May 11

Today’s News 11th May 2020

  • Montenegro Advertises Itself As "Corona-Free" Vacation Destination
    Montenegro Advertises Itself As “Corona-Free” Vacation Destination

    Popular European tourist vacations like Cinque Terre in Italy and the French Riviera in southeastern France are about to have some serious competition on their hands.

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    While the global travel and leisure industry takes a massive hit, some small countries are hoping to cash in on the wave of coronavirus hysteria that’s expected to curtail travel plans for months, if not years, to come.

    Al Jazeera reports that Montenegro, a tiny Balkan state, has advertised itself as a holiday destination where the coronavirus pandemic will soon no longer pose a threat. The country’s premier has vowed to vanquish the virus, which hasn’t spread widely in the Balkans region, before the traditional summer holiday season begins on July 1.

    “Montenegro is on its way to becoming a CoronaFree destination!” tweeted Prime Minister Dusko Markovic on Sunday.

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    Premier Markovic bragged that the country has shown it can handle the virus.

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    The government in Podgorica recently indicated that it expects the holiday season to start on July 1.

    To be sure, some resorts haven’t yet decided on whether they will reopen for the summer season. One exclusive resort in Portonovi is currently planning to reopen Oct. 1.

    Still, that’s probably much earlier than other European destinations.


    Tyler Durden

    Mon, 05/11/2020 – 02:45

  • Italy: China's Trojan Horse Into Europe
    Italy: China’s Trojan Horse Into Europe

    Authored Giulio Meotti via The Gatestone InStitute,

    A few days after China had announced it was sending medical supplies to Italy, Chinese state media aired pictures of Italians on balconies and streets applauding the Chinese national anthem. “In Rome, with the Chinese anthem playing, some Italians chanted ‘Grazie, Cina!’ on their balconies, & their neighbors applauded along”, wrote Zhao Lijian, the spokesman for China’s foreign ministry who shamefully and wrongly suggested that the U.S. military had brought the Covid-19 to Wuhan.

    China presented itself in the role of the savior, willing to rush to the bedside of the sick patient Italy.

    Now a Financial Times investigation reveals that those videos were manipulated as part of Beijing’s coronavirus propaganda. Hashtags #ThanksChina and #GoChina&Italy were further generated by bots. A report by the Carnegie Endowment called Italy “a target destination for China’s propaganda”.

    An article called, “Why the Covid-19 epidemic is so politicized” and posted on the Chinese embassy website in Paris, said, “Some Westerners are beginning to lose confidence in liberal democracy” and “some [Western countries] have become psychologically weak”.

    Antoine Bondaz, a researcher at France’s Foundation for Strategic Research, told Politico:

    “China considers Europe the soft belly of the West. In their logic, there is the West, and in it the U.S. that will oppose China for structural and ideological reasons, and their European allies that need to be neutral in case of conflict between China and the U.S.”

    According to Lt. Gen. (ret.) H.R. McMaster, President Donald Trump’s former national security adviser, in his new book Battlegrounds: The Fight to Defend the Free World, Chinese leaders “believe they have a narrow window of strategic opportunity to strengthen their rule and revise the international order in their favor”.

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    There is now a huge risk that Italy is becoming “China’s Trojan horse into Europe“.

    A leading French official, Pierre-Henri d’Argenson, wrote in Le Figaro that “Europe has now become the buffer zone for the confrontation between China and the United States”. Beijing chose Italy as its soft belly in Europe and is following its script.

    In April 2019, the Italian government of Prime Minister Giuseppe Conte was the first G7 country to sign a Memorandum of Understanding on China’s “Belt and Road Initiative” during a state visit by President Xi Jinping. According to an analysis by The Economist, the Chinese Belt and Road plan could surpass the Marshall Plan, by which the US revived Europe’s war ravaged economies.

    Italy has a government coalition led by the Five Star Movement, an extremely pro-Chinese party, whose founder Beppe Grillo has been spotted frequently at the Chinese embassy in Rome. As the European Council on Foreign Relations reported, “in Italy business and political lobbies for China have been on the rise”. The former PM Matteo Renzi has visited Beijing for conferences.

    Five years ago, China National Chemical Corp bought Pirelli, a 143-year-old Italian company, and the world’s fifth-largest tire maker. A study published by KPMG before the Pirelli deal revealed Chinese acquisitions in Italy have totaled 10 billion euros in five years (in a total of 13 billion euros investments). A third of foreign purchases in Italy are Chinese. The goal is to turn Italy into “Europe’s top destination for highly coveted investment from China”.

    Now, China is trying to dominate southern Europe’s infrastructure. China was already granted a license to run Greece’s largest seaport, Athens’ Piraeus harbor, which Beijing plans to turn into Europe’s biggest commercial harbor. Then China started to project its expansion in Italy’s ports, where four major ports are also in line for Chinese investments. Zeno D’Agostino, the president of Trieste’s northern port, says that “China is opening because it feels strong”.

    Italy’s political appeasement of China was on display during the fatal early days of the coronavirus crisis.

    On January 21, Italy’s culture and tourism minister hosted a Chinese delegation for a concert at the National Academy of Santa Cecilia to inaugurate the year of Italy-China Culture and Tourism. Michele Geraci, Italy’s former undersecretary for development, was not sure that was his place. “Are we sure we want to do this?”, Geraci said looking at his colleagues. “Should we be here today?”. A few days later, in many Italian cities, such as Florence and Prato, where there is a Chinese manufacturing stronghold, mayors and local communities promoted the initiative, “hug a Chinese” to fight xenophobia and racism.

    In Rome, Italy’s President, Sergio Mattarella, visited a school that has a high percentage of Chinese students to counter “discrimination” and Nicola Zingaretti, the leader of the Democratic Party, met the Chinese ambassador in Rome. Meanwhile, Italian televisions organized live tastings of Chinese products. That was Italy’s fatal initial mistake: fighting racism instead of the virus, which only a few days later would devastate the country.

    China has been able to brainwash Italian public opinion. In a poll published April 17, 50% of Italians consider China a “friend” (just 17% of Italians think as much of the United States). And in the race for the global power to which Italy should be allied China is ahead of the US, 36% to 30%.

    Italy’s foreign minister, Luigi Di Maio, welcomed a plane-load of Chinese medical supplies on March 12. “We will remember those who were close to us in this difficult period”, Di Maio said. It is not necessary, China will remind them.

    Walter Ricciardi, an advisor to the World Health Organization (WHO) and the Italian government, tweeted: “Thanks China!”.

    We know now that while the Chinese regime misled the world about the contagiousness of Covid-19, it stockpiled medical supplies. As the editor of the German BILD wrote in a letter to Chinese president Xi:

    “I suppose you consider it a great ‘friendship’ when you now generously send masks around the world. This isn’t friendship, I would call it imperialism hidden behind a smile – a Trojan Horse”.

    Not a single Italian minister or official blamed China for the cover up of the epidemic or causing witnesses to “disappear“.

    “For the first time in many years, Western countries united behind the request to China for clarifications on how Covid-19 was born and then spread”, Paolo Mieli wrote in a front-page editorial for Italy’s largest newspaper, Il Corriere della Sera. Mieli mentioned the United States, Australia, United Kingdom, France and Germany.

    “Who is missing? Italy, the only country in the Western world to have welcomed half a million masks sent to us (for a fee) from China with a truly excessive blaze”.

    The world-renowned Italian textile industry was one of the major victims of a globalization expansion led by Chinese dishonest economic dumping. China is now reducing Italy to a setting to help spread and implement its propaganda and will to power. As Italian analyst Francesco Galietti wrote, Italy is going to become “the target of a Chinese ‘charm offensive’, a combination of hard cash and ‘soft power’, money and influence”. He notes as an example the People’s Bank of China:

    “It has steadily amassed stakes above 2 percent (the disclosure threshold in Italy) in a slew of Italy’s largest shareholder-owned companies, including FCA (the Fiat Chrysler group), Telecom Italia, and Generali Group, Italy’s largest insurer”.

    China has also invested in strategic Italian energy entities such as Eni and Enel and Italian oil services group Saipem.

    This economic penetration will also have immense security consequences. During the first days of the Covid-19 epidemic, Italy, which is being lured by the promise of a $3 billion Huawei investment in its telecommunications system, announced that it has no plans to stop Chinese telecom firms playing a role in the country’s future 5G network. It is a project that US Attorney General William P. Barr defined a “monumental danger“.

    “The geopolitical effects of the pandemic could be significant,” said NATO Secretary-General Jens Stoltenberg.

    “Some allies (are) more vulnerable for situations where critical infrastructure can be sold out” in a Chinese “buying spree”.

    US Secretary of Defense Mark Esper has also warned that China will exploit the virus “to further their own interests and try to sow division in the Alliance and in Europe”.

    Italy is most vulnerable to this Chinese offensive. It is one of the most indebted countries in the world and has an economic growth close to zero. It is also one of Europe’s most unstable and fragile governments and had one of Europe’s highest coronavirus death tolls — an experience that an Italian nurse compared to a “world war“.

    Italy is now Europe’s sick man. Due to the Chinese coronavirus crisis, the country will see a collapse of its GDP (-9.5%) and the explosion of its public debt which is set to 160% of gross domestic product — the highest since World War II. Beijing knows this and claims that “Italy has many economic problems, Europe is in crisis and the Belt and Road Initiative is the only major global investment plan”.

    “The possibility that Europe will become a museum or a cultural amusement park for the nouveau riche of globalization is not completely out of the question”, said the late historian Walter Laqueur.

    Rome’s dramatic fall could mean Beijing’s equally dramatic rise. It is a huge warning for the West.


    Tyler Durden

    Mon, 05/11/2020 – 02:00

  • Watch: 'Skynet'-Like Robot Dog Patrols Singapore's Parks To Ensure Humans Are Social Distancing
    Watch: ‘Skynet’-Like Robot Dog Patrols Singapore’s Parks To Ensure Humans Are Social Distancing

    If there’s one thing we try to keep a eye on, it’s the potential use of this global pandemic for governments to try and unleash new and “interesting” ways of surveillance. 

    Thus, our eyes and ears perked up when we learned that Singapore was now going to be using robot dogs to patrol public areas and make sure that citizens are keeping their distance from one another. Municipal authorities are using Spot, a four legged robot dog made by Boston Dynamics, to remind visitors to parks to keep a safe distance from one another. 

    The robo-doggo officially started patrol at Bishan-Ang Mo Kio Park on Friday as part of a two week trial, according to The Verge. Spot is fitted with cameras that are used to estimate the number of visitors in the park, but Singapore says it won’t collect personal data or use the video to identify individuals. Sure.

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    Spot also comes equipped with a remote control, built-in sensors and will be accompanied by a guide. If the trial is deemed a success, Spot (and likely others like him) could become mainstays in the country’s public parks. The robot “lowers the risk of exposure to the virus,” the National Parks Board said, using the virus to shoehorn its agenda forward. Signs like the one above warn park visitors not to disrupt robot at work. 

    China and the U.S. have similarly experimented with drones to remind people to social distance. “Please maintain a safe distance between you and other people,” one robot from Knightscope tells people. 

    Spot is also undergoing trials in hospitals to help with coronavirus treatments and delivery robots are helping shipping and logistics companies. As The Verge notes, patrolling the parks and reminding people to social distance “may only be the beginning” for these robots. The pandemic is being called a “new opportunity” for robotmakers to deploy their creations.

    While the dog is only in charge of pandemic-related rules enforcement for now, we can envision that it won’t be too long before they are enforcing other kinds of rules – for our own safety and good, undoubtedly – as well. 

    You can watch Spot on patrol in this video:


    Tyler Durden

    Mon, 05/11/2020 – 01:00

  • Putin's Call For A New System & The 1944 Battle Of Bretton Woods: Lessons For Victory Day
    Putin’s Call For A New System & The 1944 Battle Of Bretton Woods: Lessons For Victory Day

    Authored by Matthew Ehret via The Saker blog,

    As today’s world teeters on the brink of a financial collapse greater than anything the world experienced in either 1923 Weimar or the 1929 Great depression, a serious discussion has been initiated by leaders of Russia and China regarding the terms of the new system which must inevitably replace the currently dying neo-liberal order. Most recently, Vladimir Putin re-initiated his January 16, 2020 call for a new emergency economic conference to deal with the looming disaster based upon a live session with representatives of the five nuclear powers of the UN Security Council.

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    While Putin’s commitment for this new system is premised upon multi-polar principles of cooperation and respect of national sovereignty, the financial oligarchy and broader deep state structures infesting the western nations who have initiated this crisis over the course of decades of globalization have called for their own version of a new system.

    This new system as we have seen promoted by the likes of the Bank of England and leading technocrats over the past year, is based upon an anti-Nation State, unipolar system which typically goes by the term “Green New Deal”. In other words, this is a system ruled by a technocratic elite managing the reduction of world population through the monetization of carbon reduction practices under a Global Government.

    No matter how you look at it, a new system will be created out of the ashes of the currently dying world order. The question is only: Will it benefit the oligarchy or the people?

    In order to inform the necessary decision making going into this emergency conference, it is useful to revisit the last such emergency conference that defined the terms of a world economic architecture in July 1944 so that similar mistakes that were then made by anti-imperialist forces are not made once more.

    What Was the Bretton Woods?

    As it was becoming apparent that the war would be soon drawing to a close, a major fight broke out during a two week conference in Bretton Woods New Hampshire where representative of 44 nations convened to establish the terms of the new post-war system. The question was: Would this new system be governed by those British Imperial principles similar to those that had dominated the world before the war began or would they be shaped by a community of sovereign nation states?

    On the one side, figures allied to American President Franklin Delano Roosevelt’s vision for an anti-Imperial world order lined up behind FDR’s champion Harry Dexter White while those powerful forces committed to maintaining the structures of a bankers’ dictatorship (Britain was always primarily a banker’s empire) lined up behind the figure of John Maynard Keynes.

    John Maynard Keynes was a leading Fabian Society controller and treasurer of the British Eugenics Association (which served as a model for Hitler’s Eugenics protocols before and during the war). During the Bretton Woods Conference, Keynes pushed hard for the new system to be premised upon a one world currency controlled entirely by the Bank of England known as the Bancor. He proposed a global bank called the Clearing Union to be controlled by the Bank of England which would use the Bancor (exchangeable with national currencies) and serve as unit of account to measure trade surpluses or deficits under the mathematical mandate of maintaining “equilibrium” of the system.

    Harry Dexter White on the other hand fought relentlessly to keep the City of London out of the drivers’ seat of global finance and instead defended the institution of national sovereignty and sovereign currencies based on long term scientific and technological growth. Although White and FDR demanded that U.S. dollars become the reserve currency in the new world system of fixed exchange rates, it was not done to create a “new American Empire” as most modern analysts have assumed, but rather was designed to use America’s status as the strongest productive global power to ensure an anti-speculative stability among international currencies which entirely lacked stability in the wake of WWII.

    Their fight for fixed exchange rates and principles of “parity pricing” were designed by FDR and White strictly around the need to abolish the forms of chaotic flux of the un-regulated markets which made speculation rampant under British Free Trade and destroyed the capacity to think and plan for the sort of long term development needed to modernize nation states. Theirs was not a drive for “mathematical equilibrium” but rather a drive to “end poverty” through REAL physical economic growth of colonies who would thereby win real economic independence.

    As figures like Henry Wallace (FDR’s loyal Vice President and 1948 3rd party candidate), Representative William Wilkie (FDR’s republican lieutenant and New Dealer), and Dexter White all advocated repeatedly, the mechanisms of the World Bank, IMF, and United Nations were meant to become drivers of an internationalization of the New Deal which transformed America from a backwater cesspool in 1932 to becoming a modern advanced manufacturing powerhouse 12 years later. All of these Interntional New Dealers were loud advocates of US-Russia –China leadership in the post war world which is a forgotten fact of paramount importance.

    In his 1944 book Our Job in the Pacific, Wallace said:

     “It is vital to the United States, it is vital to China and it is vital to Russia that there be peaceful and friendly relations between China and Russia, China and America and Russia and America. China and Russia Complement and supplement each other on the continent of Asia and the two together complement and supplement America’s position in the Pacific.”

    Contradicting the mythos that FDR was a Keynesian, FDR’s assistant Francis Perkins recorded the 1934 interaction between the two men when Roosevelt told her:

     “I saw your friend Keynes. He left a whole rigmarole of figures. He must be a mathematician rather than a political economist.” In response Keynes, who was then trying to coopt the intellectual narrative of the New Deal stated he had “supposed the President was more literate, economically speaking.”

    In his 1936 German edition of his General Theory of Employment, Interest and Money, Keynes wrote:

     “For I confess that much of the following book is illustrated and expounded mainly with reference to the conditions existing in the Anglo Saxon countries. Nevertheless, the theory of output as a whole, which is what the following book purports to provide, is much more easily adapted to the conditions of a totalitarian state.”

    While Keynes represented the “soft imperialism” for the “left” of Britain’s intelligentsia, Churchill represented the hard unapologetic imperialism of the Old, less sophisticated empire that preferred the heavy fisted use of brute force to subdue the savages. Both however were unapologetic racists and fascists (Churchill even wrote admiringly of Mussolini’s black shirts) and both represented the most vile practices of British Imperialism.

    FDR’s Forgotten Anti-Colonial Vision Revited

    FDR’s battle with Churchill on the matter of empire is better known than his differences with Keynes whom he only met on a few occasions. This well documented clash was best illustrated in his son/assistant Elliot Roosevelt’s book As He Saw It (1946) who quoted his father:

    “I’ve tried to make it clear … that while we’re [Britain’s] allies and in it to victory by their side, they must never get the idea that we’re in it just to help them hang on to their archaic, medieval empire ideas … I hope they realize they’re not senior partner; that we are not going to sit by and watch their system stultify the growth of every country in Asia and half the countries in Europe to boot.”

    FDR continued: 

    “The colonial system means war. Exploit the resources of an India, a Burma, a Java; take all the wealth out of these countries, but never put anything back into them, things like education, decent standards of living, minimum health requirements–all you’re doing is storing up the kind of trouble that leads to war. All you’re doing is negating the value of any kind of organizational structure for peace before it begins.”

    Writing from Washington in a hysteria to Churchill, Foreign Secretary Anthony Eden said that Roosevelt ”contemplates the dismantling of the British and Dutch empires.”

    Unfortunately for the world, FDR died on April 12, 1945. A coup within the Democratic establishment, then replete with Fabians and Rhodes Scholars, had already ensured that Henry Wallace would lose the 1944 Vice Presidency in favor of Anglophile Wall Street Stooge Harry Truman. Truman was quick to reverse all of FDR’s intentions, cleansing American intelligence of all remaining patriots with the shutdown of the OSS and creation of the CIA, the launching of un-necessary nuclear bombs on Japan and establishment of the Anglo-American special relationship. Truman’s embrace of Churchill’s New World Order destroyed the positive relationship with Russia and China which FDR, White and Wallace sought and soon America had become Britain’s dumb giant.

    The Post 1945 Takeover of the Modern Deep State

    FDR warned his son before his death of his understanding of the British takeover of American foreign policy, but still could not reverse this agenda. His son recounted his father’s ominous insight:

    “You know, any number of times the men in the State Department have tried to conceal messages to me, delay them, hold them up somehow, just because some of those career diplomats over there aren’t in accord with what they know I think. They should be working for Winston. As a matter of fact, a lot of the time, they are [working for Churchill]. Stop to think of ’em: any number of ’em are convinced that the way for America to conduct its foreign policy is to find out what the British are doing and then copy that!” I was told… six years ago, to clean out that State Department. It’s like the British Foreign Office….”

    Before being fired from Truman’s cabinet for his advocacy of US-Russia friendship during the Cold War, Wallace stated:

     “American fascism” which has come to be known in recent years as the Deep State. “Fascism in the postwar inevitably will push steadily for Anglo-Saxon imperialism and eventually for war with Russia. Already American fascists are talking and writing about this conflict and using it as an excuse for their internal hatreds and intolerances toward certain races, creeds and classes.”

    In his 1946 Soviet Asia Mission, Wallace said “Before the blood of our boys is scarcely dry on the field of battle, these enemies of peace try to lay the foundation for World War III. These people must not succeed in their foul enterprise. We must offset their poison by following the policies of Roosevelt in cultivating the friendship of Russia in peace as well as in war.”

    Indeed this is exactly what occurred. Dexter White’s three year run as head of the International Monetary Fund was clouded by his constant attacks as being a Soviet stooge which haunted him until the day he died in 1948 after a grueling inquisition session at the House of Un-American Activities. White had previously been supporting the election of his friend Wallace for the presidency alongside fellow patriots Paul Robeson and Albert Einstein.

    Today the world has captured a second chance to revive the FDR’s dream of an anti-colonial world. In the 21st century, this great dream has taken the form of the New Silk Road, led by Russia and China (and joined by a growing chorus of nations yearning to exit the invisible cage of colonialism).

    If western nations wish to survive the oncoming collapse, then they would do well to heed Putin’s call for a New International system, join the BRI, and reject the Keynesian technocrats advocating a false “New Bretton Woods” and “Green New Deal”.


    Tyler Durden

    Mon, 05/11/2020 – 00:00

  • Saudi Arabia Running Out Of Money: Riyadh To Slash Spending By $27 Billion, Suspend Cost Of Living Allowance
    Saudi Arabia Running Out Of Money: Riyadh To Slash Spending By $27 Billion, Suspend Cost Of Living Allowance

    Last weekend we quoted Finance Minister Mohammed Al-Jadaan, who warned that the world’s biggest oil exporter hasn’t witnessed “a crisis of this severity” in decades, adding that government spending will have to be cut “very deeply”, something we touched on previously.

    We didn’t have long to wait, because early on Monday, the Saudi government – which appears to be running out of money fast – ordered government spending cuts including suspending the cost of living allowance amid broad austerity measures for about $26.6 billion and a tripling of the value-added tax as part of measures aimed to shore up state finances, which have been battered by low oil prices and the coronavirus.

    “Cost of living allowance will be suspended as of June first, and the value added tax will be increased to 15% from 5% as of July first,”  said the Saudi finance minister according to the state news agency, suggesting Saudi Arabia is on the verge of a full-blown fiscal crisis.

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    Saudi Finance minister Mohammed Al-Jadaan

    Other measures includes canceling or delaying some operational and capital expenditures for a number of government agencies and reducing the credits planned for a number of state initiatives, including the Vision 2030 project, just as we predicted.

    “The covid-19 challenges have led to a decline in government revenues, and pressure on public finances to levels that are difficult to deal with later without harming the kingdom’s macroeconomics and public finances in the medium and long term,” Al-Jadaan said. “Therefore more spending cuts must be achieved, and measures to support the stability of non-oil revenues.”

    Already under a strict curfew to contain the spread of the coronavirus pandemic, the world’s largest oil exporter has been affected by the oil price rout and global crude production cuts to help balance the market. The price of Brent crude crashed by more than 50% in March, contributing to a record $27 billion monthly drop in the Saudi central bank’s net foreign assets.

    Adding insult to injury, last week we warned that the Kingdom may soon be dealing with a funding crisis as well: the collapse in crude prices and the government’s drop in foreign reserves, which plunged by a record $27BN in March…

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    … is putting more pressure on the Saudi riyal. For now, however, prices for 12-month dollar-riyal forward contracts are well short of their all-time high reached in 2016.

    Commenting on the drop in reserves, Al Jazeera said that when the kingdom last stared down the crash in crude in 2014, it wielded reserves that peaked at over $735 billion. The stockpile was down by over a third just three years later, channeled almost entirely toward deficit spending.

    And now, Saudi Arabia is blowing through its reserves at the fastest pace in at least two decades, even as the government is barely using the holdings to cover fiscal needs. Following its debut in international bond markets in 2016, borrowing covered most of the budget deficit in the first quarter.

    As a result, with its buffers already fragile and the economy hammered by the coronavirus, Saudi Arabia is looking to scale back spending and rely more on debt.

    There was some good news: recently Goldman Sachs has predicted that the central bank’s reserves, down more than 100 billion riyals ($27 billion) in March alone, will stabilize soon. “Despite a further anticipated decline in oil revenues in the second quarter, we expect the rate of reserve burn to slow,” Farouk Soussa, a Goldman Sachs economist, said in a report.

    Alas, judging by the Saudi action, Riyadh is clearly far more concerned that the pain will straight well beyond the second quarter


    Tyler Durden

    Sun, 05/10/2020 – 23:36

  • Pompeo Likens Iran To Nazis On 2nd Anniversary Of US Nuclear Deal Exit
    Pompeo Likens Iran To Nazis On 2nd Anniversary Of US Nuclear Deal Exit

    Perhaps attempting to ensure the anti-Iran ‘maximum pressure’ campaign remains front and center, even in the midst of a pandemic and historic unemployment, Secretary of State Mike Pompeo has resorted to the one of the most common — and we might note laziest — labels for America’s ‘enemies’. 

    In official statements Saturday, and on the same day Russia and other former Soviet states mark WWII Victory Day, Pompeo made reference to the United States and our allies defeat of Hitler’s Germany, while immediately pivoting to Iran, likening the Islamic Republic to a Nazi regime. 

    The statement specifically marked the second anniversary of the Trump administration’s withdrawal from the Iran nuclear deal (JCPOA), reached by Tehran and six other state signatories in 2015.

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    “Seventy-five years ago, the United States and our allies stood together to rid the world of the Nazis and their hateful ideology,” Pompeo said. “Today, we face a grave challenge to regional peace from another rogue regime…”

    He continued: “We call again on the international community to join us to stop the largest sponsor of Antisemitism.”

    Declaring a world a “far safer” place due to the US exit from the JCPOA, he further celebrated US-imposed sanctions on Iran as having “prevented Iran from funding and equipping terrorists with many billions of dollars.” He pledged that “we will never allow Iran to have a nuclear weapon.”

    Over a week ago Pompeo said the administration plans to extend its arms embargo on Iran: “We’re going to use every tool we can in our diplomatic capability to ensure that that prohibition on arms sales to Iran doesn’t expire [in] just a handful of months,” he told FOX. Iranian leaders responded by threatening a “crushing response” if the US goes through with the extension. 

    Unlike the Nazi German war machine in history, however, Iran doesn’t look ready to “march across Europe” or anywhere for that matter anytime soon, given its major industries, economy, and currency have been in free fall collapse, but also as for months coronavirus has ripped through the population, including impacting government leaders. 


    Tyler Durden

    Sun, 05/10/2020 – 23:30

  • Soviet-Style Government In The US: Some Will Always Bow In Enslavement
    Soviet-Style Government In The US: Some Will Always Bow In Enslavement

    Authored by Mac Slavo via SHTFplan.com,

    It doesn’t seem to matter how tyrannical the powers-that-shouldn’t-be get. Some people, in the face of freedom, will always choose slavery and the illusion of safety.  It’s sad to think human beings are willing to live their lives in such a perpetual state of fear that they end up giving up their birthright to masters.

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    In an article titled “Coronavirus is Proven Some in the U.S Like Soviet-Style Governance,” by The Washington Times, much nicer terms are used than “slavery.” But “Soviet-Style governance” is the very definition of slavery. A lot of humans around the globe have opened their eyes to what government has always been (power, consolidated, and corrupted. After all, it only took 6 years for the U.S. government to violate the basic human rights listed in the  Constitution that they wrote to “keep us safe” from them), yet some think they need more chains and restrictions. If you give up power, in any amount, don’t expect to get it back. Ever. Which is why we could be seeing the beginning of the end of government.  It won’t take many more to wake up to eliminate the ruling class by disobeying.

    I have been doing my best to not give in to the fear. Freedom is far too important to give in to the ruling class’ insistence that I live my life afraid of others and some virus that they continually lie about. At the same time, information needs to get out, people need to be informed, and some things are going to come across as negative. The intention is to make sure we all know what’s going on so preparations can be made and we can stand up to this before it’s too late.  No matter what, someone will be offended or upset, but as I said before, the truth doesn’t care about your feelings.

    Others, however, are all too happy to take the side of tyranny. Maybe they think if they are good little slaves and obey the master, the virus can’t get them.  Maybe they actually believe they “authorities” care about them. It’s tough to say.  But they are falling quickly into the minority, and for that, we can all be grateful.

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    The truth is that we must take power back from anyone who has it and never give it away again.  Never be under any illusions again.  That means, once power is ours, we don’t allow another person to control us.  Ever.  And yes, that goes for cops, and the military, all the way up to the globalists who are pulling the strings.

    While it’s true that some people will always bow when commanded and always follow orders, most have actually gotten up off their knees and realized this world has a control structure in place designed to keep them complacent.  When we stand together against the order followers, it’s becoming apparent that we outnumber them by a good amount, and we can end this slavery for good.

    You cannot hold down something that was always meant to be free forever. The most you can do is create fear and use psych ops to enslave minds. Those who are free will always be because their mind belongs to themselves, and that’s what the establishment and the elite globalists fear the most.

    While The Washington Times is correct, that the “Coronavirus is Proven Some in the U.S Like Soviet-Style Governance,” the coronavirus scamdemic has also proven that a lot of people will not be enslaved and will live their lives freely and as the sovereign beings they were always meant to be.


    Tyler Durden

    Sun, 05/10/2020 – 23:00

  • Another Leg Lower Is Coming, But What Happens In 2021 Will Leave Traders Speechless
    Another Leg Lower Is Coming, But What Happens In 2021 Will Leave Traders Speechless

    In a recent report by Nordea’s Andreas Steno Larsen, the FX strategist looks at the recent surge in stocks and rhetorically asks “Happy days, right?”, to which his response is that he is not so sure, because “is it really feasible to CTRL+P profits?” (for those confused, since reality is now more absurd than the Onion, the answer is no).

    Larsen then looks at the by now infamous chart of collapsing earnings and warns that “EPS may need to be revised down at least 40-50% YoY in a quarter from now, but it seems like most equity analysts have been sipping directly from the magic central bank spring (Certainly less strong than what Elon Musk had the other day) as they look for a “mere” -20% EPS growth this year.” To Larsen this is “historically naïve, sorry, optimistic.”

    Why? Because If expected earnings are slashed in the way that Nordea finds expects, forward P/E’s will either have to find bizarre new all-time-highs (as 2020 is deemed an outlier) or else equities will have to give in again. (Larson laconically notes that he “leans towards the latter”)

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    Of course, as we have observed in recent weeks – and as David Zervos made all too clear today – Wall Street no longer cares about earnings, or the economy, or frankly anything besides the Fed:

    Since there is a robust Fed liquidity backstop, and we do not know the depth or duration of the current economic downturn, spending any time looking at economic data releases or focusing on corporate earnings is a colossal waste of time. For economic data, the signal-to-noise ratio is essentially zero, and for corporate earnings, N-T results are meaningless with regard to L-T earnings potential. The item to focus on is the Fed and its direct support for the financial and non-financial IG corporate sectors. – David Zervos

    Fine, let’s assume only the Fed matters. What then?

    Well, as Paul Tudor Jones wrote in his latest market outlook which has quickly been denounced by basement-dwelling members of fintwit (who have never actually traded, but more than make up for this with a flood of vacuous opinions) due to its endorsement of gold and bitcoin as the antidote to the monetary insanity that has been unleashed, “the depth and magnitude of the economic drop-off [as a result of the coronavirus pandemic] took modern monetary theory—or the direct monetization of massive fiscal spending—from the theoretical to practice without any debate. It has happened globally with such speed that even a market veteran like myself was left speechless. Just since February, a global total of $3.9 trillion (6.6% of global GDP) has been magically created through quantitative easing.” As PTJ summarizes, “we are witnessing the Great Monetary Inflation (GMI)—an unprecedented expansion of every form of money unlike anything the developed world has ever seen.“

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    One place where the Fed’s unprecedented response has been very visible, is in the level of the M2 monetary aggregate.

    As PTJ writes, “in the last weekly release of the Fed’s Money Stock data, M2 rose 18.5% over a year ago, an unprecedented pace of growth in the history of the weekly time series starting from 1981. It is likely that the annual growth in M2 will continue to increase to somewhere between 20% and 40% by year-end. We got these estimates on M2 from a few of the dinosaurs who still work on Wall Street. Rarely have we ever seen so many economists dismissive of an economic metric than when we asked about their notion on this record M2 growth and its meaning. The last time M2 grew at such a high pace was during World War II, when annual M2 growth peaked at almost 27%.”

    Jones then quotes Milton Friedman who stated that “inflation is always and everywhere a monetary phenomenon that arises from a more rapid expansion in the quantity of money than in total output.” And while the relationship between inflation and M2 growth in excess of real output growth has not been stable over short horizons, PTJ notes that “it seems to hold over longer horizons. There are only a few times in history when M2 growth exceeded real output growth over a 5-year span by the same or a faster pace than is currently the case: the inflationary periods of the 1970s–80s and the late 1940s. But remember, it is reasonable to expect inflation to first fall in the coming months, given the large contraction in demand relative to supply.”

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    Paul Tudor Jones then spends much of the rest of his paper ruminating on whether “a large monetary overhang in the recovery phase will eventually stoke consumer price inflation”, before concluding that it very well may, and is why the legendary hedge fund trader has now endorsed bitcoin as we described in a previous post.

    So going back to the Nordea report, Steno Larsen, like PTJ, also focuses on the of M2 only he looks at a slightly modified version of M2, specifically the ratio of M2 to the value of Treasurys and stocks. He then proceeds to observe the correlation between this adjusted M2 indicator and the annual change in the S&P500. What he finds is fascinating: if one applies a lag of roughly 8 months that it takes for M2 to affect risk prices, then the S&P is set to peak around May 20, then slump for the rest of the year before bottoming in early 2021 at which point the S&P will leave traders speechless (and the bears steamrolled), when the S&P explodes by more than 40% Y/Y as the Fed’s liquidity tsunami finally makes its way into the stock market, to wit:

    “Sell in May and go away” is maybe one of the most annoying investment clichés but it could prove to work again this year, if lead/lag patterns from the M2 development to risk asset performance persist.

    As M2 improves in the US, it is i) a result of much easier Fed policies and ii) a demand for credit that is suddenly revived due to the Corona lock-downs, but it usually also comes with important bearing for risk assets after a while. Judging from usual lead/lag patterns, lackluster M2 developments from 2019 should still act as a drag on risk assets from May and into the second half of the year, while 2021 looks to be the most “ketchupped” market ever, as the bonanza of policy measures will leave too much money chasing too few assets.

    And visually:

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    So while it is anyone’s guess if the Fed’s massive monetary injections will translate into inflation across the broader economy, and certainly into higher wages – something which at least one macro strategist believes will not be the case and as a result 2021 will be the year of the Great Stagflation – if Nordea is right, then there is no debate what happens to asset price inflation…

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    … and while those calling for new lows in the S&P will soon be proven correct, they will then experience the biggest surge in risk assets in 2021 in history as all those trillions in liquidity finally make their way to the stock market.


    Tyler Durden

    Sun, 05/10/2020 – 22:35

  • Two Collapse Experts With Cooler Heads Opine On COVID Catalysts And Human Nature
    Two Collapse Experts With Cooler Heads Opine On COVID Catalysts And Human Nature

    For those in search of unfiltered opinions, there are a few platforms worth checking out. Perhaps best known are the Joe Rogan Experience and members of the ‘intellectual dark web’ – a phrase coined by Thiel Capital managing director Eric Weinstein (who has his own podcast – The Portal).

    Another watering hole for free thinkers is the Hermitix podcast. Hosted by the ‘Meta-Nomad’ (James), topics of discussion include social engineering, collapse, occultism, primitivism and consumerism – and has featured guests such as Dmitry Orlov, John Michael Greer and ‘weirdness’ expert Erik Davis.

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    About a month ago, Hermitix sat down with several collapse experts, including Dmitry Orlov – a Russian-American engineer who has written multiple books on societal decline, and John Michael Greer – who has written on collapse, ecology, religion, philosophy, oil depletion and the occult.

    In short, super interesting guys – both of whom accurately framed the coronavirus 4-6 weeks ago as overblown when the rest of the world was hoarding toilet paper and the largest job losses since the Great Depression was underway.

    Orlov posits that because China and Russia treated COVID-19 as a bioterror attack – locking down cities and restricting travel, that it “created so much angst in the West that we ‘self destructed,’ and that governments have taken advantage of global panic in order to enact authoritarian measures and cover up for the fact that ‘the West has collapsed.’

    The United States in particular has gone into financial collapse in the middle of last August, 2019, when it suddenly turned out that United States government debt is no longer valid as collateral for a loan – even an overnight loan. And interest rates on so–called repo contracts shot up to something like over 10% over the prime rate. And so then the federal reserve had to step in and start offering these repo contracts by itself, basically supported by the printing press. This was the first step towards monetizing the debt. This is a hyperinflationary measure. -Dmitry Orlov

    “The reason for the whole COVID-19 panic hysteria is that it’s very difficult for people to come out and say ‘ok we’ll just completely fail. ok, we have run the economy into a dead end‘,” he adds. 

    And what are the signs of collapse? Orlov says that since US economic statistics are “a complete forgery and have been for many years,” that we can look to countries like Germany – which has seen “double-digit declines in the last year or more” in manufacturing.

    Part of it is mal-investment in green energy in Germany which caused electricity rates to shoot up to a point where Germany is no longer competitive as far as manufacturing. Same thing pretty much is happening in Japan. China has seen the slowest growth in several generations. Same with India.

    When asked when things will ‘completely erode’ to the point where the average person can clearly see what’s going on, Orlov suggests that “The human psyche is a very fragile thing. If you’ve been taught one thing all your life, and suddenly it turns out you’ve been lied to all your life, this is rather harsh. Most people have trouble with it and some people can just never get through the denial. And get stuck, and develop a mental health crisis that can become chronic.”

    Listen to the entire interview here.

    John Michael Greer expanded on the human nature aspect of the COVID-19 (over)reaction after noting that “we have lucked out – as this has a relatively mild death rate.” What’s causing panic, however, is asymptomatic transmission.

    “Unlike some illnesses, this one transmits very well without you knowing it. People can be dripping viruses from every pore and look perfectly healthy, and so that’s producing the, sort of, terror reaction.”

    We are not really rational beings. Most of us under some circumstances, when we’re calm and not particularly threatened by anything, we can think rationally. But it doesn’t come naturally… you put any pressure on most people and the rational mind just shuts down and they do very strange things.

    On the upside of coronavirus – the pandemic is “making people aware that they actually do need to think about where their food comes from.“

    “We’ve gotten lazy. We’ve gotten comfortable and cozy, and thinking everything’s fine and nothing can really change,” says Greer, who adds that “the herd will continue stampeding off the cliff, but individuals are waking up and deciding what they really want to do with their lives.

    Listen to the entire interview here.

    And for more information on Hermitix:

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    Tyler Durden

    Sun, 05/10/2020 – 22:30

  • Crude-Chaos & COVID-Contagion Mark The End Of Imperium Americanum
    Crude-Chaos & COVID-Contagion Mark The End Of Imperium Americanum

    Authored by Patrick Armstrong via The Strategic Culture Foundation,

    A black swan is slang for an unexpected event with large consequences. 2020 has brought us two so far: the COVID-19 pandemic and the collapse of oil prices.

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    Each will have potent consequences for the Imperium Americanum. And there is a nest of black cygnets maturing.

    COVID-19

    A new infectious disease was noticed in China at the end of last year, identified as a coronavirus in January and a pandemic was declared in March. Since then economic and social life has come to a stop in the West as governments have been convinced to declare shutdowns. Restrictions became widespread in March and April and are still in effect; while some jurisdictions lessen them, others talk about more months. It is not the purpose of this essay to wonder whether these measures were justified or effective, only to state that they happened and that the world economy will have been enfeebled for two to three months or even longer. A big black swan indeed.

    The fuller effects won’t be known for some time but one result is certainly that the West’s repudiation for efficiency has taken a huge – perhaps fatal – hit. Only six months earlier, a survey confidently stated that the West – led by the USA and Britain – would do best in dealing with a pandemic. Not so: “We Are Living in a Failed State: The coronavirus didn’t break America. It revealed what was already broken“; “The Death of American Competence“; “The coronavirus is the worst intelligence failure in U.S. history“; “U.S.’s global reputation hits rock-bottom over Trump’s coronavirus response“; ““The world has loved, hated and envied the U.S. Now, for the first time, we pity it”; “Coronavirus: EU could fail over outbreak, warns Italy’s Giuseppe Conte“; “The EU has bungled its response to coronavirus and it might never fully recover“. China can’t hold back its laughter “Chinese state media calls U.S. a ‘primitive society,’ says ‘democracy is dying’ amid coronavirus“. Many of the American pieces, reflecting the abyssal divide in U.S. politics, write as through it were all Trump’s fault. But it wasn’t Trump who didn’t replace PPE stocks used up eleven years ago. Whatever failures are his, the failure is not his alone. And neither are the West’s other deficiencies his doing. No one seems to have stocks of PPE – the easier and most obvious first step against the threat.

    Washington deflects its failure by blaming China. But here too it’s lost its competence: here’s U.S. Secretary of State Pompeo asserting at the same time that it’s manmade and that it isn’t:

    POMPEO: Look, the best experts so far seem to think it was manmade. I have no reason to disbelieve that at this point.

    RADDATZ: Your — your Office of the DNI says the consensus, the scientific consensus was not manmade or genetically modified.

    POMPEO: That’s right. I — I — I agree with that. Yes. I’ve — I’ve seen their analysis. I’ve seen the summary that you saw that was released publicly. I have no reason to doubt that that is accurate at this point.

    To say nothing of Fauci’s money in the Wuhan lab. China may not even be the point of origin: France has just discovered a case from December and there may be a U.S. case from November. The breathlessly reported Five-Eyes assessment blaming China is fast collapsing: “mostly based on news reports and contained no material from intelligence gathering” says one of the Eyes. Washington may lash its minions into a coffle, but the rest of the world will scorn it as a pitiful attempt to distract. There will be increased rejection of the West’s assumption of competence and veracity. And, in the West itself, more will doubt the words of “experts” (especially those from Imperial College and its professors), “authorities and “trusted media sources”.

    Most of the West is still shut down but China is opening. Observers know that China is becoming the world’s top economy – the World Bank had already given it that title in PPP terms in 2013 – and COVID-19 is sure to accelerate the process by giving it a head start out of the economic slowdown. With cheap energy too.

    “Soft power” is a useful term that describes the appeal of a given culture to others. For many years this was a potent arrow in the America quiver – I often think of the character played by Gregory Peck in Roman Holiday as the exemplar: open, honest, honourable and modern, but content to be an example and never to take advantage of her. Propaganda, to be sure, but effective propaganda. COVID-19 shows something else: in the simplest terms China has given assistance to many countries and the “U.S. accused of ‘modern piracy’ after diversion of masks meant for Europe“. Piffle like “The United States and President Trump are leading the global effort to combat this pandemic” or “America remains the world’s leading light of humanitarian goodness” just make it more obvious. From the EU we get word salads: reaffirms/recognises/supports/recalls. And only three months ago the “West is winning“. It has be-clowned itself.

    Of the downstream effects of the COVID-19 black swan, we can see at least three:

    1. great and possibly fatal damage to the assumption of American and Western competence;
    2. a widening of the economic gap with China;
    3. a further change in the world soft power balance.

    The “blame China” diversion (not forgetting the rest of the current Enemy Package – Russia and Iran) is childish and will earn disgust.

    None of these changes is to the benefit of the Imperium Americanum.

    Oil

    In March Riyadh, on behalf of OPEC, proposed to Moscow that they reduce oil production in order to keep prices up. Moscow refused and Riyadh started pumping. COVID-19 shutdowns collapsed demand. A month later West Texas Intermediate futures went negative and the price of a barrel of oil passed below $20.

    Generally it is estimated that the U.S. shale oil industry (about 60% of U.S. production) needs prices of about $60 to be profitable, Saudi Arabia, despite very low pumping costs, squanders so much that it needs about $80; Russia on the other hand is profitable at $45 and has half a trillion dollars in its FOREX kitty. So, if Riyadh started a price war it is not in a strong position; Moscow, on the other hand, some say, can survive $25 a barrel for ten years. As China’s industry comes back on line, it is starting to buy oil but most of it from Russia.

    The end result of this price competition in a demand crash is unknown but it is unlikely that the U.S. shale industry will do well out of it. And, because so much of Washington’s behaviour is based on the confidence that it is oil-independent, the U.S. will not come out of this stronger.

    So two black swans are likely to leave the Imperium Americanum weaker and less influential. And, it should be said, more contemned. But there is more.

    And some black cygnets

    Some may remember the excitement of TV commentators about cruise missiles in the Gulf War of 1990. And a weapon that could be launched a thousand kilometres away and hit a particular floor of the building aimed at was pretty amazing. That was the first large-scale public combat use of very long-range precision weapons and for many years cruise missiles were a signature feature of U.S. attacks and practically a monopoly. Until 2015 when Russia struck targets in Syria from otherwise insignificant small craft in the Caspian Sea. So flabbergasted was Washington by this that its first reaction was to pooh-pooh the accuracy. But they were real; many Kalibres have been launched from different platforms including submerged submarines. So, there were now two demonstrated members of the club that could, in real conditions, precisely hit a target a long distance away.

    In its response to the killing of Soleimani, Iran showed that it too was a member of the club. While it seems some of its missiles did go astray, most hit exactly what they were aimed at. (The U.S. military’s opponents also took note – again – of the fact that it does not have effective air defences). And the usual reaction from Washington: downplaying at first; later we heard of the hundred-plus brain injuries. Quite an achievement for a country that has been under sanctions for decades. And Iran just joined another small club: countries that can launch a satellite on their own (again the U.S. contemptuous dismissal: “tumbling webcam in space“).

    The Trump Administration is very hostile towards Iran but no more so than most U.S. Administrations since the departure of the Shah – himself put back into power by a U.S.-UK coup. Probably the hottest moment of this undeclared war was in 1988, but there have been many other crises and we just had another threat from Washington. Tehran knows its on Washington’s hit list and has been preparing for decades. Missiles will be one of its principal defences. Washington would do well to reflect on Iran’s – surprising to it – membership in these two elite clubs before it makes any more threats. Little cygnets become big swans.

    Another black cygnet is the Iraq parliament’s demand that U.S. forces leave the country. Washington is consolidating its troops but they will be besieged prisoners if the country rises against them. Which sooner or later it will when the new Prime Minister forms his government. Two consequences of the neocon-dominated “New American Century” in the Middle East have been the growth of Iran’s influence and the demonstration that the U.S. military is not the omnipotent force it thought it was. When the effort to get it out starts, Washington will have three choices: hunker down and hope it goes away, enormously reinforce its troops for a completely new war, withdraw à la Vietnam. This cygnet is growing.

    * * *

    A pandemic, oil price collapse, a target country showing it has more capability than assumed, threatened expulsion from Iraq. The surprises have exposed long-time weaknesses.

    It’s always the unexpected things that test things to destruction.


    Tyler Durden

    Sun, 05/10/2020 – 22:00

  • Vice President Pence To Self-Isolate After Coronavirus Exposure: Live Updates
    Vice President Pence To Self-Isolate After Coronavirus Exposure: Live Updates

    Summary:

    • Pence to self-quarantine after exposure to aide with coronavirus
    • Latest UK numbers released as BoJo lays out new ‘Stay Alert’ plan
    • Italy also reports lowest cases since March
    • China reports first new case in Wuhan since April 3
    • NY reports lowest number of daily deaths since March
    • Afghanistan ends lockdown as economy collapses
    • Global new cases drop for 2nda day
    • Germany reports rise in spread rate above 1
    • Philippines reports spike in new cases
    • Local officials in Spain push government to reopen more quickly
    • UK urges reopening will be handled with caution as BoJo prepares to lay out framework
    • Turkey eases lockdown restrictions for most vulnerable people
    • UK testing of ‘contact tracing app’ going ‘well’
    • Pope Francis urges EU to work together to battle virus

    *       *        *

    Update (1750ET): Though he hasn’t tested positive for COVID-19, VP Pence will follow FDA Director Dr. Stephen Hahn into self-imposed quarantine, his office announced Sunday evening.

    Hahn said yesterday he would self-quarantine for 14 days after exposure to White House spokesperson Katie Miller, who tested positive for Covid-19 on Friday, three administration officials said. Several aides to Trump, Pence and Ivanka Trump have tested positive for the coronavirus in recent days, something that reportedly sent Trump into a “hot lava” rage as he chewed out his staff for neglecting to put his safety first.

    The White House has said it will conduct contact tracing and decide who else should self-isolate based on exposure to Miller on a case-by-case basis. Hahn is asymptomatic and tested negative for the virus on Friday, two senior administration officials said. Pence and Trump are reportedly being tested for the virus every day.

    Pence, of course, is the head of the White House coronavirus task force. It’s unclear whether he will continue with those duties, or cede them to another member for the time being.

    *       *        *

    Update (1530ET): The UK has reported a slight rise in cases, though the number of deaths reported continued to fall, on Sunday, as PM Boris Johnson unveiled his plan to gradually reopen the British economy.

    During his address, Johnson praised the British people for “showing the good sense” to abide by the lockdown restrictions, and declaring that “it is a fact that by implementing those measures we avoided a tragedy” that could have resulted in millions of infections and hundreds of thousands of deaths. It would be “madness” to throw away that achievement now, Johnson said, before presenting his “roadmap for reopening society” and abandoned his old “stay home” slogan with a new one: “stay alert”.

    Johnson boasted that the UK’s “R” rate – the measure of the virus’s spread – had dropped below one to between .5 and .9. He warned that if the rate should pop back above 1, that the UK might consider reimposing lockdown measures. As part of the reopening plan, those who can work from home are encouraged to keep doing so, while those who can’t “should go to work”, and follow the workplace guidelines, which include avoiding public transport if possible.

    Britons will also be allowed to enjoy “unlimited outdoor exercise” though fines will be increased for the “small minority” who violate the public social distancing guidance that has been in place for the last 2 months. Step 2 – the phased reopening of shops and schools – likely won’t come – at the earliest – until June 1.

    Here are the broad strokes; Johnson said he’d be unveiling more details during PMQs on Monday. As part of the plan, Johnson introduced 5 “alert levels” to measure progress. As the new guidelines are imposed, Johnson said, he hopes the UK will move from “level 4” to “level 3” (with ‘level 1’ representing the complete eradication of the virus in Britain).

    In other news, California has reported its daily figures, which are down from record numbers reported Friday

    • CALIFORNIA REPORTS 67 NEW DEATHS, 2,119 NEW VIRUS CASES

    *       *        *

    Update (1300ET): Italy reported its lowest number of new cases since March on Sunday. Italy counted just 802 new cases and 165 new deaths during the prior day, the lowest numbers since early March. That brought its totals to 219,070 cases and 30,560 deaths.

    More from BBG:

    Civil protection authorities reported 802 cases for the 24-hour period — the fewest since March 6 — compared with 1,083 a day earlier
    Confirmed cases now total 219,070.

    Daily fatalities fell to 165 — the fewest since March 9 — from 194 on Saturday, with a total of 30,560 reported since the start of the pandemic in late February.

    The latest good news comes as Prime Minister Giuseppe Conte prepares to take the next steps toward easing the national lockdown.

    Conte, under pressure from coalition allies to speed up the reopening as the country’s curve dramatically flattens, told an Italian newspaper that bars, restaurants and barbers would be allowed to reopen before June 1, the date previously set by the government. Shops are due to reopen on May 18.

    Meanwhile, China just reported the first case of the virus in Wuhan since April 3.

    *       *        *

    Update (1240ET): For the second day in a row, New York has reported the fewest virus-linkeddeaths in a day since March. The number of deaths reported yesterday was 207.

    As the number of deaths in New York nursing homes explodes, Cuomo announced a new policy Sunday: All nursing home staff must be tested for COVID-19 twice a week, no exceptions. Any nursing homes who fail to comply will lose their license, Cuomo said. He also revealed that the state is now investigating 85 cases of a mysterious respiratory syndrome affecting children that has appeared both in the UK and in the New York City area.

    Hospitalizations also continued to fall.

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    Meanwhile, the NYT reports several cities in Afghanistan ended weeks of lockdown on Sunday, despite the continued spread of the virus, due to the dire economic reality.

    The major cities of Mazar e Sharif and Kunduz in the north and Jalalabad and Mehtar Lam in the east were among those that officially ended the lockdown. Other cities such as the capital, Kabul, and Herat technically remained under lockdown, but the police appeared to be no longer enforcing it.

    *       *        *

    Sunday comes as the number of new cases reported over the weekend has slowed as countries around the world manage to bend their respective curves.

    Around the world, the number of new cases reported dropped for the second day in a row, according to data from Johns Hopkins.

    However, the number of new cases in Germany accelerated again just days after the federal government loosened restrictions once again, acting in concert with state leaders.

    The Robert Koch Institute for disease control said in a daily bulletin released Sunday morning that the number of people each sick person now infects (known as the reproduction rate, or R) has risen to 1.1.

    Meanwhile, in the US, the reopening has been going more or less as well as can be expected in Georgia, Texas and the dozens of other states that have already started the process.

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    Any reading above 1 means the number of new cases is growing, not slowing. And the German government had previously promised to slow down, or even reverse, its reopening policies should ‘R’ linger above 1 for too long.

    The institute claimed the number of new coronavirus cases had increased by 667 yesterday, bringing Germany’s total to 169,218, while the daily death toll had risen by 26 to 7,395.

    Germany wasn’t the only country to report a slight acceleration in cases Sunday. Iran warned of a resurgence of its own as it reported 51 new deaths. Iran started relaxing virus-related a month ago (around the same time that Turkey surpassed it as the worst outbreak in the Muslim world) and has been reporting steady declines in new cases and deaths ever since.

    While Germany considers how to respond to these troubling new data, Spain’s federal government continues to clash with several of the country’s regions over PM Pedro Sanchez’s decision to restrict the scope of the relaxation of its Spain’s extremely harsh 2-month-old lockdown.

    On Sunday, as Sánchez held his weekly teleconference with the heads of the country’s regions, several local officials complained about the government’s decision to reject requests by certain, mostly urban, territories (including Madrid but also parts of Valencia and Andalusia).

    “It is obvious that Madrid needs to take a step forward,” said Isabel Díaz Ayuso, the head of the region worst hit by the pandemic, citing the capital’s role as the heart of Spain’s economy. As stage one of the reopening begins tomorrow, 51% of Spain will be allowed to gather in groups of up to ten, non-essential shops will be allowed to reopen without appointment, and restaurants and bars may serve people in outside seating.

    “It is important to keep everything we’ve gained up to now,” responded María Jesús Montero, government spokeswoman, who said the government’s decision was based on technical criteria.

    Meanwhile, Pope Francis on Sunday called on the leaders of the EU to work together to deal with the social and economic consequences of the coronavirus pandemic. The pope noted in his Sunday blessing that 75 years have passed since Europe began the challenging process of reconciliation after World War II. He said the process spurred both European integration and “the long period of stability and peace which we benefit from today.”

    In Asia, the Philippines’ health ministry reported 184 new coronavirus cases, taking the Southeast Asian nation’s total reported infections to 10,794, while 15 more deaths related to COVID-19 were recorded, bringing the toll to 719, while 82 patients have recovered to bring total recoveries to 1,924, it said in a bulletin.

    In the US, local media reported that at least 75 protestors tested positive for COVID-19 after attending a large rally against the stay-at-home order in Wisconsin.

    In the UK, as BoJo prepares to lay out his plan for reopening the British economy, Housing Minister Robert Jenrick said said the economy would restart slowly and cautiously.

    “The message … of staying at home now does need to be updated, we need to have a broader message because we want to slowly and cautiously restart the economy and the country,” Jenrick told Sky News.

    Jenrick added that easing the lockdown would be conditional on keeping the spread of the virus under control, and if the rate of infection begins to increase in some areas, more stringent measures could be re-introduced. Elsewhere in the UK, a trial of a controversial government test-and-trace app carried out on the Isle of Wight has yielded positive results, much to the chagrin of privacy advocates.

    “The trial in the Isle of Wight of that tracking app, the NHSX app designed to help assist people, is going well. People have been downloading it enthusiastically and I know that the plan is later in the month to make it more widely available as well,” a local official told the FT.

    In Turkey, which is – as we mentioned above – the worst-hit country in the Muslim world by number of infections, senior citizens have been allowed to leave their homes for the first time in seven weeks Sunday under relaxed coronavirus restrictions. Those aged 65 and over, deemed most at risk from the virus, had been subjected to a curfew since March 21, but they were permitted outside Sunday for four hours as part of a rolling program of reduced controls being pushed by Ankara.


    Tyler Durden

    Sun, 05/10/2020 – 21:58

  • “F*ck Elon Musk”: The World Turns On Tesla CEO After He Sues Alameda County
    “F*ck Elon Musk”: The World Turns On Tesla CEO After He Sues Alameda County

    Update 5/10/2020 8AM EST: As he stated he was going to do yesterday, Tesla CEO Elon Musk filed an 18-page lawsuit that asked a federal judge to allow him to re-open his factory in Fremont.

    “Alameda County’s power grab not only defies the governor’s orders, but offends the federal and California constitutions,” the lawsuit said. The suit argues that Alameda County “had violated the due process and equal protection clauses of the Fourteenth Amendment and sought an injunction that would allow the company to operate.”

    Later in the day on Saturday, Tesla, likely covering for Musk’s fiasco and trying to do damage control, put out a blog post called “Getting Back to Work”. 

    The response to Musk’s actions this weekend from many on social media, including Democrats and left-leaning California politicians, was robust. CA Assemblywoman Lorena S. Gonzalez simply Tweeted “F*ck Elon Musk.”

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    And she doesn’t appear to be the only one that’s “over” Musk and his antics. Comedian Michael Rapaport referred to Musk as “Ant Dick Man”, saying “Guy thinks he’s Tony Stark but he ain’t”.

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    “Fuck that bozo,” replied celebrity jeweler Ben Baller.

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    Former Secretary of Labor and Berkeley professor Robert Reich called Musk “the worst of capitalism”. Musk then responded, in Russian, calling Reich an idiot. 

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    “Hard times are a test of character; and by that measure Elon Musk is proving a total zero,” said Columbia professor and Author Tim Wu:

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    “This is a perfect time to remember all the people who thought this guy was going to save the world,” one journalist wrote. 

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    Finally, well known Tesla short seller, Yale law school graduate and former 30 year trial attorney Montana Skeptic broke down the (lack of) merits of Musk’s lawsuit, before offering up his services pro bono to help out Alameda County in this thread:

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    Of course, if the SEC had just done its job the first time Musk committed securities fraud, we wouldn’t be having to deal with any of this mess. But far be it for us to expect that.

    —

    Recall just days ago we reported that Tesla was sending people back to work at its Fremont factory in Alameda County before the area’s lockdown expired.

    Then, late last week, Alameda County responded by telling Musk that he could not re-open his factory. “We have not given the green light. We have been working with them looking at some of their safety plans. But no, we have not said that it is appropriate to move forward,” Erica Pan, interim health officer for the Alameda County Public Health Department, said on an online town hall meeting on Friday. 

    That was enough to trigger a total Elon Musk meltdown. The CEO, who has been going off on diatribes about civil liberties on conference calls and podcasts alike, Tweeted out on Saturday that he is going to be suing Alameda County for not allowing him to re-open.

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    Calling it the “final straw” Musk also said he was going to move Tesla’s headquarters out of California and to either Texas or Nevada.

    Musk also called the county’s interim health officer “ignorant”, claiming she was acting “contrary to the Governor, the President, our Constitutional freedoms & just plain common sense!”

    Most importantly, however, she is acting against the interest of Elon Musk and Tesla. 

    People on social media weighed in about Musk’s meltdown:

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    Recall, on Tesla’s recent earnings call, toward the end and increasingly angry, Musk unleashed a 5-minute rant complete with an f-bomb in which the CEO doubled down on his stance against the shelter-in-place orders that have gripped the United States economy in recent weeks, warning that the factory shutdowns are a “serious risk” to the electric automaker’s business. 

    Hey, thanks for all the tax breaks and subsidies, California, see you later!

     

     


    Tyler Durden

    Sun, 05/10/2020 – 21:44

  • China Unveils Pandemic-Fighting T1-Smart-Glasses That "See" People's Temperatures In Real-Time
    China Unveils Pandemic-Fighting T1-Smart-Glasses That “See” People’s Temperatures In Real-Time

    A Chinese startup that develops augmented-reality glasses for everyday use, or for other applications such as in manufacturing and gaming, has tweaked one of its products with a thermal sensor to create pandemic glasses. Such glasses can detect possible COVID-19 carriers by scanning body temperatures. 

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    The pandemic glasses are called T1 glasses and are developed by Hangzhou-based startup Rokid. The glasses help the wearer screen for symptoms that are common among late-stage COVID-19 carriers such as high body temperatures, reported Reuters. 

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    Rokid Vice President Xiang Wenjie said demand has surged for the augmented-reality glasses with 1,000 pairs purchased by governments, industrial parks, and schools.

    “Apart from fixed temperature measurement, T1 can provide portable, distant, and prompt temperature checking, which would be a great help,” Xiang said.

    The glasses have an infrared sensor and a camera that allow the wearer to “see” peoples’ temperatures. Upgraded versions are coming, will enable the wearer to take multiple readings at once in public areas. 

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    The evolution of scanning people with handheld or fixed thermal cameras will eventually transition to pandemic glasses, this is already happening at one corporate center in Hangzhou. 

    “With more new products coming out, especially these glasses, we think we can use them to conduct contactless temperature measurement, they are very efficient when faced with a big crowd of people,” said Jin Keli, president of Greentown Property Management.

    Pandemic glasses could be something Amazon might want to look into, considering it is outfitting its warehouses with fixed thermal cameras to monitor employees’ temperatures. 

    We can now envision the future: Pandemic drones circling above with thermal sensors, searching for COVID-19 carriers while law enforcement officers on the ground wearing pandemic glasses do the same.

    Please return us to a pre-corona world! The Post-corona world is dystopic as the surveillance state is being ushered in. It’s only a matter of time before people start wearing clothing that blocks their heat signatures from thermal sensors. 


    Tyler Durden

    Sun, 05/10/2020 – 21:30

  • US Deploys B-1Bs, Warships In South China Sea As China Nationalists Call For Invasion Of Taiwan
    US Deploys B-1Bs, Warships In South China Sea As China Nationalists Call For Invasion Of Taiwan

    While the global economy remains in a state of near ubiquitous lockdown due to the coronavirus pandemic, the US military has been busy. According to an update posted on the Pacific Air Forces website, a B-1B Lancer strategic bomber part of the 9th Expeditionary Bomb Squadron was one of two B-1s conducting a training mission in the South China Sea in support of Pacific Air Forces’ training efforts and “strategic deterrence missions to reinforce the rules-based international order in the Indo-Pacific region.“

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    The training missions follows what Stars and Stripes described on April 30 as a “show of force” by the U.S. military in the South China Sea “with a sortie over the contested waters on Thursday by two Air Force bombers.”

    The B-1B Lancers from the 28th Bomb Wing at Ellsworth Air Force Base, S.D., flew a 32-hour round trip to conduct operations over the sea as part of a joint bomber task force by the U.S. Indo-Pacific Command and U.S. Strategic Command, the Air Force said in news release Thursday.

    The mission further demonstrated the service’s new “dynamic force employment model,” which is intended to make its global bomber presence less predictable, the Air Force said.

    Meanwhile, according to a Friday report from the USNI, the US Navy “sent a pair of ships to patrol in the vicinity of a mineral rights dispute between Malaysia and China in the South China Sea for the second time in a month.”

    According to the report, the Littoral Combat Ship USS Montgomery (LCS-8) and replenishment ship USNS Cesar Chavez (T-AKE-14) conducted a presence operation in the South China Sea on Thursday near Panamanian-flagged drill ship West Capella, in what appears to have been a show of force/deterrence. The drill ship is under contract to conduct surveying operations in Malaysia’s exclusive economic zone for Malaysian state oil company Petronas. Chinese People Liberation Army Navy (PLAN) warships and China Coast Guard vessels have also operated near the Malaysian-contracted drilling ship, according to USNI.

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    USS Montgomery (LCS-8) conducts routine operations near Panamanian flagged drillship, West Capella, on May 7, 2020 in the South China Sea. US Navy Photo

    Separately, in late April, guided-missile cruiser USS Bunker Hill (CG-52) sailed with the Royal Australian Navy frigate HMAS Parramatta (FFG-154) before joining the amphibious assault ship USS America (LHA-6) and guided-missile destroyer USS Barry (DDG-52) to conduct combined exercises in the area where a Chinese government survey ship, Haiyang Dizhi 8, was said to be operating with an escort of several China Coast Guard ships.

    On Friday, U.S. Pacific Fleet commander Adm. John Aquilino issued a pointed statement addressing Chinese operations in the region: “We are committed to a rules-based order in the South China Sea, and we will continue to champion freedom of the seas and the rule of law,” Aquilino said in the release.

    “The Chinese Communist Party must end its pattern of bullying Southeast Asians out of offshore oil, gas, and fisheries.”

    Bunker Hill conducted a freedom of navigation operation through the Spratly Island chain near Gaven Reef in the South China Sea on April 29. “Unlawful and sweeping maritime claims in the South China Sea pose a serious threat to the freedom of the seas, including the freedoms of navigation and overflight and the right of innocent passage of all ships,” reads the statement from 7th Fleet.

    * * *

    In response to what may be prompting these increased “shows of force” by the US military in China contested waters, today the SCMP reported that “Beijing is trying to calm rising nationalist sentiment after a growing chorus of voices called for China to take advantage of the Covid-19 pandemic by invading Taiwan.”

    A number of commentators on social media have called for the island to be reunified by force – something Beijing has never ruled out – but some analysts believe the authorities want to play a longer game and are now trying to cool the “nationalist fever”.

    According to the SCMP report, an article published earlier in the month in the magazine of the Central Party School, which trains senior officials, drew historical parallels with the Qing dynasty’s conquest of Taiwan in the 17th century to highlight the importance of patience and careful planning.

    The 5,000-word article in Study Times, written by historian Deng Tao, said the Qing had spent the next 20 years preparing for the invasion and conquest of the island and argued that they had also used political, diplomatic and economic measures to achieve their goal rather than just relying on force.

    The historian then went on to say that the Qing had managed to isolate the island’s rulers diplomatically and sent representatives to the island to court support among its Han Chinese residents by offering them incentives to return to the mainland and escape the heavy taxes imposed by their rulers. But in the meantime, the Kangxi emperor had been building up and training an invasion fleet that successfully took the island in 1683 and incorporated it into the Qing empire.

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    Calls from online nationalists for an invasion of Taiwan have been growing in recent weeks. Photo: Reuters

    Fast forward to today, when a number of commentators and retired military commanders have called for Beijing to retake control of the island, where the defeated Nationalist forces fled in 1949 following their defeat in the civil war.

    Additionally, some former military leaders have argued that the United States – which is bound by law to help the Taiwanese government defend itself – is presently unable to do so because all four of its aircraft carriers in the Pacific have been affected by the Covid-19 outbreak.

    Some legal commentators, including Tian Feilong, an associate professor at Beihang University, in Beijing, have gone so far to call on the government to consider the use of force and argued that an “anti-secession” law ratified in 2005 gives it the legal authority to do so.

    Tian argued in an article published on the news website guancha.cn that political and social developments on the island meant it was impossible to resolve the situation peacefully and said anti-government protests in Hong Kong showed that the “one country, two systems model” – which Beijing hoped to use as the basis for reunification with Taiwan – had failed.

    Qiao Liang, a retired air force major general who is seen as a hawkish voice on the mainland, argued in a separate article published on the social media platform WeChat that now was not the right time to take Taiwan by force. Liang warned it would be “too costly and risky” and said China should wait until it had the economic and military strength to challenge the US.

    A Beijing-based military source said the mainland authorities still hope the situation can be resolved peacefully and the majority of Taiwanese still want to maintain the status quo.

    “Maintaining the stability and prosperity of Taiwan before and after its unification is still the top priority for the mainland,” the source continued.

    Lee Chih-horng, who lectures in cross-strait relations at Nanyang Technological University in Singapore, said the articles by Deng and Qian indicated that the government wanted to stick to its own timetable for Taiwan unification.

    The Beijing leadership has now realised that they need to cool down the nationalist fever as calls to take Taiwan by force have become too emotional, with many on mainland social media stirring up the topic for attention,” Lee said.

    “As Qiao said, Beijing realises now is not a good time to take Taiwan back by force, but [President] Xi [Jinping] will come out up with the ultimate solution to solve the Taiwan issue.”

    Whether China’s heightened nationalistic tendencies are behind the stepped up US “training missions” and “patrols” in the South China Sea remains unclear, but amid the heightened diplomatic tensions between the US and China over the source of the coronavirus pandemic, the rising military tensions will hardly facilitate the return of normal relations between the two superpowers.


    Tyler Durden

    Sun, 05/10/2020 – 21:18

  • Venezuela Displays Military Boats & Weapons It Says Were Part Of US Mercenary Invasion
    Venezuela Displays Military Boats & Weapons It Says Were Part Of US Mercenary Invasion

    Via Southfront.org

    The failed attempt of US mercenaries operating from Colombia to stage a coup in Venezuela continues developing with more and more details appearing.

    On May 9, Venezuela’s military said it seized three abandoned Colombian light combat boats that soldiers found in the Orinoco river area.

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    Colombian military boats displayed via Venezuelan state media.

    This happened several days after the government accused its neighbor of aiding a failed invasion staged by US mercenaries.

    The Defense Ministry said the boats were equipped with machine guns and ammunition, but had no crew, adding they were discovered as part of a nationwide operation to guarantee Venezuela’s “freedom and sovereignty.”

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    Colombia’s Navy said that boats were just dragged away by strong river currents.

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    Probably, US mercenaries also appeared in Venezuela thanks to ‘strong currents’ in the area.

    Machine guns and ammunition said to be recovered as part of the investigation into last week’s mercenary invasion of Venezuela:

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    The Guardian described previouslys:

    An American mercenary captured after a bungled attempt to topple Nicolás Maduro has claimed he was on a mission to seize control of Venezuela’s main airport in order to abduct its authoritarian leader – and he alleged that was acting under the command of Donald Trump.

    …In a heavily edited video confession, broadcast on Wednesday by the state broadcaster, VTV, Denman said he had flown to Colombia in mid-January, where he was tasked with training Venezuelan combatants near Riohacha, a city 55 miles west from the Venezuelan border.

    From there Denman – who said he had never previously set foot in either South American country – claimed the group planned to journey to Caracas to “secure” the city and the nearby Simón Bolívar international airport, before bringing down Maduro.

    The group of a least a dozen men, who were trained by Florida-based private security firm Silvercorp, reportedly tried to sneak into Venezuela via fishing boats a week ago, but were caught soon after stepping foot on land.


    Tyler Durden

    Sun, 05/10/2020 – 21:00

  • It's Retail Vs Institutions: A Look At Who's Buying Stocks Here… And Who Isn't
    It’s Retail Vs Institutions: A Look At Who’s Buying Stocks Here… And Who Isn’t

    Cutting to the chase, the market is now up 30% from its March 24 lows with the Nasdaq back in the green for 2020, and yet as Goldman pointed out earlier, there is now more confusion over what the market does next than in mid-March. And since money talks and bullshit writes long-winded research reports “explaining” what may or may not happen, here is a brief rundown of what every major investor class has been doing for the past few weeks so it hopefully becomes a little more clear why stocks continue to surge.

    AS DB’s Parag Thatte shows in his latest Investor positioning and flows chartpack, after an unprecedented puke in March, systematic (i.e., quant, algos, vol-targeting, and generally “machines”) strategies has been behind the modest tick higher in positioning – which is still near record lows – even as discretionary (i.e., human, hedge fund traders) positioning has turned again and is back near recent lows.

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    Within systematics, vol control investors have continued to rise mostly thanks to the fast drop in the VIX, which closed below 28 on Friday:

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    CTA positioning, while off the lows, are still short and as Nomura’s Charlie McElligott wrote on Friday, a ways away from either buy or sell thresholds.

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    Risk-parity funds, after the record plunge in March, have done basically nothing for the past 2 months and their equity-beta remains near all time lows.

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    Meanwhile, not only are institutional investors not buying, their positioning had turned even more bearish into the April/May rally, causing much pain and even more relative losses.

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    Predictably, and similar to Warren Buffett, hedge funds remain out of the picture, their beta to markets barely budging in recent weeks and just shy off all time lows.

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    In short, nobody at the institutional level is buying, yet stocks continue to soar. Why?

    Well, for one, volumes have plunged making it much easier to push stocks around with odd lots..

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    … and as liquidity remains near all time lows, facilitating outsized market flows amid the collapse in volumes on even modest buying interest…

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    … it is quite easy for price-indiscriminate buybacks – like Apple’s latest $50BN stock repurchase – to ignite overall market direction: as shown below, the amount of buybacks announced in recent weeks was the biggest since last summer, led by the most important stock in the market: AAPL.

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    At the same time, all those funds who jumped on the short side, confident that this was finally it, have gotten crushed amid the biggest short squeeze in history (thanks, Fed)…

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    … with short interest plummeting back to all time lows after a modest increase in late March as shorts got steamrolled yet again.

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    To summarize: institutions selling, machines flat, hedge funds more bearish… but volumes and liquidity down, buybacks surging (something we touched upon more last week), shorts crushed and forced to cover and – drumroll – retail investors flooding the market and “making a killing” at least according to Robin Hood data which as Michael Krause notes, is a good proxy for what all retail US stock traders are doing.

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    Source: Robintrack

    So ironically, while the “smartest guys in the room” have failed to benefit from the recent rally, it is Joe Sixpack that has made some impressive profits amid repeated “dip buying”….

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    … unless this is just more of the same distribution from institutions to retail we saw in late 2018 and again in late 2019, when retail investors were delirious with visions of fortunes and early retirement, only to see the market “trapdoor” from beneath them. This would mean that the next trapdoor will open just as soon as institutions have “distributed” enough to to retail investors and the next stop, according to Goldman, would be 2,400.

    Finally, a familiar chart from 2019 and years prior: the S&P levitates higher even as investors pull money from stock funds, i.e., sell.

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    Impossible? Yes: the disconnect always eventually ends, with stocks catching down to flows. The only unknown is when.


    Tyler Durden

    Sun, 05/10/2020 – 20:30

  • "The Worst Case For Markets": Massive Stagflation In 2021 As Prices Rise Without Rising Wages
    “The Worst Case For Markets”: Massive Stagflation In 2021 As Prices Rise Without Rising Wages

    Authored by Vincent Cignarella, Bloomberg macro commentator

    “We are witnessing the Great Monetary Inflation (GMI)—an unprecedented expansion of every form of money unlike anything the developed world has ever seen.” – Paul Tudor Jones

    The current worry in global markets is a recession, or worse, as the shutdowns to contain the pandemic rob workers of paychecks and consumer spending collapses. But those are relatively short-term concerns, most likely for the second and possibly third quarter of this year. The real concern should be the fallout from the inflation that’s going to accompany any recovery we have and the possibility of a return to 1970s-style stagflation.

    Governments and central banks are throwing everything they can at this downturn, and will continue to do so until it improves. Even a U-shaped recovery that happens as late as the beginning of 2021 will have an enormous impact on the prices of everyday items. The biggest threat comes from companies shifting supply chains permanently away from cheaper China imports to more reliable, but expensive, suppliers. But there are other concerns as well.

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    Source: Paul Tudor Jones

    For example, companies like Disney, airlines and restaurants will likely have to raise prices to meet costs as social distancing rules will still apply. Fees for cable services will jump due to rising costs to carry sports broadcasts to compensate for a lack of fan revenue. Crude futures will likely rise as demand kicks in but suppliers stay firm in order to replenish revenues lost to the virus. Vehicles could see price increases too as automakers attempt to recoup 1st half of 2020 revenue.

    The U.S. Treasury will be servicing a massive public debt in 2021 and will be at the front of the line competing with the private sector borrowing. Meanwhile, the biggest buyer of Treasuries, the Fed, will likely be halting purchases as will other central banks, adding to pressure to debt instruments. As rates rise, rents and home prices will jump, with rents a direct component of inflation figures.

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    Source: Paul Tudor Jones

    There’s an unfortunate downside to this inflationary pressure. While prices will be rising, job growth will be slower to return to normal as social distancing will prevent us from reaching full employment. The combination of rising prices without rising wages will place enormous pressure on the economy, no doubt causing a real economic recession in 2021 and not one that’s the result of a pandemic. This stagflation scenario, not seen since the 1970s, is the worst case for markets, particularly risk assets like stocks and bonds.


    Tyler Durden

    Sun, 05/10/2020 – 20:18

  • What If The Crisis Is One Without End… Like George Orwell's Perpetual War
    What If The Crisis Is One Without End… Like George Orwell’s Perpetual War

    Submitted by Luke Eastwood

    Notions of Freedom

    We are living in strange times indeed, this crisis raises many questions about the nature of freedom and what our expectations are, or should be.  Everyone has their own notions about what freedom means and how far that should extend to oneself and indeed, to everyone else.

    I want to start with a look at where we’ve come from before I look at where we are now, as I feel it gives a better understanding of our definitions of freedom and a better context for viewing where we are, at this moment in time.

    Society probably started with the tribe – maybe not even having a leader if the numbers where small enough, say 10 people. Tribes of scores or more obviously became hard to manage and so, undoubtedly, this led to the idea of a leader or a group of leaders – a chief, or a council of chiefs. Such a system seems to have worked well, so long as the chiefs acted in the best interest of the tribe, and not in their own best interest. Tribes and early kingdoms often had a mechanism for dealing with a poor leader – the  symbolic marriage of the leader to the land and the right to depose, or even excute, a leader that failed to live up to expectations.

    Such concepts of leadership are ancient but have survived in various places into the  modern era,  including Ireland where I live. Although the practice associated with this custom is long gone, knowledge of it remains vaguely in the public consciousness and more definitively in the realms of scholarship and Celtic Neo-Paganism.  However, societies across the globe began to move beyond this cherished accountability millenia ago – with the rise of depsotic monarchy, something that still exists as an unfortunate anachronism even now.

     As tribes grew into countries and countries grew into empires, monarchs became decreasingly accountable to their citizens, or rather subjects – those who are subjugated. While many monarchs felt an obligation, both ‘divine’ and moral to behave with care and responsibility, others acted in pure self interest, free of any accountability for their actions. With the backing a large army or, sizeable personal guard, it became increasing difficult to hold monarchs accountable and one had to rely on goodwill in most cases, rather than enforcement.

    Of course, there have been countless deposings of monarchs, by the people or by rival claimants, although the latter didn’t always turn out to be beneficial. Probably the most famous of these is that of Galus Julius Caesar, the Dictator for life of the final years of the Roman Republic, who gave his name to the title Caesar, Czar and Keiser. He was brutally murdered by Brutus (hence the word brutal) and we all know how that turned out the for Roman Republic.

    The republic itself was a form of democracy, based on an earlier model from Greece, a civilization that had immense influence on Rome. Of course, Athenian democracy was nothing like what we now regard as democracy. The right to decide how government was organised and what it did fell to the hands of an elite group – demokratia, or “rule by the people” was only for citizens and of these, only the men could vote. At the time (507 BC) this meant 40,000 men, out of a much larger population, but in reality no more than about 5000 men could attend assemblies, due to other commitments. Still, it was a ground-breaking step, so long as you weren’t a foreigner, criminal, woman, child or a slave.

    It is from these Greek origins that we get the word democracy and the notion of rights and freedom for all. Over time there have been variations on this model that have been tried out – constitutional monarchies, republics, socialist states, fascist states and communist states, which have varying levels of input for the masses. The masses might also be referred to as ‘plebeians’ as the Romans liked to call ordinary folk, a corrupted form of which still exists as a minor insult – pleb.

    However, through most of recorded history, the most common system has been monarchy, although one could hardly describe it as the most popular. Simpler than a democracy and easy to enforce – notions such as corruption, fairness and accountability do not come into play, as divine rule (e.g. the divine right of kings) gives the ruler carte blanche to do whatever they god-damn like, unless their despotism provokes a revolt.  Of course, revolt has happened, from time to time, throughout history and one of the most famous ones is that of the barons in England against king John.

    The Magna Carta (Great Charter, of 1215) is considered by many as the bedrock of Western civilization and democracy, despite the fact that it only gave limited concessions to a very small number of nobles. It was a start at least, and perhaps enabled further inroads into the monarchic monopoly on power. The Peasants’ Revolt of 1381, against Richard II of England was a major shift. Led by a commoner (Wat Tyler) it was a great embarrassment for Richard, who did not have a standing army on hand. He was forced to pretend to negotiate with the rebels, who camped at Blackheath, while he secretly ordered the Mayor of London to raise an army to disperse and execute the protestors.

    There are countless other examples of rebellion against monarchs across the world, but most of them are forgotten. Perhaps the best remembered rebellion is that of the French paupers, against the Bourbon monarchy and the entire aristocracy of France. This violent and bloodthirsty revolution sent shudders of terror across the monarchies of the world and precipitated a programme of reform, based on fear of similar events occurring.

    Of course, some countries carried on regardless – Russia and America being particularly sad examples, as Russia only abolished surfdom in 1861, while USA only abolished slavery in 1865. One could justifiably say that the lives of these ordinary people, who were now ‘citizens’ hardly improved as their freedom was pretty much nominal. This, in Russia, led to the revolution of 1917, due to the intransigence of the Czar/Tsar (Caesar) Nicholai II Alexandrovich Romanov II. The overthrow of the Russian system, inspired by the ideas of Marx and Engels, led to a Bolshevik government headed by Vladimir Lenin. Whatever notions the Soviets had, Lenin was a de facto Tzar in waiting and Stalin was certainly that, if not an uncrowned heir to Ivan The Terrible.

    Post World War II, we supposedly have a new age of democracy and freedom, but that only applies to some. In truth, almost the whole world collection of governments has learned the art of propaganda – thanks to the astounding upskilling efforts of the National Socialists (Nazis) of Germany, who took this to new heights (or lows rather), turning it almost into an artform. While we have been led to believe that we are free and democratic, we have never been more exposed to lies and propaganda than we are now. The biggest lie of all is that we live in a democracy, when in fact we actually only get to choose a new set of corrupt and self-serving narcissists, every 4 or 5 years.

    Democracies, the world over, have been bought – lobbyists have far more power than the electorate could ever hope to achieve. What we in fact have is the illusion of democracy – state agencies act without oversight, individuals have no say over the manifesto and policies of parties in power and have no mechanism to undo or prevent undesirable actions by governments. The only mechanisms available are the occasional referenda (instigated under pressure), protest (peaceful or otherwise) and violent overthrow.

    In most cases, the effort and risk of violent overthrow is considered too much for the majority of people – it takes dire poverty, starvation and horrific coercion before the ‘plebs’ are pushed to the brink. Governments are aware of this and generally apply the ‘boiling frog’ method of restricting people’s freedoms and the removal of privacy and general rights. However, they do on occasion overstep the mark or fail to adequately conceal their stealthy nefarious actions – which inevitably leads to protest or insurrection. 

    History has proven that violent insurrection usually fails, but it is rather foolish of authoritarian governments to take a gamble on this not happening. What is far more effective for us ‘plebs’ is non-violent insurrection, in the form of non-compliance – this worked wonders for both Gandhi and for Martin Luther-King, two of the most inspirational leaders of the 20th century. Nelson Mandella is another fine example of someone who led a monumental change, in South Africa, while also avoiding a catastrophic bloodbath, again through advocating of non-violence and showing exceptional leadership skills.

    At this moment in time, we are held hostage by a virus and the fear of what it might do to humanity. While public safety has to be a priority, one has to ask the question – what is this really about? Is this a manufactured crisis or is it is just opportunistic governments capitalizing on their best chance to roll out new draconian measures? Temporary emergency powers is one thing, but if there is no rollback after the crisis is over, what then? What if the crisis is one without end – like George Orwell’s perpetual war in his novel 1984?

    We have come to expect freedom, we are told that we live in the ‘free world’ yet we see our rights and freedoms and privacy being eroded by government legislation, corporate invasive technology and data collection. Where do we draw the line? When do we say enough is enough? Strangely, the same technology that enables our surveillance monitoring is also the most powerful tool at our disposal. Internet and telecommunications enables us to share information, just as the ‘system’ collects information about all of us. For many, it has opened our eyes about government agendas, methods and operations as we now have unprecedented access to worldwide information, often in real-time, or within minutes and hours of events happening.

    Many believe that a new era of oppression is being rolled out, right now as we sit in our homes, enabled by the high-power, high-speed and low latency 5G network, worldwide by a hidden agency. Conspiracies aside, there are many questions to be asked about our rights, what our freedoms should consist of and what the limits of government and corporate actions should be. We need to ask those questions, we need to demand answers and show the ‘powers that be’ that the thirst for true democracy is still alive and kicking. If we volunteer to be imprisoned or to become our own jailors then there is no hope for humanity. As in the past, humanity needs to assert itself, in order to remain free of despotism and it has never been more urgent than now. Corny as it may be, the simplest way to express this is for me to repeat the words of the late Bob Marley – “Get up, stand up, stand up for your rights!”

    Read more work by Luke at lukeeastwood.com


    Tyler Durden

    Sun, 05/10/2020 – 20:05

  • A COVID State Of Mind – America's Mental Health Suffers As Anti-Anxiety Drug Prescriptions Soar
    A COVID State Of Mind – America’s Mental Health Suffers As Anti-Anxiety Drug Prescriptions Soar

    The COVID-19 pandemic has resulted in forced lockdowns across the country and an economic depression with high unemployment. Tens of millions of jobs have been lost in the last six or so weeks, as “the greatest economy ever” implodes. A new report suggests many Americans cannot handle the unprecedented public health crisis and financial stress, as they quickly seek medication to numb the pain. 

    Express Scripts says prescriptions for anti-anxiety medications jumped 34% between February 16 and March 15, including a significant 18% spike on a week-over-week basis in the week ending March 15. 

    Prescriptions for antidepressants and sleep disorders also surged 18.6% and 14.8%, respectively, between mid-February and March 15. 

    “Americans are turning to medications for relief, demonstrates the serious impact COVID-19 may be having on our nation’s mental health,” Express Scripts said in its “America’s State of Mind Report.”

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    The report outlines several other significant findings of a heavily medicated society, as these folks seek more prescriptions as their mental health deteriorates:

    • More than three quarters (78%) of all antidepressant, anti-anxiety and anti-insomnia prescriptions filled during the week ending March 15 (the peak week) were for new prescriptions. 
    • The percent increase in the number of new prescriptions between the week of February 16 and week ending March 15 for the all three categories was 25.4% 
    • The percent increase in the number of new prescriptions between the week of February 16 and week ending March 15 for anti-anxiety medications was 37.7%

    The intense anxiety and fear that many people are feeling today could lead to social instabilities as the virus crisis and economic collapse continues to worsen.

    Some of those instabilities could be a “suicide wave,” protests, violent crime, and a rise in drug overdoses.

     


    Tyler Durden

    Sun, 05/10/2020 – 19:40

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