Feb 21

Today’s News 21st February 2020

  • Escobar: 'Westlessness' As A Cover For US Vs. China
    Escobar: ‘Westlessness’ As A Cover For US Vs. China

    Authored by Pepe Escobar via The Asia Times,

    Few postmodern political pantomimes have been more revealing than the hundreds of so-called “international decision-makers,” mostly Western, waxing lyrical, disgusted or nostalgic over “Westlessness” at the Munich Security Conference. 

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    “Westlessness” sounds like one of those constipated concepts issued from a post-party bad hangover at the Rive Gauche during the 1970s. In theory (but not French Theory) Westlessness in the age of Whatsapp should mean a deficit of multiparty action to address the most pressing threats to the “international order” – or (dis)order – as nationalism, derided as a narrow-minded populist wave, prevails.  

    Yet what Munich actually unveiled was some deep – Western – longing for those effervescent days of humanitarian imperialism, with nationalism in all its strands being cast as the villain impeding the relentless advance of profitable, neocolonial Forever Wars. 

    As much as the MSC organizers – a hefty Atlanticist bunch – tried to spin the discussions as emphasizing the need for multilateralism, a basket case of ills ranging from uncontrolled migration to “brain dead” NATO got billed as a direct consequence of “the rise of an illiberal and nationalist camp within the Western world.” As if this were a rampage perpetrated by an all-powerful Hydra featuring Bannon-Bolsonaro-Orban heads.  

    Far from those West-is-More heads in Munich is the courage to admit that assorted nationalist counter-coups also qualify as blowback for the relentless Western plunder of the Global South via wars – hot, cold, financial, corporate-exploitative. 

    For what it is worth, here’s the MSC report. Only two sentences would be enough to give away the MSC game:

    “In the post-Cold War era, Western-led coalitions were free to intervene almost anywhere. Most of the time, there was support in the UN Security Council, and whenever a military intervention was launched, the West enjoyed almost uncontested freedom of military movement.”

    There you go. Those were the days when NATO, with full impunity, could bomb Serbia, miserably lose a war on Afghanistan, turn Libya into a militia hell and plot myriad interventions across the Global South. And of course none of that had any connection whatsoever with the bombed and the invaded being forced into becoming refugees in Europe.

    West is more

    In Munich, South Korean Foreign Minister Kang Kyung-wha got closer to the point when she said she found “Westlessness” quite insular as a theme. She made sure to stress that multilateralism is very much an Asian feature, expanding on the theme of ASEAN centrality.

    Russian Foreign Minister Sergey Lavrov, with his customary finesse, was sharper, noting how “the structure of the Cold War rivalry is being recreated” in Europe. Lavrov was a prodigy of euphemism when he noted how “escalating tensions, NATO’s military infrastructure advancing to the East, exercises of unprecedented scope near the Russian borders, the pumping of defense budgets beyond measure – all this generates unpredictability.”

    Yet it was Chinese State Councilor and Foreign Minister Wang Yi who really got to the  heart of the matter. While stressing that “strengthening global governance and international coordination is urgent right now,” Wang said, “We need to get rid of the division of the East and the West and go beyond the difference between the South and the North, in a bid to build a community with a shared future for mankind.”

    “Community with a shared future” may be standard Beijing terminology, but it does carry a profound meaning as it embodies the Chinese concept of multilateralism as meaning no single state has priority and all nations share the same rights.

    Wang went farther:

    The West – with or without Westlessness– should get rid of its subconscious mentality of civilization supremacy; give up its bias against China; and “accept and welcome the development and revitalization of a nation from the East with a system different from that of the West.” Wang is a sophisticated enough diplomat to know this is not going to happen.

    Wang also could not fail to raise the Westlessness crowd’s eyebrows to alarming heights when he stressed, once again, that the Russia-China strategic partnership will be deepened – alongside exploring “ways of peaceful coexistence” with the US and deeper cooperation with Europe.

    What to expect from the so-called “system leader” in Munich was quite predictable. And it was delivered, true to script, by current Pentagon head Mark Esper, yet another Washington revolving door practitioner.

    21st Century threat

    All Pentagon talking points were on display.

    China is nothing but a rising threat to the world order – as in “order” dictated by Washington. China steals Western know-how; intimidates all its smaller and weaker neighbors; seeks an “advantage by any means and at any cost.”

    As if any reminder to this well-informed audience was needed, China was once again placed at the top of the Pentagon’s “threats,” followed by Russia, “rogue states” Iran and North Korea, and “extremist groups.” No one asked whether al-Qaeda in Syria is part of the list.

    The “Communist Party and its associated organs, including the People’s Liberation Army,” were accused of “increasingly operating in theaters outside China’s borders, including in Europe.” Everyone knows only one “indispensable nation” is self-authorized to operate “in theaters outside its borders” to bomb others into democracy.

    No wonder Wang was forced to qualify all of the above as “lies”: “The root cause of all these problems and issues is that the US does not want to see the rapid development and rejuvenation of China, and still less would they want to accept the success of a socialist country.”

    So in the end Munich did disintegrate into the catfight that will dominate the rest of the century. With Europe de facto irrelevant and the EU subordinated to NATO’s designs, Westlessness is indeed just an empty, constipated concept: all reality is conditioned by the toxic dynamics of China ascension and US decline.

    The irrepressible Maria Zakharova once again nailed it:

    “They spoke about that country [China] as a threat to entire humankind. They said that China’s policy is the threat of the 21st century. I have a feeling that we are witnessing, through the speeches delivered at the Munich conference in particular, the revival of new colonial approaches, as though the West no longer thinks it shameful to reincarnate the spirit of colonialism by means of dividing people, nations and countries.”

    An absolute highlight of the MSC was when diplomat Fu Ying, the chairperson on foreign affairs for the National People’s Congress, reduced US House Speaker Nancy Pelosi to dust with a simple question:

    “Do you really think the democratic system is so fragile” that it can be threatened by Huawei?


    Tyler Durden

    Thu, 02/20/2020 – 23:45

  • U.S. Taxpayers Face $200 Billion Bill From Student Loan Forgiveness Plans
    U.S. Taxpayers Face $200 Billion Bill From Student Loan Forgiveness Plans

    The student loan bubble continues to inflate. 

    It’s now a $1.64 trillion problem that has increased over 120% since 2009. Student loan balances equate to 7.6% of GDP. That’s up from 5.1% a decade ago.

    Much of the millennial generation has insurmountable student debts that have prevented them from family formation, home buying, and growing savings. This has severely weighed on the economy, but it appears relief could be on the way, paid for by the U.S. taxpayer.

    The Congressional Budget Office (CBO) said this week that a $207.4 billion student loan forgiveness program would help Americans who are unable to pay their debt through 2029.

    The CBO said borrowers who attend graduate or professional schooling would benefit from the program the most.

    The government is expected to forgive $167.1 billion of the total amount, and this includes the original loan amount and unpaid interest for borrowers over the period.

    The CBO estimates that the government will forgive $40.3 billion on new loans made from 2020-2029, or about 21% of the original amount.

    There are more than 50 million Americans with student loan debt. The CBO estimates that most of the borrowers are stuck in low wage and low skilled jobs with large balances that may never be paid pack. Many of these folks are millennials, stuck in a renting society with absolutely no economic mobility. 

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    The student loan bubble is another imbalance that will correct and end very badly when the next recession strikes, hence why the government has created a new program to fund student debt forgiveness. 

    Let’s call the program for what it really is: a massive bailout of the millennial generation.

    Like all bubbles, this one will eventually pop. And when it does, it will end very badly.

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    But in the meantime, some millennials are flipping stocks and making money in “COLLEGE (in class)” to have “NO MORE student loans.”


    Tyler Durden

    Thu, 02/20/2020 – 23:25

  • Easily Overlooked Issues Regarding COVID-19
    Easily Overlooked Issues Regarding COVID-19

    Authored by Gail Tverberg via Our Finite World,

    We read a lot in the news about the new Wuhan coronavirus and the illness it causes (COVID-19), but some important points often get left out.

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    [1] COVID-19 is incredibly contagious.

    COVID-19 transmits extremely easily from person to person. Interpersonal contact doesn’t need to be very long; a taxi driver can get the virus from a passenger, for example. The virus may be transmissible even before an infected person develops symptoms. It may also be transmissible for a few days after a person seems to be over the virus; it is possible to get positive virus tests, even after symptoms disappear. Some people may have the disease, but never show symptoms.

    [2] The virus likely remains active on inanimate surfaces such as paper, plastic, or metal for many days.

    There haven’t been tests on the COVID-19 virus per se, but studies on similar viruses suggest that human pathogens may remain infectious for up to eight days. Some viruses that only infect animals can survive for more than 28 days. China is reported to be destroying paper currency from the hardest hit area, because people do not want to accept money which may have viruses on it. Clearly, surfaces in airplanes, trains and buses may also harbor viruses, long after a passenger with the virus has left, unless they have been thoroughly wiped down with disinfectant.

    [3] Given Issues [1] and [2], about the only way to avoid spreading COVID-19 seems to be geographic isolation. 

    With all of today’s travel, geographic isolation doesn’t work very well in practice. People need food and medical supplies. They need to keep basic services such as electricity and garbage collection operating. Suppliers of food and other services need to come and leave the area and that tends to spread COVID-19. Also, the longer a geographic area is isolated, the larger the percentage of the people within the area that is likely to get COVID-19. The problem is that the people need to have contact with others in the area for purposes such as buying food, and that tends to spread the disease.

    [4] The real story regarding the number of deaths and illnesses seems to be far worse than the story China is telling its own people and the world.

    The real story seems to be that the number of deaths is far greater than the number reported–perhaps 10 times as high as being reported. The number of illnesses is also much higher. At one point, facilities doing cremations in the Wuhan area were reported to be doing four to five times the normal number of cremations. Some of the bodies in the Wuhan area now need to be sent to other areas of China because there is not enough local cremation capacity.

    China doesn’t dare tell its people how bad the situation really is, for fear of panic. They want to tell a story of being in control and handling the situation well. The news media in the West repeat the stories that the government-controlled publications of China provide, even though they seem to present a much more favorable situation than really seems to be the case.

    [5] Our ability to identify who has the new coronavirus is poor.

    While there is a test for the coronavirus, it costs hundreds of dollars to administer. Even with this high cost, the results of the tests aren’t very reliable. The test tends to produce many false negatives. The virus may be present somewhere inside the person being tested, but not in the areas touched by swabs of the throat and nose.

    [6] Some people get much more severe symptoms from COVID-19 than others.

    Most people, perhaps 80% of people, seem to get a fairly light form of the COVID-19 illness. Groups that seem particularly prone to adverse outcomes include the elderly, smokers, those who are obese, and those with high blood pressure, diabetes, or poor immune systems. Males seem to have worse outcomes than females.

    Strangely enough, people with East Asian ancestry (Chinese, Japanese, or Vietnamese) may have a higher risk of adverse outcomes than those of European or African ancestry. One of the things that is targeted by the disease is the ACE2 receptor. The 1000 Genome Project studied expected differences in ACE2 receptors among various groups. Based on this analysis, some researchers predict that those of European or African ancestry will tend to get lighter forms of the disease.

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    Figure 1. Chart from Coronavirus risk for Asians, Africans, Caucasians revealed.

    Bolstering this view is the fact that the SARS, which also tends to target the ACE2 receptor, tended to stay primarily in China, Hong Kong, Taiwan, and Singapore. While there were cases elsewhere, they tended to have few deaths.

    [7] China has been using geographical quarantine to try to hold down the number of COVID-19 cases. The danger with such a quarantine is that once the economy is down, it is very difficult to come back to the pre-quarantine state.

    Data shows that China’s economy is not reopening quickly after the extended New Year holiday finished.

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    Figure 2. China daily passenger flows, relative to Chinese New Year. Amounts are now down more than 80% and have not increased, even as some businesses are theoretically reopening. Chart by ANZ, copied by WSJ Daily Shot Feb. 17, 2020.

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    Figure 3. China property transactions, before and after Chinese New Year. Chart by Goldman Sachs. Reprinted by WSJ Daily Shot, Feb. 17, 2020.

    All businesses will be adversely affected by a lack of sales if they need to continue to pay overhead expenses. Small and medium-sized business will be especially adversely affected. Bloomberg reports that if a shutdown lasts for three months, there is a substantial chance that these businesses will run through their savings and fail. Thus, these businesses may be permanently lost if the economy is down for several months.

    Also, restarting after a shut-down is more difficult than it might appear. Take, for example, a mother who wants to go back to work. She will likely need:

    • Public transportation to be operating, so she has a way to get to work;

    • School to be open, so she doesn’t need to worry about her child while she is at work;

    • Masks to be available, so that she and her child can comply with requirements to wear them;

    • Stores providing necessities such as food to be open, or she may be too hungry to work

    If anything is missing, the mother is likely not to go back to work. Required masks seem to be a problem right now, but other pieces could be missing as well.

    Businesses, too, need a full range of workers to restart their operations. If the inspector doing the final inspection is not available, the business may not really be able to ship finished products, even if most of the workers are back.

    [8] A shutdown of as little as three months is likely to be damaging to the world economy.

    Multiple things are likely to go wrong:

    (a) Commodity prices are likely to fall steeply, because of low demand from China. Oil prices, in particular, are likely to fall steeply, perhaps to $30 to $35 per barrel. Besides cutbacks in oil demand from China, there is the issue of a general reduction in long distance travel, because of fear of traveling with other passengers with COVID-19.

    (b) US businesses, such as Apple, will find their supply chains broken. They won’t know when, and if, they can ship products.

    (c) Debt defaults are likely to become more common, especially in China. The longer the slowdown/shutdown lasts, the greater the extent to which debt defaults are likely to spread around the world.

    (d) The world economy is likely to be pushed into recession, without an easy way to get out again.

    [9] The longer the shutdown lasts, the more likely there is to be a major collapse of the Chinese economy. 

    In the event of a long-term shutdown, it would seem likely that, at a minimum, a new leader would take over. In fact, there would seem to be a significant chance of major changes within the economy. For example, the provinces of China that are able to restart might attempt to restart, leaving the more damaged areas behind. In such a case, instead of having a single Chinese government to deal with, there might be multiple governmental units to deal with.

    Each governmental unit might consist of a few provinces trying to provide services such as they are able, without the benefit of the parts of the economy that are still shut down. Each governmental unit might have its own currency. If this should happen, China will be able to provide far fewer goods and services than it has in the recent past.

    [10] Planners everywhere have been guilty of “putting too many eggs in one basket.”

    Planners today look for efficiency. For example, placing a large share of the world’s industry in China looks like it is an efficient approach. Unfortunately, we are asking for trouble if the Chinese economy hits a bump in the road. Using just-in-time supply lines looks like a good idea as well, but if a major supplier cannot provide parts for a while, then having inventory on hand would have been a better approach.

    If we want systems to be sustainable, they really need a lot of redundancy. Redundant systems are not as efficient, but they are much more likely to sustainable through difficult times. There is a recent article in Nature that talks about this issue. One of the things it says is,

    A system with a single cycle is the most unstable because the deletion of any cycle-node or link breaks the sustaining feedback mechanism.

    “A system with a single cycle” is basically similar to “putting all of our eggs in one basket.” “Deletion of any cycle-node or link” is something like China running into coronavirus problems. We probably need a world economy that consists of many nearly separate local economies to be certain of long-term world economy stability. Alternatively, we need a great deal of redundancy built into our systems. For example, we need large inventories to work around the possibility of missing contributions from one country, in the case of a problem such as a major epidemic.

    Conclusion

    The world economy may become very different, simply because of COVID-19. The new virus doesn’t even need to directly affect the rest of the world very much to create a problem. The United States, Europe, and the rest of the world are very much dependent on the continued operation of China. The world economy has effectively put way too many eggs in one basket, and this basket is not now functioning as expected.

    If China is barely producing anything for world markets, the rest of the world will suddenly discover that long supply chains weren’t such a good idea. There will be a big scramble to try to fill in the missing pieces of supply chains, but many goods are likely to be less available. We may discover quickly how much we depend upon China for everything from shoes to automobiles to furniture to electronics. World carbon dioxide emissions are likely to fall dramatically because of China’s problems, but will the accompanying issues be ones that the world economy can tolerate?

    The thing that is ironic is that it is possible that the West’s fear of the new coronavirus may be overblown–we really won’t know what the impact will be with respect to people of European or of African descent until we have had a better chance to examine how the virus affects different populations. The next few weeks and months are likely to be quite instructive. For example, how will the Americans and Australians who caught COVID-19 on the cruise ships fare? What will the health outcomes be of non-Asians being brought back from Wuhan to their native countries on special planes?


    Tyler Durden

    Thu, 02/20/2020 – 23:05

  • "Devastating Impact": One Bank Expects China's PMI To Crater As Low As 30
    “Devastating Impact”: One Bank Expects China’s PMI To Crater As Low As 30

    To those who have been following our series of high-frequency, daily indicators of China’s economy, it will probably not come as a surprise that the world’s second biggest economy has ground to a halt, its GDP set to post the first negative print in modern history. To everyone else who is just now catching up, we have some news: it’s going to be bad.

    Ahead of official Chinese economic data which will soon start capturing the period when the coronavirus hit the nation, Nomura’s Chief China economist Ting Lu noted that China’s Emerging Industries PMI (EPMI), which gauges momentum in the country’s high-tech industries and is closely correlated with official manufacturing PMI, slumped to 29.9 in February (from 50.1 in January!), its lowest-print on record (introduced Jan ’14), which as Nomura’s Charlie McElligott writes “is pure reflection of the devastating impact of the COVID-19 outbreak.“

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    What does this mean for the closely followed China manufacturing PMI? As McElligott writes, “even adjusting for seasonality and expected progress in business resumption in the coming week, we estimate the official manufacturing PMI could drop to a range of 30-40 in Feb.”

    And the punchline from Ting:

    “We believe markets might underestimate the scale of the current growth slump. Due to a slower-than-expected rate of business resumption, we have cut our year-on-year Q1 real GDP growth forecast to 3.0% and expect Beijing to ramp up policy easing measures in coming months. That said, the likelihood of another round of massive stimulus appears low as policy space remains limited.”

    The last bolded sentence confirms what we said on Sunday, and even though China has already launched what has been a generous deployment of various stimuli

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    … it explains why some were disappointed after the PBOC only incrementally eased policy overnight, lowering the benchmark 1Y Loan Prime Rate to 4.05% (from 4.15%) and the 5Y rate to 4.75% (from 4.80%) – not pursuing a full-blown overnight rate cut as some had expected – while at the same time stating that it will work to promote consumption and investment to boost domestic demand; the PBOC did offset some of this disappointment with the biggest ever monthly injection in Total Social Financing  credit as discussed earlier…

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    … but as McElligott concludes, “the negligible decline in the 5Y rate shows that authorities remain concerned about easing property policy and that, for now, they are attempting to maneuver within “conventional” policy.”

    In other words, while the market remains convinced that Beijing with unleash even more stimulus to force the V-shaped rebound that has been priced in for Q2 and onward, also explaining the relentless bid for risk assets, this appears unlikely to happen any time soon, especially while China is still battling to contain the coronavirus, because as Jefferies strategist Sean Darby warned, “markets have taken a step back because the authorities won’t do any major stimulus until they are completely sure the virus has stopped, because there’s no point in doing it when people are sitting at home.”


    Tyler Durden

    Thu, 02/20/2020 – 22:45

  • Global Crop Failures Continue: In Australia This Is Going To Be The Worst Harvest Ever Recorded
    Global Crop Failures Continue: In Australia This Is Going To Be The Worst Harvest Ever Recorded

    Authored by Michael Snyder via The Economic Collapse blog,

    Global food production is being hit from seemingly every side.  Thanks to absolutely crazy weather patterns, giant locust armies in Africa and the Middle East, and an unprecedented outbreak of African Swine Fever in China, a lot less food is being produced around the world than originally anticipated.  Even during the best of years we really struggle to feed everyone on the planet, and so a lot of people are wondering what is going to happen as global food supplies become tighter and tighter.  The mainstream media in the United States is so obsessed with politics right now that they haven’t been paying much attention to this emerging crisis, but the truth is that this growing nightmare is only going to intensify in the months ahead.

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    In Australia, conditions have been extremely hot and extremely dry, and that helped to fuel the horrific wildfires that we recently witnessed.

    And everyone knew that agricultural production in Australia was going to be disappointing this year, but it turns out that it is actually going to be the worst ever recorded…

    Australia’s hottest and driest year on record has slashed crop production, with summer output expected to fall to the lowest levels on record, according to official projections released Tuesday.

    The country’s agriculture department said it expects production of crops like sorghum, cotton and rice to fall 66 percent — the lowest levels since records began in 1980-81.

    The continent of Australia is considered to be one of the breadbaskets of the world.  According to the U.S. Department of Agriculture, in 2018/19 Australia exported over 9 million tons of wheat to the rest of the world.

    But thanks to relentless crop failures, Australia has started to import wheat, and that is likely to continue for the foreseeable future.

    So instead of helping to feed the rest of the world, Australia is now relying on the rest of us to help feed them.

    And what is happening this year didn’t just barely break the old records.  In fact, one senior economist says that this will be the worst summer crop production the country has ever seen “by a large margin”…

    “It is the lowest summer crop production in this period by a large margin,” Peter Collins, a senior economist with the department’s statistical body ABARES told AFP.

    Of course if the rest of the world was doing great we could certainly survive a downturn in Australia.

    Unfortunately, that is definitely not the case.

    Right now, billions upon billions of locusts are voraciously devouring farms in eastern Africa and the Middle East.  As I detailed the other day, giant armies of locusts the size of large cities are traveling up to 100 miles per day as they search for food.  When they descend on a farm, all the crops can be consumed literally within 30 seconds.  It is a nightmare of epic proportions, and UN officials are telling us that this crisis is only going to get worse over the next couple of months.

    In Uganda, the army has been called out to help fight this locust plague, but it is making very little difference…

    Under a warm morning sun scores of weary soldiers stare as millions of yellow locusts rise into the northern Ugandan sky, despite hours spent spraying vegetation with chemicals in an attempt to kill them.

    From the tops of shea trees, fields of pea plants and tall grass savanna, the insects rise in a hypnotic murmuration, disappearing quickly to wreak devastation elsewhere.

    The most effective way of fighting these locust swarms is to spray insecticide on them from the air, but even that only produces very limited results.

    However, at least it is better than doing nothing.

    The UN is trying to raise a lot more money to get more planes into the air, because if nothing is done the number of locusts “could grow up to 500 times by June”…

    The U.N. has said $76 million is needed immediately. On Tuesday, U.S. Secretary of State Mike Pompeo during a visit to Ethiopia said the U.S. would donate another $8 million to the effort. That follows an earlier $800,000.

    The number of overall locusts could grow up to 500 times by June, when drier weather begins, experts have said. Until then, the fear is that more rains in the coming weeks will bring fresh vegetation to feed a new generation of the voracious insects.

    Overall, these locusts are affecting nations “with a combined population of nearly 2 billion”, and the amount of food that these locusts are destroying is unprecedented.

    Meanwhile, China has been dealing with the worst outbreak of African Swine Fever in history.

    African Swine Fever does not affect humans, but it sweeps through herds of pigs like wildfire.  There is no vaccine, there is no cure, and once African Swine Fever starts infecting pigs in a certain area the only thing that can be done is to kill the rest of the pigs to keep it from spreading anywhere else.

    Unfortunately, China has not been able to get this outbreak under control, and the losses have been staggering.

    According to the New York Times, the number of pigs that have been wiped out in China already is equivalent to “nearly one-quarter of all the world’s pigs”…

    The disease was first reported in Shenyang, Liaoning Province, in early August 2018. By the end of August 2019, the entire pig population of China had dropped by about 40 percent. China accounted for more than half of the global pig population in 2018, and the epidemic there alone has killed nearly one-quarter of all the world’s pigs.

    But of course China is not the only one dealing with African Swine Fever.

    In fact, cases of African Swine Fever have now been identified “in 50 countries”, and U.S. pig farmers are deathly afraid of what would happen if this disease starts spreading here.

    As a result of this crisis, pork prices in China have gone through the roof, and many families are no longer able to eat pork at all.

    Never before in the modern era have we seen so many major threats to global food production emerge simultaneously.

    There are more than 7 billion people living on our planet today, and we need to be able to grow enough food to feed everyone.

    If we aren’t able to do that, food prices will start to get really high, and people in the poorest areas simply will not have enough food to feed their families.


    Tyler Durden

    Thu, 02/20/2020 – 22:25

  • China Deploys Agricultural Robots And Drones To Fight Virus Outbreak
    China Deploys Agricultural Robots And Drones To Fight Virus Outbreak

    XAG Co., Ltd. was selected by the Chinese government late last month for the deployment of its ground-based robots and unmanned aerial vehicles (UAV) to spray powerful disinfectants across public places in cities where the Covid-19 outbreak is the worse. 

    XAG is using a fleet of R80 Agricultural Utility Vehicle robots with 80-liter (21 gallons) sprayers for ground-based disinfectant operations across public places. 

    The company tweeted several pictures of the R80 in action, spraying disinfectant across a “parking lot outside the office block in Guangzhou.” 

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    Here’s a video of the robot spraying disinfectant in an ambulance, which presumably had a virus-infected patient beforehand. The robots are used to spray disinfectants in areas where it’s too dangerous for humans, considering the virus is airborne and extremely contagious.

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    XAG also deployed the “first-ever ground-to-air disinfection solution.”

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    Justin Gong, vice president and co-founder of XAG, said the ground-based drones and UAVs had established a “three dimensional and integrated” disinfection system.

    Gong said the robots and UAVs offer a unique advantage to cover a wide area while leaving first responders out of harm’s way.   

    He said virus containment operations would be mainly across outdoor public places and those communities that have confirmed or suspected cases of the virus.

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    Gong said operations would also include disinfecting medical and epidemic prevention vehicles, hospitals, and other areas where virus-infected people are being housed.

    Last month, we noted how China was using DJI drones with front-mounted speakers, to fly around towns and yell at anyone who wasn’t wearing a mask. 

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    Other reports included Chinese towns deploying agriculture drones with 19 liters (5 gallons) sprayers. 

    China is using advanced technology to fight a virus that could wind up collapsing its economy. 


    Tyler Durden

    Thu, 02/20/2020 – 22:05

  • South Korean Coronavirus Cases Explode After "Super Spreader" Event
    South Korean Coronavirus Cases Explode After “Super Spreader” Event

    One day after South Korea reported its first coronavirus death and shortly after all of Daegu city’s 2.5 million residents were put on lock-down, the number of covid-19 cases in South Korea has exploded, with 52 new cases reported overnight, representing a third of all the nation’s cases.

    After four largely uneventful weeks in which South Korea had confirmed just 30 cases, the number of cases has soared five fold in just three days, rising from 31 cases on Tuesday  to 156 on Friday (local time), in what appears to be a very aggressive exponential increase.

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    Notably, thirty-nine of the cases are related to a cluster at a church in Daegu, the city that “looks like a zombie apocalypse“,  according to a statement from Korea Centers for Disease Control.

    Earlier in the day, officials said the city of Daegu was facing an “unprecedented crisis” after coronavirus infections that centred on a controversial “cult” church, linked to a branch of the Shincheonji Church of Jesus, surged over the past two days. The city of 2.5 million people, which is two hours south of the capital Seoul, was turned into a ghost town after health officials said the bulk of country’s 31 new cases announced on Thursday were linked to a branch of the Shincheonji Church of Jesus (and now another 39).

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    Mayor Kwon Young-jin made a televised address, urging citizens to wear masks and remain indoors while revealing his concerns that the contagion could rapidly overwhelm the city’s health infrastructure. “We are in an unprecedented crisis,” the mayor told reporters, unaware that the last thing he can afford to do in times like these is tell the truth.

    He ordered the shutdown of all kindergartens and public libraries, according to Yonhap. Schools in the city were considering postponing the beginning of the spring term scheduled for early March. Shopping malls and movie theaters were also empty and the usually busy city streets were quiet. A concert featuring BTS and other K-pop stars that was set for Daegu Stadium on 8 March has been postponed.

    The defense ministry banned troops stationed in Daegu from leaving their barracks and receiving guests. The US military imposed similar restrictions on its army base in the city, which houses thousands of troops, family members and civilian employees, curbing travel and closing schools and child care centers.

    In what the Korean center for disease control called a “super spreader” event, almost half of the country’s total of 82 infections have been linked to a 61-year-old woman who worships at the Daegu church, which has often accused of being a cult.

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    Medical staff move a patient infected with the coronavirus in Daegu. Photograph: AP

    She first developed a fever on 10 February but reportedly twice refused to be tested for the coronavirus on the grounds that she had not recently travelled abroad. She attended at least four services before being diagnosed. So far, almost 40 other members of the church have been confirmed as infected.

    Shincheonji claims that its founder, Lee Man-hee, has donned the mantle of Jesus Christ and will take 144,000 people with him to Heaven, body and soul, on Judgement Day. And if the number of cases continues to grow exponentially, Judgment Day may be in early March.

    Daegu’s municipal government said there were 1,001 Shincheonji members in the city, all of whom had been asked to self-quarantine, with 90 of them currently showing symptoms. Those who have symptoms “will be tested as soon as possible”, Kwon Young-jin said, urging stronger action from the government in Seoul and calling the national response “inadequate”.

    “We plan to test all believers of that church and have asked them to stay at home isolated from their families.”

    The situation was “very grave”, South Korean vice health minister Kim Kang-lip said at a separate briefing.

    Shincheonji said on Thursday that it had closed down all its facilities nationwide.

    “We are deeply sorry that because of one of our members, who thought of her condition as a cold because she had not travelled abroad, led to many in our church being infected and thereby caused concern to the local community,” it said in a statement.

    Separately a man in his 60s from the neighboring Cheongdo county tested positive for the coronavirus after dying Wednesday following symptoms of pneumonia, authorities said. He was among 15 people found to be infected at a hospital.

    * * *

    Meanwhile, a few hundred kilometers west, China continues to pretend it is successfully containing the virus, although it apparently can’t even do that. One week after Beijing reported nearly 15,000 new cases after a change in the definition of “infection”, China reverted back to the original definition in hopes of drastically reducing the number of new cases and boosting people’s confidence it was successfully containing the pandemic. The result was that the number of new cases on Feb 19 was just 391, one of the lowest since the start of the pandemic, and a far cry from the 15,000 new cases reported a week earlier. Alas, in its ambition to get people back to work, the case number was too low and nobody believed it, resulting in even greater self-quarantining as China’s population increasingly believes that Beijing is no longer telling it the truth and is willing to sacrifice the population just so some factories can resume production,

    Meanwhile, as China bounces around between one definition and another, in hopes of finding some “just right” middle ground between reporting too many cases and sparking a market crash, or too few cases and leading to social violence as people on the ground certainly know just how bad it truly is, Beijing is now losing all credibility and even China’s best friend in the US, Bloomberg, writes that “Hubei Changes Virus Count Method With Data Mistrust Growing.” This happened after on Thursday China reported that it had just 349 additional confirmed cases, compared with almost 1,700 additional cases from the day before; the number then doubled to 889 on Friday as China appears to have given up on any pretense at reporting data objectively.

    The outcome appears to be a recreating of the famous surgery scene from Spice Like Us, where China comes up with some made up number, gauges the market’s and media’s reaction, and then China offers a totally opposite number on the next day as it scramble to give everyone what they want while creating the fiction that it is in control.

    The irony, of course, is that the more China manipulates the data, the less anyone will believe a positive outcome for the epidemic and will instead claim that this is just the result of Chinese propaganda: “It points to a rather concerning confusion over how best to officially report the number of cases, leading to a loss of confidence in the true numbers,” said Jeffrey Halley, a Singapore-based senior market analyst with Oanda Asia Pacific Pte. “That could mean that internationally, the rest of the world keeps China in lockdown for longer, which will not be good for the ‘V-shaped recovery’ projections.”

    As reported previously, the latest changes cast doubt over whether the drop in new cases – a positive sign that the epidemic is coming under control at the epicenter – is actually happening. In recent days, China’s leaders have scrambled to project optimism over the outbreak, which has shut down large parts of its economy and plunged industries from retail to aviation into crisis. Companies and factories across China are now being urged to re-start economic activity, while Chinese premier Li Keqiang said on Monday that the outbreak is on “a positive trend.”

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    What Li meant is that Beijing is willing to sacrifice healthy citizens by commingling them with potentially infected ones, if it means that China’s GDP, already set for a record plunge, can be pushed up just a bit. Of course, none of this is lost on the people, and in a country where the biggest morbid fear is one where the middle class rises up and overthrows the communist parasites in charge, there is a distinct possibility that by telegraphing to the people just how worthless their lives are to Beijing, the instead of delivering a “positive trend” for the outbreak, China’s ruthless rulers may soon be on the receiving end of what happens when 1.4 billion Chinese grab the pitchforks and go after those who are willing to risk their lives if only it means that the “quota met” bonus payment for 2020 is made.


    Tyler Durden

    Thu, 02/20/2020 – 21:48

  • After Twitter Poll Goes Badly Awry, Christian Group Blames Satan
    After Twitter Poll Goes Badly Awry, Christian Group Blames Satan

    Authored by Elias Marat via TheMindUnleashed.com,

    An organization that claims to represent Christian lawmakers in the U.S. is crying foul after a Twitter poll asking if the country would be better with more elected officials of the Christian faith went hilariously off the rails.

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    While the group only has a humble 277 followers on Twitter, it still decided to put the question to a vote among the broader Twitterverse – opening itself to the certainty that it would fall victim to a good old-fashioned “poll-jacking” which happens when a large group on social media intentionally subverts an attempt to gather an online opinion.

    When all was said and done, over 106,000 people had replied with an overwhelming 93.7 percent of the vote responding with a decisive “no.”

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    Seemingly not content with simply moving forward discreetly or perhaps just deleting the failed poll, the group decided to step it up a notch with complaints of outright oppression and persecution at the hands of the unkind online hordes.

    The group initially responded with a complaint that “Satanists and Atheists” had subverted the poll, warning the alleged nonbelievers that “God loves everyone and forgives all who ask Him … Salvation is available only through His Son Jesus Christ. John 3:16.”

    In a later post, the group added:

    “View the comments on this thread to see what religious persecution and anti-Christian bigotry looks like in America. Satanists and Atheists piled on this poll and have begun leaving vile messages as well.”

    The claim is an especially strange one for the group to make, especially considering the fact that according to a Pew survey, the U.S. Congress is nearly 90 percent Christian compared to 65 percent of the United States as a whole.

    The National Association of Christian Lawmakers was formed last year by far-right Arkansas Sen. Jason Rapert (R), a politician who warned constituents about the rise of witches in a recruitment email. The group includes former Arkansas Gov. Mike Huckabee and anti-gay extremist Tony Perkins on its board of advisers.

    Senator Rapert also went to war with a popular local pizzeria last February after the pizza place advertised a concert for sludge metal band EyeHateGod with a photoshopped flyer depicting the senator devouring an infant. Rapert complained that the image depicting him “’biting a baby’ with my mouth” was an “affront” to him “as an ordained minister of the gospel and a well known pro-life advocate.”

    At the time, the senator’s social media page was swarmed by both curious supporters and detractors commenters who offered bemused comments about the lawmaker’s alleged taste for eating children, including one commenter who asked:

    “Senator, why do you claim to have a pro life stance but this photo clearly depicts you eating a live baby?”


    Tyler Durden

    Thu, 02/20/2020 – 21:45

  • Wine Prices To Plunge As Millennials Spark Imminent Vineyard Bust
    Wine Prices To Plunge As Millennials Spark Imminent Vineyard Bust

    Rob McMillan, the founder of Silicon Valley Bank’s Wine Division, writes in the 19th annual State of the Wine Industry Report that the US wine industry is “past the tipping point and starting a phase of declining growth in volume.”

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    McMillan said an oversupply of wine would lead to premium juice priced at better levels could be an incentive to reverse declining consumption trends among millennials.

    He noted a bust in the industry is imminent and will lead to “vineyard removals.” The consolidation of the industry is required to curb oversupply consolidations and let the market find a natural equilibrium in prices. The current environment is unhealthy, he added, with wine prices at a five year low.

    Here is McMillan’s perspective of why the wine industry is headed for a hard landing: 

    “…our current oversupply in California and Washington isn’t due to speculative overplanting. It’s due to the wine industry’s growing miss in not providing consumers what they want. That’s not an adverse statement about the quality of what our industry produces. We’ve never made better wine. But based on the industry’s current results, making great wine isn’t good enough for the consumer today. We are increasingly missing the mark on consumer expectations, and our results show it.”

    McMillan warned that the industry must prepare for “a low-growth environment in 2020.”

    “In a low-growth environment, there are likely to be winners and losers, and you want to be on the correct side of that ledger.” 

    In 2018, McMillan said:

    “Sales growth forecasts for the next five years should be tempered. The fundamental underpinnings that created the industry growth are changing, which means the tactics that were relied upon to ride this wave of success to this point will slowly prove flawed without business adaptation.”

    Trends in industry sentiment show that for the first time in four years – a decelerating economy is starting to weigh on producers. 

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    The rapid growth of the last twenty years is coming to an end. Here are the seven industry headwinds developing:

    1. Baby boomers, who control 70 percent of US discretionary income and half of the net worth in the US, are moving into retirement and declining in both their numbers and per capita consumption, while millennials aren’t yet embracing wine consumption as many had predicted.

    2. The industry has reached the point of acute oversupply due to diminishing volumes sold. That will lead to vineyard removals — and fallowing in some cases — and reduced returns for growers.

    3. Absent offsetting promotion of the health benefits of moderate wine consumption, the cumulative impact of negative health messaging will continue to cast a shadow over consumption, particularly for the young consumer.

    4. Wine imports and substitutes are a real and growing threat for mindshare among emerging wine consumers.

    5. A lag in innovating alternative DTC strategies beyond the tasting room and club models is limiting DTC growth for family wineries.

    6. Wine companies aren’t addressing the values of the young consumer in their marketing. We aren’t giving them a reason to buy wine over spirits.

    7. Labor availability is limited, and the price for labor is increasing.

    McMillan predicts that “sales value growth range between 3 percent and 7 percent for the premium wine segment, down about 1 percent from the 2019 sales growth estimate. For the off-premise retail store channel, value will fall between negative 2 percent and 0 percent. Volume will fall in a range between negative 1 percent and negative 3 percent.”

    It appears in the early 2020s, as vineyards go bust – the supply of crush wine grapes will level off and start to decline.

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    The bust of the wine industry is great news for oenophiles, who will now be able to purchase bottles at a reduced cost.

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    However, bad news for vineyards as growth rates in sales has been declining since 2017. Blame the millennials, of course.

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    Millennials have limited interest in wine – that’s why the industry is freaking out because their largest clients are baby boomers – and those folks are getting ready to keel over.

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    To summarize, a perfect storm of forces from an evolving economy is already triggering a wine bust.  However, interest rates via the Federal Reserve could be slammed to zero ahead of the next recession that would almost guarantee zombie vineyards would exacerbate an imbalance in the industry for an extended period. The good news are deflationary pressures leads to lower prices that would lead to more consumption among broke millennials.

    The other thing, baby boomers are nearing their final decades of life, and with millennials shunning wine for seltzer and marijuana – the wine industry must be trembling in their shoes. What’s to come is an entire industry must convince millennials wine is good. Maybe that is done through lower prices and letting the industry go bust. 


    Tyler Durden

    Thu, 02/20/2020 – 21:25

  • Is China Secretly Shipping Nuclear Arms To Pakistan?
    Is China Secretly Shipping Nuclear Arms To Pakistan?

    Submitted by Great Game India,

    On February 12, 2020, GreatGameIndia issued an alert regarding a suspicious shipment off the western coast of India. The ship belonged to a Chinese shipping company blacklisted by the Americans last year and was destined to Pakistan. Further investigation revealed the seized shipment carried launching gear for missiles and that China was secretly shipping nuclear arms to Pakistan, now being examined by two different teams of Indian nuclear scientists. Sources in Coastal intelligence told GreatGameIndia the intercept was based on a tip-off from the Americans who were monitoring the entire fleet of the shipping line believed to be a front of Chinese intelligence.

    COSCO Shipping blacklisted by Americans

    In September last year, the US Treasury department blacklisted two oil tanker subsidiaries of China Ocean Shipping Company (COSCO), a leading Chinese shipping and logistics company for shipping Iranian oil. China Concord Petroleum, Pegasus 88 Limited, Kunlun Shipping Company and Kunlun Holding Company were also sanctioned. The sanctions came just 11 days after drone attacks on the heart of Saudi Arabia’s oil production ARAMCO facility that Washington blamed on Iran.

    The Trump administration was tracking the movement of tankers linked to Bank of Kunlun, a subsidiary of China’s biggest state-run oil company China National Petroleum Corporation, amid signs that the vessels are helping to transport Iranian crude to China in defiance of US sanctions against Tehran.

    The move sent shockwaves through the tanker markets disrupting global shipping trade putting dozens of supertankers off limits to energy traders including Indian Oil Corporation whose charted tanker Da Yuan Hu lifting 145,000 tonnes of Mexican Isthumus oil to Paradip port in eastern India got stranded off Cape Town halting its journey to Dos Bocas Port Mexico from the Port of Singapore.

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    On January 31, 2020, the sanctions against one of the two units of COSCO Shipping were lifted after “Phase One” trade talks with the Chinese in a move to balance the marketplace “without devastating world trade”. Americans hope the sanctions will also limit Tehran’s ballistic missile program and influence across the Middle East. However, recent developments along the Indian coast would force American analysts to think otherwise.

    Military Grade Aircraft launching gears mysteriously land in India

    In December last year, two military-grade aircraft launching gears to assist takeoff of jets from the deck meant for the ‘Royal Saudi Land Forces’ illegally landed at a private port in Kutch district of Gujarat through Pakistan, sending security forces into a tizzy.

    Security sources said the military-grade aircraft launching gears found at the Mundra port were manufactured by only two corporate giants, Boeing (based in the US) and Airbus (headquartered in Europe).

    During the initial probe, custom officials realized that the bill of lading procured from the shipper clearly stated that the consignee was ‘Royal Saudi Land Forces’ and the gears were to reach: ‘Prince Sultan Road, HWY 156 Jizan Saudi Arabia’.

    The most puzzling part was that the Saudis do not have an aircraft carrier in their fleet and diplomats at the Saudi Arabia embassy shied away from making any comments. The issue was hushed up. However, yet another suspicious shipment was intercepted just two months later which revealed the entire plot.

    China secretly shipping nuclear arms to Pakistan

    On February 12, 2020, GreatGameIndia issued an alert regarding a suspicious shipment off the western coast of India. A cargo ship Da Cui Yun operated by COSCO Shipping line carrying missile like machinery and arms was seized and searched by Indian intelligence agencies. The ship arrived at Deendayal Port, Kandla, western India from Jiangyin Port, China and its next destination was Port Qasim in Karachi, Pakistan.

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    Two different teams of nuclear scientists from the Defense Research and Development Organization (DRDO) were flown in to examine the cargo – a large industrial autoclave used for manufacturing composite lining for the solid-fuel ballistic missiles, a dual-use technology that can be used for the production of nuclear warheads as well.

    The ship almost escaped the local port authorities who even issued the crucial “no-objection certificate” after verifying it had no dues as per the norm. The customs authorities were about to issue final clearance for the vessel to set sail when a team of officials entrusted with national security swooped in.

    “Suddenly, however, there was a flurry of activity. Senior Kandla Port officials got calls from New Delhi. Officials of the Directorate of Revenue Intelligence (DRI) and other security agencies reached Kandla,” said a local port official on condition of anonymity.

    Significantly, the destination of the ship was Port Qasim in Karachi, where the Space and Upper Atmosphere Research Commission (SUPARCO), responsible for Pakistan ballistic missile programme, is based. These point to the continuing Pak-China proliferation activities with impunity.

    This is not the first time that a Pak bound ship was detected carrying missile material and wrongly declaring them to avoid detection. During the Kargil conflict, the North Korean ship Ku Wol San was seized at the Kangla port. This ship was carrying missile components, metal casings and Scud missile manuals to Pakistan, which were declared as the water purifying equipment.

    Turkey’s role in Sino-Pak Nuclear Proliferation

    A study by the London based think tank International Institute for Strategic Studies had brought out that A Q Khan network was assisted by the Turkish companies, which imported nuclear related material from Europe, manufactured centrifuge parts and shipped them to Pakistan and other countries. It is strongly believed that Turkey could be possessing a number of centrifuges, with the assistance from Pakistan.

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    When last year, Recep Tayyip Erdogan President of Turkey spoke in favour of producing nuclear weapons at a party convention, the US media pointed out the possibility of Turkey having a nuclear bomb project. The Pak-Turkey clandestine collaboration in nuclear and missile fields appears to be growing very fast. The role appears to have been reversed. While earlier Turkish companies were importing material from Europe and providing them to Pakistan, now Pak is illegally importing nuclear related material from China for Turkey.

    Sources in Coastal intelligence told GreatGameIndia the intercept of the Chinese ship Da Cui Yun was based on a tip-off from the Americans who were monitoring the shipment since it left the Chinese port of Jiangyin. The incident exposed how China was secretly shipping nuclear arms to Pakistan. However, this is not the first time China was caught smuggling arms to foreign nations using the COSCO Shipping line known to be a front of Chinese intelligence.

    COSCO – A front of Chinese Intelligence

    The Chinese navy was linked in 1985 to illegal smuggling in foreign cars, vans, TVs and VCRs out of Hainan island in the South China Sea.

    A COSCO ship was involved in the failed 1996 attempt by China to smuggle 2,000 dismantled AK-47 assault rifles in San Francisco to California street gangs. The smugglers were not COSCO employees — they used a fraudulent American import license and were later jailed by the government in Beijing — but it took American agents posing as Miami crime figures to unravel the operation.

    In 1998, federal lawmakers troubled by COSCO’s reported connections to the Chinese military prevented the company from leasing a former U.S. naval base adjacent to the Port of Long Beach. The same year U.S. intelligence agencies tracked a COSCO freighter from Shanghai to Karachi, Pakistan, with a load of weapons-related goods, including specialty metals and electronics used in the production of Chinese-designed Baktar Shikha anti-tank missiles. The shipment was carried aboard a vessel owned by the company subsidiary COSCO Tianjin.

    Based on information contained in the Cox Report (chaired by California Rep. Christopher Cox, the committee looked into the activities of companies linked to Chinese military and intelligence agencies), CalPERS (California Public Employees Retirement System) had invested millions of dollars in so-called “Red Chip” companies, firms headquartered outside of China but believed to be closely tied to Chinese military or intelligence operations. One of them was COSCO Shipping.

    The Cox Report observed, the Securities and Exchange Commission, the federal agency chiefly responsible for safeguarding the integrity of the nation’s financial markets, “collects little information helpful in monitoring PRC commercial activities in the United States.” What pertinent information might be collected by the Central Intelligence Agency or the National Security Agency is not routinely disseminated outside of the core intelligence community.

    In 2001, China was caught secretly shipping arms and explosives to Cuba. All the arms were aboard vessels belonging to COSCO. At least three arms shipments were traced from China to the Cuban port of Mariel. One of the cargoes was described as dual-use explosives and detonation cord. The explosives were said to be “military-grade” material.

    The Chinese Communist Party’s military organ approved the establishment of COSCO as an arm of the Chinese Navy in 1985. Mr. James Mulvenon stated in his book “Soldiers of Fortune” that COSCO’s establishment “legitimized the use of navy ships for civilian shipping and thus provided a legal cover for the navy’s smuggling.”

    China Ocean Shipping Company, or COSCO, was deemed by the US House of Representatives Task Force on Terrorism and Unconventional Warfare to be a military related entity. According to the Task Force report, “Although presented as a commercial entity, COSCO is actually an arm of the Chinese Military.”


    Tyler Durden

    Thu, 02/20/2020 – 21:05

  • Hackers Trick Tesla Into Breaking Speed Limit By 50MPH With 2 Inches Of Tape
    Hackers Trick Tesla Into Breaking Speed Limit By 50MPH With 2 Inches Of Tape

    Welcome to the future we deserve.

    Technicians at McAfee, Inc. wanted to test out exactly how well Tesla’s Autopilot system worked. So they decided to take a strip of electrical tape and put it across the middle of the “3” in a “35 mile per hour” speed limit sign, tricking the car into thinking the sign said “85 miles per hour”. 

    The test concludes 18 months of research, according to Bloomberg, that illustrate weaknesses in machine learning systems used for automated driving. Steve Povolny, head of advanced threat research at McAfee, says changes in the physical world can “confuse” these systems.

    For the test, McAfee’s researchers used a 2016 Model S and Model X that had camera systems supplied by Mobileye under Tesla’s old agreement with the company that ended in 2016. Tests performed on Mobileye’s newest camera system didn’t reveal the same vulnerabilities.

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    Mobileye defended their technology in a statement to Bloomberg, claiming humans could have also been fooled by the same type of sign modification. 

    “Autonomous vehicle technology will not rely on sensing alone, but will also be supported by various other technologies and data, such as crowd sourced mapping, to ensure the reliability of the information received from the camera sensor and offer more robust redundancies and safety,” Mobileye said.

    Also according to McAfee technicians, Teslas don’t rely on traffic sign recognition.

    Povolny commented: 

    “Manufacturers and vendors are aware of the problem and they’re learning from the problem. But it doesn’t change the fact that there are a lot of blind spots in this industry.”

    The real-world threats of something similar happening are relatively low. Self-driving cars remain in development stage and are mostly being tested with safety drivers behind the wheel. That is, of course, unless you’re one of the “lucky” beta testers driving around with your Tesla on Autopilot. 

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    McAfee’s researchers say they were only able to trick the system by duplicating a “sequence involving when a driver-assist function was turned on and encountered the altered speed limit sign.”

    “It’s quite improbable that we’ll ever see this in the wild or that attackers will try to leverage this until we have truly autonomous vehicles, and by that point we hope that these kinds of flaws are addressed earlier on,” Povolny concluded.

    The weakness isn’t just specific to Tesla or Mobileye technology: it’s inherent in all self-driving systems. 

    Missy Cummings, a Duke University robotics professor and autonomous vehicle expert, summed it up: “And that’s why it’s so dangerous, because you don’t have to access the system to hack it, you just have to access the world that we’re in.”


    Tyler Durden

    Thu, 02/20/2020 – 20:45

  • China Reports Spike In Cases Outside Wuhan & 118 New Deaths
    China Reports Spike In Cases Outside Wuhan & 118 New Deaths

    Summary:

    • Iran confirms 5 cases of COVID-19
    • Daegu, Cheongdo declared ‘special management zones’
    • South Korean soldier tests positive
    • Hubei reports 411 new cases, 115 deaths
    • China reports an additional 3 deaths outside Wuhan and 889 other cases
    • US CDC slaps Japan with L1 travel advisory
    • Seoul mayor orders “cult” church associated with SK outbreak closed
    • Japanese officials defend their handling of ‘Diamond Princess’ quarantine
    • Beijing tightens lockdown after dozens more cases reported
    • As outbreak ex-China accelerates, WHO warns case #s “won’t stay low for long.”
    • Hong Kongers evacuated from ‘Diamond Princess’ after Japanese government confirms 2 deaths
    • Researchers confirm COVID-19 more contagious than SARS and MERS
    • Tim Cook welcomes back employees, customers as Apple reopens some China stores

    * * *

    Update (2020ET): It’s 8:20 am in Beijing, and officials at the NHC have just released coronavirus figures for Thursday.

    Across the country, officials recorded an additional 889 cases, and another 3 deaths. bringing the global total for cases north of 77,000.

    • CHINA REPORTS 889 ADDITIONAL CORONAVIRUS CASES FEB. 20
    • CHINA REPORTS 118 NEW CORONAVIRUS DEATHS FEB. 20
    • CHINA SAYS CORONAVIRUS DEATH TOLL RISES TO 2,236

    CNBC’s Eunice Yoon reporting live from Beijing showed that the capital city’s streets were practically deserted.

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    Meanwhile, in Seoul, the mayor has ordered the closure of a local branch of Shincheonji Church, the Christian “cult” to which the ‘super-spreader’ responsible for infecting dozens in Daegu allegedly belonged.

    • SEOUL MAYOR: TO CLOSE SEOUL UNIT OF SHINCHEONJI CHURCH: YONHAP

    In the US, the CDC has issued a ‘Phase 1’ travel advisory for Japan, a couple days after issuing a similar warning for Hong Kong.

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    To sum up, cases in China outside Wuhan are finally starting to spike; cases in South Korea have more than tripled in three days, and Japan just got slapped with its first travel advisory by the US.

    Still ‘Just the flu’? (For the record, epidemiologists have concluded in the first batch of peer reviewed research that the virus is more contagious than both SARS and MERS).

    * * *

    Update (1900ET): As COVID-19 hysteria descends on South Korea, the Blue House has reportedly designated Cheongdo and Daegu “special management zones”.

    Daegu is the center of the outbreak, which is centered around a cultish church with roughly 1,000 members, most of whom are being tested for the virus after potentially coming in contact with a ‘super-spreader’ – a Korean woman who attended several church services after evading earlier controls.

    As for the meaning of ‘special management zones’, well, Yonhap doesn’t have anything on that yet. But we suspect it’ll be something close to ‘martial law’ as mass quarantines officially become the strategy of choice for dealing with COVID-19 outbreaks.

    The chart isn’t exactly reassuring…

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    * * *

    Update (1820ET): Speak of the devil…

    Just minutes after we posted our last update, where we pointed out that officials in Hubei were late with their nightly numbers, they finally arrived.

    Hubei reported another 411 new ‘confirmed’ cases, along with 115 new deaths, slightly higher than the average from the last few days. Another1,451 patients were discharged, allowing Beijing to stick with its narrative that more patients are recovering than catching the virus, a sign that the outbreak is abating.

    • HUBEI REPORTS 411 NEW CORONAVIRUS CASES, 115 DEATHS FEB. 20
    • CHINA’S HUBEI TOTAL CORONAVIRUS CONFIRMED CASES RISE TO 62,442
    • CHINA’S HUBEI SAYS 1,451 PATIENTS DISCHARGED FEB. 20

    Not like it matters. After China changed its criteria for which cases are counted in the official total for the second time in a week yesterday, the world has shifted its focus to the outbreak outside China, specifically South Korea and Japan.

    The new numbers bring the global total of confirmed cases north of 76,000, with 2,147 deaths.

    * * *

    Update (1815ET): Yonhap is reporting that the first case of coronavirus among a member of the South Korean military has been detected.

    That’s bad news, mostly because soldiers tend to live in crowded barracks, typically in close proximity to other soldiers.

    Which is exactly what Yonhap reported. They also reported that the soldier likely picked up the virus during a visit to his hometown of Daegu, the city at the center of South Korea’s outbreak. 

    A Navy sailor on the southern island of Jeju was confirmed Friday to have contracted the new coronavirus in the first confirmed case among service personnel in South Korea, officials said.

    The sailor, 22, tested positive for COVID-19 in the initial examination the previous day and was finally confirmed earlier in the day, according to the officials.

    He visited his hometown, Daegu, 300 kilometers southeast of Seoul, from Feb. 13 to Tuesday. Upon returning to the base, he showed symptoms, such as coughing, prompting the authorities to immediately quarantine him at the base. He is now at a Jeju hospital.

    It is yet to be known exactly how he contracted the virus. But South Korea has seen a surge in patients in Daegu and the surrounding North Gyeongsang Province in recent days, as the country’s 31st patient attended a church service, along with around 1,000 others. As of late Thursday, the total number of confirmed cases stood at 104, according to health authorities.

    In the wake of high chances of the first coronavirus case among service personnel, the defense ministry decided late Thursday to restrict all enlisted soldiers from vacationing and staying outside their base to meet visitors starting Saturday.

    Over in Beijing and Wuhan, the world is eagerly awaiting the latest round of numbers. The usually arrive around 5:30 ET – meaning that they’re already officially late.

    With all the attention paid to yesterday’s decision to once again change their criteria for counting virus cases, officials must be taking their time making up the numbers tonight.

    * * *

    Update (1420ET): WSJ reports that Japan’s top health officials have defended their handling of the ‘Diamond Princess’ quarantine during a statement to Japan’s parliament, the Diet.

    Japan’s Health Minister Katsunobu Kato told Parliament the two people from the Diamond Princess cruise ship who died had “received the best medical treatment” but couldn’t be saved after catching the novel coronavirus on board. As of Thursday, 634 passengers and crew members were diagnosed with the virus out of 3,063 tested. Slightly more than half have no symptoms at all, officials said, and many of the remainder have only mild fever or a cough. Among patients who tested positive for the virus, 28 were reported in serious condition Thursday.

    Doctors have said the virus can be particularly harmful in elderly patients, and one of the two fatal cases from the Diamond Princess, a Japanese man in his 80s, had pre-existing bronchial asthma and had been treated for angina. The other, a Japanese woman in her 80s without underlying illnesses, came down with a fever on Feb. 5, the same day passengers were told they would be quarantined in their cabins for two weeks, according to health ministry officials. The next day, she started suffering from diarrhea and saw a doctor on board.

    She wasn’t taken to a hospital until Feb. 12 when she started suffering shortness of breath. Her virus test came back positive the following day, and despite treatment with antiviral drugs normally used to treat HIV infection, she died Thursday.

    Asked about the woman’s case, health ministry official Hiroshi Umeda said, “I believe it was handled promptly.” He said the ship was a difficult environment for medical staff but they worked day and night and tried to prioritize the most serious cases.

    The country has been widely criticized for appearing to break quarantine on the cruise ship, which was home to the largest COVID-19 outbreak outside China. More than 700 passengers who tested negative for the virus disembarked the ship on Wednesday and Thursday.

    * * *

    Update (1415ET): A group of 59 Hong Kong police officers has been quarantined after a fellow officer tested positive for the virus, according to a statement released publicly by the city’s police.

    * * *

    Update (1250ET): Less than an hour ago, we mentioned that Beijing’s heavy-handed virus-fighting measures had become the subject of an intense “public debate” about whether they were doing more harm than good.

    Well, according to an unconfirmed report from the Epoch Times’ Jennifer Zeng, party officials in Beijing are upgrading its “epidemic prevention” status to “Wuhan-level” – meaning a complete lockdown where residents aren’t allowed to leave their homes without specific permission.

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    Another tweet sent earlier in the day reported new restrictions being imposed at a Beijing apartment complex.

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    How much longer can the party keep this up before it damages public confidence to a degree that can’t be repaired.

    * * *

    Update (1200ET): In what appears to be yet another consequence of Beijing’s rushed push to get all of China “back to work” nearly two weeks ago, the Global Times, a Chinese tabloid that also publishes in English.

    A hospital in Central Beijing has reported 36 novel coronavirus cases as of Thursday, a sharp increase in the number of cases reported in the capital city. The new cases bring Beijing’s total to 45, stoking fears that the outbreak could accelerate.

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    Among the infected at Fuxing Hospital in Beijing’s Xicheng district were eight medical workers, nine cleaning staff and 19 patients, along with members of their families.

    These confirmations follow reports that Beijing officials quarantined whole office buildings following after some employees were suspected of having the virus.

    “Considering 36 confirmed cases were found in Fuxing Hospital, it is more about one case of multiple infections rather than an epidemic of the whole area,” Wang Guangfa, director of the department of respiratory and critical care medicine at Peking University First Hospital, told the Global Times on Thursday.

    “This coronavirus issue is big. It will effect a lot of companies, and I think the market’s have underestimated what a big supply-side shock this is,” said Mohammad El-Erian, Bill Gross’s former No. 2 man at PIMCO and a widely watched economist who works now with PIMCO parent Allianz.

    Peking University People’s Hospital, another major hospital in Beijing, confirmed that it had received three patients carrying the virus earlier this week on Feb. 17. Already, a total of 164 medical workers at the hospital have been placed under close medical observation after they had “close contact” with the patients – something that seems almost unavoidable for nurses and doctors.

    A total of 164 people including medical staff at People’s Hospital who have had close contact with the patients have been put under close The hospital said it had conducted coronavirus tests on 251 personnel, and so far, they’ve all been negative.

    In other news, another analyst has told the GT that Apple’s iPhone sales in China will shrink 40% to 50% in the near term after the company closed all its retail stores in the country earlier this month. Those stores have only just started to reopen.

    Liang Zhenpeng, a senior industry expert, told the Global Times on Thursday the COVID-19 outbreak has dealt a heavy blow to the sales of all mobile phone suppliers in China, including Apple.

    “The iPhone’s sales in the first quarter of this year are likely to be less than half of the same quarter in 2019,” he said. “Mobile phone sales, both online or offline, are very difficult during this period, because the supply chains can hardly be normalized.”

    Apple CEO Tim Cook said on his Sina Weibo account, China’s Twitter-like social media, that the company is welcoming back employees and customers and is looking to work closely with their manufacturing partners to get everything back on track.

    We suspect this is what triggered the market plunge over the last 30 minutes.

    Circling back to Beijing, the municipal officials said that all hospitals in Beijing should “accelerate hospitalization of patients and try their best to diagnose suspected cases to treat the infected patients at the earliest time.”

    So far, the confirmed cases in the city have been scattered around 15 of its 16 districts.

    The hysteria surrounding the outbreak across China has actually sparked an interesting public debate – something you don’t see much in China – about whether all of the heavy-handed government measures – the quarantines and lockdowns and roadblocks – and the work stoppages are really necessary.

    Some even contend that by impoverishing regular Chinese people via work stoppages that damage the economy, the government might be doing more harm to the population than the virus has, according to the New York Times.

    With hundreds of millions of people in China now essentially living in isolation and its economy nearly at a standstill, experts in the country are increasingly arguing that Beijing’s efforts to fight the coronavirus are hurting people’s lives and livelihoods while doing little to the stop the virus’s spread.

    If the country becomes poorer because of emergency health measures, they say, that drop might hurt public health more than the virus itself.

    The debate – including questions about whether mandatory 14-day quarantines, roadblocks and checkpoints are really necessary in areas where there have been few cases – is unusual in a country where dissent is usually censored.

    It comes as China reported a significant decrease in new coronavirus infections on Thursday, as health officials changed the way they counted confirmed cases for the second time in over a week.

    Of course, President Xi and China’s senior economic officials claim that there won’t be any economic pullback, since Beijing is obviously winning the ‘People’s War’.

    * * *

    Update (1010ET): Talk about a spike in deaths: Iran is now reporting 9 deaths after shocking the world by revealing that two Chinese nationals infected with the virus had died in the city of Qoms earlier this week.

    The Iranian regime has reportedly imposed a China-style crackdown on Qoms, deploying military and crowd-control police across the city.

    It’s just the latest sign that the cases and deaths ex-China are accelerating.

    CNBC’s Eunice Yoon reports that Beijing has warned Hubei not to allow people back to work before March 10.

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    Local leaders said yesterday that they would launch a special financing vehicle to help struggling companies in the province survive the outbreak.

    Following the WHO’s daily press conference, Director General Dr. Tedros said the WHO had confirmed 1,000 cases outside mainland China (with more than half of them infected aboard the ‘Diamond Princess’), and 7 deaths, likely excludes some of the deaths announced over the past 12 hours. Though he added that the data coming out of China “appeared to show a decline in new cases.”

    “Outside China, we have seen a steady drip of new cases, but we have not yet seen sustained local transmission, except in specific circumstances like the Diamond Princess cruise ship,” he added.

    More ominously, Dr. Tedros exclaimed that the outbreak is far from over, and if governments don’t take adequate steps to fight the virus, the number of cases outside China “won’t stay low for very long.”

    Worried about more shortages of personal protective equipment like facemasks, Dr. Tedros pleaded with a dozen different manufacturers to do whatever they can to keep up appropriate global supplies.

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    The director said the WHO expects to have more data from two clinical trials for treatments in roughly 3 weeks.

    Since we haven’t posted a breakdown of new cases yet today, we figured we’d share this list of countries, cases and deaths courtesy of the Associated Press:

    According to the Associated Press, the latest figures provided by each government’s health authority as of Thursday in Beijing are:

    • Mainland China: 2,118 deaths among 74,576 cases, mostly in the central province of Hubei
    • Hong Kong: 65 cases, 2 deaths
    • Macao: 10
    • Japan: 727 cases, including 634 from a cruise ship docked in Yokohama, 3 deaths
    • Singapore: 84
    • South Korea: 51, 1 death
    • Thailand: 35
    • Taiwan: 24 cases, 1 death
    • Malaysia: 22
    • Vietnam: 16
    • Germany: 16
    • United States: 15 cases; separately, 1 U.S. citizen died in China
    • Australia: 14
    • France: 12 cases, 1 death
    • United Kingdom: 9
    • United Arab Emirates: 9
    • Canada: 8
    • Iran: 5 cases, 2 deaths
    • Philippines: 3 cases, 1 death
    • India: 3
    • Italy: 3
    • Russia: 2
    • Spain: 2
    • Belgium: 1
    • Nepal: 1
    • Sri Lanka: 1
    • Sweden: 1
    • Cambodia: 1
    • Finland: 1
    • Egypt: 1

    In other news, UK passengers aboard the ‘Diamond Princess’ will be evacuated by their government on Friday. The chartered evacuation flights (following the standard template) will land at Boscombe Down airbase in Wiltshire. Elsewhere in the anglosphere, Australia has extended its travel ban for arrivals from China into a fourth week. It will last until Feb. 29, the Guardian reported.

    * * *

    Hours after Japanese press reports claimed that two passengers who contracted COVID-19 aboard the ‘Diamond Princess’ died yesterday – news that was later confirmed by Japanese authorities – South Korea reported its first fatality while one of its major cities asked citizens to stay inside and avoid venturing outdoors, according to the Washington Post.

    According to Japanese government officials, both of the virus-related fatalities were Japanese citizens in their 80s who had been moved off the ship more than a week ago for treatment in a Japanese hospital, though the government has so far declined to release names.

    The latest reports Thursday morning confirmed another 13 cases aboard the DP bringing the total to 634. The odds that individuals being released from the 2 week quarantine on Thursday and Friday might have contracted the virus, but have yet to show symptoms, remains high. The death in South Korea raised the death toll ex-China to 10.

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    The speed is hardly a surprise for those who have been paying attention to all of the new research, instead of dismissing it for being ‘alarmist’ and ‘not peer reviewed’.

    Finally, earlier this week, researchers published the largest study yet of the outbreak, which confirmed that COVID-19 is more contagious than SARS and MERS, leaving it on par with seasonal influenza.

    Still, experts insist that the virus’s fatality rate is probably around 2%, meaning that it’s less deadly than SARS, but the wider spread will result in more deaths, CNN reports.

    “My sense and the sense of many of my colleagues, is that the ultimate case fatality rate … is less than 2%,” Dr. Anthony Fauci, director of the National Institute for Allergy and Infectious Diseases, told CNN’s Jim Sciutto on “New Day” Tuesday. “What is likely not getting counted is a large number of people who are either asymptomatic or minimally symptomatic, so the denominator of your equation is likely much much larger.”

    “So I would think at tops it’s 2% and it likely will go down when all the counting gets done to 1% or less. That’s still considerable if you look at the possibility that you’re dealing with a global pandemic,” he added.

    Even as President Xi does everything in his power to present an image of success to the Chinese people – in his speeches, he claims the Chinese government’s strict quarantines have been an unmitigated success – global experts, including the WHO, have warned that the disease will continue to spread globally, and that the end of this crisis is still far from certain.

    And as new confirmed cases dropped substantially on Wednesday in Hubei, everywhere else, the rate of new infections is accelerating.

    In South Korea, the number of cases soared by almost two-thirds to 104 overnight, further emphasizing our observation that the number of cases ex-China has started to accelerate notably as the curve starts to resemble an exponential progression.

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    One WHO health expert told a Japanese TV station on Thursday that the virus is “a moving target” making it difficult to collect information and treat people: “Nobody has ever had to deal with this situation before, this is a new virus on a ship with 4,000 people, there are no guidelines for that.” He added that he suspects there was a substantial amount of transmission before it arrived in Yokohama, adding that it was “not possible” to isolate everybody individually.

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    The WHO senior epidemiologist was responding to claims made by another expert in infectious disease that the Japanese had failed to observer proper quarantine protocols.

    Back in Korea, the mayor of Daegu, a city of 2.5 million where 10 South Koreans contracted the disease from a church service, asked residents to stay indoors. Iran also reported two infected that then died.

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    Experts suspect that one woman in Daegu may have infected at least 40 others by going to her Christian church, according to Yonhap. The alleged ‘superspreader’ is the reason for the huge jump in new cases on Thursday. Experts say the city is now facing an “unprecedented crisis” following the spike in cases.

    “We are in an unprecedented crisis,” Daegu’s mayor, Kwon Young-jin, told the press.

    Cases are also surging in Singapore, where Deutsche Bank confirmed that an employee in its Singapore office had contracted the virus.

    Adding to its woes, Iran reported three new cases on Thursday a day after it confirmed two virus-related deaths in the city of Qoms.

    Warnings about the virus’s economic blowback are increasing, as Goldman said Thursday that stocks aren’t completely pricing in the risks from the virus.

    Meanwhile, Air France-KLM, Qantas, and the global container shipping giant Maersk became the latest companies to warn about the financial impact from the continued spread of the coronavirus.

    As President Xi balances the risks to tens of thousands of lives on one hand, and keeping his promise to double the size of China’s economy by 2020 on the other, it seems the leadership in Beijing are beginning to believe their own propaganda. Premier Li Keqiang, Xi’s No. 2 who is in charge of the committee managing the crisis, local governments should seek to increase the rate of resumed production and work, according to China Central Television.

    Put another way: Come on in, the water’s fine, and if you get the virus and die, we’ll cremate your body and tell your family you died of “pneumonia.”

    China’s smartphone shipment declined 50%-60% during the 2020 Spring Festival holidays due to the coronavirus outbreak. About 60 million smartphones remain unsold.

    Chinese officials are pulling out all the fiscal and monetary stops to protect China’s damaged economy, and on Thursday local officials from Hubei announced a new lending scheme – a “special financing vehicle” – worth 50 billion yuan (more than $7 billion) to stabilize financing for local companies.

    To be sure, the drop in new cases last night was largely caused by health officials reversing their decision to include “clinically diagnosed” patients – i.e. those who haven’t yet tested positive due to a shortage of effective tests – in the case totals.

    The spate of deaths rattled investors overnight, and US equity futures are pointing to a lower open on Thursday, and a rush of risk-off trading in Asia has pushed the BBG dollar index to a 4-month high following the latest piece of evidence that the coronavirus isn’t simply “another flu”.


    Tyler Durden

    Thu, 02/20/2020 – 20:31

  • Houthi Missiles Target Aramco Facility Just After Pompeo Arrives In Saudi Arabia
    Houthi Missiles Target Aramco Facility Just After Pompeo Arrives In Saudi Arabia

    Saudi Arabia’s air defense Patriot missile systems were active at the coastal city of Yanbu in the early Friday morning hours after ballistic missiles were inbound, believed launched by Shia Houthi rebels out of Yemen. 

    Crucially, the Red Sea city of Yanbu is site of a large state-owned Saudi Aramco oil refinery, the likely intended target given the prior Sept.14 large scale attack on Aramco facilities which was also claimed by the Houthis. 

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    Yanbu is nearly 600 miles from Yemen, meaning sophisticated missile systems were used – likely the Burkan 2 – which in the past Washington has accused Iran of supplying. 

    Spokesman for the Saudi-led coalition, Col. Turki Al-Maliki, was cited in the Saudi Press Agency as saying the launch originated in Yemen’s capital of Sanaa, but that Patriot anti-air missiles intercepted the rockets. 

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    Al-Maliki furhter blamed the Houthi rebels for targeting “cities and civilians”. Sanaa remains under control of the Houthis after years of civil war which has witnessed Saudi and US military intervention against them since 2015. 

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    “The Royal Saudi Air Defense intercepted ballistic missiles launched by the terrorist Iran-backed Houthi militia towards Saudi cities,” the kingdom said in the statement.

    “The missiles were launched in a systematic, deliberate manner to target cities and civilians, which is a flagrant defiance of the International Humanitarian Law.”

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    Crucially, earlier in the day US Secretary of State Mike Pompeo arrived in Saudi Arabia where he met with King Salman and Crown Prince Mohammed bin Salman to discuss deterring Iran’s regional ambitions. 

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    Pompeo had reportedly just wrapped up his last meeting of the night with MbS when the attack happened. 

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    No doubt, the US will take the timing of the launch to be a deliberate message and will likely ultimately point the finger at Tehran. 


    Tyler Durden

    Thu, 02/20/2020 – 20:25

  • In First Visit To Libya, US Ambassador Meets Only With Haftar While Ignoring Tripoli
    In First Visit To Libya, US Ambassador Meets Only With Haftar While Ignoring Tripoli

    This is hugely revealing of where Washington stands on the now nine year old Libya conflict, which has recently seen former CIA asset Gen. Khalifa Haftar attempt to force the country under his control by his months-long assault on the capital of Tripoli. 

    US Ambassador to Libya Richard Norland, who had set up the embassy outside the country in neighboring Tunisia, for the first time this week visited the war-torn country which was thrown into chaos by the 2011 US-NATO intervention against Gaddafi. 

    Ambassador Norland met only with Gen. Haftar, head of the Libyan National Army (LNA), in Benghazi and reportedly didn’t even go to Tripoli. 

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    US Ambassador to Libya Richard Norland met with Khalifa Hafter this week. Image via Libya Review.

    On paper at least, Washington still officially supports the UN-recognized Government of National Accord (GNA) in Tripoli under Prime Minister Fayez al-Serraj. However, starting last April President Trump caught many in his own administration off guard when he unexpectedly thanked the renegade general for “securing Libya’s oil resources” at a moment he attempted to wrest control of the country from the GNA in Tripoli.

    Turkey and other backers of Tripoli will no doubt take note. Erdogan is the GNA and Serraj’s main military backer, and on Wednesday vowed that “if international efforts do not lead to a solution, we will support the reconciliation government until it controls the whole country.” He further stressed that “the European Union has no authority to make a decision on Libya,” after the EU announced it would send warships to enforce a UN arms embargo on the country.

    A US embassy statement claimed Norland met with Hafter as part of ongoing efforts to secure a ceasefire and ‘‘to reaffirm the importance of a negotiated settlement’’.

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    It said that the Ambassador ‘‘noted General Haftar’s stated commitment to a permanent ceasefire and reiterated the commitment of the Berlin participants to de-escalation, the arms embargo, and a political solution to the conflict’’.

    But perhaps most telling is that Norland has yet to even set a date to meet with Prime Minister Serraj, only saying it would happen “as soon as security conditions permit”.


    Tyler Durden

    Thu, 02/20/2020 – 20:05

  • Moscow Mules: NYT Secret Sources Claim Russia Backing Trump Re-Election
    Moscow Mules: NYT Secret Sources Claim Russia Backing Trump Re-Election

    The New York Times would like everyone to know that if Trump is re-elected in November, it wasn’t because of his accomplishments, the economy, or packed stadiums full of dedicated supporters.

    Nope – Putin’s at it again!

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    In an unbelievable Thursday report, the Times claims that five anonymous sources leaked the details of a Feb. 13 briefing to House Lawmakers by intelligence officials warning that Russia has already been interfering in the 2020 election.

    So – the Kremlin wants the president who, according to political analyst Ian Bremmer, has been tough on Russia – instead of, say, Bernie Sanders – the Democratic socialist who honeymooned in Moscow and would likely crash the US economy, thus weakening it, with his draconian socialist policies.

    The Times report gets better; the House briefing reportedly angered President Trump so much that he berated outgoing director of national intelligence, Joseph Maguire, and that he was particularly irritated that Rep. Adam Schiff (D-CA) was included in the session. The report implies that Maguire was replaced with pro-Trump ambassador to Germany, Richard Grenell, as a result of the incident. 

    During the briefing to the House Intelligence Committee, Mr. Trump’s allies challenged the conclusions, arguing that Mr. Trump has been tough on Russia and strengthened European security. Some intelligence officials viewed the briefing as a tactical error, saying that had the official who delivered the conclusion spoken less pointedly or left it out, they would have avoided angering the Republicans.

    That intelligence official, Shelby Pierson, is an aide to Mr. Maguire who has a reputation of delivering intelligence in somewhat blunt terms. The president announced on Wednesday that he was replacing Mr. Maguire with Richard Grenell, the ambassador to Germany and long an aggressively vocal Trump supporter. –New York Times

    Moments after the Times report was published, CNN immediately picked it up for their dozens of viewers.

    And of course, the hot-takes:

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    https://www.zerohedge.com/political/moscow-mules-nyt-secret-sources-cla…


    Tyler Durden

    Thu, 02/20/2020 – 19:45

  • "A Bond Yield Soars Over 1,000%": Lebanon Bonds Savaged Ahead Of Imminent Maturity
    “A Bond Yield Soars Over 1,000%”: Lebanon Bonds Savaged Ahead Of Imminent Maturity

    Though international financial press has tended to pay little attention to distressed Lebanon, this week was different as the country’s dollar-denominated bonds maturing next month were savaged in their worst day on record. 

    “A bond yield soars to more than 1,000%? It just happened with Lebanon,” Bloomberg reported. It’s next maturing Eurobond, $1.2 billion of notes due on March 9, plunged 17 cents on the dollar Wednesday to 55 cents, which sent its yield to maturity (which is in less than 3 weeks) soaring above 1,700%.

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    Beirut, Lebanon. Image source: Alamy/The Guardian

    The tiny and still protest-racked Middle East country further has a $700m Eurobond due to mature in April, and an additional $600m repayment due in June.

    “Most of Lebanon’s other Eurobonds have fallen to below 35 cents, while its five-year credit-default swaps hover around 12,730 basis points, the highest in the world,” Bloomberg reported further. 

    Given foreign currency deposit inflows have dried up, and a shortfall of dollars has fueled the crisis — even preventing banks from allowing clients to access their cash for the past months, defaulting on the eurobonds for the first time increasingly looks to be the only option as Lebanon continues to precariously defy financial gravity.

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    Bloomberg also said Beirut is now looking into the sale of bonds by local banks to foreign investors.  Lebanese Parliament Speaker Nabih Berri has further floated debt restructuring as the best solution for looming Eurobond maturities.

    Lebanon’s banking association urged Lebanese President Michel Aoun on Thursday to approach the crisis in “technical way far from politics” — as losses and piling pressure continues on banks.

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    Lebanon’s Al-Akhbar newspaper reported this week that banks including Citigroup Inc., Rothschild & Co. and JPMorgan Chase & Co. are being reached out to for technical advice on how the country should handle the imminent crisis.

    An International Monetary Fund team is also now in Beirut for consultations and to advise on a way forward in the crisis. If the IMF’s recent “experience” with handling Argentina’s ongoing pre-default crisis is any indication, expect disaster.


    Tyler Durden

    Thu, 02/20/2020 – 19:25

  • Why Is Maduro Still Pushing The Petro?
    Why Is Maduro Still Pushing The Petro?

    Authored by William Luther via The American Institute for Economic Research,

    In a recent Wall Street Journal article, Mary Anastasia O’Grady writes that Venezuela’s “National Superintendency for the Defense of Socio-Economic Rights is reportedly pressuring stores to accept the government’s new digital fiat currency, the petro.” The Venezuelan government claims its digital currency, which launched in early 2018, is backed one-for-one by a barrel of oil. The petro is also intended to circulate at a fixed exchange rate with the bolívar soberano, the latest iteration of Venezuela’s fledgling currency. 

    Ms. O’Grady quotes me summarizing some of the work I have done with Josh Hendrickson and Thomas Hogan, which shows that a government can get its citizens to use its preferred money so long as it is sufficiently big or is willing to levy sufficiently large punishments. But she leaves another question unanswered: why would the Venezuelan government prefer the petro?

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    Three reasons stand out.

    1. Avoiding U.S. Sanctions

    Venezuela relies heavily on oil revenues. According to OPEC, oil revenues typically account for around 99 percent of Venezuela’s total export revenues. And, historically, much of those oil exports have gone to the U.S. However, its oil exports fell by a third in 2019, in large part because of economic sanctions levied by the U.S.

    To fully appreciate the nature of the problem, it is useful to make a distinction between primary and secondary sanctions. Primary economic sanctions levied by the U.S. government prevent Americans from purchasing oil from Venezuela. However, the U.S. government has also announced that it will impose sanctions on anyone else trading with Venezuela. And these secondary sanctions have been pretty effective.

    Why are U.S. secondary sanctions so effective? J.P. Koning is certainly correct when he writes that most companies and countries do not want to risk losing access to U.S. markets. But he probably goes too far in claiming this “has very little to do with the U.S. dollar” functioning as the world’s reserve currency. The U.S. government has a much easier time monitoring international transactions executed in U.S. dollars.

    International transactions executed in U.S. dollars are typically cleared in a New York bank. Those banks know their customers and are obliged to hand over transactions data to the U.S. government when subpoenaed or if they suspect a crime is being committed.

    If the international transaction is executed in some other currency, like euros, the information is a little more difficult for the U.S. government to access. Of course, most European banks will refuse to clear the transaction as well since the U.S. government can require they hand over the relevant transactions data, in which case they would be found to have violated sanctions by processing the transaction, or they would lose access to U.S. markets on grounds of non-compliance; and, since most international transactions are executed in U.S. dollars, a European bank that cannot transfer money to and from U.S. banks will struggle to serve its international transactions-making customers. 

    Nonetheless, the risk of detection is probably a little lower than it would be if the transaction were made in U.S. dollars. And, as a result, the transaction is more likely to be executed.

    The international financial plumbing has a lot of pipes running to and from the U.S. And that gives the U.S. a lot of power to levy sanctions, not just on its own citizens, but also on citizens and companies of other countries interested in international trade.

    You can probably see where this is going. If Venezuela were able to create a parallel financial system, one with no pipes going to and from the U.S., it could make and receive international transactions with even less risk of detection than is afforded by other national currencies, like the euro, ruble, or renminbi.

    That’s where the petro comes in. As a digital currency, it enables one to send or receive funds virtually anywhere around the world. And, to the extent that those transactions are disconnected from the U.S. financial system, they are much less likely to be detected by the U.S. government. 

    Again: the sanctions still apply. But, by conducting transactions in petros, they are easier to get around.

    Why, then, does Venezuela push the petro at home? Why not just require it for international transactions? For one, few will be willing to accept the petro if there isn’t a very big market for petros. Hence, by increasing the demand for petros at home, Venezuela makes it less risky for foreigners to accept them — if only for a short period of time.

    2. Internal Monitoring

    For international transactions, the petro offers those interested in skirting U.S. sanctions some financial privacy not afforded by traditional cross-border electronic transfers. For internal transactions, in contrast, it almost certainly offers far less financial privacy than hand-to-hand currency.

    As Josh Hendrickson and I explain in a recent working paper, hand-to-hand currency — cash — affords a lot of financial privacy. There are drawbacks to using cash, to be sure. 

    Cash does not bear interest. It is easier to lose and easier to steal than balances held at a bank — and less likely to be insured due to loss or theft. It is more cumbersome for high-valued transactions, since one must carry many notes, and odd-amount transactions, since one must provide the correct denominations. And it typically requires the sender and receiver to be physically present in the same location when funds are transferred.

    But, for relatively small, local transactions where financial privacy is important, cash is still king.

    It is easy to imagine, then, why the Venezuelan government might want to push its citizens to swap physical bolivares for digital petros even in the absence of international sanctions. The petro makes it much easier to monitor transactions — and punish those conducting transactions inconsistent with the prevailing government’s objectives. 

    It is difficult to mount much opposition without funding. And it is difficult to raise funds for an opposition movement if would-be contributors worry they will be caught and punished. By requiring petro use, the Maduro regime tightens its grip on power.

    3. Cash Shortages

    Finally, widespread petro use would presumably help Venezuela with another one of its self-inflicted problems: cash shortages.

    When the money supply (i.e., cash and deposit balances) increases, as it tends to do quite rapidly in Venezuela, the purchasing power of that money falls. As a result, more cash is needed to make routine transactions. But Venezuela does not print its bolivares notes. And, for obvious reasons, the private companies willing to crank out its ever-increasing supply of bolivares notes are not willing to receive payment in bolivares.

    This has led to some amusing headlines. In April 2016, Bloomberg reported that Venezuela Doesn’t Have Enough Money to Pay for Its Money. In July 2018, the Economist reported that Venezuelan cash is almost worthless, but also scarce. The reality on the ground is far from amusing, though. The inability to make routine transactions leads to a decline in production, leaving ordinary Venezuelans even poorer than they already were.

    There are two solutions to this problem.

    • The first (and probably more benevolent) solution is to manage your money well. In the absence of hyperinflation, you don’t have to continuously print up vast quantities of ever-larger denomination notes. But managing your money well first requires getting your fiscal house in order. And that can be difficult to do when you are trying to maintain a populist winning coalition.

    • The second solution is to convert transactions executed in cash into those conducted with digital balances. By reducing the reliance on cash in normal times, you also reduce the absolute increase in demand for cash balances as the broader money supply increases. In the limit, where no one uses cash, you eliminate the need to print notes altogether.

    If the National Superintendency for the Defense of Socio-Economic Rights is successful in pressuring stores to accept the petro, it would serve the Maduro regime well. By making it easier to avoid sanctions, the petro enables the government to regain some of its lost oil revenues. By making it easier to monitor domestic transactions, the petro aids efforts to stamp out political opposition. And, by reducing the need to print up so many new notes during periods of hyperinflation, the petro reduces the likelihood and magnitude of cash shortages. 

    Alas, in helping the Maduro regime maintain power, the petro seems unlikely to improve the lives of ordinary Venezuelans.


    Tyler Durden

    Thu, 02/20/2020 – 19:05

  • US Agency Which Secures President's Communications Says Its Systems Were "Breached" 
    US Agency Which Secures President’s Communications Says Its Systems Were “Breached” 

    A US defense agency responsible for securing the communications of the president and senior officials has said it believes personal data from its systems were “compromised” during a 2019 data breach. 

    Reuters broke the story Thursday, based on a letter sent from the Defense Information Systems Agency (DISA) to potential victims of the high level breach: 

    The U.S. defense agency responsible for secure communications for the U.S. president and other high-level officials said social security numbers and other personal data in its network may have been “compromised”, in a letter seen by Reuters that was sent to potential victims.

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    Image source: Bloomberg

    The letter identifies the breach as occurring between May and July 2019, and involved personal data possibly compromised “in a data breach on a system hosted by” the agency.

    The agency employs some 8,000 military and civilian employees and is under the Department of Defense. 

    It’s believed that among sensitive data leaked are Social Security numbers and other personnel information; however, it’s as yet uncertain whether the data was stored on a classified system.

    A follow-up statement by a DISA spokesperson confirmed that, “The Defense Information Systems Agency has begun issuing letters to people whose personally identifiable information may have been compromised in a data breach on a system hosted by the agency.”

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    It noted further: “While there is no evidence to suggest that any of the potentially compromised PII was misused, DISA policy requires the agency to notify individuals whose personal data may have been compromised,” according to Tech Crunch.

    While there’s no indicator or evidence shared thus far as to who or what entity may have been behind the breach, one report highlights that “Last week, the Justice Department charged four members of the Chinese military with hacking into Equifax, the credit rating agency, which saw more than 147 million credit reports stolen.”

    Chinese state-linked hackers are also believed behind broader efforts to breach US federal systems such as the Office of Personnel Management.


    Tyler Durden

    Thu, 02/20/2020 – 18:45

  • The Rate Of Diamond Princess Infections Suggest Worldwide Infections Are Much Higher Than Official Reports
    The Rate Of Diamond Princess Infections Suggest Worldwide Infections Are Much Higher Than Official Reports

    Submitted by Eric Ross, Chief Investment Strategist of Cascend

    Summary: The Diamond Princess cruise ship is the largest controlled COVID-19 coronavirus infected population outside of China

    • 20% of the ship were infected over three weeks
    • From this, it suggests the rate of official reported infections (largely in China) is likely too low
    • This corroborates well with what our models have been saying: official reported infections are likely too low
    • From our models, far more people have likely been infected, but the death rate is also (thankfully) coming in lower than expected – worse than the flu, but perhaps in-line or lower than SARS, and definitely not a death sentence
    • Two passengers died last night from the Diamond Princess (male 87 and female 84) after being airlifted from the ship to a hospital a week ago, which implies a 1-2% death rate
    • And 14 days might not be long enough to conclusively prevent COVID-19 transmission, from the Diamond Princess experience, although passengers have now been released

    The rate of Diamond Princess infections suggest worldwide infections are likely much higher than official reports

    • From the log scale chart below, the rate of Diamond Princess infections is much higher than infections suggested by official data (on log charts, lines with the same slope have the same growth rates)
    • Additionally, the Diamond Princess growth is very stable along the growth line versus the official data which doesn’t seem to follow a growth trend
    • Extending the fitted Diamond Princess line back to Patient Zero shows the first patient likely occurred on 21 January 2020 – in very good agreement with the actual assumed Patient Zero arriving on the cruise on the afternoon of 20 January
    • There is a slight possibility that massive quarantines in Hubei and China overall have dramatically slowed the infections rate, but we believe other possibilities are more likely

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    Cruise ships give us some of the best looks of the COVID-19 coronavirus

    • This is as close to a clinical trial as we will likely get
    • We can study rates of infections directly
    • An isolated, fixed-number population
    • No interaction with other populations (different from, say, Wuhan where 5m people were said to have fled before quarantine)
    • And free from lack of testing kits, medical staff, Chinese government determinations of “acceptable diagnosis techniques”, self-treating patients, and other data influences (organic or political)

    Actually, the Diamond Princess cruise infection rates should be much lower than in normal cities

    • Passengers who have tested positive for COVID-19 have been evacuated to onshore quarantined medical facilities (so only spread before symptoms manifest)
    • Cruise passengers have been largely quarantined in their rooms (except for short breaks for fresh air, much like prison), thus likely keeping measured spread rates much lower than in a city where there are many modes of interactions (and thus transmission)
    • Passengers can’t get off the ship without permission (unlike in Wuhan where 5m people were said to have left just before quarantine)
    • Everyone on the ship is being closely monitored
    • And passengers and staff are keenly aware of any slight symptoms, and quick to report
    • Additionally, passengers with medical need are quickly ferried off the ship to an onshore quarantined medical facility

    Several medical professionals have criticized the Japanese efforts on the Diamond Princess

    • The World Health Organization (WHO) and the U.S. Centers for Disease Control (CDC) both commended Japan’s handling of the cruise ship quarantine
    • As of 12 February 2020 all infections (174 at that point) were deemed to have been contracted BEFORE quarantine
    • However no update to this has been provided
    • Did the next 447 infections occur from a longer infectious timeframe? (i.e longer than 14 days?)
    • Or did these infections occur because of a breakdown of quarantine
    • Kentaro Iwata (an infectious diseases expert at Kobe University) visited the ship and assessed the quarantined process was flawed
    • David Shu-Cheong Hui (director of the Stanley Ho Centre for Emerging Infections Diseases in Hong Kong) suggested a far better quarantine would be to have moved all passengers and staff to an onshore quarantine, rather than keep everyone in close quarters
    • Anthony Fauci (director of the U.S. National Institute of Allergy and Infectious Diseases) stated that the quarantine process had failed

    From our model we see the number of infections are likely much higher than official reports (for a variety of reasons)

    • But the death rate is likely not very high either; We expect the number of infections to crest in late March 2020 and subside from there
    • With careful measures, the outbreak will be contained mainly in China
    • Although we caution it is still very early in this outbreak to have an absolute answer

    Why could China’s numbers be much lower than the actual infections?

    • China’s Hubei province acknowledged there methods for classifying infections was not counting many infections
    • They relied only on a nucleotide analysis and most of China is short of nucleotide tests
    • Hubei is the ONLY province which has announced an official change in diagnosis techniques
    • Medical staff and CT scans are below demand as well
    • For those taking the tests, there are false negatives for these tests (a normal issue)
    • Many patients are unwilling or unable to go to the hospitals to be tested – fear of being quarantined, or of catching the virus there
    • Many people who are infected will ride it out and be fine, regardless if they show up to be tested (this doesn’t seem to be like Ebola where 60+% of patients die, and even more without medical intervention)
    • Additionally it could be intentional:
      • It is possible many infected patients are not being tested to keep official numbers low
      • And there is little incentive for Chinese officials (who want to portray a sense of calm) to test patients who have already died (although this would be wise to help learn more about the virus)

    About the Diamond Princess cruise ship

    • 2,670 passengers and 1,100 crew for a total of 3,770
    • Diamond Princess travels mainly between Japan, South Korea, Singapore, Vietnam, Taiwan and Malaysia
    • Plans to maintain this route through early 2021 (via cruise schedules)

    Timeline of events

    • On 20 January 2020 an 80-year-old guest from Hong Kong embarked in Yokohama and disembarked in Hong Kong on 25 January – this guest tested positive for COVID-19 on 1 February 2020 and is suspected to be “Patient Zero” of the ship
    • 3 February the ship was quarantined in Japanese waters – it had stopped in 14 ports over the prior month
    • On 4 February 2020 when 10 passengers were diagnosed with COVID-19
    • 3,700 passengers and crew were then quarantined by the Japanese Ministry of Health, Labour and Welfare for 14 days, moored off the Port of Yokohama
    • On 11 February 2020 a quarantine officer was diagnosed
    • On 18 February 2020 the U.S. government 300 American passengers to the U.S., and quarantined them at military bases in California and Texas (except 14 of them who tested positive for COVID-19 are in hospitals)
    • On 19 February 2020 quarantine lifted and another 300 passengers left the Diamond Princess cruise ship


    Tyler Durden

    Thu, 02/20/2020 – 18:25

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