measures. Did you report the situation to the higher-ups?
Peng: This disease really did spread very fast. By Jan 10, the 16 beds in our ICU were full. We saw how dire the situation was and told the hospital’s leadership that they had to report even higher. Our head felt it was urgent too and reported this to the Wuhan city health committee. On Jan 12, the department sent a team of three specialists to South Central to investigate. The specialists said that clinical symptoms really resembled Sars, but they were still talking about diagnosis criteria, that kind of stuff. We replied that those standards were too stringent. Very few people would get diagnosed based on those criteria. The head of our hospital told them this multiple times during this period. I know other hospitals were doing the same.
Before this, the specialists already went to Jinyintan Hospital to investigate and made a set of diagnosis criteria. You had to have had exposure to the South China Seafood Market, you needed to have had a fever and test positive for the virus. You had to meet all three criteria in order to be diagnosed. The third one was especially stringent. In reality, very few people were able to test for a virus.
On Jan 18, the high-level specialists from the National Health Commission came to Wuhan, to South Central Hospital to inspect. I told them again that the criteria were too high. This way it was easy to miss infections. I told them this was infectious; if you made the criteria too high and let patients go, you’re putting society in danger. After the second national team of specialists came, the criteria were changed. The number of diagnosed patients rose quickly.
Security guards check the temperature of visitors at a seafood market in Guangzhou, Guangdong Province, China, on Feb 6, 2020. PHOTO: EPA-EFE
Caixin: What made you believe that the new coronavirus could be transmitted between people?
Peng: Based on my clinical experience and knowledge, I believed that the disease would be an acutely infectious disease and that we had to do high-level protection. The virus isn’t going to change based on man’s will. I felt we needed to respect it and act according to science. Under my requirements, South Central Hospital’s ICU took strict quarantine measures, and as a result, our department only had two infections. As of Jan 28, of the entire hospital’s medical personnel, only 40 have been infected. This is way less compared with other hospitals in terms of percentage of total medical staff.
It pains us to see the coronavirus develop to such a desperate state. But the priority now is to treat people; do everything we can to save people.
Caixin: Based on your clinical experience, what’s the disease progression of the new coronavirus?
Peng: Lately I’ve been spending the daytime seeing patients in the ICU, then doing some research in the evenings. I just wrote a thesis. I drew on data from 138 cases that South Central Hospital had from Jan 7 to Jan 28 and attempted to summarise some patterns of the novel coronavirus.
A lot of viruses will die off on their own after a certain amount of time. We call these self-limited diseases.
I’ve observed that the breakout period of the novel coronavirus tends to be three weeks, from the onset of symptoms to developing difficulties breathing. Basically going from mild to severe symptoms takes about a week. There are all sorts of mild symptoms: feebleness, shortness of breath, some people have fevers, some don’t. Based on studies of our 138 cases, the most common symptoms in the first stage are fever (98.6 per cent of cases), feebleness (69.6 per cent), cough (59.4 per cent), muscle pains (34.8 per cent), difficulties breathing (31.2%), while less common symptoms include headaches, dizziness, stomach pain, diarrhea, nausea, vomiting.
But some patients who enter the second week will suddenly get worse. At this stage, people should go to the hospital. The elderly with underlying conditions may develop complications; some may need machine-assisted respiration. When the body’s other organs start to fail, that’s when it becomes severe, while those with strong immune systems see their symptoms decrease in severity at this stage and gradually recover. So the second week is what determines whether the illness becomes critical.
The third week determines whether critical illness leads to death. Some in critical condition who receive treatment can raise their level of lymphocytes, a type of white blood cell, and see an improvement in their immune systems, and have been brought back, so to speak. But those whose lymphocyte numbers continue to decline, those whose immune systems are destroyed in the end, experience multiple organ failure and die.
For most, the illness is over in two weeks, whereas for those for whom the illness becomes severe, if they can survive three weeks, they’re good. Those that can’t will die in three weeks.
A patient covered with a bed sheet at an exhibition centre converted into a hospital as it starts to accept patients displaying mild symptoms of the novel coronavirus in Wuhan in China’s central Hubei province, on Feb 5, 2020. PHOTO: AFP
Caixin: Will you please give more details on clinical research? What percentage of cases would develop from mild conditions to severe conditions? What percentage of serious cases would develop into life-threatening cases? What is the mortality rate?
Peng: Based on my clinical observations, this disease is highly contagious, but the mortality rate is low. Those that progressed into the life-threatening stage often occurred in the elderly already with chronic diseases.
As of Jan 28, of 138 cases, 36 were in the ICU, 28 recovered, five died. That is to say, the mortality rate of patients with severe conditions was 3.6 per cent. Yesterday (Feb 3), another patient died, bringing the mortality rate to 4.3 per cent. Given patients in the ICU, it is likely to have more deaths. The mortality rate is also likely to edge up but not significantly.
Those hospitalised tend to have severe or life-threatening conditions. Patients with slight symptoms are placed in quarantine at home. We have not gathered data on the percentage of cases that progress from slight symptoms to serious symptoms. If a patient goes from serious conditions to life-threatening conditions, the patient will be sent to the ICU. Among 138 patients, 36 were transferred to the ICU, representing 26 per cent of all patients.
The percentage of deaths among life-threatening cases is about 15 per cent. The mean period to go from slight conditions to life-threatening conditions is about 10 days. Twenty-eight patients recovered and were discharged. Right now, the recovery rate is 20.3 per cent, while other patients remain hospitalised.
It is notable that 12 cases were linked to South China Seafood Market; 57 were infected while being hospitalised, including 17 patients already hospitalised in other departments; and 40 medical staff, among 138 cases (as of Jan 28). That demonstrates that a hospital is a high-risk zone and appropriate protection must be taken.
Caixin: What is the highest risk a serious patient faces?
Peng: The biggest assault the virus launches is on a patient’s immune system. It causes a fall in the count of lymphocytes, the damage in the lungs and shortness of breath. Many serious patients died of choking. Others died of the failure of multiple organs following complications in their organs resulting from a collapse of the immune system.
People lining up to buy face masks in Hong Kong, on Feb 5, 2020. PHOTO: EPA-EFE
Caixin: A 39-year-old patient in Hong Kong suffered from cardiac arrest, and his death ensued quickly. A few patients did not have severe symptoms upon the onslaught of the virus or in early stages, but they died suddenly. Some experts argue that the virus triggers a cytokine storm, which ravages the stronger immune system of young adults. Eventually excessive inflammations caused by cytokine result in the higher mortality rate. Have you seen such a phenomenon in the coronavirus outbreak?
Peng: Based on my observations, a third of patients exhibited inflammation in their whole body. It was not necessarily limited to young adults. The mechanism of a cytokine storm is about whole-body inflammation, which leads to a failure of multiple organs and quickly evolves into the terminal stage. In some fast-progressing cases, it took two to three days to progress from whole-body inflammation to the life-threatening stage.
Caixin: How do you treat serious and life-threatening cases?
Peng: For serious and life-threatening cases, our main approach is to provide oxygen, high-volume oxygen. At first noninvasive machine-pumped oxygen, followed by intubated oxygen if conditions worsen. For life-threatening cases, we use Ecmo (extracorporeal membrane oxygenation, or pumping the patient’s blood through an artificial lung machine). In four cases, we applied Ecmo to rescue patients from the verge of death.
Currently there are no special drugs for the coronavirus. The primary purpose of the ICU is to help patients sustain the functions of their body. Different patients have different symptoms. In case of shortness of breath, we provided oxygen; in case of a kidney failure, we gave dialysis; in case of a coma, we deployed Ecmo. We provide support wherever a patient needs it to sustain his life. Once the count of lymphocytes goes up and the immune system improves, the virus will be cleared. However, if the count of lymphocytes continues to fall, it is dangerous because the virus continues to replicate. Once a patient’s immune system is demolished, it is hard to save a patient.
Scientists working in the VirPath university laboratory, classified as “P3” level of safety, on Feb 5, 2020 as they try to find an effective treatment against the new Sars-like coronavirus. PHOTO: AFP
Caixin: There is news of some drugs that work. People are hopeful of the effect of US-made remdesivir, which cured the first case in the United States. What do you think of the drugs?
Peng: There are no 2019 novel coronavirus-targeted drugs so far. Some patients may recover after taking some drugs along with supportive treatment. But such individual cases do not indicate the universal effect of the drugs. The effect is also related to how serious each case is and their individual health conditions. People want a cure urgently, and that is understandable. But we need to be cautious.
Caixin: Do you have any advice for coronavirus-infected patients?
Peng: The most effective approach to the virus epidemic is to control the source of the virus, stem the spread of the virus and prevent human-to-human transmission. My advice for a patient is going to a special ward for infectious diseases, early detection, early diagnosis, early quarantine and early treatment. Once it has developed into a severe case, hospitalisation is a must. It is better to contain the disease at an early stage. Once it reaches the life-threatening stage, it is way more difficult to treat it and requires more medical resources. With regard to life-threatening cases, try to save them with ICU measures to reduce the mortality rate.
Caixin: How many patients with life-threatening conditions have you treated? How many have recovered?
Peng: As of Feb 4, six patients in the ICU of South Central Hospital died. Eighty per cent of them have been improving, a quarter are approaching their discharge and the remainder are still recovering in segregated wards.
The patient who impressed me most came from Huanggang. He was the first to be saved with the assistance of Ecmo. He had contact with South China Seafood Market and was in very serious conditions. He was transferred to the ICU and we saved him with Ecmo. He was discharged from the hospital Jan 28.
Medical workers in protective suits receive a patient at the Wuhan International Conference and Exhibition Center, which has been converted into a makeshift hospital to receive patients with mild symptoms caused by the novel coronavirus, in Wuhan, Hubei province, China, on Feb 5, 2020. PHOTO: REUTERS
Caixin: What are your work load and pace like?
Peng: The work in the ICU is overloaded. There are three patient wards with 66 beds in South Central Hospital, housing 150 patients. Since Jan 7, when we received the first patient, no one took any leave. We took turns to work in the ICU. Even pregnant medical staff did not take leave. After the epidemic got worse, none of the medical staff ever went home. We rest in a hotel near the hospital or in the hospital.
In the segregated ward, we wear level-3 protective gear. One shift is 12 hours for a doctor and eight hours for a nurse. Since protective gear is in a shortage, there is only one set for a medical staff member a day. We refrain from eating or drinking during our shift because the gear is no longer protective once we go to the washroom. The gear is thick, airtight and tough on our body. It felt uncomfortable at the beginning, but we are used to it now.
Caixin: Did you experience a very dangerous moment? For example, in case of intubation, what do you do to prevent yourselves from being infected?
Peng: It is a new coronavirus. We are not sure of its nature and its path of spread. It is not true if we say we are not afraid. Medical staff members do fear to some extent. But patients need us. When a patient is out of breath and non-invasive oxygen provision fails, we must apply intubation. The procedure is dangerous as the patient may vomit or spit. Medical staff are likely to be exposed to the danger of infection. We strictly require doctors and nurses to apply the highest-level protection. The biggest problem we face now is the shortage of protective gear. The protective stock for ICU staff is running low, although the hospital prioritises the supply to us.
Caixin: Is there anything that moved you in particular? Did you cry?
Peng: I often cried because so many patients could not be admitted to the hospital. They wailed in front of the hospital. Some patients even knelt down to beg me to accept him into the hospital. But there was nothing I could do since all beds were occupied. I shed tears while I turned them down. I ran out of tears now. I have no other thoughts but to try my best to save more lives.
The most regretful thing to me was a pregnant woman from Huanggang. She was in very serious condition. Nearly 200,000 yuan (S$39,505) was spent after more than a week in the ICU. She was from the countryside, and the money for hospitalisation was borrowed from her relatives and friends. Her condition was improving after the use of Ecmo, and she was likely to survive. But her husband decided to give up. He cried for his decision. I wept too because I felt there was hope for her to be saved. The woman died after we gave up. And exactly the next day, the government announced a new policy that offers free treatment for all coronavirus-infected patients. I feel so sorry for that pregnant woman.
The deputy director of our department told me one thing, and he cried too. Wuhan 7th Hospital is in a partnership with our hospital, South Central Hospital. The deputy director went there to help in their ICU. He found that two-thirds of the medical staff in the ICU were already infected. Doctors there were running “naked” as they knew they were set to be infected given the shortage of protective gear. They still worked there nonetheless. That was why ICU medical staff were almost all sickened. It is too tough for our doctors and nurses.
China Suddenly Has Another Major "Virus" Problem, As Soaring Food Prices Put A Lid On Central Bank Intervention
Soon the only food that will be affordable in China, is coronabat stew.
With over 400 million people across dozens of Chinese cities living in lock down as a result of the Coronavirus pandemic, crippling global supply chains and grinding China’s economy to a halt, it is easy to forget that China has been battling another major viral epidemic for the past two years: namely the African Swing Fever virus, aka “pig ebola” which killed off over half of China’s pig population in the past year, sending pork prices soaring, and unleashing a tidal wave of inflation.
Well, moments ago, the world got a stark reminder of this when China reported that in January, its CPI jumped by whopping 5.4% Y/Y, the highest print in nine years…
… driven by a surge in pork prices, which reversed a rare drop in December when the slid by 5.6%, rising 8.5% in just ont month, and a record 116% compared to a year ago.
This unprecedented surge in pork CPI meant that China’s food CPI rose a record 20.6% in January, also the highest on record, as China’s population, now ordered to live under self-imposed quarantine, suddenly finds it can no longer afford to buy food .
Needless to say, this is suddenly a major problem for China, whose central bank has in the past two weeks unleashed an unprecedented liquidity tsunami, including the biggest ever reverse repo injection…
… in hopes of stabilizing the stock market. Well, oops, because some of this liquidity now appears to be making its way into the broader economy, and is making already scarce food (aside from bat stew of course) even more unaffordable, and the already depressed and dejected Chinese population even more hungry, and angry.
There was one silver lining in today’s data: after spending half a year in deflation, China’s Production Prices, a proxy for industrial profits and overall price leverage, finally printed in the positive, rising 0.1% Y/Y, and better than the expected 0.0%
So far so good, however, with China’s economy now on indefinite lock down, expect the correlation shown in the chart above to break any moment now, with industrial profits crashing as a result of the coronavirus putting countless Chinese factories on lock down at least until the coronavirus is contained. When that happens is anyone’s guess, but one thing is certain: at the rate food prices are exploding, soon the only food China’s population will be able to afford will be the experimental bats used by the Wuhan Institute of Virology, one of which may or may not have been accidentally sold to the local fish market last December triggering what is now the worst viral pandemic in decades.
Just as concerning, if only for Beijing, is that if the surge in food prices isn’t “contained” very soon the arms of the PBOC will be tied and any hopes that China will reflate its economy – and the world – to offset the economic crunch resulting from the coronavirus, will be weaponized and vaporize right through the HVAC, just like any number of manmade viruses currently being developed in Wuhan, as pretty soon China’s population – starving and quarantined – will have no choice but take matters into its own hands.
'Ungrateful Bastard': Kyle Bass Unloads On CCP Mouthpiece In Coronavirus Twitter Feud
As evidence mounts that China’s response to the coronavirus has been as much (if not more) about controlling the narrative than containing the outbreak, hedge fund manager Kyle Bass put CCP mouthpiece Hu Xijin in his place after the Global Times EIC criticized US humanitarian relief as “belated,” and suggested that US offers of help are more talk than action.
“You ungrateful bastard,” Bass replied in a now-deleted tweet, adding “We should take our supplies and go back home. Let the chinese virus rampage through the ranks of the GT and the rest of the communist party.”
Hu then tried to make Bass apologize for ‘bringing shame’ to the investment community, and said he should apologize to Chinese citizens – including Dr. Li Wenliang, the whistleblower who tried to raise the alarm about the new coronavirus in December, caught the virus, and died last week after many believe he was either tortured, denied care, or worse.
.@Jkylebass As an investor with 129K twitter followers, you uttered such a malicious curse. You bring shame to investors community and social media users.CPC members are ordinary citizens, fathers, husbands, wives, daughters… Dr. Li Wenliang is one of them. You should apologize. pic.twitter.com/SNO5c0235i
Bass had none of that – responding “I will not. You arrested, censured, and ‘punished’ (only God knows what you did to him and the other 7 doctors) the heroes of Wuhan. You are a disgrace to humanity,” adding that the Global Times should do a special on organ harvesting – linking to activist website China Tribunal.
I will not. You arrested, censured, and ‘punished’ (only God knows what you did to him and the other 7 doctors) the heroes of Wuhan. You are a disgrace to humanity. I HAVE AN IDEA 💡 , let’s have the GT do a special on https://t.co/SseoCEoM7E . #CrimesAgainstHumanity
The founder and CIO of Dallas-based Hayman Capital Management explained to Bloomberg that he deleted his tweet because he “felt that it was too harsh for the rank and file” of the Global Times, but that he will “never apologize to a self-righteous, attempted manipulator of public opinion,” referring to Hu.
In recent weeks, Bass has been more critical than usual of the CCP – openly posing the question of why we should Trust China when they’ve proven themselves to be liars.
Now we are supposed to believe that the Wuhan Level 4 Virology lab at the center of the current crisis is simply a civilian lab whose mission is to investigate the world’s most dangerous diseases for the betterment of humanity? This is an affront to any educated person. 3)
WHO (Tedros) praising the chinese coronavirus response has been dangerous affront to the global community. @DrTedros should resign. He instilled a false sense of security in western healthcare professionals. #coronaviruschina#WuFlu#Outbreakhttps://t.co/kBUmOWQtkq
Is Tesla The Next Amazon Of Auto Companies? One Investment Bank Offers Their Answer
We often rib on Morgan Stanley’s Adam Jonas for blindingly supporting Tesla with egregious price targets based on things like “Tesla Mobility”, which don’t even exist. But every once in a while Jonas produces an actual piece of analysis that can be useful.
One of two notes Jonas put out on Thursday was called “A Valuation Guide for Tech PMs” and was dedicated to trying to compare Tesla to other tech titans, now that the automaker’s stock has ascended into the stratosphere for seemingly no reason at all.
Tesla’s meteoric rise has “put it in the discussion with the most popular Teracaps, accelerating the hand-over from traditional
auto investor to tech investor,” Jonas said in his note. He says his firm is getting increasing numbers of calls from tech PMs who have picked up Tesla as a tech investment, instead of an auto investment. The market, Jonas says, is now viewing Tesla as a tech company.
It has to – how else is it going to justify a market cap of $150 billion on a company that has never turned an annual profit?
But, we digress. In his note, Jonas compares Tesla to Amazon, Apple, Netflix and Spotify. He hilariously calls it “more expensive, but higher growth” than the hyper-cash generative Apple and “cheaper than Spotify”:
Is Tesla the next AMZN? Amazon (covered by Brian Nowak) trades at over 7x 2025 EBITDA with over 12% top line growth from 2025 through 2030. On this framework, Tesla is much more expensive and lower growth (on our forecasts)vs. AMZN.
Is Tesla the AAPL of autos? Apple (covered by Katy Huberty) trades at under 12x 2025 EBITDA with 7% top line growth (based on Morgan Stanley’s published FY19-FY23E Revenue and EBITDA CAGR estimates) from 2025 through 2030. On this analysis, Tesla is slightly more expensive but higher growth than Apple.
How about Tesla vs. Netflix? Netflix (covered by Ben Swinburne) trades at around 13x 2025 EBITDA with over 9% top line growth from 2025 through 2030. On this analysis, Tesla is materially more expensive and slightly higher growth.
And vs. Spotify? Spotify (covered by Ben Swinburne) trades at around 15x 2025 EBITDA with over 12% top line growth from 2025 through 2030. On this analysis, Tesla is slightly cheaper than Spotify while materially lower growth.
He then says that Tesla’s valuation can appear “relatively reasonable” to some investors as a technology stock. But ultimately, he concludes, “for an investor to purchase TSLA’s stock today, based upon current 2025e valuation, he or she needs either higher growth or a better business (higher ROIC, recurring revenue, lower volatility, etc.) or both.”
Just yesterday, we pointed out that Morgan Stanley had kept an “underweight” rating on the stock with a $360 price target, amidst the stock’s recent run up, where it had nearly tripled in the span of just weeks.
In that note, Jonas noted the astounding volume with which Tesla has traded. Jonas said that “Tesla traded over 48 million shares on Wednesday (over 25% of shares outstanding) for a value traded of approximately $36bn. For comparison, Apple, a company with roughly 10x the market cap of Tesla traded approximately $9.5bn of value yesterday. Tesla traded nearly 4x the value of the world’s most valuable public company.”
And he also was cautious about calling Tesla the winner in the EV space, given its new entrants: “Moreover, with US and global EV penetration at approximately 2% we believe it may be too early to declare the ultimate winner in the global EV market. At a minimum, there may be substantial risk to modeling the growth and market share of a market at such a low level of maturity today.”
He concluded by noting that even the bulls he was speaking sound like they are starting to change their tone to a slightly more skeptical one:
“We continue to engage with investors in high volume on Tesla, but noted a slight change in feedback where even some bulls on the name we have spoken with have expressed a degree of uncertainty, and in some cases, concern around the recent price action..”
"This Is A Ticking Timebomb": Here's The Chart That Convinced Albert Edwards That Helicopter Money Is On Its Way
Two weeks ago, when looking at the latest CBO forecast which predicted that the cumulative US deficits would increase by $13.1 trillion over the next decade, we highlighted perhaps the most troubling chart in all of finance right now, namely the CBO’s long-term forecast for US debt, which can be described in one word: exponential.
Commenting on this chart rather laconically, we said that “in other words, the MMT that will be launched after the next financial crisis, and which will see the Fed directly monetize US debt issuance from the Treasury until the dollar finally loses its reserve currency status, is now factored in.”
Neither the chart, nor the comment was lost on SocGen’s resident bear Albert Edwards, who after living through a harrowing earthquake during his vacation in Jamaica, chimed in on the chart above, writing in his latest Global Strategy Weekly that “this is a ticking timebomb and the chart… is screaming out for attention. The sources of this debt explosion are well known and documented with, for example, the unfunded liability of an aging population boosting Medicare expenses and the off-budget social security deficit spiralling upwards over the forecast period.”
To underscore his Japanification thesis, Edwards also points to the chart below to the left, and observes that this will be “the first year in which the US cyclically adjusted primary deficit will have exceeded Japan’s since 1992, when Japan was beginning to suffer the serious fiscal impact from the bursting.”
But, as Edwards notes, “it is the change in the cyclically adjusted primary deficit – which economists think measures the discretionary fiscal impulse – that slows or stimulates the economy (see right-hand chart above). The almost 1½% US fiscal stimulus a couple of years back has given way to a slight tightening of policy. Indeed, it is notable that in contrast to all the market chatter about fiscal expansion – and with central banks pressing governments to do more – all major countries are basically fiscally neutral this year. But fiscal neutrality won’t defuse the ticking government debt bomb of their 1980s bubble. This does indeed mark a new level of fiscal debauchery for the US.”
So what to do? Below we present Edwards’ thoughts on what comes next and, you guessed it, it involves MMT, i.e., helicopter money being used to thaw the ice age that over the past 30 years sent bond yields to never before seen lows:
… based on the fiscal projections from the CBO above, I expect the US will likely join Japan in giving up any serious attempt to reduce its government debt to GDP ratios back to the historically ‘normal’ levels. It simply ain’t going to happen. Does anyone seriously believe that any democratically elected government would be willing to raise taxes or cut government spending and future pension/health benefits in a bid to delay the fiscal timebomb? Of course they wouldn’t! And any government that attempts to do so will be hounded from office by an indignant public armed with pitchforks and much else besides.
The CBO chart above showing US federal debt spiralling exponentially out of control screams one indisputable outcome to me (and these sorts of charts are similar for most industrialised countries). Helicopter money is on its way. You can call it Modern Monetary Theory (MMT), you can call it ‘Fiscal and Monetary Co-operation’, or you can call it whatever you like, but there is only one realistic way out of this mess – and that is for governments to inflate away their debts. However, since much of these liabilities will rise with the CPI, like state pension benefits and healthcare, and cannot be inflated away, there will have to be more emphasis on deflating the liabilities that can actually be shrunk via rapid inflation.
Russell Napier reaches the same conclusion in his Macrovoices interview. Like him, I believe the regime change will be such a major event that it can only be implemented during a crisis – and for both of us, the next recession will be that crisis as it will be a deflationary bust! But my views are well known on that topic.
If this outlook of Russell’s and mine is correct, one other thing is likely: helicopter money, and it will be a very effective tool. Mainlining liquidity directly into the veins of the global economy will be much more effective in boosting GDP than QE, which has largely injected liquidity only into the veins of the financial markets. Helicopter money will work for Joe Sixpack much more effectively than it will for Mike Moneybags – and so it will be much more widely popular. And that is the problem. Once politicians have their hands on this policy tool, make no mistake, they will never ever hand it back to the Central Banks. And any policymaker that ever dares try to turn off the monetary taps would be well advised to read about the fate of Korekiyo Takahashi , Japan’s Finance Minister and former Governor of the Bank of Japan.
Takahashi, who is credited with pulling Japan out of the early 1930’s depression with extremely loose fiscal policy financed by helicopter money, is regarded as Japan’s Keynes link. He resisted fiscal tightening in 1935 as too early because of the continued fragility of the economy, but by 1936 with the economy having returned to full employment he set about turning off the fiscal and monetary taps and called the helicopters back to base.
As in all these things, the beneficiaries of super-loose fiscal and monetary largess were not happy when it looked as if the fiscal taps were about to be turned off. The Japanese military, who had been a major beneficiary of his fiscal spending, were especially miffed – so they had Finance Minister Takahashi assassinated.
As helicopter money becomes increasingly inevitable, the big news is that we are calling for the thawing of the Ice Age after the next recession – whenever that arrives. But a deflationary bust, which will take US 10y yields to around -1% (and 30y yields negative), will come first and enable this massive shift in policy to occur.
And within a few years I have not one scintilla of doubt that helicopter money will be so successful that CPI inflation will return like a long-lost relative. But, like a distant uncle we only see every now and again, we will have forgotten just how out-of-control he can become after a few drinks, and woe betide anyone who tries to stop him in his tracks, or in policy terms tries to stand down those confetti dropping helicopters.
Where will it all end? Albert leaves us with these thoughts from Cathy Buckle, reproduced in The Zimbabwean last week.
“This week our government got off the hook with regard to their obligation to pay doctors the same salary they were earning a year ago. Zimbabwean Strive Masiyiwa and his Higherlife Foundation has established a fund that will pay junior doctors US$300 a month for the next six months….
While this deal was being finalised our Supreme Court ruled this week that all debts incurred before February 22 last year will be settled in the local currency on a US$1 to Z$1 basis. The ruling was made by Chief Justice Luke Malaba, the same judge who ruled that Emmerson Mnangagwa had won Zimbabwe’s 2018 disputed, contested election.
In the week that Justice Malaba made the currency/debt ruling, the bank rate for US$1 was Z$17 and the black market rate was US$1 for Z$25. To put Justice Malaba’s ruling into context: if someone owed you US$100 in February 2019, they can now pay you back $100 Zimbabwe bond dollars which today is worth the equivalent of just US$4, not quite enough to buy three mangoes in the supermarket.
The Supreme Court ruling was made in response to an appeal over a US$3.8 million debt owed by Zambezi Gas to mining-related company NR Barber, which is now to be paid in Zimbabwe dollars that are worth only US$145 000.
Undoubtedly this ruling will mostly benefit the well connected and the political elite.”
A little words, but the point is simple, and just to summarize Edwards’ take on what happens next, which is essentially a repeat of what we said both two weeks ago and what we have been saying for years now, the SocGen strategist is “now more convinced than ever before that the coming deflationary bust will take the US 30y yield below zero. I am also convinced that helicopter money will be the chosen way out of this deflationary quagmire, especially as it becomes increasingly clear that there is now no way left to reverse every government’s exploding fiscal liabilities. The Ice Age is nearing the end.”
Nine Members Of Hong Kong Family Infected WIth Coronavirus After Sharing Meal
One of the biggest clinical surprises involving the coronavirus epidemic in recent days was the discovery that in addition to targeting ACE2 (angiotensin converting enzyme 2) receptors in the respiratory tract, resulting in an aggravated “cytokine storm” in the lungs and lethal pneumonia as the cause of death, the virus which increasingly appears as if it was developed in a the Wuhan Institute of Virology, also targets ACE2 receptors in other organs such as heart, kidney, liver, intestine, etc., which in turn explains why the first Hong Kong death from coronavirus was the result of heart failure and not pneumonia.
This discovery also hints at air passage as a likely form of viral transmission, which in addition to the discovery that the virus can survive as long as a week on any surface, has dramatically raised the odds of widespread distribution.
Concerns about the way the virus spreads are likely to surge following a report that nine members of the same Hong Kong family have been infected with the deadly new coronavirus after sharing a hotpot and barbecue meal. A hotpot – also known as a steamboat – is a bubbling cauldron of stock shared communally, to which diners add ingredients.
It wasn’t immediately clear if the food was contaminated with the virus, or if one of those present for dinner was a carrier.
According to the SCMP, the nine made up almost all of the 10 positive cases reported in the city on Sunday after seven people – all members of the family – were confirmed late in the evening as having the infection. Earlier in the day, a 24-year-old male member of the family and his grandmother were confirmed to have the virus. The man’s mother and father, two aunts and three cousins were the others infected. Their ages range from 22 to 68.
Adding to the mystery of the viral spread, the other case confirmed earlier was a 70-year-old man who had not travelled out of Hong Kong since January 9, spending most of his time at home.
With the 10 new cases, the number of people infected in the city jumped by more than a third to 36, heightening fears of a community outbreak. The development came as health authorities warned of “major difficulties” in tracing possible virus carriers because some might only show mild flu-like symptoms at an early stage.
In response to the increasing number of cases, the Hospital Authority, which runs the city’s public health facilities, also said it would drastically adjust non-urgent services in the coming four weeks.
“We’re facing major difficulties in isolating the suspected cases and tracing those who had close contact with the confirmed patients,” Dr Chuang Shuk-kwan, head of the communicable disease branch of the Centre for Health Protection, said, adding that it was because some people would only show mild symptoms and thus it was hard to tell who might have the virus.
Nine of the new cases had been to a family gathering on January 19 at the Lento Party Room in Kwun Tong. Nineteen people had joined the dinner, including two relatives from mainland China who left the city at the end of last month.
“I suggest the public cuts down on these gatherings. If they are necessary, try to reduce the time spent together,” said Chuang, who also urged citizens not to share chopsticks with those they dine with.
Ironically, even as authorities warned that the virus may spread even as carriers show mild, or no symptoms, about 3,600 passengers and crew members on board the World Dream cruise ship quarantined in Hong Kong for four days finally left the vessel on Sunday after control measures were completed. According to the report, all of the 1,800 crew members, who possibly had contact with eight passengers infected with the new virus on a previous trip, tested negative for the disease.
Commenting on whether Hong Kong could stop the spread of the virus in the community, Chuang said it depended on how many virus carriers there were who showed little or no symptoms.
“If there are many people who have no symptoms or only mild symptoms, and they have infected many others, then there isn’t much we can do to stop the spread,” she said. “We will do all we can.”
Two medical sources, meanwhile, said a 69-year-old man with diabetes had also tested positive for the coronavirus, possibly raising the total tally further. He remained in critical condition on Sunday at Pamela Youde Nethersole Eastern Hospital’s intensive care unit. He travelled to the mainland more than a month ago, so well before China scrambled to quarantine hundreds of millions of people across more than 60 cities, a move that in retrospect now appears to have been moot.
Pursuing its own quarantine, the number of people entering Hong Kong dropped sharply as a 14-day mandatory quarantine scheme to tackle the coronavirus outbreak took effect on Saturday.
On that day, only 23,399 people entered the city through the airport, Hong Kong-Zhuhai-Macau Bridge and Shenzhen Bay Port, the three control points that remain open, down from 95,982 on Friday. Of these, only 1,430 came through land crossings on Saturday from Macau and the mainland.
From Saturday to 7pm on Sunday, 918 people were put under mandatory quarantine. They included 814 Hong Kong residents.
Jon Hellevig posted on January 16th at The Saker, “Capitalism in America: How a Dismal Decimal is Robbing Americans Blind” the most extensive and up-to-date compendium anywhere, of data on economic inequality in America, and one fact especially stands out from it: “Today Top 1% are losers compared with Top 0.1% – the Dismal Decimal – who are where the music plays. Top 0.1% now holds as much wealth as Bottom 90% combined.”
These top 0.1% people also donate the lions’ share of the money that finances political ads and organizations for their candidates and against the candidates who are financed instead by the other Party’s billionaires. Any candidate who isn’t backed by the billionaires of any Party is a rarity and (except for the independent Bernie Sanders, who is truly an exception) has no realistic chance of winning or keeping a seat in Congress.
That drastic inequality of wealth in America — “Top 0.1% now holds as much wealth as Bottom 90% combined” — is calculated by Deutsche Bank, in their January 2018 study “U.S. Income and Wealth Inequality”. Here’s more from that study:
On page 3 is shown that U.S. is comparable to Chile, Israel, Mexico, Portugal, and Turkey, as being at the top of the nations studied, in “inequality in household disposable income.”
On page 6: “A record high 30% of households have no wealth” in the United States.
On page 7: All-time high median net worth in constant dollars was 2007, at $119,000, declined to $67,000 in 2010, and rose to $78,000 by 2016.
On page 8: “U.S.: Top 0.1% owns as many assets as the bottom 90%”
On page 10: U.S. has higher income-inequality than any other OECD nation.
On page 11: Income-inequality is rising faster in U.S. than any other OECD nation.
On page 15: Top 1% in pre-tax income in the U.S. in 2014 was $1.3 million+.
Top 0.1% was $6 million+.
So: if the top 0.1% in income in America are also the top 0.1% in wealth in America, then the individuals in America who draw $6 million+ annual income own as much as do all 90% who aren’t in the top 10%.
When a nation’s billionaires control not only its mega-corporations but its government, that small group — who do business with one-another — constitute a national dictatorship which is just as bad as in feudal times when a tiny aristocracy (who also did business with one-another) controlled the government and were a collective dictatorship over the entire nation’s population. A king isn’t required in order for there to be a dictatorship. Most dictatorships are aristocratic, not monarchical. Furthermore, in almost all monarchies, the king represents, and comes from, his class — the aristocracy. A collective dictatorship is no better, or worse, than is a one-person dictatorship.
There are, according to the latest count by Forbes (as of 2019), 607 billionaires in the U.S., and these people include, for example, Jack Dorsey who controls Twitter, and Eric Schmidt and John Doerr who mainly control Google, as well as Mark Zuckerberg who controls Facebook. Of course, Bezos, Buffett, the Waltons, the Kochs, and hundreds of others, are also among these 607: but, still, it’s this group of people (plus perhaps a hundred of the mere centi-millionaires) who actually control mega-corporate America including its government — they also hire and control millions of employees and other agents such as law firms and lobbyists — and the other 330 million Americans do not possess such control, but instead only work for them, and sell to them, and buy from them, and view the world through their media. Most importantly, the other 330 million Americans receive their television and radio and newspaper and magazine ‘news’ from the country’s billionaires, and vote for the U.S. President and members of Congress on the basis of that news, which is virtually entirely filtered by appointees of these 607 people, not only as being controlling owners of the media but as being (controlling) the largest advertisers in all of the major media. The largest advertisers participate, with the media-owners, in controlling the media. It’s all the same group of fewer than a thousand individuals, who collectively control America.
Some of them — such as Trump, and Bloomberg, and Steyer — are also in politics or trying to be, because they want to be controlling America even more directly than they already do, so that their power will be even greater than it already is. Of course, Trump has already succeeded at this, and we can see from what he has been doing to America as its President, a fair representation of the billionaire class’s political intentions, though he is more blatant about it than, for Example, Tom Steyer is, who was the biggest political donor in the 2016 campaign year, having given $91 million to help Hillary Clinton and other Democratic politicians. He was the top donor that year to defeat Bernie Sanders, and thus help Clinton win the Party’s Presidential nomination; so, that’s the type of Democrat which this billionaire actually is: a neoconservative and a neoliberal. No matter what Tom Steyer and another Democratic Party Presidential candidate, Michael Bloomberg, might say in order to win votes, that’s what they all actually are: neoconservative, and neoliberal. They support American imperialism, and they support America’s billionaires — they are the actual beneficiaries from American imperialism, and from an American economy that funnels more and more of the nation’s wealth into their control.
Here are some recent studies which document this dictatorship:
If America were a democracy, then there would be no “narrative control on social media,” because social media wouldn’t be allowed to censor whatever they want to censor. They wouldn’t have that power. The First Amendment to the U.S. Constitution prohibits the Government from punishing anyone for any type of “speech,” but doesn’t say anything to limit America’s aristocrats from censoring out whatever they want to be censored-out — using their “social media” so as to reduce the ability of anyone to say or to link to what those super-rich don’t want the public to have access to. Censorship by the billionaires is accepted in America.
Consequently, Julian Assange is kept imprisoned (in one way or another) for around a decade and is now being drugged in a British maximum-security prison while awaiting extradition to the U.S. for final slaughter, and he has never been convicted of anything, but Americans — alone of all the world’s people in this regard — approve of this, and accept both a Democratic President Obama and a Republican President Trump perpetrating this illegal punishment of him for revealing truths about their dictatorship.
And, also consequently, the United States has a higher percentage of its people in prison than does any other nation — and virtually all of them are lower class, not the type of criminal who murders by giving an order or by signing a contract or by selling a dangerous or toxic product but by knifing or shooting someone. The crooks who do the most harm are the richest ones, and they don’t merely violate the laws, they (through their lobbyists etc.) also write the laws.
This working through agents, whom they pay, is how it comes to be that America is now scientifically proven to be one dollar one vote instead of one person one vote.
And that is how it comes to be the case that the billionaire Trump can push into law a $32 billion taxpayer-giveaway to the investors and top executives in America’s biggest banks, which then use the money to increase stockholder dividends and to cut their workforce.
And, as “Capitalism in America: How a Dismal Decimal is Robbing Americans Blind” documents, it’s no longer the top 1% but now is instead the top tenth of one percent who are raking money in from the poorer 99.90% of the U.S. population. You’ve now got to be pretty rich in today’s America in order to be robbing from virtually everyone else. “Top 0.1% now holds as much wealth as Bottom 90% combined.” The top 0.1% are now scamming even the rest of the top 1%. But, of course, in this nation where the top 0.01% have been writing the laws (via their lobbyists) for decades now, none of them is anywhere among the millions of Americans who are in prison. To be that rich is to have a stay-out-of-prison card, no matter how many people you’ve harmed or even killed by your dangerous or harmful products or services, such as trick mortgage contracts or toxic pharmaceuticals.
So, realistically, now: Who can say that America hasn’t become a mega-corporate dictatorship?
Oil Heading For "Mid $40's" In Few Weeks On Lack Of Demand: Starfuels Brokerage
With WTI sliding below $50 on Sunday evening, expect even more downside according to S&P Global Platts’ Claudia Carpenter, who writes that oil prices will probably drop to the “mid-$40s” a barrel in the next couple of weeks because of weak demand, according to Matt Stanley, director of Starfuels commodities brokerage.
Supply isn’t an issue but demand is and demand growth is so fragile that an excuse like coronavirus has caused the 15% drop in prices the past few weeks, Stanley told the 7th annual Global Commodity Outlook conference in Dubai on Sunday.
Crude prices have dropped significantly in in the past few weeks on concern that the virus outbreak could blunt global crude demand. Front-month Brent settled Friday at $54.47/b, 16% below its most recent peak on January 20, while WTI futures were down 14% over the same period.
OPEC and 10 allies, including Russia, are debating whether to institute deeper production cuts to stem the price slide, but Stanley said the coalition, known as OPEC+, should instead be looking to increase output to revive demand growth. “Cutting supply to keep prices up is not the way to do it,” he said.
The only big winner of cutting supply would be US shale producers who would boost production on higher prices, effectively pushing prices even lower, he added. US President Donald Trump has probably had his eye on re-election for his second term ever since the first one started, with an eye on supporting the US energy industry so it becomes a key supplier to China, he said, predicting that Trump will win a second term in office.
An OPEC+ technical committee last week recommended that the coalition cut an additional 600,000 b/d on top of its existing 1.7 million b/d cut accord through the second quarter, to combat the coronavirus’ expected hit to oil demand. Russia, the main non-OPEC participant, has yet to commit to the deal, which requires unanimous approval by all 23 OPEC+ countries.
The coalition is next scheduled to meet March 5-6 in Vienna, but delegates have said it could be moved forward if a consensus on new cuts can be reached in advance.
The coronavirus has sparked fears of a major economic slowdown in China, the world’s largest importer of crude, where quarantines and travel restrictions have caused a contraction in oil consumption. China sources some 70% of its crude imports from OPEC+ members, and its refineries are expected to slash runs by about 1 million b/d in February, according to S&P Global Platts Analytics.
Robert Willock, Middle East and North Africa director at the Economist Corporate Network, part of the Economist Intelligence Unit, said his base outlook for the coronavirus is that China will have the outbreak contained by the end of March. That would mean China’s gross domestic product would grow at 5.4% this year, down from 5.9% forecast before the virus, he said.
If the virus is not under control until the end of June, the GDP would grow by 4.5%, he said. “All bets are off” on the GDP forecast if it’s not under control beyond then, he added.
Angry Chinese Ambassador Slams US Senator For "Absolutely Crazy" Theory Coronavirus Is Biological Weapon
Shortly after Zero Hedge asked in the last week of January if the nVoC-2019 Coronavirus pandemic was not, as some early reports claimed, the product of a Wuhan seafood market, where people were allegedly eating infected bats (which we now know never happened) but instead a Chinese biological weapon that had escaped from the Wuhan Institute of Virology (and one lab in particular), which in turn led to an immediate and permanent suspension of our account by the publisher also known as Twitter (and which should thus be subject to Section 230 of the Communications Decency Act), none other than Arkansas Senator Tom Cotton echoed our concerns, tweeting that “China claimed—for almost two months—that coronavirus had originated in a Wuhan seafood market. That is not the case. @TheLancet published a study demonstrating that of the original 40 cases, 14 of them had no contact with the seafood market, including Patient Zero.”
Senator Cotton followed up this tweet with another, in which he effectively suggested that the coronavirus had in fact escaped from China’s only level four biohazard superlab (located conveniently in Wuhan), stating that “we still don’t know where coronavirus originated. Could have been a market, a farm, a food processing company. I would note that Wuhan has China’s only biosafety level-four super laboratory that works with the world’s most deadly pathogens to include, yes, coronavirus.”
We still don’t know where coronavirus originated. Could have been a market, a farm, a food processing company.
I would note that Wuhan has China’s only biosafety level-four super laboratory that works with the world’s most deadly pathogens to include, yes, coronavirus. pic.twitter.com/CtuU2czBLp
And despite China’s best efforts to downplay this scary possibility with countless articles written in China’s state-owned press “disproving” that the virus was in fact an escaped Chinese bioweapon, such as this one from Caixin “Shi Zhengli responds to questioning experts agree that the new crown virus is not artificial“, while censoring any allegation across its social medias that the Wuhan Institute was the origin of the virus, last Friday the White House finally stepped in and with more than a month’s delay, and one week after Cotton’s controversial tweet, the Trump administration formally asked scientists if the virus was indeed a Chinese man-made bioweapon (needless to say, an affirmative answer would put whoever it is at twitter that suspended our account in a rather unpleasant position).
That did not prevent China from theatrically getting increasingly more angry at the mere suggestion that the virus which some claim has now infected over 1.5 million people, was a product of the Wuhan Institute of Virology – as if by simply feigning outrage it could convince the world’s population that it had nothing to do in the spread of nCoV despite clear and glaring evidence to the contrary – and on Sunday, the Chinese Ambassador to the U.S. Cui Tiankai slammed Senator Cotton for doing just what we did first, namely suggesting the coronavirus could have been created in a Chinese biological warfare lab.
“I think it’s true that a lot is still unknown and our scientists, Chinese scientists, American scientists, scientists of other countries, are doing their best to learn more about the virus, but it’s very harmful, it’s very dangerous, to stir up suspicion, rumors and spread them among the people,” he said.
It wasn’t clear if the “suspicion” would be more dangerous than the consequences of arresting your own Whuan whistleblower doctor who tried to warn the world of the imminent danger from the Coronavirus (and who later died after a brief and unsuccessful battle with the virus)? Or maybe it was more dangerous than urging the world to ignore the fact that China has put 400 million of its own in people in over 60 cities on lockdown, and continue flying commercial to China, pretending nothing is happening and ignoring video clips from Wuhan showing local crematoria working 24/7 to dispose of bodies killed by the viral pandemic (without being add to the list of diseases casualties).
No, you see, what Tiankai was concerned about is that the possibility that China created a plague that is now killing its own population, could cause a panic: “For one thing, this will create panic,” Cui said, adding that it would also “fan up racial discrimination and xenophobia.”
Here one also wonders what will create a bigger panic: the fact that China is arresting “whistleblower doctors”, drags away and sequesters anyone who refuses to be put under forced quarantine, and appears to fabricate data involving the epidemic, or cracks down on anyone asking the most reasonable question – did China’s top bioweapon institute, located in Wuhan, spark the deadliest pandemic in decades, which started in… Wuhan?
But yes, we are delighted to see that China has now also stooped to using the oldest trick in the liberal playbook: “…but it’s racist.”
And just like that, anyone accusing China’s Level-4 lab, which as Nature wrote in 2017 was studying the “world’s most dangerous pathogens”, of sparking what may be the world’s worst pandemic in decades, is now a racist, and subject to immediate and permanent suspension by the free speech overlords at twitter such as the company’s associate General Counsel, Jeff Rich (his LinkedIn page is here) who one week ago urged his 1,400 followers to “cull” and “excise” the “cancerous” president Trump from the herd. One wonders, Rich, does this violate Twitter’s “Abuse and harassment” rules?
YES!! Again, this 👇 Excise the Trump cancer, then deliberate over policy differences. He is the single most destructive force against our system of government, way of life and American values EVER! He must be culled from the herd. ASAP! https://t.co/MVfdAylV2H
Anyway, back to China’s rather sensitive ambassador who, instead of promising to look into whether any of the allegations that China created the Coronavirus, simply lashed out at anyone daring to ask the question: “There are all kinds of speculation and rumors,” he added, noting that there were also conspiracy theories about the virus originating in the United States. “How can we believe all these crazy things?”
Well, Cui, “we can believe all these crazy things”, because China has yet to reveal just what animal was responsible for the spread of the virus at the Huanan Seafood Market, as per the official Chinese narrative. Maybe the reason why it can’t is that as scientists have already observed, no animal was capable of actually spreading the virus in such a way as to put the blame on a meat market that had existed for decades and never sparked a deadly pandemic.
Or maybe China can finally allow members of the US CDC to go to Wuhan and inspect the Virology Institute and observe just what went on in there, and whether, as so many have now speculated, it wasn’t one of your public workers who accidentally (or not) spread the virus?
But that wasn’t all: Cui also defended how the Chinese government handled the case of Li Wenliang, the Chinese doctor who died last week after warning about the virus weeks before the government, with the government arresting him and forcing him to retract his warnings.
“He was a doctor, and a doctor could be alarmed by some individual cases, but as for the government, you have to base your decisions on more solid evidence and signs,” Cui said. “I don’t know who tried to silence him, but there was certainly disagreement…on what exactly the virus, is how it is affecting people.”
“I don’t know who tried to silence him, but there was certainly disagreement…on what exactly the virus, is how it is affecting people,” @AmbCuiTiankai says in the wake of the death of Dr. Li Wenliang who first made public warnings of the #Coronavirus weeks before the government pic.twitter.com/CaQLoz1gOi
Here is a guess who “tried to silence” him – your government, the same government that was responsible for the disappearance of Chen Qiushi, a citizen journalist who has covered the outbreak in China and has since vanished. Asked about Cui responded “I have never heard of this guy, so I don’t have any information to share with you.”
Right.
We’ll conclude with what we said earlier today, namely that “there have been serious questions on whether this Wuhan coronavirus outbreak was due to a leak or mishandling of laboratory animals used in coronavirus studies. This is a reasonable public inquiry regarding the source of the outbreak and it warrants a transparent investigation from the Chinese authorities and foreign disease control and laboratory operation experts. This is not just about the accountability of medical ethics or laboratory safety operations, it is directly related to the current endeavors to contain the virus outbreak.
While the animal host of 2019-nCoV is yet to be identified, the data and information from possible animal hosts and potential zoonic infection is imperative for prevention and controlling disease on an international scale.
The Huanan seafood market has a high potential of harboring the animal host. Animal data and profiling results from the Huanan seafood market need to be disclosed immediately by Chinese authorities even if they are negative results. It is imperative for U.S. CDC and WHO officers to demand that Chinese authorities release the information about animal testing data.
If Chinese authorities refuse to disclose testing data for animal samples, it could imply an intentional cover-up of the true origin of the 2019-nCoV outbreak.
Sadly, we doubt we will ever get an answer to this question, because – as the Chinese ambassador made it clear – any line of inquiry into whether there was an “intentional cover-up of the true origin of the 2019-nCoV outbreak” is now, well… racist.
If a brand is a function of promise (imagery) and performance (interaction), then the brand Iowa is largely a function of the promise. The Hawkeye state is one of the least visited states in the union, attracting fewer tourists than Nebraska or Kentucky. The promise/perception: the caucus and dead baseball players emerging from a cornfield.
The Iowa primary is first for little other reason than it’s first, and has been since the disastrous 1968 Democratic Convention, where the DNC decided it needed a more egalitarian process. So it let Iowa go first, as they had a quaint (antiquated and stupid) caucus process that required more time. The contrast of candidates and deep-fried Snickers was a media hit that cemented the process as “American.” If “American” means damaging and irrational then, yes, go Hawkeyes.
Intimacy = Contact
I write about tech executives, and (no joke) refuse to meet with them. Mostly because I’m an introvert and don’t enjoy meeting new people. But also because intimacy is a function of contact. Often when I meet someone, I like them as a person, feel empathy for them, and find it harder to be objective about their actions. I was recently invited to an “intimate” dinner with the CEO of Uber orchestrated by his PR team, who were looking to spread Vaseline over the lens of the exploitation that Uber levies daily on its 4 million “driver partners.” As Gladwell writes, the people who did not meet Hitler got him right.
It’s difficult for our elected leaders not to shape public policy around the concerns and priorities of the super wealthy when they have more access to their senators. It’s easiest to identify with those who are most like us and those we spend the most time with. The median wealth of Democratic senators is $946,000, Republican senators $1.4 million.
A National Bureau of Economic Research study of the 2004 presidential primary estimated that people in early-voting states had up to five times the influence in candidate selection of voters in later primaries. Since 1972, the Iowa caucus winner for the Democratic party has become the party nominee 70% of the time.
The most influential people on the planet, who decide our laws and wars, spend way too much time interacting with Iowans. Over the last year, the top six candidates for the Democratic nomination collectively spent a year in Iowa. So, who has influence over the most influential people in the world? Old white people. Specifically, about 171,000 of them, about a quarter of the population of Washington, DC, and just 15.7% of Iowans — a state with less than 1% of the U.S. population, and just 1.1% of the electoral votes.
The Iowa caucus has more sway over who gets the nomination than any media firm, ethnic group, or other state, as it provides focus and momentum in the all-important attention graph. So a state with the population of Chicago, whose inhabitants are 90% white, does what almost every policy and institution in America does: transfer wealth from the young and non-white to the old and white. Even in the land of old and white, it gets whiter and older — caucus attendees must have the time and money to caucus. Show me a single Latina mother, and I’ll show you someone who can’t make it to a caucus.
It Gets Worse
The second primary is where a candidate can get real momentum, but it’s also a chance to check and balance Iowa. Unfortunately, New Hampshire boasts the second-oldest population in the union and is even more monochrome with 93% white residents. White households commanding 8x the wealth of black and Hispanic households, skyrocketing student debt, anemic home ownership among millennials, and an agricultural sector where 15% of income is government subsidies — these are not a function of chance.
A democracy on its own is dangerous, as it creeps from egalitarianism to a mob mentality. A liberal democracy is supposed to slow our thinking by inserting institutions and laws that provide guidance and balance. Each of us didn’t send a text message on whether we should launch, on September 12, 2001, nuclear-tipped MGM-52 Lances into Kabul. Our slow thinking saves us from ourselves. But now, our institutions have transformed from bodies of nuance to vehicles of discrimination and cronyism.
Ingesting deep-fried Snickers and town-halling with old white people for a year inhibits our leaders’ ability to move where the puck is headed. Ideas worthy of consideration aren’t heard, and outdated thinking becomes a pillar of our union. For example, Social Security should be disbanded. Yes, I said it. The wealthiest cohort in human history (US baby boomers) should not be the recipients of the largest transfer payments in history.
Without Social Security, senior poverty would escalate from 9% to 39%. This isn’t evidence of the program’s veracity, but its inefficiency. Lifting 15 million seniors out of poverty is noble, but not worth $1 trillion a year, escalating to $1.8 trillion over the next decade. So, each year we are spending $16,500 per person to pull these Americans out of poverty, vs. $5,700 per person for recipients of Medicaid. A targeted program for seniors, similar to most other social programs, would end the universal basic income program that Iowa and New Hampshire have essentially secured for one demographic: seniors. A better investment would be guaranteed income for Americans in their first decade of life vs. their last.
18% of children live in households that are food insecure. We could likely reduce this by two-thirds if we dropped groceries on the front door of every household with children, every day. However, this makes no sense, and neither does Social Security. For two-thirds of seniors, Social Security has detached from the program’s original mission — to eradicate senior poverty — and is now the world’s most expensive upgrade from Carnival to Royal Caribbean for Nana and PopPop. Senator Michael Bennet is correct when he says the reason we don’t discuss universal Pre-K is because toddlers don’t vote. They do, however, caucus. But only when cake is involved.
Suggestions
Racism, income inequality, and a generation less prosperous than their parents are complicated problems with no silver bullet. A decent place to start is to reorder the caucuses. Put Iowa and New Hampshire last. Kevin Sheeky, a Bloomberg advisor, suggested that the three closest states in the previous presidential general election go first in the next primary. This year that would mean Michigan going first, then New Hampshire and Wisconsin. That seems a lot more dynamic and strategic.
Or … eliminate the caucuses altogether. Caucuses are undemocratic in that they require hours of participation that only those with the freedom not to work can afford. Older, wealthier, and more highly educated Americans punch above their weight in electoral terms — they have time to vote and stay engaged politically. Younger, poorer, and less educated Americans punch below their weight; they don’t have the time and resources to be politically involved and to go to the polls. Democrats need to get young and diverse voters to the polls. The Iowa and New Hampshire caucuses accomplish the opposite.
Dems also need to be more strategic. Millions of dollars, hours, ads, and corndogs are concentrated on small states that don’t make a big dent in the effort to organize and activate the national voter base. There are nearly twice as many registered Dems in Brooklyn as the entire state of Iowa. Iowa has a population of 3.2 million, New Hampshire 1.4 million, Nevada 3.1 million, South Carolina 5.1 million. Iowa is currently a non-competitive general election state, and little of all this work can be harnessed in November.
And the strongest cautionary tale of the Iowa caucus — the fallibility of technology. The app, creepily named Shadow, by a firm formed five months ago, was barely tested and crashed. In addition, 4chan users conducted an operation to clog the phones and stop precincts from reporting. All this confusion without a hack.
Technology is hackable, glitchy, and dependent on WiFi, which itself is vulnerable to attacks. An 11-year-old hacked a voting machine prototype in 10 minutes. Ivanka Trump has shown a peculiar interest in trademarking voting machines. The only safe election is a paper ballot election. Count them twice. Leave Russia, tech hubris, and Ivanka’s trademarks out of it.
Gage Hake
At the State of the Union, the president honored 13-year-old Gage Hake and his mom, and recognized their father/husband, who was killed in Iraq. Gage was present, in the moment. But he wasn’t focused on his deceased dad or the recognition. Gage was 100% focused on consoling his obviously distraught mother. Any child of a single mother knows what it means to have your entire universe collapse to one thing: the well-being of your only remaining parent. A 13-year-old boy trying to be the man of his house and comfort his mother is instinct. Our institutions and idolatry of the dollar have arrested another instinct — to ensure the next generation prospers.
White House Budget To Include 'War On Waste' While Boosting Spending On Military, Veterans, And Space
The Trump administration is expected to release a $4.8 trillion budget Monday which will include a ‘bold and detailed chapter on curbing waste, fraud, corruption and taxpayer abuse,’ according to Forbes‘ Adam Andrzejewski, who has seen an advance copy.
The plan would increase military spending 0.3% to $740.5 billion, while cutting non-defense spending by 5% to $590 billion, which falls below the level Congress and the Trump administration agreed to in a two-year budget deal last summer. The budget assumes that a 2017 tax-cut package is extended past its 2025 expiration, and projects revenues in line with last year’s proposal.
That said, the budget also assumes the economy will grow at 3% for the next 15 years, which seems more than a bit ambitious.
“The White House’s election-year budget will show the economy growing at an average rate of 3% for the next 15 years”…..we haven’t grown at 3% for a full calendar year since 2005 and we averaged 1.8% annual growth over the last 15 years.
As the Wall Street Journal notes, “Among the agencies that would receive the biggest boost is NASA, which would see a 12% increase next year as Mr. Trump seeks to fulfill his goal of returning astronauts to the moon by 2024. On the other hand, the Environmental Protection Agency’s spending would be slashed by 26%.” The Department of Housing and Urban Development, meanwhile, will see its budget slashed by 15%, however as the Journal adds, the proposal includes $2.8 billion in homelessness assistance grants.
The Centers for Disease Control and Prevention would see its budget decline 9%, but with the coronavirus sparking global panic, $4.3 billion in funding for fighting infectious diseases would be preserved.
Separately, the administration has notified Capitol Hill that it might reprogram $136 million in funds from fiscal year 2020 to address the virus, the administration official said, though no decision has been made on whether the money is needed. –Wall Street Journal
Other winners include the Department of Veterans Affairs, which will receive a 13% boost next year, the National Nuclear Security Administration with a 19% boost, and the Department of Homeland Security, which will receive an additional 3%.
The plan would request $2 billion in new funding for construction of the wall the southern U.S. border, the senior administration official said—Mr. Trump’s signature 2016 campaign promise that sparked fights with Democrats in Congress, leading the president to trigger a historic five-week government shutdown last winter after lawmakers refused to fund the project. The latest $2 billion request is significantly less than the $5 billion the administration sought last year.
The White House proposes to cut spending by $4.4 trillion over a decade. Of that, it targets $2 trillion in savings from mandatory spending programs, including $130 billion from changes to Medicare prescription-drug pricing, $292 billion from safety-net cuts—such as work requirements for Medicaid and food stamps—and $70 billion from tightening eligibility access to federal disability benefits. –Wall Street Journal
Meanwhile, Forbes‘s Andrzejewski sums up “three of the non-partisan reforms the president will highlight in his FY2021 budget to Congress”:
1. End Improper Year-End Waste. The federal government’s use-it-or-lose-it year-end spending spree has been going on for years. In our recent oversight report, we found $97 billion spent by 67 federal agencies during the final month of fiscal year 2018. In the last week of the fiscal year, $53 billion in contracts went out the door – that’s one in every ten dollars spent in the entire year.
The year-end spending spree purchases included:
Inflatable games ($42,500), model rockets ($34,000), china tableware ($53,004), alcohol ($308,994), musical instruments ($1.7 million), workout equipment ($9.8 million) and lobster tail and crab ($4.6 million).
$300 million spent on passenger vehicles, trucks, motorcycles, scooters, and snowmobiles.
$462 million spent on public relations, marketing research, and advertising.
$491 million spent on furniture and redecorating federal agencies.
$61.2 billion spent by the Pentagon in the final 30-days of the fiscal year.
2. Putting an End to Improper Payments. Each year, the twenty largest federal agencies admit to mistakenly paying out approximately $140 billion. For example, we found that nearly $1 billion was improperly paid to dead people. The Internal Revenue Service (IRS) improperly paid $18.4 billion through the earned income tax program last year.
Since 2005, we found the federal government has improperly paid $1.2 trillion from the U.S. Treasury.
3. Conducting Oversight of Spending. The Trump administration has already eliminated 31,000 duplicate contracts, saving taxpayers $27 billion since 2017. In the budget, they commit to doing more including comparison shopping, volume discounts, and negotiating better deals.
In response to the economic paralysis brought about by the coronavirus, the Chinese central bank has pumped $243 billion into financial markets. On Monday February 3 2020, China’s equity market shed $393 billion of its value.
Most experts are of the view that in order to counter the damage that the coronavirus has inflicted, loose monetary policy is of utmost importance to stabilize the economy. In this way of thinking, it is believed that the massive monetary pumping will lift overall demand in the economy and this in turn is likely to move the economy out of the stagnation hole.
On this way of thinking consumer confidence, which has weakened as a result of the coronavirus could be lifted by massive monetary pumping.
Now, even if consumers were to become more confident about economic prospects, how is all this related to the damage that the virus continues to inflict? Would the increase in consumer confidence due to the monetary pumping cause individuals to go back to work?
Unless the causes of the virus are ascertained or unless some vaccine is produced to protect individuals against the virus, they are likely to continue to pursue a life of isolation. This means that most people are not going to risk their life and start using the newly pumped money to boost their spending.
It seems that whenever a crisis emerges, central banks are of the view that first of all they must push plenty of money to “cushion” the side effects of the crisis. The central bankers following the idea that if in doubt “grease” the problem with a lot of money.
It did not occur to all the advocates of the aggressive loose monetary policy that this is going to transform a given economic crisis into a much larger one.
Most advocates would respond that it is the central bank’s duty to defend individuals against various bad side effects. The only way they can defend individuals is by not adding more damage.
If loose monetary policy could counter the bad side effects of the coronavirus then we should agree that money pumping is an effective remedy to eradicate side effects of viruses. In this sense, central bankers should be nominated for the Nobel Prize in medicine.
Most experts still don’t get it that money is just the medium of exchange. It produces nothing and it can only provide the services of the medium of exchange. If we begin to consider money as something magical that can fix everything, including eradicating the economic side effects of the coronavirus, this opens the gate for nasty economic surprises.
What’s the first thing a Democratic presidential candidate should do after suffering a monumental defeat in the first caucus of the season?
If you’re Joe Biden, call a woman who introduced herself as “Madison” a “lying dog-faced pony soldier” after she says she’s attended a caucus.
After a New Hampshire voter asks @JoeBiden why they should trust he can turn his campaign around, he asks if she’s ever been to a caucus before; when she says yes, Biden snaps: “No you haven’t. You’re a lying dog-faced pony soldier.” pic.twitter.com/3uxOAu0Ues
According to Yahoo News‘ Sharon Weinberger, Biden has previously used the phrase – from a John Wayne movie – to disparage Republicans.
So, apparently Biden has used this “dog-faced pony soldier” phrase before, but about Republicans. It’s allegedly from a film where an Indian chief tells John Wayne: “This is a lying dog-faced pony soldier.”
However, haven’t been able to verify that line. Any John Wayne experts?
Sunday’s outburst is the latest in a string of Bidenisms – which have included calling a voter fat and challenging him to a push-up contest or an IQ test.
Joe Biden called Elizabeth Warren an elitist, but here he is insulting a man’s weight (“sedentary” and “look, fat”) and challenging him to an IQ test. Who’s the real elitist here? There’s no way the media would let Liz get away with something like this (she also wouldn’t do it!) pic.twitter.com/QxvP643Cjt
Morgan Stanley: "Bulls Are Still In Charge… But Is it Time To Think About The Other Side Of The Story"
Authored by Michael Wilson, chief US equity strategist at Morgan Stanley
Heading into 2020, sentiment was at a high. In fact, based on data we track, investors hadn’t collectively been that bullish since January 2018, right after the biggest tax cut for US corporations and individuals in over 30 years.
In my view, the drivers of bullishness at the end of 2019 were more about fears dissipating and extraordinary liquidity than general excitement about growth acceleration like there was two years ago. Specifically, concerns about an extended trade dispute with China, unresolved Brexit negotiations and slowing global growth all abated. These fears peaked in the summer/fall and by the end of 2019 equity markets were overbought and fearless once more.
While it’s often impossible to identify the catalyst for an overbought market to correct in advance, it’s easy in hindsight. In this case, the coronavirus provided a big enough scare for the markets to experience their largest correction since early October. However, looking at a chart of the S&P 500 or the Nasdaq, one could say, “What correction?” The fact that we only sold off a paltry 3.5% on valid growth concerns suggests that the buy-the-dip mentality and the liquidity-driven bull market are very much in charge. This impressive resilience makes our 1H20 bull case target of 3500 look more likely while 3100 provides support.
Besides liquidity, the other reason why the pullback may have been so shallow is that, under the surface, the correction was much more substantial, with many stocks and assets off more than 10%. Anything sensitive to the global economy, especially China, corrected sharply, while defensively oriented assets and safe havens soared. This makes sense, but we’re coming off several years when cyclicals have already underperformed defensives by a wide margin, so cyclical assets are now discounting a pretty bad outcome. What’s more, with volatility recently touching record lows, this move felt bigger than it was simply because we hadn’t see one in a while. In short, the correction was significant in the hardest-hit assets, leaving sentiment about the growth acceleration quite modest and pushing investors even further into large-cap, high-quality, defensive growth assets like the S&P 500.
At this point, the low growth, low interest rate environment we’ve been in has created tremendous dispersion in the markets between the winners and losers. Three trades in particular have received the most attention:
large over small,
defensives over cyclicals, and
growth over value.
Most investors have figured this out, which is why these trades have worked, but now they’re crowded, and the latest growth scare has taken these trends to new extremes. Is it time to think about the other side of the story?
Our economics team believes that the coronavirus will delay the global recovery but won’t derail it. If that’s right, these unloved parts of the market may finally be ready to outperform in a more sustainable fashion. After the recent correction, such stocks initially traded very strongly, with one of the largest factor reversal days on Wednesday toward cyclical value and small caps, but that quickly faded later in the week. Over the past few years, there have been numerous false starts toward a pro-cyclical, small-cap rotation. Since June 2018, we have fought the urge to trade these short-lived rallies and recommend cyclicals or small-caps, but we have to admit we’re intrigued by this latest correction and the evidence suggesting that the global economy could snap back quickly once the economic headwinds from the coronavirus fade.
Interest rates, commodity prices and USD have been our beacons for cyclicals and small-caps, and each of them still appears unconvinced that growth is going to turn up, at least immediately. While the recovery may not be derailed, the delay is probably enough to keep the three trends in place for now while high-quality indices like the S&P 500 continue to be supported by liquidity and near record-low interest rates along with the view that global growth is good enough to weather this latest threat.
Bottom line, the liquidity-driven bull market is intact but it’s too early to bet big on new trends in cyclical value or small-caps.
Privacy & Cookies: This site uses cookies. By continuing to use this website, you agree to their use.
To find out more, including how to control cookies, see here:
Cookie Policy
Saving...![<!–[if IE 9]><![endif]–>](/s3/files/inline-images/cuts%20budget%20debt%20load.png?itok=cExetHTV){kind=link}