- "We Need To Act Now" – UN Warns World Faces Worst Food Crisis In 50 Years
“We Need To Act Now” – UN Warns World Faces Worst Food Crisis In 50 Years
Tyler Durden
Fri, 06/12/2020 – 02:45The world has entered a critical period, as depression unfolds, a virus pandemic rages, socio-economic chaos will flourish to unmanageable levels for governments and central banks.
UN secretary-general, Antonio Guterres, warned Tuesday that the world is on the brink of the worst food crisis ever witnessed in the post-World War II era.
Guterres said the virus pandemic could push more than 50 million into instant poverty, further saying countries must act now to shore up food security or risk imminent crisis:
“Unless immediate action is taken, it is increasingly clear that there is an impending global food emergency that could have long term impacts on hundreds of millions of children and adults,” he said in a video message on Tuesday. “We need to act now to avoid the worst impacts of our efforts to control the pandemic.”
Guterres pointed out that millions were already suffering from hunger and malnutrition before the pandemic. Now a public health crisis, coupled with a worldwide depression, has triggered a perfect storm of extreme poverty and hunger that could generate a sustained period of social unrest.
Read: “A Quarter Of Americans Skipped Meals Or Relied On Food Banks During Virus Lockdowns”
He said countries with abundant food supplies could be at risk for disruption. Already, the US has seen some meat and food processing plants shutter operations due to virus-related reasons, resulting in shortages of certain food products and rising food inflation.
“Our food systems are failing, and the COVID-19 pandemic is making things worse,” he said.
Maximo Torero, the chief economist of the UN Food and Agriculture Organization, said the world’s global food system is under unprecedented threat, never before seen in recent memory, as lockdowns limited people’s ability to harvest and buy and sell food.
“We need to be careful,” Torero said. “This is a very different food crisis than the ones we have seen.”
Also released on Tuesday was the UN report titled “The Impact of COVID-19 on Food Security and Nutrition” — was an expanded warning of Guterres’ video message.
WHO notes the highest risk areas for a food crisis breakout
“The Covid-19 crisis is attacking us at every angle,” said Agnes Kalibata, the UN secretary general’s special envoy for the 2021 food systems summit. “It has exposed dangerous deficiencies in our food systems and actively threatens the lives and livelihoods of people around the world, especially the more than 1 billion people who have employment in the various industries in food systems.”
WHO states a “triple menace” is playing out in East Africa: COVID-19, Locusts, and heavy rains.
Read: “A ‘Biblical’ Locust Plague Has Put Millions On Brink Of Famine”
To make matters worse for Africa, in the western part of the country, another “triple threat” is playing out of COVID-19, Ebola, and Measles, along with months of armed conflict.
If the global food crisis worsens, there’s going to be a lot of hangry people out there that governments and central bankers just can’t simply print food like they can print money.
- Trump's Touted Troop Pullout From Germany Is More Rift Than Gift
Trump’s Touted Troop Pullout From Germany Is More Rift Than Gift
Tyler Durden
Fri, 06/12/2020 – 02:00Authored by Finian Cunningham via The Strategic Culture Foundation,
President Donald Trump’s reported order to withdraw nearly 10,000 US troops from bases in Germany has engendered frissons of angst about the future of NATO, the transatlantic relationship, and European security. The most preposterous reaction came from American and European security officials who called the move a “gift to Putin”.
All the media excitement is sound and fury signifying little. Trump’s troop drawdown is not a gift to Russia. Rather, it is more an expression of rift and a temper tantrum by Trump, with little intended strategic consequence.
For a start, the news of withdrawing American forces from Germany – about a third of the current total of 35,000 – was not officially announced by the White House nor the Pentagon. It was first reported on June 5 by the Wall Street Journal attributed to administration sources. In other words, it has the hallmark of a leak with a political or personal agenda. That suggests the “news” came from President Trump and his clique, including the mischievous former US ambassador to Germany, Richard Grenell.
Incredibly, neither the Pentagon nor the German government were officially informed about what would be a momentous troop movement, given that US troops have been stationed in Germany since the end of World War Two. The country houses the largest US bases in Europe. It is therefore a cornerstone to the NATO alliance.
The lack of formal communication indicates that Trump’s purported order was more motivated by pique and caprice than signifying a strategic shift in US forces away from Europe, or, as the president has himself several times threatened to do before, to walk away from NATO. The latter notion touted by Trump in his obsession over squeezing European military budgets is nothing but bombast and bluff, given the structural importance of NATO to American power projection. Transactional money-obsessed Trump probably doesn’t even understand the strategic picture of how NATO and Germany are a vital European bridge for US imperialism.
Secondly, Trump’s record shows that he is all talk and no action when it comes to removing troops. He made a big fanfare about US soldiers coming home from Syria and Afghanistan, yet nearly a year on from those promises there have been no discernible drawdowns.
Even if there was a credible plan to take US troops out of Germany, that doesn’t mean American forces are reducing their footprint across Europe. Under Trump there has been a continued build-up of US forces in the Baltic states with greater emphasis on rotational presence of brigades. His envoys in Europe have also dangled the idea of relocating US forces from Germany to Poland. Given the Russophobic politics of Poland and the Baltic states, the ostensible troop drawdown from Germany would hardly be a “gift” to Russia.
So, what is going on?
Trump seems to be delivering a snub to German Chancellor Angela Merkel as well as to his own Pentagon chiefs.
Several reports indicate that Trump was enraged by Merkel’s decision to skip on a G7 summit to be hosted in Washington by the American president later this month. Her decision reported last week was said to be made in light of coronavirus concerns and also due to Merkel’s misgivings over Trump’s earlier order to pull US funding from the World Health Organization. A few days after Merkel’s reported reluctance to attend the G7 summit the WSJ then reported the news of Trump’s troop pullout plan from Germany. Adding to the sense of retaliation was the astounding fact that Berlin was not consulted or informed in advance. That suggests the aim was to belittle Berlin as much as possible.
The second front of Trump’s malice involves the Pentagon. As Associated Press reported this week the president’s relations with his military chiefs is near “breaking point”. The acrimony is due to the pushback by current and former Pentagon officials over Trump’s threats to deploy the military to curb mass protests against police violence and the killing of African-American man George Floyd in Minneapolis last month.
Defense Secretary Mark Esper and Chairman of the Joint Chiefs of Staff Mark Milley have both balked at the president’s call for combat troops to be sent on to the streets of the capital and other cities to quell the protests. Trump has reportedly engaged in “shouting matches” with his senior military officials over their refusal to commit troops in large numbers. The reluctance by the Pentagon is no doubt motivated by apprehensions that such a move could inflame an already volatile situation and provoke mass insurrection.
Knowing Trump’s notoriously thin skin and insatiable ego, the perceived rejection by Merkel over the proposed G7 summit, followed by the Pentagon brass giving a cold shoulder to his domestic executive power display, that had the combined effect of Trump’s hasty leak about taking US troops out of Germany. The move is therefore all about Trump trying to pull rank on America’s German vassal and poking the US generals in the eye.
It is doubtful that the knee-jerk move has any intended strategic significance. Certainly it is not a “gift” to Russia, as some Trump opponents have hyperventilated about.
Just look at the intensifying sanctions belligerence under Trump on Russia over the Nord Stream 2 natural gas project, and the ongoing US-led NATO build-up against Moscow. The latest kerfuffle about Trump purportedly taking troops out of Germany is merely reactionary wheels-within-wheels of a bigger and systematic hostile US posture towards Russia.
- Engineering A Race War: Will This Be The American Police State's Reichstag Fire?
Engineering A Race War: Will This Be The American Police State’s Reichstag Fire?
Tyler Durden
Fri, 06/12/2020 – 00:05Authored by John Whitehead via The Rutherford Institute,
“Those who do not remember the past are condemned to repeat it.”
– George Santayana
Watch and see: this debate over police brutality and accountability is about to get politicized into an election-year referendum on who should occupy the White House.
Don’t fall for it.
The Deep State, the powers-that-be, want us to turn this into a race war, but this is about so much more than systemic racism. This is the oldest con game in the books, the magician’s sleight of hand that keeps you focused on the shell game in front of you while your wallet is being picked clean by ruffians in your midst.
It’s the Reichstag Fire all over again.
It was February 1933, a month before national elections in Germany, and the Nazis weren’t expected to win. So they engineered a way to win: they began by infiltrating the police and granting police powers to their allies; then Hitler brought in stormtroopers to act as auxiliary police; by the time an arsonist (who claimed to be working for the Communists in the hopes of starting an armed revolt) set fire to the Reichstag, the German parliamentary building, the people were eager for a return to law and order.
That was all it took: Hitler used the attempted “coup” as an excuse to declare martial law and seize absolute power in Germany, establishing himself as a dictator with the support of the German people.
Fast forward to the present day, and what do we have? The nation in turmoil after months of pandemic fear-mongering and regional lockdowns, a national election looming, a president with falling poll numbers, and a police state that wants to stay in power at all costs.
Note the similarities?
It’s entirely possible that Americans have finally reached a tipping point over police brutality after decades of abuse. After all, until recently, the legislatures and the courts have marched in lockstep with the police state, repeatedly rebuffing efforts to hold police accountable for official misconduct.
Then again, it’s also equally possible that the architects of the police state have every intention of manipulating this outrage for their own purposes.
It works the same in every age.
As author Jim Keith explains, “Create violence through economic pressures, the media, mind control, agent provocateurs: thesis. Counter it with totalitarian measures, more mind control, police crackdowns, surveillance, drugging of the population: antithesis. What ensues is Orwell’s vision of 1984, a society of total control: synthesis.”
Here’s what is going to happen: the police state is going to stand down and allow these protests, riots and looting to devolve into a situation where enough of the voting populace is so desperate for a return to law and order that they will gladly relinquish some of their freedoms to achieve it. And that’s how the police state will win, no matter which candidate gets elected to the White House.
You know who will lose? Every last one of us.
Listen, people should be outraged over what happened to George Floyd, but let’s get one thing straight: Floyd didn’t die merely because he was black and the cop who killed him is white. Floyd died because America is being overrun with warrior cops—vigilantes with a badge—who are part of a government-run standing army that is waging war on the American people in the so-called name of law and order.
Not all cops are warrior cops, trained to act as judge, jury and executioner in their interactions with the populace. Unfortunately, the good cops—the ones who take seriously their oath of office to serve and protect their fellow citizens, uphold the Constitution, and maintain the peace—are increasingly being outnumbered by those who believe the lives—and rights—of police should be valued more than citizens.
These warrior cops may get paid by the citizenry, but they don’t work for us and they certainly aren’t operating within the limits of the U.S. Constitution.
This isn’t about racism in America.
This is about profit-driven militarism packaged in the guise of law and order, waged by greedy profiteers who have transformed the American homeland into a battlefield with militarized police, military weapons and tactics better suited to a war zone. This is systemic corruption predicated on the police state’s insatiable appetite for money, power and control.
This is a military coup waiting to happen.
Why do we have more than a million cops on the taxpayer-funded payroll in this country whose jobs do not entail protecting our safety, maintaining the peace in our communities, and upholding our liberties?
I’ll tell you why.
These warrior cops—fitted out in the trappings of war, drilled in the deadly art of combat, and trained to look upon “every individual they interact with as an armed threat and every situation as a deadly force encounter in the making—are the police state’s standing army.
This is the new face of war, and America has become the new battlefield.
Militarized police officers, the end product of the government—federal, local and state—and law enforcement agencies having merged, have become a “standing” or permanent army, composed of full-time professional soldiers who do not disband.
Yet these permanent armies are exactly what those who drafted the U.S. Constitution and Bill of Rights feared as tools used by despotic governments to wage war against its citizens.
American police forces were never supposed to be a branch of the military, nor were they meant to be private security forces for the reigning political faction. Instead, they were intended to be an aggregation of countless local police units, composed of citizens like you and me that exist for a sole purpose: to serve and protect the citizens of each and every American community.
As a result of the increasing militarization of the police in recent years, however, the police now not only look like the military—with their foreboding uniforms and phalanx of lethal weapons—but they function like them, as well.
Thus, no more do we have a civilian force of peace officers entrusted with serving and protecting the American people. Instead, today’s militarized law enforcement officials have shifted their allegiance from the citizenry to the state, acting preemptively to ward off any possible challenges to the government’s power, unrestrained by the boundaries of the Fourth Amendment.
They don’t work for us. As retired Philadelphia Police Captain Ray Lewis warned, “Corporate America is using police forces as their mercenaries.”
We were sold a bill of goods.
For years now, we’ve been told that cops need military weapons to wage the government’s wars on drugs, crime and terror. We’ve been told that cops need to be able to crash through doors, search vehicles, carry out roadside strip searches, shoot anyone they perceive to be a threat, and generally disregard the law whenever it suits them because they’re doing it to protect their fellow Americans from danger. We’ve been told that cops need extra legal protections because of the risks they take.
None of that is true.
In fact, a study by a political scientist at Princeton University concludes that militarizing police and SWAT teams “provide no detectable benefits in terms of officer safety or violent crime reduction.” According to researcher Jonathan Mummolo, if police in America are feeling less safe, it’s because the process of transforming them into extensions of the military makes them less safe, less popular and less trust-worthy.
The study, the first systematic analysis on the use and consequences of militarized force, reveals that “police militarization neither reduces rates of violent crime nor changes the number of officers assaulted or killed.”
In other words, warrior cops aren’t making us or themselves any safer.
Militarized police armed with weapons of war who are allowed to operate above the law and break the laws with impunity are definitely not making America any safer or freer.
The problem, as one reporter rightly concluded, is “not that life has gotten that much more dangerous, it’s that authorities have chosen to respond to even innocent situations as if they were in a warzone.” Consequently, Americans are now eight times more likely to die in a police confrontation than they are to be killed by a terrorist.
Militarism within the nation’s police forces is proving to be deadlier than any pandemic.
This battlefield mindset has gone hand in hand with the rise of militarized SWAT (“special weapons and tactics”) teams.
Frequently justified as vital tools necessary to combat terrorism and deal with rare but extremely dangerous criminal situations, such as those involving hostages, SWAT teams have become intrinsic parts of local law enforcement operations, thanks in large part to substantial federal assistance and the Pentagon’s military surplus recycling program, which allows the transfer of military equipment, weapons and training to local police for free or at sharp discounts while increasing the profits of its corporate allies.
Where this becomes a problem of life and death for Americans is when these SWAT teams— outfitted, armed and trained in military tactics—are assigned to carry out relatively routine police tasks, such as serving a search warrant. Nationwide, SWAT teams have been employed to address an astonishingly trivial array of criminal activity or mere community nuisances: angry dogs, domestic disputes, improper paperwork filed by an orchid farmer, and misdemeanor marijuana possession, to give a brief sampling.
Remember, SWAT teams originated as specialized units dedicated to defusing extremely sensitive, dangerous situations. They were never meant to be used for routine police work such as serving a warrant. Unfortunately, the mere presence of SWAT units has actually injected a level of danger and violence into police-citizen interactions that was not present as long as these interactions were handled by traditional civilian officers.
There are few communities without a SWAT team today, and there are more than 80,000 SWAT team raids per year.
Yet the tension inherent in most civilian-police encounter these days can’t be blamed exclusively on law enforcement’s growing reliance on SWAT teams and donated military equipment.
It goes far deeper, to a transformation in the way police view themselves and their line of duty.
Specifically, what we’re dealing with today is a skewed shoot-to-kill mindset in which police, trained to view themselves as warriors or soldiers in a war, whether against drugs, or terror, or crime, must “get” the bad guys—i.e., anyone who is a potential target—before the bad guys get them. The result is a spike in the number of incidents in which police shoot first, and ask questions later.
Making matters worse, when these officers, who have long since ceased to be peace officers, violate their oaths by bullying, beating, tasering, shooting and killing their employers—the taxpayers to whom they owe their allegiance—they are rarely given more than a slap on the hands before resuming their patrols.
This lawlessness on the part of law enforcement, an unmistakable characteristic of a police state, is made possible in large part by police unions which routinely oppose civilian review boards and resist the placement of names and badge numbers on officer uniforms; police agencies that abide by the Blue Code of Silence, the quiet understanding among police that they should not implicate their colleagues for their crimes and misconduct; prosecutors who treat police offenses with greater leniency than civilian offenses; courts that sanction police wrongdoing in the name of security; and legislatures that enhance the power, reach and arsenal of the police, and a citizenry that fails to hold its government accountable to the rule of law.
Indeed, not only are cops protected from most charges of wrongdoing—whether it’s shooting unarmed citizens (including children and old people), raping and abusing young women, falsifying police reports, trafficking drugs, or soliciting sex with minors—but even on the rare occasions when they are fired for misconduct, it’s only a matter of time before they get re-hired again.
Much of the “credit” for shielding these rogue cops goes to influential police unions and laws providing for qualified immunity, police contracts that “provide a shield of protection to officers accused of misdeeds and erect barriers to residents complaining of abuse,” state and federal laws that allow police to walk away without paying a dime for their wrongdoing, and rampant cronyism among government bureaucrats.
It’s happening all across the country.
This is how perverse justice in America has become.
Incredibly, while our own Bill of Rights are torn to shreds, leaving us with few protections against government abuses, a growing number of states are adopting Law Enforcement Officers’ Bill of Rights (LEOBoR), which provide cops accused of a crime with special due process rights and privileges not afforded to the average citizen.
This, right here, epitomizes everything that is wrong with America today.
Even when the system appears to work on the side of justice, it’s the American taxpayer who ends up paying the price.
Literally.
Because police officers are more likely to be struck by lightning than be held financially accountable for their actions. As Human Rights Watch explains, taxpayers actually pay three times for officers who repeatedly commit abuses: “once to cover their salaries while they commit abuses; next to pay settlements or civil jury awards against officers; and a third time through payments into police ‘defense’ funds provided by the cities.”
Deep-seated corruption of this kind doesn’t just go away because politicians and corporations suddenly become conscience-stricken in the face of mass protests and start making promises they don’t intend to keep.
As I explain in my book Battlefield America: The War on the American People, we need civic engagement and citizen activism, especially at the local level. However, if it ends at the ballot box without achieving any real reform that holds government officials at all levels accountable to playing by the rules of the Constitution, then shame on us.
- "Not On My Island": More Allies Reject Hosting US Missiles In Pacific Aimed At China
“Not On My Island”: More Allies Reject Hosting US Missiles In Pacific Aimed At China
Tyler Durden
Thu, 06/11/2020 – 23:45Washington pulled out of the Intermediate-Range Nuclear Forces Treaty (INF) and is promptly attempting to station missiles in the Pacific, urging regional as well as old WWII allies to allow placement there, but so far it appears they aren’t having it.
“The governor of a Japanese territory where the Pentagon is thinking about basing missiles capable of threatening China has a message for the United States: Not on my island,” LA Times writes.
Denny Tamaki, the governor of Okinawa, spelled out to the Times, “I firmly oppose the idea” — and we suspect pretty much the entirety of the local Japanese population on the island does too, considering American missiles would automatically make them a target.
Recent Air Force tests of a medium-range ballistic missile at Vandenberg Air Force Base – the kind that the INF previously banned. Image source: AFP. Since Trump pulled the US out of the 33-year old arms treaty last year, the Pentagon has touted plans to place hundreds of non-nuclear warheads in Asia.
Despite Trump saying he really just wants to negotiate ‘a better deal’ — given the late Cold War era INF agreement only dealt with US and the successor states of the Soviet Union, also failing to account for new technologies possessed by other powerful rivals like China, Moscow has charged that the US really just wants to proliferate its missile ‘defenses’ unconstrained.
Some critics are saying that ditching the INF had nothing to do with alleged Russian ‘violations’ as was official the rationale cited by the administration, but instead, as Russia-based American geopolitical analyst Mark Sleboda explains, “the US didn’t unilaterally pull out of the INF because of any alleged ‘Russian violations’ – it did so to encircle China with a cordon of land-based ballistic missiles to close a “missile gap” for a naval conflict off China’s coast.”
And now, it appears this is playing out precisely: “The missile plan is the centerpiece of a planned buildup of U.S. military power in Asia projected to consume tens of billions of dollars in the defense budget over the next decade, a major shift in Pentagon spending priorities away from the Middle East,” LA Times continues.
Meanwhile, US allies like Australia and the Philippines have already issued a stern “no” concerning the prospect of placing US missiles on their territory, while South Korea is also considered too provocative a location concerning tensions with Pyongyang.
- Flynn Case: 85 Lies, Contradictions, Oddities, & Unusual Occurrences
Flynn Case: 85 Lies, Contradictions, Oddities, & Unusual Occurrences
Tyler Durden
Thu, 06/11/2020 – 23:25Authored by Petr Svab via The Epoch Times,
The case of Lt. Gen. Michael Flynn is inevitably heading toward its conclusion. While the presiding district judge, Emmet Sullivan, is trying to keep it going, there’s only so much he can do, chiefly because there’s nobody left to prosecute the case after the Department of Justice (DOJ) dropped it last month.
In the latest developments, the District of Columbia appeals court set a hearing in the case for tomorrow (June 12), while the DOJ’s solicitor general himself, as well as five of his deputies, urged the court to order the lower-court judge to accept the case dismissal.
“I cannot overstate how big of a deal this is,” commented appellate attorney John Reeves, former assistant Missouri attorney general, in a series of tweets on June 1.
Personal involvement of the solicitor general “is highly unusual and rare,” he said.
“Unusual” seems a fitting euphemism for the Flynn case, which has been filled with contradictions, falsehoods, apparent blunders, extraordinary moves, and strange coincidences.
The Epoch Times has so far counted 85 such instances.
Flynn, former head of the Defense Intelligence Agency during the Obama administration and former national security adviser to President Donald Trump, pleaded guilty on Dec. 1, 2017, to one count of lying to FBI agents during a Jan. 24, 2017, interview.
The FBI officially opened an investigation on Flynn on Aug. 16, 2016, based on a suspicion that he “may wittingly or unwittingly be involved in activity on behalf of the Russian Federation which may constitute a federal crime or threat to the national security.”
What activity? The case was opened under a broader investigation into whether the Trump 2016 presidential campaign conspired with Russia to steal emails from the Democratic National Committee and release them through Wikileaks.
Flynn was an adviser to the campaign at the time.
By its own admission, the FBI had little reason to suspect the campaign.
The bureau learned from the Australian government that its then-ambassador to the UK, Alexander Downer, spoke with Trump campaign aide George Papadopoulos, who “suggested” that the campaign received “some kind of suggestion” that Russia could help it by anonymously releasing some information damaging to Trump’s opponent, former Secretary of State Hillary Clinton.
The FBI didn’t know what Papadopoulos actually said or what he was talking about.
Officially, this information was used by the FBI to comb through its databases for information on people associated with the Trump campaign and open investigations on four individuals supposedly linked to Russia.
Because Flynn’s paid speaking engagements in years past included some for Russian companies—one for Kaspersky Lab and one for RT television in Moscow—the FBI decided to open a counterintelligence investigation on the retired three-star general.
But the FBI seemed to have trouble getting its story straight.
1. Comey Contradiction
The FBI officially opened the four individual cases in mid-August 2016.
But former FBI Director James Comey testified to Congress that he was briefed already “at the end of July that the FBI had opened counterintelligence investigations of four individuals to see if there was a connection between any of those four and the Russian effort.”
2. Unlikely Target
Suspecting a man with patriotic bona fides of Flynn’s caliber of having colluded with Russia based on two speaking engagements seemed particularly unusual.
Flynn’s command of military intelligence to aid American troops in combat has earned him great praise.
“Mike Flynn’s impact on the nation’s War on Terror probably trumps any other single person,” wrote then-Brig. Gen. John Mulholland in Flynn’s 2007 performance review.
Mulholland went as far as calling Flynn “easily the best intelligence professional of any service serving today.”
Flynn was driven out of his post in 2014 after he repeatedly embarrassed President Barack Obama by insisting, contrary to the administration’s official stance, that a resurgence of Islamic terrorism in the Middle East was imminent.
Two months after his resignation, the rise of ISIS proved him right.
3. A Name for the Spotlight
The Russia probe was titled “Crossfire Hurricane” (CH), and Flynn was given the code name “Crossfire Razor.”
This was unusual, according to Marc Ruskin, a 27-year veteran of the FBI and an Epoch Times contributor.
Rank-and-file agents would never pick a name like this, he told The Epoch Times in a previous interview.
“They would mock it as being overly dramatic,” he said.
4. Snooping During Briefing
The day after opening the Flynn case, the FBI participated in a strategic intelligence briefing given to Donald Trump and two of his advisers by the Office of the Director of National Intelligence.
Because Flynn was to be present, the FBI took the extraordinary step of sending in supervisory special agent Joe Pientka to collect intel on Flynn for the investigation. Pientka was to assess Flynn’s “overall mannerisms” and listen for “any kind of admission” that could be used by the bureau, the DOJ’s inspector general (IG) said in a Dec. 9 report on the CH investigation (pdf).
The IG raised the question of whether snooping on officials the FBI is supposed to brief could have a “chilling effect” on any such intelligence briefings in the future.
5. Dossier Coincidence
The FBI directly targeted four Trump campaign aides, opening cases on three of them—Papadopoulos, Carter Page, and Paul Manafort—on Aug. 10, 2016. The IG never received an explanation for why the Flynn case was opened later. Incidentally, Page and Manafort had already been mentioned in the infamous Steele dossier since July 28, 2016. Flynn’s name, however, was only mentioned in the dossier report dated Aug. 10, 2016.
The dossier, which drummed up unsubstantiated allegations of a Trump–Russia conspiracy, was being spread to the media, the FBI, the State Department, the DOJ, and Congress by operatives funded by the Clinton campaign and the Democratic National Committee.
The CH investigation team members at the FBI told the IG they only received the dossier in September 2016, but there are indications they may have been aware of it earlier.
6. Halper Coincidence
One of the CH case agents, Stephen Somma, happened to have a longstanding relationship with Stephan Halper, a Cambridge professor who was also a longtime political operative and FBI informant.
Somma and another agent met with Halper on Aug. 11, 2016, and learned that, in a stunning coincidence, Halper was already in contact with Page, had known Manafort for years, and “had been previously acquainted with Michael Flynn,” the IG report said
The CH team “couldn’t believe [their] luck,” Somma told the IG.
7. Halper’s Story
Halper was accused of spreading rumors, starting in late 2016, that Flynn had an affair with a Russian woman while visiting the UK in 2014 for a dinner hosted by the Cambridge Intelligence Seminar co-convened at the time by Halper.
An “established” FBI informant told the CH team that the woman jumped in a cab with Flynn after the dinner and joined him for a train ride to London (pdf).
The woman in question was Svetlana Lokhova, a Cambridge historian of Russian descent. She has denied the rumor, saying that she was picked up after the dinner by her husband.
She said Halper was the one spreading the rumor to the media and the FBI, even though he didn’t actually attend the event. She unsuccessfully sued Halper for defamation in May 2019.
Somehow, Steele also became privy to the rumor and shared it with Adam Kramer, an aide to the late Sen. John McCain (R-Ariz.). Kramer testified to Congress that he was in regular contact with Steele between Nov. 28, 2016, and early March 2017.
8. Unmasking
The names of Americans are normally masked—that is, replaced with generic names—in foreign intelligence reports. Many senior government officials have the authority to ask for names to be unmasked for various reasons, such as to understand the intelligence. There were dozens of unmasking requests for reports related to Flynn, between Nov. 8, 2016, and Jan. 31, 2017 (pdf). The number of unmasking requests has been described as alarming by some commentators, while others described it as routine.
9. Non-masking
There are also indications that Flynn’s name was never masked in summaries or transcripts of his calls with then-Russian Ambassador to the United States Sergey Kislyak on Dec. 29, 2016, and in the following days. FBI leaders were distributing the documents to top Obama officials. Even President Barack Obama himself was briefed on them on or before Jan. 5, 2017.
10. Who Briefed Obama?
Comey testified to Congress that it was then-Director of National Intelligence James Clapper who briefed Obama on the Flynn–Kislyak calls (pdf). Clapper, however, denied this to Congress.
11. ‘Unusual’
Obama’s national security adviser, Susan Rice, memorialized a Jan. 5, 2017, meeting with Obama, Comey, and then-Deputy Attorney General Sally Yates. Rice wrote in an email to herself that Obama asked Comey whether he should withhold any Russia-related information from the incoming administration and from Flynn in particular.
“Potentially,” Comey replied, adding that “the level of communication” between Flynn and Kislyak was “unusual,” she wrote. There’s no indication Flynn was talking to Kislyak unusually often. He was at the time responsible for laying the groundwork for Trump’s foreign relations as president and was frequently on the phone with foreign dignitaries.
12. Late Memo
Rice’s memo itself is unusual. She emailed it to herself more than two weeks after the meeting took place, on the day of Trump’s inauguration.
13. Strzok Intervention
On Jan. 4, the FBI was already in the process of closing Flynn’s case. But the bureau’s counterintelligence operations head at the time, Peter Strzok, scrambled to keep it open, noting that the “7th floor,” meaning the FBI’s top leadership, was involved.
14. McCabe–Comey Contradiction
Comey testified that he authorized the Flynn case “to be closed at the … end of December, beginning of January.”
But his then-deputy, Andrew McCabe, told Congress that they weren’t in “the closing planning phase” at the time.
“I don’t think a closure would have been soon,” he said.
15. Shaky Theory
FBI documents and Comey’s testimony indicate that the bureau kept the Flynn case open solely based on a legal theory that he may have violated the Logan Act, even though the DOJ made clear that such charges wouldn’t pass muster in court—nobody has ever been successfully prosecuted for a Logan Act violation and the government last tried in 1852.
The law prohibits private citizens from engaging in diplomacy on their own with countries the United States is in dispute with. Not only have questions been raised as to whether the law would pass today’s constitutional scrutiny, which places greater emphasis on First Amendment protections, but also there’s no indication the law was conceived to apply to a president-elect’s incoming top adviser.
16. Call Leaks
In early January, information about Flynn’s calls with Kislyak was leaked to then-Washington Post reporter Adam Entous. He said there was a discussion at the paper about what to do with the information, as it would have been expected of Flynn, given his position, to talk to Kislyak (pdf). In the end, the paper ran a column on Jan. 12 by David Ignatius speculating that Flynn may have violated the Logan Act if he discussed fresh sanctions imposed on Russia during the calls.
Obama imposed the sanctions on Russian entities, including its intelligence services, on Dec. 29, 2016. At the same time, he also expelled 35 Russian intelligence officers.
17. Denial
The calls “had nothing whatsoever to do with the sanctions,” incoming Vice President Mike Pence told CBS News on Jan. 15, 2017, in an interview the network almost wholly dedicated to questions about Russia.
This wasn’t completely true.
Kislyak did bring up the issue of sanctions during the call, though Flynn didn’t engage him in a conversation on the topic.
Flynn raised the issue of the expulsions, which is technically a separate issue from sanctions, though both were announced at the same time. He asked for “cool heads to prevail” and for Russia to only respond reciprocally, as further escalation into a “tit for tat” could lead to the countries shutting down each other’s embassies, complicating future diplomacy.
18. ‘Blackmailable’
Yates said she wanted to inform Trump’s White House about the Kislyak calls as Russia would know that what Pence said wasn’t true and could thus blackmail Flynn with the information, according to an Aug. 15, 2017, FBI report from her interview with the Mueller team.
According to Ruskin, this was hardly a blackmail situation, which ordinarily involves serious compromising information, such as evidence of bribery or sexual misconduct.
Comey acknowledged to Congress in March 2017 that the idea that Flynn was compromised struck him “as a bit of a reach.”
19. Comey Blocked Information
Despite issues with Yates’s argument, informing the White House may have indeed cleared up the situation. However, Comey blocked it, saying it could have interfered with the investigation of Flynn—despite that it appears there was nothing for the bureau to investigate. At that point, the DOJ already had disapproved of the Logan Act idea. In any case, the probe was supposed to be about Russian collusion. The bureau could have closed it and opened a new one on the Logan Act, if it indeed had had sufficient predication. But it never opened such an investigation, the DOJ noted in its motion to dismiss Flynn’s case.
20. Another Comey–McCabe Contradiction
In the days before Jan. 24, 2017, top FBI officials were discussing plans to interview Flynn. Comey said the point of the interview was to find out why Flynn didn’t tell Pence that sanctions were discussed during the call (even though Flynn wasn’t actually the one talking about sanctions).
“My judgment was we could not close the investigation of Mr. Flynn without asking him what is the deal here. That was the purpose,” Comey testified.
McCabe, however, told a different story when then-Rep. Trey Gowdy (R-S.C.) asked him, “Was [Flynn] interviewed because the Vice President relied upon information from him in a national interview?”
“No. I don’t remember that being a motivating factor behind the interview,” McCabe said.
21. No Mention of Pence
During the interview, the agents didn’t ask Flynn about what he did or didn’t tell Pence—an unusual approach if the point, as Comey said, was to find out why Flynn hadn’t “been candid” with Pence. The FBI, in fact, had no idea what Flynn did or didn’t tell Pence.
22. Slipped-In Warning
Agents regularly warn interviewees that lying to federal officers is a crime. Before the Flynn interview, however, McCabe’s special counsel Lisa Page emailed another FBI lawyer asking how the warning should be given and whether there was a way “to just casually slip that in.”
23. No Warning
In the end, the agents never gave Flynn any such warning.
24. ‘Get Him to Lie … Get Him Fired?’
The FBI officials agreed that the agents wouldn’t show Flynn the transcripts of the calls. If he said something that diverged from them, they would ask again, slipping in some words from the transcript. If that didn’t jog his memory, they were not to confront him about it.
On the day of the interview, then-FBI head of counterintelligence Bill Priestap wrote a note saying he told other officials to “rethink” the approach.
“What’s our goal? Truth/Admission or to get him to lie, so we can prosecute him or get him fired?” he wrote, noting, “We regularly show subjects evidence.”
Apparently, his concerns were ignored.
25. Discouraging Having a Lawyer Present
On the day of the interview, McCabe spoke with Flynn on the phone to ask him for the interview. McCabe said he told Flynn he wanted the interview done “as quickly, quietly, and discreetly as possible.” If Flynn wanted anybody to sit in, such as one of the White House lawyers, the DOJ would have to be involved, McCabe told him.
According to Ruskin, that was “egregious” behavior akin to discouraging a subject of an investigation from having a lawyer present for an interview.
26. No White House Notice
An FBI interview of a president’s national security adviser is a big deal. Normally, it would warrant a back-and-forth between the White House and the bureau on the scope, content, purpose, and other parameters. Most likely, multiple White House lawyers would sit in.
Comey, however, said in a public forum that he just sent the agents in, taking advantage of the fact that it was “early enough”—only four days after the inauguration.
27. No Notice Given to DOJ
According to Yates, Comey didn’t consult the DOJ about his intention to interview Flynn, even though the department would usually be involved in such decisions.
28. Not Quite a Denial From Flynn
After the interview, in which Strzok and supervisory special agent Pientka extensively questioned Flynn about his conversations with Kislyak, Comey said that Flynn denied talking to the ambassador about the sanctions. But the agents’ notes indicate that though Flynn denied it at first, he seemed unsure when the agents asked again.
“Not really. I don’t remember. It wasn’t, ‘Don’t do anything,’” he said, according to the notes.
Flynn said in a Jan. 29 declaration to the court that he still doesn’t remember talking to Kislyak about sanctions.
“I told the agents that ‘tit-for-tat’ is a phrase I use, which suggests that the topic of sanctions could have been raised,” he said.
29. UN Vote Denial
Based on the agent’s notes, Flynn did deny asking for Russia to delay a U.N. vote in Israeli settlements. One of the call transcripts indicates he in fact made such a request.
Flynn told the agents he was calling multiple countries regarding the vote, but it was more an exercise of how quickly he could get foreign officials on the phone since there was no way the transition team could convince enough countries to actually change the outcome. Indeed, the vote passed with only the United States abstaining.
30. No Indication of Deception
The agents came back with the impression “that Flynn was not lying or did not think he was lying,” according to Strzok.
Comey seemed on the fence.
“I don’t know. I think there is an argument to be made that he lied. It is a close one,” he testified.
31. Flynn Knew They Knew
According to McCabe, Flynn expressed awareness before the interview that the FBI knew exactly what he said during the Kislyak calls.
“You listen to everything they [Russian representatives] say,” Flynn told him, according to McCabe’s notes from that day.
32. Belated Report
The FBI interview summary, form FD-302, is required to be completed within five days of the interview. Flynn’s, however, took more than two weeks.
33. Rewritten 302
Strzok texted Page on Feb. 10, 2017, he was “trying to not completely rewrite” the 302 “so as to save [redacted] voice.” The redacted name was most likely Pientka’s.
34. Missing Original
Flynn was ultimately provided two draft versions of the 302—one from Feb. 10, 2016, and one from the day after. But based on Strzok’s texts, there should have been at least two draft versions produced on Feb. 10, 2016, or before.
In fact, Judge Sullivan said in a Dec. 17, 2018, minute order that the 302 “was drafted immediately after Mr. Flynn’s FBI interview.” It’s not clear what the judge was basing this assertion on or what happened to the early draft.
Flynn’s current attorney, former federal prosecutor Sidney Powell, later said she’d found a witness who saw an earlier draft and that it said “that Flynn was honest with the agents and did not lie.”
35. No Reinterview
It is common that when the FBI has questions after an interview about the candor of the subject, it would question the person again. But in this case, the FBI showed no interest in doing so.
36. Still Investigating What?
After the interview, Comey promptly agreed to Yates informing the White House about the call transcripts. Flynn was fired two weeks later. But, somehow, the investigation was still not over.
Comey said in his March 2, 2017, testimony that the bureau wasn’t investigating any possible Logan Act violation by Flynn and wouldn’t do so unless the DOJ directed it.
But he said the investigation was “obviously” still ongoing and “criminal in nature.”
McCabe said that “even following the interview on the 24th, we had a lot of work left to do in that investigation.”
By mid-February, the status of the probe wouldn’t have “changed materially” in his belief, he said.
“Like we were pursuing phone records and toll records at that time,” he said. “There were all kinds of really very basic foundational investigative activity that had to take place and we were committed to getting that done.”
It’s unclear what the point of the investigation was.
37. FARA Papers
Around Christmas 2016, Flynn found in the office of his defunct consultancy, Flynn Intel Group (FIG), a letter from the DOJ telling him he may need to file foreign lobbying disclosures under the Foreign Agents Registration Act (FARA).
The DOJ’s National Security Division (NSD) wanted to know about a job FIG did earlier that year for Turkish businessman Kamil Ekim Alptekin.
It should have been a routine procedure. Washington lobbyists commonly flunk FARA rules and the NSD usually just asks them to register retrospectively because FARA cases are difficult to prosecute. Flynn hired a team from Covington and Burling led by Robert Kelner, a “never-Trumper” and an expert on FARA, to prepare the paperwork.
This time, the NSD was unusually eager. Heather Hunt, then-FARA unit chief herself, was repeatedly prompting the lawyers to expeditiously file the papers.
“We’ve never seen her this engaged in any matter (ever),” Kelner noted in an email to his colleagues.
Even the DOJ’s then-counterintelligence chief, David Laufman, got involved and personally questioned Covington on the FARA filings.
38. Comey Memo
Comey wrote in a personal memo that Trump told him in private in February 2017 that he hoped Comey could “let Flynn go.” Trump denied saying that. Trump’s lawyers have argued that the president didn’t know at the time that Flynn was still under investigation.
Comey’s leaking the content of this and other memos to the media served as a catalyst for then-Deputy Attorney General Rod Rosenstein appointing former FBI head Robert Mueller as a special counsel to take over the CH probe.
39. Rosenstein’s Scope Memo Still Alludes to Logan Act
Even though Comey said in March 2017 that the FBI wasn’t investigating Flynn for a Logan Act violation, Mueller received in August 2017 a mandate from Rosenstein (pdf) to probe whether Flynn “committed a crime or crimes by engaging in conversations with Russian government officials during the period of the Trump transition.” That appears to be an allusion to the Logan Act.
Rosenstein testified to Congress that he simply put in the scope of Mueller’s mandate whatever the CH team was investigating at the time.
The scope memo also tasked Mueller with probing whether Flynn lied to the FBI during the interview, whether he failed to report foreign contacts or income on his national security disclosure forms, and whether the Turkey job by his firm meant that he “committed a crime or crimes by acting as an unregistered agent for the government of Turkey.”
40. Lawyers Delay Informing Flynn?
By mid-August 2017, Covington learned that prosecutors were looking at Flynn’s FARA filings. But the lawyers didn’t inform Flynn until weeks later, according to his current lawyer, Powell.
41. Conflict of Interest
Convington faced a conflict of interest in Flynn’s case, because it was in their interest to say any problems with the FARA papers were Flynn’s fault, while it was in Flynn’s interest to say the lawyers were responsible.
Covington and the Mueller team agreed the firm can continue to represent Flynn if they tell him about the conflict and he consents to it. Powell said the conflict was so serious bar rules required the lawyers to withdraw.
42. Lawyers Don’t Take Responsibility
In Flynn’s situation, it would have been the ethical thing to do for the lawyers to take responsibility for any problems with the FARA papers, according to Powell. But they didn’t do that.
43. Lawyers Express Apprehension About Being Targeted Themselves
The Covington lawyers on several occasions expressed concern that Mueller may target them with a crime-fraud order, a measure that allows prosecutors to break through the attorney-client privilege if they get a judge to agree that the client was conferring with lawyers to further a crime or some misconduct. The lawyers were aware Mueller’s team had already used the order against Manafort.
Facing a crime-fraud order would cause bad publicity for Covington, Powell noted. Leading Flynn into the plea allowed the firm to avoid it.
44. Perilous Interviews
In early November 2016, Mueller prosecutors, led by Brandon Van Grack, told Covington that Flynn was facing charges for lying to the FBI and lying on the FARA papers. They asked for Flynn’s cooperation with the broader Russia probe, particularly regarding any communications he or other Trump people had with foreign officials.
Van Grack wanted Flynn to sit down for a series of interviews. He offered Flynn limited immunity, but acknowledged that Flynn could still be charged for lying during the interviews.
The lawyers noted that this could have been dangerous for Flynn, even if he was completely honest.
“To ask someone about meetings and calls during an incredibly busy period of his life as an evaluation of candor is not a particularly attractive option,” Kelner told the prosecutors during a conference call (pdf).
Yet ultimately the Covington lawyers agreed to make Flynn available for the questioning.
45. Belated Consent
Covington only asked Flynn for consent with their conflict of interest in writing on Nov. 19, 2017, after Flynn had already been through two days of interviews with the prosecutors.
46. Wrong Standard
The consent request, sent via email, cited the wrong bar rule for handling of conflicts. The correct rule “creates a much lower threshold at which a lawyer must bow out,” Powell said in a court filing.
47. Innocent but Guilty
The Covington lawyers repeatedly told the prosecutors that they didn’t think Flynn was guilty of a felony. They were also told that Strzok and Pientka “saw no indication of deception” on Flynn’s part and had the impression after the interview that he wasn’t lying or didn’t think he was lying. But the lawyers still convinced Flynn that he should plead guilty to the felony charge.
48. Threat to Son
According to Flynn’s declaration, the Covington lawyers told him that if he didn’t plead, the prosecutors would charge his son (who had a four-month-old baby at the time) with a FARA violation, because the son worked for Flynn’s firm and was involved in the Turkey project. If he did plead, however, his son “would be left in peace,” Flynn said.
The pressure campaign, it seems, was also reflected in media leaks.
“If the elder Flynn is willing to cooperate with investigators in order to help his son … it could also change his own fate, potentially limiting any legal consequences,” NBC News reported on Nov. 5, 2017, referring to “sources familiar with the investigation.”
“To twist the father’s arm with regard to his child is a pretty low thing to do,” Ruskin commented.
49. 302 Not Shared
The prosecutors refused to share with Flynn the 302 from his January interview until shortly before he agreed to plead. Also, they only shared the final version of the report, which was significantly different from its previous drafts, Flynn later learned.
50. Strzok Texts Understatement
Shortly before Flynn signed his plea, the prosecutors disclosed to his lawyers that one of the agents who interviewed Flynn (Strzok) was being investigated by the IG for potential misconduct. They also disclosed that the agent expressed in electronic communications “a preference for one of the candidates for President.”
This was far from covering the bombshell the Strzok texts actually were, Powell noted.
Strzok not only voiced preference for Clinton, but cursed at and repeatedly derided Trump. In one 2016 text, he argued that the FBI needed to take action akin to an “insurance policy” in case Trump won. Strzok later said he was referring to proceeding in the CH probe more aggressively out of a worry that Trump may interfere with it if elected.
51. Lawyers Never Told Flynn?
Flynn said the Convington lawyers never told him that the FBI agents didn’t think he lied. Even after he specifically asked about the agents’ impression, the lawyers didn’t disclose the information and instead told him that “the agents stood by their statement.”
“I then understood them to be telling me that the FBI agents believed that I had lied,” Flynn said, explaining that had he known, he wouldn’t have signed the plea.
52. Statement of Offense Inaccurate
As part of his statement of offense, Flynn affirmed that FIG’s FARA papers contained three false statements and one omission. Yet, on all four points the statement of offense was inaccurate, Powell demonstrated (pdf).
“The prosecutors concocted the alleged ‘false statements’ by their own misrepresentations, deceit, and omissions,” she said in a court filing (pdf).
The FARA papers were “substantially correct” and any deficiencies were the fault of Covington, she said.
53. Lawyers Knew
In an internal email three days before Flynn signed his plea, one of the Covington lawyers pointed out that some of the “false statements” attributed to Flynn in the statement of offense regarding the FARA filings were “contradicted by the caveats or qualifications in the filing.”
It seems the lawyers failed to correct the issue, since the statement of offense remained inaccurate. They also never informed Flynn of the issue, according to Powell.
54. Judge Recusal
Flynn entered his plea on Dec. 1, 2017. Shortly after, the judge who accepted the plea, Rudolph Contreras, recused himself from the case. The apparent but undisclosed reason was likely his personal relationship with Strzok.
55. Strzok Texts Media Coincidence
While the IG had found Strzok’s texts already in June 2017, their first disclosure in the media came from The Washington Post the day after Flynn entered his guilty plea. Powell noted how convenient the timing was for the prosecutors.
56. Side Deal
The prosecutors conveyed to Covington an “unofficial understanding” that they were “unlikely” to charge Flynn’s son in light of Flynn’s agreement to continue to cooperate with the Mueller probe, one of the lawyers said in an internal email.
Such an under-the-table deal is “unethical,” Ruskin said.
57. Avoiding Giglio Disclosure
Another internal Covington email suggests the prosecutors intentionally kept the deal regarding Flynn’s son unofficial to make future prosecutions easier.
“The government took pains not to give a promise to MTF [Michael T. Flynn] regarding Michael [Flynn] Jr., so as to limit how much of a ‘benefit’ it would have to disclose as part of its Giglio disclosures to any defendant against whom MTF may one day testify,” the email reads.
“Giglio” refers to a 1972 Supreme Court opinion that requires prosecutors to disclose to the defense that a witness used by the prosecutors has been promised an escape from prosecution in exchange for cooperation.
58. Questionable Disclosures
After the case was assigned to Judge Sullivan, he entered an order for the DOJ to give Flynn all exculpatory information it had, as the judge does in all cases.
The prosecutors, however, weren’t prompt in revealing the information. The Strzok texts, for instance, were only provided to Flynn after they were released publicly.
59. Business Partner Coincidence
One day before Flynn’s sentencing hearing, his former business partner, Bijan Rafiekian, was charged with a failure to register as a foreign agent in relation to FIG’s Turkey job.
Powell called it a “shot across the bow” which the Mueller team wanted to “leverage” against Flynn.
“Mr. Van Grack used the possibility of indicting Flynn in the Rafiekian case at the sentencing hearing to raise the specter of all the threats he had made to secure the plea a year earlier—including the indictment of Mr. Flynn’s son,” she said in a court filing (pdf).
60. Judge Makes False Accusations, Backtracks
During a Dec. 18, 2018, sentencing hearing, Sullivan questioned the prosecutors about whether they considered charging Flynn with treason.
“Arguably, you sold your country out,” he told Flynn, saying that he acted as an agent of Turkey while in the White House.
That was wrong on multiple levels. Not only does treason not apply to unregistered lobbying, but the Turkey job had virtually no impact on American interests. It prepared a plan to lobby for the extradition of an Islamic cleric, Fethullah Gülen, who lives in exile in the United States, and whom Ankara blamed for instigating a coup attempt in 2016. Almost none of the plan materialized. Most importantly, Flynn shuttered his firm shortly after the election to comply with Trump’s promise of no lobbyists in his administration.
Sullivan corrected himself later in the hearing, but many media outlets still put his original remarks in headlines.
61. MSNBC Coincidence
While Sullivan’s question about treason and his gaffe about the Turkey job seemed to come out of left field, they mirrored MSNBC talking points from days prior.
The day before Flynn’s sentencing hearing, MSNBC’s Rachel Maddow claimed Flynn and Rafiekian “disguised” the origins of payments for the Turkey job so they could “secretly work in the interest of a foreign country without anybody knowing it while they were also working high-level jobs in intelligence inside the U.S. government.”
“Flynn really thought he could be a national security adviser, the national security adviser in the White House, and a secret foreign agent at the same time,” Maddow said.
Three days before Flynn’s sentencing hearing, Malcolm Nance, a counterterrorism commentator, said on MSNBC that Flynn “may have been one step away from treason” and “pulled back by cooperating” with Mueller.
62. Judge Fails to Satisfy Plea Rules
Federal Rules of Criminal Procedure state in Rule 11 that “before entering judgment on a guilty plea, the court must determine that there is a factual basis for the plea.”
As such, Sullivan was required to check that Flynn’s alleged lies to the FBI were “material,” meaning relevant enough to potentially affect an FBI investigation.
But the judge acknowledged during the sentencing hearing that he hadn’t done so.
“It probably won’t surprise you that I had many, many, many more questions. … such as, you know, how the government’s investigation was impeded? What was the material impact of the criminality? Things like that,” he said at the conclusion of the hearing.
There’s no indication Sullivan has asked those questions since.
63. Unacceptable Plea
Not only could Sullivan not have accepted Flynn’s plea before determining materiality, there’s evidence he was in fact required to refuse it.
Rule 11 requires the court to “determine that the plea is voluntary and did not result from force, threats, or promises (other than promises in a plea agreement).”
In Flynn’s case, there actually was a threat and a promise left out of the deal—the “unofficial understanding” that his son was “unlikely” to be charged if Flynn cooperated.
64. Lawyers Insisted Flynn ‘Stay on the Path’
Before the sentencing hearing, the Covington lawyers told Flynn to “stay on the path” and to refuse if Sullivan offered him to take his plea back, Flynn said in his court declaration.
“If the judge offers you a chance to withdraw your plea, he is giving you the rope to hang yourself. Don’t do it,” the lawyers said, according to Powell.
65. Unprepared
Flynn said the lawyers only prepared him for a “simple hearing” and not for the extended questioning Sullivan engaged in.
“I was not prepared for this court’s plea colloquy, much less to decide, on the spot, whether I should withdraw my plea, consult with independent counsel, or continue to follow my existing lawyers’ advice,” he said.
In the end, he affirmed his plea during the hearing.
66. Prosecutors Asked for False Testimony?
Flynn was expected to testify against Rafiekian in 2019, but when the moment was to come, prosecutors asked him to say that he signed FIG’s FARA papers knowing there were lies in them. Flynn, who had already fired Convington and hired Powell by that point, refused. He said he only acknowledged in hindsight that the FARA papers were inaccurate, but didn’t know it at the time.
67. Prosecutors Knew?
Powell has argued that the prosecutors knew they were asking for a false testimony. She filed with the court a draft of Flynn’s statement of offense, which shows that the words “FLYNN then and there knew” (pertaining to the FARA registration) were cut from the final version.
Moreover, Powell submitted emails that indicate the words were cut by the prosecutors themselves after the Covington lawyers raised some objections to the draft.
68. Retaliation?
Flynn’s refusal to say what prosecutors wanted angered Van Grack, contemporaneous notes show (pdf). Shortly after, prosecutors tried to label Flynn as a co-conspirator in the Rafiekian case and put Flynn’s son on the list of witnesses for the prosecution. According to Powell, this was retaliation for Flynn’s refusal to lie.
69. Rafiekian Case Collapses
Prosecutors in the Rafiekian case tried to argue that anybody who does something political at the request of a foreign official and fails to disclose it to the DOJ is an “agent of a foreign government” and can be put in prison for up to 10 years.
The presiding judge, Anthony Trenga, rejected the theory, ruling that an “agent”—as used in that context—needs to have a tighter relationship with the foreign government, a relationship that includes “the power of the principal to give directions and the duty of the agent to obey those directions.”
Trenga ultimately tossed the case for a lack of evidence.
70. No Exculpatory Evidence?
Starting in August, Powell started to bombard the prosecutors with demands for exculpatory evidence she was convinced the DOJ possessed. But the prosecutors repeatedly claimed the government already provided all it had and had no more.
The main issue was, Powell noted, that the DOJ had a very narrow view of what is exculpatory.
“If something appears on its face to be favorable to the defense … the government will claim it was said ‘with a wink and a nod,’ and therefore it showed the defendant’s guilt after all,” she complained in an Aug. 30, 2019, filing (pdf).
As it later turned out, the FBI was sitting on a number of documents favorable to the defense.
71. Contradicting Notes
When Flynn finally obtained the hand-written notes Strzok and Pientka took during the interview, it turned out they didn’t quite match the final 302.
The 302, for instance, says that Flynn remembered making four to five phone calls to Kislyak on Dec. 29, 2016. Both sets of notes indicate that Flynn didn’t remember that.
Also, the 302 says that Flynn denied that Kislyak got back to him with the Russian response a few days later. There’s no mention of a Russian response in the notes.
72. Notes Mixup
It took the prosecutors until November 2019 to find out and tell Flynn that the notes they said belonged to Strzok were actually Pientka’s and vice versa.
73. No Date, Name
The notes mixup wasn’t that easy to spot because neither set of notes was signed or dated, even though they should have been, according to Powell.
74. Harsher Sentence
Since his sentencing hearing, Flynn was expected to receive a light sentence, possibly probation. In January 2020, however, the prosecutors indicated that Flynn should be treated more harshly because he reneged on his promise to cooperate on the Rafiekian case.
This was part of the retaliation for Flynn’s refusal to lie for the prosecutors, according to Powell.
Shortly after that, Flynn asked the court to let him withdraw his plea.
75. Hint at Perjury
In February 2020, prosecutors asked for Sullivan to give them access to Flynn’s communications with Covington.
Any limitation the court puts on how the attorney-client information can be used shouldn’t “preclude the government from prosecuting the defendant for perjury if any information that he provided to counsel were proof of perjury in this proceeding,” they said.
It’s not clear what specifically they were referring to.
76. Thousands More Documents
In April, Covington told Flynn they found thousands more documents related to his case that they failed to give to Powell due to “an unintentional miscommunication involving the firm’s information technology personnel.”
77. Van Grack Out
On May 7, 2020, Van Grack withdrew from Flynn’s case as well as others. The reason is not clear.
The same day, the DOJ moved to withdraw the Flynn case.
78. Judge Delays
A government motion to withdraw a case usually marks the end of the case. The court still needs to accept the motion, but there’s not much it can do, since there’s nobody left to prosecute the case.
Sullivan, however, didn’t accept it.
79. Appointing Amicus
On May 13, 2020, Sullivan appointed former federal Judge John Gleeson as an amicus curiae (friend of court) “to present arguments in opposition to the government’s Motion to Dismiss” as well as to “address” whether the court should make the defense explain why “Flynn should not be held in criminal contempt for perjury.”
This was an unusual move. Amici are normally only appointed in civil or higher court cases. Powell has said Sullivan doesn’t have authority to do so.
80. Another Washington Post Coincidence
Just two days earlier, Gleeson co-authored an op-ed in The Washington Post where he accused the DOJ of “impropriety,” “corruption,” and “improper political influence” for dropping the Flynn case.
81. More Delays
On May 19, 2020, Sullivan issued a scheduling order that set an oral argument for July 16, when third parties invited by the judge would get a chance to voice their opinions. As such, the judge set to prolong the case for about two more months and possibly beyond.
Meanwhile, Flynn sent a petition to the District of Columbia appeals court, asking it to order Sullivan to accept the case dismissal.
82. Order for Response
In a rare move, the appeals court ordered Sullivan to respond to Flynn’s petition within 10 days. Usually, the court would appoint an amicus curiae to argue the case on behalf of the judge. Sometimes, the court would invite the judge to respond. Ordering a response is “very rare,” Reeves commented.
83. Sullivan Lawyers Up
In another unusual turn of events, Sullivan hired highly-connected D.C. attorney Beth Wilkinson to respond to the appeals court on his behalf.
Wilkinson has in the past represented major corporations such as Pfizer, Microsoft, and Phillip Morris, as well as Hillary Clinton aides during the FBI’s investigation of Clinton’s use of a private email server. She also assisted then-Supreme Court nominee Brett Kavanaugh in preparing his 2018 defense against a sexual assault allegation.
Wilkinson is married to CNN analyst David Gregory, the former host of the NBC News’ “Meet the Press.”
84. DOJ Brings Big Guns
In another unusual move, the DOJ’s Solicitor General and five of his deputies responded to the appeals court in support of Flynn’s petition. The Solicitor General usually argues cases on behalf of the DOJ before the Supreme Court. His personal involvement in an appeals court petition “is highly unusual and rare,” Reeves said.
85. Short Notice
On June 2, 2020, the appeals court set a hearing in the case on June 12, giving unusually short notice, Reeves noted.
“For non-lawyers, a ten day notice for oral argument may seem like a long time, but it isn’t. It’s an increidibly [sic] short amount of time,” he said, noting that a call for a hearing “shows that the DC Circuit is gravely concerned about this matter.”
- Singapore Deploys Robots At Migrant Workers Dormitory To Enforce Social Distancing
Singapore Deploys Robots At Migrant Workers Dormitory To Enforce Social Distancing
Tyler Durden
Thu, 06/11/2020 – 23:05Singapore has been dealing with one of the highest infection totals in all of Asia, mainly because of foreign worker dormitories in the country that have led to a surge in cases since April. This prompted the government to deploy autonomous robots to at least one dormitory, a move that would hopefully enforce strict social distancing rules.
The tiny, Asian country continues to reopen its severely damaged economy after several months of lockdowns — confirmed COVID-19 cases in the country breached 38,000 cases on Monday, with a total of 25 deaths.
The government’s virus task force told Reuters on Monday that at least half of the country’s newly discovered virus cases are asymptomatic. About 6,294 infections in the last two weeks have derived from migrant workers.
In response to the outbreak, AsiaOne reported the Singapore Police Force deployed autonomous robots to at least one foreign worker dormitory in the eastern part of the country to enforce social distancing.
Two Multi-purpose All-Terrain Autonomous Robots (Matar) were deployed at the start of May at one foreign worker dormitory. Each robot has cameras and speakers and can be controlled remotely via an operator.
A Matar robot helps the police cover more ground at the dormitory. h/t Singapore Police Force, AsiaOne Singapore Police Inspector Teo Wan-Ling, who leads 15 officers at the dormitory, said the robots aid in their ability to better enforce social distancing among residents.
Ling said: “There is a sizeable amount of people (at the dormitory). Sometimes when they queue up for their food, they don’t adhere to the safe distancing measures. So, in this case, you can just give them a verbal reminder over the Matar.”
“The Matar also plays a deterrent role,” she said, noting that the workers generally tend to follow the safe distancing measures once they see the robot patrolling.
Assistant Superintendent of Police Daniel Toh, operations officer in the police’s future operations and planning division, said the robots play broadcast messages in several different languages.
“The robot actually helps us to automate some routine as well as mundane tasks, so officers don’t have to travel and do the footwork. Instead, these robots can help to reduce human fatigue and perform the jobs available,” Toh said.
The robots navigate autonomously through the facility with a 360-degree camera, which covers any blind spots during patrols. Other Matar robots are being trialed in the country. One robot, in particular, can deploy a tethered drone that can fly up to 120 feet high.
The spread of Orwellian surveillance devices like Matar robots are becoming more common in a post-corona world.
- Russia, Russia, Russia – Obama Apparatchiks Blame Moscow For America's Riots
Russia, Russia, Russia – Obama Apparatchiks Blame Moscow For America’s Riots
Tyler Durden
Thu, 06/11/2020 – 22:45Authored by Phillip Giraldi via The Strategic Culture Foundation,
If one ventures into the vast wasteland of American television it is possible to miss the truly ridiculous content that is promoted as news by the major networks. One particular feature of media-speak in the United States is the tendency of the professional reporting punditry to go seeking for someone to blame every time some development rattles the National Security plus Wall Street bubble that we all unfortunately live in. The talking heads have to such an extent sold the conclusion that China deliberately released a lethal virus to destroy western democracies that no one objects when Beijing is elevated from being a commercial competitor and political adversary to an enemy of the United States. One sometimes even sees that it is all a communist plot. Likewise, the riots taking place all across the U.S. are being milked for what it’s worth by the predominantly liberal media, both to influence this year’s election and to demonstrate how much the news oligarchs really love black people.
As is often the case, there are a number of inconsistencies in the narrative. If one looks at the numerous photos of the protests in many parts of the country, it is clear that most of the demonstrators are white, not black, which might suggest that even if there are significant pockets of racism in the United States there is also a strong condemnation of that fact by many white people. And this in a country that elected a black man president not once, but twice, and that black president had a cabinet that included a large number of African-Americans.
Also, to further obfuscate any understanding of what might be taking place, the media and chattering class is obsessed with finding white supremacists as instigators of at least some of the actual violence. It would be a convenient explanation for the Social Justice Warriors that proliferate in the media, though it is supported currently by little actual evidence that anyone is exploiting right-wing groups.
Simultaneously, some on the right, to include the president, are blaming legitimately dubbed domestic terrorist group Antifa, which is perhaps more plausible, though again evidence of organized instigation appears to be on the thin side. Still another source of the mayhem apparently consists of some folks getting all excited by the turmoil and breaking windows and tossing Molotov cocktails, as did two upper middle class attorneys in Brooklyn last week.
Nevertheless, the search goes on for a guilty party. Explaining the demonstrations and riots as the result of the horrible killing of a black man by police which has revulsed both black and white Americans would be too simple to satisfy the convoluted yearnings of the likes of Wolf Blitzer and Rachel Maddow.
Which brings us to Russia. How convenient is it to fall back on Russia which, together with the Chinese, is reputedly already reported to be working hard to subvert the November U.S. election. And what better way to do just that than to call on one of the empty-heads of the Barack Obama administration, whose foreign policy achievements included the destruction of a prosperous Libya and the killing of four American diplomats in Benghazi, the initiation of kinetic hostilities with Syria, the failure to achieve a reset with Russia and the assassinations of American citizens overseas without any due process. But Obama sure did talk nice and seem pleasant unlike the current occupant of the White House.
The predictable Wolf Blitzer had a recent interview with perhaps the emptiest head of all the empowered women who virtually ran the Obama White House. Susan Rice was U.N. Ambassador and later National Security Advisor under Barack Obama. Before that she was a Clinton appointee who served as Undersecretary of State for African Affairs. She is reportedly currently being considered as a possible running mate for Joe Biden as she has all the necessary qualifications being a woman and black.
While Ambassador and National Security Advisor, Rice had the reputation of being extremely abrasive. She ran into trouble when she failed to be convincing in support of the Obama administration exculpatory narrative regarding what went wrong in Benghazi when the four Americans, to include the U.S. Ambassador, were killed.
In her interview with Blitzer, Rice said:
“We have peaceful protesters focused on the very real pain and disparities that we’re all wrestling with that have to be addressed, and then we have extremists who’ve come to try to hijack those protests and turn them into something very different. And they’re probably also, I would bet based on my experience, I’m not reading the intelligence these days, but based on my experience this is right out of the Russian playbook as well. I would not be surprised to learn that they have fomented some of these extremists on both sides using social media. I wouldn’t be surprised to learn that they are funding it in some way, shape, or form.”
It should be noted that Rice, a devout Democrat apparatchik, produced no evidence whatsoever that the Russians were or have been involved in “fomenting” the reactions to the George Floyd demonstrations and riots beyond the fact that Nancy Pelosi, Hillary Clinton and Joe Biden all believe that Moscow is responsible for everything. Clinton in particular hopes that some day someone will actually believe her when she claims that she lost to Trump in 2016 due to Russia. Even Robert Mueller, he of the Russiagate Inquiry, could not come up with any real evidence suggesting that the relatively low intensity meddling in the election by the Kremlin had any real impact. Nor was there any suggestion that Moscow was actually colluding with the Trump campaign, nor with its appointees, to include National Security Advisor designate Michael Flynn.
Fortunately, no one took much notice of Rice based on her “experience,” or her judgement insofar as she possesses that quality. Glenn Greenwald responded:
“This is fuxxing lunacy — conspiratorial madness of the worst kind — but it’s delivered by a Serious Obama Official and a Respected Mainstream Newscaster so it’s all fine… This is Infowars-level junk. Should Twitter put a ‘False’ label on this? Or maybe a hammer and sickle emoji?”
Russian Foreign Ministry spokesman Maria Zakharova accurately described the Rice performance as a “perfect example of barefaced propaganda.” She wrote on her Facebook page “Are you trying to play the Russia card again? You’ve been playing too long – come back to reality” instead of using “dirty methods of information manipulation” despite “having absolutely no facts to prove [the] allegations… go out and face your people, look them in the eye and try telling them that they are being controlled by the Russians through YouTube and Facebook. And I will sit back and watch ‘American exceptionalism’ in action.”
It should be assumed that the Republicans will be coming up with their own candidate for “fomenting” the riots and demonstrations. It already includes Antifa, of course, but is likely to somehow also involve the Chinese, who will undoubtedly be seen as destroying American democracy through the double whammy of a plague and race riots. Speaking at the White House, National Security Adviser Robert O’Brien warned about foreign incitement, including not only the Chinese, but also Iran and even Zimbabwe. And, oh yes, Russia.
One thing is for sure, no matter who is ultimately held accountable, no one in the Congress or White House will be taking the blame for anything.
- Days After Getting 'Woke' On Trump, Snapchat Refuses To Release Diversity Report Amid Racism Complaints
Days After Getting ‘Woke’ On Trump, Snapchat Refuses To Release Diversity Report Amid Racism Complaints
Tyler Durden
Thu, 06/11/2020 – 22:25Last week, Snap announced they would no longer promote President Trump’s account, claiming the company “will not amplify voices who incite racial violence and injustice.”
Today, Business Insider reports that CEO Evan Spiegel told employees at an all-hands meeting on Tuesday that the company would not release its diversity report – which Spiegel argued would only reinforce the notion that minorities are underrepresented in Silicon Valley.
The implication, of course, is that Snapchat is simply another ‘woke’ Silicon Valley company run by virtue signaling hypocrites.
Spiegel told employees that the company’s diversity numbers are in line with those at other tech companies, which have long skewed white and male. –Business Insider
Spiegel’s comments come days after former employees said they experienced and witnessed racism at Snapchat.
LMFAO at @applegatetv retweeting this. Liz, my ex manager, asked me to remove snaps of black people from a Snapchat Story & replace them w/snaps of white people bc the story was too “black-heavy” & “they all look the same.” This is who leads entertainment stories at @Snapchat https://t.co/4OFtj7aTu5
— ✨diana baik 🐰 (@dinobakes) June 5, 2020
Founded in 2011, Snapchat parent Snap hired its first head of diversity and inclusion in 2019, and has never made its diversity report public – while most major Silicon Valley companies began making such reports public in 2014.
In 2019, Google reported women made up only 32% of its employees, and that only 9.6% were Black or Latinx. The situation is similar at Facebook, where only 9% of its workforce is Black or Latinx. Twitter’s Latinx and Black employees are just nearly 11% of Twitter’s workforce, while Apple is one of the most diverse tech companies with more than 22% of workers identifying as Black or Latinx.
Spiegel also took time during the Q&A session to refute the allegations of racism and “shrinking diversity” that were made on Twitter and earlier reported by Mashable, the employees said. Former employees who identify as people of color told Mashable they experienced a racist culture, including from leadership, while working for Snapchat between 2015 and 2018. Managers censored or minimized coverage of predominantly Black content, like that from the 2016 Black Lives Matter movement and the hip-hop music festival Rolling Loud, according to the report. –Business Insider
How much of Evan Spiegel’s estimated $4 billion net worth should he donate to minority causes in order to atone for his company’s lack of diversity? After all, it would be the progressive thing to do, wouldn’t it?
- US Intel Officially Declared Steele Dossier "Highly Politically Sensitive" & Mostly Uncorroborated
US Intel Officially Declared Steele Dossier “Highly Politically Sensitive” & Mostly Uncorroborated
Tyler Durden
Thu, 06/11/2020 – 22:05Authored by John Solomon via JustTheNews.com,
Two months after the FBI used Christopher Steele’s dossier to support a warrant targeting the Trump campaign, U.S. intelligence officially declared his evidence was “highly politically sensitive,” minimally corroborated and not worthy of including in its analysis of Russian election interference, a newly declassified document shows.
The so-called Annex A of the official Russian election interference Intelligence Community Assessment was declassified this week by Director of National Intelligence John Ratcliffe, providing the most definitive proof to date that the U.S. intelligence in December 2016 as President Obama was leaving office was wary of a dossier that was essential to the FBI probe into now-disproven Trump-Russia collusion.
“An FBI source, using both identified and unidentified sub sources, volunteered highly politically sensitive information from the summer to the fall of 2016 on Russian influence efforts aimed at the US presidential election. We have only limited corroboration of the source reporting in this case and did not use it to reach the analytic conclusions of the CIA/FBI/NSA assessment,” the appendix stated.
The intelligence community assessment also warned that Steele appeared to have leaked his information to the media just before Trump was elected Nov. 8, 2016.
“The source’s reporting appears to have been acquired by multiple western press organizations starting in October,” the annex stated.
The annex confirms Republicans’ long-held suspicions that the intelligence community saw the Steele dossier as suspect even as the FBI portrayed its allegations as verified to a FISA court starting in October 2016.
You can read the newly declassified document here…
- Mike O'Rourke: "The Market Is More Broken Today Than It Was On March 23rd, And It's Entirely Due To The Fed"
Mike O’Rourke: “The Market Is More Broken Today Than It Was On March 23rd, And It’s Entirely Due To The Fed”
Tyler Durden
Thu, 06/11/2020 – 21:45Authored by Mike O’Rourke, Chief Market Strategist at JonesTrading
Ignorance is Bliss
The investment community witnessed financial history on Wednesday. For fifty minutes, Federal Reserve Chairman Jay Powell highlighted the risks to the economy. Specifically, he indicated that there is so much uncertainty to the economic outlook that the Fed’s forecasts in the Summary of Economic Projections are essentially useless. He warned that there are 22-24 million people out of work, and that millions will remain out of work when the economy recovers. He skillfully dodged a couple of questions about asset prices. Finally, with the last question of the day, Bloomberg’s Mike McKee nailed it when he asked the questions on all investors’ minds. Essentially, he queried whether the Fed’s response has created a bubble and financial stability risk, and second, whether the Fed has played a role in driving wealth disparity in this country, and last, whether there is a policy tweak that could adjust that trend? The Chairman did not specifically address the second question, but throughout the press conference and his recent speaking engagements, he has stressed that the Fed’s interventions are intended to help the most vulnerable of society. At this point, we are all well aware (and history has proven) that the Fed’s policies to help the vulnerable help the wealthy far more and continue to fuel wealth disparity.
The Chairman of the Federal Reserve’s response to the asset bubble question was stunning and a sign of how far off track the central bank is and what a dangerous environment it is creating. Powell started by noting that once the investment community realized the pandemic was going global, the investor reaction was to sell. He stated “…investors everywhere in the world, for a period of weeks wanted to sell everything that wasn’t cash, or a short term treasury instrument. They did not want to have anything that had any risk at all. And so, what happened, markets stopped working, they stopped working. Companies couldn’t borrow, they couldn’t roll over their debt, people couldn’t borrow. That’s the kind of situation that can be financial turbulence and malfunction, a financial system that’s not working can greatly amplify the negative effects of what was clearly going to be a major economic shock. So what our tools were put to work to do was to restore the markets to function.” Investors selling because of a major negative economic event is the definition of a market functioning properly. He can choose to argue about liquidity in the ten year treasury drying up, but the asset was at record highs. If it had been allowed to correct, liquidity would have returned. Instead, we suspect the Fed Chairman was likely duped by levered long fund managers betting on negative interest rates. When it was apparent negative rates would not materialize, they were trapped until the Fed decided to pay all time highs for hundreds of billions of dollars of Treasuries.
The Chairman then continued, “I think some of that has really happened as I mentioned in my opening remarks, and that’s a good thing. So we are not looking to achieve a particular level of any asset price. What we want is investors to be pricing in risk, like markets are supposed to do. Borrowers are borrowing, lenders are lending, markets to be working.” It appears as though he is saying that because asset prices have rebounded, now markets are functioning. Although the “problem” is resolved, the Fed will continue to keep easing on a daily basis. He elaborated on why the Fed will continue to ease. “If we were to hold back, we would never do this, the idea or just the concept that we would hold back just because we think asset prices are too high, others may not think so but we think that is the case. What would happen to those people what would happen to the people we are actually legally supposed to be serving. We are supposed to be pursuing maximum employment and stable prices, and that’s what we are pursuing.” The reality is that the $8.5 Trillion in stock market wealth created in the last 11 weeks is not creating jobs for any of the 22-24 million unemployed for whom he expressed concern.
Once again, Powell is reinforcing the view that markets that moving higher are functioning and markets that are moving lower are malfunctioning (as he concluded). He stated, “We’re not focused on moving asset prices in a particular direction, or at all. We want markets to be working, and I think partly as a result of what we’ve done they are working and we hope that continues.” The Chairman spent the entire press conference talking about the uncertainty of the recovery, 22-24 million people unemployed, and the millions of people who will remain unemployed. Is that consistent with a market on the cusp of making new all time highs?
The market is more broken today than it was on March 23rd, and it is entirely due to the Central Bank. The most remarkable aspect about Federal Reserve policy over the past 12 years is that very little of it has been related to economics. It has almost entirely been tied to financial markets, and leadership of the Fed over that time has repeatedly exhibited ignorance as to the functioning of financial markets.
- The COVID Crisis Canceled Many Graduation Speeches. Thank Goodness…
The COVID Crisis Canceled Many Graduation Speeches. Thank Goodness…
Tyler Durden
Thu, 06/11/2020 – 21:25Authored by Ryan McMaken via The Mises Institute,
Thanks to the COVID-19 panic this year, graduates at America’s institutions of higher education missed the “opportunity” to be lectured by some celebrity or politician about the importance of wanting a better world, or how racism is bad, or about how one should celebrate life.
Indeed, those who have no friends and nothing else to do could tune in to watch commencement speeches on these topics from academic and intellectual giants like Taylor Swift, Beyoncé, and Lady Gaga.
The speeches made by politicians — who use the speeches to push their own political agendas — are slightly more substantive, although no less opportunistic. Last year, for example — when graduation ceremonies were still conducted live — Angela Merkel and Christine Lagarde used their commencement speeches at American universities to burnish their own careers, albeit their talks were punctuated with discussions of topics like the transatlantic partnership .
The speeches tend to be expensive affairs, as well. As the Chicago Tribune reported in 2016:
the University of Houston paid $35,000 to book retired astronaut Scott Kelly as the commencement speaker. Rutgers University paid $35,000 for journalist Bill Moyers, who spoke at one division’s ceremony after the schoolwide keynote speech from the unpaid President Barack Obama. Kean University in New Jersey paid $40,000 to each of its two speakers….
As many colleges struggle with tight budgets, some have drawn sharp criticism for paying hefty speaking fees. The University of Houston, which increased tuition this year, paid $166,000 to bring Matthew McConaughey to speak last spring, including $9,500 for his airfare. The University of Oklahoma paid $110,000 to book journalist Katie Couric in 2006. Both speakers donated their fees to charity, but their costs sparked a debate about whether colleges pay too much for pageantry.
The students, of course, are never consulted as to whether or not this is money well spent.
From the administration’s standpoint, the fact these speeches serve no educational purpose whatsoever is immaterial. As I wrote back in 2014:
[T]he commencement speech is one of the more absurd traditions still maintained by higher education institutions today, and it has very little to do with providing an educational experience. Graduation ceremonies overall mostly exist to stroke the egos of the faculty members and give the institution itself a pat on the back while simultaneously attempting to convert the new alumni into donors. The speeches, we are told, are some sort of once-in-a-lifetime opportunity to hear wisdom form the lips of politicians and perennial government employees like Condoleeza Rice and Christine Lagarde, who are in turn paid handsomely to lecture new graduates about “giving back” to the community, or being yourself, or following your dreams.
As with most everything that occurs as a university, the purpose of the commencement speech is not to provide a service to the students, but to make the institution’s faculty and staff feel important. If an institution can land a celebrity speaker (no matter how blood-soaked or morally bankrupt) to deliver the commencement speech, it will be great for the next fundraising campaign, and if the speaker says something really entertaining, insightful, or controversial, then it might even get the institution on the evening news. The commencement speech serves a public relations function, not an educational one.
This year’s commencement season brought with it the usual controversy, and several commencement speakers withdrew after some students protested. Among those who withdrew were Condoleeza Rice and Christine Lagarde. It turned out that some students failed to see how these politicians would dispense timeless life-lessons to the students, given their rather questionable careers spent in a variety of morally questionable pursuits.
Nonetheless, many students, pundits and gullible parents still seem to be under the impression that graduate ceremonies are an important social institution. This is why we are told to be outraged every time there is some sort of “walkout” or other sign of disrespect directed at these well-paid and very-powerful commencement speakers on occasion:
“Why these spoiled brats aren’t showing the proper respect to the rituals of our colleges and universities! These commencement speakers are all so very important and must be heeded!”
And so on.
It should be noted that most students who attend commencement ceremonies couldn’t care less who the celebrity speaker is. Most of them are there because they like the ritualistic aspects of it, and virtually no one remembers what is said at commencement speeches in any case. The fact that there is a vocal minority that manages to veto some speakers is immaterial to the experience of nearly all students who will attend. Most students are really just waiting to get their prop diplomas (the real ones are mailed later) and go to brunch with their families.
The fact that most students (i.e., paying customers) just want to “feel graduated” by going to these ceremonies should be a tip to the faculty that speakers should be non-controversial. But, because these administrators want attention and influence, they often insist on bringing in controversial political figures and causing even more grief for their customers, as if four years of over-priced classes and social conditioning wasn’t enough.
The fact colleges and universities couldn’t care less about the people who pay the bills was reinforced all the more this year when most universities shut down as a result of the COVID-19 panic. Most higher education institutions insisted on charging students full price even though “college” was reduced to series of Zoom meetings and online assignments. Obviously, that’s not what most students paid for. College administrators, of course, were adamant that the students keep paying through the nose for services not rendered.
Needless to say, students should not expect a discount for the fact there were no commencement ceremonies this year. But the fact we survived a year without them should be an opportunity to remind us we should get rid of the “tradition” of commencement speakers altogether. As Casey Cep explained in Politico in 2014, these speeches are “a tired ritual” and are usually on the intellectual level of something we might call “Chicken Soup for the Graduating Soul.” That’s a generous assessment. More often, these speeches exist to push the ruling class’s party line. There no intellectual enrichment going on.
Fortunately, some of the more intelligent university trustees have already done away with it altogether. Cep notes:
As Jason Song of The Los Angeles Times noticed, current Washington and Lee President Kenneth Ruscio explained in 2009: “The wise and fiscally prudent Board determined that in future years our graduates and families should rest easy knowing that if they had to endure a worthless Commencement address, it would at least be inexpensive,” meaning the president gives the only speech.
That is indeed wisdom in this era of bloated higher-ed budgets, when millions are spent every year for grand, pompous ceremonies despite the discontent of students and the fiscal crisis of higher education.
- China New Car Sales Fall 10% Year-Over-Year And 20% Sequentially For The First Week Of June
China New Car Sales Fall 10% Year-Over-Year And 20% Sequentially For The First Week Of June
Tyler Durden
Thu, 06/11/2020 – 21:05It’s going to be tough to peddle the narrative that things are back on an upswing with the auto industry in China after retail car sales fell 10% year over year – but more importantly 20% from the same period in May – in the first week of June.
This comes after what looked like the beginning of a rebound for the industry in May, to the extent that we can trust the numbers coming out of Beijing. According to Bloomberg, China’s PCA now expects that retail sales will decline in June in part to what is being called “seasonal factors”.
This news comes despite better than expected results in May, where sales showed a 12% increase year over year.
According to The Detroit Bureau, premium and luxury passenger car retail sales led the charge in May, rising 28% last month compared with year-ago results. Those vehicles accounted for 1.61 million of the month’s 2.14 million vehicles sold.
Tesla helped along with China’s May luxury sales number, selling 11,065 Model 3’s during the month compared to just the 3,635 vehicles it sold in April. However, that hasn’t stopped the company’s VP of Business Development in China, Robin Ren, from leaving the company, according to Bloomberg.
The China Association of Automobile Manufacturers, or CAAM, had predicted an 11.7% jump for May, including commercial vehicle sales in its results. Predictions for June look ominous: the CPCA has said that June sales will decline in part because June 2019 was such a strong month for the industry.
Meanwhile, the Chinese government is on the cusp of attempting to spur demand with new policies aimed at enticing buyers, according to Bloomberg, citing an unnamed automotive industry group in China.
Recall, we have recently noted that U.S. auto manufacturers are teeing up sizeable incentives to get buyers back into showrooms. Europe is following suit, with Volkswagen starting a sales initiative to revive demand, including improved leasing and financing terms.
Outlook for the year in China remains less-than-optimistic. The CAAM predicts that sales will drop 15% to 25% for the year, depending on whether or not the country is able to further slow the spread of the virus.
- Why So Few Bears Own Park Avenue Apartments
Why So Few Bears Own Park Avenue Apartments
Tyler Durden
Thu, 06/11/2020 – 20:45Summary
- Bears can’t win the long-game, the probabilities are stacked against them as stocks (DJIA) have generated positive returns for almost 70 percent of the last 100 years
- Bears also face a relatively new (since the 1990s) headwind, that is rent-seeking behavior of the investment markets, where the rules of the game are changed when the market moves in the bears’ favor
- Stocks remain divorced from economic reality and are not optimal initial conditions for a sustained and stable new bull market
Good question, easy answer.
Probabilities Are Against Bears
First, the bears begin in a big hole with the probabilities stacked against them. We wrote an extensive analysis on this subject in our March 2019, Permabulls For Long Run.
The above data show the stock market in terms of the Dow Jones Industrials has generated positive returns for almost 70 percent of the past 100 years. Those are difficult probabilities to bet against and remain solvent.
Growth
The stock market is invariably linked to the economy over the long run, and the natural state of the economic trajectory is for growth, which, in most cases, generates profits that fuel stock rallies. Betting against that scenario for a prolonged period is the fastest way to the poor house.
Rent-seeking Shareholder Class
Second, we have been working on a piece for weeks, which has turned into a tome, Rent-Seeking Nation. It should be out soon but our idea was sparked by an excellent piece written by our good friend, Joe Calhoun, CEO of Alhambra Investments, titled Here Come The Crony Capitalists. If you haven’t read it, run don’t walk to consume it.
Joe understands what is current at stake for the global economy, the consequences of bad policy, and understands risk, and how to manage it. We mentioned in an earlier post that we live in times where it is important to have an experienced portfolio manager, who understands how to manage left-tail risk. Joe is one of the best.
Rent-Seeking
Rent-seeking
the fact or practice of manipulating public policy or economic conditions as a strategy for increasing profits. “cronyism and rent-seeking have become an integral part of the way our biggest companies do business – Lexico
Bears face another difficulty in that the investor class, led by Wall Street and the financial media have tremendous influence over public policy, monetary policy, in particular.
It seems evident, at least to us, that when market forces assert themselves to pressure stocks to move back to more realistic and reasonable valuations, monetary policymakers intervene and change the rules of the game against the bears. We are not arguing this the primary objective of monetary policy but it is, in fact, the end result.
The Stock Market and Economy
The chart below illustrates how divorced the current stock market is from economic reality. It is just another form of our favorite valuation metric, stock market capitalization-to-GDP.
The above data show that the annual trend growth of the S&P500 and nominal GDP tracked quite well up until the dot.com bubble, which began in the mid-1990s. The major bear markets of 2000–02 and 2007-09 caused the stock market to revert back close to trend GDP but stocks were soon reflated again by easy monetary policy.
There are many plausible reasons that caused this structural shift, which we won’t go into now. Contact us if you’re interested.
Economic Stability
The optimal and most stable dual path, in our opinion, is where both series track each other as was the case pre-1995.
At current levels, the stock market is way out of line with trend GDP. Yet, we heard, even today, on the financial television that we may be at the start of a new bull market. Seriously?
Stare at the chart for a few minutes and ask yourself, is that a realistic, high probability scenario? It is possible the laws of gravity with respect to stock valuations have been permanently suspended but we don’t think it is likely.
What is also notable from the chart is that the bubbles keep getting larger and larger. In fact, stocks may now be so far out of line with the economy that it is impossible to “land the plane” without destroying the world. How did we allow ourselves to get here?
Laws Of Economics Suspended
There is now a rapidly growing group of people who think the laws of economics have been suspended. That is there are no constraints on financial resources and don’t seem to have a problem with trillion-dollar deficits, most of which are now monetized, weak bond auctions (today’s 10-year), and a weakening currency
As macro observers, we are not fond of that cocktail, though, given the COVID crisis we don’t seem to have much choice on the massive deficit and debt monetization.
The macro boys at GMM remain uncomfortable, however, and that is why our position remains in cash and gold. Let them have their bull market.
Note this is not the case with our stock picker, Carol, who is fighting some health issues and probably would have weighed in here.
Initial Conditions For A New Bull Market
By the way, the average initial valuation of new bull markets from 1974 to 2009, was a stock market capitalization-to-GDP of 53.1 percent. The new bull market, which they tell us began on March 23rd was almost double that at 105.3 percent and now approaching 170 percent, more the 25 points above the peak level of the dot.com bubble. Sure the economy has bottomed and should get a record bounce in Q3, but stunning, nonetheless.
Upshot
The market — well, not really a market anymore after the Fed has effectively nationalized the bond markets — looks like a screaming short given the above chart. Just remember bears, you’re betting against the long-run probabilities skewed against you, and also understand that the referees will change the rules of the game if you start winning big. Rent-seeking is ubiqutious and now trumps market forces, which is a major factor why even the United States is morphing into a zombie economy.
- Zoom Disables Accounts Of Exiled Chinese Dissidents During Tiananmen Square Memorial
Zoom Disables Accounts Of Exiled Chinese Dissidents During Tiananmen Square Memorial
Tyler Durden
Thu, 06/11/2020 – 20:25Zoom shares easily shook off the controversy about the app’s vulnerability to intrusion by the Chinese, since most normal Americans don’t really care – if some MSS spooks want to eavesdrop on our conversations with grandma, they can go right ahead. They might even learn a thing or two.
But on Thursday, concerns about Zoom’s ties to Beijing resurfaced following reports that the company disabled the accounts belonging to the surviving members of the Tiananmen Square student movement during a video chat event they held to commemorate the anniversary of the incident last week (in China, the massacre is referred to as “the June 4th Incident”). The call was shut down by the company at the behest of the Chinese government because it included dissidents dialing in from China, the FT reports.
As the FT reminds us, nearly one-third of Zoom’s workforce resides in China, although the company trades on the Nasdaq. Much of its R&D takes place in China, and its servers are based there (making them vulnerable to infiltration). Famous student leader and exiled dissident Wang Dan reportedly participated in the call.
Zoom disabled the accounts of a group of Chinese dissidents in the US after they used its video conference service to commemorate the Tiananmen Square massacre. Zoom’s role in shutting down the meeting, which was hosted and organised by activists in the US but included participants dialling in from China, will increase fears about the platform’s security and how it will respond to government censorship requests. Zoom’s video chat service has exploded in popularity since lockdowns were introduced across the globe to slow the spread of Covid-19. The company, which is listed on Nasdaq, has a large operation in China: nearly a third of its workers are based in the country and much of its R&D takes place there. It also has servers in China.
Zoom claimed it disabled the accounts, including one paid account, because the call ‘violated local – ie Chinese – law’.
Mr Wang’s team shared screenshots with the Financial Times of his Zoom call being cancelled twice and two of his team’s paid Zoom accounts being disabled. The cancellations started just as the meetings were due to begin on the morning of June 4 in the US, where Mr Wang is based. Zoom later suggested that the Tiananmen commemoration had violated local laws, saying that “We strive to limit actions taken to those necessary to comply with local law . . . We regret that a few recent meetings with participants both inside and outside of China were negatively impacted and important conversations were disrupted.”
The Tiananmen dissidents alleged that Zoom shut down the call on direct orders from the CCP.
“31 years ago, we were on the streets fighting the Chinese Communist party police; today, these kinds of confrontations have shifted to the realm of cyber space,” wrote Mr Wang on Facebook. “Through destroying freedom of speech online, the CCP seriously threatens freedom of speech and democracy globally.”
Mr Wang’s team attributed the cancellations to hacking attempts or orders from the Chinese Communist party. Beijing has always sought to quell discussion of the Tiananmen Square massacre, although previously focused on its own territory. Last month, the government stopped Zoom from allowing individual users to sign up in China, according to the Nikkei Asian Review. “The memorial events for the June 4 massacre . . . impair the CCP regime’s legitimacy. Hacking such an online memorial meeting would do nothing beneficial to any other people or organisations except the CCP, especially its top leaders,” said a member of Mr Wang’s team when asked as to the motives behind the attacks.
The NYT’s longtime Beijing bureau chief offered a more in-depth look at Zoom’s decision in a twitter thread, and an explanation that before it soared to global popularity, Zoom was once “a hole in the Great Firewall” that Beijing is now moving to seal.
So Zoom suspended the account of @ZhouFengSuo after he hosted a virtual vigil to commemorate the Tiananmen Square Massacre. Some context on Zoom in China: it has been on Chinese censor’s radar for a while, but seems to have fallen thru the cracks. https://t.co/DFVtvFdPsK
— Paul Mozur 孟建国 (@paulmozur) June 11, 2020
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In Sept. 2019 Zoom was briefly blocked in China. In response a Zoom reseller posted instructions for real-name registration and said there had been a call from the Ministry of Public Security to follow the cybersecurity law. That got it out of the doghouse for the time being.
— Paul Mozur 孟建国 (@paulmozur) June 11, 2020
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Yet as Zoom soared to prominence this year, Chinese could still get on anonymously and connect with the world. It was a bridge over the Great Firewall. For May 1, Zoom blocked unregistered Chinese accounts from being able to host meetings. They could only join as participants.
— Paul Mozur 孟建国 (@paulmozur) June 11, 2020
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Still, unregistered accounts could join calls like Zhou’s Tiananmen Vigil, which would likely be blocked on any other platform in China. It was a classic hole in the wall that came with new tech. And people used it. It’s classic cat-and-mouse tactics to get around censorship.
— Paul Mozur 孟建国 (@paulmozur) June 11, 2020
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The question is, what happens next? Zoom could block Chinese unregistered users, which hurts its business. It could block connections between China and the world, which would harm its service. Or it could censor accounts like Zhou’s, which angers many and alienates US politicians
— Paul Mozur 孟建国 (@paulmozur) June 11, 2020
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Zoom says it will protect users from censorship, but adds “for situations where local authorities block communications for participants within their borders, Zoom is developing additional capabilities that protect these conversations for participants outside of those borders.”
— Paul Mozur 孟建国 (@paulmozur) June 11, 2020
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The strange language makes me wonder whether they’re going to create a separate feedback system that could cut users inside China off calls, while keeping the calls open for people outside China. Something like that might appease Beijing. The alternative is being fully blocked.
— Paul Mozur 孟建国 (@paulmozur) June 11, 2020
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It shows the political minefield an American company must navigate to survive China’s strict censorship rules. Unclear how Zoom will fare. The fact that Zoom hosts live video communications will make China’s internet regulators particularly nervous. It’s tough to stay ahead of.
— Paul Mozur 孟建国 (@paulmozur) June 11, 2020
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Whether to censor on China’s behalf is a separate matter. What’s interesting is Zhou used LinkedIn, which censors in China and so isn’t blocked, to advertise the Zoom vigil. Still Zhou opposes such practices “an American company put Chinese-style restrictions on users in the US.”
— Paul Mozur 孟建国 (@paulmozur) June 11, 2020
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He had this to add: “The Great Firewall enslaves the Chinese people. It is the fatal flaw for an open and free internet….The best option is to tear down the Great Firewall.”
— Paul Mozur 孟建国 (@paulmozur) June 11, 2020
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The decision to censor the conversation is just one more example of why users should avoid the popular app, which has refused to implement end-to-end encryption and shown an alarming indifference to implementing security standards that might protect users from Beijing.
- Is Unarmed National Guard Emboldening Seattle Mob?
Is Unarmed National Guard Emboldening Seattle Mob?
Tyler Durden
Thu, 06/11/2020 – 20:05Submitted by Susan Crabtree, of Real Clear Politics
The riots and protests that have roiled cites across the country over the last two weeks are dying down in the East Coast, but still raging on in Seattle, a bastion of far-left activism.
The ongoing chaos in Seattle is fueling new questions about whether decisions to disarm the state’s National Guard and have the Seattle police stand down are fanning the flames of protest and emboldening activists hell-bent on anarchy.
On June 1, after several nights of chaotic riots and looting in Seattle that included protesters setting several police cars ablaze, Washington Gov. Jay Inslee called in the National Guard to help stabilize the unrest that erupted following George Floyd’s death at the hands of a Minneapolis police officer.
“The guard are unarmed peacekeepers. They are here to help support the local communities,” Inslee, a Democrat who briefly ran for president before dropping out last summer, said at a press conference. “Their service is no different than what was provided during fire season or what they’re doing for our COVID-19 response.”
Eight days later, tensions were still running high after a weekend filled with clashes between Seattle police and protesters and an incident involving a man driving into a crowd of protesters and shooting one. On Monday night, a team of National Guard soldiers, armed only with batons and plastic shields and surrounded by protesters, pushed their way through the crowd and into a Seattle police precinct to remove weapons, ammunition and other supplies and allow all employees to leave, according to an eyewitness who spoke to RealClearPolitics.
Police Chief Carmen Best had ordered police to abandon the building, and the Guard soldiers appeared to play a key role in carrying it out.
Afterward, the police precinct, along with apartments and businesses on the block, were sprayed with foam fire suppressant to help protect them from a “credible threat” to burn the structure down. It was a prudent precaution after a Minneapolis police precinct was torched and suffered damage in the first few days of the protests over Memorial Day weekend.
Firefighters are standing by to protect the building and nearby businesses. Protesters, touting their victory against police, immediately declared the area a “cop-free zone” and sprayed barricades bordering the area with the words “now leaving the USA” and entering the “Capitol Hill autonomous zone” or “Free Capitol Hill.”
Still, protesters still weren’t satisfied. With police standing down Tuesday night, thousands of them broke into Seattle’s City Hall to demand that Mayor Jenny Durkan, a Democrat, resign over her failure to immediately embrace the push to defund the police. (Several members of the City Council had joined the frontlines of protests and earlier that day agreed to consider a proposal to cut police funding by 50%.)
The chaotic events that have unfolded in Seattle over the past several days offer the latest evidence of sharp political clashes over public officials’ responses to the violence and destruction accompanying more peaceful protests against racial injustice across the country.
The Black Lives Matter movement in recent days has renewed its push to demilitarize police forces around the country. Meanwhile, some on the right, including President Trump, Sen. Tom Cotton and others, have gone to the other extreme, calling on state and local officials to dominate the streets with military crackdowns on protests to stop the violence, looting and destruction.
Some 700 law-enforcement officers have been injured during the nationwide unrest over Floyd’s death, according to Justice Department data, and their lives matter too, Cotton argues, as do the livelihoods of all the business owners who saw their establishments looted and/or destroyed.
But activists on the left say the police have gone too far in trying to restore law and order in Seattle and elsewhere. The ACLU filed a lawsuit on Tuesday alleging that Best and Durkan had violated the constitutional rights of protesters by allowing officers, working with the guard, to disperse crowds with tear gas and flash-bang devices.
Even though Washington National Guardsmen were unarmed, aerial drone photos of police clashing with protesters over the weekend show a line of soldiers standing immediately behind the Seattle Police, who were facing off against a sea of protesters. Eyewitnesses told RCP that the protests were much more violent than previously reported – that there were pipe bombs thrown at police and guardsmen, that people were throwing bottles, rocks, fireworks and other “incendiary devices” and shining green lasers into the eyes of police and Guard soldiers.
The Seattle police Twitter feed said several police officers were injured Sunday with two taken to the hospital for treatment. At least one guardsman was struck in the head by a glass bottle, according to a police department tweet. Karina Shagren, spokeswoman for the Washington Military Department, which works with the National Guard, said the soldier was not injured and was back at work the next day.
Shagren also said that the role the Guard performed in Seattle wasn’t at odds with Inslee’s earlier assertion that they would offer peaceful support of police.
“They serve to ensure that the important message of those peacefully protesting in our communities isn’t overshadowed by criminals who are using the events to mask their dangerous and illegal activities,” she said, without referring to the constraints placed upon the police and Guard in performing that task.
“To suggest anything different is inaccurate and an unfair characterization. While the civil disturbance missions are different than COVID-related or wildfire missions – at the end of the day, our men and women leave their families and jobs to help our local communities preserve life and property,” Shagren added.
But Trump, Cotton and other critics says the hands-off approach is only spurring more needless deaths, injuries and costly destruction, which will take years for some inner cities to recover from, and does a disservice to Floyd’s death.
“One thing above all else will restore order to our streets: an overwhelming show of force to disperse, detain and ultimately deter lawbreakers,” Cotton said in a controversial New York Times op-ed titled “Send In the Troops,” calling on Trump to invoke the Insurrection Act. The Cotton opinion piece lead to an employee protest at the Times, which issued a subsequent apology for running it.
An opinion editor under fire for green-lighting the op-ed later resigned, part of developments that have fueled an intense national debate over “woke” censorship of dissenting views.
The 213-year-old Insurrection Act gives the president the power to deploy active-duty military troops on U.S. soil to “restore public order and enforce the laws” when “domestic violence has occurred to such an extent that the constituted authorities of the State or possession are incapable of maintaining public order.”
Over the last 60 years, presidents have used the law a number of times, including to uphold federal civil rights laws in the Deep South in the late 1950s, as Cotton pointed out in his op-ed. More recently, it was used to quell violence during the 1992 Los Angeles riots in the wake of the Rodney King beating and police officers’ acquittal for it.
In early June, after days of violence and looting in Washington, D.C., President Trump declared himself the “law and order” president and threatened to invoke the Insurrection Act to deploy active-duty military troops if the destruction in U.S. cities continued.
“As we speak, I am dispatching thousands and thousands of heavily armed soldiers, military personnel, and law enforcement officers to stop the rioting, looting, vandalism, assaults, and the wanton destruction of property,” Trump said.
The “heavily armed” part of that statement was largely untrue. As in Seattle, the vast majority of the National Guard troops deployed to D.C. were equipped with riot gear but didn’t carry firearms.
“At the request of the Secretary of the Army, National Guard forces will not deploy with weapons,” D.C. National Guard spokeswoman Darla Torres told RCP. “In limited circumstances, some guardsmen may be armed as necessary, to accomplish the mission of preserving life and property. However, the vast majority of the service members will be equipped with personal protective equipment such as shields, shin guards, helmets and batons.”
If Trump, along with liberal activists and other members of public, are confused about the National Guard’s ability to use lethal force against rioters, there’s a good reason for it. Governors ultimately have the final say over how to arm these soldiers operating in their states.
“Under state law, it’s the governor who decides how to equip and deploy the National Guard,” said John Yoo, a law professor at the University of California, Berkeley, who served as a legal counsel at the Justice Department during the George W. Bush administration. “If the anyone is unhappy about the way the National Guard are equipped for deployment, in most cases, it’s because that’s the way the governor and his aides wanted it.”
Yoo last week wrote his own op-ed disagreeing with Cotton, arguing that the Insurrection Act isn’t needed at this time because “states still have the resources to respond to civil disorder.” (Yoo is no shrinking violet when it comes to the use of force. He is credited with co-writing the infamous Torture Memo in 2002, which provided a legal rationale for the torture of detainees during the Global War on Terror.)
Over the last two weeks, some 31 states have used the manpower at their disposal, mobilizing their Guard units. A confusing patchwork of state policies has emerged as a result: Some news photos show guardsmen toting M4 rifles while others show these troops carrying only batons and plastic shields.
In California, for instance, Gov. Gavin Newsom allowed National Guard soldiers to carry M4s, along with live ammunition, during a week-long mobilization that ended over the weekend. Los Angeles Mayor Eric Garcetti reluctantly mobilized the Guard in early June in the wake of massive looting and the torching of police cars – unrest that subsided in a matter of days after the armed troops were called in to support police.
In contrast to the protesters storming Seattle City Hall Tuesday night, the armed Guardsmen in L.A. helped monitor City Hall there as the downtown was cleaned up.
Newsom didn’t respond to a request for comment about the rationale for allowing the soldiers to carry rifles.
“California National Guardsmen deploy with their assigned individual weapon they are qualified on and a reduced ammunition load for self-defense,” said a spokesman for the California Military Department.
When Inslee was asked at a press conference last week why he decided not to arm guardsmen working with police, he turned to Maj. Gen. Bret Daugherty, the commander of the Washington National Guard, to respond.
“We always arm ourselves to the level that’s appropriate for the threat that we face, and right now that threat appears to be looters who are breaking windows and stealing merchandise – clearly criminal activity worthy of being arrested and sent to jail but not deadly force,” Daugherty said, noting that he would discuss any changes to the threat level and those recommendations with Inslee.
He referred to an incident in which two Kentucky National Guard members shot and killed a protester in Louisville, although Louisville police fired too. A Kentucky official Tuesday night said evidence shows the gunshot that killed the man came from the Guard member, not a police officer.
Other state National Guards surveyed by RCP said states were using their soldiers in less public-facing roles, arming some and not arming others.
A spokesman for the Arizona National Guard said some soldiers are carrying M4s while others are armed with 9mm pistols, depending on their mission.
“There are some missions where they are not required at all,” he said. “The majority of our missions are behind the scenes, and we are rarely interacting with the community. Other states have their guard members on the front lines with riot gear. We do not. We are serving in capacities that enable more law enforcement [officers] to interact with the community.”
- "The Most Absurd Moment In The History Of Capital Markets": Hertz Plans To Sell Up To $1 Billion In New Bankrupt Stock
“The Most Absurd Moment In The History Of Capital Markets”: Hertz Plans To Sell Up To $1 Billion In New Bankrupt Stock
Tyler Durden
Thu, 06/11/2020 – 19:52On Monday, when the market hit its absolute blow off top phase and Robinhooders sent the stock of bankrupt Hertz as high as $6.25, resulting in a market cap of just under $900 million – a testament to the absolute idiocy of capital markets – we decided to double down on this idiocy and said that “we hope the company sells a few hundred million worth of stock – after all there is apparently endless demand for its shares – just so we can test the so-called “price discovery” of Powell’s latest and greatest FOMO bubble.”
Well, it turns out that some banker at Jefferies read us, however ignoring the clear sarcasm of this proposal decided to turn it into what may soon be the most insane and/or stunning, maybe even legendary capital markets product ever proposed: an Initial Bankruptcy Offering. You see, after the close on Thursday, Jefferies filed a motion in the Hertz bankruptcy case, seeking to sell $500 million in bankrupt Hertz stock (or 246,775,008 HTZ shares) in a “unique opportunity” to “raise capital on terms that are far superior to any debtor-in-possession financing.“
Why is Jefferies proposing this deal? Because “the recent market prices of and the trading volumes in Hertz’s common stock potentially present a unique opportunity for the Debtors to raise capital on terms that are far superior to any debtor-in-possession financing.”
In other words, the feverish retail participation in the most ridiculous asset bubble ever created by the Fed is just the opportunity Jefferies – and Hertz – needed to turn the bankruptcy process on its head.
It gets better: according to the filing, “if successful, Hertz could potentially offer up to and including an aggregate of $1.0 billion of common stock, the net proceeds of which would be available for general working capital purposes. Unlike typical debtor-in-possession financing, the common stock issuance would not impose restrictive covenants on the Debtors and would not impair any of the creditors of the Debtors. Moreover, the stock issuance would carry no repayment obligations, and the Debtors would not pay any interest or fees to those who provide the funding by buying shares at the market.”
While something like this has never been done before for the simple reason that in a bankruptcy, the common stock is… worthless – after all Jefferies is effectively asking for permission to steal from Robinhooders knowing full well the equity will be worthless as the various claimant classes are satisfied and there is nothing left for the preptition equity, Jefferies takes the humor up a notch when it claims with a straight face before the bankruptcy judge that “This Court Should Authorize the Sale of Hertz’s Unissued Shares under Sections 105(a) and 363(b) of the Bankruptcy Code.” Last we checked, there is nothing in the bankruptcy court authorizing a debtor to effectively take advantage of a massive asset bubble to fund a bankrupt entity.
And just in case someone accuses Jefferies of trying to get away with borderline fraud – you know, in case the SEC wakes up and realizes that what the mid-market investment bank is proposing is to basically steal from clueless Robinhooders, slapping it with a massive penalty – the filing has the following disclaimer:
Hertz would include disclosure in any prospectus used to offer common stock highlighting that an investment in Hertz’s common stock entails significant risks, including the risk that the common stock could ultimately be worthless.
Well, the common stock is worthless right “now”, not “ultimately”, although as a result of the idiocy on Robinhood where some 151,793 users decided to go long the insolvent company, and sent it soaring in recent days, Jefferies is basically claiming that these clueless momentum chasers who recently had to google what “bankruptcy” means have ascribed a value of $500 million for the worthless equity tranche, and so there is value there.
Why is this the most insane thing anyone has ever seen? Simple.
In bankruptcy, companies raise capital to go through the Chapter 11 or 7 process by issuing a debtor in possession (DIP) loan, which has superpriority and has a seniority to all other existing indebtedness, for the simple reason that all other existing indebtedness is impaired to large or small degree. After all, the company filed for bankruptcy for a reason: it couldn’t meet its interest payments. This also means that unless all the existing debt is repaid in full, or there is some unprecedented agreement between the equity tranche and the debtors, the pre-petition equity is worthless. Eventually, the company converts some or all of its impaired debt into post-petition equity, while the prepetition debt is either satisfied or rolled into the new entity. Eventually, the new, post-petition equity may end up being traded on public markets and have value as the newly reorganized company has far less debt and can pay the interest on this debt.
However, what is going on in this case is that Jefferies has basically turned the bankruptcy process on its head, and instead of raising capital for a bankrupt entity by selling the most secured form of debt it can, it is instead going to the other end of the capital structure, and hopes to sell equity!
Essentially, Jefferies is claiming that just because a bunch of momentum chasers sent the bankrupt equity to a value of almost $1 billion, then by implication all the debt above the equity tranche is not impaired, and thus there is equity value, arguably the most circular argument ever observed in capital markets.
The only problem is that if the debt was indeed not impaired it would be trading at par. Instead Hertz’ bonds due October 2022 are trading at 35 cents on the dollar. And while this is a simplification, if this one issue of $500MM in bonds alone is pricing in impairment of roughly $325 million, it means that the equity value is, at best, negative.
However, just because Robinhooders can only trade the worthless “hot potato” HTZ stock and not any of its other obligations, and just because they have been buying it up from each other in hopes that greater fools will buy it from them later, Jefferies – which obviously knows better – has decided to take a historic gamble with what may soon be the most iconic testament to the bubble spawned by the Federal Reserve.
What happens next? Well, any legitimate bankruptcy judge will laugh this off – after all no institutional investor would touch this offering with a ten foot pole. But Jefferies intended audience in this case is not an institutional audience – the bank hopes to sell the stock directly to those Robinhooders who pushed it up to $6.25 as recently as Monday. It was that idiotic move that prompted our original modest proposal for Hertz to sell stock “just so we can test the so-called “price discovery” of Powell’s latest and greatest FOMO bubble.”
Of course, there is a possibility a bankruptcy judge will allow this transaction to take place. There is also the possibility that the SEC will ignore what is going on, well aware that anyone who “invests” in this bankrupt stock will end up with nothing once the bankruptcy process concluded. In which case we look forward to what will be a truly unprecedented event: an Initial Bankruptcy Offering.
In any case, if the deal fails, as it should, it will confirm that “price discovery” under Powell’s bubble is absolutely meaningless, and would explain why Tesla still hasn’t issued several billion in new stock. On the other hand, if Jefferies and Hertz do pull this off and effectively transfer $1 billion from rabid Robinhood daytraders to impaired creditors – which is what this deal basically is – then all bets are truly off.
We could say much more about this absolute idiocy but instead we will leave it to other commentators, such as former Jefferies banker Dan Polner who had this to say: “I spent a career on Wall St and 9 years at Jefferies. I’ve never seen new equity holders provide DIP financing for the benefit of the creditors. Absolutely insane!”
Jared Ellias, a law professor, said he has studied hundreds of bankruptcies and never seen a company try to fund a case with an equity offering at the start of chapter 11. “Hertz looks at the market and sees there is a group of irrational traders who are buying the stock, and the response to that is to seek to sell stock to these people in hopes of raiding some amounts of money to fund their restructuring.”
And the absolute kicker: the stock is actually trading higher on this report!
Here are some other kneejerk opinions:
I have to say that I have never seen a Debtor petition the court for permission to sell equity to idiots, er, investors….WHILE IN BANKRUPTCY! $HTZ
— Diogenes (@WallStCynic) June 11, 2020
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I have never read anything more insane in finance world.
Hertz asking if they can sell equity to raise cash to pay debtors because equity market is so dumb that they’ll buy it anyway. Thanks Robinhood. https://t.co/FD3612qMsq
— Zach Weinberg (@zachweinberg) June 11, 2020
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“Your honor, we ask permission to authorize an At The Monkeys Offering”
— Bachman (@ElonBachman) June 11, 2020
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“Your honor, we’d simply like the Court’s permission to milk this Robinhood cow until the udders are dry, cracked, and bleeding. “
— Henry Williams (@HenryWilliams74) June 11, 2020
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I am so tempted to say this has to be the most absurd moment in the history of public markets…
But even if I’m right, I’ll be wrong by next week. https://t.co/bLbZPnrVHY
— Unlimited Grain Printer (@GrainSurgeon) June 11, 2020
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This just codified the insanity of this market.
BTFD! https://t.co/O7z4nvUNaV
— Tito el Bandito (@TitoElBandito) June 11, 2020
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Can we all pour one out for our devoted public servant Jay Powell?
He’a officially broken capitalism.$HTZ pic.twitter.com/4uzM1MtAn7
— Donut Shorts (@DonutShorts) June 11, 2020
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The stock is trading higher on plans to sell more stock to feed their trough.
If $htz trades higher tomorrow, I’m going full white collar fraud. I’m committing. Absolutely nothing matters.
— luis carruthers (@orthereaboot) June 11, 2020
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Can someone pls protect the braindead Robinhood account holders ?
Isn’t it against the law to exploit those who are mentally challenged ?$htz $chk $tsla $tslaq $nkla https://t.co/joHsJTnWen
— NikolaCharts (KingKublai5) (@KKublai5) June 11, 2020
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The express purpose of this $htz offering is to channel money from baggies to debtors.
Plenty of worthless paper has been sold before, but never with such honest intent.
This offering, if pulled off, is absolutely legendary.
Godspeed.
— luis carruthers (@orthereaboot) June 11, 2020
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The full filing can be found here.
- Mayor Apologizes As Chicago Cops Caught Lounging In Congressman's Office Instead Of Arresting Looters
Mayor Apologizes As Chicago Cops Caught Lounging In Congressman’s Office Instead Of Arresting Looters
Tyler Durden
Thu, 06/11/2020 – 19:45Thanks to her history as a local prosecutor, many of Chicago Mayor Lori LIghtfoot’s critics during her ultimately successful campaign to succeed Rahm Emmanuel warned that she was “The Fraternal Order of Police’s first choice”, a reference to the powerful police union. Now, after accusing an alderman of being “100% full of sh*t” when he claimed that Chicago PD cops were ignoring looters in poorer neighborhoods in the city, Lightfoot is apologizing after 8 cops were caught lounging in a Democratic Congressman’s office, making coffee and snacking on popcorn, while nearby neighborhoods were looted.
The district office of US Democratic Congressman Bobby Rush – best known outside Illinois as the Congressman who survived a primary challenge from Barack Obama, who would go on to be president of the US – was looted 2 weeks ago during the aftermath of George Floyd’s murder at the hands of a Minneapolis police officer.
When Rush reviewed the film from the evening, he saw 8 Chicago officers, including 3 supervisors, who responded to reports of the looting used his office as a temporary lounge, hanging out for hours drinking coffee and snacking on popcorn that had – according to Rush – been purchased for his office, according to the Chicago Tribune.
Meanwhile, the area surrounding Rush’s office at 54th Street and South Wentworth Avenue was looted, but the cops did nothing to stop that.
Instead of taking the footage public on his own, Rush alerted Mayor Lightfoot, and the two held a joint press conference to bilaterally denounce the Chicago PD and promise that all the officers involved and their commanders would be punished – though Lightfoot stopped short of promising that the officers would be fired.
Rush accused the officers of treating his office with a galling level of disrespect, while Lightfoot assured the assembled reporters that she and her staff were “enraged” by the news.
“One was asleep on my couch in my campaign office,” Rush said.
“They even had the unmitigated gall to go and make coffee for themselves and make coffee for themselves and to pop popcorn, my popcorn, in my microwave while looters were tearing apart businesses within their sight and within their reach,” Rush said.
Rush brought the matter to Lightfoot’s attention on Wednesday, and the information “enraged” her and her team, Lightfoot said.
Lightfoot apologized to Rush during the news conference on behalf of the city for his office being treated “with such profound disrespect.”
“That’s a personal embarrassment to me,” Lightfoot said. “I’m sorry that you and your staff even had to deal with this incredible indignity.”
Lightfoot publicly apologized to Rush for the incident, saying ultimate blame for the incident “lies with me”.
Lightfoot apologized to Rush during the news conference on behalf of the city for his office being treated “with such profound disrespect.”
“That’s a personal embarrassment to me,” Lightfoot said. “I’m sorry that you and your staff even had to deal with this incredible indignity.”
It’s particularly disrespectful when you consider that Rush was a member of the Black Panther Party of Illinois, a fact that lends the incident an unflattering racial tinge.
As Lightfoot’s popularity sags in Chicago due to her longstanding ties to the police, another black female former prosecutor is topping the polls to be Biden’s VP.
- Walter Williams Exposes The True Plight Of Black Americans
Walter Williams Exposes The True Plight Of Black Americans
Tyler Durden
Thu, 06/11/2020 – 19:25Authored by Walter Williams, op-ed via Townhall.com,
While it might not be popular to say in the wake of the recent social disorder, the true plight of black people has little or nothing to do with the police or what has been called “systemic racism.” Instead, we need to look at the responsibilities of those running our big cities.
Some of the most dangerous big cities are: St. Louis, Detroit, Baltimore, Oakland, Chicago, Memphis, Atlanta, Birmingham, Newark, Buffalo and Philadelphia. The most common characteristic of these cities is that for decades, all of them have been run by liberal Democrats. Some cities — such as Detroit, Buffalo, Newark and Philadelphia — haven’t elected a Republican mayor for more than a half-century. On top of this, in many of these cities, blacks are mayors, often they dominate city councils, and they are chiefs of police and superintendents of schools.
In 1965, there were no blacks in the U.S. Senate, nor were there any black governors. And only six members of the House of Representatives were black. As of 2019, there is far greater representation in some areas — 52 House members are black. Nine black Americans have served in the Senate, including Edward W. Brooke of Massachusetts, Carol Moseley Braun and Barack Obama of Illinois, Tim Scott of South Carolina, Cory Booker of New Jersey, and Kamala Harris of California. In recent times, there have been three black state governors.
The bottom line is that today’s black Americans have significant political power at all levels of government. Yet, what has that meant for a large segment of the black population?
Democratic-controlled cities have the poorest-quality public education despite their large, and growing, school budgets. Consider Baltimore, Maryland. In 2016, in 13 of Baltimore’s 39 high schools, not a single student scored proficient on the state’s math exam. In six other high schools, only 1% tested proficient in math. Only 15% of Baltimore students passed the state’s English test. That same year in Philadelphia only 19% of eighth-graders scored proficient in math, and 16% were proficient in reading. In Detroit, only 4% of its eighth-graders scored proficient in math, and 7% were proficient in reading. It’s the same story of academic disaster in other cities run by Democrats.
Violent crime and poor education is not the only problem for Democratic-controlled cities. Because of high crime, poor schools and a less pleasant environment, cities are losing their economic base and their most productive people in droves. When World War II ended, the population of Washington, D.C., was about 800,000; today, it’s about 700,000. In 1950, Baltimore’s population was almost 950,000; today, it’s around 590,000. Detroit’s 1950 population was close to 1.85 million; today, it’s down to 673,000. The population of Camden, New Jersey, in 1950 was nearly 125,000; today it has fallen to 74,000. St. Louis’ 1950 population was more than 856,000; today, it’s less than 294,000. A similar story of population decline can be found in most of our formerly large and prosperous cities. In some cities, the population decline since 1950 is well over 50%, and that includes Detroit, St. Louis, Cleveland and Pittsburgh.
Academic liberals, civil rights advocates and others blamed the exodus on racism — “white flight” to the suburbs to avoid blacks. But blacks have been fleeing some cities at higher rates than whites. The five cities whose suburbs have the fastest-growing black populations are Miami, Dallas, Washington, Houston and Atlanta. It turns out that blacks, like whites, want better and safer schools for their kids and don’t like to be mugged or have their property vandalized. And like white people, if they have the means, black people cannot wait to leave troubled cities.
White liberals and black politicians focus most of their attention on what the police do, but how relevant is that to the overall tragedy? According to Statista, this year, 172 whites and 88 blacks have died at the hands of police. To put police shootings in a bit of perspective, in Chicago alone in 2020 there have been 1,260 shootings and 256 homicides with blacks being the primary victims. That comes to one shooting victim every three hours and one homicide victim every 15 hours. Three people in Chicago have been killed by police. If one is truly concerned about black deaths, shootings by police should figure way down on one’s list — which is not to excuse bad behavior by some police officers.
- Houston "On The Precipice Of Disaster" As Officials Weigh Reimposing Stay At Home Order Amid Spike In Cases: Live Updates
Houston “On The Precipice Of Disaster” As Officials Weigh Reimposing Stay At Home Order Amid Spike In Cases: Live Updates
Tyler Durden
Thu, 06/11/2020 – 19:06Summary:
- Houston weighs reimposing stay at home order
- Oregon reports new record jump in cases
- NJ reports latest daily figures
- WHO issues another warning on Africa as cases top 200k
- Phoenix Mayor says city is not recovering from the coronavirus
- Larry Kudlow plays down second wave
- NY to allow some regions to reopen indoor dining Friday
- Italy reports latest batch of encouraging numbers
- NY reports just 36 deaths, down from 53
- Florida reports another jump in new cases as Miami bans chokeholds
- Moderna releases latest vaccine update
- Regeneron starts human testing of antiviral cocktail
- Scott Gottlieb explains the problem with Texas’ response
- Epidemiologists warn about threat of ‘second wave’
- Mumbai hospitals overwhelmed
- Russia cases top 500k
- Latin America death toll tops 80k
- US projects nearly 200k COVID deaths by October
- LA County still seeing ~1,300 new cases a day as reopening continues
* * *
Update (1645ET): As Houston vies for LA and Phoenix to succeed NYC as America’s biggest COVID-19 hot spot, the Houston Chronicle reports that health officials may reopen a COVID-19 hospital at a football stadium while officials weigh whether to reimpose a stay at home order. Such a move would undoubtedly rattle stocks, even after Thursday’s massive dive. One local official described the situation as placing the city “on the precipice of disaster.”
The move to reopen a designated COVID-19 hospital comes as hospitalizations due to the virus have reached their highest levels since the outbreak began.
Meanwhile, the number of newly reported infections has also climbed to new highs.
Meanwhile, Oregon just reported a new one day record jump in new cases – 178 to be exact – with 43 of them in Multnomah County, where Portland is located. Both the state- and county-wide figures appear to be one-day records. The figures were released right before Ore. Gov Kate Brown was expected to announce that Multnomah County and Portland could enter the first phase of reopening, joining the rest of the state. Oregon is one of the nearly 2 dozens states where cases have been rising.
Source: BBG
* * *
Update (1315ET): New Jersey just released another batch of largely encouraging daily numbers as Gov Phil Murphy claimed his state had the slowest transmission rate in the country.
NEW: We’ve received 539 new positive #COVID19 test results, bringing our statewide total to 165,816.
The spot positivity rate for tests from June 7th was 3.8%. pic.twitter.com/TuzvkJaMEO
— Governor Phil Murphy (@GovMurphy) June 11, 2020
We continue to work hard to push down the curve of newly identified #COVID19 cases at our long-term care facilities, and to stem the loss of residents to COVID-19 related causes. pic.twitter.com/4zGXpr1vDO
— Governor Phil Murphy (@GovMurphy) June 11, 2020
LOOK: Our hospitals currently have 1,512 patients being treated for #COVID19.
Our Field Medical Stations reported 9 patients. pic.twitter.com/UuQR9FhR0S
— Governor Phil Murphy (@GovMurphy) June 11, 2020
NJ also declared 70 new deaths.
Sadly, we’ve lost another 70 members of our New Jersey family to #COVID19.
We’ve now lost 12,433 New Jerseyans in the 100 days since our first positive test result. For them, and for everyone we have lost, our flags remain at half-staff. pic.twitter.com/Rasdq7KiM0
— Governor Phil Murphy (@GovMurphy) June 11, 2020
With NY, NJ has been one of the worst-hit states in the country.
* * *
Update (1255ET): The Mayor of Phoenix just acknowledged during a roundtable discussion with other mayors hosted by a Washington think tank that her city “opened much too early” and is now facing a serious crisis, per CNN.
During a panel discussion with other mayors across the country hosted by the Center for American Progress, Phoenix Mayor Kate Gallego said that the city and state of Arizona is not recovering from Covid-19.
“We have had so many of the records you don’t want to be hitting for Covid-19 from my perspective. We opened too much too early and so our hospitals are really struggling,” Gallego said.
She also said that the increase of positive cases is primarily due to the lifting of the stay-at-home order as well as challenges in long-term care facilities. Arizona lifted the stay-at-home order on May 15.
The city’s hospitals in particular are “really struggling,” per CNN.
Meanwhile, during his latest interview with Fox on Thursday, Larry Kudlow said Thursday had been a “rough day” for markets, but that talk of a second wave of the virus had been seriously overblown.
“Go talk to Deborah Birx about that, she doesn’t seem to think so,” Kudlow said of a second wave, before acknowledging that he “isn’t a medical expert.” Steve Mnuchin said earlier that a second shutdown wouldn’t be necessary even if new cases surge.
New York Gov Cuomo announced on Thursday that five regions in central and western NY would resume indoor dining Friday as ‘Phase 3’ of the state’s reopening begins.
The WHO also issued another warning about the spread of the coronavirus in Africa, with total cases reaching 200,000 less than three weeks after reaching 100,000, though the continent still accounts for less than 5% of global cases.
* * *
Update (1200ET): Italy reported another encouraging set of numbers with just 379 new cases and 53 new deaths, bringing the total to 236,142 and total deaths to 34,167. The number of patients in intensive care across Italy has also fallen below 250, according to the latest numbers reported by the Italian press and Civil Protection Service.
* * *
Update (1140ET): As new cases and deaths creep higher in most other regions of the US, New York State just confirmed 36 deaths were reported over the last day (down from 53 the day prior), the lowest number of deaths reported in nearly 3 months. Gov Cuomo claimed that New York isn’t among the 21 states where new cases are increasing because “New Yorkers have been smart.”
Watch the rest of Cuomo’s briefing below:
Giving my daily press briefing now. Watch Live: https://t.co/tJ284O6rPg
— Andrew Cuomo (@NYGovCuomo) June 11, 2020
* * *
Update (1100ET): Police in Miami have become the latest to bar the use of the controversial chokehold (a move that led to the death of Eric Garner) while the number of new COVID-19 cases reported in the state has continued to climb on Thursday. New cases climbed by 2.5% day over day (compared with a 7-day average of 2%) bringing Florida’s total to just shy of 70k.
🌴☀️Florida:
*Cases up 2.5% from Wed, higher than the 2% average increase in the previous 7 days.
*Deaths reached 2,848, an increase of 1.7%.
*Hospitalizations jumped by 226, the biggest single-day increase since May 21.https://t.co/ftb2aMnIbG— Beth Williams Liou (@BWilliLiou) June 11, 2020
Here’s more from local TV news station WINK:
As of Thursday at 11 a.m., there have been 69,069 positive cases of the coronavirus (COVID-19) in Florida. The case count includes 67,456 Florida residents and 1,613 non-Florida residents. There are 2,848 deaths reported and 11,571 hospitalizations, according to the Florida Department of Health.
There have been 1,307,728 tests administered in Florida. A total of 69,069 tests have come back positive, and 1,237,679 tests have come back negative. The remainder are still pending, according to the FDOH website.
Numbers are released by the DOH daily at approximately 11 a.m.
STATEWIDE NUMBERS
Total number of cases: 69,069 (up from 67,371) Deaths: 2,848 (up from 2,801)
1,698 total new cases reported Thursday
47 total new deaths reported Thursday
SOUTHWEST FLORIDA NUMBERS
Total in SWFL: 6,307 (up from 6,140) Deaths: 289 (up from 283)
167 total new cases reported Thursday
6 total new deaths reported Thursday
Lee County: 2,500 (up from 2,422) – 128 deaths (2 new deaths)
Collier County: 2,291 (up from 2,230) – 59 deaths (2 new deaths)
Charlotte County: 515 (up from 505) – 72 deaths
DeSoto County: 304 (up from 299) – 10 deaths (2 new deaths)
Glades County: 107 (up from 104) – 1 death
Hendry County: 590 (up from 580) – 19 deaths
Meanwhile, as Trump imposes sanctions on the ICC, joining China in expressing disdain for its rulings, which can’t really be enforced, the editor of the Global Times is weighing in on the situation in the US.
With Covid-19 cases in US exceeding 2 million, all I want to say is that I really did not realize that American capitalism is so ruthless. The US that my generation worshiped in Tiananmen Square when we were young is already dead.
— Hu Xijin 胡锡进 (@HuXijin_GT) June 11, 2020
* * *
Update (1035ET): The Army has picked the finalist among a group of more than two dozen vaccine candidates for a research partnership with the Walter Reed Army Institute of Research, the Army’s top laboratory. Two back ups were also selected according to CNN. The names of the finalists haven’t been released, but we reported on a purported list of 5 finalists earlier this month.
* * *
Update (0840ET): With Dow futures pointing to a 1,000-point drop at the open as the Fed’s dismal economic projections and Powell’s comment that the Fed “isn’t even thinking about raising interest rates” weigh on risk appetite and the cyclical stocks that have driven the latest leg of the rally, Moderna has released its latest ‘update’ on its vaccine trials, which are being run in partnership with the NIH.
According to the announcement, Moderna has “finalized its Stage 3 protocols”, according to a brief press release.
CAMBRIDGE, Mass.–(BUSINESS WIRE)–Moderna, Inc., (Nasdaq: MRNA) a clinical stage biotechnology company pioneering messenger RNA (mRNA) therapeutics and vaccines to create a new generation of transformative medicines for patients, today announced progress on late-stage development of mRNA-1273, the Company’s mRNA vaccine candidate against COVID-19. Moderna has finalized the Phase 3 study protocol based on feedback from the U.S. Food and Drug Administration (FDA). The randomized, 1:1 placebo-controlled trial is expected to include approximately 30,000 participants enrolled in the U.S. and is expected to be conducted in collaboration with the National Institute of Allergy and Infectious Diseases (NIAID), part of the National Institutes of Health (NIH). The trial’s primary endpoint will be the prevention of symptomatic COVID-19 disease; key secondary endpoints include prevention of severe COVID-19 disease (as defined by the need for hospitalization) and prevention of infection by SARS-CoV-2, the virus that causes COVID-19. The primary efficacy analysis will be an event-driven analysis based on the number of participants with symptomatic COVID-19 disease. Based on the results of the Phase 1 study, the 100 μg dose level was chosen as the optimal dose level to maximize the immune response while minimizing adverse reactions. Moderna has completed manufacture of vaccine required to start the Phase 3 study. The Company expects dosing in the Phase 3 study to begin in July.
Regeneron, in other news, is beginning human trials of a new antiviral cocktail.
Meanwhile, one twitter user pointed at a pattern that we have noticed as well.
Hasn’t anyone else noticed over the past few months that whenever there’s a pre-market or expected pullback in the market, there’s COVID-19 vaccine/therapeutic research information released, even though mostly premature and unsubstantiated? Twice this morning with Dow down 700pts
— alannajoy (@alannajoy) June 11, 2020
We wonder what ‘Jimmy Chill’ thinks about that?
* * *
Update (0720ET): Former FDA Commissioner and perennial “Squawk Box” guest Scott Gottlieb offered some commentary about the situation in Texas, explaining that characterizing this as a ‘second wave’ might be misleading since ‘they never really got over the first’.
Globally, more than 7.3 million cases of the novel coronavirus have been confirmed, including at least 416,000 deaths, according to Johns Hopkins University data. The US, meanwhile, passed the 2 million-case mark last night, as we reported.
Source: FT
The fact that Texas hasn’t traced the rising case numbers, which are overwhelmingly centered in the greater Houston area, to a specific source – like a meatpacking plant or something – worries Gottlieb, because that means the contact tracers in the state have failed at their basic mission: to find the source of any ‘super-spreader’ incidents quickly before they become ‘super-duper spreaders’.
“It’s not a second wave, they never really got rid of the first wave,” says @ScottGottliebMD on #COVID19 outbreaks in Arizona, Texas, South Carolina and North Carolina. “The more concerning part is they haven’t been able to isolate what the source of the infection is.” pic.twitter.com/u7ycJFCJ9F
— Squawk Box (@SquawkCNBC) June 11, 2020
Thanks for the comforting words, doc.
* * *
With futures pointing to a sharp drop at the open for the Dow, it appears investors are finally confronting signs of a second wave that have emerged both in the US, and around the world.
As one scientist who appeared on CNBC’s Worldwide Exchange program Thursday morning claimed, signs of a genuine second wave have emerged around the world, including in Sweden and Iran. Fortunately, we haven’t seen a sharp move higher in mortality alongside the surge in cases – but that could follow.
Across the northeast and Atlantic Coast, more states are lifting bans on outside graduation ceremonies, with Maryland Gov Larry Hogan announcing late Wednesday evening that he would allow outdoor graduation ceremonies in the state to move forward starting Friday.
Bad news for all you ‘influencers’ out there: Both Coachella and Stagecoach, two of the largest music festivals held each year in Southern California, have been canceled. Organizers moved both events to October, but have now decided to forgo them until next year (but don’t despair influencers, there will be many more protests to use as a backdrop for your selfies between now and the end of the year).
Last night, we reported that Mumbai, India’s wealthiest city and financial capital, had surpassed the total number of infections reported in Wuhan, the original epicenter of the virus. Mumbai is also India’s entertainment capital, home to ‘Bollywood’, the Indian film industry.
The city has reported more than 50k cases, nearly a fifth of India’s total, and more than the Chinese city of Wuhan, ground zero for the pandemic. The broader Maharashtra state has now confirmed more cases than the whole of China. India has recorded more than 286,000 coronavirus cases, including at least 8,100 deaths, according to the Indian Ministry of Health and Family Welfare.
Although Mumbai is India’s wealthiest city, and its most international, public hospitals have been totally overwhelmed by the virus, with doctors collapsing from exhaustion and dehydration.
“We expected that if infection took root, the health system would be overwhelmed,” said Rajeev Sadanandan, Kerala’s former health secretary and the chief executive of non-profit Health Systems Transformation Platform. “With the kind of population Mumbai has, there is no way that the infrastructure would have been enough.”
Russia crossed a grim milestone on Thursday when it reported another 8,779 confirmed cases of the virus on Thursday, bringing the total for the Russian Federation to 502,436, making Russia the third country to pass 500k cases after the US and Brazil. Another 174 deaths were recorded, bringing Russia’s deaths to 6,532. However, some observers fear the true total in the country – for deaths and cases – is much higher, since not every patient who tests positive for COVID-19 and then dies is counted as a ‘COVID-19 death’.
Earlier this week, Moscow’s mayor lifted self-isolation restrictions and the city is expected to reopen by the end of the month.
After the US topped 2 million confirmed cases last night, a set of COVID-19 projections maintained by the University of Washington has just been updated, and is now projecting 170k COVID-19 linked deaths in the US by Oct. 1, that would be a rise of nearly 80% by October.
Source: CDC
IHME, the institute that maintains the model, said it’s based on data through June 6. “Large gatherings in some states due to lifting of social distancing restrictions, gatherings on national holidays, and public protests are reflected in the general trend toward increased mobility.”
In the US, more than 20 states are seeing a rise in the daily number of new cases, per the NYT.
The flareup in Latin America and the Caribbean also reached a new milestone as deaths in the region surpassed 70k: Brazil, the worst-hit country in the region, has identified more than 772,000 cases, according to Johns Hopkins University.
Peru and Mexico, which just reported a record daily surge in new cases, are also seeing uncontrolled spread. Mexican paramedics are responding to 911 calls at an alarming rate, as the coronavirus pandemic continues to ravage Mexico City.
Quarantine measures have been extended in Chile, the health ministry said in a statement released Wednesday.
Meanwhile, in LA, more businesses, including gyms and museums, are reopening, even as the county continues to report about 1,300 new cases per day. There are 67,064 confirmed coronavirus cases and 2,768 deaths in Los Angeles County as of Thursday morning.
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