Today’s News 10th May 2020

• Ehret: For Victory Day, It's Time To Think About Finally Winning WWII
  Ehret: For Victory Day, It’s Time To Think About Finally Winning WWII

  Authored by Matthew Ehret via The Strategic Culture Foundation,

  75 years ago Germany surrendered to allied forces finally ending the ravages of the Second World War.

  Today, as the world celebrates the 75th anniversary of this victory, why not think very seriously about finally winning that war once and for all?

  If you’re confused by this statement, then you might want to sit down and take a deep breath before reading on. Within the next 12 minutes, you will likely discover a disturbing fact which may frighten you a little bit: The allies never actually won World War II…

  Now please don’t get me wrong. I am eternally thankful for the immortal souls who gave their lives to put down the fascist machine during those bleak years… but the fact is that a certain something wasn’t resolved on the 9th of May, 1945 which has a lot to do with the slow re-emergence of a new form of fascism during the second half of the 20th century and the renewed danger of a global bankers’ dictatorship which the world faces again today.

  It is my contention that it is only when we find the courage to really look at this problem with sober eyes, that we will be able to truly honor our courageous forebears who devoted their lives to winning a peace for their children, grandchildren and humanity more broadly.

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  The Ugly Truth of WWII

  I’ll stop beating around the Bush now and just say it: Adolph Hitler or Benito Mussolini were never “their own men”.

  The machines they led were never fully under their sovereign control and the financing they used as fuel in their effort to dominate the world did not come from the Banks of Italy or Germany. The technologies they used in petrochemicals, rubber, and computing didn’t come from Germany or Italy, and the governing scientific ideology of eugenics that drove so many of the horrors of Germany’s racial purification practices never originated in the minds of German thinkers or from German institutions.

  Were it not for a powerful network of financiers and industrialists of the 1920s-1940s with names such as Rockefeller, Warburg, Montague Norman, Osborn, Morgan, Harriman or Dulles, then it can safely be said that fascism would never have been possible as a “solution” to the economic woes of the post-WWI order. To prove this point, let us take the strange case of Prescott Bush as a useful entry point.

  The patriarch of the same Bush dynasty that gave the world two disastrous American presidents (and nearly a third had Donald Trump not annihilated Jeb at the last minute in 2016) made a name for himself funding Nazism alongside his business partners Averell Harrimen and Averell’s younger brother E. Roland Harriman (the latter who was to recruit Prescott to Skull and Bones while both studying at Yale). Not only did Prescott, acting as director of Brown Brothers Harriman, provide valuable loans to keep the bankrupt Nazi party afloat during Hitler’s loss of support in 1932 when the German population voted into office the anti-Fascist General Kurt von Schleicher as Chancellor, but was even found guilty for “Trading with the enemy” as director of Union Banking Corporation in 1942!

  That’s right! As demonstrated in the 1992 Unauthorized Biography of George Bush, eleven months after America entered WWII, the Federal Government naturally conducted an investigation of all Nazi banking operations in the USA and wondered why Prescott continued to direct a bank which was so deeply enmeshed with Fritz Thyssen’s Bank voor Handel en Scheepvart of the Netherlands. Thyssen for those who are un-aware is the German industrial magnate famous for writing the book “I Paid Hitler”. The bank itself was tied to a German combine called Steel Works of the German Steel Trust which controlled 50.8% of Nazi Germany’s pig iron, 41.4% of its universal plate, 38.5% of its galvanized steel, 45.5% of its pipes and 35% of its explosives. Under Vesting Order 248, the U.S. federal government seized all of Prescott’s properties on October 22, 1942.

  The U.S.-German Steel combine was only one small part of a broader operation as Rockefeller’s Standard Oil had created a new international cartel alongside IG Farben (the fourth largest company in the world) in 1929 under the Young Plan. Owen Young was a JP Morgan asset who headed General Electric and instituted a German debt repayment plan in 1928 that gave rise to the Bank of International Settlements (BIS) and consolidated an international cartel of industrialists and financiers on behalf of the City of London and Wall Street. The largest of these cartels saw Henry Ford’s German operations merging with IG Farben, Dupont industries, Britain’s Shell and Rockefeller’s Standard Oil. The 1928 cartel agreement also made it possible for Standard Oil to pass off all patents and technologies for the creation of synthetic gasoline from coal to IG Farben thus allowing Germany to rise from producing merely 300 000 tons of natural petroleum in 1934 to an incredible 6.5 million tons (85% of its total) during WWII! Had this patent/technology transfer not taken place, it is a fact that the modern mechanized warfare that characterized WWII could never have occurred.

  Two years before the Young Plan began, JP Morgan had already given a $100 million loan to Mussolini’s newly established fascist regime in Italy- with Democratic Party kingmaker Thomas Lamont playing the role of Prescott Bush in Wall Street’s Italian operation. It wasn’t only JP Morgan who loved Mussolini’s brand of corporate fascism, but Time Magazine’s Henry Luce unapologetically gushed over Il Duce putting Mussolini on the cover of Time eight times between 1923 and 1943 while relentlessly promoting fascism as the “economic miracle solution for America” (which he also did in his other two magazines Fortune and Life). Many desperate Americans, still traumatized from the long and painful depression begun in 1929, had increasingly embraced the poisonous idea that an American fascism would put food on the table and finally find help them find work.

  A few words should be said of Brown Brothers Harriman.

  Bush’s Nazi bank itself was the spawn of an earlier 1931 merger which took place between Montagu Norman’s family bank (Brown Brothers) and Harriman, Bush and Co. Montague Norman was the Governor of the Bank of England from 1920 to 1944, leader of the Anglo-German Fellowship Trust and controller of Germany’s Hjalmar Schacht (Reichsbank president from 1923-1930 and Minister of Economy from 1934-1937). Norman was also the primary controller of the Bank of International Settlements (BIS) from its creation in 1930 throughout the entirety of WWII.

  The Central Bank of Central Banks

  Although the BIS was established under the Young Plan and nominally steered by Schacht as a mechanism for debt repayments from WWI, the Swiss-based “Central Bank of Central Banks” was the key mechanism for international financiers to fund the Nazi machine. The fact that the BIS was under the total control of Montagu Norman was revealed by Dutch Central Banker Johan Beyen who said “Norman’s prestige was overwhelming. As the apostle of central bank cooperation, he made the central banker into a kind of arch-priest of monetary religion. The BIS was, in fact, his creation.”

  The founding members of the Board included the private central banks of Britain, France, Germany, Italy and Belgium as well as a coterie of 3 private American banks (JP Morgan, First National of Chicago, and First National of New York). The three American banks merged after the war and are today known as Citigroup and JP Morgan Chase.

  In its founding constitution, the BIS, its directors and staff were given immunity from all sovereign national laws and not even authorities in Switzerland were permitted to enter its premises.

  This story was conveyed powerfully in a 1998 History Channel documentary entitled Banking with Hitler.

  A Word on Eugenics

  Nazi support in the build up to, and during WWII didn’t end with finance and industrial might, but extended to the governing scientific ideology of the third Reich: Eugenics (aka: the science of Social Darwinism as developed by Thomas Huxley’s X Club associate Herbert Spencer and Darwin’s cousin sir Francis Galton decades earlier). In 1932, New York hosted the Third Eugenics Conference co-sponsored by William Draper Jr (JP Morgan banker, head of General Motors and leading figure of Dillon Read and co) and the Harriman family. This conference brought together leading eugenicists from around the world who came to study America’s successful application of eugenics laws which had begun in 1907 under the enthusiastic patronage of Theodore Roosevelt. Hiding behind the respectable veneer of “science” these high priests of science discussed the new age of “directed evolution of man” which would soon be made possible under a global scientific dictatorship.

  Speaking at the conference, leading British Fascist Fairfield Osborn said that eugenics:

  “aids and encourages the survival and multiplication of the fittest; indirectly, it would check and discourage the multiplication of the unfitted. As to the latter, in the United States alone, it is widely recognized that there are millions of people who are acting as dragnets or sheet anchors on the progress of the ship of state…While some highly competent people are unemployed, the mass of unemployment is among the less competent, who are first selected for suspension, while the few highly competent people are retained because they are still indispensable. In nature, these less-fitted individuals would gradually disappear, but in civilization, we are keeping them in the community in the hopes that in brighter days, they may all find employment. This is only another instance of humane civilization going directly against the order of nature and encouraging the survival of the un-fittest”.

  The dark days of the great depression were good years for bigotry and ignorance as eugenics laws were applied to two Canadian provinces, and widely spread across Europe and America with 30 U.S. states applying eugenics laws to sterilize the unfit. Eugenics’ successful growth was due in large measure to the fierce financial support of the Rockefeller Foundation and the science magazine Nature which had been created in 1865 by T.H. Huxley’s X Club. The Rockefeller Foundation went onto fund German eugenics and most specifically the rising star of human improvement Joseph Mengele.

  The Nazi Frankenstein Monster is Aborted

  Describing his January 29, 1935 meeting with Hitler, Round Table controller Lord Lothian quoted the Fuhrer’s vision for Aryan co-direction of the New World Order saying:

  “Germany, England, France, Italy, America and Scandinavia … should arrive at some agreement whereby they would prevent their nationals from assisting in the industrializing of countries such as China, and India. It is suicidal to promote the establishment in the agricultural countries of Asia of manufacturing industries”

  While it is obvious that much more can be said on the topic, the Fascist machine didn’t fully behave the way the Dr. Frankensteins in London wished, as Hitler began to realize that his powerful military machine gave Germany the power to lead the New World Order rather than play second fiddle as mere enforcers on behalf of their Anglo masters in Britain. While many London and Wall Street oligarchs were willing to adapt to this new reality, a decision was made to abort the plan, and try to fight another day.

  To do this a scandal was concocted to justify the abdication of pro-Nazi King Edward VIII in 1936 and an appeasing Prime Minister Neville Chamberlain was replaced with Winston Churchill in 1940. While Sir Winston was a life long racist, eugenicist and even Mussolini-admirer, he was first and foremost a devout British Imperialist and as such would fight tooth and nail to save the prestige of the Empire if it were threatened. Which he did.

  The Fascists vs Franklin Roosevelt

  Within America itself, the pro-fascist Wall Street establishment had been loosing a war that began the day anti-fascist President Franklin Roosevelt was elected in 1932. Not only had their attempted February 1933 assassination failed, their 1934 coup d’etat plans were also thwarted by a patriotic General named Smedley Darlington Butler. To make matters worse, their efforts to keep America out of the war in the hopes of co-leading the New World Order alongside Germany, France and Italy was also falling apart. A As I outlined in my recent article How to Crush a Bankers’ Dictatorship, between 1933-1939, FDR had imposed sweeping reforms on the banking sector, thwarted a major attempt to create a global Bankers’ dictatorship under the Bank of International Settlements, and mobilized a broad recovery under the New Deal.

  By 1941, Japan’s attack on Pearl Harbor polarized the American psyche so deeply that resisting America’s entry into WWII as Wall Street’s American Liberty League had been doing up until then, became political suicide. Wall Street’s corporatist organizations were called out by FDR during a powerful 1938 speech as the president reminded the Congress of the true nature of fascism:

  “The first truth is that the liberty of a democracy is not safe if the people tolerate the growth of private power to a point where it becomes stronger than their democratic state itself. That, in its essence, is fascism – ownership of government by an individual, by a group, or by any other controlling private power… Among us today a concentration of private power without equal in history is growing. This concentration is seriously impairing the economic effectiveness of private enterprise as a way of providing employment for labor and capital and as a way of assuring a more equitable distribution of income and earnings among the people of the nation as a whole.”

  While America’s entry into WWII proved a decisive factor in the destruction of the fascist machine, the dream shared by Franklin Roosevelt, Henry Wallace and many of FDR’s closest allies across America, Canada, Europe, China and Russia for a world governed by large-scale development, and win-win cooperation did not come to pass.

  Even though FDR’s ally Harry Dexter White led in the fight to shut down the Bank of International Settlements during the July 1944 Bretton Woods conference, the passage of White’s resolutions to dissolve BIS and audit its books were never put into action. While White, who was to become the first head of the IMF, defended FDR’s program to create a new anti-imperial system of finance, Fabian Society leader, and devout eugenicist John Maynard Keynes defended the Bank and pushed instead to redefine the post-war system around a one world currency called the Bancor, controlled by the Bank of England and BIS.

  The Fascist Resurgence in the Post-War World

  By the end of 1945, the Truman Doctrine and Anglo-American “special relationship” replaced FDR’s anti-colonial vision, while an anti-communist witch hunt turned America into a fascist police state under FBI surveillance. Everyone friendly to Russia was targeted for destruction and the first to feel that targeting were FDR’s close allies Henry Wallace and Harry Dexter White whose 1948 death while campaigning for Wallace’s presidential bid put an end to anti-colonialists running the IMF.

  In the decades after WWII, those same financiers who brought the world fascism went straight back to work infiltrating FDR’s Bretton Woods Institutions such as the IMF and World Bank, turning them from tools of development, into tools of enslavement. This process was fully exposed in the 2004 book Confessions of an Economic Hit man by John Perkins.

  The European banking houses representing the old nobility of the empire continued through this reconquering of the west without punishment. By 1971, the man whom Perkins exposed as the chief economic hit man George Schultz, orchestrated the removal of the U.S. dollar from the Gold-reserve, fixed exchange rate system director of the Office of Management of Budget and in the same year, the Rothschild Inter-Alpha Group of banks was created to usher in a new age of globalization. This 1971 floating of the dollar ushered in a new paradigm of consumerism, post-industrialism, and de-regulation which transformed the once productive western nations into speculative “post-truth” basket cases convinced that casino principles, bubbles and windmills were substitutes for agro-industrial economic practices.

  So here we are in 2020 celebrating victory over fascism.

  The children and grandchildren of those heroes of 1945 now find themselves attached to the biggest financial collapse in history with $1.5 quadrillion of fictitious capital ripe to explode under a new global hyperinflation akin to that which destroyed Weimar in 1923, but this time global. The Bank of International Settlements that should have been dissolved in 1945 today controls the Financial Stability Board and thus regulates the world derivatives trade which has become the weapon of mass destruction that has been triggered to unleash more chaos upon the world than Hitler could have ever dreamed.

  The saving grace today is that the anti-fascist spirit of Franklin Roosevelt is alive in the form of modern anti-imperialists Vladimir Putin, Xi Jinping and a growing array of nations united under the umbrella of the New Deal of the 21st Century which has come to be called the “Belt and Road Initiative”.

  Had Prescott’s grandson Jeb (or Prescott’s spiritual grand daughter Hillary) found themselves in the position of President of the USA at this moment, it is unlikely that I would be writing this now, as I’m fairly certain WWIII would have already been launched. However, with President Trump having successfully survived nearly four years of Deep State subversion, and having called repeatedly for a positive alliance with Russia and China, a chance still exists to take the types of emergency actions needed at this moment of existential crisis to do what FDR had always intended, and win World War II.

  
  Tyler Durden
  
  Sun, 05/10/2020 – 00:00

• "Your Every Move Will Be Watched": Post-COVID Offices To Resemble China's Social Credit System
  “Your Every Move Will Be Watched”: Post-COVID Offices To Resemble China’s Social Credit System

  We recently detailed how when America’s white collar work force returns to their offices, business complexes, and sky scrapers, their experience in the post-COVID ‘reopened’ work space is likely to resemble something more like an airport security check zone, complete with invasive protocols like frequent temperature checks and ‘social distancing’ and health surviellance, as well as Plexiglass eclosed cubicles and HR-style enforcement monitors. 

  If all that sounds like a hassle, the WSJ has since taken up the question of America’s near-future office spaces, and the end result looks to be worse than expected. “Your every move will be watched,” the report emphasizes:

  In Midtown Manhattan, thermal cameras will measure body temperatures as employees file into a 32-story office tower at Rockefeller Center. The building’s owner, RXR Realty, said it is also developing a mobile app for tenants to monitor — and score — how closely their workers are complying with social distancing.

  PricewaterhouseCoopers LLP said it is preparing to launch this month a phone app for employers that traces contacts by analyzing workers’ interactions in the office. More than 50 clients have expressed interest, including some of the nation’s biggest banks, manufacturers and energy companies.

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  It sounds like something very close to China’s ‘big brother’ social credit scoring system which made world headlines last year, as it relies on cutting edge facial recognition software designed to permanently store a citizen profile while actively tracking individuals’ public movements. 

  There’s already been reported instances of Chinese citizens being prevented from taking trains due to the system forecasting they might not be able to pay, or some other ‘pre-crime’ risks. 

  And now this is getting closer to home, possibly coming to an office near you:

  Advertising giant Interpublic Group of Cos . is exploring dividing its 22,000 U.S. employees into three separate groups, according to perceived health risks, which could include age. Workers could be asked to disclose medical and other personal information about themselves and, in some cases, family members…

  “It is a reasonable approach, if you can get through the operational and some of the privacy and regulatory issues,” Dr. Ossmann said.

  It’s certainly alarming anytime it has to be admitted that “privacy issues” are merely a pesky little something to “get through”. 

  Covid-19 is taking workplace surveillance to a higher level, with some employers planning to track movements and gather personal information like never before in Western democracies https://t.co/2bjDGAEZtG

  — The Wall Street Journal (@WSJ) May 6, 2020

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

  There’s already talk of health tracking apps set up on a reward/punishment system of incentives sounding like something straight out of the dysoptian futuristic series Black Mirror.

  This would further be integrated with controversial thermal imaging technology – some already set up at Amazon warehouses – capable of storing face recognition data (thought the company promises not to activate the storing software).

  And it’s complete with live “guinea pigs” — rather, currently returning office employees, as the WSJ writes of one real estate company: 

  RXR, the real-estate company, is testing new systems on its own employees. “We are using ourselves as the guinea pigs,” RXR’s Chief Executive Scott Rechler said.

  The company aims to have its social-distancing app ready at the end of May. Workers’ movements are tracked through their smartphones — you get a higher score the more time in the office you are farther than 6 feet from another person. An individual would see his or her own score, and the employer would see aggregate data on how employees are complying with social distancing as a whole.

  Comply or else what?… Yet another reason why employees would have to worry about keeping their jobs. 

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  And more on labeling broad groups of employees according to perceived COVID-19 risk factors: 

  A worker that tested positive for coronavirus antibodies, indicating they had the infection in the past, would be considered a “Level 1” employee — the lowest risk— and could return to work when states and cities lift work-from-home orders.

  Those without antibodies but who are considered a low to moderate risk would count as “Level 2.” This group would include employees who are under 65 years old, don’t live with high-risk people and don’t have chronic diseases including diabetes or hypertension. This group could potentially return to work in a second wave.

  Employees over 65, or those who are pregnant, smoke, have chronic diseases or health issues would be considered “Level 3.” These at-risk employees would have to wait the longest to return, Dr. Ossmann said.

  We wonder when the initial discrimination lawsuits based on how identifying characteristics are interpreted and assigned would start rolling down hill. 

  But again, to see how all of this would actually play out, one need only watch episodes of the Black Mirror. What could go wrong?

  
  Tyler Durden
  
  Sat, 05/09/2020 – 23:35

• Here's How To Become A Prepper
  Here’s How To Become A Prepper

  Authored by Daisy Luther via The Organic Prepper blog,

  If the coronavirus has inspired you to become a prepper, you’re not alone. At long last, prepping has become mainstream due to runs on supplies, shortages, and stay-at-home orders throughout the country. More folks than ever before are seeing the wisdom of having extra food and household goods on hand. It can help you through not only disasters and pandemics, but also through personal financial problems.

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  But delve into most preparedness websites (including this one) and it can start to get overwhelming when you read articles about civil unrest, EMPs, and existential catastrophes. You’ll see articles about guns and outdoor survival and all sorts of things in which you have absolutely no interest.

  And more than that, it’s kind of overwhelming. It can make you feel like, “Wow, I will never be able to have a bunker in Montana with 150,000 rounds of ammo. I don’t even know how to build a fire. Why even bother?”

  Before we get started with the “how to’s” here are a few things you should know.

  All of us started at the beginning.

  It’s important to know that all of us started somewhere. We all had some event that awakened us to the need to be better prepared. (To learn how some readers were inspired to get started, go here.) We all had to learn the ins and outs, read the books, and acquire the stuff.

  Most of us don’t have thousands of dollars to drop on buckets of food and secondary locations. We began by just getting a few extra things when we could.

  It takes some time.

  Getting well-prepared doesn’t happen overnight. Even if you have a budget that is relatively unlimited, you will find that it still takes time to figure out what you need, where to get it, and where to store it.

  So if you can only afford a few extra things each week, that’s a fantastic place to start. Within a month, you may have an extra week’s food supply doing things that way. Within a year, you’ve got a 3-month supply.

  Rome wasn’t built in a day and neither was a prepper’s stockpile.

  You don’t have to be of a particular political or religious belief to be a prepper.

  A lot of folks think that most preppers are well-to-do white, right-wing Christians. While a lot of preppers do have that in common, there are a lot who do not. We don’t all live on an acreage in the boondocks and raise everything we eat.

  If you feel like you don’t fit into the mold, don’t worry because let me tell you a secret: there really is no mold. We have readers of this website from all different kinds of political and religious backgrounds. We have city dwellers and suburbanites. We have folks who live off the land and folks who buy most of their food from the grocery store. We have rich readers and poor readers. We have people coming here from many different countries with many different belief systems. The thing that unites us is that we want to be prepared.

  We have people who are involved in prepping for a huge variety of reasons and we, the writers and editors of this site, sincerely welcome anyone who wants to become better prepared for emergencies.

  You don’t have to be a tinfoil hat conspiracy theorist to be a prepper.

  A lot of folks have this mental image of some wild-eyed guy peering out of the bunker wearing a tinfoil helmet. I’ll grant you that a lot of preppers are mistrustful of the things we hear in the mainstream media. We don’t take things at face value.

  But for every prepper who is certain that the New World Order is trying to take over and every event is a false flag, there are preppers who are extremely logical and scientific. There are preppers who are pro-vaccination and anti-vaccination and everything in between.

  I guess what I’m trying to say here is that we run the gamut. Don’t let the stereotypes scare you away.

  Don’t stay someplace you’re treated badly.

  In most of the preparedness world, you’ll be welcomed with open arms. But there are a few websites and forums where you find long-time preppers who are incredibly discouraging. If you run into this issue repeatedly, don’t continue hanging out there. Getting started on a big endeavor is overwhelming enough without people like that making you feel like crap.

  Around here we like to help each other with advice and suggestions. Feel free to ask any questions you might have in the comments section and you’ll probably get more than one answer from those who wish to share their knowledge.

  We welcome you and we’re glad you’re here. Go here to sign up for our newsletter so you don’t miss a thing.

  Now, how do you get started prepping?

  Pretty much all of us have recently had a crash course in preparedness with the COVID-19 pandemic. Many people have been sheltering in place in their homes for over a month now and have seen holes in their purchases. Some folks had the unfortunate experience of going out to stock up a little too late, only to find that the shelves were bare of essentials.

  An enormous factor that makes just about every disaster worse is panic. When you wait until the last minute, you’re out there with all the other folks who waited until the last minute. Tensions are high and supplies are low. This can create an unsafe situation and can leave people without the things they need to face the event that has them rushing to the store in the first place.

  The goal of prepping is to avoid all that.

  When you’re prepped, sure, you really want to make one last run to the grocery store or Target, but if it came right down to it and you couldn’t, you’d still be okay. You still have the things on hand that your family needs to survive an event that lasts for a few hours all the way to a few months or even a few years. (And remember what I said above? It takes a while to get to that point.) The information below contains lots of links to articles, PDF guides, and books for topics you may wish to learn more about.

  What are you prepping for?

  There are all sorts of events people prep for, one of which, obviously, is a massive pandemic and quarantine. Outside of your general supplies, consider prepping for power outages next. Here’s a PDF guide that will help you get ready for blackouts. and here’s an article with some guidelines.

  But there are many more things and some will be unique to your area. The Prepper’s Workbook may be helpful in figuring out exactly what’s the most likely for you. Here are some more regional things to prepare for these events are common in your area:

  • Tornados

  • Ice storms

  • Hurricanes

  • Blizzards

  • Wildfires

  • Evacuations

  • Earthquakes

  • Floods

  Focus on the things most pertinent to your area. Think about those most likely events and what generally occurs with them: power outages, property damage, a requirement for special shelter, a secondary disaster (like a flood that follows a hurricane, for example).

  Who are you prepping for?

  Think about all of the members of your family or any loved ones you might be providing shelter for during an emergency. Everyone will have unique needs and wishes. This is why checklists are a great guideline but they don’t encompass everything.

  Think about these needs and stock up accordingly:

  • Medications (try to get a month ahead on necessary meds if you can, even if it means paying out of pocket)

  • Special diets

  • Entertainment (what your 2-year-old finds fun and what your 14-year-old finds fun are very different)

  • Picky eaters (I recommend indulging picky eaters if you can – the middle of an emergency is not the time for stress-inducing arguments and familiar foods can help picky folks feel more in control)

  • Baby and toddler needs like diapers and wipes, as well as formula, and baby food if you use it

  • Pet supplies like food, kitty litter, carriers and leashes in case of evacuation, and any medication your pet takes

  These are just a few examples of special needs. Spend a couple of days with a notebook and pen close at hand and write down every single thing anyone in your household uses, pets included.

  Stock up on water.

  Water is near and dear to my heart, so much so that I wrote a book on the topic. (You can find The Prepper’s Water Survival Guide HERE.) I always put water at the top of the list, because without it, you’ll be dead in 3 short days. The need for an emergency water supply isn’t always the result of a down grid disaster. Recently, we tapped into our emergency water when the well pump broke. Some places have had water emergencies when the municipal supply was contaminated by stuff like industrial spills or agricultural run-off. Floods and bad storms can also sometimes cause the water supply to be tainted.

  • Use containers you have RIGHT NOW and fill them with water from the tap. Put the lid on and stash them away. Don’t use milk jugs or juice jugs for drinking water, but you can use them for sanitation water in a pinch. If you can get your hands on some empty, clean 2-liter soda bottles, that will be perfect. We don’t drink soda, so we have some of the 1-gallon water bottles from the store.

  • Buy some filled 5-gallon jugs of purified water.  How much you need should be based on the number of family members. The rule of thumb is 1 gallon per person, per day, but you may find you need a lot more than that when you add in pets and sanitation needs. You may be able to find these less expensively, already filled at the store. When I lived in Canada you could pick up a filled jug for less than $10, but California has all sorts of environmental rules that make these containers more expensive here. Another option is the 7-gallon Aquatainer that is designed for easy stacking. (Be sure to put this in a place where the floor can support the weight of a bunch of heavy water containers.)

  • Have a way to dispense the water from the jugs.  We have a top-loading water dispenser for use in emergencies. These MUST be top loading because the bottom-loading ones require electricity to run the pump.)

  • Get a gravity-fed water filter.  I use a Big Berkey, but it’s a hefty investment when you’re trying to get everything at once. If you can’t swing that, buy Jim Cobb’s Prepper’s Survival Hacks book. It has numerous DIY water filters that you can make without spending a fortune.

  Food

  Emergency food comes in many different forms. The first thing you have to look at is cooking methods, which we discussed above. The food you choose needs to be able to be prepared using the method you have available now, not the one you plan to get in the future.

  Another important note is that your emergency food supply should be nutritious. You won’t want to fill up on empty calories when you may be making greater demands of your body. Keep in mind food restrictions, too, because an emergency situation is bad enough without an allergic reaction or intolerance illness.

  There are several different ways to create a food supply.

  • See what you have.  Go through your kitchen cupboards and see what you already have that could be used in an emergency. Things like nut butters, crackers, and other no-cook snacks are great options. Canned foods that only require heating are good as well. Instant rice or noodles can be added to your emergency supply. Group these items together on a special shelf or in a Rubbermaid container so that they are available when you need them. Figure out how long your supply would last your family before you go and purchase more. Figure out what shelf-stable items you need to add to balance out your supply. (Perhaps dried or canned fruit and vegetables, canned meat, jerky, etc., would provide more nutrients and variety.)

  • Build a pantry. This is the best and least expensive way to build a pantry of familiar foods your family already enjoys. Make a list of what you need to feed your family for a month without a trip to the store, and without reliance on long cooking times. (This rules out beans and rice for most people.) Learn more about building a pantry that will see you through a variety of emergencies (including personal financial crises) in my book, Prepper’s Pantry. Also, check out The Prepper’s Book of Lists, a PDF guide you can print off and write on.

  • Emergency buckets. The very fastest way to create an instant food supply is emergency buckets of freeze-dried food, which require only the ability to boil water to prepare. One caveat: do not go with the cheapest thing you can find. Some of those taste absolutely terrible. As well, they’re loaded with unhealthy chemicals and sodium. If you normally eat very healthfully, then move to MSG-laden freeze-dried meals, you’re not going to feel well at all in an emergency. My very favorite brand of emergency food is Legacy Foods. Legacy has standard buckets of survival food, fruits and vegetables, dairy products, and protein. The quality is very good and the meals are tasty when prepared. Keep in mind that these have to be purchased well before the emergency occurs because currently, almost every company is sold out and back-ordered for weeks.

  A way to cook your food during a power outage

  If the power goes out, how will you cook? You need the ability to boil water, at the very least. If you can boil water, then you can heat up canned food or prepare freeze-dried food in an emergency. Here are some secondary cooking methods, some of which you may already have.

  • Woodstove or fireplace.  If you heat with wood, you’re a step ahead already, at least in the midst of a winter power outage. However, you won’t want to fire up the woodstove to cook in the summer, particularly since you may already be battling the heat without a fan or air conditioner.

  • Gas kitchen stove.  Some kitchen stoves that use gas or propane can be used without electricity while others can’t. (If you’re replacing your stove, this is definitely a quality you’ll want to look for.)

  • Outdoor barbecue. If the weather allows, you can fire up your propane or charcoal barbecue during a power outage and cook your feast outdoors.

  • Rocket stove. There are all sorts of little emergency stoves out there which are designed to boil water quickly and without the use of a great deal of fuel. My favorites are the Volcano 3-way stove and the Kelly Kettle. You can also make an efficient stove. We made one that brought water to boil in less than 4 minutes.

  Do not risk using emergency stoves designed for camping, indoors, unless the manufacturer specifically says that it can be used indoors. To do so is to risk fire, smoke damage, or carbon monoxide poisoning.

  Sanitation

  Another thing that can quickly become dire is personal sanitation. Depending on your situation, you may not have running water or flushing toilets. You need to stock up on supplies to make the best of these situations and keep family members healthy.

  • Baby wipes. You can never have enough baby wipes. Stock up on these for hand-washing after using the bathroom, before and after food prep, and before eating. They can also be used to wipe down surfaces. You can learn more about hand and surface hygiene when there is no running water HERE.

  • Cleaning supplies. You still have to keep your home reasonably clean when there is no running water to help prevent illness and disease. You can find some cleaning hacks HERE.

  • Personal waste plan. You have to have a plan to deal with personal waste when the toilet won’t flush. This article tells you how to make a human kitty litter toilet, a very inexpensive solution to the personal waste issue. Waste must be handled very carefully to avoid the spread of disease and illness.

  Here are the items I recommend that you keep on hand for water emergencies:

  • Disposable disinfecting wipes

  • Super absorbent paper towels

  • Basins

  • Baby wipes (These can be used for handwashing and personal hygiene.

  • Your regular spray cleaner (Ours is vinegar and orange essential oil)

  • Kitty litter. This soaks up messes and helps to absorb odor. (If your toilet won’t flush because you’re on a city sewer system, it can also be used as a makeshift toilet. This serious concern  and how to make this toilet is discussed here.)

  Heat

  If a power outage takes place in the winter, you may need a secondary source of heat.

  • Woodstove or fireplace

  • Propane heater (I recommend the Mr. Buddy brand – it’s safe to use indoors)

  • Kerosene heater

  • Natural gas fireplaces – the fan won’t work but you may be able to thoroughly heat one room with these as long as the gas works.

  There are many more options. For a detailed discussion on staying warm during a power outage, check out this article.

  Light

  Lighting is absolutely vital, especially if there are children in the house. Nothing is more frightening than being completely in the dark during a stressful situation. Fortunately, it’s one of the easiest things to plan for, as well as one of the least expensive.

  Some lighting solutions are:

  • Garden stake solar lights

  • Long-burning candles

  • Kerosene lamp and fuel

  • Flashlights (don’t forget batteries)

  • Hand crank or solar lantern

  • Don’t forget matches or lighters

  For more information on lighting, check out this article.

  Tools and supplies

  Some basic items will make your life much easier during an emergency. Here are some things that are essential in the event of a power outage:

  • Lighter/waterproof matches

  • Batteries in various sizes

  • Manual can opener

  • Basic tools: Pliers, screwdriver, wrench, hammer

  • Duct tape

  • Superglue

  • Sewing kit

  • Bungee cords

  • Zip ties

  If you’d like to expand on the basic supplies, a more detailed list of tools and hardware can be found HERE.

  First Aid kit

  It’s important to have a basic first aid kit on hand at all times, but particularly in the event of an emergency. Your kit should include basic wound care items like bandages, antibiotic ointments, and sprays. As well, if you use them, keep on hand a supply of basic over-the-counter medications, like pain relief capsules, cold medicine, cough syrup, anti-nausea pills, heartburn pills, and allergy medication.

  Be sure to have a couple of good medical guides on hand. I like this first aid book, this medical book, and this book of natural remedies.

  If you want to put together a more advanced medical kit, you can find a list HERE.

  Other Stuff

  As you continue along your preparedness journey, you’ll find that there are other items that are very important to you. For example, you’ll want to build a bug-out bag for possible evacuations.

  Another book you might like is Be Ready for Anything. It’s a comprehensive guide that covers 12 different disasters and prepping basics in a thorough manner.

  And don’t be surprised when this mindset creates within you the itch to be more self-reliant, which means you’ll be adding gardening tools, sewing supplies, woodworking tools,  and other supplies to your stockpile.

  You’ve got this!

  I know this sounds like a LOT. But remember, you don’t have to do everything today. Break it down into manageable pieces. This gives you a broad overview.

  You’re going to do some list-writing, so grab a notebook and pen.

  • Write a master list. Now, based on this article, go through and write a list of the things that you feel are important for your family’s preparedness plan. Include the things that you already have. Organize your list by checking off the things you have.

  • Organize the supplies that you have into “kits”. I have Rubbermaid tubs labeled with the contents for emergency purposes, sorted into kits for things like pandemic supplies, off-grid lighting, batteries and power supplies, etc.

  • Now write a minimalist list of the first things that you must have for survival. Don’t worry if you can’t get everything at once. Start off by covering all of the bases with a skeleton kit that will get you by. This list might include some food that doesn’t require cooking (thus eliminating the immediate need for a secondary cooking method), a way to keep warm, water, a kitty litter toilet, and some baby wipes.

  • Finally, write the big list. This is a list of the things mentioned in the article that you want to own. Make a copy of the list and keep it in your wallet so that if you happen by a thrift store or yard sale, you know what you need. As your budget allows, pick up one or two of these items per week. These may be higher ticket items so don’t worry if it takes you a while to get them. You’ve gotten the bare necessities, so these items will just add to your already sturdy foundation of preparedness.

  Don’t panic. Start with your basics in each category and add to it as your time and budget allow.

  I mentioned this earlier, but if you want more guidance to get started, here’s a PDF book to help you get prepped no matter where you live: The Prepper’s Workbook. It’s based on a course I used to offer but I think the workbook is a great way to do the exercises with a smaller time commitment and a lower price tag.

  If you’d like a place to ask questions and talk with new preppers, you can join our new Facebook group here or visit our forum.

  Most of all, welcome. We’re glad that you’ve joined us. You’re going to be ready the next time something like this rolls around without fighting the crowds for those last few rolls of toilet paper.

  
  Tyler Durden
  
  Sat, 05/09/2020 – 23:10

• One Bank Explains Why QE No Longer Stimulates The Economy And Only Leads To Higher Stock Prices
  One Bank Explains Why QE No Longer Stimulates The Economy And Only Leads To Higher Stock Prices

  Even some of the most ardent supporters of the fraud that is Keynesian economics now admit the entire modern economic system is on the verge of collapse for one main reason: the marginal utility of debt is collapsing, with ever more debt required to generate an increase in underlying GDP.

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  And tied to that, is another reason why any day now the current system may be the last: the marginal utility of every new QE is now declining to the point where soon virtually none of the money created by the Fed out of thin air will enter the economy and instead will be stuck in capital markets, resulting in hyperinflation for asset prices even as the broader economy collapses. Or, as BMO’s Daniel Krieter writes, “QE has fed through to the real economy in a slower manner than previous QE campaigns” and for each dollar the Fed’s balance sheet has grown, M1 money supply has increased about $0.32, compared to $0.96 and $0.74 in QE1 and QE2. “The expansionary policy thus far has mostly resulted in increased asset prices”, BMO writes concluding what had been obvious to us and our readers since 2009. Only now we are ten years closer to what is the inevitable endgame, one where the Fed has no impact on M1, which will also be known as the “game over” phase.

  But let’s back up.

  Traditionally, as BMO explains, we analyze the business cycle from a classical economic perspective where monetary authorities are more passive and “the invisible hand” guides economies (this used to be the case before the Fed went all Politburo on the USSA and decided to nationalize capital markets, crushing any “signal” the bond market may have; the final step will be the launch of Yield Curve Control which will be game over for the market). In this context, we look at interest rates, which can theoretically be defined as the rate that makes the consumer indifferent between consumption today and consumption tomorrow. R* is the (unknowable) natural rate of interest that supports full employment and stable interest rates. In theory, if rr*, consumption saving is preferable and the economy is contracting.

  In an expansionary phase, prices and consumption are increasing. Because prices and investment opportunities are high, demand for money among consumers/businesses is high, and interest rates (r) increase alongside borrowing. When r rises to the rate of r*, consumption slows, earnings fall, and a recession ensues. R* falls as uncertainty and risk aversion grow. This is a “business cycle” recession (and as long as the Fed is around, we will never have one of those again as the Fed has now also killed the business cycle… just as the USSR tried to do).

  However, a recession can also be caused by some external shock to the economy that produced further declines in r*. This is because r* is reactive to uncertainty with a strong negative correlation. The greater the uncertainty, the lower r* falls.

  In recession, r falls as consumption remains low as long as it is greater than r*. Defaults accelerate the drop in r. With the passage of time, r* rises slowly as the uncertainty/risk aversion surrounding the shock and/or end of business cycle fades. However the longer firms go without earnings due to low consumption, the more defaults are realized and the more r drops. At some point, the combination of falling r and rising r* results in r <= r*. Once this happens,  consumption/ investment picks up and the economy enters recovery.

  In addition to accelerating declines in r, defaults experienced during recession also lower the cost of labor and capital goods as the resources of failed companies are returned to the economy. In addition, barriers to entry in certain industries fall as “old guard” firms go out of business. Thus, as the economy enters recovery, this combination of cheaper labor/capital goods and lower barriers to entry leads to strong business investment and increases growth potential during the ensuing expansion.

  This is how the world works in theory. Unfortunately, since 1913, theory has not worked due to the intervention of the Fed.  So now let’s look at how all this works in reality, and introduce an active central bank with a wider range of monetary policy tools at its disposal.

  As the economy cools, the central bank lowers r in an attempt to spur consumption by forcing r<r*. Consumption increases in response, and recession/defaults are avoided. But business resources aren’t returned to the economy. Recovery will be less robust due to fewer relative attractive investment opportunities. As Krieter argues, this was the experience of 2001.

  Now in 2008, a shock in the form of subprime mortgages hits the economy and uncertainty skyrockets. R* moves into negative territory as shown in a recent San Francisco Fed study. The Fed moves rates lower, but is constrained by the zero bound. In order to further “lower r”, the Fed embarks on asset purchases during QE and is successful in spurring consumption, as evidenced by the strong correlation between increases in excess reserves and increases in M1. M1 is the most basic measure of money supply and includes essentially only cash and checking/demand bank accounts.
  The theory is that for a good or service to be consumed, it must be paid for out of M1. Therefore, the increase in M1
  following QE is a measure of the degree to which QE results in actual consumption.

  Note “lower r” in quotation marks in the previous bullet because r is at the zero bound and cannot (at least in the United States) be lowered further. Therefore QE increases money supply which is meant to spur consumption, which is the same desired effect of lower interest rates. In a sense, money supply increases are synthetic interest rate decreases (and synthetic capital market increases).

  The combination of QE-driven consumption (r falling) and fading uncertainty after a trillion dollar fiscal stimulus package (r* rising) ultimately pulls the economy out of recession. However, the pace of response in 08/09 was slower. QE was not announced until late November 2008, after large defaults were already experienced. Fiscal stimulus in the form of the ARRA package didn’t arrive until February 2009 with an additional lag in implementation that featured incremental defaults. In the end, almost a trillion dollars’ worth of debt was affected by default in 2008/09, but QE certainly prevented actual defaults from being likely exponentially greater. BMO notes however that defaults avoided were once again economic resources that were not returned to the economy and barriers to entry that are not lowered. This argues that attractive investment opportunities following the financial crisis were not as abundant as the depth of recession would suggest.

  As a result, the recovery was slow, ultimately prompting the Fed to embark on additional rounds of quantitative easing in an attempt to spur increased consumption.

  Which brings us to the seeds of the Fed’s own demise: the problem is that QE appears to be experiencing diminishing returns, as evidenced by a falling correlation between excess reserves and M1 in successive episodes of QE following the financial crisis. As QE leads to a direct increase in bank reserves, only a fraction is translated into money supply growth, and thus potentially consumption and investment. QE1 was highly effective and an important factor behind pulling the economy out of recession. QE2 had a marginally lower, but still high, follow through of .735 indicating that on average, $0.74 of each dollar of QE translated to increased money supply. We observe elevated inflation and personal  consumption rates during the period of QE2 as evidence of its effectiveness. However, during Q3, the correlation fell to just $0.28 and resulted in very little inflation of GDP growth. Through this lens, the impact of QE on the real economy has diminished over time.

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  How does BMO explain the diminishing impact of QE?

  • Diminishing marginal utility of consumption: QE (and monetary policy) is often referred to as “borrowing from the future”. However, there is only a limited amount of future consumption that can be pulled into the current period via monetary policy. This could apply to consumption of durable goods: as rates have been relatively low for a long period of time, demand for credit no longer increases at the same rate with incrementally lower interest rates. At some point, consumption does not bring sufficient to utility no matter how long prices or interest rates are.
  • Wealth disparity: Wealth disparity exacerbates the impact of diminishing marginal utility of consumption. For reasons discussed in further detail below, QE tends to inflate the price of financial assets, making those who own the assets more wealthy. A large percentage of QE money ends up in the hands of the wealthy, whose consumption patterns are unlikely to change in response to a near term increase in wealth.
  • Inflation expectations: Finally, the crux of monetary policy plays on expectations. Inflation is self reinforcing as demonstrated by a very high correlation between inflation and inflation expectations. Around the introduction of QE, there was an expectation that it could spawn runaway inflation. Having been through multiple rounds of QE without a large increase in inflation, people have likely generally come to understand that QE is not likely to result inflation, therefore there is marginally less impetus to consume now.

  Following five years of no QE in the United States, it appears the utility of current QE has increased modestly in comparison to QE3. However, the follow through to consumption still remains well below levels experienced between Q1 and Q2. It is likely then that current QE is unlikely spurring much consumption as r isn’t influenced lower (via money supply increase) as much as in the past and likely remains well above r*.

  Worse, as we discussed last week, one can argue that r* is likely lower now than potentially any point in history, and according to Deutsche Bank it is at an all time low of -1%.

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  Not only is uncertainty extremely high, but the impact of COVID-19 arguably directly lowers r*. Recall r can be defined as the rate of interest that makes consumption today indifferent to consumption in the future. In all economic models, r is assumed to be positive. But when people are afraid to their leave their house for fear of infection, future consumption actually is more attractive than current consumption. So r* is arguably negative for fundamental reasons for the first time. Greatly heightened uncertainty only pushes it even further negative.

  When money supply goes up, but consumption fails to be generated (because r remains well above r*), then savings rates mathematically increase. Therefore, the prices of financial assets increase generally.

  During times of risk aversion, bond prices increase first, but supply of safe assets is limited, especially as the Fed buys a substantial portion of the Treasury market. Investors are therefore pushed into riskier assets. But as long as r remains below r*, the more savings go up, the greater the mechanical move in financial asset prices relative to real economic activity.

  This, according to BMO, is what’s driving the paradoxical relationship between bond and equity prices in recent weeks, and explains why stocks are performing so well despite the outlook for the greater economy. Money supply that doesn’t translate into consumption must result in higher financial asset prices until defaults result in wealth destruction.  What does this mean for the recovery? The central bank is displaying reduced capacity to further generate real economic activity as a result of accommodative policy over the past twenty years. This means that recovery is unlikely until r* increases significantly, which only happens alongside fading virus uncertainty. This will take a long time.

  During that time, one of two things will happen. Either the government will continue to assist companies in avoiding
  bankruptcy, or it will not. If it does, confidence (and r*) will likely return relatively more quickly at a huge cost to the government. However, there will not be a large return of economic resources at the end of this recession and the ensuing recovery will be disappointing given the degree of economic pain currently being felt.

  If it does not, defaults could potentially reach historic proportions, and the recession will be long and painful. However, using the “ripping the bandaid” analogy, this scenario would result in likely the largest return of economic resources in the history of the country and lead to a very powerful economic expansion in the wake of the current recession.

  Ultimately, the truth likely lies in the middle. The government will continue to provide relief, though not likely in scale large enough to save all businesses. Defaults and downgrades will be staggering, but this will increase the capacity of growth in the ensuing economic recovery.

  What does this mean for risk assets? It means that risk assets are being technically supported by stimulus measures so far, particularly QE that is no longer as effective as it was. However, a large wave of defaults is unavoidable without an unlikely near-term (and complete) solution to COVID-19. Heavy defaults, the kinds described in “Biblical” Wave Of Bankruptcies Is About To Flood The US, will likely bring about another wave of risk asset price weakness as wealth is destroyed and technical upward pressure on financial asset prices and a higher percentage of savings demand is met with safe haven assets (Figure 3).

  This also explains why the Fed was compelled to enter the bond market, as absent a direct intervention in the secondary market, bond prices would crater and trigger a self-fulfilling doom-loop, where lower bond prices lead to higher defaults, lead to even lower prices and so on. For now, the Fed has managed to delay this process but there is only so much Powell can do to offset the collapse in fundamentals which will lead to continued ratings erosion, and the eventual defaults of countless companies, many of which the Fed will be directly invested in. At that point, the Fed’s action in the “market” will become the topic of non-stop Congressional hearings, and will culminate with doubts emerging about the viability of the dollar as a reserve currency.

  Until this trigger level is reached, however, QE will continues to pose a technical tailwind, influencing financial asset prices higher. This can be sustained until default rates increase, which is likely not until June or later as government stimulus money starts to run dry, and which point assets will likely take another nosedive lower, just as reports of a second coronavirus pandemic result in (most Democratic) states shuttering again ahead of the presidential election.

  What happens then? Risk assets will continue to slide into the election and into 2021, at which point as Nordea showed last week, we will hit a point where the lagged effect of the flood central bank liquidity will finally hit into the S&P500, and result in one final explosion in risk assets, sending stocks over 40% higher…

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  … although not of a benign nature but more of what one would expect to see in the Caracas or Weimar stock market.

  
  Tyler Durden
  
  Sat, 05/09/2020 – 22:45

• Bubble-Wrapped Americans: How The US Became Obsessed With Physical & Emotional Safety
  Bubble-Wrapped Americans: How The US Became Obsessed With Physical & Emotional Safety

  Via Ammo.com,

  “In America we say if anyone gets hurt, we will ban it for everyone everywhere for all time. And before we know it, everything is banned.”

  – Professor Jonathan Haidt

  It’s a common refrain: We have bubble-wrapped the world. Americans in particular are obsessed with “safety.” The simplest way to get any law passed in America, be it a zoning law or a sweeping reform of the intelligence community, is to invoke a simple sentence: “A kid might get hurt.”

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  Almost no one is opposed to reasonable efforts at making the world a safer place. But the operating word here is “reasonable.” Banning lawn darts, for example, rather than just telling people that they can be dangerous when used by unsupervised children, is a perfect example of a craving for safety gone too far.

  Beyond the realm of legislation, this has begun to infect our very culture. Think of things like “trigger warnings” and “safe spaces.” These are part of broader cultural trends in search of a kind of “emotional safety” – a purported right to never be disturbed or offended by anything. This is by no means confined to the sphere of academia, but is also in our popular culture, both in “extremely online” and more mainstream variants.

  Why are Americans so obsessed with safety? What is the endgame of those who would bubble wrap the world, both physically and emotionally? Perhaps most importantly, what can we do to turn back the tide and reclaim our culture of self-reliance, mental toughness, and giving one another the benefit of the doubt so that we don’t “bankrupt ourselves in the vain search for absolute security,” as President Dwight D. Eisenhower warned us about?

  Coddling and Splintering: The Transformation of the American Mind

  Two books published in 2018 provide parallel insights into the problems presented by the safety obsession of American culture: The Splintering of the American Mind by William Egginton, focused on the tendency of Americans to tunnel themselves off into self-selected bubbles, and The Coddling of the American Mind by Greg Lukianoff and Jonathan Haidt, which deals more with the tendency to avoid any uncomfortable or unpleasant information.

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  There is an interesting phenomenon involved in coddling: Australian psychologist Nick Haskam first coined the term “concept creep.” Basically, this means that terms are often elastic and expand past the point of meaning. Take, for example, the concept of “trauma.” This used to have a very limited meaning. However, “trauma” quickly became expanded to mean even slight physical or emotional harm or discomfort. Thus the increasing belief among the far left that words can be “violence” – not “violent,” mind you, but actual, literal violence.

  In the other direction, the definition of “hero” has been expanded to mean just about anything. Every teacher, firefighter and police officer is now considered a “hero.” This isn’t to downplay or minimize the importance of these roles in our society. It’s simply to point out that “hero” just doesn’t mean what it used to 100 or even 30 years ago.

  Once this expansion of a term occurs, there is never any kind of retraction. Trauma now means just about anything, and violence will soon be expanded to include lawful, peaceful speech that one disapproves of. Once this happens, there will be no going back. In the words of Sam Harris:

  “We (as a society) have to be committed to defending free speech however impolitic, or unpopular, or even wrong because defending that is the only barrier to violence. That’s because the only way we can influence one another short of physical violence is through speech, through communicating ideas. The moment you say certain ideas can’t be communicated you create a circumstance where people have no alternative but to go hands on you.”

  It is extremely dangerous to begin labelling everything as violence for reasons of free speech, but perhaps even more dangerous is the notion that when anything is violence, nothing is violence. Redefining words as “violence” means that we have little recourse for when actual violence occurs.

  The Coddling of the American Mind notes some other concepts that are important as we speak of America’s obsession with “safety” above all else. First, that coddling combined with splintering means that people’s political views are much more like fanatical religious views than anything. They don’t see themselves as having to debate ideas or seek common ground. Rather, the opposing side and its proponents are seen as “dangerous” and must be discredited at all costs. It is worth noting that this is much more common among the left than the right or the center, which has now become more the place where “live and let live” types congregate.

  The problem with this goes beyond simply being irritated by irrational people barking at you or at someone else: There is an entire generation of people who are seriously lacking in critical thinking skills. They think that labelling people and name-calling are excuses for a reasoned argument. In the words of Voltaire, “Those who can make you believe absurdities can make you commit atrocities.”

  These problems are hardly confined to political radicalism or academia. Indeed, the corporate sector is no stranger to this kind of safety obsession. There is the phenomenon of “woke capital,” where the corporations find the latest celebrity cause-du-jour and use it as a marketing strategy.

  There is currently an extreme risk aversion in management science. Companies will now do basically anything to avoid “a kid getting hurt” or someone’s delicate sensibilities being offended.

  Education from kindergarten up to the universities is increasingly about teaching doctrines and ideology, rather than critical thinking and problem solving skills. All of this is a dangerous admixture that combines the full weight of the academic, cultural and business elites in this country. And its consequences are far reaching.

  Trigger Warnings and Safe Spaces

  For those unaware, a “trigger warning” is a person’s advisory that disturbing content is going to be posted. However, in an example of concept creep, the meaning of “disturbing” has become expanded to mean, well, just about anything that might offend a leftist. It is also sometimes known as a “content warning,” “TW” or “CW.”

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  A similar concept is that of a “safe space.” What used to be a term used for a place where people in actual danger of physical harm could express themselves, a “safe space” now means a place where there is no room for disagreement or questions because language is literally violence.

  This might all sound very silly and we definitely agree that it is. However, it is quickly becoming de rigeur not just in academia, which is increasingly functioning as a bizarre combination of a daycare center for 21 year olds and an indoctrination program, but also in the corporate world and in the media.

  It’s not surprising that such foolishness has reached our corporate elites, because so many figures within that world come from the Ivy League. Harvard Law, for example, was the center of a controversy where they were urged not to teach rape law or even use the word “violate” (which makes it pretty hard to talk about violations of the law). A Harvard professor argued that greater anxiety among students to discuss complicated and nuanced séxual assault cases was impeding the ability of professors to adequately teach their students. This in turn would lead to poorly prepared attorneys for rape victims in the future.

  Beyond a simple discussion in the academic sphere, there are student groups on campus who urge students not to attend or participate in class discussions focused on séxual violence. The same student groups advocate for warning students in advance so they can skip out on class and even to exclude “triggering” material from tests. Once again, the real victims here are the victims of séxual assault whose attorneys will be ill-prepared to advise them, to say nothing of the cumulative effect on the prosecutorial environment.

  Northwestern University professor Laura Kipnis was subject to a lengthy investigation by a kangaroo court and frivolous Title IX complaints over an article she wrote for The Chronicle of Higher Education about campus séx panics. Top comedians like Chris Rock now refuse to perform on college campuses, a place that has typically been their bread and butter.

  Another key term to understand here is “microaggressions” which means just about anything. Offensive statements under this umbrella include things like “I don’t see race,” “America is the land of opportunity” and “I believe the most qualified person should get the job.”

  To readers of Generation X or older, this all might sound like a resurgence of political correctness and, indeed, to some extent it is. However, there is something different about the current anti-speech craze sweeping not just campuses, but also boardrooms: Political correctness was, at least in theory, about the elimination of so-called “hate speech” (for example, using “mentally disabled” instead of “retarded” or “little person” instead of “midget”) and also about broadening the canon of literature to include more women and minorities.

  One doesn’t need to agree with either objective or be as generous as we are to see that the West has entered a new, accelerated and intensified version of the old political correctness that is qualitatively more dangerous. The “safe spaces” phase of this is about eliminating anything and everything that might be emotionally troubling to students on campus.

  This assumes a high degree of fragility among American college students. But perhaps this assumption isn’t totally off base.

  The Road to Safety Obsession

  If you were born before 1985 or so, your childhood was vastly different than of those born after you. As a child, you probably came and went as you pleased, letting your parents know where you were going, who you would be with and when you might be home. You rode your bike without a helmet and if you were bullied at school there’s a good chance that you view this as a character-building experience, not one of deep emotional trauma.

  So what happened?

  A few things. First, in 1984, the “missing child” milk carton was introduced. America became obsessed with child abduction in response to several high-profile child kidnappings over the period of a few years. Etan Platz, Adam Walsh and Johnny Gosch are just three of the names known to Americans during this time period. In September 1984, the Des Moines, Iowa-based Anderson Erickson Dairy began printing the pictures of Johnny Gosch and Eugene Martin on milk cartons. Chicago followed suit, then the entire state of California. In December 1984, a nationwide program was launched to keep the faces of abducted children front and center in the American mind.

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  The milk cartons didn’t find many kids, but they did create the panic of “stranger danger,” where children were taught to fear strangers even though the lion’s share of child abduction, molestation and abuse comes from friends, family and other trusted figures such as public school teachers or camp counselors. Most missing children in America are runaways and in 99 percent of all child abductions, the perpetrator is a non-custodial father. There is at least one case of “stranger danger” being harmful – a lost 11-year-old Boy Scout who thought his rescuers were looking to kidnap him.

  Some of the protocols established out of this were useful, such as AMBER Alerts and Code Adam. Awareness of child abduction in general was raised and as a result there’s significantly fewer child abductions today than there were in 1980. Indeed, stranger abduction is incredibly rare in the United States. But this has come with a dark side.

  You might be familiar with the myriad of cases in suburban America where children playing alone are arrested by the police because they don’t have adult supervision. The parents are then questioned by the police or, in some cases, the state’s Child Protective Services.

  There was also the panic after the mass shooting at Columbine High School, which led to the bubble wrapping of schools alongside the home. “Zero tolerance” policies were implemented alongside school-wide peanut butter bans.

  And so the result is that there are at least two generations of American children raised in a protective net so tight that they not only have trouble expressing themselves, but also being exposed to failure and discomfort. What began as a good-faith effort to prevent child abduction and increase overall child welfare has ended up, as a side effect, creating a world where children were raised in such safety that they can’t even handle being upset.

  This has not only insulated children from the consequences of their own actions and the normal pains of growing up, but also gives the impression that no matter what their problems, “adults” are ready to step in and save the day at any moment.

  It’s worth noting that, in recent years, there has been a sharp rise in mental illness among young people, both on campus and off, including those with severe mental health problems.

  Cops and the 24-Hour News Cycle

  There are two other cultural phenomena worth exploring: The television series Cops and the 24-hour cable news cycle. As of April 2020, Cops is still on the air, having moved from Fox to Spike TV in 2013.

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  Cops was more than just a TV series, it was a cultural phenomenon that changed television. The cinéma vérité style used by the show was to be copied in the 90s by virtually every reality show you can name. Curiously, it came out around the same time that crime rates had plummeted comparatively to the 70s and 80s. And just at that time, people started having the worst in human behavior beamed into their homes for entertainment every Saturday night.

  At the same time, CNN was bringing news into your home 24 hours a day without end. This meant they had to fill programming around the clock – and most news is bad news. So in addition to a hugely popular program centered around chasing criminals in the act, Americans also had a constant stream of bad news and dangerous events pumped into their homes. The result was the end of the “free range child,” the kind who learned through play and discovered risk management through trial and error. This was replaced with children whose entire existence was micromanaged by adults, with little to no unsupervised play time.

  The ability to learn through failure is a well-established principle going back to the Greeks, who called it pathemata mathemata (“guide your learning through pain”). The knowledge and wisdom gained through failure and pain are arguably more lasting and valuable than those learned in school.

  The Generation Gap: Millennials and Gen Z

  Older generations (Generation X and Baby Boomers) have a tendency to conflate Millennials and Gen Z (also known as “Zoomers”). However, there are two key differences, one cultural and one clinical: First, Zoomers are much more digital natives than their Millennial counterparts. They didn’t get constant internet access or mobile access at college. They’ve had it since they were in middle school in many cases.

  While this is bound to create secondary cultural differences, we know of one clinical difference between Millennials and Zoomers: Zoomers are much more prone to mental illness, specifically depression, anxiety, alcoholism and self-harm.

  Depression and anxiety in particular are through the roof for girls, with moderate increases for boys. While self-reported cases are up, we also have harder clinical data: There has been a 62 percent increase in hospital admissions.

  The Baby Boomers and Gen Xers created an environment where it is safer than ever to be a child, but at what cost? There has been widespread and verifiable psychological damage done to the younger generation, which is likely being compounded by the coddling taking place in our nation’s universities.

  Screen Time and Social Media

  “Screen time” is the new obsession for parents, especially among, ironically, those who work in high-tech Silicon Valley jobs such as Steve Jobs, father of the iPhone. But there seems to be an emerging consensus among those who have actually studied the topic that the problem isn’t “screen time” per se, but rather the more specific use of it in the form of social media. This has been identified as the cause of depression and anxiety, particularly among girls.

  Why is social media usage particularly impactful among girls? Dr. Haidt and others postulate that it’s because they are more sensitive to the “perfect” lives being lived by beautiful social media influencers – at least the lives that they lead online. What’s more, there is a lot of exclusion and bullying taking place on social media. In days past, you only heard about the party you didn’t get invited to, but now you get to watch it unfold in real time on Snapchat or other platforms. And cyberbullying is much harder to track and police than its real world equivalent.

  There’s a related bubble wrapping going on with regard to a different sort of screen time: Kids today are often forbidden from playing with plastic guns or even finger guns. There is the notorious case of the 7-year-old child who was suspended for biting a Pop Tart toaster pastry into the shape of a gun. But millions of children come home (from the same schools where finger guns can warrant a suspension) to play Grand Theft Auto for hours on end.

  Indeed, there is some evidence that suggests that violent movies and video games can trigger violent thoughts in some, but not all, people who view them. The National Institute of Mental Health has done an extensive study detailing the impact that violent media has on those who view it.

  A Nation Divided

  There’s not much hyperbole in saying that America is barely a single nation anymore. We talk about “red states” and “blue states,” but the divide is much deeper than that. Even the coastal states largely have an urban college-educated Democratic population and a rural non-college-educated Republican population.

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  While some animosity between different areas of the political spectrum, or even resentment of cities by the countryside and vice versa, is nothing new, the rancor took off sharply in the early 2000s following the controversial election of George W. Bush and his expanded imperial presidency after 9/11.

  Social media makes it easier for extremes to amplify their anger. What’s more, it’s much easier for people to become part of an online crusade – or witch hunt – than it is for them to do so without it.

  This is a big part of what is behind the string of disinvitations and protests on American college campuses. No one, especially young people (where “young” means “under 30”), can bear to listen to the opinions of someone they don’t agree with. Disinvitations aren’t limited to highly controversial figures like MILO and Richard Spencer, or even the decidedly much more vanilla Ann Coulter. Condoleeza Rice, the first black female Secretary of State, was disinvited in 2014, as was the first female head of the IMF and the first female finance minister of a G8 nation, Christine Lagarde.

  Because Americans increasingly refuse even to listen to arguments from the other side, inserting instead a strawman in favor of reasoned debate, there is no reason to believe that the American political and ideological divide will not increase.

  The Evolution of Victimhood Culture

  America and the West have largely adopted a victimhood culture. It is worth taking a minute to trace this radical transformation of values in the West from its origins.

  The earliest societies in the West were honor cultures. While it sounds like a no-brainer that we should return to an honor culture, we should unpack precisely what this means. An honor culture usually means a lot of interpersonal violence. Small slights must be dealt with through dead violence – because a gentleman cannot take any kind of stain on his honor. Dueling and blood feuds are common in these kinds of cultures.

  This is superseded by dignity culture. Dignity culture is different, because people are presumed to have dignity regardless of what others think of them. In a dignity culture, people are admired because they have a “thick skin” and are able to brush off slights even if they are seriously insulting. While we might find ourselves offended, even rightfully so, it is considered important to rise above the offense and conduct ourselves with dignity. Everyone heard some variant of “sticks and stones may break my bones but words will never hurt me” growing up as a child. This is perhaps the key phrase of a dignity culture.

  Victimhood culture is concerned with status in a similar manner to honor culture. Indeed, people become incredibly intolerant of any kind of perceived slight, much in the manner of an honor culture. However, in a victimhood culture, it is being offended, taking offense, and being a victim that provides one with status.

  Victimhood culture means that people are divided into classes, where victims are good and oppressors are bad. There is an eternal conflict with eternal grievances that can never fully be corrected or atoned for. People feel the need to constantly walk on eggshells and censor themselves. This leads to an overall emphasis on safety, as even words become “violence” – we need trigger warnings and safe spaces to protect us.

  Victimhood culture is closely associated with safety culture. Safety culture is, above all else, debilitating. Those who choose a marginalized identity – and in the contemporary West, a marginalized identity is almost always a choice – become more fragile and more dependent on the broader society. At the same time, the powerful elements in society gain a stake in reinforcing this marginalized identity. The Great Society provides a case study in this dynamic.

  Those who do not receive the so-called “benefits” of safety culture are frequently more prepared for the real world. Who would you rather hire? Someone who studied hard in a rigorous discipline for four years or someone who spent four years being coddled in what is basically a day care center for twentysomethings? With this in mind, it’s not too big of a leap to see that straight white men might actually have become “privileged” through the process of not having access to the collective hugbox in higher education.

  The Role of Lawyers and Litigation

  There is a relationship with the litigious society in which we live with warning labels everywhere, often for hazards that would seem incredibly obvious to most observant people. In previous generations, even power tools didn’t come with warnings to roll your sleeves up or take off your watch. This information was either common sense or passed along in high school shop classes or on the job.

  However, the American legal system has no penalty for frivolous lawsuits, which has led to an explosion in the number of lawsuits. There is a massive army of lawyers in the United States (which has a surplus of some 40 percent) whose profession revolves around finding aggrieved parties who weren’t properly “warned” – or indeed to be able to help write the warning labels themselves. These labels do not even exist for actual safety. The same type of person who is going to do the thing being warned against is likely the same type of person who doesn’t read warnings. The labels are simply there as a form of “CYA” for the firms who make them.

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  That said, to a certain degree, the “litigious society” is a myth. The oft-cited McDonald’s coffee burn is actually more reasonable than people are aware: The elderly woman in question who was burned simply wanted McDonald’s – who kept their coffee extra hot to prevent people from taking part of their “free refills” policy – to pay for her skin graft resulting from the burn. When McDonald’s refused to settle this out of court and the case went to trial, they were rewarded for their efforts at stonewalling with punitive damages.

  So the main example of frivolous lawsuits is a big strawman. But to be clear – frivolous lawsuits are real. One great example of an actually frivolous lawsuit was the man who sued his dry cleaner for $67 million because they delivered his pants to the wrong person. There was no actual damage here and it’s difficult to express just how ridiculous the dollar figure claimed was. This case was thrown out of court, as most of these types of cases are. Still, litigants pursue them either to get media attention or to harass the defendant or both, a phenomenon known as “lawfare.” And these cases clog up genuine claims in the courts.

  Civil trials are long and drawn-out things. And with 40 million of them in the United States every year and over a million lawyers, it’s unsurprising that the system has become clogged with lawsuits, many of which are either totally frivolous (remember – there’s no penalty for filing a frivolous lawsuit in America) or just the type of thing that should be either settled or handled through binding arbitration.

  While the litigious society exists in parallel to the “safe spaces” of college campuses, it is worth noting because it is part of the larger bubble wrapping of the American landscape. The same kids who were raised with helicopter parents and a general sense that they had a “right” to never be offended were likewise raised in an environment where people could be sued for anything or, at the very least, this was the public perception. It is just another factor of risk aversion in American life.

  There are other consequences of having too many lawyers around and having them congregate within our political class: Words are chosen to obfuscate and laws proliferate, as legislation becomes a sort of “jobs program” for lawyers. The more laws we have, the less free we are and the less social trust we have. As laws, regulations, and agencies take the place of civil society, the state grows at the expense of everything else and the less trust we have in our society.

  Overreacting to the Wuhan Coronavirus

  In 2020, the Wuhan Coronavirus broke out of China and spread all around the world. The world had not seen a deadly, contagious virus with such scope since the Spanish flu pandemic of 1918 to 1920. At first, the response was denial and apathy. However, this quickly gave way to what could be considered a massive overreaction: Shutting everything down.

  There was a certain logic to this: If people gathering together were what was spreading the virus, then simply keep people apart until the whole thing blows over. However, this is also potentially a huge overreaction. It is a medical solution in the driver’s seat without any nod to the economic, social or military consequences that flow from it. Even if one agrees that medical solutions are to be the primary driver, it does not follow that they are the only driver.

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  Because of the lopsided and often hysterical reaction, many of the proposed solutions don’t even make sense: For example, telling everyone they can go to the supermarket while prohibiting them from going to small offices, or shutting down the border between the United States and Canada – two countries with highly infected populations and a sprawling border that is largely unpatrolled.

  A brief disclaimer: None of us are epidemiologists or virologists. And we defer to their superior knowledge on this subject.

  However, during the Spanish flu pandemic, life did not shut down quite so completely as it has during the Coronavirus pandemic. The methods used during the Spanish flu were isolation of the sick, mask wearing in public, and cancellation of large events. In places where these were practiced rigorously, there was a significant decline in the number of infections and death. St. Louis in particular is known as an exemplar of what to do during an easily transmissible epidemic.

  “The economy” has been cited as a reason the total shutdown of life during the Coronavirus pandemic was a poor idea. This might sound frivolous, but the mass unemployment not only leads to destitution for those when the economy is so paralyzed that there are no other jobs forthcoming. It also leads to a spike in the suicide rate. There is a certain calculus that must be done – how much unemployment is worth how much death from Wuhan Coronavirus?

  The reaction to this virus is noteworthy, because it is the first major pandemic of this new, insulated and coddled age. Rather than reasonable measures to mitigate death, the choice made was to do anything and everything possible to prevent death entirely. Not only might this be an unwise decision, it might be a fool’s errand: The virus seems to be much more contagious than was previously thought, as well as much less lethal.

  More than one reasonable person has asked what would happen if we all just went about our lives making reasonable precautions, such as hand washing, mask wearing, social distancing, and the cancellation of large events like sports and concerts. This is effectively what Sweden has done and it appears to work, especially when contrasted with their neighbors in Finland who have done basically the same as America. How much sense does it make to have the entire community converge upon its grocery stores while not allowing anyone to go into an office, ever? Compare this with what has passed for reasonable reaction: Closing down every school, every dine-in restaurant, and the government dictating which businesses are essential and which aren’t.

  A big motivator of this is a compulsion to not lose a single life to the Wuhan Coronavirus, which is a totally unreasonable goal. People are going to die. The question isn’t “how tightly do we have to lock the country down to ensure no one dies,” but rather “what are reasonable measures we can take to balance public safety against personal choice and social cohesion?”

  The splintering and division of America in practice has meant that the establishment conservative media was largely in denial over the virus for weeks. It is not a liberal smear to say that the amount of denialism from establishment conservative media, pundits, think tanks, bureaucrats and elected officials has in practice meant that America responded much more slowly and conservatively than it might have with a more unified America body politic.

  At the beginning of spring 2020, the virus seemed poised to devastate the American South, which largely stuck with the early conservative media denialism, eschewing social distancing, shuttering of certain public places and mask wearing. Again, a more united body politic and the media and trust in the media that goes along with that might have prevented a lot of illness and death.

  Imagine the impact of Walter Cronkite or Edward Murrow going on television and telling the American public to mask up and maintain distance versus the impact of Rachel Maddow and Tucker Carlson doing it.

  What Is Vindictive Protectiveness?

  “Vindictive protectiveness” was a term coined by Haidt and Lukianoff to describe the environment on America’s college campuses with regard to speech codes and similar. However, it can refer more broadly to the cultural atmosphere in the United States and the West today. From the college campus to the corporate boardroom to the office, Americans have to watch what they say and maybe even what they think lest they fall afoul of extra-legal speech and thought codes.

  Perhaps worst of all, an entire generation is being raised to see this not only as normal, but as beneficial. This means that as this generation comes of age and grows into leadership positions, that there is a significant chance that these codes will be enforced more rigorously, not less. And while there may be ebbs and flows (political correctness went into hibernation for pretty much the entire administration of George W. Bush – though to be fair, there was an imperfect replacement in the form of post-9/11 jingoism), the current outrage factory is much more concerning than the one that sort of just hung around in the background in the 1990s.

  Put plainly: the next wave will be worse. We may not have Maoist-style Red Guards in America quite yet, but we’re not far off and the emphasis should be on “yet.”

  
  Tyler Durden
  
  Sat, 05/09/2020 – 22:20

• Some 5,000 People Waiting Out COVID-19 In Frozen, Virus-Free Antarctica
  Some 5,000 People Waiting Out COVID-19 In Frozen, Virus-Free Antarctica

  Antarctica is currently deemed the “safest place in the world” due to it being the only continent with no confirmed COVID-19 cases. 

  Its dark, frozen, and harsh environs keep it cut off from the outside world, apart from researchers, scientists, and the occasional explorer or National Geographic team.

  A new CNN report counts some 5,000 total people at over 80 international bases scattered across Antarctica, who are currently waiting out the pandemic in the remote location and intentionally not returning home until the crisis abates. 

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  One American researcher, Keri Nelson, at the US base Anvers Island’s Palmer Station in a northern part of Antarctica told CNN via email: “I really don’t think there’s a person here right now who isn’t grateful to be here, and to be safe.”

  “Some people are ready to head back home. To help people they love, and to be of use in other ways during this time in history,” Nelson added. “But all of us are very appreciative to be living in a place where this disease (and all of the health and lifestyle implications thereof) are absent.”

  And further, a 29-year old researcher from Scotland, Robert Taylor, described: “It’s like being on the moon and looking down,” CNN reports. “We can see what’s going on, but it’s a long way away.”

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  He arrived at a British station on the icy continent months before the crisis first emerged in Wuhan, China:

  “I remember the reports coming out of China in early January,” says Taylor, who arrived in Antarctica around six months ago.

  “Then the first few UK cases, and thinking that this was something minor and far away, that wouldn’t affect me.”

  “It dawned on me gradually, as it spread and grew in prominence in the media.”

  Antarctica actually in normal times sees a regular annual influx of tourists, mostly via cruise ships and adventure excursion tours.

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  For example 56,168 tourists visited during the 2018 to 2019 season, however, at this point the only people that remain are the thousands of professional researchers and surveyors who will for the time being remain physically cut off from the world. 

  This also considering that to get back they would have to risk traveling back to their homes via multiple international airports and other travel hubs.

  
  Tyler Durden
  
  Sat, 05/09/2020 – 21:55

• Former JPMorgan Economist: We Are Heading Towards A Weimar Republic Inflation Setup
  Former JPMorgan Economist: We Are Heading Towards A Weimar Republic Inflation Setup

  Submitted by a former JPMorgan economist who wishes to remain anonymous

  The everything bubble

  Readers will have anticipated the bursting of the bubble that has been re-inflating ever since 2009. Ultra-loose monetary policy, coupled with deflationary pressures from increased aggregate supply and investors chasing yield at ever higher risk, meant that almost all asset classes had reached all time highs just before entering the current bear market.

  That there is a bubble, a massive one, is unquestionable. Readers will further have anticipated that it didn’t have to be a global pandemic to burst this bubble. This bubble was practically looking for a prick – any prick – to burst it. Whether it was a credit event, liquidity shortages that led to bankruptcies, a terrorist attack, a natural disaster or a bat: markets had reached a level of fragility where they could not cope with the materialising of such a tail risk event.

  Too much had fueled this fragility: out-of-touch credit ratings, leveraged balance sheets, stock buybacks, expansionary monetary policy and as a result: out-of-control credit and debt.

  📊 WATCH: Two Decades Of Growing Global Debt 📊

  In 2020, a sharp upward trajectory in debt levels looks all but certain. More in the latest IIF Global Debt Monitor: https://t.co/Exj7rDDPpx pic.twitter.com/q0R1vi05DY

  — IIF (@IIF) April 14, 2020

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

  Market outlook

  Expect companies in energy to go bust first. Then retail and hospitality. At some stage their bankruptcies will push creditors into a corner where such lenders will either have to be bailed out or they will drop like flies (Lehman style). Already banks have slowed their credit lines to corporates, like in 2008/2009, anticipating that some of their debtors will fail to repay.

  Sure, with more QE flooding the markets a complete wipe-out may be averted, as there is no political appetite for mass insolvencies (especially in an election year in the US).

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  The bubble has reached a level where systemically relevant banks will be facing their Lehman moment sooner rather than later. Lawmakers will not allow such systemically relevant lenders to go under, as this would practically imply all lights to go out. So the real question at hand is: at what cost?

  • At what cost to prevent the Deutsche Banks of this world from going bankrupt?
  • At what cost to keep the unemployed at bay, because for sure: no job, no income and no prospects are a recipe for turmoil and civil unrest.
  • At what cost to counter big institutional sellers exiting the markets who want cash?
  • At what cost running the biggest budget deficit and current account deficit (in the US)?
  • At what cost managing the havoc from Covid-19?
  • At what cost QE forever?  
  • At what cost etc.

  Crossing the Rubicon

  On April 27, 2020 CNBC ran a story on “Why the coronavirus crisis may prompt central bankers to scrap inflation targeting”.

  If central banks indeed abandon or modify inflation targeting we will certainly be crossing the Rubicon. Admittedly, there is no other way in answering the above questions.

  Policymakers continue to be behind the curve and obviously failed to learn from 2008/2009. Their last resort is printing money and creating more debt. If central banks have no or a soft-washed inflation mandate we are heading towards a Weimar Republic style inflation setup.

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  With global output staying the same or declining, aggregate demand declining significantly and the quantity of money in circulation multiplying (by means of handouts or universal basic incomes), asset prices across asset classes being propped up by central banks, it becomes just a matter of time until inflation goes from ‘subdued’ to ‘out of hand’.

  Asset allocation in this new set up

  With central banks either purchasing corporate bonds or accepting them as collateral, it may be soon until their mandate is being changed to facilitate the buying of equities, too. As other commentators already noted: we may have abandoned free markets and now head to a centrally planned set up.

  The recent pick-up from the March 2020 lows in stock markets will be short lived. Nothing has fundamentally improved, other than emergency liquidity provisions by central banks. Expect a new selloff by year end – re-testing the lows of March – because perfidiously the Fed does not yet own enough corporate debt/equity to control asset prices!

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  Central banks will be printing fiat money on a unprecedented scale. With potentially negative interest rates even in the US, a slowing of global trade and thus reduced supply, the risk of a surprise inflation increases markedly. If and when this feeds through, asset allocation becomes key.

  Look for uncorrelated asset classes or inflation resistant assets. There is a chance central banks will own a good part of cross-sector corporate debt/equity when the dust settles and inflation starts to go through the roof.

  For questions or comments, please get in touch.

  
  Tyler Durden
  
  Sat, 05/09/2020 – 21:30

• Wuhan Biolab Where Coronavirus Was Studied Mysteriously Shut Down In October, Report Claims
  Wuhan Biolab Where Coronavirus Was Studied Mysteriously Shut Down In October, Report Claims

  Another leaked intelligence document has been leaked to the press to help support suspicions that the coronavirus currently ravaging the US and much of the global community may have leaked from a biolab in Wuhan.

  NBC News reports that a document that has been shared among several Republican lawmakers points to evidence that the virus may have emerged even earlier than the global community believes. In recent days, the French government confirmed suspicions that the country’s first case might have arrived as early as December, while in the US, the earliest suspected COVID-19-linked death occurred on Feb. 6, weeks earlier than previously believed.

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  The earliest suspected case in China may have been observed as early as November, some scientists believe, though others doubt the theory. But the report obtained by NBC News cites cellphone activity data showing a complete shutdown of a high-security section of the lab for 2.5 weeks between Oct. 7 and Oct. 24.

  Though it offers no insight into what might have caused the shutdown, and there could be other explanations for the data, it’s certainly some food for thought.

  The report — obtained by the London-based NBC News Verification Unit — says there was no cellphone activity in a high-security portion of the Wuhan Institute of Virology from Oct. 7 through Oct. 24, 2019, and that there may have been a “hazardous event” sometime between Oct. 6 and Oct. 11.

  It offers no direct evidence of a shutdown, or any proof for the theory that the virus emerged accidentally from the lab.

  If there was such a shutdown, which has not been confirmed, it could be seen as evidence of a possibility being examined by US intelligence agencies and alluded to by Trump administration officials, including the president – that the novel coronavirus emerged accidentally from the lab.

  But that is one of several scenarios under consideration by U.S. intelligence agencies. Many scientists are skeptical, arguing that the more likely explanation is that the virus was transmitted to humans through animals in a Wuhan live produce market. The World Health Organization said Friday it believed the “wet” market played a role in the spread of the disease.

  The document asserts that if the virus truly did spread in November and December, then there is reason to suspect that it might have leaked from a lab, or been intentionally released.

  The document doesn’t cite direct evidence to support that assertion. The analysis seems to account for only a tiny fraction of the cellphones that would be expected in a facility that employs hundreds of people. Dr. Just Vlak, a Dutch virologist who visited a nearby satellite facility of the Wuhan Institute of Virology in late November and met with WIV’s head of bio-security, told NBC News that the facility he visited had between 200 and 300 staff.

  The document obtained by NBC News also says that an annual international conference planned for early November in the same lower-security portion of the WIV that Vlak visited appears to have been “cancelled and never took place.” The conference actually went forward as planned. A second version of the document viewed by NBC News is annotated to say that the conference did proceed. No other differences between the two versions of the document were observed.

  For that and other reasons, some officials are skeptical of the analysis, which is based on commercially available cellphone location data. One U.S. official who has seen the document said the data “looks really weak to me and some of the conclusions don’t make sense.”

  Though the document advises that the data it cites are “vague”, NBC notes another earlier piece of evidence purporting to show a shutdown at the lab had been obtained earlier.

  Earlier, U.S. intelligence agencies received reports based on publicly available cellphone and satellite data suggesting there was a shutdown at the lab, two U.S. officials familiar with the matter say. But after examining overhead imagery and their own data, the spy agencies were unable to confirm any shutdown, and deemed the reports “inconclusive.”

  But one Congressional staffer said these reports are getting “another look” by lawmakers.

  Another U.S. official said intelligence agencies may give the data another look in the wake of this new report. And still another intelligence official said there may be more private cellphone location data that could shed further light on the matter.

  Congressional intelligence committees have also been given the document, and Sen. Marco Rubio, R.-Fla., appeared to be alluding to it or a similar report in a tweet on Wednesday.

  “Would be interesting if someone analyzed commercial telemetry data at & near Wuhan lab from Oct-Dec 2019,” Rubio tweeted. “If it shows dramatic drop off in activity compared to previous 18 months it would be a strong indication of an incident at lab & of when it happened.

  At the end of the story, NBC News included a timeline of all the circumstantial evidence being used to support suspicions that the virus may have leaked from a lab. It includes:

  • A Jan. 24 study published in the medical journal The Lancet found that three of the first four cases – including the first known case – didn’t provide a documented link to the Wuhan wet market.
  • The bats that carry the family of coronaviruses linked to the new strain aren’t found within 100 miles of Wuhan — but they were studied in both labs.
  • Photos and videos have emerged of researchers at both labs collecting samples from bats without wearing protective gear, which experts say poses a risk of human infection.
  • A U.S. State Department expert who visited the WIV in 2018 wrote in a cable reported by The Washington Post: “During interactions with scientists at the WIV laboratory, [U.S. diplomats] noted the new lab has a serious shortage of appropriately trained technicians and investigators needed to safely operate this high-containment laboratory.”
  • According to Senate Intelligence Committee member Tom Cotton, R-Ark., the Chinese military posted its top epidemiologist to the WIV in January.
  • The Shanghai laboratory where researchers published the world’s first genome sequence of the coronavirus was shut down Jan. 12, according to The South China Morning Post.
  • According to U.S. intelligence assessments, including one published by the Department of Homeland Security and reviewed by NBC News, the Chinese government initially covered up the severity of the outbreak. Government officials threatened doctors who warned their colleagues about the virus, weren’t candid about human-to-human transmission and still haven’t provided virus samples to researchers.
  • Despite all that, most scientists and researchers believe natural animal-to-human transmission is the most likely scenario.
  •  

  If nothing else, it’s definitely some food for thought.

  
  Tyler Durden
  
  Sat, 05/09/2020 – 21:05

• China, Iran Are On The March
  China, Iran Are On The March

  Authored by James Rickards via The Daily Reckoning,

  There is so much focus on the COVID-19 pandemic right now that Americans can’t be blamed if they’re not spending much time studying other developments.

  That’s understandable, but inattention may be as dangerous as the virus itself. That’s because America’s adversaries are taking advantage of the situation by challenging U.S. interests in a set of geopolitical hot spots.

  They believe we’re too distracted by the virus containment effort to mount a firm response.

  At the same time, geopolitical confrontation is a classic way to rally a population against an outside threat, especially when they’re still hurting from the pandemic and the economic consequences. It’s one of the oldest tricks in the books to get the people behind the government.

  This appears to be the case with China and Iran right now.

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  China in particular is trying to divert attention away from its own cover-up of the pandemic, which allowed it to spin out of control. So it’s engaging in a global propaganda campaign to try to blame the U.S. for the spread of the virus.

  Both China and Iran have lied about the damage caused by the virus in their own countries. China officially reported about 4,600 fatalities and Iran officially reported about 6,200. But reliable sources suggest that the actual count of fatalities may be at least 10 times greater in both countries.

  This could put actual fatalities in China and Iran about equal to the U.S. (over 70,000 dead).

  Meanwhile, the U.S. has been reeling economically, and there’s no reason to believe that China and Iran are feeling any less pain. Let’s first consider China…

  Not surprisingly, China has tried to take advantage of the situation by acting aggressively in the South China Sea and threatening Taiwan.

  The South China Sea is a large arm of the Pacific Ocean surrounded by China, Vietnam, the Philippines, Malaysia, Brunei and Indonesia.

  All six countries have claims to exclusive economic zones that extend several hundred miles from their coastlines.

  Parts of the sea are international waters governed by the Law of the Sea Convention and other treaties. All of the other nations around the South China Sea have rejected China’s claims. But they’ve been pushed back to fairly narrow boundaries close to their coastlines.

  China has ignored all of those claims and treaties and insists that it is in control of the entire body of water including islands, reefs and underwater natural resources such as oil, natural gas, undersea minerals and fisheries.

  China has also become even more aggressive by designating the South China Sea reefs as city-level administrative units to be administered by mainland China.

  And China has pumped sand onto reefs to build artificial islands that have then been fortified with airstrips, harbors, troops and missiles.

  China has said it will never seek hegemony, but that’s clearly not true. It most certainly seeks hegemony in the region.

  And it’s willing to enforce it. Several encounters have happened lately where Chinese coast guard vessels have rammed and sunk fishing boats from Vietnam and the Philippines.

  But China’s aggression in the South China Sea can also jeopardize U.S. naval vessels.

  The U.S. operates “freedom of navigation” cruises with U.S. Navy ships to demonstrate that the U.S. also rejects China’s claims. It’s not difficult to envision an incident that could rapidly escalate into something serious.

  It’s also fair to assume that a weakened U.S. Navy has emboldened Chinese actions recently.

  The two aircraft carriers the Navy has in the western Pacific, the Theodore Roosevelt and Ronald Reagan, were both taken out of action due to outbreaks of the coronavirus among their crews. That’s been a dramatic reduction in power projection in the region.

  But neither side will back down, as neither wants to appear weak. This makes warfare a highly realistic scenario. It’s probably just a matter of time.

  Meanwhile, Iran has harassed U.S. naval vessels in the Persian Gulf, launched new missiles and continued its support of terrorism in Iraq, Yemen and Lebanon.

  These actions are more signs of weakness than strength, but they are dangerous nonetheless.

  In the past 10 years, we’ve been through currency wars, trade wars and now pandemic.

  Are shooting wars next?

  Pay attention to China, Iran and, yes, North Korea. They haven’t gone away either.

  The world is a dangerous place — and the virus has only made it more dangerous.

  
  Tyler Durden
  
  Sat, 05/09/2020 – 20:40

• Distraction? Obama Smack-Talks Trump's "Chaotic Disaster" Virus Response As Russia Hoax Exposed
  Distraction? Obama Smack-Talks Trump’s “Chaotic Disaster” Virus Response As Russia Hoax Exposed

  Having refused to publicly criticize President Trump by name over his handling of the coronavirus outbreak, President Obama reportedly slammed Trump during a private call, the details of which were “leaked” to the press (though we suspect the Obama camp had a hand in their dissemination), just days after his administration was exposed for colluding to entrap Flynn with a Russia collusion hoax to ouster President Trump.

  Distraction, much?

  <!–[if IE 9]><![endif]–>

  Here’s more from Bloomberg:

  Former President Barack Obama delivered a blistering attack on Donald Trump’s handling of the coronavirus pandemic, calling it “an absolute chaotic disaster” as well as “anemic.”

  Obama’s remarks, first reported by Yahoo News, came in a leaked call as the former president exhorted members of his administration to rally behind presumptive 2020 Democratic nominee Joe Biden. The comments were perhaps the most scathing criticism Obama has yet delivered of his successor in the White House.

  Critics have said the U.S. government wasted precious time in February by failing to ramp up testing and stockpile supplies as the coronavirus spread in Europe. The U.S. now leads the world in confirmed Covid-19 infections, with nearly 1.3 million as of Saturday. More than 78,000 have died in the U.S. from the virus.

  However, Trump has defended his handling of the pandemic, repeatedly highlighting his Jan. 31 decision to impose travel restrictions barring most non-U.S. citizens from entering the U.S. after recent visits to China.

  “President Trump’s coronavirus response has been unprecedented and saved American lives,” White House press secretary Kayleigh McEnany said in a statement on Saturday.

  “While Democrats were pursuing a sham witch hunt against President Trump, President Trump was shutting down travel from China. While Democrats encouraged mass gatherings, President Trump was deploying PPE, ventilators, and testing across the country.”

  Obama, in Friday’s remarks, cast the U.S. response to the virus as an outgrowth of tribalism as he sought to emphasize the urgency of the November election.

  Those are some big words from a president whose strategy of appeasement toward China helped pave the way for President Trump’s historic electoral upset.

  The Obama leak makes us wonder: Is this how Joe Biden’s campaign strategists are planning to proceed? just let everybody else speak for Biden, since when he tries to speak for himself…

  Biden just doesn’t make sense anymore.

  pic.twitter.com/xZYvDB5nVx

  — Benny (@bennyjohnson) May 4, 2020

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

  …often, it doesn’t work out so well.

  His campaign has been mocked for holding a $50,000 “virtual dinner” with Hillary Clinton to try and raise money, as Biden scrambles to catch up with the Trump war chest. Unlike last cycle, President Trump is expected to far outspend his Democratic competitor, who has said he will only serve one term if elected, meaning that no matter what, 2024 is going to be a wide-open contest.

  Polls should always be taken with a grain of salt, but a growing body of data is showing Trump with a slight edge over Biden in the swing states that will probably decide the election (the Wisconsins and the Michigans, where Trump’s margin of victory over Clinton was razor-thin).

  WOW. According to this @civiqs/@dailykos poll, Biden has a lower favorability rating than Hillary Clinton did at this point in 2016. Her favorability dipped below Trump’s in the last week leading up the election. pic.twitter.com/kJZ1FvF7b5

  — Tyler O’Neil (@Tyler2ONeil) May 6, 2020

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

  Which means Biden, despite being a relatively “likeable” white male grandfather figure, might actually do worse than Hillary Clinton, especially as yesterday’s jobs report showed these same swing states have been most badly battered by the lockdowns, and will almost certainly blame Democrats for any economic woes caused by the coming economic downturn.

  And who can forget Biden’s glitch-plagued Zoom “virtual rally”. When the tech problems weren’t flaring up, a loud bird managed to drown Biden out, winning his campaign staff comparisons to ‘senior citizens trying to figure out how to use Zoom for the first time’. Though at least that’s a relatable feeling for many voters, it doesn’t exactly inspire confidence in Biden’s ability to run the country.

  
  Tyler Durden
  
  Sat, 05/09/2020 – 20:15

• 'Murica: From Overstretch To Collapse
  ‘Murica: From Overstretch To Collapse

  Authored by Daniel Lazare via Off-Guardian.org,

  In less than three decades, a mere blink of the eye in historical terms, the United States has gone from the world’s sole superpower to a massive foundering wreck that is helpless before the coronavirus and intent on blaming the rest of the world for its own shortcomings. As the journalist Fintan O’Toole noted recently in the Irish Times:

  “Over more than two centuries, the United States has stirred a very wide range of feelings in the rest of the world: love and hatred, fear and hope, envy and contempt, awe and anger. But there is one emotion that has never been directed towards the U.S. until now: pity.”

  Quite right. But how and why did this pitiable condition come about? Is it all Donald Trump’s fault as so many now assume? Or did the process begin earlier?

  <!–[if IE 9]><![endif]–>

  The answer for any serious student of imperial politics is the latter. Indeed, a fascinating email suggests that the tipping point occurred in early to mid-2014, long before Trump set foot in the Oval Office.

  Sent from U.S. General Wesley Clark to Philip Breedlove, Clark’s successor as NATO commander in Europe, the email is dated Apr. 12, 2014, and concerns events in the Ukraine that had recently begun spinning out of control. A few weeks earlier, the Obama administration had been on top of the world thanks to a nationalist insurrection in Kiev that had chased out a mildly pro-Russian president named Viktor Yanukovych. Champagne glasses were no doubt clinking in Washington now that the Ukraine was solidly in the western camp. But then everything went awry. First, Vladimir Putin seized control of the Crimean Peninsula, site of an all-important Russian naval base at Sevastopol. Then a pro-Russian insurgency took off in Donetsk and Luhansk, two Russian-speaking provinces in the Ukraine’s far east. Suddenly, the country was coming apart at the seams, and the U.S. didn’t know what to do.

  It was at that moment that Clark dashed off his note. Already, he informed Breedlove, “Putin has read U.S. inaction in Georgia and Syria as U.S. ‘weakness.’” But now, thanks to the alarming turn of events in the Ukraine, others were doing the same. As he put it:

  “China is watching closely. China will have four aircraft carriers and airspace dominance in the Western Pacific, within 5 years, if current trends continue. And if we let Ukraine slide away, it definitely raises the risks of conflict in the Pacific. For, China will ask would the U.S. then assert itself for Japan, Korea, Taiwan the Philippines the South China Sea?

  …[I]f Russia takes Ukraine, Belarus will join the Eurasian Union, and, presto, the Soviet Union (in another name) will be back…

  …Neither the Baltics nor the Balkans will easily resist the political disruptions empowered by a resurgent Russia and what good is a NATO ‘security guarantee’ against internal subversion?

  …And then the U.S. will find a much stronger Russia, a crumbling NATO and [a] major challenge in the Western Pacific. Far easier to [hold] the line now in Ukraine than elsewhere later” [emphasis in the original].

  The email speaks volumes about the mentality of those in charge. Conceivably, the Obama administration still had time to turn things around – if, that is, it had shown a bit of flexibility, a willingness to compromise, and a willingness as well to stand up to the ultra-nationalists who had led the anti-Yanukovych upsurge and opposed anything smacking of an even-handed settlement.

  But instead it did the opposite. Back in the 1960s, cold warriors had argued that if Vietnam “fell” to the Communists, then Thailand, Burma, and even India would follow suit. But the proposition that Clark now advanced was even more extreme, a super-Domino Theory holding that a minor ethnic uprising in a part of the world that few people in Washington could find on the map was intolerable because it could cause the entire international structure to unravel. NATO, U.S. control of the western Pacific, victory over the Soviets – all would be lost because a few thousand people insisted on speaking their native Russian.

  Why such rigidity? The real problem was not so much a confrontation mindset as a phenomenon that the historian Paul Kennedy had identified in the late 1980s: “imperial overstretch.” Like other empires before it, the U.S. had allowed itself to become so over-extended after twenty-five years of “unipolarity” that strategists had their hands full keeping an increasingly rickety structure together. Nerves were on edge, which is why an ethnic uprising that might have been accommodated at an earlier stage of U.S. imperial development was no longer tolerable. Because the rebels had run afoul of U.S. imperial priorities, they constituted a fundamental threat and therefore had to be bulldozed out of the way.

  Except for one thing: the structure was so weak that each new bulldoze operation only made matters worse. Insurgents continued to hold their ground in Donetsk and Luhansk thanks to Russian backing while the government grew more and more corrupt and unstable back in Kiev. In the Middle East, the situation was so confused that U.S. allies like Saudi Arabia and Qatar were channeling money and arms to ISIS as it rampaged through eastern Syria and northern Iraq and advanced on Baghdad. Thanks to the turmoil that U.S. policies were unleashing, millions of desperate refugees would soon make their way to Europe where they would spark a powerful nativist reaction that continues to this day. U.S. hegemony was turning into a nightmare.

  It was no different in an America shaken by Wahhabist terrorism and dismayed by wars in the Middle East that went nowhere yet never seemed to end. Donald Trump rode a wave of discontent into the White House by promising to “drain the swamp” and bring the troops home. Conceivably, he could have done just that once he was in office – if, that is, he had been serious about downsizing U.S. imperialism and was capable of standing up to the CIA. But the “intelligence community” struck back by launching a classic destabilization campaign based on the theme of Russian collusion while Trump’s foreign-policy ideas turned out be even more of a mess than Obama’s.

  So the collapse intensified, which is why America is now such a helpless giant. A crazy man is at the helm, yet the best Democrats can do is put up a candidate suffering from the early stages of senile dementia, who may be a rapist to boot. No one knows how things will play out from this point on.

  But two things are clear. One is that the process did not start under Trump, and the other is that it will undoubtedly continue regardless of who wins in November. Once collapse sets in, it’s impossible to stop.

  
  Tyler Durden
  
  Sat, 05/09/2020 – 19:50

• Weekend Humor: What It's Like To Believe Everything 'The Media' Tells You
  Weekend Humor: What It’s Like To Believe Everything ‘The Media’ Tells You

  Presented without comment for your viewing pleasure….

  Source: AwakenWithJP

   

   

   

   

   

   

   

   

   

   

   

   

   

   

  
  Tyler Durden
  
  Sat, 05/09/2020 – 19:25

• We Now Know Far More About COVID-19 – The Lockdown Should End
  We Now Know Far More About COVID-19 – The Lockdown Should End

  Authored by Gavin Phillips via Off-Guardian.org,

  “This is the largest interference with personal liberty in our history”

  – Lord Sumption

  Virtually overnight our world has turned into a wasteland of closed towns, deserted streets and a few people scuttling along with masks and stricken faces. It’s a place bereft of imagination, the light sucked out; a padded cell in Psych Ward B.

  <!–[if IE 9]><![endif]–>

  The so-called new normal is anything but normal. On March 23rd, when Boris Johnson declared a lockdown in the UK, it was a beyond surreal moment for me. With no debate, our freedoms, social life and jobs were gone.

  The reasons given for the lockdown were to try and save lives, slow the spread of this virus and limit the impact on the NHS. It sounds good until you start to pose searching questions. Confining people to their homes and a complete loss of social life comes with its own set of serious problems. Focusing on Covid-19 means other people needing operations are postponed for months.

  We had heard about other so-called Pandemics that had turned out to be nothing of the sort, Swine flu being one example. What was different about Covid-19? Johnson had seemed to be going the way of putting in some mitigation recommendations, like social distancing, hand washing and isolating of the elderly. Then he changed his mind.

  The reason were the numbers of possible deaths that could occur if a full lockdown was not implemented. The numbers came from a Prof Neil Ferguson of Imperial College, London.

  Ferguson had told the government that according to his computer model, over 500,000 people would die in the UK if they did nothing, 250,000 people would die if he continued with lesser mitigation in place, but allowing businesses to stay open as usual. With a full lockdown, deaths would be 20,000 or less, and the impact to the NHS would be kept to a minimum.

  What immediately struck me was that Ferguson’s computer model is just that, it’s an estimate based on certain data. His projections could be totally wrong, we’ve all heard the expression, garbage in, garbage out. Why on earth would Johnson decide to implement such drastic measures based on a theoretical computer model?

  It was also disturbing to find out that Ferguson has a lot of form for making highly exaggerated claims with his computer models.

  In the 2001 foot and mouth epidemic millions of cows and other livestock were killed and burned based on his models. But Professor Michael Thrusfield, an expert in animal diseases, said Ferguson’s models were ‘not fit for purpose’ (2006) and ‘seriously flawed’ (2012).

  The 2009 Swine Flu outbreak turned out to be one of the most overhyped non pandemics in the history of medicine. Ferguson got that one wrong as well, saying it would probably kill 65,000 people in the UK, but in fact 457 people died.

  I looked for other expert opinions. One of the world’s top Epidemiologists is Sweden’s Dr. [Professor] Johan Giesecke. Sweden is one of a few countries who went with a different approach to the virus.

  Giesecke and his medical team recommended that the elderly and sick should isolate themselves. They recommended social distancing. But restaurants, coffee shops and most businesses would be open as usual.

  In an interview on April 16th with Freddie Sayers of Unherd TV, Giesecke explained the reasoning behind Sweden’s approach:

  Q. Is it correct to call it herd immunity and is that the Swedish strategy?

  Giesecke: It’s not the strategy, but it’s a by-product of the strategy. The strategy is to protect the old and the frail, try to minimize their risk of becoming infected and taking care of them if they get infected. If you do that the way we’re doing it, you would probably get herd immunity in the end, but that’s a by-product, its not the main reason to do it.

  Q. What was your impression of that (Ferguson’s) paper?

  Giesecke: I think it’s not very good… it rests on the assumptions, and the assumptions in that article have been heavily criticised… The paper was never published scientifically, it’s not peer reviewed, which a scientific paper should be. It’s just an internal departmental report from Imperial.

  Q. It’s your impression that it was overly pessimistic?

  Giesecke:Yes, oh yes, very much so.

  Sweden has also helped us in another unforeseen way, by putting Ferguson’s computer model to a real-world test. Ferguson had predicted that with lighter mitigation measures in place, the same as Sweden, the UK would see 250,000 dead. Sweden has a population of just over 10 million, 1/6th that of the UK.

  So according to Ferguson, Sweden’s death rate should be going through the roof right now, at around 35,000+, but its 3,175 as of May 8th. The one thing you can say about Ferguson is this, he stays true to his form.

  [A Swedish research group from the University of Upsalla actually applied the Imperial Model to Sweden, and found it predicted 40,000 deaths “shortly after May 1st, you can read about that here. – Ed.]

  DO WE ACTUALLY KNOW HOW MANY PEOPLE ARE DYING OF COVID-19?

  Every day the media blasts us with the numbers of people who have died from Covid-19, but it’s very misleading. Journalist Peter Hitchens was one of the first professionals to pose serious questions about whether the lockdown was the right path, and also to question how COVID-19 deaths were being recorded.

  Both in the UK and the USA, it has been openly admitted by health officials that anyone dying *with* COVID-19, is being categorized as having died *of* it. Its crucially important that we understand the difference. The fact is that at least 90% of the deaths from COVID-19 are for patients who were already suffering with other serious illnesses. So, if someone dies of a heart attack and they test positive for Covid-19, that is counted as a Covid-19 death.

  Let’s look at this in another way. Every year in the UK people die from Flu. The 2014/15 was one of the worst flu years, killing 44,000 people in the UK. Once again though, the vast majority of them had other serious health issues. We had another bad flu year in 2018 with a different strain, named ‘Aussie’ Flu.

  This raises other important questions about the accuracy of the reported COVID-19 deaths. Did anyone die of regular Flu during March/April 2020? Or is everyone who had flu like symptoms and died, being counted as dying with COVID-19? Pneumonia is more serious than flu; once again, are all pneumonia related deaths being lumped in with COVID-19 deaths?

  This puts the Covid-19 deaths, and how dangerous it is, into a much clearer perspective. It looks like Covid-19 is no deadlier than a bad flu year. This is an opinion shared by several top epidemiologists and other experts, like Dr Sucharit Bhakdi, a specialist in microbiology, who used to work at the Johannes Gutenberg University in Mainz, Germany, Dr John Ioannidis Professor of Medicine, of Health Research and Policy and of Biomedical Data Science, at Stanford University School. (see OffGuardian here and here)

  Doctors in the US are also seeing this skewing of Covid related deaths.

  Dr. Dan Erickson said in a recent interview:

  What’s interesting to me to is, when someone dies in this country right now they’re not talking about the high blood pressure, the diabetes, the stroke. They say did they die from COVID. We’ve been to hundreds of autopsies. You don’t talk about one thing, you talk about co-morbidities… COVID was part of it, it’s not the reason they died folks.

  Also, Dr. John A Lee, a retired professor of pathology and NHS consultant pathologist, has written some excellent articles for The Spectator. Dr. Lee has raised similar concerns about how we are defining the amount of people actually dying
  of Covid-19.

  He also questions the lack of science behind the Lockdown, saying in an interview for Spiked on April 17,

  It is only an assumption that the lockdown is having a big effect on the virus spread, but this is not a known scientific fact. As far as I can see, Sweden, despite not having anywhere near as severe a lockdown as we have had, actually has a very similar curve to ours. And Sweden’s death rate per hundred thousand people is roughly half of ours at the moment.”

  We cannot even trust that the number of Covid19 deaths that are reported daily as actually having died in the previous 24-hrs. There could be a lag of several weeks in the reporting.

  A recent OffGuardian article covers this. In one example for April 10th, it was reported that 980 people had died from Covid19.

  But in reality, there had been just 117 “Covid19 related deaths”, with about 90 additional deaths in Wales, Scotland and Northern Ireland, for a total of 204. The other 776 had died sometime between March 5th and April 8th.

  DEATHS AND SERIOUS SOCIAL ISSUES BECAUSE OF THE LOCKDOWN

  An article in the Telegraph on April 9th by Fraser Nelson said that ministers were becoming concerned about the number of people who would die because of the Lockdown, early estimates put it around 150,000. Another article referred to the massive drop in A&E patients, quote, a 29 per cent year-on-year drop in A&E use, including a 50 per cent drop in heart attack attendances.

  People who are having heart attacks are either too afraid to go to A&E because they think they might catch Covid-19, or think it’s overloaded with Covid-19 patients. The list is long for seriously ill people who have been side-lined by the total focus of the NHS on Covid-19.

  All surgeries, except life-threatening, have been postponed. Most cancer treatments have been postponed, dialysis disrupted or put off. Domestic abuse is up 30% to 50%, suicides, divorces, bankruptcies, the list is very long.

  There are 100’s of NHS medical centres around the UK. Most of them are not seeing patients. Where do the sick people go to see a doctor?

  I think the psychological damage to millions of people, forced into isolation for weeks and months, will only be fully understood in the next 12 to 18 months.

  FREEDOMS STRIPPED AND UNPRECEDENTED POLICE POWERS: WE NOW HAVE A POLICE STATE LIGHT

  Literally overnight our freedoms have been removed. You are only allowed to go out for one form of exercise a day or to buy food or prescriptions. You are encouraged not to go to work, supposedly only key workers (identified by the government) are supposed to work.

  For the first time in our history, every person can be randomly stopped by Police to see if their journey is considered necessary.

  Sunbathing, sitting on a park bench, groups of 3 or more can be questioned and possibly fined. Car trips longer than a few miles to go for exercise can be considered unnecessary, after all, you can simply get exercise walking around your block of flats, right?

  On Twitter there are many videos showing Police overreach. In one video, a family with some children were sitting in a communal grass area by their block of flats. The Police came to fine them for sitting in that area.

  The damage the Police have done to their own reputation within their communities will be felt in the coming months and years.

  ABSURD RULES THAT MAKE NO SENSE

  We are all supposed to be social distancing, staying 2 metres apart, but people can cram onto packed subway trains. Plumbers, electricians and other contractors can come to your home and make repairs, but we cannot visit family or friends who are not in our household. It’s not only blatant stupidity, it also affects us emotionally, being distant from loved ones for months.

  Now we are forced to stand in queues to pick up the most menial of items at supermarkets. Walking around a supermarket is like trying to work an obstacle course, as you dodge people to try to keep the social distancing rule. People treat you as if you may have the Bubonic Plague and often cross the street to avoid you.

  Park benches have red tape around them to stop people from sitting on them. It’s virtually impossible for a virus to be spread from a park bench with sunlight and rain on it daily. Viruses do not survive outside in warmer weather, but still the madness continues.

  YELLOW JOURNALISM

  Yellow Journalism is a label for newspapers that print cheap sensationalized headlines to get more sales, instead of well researched investigative pieces, that is the hallmark of real journalism.

  Leading up to the occurrence of Covid-19 and onwards, the press in the UK have strived to make Yellow Journalism their raison d’etre. They have stoked up the public’s hysteria to manic levels with the worst gutter non-journalism I have ever seen.

  It was a race to the bottom of tabloid trash, each paper trying to outdo the other with hyped up headlines, while whipping the public into a frenzy. All of them predicting a virtual armageddon, a new Black Death that will kill untold millions.

  With a few exceptions, there has been no serious questioning of the governments continued path with the lockdown. The BBC has been the absolute worst, a servile and obedient government servant that simply re-writes press releases.

  If there is one small positive to come out of this appalling lockdown, at least the public now recognizes just how pitiful the mainstream media have become.

  FINAL THOUGHTS

  We are being manipulated with emotional blackmail. Stay home, save lives and protect the NHS. It’s an insidious mind game repeated ad nauseum to keep people quiet, compliant and unquestioning.

  We started lockdown because it was an unknown virus, now we know it’s nothing more serious than other viruses we have endured over 100’s of years; it’s time to end it.

  Sweden’s epidemiologist Prof Giesecke made an interesting statement during his interview. When discussing the number of deaths each country will have from Covid-19, he said, paraphrasing, let’s talk in a year from now and see where we are.

  I’m pretty certain he is referring to not only the deaths from Covid-19, but deaths from the Lockdown. Sweden will not suffer at all in this respect.

  It’s a tragedy when anyone dies, whether it be from (most often with) Covid-19, the flu, a heart attack and many other reasons. We need to get back to seeing our loved ones, get back to work so we can feed our family and many aspects of our lives.

  The NHS needs to start performing much-needed surgeries and helping others who have been side-lined in the last 2 months. Remember, the lockdown is costing lives, how many, we don’t know yet. The lockdown needs to be lifted in stages, as experts have stated, but it should be started immediately and should never return.

  
  Tyler Durden
  
  Sat, 05/09/2020 – 19:00

• China Asked WHO To Delay Pandemic Announcement, Deny Human-To-Human Transmission: German Intelligence
  China Asked WHO To Delay Pandemic Announcement, Deny Human-To-Human Transmission: German Intelligence

  German intelligence has revealed that Chinese President Xi Jinping asked World Health Organization (WHO) Director-General Tedros Adhanom Thebreyesus to cover up the severity of the coronavirus pandemic in January, according to Der Spiegel.

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  During a January 21 conversation – one week after the WHO assured the world there was ‘no clear evidence  of human-to-human transmission’ – Xi reportedly asked Tedros not to reveal that the virus was in fact transmissible between humans, and to delay declaring that the coronavirus had become a pandemic – despite the virus qualifying as one by the WHO’s own former guidelines.

  And while the WHO announced on the 22nd that data collected through their own investigation “suggests that human-to-human transmission is taking place in Wuhan,” which they said more analysis was required “to understand the full extent,” they waited all the way until March 11 to declare the virus a pandemic.

  As Brahma Chellaney of Project Syndicate wrote last month:

  It is now widely recognized that China’s political culture of secrecy helped to turn a local viral outbreak into the greatest global disaster of our time. Far from sounding the alarm when the new coronavirus was detected in Wuhan, the Communist Party of China (CPC) concealed the outbreak, allowing it to spread far and wide. Months later, China continues to sow doubt about the pandemic’s origins and withhold potentially life-saving data.

  In mid-January, the body tweeted that investigations by Chinese authorities had found no clear evidence of human-to-human transmission of the virus. Taiwan’s December 31 warning that such transmission was likely happening in Wuhan was ignored by the WHO, even though the information had been enough to convince the Taiwanese authorities – which may have better intelligence on China than anyone else – to institute preventive measures at home before any other country, including China.

  The WHO’s persistent publicizing of China’s narrative lulled other countries into a dangerous complacency, delaying their responses by weeks. In fact, the WHO actively discouraged action. On January 10, with Wuhan gripped by the outbreak, the WHO said that it did “not recommend any specific health measures for travelers to and from Wuhan,” adding that “entry screening offers little benefit.” It also advised “against the application of any travel or trade restrictions on China.”

  Even after China’s most famous pulmonologist, Zhong Nanshan, confirmed human-to-human transmission on January 20, the WHO continued to undermine effective responses by downplaying the risks of asymptomatic transmission and discouraging widespread testing. Meanwhile, China was hoarding personal protective equipment – scaling back exports of Chinese-made PPE and other medical gear and importing the rest of the world’s supply. In the final week of January, the country imported 56 million respirators and masks, according to official data.

  *  *  *

  It’s no secret that China engaged in a massive cover-up as the Wuhan coronavirus spiraled out of control. At the same time, the CCP allowed tens of thousands of people to travel for the Chinese Lunar New Year.

  As the situation continues to evolve and narratives are shaped, take a close look and remember who’s defending who.

  
  Tyler Durden
  
  Sat, 05/09/2020 – 18:35

• Obama May Want To Call Eric Holder After Virtue-Signaling "No Precedent" For Flynn Motion
  Obama May Want To Call Eric Holder After Virtue-Signaling “No Precedent” For Flynn Motion

  Authored by Jonathan Turley,

  Former President Barack Obama is being quoted from a private call that the “rule of law is at risk” after the Justice Department moved to dismiss the case against former national security adviser Michael Flynn. Obama reportedly told members of the Obama Alumni Association that “There is no precedent that anybody can find for someone who has been charged with perjury just getting off scot-free.” 

  Without doubting the exhaustive search referenced by President Obama, he might have tried calling one “alum”: former Attorney General Eric Holder.  Holder moved to dismiss such a case based on prosecutorial errors in front of the very same judge, Judge Emmet Sullivan. [Notably, CNN covered the statements this morning without noting the clearly false claim over the lack of any precedent for the Flynn motion]

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  The Obama statement is curious on various levels.

  First, the exhaustive search may have been hampered by the fact that Flynn was never charged with perjury. He was charged with a single count of false statements to a federal investigator under 18 U.S.C. 1001. I have previously wrote that the Justice Department should move to dismiss the case due to recently disclosed evidence and thus I was supportive of the decision of Attorney General Bill Barr.

  Second, there is ample precedent for this motion even though, as I noted in the column calling for this action, such dismissals are rare.  There is a specific rule created for this purpose.  Federal Rule of Criminal Procedure 48(a) states the government may dismiss an indictment, information or complaint “with leave of the court.” Moreover, such dismissals are tied to other rules mandating such action when there is evidence of prosecutorial misconduct or fundamental questions about the underlying case from the view of the prosecutors.  I wrote recently about the serious concerns over the violation of Brady and standing court orders in the production and statements of the prosecutors in the case.

  Third, there is also case law.  In Rinaldi v. United States, 434 U.S. 22 (1977) which addressed precedent under Petite v. United States, 361 U.S. 529 (1960) dealing with the dangers of multiple prosecutions.   There are also related cases in Bartkus v. Illinois, 359 U. S. 121 (1959), and Abbate v. United States, 359 U. S. 187 (1959).  The Rinaldi decision involved a petitioner convicted of state offenses arising out of a robbery, who believed that the government should have moved to dismiss a federal offense arising out of the same robbery under the Department’s Petite policy. The Court laid out the standard for such motions.  The thrust of that controversy concerned double jeopardy and dual jurisdictions. However, the point was that the rule is key in protecting such constitutional principles and that courts should be deferential in such moves by the Department: “In light of the parallel purposes of the Government’s Petite policy and the fundamental constitutional guarantee against double jeopardy, the federal courts should be receptive, not circumspect, when the Government seeks leave to implement that policy.”

  There are also lower court decisions on this inherent authority.  For example, in the D.C. Circuit (where the Flynn case was brought), the ruling in United States v. Fokker Servs. B.V., No. 15-3016 (D.C. Cir. 2016) reaffirms the deference to prosecutors on such questions. The Court noted that this deference extends to core constitutional principles:

  “The Executive’s primacy in criminal charging decisions is long settled. That authority stems from the Constitution’s delegation of “take Care” duties, U.S. Const. art. II, § 3, and the pardon power, id. § 2, to the Executive Branch. See United States v. Armstrong, 517 U.S. 456, 464 (1996); In re Aiken Cnty., 725 F.3d 255, 262-63 (D.C. Cir. 2013). Decisions to initiate charges, or to dismiss charges once brought, “lie[] at the core of the Executive’s duty to see to the faithful execution of the laws.” Cmty. for Creative Non-Violence v. Pierce, 786 F.2d 1199, 1201 (D.C. Cir. 1986). The Supreme Court thus has repeatedly emphasized that“[w]hether to prosecute and what charge to file or bring before a grand jury are decisions that generally rest in the prosecutor’s discretion.” United States v. Batchelder, 442 U.S. 114, 124 (1979); see Bordenkircher v. Hayes, 434 U.S. 357, 364 (1978).

  Correspondingly, “judicial authority is . . . at its most limited” when reviewing the Executive’s exercise of discretion over charging determinations.  . . . The Executive routinely undertakes those assessments and is well equipped to do so.”

  Fourth, there are cases where the Department has moved to dismiss cases on grounds of prosecutorial misconduct or other grounds touching on due process, ethical requirements or other concerns.  One that comes to mind is United States v. Stevens where President Obama’s own Attorney General, Eric Holder, asked the same judge in the Flynn case to dismiss that case.  That was just roughly ten years ago.  As with Flynn, there was an allegation of withheld evidence by prosecutors.

  At the time of the motion Holder declared “The Department of Justice must always ensure that any case in which it is involved is handled fairly and consistent with its commitment to justice. Under oftentimes trying conditions, the attorneys who serve in this Department live up to those principles on a daily basis.”  What is obvious is the new guidelines issued at the time were honored in the breach during the Flynn prosecution.

  While people of good faith can certainly disagree on the wisdom or basis for the Flynn motion, it is simply untrue if President Obama is claiming that there is no precedent or legal authority for the motion.

  The rare statement by President Obama is also interesting in light of the new evidence. As I discussed in a column this morning in the Hill newspaper, the new material shows that Obama was following the investigation of Flynn who he previously dismissed from a high-level position and personally intervened with President Donald Trump to seek to block his appointment as National Security Adviser. Obama reportedly discussed the use of the Logan Act against Flynn. For a person concerned with precedent, that was also a curious focus.  The Logan Act is widely viewed as unconstitutional and has never been used to successfully convicted a single person since the early days of the Republic.  Now that is dubious precedent.

  
  Tyler Durden
  
  Sat, 05/09/2020 – 18:10

• Civilian Airliner & Fuel Depot Burst Into Flames As Libyan Airport Comes Under Attack
  Civilian Airliner & Fuel Depot Burst Into Flames As Libyan Airport Comes Under Attack

  We reported earlier how the long-running Libyan proxy war 2.0 just got hotter given now the United States is directly blaming Russia for inflaming the conflict which has seen pro-Haftar forces lay siege to the capital of Tripoli for over the past year. Both Turkey and Russia have recently come under fire for transferring thousands of mercenaries to opposing sides of the war.

  On Saturday massive explosions rocked Tripoli’s only functioning international airport after Haftar’s Libyan National Army (LNA) fired “dozens of rockets” on the sprawling complex, reports Al Jazeera. 

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  Images of the attack showed huge fireballs at Mitiga International Airport reaching into the sky, also as jet fuel tanks at the airport were also directly hit, according to a statement from Libya’s National Oil Corp (NOC).

  At least one civilian airliner belonging to Libya Airlines was also reportedly destroyed, though surprisingly and thankfully no civilians were reported killed or injured. 

  Over the past years of internecine war fighting has on multiple occasions approached the airport, in some recent cases sending panicked civilians fleeing and abandoning their bags, and having to disembark aircraft. 

  #Libya– more #GNA photos of aftermath of #LNA shelling of Mitiga Airport in #Tripoli pic.twitter.com/lBXHNVlNRy

  — Oded Berkowitz (@Oded121351) May 9, 2020

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  Some sources reported that during Saturday’s attack up to 80 rockets were fired by the LNA.

  “Haftar’s forces say that there is a drone launcher in that airport… Turkish drones to target Haftar forces’ locations in the south and many other locations,” an Al Jazeera correspondent said. 

  The aviation fuel depot at Mitiga Airport was destroyed and a Libyan Airlines plane was damaged in warlord Haftar’s systematic rocket attacks on Saturday pic.twitter.com/pTnxR3soPT

  — The Libya Observer (@Lyobserver) May 9, 2020

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  Haftar’s LNA has alleged that the Turkish Armed Forces inside Libya are using the civilian airport has a major headquarters, also from which to launch drone attacks.

  Turkey has been the biggest military backer of Tripoli’s UN-recognized Government of National Accord (GNA), while the UAE has been Haftar’s single largest supplier of weaponry. 

  
  Tyler Durden
  
  Sat, 05/09/2020 – 17:45

• Morgan Stanley: The Feedback Loop Mechanism That Levitated Markets In Recent Years Is Broken
  Morgan Stanley: The Feedback Loop Mechanism That Levitated Markets In Recent Years Is Broken

  By Chris Metli of Morgan Stanley Quantitative Derivative Solutions

  The March 2020 equity selloff ushered a huge volatility shock that caused unprecedented losses for short volatility strategies.  The impact is likely bigger than just a one-time hit to P/Ls though – after these losses, volatility sellers have pulled back, and it will take a long time for new strategies to form and for assets to grow. 

  Lower volatility supply has broad implications because it threatens to break the positive feedback loop that boosted markets over the last few years: volatility selling put dealers into long gamma positions, which dampened realized volatility, which drove buying from vol target investors (and allowed greater leverage for investors of all stripes).

  This was the third material event for vol sellers in two years (Feb 18, Dec 18, and Mar 20) – after each event one type of strategy was knocked out, and volatility supply migrated to another area:

  • Feb 2018 – In the 6 months prior to the VIX blowup retail was selling ~$12mm vega a month via VIX ETPs, but the near-death experience for VIX ETPs on Feb 5th 2018 killed that trade.
  • Dec 2018 – In 2018 iron condor selling strategies likely sold $20bn notional of condors a month and average net gamma supply in S&P 500 options was ~$13bn per month from April through September, but the December 2018 selloff forced most of the condor funds to lock in losses on the lows and AUM fled.
  • March 2020 – In 2019 the dominant vol supply came from more active strategies that tended to more dynamically manage exposures, but some were forced to lock in losses on the lows as strategies were risk managed.

  The risk is that after this latest (and largest) event, asset owners still looking for short volatility exposure may have few places to turn to in the near-term.  Vol fell quickly from its March peak, but that pace of decline can’t be extrapolated into the future.  Forced unwinds of short vol positions caused a supply/demand imbalance and vol spike that was unsustainable – then opportunistic sellers came in, the unwinds stopped, and vol fell sharply.  But those opportunistic traders are not dedicated vol sellers and won’t stay for the long haul – further declines in vol will require dedicated, systematic sellers who regularly supply vol to the market to come in.  They will be back (in fact this is a great time for the strategy given less supply now, a theme the MS Cross Asset Strategy team has highlighted in Overwrite Across Asset Classes from Apr 22nd 2020) – but that base of dedicated vol sellers will be slow to build, which means that volatility declines more slowly from here, which means that systematic strategy re-leveraging will come more slowly as well.

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  History shows that supply/demand dynamics usually shift after volatility spikes – after major turning points in volatility the implied-realized spread usually remains elevated for a few years before falling back to pre-shock levels (i.e. implied volatility does not fall as fast as realized vol does).  On the demand side some investors hedge more on fears of a repeat of the recent past, while on the supply side there are usually fewer volatility sellers as capital generally follows positive returns, not losses.  While it is still early in this episode, over the last month the magnitude of the gamma supplied to the market has been modest, suggesting a similar pattern is developing.

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  And it’s not just outright vol sellers that suffered in March – relative value vol strategies that use SPX as the funding leg (i.e. selling SPX volatility) to either buy single-name vol (i.e. dispersion trades) or buy volatility on non-US indices suffered as well.  This forced covering of the short SPX vol leg, but the bigger issue is that many strategies have been forced out of the market, so there is now less capital able to take advantage of the fact that the correlation between single-names implied by the S&P 500 options market is in the 95th %ile or S&P 500 volatility that trades 5 vols over rest-of-world averages.  With it harder to recycle the volatility selling that occurs outside the US via autocallable products back into the larger US market, the relative cheapness of ex-US vol (driven by greater local vol supply) relative to S&P 500 vol could be sustained for some time (ask for more details on autocallables).

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  A natural question is how did VIX fall by over 50% if there are no vol sellers after March?  It’s not that there are no sellers – there has been plenty of opportunistic vol selling.  But those traders have now made the easy money and many won’t stick around for long.  To drive volatility back to ‘normal’ levels i.e. sub-20 on the VIX, the market needs steady, regular supply from dedicated players.  Many ‘simpler’ strategies like vanilla overwriting or underwriting actually fared better in March than they did in 2008, in contrast to the industry performance shown in the first chart above – and those strategies will attract assets – but that flow takes time to build, and as a result volatility will be slow to fall.

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  There are of course other market dynamics besides vol supply at play, some that support higher realized vol and some that suggest vol should be lower.  Reduced near-term buybacks and lower liquidity are similar to having less vol supply in that they should contribute to higher realized vol.  On the other side is the large and growing Fed put (even if that strike is farther OTM after this rally) and the fact that the demand for volatility is down as well.  One large regular VIX call  buyer has publically said they would step aside until volatility declines meaningfully, while other large buyers of S&P 500 downside have generally been monetizing hedges since March, not adding to them.

  Volumes in index options (including VIX) are down sharply as a result of the simultaneous decline in supply and demand.  To be clear QDS is not arguing for higher volatility here given some of those offsets – but rather making the case that it should take a while for volatility to fully normalize from current levels.

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  A slower decline in volatility means that leverage from systematic strategies (Vol Target Funds, CTAs, Risk Parity Funds) should be slow to build. Those investors sold over $500bn in global equity from late Feb through early April, and while that will need to be bought back at some point, but lower volatility is required to drive reinvestment.  It took almost two years after August 2015 for these investors to build back to peak leverage, and one year after December 2018. 

  This rebuild could be slower because the feedback mechanism is broken: over the last 10 years the pattern has been:

  • investors sell options ->
  • dealers are put into a long gamma position ->
  • which suppresses realized volatility as dealers sell rallies and buy dips ->
  • which allows systematic strategies to lever up since most models are driven by realized vol.

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  QDS forecasts that demand over the next three months from systematic strategies would average $1bn / day at 30% realized volatility (in-line with VIX), $1.5bn / day at 20% realized volatility, and $2bn / day at 10% realized volatility.  The 20% to 30% range is much more likely in QDS’s view than the 10% case, and investors should not expect too much demand from systematic strategies in the near-term (although positioning is light more broadly as well, and discretionary investors could be buyers).  Lower volatility supply also means dealer gamma positions will be on the smaller side (a few $bn / 1%) which likely means the market on net should remain slightly short gamma due to the levered ETF balances (short about $1bn / 1% on net).

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  Tyler Durden
  
  Sat, 05/09/2020 – 17:20

• Questions Swirl As To Why Small-Business Emergency Lending Drops 
  Questions Swirl As To Why Small-Business Emergency Lending Drops 

  It’s becoming increasingly clear that a quick economic recovery is not in the cards this year. That’s a very big problem for struggling small businesses, who need emergency loans from the coronavirus relief program to stay afloat. 

  As Bloomberg reports, the pace of processing loans from the Paycheck Protection Program (PPP) has “slowed abruptly,” suggesting the second round of relief could soon be exhausted. 

  The first round of PPP was quickly depleted in April in under two weeks. The total size of the program was about $349 billion, which fed $30 billion in emergency loans to companies affected by virus-related shutdowns each day for the duration of the 13 days of operation. The program was relaunched on April 27, with about $320 billion for companies, exhausting about 55% of the funds in the first five days. The daily pace of loan processing has dramatically slowed from $35 billion to $11 billion to now a daily pace of about $2.3 billion. 

  Many questions remain as to why the rapid decline in loan processing has been seen: 

  “The slowdown has raised a fresh question: Why? Groups representing small businesses and lenders pointed to several possible factors, including the processing of a backlog of applications from the first round; the removal of duplicates from borrowers who applied at more than one bank; and the wariness of some firms applying after the Trump administration warned that companies that take loans and don’t need them could face criminal prosecution,” Bloomberg 

  Here’s a visual take on the plunge in PPP loan processing from May 2-8: 

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  Marco Rubio, chairman of the Senate Committee on Small Business and Entrepreneurship and one of the creators of the loan program, said the decline in loan processing could be a combination of things, including the lack of how the funds can be spent and public backlash from the first program of how larger companies were receiving the funds rather than mom and pop shops. 

  Demand for #PPPloans has slowed down for two reasons:
  1. Lack of clear guidance yet on exemptions from requirement that 75% be used for payroll in 8 weeks;
  2. Scrutiny over what businesses received loans turned into hysteria & is scaring many from applying https://t.co/sZZTgQUx6s

  — Marco Rubio (@marcorubio) May 8, 2020

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  Rubio touched on the importance of the PPP program: 

  Last month unemployment hit 14.7 & 20 millions jobs were wiped out

  This is terrible & unsustainable

  But without #PPP an additional 25 to 30 million jobs could have been lost

  If 20 million lost jobs is unfathomable just imagine what 45 million lost jobs would be

  — Marco Rubio (@marcorubio) May 8, 2020

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  As of Friday evening, he noted that round 2 of PPP “as made 2,545,571 #ppploans for $187.1 billion of the $310 billion available. The average loan amount continues to drop. Now down to  $73,512.” 

  As of 5pm tonight round two of #PPP has made 2,545,571 #ppploans for $187.1 billion of the $310 billion available.

  The average loan amount continues to drop. Now down to $73,512

  — Marco Rubio (@marcorubio) May 9, 2020

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  Another reason behind the slowdown could be due to the US Treasury and Small Business Administration (SBA) missed a deadline to provide guidance on how to determine what part of the emergency loan is forgivable. 

  SBA spokesperson, said, “the main reason is that the agency has processed batches of applications submitted by banks when the program restarted — batches initially of at least 15,000, then reduced to 5,000 — and is now handling them individually on a rolling basis.” 

  While it remains open to discussion of why PPP loan processing has dramatically slowed, one particular thing that cannot be debated is that if loans are not directed to small businesses in a timely fashion — there is a risk that many will not survive in an economy that remains depressed. 

  
  Tyler Durden
  
  Sat, 05/09/2020 – 16:55

• New York Launches Investigation Into Mysterious New COVID-19-Linked Illness As 3 Children Die: Live Updates
  New York Launches Investigation Into Mysterious New COVID-19-Linked Illness As 3 Children Die: Live Updates

  Summary:

  • New York reports fewest new cases since March, Cuomo extends reopening timeline, more cases of mysterious child syndrome arise
  • Nurse arrested for stealing dying patient’s credit card
  • Russia nears 200k cases as country celebrates 75th anniversary of Nazi defeat
  • Belarus holds parade commemorating victory, with thousands bunched close together
  • Spain prepares to lift lockdown on Monday for vast majority of country
  • South Korea moves to contain latest cluster
  • New study finds combo of 3 powerful antivirals effective at treating COVID-19 patients
  • Aide to Ivanka Trump tests positive

  *       *       *

  Update (1645ET): And the UK Department of Health and Social Care reports the latest numbers….

  As of 9am 9 May, there have been 1,728,443 tests, with 96,878 tests on 08 May.

  1,270,408 people have been tested of which 215,260 tested positive.

  As of 5pm on 8 May, of those tested positive for coronavirus, across all settings, 31,587 have sadly died. pic.twitter.com/sXrY2tJnGN

  — Department of Health and Social Care (@DHSCgovuk) May 9, 2020

  Here’s a breakdown of the data:

  NEW: UK reports 3,896 new cases of coronavirus and 346 new deaths.

  Total of 215,260 cases and 31,587 deaths.

  — Norbert Elekes (@NorbertElekes) May 9, 2020

  UK’s update:

  – Number of new cases down
  – Number of new deaths down
  – Number of new people tested down

  — Norbert Elekes (@NorbertElekes) May 9, 2020

  NEW: UK reported its lowest number of new coronavirus cases since April 7.

  — Norbert Elekes (@NorbertElekes) May 9, 2020

  …And the rest of the data from New York’s Saturday update…

  BREAKING: New York reports 2,715 new cases of coronavirus and 226 new deaths.

  Total of 333,122 cases and 21,271 deaths.

  — Norbert Elekes (@NorbertElekes) May 9, 2020

  New York’s update:

  – Number of new cases down
  – Number of new people tested up
  – Number of new deaths up
  – Number of intubations down
  – Number of hospitalized down

  — Norbert Elekes (@NorbertElekes) May 9, 2020

  USA: Nurse at New York hospital arrested after stealing and using the credit card of dying coronavirus patient, NYPD says.

  — Norbert Elekes (@NorbertElekes) May 9, 2020

  …and Italy’s update.

  BREAKING: Italy reports 1,083 new cases of coronavirus and 194 new deaths.

  Total of 218,268 cases and 30,395 deaths.

  — Norbert Elekes (@NorbertElekes) May 9, 2020

  ITALY: Number of recovered coronavirus patients has surpassed 100,000.

  — Norbert Elekes (@NorbertElekes) May 9, 2020

  Good news from Italy:

  – Number of new cases down
  – Number of new deaths down
  – Number of hospitalized down
  – Number of ICU patients down
  – Number of new tests conducted up
  – More than 100,000 patients recovered

  — Norbert Elekes (@NorbertElekes) May 9, 2020

  NEW: For the 13th time since coronavirus outbreak, Italy has reported more new recovered patients than new cases.

  4,008 new recoveries, 1,083 new cases.

  — Norbert Elekes (@NorbertElekes) May 9, 2020

  We’ve heard from pretty much all the major countries already on Saturday.

  *       *       *

  Update (1305ET): South Korea reported 18 new cases on Saturday, the biggest “spike” in weeks. Only one case was imported, the rest were part of the new so-called “Itaewon cluster” (named after a popular entertainment district in Seoul).

  New York Gov Cuomo had some interesting news to share with the public on Saturday: The governor said the state had tested 1,300 transit workers in the NYC area for antibodies and found a 14.2% positive rate, the latest indication of just how badly some essential workers have been hit.

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  Cuomo said during the presser that it was “heartbreaking” to lose another 226 New Yorkers, even as the state reported fewer than 600 new cases, the lowest daily toll since March.

  However, the state also reported 3 deaths involving children. The deaths appeared to be caused by the mysterious potentially COVID-19-linked syndrome affecting children in New York and the UK.

  Cuomo said 73 children have been diagnosed with the syndrome in the NYC area.

  He also announced that he would extend his “PAUSE” order until June 7, meaning any reopening that happens before then will likely be extremely limited in scope.

  Earlier, the FDA announced its had approved a coronavirus antigen device made by Quidel Corporation. The California-based company said the test will deliver results in 15 minutes and is currently on sale in the US. The move follows the FDA’s emergency approval of an at-home test which is currently only being distributed to health care worker. Many officials, including most notably Gov Cuomo, say testing will be critical for the public health going forward, as states try to prevent a resurgence. A thorough picture of who is infected, who has been infected, and who has not, will help to stymie any new outbreaks and avoid further peaks, scientists believe.

  Antigen tests look for the presence of a protein from the novel coronavirus, indicating current infection. PCR tests, the ones currently most widely available, look for the actual virus and are also used to detect current infection.However, antibody tests, which authorities are putting their hopes on as they move to ease lockdowns across the globe, look for signs of both recent and past infection. Just last week, Roche of Switzerland secured a similar approval for its antibody test.

  *         *          *

  After rejecting Madrid’s bid to move into the next phase of the lockdown, Spain’s socialist-led government is preparing to lift the most-stringent restrictions from its 2-month lockdown for most of its citizens starting Monday.

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  *         *          *

  After rejecting Madrid’s bid to move into the next phase of the lockdown, Spain’s socialist-led government is preparing to lift the most-stringent restrictions from its 2-month lockdown for most of its citizens starting Monday.

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  PM Pedro Sánchez pleaded with the Spanish people to take as many precautions as possible when business reopen and people pour out of their homes for the first time in months as one of the most strict lockdowns in Europe is officially wound back. Though suspicions about under-counting of cases and deaths linger, the viral tide as clearly started to wane (most of the outliers depicted in the chart below coincide with revisions).

  During a speech, Sanchez said people should “take precautions as if they were infected” and called for “total caution and prudence” from those living in regions where the lockdown will be loosened. More than 50% of Spain’s ~50 million population will transition out of lockdown on Monday, when restaurants and bars will be allowed to serve clients outdoors, shops selling non-essential merchandise iwll be allowed to reopen without appointment and small private gatherings of up to 10 people can be held.

  However, as we mentioned above, the country’s worst-hit areas (cities including Madrid and Barcelona) will have to wait at least another wee.  Spain hopes to completely lift the lockdown for the whole country in a series of stages by mid-July.

  Spain’s ministry of health said 179 people had died in the past 24 hours after contracting coronavirus, in figures released on Saturday, one of the lowest totals since the lockdown was imposed in mid-March. On Saturday, the health ministry reported a jump of just 0.27% to 223,578.

  As we reported last night, the global coronavirus case total topped 4 million, while deaths topped 275k…

  …Even as the single-day total yesterday came in below 90k (according to data from Johns Hopkins), marking a slowdown from earlier in the week.

  Russia cancelled a military parade that had been planned to commemorate the 75th anniversary of the end of WWII as its outbreak spirals out of control, with the number of confirmed cases has pushed Russia into No. 5 biggest outbreak worldwide, just behind the UK.

  In a subdued celebration, President Vladimir Putin laid roses at the Eternal Flame war memorial as millions of Russians, unable to attend public processions, instead uploaded pictures of war-era family members and shared old war stories online. Moments after Putin’s speech commemorating one of the most important non-religious holidays on the Russian calendar, public health officials confirmed another 10,817 cases, bringing Russia’s total to just below 200k, with nearly 2k deaths reported.

  Acting virtually alone among the members of the CIS, Belarus went ahead with a massive military parade, drawing a crowd of thousands of people despite mounting concerns about the spread of the virus in the former Soviet State. Belarus’s longtime leader Alexander Lukashenko is one of a handful of leaders who, like Brazil’s Bolsonaro, have denied the seriousness of the virus.

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  Putin said Russia will “certainly celebrate this anniversary extensively and solemnly, as usual”, pledging the processions will be held at a later date.

  We’ve been following an outbreak in Seoul involving a 29-year-old who partied in one of the city’s most exclusive nightclub districts, eventually infecting 14 others. To try and suppress this latest cluster, the Seoul city government on Saturday ordered clubs and bars to shut after a spate of infections in the city’s popular Itaewon entertainment district, official media reported. New case confirmations in South Korea remain negligible; most of them involve travelers just arriving in the country, who must complete a 14-day quarantine.

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  Here’s more on the situation as some experts fear the beginning of a ‘second wave’ of the virus, courtesy of LiveMint:

  A potential second wave of coronavirus infections could be possible in South Korea after confirmed cases suddenly increased after a lull, with a surge tied to nightclubs in Seoul.

  The total number of cases linked to nightclubs in Itaewon in Seoul, visited by a 29-year-old patient earlier this month, increased to 40 as of noon Saturday in Seoul, the city’s Mayor Park Won-soon said in a briefing Saturday. Park ordered the closing of all nightclubs, discos, hostess bars and other similar nightlife establishments in the capital.

  The sudden spike in cases has sparked memories of an outbreak at a religious sect in late February, which sent daily infections in the nation to almost 1,000.

  South Korea, which in early March had the second highest number of cases globally after China, has been able to control the virus spread without having to take severe measures such as imposing a lockdown or banning overseas travel. Instead authorities have relied instead on a massive testing and tracing regime.

  South Korean Prime Minister Chung Sye-kyun pledged to mobilize all available resources to contain a further spread of the virus. The country began easing its social distancing campaign and earlier this week announced that schools will start reopening May 13.

  Before we go, a small study – the results of which have been published in the Lancet – carried out with just 127 patients in Hong Kong has found that a combination of 3 powerful antivirals showed promising results.

  Here are two sections from the paper’s summary:

  Findings

  Between Feb 10 and March 20, 2020, 127 patients were recruited; 86 were randomly assigned to the combination group and 41 were assigned to the control group. The median number of days from symptom onset to start of study treatment was 5 days (IQR 3–7). The combination group had a significantly shorter median time from start of study treatment to negative nasopharyngeal swab (7 days [IQR 5–11]) than the control group (12 days [8–15]; hazard ratio 4·37 [95% CI 1·86–10·24], p=0·0010). Adverse events included self-limited nausea and diarrhoea with no difference between the two groups. One patient in the control group discontinued lopinavir–ritonavir because of biochemical hepatitis. No patients died during the study.

  Interpretation

  Early triple antiviral therapy was safe and superior to lopinavir–ritonavir alone in alleviating symptoms and shortening the duration of viral shedding and hospital stay in patients with mild to moderate COVID-19. Future clinical study of a double antiviral therapy with interferon beta-1b as a backbone is warranted.

  Just the latest study finding that “kitchen-sinking” patients with powerful antivirals appears to be one of the most effective strategies at treating patients in serious condition.

  Finally, in the US, an aide to Ivanka Trump tested positive for COVID-19, according to a Friday evening announcement. Staffers for President Trump and VP Pence have also tested positive.

  
  Tyler Durden
  
  Sat, 05/09/2020 – 16:54

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