- World's Largest Shipper Warns Of Collapsing Volumes, Dashes Hope For V-Shaped Recovery
World’s Largest Shipper Warns Of Collapsing Volumes, Dashes Hope For V-Shaped Recovery
Tyler Durden
Thu, 05/14/2020 – 02:45A.P. Moller-Maersk A/S, the world’s largest container line, warned Wednesday that global trade will continue to falter with volumes declining by at least a quarter in 2Q20. Maersk dashed all hope that a V-shaped recovery will be seen in the back half of the year, rather suggesting a U-shaped recovery is more plausible.
“Looking into Q2 2020, visibility remains low as a result of the COVID-19 pandemic. We continue to support our customers in keeping their supply chains running, however as global demand continues to be significantly affected, we expect volumes in Q2 to decrease across all businesses, possibly by as much as 20-25%,” Soren Skou, Maersk’s CEO, was quoted in a company press release.
“2020 is a challenging year, but as we proactively respond to lower demands and show progress in our transformation and financial performance, we are strongly positioned to weather the storm,” Skou said.
Maersk pulled its full-year guidance for 2020 in late March, due to the COVID-19 pandemic that has severely damaged the global economy. In an interview with Bloomberg, Skou said he’s expecting “some sort of U-shaped recovery.”
“Right now, we believe we are at the bottom and we will probably be here for a while,” Skou said. “But in the third quarter, the fourth quarter, we should start to see some recovery.”
Maersk continued to reaffirm a gloomy outlook but was able to deliver some growth in operating profit for the first quarter. Revenue increased slightly to $9.57 billion, which was better than estimates of $9.36 billion.
Shares in Maersk plunged nearly 6% in trade on Wednesday. When macro matters once more, Maersk shares tend to sell ahead of a global selloff.
Maersk’s warning comes as the WTO last month indicated the pandemic will likely result in one of the worst collapses of international trade in the post–World War II economic expansion.
On Tuesday, IMF managing director Kristalina Georgieva said the current global economic outlook continues to deteriorate and has suffered the worst blow since the 1930s. The fund will publish downward revisions to its global economic forecasts next month, Georgieva said.
In mid-April, the IMF forecast a decline of 3% in global output, with emerging and developing economies contracting by 1% and advanced economies by more than 6% in 2020.
Georgieva spoke with FT on Tuesday, she said: “With the crisis still spreading, the outlook is worse than our already pessimistic projection. Without medical solutions on a global scale, for many economies a more adverse development is likely.”
It could take several years or more for global GDP to recover back to 2019 levels.
Investing legend Stan Druckenmiller called the V-shaped recovery a fantasy during a webcast Tuesday.
As of late, the V-shaped narrative for the Global and or US economy continues to unravel, suggesting more of a U-shaped or even L-shaped recovery is ahead.
- The Face Of Post-COVID Geo-Politics
The Face Of Post-COVID Geo-Politics
Tyler Durden
Thu, 05/14/2020 – 02:00Authored by Wayne Madsen via The Strategic Culture Foundation,
The post-Covid international geo-political structure may resemble that which followed the most lethal pandemic that affected the world – the highly contagious Black Death of the 14th century. The bubonic plague killed between 75 and 200 million people in Asia, Europe, and North Africa. It is believed the bubonic/pneumonic plague was carried by black rat flea parasites that travelled to Europe and the Middle East first via the Silk Road from China and then on Genoese merchant ships sailing from Crimea. The fleas spread from their rodent hosts to humans. An eerie connection to Covid-19 is that among the first victims of the Black Death were 80 percent of the population of Hubei province, including the town of Wuchang, present-day Wuhan.
By the end of 1346, India had been largely depopulated and dead bodies were reported to have covered Tartary, Mesopotamia, Syria, and Armenia. In 1345, Damascus was recording 2000 deaths a day. By 1349, the plague had spread through Italy, France, Spain, Germany, England, Scotland, Ireland, Norway, and even far-off Iceland and Greenland. Only regions that had little contact with other countries through trade were relatively spared. These included the Basque region and isolated pockets in the Alpine, Pyrenees, and Atlas mountain ranges. The plague returned in follow-on phases from the 15th to 17th centuries. France lost a million of its citizens in just four years, between 1628 and 1631.
Without a suitable vaccine to fend off Covid-19, the world may copy the effects that the Black death had on geo-politics, trade, the economy, and social structure.
The Black Death saw city dwellers flee for the countryside, stores closing their door, and doctors refusing to see patients. The bubonic plague also jumped species. Humans infected goats, sheep, cows, pigs, dogs, cats, and chickens and vice versa. So far, Covid-19 has been reported to have infected dogs, cats, lions, tigers, and minks.
Just as with the current scapegoating of Covid-19 to blame Asians, Muslims, Jews, and other minorities, the Black Death also saw its share of playing the blame game, often with deadly consequences. Among those targeted in the 14th century as being responsible for the plague were Jews, Romani (gypsies), foreigners in general, religious pilgrims, witches, street beggars, lepers, and Catholic friars. The Jewish communities of Strasbourg, Mainz, and Cologne were decimated.
Just as witnessed with Covid-19, “miracle cures” were in abundance during the Black Death. Ineffective treatments included bloodletting and boil lancing. One suggested cure was drinking a concoction of milk and garlic cloves. Others included drinking a solution of ground chicken bones or cold water mixed with vinegar. Other remedies were to burn incense made of frankincense, myrrh, basil aloe, garlic, and grape leaves; inhale strong odors from latrines to overcome the infectious “vapors” of the plague; wash walls with a solution of water and vinegar; and maintain a diet of wheat bread and citrus fruits, while avoiding red meat. Those who believed the plague was a punishment from God engaged in self-flagellation processions through villages and towns. Today, certain world leaders have advocated bleach and disinfectants, vodka, herbal tonics, and ultraviolet and sunlight to cure Covid-19.
Authorities in Venice began requiring arriving ship crews to be kept on board their vessels for 40 days – what was called a “quarantine.” The practice continues to this day as a method by public health authorities to stop the spread of a contagion.
With a lack of workers, prices of commodities and the cost of labor rapidly increased as the plague spread throughout Europe and North Africa. With serfs able to negotiate labor conditions with landowners, the feudal system became a collateral victim of the Black Death. Laborers became free to shop around their services to the highest bidder and average wages doubled as a result. A mobile labor force soon emerged.
The Black Death’s aftermath created a political climate of mistrust of others, including foreign travelers, trading merchants, and money handlers. No one wanted a return to the 14th century, which was characterized in England as “nasty, brutish and short.” In England, cleric John Wycliffe questioned the authority of the Pope and advocated the pre-eminency of the Bible. Wycliffe was tried for heresy in 1377 but John of Gaunt, the king’s younger son and the top adviser to his father, defended Wycliffe and made it clear that the king also demanded more in taxes from the clergy. The Black Death paved the way for the Protestant Reformation in England two centuries later.
Edward III was, at the outset of the plague, the Donald Trump of his era. He insisted on conducting tournaments at Windsor Castle and other locations in England even though some of his royal advisers urged caution in the face of the Black Death sweeping England. Edward’s tournaments featured jousting, feasting, dancing, along with another unwelcomed addition – transmission of the bubonic/pneumonic plague through close social contact. It was not until the king’s 14-year old daughter, Princess Joan, who was en route to Spain to marry Crown Prince Pedro of Castile, died from the plague that Edward took notice of the gravity of the disease and that “eat, drink, and be merry” would only hasten the depopulation of his realm.
Joan, who died in Bordeaux, France, was Edward’s favorite child. When Edward’s much-beloved wife, Queen Philippa, died from the plague, Edward saw that his rule was in great jeopardy. He mandated English, not French, as the official language of his government and he agreed to personally address Parliament, which he had previously tried to circumvent at every turn. What occurred with the English royal family was akin to Trump having to deal with the Covid-19 deaths of his wife, Melania, and his favorite daughter, Ivanka.
In response to the Black Death, many monarchs banned the export of food, as well as prohibiting black marketeering. Populations tended to place more trust in local authorities for such basic needs as food, clean water, clothing, burial services, and such medical care as it existed. Some local authorities established plague hospitals, constructed lazarettos (quarantine housing), established “cordons sanitaires,” closed borders, and required the wearing of masks. Some local leaders established a network of intelligence agents to warn their governments of plague outbreaks and surges in other countries. The decisive actions of the Doge of Venice to quarantine arriving ship crews and create public health boards, the sealing off of Milan by the ruling Visconti council, and even the armed outlaws who guarded Bristol, England from those who may have been infected all tended to place increased public trust in their local governing authorities.
In Africa, populations living along the Nile River, where the plague was introduced by slaves and Arab traders, abandoned their river towns, including Asyut, and fled to remote areas up the Nile to escape the pandemic. The Arab scholar and historian, Ibn Khaldun, wrote that a spirit of “asabiyya” protected some North Africans from the plague. He defined “asabiyya” as a communal attachment to the land, whether it was the Sahara Desert or the Atlas Mountains. Ibn Khaldun points out that self-sufficiency and a shared commitment to the tribe is what saved to Bedouin and Sanhaja of the Sahara and the Berbers in the Atlas mountain range. The same degree of self-sufficiency and independence was seen in parts of Belgium, Switzerland, Bohemia, and Poland, as well as city-states in the Bight of Benin in West Africa that owed their allegiance to the Yoruba kingdom of Ijebu. They represented places where the Black Death had little to no impact.
We see the same reliance today on local authorities. Governors of states of the United States, Brazil, and Mexico are heeded by the populace over central government leaders. Regional groupings of American states – in the Northeast, Midwest, and West Coast – have stepped up to handle Covid-19 policy in the absence of any clear direction from the Trump administration. This support for local government is seen in polling that shows that 59 percent of Americans rate the Covid response by their local governments “excellent” or “good.” The numbers dramatically decrease when asked about the Trump administration’s response.
The same appreciation for local and state authorities exists in India. At the end of April 2020, the states of Goa, Sikkim, Nagaland, Arunachal Pradesh, Manipur, and Tripura were declared Covid-19 free. These and other Indian states that see a decrease in Covid infections will make every attempt to keep it that way. In India and other nations, internal border controls, health checks for travelers, increased local police authorities, and other measures may become permanent. And with such local and regional control will come a popular insistence on a devolution of other powers to state and local control, including public health, taxation, commerce, residency permits, and other functions.
The “asabiyya” concept of self-sufficiency to guard against repeat phases of Covid-19 and other pandemics may eventually lead to the formation, or re-formation in some cases, of the independent city-state and other polities that would have as their first priority the health safety and security of their compact populations, whether they are urbanized areas like Hong Kong, Singapore, Dubai, Venice, Barcelona, New York City, London, Gaza, Aden, Labuan, Sao Paulo, Istanbul, Mumbai, Karachi, Bangkok, Saigon, Shanghai, and Lagos or distinct regions and territories like the Basque country (which succeeded in surviving the Black Death virtually unscathed), Scotland, Kerala, Flanders, Puerto Rico, Sarawak, Sabah, American Samoa, Zanzibar, and Mindanao.
The activities of the Baltic trading bloc, the Hanseatic League, were largely suspended during the Black Death of the 14th century. We are already witnessing the suspension of certain activities of the European Union. Although the Hanseatic League existed on paper until the 19th century, the European Union may follow in its footsteps and become a mere paper organization, nothing more than a quaint notion but ineffective in a post-pandemic world. It is also noteworthy that the economies of Hanseatic League and Italian maritime republics, including Lubeck, Hamburg, Danzig, Amsterdam, Venice, Genoa, and Florence, improved more rapidly than national monarchies like France, England, and Spain in the aftermath of the Black Death.
Just as the Black Death altered the course of world history, so too might Covid-19. There are some 5000 geographic areas inhabited by homogenous peoples. If they decide that they will no longer be placed at the end of the line to receive medical and other assistance during a pandemic from their central governments, they may opt to go it alone.
- Why China's Move To Test 11 Million Wuhan Residents Could Set Off Firestorm In US
Why China’s Move To Test 11 Million Wuhan Residents Could Set Off Firestorm In US
Tyler Durden
Thu, 05/14/2020 – 01:00After six new cases in the past days popped in Wuhan, despite health officials thinking corovavirus was finally eradicated in the place of its origin, authorities say they are planning to undertake the hugely ambitious task of testing all of the city’s eleven million residents starting in about a week.
It will mark the first mass testing of its scale to be carried out anywhere, with scientists and governments across the globe sure to be interested in the data it produces, given it could portend second wave ‘flare-ups’ in other countries, should the results show more than expected are still being infected in Wuhan.
The six new cases reported Sunday and Monday were the first since the city’s strict lockdown was finally opened. The nightmare scenario is that Wuhan could again be impacted by ‘resurgent’ flare-up clusters.
Via AFP City districts have been ordered to draw up ground level data and a plan needed to test all residents in their area, to be submitted within ten days.
As Bloomberg writes, the drastic and herculean effort that will be involved is driven by fears in Beijing they could be dealing with a serious stealth resurgence of the virus:
The ambitious move to test everyone in Wuhan reflects China’s anxiety over a resurgence of the epidemic, which it managed to stamp out through draconian restrictions that locked down hundreds of millions of people at its peak in February. Wuhan was sealed off from Jan. 23 until April 8 in a months-long ordeal that saw scores die as the local health system collapsed.
Should it be the case that new large clusters are found as a result of the mass test push, it will no doubt spark a deeply pessimistic outlook for Europe, Russia and the United States.
Looking across the Yangtze River in Wuhan, AFP via Getty. Currently the United States, Russia, and the United Kingdom lead the world in confirmed COVID-19 cases, with the European countries of Spain, Italy, France, and Germany following. Economies have been decimated in the resulting meantime pandemic “pause” – and lingering uncertainty over just how long economic shutdowns will last.
The Wuhan data, which could possibly start to produce results in as little as weeks or a month, could spark a firestorm of controversy surrounding the already sensitive debate on reopening in the West.
In short newly uncovered clusters in Wuhan would give leverage to those politicians and state governors in the US pushing to extend lockdown orders, at a key moment the White House is hoping for a national loosening up of business closures and public restrictions. This also at a time states are increasingly clashing with federal policies for opening back up.
Some recently published controversial scientific models and forecasts designate that many states shouldn’t even start opening until mid to late July. For each side, the Wuhan data will likely tip the scales of the debate, either in the optimistic or pessimistic direction.
- The Worst Is Yet To Come: Contact-Tracing, Immunity-Cards, & Mass-Testing
The Worst Is Yet To Come: Contact-Tracing, Immunity-Cards, & Mass-Testing
Tyler Durden
Thu, 05/14/2020 – 00:05Authored by John Whitehead via The Rutherford Institute,
“The things we were worried would happen are happening.”
– Angus Johnston, professor at the City University of New York
No one is safe.
No one is immune.
No one gets spared the anguish, fear and heartache of living under the shadow of an authoritarian police state.
That’s the message being broadcast 24/7 with every new piece of government propaganda, every new law that criminalizes otherwise lawful activity, every new policeman on the beat, every new surveillance camera casting a watchful eye, every sensationalist news story that titillates and distracts, every new prison or detention center built to house troublemakers and other undesirables, every new court ruling that gives government agents a green light to strip and steal and rape and ravage the citizenry, every school that opts to indoctrinate rather than educate, and every new justification for why Americans should comply with the government’s attempts to trample the Constitution underfoot.
Yes, COVID-19 has taken a significant toll on the nation emotionally, physically, and economically, but there are still greater dangers on the horizon.
As long as “we the people” continue to allow the government to trample our rights in the so-called name of national security, things will get worse, not better.
It’s already worse.
Now there’s talk of mass testing for COVID-19 antibodies, screening checkpoints, contact tracing, immunity passports to allow those who have recovered from the virus to move around more freely, and snitch tip lines for reporting “rule breakers” to the authorities.
If you can’t read the writing on the wall, you need to pay better attention.
These may seem like small, necessary steps in the war against the COVID-19 virus, but they’re only necessary to the police state in its efforts to further undermine the Constitution, extend its control over the populace, and feed its insatiable appetite for ever-greater powers.
Nothing is ever as simple as the government claims it is.
Whatever dangerous practices you allow the government to carry out now—whether it’s in the name of national security or protecting America’s borders or making America healthy again—rest assured, these same practices can and will be used against you when the government decides to set its sights on you.
The war on drugs turned out to be a war on the American people, waged with SWAT teams and militarized police.
The war on terror turned out to be a war on the American people, waged with warrantless surveillance and indefinite detention.
The war on immigration turned out to be a war on the American people, waged with roving government agents demanding “papers, please.”
This war on COVID-19 will be yet another war on the American people, waged with all of the surveillance weaponry at the government’s disposal: thermal imaging cameras, drones, contact tracing, biometric databases, etc.
So you see, when you talk about empowering government agents to screen the populace in order to control and prevent spread of this virus, what you’re really talking about is creating a society in which ID cards, round ups, checkpoints and detention centers become routine weapons used by the government to control and suppress the populace, no matter the threat.
This is also how you pave the way for a national identification system of epic proportions.
Imagine it: a national classification system that not only categorizes you according to your health status but also allows the government to sort you in a hundred other ways: by gender, orientation, wealth, medical condition, religious beliefs, political viewpoint, legal status, etc.
Are you starting to get the bigger picture yet?
This is just another wolf in sheep’s clothing, a “show me your papers” scheme disguised as a means of fighting a virus.
Don’t fall for it.
The ramifications of such a “show me your papers” society in which government officials are empowered to stop individuals, demand they identify themselves, and subject them to patdowns, warrantless screenings, searches, and interrogations are beyond chilling.
By allowing government agents to establish a litmus test for individuals to be able to exit a state of lockdown and engage in commerce, movement and any other right that corresponds to life in a supposedly free society, it lays the groundwork for a society in which you are required to identify yourself at any time to any government worker who demands it for any reason.
Such tactics quickly lead one down a slippery slope that ends with government agents empowered to force anyone and everyone to prove they are in compliance with every statute and regulation on the books.
It used to be that unless police had a reasonable suspicion that a person was guilty of wrongdoing, they had no legal authority to stop the person and require identification. In other words, “we the people” had the right to come and go as we please without the fear of being questioned by police or forced to identify ourselves.
Unfortunately, in this age of COVID-19, that unrestricted right to move about freely is being pitted against the government’s power to lock down communities at a moment’s notice. And in this tug-of-war between individual freedoms and government power, “we the people” have been on the losing end of the deal.
Curiously enough, these COVID-19 restrictions dovetail conveniently with a national timeline for states to comply with the Real ID Act, which imposes federal standards on identity documents such as state drivers’ licenses, a prelude to this national identification system.
Talk about a perfect storm for bringing about a national ID card, the ultimate human tracking device.
Granted, in the absence of a national ID card, which would make the police state’s task of monitoring, tracking and singling out individual suspects far simpler, “we the people” are already tracked in a myriad of ways: through our state driver’s licenses, Social Security numbers, bank accounts, purchases and electronic transactions; by way of our correspondence and communication devices—email, phone calls and mobile phones; through chips implanted in our vehicles, identification documents, even our clothing.
Add to this the fact that businesses, schools and other facilities are relying more and more on fingerprints and facial recognition to identify us. All the while, data companies such as Acxiom are capturing vast caches of personal information to help airports, retailers, police and other government authorities instantly determine whether someone is the person he or she claims to be.
This informational glut—used to great advantage by both the government and corporate sectors—has converged into a mandate for “an internal passport,” a.k.a., a national ID card that would store information as basic as a person’s name, birth date and place of birth, as well as private information, including a Social Security number, fingerprint, retinal scan and personal, criminal and financial records.
A federalized, computerized, cross-referenced, databased system of identification policed by government agents would be the final nail in the coffin for privacy (not to mention a logistical security nightmare that would leave Americans even more vulnerable to every hacker in the cybersphere).
Americans have always resisted adopting a national ID card for good reason: it gives the government and its agents the ultimate power to target, track and terrorize the populace according to the government’s own nefarious purposes.
National ID card systems have been used before, by other oppressive governments, in the name of national security, invariably with horrifying results.
For instance, in Germany, the Nazis required all Jews to carry special stamped ID cards for travel within the country. A prelude to the yellow Star of David badges, these stamped cards were instrumental in identifying Jews for deportation to death camps in Poland.
Author Raul Hilberg summarizes the impact that such a system had on the Jews:
The whole identification system, with its personal documents, specially assigned names, and conspicuous tagging in public, was a powerful weapon in the hands of the police. First, the system was an auxiliary device that facilitated the enforcement of residence and movement restrictions. Second, it was an independent control measure in that it enabled the police to pick up any Jew, anywhere, anytime. Third, and perhaps most important, identification had a paralyzing effect on its victims.
In South Africa during apartheid, pass books were used to regulate the movement of black citizens and segregate the population. The Pass Laws Act of 1952 stipulated where, when and for how long a black African could remain in certain areas. Any government employee could strike out entries, which cancelled the permission to remain in an area. A pass book that did not have a valid entry resulted in the arrest and imprisonment of the bearer.
Identity cards played a crucial role in the genocide of the Tutsis in the central African country of Rwanda. The assault, carried out by extremist Hutu militia groups, lasted around 100 days and resulted in close to a million deaths. While the ID cards were not a precondition to the genocide, they were a facilitating factor. Once the genocide began, the production of an identity card with the designation “Tutsi” spelled a death sentence at any roadblock.
Identity cards have also helped oppressive regimes carry out eliminationist policies such as mass expulsion, forced relocation and group denationalization. Through the use of identity cards, Ethiopian authorities were able to identify people with Eritrean affiliation during the mass expulsion of 1998. The Vietnamese government was able to locate ethnic Chinese more easily during their 1978-79 expulsion. The USSR used identity cards to force the relocation of ethnic Koreans (1937), Volga Germans (1941), Kamyks and Karachai (1943), Crimean Tartars, Meshkhetian Turks, Chechens, Ingush and Balkars (1944) and ethnic Greeks (1949). And ethnic Vietnamese were identified for group denationalization through identity cards in Cambodia in 1993, as were the Kurds in Syria in 1962.
And in the United States, post-9/11, more than 750 Muslim men were rounded up on the basis of their religion and ethnicity and detained for up to eight months. Their experiences echo those of 120,000 Japanese-Americans who were similarly detained 75 years ago following the attack on Pearl Harbor.
Despite a belated apology and monetary issuance by the U.S. government, the U.S. Supreme Court has yet to declare such a practice illegal. Moreover, laws such as the National Defense Authorization Act (NDAA) empower the government to arrest and detain indefinitely anyone they “suspect” of being an enemy of the state.
You see, you may be innocent of wrongdoing now, but when the standard for innocence is set by the government, no one is safe.
Everyone is a suspect.
And anyone can be a criminal when it’s the government determining what is a crime.
It’s no longer a matter of if, but when.
Remember, the police state does not discriminate.
At some point, it will not matter whether your skin is black or yellow or brown or white. It will not matter whether you’re an immigrant or a citizen. It will not matter whether you’re rich or poor. It won’t even matter whether you’re driving, flying or walking.
After all, government-issued bullets will kill you just as easily whether you’re a law-abiding citizen or a hardened criminal. Government jails will hold you just as easily whether you’ve obeyed every law or broken a dozen. And whether or not you’ve done anything wrong, government agents will treat you like a suspect simply because they have been trained to view and treat everyone like potential criminals.
Eventually, when the police state has turned that final screw and slammed that final door, all that will matter is whether some government agent—poorly trained, utterly ignorant and dismissive of the Constitution, way too hyped up on the power of their badges, and authorized to detain, search, interrogate, threaten and generally harass anyone they see fit—chooses to single you out for special treatment.
We’ve been having this same debate about the perils of government overreach for the past 50-plus years, and still we don’t seem to learn, or if we learn, we learn too late.
All of the excessive, abusive tactics employed by the government today—warrantless surveillance, stop and frisk searches, SWAT team raids, roadside strip searches, asset forfeiture schemes, private prisons, indefinite detention, militarized police, etc.—started out as a seemingly well-meaning plan to address some problem in society that needed a little extra help.
Be careful what you wish for: you will get more than you bargained for, especially when the government’s involved.
In the case of a national identification system, it might start off as a means of tracking COVID-19 cases in order to “safely” re-open the nation, but it will end up as a means of controlling the American people.
For those tempted to justify these draconian measures for whatever reason – for the sake of their health, the economy, or national security – remember, you can’t have it both ways.
You can’t live in a constitutional republic if you allow the government to act like a police state.
You can’t claim to value freedom if you allow the government to operate like a dictatorship.
You can’t expect to have your rights respected if you allow the government to treat whomever it pleases with disrespect and an utter disregard for the rule of law.
As I make clear in my book Battlefield America: The War on the American People, if you’re inclined to advance this double standard because you believe you have done nothing wrong and have nothing to hide, beware: there’s always a boomerang effect.
- New York Times Is Getting A Jump Start On Spreading COVID-19 "Anti-Vaxx" Hysteria
New York Times Is Getting A Jump Start On Spreading COVID-19 “Anti-Vaxx” Hysteria
Tyler Durden
Wed, 05/13/2020 – 23:45The coronavirus vaccine is still – according to the most optimistic projections provided by Dr. Anthony Fauci – at least 18 months away (Dr. Fauci reaffirmed during yesterday’s Senate testimony the expected timeline for a vaccine is 18-24 months, or longer). But the New York Times is getting a jump on stirring up the anti- ‘anti-vax’ hysteria that some of its most dedicated readers – super-uptight, Brooklyn-based, professional class, simps for former Deadspin staffers – simply love to hate.
Anti-vaxxers inspire a singularly intense horror in the liberal imagination. While the NYT loves to pin the ‘explosion’ in the movement’s popularity to ‘far-right’ hucksters, some of the worst outbreaks in recent years – for example: last year’s measles outbreak – took hold in the ultra-orthodox Jewish communities of New York State and the surrounding area, not the communities of ‘right-wing extremists’ living in Idaho and other states in the west and south. However, like the old saying goes, “Nazis sell newspapers”. NYT editors closely track which topics its readers love, and thinly sourced “news analysis” about the threat to society posed by the anti-vaccine movement in the age of COVID-19 is easy and cheap to produce.
In a Wednesday column written by popular author and magazine writer Kevin Roose, the paper dares to ask: “What if we get a Covid-19 vaccine and half the country refuses to take it?”
The viral popularity of “Plandemic”, a factually dubious documentary about a former colleague of Dr. Fauci who clearly has an axe to grind against him, is alarming, Roose says, and certainly justifies such an extreme conclusion.
To this, we’d argue that repeatedly trying to delete the video to appease far-left tastemakers who are out of step with the American body politic only made viewers more eager to seek it out and watch. And as far as the risk of half the country refusing the vaccine, vaccination rates for MMR, a vaccine that is the subject of concentrated ire from the anti vaxxers, are still above 90% in the US.
Plus, if you and your loved ones get vaccinated, shouldn’t you have nothing to worry about? (unless, of course, the vaccines prove ineffective with some/all patients, in which case we’d have a bigger problem to worry about).
But Roose cites three supporting pillars for his argument that the anti-vaxx movement has been “waiting” for COVID-19 like a panther in the tall grass, waiting to pounce and spread its anti-science maliciousness across the globe in an evil scheme to wipe out humanity, or whatever.
First: the fast-tracked approval process.
First, because of the pandemic’s urgency, any promising Covid-19 vaccine is likely to be fast-tracked through the testing and approval process. It may not go through years of clinical trials and careful studies of possible long-term side effects, the way other drugs do. That could create an opening for anti-vaccine activists to claim that it is untested and dangerous, and to spin reasonable concerns about the vaccine into widespread, unfounded fears about its safety.
According to the Milken Institute, more than 130 projects to find a vaccine are underway around the world. Though vaccines will receive expedited approval, any mass-produced vaccine will be subjected to intense, global scrutiny.
Second: The Bill Gates Foundation will inevitably be involved with distributing the vaccine.
Second, if a vaccine does emerge, there is a good chance that leading health organizations like the Bill and Melinda Gates Foundation or the World Health Organization will have a hand in producing or distributing it. If that’s the case, anti-vaccine activists, who have been crusading against these groups for years, will have plenty of material stockpiled to try to discredit them. They are already taking aim at Mr. Gates with baseless conspiracy theories claiming that he created and is trying to profit from the virus. These theories will be amplified, and the attempts to discredit leading virus research efforts will intensify as the vaccine nears.
That’s probably true – but the Gates Foundation and WHO typically focus their efforts on developing economies that don’t have the immense resources that the US has.
And third: if vaccination is required for air travel, school enrollment and other activities, the backlash might be intense.
Third, if and when a Covid-19 vaccine is approved for widespread use, people may be required to take it before being allowed to fly on certain airlines, attend certain schools or enter certain businesses. That’s a good idea, public health-wise, but it would play into some of the worst fears of the anti-vaccine movement.
Mandatory vaccination has been an especially potent talking point for anti-vaccine activists, some of whom have rebranded themselves “pro-choice” when it comes to vaccines. And years of battling states and school districts over mandatory vaccine policies have given them a playbook for creating a tangle of legal roadblocks and damaging publicity campaigns.
Most school districts already require students to receive a battery of vaccines, which is one reason vaccination rates are so high in the US. There’s little reason to believe that things will be different here. After all, polls suggest that the majority of Americans are afraid of catching the virus and will take steps independent of the government to protect themselves and their families.
There will inevitably be those who refuse the vaccine because they’re paranoid about the long-term consequences. And the reality is, even scientists admit that the only way to be certain about the long-term affects of any given vaccine or treatment is experience, especially if they live in a more rural setting. Is that really so wrong?
But the aggression on the part of public officials is already starting: In Washington, Gov. Jay Inslee warned Wednesday that COVID-test-refusers wouldn’t be allowed into the state’s grocery stores.
Of course, that’s just the start, as restrictions on test-deniers will inevitably be expanded to vaccine-deniers.
- The "See-No-Evil" Phase of Russiagate
The “See-No-Evil” Phase of Russiagate
Tyler Durden
Wed, 05/13/2020 – 23:25Authored by Patrick Lawrence via ConsortiumNews.com,
The media spinfest following the collapse of this conspiracy theory suggests our troubled republic simply cannot accept its errors, leaving us unable to learn from them.
The long, destructive conspiracy theory known as Russiagate, the mother of them all, at last evaporates into thin air. No shred of it remains as of back-to-back disclosures over the past couple of weeks. Where does this leave us? What is to come of this momentous turn of events?
Among those not inclined toward hysteria or copious quaffs of Democratic Party Kool–Aid, it has long been a question how those who concocted and sustained the tales of Russian “meddling,” “collusion,” and mail hackery would manage their embarrassment — not to mention their potential legal liabilities — once their edifice-built-on-sand collapsed, as it was destined from the first to do.
The early signs are as some predicted: They will slither quietly off the stage without comment, they will deny their incessant, ever-vehement accusations, they will profess to weariness, they will insist there are more important things to think about now.
Here is a tweet from one Bob F published Saturday. Our Bob touches nearly all of the above-noted bases. His mentions of Matt Taibbi, Aaron Maté, and Jimmy Dore reference two journalists and a talk-show host who identified the fraud from the first and had the scruples not to surrender to the liberal totalitarianism we have suffered these past three years:
ok ok ok ok @aaronjmate and @jimmy_dore got one thing right in their lives. Can we move on from this shiny object that is Russiagate? Trump and the Republicans are looting this country. We could be very close to armed revolt. But let’s talk more about Russia Russia Russia.
— Bob F (@BobF_666) May 9, 2020
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Yes, Bob, lets. This is a brilliant specimen of the flaccid cowardice we’re now to witness many times over. Reassuringly enough, a modest twitter storm followed. Here is a reply from Kathy Woods, a consistently insightful commentator in Twitterland:
Move on? Hell no! I can’t stand Trump, but the Dems used the levers of the security state to perpetrate a fraud. They buried progressive momentum and brought us to the brink w/ Russia. It’s essential we completely expose this.
— Kathy Woods (@woods_kathy) May 10, 2020
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For good measure, here is another response to Big Bob, this one addressing his implicit assertion of Democratic Party virtue in the Age of Trump:
A) liberals never stopped russiagating so obviously it needs to continue to be debunked.
B) if you think the Democrats are not equally to blame for the looting, I got a bridge to sell you.
— David Warschauer🌻🦺🏴⏳ (@rogersmithbigo) May 9, 2020
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There is anger abroad as Russiagate finally unwinds, plainly. This is an excellent thing. And Ms. Woods is right: It is important to make the sun shine on what became, before the end, a scandal of historic proportions. There is a chance of achieving the “complete exposure” Woods asks for, but it remains a question, as of now, whether this will come to pass.
Two weeks ago the Justice Department made public documents showing that when, in January 2017, prosecutors wanted to close the collusion case against Michael Flynn, who briefly served as President Donald Trump’s national security advisor, because they found “no derogatory information” against him, Peter Strzok, the philandering F.B.I. agent later found to be shaping an “insurance policy” against a Trump victory in the 2016 election, cajoled them into keeping it open — absence of evidence be damned.
Two Other Developments
Adam Schiff. (DonkeyHotey caricature via Flickr)
The Strzok revelations turned out to be prelude to the two other developments further demolishing the Russiagate narrative. Last Thursday Justice finally dropped its case against Flynn altogether. We now know he was the victim of a perjury trap when questioned about his contacts with Sergey Kislyak, Moscow’s ambassador to Washington in 2016. “Get him to lie so we can prosecute him,” was the FBI’s directive.
Yet worse, Flynn’s guilty plea was in response to prosecutors’ threats to indict his son if he pled otherwise. Tell me the difference, please, between this kind of stuff and the treatment of the accused in the postwar show trials in Eastern Europe.
On the same day the Justice Department dropped the charges against Flynn, the House Intelligence Committee released documents showing that the FBI had no evidence that Russia pilfered the Democratic National Committee’s email archives by hacking into its servers in mid–2016. The FBI had none because CrowdStrike, the patently corrupt cyber-security firm on which it (inexplicably) relied, never gave it any: It had none, either — contrary to its many claims otherwise.
The taker of cake here is that the documents also show that the House Intelligence Committee, chaired by the inimitable (thank goodness) Adam Schiff, knew there were no grounds to allege Russian involvement in what wasn’t a hack by anyone, but a leak, probably by someone with direct access to the DNC’s servers.
My Consortium News colleague Ray McGovern has just detailed the collapse of the “Russians-hacked-it” ruse.
No evidence anywhere along the line of collusion, none of Russians stealing mail. There is a simpler way to put this: No Russiagate.
In truth, there has been evidence aplenty of the Russiagate fraud for some time, due in part to the researches of Veteran Intelligence Professionals for Sanity, VIPS, of which McGovern is a principal. The problem has been to secure official acknowledgement of three years’ worth of wrongdoing. We now have it, even if it arrives with no admission whatsoever of responsibility.
Enter Perception Management
(PIxabay)
Now come the lies, the dissembling, and the media’s “perception management.” Tucker Carlson, the Fox News presenter, offered a funny-but-not-funny catalog of the liars who now stand exposed, none more thoroughly than the egregious Schiff, who ought to resign over this, and Evelyn Farkas, another Obama-era holdover with absolutely no regard for the truth. Loretta Lynch, Obama’s A–G, will also have things to answer for, assuming answers for her misconduct are required of her.
Among the press and broadcasters, it has been a spinfest this past week — led, naturally, by The New York Times, given no one in the media dares venture a syllable for which the Times has not signaled prior approval. The paper’s report on the dismissal of the Flynn case marked the judgment down as “the latest example of Attorney General William P. Barr’s efforts to chisel away at the results of the Russia investigation.” I lost count of the mentions of Flynn’s “lying” and “guilty plea” after nine. No reference to the perjury trap set for Flynn, or the threat to indict his son.
The Times ran two further pieces hatcheting Flynn and Barr in Saturday’s editions, here and here, and a straight-out character assassination of Flynn on Sunday, casting him as some kind of pathological split personality. The Gray Lady doth protest too much, in my view.
The press vastly over-invested in the Russiagate narrative from the first, and now appears set to throw yet more money after all the bad. This is not a good sign. It suggests that our troubled republic simply cannot accept its errors, leaving us unable to learn from them. This is why America in its post-democratic phase cannot self-correct. It is why we have no assurance that another Russiagate, in whatever form, will not be visited upon us.
“Attorney General William P. Barr’s efforts to chisel away at the results of the Russia investigation”? Absolutely. We have to hope he gets somewhere. Committed Russiagaters now take to charging that Barr is corrupting an otherwise snow-white Justice Department. Say what? Given all we now know, this starts to tip into the zone of black humor.
Barr and his investigators are fully armed as of last week. They have all they need to get to the bottom of this dark ocean. They have it in their power to bring to justice the three architects of the Russiagate scam when it was in motion — ex–C.I.A. Director John Brennan, ex–Director of National Intelligence James Clapper, ex–F.B.I. Director James Comey — for what amounted to an attempt to depose a president in a bloodless coup. These are the Democratic Party’s answer to former President Richard Nixon’s infamous “plumbers,” if you ask me.
Whether Barr and his investigators get the task done is to a great extent a matter of politics and bureaucratic warfare that will at best be partially visible to us in coming months. It is a question of how far he will be permitted to go.
Succeed or fail, the record is at least and at last straight.
- Visualizing Where COVID-19 Is Rising And Falling Around The World
Visualizing Where COVID-19 Is Rising And Falling Around The World
Tyler Durden
Wed, 05/13/2020 – 23:05It’s been just over two months since New York declared a state of emergency, and global stock markets were hammered as the fears of a full-blown crisis began to take hold.
Since then, we’ve seen detailed, daily coronavirus coverage in most of the major news outlets, and Visual Capitalist’s Nick Routley notes, with such a wealth of information available, it can be hard to keep track of the big picture of what’s happening around the world.
Today’s graphic, adapted from Information is Beautiful, is an efficient look at where the virus is fading away, and where new infection hotspots are emerging.
The Ebb and Flow of Coronavirus Cases
First, the good news: the number of new confirmed COVID-19 cases has started to level off on a global basis. This metric was rising rapidly until the beginning of April — but since then, it has plateaued and is holding steady (for now).
Of course, the global total doesn’t tell the whole story. Different countries, and even regions within countries, are in very different phases of dealing with the pandemic.
Let’s look at the current situation around the world.
New Cases: Falling
Many of the countries that experienced early outbreaks of COVID-19 are now seeing a drop-off in the number of new cases.
Italy, which experienced one of the most severe outbreaks, is finally emerging from the world’s longest nationwide lockdown. Switzerland and the Netherlands both had some of the highest confirmed case rates per capita, but are now in better situations as fresh cases drop off.
The narrow, pointy curves exhibited by New Zealand and Austria give us an indication of where containment measures were successful at curbing the spread of the virus. This type of pronounced curve is less common, and is generally seen in nations with smaller populations.
New Cases: Leveling Off
For many of the world’s major economies, containing the spread of the virus has proven exceptionally difficult. Despite increased testing and lockdown measures, the United States still has one of the steepest infection trajectory curves. The UK also has a very similar new case curve.
Even as countries’ curves begin to flatten and level off, there is still a danger of new flare-ups of the virus – as is now the case in South Korea and China. Even in Singapore, which saw early success in containing the virus, is experiencing a rise in new COVID-19 cases.
New Cases: Rising
Some countries – particularly developing economies – are only in the beginning stages of facing COVID-19’s rapid spread. This is a cause for concern, as many of the countries with steeply rising curves have larger populations and fewer resources to deal with a pandemic.
In late March, as the virus was spreading rapidly through Europe, Russia appeared to have avoided an outbreak within its borders. Today, however, that situation is much different. Russia has the world’s steepest infection trajectory curve, with the number of cases on a course to double roughly every five days.
The countries in the image above have a combined population of 2.8 billion people, so as COVID-19 continues to spread through those countries, the eyes of the world will be watching.
- "We Were In A Headless-Chicken Phase": NYTimes Reporter Rebuked For Anti-Trump Tirade On CNN
“We Were In A Headless-Chicken Phase”: NYTimes Reporter Rebuked For Anti-Trump Tirade On CNN
Tyler Durden
Wed, 05/13/2020 – 22:45The New York Times’s Science and Health reporter, Donald McNeil Jr. is under fire for a tirade against President Donald Trump, Vice President Mike Pence and others in an interview on CNN. The comments were so political that the paper itself issued a rebuke and told McNeil to stick with science in the future.
McNeil’s statement that “we were in a headless-chicken phase” could as easily describe the status of journalistic ethics.
McNeil’s comments were made in an interview with CNN International’s Christiane Amanpour, who I previously criticized for a shocking call to silence Trump by declaring his speeches criminal “hate speech.”
In the interview, McNeil called for firings over how “we completely blew it” in responding to the virus:
“We were in a headless-chicken phase, and yes, it’s the president’s fault, it is not China’s fault. You know, the head of the Chinese CDC was on the phone to Robert Redfield on Jan. 1, again on Jan. 8, and the two agencies were talking on Jan. 19. The Chinese had a test on Jan. 13; the Germans had a test on Jan. 16. We fiddled around for two months, we had a test on March 5 and it didn’t work. We didn’t have 10,000 people tested until March 15.”
He went on to lambast the “incompetent leadership” at the CDC and called for its dirhead ector Dr. Robert Redfield to “resign.” He also attacked President Trump as “the same guy who said inject yourself with disinfectant” and that his “grasp of the science” isn’t even “at a third-grade level.”
In a more serious charge, he claimed “suppression from the top- I mean, the real coverup was the person in this country who was saying, you know, ‘This is not an important virus, the flu is worse, it’s all going to go away, it’s nothing,. And that encouraged everybody around him to say, ‘It’s nothing, it’s nothing, it’s nothing.’”
The Times issued a statement that
“In an interview with Christiane Amanpour today, Donald McNeil, Jr. went too far in expressing his personal views. His editors have discussed the issue with him to reiterate that his job is to report the facts and not to offer his own opinions. We are confident that his reporting on science and medicine for The Times has been scrupulously fair and accurate.”
What is interesting is that Washington Post media critic Erik Wemple criticized McNeil’s comments as outside of the parameters for such interviews, saying “Such activism, after all, is extreme even for a veteran newsman exercising his analytical muscles in a freewheeling cable-news interview,”
However, Wemple then later added his own freewheeling dig at the Administration, attacking Trump’s “unfathomable pronouncements of incompetence, indifference and cluelessness from the president in public appearance after public appearance. What’s an experienced health reporter to say?” The later addendum certainly assuaged those who were upset with the Post for chastising a Trump critic.
If this was a matter of journalistic ethics, why was it necessary to add an effective “well Trump had it coming” statement?
If McNeil strayed outside of the ethical parameters, it does not matter how you view Trump.
The issue is the judgment of the journalist, not the reputation of the President. Wemple’s “justified cause” addendum bulldozed the high ground by taking his own dig at the President. It is like saying that a police officer used excessive force but the suspect was a bad one so “what’s an experienced police officer to do?”
The controversy reflects a frustration that I have expressed over legal analysis. I have been a columnist and legal analyst for decades. Generally, while there were unfortunate outliers, legal analysts tended to be closely tied to legal authority and less partisan. That tradition has been lost in the age of echo-journalism where the ability to appear on many media outlets depends on your willingness to declare Trump or his associates guilty of an ever expanding array of crimes. Legal analysts often feed an insatiable appetite for attacks disguised as analysis under the same relativistic view of “what is an experienced legal analysis to do?”
- Exiled Businessman Exposes Sweeping Chinese 'Disinformation Campaign' On Social Media
Exiled Businessman Exposes Sweeping Chinese ‘Disinformation Campaign’ On Social Media
Tyler Durden
Wed, 05/13/2020 – 22:25Were you surprised by the sheer volume of vitriolic tweets about President Trump’s decision to use the phrase “Chinese virus”? Well, one London-based Chinese businessman/dissident says he has evidence that might explain this phenomenon, and shed some light on how Beijing manipulates social media platforms to exploit and shape public opinion far beyond the borders of the mainland.
China has been using armies of “bot” accounts on platforms like twitter to harass and criticize those who speak out against the Chinese government in Beijing and its handling of the outbreak, and spread disinformation about the origins of the virus that – you guessed it – blame the American military for unleashing the virus in Wuhan.
The dissident said that during the week before last, he identified more than 1,000 bot accounts on Twitter which he believes to be part of a government-backed “Swarm”. He’s also identified dozens of suspicious pages on Facebook.
Between April 25 and May 3, Strick said he identified more than 1,000 accounts on Twitter that were associated with the Chinese disinformation effort, as well as more than 50 different pages on Facebook. He estimated that 300 or 400 new Twitter accounts were joining the network each day, as part of the Chinese campaign.
“The network has evolved and is still growing,” said Strick, in an interview. “I believe it’s a state-backed Chinese campaign.”
Strick said his research is just the latest to highlight one aspect of China’s sweeping propaganda campaign to rewrite history as far as the virus is concerned. Yet, liberals who complain constantly about Fox News brainwashing are acting as the CCP’s “useful idiots” by amplifying these fake voices.
Strick’s work is the latest research suggesting China has ramped up disinformation around the coronavirus, to dilute their own culpability and shift blame elsewhere, although some have cast doubt on certain findings or suggested they may warrant further investigation.
In research published last week on the investigative website Bellingcat, Strick described the operation as a “well-structured information campaign” that was working in a coordinated way “to skew the narrative around varying topics, and to push set agendas.”
The operation bears some of the same hallmarks as a network of 900 accounts that Twitter uncovered in August last year, which the company identified as “a significant state-backed information operation focused on the situation in Hong Kong,” operated from mainland China.
And get this: A cybersecurity analyst quoted by BBG said the spam bot campaigns resembled the MO of an infamous Beijing-backed group known in the industry as “Spamouflague Dragon”.
Ben Nimmo, director of investigations at Graphika Inc., said the accounts identified by Strick appeared to be linked to a network known as “Spamouflage Dragon,” which was previously identified promoting attacks on Hong Kong protesters by using hijacked and fake accounts on YouTube, Twitter, and Facebook.
In a September 2019 report, Graphika described Spamouflague Dragon as “an active and prolific, but ultimately low-impact, cross-platform political spam network,” whose actions “appeared designed to support the Chinese government and discredit its critics, both at home and abroad.”
For what it’s worth, China’s Foreign Ministry dismissed the claims as “unfounded” (shocker), and Twitter affirmed that while it’s working tirelessly to crack down on these malicious, foreign-influence-spreading bots, the company is preoccupied right now with silencing conservative voices.
China’s Ministry of Foreign Affairs on Wednesday called reports of a Chinese disinformation campaign “completely unfounded.”
“China opposes disinformation,” ministry spokesman Zhao Lijian told reporters at a regular briefing in Beijing. “As to Chinese officials opening accounts on Twitter and other social media platforms, the purpose is to better communicate with the world and introduce China’s situation and policies. We want to strengthen communication and exchange with the outside world to enhance our mutual understanding.”
A Twitter Inc. spokesperson said in a statement that it was working to “pro-actively monitor” the platform “to identify attempts at platform manipulation and mitigate them.”“If we identify information campaigns on our service that we can reliably attribute to state-backed activity either domestic or foreign-led, we will disclose them,” the spokesperson said.
Facebook Inc. didn’t respond to a request for comment.
Strick said many of the accounts were focused on attacking Guo Wengui, an exiled Chinese businessman, now based in the U.S., who is a fierce critic of the ruling Communist Party government. The accounts were also promoting baseless claims linking vaping and Covid-19, as well as amplifying conspiracy theories about biosecurity incidents in the U.S. under the hashtags #coronavirus and #TruthAboutCovid.
The accounts also promoted content that included criticism of pro-democracy protesters in Hong Kong.
Many of the accounts on Twitter, he said, had Chinese names and posted content in both English and Chinese, while other accounts in the network used Russian account names written in the Cyrillic alphabet, possibly to deflect attribution of the accounts away from China.
On May 8, the U.S. State Department’s Global Engagement Center said it had identified “a new network of inauthentic accounts” on Twitter, which it said we “created with the intent to amplify Chinese propaganda and disinformation.” It isn’t clear if the accounts were the same ones identified by Strick.
Want to learn more about how to spot a bot? For regular users of social media, the process should be fairly easy, but many still mistake bots for humans (that’s why they’re still effective). Strick offers some advice above on how to spot a bot.
But we suspect that as we get closer to election day, this “inference” from China (which hasn’t generated anywhere near the outcry that the (now proven to be total bs) ‘Russia collusion’ narrative, you’ll notice) will become even more widespread.
- The COVID-19 Sword Of Damocles
The COVID-19 Sword Of Damocles
Tyler Durden
Wed, 05/13/2020 – 22:05Authored by Robert Weissberg via The Unz Review,
A continuum exists in how to address the Covid-19 virus.
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On one end are those wanting to quickly phase out the lockdown (“a cure worse than the disease”) despite the mounting deaths.
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Opposed are Americans so terrified the that nothing less than total eradication of the virus will suffice.
The first view typically rests on an economic cost/benefit analysis including “human despair” that may be short of death, for example, unemployment induced domestic violence (and see here and here).
The justification for continued draconian measures, at least outside of “hotspots” like New York City is, however, less clear. This rationale is especially questionable given the low odds of catching the diseases and being hospitalized – the most recent pertinent data are 40.4 per 100,000 (but 131.6 for those 65+, a figure comparable for hospitalization rates for the seasonal flu). Moreover, many infected display no symptoms or recover at home so they are statistically invisible so the true infection rate of 40.4 per 100,000 is likely too high.
The mortality rate, the bottom line in assessing risk, is exceedingly complex and, varies as new data are uncovered and past figures are re-calculated. The overall rate is estimated to be 5.84%, but this is highly age-related, varies enormously by state(from 1282.2 per million in New York vs. 12.1 per million in Wyoming) and depends on other health factors such obesity and heart illness Yet, such is the nature of the complicated data, others (including Dr. Anthony Fauci) suggest that the mortality rate may be as low as 1%, a figure still substantially greater than the “normal” seasonal flu. All and all, then, the objective scientific data—the overall low incidence of infection, its selective impact and low death rate of those infected– hardly justifies the type of hysteria in which, for example, a hair salon operator is jailed for conducting business.
What, then, accounts for the frenzy?
Let’s begin by noting that carnage per se does not entirely explain the panic. The super-deadly 1918 Spanish Flu pandemic is well-known but more relevant was the ‘Hong Kong flu” of 1968, a far more lethal pox than today’s Asian import. Though largely forgotten, in 1968, the H3N2 (its technical name) pandemic killed 100,000 Americans (plus a million more worldwide), a figure that exceeds the death toll of both the Vietnam and Korean Wars. Moreover, the US population in 1970 was 209 million versus 330 million today, so adjusted for population the number killed was 136,000. For unclear reasons, however, the 1968 “Hong Kong” flu passed almost unnoticed when it hit, conceivably over-shadowed by the Vietnam war and widespread urban rioting. Closer in time was the epidemic of 1957 that killed 116,000 and the 2009 flu epidemic—H1N1—affected 60.8 million Americans and the estimated death toll was around 12,000.
Part of the explanation for the panic (outside of a few hotspots like New York City and Northern New Jersey) lies in the predictability of deadly infection, not its absolute incidence. The power of controllability to calm fear is well-illustrated by how few Americans ever worried over AIDS once transmission mechanisms were uncovered. Since the HIV/AIDS epidemic exploded in the 1980s, some 700,000 Americans have died of AIDs but few Americans are panicked by the carnage. Escaping AIDs merely entails avoiding dangerous homosexual sex and shooting up drugs, behaviors that nearly Americans readily avoid. Thus understood, safety is guaranteed, so there is no anxiety or depression regardless of HIV/AIDs rates.
This distinction between controllable versus almost random lethality helps explains why highlighting overall US morality statistics fails to calm the panic. For those terrified going to Whole Foods, it makes absolutely no difference if the 2017 death toll from heart illness was 647,457, or, for that matter, 1,000,000 or 10,000,000! Nobody suddenly contracts heart illness by shopping at Whole Foods. Of the ten major causes of death in 2017 tracked by the CDC, the only transmittable one is influenza and pneumonia (55,672 cases in 2017), and even here, potential victims exercise substantial individual controllability via flu shots or seeing a doctor early on.
Covid-19 at least currently is different though, as public health officials insist, it can be mitigated by avoiding crowds, frequent hand washing and wearing masks. But, can such personal actions hardly guarantee given the iffy underlying science. For example, as one recent report from New York City found that two-thirds of those admitted to hospitals were, as per official decree, self-quarantined by staying home. Only a small percentage worked away from home and a tiny number took public transportation, In other words, the official wisdom may have been inaccurate, so who can be trusted?
Potential unknown dangers lurk everywhere even if the actual hazard is exceedingly remote. Yes, you may barricade yourself, wear a Haz-Mat suit and order out meals but the Typhoid Mary delivery person may deposit the virus on the pizza box. Your non-medical grade mask only protects others from you, not vice versa so the infected person who jogs past you in the park may be a killer (and even medical grade face masks can be dangerous counterfeits). You cannot banish a spouse or child, and each might inadvertently bring the pox home. Keep in mind, that it will be months before a cure can be found, and given the millions of possible opportunities for infection, only a single incident can be deadly.
The panic also reflects is the unavailability of the traditional, and most effective solution—escape. Rich Italians during the Renaissance practiced villeggiatura—fleeing the city to a country farm or villa and waiting for the pestilence to subside. Given the frequency of plagues, building isolated rural villas flourished and undoubtedly help calmed frayed nerves.
Alas, hardly possible in today’s travel-friendly world. When the epidemic first appeared, for example, many affluent New Yorkers fled to their seemingly safe vacation homes, but few city residents enjoy this costly option and, more important, the influx could hardly exclude asymptomatic carriers who would then infect escapees. The epidemic’s worldwide ubiquity also precludes easy refuge. An inexpensive Dominican Republic resort is hardly a safe haven–who can guarantee a virus-free staff, and local medical facilities may be inadequate. This physical escape option also assumes that the sanctuary will admit you.
Make no mistake, the carnage is real, tragic and Pollyanna obliviousness is not the cure but, that being said, this is not the apocalypse. Especially troublesome is how sky-high anxiety levels undermine rational cost-benefit public debate. It is easy to understand why those suffering from cabin fever are confused by often uncertain epidemical CDC data. Statistics about the extremely low odds of infection for those under 65 and in decent health are meaningless to habitual lottery players or the innumerate. Terror may be especially likely for that fantasizing ending life as an anonymous corpse rotting in a refrigerated truck in a Queens New York parking lot thanks to briefly encountering a McDonald’s employee.
Though it might bring momentary therapeutic relief, mindlessly lashing out at President Trump for insufficient testing, stockpiling too few ventilators, White House disorganization, recommending drinking Clorox or just “rejecting science” solves nothing.
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- California Inmates Infecting Themselves With COVID-19 In Scheme To Get Released
California Inmates Infecting Themselves With COVID-19 In Scheme To Get Released
Tyler Durden
Wed, 05/13/2020 – 21:45Inmates in Los Angeles County, California are infecting themselves with the Wuhan coronavirus in the hope that they will be released from prison, Sheriff Alex Villanueva revealed during a Monday press conference.
Surveillance footage from the Pitchess Detention Center just north of Santa Clarita shows inmates passing a bottle of hot water around in what Villanueva described as an attempt to both become infected, and raise their body temperature before a nurse takes their temperature in order to fake the illness.
“Under normal circumstances, no one would be doing that anyway, particularly when everyone has the same access to the water. … No one shares this,” said Villanueva. “Now, they’re sharing the hot water and using the same bottle.”
There are roughly 2,000 inmates who have been quarantined at Pitchness, according to SCVTV.
“Everyone has the same symptoms,” said 28-year-old inmate David Lopez, who is serving a two-year sentence for assault. “I was down for four days. I had severe body aches, troubling breathing, sweating profusely with cold sweats, and I didn’t have the energy to get up to even use the restroom,” he said, adding “I have not been tested.”
In other footage noted by Breitbart, inmates can be seen drinking from the same styrofoam cup and sniffing from a mask to try and become infected. They are also ‘deliberately crowding together and not social distancing,’ according to the Sheriff.
That said, “There’s no such thing as social distancing here,” said inmate Rudolph Castro, 46, who is currently awaiting trial to face murder charges. “We’re pretty much packed in here like sardines.”
Castro said the inmates use the same soap, they shower together, line up, sit and eat together, and “everything is really close.” They’ve also been given disinfectant to clean the floors with, but the inmates have said they don’t believe it is enough.
According to at least three inmates within an NCFF dormitory, nearly every single inmate within a 90-man dorm began exhibiting some form of symptoms similar to those related to COVID-19 starting last week. All three said they’ve been experiencing symptoms, but outside of temperature checks and some receiving blood pressure checks, a majority of them remain untested and afraid. –SCVTV
“It’s sad to think that someone deliberately tried to expose themself to [coronavirus],” he said, adding “As a result of this behavior, from this particular modular, 21 inmates tested positive for [coronavirus] in a week of these videos being taken.”
“That is problematic because somehow there was a mistake in belief among the inmate population that if they tested positive that there was a way to force our hand and release more inmates out of our jail environment,” Villanueva added. “And that’s not going to happen.”
- Wisconsin Supreme Court Strikes Down 'Stay At Home' Order; Maryland To Lift Lockdown Friday: Live Updates
Wisconsin Supreme Court Strikes Down ‘Stay At Home’ Order; Maryland To Lift Lockdown Friday: Live Updates
Tyler Durden
Wed, 05/13/2020 – 21:30Summary:
- Wisconsin Supreme Court strikes down Stay at Home order
- Maryland lifts ‘stay at home’ order
- Illinois reports record jump in deaths
- WHO’s Ryan says virus risks becoming ‘endemic’
- Spain says 5% of population infected by the virus
- NJ gov says state will partially reopen Monday
- Washington DC reopening pushed to June 8
- NY reports jump in new cases for first time in 5 days
- NY deaths decrease slightly day-over-day
- US set to extend travel restrictions on Canada & Mexico borders
- UK releases latest figures
- Mexico plans to reopen Monday
- Spain won’t reopen borders to most foreigners until at least July
- VW ‘pauses’ manufacturing of VW Golf, SUVs
- China imposes ‘partial lockdown’ on northeastern border city
- SK’s ‘Itaewon’ cluster climbs to 120
- Germany, Austria agree to reopen mutual border
- Global cases: 4.22 million
- Global deaths: 291,519
- Poland reports record jump in new cases
- Russia sees numbers start to slow after shocking record run of confirmations
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Update (2100ET): Before we call it a night, we’ve seen a couple of important developments Wednesday evening in the US.
In Wisconsin, the state Supreme Court ruled that Gov. Tony Evers stay at home order was unconstitutional. The court ruled it “unconstitutional” and “unenforceable” in what CNN described as a “high-profile win for the state’s Republican-led legislature”. Republican lawmakers filed the court challenge, and have spearheaded an effort to reopen the state more quickly. In a 4-3 decision, the court ruled that Evers and high-level bureaucrats had overstepped their authority.
Tony Evers
The justices wrote in their decision that the state agency that issued the order “cannot confer on itself the power to dictate the lives of law-abiding individuals as comprehensively as the order does without reaching beyond the executive branch’s authority.” Evers ordered Department of Health Services Secretary-designee Andrea Palm – who was personally targeted by the lawsuit, along with other senior state officials – to issue the order.
Evers hasn’t released a statement, but at the time the suit was filed, he tweeted that “Republicans are exploiting a global pandemic to further their attempts to undermine the will of the people. But what’s at stake goes far beyond political power – lives are on the line.”
On Wednesday evening in Maryland, Gov. Larry Hogan announced plans to lift the state’s “stay at home” order and replace it with a “safer at home” order.
The order will be lifted and replaced at 5pmET on Friday, Hogan said, citing a slight decline in hospitalizations state-wide over 2 weeks as justification for the decision under the federal guidelines.
The “Safer at Home” advisory, which will not be enforced by the rule of law, allows manufacturing, retail, haircuts and worship services to resume with limitations. Though the fight against the virus is “far from over,” Hogan said the state “can now at least begin to slowly recover,” he said during Wednesday’s press briefing.
* * *
Update (1700ET): A day after news out of LA County about an extension of its reopening timeline sent stocks sliding into the close, the LA Times reports that LA County has issued a new “Stay at Home” order with no end date.
However, Los Angeles County businesses on Wednesday continued to reopen as officials eased restrictions by allowing thousands of retail shops and manufacturing companies to reopen with certain limitations. The extension of the order really means that the timeline for a return to “normal” – the long-term end date for when consumption and productivity at certain businesses can rebound closer to full capactiy – could potentially be expanded for months.
Though, if NJ Gov Murphy’s big U-turn from earlier today is any indication, LA County might be offering some caveats and clarifications offering a more expeditious timeline for reopening.
* * *
Update (1530ET): As data showing state pension funds booked their worst quarter of losses ever during Q1, Illinois Gov. JB Pritzker, the latest in a line of billionaire governors who have tried – and failed – to rectify the state’s myriad financial problems, announced that the state saw a record number of deaths yesterday, according to data released Wednesday afternoon by state public health officials.
- ILLINOIS SEES 192 MORE VIRUS DEATHS, LARGEST 1-DAY INCREASE
Watch the rest of his briefing below:
5/13: COVID-19 Daily Briefing https://t.co/IUvW3fHVFZ
— Governor JB Pritzker (@GovPritzker) May 13, 2020
* * *
Update (1430ET): During Wednesday’s press briefing, the WHO’s Dr. Mike Ryan warned that the coronavirus might become “endemic”, bouncing around the population like HIV or a supercharged version of the common cold until a vaccine can be mass produced. He added a warning against all predictions about how long the virus will keep circulating.
Dr. Ryan also urged the world to undertake a massive effort to eradicate it, to which we say…dude, really?
“It is important to put this on the table: this virus may become just another endemic virus in our communities, and this virus may never go away,” WHO emergencies expert Mike Ryan told an online briefing.
“I think it is important we are realistic and I don’t think anyone can predict when this disease will disappear,” he added. “I think there are no promises in this and there are no dates. This disease may settle into a long problem, or it may not be.”
[…]
WHO Director General Tedros Adhanom Ghebreyesus added: “The trajectory is in our hands, and it’s everybody’s business, and we should all contribute to stop this pandemic.”
Ryan said “very significant control” of the virus was required in order to lower the assessment of risk, which he said remained high at the “national, regional and global levels”.
There are currently more than 100 vaccines in development, including projects like Moderna’s that seem to have found favor at the FDA.
Dr. Ryan’s comment – which isn’t exactly a new theory – is really only notable because it follows Dr. Fauci’s warning before the Senate that a premature reopening risks igniting a second-wave of the virus.
In other news, South Korea just confirmed 26 new cases of coronavirus, 4 of which were imported, on Wednesday, with 18 of them purportedly linked to the nightclub cluster.
Seoul has ordered more than 2,000 clubs and bars to close again after the cluster of roughly 140 cases was discovered.
In Japan, Shinzo Abe said the country is making great progress as the number of new infections as plunged in recent days. The PM signaled that he could lift the country’s state of emergency order within a week.
* * *
Update (1340ET): As more states and countries conduct random testing using the notoriously unreliable antibody tests that are flooding the market, the Spanish government has just announced the results of its first test, which found that 11% of the Madrid residents tested came back positive for virus antibodies.
Testing positive for the antibodies means you were likely infected by the virus (unless it’s a false positive, which are rarer unfortunately than false negatives), or were infected, but didn’t show any symptoms of COVID-19 (the disease caused by the novel coronavirus).
INITIAL DATA FROM SPAIN’S NATIONAL CORONAVIRUS ANTIBODY STUDY SHOWS ABOUT 5% OF POPULATION HAVE BEEN EXPOSED TO VIRUS, WITH MADRID AT 11%, SORIA AT 14%
We were surprised: Considering initial rounds of antibody surveillance in NYC found that more than 1/5th of residents have been infected.
* * *
Update (1310ET): Less than a day after he whined during his daily press briefing about having the worst mortality rate from the virus in the country (he doesn’t), NJ Gov Phil Murphy has on Wednesday seemingly taken a major u-turn, moving ahead with a plan to partially reopen the state on Monday after pledging to wait for more testing.
Specifically, the state will allow construction workers and more ‘non-essential’ retail workers to report to work, with shoppers able to shop via ‘curbside’ pickup. We’ll let the governor tell you more himself:
Holding a COVID-19 briefing. WATCH: https://t.co/JoDcRJysDp
— Governor Phil Murphy (@GovMurphy) May 13, 2020
Today, I will sign an Executive Order, effective 6:00 AM Monday, May 18, 2020:
☑️Allow the restart of non-essential construction
☑️Allow non-essential retail stores to reopen for curbside pickup only
☑️Permit drive-through and drive-in events under social distancing guidelines pic.twitter.com/M6IWXpnLl4— Governor Phil Murphy (@GovMurphy) May 13, 2020
Data shows that we are ready to begin to restart our economy. From the peak:
📉New hospitalizations down 2/3
📉Total hospitalizations down nearly 1/2
📉Patients in ICU are down
📉Patients on ventilators down
📉Positive cases down nearly 70%
📉Deaths have decreased more than 1/3 pic.twitter.com/CAl0kK31DC— Governor Phil Murphy (@GovMurphy) May 13, 2020
LOOK: Let’s not forget where we were only six weeks ago, when we first shared our worst-case projections. We were preparing for upward of 36,000 hospitalizations, 9,000 New Jerseyans in the ICUs and 7,500 on ventilators. Because of your hard work, reality never came close. pic.twitter.com/ZX4Sb8rq1j
— Governor Phil Murphy (@GovMurphy) May 13, 2020
DATA DETERMINES DATES. The data we are seeing gives us confidence that we can begin the restart of our economy – to get people back to work, and set the stage for the steps to come. pic.twitter.com/8VfkF2P4LF
— Governor Phil Murphy (@GovMurphy) May 13, 2020
Yesterday, Murphy laid out a plan to use state money to significantly boost its testing and tracing capacity as he faces mounting pressure from the state’s business community to start the reopening process sooner rather than waiting out of what critics said was a misguided sense of caution. The state has already hired nearly 1k contact tracers.
Murphy also reported a slowing in deaths in long-term care homes, as well as a slowdown in deaths and hospitalizations overall.
Sadly, today we report another 197 deaths from COVID-19 complications. Our statewide total now stands at 9,702.
Together, we mourn each of these losses, members of our New Jersey family, and our hearts are with their friends and loved ones. pic.twitter.com/v9AVb1xbsw
— Governor Phil Murphy (@GovMurphy) May 13, 2020
Meanwhile, Washington DC is extending its lockdown until June 8 as Mayor Muriel Bowser insists that more testing is needed before the city can reopen. With markets deep in the red thanks to reopening anxieties stoked by a couple of “big rich guys”, will NJ’s reopening push have the opposite effect of Tuesday afternoon’s report about LA County’s reopening plans?
Additionally, NJ has reported nearly 2 dozen cases of the mysterious respiratory syndrome seen in patients in NYC and UK. Fortunately, none of the children have died, though only 4 have tested positive for COVID-19.
- FOUR OF YOUNG KAWASAKI DISEASE PATIENTS HAVE COVID-19
- N.J. CONFIRMS 18 CHILDREN WITH INFLAMMATORY DISEASE
- DISEASE IN N.Y. CHILDREN NOW TAKING HOLD IN NEW JERSEY
* * *
Update (1300ET): The rest of NY’s daily data have been released, and they offered evidence that the number of new cases accelerated for the first time in 5 days, after deaths moved marginally lower.
- NEW YORK ADDS 2,176 VIRUS CASES, UP AFTER FIVE DAY DECLINE
- NEW YORK GOVERNOR CUOMO SAYS 14 OTHER U.S. STATES ARE NOW INVESTIGATING CASES OF RARE INFLAMMATORY SYNDROME IMPACTING CHILDREN LINKED TO COVID-19
- CUOMO: NOT READY TO SAY WHAT SCHOOLS SHOULD BE DOING IN SEPTEMBER
* * *
Update (1145ET): France is one of the slower-moving western European states when it comes to reopening. But in a sign of just how desperate Europeans are for outdoor exercise, the AFP shares a video of the streets of Paris flowing with bikers, skateboarders and others on the third day of gradually lifting the lockdown.
VIDEO: 🇫🇷 Parisians on the Place de la République appeared to be taking back their city on the third day of lockdown easing Wednesday, with walkers, cyclists and skateboarders returning a sense of normality to the iconic square pic.twitter.com/sJEWLDiJVW
— AFP news agency (@AFP) May 13, 2020
Back in the US, while California’s AG drones on CNBC, NY has reported its latest daily figures, slowing an ever-so-slight pullback in new deaths. Gov. Cuomo is also delivering his daily briefing. Watch below:
Holding a briefing with updates on #Coronavirus. Watch Live: https://t.co/3IYFzMUBds
— Andrew Cuomo (@NYGovCuomo) May 13, 2020
And as a reminder: With the Dems now pushing another relief bill – this one with a price tag of $3 trillion – here’s how the US’s stimulus spending – mostly comprising spending authorized in the $2.2 trillion CARES Act – stacks up to Japan, and others.
Coronavirus stimulus package:
🇯🇵JPN: 21.1% of GDP
🇺🇸USA: 13.0%
🇩🇪GER: 10.7%
🇮🇳IND: 10%
🇫🇷FRA: 9.3%
🇨🇦CAN: 8.4%
🇳🇿NZL: 8.0%
🇧🇷BRA: 8.0%
🇪🇸ESP: 7.3%
🇮🇱ISR: 6.1%
🇮🇹ITA: 5.7%
🇮🇩IDN: 5.3%
🇬🇧GBR: 5.0%
🇨🇳CHN: 3.8%
🇷🇺RUS: 2.8%
🇵🇰PAK: 2.6%
🇰🇷KOR: 2.2%(CESI)
— Norbert Elekes (@NorbertElekes) May 13, 2020
* * *
Update (1050ET): The White House is reportedly weighing an extension of the travel restrictions involving the US’s borders with Mexico and Canada. While Canada seems to have its outbreak mostly under control, Mexican President AMLO has allowed the virus to spread with only light restrictions on the population which are on track to be lifted Monday.
* * *
Update (0855ET): As Fed Chairman Jerome Powell speaks, the UK Department of Health and Social Care just released the latest daily figures. They brought total cases to 229,705 (+1.43% on yesterday) and deaths to 33,186 (+1.51%).
As of 9am 13 May, there have been 2,094,209 tests, with 87,063 tests on 12 May.
1,522,258 people have been tested of which 229,705 tested positive.
As of 5pm on 12 May, of those tested positive for coronavirus, across all settings, 33,186 have sadly died. pic.twitter.com/at0NCqAILf
— Department of Health and Social Care (@DHSCgovuk) May 13, 2020
The data include deaths in hospitals, care homes and at home. The true number of deaths may be significantly different.
In Mexico, left-wing anti-establishment candidate AMLO announced Tuesday that he would reopen Mexico’s economy on May 18 – ie Monday. The decision comes as more evidence mounts suggesting that Mexico is deliberately undercounting the number of coronavirus-linked deaths and infections.
It will be a real-time experiment in just how effective lockdowns are at preventing virus-related deaths long term.
Here’s more on Mexico’s plans to reopen its auto, construction and mining sectors, with plans for ‘non-essential’ retail stores to reopen in greater numbers coming down the pike, via BBG:
Mexico’s auto, construction and mining sectors have been cleared to restart operations beginning Monday, a decision that comes just a day after the government reported record deaths from the coronavirus.
In a Wednesday news conference, Economy Minister Graciela Marquez laid out plans to reopen the Mexican economy in stages, starting with areas of the country where cases of virus have not been reported.
President Andres Manuel Lopez Obrador is faced with a tough choice as Latin America’s second-biggest economy tips into a recession that’s likely to be far deeper than the devastating Tequila Crisis of the mid 1990s. While a reopening may alleviate some of the strain on the economy, the decision also runs the real risk of fanning the pandemic, leading to an even greater economic disruption, some economists say.
“The contraction would be more contained” if this reopening is successful, said Marco Oviedo, chief Latin America economist for Barclays Plc. “The problem is the data. It seems to be inconclusive on the situation.”
Meanwhile, as we hinted at earlier, various governments’ plans regarding when they will reopen internal borders inside the Schengen area is becoming the most important issue in Europe on Wednesday. Spanish authorities are reportedly planning to keep borders closed for most foreigners until July, according to Reuters.
* * *
Update (0745ET): After reopening the largest auto factory in the world, Volkswagen is reportedly ‘pausing’ production of the Volkswagen Golf (a compact model more popular in Europe), as well as its SUVs, due to ‘poor sales’.
What, exactly, was the point of reopening factories and potentially exposing workers to SARS-CoV-2, just to shut down operations again? Also, given that VW is the world’s largest carmaker, this is just the latest headline to undermine the “V-shaped” thesis/“fantasy”.
* * *
As we reported last night, news that LA County suspects its reopening will take up to 3 months – a month longer than previously expected – sent markets lower into the close. That news, combined with Dr. Fauci’s warning about states rushing to reopen, cemented the impression that the reopening of the American economy would probably be much more fraught with delays. And for a brief moment, it seemed like fun-durr-mentals almost mattered again…
Anyway, European markets wobbled Wednesday following reports that the latest cluster of cases in Seoul had climbed to 119, the latest increase of dozens of cases as contact-tracers scramble to test as many people as possible. More than 14k people have been tested so far. To be sure, investigators have made some discoveries that undermined the theory that all of these cases are connected to one “super-spreader”. Rather, it’s believed that most of these cases were likely individuals who were asymptomatically infected elsewhere. The cases have been linked to multiple cases.
While South Korea remains on high alert, the situation in northeastern China grew even more dire. As we have reported this week, local party officials in Jilin City had reimposed restrictions after an outbreak. Now, they’re taking things a step further and ordering a ‘partial lockdown’ of the village. Residents will only be allowed to leave after they’ve completed a period of ‘self-isolation’ and tested negative for the virus. Residential compounds have been closed to visitors, and public transit has been halted.
It’s just the latest sign that both China and South Korea might be seeing the first stirrings of the ‘second wave’ that Dr. Fauci and other scientists have warned about.
After rocketing into the No. 2 spot directly behind the US, Russia’s rate of new coronavirus cases eased on Wednesday, even if only slightly, as the country recorded an 11th consecutive day with more than 10,000 fresh infections. Russia recorded 10,028 new cases on Wednesday, according to official government data, the smallest rise in almost a fortnight. Its total number of cases is now at 242,271, with 2,212 deaths.
As of Wednesday morning, the virus had infected more than 4.2 million people globally and killed 291,519, according to JHU’s tally.
According to data released around the world on Tuesday, the number of new infections confirmed jumped day-over-day on Monday (though Mondays often see the largest daily tallies of the week since they directly follow the weekend).
The German government says it has extended controls on its borders with France, Switzerland and Austria until June 15, according to interior minister Horst Seehofer. Germany plans to open its border with Luxembourg on Saturday, and hopes to reopen its border with Denmark.
Austria said Wednesday it would fully reopen its border with Germany by mid-June and plans to open travel to most of its neighboring countries in the coming weeks, beginning on Friday, as it continues with its reopening push.
Elsewhere in Central Europe, Poland reported its highest daily coronavirus infection count on Wednesday (with the data representing the totals from Tuesday), with 595 people testing positive for the virus amid an accelerating outbreak in the southern region of Silesia.
Just days after Colombia’s Avianca, Latin America’s second-largest airline, filed for bankruptcy protection, Dubai’s Emirates has announced plans to reopen scheduled flights to nine destinations from May 21, the latest sign of “green shoots” in the air travel industry, even though traffic remains more than 90% below average.
As Democrats in Congress push a $3 trillion coronavirus relief bill targeted at states and American households, Reuters reports that one progressive lawmaker and Democratic Socialist icon is taking the cause of coronavirus relief a step further, and pushing for the IMF and World Bank to forgive the debts of the poorest countries. Both NGOs have already waived the next six months’ worth of payments for 25 of the world’s poorest countries.
Over 300 lawmakers from around the world on Wednesday urged the International Monetary Fund and World Bank to cancel the debt of the poorest countries in response to the coronavirus pandemic, and to boost funding to avert a global economic meltdown.
The initiative, led by former U.S. presidential candidate Senator Bernie Sanders and Representative Ilham Omar, a Democrat from Minnesota, comes amid growing concern that developing countries and emerging economies will be devastated by the pandemic.
We can already hear the Sanders-nistas cooing about how their brave hero, having been robbed of the nomination he so rightfully deserved, continues to fight not only for the ‘real Americans’ of the working class – i.e. the struggling Brooklyn-based ‘freelance writers’ who account for much of Sanders’ most vocal supporters – but for the besotted masses of the ‘developing world’ (a racist term, no doubt).
- "Don't Believe The Happy Talk" – Jim Rickards Warns "This Time 'Is' Different"
“Don’t Believe The Happy Talk” – Jim Rickards Warns “This Time ‘Is’ Different”
Tyler Durden
Wed, 05/13/2020 – 21:25Authored by James Rickards via The Daily Reckoning,
Stocks stumbled the last two days, at least partially on fears about a resurgence in coronavirus cases.
South Korea, which did an excellent job containing the virus, has reported a new batch of cases. Japan and Singapore also reported new cases. Infections are increasing in Germany as well, where lockdown restrictions are being lifted.
We can also expect a rise in U.S. cases as several states lift their own restrictions.
From both epidemiological and market perspectives, the pandemic has a long way to go.
Its economic effects are already without precedent…
In the midst of this economic collapse, many investors and analysts return reflexively to the 2008 financial panic.
That crisis was severe, and of course trillions of dollars of wealth were lost in the stock market. That comparison is understandable, but it does not begin to scratch the surface.
This collapse is worse than 2008, worse than the 2000 dot-com meltdown, worse than the 1998 Russia-LTCM panic, worse than the 1994 Mexican crisis and many more panics.
You have to go back to 1929 and the start of the Great Depression for the right frame of reference.
But even that does not explain how bad things are today. After October 1929, the stock market fell 90% and unemployment hit 24%. But that took three years to fully play out, until 1932.
In this collapse the stock market fell 30% in a few weeks and unemployment is over 20%, also in a matter of a few weeks.
Since the stock market has further to fall and unemployment will rise further, we will get to Great Depression levels of collapse in months, not years. How much worse can the economy get?
Well, “Dr. Doom,” Nouriel Roubini, can give you some idea.
Roubini earned the nickname Dr. Doom by predicting the 2008 collapse. He wasn’t the only one. I had been warning of a crash since 2004, but he deserves a lot of credit for sounding the alarm.
The factors he lists that show the depression will get much worse include excessive debt, defaults, declining demographics, deflation, currency debasement and de-globalization.
These are all important factors, and all of them go well beyond the usual stock market and unemployment indicators most analysts are using. Those economists expecting a “V-shaped” recovery should take heed. That’s highly unlikely in the face of all these headwinds.
I’ve always taken the view that getting a Ph.D. in economics is a major handicap when it comes to understanding the economy.
They teach you a lot of nonsense like the Phillips curve, the “wealth effect,” efficient markets, comparative advantage, etc. None of these really works in the real world outside of the classroom.
They then require you to learn complex equations with advanced calculus that bear no relationship to the real world.
If economists want to understand the economy, they should talk to their neighbors and get out of their bubble.
The economy is nothing more than the sum total of all of the complex interactions of the people who make up the economy. Common sense, anecdotal information and direct observation are better than phony models every time.
So what are everyday Americans actually saying?
According to one survey, 89% of Americans worry the pandemic could cause a collapse of the U.S. economy. This view is shared by Republicans and Democrats alike.
Ph.D. economists dislike anecdotal information because it’s hard to quantify and does not fit into their neat and tidy (but wrong) equations. But anecdotal information can be extremely important.
With so many Americans fearing a collapse, it could create a self-fulfilling prophesy.
If enough people believe something it becomes true (even if it was not true to begin with) because people behave according to the expectation and cause it to happen.
The technical name for this is a recursive function, also known as a “feedback loop.” Whatever you call it, it’s happening now.
Based on that view and a lot of other evidence, we can forecast that the depression will get much worse from here despite the initial severity.
But as usual, the Ph.D. crowd will be the last to know.
You shouldn’t believe the happy talk. We’re in a deflationary and debt death spiral that has only just begun…
Nothing like what we’re witnessing has ever happened before. Even the savviest analysts cannot yet internalize what happened.
As I explained earlier, comparisons to the 2008 crisis or even the 1929 stock market crash that started the Great Depression fail to capture the magnitude of the economic damage of the virus. You may have to go back to the Black Plague of the mid-14th century for the right comparison.
Unfortunately the economy will not return to normal for years. Some businesses will never return to normal because they’ll be bankrupt before they are even allowed to reopen.
Businesses like restaurants, bars, pizza parlors, dry cleaners, hair salons and many similar businesses make up 44% of total U.S. GDP and 47% of all jobs. This is where many of the job losses, shutdowns and lost revenues occurred.
The U.S. government response to the economic collapse has been unprecedented in size and scope. The U.S. has a baseline budget deficit of about $1 trillion for fiscal year 2020. Congress added $2.2 trillion to that in its first economic bailout bill. A second bailout bill added an additional $500 billion. Another bill may add another $2 trillion to the deficit.
Combining the baseline deficit, enacted legislation and anticipated legislation brings the fiscal 2020 deficit to $5.7 trillion. That’s equal to more than 25% of GDP and will push the U.S. debt-to-GDP ratio to as high as 130% once the lost output ($6 trillion annualized) is taken into account. The previous record debt for the U.S. was about 120% of GDP at the end of World War II.
This puts the U.S. in the same category as Greece, Lebanon and Japan when it comes to the most heavily indebted countries in the world.
The Federal Reserve is also printing money at an unprecedented rate. The Fed’s balance sheet is already above $6.7 trillion, up from about $4.5 trillion at the end of QE3 in 2015. The first rescue bill for $2.2 trillion included $454 billion of new capital for a special purpose vehicle (SPV) managed by the U.S. Treasury Department and the Fed.
Since the Fed is a bank, it can leverage the SPV’s $454 billion in equity provided by the Treasury into $4.54 trillion on its balance sheet. The Fed could use that capacity to buy corporate debt, junk bonds, mortgages, Treasury notes and municipal bonds and to make direct corporate loans.
Once the Fed is done, its balance sheet will reach $10 trillion.
That much is known. What is not known is how quickly the economy will recover. The best evidence indicates that the economy will not recover quickly, and an age of low output, high unemployment and deflation is upon us.
Here’s why the economic recovery will not exhibit the “pent-up demand” and other happy-talk traits you hear about on TV…
The first reason the economic downturn will persist is the lost income for individuals. Unemployment compensation and PPP loans will only scratch the surface of total lost income from layoffs, pay cuts, reduced hours, business failures and individuals who are not only unemployed but drop out of the workforce entirely.
In addition to lost wages through layoffs and pay cuts, many other workers are losing pay in the form of tips, bonuses and commissions. Even a fully employed waitress or salesperson cannot collect tips or sales commissions if there are no customers. This illustrates how the economy is tightly linked so that problems in one sector quickly spread to other sectors.
In addition to lost individual income, there is a massive loss of business income. Earnings per share of publicly traded companies are not only declining in the second quarter (and likely the third quarter) but many are negative.
Lost business income will be another source of lower stock valuations and a source of dividend cuts. Reduced dividends are also a source of lost income for individual stockholders who rely on dividends to pay for their retirements or medical expenses.
Programs such as PPP and other direct government-to-business loans will not come close to compensating for the losses described above. The loans (which can turn into grants) will help for a month or two but are not a permanent solution to lost customers.
For still other firms, the loans won’t help at all because the firms are short of working capital and will simply close their doors for good and file for bankruptcy. This means the jobs in those enterprises will be permanently lost.
From these straightforward events (lost individual income, lost business income, dividend cuts and bankruptcies) come a host of ripple effects.
Once the government aid is distributed, many recipients will not spend it (as hoped) but will save it. Such savings are called “precautionary.” Even if you are not laid off, you may worry that your job is still in jeopardy. Any income you receive will either go to pay bills or into savings “just in case.”
In either case, the money will not be used for new spending. At a time when the economy needs consumption, we will not get it. The economy will fall into a “liquidity trap” where saving leads to deflation, which increases the value of cash, which leads to more saving. This pattern was last seen in the Great Depression (1929–40) and will soon be prevalent again.
Even if individuals were inclined to spend, there would be reduced spending in any case because there are fewer things to spend money on. Shows and sporting events are called off. Restaurants and movie theaters are closed. Travel is almost nonexistent, and no one wants to hop on a cruise ship or visit a resort until they can be assured that the risk of COVID-19 is greatly reduced.
This will guarantee a continued slow recovery and persistent deflation, which makes the slow recovery worse.
In addition to these constraints on demand, there are serious constraints on supply. Global supply chains have been seriously disrupted due to shutdowns and transportation bottlenecks. Social distancing will slow production even at those facilities that are open and can get needed inputs.
One case of COVID-19 in a factory can cause the entire factory to be shut down for a two-week quarantine period. Companies that depend on the output of that factory to manufacture their own products will also be shut down.
Beyond these direct effects of lost income and lost output, there are significant indirect effects on the willingness of entrepreneurs to invest and of individuals to spend.
First among these is the “wealth effect.” When stock values drop 20–30% as they have recently, investors feel poorer even if they have substantial net worth after the drop. The psychological effect is to cause people to reduce spending even if they can afford not to.
This means that spending cutbacks come not only from the middle class and unemployed but also from wealthier individuals who feel threatened by lost wealth even if they have continued income.
Finally, real estate values will collapse as tenants refuse to pay rent and landlords default on their mortgages, putting properties into foreclosure.
None of these negative economic consequences of the New Depression are amenable to easy fixes by the Congress or the Fed.
Deficit spending will not “stimulate” the economy as the recipients of the spending will pay bills or save money. The Fed can provide liquidity and keep the lights on in the financial system, but it cannot cure insolvency or prevent bankruptcies.
The process will feed on itself expressed as deflation, which will encourage even more savings and discourage consumption. We’re in a deflationary and debt death spiral that has only just begun.
Based on this analysis, investors should expect the recovery from the New Depression to be slow and weak. The Fed will be out of bullets. Deficit spending will slow growth rather than stimulate it because the unprecedented level of debt will cause Americans to expect higher taxes, inflation or both.
The U.S. economy will not recover 2019 levels of GDP until 2022.
Unemployment will not return even to 5% until 2026 or later.
This means stocks are far from a bottom.
The S&P 500 Index could easily hit 1,870 (it’s 2,943 as of this writing) and the Dow Jones Index could fall to 15,000 (it’s 24,360 as of this writing).
Those are levels at which investors might want to consider investing in stocks.
Any effort to “buy the dips” in the meantime will just lead to further losses when the full impact of what’s described above begins to sink in.
Got gold?
- China Still Bitter, Wants Houston Rockets GM "Properly Handled" Over Hong Kong Support
China Still Bitter, Wants Houston Rockets GM “Properly Handled” Over Hong Kong Support
Tyler Durden
Wed, 05/13/2020 – 21:05Six months ago, China brought the NBA to heel over a tweet by Houston Rockets general manager Daryl Morey which showed his support for democracy in Hong Kong.
Following the tweet, Beijing severed ties with 11 of the NBA’s official Chinese partners, canceled endorsement deals, forced stores to stop selling Rockets merchandise, and refused to air games over CCTV.
LA Lakers star LeBron James – the league’s biggest star and one of the world’s most dominant athletes – criticized Morey for not being “educated on the situation” and warned that freedom of speech can sometimes have “a lot of negatives that come with it.” James said that “so many people could have been harmed” by Morey’s tweet, not just financially, but “physically, emotionally [and] spiritually” as well.
Six months later, China is still bitter – and continues to refuse to air NBA games from China Central Television, despite the fact that Michael Ma – the son of CCTV co-founder Ma Guoli – was appointed as CEO of NBA China.
On Tuesday, China’s state mouthpiece the Global Times published an article saying that Ma’s appointment was nice, but the NBA needs to ‘properly handle’ Morey over his support of the Hong Kong protests last year.
“if it wants to win its way back to the Chinese mainland market, it should properly handle Houston Rockets general manager Daryl Morey — who tweeted in support of Hong Kong rioters last year,” writes the Times, adding that the NBA has “found itself stuck in the public opinion battlefield between China and the US, as bilateral ties remain tense amid the COVID-19 pandemic.”
If the Morey incident is properly handled, the NBA, in the long run, could demonstrate that China welcomes foreign businesses to invest and make money in the country, as long as they respect the country’s sovereignty and territorial integrity, Su said.
The appointment came a day after CCTV issued a solemn statement on China’s Twitter-like Sina Weibo, denying any plan to resume airing NBA games. CCTV has not broadcast any NBA games since October 2019.
Chinese netizens commented on the NBA official reshuffle, and many said they could not care less about the US league, unless Morey is punished for his misbehavior. –Global Times
Chinese communist tabloid wants Houston Rockets Daryl Morey “properly handled”for his tweet supporting Democracy in Hong Kong. CCTV says won’t show games until then. Do they want him to be fired or worse?#CCPVirus #CCPThugs #WeStandWithHK #BoycottBeijing https://t.co/dGUK1sGID6
— 😷Kyle Bass😷 (@Jkylebass) May 13, 2020
https://platform.twitter.com/widgets.js
Of note, NBA Commissioner Adam Silver admitted last October that China insisted the league fire Morey.
“We made clear that we were being asked to fire him, by the Chinese government, by the parties we dealt with, government and business,” Silver said. “We said there’s no chance that’s happening. There’s no chance we’ll even discipline him.”
Speaking at the TIME 100 Health Summit, Silver noted that “The losses have already been substantial,” adding “Our games are not back on the air in China as we speak, and we’ll see what happens next.”
Maybe Xi will hire LeBron for a few more CCP sound bytes in the hopes of getting Morey fired (or worse).
- The "Big Short 2" Hits An All Time Low As Commercial Real Estate Implodes
The “Big Short 2” Hits An All Time Low As Commercial Real Estate Implodes
Tyler Durden
Wed, 05/13/2020 – 20:45Back in March 2017, a bearish trade emerged which quickly gained popularity on Wall Street, and promptly received the moniker “The Next Big Short.”
As we reported at the time, similar to the run-up to the housing debacle, a small number of bearish funds were positioning to profit from a “retail apocalypse” that could spur a wave of defaults. Their target: securities backed not by subprime mortgages, but by loans taken out by beleaguered mall and shopping center operators which had fallen victim to the Amazon juggernaut. And as bad news piled up for anchor chains like Macy’s and J.C. Penney, bearish bets against commercial mortgage-backed securities kept rising.
The trade was simple: shorting malls by going long default risk via CMBX 6 (BBB- or BB) or otherwise shorting the CMBS complex. For those who have not read our previous reports (here, here, here, here, here, here and here) on the second Big Short, here is a brief rundown via the Journal:
each side of the trade is speculating on the direction of an index, called CMBX 6, which tracks the value of 25 commercial-mortgage-backed securities, or CMBS. The index has grabbed investor attention because it has significant exposure to loans made in 2012 to malls that lately have been running into difficulties. Bulls profit when the index rises and shorts make money when it falls.
The various CMBX series are shown in the chart below, with the notorious CMBX 6 most notable for its substantial, 40% exposure to retail properties.
One of the firms that had put on the “Big Short 2” trade back in late 2016 was hedge fund Alder Hill Management – an outfit started by protégés of hedge-fund billionaire David Tepper – which ramped up wagers against the mall bonds. Alder Hill joined other traders which in early 2017 bought a net $985 million contracts that targeted the two riskiest types of CMBS.
“These malls are dying, and we see very limited prospect of a turnaround in performance,” said a January 2017 report from Alder Hill, which began shorting the securities. “We expect 2017 to be a tipping point.”
Alas, Alder Hill was wrong, because while the deluge of retail bankruptcies…
… and mall vacancies accelerated since then, hitting an all time high in 2019…
… not only was 2017 not a tipping point, but the trade failed to generate the kinds of desired mass defaults that the shorters were betting on, while the negative carry associated with the short hurt many of those who were hoping for quick riches.
One of them was investing legend Carl Icahn who as we reported last November, emerged as one of the big fans of the “Big Short 2“, although as even he found out, CMBX was a very painful short as it was not reflecting fundamentals, but merely the overall euphoria sweeping the market and record Fed bubble (very much like most other shorts in the past decade). The resulting loss, as we reported last November, was “tens if not hundreds of millions in losses so far” for the storied corporate raider.
That said, while Carl Icahn was far from shutting down his family office because one particular trade has gone against him, this trade put him on a collision course with two of the largest money managers, including Putnam Investments and AllianceBernstein, which for the past few years had a bullish view on malls and had taken the other side of the Big Short/CMBX trade, the WSJ reports. This face-off, in the words of Dan McNamara a principal at the NY-based MP Securitized Credit Partners, was “the biggest battle in the mortgage bond market today” adding that the showdown is the talk of this corner of the bond market, where more than $10 billion of potential profits are at stake on an obscure index.
However, as they say, good things come to those who wait, and are willing to shoulder big losses as they wait for a massive payoffs, and for the likes of Carl Icahn, McNamara and others who were short the CMBX, payday arrived in mid-March, just as the market collapsed, hammering the CMBX Series BBB-.
And while the broader market has rebounded since then by a whopping 30%, the trade also known as the “Big Short 2” has continued to collapse and today CMBX 6 hit a new lifetime low of just $62.83, down $10 since our last update on this storied trade several weeks ago.
That, in the parlance of our times, is what traders call a “jackpot.”
Why the continued selling? Because it is no longer just retail outlets and malls: as a result of the Covid lockdown, and America’s transition to “Work From Home” and “stay away from all crowded places”, the entire commercial real estate sector is on the verge of collapse, as we reported last week in “A Quarter Of All Outstanding CMBS Debt Is On Verge Of Default“
Sure enough, according to a Bloomberg update, a record 167 CMBS 2.0 loans turned newly delinquent in May even though only 25% of loans have reported remits so far, Morgan Stanley analysts said in a research note Wednesday, triple the April total when 68 loans became delinquent. This suggests delinquencies may rise to 5% in May, and those that are late but still within grace period track at 10% for the second month.
Looking at the carnage in the latest remittance data, and explaining the sharp leg lower in the “Big Short 2” index, Morgan Stanley said that several troubled malls that are a part of CMBX 6 are among the loans that were newly delinquent or transferred to special servicers. Among these:
- Crystal Mall in Waterford, Connecticut, is currently due for the April and May 2020 payments. There has been a marked decline in both occupancy and revenue. This loan accounts for nearly 10% of a CMBS deal called UBSBB 2012-C2
- Louis Joliet Mall in Joliet, Illinois, is also referenced in CMBX 6. The mall was originally anchored by Sears, JC Penney, Carson’s, and Macy’s. The loan is also a part of the CMBS deal UBSBB 2012-C2
- A loan for the Poughkeepsie Galleria in upstate New York was recently transferred to special servicing for imminent monetary default at the borrower’s request. The loan has exposure in two 2012 CMBS deals that are referenced by CMBX 6
- Other troubled mall-chain tenants include GNC, Claire’s, Body Works and Footlocker, according to Datex Property Solutions. These all have significant exposure in CMBX 6.
Of course, the record crash in the CMBX 6 BBB has meant that all those shorts who for years suffered the slings and stones of outrageous margin calls but held on to this “big short”, have not only gotten very rich, but are now getting even richer – this is one case where everyone will admit that Carl Icahn adding another zero to his net worth was fully deserved as he did it using his brain and not some crony central bank pumping the rich with newly printed money – it has also means the pain is just starting for all those “superstar” funds on the other side of the trade who were long CMBX over the past few years, collecting pennies and clipping coupons in front of a P&L mauling steamroller.
One of them is mutual fund giant AllianceBernstein, which has suffered massive paper losses on the trade, amid soaring fears that the coronavirus pandemic is the straw on the camel’s back that will finally cripple US shopping malls whose debt is now expected to default en masse, something which the latest remittance data is confirming with every passing week!
According to the FT, more than two dozen funds managed by AllianceBernstein have sold over $4 billion worth of CMBX protection to the likes of Icahn. One among them is AllianceBernstein’s $29 billion American Income Portfolio, which crashed after written $1.9bn of protection on CMBX 6, while some of the group’s smaller funds have even higher concentrations.
The trade reflected AB’s conviction that American malls are “evolving, not dying,” as the firm put it last October, in a paper entitled “The Real Story Behind the CMBX. 6: Debunking the Next ‘Big Short’” (reader can get some cheap laughs courtesy of Brian Philips, AB’s CRE Credit Research Director, at this link).
Hillariously, that paper quietly “disappeared” from AllianceBernstein’s website, but magically reappeared in late March, shortly after the Financial Times asked about it.
“We definitely still like this,” said Gershon Distenfeld, AllianceBernstein’s co-head of fixed income. “You can expect this will be on the potential list of things we might buy [more of].”
Sure, quadruple down, why not: it appears that there are still greater fools who haven’t redeemed their money.
In addition to AllianceBernstein, another listed property fund, run by Canadian asset management group Brookfield, that is exposed to the wrong side of the CMBX trade recently moved to reassure investors about its financial health. “We continue to enjoy the sponsorship of Brookfield Asset Management,” the group said in a statement, adding that its parent company was “in excellent financial condition should we ever require assistance.”
Alas, if the plunge in CMBX continues, that won’t be the case for long.
Meanwhile, as stunned funds try to make sense of epic portfolio losses, the denials got even louder: execs at AllianceBernstein told FT the paper losses on their CMBX 6 positions reflected outflows of capital from high-yielding assets that investors see as risky. They added that the trade outperformed last year. Well yes, it outperformed last year… but maybe check where it is trading now.
Even if some borrowers ultimately default, CDS owners are not likely to be owed any cash for several years, said Brian Phillips, a senior vice-president at AllianceBernstein.
He believes any liabilities under the insurance will ultimately be smaller than the annual coupon payment the funds receive. “We’re going to continue to get a coupon from Carl Icahn or whoever — I don’t know who’s on the other side,” Phillips added. “And they’re going to keep [paying] that coupon in for many years.”
What can one say here but lol: Brian, buddy, no idea what alternative universe you are living in, but in the world called reality, it’s a second great depression for commercial real estate which due to the coronavirus is facing an outright apocalypse, and not only are malls going to be swept in mass defaults soon, but your fund will likely implode even sooner between unprecedented capital losses and massive redemptions… but you keep “clipping those coupons” we’ll see how far that takes you. As for Uncle Carl who absolutely crushed you – and judging by the ongoing collapse in commercial real estate is crushing you with every passing day – since you will be begging him for a job soon, it’s probably a good idea to go easy on the mocking.
Afterthought: with CMBX 6 now done, keep a close eye on CMBX 9. With its outlier exposure to hotels which have quickly emerged as the most impacted sector from the pandemic, this may well be the next big short.
- Amazon Restoring Normal Delivery Times For Products, Will Cut Overtime Pay For Workers
Amazon Restoring Normal Delivery Times For Products, Will Cut Overtime Pay For Workers
Tyler Durden
Wed, 05/13/2020 – 20:25Update: Amazon appears to be normalizing operations following an unprecedented demand surge during lockdowns. We noted earlier, normal delivery times for many of its products will be gradually seen over the next couple of weeks. Now it appears the company will revert pay for many of its workers back to pre-corona times after May 30.
Amazon warehouse workers saw a $2 per hour wage increase during the coronavirus pandemic. Since online sales could be subsiding as lockdowns are being lifted in many states, the company will halt temporary overtime pay rise in June.
The question remains — What happens to the +100k workers the company added during the height of the pandemic? As states reopen, does that mean Amazon will lay off excess workers?
* * *
There is good news this morning for anyone who has been absolutely fed up with Amazon delaying one- and two-day delivery times for specific products. Bloomberg says regular delivery service will be restored this month as the online retailer catches up with orders after an unprecedented demand surge thanks to everyone ordering products via the e-commerce platform during lockdowns.
Amazon notified suppliers Sunday that they can begin shifting more inventory into its warehouses and will gradually shorten the delivery time for products that were restricted during the last several months because they were deemed non-essential during the pandemic.
“We removed quantity limits on products our suppliers can send to our fulfillment centers,” Amazon spokeswoman Kristen Kish told Bloomberg in an email. “We continue to adhere to extensive health and safety measures to protect our associates as they pick, pack and ship products to customers, and are improving delivery speeds across our store.”
Anthony Ferry, CEO of PriceSpider, said the online retailer was overwhelmed by orders in April, which led the company to discontinue its rapid delivery service for many products. He said this forced many Amazon members to use curbside pickup programs of their local supermarkets, Walmart, Target, and other big-box retailers because it was much faster.
“Loyal Amazon shoppers left the site when they saw long delivery times or items were out of stock,” Ferry said. “Buy-online pickup-in store has become a much more enticing and desirable solution when people want something now.”
Juozas Kaziukenas, the founder of Marketplace Pulse, a research firm that continuously monitors trends on the Amazon site, said long delivery times in a post-corona world infuriated many Amazon members. Delivery times that use to take one or two days were pushed out to a week or even several. Members left more than 800,000 negative reviews on the online retailer’s site in April, mostly complaining about shipping times.
“Amazon is known for great selection, low prices and fast shipping,” Kaziukenas said. “These all broke during the pandemic. Selection was not always there, prices were not lowest because Amazon sold out, and fast shipping was gone.”
To meet unprecedented demand, Amazon hired over 100,000 new workers for its warehouses since about mid-March, which is around the time most of the country descended into lockdowns. Consumers were left with very few shopping options over the last month, most of them went to Amazon and or other e-commerce platforms to panic hoard products.
- "My Job Is To Make Syria A Quagmire For The Russians": CIA Doctrine Made Official Policy
“My Job Is To Make Syria A Quagmire For The Russians”: CIA Doctrine Made Official Policy
Tyler Durden
Wed, 05/13/2020 – 20:05Like with the disastrous Iraq quagmire years before the US war machine came to Syria under Obama, Washington’s rationale and justification for occupying the Syrian Arab Republic has shifted and changed drastically multiple times over.
When ultimately what started as US covert regime change efforts targeting Assad failed (based ostensibly in “protecting civilians”), the official mission then conveniently switched to ‘defeating terrorism’ — though of course this meant turning on the very jihadists the US armed and trained in the first place. Then the Kurds became the proxy flavor of the month, which also happened to have control of all the major oil and gas fields in the country’s east (“secure the oil!” – Trump has repeatedly echoed of late).
At least 100 Russian soldiers have been killed in Syria since September 2015. Image source: Reuters When the Islamic State collapsed and became just another underground insurgency like its al Qaeda cousin, the ever-hawkish national security state establishment argued that Trump must not pull troops out because of ‘Iranian expansion’.
But now that the myth that somehow Assad and the Syrians just want to hand their sovereign country over to their allies the Iranians has also largely fallen away (remember that Baathist Syria is a secular Arab and multi-confessional state, while Iran is a hardline Shia Islamic theocracy), a new official – and it might be added, provocative – US administration rationale has been concocted.
Washington now says it’s all about defeating the Russians. While it’s not the first time this has been thrown around in policy circles (recall that a year after Russia’s 2015 entry into Syria at Assad’s invitation, former CIA Deputy Director Mike Morell admitted in a TV interview he views that the US should be in the business of “killing Russians and Iranians covertly”).
And now the top US special envoy to region, James Jeffrey, has this to say on US troops in Syria:
“My job is to make it a quagmire for the Russians.”
Ironically, Jeffrey’s official title has been Special Envoy for the Global Coalition to Defeat ISIL, but apparently the mission is now to essentially “give the Russians hell”.
US envoy to Syria, Ambassador James Jeffrey, file image. His comments were made Tuesday during a video conference hosted by the neocon Hudson Institute:
Asked why the American public should tolerate US involvement in Syria, Special Envoy James Jeffrey points out the small US footprint in the fight against ISIS. “This isn’t Afghanistan. This isn’t Vietnam. This isn’t a quagmire. My job is to make it a quagmire for the Russians.”
He also emphasized that the Syrian state would continue to be squeezed into submission as part of long-term US efforts (going back to at least 2011) to legitimize a Syria government in exile of sorts. This after the Trump administration recently piled new sanctions on Damascus.
As University of Oklahoma professor and expert on the region Joshua Landis summarized of Jeffrey’s remarks: “He pledged that the United States will continue to deny Syria – international funding, reconstruction, oil, banking, agriculture & recognition of government.”
“My job is to make it a quagmire for the Russians.”
Special US envoy to Syria – James Jeffery
He pledged that the United States will continue to deny Syria – international funding, reconstruction, oil, banking, agriculture & recognition of government.https://t.co/MSAkQqAmdh
— Joshua Landis (@joshua_landis) May 12, 2020
https://platform.twitter.com/widgets.js
But no doubt both Putin and Assad have understood Washington’s real proxy war interests all along, which is why last year Russia delivered it’s lethal S-300 into the hands of Assad (and amid constant Israeli attacks).
As for oil, currently Damascus is well supplied by the Iranians, eager to dump their stock in fuel-starved Syria amid the global glut. Trump has previously voiced that part of US troops “securing the oil fields” is to keep them out of the hands of Russia and Iran.
* * *
Recall the CIA’s 2016 admission of what’s really going on in terms of US action in Syria:
- HSBC Lost $200 Million In One Day When The Gold Market Broke
HSBC Lost $200 Million In One Day When The Gold Market Broke
Tyler Durden
Wed, 05/13/2020 – 19:45Last week, we discovered precisely which bank got hammered by the violent divergence between the spot and future price of gold. As we reported, “HSBC had 15 “back-testing exceptions” in January and March, when the firm was caught out by moves in the prices of precious metals. Europe’s biggest bank said … problems were caused in part by “delivery disruptions in the gold market” which means that we now know which bank was on the other side of the gold spot-future trade.”
Today we also learned just how much these unexpected moves cost Europe’s largest bank: according to Bloomberg, HSBC lost around $200 million in one day in March because of the previously discussed disruptions to the gold market that caused prices to diverge dramatically in key trading hubs.
The one-day loss, which far exceeded the maximum loss anticipated by HSBC’s value-at-risk models, was unusually large for a market in which the leading banks – HSBC and JPMorgan – typically make around $200 million in an entire year. In other words, in one day, HSBC lost an entire year’s worth of revenue.
HSBC’s loss highlights the extreme nature of the disruption to the gold market in late March, as lockdowns closed refineries and grounded planes, strangling the supply routes that allow physical gold to move around the globe. As we discussed at the time, the price of gold futures in New York and spot gold in London, which usually trade within a few dollars an ounce of one another, diverged by as much as $70, the most on record.
The divergence hit banks that are active in trading the so-called EFP, or Exchange for Physical, the mechanism by which traders switch positions between the New York and London markets, according to Bloomberg which also notes that HSBC, which last week first revealed it was hit by the gold market disruption, also disclosed the scale of the loss in a chart this week showing its daily trading profits for the first quarter.
The bank described the loss as a “mark-to-market loss mainly associated with gold refining and transportation challenges.” It highlighted the “unprecedented widening of the gold exchange-for-physical basis,” which “affected HSBC’s gold leasing and financing business and other gold hedging activity leading to mark-to-market losses.”
Since late March, the EFP has normalized and the price spread between the spot and futures markets has returned to normal levels of less than $5 an ounce.
Still, HSBC is not the only one struggling with the unusual moves in the gold market. Banks often sell gold futures in New York to hedge their positions in the London market, exposing them to significant losses should the two markets diverge. While it has not been confirmed, some speculate that Canada’s Bank of Nova Scotia, for years one of the leading bullion traders with a business that dates back to the 17th century, shuttered its precious metals unit due to outsized losses following the March gold market turmoil. - 992 Billion Reasons Why The Fed Needs Another Market Crash In The Next Few Weeks
992 Billion Reasons Why The Fed Needs Another Market Crash In The Next Few Weeks
Tyler Durden
Wed, 05/13/2020 – 19:25Speaking in a video conference organized by the Peterson Institute, turbo money printer Jerome Powell today reassured the market that negative rates are not something the Fed – which expanded its balance sheet by $2.6 trillion in the past two months – is contemplating now. Of course, that will change after the next market crash or if economic shutdowns return, but for now the Fed’s message to traders was clear: don’t push forward fed fund rates negative, which also catalyzed today’s sharp market drop as a key source of potential forced easing was removed.
However, with Powell taking negative rates off the table (for now), it means the Fed has another problem on its hands, one which was first laid out by Deutsche Bank’s credit strategist Stuart Sparks, who in a recent note said that “for all the measures taken by the Fed and fiscal authorities to counter the COVID19 shock, policy remains too tight.” And, as Sparks adds, if the Fed opts to avoid negative policy rates – which appears to be the case – “further easing must be provided by the size and composition of the Fed’s balance sheet”, meaning more QE.
How much more QE? Well, with short-dated market real yields positive, Deutsche Bank estimates that r*, or the neutral rate of interest, has fallen to around -1%, “suggesting additional accommodation required for policy to be “easy” could be more than 100 bp in terms of “policy rate equivalent.“
Previously the Fed had estimated that $100 billion in QE has approximately the same short term impact on growth as 3 bps of rate cuts. This equivalence means that in order to provide a 1% of “rate equivalent” easing, the Fed would need to grow the balance sheet by roughly $3.3 trillion.
This creates a headache for the Fed in that balance sheet growth of this magnitude creates a structural supply/demand imbalance even given extraordinary Treasury funding needs, and should compress the term premium over time. And given Deutsche Bank projections for Treasury supply and Fed purchases, “this imbalance could be as large as $1.4 trillion. Ultimately, the argument is that the drain of duration supply dominates maturity selection implicit in Fed purchases, causing the term premium to decline.” This is shown in the chart below.
Even more term-premium distortions aside, the Fed has no choice as we explain below. Because, as crazy as it may sound, despite the Fed’s massive liquidity injection to date which has pushed the Fed’s balance sheet from $4.2 trillion to $6.7 trillion since mid-March, it is not enough and to ensure that the problem of the -1% r* is addressed without cutting rates negative – a problem which is now manifesting itself in a chronically high dollar, i.e., dollar shortage, which has failed to normalize back to pre-crisis levels as shown below…
… the Fed will need to expand its balance sheet trillions…. And it will have to do it very soon!
As Curvature Securities’ strategist Scott Skyrm writes today, General Collateral unexpectedly dropped down to 0% yesterday and was below 0% today. And while this is “Strange”, Skyrm correctly points out that “low GC rates can only be temporary.”
The reason? There is a flood of liquidity-draining issuance on the horizon.
As Skyrm further explains, with QE purchases winding down – recall that last Friday the Fed cut its daily POMO average to just $7 billion from $75 billion two months ago…
… the deluge of more Treasury supply will ultimately push rates higher.
But in the near term, things are about to get scary: as Skyrm calculates, “there are $79 billion CMBs settling tomorrow and $39 net new Treasurys settling on Friday for the refunding. But that’s just the start. All total, there are $689 billion net new Treasurys settling during the month of May and $992 billion net new Treasurys settling between now and June 15. Yes, almost one trillion new Treasury securities hitting the market within the next month!”
His conclusion: “That means the market needs to come up with about one trillion dollars to pay for those securities over the next month.” Which, of course, is a euphemism because we all know who in the market needs to come up with one trillion dollar – the only one who literally prints money: the Federal Reserve.
For those who missed all that, here is the layman’s version: the Fed has flooded the system with liquidity… and it is not enough, because the way helicopter money works, is that liquidity supply (the Fed), and liquidity demand (Treasury via debt issuance) go hand in hand, and periods of too much supply, as was the cash with the Fed’s massive QE in late March and early April, are promptly followed by periods of dramatic liquidity demand, such as the next month when $1 trillion in liquidity will be drained to fund the US government “money helicopter.”
This also suggests that Deutsche Bank’s estimate of a $3.3 trillion cumulative shortfall is accurate and that the Fed will soon find itself trapped again, because instead of injecting liquidity it continues to drain it by shrinking the weekly POMO injection.
As a result, Powell faces a two-fold problem: since the Fed chair has taken negative rates off the table, Powell has no choice but too boost QE again, and unleash another firehose of liquidity in the financial system. However, any such reversal to the Fed’s current posture of shrinking QE will be met with howls of rage, especially in the political establishment. Which means that, just like in March when the Fed used the first pandemic-induced market crash to unleash unlimited QE, the Fed will soon have to go for round 2 and spark a new market crash, one which it then uses as an alibi for the next massive liquidity injection. Failing to do that, watch as the dollar takes off as markets sniff out that another major dollar squeeze is imminent. And since this will accelerate the liquidity crunch, one way or another, the coming 992 billion net Treasury issuance will serve as a trigger for the next market shock, one which the Fed will quickly reverse by expanding the already unlimited QE by over $3 trillion on very short notice.
The only question we have is whether this will be the market crash that the Fed uses to unveil it will also buy equity ETfs next, or if Powell will save this final bullet in its ammo for whatever comes next.
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