- What No "V"? World Bank Forecasts "Subdued" Recovery In Global Economy In 2021
What No “V”? World Bank Forecasts “Subdued” Recovery In Global Economy In 2021
Tyler Durden
Wed, 06/10/2020 – 02:45The World Bank has just released its new “Global Economic Prospects” report, describing how the COVID-19 pandemic has unleashed a “devastating blow” on the global economy — shredding all hopes that a V-shaped recovery will be seen this year.
The report goes on to say the global economy will contract for the first time since World War II and emerging market economies will shrink for the first time in six decades — the result of the global economic downturn is between 70 to 100 million people will be thrown into instant poverty.
The report investigates the depth and breadth of the economic impacts triggered by worldwide virus lockdowns in the first half of 2020, along with the socio-economic consequences thereafter. We make sense of this in the piece titled “Global Instability, Soaring Deficits And Civil Disobedience: Are We Back In The 1960s, And What Happens Next?.”
It said the 2020 baseline forecast for Global GDP would be a contraction of 5.2% — the deepest global recession in eight decades despite unprecedented monetary and fiscal policy by central banks and governments. Emerging markets will shrink by at least 2.5%, the report said, adding that it will be the worst performance for the data since the early 1960s.
The virus-induced recession is the first since 1870 to be triggered solely by a pandemic. The speed and depth at which it hit developed and emerging economies suggest a sluggish recovery will be seen in 2020, with low probabilities of a V-shaped recovery this year. Additional rounds of stimulus to restart the global economy will need to be seen.
“While a global recovery is envisioned in 2021, it is likely to be subdued,” the World Bank said.
The World Bank expects developed economies will contract by 7%, led by a 9.1% decline in growth for Europe this year. Breaking down the numbers, the US is expected to contract by 6.1% — while China could post a 1% expansion.
The global lender proposed two alternative scenarios. The first is a COVID-19 second wave that triggers another round of travel restrictions that would result in the worldwide economy plunging by 8% this year. If the virus can be controlled and reopenings are continued through the back half of the year, the contraction would be around 4% — still, this figure is twice the depth at which it was during the recession a decade ago.
“The global recession would be deeper if bringing the pandemic under control took longer than expected, or if financial stress triggered cascading defaults,” the World Bank said.
As for the socio-economic impacts, the decline may push 70-100 million people into extreme poverty – the economic scarring of today’s downturn will be long-lasting with a new era of high unemployment, low growth, and breakdowns in world trade and supply linkages.
Read: “Hopes Of ‘V-Shaped’ Recovery Sink As World Trade Refuses To Rebound”
The World Bank’s latest report paints a “grave near-term outlook” — and does not support a V-shaped recovery for this year.
But-but-but — equity futures believe in the V-shaped recovery!
- Escobar: A Pipelineistan Fable For Our Times
Escobar: A Pipelineistan Fable For Our Times
Tyler Durden
Wed, 06/10/2020 – 02:00Authored by Pepe Escobar via The Asia Times,
Ukraine was supposed to prevent Russia from deepening energy ties with Germany; it didn’t work out that way…
Once upon a time in Pipelineistan, tales of woe were the norm. Shattered dreams littered the chessboard – from IPI vs. TAPI in the AfPak realm to the neck-twisting Nabucco opera in Europe.
In sharp contrast, whenever China entered the picture, successful completion prevailed. Beijing financed a gas pipeline from Turkmenistan to Xinjiang, finished in 2009, and will profit from two spectacular Power of Siberia deals with Russia.
And then there’s Ukraine. Maidan was a project of the Barack Obama administration, featuring a sterling cast led by POTUS, Hillary Clinton, Joe Biden, John McCain and last but not least, prime Kiev cookie distributor Victoria “F**k the EU” Nuland.
Ukraine was also supposed to prevent Russia from deepening energy ties with Germany, as well as other European destinations.
Well, it did not exactly play like that. Nord Stream was already operational. South Stream was Gazprom’s project to southeast Europe. Relentless pressure by the Obama administration derailed it. Yet that only worked to enable a resurrection: the already completed TurkStream, with gas starting to flow in January 2020.
The battlefield then changed to Nord Stream 2. This time relentless Donald Trump administration pressure did not derail it. On the contrary: it will be completed by the end of 2020.
Richard Grennel, the US ambassador to Germany, branded a “superstar” by President Trump, was furious. True to script, he threatened Nordstream 2 partners – ENGIE, OMV, Royal Dutch Shell, Uniper, and Wintershall – with “new sanctions.”
Worse: he stressed that Germany “must stop feeding the beast at a time when it does not pay enough to NATO.”
“Feeding the beast” is not exactly subtle code for energy trade with Russia.
Peter Altmaier, German minister of economic affairs and energy, was not impressed. Berlin does not recognize any legality in extra-territorial sanctions.
Grennel, on top of it, is not exactly popular in Berlin. Diplomats popped the champagne when they knew he was going back home to become the head of US national intelligence.
Trump administration sanctions delayed Nordstream 2 for around one year, at best. What really matters is that in this interval Kiev had to sign a gas transit deal with Gazprom. What no one is talking about is that by 2025 no Russian gas will be transiting across Ukraine towards Europe.
So the whole Maidan project was in fact useless.
It’s a running joke in Brussels that the EU never had and will never have a unified energy policy towards Russia. The EU came up with a gas directive to force the ownership of Nord Stream 2 to be separated from the gas flowing through the pipeline. German courts applied their own “nein.”
Nord Stream 2 is a serious matter of national energy security for Germany. And that is enough to trump whatever Brussels may concoct.
And don’t forget Siberia
The moral of this fable is that now two key Pipelineistan nodes – Turk Stream and Nord Stream 2 – are established as umbilical steel cords linking Russia with two NATO allies.
And true to proverbial win-win scripts, now it’s also time for China to look into solidifying its European relations.
Last week, German chancellor Angela Merkel and Chinese premier Li Keqiang had a video conference to discuss Covid-19 and China-EU economic policy.
That was a day after Merkel and President Xi had spoken, when they agreed that the China-EU summit in Leipzig on September 14 would have to be postponed.
This summit should be the climax of the German presidency of the EU, which starts on July 1. That’s when Germany would be able to present a unified policy towards China, uniting in theory the 27 EU members and not only the 17+1 from Central Europe and the Balkans – including 11 EU members – that already have a privileged relationship with Beijing and are on board for the Belt and Road Initiative.
In contrast with the Trump administration, Merkel does privilege a clear, comprehensive trade partnership with China – way beyond a mere photo op summit. Berlin is way more geoeconomically sophisticated than the vague “engagement and exigence” Paris approach.
Merkel as well as Xi are fully aware of the imminent fragmentation of the world economy post-Lockdown. Yet as much as Beijing is ready to abandon the global circulation strategy from which it has handsomely profited for the past two decades, the emphasis is also on refining very close trade relations with Europe.
Ray McGovern has concisely detailed the current state of US-Russia relations. The heart of the whole matter, from Moscow’s point of view, was summarized by Deputy Foreign Minister Sergei Ryabkov, an extremely able diplomat:
“We don’t believe the US in its current shape is a counterpart that is reliable, so we have no confidence, no trust whatsoever. So our own calculations and conclusions are less related to what America is doing… We cherish our close and friendly relations with China. We do regard this as a comprehensive strategic partnership in different areas, and we intend to develop it further.”
It’s all here. Russia-China “comprehensive strategic partnership” steadily advancing. Including “Power of Siberia” Pipelineistan. Plus Pipelineistan linking two key NATO allies. Sanctions? What sanctions?
- Paul Craig Roberts Asks "Can We Survive Our Collective Stupidity?"
Paul Craig Roberts Asks “Can We Survive Our Collective Stupidity?”
Tyler Durden
Wed, 06/10/2020 – 00:05Authored by Paul Craig Roberts,
I have come to the conclusion that collectively Americans are mentally and emotionally stupid. On any given day there is endless evidence that this is the case.
Just a few selections from news of the last couple of days should suffice to establish the point.
Instead of reforming police training as a rational response to George Floyd’s death from an aggressive restraint technique, the Minneapolis city council voted to disband the Minneapolis police. Council woman Lisa Bender responded to a citizen’s question what she is supposed to do if she faces a threat in her home and there are no police to call:
“Yes, I hear that loud and clear from a lot of my neighbors. And I know — and myself, too, and I know that that comes from a place of privilege.”
In other words, the Minneapolis citizen’s concern is not legitimate and merely reflects her privileged assumption that she is entitled to protection by police. The valid concern is to protect blacks from the police by disbanding the police.
Kristina Roth of Amnesty International wrote to me in a fundraiser that “Police must stop killing black people.” What about white people, Kristina? White lives matter, too. The police shoot to death far more white people every year than black people. Shouldn’t Kristina be demanding that “police must stop killing people?” Why does Kristina blame racism instead of police training? Kristina needs to read and reflect upon this.
The top editor of the Philadelphia Inquirer had to resign because of the headline on a reporter’s article. The article was very sympathic to the black rioters but didn’t quite see the point of blacks destroying historic buildings in Philadelphia because of what happened to George Floyd in Minneapolis. The editor was done in by the article’s headline: “Buildings Matter, Too.” This incensed the woke morons, and despite his groveling apology the editor was removed . So much for “white privilege.” White newspaper editors cannot even exercise freedom of speech in the choice of headlines.
Not even editors at the New York Times, which grovels at the feet of blacks and self-righteous woke, can survive their exercise of freedom of the press. The opinion editor and his deputy had to resign for publishing Senator Tom Cotton’s call to deploy the military to protect people and property from the rioters and looters. I am confident that the NY Times published Sen. Cotton’s article with the intention of damning Cotton for not being more sympathetic to black looters. But the woke creatures and the NY Times publisher A.G.Sulzberger removed the editors because of “the pain they inflicted.”
Pain inflicted on who? The pain inflicted on owners of businesses, buildings, and cars destroyed by rioters using violence to express their disapproval of violence? No. As Lisa Bender put it, these concerns don’t matter as they come “from a place of privilege.” Only the pain of those privileged to riot and loot counts.
As kids we used to say, “sticks and stones might break my bones, but words will never hurt me.” Today for the woke weaklings the wrong word is like a nuclear weapon. They collapse in tears and recriminations. NY Times Staffers claimed that by publishing Sen. Cotton’s article, the opinion editor had put their lives in danger by not validating looting and rioting as a valid exercise of free speech. Somehow it did not occur to Sulzberger that the protesters must not be so innocent if NY Times staffers are in fear of their lives because of a few words from a US Senator.
JK Rowling is in trouble again from the transgender freaks who reject the word “woman” as transphobic. Rowling took exception to the term “people who menstruate.” and caused “unimaginable pain” by remarking that there used to be a word for “people who menstruate.”
A professor of criminology at the University of North Carolina has been denounced by the university administration for “vile and inexcusable comments,” such as “Don’t shut down the universities; shut down non-essential majors like women’s studies.” The UNC administration says “we are very carefully and assertively reviewing our options in terms of how to proceed.” The hypocritical administration went on to say “Hateful, hurtful language aimed at degrading others is contrary to our university values and our commitment to an environment of respect and dignity. Its appearance on any platform, including the personal platforms of anyone affiliated with UNCW, is absolutely reprehensible.” What nonsense! Everyday on the UNC campus black studies professors teach students that white people are racists and slavers, and women’s studies professors demonize men as misogynists and rapists. The hypocrites that comprise university administrations never do anything about this “reprehensible, hateful, and hurtful language” aimed at white people and at men.
A retired US Navy captain had to resign from the US Naval Academy Alumni Association board after a private conversation with his wife was accidentally streamed on Facebook. The captain used the n-word and said that white men “can’t say anything.” His wife complained of Chinese who “steal all of our intellectual property.” The couple are mortified and deeply sorry to have spoken in derogatory terms “about our fellow man,” a regret that black rioters and intellectual property thiefs do not reciprocate. The alunmi association said that these private comments are “not consistent with our leadership mission.” The couple have committed themselves to “using this experience as an opportunity to grow, listen, learn, and reflect . . . and being better people.”
The groveling of Sulzberger at the NY Times, the groveling at the Philadelphia Inquirer, the groveling by the Minneapolis city council and by submissive police officers will only encourage the black violence that decades of being taught to hate white people has unleashed. As I have said so many times, a diverse, multicultural society cannot be built on hatred. If blacks today had a real leader like Martin Luther King, Jr., that leader would be protesting police violence against people irrespective of race. Such a protest would be a unifying act instead of a divisive one. People such as myself could again see hope for American society.
Perhaps women could also find a leader, and men and women could get back together in loving, mutually supportive relationships. When I read that feminists have created men who prefer plastic “sex dolls” to a flesh and blood woman with emotions and a brain, I put “#Me/Too” in the category of bioweapon. The body builder who is marrying a sex doll might be on a public relations trip to boost his following, but his “marriage” to a piece of plastic is credible only because relations between men and women have been so badly damaged by feminists that it is believable that he prefers a sex doll to a real woman. According to bestiality advocates, some women prefer their dog to a man.
Western civilization is collapsing because allegations from the least credible sources carry more weight than facts. Emotions have displaced facts as the basis for understanding. Emotion routinely shouts down facts. It has become commonplace in universities for distinguished authorities to be shut down because the facts are unacceptable to the ignorant woke students, backed up by a roster of administrative thought police.
Universities have abandoned their mission of searching for truth. They have become propaganda ministries that spew the acids that eat away foundations of civilization.
In Western Civilization today, the best way to destroy yourself is to stand up for truth. I am getting tired of it as support for the defense of truth is declining away.
There is a lesson for the warmonger neoconservatives in the extraordinary weakness that is now the core of Western Civilization, a civilization that is a discredited concept in every American university and is being damned again by the NY Times’ 1619 Project. It is hilarious that neoconservatives proclaimed a people as divided as the US, with the majority white population on the defensive, to be an exceptional and indispensable people.
The US armed forces are a hodgepod of men, women, lesbians, homosexuals, a racial medley, and every element in it has been instructed by Identity Politics to hate and distrust the other. Armies devoid of the homogeneity that gives unity are useless. Only a fool would put an American or any European army against Russia and China. What will be our fate if the aggressive bombast that the neoconservatives and fellow travelers such as Liz Cheney keep pumping out of Washington results in concerted Russian/Chinese action against the threat that the West is determined to portray itself to be?
The hope for humanity is that the Russians and Chinese remain patient as the West continues its collapse under the weight of its own self-hate.
- Visualizing Layoffs At Prominent Startups Triggered By COVID-19
Visualizing Layoffs At Prominent Startups Triggered By COVID-19
Tyler Durden
Tue, 06/09/2020 – 23:45As the pandemic reverberates through almost every industry imaginable, tech startups are also feeling the pain.
Since mid-March, Visual Capitalist’s Dorothy Neufeld notes that countless startups and unicorns have undergone layoffs.
Today’s infographic pulls data from Layoffs.fyi, and navigates the cascading layoffs across 30 of the most recognizable startups in America. Each of the companies have slashed over 250 employees between March 11 and May 26, 2020—capturing a snapshot of the continuing fallout of COVID-19.
Silicon Valley Takes a Hit
Unsurprisingly, many of the hardest hit startups are related to the travel and mobility industry.
Closing 45 offices, Uber has laid off 6,700 employees since mid-March. Uber CEO Dara Khosrowshahi, who was granted a $45M earnings package in 2018, announced he will also waive his $1M base salary for the remainder of the year.
Meanwhile, as room bookings dropped by over 40% across several countries, Airbnb laid off a quarter of its workforce. The tech darling is anticipating a $2.4B revenue shortfall in 2020.
Like many other big names—including Lyft, Uber, and WeWork—Airbnb is struggling to achieve profitability. In the first nine months of 2019, it lost $322M at the height of the market cycle.
Until 2021, gig-economy revenues are projected to drop by at least 30%.
International Startups Struggling
Startups in the U.S. aren’t the only ones scrambling to conserve cash and cut costs.
Brazil-based unicorn Stone has let go of 20% of its workforce. The rapidly growing digital payments company includes Warren Buffett as a major stakeholder, holding an 8% share as of March 2020.
At the same time, India-based ride-hailing Ola has witnessed revenue declines of 95% since mid-March. It laid off 1,400 employees as bookings drastically declined.
Similarly, Uber India has rivaled Ola in dominance across India’s $10B ride-hailing market since launching three years after Ola, in 2013. Now, almost 25% of the Uber India workforce have been laid off.
Of course, these reports do not fully take into account the growing impact of COVID-19, but help paint a picture as the cracks emerge.
Pandemic-Proof?
While the job market remains murky, what startups are looking to hire?
Coursera, an online education startup, listed 60 openings in May. By the end of the year, the company plans to hire 250 additional staff. Within the peak of widespread global lockdowns, the platform attracted 10M new users.
Meanwhile, Canva, an Australia-based graphic design unicorn, is seeking to fill 100 positions worldwide. In partnership with Google for Education, Canva offers project-based learning tools designed for classrooms, in addition to free graphic design resources.
At the same time, tech heavyweights Facebook and Amazon reported openings. Booming startups such as Plaid, Zoom, and Pinterest are also listing new positions as shifting consumer demand continues to shape unpredictable and historic hiring markets.
- Yes, You Can Be Against 'Police Brutality' & 'Looting And Rioting' At The Same Time
Yes, You Can Be Against ‘Police Brutality’ & ‘Looting And Rioting’ At The Same Time
Tyler Durden
Tue, 06/09/2020 – 23:25Authored by Mac Slavo via SHTFplan.com,
It is possible to condemn all violence. Just because someone says they don’t support the looting and rioting, does not mean they support police brutality. Just because someone says that the police shouldn’t kill people with qualified immunity, doesn’t mean they support looting and rioting.
The mainstream media and those who still are stuck in the left/right paradigm want you to choose a side. Police brutality, or looting. It is possible to side with neither at the same time because they are both wrong. What a surprise! They need you to choose to stay divided instead of standing up together against all violence and all shows of violence.
“The state and its aggression, and the people the loot innocent businesses are not justified in their actions. It doesn’t even mean their both equal, it just means they’re both wrong and it’s easy to speak about both. It is a false choice, a false dichotomy to suggest otherwise,” says Eric July.
“Anybody that doesn’t have a brain the size of a coronavirus can actually hold two positions at the same time.”
“People only see what the hell they wanna see,” said July in his recent video.
“If you can’t properly identify what the issue is, right, you look at the symptom…and you have this view of what the symptom is, you diagnose it completely incorrectly. And because you diagnose it completely incorrectly, you can’t actually come to a solution.”
“What’s happening here…is you haven’t been paying attention,” July adds. Police brutality in all forms is wrong. Violence committed against non-violent people is wrong no matter what kind of uniform you have on. It’s morally reprehensible and should not be tolerated. The same can go for the looters and rioters. It’s wrong to destroy businesses and harm innocent people who have done nothing wrong. It’s the same position.
But it gets more sticky for those who have chosen sides – either side. There’s a solution to the looting and rioting, and we’ve seen it first hand. It wasn’t the police who protected a town in Idaho from violent thugs:
People are willing to stand up and protect each other against those who are committing violence and crimes against other small private businesses. But we aren’t standing together against the militarized police who brutalize people daily, not just when there are looting and rioting. Why do they get a pass? The cognitive dissonance by so many is hardly an excuse anymore. We all know committing acts of violence against non-violent people is wrong. It’s wrong when police do it. It’s wrong when the militaries of the globe do it, and it’s wrong when looters do it.
Just hold a moral position. That’s it. If you start to allow some a pass on violence because of badges, don’t be surprised when it’s you or your guns they come for next, because that’s the next step in all of this. Martial law to bring in a New World Order and your total enslavement.
* * *
Additionally, Brandon Smith, Founder of Alt-Market.com, noted that many conservatives and even police supported the initial protests after the death of George Floyd. The problems started to occur when those protests were hijacked by communistic social justice groups like Antifa and Black Lives Matter, and they turned the narrative into one of “systemic racism” and “white supremacy” instead of abuse of power against all people. My next article will examine this issue in detail, but it is important to understand that as long as the protests are being controlled by establishment gatekeepers using it for their own ends, conservatives are unlikely to support them. The best option is for liberty minded people to defend their own communities against ALL trespasses, whether it be violent leftist looters, or even a totalitarian government. A simple and quiet display of force can go a long way in keeping the peace…
- Most Voters Think The US Is Spiraling Out Of Control
Most Voters Think The US Is Spiraling Out Of Control
Tyler Durden
Tue, 06/09/2020 – 23:05It has been a turbulent year for the United States…
As Statista’s Niall McCarthy notes, 2020 kicked off with an Iranian ballistic missile attack on U.S. forces in Iraq in response to the killing of Qasem Soleimani.
That was swiftly followed by the coronavirus pandemic which has resulted in the deaths of more than 100,000 Americans while the number infected is approaching two million.
Over the past few days, people across the country took to the streets en masse to protest the killing of George Lloyd by police officers in Minneapolis while President Trump threatened to deploy the military to quell the unrest.
Given the events of the past few weeks, it hardly comes as a surprise to hear that most Americans are pessimistic about the state of their country.
You will find more infographics at Statista
A new Wall Street Journal/NBC News poll has now found that 80 percent of U.S. voters think the situation in the country is “out of control” with just 15 percent saying it remains “under control” and three percent feeling “it is some of both”.
- Kerik: If Black Lives Really Mattered, BLM, Antifa Would Be Marching All Over Chicago
Kerik: If Black Lives Really Mattered, BLM, Antifa Would Be Marching All Over Chicago
Tyler Durden
Tue, 06/09/2020 – 22:45Authored by Jennie Taer via SaraACarter.com,
Former New York Police Department Commissioner Bernard Kerik told “The Sara Carter Show” Monday that if the Black Lives Matter organization and left-wing anarchist group Antifa really believed that black lives matter, ‘they would be marching all over Chicago.’
Moreover, Kerik denied a ‘systematic’ police brutality problem, saying, however, that there is a ‘systematic’ problem in Chicago, where there’s ceaseless violence on the streets.
“But that [police brutality] is not systematic what is systematic is last week last weekend in Chicago you at 23 people killed in 48 hours,” Kerik told Carter.
“And this week in Chicago over the weekend in twelve hours in 24 hours. Yes, 19 dead. That is systematic because it happens every single weekend. And if black lives really mattered to the Black Lives Matter group in Antifa they’d be marching all over Chicago. Right.”
Chicago saw its deadliest day in decades during the last weekend of May, with 18 murders, the Chicago Sun-Times reported. And the violence hasn’t stopped.
Concluding with a message to President Donald Trump, Kerik explained that there must “be a significant messaging program to get people to understand every one of these cities we’re talking about every single one. Run by Democrats. They’ve been run by Democrats for decades and they get up there and they took all this garbage and all this junk about racism and systematic and all this stuff.”
He added, “The reality is they’ve been in charge of what’s happened in those communities. The highest violence the highest the murder the highest poverty the lowest economic income the lowest real estate values they’ve been in charge. Eventually, I think communities like this the people have to realize if you want change, if you want real change then you’ve got to get different leadership in those positions. That’s going to create safety and security in those communities and let people grow let them flourish.”
“Nobody’s going to put a flagship Apple store in the South Side of Chicago. It’s not happening. You’re not going to have great schools in the South Side of Chicago. It’s Not happening. Teachers are afraid to go to work there.”
The political talk, Kerik says, needs to end. “I think the president if he does anything he’s going to get the message to the American people especially this president because he’s one guy that whatever he says he’s going to do it does it sometimes overly transparent ever he says he’s going to do.”
“I’ve known him for a long time. I’ve known him since 1996 and I could tell you before he was president since he’s president nobody can say that he doesn’t do what he says he’s going to do. And he can help this country if the Democrats would get out of the way stop impeding what he’s trying to do and try to help themselves.”
- Whataver China's Doing Isn't Working: CPI, PPI Miss, Tumble To Multi-Year Lows
Whataver China’s Doing Isn’t Working: CPI, PPI Miss, Tumble To Multi-Year Lows
Tyler Durden
Tue, 06/09/2020 – 22:33Whatever China is doing to stimulate its economy, it isn’t working.
For the second month in a row China’s CPI and PPI missed badly, with CPI sliding from 3.3% Y/Y yo just 2.4%, below the expected 2.7%, and the lowest since March of 2019. PPI meanwhile slumped from -3.3% to -3.7%, the lowest gate inflation since early 2016, and a testament to just how much pricing power Chinese companies are losing.
While Chinese 10Y TSY yields initially dipped in kneejerk response, they have since rebounded to up on the day, rising to 2.824%, and close the highest level since February. In recent weeks Chinese yields have been on a tear as it became clear that the PBOC will not pursue a wholesale rate cut despite vowing to do just that during last month’s People’s Congress.
Bizarrely, Chinese stocks are actually lower on the news – if only for the time being – a shocking and logical response in a world where everything has long since gone upside down.
- Galbraith: 'Disillusion' Is America's One Big Growth Sector Right Now
Galbraith: ‘Disillusion’ Is America’s One Big Growth Sector Right Now
Tyler Durden
Tue, 06/09/2020 – 22:05Authored by James Galbraith via Project Syndicate,
The Illusion of a Rapid US Recovery
The United States has built an economy based on global demand for advanced goods, consumer demand for frills, and ever-growing household and business debts. This economy was in many ways prosperous, and it provided jobs and incomes to many millions. Yet it was a house of cards, and COVID-19 has blown it down.
As protests roil the United States, the country’s center-left economists gaze brightly into their crystal balls. Harvard’s Jason Furman, formerly chair of US President Barack Obama’s Council of Economic Advisers, has warned Democrats – eager to defeat President Donald Trump in the November election – that “the best economic data … in the history of this country” will emerge just before voters head to the polls. Paul Krugman is likewise predicting a “fast recovery.” The non-partisan Congressional Budget Office agrees. The stock market seems equally optimistic.
The arithmetic behind this thinking is simple. The CBO expects real GDP to shrink by 12% in the second quarter, and by 40% in annual terms. But it forecasts a third-quarter rebound of 5.4% – resulting in spectacular annual growth of 23.5%.
That is certainly possible: already in May, unemployment figures took a favorable turn, and it is looking like the second-quarter slump may not be as bad as projected. But, even if the CBO is right on both counts, GDP at election time would be seven percentage points below its first-quarter level, and unemployment would be above – possibly far above – 10%.
Let’s assume that the optimists are right about the third quarter.
What happens next? Will the economy continue merrily along, with incomes and jobs bouncing back? Or will it stay in depression, requiring a new revolution – or, more precisely, a new New Deal – to save it?
To assess this question, Furman, Krugman, and the CBO share a mental model. They regard the pandemic as an economic shock, like an earthquake or the 9/11 terrorist attacks. It is a disruption to a solid structure, a deviation from normal growth. To get America moving again, what is mainly needed is confidence, perhaps aided by stimulus. If consumers channel their pent-up demand into new spending, this “shock-stimulus” model dictates, then businesses will revive investment, and soon enough, all will be well once again.
This is how mainstream center-left economists and policymakers have thought about recessions and recoveries since at least the 1960s, when President John F. Kennedy and his successor, Lyndon B. Johnson, pushed through tax cuts. But it ignores three major changes in the US economy since then: globalization, the rise of services in consumption and employment, and the impact of personal and corporate debts.
In the 1960s, the US had a balanced economy that produced goods for both businesses and households, at all levels of technology, with a fairly small (and tightly regulated) financial sector. It produced largely for itself, importing mainly commodities.
Today, the US produces for the world, mainly advanced investment goods and services, in sectors such as aerospace, information technology, arms, oilfield services, and finance. And it imports far more consumer goods, such as clothing, electronics, cars, and car parts, than it did a half-century ago.
And whereas cars, televisions, and household appliances drove US consumer demand in the 1960s, a much larger share of domestic spending today goes (or went) to restaurants, bars, hotels, resorts, gyms, salons, coffee shops, and tattoo parlors, as well as college tuition and doctor’s visits. Tens of millions of Americans work in these sectors.
Finally, American household spending in the 1960s was powered by rising wages and growing home equity. But wages have been largely stagnant since at least 2000, and spending increases since 2010 were powered by rising personal and corporate debts. House values are now stagnant at best, and will likely fall in the months ahead.
Mainstream economics pays little attention to such structural questions. Instead, it assumes that business investment responds mostly to the consumer, whose spending is dictated equally by income and desire. The distinction between “essential” and “superfluous” does not exist. Debt burdens are largely ignored.
But demand for many US-made capital goods now depends on global conditions. Orders for new aircraft will not recover while half of all existing planes are grounded. At current prices, the global oil industry is not drilling new wells. Even at home, though existing construction projects may be completed, plans for new office towers or retail outlets won’t be launched soon. And as people commute less, cars will last longer, so demand for them (and gasoline) will suffer.
Faced with radical uncertainty, US consumers will save more and spend less. Even if the government replaces their lost incomes for a time, people know that stimulus is short term. What they do not know is when the next job offer – or layoff – will come along.
Moreover, people do distinguish between needs and wants. Americans need to eat, but they mostly don’t need to eat out. They don’t need to travel. Restaurant owners and airlines therefore have two problems: they can’t cover costs while their capacity is limited for public-health reasons, and demand would be down even if the coronavirus disappeared. This explains why many businesses are not reopening even though they legally can. Others are reopening, but fear they cannot hold out for long. And the many millions of workers in America’s vast services sector are realizing that their jobs are simply not essential.
Meanwhile, US household debts – rent, mortgage, and utility arrears, as well as interest on education and car loans – have continued to mount. True, stimulus checks have helped: defaults have so far been modest, and many landlords have been accommodating. But as people face long periods with lower incomes, they will continue to hoard funds to ensure that they can repay their fixed debts. As if all this were not enough, falling sales- and income-tax revenues are prompting US state and local governments to cut spending, compounding the loss of jobs and incomes.
America’s economic plight is structural. It is not simply the consequence of Trump’s incompetence or House Speaker Nancy Pelosi’s poor political strategy. It reflects systemic changes over 50 years that have created an economy based on global demand for advanced goods, consumer demand for frills, and ever-growing household and business debts. This economy was in many ways prosperous, and it provided jobs and incomes to many millions. Yet it was a house of cards, and COVID-19 has blown it down.
“Reopen America” is therefore an economic and political fantasy. Incumbent politicians crave a cheery growth rebound, and the depth of the collapse makes possible some attractive short-term numbers. But taking them seriously will merely set the stage for a new round of disillusion. As nationwide protests against systemic racism and police brutality show, disillusion is America’s one big growth sector right now.
- JonesTrading "At What Point Will Powell Realize He Has Broken The Market’s Pricing Mechanism?"
JonesTrading “At What Point Will Powell Realize He Has Broken The Market’s Pricing Mechanism?”
Tyler Durden
Tue, 06/09/2020 – 21:45After a decade of constant lamentation by stock market pundits that the world’s most artificial “bull market”, which after March 23 and “Unlimited QE” everyone finally admits was entirely the work of the Federal Reserve, did not have retail participation and so wasn’t a real bull market, well – we give you Robin Hood.
In the span of just a few weeks, the free retail platform has mutated from a trading venue nobody had heard of to the platform which hosts some of the world’s “best” traders. By which of course we mean millions of bored Millennials dumping their stimulus check into the stock market and hoping for a 100-bagger (and in many cases getting just that). But that’s not meant to slight the retail daytraders: after all, where else can hundreds of thousands of retail investors swarm bankrupt companies such as Hertz, Chesapeake and Whiting Petroleum, and send their absolutely worthless in any rational financial context stock price soaring, as they did in the past week.
As we summarized it this morning, “you know the euphoria gripping stock markets is off the charts when retail investors have now taken over the market, as we first posted three weeks ago in, “How Retail Investors Took Over The Stock Market” and as Bloomberg repeated today with “Everywhere You Look Under Surging Stocks Is Fervid Retail Buying.” And while there is nothing wrong with a little healthy speculation in a market in which the Fed has eliminated most – if not all – risk, when the frenzied daytrading mob sends the stock of bankrupt Hertz 10x higher on massive volume, pushing its market cap to just shy of $1 billion, it‘s becoming a problem for marketplace integrity. After all, everyone remembers the retail infatuation with cryptos in late 2017/early 2018 which pushed bitcoin to $20K only to see the crypto plunging, resulting in massive losses for retail investors.”
We then asked if Powell really wants to risk turning off another generation of retail investors from stocks when the latest melting-up asset bubble – which is far greater than either the dot com or the housing bubble – bursts with catastrophic consequences for middle class net worth?
We weren’t the only ones: SMBC Nikko analyst Masao Muraki wrote in a note overnight that “soaring risk asset prices (ie imbalances) have reached a point where the Fed may be forced into some kind of action.”
While not many, there are also others who likewise were wondering if it is truly the Fed’s intention to reflate a massive bubble which bursts and leaves millions of retail momentum chasers holding the bag, resulting in another generation of Americans who will never come close to the stock market again.
In a Bloomberg article recapping the insane Robin Hood action, namely the flood of retail investors into bankrupt companies…
According to website Robintrack, which uses Robinhood’s data to show trends in positioning but isn’t affiliated with it, individual investors on the app have been flocking to bankruptcy-protected companies in droves. (The site says it downloads popularity data each hour for every stock directly from Robinhood via a public application programming interface, or API. A Robinhood spokesperson declined to comment for this story.)
… something we have covered extensively here in the past week, one thing that stood out was the bevy of incredulous quotes by market veterans including this one from Peter Boockvar:
“It’s great that Vegas is open again, but who needs it when you have the stock market instead. After an incredible run since March, we now have clear froth in parts of the market. We know this level of speculation has coincided with a sharp increase in the activity of retail investors.”
Boockvar added the activity has been encouraged by a “zero rate” and “unlimited QE” environment. And to think of all the abuse we took for the past decade saying the Fed was all that mattered, and that Austrian economics trumps that Keynesian bullshit anyday.
But speaking of the Fed, the best quotes came from JonesTrading strategist Mike O’Rourke, who said called the action “Gluttonous Greed. The madness continues. The biggest surprise in today’s trading was that Tailored Brands’ shares actually sold off when it was reported the company was considering bankruptcy.”
But the punchline was the same one both Muraki and we asked earlier in the day: when will the Fed finally step in and gradually let the air out of this insane bubble it has created, or else push on until the inevitable outcome is the biggest market crash in history:
“In this tape, bankruptcies have become the flavor of the day. At what point will Jay Powell and his colleagues at the Federal Reserve realize they have broken the market’s pricing mechanism? The bankruptcies are only a small part of the story.”
We are due for an answer tomorrow when the FOMC announces its latest decision (which may or may not be the launch of Yield-Curve Control), although we doubt that the coward in charge of the Fed will do anything to derail the biggest and final bubble the he himself created and now is fully responsible for.
Which is why until the Fed has no choice and stocks do crash, we are going to get much more idiocy such as this: Robin Hood investors who heard about something called FANG stocks and instead of buying the 4 tech megacaps… ended up buying worthless Chinese real estate company FANGDD (ticker DUO), sending its stock price from $10 to $130 in four hours, and pushing its market cap just shy of $4 billion!
And then there is this: with stocks back at all time highs, CNBC actually had to explain to the new generation of trading gurus what a bankruptcy actually means.
We are near all time highs and CNBC is talking about this… pic.twitter.com/z04Cl70IQl
— Thomas Thornton (@TommyThornton) June 9, 2020
- Texas Hospitalizations Surge To Record High As Dr. Fauci Warns Pandemic "Far From Over": Live Updates
Texas Hospitalizations Surge To Record High As Dr. Fauci Warns Pandemic “Far From Over”: Live Updates
Tyler Durden
Tue, 06/09/2020 – 21:45Summary:
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Texas hospitalization hit 2,056 – a record high
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Dr. Fauci: US outbreak is “far from over”
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Ohio drivers tests to resume Friday
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Cali reports daily dip
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NJ abruptly lifts lockdown
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Global COVID-19 cases top 7 million
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Hospital visits spiked in Wuhan last fall, suggesting outbreak hit earlier than we realized
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Nearly half of US states are seeing a sustained rise in new COVID cases
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UK says students won’t return to school until the fall
* * *
Update (1745ET): Texas reported another record-breaking number of COVID-19 hospitalizations Tuesday (2,056) as the governor plans to reopen more businesses and double capacity.
That extends yesterday’s rise above the previous record of 1,888 on May 5.
The department’s new figures were released as Gov. Greg Abbott moves forward with a plan to open bars, restaurants, amusement parks and other businesses to 50% capacity.
* * *
Update (1635ET): We give the NYT a lot of credit: Even though none of its readers seem to care about the coronavirus anymore, it still went ahead and published this story about remarks made by Dr. Anthony Fauci (remember him?) during a (virtual) speech before the Biotechnology Innovation Organization during an event on Tuesday.
After insisting last week that a second wave of the virus isn’t a sure thing, Dr. Fauci warned that the coronavirus was the virus of his worst nightmares, and that he remains surprised by its capacity to spread around the world and dominate human society in the span of just four months (though recent research suggests the outbreak may have started earlier than previously believed).
“In a period of four months, it has devastated the whole world,” Dr. Fauci, director of the National Institute of Allergy and Infectious Diseases, said on Tuesday during a conference held by BIO, the Biotechnology Innovation Organization. “And it isn’t over yet.”
His discussion with a moderator was conducted remotely and recorded for presentation to conference participants. Although he had known that an outbreak like this could occur, one aspect has surprised him, he said, and that is “how rapidly it just took over the planet.”
Once again, the good doctor insisted that there’s still so much we don’t know about SARS-CoV-2, which he described as “complex” compared with HIV, a virus Dr. Fauci studied for decades.
But much is still unknown about the disease and how it attacks the body – research that Dr. Fauci described as “a work in progress.”
He said that he had spent much of his career studying H.I.V., and that the disease it causes is “really simple compared to what’s going on with Covid-19.”
The differences, he said, include Covid’s broad range of severity, from no symptoms at all to critical illness and death, with lung damage, intense immune responses and clotting disorders that have caused strokes even in young people, as well as a separate inflammatory syndrome causing severe illness in some children.
But don’t worry, because Dr. Fauci believes at least one of the hundreds of vaccines currently being researched will pan out.
Vaccines are widely regarded as the best hope of stopping or at least slowing the pandemic, and Dr. Fauci said he was “almost certain” that more than one would be successful. Several are already being tested in people, and at least one is expected to move into large, Phase 3 trials in July.
Marshaling more resources to stop the virus, especially in poor and/or predominantly minority communities, is essential, Dr. Fauci added.
Unfortunately, it doesn’t seem like too many Americans still care.
* * *
Update (1410ET): As the Ohio Bureau of Motor Vehicles prepares to resume driving tests on Friday, Gov. Mike DeWine is updating the public on the state’s response to the coronavirus in his latest daily briefing.
Driving tests will begin Friday and next Tuesday, though not at all DMV locations, but people need to make appointments online before going in for a test.
Meanwhile, California reported a drop in new cases statewide on Tuesday, though recent days have seen spikes in LA County and the Bay Area.
- CALIFORNIA COVID-19 CASES RISE 1.7% VS 7-DAY AVERAGE 2.2%
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Update (1310ET): As more Western and Southern state see coronavirus cases rise, numbers in the New York metropolitan area, once the biggest hotspot in the country, have continued to wane. The same people who were hysterically screaming at their neighbors to put on their masks are now out marching in crowds for racial equality, and in the midst of it all, New Jersey Gov Phil Murphy has abruptly lifted the state’s stay at home order.
Now, after allowing outdoor graduations to move forward and easing other restrictions, New Jersey Gov Phil Murphy has decided to lift his state’s stay-at-home order.
BREAKING: Today I’m signing an Executive Order LIFTING OUR STAY-AT-HOME ORDER.
Please continue to be responsible and safe. Wear face coverings and keep a social distance from others when out in public.
— Governor Phil Murphy (@GovMurphy) June 9, 2020
PUBLIC HEALTH CREATES ECONOMIC HEALTH.
We cannot move through Stage 2 and into Stage 3, and beyond, unless we continue to see our numbers trending downward.
We cannot become complacent or irresponsible. pic.twitter.com/wxumaHOOGq
— Governor Phil Murphy (@GovMurphy) June 9, 2020
Today’s EO also authorizes the opening of:
🤿Pools on June 22nd
☀️All outdoor recreational and entertainment businesses that were previously closed – with the exceptions of amusement parks, water parks, and arcades— Governor Phil Murphy (@GovMurphy) June 9, 2020
I anticipate being able to raise the limit on non-protest & non-religious activities to:
👥250 people on June 22nd
👥500 people on July 3rdSchool districts planning graduations should prepare for a 500-person limit to be in place by the time graduations can resume on July 6th.
— Governor Phil Murphy (@GovMurphy) June 9, 2020
BREAKING: I’m signing an EO RAISING THE LIMIT ON INDOOR AND OUTDOOR GATHERINGS.
Effective immediately:
👥Indoor gatherings will be permitted at whichever number is lower – 25% of a building’s capacity or 50 people total
👥Limit on outdoor gatherings will be raised to 100 people pic.twitter.com/07uRYvmR2K— Governor Phil Murphy (@GovMurphy) June 9, 2020
I anticipate being able to raise the limit on non-protest & non-religious activities to:
👥250 people on June 22nd
👥500 people on July 3rdSchool districts planning graduations should prepare for a 500-person limit to be in place by the time graduations can resume on July 6th.
— Governor Phil Murphy (@GovMurphy) June 9, 2020
We’ve seen these trends sustained over time, and across each region of our state. pic.twitter.com/nZ4PLtyqyd
— Governor Phil Murphy (@GovMurphy) June 9, 2020
LOOK: We’re still not out of the woods. We’re still near the top of some lists we don’t want to be atop of.
This is why we need you to continue practicing distancing. pic.twitter.com/iO63NaP2qZ
— Governor Phil Murphy (@GovMurphy) June 9, 2020
Sadly, we’ve lost another 91 members of our New Jersey family to #COVID19, bringing our statewide total to 12,303.
We can never forget those we’ve lost, and who will not be joining us on our road back. May they never be just a number. pic.twitter.com/IJWKoBVg5d
— Governor Phil Murphy (@GovMurphy) June 9, 2020
Watch the briefing live below:
Holding a COVID-19 briefing. WATCH: https://t.co/pARETlscCN
— Governor Phil Murphy (@GovMurphy) June 9, 2020
* * *
Last night, we shared the findings from a bombshell report which found that hospital foot traffic and COVID-19-related search terms surged in Wuhan and the surrounding area as early as October or November, suggesting that the virus might have already been spreading in Wuhan for months before China informed the WHO on New Year’s Eve about the “newly discovered” virus.
Beijing infamously withheld evidence of human-to-human transmission until later in January, when it finally alerted the international community, kicking off the global coronavirus crisis in earnest as the initial round of projections warned that millions could perish, setting off the global panic.
By that time, as we’ve reported in the past, China probably had enough of a head start to gobble up all of the PPE and other critical medical supplies in the world, which would help explain the baffling shortages that confronted American consumers during the first weeks of the outbreak, with some claiming that shortages of popular goods like cleaning supplies and toilet paper persist in some places, or regularly reoccur.
Adding even more confusion to the global conversation (not that anybody cares about the coronavirus anymore, now that the progressives who were hysterically decrying the risks of reopening are crowding together in the streets), a WHO scientist last night discussed new research suggesting asymptomatic carriers of the virus – previously believed to be a primary driver of the virus’s spread – actually aren’t all that dangerous. If these findings are confirmed, it would suggest that contact tracing has little value in the late stages of an outbreak, though it could be a game-changer during the early weeks, when successful containment remains possible.
With futures markets pointing toward a lower open in the US, the Washington Post warns that 14 states and Puerto Rico have seen their 7-day average for the number of new cases being reported climb to their highest levels since the outbreak began. Yesterday, we noted the WSJ story highlighting the finding that rural areas with large numbers of people living in the same houses saw outbreaks that were in many cases more severe than more densely populated areas, suggesting transmission between members of the same household remains the primary means of spread, which, if anything, suggests that markets and the general public is underestimating the potential of these outbreaks in more rural states.
Since the start of June, 14 states and Puerto Rico have recorded their highest-ever seven-day average of new coronavirus cases since the pandemic began, according to data tracked by The Washington Post: Alaska, Arizona, Arkansas, California, Florida, Kentucky, New Mexico, North Carolina, Mississippi, Oregon, South Carolina, Tennessee, Texas and Utah.
If the pandemic’s first wave burned through dense metro hubs such as New York City, Chicago and Detroit, the highest percentages of new cases are coming from places with much smaller populations: Lincoln County, Ore., an area of less than 50,000, has averaged 20 new daily cases; the Bear River Health District in northern Utah has averaged 78 new cases a day in the past week, most of them tied to an outbreak at a meat processing plant in the small town of Hyrum.
The increase of coronavirus cases in counties with fewer than 60,000 people is part of the trend of new infections surging across the rural United States. Health experts worry those areas, already short of resources before the pandemic, will struggle to track new cases with the infrastructure that remains.
The NYT’s coronavirus tracker tool offers a convenient illustration:
What’s more alarming: epidemiologists say any surge in cases tied to the protests likely has yet to emerge.
Yesterday, the number of confirmed COVID-19 cases surged past 7 million, after the death toll topped 400k over the weekend. Russia, Latin America and now India appear to be the newest hot spots, as cases have started to accelerate as Brazil and Mexico face a difficult reckoning.
Even the FT cheered on Tuesday as the UK reported its smallest excess-death total (a figure the paper has been using as a measure of the ‘total’ COVID-19 deaths) since the final week in March. Meanwhile, HMG has reportedly scrapped plans to return pupils to their classrooms before the beginning of the summer break.
The government is set to drop plans to fully reopen primary schools in England before the summer holiday, in a move welcomed by teachers’ unions that argued the return of all pupils would be unsafe. Education secretary Gavin Williamson is expected on Tuesday to announce that headteachers can choose whether or not to reopen to more year groups than currently outlined. Health Secretary Matt Hancock said during yesterday’s daily briefing that secondary schools in England likely wouldn’t reopen until September “at the earliest.”
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- Iran To Execute Alleged Spy Who Led CIA & Mossad To Soleimani
Iran To Execute Alleged Spy Who Led CIA & Mossad To Soleimani
Tyler Durden
Tue, 06/09/2020 – 21:45Iran announced Tuesday that a man it says spied on the slain Revolutionary Guards commander Qassem Soleiman on behalf of American and Israeli intelligence has been sentenced to death.
Iranian officials emphasized, however, that the alleged asset’s ‘passing information’ on Soleimani’s whereabouts in the past was not directly connected to the IRGC commander’s Jan. 3rd death by US drone strike in Baghdad. Yet it does strongly suggest US and Israeli intelligence were able to infiltrate circles close to Soleimani, likely a factor in his death.
“Mahmoud Mousavi-Majd, one of the spies for the CIA and the Mossad, has been sentenced to death… He had shared information about the whereabouts of martyr Soleimani with our enemies,” judiciary spokesman Gholamhossein Esmaili said on state TV.
Getty Images “He passed on security information to the Israeli and American intelligence agencies about Iran’s armed forces, particularly the Guards,” the official added, according to Reuters. The convicted and sentenced man’s execution is “expected soon” Esmaili said.
“All the legal proceedings in the case of this spy … had been carried out long before the martyrdom of Soleimani,” the statement underscored, describing his arrest in October 2018 after contact with foreign intelligence agencies was supposedly uncovered.
Over the past year Tehran has made multiple announcements of busting up spy networks being run by the Mossad and CIA, including claims last summer of detaining “17 spies working for the CIA” — some of which were sentenced to death, though few details are known.
Previously Iran said Western intelligence was trying to penetrate facilities related to its nuclear program. This week’s announced death sentence is perhaps the first time someone stood specifically charged with passing information related to the late Quds force leader Soleimani.
It reveals something interesting: that the Iranians are no doubt actively looking for spy networks which had involvement in tracking Gen. Soleimani, or may have helped US-Israeli intelligence with the assassination.
Recall that beginning two years ago Israeli defense and intelligence officials became increasingly vocal about putting a target on Soleimani’s back, essentially giving the ‘green light’ to taking him out if the opportunity presented itself.
However, Soleimani traveled as a diplomat or foreign dignitary, thus it didn’t appear he was overly cautious or expected the Americans to act so brazenly. Hence his entourage had passed through Baghdad International Airport essentially out in the open, which provided the opportunity for the Trump-ordered drone strike on a road leading out of the airport.
- Chinese Propaganda Outlet Paid Millions To Washington Post, Wall Street Journal
Chinese Propaganda Outlet Paid Millions To Washington Post, Wall Street Journal
Tyler Durden
Tue, 06/09/2020 – 21:25Authored by Zachary Stieber via The Epoch Times,
A Chinese propaganda outlet paid millions of dollars to The Washington Post and The Wall Street Journal to run advertisements made to look like news reports.
New documents filed with the U.S. Department of Justice show China Daily paid over $4.6 million to the Post and nearly $6 million to the Journal since November 2016.
China Daily, an English-language newspaper, is overseen by the Chinese Communist Party’s (CCP) Publicity Department, the governmental agency in charge of disseminating propaganda.
Over the past few years, it has spent millions running supplements – called “China Watch” – containing propaganda disguised as news, in major U.S. newspapers including the Journal, The New York Times, and the Post.
Scholars researching Chinese influence activities in the United States said in a 2018 report (pdf) that “it’s hard to tell that China Watch’s material is an ad.”
China Daily has in the past submitted financial information under the Foreign Agents Registration Act (FARA) but the new filing (pdf) is the first to include a breakdown of how much the propaganda outlet is paying American media outlets.
Inquiries sent to the Post and the Journal weren’t returned.
A paid insert of China Daily inside the Jan. 17, 2017 edition of the Wall Street Journal. (Benjamin Chasteen/The Epoch Times)
According to the FARA filing, China Daily paid to insert propaganda into The New York Times, Foreign Policy, The Des Moines Register, and CQ Roll Call.
China Daily spent just over $11 million in total on advertising in newspapers in the United States.
The newspaper registered as a foreign agent under FARA in 1983. That law requires registered foreign agents to provide the DOJ with copies of all propaganda “circulated among two or more persons.” It also requires registrants to submit to the department, twice a year, an itemized report of spending inside the United States.
China Daily is part of the Chinese regime’s global propaganda efforts, a campaign that the CCP has committed $6.6 billion to since 2009, according to a letter sent by dozens of U.S. lawmakers to the Department of Justice earlier this year. The regime has, according to FARA filings, spent $35 million on China Daily alone since 2017, not including the new filing.
The articles that run in American publications “serve as a cover for China’s atrocities, including its crimes against humanity in the Xinjiang region and its support for the crackdown in Hong Kong,” the lawmakers wrote.
Earlier this year, the state department designated China Daily, along with four other Chinese state-run media operating in the United States, as foreign missions over their role as propaganda organs of the CCP. It also slashed the number of Chinese staff allowed to work at the outlets’ U.S. offices.
- Virus Contact-Tracing For All – Singaporeans To Be Tracked By Gov't In Post-COVID World
Virus Contact-Tracing For All – Singaporeans To Be Tracked By Gov’t In Post-COVID World
Tyler Durden
Tue, 06/09/2020 – 21:05Singapore is on the cusp of rolling out a mandatory COVID-19 tracing program that will identify people who had come in contact with virus carriers. The program will distribute tiny microchips to all 5.7 million residents, in what will be the most extensive tracing program globally, reported Reuters.
The city-state, located in Southeast Asia, has already developed a tracing app for smartphones, called TraceToegether, to identify people who have interacted with virus carriers. The app was downloaded by more than 1.5 million residents but did not work well on iPhones since Bluetooth activity goes dormant when app runs in the background.
Singapore officials overseeing the tracing app had several discussions with Apple, but no resolutions were found.
Minister-in-charge of the Smart Nation Initiative Vivian Balakrishnan spoke with Parliament on Friday, gave members of the government update on the tracing program:
“Because TraceTogether does not work equally well across all smartphones, we have decided therefore, at this point, not to mandate the compulsory use of TraceTogether.
“We are developing and will soon roll out a portable wearable device that will … not depend on the possession of a smartphone.
“If this portable device works. We may then distribute it to everyone in Singapore … This will be more inclusive, and it will ensure that all of us will be protected,” Balakrishnan told Parliament.
Balakrishna said the pivot to wearables would mean residents will have to wear a tiny microchip at the end of lanyard or can be carried in pocket or bag. He expects it to be rolled out in the near term.
The technology behind the wearable was not discussed, and at what range the government can track people.
There are many privacy concerns about tracing devices. Especially when the government wants widespread use, it will have to make it mandatory. Other concerns are about who gets the tracking data, and it was said that the Singapore government would only collect data via the first app if a person becomes infected with COVID-19. There are many privacy concerns about contact tracing devices and how the government will use the data.
For instance, this week, the US government and law enforcement agencies are using contact tracing and big tech to identify rioters.
The war on COVID around the world has ushered in a massive surveillance state with weaponry that governments can deploy at any time: thermal imaging cameras, drones, contact tracing, biometric databases, etc.
No one is safe from government in a post-corona world.
- Ivanka Trump Falls Victim To "Cancel Culture"
Ivanka Trump Falls Victim To “Cancel Culture”
Tyler Durden
Tue, 06/09/2020 – 20:45Authored by Lacey Kestecher via Campus Reform,
On the same day that Wichita State University Tech announced that Ivanka Trump would be a guest speaker at its virtual commencement address, the university also canceled her speech. There was backlash from the university regarding the Trump administration and George Floyd’s death.
In a letter by WSU president Jay Goulden and WSU Tech president Sheree Utash, the two administrators announced their commencement speeches would be “refocused more centrally on students.” The virtual commencement, however, would not feature the president’s daughter and one of his top White House advisers.
In another letter, Utash addressed the reasoning for revoking Ivanka Trump’s commencement speech offer. Utash writes that “in light of the social justice issues brought forth by George Floyd’s death…the timing of the announcement was insensitive.”
She claims that “the college stands with those who fight injustice and advocate for social equity.”
Jennifer Ray, associate professor of photo media, had previously written a letter demanding that the university revoke Trump’s speaking invitation. It garnered the support of both students and staff but has since been deleted.
According to the Wichita Eagle, Ray claims that the university “sends the message that WSU Tech does not take diversity seriously” by inviting Ivanka Trump to be a guest speaker.
Ray wrote that the Trump “administration has come to signify the worst of our country, particularly in its recent actions toward those peacefully protesting against racist police brutality. This is not about politics and policy; some of the sharpest critics of President Trump’s actions come from prominent members of his own party.”
In response to her speech being canceled, Ivanka Trump took to Twitter to post her pre-recorded speech. In the tweet, she criticized “cancel culture” and said that universities “should be bastions of free speech.”
“Cancel culture and viewpoint discrimination are antithetical to academia. Listening to one another is important now more than ever!”
Our nation’s campuses should be bastions of free speech. Cancel culture and viewpoint discrimination are antithetical to academia.
Listening to one another is important now more than ever!https://t.co/VW6W8TIL9c
— Ivanka Trump (@IvankaTrump) June 5, 2020
https://platform.twitter.com/widgets.js
Here is the pre-recorded message:
- FBI Combing Through Social Media After People Openly Brag About Looting On Facebook
FBI Combing Through Social Media After People Openly Brag About Looting On Facebook
Tyler Durden
Tue, 06/09/2020 – 20:25Anyone logging into social media lately has likely noticed a seeming deluge of virtue signaling related to the ongoing Black Lives Matter and George Floyd protests. Often the same people who a mere days before were lecturing others to “stay home, save lives” amid the pandemic, have made a seamless switch to urging others to take to the streets in protest.
But a CBS Chicago affiliate has uncovered something truly new: people are now openly bragging about what they’ve looted from ravaged stores on Facebook over the past two weeks of BLM protests and riots. Apparently they’re even trying to sell the stolen goods.
“Selling looted goods on Facebook – CBS 2 found it’s happening right now, with several videos and photos sent our way,“ the CBS 2 report begins. “We sent the evidence to Chicago Police, and on Monday night, CBS 2’s Tara Molina looked into what will happen next – with the CPD and the FBI investigating.”
Livestreams & social media images showing looting in action flooded the internet over the past couples weeks. Getty Images Apparently the FBI is now involved, seeking to identify individuals involved in the mass looting.
And judging by the fact that many are outright boasting about it under their names on social media accounts, federal agents and local police may have an easy time of rounding them up and making arrests.
The report goes on to describe that in some cases, individuals in Chicago have had their ‘looting posts’ go viral:
One woman posted a Facebook Live video publicly on Sunday, May 31, and it got about 6,600 views and 41 shares. It showed looting at a strip mall and a van filled to the brim.
In a second public Facebook Live video, posted days later, a woman stands behind the videos and photos posted on her page – admitting out loud that she had looted.
She called out the people tagging police in the video, and defended her selling of the looted clothing and liquor – referring to it as stolen and saying it wasn’t the first time.
“I don’t give no (expletive) about this s**t. I upload stolen (expletive) 365 a year,” she is heard saying. “This ain’t (expletive) first time I did this.”
Likely the above person has already had a knock on the door, and may regret going viral with their post in the first place.
CBS 2 actually aired some of the incriminating Facebook Livestream images this week, seeking public help in the investigation.
The FBI has set up an anonymous “tips” form seeking information on individuals involved in rioting, violence, and mass theft nationwide:
The FBI and local law enforcement are now actively requesting photos and information from the public as they comb through posts and evidence of theft.
Shocking footage of brazen acts of mass theft flooded social media:
Good god, Chicago rioters looting off a MOVING train??? How the hell does this help George Floyd?
— Vienna Rose (@ViennaRosee) June 2, 2020
CBS 2 Chicago also noted that during its research into social media posts, people began blocking its staff over inquiries into crimes being committed.
With the FBI also now combing through thousands of posts, also seeking perpetrators of violence and rioting, there’s likely a lot of worried criminals now deleting posts as well.
But how long before the FBI is accused of “racism” for seeking to punish such glaring examples of crime in action?
- Our New Form Of Government: Rule By Twitter Mob
Our New Form Of Government: Rule By Twitter Mob
Tyler Durden
Tue, 06/09/2020 – 20:05Authored by Simon Black via SovereignMan.com,
In one of the starkest examples of how mob rule has taken over the Land of the Free, #defundthepolice is now rapidly moving from being just a hash tag, to becoming a reality.
9 out of the 12 members of the Minneapolis City Council (which is a veto-proof majority that can easily override the city’s boy mayor) pledged yesterday to completely dismantle its police department.
Their reasoning?
According to the city council president, being able to call the police “comes from a place of privilege,” and therefore must be abolished.
Actually, genius, being able to call the police comes from tax revenue… as in the money that voters pay in exchange for public services.
It’s not just Minneapolis. Across the country, cries to defund the police are growing… even though there’s no consensus about what the term even means.
For some, it means demilitarization of the police. For others, it means reducing police responsibilities, and reducing their funding accordingly. For others, it means abolishing the police altogether.
But even without a clear idea of what the concept means, the Twitter mob has already pressured politicians into taking action.
In Los Angeles, Mayor Eric Garcetti bowed to the pressure and pledged to slash $150 million from the police budget.
The New York City’s politburo, Comrade de Blasio, also promised to make substantial cuts to the NYPD budget.
Other local governments across the country, from San Francisco to Philadelphia to Baltimore, are considering similar moves.
And Congress has a stack of bills that it’s furiously moving forward.
This is all truly remarkable. There’s suppose to be system in place– I read about it somewhere, I think it’s called ‘democracy’ or something like that– where people vote for leaders who are supposed to represent their interests when making public policy decisions.
But this is mob rule, plain and simple. The Twitter mob decides public policy now. Not politicians. And certainly not voters.
And if you don’t grovel and capitulate to the mob, even when there’s no consensus on what the mob actually wants, then you get vilified by their rage.
It’s like #metoo all over again.
In late 2017, the actor Matt Damon, who committed an egregious crime of being born with a penis, told an interviewer that there’s a “spectrum” of sexual harassment:
“There’s a difference between, you know, patting someone on the butt, and rape… or child molestation. Both of those behaviors need to be confronted and eradicated without question, but they shouldn’t be conflated.”
Seems reasonable. Damon had an opinion… and his opinion was that molesting a child was worse than inappropriately patting a woman on the butt.
But reason didn’t matter to the Twitter mob, who immediately blasted Damon as a hetero-normative patriarchal misogynist. He later apologized, apparently for being logical, and groveled to the mob for forgiveness.
Today’s mob is far more hostile.
When Minneapolis’ boy mayor Jacob Frey rejected calls to abolish the police over the weekend, he was forced into a literal walk of shame when the marauding crowd screamed “GET THE F^#K OUT OF HERE” and waived their middle fingers in unison.
Frey left the stage and sullenly retreated through the crowd while the masses chanted, “Shame! Shame! Shame!”
Then there’s Drew Brees, one of the NFL’s all-time great quarterbacks whose entire career has been one of professionalism, integrity, and humble service.
Brees has given millions of dollars to his local community, including a $5 million pledge this year alone to help put food on the table for struggling families.
But Brees stated in an interview recently that he didn’t agree with anyone disrespecting the American flag– in reference to other NFL players who kneel during the national anthem to protest police brutality.
The anthem kneeling is a contentious issue for some. And it would have been reasonable for the other side to explain to Brees that their intent is to protest injustice, not disrespect the flag.
But instead the Twitter mob unleashed holy hell, calling Brees a “white supremacist” and even making death threats against his family.
And that’s what you get with a mob.
Civil discourse is an impossibility. You cannot have a respectful exchange of ideas or a discussion of values.
You can’t even say, “I completely agree that terrible injustice needs to change immediately. Let’s have a rational conversation about sensible, effective solutions.”
If you don’t grovel to the Twitter mob, even when there’s no consensus what the mob wants, you’re a white supremacist who deserves to be dead.
To be clear, I’m in strong support of the fundamental ideas behind these movements.
The culture of rape and sexual abuse that persisted for so long before #metoo needed to end. And the injustices that are front and center right now need to end. I imagine good people everywhere are in favor of human rights.
But I’m not writing about the movements, or social justice, or peaceful protests. This is about the mob mentality that has quickly taken over the US, and much of the world.
History shows that well-organized, peaceful protests can be very powerful… but also that nothing good ever comes from an angry, emotional mob.
Real progress can only take place when people are able to have calm, rational discussions about ideas and solutions.
The reality is that #defundthepolice is going to happen regardless. After Covid, most cities are completely bankrupt and will be forced to slash their budgets due to lack of tax revenue.
But #defundthepolice may be just the beginning of our new form of government– rule by Twitter mob.
* * *
And to continue learning how to ensure you thrive no matter what happens next in the world, I encourage you to download our free Perfect Plan B Guide.
- "The Search Is Over" – Treasure Chest Of Gold Found In Rocky Mountains
“The Search Is Over” – Treasure Chest Of Gold Found In Rocky Mountains
Tyler Durden
Tue, 06/09/2020 – 19:45A treasure chest full of gold worth over $1 million was recently found in the Rocky Mountains, according to the man that hid it there over a decade ago.
Forrest Fenn,89, confirmed that “the search is over” on his website Sunday. Fenn hid the treasure in 2010 and wrote a poem with several clues revealing that it was “somewhere in the mountains north of Santa Fe.”
“The Search Is Over! Forrest Has Confirmed That The Treasure Has Been Found (6/6/20),” Fenn’s website read.
Fenn said he did not know the person who found the treasure, but a list of clues in the poem led the person to the booty.
Fenn’s poem of clues shown on Good Morning America in 2015 “It was under a canopy of stars in the lush, forested vegetation of the Rocky Mountains, and had not moved from the spot where I hid it more than ten years ago,” Fenn said. “I congratulate the thousands of people who participated in the search and hope they will continue to be drawn by the promise of other discoveries.”
Fenn told the Santa Fe New Mexican:
“The guy who found it does not want his name mentioned. He’s from back East,” he said, adding that it was confirmed from a photograph the man sent him.
Santa Fe New Mexican estimates 350,000 people have hunted for Fenn’s treasure, with at least four deaths contributed to the searching efforts.
When questioned how he felt that the decade long search for his treasure is finally over, he said, “I don’t know, I feel halfway kind of glad, halfway kind of sad because the chase is over.”
Fenn in 2015 Good Morning America interview Some believe the treasure never existed — treasure hunter Seth Wallack said, “I think his announcement is at least a few years, and a few lives, too late. But he has to live with that. I believe this was over much earlier than today.”
“I think 2019 is the year he said was his last to do any interviews about the treasure, which I interpret as he lost interest because the hunt was no longer,” Wallack added. “In 2020, he said the treasure was found but didn’t reveal any details so his narrative can’t be questioned.”
Fenn spoke with Good Morning America in 2015 about the “chest filled with gold and jewels.”
At least four people died searching for a chest filled with gold and jewels hidden a decade ago by Forrest Fenn
The treasure, worth over $1 million, has been found. #SundayMorning spoke to Fenn in 2015 https://t.co/rbVfNcAG7f pic.twitter.com/WLAW2IaOUg
— CBS Sunday Morning 🌞 (@CBSSunday) June 8, 2020
- What Comes After The "Deepest Economic Crisis Since The Great Depression"
What Comes After The “Deepest Economic Crisis Since The Great Depression”
Tyler Durden
Tue, 06/09/2020 – 19:25Authored by Huge Erken, head of International Economics at Rabobank
Coronavirus causes deepest economic crisis since the Great Depression
Summary
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COVID-19 is expected to result in contraction of the global economy by 4.1% in 2020
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This means that the corona crisis will be the deepest economic crisis since the Great Depression in the 1930s
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We expect a relatively limited recovery in 2021, as many countries will continue to be bound to a ‘six-foot economy’ for a long time
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Businesses in these countries will not be able to offer as many goods and services as they did previously, and demand will remain low for a long time Political tensions between the US and China have flared up again, and we expect the truce in the trade war to come to an end
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Downside risks such as a second wave of infections or a financial crisis continue to dominate
The global economy will contract by 4.1% The rapid succession of developments relating to the coronavirus (see Figure 1a and 1b) is leaving deep scars in the global economy. We have therefore had to downgrade our estimates several times (here and here and here).
We are currently forecasting that the global economy will contract by 4.1% in 2020, and then grow by 4.3% in 2021 (Table 1). This means that the corona crisis will be the deepest economic crisis since the Great Depression in the 1930s (Figure 2). The sharp contraction in mainly Western Europe and Latin America will be offset by more moderate GDP declines in Asia, where stronger underlying growth in China in 2020 and in India in 2021 will go some way to limiting the damage.
The deepest economic crisis since the 1930s For France, Italy, Spain and the United Kingdom we are even forecasting a contraction in gross domestic product (GDP) of more than 10% in, mainly due to the long and stringent lockdowns in these countries. Another factor is that the sectors that are the worst hit by the corona crisis, such as tourism, recreation and hospitality, are relatively strongly represented in these countries compared to other eurozone countries.
In the United States, we expect a more limited contraction of 5.7%, again followed by a relatively modest recovery in 2021. In the US, this relates to the flexible labor market, which lead to a rapid rise in unemployment which started to come down again recently (Figure 3). April saw the highest post-war unemployment figure of 14.7%, although figures for May show that it is coming down again. Corrected for classification errors, unemployment was as much as 19.5%. With a fifth of the American working population temporarily out of work, private consumption will be slow to pick up after the hard lockdown period, and these effects will continue to be felt into 2021. This expected weakness in the demand side of the economy will be intensified by the fact that the US economy was already in pretty poor shape before the advent of the corona crisis, something we have been warning about since the beginning of 2019.
Reopening the economy is proving difficult
The US is not the only country where we expect lower growth in 2021 than we previously forecast. We currently expect the recovery to be more moderate in virtually all countries. Despite the easing of the lockdown in many countries, economic activity is increasing only marginally. On the one hand this is due to lack of demand, as people continue to avoid restaurants, cafés and stores, and also due to economic uncertainty and loss of income. On the other hand, there are limitations in the supply side of the economy as businesses and entrepreneurs are forced to adapt to the six-foot economy. A recent academic study argues that social distancing will be needed until 2022 to prevent a resurgence of the virus.
A lengthy period of social distancing and lower potential growth
Countries will be stuck with the six-foot economy for many months yet. For the Netherlands, we have calculated that there could be adaptation problems for 16% of jobs in this economy, while in the US this figure is 23% (see this report). In this situation a V-shaped economic recovery will be hard to achieve and a U-shaped recovery may be more likely (see this study for a detailed discussion on the possible shapes the recovery might take). We have calculated that the corona crisis could also damage the long-term growth potential of countries, so that the effects could continue to be felt even after 2022. For the Dutch economy, we forecast that annual potential economic growth in 2022-2030 will fall from 1.4% to 1.2%, and in the US we foresee a decline from 1.6% to 1.4%.
Political tensions between the US and China are flaring up again
Following the long-awaited truce between the US and China in the form of the ‘Phase 1 deal’ on January 13 and the subsequent outbreak of the corona virus, a period of quiet broke out in the trade war between the two superpowers. However, diplomatic relations between the US and China have now taken a rapid and serious turn for the worse. This started in March, with accusations from both sides regarding the approach to the virus.
US measures
The US is working on legislation to use grants and tax breaks to persuade foreign businesses in China to transfer their operations to the US and on measures to reduce dependence on China in areas such as medical and defense-related products. President Trump has also instructed his administration to remove Hong Kong’s special status in response to a Chinese security law that the Americans believe threatens Hong Kong’s autonomy. Withdrawing this status would mean that Hong Kong, which is a major trading hub in Asia, would face higher trade tariffs and that access to US dollars by businesses and banks in Hong Kong could be restricted. Finally, Trump has signed a presidential executive order, under which US businesses are no longer permitted to use products from the Chinese telecoms giant Huawei.
Anti-China rhetoric as a lightning conductor
All these measures are part of President Trump’s ‘America First’ doctrine, and address what he sees as unfair trading practices on the part of China. This view is starting to gain traction with the US public (see Figure 8). Trump seems to be using anti-China rhetoric as a diversion from his domestic problems. Trump has lost much needed popularity in the polls due to his handling of the corona crisis, the rapidly worsening economy and his threat to deploy the military to subdue recent demonstrations and social unrest.
With the presidential elections upcoming in November, Trump is trying to make electoral gains with his tried and tested anti-China tactic. Trump is indeed not alone in this stance, as his Democratic opponent Joe Biden is also planning to act against China, albeit in cooperation with Europe.
Chinese measures
China has not been sitting on its hands either. It expelled several American journalists in March, and state-run food companies (Cofco and Sinograin) have been instructed to buy fewer products from the US. This fits the view that China is apparently not ready to observe the trade agreements in the Phase 1 deal, as available import data for the first three months of 2020 are showing a negative rather than a positive trend (see Figure 9). This also confirms that China’s import commitment was always highly unrealistic right from the start. In combination with the recent political tensions between the two countries, we believe the deal is likely to break down before the year is out.
Downside risks
Despite our heavily downgraded economic forecasts and rising geopolitical tensions, there are several risks that could make the outlook even worse. Four of these risks are discussed below. A second wave of infections Countries around the world are currently easing their lockdowns. There is a possibility that this easing will open the door to a new wave of infections, forcing countries to impose a new period of lockdowns to restrict the spread of the virus. Previously we published estimates of the additional economic damage if lockdowns were to be extended by a further three months. A return of the virus in emerging markets is potentially a much greater risk than in developed countries. It remains to be seen whether it is realistic that people in densely populated countries such as Indonesia, India and Brazil will be able to maintain adequate social distancing. There is also the question of whether these countries have sufficient testing capabilities to identify a resurgence of the virus at an early stage.
A financial crisis
The current economic crisis could turn into a financial crisis, in which financial institutions get into difficulties. For instance, if there is a second or third wave of infections that leads to a sharp increase in bankruptcies, a rapid deterioration in bank balance sheets and liquidity issues for banks themselves. The consequence could be that lending to businesses comes to a halt, putting more businesses in trouble and creating a vicious circle.
At this time we do not expect any friction in the financial system, partly because the banks have generally improved their buffers since the Great Financial Crisis and partly because central banks around the world are providing sufficient liquidity to the banks. The volatility in the financial markets that marked the start of the corona crisis has therefore also waned.
Zombie companies
Another risk in the longer term is that the proportion of what are known as ‘zombie companies’ will increase in some countries. Zombie companies are businesses that are barely profitable now and their outlook for future profitability is bleak. These companies thrive in an environment of low interest rates and a financial system that rolls over loans to loss-making companies. Even more loose monetary policy by central banks encourages this ‘zombification’ process. We saw the number of zombie companies increase rapidly in the wake of the Great Financial Crisis. In the US, the proportion of zombie companies among listed companies rose to 15% in 2019 (figure 10). In Japan as well, the proportion of zombie companies among SMEs is now 21% according to some estimates. Zombie companies represent a problem for the post-crisis recovery as they are less productive and innovative than healthy businesses. According to the BIS, a one percentage point increase in the proportion of zombie companies in a country leads to a decline of 0.3% in annual GDP growth.
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