- WTO's Goods Trade Barometer Hits Record Low Amid COVID Disruptions
WTO’s Goods Trade Barometer Hits Record Low Amid COVID Disruptions
Tyler Durden
Thu, 05/21/2020 – 02:35The World Trade Organization (WTO) published its Goods Trade Barometer on Wednesday morning, showing a steep decline in 1H20 as the COVID-19 pandemic disrupted the global economy.
“The index currently stands at 87.6, far below the baseline value of 100, suggesting a sharp contraction in world trade extending into the second quarter,” the new report showed.
“This is the lowest value on record since the indicator was launched in July 2016.”
Most importantly, the WTO warned: “the current reading captures the initial phases of the COVID-19 outbreak, and shows no sign of the trade decline bottoming out yet.”
The current reading of the Goods Trade Barometer suggests world merchandise trade could plunge between 13% and 32% in 2020, which is all dependent on if there’s a second virus wave.
WTO trade data show the volume of world merchandise trade contracted by 0.1% in 2019, the first decline since the 2009 GFC. The downturn in the global economy started in late 2017, mostly because marginal productivity of debt was quickly depleted across major economies and a trade war between the US and China that quickly erupted.
For more color on collapsing world trade, A.P. Moller-Maersk A/S, the world’s largest container line, warned last week that global trade would continue to falter with volumes declining by at least a quarter in 2Q20. The shipper dashed all hope that a V-shaped recovery will be seen in the back half of the year, instead suggesting a U-shaped recovery is more plausible.
Meanwhile, this week, BofA’s latest Fund Manager Survey, which polled 223 participants with $651BN in AUM, showed the vast majority of financial professionals remain incredibly bearish on the global economy. Respondents do not expect global manufacturing PMI to rise back above 50 until 4Q20.
MSCI World has soared 32% in the last 41 trading sessions on V-shaped recovery and vaccine hopes.
While world stocks are pushing the narrative that the end of the pandemic is near and it’s time to celebrate about economic revivals — that is far from the case, and the latest trade data from WTO suggest the bottom is not in.
- Vast Majority Of Aussies Believe China Covering Up True Scale Of COVID-19 Outbreak
Vast Majority Of Aussies Believe China Covering Up True Scale Of COVID-19 Outbreak
Tyler Durden
Thu, 05/21/2020 – 02:00Authored by Steve Watson via Summit News,
A poll conducted by Essential Research has found that a huge majority of Australians, 77% believe China is covering up the reality of the coronavirus outbreak.
The survey also found that 40% believe the outbreak came from a Chinese lab.
Despite evidence strongly suggesting these are legitimate concerns, they were grouped under the category ‘conspiracy theories’.
The poll also found that over a quarter of Australians believe that to some extent the outbreak is being overhyped to scare people.
Australia has led the charge to hold China accountable for the outbreak, successfully urging over 100 other countries to join a coalition to ensure a thorough independent investigation into the virus origins.
In return, China has imposed tariffs of up to 80% on the country, in a bid to wreck its economy.
- Japanese Military To Receive New Assault Rifles Amid Rising Tensions With China
Japanese Military To Receive New Assault Rifles Amid Rising Tensions With China
Tyler Durden
Thu, 05/21/2020 – 01:00The very last time the Japan Ground Self-Defense Force (JGSDF) received new assault rifles, the Nikkei 225 stock index soared to nearly 40,000 in 1989, then crashed 50% nine months later.
Jane’s Information Group reports JGSDF will receive a new 5.56 mm rifle and 9 mm handgun to defend the country’s southwestern islands from China.
The new rifle, designated as “Type 20,” is manufactured in Japan under the name “Howa5.56,” which was unveiled Monday at the Defense Ministry in Tokyo.
Typ 20 assault rifle
JGSDF displayed on 18 May its new 5.56 mm assault rifle, which it has given the designation Type 20. h/t Janes JGSDF spokesperson told Janes 3,283 units were purchased, valued at JPY900 million ($8.36 million). The new weapon is water-resistant and designed for use in amphibious operations. It has “better firepower” than its predecessor, the Howa Type 89 5.56 mm assault rifle, the spokesperson added.
Video of new weapons
Army units under the Ground Component Command, including the Amphibious Rapid Deployment Brigade based at Camp Ainoura in Sasebo, Nagasaki Prefecture, and Rapid Deployment Regiments across Japan, will receive the new assault rifle and pistol in 2021.
Disputed islands between Japan and China
Disputed islands between Japan and China Janes says the new pistol is the SFP9 9 mm handgun by German manufacturer Heckler & Koch. The spokesperson said the introduction of these new weapons will provide troops with better firepower.
SFP9 9 mm handgun
JGSDF displayed its new pistol on 18 May: the SFP9 9 mm handgun by Heckler & Koch. h/t Janes Garren Mulloy, a professor of international relations at Japan’s Daito Bunka University, told South China Morning Post (SCMP) that the new assault rifle has been tested for multiple battlefield scenarios, not just the in amphibious operations.
“The obvious assumption is that Japan is planning to carry out a lot more amphibious operations,” Mulloy said. “But if you talk to professional soldiers, you will see that dust or other contaminants in the mechanism of a weapon is a constant problem, and I think the Japanese have designed a weapon that will have better tolerances than its predecessor in all conditions.”
“This weapon will have been proofed in the snow in Hokkaido, the humidity of Okinawa and they will have taken them to desert environments in the United States to make sure that they operate as they are meant to in any given situation,” he said.
He said the purchase of the weapons comes at a time when Chinese maritime war drills have picked up around Taiwan, the East China Sea, and the South China Sea and increased further during the global pandemic.
“If we look back over the last six months or so, there have been a steady number of Chinese incursions into those waters and then during the coronavirus crisis, Beijing was otherwise occupied,” he said. “But as soon as the crisis passed its peak there, it was as if Beijing wanted to reassert its claims. It’s as if they said, ‘We were away, but now we’re back.'”
On Wednesday, we noted cross-strait relations and Sino-US diplomatic relations continues to deteriorate — Japan has gotten the message, restock its military with new assault rifles as conflict with China around disputed islands could be dead ahead.
- The 'Conman Elites' That Want To "Save Us" From COVID-19
The ‘Conman Elites’ That Want To “Save Us” From COVID-19
Tyler Durden
Thu, 05/21/2020 – 00:05Authored by Brandon Smith via Alt-Market.com,
Last week the Federal Reserve released a report predicting that the next print on GDP numbers will likely show a loss 34.9% in the second quarter. This is the biggest GDP plunge since the Great Depression; even the crash of 2008 doesn’t compare. And when we take into account the fact that the Fed artificially boosts GDP calculations by adding in many non-productive government programs, we have to ask, what are the REAL losses above and beyond what the Fed admits to?
With the supply chain in disarray, many companies (like Apple) are trying to shift their manufacturing base to dodge the pandemic. Of course, none of them want to bring factories back to the US; there’s simply no incentive to do so. And, the small business sector has been crushed by the shutdowns, with the vast majority of those seeking bailout loans still waiting for aid and over 20.5 million employees laid off in April alone.
Needless to say, the economy has been severely affected. The problem is that many people are being led to believe that this event has been triggered by the virus outbreak alone. This is a lie. As I noted back in February in my article ‘Global Centralization Is The Cause Of The Crisis – Not The Cure’, the collapse of the Everything Bubble was well underway long before the pandemic. The crash was started by the Federal Reserve hiking rates into economic weakness at the end of 2018, puncturing the bubble and setting the liquidity crisis in motion.
The pandemic is just the icing on the cake of a collapse that was going to happen anyway. It is also a convenient scapegoat, because now the banking elites are going to escape all the blame for the crash and the public is going to hyperfocus on the coronavirus as the culprit.
As I also warned would happen over the past few months, the Chinese government has been caught in numerous lies surrounding their response to the outbreak, including hiding the true numbers of dead and infected and suppressing information to the rest of the world on the danger of human-to-human transmission. The problem that the public is still not being told about, however, is that the Chinese did not act alone, they had help.
It takes two sides to do the pandemic tango – If air travel had been cut off from China immediately upon the confirmation of the virus spread until the danger could be assessed, the outbreak may have never carried beyond China’s borders. Yet this did not happen. Air travel remained open for weeks from China after the outbreak confirmation. Then, when the virus hit Italy hard, air travel continued from Europe to the US unabated. It was almost as if the establishment WANTED the virus to spread quickly…
I remember some of the idiotic sentiments being passed around in web forums back in January and February. Some people argued that the virus “only infects Asians”. Some people said sarcastically “Oh no, whatever will we do without our new i-Phones…!”. And, yet others, including the Trump Administration, argued that the US economy would escape any real harm.
Well, we are a few months into the outbreak and now the US has the largest number of infections in the world. US deaths are already almost triple that of the CDC’s yearly reported 30,000 deaths for the flu. The virus is no Black Plague, but it’s not something to be shrugged off either. If this virus behaves anything like the pandemics of the past, expect it to linger for a couple of years, not just a few months. The lockdowns actually guarantee that this situation will drag on for quite some time.
Apple i-Phone sales have crashed 77% in April, right along with almost every other sector of the economy. Clearly, the Trump Administration and Larry Kudlow were either lying to us in February, or they had no idea what they were talking about.
Despite the current reopening hype, the situation is only going to get worse from here on out. Certainly in terms of the economy, but also in terms of the outbreak. The globalists have openly discussed their plans for this pandemic, including a minimum 18 month period of lockdowns and “reopenings”. The public seems to be oblivious to the fact that the plan is for a “1 month open, 2 months closed” cycle going into next year. That’s right, the lockdowns will return.
Certain globalists have slithered out of the swamp to the forefront of media attention recently, and it is interesting to see how transparent the narrative has become. As I have predicted time and time again, during the collapse the very people that helped create the crisis are now suddenly being put on a pedestal by the media as our saviors and some are being presented as “rebels” on the side of conservatives. Here are just a few global elites that have been specifically prominent during this disaster.
Bill Gates
Wow, I’m getting incredibly sick of seeing Bill Gates presented in the media lately as some kind of virology guru. Why should we take the advice of a computer programmer on issues of biology and sociopolitical response? Why should we take the advice of an open globalist with an admitted agenda of population control?
Bill Gates is notorious for letting his agendas slip in public forums such as his Ted Talks. In 2010 Gates called for carbon emissions to be reduced to zero (an impossibility without complete de-industrialization and the economic murder of billions of people). In the same talk, he hinted that methods to reduce the population could include “new vaccines and reproductive health services…” He did not elaborate at the time, except to claim that vaccines would lead to “social changes” that would reduce population. Aren’t vaccines supposed to extend people’s lives, thus increasing the population?
We do know that Bill Gates has funded numerous experimental vaccine trials through the World Health Organization, including Polio vaccination programs. It was these same programs that led to viral outbreaks of polio in various countries and hundreds of paralyzed children. In fact, the vaccines caused more cases of polio than the wild-type virus. This if VERIFIED FACT, admitted by the WHO, though numerous leftist media sources have tried to deny it.
At most, the WHO and Gates can claim that the infections were “accidental”. But if this is the case, it would still suggest that vaccines developed by Gates Foundation programs and the WHO should not be trusted. Given Gates’ obsession with depopulation, I think it safer to not allow him to inject viruses (living or dead) into people.
The Gates Foundation was also central in Event 201, a pandemic exercise which “simulated” a coronavirus outbreak and the government and UN response. This exercise took place only a couple of months before the real thing happened. What an incredible coincidence. It is also an incredible coincidence that almost every solution presented in the simulation is now being implemented or suggested around the world during the real pandemic, including the use of tracking apps and immunity passports that violate every level of personal freedom we know.
Gates is not a hero, far from it. In fact, Gates and his ideology benefit greatly from the pandemic.
Mohamed El-Erian
A dedicated globalist, El-Erian has been everywhere in the economic media lately. As I examined in my Globalist Disinformation Spotlight article, El-Erian is an active promoter of a global currency under the control of the IMF though its Special Drawing Rights basket. He also argued last year that economic swings were “out of the control of central banks” and that they should not be blamed for any financial disruptions. At the same time, El-Erian claimed that the US economy was “strong” and that there was no chance of recession in 2020.
El-Erian was consistently wrong about almost everything last year, but this year, suddenly, he has been the go-to guy for the economic media. Mohamed has shifted gears entirely in 2020, flip-flopping on his outlook and presenting, finally, a realistic analysis of the situation. He is now being presented as the wise man on the mountain warning us of impending disaster.
This is a classic case of the globalist “savior” narrative in play. They lie about the danger of collapse right up until the collapse becomes obvious to the public, and then they suddenly start warning of the collapse when it is too late for the public to do anything about it. That is to say, they keep the public unprepared and complacent for as long as possible, then act like they predicted the whole mess at the last minute.
Elon Musk
The great fake liberty billionaire. A long time globalist, Musk seems like an enigma, but he is really rather simple. As a classic narcissist, Musk switches his persona to ride what he sees as the waves of public sentiment. He wants to be all things to all people and has bought into his own hype. A couple of years ago Musk was a globalist gatekeeper, a top guest of the Global Government Summit, a proponent of universal basic income, and argued in favor of transhumanism.
Musk’s companies are lavished with praise in the media despite their minimal global market share. Being one of the only carmakers in the US does mean Tesla is one of the “biggest” in the US, I suppose (but how often do you actually see a Tesla on the road outside of California?). The problem is Musk survives predominantly by siphoning up billions in government funding and taxpayer dollars. Without such funding, Musk would have been out of business a long time ago. This fact runs contrary to Musk’s new persona as a kind of libertarian, small government businessman.
Also keep in mind that Musk’s business model relies on global warming propaganda flowing out of the same elitist circles he enjoys when he’s not “speaking out” about government tyranny. If carbon controls are not enforced by governments (and if gas prices stay low), Musk’s high-priced electric cars have no market.
While Musk’s companies live primarily on government welfare, the guy acts like he’s some kind of savant, and he has a lot of people fooled on this account on both sides of the political spectrum. It is truly astounding. If he is a “genius” at anything, it is that he is an effective con man.
For now, Musk is attempting to hook into the alternative media and the rise of the liberty movement with his anti-lockdown tweets and sudden opposition to globalism. Has Musk been “red pilled”? I suspect he will flip-flop again in due course. If Musk wants to cut off all ties to his many friends in the globalist community then perhaps he has turned a new leaf, but I seriously doubt it.
Dr. Anthony Fauci
One of the people that helped create the coronvirus outbreak is the leading Trump Administration talking head on the coronavirus response. An avid defender of the WHO and, along with Trump, a defender of China’s rigged data back in January, Fauci is the guy who, in 2015, greenlit the millions of dollars in funding on coronavirus research at the Level 4 lab in Wuhan, China. This is the same lab that is now under investigation for releasing the virus on the world, and Fauci’s funding went directly into research on coronavirus transmission from bats to other mammals.
All I have to ask is, why has this man been at the forefront of the pandemic response for the US? Now in self isolation for possible infection, perhaps Fauci will fade into the background as he is further exposed as a participant in the creation of this pandemic.
Greta Thunburg
Thunburg is not so much a global elite as she is a useful idiot. A puppet of her activist parents, Thunburg only parrots the same global warming arguments that have already been debunked year after year, yet she continues to be elevated in the mainstream media as a spokesgirl for environmentalism. Why? Because the “children are our future”, and leftists love the idea of brainwashed kid activists. If Thunburg is any indication of the next generation, the future is bleak.
While there is still zero concrete evidence that human carbon emissions lead directly to changes in the Earth’s climate, it is true that the climate does “change” over time. Of course, shifts in activity on the gigantic nuclear fusion reactor in space known as THE SUN are probably more responsible for temperature changes on the Earth than the tiny 0.04% of carbon in the Earth’s atmosphere. Don’t tell the political left this, though, or you might be labeled a “climate denier”…
Thunburg and other climate activists have suddenly been pushed to the forefront recently to comment on the pandemic situation. This might seem rather bizarre, but it makes sense when you realize how the pandemic is being exploited by the globalists to achieve certain goals. Every agenda of the globalists from carbon emissions reductions to the suppression of industrial manufacturing to the destruction of large scale farming and even to the reduction of meat in people’s diets is being accomplished right now by the coronavirus and the government shutdowns. Where climate activists failed, the virus is making headway.
Beyond that, climate activists are now arguing that the restrictions put in place because of the pandemic should be KEPT IN PLACE because of global warming. You see how that works? One has nothing to do with the other, but the technocrats will force the public to see them as related if they can. Just “listen to the scientists”, people! Listen and obey the high priests of the technotronic era. Stop demanding evidence, you aren’t “smart enough” to understand it anyway. Only UN funded labs have the power to decipher the magical math behind global warming studies.
The pandemic will open the door to many lies and the flood of disinformation the alternative media has been working so hard to counter is going to explode beyond anything we’ve seen in the past. The elites are at a crossroads. They have to turn the public towards supporting collectivism and tyranny now, or they may find themselves facing the business end of a large number of torches and pitchforks. At bottom, these elites should be in prison, not on TV dictating to the people about how they should behave and what freedoms they should give up during the crisis.
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- New Zealand Uses Pandemic To Explore Four-Day Workweek
New Zealand Uses Pandemic To Explore Four-Day Workweek
Tyler Durden
Wed, 05/20/2020 – 23:45As New Zealand’s economy adjusts to the COVID-19 pandemic, Prime Minister Jacinda Ardern has pitched a four-day workweek and other flexible working options, saying it will stimulate the economy, boost domestic tourism and encourage better work-life balance while the country’s borders remain closed to foreign nationals, according to The Guardian.
The pitch comes as the NZ economy is expected to contract up to 8% this year according to the IMF, while unemployment could hit 15% – 30%.
Ardern was sharing suggestions during a Facebook live session while she was in the tourist city of Rotorua – adding that New Zealanders would travel more within the island nation if they had more flexibility, helping the country’s collapsed tourism sector.
“I hear lots of people suggesting we should have a four-day workweek. Ultimately that really sits between employers and employees. But as I’ve said there’s just so much we’ve learnt about Covid and that flexibility of people working from home, the productivity that can be driven out of that,” said Ardern.
“I’d really encourage people to think about that if you’re an employer and in a position to do so. To think about if that’s something that would work for your workplace because it certainly would help tourism all around the country.”
Andrew Barnes is the founder of Perpetual Guardian, a business of more than 200 people that transitioned to a four-day workweek in 2018.
Barnes found the shift made his employees happier and more productive and said the regime also had benefits for mental and physical health, the environment, family and social lives, and climate change.
“New Zealand could definitely go to a four-day week in the aftermath of Covid, and in fact it would be a strategy to rebuild the economy and particularly the hard-hit tourism market as it pivots to a domestic focus,” Barnes said.
“We need to retain all the productivity benefits working from home has brought, including cleaner air and a lack of gridlock lost productivity from commuting while helping businesses stay afloat. We have to be bold with our model. This is an opportunity for a massive reset.” –The Guardian
According to Barnes, a four-day workweek could be modeled after the German system of kurzarbeit, or “short work,” which would theoretically allow people to remain in their jobs.
“Finally, we have to factor in the need to address widespread mental health problems,” said Barnes. “The Kindness Institute reported a 25% uptick in use of its services during lockdown, so we must understand that there has to be a focus on mental health in order to resurge economically. The 4 Day Week is a tool to protect the health of workers in every respect, making this model all the more relevant to the new world we find ourselves in.“
- Scientists Discover Evidence Of Parallel Universe Where Time Flows Backward
Scientists Discover Evidence Of Parallel Universe Where Time Flows Backward
Tyler Durden
Wed, 05/20/2020 – 23:25Authored by Jake Anderson via TheMindUnleashed.com,
The existence of parallel universes sounds like science fiction, but over the years a number of prominent physicists have come to believe the idea is not only compatible with conventional physics but that it may explain some of the anomalies in quantum theory.
A new discovery in Antarctica has caused a stir in scientific circles as possibly representing the first tangible physical evidence of a parallel universe.
Scientists working for NASA’s Antarctic Impulsive Transient Antenna (ANITA) have been conducting a cosmic ray detection experiment. Antarctica is the ideal environment for such an endeavor because a persistent wind of high-energy particles rains down from outer space unperturbed by radio noise.
ANITA Antarctic Hang Test/University of Hawai’i at Manoa
ANITA is a stratospheric balloon that ferries complicated instruments high into the air over Antarctica, surveying over a million square kilometers. Its instruments search for heavier tau neutrinos trapped by solid-state matter. But while these high-energy particles do not pass through the Earth, like their lighter low-energy cousins, they should be originating from out in space and moving “down” toward us.
However, ANITA scientists discovered something surprising: tau neutrino particles that seem to be arising “up” from the Earth, implying that they’re moving backward in time.
Principal ANITA investigator Peter Gorham, an experimental particle physicist at the University of Hawaii, says he was surprised by this and checked for computational or equipment glitches to explain the finding.
“What we saw is something that looked just like a cosmic ray, as seen in reflection off the ice sheet, but it wasn’t reflected,” said Gorham.
“It was as if the cosmic ray had come out of the ice itself. A very strange thing. So we published a paper on that, we just suggested that this was in pretty strong tension with the standard model of physics.”
Gorham says these “impossible events” are controversial but “could indicate that we’re actually seeing a new class of sub-atomic particle that’s very penetrating. Even more penetrating than a neutrino, which is pretty hard to do. This particle would be passing through almost the entire earth. So this could be an indication of some new type of physics, what we call beyond the standard model of physics.”
Surprisingly enough, one of the simplest explanations for such a finding is that when the Big Bang occurred 13.8 billion years ago, it formed both our universe and a mirror universe where time flows in reverse. Inhabitants of that universe would likely not experience time going backward but would rather perceive us as the reverse universe.
“Not everyone was comfortable with the hypothesis,” Gorham told New Scientist.
Another possibility is that the Earth was inundated from cosmic rays from a supernova blast that penetrated our planet.
Scientists have increasingly come to accept the possibility of multiple universes. A few years ago astronomers considered evidence of a “bruise” on our universe, an anomalous “cold spot” that could represent an ancient collision with another universe in the multiverse.
Stephen Hawking’s final paper, released posthumously, proposed a theory for explaining alternate universes.
- Futures Slide Back Under 2,950 After Trump Slams Xi In Angry Tweetstorm
Futures Slide Back Under 2,950 After Trump Slams Xi In Angry Tweetstorm
Tyler Durden
Wed, 05/20/2020 – 23:11Update: the editor in chief of the Global Times, Hu Xijin, who is always on alert on twitter, was quick to respond to Trump with the following tweet, which also received permission from “the top”:
Chinese netizens wish for your reelection because you can make America eccentric and thus hateful for the world. You help promote unity in China and you also make intl news as fun as comedy. Chinese netizens call you “Jianguo,” meaning “help to construct China”.
On the contrary, Chinese netizens wish for your reelection because you can make America eccentric and thus hateful for the world. You help promote unity in China and you also make intl news as fun as comedy. Chinese netizens call you “Jianguo,” meaning “help to construct China”. pic.twitter.com/Fzj5fvmWcx
— Hu Xijin 胡锡进 (@HuXijin_GT) May 21, 2020
https://platform.twitter.com/widgets.js
Of course, this feud between Trump and Xi makes for good theater, but it only takes one small error to push the wrong button by mistake.
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And just like that, spoos are back under the critical 2,950 resistance level.
Just when it seemed that Emini futures were about to break out from the narrow channel they had been boxed in for the past month, and where the 2,950 level was suddenly breached after repeated failed attempts…
… Trump decided to drop some late night tweets, escalating what had been an already tense day for US-China relations, and accusing China’s Xi Jinping of being behind a “disinformation and propaganda attack on the United States and Europe” and that China could have “easily stopped the plague but they didn’t”
“It all comes from the top,” Trump said accusing China’s president Xi in a trio of tweets on Wednesday night, in which he claimed that China was “desperate” to have Joe Biden win the presidential race (he is probably right on that).
….It all comes from the top. They could have easily stopped the plague, but they didn’t!
— Donald J. Trump (@realDonaldTrump) May 21, 2020
https://platform.twitter.com/widgets.js
China is on a massive disinformation campaign because they are desperate to have Sleepy Joe Biden win the presidential race so they can continue to rip-off the United States, as they have done for decades, until I came along!
— Donald J. Trump (@realDonaldTrump) May 21, 2020
https://platform.twitter.com/widgets.js
What was new about Trump’s Wednesday night tweets, and why the market reacted like it did, is because While Trump has often blamed China for causing the coronavirus pandemic, he was careful to maintain that his relationship with Xi remains strong and never reference the Chinese president in one of his rants. Now that Xi has been dragged into the feud, the Chinese president needs to responds, or else risk looking weak before his country, and it is Xi’s response that markets are now dreading.
Trump’s tweet came hours after the Senate passed a bill to clamp down on Chinese companies listed in the US, and shortly after the White House issued a broad critique of China’s economic and military policies in a report to Congress, in which it accused Beijing of intellectual property theft and economic protectionism, however without detailing what specific actions the U.S. will take in response. The report also faulted China for human rights abuses, including detaining ethnic and religious minorities such as the Uighurs, and for “engaging in provocative and coercive” military activities in areas including the South China Sea and the Taiwan Strait.
The administration also said that the decades-long policy toward China – based on the presumption that deepening engagement would help the country become a more economically and politically open society – was wrong.
China “has chosen instead to exploit the free and open rules-based order and attempt to reshape the international system in its favor,” the report said. And China’s “expanding use of economic, political, and military power to compel acquiescence from nation states harms vital American interests and undermines the sovereignty and dignity of countries and individuals around the world.”
In a reverse tit-for-tat, China’s foreign ministry earlier also fired back with similar charges, saying the Trump administration was looking to obscure the facts around the virus to deflect from its own shortcomings.
Earlier on Wednesday, China’s foreign ministry spokesman Zhao Lijian said that Pompeo’s congratulations to Taiwan’s Tsai Ing-wen, in which he called her “Taiwan’s president” and boasted about the “partnership” between the US and Taiwan, are in “serious violation” of the “one-China” principle and the three China-US joint communiques which make up the Phase 1 trade deal between the two nations, and “constitute grave interference in China’s internal affairs.”
“China deplores and condemns US interference and will take necessary measures in response to the US erroneous practices”, and the “consequences will be borne by the US side” Zhao warned.
Shortly after, China’s Global Times tweeted that it urges the US, among other things, to sstop interfering in China’s internal affairs, and to stop undermining peace and stability across the Taiwan Strait, as well as China-US bilateral relations.
And so on, and on, and on, until eventually the next escalation will be one from which there is no quick and easy de-escalation.
Perhaps in anticipation of that, following today’s sharp jump in stocks, risk ticked lower and after plunging on Wednesday, the dollar rose against its G-10 peers with AUD and NZD underperforming most in G10 on haven demand as U.S.-China tensions take center stage ahead of China’s National People’s Congress starting Friday. The Bloomberg Dollar Spot Index advanced 0.3%, its first rise in four days and as markets “suddenly” realize just how deep the conflict between the US and China has become.
The Australian dollar – often a proxy for US-China sentiment- led declines against the greenback among G-10 currencies after surging to the highest in more than two months on Wednesday. The offshore yuan also weakened after two days of gains and following a weaker than expected fixing by the PBOC earlier in the session.
- San Diego's Legendary Burritos Now Have 'COVID-19 Surcharge'
San Diego’s Legendary Burritos Now Have ‘COVID-19 Surcharge’
Tyler Durden
Wed, 05/20/2020 – 23:05One of the best things about San Diego is its legendary burrito scene. Known for being inexpensive and filling, meats such as carne asada (sliced skirt steak) and carnitas (pork) are marinated for days before being grilled to perfection for a California burrito or similar.
Now, thanks to soaring prices for meat and beef shortages which made headlines earlier this month, some San Diego taco shops are adding a COVID-19 surcharge due to the impact of the coronavirus pandemic, according to NBC 7 San Diego.
Today, more than two months after the coronavirus pandemic reached San Diego County, locals have reported finding signs at their local taco shops that alert customers of a rise in the price of California Burritos, as well as Carne Asada Burritos, due to the impact of the COVID-19 crisis.
For instance, last week a sign spotted at a Los Panchos Taco Shop on Waring Road near Zion Avenue in Allied Gardens read, in part: “The COVID-19 situation continues to bring unexpected beef and pork plant closures. This is creating a shortage of product into commerce and therefore protein prices are skyrocketing.”
As a result, that taco shop – on that same sign – had to let customers know that a surcharge of $1.25 is now being charged to all carne asada items, including the California Burrito. –NBC 7
According to the San Diego City Attorney’s Office, restaurants are allowed to increase prices during a State of Emergency as long as the surcharge is clearly disclosed prior to purchase, and it’s directly linked to an increase in prices incurred by the establishment.
“We understand the catastrophic impact that the pandemic has had on our local restaurants and that they are likely taking on new costs in order safely serve customers,” said the City Attorney’s office. “We’re hopeful that restaurants will continue to clearly disclose any necessary price increases to customers before they place their orders.”
- Test Positive For COVID-19, End Up In A Police Database
Test Positive For COVID-19, End Up In A Police Database
Tyler Durden
Wed, 05/20/2020 – 22:45Authored by Adam Dick via The Ron Paul Institute for Peace & Prosperity,
So you are curious whether you have coronavirus? You could take a coronavirus test to find out. Well, not really find out, since the test results are not reliable. Nonetheless, you can take a test to obtain at least a Magic 8 Ball level answer of if you are or are not infected with coronavirus.
Here is some information likely unknown to many people when they are tested: The names and addresses of people who test positive are often handed over to police departments that can input or tag those names and addresses in police databases.
Kimberlee Kruesi provides the details in a Tuesday Associated Press article. She starts off her article with the following revelation:
More than 11 million people have been tested in the U.S. for COVID-19, all with the assurance that their private medical information would remain protected and undisclosed.
Yet, public officials in at least two-thirds of states are sharing the addresses of people who tested positive with first responders — from police officers to firefighters to EMTs. An Associated Press review found that at least 10 of those states also share the patients’ names.
Kinda makes those coronavirus tests that many government officials and people in the media have been promoting seem less warm and fuzzy, doesn’t it?
Continue reading Kruesi’s article here…
- Bodybuilder Shares Shocking "Before And After" Photos After Nearly Dying Of COVID-19
Bodybuilder Shares Shocking “Before And After” Photos After Nearly Dying Of COVID-19
Tyler Durden
Wed, 05/20/2020 – 22:25Mike Schultz is a healthy 43-year-old nurse from San Francisco. He’s gay, and a bodybuilder with no underlying health conditions, weighing in at a sprite-like 190 lbs despite his ripped physique.
Men like Schultz typically aren’t considered “high risk” coronavirus patients. But that didn’t stop him from contracting a particularly virulent infection, leading him to be hospitalized in mid-March, then moved to another hospital, where he was intubated for nearly five weeks.
Remember, only roughly 1/5 patients who are intubated due to coronavirus die. Schultz shared his story on his instagram, long with some shocking before-and-after shots.
Schultz shared his story with Buzzfeed News.
“I wanted to show it can happen to anyone. It doesn’t matter if you’re young or old, have pre-existing conditions or not. It can affect you,” Schultz told BuzzFeed.
“I knew what I thought going in [about the coronavirus]. I didn’t think it was as serious as it was until after things started happening,” he said. “I thought I was young enough for it not to affect me, and I know a lot of people think that.”
Schultz flew to Boston to visit his boyfriend Josh Hebblethwaite on March 14, just one week after the two had traveled to Miami for a music festival where dozens of others were diagnosed with the virus.
“We knew it was out there,” Schultz said. “There were no real restrictions in place, though. No lockdowns. We just thought, ‘Well, we gotta wash our hands more and be wary of touching our face.”
Shortly after arriving, Schultz began feeling very ill. When he arrived at a hospital, he had a temperature of 103 degrees and his lungs had filled with fluid.
“They took him right in and didn’t let me stay to say goodbye,” Hebblethwaite said.
Schultz was intubated, and four-and-a-half weeks later, was taken off the ventilator and came too, thinking only a week or so had passed. He was extremely disoriented at first, but after eating his first real meal in weeks – two McDonald’s burgers – he told Buzzfeed he was feeling much better.
Still, despite his miraculous story, Schultz said he and his boyfriend have received a torrent of online harassment from ‘stay at home, save lives’ diehards who have mocked him and claimed he “deserved” to get sick for attending the music festival in Fla.
Still, “progressive” media org like Buzzfeed have become obsessed with the stories of seemingly healthy young people who struggled with life-threatening bouts of the virus. We suspect this is part of a campaign to scare young, healthy people into staying indoors for fear of the virus.
All the ‘financially privileged’ hipsters who write for Buzzfeed probably wouldn’t understand, but many of the people venting their frustrations with the lockdown on social media are doing so because they’re afraid of losing their livelihood, not because the think the virus is some kind of hoax or “a little flu”, as Bolsonaro would call it.
Then again, what else would you expect from a bunch of freelance writers who depend on their parents to help with the rent on their Brooklyn apartments? The pressure faced by people with real responsibilities, who will suffer very real and terrifying consequences if they can’t cover their nut – they can’t simply move back in with mom and dad if you get sick, or things go south financially – are entirely foreign to them.
- Deaths Vs. Economic Pain: Cable News' Imbalanced Picture
Deaths Vs. Economic Pain: Cable News’ Imbalanced Picture
Tyler Durden
Wed, 05/20/2020 – 22:15Submitted by Kalev Leetaru of RealClearPolitics
Almost three months ago, COVID-19 became an inextricable part of American life. As the economy ground to a halt and unemployment soared, television news channels have focused the majority of their attention on the health impacts of the disease, while paying far less attention to the devastating economic harms, including historic job losses. A closer look at how channels are presenting the coronavirus crisis reveals stark differences, from CNN’s ever-present infections dashboard to Fox News’ periodic scrolling updates, offering clues to the increasingly partisan reaction to the pandemic.
The timeline below shows the percentage of daily airtime on BBC News, CNN, MSNBC and Fox News mentioning “COVID-19” or “coronavirus” or “virus” since the start of this year, using data from the Internet Archive’s Television News Archive processed by the GDELT Project. (Click to enlarge, or view the live data here.)
All four channels started covering the pandemic on Jan. 18, but BBC has consistently devoted a greater portion of its airtime to it. CNN’s coverage volume has remained largely unchanged since early March, while BBC and MSNBC have both slightly decreased their mentions over the course of this month. Fox News is a notable outlier, steadily decreasing its coverage since April 26.
In contrast, since March “unemployment” or “unemployed” or “jobless” or “job losses” have received just 10%-20% of the attention paid to “death” or “deaths” or “died” or “infection” or “infections.”
Yet the visual nature of television news means that the channels aren’t limited to just periodic verbal mentions of these term and related statistics. In CNN’s case, every day since March 20, the channel has displayed an on-screen infographic with live COVID-19 infection and death counts for a total of eight hours a day, seven days a week, for nearly two months now.
A typical version of CNN’s dashboard can be seen in the clip below.
Since April 3, GDELT has also analyzed the on-screen text of MSNBC, Fox News and BBC, allowing for a similar search of their on-screen health counts. However, as the graph below shows, other than CNN, only MSNBC displays the text “Johns Hopkins” (the source of the data) daily on-screen for any length of time and it is shown only a fraction of the time CNN does.
MSNBC has used several iterations of its COVID-19 dashboard, from this early version that looks very similar to CNN’s tracker.
To this later more streamlined version.
Fox News has occasionally run the CNN tracker by virtue of playing clips from CNN.
And it has also displayed the native Johns Hopkins dashboard.
However, Fox has also developed its own dashboard, at least one version of which can be seen in the clip below, sourced to “WHO, CDC, ECDC, NHC, DXY,” relying on official government figures directly rather than Johns Hopkins’ compilation.
So how are the other stations reporting COVID-19 infection and death counts if they aren’t relying on the eight-hours-a-day dashboard model adopted by CNN? The timeline below shows mentions of “death” or “deaths” in the on-screen text of the four channels over the same time period. While CNN has the most mentions, BBC News comes in second, with Fox News and MSNBC nearly equal in third/fourth place.
Rather than a dedicated dashboard, BBC appears to communicate death counts primarily through brief unsourced updates in its chyron text at the bottom of the screen, such as “The death toll in the UK is now at 34,636” or “Number of confirmed Covid-19 deaths in the UK rises by 494 to 33,186,” as seen below.
Similarly, Fox News appears to primarily mention death counts in the scrolling text at the very bottom of the screen, as seen at the start of this clip.
In contrast, the timeline below shows the total seconds of airtime each day on the four channels mentioning “unemployment” or “unemployed” or “job losses” over the same time period. In contrast to the three-to-10 hours a day each station spends displaying the latest health statistics, job losses are seen for just five-to-10 minutes on most days.
In the end, no matter what channel viewers tune into, they are confronted with many hours a day of live death counts compared to just minutes a day about lost livelihoods and ruined lives, perhaps explaining why many officials in Washington – and, to some extent, at the local level — seem in little rush to reverse the economic devastation that they and the white-collar class have largely been insulated from to date.
- Globalization, Financialization Are Dead
Globalization, Financialization Are Dead
Tyler Durden
Wed, 05/20/2020 – 22:05Authored by Charles Hugh Smith via The Daily Reckoning,
A popular claim is that the 1918–19 flu pandemic killed millions but no biggie, the Roaring ’20s started the following year. It’s onward and upward, baby, once we toss the masks.
Wrong. Completely, totally, dead wrong.
The drivers of the past 75 years of growth — globalization and financialization — are dead, and so is everything that depended on them for “growth.”
Here’s what’s poorly understood: Globalization and financialization die when they stop expanding.
Just as a shark dies if it stops swimming forward, globalization and financialization die once they stop expanding, because their viability depends on expansion.
Globalization and financialization have been losing momentum for years.
Globalization Has Strip-Mined Economies
Under the guise of “opening markets,” globalization has strip-mined every economy that can’t print a reserve currency and hollowed out economies globally as only globally competitive sectors survive globalization.
The net result is that once vibrant, diversified economies have been reduced to fragile monocultures completely dependent on global flows of capital and spending for their survival.
Tourism is a prime example: Every region that has seen its local economy crushed by global corporations, leaving global tourism as its sole surviving sector, has been devastated by the drop in tourism, which was always contingent on disposable income and credit expanding forever.
But credit can’t expand forever, as it eventually runs out of income to service additional debt.
Financialization is not just the expansion of credit and leverage to marginal borrowers; it’s also legalized looting, as the true risks of soaring debt and leverage are hidden in obscure financial instruments and bogus claims of “safety” and “hedging.”
Excesses of debt and leverage funneled into risky speculations inevitably end in default.
Asset and Consumption Bubbles
Financialization manifests as asset bubbles and hyperconsumption as people who never had credit spend up to the credit limits and beyond.
Both asset and consumption bubbles pop, pushing the financial sector that feasted off the unsustainable expansion of credit into insolvency.
In other words, neoliberal globalization and financialization — essentially one dynamic — are inherently destabilizing, as all the incentives are perverse.
Just as asset and consumption bubbles are inevitable, so too is the bursting of those bubbles and the devastation of everything that had become dependent on the expansion of those bubbles.
And that has real consequences.
Food security, to take a basic example, is impossible once globalization has destroyed local agricultural production, and financialization has rewarded factory-farming since Big Ag can borrow capital at scales that only make sense in a world of globalized monoculture agriculture.
1919 Is Not 2020
Everyone touting 1919 as the model for 2020 is deeply ignorant of history and the destructive ontologies of globalization and financialization. There is virtually no overlap between the world of 1919 and the world of 2020 in terms of financial structures and excesses.
That globalization and financialization are dead is revealed by what Federal Reserve bailouts and fiscal free-for-alls cannot do:
1. They cannot create creditworthy borrowers out of thin air like the Fed creates dollars out of thin air.
2. They cannot force lenders facing mass defaults to loan more money to uncreditworthy borrowers
3. They cannot force creditworthy borrowers to borrow money.
4. They cannot reflate asset and consumption bubbles that have popped.
5. They cannot restore confidence in long, fragile supply chains.
6. They cannot magically turn unprofitable enterprises into profitable enterprises.
7. They cannot create income streams — revenues, profits, wages, etc. — with bailouts that continue the perverse incentives of moral hazard or “free money” designed to give debt-serfs enough cash to continue making their loan payments.
8. They cannot forgive debt payments without destroying the wealth held as debt: Mortgages, student loans, auto loans, credit card debt, corporate junk bonds, etc., are assets that lose their value once borrowers default.
9. The Fed can buy impaired debt, but that doesn’t change their abject powerlessness (points 1–7 above).
Financialization was never sustainable, and neither was the destructive globalization it enabled.
Any system that depended on the ever-expanding exploitation of new resources, debtors and markets could never be anything but fragile. The ferociousness of its rapacity masked its inherent weakness, a weakness that is now exposed as fatal.
But let’s stick to the U.S. alone for now. The pandemic is having a dramatic long-term effect on Main Street local tax revenues.
First- and Second-Order Effects
To understand how, we need to consider first- and second-order effects.
The immediate consequences of lockdowns and changes in consumer behavior are first-order effects: closures of Main Street, job losses, massive Federal Reserve bailouts of the top 0.1%, loan programs for small businesses, stimulus checks to households that earned less than $200,000 last year and so on.
The second-order effects cannot be bailed out or controlled by central authorities. Second-order effects are the result of consequences having their own consequences.
The first-order effects of the pandemic on Main Street are painfully obvious: Small businesses that have barely kept their heads above water as costs have soared have laid off employees as they’ve closed their doors.
The second-order effects are still spooling out: How many businesses will close for good because the owners don’t want to risk losing everything by chancing reopening?
How many will give it the old college try and close a few weeks later as they conclude they can’t survive on 60% of their previous revenues?
How many enjoy a brief spurt of business as everyone rushes back, but then reality kicks in and business starts sliding after the initial burst wears off?
How many will be unable to hire back everyone who was laid off?
Falling off a Cliff
As for local tax revenues based on local sales taxes, income taxes, business license fees and property taxes: The first three will fall off a cliff, and if cities and counties respond to the drop in tax revenues by jacking up property taxes, this will only hasten the collapse of businesses that were already hanging on by a thread before the pandemic.
The federal government can bail out local governments this year, but what about next year, and every year after that?
The hit to local tax revenues is permanent, as the economy became dependent on debt and financialization pushed costs up.
Amazon and online sellers don’t pay local taxes except in the locales where their fulfillment centers are located.
Yes, online sellers pay state and local sales taxes, but these sales are for goods; most of the small businesses that have supported local tax revenues are services: bars, cafes, restaurants, etc.
As these close for good, the likelihood of new businesses taking on the same high costs (rent, fees, labor, overhead, etc.) is near zero, and anyone foolish enough to try will be bankrupted in short order.
Now that working at home has been institutionalized, the private sector no longer needs millions of square feet of office space. As revenues drop and profits vanish, businesses will be seeking to cut costs, and vacating unused office space is the obvious first step.
What’s the value of empty commercial space?
Trying to Get Blood From a Stone
If demand is near zero, the value is also near zero. Local governments will be desperate to raise tax revenues, and they will naturally look at bubble-era valuations on all real estate as a cash cow. But they will find that raising property taxes on money-losing properties will only accelerate the rate of property-owner insolvencies.
At some point valuations will adjust down to reality and property taxes collected will adjust down accordingly. If municipalities think they can make up the losses by jacking up the taxes paid by the survivors, they will quickly find the ranks of the survivors thinned.
This doesn’t exhaust the second-order effects: Once Main Street is half-empty, the attraction of the remaining businesses declines; there’s not enough to attract customers, and the virtuous circle of sales rising for everyone because the district is lively and attractive reverses: The survivors struggle and give up, further hollowing out the district.
The core problem is the U.S. economy has been fully financialized, so costs are unaffordable.
The commercial property owner overpaid for the buildings with cheap borrowed money, and now the owner must collect nosebleed-high rents or he can’t make the mortgage and property tax payments.
Local governments spend every dime of tax revenues, as their costs are insanely high as well. They cannot survive a 10% decline in tax revenues, much less a 40% drop.
The Lesson of Yellowstone
The metaphor I’ve used to explain this in the past is the Yellowstone forest fire. The deadwood of bad debt, extreme leverage, zombie companies and all the other fallen branches of financialization pile up.
But the central banks no longer allow any creative destruction of unpayable debt and misallocated capital; every brush fire is instantly suppressed with more stimulus, more liquidity and lower interest rates.
As a result, the deadwood sapping the real economy of productivity and innovation is allowed to pile higher.
The only possible output of this suppression is an economy piled high with explosive risk.
Eventually nature supplies a lightning strike, and the resulting conflagration consumes the entire economy.
- South Korean Soccer Team Fined For Posing Sex Dolls In The Stands During Recent Match
South Korean Soccer Team Fined For Posing Sex Dolls In The Stands During Recent Match
Tyler Durden
Wed, 05/20/2020 – 21:45A South Korean soccer club has been fined for posing sex dolls in the stands during a recent game, Yonhap reports.
South Korean football club FC Seoul was slapped with a 100 million won (US$81,410) fine on Wednesday for posing the sex dolls in the stands with signs, creating an uncanny tableau that apparently offended some of the more priggish officials running South Korea’s premier soccer league.
The use of more than a dozen life-size dolls in place of spectators (since fans weren’t allowed at the match) took place during the club’s Sunday match against Gwangju FC at Seoul World Cup Stadium.
In a statement, the league accused FC Seoul of “causing great damage to the image and the integrity of the K-League” and offending female fans.
The fine is the largest the league has ever levied against a club, according to Yonhap.
The team has said it will “humbly accept” the fine.
- Japan Exports Worst Since Financial Crisis; Korea Early May Export Data Just As Dire
Japan Exports Worst Since Financial Crisis; Korea Early May Export Data Just As Dire
Tyler Durden
Wed, 05/20/2020 – 21:43If any traders, or frankly anyone out there, still cares about fundamental economic data, there was little to celebrate this evening, when Japan reported another round of dismal trade numbers, with Imports plunging 7.2% in April, worse than the -5.0% drop in March but slightly better than expected. However, it was Japan’s exports – that key benchmark for the BOJ whose goal of keep the yen weaker is not only to support stocks but also to facilitate exports – that was the highlight, with the April number plunged by 21.9%, double the previous month’s -11.7% drop and the biggest plunge since the financial crisis.
But if Japan’s number was dismal, at least it was expected. What was more concerning was the latest Korean export number for the first 20 days of May, which some had expected to see a solid rebound in light of the so-called reopening observed this month. Well, it did not happen, and while the May number wasn’t quite as bad as the near-record plunge in April when exports plunged by 26.9% in the first 20 days, the -20.3% Y/Y drop in May – off an already depressed 2019 number – showed that any hopes for a solid global recovery taking hold have been painfully premature.
To be sure, there was a tiny silver lining, as semiconductor exports rose 13.4% in contrast to a 15% decline in the same period of April. According to Bloomberg “this supports optimism for an economic turnaround and equities’ rally” and is “likely to give investors fresh reasons to look at the tech sector in Korea and abroad” although we disagree.
As noted in recent weeks, just like during the trade war in much of 2019, the reason for a sharp pick up in semiconductor trade has been fear that China’s tech sector will soon be locked out of US supply chains – as the recent Huawei news confirmed – and as such any jump in S.Korean semi exports is simply frontloading of demand now ahead of more crackdowns on the Chinese tech space in the future, when Huawei et al may find themselves completely locked out from US suppliers, which in turn explains why as Bloomberg reported earlier, China is planning to invest $1 trillion in its semiconductor industry to if not overtake the US in technology, at least become self-sufficient and not rely on US semi production.
- Kyle Bass: All Eyes Should Be On Hong Kong
Kyle Bass: All Eyes Should Be On Hong Kong
Tyler Durden
Wed, 05/20/2020 – 21:25Authored by Kyle Bass, op-ed via NewsWeek.com,
In international politics, few things are certain during these uncertain times. But I can predict one: the relationship between America and Hong Kong is in the throes of major change.
On May 22, China’s leaders will convene for their annual People’s Congress, during which they will discuss the status of Hong Kong and whether to push forward with their rebuffed attempts to impose upon that special jurisdiction the laws and circumscribed rights of mainland China. If they do so, America and Britain will push back—with lasting consequence.
Hong Kong has become ground zero for the ideological clash between democracy and heavy-handed Chinese communism. This tug-of-war was on global display last summer, when over two million Hong Kongers—26 percent of the entire population—peacefully took to the streets of Hong Kong, in sweltering 100-degree heat, to protest Beijing’s overreach with a proposed extradition bill that would impose China’s laws on Hong Kong. The people of Hong Kong have completely lost faith in their embattled leader, Carrie Lam, and their police force. Peaceful protestors have been brutalized, pro-democracy figures have been illegally arrested and the Hong Kong Legislative Council’s day-to-day operations have been tampered with by the Chinese government. During the most recent attempt to conduct a Legislative Council meeting in Hong Kong, in a scene that is reminiscent of an event that might take place in a failed state, fist fights broke out between the pro-China members and the pro-democracy members.
Unfortunately, the rapt global attention and support that greeted Hong Kongers last year at the start of their protests has been sidetracked by other news. But this week, the world should again pay attention to Hong Kong.
At the People’s Congress, the Chinese Communist Party is likely to push forward with having Hong Kong implement a full set of laws with “Chinese characteristics” that give Beijing the right to essentially do whatever it pleases. This will shatter the Sino-British Joint Declaration of 1984, in which China agreed to allow Hong Kong to continue to operate “autonomously” until 2047. After 156 years of Hong Kongers experiencing British rule and all the freedoms and rights that accompanied it, expect larger and more dynamic protests and (hopefully) more global action from politicians. Recently, Secretary of State Mike Pompeo has said that he would not renew Hong Kong’s special trade status until he had seen the outcome of the People’s Congress.
But absent a complete about-face on that, it is unclear how Pompeo could possibly validate Hong Kong’s continued “autonomy” after the blood-letting the world has witnessed firsthand. In late 2019, Amnesty International titled a piece, “Hong Kong: Arbitrary arrests, brutal beatings and torture in police detention revealed.” Suffice it to say this is not something any responsible autonomous nation would do to peaceful protestors.
Unfortunately for citizens, at the same time that Hong Kong is experiencing the worst political destabilization since the Opium Wars, the special jurisdiction is already in the throes of the worst economic depression it has ever faced: GDP is down 24 percent quarter-over-quarter annualized. I have been studying the Chinese banking system and Hong Kong closely for the last decade, and I think that Hong Kong is living on borrowed time. (In full disclosure, I run global investment funds investing in this macroeconomic outcome.)
What happens in Hong Kong will not stay in Hong Kong. The battle between an expansionist, increasingly repressive Chinese communist government, on the one hand, and a Western rule of law-based democracy, on the other, will spill over into Taiwan. Already, the battle in Hong Kong has affected Taiwanese politics: watching China’s Communist Party try to assert control in Hong Kong is the primary reason that a historic number of Taiwanese voters took to the polls to rebuke the pro-Beijing candidate and elect a president, Tsai Ing-wen, who campaigned with the promise of protecting Taiwan’s democracy and sovereignty. Taiwanese voters will continue to be enthralled by every development in Hong Kong, because they know that an aggressive and emboldened Chinese Communist Party is bad news for them, too.
The world should focus on Hong Kong. This is not just about the fate of millions of peaceful protesters, but about democracy, reneged promises and a global order that is shifting as the Chinese Communist Party continues to change its terms of engagement.
- Gamblers Flock To Reopened Casinos In South To Find Them Drastically Altered
Gamblers Flock To Reopened Casinos In South To Find Them Drastically Altered
Tyler Durden
Wed, 05/20/2020 – 21:05Gambling and social distancing? Not quite yet in Las Vegas, which at this point is only gearing up for ‘pre-opening’ procedures, including mass COVID-19 testing of gaming employees as they prepare to get called back to work. The Las Vegas strip began shuttering in mid-March (similar to East coast spots), a devastating blow nearly unprecedented in history, and at a total cost of hundreds of millions per week in revenue lost.
However, as the WSJ details, casinos in Louisiana and Mississippi are opening for the first time since ‘stay at home’ orders were issued. All eyes are on gambling in the south — and what greatly altered ‘COVID-safe’ casinos and social distancing protocols will look like in this context — and as a marker for what’s expected later in larger gaming Meccas like Atlantic City, which has seen hotels only begin taking reservations for mid-June.
Image source: World Poker Tour Lockdown-weary gamblers are ready for the good times to roll, already driving hours to wait in long lines for newly opened – as of Monday – casinos in Louisiana. Neighboring Mississippi will open its casinos on Thursday.
After two months of closure, “Initial openings will clearly spur people to come out of their homes,” comments Michael Pollock, managing director of consulting firm Spectrum Gaming Group. “How much they will spend and how frequently they will visit are tied to larger economic trends.”
Just how many will flock to the newly-reopened venues long-term remains to be seen, given the experience could be very ‘different’ – complete with new inconveniences like temperature checks, sanitizing stations in the center of casino floors, contactless procedures utilizing iPhone apps, masks, cycling through new decks more frequently, and limited capacity (such as 25-50% entry limitations, depending on the state).
One local report details the greatly altered and perhaps bizarre regimen in place at Hollywood Casino in Baton Rouge:
The dealer sprays the dice with a bottle of disinfectant and a masked gambler leans into the craps table, his cheekbones raised in a grin.
“Leave ’em wet,” he tells the dealer. “They won’t roll as much.”
The dealer looks back sharply, her hands reaching for a nearby roll of paper towels…
The dealer must wipe the dice.
That’s the only way these three men can alter the portions of chips that each rest in one of the table’s six wooden placeholders, every other one sealed shut with black masking tape.
Louisiana’s casinos are now open, but it’s not business as usual.
💦 Dealers wipe down dice.
😷 Casinos hand out masks.
🃏 Blackjack dealers throw out cards more frequently.More: https://t.co/YiBz0xX3qi
— The Advocate (@theadvocatebr) May 19, 2020
https://platform.twitter.com/widgets.js
Regardless, by current indicators eager people are flocking, even driving hours, especially out of major cities in Texas:
Shirley Martinez, 45 years old, drove two hours from her home in Houston to Lake Charles, La., with her sister and 85-year-old mother for the casinos’ reopening on Monday. Her mother was ready to play slots after being on lockdown—with hand sanitizer and masks in tow. “She said, ‘It’s open, let’s go,’” Ms. Martinez said.
“It’s going to take time,” American Gaming Association chief executive Bill Miller told WSJ. “The experience is going to be different for some period of time, appropriately, but I think that the industry will get its swagger back.”
Meanwhile other states are eagerly awaiting the go-ahead to open back up, but determinant on state gaming boards and health authorities reviewing the new stringent social distancing protocols.
Needless to say the state lockdowns have been devastating for the gaming industry given casinos pretty much never close in more normal times.
For March and April revenues for Pennsylvania, New Jersey and Delaware – as an example – dropped more than 75% to $264 million from $1.1 billion, according to the consulting firm Spectrum Gaming Group.
- US Banks On Hook For $150 Billion In "Frozen Loans" As Millions Of Americans Skip Credit Card And Car Payments
US Banks On Hook For $150 Billion In “Frozen Loans” As Millions Of Americans Skip Credit Card And Car Payments
Tyler Durden
Wed, 05/20/2020 – 20:55One month ago, after the banks reported Q1 earnings, we showed that the major US money center banks saw their loan loss provisions surge by roughly 4x from year ago levels in response to expected deterioration in their loan books, with JPMorgan jumping the most, or just over 5x, hinting the other banks are likely underprovisioned for the storm that is coming.
With banks set to be hit with tens of billions in charge offs – for which they are trying their best to reserve even if they have no idea just how bad the hit will be – we next looked at what the banks did in the aftermath of the financial crisis. What we found is that most banks reserved total losses anywhere between 4 and 6% of total loans. This time around? So far it is less than 2%, as shown in the chart below.
Putting it in context, so far the Big 4 banks have reserved an additional $24BN in Q1 for future loses. But if the GFC is any indication of the defaults that are about to be unleashed, the real amount of losses, discharges and delinquencies will increase 3x-4x compared to the current baseline, meaning that over the next several quarters, banks will have to take another $75-$100BN in reserves on loans that go bad, wiping out years of profits, which were used not for a rainy day fund but to pay for – drumroll – buybacks.
As we concluded, “this to put it mildly, is a major problem for banks which until now were seen as generously overcapitalized, because if the US banking sector is facing $100BN (or more) in loan losses, then the Fed will have no choice but to once again step in and bail out the US financial sector.”
Of course, merely delinquent debt does not mean it is automatically in default, a state that usually follows several months of non-payment. However, the longer consumers ignore, or are simply unable to make a scheduled payment, the higher the odds that a delinquent loan will eventually end up in default, resulting in a loan loss for the issuer bank. Ultimately, the total amount of loan losses will dictate if banks are over or under-reserved.
The question, then, is whether our worst-case $100 billion estimate was in the ballpark?
Well, it now appears that this estimate may be optimistic, because as Bloomberg writes today, millions of Americans who have so far been getting breaks on roughly $150 billion loans in are about to hear from their banks. The reason: banks are starting to take a closer look at consumers who have arranged to delay payments, “potentially pushing some out of the programs, as the industry tries to get a clearer picture of how many customers are truly unable to keep up during the coronavirus pandemic.”
It all started with the shock from the enforced shutdowns in March, when as coronavirus cases surged in the U.S. and businesses shut down, millions of people told their lenders they wouldn’t be able to pay their bills. In response lenders allowed borrowers to miss payments for as long as several months on credit cards, auto loans and personal loans.
And while millions of Americans have been ignoring their monthly credit card and auto loan statements, perhaps hoping that banks will simply forget about their obligations, the forbearance programs from March are nearing expiration dates, when many banks are set to decide whether to continue letting people put off roughly $150 billion of debt including credit cards balances, personal loans and car payments. And in interviews with Bloomberg, executives said they’re concerned that at least some borrowers sought relief unnecessarily and that they should be coaxed into paying. And in what is set to be the next major firestorm, a number of firms aim to whittle out such participants, or charge interest to continue.
“I would imagine we may have to go beyond 90 days” of forbearance, Southern Bancorp Inc. Chief Executive Officer Darrin Williams said in an interview, referring to the expiration date for many programs. “I feel pretty strongly that many of the folks who took advantage of the consumer payment holiday we provided probably didn’t have to. But if it’s offered, why not, right?”
To be sure, the rapid rollout of forbearance programs in March averted financial ruin for millions of households, giving Congress time to unleash trillions in fiscal stimulus including unemployment benefits and offer emergency aid to businesses, not to mention give the Fed time to prop up the market, to which roughly 70% of total US household assets are linked. The goal was to avoid a tidal wave of defaults by borrowers who began losing income when states locked down commerce to slow infections. More than 30 million people have since filed jobless claims.
In an attempt to avoid shocking the US economy into a depression, many banks offered to postpone bills with no proof of hardship, and many borrowers kept working. Some signed up for the programs as a precaution, taking a break from payments to shore up their savings. That, according to Bloomberg, made it impossible for banks to gauge the degree to which their loan portfolios are at risk of going bad.
Now, two months later, the dust from the initial shock has settled and banks are starting to assess just how much exposure they have to tens of millions of unemployed Americans who collectively owe over $100 billion in debt.
The numbers are staggering: according to a report from Janney Montgomery Scott analysts last week, some mid-sized banks placed more than 15% of their loan books into forbearance by the end of March.
Needless to say, that number of orders of magnitude greater than what most banks have reserved for total loan losses. In regions like the U.S. Southeast, relatively high rates of borrower relief contrasted with low infection rates at the time. Since then, many programs have remained open, continuing to take on borrowers who have fallen on hard times. As a result, the erosion in bank loan books has only accelerated in the past month; meanwhile of those who voluntarily accepted the forbearance option, there has been virtually no “return to normal”, as most are unable to, or simply resume to restart their debt payments.
Quantifying the forbearance shortfall, credit-reporting firm Transunion reported that lenders in April had nearly 15 million credit cards in “financial hardship” programs, such as the abovementioned deferral programs that let borrowers temporarily stop making payments. That accounts for about 3% of the credit-card accounts the company tracks, Transunion said Wednesday. Separately, nearly three million auto loans were in these hardship programs, accounting for about 3.5% of those tracked. The numbers have surged from a year ago, when 0.03% of credit cards and about 0.5% of auto loans were in financial-hardship programs.
Keep in mind, these numbers only represent accounts in forbearance, they do not reflect those loans which are still current yet which may soon be impaired after the debtor stops making a payment in the coming months. To make matters worse, Americans were tapping credit cards and auto loans at record levels even before the pandemic to deal with rising costs and stagnant incomes, although in a sharp reverse from this trend, March saw a record repayment on credit card debt as those who could, paid down as much of their statement as possible, to clean up their balance sheet.
It is all those who were unable to do so, or were forced to take on even more debt, that are a challenge to the banks.
In addition, about 840,000 personal loans were in deferment or another type of financial hardship in April, accounting for 3.6% of those tracked. TransUnion’s estimates include accounts where the borrowers are pausing their payments with permission, as well as accounts that have been frozen.
* * *
What happens next? Well, as the WSJ notes, the stakes are high for borrowers and lenders alike. Consumers who can’t pay could be sent to collections. Their credit scores could also drop significantly, making it harder for them to access affordable credit in the future.
Lenders could face a reckoning, too. Allowing borrowers to pause their payments lets lenders avoid a big spike in delinquencies and charge-offs, at least for the short term. Credit cards in deferment, for example, aren’t factored into the delinquency rates that many lenders report. And yet, while in this carefully choreographed dance of mutual assured destruction lenders hope that being flexible with borrowers will buy time for the economy to recover and for consumers to get back on track with payments, borrowers may simply have no choice but to default. Furthermore, lenders can only shoulder the unpaid loans for so long, and many are bracing for a mountain of defaults that they’ll eventually write off as a loss.
The question is how much?
Going back to the report from Keefe, Bruyette & Woods, on average, banks had about 5% of their consumer loan portfolios on ice as of mid- to late-April. Based on Federal Reserve data, that would equate to roughly $150 billion in loans, although that amount is surely far greater now as millions more have lost their jobs in recent weeks.
Also keep in mind that those figures don’t include U.S. mortgage forbearance programs that let borrowers with government-backed loans postpone payments for as long as 12 months while dealing with the pandemic; that’s hundreds of billions more than are currently in forebearance and may go straight to default once the extension period ends.
* * *
These millions of consumer-loan deferrals have left banks, shareholders and even regulators in the dark on how many people are truly in distress and what the ultimate cost to lenders may be. While executives expect to get a clearer view of the situation in the second half of the year, for now regulators are letting banks put off that reckoning. In March, a bevy of watchdogs made it easier for lenders to modify terms, such as by lowering interest rates or letting borrowers skip payments. The moves wouldn’t necessarily require banks to label those situations as “troubled debt restructurings,” which require more capital.
The bottom line is that the confusion will likely persist for another quarter, at which point shareholders and regulators will start demanding answers.
“My belief is losses aren’t coming until third quarter for banks,” Ira Robbins, CEO of Valley National Bancorp, said in an interview. Because banks granted deferrals to pretty much everyone who asked for it, “we have no idea, outside of hypothesis, as to what’s going to happen from a credit perspective.”
In advance of what is shaping up as a D-day for the bank, they are now starting to examine millions of account holders to determine who is taking advantage of the programs and who genuinely needs forbearance. The efforts include trying to figure out which customers still have jobs by checking databases operated by major credit reporting firms, according to Bloomberg.
Moving ahead, some banks are considering letting customers continue skipping payments but reinstating interest on loans, a move that could make forbearance less enticing for those who don’t absolutely need it. Others might require customers to show additional proof they’ve been impacted by the virus.
“The banks want to genuinely help,” said Scott Barton, managing partner at 2nd Order Solutions, which advises lenders on collections and forbearance processes. But they “would like to start to differentiate and not give away money to people that don’t really need it right now.”
It’s not that they “want to genuinely help” – it’s that they know that once they accelerate a default, they will have to show it on their books as deferred payments don’t impact delinquent amounts. Meanwhile, the banks also know that in all the chaos, millions of Americans are taking advantage of the forbearance program, but if they did too hard, they will have to disclose the full severity of just how big the hit to their balance sheet will be.
Which, for once, gives US consumers all the leverage in the neverending battle between man and bank.
Forbearance deadlines vary by bank and customer. Citigroup Inc. was one of the first banks to offer forbearance, initially granting a 30-day reprieve that it since extended twice until May 31. Which means that in less than two weeks, millions of Americans will have to start paying down their debt.
Will they?
That’s the $64 trillion question, one which nobody really wants answered. According to Bloomberg, the nation’s largest banks JPMorgan, Bank of America and Wells Fargo – have generally said they will at least check in with borrowers in coming weeks as they assess how to continue programs and whether to encourage people to use other options. Those can include modifying loans or restarting some payments for credit cards or car loans.
The good news is that so far, the programs seem to be easing financial strains during the pandemic. Fewer households were late on their cards, car loans, personal loans and mortgages in April than in March, according to TransUnion data released Wednesday, but here too it’s not clear if the banks are in fact motivated to disclose the full severity of the delinquency rate to data collectors. That upended expectations that consumers would fall behind on their debts as a result of widespread joblessness and the forced shutdown of the U.S. economy. Of course, a big reason for why the default surge has not hit yet is that government stimulus checks continue to plug the income gap for millions of households. But those, too, will soon run out.
Matt Komos, TransUnion’s vice president of research and consulting, said households may be postponing payments to keep an extra cash cushion just in case the economy worsens. Indeed, many consumers who deferred loans sent payments anyway, sometimes far more than the monthly minimums to reduce their overall debt loads, TransUnion data show.
“A lot of the banks are in the dark a little bit in terms of how to treat customers,” said Alan McIntyre, senior managing director for Accenture Plc’s banking practice. “The measures they focus on to manage credit quality, and those dials aren’t moving. And those dials aren’t going to move until the fall.”
That’s when the real shock from the second great depression will finally be revealed.
- "Nothing Like This Has Happened Before": China To Invest $1 Trillion In New Plan To Overtake US In Tech
“Nothing Like This Has Happened Before”: China To Invest $1 Trillion In New Plan To Overtake US In Tech
Tyler Durden
Wed, 05/20/2020 – 20:51As we have been writing since late 2018, when it comes to the technological arms race between the US and China, one place where China has been badly lagging the US, is in the production of semiconductors, which is also China’s biggest weakness in its ongoing scramble to catch up with the US technologically.
China’s media agrees: over the weekend, we quoted from a Global Times op-ed according to which “although the US had experienced a large-scale deindustrialization in the second half of the 20th century, it still maintains advantages in the semiconductor sector with companies such as Intel, which could complete the whole process of the chip design to producing. The country has held on to cutting-edge semiconductor manufacturing techniques over the past decade.”
And now that the cold war between the US and China is about as formal as it can get, China has decided it can no longer rely on the US for being its primary source of high-end technology, and according to Bloomberg, Beijing is accelerating its bid for global leadership in key technologies, and will pump more than a trillion dollars into the economy “through the rollout of everything from wireless networks to artificial intelligence.”
Purposefully invoking the spirit of “Made in China 2025”, a plan that has in the past infuriated the White House, China’s strategic “masterplan” is backed by President Xi Jinping himself, and will see China invest an estimated $1.4 trillion over six years to 2025, “calling on urban governments and private tech giants like Huawei Technologies to lay fifth generation wireless networks, install cameras and sensors, and develop AI software that will underpin autonomous driving to automated factories and mass surveillance.”
This also means that while pursuing China’s plans to reinvent its technological base and to restructure its entire semiconductor supply chain, Beijing will also create the supreme police state dystopia, one which is even more powerful than the current iteration.
Predictably, the new infrastructure initiative is expected to rely on local giants from Alibaba and Huawei to SenseTime Group while shunning U.S. companies. And as Bloomberg adds, “as tech nationalism mounts, the investment drive will reduce China’s dependence on foreign technology, echoing objectives set forth previously in the Made in China 2025 program. Such initiatives have already drawn fierce criticism from the Trump administration, resulting in moves to block the rise of Chinese tech companies such as Huawei.”
“Nothing like this has happened before, this is China’s gambit to win the global tech race,” said Digital China Holdings Chief Operating Officer Maria Kwok, as she sat in a Hong Kong office surrounded by facial recognition cameras and sensors.
“Starting this year, we are really beginning to see the money flow through.”
Maria Kwok’s company is a government-backed systems integration provider, among many that are jumping at the chance. In the southern city of Guangzhou, Digital China is bringing half a million units of project housing online, including a complex three quarters the size of Central Park. To find a home, a user just has to log on to an app, scan their face and verify their identity. Leases can be signed digitally via smartphone and the renting authority is automatically flagged if a tenant’s payment is late.
The tech investment push is part of a broader fiscal package waiting to be signed off by China’s legislature, which convenes this week. The government is expected to announce infrastructure funding of as much as $563 billion this year, against the backdrop of the country’s worst economic performance since the Mao era. It will also include an expansion in the PLA’s budget to contain the “growing threat of US conflict“, as we discussed last night.
As Vital Knowledge points out in a note on Wednesday afternoon, “depending on how Beijing frames its tech ambitions around the NPC, this $1T+ blueprint could draw the ire of the White House and spur further measures aimed at inhibiting Chinese IT firms (recall the White House pushed hard for China to drop its prior “Made in China 2025” tech plan).”
- GOP Senators Issue Subpoena In Biden-Burisma Probe
GOP Senators Issue Subpoena In Biden-Burisma Probe
Tyler Durden
Wed, 05/20/2020 – 20:45The GOP-controlled Senate Homeland Security Committee on Wednesday voted to issue a subpoena to a Democratic consulting firm, Blue Star Strategies, which Ukrainian energy company Burisma Holdings paid $60,000 in November 2015 in connection with efforts to help end a long-running investigation in Ukraine. Burisma notoriously employed Hunter Biden to sit on its board – paying him upwards of $50,000 per month.
The vote to subpoena Blue Star was passed 8-6 along party lines.
Blue Star responded to the subpoena Wednesday in a letter to Johnson, writing that they don’t understand the need for a subpoena, as they have cooperated – or intend to cooperate – with the committee “at every opportunity” in what Democrats are calling a politically motivated probe.
Sen. Gary Peters of Michigan, the top Democrat on the Committee, said the committee should be focusing on the pandemic instead of Hunter Biden.
“We’re in the midst of a pandemic with over 90,000 people who have lost their lives, we’ve got an unprecedented amount of unemployment that’s sweeping across the country,” Peter told reporters. “We need to be focused on the crisis.“
But Johnson says that he’s moving forward with the investigation because people “need to know the truth.” –NBC News
In March, Johnson said he wanted to specifically address matters involving Andrii Telizhenko – a former Blue Star consultant who hid behind a nondisclosure agreement.
“Because Mr. Telizhenko’s records and information would be responsive to the committee’s requests, and Blue Star has refused to provide them, a subpoena to Mr. Telizhenko for these records is appropriate at this time,” read a March letter Johnson sent to members of his committee. “Accordingly, I will be scheduling a vote in the near future to approve issuing the enclosed subpoena.”
“Blocking the receipt of relevant records, as any committee member voting against this subpoena would be doing, only heightens the risk of ‘disinformation’ because Congress would not have access to all pertinent information,” he added.
Hunter Biden was paid upwards of $50,000 per month to sit on Burisma’s board while his father was Vice President, and Obama’s point-man on Ukraine policy – where he notoriously forced the country’s prior administration to fire a prosecutor investigating the energy giant.
Meanwhile, Hunter and his colleagues had multiple contacts with the Obama State Department during the 2016 election cycle – just one month before Joe Biden forced Ukraine to fire the prosecutor investigating Burisma for corruption, according to investigative journalist John Solomon.
During that February 2016 contact, a U.S. representative for Burisma Holdings sought a meeting with Undersecretary of State Catherine A. Novelli to discuss ending the corruption allegations against the Ukrainian firm where Hunter Biden worked as a board member, according to memos obtained under a Freedom of Information Act lawsuit. (I filed that suit this summer with the help of the public interest law firm the Southeastern Legal Foundation.)
Just three weeks before Burisma’s overture to State, Ukrainian authorities raided the home of the oligarch who owned the gas firm and employed Hunter Biden, a signal the long-running corruption probe was escalating in the middle of the U.S. presidential election.
Hunter Biden’s name, in fact, was specifically invoked by the Burisma representative as a reason the State Department should help, according to a series of email exchanges among U.S. officials trying to arrange the meeting. The subject line for the email exchanges read simply “Burisma.”
“Per our conversation, Karen Tramontano of Blue Star Strategies requested a meeting to discuss with U/S Novelli USG remarks alleging Burisma (Ukrainian energy company) of corruption,” a Feb. 24, 2016, email between State officials read. “She noted that two high profile U.S. citizens are affiliated with the company (including Hunter Biden as a board member).
“Tramontano would like to talk with U/S Novelli about getting a better understanding of how the U.S. came to the determination that the company is corrupt,” the email added. “According to Tramontano there is no evidence of corruption, has been no hearing or process, and evidence to the contrary has not been considered.”
At the time, Novelli was the most senior official overseeing international energy issues for State. The undersecretary position, of which there are several, is the third-highest-ranking job at State, behind the secretary and deputy secretary. And Tramontano was a lawyer working for Blue Star Strategies, a Washington firm that was hired by Burisma to help end a long-running corruption investigation against the gas firm in Ukraine.
Tramontano and another Blue Star official, Sally Painter, both alumni of Bill Clinton’s administration, worked with New York-based criminal defense attorney John Buretta to settle the Ukraine cases in late 2016 and 2017. I wrote about their efforts previously here.
Burisma Holdings records obtained by Ukrainian prosecutors state the gas firm made a $60,000 payment to Blue Star in November 2015.
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